Sitting of 21 June 1967

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

CARS FOR CITIES AND BETTER USE OF TOWN ROADS (REPORTS)
10.5 a.m.
The Minister of Transport (Mrs. Barbara Castle): The Reports on "Cars for Cities" and on "Better Use of Town Roads" which have been submitted to me are now available to hon. Members and will be on sale tomorrow. Hon. Members will wish to study them carefully, but it may be helpful to the House if I now give my preliminary reactions to the main conclusions.
Both Reports are concerned with working out further the implications of the Buchanan Report on "Traffic in Towns". They deal with two different aspects of the measures which are needed if we are to enjoy the maximum benefit from motor vehicles without destroying the whole environment in which we live.
In presenting the Smeed Report to Parliament on 10th June, 1964, the right hon. Gentleman the Member for Wallasey (Mr. Marples) indicated that further studies into methods of traffic restraint were desirable. These studies were, in fact, commissioned by my right hon. Friend the Member for Hamilton (Mr. Tom Fraser) through a group of Government and local authority officials and senior officers of police. Their findings are incorporated in the Report "Better Use of Town Roads" which analyses measures which can be taken in the short and medium term to combat the growth of traffic congestion.
The study entitled "Cars for Cities" was commissioned by the right hon. Member for Wallasey and approaches the problem from the other end; how can we design cars and other motor vehicles which can be used in our towns more conveniently and yet with less damage to the urban environment. From these Reports,
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it is clear that we need a policy with three elements in relation to urban traffic. First, we have got to expand the capacity of our urban road system in the coming years. A larger proportion of the resources available for expenditure on roads will have to be spent on urban road construction. I have already announced substantial urban road programmes which are in preparation for the early 1970s.
But demonstrably, the amount which we can afford to spend on urban roads is going to be far less than would be needed to accommodate all the traffic trying to use them. In any event the Buchanan Report demonstrated that this would be physically impossible. We must therefore also take steps to see that we relate the amount of traffic circulating in our towns to the capacity of the road system. The Report on the "Better Use of Town Roads" discusses ways of doing this.
The Report rejects the idea of wholesale bans on cars in town centres. I entirely agree with this view. The Report also confirms the view expressed by the right hon. Member for Wallasey, when he presented the Smeed Report, that over the next few years comprehensive parking policies would make a substantial contribution to controlling the growth of congestion. This is clearly right. The Report concludes that in the longer term the most effective way of relating traffic to the capacity of urban roads would be a form of road pricing in congested areas. I have already announced that we are undertaking further studies on this.
Responsibility for traffic management and, in particular, comprehensive parking policies, must rest with local authorities. In the Transport Bill, which I hope to introduce next Session, I shall place positive duties upon local authorities in these fields.
The "Cars for Cities" study was commissioned to advise on future trends in the design of power-driven road vehicles with particular reference to their use in towns. The study was under the general direction of a steering group headed by Lord Kings Norton with a membership that included the motor manufacturing industry and road user organisations. The Report is concerned with what might be done over the next 20 to 25 years to design vehicles of all kinds which would

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be more suitable for use in towns than the present ones. In particular, the Report shows that it will be possible to design small, specialised cars intended specifically for use in towns; and that these would reduce both the road space and the parking space needed for cars. But the Report also shows that the full benefits from using small, specialised cars can only be secured if they are segregated from larger vehicles.
Obviously the demand for new specialised city cars will depend to a large extent on what advantages their owners would gain from using them. One approach would be to see whether, by segregated parking for small cars, we could make it easier and cheaper to park small cars in towns. I am in touch with one or two local authorities to see if we can arrange practical experiments in segregated parking for existing small cars which will be a guide to what could be done with even smaller vehicles.
Segregation of road space for specialised city cars could range from setting aside existing streets or parts of streets for them in constructing new roadways which would probably, in town centres, need to take the form of light elevated roadways. All these ideas raise substantial problems of practical application. In particular, my Advisory Committee on Urban Research and Development was considerably disturbed at the possible effect of even a light elevated road network on the environment of our town centres. Moreover, we have to consider how far it would be right to divert resources from the improvement of our general purpose road network in towns to the construction of a segregated network for city cars. Nevertheless, it is clear that the benefits of segregation are such that we ought to have, as the Report recommends, a practical examination of the problems involved. This I have set on foot.
The Report also makes suggestions about taxis, buses and goods vehicles, which I am following up. It also considers other features of vehicles for town use in terms of increasing safety, reducing noise and lessening air pollution from exhaust gases. In all these fields I am considering policy and the recommendations of the Report are valuable back-
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ground. In particular, draft regulations on noise will be circulated in the next few days.
I am grateful to all who have contributed to these practical and imaginative Reports.
Mr. Webster: I join the right hon. Lady in thanking those who produced these Reports and congratulate her on having copies placed in the Vote Office just before her statement. When there are extremely urgent matters concerning British Railways, we are surprised that no statement has been made on those much more serious problems. Is the right hon. Lady aware that we will wish to consider this and to have an early debate so that we can discover her intentions about providing adequate capacity in cities or traffic, and that pools are no substitute for roads themselves?
Although it seemed reluctant, we welcomed her statement that she does not accept a wholesale ban on the private motor car in cities. Is she aware of the great urgency here? There is always reference to further committees and councils, but complete urgency is required and the appointment of a traffic commissioner or someone with individual responsibility would be a great step forward in making our cities more fit for people to drive in.
Mrs. Castle: Of course, the Reports were available in the Vote Office at 9 o'clock this morning for the assistance of hon. Members. I followed the same practice as was followed in the case of the Buchanan Report. I am only too happy for us to explore together these important and difficult problems, but the hon. Gentleman knows that a debate is a subject for the usual channels and not for me. With regard to the banning of cars in town centres, I have always made it clear that there is no question of that, because there are purposes and occasions for which the use of the private car, even in city centres, is entirely appropriate.
In this policy of examining how we can cope with this growing urban congestion, all Ministers of Transport, including my two predecessors, my right hon. Friend the Member for Hamilton (Mr. Tom Fraser) and the right hon. Member for Wallasey (Mr. Marples),

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have been driven by the sheer objective facts to the same sort of studies and conclusions that we are following.
Mr. Galbraith: The right hon. Lady said that she does not intend to ban motor cars from city centres—although this is perhaps a change of opinion from the time that she arrived late to open a school at Kidbrooke—but does she not intend to license motor cars coming into the centres? Could she give that undertaking? I mean not the normal tax licence but one which would prevent them coming into city centres.
With regard to the proposals for the light elevated roadways, has she any idea of the result in terms not only of increase in speed on the new roads themselves but, also because the traffic would be taken off them—the improvement on the old ones, particularly in relation to buses?
Mrs. Castle: I repeat that there has never been, by me or anyone else, a statement that we should ban cars from city centres. I have no proposals at present for supplementary licensing. We have by no means exhausted all the possibilities of more effectively administered parking controls and we are all agreed that that is the immediate best step to relieve congestion in town centres. I am afraid that I could not give an answer about the effect of segregation on the speed of existing roads. It would depend very much on how complete or extensive the segregation was.
Therefore, these are some of the practical problems with which it is difficult to deal theoretically, which is why we must have some more practical probing about what is implied in the far-eaching concept of the special city car on the specially segregated road.
Mr. Heseltine: One of the most forceful impressions which one gains from the very few minutes' study which we have been able to have of the Report "Better Use of Town Roads" is the Minister's words in the foreword, in which she refers, in dealing with the question—
Mr. Speaker: Order. Questions must be asked.
Mr. Heseltine: I apologise, Mr. Speaker. I was prefacing a question. Prompt action is needed in dealing with this. The Report, in conclusion 5, deals
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with parking, and I would ask the Minister whether she agrees with its statement:
"Control over the use of publicly available parking space might not be enough"—
Mr. Sepaker: Order. We cannot have quotations. The hon. Gentleman must ask the Minister some questions.
Mr. Heseltine: I apologise, Mr. Speaker.
Does the right hon. Lady agree that control over the publicly available public space might not be enough and ought to be extended, as outlined in conclusion 5? What progress is being made at the Road Research Laboratory with the experiments in the attempt to find a road pricing mechanism, as referred to in conclusion 9? Finally, in the Report "Cars for Cities", great stress is put on the advantage of a possibly much smaller car. Has the right hon. Lady any plans for such a unit? If so, in conjunction with which organisations?
Mrs. Castle: To take the last question first, as I am a little confused by the earlier ones, it would not be for me to develop the small car. Motor manufacturers were strongly represented on the steering group of the "Cars for Cities" working party and it was on the basis of their industrial advice that the Report concluded that it was possible to design a specialised car. It would be a matter of commercial judgment whether its production was worth while and that, clearly, would be influenced by the extent to which one was able to attach advantages to the ownership of such a car. As I said, the advantages would be related both to parking and to segregation of road space. That is why I said that both these matters should be probed more fully.
Mr. Hooley: Would my right hon. Friend agree that the problem of traffic in towns is closely linked with the concentration of employment in city centres, since the one journey which people must make is to and from work? Is this aspect of location of offices and industry in towns being specially considered in relation to this problem?
Mrs. Castle: Certainly it has been considered by the Government. This is why we have had the control over office development in London and in other big cities, but clearly we shall never solve

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the transport problems in our big cities independently of town planning as a whole, including office location, the siting of industry and the siting of residential areas. I attach very great importance to planning procedures as an aid to solving our transport problems.

DEVELOPMENT OF PLAY-GROUPS
10.20 a.m.
Miss Joan Lestor: I beg to move,
That leave be given to bring in a Bill to set up a joint authority of the Ministry of Health and the Department of Education and Science to promote, assist and support the development of play-groups for the pre-school child.
The purpose of this Bill is to combine the procedure of the two Departments concerned with immediate action which can be taken in order to provide facilities for the under-fives for play space and so forth, something which successive Governments have failed to do in the past. Anyone who looks at the 1944 Education Act today would expect that now, 23 years later, we would have seen an expansion of nursery schools and nursery classes and general play facilities for the under-fives, but what has happened—or rather what has not happened —is that we have a Circular in existence which virtually prohibits any extension in this field by local authorities on grounds of lack of finance and shortage of teachers.
In fairness to the present Government it should be said that one or two aspects of this matter have been dealt with which make it a little easier in certain circumstances for a local authority to provide a nursery school. Generally today, however, the proportion of our threes to fives who receive nursery schooling is no higher than it was before the 1939–45 war. This lack of development has gone hand in hand with something even more worrying. We have seen the growth of high blocks of flats with no facilities at all for the play of young children. We have a housing problem and houses in multiple occupation which means that children are not allowed to make much noise or have the play space facilities which they need.
One of the contradictions in our modern life is that local authorities are
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compelled to provide garages and parking space for cars but there is no compulsion upon them to provide facilities for our younger citizens. Because Government and local authorities have not been as active in this matter as we have every right to demand they should be, there has been the development of the play-group movement. Private individuals, some with qualifications and some without, have banded together to hire halls, often to use their own homes in order to try to make facilities available to the under-fives so that they can develop in the proper way. By these means children can use paints and plasticine, can make a noise and have a degree of social activity which is denied to them by those of us who have, or should have, the authority to make these decisions.
We know much more now about child development, yet we remain one of the few countries in which children start schooling at five or later and there is no provision for pre-school years. The play-group has developed from the private sector although some local authorities have helped. There is tremendous confusion about the amount of responsibility they have and the help which some local authorities can give to this movement. We have every reason to be thankful to the movement and to organisations such as the Save-the-Children Fund which have promoted this kind of activity for threes to fives and provided educational facilities for these groups. The groups are not under the control of the Department of Education and Science, but of the health authority.
Because of this, educational supervision and the setting of standards for these groups does not exist. The Department of Education and Science has no right of entry or right to interfere in what is taking place in the movement. In the past we have seen campaigns and many speeches have been made and many Questions asked in this House about when we can expect to see an expansion of nursery schools. The Plowden Report laid particular stress on this. Most of the replies have been encouraging and it may be that the Department of Education and Science is seriously thinking about doing something in this matter.
One thing which is certain is that we are not likely to get a full development

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of nursery schools within the next five, 10 or 15 years. So we and the Department of Education and Science must look at what has taken place in the private sector to see if it can be brought up to standards acceptable to local authorities which could then open establishments themselves. The play-group movement is a health responsibility, not an educational responsibility. I think it should be both. My Bill is designed to set up a joint authority whereby the Department would have powers of inspection and could lay down standards for existing play-groups and, more importantly, could encourage and if necessary subsidise local authorities to do this work. If we do not take action now for the under-fives, generation after generation of our younger citizens will continue to be deprived of these facilities which it is incumbent upon us to see that they receive.
I should therefore like to have included in any consideration of the Bill that the play-group movement and development and promotion of play groups by local authorities under a general health and education authority should be seen not as an alternative to nursery schools but as a provision until we can have nursery schools and nursery classes for all children accepted by the Government. That seems to be fairly far distant, but the encouragement and promotion of play-groups by local authorities could start to fill the gap. It would not be expensive. The equipment involved would not need to be expensive and the project would not draw from the pool of qualified teachers which for so long has been the excuse made against the development of nursery schools.
Many play-groups are run by people who are not teachers and who have not had a great deal of training in the care of young children. They have availed themselves of advice and in some instances of short training courses which one or two local authorities have thought it worth while to introduce. This is something which should be thought about by the Department. The play-group movement must be seen as distinct from nursery schools. If it is thought necessary special training facilities should be
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provided by certain educational institutions so that women, and men if necessary, who are interested in the under-fives and would like to assist in running the groups may do so.
Other ways by which this can be done include having highly trained persons in charge of groups in their areas with the help of people who are not well trained but are willing to be trained. This may bring some criticism from those who are anxious, as I am, to see the full development of nursery schools. I accept that criticism, but if play-groups can be seen as distinct from nursery schools, not as educational establishments but play establishments, it can be argued that they are not militating against the development of nursery schools. The campaign for nursery schools throughout the country must go on. It is essential that the play-group movement should be developed and facilities provided for the under-fives.
I make this plea this morning because the provision of these facilities for the under-fives has been ignored by successive Governments. I hope that the House will give leave for the Bill to be introduced and will recognise the playgroup movement as a social service rather than an educational movement. If this is done we can begin to make provision for our younger citizens and the public, particularly young móthers, will see that the Labour Government are interested in child development and are prepared to do something about it.
Question put and agreed to.
Bill ordered to be brought in by Miss Joan Lestor, Dr. David Kerr, Mrs. Gwyneth Dunwoody, Mr. Hector Hughes, and Mr. Neil Carmichael.

DEVELOPMENT OF PLAY-GROUPS
Bill to set up a joint authority of the Ministry of Health and the Department of Education and Science to promote, assist and support the development of playgroups for the pre-school child, presented accordingly and read the First time; to be read a Second time upon Friday, 30th June, and to be printed. [Bill. 289.]

AGRICULTURE (INVESTMENT GRANTS)
10.31 a.m.
The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. John Mackie): I beg to move,
That the Agricultural Investment (Variation of Rate of Grant) Order 1967 (S.I., 1967, No. 825), dated 24th May 1967, a copy of which was laid before this House on 1st June, be approved.
This Order, which is made under Section 34 of the Agriculture Act, 1967, gives effect to the increased rates of agricultural investment grants which were announced and debated on 17th January, 1967 during the Report stage of the Bill.
We are concerned here only with increases in the grants payable under Sections 31 and 32 of the Act. Section 31 provides for a 10 per cent., grant for fixed equipment, fixed plant and machinery and for long-term land improvements which do not attract other grants. This grant will now be increased to 12½ per cent. for expenditure incurred between 1st January, 1967, and 31st December, 1968. The Order also provides for an increase from 10 per cent. to 15 per cent. in the grant payable under Section 32 for new tractors and self-propelled harvesters, effective over the same period. These increases, which apply throughout the United Kingdom, are expected to cost between £2½ million and £3 million in a full year.
The higher incentives for which this Order provides for this two year period correspond to those announced for industry by my right hon. Friend the President of the Board of Trade in December last. The increased industrial investment grants were announced following signs of a prospective fall in private industrial investment for 1967. In the agricultural sector we were also concerned about the possibility of a drop in agricultural investment. In particular, there were indications of a special need for some additional incentive in the case of tractors. After a promising start early in 1966, there had been a steep fall in sales which had led to some short-time working in the tractor industry. It was for this reason that we decided in providing these increased incentives to place the main emphasis on the grant for
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tractors and harvesters, raising it from 10 per cent. to 15 per cent. I am glad to say that the position has already improved. Firms which were working short time are now back on a full week and sales show signs of recovery.
We also felt that there was a good case for temporarily increasing to 12½ per cent. the rate of grant for fixed equipment. This will assist fixed investment of a kind which does not attract grant from any other source.
While, as I have said, these increases correspond to the increase in investment grants for manufacturing industry I must make it clear that it is not the intention that these agricultural grants should be automatically altered whenever there is a change in industrial investment grants. The needs of agriculture will have to be considered on their merits, as they have been on this occasion.
The higher rates of grant provided by this Order are important and valuable. Together with the additional encouragement to production given in this year's Price Review, they should provide a worthwhile additional stimulus to investment necessary to secure the selective expansion which we need.
10.35 a.m.
Mr. Bryant Godman Irvine: We on this side of the House welcome the increase which the Joint Parliamentary Secretary has just announced. I have only two questions. First, the Order increases the rates of grant which was set out in the Agriculture Act. I have not been able to trace the way in which the power has been given to pay that grant. I am sure that there is a simple answer to this question, but as we are increasing the grant it would help if the hon. Gentleman could tell us.
Secondly, the hon. Gentleman said that the rates have been increased under two heads, the first of which is Section 31 relating to fixed equipment. Can he give us the figures of what has been happening in respect of fixed equipment? I have the figures for 1960–65, but not those for 1966. In 1960–65 investment in fixed equipment rose from £45 million by progressive stages to £68 million. The House would be interested to hear the 1966 figures, if the hon. Gentleman has them.

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The second head is Section 32 relating to agricultural tractors. The hon. Gentleman said that there had been a steep decline in home sales. The figures are worth setting out. The hon. Gentleman might have mentioned that the figures fell from 14,563 in the first quarter of 1966 to 6,736 in the fourth quarter of 1966, representing a fall in value from £11·3 million to £6·5 million, a very steep decline over one year. In the fourth quarter of 1965 12,705 tractors were sold at home as compared with the 6,736 in the fourth quarter of 1966. The decline has been progressive—14,000 in the first quarter, 13,000 in the second, 8,000 in the third, and 6,736 in the fourth. It would help the House if the Parliamentary Secretary would explain what has been happening since then. With those observations, on behalf of the Opposition I welcome the increase.
10.37 a.m.
Mr. James Davidson: I have one question concerning the definition of "fixed equipment". I am not trying to make things awkward for the Joint Parliamentary Secretary, but what instructions are being given to the Departments about this definition? What will be eligible for the grant?
I declare an interest. At the moment I am trying out, partly as a test case, an application for a grant on a piece of fixed equipment which may be typical of many problems which will concern the Department of Agriculture in Scotland and the Ministry of Agriculture, Fisheries and Food in England. It is of a type which is specifically designed for something which is undoubtedly fixed, like a sealed grain store, but which might be removed in winter weather when not in use, for fear of deterioration from rust and wind, and which can be re-fixed in its operating position when required for use. It is the type of equipment that might not or could not be used for any other purpose. Would such a thing within the meaning of the Order be classified as fixed equipment? This is a definition which will have to be made sooner or later.
10.38 a.m.
Mr. Hector Monro: Does the Joint Parliamentary Secretary intend to adhere to the nonsensical regulation that a tractor must be registered before the
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grant can be paid? This materially reduces the grant over the years, if the licence fee has to be paid each year. Is not a receipt from the agricultural engineer who sells the tractor adequate? Is it not unnecessary to have to provide registration particulars? On many farms only one of the tractors need go on to the public highway and the vast majority of the tractors, or even the two or three other tractors, normally stay on the farm and work in the fields. Further red tape and expense are here being pushed on to farmers unnecessarily.
Can the Joint Parliamentary Secretary assure the House that the purchase of a tractor costing £800 on a reasonably profitable farm will, under the new system of grant, make the farmer materially better off than he would have been if we had continued the previous system of depreciation and investment allowances, which suited some forms of book-keeping and accountancy very much better than the new method?
10.40 a.m.
Mr. John Mackie: The hon. Gentleman the Member for Rye (Mr. Bryant Godman Irvine) asked where the statutory provision was allowing us to make payment of the grant. The relevant provisions are in Sections 31 and 32 of the Agriculture Act, 1967. He asked, also, about the value of fixed equipment. I cannot give the figures off the cuff, but I shall find them out and let the hon. Gentleman have them.
The hon. Gentleman referred to the steep decline in tractor sales. Tractor sales vary considerably from month to month and from one part of the year to another. The early part of the year is the main time for tractor sales. The figures for the first quarter of this year show an improvement. We have not got figures for this quarter, but, if the improvement carries on, considerable recovery will be shown. The main point is that short-time working on tractor production has stopped. That is the best information I can give.
Mr. Bryant Godman Irvine: Could the hon. Gentleman give the figures for the first quarter of this year?
Mr. Mackie: In January 3,084; in February 3,794; in March 5,481. They

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are coming up, though not up to the 1966 figures.
The hon. Gentleman the Member for Aberdeenshire, West (Mr. James Davidson), raised the question of the definition of fixed equipment. I understand the difficulty here, but he will appreciate that we must have a scheme which we can administer. If it were too loosely worded, so as to cover equipment which could be fixed in a temporary sort of way and then removed and, perhaps, sold straight away, the Treasury would be on our top at once, as the hon. Gentleman knows. Practically everything of a permanent nature which is fixed for its job comes in for grant. We have issued instructions to our officers in the field, and they will be fairly flexible where there is doubt about a particular machine. I gather that the hon. Gentleman has a certain case in mind. I think that the appropriate expression there is that it is sub judice. We look forward to seeing the result of what is happening.
The hon. Member for Dumfries (Mr. Monro) raised again the question of our insisting on registration for licensing purposes, saying that it was nonsense. Again, I emphasise that we must have a simple and administrable scheme. Hon. Members opposite are always on our tops saying that things must be simple, should not require a lot of civil servants and should be straightforward to administer, yet, when we produce a simplified scheme, they complain bitterly. They cannot have it both ways.
We must have a scheme under which we can trace the machinery, and the simple way to do it is through the log book showing that the vehicle has been licensed. As the hon. Gentleman knows —or, perhaps, he does not know; I suspect that he does not because he is always raising points like this and saying that we are talking rubbish—"six-mile" registration, without payment of the licence fee, is available for any industrial as well as any agricultural machine, so that we might find ourselves paying grant to someone who did not use his machine for agriculture at all. The log book, on the other hand, shows that it is an agricultural machine. This is a necessary requirement, and I cannot emphasise too much that it must be done in this way
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in order that we may have a record of the machine all the time. As the hon. Gentleman knows, the tractor grant is not paid out until the end of two years, a reasonable period.
Mr. J. B. Godber: I am following the Minister's argument carefully, but he has not explained why he says that this is such a simple scheme. I accept the need for simplicity, but how is the present system more simple than the old investment allowance system which farmers had before?
Mr. Speaker: Order. We cannot discuss the merits of the two systems now. I know that the right hon. Gentleman appreciates this. We are considering only the variation of the rate of investment grant.
Mr. Bryant Godman Irvine rose—
Mr. Speaker: Order. The hon. Gentleman has exhausted his right to speak.
Mr. Godman Irvine: I was hoping that I might intervene to help.
Mr. Speaker: The hon. Gentleman may ask a question before the Minister has sat down.
Mr. Godman Irvine: I thought that I was doing that, Mr. Speaker. I did not understand that he had finally sat down. Has the hon. Gentleman anything to say about fixed equipment under Section 31 and what the level of investment has been in 1966 or since?
Mr. Mackie: I said that I could not give the figures off the cuff, but I shall let the hon. Gentleman have them.
Mr. Monro: Before the hon. Gentleman sits down, I must reject his argument that the requirement which he makes is more simple than production of a receipt issued by an agricultural engineer showing that an agricultural tractor has been bought. Why should a farmer have to produce the log book as well?
Mr. Mackie: If the machine is licensed, the log book shows if it has an agricultural licence. I do not imagine that many people would want to get round the scheme in order to get a grant, but the hon. Gentleman knows that there are ways and means of doing this sort of thing. I do not suggest that we have a cast-iron system now, but if we did

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not insist that the machine was licensed it would be possible to produce a receipt showing that the machine was an agricultural tractor although it was, in fact, used for industrial purposes. Anyone could do that. Our purpose must be to keep the grant for agricultural machinery.
Mr. Monro rose—
Mr. Speaker: Order. The Minister has finally sat down.
Question put and agreed to.
Resolved,
That the Agricultural Investment (Variation of Rate of Grant) Order 1967 (S.I., 1967, No. 825), dated 24th May 1967, a copy of which was laid before this House on 1st June, be approved.

AGRICULTURE (CALF SUBSIDIES)
10.46 a.m.
The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. James Hoy): I beg to move,
That the Calf Subsidies (United Kingdom) (Amendment) Scheme 1967, a draft of which was laid before this House on 10th May, be approved.
All that this Amendment Scheme does is to give effect to the increase of £1 a head in the subsidy for calves announced in this year's Annual Review. This increase is to apply to calves born on or after 1st January, 1967, so as to include all spring-born calves.
I should, perhaps, draw attention to the fact that the Scheme we are amending covers calves born only up to and including 29th October, 1967. A new Scheme will be required to continue the payment of subsidy on calves born after that date and to provide for the alternative form of payment permitted under Section 10 of the Agriculture Act 1967. In other words, it will provide for the payment of the subsidy on the carcase of any steer or heifer born in the United Kingdom provided that it is certified on a deadweight basis as eligible for the fatstock guarantee and that payment was not made on the live animal when it was a calf.
These payments have been made over the past 18 months under the authority of the Appropriation Act. In the mean-
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time, I invite the House to approve the amendment of the existing Scheme necessary to authorise the higher subsidy for calves born within the period covered by the existing Scheme.
10.48 a.m.
Mr. Michael Jopling: We are grateful to the Minister for explaining the purpose of this Amendment Scheme, but I must put to him a preliminary matter of some importance. Will he convey to the Leader of the House knowledge of the difficulties which many hon. Members have in attending business this morning on these three Agricultural Orders at a time when the Select Committee on Agriculture is meeting for a most important session? I say no more about it, but I hope that he will tell his right hon. Friend of the great difficulties which many of us are in. My hon. Friend the Member for Rye (Mr. Bryant Godman Irvine), my hon. Friend the Member for Torringtón (Mr. Peter Mills), who hopes to speak on the next Instrument if he catches your eye, Mr. Speaker, and I myself are all members of the Select Committee, and we have been put in the greatest difficulty this morning.
This is the first time for two years that the House has had a chance to debate the Calf Subsidies Schemes, and this Amendment Scheme alters the 1965 Scheme, which lasted for three years. It is worth while this morning looking at the background to the changes proposed. They were first suggested in the Price Review a few months ago, and it is as well to recall what the Minister said in paragraph 23 of his Price Review White Paper:
"As regards the beef herd, confidence needs to be restored and some further incentive is required if the rate of expansion is to be maintained.… The Government have therefore decided … to increase the calf subsidy by £1 a head which will encourage further retentions of calves".
Therefore, this Amendment Scheme is one of the measures taken by the Government to deal with the crisis last winter that was of their own making.
I am very surprised that the Joint Parliamentary Secretary did not tell us what was going on to encourage further retention of calves, and what was happening to restore the confidence referred to in the Price Review White Paper.
Mr. Speaker: Order. The Minister could talk only about this Order, as the hon. Gentleman can.
Mr. Jopling: I am sorry, Mr. Speaker, but I felt that this was an important part of it.
Perhaps I could ask a specific question with regard to the estimates of the cost of the Scheme in 1967–68. In the Price Review White Paper it was suggested that the total cost would be £25·5 million. Yet a Written Answer which I received this week contains an estimate for 1967–68 of £26·7 million. That is a considerable increase in the estimates in the past two or three months, and perhaps the hon. Gentleman could give an explanation.
Perhaps he will also tell us the Government's basic strategy in increasing the calf subsidy in this way. When the increase was announced the probe to join the European Economic Community was under way, and if we enter it the calf subsidy might have to go and the return on the finished product for beef would be increased. In the Price Review the beef subsidy was increased by only 5s. a cwt., whereas the calf subsidy has been increased by £1 a head. We have not yet had an explanation that I have been able to trace to show why the Minister is working in a rather opposite direction to the trend which might be expected if we were to join with Europe. I hope that we shall have an answer on that point.
I should like to make a few remarks about the system of inspection by the Minister's inspectors when the calves are certified for subsidy. In my experience the work is usually well done, and I think that the arbitration is reasonably fair. I understand that the Meat and Livestock Commission will take over the administration and supervision of the Calf Subsidies Scheme, whilst the payment and enforcement side will remain with the Minister. Who will be the chairman of the Commission? We have waited some time to know, and is the person who will ultimately be responsible for the administration and supervision of the Scheme.
In the 1965 Scheme there was provision for the removal of the minimum age of calves to receive subsidy, but we were told at that time that inspection
1648
would not take place in general until eight months, though calves for the autumn sales might be inspected at six months, and we were told by the hon. Gentleman then that inspectors might come just a few days before. It would seem that for inspection for subsidy it would be better if there were a greater degree of latitude for the Minister's inspectors. Will the hon. Gentleman examine this and tell us whether he can grant a greater degree of tolerance to his inspectors?
The hon. Gentleman referred to the provisions to cover heifers, which were introduced some time ago. In the original Scheme which this Amending Scheme changes there is a specific exclusion under Stage A for Jersey, Guernsey, Friesian and Ayrshire heifers, which cannot receive the calf subsidy when the animals are alive. The Ministry has been asked this question before but has never given us an answer: why is not the Dairy Shorthorn breed excluded? It seems rather a strange omission and rather odd that whereas Friesians are specifically excluded when alive at Stage A of the scheme the Dairy Shorthorn is not.
The hon. Gentleman referred to Stage B with regard to the way in which the subsidy can be given to a carcase provided it qualifies for the beef deficiency payment. This is not a very satisfactory system at the moment. During the Committee stage of the Agriculture Act, 1967 the Joint Parliamentary Secretary, the hon. Member for Enfield, East (Mr. John Mackie), referred to it as a rough-and-ready method of assessment because of the time lag between the date of birth and slaughter. It is a rough-and-ready method. How is it working out? Nobody has been able to produce a better alternative, but would not the hon. Gentleman agree that it would be much simpler if all these animals could be passed for the beef subsidy when alive at Stage A, as laid down in the original Scheme of 1965?
It would get over a great number of problems, for instance, if the inspectors when they come round to certify calves for the subsidy could in some way—perhaps by a simple form of injection—sterilise heifers so that there is no chance that they could creep back into the dairy herd. We all agree that we do not want

1649
that to happen, and that is why we must have Stage A and B. If there were a simple method of sterilising heifers permanently when they are passed for subsidy it would get us over a great number of difficulties.
I have asked the hon. Gentleman a number of questions and I hope that he can give answers, because some of them have been rather evaded over the past couple of years. We should be grateful to know his views.
10.57 a.m.
Sir Frank Pearson: I think that every time the Minister hands out more taxpayers' money to agriculture there is wide support from both sides of the House, and this morning is certainly no exception. I welcome this increase in the calf subsidy, but I have a doubt at the back of my mind that we may be reaching a size of subsidy of this nature which must make us ask whether such assistance could not be given much more effectively, easily and cheaply to the industry by raising the subsidies payable on the final product.
Mr. Speaker: Order. I am being very generous this morning but we must debate only this Order, under which we are deciding whether the subsidies under the parent Scheme shall be increased. That is the subject of the debate.
Sir Frank Pearson: I am sorry, Mr. Speaker. I shall try to keep within the Scheme. I shall leave the wider question of whether the subsidy might not be better paid on the end product and touch briefly on the point raised by my hon. Friend the Member for Westmorland (Mr. Jopling) about the administrative difficulties that sometimes arise in the payment of the subsidy. I hope that that will be in order.
Anyone who has had practical experience of grazing beef calves from a dairy herd which is calving over the six months of the winter, with probably the predominant part calving before Christmas and a certain proportion calving after Christmas, knows the difficulties involved with the existing age limitations at which the calves may be passed for the increased subsidy. I fully support my hon. Friend's request that the question of the minimum age for passing calves be given close scrutiny. In many cases it means that instead of all the product of a herd
1650
being passed at one visit from the Ministry's officials two visits must be paid. That must be a waste of time for the officials and the farmer concerned. I therefore hope that the Minister will see whether it is possible to lower the age, perhaps to six months, which would greatly facilitate the administration of the Scheme.
11.0 a.m.
Mr. James Davidson: I welcome the Scheme which, I believe, will provide the necessary incentives for increased beef production. I have frequently asked a question—not in the House, although I am sure that it has come to the Minister's attention—to which I have not received a satisfactory reply. I want to know what is the official thinking behind the differential on the payment of the heifer and stot price, bearing in mind that it is a matter of luck as to which arrives and that a loss will be made when the heifer is sold at six months or later, anyway.
11.1 a.m.
Mr. Paul Hawkins: I, too, wish to express my gratitude for some extra money being made available to the beef industry. This money may very shortly be badly needed. The price of beef has recently been dropping again and anything that we can do to increase returns to the beef producer must be to the good. However, like other hon. Members, I am not sure that this is the way to tackle the problem.
Most farmers would, I suggest, prefer an increase in the end price. In this connection, I should like to know whether the Minister has discovered if the number of stock has, in fact, been increasing as a result of the various incentives that are offered. Does he feel that the future price for beef will be sufficient? I am referring to the market price, along with the subsidy, and I want to know whether he considers that these amounts will keep the beef industry in a proper and viable state. In my constituency it is in a very unhealthy state.
Despite the calf subsidies and other incentives, more and more farmers are going out of beef production. I therefore do not believe that this proliferation of the different forms of subsidy is tackling the problem in the right way or is

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likely to lead to the amount of increased production we need.
11.3 a.m.
Mr. Hoy: I assure hon. Members that their remarks about the difficulty of meeting in the morning will be noted. In view of the prolonged discussion about birds which took place last week, the House must accept that hon. Members on both sides wish to debate their various interests. I give an assurance that the remarks and complaints made today will be noted.
Although reference has been made to the European Economic Community, I cannot find anything in the Scheme which would enable me to discuss that subject. I have no doubt that hon. Members will wish to discuss it on another occasion, but certainly it cannot be discussed today.
We are discussing one of a number of measures taken by the Government to try to restore confidence in the industry. Questions have been asked about the cost. I know that the estimate of last year was a little high, but we have increased the estimate this year by about £1 million to meet the new need.
I hope that hon. Members will not have to wait much longer for an announcement about the appointment of the chairman of the Meat and Livestock Commission. The House will agree that we must obtain the best man for the job. He will be performing an extremely important task and it must, therefore, take us some little time to find a suitable chairman. However, I assure hon. Members that they will not have to wait much longer for this announcement.
The question of inspection was discussed fully in our earlier discussion. We felt that the time laid down was about right. We are not aware of any general dissatisfaction with the way in which the Scheme is operating. Some complaints have been received from Surrey, and these are being investigated. Generally speaking, however, the Scheme appears to be working fairly well. If we went in for earlier inspection, that might mean a return visit on the part of our inspectors, which might result in more time being spent than is the case at present. I should have thought that those who are interested in getting the
1652
Scheme working efficiently will appreciate that a considerable sum of money is involved in this operation.
I was then asked why the dairy shorthorn had not been specified. The answer is that it is regarded more as a beef animal. That is why it was not specified in this way. To answer the question about whether all animals could be certified at Stage A by a sterilising process—to ensure that they were not passed back to the herd—I assure the House that this and other suggestions are considered. However, the Department considers that, so far, the Scheme has, on the whole, been working satisfactorily.
The hon. Member for Aberdeenshire, West (Mr. James Davidson) wondered why a distinction was made between the two breeds of animal. I am informed that the heifer usually kills out at much less a weight and, hence, a difference in price results. I was asked whether this policy was bringing us into line with the E.E.C. As I said at the outset, I do not wish to go into that subject today, particularly since it has nothing to do with the Scheme.
I am grateful to hon. Members for expressing their welcome for this extra money. Not everybody agrees that the farming community should be given more. It is my job to prove that it should, and I hope that I have done that today.
Question put and agreed to.
Resolved,
That the Calf Subsidies (United Kingdom) (Amendment) Scheme 1967, a draft of which was laid before this House on 10th May, be approved.

AGRICULTURE (TRACTOR CABS)
11.8 a.m.
Mr. Hoy: I beg to move,
That the Agriculture (Tractor Cabs) Regulations 1967, a draft of which was laid before this House on 31st May, be approved.
I commend these Regulations to the House as a much needed method of dealing with what is probably the most serious problem of safety in agriculture; the overturning tractor. In the past 10 years 423 people have been killed when their tractors overturned, about one-third of all the fatalities in agriculture. Last year the number was 53, nearly two-fifths of all the fatalities in the industry.

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We therefore have a problem which is certainly getting no better and which is, perhaps, getting worse. It is impossible to say for certain how many people survive overturning tractor accidents, but it can be said that they are not many. It is clear that if we can find a way of stopping two-fifths of the fatal accidents in agriculture, we must take it; and I hope there will be no dispute about that.
When the House considered the draft Field Machinery Regulations in 1962, the then Parliamentary Secretary said that consultations had already begun to see whether this problem could be tackled by Regulations requiring the compulsory use of safety cabs on all tractors driven by employed workers. There is, therefore, no difference of opinion between the parties on the need for Regulations, if they are the best means of dealing with the matter.
In the past few years my Department and many other organisations have used every means in their power to try to bring the seriousness of the problem home to the farming community and to all those concerned with agriculture; but the number of overturnings has not decreased. This is not because the members of the agricultural community are irresponsible or inattentive so much as because there are such a large number of possible causes of overturning, and it is often due to a brief moment of carelessness by someone of considerable experience and skill.
It seems clear to us that exhortation is not enough. A solution of the problem might conceivably come one day through a fundamental redesigning of the tractor, which has changed little in its essential form in the last 40 years. Research of this kind is going on, but it is an extremely long-term business and may not produce any useful results in the end.
We have to act now if we want even to reduce the number of deaths in the next decades, let alone to end them.
It may well be that the tractor has changed little because its present form is the best suited to the many tasks which it has to perform. I do not accept that the addition of a safety frame will have any significant effect on the tractor's centre of gravity. It will certainly have less effect than many of the attachments
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that are at present used on tractors to perform different farming operations.
We have at least one example before us which I think it would be folly to ignore—that of Sweden. Regulations very much on the lines that we are proposing were introduced in Sweden in 1959. Before they came into force there was a serious death roll there from overturning tractors. Since then there has only been one death, and this was of a man who tried to jump clear instead of letting the safety cab protect him.
I have given the reasons why Regulations are needed. I now turn to what the proposed Regulations would do. The main provision would prevent a new tractor being sold or let on hire to anyone who was going to use it in agriculture, unless it was fitted with an approved safety cab or frame. It would lay on the employer the obligation to ensure that every tractor driven by a worker was properly fitted with an approved safety cab or frame, and on the worker an obligation not to drive a tractor that was not properly fitted with such a cab or frame.
These provisions are contained in Regulations No. 4 and No. 5. All the other provisions are really ancillary to these and I will mention only the main ones.
In what I say hereafter, perhaps I may use the word "cab", as the Regulations do, to include a frame. The Ministers will be empowered to approve models of safety cabs by means of a certificate of approval after they are satisfied that the model will meet, in respect of a particular type of tractor, the British Standard Specification for the Safety Requirements and Testing of Safety Cabs and Safety Frames for Agricultural Wheeled Tractors. The approved safety cab will have to be marked with the approval mark and the name of the make or model of the tractor, or tractors, for which it is approved. These provisions are contained in Regulation No. 3.
Regulation No. 7 restricts the application of these marks to the manufacturer, unless the consent of the appropriate Minister is given in writing to some other person applying the marks.
Regulation No. 6 lays on the worker the obligation to report all overturning accidents and all damage to the safety

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cab or its fittings to his employer. This will enable the employer to ensure that the cab is still in a state fit to use since Regulation No. 3(5) lays down that
"… an approved safety cab shall cease to be approved if it is materially changed as a result of damage, alteration, neglect or any other cause."
These are the basic provisions of the Regulations.
Regulation No. 5(4), however, provides very important exemptions. They set out the circumstances in which tractors may be used without safety cabs if it is not reasonably practicable to carry out the agricultural operation concerned with a cab fitted. These exemptions must mean some weakening of the Regulations. It is impossible to be certain that the risk of fatal accidents has been eliminated unless all tractors are fitted with safety cabs, but the risks must be balanced against the realities of the situation and what is economically and physically practicable.
It is clear that there are some kinds of agricultural work in which, particularly at certain times of the year, it is not practicable to use a cab without damaging the crop or getting stuck or knocking a hole in a building or simply not being able to do the job at all.
We have exempted what seem to us and to those we have consulted the really difficult cases—orchards, hop gardens, and work in or near buildings and driving to and from these. But these exemptions apply only to cases where it is not reasonably practicable to use a safety frame.
It would not, therefore, be sensible to carry the exemption back to the sale of tractors, since the responsibility for ensuring that the tractor is sold with a properly fitted and approved safety cab must be laid on the seller, and he could not possibly satisfy himself that any particular tractor would be used only for exempt operations, nor could the buyer honestly give such an assurance.
The exemptions are certainly necessary, but we have had to consider them with great care since clearly if exemptions are drawn too wide the whole purpose of the Regulations will be defeated.
We did not consider, for example, that we could exempt a whole operation if
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merely one part of it was carried out in a low building—for instance, the mucking out of a pig sty and the carrying of the muck for spreading on a field some distance away. This is a distinct agricultural operation and the risks of the tractor overturning are in no way affected by the fact that the muck has come from a low building.
It is clear that in some cases the Regulations will call for changes in farming practice, but we are allowing reasonable time for these changes to be carried out, and in our view they are a small price to pay for the saving of human life that will result.
Regulation No. 8 includes provisions for the Ministers to grant specific, as distinct from general, exemptions from the Regulations. The main use of this power will be for research and development, but it may also be used sparingly for cases in which a specialised operation or piece of equipment can be shown to render the use of a safety cab impossible.
I think I should stress that these cases are expected to be few. Manufacturers are well aware of the design requirements imposed by the multifarious uses of the tractor, and the British Standard includes provisions for the testing of cabs in conditions of practical use.
The final main point is the dates of coming into operation of the various Regulations. The Regulations dealing with approval and marking will come into force at once so that any cabs that have already been produced and are satisfactory can be granted a certificate of approval as soon as possible.
The Regulations will apply to new tractors in three years' time. This is the minimum time it will take to get sufficient production to have approved safety cabs available for all new tractors. There are considerable problems of design and production and I am satisfied that it would be unreasonable and impracticable to lay down a shorter period.
So far as used tractors are concerned —that is to say, tractors which have already been sold for use in agriculture by the purchaser before 1st September, 1970—the obligations on farmers, workers and those who hire out tractors will not come into operation for a further seven years. This may seem a long time,

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though the National Farmers' Union has suggested to us that these tractors should never be covered.
What we think has to be done is to strike a balance between allowing tractors to be used by workers in agriculture without safety cabs indefinitely and diverting resources to the provision and expensive testing of cabs for a small number of different types of obsolescent tractor. Some fairly arbitrary date had to be chosen, and 10 years seems not unreasonable.
Mr. John Brewis: Are these safety cabs freely available on the market at present?
Mr. Hoy: I was not saying that they are freely available. We think that it would take some time to have them ready to meet the whole of our needs.
At that time, most used tractors will be at or near the end of their useful life, and the final implementation of the Regulations should then be achieved with the minimum of dislocation and expense.
This is, of course, the statutory timetable. I hope many farmers will, in the interests of their workers and their own peace of mind, use tractors fitted with safety cabs or frames as soon as they are reasonably available. I think that that goes part of the way to meet the hon. Gentleman's point.
The officers of both the agricultural Departments will, of course, always be ready to help and advise farmers, manufacturers, dealers and anyone else who may be concerned. In the course of the period in which these Regulations have been under consideration, we have consulted all the interested organisations and have been able to meet the great majority of the points raised. I think we have reached a wide measure of agreement and I want to express our thanks and say how grateful we are to all those who have been able to help us.
The National Farmers' Union, though accepting that the modifications that have been made have taken into account many of the points it put forward, still thinks that the proper solution is more research into tractor design. As I have said already, we think that the problem is too serious to wait for the uncertain results of such research.
We recognise that the point where the balance is struck between the need to
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save life and the avoidance of significant extra expense and interference with agricultural practice is bound to be a matter of opinion. We have considered these questions very carefully for a long time. There is certainly no question of any hasty action, and we think that we have got it as right as it can be got. I am fairly confident that during the next 10 years the members of the N.F.U. will come to share our opinion.
These Regulations will be the eleventh set made under the Act of 1956. I think that they are among the most important. The overturning tractor is the greatest single killer in agriculture. I am confident that these Regulations will curb and eventually cure this extremely serious problem. With the utmost confidence, I commend them to the House.
11.25 a.m.
Mr. Peter Mills: We welcome the new Regulations which the Minister has brought before the House this morning. They will go some way to reduce the number of accidents and fatalities on British farms. We have some reservations, but they are a step in the right direction. On many occasions in the past, I have raised this problem in the House, as have other hon. Members. At least something is being done to overcome these tragic accidents.
Over the years, there has been a gradual increase in the number of accidents on our farms. In my own constituency, there were three last year, which is a sorry story, and I shall never forget the screams of a man as he came down a hill with his tractor out of control and subsequently was killed. That accident made a lasting impression on me, and it is one reason why I have raised the question so constantly in the House. The Regulations are designed to try to stop this appalling waste of life, because, unless something is done, this type of accident will occur more frequently. We are seeing more mechanisation on our farms, and the need to use every inch of ground will mean that there probably will be more accidents in the future. These Regulations will become more important as the years go by.
I am still unhappy about the problem of fields on very steep hills, which occur frequently in the South-West. They are known to be dangerous, and I feel that the use of four-wheeled tractors on

1659
them should be banned. I appreciate that legislation is impossible, but farmers and employees should be warned that, in spite of safety cabs, tractors should not be used on such fields.
Even with the coming of these Regulations, education is still the major factor in reducing the number of accidents, because no amount of safety devices will help unless farmers and farm workers are educated in the right ways of using their tractors and the implements provided. Some may feel that the Regulations are unnecessary and, to use a common word, "cissy". We should do well to remind such people that these accidents happen very suddenly, and it is wise to be prepared. Farm workers and farmers need to be educated that, even with safety cabs, risks must not be taken. The danger spots are still turning sharply on sloping ground, working on silage pits and on very steep fields, which I have mentioned, and using tractors with worn and smooth tyres which, because of the high cost of tyres, is becoming more and more common these days. I hope that the educational campaign which the Ministry conducts in co-operation with other bodies will continue.
Turning to the Regulations themselves, I wish to ask the hon. Gentleman a few questions. For example, why is it not possible for cabs to be transferred from one tractor to another? If a safety cab fits, surely this concession should be allowed, and when the time comes to replace an old tractor surely a safety cab could be used again, provided that it is in good order.
We welcome the exemptions in respect of hop-gardens, yards, orchards and buildings. However, a small farmer who may be exempted when working inside a building will be faced with a problem when mucking out with a single tractor. Normally, he mucks out with his fork loader and loads his dung spreader. He comes outside and hitches up again and then goes out to his fields. The Regulations mean that he will have to put back his cab, which may be a two-hour job. The process would be repeated when he comes back for a second load, because a single load of dung is not usual. This point ought to be cleared up, otherwise a small farmer with a single tractor will be at a serious disadvantage.
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Another practice which is becoming more frequent is to have tractors which are used only in covered buildings. Why is it necessary for such a vehicle to have a safety cab? The cost of these cabs is quite high, and I believe that this is an unnecessary expense. Will these safety cabs qualify for any grants? The cost of a cab on a medium-sized tractor is between 8 per cent. and 10 per cent. of the total cost, and 5 per cent. if it is just a safety frame. A grant would certainly be useful and help to offset the extra cost. Cost is an important factor, and I trust that manufacturers will do everything that they can to keep this to a minimum.
I hope that the Minister will spell out clearly for even the simplest farmer, if I may so put it, that a safety cab does not mean an enclosed cab. The definition of a "safety cab" in the interpretation paragraph contains the phrase,
"and includes a safety frame."
It ought to be made clear in the farming Press that a safety cab does not necessarily mean an enclosed cab. One can, as it were, choose the cheaper variety of safety cab, that is the safety frame.
I turn now to the circular which most hon. Members have received from the N.F.U. It is interesting to see the criticisms which are made, and I would like the Minister to explain in a little more detail what has happened during this long period of negotiations with the N.F.U. Why did the N.F.U. suddenly seem to change its views? I believe that it made quite a point of the fact that it believes agricultural tractors to be basically wrong in design, and it criticised these proposals by saying:
"The fitment of cabs or frames will cause the already high centre of gravity of these vehicles to be raised still further, thus making them even more prone to overturn."
That may or may not be so, and I was glad that the Minister quoted, as I was going to, the action which Swedish agriculturalists and the Government there have taken. It proves to me that the tractors which we have in existence at the moment, if fitted with a safety cab, are still safe, and I think that this rather throws out the complaint and the criticisms made by the N.F.U.
One thing that we must do is press on with research into design. I do not believe

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that we can wait for this to be completed. There are hundreds of tractors which must be made safe now. We cannot wait for years while research into design is completed. We simply cannot afford this delay. In the long-term proposals I hope that the Minister will give every encouragement to research into design, because this must take place, but, as I say, we cannot wait for this to be completed before taking action to make our tractors safe.
I believe that we must look into the whole question of the design of our implements, as well as the tractors, because many accidents occur with implements which upset the balance of a tractor.
I have asked the Minister a number of questions, and I hope he will make it clear, not only to us but to farmers and farm workers, where we stand with regard to the matters that I have raised. I believe that these Regulations are a start. Modifications may have to be made in the future, and indeed much more needs to be done, but I believe that we should start to work together to stop the appalling waste of life on our farms.
11.33 a.m.
The Marquess of Hamilton: Although for the moment these Regulations will not be applicable to Northern Ireland, there is considerable interest in them, for there is an acute awareness amongst the farming community in Ireland of the danger element from overturning tractors, a danger which is accentuated by the need for intensive silage-making, for two-fifths of the fatal accidents occur during silage-making when the tractor is on the silage pit and consolidation is being carried out. Although safety rails at either end of a covered silage pit help to some extent to prevent the tractor from going over, it is hoped that the Government will press ahead with the development of alternate methods for consolidation in order to make working conditions far safer than they are at present on the silage pit. Because of the smallness in size of farm holdings in Northern Ireland, the average farmer is just not in a position to erect silos as is his counterpart in many areas of the United Kingdom. Furthermore, we must remember that tractor cabs will lessen visibility
1662
during the silage-making, and will be intolerable during warm weather.
I agree with the N.F.U. that the crux of the danger of tractors overturning is due to the outdated design of the so-called modern tractor. It is here that the maximum research must be carried out immediately. At the same time I would like to see a general campaign mounted to eliminate all the prevailing dangers in tractor work, wherever possible.
11.35 a.m.
Sir Clive Bossom: I am very glad that the exemption period is no longer to finish at the end of September, as was first suggested for these draft Regulations. I think that this is right, because in Herefordshire hops are not always in by September, nor is the harvesting of apples always completed by then.
As has been said this morning, what the Government must now do is carry out a major "public relations exercise" with the entire farming community during the next two years, anyhow well before 1st September, 1970, because there is still considerable doubt, especially in the N.F.U., that these Regulations are completely practicable or workable, and that there are not some flaws and anomalies in them.
Many farmers in my part of the world have grave doubts about whether manufacturers have got the complete answer in their design, because there are one or two designs on the market already—these new safety cabs are still not foolproof and are too expensive. Therefore, during the next two years a tremendous amount of research must be carried out both by the Government and by the manufacturers to find a still better, cheaper, and more foolproof design.
What effect will these Regulations have on our export market? Has the hon. Gentleman discussed this with his right hon. Friend the President of the Board of Trade? In 1965 exports of farm machinery were worth £129 million, of which £65 million was for tractors. In 1966 exports of farm machinery were worth nearly £142 million, £104 million of which was for tractors. These figures show that there is a fast expanding market for tractors. If a new safety cab costs between £70 and £100, will this price

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our tractors out of foreign markets? I realise that cabs can be unbolted and tractors can be sold without cabs, but indirectly this must have some effect on the end price.
Will the Government, having heard what has been said this morning, be prepared to double their efforts into reseach, and also try to help manufacturers do the same? Having just returned from Sweden, I know that they insist on safety cabs there. I agree with everything that the Minister has said about Sweden this morning. I understand that Denmark will soon follow with new regulations, and it must be only a matter of time before most of the Common Market countries follow suit with similar provisions. I would like to know his opinion of the way in which it will affect our exports.
On 14th February, 1966, I asked the Minister whether he intended to introduce legislation for Land Rovers, Austin Gypsies, and Mercedes Uni-Goys, because at that time he stated that he had no evidence of a need to extend the provisions to other types of agricultural vehicles. Since then, has he changed his views? I should like to know whether he is satisfied that these other types of vehicle are completely safe and are not likely to overturn.
11.40 a.m.
Mr. James Davidson: I welcome the Regulations. I speak not only as a practical farmer but as a member of the area executive of my N.F.U. In my opinion these Regulations are long overdue. They are absolutely necessary, and I welcome them heartily. In my part of north-eastern Scotland we have a lot of very steep land. I appreciate what the hon. Member says about banning the use of tractors on steep ground but it is not practicable. It would cut out at least one-third of the agricultural and arable land in the north-east of Scotland. I have two adjoining fields which together amount to about 20 acres only, and from top to bottom of the two there is a 250 feet drop. On many occasions I have driven a tractor with two wheels off the ground and I know how easy it is to overturn a tractor, however careful one is. These Regulations are long overdue.
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A critical factor is the height of the centre of gravity of a vehicle above the ground. I agree with what has been said about the need for new thinking in the design of tractors, and I wonder whether it would be of assistance if it were made compulsory on the sale of new tractors to include in the published specifications of the vehicle the height of the centre of gravity. This might be a yardstick for comparison between different tractors, and it might also be a good selling point as well as an incentive towards better design.
I realise that this factor is closely linked with the distance between the wheels, but in many tractors this distance is adjustable. It is a simple calculation. If one knows the height of the centre of gravity and the distance between the wheels one can easily work out the turning moment. This would be a selling point, and I commend it to the Minister for consideration as a compulsory specification on the sale of new tractors.
I accept the Minister's explanation of the time lag between now and the coming into force of the Regulations, but it still seems rather a long time.
11.43 a.m.
Mr. W. H. Loveys: I welcome any safety Regulations concerning agricultural machinery. Many such Regulations have been introduced in the last few decades and enormous strides have been made in modernisation. Nevertheless, we have been backward in the design of the tractor, which is the basic machine of the industry. Many farmers, the National Farmers Union—which has sent out the memorandum to which reference has been made—and certain hon. Members with whom I have talked are concerned about the Regulations, but I suggest that any employer who has had a fatal accident on his farm will welcome them. This morning the Parliamentary Secretary has told us that no less than one-third of the fatalities in agriculture are caused by tractors overturning.
The N.F.U., which is usually most realistic, sensible and co-operative in these matters, is distressed because it feels that the question of safety cabs is being treated too hastily. I feel that the opposite is the case, and that we are backward in this respect. The N.F.U. is probably correct in saying that if the Regulations are carried out there is a possibility that more tractors will overturn. The

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difference in design might make it marginally easier for a tractor to overturn, but the risk of a fatality will be very much reduced.
It is wrong for people to blame the manufacturers for the present design. I am glad to hear that they are having another look at the matter. The Parliamentary Secretary has told us, however, that it may be some years before a decision is reached, and even then he doubted whether a great deal could be done on the question of design.
I welcome the suggestion made by the hon. Member for Aberdeenshire, West (Mr. James Davidson). It is a very sensible one. I can probably claim to have spent more tractor-driving hours than any other hon. Member. I did this when I was young and rather foolish. I used to drive the things flat out, and threw them up over banks and did other foolish things with them, but I never succeeded in overturning one. We cannot say that the basic design of a tractor is to blame.
We should support the Regulations, but should bear in mind that, like all safety measures, it introduces certain complications, most of which have been mentioned. I am glad that special exemptions are to be made in respect of tractors used in hop fields, orchards and buildings. This is right, because apart from the complications involved in using vehicles with cabs under such conditions the kind of situation which will be likely to cause a tractor to overturn does not exist under those conditions.
This leaves the awkward situation that arises when tractors are used for removing litter and manure from buildings, when the vehicle is used partly inside the building and partly outside it. This is a most difficult problem to overcome. There is good reason for exempting tractors used in such conditions. The tractor would not need a cab when used in a building, and if it is necessary to put one on when it goes outside it may take a couple of hours, and it is nonsense to have to spend that time before going outside to spread one's manure.
The other anomaly to which attention is drawn by the N.F.U. memorandum arises from the fact that all new tractors must be sold with a safety cab fitted. I admit the difficulties arising in respect
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of the earlier problem, but this one could be overcome. If a tractor is to be used in a category of work which will in any case be exempted from the provisions it would seem an unnecessary expense and a nonsense to insist on a cab being fitted. If the Minister can assure us that he will increase the range of exemptions, and if possible exempt tractors used in cleaning out buildings and all new tractors purchased for use in work which is to be exempted under the provisions the Regulations will have my full and unqualified support.
11.50 a.m.
Mr. Paul Hawkins: I want to add my praise in respect of the Regulations. I come from the eastern counties, where most of the land is flat, and when I first read the National Farmers' Union memorandum I was inclined to agree with what it said. Having examined some of the figures concerning accidents, however, I agree with other hon. Members that the N.F.U. is mistaken and that we ought not to delay any longer in introducing this reasonable measure to improve safety.
It will add to both capital and working costs, and in this connection I hope that the cabs will be so designed that it will not need two hours to put them on and take them off. The method of fixing should be as simple as possible, and it should be possible also to put on what I call the "weather" cab when the safety frame is in position. In other words, it should not be necessary to have to take off the safety frame in order to put on a weather cab, which may also incorporate a weather frame.
The word "cab", which is used rather frequently in the Regulations, is somewhat misleading to the average farmer, and I hope that a fairly major publicity campaign will be mounted when the frames are designed to explain exactly what is required.
The majority of accidents in my district occur in the Fens, where we have wide dykes and where people try to work every inch of the ground up to the dyke side, with the result that many of the fatalities are due to drowning.
Can the Parliamentary Secretary give us some idea of the type of frame that is envisaged? Can he say how much it is likely to cost, so that people may know

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that in advance? The Explanatory Note states:
"These Regulations require tractors to be fitted with safety cabs … when driven by workers …"
Do I understand from that wording that the self-employed farmer driving his own tractor is not affected? If that is so, it is a pity. Regulations like these should cover those men also. Many of them are small farmers, and the whole farm and the family depend on the one man. The Regulations probably do cover these farmers also, but I should like to be reassured.
I welcome the Regulations, and I hope they will have the desired effect of reducing these awful casualties which occur all too frequently in many districts.
11.53 a.m.
Mr. Edward M. Taylor: I welcome these Regulations as, I am sure, most Scottish Members will. Reference has been made to the steady rise in the number of accidents involving tractors, and in Scotland this rise has been even greater than elsewhere. In 1964, seven farmers or agricultural workers were killed when working tractors. The number rose to nine in 1965, and in 1966, which is the latest year for which figures are available, it rose to 13. In two years, therefore, fatalities rose from seven to 13.
I understand that the only figures for injuries, as opposed to fatalities, come from the Ministry of Social Security in relation to industrial injury benefit, and, therefore, do not include self-employed farmers. We have a substantial number of small farmers in Scotland and a number of hill farms in the North. Farmers and agricultural workers there are, perhaps, more vulnerable to tractor accidents, and it is unfortunate that we do not have a means of getting full details. I hope that steps can be taken to get more information about tractor accidents. On the other hand, no matter what we do by means of regulations to make the working of farm machinery safe, the factor of human error remains the most significant. I hope that our discussion this morning will further spotlight the dangers that can be associated with the use of tractors, and emphasise the need for other forms of safety on farms.
11.55 a.m.
Mr. J. B. Godber: We have had a very useful debate, and I do not want to add a great deal to it. On a personal basis, I have always taken a great interest in safety Regulations for farms. The Parliamentary Secretary has told us that this is the eleventh set of such Regulations. I had the privilege of introducing the first set, and also the second and third sets, so that I know some of the problems connected with their introduction. I add my personal welcome to these Regulations and share the views expressed by my hon. Friends and others as to their value.
I am a little surprised—I do not say it particularly critically—that there has been no support this morning from the benches opposite, because I know that one or two of the Parliamentary Secretary's hon. Friends have taken an interest in the subject and, as the hon. Gentleman has said, this is one of the most important sets of safety Regulations we have had.
When I was closely connected with the office which the hon. Gentleman now holds, I always felt that tractors and, perhaps, power-driven circular saws were the two greatest sources of danger on farms. It is therefore right that we should have these present Regulations which, I hope, will safeguard many farm workers. Those of us who have had this type of fatality in our constituencies know the great tragedies that are involved. For that reason, particularly, I welcome the introduction of these Regulations. I share the views expressed this morning about the risks involved in tractor driving, risks sometimes not fully realised by the farmer himself or his workers.
I hope that we shall have a substantial variety of approved types of cab, whether enclosed or not enclosed, as the purchaser may wish, and that there will be adequate supplies available by the time the Regulations come into force. I believe that the National Institute of Agricultural Engineering has been responsible for the approval of cab designs and has done a great deal of work in this connection. Is the Institute being given more encouragement and, perhaps, financial encouragement in assisting in the design considerations to which the Parliamentary Secretary and others have referred? The hon. Gentleman knows that

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the N.I.A.E. has done a great deal of pioneering work in connection with agricultural machinery, and if money is to be spent on fundamental changes of design, the Institute, certainly in collaboration with the manufacturers, could probably do a great deal to assist.
It has always been held that the driving wheel of a tractor should be large in order to get the necessary grip, and it is the radius of this wheel that determines the centre of gravity of the vehicle. If anything could be done to provide a more adequate grip with a somewhat smaller driving force, whether by the design of the tyre or by the way in which the vehicle is powered, it would be an advance. We might even consider front-wheel drive. We know that the introduction of front-wheel drive has brought about a great deal of change in motor cars, and its use might make it possible to get a grip with a lower centre of gravity.
I hope that the Parliamentary Secretary will not only tell us something about the cabs themselves but will initiate some discussions either with the manufacturers or the N.I.A.E., or with both, with a view to taking account of the main point in the N.F.U. memorandum. It is rather remarkable that with all the work that has been done for safety on the farms, this is the first occasion on which the N.F.U. has in any way criticised safety regulations. Hon. Members have given a fair appreciation of that criticism, and I will not repeat their remarks.
It is worth remembering that the farmers have borne, I believe gladly, substantial increased expenditure in implementing the various Regulations that have been passed. The Parliamentary Secretary will agree that, in the main, they have given warm co-operation and that they are to be commended for their attitude. This being so, when they have criticisms, the Department should look at them sympathetically.
I hope that, whatever the criticisms, the farmers will accept this as a necessary provision, although I thought that there was great force in the last criticism made in the document to which reference has been made; the anomaly about forcing all new tractors to be sold with cabs, even when they are to be used for exempted purposes. Subject to that, I warmly welcome these Regulations.
12.2 p.m.
Mr. Hoy: I am grateful to the right hon. Member for Grantham (Mr. Godber) for his remarks and to all hon. Members for the way in which they have welcomed these Regulations. It has given me great pleasure to have the privilege of introducing these Regulations and I feel a sense of pride in having been given this job, for we are dealing with a subject affecting the very lives of agricultural workers.
Many questions have been asked and I will do my best to answer as many of them as possible. The hon. Member for Torrington (Mr. Peter Mills) asked, "Why did the N.F.U. change its mind?" I suggest that he puts that question to the N.F.U. The Union is, of course, entitled to change its mind. I regret that it has done so on this occasion, although the remarks of hon. Members show that it is a change of mind which has not commended itself to the House.
I was asked whether cabs could be transferred to new tractors on the sale of old ones. The answer is that they can. If a farmer provides the dealer with an approved cab, it may be fitted to the new tractor. Many hon. Members have spoken about the need for safety education. We have carried out an extensive programme in this respect, with lectures, television programmes, handbills and so on. It is important that this work should not go by the board and we will, therefore, intensify it and ensure that what has been done is followed up.
It is rather amusing to think that, whenever we discuss agriculture, hon. Members ask, "What is the grant?" It does not seem to matter what we are debating, as long as there is a grant. In this case the new investment grant will be applied to approved cabs. However, when moving the Motion I was more concerned with the cost in terms of human lives, and that must be pre-eminent in our thoughts when discussing this matter. However, the grant will be payable.
Reference has been made to the difficulty of removing the cab and later returning it to the tractor when such jobs as muck spreading are undertaken. As I said at the outset, farming practices will have to be altered. This is a small price to pay if we are to save lives. While there may be some inconvenience—and I hope that it will be minimal—we could not to go on extending the exemptions

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much further without making the whole thing so open that the Regulations might become valueless. We have tried to meet all the legitimate requests that have been made, but I do not propose to extend the exemptions at this time.
There may be something in what the hon. Member for Norfolk, South-West (Mr. Hawkins) said about designing cabs so that the task of taking them off and putting them on again is made comparatively easy. I am sure that those engaged in this work will consider that suggestion. They will obviously want to ensure that the cabs are not only efficient and will perform the job for which they are made but that the fixing and unfixing of them may be done simply and easily. They are bound to take that into account, remembering that British engineers are among the leaders in this sphere. They are not likely to overlook a point of this kind.
I was asked about the exemption of cabs when tractors are used for only a certain type of work. The dealer cannot satisfy himself about the work that will be performed by the vehicle. In any case, it would be extremely difficult for a farmer honestly to give an assurance that all the work would be of the type that is exempted. This is one of those practical difficulties of life, although we have attempted to cover this and other difficulties in the most efficient way.
Reference was made to the present price of cabs. We expect the price to fall considerably when full-scale production begins. It will be agreed that this happens with most engineering projects. In this connection, I was asked whether research into cab design would be encouraged. The main reason for the three-year delay is to enable this very job to be tackled. We want people to design these cabs in the full knowledge of all the factors involved, and I assure hon. Members that we will do all we can to encourage improvements in design to be made. I was asked to give our views about Land Rovers and similar vehicles. We are satisfied that it is unnecessary to apply these Regulations to that type of vehicle.
Hon. Members wondered what effect the Regulations would have on exports. I recently had the privilege of visiting a factory at Diss. It has a tremendous
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export record and I understand—if I remember aright—that 50 to 60 per cent. of its production goes overseas. This is a valuable trade for Britain and is a remarkable tribute to British engineering. When we are sometimes too critical of ourselves we should remember the first-class job that British engineering is doing in this respect.
The British Standard specification in this matter is in line with international standards and there is no reason to think that the Regulations will have an adverse effect on exports. On the contrary, exporters are more likely to find, in due course, that cabs are required by more and more overseas countries.
The hon. Member for Norfolk, South-West asked whether self-employed farmers were covered by the Regulations. I regret to say that they are not. The 1956 Act, under which the Regulations are made, provides powers for the protection of workers only. Nevertheless, we hope that self-employed farmers will consider themselves covered by the Regulations and will implement them for their own safety. We hope that the self-employed farmer will provide himself with this type of cab, just as he takes out insurance to protect himself in other ways.
I was grateful for the remarks of the hon. Member for Aberdeenshire, West (Mr. James Davidson). I have made a note of his suggestion, although he will not expect me to say that it could be done. I assure him that I will look into what he suggested to see if it is a possibility.
The hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor), who has not, I believe taken part in an agricultural debate before, but whom we welcome, asked about accidents and the information which was required. We are aware of the need for action. The hon. Gentleman will realise that accidents to non-insured persons are not recorded by the Ministry of Social Security. This leads to a weakness in our records, but we are trying to improve them, and if possible we shall make them available to the House and the country.
I should like to convey the thanks of the Minister and the Department to all hon. Gentlemen for their support over these Regulations. With all their

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defects—if some appear in the working, we can put them right—we are today taking the first real practical steps to prevent these appalling deaths as a result of overturning tractors.
Mr. Loveys: The hon. Gentleman answered the debate comprehensively, but did not touch on the difficult question of new tractors bought for work for which they would be exempted under the Regulations. Is it essential for them to be fitted with these cabs?
Mr. Hoy: I replied fully to the hon. Gentleman. I said that there was a great difficulty because the retailer had no guarantee that the tractor would not be used for certain purposes and the farmer could not honestly say that he would never use it for them.
Question put and agreed to.
Resolved,
That the Agriculture (Tractor Cabs) Regulations 1967, a draft of which was laid before this House on 31st May, be approved.

ORDERS OF THE DAY
  MARINE, ETC., BROADCASTING (OFFENCES) BILL
  Lords Amendments considered.

Clause 5.—(PROHIBITION OF ACTS RELATING TO MATTER BROADCAST FROM SHIPS, AIRCRAFT, ETC.)
Lords Amendment: No. 1, in page 5, line 32, leave out paragraph (f) and insert:
"(f) publishing the times or other details of any broadcasts which are to be so made, or (otherwise than by publishing such details) publishing an advertisement of matter calculated to promote, directly or indirectly, the interests of a business whose activities consist in or include the operation of a station from which broadcasts are or are to be so made."
12.15 p.m.
The Postmaster-General (Mr. Edward Short): I beg to move, That this House doth agree with the Lords in the said Amendment.
We discussed this paragraph, which deals with advertisements, at length in Committee and on Report. I explained that it was intended to catch advertisements for the pirate stations, including the publication of information about future pirate broadcasts, but that it would not penalise genuine editorial comment about pirate broadcasting. This Amendment is the outcome of the discussion on the subject in another place and expresses the Government's intentions in the appropriate phraseology. I am grateful to the noble Lords who co-operated in its drafting.
My hon. Friend the Member for Meriden (Mr. Rowland) had some doubts about the appropriateness of the original wording and I am sure that he will be interested in the outcome. I am sure that my hon. Friends and hon. Members opposite will welcome this definition of the word "advertisement".
Question put and agreed to.

Clause 11.—(SHORT TITLE AND COMMENCEMENT.)
Lords Amendment: No. 2, in page 8, line 43, leave out subsection (2) and insert:
"(2) This Act shall not come into operation before the expiry of one month beginning with the day on which it is passed, but subject

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thereto it shall come into operation on a day to be appointed by Her Majesty in Council."
Lords Amendment divided.
So much of the said Amendment as proposes to leave out words agreed to.
Mr. H. P. G. Channon: I beg to move, as an Amendment to the Lords Amendment, in line 2, to leave out from 'operation' to the end of the Lords Amendment and to insert:
when an order for that purpose has been approved by both Houses of Parliament.
Are we taking at the same time, Mr. Deputy Speaker, the third Amendment to the Lords Amendment, in line 4, at the end to add:
Provided that any such Order in Council shall be subject to annulment in pursuance of a Resolution of either House of Parliament?
Mr. Deputy Speaker (Sir Eric Fletcher): The third Amendment is consequential on the one that the hon. Gentleman has moved and can, therefore, be discussed with it.
Mr. Channon: This is the last substantial point for the House to consider. I have several times expressed my grave doubts about the Bill, and other hon. Members take that view, but the Government have used their majority and the Bill has now almost completed its stages. I therefore do not want to discuss the merits of the Bill, even if that were in order.
The point raised by the Lords Amendment and mine to it is that the operation of the Bill should be delayed until the Postmaster-General makes a Statutory Instrument bringing it into force. As the Bill was originally worded, it would come into operation automatically, one month after the Royal Assent. The Lords Amendment would provide that, after that period, the right hon. Gentleman would have to make an Order.
My Amendment is because of the remarks made by the Government spokesman in another place, Lord Sorensen. The Bill is to stop pirate stations. There are different views about this, but there is no justification for stopping this entertainment for tens of millions of people until a decent alternative has been provided. The Government's proposed alternative is Radio 247, which I think will be inadequate. I hope that I am wrong, but the pirate stations should not be stopped until it is operating. The
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Lords Amendment did not go far enough to achieve that purpose, which is the reason for my Amendment.
It would be disgraceful if the Government permitted what Lord Sorensen estimated to be 10 million listeners to be deprived of their favourite programmes with no possibility of an alternative for several months. Without my Amendment, the Government could make an Order after a month and a day without debate or check in the House. Lord Sorensen said:
"Your Lordships have just carried an Amendment to this Clause. So that there shall be no dubiety in the minds of those who are operating pirate radio stations, I think it is right to inform your Lordships' Committee, on behalf of Her Majesty's Government, that it will be their intention, if the Bill is enacted in this form, to advise Her Majesty to make an Order bringing the Act into operation on the day after expiry of one month from the date on which the Bill receives the Royal Assent."—[OFFICIAL REPORT, House of Lords; 1st May, 1967, c. 735–6.]
I think I am entitled to ask the Postmaster-General if those words of Lord Sorensen still represent the policy of Her Majesty's Government. If they do, there is no purpose in the Lords Amendment, which we shall subsequently debate, because it will make no substantial difference to the position.
I would have preferred to have amended the Lords Amendment to make the Bill come into operation at the end of a year and not to have pressed my present Amendment. I am not allowed to do that, so I propose the alternative. There should be a check on the actions of the Executive in this way. I do not think that what I am asking is unreasonable. The two Amendments I have put on the Notice Paper are alternatives. If the Government bring in the Act to ban pirate radio stations they should do so by way of Statutory Instrument in the form of an affirmative Resolution. Then the Government would have to have the matter discussed in the House and to justify their proposals.
If that would be going too far, the alternative I propose, the Amendment we are now debating, would provide for negative Resolution procedure. If the Government reasonably waited until the alternative Radio 247 is in operation they would not be likely to need a debate at all, but if we had the negative Resolution procedure the Government would have

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to justify the Resolution. I hope that I have moved my Amendment moderately although I feel strongly about this matter.
If the Government intend to operate the Bill in the manner outlined by Lord Sorensen, I shall have no alternative but to ask some of my hon. Friends to support me in the Division Lobby. If, on the other hand, the Postmaster-General says that he is prepared favourably to consider the Amendment and gives an assurance that he will not bring the Bill into operation until there is a decent alternative programme, I would be happy to withdraw my Amendment. My hon. Friends are perfectly entitled to take what action they believe fit, but I would be prepared to consider any reasonable assurance the Government are prepared to give.
Unless some such Amendment as this is made, this House will have no further say in the matter. Unless the Government give a reasonable assurance, at least 10 million listeners—that is the Government figure, but I think the number is higher—will be deprived by Government legislation of the right to listen to stations which they enjoy and to which they have listened with impunity for several years. The minimum which the Government should do is to provide the alternative programme before this Bill becomes law. I do not want the Bill to become law until a reasonable alternative has been proved to work. The minimum the Government should do, and it is a reasonable request, is not to take these powers until Radio 247 has been launched.
I ask the Postmaster-General if he can give the exact date when Radio 247 will start operation so that the House may be seized of the information of how long the gap will be if the Government do not favourably consider my Amendment. I hope that they will give the right to debate this matter by Statutory Instrument before a final decision is made. Then hon. Members can put forward their views on this very important matter which affects millions of people.
Mr. Edward M. Taylor: I have much pleasure, as I had in Committee, in supporting my hon. Friend the Member for Southend, West (Mr. Channon). In Committee the Government pushed ahead with this Bill against public opinion and against the
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interests, it is estimated, of 20 million who listen to pirate radio station broadcasts. Now, apparently, the Government are prepared to put forward an Amendment which is not only against the interests of the public but also against the spirit of an Amendment which was fully and carefully considered in the House of Lords.
It is quite disgraceful that immediately after that Amendment was put forward and it was agreed that an Order should be published a month before the Bill could come into operation, the Government said that on the day following that month they could go ahead. All that has been achieved after long discussion and consideration is one more day for the pirate stations to be in operation. That is entirely against the spirit of the discussion. I hope that the Government will say that, in view of the discussions which have taken place since then and in view of public opinion, they will reject the point of view put forward on their behalf in the House of Lords.
The argument behind the Amendment which my hon. Friend has moved is that we do not share the blind faith which the Government and the Postmaster-General apparently have in the B.B.C. to replace pirate radio broadcasts with a popular programme which will appeal to the mass of the people. Unless we can have a period in which Radio 247 and the pirate stations are in competition with each other for listeners, we can have no guarantee whatever that Radio 247 will provide the kind of programme which is needed. We are asking that once that is introduced there should be a discussion in the House either by negative or affirmative procedure. This might not take place if negative procedure is used and if Radio 247 is acceptable, but we have no guarantee that the British Broadcasting Corporation can provide a programme with the same appeal as that of the pirate stations.
Are the Government convinced that the difficulties over the needle time are resolved? We have heard that 20 per cent. to 40 per cent. of the Radio 247 programme will consist of records. We do not know whether the problem concerning the Musicians' Union has been resolved. We do not know whether programmes consisting of 20 per cent. or 30 per cent. of records will be acceptable.

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I am sure that the millions who enjoy pirate station broadcasts would not agree.
The Government are wrong, quite apart from the legal position, to consider that the content of the pirate radio programmes is to be deplored. There is nothing harmful or weakening in these programmes. They bring a great deal of enjoyment to a large number of people. It is wrong for the Government to put themselves in a position of suggesting that they know best what is good for the majority of people. That is why we support this Amendment and why we need the greatest assurance before accepting what the Government propose.
Mr. Robert Cooke: I very nearly divided the House against considering the Lords Amendments now because they came on after 12.15 p.m. It seemed quite wrong that we should try to get through this important discussion in the limited time available. There is certainly not time for the Postmaster-General, even if I were to resume my seat immediately, to reply to the points which have been made by my hon. Friends. There are also other matters which should be brought into this argument and a particular question which I want to ask.
There is the difficult question of resolving the needle time and the rights of copyright holders. There are very grave difficulties there. The Government have not been very full in their explanations about whether the B.B.C. can provide by Radio 247 a comparable service to that which is provided illegally by the pirates. That is still in doubt. We would want to know a great deal from the right hon. Gentleman about the Government's thoughts on the future of really genuine competitive radio—
Sir Harmar Nicholls: Commercial radio.
Mr. Cooke: The B.B.C. is making a considerable effort to produce local radio stations which to some extent may fulfil an alternative to the pirate programmes—[HON. MEMBERS: "Never."]—but certainly there are difficulties over these experiments.
It being half past Twelve o'clock, the debate stood adjourned.
Debate to be resumed Tomorrow.

ROADS (MOTORWAY CATERING)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Harper.]
12.30 p.m.
Mr. John Cordle: The matter I wish to raise is possibly a far cry from the question the House has just been debating. It affects many people, but perhaps not quite so many as are affected by pirate radio. I hope that my hon. Friend the Member for Southend, West (Mr. Channon) will be clearly understood by the Government and that they will give a very considered reply to him when that debate is resumed.
The matter I wish to raise deals with the standard of motorway catering. I shall raise this matter in the quickest possible time so that the hon. Member for Bristol, North-West (Mr. Ellis) can have at least two minutes before the Joint Parliamentary Secretary replies. I am glad to have the opportunity of raising this matter this morning, as it is an important matter now and one which will become critical when the promised 1,000 miles of motorway are in operation in the next decade. Motorway service areas are an integral part of the motorway setup and important, I believe, both physically and psychologically to travellers using the motorways.
Looking only a few years ahead when the journey from, say, London to Carlisle will be entirely by motorways—the MI and the M6—the considerable and somewhat monotonous journey thus involved will entail the necessity of having attractive and reasonably priced areas where refreshment for driver and vehicle can be obtained.
Yet the present concept and operation of the motorway service area leaves much to be desired. It is a relatively new project in this country. No motorway service area is yet 10 years old, and there are still less than 20 operational. For this reason, I hope that we are learning from the undoubted mistakes that have been made and I hope that the lessons of the past few years are being incorporated into the new areas which will be opening.

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From the customer's point of view, the present service areas compare very unfavourably with their counterparts on the Continent. One would expect the standard of forecourt services on the service station side to be high. After all, a dirty windscreen or an external mirror that is covered in dust can be potentially lethal. Yet, in common with most of Britain's garages, these little refinements of service are, on the whole, conspicuous by their absence.
Similarly, on the forecourt side the layout often leaves much to be desired, so that at peak times in some service areas the queue of vehicles waiting for fuel can lead back to the motorway itself, causing an additional hazard.
While we are dealing with vehicles, rather than the passengers in them, only a few weeks ago the full one to five star quality range of petrols was not available at many areas and attendants were trying to persuade owners of cars whose recommended grade of petrol is three star that, because three star petrol was not available, they should have five star which is much better for their car. This is technological poppycock and is an attempt to make the motorist buy a product that is not suited to his needs and which is quite a bit more expensive into the bargain.
Perhaps there have not been so many complaints on the service station aspect of these areas because the general standard of forecourt service throughout Britain is so appallingly low that the motorways are neither better nor worse than most others.
Having refuelled his car, the traveller wishes to refuel himself. If he can find somewhere to park his car—and the earlier-built areas in particular are often a very tight squeeze—he then samples the epicurean delights of motorway catering. There are one or two motorway restaurants where reasonable food can be obtained at highish, but not exorbitant, prices, in clean and comfortable surroundings. I name no names, but various organisations have produced surveys recommending particular restaurants. The majority, I regret to say, provide indifferent food at exorbitant prices in conditions which would make the average transport "caff" appear like the Savoy Grill by comparison. A recent A.A.
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survey summed up motorway eating in these words:
"Too often it is too much to pay, too long to wait."
The people who are particularly hard hit are the average family of mother, father and two children, who find that simple refreshment like orange squash and a couple of sandwiches adds up to a total bill of well over £1 and the tables at which this refreshment is consumed are more often than not dirty and covered with used crockery.
Unless there is a major change of approach, there is a very real danger that these service areas will degenerate into a form of rural slum. Indeed, I think that some have nearly reached that stage already.
The shortcomings are there for all to see, yet I think that it would be wrong and unjust to lay all the blame at the motorway caterers' door. When tendering for the contracts, the would-be caterers have to have a minimum capital of £350,000 for building all the various facilities. At the same time, the annual rent for the site on a 50-year lease may run into six figures. This obviously limits the competition to the very large companies, and there is surely scope here for more flexible arrangements to enable local consortia to have a chance.
However, the contractors themselves are by no means happy with the financial and forecasting arrangements, since I doubt whether many service areas are proving anything but a financial burden at the moment to their parent companies. Because traffic flows have not come up to Ministry forecasts, or the opening of motorway extensions have been delayed, quite severe financial loss has been involved. One company said this in its last financial report:
"We have encountered some problems with the motorway service areas, as in some cases the roads have not been finished by the originally forecast date, with the result that traffic flows, etc. are not in line with the forecasts made by the Ministry on which we based our quotations."
That was said in the Rank Organisation's report for 1966. I understand that the company concerned has had consultations with the Ministry regarding financial compensation, which cannot be very satisfactory from anyone's point of view. The imposition of Selective Employment Tax

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has been another extremely unhelpful factor which has pushed up costs.
Two years ago an inquiry was sponsored by the Ministry into motorway service
areas. The inquiry was led by Professor Lord Llewellyn-Davies and Mr. Goddard, from London University. Reports have suggested that the inquiry more than substantiates the charges I have made today about low standards and it also criticises the Ministry because of its lack of expertise in dealing with these new problems.
I do not know whether these reports are correct, because the Joint Parliamentary Secretary has already told the House that the Report will not be published. I hope that the hon. Gentleman will reconsider this decision and perhaps today give us the favourable reply that in course of time it can be published. I think that the decision not to publish it is wrong, and I urge him to reconsider it. We are not engaged on a witchhunt, but everybody must be concerned to improve these service areas; and the publication of this Report would enable informed discussion to take place. At the moment, there is no discussion whatever.
I am sure that the Ministry is as concerned as I am about the problem, but I hope that the Joint Parliamentary Secretary will be able to tell us what progress is being made and answer some questions about his Department's activities in this field. For example, how many civil servants with specialised knowledge are dealing with the new technical problems of motorway service areas? By "specialised knowledge" I mean architects, caterers, traffic engineers, and economists. The appropriate authority in Germany has nearly 60 of these top people concerned full-time with motorway service areas.
What visits have taken place to the United States of America and to Germany by experts in the Ministry to see how those countries have solved their problems and what we can learn from them? I hope that the Minister can give an assurance that traffic flow statistics will be as accurate as possible so that realistic quotations can be made by the contractors.
Finally, I hope that a fresh look is being taken at the arrangements by which
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these sites are let, otherwise there is a very real danger that service areas for the new motorways will find no takers. We want to see clean, efficient, well-planned areas offering high standards in food and service at reasonable prices. The taxpayer should not be asked to subsidise such activities, but neither should he expect to make a large profit. The contractors have much to do to improve their management of these areas, but they are also entitled to a reasonable return on their capital and a higher standard of expert advice from the Ministry than, I believe, they have so far had.
The motorway service areas can play a positive part in road safety and in making a journey pleasurable. I hope that the Minister's reply will give some encouragement to the motorway motorist.
12.40 p.m.
Mr. John Ellis: Not only am I indebted to the hon. Member for Bournemouth, East and Christchurch (Mr. Cordle) but the whole House is, because he has given us an opportunity today to debate a most important service for the car travelling public, a service which will become even more necessary as time goes by.
We have heard the charges levelled—that prices are high, that service is bad and that, generally speaking, the standard of motorway catering and of the service areas leaves much to be desired. I shall not go over the ground again. I agree substantially with what the hon. Gentleman said.
When I raised the matter with the Ministry earlier this year, I took the view, reasonably, I thought, that to some extent the force of complaints made by my constituents depended on how much had to be paid for the 50-year leases of the service area sites. So far, there has been no answer to the question which I raised on that point. All the details are confidential. The consequence is that it is difficult to form any value judgments on whether the concessionaires are giving a good standard of service or not, having regard to the rents which they pay. We need far more information.
It is said that 11 of the 15 operators are making losses. I do not know to what extent this is true. It should not be forgotten that they have their concessions for 50 years and, as traffic builds

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up in succeeding years, they can be expected to make very large profits.
How much do the service stations cost? Various costings have been given, from about £500,000 to as much as £1 million or more in one case. These service stations are an integral part of our motorway system. In my view, the Government's policy should be reviewed in many respects. Perhaps the Ministry ought to do the research to find out what is needed, then build the motorways and service areas, letting the sites to concessionaires for only a year or two. This would make it possible for professional caterers of various kinds to come in, not just the big firms like Rank, Ross and others who, one suspects, regard their concessions as, in some ways, an advertising or prestige symbol.
We must review the overall policy. What does the Minister ask of a would-be concessionaire when he applies for a concession? Does he ask for rest rooms and overnight accommodation? How far does the writ run? The overwhelming number of personal complaints which have come to my attention show that tragic consequences of the present system are felt by the man with a large family who, perhaps, wants glasses of milk and sandwiches for his children and something a little more substantial for himself and his wife. He faces a bill of £3 or £4 or even more. This is no way to make the motorway service areas popular. Is the Minister, by charging high rents, putting on a concealed toll? We do not know what the facts are.
The report of the survey done by Professor Llewellyn-Davies and the University College school of architecture ought to be published. It is said that there are in the Ministry only four officials working on these matters. In Germany, there is a much better standard of service, much better run and much more efficient. We need to know a great deal more. The effect of what is now happening in the wrangle between the Minister and the large concessionaires about the economics of the business, which are often clouded and about which we know nothing, is that the consumer, the man who uses the motorway, the man with his family or the lorry driver, is forgotten.
We want the service areas to be used. A decent measure of comfort should be provided. There should be good, clean,
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cheap food. People should be able to have a little relaxation as they journey along our motorways. This service is not being provided at present. By the time the motorway system is completed, we shall have over 50 of these stations, at an outlay of many millions of pounds. As yet, we have only 15. Valuable lessons are to be learned, and there should be informed public debate. The Minister should be more forthcoming on the facts and figures and he should publish the report of the survey to which we have referred.
12.45 p.m.
Dr. M. P. Winstanley: I am very grateful to the hon. Gentleman the Member for Bournemouth, East and Christchurch (Mr. Cordle) for raising this matter, in which, as the House knows, I have taken a particular interest during the past year or two.
I emphasise the need to make public the report to which, quite rightly, there has already been much reference. The survey was carried out, at the request of the Minister, by a university department, under distinguished leadership, yet we are told—this was said in answer to a question from me—that it could not be published. The Minister knows that the report is constantly referred to and its contents are guessed at by the Press.
The Guardian published a long article on the subject, suggesting that the report says precisely what I said in the debate on the Consolidated Fund Bill last year, namely, that many of the present difficulties arise out of the contracts which the Government negotiate with the concessionaires under arrangements which they inherited from the Conservative Government.
The report should be published. Until it is, we shall not be able to debate the crucial issues involved. We shall be discussing the symptoms rather than the basic disease.
12.46 p.m.
The Joint Parliamentary Secretary to the Ministry of Transport (Mr. Stephen Swingler): I welcome this debate, which gives me an opportunity to put on record again the division of responsibility as it now stands. The Ministry provides the site and leases it for 50 years to the developer, who undertakes to provide fuel, refreshment, toilet and parking facilities

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and to pay a rent. The Ministry, I accept, has an overall responsibility to see that the public gets a reasonable service.
Under the present arrangements, it is quite impracticable for the Minister to take personal responsibility for checking on or even laying down precise standards for every meal and every detail of service in every service area at every hour of the day or night. Detailed management must be left to the commercial concerns holding the concessions, and it is to them, therefore, that specific complaints should be addressed in the first instance.
Among his many criticisms, the hon. Member for Bournemouth, East and Christchurch (Mr. Cordle) has spoken of experience in other countries. I emphasise that, both before and since starting service areas in this country, we have studied extensively both the American and the Continental systems. For better or worse, we have adopted our own system based on entirely different concepts of finance.
On the question of service, I have some sympathy with what is said. It may well be true that on the Continent there is more pride in the personal service which is offered than there is in at least some service areas here. This is a matter to which attention ought to be paid by those responsible for management. There are bound to be complaints about service areas, and they will always make the headlines where there is a Ministry involved, but I cannot agree with the generally gloomy picture which is painted. Let us consider our own position at the Ministry.
The number of complaints received by us this year—I am referring to the last 12 months—was only 24 compared with 42 in the previous 12 months. I am giving the latest available figures. On the other side, we receive quite a number of expressions of appreciation about the service, the quality of food, the prices and other matters of that kind. It is a fact that the volume of trade in the service areas continues to outpace the growth of traffic on the motorways themselves, and, from the considerable number of people using the catering facilities, it is clear that the majority of customers are managing to find what they want.
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We have already applied a number of lessons learned from experience. For example, the size of sites and their layout have been considerably improved as we have gone along. But we know that there is still room for further improvement in various ways at various sites. Some concessionaires are clearly more successful than others. I should like to take this opportunity of emphasising to all developers that these are problems that require constant attention; problems of giving the customers the kind of service they require. Ministry of Transport officials discuss the problems with the companies at head office level and also frequently visit the sites at all times of the year, and by day and night to see the problems for themselves and to suggest ways to improve standards.
Now I come to some specific criticisms, because I want to cover as much ground as I can, under the headings mentioned by the hon. Member for Bournemouth, East and Christchurch—the quality of the food, prices, delays in service and cleanliness. First, we must face the fact that motorway caterers have a different problem from other caterers. It is laid down that they must provide for all tastes and pockets, from snacks to full meals, from the "transport caff" type of catering to that of a fairly high-class restaurant, and that they are expected to be able to meet practically all these kinds of demands 24 hours a day every day of the year.
Large proportions of the travelling public want the "chips with everything" type of meal, and it is no good hon. Members complaining about that. It is a fact to which the caterers should pay attention. Better-class meals should also be provided, but the demand for them is not so predictable and from what has been said I wonder whether the developers are not being over-ambitious in this class of trade. Service areas are not supposed to be dining clubs. They are designed to give the traveller reasonable refreshment and to get him on his way.
At one service area 60 per cent. of the dishes provided on the menu account for only 5 per cent. of the trade. It may well be that this extent of variety is not sensible. Staff, storage and turnover problems are introduced out of all proportion to the handful of people who occasionally

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require one of the less frequently requested dishes on the menu.
There is also a large and sporadic demand for snacks and take-away meals, and a large number of callers who want nothing more than a cup of tea or coffee. Everyone with his own particular wish expects to have it attended to speedily, whether there are 10 or 100 customers in the place at the time. Nobody can economically staff a business on the basis of always being able to satisfy a peak demand.
That brings me to the subject of prices. Unlike most caterers who can fix their hours of opening so as to close when demand drops, service areas are required to remain open 24 hours a day. This considerably increases the already high cost of staffing the area, which is usually located some distance from the town and inevitably means high cost of transport for the staff.
A company invests considerable capital in providing service area buildings and free toilet and parking facilities for motorway travellers, many of whom may spend nothing in the service area. I am told that recently at one service area nine coachloads of people used the toilet facilities within three hours and then left, contributing nothing to the cost of the service area.
It is also regrettable to have to say that the cost of vandalism is high. In one service area £2,000 worth of cutlery is being stolen per annum, and in some service areas the cost of cleaning can amount to as much as £4,000 a year.
I now come to the question of our charges. The suggestion is sometimes made that the contractors are crippled by exorbitant rents: this is quite wrong. I can say categorically that no concessionaire at the moment is paying a six-figure rent, and only one service area even approaches a figure of that order.
I must also point out that those developers who have invested much larger sums than the £350,000 mentioned by the hon. Member for Bournemouth, East and Christchurch have done so of their own volition and not because of demands by the Ministry. The rents they pay are from offers made by the developers themselves in open competitive tender, but, in any event. I emphasise that at the moment the rent paid to the Ministry amounts to
1690
an average of about three farthings in every shilling.
I do not imagine—indeed, the hon. Gentleman made the point—that hon. Members would suggest that the Ministry should not recover its substantial investment of taxpayers' money at a reasonable rate of return, nor would they suggest that if we put the cost of obtaining and preparing sites on the developers the prices would not reflect the extra charge. That would obviously happen.
The hon. Gentleman mentioned the Rank Organisation. I should like to make it clear that we are not proposing to pay compensation to the Rank Organisation in respect of the service area site concerned. What we are discussing in respect of this one site, which is not yet open, is an adjustment of the rent to take account of the fact that traffic diversions and other difficulties have occurred which are our responsibility and are outside the control of the Rank Organisation, which has taken on the concession. Under those circumstances it is reasonable that we should negotiate changes in the original contract.
I now turn to delays. Of course, delays sometimes occur as a consequence of the unpredictability of service area custom. There are very high peaks of traffic, often without warning. As an example, 118 coaches have been known to turn into a service area within 40 minutes, bringing in five times as many customers as the service area can accommodate at one sitting. On occasions like this delay is inevitable. Unlike other catering places, the service area cannot turn customers away, and to build areas of a size capable of dealing with an occasional peak of this kind without delay is out of all reason. Managers try to anticipate intelligently special demands such as cup ties and other special occasions, but they sometimes find themselves faced with the impossible.
One of the biggest headaches of any contractor is keeping the area clean. He must strike a balance between serving a large number of customers quickly and cleaning as he goes along. People will complain about tables not being cleared as soon as they have been vacated and also about clearing up going on while they are eating. I know no complete answer to this problem, which is not

1691
made easier by the amount of litter left about, which is sometimes very considerable.
It was suggested by the hon. Gentleman that we have caused developers to over-provide by suggesting unduly high traffic figures. That is an interesting converse to the complaint that we have not provided enough. With only two exceptions, traffic on the motorways has reached the forecast figure within three years of opening at the very latest. I must remind the House, as did my hon. Friend the Member for Bristol, North-West (Mr. Ellis), that developers are given a 50-year lease.
In all that I have said I want it to be clear that we are not a bit complacent about the position. Neither the Ministry of Transport nor the developers are free from faults, but the very low level of complaint to us has some significance. The complaints brought to our notice are investigated at once, but it is far better for specific complaints to be made to the manager on the spot. On the whole, generalised complaints help nobody, and those persons who cry havoc without giving evidence that they have made complaints to the right people at the right time are only doing a disservice to the cause they are apparently championing.
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I should now like to say a word about the Bartlett Study. It is a confidential report to my right hon. Friend the Minister and has a largely confidential content. But basic data in the report are being published in a number of journals. I should be very pleased to draw the attention of any hon. Member who is interested, to a number of journals where basic data which are publishable will appear. I would make this point, which is a quotation from the report:
"The detailed needs of the travelling public for food and drink were not considered in this Study. The type and quality of the food to be provided, the variety of the menu and the cost are all topics that are quite outside the scope of this Study."
I would emphasise that.
We are constantly examining the problems, including those dealt with in the Bartlett Report, and we shall examine the constructive suggestions that have been made in this debate. But I must say that it is a novel theory that the Ministry should provide experts to advise firms which are selected as expert in the fields of catering and—
It being One o'clock, Mr. DEPUTY SPEAKER suspended the sitting till half-past Two o'clock, pursuant to Order.
Sitting resumed at 2.30 p.m.

PRIVATE BUSINESS
  CHURCHES AND UNIVERSITIES (SCOTLAND) WIDOWS' AND ORPHANS' FUND (AMENDMENT) ORDER CONFIRMATION BILL
    PITTENWEEM HARBOUR ORDER CONFIRMATION BILL
      ROYAL BANK OF SCOTLAND ORDER CONFIRMATION BILL
      Read the Third time and passed.
ST. ANDREWS LINKS ORDER CONFIRMATION BILL
Considered; to be read the Third time Tomorrow.
ORAL ANSWERS TO QUESTIONS
  AGRICULTURE, FISHERIES AND FOOD

    Wet Fish (Minimum Price Scheme)
    Mr. Wallasked the Minister of Agriculture, Fisheries and Food if the Government have now reached a conclusion about a statutory minimum price scheme for wet fish; and if he will make a statement.
    The Minister of Agriculture, Fisheries and Food (Mr. Fred Peart): The White Fish Authority decided not to submit its scheme to Ministers in view of the lack of support for it from the industry.
    My right hon. Friend the Secretary of State for Scotland and I have reconsidered the possibility of Exchequer support as recommended by the Authority and by the Estimates Committee. But it is evident that this would not overcome the objections of principle raised by substantial catching interests as well as sections of the distributive trades.
    I am circulating a fuller statement in the OFFICIAL REPORT.
    Mr. Wall: Can I take it from the right hon. Gentleman's reply that this scheme is now dead?
    Mr. Peart: In present circumstances it is, but obviously we are always open to any proposal which may be put to us.
    Mr. Godber: The Minister has made a serious statement. I assume that he is in close touch with the industry and would wish to see it flourish and have a fair return?
    Mr. Peart: Certainly I can give that assurance.
    The Statement is as follows:
    I told the House on 2nd March, 1966 that the Government would consider any scheme of minimum prices for white fish which the White Fish Authority might submit, but that we could not promise an Exchequer contribution to its cost. The Authority subsequently published a draft scheme and considered the objections made to them by the fishery interests concerned. They concluded that their scheme would not command sufficient support to be workable and decided not to submit it to Ministers. They also re-affirmed their belief that a scheme was still needed but that an Exchequer contribution would be required.
    My right hon. Friend the Secretary of State for Scotland and I accordingly reconsidered the possibility of Exchequer support as recommended in the Sixth Report from the Estimates Committee on Assistance to the Fishing Industry. But it was evident that, financial considerations apart, there were objections to the principle of a statutory scheme, not only from important sections of the retail and wholesale trades but also from most organisations of inshore fishermen, and from substantial trawling interests. Even from those organisations that accepted the principle of a scheme there were conflicting objections to the substance of the draft scheme which could not be reconciled.
    It is clear that the question of an Exchequer contribution for a statutory minimum price scheme for white fish cannot usefully be pursued further in the situation I have described.

    Fisheries Review
    Mr. Wallasked the Minister of Agriculture, Fisheries and Food when he expects to complete the fisheries review announced in 1964 and due for completion in 1966.
    Mr. Peart: The review of grant policy for fishing vessels announced in 1964 was superseded by the more comprehensive review which was undertaken towards the end of 1965. Early in 1966 the Estimates Committee undertook their review of assistance to the industry. Their recommendations were received early in 1967 and have had to be taken into account. I hope to complete the review this year.
    Mr. Wall: As there has been no major change in the industry during the last two and a half years, why did it take so long

    1695
    for the Governmental review, which the Minister himself announced, to take place? Why did discussions with the industry start only a few weeks ago? Is this an example of Socialist planning?
    Mr. Peart: As the hon. Gentleman knows, there were also the recommendations of the Estimates Committee to consider, and they were received earlier this year. There has been no attempt to make any delay, but I am anxious to have a thorough review.

    Bread (Protein)
    Mr. Carter-Jonesasked the Minister of Agriculture, Fisheries and Food what percentage of protein is found in the average British loaf; and what percentage of protein is in the advertised high protein loaf.
    The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. James Hoy): The protein content of the average British loaf is approximately 14 per cent., calculated by weight on the dry matter of the bread.
    The Bread and Flour Regulations, 1963, require any bread which is described as high-protein bread to contain not less than 22 per cent. protein.
    Mr. Carter-Jones: I am grateful for that reply. Does my hon. Friend apreciate and will he bring to the notice of the Prices and Incomes Board the great discrepancy between the price of a loaf of ordinary flour bread and the price of a loaf with high protein content? Will he reconsider this problem?
    Mr. Hoy: I am aware of the difference, but when bread is advertised as being of very high protein content, it is expected to have a protein content of 35 to 40 per cent., and that obviously has some effect on the price.

    Bread (Water Content)
    Mr. Carter-Jonesasked the Minister of Agriculture, Fisheries and Food if he will either introduce legislation to restrict the water content of bread, or to impose severe price control on bread with a high water content.
    Mr. Hoy: No, Sir. In accordance with the recommendation of the Food Standards Committee, the Bread and Flour
    1696
    Regulations make no provision for a maximum moisture content.
    Mr. Carter-Jones: My hon. Friend must be aware that there is an increasing percentage of water in our bread and that as the water content and the air content rise, we stand in grave danger of being the nation making the most costly purchases of water and wind.
    Mr. Hoy: I do not have my hon. Friend's experience. We have received virtually no complaints in this respect. Only an optimum amount of water can be used in making any batch, or it would otherwise show in the end product. However, if my hon. Friend has any specific complaint, local inspectors would be grateful if he would make it known to them.

    Hedgerow Trees
    Mr. Gresham Cookeasked the Minister of Agriculture, Fisheries and Food what is his Department's policy towards the cutting down of hedgerow trees; and whether he will take steps to restrict the felling of such trees.
    The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. John Mackie): We have no powers to restrict the felling of hedgerow timber. Our advisory officers, in the course of carrying out their normal duties, give advice as appropriate to farmers on the value of hedgerows and hedgerow timber.
    Mr. Gresham Cooke: Is the hon. Gentleman aware that the policy of allowing farmers to cut down hedgerow trees without let or hindrance is causing much concern in the countryside? Might not the ruthless and over-hasty cutting down of these trees redound to the disadvantage of farmers all over the country in the long run?
    Mr. Mackie: I doubt whether there is as much ruthless cutting down of hedgerow timber as the hon. Gentleman suggests. It has to be cut for enlarging fields and straightening boundaries and so on, but I do not think that the agricultural community as a whole cuts it down ruthlessly.
    Mr. Gresham Cookeasked the Minister of Agriculture, Fisheries and Food to what extent hedgerows and

    1697
    hedgerow trees prevent scorching of crops by high winds and thus aid food production.
    Mr. John Mackie: This depends on the type of crop. Hedgerows and hedgerow trees are on the whole adverse to cereal production; on the other hand, they are widely used as a protection for various fruit and vegetable crops.
    Mr. Gresham Cooke: I thank the hon. Gentleman for showing their use as protection. However, would he not agree that it would be a great pity if hedgerows were destroyed and if saplings and English elms were not to grow in future, and does he not agree that this cutting away might be a great disadvantage to the country?
    Mr. Mackie: I repeat what I said to the hon. Gentleman earlier: I do not think that there is as much in this as he makes out. Farmers are conscious of their own interests and they will not follow this policy if they find that there is anything in what the hon. Gentleman says. Anyway, we give grants not only for taking out hedges, but for putting them back again.
    Mr. Farr: Will the hon. Gentleman bear in mind that hedgerows and trees in hedgerows provide shade and shelter for cattle and are also good natural reservoirs for wild life?
    Mr. Mackie: We appreciate that.

    Price Increases
    Mr. Eadieasked the Minister of Agriculture, Fisheries and Food what representations he has had from women's organisations in Scotland about increases in food prices; and what reply he has sent.
    Mr. John Mackie: We have received four representations, concerning grocers' delivery charges and the prices of grapefruit, milk, bakers' goods, and beer.
    After the necessary investigations, the correspondents were told the reasons for the increases and that there appeared to be no breach of the Government's policy.
    Mr. Eadie: I thank my hon. Friend for that reply. Does he not agree that there is price exploitation in various guises? If local authorities were to co-
    1698
    ordinate their statutory functions, for example, through their weights and measures departments, with consumer protection associations and ratepayers' protection associations, could not that help in this problem?
    Mr. Mackie: I do not disagree with the secondary suggestion but that is another question. In the four instances about which my hon. Friend questioned me we found that there was no breach of Government policy.
    Mr. Biffenasked the Minister of Agriculture, Fisheries and Food how many price increases have been notified to him under the early warning system; and how many have been proceeded with.
    Mr. Peart: Since 20th July last year, 215 notifications of price increases had been received by my Department; 86 of these were accepted as notified, and a further 72 notifications after modification. Eleven have been agreed for implementation after 30th June.
    My information suggests that the great majority of the price increases covered by these notifications which have been approved have now been implemented.
    Mr. Biffen: Could the right hon. Gentleman say whether the figure, which I think I heard correctly was 215, represents all the price increases which have taken place in those goods which were listed as being conditional on early warning to his Department before any increase could take place?
    Mr. Peart: I can give the hon. Member a full breakdown: 86 approved as notified; 72 approved after modification; 11 approved for implementation after 30th June; 10 withdrawn or lapsed; 25 rejected; and 11 under consideration.
    Mr. Lipton: Can my right hon. Friend say in how many cases he has dissuaded food manufactures from embarking upon food price increases at all?
    Mr. Peart: I have given the figure which indicates this.

    Aldrin and Dieldrin
    Mr. John Hallasked the Minister of Agriculture, Fisheries and Food if he has now received the comments of interested organisations on the recommendations of the Food Additives and

    1699
    Contaminants Committee that statutory limits should be placed on the amount of residues of aldrin and dieldrin in foods; and what action he proposes to take.
    Mr. Hoy: Yes, Sir; these are now being considered. My right hon. Friend will announce the action he proposes to take in due course.
    Mr. Hall: What does "in due course" mean? This is an important matter and many people are anxiously awaiting a final decision.
    Mr. Hoy: It does not mean tomorrow. My right hon. Friend has said that this is an important matter. We appreciate how important it is and the number of people who are waiting, but at the same time this is a subject which must have very careful consideration.

    Milk Products (Imports)
    Mr. Buchanan-Smithasked the Minister of Agriculture, Fisheries and Food if he has completed his discussions with the National Farmers' Union and the Milk Marketing Board regarding the regulation of imports of milk products; and if he will make a statement.
    Mr. Peart: My officials have had a useful exchange of views with the National Farmers' Union and the Milk Marketing Board on the impact of imports of certain dairy products, and in particular butter oil, on home production of milk products. The Government are keeping a close watch on developments.
    Mr. Buchanan-Smith: Could the Minister be more forthcoming and say what the Government are doing? Is he aware that imports of skimmed milk powder, so far as dumping is concerned, have proved difficult, and also butter oil in relation to evading the butter quota regulations?
    Mr. Peart: If the hon. Member has any evidence of dumping where he can show that material damage has been caused, I will look into it. He knows what is the traditional policy in relation to milk in this country. I am bound by certain agreements which were concluded by my predecessors.
    Mr. Godber: Will not the Minister agree that there is grave concern in the
    1700
    industry about developments in this sphere? Will he not further agree that implementation of his own national plan, if it provides the expansion of the dairy herd which he wants, will increase the difficulty? Could he say what action he proposes to take in the longer term?
    Mr. Peart: I have said that in my expansion plan we wish to have an increase in the dairy herd, because most of the beef which we require will come from it. Inevitably there will also be more milk products. However, the right hon. Gentleman must know that I am bound by agreements with New Zealand and Denmark, and those agreements were concluded by my predecessors.

    Eggs (Imports)
    Mr. Buchanan-Smithasked the Minister of Agriculture, Fisheries and Food if, in the interests of home producers, he will consider the phasing of egg imports over the whole year rather than concentrating them at particular periods.
    Mr. Peart: I can assure the hon. Member that the Government have under consideration the future level of egg supplies.
    Mr. Buchanan-Smith: While thanking the Minister for his statement, may I ask him whether he would not agree that it is unfair to expect home producers to market their produce in an orderly fashion knowing that the bottom of the market can be knocked away by concentrations of imports in a particular period? Could he not do something more positive to protect the producers from these disastrous conditions over which they have no control themselves?
    Mr. Peart: The hon. Member must know that imports of eggs are under 2 per cent. of total supplies in recent years and are considerably less, comparing the first four months of this year with a similar period going back even to 1963.
    Mr. Maxwell-Hyslop: Is the right hon. Gentleman aware that when we are producing over 98 per cent. of our domestic egg consumption, any imports at all are liable to knock the bottom out of the market? I suggest that no further evidence is needed.
    Mr. Peart: The hon. Gentleman is suggesting that in no circumstances should we

    1701
    import any eggs. That has never been the policy of this Government or of my predecessors.
    Mr. Bessell: Has the right hon. Gentleman taken account of the large importations of eggs from Poland?
    Mr. Peart: These importations are in the 2 per cent. figure which I mentioned.

    Planning Applications (Agricultural and Horticultural Holdings)
    Mr. Loveysasked the Minister of Agriculture, Fisheries and Food what support he gives to planning applications on agricultural and horticultural holdings when the proposals are considered by him to be of advantage to the industry.
    Mr. Peart: My present policy is to support applications for buildings without which the long-term needs of the land in question could not be met. Where this criterion is not satisfied I offer no comments.
    Mr. Loveys: Is the Minister aware that he almost invariably seems to make this "no comment" statement when his advice is asked for by planning authorities? His Parliamentary Secretary, in answer to a question of mine many months ago, said that he would have another look at the matter. Has this been done?
    Mr. Peart: I hope that planning authorities will not regard a "no comment" statement as a reason for turning down an application. There are difficulties here. It has probably been misinterpreted. That is not our intention. My Department is exploring with the industry the possibility of a revision of the practice. I note very carefully what the hon. Member has said.

    Milk (Producer Price)
    Mr. Moreasked the Minister of Agriculture, Fisheries and Food when he expects to be able to estimate the average producer price for milk in 1967–68.
    Mr. Hoy: It is not possible to give a firm estimate of the average net producer price until much later in the year because so many factors can affect the situation, but present indications are that the price will be of the order of 3s. 4d. a gallon.
    Mr. More: Is it not also clear that the average price will fall considerably short of the hopes held out by the Minister?
    1702
    What action is proposed to bring this up to the estimate forecast in the Annual Price Review?
    Mr. Hoy: It is not clear at all. Indeed, even the Milk Marketing Board said that it would not care to make forecasts for a whole year ahead, but would issue a monthly figure. The hon. Gentleman should not be so anticipatory about his question.

    Cyclamates
    Mr. Barnesasked the Minister of Agriculture, Fisheries and Food whether he has reached a decision about the use of sodium cyclamate in food products.
    Mr. Peart: I am now considering a further report from the Food Additives and Contaminants Committee on the results of recent work on the toxicology of cyclamates.
    Mr. Barnes: Can my right hon. Friend say why it is that if sodium cyclamates can be used in soft drinks, as they can be at the moment, it is not possible to give the go ahead for their use in special dietary foods subject to the same safeguards?
    Mr. Peart: That is a fair question. We have had a report since then and, therefore, I feel it is my duty to look at this before making a final decision.
    Mr. John Hall: Would not the Minister agree that there is considerable doubt about the possible effects of sodium cyclamates in foodstuffs? It is not at present permitted in the Common Market countries or in the United States, so would he consider carefully before agreeing to the use of sodium cyclamates in foodstuffs?
    Mr. Peart: This is what I am doing.

    Mutton and Lamb Imports (Irish Republic)
    Sir Frank Pearsonasked the Minister of Agriculture, Fisheries and Food what quantity of mutton and lamb has been imported from the Irish Republic during 1967 up to the latest available date; and how this compares with the same period in 1966 and 1965.
    Mr. Peart: 1,808 tons of mutton and lamb were imported from the Irish Republic in the first four months of 1967.

    1703
    In the same period in 1966 imports were 1,578 tons, and in 1965 they were 1,400 tons.
    Sir Frank Pearson: Will the right hon. Gentleman accept that it was his Government that negotiated this treaty for the imports of agricultural produce from Eire? Will he further accept that last autumn the distortion of the home market resulting from these imports caused grave concern in agriculture? Will he also accept that the figures he has given this afternoon give agriculture no confidence whatsoever that exactly the same situation will not arise in the coming autumn? Will he give an undertaking to look more closely into these matters?
    Mr. Peart: The hon. Member has really made a speech. It is obvious that we do accept responsibility, because I was there to negotiate. We had difficulties last autumn which were not specifically due to the treaty. I have repeated this over and over again. Indeed, I have taken action and we are having discussions with the Irish to prevent a recurrence.

    Ministerial Talks (Republic of Ireland)
    Sir Frank Pearsonasked the Minister of Agriculture, Fisheries and Food if he will make a statement about the official talks he has had recently with the Minister of Agriculture in the Republic of Ireland.
    Mr. Peter Millsasked the Minister of Agriculture, Fisheries and Food, in view of the unsatisfactory discussions with the Irish Government over export of fat cattle to the United Kingdom, what further representations he will make.
    Mr. Peart: Discussions with the Government of the Irish Republic are still proceeding. I do not propose to comment further at the present time.
    Sir Frank Pearson: Will the right hon. Gentleman recognise that this is a matter of confidence for agriculture and that shortly he will have to give it some assurance that the market will not be distorted in the coming autumn? Can he promise the House a statement on these discussions?
    Mr. Peart: I have said that I am having discussions. I have emphasised phasing and I have made statements
    1704
    about it. This is what I am trying to achieve. I hope the hon. Member will not spread woe.
    Mr. Mills: Will the Minister bear in mind that many of us feel that in this coming autumn we shall suffer the same sort of nonsense we had last autumn unless he takes a much tougher line with the Irish Government than he did before?
    Mr. Peart: I hope the hon. Member realises that there has always been free access of Irish products into our market. Therefore, the treaty is nothing to do with it. My predecessors always believed in this policy. I have told hon. Members that I am looking into this and we are having discussions. I hope the hon. Member does not follow the gloomy talk of his friends.

    Beef Imports (Irish Republic)
    Mr. Godberasked the Minister of Agriculture, Fisheries and Food by how much the imports of beef from the Irish Republic have increased since the signing of the agreement establishing a Free Trade Area.
    Mr. Peart: Beef imports from the Irish Republic over the nine months ending March, 1967, were 47,800 tons as compared with 29,800 tons over the same period ending March, 1966.
    Mr. Godber: Does the Minister now agree that that figure at least is a direct result of the agreement to which he has referred in replying to the last two Questions? Further, can he tell the House what steps he will take to encourage the larger importation of Irish stores rather than finished beasts, because that is what farmers in this country want? Finally, will he acknowledge that it is the treaty which has increased the gloom among farmers, rather than anything said by right hon. and hon. Gentleman on this side of the House?
    Mr. Peart: The right hon. Gentleman is quite right when he refers to the need for more Irish stores. That is what we had in the treaty. I think that the figure was 638,000. The problem last year was that they came to this country as fats rather than as stores. I am anxious to prevent this, but it had nothing to do with the treaty.
    Sir Knox Cunningham: Does the Minister appreciate that payments under the Free Trade Agreement have been used by the Republican Government to subsidise their dead meat trade, which has affected that trade adversely in Ulster?
    Mr. Peart: I do not think that Ulster factories have been affected by it. There are other factors. This has been stressed in Stormont, and I met a deputation. If the hon. and learned Gentleman can give me any facts and figures, I will look into the position.
    Mr. Godber: Will the Minister not admit that the subsidies last autumn must have been the direct result of the treaty which he signed? He cannot get out of that.
    Mr. Peart: I will not admit that. The subsidies have nothing to do with the treaty. They could have had a subsidy without the treaty. It was not included in the treaty. I hope that the right hon. Gentleman will look at the treaty and examine it carefully. It is obvious that he does not know anything about it.
    Mr. Emrys Hughes: In view of the indignation which has been expressed by right hon. and hon. Gentlemen opposite about the Irish treaty, does my right hon. Friend expect further indignation if we happen to go into the Common Market?
    Mr. Peart: I do not think that right hon. and hon. Gentlemen opposite would express indignation about that. They are only indignant when they wish to attack Eire.

    European Economic Community
    Mr. Joplingasked the Minister of Agriculture, Fisheries and Food whether he is satisfied that the information concerning agricultural matters supplied by the British Mission to the European Economic Community is adequate for the present application; and if he will make a statement.
    Mr. Peart: The information supplied by our Delegation in Brussels has been fully adequate for the Government's consideration of the implications of the common agricultural policy and of the position which we should accordingly adopt in negotiations with the E.E.C.
    Mr. Jopling: Is the Minister aware that the Head of the British Mission in Brussels gave evidence upstairs to the Select Committee on Agriculture that he has been asking for another agricultural expert since last October? Is he suggesting today that our Ambassador in Brussels is talking through his hat?
    Mr. Peart: I am saying what has been said before, that the staffing of the Delegation is a matter for my right hon. Friend the Secretary of State for Foreign Affairs. I am satisfied that our assessment of the implications of a common agricultural policy, summarised in the recent White Paper, is correct. We get all the information, and we reproduce it. Hon. Gentlemen opposite always attack the Government for increasing the number of civil servants. Now they are asking me to have more. I would remind them that we are not negotiating yet.
    Mr. Joplingasked the Minister of Agriculture, Fisheries and Food how many officials he has seconded to the British Mission to the European Economic Community in the last two months; and how many he intends to make in the immediate future.
    Mr. Peart: No officials from my Department have been seconded to the United Kingdom Delegation to the European Communities in the last two months in addition to the Assistant Secretary, who has been there since January, 1965. The question of future secondments is bound up with the overall staffing of the Delegation for the purpose of negotiations, and I have nothing to add to the reply given by my right hon. Friend the Secretary of State for Foreign Affairs on 5th June.—[Vol. 747, c. 107.]
    Mr. Jopling: Is the Minister aware that that is a most unsatisfactory Answer? The Select Committee on Agriculture has been told that when application to join the Community is made, more staff will be needed. Is he further aware that the Chief Agricultural Officer at the Mission has said that it takes a new man six months before he is any good to the Mission?
    Mr. Peart: I cannot accept that. I shall be appearing before the Select Committee, and I have no doubt that the hon. Gentleman will question me about

    1707
    it. I believe that we have adequate facilities for obtaining all the information about the effect of a common agricultural policy on British agriculture. I would remind him again that we are not yet negotiating.
    Mr. Peter Mills: Is it not a fact that some of the best agricultural economists have been transferred from the Ministry of Agriculture to the Department of Economic Affairs just when they are needed?
    Mr. Peart: I do not accept that. It is not right. I have a very fine Economics Section. In addition, a lot of our advice comes not from within my Department but from a special arrangement which we have with various universities.
    Mr. Bryant Godman Irvineasked the Minister of Agriculture, Fisheries and Food what consideration he has now given to steps required to maintain winter milk supplies in the event of this country joining the European Economic Community.
    Mr. Peart: The arrangements needed to maintain winter milk supplies if we were to join the E.E.C. would be a matter for discussion with the Community.
    Mr. Godman Irvine: What work has been done by the right hon. Gentleman and his advisers about this vital matter, which the Select Committee has been told might lead to rationing in the country?
    Mr. Peart: We have done a lot of work on this. As the hon. Gentleman knows, we have a different system whereby we emphasise the liquid milk market and give incentives for milk produced in the winter period. This is an important matter, and we are well aware of it. There are various possible solutions, but it will be a matter for discussion if we ever negotiate.
    Mr. Elystan Morganasked the Minister of Agriculture, Fisheries and Food if he will cause a working group to be set up to study the effect upon upland farms of loss of subsidy following on Great Britain's entry into the European Economic Community.
    Mr. Peart: The position of upland farms in Common Market conditions
    1708
    would depend on the arrangements agreed for agriculture in an enlarged community and I doubt, therefore, whether it would be useful to set up any such working group at this stage. I am, of course, keenly aware of the special difficulties of hill farmers and we shall naturally bear their interests in mind.
    Mr. Morgan: Does not my right hon. Friend agree that as there is evidence that between one-half and two-thirds of the net income of upland farms is represented by subsidies, this poses a special problem and builds up a strong case for an early and detailed examination of this problem?
    Mr. Peart: As my hon. Friend knows, I referred to this problem in my White Paper. I recognise the problems of the hill and upland areas. These are areas which we must seek to protect, and we have this in mind.
    Mr. Gwynfor Evans: Is the right hon. Gentleman aware that because Welsh agriculture is so dependent on dairy farming and on hill farms, the adverse effects on Welsh agriculture of our entry into the Common Market will be worse than on the agriculture of any of the other countries of Great Britain?
    Mr. Peart: I accept that there are problems for Welsh agriculture in relation to hill and upland farms. These problems are also peculiar to many parts of the north of England and Scotland. I have emphasised this in my White Paper. We are well aware of the problems.
    Mr. Bessell: In view of the anxiety which has been expressed by hill farmers, will the right hon. Gentleman reconsider his answer to his hon. Friend the Member for Cardigan (Mr. Elystan Morgan) and set up a working party to examine this situation?
    Mr. Peart: I do not think that there is any need for a working party. After all, I have said that I as the Minister and the Department are well aware of the problems, and I have stressed these in my White Paper. I do not think that it would be to anyone's advantage to have a separate working party outside.
    Mr. Godber: Will the right hon. Gentleman realise that the answers he is giving this afternoon give the impression that while he emphasises that he is aware

    1709
    of the problems, he does not seem to be doing much about solving them? In answer to a previous question he used the phrase, "if we go into negotiations". Will he regard this as a matter of urgency, and one to be treated seriously?
    Mr. Peart: I do not know how the right hon. Gentleman can say that we can solve this problem when we are not negotiating. This is an absurd situation. The right hon. Gentleman always advocated entry without any safeguards.
    Mr. Godber: That is untrue.

    Bacon (Quota)
    Mr. Peter Millsasked the Minister of Agriculture, Fisheries and Food whether he is satisfied that the agreement made between producers and the bacon curers will encourage producers to fulfil their share of British bacon quota; and if he will make a statement.
    Mr. Peart: Arrangements between producers and curers for the sale of pigs are matters for the parties concerned. An agreement between sellers and buyers is likely to encourage mutual confidence and is to be welcomed for that reason.
    Mr. Mills: Is it not true that this agreement is not a fair one to the producers and, in fact, is almost a form of blackmail in that they cannot find any further outlets? Will the Minister make strong representations to bacon curers to ensure that pig farmers have a fair deal in this respect?
    Mr. Peart: I hope the hon. Gentleman appreciates that the terms of what is known as the national contract are entirely a matter for the parties concerned. If what he is asking me to do is to interfere with normal commercial arrangements, I am afraid that I cannot do that.
    Mr. Buchanan-Smith: Can the Minister say whether he is satisfied that the level of slaughtering and forecast slaughtering will be adequate for home producers to fulfil their undertakings?
    Mr. Peart: That is a separate question. On the wider aspect about progress in production, I think that the figures show that there is a trend upwards, and a recent P.I.D.A. Report emphasised that. In Northern Ireland particularly, gilts are
    1710
    improving, so we shall get increased production. It is too early yet to say what the effect will be.

    Milk (Manufacturing Purposes)
    Mr. Bryant Godman Irvineasked the Minister of Agriculture, Fisheries and Food what steps he proposes to take to increase the use of milk for manufacturing purposes.
    Mr. Peart: None, Sir. Milk production surplus to requirements for liquid consumption is already fully utilised in the manufacture of milk products.
    Mr. Godman Irvine: If we are to have additional beef calves as a result of the right hon. Gentleman's proposed national plan, is it not essential that a lot of work is done?
    Mr. Peart: As I said previously, if we are to have an expansion of the dairy herd, inevitably there will be an increase in milk products on the manufacturing side. I have always stressed that. But the hon. Gentleman must realise that we have special agreements. We gave assurances to New Zealand and Australia in 1963 and to Denmark in 1959. If hon. Gentlemen wish to break those assurances, they should tell me.

    Development Proposals (Agricultural Land)
    Mr. Charles Morrisonasked the Minister of Agriculture, Fisheries and Food what is the machinery of consultation with other Government Departments concerning the loss of agricultural land for development purposes.
    Mr. Peart: My Department is consulted on all development proposals involving the use of more than a very few acres of agricultural land. The procedure for consultation differs to some extent according to the type of development proposed. If the hon. Member would like details I will be glad to write to him.
    Mr. Morrison: Can the right hon. Gentleman say what encouragement he gives to other Departments to make use of nonproductive rather than agricultural land for development, and does he believe that we shall be able to maintain the present proportion of home-produced food as the

    1711
    population increases and as the development of good land continues?
    Mr. Peart: We always have close consultation, and I always stress to other Departments that where possible they should not use good agricultural land. On the other hand, there may be instances when the national interest must come first, for obvious reasons, but we always have this consultation.
    Mr. Hawkins: Was the right hon. Gentleman consulted over the taking of land for the proposed aerodrome at Stansted, and if he was, what advice did he give?
    Mr. Peart: I was consulted. It is not for me to reveal the content of private discussions with my colleagues, but I stress what I have said earlier in reply to previous questions.
    Mr. Farr rose—
    Mr. Speaker: Mr. Farr.
    Mr. Farr: I was going to ask the same question.
    Mr. Speaker: There is no need for the hon. Member to repeat it.
    Mr. Patrick Jenkin: Will the right hon. Gentleman confirm that his Department was not represented on the inter-departmental Committee which reported on Stansted Aerodrome in 1964? Is he aware that of the 15 members, 13 represented aircraft interests, and only two represented other Departments?
    Mr. Peart: I do not think that I appointed that Committee, but I have always been consulted about this.

    Fishing Vessels (Improvement Grants)
    Mr. Wolrige-Gordonasked the Minister of Agriculture, Fisheries and Food if he is aware that there is concern about delays over grant procedures for improvements in fishing boats, where these improvements are minor and no large-scale expenditure is required; and if he can expedite this process in regard to work up to a limit of £1,500.
    Mr. Hoy: Yes, Sir. I understand, however, that the White Fish Authority and the Herring Industry Board have now simplified their arrangements for dealing with straightforward applications.
    Mr. Wolrige-Gordon: I thank the hon. Gentleman for that reply. Can he clarify it a little? Is it now a fact that these grants will be allowed without inspection if the work is for a sum below the minimum suggested in my Question?
    Mr. Hoy: We are not going as far as that. I said that the whole procedure has been simplified. Both the White Fish Authority and the Herring Industry Board have been quick to respond to the needs of the situation, and it is because of that that they have made this new plan for dealing with straightforward applications.

    Oil and Detergent Pollution (Fish and Shellfish)
    Mr. Goodhartasked the Minister of Agriculture, Fisheries and Food what experiments are being carried out to ascertain the effect that exposure to quantities of oil and detergent has on the health of fish and shellfish.
    Mr. Hoy: A series of experiments is being made to establish the toxicity of both oils and detergents, and of mixtures of these substances, to molluscs and crustacea and a report will be published in due course.
    These experiments are being confined to shellfish, particularly those of commercial importance, since earlier work shows that, although fish are similary affected if they are kept in an artificially confined area with these substances, in natural conditions they escape from polluted waters and do not suffer appreciable damage.
    Mr. Goodhart: Is the hon. Gentleman aware that some responsible scientists are concerned about this following the appearance of some rather unpleasant mutations among those plankton which have survived? Will he make sure that resources are available so that a close watch can be kept into the situation about fish as well as shellfish?
    Mr. Hoy: Considerable work is being done by the Ministry's own shellfish laboratory at Burnham on Crouch, and the Marine Biological Association in Plymouth, which I visited a week or two ago, is also working on this. It will be seen, therefore, that a great amount of work is taking place. Indeed, it had gone on previously, and it was because of the

    1713
    research carried out by our people at Burnham on Crouch that we were well prepared to deal with the problems created by the "Torrey Canyon".
    Mr. Gibson-Watt: Is the hon. Gentleman aware that there is still anxiety about the contents of the "Torrey Canyon"? Can he give the House an absolute assurance that there is no oil in the ship?
    Mr. Hoy: What oil remains in the "Torrey Canyon" has nothing to do with this Question. All I can say is that we have taken every possible step to deal with it.
    Mr. Geoffrey Wilson: Can the hon. Gentleman say whether there have been complaints from Cornwall about the effect of the detergents? As far as I know, there have been none.
    Mr. Hoy: I think that the hon. Gentleman may be largely right. I went to Cornwall two or three weeks ago, and i think that they are grateful for all that has been done in clearing the beaches. We then had to consider, however, what effect the detergents might have on the sea life, and I am happy to say that we did not receive any answer to our inquiries which would give ground for any real concern to the whole industry.
    Mr. Buck: Can the hon. Gentleman say how his Answer is applicable to oysters? I understand that he indicated that crustaceans were able to get out of their natural position in natural water. How does this apply to oysters? What is the effect of oil on them?
    Mr. Hoy: I can tell the hon. Gentleman what happened to the oysters. Steps were taken to protect the oyster beds, and the oyster fishermen are grateful for what we have done. I am sure that if the hon. Gentleman thinks about this, he will realise that it is not a laughing matter. It concerns the livelihood of many people, and we took steps to protect it.

    Food Preservatives (Committee's Review)
    Mr. Patrick Jenkinasked the Minister of Agriculture, Fisheries and Food whether he will take steps to expedite the review by the Food
    1714
    Additives and Contaminants Committee of the use of preservatives in food.
    Mr. Hoy: The use of preservatives in foods is one of several important subjects being reviewed by the Food Additives and Contaminants Committee and I am sure that it will be completed as soon as possible.
    Mr. Jenkin: Is the hon. Gentleman aware that that tells us precisely nothing? Does he realise that representations were invited more than two and a half years ago, and that the industry is still waiting for some results from them?
    Mr. Hoy: I thought that I had conveyed an answer. I hope the hon. Gentleman is not suggesting that we should not take into consideration the reports of the Food Additives and Contaminants Committee. This is the reason why it was set up, and I think he ought to pay tribute to it. It has presented five reports during the last 18 months; those on aldrin and dieldrin, antioxidants, and cyclamates were particularly urgent matters. These have all been dealt with.

    Sorbic Acid
    Mr. Patrick Jenkinasked the Minister of Agriculture, Fisheries and Food when he expects to promulgate Regulations covering the use of sorbic acid in foodstuffs.
    Mr. Hoy: The Preservatives in Food Regulations, 1962, already permit the use of sorbic acid in certain specified foods.
    Mr. Jenkin: Does the hon. Member not recognise that the industry is at present in a state of great uncertainty because it does not know what the committee will recommend about sorbic acid? Does he not realise that this causes difficulty not only for the producers of sorbic acid but also to those contemplating using it? Will he take steps to expedite the committee's review of this material?
    Mr. Hoy: The committee is extremely busy. Sorbic acid is permitted in some cases. I am aware that a number of people are awaiting the outcome of the committee's report, and surely he will not expect me to anticipate it.

  SCOTLAND

    Police Forces (Strength)
    Mr. Edward M. Taylorasked the Secretary of State for Scotland by what number the police forces in Scotland were below their authorised establishments at the most recent date for which figures are available; and if he will indicate the shortage which existed in the same month of each of the previous three years.
    The Secretary of State for Scotland (Mr. William Ross): 989 at 31st May. In the three preceding years the figures were 769, 855 and 378.
    Mr. Taylor: Is the right hon. Gentleman aware that over 200 Glasgow policemen have left the force since the beginning of this year and only 50 have been recruited? In the face of the recent crime figures—particularly the figures for violent crime—and the serious manpower position, will the right hon. Gentleman abandon his deplorable complacency and tell the House what he intends to do about this situation?
    Mr. Ross: The first thing I did when I read this Question was to check up. It seems that someone on the Glasgow Herald, having taken the fact that 101 had left, then took the constituent elements—that 66 had retired without pension, 20 with pension and 15 had transferred, making a total of 101 again—and added that to the other 101 and got a total of 202. In other words, the correct figure is 101. I advise the hon. Gentleman to check his figures before he makes such statements. The position is serious. The hon. Member will find that we have also raised the establishment, and that also makes a difference.
    Mr. MacArthur: Does not the right hon. Gentleman accept that the substantial fall below establishment is a very serious matter at a time when the rate of crime is increasing and the rate of detection falling? Will he take urgent steps to bring these forces up to their established strength?
    Mr. Ross: This is what we are doing. As the hon. Member knows, we have been examining this matter and taking action on reports coming foward from our advisory committee. The new pay scales will also help, as will the relaxa-
    1716
    tions in respect of matters not essential to police standards. These will help to bring in more people.
    Mr. Taylor: In view of the unsatisfactory nature of that reply, I beg to give notice that I shall raise the matter on the Adjournment.

    Post-primary Education
    Mr. Eadieasked the Secretary of State for Scotland what percentage of the school population in Scotland now receives a post-primary education of at least three years.
    Mr. Ross: Seventy-eight per cent. of pupils leaving school in the year ended June, 1966 had completed stage SIII or beyond.
    Mr. Eadie: I thank my right hon. Friend for that answer, but does not he agree that the figures show an improvement from the previous year? Does he agree that until we raise the school-leaving age a good percentage of pupils in Scotland will not be able to get a three year's post-primary education?
    Mr. Ross: That is true, but if we take 1962, when the figure was 61 per cent. this shows a considerable increase in people voluntarily staying on.

    European Economic Community
    Mr. Edward M. Taylorasked the Secretary of State for Scotland why he will not prepare a White Paper on the implications for Scotland of Great Britains' proposed entry to the European Economic Community.
    Mr. Ross: I would refer the hon. Gentleman to the reply given on 15th June by my right hon. Friend the Prime Minister to my hon. Friend the Member for Cardigan (Mr. Elystan Morgan).—[Vol. 748, c. 127.]
    Mr. Taylor: If the right hon. Gentleman is not even able to persuade his Cabinet colleagues to tell the people of Scotland the facts, how can we have any confidence in his ability to represent them in these negotiations?
    Mr. Ross: The hon. Member should appreciate that the people of Scotland are well able to deduce the facts for themselves in respect to these vital matters.

    1717
    Where it is essential to know the differences that exist—as in agriculture—the facts have already been brought out. In relation to law they have been brought out. If the hon. Member were interested he would be asking me about the effect on Scotland of the Kennedy Round or G.A.T.T., or E.F.T.A., which he has never done in the past.
    Mr. James Davidson: Has the right hon. Gentleman examined the implications of Great Britain's proposed entry into the European Economic Community in relation to the Treaty of Union of 1707?
    Mr. Ross: Yes, and I see no bar.
    Mr. Bruce-Gardyne: Will not the right hon Gentleman think again about this and agree that the pubication of a White Paper, as suggested by my hon. Friend, might do something to clear up the doubts about his own attitude in this matter?
    Mr. Ross: He should ask me about my attitude and he would get an answer without my having to produce a White Paper, which might not produce anything practicable.
    Mr. Manuel: Does my right hon. Friend recognise the extreme difficulty that he would have in producing a White Paper when negotiations have not even started and, therefore, no implications could be drawn for presentation to the House?
    Mr. Ross: The implications for Scottish industry are the same as for British industry. It is quite impossible for me to try to draw rings round one part of the country and another part, and to say that they are different.
    Mr. Eadie: Is my right hon. Friend aware that there is more enthusiasm on the benches opposite—White Paper or no —for entry into the Common Market?
    Mr. Ross: I cannot see any sign of enthusiasm for anything on that side of the House.
    Mr. Clark Hutchison: Will the right hon. Gentleman use his good offices to see that Scottish trade is stepped up to America and the great British nations beyond the seas and not get too mesmerised by Europe?
    Mr. Ross: We do not want to get mesmerised by Europe or anywhere else. We must appreciate the weaknesses of Scottish trade, the need for growth and development, and the need to take steps to make it suited for all eventualities.
    Mr. Noble: When the right hon. Gentleman talks about the weaknesses of Scottish trade, will he remember that we export a larger proportion of our trade than does the rest of the United Kingdom?
    Mr. Ross: That is true, and even more true when considering the newer industries which have come into Scotland recently.

    General Practitioners (Premises)
    Mr. Hannanasked the Secretary of State for Scotland how many applications or inquiries have been received by the General Practice Finance Corporation under Section 2 of the National Health Service Act, 1966, for the acquisition, improvement or repair of premises used for general practice.
    Mr. Ross: I understand from the Corporation that it has received 12 inquiries and nine applications from doctors in Scotland.
    Mr. Hannan: What powers of inspection has my right hon. Friend at the moment in respect of the still existing dreary, ill-lived in and ill-ventilated consulting rooms? Since his reply is disappointing, what steps can he take to draw to the attention of general practitioners the provisions of the Act?
    Mr. Ross: The attention of every general practitioner has already been drawn to the provisions of the Act and the facilities available to the Corporation. It is early days to suggest that the scheme has not come up to expectations. It has been going only since the beginning of last month. As time goes on I am sure we shall receive the applications that we hope for, which will improve standards.

    Fire Prevention
    Mr. Hannanasked the Secretary of State for Scotland when he expects to introduce legislation for the improvement of fire prevention.
    Mr. Ross: New fire prevention legislation is at an advanced stage of preparation, but I am unable to say when it will be introduced.

    Herring Industry Board (Meal and Oil Industry)
    Mr. Wolrige-Gordonasked the Secretary of State for Scotland what changes he proposes to make in the statutory responsibilities of the Herring Industry Board for the meal and oil industry.
    Mr. Ross: None, Sir.
    Mr. Wolrige-Gordon: Why not? Is not the right hon. Gentleman aware that the introduction of the first seiners into the Scottish fleet will mean an enormous increase in the catching power of the fleet and the production of many more trans of herring? If the Herring Industry Board does not take responsibility for the oil and meal industry to which many of these herrings will inevitably go, what future is there for the fishermen, who are extremely concerned about the situation?
    Mr. Ross: The hon. Member is taking far too gloomy a view. It was right to encourage the development of modern catching methods which will raise productivity. While the Board will do its utmost to assist marketing, it should not be made responsible for taking all the surplus herring.
    Mr. Buchanan-Smith: Surely, if we are to encourage the development of marine technology in regard to the methods adopted by the herring fleet, we must also keep up to date with marketing and processing methods?
    Mr. Wolrige-Gordon: Is the Minister aware that I do not want to take a pessimistic view, but this matter must be considered very much more seriously than it is being considered at the moment?
    Mr. Ross: Perhaps the hon. Member will appreciate that the matter is being considered and actions have been taken. He should know that there is capacity—[Interruption.]—in relation to this matter. Action has been taken, and I can assure the hon. Gentleman that on this matter we do not take as gloomy a view as he does.

  AVIATION

    Airports
    Mr. Cordleasked the President of the Board of Trade at what stage consultations take place with regional economic planning councils regarding the siting of new airports and changes to existing ones.
    The President of the Board of Trade (Mr. Douglas Jay): Few major aerodrome projects have been initiated since the economic planning councils were set up, but my policy in such cases is to consult the appropriate regional economic planning councils as fully and as early as possible. On the subject of aerodrome planning generally, my hon. Friend has already had one meeting with the councils' chairmen, and another will be arranged shortly.
    Mr. Cordle: If regional economic planning councils have any useful function at all, should they not be consulted at the first stage of proposals in connection with new and existing airports? Is it not fantastic that their views have not been obtained, and does it not make a mockery of so-called regional government?
    Mr. Jay: No, Sir. Their views are being obtained wherever possible.
    Mr. Onslow: Is the President of the Board of Trade now telling the House that he is absolutely satisfied with the part played by the regional economic council in connection with Stansted?
    Mr. Jay: I am sure the hon. Gentleman knows that in that case there was a difficulty—[HON. MEMBERS: Oh"]— because of the pledge given by the previous Government, which the hon. Gentleman supported, following the rules laid down by the Council on Tribunals, about which I am sure he is very fully informed. That made it impossible in this case to hold the consultations we would have wished.
    Mr. Patrick Jenkin: Is the President of the Board of Trade aware that the biggest single objection to his deplorable proposal about Stansted is that it contravenes virtually every principle of regional economic planning, and will he undertake to consult the appropriate

    1721
    regional economic planning council at the earliest possible opportunity?
    Mr. Jay: No, Sir. The hon. Gentleman shows himself to be totally wrong on all the relevant facts.

    London-Teesside Air Service
    Dame Irene Wardasked the President of the Board of Trade why there is delay in announcing the result of the appeal proceedings in respect of the London-Teesside Air Service.
    Mr. Jay: I expect to announce my decision very shortly.
    Dame Irene Ward: In view of the very long delay there has been, will the right hon. Gentleman be kind enough to define "very shortly", because his idea of the term is slightly different from mine?
    Mr. Jay: Not in more precise terms than that. But I should like to tell the hon. Lady that I am very anxious to reach the right decision here, because it is of great importance, as she knows, to the North-East Coast. I am therefore making sure that all the facts are before me before I come to a decision.

  ECONOMIC AFFAIRS

    Industrial Productivity
    Sir Knox Cunninghamasked the First Secretary of State and Secretary of State for Economic Affairs if he will bring up to date and give the latest revisions to the Table of Industrial Productivity 1955 to 1966, Output per Head in Standard Industrial Classification Orders II-XVIII; and if he will give the percentage changes in industrial productivity between the second quarter of 1961 and the first quarter of 1962, and between the second quarter of 1966 and the first quarter of 1967.
    Hon. Members: Where is the Minister?
    Mr. Webster: Can the Question not be deferred, Mr. Speaker?
    Mr. Speaker: The hon. Member suggests that we defer the Question until the Minister comes. I think that that is the only thing we possibly can do.
    Sir Knox Cunningham: On a point of order. Mr. Speaker. Would it not be
    1722
    possible for the Whip to give me the Answer, even if he cannot answer a supplementary question?
    Several hon. Members rose—
    Mr. Speaker: Order. I am interested to hear all the points of order that come up, but they must come up one at a time. Mr. Webster.
    Mr. Webster: Further to that point of order, Mr. Speaker. Is there not a Treasury Minister, a member of the Household or someone, even the Leader of the House, who could give the Answer if the Chancellor of the Exchequer is not present?
    Mr. Speaker: I thought that what was plain was that the Minister himself did not answer. This seems to be the position at the moment. Does anyone else wish to address me on a point of order?
    Sir A. V. Harvey: Mr. Speaker, this has clearly placed you in a very difficult position. You have got through a great many Questions very quickly, largely due to hon. Members opposite being absent. If the Minister arrives—
    Hon. Members: Sit down.
    Mr. Speaker: Order.
    Sir A. V. Harvey: if the Minister arrives after 3.30, will the Question still be answered?
    Several hon. Members rose—
    Mr. Speaker: Order. I must deal with one point of order before I take the next. I can answer that question quite easily. It is not possible to answer Questions after 3.30 unless the Minister asks leave of the House to do so. May I just make this simple comment as the only neutral in the building, that there have been absences on both sides, and there have been a considerable number of absences on both sides during Question Time today.
    Sir C. Osborne rose—
    Mr. Gibson-Watt: On a point of order—
    Mr. Speaker: Order. No one has a monopoly in putting points of order. Sir Cyril Osborne.
    Sir C. Osborne: On a point of order, Mr. Speaker. As the First Secretary is the second most important Minister in

    1723
    the Government—[HON. MEMBERS: "No."]—he ranks No. 2—is it not a grave discourtesy to you as well as to the House that someone should not be here to answer the Question, and have you no power to reprimand him?
    Mr. Speaker: I have the power to reprimand hon. Members, but I do not propose to use it at the moment.
    Mr. Jay: Further to that point of order, Mr. Speaker. Can you explain why such a high proportion of members of the party opposite were not here to ask their Questions today?
    Mr. Helfer: Further to that point of order, Mr. Speaker. Could you, perhaps, make some representation to the organisers of the Ascot race meeting so that hon. Members can attend this House rather than the Ascot race meeting?
    Several hon. Members rose—
    Mr. Speaker: Order. I am afraid that what happens at Ascot is not a point of order for Mr. Speaker.
    Mr. Gibson-Watt: On a point of order, Mr. Speaker. With respect, a moment ago you said that the failure of Ministers to appear to answer Questions was shared by both sides of the House—
    Mr. Speaker: Order. If the hon. Member wants to make a point of order on what Mr. Speaker said he must base it on what Mr. Speaker actually said. I spoke of the absence of hon. Members, not of Ministers. Sir Knox Cunningham.
    Sir Knox Cunningham: Some time ago, Mr. Speaker, I asked Question No. 72.
    The Joint Under-Secretary of State for Economic Affairs (Mr. Harold Lever): I must apologise to the House. The Answer is that I am publishing in the OFFICIAL REPORT a table which brings up to date the figures given in my reply to a Question by the hon. Member for Worcester (Mr. Peter Walker) on 27th January—[Vol. 740, c. 375.]—and includes revised indices for 1965 and 1966. Between the second quarter of 1961 and the first quarter of 1962 the index of output per head fell by 0·6 per cent.; between the second quarter of 1966 and the first of 1967 it is provisionally estimated to have risen by 1·8 per cent.
    Sir Knox Cunningham: Can the Minister say whether these figures are those
    1724
    which were issued today, and was that the reason for his delay in coming here?
    Hon. Members: Oh.
    Mr. Lever: I have already apologised to the House for the delay. I take full responsibility for it. I think the House will know that I would not be guilty intentionally of any discourtesy. I can only say that I regret that certain mechanical defects resulted in my being late in arriving to answer the hon. and learned Gentleman's Question.
    Sir Knox Cunningham: Are these today's figures?
    Mr. Speaker: Order. Mr. Page.
    Mr. John Page: Do not the figures given by the Minister dramatically illustrate the complete failure of the Selective Employment Tax to produce the results which were intended, and will he give us a further answer to this?
    Mr. Lever: The hon. Gentleman is jumping to premature conclusions from an inadequate consideration of very complicated figures.
    Sir C. Osborne: The Minister will remember that yesterday the Prime Minister told the Productivity Group of industrialists that the nation would require a 3 per cent. increase in productivity to maintain the promised programme. Will these figures meet the Prime Minister's requirement? If not, how long will it take to meet it?
    Mr. Lever: The estimated rate of growth will, in fact, meet the Prime Minister's requirement, and so far as it lies within the Government's power we are determined to meet that growth which the Prime Minister has indicated.
    Sir Knox Cunningham: Owing to the unsatisfactory nature of that reply, I will raise the matter at an early date.
    Following is the table:

    OUTPUT PER HEAD (SEASONALLY ADJUSTED)

    INDEX NUMBERS (1958 = 100)

    All production industries SIC Order Nos. II—XVIII

    1965—Q 1

    …

    …

    125·8

    Q2

    …

    …

    124·9

    Q3

    …

    …

    125·1

    Q4

    …

    …

    126·4

    1966—Q 1

    …

    …

    127·8

    Q2

    …

    …

    127·2

    Q3

    …

    …

    128·0

    Q4

    …

    …

    127·2

    1967—Q 1 (provisional)

    …

    …

    129·5

SOUTH ARABIA (MUTINY)
Sir Alec Douglas-Home(by Private Notice) asked the Secretary of State for Foreign Affairs whether he will make a statement about the mutiny in the South Arabian Federal Army.
The Minister of State for Foreign Affairs (Mr. George Thomson): I need hardly tell the House that yesterday was a day of black tragedy in South Arabia with a sad waste of British and Arab lives.
The train of events so far established is this. As the House knows, the Federal forces have had to be reorganised and expanded for their wider duties under independence by 1968. This involves the amalgamation of the Federal Regular Army, and most of the Federal Guard into the South Arabian Army; and the formation of the South Arabian Police from the remaining Federal Guard elements and existing police forces.
The South Arabian Army and the South Arabian Police, as it is to be called, were formally established early this month. The pace, for reasons of which my right hon. Friend the Foreign Secretary reminded the House on 19th June, has had to be rapid, but the programme has hitherto gone to schedule.
About 10 days ago a group of officers of the former Federal Guard improperly petitioned the Federal Minister of Defence about alleged grievances they felt, basically for reasons of personal and tribal jealousy. This led to the suspension of the four officers primarily concerned from duty on 17th June. The disturbances yesterday arose directly from this dispute.
Disturbances started with a mob of South Arabian Army apprentices and soldiers demonstrating at two Army camps, apparently against tribal rivals. A good deal of damage was done after they had rushed the guard room and the officers' mess. Order was restored after about two hours. There was apparently no shooting there and no British troops were involved in that case.
Later, at about 10 o'clock, members of the South Arabian Police at Champion Lines Camp attacked the armoury there. Shooting broke out in the camp and was also directed at random outside the
1726
camp and at Royal Air Force installations on the adjoining airfield.
As a result of this firing, seven soldiers were killed and seven wounded, when their vehicle was machine-gunned by a mutineer as it passed outside Champion Lines, and two Aden police and one British civilian were killed and one British civilian wounded when driving also in the same way.
As British lives, including those of women, were in danger both within and outside Champion Lines the British Commander of the South Arabian Field Force, a section of the South Arabian Police, asked for British military intervention. This request was endorsed by the Federal Supreme Council and was acceded to. Champion Lines is within Aden State where the British authorities are responsible for internal security.
A company of British infantry thereafter entered Champion Lines. They came under fire and suffered one killed and five wounded, but the situation was brought under control just after noon. In total, I regret to have to inform the House that in the shooting outside the Crater area of Aden 10 British Servicemen were killed and 29 wounded, while one British civilian was killed and another wounded.
About 10.30 yesterday morning, some half an hour after the trouble at Champion Lines which I have been describing, began, South Arabian Police at the Federal capital of Al Ittihad seized Government buildings there, did some damage, and took up positions to resist any attempt to bring in British troops. There was no firing, and the reports I have suggest that no expatriates were molested in the course of this. The situation in this case came under control shortly afterwards.
I would like to emphasise at this stage that British troops only had to be employed to deal with a mutiny among the new South Arabian Police Force where British lives were threatened. At no time were they employed against the South Arabian Army. The troubles in the South Arabian Army were dealt with effectively by that Army without our involvement.
I now come to the events in the Crater district of Aden. There, a general strike had been called the previous day, and there, yesterday morning, a false rumour

1727
was spread that British troops had fired on the South Arabian Army. The Aden State armed police reacted to this firing indiscriminately. Terrorists took advantage of the confusion and of the difficult geography and congestion of Crater district and widespread trouble ensued. Armed men secured the release of about 170 ordinary convicts from Crater gaol. Some of the gaol-breakers are reported to have climbed the minaret of a mosque and claimed over the mosque's loudspeakers that they were released detainees. When darkness fell the British forces were withdrawn to positions surrounding Crater rather than in it.
The situation there remains serious, and has been complicated by a water shortage caused by a fractured main. Shooting is still taking place. Public buildings and commercial premises have been damaged. The High Commissioner reported last evening that it would take a day or more to restore law and order in the Crater district.
I regret to tell the House that there have been a number of British military casualties in Crater. There are at present 12 British Servicemen reported missing. I know that the House will understand me when I say that I prefer not to make an estimate of the details of these casualties till we have official confirmation in the interests of the families of those serving in Aden.
I wish to assure the House of our concern for the British civil community and particularly those numbers of banks staff and other who work in Crater and who have had to go through the experience of the serious disturbances there. I also wish to tell the House that the High Commissioner has praised the admirable restraint and courage of the British forces under extreme provocation, which, in his view, have prevented this tragic but unpremeditated clash becoming something even more serious. I know that the House would wish to join me in this tribute by the High Commissioner.
I need hardly add that the authorities in Aden are determined to bring matters under full control.
The House will understand that with all the authorities concerned busy trying to settle the trouble they have not yet been able to give me a complete analysis of the
1728
origins, conduct, and the lessons for the future. I think, therefore, that I should say no more today, but I shall, of course, give the House fuller information the moment it is possible to do so.
Sir Alec Douglas-Home: This is, as the Minister has said, a story of tragedy. We on this side of the House would like to send our sympathy, along with that of the other side of the House, to the relatives who have suffered such losses.
May I ask the right hon. Gentleman three questions? What action do the Government propose to take in respect of British families left in Aden? What is the Governor's recommendation now—this was a question I asked in the debate we had a few days ago—about the call in of arms and the possible application of martial law in a situation of this kind?
When the Minister talks about the lesson, will he make it quite clear that the Government's plan for the withdrawing of troops is sufficiently flexible to allow for sufficient protection for lives up to and if necessary beyond the date of independence, and that, if necessary, the Government will reinforce all troops so that internal order shall be maintained?
Mr. Thomson: We are, of course, determined to maintain law and order in Aden. We are determined to ensure the safe withdrawal of our troops. The Government will not hesitate to take any necessary action to secure this basic aim.
I was asked a question about British families. These families are already being evacuated at a fairly fast pace under arrangements which have already been made and which have nothing to do with the present crisis. I think that the last of the families is due out of Aden in July. But we shall have to study the events of yesterday and today to find out whether this time-table still remains the right time-table.
As I told the right hon. Gentleman in our debate on Monday, the question of arms in illegal possession in Aden is one of which the new High Commissioner is actively seized and he has been taking action about it. These events will expedite the various steps which he has in mind.
Mr. Philip Noel-Baker: May I ask my right hon. Friend three questions?

1729
First, does not this mutiny, the general strike and the wider plots which the Federal Government have found in Crater prove the total instability of this constitution and system which the right hon. Member for Streatham (Mr. Sandys) devised?
Secondly, while we pay tribute to the British soldiers and their restraint, is it justifiable to ask them to suffer wounds and death in a cause which is doomed to final and futile defeat?
Thirdly, will not the Government reconsider, as the Secretary of State on Monday said they might, their whole policy and ask the United Nations to negotiate a settlement, as the Government have long said that they were ready to do, instead of asking the United Nations to accept a fait accompli and responsibility for its execution?
Mr. Hugh Fraser: Are you a murderer?
Mr. Thomson: I should like to ask my right hon. Friend and hon. Members on both sides of the House, who, I know, feel deeply about this matter, to concentrate at this point on what needs to be done to restore law and order in Crater and to prevent any further loss of life—
Mr. Francis Noel-Baker: On a point of order. I apologise for interrupting the Minister, but I distinctly heard a former Under-Secretary of State for War call my father a murderer.
Hon. Members: Kick him out.
Mr. Speaker: I am always rather troubled when hon. Members bring to the notice of Mr. Speaker interventions which he has not heard. [Hors. MEMBERS: "Oh."] I need no help. But if a right hon. Gentleman did call another light hon. Gentleman a murderer, then he must withdraw it.
Hon. Members: Stand up.
Mr. Hugh Fraser: I do withdraw. All I would say is that the speech just made by the right hon. Member for Derby, South (Mr. Philip Noel-Baker) was entirely—
Mr. Speaker: Order. Withdrawals must be simple withdrawals. The right hon. Gentleman has withdrawn.
Mr. Thomson: I was attempting to answer the very serious question asked by
1730
my right hon. Friend the Member for Derby, South (Mr. Philip Noel-Baker) and to plead with him and the House at this moment to concentrate on supporting our troops and the High Commissioner and the Federal Government in restoring the situation in Aden and in South Arabia, and not at this point in time to raise these wider issues.
I would simply beg my right hon. Friend not to jump to too-quick conclusions on the basis of the tragic events of these 24 hours. It is quite clear that the actual mutinies themselves were not politically motivated. They were the result of internal jealousies and rivalries inside the forces, which are perhaps understandable given the very rapid rate of expansion which there has been. There is no evidence that they are linked with F.L.O.S.Y. or the N.L.F.
Mr. Thorpe: Is the right hon. Gentleman aware that the whole House will condemn this tragic waste of human life? May I ask him two questions?
First, will he say whether he regards this as being an internal and purely spontaneous outburst, or a result of some form of external political pressure?
Secondly, may I ask him, without committing himself today, to bear in mind that we may be set on a train of events to try to keep intact a Federal arrangement which is doomed to failure and which may well involve this country and, indeed, the Arab people in the area in a tragic loss of life which could be averted if we recognised the political realities of the situation.
Mr. Thomson: As I say, all the evidence that we have is that these events inside the Federal forces yesterday were entirely internal and were not related to any external political causes. Of course, when the chain of events had led to the riots and disturbances in Crater, obviously the extremist organisations, which had already been conducting a 24-hour general strike, inevitably became mixed up in them.
I am sure that the whole House, and certainly Her Majesty's Government, are very conscious of the dangers among which we move in this situation. Our basic aim is to ensure that the withdrawal of our forces from Aden takes place in peace, with the minimum of bloodshed. Our second aim is to ensure

1731
that we leave behind an independent South Arabia with a good chance of survival. I ask the House, in view of the deep feelings aroused by these events yesterday, not to say things today which might imperil the possibility of that future for South Arabia.
Mr. Bellenger: Although we all recognise that Her Majesty's Government are responsible for maintaining law and order until we evacuate, it nevertheless seems unfortunate that British troops should be called in by the authorities there and shot up without any possibility of retaliating or protecting themselves. Does not my right hon. Friend therefore think that in this or similar circumstances martial law is necessary in such a case?
Mr. Thomson: The High Commissioner is already operating under substantially wider powers, and I do not think that this is a difficulty. Naturally, we shall draw his attention to what was said by the right hon. Gentleman and also by my right hon. Friend.
As for the involvement of British troops, no one will minimise the tragedy of the role that our troops had to fulfil yesterday, which they did with such high courage. But I remind the House that they were asked to do so by the Federal Government and by a British officer leading these forces, and that one of the considerations which we had to have in mind was that British lives, including the lives of British women, were involved. I am sure that the House will support the use of British troops in that situation.
Lord Balniel: The Minister said that he is prepared to re-examine the timetable of the withdrawal of British Service families. Is it not clear that Aden is not a suitable place for British women and children to be living? Will he consider the immediate withdrawal of these families?
Mr. Thomson: The withdrawal is actively under way. I have undertaken that we will consider urgently whether it is necessary to speed up the pace of the withdrawal. I do not think that I can go further than that at the moment.
Mr. Mayhew: Is my right hon. Friend aware that the action taken by the Government and by the Aden authorities to restore law and order and to prevent a
1732
recurrence of these tragedies will have the very widest support in the House? But will he also not recognise that at least certain aspects of the Foreign Secretary's statement on Monday will now require to be looked at again?
Mr. Thomson: I am grateful to my right hon. Friend for the first part of his question. Naturally, we shall have to look very closely all the time at developments in Aden and South Arabia in the months which lie ahead between now and independence. But I should tell my right hon. Friend and the House frankly that there is no evidence as to the sources of these troubles yesterday which would lead us to believe that we need to reconsider the policy statement made on Monday.
Mr. Sandys: May I join other hon. Members in expressing my deep sorrow at the tragic loss of life? While this is not a moment to engage in controversy, in view of the attack made upon me by the right hon. Member for Derby, South (Mr. Philip Noel-Baker) may I ask the Minister whether he agrees that mutinies of this kind are not unusual in emerging countries?
May I ask him to assure us that he will give to the Federal Government the fullest possible support in the difficult task of reorganising and strengthening their forces as we did in 1964 when we were called into Tanganyika, Uganda and Kenya to suppress mutinies in those three countries?
Mr. Thomson: The overriding obligation of Her Majesty's Government is to contribute to the maintenance of law and order in Aden and South Arabia so long as we have responsibility there. The Federal Government are the legal Government of South Arabia; and we shall give the legal Government of South Arabia all necessary support to ensure, as far as we possibly can, that the safety of people is preserved.
To answer the larger and important point mentioned by the right hon. Gentleman, it may, perhaps, help us to see yesterday's events in perspective—events which loom very large, and in a frightening way, in our minds just now —if I remind the House that there are countries which are members of the Commonwealth today, good and respected

1733
members, which passed through the same ordeal that South Arabia is passing through now.
Mr. Heffer: Would my right hon. Friend give two assurances? First, will he say that not only will the families of Servicemen be withdrawn at the earliest possible moment, but that there will be no question of extending the stay of our troops there beyond the date announced in the House on Monday?
Secondly, will he take a further look at the whole question of the negotiations and discussions with the nationalist leaders, for is it not clear that the only real answer to getting a peaceful solution in South Arabia is the establishment of an independent State for Aden itself?
Mr. Thomson: It has been said many times in the House that, whatever may be the other deep disputes about the future of South Arabia among the various political groups there, all of them are agreed on the essential unity of South Arabia; and I have seen no evidence to show that there is any political support inside South Arabia for the separation of Aden State from the rest of the country.
Mr. Evelyn King: Would the right hon. Gentleman answer two practical questions? First, as he has twice referred to the evacuation of military families, is it not a fact that one of these disturbances took place at the Federal headquarters, where there are British civilian servants who also have families? What is being done for their families?
Secondly, as I understood the right hon. Gentleman to say that the British casualties occurred in a company of British infantry, is he satisfied that there are sufficient armoured vehicles available —vehicles which, I should have thought, were more suitable in the circumstances?
Mr. Thomson: We are wholly satisfied about the adequacy of both the numbers and equipment of our forces to deal with the problems there. All the civilian families in South Arabia have precautions taken for their safety. I am happy to say that the expatriate families at Al Ittihad, the Federal capital, suffered no molestation during the two hours of the trouble. However, we will, as a result of these events, be surveying what precautionary
1734
arrangements there are for civilian families.
Mr. Winnick: I am sure that my right hon. Friend is aware of the horror which is felt at the tragic events in Aden. Is he aware that many people appear to feel that, from now on, there is bound to be more bloodshed and more chaos, perhaps leading to another Congo or Vietnam, unless there is a radical change of policy in our whole attitude towards Aden and the South Arabian Federation?
Mr. Thomson: The main motive of the policy announced by my right hon. Friend the Foreign Secretary on Monday was precisely to avoid in South Arabia any danger of Britain being discredited by association with another Congo. It is important to see my right hon. Friend's statement in that perspective.
Sir J. Eden: May I press the right hon. Gentleman to answer a question on the subject of arms? Is it not astonishing that, in such a highly volatile situation, arms and ammunition seem to be so readily obtainable? Will the Government no longer concern themselves with constitutions or future development, but grapple with the problem of restoring law and order as rapidly and expeditiously as possible?
Mr. Thomson: No, Sir. I think that the hon. Gentleman is wong and that my hon. Friends who have been questioning me about this are right. While it is a basic essential to maintain law and order, it is equally important to go ahead with the task of political reconciliation, because it is only in that way that an independent South Arabia will have a good chance of prosperous survival.
Mr. Francis Noel-Baker: Is there not already evidence to show that the lamentable events which occurred yesterday and the repercussions from the mutiny are directly connected with the repressive policy announced on Monday—to support, by force of British arms, an unrepresentative regime, thereby destroying the hope of United Nations' help? Will my right hon. Friend press the Government to change their policy, even at this last moment?
Mr. Thomson: No, Sir. My hon. Friend is utterly wrong in trying to link the melancholy events of yesterday with

1735
the statement made by my right hon. Friend on Monday. As I sought to explain carefully in my main statement, the internal troubles in the Federal forces let to these difficulties yesterday, had their origin about 10 days ago and had been simmering for some time. There is no evidence to show that these events were politically motivated by, or in any way linked with, my right hon. Friend's statement.
Mr. Stratton Mills: When looking at the question of speeding up the return of British families, would the right hon. Gentleman consider giving special priority to those families living in the Malla area, known as "Murder Mile", in view of the fact that this area is virtually undefendable and is most unsatisfactory for Service families?
Mr. Thomson: That is being done, and we are very much aware of the need to give special consideration to families living in exposed conditions, such as places like Malla.
Mr. Luard: My right hon. Friend has provided a convincing explanation for the first incident—on the basis of personal and tribal rivalries within the Federal Army. Would not he agree that the second and third—the far more serious incidents—give very much more the appearance of an organised revolt by Adeni police against British troops and, perhaps, against Federal troops? What will Her Majesty's Government do to meet this situation if this should prove to have been the case?
Mr. Thomson: The first task is to restore law and order in Crater. We are still in the middle of a serious situation there, and this is one matter which inhibits me from saying some of the things today that I might otherwise have said.
I said, when answering a question earlier, that while this began with internal problems—non-political problems—in the Federal forces, when the disturbances took place in Crater, they obviously got very much mixed up with the political groups in Crater; and it is true to say that the disturbing feature of those disturbances is the fact that the police force in the Crater area was itself actively involved in these disturbances. This is a more serious matter, but the first thing is to get law and order restored there.
Several Hon. Members rose—
Mr. Speaker: Order. This is difficult but we must move on.

ANGLO-FRENCH VARIABLE GEOMETRY AIRCRAFT
Mr. Dalyell(by Private Notice) asked the Secretary of State for Defence if he will make a statement on the communication he has received from the French Government on the cancellation of the Anglo-French variable geometry aircraft.
The Secretary of State for Defence (Mr. Denis Healey): I have received no communication from the French Government to this effect.
Mr. Dalyell: Are we to take it that the reports today of a cancellation are being categorically denied by my right hon. Friend?
Mr. Healey: As the House knows, M. Messmer and I reached agreement on the cost, specification and work-sharing arrangements for the Anglo-French variable geometry aircraft some two months ago—ad referendum to our national Governments. The French Government have not yet taken a decision, as far as I am aware, on the matter, but I am in constant communication with the French Minister of Defence on the question.
If there is any financial problem arising on the aircraft, as seemed possible a year ago, Her Majesty's Government will be prepared to consider what they can do to help the French Government in this respect; and I would hope to meet M. Messmer shortly to discuss the question.
Mr. Powell: Is the right hon. Gentleman denying that he has received from his French opposite number a disquieting communication regarding the future of this aircraft? When will the right hon. Gentleman be candid with the House about the true prospects of this aircraft which, 18 months ago, he made the core of his aircraft programme?
Mr. Healey: As I explained to the House a moment ago, I am in constant and almost daily touch with M. Messmer on this question. I have never disguised that from the House and as soon as I have a statement to make on the French position I shall make it.

1737
I resent intensely the right hon. Gentleman's suggestions that I have not been candid with the House on this matter. It has been raised by the Opposition at Question Time and on several occasions in debates. Any difficulty which we have had over the aircraft during the last 12 months has certaintly not stemmed from Her Majesty's Government.
Mr. Lubbock: Is there any truth in the report that the French intend to go ahead with their purely national variable geometry project produced by Marcel Dassault, in view of the fact that this would obviously mean that there would he less money for V.G.? If there is any financial difficulty for the French, what prospects are there of persuading the Germans to come in on the production programme of this aircraft?
Mr. Healey: As I made clear in our debate, I have no evidence that the French Government in any circumstances propose to proceed with production orders for the III G. It is a single-engined aircraft which, so far as I am aware, no air force in the world is anxious for in this rôle.
On the German question, we are in continuous communication with the German Government on this matter as well.
Mr. Robert Howarth: Following the question of the hon. Member for Orpington (Mr. Lubbock), would my right hon. Friend confirm that there are French interests who are personally opposed to the development of an Anglo-French variable geometry aircraft, who could, presumably, be the origin of these rumours?
Mr. Healey: I do not want to speculate on the origins of rumours. There are people in both countries who, for political or industrial reasons, are opposed to a successful Anglo-French collaborative project, but I think that the House as a whole—whatever individual hon. Members may feel—would strongly resist pressures imposed by such persons and interests.
Mr. Onslow: Is the right hon. Gentleman telling us that he has not received from M. Messmer a letter substantially saying what has been reported in the Press? If he has received any such letter,
1738
has he investigated how it got to the Press?
Mr. Healey: I am not responsible for reports in the Press, and nor is any other Minister, or, I hope, the hon. Gentleman. What I can say again, as I have said already, is that I have received no communication from M. Messmer to the effect which the hon. Gentleman suggests and that I have had so far no letter of any nature from him on this matter in recent days. One might be on the way, because I am in continuous contact with him, and I hope to have an early meeting with him to discuss the problem as the French Government see it.

NATIONAL INSURANCE AND INDUSTRIAL INJURIES BENEFITS, SUPPLEMENTARY BENEFITS, AND WAR PENSIONS (INCREASE)
The Minister of Social Security (Miss Margaret Herbison): With permission, Mr. Speaker, I should like to make a statement about improvements in National Insurance and industrial injuries benefits, supplementary benefits, and war pensions.
I have presented today a Bill to increase benefits and contributions under the National Insurance and Industrial Injuries Schemes; and an explanatory White Paper and a Report by the Government Actuary will be available later this afternoon. A Financial Memorandum is attached to the Bill.
The main proposals in the Bill are as follows. The standard rate of National Insurance benefits will be increased by 10s. a week for a single person to £4 10s., and by 16s. for a married couple to £7 6s. Increases of benefit for children are to go up by 2s. 6d. a week.
Thus, the weekly flat-rate of benefit including family allowance for a man and wife with two children will be £9 16s.
Widowed mother's allowance and the widow's pension will also be raised to £4 10s. a week. The benefit for a widow with two children, including family allowance, will be £8 15s.
Parallel improvements will be made in the other flat-rate National Insurance benefits. No changes are proposed on this

1739
occasion in earnings-related benefits or in the graduated retirement pension.
Men and women who defer retirement and continue paying contributions after minimum pension age earn increments to their eventual retirement pension. It is proposed in the Bill to improve the rate at which increments are earned in the future by changing the qualification for an increment from 12 contributions to nine.
Death grant is increased by the Bill from £25 to £30.
The industrial injuries provisions in the Bill include an increase of 17s. in the 100 per cent. disablement pension, bringing it to £7 12s. a week. Injury benefit is to be increased by 10s. a week, maintaining the present difference between injury benefit and sickness benefit. The new rate will thus be £7 5s. for a single man, and £10 Is. a man and wife.
The standard rate of industrial injuries' widow's pension is raised from £4 10s. to £5 1s. The addition for each child will be increased by 2s. 6d.
The lower rate of pension payable to the younger childless widow is to be increased from £1 to £1 10s. Constant attendance allowance, unemployability supplement and special hardship allowance will also be increased.
The higher insurance benefits will entail a corresponding increase in contributions. The Class 1 insurance stamp for a man will go up by 4s. 3d. a week, of which the employee will pay 2s. and his employer 2s. 3d.
There will be no change in the graduated contributions. The contribution for employed women will go up by Is. 9d. for the employee and 2s. for the employer. Corresponding changes will be made in the juvenile and other contribution rates: for example, a self-employed man will pay an extra 2s. 4d. a week.
The cost of the improved National Insurance and industrial injuries benefits will be £219 million and £10.6 million respectively in the first full year.
The Government also propose to increase the basic supplementary benefit rates. Draft Regulations incorporating the new rates will shortly be laid for approval by the House.
1740
The main changes proposed are that the scale rate for a single householder will increase by 5s. a week to £4 6s. and the scale rate for a married couple will rise by 8s. a week to £7 1s. Increases will also be made in the rates for other adults and for children.
I will, with permission, circulate a list of the proposals in the OFFICIAL REPORT for the convenience of hon. Members.
I now come to war pensions, which are dealt with by Royal Warrant for the Army and corresponding instruments for the Royal Navy, the Royal Air Force, and civilians and others. War pensioners will, of course, share with the population in general in the National Insurance improvements, but it is, I know, generally accepted that those who have been disabled or bereaved as a result of war service are entitled to something over and above the ordinary provisions.
The basic rate of pension for 100 per cent. disablement will be increased from £6 15s. to £7 12s. and the standard rate of war widow's pension from £5 5s. to £5 17s. The lower rate of pension payable to the childless widow under 40 will be increased, like the corresponding industrial injuries pension, to £1 10s. The additions to pension for war widows' children will be increased by 2s. 6d. for each child.
The main supplementary allowances—rent allowance for widows, and constant attendance allowance, unemployability supplement and allowance for lowered standard of occupation for disablement pensioners—will also be increased.
On this occasion, I propose, in addition. to increase the rates of comforts allowance, which goes to the most severely disabled pensioners, and of age allowance, which is payable both to elderly war widows and to the seriously disabled.
I will, with permission, circulate a list of the principal changes in the OFFICIAL REPORT.
The cost of the war pensions changes will be £12·8 million in the first full year.
The net total cost of the improvements, after taking account of the effect on supplementary benefits of the other benefit increases, will be about £220 million in the first full year.

1741
The Bill includes a Clause giving temporary power to vary family allowances by Order and to make consequential adjustments in National Insurance and industrial injuries increases for children. As the House knows, we intend to announce our proposals for family endowment before the Summer Recess, and we have thought it right to seek this power so that, if appropriate, any interim improvement in family allowances could operate from the same date as the increases in other benefits. The Clause is precautionary, arising from the intervention of the Summer Recess, and in no way prejudges the Government's proposals for family endowment.
The appointed day for the increase in most benefits, for the new contributions, and for the higher supplementary benefits will be 30th October.
Miss Pike: The whole House, of course, welcomes these increases, but does the Minister recognise that they do little more than restore the purchasing power of the present benefits, except by a small margin, and that we are running very hard to stay in the same place? Can she say what increase in the Exchequer contribution and the cost to the taxpayer is involved in these proposals and whether consideration was given to concentration of these increased benefits on areas of greatest need?
While these increases are welcome, they bring into even sharper relief the plight of those who are still left behind in remaining pockets of poverty and greater need, which shows the urgency of getting on with the job of bringing the whole of social security schemes into some sort of justice.
Miss Herbison: The answer to the first question by the hon. Lady is that the Exchequer contribution to the funds for the first full year will be £54.8 million. The hon. Lady has tried to make political capital by saying that these increases will equal only what the pensioner has already lost. I am sure that she will be interested and also glad to know the comparison between the increases, including this one, which have been given since this Government came to power and what would be needed on the index of retail prices. For the single pensioner and other single per-
1742
sons, the increases amount to £1 2s. 6d.; £3 7s. 6d. was the highest figure the Tories ever gave, in May, 1963. All that would be needed, going back to May, 1963, on the index of retail prices to bring it to present prices would be 10s. 1d. against £1 2s. 6d., which is the increase we have given.
The hon. Lady asked whether or not we should have been more selective. Perhaps on the Second Reading of the Bill she will tell us where she would be selective. Most of what I have dealt with comes as a result of contributions. In the debate on family poverty I showed where I thought we could be selective, and this Government in certain areas intends to be selective. An interesting point on the question of selectivity is that the survey carried out among retirement pensioners in June, 1965, showed that, of married couples, 50 per cent. were either under the National Assistance level at that time, or were not more than 20s. above it. About 81 per cent. of the single women pensioners were in that position. So it would be difficult to be selective for these people.
Mrs. Lena Jeger: I very warmly welcome the announcement made by my right hon. Friend. Can she assure the House that families which are to benefit by these increases in income will not lose their other sources of benefit? Will she see that they are protected as regards help through rate rebates, differential rents, computations for school meals and by other means outside these benefits?
Miss Herbison: It would be very difficult at this stage to deal with the points which my hon. Friend has raised. Some of them apply to local authorities. My concern is to ensure that the Government do their very best for older people for whom I am responsible.
Mr. Braine: While welcoming the general increase in disablement pensions and the industrial injuries benefits, may I ask what consideration the Government are to give to selective help to permanently disabled people who are not covered by existing National Insurance benefits or war pensions schemes? Will not the most deprived of our people now be relatively worse off than they were before?
Miss Herbison: Those who are in receipt of supplementary benefit have already benefited by the increases given in November, including the chronic sick, about whom I know the hon. Member is greatly concerned. They will again benefit by the increases we propose in supplementary benefits. For the other people, including the disabled housewives with working husbands for whom I am very much concerned, we have not yet found a solution, but, just as we have found solutions for so many problems with which we were left in October, 1964, I am sure that we shall find a solution for this one.
Mr. Higgins: To what extent are we to understand that the old age non-pensioners who are above the social security level will benefit? Are they to get nothing at all? Can the right hon. Lady tell the House to what extent the increases received by National Insurance pensioners who are already in the receipt of benefit will be covered by contributions?
Miss Herbison: I think that there is a great misunderstanding, which I have noticed on a number of occasions, by the hon. Member about contributions. One pays contributions, when one is working, for pension and other benefits, so when one retires one has a pension for which one has paid appropriate contributions.
For those non-pensioners who are in what we consider real need the supplementary benefits, particularly the new scheme introduced last year, have been of considerable help. A single person can have even a little over £2,000 in savings and if he has no other income he can still get a modest pension from supplementary benefits, which is very different from the kind of treatment such a person had before November.
Mr. William Hamilton: Is my right hon. Friend aware that there will he unanimous support from this side of the House for this massive contribution to clearing up the squalid mess left by the Conservative Government in 1964? Will she give an assurance that this is a forerunner of an even more ambitious and comprehensive scheme of social security in general? In particular, will she give an assurance that in future statements there will be linked to retirement pensions family allowances to restore the position to what it was before 1946?
Miss Herbison: I think that my hon. Friend will have to wait for future statements. He knows that we are to announce plans for family endowment before the Summer Recess. There are other big problems on which we are working in our review. We shall bring forward whatever improvements we can.
Dr. Owen: Is my right hon. Friend aware that her statement will be warmly welcomed, particularly what she said about the linking of family allowances with this benefit? Although it has not been possible to announce the agreed amount, the principle of linking family allowances with the other benefits is one which we welcome.
Sir K. Joseph: Will the right hon. Lady tell the House the implications for prices and wages, and, in particular, for the Government's prices and incomes policy, of the contribution increases which, she will recognise, will bear particularly heavily on lower-paid workers?
Miss Herbison: Yes. Whatever contribution we raised would bear heavily on the low-wage earner. This is one of the reasons why we are having such a thorough examination of the new system of pension provision for the future. If this had been done, rather than having the kind of graduated scheme which was brought in, leaving the flat rate as it was previously, we would not have been faced with this problem today.
I cannot give the answer to the first question by the right hon. Gentleman, on what increase I expect in the cost of living as a result of these increased contributions.
Sir K. Joseph: The right hon. Lady is evading the issue. Will the Government, in their prices and incomes policy, take note of these increased contributions in attempting to judge claims for increased pay and claims for increased prices?
Miss Herbison: I am quite sure that the Government, in their prices and incomes policy, always take into account any of the relevant factors that have to be discussed.
Mr. Alfred Morris: Is my right hon. Friend aware that we warmly welcome her statement and that there will be particular satisfaction that she is not proposing merely a "Paddy's rise" for those

1745
who are in special need, as was the case when statements were made by the Conservative Government? Do her proposals include one for improving the pension entitlement of widows under the age of 50?
Miss Herbison: No. Apart from those who will benefit from the general increase this year, the only widows who will have an improvement are the young industrial injuries widows and the young war widows whose benefit is increased from 20s. to 30s. The other anomalies of widows—and there are many—we have still to tackle.
Mr. Dean: Do I understand that the effect of the right hon. Lady's statement is that those pensioners most in need will have a 5s. increase whereas other pensioners will have a 10s. increase? I recognise that there have been increases in supplementary benefits since the last general increase in pensions, but does not the Minister feel that this half increase for those most in need will cause some resentment and difficulty?
Miss Herbison: No. We gave our first increase on both National Insurance pensions and on National Assistance, as it was then. Since then, 5s. has been given to the single supplementary pen-

PROPOSED SUPPLEMENTARY BENEFIT RATES

Present Weekly Rate

Proposed Weekly Rate

£

s.

d.

£

s.

d.

ORDINARY SCALE

(a) Husband and wife

…

…

…

6

13

0

7

1

0

(b)Person living alone

…

…

…

4

1

0

4

6

0

(c)Any other person aged—

(i) not less than 21 years

…

…

…

3

9

0

3

11

0

(ii) less than 21 but not less than 18 years

…

…

…

2

15

0

2

18

0

(iii) less than 18 but not less than 16 years

…

…

…

2

7

0

2

10

0

(iv) less than 16 but not less than 11 years

…

…

…

1

15

0

1

17

0

(v) less than 11 but not less than 5 years

…

…

…

1

8

0

1

10

0

(vi) less than 5 years

…

…

…

1

3

6

1

5

0

BLIND SCALE

(a)Husband and Wife—

(i) if one of them blind

…

…

…

7

17

6

8

5

6

(ii) if both of them blind

…

…

…

8

13

6

9

1

6

(b)Any other blind person aged—

(i) not less than 21 years

…

…

…

5

5

6

5

10

6

(ii) less than 21 but not less than 18 years

…

…

…

3

15

0

3

18

0

(iii) less than 18 but not less than 16 years

…

…

…

3

3

0

3

6

0

(iv) less than 16 but not less than 11 years

…

…

…

1

15

0

1

17

0

(v) less than 11 but not less than 5 years

…

…

…

1

8

0

1

10

0

(iv) less than 5 years

…

…

…

1

3

6

1

5

0

Notes

(i) An allowance for rent is added to the above rates.

(ii) Both the existing and proposed rates given above exclude the 9s. long-term addition which is added to the requirements of persons over pensionable age and to those of persons under pensionable age (other than the unemployed) who have received supplementary benefit (or national assistance) for a period of two years.

sioner. Not only was that 5s. increase given also to widows and the long-term sick, but also, in November of last year, many of them got a 9s. increase in the standard allowance. Some of them were getting as much as that in discretionary allowances; however, many of the younger non-pensioners were not, and some of them were getting nothing. We must also bear in mind the very generous treatment given in November in respect of the resources of pensioners.
Mr. Manuel: I warmly congratulate my right hon. Friend on her statement, which will bring much happiness and comfort to the homes in need. Has she considered how near we are getting, among the lower-income groups, to the limit of capacity to pay increased contributions? Will she consider, in future, relating the payment of contributions to earnings?
Miss Herbison: Yes. In answer to a previous supplementary question I said that I was very conscious of the weight of the flat-rate contribution on the low-wage earner. When we introduce our full scheme, my hon. Friend will find that attention has been paid to this matter.
Several Hon. Members rose—
Mr. Speaker: Order. I must move on.
Following is the information:

PRINCIPAL CHANGES IN WAR PENSIONS

Present rate

Proposed rate

£

s.

d.

£

s.

d.

Disablement pensions (100 per cent, assessment)

6

15

0

a week

7

12

0

a week

ex-non-commissioned officers

Increase of 17s. a week

ex-officers

Increase of £43 a year

ex-regular officers—disablement addition

Increase of £43 a vear

Payments for disablement assessed at less than 100 per cent, will be increased proportionately

Constant attendance allowance

1

7

6

a week

1

10

0

a week

2

1

6

a week

2

5

0

a week

Normal maximum

2

15

0

a week

3

0

0

a week

4

2

6

a week

4

10

0

a week

Exceptional maximum

5

10

0

a week

6

0

0

a week

Unemployability supplement

4

7

6

a week

4

17

6

a week

The allowances payable with this supplement (and with treatment allowances) will also be increased:

Wife or other adult dependant

2

10

0

a week

2

16

0

a week

First child

1

2

6

a week

1

5

0

a week

Each other child

14

6

a week

17

0

a week

Allowance for lowered standard of occupation up to

2

14

0

a week

3

1

0

a week

Comforts allowance:

Lower rate

10

0

a week

12

6

a week

Higher rate

1

0

0

a week

1

5

0

a week

Age allowance:

40 or 50 per cent, rate

5

0

a week

7

6

a week

60 or 70 per cent, rate

7

6

a week

10

0

a week

80 or 90 per cent, rate

10

0

a week

15

0

a week

100 per cent, rate

15

0

a week

1

0

0

a week

Clothing allowance:

Lower rate

7

10

0

a year

9

0

0

a year

Higher rate

12

10

0

a year

14

0

0

a year

Widow's pensions:

Widows of ex-privates or equivalent

5

5

0

a week

5

17

0

a week

Widows of ex-non-commissioned officers

Increase of 12s. a week

Widows of ex-officers

Increase of £31 a year

Childless under 40 widow of private

1

0

0

a week

1

10

0

a week

For each child (other ranks)

2

4

0

a week

2

6

6

a week

For each child (officers)

122

10

0

a year

129

0

0

a year

Rent allowance for widows with children, up to

2

0

0

a week

2

5

0

a week

Age allowance for widows

10

0

a week

15

0

a week

Pensions for unmarried dependants who lived as wives of men now deceased:

Other ranks

4

17

6

a week

5

9

0

a week

Officers

279

0

0

a year

309

0

0

a year

Orphan's pensions:

Other ranks, under 15 years

2

4

0

a week

2

6

6

a week

Other ranks, 15 years and over

3

2

0

a week

3

9

6

a week

Officers, under 18 years

170

10

0

a year

190

0

0

a year

Adult orphan incapable of self-support

4

0

0

a week

4

10

0

a week

BILL PRESENTED

  NATIONAL INSURANCE (No. 2)
  Bill to amend the provisions of the National Insurance Act 1965, the National Insurance (Industrial Injuries) Act 1965 and the Industrial Injuries and Diseases (Old Cases) Act 1967 as to contributions, benefit and insurable employments; to provide for the set-off of certain overpayments; to confer tem-
  porary power to increase family allowances by order; and for connected purposes, presented by Miss Margaret Herbison, supported by Mr. M. Stewart, the Chancellor of the Exchequer, Mr. Ross, Mr. Patrick Gordon Walker, Mr. Ray Gunter, Mr. Cledwyn Hughes, Mr. John Diamond, Mr. Norman Pentland, and Mr. Charles Loughlin; read the First time; to be read a Second time tomorrow and to be printed. [Bill 290.]

ORDERS OF THE DAY

  FINANCE (No. 2) BILL
  Further considered in Committee [Progress 15th June].
  [Sir ERIC FLETCHER in the Chair]
  4.25 p.m.
  Mr. Robert Sheldon: On a point of Order, Sir Eric. I wish to refer to a disagreement between myself and the hon. Member for Worcestershire, South (Sir G. Nabarro), as recorded in the OFFICIAL REPORT of 12th June, 1967. This was a disagreement about the rate of Capital Gains Tax as applied to Surtax payers. The hon. Gentleman then said:
  "What I shall read first is the green carbon unedited copy of the speech of the hon. Member for Ashton-under-Lyne, to make certain that nothing has been corrected. I know the tricks much better than the hon. Member for Ashton-under-Lyne does."—[OFFICIAL REPORT, 12th June, 1967; Vol. 748, c. 150.]
  I was not much troubled about the hon. Gentleman's lack of understanding of the alternative basic charge for Capital Gains Tax, nor was I much concerned about his general behaviour, nor with the looseness of his tongue which I thought the Committee would well understand. What concerned me was that on the following Sunday, in the Sunday Times of 18th June, in an article by Mr. Milner, there appeared this statement:
  "Sir Gerald announced his intention of referring to the 'green carbon unedited copy' of Sheldon's speech to discover whether there had been any 'verbal corrections'. If the Member for Ashton-under-Lyne did say exactly what HANSARD recorded, however, then Sir Gerald would have to agree with him."
  This I consider to be of some importance. If what is stated in the House is subsequently to be contested by any hon. Member, so contesting the OFFICIAL REPORT, we shall cease to have any certain proof of what was said. I raise this point of order to establish this.
  Sir Harmar Nicholls: Further to that point of order, Sir Eric. Is it not a rule of the House that an hon. Member who wishes to raise a point of order referring to the records should do so at the earliest possible moment? It appears that this comment was made in the Press on 12th June. Today is 21st June. Is it not an abuse of the time of
  1750
  the House to raise this point after all this time has elapsed? How can the matter be checked? How can we check the rights or wrongs of it? Is it not a fact that the Official Reporters are quite capable of looking after themselves without having this point raised nine days later?
  The Chairman: I gave the hon. Member for Ashton-under-Lyne (Mr. Sheldon) permission to make this statement, this being the first occasion on which the Committee has sat since the publication of the Sunday Times, to which the hon. Gentleman referred. The matter, thus having been explained, does not admit of debate.
  The next new Clause is—
  Sir Gerald Nabarro: On a point of order, Sir Eric. Are you ruling, then, that the point of order raised by the hon. Member for Ashton-under-Lyne (Mr. Sheldon) is a bogus point of order? Is that your ruling, because surely we should pay no regard, other than on a matter of privilege, to an opinion expressed in a newspaper?
  The Chairman: That is not my ruling. I gave the hon. Member for Ashton-under-Lyne permission to make that statement by way of personal explanation arising out of something that occurred at the last meeting of the Committee and which was subsequently reported in the Press. I must also rule that it does not admit of debate.
  Sir G. Nabarro: On a point of order, Sir Eric. You have just referred to the hon. Member for Ashton-under-Lyne (Mr. Sheldon) having made a statement. I distinctly heard the hon. Gentleman raise a point of order. Is it not the fact that, if the hon. Gentleman is given permission to make a statement, I should be given permission to answer, for I violently disagree with the hon. Gentleman's interpretation, which is wholly fallacious and not a little dishonest?
  The Chairman: We cannot pursue this. The hon. Member for Ashton-under-Lyne, rising on a point of order, made, with my permission, a statement by way of personal explanation in order to put something on record which now has appeared on record. We must now proceed.
  Mr. Joel Barnett: Further to that point of order, Sir Eric. Although it is what one normally expects from the hon. Member for Worcestershire, South (Sir G. Nabarro) when he makes false accusations, as he did when, on 12th June, he accused my hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) of "misleading the Committee"—I direct attention to column 149 of the OFFICIAL REPORT of 12th June—would it be in order for the hon. Member for Worcestershire, South now to apologise and to withdraw the very false accusation he then made?
  Sir G. Nabarro: Further to that point of order—
  The Chairman: I have been asked to rule on a point of order, and I must rule that the statement which the hon. Member for Ashton-under-Lyne has made does not admit of further debate. We must proceed to new Clause—
  Mr. Barnett: Further to that point of of order. There is a very important point here. A newspaper has called in doubt a statement made in Committe of the whole House. It said, "If the Member for Ashton-under-Lyne made a particular speech". That speech was reported in HANSARD, presumably correctly. The newspaper called it in doubt by saying, "if he said it". If newspapers are to be able to call in doubt statements which are officially recorded in HANSARD, I suggest that it is a very serious matter. I would like your ruling, Sir Eric.
  Sir G. Nabarro: Further to that point of order, Sir Eric.
  The Chairman: I can rule on only one point of order at a time.
  My ruling is that the statement in the Sunday Times, to which the hon. Member for Ashton-under-Lyne has referred, arose out of something which was said in this Committee on a previous occasion, doubting, or perhaps throwing some doubt on, the veracity of a report in HANSARD. I thought that the hon. Member for Ashton-under-Lyne was entitled to give, by way of personal explanation, his version of what had occurred. The hon. Gentleman has done so, and I must confirm my ruling that, he having done so, it does not admit of further debate.
  Sir G. Nabarro: On a point of order, Sir Eric. The reference in the newspaper statement to which you alluded was to a "punch-up" between hon. Members. In a "punch-up", we expect there to be a referee. As you have allowed the hon. Member for Ashton-under-Lyne to make what purported to be a statement under the guise of a point of order, is it not now in order for me to make application to the Chair that I also be allowed to make a statement under the guise of a point of order—
  Mr. Barnett: Apologise.
  Sir G. Nabarro: Certainly not—giving my interpretation of the position? Is it not somewhat improper in a "punch up" that the referee should take one side and not the other?
  Hon. Members: Oh.
  The Chairman: In so far as, by that observation, the hon. Gentleman has thrown any reflection on the Chair, I must ask him to withdraw it.
  Sir G. Nabarro: It is no reflection whatever on the Chair, Sir Eric. I am quoted from a newspaper article which referred to a "punch-up". As one side of the "punch-up" has been heard in a statement which you authorised, under the guise of a point of order, I now ask you, Sir Eric, on a point of order, whether it would not be equitable for the other side of the affair to be put to the Committee as well. Why should one side be heard and not the other?
  The Chairman: No. We cannot pursue this. It has for a long time been recognised that statements by way of personal explanation are permitted only provided that they do not lead to controversy.
  We must now proceed to the business of the Committee.
  The next new Clause selected is No. 37.

  FINANCE (No. 2) BILL

    New Clause No. 37.—(REPAYMENTS TO CHARITIES.)
    The Purchase Tax Act 1963 shall be amended by the insertion immediately after section 23 thereof of the following section:—
    23A.—(1) Upon application by a charity the Commissioners shall, subject to the provisions of this section and to such conditions as they may impose for the protection of the the revenue, repay to that charity such sums

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    as the Commissioners have received by way of tax upon such quantities of goods as the charity has acquired for the purpose of furthering its objects.
    (2) The class of goods to which this section applies consists of the articles of any description known as greetings cards, but the Treasury may by order made by statutory instrument add any other class of goods thereto.
    (3) A charity shall not apply to the Commissioners under subsection (1) of this section for repayment of tax paid during one accounting period until after the commencement of the next accounting period at the earliest and no such application shall be entertained by the Commissioners in respect of sums received by them before 6th April 1967 nor more than three years before the date of such commencement.
    (4) In this section the word 'charity' has the meaning assigned to it by section 45 of the Charities Act 1960, but includes a charity mentioned in subsection (2) of that section, and the expression 'accounting period' means the period in respect of which the charity is required under section 32 thereof to keep its accounts.—[Mr. Rossi.]
    Brought up, and read the First time.
    4.30 p.m.
    Mr. Hugh Rossi: I beg to move, That the Clause be read a Second time.
    I hope that this Clause will commend itself to the Financial Secretary if for no other reason than that it has the support of hon. Members on both sides of the Committee. In introducing it, I hope to bring into the Chamber a little of the atmosphere of Christmas and of good will, following what has just transpired between hon. Members on both sides.
    The broad objective of the Clause is to relieve charities from having to bear Purchase Tax on the Christmas cards which they sell, while, at the same time, ensuring that the giving of such relief does not put them in an unfair position in competition with commercial enterprises. In other words, we seek to ensure that money paid to a charity goes to the charity and not to the taxman.
    Hon. Members will be familiar with the growing practice of charities in recent years of raising money through the sale of Christmas cards. In common with most members of the public, they may well have felt that the money which they spent in buying these cards was a form of donation to a good cause at a season of
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    good will and of good causes. They will probably be horrified to realise, however, that a substantial part of the money which they spend is another form of taxation, another impost paid by them direct to the Chancellor of the Exchequer. I am sure that, if that realisation had come home to them at the time when they were making what they regarded as donations to a good cause, their good will might not have overflowed.
    These Christmas cards are subject to Purchase Tax of 25 per cent. plus the recent 10 per cent. under the "mini-Budget". Perhaps I should explain how the tax is levied and what has occasioned the putting down of the Clause. Normally, Purchase Tax is paid on the wholesale price or value of goods. Where there is no wholesale price or value, the Commissioners of Inland Revenue or of Customs and Excise settle a notional wholesale value, and it is on that notional wholesale value that the 25 per cent. plus 10 per cent. Purchase Tax is paid. This has been the procedure for charities, because they give their orders direct to the printer and there is no middle wholesaler to give a wholesale figure.
    The notional wholesale price has been creeping upwards over the years, and, in December of last year, the addition to the basic price used to arrive at the notional wholesale price was raised from 50 per cent. to 75 per cent. The Customs and Excise took the price paid for the cards by the charity to the printer, added 75 per cent. to it, treating that final figure as the notional wholesale price, and then levied Purchase Tax on it at the rate I have mentioned.
    This caused a certain amount of despondency and alarm among charities, particularly the smaller charities, which rely upon sales of Christmas cards as a substantial source of revenue.
    Mr. Raymond Gower: Can my hon. Friend explain why this was done last December, and under what powers?
    Mr. Rossi: They are general powers which, I understand, the Customs and Excise has for settling notional wholesale prices where an actual wholesale price does not exist. It is often a matter of negotiation. In this case, there was an attempt at negotiation, and, in December last, the Commissioners of Customs and

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    Excise were asked to meet a deputation from charities.
    The charities asked that the percentage addition to arrive at the notional wholesale price be kept at the figure which it had been for a number of years, but they were told that, in future, Purchase Tax must be paid on the printer's net free-delivered price to the charity plus any cost of production not included in that price—for example, art work, film negatives, pictures, blocks and plates—plus an overall uplift of 75 per cent. on all that cost. On that final gross figure, the 25 per cent. Purchase Tax plus the present 10 per cent. was to be paid by the charity. The matter was not open to negotiation or further argument. The charities were told that this was the basis on which they would have to pay Purchase Tax in future.
    The charities have sought ways and means to alleviate the burden. Some hon. Members may know that, for some weeks, there has been a Motion on the Order Paper drawing attention to the matter, that Motion being supported now by nearly 50 hon. Members from both sides. The present new Clause is another attempt to draw attention to the situation and to enlist the assistance of the Committee in giving help to these charities.
    First and foremost, it has been a principle respected in our Income Tax legislation over the years that charities do not pay tax on their income. This is a substantial source of income for many charities and we say that the recognised principle should be applied here also, and that no Purchase Tax should be paid on this income of the charities. Its payment is an inconsistency with a generally recognised principle.
    I should like the Committee to bear in mind what the tax can mean to one or two charities. I have been given information which is also available to other hon. Members and I know that they will wish to give examples. One that comes to mind immediately is the British Empire Cancer Campaign, which has so far paid £8,500 Purchase Tax on this year's print order. It estimates that there will be a certain amount of reprinting, bringing the total Purchase Tax that the charity will have to pay to about £10,000.
    It is a little short-sighted of the Government to take that sum from the
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    charity, because if that money were not being used for cancer research by
    voluntary organisations of this kind the Exchequer would no doubt have to find
    money to meet the need. We hope that in time this organisation's work may have
    a considerable impact on the National Health Service bill.
    Another example is the Church of England Children's Society, which expects to pay £3,120 this year. I am told that if left in the society's hands this sum would enable it to feed 100 children for six months or maintain a home for, say, 16 children for five months. If this charity does not do that work a local welfare authority will have to do it at the ratepayer's expense, with assistance from the Exchequer. It is a most short-sighted policy to seek to deprive charities of such funds and to dissipate them in other ways.
    One might well ask what would be the effect on the Exchequer if the Clause were accepted. We receive a little assistance in this matter from a Written Answer last 12th December, when the Chief Secretary stated:
    "Receipts of Purchase Tax on all greeting cards and similar articles are estimated at about £7 million a year. Receipts from Christmas cards are not separately recorded but it is known that they represent a substantial part of the total."—[OFFICIAL REPORT, 12th December, 1966; Vol. 738, c. 23–24.]
    In giving that answer, the Chief Secretary left the House with the impression that if total relief from this Purchase Tax were given to charities it would cost the taxpayer a substantial part of £7 million a year. No doubt that is the information that he received from his Department. But these figures have been examined and I have a little further information to give him on this matter which I trust may be of assistance to him and will help him decide to support the Clause.
    The situation for the taxpayer is by no means as serious as that Answer would lead us to suppose. We are informed that the Greetings Card and Calendar Association has ascertained that the number of greetings cards other than Christmas cards sold is one and a half times greater than the Christmas figure. According to the same source, the average price of a Christmas card is between 7d. and 8d., whereas the average price of other cards is about 1s. 6d.

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    When those two factors are taken together, I am advised that the income from greetings cards other than Christmas cards is three times the Christmas card figure. On that basis it appears that the receipts of Purchase Tax from Christmas cards is not more than £2 million a year—a figure quite different from that of £7 million posited. We would have thought, weighing all the work the charities are doing and what they can do with this money against the insignificance to the Exchequer of a sum of under £2 million, that here is a case where a laudable and necessary concession could be made in the general spirit of Christmas and good will.
    4.45 p.m.
    Mr. Gower: I am sorry to interrupt my hon. Friend. He gave the figure of £2 million. Does not that apply to all Christmas cards? Should not we have a figure of Christmas cards produced for charity which would conceivably be much smaller than the figure he gave us?
    Mr. Rossi: I take my hon. Friend's point. I had merely given the information available to me, but I accept at once my hon. Friend's comment, which adds greater point and force to the argument I have been adducing.
    So far, I have been speaking in general terms of the Clause. I should like briefly to refer now to its wording by way of explanation of what it seeks to do. First, it refers to the Purchase Tax Act, 1963. We ask that the Clause should be inserted into that Act, and the Interpretation Section of that Act would, therefore, apply to it.
    The first few words of subsection (1) of the Clause state: "Upon application by a charity…". That is to ensure that only the charity can apply for this particular relief—not the printer, the manufacturer or any other third party, which might lead to malpractices. It must be a direct application by the charity. To assist the Treasury in keeping its control we suggest that the application be subject
    "…to such conditions as they"—
    the Commissioners—
    "may impose for the protection of the revenue …".
    That would require the production of proper invoices and accounts, so that the
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    Inland Revenue can be completely satisfied that an application is proper.
    Mr. Robert Cooke: I have much sympathy with what my hon. Friends and other hon. Members are trying to do. Indeed, I came here today to try to support them. But would not it be easier simply to say that if the name of a registered charity is prominently printed on the front of the greetings card concerned it would then bear no Purchase Tax? None of the administrative costs would then be necessary, and if somebody tried to get away with a charity that was not registered he could be prosecuted with the force of the law.
    Mr. Rossi: I am grateful for that comment which anticipated the comment which I was about to make on subsection (3). This suggestion has been considered most carefully, but one of the objects of those promoting the Clause is to ensure that the commercial sellers of Christmas cards are not unfairly undercut by charities. If charities were to market Christmas cards which were not carrying Purchase Tax at the time of sale, the cards would go on the market at prices cheaper than those of commercially produced Christmas cards, which would be unfair competition.
    In those circumstances, one could expect people relying on the sale of Christmas cards for their livelihoods to object most strenuously to such a proposal. That leads to somewhat complicated administrative machinery, but it has the intention of protecting commercial interests and not competing with them unfairly.
    The Clause is, therefore, slanted towards a claim for repayment by the charity of tax already paid. The Purchase Tax would be paid in the ordinary way and card marketed with that tax added, and it would appear on the market price for price competitive with commercial cards. However, a charity would then be able to ask the Revenue for the tax back to use for its own charitable purposes, which is why the money was paid at Christmas by people wishing to make a donation for some charitable reason. That is why we have had to draft subsection (3) in this way. I hope that, rather than putting hon. Members off the Clause, the fact that we have tried to be fair to commercial interests will be an additional recommendation of this proposal.

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    In subsection (3) there is a reference to a date, 6th April, 1967. This is inserted merely to ensure that the operation of the Clause does not become retrospective under the terms of the 1963 Act. One would be very happy if there could be retrospective relief for charities, but one has to recognise that to make such a request would be chancing one's arm with the Treasury too much.
    I hope that I have made out a case on behalf of charities which will recommend itself to the House, and I ask for the sympathy of the Government and their acceptance of the Clause.
    Mr. Percy Grieve: I should like briefly to support my hon. Friend the Member for Hornsey (Mr. Rossi) who moved the new Clause so ably, so cogently and with such sympathy. There is little to add to his arguments, but I recall that on the last two Finance Bills the Committee has urged and the Government have accepted concessions aiding charities, notably last year when we debated Selective Employment Tax. Although with some difficulty, in the end the Government were persuaded to accept the arguments of both sides of the Committee. They were persuaded because in this country it is a time-honoured principle that the Government do not seek to make money out of charity; they do not seek to dip their own hands into the pockets of charities. The Government have the greatest possible interest in maining charities and in seeing that charity works and is supported without itself having to make concessions to the Exchequer, because charity saves the State in many respects from having to come to the aid of these whom charity helps.
    In my constituency there are many active charitable organisations. I have had numerous representations, particularly from the British Epilepsy Association, pointing out that the Purchase Tax on these greetings cards is about 50 per cent. These figures have already been given by my hon. Friend the Member for Hornsey. Half of what the public pays and thinks that it is paying for charity in fact goes into the pockets of the Exchequer.
    The Financial Secretary to the Treasury (Mr. Niall MacDermot): I am sure that the hon. and learned Gentleman does
    1760
    not want to put that completely misleading figure on the record. The rate of tax is 27½ per cent. on the wholesale value, which, of course, is considerably less than the person purchasing the card pays.
    Mr. Grieve: I am happy to have that assurance. I was merely quoting what had ben put before me and which I had not had the opportunity to check. But even the hon. and learned Gentleman's figure shows that a very high proportion of the price paid by the public for these greetings cards finds its way into the pockets of the Treasury.
    I hope that the hon. and learned Gentleman will listen to this plea with sympathy, and I am sure that it will find an echo in the hearts of hon. Members opposite. I trust that the Government will find themselves able to accede to the request and make this concession.
    Mr. James Allason: I am very grateful for the support which has been given by both sides of the Committee to my Motion on the Order Paper dealing with this subject and to the Clause. The Motion is supported by Members of all parties, which is natural, because no one wishes to tax charity if that can be avoided, nor to tax money which is spent with the object of helping charity.
    Charity Christmas cards are becoming increasingly popular year by year. As my hon. Friend the Member for Hornsey (Mr. Rossi) said, purchasers of these cards are under the impression that they pay a substantial amount to charity when buying such a card, because they are quite unaware that there is Purchase Tax on the cards. My hon. Friend has described how in future charity Christmas cards will be paying a significant sum in Purchase Tax.
    Incidentally, I can explain to my hon. and learned Friend the Member for Solihull (Mr. Grieve) why is it suggested that roughly half the profit is taken in Purchase Tax. If the cost of production of a card is 4d., taking a 75 per cent. mark up, with Purchase Tax at 27½ per cent., tax would be 1·925d. The card would probably be sold for 8d. which leaves a profit of 4d. distributed as to 1·925d. to the Exchequer and 2·075d. to the charity, which is virtually a 50–50 split, or a 49–51 split, between the Exchequer and the charity.

    1761
    It is not just a simple matter of saying, "Let Purchase Tax be taken off Christmas cards". When I was first approached about this I had a discussion with a representative of a charity with which I am connected. He said, "We want Purchase Tax taken off all Christmas cards". I said, "What would you do if you achieved that?" He said, "We would reduce the selling price of our Christmas cards or improve the quality and sell them at the same price". I said, "This is what is unacceptable. This is intolerable. You must be fair to commercial interests. You must ensure that you continue to sell your cards at the same rate and then you will have a case to ask for Purchase Tax to be taken off."
    5.0 p.m.
    This led to the proposal on the Order Paper which we believe to be a way of entirely meeting the objections of the Treasury which are genuinely in the interests of commercial Christmas cards and also in the interests of the revenue that it wants to collect from commercial Christmas cards.
    The way of doing it described by my hon. Friend the Member for Hornsey is fair. He gave two examples of the value resulting to charities if the Clause is accepted. I want to give one further example, the British Leprosy Relief Association, which paid approximately £5,000 in Purchase Tax on last year's cards. This year, as my hon. Friend has described, there is a mark up in the rate of Purchase Tax resulting from the notional increase from 50 to 75 per cent., which represents a one-sixth increase in the amount of Purchase Tax to be paid. The British Leprosy Relief Association paid £5,000 on last year's cards, so next year it will pay £6,000 on the same number. A sum of £5,000 would provide six mobile leprosy treatment centres for a year or give prophylactic vaccination to 7,000 children or give full hospital treatment to 310 children for one year. This one charity alone would derive tremendous benefit from this relief, and this would be multiplied over all the charities which will be considered.
    As my hon. Friend said, many smaller charities rely almost entirely on their profit from Christmas cards. As a result of this increase, the Exchequer will be
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    taking roughly half the profit from Christmas cards. I am sure that no one wishes this, least of all the Treasury, if it can be assured that a satisfactory scheme is proposed. There is no great loss in revenue and it is in accordance with Government policy not to tax charities if it is possible. Therefore, I hope the Government will accept the Clause.
    Mrs. Jill Knight: The principle of charity Christmas cards is not old. Most of us will remember that it started a handful of years ago; yet it has caught on to a great degree. This is understandable, because most people concede that it is extremely appropriate that at Christmas time they should help charities. It may be that, being a time of excesses when they help themselves, their families and their homes and have a thoroughly good time, they are salving their consciences a little by contributing to charitable causes. It may be merely that they are indulging in a constant urge to be generous, which is a happy urge to have, and we all enjoy indulging in it. For these reasons, the charity Christmas card business has grown very much in recent years and it is an extraordinarily important source of income to the charities which benefit from it.
    It is helpful to know some of these charities. There are a great number, and I will mention a few: autistic children—a real Cinderella of a charity—the Cancer Research Fund, blind babies, chest diseases, mentally handicapped children and marriage guidance. All of these are helped by people who buy charity Christmas cards, and there is a very strong case for the Chancellor to help these funds.
    My hon. and learned Friend the Member for Solihull (Mr. Grieve) touched briefly on the point that these charities, to a very large degree, do the Government's job for them. Certain very mean and rather meagre grants are forthcoming from the Government to these charities, but in the case of mentally handicapped children it is appalling how little the Government contribute towards alleviating the difficulties of both the children and their families.
    The charities do a very great and important job. If they did not, then, with our social conscience, surely the

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    Government would have to step in and take over.
    I can think of many cases where charities save the Government very large sums of money—for example, marriage guidance, to which a very small grant is made. Yet there is no doubt that this particular form of social service saves marriages and keeps children out of care, and most of us know how expensive it is to have children in the care of local authorities. Because these charities work as they do, the Government are saved a very great deal. It is bad enough that the Government do not give more to these charities in a straightforward way, but that they should do the opposite and, in fact, rob the poor box is really too much to bear. That the Chancellor should take what others give to charity with an open hand and open heart seems obnoxious. No Scrooge could be meaner or more deserving of our censure.
    What will be the effect of this debate? My hon. Friends and I very much hope that it will enable and encourage the Government to repent their evil ways and embrace the Amendment. It will undoubtedly also have the effect of publicising the fact that people contribute to the Exchequer when they buy a charity Christmas card. People do not know this. It comes as a great shock to them when they learn this most unpleasant fact.
    I thank heaven that it is June, that people's memories are short, and that perhaps by next November or December when they are buying their Christmas cards they will have forgotten that this debate has taken place. Should the Clause not be accepted and should people's memories not be so short, the sale of Christmas cards will be very adversely affected by the bitter knowledge that people are paying into the Exchequer. They will say, "After all, it is cheaper to buy ordinary Christmas cards." Indeed, in very many cases it is. One does pay a little more for charity Christmas cards, and no one minds doing this for charity. However, even the seasonal good will burning in the public soul will not persuade people to contribute to the Exchequer.
    I am sorry to say that that is true. Even at Christmas time, people do not regard the Chancellor of the Exchequer as a person to whom they should make some
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    more money forthcoming. They tend to think that he takes enough already at Christmas time. If they come to know that, by paying extra for Christmas cards, they will contribute even more to the Chancellor's funds, I cannot help thinking that they will keep away from charity cards. The public in general have no intention of buttering the Chancellor's crumpet when they buy charity Christmas cards.
    It may be thought that not very much money is involved, but it will have been an interesting experience for people outside to hear how much money is taken from charities. We have heard some examples, and I am anxious that hon. Members should know about all the examples that exist. It is quite appalling that the National Fund for Research into Crippling Disuses, which, above all others, is one which should not have to beg to the public for its funds, estimates that it paid nearly £6,000 in Purchase Tax last year. It so happens that I am very interested in the Save-The-Children Fund. That charity estimates that it pays about £15,000 a year.
    Presumably the Chancellor is quite happy about the little bits of a penny which he takes in Purchase Tax. However, those mites add up to a frightening amount of money, and how much those charities could do with the extra money is a matter which we ought to consider, particularly when, if it is looked at in a broad way, what they do is something which the Government should do, anyway.
    For those reasons, I hope that we shall have a little sympathy from the Government, and that this Clause will be accepted.
    Mr. Leslie Hale: My right hon. Friend the Chancellor has an admirable opportunity of doing a great service to some very important charities by imposing a swingeing tax upon the £11 million of tax-free capital profit which Lord Hill dished out last week to some unconnected "odds and sods", and I hope that he will do it. By that means he will make an extensive provision for social work in many fields of activity.
    I was touched by the delayed philanthropy which we have heard from hon. Members opposite. It seems to express itself only when they are in opposition. This tax has been imposed for 27 years,

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    and it is a fact that the sale of gift Christmas cards has increased immensely during the whole of that period.
    My hon. Friend the Member for Hornsey (Mr. Rossi) put forward some very fair points. I have received representations from people in my constituency, to whom I have written immediately expressing sympathy and virtually promising support on a first glance at the case put forward, saying, "I will look into this and find out the details." However, the more one looks, the more one comes to the conclusion that there are difficulties and anomalies.
    In my constituency, there is a substantial firm manufacturing cards, which complains bitterly of the unfair competition which places its business activities in jeopardy. I am bound to say that it is difficult to put forward—
    Mr. Nicholas Scott: The language which the hon. Gentleman uses is rather strong. Presumably the firm in his constituency prints not only Christmas cards but other types of greetings cards. If he looks at the growth of the greetings card industry, and considers the explosion in the amount of trade which such firms have done in the last 10 years, it is rank nonsense to say that a business would be placed in jeopardy by a concession of this kind.
    5.15 p.m.
    Mr. Hale: There has been an extension of the rather foolish symbolism which we import from America to celebrate such occasions as Mother's Day, Father's Day, Uncle Arthur's Day and Uncle Sam's Day. More recently, we have seen buttonholes saying "Pop is good for you", "Down with Cassius Clay", and so on. However, it is not an easy industry and, as I say, this tax has been imposed for 27 years.
    I dislike the Purchase Tax, and I dislike the idea of taxing Christmas greetings. There is something quite objectionable about the idea. Christmas cards move me emotionally rather in the way that they might have moved Scrooge, but a lot of people like them. A lot of people use them and think that they are an admirable means of sending benevolent and Christian greetings. With their thoughts on the immortal history of Christmas Day and benevolence of the period I doubt whether, at the same
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    moment, they are thinking of my right hon. Friend the Chancellor of the Exchequer or have a special desire to confer a benefit upon him.
    There is force in the argument that, if charities alone are relieved from the tax, it becomes a singularly unfair form of competition. If in that way they were able to reduce prices, in addition to the effect which the charity card has, other manufacturers would be put at a disadvantage. If there is to be a concession of this kind, there should be a condition that the card is handled by the British industry and not printed abroad, as some are.
    I was driven to rise to my feet mainly by the rather ostentatious oozing of benevolence from people who themselves maintained this tax in their 13 years of office. However, I agree that it is an unpleasant anomaly which should be removed as soon as possible. I should have thought that, in view of the very special significance of Christmas, to make an exception in the case of Christmas cards would not provide any administrative difficulty. The Exchequer would still make gains from the sales of postage stamps, and postage rates have increased substantially over recent years.
    I ask my hon. and learned Friend to say that he will apply his mind to it again with care and thought and try to find how much he can, at a reasonable cost, make a gesture which I am certain would be satisfactory to both sides of the Committee and be in accordance with good sense and decent feeling.
    Mr. Gower: At the end of his splendid introductory speech, my hon. Friend the Member for Hornsey (Mr. Rossi), expressed the hope that he had put forward a fair and reasonable case for the acceptance of his new Clause. I felt that he had done more, because I thought that he put forward a very striking case.
    The Financial Secretary has sometimes rejected Clauses and Amendments out of hand. Sometimes he has rejected their wording but has been inclined to accept their principle. All too rarely has he accepted them in toto. However, I am surprised that he has not displayed some impatience to accept the principle of this splendid Clause. I cannot believe that he can feel any satisfaction about sustaining the present absurdity which has

    1767
    been explained by my hon. Friend. There is a minority opinion, which I hope the Financial Secretary does not share, that all the things done by charities should be done by the State. I do not share that view. I think that whatever the State does, and however far it goes, there will always be some gaps, some imperfections, which charitable organisations will seek to fill.
    I think the Financial Secretary and the Government will accept that the work done by some of these charities is of great value, and that the voluntary contributions which people make to charities are better than those which they are forced to pay by edict of the State. They have an enhanced virtue, in the sense that they are made voluntarily. It is wrong that the State should tax research into cancer and the activities of so many other charities which have been mentioned, and I think that whatever else we do today we should ensure that this situation does not continue for much longer.
    My hon. Friend said that the Purchase Tax on Christmas greetings cards last year amounted to about £2 million. I do not know, and I hope that the Financial Secretary will be able to tell us, but I imagine that the proportion of that sum which would be payable in respect of Christmas cards sold by charities would be relatively small. Nevertheless, this sum bears heavily on charities, and I congratulate my hon. Friends the Members for Hemel Hempstead (Mr. Allason) and Hornsey for having found a formula which does not have the serious objections which were mentioned earlier. This provision will not give charities some advantage over those who have to earn their livelihood by the production and sale of Christmas cards.
    This is a reasonable and fair proposal. I think that it commands the support of both sides of the House, and I hope that the Financial Secretary will at least accept its principle.
    Mr. Edwin Brooks: I am sorry that I missed the earlier part of the speech of the hon. Member for Hornsey (Mr. Rossi), but I am in substantial agreement with the remarks which I have heard him and others make. I thought that the hon. Lady the Member for Birmingham, Edgbaston (Mrs. Knight)
    1768
    was a little unfair in calling on the Government to repent, though perhaps she can be more optimistic that the Kingdom of Heaven is at hand at long last, far more so than it was when her colleagues formed the Government. Nevertheless, I do not propose to follow the hon. Lady's technique, which seems to be to prevent the Chancellor, as she put it in her memorable phraseology, "buttering his crumpet" by buttering him up.
    We regard this form of taxation as inequitable, and very unfortunate in its effect on many of the better causes in our society. It has often been said, and it has been repeated several times during this debate, that the role of charities tends to vanish as the State takes over various functions of our so-called welfare society. I think that this is so, and that as time goes on, and as the work of charity expands, it is inevitable that the State should come in and assert its own responsibilities.
    That the State is able to do this at all is surely because the charities themselves have acted as trail-blazers, that they have been able to define the gaps in the Welfare State in the first instance. They have often courted a good deal of unpopularity, certainly a good deal of public indifference, in the early months and years of their activities. Not all charities automatically meet with public approval, and some charities, which I shall not mention, have certainly courted a good deal of public disfavour in their pioneering years.
    But, whatever may be the truth of the State's eventual assertion of responsibility, it is surely true to say that there are still many gaps in our welfare society. Indeed, as society changes new gaps are identified, and what worries me particularly about this sort of taxation is that it is likely to strike at the financial strength and resources of the smaller charities which are not in any sense as prosperous as some of the more well-established of their fellows, but which, nevertheless, are desperately important if we are to help underprivileged sectors of our society.
    Many problems which were not known some years ago are now being considered. The problems of the autistic child are now receiving the attention of many good people in all sorts of voluntary activities. I have received a letter from the honorary

    1769
    secretary of the Merseyside branch of the Multiple Sclerosis Society, and I would like to quote briefly from it. He says:
    "We like many charities derive a great deal of financial benefit from the Christmas cards we sell, and are aware that Christmas cards are an accepted and a very appropriate method of raising funds. Some of the smaller charities, and we in this Branch consider ourselves amongst these, rely almost entirely on the sales of Christmas cards for our income."
    It is the problem of the smaller charities to which I think we should be giving consideration this afternoon.
    I do not propose to delay the proceedings of the Committee any further, except to say that until my hon. Friend the Member for Oldham, West (Mr. Hale) spoke a few moments ago I felt that this was going to be a debate contributed to almost entirely by hon. Gentlemen opposite, and that perhaps the only speaker from this side would be the Financial Secretary. I think that if that were to happen it would be very unfortunate, because there is an Early-Day Motion which has been signed by Members of all parties. I take it that when they signed it they were of sound mind. I take it that they still adhere to the views which it expressed. I do, as a signatory, and I hope very much that the Government will consider sympathetically the representations which have been made.
    Mr. John Smith: The Financial Secretary will have no difficulty in knocking down this Clause, if he wants to. In spite of what we have heard, he will probably say that relief to charities would be unfair to commercial people who sell Christmas cards; although I doubt whether charities, who want all the money they can get, would undercut ordinary retailers. I think that the cry of unfairness is more apt to go up from the Revenue when it is a question of relieving someone from an existing tax, than when it is a question of imposing a new tax on some one. We had an example of this last year over the Selective Employment Tax.
    The hon. and learned Gentleman may also say that the relief of greeting cards would be the thin end of the wedge; that it would open the door; that under subsection (1) it could apply—as indeed it could—even to motor cars; and that it
    1770
    is impossible to draw the line, and so on. In fact, however, the Commissioners of Customs and Excise are well able to draw the line over Purchase Tax. They have had a great deal of practice in doing so. The matter which we are discussing is governed by notice No. 78 of the Customs and Excise, Group 26, which relates to stationery, and, like everything else these days, it is an extremely complex group.
    For example, compliment slips are exempt from tax, but taxable if they bear words of greeting or of sympathy. Rubber stamps are exempt as one would expect, but not date stamps; rulers under 24 inches long pay tax, but rulers over 24 inches long do not; laundry lists are taxable, unless they have a hole punched in them; sealing wax for letters is taxable, but sealing wax for parcels is exempt.
    The Committee will therefore agree that the Commissioners are quite capable of drawing a line somewhere—too much so, and indeed a little Parkinsonian study of Notice No. 78 is badly needed anyway.
    5.30 p.m.
    Sir G. Nabarro: Is not my hon. Friend aware that 400 Parliamentary Questions were asked by me over a period of four years for the very reason that the Customs and Excise authorities could not demarcate and define accurately? Every time they attempted to do so—notably in connection with printing and stationery—they added a hundredfold to the anomalies of the position.
    Mr. Smith: I was aware that I was venturing towards South Worcestershire in this matter. Nevertheless, I believe that there are bastions yet unstormed in this field and I hope that we may hear even more from my hon. Friend on these topics on other occasions.
    I hope that the Financial Secretary will want to accept the new Clause, for the good reason that it affords the Government an opportunity to put right what may well be a misconception on the part of the public, namely, that the Labour Party is anti-charity. There have been the attempts to impose Selective Employment Tax on charities; the imposition of the Land Commission levy on property investments of charities; the refusal to exempt charities from Capital Gains Tax

    1771
    derived from their holdings in investment and unit trusts, and, very serious—and apposite in this case—the current attempt on the part of the Inland Revenue authorities to tax charities on the receipts from sales of Christmas cards —on top of Purchase Tax.
    Charities are theoretically liable to tax on trading profits—and they pay it—
    The Temporary Chairman (Mr. Harold Gorden): The hon. Member is dealing with a matter which is outside the terms of Purchase Tax, and is out of order.
    Mr. Smith: The Government are apparently pressing the Inland Revenue authorities to extend the tax to Christmas cards. As a result of all this the position of charities is worse now than it was in 1964. Part of this apparent anti-charity bias which the acceptance of the new Clause would reduce is an anti-independent education bias, but the animosity has seemed to spread to charities in general. The public are nettled by this, and charities themselves are deeply interested in this Clause. To accept it would go some way towards repairing the damage which the Government are causing themselves at the moment.
    To accept this new Clause would also help to reduce some of the anomalies of the Purchase Tax, which is my second reason for supporting the Clause. These anomalies arise on Group 26, relating to stationery. It would be a small simplification of the tax system but it would be worth doing, and it certainly seems needed.
    I have, as usual, a letter from a constituent, saying:
    "The universal opinion within the trade is that this document"—
    Notice No. 78—
    "cannot be understood. As a result the British Master Printers Federation produced their own book which is a slight advance on the official notice but still involves lengthy discussions with the Customs and Excise."
    For example—and these are very important in the context of the new Clause—charity appeal leaflets are taxable they suffer Purchase Tax unless the detachable portion which is filled in and returned occupies less than one quarter of the leaflet. Easter and Christmas church service cards are free of tax, provided they bear no words of greeting. If a person is innocent enough
    1772
    to print a greeting such as "Happy Christmas" he pays tax. It is the greeting that pays tax. If one prints "Vote for Smith", there is no tax. If one prints "Happy birthday", there is tax. Charity membership cards suffer tax if there is a space to sign one's name, but not if one writes one's name. The National Trust has had to change its membership cards for this reason.
    A lottery ticket with a blank counterfoil is free of tax, but one with a counterfoil which envisages writing a name and address on it is taxable. These are absurd anomalies which we can well do without. I do not believe that the revenue at stake is very large. One large charity with which I am concerned and which spends more than £1 million a year reckons that relief through the new Clause would save it £3,000 a year, but the consumption of human effort and the general attrition of human spirit is enormous.
    The Government have a double opportunity here—to reduce complexity and to buff up their image—by accepting the Clause and applying its provisions to all materials used by registered charities which come under Group 26 of Notice No. 78.
    Mr. MacDermot: My hon. Friend the Member for Oldham, West (Mr. Hale) asked me to give an undertaking to examine the new Clause with care. I can assure the Committee that I have done that. Long before we reached the Committee stage, and even before the publication of the Bill, I looked with great care into the problem. If there had been any way that I thought was acceptable, within the framework of the tax, to grant an exemption of this kind no one would have been happier than I. But for reasons which I shall explain my efforts were unsuccessful. I must tell the hon. Member for Hornsey (Mr. Rossi) that I find his efforts also unsuccessful in overcoming the objections to the proposal
    In saying this, I in no way reflect upon the work done by these charities. I agree that however much we develop our Welfare State facilities and social security there will always be important fields of work for charitable organisations.
    First, I want to correct a completely false impression, which is gaining widespread currency, that the present Government have suddenly introduced a measure

    1773
    to impose Purchase Tax on Christmas cards. Nobody has said it in the House, but letters written by organisations have been passed on to me, beginning, "I hope that you will oppose the Government's proposal to impose Purchase Tax on charity Christmas cards. Such are the misconceptions that have arisen as a result of the campaign on this subject. The truth is that Christmas cards of all kinds, including those manufactured and sold by charities, have been subjected to Purchase Tax since the origin of the tax in 1940.
    Mr. Scott: The misconception arises not from this, but from the new attempt by the Revenue to tax the income on Christmas cards, referred to earlier.
    Mr. MacDermot: I was coming to that. I hope that the hon. Member will not intervene to put to me points to which I have been listening patiently for about 1½ hours, and most of which have been made several times
    I want to correct another false impression—that the tax on charity Christmas cards is in some way an anomaly It is not. It is in line with the law about indirect taxes that has always existed in respect of charities. The exemptions that exist for charities in the tax field have never extended, with one small exception, to indirect taxes. For example, charities pay Purchase Tax on goods which they purchase to carry out their own charitable activities, such as their stationery and furniture. All these articles are subject to Purchase Tax. If they have been liable to tax on the goods they use themselves in furthering their charitable activities, naturally much more have they been so on any goods they sell by way of trade.
    The only exception is in Section 20 of the Purchase Tax Act, 1963, which applies to goods which are given to charities and are used for the purpose of relieving distress. For instance, people giving clothes to Oxfam will not be subject to Purchase Tax—
    Mr. Gower: The hon. and learned Gentleman has made a fair point, but would he not be prepared to accept the distinction that when a charity buys a motor car, or something like that, the person who sells the motor car does not intend it to be a donation to the charity,
    1774
    whereas the person why buys a charity Christmas card intends it to be a donation?
    Mr. MacDermot: I beseech hon. Members not to intervene, if that is the only kind of intervention they intend to make. That point has been made in the debate and I intend to reply to it. It does not further discussion if every hon. Member again puts points I have not yet reached.
    We are not here concerned with the performance by charities of their charitable functions, but with their trading activities in order to raise funds. Charities are not set up to trade, but to do charitable works. They already enjoy very considerable tax exemptions in respect of funds for their charitable works. It was overstated by the hon. Member for Hornsey when he said that they were not subject to Income Tax.
    The position is that they are not subject to Income Tax on their investment income, and they can claim back Income Tax on moneys paid to them under covenant. But if they go into business and become a trading organisation they are subject to Income Tax—or Corporation Tax, if they are a corporation—on their trading income. This is another aspect of the matter.
    There is nothing new in assessments being made in this respect by the Inland Revenue on charities. In fact, a number of charities have perfectly properly and lawfully arranged matters so that they have set up a trading organisation which then covenants its dividends to the charity, which is then able to claim back Income Tax under the covenant. But the Revenue and the Customs and Excise authorities are properly applying the law as laid down by Parliament, and carrying out the duties we have imposed on them. Tax exemptions are related to the charities' charitable work, and if charities decide to go into business and trade in competition with other traders they must not expect reliefs that will enable them to trade on preferential terms.
    I believe that this principle is accepted by supporters of the new Clause, and that they have sought to meet it, but I wish to make the point that the wording of the Early-Day Motion is not fair when it regrets what it calls "the taxation of charity". This is not the taxation of charity, but the taxation of trading. It

    1775
    is not the taxation of cancer research, but the taxation of Christmas cards being sold in the hope of raising funds which can help cancer research.
    5.45 p.m.
    If people regard their purchases of charity Christmas cards as being in the nature of donations they are deceiving themselves: they are purchasing articles that they want for Christmas—Christmas cards—and are deliberately purchasing the cards so that the profit on them will go to charities. I imagine that most of us do this. I know that I have done it for many years, and, whatever the tax position, I have no intention ever again of buying Christmas cards other than for a charity. But I do not think that I am making a donation to charity in doing that. I would be deceiving myself if I thought that I was.
    The hon. Lady the Member for Edgbaston (Mrs. Knight) thought that if the general public realised that they were making a contribution to the Exchequer in this way they would cease to buy charity Christmas cards. I would only say that, if they did, they would be acting on what I would regard as a very feminine reaction, because unless they were to cease buying Christmas cards altogether they would continue to make a contribution to the Exchequer, because they would still pay Purchase Tax on the cards they bought.
    Mrs. Knight: What I wanted to make quite clear, and I think I did so, was that that might make people do this, although in very many cases it is less dear to buy cards which are not charity Christmas cards. One does pay more for a charity card, and does so deliberately as a kind of donation to charity.
    Mr. MacDermot: Obviously, that must depend on the card. With respect, it is not my experience. There may be some non-charity cards which are cheaper, but, equally, there are some charity cards which are sold very cheaply.
    The question has been raised, and it is what has stirred up public interest in the subject recently, of the increase by the Commissioners of Customs and Excise in what is called the uplift in printing costs in arriving at the wholesale value. As the hon. Member for Hornsey pointed out in his very lucid speech,
    1776
    the Commissioners are under a statutory duty to levy this tax on the wholesale value. As there is no wholesaler in the case of charity Christmas cards, one has to arrive at an assessment of what the wholesale value is—what is sometimes called a notional value.
    This occurs in a number of other trading fields where there is a similar position, and the normal practice is for the Commissioners to negotiate with the trade body to arrive at a fair figure. Unfortunately, in this case there is no body representing traders with whom the Commissioners could negotiate. They consulted the General Secretary of the Council of Social Services, which exercises, as it were, a watching interest on behalf of charities, and a meeting took place at which the Commissioners explained their proposals. As far as I know, no one has seriously challenged the figure which is now being adopted for uplift as fair and reasonable.
    The fact is that the old figure of 50 per cent., which had been fixed as far back as 1959, was out of date, and was the subject of complaints from commerce and trade that they were being subjected to unfair competition because the figure was artificially low. It was as a result of those representations that the Commissioners, as they were bound to do, looked again at the figure.
    A lot of figures have been quoted which may give a completely false impression outside as to the amount of the retail price of the charity Christmas card represented by the Purchase Tax. On average, if we take a Christmas card which one would buy for 1s., about 1½d. of the shilling is represented by Purchase Tax—
    Mr. Allason: Will the hon. and learned Gentleman give some figures? Would not a charity Christmas card, costing 4d. to produce and bearing virtually 2d. Purchase Tax, sell for about 8d.?
    Mr. MacDermot: I have not examined the figures, but I will gladly discuss them with the hon. Gentleman. The advice I have been given is that on a Christmas card costing Is. the Purchase Tax is a little above 1½d., but under 2d. Obviously, it must depend on the way in which the charity prices its card, and what it puts on the wholesale price for its retail price.
    Sir G. Nabarro: Is the Financial Secretary suggesting that if the retail price is a Is. and Purchase Tax is 1½d., levied at a rate of 27½ per cent., the notional wholesale price of the charity Christmas card is thereby 6½d., and that the gross profit is as much as 5½d.? if he is, that is twice the figure I have been given.
    Mr. MacDermot: I have given the Committee the information I have, and hon. Members know that the Departments are very careful in giving the best estimate they can to the Committee on these matters. I assume that there are further equivalent costs in the retail distribution which charities have to bear. It does not follow that the whole of that addition is in the form of a profit to the charity.
    So much for the general objection. As I say, I think that this general objection is accepted by the proposers of the Clause, and they seek to meet it. The way they seek to meet it is by saying that instead of granting exemption from Purchase Tax the tax should be imposed and levied but subsequently repaid to the charity. I can only say to hon. Members that that argument strikes me as being jejeune. If they think that the commercial preference would be overcome in that way I think they are deceiving themselves. Let them imagine themselves as being in trade in this field and being told, "Do not worry. You pay the Purchase Tax, but you will get it back afterwards." Do not they think that would give them a commercial advantage over their competitors?
    Compare the betting duty. If a bookmaker were told, "We are going to levy the duty, but in your case we will repay it", would that not enable that bookmaker to offer more favourable odds to his customer than his rival could? It is not a hypothetical suggestion of mine, that this commercial advantage could operate to the benefit of charities and against the commercial trader.
    The hon. Gentleman the Member for Hemel Hempstead (Mr. Allason), who put down the new Clause, told us what was the reaction of one of these charities when he asked, "What would you do if you were exempted from Purchase Tax?" The answer, he told the Committee, was, "We will reduce the selling price, or improve the quality." In other words,
    1778
    it would exploit a commercial advantage which the exemption would give it. The mere device of collecting and repaying the tax would only marginally reduce that commercial advantage; it would remain, and the complaint from the ordinary trade which, it is admitted on all sides of the Committee, is legitimate would remain.
    Then comes the question of cost which, of course, is linked with it. Hon. Members have referred to the figures which have already been given of about £7 million as the total Purchase Tax on cards at the moment and, it is estimated, about £2 million on Christmas cards. They are not our estimates, but the trade's estimates. Of course, what is our concern here is what would be at risk if we admitted the principle of this new Clause. As has been pointed out by the hon. Member for the Cities of London and Westminster (Mr. John Smith), the principle is not confined to Christmas cards. This is a field in which charities are trading at the moment, but if this principle were accepted surely some charities, at least, would not be slow to exploit the advantage. If, for example, they could sell motor cars—by setting up a charitable garage to sell cars—and by being a charity could recoup Purchase Tax, this would obviously be a very profitable field of trading.
    Therefore, apart from immediately putting at risk the Purchase Tax on cards, and the trading advantage it would give charities, it would represent a real threat to the Purchase Tax in very many other fields, and it is for those reasons, I am afraid, that we do not find this an acceptable solution.
    Mr. Allason: Would not subsection (2) of the new Clause operate to stop the selling of cars?
    Mr. Bryant Godman Irvine: I had been hoping, Mr. Gurden, that I could have had the privilege of catching your eye a little earlier this afternoon, but my duties as a member of the Select Committee on Agriculture prevented my being here at the beginning of this debate. I am grateful to have this opportunity of supporting this new Clause and of saying that I am very disappointed by what we have heard from the Financial Secretary. I see the force of a number of arguments he put up, but I am not persuaded that

    1779
    his ingenuity and that of the Chief Secretary—that, indeed, of the whole Treasury —could not find a way to achieve this very desirable object.
    The Financial Secretary has said that he purchases Christmas cards from a charity at Christmas time. I was quite unable to understand why he did it, because he said that he was under no illusion that he was not paying some tax, and he knew that it was run as a business, and yet he kept on buying the cards. I believe that the people who buy Christmas cards from charities at Christmas do not do it merely because they want Christmas cards: they do it because they want to support some charity.
    I have in my constituency a children's home which is run by the Church of England Children's Society. A number of people buy Christmas cards from the society because they know that home, and the good work it is doing; they do not buy because they regard it as a business transaction, but because they want to see the money going into the coffers of that society.
    The society says that it expects to pay £3,120 this year in tax and that that would feed 100 children for six months, or feed and clothe 100 children for four months, or provide a home for 16 children for five months.
    When people buy Christmas cards from charities they hope that the money they are laying out in that way will go to the charities. Therefore, I find the arguments put forward by the Financial Secretary entirely unsatisfactory, and I should certainly like to vote in favour of the new Clause.
    Mr. Patrick Jenkin: I should like to begin by warmly congratulating my hon. Friend the Member for Hornsey (Mr. Rossi) upon the very cogent way in which he moved this new Clause. The degree of support which he has attracted must have come as a surprise to the hon. and learned Gentleman.
    The Clause is supported by all three major parties in the Committee. The hon. Member for Oldham, West (Mr. Hale) asked for the Financial Secretary's sympathy. I had hoped we might have got more than that. The hon. Member
    1780
    for Bebington (Mr. Brooks) has been notable in his support of one charitable object of which we detected echoes in his speech. The hon. Member for Roxburgh, Selkirk and Peebles (Mr. David Steel), from the Liberal benches, has put his name to the new Clause. Therefore, it was very disappointing indeed that the Financial Secretary gave to the Committee what was tantamount to a blank refusal.
    First, to take up the whole question of the Labour Party's attitude to charities. The Financial Secretary protested his innocence of any ill will towards charities, but both my hon. Friend the Member for the Cities of London and Westminster (Mr. John Smith) and my hon. and learned Friend the Member for Solihull (Mr. Grieve) adverted to what has now become a well recognised fact, that the Labour Party does not care as much for charities as do other parties in this Committee. I well remember that in the Budget debate on the Selective Employment Tax last year the Chief Secretary tried vainly to defend the Government's imposition of Selective Employment Tax on charities, and he adduced—he will correct me if I am wrong—exactly the same argument we had from the Financial Secretary this afternoon, and said that charities have always paid indirect taxation and that Selective Employment Tax was an indirect tax like any other.
    Thank goodness, the pressure was too much for the Government. They realised they could not impose the impost. I would have hoped that the same logic would have swayed the Government today, and that we would have had some relief in this particular case. The Government do not recognise that they have attracted to themselves this odour of disfavour. In the House on 28th February, in reply to a supplementary question by my hon. Friend the Member for Liverpool, Wavertree (Mr. Tilney), the Chief Secretary actually congratulated the Government on their attitude to charities. He said:
    "The Government have been outstanding in their help to charities…"
    But let hon. Members wait to see why he made that claim. He continued:
    "both in removing them from the effects of the Selective Employment Tax and in being the first Government to establish the position

    1781
    of charities in relation to the Corporation Tax."—[OFFICIAL REPORT, 28th February, 1967, Vol. 741, c. 258.]
    That is what the Government claim they have done for charities and that is why remarks of that kind are greeted with hollow and derisive laughter from this side of the Committee.
    There has been a good deal of dispute about figures between the two sides of the Committee. My hon. Friend the Member for Hemel Hempstead (Mr. Allason) quoted some figures which appeared to me to be right. I would point out to the Financial Secretary that it is not the retail price in which the charity is principally interested. The charity is interested in the profit, the money that it will have to carry out its charitable work. My hon. Friend the Member for Hemel Hempstead showed that nearly half the profit is absorbed in Purchase Tax.
    Mr. MacDermot: Is the hon. Member suggesting that Purchase Tax is a tax levied on profit?
    Mr. Jenkin: No. I know that it is not. I was saying that the charity is concerned about the proceeds, not about the retail price. I did a quick calculation with the help of my hon. Friend the Member for Wycombe (Mr. John Hall). The Financial Secretary offered a figure of 1½d., and this may well be right, on a card costing 1s. But on such a card there has been a substantial uplift, more than most charities feel that they could charge. For a card costing 4d. to print, the figures which the Financial Secretary gave would be right, but, as my hon. Friend the Member for Hemel Hempstead pointed out, if a card costs 4d. to print, a charity is unlikely to be able to sell it for more than about 8d.
    Of that difference between printing costs and selling costs, nearly half is Purchase Tax. It is 27½ per cent. on the printing cost uplifted by 75 per cent. The figure is over 48 per cent. of the primary cost. The Financial Secretary shakes his head, but that figure is correct. It is 48 per cent. of the primary cost uplifted by 75 per cent. Thai is what Purchase Tax amounts to, and it represents nearly half of the total profit on the card.
    The Financial Secretary voiced some indignation that the Government have been accused of being the first Govern-
    1782
    ment to impose Purchase Tax on Christmas cards. They have earned for themselves such a reputation that people think that that might well be possible. But there is some fire behind the smoke in that under their auspices the Commissioners have increased the uplift to the new figure of 75 per cent. and, as my hon. Friends said, are seeking for the first time to treat this as a trading activity which ought to come within charge to Income Tax or, presumably, in some cases, Corporation Tax and, where appropriate, Profits Tax. The Government cannot get away from the fact that Purchase Tax represents substantial inroads into the assets which are available to charities to meet their objective.
    Mr. A. Woodburn: I gather that the hon. Member is implying that the Commissioners allow themselves to be influenced by the Government in reaching their decisions.
    Mr. Jenkin: I said "under their auspices".
    Mr. MacDermot: This is important. Will the hon. Member make clear what he means? What was the insinuation of the phrase "under their auspices"? I have explained to the Committee that there were complaints from the trade to the Commissioners—not to the Government, but to the Commissioners. The Commissioners then carried out their statutory duty of reviewing the wholesale uplift. Is the hon. Member challenging what I said, or is he suggesting that there was something underhand on the part of the Government?
    Mr. Jenkin: I recognise entirely—and I do not want to suggest otherwise—that the Inland Revenue and the Commissioners of Customs and Excise preserve a very proper independence from pressures by the Treasury or other Government Departments in carrying out their statutory functions.
    The point that I was making was that people were ready to believe that the Government had, for the first time, imposed Purchase Tax because the Government have this reputation of being unfriendly to charities and because this has coincided with the move about uplift. That is the point that I made and why I used the phrase "under their auspices". It was during a period of Labour Government. To suggest that I am implying

    1783
    Government interference with the Commissioners is unworthy, because it is not true.
    Let us deal with the extent to which this provision would be unfair to commercial firms producing Christmas cards in the ordinary way. There are two answers. One was given in an intervention by my hon. Friend the Member for Paddington, South (Mr. Scott) who spoke of the enormous increase in the volume of Christmas cards sold every year. As he said, this is an explosive growth. It is a growth trade growing faster than almost any other in the country. If, therefore, some part of this trade is creamed off by charities who may be given a favoured position in relation to Purchase Tax if the Clause is accepted, I find it difficult to believe that the trade could claim that they were being jeopardised—a word used by the hon. Member for Oldham, West—or that they would suffer any severe hardship. In a written Question my hon. Friend the Member for Wycombe in February asked the Chief Secretary
    "what representations he has received either from manufacturers or retailers of Christmas cards that unacceptable hardship would be caused by the abolition of Purchase Tax on Christmas cards sold by charitable organisations".
    The right hon. Gentleman replied:
    "None"—[OFFICIAL REPORT, 28th February, 1967; Vol. 741, c. 57.]
    They might claim that they were being unfairly discriminated against, but they could not seriously claim that there was any great hardship.
    The other argument is that the price of Christmas cards is set by the price at
    which Christmas cards are sold generally in the trade. As one of my hon. Friends pointed out, charities are as anxious as anybody else to maximise the profits which they earn from this activity. Nobody could seriously suggest that they would put this at risk by undercutting the trade and by selling Christmas cards for a lower price than that which the public would pay in the ordinary way, so reducing their profits.
    Mr. Woodburn: Does not the hon. Member realise that a manufacturer might promote a charity merely to get orders for Christmas cards although he would be doing it for business purposes?
    Mr. Jenkin: The right hon. Gentleman, if I may say so with respect, has not heard the whole debate. His argument has much the same flavour as that which the Financial Secretary produced when he said that charities next would be dealing in motor cars. That is ridiculous.
    The fact that the right hon. Gentleman and the Financial Secretary have to descend to ridiculous cases of this sort to justify their opposition to the Clause indicates the weakness of their argument. I have heard nothing from the Financial Secretary this afternoon that persuades me that we should be wrong to divide in favour of the new Clause. I very much hope that my hon. Friend the Member for Hornsey, who moved the new Clause with great cogency, will press it to a Division, and I certainly advise my right hon. and hon. Friends to support him in the Division Lobby.
    Question put, That the Clause be read a Second time:—
    The House divided: Ayes 137, Noes 183.

    Division No. 378.]

    AYES

    [6.8 p.m.

    Alison, Michael (Barkston Ash)

    Burden, F. A.

    Fisher, Nigel

    Allason, James (Hemel Hempstead)

    Campbell, Cordon

    Fletcher-Cooke, Charles

    Alldritt, Walter

    Cary, Sir Robert

    Fortescue, Tim

    Astor, John

    Channon, H. P. G.

    Gibson-Watt, David

    Awdry, Daniel

    Chichester-Clark, R.

    Goodhart, Philip

    Beamish, Col. Sir Tufton

    Clegg, Walter

    Gower, Raymond

    Bell, Ronald

    Cunningham, Sir Knox

    Hall, John (Wycombe)

    Bessell, Peter

    Currie, G. B. H.

    Hamilton, Michael (Salisbury)

    Black, Sir Cyril

    Dalkeith, Earl of

    Harris, Frederic (Croydon, N.W.)

    Bossom, Sir Clive

    Davidson,James(Aberdeenshire, W.)

    Harvey, Sir Arthur Vere

    Boyle, Rt. Hn. Sir Edward

    d'Avigdor-Goldsmid, Sir Henry

    Hawkins, Paul

    Braddock, Mrs. E. M.

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

    Heald, Rt. Hn. Sir Lionel

    Brinton, Sir Tatton

    Dodds-Parker, Douglas

    Higgins, Terence L.

    Brooks, Edwin

    Dunn, James A.

    Hiley, Joseph

    Bruce-Gardyne, J.

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

    Hobson, Rt. Hn. Sir John

    Buchanan-Smith, Alick(Angus,N&M)

    Emery, Peter

    Hogg, Rt. Hn. Quintin

    Buck, Antony (Colchester)

    Eyre, Reginald

    Holland, Philip

    Bullus, Sir Eric

    Farr, John

    Hooson, Emlyn

    Hornby, Richard

    Munro-Lucas-Tooth, Sir Hugh

    Smith, John

    Hunt, John

    Nabarro, Sir Gerald

    Steel, David (Roxburgh)

    Irvine, Bryant Godman (Rye)

    Nicholls, Sir Harmar

    Stoddart-Scott, Col. Sir M. (Ripon)

    Jenkin, Patrick (Woodford)

    Noble, Rt. Hn. Michael

    Taylor, Sir Charles (Eastbourne)

    Jennings, J. C. (Burton)

    Nott, John

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

    Johnston, Russell (Inverness)

    Onslow, Cranley

    Taylor, Frank (Moss Side)

    Jopling, Michael

    Orr-Ewing, Sir Ian

    Temple, John M.

    Kaberry, Sir Donald

    Osborn, John (Hallam)

    Thatcher, Mrs. Margaret

    Kimball, Marcus

    Osborne, Sir Cyril (Louth)

    Thorpe, Rt. Hn. Jeremy

    King, Evelyn (Dorset, S.)

    Page, Graham (Crosby)

    Tifney, John

    Lancaster, Col. C. G.

    Page, John (Harrow, W.)

    Turton, Rt. Hn. R. H.

    Langford-Holt, Sir John

    Pearson, Sir Frank (Clitheroe)

    van Straubenzee, W. R.

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

    Peel, John

    Wainwright, Richard (Come Valley)

    Longden, Gilbert

    Percival, Ian

    Walters, Dennis

    Lubbock, Eric

    Peyton, John

    Ward, Dame Irene

    McAdden, Sir Stephen

    Pike, Miss Mervyn

    Weatherill, Bernard

    MacArthur, Ian

    Pink, R. Bonner

    Webster, David

    Macleod, Rt. Hn. lain

    Pounder, Rafton

    Wells, John (Maidstone)

    McMaster, Stanley

    Powell, Rt. Hn. J. Enoch

    Whitelaw, Rt. Hn. William

    Mawby, Ray

    Prior, J. M. L.

    Wills, Sir Gerald (Bridgwater)

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

    Pym, Francis

    Wilson, Geoffrey (Truro)

    Mills, Peter (Torrington)

    Ridley, Hn. Nicholas

    Winstanley, Dr. M. P.

    Mills, Stratton (Belfast, N.)

    Ridsdale, Julian

    Wolrige-Gordon, Patrick

    Miscampbell, Norman

    Rossi, Hugh (Hornsey)

    Wood, Rt. Hn. Richard

    Mitchell, David (Basingstoke)

    Russell, Sir Ronald

    Worsley, Marcus

    Monro, Hector

    Scott, Nicholas

    Montgomery, Fergus

    Sharples, Richard

    TELLERS FOR THE AYES:

    Morgan, Geraint (Denbigh)

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

    Mr. Jasper More and

    Morrison, Charles (Devizes)

    Sinclair, Sir George

    Mr. Anthony Grant.

    NOES

    Abee, Leo

    Eadie, Alex

    Macdonald, A. H.

    Allaun, Frank (Salford, E.)

    Edwards, Rt. Hn. Ness (Caerphilly)

    McGuire, Michael

    Anderson, Donald

    Ellis, John

    Mackenzie, Gregor (Rutherglen)

    Archer, Peter

    English, Michael

    Mackintosh, John P.

    Armstrong, Ernest

    Ennals, David

    Maclennan, Robert

    Ashley, Jack

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

    MacMillan, Malcolm (Western Isles)

    Atkins, Ronald (Preston, N.)

    Fernyhough, E.

    McNamara, J. Kevin

    Atkinson, Norman (Tottenham)

    Finch, Harold

    MacPherson, Malcolm

    Bacon, Rt. Hn. Alice

    Fitch, Alan (Wigan)

    Mahon, Peter (Preston, S.)

    Bagier, Gordon A. T.

    Fletcher, Raymond (Ilkeston)

    Mahon, Simon (Bootle)

    Barnett, Joel

    Foley, Maurice

    Mallalieu, E. L. (Brigg)

    Beaney, Alan

    Ford, Ben

    Manuel, Archie

    Benee, Cyril

    Forrester, John

    Mapp, Charles

    Benn, Rt. Hn. Anthony Wedgwood

    Freeson, Reginald

    Marquand, David

    Bennett, James (G'gow, Bridgeton)

    Gardner, Tony

    Marsh, Rt. Hn. Richard

    Binns, John

    Ginsburg, David

    Mason, Roy

    Bishop, E. S.

    Gourlay, Harry

    Maxwell, Robert

    Blackburn, F.

    Gray, Dr. Hugh (Yarmouth)

    Mendelson, J, J.

    Blenkinsop, Arthur

    Grey, Charles (Durham)

    Millan, Bruce

    Booth, Albert

    Griffiths, David (Rother Valley)

    Miller, Dr. M. S.

    Bowden, Rt. Hn. Herbert

    Griffiths, Rt. Hn. James (Llanelly)

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

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

    Hale, Leslie (Oldham, W.)

    Morgan, Elystan (Cardiganshire)

    Callaghan, Rt. Hn. James

    Hamilton, James (Bothwell)

    Morris, Charles R. (Openshaw)

    Cant, R. B.

    Hamilton, William (Fife, W.)

    Moyle, Roland

    Carmichael, Neil

    Hannan, William

    Neal, Harold

    Carter-Jones, Lewis

    Harrison, Walter (Wakefield)

    Newens, Stan

    Castle, Rt. Hn. Barbara

    Heffer, Eric S.

    Noel-Baker, Francis (Swindon)

    Chapman, Donald

    Henig, Stanley

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

    Coleman, Donald

    Hooley, Frank

    Norwood, Christopher

    Concannon, J. D.

    Houghton, Rt. Hn. Douglas

    Oakes, Gordon

    Conlan Bernard

    Howarth, Robert (Bolton, E.)

    Orbach, Maurice

    Craddock, George (Bradford, S.)

    Huckfield, L.

    Orme, Stanley

    Crawshaw, Richard

    Hughes, Emrys (Ayrshire, S.)

    Oswald, Thomas

    Crosland, Rt. Hn. Anthony

    Hynd, John

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

    Crossman, Rt. Hn. Richard

    Jenkins, Hugh (Putney)

    Palmer, Arthur

    Cullen, Mrs. Alice

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

    Panned, Rt. Hn. Charles

    Dalyell, Tam

    Jones, Dan (Burnley)

    Park, Trevor

    Davidson, Arthur (Accrington)

    Jones, J. Idwal (Wrexham)

    Parkyn, Brian (Bedford)

    Davies, Dr. Ernest (Stratford)

    Jones, T. Alec (Rhondda, West)

    Pearson, Arthur (Pontypridd)

    Davies, G. Elfed (Rhondda, E.)

    Kerr, Russell (Feltham)

    Pentland, Norman

    Davies, Ednyfed Hudson (Conway)

    Lawson, George

    Price, Thomas (Westhoughton)

    Davies, Ifor (Gower)

    Lee, John (Reading)

    Price, William (Rugby)

    Davies, S. O. (Merthyr)

    Lever, Harold (Cheetham)

    Rankin, John

    de Freitas, Rt. Hn, Sir Geoffrey

    Lewis, Arthur (W. Ham, N.)

    Rhodes, Geoffrey

    Delargy, Hugh

    Lipton, Marcus

    Roberts, Albert (Normanton)

    Dell, Edmund

    Lomas, Kenneth

    Robertson, John (Paisley)

    Dempsey, James

    Loughlin, Charles

    Rogers, George (Kensington, N.)

    Diamond, Rt. Hn. John

    Lyons, Edward (Bradford, E.)

    Ross, Rt. Hn. William

    Dickens, James

    Mahon, Dr. J. Dickson

    Rowlands, E. (Cardiff, N.)

    Dobson, Ray

    McBride, Neil

    Shaw, Arnold (Ilford, S.)

    Dunwoody, Mrs. Gwyneth (Exeter)

    MacColl, James

    Sheldon, Robert

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

    MacDermot, Niall

    Shore, Peter (Stepney)

    1786

    1787

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

    Thornton, Ernest

    Williams, Alan (Swansea, W.)

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

    Tinn, James

    Williams, Clifford (Abertillery)

    Silkin, Rt. Hn. John (Deptford)

    Tuck, Raphael

    Wilton, William (Coventry, S.)

    Silverman, Julius (Aston)

    Varley, Eric G.

    Winterbottom, R. E.

    Silverman, Sydney (Nelson)

    Wainwright Edwin (Dearne Valley)

    Woodburn, Rt. Hn. A.

    Stater, Joseph

    Walker, Harold (Doncaster)

    Woof, Robert

    Small, William

    Wallace, George

    Yates, Victor

    Snow, Julian

    Watkins, Tudor (Brecon & Radnor)

    Steele, Thomas (Dunbartonshire, W.)

    Wellbeloved, James

    TELLERS FOR THE NOES:

    Swain, Thomas

    Whitlock, William

    Mr. Joseph Harper and

    Mr. Brian O'Malley.

    New Clause.—(TAX RELIEF FOR REGULAR SAVINGS OR INSURANCE SCHEMES.)
    Tax relief at the same rates as apply to life assurance policies shall be available to all persons who make regular payments to any form of contractual insurance or savings scheme.—[Mr. Holland.]
    Brought up, and read the First time.
    Motion made, and Question put, That the Clause be read a Second time:—
    The Committee divided: Ayes 135, Noes 192.

    Division No. 379.]

    AYES

    [6.20 p.m.

    Alison, Michael (Barkston Ash)

    Hotson, Rt. Hn. Sir John

    Pearson, Sir Frank (Clitheroe)

    Allason, James (Hemel Hempstead)

    Hogg, Rt. Hn. Quintin

    Peel, John

    Astor, John

    Holland, Philip

    Percival, Ian

    Awdry, Daniel

    Hooson, Emlyn

    Peyton, John

    Beamish, Col. Sir Tufton

    Hornby, Richard

    Pike, Miss Mervyn

    Bell, Ronald

    Hunt, John

    Pink, R. Bonner

    Bessell, Peter

    Irvine, Bryant Godman (Rye)

    Pounder, Rafton

    Black, Sir Cyril

    Jenkin, Patrick (Woodford)

    Powell, Rt. Hn. J. Enoch

    Bossom, Sir Clive

    Jennings, J. C. (Burton)

    Prior, J. M. L.

    Boyle, Rt. Hn. Sir Edward

    Johnston, Rusself (Inverness)

    Pym, Francis

    Brinton, Sir Tatton

    Jopling, Michael

    Ridley, Rt. Hn. Nicholas

    Bruce-Gardyne, J.

    Kaberry, Sir Donald

    Ridsdale, Julian

    Buchanan-Smith, Alick(Angus,N&M)

    Kershaw, Anthony

    Rossi, Hugh (Hornsey)

    Buck, Antony (Colchester)

    Kimball, Marcus

    Russell, Sir Ronald

    Bullus, Sir Eric

    King, Evelyn (Dorset, S.)

    Scott, Nicholas

    Burden, F. A.

    Lancaster, Col. C. G.

    Sharpies, Richard

    Campbell, Gordon

    Langford-Holt, Sir John

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

    Cary, Sir Robert

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

    Sinclair, Sir George

    Channon, H. P. G.

    Longden, Gilbert

    Smith, John

    Chichester-Clark, R.

    Lubbock, Eric

    Steel, David (Roxburgh)

    Clegg, Walter

    McAdden, Sir Stephen

    Stoddart-Scott, Col. Sir M. (Ripon)

    Cunningham, Sir Knox

    MacArthur, Ian

    Taylor, Sir Charles (Eastbourne)

    Currie, G. B. H.

    Macleod, Rt. Hn. Iain

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

    Dalkeith, Earl of

    McMaster, Stanley

    Taylor, Frank (Moss Side)

    Davidson, James (Aberdeenshire, W.)

    Mawby, Ray

    Temple, John M.

    d'Avigdor-Goldsmid, Sir Henry

    Maxwell-Hyslop, R. J.

    Thatcher, Mrs. Margaret

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

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

    Thorpe, Rt. Hn. Jeremy

    Dodds-Parker, Douglas

    Mills, Peter (Torrington)

    Tilney, John

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

    Mills, Stratum (Belfast, N.)

    Turton, Rt. Hn. R. H.

    Emery, Peter

    Miscampbell, Norman

    van Straubenzee, W. R.

    Eyre, Reginald

    Mitchell, David (Basingstoke)

    Wainwright, Richard (Colne Valley)

    Farr, John

    Monro, Hector

    Walters, Dennis

    Fisher, Nigel

    Montgomery, Fergus

    Ward, Dame Irene

    Fletcher-Cooke, Charles

    Morgan, Geraint (Denbigh)

    Weatherill, Bernard

    Fortescue, Tim

    Morrison, Charles (Devizes)

    Webster, David

    Gibson-Watt, David

    Munro-Lucas-Tooth, Sir Hugh

    Wells, John (Maidstone)

    Goodhart, Philip

    Nabarro, Sir Gerald

    Whitelaw, Rt. Hn. William

    Gower, Raymond

    Nicholls, Sir Harmar

    Wills, Sir Gerald (Bridgwater)

    Hall, John (Wycombe)

    Noble, Rt. Hn. Michael

    Wilson, Geoffrey (Truro)

    Hamilton, Michael (Salisbury)

    Nott, John

    Winstanley, Dr. M. P.

    Harris, Frederic (Croydon, N.W.)

    Onslow, Cranley

    Wolrige-Gordon, Patrick

    Harvey, Sir Arthur Vere

    Orr-Ewing, Sir Ian

    Wood, Rt. Hn. Richard

    Hawkins, Paul

    Osborn, John (Hallam)

    Worsley, Marcus

    Heald, Rt. Hn. Sir Lionel

    Osborne, Sir Cyril (Louth)

    Higgins, Terence L.

    Page, Graham (Crosby)

    TELLERS FOR THE AYES:

    Hiley, Joseph

    Page, John (Harrow, W.)

    Mr. Jasper More and

    Mr. Anthony Grant.

    NOES

    Abse, Leo

    Bacon, Rt. Hn. Alice

    Bishop, E. S.

    Allaun, Frank (Salford, E.)

    Bagier, Gordon A. T.

    Blackburn, F.

    Alldritt, Walter

    Barnett, Joel

    Blenkinsop, Arthur

    Anderson, Donald

    Beaney, Alan

    Boardman, H.

    Archer, Peter

    Bence, Cyril

    Booth, Albert

    Ashley, Jack

    Benn, Rt. Hn. Anthony Wedgwood

    Bowden, Rt. Hn. Herbert

    Atkins, Ronald (Preston, N.)

    Bennett, James (G'gow, Bridgeton)

    Braddock, Mrs. E. M.

    Atkinson, Norman (Tottenham)

    Binns, John

    Brooks, Edwin

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

    Hannan, William

    Norwood, Christopher

    Callaghan, Rt. Hn. James

    Harrison, Walter (Wakefield)

    Oakes, Cordon

    Cant, R. B.

    Heffer, Eric S.

    Ogden, Eric

    Carmichael, Nell

    Henig, Stanley

    O'Malley, Brian

    Carter-Jones, Lewis

    Hooley, Frank

    Orbach, Maurice

    Castle, Rt. Hn. Barbara

    Houghton, Rt. Hn. Douglas

    Orme, Stanley

    Chapman, Donald

    Howarth, Robert (Bolton, E.)

    Oswald, Thomas

    Coleman, Donald

    Hoy, James

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

    Concannon, J. D.

    Huckfield, L.

    Palmer, Arthur

    Conlan, Bernard

    Hughes, Emrys (Ayrshire, S.)

    Panned, Rt. Hn. Charles

    Craddock, George (Bradford, S.)

    Hynd, John

    Park, Trevor

    Crawshaw, Richard

    Jenkins, Hugh (Putney)

    Parkyn, Brian (Bedford)

    Crosland, Rt. Hn. Anthony

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

    Pearson, Arthur (Pontypridd)

    Crossman, Rt. Hn. Richard

    Jones, Dan (Burnley)

    Pentland, Norman

    Cullen, Mrs. Alice

    Jones, J. Idwal (Wrexham)

    Price, Thomas (Westhoughton)

    Dalyell, Tam

    Jones, T. Alec (Rhondda, West)

    Price, William (Rugby)

    Davidson, Arthur (Accrington)

    Kelley, Richard

    Rankin, John

    Davies, Dr. Ernest (Stretford)

    Kerr, Russell (Feltham)

    Rhodes, Geoffrey

    Davies, G. Elfed (Rhondda, E.)

    Lawson, George

    Roberts, Albert (Normanton)

    Davies, Ednyfed Hudson (Conway)

    Lee, John (Reading)

    Robertson, John (Paisley)

    Davies, I for (Cower)

    Lever, Harold (Cheetham)

    Rogers, George (Kensington, N.)

    Davies, S. O. (Merthyr)

    Lewis, Arthur (W. Ham, N.)

    Ross, Rt. Hn. William

    de Freitas, Rt. Hn. Sir Geoffrey

    Lomas, Kenneth

    Rowlands, E. (Cardiff, N.)

    Delargy, Hugh

    Loughlin, Charles

    Shaw, Arnold (Ilford, S.)

    Dell, Edmund

    Lyons, Edward (Bradford, E.)

    Sheldon, Robert

    Dempsey, James

    Mabon, Dr. J. Dickson

    Shore, Peter (Stepney)

    Diamond, Rt. Hn. John

    McBride, Neil

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

    Dickens, James

    MacColl, James

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

    Dobson, Ray

    MacDermot, Niall

    Silkin, Rt. Hn. John (Deptford)

    Doig, Peter

    Macdonald, A. H.

    Silverman, Sydney (Nelson)

    Dunn, James A.

    McGuire, Michael

    Stater, Joseph

    Dunwoody, Mrs, Gwyneth (Exeter)

    Mackenzie, Gregor (Rutherglen)

    Small, William

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

    Mackie, John

    Snow, Julian

    Eadie, Alex

    Mackintosh, John P.

    Steele, Thomas (Dunbartonshire, W.)

    Edwards, Rt. Hn. Ness (Caerphilly)

    Maclennan, Robert

    Swain, Thomas

    Ellis, John

    MacMillan, Malcolm (Western Isles)

    Symonds, J. B.

    English, Michael

    McNamara, J. Kevin

    Thornton, Ernest

    Ennals, David

    MacPherson, Malcolm

    Tinn, James

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

    Mahon, Peter (Preston, S.)

    Tuck, Raphael

    Fernyhough, E.

    Mahon, Simon (Bootle)

    Varley, Eric G.

    Finch, Harold

    Mallalieu, E. L. (Brigg)

    Wainwright Edwin (Dearne Valley)

    Fitch, Alan (Wigan)

    Manuel, Archie

    Walker, Harold (Doncaster)

    Fletcher, Raymond (Ilkeston)

    Mapp, Charles

    Wallace, George

    Foley, Maurice

    Marquand, David

    Watkins, Tudor (Brecon & Radnor)

    Ford, Ben

    Marsh, Rt. Hn. Richard

    Wellbeloved, James

    Forrester, John

    Mason, Roy

    Whitlock, William

    Freeson, Reginald

    Maxwell, Robert

    Williams, Alan (Swansea, W.)

    Gardner, Tony

    Mendelson, J. J.

    Williams, Clifford (Abertillery)

    Ginsburg, David

    Millan, Bruce

    Wilson, William (Coventry, S.)

    Gourlay, Harry

    Miller, Dr. M. S.

    Winterbottom, R. E.

    Gray, Dr. Hugh (Yarmouth)

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

    Woodburn, Rt. Hn. A.

    Grey, Charles (Durham)

    Morgan, Elystan (Cardiganshire)

    Woof, Robert

    Griffiths, David (Rother Valley)

    Morris, Charles R. (Openthaw)

    Yates, Victor

    Griffiths, Rt. Hn. James (Llanelly)

    Moyie, Roland

    Hale, Leslie (Oldham, W.)

    Neal, Harold

    TELLERS FOR THE NOES:

    Hamilton, James (Bothwell)

    Newens, Stan

    Mr. Joseph Harper and

    Hamilton, William (Fife, W.)

    Noel-Baker, Francis (Swindon)

    Mr. Ernest Armstrong.

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

    New Clause 55.—(FEES FOR ASSISTANCE IN COMPLETING TAX RETURNS COMPLYING WITH NOTICES.)
    (1) Any expense not exceeding £40 which is incurred by an individual in respect of professional assistance in or incidental to preparing his return of income and statement of capital gains and claim for allowances in any year of assessment shall be deducted from or set off against his income for that year.
    (2) A deduction as provided in subsection (1) shall also be allowed in respect of professional assistance in complying with notices under the Income Tax Acts, and any enactment relating to the Capital Gains Tax:
    Provided that, if such notice in respect of information relating to the liability of some person other than the person on whom the notice is served, the deduction shall operate in respect of the income for the next follow-
    1790
    ing year of assessment of the person on whom the notice is served.
    (3) For the purposes of this section—

    (a) 'professional assistance' means assistance provided by a solicitor, a member of an incorporated society of accountants, a bank, a stockbroker or a member of such professional body as the Commissioners of Inland Revenue shall certify as qualifying under this section; and

    (b) 'individual' shall include the trustees and personal representatives of an individual.

    (4) This section shall not apply in computing the total income of any individual for the purposes of surtax.—[Mr. John Hall.]
    Brought up, and read the First time.
    Mr. John Hall: I beg to move, That the Clause be read a Second time.

    1791
    I hope that I am right in thinking that the countenance of the Chief Secretary, who is to reply, means that he has spent a happy weekend basking in the sun and is, therefore, receptive. Although few proposals to reduce taxation have merit in the eyes of the Treasury Bench, this one has virtues which should appeal. It is modest, it does not apply in computing income for Surtax—that should appeal to hon. Members opposite—it insists that assistance for which a charge may be made must be provided by recognised professional advisers. Documentary evidence will have to be produced, of course, before the allowances are granted.
    The present law does not allow professional assistance in computing Income Tax returns either to the individual or to the trading concern, but things are different in practice. Whereas the full rigours of the law apply to the individual, for expediency or administrative convenience the Inland Revenue does not apply it to those who return their tax forms under Schedule D or Schedule A.
    The Royal Commission on the Taxation of Profits and Income put this quite simply. I am quoting only the relevant part and am not being selective. In paragraph 928, it said:
    "… in practice the costs of preparing tax returns are allowed in an assessment of business profits under Schedule D: not directly as tax returns, but indirectly, because the ordinary costs of getting out the accounts are regarded as chargeable in a computation of business profits and these costs are not dissected in order to arrive at the separate cost of converting these accounts into tax returns. Again, when income is computed under Schedule A, the expense of preparing a maintenance claim is allowed as part of the claim itself…"
    That was in a Report published in 1955. Then the arguments against this allowance, which appear on the face of it to constitute an obvious injustice, were said to be justified by the Royal Commission in recommending that there should be no change in the practice.
    6.30 p.m.
    The Report went on to say:
    "Thus there is no definite principle, but there is a lack of consistency in practice … It seemed to us probable that, even without conscious design, the existing allowances fell where they were most needed, in the sense that the business account and the maintenance
    1792
    claim are the most onerous to prepare privately and the most likely to require professional assistance in their preparation; and the arguments against a general allowance appeared, on balance, to justify the present position."
    The argument against the general allowance appeared to the Royal Commission only
    "on balance to justify the present position".
    This was before a Socialist Chancellor of the Exchequer created chaos and confusion in a fiscal system which increased the risk of coronaries and duodenal ulcers in the accountancy and legal professions. It would seem that it will not be long before they join Members of Parliament and other high-risk professions in asking for danger money.
    Mr. J. T. Price: Whatever the merits of the argument might be, the hon. Member has quoted a Report of 1955. Many of us are familiar with the argument, but he and his political friends were in full control of the Treasury in 1955. If they thought there was injustice then, why did they not take the necessary action? Why does the hon. Member shed crocodile tears over this in 1967?
    Mr. Hall: The hon. Member should have waited until I had developed my argument. Much has happened during the 12 years since that Report was issued. If that Commission were examining the position against the background of our present fiscal situation, I am sure that it would agree that the balance should be tilted the other way, in favour of granting a general allowance.
    For the individual taxpayer, the main difficulty arises over capital gains. Many people find the whole of the tax return incomprehensible. It is a common experience of men and women, particularly women, who are outstanding in their particular professions. They suffer a form of mental paralysis when they are faced with the necessity of completing the return. Many taxpayers are quite unaware of their full entitlement to allowances and reliefs. There were Members of Parliament who were unaware of their rights in this respect, but we have been deeply indebted to my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) for drawing our attention to the many allowances which we are entitled to claim.

    1793
    The Income Taxpayers' Association pointed out in a recent Report that
    "Many people find these forms quite incomprehensible and have to pay for assistance to complete them correctly."
    I understand that the Association, at its annual general meeting yesterday, considered a motion which demanded an allowance of £40, rather on the lines of this new Clause.
    In the computation of capital gains, the taxpayer finds himself at the greatest loss if he is not properly professionally advised. I am sure that the Chief Secretary, remembering his previous incarnation, would not disagree about that. An instance which immediately springs to mind is one to which I drew attention in Amendment No. 183, earlier in our proceedings, relating to the two alternative methods of calculating capital gains made on realisation of assets acquired before 6th April, 1965, and which asked for certain considerations to be taken into account. That Amendment was rejected. It is, therefore, all the more essential that any taxpayer faced with the necessity of choosing one of the alternatives should be fully, and properly professionally advised.
    I also drew attention last year—not in moving the Second Reading of a Clause of this kind, but in dealing with capital gains in general—to the kind of case which can cause a great deal of trouble and difficulty when a computation has to be worked out. As reported in column 808 of the OFFICIAL REPORT for 22nd June, 1966, I quoted an example of the sort of transaction which might be quite normal involving about 14 transactions of acquisition or disposal of shares.
    The example I quoted had been used by a lecturer in attempting to explain to a number of professional people the intricacies of the tax. I pointed out that it took him an hour and 20 minutes, with the use of a blackboard, to explain one case in the computation and the actual gain was £317 over a period of 10 years. There are many cases of this kind which create great difficulty for the individual taxpayer who tries to do this work without the professional advice of an accountant or similar adviser.
    In calculating the cost of acquisition or disposal for the purpose of capital
    1794
    gains, some expenses are allowed. Fees paid to surveyors, valuers, auctioneers and even accountants and legal advisers wholly and exclusively incurred for the acquisition or disposal of the assets are allowed, as are the fees paid to the accountants which relate to the valuation or opportionment of disposal of securities, but they are not allowed for fees for the normal calculation of gains or losses. This means that whether or not the total fee charged by an accountant is allowable for tax depends on the flexibility with which the accountant interprets the provision. No doubt in many cases the part allowable is absorbed by the part which is not legally allowable.
    I do not wish to take up the time of the Committee in developing this at great length, for I believe that the problem is well known. Nor do I insist that the wording of the Clause. We are debating the principle of the Clause. If it had to be amended in any way which gave the same result I would be happy to accept such amendment. The present position has always been unsatisfactory. It has now become unjust. It favours one class of taxpayer against another. It invites evasion and is a source of continuing irritation. If the arguments were finely balanced 12 years ago—and the Royal Commission said that it was only on balance that it recommended against giving a general allowance—now, with the changes which have taken place in that period, the hand of justice should tilt the scales in favour of the taxpayer.
    I feel certain that in recommending this Clause to the Committee I shall have the professional sympathy of the Chief Secretary, although whether I shall have his sympathy in his capacity as a Treasury Minister I am not absolutely certain. I can only pray for the best.
    Mr. Barnett: The hon. Member for Wycombe (Mr. John Hall) expressed concern for accountants. I must declare my interest as an accountant, as the senior partner in a practice. Of course, I have the dual capacity which the hon. Gentleman was worried about in that I am also a Member of Parliament, so I suppose that I have something to worry about in that sense. As last year, I am, broadly, in favour of the idea behind the new Clause, although I am worried about the practical effects, knowing as I do how many returns

    1795
    are piled up and awaiting completion in my office at the moment.
    I support the idea on the ground of equity between those paying tax on P.A.Y.E. and those paying tax under Schedule D. Last year, my right hon. Friend the Chief Secretary said that the hon. Member for Oswestry (Mr. Biffen) was nearly on a good point on the ground of equity. I suggest that my right hon. Friend was nearly on a good point, but not quite, in his reply. He gave three answers to the argument of the hon. Member for Oswestry.
    Replying to the argument that accountants' fees for the preparation of accounts and tax computations should be allowable, his three answers were that it was not the case in law, that it was not universally the case in practice, and, where it was the case in practice, it was only because of the impossibility of segregating out. I should like to deal with those three answers and with my right hon. Friend's reasons for not being able to accept the proposal on the ground of equity.
    It is true that making no distinction is not universal, but that is stretching the argument, because there is no distinction in 99 per cent. of the cases and it is only in a very minute number—for example, when an accountant is dealing with back duty there is clearly an expense in relation to the back duty, where there is clearly a tax problem—when it is easy to say that an aspect of the charge is not related to accountancy matters and that it is possible to say that there is a distinction. But in almost all other cases the whole of the charge is allowed.
    On the question of law, last year I felt that to some extent my right hon. Friend was annunciating a new doctrine. The accountant's charge is allowed under Section 137 of the Income Tax Act, 1952, because with a Schedule D expense it is wholly and exclusively incurred for the purposes of trade. On the other hand, last year my right hon. Friend gave the distinction as being, on the one hand, computing business accounts and, on the other, computing for tax purposes.
    This seems to be a rather different situation, because it would be difficult to argue that many thousands of small payers would go to the trouble of having accounts prepared at all were it not for tax purposes. I hasten to add that I am not sug-
    1796
    gesting that the charge should not be allowed, but we are here discussing equity and there can be little doubt that the only reason why hundreds of thousands of people in small businesses have accounts prepared is for tax purposes. It is, therefore, difficult to argue that the whole of the charge should be allowed for computing business accounts, because that does not seem to comply with Section 137 of the Income Tax Act.
    On the other hand, it could be argued, at least to some extent and probably with greater force, that the preparation of Income Tax returns and the calculation of tax was essential to an individual in the actual earning of his income. It could be argued that a man would or would not work overtime, or would work normally, if he knew the extent of his liability. It can be argued that it is at least as equitable to allow the expense to that sort of individual as to the Schedule D taxpayer who pays the charge only for tax purposes.
    6.45 p.m.
    The hon. Member for Wycombe referred to capital gains. I want to quote from an article mentioned earlier today in another context, the article which appeared in the Sunday Times of last Sunday, and in which the ignorance of the hon. Member for Worcestershire, South (Sir G. Nabarro) was exposed. Referring to the alternative method of calculating capital gains, the writer said:
    "It also suggests that every investor should take a close look at his individual tax position before deciding to cash in on a hefty capital gain."
    If a taxpayer is entitled to know what his tax position is—and that is relevant to deciding the gain—that is an expense directly attributable to the earning of the income and to what extent, even if the word "necessarily" is excluded, as it is for Schedule D purposes, it is an indication that there is a considerable amount of equity in allowing the charge.
    The other argument of my right hon. Friend last year was that it was impossible to segregate out the private element. He must know that, in practice and generally, segregating out an expense and deciding which is business and which is not business is generally, if not always, a compromise, a proportion, because it is impossible to segregate out.
    This applies to motor car expenses, for example. One argues with the inspector

    1797
    about how many hundreds of miles are run for private purposes between the home and the business and how many for business purposes, but in the end there is a compromise between the accountant and the inspector as to whether it should be one-seventh, or one-tenth, or one- twelfth, or whatever proportion can be agreed as that which should be segregated out. This is because it is recognised that it is not possible to say with certainty what part should be segregated out.
    Indeed, hon. Members are now having similar problems with the Revenue, which suggests that part of the expense of having a flat in London, for example, should be segregated out as being for private benefit. In that instance it is a little difficult to be precise about what the proportion should be. I hope that the Revenue will agree that no part should be segregated out.
    Clearly, my right hon. Friend's argument about segregating out does not hold water. In every case where there is an item in a profit and loss account about which there is some dispute, there has to be a compromise, because it is not possible to be precise about the amount which ought to be segregated out, and it seems to me that some element of this expense should be allowable.
    It may be equitable to concede 50 per cent. of the charge of an accountant for doing an Income Tax return and to allow that as a general concession if my right hon. Friend is not prepared to go the whole way. This would help to meet the case on equity grounds, which my right hon. Friend last year conceded to be the point nearest to being accurate and which I have shown that he did not answer.
    On the ground of equity it seems wrong that many millions of taxpayers paying tax under P.A.Y.E. should have this inhibiting word "necessarily" included in the rule, which means that they are not allowed to charge for accountants' fees—not, I hope, that they are likely to come rushing to accountants if this concession is made, but at least it would bring home to them the advantages which might accrue.
    For example, ordinary taxpayers could benefit from joining in tax avoidance. Many thousands who are claiming depen-
    1798
    dent relative relief do not realise that they would be very much better off if they dropped their claim for dependent relative relief and paid their dependent relatives under covenant. This is only one small example, but there are many others where, at least on grounds of equity, the pay-as-you-earn taxpayer is entitled to the right sort of advice so that he does not pay more tax than he should under the law as it stands.
    On the ground of equity, therefore, I hope that my right hon. Friend will be inclined if not to accept the Clause at least to go some way towards making a concession.
    Mr. Daniel Awdry: I was hoping that the hon. Member for Heywood and Royton (Mr. Barnett) would give us a few more interesting ways by which we could improve our tax position. I am sorry that he stopped when he did.
    I feel very strongly about the Clause. This debate is, in effect, a rehearing of the debate last year, and I assume that all of us who are taking an interest today have read and studied the thoroughly unsympathetic reply which the Chief Secretary gave on that occasion. The right hon. Gentleman will not need reminding, but I shall remind him nevertheless, of what he said:
    "The short answer is that on his three grounds, the hon. Gentleman "—
    this was my hon. Friend the Member for Oswestry (Mr. Biffen)—
    "does not make his case. But the overwhelming point is the one to which the Royal Commission on the Taxation of Profits and Income drew attention, and that is the real argument of principle to which, in his speech, the hon. Gentleman did not turn his mind ".—[OFFICIAL REPORT, 4th July, 1966; Vol. 731, c. 144–5.]
    That argument has been completely demolished by my hon. Friend the Member for Wycombe (Mr. John Hall) today.
    The Report of the Royal Commission in paragraph 929 is quite clear:
    "Thus there is no definite principle, but there is a lack of consistency in practice",
    and it goes on in these important words, which have been quoted already:
    "It seemed to us probable that, even without conscious design, the existing allowances fell where they were most needed, in the sense that the business account and the maintenance claim are the most onerous to prepare privately and the most likely to require professional assistance in their preparation".

    1799
    I ask the Committee to note the difference here. The Chief Secretary talked about the "real argument of principle", calling in aid the Royal Commission, which said that "there is no definite principle". Of course, there is no principle. We all know that. It is a matter of judgment, and I hope that, in his reply today, the right hon. Gentleman will talk no more about the question of principle.
    The Royal Commission said that allowances should be given where claims are onerous and likely to require professional assistance. We all know what the truth of the matter is. I am a solicitor, not an accountant, but I can speak from personal experience, as well. Many people find it impossibly difficult to fill in their tax forms today. A great number go to accountants, and on difficult claims they are well advised to do so, but on fairly simple cases, where there is not much tax law, perhaps, a solicitor can give the answer.
    I know from experience as a country solicitor that many of these people have very small incomes. I should not have spoken in the debate today had not a widow come to see me last week about her Income Tax return. Her income was about £750 a year—that is all—but her husband had invested his money in many different stocks and shares, all in separate small parcels. That was rather unwise, perhaps. He might have done better to go to a building society, but that is what he did, wanting to spread his investments round about.
    In the past, this lady had been able to fill in her Income Tax return, but by now she was nearing a nervous breakdown because of the present complications introduced by the Capital Gains Tax. All the details of the investments had to be given, with the prices at which they were purchased and sold, and so on. Unless one has an office, or one has a trained business mind, it is almost impossible to deal with Income Tax returns of this sort, so firms like mine and many others willingly get down to the job of trying to help these ladies and others in like straits.
    I remind the Chief Secretary of another remark he made in his unfortunate speech last year:
    "As everybody knows, with the Capital Gains Tax the real difficulties are in finding out past history, what happened to particular
    1800
    shares which changed their form and had various rights issues, bonus issues, and so on."
    I agree.
    "The only way of preventing such trouble arising in the future is to have a full return so that all the information is available, and life will be a good deal easier in the future." —[OFFICIAL REPORT, 4th July, 1966; Vol. 731, c. 141.]
    Life will be easier in the future for the Revenue and everyone else if this work is done properly and efficiently. I am certain that the Revenue will be glad if it is done properly and by professional people. There is enormous waste of time by busy Revenue officials in dealing with badly completed forms prepared by individuals who have tried their best and have not been able to afford proper professional assistance. The officials of the Revenue are very willing to see people and try to help with their returns. But think of the time wasted at these interviews when people have completed their forms wrongly. All that time and trouble could be saved if the forms were properly presented by a solicitor or accountant.
    The new Clause would produce that result and would be an absolutely fair provision. It would not cost the Government much. Perhaps the right hon. Gentleman will give us the figure. On balance, it would show a profit, because of all the time now wasted which it would save.
    I hope that the right hon. Gentleman will move away from the question of principle, put that on one side and realise that times have changed a little since 1955 when the Report of the Royal Commission was published. Let him now accept the argument which is put, with support from both sides, that justice would be done by a more sympathetic approach on this occasion.
    Mr. Frederic Harris: Many of us have battled on this policy for many a year. After the excellent speech of my hon. Friend the Member for Wycombe (Mr. John Hall) setting the matter out in detail, there is little to add. Nevertheless, we must constantly put on record our support for the policy enshrined in the new Clause. It would be only just, and it ought to be taken to its logical conclusion.
    Understandably and, perhaps, unavoidably, the hon. Member for Heywood and

    1801
    Royton (Mr. Barnett), with his professional knowledge and experience, expressed himself as in favour of the principle of the Clause. I wondered how he would get out of voting with us when it came to the Division. Then he put out the idea of an equitable solution on the basis of allowing 50 per cent. of the charge instead of 100 per cent. I do not know how he can, in honesty, with his professional experience, advocate only 50 per cent. of his bills to his personal clients being allowed when he knows that for companies the full charge is generally allowed. However, I assume that he will sort that out in his mind somehow.
    Presumably, each one of us has something of an interest to disclose, apart from a professional interest like that of the hon. Member for Heywood and Royton. If the Clause were carried, a good many Members of Parliament would in due course, and quite rightly, benefit from it. Like my hon. Friend the Member for Chippenham (Mr. Awdry), we are constantly bombarded by constituents who are, understandably, desperately worried in trying to make their tax returns. Even the most simple return is a complicated business nowadays, and the problems have been aggravated enormously by the Capital Gains Tax, which is worrying everyone a great deal.
    7.0 p.m.
    A constituent, a coalman, came to see me the other day, and after about 20 minutes I had not found out what he wanted to ask me. He said, "I do not want to pay my Income Tax", and I replied, "That makes two of us." After a time I found that he had made himself such a nuisance to the local tax inspector in my district that the inspector had told him, "Go and see your Member of Parliament, and he will do something about Income Tax generally."
    That is humourous, but we all receive numerous representations by constituents who find the situation very complicated. The answer is simplification of taxation generally. Large numbers of us have advocated such a policy for a long time, but regrettably tax returning and the whole system of taxation have become ever more complicated—certainly very much so in the past two or three years, with the new taxes that have been brought
    1802
    to bear, such as the Capital Gains Tax. They add considerably to the problem and highlight the need for the Government to agree to the principle again advocated in the Clause.
    The difficulty of accuracy of returns was mentioned by my hon. Friend the Member for Wycombe (Mr. John Hall). It is absolutely true that people cannot be sure that they are returning their incomes correctly and have not slipped up in some way. Yet they are rather loath to turn to the accountancy profession and incur the charges which must understandably be levied. If they did turn to it in a bigger way, I wonder whether the profession as it is today could undertake the work. The tax officials frankly cannot cope, even though out of 45,000 additional civil servants a large number has gone on the Inland Revenue side.
    I am sure that the accountancy profession equally would find it increasingly difficult, because I gather that most of its members are under extreme pressure. Yet, in fairness, the help needs to be given. As one or two hon. Members have already said, the charges are allowed in calculation against company profits. If they are allowed against company profits they should be allowed against personal tax returns, particularly when those returns have become so complicated.
    We do not want a half basis such as the hon. Member for Heywood and Royton mentioned. That is a most unfair suggestion. Either we go for the whole thing or we do not go for it at all. I do not see how we can do it on a half basis.
    Finally, I wish to say very much in support of the principle of the Clause that many people literally do not know the allowances they are entitled to claim. My hon. Friend the Member for Worcestershire, South (Sir G, Nabarro) has constantly put that point to the House of Commons, not so much in regard to M.P.s' returns as to the public as a whole. He has highlighted time and time again the fact that people are paying taxation that they should not pay.
    There is no doubt that the Inland Revenue is quite innocently getting away with a tremendous taxation income to which it is not entitled. Surely it should be prepared to make it possible for people in their private circumstances to

    1803
    make accurate tax returns and give them a chance to make sure that they have not missed anything which they are entitled to claim? In this way the Inland Revenue's officials would be helped because they do not want inaccuracies, unfairness and injustice.
    Sometimes there are suggestions that it is wrong genuinely to avoid tax that one should not have to pay. Why? People should only pay tax which the law states that they must pay. They should not, by inaccuracies and mistakes, pay money that they do not have to pay. I cannot understand that argument being constantly brought out, as if there were something heinous and wrong in making statements about not paying tax that one must not genuinely pay.
    We well recall the Chief Secretary's speech last year, but we hope that he will be prepared to go along with the principle of the Clause. I concede, as did my hon. Friend the Member for Wycombe, that it may not be absolutely desirable in every way. The £40 limit may be unfair in some respects. On the other hand, if the principle is agreed the tidying up can be done later. We therefore hope that the Chief Secretary will consider the principle fairly and answer accordingly.
    Sir G. Nabarro: This Clause, or something very like it, has been moved, if selected, during the Committee and Report stages of Finance Bills for at least the past 17 years. It is a hardy annual. I suppose that the average is every other year.
    But this year my right hon. and hon. Friends have so phrased the Clause as to bring it up to date and put it fairly into contemporary fiscal conditions, including the Capital Gains Tax. Although I shall vote for the Clause, I particularly dislike subsection (4). I never believe in excluding Surtax payers from any benefit, however small. It is true that the Inland Revenue's answer would be that if a Surtax payer's liability to Income Tax is computed and his gross income assessed then the assessment of Surtax after the Income Tax figures have been struck is a 10-second operation. I therefore regret the exclusion of any tiny benefit for Surtax payers in this context as morally wrong and indefensible. I am for the Surtax payers.
    1804
    But having said that, I want to allude to a reference made by my hon. Friends the Members for Wycombe (Mr. John Hall) and Croydon, North-West (Mr. Frederic Harris) about the whole philosophy of avoiding tax payments legitimately. The incidents to which they both referred occurred due to a kindly Labour Member then seated on this side of the Committee intervening sotto voce in a speech of mine when I was attacking the then Tory Government for continuing Schedule A for owner-occupiers of houses.
    I said, not in any boastful sense, but in a factual sense, that I never paid a penny in Schedule A, and the kindly Labour Member—I think that it was the hon. Member for Westhoughton (Mr. J. T. Price)—intervened. It is seven or eight years ago, and I have not the exact reference. He said, "How do you fiddle it, Gerald?"
    I dropped my notes on the spot and went to work on him. I told the then Committee on the Finance Bill exactly how not to pay Schedule A Income Tax —and how quite legitimately not to pay it. But it was a tortuous business. During the years that followed hundreds of thousands of additional maintenance claims were put in to the tax inspectors all over the country, and the real reason why a Tory Chancellor cancelled Schedule A three years later was that the tax inspectors were sinking under the load of the additional maintenance claims that the hon. Gentleman's chance remark, "How do you fiddle it, Gerald?". promoted.
    Mr. J. T. Price: I am very much obliged to the hon. Gentleman for giving way. As he has been good enough to refer to me in his speech, and to get the record complete, I should like him to remember that the following year I had the honour of moving from the benches opposite a suitable Amendment to abolish Schedule A. I did it much against the wishes of some of my hon. Friends. Therefore, it is on the record that I supported the abolition of Schedule A, which, in my opinion, unfairly affected a great many owner-occupiers.
    Sir G. Nabarro: I am grateful to the hon. Gentleman. I had intended to refer to Schedule A only in passing. It was an extremely complicated exercise for the

    1805
    ordinary owner-occupier of a small house to compile correctly a maintenance claim under Income Tax, Schedule A.
    That is a clear illustration of what happens when the popular fancy is taken as to what can be achieved by way of taxation relief if taxpayers are fully appraised as to the benefits that they can secure. Year after year the Treasury has resisted this type of proposition, for one reason. I put it fairly and squarely to the Chief Secretary. The reason why he resisted this proposition last year was simply that, if chartered accountants—he is a luminary of that profession—prepared a much larger number of taxpayers' returns for the Revenue, much larger benefits would thereby be secured by the taxpayers and overall, in the aggregation, there would be a substantial loss of revenue to the Treasury. That is why the Chancellor of the Exchequer resists this proposition and this type of new Clause year after year.
    A chartered accountant preparing a taxpayer's papers will generally save him substantial sums of money. Every year I secure a reclamation of Income Tax and Surtax which I could not do for myself. I do not know enough about the taxation law to do it for myself. I can no longer compile my own tax papers. The hon. Member for Ashton-under-Lyne (Mr. Sheldon) need not assent. I know little of the tax law.
    Mr. Sheldon: Hear, hear.
    Sir G. Nabarro: The hon. Gentleman's knowledge is infinitesimal. I readily confess—I say this quite honestly and candidly—that I can no longer do my own tax papers. Mercifully, I am relieved from making a return under Schedule A, but I have my returns on Schedule D and Schedule E. I have at one and the same time to put on my tax return my income as a Member or Parliament, my income as a company director, my income from investments, and my income from televising, broadcasting and journalistic activities which are assessable under Schedule D. We had a lively debate last year on the contradistinctions between allowances on Schedule D and Schedule E and the need for uniformity between the two.
    I return to the reference made by the hon. Member for Heywood and Royton
    1806
    to Section 137 of the 1952 Act. He used the word "trade". Later, he talked about the trade element and the private element in Schedule D. He gave the Committee an impression that Schedule D Income Tax payers are most largely traders. They are not. They are a very large number of people like the hon. Member for Worcestershire, South who are self-employed.
    Mr. Ronald Bell: Thank goodness there are not a lot of them.
    Sir G. Nabarro: There are quite a lot of them, self-employed.
    I am assessed under Schedule D for these activities. I shall eternally be grateful to my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell), who put me up to it in 1955 when I complained to him that I could not have the cost of my Press cuttings, reporting my Parliamentary and other public activities, allowed as a charge against my Income Tax. My right hon. Friend, then Financial Secretary to the Treasury, asked my permission to send for my tax files. I said, "Of course, I have nothing to conceal from my right hon. Friend. He may send for my tax files". He sent for them. He said to me quietly in the Lobby one day, "Translate your income from television, from broadcasting and from journalistic activities, from Schedule E to Schedule D and then put in a claim for your Press cuttings against Schedule D and you will find that it is allowed". Not only did the Revenue allow it, but it gave me three years' arrears as well, thanks to my right hon. Friend.
    I tell these stories this evening only because they reveal that I, as an ordinary taxpayer, was being deluded by the Revenue and deprived by it of benefits to which I was properly entitled. It was not until my right hon. Friend and all his advisers in Somerset House looked at my tax files that they caught up with the point that I was so being deprived, and they advised me how to put the matter right.
    7.15 p.m.
    Mr. Eric Lubbock: The hon. Gentleman has been telling the Committee how he had to engage the services

    1807
    of professional accountants in the compilation of his Income Tax returns. Does he recall Hilaire Beloc's dictum:
    "It is the business of the wealthy man To give employment to the artisan"?
    Sir G. Nabarro: Yes. I hope that I am magnanimous in that sense. I did not know that quotation, but, of course, I employ an accountant.
    I come to the further point which has been alluded to as equity by hon. Members on both sides. My accountants charge me 100 gns. per year for doing all my personal tax papers. They then sort out how much is attributable to Schedule 171 and charge it back against the Schedule D assessment; but they cannot do that for the Schedule E part. Chartered accountants opposite would agree with that. Even where a person is not simultaneously assessed both to Schedule D and to Schedule E, it is grossly unjust that the Schedule D taxpayer gets some kind of tax benefit which the Schedule E taxpayer does not obtain.
    Mr. J. T. Price: There is nothing original or startling in this revelation of how the hon. Gentleman gets back on to the Schedule D wicket. If he casts his mind back, he will remember that W. S. Gilbert, the man who wrote the lyrics for Sullivan in the Gilbert and Sullivan operas which we are all familiar with, in 1897, invented the Duke of Plaza-Toro Ltd. in order to escape taxation. Many noble Lords who have followed the Duke of Plaza-Toro Ltd. in the flesh have converted themselves into limited companies for that reason. I do not know why we could not have Gerald Nabarro Ltd. as a substitute for the sort of hybrid situation he has described.
    The Chairman: Order. That interruption is totally irrelevant.
    Sir G. Nabarro: I do not wish to be drawn into conflict with the Chair. It is relevant, because accountants advise on this kind of thing.
    The Chairman: I have already ruled that it is irrelevant, so the hon. Gentleman is not correct in saying that it is relevant.
    Sir G. Nabarro: In view of your Ruling, Sir Eric, I pass at once to the Capital Gains Tax.
    1808
    I am very glad that my right hon. and hon. Friends have included the Capital Gains Tax in the Clause. If there was any merit in the publication of the contribution by Mr. Milner in last Sunday's Sunday Times it was that it brought out once again the impossible intricacies and complexities of the Capital Gains Tax from the point of view of the ordinary taxpayer. I am not talking about accountants, professional men, wealthy people, businessmen, or the remainder. I am talking about millions of ordinary taxpayers who own assets of more than £1,000, or who own stocks and shares. The rate at which they have to pay the tax is a separate argument. I am on the point of the complexity of assessing their liability.
    The Capital Gains Tax has been running for only a year or two. Already, I have received hundreds of letters from aggrieved taxpayers who are utterly incapable of assessing for themselves their liability to Capital Gains Tax. The trouble is that if they leave it to the tax man to assess, they will all be paying far more than they ought to be paying. I do not trust the Inland Revenue to do my tax papers for me. I would not trust them to do anybody else's tax papers for them. I believe that accountants are the only people suitably qualified to guide taxpayers as to the sums they should pay in Income Tax, Surtax and Capital Gains Tax and that the average taxpayer is utterly incapable of making a computation as to his liability for Capital Gains Tax.
    In all those circumstances, I hope that my right hon. and hon. Friends will press this matter to a Division if there is not a sympathetic reply from the Treasury.
    We propose to keep on with this year after year. As the Chief Secretary has been instrumental in making our taxation system so very much more complicated than it was before he took office—notably with the addition of Capital Gains Tax —as the next General Election approaches I shall call on my party to enunciate the principle more widely and put into its Manifesto that we believe in the accountancy profession guiding taxpayers and that there should be a tax concession for taxpayers to cover those professional charges entailed in returning to the Revenue a proper and accurate return the first time, all of which would save large

    1809
    sums, from a public point of view, by enabling tax inspectors to deal with tax papers much more expeditiously than they do at present.
    The Chief Secretary to the Treasury (Mr. John Diamond): I rise partly because we have had a good debate on this topic and partly because it has been debated many times before. Individual Members may wish to continue the debate, but I hope not.
    As I say, we have debated this matter many times. However, having listened very carefully in particular to the long, well-informed, detailed and outspoken speech of the hon. Member for Worcestershire, South (Sir G. Nabarro), I am bound to draw the conclusion that I have not heard a single word which was relevant to the Clause.
    The hon. Gentleman and previous speakers directed attention to whether Income Tax returns, returns of Capital Gains Tax and other returns would be more competently completed if professional men were employed on their behalf. Nobody—certainly not I—would know enough about it to challenge that statement. However, we are not concerned with that. We are concerned with whether, where it does happen, it is proper and appropriate that the charge incurred should be a deduction for tax purposes.
    I have not heard one word in the hon. Gentleman's speech, and very few words in other speeches, directed to this topic, so it is convenient to draw the attention of the Committee to the essential matter.
    Mr. Frederic Harris: Is the Chief Secretary questioning the competence of the Chair?
    Mr. Diamond: I am making no reflection on the Chair. The Chair has been good enough to allow the discussion. That is the end of the matter.
    The Chairman: As I understand it, the Chief Secretary is merely expressing a personal opinion.
    Mr. Diamond: I am going further. I am putting forward an argument. I am saying that I have listened carefully to what was said by the hon. Member for Worcestershire, South and, in my opinion, he did not deal with the essential point. The Clause deals with many
    1810
    points about which it would not be irrelevant to make a comment, but that does not get to the heart of the matter. The heart of the matter is whether these charges should be a deduction for tax purposes.
    Therefore, my first duty is to enunciate the principle, then to examine the practice, and then to see how this ties up with the interesting speeches which have been made on the topic.
    The principle is very simple: that expenditure incurred in earning profits or expenditure incurred in earning income is a deduction from those profits or from that income. That is the first principle of our taxation affairs. Expenditure incurred out of taxed profits and personal expenditure incurred out of taxed income is one of the ways in which we spend the money which is free for us to spend and has nothing to do with the Inland Revenue.
    We spend money going to the dentist or having music lessons or improving ourselves in a whole host of ways. We may spend money on all sorts of professional services, and it may well be that those professional services count as taxable receipts in the hands of the professional men concerned. That does not affect the principle on which the whole of our taxation system is based: that expenditure in earning profits is a deduction from those profits for tax purposes. Having arrived at the taxed profits and having arrived at the taxed personal income, what is done with those sums is a matter for the individual and is not of interest to the Inland Revenue.
    There is no question whether in certain cases a tax return should be prepared by a professional man and whether it would be better prepared and what proportion are already prepared. The greater proportion of personal Income Tax returns are not prepared with the assistance of professional men. They are prepared by individuals who incur no professional fees in their compilation. That is not the question here. The question is: Is it right to say that this particular kind of personal expenditure which is defined in the Clause should be a deduction for tax purposes? This is a fundamental principle and one has to be sure that a proposal which is put forward coincides with, or is not wholly irreconcilable with, that principle before accepting it. I do not think that is so here.

    1811
    It is the case that the law, the expression of the law, by eminent judges and the expression of the view of what the law should be by the Royal Commission all tally in saying that an expense of this kind—professional fees paid for preparing a personal Income Tax return—is not a deduction from the income which is earned and therefore should not be allowed for tax purposes.
    I have been challenged by the hon. Member for Chippenham (Mr. Awdry) who said he hoped that he would hear no more about the principle having regard to what the Royal Commission said. I can only say that I do not think he gave himself time to read the Royal Commission's Report in full.
    In paragraph 928 of the Report the Royal Commission said:
    "No deduction is explicitly allowed for the expense of preparing tax returns. We should not see anything singular in this by itself. Any effective control of such expense would be out of the question, and there is no general principle that would require a taxpayer's taxable income to be affected by the fact that he may have incurred some expense in performing his general duty of making a proper return."
    They examined this and went on to say, in paragraph 929:
    "We decided against recommending this"—
    that is to say, making an allowance. The leading case on the matter is Smith's Potato Estates, where Lord Porter explained the position and came to the same conclusion.
    7.30 p.m.
    The law is applied in the way I have described in all cases where it is practicable so to apply it. Therefore, I have only to deal with the one case where it is not so applied, which, as my hon. Friend the Member for Heywood and Royton (Mr. Barnett) made clear, is where it is impossible to apply it because it is impossible to define how much of an expense incurred on a variety of purposes relates to one of those purposes. He made the case himself by quoting the example of the small business man. He said that thousands of them have their accounts prepared professionally, and would maintain that they do it only for tax reasons and, therefore, the element in the accountancy charges relating to business purposes as opposed to tax purposes would be 0 per cent. Others
    1812
    would come forward and say that they have accounts prepared only for business reasons and would claim 100 per cent. In short, the argument would be between 0 and 100 per cent.; in other words, between the proportion of the accountancy fees incurred in preparing accounts for the purpose of illuminating the business position or for the purpose of establishing the taxable profit. It would be impossible to divide it.
    For that reason, we have accepted the illogical but nevertheless practical proposition that, as it is impossible to say which part of the professional fee for preparing a set of accounts and the taxable figure on those accounts relates to business purposes and what part to taxation purposes, the generous way is to say that the whole amount should be regarded as a deduction from profits.
    On this last Clause in the Committee stage of the Finance Bill, the Committee is trying to drive me, the representative of the Revenue, away from that generous and magnanimous point of view. I refuse to be so driven. I do not think that the logical conclusion in carrying out the principle as enunciated would drive us to say that only a proportion of the amount of the accountancy charges paid by the business should be allowed for tax purposes. We should not do that and, therefore, the Government cannot approve of this new Clause.
    Mr. Gower: I am disappointed at the Chief Secretary's reply. He was at pains to explain the law, but we know the law about these cases. We want the law altered.
    No one with experience of these matters can deny that thousands of people in this country pay more tax than they should and more than they were intended to pay when successive Chancellors devised our taxes. If the Chief Secretary doubt that, I invite him to collect from his tax inspectors the Income Tax returns of persons in approximately similar economic positions and with the same number of dependents. In some circumstances, he will find that, if they do not have professional advice, they pay very different amounts of taxation.
    It is desirable that the citizens of this country should pay the tax which they are properly due for by reason of their

    1813
    incomes and the sophisticated allowances which have been devised. They should not pay any more. It is undesirable that there should be divergences in the amounts paid by people with the same incomes, dependents and entitlement to allowances.
    As a solicitor, I have known a person pay tax on approximately the same income for a number of years, with assistance from Revenue officials. When I have advised such a person to see an accountant, in nearly every case that person has had some reduction in his taxes. That is a situation which is neither healthy nor calculated to induce in the minds of citizens a proper respect for the tax law. It would be a desirable reform if persons were encouraged to obtain professional advice. The Chief Secretary tells us that only a minority of persons making personal returns have professional advisers and that the majority of returns are made individually without such assistance.
    Then he made a somewhat technical objection to the speeches which we have heard in support of the Amendment by suggesting that they were directed at the accountant's fee and not at the concession sought for that fee. However, if he reconsiders this, he will recognise the case which we are making. We believe that the taxpayer should be encouraged to obtain the best possible advice on matters of this kind. He should be encouraged to obtain all the allowances relevant to his circumstances and to pay no more than his proper tax. There are thousands of people who are paying too much tax, even considering Income Tax alone. When the new complications of the Capital Gains Tax are included, one can only assume that the disparity will increase. It is a position which we should not tolerate, and, therefore, the new Clause deserves full support.
    Mr. John Smith: I must speak, though briefly, because I thought that the Chief Secretary's reply was rather casuistical. He based his case on the proposition that expenses allowable for tax must be incurred in earning profits. I am not an accountant, but I am sure that we all know about the case of Usher's Wiltshire Brewery v. Bruce and all that. Yet auditors' fees are allowed, trust income fees are allowed, and the costs of having
    1814
    valutions made for the purpose of Capital Gains Tax are allowed. None of these are incurred in earning profits.
    However, another and very much more relevant test which the Revenue apply to expenses is whether they are necessary. A number of hon. Members have gone over the ground of the complications of the modern tax system and whether individuals should be expected to tackle them for themselves. On that score alone, I should have thought that these expenses are necessary. But they are necessary for another reason as well.
    The Government's attitude might be reasonable if the Revenue could be relied upon invariably to be impartial, fair and objective. That is the aim, as the general rule, but it is not always so. One cannot rely on it. I have, as always, a letter from a constituent of mine. He is a solicitor, and he writes:
    "I think it is incumbent on the Revenue to be fair and objective. But in a case which I have on at the moment I have discovered quite by chance that the Shares Valuation Division have at one and the same time and with reference to the same class of share in the same company been using completely contradictory arguments to me and to another firm of solicitors. In my case, they are trying to value the shares down with a view to future Capital Gains Tax, and in another case, they are trying to value the shares up for Estate Duty purposes, and many of the arguments which I have used in support of my valuation have been adopted and used against the advisers in the other case. The climax of this was that the Shares Valuation Division informed the other advisers that no less than 10s. a share would be accepted for Estate Duty purposes while in the same month they were seeking to maintain that the self-same shares were only worth 8s. 3d. to me."
    That should show that in modern circumstances the taxpayer cannot defend himself on his own.
    There is also a second and different reason, which has not been mentioned, why the Clause is important, and it has nothing to do with the individual. There is a growing habit among Governments to unload the cost of administering taxes on to the taxpayer, and hence they lose sight of the true cost of a tax. The Clause will help to correct that. The loss of revenue, not so much from informing taxpayers what they are entitled to, but from deducting these charges from the taxpayers' gross revenue, will help to bring home to the Government the true cost of administering taxes. At present they

    1815
    ignore this. They ignore both aspects of the problem.
    Shifting the burden of administering a tax on to the shoulders of the taxpayer not only conceals from the Government the cost of the tax to the economy, but distorts the true yield of a tax and makes it look larger that it is. We had a ludicrous example of this in this Committee a few days ago when we were discussing stamp duty on cheques, a duty which raises £9 million a year, but which costs the banks so much to collect that their profits, on which they pay tax, are reduced by a greater amount, so that the stamp duty on cheques probably involves the Revenue in a net loss.
    The same thing undoubtedly happens with other forms of stamp duty. For example, the fees on conveyances are fixed fees and, therefore, the cost of getting a document stamped would, if saved, be added to the earnings of the partners in the firm who are probably taxed at very high rates. It is almost certain that many forms of tax appear to show a good yield to the Revenue, and are put there in the published statistics; but they are offset against other forms of taxation which they cause to fall, there is no net yield to the Revenue at all. The more we can bring home to the Government the actual cost to the Revenue and to the economy of administering a tax, the better are our chances of getting a more sensible and less wasteful taxation system.
    7.45 p.m.
    Mr. John Hall: We have had a very interesting debate. I think that hon. Members on both sides have made a very strong case for the Chief Secretary to accept the Clause. In spite of that, we have had a totally disappointing and stonewalling reply. Had he, in his previous status, been on this side of the
    Committee, we would have had a very different speech indeed.
    The right hon. Gentleman referred to the Royal Commission, but he did not repeat that part of paragraph 929 which said that in coming down against recommending a general allowance it was only on the balance of argument. That was 10 or 11 years ago. Since then, and especially during the last two years, the position of the taxpayer has become intolerably complicated. There is more need than ever before for professional advice and for making the charges allowable.
    I remind the right hon. Gentleman that even Antonio, when he was called on by Shylock to pay his pound of flesh, found it necessary to employ legal advice to avoid losing his liquid assets. I suggest to the right hon. Gentleman that there is a very good case for this today.
    Mr. Diamond: Is the hon. Gentleman suggesting that that was allowed, and that it was deductible in any sense?
    Mr. Hall: He avoided losing them, but only by paying for legal advice.
    The right hon. Gentleman has stonewalled in the past. He opposed Amendments to the 1965 and 1966 Finance Bills, yet in the following years he introduced Amendments giving away what he had previously opposed. I hope that that is a precedent for this Clause, and that next year the Government will table an identical one to give us what we want. However, as the right hon. Gentleman is not prepared to give it to us tonight. I can only advise my right hon. and hon. Friends to take the matter to a Division.
    Question put, That the Clause be read a Second time:—
    The Committee divided: Ayes 103, Noes 191.

    Division No. 380.]

    AYES

    [7.45 p.m.

    Alison, Michael (Barkston Ash)

    Clegg, Walter

    Fletcher-Cooke, Charles

    Allason, James (Hemel Hempstead)

    Cooke, Robert

    Fortescue, Tim

    Astor, John

    Crawley, Aidan

    Gower, Raymond

    Awdry, Daniel

    Cunningham, Sir Knox

    Grant-Ferris, R.

    Beamish, Cot. Sir Tufton

    Currie, C. B. H.

    Gurden, Harold

    Belt, Ronald

    Dalkeith, Earl of

    Hall, John (Wycombe)

    Boyle, Rt. Hn. Sir Edward

    d'Avigdor-Goldsmid, Sir Henry

    Harris, Frederic (Croydon, N.W.)

    Brinton, Sir Tatton

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

    Hawkins, Paul

    Buchanan-Smith, Alick (Angus, N&M)

    Dodds-Parker, Douglas

    Heald, Rt. Hn. Sir Lionel

    Buck, Antony (Colchester)

    Doughty, Charles

    Higgins, Terence L.

    Bullue, Sir Eric

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

    Hitey, Joseph

    Burden, F. A.

    Emery, Peter

    Hobson, Rt. Hn. Sir John

    Campbell, Cordon

    Eyre, Reginald

    Hogg, Rt. Hn. Quintin

    Chichester-Clark, R.

    Farr, John

    Holland, Philip

    Hornby, Richard

    Morgan, Geraint (Denbigh)

    Smith, John

    Hunt, John

    Morrison, Charles (Devizes)

    Stoddart-Scott, Col. Sir M. (Ripon)

    Jenkin, Patrick (Woodford)

    Munro-Lucas-Tooth, Sir Hugh

    Taylor, Sir Charles (Eastbourne)

    Jennings, J. C. (Burton)

    Nabarro, Sir Gerald

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

    Jopling, Michael

    Noble, Rt. Hn. Michael

    Temple, John M.

    Kaberry, Sir Donald

    Nott, John

    Thatcher, Mrs. Margaret

    Kimball, Marcus

    Onslow, Cranley

    Turton, Rt. Hn. R. H.

    King, Evelyn (Dorset, S.)

    Orr-Ewing, Sir Ian

    Walters, Dennis

    Knight, Mrs. Jill

    Osborn, John (Hallam)

    Ward, Dame Irene

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

    Osborne, Sir Cyril (Louth)

    Weatherill, Bernard

    McAdden, Sir Stephen

    Page, Graham (Crosby)

    Webster, David

    Macleod, Rt. Hn. lain

    Page, John (Harrow, W.)

    Wells, John (Maidstone)

    McMaster, Stanley

    Pearson, Sir Frank (Clitheroe)

    Wllitelaw, Rt. Hn. William

    Maude, Angus

    Peel, John

    Wills, Sir Gerald (Bridgwater)

    Mawby, Ray

    Percival, lan

    Wilson, Geoffrey (Truro)

    Maxwell-Hyslop, R. J.

    Pink, R. Bonner

    Wood, Rt. Hn. Richard

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

    Pym, Francis

    Worsley, Marcus

    Mills, Peter (Torrington)

    Rossi, Hugh (Hornsey)

    Mills, Stratton (Belfast, N.)

    Scott, Nicholas

    TELLERS FOR THE AYES:

    Miscampbell, Norman

    Sharples, Richard

    Mr. David Mitchell and

    Monro, Hector

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

    Mr. Anthony Grant.

    Montgomery, Fergus

    Sinclair, Sir George

    NOES

    Abee, Leo

    Fletcher, Raymond (Ilkeston)

    Mahon, Simon (Bootie)

    Allaun, Frank (Salford, E.)

    Foley, Maurice

    Manuel, Archie

    Alldritt, Walter

    Foot, Michael (Ebbw Vale)

    Mapp, Charles

    Anderson, Donald

    Ford, Ben

    Marquand, David

    Archer, Peter

    Forrester, John

    Marsh, Rt. Hn. Richard

    Armstrong, Ernest

    Fowler, Gerry

    Mason, Roy

    Atkins, Ronald (Preston, N.)

    Freeson, Reginald

    Maxwell, Robert

    Atkinson, Norman (Tottenham)

    Gardner, Tony

    Mendelson, J. J.

    Bacon, Rt. Hn. Alice

    Ginsburg, David

    Millan, Bruce

    Bagier, Gordon A. T.

    Gray, Dr. Hugh (Yarmouth)

    Miller, Dr. M. S.

    Barnett, Joel

    Grey, Charles (Durham)

    Mitne, Edward (Blyth)

    Beamy, Alan

    Griffiths, David (Rother Valley)

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

    Bence, Cyril

    Griffiths, Rt. Hn. James (Llanelly)

    Morgan, Elystan (Cardiganshire)

    Bennett, James (G'gow, Bridgeton)

    Hale, Leslie (Oldham, W.)

    Morris, Alfred (Wythenshawe)

    Bessell, Peter

    Hamilton, James (Bothwell)

    Morris, Charles R. (Openshaw)

    Bishop, E. S.

    Hamilton, William (Fife, W.)

    Moyle, Roland

    Blackburn, F.

    Hannan, William

    Neat, Harold

    Blenkinsop, Arthur

    Harrison, Walter (Wakefield)

    Newens, Stan

    Boardman, H.

    Haseldine, Norman

    Noel-Baker, Francis (Swindon)

    Booth, Albert

    Heffer, Eric S.

    Norwood, Christopher

    Braddock, Mrs. E. M.

    Henig, Stanley

    Oakes, Gordon

    Brooks, Edwin

    Hooley, Frank

    Ogden, Eric

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

    Hooson, Emlyn

    O'Maliey, Brian

    Callaghan, Rt. Hn. James

    Homer, John

    Orbach, Maurice

    Cant, R. B.

    Houghton, Rt. Hn. Douglas

    Oswald, Thomas

    Carmichael, Nell

    Howarth, Robert (Bolton, E.)

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

    Chapman, Donald

    Howie, W.

    Pannell, Rt. Hn. Charles

    Coleman, Donald

    Hoy, Junes

    Park, Trevor

    Concannon, J. D.

    Huckfleld, L.

    Parkyn, Brian (Bedford)

    Contan, Bernard

    Hughes, Emrys (Ayrshire, S.)

    Pavitt, Laurence

    Craddock, George (Bradford, S.)

    Hynd, John

    Pearson, Arthur (Pontypridd)

    Crawshaw, Richard

    Irvine, A. J. (Edge Hill)

    Pentland, Norman

    Crosland, Rt. Hn. Anthony

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

    Price, Thomas (Westhoughton)

    Cullen, Mrs. Alice

    Johnston, Russell (Inverness)

    Price, William (Rugby)

    Dalyell, Tarn

    Jones, Dan (Burnley)

    Rhodes, Geoffrey

    Davies, Dr. Ernest (Stratford)

    Jones, J. Idwal (Wrexham)

    Robertson, John (Paisley)

    Davies, G. Elfed (Rhondda, E.)

    Jones, T. Alec (Rhondda, West)

    Rogers, George (Kensington, N.)

    Davies, Ednyfed Hudson (Conway)

    Kelley, Richard

    Ross, Rt. Hn. William

    Davies, Ifor (Gower)

    Kerr, Russell (Feltham)

    Shaw, Arnold (Ilford, S.)

    Davies, S. O. (Merthyr)

    Lawson, George

    Sheldon, Robert

    Delargy, Hugh

    Lestor, Miss Joan

    Shore, Peter (Stepney)

    Dell, Edmund

    Lomas, Kenneth

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

    Dempsey, James

    Loughlin, Charles

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

    Diamond, Rt. Hn. John

    Lubbock, Eric

    Silverman, Julius (Aston)

    Dickens, James

    Lyon, Alexander W. (York)

    Silverman, Sydney (Nelson)

    Dobson, Ray

    Lyons, Edward (Bradford, E.)

    Slater, Joseph

    Doig, Peter

    Mabon, Dr. J. Dickson

    Small, William

    Dunn, James A.

    McBride, Neil

    Snow, Julian

    Dunwoody, Mrs. Gwyneth (Exeter)

    MacColl, James

    Steel, David (Roxburgh)

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

    MacDermot, Niall

    Steele, Thomas (Dunbartonshire, W.)

    Eadie, Alex

    Macdonald, A. H.

    Swain, Thomas

    Edwards, Rt. Hn. Ness (Caerphilly)

    McGuire, Michael

    Symonds, J. B.

    Ellis, John

    Mackenzie, Gregor (Rutherglen)

    Thornton, Ernest

    English, Michael

    Mackie, John

    Thorpe, Rt. Hn. Jeremy

    Ennals, David

    Mackintosh, John P.

    Tinn, James

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

    Maclennan, Robert

    Tuck, Raphael

    Fernyhough, E.

    McNamara, J. Kevin

    Urwin, T. W.

    Finch, Harold

    MacPherson, Malcolm

    Varley, Eric G.

    Fitch, Alan (Wigan)

    Mahon, Peter (Preston, S.)

    Wainwright, Edwin (Dearne Valley)

    1818

    1819

    Wainwright, Richard (Colne Valley)

    Williams, Alan (Swansea, W.)

    Woof, Robert

    Walden, Brian (All Saints)

    Williams, Clifford (Abertillery)

    Yates, Victor

    Walker, Harold (Doncaster)

    Wilson, William (Coventry, S.)

    Wallace, George

    Winstanley, Dr. M. P.

    TELLERS FOR THE NOES:

    Watkins, Tudor (Brecon & Radnor)

    Winterbottom, R. E.

    Mr. Harry Gourlay and

    Wellbeloved, James

    Woodburn, Rt. Hn. A.

    Mr. Joseph Harper.

  Schedule 16.—(REPEALS.)
  Amendment made: No. 41, in page 97, line 4, column 3, at end insert:
  Section 147(1) from 'and where' onwards.
  Section 147(2).—[Mr. MacDermot.]
  Mr. MacDermot: I beg to move Amendment No. 44, in page 97, line 32, at the end to insert:

  1966, c.46.

  The Bus Fuel Grants Act 1966.

  Section 1(1)(a)(i). In section 1(1)(a)(ii), the word 'later' and the words from 'including' on-wards.

  This Amendment repeals certain spent parts of the Bus Fuel Grants Act, 1966. It is proposed solely in order to keep the statutes up to date.
  Amendment agreed to.
  Mr. MacDermot: I beg to move Amendment No. 155, in page 102, line 30, column 3, at the end to insert:
  In Schedule 12, in paragraph 1(3) the words 'or is not paid in pursuance of such an agreement'.
  This Amendment also repeals certain words which are now superfluous.
  Amendment agreed to.
  Schedule, as amended, agreed to.
  Mr. Iain Macleod: On a point of order. Before you report the Bill to the House, Mr. Irving, and for the convenience of hon. Members in the House and outside, and also partly for the Chair—no doubt Mr. Speaker will note what we say for the next stage—may I say that we are in some difficulty in that it is known that the Government intend to take the Report stage of the Bill on Tuesday and Wednesday of next week. I have no objection; indeed, from various points of view it is convenient. Nevertheless, it raises certain difficulties about printing.
  We cannot put down Amendments until we have the reprinted Bill. For instance, we cannot put down Amend-
  1820
  ments to the Chancellor's new R.E.P. Clause until we see where it is in the Bill. Similarly, if people outside wish my hon. Friends or hon. Members opposite to make representations to the Government, they cannot indicate where in the Bill the appropriate Amendments should be made.
  It may therefore be that some Amendments cannot be put down until Monday, and will therefore be starred when we proceed with the Bill on Report, but it might be possible—I realise that this is not a point of order, but it is for the convenience of the House—for the Chancellor to tell us when the reprinted Bill will be before the House.
  The Chancellor of the Exchequer (Mr. James Callaghan): With your permission, Mr. Irving, may I say that I am grateful to the right hon. Member for Enfield, West (Mr. Iain Macleod), who gave me private notice that he proposed to raise this point.
  This frequently happens when there is only a short interval between Committee and Report stages. The Government, naturally, must do their best to meet the convenience of the House at the time. I have no knowledge what business we shall take next week until the Lord President of the Council announces it in the House tomorrow, but I can tell the right hon. Gentleman that we hope to have the Finance Bill reprinted by midday tomorrow, and it should be available to hon. Members in the House in the early afternoon of tomorrow.
  I trust that that will give sufficient time for Amendments to be put down before any possible debate that takes place next week.
  The Deputy Chairman (Mr. Sydney Irving): I am sure that meets the point.
  Bill reported, with amendments, as amended to be considered Tomorrow and to be printed. [Bill 287.]

DECIMAL CURRENCY BILL
Not amended (in the Standing Committee), considered.

Clause 1.—(THE NEW DECIMAL CURRENCY.)
7.59 p.m.
Mr. Gordon Campbell: I beg to move Amendment No. 1, in page 1, line 7, to leave out from 'be' to the end of line 9 and to insert:
'a unit of sterling, of the value of ten shillings, and a cent, the cent being one-hundredth part of the unit'.

BRONZE

2 cents

…

…

…

3·56400

2·0320

Mixed metal copper, tin and zinc

·0750

cent

…

…

…

1·78200

1·7145

·0375

Mr. Campbell: Yes, Mr. Deputy Speaker.
This Amendment, with the other three, would insert into the Bill a 10s. system instead of the Government's £1—new penny—½ system. This is still the main issue among all those who are concerned about the decimalisation of our currency.
Before the Second Reading in March there was considerable speculation and conjecture as to what would happen in this House, because it was known that a large majority of Members on both sides, upon their own judgment after considering the subject, which is free from party politics, were opposed to the Government system and in favour of a 10s. unit. Recent history of what, in the event, did happen can be summed up in the one word "steamroller". The Whip was imposed by the Government on Second Reading and in Committee, where the Government rejected all Amendments.
But this has not altered the arguments, or the strength of the arguments in favour of the 10s. system. That the Government have continued to press their system on Parliament and the country does not mean that Australia is wrong, or that South Africa and New Zealand are wrong either, in having adopted a 10s. system. These countries are reaping the benefits of their wise choice.
I will briefly remind the House of some of the main advantages of the 10s. system. First, as is demonstrated by the table in Amendment No. 8, there would be only two new coins, which would
Mr. Deputy Speaker (Mr. Sydney Irving): With this Amendment we can take Amendment No. 3, in Clause 2, page 1, line 13, leave out 'all'.
Amendment No. 4, in page 1, line 17, at end insert:
(2) The other coins of the new currency shall be the existing half-crown, two shilling, one shilling and sixpenny pieces, bearing the denominations twenty-five, twenty, ten and five cents, respectively.
and Amendment No. 8, in Schedule 1, page 6, leave out lines 8 to 17 and insert:
replace the three smallest coins in our present currency. The Government system contemplates five new coins, with a sixth coming in later. There is no dispute that the 10s. system would thus make the change-over very much easier for the general public. It would also mean that very few vending or service machines would need alteration—and probably no meters or telephones.
Another advantage of the 10s. system is its simple relationship with the present currency. It would be easy to make a rough conversion in one's head from one to the other. Another advantage is that there is no fraction, no half, included in the system, as there is in the Government system. The Government have estimated that the half will remain in their system for about 30 years.
A further advantage is that the 10s. system provides the fundamental benefit of a decimal system, namely, that with a major unit divided into 100 minor units, any sum of money can be expressed in not more than two separate figures, while the minor unit is small enough not to have to be subdivided. As my right hon. Friend the Member for Enfield, West (Mr. Iain Macleod) pointed out on Second Reading, this is impossible with a unit as large as the £.
Because of these advantages, it is not surprising that the 10s. unit has been advocated by many bodies representing wide sections of industry and commerce, distribution and transport, and by trade unions and consumer organisations.

1823
Those concerned with cash transactions have been especially anxious, and still are, about the effect of the Government's choice of system. A few of these concerns have recently taken a second position This is that if the Government are adamant in obtusely sticking to the £, and are determined to ignore the advantages of a 10s. unit, they suggest trying to alter and improve the £ system as a second best. This illustrates that almost everyone agrees that the Government's £-new penny system is objectionable. It is quite clear—and this is the important point—that if the Government now changed to the 10s. system they would have almost universal support.
I would refer to one representative body, in particular, which has given extensive study to the whole question of the decimalisation of the currency in relation to cash transactions. This is the Retail Decimal Committee. Representatives on the Committee come from the Co-operative Union, the National Chamber of Trade, the Multiple Shops' Federation, the Drapers' Chamber of Trade and the Retail Distributors' Association—bodies with very wide experience of handling cash. The Committee feels strongly today, as it did before, that the 10s. system is by far the best. The House will also know that organisations representing consumers have already made abundandtly clear their preference for the 10s. system.
Up to five years ago, while a number of people could see advantages generally in decimalisation there were very few who had had the time or the opportunity to examine the details of possible systems. The Halsbury Committee, almost four years ago, was unable to agree on the choice of a system, but it did have focus attention on this point and presented two alternative—a £ system and a 10s. system.
It was not then an easy decision for a Government to take immediately, but the Halsbury Report promoted examination in considerable depth by a great many bodies representing those who would be affected. The result was that the l0s unit emerged as a clear favourite in the field. It has been recognised that arguments in its favour have carried more weight, while the international case for the £, and the supposed desirability of a heavy unit, have been receding in importance.
In taking a decision that could last for 200 years or more it is important for the Government to get this choice right rather than simply to fit it into their immediate programme. I should like the Minister to explain or expand on the statement which the Chancellor of the Exchequer made in the House on 7th March. This was before the House had had an opportunity to discuss the Government's proposals. On that occasion. the right hon. Gentleman said:
"Administrative decisions have, of course. been taken—[HON. MEMBERS: "Oh."]—and a number of companies…have already entered into particular commitments on this matter." —[OFFICIAL REPORT, 7th March, 1967; Vol. 742, c. 1243.]
That was given as a reason for the Government forcing their proposals through the House, and not permitting prior debate. It was a reason given for not taking into account the freely expressed views of the House on a subject that is divorced from party politics but which will affect every citizen in the land.
If the Government are still sticking to their £-new penny-½ system, is it because administrative decisions have already been taken, as the Chancellor of the Exchequer appeared to indicate on that day? Apart from the question of the propriety of this having been done before the House could consider the matter, this is not a serious obstacle where such a far-reaching decision is involved. At other times, Ministers have stated that no decisions have been taken or work done which would prejudice, or be nullified by, the choice of system. I hope that the Minister will deal with this point.
The case for the 10s. unit has always been compelling. On all sides it has been accepted as being superior for internal use within Britain. I believe that the Government were at one time within an ace of adopting it. Now, after so much further consideration has been given to the subject by so many who will be affected by the decision, the case is overwhelming. Again, today, I ask the Government to reconsider their decision on a matter of such importance for the future.
The Financial Secretary to the Treasury (Mr. Niall MacDermot): The hon. Gentleman the Member for Moray and Nairn (Mr. G. Campbell) has moved the

1825
Amendment, if I may say so, with commendable brevity. When I recall the very full discussions which we had in Committee on this problem—and very interesting ones, too, I thank him for deploying it so shortly. I shall seek to deal with his arguments and to do so at similar length.
The hon. Gentleman makes the point, and very fairly, that since the publication of the Government's proposals there has been growing support for the alternative solution which this Amendment proposes, namely, to have the 10s. unit as the major unit. We have to call it the 10s. unit because nobody can suggest a suitable name for it, and that is one of the minor problems. The "new £" certainly cannot be a satisfactory solution, whatever else one wanted to call it.
Mr. G. Campbell: It was not simply since the Government introduced their proposals on 12th December. There has been this growing feeling that the 10s. system would be best, and it has been growing ever since the Halsbury Committee Report was produced and focused attention on this nearly four years ago.
Mr. MacDermot: The hon. Member is entitled to his own view on that, but I do not share it, because I think that it was the Government's publication of their own proposals which really revived interest in the 10s. system and stimulated people to consider it.
The reason, I think, why there has been this growing support to the extent there has been is the extremely skilful campaign mounted by those who have always supported the 10s. system and argued it before the Halsbury Committee and who, in the forefront of their campaign, quite deliberately put the associability argument, that the change-over would be easier.
That is a perfectly valid argument in support of the system. We have never sought to deny it. What we say is that we do not think that it weighs very heavily on the scales, that the change-over is a temporary problem and will prove to be a temporary problem, and that people's fears on this score have been exaggerated. We went into this in detail in Committee and I do not want to redeploy the arguments now. We remain very firmly convinced of this fact.
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But, of course, it is a point on which it is easy to arouse fears, and to make people think that the problems of transition will be very much greater than they are, particularly if they are not aware of all that will be done in the way of education as a result of the activities of the Decimal Currency Board and the facilities by way of conversion tables, a dual pricing system, special training for people like shop assistants and bus conductors, and so on, with whom people will be dealing in cash transactions. All these things will mitigate the problem enormously. But as I say, it is an objection to the £ system which propagandists rightly judged was a useful one to get across to the public.
But no one who seriously argues this 10s. case, when it comes to the point, admits that this is the real argument. The real argument, the strongest one—and the right hon. Gentleman the Member for Enfield, West (Mr. Iain Macleod) made this perfectly clear in his speech on the Second Reading debate—is that it avoids the fraction, it gives one the benefit of a pure decimal system from the start. This is the advantage.
I made it perfectly clear in Committee that the main disadvantage of the Government's system is that for quite a long time—people estimate it at about a generation—we shall have the ½-cent and a fraction, and it will not be till it whittles away we shall get the full benefit of a pure decimal system. We have to weigh the disadvantages of the fraction against the disadvantages of the 10s. system with, above all, the disadvantage of abandoning our major unit of value, which has the advantage over all other major units of being a big, heavy one—and for an industrial country like ours and a big trading country it is a great advantage to have a heavy main unit. It would, in our view, require very strong arguments indeed to justify abandoning those advantages in favour of a 10s. system.
8.15 p.m.
The hon. Member for Moray and Nairn spoke in terms of having a system to last about 200 years. I would agree with him. My right hon. Friend the Chancellor at one time talked, I think, in terms of 1,000 years. Remembering the experience of someone who within living memory thought he was legislating

1827
for a 1,000 years and came to a sticky end, I prefer to take a more modest estimate. I think that we can speak in terms of 200 years, a period of that order.
Mr. Eric Lubbock rose—
Mr. MacDermot: The hon. Member will have an opportunity to speak. I am sorry, but I do not want to give way for the moment. I am in the middle of a controversial argument. I will give way at the end. It will be much easier if the hon. Gentleman does not keep up that running murmer of interruption.
If we face reality, face what the Halsbury Committee called the logic of history, face what has happened in the last 50 years in terms of the decline in the value of money, we must all face the prospect that, whatever our efforts may be, there will be some continuing decline in the value of money. But we also face the prospect of increasing prosperity, in which case we shall want heavier units of value. If it be said and accepted, as it generally is, that the ½-cent in our system will wither away at the end of a generation—say, 25 years or so—it follows that if we adopted the 10s. system the cent would itself become a vestigial coin at the end of the same period. But although it was a coin which had outlived its usefulness, we would have to retain it for change giving purposes. So that at the period when we were coming to the full advantage of our system and we would have the prospect of a large heavy unit, the 10s. system would already be beginning to wither, and to suffer from the disadvantage which is inherent in too small a unit.
There are, of course, other advantages in retaining the £, as, for example, the advantage for all accounting and record purposes, which is a continuing advantage, and not just a temporary and transitional problem, because of the need to compare statistics over a long period of time.
Weighing up the arguments, we have never taken a black and white view about this; it is a matter of balance of argument, we take the advantages of retaining the heavy coin in our currency. We stress more the internal advantages than external, where there is an international argument although this is also an argument to be weighed in the scales. But we consider that these advantages
1828
greatly outweigh the temporary disadvantage of having a fraction in the system, and we believe that when one pares away all the minor arguments this is the major issue on which a judgment is required.
The hon. Member can now make his point.
Mr. Lubbock: I had not intended to intervene in this debate, but since the hon. and learned Gentleman the Financial Secretary did not have the courtesy to give way when I was wishing to raise a very important point with him, and one which was material to the argument he was presenting to the House, I think that I owe it to the House to deal with some of those arguments and not let them go by as if they would be accepted, not requiring correction.
The hon. and learned Gentleman said that one of the advantages of the £ unit was that it gave a heavier major unit than that of any other major industrialised country. That is true. But he omitted to add that the 10s. major unit would also be heavier than that of any other major industrialised country. It would be heavier than the dollar and much heavier than the franc or the mark. The hon. and learned Member may intervene in my speech if he likes, although he would not allow me to intervene in his, and I challenge him to name one civilised country in the world which has a major unit larger than 10s. He cannot do it, because there is none.
The argument about the decline in the value of money is a most depressing argument to hear. Moreover, it does not stand up when we look at the arithmetic. Lord Halsbury said that the value of money historically has been declining by a factor of about two per century. That means, according to my calculations, that it is not only for a generation that we shall have to put up with this beastly half. It will be a much longer period than that. I worked it out at well over 100 years, and I will show the hon. and learned Gentleman the arithmetic if he likes.
But at this stage he is not amenable to argument. We can tell him, but he is not prepared to listen. As the hon. Member for Moray and Nairn (Mr. G. Campbell) said in introducing the Amendment, the Chancellor will not listen because of administrative decisions which

1829
were taken long before this matter ever reached the Floor of the House. That is what is so monstrous about the way in which the whole subject has been handled. The hon. and learned Gentleman and the Chancellor of the Exchequer have not been prepared to listen to logic and to the views of people outside the House who might be expected to contribute to the discussion. They have all been dismissed as a lobby, as the Chancellor once described them in reply to a Question. If large numbers of consumers who are represented by the Consumer Council are a lobby, one can call anything a lobby. But it would be much better if the Government sometimes listened to the so-called lobbies outside the House instead of living in their ivory towers and foisting on the country decisions which will be so harmful.
I do not take the view which the hon. and learned Gentleman takes that the arguments for the consumer interests are insignificant and that people will get used to this —cent.-½ system practically as quickly as they would to the 10s.—cent. system. The hon. and learned Member forgets the work done by Dr. Sheila Jones and Mr. Broadbent at the time of the Halsbury Committee, and the reiteration of the arguments by Dr. Sheila Jones just before we debated the Second Reading. She is absolutely convinced still that it will take much longer for people to get used to the —cent.—½ system than to a pure decimal system. She has added that there are some old people who will never get used to the new system throughout their lives. I do not think that one can dismiss the consumer argument as being of little significance.
As the hon. Member for Moray and Nairn said, we shall have to put up with the beastly half throughout the whole of our lives, and that is the main argument against the Government system. It would require very much stronger reasons in favour of retaining the £1 as the major unit, in my opinion, to counteract that argument.
Another point which has escaped notice, at least in the Treasury, is the vastly greater expense of the £ system compared with the 10s. system. There is a substantial number of half-crown and sixpenny pieces in circulation, as one can see by reference to the report of the Royal Mint. There are 455 million half-crown
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pieces, valued at £56·97 million. There are no fewer than 1,065 million sixpences, valued at £53·25 million. The abolition of these two coins, therefore, means that we shall be faced with heavy minting costs which could easily have been avoided. Furthermore, at the bottom end of the scale the expense of minting new coins would have been much lower in the bronze coins.
I do not think that all these arguments were thoroughly explored by the Treasury before they reached their decision. They said to themselves, "The Halsbury Committee was in favour of this system and our friends in National Cash Register say that this is what we should do. We shall take no advice from outside, and we shall not listen to what the public say or even to what the House of Commons says. We shall go ahead and steam-roller it through the House of Commons". That is exactly what the Government have done.
Mr. Terence L. Higgins: The Financial Secretary to the Treasury suggested that one argument against the 10s. unit is that no one could think of a name for it. It would be more accurate to say that those names which were suggested, such as royals and nobles, had not a sufficiently Socialist ring about them. Nevertheless it is typical of the kind of argument which he has been advancing. I strongly support my hon. Friend the Member for Moray and Nairn (Mr. G. Campbell) in proposing the 10s. unit.
The question of timing is crucial. I do not think that the Government have given sufficient attention to it. It is clear that the 10s. unit has a considerable advantage in associability in the short run and that this would be likely to lead to general acceptance of the new coinage, compared with the confusion which is likely to arise if we adopt the Government's system. Similarly, in the short run the 10s. system would involve the introduction of only two new coins. The other system, in contrast, would be more expensive.
As has been pointed out, it is likely that the 10s. unit will have an advantage for some time, because the machines which will be used under this system will be compatible with those abroad whereas those under the Government's system will be less compatible. As a result we shall

1831
find that economies of scale introducing business machines would not be as great under the Government system as under the 10s. system, and they must, therefore, be less competitive in international markets.
Turning from the short or medium term to the long term, I am sure that the argument which has been put forward that we shall not lose the fraction for at least a generation is very important. We ought to give due consideration to immediate and medium-term advantages rather than to those which will be achieved only after a generation. On that basis, it seems to me that the arguments which have been put forward, and which have not been rebutted by the Government, come out very firmly in favour of the 10s. unit. The only argument on the Government side seems to be the ridiculous argument about the heaviness of the £1 unit, an argument which has frequently been rebutted. In addition, there is the whole question of the international case for the £.
This is only by way of looking at it in terms of the timing of the advantages and disadvantages. It seems to me that if we weight the argument to take account of the time when the advantages and disadvantages will be effective, then however much we may have thought otherwise, it brings the argument down very much in favour of the 10s. unit. I therefore do not think that we should be persuaded, as the Halsbury Committee suggested, by looking at the question merely in an historical context. We should also take account of the economic and other arguments which have been advanced.
If the House were given a free vote—which it has been denied—I am sure that it would vote against the Government's proposal and in favour of the Amendment.
8.30 p.m.
Mr. R. B. Cant: Some time ago I came to the conclusion that hitting one's head against even the leather seats of the Chamber was both painful and unrewarding. There is a great feeling of anticlimax in the House tonight. Many people. including myself, had high hopes that the Chancellor was doing something which would make a contribution to the theme of modernising
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Britain by introducing decimal currency. I thought that this "something" was out of all proportion to the thing itself; that it was, in a sense, symptomatic of what I thought were to be great changes. Unfortunately, soon after my right hon. Friend announced that he intended to do this, it became obvious that there was to be a considerable concession to tradition.
I have played some part in trying to persuade my hon. Friends—who are conspicuous tonight only by their absence —that the 10s. unit was the right unit to adopt. As this stage of the Bill approached, last Sunday I went into something approaching decimal purdah. I read the OFFICIAL REPORT of our debates in the House and in Committee and began to wonder whether I might change my mind. I even flirted for a few fleeting seconds with the £—florin—cent system in the hope that that would be a compromise—something of a bridge between the ten-bobbers and the Chancellor's £ unit. However, I came rapidly to the conclusion that those who had supported the 10s. unit had been right all along.
I do not want to repeat all the arguments, which have been put adequately in different places from time to time. I hope that I am not being disloyal in saying that the statement of the Financial Secretary tonight was rather threadbare; although, perhaps, it was given in the spirit of, "The victory is already won. We need not bother too much". However, some of the arguments are positively inaccurate, and for the Financial Secretary to say that we have this half for only a generation is confounded by simple arithmetic.
I had hoped that my hon. and learned Friend would reply to the one major contribution to the debate that I made on Second Reading, when I spoke of the number of coins involved. I thought that, having done a stimulating piece of research, which indicated clearly that the £ system would involve the use of 1·6 billion extra units of cash each week, the Treasury would do some research and at least either deny or confirm what I had said. But nothing has been done in this respect.
My main point in speaking tonight is to draw attention to the fact that the very way in which the Treasury Bench plays down the international case makes me

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think that my colleagues in office are protesting too much—that this is the factor which finally persuaded the Government to adopt the £ system. We have had inspired and other types of leak, even from the author of the great Report, Lord Halsbury, who also now plays it down, although he gave it a prominent position in the case he presented in his Report.
People have pressed him to say why, if he attached so much importance to the international case for the £ and why, if he had to reach a conclusion about whether it was a significant matter, he did not go abroad and ask the people who use sterling in import-export transactions whether they considered it to be a decisive factor. He conceded that he had gone to the source of all inspiration, the Bank of England, and had asked for people there if they thought it a good idea that he should go abroad and question those who use sterling; but they told him that it was unimportant. In any case, he could only go to the people to whom the bank introduced him, who were unlikely to think differently. This is how history is made, and it is regrettable.
Another matter which distresses me and another reason why I support the 10s. unit is that, whatever the case for the £ as a reserve trading currency, its rôle as a unit of account will have to be abandoned in international finance. The Chancellor says that he is ready for change. If he had adopted the 10s. system, he could have made a firm declaration of intent that this country was willing and anxious to negotiate for change and did not attach the importance to the £ sterling which it appeared to do, and was prepared, by using the 10s. unit, to accept that the £ was not as internationally important as was thought.
For the domestic reasons, but also because, in the last resort, we will be saddled with a £.—cent—½ system, because the mandarins of the Treasury and the financial interests of the Bank of England have finally persuaded my right hon. Friend, I regret this decision. I shall, of course, support the Chancellor, not because the Bill shows that great Socialist faith which we share, or because it is intellectually attractive to me, but because the Chancellor has done a great job and, above all, he is a charming man with a smile which I find it hard to resist.
Mr. Iain Macleod: We have listened to a very sad speech from the hon. Member for Stoke-on-Trent, Central (Mr. Cant). There are only two runners in this race. That was the conclusion of the Halsbury Committee and of the Government's Blue Paper, which quoted informed opinion—rightly I think —as agreeing with that, and of comparable countries which have had this problem and reached their answer—invariably the 10s. answer.
It was the Chancellor's view on Second Reading when he declined even to comment on the £-florin-mil system. In spite of the skill of the advocate who assisted me so wonderfully on the Finance Bill, the effort to import into Committee a system more suitable to the bazaars of the Middle East had an air of pantomime as it was discussed. What has amazed me, after having studied and read twice every word said in Committee, is the astonishing brevity of this evening's speeches after the astonishing length of those upstairs.
I begin with a most serious point. When my hon. Friend the Member for Moray and Nairn (Mr. G. Campbell) was complaining about the steamrollering of the Bill, the Financial Secretary said, whether or not with his tongue in his cheek I do not know—
"Is the hon. Member saying that the House of Commons is a cipher?"—[OFFICIAL REPORT, Standing Committee A, 20th April, 1967; c. 61.]
The answer is that, when a Government with a majority of 100 put a three-line Whip on a matter which is deeply controversial, the House of Commons becomes a cipher. We had proof of that just now, in the speech of the hon. Member for Stoke-on-Trent, Central—
The Chancellor of the Exchequer (Mr. James Callaghan): On a point of information. It was not a three-line Whip.
Mr. Macleod: I am sorry. It was a strong Whip, a two-line Whip.
When the Government put a Whip on this, the House of Commons becomes a cipher. The proof of this is in the Second Reading debate. Fifteen hon. Members spoke and eight of those declared themselves as ten-bobbers, five—including two Treasury Ministers—for the £-cent system and two for individual systems. Not only was there a very clear majority of tenbobbers over the £-cent, but a clear majority over all the other systems put

1835
together. I do not doubt that that is the genuine view of the House of Commons.
Anyone with any doubts about it has only to read the speech of the hon. Member for Stoke-on-Trent, Central. He must have hated doing it and I cannot say that I admired the end of his speech tonight. He must have hated ending his speech as he did. The result was that three of those ten-bobbers, having declared themselves against the Government, voted with the Government and the net voting figures turned up five hon. Members for the 10s. unit and 10 having been swept up by the Whip, whatever its strength, for the £-cent system. I say that is turning the House of Commons into a cipher.
The international case which matters is the one to which my hon. Friend the Member for Worthing (Mr. Higgins) referred and to which I referred on Second Reading. The true international case is not the trivial case put forward by the Bank of England to the Halsbury Committee. It is that as we plan our currency for the future, and perhaps for future centuries, we should not be too far out of step with all the other countries of the world. As it is, we are to have a unit vastly heavier than any other in the world. Even the 10s. unit which we advocate would be the heaviest unit. It is said by the Financial Secretary, and has been said on a number of occasions, that if only the other countries could start again they would perhaps opt for a heavier unit. I doubt it. I know of no great pressure to increase the value of the dollar. Yet, if they wished to do it, their present 7s. 2d. would go to 14s. 4d., which falls between the stools of the argument, and they could easily do it.
What really matters is that if this proposal of the Government is right, then everybody else is wrong and every other country is wrong. The Chancellor, even at this stage, ought to pause before he comes to this particular conclusion. Many countries—Australia, New Zealand, South Africa and Eire—each with a standard of living different from but broadly comparable in the band to ours, have faced this problem. Each of them came up with the same answer, the 10s. unit.
The reason is that the whole point of having decimal currency is that the main
1836
unit should be divisible into 100 cents, without a fraction. The only other system which meets this requirement in full—this was the system which ran second in the reports from Australia and the other countries I have mentioned—is the system of 100 pennies in which the main unit is 8s. 4d., which divides automatically, easily and straight away into 100 pennies. I think that is easily the second best system.
On the question of education, of course the system the Chancellor has put forward is easier for the schools than the system we have at the moment. I do not dispute that for a second, but it has the overwhelming disadvantage of having a fraction in it. Education authorities which have expressed themselves on this matter have pointed to the great ease and simplicity that attends a 10s.-cent system.
8.45 p.m.
To sum up, I believe that the truth is this. I have analysed what happened on Second Reading. If we could have a genuine free vote tonight—I know how difficult a free vote can be; I have been Leader of the House; even on a free vote there are complications—I believe that that pattern of 8, 5, 1, 1, is something like the pattern which would be reproduced. Whatever the figures turn out to be—we on this side are genuinely unwhipped; as we shall no doubt demonstrate on the next Amendment, some of us hold very different points of view—no doubt the victory will go automatically to the Government. But the truth is that the House will be taking what is basically a wrong and a minority decision.
We know full well that the great majority of the Press which has expressed itself on this matter has expressed itself in favour of the 10s. unit. The consumer authorities which have expressed themselves have done the same. The original thought of the C.B.I.—I will not go into all the details; they are more appropriate on the next Amendment—was for a 10s. unit. Perhaps I could simply quote from the letter that the T.U.C. sent to the Chancellor:
"The bulk of industry, trade and commerce supported the 10s. system."
That was true then, it is true now, and it is plain daft of the Government and

1837
the Chancellor to ignore what is, in tact, an overwhelming expression of opinion.
Mr. Callaghan: The right hon. Member for Enfield, West (Mr. Iain Macleod) has conveyed a very false impression of the nature of our internal arrangements in the House, which are not as well understood outside as they are here. He hastily corrected himself when I interrupted to point out that there was no three-line Whip and never has been on this issue. This is an important distinction.
Mr. Iain Macleod: Why?
Mr. Callaghan: Anybody who disobeys a three-line Whip is assumed to want to eject the Government. That is what is understood from our normal internal arrangements. I am talking about our side. It may be that an Opposition Member can disregard a three-line Whip or vote against the party line. Indeed, it looks as if it is getting to be that way on my side. There is all the difference in the world between a three-line Whip and a two-line Whip.
The theory is that an hon. Member does not disobey a three-line Whip. On a two-line Whip, which is what we have had all the time, an hon. Member compares the arguments. I should not go into too many of the mysteries of the Whips' Office, but it is well known that the two things are very different, as the right hon. Gentleman recognised. In recognising it, he destroyed his own case.
Mr. F. A. Burden: Would the right hon. Gentleman agree that the two-line Whip in effect is responsible for at least the hon. Member for Stoke-on-Trent, Central (Mr. Cant) voting for the Government when all his views are against them?
Mr. Callaghan: That is a matter entirely for my hon. Friend. Neither the right hon. Member for Enfield, West nor the hon. Gentleman does the House any service by saying that it is turned into a cipher under a two-line Whip. [Interruption.] The right hon. Gentleman persists in saying that under his breath, but he knows that I am right. On the R.P.M. Bill, when the present Leader of the Opposition had a two-line Whip, the Tory Government had a majority of only one. Was the House showing itself to be a cipher then?
Mr. Burden: Not this side.
Mr. Callaghan: Not any side. It has already been pointed out that 39 Members apparently abstained on a three-line Whip. The right hon. Gentleman does not do anybody any good by pretending that the House is a cipher in these matters, especially when he is inaccurate in his reference to the nature of the Whip.
Mr. Iain Macleod: In that case, will the Chancellor comment on two points? If it was a two-line Whip—we all know what a two-line Whip can be—I accept what he says, but will he then explain how three out of the four back benchers who were called from his side of the House declared their view on the 10s. unit and then voted in the Government lobby?
Second, will he explain what the Prime Minister said, as quoted in The Times:
"In another unsparingly ruthless burst, Mr. Wilson said that there would be no abandonment by the Government of their position…there would be no preliminary debate, there would be no free vote"?
Mr. Callaghan: A report in The Times, or any newspaper, whichever it might be, is not something on which I have to comment. We all know how inaccurate the newspapers are in these matters. [HON. MEMBERS: "Oh."] The Times itself changed its attitude on the £ and 10s. unit on the day that it changed its proprietor and editor. Am I supposed to regard that as a serious commentary on public opinion? I do not see any reason why I should listen to The Times on this matter. Where is the cipher in that great organ of public opinion? However, that is another question.
I deprecate the pretence that the House is turned into a cipher because Governments, in successive generations, have put two-line Whips on their own business. It does no service to democracy to suggest that, and the right hon. Gentleman knows it. The Government have a responsibility to give a lead to the House in this matter. They gave that lead, and it was for their own supporters to make up their mind whether they supported it or not.
Now, one other matter on which a great deal has been hung but which really arose out of an answer which I gave to a supplementary question put to me by

1839
the hon. Gentleman the Member for Kidderminster (Sir T. Brinton). It was not a prepared answer, but it was given in reply to a question he asked me about administrative commitments. This has been turned by the hon. Member for Moray and Nairn (Mr. G. Campbell) into not a great conspiracy—I do not say that —but an impression that I had already given private indications and, therefore, the Government could not go back on their decision even if they wanted to. In fact, what I was commenting on, the fact that commitments had been entered into by companies, was a matter of public knowledge. It was not a matter for which the Government had taken responsibility or in which they had encouraged companies to enter into commitments. It was in the public Press that companies and organisations had entered into commitments, and what I was doing, in, I hope, my usual way, was pointing out to the hon. Member for Kidderminster that it was true that certain companies had entered into commitments. I took no responsibility for it, and I had not encouraged them to do it. It was on that matter of public knowledge that I was commenting.
Certain business machine companies had announced their intentions in the Press, and in discussions with officials of the Treasury. I was informing the House as accurately as I could that they had done so, but this did not mean that I or they had thereby entered into certain commitments which would prevent this House, if it wished, from expressing a different view. They are not obliged to inform the Government of their plans or commitments. The Government have no powers to give instructions to any business machine companies or other organisations on what they should do in preparing for decimalisation.
Mr. G. Campbell rose—
Mr. Callaghan: I shall now give way to the hon. Gentleman, especially if he wishes to withdraw.
Mr. G. Campbell: What my hon. Friend the Member for Kidderminster (Sir T. Brinton) asked was this:
"Is not the reason for the Government's obstinacy about this free vote…that they"—
that is, the Government—
1840
"have already taken administrative action…",
and it was in answer to that that the Chancellor said:
"Administrative decisions have, of course, been taken"—
and he then went on to talk about the companies.
Mr. Callaghan: That is exactly what I am saying—administrative decisions—
Mr. G. Campbell: By the Government.
Mr. Callaghan: No, it does not say "by the Government". My answer is there, and these are the facts. Hon. Members can go on twisting them if they want to, but I am trying to give the facts. I hope that they will accept what I say about it because I do not like the suggestion that I entered into a conspiracy with anyone which prevented my being frank with the House. My answer was perfectly straightforward.
"Administrative decisions have…been taken"—
and then there were loud shouts of "Oh", because the Opposition thought that they had got me on the hook. When the shouts had died down, I went on to say—
"and a number of companies, based on the decision announced by the Government over 12 months ago, have already entered into…commitments on this matter. That seems to me to be a matter of elementary prudence and common sense on their part."—[OFFICIAL REPORT, 7th March, 1967; Vol. 742, c. 1243–4.]
That was all it was, neither more nor less.
At this late stage, I only repeat once more that there was no commitment—
Mr. G. Campbell rose—
Mr. Callaghan: If the hon. Gentleman does not wish to withdraw I am not giving way. I have now made it clear on three occasions and he has gone on repeating that there were some—I will not say conspiracy—arrangements between me and the companies.
Mr. G. Campbell: The Chancellor has misunderstood me. I will withdraw that, because I have never said it. All that I asked, which is what I said this evening, was whether this was the reason—whether the Government found themselves

1841
in a position where administrative decisions had been taken. I thank him for explaining tonight that they were not Government decisions. That was not clear from the record. I asked whether the decisions taken by companies did influence him in deciding that it was too late to change. I only asked the question. I have not accused him of any conspiracy, and therefore I have nothing to withdraw on that.
Mr. Callaghan: The hon. Gentleman having started by saying that he withdrew something that he had not said, and having ended by saying that he was not withdrawing what he had said, I do not think that I can carry it further. If he refers back to what he said in his original speech—he has it pretty well written down—he will find that he alleged that it was because of these arrangements that had been made. I have made the position clear to the Committee, and I hope that it will accept what I have said about the matter.
I now turn to the question of public opinion. The right hon. Member for Enfield, West said that there was nobody on the Government's side except the Halsbury Committee. For some reason the Halsbury Committee is entirely discounted. I repeat once more what I have said before in the House that the body which has spent most time on the issue is the Halsbury Committee. It examined 25 possible systems, one of which was the E—cent—½. Therefore, it examined 24 other systems. It held 57 meetings, studied 400 memoranda, examined and questioned 150 machine companies and saw 120 witnesses. Nobody spent more time on the problem than the Committee. It reached a conclusion which the Government after considering the matter finally decided to adopt.
No one can say that there has been a hasty decision. It can be argued that there are alternative decisions but some things stand out clearly. First, there is a very substantial difference of view. Secondly, the Halsbury Committee examined the matter more thoroughly than anybody else. Thirdly, the consumer interests to which the hon. Member for Orpington (Mr. Lubbock) referred are not only extremely well-organised but extremely important, and their interests should be taken into account. They put them to Halsbury and the Committee
1842
considered them. They probably gave as much evidence to Halsbury as anybody else and in the end the Committee came down against them, because there are other interests apart from retail traders and other organisations concerned in the matter.
Mr. Lubbock: It is not just retail traders.
Mr. Callaghan: It is all there. Mr. Lubbock: The consumers?
Mr. Callaghan: The Consumer Council too. I am saying that this was not the only interest affected. Halsbury, having considered all the interests, reached a decision which the Government endorsed. That is the position.
Mr. Lubbock: Why does the Chancellor always try to insinuate that only the traders, and not a vastly greater number of people who buy from them, are affected by the proposal?
Mr. Callaghan: Both are affected, of course, and the Consumer Council is trying to represent consumer interests. But these are not the only interests—these relatively small purchases. I make no insinuations about the matter.
The plain truth is that the argument has been conducted very fully. I see no reason, and no more do the Government, to depart from the Committee's conclusions reached after the most careful and dispassionate consideration that the problem could have had.
Mr. G. Campbell: I am disappointed that neither the Chancellor nor the Financial Secretary has budged an inch. The Financial Secretary's reply simply agreed with the arguments about associability in favour of the 10s. unit and also the argument about the fraction, both of which were included in my concise speech.
The Chancellor has replied to my question about administrative decisions having been taken and I am grateful to him. In saying that I withdraw, I withdraw any imputation that he has read into my remarks, because my inquiry was, in fact, whether the Government found themselves in a position where they thought that it was too late to change. He has gone some way towards answering that, which means that the Government

1843
have been even more obtuse than I had originally thought.
The hon. Member for Stoke-on-Trent, Central (Mr. Cant) spoke for many of his hon. Friends when he clearly said that he was in favour of the 10s. system, but felt obliged, as he had on Second Reading, to vote with the Government. A matter which is not connected with party politics, but which will affect every one of our constituents in three and a half years' time, should not have been made a sub-
ject—whether it was with a two-line Whip or not—on which hon. Members have been put into the position, as the hon. Member clearly felt that he was, in which their party loyalty was in question. That should never have been allowed to happen and I ask my right hon. and hon. Friends to divide the House.
Question put, That the words proposed to be left out, to "and" in line 8, stand part of the Bill:—
The House divided: Ayes 170, Noes 73.

Division No. 381.]

AYES

[9.2 p.m.

Abse, Leo

Fowler, Gerry

Milne, Edward (Blyth)

Allaun, Frank (Salford, E.)

Freeson, Reginald

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

Alldritt, Walter

Gardner, Tony

More, Jasper

Anderson, Donald

Ginsburg, David

Morgan, Elystan (Cardiganshire)

Archer, Peter

Gourlay, Harry

Morris, Alfred (Wythenshawe)

Atkins, Ronald (Preston, N.)

Gower, Raymond

Moyle, Roland

Atkinson, Norman (Tottenham)

Gray, Dr. Hugh (Yarmouth)

Neal, Harold

Bacon, Rt. Hn. Alice

Grey, Charles (Durham)

Newens, Stan

Bagier, Gordon A. T.

Griffiths, David (Rother Valley)

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

Beaney, Alan

Griffiths, Rt. Hn. James (Llanelly)

Norwood, Christopher

Bell, Ronald

Hale, Leslie (Oldham, W.)

Oakes, Gordon

Bence, Cyril

Hamilton, James (Bothwell)

Ogden, Eric

Bennett, James (G'gow, Bridgeton)

Hannan, William

O'Malley, Brian

Bishop, E. S.

Harper, Joseph

Orbach, Maurice

Blackburn, F.

Harrison, Walter (Wakefield)

Oswald, Thomas

Boardman, H.

Haseldine, Norman

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

Booth, Albert

Heffer, Eric S.

Park, Trevor

Braddoek, Mrs. E. M.

Hooley, Frank

Parkyn, Brian (Bedford)

Brooks, Edwin

Horner, John

Pavitt, Laurence

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

Houghton, Rt. Hn. Douglas

Pearson, Arthur (Pontypridd)

Callaghan, Rt. Hn. James

Howarth, Robert (Bolton, E.)

Pentland, Norman

Cant, R. B.

Howie, W.

Price, Thomas (Westhoughton)

Carmichael, Neil

Hoy, James

Price, William (Rugby)

Chapman, Donald

Huckfield, L.

Rhodes, Geoffrey

Coleman, Donald

Hughes, Emrys (Ayrshire, S.)

Robertson, John (Paisley)

Concannon, J. D.

Hynd, John

Ross, Rt. Hn. William

Conlan, Bernard

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

Shore, Peter (Stepney)

Craddock, George (Bradford, S.)

Jones, Dan (Burnley)

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

Crawshaw, Richard

Jones, J. Idwal (Wrexham)

Short, Mrs. Renée(W'hampton,N.E.)

Crosland, Rt. Hn. Anthony

Jones, T. Alec (Rhondda, West)

Silverman, Julius (Aston)

Cullen, Mrs. Alice

Kerr, Russell (Feltham)

Slater, Joseph

Dalyell, Tam

Lestor, Miss Joan

Small, William

Davies, Dr. Ernest (Stratford)

Lever, Harold (Cheetham)

Snow, Julian

Davies, G. Elfed (Rhondda, E.)

Lomas, Kenneth

Steele, Thomas (Dunbartonshire, W.)

Davies, Ednyfed Hudson (Conway)

Loughlin, Charles

Swain, Thomas

Davies, Ifor (Gower)

Lyon, Alexander W. (York)

Taverne, Dick

Davies, S. 0. (Merthyr)

Lyons, Edward (Bradford, E.)

Thornton, Ernest

Delargy, Hugh

Mabon, Dr. J. Dickson

Tinn, James

Dempsey, James

McBride, Neil

Tuck, Raphael

Diamond, Rt. Hn. John

MacColl, James

Urwin, T. W.

Dickens, James

MacDermot, Niall

Varley, Eric G.

Dobson, Ray

Macdonald, A. H.

Wainwright Edwin (Dearne Valley)

Dunn, James A.

Mackenzie, Gregor (Rutherglen)

Walden, Brian (All Saints)

Dunwoody, Mrs. Gwyneth (Exeter)

Mackie, John

Wallace, George

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

Mackintosh, John P.

Watkins, Tudor (Brecon & Radnor)

Eadie, Alex

Maclennan, Robert

Wellbeloved, James

Edwards, Rt. Hn. Ness (Caerphilly)

McNamara, J. Kevin

Williams, Alan (Swansea, W.)

Ellis, John

MacPherson, Malcolm

Williams, Clifford (Abertillery)

English, Michael

Mahon, Peter (Preston, S.)

Wilson, Geoffrey (Truro)

Ennals, David

Mahon, Simon (Bootle)

Wilson, William (Coventry, S.)

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

Manuel, Archie

Winterbottom, R. E.

Fernyhough, E.

Mapp, Charles

Woodburn, Rt. Hn. A.

Fitch, Alan (Wigan)

Marquand, David

Woof, Robert

Fletcher, Raymond (Ilkeston)

Marsh, Rt. Hn. Richard

Yates, Victor

Foley, Maurice

Mason, Roy

Foot, Michael (Ebbw Vale)

Mendelson, J. J.

TELLERS FOR THE AYES:

Ford, Ben

Millan, Bruce

Mr. Ernest Armstrong and

Forrester, John

Miller, Dr. M. S.

Mr. Harold Walker.

NOES

Astor, John

Hobson, Rt. Hn. Sir John

Pearson, Sir Frank (Clitheroe)

Bessell, Peter

Hooson, Emlyn

Peel, John

Buchanan-Smith,Alick(Angus,N & M)

Jennings, J. C. (Burton)

Percival, lan

Buck, Antony (Colchester)

Johnston, Russell (Inverness)

Pink, R. Bonner

Burden, F. A.

Kaberry, Sir Donald

Pym, Francis

Chichester-Clark, R.

Knight, Mrs. Jill

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

Clegg, Walter

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

Sinclair, Sir George

Cooke, Robert

McAdden, Sir Stephen

Steel, David (Roxburgh)

Crawley, Aidan

MacArthur, Ian

Stoddart-Scott, Col. Sir M. (Ripon)

Cunningham, Sir Knox

Macleod, Rt. Hn. lain

Thatcher, Mrs. Margaret

Currie, G. B. H.

McMaster, Stanley

Turton, Rt. Hn. R. H.

Dalkeith, Earl of

Mawby, Ray

van Straubenzee, W. R.

d'Avigdor-Goldsmid, Sir Henry

Maxwell-Hyslop, R. J.

Wainwright, Richard (Colne Valley)

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

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

Walters, Dennis

Dodds-Parker, Douglas

Mitchell, David (Basingstoke)

Ward, Dame Irene

Doughty, Charles

Monro, Hector

Weatherill, Bernard

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

Montgomery, Fergus

Whitelaw, Rt. Hn. William

Eyre, Reginald

Morgan, Geraint (Denbigh)

Wills, Sir Gerald (Bridgwater)

Farr, John

Morrison, Charles (Devizes)

Winstanley, Dr. M. P.

Grant, Anthony

Murton, Oscar

Wolrige-Gordon, Patrick

Gresham Cooke, R.

Nicholls, Sir Harmar

Younger, Hn. George

Gurden, Harold

Nott, John

Hall, John (Wycombe)

Orr-Ewing, Sir Ian

TELLERS FOR THE NOES:

Harris, Frederic (Croydon, N.W.)

Osborn, John (Hallam)

Mr. Eric Lubbock and

Higgins, Terence L.

Page, Graham (Crosby)

Mr. Gordon Campbell.

Hiley, Joseph

Page, John (Harrow, W.)

Mr. Patrick Jenkin: I beg to move Amendment No. 2, in page 1, line 8, to leave out from 'sterling' to end of line 9 and to insert:
'the florin, the florin being one-tenth part of the pound sterling and the cent, the cent being one-hundredth part of the florin'.

CUPRO-NICKEL

100 cents (florin)

…

…

11·31036

2·8500

Three-quarters copper one-quarter nickel

·0646

50 cents

…

…

5·65518

2·3595

·0375

25 cents

…

…

2·82760

1·9405

·0188

BRONZE

10 cents

…

…

8·91000

2·7380

Mixed metal copper, tin and zinc

·1875

5 cents

…

…

4·45500

2·1440

·0938

2 cents

…

…

1·78200

1·7145

·0375

WHITE METAL

1 cent

…

…

·89100

1·7500

Mixed metal aluminium and magnesium

·0282

Mr. Jenkin: It was my misfortune on a previous occasion to follow the debate and defeat of the 10s. Amendment. It is right to point out that the arguments for the florin-cent system are quite different from those for the 10s. system, and that they have not had anything like the same amount of public attention. They were canvassed at great length in Committee, where we had the Treasury's answers for the first time. However, this is the first occasion on which the argument for the florin-cent system has been deployed on the Floor of the House, and I welcome the fact that Mr. Speaker found it possible to select the Amendment for debate.
The supporters for the system now include not only a great many £ supporters,
The Chairman: With this Amendment it would be convenient for the Committee to discuss Amendment No. 9, in Schedule 1, page 6, leave out lines 8 to 17 and insert:
who have always recognised that the major unit should be the £ but who disagree with the Government's sub-division, but a growing number of those who hitherto supported the 10s. system, but who, having heard Treasury Ministers again and again, now believe that there is no hope of budging the Government from the £.
My right hon. Friend the Member for Enfield, West (Mr. Iain Macleod) referred to the C.B.I. as having been originally a £ supported. Its Technical Director, Dr. Sharp, made it clear in a letter to the Financial Times that the C.B.I. had always been in favour of a halfpenny equivalent and had always supported the 10s.—cent—½ I system. But, as the Financial Secretary rightly pointed out, the

1847
presence of the non-decimal half coin is one of the strongest arguments against any system which the Government have adopted and, therefore, it is unlikely that anyone would seriously look at the 10s.— cent—½ system now.
The £—florin—cent system has come to be known as the "mil system", because that was how the Halsbury Committee described it. But I hate that name because it has an impersonal, scientific ring. If I may describe it briefly, the £ is divided into 10 florins, and the florin is divided into 100 cents. As for coins, the florin is retained, the shilling becomes 50 cents, 6d. becomes 25 cents and, below that, there are three bronze coins valued at 10 cents., 5 cents and 2 cents, and a white metal coin for 1 cent. The 1 cent coin is necessary for reasons which I shall not go into now, but which the Financial Secretary said he accepted as being valid if the system was to exist at all.
The main advantages are, first, that it retains the £. I speak as one who voted with the Government on Second Reading. It is one with which the Government must have sympathy and, as a result, I hope that they will look favourably upon this system.
The subsidiary advantage is that it allows the retention of the 6d. coin, which is most important for all coin-operated machine transactions. I shall be saying something about telephones in a moment. The argument which has weighed with most people, and is increasingly weighing with those who are coming to grips with the realities of the decimal system, is that it allows the retention of a ½d. equivalent. The main disadvantages, which were summarised by the Financial Secretary in Committee at column 131, were, first, that it involved the resurrection of the farthing equivalent. I admit that, but I do not necessarily regard it as a serious disadvantage. It would be no smaller, and a good deal larger, than some of the smallest coins of most of the European countries.
9.15 p.m.
The second objection was that calculations would be more difficult because of the intermediate unit. It is interesting to note that the Halsbury Committee dismissed the system early on because it thought that it involved three places of decimal after the £, and it said that it
1848
was impossible to do mental arithmetic to three decimal places. I am not asking anybody to do that, because we have the intermediate unit, the florin. I confidently expect that any prices below £1 will be expressed in terms of florins and two decimal places of cents, and when we got to sums above £1 ordinary amounts will be expressed in florins and two places of decimals, just as, at present, if one buys a pair of shoes the cost in never £5 3s. 6d., but 103s. 6d. In the same way we could have 10 florins and two places of decimals, so I do not give much weight to the difficulty of calculation.
The hon. and learned Gentleman relied on the Broadbent experiments, reported in the Halsbury Report, but Dr. Broadbent was looking at the intermediate system and the two decimal place system, that is to say a major unit divided into ten intermediate units, which are then divided into ten minor units. Clearly, there is no advantage in that, and his experiments confirmed that view.
The Financial Secretary's third argument was poorer associability, so far as it is important, and on the whole I agree with the Government that it is relatively unimportant. I accept its validity, but it does not add up to much. The major argument centres around business machines. I concede that the existing press-down machine registers could not be adapted to take a £—florin—cent system and would all need to be renewed. The total figure involved is about £30 million, set against the other expenses which are likely to be incurred, which includes a substantial sum for the modification of business machines, of about £130 million, which perhaps need not be an insuperable obstacle.
The hon. and learned Gentleman's next objection was that it would require additional coins. I admit this, but this is an inevitable feature of any system which will give the added flexibility which I regard as essential for any decimal system.
Reference has been made to the speeches of Gladstonian length in Committee. I shall do my best to avoid that. Nobody seemed to mind in Committee, but after two late nights I shall do my best to keep my speech short. The arguments are general, and I must deploy them, but I shall be as brief as possible.
I need say nothing about the argument for the £, because that is not germane to my case. I want to concentrate primarily on the case for the halfpenny equivalent, because the Amendment stands or falls by the strength of that. The Government's half new penny is equivalent to 1·2d. of our existing currency. This would be the smallest unit. It would be the smallest coin at which any price could be expressed, or any price variation could be achieved. The Financial Secretary said that the present halfpenny would be demonetised before D-day, probably in 1970. The Halsbury Committee, in Chapter IV of its Report, examined the question of the usefulness and value of the halfpenny, and said in paragraphs 130 and 131:
"It is equally clear, in our view, that a halfpenny is declining in usefulness and popularity and that its equivalent will not be needed as a permanent feature of a decimal system…
The question remaining in our minds was whether the halfpenny or its equivalent should, and could, be incorporated temporarily into a decimal system, perhaps, as a fraction of a cent, without damage to the permanent structure. We concluded on balance there was no strong reason for retaining the halfpenny equivalent if the structure of a new decimal system would be sounder without it…"
All I would say about that is that the conclusion of the Halsbury Committee was reached after it had dismissed any system based on the division of the £ into 1,000 sub-units. It had clearly in mind that if it had to have a halfpenny equivalent, there would have to be a quarter cent in addition to the half cent. Perhaps it is not surprising that it did not find arguments favouring this.
The Halsbury Committee's examination was based on the frequency of use and importance of the halfpenny and it argued that it had a declining usefulness, based en the fact that the farthing went out in 1960 and the halfpenny would be out by 1972. For the frequency of use it looked at the retail price index and four representative household budgets. In examining the index it found that 10 per cent. of all items and 13 per cent. of food items were quoted in amounts that ended in a halfpenny, but of the budgets they found that 16 per cent. of all purchases ended in a halfpenny. The Committee concluded that the immediate effect of a change from our present system to a decimal currency that did not have a halfpenny equivalent would be an increase
1850
in the cost of living three times as great as if there were no halfpenny involved.
The Financial Secretary argued that this would be a once-for-all costs and pointed out the recommendation of the Halsbury Committee that the lower income groups will have to be protected against this increase. What the Committee did not advert to—but which, nevertheless, is coming to be regarded as one of the strongest arguments for retaining a halfpenny equivalent—is that the absence of any halfpenny equivalent will be a continuing disadvantage for many years. Many items which are brought daily, or certainly weekly, by families, are in small quantities or units which will require either the use of a halfpenny in the price or price changes taking place in variations of 1…2d.
I quoted the Committee's conclusion that 66 per cent. of all money transactions involve prices less than 4s. If the smallest price movement has to be the new halfpenny—equivalent to 1…2d.—the consequence in all these small transactions will be that rises in prices will tend to be delayed longer than they should, and when they come they will be very much larger than they otherwise would have been. But, perhaps more important, price reductions will become almost impossible. People are prepared to reduce prices by small amounts, but if the amount is likely to be 5 per cent. or 10 per cent. of the price of the product a price reduction is most unlikely.
This covers most of the normal consumer goods involved in daily and weekly purchases—bread, milk, eggs, processed food, confectionery of all sorts, cakes, cigarettes and beer. Narrow price phasing is essential for all these products and, furthermore, will continue to be essential for many years to come. I cannot agree with the conclusion of the Halsbury Committee that the halfpenny will have outlived its usefulness in another five years' time. Evidence is now to be found that many trade organisations are recognising that their businesses and customers will be badly hit if the halfpenny is demonetised three years from now and an equivalent is not provided.
The dairyman with milk, the Confectionery Alliance over the whole range of chocolates and sweets, many retail food organisations, particularly those which deal in processed foods, which come in

1851
very small quantities, laundries, breweries, the tobacco industry—a packet of 10 cigarettes never changes in price, apart from duty, by less than a halfpenny—all these must have flexibility of pricing, and the halfpenny equivalent would permit the necessary price changes. For instance, 1·2d. on something priced at ls. is a very large rise—or half a new penny on a commodity that costs 5 new pennies.
One must also remember that we will be dealing in the not-too-distant future with Continental measures. If a litre of petrol has to change in price by a minimum of half a new penny that is equivalent to a change of 5½d. a gallon. I just quote that as one example, but I have here an extract from a letter from a well-known economist, Mr. Maurice Zinkin, who writes:
"The very fact of price changes as great as 10 per cent. on mass consumption goods would be upsetting in a marketing sense and might well necessitate the very kind of heavy promotional spending the Government is anxious to discourage. In a sense the 1·2d. minimum unit operates against price competition and in favour of other marketing devices. Dutch experience, for example, reinforces this point: there you find much more intense price competition within the retail trade than here and much of this would be completely impossible if the minimum unit were 1·2d."
The weight of the case is conceded by the Government, because the Financial Secretary devoted a considerable part of his speech in telling traders how they could get round this difficulty. He suggested a number of elaborate and more or less cumbersome devices to overcome what he tacitly admitted was a lack of flexibility in the Government system. He said that traders could vary the size or quantity of the goods they were selling so as to vary prices for smaller amounts. He said that they could sometimes sell two or three items at a time.
I hope that he will forgive me if I remind him that he applied that idea to stamps, but that when I asked him what would be the amount of the stamp that could be bought two or three at a time he got tied up in knots. He said that traders could vary the price of some products but not of others so as to leave them with the same overall profit margin.
One must point out that variation of size or quantity is totally illegal in
1852
the case of quite a large number of products, where consumer protection legislation lays down the sizes or quantities in which goods must be sold. I was interested to hear this morning, in the programme "Today", an inspector of weights and measures complain bitterly that some traders had used the period of price freeze to vary the size or quantity of goods, thus circumventing the Prices and Incomes Board. He evidently thought that the Board legislated in these matters. Halsbury conceded that there was no great alleviation here.
There is the Financial Secretary's suggestion about selling two or three at a time. What happens with people's impulse buying of confectionery—a Mars Bar or a packet of chocolate? If they have to take two or three in order to take advantage of a price change they will not buy in that way. Are people who want a collar laundered by a laundry that wants to change its charge to wait until they have three collars to be laundered? What about beer? I had a letter from one of the smaller brewers. Have we to buy two pints of beer instead of one because the currency system is not sufficiently flexible to allow the purchaser of one pint an advantage?
Seriously, I must say that the reverse is the case. That is where the Halsbury Committee went wrong, because it did not appear to take account at all of the fact that there are a large number of our fellow citizens who already, because of circumstances, have to buy in very small quantities indeed. They buy one egg. They buy apples in ones and twos, and buns from the baker in singles. If the prices of such things as these have to be changed by 1·2d. a time, those are the people who will be hit harder than most.
This is, let me repeat, not once for all. It is continuing the disadvantage of an impracticable price system. One knows, one has had complaints from people who buy fuels in prepacked packages, of the uplift which has to be paid if one buys fuels in 14 lb. or 28 lb. packages. The same would apply to eggs and everything else if the unit were small.
9.30 p.m.
The third suggestion was that varying prices of some products and not others would maintain profitability. All I can say is that this is quite unrealistic. Take

1853
one example, processed meat, products which, I believe, are called in the trade balancing pig. I am glad to see the Joint Parliamentary Secretary to the Ministry of Agricuture here, for he will appreciate the argument. If one makes a large number of different products from one basic starting point, pig, the relationship of the prices of the different products one makes is absolutely crucial to making sure that one's sales, overall, balance, and that one is not left with a large quantity of something, having sold out of something else. The idea that one can increase the size of sausages, and leave aside the price of bacon or pork, is ludicrous. Retail prices must reflect very closely availability of and pattern of demand for products. Where they are disconnected products, one simply cannot alter the pattern of demand and upset the whole of the marketing arrangements.
Honestly, this one is totally impracticable. If I may say so without offence to the Financial Secretary, it really reeks of the cloister of seclusion of the Treasury and of men who have never had to sell anything in their lives at all. I am bound to conclude from the weight of objections which have been aroused that the Government system on this point really constitutes a major disadvantage, and one of which I believe the Government have got to take account.
But it does not stop there. I have dealt with this merely from the domestic aspect, but there is what I called in Committee the international case for the ½d., and this the Financial Secretary persistently chose to misunderstand, but I believe that it is one of considerable validity.
We start from the fact that on the Continent they will have for many years, till they have reforms, minimum units of currency very much smaller than the 1·2 cent which we are being threatened with, and of course, in individual markets, goods will be competing in terms of currency. Where we are exporting to France we will sell goods for francs and centimes, and if we are exporting to Germany, it will be marks and pfennigs. Correspondingly, for imports we shall be paying in the new £ new pence and half new pence. But the fact that they in their countries will have a more flexible currency system, one which will allow smaller price gradations, is an advantage to them in selling to us. The fact that we will have a less
1854
flexible system will put our manufacturers and traders under a penalty and a difficulty which they ought not to have to face. The hon. Member for Chislehurst (Mr. Macdonald) shakes his head. He shook his head a great deal during my speech in Committee. I hope he will let me finish my point. I shall not elaborate it. I will illustrate it with one example.
Let the example be confectionery. A great deal of confectionery is exported. It is produced on highly automatic production lines—produced and packed. Obviously, it is to the advantage of the trade if it can produce and pack for both the home market and the export market on the same production lines. This is what it will always aim to do. Suppose it did what the Financial Secretary recommended, because it wanted to make a price variation. It would have to alter the size of a pack or the size of a product in order to produce for the British market. It would be totally impracticable to produce the same pack for both the continental and the British markets.
Therefore, the trade would be landed with two lines of production, one for the home market and one for the export market. That is simply because the currency system—the coins—which their customers would have to use in retail shops in this country was not as flexible as the currency in the export market. This will be to their disadvantage.
I beg the Treasury to listen to the case which has been put to me with great force from a number of industries which feel that their competitive position will be threatened and that the efficiency of their operations will be hampered if they have to deal with less flexible currencies than their competitors have in their own markets. Just as a country with a sophisticated and flexible capital market has a competitive edge over a country with a poor and inflexible capital market, so a country with a flexible currency system will be better placed to compete internationally than will a country with an inflexible system.
Mr. Iain Macleod: May I ask my hon. Friend why in Australia they have no halfpenny equivalent and do not intend to have one, and yet they have not had rises in prices?
Mr. Jenkin: I do not think that one can take the argument from other countries. I suggest that a higher proportion of our population than in Australia are the people to whom I was referring earlier, who buy in one's and two's. No doubt, my right hon. Friend saw the article by Harold Wincott in the Financial Times the other day in which he said that the Australians were selling cars and houses in £s and guineas because it was too difficult to operate in 10s. An inflexible currency is just as much a restrictive practice as is an inflexible labour force.
That is the international case, which many industries are pressing hard, and it will be made worse if we have an added-value tax. At the point at which the tax is paid, it is a paper transaction—
Mr. Speaker: Order. I do not want to appear discourteous, but I remind the hon. Member of what he said at the beginning—that other hon. Members hope to take part in the discussion and that we cannot debate now the added-value tax.
Mr. Jenkin: I was not seeking to make a case for the added-value tax but merely pointing out, as I did on Second Reading, that the existence of an added-value tax and the need to have flexible price phasing to take account of it at the retail level is a point of great importance. I believe that we shall need the halfpenny whether we go into Europe or not—I very much hope that eventually we shall go into Europe—and that if we go into Europe the case for it becomes even stronger.
Mr. J. T. Price: During the afternoon I spent several hours in the Royal Mint at Tower Hill witnessing the production of a new breed of halfpennies. Millions of them were pouring off the Royal Mint at the order of the Treasury. Millions of new halfpennies are being minted at the moment, and they must be put to some use.
Mr. Jenkin: I am grateful to the hon. Member for Westhoughton (Mr. J. T. Price) for his intervention. I had not intended to make the point, but perhaps I may do so in one sentence: the number of halfpennies minted in each of the last four years has increased substantially over the year before. If we wish to consider foreign comparisons, then the
1856
number of very small coins—pfennigs in Germany, cents in Holland and cents in the United States—which other countries find it necessary to mint every year is adequate evidence of the value of these coins. The Financial Secretary tried to laugh it off by saying, "Every time you come back from abroad you have your pockets full of useless little coins". Of course, once one comes out of a country one no longer needs the currency of that country. But while in that country one is using the currency all the time. All hon. Members who travel on the Continent have experience of that.
I believe that both the domestic and the international arguments are of great weight and are supported by an increasing number of trades, and would be supported by their customers if the issues were properly appreciated. May I refer briefly to the 6d.? The hon. Member for Orpington (Mr. Lubbock) referred to the point about telephones on Second Reading. He said that there would inevitably be a 1s. telephone call.
We went into this in Committee. I have received a long explanatory letter from the Financial Secretary, but I will not bore the House by reading it. It points out that the Post Office has a problem which it has not yet solved; either it will have to vary the amount of time given for different coins or eventually go in for the ls. telephone call. The Post Office has not yet decided what will be done, and, although it could alter all the machines in such a way to solve this problem, there is no indication that that will be done.
Fun was made of the fact that only a few Middle Eastern countries have so far divided the £ into 1,000 units or into an intermediate florin and 100 units. I remind hon. Members that many centuries ago we adopted the Arabic system of numerals. Would it be so odd if we were to adopt a system of currency not all that different from the Arabic?
The Halsbury Report mentions something of significance and it is astonishing that little importance has been attached to it today. Appendix 3 sets out the currency systems of a number of countries. It shows that, without exception, every country that has a currency system which is divided by 100 has a main currency unit worth 10s. or less. It also shows that

1857
every country with a main unit worth more than 15s. divides it either by 240 or 1,000. On this basis the 10s. system conforms, the £-florin-cent system conforms, but the £-cent-half system does not conform.
If the Government are determined to press ahead with their present proposal, we will be the only country in the world which denies what appears to be the logic of history or of common sense. By choosing the £ and a system of cent-half cent, they are at once denied the flexibility which any currency system, particularly in a country as advanced as ours, should contain. The Government must accept the corollary that if they are determined to keep to the £—and I trust that those who recognise the inevitability of this will also accept the logic of dividing it in a more sensible and rational way: the florin and the cent—both in the short-term and long-term they would be wise to heed the arguments of my hon. Friends and myself. Ultimately, we may have a European currency. It is essential that, in the intermediate period, we should have a currency with which we can work and which represents the logic of the Government's choice of the £.
That is the case for the £-florin-cent system. The Government should take note of our remarks, even at this late stage; but if they do not listen to us, perhaps they will listen to what is said in another place.
Earl of Dalkeith: My hon. Friend the Member for Wanstead and Woodford (Mr. Patrick Jenkin) advanced the case for the Amendment with such cogency and so comprehensively that I need detain the House only momentarily. I support the Amendment, although I was at first somewhat loath to add my name to it because it appeared to be an admission of defeat on the issue of the 10s. unit. However, the pill is made slightly sweeter when one realises that if the Government go on in the way they have been going on, by the time we become decimalised the £ will be worth only 10s., anyway.
I am pleased to see the Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food in his place, because what I have to say concerns him. I am sure that he is well acquainted with the views of certain parts of the farming industry, especially those concerned with
1858
milk. They fear that, if the Government have their way the minimum unit will be too large, and I therefore welcome my hon. Friend's suggestion for a smaller one. I hope that the Parliamentary Secretary will talk seriously with the Financial Secertary and that I can wrest his mind away from a previous argument about whisky to the subject of milk.
Another attraction of the florin is that, according to my information, when it was first struck, about 100 years ago, it was solely to facilitate a change to a decimal system, which shows that our forefathers had a good deal of sense. The florin makes for an easy subdivision and the continued use of shillings and sixpences would be a great advantage in telephone boxes and other coin machines. I beg the Government to think seriously before digging in their toes as they have on so many other parts of this Measure.
9.45 p.m.
Mr. James Allason: I did not serve on the Standing Committee, so this is my first opportunity of warmly supporting this proposal. A minimum unit of 1·2d. is thoroughly unsatisfactory. The Government propose a new halfpenny, which they will then get rid of as soon as possible, which shows a guilty conscience about it. My hon. Friend the Member for Wanstead and Woodford (Mr. Patrick Jenkin) has shown the grave disadvantages of this coin and the prospect is terrifying. I would much prefer 1,000 units to the £, which would give infinite gradations and changes of price.
Perhaps the cloistered Treasury officials believe that it will be necessary to provide precisely the right number of coins for a 7-cent Mars Bar or any other item, but a large number of items are bought in supermarkets. One is charged on one bill for a large number, and although each may cost very little, there will be no difficulties in giving change if the bill is for 139 cents and the customer offers 140. Long ago, when a farthing was the equivalent of 1 cent, I was given a box of matches in change instead. I do not know what it is now, having given up smoking, but it is certainly not a farthing.
Another great merit concerns slot machines. It will be difficult for manufacturers if a significant number of these

1859
coins is withdrawn. The retention of the 6d. would be extremely valuable.
A third consideration is the ease with which people can translate the old coins into the new coins; one cent is a farthing, four cents the present Id. How people are to calculate what one new penny will be and to work out that it is 2·4 old pennies, I do not know. I think that they will get into as much muddle as the French did when they changed from old to new francs. There is a complete absurdity in the Government's proposal to have a new halfpenny. I do not know whether it will always be written as a fraction. In some cases it will have to be written as a decimal. If we have 0·5 we might as well have the whole range from 0·1 to 0·9. Why not accept one to nine cents? That is a possibility. I hope that there is still a chance of a deathbed repentance by the Government.
Mr. John Tilney: I support my hon. Friend the Member for Wanstead and Woodford (Mr. Patrick Jenkin). I have come to the conclusion, having been an opponent of the 10s. unit, that there is a strong argument for the £, but it is a completely different one. I want to see the consumer protected. I believe this new currency will not protect the consumer as much as he or she should be protected.
I accept what my hon. Friend said about the extra cost of machines. My hon. Friend mentioned the sum of £30 million. I remember arguing with a friend on the Exchange flags in Liverpool when we discussed what had happened to various historic currencies in Europe and what might be the danger signal for the currency of this country. I remember him saying "When the halfpenny goes out that will be a danger signal". That is exactly what is happening. It is bound to lead to inflation.
The hon. Member for Westhoughton (Mr. J. T. Price) mentioned the number of halfpennies which are still being minted. I think there are 800 million at present in use. I am certain that we should retain the equivalent. My right hon. Friend the Member for Enfield, West (Mr. Iain Macleod) spoke of Australia, but Australia is a richer country than we are. Unfortunately, we are now the poorest white English-speaking
1860
people in the world in income per head. That is a sobering thought. I want prices to be no higher than necessary. The halfpenny enters into wage rate negotiations and into piecework rates. Although the Financial Secretary may argue that there can be a notional halfpenny for discussing wages, it would be better to have a real unit.
We have to compete in the markets of the world, and to do so we must be able to shade prices. We have to do that at home as well as overseas. Some of us want to see a European currency, but that is a long way off. In the meantime I want capitalism to work well, but it will work well only if it is flexible and not rigid. My hon. Friend the Member for Wanstead and Woodford referred to a value-added tax. I think a sales tax might come if we could get into the Common Market. I point out to the Financial Secretary that if we have to have a sales tax it will not be workable on values less than 120 cents. On an item which might cost 17½ new cents, the equivalent of 3s. 6d., a sales tax at the rate of 1 per cent. would require payment on it of ·175 new cents and that could not be levied.
I am a non-smoker. But the manufacture and the smoking of cigarettes is important to many people on Merseyside. This example has already been sent to the Treasury, but the House should be aware of it. A change in the retail price of cigarettes of a halfpenny for 10 would make a difference to the public of about £24 million a year, but if one cent valued at 1·2d. were the smallest coin, the minimum change in retail expenditure would be about £58 million. About half the 21 million purchases of cigarettes which are made every day consist of individual purchases of 10 packings. This is a sobering thought. If the smallest coin were the equivalent of 1·2d. future changes in price would present a very difficult position for the tobacco industry. The halfpenny per unit of transaction is a comparatively large figure compared with the cost, profit and distribution margin.
It is no good saying that the industry could vary the weight of cigarettes, because I understand that this is very difficult to achieve technically and would alter the character and the acceptability of such cigarettes. I fear that the Government will go down in history as one who

1861
have not only put up the cost of living but who have gone out of their way by the Bill to put it up even further.
Mr. Iain Macleod: In a very brief speech I can at least demonstrate that we on this side have a free vote by disagreeing, with all my hon. Friends who have spoken on the Amendment. My right hon. Friend the Member for Reigate (Sir J. Vaughan-Morgan) said in Committee that until he met my hon. Friend the Member for Wanstead and Woodford (Mr. Patrick Jenkin) he thought that he was the only £—mil—er in the kingdom. Personally, I wish that he had remained so.
We are urged to accept a currency, or something similar to it, that is in use in Egypt, Jordan, Iraq, and one or two other countries. They sound to me more like a list of General Dayan's battle honours than countries whose currencies we should seek to emulate, because the unhappy truth is that the standard of living in those countries is so lamentably low that they have to have a lamentably low coin to match it.
We are told, secondly, that as a matter of tactics, because the Government have decided on the £, which so many of us on this side think is wrong, we should abandon what we think is right. With due respect to my hon. Friends, I cannot think that this is an excellent posture for the Opposition to take. I entirely agree with my hon. Friend the Member for Wanstead and Woodford about the attitude of the C.B.I. Its attitude was that it preferred the 10s., but it wanted the 10s.—cent—½—cent. I quote from a C.B.I. document:
"If the Government insisted on retaining the £ as the major unit, as seems the more likely on the evidence to date, then it was recommended, but again not unanimously, that the C.B.I. should advocate some form of £—florin—mil system."
The only case for the £—mil is the halfpenny equivalent.
With all respect to very eloquent advocacy—I have read with great care everything my hon. Friend said in Committee—I believe that my hon. Friend's case is hopeless. First, he does not just reinstate the halfpenny. He reinstates the farthing. He reinstates a coin even smaller than the farthing, which we demonetised some years ago. I am told
1862
that the cost of making the one—mil piece would be 50 per cent. greater than the face value of the coin. That does not seem to me to be a very rewarding exercise on which to embark.
The second point is that of associability. Whatever strength it is given, and I give it a good deal—
It being Ten o'clock, the debate stood adjourned.
Ordered,
That the proceedings on the Decimal Currency Bill and the Public Works Loans (No. 2) Bill may be entered upon and proceeded with at this day's Sitting at any hour, though opposed.—[Mr. MacDermot.]
Question again proposed, That the words proposed to be left out stand part of the Bill.
Mr. Macleod: On the question of associability, the advantages of the mil system are nil. Also, it introduces an intermediate unit of account in the florin. I thought that my hon. Friend skated over the difficulties of doing this. An intermediate unit of account was rejected, rightly, in my view, by Halsbury. Fourth, it would greatly increase the cost of conversion.
All this is to be accepted for the benefit—I do not deny it for a moment—of having a halfpenny equivalent. I have pointed out that the countries most closely comparable with ours with experience of this problem—Australia is an example—have not got a halfpenny equivalent, they do not intend to have a halfpenny equivalent, experience has not shown that they need it, and there has been no marked rise in prices. It is difficult to see what is left of my hon. Friend's case, apart from his skill in advocacy, when one looks at it in that way.
I do not even consider that the £—mil system is second in the list. I even prefer the Government's £—cent—½—cent system to it. [HON. MEMBERS: "No."] I do. We have a free vote, and that is what I say. In several speeches, I made my own order of priorities clear. First, the 10s. unit. I have been called the "arch-ten-bobber". Second, the 100 pennies. Third, the Government's system. Fourth, the florin—mill system. That is my view, and I think that the

1863
experience of all comparable countries bears it out.
I pay a genuine and warm tribute to my hon. Friend the Member for Wanstead and Woodford, but I am sure that he is chasing an illusion on this matter. Strange to say, after the Committee stage of the Finance Bill, I urge the Financial Secretary not to listen to my hon. Friend's skilled advocacy.
Mr. MarDermot: The right hon. Member for Enfield, West (Mr. Iain Macleod) has put the arguments concisely and clearly, stealing my thunder.
The hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin) claims that his £—mil system, in whatever guise he dresses it up, is now winning the support of "ten-bobbers". With respect, it is not, if one means by that those who supported the 10s.—cent system. There were people who wanted a 10s. major unit for another system, the 10s.—cent—½ cent system, namely, those who wanted to preserve the halfpenny equivalent and who thought, rightly, in my view, that the best system for preserving a halfpenny equivalent would be the 10s.—cent—½ cent system. For reasons which I need not go into in detail now, it would be very much easier and simpler to graft a half cent on to the 10s.—cent system than to endure all the complications of the £—florin—mil or £—florin—cent system. All that has happened is that, having lost the battle on the 10s. major unit, those who want the halfpenny equivalent are now rallying for some form of £—florin—mil system.
As everyone agrees, the whole case turns on the question: Do we need to retain a halfpenny equivalent? The Halsbury Committee, examining matters in 1962 and thereabouts, estimated that our present halfpenny would reach the term of its natural life in about 1972. Hon. Members are horrified at the prospect of our having a currency without a halfpenny equivalent. I do not know what they would have felt living in this country in 1914, when the smallest coin was the farthing. In fact, the farthing of 1914 was worth more than double the halfpenny of today, which hon. Members are so terrified of losing. [Interruption.] I know that the right hon. Member for Flint, West (Mr. Birch) would far prefer
1864
to be living in 1914. He reflects that in nearly every speech he makes in the Chamber. I am glad to be carrying him with me on this occasion.
What is the strength of the case for the halfpenny equivalent? It is put forward with three arguments. The first is that if we get rid of the halfpenny the immediate effect will be inflationary and there will be a continuing inflationary effect thereafter because of rigidity of price changes. Secondly, it is said that it will prevent proper price competition, and consequently will reduce industrial efficiency. Thirdly, it is said that it will prevent refinement of our indirect tax system, especially in relation to a value-added tax.
In so far as there is substance in any of those arguments, I believe that they have been grossly exaggerated, and in some there is no substance at all. On the alleged inflationary effect, the fact is that for many items we are not tied to the smallest unit of currency for pricing purposes any more than we are tied to the halfpenny today. As I pointed out in Committee, we can and do buy eggs priced in terms of a farthing unit. We must buy more than one egg at a time, but people do this every day.
The manufacturer can and does sell goods in units of very large numbers, and can now price his article in terms of several decimal places of a penny if he wishes. It is only at the retail end that the problem arises, namely, when one must express a price in actual cash. Even then it is only with the kind of items sold in single numbers that the problem arises in particular.
But there are many ways in which the problem can be overcome. There can be adjustments by various forms of price variation, variation in size and quantity of the product, and variation in the price of other products—what the hon. Gentleman calls balancing the price of the pig. That is the way that retailers approach their whole pricing system today.
The hon. Gentleman asked what we would do if we were to adopt the continental system and sell petrol by the litre. He asked how it would be possible to raise the price of petrol if it must be expressed in terms of a unit with which the smallest increase is 1·2 of our present

1865
pence. The answer is that people do not buy petrol by the litre, but by £1 or £2-worth, or get their tank filled up. There is a machine which clocks up the cost, and petrol can be priced at 5·24 new pence per litre, or something like that, without any difficulty.
We hear of the problem of pricing beer. Here the problem is not how to price the pint but the half-pint. I do not know how they solved this problem in Australia, but I lived there for five years, and I recollect that the Australians drink a lot of beer. Perhaps they do not drink many half-pints, but in any event they have found a solution to the problem.
As the right hon. Member for Enfield, West pointed out, Australia and New Zealand have this experience and are comparable industrial countries to us—indeed, we are given to understand that they have a higher standard of living than we have—and they have not found such a need. It would be very easy for them to graft on the ½-cent if they wanted to, but they prefer to retain the advantage they have from taking the 10s. unit of having a system without the fraction.
I concede that there will be areas, particularly in certain foods and household items—cigarettes have been mentioned —where there will be problems to be overcome. It is not fair or true to say that the Halsbury Committee was insensitive to this problem. It pointed out that it would particularly affect, for example, the single person living alone and with a small income, the old-age pensioner. It said that the effect on persons of that kind would have to be watched carefully at the time of transition and that the Government would have to make suitable social security adjustments to meet any adverse changes which might occur. This is dealt with in paragraph 171 of the Report. Experience in Australia and New Zealand shows these fears to be unfounded, for the changes there have not led to these price rises.
In general, the same argument applies to the second criticism, which is that the system would produce too great a rigidity of price, prevent keenness of competition and prevent efficiency in industry. There was a very interesting article in the Economist of 6th May, called "Cuts and Gimmicks", showing the way in which a modern retailer prices his goods, how
1866
he considers the totality of his turnover and works out the profit margin which he thinks he will need. He then has to consider what local prices are for the items of which he is to sell a lot, and what are the attractive leading items, and he assesses his prices overall to produce the profit margin which he requires. In other words, he does not investigate each price individually. This, to repeat the hon. Member's phrase, is balancing the pig. The retailer will overcome the problems by these means, and this is where the efficient trader will benefit.
I come now to the tax position. The T.V.A.—the value-added tax—is not levied at the retail stage in any country. In some of the countries where it is in force there is a positive prohibition on showing the tax as a separate element in the price at the retail stage. It is collected at every stage up to that of the retailer, up to which there is no problem because it can be stated in several decimal places as one is dealing with large quantities and there is no problem of having to express an individual unit in an individual coinage. I predict that it is exceedingly unlikely that any country would adopt a system of compelling the value-added tax to be shown as a separate item at the retail stage, and it would be an administrative nightmare if it were to do so.
The hon. Member for Liverpool, Wavertree (Mr. Tilney) spoke of a sales tax at the retail price stage. I do not want to take up the time of the House, so I urge the hon. Gentleman to read what I said in Committee on this subject, when I quoted what certain American States with a sales tax did about this problem. With cents, they do not have a unit as small as the halfpenny and I have explained how they deal with this problem.
The disadvantages of getting rid of the halfpenny have been enormously exaggerated. They certainly contain nothing to make us change the system in favour of one with the immense disadvantages of the mil system, which would mean introducing from the outset a vestigial coin which nobody would require or want, but which we would have to have under that system for change-giving purposes and none other. When the present halfpenny became no longer needed, whether by 1972 or slightly later, there would be a second vestigial coin.

1867
On the proposal to call the mil the cent, or, in other words, to subdivide the florin into cents, when the time came to demonetise the cent we should be in a mess, because we would have to have a major overhaul once again in the currency system. If we were to have the £—florin—mil system, when after a number of years we dropped the mil, we would be left with the £—cent system, which the Government propose.
For all these reasons I am happy to find myself, for once, in full agreement with the right hon. Gentleman the Member for Enfield, West (Mr. lain Macleod), but I must advise the House to reject the Amendment.
Mr. Patrick Jenkin: Having sat through eight days on the Finance Bill with the assistance of my right hon. Friend the Member for Enfield, West (Mr. Iain Macleod) against the Financial Secretary, I now find I am faced with them both against me. I am not dismayed. I am not in the least dissuaded by any arguments which have been produced about the lack of validity of the main core of the case which I put, I fear, at too great length.
I believe that the case for the halfpenny is good. It is supported with increasing
intensity by a number of important trades covering a wide variety of products in daily use. I believe that people will rue it when they find that the prices change in units equivalent to 1·2d. years earlier than we would otherwise have disposed of the halfpenny.
We want a system of currency which will be practicable and useful within the lifetime of hon. Members and beyond. The Government's system does not come into its own until they get rid of the half-cent, which will be a minimum of a generation, and many hon. Members have said it would be later than that. By that time I bet that we shall have a European currency.
I believe that the need to keep a flexible system now is paramount. I would, therefore, ask all those who have felt the weight of the case—whether they are ten-bobbers or pound men—and who believe that we must have a halfpenny equivalent, to join me in the Lobby in voting for the Amendment.
Question put, That the words proposed to be left out stand part of the Bill:—
The House divided: Ayes 163, Noes. 37.

Division No. 382.]

AYES

[10.18 p.m.

Abse, Leo

Davies, S. O. (Merthyr)

Howie, W.

Allaun, Frank (Salford, E.)

Delargy, Hugh

Hoy, James

Alldritt, Walter

Dempsey, James

Huckfield, L.

Archer, Peter

Dobson, Ray

Hynd, John

Atkins, Ronald (Preston, N.)

Dunn, James A.

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

Atkinson, Norman (Tottenham)

Dunwoody, Mrs, Gwyneth (Exeter)

Johnston, Russell (Inverness)

Bacon, Rt. Hn. Alice

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

Jones, Dan (Burnley)

Bagier, Gordon A. T.

Eadie, Alex

Jones, J. Idwal (Wrexham)

Beaney, Alan

Edwards, Rt. Hn. Ness (Caerphilly)

Jones, T. Alec (Rhondda, West)

Bence, Cyril

Ellis, John

Kelley, Richard

Bennett, James (G'gow, Bridgeton)

English, Michael

Lawson, George

Bishop, E. S.

Ennals, David

Lestor, Miss Joan

Blackburn, F.

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

Lever, Harold (Cheetham)

Boardman, H.

Fernyhough, E.

Lomas, Kenneth

Booth, Albert

Fletcher, Raymond (Ilkeston)

Lubbock, Eric

Brooks, Edwin

Foley, Maurice

Lyon, Alexander W. (York)

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

Foot, Michael (Ebbw Vale)

Lyons, Edward (Bradford, E.)

Callaghan, Rt. Hn. James

Ford, Ben

Mabon, Dr. J. Dickson

Cant, R. B.

Forrester, John

McBride, Neil

Carmichael, Neil

Fowler, Gerry

MacColl, James

Carter-Jones, Lewis

Freeson, Reginald

MacDermot, Niall

Chapman, Donald

Gardner, Tony

Coleman, Donald

Gourlay, Harry

Macdonald, A. H.

Concannon, J. D.

Gray, Dr. Hugh (Yarmouth)

McGuire, Michael

Conlan, Bernard

Grey, Charles (Durham)

Mackenzie, Gregor (Rutherglen)

Craddock, George (Bradford, S.)

Griffiths, David (Pother Valley)

Mackie, John

Crawshaw, Richard

Hamilton, James (Bothwell)

Mackintosh, John P.

Crosland, Rt. Hn. Anthony

Hannan, William

Maclennan, Robert

Cullen, Mrs. Alice

Harper, Joseph

McNamara, J. Kevin

Dalyell, Tam

Harrison, Walter (Wakefield)

MacPherson, Malcolm

Davidson, Arthur (Accrington)

Haseldine, Norman

Mahon, Peter (Preston, S.)

Davies, Dr. Ernest (Stretford)

Heffer, Eric S.

Mahon, Simon (Bootle)

Davies, G. Elfed (Rhondda, E.)

Hooley, Frank

Manuel, Archie

Davies, Ednyfed Hudson (Conway)

Horner, John

Marquand, David

Davies, Ifor (Gower)

Houghton, Rt. Hn. Douglas

Mason, Roy

Mendelson, J. J.

Parkyn, Brian (Bedford)

Urwin, T. W.

Millan, Bruce

Pearson, Arthur (Pontypridd)

Varley, Eric G.

Miller, Dr. M. S.

Pentland, Norman

Wainwright Edwin (Dearne Valley)

Milne, Edward (Blyth)

Price, Thomas (Westhoughton)

Wainwright, Richard (Colne Valley)

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

Price, William (Rugby)

Walden, Brian (All Saints)

Morgan, Elystan (Cardiganshire)

Rhodes, Geoffrey

Walker, Harold (Doncaster)

Morris, Alfred (Wythenshawe)

Roberts, Albert (Normanton)

Wallace, George

Morris, Charles R. (Openshaw)

Robertson, John (Paisley)

Watkins, Tudor (Brecon & Radnor)

Moyle, Roland

Ross, Rt. Hn. William

Wellbeloved, James

Neal, Harold

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

Williams, Alan (Swansea, W.)

Newens, Stan

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

Williams, Clifford (Abertillery)

Noel-Baker, Francis (Swindon)

Silkin, Rt. Hn. John (Deptford)

Wilson, William (Coventry, S.)

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

Silverman, Julius (Aston)

Winstanley, Dr. M. P.

Norwood, Christopher

Slater, Joseph

Winterbottom, R. E.

Oakes, Gordon

Small, William

Woodburn, Rt. Hn. A.

Ogden, Eric

Snow, Julian

Woof, Robert

O'Malley, Brian

Steel, David (Roxburgh)

Yates, Victor

Orbach, Maurice

Steele, Thomas (Dunbartonshire, W.)

Oswald, Thomas

Swain, Thomas

TELLERS FOR THE AYES:

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

Taverne, Dick

Mr. Alan Fitch and

Park, Trevor

Tuck, Raphael

Mr. Ernest Armstrong.

NOES

Astor, John

Longden, Gilbert

Pearson, Sir Frank (Clitheroe)

Bennett, Sir Frederic (Torquay)

McMaster, Stanley

Percival, Ian

Bessell, Peter

Maude, Angus

Russell, Sir Ronald

Buchanan-Smith, Alick(Angus,N&M)

Mawby, Ray

Stoddart-Scott, Col. Sir M. (Ripon)

Chichester-Clark, R.

Maxwell-Hyslop, R. J.

Taylor, Sir Charles (Eastbourne)

Cooke, Robert

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

Teeling, Sir William

Dalkeith, Earl of

Miscampbell, Norman

Whitelaw, Rt. Hn. William

Dodds-Parker, Douglas

Mitchell, David (Basingstoke)

Wilson, Geoffrey (Truro)

Eyre, Reginald

Montgomery, Fergus

Younger, Hn. George

Farr, John

Morrison, Charles (Devizes)

Higgins, Terence L.

Nott, John

TELLERS FOR THE NOES:

Hiley, Joseph

Orr-Ewing, Sir Ian

Mr. James Allason and

Hobson, Rt. Hn. Sir John

Page, Graham (Crosby)

Mr. Patrick Jenkin.

Knight, Mrs. Jill

Page, John (Harrow, W.)

Clause 5.—(FUNCTIONS OF BOARD.)
Mr. G. Campbell: I beg to move Amendment No. 5, in page 3, line 36, at the end to insert:
(a) to arrange urgently for research and experiments to be carried out in the handling of cash in the new currency and to make such recommendations as they consider appropriate as a result to the Treasury.
We believe that this should be set out in the Bill as an urgent task of the Decimal Currency Board. There were discussions about this in Committee, and my hon. Friends and I were astonished at the statement by the Financial Secretary, at col. 26, that nothing further had been done about this matter since the Halsbury Committee reported about four years earlier. There had been no experiments in the handling of cash in typical situations such as in shops, on public transport, and elsewhere, during peak periods.
One of the matters which we feel ought now to be given urgent consideration, and should have been looked into earlier, is the question of giving and receiving change, especially during the transitional period, which is expected to last for about two years, when two currencies, both the old and the new, are to be circulated. We regret that during the last four years the Government have not arranged for experiments to be carried out in life-like conditions, because I believe that this could have influenced the decision which the Government took on the adoption of a decimal system.
In Committee, the Financial Secretary indicated that this would be a task of the Decimal Currency Board. I believe that this is clearly urgent, and should be written into the Bill. For this reason we propose that it should be paragraph (a) in the functions of the Board, so that its importance and urgency is underlined. The present paragraph (e) does not make clear that this job should be done by the Board, and done with a high priority. As the Minister said in Committee that this would be a task for the Board, I hope that the Government will have no difficulty in accepting the Amendment, or, if they do not like the wording of it, in putting in similar wording of their own.
Mr. John Smith: The Amendment concerns the handling of cash, and although there
1872
are many points about it which should be made I propose to make only one.
The present and proposed cupro-nickel coinage is much too heavy, and decimalisation offers us our only chance of lightening it. I think that we all agree that our present coinage is too heavy. Anyone who has tendered a £1 note at an Underground station and received 19s. in cupro-nickel change will agree with that. It is five times as heavy as it was in the nineteenth century in terms of weight for purchasing power, and it is by far the heaviest major currency today. Between 20,000 and 30,000 tons of cupronickel coinage is in issue, all of it being carried about by hand in small lots all the time, and it ties up more than £10 million worth of valuable metal into the bargain.
Whatever decimal system we finally choose, all—not some—of our coins must be changed so that the current value shall appear on them. All that 20,000 to 30,000 tons of coinage will have to he reminted. Therefore, now is the time to make the new cupro-nickel coinage lighter—
10.30 p.m.
Mr. Speaker: Order. We are not on the new coinage at the moment. The Amendment asks for research into the handling of decimal currency.
Mr. Smith: I feel that one of the major aspects of coin handling is the weight of the coins to be handled, its effect on their transport, and so forth. Lord Halsbury did not deal with this point. He considered not the weight, but the diameter of the existing cupro-nickel coinage and concluded—and I agree with him—that we cannot alter the diameter of the shilling and the florin because of the enormous cost of altering gas and electricity meters. Those machines work off diameter, and I suggest that we should lighten the coinage by reducing its thickness. Our present coinage is—
Mr. Speaker: Order. With respect, I know the hon. Member's knowledge of financial matters, but this Amendment asks that we should have research into and experiment with the handling of coinage. It is not an Amendment for the reform of the coinage.
Mr. Smith: I cannot help feeling that the prime aspect in handling coins must

1873
be connected with their bulk and substance, but if the Amendment is directed to some other aspect that I cannot at the moment perceive I will conclude by saying that the difficulties connected with lightening our coinage by making it thinner are all to do with machines. Making it thinner would not suit the machines that mint the coins, or the machines for weighing coins at the banks, or the machines into which we put coins in order to obtain services or goods. It is no good saying to us that we must live with these coins, in order to suit the machines. The new coins must be made to live with us. To do that satisfactorily they must be made lighter, and now is the only chance in our lifetime of bringing that about.
Mr. MacDermot: The hon. Member for the Cities of London and Westminster (Mr. John Smith) has raised a matter on which he spoke at rather more length in Committee. With great respect to him, I do not think that the kind of research for which I understand the Amendment asks is directed to the problem which he has in mind, because, as is made clear in the opening words of Clause 5, the functions of the Board will be
"… to facilitate the transition from the existing currency and coinage to the new currency and coinage provided for by this Act …"
and for better or worse we are providing for the size, dimensions and weight of the various coins.
The purpose of the Amendment is to have research and experiments carried out in connection with what will be very considerable handling problems for those who have to handle large amounts of cash during the transition period. We discussed the kind of problem in Committee. There is the problem faced by the bus conductor who will operate, to start with, with our existing currency, and later with the decimal currency. He will have his fares tendering money in different currencies. What is he to do? How is one to convert from one to the other? What form of change will he give? There is the physical problem of how he will keep coins, and where.
Those are the sort of problems with which the transport authorities will be concerned, and there will be other
1874
problems for retailers. It is this kind of thing into which the Amendment suggests more investigation should be made.
The hon. Gentleman the Member for Moray and Nairn (Mr. G. Campbell) criticised us because we had not done this already, but, as I explained in Committee, we felt that the Halsbury Committee had itself carried out sufficient investigations into these problems to assist it, as much as was needed for the question which it had to decide and which now the Government have had to decide, namely, what is the best system to choose, what kind of currency.
The problems which this Amendment raises are, we consider, properly problems for the preparatory stage, the stage from the passing of the Bill till the actual time of decimalisation, and it is for that that we have set up the Decimal Currency Board. The Amendment proposes that we write into the Bill that the Board should carry out this research. I can only advise the House that we consider this wholly unnecessary. The present wording of Clause 5, both the opening words which I have already quoted, and subsection (1,e), are quite wide enough to empower the Board to do this.
The Board is, of course, intending to do it, and indeed, I can assure the House that this particular problem has been raised already by the Retail Decimal Committee with the Board. A reply was sent on 22nd May by the secretary to the Board telling that Committee that the Board realised the importance of doing research into cash handling problems of the changeover. It is giving careful thought already to the timing of the coinage changes and to doing this research. It will want to work very closely with the trade associations and the Retail Decimal Committee and has invited their co-operation on it.
I hope that that will be sufficient to assure the House that this matter is well in hand. The Board is thoroughly seized of it. With this assurance, I hope, the hon. Gentleman will agree that it will not be necessary for him to press his Amendment.
Mr. G. Campbell: Very briefly, I would say first to my hon. Friend the Member for the Cities of London and Westminster (Mr. John Smith) that we

1875
intended through this Amendment that weight, which is one of the many factors which might arise, should be one on which the Board could report and, we hope, make recommendations. Whether the Government will take any notice of those recommendations is another matter.
The Financial Secretary is right in thinking that the main intention of the Amendment was that experiments should be carried out into the cash handling problems which will arise, particularly during the period when two currencies are circulating together, and when there will be no fewer than six new coins, as there will be by that time, in the new currency. We can foresee that there will be really difficult problems to be solved, and at rush hours there could be exasperation unless this is regulated and thought out beforehand.
I am sorry that the hon. and learned Gentleman has not commented on the question of recommendations, because we believe that the Board, in looking into this, could probably make useful recommendations as it goes along.
Mr. MacDermot: I am sorry I omitted to deal with that matter. There will be a duty on the Board to make an annual report, but that will not stop the Board from making recommendations from time to time, and I would expect those to be made public.
Mr. Campbell: That is a further assurance which the hon. and learned Gentleman has given.
The hon. and learned Gentleman mentioned the Halsbury Committee and the research which was carried out for that Committee, but that was only a limited amount of research needed for the purposes which the Committee had. There was no question of the research and experiments carried out by that Committee covering the very wide range of situations which will occur in every day life all over the country. We have, in this Amendment, drawn attention to the urgent need for this task to be carried out. The Government have given an assurance that this is already covered in the Bill. We would much have preferred to have had it clearly written into the Bill, because that would have carried out what the Minister said in Committee,
1876
but, in view of what the Financial Secretary has said, I beg to ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Mr. Lubbock: I beg to move Amendment No. 6, in page 4, line 12, at the end to insert:
'and in particular to capital expenditure incurred by any person carrying on a business in Great Britain in providing any new coin-operated machinery or coin-operated plant for use in Great Britain in which one shilling or two shilling coins are used'.
In Clause 5(1,d) the Bill refers to the circumstances in which compensation might be payable. The Government have been extraordinarily vague about how and when compensation might be paid to people who are disadvantaged by the conversion to decimal currency. In the White Paper the Government say that the principle of compensation is not acceptable and that it might militate against an efficient and economical change-over. I will turn to that sentence in a minute.
One cannot defend that proposition in a case in which a particular industry is liable to face very serious costs, out of all proportion to those which will fall on the rest of industry or the consuming public as a result of the conversion to decimalisation. I refer to the coin-operated machine industry, in respect of which there is a special case which the Government ought to take into consideration.
Lord Halsbury estimated that by 1970 it would cost £21 million to convert all the coin-operated machines in this country, but since then the estimates have been revised. In representations which were submitted to the Chancellor of the Exchequer, and which the Financial Secretary will remember were discussed with him at a meeting at which I was present, the Automatic Vending Machine Association said that, according to its present estimates, to convert the automatic vending machines would cost double the estimate in Lord Halsbury's Report, which means about £13·2 million. This is a very large sum indeed to fall on a section of the community which has not the resources to enable it to meet that bill.
I have no particular brief for the vending machine operators, and do not represent them in this matter at all, but I think

1877
that in equity they have a case which deserves consideration by the House, notwithstanding that, as I said earlier, there may be some truth in the proposition set out in the White Paper that compensation as a general principle might militate against an efficient and economical change-over.
What I understand by that phrase is that if we were to tell industry generally that it would be paid the full amount of the cost of the change-over, it would take no steps to minimise that cost, and when the time came there would be a very heavy bill to be met by the taxpayer. That is a situation which I wish to avoid, just as much as does the Chancellor.
If the Chancellor looks at the Amendment he will see that I have restricted the compensation which I should like the Decimal Currency Board to consider to machines handling 1s. and 2s. pieces.
I have done that for the obvious reason that those coins would convert exactly in weight and dimensions to the new 5d. and 10d. piece so that clearly it would be of very great advantage if one persuaded any manufacturer selling goods through coin-operated machines to alter his packaging at this stage. For example, if he were selling chocolates, cigarettes or other articles through this medium, they could be sold in units of 1s. and 2s. and then, after the change-over, there would be no alteration in the mechanism but the new 5d. and 10d. pieces would be used in the same machinery. In that event, the total cost to the economy of manufacturing coin-operated vending machines over the transitional period would be very much less.
I wanted to suggest a much simpler means than that of asking the Decimal Currency Board to make recommendations. Had it been possible I should have suggested that investment grants should be paid on all such machines which are manufactured between now and D-day in 1971. Unfortunately, I could not do that, because I was advised that an Amendment to that effect would be outside the terms of the Money Resolution.
10.45 p.m.
So I am making the alternative a much weaker proposition, that the Decimal Currency Board should be required to consider as a special case meriting, attention, quite apart from any others
1878
which hon. Members may suggest, the group of manufacturers and operators of coin-operated machines. I hope that I have demonstrated that there is a case in equity to treat the operators of these machines rather differently from the general run of people affected by the change-over. Accounting machine operators, for example, will, no doubt, benefit from new orders received. I am not concerned about them receiving compensation, as I am in this case, for a variety of reasons into which I could go if there were time.
In the period of transition, while denominations are being altered, there will be a loss of sales to the owners. I suggest quite seriously that these people are in a special position which merits compensation and, therefore, I have put in my Amendment an injunction to the Decimal Currency Board to consider them on their own.
I would like the Financial Secretary to deal with this sympathetically and say whether the Government might be prepared to accept my other alternative of offering investment grants to those who instal such machines between now and 1971. That will be even simpler than asking the Decimal Currency Board to consider it. I am sure that the House will agree that a good case has been made out for this.
Mr. Patrick Jenkin: I should like to support the Amendment which the hon. Member for Orpington (Mr. Lubbock) has moved. I have had the advantage of reading the submissions made by the Automatic Vending Machine Association of Great Britain to the Decimal Currency Board in its claim to be regarded as a special case.
From the discussion we had in Committee on compensation generally—and perhaps we will come to this on the next Amendment—it was far from clear whether owners and operators of coin-operated machines were to be regarded as the sort of special case which fell within the Clause of the Bill which enjoins the Board to make recommendations about compensation. Having read the submissions, I find them very telling and I feel that they require special treatment.
It seems that these owners and operators stand to gain precisely nothing out of the decimal currency change. They

1879
will have to operate their machines, which sell a wide variety of products, with a much less flexible system than at present and this will place them in a difficulty. They will also be in extreme difficulty when the two systems are operating in parallel and every machine will have to operate on one system or the other. The availability of coinage in the customers' pockets will substantially curtail their sales. This is not the sort of case the Government had in mind, it appears, when they drafted the provision.
I am attracted by the solution suggested by the hon. Member for Orpington (Mr. Lubbock). Instead of just shelling out money to the owners and operators in an attempt to deal with the costs that they will incur as a result of this change, it is an attractive idea to encourage the manufacturers of these machines to provide new machines more rapidly—by the provision of investments grants or a system equivalent to such grants—than would otherwise be done.
When we debated the industrial development legislation it was claimed by Board of Trade Ministers that the system proposed by the Government would be more flexible and would allow the grant system to support other measures of Government policy more closely than did the old system of investment allowances, the old system being allied to the tax system. We are now discussing such a case. The Government are anxious to press ahead with decimalisation, which is the right thing to do, but they are adopting a system which will impose considerable difficulties on the owners and operators of coin operated machines.
These people do not appear to come within the compensation provisions of the Bill, and the Amendment would seem to offer an ingenious solution for easing the problems that will face the industry and operators.
Mr. MacDermot: The hon. Member for Orpington (Mr. Lubbock) raised, somewhat generally, the question of compensation and then dealt with it more specifically in relation to the machines referred to in the Amendment. On the general question, I have nothing to say beyond what has already been stated as Government policy in the White Paper, namely, that it is our view that, in general,
1880
those organisations which will have to incur substantial change-over costs are, in the main, those which will stand to benefit most in the long run from the change-over to decimalisation. Compensation as a general principle is, therefore, not acceptable, and we have made it clear that we would not entertain a claim for general compensation.
However, we have set up the Decimal Currency Board in order to have an impartial body which will look into all these questions. One question which we are particularly asking the Board to look into is that of claims for compensation. We invite people who consider that they have a special case to say why they, contrary to the general principle, should receive compensation and that, in the first instance, they should make out that case to the Board.
The Chancellor of the Exchequer was careful to include among the membership of the Board people who would be able, from their experience, fully to understand and judge the technical problems which will undoubtedly arise in these submissions. It will then be for the Board to make its recommendations to the Government about whether compensation should be paid in any of these cases and, if so, of what nature and on what basis. Of course, the Government will not be bound by the recommendations of the Board. It will be for the Government then to decide what action should be taken; and this is probably a matter which would be brought forward in the second Decimal Currency Bill which, as has been made clear, will have to be brought before Parliament before decimalisation itself.
It would, therefore, be wrong for me to try to prejudge or comment on the case of vending machine manufacturers. Indeed, it is not for me to prejudge the issue at all. The hon. Member for Wan-stead and Woodford (Mr. Patrick Jenkin) said that he had seen their submission and had been impressed by it. I know the general nature of their case, because I had the pleasure of receiving a deputation from them. As I told them, it is to the Decimal Currency Board that they must make their case.
The Amendment proposes a more specific area of compensation—that of persons providing any new coin-operated machinery or plant in which 1s. or 2s.

1881
coins are used. I confess that until I heard the hon. Member's explanation of his Amendment I was bewildered by it because, as he pointed out, these are the two coins which will be the psychological anchors as they will have the exact equivalent and be coins of exactly the same size and form as those which machines in use today will take, the 5 cent or a 10 cent coin.
The hon. Member said that every encouragement should be given to the manufacture of 5 cent and 10 cent machines and people should be encouraged to buy them because of the saving which would be produced later. As he said, there is already an in-built inducement. Because of this advantage, anyone contemplating buying a coin-operated machine obviously, other things being equal, will be led to buy a machine which operates on a 1s. or a 2s. coin. There would not seem to be a particular reason for a particular incentive of that kind.
The hon. Member said that he would like the Government to consider investment grants in relation to this. Of course, manufacturers of the machines will
qualify for investment grant in relation to their capital plant to manufacture the machines. He is urging, I understand, that manufacturers who buy the machines to instal them in works' canteens or for welfare purposes for the staff, should qualify for investment grant. I shall draw the suggestion to the attention of my right hon. Friend the President of the Board of Trade, but I think this would create too great an inroad into the principles on which investment grants are given for my right hon. Friend to entertain that proposal.
I do not think that any action is called for by the Government in terms of making special assistance of that kind available. If there is a case to be made for compensation, the procedure is for it to be made to the Board. The Government will then consider what recommendations they receive with the benefit of the expert advice of the Board. For this reason, I cannot advise the House to accept the Amendment.
Question put, That those words be there inserted in the Bill:—
The House divided: Ayes 18, Noes 136.

Division No. 383.]

AYES

[11.0 p.m.

Bennett, Sir Frederic (Torquay)

McMaster, Stanley

Taylor, Sir Charles (Eastbourne)

Bessell, Peter

Montgomery, Fergus

Teeling, Sir William

Cooke, Robert

Nott, John

Wilson, Geoffrey (Truro)

Farr, John

Page, Graham (Crosby)

Winstanley, Dr. M. P.

Johnston, Russell (Inverness)

Page, John (Harrow, W.)

Knight, Mrs. Jill

Russell, Sir Ronald

TELLERS FOR THE AYES:

Longden, Gilbert

Steel, David (Roxburgh)

Mr. Eric Lubbock and

Mr. Richard Wainwright

NOES

Allaun, Frank (Salford, E.)

Davies, Ednyfed Hudson (Conway)

Harrison, Walter (Wakefield)

Archer, Peter

Delargy, Hugh

Haseldine, Norman

Armstrong, Ernest

Dempsey, James

Heffer, Eric S.

Atkinson, Norman (Tottenham)

Diamond, Rt. Hn. John

Hooley, Frank

Bacon, Rt. Hn. Alice

Dobson, Ray

Horner, John

Bagier, Gordon A. T.

Dunwoody, Mrs. Gwyneth (Exeter)

Houghton, Rt. Hn. Douglas

Bennett, James (G' gow, Bridgeton)

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

Howie, W.

Bishop, E. S.

Eadie, Alex

Hoy, James

Blackburn, F.

Edwards, Rt. Hn. Ness (Caerphilly)

Huckfield, L.

Boardman, H.

Ellis, John

Hynd, John

Booth, Albert

English, Michael

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

Brooks, Edwin

Fernyhough, E.

Jones, J. Idwal (Wrexham)

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

Fitch, Alan (Wigan)

Jones, T. Alec (Rhondda, West)

Callaghan, Rt. Hn. James

Fletcher, Raymond (Ilkeston)

Lestor, Miss Joan

Cant, R. B.

Foley, Maurice

Lever, Harold (Cheetham)

Carmichael. Neil

Foot, Michael (Ebbw Vale)

Lomas, Kenneth

Carter-Jones, Lewis

Ford, Ben

Lyon, Alexander W. (York)

Coleman, Donald

Forrester, John

Lyons, Edward (Bradford, E.)

Concannon, J. D.

Fowler, Gerry

Mabon, Dr. J. Dickson

Conlan, Bernard

Freeson, Reginald

MacColl, James

Crawshaw, Richard

Gardner, Tony

MacDermot, Niall

Crosland, Rt. Hn. Anthony

Gourlay, Harry

Macgonald, A. H.

Cullen, Mrs. Alice

Gray, Dr. Hugh (Yarmouth)

McGuire, Michael

Dalyell, Tam

Grey, Charles (Durham)

Mackenzie, Gregor (Rutherglen)

Davidson, Arthur (Accrington)

Hamilton, James (Bothwell)

Mackintosh, John P.

Davies, Dr. Ernest (Stretford)

Hannan, William

Maclennan, Robert

Davies, G. Elfed (Rhondda, E.)

Harper, Joseph

MacMillan, Malcolm (Western Isles)

McNamara, J. Kevin

O'Malley, Brian

Urwin, T. W.

MacPherson, Malcolm

Oswald, Thomas

Varley, Eric G.

Mahon, Peter (Preston, S.)

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

Wainwright Edwin (Dearne Valley)

Mahon, Simon (Bootle)

Palmer, Arthur

Walden, Brian (All Saints)

Manuel, Archie

Park, Trevor

Walker, Harold (Doncaster)

Marquand, David

Parkyn, Brian (Bedford)

Wallace, George

Mason, Roy

Pentland, Norman

Watkins, Tudor (Brecon & Radnor)

Mendelson, J. J.

Price, Thomas (Westhoughton)

Wellbeloved, James

Millan, Bruce

Price, William (Rugby)

Williams, Alan (Swansea, W.)

Miller, Dr. M. S.

Rhodes, Geoffrey

Williams, Clifford (Abertillery)

Milne, Edward (Blyth)

Roberts, Albert (Normanton)

Wilson, William (Coventry, S.)

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

Robertson, John (Paisley)

Winterbottom, R. E.

Morgan, Elystan (Cardiganshire)

Ross, Rt. Hn. William

Woodburn, Rt. Hn. A.

Morris, Charles R. (Openshaw)

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

Woof, Robert

Moyle, Roland

Short, Mrs. Renée(W'hampton,N.E.)

Yates, Victor

Neat, Harold

Silkin, Rt. Hn. John (Deptford)

Newens, Stan

Silverman, Julius (Aston)

TELLERS FOR THE NOES:

Norwood, Christopher

Slater, Joseph

Mr. Ioan L. Evans and

Oakes, Gordon

Small, William

Mr. Neil McBride.

Ogden, Eric

Swain, Thomas

Mr. G. Campbell: I beg to move Amendment No. 7, in page 4, line 12, at the end to insert:
'and to make such recommendations as the Board consider necessary and appropriate in regard to compensation'.
The Amendment seeks to deal with similar problems to those described in the discussion on the last Amendment, but in a wider context. Paragraph 65 of the White Paper makes it clear that
"In the Government's view those organisations which will have to incur substantial change-over costs are in the main those which stand to benefit most from the change in the long run."
Many of us do not think that this proposition is correct. Even though it is qualified by the words "in the main", we can already identify at least one large group which is unlikely to benefit at all from decimalisation and which will run into considerable costs. This is the vending machine industry, where the costs of the change-over are estimated at about £10 million. The manufacturers will be involved in the costs of converting or scrapping and of other action. The Government have said that the manufacturers may get extra business out of the changeover and that this would offset any costs incurred. Extra business is unlikely completely to offset the costs incurred.
There is also the position of vending machine owners and operators. No one can see what benefit they will receive from decimalisation, yet they will incur considerable costs in the change-over. As there is this category which is not covered by the statement in the White Paper, there may well be others. Paragraph 65 says that the Government do not accept the principle of compensation, but the Government have given the Board
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the task of receiving representations in special circumstances. The Government have not properly understood the size of the problem if they think that there will be merely some special circumstances in which representations may be made.
We propose that the Board should be able to make recommendations on the subject from time to time. As the Bill is now drafted, all that the Board is expected to do is to make an annual report. In our view, it should be clearly stated in the Bill that the Decimal Currency Board, having heard representations about compensation, should be able to make recommendations to the Government on the matter. All that the Government have said in paragraph 65 of their White Paper, which seems to be the beginning and end of their ideas on the subject at present, is that they do not accept compensation in principle and believe that most of those concerned in the change-over will benefit in the long run. In fact, there is at least one important group which is an exception to that expectation, and there may well be others.
Mr. R. Gresham Cooke: I support the Amendment, more particularly in relation to the small trader. I have had complaints from small traders in my constituency, and they have been backed up by the chamber of commerce. They have written to me saying that, already, people are thinking about altering their cash registers against the day of decimalisation. One enterprising company has gone round to small traders saying, "We will alter your cash register for £35 now, or £42 in 1971". That may not seem a lot of money, but for a small tobacconist, whose profits are probably

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only about £10 a week, it is quite a sum to pay. I have been asked who is to pay for these alterations to business machines and cash registers.
I took the matter up with Lord Haisbury and he pointed out that compensation was not a matter which the Government had referred to his Committee. I then wrote to the Decimal Currency Board, which, in a full and thoughtful letter, pointed out that it was not expected that the Government would give any compensation except in exceptional cases, which, of course, might or might not cover vending machines and cash registers.
Further thought should be given to the position of small traders and business men. This Amendment should be made for their sake, if for no other. In a small shop, there may be a couple of cash registers costing £70 or £80 to convert. What is to be the benefit out of it? Will it be sufficient for small traders who have to meet costs of this kind?
Mr. MacDermot: The general question of compensation, which is raised more directly by this Amendment, was raised by a side-wind in our discussion of Amendment No. 6. I stated the Government's view then, and I shall not repeat it now.
The hon. Gentleman the Member for Twickenham (Mr. Gresham Cooke) raised the specific case of retailers and small traders who have machines and who may want to consider converting them at a fairly early date. I understand that the Decimal Currency Board will be discussing with the companies which specialise in this kind of machine conversion the problems involved in that connection and that it will, no doubt, discuss also the question of what are appropriate charges to be made for such conversion.
11.15 p.m.
One of the things that minded us to set up a Decimal Currency Board at such an early stage is that we learnt from the Australian experience the great advantage of a long preparation period precisely on questions such as these. In Australia, the cost of machine conversion proved in practice to be far less than had been feared and expected when the decision for decimalisation was made. It is on that sort of practical issue, apart from
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other questions, that we think that the Decimal Currency Board will have a useful role to play.
Sir William Fiske, the Chairman of the Board, and the Secretary will be going to New Zealand to watch the conversion as it takes place there, and we also hope to benefit from their experience.
Mr. Gresham Cooke: Could the Financial Secretary say at this stage that it is probably not advisable for small traders to accept the offer of £35 for the conversion?
Mr. MacDermot: I would prefer traders to ask the advice of the Decimal Currency Board on that. It would be better able to give them useful advice.
The Amendment asks us to write into the Bill a requirement that the Board should make such recommendations about compensation as it considers necessary and proper. It is the intention that the Board will make recommendations having considered all the representations made to it. I would go further than the Amendment and say that we contemplate that those recommendations will be made publicly. This is not a matter on which there should be any secrecy. Then the Government will have to come to their decision on the recommendations and in due course bring legislation before the House. This will be fully open to debate by the House, which will have the benefit of the recommendations and reports of the Board.
I can assure the hon. Gentleman that we do not envisage the Board being confined to its annual report to make recommendations. It will be an important executive body. Action will flow from its work and it is important that that action should in some cases be acted on quickly, so that it will be very free to act as it thinks necessary and make its recommendations and reports as and when it wants.
There is a particular reason for not writing this provision into the Bill. There are matters other than compensation on which the Board would also make recommendations and reports, and in accordance with general drafting principles it is not right to write in a requirement in relation to one because a doubt is raised as to whether the Board can or should make recommendations on the other matters.

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In our view, its general functions as described in the opening words of Clause 5, which I have already read to the House, are quite wide enough and apt to imply that it will take whatever action is appropriate in particular cases, including the action of making recommendations, and making them public. In view of that, I hope that the hon. Gentleman will not feel it necessary to press the Amendment.
Mr. G. Campbell: The Financial Secretary has agreed that the Decimal Currency Board should, and is expected to make, recommendations on this subject. In the short paragraph 65 of the White Paper it is stated that the Government will consider any recommendations the Board may care to make on compensation.
The beginning of Clause 5, to which the hon. and learned Gentleman has just referred, describing the functions of the Board in general, says nothing about making recommendations. I cannot understand why the Government should not accept the Amendment, which so clearly sets out what they intend. If the Financial Secretary cannot do it to the small paragraph, at least he could have made a general paragraph about recommendations referring to all the points on which, as he says, the Board will be expected to make recommendations.
I cannot understand why the hon. and learned Gentleman should ignore this opportunity, on the last Amendment on Report, to accept the only Amendment which the Government would have accepted throughout the whole of the Bill's passage through this House.
Amendment negatived.
11.20 p.m.
Mr. MacDermot: I beg to move, That the Bill be now read the Third time.
We have gone over the Amendments to the Bill so fully that I am certain that no hon. Member will want to go over them again. I have found our discussions to have an intellectual fascination about them which is lacking in some legislation. One can argue endlessly about problems of this kind and whatever answers there have been to questions have only thrown up other problems.
However, the Bill is now reaching finality in this House and, however many
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dissentient voices there may be about the choice of system, I am sure that everyone will now be concerned to co-operate in making a success of what will undoubtedly prove to be a historic decision for this country.
The main limelight will now fall on the Decimal Currency Board, which will have a very big job of work to do between now and D-day in helping us to prepare for the change of decimalisation.
11.22 p.m.
Mr. Iain Macleod: This is the same Bill, without a comma altered, which was ordered to be printed by the House of Commons on 1st March. We expressed the view of the overwhelming majority of the Tory Party then and, as it is the same Bill, I do not propose that we should divide the House tonight. I will keep my remarks to a span of about two minutes.
I was not a member of the Standing Committee, but I read with fascination the excellent debates there. The Financial Secretary was unfailingly courteous and well informed and although, on this side of the House, we are to some extent unorganised, perhaps I may congratulate him; I thought that he did it excellently.
Talking of being organised and unorganized, the Chancellor of the Exchequer and I had a short brush earlier. I have looked up the figures since then and I offer him my congratulations—in a slightly different sense—on getting more than 250 of his supporters into the Lobby.
The Bill now goes to another place. My hon. Friend the Member for Wan-stead and Woodford (Mr. Patrick Jenkin), to whose assiduity I again pay tribute, made some comment about what might happen there. I do not presume to suggest what another place should do. No doubt it will study the voting on the different Amendments and the different levels attached to them.
However, I am bound to say that the discussions which we have been having towards the end have centred on the question of the half-cent in the Government plan, the absence of one in the 10s. plan, and the halfpenny equivalent. The Government said in Committee more than once that if they were convinced by argument in favour of the halfpenny equivalent, they would want to look again at the main unit, and I am sure that that was right.

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I regard the addition of a fraction as a bigger disadvantage than the gain of a halfpenny equivalent, but I have no doubt that if the halfpenny equivalent had to come, it should have come on top of the 10s. cent system. I suspect that I am almost getting out of order, because that is not in the Bill, and I will rapidly move away from that. I am very sad about it, because I am convinced that we are making a mistake, but I will not labour that. I have made my view clear on Second Reading.
I return to a more pleasant note. I am glad that we intend to decimalise. I am sure that the system in the Bill will be a vast improvement on the one that we have now. £ s. d. will go, future generations of school children will be delighted, and so will many people in industry and business, after we have got over the teething troubles. I believe that we have not picked the best system, but at least we are making an advance from the one we have now.
I leave the Bill with an expression of regret that it is nothing like as good a Bill as it could have been, if only the Chancellor of the Exchequer had listened to what has been put before him.
11.25 p.m.
Mr. Lubbock: As one who has always advocated a decimal currency, this is rather a sad day for me. Like the right hon. Member for Enfield, West (Mr. Iain Macleod), I think that it is a great pity that, in moving forward to a decimal currency, the Government have not had the sense to listen to the many arguments adduced in favour of an alternative system.
They are arguments which have taken place not only in the House, but among consumer interests, the general public, and among the traders about whom the Chancellor of the Exchequer is so scathing but who probably know a good deal more than he does about the facts of every-day life and about the great nuisance this system will be in terms of handling currency in the 80 million transactions which take place every week in shops, on buses, and elsewhere. It is not appreciated how great the mistake which the Chancellor is making will appear to the general public.
As I say, I have been a staunch advocate of conversion to a decimal cur-
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rency for many years. I said as much in my election address at the time of the 1962 by-election, much to the discomfort of my agent, who said that it would not attract many votes. However, the Government have made a mistake in the way in which they have introduced it, and it is a great pity that they have been impervious to the arguments from well-informed sources outside the House which have said, practically unanimously, that the 10s.-cent system is vastly to be preferred to that which the Government have adopted in this Bill and which is in course of being approved without the alteration of one dot or comma.
That is a good indication of how ready the Government are to listen to sensible arguments put forward from either side of the House, because this is not a party matter. Many of the strongest pleas for some alternative system have come from the Government side.
There is now a huge job to be done in educating the general public between now and the day of conversion in 1971, and we have not yet started on it. In our schools, we are still using old arithmetic books in which there is heavy concentration on sums in £ s. d., which will be useless to our children by the time they leave school. By the time my 13-year-old son leaves school we shall be using decimal currency, yet he spends hours of useless work on tasks such as multiplying £3 17s. 11½d. by five. That is the kind of matter to which we shall have to address ourselves if the country is to benefit from the system now proposed, which is at least a good deal more readily comprehensible than the extraordinary system of currency which we have had for many centuries.
One benefit which it has is that, even with the half which the Government obstinately insist on keeping, it is that much easier to understand. It will be of great benefit in our educational system and in the handling of coins, in spite of the defects to which I have referred.
One other matter to which I must refer is the way in which back benchers opposite, in spite of their natural conviction that the 10s.-cent system is to be preferred to that which has been adopted, have trooped sheepishly into the Division Lobby in favour of the Chancellor's proposals. I do not want to go back to

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the argument about whether there was a two-line Whip, or a three-line Whip during the various stages of the Bill, but I say to the Chancellor and to those behind him who have not had the courage of their convictions on this matter, including the hon. Member for Stoke-on-Trent Central (Mr. Cant), that their conduct in speaking in favour of the 10s.-cent system, and then voting in the other Lobby immediately afterwards, is something which will have to be drawn to the attention of their constituents and all those who represent consumers in this country.
Mr. Cant: I am sure that my constituents appreciate that in this party I have complete freedom to say what I like from these benches, or, indeed, anywhere else. If I choose to vote for a Motion, it is because I support the Government which represents the party of which I have been a member for more than 30 years. If this seems to the hon. Gentleman to be a piece of hypocrisy, I am very sorry about that, but I can support the Government without approving every little piece of legislation which they want to put through.
Mr. Lubbock: The hon. Gentleman's conduct will be as incomprehensible to his constituents as it is to me.
Mr. Cant: I still managed to get a 15,000 majority.
Mr. Lubbock: That need not be quite so large next time.
When people discover how hon. Gentlemen opposite have behaved in this matter, how they have consistently, and rightly, advocated that the 10s.-cent system should be adopted, and have then trooped sheepishly and slavishly into the Division Lobby behind the Chancellor, they will be mystified about how we conduct our affairs. Their conduct should be drawn to the attention of consumers and those who will suffer from this ridiculous "half" during the next few years before the conversion date in 1971. It is their duty to explain the discrepancy to their constituents, but, whether they do so or not, we shall make sure that the facts are as widely known as possible.
11.33 p.m.
Mr. Patrick Jenkin: I rise to reinforce what my right hon. Friend the Member for Enfield, West (Mr. Iain Macleod)
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said about the Financial Secretary's conduct of the Committee and Report stages of the Bill. Although we have a Measure which is identical in every respect to that which was read the First time some months ago, the arguments which have been put from both sides have been meticulously answered. I do not say that the answers were always good ones, but I can honestly say that, with only minor exceptions, every argument was adverted to, and a genuine attempt was made to deal with it. This is one of the great attractions of our Parliamentary system.
I do not want to get embrangled in the argument which the hon. Member for Orpington (Mr. Lubbock) has had with hon. Gentlemen opposite. I know that it is votes that count, but the arguments are important, and those who have been supporting me in the case which I have made have been impressed by the way in which the Treasury Bench has felt necessary, and has taken great trouble, to reply to the points which I put.
There is one matter in the Bill to which no reference has been made, but which I think the Government might like to consider during the passage of the Bill through another place. I am referring to the use of the term "new penny". I am not sure that this is the right term to use, but the Chancellor, when he made his announcement in his mini-Budget speech at the beginning of March last year, showed a personal predilection for the term "penny", and a life-long affection for it; indeed, the American cent is referred to by many Americans as a penny. The existence of an old penny and a new penny could give rise to transitional difficulties for quite a long time.
If we are to have a new system with a new coin bearing a new value, there is great advantage in having a new name for it. If the £ is to be divided into 100 minor units, it is completely logical and rational and would be well understood by foreigners that they should be called cents. The difficulty with the new penny is that within a short time the word "new" will tend to drop out. The Chancellor of the Exchequer nods in agreement. I have no doubt that that is what he intends.
Although it is not a strictly parallel case, I was very much struck by what I was told by a French banker with whom

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I lunched the other day. He said that even now, as the directors sit around in conclave discussing how far the overdraft of Monsieur X should be allowed to go, when figures in terms of thousands of francs are bandied about, it requires great courage, but is sometimes an essential step for somebody to ask, "Are we talking about old francs or new francs?"
Pennies are a different case, but I can well imagine businessmen sitting round the table and pricing products which will be priced in pennies, and somebody asking, "Are we talking about new pennies or old pennies?" I hope that the Government will think about this again. I find the term "new penny" cumbersome. I believe that there will be confusion for many years between old and new pennies.
Apart from that, my views on the Bill are well known. I remain convinced that the £ is the right answer, not for associability, but simply for continuity. To be able to hang on to something fundamental in the whole structure is a point of great advantage, and I voted for the Government on Second Reading because I believed that that was right.
When I talk to women who do the vast amount of their shopping in units smaller than the £, I find that they want to have an anchor. They want a piton in the mountain on to which they can fix, and that will be the £. This proposal will now go forward. It has my support.
However, I am convinced that the subdivision is the wrong one. I would not dare to advise what another place might do. When I mentioned it earlier, I was not in any sense attempting to indicate what I thought that it should do. The fact is that the Bill goes to another place, and I have no doubt that many of the arguments which have been rehearsed here will be rehearsed there, where somewhat different considerations of voting and whipping apply, and it may well be that a different view will prevail. If it does, I for one would regret it.
11.38 p.m.
Mr. Callaghan: Perhaps I might conclude the proceedings. I intended to give an encomium to the work of the hon. Member for Moray and Nairn (Mr. G. Campbell) and the hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin), but it is getting a little too much
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like a school prizegiving. I hope, therefore, that those hon. Members will take the words which I would have said as meant even though not uttered. In reading the proceedings, I, too, was stimulated, because I understood what was going on and what the argument was about. That is always an encouragement when dealing with these problems.
I thought that one or two speeches made by hon. Members opposite were rather encouraging those in another place to take a certain action even though they have disavowed the intention of so encouraging them. It is not for me to comment on what another place should do, nor shall I comment on what this House would do if another did what it might do. All these are things for the future.
One thing, however, which is clear at the end of the proceedings on the Bill in this House is that the differences with which we all started remain unresolved. None of us has succeeded in convincing anybody else. [An HON. MEMBER: "Yes."] I beg pardon. My hon. Friend the Member for Preston, North (Mr. Ronald Atkins) was converted from 10s. to the £ by the speech of the hon. Member for the cities of London and Westminster (Mr. John Smith). What the followers of Parliamentary democracy make of that, I am not sure. At least, it is something for which the hon. Gentleman should take credit. I do not know what has got into the hon. Member for Orpington (Mr. Lubbock). I do not know whether he lost his shirt at Ascot today, but he has been in such a foul temper all the evening that I assumed he had. Otherwise, I could not understand why he should be wearing a shirt of such a horrible colour—
Mr. Lubbock: To keep the record straight, I have never been to Ascot in my life, and never intend to go there.
Mr. Callaghan: That does not leave any explanation for the hon. Member's foul temper.
The hon. Member said that I was rather scathing about the traders, but I went out of my way to say that their views should be taken into consideration, although they were not the only element. If the hon. Member gets so passionate about this, I can only say that if he intends to fight the next election on this issue, good luck to him, but if he believes

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that Governments should govern on the basis that they do not put on the Whip on any item of Government business I fully understand why the Liberal Party is in its present position.
I want the hon. Member to understand —although this is an internal party matter and nothing to do with the House—that we had a discussion of the matter in the so-called privacy of our so-called private meeting, and that a vote taken at the end resulted in a substantial majority of those present voting in favour of the £, and that was it. There were no Whips, or anything like that.
I even convinced my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) on this—
Mr. Michael Foot: As a matter of fact, at the party meeting I voted the other way. The only time my right hon. Friend convinced me was on the Selective Employment Tax, and I am thinking differently about that now.
Mr. Callaghan: That only goes to show the loyalty which my hon. Friend shows to democratic decisions. I know that he always votes in accordance with party decisions.
There were three issues connected with the Bill. One was the change to decimalisation. There is general agreement in the House about that—and no dissent has come from Labour, Liberal or Conservative on that score. On the issue of the unit to be selected, there has been a difference that has not been resolved except in the normal way of counting votes.
On the third issue, there has been general agreement that we were right to set up the Decimal Currency Board at this stage. The problems thrown up by the hon. Members for Moray and Nairn, Orpington and Wanstead and Woodford, and other hon. Members go to show that the Decimal Currency Board is the best means of resolving these matters.
I appeal to traders of all kinds and to other interests to turn to the Decimal Currency Board for advice and assistance. Sir William Fiske and Lord Erroll are men of great experience and can be of great assistance to industry and commerce, consumer organisations, and private and local bodies. They can be of assistance to all in resolving the
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problems that will emerge and which are emerging.
I invite the co-operation of the Press, of the B.B.C. and I.T.A. and all the other organisations in helping this venture forward so that there is full understanding of what is involved, and that people do not get too terrified about it—it is nothing like as formidable as some people seem to have been making out.
The production of coinage will take place at Llantrisant. Already, under the Government's powers, work has started on the clearing of the site there and, subject to the Bill getting its Third Reading tonight and going through another place, we hope that the decimal coinage will start to be produced within a little over 12 months from now.
This is a formidable task that we are undertaking, but there is general agreement in the House that there are great advantages to be derived for this country from the change-over to decimals. I am very grateful for the consideration that the House has given to the Bill in an attempt to make the venture a success.
Question put and agreed to.
Bill accordingly read the Third time and passed.

PUBLIC WORKS LOANS (No. 2) BILL
Order read for resuming adjourned debate on Question [19th June], That the Bill be now read a Second time.
Question again proposed.
11.45 p.m.
Mr. John Nott: It is with great regret that I break into the nostalgia induced by the last few minutes of the debate on the Decimal Currency Bill. I am afraid that from discussing the relative merits of a 2·4d. unit and a farthing unit we have to come to an issue involving £900 million. I can only say that I find it rather unfortunate that we should have had this debate initiated on a Monday morning and that after some 12 hours' sitting in the House we are now trying to complete consideration of this very important Bill at nearly midnight. I feel that the Public Works Loans Bill, which is one of the few opportunities we have to discuss local authorities' capital expenditure and borrowing, should be debated

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during a normal afternoon's business and that this is not really a good time to complete the business on this Bill.
When we adjourned on Monday morning, I was just starting to follow my hon. Friend the Member for Finchley (Mrs. Thatcher) in what she stated about the radical change which is being made in the old criteria under which local authorities could go to the Public Works Loan Board and the new criteria of 34 and 44 per cent. of net capital expenditure. I shall not mention this matter again. I want to pass on and to try to keep my remarks brief, because I know that the House wishes to adjourn.
It is true, I think, to say that the amounts which will be forthcoming from the Public Works Loan Board for local authorities in the current year will be slightly less than they were last year, and I personally regard this as being a trend in the right direction. I cannot see any justification whatsoever for a form of P.W.L.B. lending which subsidises rates of interest. I welcome the trend back to the market and away from the 1963 White Paper and to a system whereby the local authorities pay current market rates of interest.
When people criticise the scramble for money which goes on among the 1,500 or so local authorities in the market, they are not in fact criticising the system of market borrowing by local authorities but are making a criticism of the structure of local government. If the Royal Commission were to suggest a structure whereby there were 40 or 50 first-tier local authorities with greater powers to raise revenue and to meet expenditure, the problems which now exist for many small authorities in competing with one another in the market would no longer exist. Therefore, the criticisms which are now made of market borrowing by local authorities are very much a criticism of the present structure of local government, rather than a criticism of their going to the open market for their money.
I pass on to one or two remarks made by my hon. Friend with regard to Report No. 34 of the Prices and Incomes Board on bank charges. I regard this—I am going to refer to the local authority aspects of it—as being in parts one of the most ludicrous Reports which the Prices and Incomes Board has yet presented. We are discussing local authori-
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ties here, but this whole recommendation surrounding the endowment profit seems to me quite ludicrous, because who is Mr. Aubrey Jones and his consultants, to say what normal profit is when Bank Rate is at 5 per cent. and not at 7 per cent.? The remarks about liquidity ratios are also very strange, because these are controlled by government monetary policy. I shall be interested to see what happens when the banks really start competing and going to the Chancellor and asking if they can issue negotiable certifiscates of deposit.
In paragraph 188, Mr. Aubrey Jones makes certain criticism about the level of bank charges to local government. And this concerns the whole question of interest rates, which we were discussing at our Monday sitting. It is reasonable that local authorities should pay per cent. more for their money from the banks than is paid by the nationalised industries, and I do not see that Mr. Aubrey Jones has considered in depth the whole question.
It is true that the security of nationalised industries and local authorities is largely the same—and the question of security was discussed—but local authorities are not such good customers for the banks as the nationalised industries. When sterling crises arose in earlier years. we all know local authorities which had not been for accommodation to banking houses for months went there for hundreds of millions of £s. It cannot be said that a ½ per cent. differential between the nationalised industries and the local authorities is too great a discrimination, bearing in mind that the banks are basically acting, in practical terms, as lenders of last resort, to local authorities, although admittedly the P.W.L.B. is behind them again. Banks make precious little money out of local authorities during the year, and then the authorities expect to go to the banks with hardly any warning when there is a run on their short-term deposits.
I am very much against the suggestion made in the Report in respect of a centralised borrowing agency for local authorities. The Chancellor raised this point in his Budget speech. I am against the P.W.L.B. being the prime and only provider of funds for local authorities. No consideration whatever is given in the Report to the other side of the argument,

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which is far more important. Many of my hon. Friends will consider it to be so. I refer to the independence of local government and how far that can be maintained if there is one central borrowing organisaton or if the P.W.L.B. raises all the funds. How shall we maintain interest in local government if authorities take all their funds from a centralised borrowing agency? I foresee that the Royal Commission must consider the whole question of local authority borrowing and capital expenditure and that they may well suggest 40 or 50 first-tier authorities with greater financial powers. This will clear away the problems of the rural district councils and the urban district councils in the market. We have to go in for a system whereby local authorities will pay the going interest rate in the market with less and less resort to the P.W.L.B.
If central borrowing organisations are required, I should like to see a development of the regional loans bureaux, which are going on very well. The North of England Regional Loans Bureau has performed a most valuable service for local authorities in the North by acting as a clearing house for their funds. Those with surplus funds can place money with the bureau and those which need funds can go there for assistance, thereby saving the commissions which they need to pay in the market. There is a strong argument for a development by local authorities of the regional loans bureaux which would act as clearing houses for their funds. This development would be in line with the need to maintain the full independence of local government and to attract people into it.
I want to be brief, and I will leave out most of the things which I wanted to say. I regret having to do so on this vitally important matter, and I do so only because of the hour at which the Bill is brought before the House. We should have an opportunity to debate at great length these vital matters of capital expenditure by the public sector, and clearly that is not possible tonight.
But there are one or two specific points which I want to make to the Financial Secretary. When we debated the Public Works Loan Bill on 13th May, 1966, I raised certain points with him. I do not
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think that it is because I made these suggestions that a great number of them have come about. But there has been good progress. The Government have done an excellent job in abolishing Stamp Duty on local authority borrowing. That is a very sensible move. It never made sense for one part of the public sector to levy a tax on another, creating administrative problems in the middle. This is one improvement in the situation.
Secondly, there has been an interesting move to allow some local authorities, by means of Private Act powers, to issue bills in anticipation of revenue. I fully understand that the Treasury does not want to see the market swamped with the bills of local authorities. I appreciate that point fully. But it would be much more satisfactory, rather than allowing local authorities to seek these powers one by one by means of private Acts, to give an enabling power for a very small amount, say 10 per cent. of the rate revenue, and to allow them to issue bills in these proportions as long as the total amount is kept to a reasonable level.
Clearly, this would lower interest rates substantially for local authorities. The margin between three months money and 90 day bills has been about a quarter per cent. These are ways whereby the cost of money could be brought down. It is not right to say td local authorities, "You can issue bills, but if you wish to do so you must get a special Act of Parliament to give you the power."
About the development of payment gross on deposits, the Inland Revenue, I much regret to say, is indulging in extra-statutory legislation, and I shall be interested to know how the Inland Revenue can say that, in future, with regard to Sections 169 and 170 of the Income Tax Act, it will in future allow banks to pay interest gross on deposits. We know why it should be done, and it is right, but it is unhealthy for Parliamentary democracy that the Inland Revenue should be making ex cathedra statements of this nature.
If this is going on, why should local authorities not be allowed to pay interest gross themselves over one year to nonresidents, because if this were done, much of the foreign money coming into short term deposits and causing so much trouble to the Chancellor, and which led to the

1901
White Paper in 1963, would be enabled as a result of receiving interest gross to flow into long term securities. This is a minor change which could be made to the general benefit of the balance of payments, without difficulty.
I recall that a few weeks ago the Chancellor abolished blocked sterling. I have been pressing for this with the Treasury for about six years. There has never been any real justification for perpetuating the system of blocked sterling, and if he would make a small adjustment to enable local authorities to pay interest gross we could see foreign money flowing into bonds instead of into short deposits and this would be a wholly healthy development so far as non-sterling deposits were concerned.
There is one final matter in which I have a personal interest. The Financial Secretary promised, when we debated the Public Works Loans Bill in May 1966, to look into the £1 million limit on negotiable bonds. The quota has run out, I understand, and nothing has happened. I believe it would be a big rationalisation of local authority borrowing in this country if we could only get down to three separate securities. The first would be a deposit receipt. If we had a deposit receipt up to 364 days, we could then have the negotiable bond as the instrument of borrowing for from one to 30 years. We would get rid of the stock issue altogether.
If only the Chancellor would revise the stock regulations and make them simple, like the bond regulations, there would be much more simplicity in borrowing, and it could be done overnight. We would have bonds used for all securities for one to 30 years with more simple regulations. A bond is almost exactly the same as stock now and we would have the deposit receipt for up to 364 days. Then, finally, there would be bills.
If we were to have this type of development, it would help if local authorities could pay annual interest instead of semi-annual interest. This would rationalise and make much simpler the administrative work in which local authority treasurers must indulge. These are minor matters which add up to a rationalization of local authority borrowing.
1902
Finally—[Interruption.]—and this is my final point. I do not know why hon. Gentlemen opposite seem to be complaining. This is an important subject and I have not spoken for long. I would be quite happy to go on speaking for at least another 20 minutes, and if hon. Gentlemen opposite interrupt me my speech will be that much longer. I am pleased to note that the Chancellor has stayed for this debate.
There is great uncertainty in local government about the future pattern of capital expenditure. Under the National Plan it was agreed that 4¼ per cent. at constant prices would be the growth rate of public sector expenditure. This involved a rate of 8½ per cent. per year for local authorities. For education, highways, roads and the rest, local authorities have made their plans on the basis of an 8½ per cent. rise. Unless the Chancellor tells them what their priorities are to be and what rate of growth they are to be allowed, it will be almost impossible for treasurers to decide their programmes for the coming years. There have been a number of what I consider to have been evasive Answers to Parliamentary Questions about the growth rate of capital expenditure for local authorities. What will it be now that the figure is 3 per cent. for the economy as a whole, the figure which the Chancellor is now forecasting? The priorities must be more clearly defined. I hope that that will be done, and soon.
The Financial Secretary to the Treasury (Mr. Niall MacDermot): I rise to answer—
Mr. Deputy Speaker (Sir Eric Fletcher): Order. The hon. and learned Gentleman has exhausted his right to speak. He may address the House again only with the leave of the House.
Mr. MacDermot: I am obliged to you, Mr. Deputy Speaker, for reminding me. With your leave, and that of the House, I will reply to the debate. I know that many of my hon. Friends would wish that I did so in the shortest possible time. However, there are many people outside the House to whom this debate is of considerable importance and, out of respect for the thoughtful speech of the hon. Lady the Member for Finchley (Mrs. Thatcher) on the last occasion when we debated this subject, I will reply to some of the points made

1903
on that occasion. The hon. Member for St. Ives (Mr. Nott), who has great experience of these matters, also made an important speech.
The hon. Member for Finchley went over the history of what has been happening in this sphere since the publication of the 1963 White Paper. I have little quarrel with the facts given in her description of what has happened, although she made a slip in saying that the figure was £318 million for estimated net Exchequer issues to the Board in 1966–67. The correct figure was £398 million. The out-turn for the year, of £515 million, is to be compared with an estimate of £398 million. It is still a substantial excess and one which we must rein in. The result, therefore, is that this year's estimate of £480 million is an increase of £82 million on the estimate, although it is a reduction of £35 million on the out-turn for last year.
The hon. Lady was right in saying that the new quotas of 34 per cent. for capital payments are not akin to, and strictly comparable with, the old quotas of 30 per cent. of the longer-term borrowing requirement. They relate to a different and smaller total, and it is fair to say that the new quotas come out, in effect, at rather less than the old quotas; although I believe that, in practice, they will prove to be only just less. However, she somewhat overstated the matter when she suggested that, by changing the basis of the calculation of quotas, the Government had destroyed the basis of the 1963 White Paper.
As I made clear in my speech when we last discussed this subject, the change of formula does not affect the basis of the White Paper, and it will depend on what the percentage is of the access allowed. The choice of percentage followed from the decision of my right hon. Friend the Chancellor of the Exchequer about what the Budget could afford and that decision was not affected either way by the change of formula.
The hon. Lady commented that although we had had consultations with the local authorities they were perhaps rather cursory. Of course there are inevitable limitations in these pre-budgetary matters, but when we were considering the change of formula this was put to the representatives of the local authorities
1904
and my right hon. Friend the Chief Secretary pointed out that the amount of borrowing from the Board was a budgetary matter and it was difficult to conclude meaningful consultations with the local authorities until the rest of the budgetary picture was clear.
The authorities' representatives first met Treasury officials on 31st March when the proposals for changes in the amounts were put to them. They were not disposed to disagree in principle about the change of formula, but they were disturbed about the amount of access. There was a further meeting on 3rd April which included executive members as well as officers of the local authorities when the Chief Secretary explained the position and that the amount could not be increased.
The deputation argued, as did the hon. Lady, that there had been an element of quid pro quo in the 1963 White Paper and they suggested therefore that the time limit for complying with the restrictions on temporary borrowing should be extended. We accepted this argument and accordingly the time limit for complying with the ceiling on temporary borrowing was extended for a year, to 31st March, 1969. The force of this argument and the decision which flowed from it are surely self-evident, that the basis of the White Paper deal remains in force and has not been fundamentally affected by the change Of formula.
Later in her speech the hon. Lady appeared to be arguing, if I understood rightly, that one result of the change of formula would be for local authorities to get into capital payments things which they had been dealing with by way of revenue payments. If that is her meaning it shows a misunderstanding of the effects Of the change of formula. Under the old formula only capital expenditure financed from borrowing came into the calculation. Under the new formula access is calculated on payments whether they are met out of revenue or from borrowing. The effect of the change of formula would be rather the opposite. One could say that the more capital expenditure authorities financed from revenue, the more of their borrowing quota there could be available to finance borrowing requirements fOr other purposes.

1905
The hon. Lady and the hon. Member for St. Ives referred to the comments in the Report by the Prices and Incomes Board on bank charges. They will not expect me to say more now than that the Government will look into the conclusion reached by the Board on the question of the ½ per cent. differential for interest rates and the suggestion that there could be full access to the Board. That of course will be taken into account in the general review of public sector borrowing arrangements which my right hon. Friend the Chancellor of the Exchequer announced in his Budget Statement.
The hon. Lady, at the end of her speech, asked whether this was not another interim statement of policy. It is too early to say yet what may emerge from the review and what its implications will be for local authority borrowing from the Board. Naturally, once any decisions have been taken, Parliament will be informed and at the appropriate stages there will be consultations with the representatives of the local authorities.
The hon. Member for St. Ives, in the first part of his speech the other mórning, made the point that those local authorities which had already complied with the requirement to keep their short-term borrowing within the 20 per cent. limit were in some way penalised for having been "good boys" by the extension nów granted to other authorities.
I have outlined how the decision came to be made, and I do not think that feeling is held within local authority circles. The fact is that there was no requirement laid down in the 1963 arrangements about the rate at which this objective should he achieved before March, 1968, and local, authorities were perfectly entitled to defer the necessary funding until this year if they preferred to do so. Some may have been unable, through no fault of their own, to achieve the funding earlier.
Consequently, when the decision was forced upon us that we could not expand access in accordance with what was predicted in the 1963 White Paper, I think it followed that so far from creating injustice to those authorities whom the hon. Member called the "good boys", we would undoubtedly be creating an in-
1906
justice to the other local authorities if we were not to grant an extension.
I was criticised last time for not having commented on interest rate matters. I have really nothing new to say on that beyond what is known to the House and which hon. Members have commented upon in their speeches, in particular the removal of the peg which was introduced by my right hon. Friend on 19th January, 1965, in order to mitigate the effect of a 7 per cent. Bank Rate on the housing programme. He now has, from 31st May, decided to revert to rates based on Government credit rates.
As the hon. Lady pointed out, the cost to local authorities of borrowing for housing will now be protected by arrangements in the Housing Subsidies Act which will make good the difference between the current cost of borrowing and 4 per cent. Thus the main reason for holding interest rates on quota loans to the August 1964 level has now ceased to apply and the cost of borrowing for other purposes ranks for rate support grant. The additional cost to the local authorities will therefore be very small. I am grateful to hon. Members for the general welcome they have given to this change.
The hon. Member for St. Ives raised this evening a number of points of importance and of some technicality. I am sure he does not wish me to comment in any detail on them at this stage. I can tell him that some of the matters that he referred to are under consideration at present. For example, representations have been made by local authorities about the restrictions on bill borrowing and these are being considered, but I have no statement to make about his question at present.
With regard to the question of local authority bonds, the Treasury have already had one meeting with representatives of the local authorities about new arrangements for controlling the issue of bonds. This is to be discussed further at another meeting towards the end of next month, and I am sure we can reach agreement on something that will be satisfactory to all concerned. If I may, I will study the other points the hon. Member referred to and, if I find there is any further information I am able to give him about these matters, I will write to him.

1907
I apologise to the House for taking this time at this time, but I hope that with these explanations the House will now be content 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. Charles R. Morris.]
Committee this day.

HOSPITALS (SURGICAL OPERATIONS)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Charles R. Morris.]
12.14 a.m.
Mr. Christopher Price: The interest in the subject that I am raising tonight, that of precautions against errors in surgical operations in hospital, has stemmed from a recent case in Birmingham. But I do not intend to talk about that case at all tonight, since an inquiry has been set up and it is up to the inquiry to make all the investigations into it. I understand that my hon. Friend the Parliamentary Secretary will be able to tell us a little more about the inquiry tonight. I intend to talk about the future, not about the past. I shall make some suggestions as to how it might be possible to reduce the rate of errors in surgical operations.
It is right that Parliament should debate this subject. The public seldom discusses it, because when cases occur they quickly become sub judice. Cases often do not come out into the open. The Birmingham case, which was particularly severe, came out into the open. There should be much more public discussion about the general problem of precautions against these errors.
I hope that my hon. Friend will clear up some of the doubt we have about the true figures for wrong operations. On Monday, in answer to a Question tabled by me, my hon. Friend said that the figures of wrong operations notified to the Ministry were 3 in 1962, 10 in 1963, 6 in 1964, and 7 in 1965. It would be wrong if the public got the impression that those were the total figures for wrong
1908
operations. It is difficult to discover how many wrong operations take place, but the figures of the Medical Defence Union, apart from the figures for errors such as leaving swabs or instruments inside patients, are considerably in excess of those given by my hon. Friend. The Medical Defence Union's figures are 24 in 1961, 16 in 1962, 11 in 1963, 27 in 1964, 23 in 1965, 19 in 1966, and 13 so far this year. Even these figures, which average out at just under 20 per year, are probably not the complete picture, because the Medical Defence Union represents only about 70 per cent. of all doctors. No doubt the other defence unions have figures which would supplement these.
A considerable number of claims are not recorded. Some are not proceeded with. There must be a number of errors which never come to the notice of the patient: the matter is covered up in one way or another. The true figures must be in excess of the average of 20 claims per year notified to the Medical Defence Union. In the light of these figures, the Ministry should take this problem very seriously, particularly as this year's figures show a steep increase.
The real difficulty is that we lack statistics. We have these different sets of figures, but, even so, not even the Medical Defence Union, which is most assiduous in trying to compile information and educate the medical profession in this matter, does not undertake any systematic analysis of the figures.
Is it not the task of the Ministry now not only to collect some authoritative statistics but to analyse them in terms of cause, area, type of hospital, and under any other head it thinks right, so that we may, perhaps, be able to throw up evidence which can help in avoiding some of these accidents, all of which are avoidable if we go about it the right way?
I suspect that the basic reason why the Ministry has not been very assiduous in collecting statistics—the job has largely been left to the M.D.U.—is that it has always regarded this as, so to speak, a clinical area of medicine which should be left to the profession and not one in which it is proper for the Ministry itself to intervene. I contest that view. This is a matter of such public concern now that it is time for the Ministry to move in the matter, compile some facts, analyse

1909
them, and use all the authority at its command to ensure that proper conventions are adhered to.
Turning from statistics to the measures which are taken to prevent accidents in hospital, we find, here again, that it is the professional organisations—or some of them—which have been taking action. In 1962, and again in 1966, the Medical Defence Union, together with two of the nurses' organisations, issued memoranda both about wrong operations—the wrong side, the wrong limb, the wrong type of operation and so on—and about precautions to prevent objects such as swabs and instruments being left in the patient's body. These were excellent and detailed memoranda laying down exact procedures to be followed from the moment the patient entered hospital until after the operation.
One can sense in the 1963 Report of the Medical Defence Union a certain amount of veiled criticism that it was, as it were, forced into producing these memoranda, after waiting for some years for the Royal College of Surgeons to take action. I do not deny that the Royal College had been discussing the matter and has had it under consideration all the time, but I feel that it was really for the Royal College rather than the Medical Defence Union to issue memoranda about precautions against wrong operations. However, be that as it may, two first-class memoranda have been produced.
As soon as I began investigating this matter, it occurred to me that the Ministry should have had a part in issuing these memoranda. At least, it should have been a joint effort between the Ministry and the professional organisations. I understand that the Ministry has given the memoranda its blessing and has on more than one occasion sent advice to hospital boards to the effect that they should be adhered to in their detail, but the fact that it was not the Ministry which produced them has probably lessened their impact.
The Ministry must play a far more important part in the future in producing memoranda and laying down exact procedures to prevent errors. These memoranda have been issued and commended by the Ministry. What we do not yet know is the exact extent to which individual hospitals adhere to them. I fully understand that the Minister can-
1910
not simply issue an edict to every hospital saying, "You will adopt this particular procedure in this clinical operation". It is very much up to the profession to decide how it proceeds. But the whole weight of the Ministry's advisory capacity must now be thrown behind an attempt to make these procedures standard throughout every hospital in the country, because we are a very long way, I suspect, from getting any sort of standardisation. How many hospitals have adopted the procedure in the memoranda, and how many have not? What are the sort of proportions and numbers? We should be told so that we know the kind of task ahead to get standardisation.
The matter is a little more serious because when the matter was debated in another place on 7th June the Under-Secretary of State for Commonwealth Affairs, my noble Friend, Lord Beswick, who took responsibility for answering questions, said that standardisation was not necessarily desirable. Is it the policy of the Ministry of Health that all these procedures are not necessarily desirable? I accept that it is not possible to adopt exactly the same procedure in every hospital, because the lay-out of hospitals differs. But surely it cannot be true that the Ministry's policy is that standardisation is not desirable? We want the absolute maximum of standardisation between hospitals. With doctors increasingly moving from one hospital to another throughout Britain, and shortly far more throughout Europe, we must have some sort of fairly standard procedure, so that both doctors and nurses can almost perform operations in their sleep.
I spent 18 not wholly happy months in the Army as a lance-bombardier in the Royal Artillery. There I was taught the procedure of starting up and closing down radar sets in such a way that after a few months I could almost have done it in my sleep. That is the sort of impression we want to get on our doctors and nurses. I do not want them doing operations in their sleep, but I want them to get into a standard procedure so that if they miss out a step they feel that something is wrong.
I do not want to go through the memoranda and the various things that they have laid down. Some of the most

1911
important and, I think, un-standard things at the moment are the marking with indelible ink of the limb or side to be operated on. I am told that this is not nearly as universal as many of us have been led to believe. Unfortunately, there is a tradition in the medical profession when writing prescriptions which fall into the hands of patients deliberately to write them illegibly so that patients do not understand the sort of medicine with which they are being medicated. This illegible writing often spills over into doctors' notes in hospitals, and the Ministry ought to have a drive on this subject.
Most important of all, we need throughout the country, and we do not yet have, a standardised way in which to refer to fingers. Some people still apparently refer to the first and second finger and so on and many hospitals do not know from which end to count—from the thumb or little finger end. The memorandum lays down exactly what names should be used—the thumb, the index finger and so on right down to the little finger. Each finger has a name and that is the sort of practice which ought to be standardised throughout Britain.
I hope that the Ministry will have a drive on this matter and will not feel that it has to wait for this inquiry and perhaps for the results of further legal proceedings before doing anything. In its own advice to the public about how to make complaints to hospitals, the Ministry says that legal proceedings should not in any way hold up putting things right, having an inquiry and changing the system, and I hope that the Ministry will adopt that attitude towards the total picture.
The three most important pleas which I make tonight are, first, that we should get full statistics from the Ministry in future about these errors in surgical operations so that we know exactly what the full picture is; secondly, that these statistics should be analysed so that we can try to find out some of the causes and try to take precautions against them; thirdly, that the Ministry should make a drive to make the application of memoranda issued by the Medical Defence Union universal in all hospitals in Great Britain.
In raising this subject I do not want in any way to be alarmist. Doctors and nurses throughout the country do a
1912
magnificent job, but when we discuss this problem of avoidable errors in surgical operations it is something of a euphemism to call them errors and it is something of a euphemism to call them accidents or incidents. Every mistake of this kind is a potential tragedy, and that is why the Minister's task is particularly urgent.
12.32 a.m.
The Parliamentary Secretary to the Ministry of Health (Mr. Julian Snow): I am grateful to my hon. Friend the Member for Birmingham, Perry Barr (Mr. Christopher Price) for raising the subject of precautions against errors in surgical operations, because it enables me briefly to set out what steps have already been taken in this matter by the Minister, and also to alleviate the understandable concern which reports of these unfortunate errors may give rise to in the minds of members of the public. My hon. Friend has referred to the recent example of such an error, the tragic incident at Birmingham. I am grateful to him for his restraint about this case. As he knows, the Birmingham Regional Hospital Board is to hold an independent inquiry into it and I am sure that the House will appreciate that in view of that I cannot at this stage make any comments on the case. The Board has been fortunate enough to obtain the services of Mr. John Field Evans, a barrister, as chairman, and Professor Robert Milnes Walker, a former professor of surgery and Mrs. M. Comber-Higgs, Matron of Crumpsall Hospital, Manchester.
While every such error is to be regretted, because of the harm suffered by the patient, and because it is, strictly speaking, preventable, it is right that we should compare the number of these errors with the total number of operations performed in our hospitals to see the matter in perspective. In parenthesis I might say that I agree with my hon. Friend that these incidents, or accidents, are matters which can hardly be defended.
The Ministry does not collect statistics of surgical errors as such, but hospital authorities make annual returns of the claims which they receive for compensation in respect of personal injuries sustained in hospital by patients, staff and others. Claims reported in those returns in respect of wrong operations—that is, operation on the wrong patient or part—were three for 1961–62, ten for 1962–63,

1913
six for 1963–64, seven for 1964–65 and eight for 1965–66. These figures relate to England and Wales.
As my hon. Friend mentioned, another type of error in surgical operations is the leaving of foreign bodies, such as swabs, in patients. According to the returns, claims in respect of this type of error for the same years were 14, 12, 15, 25 and 22 respectively.
I should mention that these figures differ somewhat from figures which have been given by the Medical Defence Union. That body has said that, in the three years 1963–65, it has dealt with 61 cases of wrong operations and 110 cases of failure to remove swabs or other foreign bodies. The Medical Defence Union figures, of course, include not only cases arising in National Health Service hospitals, but cases arising in private practice and abroad. To some extent, this may explain the discrepancy between the two sets of figures.
It may be that in some cases the information provided by hospital authorities to the Ministry is not sufficiently detailed to enable cases of surgical errors always to be identified. We are now considering whether the returns should be amended to produce rather more detailed information about these types of surgical errors. These factors explain why there is a difference between the Medical Defence Union figures and ours. Obviously one cannot say that one set is correct and the other incorrect, since they are not compiled on the same basis.
It is fair to say that not all the errors reported in the returns to the Ministry are equally tragic in their consequences. For instance, a patient who has had the wrong tooth extracted in hospital may well have suffered unnecessary pain and deprivation, but his misfortune is of a different nature from that of the recent very distressing case at Birmingham.
Against these figures must be set the fact that the number of operations carried out in National Health Service hospitals in this country is now about two million a year. Compared with that, the number of errors is so small as to be infinitesimal. Therefore, while we all deeply regret that these errors should have occurred at all, the figures prove the high standard of care for which our hospitals
1914
are justly famous. I hope that they will put the matter in perspective and serve to reassure the public.
It is the duty of hospital authorities to see that patients are properly cared for, and one aspect of that duty is to ensure that there are recognised procedures laid down in their hospitals to guard against the risk of error in surgical operations.
I am now addressing myself to the point on which my hon. Friend has spent some time. All National Health Service hospitals where these operations are carried out have such procedures. It is clearly the professional and ethical duty of every doctor and nurse to take precautions against mistakes, and, of course, it is accepted as such. Moreover, failure to carry out this duty of care may lead to actions for negligence against the hospital authority or the individuals concerned, or both. I do not propose to go any further into this aspect, since legal liability will depend on the facts of each case, but the Minister has taken the view that the drawing up of these procedures is essentially a professional matter, for the medical and nursing professions, and he has not himself issued any detailed guidance or sought to lay down standard procedures. I may tell my hon. Friend that I was attracted to the suggestion that there should be "standing orders" at our hospitals, but, for reasons which I have explained, it does not appear to be a practical proposition.
The then Minister of Health, therefore, welcomed the production towards the end of 1961 of a joint memorandum on Safeguards Against Wrong Operations by the Medical Defence Union and the Royal College of Nursing. It listed potential causes of error, such as failure to label patients or to see that the right case notes accompany them, changes in theatre lists after the commencement of operating sessions, insufficient information in the notes as to the side or part of the patient to be operated on, and failure to check these and other points. The memorandum also made detailed recommendations to safeguard against errors. The Minister at the time drew the attention of all hospital authorities to this memorandum and asked them to arrange for the procedures in their hospitals to be reviewed immediately so that a clearly defined and invariable routine should be drawn up by the medical and nursing staff which

1915
was understood and followed by all concerned. He also stressed that if a mistake should occur, the full circumstances should always be investigated by the hospital authority, and precautions taken to avoid recurrence. Hospital authorities later confirmed that they had carried out this review.
The then Minister took similar action when in 1963 the same professional bodies produced a joint memorandum on safeguards against failure to remove swabs and other foreign bodies from patients. Like its predecessor, this also listed potential causes of error and made detailed recommendations to safeguard against them. Again hospital authorities were asked to ensure that procedures were reviewed in the light of the recommendations contained in the memorandum.
In 1966 the same bodies produced revised versions of both memoranda and sent copies to hospital boards. Meanwhile, the Royal College of Surgeons had set up a Committee on Surgical Accidents, and officers of the Ministry kept in close touch with this, attending its meetings and providing information. The Committee eventually came to the conclusion that the most effective contribution that the Royal College could make to the problem was through its normal educational activities. Although the 1966 revisions of the joint memoranda did not contain any changes of substance from the original version, the Ministry have recently drawn them to the attention of hospital authorities and again asked them, where this had not already been done, to review procedures in the light of the recommendations of the memoranda, and to ensure that all the staff concerned were made aware of the procedures to be followed.
I have given this brief account of the steps taken by the Ministry over the past few years to indicate the continuing concern of the Minister that all possible measures should be taken in hospitals to reduce and obviate the risk of surgical errors happening. I do not propose to pursue a number of points which have been raised by my hon. Friend, which require full consideration by experts, but perhaps I might deal briefly with one suggestion which has been made, namely, the question of a uniform standard pro-
1916
cedure, centrally devised and laid down, to be applicable in every hospital and for every type of operation.
At first sight this may seem attractive. Doctors and other hospital staffs move freely from one hospital to another. Indeed, doctors not infrequently have two or more concurrent hospital appointments, and it would undoubtedly be simpler if everything were done in exactly the same way in all hospitals. There are, however, various practical and other considerations, which, I am afraid, make the attainment of such an ideal impossible.
The hospitals regularly undertaking surgical operations vary from some quite small cottage hospitals with perhaps one operating theatre, with no separate anaesthetising room, to the teaching hospitals, or the district general hospitals, with hundreds of beds and several operating theatres and anaesthetising rooms in use at the same time. In some hospitals there are recovery bays adjacent to the operating theatre in which patients recovering from the anaesthetic can remain under the close supervision of the anaesthetist or the surgeon. In other hospitals, less well equipped, other arrangements must be made.
The nature of the operations being performed will also influence the particular procedure adopted. Moreover, as I have already explained, hospital authorities and surgeons have a duty to the patients to provide the best possible care, and it would not be consistent with this responsibility if they were to be subject to the direction of the Minister in such essentially professional questions. In principle, what has been done hitherto seems to be right. A highly professional body prepares general guidance as to the dangers to be guarded against, and the methods available to ensure safety, the Minister ensures that all hospital authorities are aware of this guidance, and the hospital authorities devise procedures suited to their particular circumstances. Perhaps it is worth saying here that however good the procedures laid down may be, there must always be the risk of human error.
It may also be suggested that the Ministry should analyse the cases of surgical error that occur in case there are lessons of general import to be learned As I have already indicated, the Medical Defence Union and the Royal College of

1917
Nursing have in their memoranda identified a number of potential causes of error and recommended safeguards against them, and they revised their memoranda only last year. This is nevertheless a point which my hon. Friend made, and we shall be looking into it.
Lastly, I think that there is a lot of importance to be attached to the question—
The Question having been proposed after Ten o'clock on Wednesday evening and the debate having proceeded for half an hour, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at sixteen minutes to One o'clock.

AGRICULTURE, FISHERIES AND FOOD
  Eggs
  Eggs
  Fishing Limits (Treaty of Rome)
  Fishing Limits (Treaty of Rome)
  Agricultural Land (Encroachment)
  Agricultural Land (Encroachment)
  Flotherton Farm, Rothbury (Restrictions)
  Flotherton Farm, Rothbury (Restrictions)
  Tenant Farmers (Displacement Compensation)
  Tenant Farmers (Displacement Compensation)
  Agricultural Production (Stansted Airport)
  Agricultural Production (Stansted Airport)
  Foot-and-Mouth Disease
  Foot-and-Mouth Disease
  Home Grown Food (Sales)
  Home Grown Food (Sales)
  Tractors (Fatal Accidents)
  Tractors (Fatal Accidents)
  Cyclamates
  Cyclamates
  Bacon Weight Pigs (Producer Payment)
  Bacon Weight Pigs (Producer Payment)
  Stansted Airport (Grade of Land)
  Stansted Airport (Grade of Land)
  Farm Animals (Broken Glass)
  Farm Animals (Broken Glass)
  Heath and Forest Fires (Broken Glass)
  Heath and Forest Fires (Broken Glass)
  Bull Beef
  Bull Beef
  Prepacked Frozen Poultry (Added Water)
  Prepacked Frozen Poultry (Added Water)
  Aldrin and Dieldrin (Damage to Wild Life)
  Aldrin and Dieldrin (Damage to Wild Life)
  Agricultural Investment Grants
  Agricultural Investment Grants
  Horticultural Industry (European Economic Community)
  Horticultural Industry (European Economic Community)
  Pigs (Slaughterings)
  Pigs (Slaughterings)
SCOTLAND
  Rowett Institute
  Rowett Institute
  Royal Infirmary, Aberdeen (Extensions)
  Royal Infirmary, Aberdeen (Extensions)
  Housing (Improvement Grants)
  Housing (Improvement Grants)
  Rent Increases (Glenrothes and Fife County Council)
  Rent Increases (Glenrothes and Fife County Council)
  Farmworkers (Wages)
  Farmworkers (Wages)
  Rent Rebate Schemes
  Rent Rebate Schemes
  Jury Service
  Jury Service
  Geriatric Hospital Beds, Ayrshire
  Geriatric Hospital Beds, Ayrshire
  Highlands and Islands Development Board (Buteshire)
  Highlands and Islands Development Board (Buteshire)
  Young Offenders (Accommodation)
  Young Offenders (Accommodation)
  Hospital Building Programme
  Hospital Building Programme
ROADS
  Congestion (Preventive Measures)
  Congestion (Preventive Measures)
  Road Programme
  Road Programme
  A Class Roads (Pedestrian Subways)
  A Class Roads (Pedestrian Subways)
  Pedestrian Crossings (Accidents)
  Pedestrian Crossings (Accidents)
  Trunk Road and Motorway Schemes (Quarterly Lists)
  Trunk Road and Motorway Schemes (Quarterly Lists)
  Substandard Bridges
  Substandard Bridges
  Development Areas
  Development Areas
TRANSPORT
  Reflective Number Plates
  Reflective Number Plates
  Bus Operators (Fares)
  Bus Operators (Fares)
  Vehicle Excise Duty (Evasion)
  Vehicle Excise Duty (Evasion)
PORTS
  South Wales Ports (Investment Programme)
  South Wales Ports (Investment Programme)
RAILWAYS
  Surplus Land Sales
  Surplus Land Sales
  Trains (Rescheduling Saving)
  Trains (Rescheduling Saving)
AVIATION
  Charter Aircraft (Age Limit)
  Charter Aircraft (Age Limit)
  Airline Pilots (Employment)
  Airline Pilots (Employment)
  Autair International Ltd. (Appeal)
  Autair International Ltd. (Appeal)
  Stansted Airport
  Stansted Airport
  Heathrow Airport (Night Jet Flights)
  Heathrow Airport (Night Jet Flights)
BOARD OF TRADE
  Factories (Development Areas)
  Factories (Development Areas)
  Titanium (Exports)
  Titanium (Exports)
  Imports
  Imports
  Patent Office (Selective Employment Tax)
  Patent Office (Selective Employment Tax)
  Yorkshire and Humberside Economic Planning Council (Consultations)
  Yorkshire and Humberside Economic Planning Council (Consultations)
  Television (American Films)
  Television (American Films)
  European Patent Convention
  European Patent Convention
ECONOMIC AFFAIRS
  Yorkshire and Humberside Economic Planning Council
  Yorkshire and Humberside Economic Planning Council
  UNITED NATIONS RELIEF AND WORKS AGENCY (EMERGENCY CONTRIBUTION)
  UNITED NATIONS RELIEF AND WORKS AGENCY (EMERGENCY CONTRIBUTION)
  DIPLOMATIC RELATIONS
  DIPLOMATIC RELATIONS
  GREECE (MRS. MILBOURNE)
  GREECE (MRS. MILBOURNE)
MINISTRY OF DEFENCE
  Government Contractors (Selective Employment Tax)
  Government Contractors (Selective Employment Tax)
  Royal Air Force Station Syerston (Night Flying)
  Royal Air Force Station Syerston (Night Flying)
  Service Training (Arab Nationals)
  Service Training (Arab Nationals)
EDUCATION AND SCIENCE
  Youth Clubs
  Youth Clubs
  Statutory Committees
  Statutory Committees
  Maintenance Grants (Women)
  Maintenance Grants (Women)
HOSPITALS
  Waiting Lists (Rugby Area)
  Waiting Lists (Rugby Area)
  Geriatric Beds (Rugby Area)
  Geriatric Beds (Rugby Area)
  St. Cross Hospital, Rugby (Development)
  St. Cross Hospital, Rugby (Development)
  Staff (Coventry Hospital Group Area)
  Staff (Coventry Hospital Group Area)
  Psychiatric Research
  Psychiatric Research
MINISTRY OF HEALTH
  General Practitioners, Wales (Ratio to Patients)
  General Practitioners, Wales (Ratio to Patients)
HOME DEPARTMENT
  Statutory Committees
  Statutory Committees
  Police Forces, Tyneside (Amalgamation)
  Police Forces, Tyneside (Amalgamation)
LOCAL GOVERNMENT
  Maud Committee (Report)
  Maud Committee (Report)
  Statutory Committees
  Statutory Committees
MINISTRY OF LABOUR
  Wage Standstill Orders
  Wage Standstill Orders
  Productivity Agreements
  Productivity Agreements
  National Minimum Wage
  National Minimum Wage
WIRELESS AND TELEVISION
  Independent Television Contracts
  Independent Television Contracts
  British Broadcasting Corporation (Staff)
  British Broadcasting Corporation (Staff)
TELEPHONE SERVICE
  Trunk Operator Service, Belfast (Delays)
  Trunk Operator Service, Belfast (Delays)
MINISTRY OF POWER
  National Steel Corporation (Trade Unions)
  National Steel Corporation (Trade Unions)
OVERSEAS DEVELOPMENT
  Pakistan (Loans and Grants)
  Pakistan (Loans and Grants)
SOCIAL SECURITY
  Death Grant
  Death Grant
  Industrial Death Benefit (Appeals)
  Industrial Death Benefit (Appeals)
TECHNOLOGY
  Computers (Per Million of Population)
  Computers (Per Million of Population)
NATIONAL FINANCE
  Purchase Tax (Launderette Machines)
  Purchase Tax (Launderette Machines)
  Regional Employment Premium
  Regional Employment Premium
  Rating Assessments
  Rating Assessments
WALES
  Coldra-Raglan Road
  Coldra-Raglan Road
  Welsh Economic Council
  Welsh Economic Council

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

RHODESIA: THE CASE OF MR. MADHZIMBAMUTO
2.36 p.m.
LORD BROCKWAY: 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 when in Rhodesia the application for habeas corpus in the case of Mr. Madhzimbamuto (who has been in prison for nearly two years without a charge against him) was first made; when judgment was delivered by the General Division of the Rhodesian Court; when the appeal was heard by the Appellate Division; and when they expect the Appellate Division to deliver judgment.]
THE LORD CHANCELLOR (LORD GARDINER): My Lords, the application for habeas corpus was first made on March 14, 1966. Subsequently the application was amended to substitute an application to set aside the Order detaining Mr. Madhzimbamuto in prison. Judgment was delivered on September 9, 1966. The appeal was heard between January 30 and February 11, 1967. It was announced on April 28, 1967, that the judges had themselves raised new points on which they invited argument and that this would further delay the delivering of judgment.
LORD BROCKWAY: My Lords, did I hear correctly that the application was made as long ago as March of last year, which is a period of fifteen months? Is it not the recognised practice, in a case of an application for habeas corpus, that it is regarded as an urgent matter on the alleged ground that somebody has been imprisoned unjustifiably? Is there any justification for this long delay in reaching a decision about habeas corpus?
THE LORD CHANCELLOR: My Lords, in the first place it must be remembered that this is obviously a very important, and not necessarily easy, case. Secondly, the Chief Justice has recently had an operation, from which I am very glad to hear that he is now successfully recovering. It is, of course, the practice throughout the Commonwealth to put everything on one side for an application in the nature of habeas corpus so that it may be determined at an early date. I do not know of any other case in which it has taken anything like as long as this to determine.
LORD BROCKWAY: My Lords, may I ask whether this man has the right of appeal to the Privy Council; and, if so, does not doubt inevitably arise as to whether the issue is being deferred because, if it did go to the Privy Council, it would be a matter of the legality of the decrees and perhaps the legality of the Rhodesian Government themselves?
THE LORD CHANCELLOR: My Lords, I think that implicit in the noble Lord's question there is really a reflection on the Judiciary of Rhodesia, with which I should certainly not wish to associate myself. There is a right of appeal to the Privy Council, but it cannot be exercised until the appeal has been determined.

SOUTH ARABIA: BRITISH CASUALTIES
LORD SALTOUN: 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 how many persons of British nationality were killed or injured by violence in Aden and the South Arabian Federation in the fifteen months preceding February 22, 1966, and also in the succeeding fifteen months.]
THE MINISTER WITHOUT PORTFOLIO (LORD SHACKLETON): My Lords, the figures for the Federation of South Arabia, which includes Aden, are 23 killed and 210 injured before February 22, 1966, and 32 killed and 525 injured in the succeeding fifteen months.
LORD SALTOUN: My Lords, I am grateful to the noble Lord for his Answer,

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and I am sure that he deplores the figures just as much as I do. I would ask one further question. Do Her Majesty's Government share the view that when one Power hands over the government of the population to another Power, it is essential that there should be no widespread civil unrest or rebellion among the population handed over, since the incoming Power will have no possible chance of starting good constitutional government on taking office?
LORD SHACKLETON: My Lords, it is certainly desirable in the extreme if it is possible; and indeed it is the object of Her Majesty's Government, in the policy Statement which I announced to your Lordships' House on Monday, to provide for a stable handover. But it is, perhaps, a bad moment for me to speculate further at present on this matter.

THE M.3 MOTORWAY
2.42 p.m.
LORD MONTAGU OF BEAULIEU: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government—

(1) When it is hoped to start work on the M.3, London to Basingstoke, motorway;

(2) How long it will take to complete the motorway;

(3) Whether they will cause an immediate survey to be made of the nine miles from the western end of the proposed motorway and the eastern end of the existing Winchester by-pass, in order to ascertain the problems of finally completing the motorway, thus providing a dual-carriageway road from London to Southampton.]

LORD SHEPHERD: My Lords, subject to no unforeseen delays in completion of the statutory procedures, and the availability of funds, we hope that construction of the London to Basingstoke motorway will be started in late 1968 and completed about three years later. A preliminary assessment has already been made of the need to improve the route between
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the western end of the proposed motorway and the Winchester by-pass. The Ministry are considering whether to include such an improvement in the trunk road preparation pool. A more detailed survey is not needed for this decision but it would be put in hand after it had been decided to proceed with preparation of a scheme.
LORD MONTAGU OF BEAULIEU: My Lords, while thanking the noble Lord for the answers to the first two parts of my Question, may I ask Her Majesty's Government to look again at the problem of making the motorway complete? By leaving this gap, are they not risking committing the same errors as those made by those who planned the M.1 and the M.6, which are causing so much congestion at the moment? Also, do they not agree, in regard to the work force and the machinery which will be in operation, that much money might be saved if they went on and completed the motorway? Finally, is there any other country which would leave a 9-mile gap between their capital city and one of their major ports?
LORD SHEPHERD: My Lords, on the last point I do not think that what the noble Lord has said is necessarily the case, although I must say that there are occasions when it would appear that this is so. In regard to the development of this extension, clearly the Government would like it to come about, and as soon as possible, but there are many other conflicting priorities which have to be taken into account. In the meantime, improvements and developments are taking place on that road; in particular, widening to a dual-carriageway standard which is being done on the existing A.33 between Popham and the Winchester by-pass.
LORD NUGENT OF GUILDFORD: My Lords, is the noble Lord aware that while we are glad to hear of progress on this road, a further three years to completion seems a very long time? Is the noble Lord also aware that the general rate of building motorways in this country is pro rata far slower than that in any other Western European country, and would the noble Lord try to do something to encourage his right honourable friend to speed up this very desirable development?
LORD SHEPHERD: My Lords, my right honourable friend does not require my help in this matter. She is very conscious of the need to improve the rate of road building. As the noble Lord will be aware, certain matters have been taken into account with a number of companies which will in future be involved in motorway development, and we believe that this should result in an appreciable gain in this field. But I certainly agree with the noble Lord in his comments on the disparity between our own road building programme and that of overseas countries.
VISCOUNT BRENTFORD: My Lords, will the noble Lord do all he can to press his right honourable friend to avoid creating another missing link in this country like the one between M.1 and M.6, which is most frustrating to all road users? It creates terrible bottlenecks and there is a potential danger to the traffic using the quite inadequate road.
LORD SHEPHERD: My Lords, with his connections with the Automobile Association the noble Viscount well knows the great problems which face us in road building and the great difficulty of deciding between one priority and another. But I certainly take the noble Viscount's point.

SOUTH ARABIA: MUTINY BY THE FEDERAL FORCES
LORD CARRINGTON: My Lords, I beg leave to ask Her Majesty's Government the Question of which I have given them Private Notice: whether they will make a Statement about the mutiny among the South Arabian Federal troops?
LORD SHEPHERD: My Lords, with permission, my noble friend Lord Shackleton will reply to that Private Notice Question by way of a Statement at a convenient moment after 3.30 p.m. That will then be followed by a Statement by my noble friend Lady Phillips in regard to National Insurance benefits.

THE ANGLO-FRENCH VARIABLE GEOMETRY AIRCRAFT
LORD ST. OSWALD: My Lords, I beg leave to ask the Question of Her Majesty's Government of which they have been given Private Notice: To ask Her
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Majesty's Government whether they will make a Statement on the communication which has been received on the cancellation of the Anglo-French variable geometry aircraft?
LORD SHEPHERD: My Lords, we have had no Private Notice of that.
LORD SHACKLETON: My Lords, I must say that I think we have had exactly one minute's notice of it. But we will do our best to provide an answer, under difficulties.

RHODESIA
2.47 p.m.
THE MARQUESS OF SALISBURY THE MARQUESS OF SALISBURY rose to call attention to the situation in Rhodesia; and to move for Papers. The noble Marquess said: My Lords, I beg to move the Motion standing in my name. In doing so, I suppose that I ought to declare an interest—indeed, a double interest. First, as I am sure most of your Lordships already know, I have, like a number of other noble Lords, a share in some farming operations in Rhodesia; but that, I hope, should not debar me from speaking about a country of which I have the good fortune to have some personal experience. The second interest is that I am President of the Anglo-Rhodesian Society. But for this I hope I shall not be criticised, for the Anglo-Rhodesian Society is an organisation which exists to promote good relations between Great Britain and Rhodesia; and that, too, is my own aim which I have steadily pursued, and shall continue to pursue, for I believe it to be in the interests of both countries.
I may be asked why I have kept this Motion on the Order Paper now that it has been announced that the noble Lord, Lord Alport, is going to Rhodesia. I have, indeed, considered very carefully whether I should postpone it, but I have come to the conclusion that, in effect, to suppress free and frank discussion of the realities of the Rhodesian situation at this particular juncture, when no final decisions have yet been made, would be in the interests neither of Parliament, nor the public, nor of Lord Alport himself. Surely we should all better recognise What the true situation is, or we are very unlikely to come to the right decisions.
Indeed, I believe, for reasons which I hope to explain to your Lordships, that this is the worst possible moment for playing Rhodesia down. For what are the hard facts? I am not for a moment going to suggest that sanctions have had no effect at all. Your Lordships will have read in the Press quite recently of the decision of the Rhodesian Government to cut down the acreage to be devoted to the production next season of tobacco and sugar. But the Government in this country would, I believe, make a very great mistake if they drew from this news the conclusion that Rhodesia is on the brink of imminent collapse. I believe, on the contrary, that the very opposite is the truth. It is evidence, if that is needed, that the Rhodesian Government and people are tightening their belts and preparing for a long struggle, just as when we in this country introduced rationing during the last World War it was not a sign of our weakening in our attitude to the war, but of our invincible determination to fight on to the end.
Indeed, it is clear, my Lords, from every report that I get from Rhodesia—and they come from many sources—that Rhodesia is very far from the brink of collapse. In most ways, indeed, it is still entirely normal. The shops are still full of goods—though not, alas!, of British goods—and they are well supplied, too, with people buying them. Petrol may be more expensive, but there is no shortage of it. The Rhodesia travel allowance is, I am told, £150 a year, as compared with our own £50. There is said to be a shortage of whisky, which must be a bore to those who like whisky; but a shortage of whisky will not break a country. Nor, as I understand it, has the security position deteriorated. It was pointed out in an account which I got last week that there is in Rhodesia at the present time only one policeman to 680 inhabitants and 29 square miles, as compared with our own country's one to 568 inhabitants and one square mile.
I repeat, I do not say that sanctions have had no results at all. Of course they have, and the effects may well increase as time goes on. But there is no sign at all that they are going to break the country or bring it to its knees. What to me, at any rate, is alarming (for it is a new development) is the increasing num
1390
ber of foreign businessmen—and this is common to all reports—who are making their appearance in Salisbury. No doubt they are not trading yet on any large scale, but they are preparing the ground, and they are likely to find fertile soil. And, make no mistake, my Lords, much of the trade we are losing to-day we shall not get back again—and with every month that passes without a settlement that will become truer.
Finally, what to me, at any rate, makes the holding of a debate now really essential is one further new development which I have not yet mentioned. It is the setting up by the Rhodesian Government of a Commission to draft a new Constitution. What the character of that Constitution is going to be I do not know. It is a matter for the Rhodesians rather than for me. But that there is to be, probably before the end of the year, the text of a new Constitution seems pretty certain. In due course, presumably, that Constitution will be brought to the attention of the Prime Minister and his colleagues here in London; and presumably, too, as it has been drafted by those whom the present Government of this country regard as rebels, it will be rejected.
What recourse, my Lords, will the Rhodesian Government then have but to declare a Republic and cut their last links with the Commonwealth? That, to my mind, and I am sure to the minds of many others, too, would be a tragedy of the first water. The Rubicon will have been crossed. There will be no going back. We shall have lost for good and all a faithful friend and one of our most valuable customers. It would mean, too, the loss of millions of pounds to us at a time when we could ill afford that.
We have probably about six months, more or less, to avert so lamentable a catastrophe. Is it not worth while for us in these circumstances—and I say this to noble Lords in every part of the House, whatever their views about the present Rhodesian Government—to do all in our power to achieve a settlement while we can and on the best terms we can get? Possibly the Government spokesman will say: "Are we not doing our best? Are we not sending out Lord Alport?" My Lords, I should hardly have thought Lord Alport an ideal envoy, for he has been, as we all know, an outstanding critic of the

1391
present Rhodesian Government. But what is much more important than the choice of Lord Alport is the spirit in which he is being sent. Does it herald any change in the attitude of Her Majesty's Government here?
Up to now, as your Lordships know, the policy of the Prime Minister and the Government has been largely based on two assumptions, neither of which I believe is valid now, or ever has been. The first is that Rhodesia, under her present rulers, threatens the peace of Africa. That was the basis for the application by Her Majesty's Government to the Security Council to impose mandatory sanctions on Rhodesia under Chapter 7 of the Charter. I do not want to say very much about that assumption to-day, for we discussed it at some length in our last debate in this House, when I argued that Chapter 7 of the Charter existed only to restrain aggression, and that in applying it to Rhodesia, which was a small country anxious only to remain within its own borders, the Prime Minister was guilty of just as great an illegality as any which might have been committed by Mr. Smith. For this, I was soundly trounced by the Lord Chancellor. But I am glad to say that since I spoke I have received most valuable support from a quarter which I am sure the noble and learned Lord himself will treat with the respect it deserves. I refer to Mr. Dean Acheson, who is both a most distinguished lawyer and a past Foreign Secretary of his country, and who, within the last few weeks, has written a review of a book on the Rhodesian question by Mr. Charles Burton Marshall.
Mr. Acheson's comments relate to what he calls the
"assault of the United Nations and the United Kingdom against Rhodesia",
and to—and I quote his words:
"its patent illegality despite a layer of bland sanctimony".
My Lords, "sanctimony" is a new word to me, but I know what it means. Mr. Acheson supports Mr. Marshall's view that Rhodesia—and again I quote his words—
"has made no attack or threat of attack against anyone. The British Government has denied any threat to attack Rhodesia, and the suggestion that Rhodesia's neighbours might be driven to attack her for failing to practise universal suffrage seems improbable since, as already pointed out,"—
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he comments drily—
"they do not practise it themselves".
"To this, the reply",
Mr. Acheson says,
"is made that the existence of a threat to the peace may not be questioned once the Security Council has stated its conclusion. In short"—
I still quote him—
"the physical integrity of a small country and the wellbeing and livelihood of its people may be attacked by the United Nations if only the Security Council states the unsupported conclusion that it threatens the peace".
That is, as I understand it, exactly the argument put forward by the noble and learned Lord the Lord Chancellor at our last debate. I may therefore, I hope, be allowed to quote Mr. Acheson's comment:
"One would not be willing to accept so monstrous a doctrine as seriously advanced if Mr. Marshall did not tell us that just this has occurred in the present case."
May I recommend Mr. Acheson's words on this aspect of the Rhodesian problem to the attention of the Government? In the light of what he has said—and, my Lords, he speaks with very great authority—are they still so certain that their own legal position is any stronger than that of Mr. Smith?
Now I should like to turn to the second assumption which has up to now underlain Government policy towards Rhodesia and which is, if I may say so with all deference, equally fallacious and, I believe, even more dangerous than the other. It is that Rhodesia has not yet got her independence and can be prevented by the Government of Great Britain from getting it. That is the basis, as we all know, of the Prime Minister's latest and most far-reaching pledge—"No independence before majority African rule".
I am afraid, my Lords, that that pledge is likely to go down in history as about the most unrealistic pronouncement made by any responsible leader in this country since the days of King Canute. For what is the hard fact?—and it is becoming clearer with every week that passes. Rhodesia, whether legally or illegally, has already got independence. An independent Government, de facto, if not de jure, has been in power in Salisbury for over a year and a half, with the support of the vast majority of the

1393
white population, of the African Chiefs, and (as is becoming more and more evident) a very considerable portion of the African population—and this, in spite of all that Mr. Wilson and his colleagues have been able to do to unseat it. And they have certainly done their best. There is not the faintest likelihood of her surrendering that independence. Indeed, a point, I believe, has now been reached when the only real question before Britain is whether Rhodesia shall have her independence inside or outside the Commonwealth. That is the decision that the United Kingdom Government have to take; and they will have to take it quickly, in view of the setting up of the Commission, to which I have already referred, to consider the drafting of a new Constitution.
The Prime Minister may, of course, decide to dig in his toes and let Rhodesia go her own way, as the American Colonies did 200 years ago. But I do not believe for a moment that that is what the British people want. And, indeed, what should we have achieved by such a policy? We should have lost one of our best customers and most loyal friends and got nothing in return. Already there are those in Rhodesia itself who are pressing their Government to take that course and to declare a Republic. But it is clear that Mr. Smith himself does not want this, if it can possibly be avoided. Are we going to force him into the camp of his own extremists? That, my Lords, would be the final folly, the very bankruptcy of statesmanship.
That being the case, let us face the fact that the real problem now is, I repeat, not whether Rhodesia can be compelled to abandon her independence—which she clearly will not; and I do believe cannot be made to—but what are the terms that will enable Her Majesty's Government here to recognise that independence. That being the problem, surely the time has come when we should turn our backs on the past and face realistically the completely new situation which now confronts us. I hope most sincerely that that is the spirit in which the Government are sending out the noble Lord, Lord Alport.
For why must we always be looking back? Why must we always interlard any proposals that we may grudgingly make with words like "illegal" and "treasonable"? To continue to do that is likely
1394
to make successful negotiations almost impossible. No doubt many of the points that have arisen in the past will crop up again; but let both us and the Rhodesians approach them with an open mind. Do not let negotiations be hamstrung from the start by past declarations which are no longer relevant. The past no longer matters: it is with the future that we should be concerned.
My Lords, there is another point that I would diffidently make. If we are going into new negotiations—and we shall be mad not to—let those new negotiations, after Lord Alport's visit, be carried out, on both sides, until the last stage, by officials. It was, I believe, a very general practice in the diplomatic world in earlier days that the principals in any international negotiations remained in the background until the very last stage when the terms of an agreement were practically settled—when it could almost be said that all that was still needed was the signatures of the countries concerned. I believe that there is still much to be said for that; and especially in a case like the present.
Great men always tend to want to secure a victory—and, if possible, a spectacular victory—for the country they represent; and even, low be it said, for themselves. Yet in the present case the victory of anyone is the very last thing we should want. What we must hope for and work for is a settlement that is no victory for either party: no victory either for Britain or for Rhodesia, but a settlement which is acceptable to all concerned. I believe that that could still be obtained and that it is, to say the least of it, as much in our interest as in that of the Rhodesians that it should be reached. I beg of the Government that that should be the spirit which will govern their policy in the coming crucial months.
My Lords, may I conclude my remarks with two quotations from British poets? The first, which is very famous, even hackneyed, is from Shakespeare. It is this:
"In delay there lies no plenty."
That, my Lords, I submit, is as true of politics as of love. The other, which dates back, I believe, even further, almost into the mists of the Middle Ages, is this:
"The falling out of faithful friends
"Renewing is of love."

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May that, even now, my Lords, be yet the end of this unhappy story! It is at any rate my hope and my prayer that it may. I beg to move for Papers.
3.7 p.m.
LORD HENLEY: My Lords, I rise to say only that we on the Liberal Benches regret that the noble Marquess, Lord Salisbury, has not thought fit to postpone his Motion to call attention to the situation in Rhodesia in spite of the pressure that has been brought upon him to do so. I read the noble Marquess's letter in The Times to-day, and I have heard the reasons that he gave in the earlier part of his speech. I am not convinced. I disagree entirely with the noble Marquess; I do not feel that to have postponed this debate to-day would have been to suppress free and frank discussion on Rhodesia. It seems to me that there is nothing that can profitably be said in a debate at this moment, and that there is nothing new in the situation. In fact, the noble Marquess said that there was something new; but he has not produced anything which sounded new to me. And if there were anything new in the situation, it certainly does not seem to me that this is the right moment to debate it. We ought to debate it after Lord Alport's mission, and not before.
It seems to us on these Benches that any debate in this House which takes place before the conclusion of Lord Alport's mission must make relations between Rhodesia and Her Majesty's Government more difficult and Lord Alport's inquiries less likely to be of use in helping towards what the noble Marquess wants; that is to say, not victory or defeat for either party, but an honourable settlement without loss of principle. For that reason, we did not want to take part in this debate. But as we have in the past said so much about Rhodesia we ought at least to get up and say why we did not wish to do so. I do not think that it is too late even now for the noble Marquess to ask leave to withdraw his Motion before anything else is said which might prejudice Lord Alport's mission. We on the Liberal Benches hope very much that he may do so.
3.10 p.m.
LORD CARRINGTON: My Lords, we have all been greatly occupied during the last few weeks with other troubles round the world. Our thoughts have been almost exclusively directed to the Middle East, to Vietnam, to China, to Hong Kong and to the problems of the Common Market, and I think that we in this House should be grateful to the noble Marquess, Lord Salisbury, for reminding us, if we need to be reminded, that the problem of Rhodesia which, until the announcement of the visit of the noble Lord, Lord Alport, had been rather in the background, is still unsettled and still a potential menace to Africa, to our relations with the people of Rhodesia and the African members of the Commonwealth. I must say that I do not share the views expressed by the noble Lord, Lord Henley. It seems to me that the speech made by the noble Marquess can be considered by everybody in this House as nothing but helpful, and I should have thought, if I may say so, that the only reason we could welcome the content of the speech by the noble Lord, Lord Henley, would be that since there are 29 speakers it means that we can get home a little earlier than we otherwise might have done.
I do not intend to speak for more than a very few minutes, not only since I agree with a great deal of what was said by the noble Marquess, Lord Salisbury, but also because I do not think that at this particular moment, when the prospect of negotiations is not ruled out, it would be wise to take up positions on difficult issues which we know still divide Her Majesty's Government and Mr. Smith. It is really those unsettled issues on which we hope there will be negotiation, and I for one do not in the least want the Government to declare themselves on those issues this afternoon. In fact, I think that I would very much rather they did not. But there are a number of questions which I should like to ask, and one or two points which I should like to make.
There are a number of your Lordships, perhaps, or at any rate a number of people whom one knows, who have recently visited Rhodesia. I have not, and therefore I cannot judge at first hand what effect sanctions are having on the Rhodesian economy or whether there

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has been a marked deterioration since the United Nations mandatory sanctions were imposed. The latest report which I have seen (though it may well be that the noble and learned Lord the Lord Chancellor can tell us something further) is that of the 131 members of the United Nations or related agencies, 92 have replied to the request of the Secretary-General for a report on the implementation of mandatory sanctions. This leaves a total of 39 who have not replied. Can the noble and learned Lord the Lord Chancellor tell the House whether among the 39 there are any countries which do a significant trade with Rhodesia, or are they all of economic insignificance?
Incidentally, it seems rather strange that almost one-quarter of those countries asked the question by the Secretary-General on March 9 have not by June 21 bothered to answer it at all. If, as we are so often told, this is a matter of global importance, and with the gravest implications, it seems to me a little odd that 25 per cent. of the members of the United Nations do not seem to care about it at all. Of those who have answered, it seems that there are a number who cannot, or who are not prepared to, implement sanctions. Malawi, Switzerland, Portugal, South Africa, West Germany, Zambia and Botswana have all answered either with a refusal or with reservations. Can the noble and learned Lord tell us whether, in the view of the Government, these refusals and reservations have not largely neutralised the measures taken by other countries which implemented the United Nations resolution? I am told on good authority (and the noble Marquess bore this out in what he said this afternoon) that one will find the shops in Salisbury well stocked with goods, not from Britain, but from any other parts of the world: France, Japan and so on, and no doubt Switzerland; that there is no critical shortage of consumer goods; that petrol, though expensive, can be easily acquired, and that, generally speaking, it does not seem that sanctions have been very effective.
My Lords, it is of course true that the Rhodesian Government has just made public the difficulties it has had with the sale of tobacco and sugar, and has announced quite a considerable curtailment on the acreage to be planted next year. But if sanctions were working, as the
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Government seemed to expect at the time of our debates six months or so ago, how can the Rhodesian Government have disposed of as much of their tobacco crop as they have done? Where has it gone, and how has it got there? Here again, perhaps the noble and learned Lord the Lord Chancellor can give us the Government's assessment of the latest announcement from Rhodesia about these commodities, and their assessment of the effect on the Rhodesian economy in the next few months. Can any other crops be substituted for tobacco and sugar, and, if so, can they be sold in the world? Speaking, as I say, without first-hand knowledge, it seems to me that although sanctions may very well lower the standard of life in Rhodesia and damage their economy, in the long run they will by themselves not be of such effect as to force Rhodesia to alter the policies which she is now pursuing; and this surely is a factor which the Government must take into account.
The Government may have later figures, but the latest figures I have seen show that in 1966 Rhodesia had a favourable trade balance of £20·5 million as compared with £44·9 million in the previous year. But the figure in the index of industrial production, though down by 6·8 per cent., was still above that of 1964. I read, too, that since U.D.I. the price index has risen by 3·4 per cent, to Europeans and 3·7 per cent. to Africans; while in this country in the same period there has been a rise of 4·7 per cent. To have contained the cost of living in that way more successfully than the Labour Government here have done, with the wage freeze and income standstill, does not lead me to suppose that there is any evidence to show that economic pressure is likely to be decisive in leading to any political reappraisal; and I think perhaps it is possible to argue (though I do not altogether share the view) that it might have the reverse effect.
Your Lordships have heard from the noble Marquess, Lord Salisbury, of his belief that a settlement must be reached between Her Majesty's Government and Mr. Smith on the basis of a compromise for both sides and a victory for neither. I doubt whether there are many people, in this House or outside it, who would disagree with that—at any rate, I very much hope not. It is therefore all the

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more welcome that, presumably as the result of information coming from Rhodesia, from the Governor and others, the Prime Minister has thought it timely to send the noble Lord, Lord Alport, to see whether or not negotiations are possible. Everyone will wish my noble friend success on his mission and hope that he may be able to come back with the news that he believes there is some prospect of a successful outcome to this tragic story. As I understand it, and I think that I am right, the noble Lord, Lord Alport, is not going to Rhodesia in any sense to negotiate, and what his personal views may be is therefore irrelevant. In any event, I know that the last thing my noble friend would do would be to allow any views of his own to stand in the way of any possible compromise, if indeed they would be likely to do so. He, I know, is as anxious as all of us to see an end of this trouble.
I agree with the noble Marquess, Lord Salisbury, that some compromise has to be found; but it must be said, and I think it must be said plainly, that no compromise is possible if the Government maintain their attitude of "No independence before African majority rule". We recollect that no such stipulation was made at the time of the "Tiger" talks. The Constitution which was worked out on board the "Tiger" contained no such provision—indeed, quite the reverse. There would have been a quite considerable period of time which would have elapsed before African majority rule and this, at that time, was acceptable to Her Majesty's Government. It is no good hiding our heads in the sand and pretending and hoping that any agreement is possible on the basis of "No independence before African majority rule".
I do not know whether I should be encouraged or not by the statement of the Prime Minister in another place on June 13, when he said that if there was a substantial change in the circumstances he would be prepared to discuss the situation with the rest of the Commonwealth, but there would have to be a substantial and guaranteed change in the circumstances. On the face of it, that does not look a particularly encouraging observation, but I think that it does mean that the Prime Minister is leaving himself some room for manœuvre. But as a result of even that rather modest remark
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a large number of Labour Back-Benchers made it clear that in no circumstances would they agree to the abandonment of the "No independence before African majority rule" provision.
I think that the Government have to be bold and brave, if they are to break the deadlock. They have to override those of their supporters whose insistence upon this provision would make any agreement wholly impossible. What I should like to see, and I have no doubt that this goes for probably most of your Lordships, is for negotiations to start with the "Tiger" proposals as a basis. Of course, they are not the final word—by no means. But agreement was so close on the "Tiger" that it would seem right to start from that point. There are, of course, many explanations given as to why those talks broke down, ranging from the personal position of Mr. Smith vis-à-vis his more extreme colleagues to the suggestion that some of the proposals were not fully understood, or the implications of them were not understood, until Mr. Smith arrived home. I do not know; but one thing seems to me clear—that is, that there was a genuine misunderstanding about the question of direct rule during the interim period. Mr. Wilson said in another place that he had given assurances about this to Mr. Smith, and I am sure he did; but it was the working document which would have been discussed in the Rhodesian Cabinet, and I think there was a fear that submitting to the authority of the Governor would have been a form of submission to Her Majesty's Government in this country, and that Mr. Smith and his Cabinet might have been throwing away the substance for the shadow—a substance which might not have been returned to him at the end of the four-month period.
Regretfully—and I have said this before—we have to admit that neither side much trusts the other. It well may be that in order to get a settlement sanctions must go on until Rhodesian opinion is consulted, and Mr. Smith's independence, in exactly the same way, must be left as it is until the final settlement is reached. Surely that would not be too high a price to pay for a settlement. It does not seem to me an occasion on which we should rely or insist upon legal niceties.
I believe that there is a great deal of urgency. In January, Mr. Smith

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announced that the Rhodesian Government were setting up an independent and impartial Commission to devise a new Constitution. As I understand it, this Commission will probably report sometime in late August or September. It will probably recommend a Republic—at least, I imagine so. It seems—and if it is true, I greatly deplore it—that there may be at this moment a tendency in Rhodesia to racial segregation. Mr. Smith said in Parliament in Salisbury the other day:
"I believe the ideal after which we are striving is a system which acknowledges our different communities and provides safeguards which will enable the different communities to live according to their own wishes,"
That seems to me—I may be wrong and I hope I am—a bit like the beginnings of apartheid. And there have been other indications. I find this very disturbing. The indications are that the decisions which would be taken as a result of this Commission will be very far-reaching indeed. Certainly they would make settlement of the problem very much more difficult. And I do not believe that we have much time.
It should not be taken as, and it is not, a sign of British weakness that we are prepared to negotiate. Far from it. It is a sign of political maturity and acceptance of the facts. Great damage is being done in the long run to Rhodesia and her economy. We, on our part, are suffering a considerable loss of trade. Our relations with the African Commonwealth are, to say the least, uneasy. No good is coming to either side from this dispute. Let us hope not only that the Prime Minister and Her Majesty's Government realise this, but, just as important, that Mr. Smith realises it. If we and he leave it too long, it will be too late.
3.26 p.m.
THE LORD CHANCELLOR: My Lords, we have listened with close attention, as we always do, to the observations made by the noble Marquess, Lord Salisbury. We know the degree of sincerity with which he holds the views which he does hold on this subject. But, for my part, I am inclined to agree with the noble Lord, Lord Henley, that a debate on this subject to-day is not taking place at a helpful moment. The difficulty is that when widely differing views are expressed on occasions of this kind, it tends to make these views harden. As the noble Lord, Lord Carrington said,
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at this particular moment it would not be wise to take up positions. But I am afraid that is just the sort of result which a debate like this almost inevitably has.
There is another possible disadvantage. It is the habit of political Parties to maximise the differences between them. Here there is not really all that difference about Rhodesia between the views of the Conservative Party, of the Government and of the Liberal Party. But there is a pretty wide difference between their views and those of a small number of Right-wing members of the Conservative Party, personally sincere, holding views they are quite entitled to hold, and of whom a high proportion are in this House. We have to remember that Rhodesia is a country where newspapers are censored and blanks appear in them every day. Naturally enough, the views from England which get the major reporting are the views of this small group, and this may very well lead the mass of small businessmen and small farmers who form the bulk of white settler population in Rhodesia to think that these are the men who speak for England.
I hope not to say a great deal, because everybody's views are well known. The noble Marquess has said to-day what he has said before. He repeated his views about the decision of the Security Council. He does not agree that the Security Council are right in saying that the situation in Rhodesia was a threat to peace. Apart from Dean Acheson's views, I do not think he said anything more than he said when we discussed this last February. There is nothing I can say which I did not say then. When one joins an organisation, one accepts the rules. It is clear from the Charter of the United Nations that the only body which can decide whether a given situation creates a threat to peace is the Security Council, and the Security Council decided that in this case it did.
As I said last time, there are only three alternatives in regard to Rhodesia. First, we may say that we have done our best. As the noble Marquess put it, we must take what terms we can get; we must give in; sanctions have not succeeded and we must just recognise the Government as the legal Government of Rhodesia. But I think that all three political Parties believe that this would not be right, and not right because there is here a moral

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issue, so clearly expressed the last time that we discussed it by the most reverend Primate. It has ever since the war, if not before, been the policy of successive Governments in this country, of whatever political complexion, that we now hold our Colonies in trust for the inhabitants of those Colonies; that we bring them to self-government in due time when they are ready for it, and it would be a gross breach of that trust to hand over 4¼ million Africans to about 65,000 male adult white settlers. It would be a betrayal of the trust which for the last quarter of a century at least we have said is upon us in relation to that Colony.
THE MARQUESS OF SALISBURY: My Lords, I hesitate to interrupt the noble and learned Lord, but his figures for Africans include women and children, and his figures for the white population are quite different.
THE LORD CHANCELLOR: That is quite right, and for a very good reason: that the people who will decide will not be the white women and children, but the white male adults, and what they do will affect men, women and children who are Africans. The second alternative is to use force to remove the illegal régime. I know that it is the view of the Liberal Party that the Government ought to have used force at the outset. On the last occasion I remember the noble Lord, Lord Reay, saying that he still thought that less harm in the end would be caused if we used force now than if we went on with sanctions. But neither the Government nor the Opposition agreed with this.
The third alternative is to use sanctions. Nobody has suggested any fourth course. Nobody likes sanctions; but they are better than physical force. The object of sanctions is to make those in control in the illegal régime realise that this is not, as they once thought, going to be a nine days' wonder; that it is going on; that there is no future in the position as it is; that things, from their point of view, can only get worse, they cannot get better, and that the only sensible thing for them to do in their own interests is, on their being asked to do it, to return to legality.
I do not want to miss an opportunity—because since before the Declaration of Independence I never have missed an opportunity, whether in this country or
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in Rhodesia—to emphasise that the Government have never looked for immediate majority rule. Of course, it is a matter of opinion in every Colony as to when they are ready for self-government; and if anything we have been inclined by pressures of events to grant self-government too soon. Most of these new independent countries wuld be better off today if they had delayed their independence. The Government have always said that the Africans in Rhodesia are not ready for self-government, and that before that time arrives they must show by their actions that they are ready. I believe that many white settlers in Rhodesia quite honestly feel that if a settlement is made with Britain there may be a black man in the bed tomorrow, or majority rule tomorrow. That has certainly never been the position. We want to see an honourable settlement. But there are no negotiations going on; and it would be wrong, I think, to be too optimistic about the result of the visit of the noble Lord, Lord Alport.
Your Lordships will have noticed various disquieting developments in Rhodesia in the past few months. It is true, as the noble Marquess, Lord Salisbury, said, that there is this constitutional Commission and some move towards republicanism. I must make it plain that the mere fact that the illegal régime passes some invalid Act of Parliament has no validity at all. Nevertheless, a move of this kind would have far-reaching political effects within Rhodesia. It is, of course, impossible to say what decision will finally be taken, but the setting up of a so-called constitutional Commission, and the remarks of members of the régime, lead one to believe that there are some people, at least, in Rhodesia who would wish to see that country a Republic, whatever may be the wishes of the people of Rhodesia as a whole.
I think that nothing has really changed, and that all that has happened is that as the Rhodesian Association in London, and those Members of both Houses who may belong to it, appear to be of the opinion that Mr. Smith wants to talk, or has some proposals to make, Lord Alport has kindly gone out there (he knowing everybody in Rhodesia, having been High Commissioner) to see whether or not anybody wants to talk, or to receive any proposals which anybody

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may have to make. We shall not know until he comes back whether or not negotiations are possible.
So all I need do now, I think, is merely to mention the very few changes in the situation which have taken place since February. There have been some developments in Rhodesia. There is the move towards residential apartheid, and Mr. Smith's observations, as the noble Lord, Lord Carrington, has said, pointed in that direction. There is the proposal to make the temporary emergency legislation a permanent feature of Rhodesian law. This is because, as the noble Lord, Lord Carrington, said, there is no natural disorder, and the pretence every three months that there is an emergency situation is wearing extremely thin. That is why they propose to make a permanent part of their law the right to restrict and detain people in prison without trial.
Then they are seeking to discourage a few European schools who admit some Africans from allowing inter-racial sport. Then we have the Property Owners' Residential Protection Bill. That, I think, has perhaps been a little misunderstood in this country, because I have seen observations which say that people think this is a move against the Africans. Of course it is nothing of the sort, because under the Land Apportionment Act the Africans are already discriminated against racially, so far as housing is concerned. But this is a movement to apply the principle of apartheid to Asians and coloured people—the coloured people for whose existence the male white settlers are responsible.
It would not be right for me to comment further on the Madhzimbamuto case. Noble Lords will have heard the answers that I made to the noble Lord, Lord Brockway, on that subject. It is of course a matter of some importance to anyone who cares about the liberty of the subject. According to figures given in January by Mr. Lardner Burke, the so-called Minister of Law and Order—I do not accept them—there are now 170 who are detained in prison without trial, and 450 who are in restriction without trial. The Constitutional Council which still exists, according to the Rhodesian Herald of April 26, has said:
"The Council have become increasingly concerned, as the public should be, over powers taken under emergency regulations to prohibit a detained or restricted person over prolonged
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or indefinite periods from communicating in any way with, or receiving any visits from, persons outside the place of detention or restriction, whether such persons be his legal adviser, wife, children, parents or anyone else."
Nine and a quarter years is, I suppose, something like an eighth of an African's life. In the last nine and a quarter years Mr. Madhzimbamuto has been either in prison or in resriction for seven years. These are the unhappy features of the revolution which has taken place in Rhodesia. The noble Marquess said that it was tactless, or something, to call it a rebellion or revolution. But we must recognise what has taken place, and what has taken place is a revolution.
If I may quote two sentences from a judgment of Mr. Justice Lewis, delivering the leading judgment in a case which is not altogether irrelevant, because this is the Madhzimbamuto case, which is the only case in which the Rhodesian Courts have yet expressed an opinion, he said:
"For the above reasons, I feel constrained to hold that the 1965 Constitution"—
your Lordships will remember that the only lawful Constitution is the 1961 one, with such amendments as this Parliament has made to it, and that the so-called 1965 Constitution is one with no legal validity—
"is not at the present time the lawful Constitution of this country, and that the Government set up thereunder is not the lawful Government."
We must all, I am sure, have great sympathy with Her Majesty's Judges and their difficult position when a revolution takes place. The second sentence from the judgment which I wanted to read is this:
"Those who embarked on the present revolution were not deterred by the illegality of their actions at the time, and it would be naïve to suppose that if faced now with a decision of the court that nothing whatsoever done by the present Government could be recognised the Government would tamely capitulate. The only course open would then be the drastic one of filling the vacuum by replacing all nine of the existing judges with revolutionary judges who regardless of judicial conscience, would be prepared to accept without question the 1965 Constitution as the de jure Constitution of this country despite the ties of sovereignty and despite the anomalies in the Constitution itself to which I have already referred."
The situation from that point of view would, I suppose, have again to be considered if the white settlers were so foolish as to pass some invalid Act declaring themselves a Republic.

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My Lords, the noble Lord, Lord Carrington, has asked what has been happening and what changes have been made in regard to sanctions; and it has, of course, been said by those who share the views of the noble Marquess, Lord Salisbury, that sanctions are not really having any effect at all—
THE MARQUESS OF SALISBURY: My Lords, I never said that.
THE LORD CHANCELLOR:—that nothing was having any effect. The noble Lord, Lord Carrington, asked about replies to the United Nations and whether any of those who had not replied had significant trade with Rhodesia. I am told that the only ones who had any significant trade with Rhodesia and who have not replied at all are South Africa, Iran and the Congo Republic. Portugal replied but is not going to comply. But, so far from saying that they are making money out of trade with Rhodesia, they have put in a claim to the United Nations, saying they have lost £1 million by it. So far as Spain is concerned, which I think the noble Lord specifically mentioned, Spain has informed the Council that trade with Rhodesia, which has always been very limited, has now been suspended. I think that the noble Lord's figures about the cost of living were quite right. He asked about the trade balance. To the best of our knowledge, exports in 1965 were £143 million, and in 1966 £80 million. Imports in 1965 were £119·8 million and in 1966 were £84·2 million. So imports have been cut by about one-third compared with 1965. Those figures are, I think, taken from the publications of the Rhodesian régime.
There is another, perhaps more compelling, reason for the régime's frankness—because this is the first time they have published figures at all—and that is that I think it is no longer possible to maintain the pretence that sanctions are only a short-term problem, or to hide from the various sectors of the economy that Rhodesia faces a prolonged and grave economic struggle. Mandatory sanctions, we calculate, should reduce Rhodesia's exports by up to a further £30 million. The prospect of such a substantial further reduction has undoubtedly given Mr. Smith and his colleagues in the régime
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serious cause for reflection, to put it no higher. The reaction, particularly since April, has been the issue of numerous warnings about the new situation which has to be faced. These have chiefly stressed the need for greater efforts to overcome the effects of sanctions and for greater resolve in coping with economic stringency. A further prominent feature has been the institution by the régime of a campaign to guard against gossip—the "GAG" campaign—the chief object of which is to deny us information which would be of value in defeating attempts at evading the sanctions.
But in parallel to these exhortations from the régime has been a succession of warnings to the régime from organisations such as the Association of Rhodesian Industries and Chambers of Commerce. A number of such bodies have made clear in recent weeks the considerable anxiety felt in their respective sectors of the economy about the present situation and the likely prospects under mandatory sanctions. One pointed out that it was not sufficient to withstand a blockade over a period. They said, "A lasting solution has to be found". Other organisations have been expressing forcibly considerable disquiet over the ways in which the régime have, or, rather, have not, been coping with the problems which sanctions are posing for Rhodesia. One example is a call by the Association of Rhodesian Industries to the régime to take measures to ensure full employment. The Rhodesian railways are, as at present constituted, expected to be faced at the end of this year with a loss for the current year of about £8 million, as compared with a profit last year of £2 million, and the whole of this loss, of course, is being borne by Rhodesia.
As to the previous uncertainty about the future of the motor assembly plants—Rootes, B.M.C. and Ford's—it always seemed to us that sooner or later, if sanctions were being properly applied, they would run out of assembly kits and have nothing to assemble. This has now happened at all three plants: there is nothing left to assemble, and they are on a purely maintenance basis. New cars arrive spasmodically in small numbers, but they are in such demand that they are sold before they can be displayed, and prices are very high.

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In order to conserve foreign currency reserves, import quotas have had to be considerably pruned for the four-month period April to July. This drastic pruning has been aggravated by the rundown of the very healthy stock levels of November, 1965, which appears to be almost complete. The resulting situation is naturally creating difficulties in every field of domestic consumption. The noble Marquess mentioned wines and spirits. Well, that is true. They are now down to a very small proportion, and this has naturally given hotel proprietors and others concerned with tourism, to say nothing of their clientele, much concern.
As to prices, the régime are finding it necessary to appoint officials in each of the main centres of population to deal with the numerous complaints which are being made about profiteering and overcharging. The noble Lord, Lord Carrington, asked me particularly about tobacco and sugar. In one of the recent warnings to the régime to which I have referred, and which, incidentally, the régime found it necessary to try to censor, the President of the Rhodesia Tobacco Association warned Mr. Smith and his colleagues of the consequences of cutting the 1967–68 tobacco crop to less than 200 million pounds weight. Such a reduction, he said, would bring financial ruin to hundreds of growers, bring wholesale unemployment to rural areas, impair the livelihood of many people in commerce and rock the foundations of the entire agricultural industry in Rhodesia. That would be if it were cut to less than 200 million pounds. An announcement broadcast by Mr. Rudland, the so-called Minister of Agriculture, a week ago decreed that the crop for 1967–68 is to be 132 million pounds. Even on the basis of the régime's own figures, this is a swingeing reduction of 68 million pounds on the current crop target of 200 million pounds and of no less than 118 million pounds on the 1965–66 crop of 250 million pounds.
This statement has been commented upon as being notable for its frankness. It recognises, for example, that some 500 or 600 growers may not find it economic to continue production. It admits that a great proportion, namely, 130 million pounds, of last year's crop—that is, the crop for 1965–66—has remained unsold in Rhodesia. My Lords, this admission
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came as no surprise to us, since it bears out our own estimate. The statement goes on to say that the régime expect to sell some 120 million pounds of the current crop by the end of this selling season, leaving unsold some 80 million pounds plus the 130 million pounds carried over from last year. This, Mr. Rudland notes, is equivalent to a whole year's production in current circumstances.
This calculation implies, of course, that, despite mandatory sanctions, Rhodesia expects to succeed in selling the same amount, but a greater proportion of the current crop than she was able to do under voluntary sanctions last year. This may strike your Lordships as being somewhat unrealistic. We, for our part, expect to see much more than 210 million pounds of unsold tobacco on the régime's hands at the end of the current season. This latest shock compounds the difficulties of the Rhodesian tobacco growers who, over the past three seasons, have suffered, first, a voluntary cutback, next, a voluntary reduction in the number of acres and, last year, the system of control imposed by the régime.
Moreover, they must find it extremely galling to read that as against the meagre return of 28d. per pound which their own high-quality leaf is now fetching on average in Salisbury, prices of anything between 40d. and 90d. per pound are being realised at the Zambia and Malawi markets for tobacco which is of lower quality. In 1965 two-thirds of the farmers' output consisted of tobacco and sugar. The amount of both crops has declined by a third or more; income from tobacco alone has dropped from the £34 million sterling received by farmers in 1965 by about 30 per cent. It will be less than £16 million, on the régime's own figures, next year. That is less than half.
Then the noble Lord asked about sugar. The position about sugar is that, there again, most of the crop they simply cannot sell, owing to sanctions. They were becoming very great exporters of sugar. The Chirundi sugar estate has simply had to close down, and at the large Hippo Valley Estate, which I saw myself last year, they have had to leave a great deal of the crop in the ground, and last year they lost £921,000. The noble Lord asked about other crops. Of course, maize can be grown, but it depends very much on what the season is like. If it is a

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very bad season in South Africa the régime may be able to sell maize to South Africa. The Chirundi Estate has now been up for sale for some time, but nobody has made any offer to buy it.
May I turn to industry? Much of the propaganda which has been broadcast about diversification is, in the view of the Government, very much exaggerated. For example, many of the new developments are of derisory value. As one critic in the Rhodesian Legislative Assembly put it (and I quote):
"Some of the so-called factories are making babies' napkin pins and toothpicks. Is this a major diversification?"
So far, it is true, the reduction in economic activity has not been matched by a proportionate fall in the employment levels. There are several reasons for this. Firms have been forced by direction orders to keep on redundant staff, and many jobs have been created, both in administration and in the armed forces, and particularly in the police. There has also been a substantial increase in emigration. Afrikaners are going back to South Africa, where they came from. However, the régime have now ended the farce of keeping staffs idle at, for example, the Umtali oil refinery which has now been closed since January, 1966, and in the various motor vehicle assembly plants. The régime have now allowed them to leave. This may well be a further, if belated, recognition of the realities of the situation.
Very shortly the régime will have to introduce the budget. It may be that, despite some admitted leakages, its terms will provide further convincing proof that sanctions are indeed having their effect. What is certain is that a great many Rhodesians are apprehensive about the prospect of increased taxation. We, for our part, shall await with interest the régime's budget proposals.
My Lords, of course nobody likes any of this at all. We are losing trade: they are losing trade. Sanctions, in the end, will hit the Africans nearly as much as they hit the white settlers. All the régime is being asked to do is to return to legality. That is all. There is nothing really difficult about that, and the sole
1412
object of sanctions, as I have said, is simply to make the régime realise how wrong Mr. Smith was when he told me that he thought the whole thing would be a nine days' wonder and that neither we nor the United Nations would ever do anything when it came to the point; that within a few weeks something else would have turned up in the world and the world's attention would be directed to that, and then Rhodesia would be able to do what she liked. This at least is clear: that he was wrong and this is going on. We have already had the 5,000 signatures from Lord Malvern's group, and I think it is clear that the businessmen in Rhodesia now realise that what is going on is just no good: that it is not going to stop that things are not going to get better, they can only get worse, and that there is no future for Rhodesia in continuing in illegality, particularly when all they have to do is simply to return to legality.
I am not at all optimistic about the visit of the noble Lord, Lord Alport. I am sure we are all very grateful to him for going. If anybody even suggests that Mr. Smith has some proposals to make, then that is not a thing which we ought to ignore, because of course it is to everybody's interest to settle this matter promptly. The reason I am not optimistic is because I believe it is too soon. I think—but I express this only as a personal opinion—that by November things will have changed. The difficulty is that the ordinary members of the Rhodesian Front are small farmers, small artisans and shopkeepers, and a situation which may be known and appreciated both by Mr. Smith and by an intelligent businessman takes much longer to get through to them. But I hope, as we all hope, that this may be capable of a sensible settlement. It is no longer any good saying, as many people in this country have said, that sanctions have had no effect at all and that they are just an appalling waste of time. The business interests now realise what the position there is, and I am not unhopeful that before long the white settlers of Rhodesia as a whole will realise that there is no future for them in continuing as they are, and that in their own interests the only sensible thing to do is to return to legality.

SOUTH ARABIA: MUTINY BY FEDERAL FORCES
4.0 p.m.
LORD SHACKLETON: My Lords, perhaps at this point I may intervene to make a not very short reply to the noble Lord, Lord Carrington on the South Arabian Federal Army and events in Aden, and subsequently reply to the noble Lord, Lord St. Oswald; and that reply will be very short. I will first repeat a Statement made in another place by my right honourable friend Mr. George Thomson:
"I need hardly tell the House that yesterday was a day of black tragedy in South Arabia, with a waste of British and Arab lives. The train of events so far established is this. As the House knows, the Federal forces have had to be reorganised and expanded for their wider duties under Independence by 1968. This involves the amalgamation of the Federal Regular Army and most of the Federal Guard into the South Arabian Army; and the formation of the South Arabian Police from remaining Federal Guard elements and existing police forces. The South Arabian Army and South Arabian Police, as it is to be called, were formally established early this month. The pace, for reasons of which my right honourable friend reminded the House on June 19, has had to be rapid, but the programme has hitherto gone to schedule.
"Some ten days ago a group of officers of the former Federal Guard improperly petitioned the Federal Minister of Defence about alleged grievances they felt, basically for reasons of personal and tribal jealousy. This led to the suspension of the four officers primarily concerned from duty on June 17. The disturbances on June 20 arose directly from this dispute.
"Disturbances started with a mob of South Arabian Army apprentices and soldiers demonstrating at two Army camps apparently against tribal rivals. A good deal of damage was done after they had rushed the guard room and the officers' mess. Order was restored after about two hours. There was apparently no shooting and no British troops were involved.
1414
"Later, at about 10 o'clock members of the South Arabian Police at Champion Lines attacked the armoury there. Shooting broke out in the camp and was also directed at random outside the camp and at Royal Air Force installations on the adjoining airfield. As a result of this firing seven British soldiers were killed and seven wounded when their vehicle was machine-gunned by a mutineer as it passed outside Champion Lines, and two Aden police and one British civilian were killed and one British civilian wounded when driving by also.
"As British lives, including those of women, were in danger, both within and outside Champion Lines, the British Commander of the South Arabian Field Force, a section of the South Arabian Police, asked for British military intervention. This request was endorsed by the Federal Supreme Council and was acceded to. Champion Lines is within Aden State where the British authorities are responsible for internal security. A company of British infantry thereafter entered Champion Lines. They came under fire and suffered one killed and five wounded, but the situation was brought under control just after noon. In total I regret to have to inform the House that in the shooting outside Crater ten British Servicemen were killed and 29 wounded, while one British civilian was killed and another wounded."
My Lords, may I interrupt the Statement here to say that the figures of casualties are rather uncertain, and I am not quite happy about the figure for the number of wounded. This Statement has been prepared, as noble Lords will appreciate, in a great hurry. The Statement goes on:
"At about 10.30 in the morning, some half an hour after the trouble at Champion Lines began, South Arabian Police at the Federal capital of Al Ittihad seized Government buildings there, did some damage and took up positions to resist any attempt to bring in British troops. There was no firing and the reports I have suggest that no expatriates were molested in the course of this. The situation came under control shortly afterwards.
"I would like to emphasise at this stage that British troops only had to

1415
be employed to deal with a mutiny among the new South Arabian Police Force where British lives were threatened. At no time were they employed against the South Arabian Army. The troubles there were dealt with effectively by that Army without our involvement. In Crater, however, where a general strike had been called the previous day, a false rumour was spread that British troops had fired on the South Arabian Army. The Aden State Armed Police reacted to this firing indiscriminately. Terrorists took advantage of the confusion and of the difficult geography and congestion of Crater, and widespread trouble ensued. Armed men secured the release of some 170 ordinary convicts from Crater gaol. Some of the gaolbreakers are reported to have climbed the minaret of a mosque and claimed over the mosque's loudspeakers that they were released detainees.
"When darkness fell the British forces were withdrawn to positions surrounding Crater rather than in it. The situation there remains serious and has also been complicated by a water shortage caused by a fractured main. Shooting is still taking place. Public buildings and commercial premises have been damaged. The High Commissioner reported last evening that it would"—
My Lords, I am sorry: I seem to have lost the last page. This is the difficulty in these circumstances; this Statement has been prepared in a hurry. Perhaps I can summarise the remainder. The High Commissioner thought it would be a matter of 24 hours or more before order was introduced into Crater.
The High Commissioner has paid very great tribute to the great restraint with which British troops have behaved in an extraordinarily difficult situation. I have myself seen these signals, and there is no doubt that our troops have shown the greatest moderation in dealing with a very difficult situation. I fear that I have not precise figures with regard to the casualties in Crater. They are of the same sort of order as those that occurred in the troubles around Champion Lines and in the Federal Police camp. I am afraid the precise figures were not available
1416
to me at the moment I came into the Chamber.
The only possible redeeming features, if I may add this comment, are that it appears that this mutiny was in no way directed at the Federal Government or Federal Ministers and that the Federal Army was itself able to cope with its own difficulty. Nevertheless, this is a matter for grave continuing anxiety, and I shall hope to keep the House informed.
LORD CARRINGTON: My Lords, your Lordships will be very grateful to the noble Lord, Lord Shackleton, for the Statement he has read to the House and the comments he has made on it. I agree with him. I think the only redeeming feature in this very sad case is that it is not a revolt against the South Arabian Federation and the Government. Indeed, I think it is important that it should be known this was not a reaction against the Government proposals announced by the noble Lord, Lord Shackleton, two days ago. What has happened, I think, bears out the uncertainty of the situation in South Arabia, and, if anything, it makes stronger the case that the noble Lord put for the Government's proposals two days ago.
I should like to associate those who sit on this side of the House with the tributes he and the High Commissioner paid to the British troops.
LORD OGMORE: My Lords, we on these Benches are most grateful to the noble Lord for this Statement on the sad events that have taken place in the last day or two. I, too, should like to be associated with the tribute which the noble Lord, Lord Carrington, has paid to the restraint shown by the British forces. We wish them every success in the duties that they will undoubtedly be called upon to perform in the next week or two.
I should like to ask the noble Lord one or two questions. First of all, would the Government now contemplate hastening the withdrawal of the families of British Servicemen and civilians employed in Aden? It does not seem to noble Lords on these Benches that there can be any point in keeping them there any longer. Secondly, is there any truth in the statement which was made over the wireless last night that from the mosques in Aden there was exhortation to the faithful to go out and kill British troops?
LORD SHACKLETON: My Lords, I am grateful to both noble Lords. I entirely agree with the noble Lord, Lord Carrington, that what has happened points to the dangers of the situation, and of course the danger, which we have all had so much in mind, of a deterioration into a Congo situation. There is absolutely no indication that the disturbances had anything to do with our Statement on policy. All the evidence we have—and I am quite satisfied on this—points to the internal situation, which I have described, and then the coincidence of the general strike (of which they have rather too many in Aden) which had begun 24 hours earlier. I am sure that the High Commissioner and the Commander-in-Chief, and our British forces, will make every effort to bring the situation under control, difficult though that may be.
The noble Lord, Lord Ogmore, referred to the possible withdrawal of families. This is always a difficult matter for judgment. I am sure your Lordships would wish to express our concern for the British civil community, and particularly those members of bank staffs and others who work in Crater and who have had to go through the experience of the disturbances there. At least the noble Lord, Lord Aldington, is familiar with what has been happening to his bank. I think that this question of the withdrawal of families must be left to the authorities on the spot. So far as I know, certainly most military families are well away from the Crater district, and so far the major civil disturbances have taken place in Crater only. I should not like to say that they will not take place anywhere else; but from my own observation when I was there earlier, I think the decision, for instance, earlier this year not to withdraw the families was entirely right. I am sure the military authorities will consider it. Meanwhile, the withdrawal of Service families is going on fast at the moment.
LORD ROWLEY: My Lords, in his Statement two days ago my noble friend announced that it was to be the policy of the Government to equip the South Arabian Army with automatic weapons, in place of the Lee-Enfield. May we take it that so long as British troops are stationed in South Arabia, and in the Aden State, the Government will satisfy
1418
themselves as to the loyalty and reliability of the South Arabian ground forces before they carry out that policy?
LORD SHACKLETON: My Lords, the South Arabian ground forces are of course, already heavily equipped, and I must say that at the moment I should certainly not wish to express serious doubts about their loyalty. It may sound quite strange to us that officers should circulate a petition, but other Armies are different. I know something of the circumstances and of the particular jealousies that arose out of the merging of Federal Guard and Federal Army. I may say that the particular officers concerned were ex-Federal Guard. So much depends on the Federal Regular Army that I should not at this stage wish to express a loss of confidence, though clearly we must bear this point in mind.

THE ANGLO-FRENCH VARIABLE GEOMETRY AIRCRAFT
4.15 p.m.
LORD SHACKLETON: My Lords, perhaps I may now answer the Private Notice Question put by the noble Lord, Lord St. Oswald, on what communication the Secretary of State for Defence has received from the French Government on the cancellation of the Anglo-French variable geometry aircraft. To this, my right honourable friend replied: "I have received no communication whatever from the French Government to this effect".
LORD ST. OSWALD: My Lords, I thank the noble Lord most heartily for that reply. It must give him considerable relief. He will know that we on this side of the House share with him that relief, and we hope that it will not be in any way clouded in the course of the next week or so.
LORD CARRINGTON: My Lords, would the noble Lord then confirm that the newspaper reports are wrong?
LORD SHACKLETON: My Lords, the noble Lord, Lord St. Oswald, has "pulled such a fast one" on me already by asking this Question at such short notice that I really think I should not speculate in regard to matters on which clearly my right honourable friend was in no position to be informative.
LORD ST. OSWALD: My Lords, would not the noble Lord be informative on one thing arising out of this; namely, that on June 7 the Secretary of State did make a statement to the effect that he anticipated that the agreement reached between himself and M. Messmer on the specification, cost and production arrangements of the aircraft, would be confirmed or otherwise in the course of this month? There is not much left of this month. Does he anticipate being able to make a statement, following upon that assurance of his right honourable friend, within this month?
LORD SHACKLETON: My Lords, if the noble Lord would care to put down a Question and give due notice, I might be able to help him a little more.

NATIONAL INSURANCE BENEFITS
4.17 p.m.
BARONESS PHILLIPS: My Lords, with your Lordships' permission, I should like to repeat a Statement made by my right honourable friend the Minister of Social Security in another place. The Statement is as follows:
"I should like to make a statement about improvements in National Insurance and Industrial Injuries benefits, supplementary benefits, and war pensions.
"I have presented to-day a Bill to increase benefits and contributions under the National Insurance and Industrial Injuries Schemes; and an explanatory White Paper and a Report by the Government Actuary will be available later this afternoon. A Financial Memorandum is attached to the Bill.
"That main proposals in the Bill are as follows. The standard rate of National Insurance benefits will be increased by 10s. a week for a single person to £4 10s., and by 16s. for a married couple to £7 6s.
"Increases of benefit for children are to go up by 2s. 6d. a week.
"Thus the weekly flat-rate of benefit, including family allowance, for a man and wife with two children will be £9 16s.
"Widowed mother's allowance and the widow's pension will also be raised to £4 10s. a week. The benefit for a
1420
widow with two children, including family allowance, will be £8 15s.
"Parallel improvements will be made in the other flat rate National Insurance benefits.
"No changes are proposed on this occasion in earnings-related benefits or in the graduated retirement pension.
"Men and women who defer retirement and continue paying contributions after minimum pension age earn increments to their eventual retirement pension. It is proposed in the Bill to improve the rate at which increments are earned in the future—by changing the qualification for an increment from twelve contributions to nine.
"Death grant is increased by the Bill from £25 to £30.
"The Industrial Injuries provisions in the Bill include an increase of 17s. in the 100 per cent. disablement pension, bringing it to £7 12s. a week. Injury benefit is to be increased by 10s. a week, maintaining the present difference between injury benefit and sickness benefit. The new rate will thus be £7 5s. for a single man, and £10 1s. a man and wife.
"The standard rate of Industrial Injuries widow's pension is raised from £4 10s. to £5 1s. The addition for each child will be increased by 2s. 6d.
"The lower rate pension payable to the younger childless widow is to be increased from £1 to £1 10s. Constant attendance allowance, unemployability supplement and special hardship allowance will also be increased.
"The higher insurance benefits will entail a corresponding increase in contributions. The Class 1 insurance stamp for a man will go up by 4s. 3d. a week, of which the employee will pay 2s. and his employer 2s. 3d.
"There will be no change in the graduated contributions.
"The contribution for employed women will go up by 1s. 9d. for the employee and 2s. for the employer. Corresponding changes will be made in the juvenile and other contribution rates: for example, a self-employed man will pay an extra 2s. 4d. a week. "The cost of the improved National Insurance and Industrial Injuries benefits will be £219 million and £10·6 million respectively in the first full year.

1421
"The Government also propose to increase the basic Supplementary Benefit rates. Draft regulations incorporating the new rates will shortly be laid for approval by the House.
"The main changes proposed are that the scale rate for a single householder will increase by 5s. a week to £4 6s. and the scale rate for a married couple will rise by 8s. a week to £7 1s. Increases will also be made in the rates for other adults and for children.
"I will, with permission, circulate a list of the proposals in the OFFICIAL REPORT for the convenience of honourable Members.
"I now come to war pensions, which are dealt with by Royal Warrant for the Army and corresponding instruments for the Royal Navy, the Royal Air Force, and civilians and others. War pensioners will of course share with the population in general in the National Insurance improvements, but it is, I know, generally accepted that those who have been disabled or bereaved as a result of war service are entitled to something over and above the ordinary provisions.
"The basic rate of pension for 100 per cent. disablement will be increased from £6 15s. to £7 12s. and the standard rate of war widow's pension from £5 5s. to £5 17s. The lower rate of pension payable to the childless widow under 40 will be increased, like the corresponding industrial injuries pension, to £1 10s. The additions to pension for war widows' children will be increased by 2s. 6d. for each child.
"The main supplementary allowances—rent allowance for widows, and constant attendance allowance, un

PRINCIPAL CHANGES IN WAR PENIONS

Present rate

Proposed rate

£

s.

d.

£

s.

d.

Disablement pensions (100 per cent. assessment)

6

15

0 a week

7

12

0 a week

ex-non-commissioned officers

Increase of 17s. a week

ex-officers

Increase of £43 a year

ex-regular officers—disablement addition

Increase of £43 a year

Payments for disablement assessed at less than 100 per cent, will be increased proportionately

Constant attendance allowance

1

7

6 a week

1

10

0 a week

2

1

6 a week

2

5

0 a week

Normal maximum

2

15

0 a week

3

0

0 a week

4

2

6 a week

4

10

0 a week

Exceptional maximum

5

10

0 a week

6

0

0 a week

Unemployability supplement

4

7

6 a week

4

17

6 a week

employability supplement and allowance for lowered standard of occupation for disablement pensioners—will also be increased.
"On this occasion I propose in addition to increase the rate of comforts allowance, which goes to the most severely disabled pensioners, and of age allowance, which is payable both to elderly war widows and to the seriously disabled. I will, with permission, circulate a list of the principal changes in the OFFICIAL REPORT. The cost of the war pensions changes will be £12·8 million in the first year.
"The net total cost of the improvements, after taking account of the effect on Supplementary Benefits of the other benefit increases, will be about £220 million in the first full year.
"The Bill includes a clause giving temporary power to vary family allowances by Order and to make consequential adjustments in National Insurance and Industrial Injuries increases for children. As the House knows, we intend to announce our proposals for family endowment before the Summer Recess, and we have thought it right to seek this power so that, if appropriate, any interim improvement in family allowances could operate from the same date as the increases in other benefits. The clause is precautionary, arising from the intervention of the Summer Recess, and in no way prejudges the Government's proposals for family endowment.
"The appointed day for the increase in most benefits, for the new contributions, and for the higher Supplementary Benefits will be October 30."
Following are the changes and proposals referred to in the Statement:

Present rate

Proposed rate

£

s.

d.

£

s.

d.

The allowances payable with this supplement (and with treatment allowances) will also be increased:

Wife or other adult dependant

2

10

0 a week

2

16

0 a week

First child

1

2

6 a week

1

5

0 a week

Each other child

14

6 a week

17

0 a week

Allowance for lowered standard of occupation up to

2

14

0 a week

3

1

0 a week

Comforts allowance:

Lower rate

10

0 a week

12

6 a week

Higher rate

1

0

0 a week

1

5

0 a week

Age allowance:

40 or 50 per cent. rate

5

0 a week

7

6 a week

60 or 70 per cent. rate

7

6 a week

10

0 a week

80 or 90 per cent. rate

10

0 a week

15

0 a week

100 per cent. rate

15

0 a week

1

0

0 a week

Clothing allowance:

Lower rate

7

10

0 a year

9

0

0 a year

Higher rate

12

10

0 a year

14

0

0 a year

Widow's pensions:

Widows of ex-privates or equivalent

5

5

0 a week

5

17

0 a week

Widows of ex-non-commissioned officers

Increase of 12s. a week

Widows of ex-officers

Increase of £31 a year

Childless under 40 widow of private

1

0

0 a week

1

10

0 a week

For each child (other ranks)

2

4

0 a week

2

6

6 a week

For each child (officers)

122

10

0 a year

129

0

0 a year

Rent allowance for widows with children, up to

2

0

0 a week

2

5

0 a week

Age allowance for widows

10

0 a week

15

0 a week

Pensions for unmarried dependants who lived as wives of men now deceased:

Other ranks

4

17

6 a week

5

9

0 a week

Officers

279

0

0 a year

309

0

0 a year

Orphan's pensions:

Other ranks, under 15 years

2

4

0 a week

2

6

6 a week

Other ranks, 15 years and over

3

2

0 a week

3

9

6 a week

Officers, under 18 years

170

10

0 a year

190

0

0 a year

Adult orphan incapable of self-support

4

0

0 a week

4

10

0 a week

PROPOSED SUPPLEMENTARY BENEFIT RATES

Present Weekly Rate

Proposed Weekly Rate

£

s.

d.

£

s.

d.

ORDINARY SCALE

(a) Husband and wife

6

13

0

7

1

0

(b) Person living alone

4

1

0

4

6

0

(c) Any other person aged—

(i) not less than 21 years

3

9

0

3

11

0

(ii) less than 21 but not less than 18 years

2

15

0

2

18

0

(iii) less than 18 but not less than 16 years

2

7

0

2

10

0

(iv) less than 16 but not less than 11 years

1

15

0

1

17

0

(v) less than 11 but not less than 5 years

1

8

0

1

10

0

(vi) less than 5 years

1

3

6

1

5

0

BLIND SCALE

(a) Husband and Wife—

(i) if one of them blind

7

17

6

8

5

6

(ii) if both of them blind

8

13

6

9

1

6

(b) Any other blind person aged—

(i) not less than 21 years

5

5

6

5

10

6

(ii) less than 21 but not less than 18 years

3

15

0

3

18

0

(iii) less than 18 but not less than 16 years

3

3

0

3

6

0

(iv) less than 16 but not less than 11 years

1

15

0

1

17

0

(v) less than 11 but not less than 5 years

1

8

0

1

10

0

(iv) less than 5 years

1

3

6

1

5

0

Notes
(i) An allowance for rent is added to the above rates.
(ii) Both the existing and proposed rates given above exclude the 9s. long-term addition which is added to the requirements of persons over pensionable age an to those of persons under pensionable age (other than the unemployed) who have received supplementary benefit (or national assistance) for a period of two years.
LORD BROOKE OF CUMNOR: My Lords, may I thank the noble Baroness for repeating the Statement, and congratulate her on having the opportunity to do so on a day when she is the centrepiece of such a delightful article about your Lordships' House in a national newspaper. I welcome the fact, as I am sure will all noble Lords, that people living on small incomes which largely consist of National Insurance benefits will receive these increases which the noble Baroness has described to offset the erosion of these benefits by the rise in the cost of living since the Labour Government came to power and last increased the benefits. I particularly welcome the fact that these increases are to become payable before the winter with the heavier costs for light and heat which winter brings, particularly to old people.
May I ask whether the increased rate of war pensions, which we also welcome, will start on October 30 as well as the benefit increases? The Statement was slightly ambiguous about that matter. Secondly, all these increases have to be paid for, and the big increase in weekly contributions will be much less welcome. Could the noble Baroness clarify the total cost of all these increases? Could she explain how much is to be met by increased contributions from employers and employed, and how much in total will fall upon the taxpayer?
BARONESS PHILLIPS: My Lords, after Lord Brooke of Cumnor's very generous and charming remarks, I am sorry to say that I am unable to give him a reply to his second question. I shall be happy to obtain the answer for him. In connection with his first question, it appears—and again I will verify this—that in fact the date is the same.
LORD AMULREE: My Lords, I too, should like to join in thanking the noble Baroness for making the statement, and also to associate myself with the remarks of the noble Lord, Lord Brooke of Cum-nor, about the article which appeared in the newspaper this morning. But I should like to ask whether these new improved rates will make any difference at all to
1426
the unfortunate people, though they are not very large in number, who do not qualify for pensions at all because they have never been in the contributory scheme.
BARONESS PHILLIPS: My Lords, the reply to the noble Lord is that they are not covered by this particular Bill. The Government are at the moment having a great deal of discussion on the whole question of relieving poverty within the country, and long-term proposals will be brought before the House before the end of the Summer Recess.
LORD ILFORD: My Lords, may I ask the noble Baroness whether it is intended to continue the existing graduated scheme in its present form?
BARONESS PHILLIPS: The answer is, yes, my Lords.
LORD BROOKE OF CUMNOR: My Lords, I hope the noble Baroness will not think it churlish of me if I express regret that she was not able to answer my second question. Is she aware that there are many people who feel that one of the dangers affecting a country like ours is that proposals for higher benefits are welcomed without at the same time sufficient realisation of the cost which we shall all have to bear? I think my question was a very pertinent one which should be answered.
BARONESS PHILLIPS: My Lords, I appreciate the noble Lord's point. I am sorry that although I have many facts before me, inevitably, of course, I have not got the questions which I might be asked. I will see that the noble Lord has this information.
LORD SALTOUN: My Lords, may I ask whether the Government will circulate the relevant figures as the answer to a Question?
BARONESS PHILLIPS: My Lords, I understand that under the procedure a Question would have to be put down for that purpose. Perhaps the noble Lord would do that, and we should then be happy to see to it.

RHODESIA
4.28 p.m.
Debate resumed.
THE LORD BISHOP OF CHICHESTER: My Lords, in this resumed debate I will seek to modify and limit my own remarks, as have other speakers, not merely because of the length of the list of speakers which is before us and the familiarity of the subject, but because none of us would wish to say anything that in any sense interfered with any possible discussions or negotiations which might result from Lord Alport's visit to Rhodesia. Indeed, we all wish him well in this extremely difficult undertaking. He will be as aware as any of us of the complexity of this matter and the fact that the breakdown of negotiations has tended to harden attitudes on both sides. Anything he, or anybody else, can do to keep open the lines of discussion and exploration we must support.
I think there are still many thoughtful people in Rhodesia who, while they feel bound to support the Smith régime, perhaps because of a lack of any visible alternative, are still, in the absence of any proper communication with us, completely in the dark as to what Britain intends to do and what it has undertaken or promised to do, or have not had its case presented to them otherwise than in a grossly misrepresenting way. Perhaps over there they may say the same about this country, though if that be true it is not for lack of advocates in this country, which has a freedom of expression which does not obtain over there. That is the difference. But we all wish that what the noble Lord, Lord Alport, can do to keep open this debate to the point of a renewal of negotiations will be done.
We must hope that in the process of listening to what may be said to him he will not suggest that we are prepared in any way to go back on the position which has been taken by successive Governments and which, I suppose, has been given expression to, with the fullest possible accommodation to other views, in the "Tiger" proposals. I hope, also, that he will make clear that our difficulties arise not only out of constitutional questions or the hurt pride of the Mother Country or anything like that,
1428
but from some genuine disagreements on what seem to us matters of principle and over which there may still be considerable misunderstanding.
There is misunderstanding, I think, about the weight of importance which many of us place upon the Rhodesia question in this country. As the noble Marquess said, Rhodesia is a small country and it is not directly threatening the peace of its neighbours. Yet Rhodesia cannot be isolated from the much larger question. Increasingly, as the crisis goes on, it will become a kind of focus for African self-consciousness. The comparatively peaceful surface of events in Rhodesia is, in this respect, entirely misleading. It will become—it cannot help becoming—a symbol of the conflict between races when they meet together, and in which the opposing interests clash in a very vivid black and white picture. I know that the Rhodesians themselves disclaim that this is so. They are not concerned with it. For them the issue is an internal matter of the development, the self-government and the order of their own country. And yet it remains, and will remain, a testing point. The Rhodesian minority will become to very much of the world the representatives of the white and, indeed, the professedly Christian part of the world. We cannot avoid this global aspect of the situation, seen in Vietnam and seen in the Middle East, and it will be seen in the context of African self-consciousness and African pride.
We have always hoped in this country, in view of the importance of Rhodesia in the whole scene, that it would move towards an integrated and multiracial society which could give hope in other places also. We must hold on to that hope—with whatever prospect now of achieving it we cannot say. But if we were to give it up or renounce the objective behind it, or to disclaim the responsibilities which we can exercise, then we should be doing a real disservice to those in Rhodesia and to ourselves, and to any contribution we can make to this whole question of race throughout the world. I hope that we can in some way clear the air on what we are so concerned about.
There is misunderstanding also (and I hope this may be cleared up) as to the objective which has been expressed in the first principle—advance towards majority

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rule. We know that white Rhodesians claim that they are aiming at this, too. One correspondent—incidentally a Christian correspondent—writing home to take to task the British Council of Churches for its own, as he called it, intolerant attitude, stated:
"Rhodesia is committed to following Britain's example; to an expanding, qualified franchise leading to universal suffrage as soon as this is compatible with stable and responsible government."
That is fair enough, but we must be realistic about this question. It is sometimes suggested in this kind of letter that the real difference between, say, the Smith régime and ours is one of timing or degree. We are pressing, it is said, for full democracy—one man, one vote— at once, whereas they are working to bring the African steadily forward at the kind of pace which can best be gauged by those on the spot. It is, they say, a matter of timing. We, like some States, are for hurrying them onwards, even, as it were, to a Congo; and they are for a more steady rate of growth which accords with experience, but towards the same end. If this were really the case, discussion and agreement would certainly not be impossible. But is it really so? Is it—and this is where we should like some clarity—a difference not of timing but of intention?
The rate of civic advance towards the political maturity of the African will be determined by a number of things outside his own control. It will be determined by education and by economic progress—and here the rate will depend primarily not upon him, but upon Government policy and national stability. It will be determined, also, by the kind of opportunity which he has. For, on the whole, men learn responsibility by having to assume it, and the chances for the African to do this will, again, be under the control of others than himself—governmental powers and social progress. Unless there is a genuine will for this to happen, growth will not happen. It has been our aim to build into any Constitution which there might be some guarantees, so far as Constitutions can give them, that this progress will go on.
But we must say to them that to promise political freedom in due time may be just an empty promise. It is like St. Augustine praying for chastity, but
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not yet. It is precisely in this kind of way that we find ourselves at loggerheads. Have we had, can we see, sufficient ground for hope; some firm sign that if Rhodesia were left to work out constitutional advance according to its own judgment or such opinion as it elected to take, the present Government could be relied upon to mean business? After all, it takes a great deal of enlightenment to surrender or even to share power voluntarily, and what reason can we get for confidence that the power which operates in Rhodesia at present, and which, as other noble Lords have remarked again to-day, operates under safeguards of very rigid censorship and control, will be prepared to take the kind of legitimate risks which any extension of freedom implies?
We should be failing in our duty if we did not explore the intention rather than just the promise that lies behind the principle which we have set out in our six points. The intention is surely the third area of misunderstanding which may arise. At the present time there are indications, which have been referred to by the noble Lord, Lord Carrington, and by the noble and learned Lord the Lord Chancellor, that so far as there is a movement it is in a different direction altogether; signs that seem to point very much more to what might be a deliberate policy later of separate development or apartheid, which we have condemned so roundly elsewhere. It is a process which, we recognise, ought not at this moment to be exaggerated. It is not perhaps a deliberate policy; at least, it is not one which has been deliberately assumed by the people as a whole, or even understood by them. It is not a doctrinaire policy based upon some kind of ideology as with its Southern neighbour. But it may none the less be real.
There is a kind of logical sequence in this process which may carry people forward from one stage to another without any apparent change of direction at all. It may start with, say, education, which touches people closely. At a young age, boys or girls of different races mix freely in games and studies with the ease and familiarity which, if it persists into later life, might have awkward consequences for this kind of policy. It might start, of course, in other spheres, such as property, housing and the like, to which

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reference has already been made and I shall not weary your Lordships by referring to them again. But it is a kind of logical sequence from one thing to another; and while in its initial stages it has a certain convenience and even a certain making for peace, the consequences later on, as it gathers momentum, are disastrous.
Wherever there is any suggestion that there cannot be freedom of association between peoples of different races in one place or another, we are up against this problem. It has received much notice and has been the subject of protest by numbers of people in Rhodesia: by Christian groups, by the Christian Council there, by Roman Catholic Bishops and by a number of individuals. I have seen a number of letters from men and women expressing the gravest unease and concern at what seems to be the tendency. While recognising the fears which are dominating people at this time, while recognising the difficulty of making any kind of public protest about it, and while working, with great credit to themselves, in most difficult situations, to try to uphold the kind of fairness and equality in pastoral care which ought to be there among all races, they are uneasy, and they have expressed this. I believe that we have a right, knowing that we are thinking not only of the present but of the future, to explore this, since its consequences later on may be of a dimension which we could not bear to see fastened upon a country so close to us as Rhodesia.
Still less do I want to suggest that we in this country, in our present delicate situation, ought to be lecturing, denouncing or obstructing these people, or even adopting that "sanctimony" for which we are indebted to the noble Marquess, particularly, perhaps—I do not know—we on these Benches. We all of us wish for their future well-being, and we ought to pledge ourselves to any possible help in resources which the renewal and building up of their economy will later demand. But surely we must say to them that fundamentally it is not our choice, but theirs. Theirs, in the end, is the decision as to what Rhodesia will be like in a generation's time. We can spell it out to them if we can, but we cannot make the decision—not unless we enter upon that policy of direct intervene
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tion against which, although it has been demanded elsewhere, we have set our faces.
Whether or not the sanctions to which we have given our assent are being effective now, they will, as I believe, bear very bitter fruit later in the effect they will have on the economy of the country. Whether they will have an effect upon the situation, it is impossible for us to say. We are, as it were, making this decision more costly for them to make. But it is still their decision, and the only way in which it could not be their decision is if we accepted the alternative of a virtual acquiescence in whatever the present régime chose to do and thereby, as it were, threw the mantle of our own authority over the actions of a Government which we did not control. I cannot believe that that way holds out any future, but any way that could bring about an honourable settlement is one which surely would receive the full endorsement of this House.
4.45 p.m.
LORD BALFOUR OF INCHRYE: My Lords, I listened to something of a political chastisement from the noble and learned Lord on the Woolsack of my noble friend Lord Salisbury for holding this debate to-day. I bow to the Lord Chancellor's great legal knowledge and experience, and I hope that I pay due respect to the high Office he holds. But when it comes to experience as a Member of Parliament, of either House, the Lord Chancellor is comparatively young. Had the Lord Chancellor had the benefit of the experience of a good many years in another place which many noble Lords have had, or possibly longer in your Lordships' House, he would know that debates on critical issues are very rarely convenient to Governments and rarely welcomed.
It is the usual form of Government protest, when something occurs that is not to their pleasure, to say pontifically, "This is an entirely wrong and inappropriate occasion on which to hold such a debate". I think this debate is appropriate, for the reasons my noble friend Lord Salisbury gave, and because, even though the Government can make no declaration of policy to-day, even if we cannot hear from the Government, the Government can at any rate hear from

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us, who represent an increasing number of persons in the country who are sick and tired of the Rhodesian unsettled issue dragging on to an unknown end, except for one certainty—that the end will bring no joy to anyone.
My main purpose in speaking this afternoon is to put one big question to the Government, as simply and as briefly as I can. The Prime Minister is beholden to the pledge, given by him to the Cornmonwealth Conference, known by those unpleasant initials, NIBMAR—"No independence before majority African rule". With that pledge in force, what do the Government see at the end of the road?—because Rhodesia is not going to accept that. Let us analyse it for a moment. Sanctions must either fail or succeed. Let us take the first possibility: that sanctions fail. While the damage to the economy is obvious and severe (and it is not underrated by my noble friend and those who support him), the degree of such damage is to some extent in dispute; and certainly there are no signs of any imminent economic collapse in Rhodesia. At the same time, the cost to us in this country is very great; and while Rhodesia may take in her belt several more notches, I question how long our knife-edge economy can go on sustaining these self-inflicted wounds.
If economic sanctions fail, what then? Rhodesia is militarily inviolate. There are voices crying in U.N.O. and voices crying in this country that the pledge to use no force should be amended, should be abandoned. One has only to listen to Dr. Hastings Banda to realise the complete folly of any idea of mounting military or air operations against Rhodesia. The extension of sanctions against South Africa, which may be called for, is just "not on". The United States would not have it; we would not have it. Even if the hot-heads of U.N.O. tried to force that idea forward we know that it is quite out of the picture. So, I repeat: If sanctions fail, what happens? There is stalemate. We drive Rhodesia out of the Commonwealth; there will be an indefinite position, probably with various countries in the world, one by one, dropping the impost of mandatory sanctions.
Let us take the second alternative—which I think the Government certainly prefer to dwell on: that sanctions succeed.
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The confident list of injuries done to Rhodesia, which we had from the noble and learned Lord who sits on the Woolsack, I think justifies my saying that the Government prefer to dwell on (I do not say, "rejoice in"; I say "dwell on") the possibility of sanctions' succeeding. If sanctions cause the economy of Rhodesia to grind to a standstill, the Government will still have failed. Because though you can deprive men of their material comforts, and wreck their commercial life, you cannot deprive men of their determination and you cannot crush their spirit of resistance to what they feel is wrong. You cannot force men to surrender who feel that their cause is right and just: just for themselves and just (except for a comparatively small number of highly politically minded Africans) for the vast majority of the inhabitants of the country.
THE PARLIAMENTARY UNDERSECRETARY OF STATE FOR COMMONWEALTH AFFAIRS (LORD BESWICK): Would the noble Lord be good enough to say whether he accepts that the proposition he has just stated about the impossibility of depriving men of their spirit applies equally to black as well as to white men?
LORD BALFOUR OF INCHRYE: Certainly, my Lords. The success of sanctions would only, I believe, harden the resolute in Rhodesia and rally the doubters. The final outcome of the success of the Government's policy of sanctions may be to drive an impoverished and embittered—but united—white population into the arms of South Africa, and very much on the South African terms. How will that help the Africans in Rhodesia? I say this to the Government: Sanctions fail or sanctions succeed; but where, oh where! is the victory for the Government?
My Lords, there are some 50 Members of another place who have put down a Motion urging the Prime Minister to stand by the principle of "No Independence before majority African rule". By doing this the Prime Minister and his Party may gain the plaudits of the Commonwealth new territories, several of whom, let us remember, accept our money but never cease reviling us. My question is: Will this pledge benefit the Africans in Rhodesia for whom, as the noble and learned Lord on the Woolsack reminded

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us, we are the trustees? Are we certain that in this pledge of NIBMAR there are not the seeds of betrayal of the true interest and orderly progress towards eventual self-government for the Africans in Rhodesia?
As a test of progress, the record of some of the new States is not exactly impressive. Internal law and order; open political institutions; political stability; economic stability—Rhodesia has all these; others have not. It is true, as the noble and learned Lord said, that Rhodesia now has legislative provisions which I think all of us abhor—the detention of men without trial. But other countries also have this. Our own country is really not quite pure in that respect. It is within the memory of most noble Lords here that during the war, when this country was in a state of emergency—and Rhodesia feels that she is—we had Regulation 18B, which kept people in prison without any trial.
I believe that under premature and imposed majority rule the Africans are likely to shape an economy which may not compare with that which they enjoy at the present time. Under African majority rule, will there be faster building of houses? Will there be more and better schools? Will there be more hospitals? Will there be greater employment or a higher standard of life? In all these things today Rhodesia compares well with other developing countries of the world. All this has been built up by white settlers who found primitive savagery, and what they have done might well be jeopardised by the fulfilment of the pledge of NIBMAR.
I believe that those who call for NIBMAR should wonder where they are leading the Africans. If their voices win the day, I believe that they will bring them dangerous chaos and economic misery. I hope that, before it is too late, the Prime Minister will face the reality of the position, which my noble friend, Lord Salisbury, deployed, with Rhodesia, the reality with the Commonwealth, by saying to the Commonwealth: "It will not work as I said it would. Now it is better for Africans and for whites in Rhodesia that NIBMAR should be abandoned as a policy and that a fresh start should be made to come
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to reasonable agreement with those of all colours in a brave land whose people, of all colours, have stood with us in two world wars at those times when we needed all help." My Lords, let us give them the help they need while it is within our power to do so.
LORD ROYLE: My Lords, from the Back Benches on this side of the House may I begin by expressing some resentment at what the noble Lord, Lord Balfour of Inchrye, had to say in criticism of my noble and learned friend? With the knowledge we have of my noble and learned friend's experience and life it seems to me most uncalled for that he should be subjected to that kind of attack at the commencement of a speech.
A NOBLE LORD: Why not?
LORD ROYLE: We in these two Houses of Parliament have no monopoly of political knowledge. There are many people in all parts and in all classes of our society who are very interested in these things. There is no doubt that the experience and knowledge of my noble and learned friend is unsurpassed in this way. There is his experience of international law and the fact that he has been in Southern Rhodesia negotiating with the Smith régime. I say, with great respect to the noble Lord, that I feel great resentment that he should have thought fit to start his speech with that attack. Moreover, the noble Lord at the end of his speech talked about the number of Southern Rhodesians who helped us in the war. I wonder whether he would let me remind him that they were not all whites.
A NOBLE LORD: He said that they were not.
LORD ROYLE: There were very many black Rhodesians—
LORD BALFOUR OF INCHRYE: My Lords, I think that the noble Lord, Lord Royle has got it wrong. I did say brave Rhodesians of all colours had helped us.
LORD ROYLE: My Lords, I am sorry; I accept that. I did not hear that word. But nothing can highlight the difference of thought and mind in your Lordships' House more than this subject. It maybe it was because of that that I felt some resentment about what the noble Lord said at the beginning of his

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speech. We have discussed these things over the past months with completely different feelings and outlook. The noble Marquess, Lord Salisbury, and his noble friend Lord Balfour of Inchrye, have once again shown their minds on these matters in a way which proves that they have not yet got away from the ideas of white rule and the Empire.
Salisbury being the capital of Southern Rhodesia, it perhaps calls for some sympathy towards the noble Marquess, but I am one who cannot understand this outlook of his in the second half of the 20th century. I am sorry to have to say it, but the noble Marquess has brought no more clarity or hope to this distressful situation by raising the matter again this afternoon and I should be inclined to agree to some extent with the sentiments expressed by the noble Lord, Lord Henley, except for the fact that we on these Benches cannot possibly allow the noble Marquess to get away with it without expressing other points of view. My views on these matters are not moderate—not moderate at the opposite end to those of the noble Marquess. In the main, what I want to say in a very short time is to some degree following the speech of the right reverend Prelate the Bishop of Chichester, whose speech I appreciated tremendously. I shall say it in different words, but perhaps ultimately they will mean the same.
The Smith régime has given no indication of a change of heart, and its general attitude towards the majority of its people shows no improvement. There has been no step towards unimpeded progress to majority rule; no guarantee against retrogressive amendment of the Constitution; no improvement in the political status of the African population; no progress towards ending racial discrimination; no satisfaction that any basis for independence should be acceptable to the people as a whole. But there is still a state of emergency; there are still regulations to control the movements of people; to detain people; to place cordons round certain areas; to limit the publication and sale of newspapers; to prohibit gatherings; to impose curfews and deny access to detainees and to allow house arrest. There is still the provision of the detention camp; and how this afternoon we were all struck by the Answer given by my noble and learned friend to the Ques-
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tion put by my noble friend Lord Brockway! What an extraordinary and outstanding case, and what an illustration it was of the situation which exists! What a régime the noble Marquess is extending his sympathy to!
My Lords, because there are a number of speakers who wish to take part in the debate and time is going on, I will concentrate only on one point. May I turn to the constant argument that the African population is unready for participation in Government. This was very well skated over this afternoon. There has been hardly a reference to that basic fact, but this is what it is all about. This is why Her Majesty's Government oppose the U.D.I. Government, so-called, of Mr. Smith. This is where it began, because the African people were not being given their opportunities. In my reckoning 22 Commonwealth States have achieved independence since India and Pakistan achieved it in 1927, plus the associated States of the West Indies—
THE MARQUESS OF SALISBURY: My Lords, does the noble Lord hold that that has always been a success, or that the people of those countries are better off than they were before?
LORD ROYLE: My Lords, perhaps the noble Marquess will allow me to finish, and I will tell him what I think about that. All those States have an overwhelming proportion of non-white population. Zambia and Malawi were in the Central African Federation. Why is Southern Rhodesia so different? Why is it a State apart? Why will not adult suffrage and majority rule work in Southern Rhodesia as it has done in 22 other States?
SEVERAL NOBLE LORDS: Oh!
LORD ROYLE: Wait a moment—
LORD SHEPHERD: Go on, hit them.
LORD ROYLE: —I know that the degrees of success have been varied, but we have had constitutional problems in this country. We had a Civil War which resulted in the execution of a king, and we had had centuries of Parliamentary rule when that happened; we were not a brand new country. But generally, full democracy prevails, with adult suffrage, in this Commonwealth of ours. The other two States from the Federation have

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achieved these things, perhaps not with perfection, but great improvement must and will come. And so I ask again, what is wrong with Southern Rhodesia that they cannot adopt the same method?
Is it right to assume, my Lords, that among the Africans of Southern Rhodesia there are no leaders of integrity and intellect? Every other independent State has thrown up such men, many of them educated and trained in Great Britain. The difference is that in Southern Rhodesia they have not been encouraged; and, my goodness!, that is an understatement. They have been denied experience and education by the ruling white classes who insist on retaining power by I.D.I. I believe this is a denial of everything in the concept of the modern Commonwealth. It has been proved that multiracial societies can and do exist. My analogy is in the West Indies, which I know so well. Trinidad and Jamaica achieved full independence with the collapse of the West Indies Federation. Leadership of integrity and intellect, irrespective of colour, has attained success. The best men for the task have been appointed, and it has come about by full democratic agencies, and only in that way.
My Lords, another Federation broke up. Zambia and Malawi, with all their difficulties and lack of perfection, and with their teething troubles, established full democracy and produced leaders. Why should Southern Rhodesia be permitted to stand out, not only in Central Africa but as an exception in the whole Commonwealth of newly independent States? To me, the thought is preposterous. In my view noble Lords who support Mr. Smith and his friends are assisting in the survival of white supremacy against the huge majority of the population, against everything that is right in the Commonwealth and in the world of to-day.
I will say only one or two words in conclusion. The Smith régime ultimately rejected the proposals worked out in the conference on the "Tiger". Everybody has agreed that they were generous proposals. On the other hand, NIBMAR was a solemn pledge to the mass of the people of Southern Rhodesia and I would say to the noble Lord, Lord Balfour of Inchrye, that it still stands as a pledge.
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Her Majesty's Government are not looking for a precipitate majority rule, but majority rule based on achievement and constitutional evolution. But it must remain the firm and basic objective in any constitutional settlement.
My noble and learned friend has shown this afternoon, and independent observers have confirmed, that sanctions are becoming effective. I believe that this will lead ultimately to the overthrow of the illegal régime. Of course, we should all welcome any efforts to bring about a solution. But this, I suggest, will not be accomplished by any signs of weakness, as envisaged in at least two of the speeches we have heard this afternoon and inherent in the Motion before the House.
5.12 p.m.
LORD BOURNE: My Lords, I have not previously taken part in debates on Rhodesia, having been content to leave it to others well qualified to speak on the subject. What drives me to speak this afternoon is the deadlock we have reached. I am one of those who would like to thank the noble Marquess, Lord Salisbury, for having initiated this debate this afternoon, because I firmly believe that it is better to discuss things in an up-to-date way and have the latest views of people, which can be properly reported. If there is any doubt about what is said this afternoon Mr. Smith has only to pick up Hansard to find out.
In my opinion, this deadlock is getting beyond the control of our Government. I do not propose to deal, as previous speakers have done, with the content of the subject, on which we all have our views, but I should like to discuss whether there is some way out of the deadlock. We handed over the chief load on this problem to the United Nations not long ago. At that time many of us thought it a somewhat doubtful procedure, but we were prepared to wait. The doubt in my mind about that action of broadening the problem, of passing it on to the United Nations from the British Commonwealth, where we had previously discussed it, was not in relation to that action in itself, but whether we could ever regain control of the problem. I think that some of us may now be regretting that we cannot quite control it.
The fundamental questions remain with Britain and Rhodesia, not with the

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United Nations. And at this point, I think it is just as well to remember a few of the fundamental features of the present situation. It is sometimes forgotten, for example, that the British Government's objective in this exercise is not a single one but two-fold. It is, first, to grant independence, preferably inside the Commonwealth, to a country which has earned it and has had home rule for more than forty years; and, secondly, at the same time—and not necessarily in order of merit—to ensure majority rule, which in practice means rule by the Africans.
We have granted independence to many countries since the end of World War II and in every case we have handed over a Constitution, nicely written out, usually by a Don from Cambridge—and not necessarily everlasting. We have seen violent changes in a good many of these countries once they have passed outside the control of this country, and if the Constitutions have not been torn up, they have certainly been put in pigeon holes. At the time we granted independence to these countries, we counted the cost of postponing independence. For example, in Burma, with which I was connected, we estimated that it would take 12 British Divisions to occupy the country if we did not grant independence. The Dutch, who were faced with the same problem in Indonesia, came to the same figure—12 Dutch divisions. Apart from the fact that we decided that it would be wrong to delay independence, we also said to ourselves that we could not afford it.
That is the situation to-day so far as Rhodesia is concerned. That would have been the cost to restore law and order. But it has not been necessary, because we decided not to use force to ensure African majority rule. We came to the question of something less than force. As the noble and learned Lord the Lord Chancellor said, sanctions are only slightly less than war. They are a form of economic and financial blockade which is usually part of an act of war. In other words, we are conducting a war against Rhodesia, except that we are not suffering any casualties. People may disagree about the facts on sanctions which have already been outlined by the noble Lord, Lord Balfour of Inchrye, but my view is that sanctions have never yet worked. They
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are not likely to work in the case of an open frontier, and here we have two, even three, open frontiers. It does not make any difference who organises the sanctions, whether it is Britain or the United Nations: they are still not likely to have an immediate effect. I suggest that they are bound to have one of three effects.
The first is that they might achieve complete surrender by the Smith régime, which is highly unlikely, in spite of the list of successes we have heard about this afternoon. Secondly, we may admit that sanctions have failed and cancel them. That, I think, is equally unlikely in the present temper. The third possibility—which I think is the certain result—is that they will drag on, and we shall drive Rhodesia ultimately, unwillingly, into the arms of the Union. That means apartheid for an indefinite period, which is the opposite of our intentions In other words, sanctions will lead not to surrender but to bitterness
Theoretically, of course, it is right to stick to our principles I am one of those who entirely agree with the first principle of unimpeded progress toward majority rule, but in practice we are not achieving that object. Politics, we often say, is the art of the possible. This deadlock is a classic example of this. Please let us return to the practical before it is too late. The practical course now, in my view, is to accept some diminution of our original objective There are, of course, tremendous pressures. The noble Marquess, Lord Salisbury, said that the future was much more important than the past; and with this I entirely agree. The numerous new African States whose weighty opinion, in numbers of States, rather forced us to go to the United Nations, having no military forces cannot in fact invade Rhodesia. A company of white Rhodesians, with air support, can defeat any single fighting African army that I have heard of. This has been admitted by one of the black leaders (I forget which one it was), and he is quite right.
Hitherto, all the negotiations—and they have been pursued with the best possible intentions to arrive at an honourable settlement—have been, in my view, bedevilled by details. For example, we have six principles laid down in our White Paper, but in my view the last five are contained in the first. If we achieve

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the first principle, then that is enough: the rest follow. We could quite well, in negotiation, if we achieve the first principle, "scrub" the rest. The two countries are rather like two football teams, both of which are determined not to be beaten, and determined not to have a goal scored against them, irrespective of whether they win the game or not. I would implore this Government to change their mind and be ready to compromise a little in order to achieve the objective. Incidentally, they have changed their minds quite a few times recently—there is quite a list; but I will not give it to your Lordships.
I have a plan to offer, which is only a personal plan, but it illustrates this giving way of principle a little on either side. So far as Britain is concerned, we should first of all withdraw the refusal to grant independence before majority rule, in return for a firm date for majority rule. We nearly got this in H.M.S. "Tiger"—we got it except for the date. Secondly, Britain should not insist on complicated procedures for return to legality, which are only a method en route to the final objective. Rhodesia, on her side, must do three things. First of all, she must repeat the assurances given in H.M.S. "Tiger" about majority rule, with a date: and the terms could be a matter for discussion. Secondly, she should accept educational assistance in order to improve the status of Africans and so accelerate their readiness for majority rule. That proposal was rejected outright by Mr. Smith in the original negotiations, and it seems rather to have been forgotten. But they should swallow their pride and accept educational assistance in order to hurry the date.
Then, both the Prime Ministers should meet in a neutral place—perhaps Malta—and discuss the principles in private. And if they agree the principles, then the British Government should promise to use their best efforts to have sanctions lifted. If they do this in private, and succeed, then they should publish the results. This should be followed by another conference, of officials. One of the earlier speakers (I think it was the noble Marquess, Lord Salisbury) said: "Please leave it to the officials." But the officials are powerless unless the points of principle have been decided and
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agreed. I think this conference of officials should be allowed to operate in private, if necessary for weeks on end, and not publish their deliberations until they have finished. If neither side gives way, then neither will achieve its object; and there will be no victory on either side. We shall not achieve our desired object of majority rule in Rhodesia, and, so far as the Rhodesians are concerned, they will have to give up their independence and join forces with the Union.
5.25 p.m.
LORD SALTER: My Lords, I am in fundamental agreement with my noble and gallant friend; I agree, too, with most of his specific plan, though I should have one or two reservations with which I do not think it is worth while to burden your Lordships to-day. I want to approach the problem of Rhodesia from a rather different angle, and I propose to make my comments to-day by discussing three questions. The first question is about the effect of the Government's policy on our own domestic situation; the second is about the consequences of this policy to the African residents of Rhodesia, who are a majority of at least 16 to 1 of all the residents of Rhodesia; and the third is about the legal questions involved in the present situation and policy.
I do not ask the Government to answer these questions to-day. I discuss them now because I believe that they are questions which all of us who are either responsibly concerned or seriously interested in the Rhodesian problem ought to ask ourselves and try to find an answer to through whatever sources are available to us. The sources of our information will, of course, differ widely with our respective experience and occupations, but I think we can all get enough information to form the basis for a reasonable, well-founded opinion if we really try.
My first question is: what is the real cost to ourselves of the present policy, and what effect has this had and is it having on our domestic situation? We all know that the cause of our fluctuating domestic policy, alternating between "Stop" and "Go", the vast foreign loans, which must be repaid, borrowed to support the pound at its present level; and the alternation between freeze and inflation—is the recurrently serious deficit in

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our external balance of payments. I am myself convinced that this external deficit, even in its worst periods, is scarcely, if at all, greater than the contribution to the deficit made by the policy towards Rhodesia, past, present and prospective.
My reasons for this conviction are, first, that South Africa had hitherto been one of our three greatest external markets, and our market there has been largely, and will be increasingly, lost. We are suffering similar though smaller losses in other markets, such as Portugal. In the second place, while this country, as the initiator of a policy of mandatory sanctions, is doubtless obeying them herself, they are notoriously evaded directly or indirectly elsewhere, with corresponding loss to us. Thirdly, we have incurred immense expense and liability, with the opposite of a grateful attitude in return, in subsidising Zambia.
If I were a member of the Cabinet, I should ask the Chancellor of the Exchequer to give my colleagues and myself a frank answer on the question that I have just raised, with all the advantage of his own personal judgment and the information accessible to him, and I should expect to find the answer convincing. He cannot possibly give such a candid answer to anyone outside the Cabinet, and it is of no use putting down Parliamentary Questions. Those of us who are outside the Cabinet, whether supporters of the present Government or not, must seek our information elsewhere. But many of us have available sources of information which are enough to give us a reliable answer. Those, for example, who have wide interests and experience in international trade can answer the question with some certainty. I ask them to do so, and to inform the rest of us of their answer. In any case, all of us, if we take enough trouble, can learn enough to enable us to form a reasonably certain answer. I hope that we shall do so, and I believe that most who do so, without prejudice from what they would like the answer to be, will come to much the same conclusions as I have come myself.
If indeed I am right in this opinion, what a terrible price we have paid in the consequences of our "Stop-Go" policy, to deal with a recurrent external deficit which, but for the Government's Rhodesian policy, need not have existed! So much for the cost to ourselves.
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My second question is about the consequences to the vast majority of the African residents in Rhodesia, what are their wishes? I believe that, except for a very small number—some African, some white (those whom the present de facto Rhodesian Government consider, rightly or wrongly, to be politically dangerous), the present régime is both more beneficial and more acceptable to the resident African majority than any that we could conceivably secure to replace it. This takes into account a comparison with other African countries, as to both the standard of living which it has made possible and the basic justice it affords in all the disputes and difficulties of ordinary human life. I also believe that the present régime is more acceptable than any practicable alternative to the resident African majority. Some agitators have, of course, been infiltrated from outside into Rhodesia, but they have had little success; and many residents in other parts of Africa, with little or no interest in Rhodesian residents as such, have been vociferous in their protests. I am now speaking of the attitude of African residents in Rhodesia.
I would also suggest to all interested in Rhodesia that they should compare the situation there, as I think the noble and learned Lord the Lord Chancellor has clone to some extent, with that in the many former African Colonies which we and Belgium have made independent in the last few years. There are indeed some ex-Colonies which compare favourably, or at least not unfavourably—Malawi, for example. But look at them all: at Ghana; at Nigeria—yes, even Nigeria, once thought to be the most promising of all. In how many has the régime which has emerged been more favourable, and more acceptable to the mass of African residents, as distinct from a handful of politicians who have seized power? On such a review of subsequent developments, can the Government still hold that the countries to which they granted independence were more fitted for it than the present Rhodesian régime? If not, what right or reason have they to continue to refuse independence to Rhodesia?
Now for my third question. What are the legal factors involved? First, of course, is U.D.I. I have myself always regretted its illegality, and so declared

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as early as when we debated the problem in December, 1965. But I thought then, and still think, that this particular legal factor has bulked too large in the practical question of the formation of policy. It is a part of our Constitutional and historical tradition that the rôle of law is to set the terms and conditions within which, when a later political problem arises, the statesmen of the time should mould their own task of solving the essential political problem; that is, of finding the solution which is most to the interest of those concerned. It is not that the law itself should dictate directly what that solution should be. In the present case of Rhodesia the dominating objective should surely be to maintain at least the civilisation, which, if imperfect, is better than the country has ever known before, and much better than it may easily become in future.
But in the present situation there is one question of illegality beside which that of U.D.I. falls into microscopic insignificance. We have all listened to, and been greatly impressed—though some may also have been much upset—by what my noble friend Lord Salisbury quoted Mr. Dean Acheson as having said. I should like to say just this. If it had been asked anywhere, before this Rhodesian affair arose, who was the best living person in the world to express an influential and authoritative opinion on such a question, I think the universal opinion would have been Mr. Dean Acheson, in view of his great legal experience, of his eminence in his profession and world-wide reputation, combined of course with his having held the very responsible position of Secretary of State in his own country. It must therefore have come, I think, as a very great shock to those who have supported the policy of the present Government in initiating and securing a resolution in favour of mandatory sanctions to be told by such an authority that, in his view, it is definitely illegal under the Charter of the United Nations. Well, my Lords, I have little more to say on that point, except that, while I will not now quote other authorities of great world reputation in support of the same opinion, I could do so; but I think that what
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has been quoted by my noble friend Lord Salisbury is enough to make this point.
I find it difficult to believe that anyone who seriously asks himself the questions I have raised can fail to come to the conclusion that the Government's policy as it is should now be changed. But we deceive ourselves, as my noble friend said, if we think that we have a choice whether we should continue the dependence of Rhodesia or whether we should grant independence. Independence is there, and nothing we can do can take it away. That is a basic fact which I think we ought all to face. Where we have a choice is about the conditions under which that shall take place and the consequences afterwards. It is still possible for us to terminate the question, to agree to independence in such a way that we shall be on good terms both with the previously loyal and very devoted citizens of Rhodesia itself and also with the many other countries with whom we should like, and with whom it is in our interest, to remain on good terms. That is still within our choice. It is still possibly within our choice to act in such a way that Rhodesia, in maintaining her independence, will do so not as a republic, but remaining a member of the Commonwealth and a loyal subject of the Queen. That may be within our power. But that is all.
May I trespass on your Lordships' time for another moment to speak in a rather wider perspective? At this time, when we are conscious that grave perils threaten every nation upon earth, would it not be a good thing to see whether we can use such influence as we still possess—reduced, indeed, but still not without significance—not to maintain or leave in existence this open sore, but to do our modest best to help to save the world?
5.39 p.m.
LORD MITCHISON: My Lords, I must start by admitting a rather odd kind of personal interest. My wife was recently travelling towards Botswana—where they are getting along quite nicely, in spite of all the nasty things we have been hearing about the emergent countries—and was searched by the Rhodesians in a train. These are our faithful friends. The two girls who carried out the search did it quite nicely.

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They found upon her the portraits of her grandchildren, who I can assure your Lordships are a very dangerous lot indeed, and something even worse than that—two portraits of an Anglican Bishop in full canonicals. It sounds a laughing matter but it had very serious results. She was promptly declared a prohibited immigrant. She still is. Some time ago she was declared a prohibited immigrant in South Africa, too—but all the best people are that, and the Rhodesian distinction is just a little more exotic.
Now, my Lords, having declared my personal interest in this enlightened country and the people who are now running it, I am wondering why we are having this discussion to-day. What is it all about? I had a great deal of sympathy with the noble Lord, Lord Henley, who got up at the beginning of the debate and said he did not see the point of it at the moment. Neither do I. I have been listening to all the speeches of the noble Lords who are colloquially known as the "Rhodesian Lobby", and no doubt they are demonstrating once again to their entire satisfaction that the British Government can do nothing right. But what else are they suggesting? I love them very much in many ways. I should not like to see them disappear completely. They really have some value in the world. But, of course, if Mr. Ian Smith picks up the Lords Hansard, which he always keeps by him (we heard this from one of the speakers) I am not quite certain how much attention he will pay to what his friends here are saying, because they have failed in one conspicuous respect. They have all said that the Government were wrong, but they have none of them said what the Government ought to have done.
BARONESS HORSBRUGH: My Lords, what about the last speaker?
LORD MITCHISON: They have walked delicately along the path towards a complete surrender to Mr. Ian Smith's régime. I wish the noble Lord would stop waving his hand—it puts me off.
LORD SALTER: My Lords, I was trying to remind the noble Lord of what the noble Lord, Lord Bourne, said just now.
LORD MITCHISON: All right, my Lords. The noble Lord, Lord Bourne, made some suggestions and I did not think much of them. We will leave it at that. But, seriously, in my view there has been no practical suggestion at all, and certainly not from any other speaker. We have just heard the noble Lord, Lord Salter, for instance, explaining a number of reasons why the Government were wrong, why the country was going to the dogs, why we were all going to be ruined; and I was waiting anxiously for him to tell us what we ought to do. It seems to me the problem is exactly as it was some time ago. If you choose, either side in this dispute—I call it no more than that—can surrender completely. Otherwise you negotiate and come to terms.
But, it is said, you cannot force people to terms by means of sanctions. This is a very serious proposition, if it is true. Of course sanctions will have difficulties at the end of them. So have wars. We have just seen an exceedingly successful war in another part of the world, and we are now seeing the difficulties that every war brings at the end of it. Sanctions do exactly the same. But do noble Lords opposite seriously think that war would have been preferable to sanctions? And if they do not (and I do not believe they do), then what alternative was there?
Look what we had to deal with. How slow noble Lords opposite are to recognise a clear moral question when they see it! This is a simple question of right and wrong, as I see it. The economic effects are extremely interesting and extremely important. They are rather difficult in many cases. There is no doubt that sanctions are working to some extent. It is difficult for those of us who at any rate have not got much more detailed information than most of us have, to know how far the success is going. We are told that their position is not as bad as all that. It is true that there is a shortage of whisky, but the Smith régime say that Switzerland is still dealing with them, and I suppose the inhabitants of Salisbury are drinking Swiss whisky. I agree with the noble Marquess that this will not bring them to their knees. It may knock them flat, but that is another matter.
Is not this a perfectly plain moral issue, and has it ever been anything else? Here

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is a country where a very small minority of people are ruling by force a very large number of Africans who have practically no rights, and the few rights which they have are going to be reduced. It is a police state. There are Smith's spies in all the towns and villages all over the country, and there is no sort of equality of treatment. The amount spent on education is no doubt comparatively large, but that is only because there are so many Africans, and there is no opportunity at the end of the education. This is plain apartheid and nothing else, and if it has not gone quite so far as South African apartheid has it is going there as fast as it can gather momentum.
In a case of that sort, is it right that people should provoke a debate here, simply in order to say that the Government are wrong? And do they really mean that the only alternative is to support a régime of that kind? Are they really supporting, among "our faithful friends", as the noble Marquess has called them, an apartheid which we have condemned again and again in South Africa? And if that is not what they are supporting, what is it that they are?
VISCOUNT MASSEREENE AND FERRARD: My Lords, may I interrupt the noble Lord? The noble Lord has said that the Smith régime is holding the country down by force. If that is so, is it not remarkable that Mr. Ian Smith is guarded, I understand, by only two sentries at his house, whereas in Tanzania and in other African countries—for instance in Zambia—the dictators of those countries, to which we have given majority rule, are guarded by between 200 and 400 troops at their palaces, with machine guns, barbed wire, searchlights, and similar paraphernalia? My Lords, who is holding the Africans down by force?
LORD MITCHISON: My Lords, that was a very long interruption. I could understand most of it, and so far as I did, I did not think it was very relevant to what we are talking about. I am going to take leave—and I am sure the noble Viscount is the last person to take offence—to postpone the answer to it until I have had the opportunity of reading it in full in Hansard.
If I may now continue, surely the practical position is perfectly clear. We
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had conversations on the "Tiger", and those conversations involved at that stage, I think I am right in saying, the abandonment of NIBMAR. They resulted in six principles being laid down by the British Government, and I wish that somebody out of the Rhodesian Lobby would tell us how many of those principles they object to, because Ian Smith's régime would not accept them. The first one was this:
"The principle and intention of unimpeded progress to majority rule, … would have to be maintained and guaranteed."
We were told by one noble Lord that he did not object to that one. If he does not object to that, what about the next one?
"There would also have to be guarantees against retrogressive amendment of the Constitution."
Is there any objection to that? Is it an altogether unreasonable thing to ask from people who had already broken the Constitution by the U.D.I. or the I.D.I., whichever you like to call it?
The next one was:
"There would have to be immediate improvement in the political status of the African population."
Perhaps that is what the Rhodesian Lobby are really objecting to. They want them kept down—well down.
LORD SALTOUN: My Lords, did the noble Lord hear Lord Bourne's speech.
LORD MITCHISON: Yes, I did.
LORD SALTOUN: The noble Lord, Lord Bourne, dealt with precisely that point.
LORD MITCHISON: My Lords, I heard that speech but I did not think much of those suggestions. They were his own and nobody else's. I have had to say this twice, and I do not want to waste time answering one noble Lord when a good many others have spoken.
There would have to be progress towards ending racial discrimination. Do they object to that? The British Government would need to be satisfied that any basis proposed for independence was acceptable to the people of Rhodesia as a whole. Do they object to that? It would be necessary to ensure that, regardless of race, there was no oppression of majority by minority or of minority by majority. I should like to know from

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some noble Lord—particularly from the noble Marquess when he replies—which of those principles they really object to.
THE MARQUESS OF SALISBURY: My Lords, perhaps the noble Lord would say something about the proposals for the interim period, which were the point at which the talks broke down, that is, the interim period before the "Tiger" constitution was put into effect. Perhaps he has not heard about it.
LORD MITCHISON: My Lords, I have read the whole of this Book. If in fact the Smith régime accepted those six principles there would be no serious difficulty, at any rate in my opinion, and I hope in the noble Marquess's opinion, too. May I take it from the form of the noble Marquess's interruption that he and his friends accept all those six principles?
THE MARQUESS OF SALISBURY: My Lords, I made it perfectly clear when I spoke in this House on the "Tiger" talks that the interim proposals were the ones which I thought made it impossible for the Rhodesians to accept; and this is what the noble Lord, Lord Mitchison, conveniently ignores.
LORD MITCHISON: My Lords, I am not conveniently ignoring anything, with respect to the noble Marquess. I hope I shall never agree with him and that I shall always like him. I should like an answer to this question, because this is the fundamental thing, and it is not, as I see it, on the intermediate proposals, but on these principles that the breakdown has occurred.
THE MARQUESS OF SALISBURY: No, that is not true.
LORD MITCHISON: I have heard noble Lords opposite saying that there was some profound disagreement in principle. It must be on one of these things, as I have said.
THE MARQUESS OF SALISBURY: The noble Lord is not right. I do not propose to interrupt any further, because he was good enough not to interrupt me, but I do not agree with him.
LORD MITCHISON: Well, my Lords, I cannot carry this any further. But I do not think this is a question of the interim period, I think it is a question of a profound difference of view. I
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think the difference of view is enshrined in the continued refusal by the Smith régime to accept these six principles; and it is perfectly obvious that they do refuse to accept them because at the moment they are doing things which nobody who accepted these principles could possibly support. What I am asking the Rhodesia Lobby opposite, and would very much like an answer to, is whether they do or do not accept those six principles.
As to NIBMAR, at the end of these discussions the Prime Minister pointed out quite clearly—and this is in the Blue Book—that this was not an issue, and he also pointed out that if these principles were not accepted (and that was what he was talking about) he would have to go back to NIBMAR. This is really a method of adapting NIBMAR, something that went beyond what had been said at the Commonwealth Conference. In those circumstances, I cannot see the object of this debate to-day. If noble Lords opposite are prepared to say that they, like the vast majority of people in this country, accept these principles and understand that if they are not going to be accepted then we shall have to go back to "No independence before majority African rule", well and good. Otherwise, what is it? Do we depend on what the noble Lord suggested just now by way of proposals? If not, what are noble Lords opposite suggesting?
I said that this was a moral principle, and surely it is. We in this country have had to fight for freedom. I hear people talking to-day as though freedom for Africans was no freedom, had no moral value; that you had to weigh the cost, count the pennies, recognise no virtue in it. Surely in this country we know better than that. Surely we know that it is dead wrong to deprive people of their liberty year after year, to imprison political opponents, to censor the Press, to send police spies about in the country, to pervert justice as it is being perverted in the case we heard to-day, to pay no regard to the opinion of the rest of the world as to whether you are a Government or not, to pay no regard to the opinion of the rest of the world as to the circumstances in which peace and security in the world can be endangered. All this seems to me plain straight

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tyranny, tyranny by a majority of not very satisfactory or faithful friends, white in colour, who live in a country peopled for the rest by an overwhelming majority of Africans who ought to have freedom just as much as any other human man.
VISCOUNT MASSEREENE AND FERRARD: My Lords, what guarantee can the noble Lord give that majority rule does lead to freedom in Africa, as he has just said, and for that matter in Asia? What guarantee? He made the most wild statements.
5.57 p.m.
LORD SINCLAIR OF CLEEVE: My Lords, for many years I was connected with a company which had a considerable stake in Rhodesia. That connection no longer exists, but I still have an interest in and a feeling for the country, and I hope that I will have that as long as I live. In spite of, and not because of, the first part of the speech of the noble Lord, Lord Mitchison, if I may say so, I believe that the feeling predominant to-day in the minds of all those—and there are many of them in this country—who really care about Rhodesia, is the earnest hope that at this eleventh hour (and it is the eleventh hour, with the report of the Constitutional Commission due in a matter of weeks and not months) some way will be found of breaking the deadlock. I am very conscious of the fact that the last thing those of us who care for Rhodesia would want is that anything should be said in this debate to-day which, if reported in Salisbury, would tend in any way to complicate or prejudice the discussions which the noble Lord, Lord Alport, is about to undertake, and I will try to avoid any such statement.
I have never myself been able to hold a brief for U.D.I. Yet I share the fear of the lasting harm that would be done by accelerated majority African rule. I have always felt, and I still feel, that the right objective must be progress, and progress as sure and rapid as possible, towards a truly multiracial society. That, of course, predicates increasing African participation in government. Despite some statements attributed to those who are understood to be on the extreme Right Wing of the Rhodesian Front, from such experience and contacts I myself have had I am convinced that the
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great majority of Europeans in Rhodesia believe that the best hope for the future of their country lies in rapid progress towards a truly multiracial society founded on a sound economy.
From my own experience, necessarily in this respect somewhat limited, and from the opinions I have had from those whose experience is much greater than mine, I think it is true to say that in general—and I emphasise in general—the African child is extraordinarily quick to learn; and equally (though of course there are exceptions), in general the African adult is very slow to take responsibility. I certainly know of at least one company, who would be regarded as good and enlightened employers, who have really tried to make appropriate opportunities for, and to give training to, Africans who they thought might be suitable for positions in junior management. They found it hard to get men prepared and able to go further than supervisor and foreman. This is merely symptomatic of a stage in evolution, and education is an important part of that process. But I think the fact, or opinion, that I have just expressed is something that we can well bear in mind.
Inasmuch as from time to time assertions are made that in recent years, before and after U.D.I., Europeans have been positively retarding African advancement, or, particularly since U.D.I., have been pulling out and shirking their responsibilities, it might help to get things into perspective if I were to give a few facts. First of all, in the last three and a half years there has been no significant change in population. There has been an increase of 4 per cent. in the number of Europeans and of 7½ per cent. in the number of Africans, and the relative proportions are still about 20 Africans to one European. In 1966, there was a net decrease of some 16,000 in the number of non-indigenous African males. This is interesting, but it is not too significant; it was due probably to fewer opportunities for temporary work under present conditions. But so far as population is concerned, the position is extremely steady and the proportions of the two are unchanged.
Secondly, as regards education, the enrolment of Africans in schools continues to grow steadily. The annual rate has slightly increased since U.D.I. The great majority, of course, are in primary

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schools. In the last ten years the number in primary schools has risen from 369,000 to 672,000—an increase of about 85 per cent. But the number in secondary schools, which ten years ago was under 2,100, is now 15,600. Although that is still a low figure, judged by our standards, it indicates quite considerable and real progress; and when one considers the magnitude of the problem (and we have to look at this country dispassionately), the limitations of the resources, and the difficulty of rapidly increasing the number of qualified teachers, what has been achieved is by no means negligible, and compares favourably with other predominantly African territories.
Rhodesia currently spends about 18 per cent. of its budget on education. The budgeted figure for 1967 for African education is 11½ per cent. of the total Rhodesian revenue. Admittedly, that 11½ per cent. represents only £7 million, but it is a sizeable figure. In the University of Salisbury the number of African entrants is increasing both absolutely and as a proportion of the total. Out of the total registered of 970, which includes Europeans, Asians and Coloureds, as well as Africans, 24 per cent. are Africans. This makes a valuable contribution to the supply of teachers.
Thirdly, as I think the noble Lord, Lord Carrington, mentioned earlier, the cost of living has kept remarkably steady. In the last three and a half years (my noble friend was giving the figure for the last 15 months, I think) the increase in the Price Index has been just on 5 per cent. in total for each class, Europeans and Africans. I only wish that we could say the same here.
Lastly, the economy of the country has shown remarkable resilience. After 15 months of sanctions the gross domestic product has fallen by only 7½ per cent., after allowing for the slight increase in prices. We may deeply regret U.D.I. We may feel that detention without trial has exceeded the reasonable requirements of security, though it is not easy for us to judge the circumstances of it. We may rightly feel that there is still great scope for further improvement in African education. But I do not think we are justified in denigrating the genuine efforts that have been and are being made, particularly when one considers the number of Africans still living, and living not unhappily, under tribal conditions.
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Over a quite short period of history, 70 years—as one noble Lord said, for over 40 years of which Rhodesia has been self-governing—the inhabitants of that country (I am not here speaking particularly of Europeans) have contrived to build together a sound and prosperous economy. They have played their full part in two wars: two wars in which they were not threatened in the way that we were threatened. They have—and, strangely enough, this applies to a great many Africans as well as Europeans—a great pride in their country. I do not think they are going to be beaten to their knees by sanctions. As one speaker said, mandatory sanctions may be illegal, but anyhow we know that they are not at the moment effective. Our sanctions are certainly less ineffective and in so far as sanctions hurt, we have seen that they stiffen resistence and reduce, rather than increase, the chance of the sort of agreement on which the future of the country and its peoples, Africans and Europeans alike, must be based if it is to endure.
6.8 p.m.
LORD BROCKWAY: My Lords, I am glad to have the opportunity of following the noble Lord, Lord Sinclair of Cleeve, in this debate. I understand the deep feeling that he has for Rhodesia, expressed in the speech he has delivered. I particularly welcome the fact that he not only regretted U.D.I. but also spoke of the hope of a multiracial society being realised in Rhodesia. The term "multiracialism" may be interpreted in different ways. A society might perhaps be called multiracial which still had segregation of its communities. I hope that the noble Lord did not have that in mind—and I see by the way he shakes his head that he did not. I want to put to him this difficulty. All the present tendencies in Rhodesia among those who govern, and among the white population at their meetings, are against progress towards a multiracial society. One of the disturbing facts in recent months has been the increased tendency towards segregation and towards adopting the South African system of apartheid. It is that tendency—a tendency reflected in many measures of the Rhodesia Government, in speeches by members of the Government, and particularly in resolutions carried at conferences of those who support the Government—it is this

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development which makes us so fearful of the future of Rhodesia whilst it remains under a Government of the present character.
Our debate to-day reflects a difference of opinion which is more fundamental, perhaps, than any which normally arises here. My noble friend Lord Mitchison has said that it is a moral issue; a matter of right or wrong. I think that those of us on both sides in this debate feel that it is an issue of right or wrong. The moral issue, as it appears to us, is this. We believe that all human beings, whatever their race or their colour, are in personality equal; and we do not believe that any race because it happens to be of a particular pigment of skin has the right to rule over those who do not share that attribute. And that is the essential issue in Rhodesia to-day. It is the issue that a white minority believes that it has the right to govern a large non-white majority. Those of us who accept the principle of the essential equality of all human beings cannot accept the system which is being applied in Rhodesia and which is proceeding even to the more extravagant forms of the Republic of South Africa.
LORD GRIDLEY: My Lords, I thank the noble Lord for giving way. Is the noble Lord not, in effect, bringing racialism into this matter? Is not the most important thing, and the most important issue, what is the best form of government for Rhodesia?
LORD BROCKWAY: I am bringing racialism into it because racialism is reflected in the government of Rhodesia. People there have the right to vote not on an educational test; people there have the right to political equality not on the grounds that they are of a certain character. The discrimination which takes place is a discrimination based on race. It is the difference between the whites and the non-whites. I am not bringing racialism into the debate. Rhodesia itself is bringing it. Rhodesia is a racialist society. It is racialist in its government, its administration, its segregation, its Land Apportionment Act, its residential segregation, its refusal to allow children of different colours to be at one school. It is Rhodesia which is racialist, and I am not introducing racialism when it is not there.
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I should like to turn to the suggestion which has been so heavily criticised by some speakers—the present decision that there should not be independence in Rhodesia before majority rule. The noble Marquess in opening the debate described it as "irresponsible". All through history Governments in this country, whether they have been Conservative or Labour, have recognised that principle when they have extended independence to another country. The only exception has been South Africa; and how disastrous have been the results in the humiliation which is poured upon the non-white majority by the system of apartheid there! Naturally, it is our fear, as we see the conditions in Rhodesia, that there will be repeated there exactly the same tendencies as have taken place in the Republic of South Africa.
I want to say a few words about the visit of the noble Lord, Lord Alport, to Rhodesia. I was a little surprised that the noble Marquess in his speech described it as an unsuitable choice because Lord Alport had criticised Mr. Ian Smith. I should like to ask the noble Marquess and those associated with him: who, except members of the small group to which they belong, has not criticised Mr. Ian Smith? The Conservative Government criticised Mr. Ian Smith in very strong terms when they had to face this issue before a Labour Government came to office. Labour have criticised him, and so have the Liberals. Is the noble Marquess really suggesting that anybody who has criticised Mr. Ian Smith is not a fit representative from this country to carry on any negotiations in Rhodesia? I would add that I am not very hopeful about the results of his visit. I am certainly not hopeful if the condition which has been laid down by the British Government, and which so many of us support, that there should be no independence before majority rule is maintained. It is perfectly clear that Mr. Smith and his colleagues will not accept that condition.
I should like to ask the Minister who is to reply to this debate whether he saw in last Monday's Guardian the alleged terms of a letter which Sir Humphrey Gibbs, the Governor-General, has sent to Mr. Harold Wilson, the Prime Minister. Before I say a word of criticism let me say this: I have a tremendous admiration for the way in which

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Sir Humphrey Gibbs has carried out his duties in Rhodesia during this difficult period. He has shown a courage which all of us must deeply respect. But I was a little disturbed by the terms of this letter, as they are reported. It is not indicated how a confidential letter—which it must have been—from Sir Humphrey Gibbs to the Prime Minister came to be published; it suggests that the Secret Service of the Rhodesian Government must be very efficient indeed. What disturbed some of us was the statement that the Governor-General is urging Mr. Harold Wilson to withdraw NIBMAR, and to revise the time scale for achieving majority rule in Rhodesia; and, also, his insistence that further entrenched clauses should be introduced into the 1961 Act to reassure Europeans. I hope very much that this report is not true and that it will be possible to say so to-night.
I want to conclude with a feature of this discussion which I believe is more important than any other. We are thinking of Rhodesia, but it is not only in Rhodesia that deep feelings are aroused on this issue. I know Africans and African leaders from most of the territories on the continent. It would be difficult to describe the disillusionment which is already in their minds as a result of weakness of policy towards the Smith régime in Rhodesia. That sense of disillusionment will become deeper and wider, if there is the beginning of a suggestion that we should surrender to the illegal independent Government in Rhodesia. Mr. Harold Wilson gave his promises to a Commonwealth Conference. He has indicated that if there is to be any revision of terms they will again be submitted to Commonwealth members. I wonder whether the Minister could indicate to us whether there is to be a meeting of the Commonwealth Prime Ministers in conference this year, as there was last year?
I love the Commonwealth. I have tremendous pride in the fact that it has developed from colonial States into self-governing States. But if we appear to desert the principle of human equality, and the right of a majority to govern a country when it becomes independent, then the continuance of the Commonwealth itself will be in doubt and will be in danger. The Asian and African coun
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tries which are in our Commonwealth, who are already feeling intensely on this issue, will feel that the very basis of the Commonwealth is being destroyed.
My earnest appeal to the Government tonight is to maintain the principle on which they have stood, to maintain the equality of all human beings, and to think not only of Rhodesia but of the effects of any possible change of policy upon all the peoples of Africa, upon the peoples of Asia, and, indeed, upon so many peoples throughout the world to whom this principle is dear.
6.25 p.m.
LORD MILVERTON: My Lords, may I begin by saying that we owe a deep debt to the noble Marquess for having made this debate possible to-day? I feel that this is a most opportune moment to review the situation, whose termination may come rapidly in a way which would not be acceptable or agreeable to us. Therefore I want not to go into any details, but to try to sketch some of the background, emotional and otherwise, which those whose privilege I hope it will be to reach reconciliation with Rhodesia in the early future will have to take into consideration and deal with.
The subject matter of our debate to-day has occupied the attention of this House over the past two years on many occasions. Therefore I regard it as impossible, and indeed not desirable within the acceptable limits of short speeches, to go into any of those details again. I remain as sad as ever at the miscalculation and misunderstanding, and perhaps even the personal prejudice, which has disfigured the British Government's record in this matter. Time is running out, and the hope of a statesmanlike reconciliation has almost faded. So we ought to take this last look at the facts of a situation which need never have reached this pass, and emphasise that it is here, in Whitehall, that the blame lies, and it is here, in Whitehall, that a change of heart and the process of healing statesmanship can even now save us and Rhodesia from what I regard as an impending disaster.
I know that I am not in a position to argue legal questions, but I imagine that the way in which Mr. Smith and his Cabinet look at these matters is this. To begin with, the Legislature of Rhodesia was lawfully elected under a Constitution

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lawfully established, and that Legislature presumably remains a lawful body until it is lawfully dissolved. They regard themselves as the legal Government vested with the control of the machinery of government in Rhodesia; and that Government has constantly opposed the British Government's insistence that it should surrender its powers to a new Administration.
It does not accept, and never has accepted, the contention that it is an illegal Government or an illegal régime. So until such time as the form of the Constitution for an independent Rhodesia has been determined, it sees no point in discussing the question of what the British Government is pleased to call "a return to legality". Nor could it consider for a moment the abject surrender demanded by the British Government, leaving itself helpless in their hands with the British Government free to go back on all the proposed constitutional amendments and to do whatever they pleased. That is really the answer to the point which was put forward by the noble Lord, Lord Mitchison, earlier in this debate.
For 43 years Rhodesia has had responsible self-government, and its record stands out above practically all the rest of Africa for contented and happy inhabitants with—as I think was mentioned by the noble Marquess—a lower proportion of police to population than there is in Britain. In recent years, particularly, much attention has been given to helping the education and the practical ability of black African cultivators and farmers, and excellent relations exist between those Africans—who, after all, constitute the bulk of the community—and the Ministry there. In addition, the Indaba of Chiefs called by Mr. Smith was a far-reaching and sincere attempt to sound the broad feelings of the tribal masses on the independence question, and had the British Government been better informed on the general Rhodesian outlook and on what was possible, they would have accepted the validity of that lndaba, as those of us who happen to know something about the atmosphere and conditions in Africa would readily have done.
The Rhodesian Government has expressed a determination to keep the Government of that country in civilised hands,
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whether they be white or black. They have not said, "There shall never be a black Government". They merely insist that the Government in their country, so long as they are in any position to affect it, must be a civilised Government. Admittedly, my Lords, that means that for an immediately uncertain future the Government must remain largely in the hands of the white Africans. But is this so unreasonable a determination? According to conservative estimates, well over a million people have died by violence in Africa North of the Zambesi in this decade alone—and the end is unfortunately not yet. This takes no account of the numberless thousands who have died of starvation and disease; and, as Mr. Du Pont has pointed out, most of Africa to-day is sick—sick of a contagious disease caused by the germ of responsibilities prematurely granted or assumed and spread by the winds of change. This germ is known as "immature majority rule", and it is with this germ that the present British Government seeks to infect Rhodesia.
It is quite obvious that the British Government and their allies in the sanctions war are in no way concerned with the wellbeing of Rhodesia or Rhodesians, whether they be white or black, despite their assertions to the contrary. Sanctions, if they bite as Rhodesia's enemies hope, must first affect the African. In fact, one could almost legitimately surmise that the object of sanctions is to upset the harmony between African and European which has existed in that country since the turn of the century, and never more so than to-day. Rhodesia has been fighting the battle against ignorance to the best of her ability with her educational programme, against disease very successfully with her health services, and against poverty by developing her resources, agricultural, mineral and industrial. Surely it is almost a criminal thing for the present British Government and the United Nations to ignore all this in favour of crushing a small, peaceful country to salve the wounded pride of the British Government.
In Rhodesia, it is white Africans who pay over 90 per cent. of the general taxes, and it is their money which has to pay for African schools, hospitals and other welfare services. This means that 230,000 white Africans have to provide not

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only for themselves but for 4 million Africans of the other kind—half a million of those from countries outside Rhodesia. All this has been achieved in 43 years of self-government by their own unaided efforts—that is, unaided from this country—while during the past two years Kenya has had £20 million given to it in aid. My Lords, nearly everything the African has in Rhodesia to-day is due to the energy, enterprise and ability of those of European origin. Education is far more advanced than in any other black African State. I could give the figures—and they are very startling figures—but they have been given already, and I will not bother the House with them again except to say that Ghana, Liberia, Ethiopia and other countries have nowhere near reached the same standard. It is the same with the medical services. I could give those figures, too, but I will not bother the House with them at the moment.
The present British Government are spending millions to destroy everything that the Rhodesians have built up. The vindictive imposition (I am bound to use that regrettable adjective) of punitive sanctions is meant to do just that. I have said nothing about the immense damage, much of it likely to be permanent, being done to British trade by the fratricidal folly of this policy. Mr. Wilson and, I think, the noble and learned Lord the Lord Chancellor to-day, have declared that the Rhodesian question is a moral issue. Is it moral to set out to destroy a Government that was elected by an overwhelming majority of the electorate? Is it moral to seek the destruction of a model African Administration merely because the élite that runs it is white? This is the real moral issue connected with Rhodesia. The Prime Minister's attitude is apparently based on a confused type of racial prejudice that is all the more dangerous because, since it is directed against a minority group of his own race, he feels free to pursue his vendetta.
Perhaps the real moral issue arising from Rhodesia is not the one claimed to have set the British Government on their intemperate course to force the country to its knees. The true moral issue is whether the Africans stand a better chance now of a civilised existence under a white Government than they would under a black one: for that, in the end,
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is the only test whether the civilisation we speak of is in fact worth anything at all. And for those who think it really has meaning, this is the answer on the moral issue that has been clear from the start. But is there any morality or justice in a policy which would be immediately reversed, shall we say, simply if Rhodesia's white Africans were turned into black ones overnight?
It was Mr. Harry Oppenheimer, I think, who, in a recent speech, pointed out that a lot of harm was done by the habit of equating the name "African" with the black African. In Rhodesia there are something like a quarter of a million white Africans whose home is Rhodesia and who have every right to call themselves Africans. One might ask: Who is really on the side of the people in Rhodesia? What is the African reality? Is it those who have worked progressively for their welfare and higher standard of living, and have done that until they have placed them far out in front of the peoples of almost all the other African countries in both these matters? Or is it those who, against all the evidence of the rest of Africa to-day, think they would be better off if all of them had the vote at once? My Lords, universal suffrage is the Last Sacrament pronounced by the High Priests of Democracy over Africa in our day. There is no civilised alternative to Mr. Smith's Government today. The Prime Minister's policy leads straight to a premature black domination, usually followed, in Africa, by military rule or chaos, or a mixture of both.
Doubt has been expressed about the real aim of the present Government. The Prime Minister claimed to contain and isolate a purely British and Rhodesian problem by the deplorably dangerous decision to unload it on the United Nations. This, to me, is an incomprehensible action. The treatment of Rhodesia by the United Nations is a blatant violation not only of the United Nations Charter but, more important still, of the principles of justice and fair play. The United Nations appears, under the influence of ambitious schemers, to be drifting away from its Charter and trying to become a dominant world Government. It is also interesting to remember that among these opponents of minority rule—about which we hear so much—are

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37, at least, member nations of the United Nations who themselves have Governments based on minority rule.
Mr. Wilson has talked of a "bloodless war of attrition." I am tempted to quote part of the comment of the Anglican Dean of Gibraltar on that. I think it is useful, seeing that we are reviewing the situation, to take note of some outside opinion, that of qualified people, of the situation. The Dean opened an address on, "Peace in Rhodesia" with the claim that the observation of the Prime Minister in the House of Commons that the application of sanctions against Rhodesia was "a moral issue" gave him, as an Anglican clergyman, the right to pass comment in public on the action of the British Government. He said:
"No doubt, the legality of the action will be debated in the proper place, later on. I am concerned with the moral aspect. I venture to suggest that to millions of people in Britain, including a vast number of churchmen of all shades of opinion, this action appears not merely as immoral but as one of utter folly. Folly because it has laid the seeds of armed conflict possibly more effectively than any one action of a British Government in recent years."
He went on to say:
"Unfortunately it has the ring about it of aggression. And this, when the Prime Minister of Rhodesia has accepted the six points towards African majority rule."
Another view which I think is very relevant, part of which I shall quote, is that of a prominent American, the executive Vice-President of the Southern States Industrial Council, who recently visited Rhodesia to see what it was all about. He came away astonished at the British Government's treatment of that country. He remarked that Rhodesia would be all right if only Britain would leave her alone. He went on to say:
"Moreover, when it comes to my own country, the United States of America, I am absolutely flabbergasted, as the saying goes, why we should join in these economic sanctions. We have asked Great Britain to join us in economic sanctions against the Communist nation of Cuba, 90 miles off our shore; she refused. Now, we have asked her to join us in sanctions against North Vietnam, but again she has refused—to such an extent that more than 50 per cent. of North Vietnam's foreign trade is being hauled in British ships.
"It is incredible, therefore, and a literal disgrace, that we would join Britain in sanctions against a friendly anti-Communist nation like Rhodesia. The people of Rhodesia are determined, resourceful and plenty capable of build
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ing a strong, self-sustaining nation if left alone to work it out for themselves."
Incidentally—and I think this is very relevant—in view of the way in which we scatter our largesse he later went on to say:
"If Rhodesia had a certain amount of Communism in its make-up—which it does not have—we might see the United States pouring foreign aid into Rhodesia by the millions. Instead, being a friendly, anti-Communist country, we join in making it hard for Rhodesia to build a strong nation."
My Lords, one final word on trade. Britain is learning the hard way that it does not pay to make trade one of the tools of war; in other words, to damage our own financial position in trying, probably ineffectually, to ruin Rhodesia. The persistently belligerent attitude of the British Government has done immense damage to the whole pattern of Anglo-Rhodesian trade, in the sense that the population is now pointedly refusing to buy British products, as has been mentioned by other speakers this afternoon, in instances where those of other countries are available. The damage to British trade is therefore likely to be permanent. Perhaps, instead of making protests in various places, it would be better to bring home to the British public the cost of our present policy; and it might be worth while for business houses, who are going to be the great losers, to spend some time and money on informing the public.
The high-souled claim which has been made from the Front Bench that the Government are unavoidably acting on the highest principles scarcely bears a moment's examination. But so little time is left before irrevocable decisions will be made. While there is yet time we make a last appeal to the Government to revise their stubborn refusal to put the vital common interests of the people of this country and of the people of Rhodesia, black and white alike, before injured pride and suicidal economics. I think the South African Government is right in holding that trade boycotts and economic reprisals never contribute anything to solving international problems; indeed, history clearly shows that they make those problems more serious.
My Lords, I have finished my brief sketch of the situation as I see it. I emphatically believe that an agreement between Britain and Rhodesia, an honourable agreement acceptable to both sides

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and to informed opinion throughout the civilised world, could easily and rapidly be reached if negotiations were kept, as has been indirectly suggested already to-night, on the level of high policy and human realities, and raised altogether from the sphere of personal prejudice and the slogans of international pressure groups, and avoiding also getting buried in detail. We pray that the light of statesmanship may yet illumine all of us—and especially the Government Front Bench. The Government have made a mistake over Rhodesian policy. I hope that they will now try a more humane approach. If they do that they will thereby perhaps win back some of the lost confidence in their management of these affairs. My Lords, we have been told that:
"There is joy …in Heaven over one sinner that repenteth—"
There is ample room for the Government of this country to earn a communal benediction of that kind.
6.50 p.m.
BARONESS GAITSKELL: My Lords, I hope that the noble Lord, Lord Milverton, will understand why I do not follow him in his argument when I say that I could not disagree with him more. However, I wish to refer to one point in his speech. I am always shocked when Europeans and people in the West point to the killing that goes on in the Continent of Africa when we know— I am not very good at figures—that in the last war there were, I think, 20 million dead. I do not know the figure for the First World War. Perhaps the noble and gallant Lord, Lord Bourne, knows the number of dead in the First World War. So I do not think we can stand in a white sheet and talk to Africans about cruelty and killing.
Although I have the greatest respect for the noble Marquess, Lord Salisbury, I cannot honestly say that a debate on Rhodesia at this moment is likely to be really practical; though of course we have aired our views, and as the House of Lords Hansard seems to be under the pillow of Mr. Ian Smith he may get some comfort from it. I think at least we should have waited for the return of the noble Lord, Lord Alport. I know that some noble Lords opposite—the view has been expressed to-day—think that the noble Lord, Lord Alport, is too sym
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pathetic to the views of our Prime Minister to achieve anything in the way of a solution to this painful problem. I believe that even a harsh diplomatic exchange is better than no diplomatic relations. So I welcome another try at talks and wish the noble Lord, Lord Alport, success in his endeavours.
I was at the United Nations when the big debates on the Rhodesian crisis were taking place here. As noble Lords might imagine, the crisis had a traumatic effect on the General Assembly and contaminated and poisoned every question of human rights that we discussed. I have been refreshing my memory by re-reading the debates of December, 1966, in both Houses of Parliament. What struck me about those debates was that while there were layers of disagreement between Members of the Government and the Opposition, there was a stratum of agreement. For instance, there was really no unbridgeable gulf between the views of the Prime Minister and those of Mr. Heath once the wrappings of Party polemics had been stripped off the fundamental arguments. There was a large measure of agreement on the illegality of U.D.I. and no independence without majority rule. There were differences, but no insuperable disagreements, between the moderates in all three Parties. The serious schisms lay between the extremists on the Right and Left; the Left Wingers in the Labour Party, who were ready to go to the brink with South Africa, and the Right Wingers of the Conservative Party who were in favour of an independent Rhodesia with no prospect of majority rule.
Reading the account of the rendezvous between the Prime Minister and Mr. Ian Smith in H.M.S. "Tiger", I was again struck by the initial promise of agreement on the main problems involved. Of course, my Lords, there was a slight touch of comic opera about the meeting place, H.M.S. "Tiger", and when reading the verbal exchanges it did not seem to me too difficult to put them to music, especially Mr. Ian Smith's constant refrain. He kept saying that he could not commend the Prime Minister's proposals to his colleagues until he had convinced himself about them. But seriously, I believe that it was not Mr. Ian Smith but the extremists behind him who ruined the negotiations. It was

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quite clear that it was not Mr. Smith who really had the power in Rhodesia. Certainly Mr. Harold Wilson could not have gone further than he did—and some people think that he went too far. I think it was a tragedy that his moderation did not triumph.
Once the Labour Goverment had ruled out force, sanctions were the only alternative. I have a quite different idea about sanctions. One can argue about sanctions—the strength; the degree; whether they should be selective or mandatory, and how comprehensive they should be; whether they can work or whether they are a complete failure. I do not believe that sanctions are ever imposed (or if they are, they do not work) to bring a country to a state of collapse. The noble and learned Lord the Lord Chancellor has given us some details about the effectiveness of sanctions on Rhodesia, and other noble Lords have given their views. I have always thought that sanctions would inevitably be slow in action, and as the use of sanctions is a two-edged sword—as has been pointed out more than once—it seemed to me wise to be patient and wait until there was a change of heart or a compromise between the two countries concerned.
My Lords, I do not believe in instant solutions in matters of race discrimination, and I assumed that sanctions against Rhodesia would work slowly by a process of attrition; and I hoped, as I have said, that gradually there might even have been a change of heart among the Rhodesians. But though originally we said that Rhodesia was our problem, and ours alone, once it was decided to embark on mandatory sanctions after the Commonwealth Prime Ministers' Conference the matter had to be taken to the Security Council, because we could not have imposed effective sanctions on our own. I am quite aware that many noble Lords opposite have a great contempt for and impatience with the United Nations. I do not think, however, that they can accuse me of looking at the United Nations through rose-coloured spectacles. The United Nations, as I have said on more than one occasion, is going through a difficult and troublesome phase. In fact, I am as impatient of the anti-Colonial nagging that goes on in the United Nations as any noble Lord opposite, and of the continual harping on the evils of a past Colonialism.
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But anyone who is unaware and not in sympathy with the great drive among African peoples for more equality and justice has absolutely no historical perspective. They say that there is a tide in the affairs of men; this is not only a tide, it is a tidal wave that is sweeping over the African Continent. Some, like the white settlers in Rhodesia, may think they can insulate themselves and lock their doors against progress, but there can be no peace for their children and grandchildren in this course. Those white Rhodesians who have declared U.D.I. display what I call a fortress mentality. The first thing they do is to entrench themselves and turn themselves into a police State. They imprison and kill for political motives. Their Press is muzzled. All the blueprints are there for the police State. But in this nuclear age no fortress is impregnable. The principle of majority rule is absolutely crucial in our age and generation. The white Rhodesians can buy a few years of privilege, with cheap black labour and apartheid practices, but all the time they are sowing the seeds of a threat to their peace.
The Rhodesian Government have refused independence with justice for all the people in Rhodesia. One can hope that it will gradually dawn on them, perhaps, that Rhodesia need not tread the road of South Africa, where racial discrimination is the law of the land. Perhaps there will be a revelation that they still have a chance to be an example to the whole world of a multiracial, equal, democratic society, with justice to European and coloured Rhodesian alike. We are concerned about our Rhodesian friends, and customers, as the noble Marquess has said, but there is a firm moral principle here, and we underline the illegality of U.D.I. because if we did not adhere to the principle of no independence before majority rule, we should be giving a helping hand to race discrimination. That is the plain fact.
I should like to make a short comment on the speech of my noble and gallant friend Lord Bourne, whose speeches I always enjoy and find interesting. I agree with him that there must come a time when both Britain and Rhodesia must compromise, but I disagree with him on the compromise which he has suggested. There can be no compromise on this principle of unimpeded progress

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to majority rule, and I should like to know whether he really thinks there can be.
LORD BOURNE: My Lords, I think that the noble Baroness misunderstood me. I did not suggest giving way on the principle of majority rule, with which I entirely agree. My concession was on the new formula set up since the "Tiger" consultations of no independence before majority rule.
BARONESS GAITSKELL: My Lords, as I understood it the new arrangement was due to the fact that the six principles were not accepted by Mr. Ian Smith.
LORD BOURNE: My Lords, we could go on discussing this for a long time. I read one document in which Mr. Smith said that he did accept them. At any rate, that was not my concession. My concession was on the formula of no independence before majority rule, and then I returned with two concessions by the Smith régime, which I will not repeat.
7.5 p.m.
LORD MACPHERSON OF DRUMOCHTER: My Lords, due to another engagement, I should like, with your Lordships' permission, to leave before the end of this debate. I have already expressed my apologies to the noble Lord, Lord Beswick, and to the noble Marquess, Lord Salisbury.
Three months ago I once again visited Rhodesia. In the first instance I wished to ascertain for myself whether sanctions were really working and, secondly, if they were likely to succeed in future. We have been advised from time to time in this House, including by no less a person than the noble and learned Lord the Lord Chancellor, that the Government policy is now working. I can only suggest that those noble Lords who are still of that opinion should visit Rhodesia and see, as I did, that this policy has not only failed but brought about the loss to our competitors of what was an almost exclusive British export market.
I found no shortage of petrol or other commercial goods; nor did I see a shortage of luxury items, such as Scotch whisky—in fact, when I was there you could obtain any brand you desired. The only effect I could see was that a number of British products had been replaced by goods from such countries as Switzerland,
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Japan, Western Germany and France. I understand that some of the assembly factories built by our car manufacturers are now busy assembling Japanese cars. A number of goods, particularly in the machinery section, which would have been imported from this country, are now being made locally. During the whole of my stay I asked questions. I spoke to taxi-drivers, policemen, workers in various factories, managers of shops, bankers and, lastly, the politicians. What I wanted to know was whether the people of Rhodesia, black and white, were behind Mr. Smith. I received most emphatic assurances from everyone that they would support him in whatever he did.
I had discussions with various members of the Rhodesian Cabinet, in particular with the Minister and Deputy Minister of Agriculture. I wished to know whether the tobacco crop would bring them to their knees. They are definitely being seriously hurt in this field, but in the circumstances they are coping with the problem surprisingly well. As we have heard recently, they are preparing for the new season at a reduced level. When I was in Salisbury, diversification of their agricultural products away from tobacco was already well advanced. Undoubtedly they are having their problems, and their economy is suffering; but not to the extent that we are led to believe, and certainly not sufficiently to force them to submission or surrender. Being on the spot, I came to the conclusion that the only answer was to settle this problem by negotiation. Therefore I had various discussions with Mr. Smith and his secretary, and finally worked out a set of proposals which I think constitute a reasonable compromise solution.
My proposals were that the Governor should be be requested to call a General Election under the 1961 Constitution. The present Government would continue in office until the election of the next Government, which would be formed by the majority Party. The first task of the newly elected and legal Government would be the testing of the opinion of the people as a whole to ascertain whether or not they wished to have independence under the "Tiger" proposals. With the return to legality, the Press censorship would be raised and a tribunal set up to consider the release of detainees and restrictees, again on the

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lines suggested in the "Tiger" document. Lastly, in the event of the answer being, Yes, the British Government would grant independence to Rhodesia on the basis of the "Tiger" proposals, including the six principles and the 1961 Constitution.
Mr. Smith indicated to me that a solution on these lines would be acceptable to him. I also discussed these proposals with Sir Humphrey Gibbs, and he found them acceptable, provided that Her Majesty's Government concurred. This left only the agreement of the United Kingdom to complete the triangle. On my return to this country I submitted these proposals to Her Majesty's Government, and they were turned down. I was advised:
"As the Prime Minister has made clear, the constitutional future of Rhodesia can only be negotiated with a legal Government. I also remind you that Her Majesty's Government have declared that they would not be prepared to agree to independence before majority rule."
This reply leaves no room for, or possibility of, a negotiated settlement. And it does not appear that the Prime Minister has altered his stand from the position he took as leader of the Opposition—a stand made clear in his letter of October 2, 1964, to Dr. E. Mutasa, when he stated that:
"The Labour Party is totally opposed to granting independence to Southern Rhodesia as long as the Government of that country remains under the control of a white minority."
The view expressed in this letter, which has not been repudiated, was in my opinion one of the prime causes of U.D.I. I travelled extensively throughout Africa, and also covered some 300 miles on foot. I slept in native huts, and I shared what little food I had with my African companions.
I assure your Lordships that I am not a racialist, but I cannot help commenting on the views expressed on this subject by some noble Lords who appear to be completely distorted in some of their ideas and do not help the cause they are seeking to champion. What I cannot understand is why the East Africans' attitude to the Indians is acceptable, but the way in which the Ethiopians treat the Eritreans does not cause comment; and also why the Arabs of Khartoum can completely wipe out the Negroid people of Southern Sudan without any outcry.
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There are many other similar instances throughout Africa. Yet who could suggest that the treatment of black Rhodesians by their Government falls into these categories?
Again, in all the African countries I visited there was Press censorship of a kind—maybe not passed openly by the Government concerned, but nevertheless effective. Even in our sophisticated society our Government have to resort to "D" Notices. The Ethiopians handle this problem very cleverly: the only newspaper published is by the Minister of Information.
In conclusion, my Lords, I strongly and sincerely urge this House to tackle the Rhodesian problem with a genuine desire to settle the outstanding issues as fairly as possible for all concerned, and not to seek ways whereby a settlement becomes impossible or comes too late.
7.15 p.m.
LORD GRIDLEY: My Lords, I am sure there are many in your Lordships' House to-day who are grateful to my noble friend Lord Salisbury for introducing this Motion. Before I proceed on to the main outline of my speech, I should like to pay tribute to the speech which we have just heard from the noble Lord, Lord Macpherson of Drumochter. It is too early for me to make any comment on his speech, but I will certainly read it with great interest when it is published in Hansard.
I listened, with respect and some trepidation, to the remarks of the noble and learned Lord on the Woolsack. I would assure him that never on all the occasions on which I have prepared a speech to deliver in your Lordships' House—and they do not amount to very many—have I found one more difficult to make than the speech that I propose to make to-day. The reasons for that are these. I have spent 27 years of my life abroad, and I suppose I know more about the indigenous people of former territories—at least in Malaya and in certain other parts of the world—than possibly I do of my own countrymen Then I thought to myself: what contribution could I possibly make in a debate of this kind? I proceeded from that and considered that the best contribution I could possibly make was to state how some of us look to our friends abroad, and what the fears are of our friends

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abroad, and in that way perhaps throw out some reasoning and suggestions to the present British Government which might be helpful to them in coming to some satisfactory and honourable peace, simply because I felt that the issue we are discussing to-day is far more serious than just a question of scoring Party points. What we are discussing to-day is the very lives, the safety, the happiness and the future of the people in Rhodesia. This, to me, is a serious business.
Proceeding from that, I should like to say something about our Commonwealth policy. Have we, in fact, a Commonwealth policy to-day; and if so, what is it? I am sure it appears to our friends abroad, and those with whom we have been associated, that if they got into serious trouble these days we should not rush to their assistance, as we should have done in some former times. They probably see us as having no strength to do that now; they see us rather as sheltering under the umbrella of the United Nations.
The Rhodesian people—and when I speak about the Rhodesian people I am not talking about the white Rhodesians, but about all the Rhodesian people—have only to look at what has happened in two nations in Africa to see military dictatorship. No wonder Rhodesians are rather fearful and worried about their security, in case that, or worse, happens to them. Are not Rhodesians, in such circumstances, likely to think in this way: "It is all very well for you to give us orders and to pontificate on what form of Government you in your country think would he suitable for us. It is not you and your children who will suffer if Britain makes a mistake. It is ours who might suffer, and might possibly die."
There is another point before I leave that matter. In certain parts of Africa international Communism is always ready to exploit a dangerous situation or a possible breakdown. This also causes fear to the people who live far away from this country and by whom we think a certain form of Government should be accepted. If we cannot understand those fears—and I have put these points as I do not think they have been sufficiently understood in the past—then misunderstandings will continue and there will never be a real understanding and an achievement of peace between ourselves and Rhodesia.
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Running parallel to fear is the question of security. In our consideration of security I sometimes think we forget that we are on an island surrounded by water and comparatively secure. Rhodesia is not an island; it is a country surrounded by landlocked boundaries. We are not prone to subversion from within and then terrorism from without. Rhodesia has experienced this. So have I, my Lords. I was present in Malaya when our High Commissioner was shot and murdered. I witnessed the terror on the faces of the population when that sort of situation happens. Secondly, I was witness to their overwhelming relief when this was all over and we got on top of the situation. When terrorism strikes, if you fail to act quickly the chances are that your country will go up in flames; murder and terrorism of your civilian population is widespread in a very short space of time.
A part of the organisation you have to set up are security forces, and part of the organisation of a set-up of that kind is detention camps. We had them under the British Administration in Malaya. Mr. Smith has them in Rhodesia, and has been criticised in this country for doing so. I realise the arguments that it is wrong to detain innocent and guilty alike. This is unfortunate; but in the interests of the majority a small minority have to suffer, and in general terms one generally sorts out the innocent from the guilty and, as soon as it is possible, lets the innocent people go. A point I want to make clear is that I do not think it helps in the present situation when people living abroad, in the kind of situation I have described, see the very bitter criticism made in this country to the effect that Rhodesia is an excessive Police State and has detention camps. I am making these suggestions merely in the hope that the British Government will find it easier when they resume their talks with the Rhodesian Government.
Now it is vitally necessary that there should be peace between ourselves and Rhodesia. A continuance of this dispute a day longer than necessary does harm to ourselves and to that country. I think the atmosphere can improve if we frankly take a look at ourselves, as I have described ourselves, and understand the problems as seen, possibly, through Rhodesian eyes. I hope that the Prime Minister will find it possible to drop

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the condition that there can be no independence before majority African rule. I honestly do not think that this condition helps the situation. The issue really is the security of all the population of Rhodesia; and that means good and stable Government. In the old days we should probably have been able to go to the help of Rhodesia if she got into trouble when on her own. Today we simply cannot do it. They are on their own; and because they will be on their own in a dangerous world they are more anxious and worried than ever as to what form of Government they are to have. I am sure that this is basic to the difficulty. I think there could be peace on the basis of the "Tiger" proposals, excluding the condition I have mentioned.
I consider that this debate is a very serious debate indeed. This will probably be the last opportunity for discussing, or endeavouring to discuss—as I said, above Party politics—in a national sense an honourable peace in Rhodesia. It is real agony for me, because I have come to love the indigenous people because of my experience of them. To me, everything that has gone on—the discussions on racialism, religion, class—is completely irrelevant in the argument. In this country, on these subjects, intelligent people, in speeches and in letters to the Press, have done irreparable harm; so has the so-called world opinion and the cult of the brotherhood of man. We have to deal with the world as it is, not as we should like it to be. What matters at this stage is not whether there is to be an African Government, black or white, in Rhodesia, but that there should be a Government of that country now and in the future capable of giving peace, security and happiness to all of the peoples of Rhodesia. That, my Lords, is the paramount issue.
7.27 p.m.
LORD SEGAL: My Lords, the last time I took part in a debate on Rhodesia was over 18 months ago, in December, 1965, one month after U.D.I. Since then I have visited Rhodesia three times and have had some opportunities for studying the situation there at close hand. But since that time my views still remain substantially what they were in December, 1965. Perhaps I, too, may be allowed to declare my interest. I have no per
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sonal interest in Rhodesia whatsoever. I happened to be on three occasions in adjoining territories, once in Malawi as leader of a Parliamentary delegation, and twice in South Africa on private visits. I came to Rhodesia merely as an observer, and each time in a purely private capacity.
To-day I am profoundly glad that a new step has been taken in the sending out of Lord Alport; and we must all of us, whatever our views, hope that it may lead to a successful outcome. All we have to do now is to face the facts—and that is always a useful exercise. To-day our writ no longer runs in Salisbury, any more than it runs in Dar-es-Salaam. It is true that a Government of a different colour rules in Dar-es-Salaam. It is true that the Government there acted legally, though unilaterally, in breaking off diplomatic relations with this country. But, legally or illegally, we are "out" in both countries. That is a simple statement of fact.
What worries me so much to-day is that I fear we may be steering an uncharted course. What will happen now? What if our Government are proved correct in their forecast, as the noble and learned Lord the Lord Chancellor has indicated; and what if mandatory sanctions—which, after all, are our only weapon—succeed absolutely and complete economic collapse occurs in Rhodesia tomorrow, in a matter not of weeks or months but in one day? What will happen in Salisbury then? Can any of us be quite sure? Of course not—any more than we could forecast the outcome of the Arab-Israeli war. How many of us could have predicted an Israeli victory in four days?
LORD SALTOUN: My Lords, I did.
LORD SEGAL: My Lords, let us read again in Hansard our speeches in this House on the first day of this month and realise how utterly wrong we were only three weeks ago. And with Egypt defeated, not only economically but militarily, how many of us three weeks ago could have predicted Nasser's resignation? Again, how many of us could have predicted Nasser's return in triumph within 24 hours to lead his people in the midst of utter defeat? Why did this happen? Simply because, in their hour of defeat, the Egyptians had no alternative but to turn to Nasser.

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My Lords, we ought to-day to be in a somewhat chastened mood and somewhat subdued by recent events in our powers of prophecy. To me it is just as conceivable that, in their hour of economic defeat, the Rhodesians will still turn to Ian Smith as their leader. And let us remember that if sanctions were to succeed to-morrow Rhodesia would suffer only economic defeat, not military defeat as well. Rhodesia's military forces would still be intact and law and order would still be maintained. To-day we know, more than ever before, that military action by us is entirely ruled out. Public opinion in this country will not stand for the sacrifice of British lives to bring down the Government of Ian Smith.
So, if to-morrow Smith is defeated by sanctions, what then? Let us all be quite frank in the matter and admit that the answer is, "No one knows", any more than we in this House knew on June 1 the outcome of the Arab-Israeli war. All we can say here to-day is that we are convinced—at least those of us on this side of the House—that our cause is a just cause and, being a just cause, must inevitably triumph in the end—just as all the defeated Arab nations are saying in unison to-day in the Middle East. But if Smith in Salisbury is defeated tomorrow, shall we be able to control events from London? I very much doubt it. Events in Rhodesia will still then be controlled by Salisbury—not by London; nor by Lusaka; nor by the United Nations—just as events in Egypt in the midst of utter defeat are still being controlled by Cairo.
I am now merely trying to state the simple facts, not in any way trying to justify them. What then must we do? I believe we are right to have an entirely new look at the situation, to study the facts afresh, to see whether there is any meaningful change. That is always a healthy approach, and a realistic one. I am convinced that to-day U.D.I. is wearing a little thin; that the initial euphoria it engendered in 1965 is now cooling down. U.D.I., whatever else it may have done, has certainly not achieved independence for Rhodesia. Rhodesia to-day is, unfortunately, a political outcast, recognised by no one, not even by its political allies, Portugal and South Africa. Economically Rhodesia to-day is a helot State, forced to pick up the
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crumbs it receives from its economic allies, Portugal and South Africa; from its trade with West Germany, and through its illegal commercial relations with Zambia, Malawi and M. Boussac. To-day I believe that Rhodesia would be far more independent if U.D.I. had never been proclaimed at all; if it had still remained within the Commonwealth under the 1961 Constitution, as independent to-day as are Australia, Canada and New Zealand.
I was in Zambia when the "Tiger" talks took place, and I heard of Ian Smith's, "No" in Lusaka. To me the news was utterly incredible, against all the dictates of reason and common sense. But when I was in Salisbury a few days later I found that Ian Smith had gone to extreme lengths to justify his rejection of the "Tiger" proposals. The whole of the Rhodesian White Paper is a collection of forced arguments, based on extreme assumptions, engendered by uncertainty and lack of confidence. I believe that, even now, this uncertainty could be set at rest, all the arguments refuted one by one; and then Ian Smith's whole case for rejecting the "Tiger" proposals would fall to the ground.
What now can be done to help in the matter? The situation to-day calls above all else for cool heads, a measured calm and a reasoned approach. I believe that as a first step we must insist on "back to legality". Even NIBMAR need not be insurmountable, because independence is liable to many interpretations. Rhodesia to-day can be as independent as Australia, but it will still remain subject to the Crown. And even to-day, after all that has happened, Rhodesia yields to no one in its loyalty to the Queen as its Head of State. So that to-day Rhodesia could be granted virtual independence from Whitehall—as it actually is to-day independent of Whitehall illegally—but not absolute independence from the Crown.
From what I have been able to observe on the spot I believe that Rhodesia could gradually be persuaded to renounce U.D.I. (which has now become independence only in name and not in fact) if given certain assurances, and if the present situation is handled tactfully. My Lords, I believe that we should now declare openly what we intend should happen during the interim phase, the transitional period of four months, if supreme power

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were to be handed back to the Governor. Those terms must be realistic, and I believe that those terms would succeed to-day if the present Governor, in whom Her Majesty's Government continue to have absolute confidence, were empowered to rule from Salisbury and not from Whitehall.
7.38 p.m.
LORD FRASER OF LONSDALE: My Lords, I declare an interest in Southern Africa but not in the smaller, particular territory of Rhodesia, except, of course, the interest of a friend who is very much concerned because he lives and dwells and has business in Rhodesia's southern neighbour. I think we ought to be most grateful in this House to the noble Marquess, Lord Salisbury, for having initiated this debate. I am going to show one or two particular reasons why it has been of the greatest value, contrary to the view taken by the noble Lord, Lord Henley, and by the noble and learned Lord, the Lord Chancellor. I will come to that in a moment, but I intend to be very brief.
First, I should like to say a word about U.D.I. I share with other noble Lords in this House the disappointment at the Declaration of Unilateral Independence. But I will say this: that if it had not been declared we should not be so near a settlement in Rhodesia as we are now. Contrary to many of the things that have been said to-day, I think we are very much nearer a settlement than most people imagine, and my reasons are that I think Mr. Wilson wants to settle and he has the strength to hold his wild men in, and I think Mr. Smith wants to settle and is in the same position. I therefore do not look upon the position with quite the apprehension that some others do, though I entirely agree that matters should be dealt with as quickly as possible.
I have one observation about trade and morals. The noble Lord, Lord Mitchison, and others on the other side, suggest that it is immoral to put trade before policy. But, my Lords, trade is part of policy. Unless you are strong, or at least fairly strong, you cannot have a policy, or, at least, the means to carry it out. Therefore, to say we must cut off our nose in order to spite our face seems to me a ridiculous morality. It is far better to
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remain strong and healthy. Then I would observe that friendship follows trade, and anyone who interferes with trade anywhere in the world seems to me to be sinning against the light.
I said I thought the noble Marquess had done a good turn to all of us, including Britain and Rhodesia, by raising this debate, and the major reason for it is that I thought his speech, moderate as it was, and the Lord Chancellor's speech, important as it was, were both exceedingly well worth having at this particular juncture: the noble Marquess's because it was so moderate and gave a statesmanlike lead; the Lord Chancellor's for quite a different reason. He, of course, restated all the arguments why the Government are right and have been right all along. Everyone would have expected him to do that; although he said he was not going to, that is what he did, and he did it most cogently and agreeably, I thought.
But the important thing he said was this. Mr. Wilson's addendum to his dictum about no independence before majority rule has been viewed by Members in this House differently. The last speaker, for example, thought it important. The noble Lord, Lord Brockway, thought it important, the only moral aspect of the matter we must be concerned with, and so on. But the noble and learned Lord the Lord Chancellor, presumably with the Cabinet's knowledge, said that Mr. Wilson really meant it when he, Mr. Wilson, said that NIBMAR need not stand in the way necessarily if there have been substantial changes in the situation, and Lord Alport is going out to see if there are such substantial changes. That is vitally important. Mr. Wilson always says the thing both ways, but what is important is that a man of the responsibility of the noble and learned Lord the Lord Chancellor goes out of his way, in reading a passage from his speech—as I am sure he did most carefully and word by word; a speech written in advance and very carefully—emphasising that this door is not really closed. I regard that as supremely important, and that alone was worth the debate and may warm the heart of the noble Marquess.
I want to say the briefest word about majority rule in the hope that I may conceivably influence just one member of the other side or one person who reads what

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I say to take a more reasonable view about it. I have myself advocated majority rule in the country of Basutoland, now called Lesotho. I have advocated the institution of majority rule in the country of the Transkei, which is a territory within the boundaries of South Africa itself. It is true that the system of majority rule in those two countries is different, but it is only different in point of a few years of time. Ten years ago Basutoland or Lesotho had exactly the same type of majority rule that they now have in the Transkei. Both, I think, will succeed; and so, I think, will the majority rule in the "One man, one vote" that is going to be granted in South-West Africa. That, incidentally, will have the effect of doing what the United Nations wants done better than they could possibly do it, because of course they are not there to do it. So I have supported, and still support, majority rule in those territories in South Africa, in which I think it will work.
But I do not support it in Rhodesia; and if I can very briefly explain that, it might help to convince somebody. Rhodesia was probably the most advanced country in which majority rule has been tried, and genuinely tried, in the Federation, and Britain, I think, made a mistake when the Federation was allowed to dissolve. It is very strange that the noble Lords opposite and the Labour Party generally were so keen to dissolve it, when it was they who started it under Secretary of State Griffiths. However, they did, and we on this side are just as much to blame. That was a mistake. The next mistake was in dissolving this tripartite economic and political territory to give immediate independence to two parts of it and not to the other part—and the other part had been managing itself for over forty years. So we have made mistakes.
But it is no good looking backwards now. Yesterday is yesterday, and we must now look to to-day and to-morrow. Most unfortunately, the leaders of the African Parties in Southern Rhodesia did not fully co-operate with the Government, either in the time of federation or afterwards. They were given an extremely advanced chance for a people who had had no self-government before, an extremely advanced and sophisticated chance of taking part in Parliament and
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leading their people along, as they did ten years before in Lesotho and with such success. But they did not take it. They decided, "All or nothing, and we will not co-operate". We may all deplore this and deplore that but it is quite useless; deploring does not ever butter any parsnips—perhaps I have got it a bit mixed, but your Lordships know what I mean. Deploring is a quite useless exercise. We must try to look to to-day and to-morrow and see what we can do; and if we may assume that the Lord Chancellor to-day told us in effect that NIBMAR is so modified that Lord Alport has a chance, then think we may look forward with some confidence.
With regard to voting, I would point out that we have hardly learned to use the vote very sensibly in Britain after 600 years, and it is quite absurd to suppose we can teach people to use it in six years, and all experience has shown that we cannot. Is it not right that the Tory Party and the Labour Party should recognise that all the hopes with which so many of us went forward ten or twelve years ago have been frustrated by events and it is no good trying to follow that pattern any more? We must "play it longer" in the future, and that is what we must do here. I have very little more to say, except to give a quotation to Mr. Wilson which I hope will help him. It is taken from the 25th chapter of Proverbs and it says:
"Go not forth hastily to strive, lest thou know not what to do in the end …"
7.50 p.m.
LORD WEDGWOOD: My Lords, as one who views the present deadlock over Rhodesia with the concern, I would agree with many previous speakers that this occasion has offered a most useful opportunity for expressing opinions at a time when, as has been said so frequently to-day, there are possibly only a few weeks left before what may be irretrievable decisions are made. For that reason I think we should all be thankful to the noble Marquess, Lord Salisbury, for initiating this debate to-day, and for his continuing contribution to reason and a peaceful solution of this constitutional issue. May I say how much I agreed with what he said, and add my own congratulations to him for his staunch support for a young country which took its first

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steps during the Ministry of the grandfather of the noble Marquess, and which has shown such progress and promise ever since.
Much has been said on Rhodesia in your Lordships' House to-day and before, and in another place, as well as in the country, in the Press and overseas, and the cleavage of opinion, not always perhaps well informed, has been marked by increasing bitterness and, I fear, inflexibility of outlook. At this stage I think it is of no value to add to the political temperature, but it may be of some use to try to assess what have been some of the results of British policies towards Rhodesia, and to try briefly to relate them to the ever-changing circumstances in Africa and Britain.
I think the principal factor is the failure of sanctions to have the political effect of toppling the Government of Mr. Ian Smith and the Rhodesian Front. We can all agree, as so many noble Lords have said to-day, that sanctions have done, and may continue to do—though in my view possibly later on with diminishing effect—some harm to the economy of Rhodesia. We heard a few moments ago an oral testimony from the noble Lord, Lord Macpherson of Drumochter, on just how far the effect of sanctions has affected the shopkeeper in Salisbury. Other information has gone to show that exports are down, and some imports under embargo have not been entirely replaced from other sources. But there can be little doubt that it is just a question of time before Rhodesia's export and imports are adjusted to the nation's requirements; and the overall impact of sanctions, far from proving crippling to the point of public action against the Government of Rhodesia, has indeed had the opposite effect and united the people of Rhodesia far more firmly behind their Government than ever before. This is true of both black and white, and all personal knowledge of Rhodesia goes to bear this out.
So let us not misunderstand the position. To-day, Rhodesia is united on a broad front in face of the hostility of this country and any other countries who seek to destroy her independence or ability to choose her own course. Another result of sanctions, and the application of them by the United Nations at Britain's request, has been greatly to increase
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sympathy for Rhodesia, both here in Britain and in many quarters overseas, where there is growing disapproval of the manner in which Britain has handled the Rhodesian issue. There is a growing irritation in responsible circles, political and financial, both across the Atlantic and among Britain's prospective partners in Europe, at the prospect of a long drawn-out struggle of attrition without solution, except a growing demand for the de facto recognition of Rhodesia on terms which will be far less acceptable or palatable than those which might still be achieved to-day.
There is one further matter arising out of sanctions which I should like to mention to your Lordships, and it is this. I do not know whether sanctions were legal or not. Many far more erudite minds than mine have given their opinions, and they are conflicting. But whatever may be the exact legal position, I am convinced myself that the United Nations Charter was not intended originally to be interpreted in the way it has been, and many people of many other nations believe that on this occasion UNO went outside its mandate in applying sanctions to a country which, by any comparable events recent in your Lordships' minds, did not pose a threat to peace and was unrepresented when that decision to apply sanctions was taken. The point I wish to make is simply this. I believe that Her Majesty's Government were wrong in their application to the United Nations, and in asking them to stretch the provisions of the Charter were thereby detracting from the authority and the impartiality of UNO which can but have been noted elsewhere by other countries who are now trying to use UNO for other and far more dangerous purposes. There seems to me to be a moral in this, and I believe it is worth notice.
As I see them, these are just some of the results of the Rhodesian policy pursued by Her Majesty's Government. What alternative is there? Many noble Lords have asked that question this afternoon. We must all hope that one may emerge from current probing and from the visit of the noble Lord, Lord Alport, to Salisbury, though one must admit that present reactions are not exactly propitious, and I myself see no possible solution that is going to be

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acceptable there so long as NIBMAR is held to by the Prime Minister, a policy that he reiterated in another place a few days ago, and which has been publicly rejected by Mr. Ian Smith as completely unacceptable.
I listened to the words of the noble Lord, Lord Carrington, with complete agreement. In what he said I believe he is absolutely right, that so long as the policy of NIBMAR stands there is no possible hope of any settlement. Moreover, I was quite appalled by what we have just heard from the noble Lord, Lord Macpherson of Drumochter about his proposals which were put before Her Majesty's Government, most properly, as soon as he returned from his most interesting and extensive tour of Rhodesia. These most valuable proposals were immediately submitted to Her Majesty's Government, and apparently were rejected out of hand. I think this was deplorable.
To go further, none of us outside Her Majesty's Government can judge what is meant by the Prime Minister's further reference to any "considerably changed circumstances" possibly altering his stand on NIBMAR. But if it could mean re-acceptance by both Governments of the "Tiger" Constitution, and a careful negotiation on the details of its implementation without any of the dubious clauses which, I am sure, wrecked the agreement last December (and I should like to emphasise this, in view of the remarks made by the noble Lord, Lord Mitchison, earlier on, which were so adequately answered by the noble Lord, Lord Milverton) then there could be real hope. I am sure that it is those extra clauses which prevented the Rhodesians from accepting the main principles of the "Tiger" Constitution. This should be clearly understood by all noble Lords. If there is a change of special circumstances in which the "Tiger" Constitution, or something similar, could be accepted, then I believe that there is still some hope.
What is really needed is a dose of realism to crystallise thinking on Rhodesia. Rhodesia claimed her overdue independence 18 months ago. She is still independent and undoubtedly will continue to be independent. As the noble Marquess, Lord Salisbury, said, the real question is whether Rhodesia is to be independent within the Commonwealth or outside it. The prime fact here seems to me to be whether we recognise that fact
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and negotiate on the terms of British recognition, or continue to live in a world of make-believe that Rhodesia can still be brought to heel, and in so doing lose all prospects of influencing future events in Central Africa, and be derided—as we have been—by other African States for our impotence.
It is often forgotten that, despite the differences of political outlook that exist between the Governments of Britain and Rhodesia, there are still many Rhodesians who have been proud of the British connection and who would be very loth to see that connection finally severed. But if it comes to the ultimate choice between the stated policy of Her Majesty's Government and NIBMAR, and independence outside the Commonwealth, then of course these people choose the latter course and perforce cut their loyalties to the Crown and their past associations with this country, and pledge themselves to their country of birth or adoption. They may well be a little poorer for that, but we shall be that much poorer also.
A week ago I had the opportunity, in company with other noble Lords—some of whom are in the House today—of listening to Dr. Hastings Banda, the President of Malawi, when he was speaking within these precincts. He spoke with particular reference to the Rhodesian issue, and what he had to say was forceful, pertinent, and as he frequently emphasised, realistic. He recognised Rhodesia as a country to do business with, and was prepared to welcome visits from her representatives on this basis, as indeed from South Africa or any other friendly country. This, my Lords, not only is common sense, but pays a commendable regard to the necessity for all countries in Central Africa to trade and communicate with each other: trade rather than more aid; and discussion rather than subversion.
Dr. Banda's remarks are one of several indications that the general picture in Africa is changing, and greater interest is now being shown by some of the recently independent African States in good relations with the more prosperous and industrialised countries of Southern Africa. This is logical, for the answers to African problems can be worked out only by those who live with them and must carry the consequences. It is more than relevant to notice that the stability of two

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more former British colonial possessions, Sierra Leone and Nigeria, have been threatened this year by the collapse of democratic forms of Government in which once again military dictatorships have taken over. In Nigeria the clash between the two principal tribes has had the most appalling consequences, and may well develop into a civil war, with far worse to come.
I have said before in your Lordships' House that stable Governments in Africa should be supported at all costs. On stable government all else depends. Rhodesia has a stable Government, and a Parliament in which African and European representatives sit down together. This fact is generally forgotten, or ignored, and it is still almost unique in Africa today. We must hope that they will continue to sit down together. I am quite certain that an early settlement of the independence issue on constitutional terms similar to those agreed on H.M.S. "Tiger" would be the best guarantee of a continuance of multiracial Parliamentary institutions in Rhodesia, and such a settlement would take the impetus out of any different approach to political representation which may have gained support while Rhodesia has been the target of international hostility.
Many interesting points have been raised in the course of our debate. Perhaps the noble Marquess will be able to answer most of them. I am tempted, having many years' experience of Africa, to reply to some of them, but I have been speaking for much too long—for which I apologise to your Lordships. But there is one point that I should like to amplify in regard to some remarks made by the noble Lord, Lord Sinclair of Cleeve. He gave certain statistics which, from all the information I possess, I believe to be accurate. I would corroborate some of the remarks he made about the African people. He said that the African children were quick to learn, which is perfectly true, but he went on to say that the African adult, unfortunately, was rather slow to accept the responsibilities; and it is the responsibilities of Government which are the prime issue here.
We are about to reach the final parting of the ways. Is it right to insist on a form of government for Rhodesia which we cannot implement and for the success
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of which events in other African countries have so far shown little promise? Africa cannot be governed, or made productive in order to support its growing populations, by drastic changes of Government based on political conceptions which need time to mature. Rhodesia has the right to find her own solution to the constitutional problem; and if any country in Africa to-day can find the best way for the two races to live side by side, in harmony and mutual benefit, Rhodesia, through her history and background, has the best chance of providing the answer. It is, at least, a better chance than that which present British policy would have her accept. Finally, if during the next few weeks Her Majesty's Government do not show some degree of flexibility and greater realism, we shall lose our position of mediation in Central African affairs, our influence over a much wider area, and in the process much else that is of material advantage to ourselves.
8.9 p.m.
LORD GRIMSTON OF WESTBURY: My Lords, I also should like to thank my noble friend Lord Salisbury for having introduced this debate to-day. The length of the list of speakers and the speeches we have heard are an indication of how right the noble Marquess was to bring on this Motion to-day. There have been one or two voices against, but we had a notable contribution from the noble Lord, Lord Bourne, who has not spoken in Rhodesian debates before. I think he reflected a growing body of opinion in this country which, when it sees what is happening in other parts of the world—in the Middle East, in other parts of Africa and so on—is getting fed up that this quarrel with Rhodesians, who are our old and trusted friends, is being continued. I believe there will be a growing demand that it should be brought to an end.
I want to look, not for very long, at some of the facts of life with regard to the Rhodesian problem, because I think that one of the reasons why we have got into a deadlock is that what I call the mental approach of Her Majesty's Government to the whole problem has been wrong from the start. At the commencement of U.D.I. the Smith Government was characterised by the Prime Minister as a bunch of frightened little men. He

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then announced that sanctions would topple them in a matter of weeks rather than months. He now announces that there can be no independence granted to Rhodesia without African majority rule. All that he has really succeeded in doing during the 18 months when Rhodesia has had her independence is to consolidate support behind Mr. Smith from many people who were against him at the start of U.D.I. Now, of course, NIBMAR rules out any possibility of a settlement, and whatever gloss may be put by the Prime Minister or by the noble and learned Lord on the Woolsack on something which was said after they referred to NIBMAR, NIBMAR is the pledge which has been given by this Government to various members of the Commonwealth. That is what we must go by, and not by any nuance that it might be changed with changing circumstances and so on, which is merely another indication that this Government will never keep a pledge which they make. That, again, makes things more difficult.
Let no one make any mistake; sanctions will increasingly damage both Britain and Rhodesia. And let no one underrate the increasing cost to Britain, directly and indirectly, of sanctions. Much trade has probably been lost forever. And let no worker in any car factory or electronics factory, or in many others imagine that his job is made more secure, or that our balance of payments is helped, or that the end of the freeze and the squeeze is hastened by Rhodesian sanctions and this policy. Precisely the reverse is happening, and the present Rhodesian policy is making quite a considerable contribution to our balance-of-payments difficulties and to the maintenance of the freeze and the squeeze. I believe that every worker in every factory should realise that. The tobacco sanction is hurting Rhodesia, but they are taking steps to diversify, although this will take some time. But we shall have to spend more dollars on tobacco, which is not going to help our balance of payments.
If the Government are thinking—and I believe there were signs to-day that they are—that the recent savage cut in the tobacco crop announced by the Rhodesian Government can be held as a triumph for sanctions, on the way to bringing Smith down, they should think again. If sanctions are felt more, Rhodesia will get the sort of leadership which we got in
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the dark days with blood, toil, tears and sweat, and they will respond to it exactly as we did. The Government have made the mistake the whole time of thinking that Rhodesians are different people from what we were in those days. But they are exactly the same. They can see the alternative in other parts of Africa, as we saw the alternative in Germany. As time goes on—
LORD MITCHISON: My Lords, may I ask the noble Lord which Rhodesians he is talking about?
LORD GRIMSTON OF WESTBURY: My Lords, I am glad the noble Lord interrupted, because I am coming to that very point. I know that he is talking about black and white. As time goes on sanctions will be increasingly breached, unless the Government seek a confrontation with South Africa. That is common knowledge and, I think, agreed upon by everybody. Are they prepared to seek that confrontation at a time when the Suez Canal is closed and when the importance of the Cape to world shipping is going to become more and more apparent? Do they really think that they will get any international support for confrontation with South Africa? But unless the Government have that confrontation, sanctions against Rhodesia can never succeed, and they know it. Also, do they think that they would get support for such a policy of confrontation, just in order to save the face of Her Majesty's Government vis-à-vis Rhodesia? I have no doubt that they could certainly get a meaningless resolution through the United Nations, hut it would be thoroughly impotent.
I now come to the point which I think the noble Lord interrupted me on. I want to turn to what Africans in Rhodesia think, and to the African point of view. Here I am referring to black Africans and not to white Africans. I would just quote again two sentences of a letter which I read in the last debate. This is from a priest who said:
"After nearly twenty years spent among Africans as a mission priest, eight of them in Rhodesia, I would hesitate to dogmatise about what the Africans think."
Many other people are prepared to dogmatise about them. The letter goes on:
"It is widely believed that by hook or by crook Britain may yet get the nationalist

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leaders into power in Rhodesia as elsewhere, and then God help anyone who has openly disagreed with them!"
Now let us look at some of the evidence of what Africans are thinking. There has been law and order in Rhodesia since U.D.I. The noble and learned Lord on the Woolsack referred to it; in fact, he said that law and order had been so good that some of the legislation which was being introduced was unnecessary and illegal. That is very different from other places which I need not mention. But there is no doubt that parties of saboteurs have tried to enter Rhodesia in order to disrupt law and order. That is well known. But they have invariably either given themselves up or been picked up by the police. Why is that? They could not have been picked up in country districts, far from towns, without the co-operation of a lot of Africans. The noble Lord seems to find this rather funny.
LORD MITCHISON: No, my Lords; it is not that I am finding it funny.
LORD GRIMSTON OF WESTBURY: No, I was not referring to the noble Lord, Lord Mitchison.
LORD MITCHISON: I beg the noble Lord's pardon. I thought his remarks were addressed to me.
LORD GRIMSTON OF WESTBURY: My Lords, anyone who knows Africa and Rhodesia will know what I mean by "bush telegraph". What has been happening with these groups of saboteurs is that as soon as they appear in a village other Africans, who do not want them there stirring up trouble and so on, immediately let the police know by bush telegraph and the saboteurs are picked up. Does anybody really suppose that law and order in country districts could have been kept against those saboteurs by the comparatively small security forces of Rhodesia, unless they had the vast majority of the black African population behind them? I give that as some evidence of the fact that a very large number of black Africans are supporting the Smith régime against terrorist infiltration.
Then there is the African Leader of the Opposition in Parliament, who is still
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able to speak in Parliament. He said, apropos the "Tiger" talks:
"I believe it was impossible for the Prime Minister"—
that is Mr. Ian Smith—
"to have accepted what took place".
I know that the immediate reaction of noble Lords opposite is, "He is just a 'stooge'." That is what they will say. But at any rate law and order in Rhodesia is such that the Leader of the Opposition can say that without being beaten up the next day.
LORD MITCHISON: Is that why it is necessary to intern so many people?
LORD GRIMSTON OF WESTBURY: People are interned in every State in Africa. What always irritates me is that when somebody is interned in Rhodesia we get talk about a Police State, Hitler, the Gestapo and what-not, but they can kill and intern any number of people under military dictatorships in other parts of Africa and you never hear a squeak from noble Lords opposite.
SEVERAL NOBLE LORDS: Answer, answer!
LORD GRIMSTON OF WESTBURY: As I say, the African leader of the Opposition will probably be called a "stooge", but be it noted also that Lord Malvern and Sir Roy Welensky, who were no supporters of Smith, have also declared that he could not possibly have accepted the "Tiger" terms. I think there is enough evidence in what I have said to show that the Smith Government is now—I will put it no higher than this—not without support from quarters which will have nothing to do with what the British Government are trying to force on Rhodesia; and they are people who were previously opposed to the Smith Government.
Rhodesians will not put their independence in pawn to Britain, and least of all to the present Government, after seeing what happened only the other day. Imagine asking the Rhodesians now to accept a Commission set up by Her Majesty's Government with the pledge that its findings will be respected. Are they likely to accept that, having seen what has happened to the Radcliffe Commission, with Mr. Shinwell and Mr. Selwyn Lloyd reporting unfavourably on

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the Prime Minister and the Prime Minister refusing to honour his pledge that the Government would accept its findings? That is not lost on the Rhodesians.
THE LORD CHANCELLOR: My Lords, would the noble Lord kindly tell us when this pledge to accept the findings of the Radcliffe Commission was made?
LORD GRIMSTON OF WESTBURY: I think the noble Lord will find it in Hansard.
THE LORD CHANCELLOR: I am quite sure I shall not.
LORD GRIMSTON OF WESTBURY: I cannot give the reference.
THE LORD CHANCELLOR: My right honourable friend never said anything of the kind. The Conservative Government promised to accept the findings of the Devlin Commission on Nyasaland, and they repudiated them. But it is quite untrue to say that my right honourable friend ever pledged himself to accept the findings of the Radcliffe Commission.
LORD GRIMSTON OF WESTBURY: Of course, if the noble Lord the Lord Chancellor says that, I accept it, but nobody can get away from the fact that the entire Press of the country, including the Daily Mirror, which I read every day, is very much upset by what has happened. As I say, this has a bearing on the settlement of the Rhodesian question by some independent inquiry such as has been proposed under a handback of authority. If the Government want an agreement with Rhodesia (and I must say that one really wonders sometimes whether they do) I have a suggestion to make—and this is my own idea. I have not the slightest hope that it will be accepted, but I believe it would be practicable. What I would suggest is that the Smith Government be offered independence on the basis of the Constitution worked out on the "Tiger", but without any interim period for the hand-over of U.D.I. Personally, I would say to Mr. Smith: "You seek a mandate from your people as to whether they will accept the Constitution which was worked out on the 'Tiger', and if you can get that mandate we will grant you independence straight away, without any interim period, without any handback of authority to Great Britain".
LORD MITCHISON: My Lords, I wonder whether the noble Lord will allow me—
LORD GRIMSTON OF WESTBURY: Will the noble Lord let me get on with my speech? Because there are a lot of people who want to speak. If that were done, I believe that Mr. Smith would sweep the country with the support of the moderate elements—I think it is quite likely that the extremists would be opposed to it—and that in that way a multiracial Constitution would be enshrined.
LORD MITCHISON: May I interrupt the noble Lord? I am much obliged to the noble Lord for giving way. This was a matter to which the noble Marquess referred, and I had not got the quotation:
"Sir Hugh Beadle reminded Mr. Smith once again that if the constitutional provisions could he regarded as agreed all that was at issue was four months of interim Government, after which Rhodesia could he back to Constitutional Government on the basis of the 1961 Constitution. Mr. Smith admitted that this was a sound point which Sir Hugh Beadle had represented to him several times on recent occasions."
LORD GRIMSTON OF WESTBURY: My Lords, I really do not quite follow the relevance of that interruption. What I am saying, and have said, is that if one looks at the facts of life one sees that Rhodesia will not hand back her independence to this country under any terms. She would sooner die. If we carry on as we are, and if the Government persist in their present policy, all that will happen is that by November Rhodesia will be a Republic with a drift towards apartheid. That is what is going to happen, and that is why I believe it is important to have this debate to show at any rate that a great many people realise it and are pressing the Government to take a policy which will not lead to that.
To-day, the noble and learned Lord on the Woolsack, referring to Lord Alport, said that he thought he was going out too soon. He repeated that he thought that by November—this is my recollection of the words he used—the businessmen would be getting worried, and that by then there would be more chance of the Smith Government coming to heel because of the effect of sanctions. I do not think I have misrepresented what he said, or the

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tenor of what he said. All I can say to him is that he is making exactly the same mistake as was made at the beginning. I presume that when the Prime Minister said that sanctions would be effective in a matter of weeks rather than months he had the noble Lord's support at the time. He is making exactly the same mistake to-day.
That is the choice, my Lords. We can give Rhodesia her independence and, I believe, get a Constitution which will enshrine a multiracial society. If we go on as we are, she will become a Republic and she will drift into the apartheid camp. That is the choice. My noble friends and I have warned about these things before, but no notice has been taken. I do not suppose it will be taken now, but it does not make us any the less right, as we have been all the way through.
8.28 p.m.
LORD SALTOUN: My Lords, before I say the few words that I have come to say, I should like to apologise to the noble Lord, Lord Segal—although he is not in the Chamber at the moment—for interrupting his excellent speech. The fact is that I never doubted for a moment that Israel would "walk through" her opponents and that the result would be what it has been. So it came as no surprise.
I should like to follow my noble kinsman, Lord Fraser of Lonsdale, when he said that the two speeches he appreciated most were those of the noble Marquess who opened the debate and the noble and learned Lord the Lord Chancellor. I should like to add that I think my noble kinsman's speech was possibly the most constructive of all the speeches made this afternoon, and I have heard every word of every one of them. I was enchanted by the speech of the noble and learned Lord the Lord Chancellor because he came in the character of a Grand Inquisitor to describe to the conclave the exact effect upon the heretic of the question he was undergoing, and to propose future measures to ensure his ultimate conversion. His ultimate conversion, in the noble and learned Lord's words, was that he should return to legality. I would comment on that only by reminding him of the words of St. Paul:
"It is the law that kills".
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In this case, I think that is going to be perfectly true, because I think this search for legality will be fatal. I would also add that I learn to my regret from a great deal that has been said this afternoon that the opinion expressed fifty years ago by an historian that religious wars were over and dead forever was not true. We are engaged at this moment, it seems to me, in a kind of religious war.
My Lords, I know very little about Rhodesia. I have relations there, as I have relations in South Africa; and, as far as the Government will allow me, I preserve my relations with them as well as I can. But I read the newspapers and, as a British citizen and a taxpayer, there is one matter which has always given me cause for great concern. At the beginning of U.D.I.—which I regretted as much as anybody—the Prime Minister made a very carefully considered statement to the people of this country and, of course, to the whole world. In the course of that statement he said that he had warned Mr. Smith that in the event of U.D.I. there would be perpetrated throughout his country every sort and kind of outrage by the incensed coloured African population. Three days later there came a response to that remark from East Africa—"Yes, we will start Mau Mau again. "A little later on, I read in a newspaper (I think it was The Times) that some wretched farmer in Rhodesia had been attacked, that the inhabitants of the farm had been robbed and outraged and, I think, that the farm had been burned down. I do not know whether or not the perpetrators were caught before they escaped across the frontier.
Since then, as the noble Lord, Lord Grimston of Westbury, has said, there has been reported in the Press the capture in Rhodesia of party after party which had managed to cross into the country. Some of these parties are armed, and some say that they have thrown away their arms. The arms they have are made, apparently, in Eastern Asia or in Russia (I forget exactly where) but they are good arms; they have had to be paid for. Furthermore, friends of mine who are professionally engaged in Portugal tell me that the Portuguese complain of the same thing in Mozambique.
I have always been a little worried about this, and from time to time I have asked the Government questions on the

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subject; but always I have been put off. On Thursday, June 8—this month—in a supplementary question to the noble Lord, Lord Beswick, I pointed out that we were sending a good deal of money to Zambia, that the arms of these infiltrators cost money and that it was a horrible thought that Britain should be involved, even indirectly, or that Britain turned a blind eye to this. I asked what precautions the Zambian Government took over violation of the frontier; and I asked the noble Lord what he could tell me about it. The answer, which I have here, expressed, it seemed to me, extreme contempt and disregard of the Portuguese and their very justifiable complaints that this sort of thing happens in Mozambique. The terms in which the answer was given, were, I thought, very strange in a Government which had passed one Race Relations Act and was about to pass another. Personally, as a Scotsman, my racial feelings are very small; I think the Portuguese whose farm was burned and whose family were outraged and massacred had just as much right to complain as a Scotsman or a Rhodesian, or anybody else.
I am worried about this. We give the Zambians £14 million a year. I should feel bitterly ashamed if that money or any portion of it were used to enable arms to be purchased and furnished to people who make these border raids.
LORD BESWICK: My Lords, while I must say that I cannot quite see the relevance of this to the debate that the noble Marquess has initiated, may I be allowed to say that if my answer to the noble Lord's supplementary question was thought to be discourteous I am sorry. I did not intend to be discourteous. I thought that my reply was a factual one.
LORD SALTOUN: My Lords, it seems to me to affect the Rhodesian question very much. It is a very serious question. If the British Government are turning a blind eye to this kind of thing to exercise influence on Rhodesia is is a perfectly horrible situation, and everybody ought to protest against it. I have only what I have read in the newspapers. I put it before your Lordships and it seems to me that the question I have raised before, and which I raise again, deserves an answer. I want to know whether the British Government, who supply a great
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deal of money to Zambia, are doing their best to ensure that the frontier is not violated by these raiders—either the Rhodesian or any other frontier. I think it is of the greatest importance.
LORD BESWICK: My Lords, if I may, I will assist the noble Lord. On a number of occasions responsible Ministers of Her Majesty's Government have deprecated violent action of that kind.
LORD SALTOUN: My Lords, I am extremely glad to hear it.
The only other thing I have to say is with regard to the noble Lord, Lord Mitchison. Of course, I have no title to lecture your Lordships on questions of morals; but the noble Lord said that this is a moral question. In the course of a very long life I have had friends and neighbours who have committed acts which I strongly deprecate. It has been open to me either to resent them or to let them go. In nine cases out of ten it is very much better, morally, to let an act go which you cannot prevent than to try to remedy it and thereby cause much more misery all round. I do not think that that can be bad morals. At any rate, it is the experience of more than eighty years of life.
8.39 p.m.
THE MARQUESS OF AILESBURY: My Lords, in this rather lengthy debate we have seen that there are a great many different aspects to the Rhodesian problem. I want to look at it from one aspect only, which perhaps I may term the historian's aspect, because I believe that we have not sufficiently taken notice of the fact that much of this has happened before. We should remember that there was a previous U.D.I. It occurred in 1776; it occurred on the 4th of July of that year. The troublesome colonial leader on that occasion was not named Smith; he was named George Washington.
I know what some of your Lordships must be thinking: that the American grievance that caused that U.D.I. was not identical with the Rhodesian grievance that caused the recent U.D.I. Superficially, I agree that the American grievance was that English taxation was being imposed on them. The Rhodesian grievance is that there is an attempt to force upon them an English electoral system. They are superficially different,

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but basically the same; because in both cases what is really being said is this: "We feel that we are an adult people who can manage our own affairs in our own way. We are tired of being bossed by the man in Whitehall, that man who lives 3,000 or 4,000 miles away, and who professes to understand our affairs but who does not". That is the message which reaches us now from Rhodesia and which reached us formerly from the American Colonies.
We should note also the close similarity between the response of the British Government in 1776 and more recently in 1966. Again there are superficial differences. Lord North instituted a hot war against the American colonists. We have initiated only a cold war against the Rhodesians. We seek to bring them to their knees, not by gunfire this time, but by financial ruin; and the Government viewpoint is again closely similar to the proposition that we must punish these dissident people and hammer away at them until they give way and return to our Commonwealth fold. A great similarity then, my Lords, in the cause and in the British Government's reaction.
Now let us look at results. The result of the American U.D.I. we know. We fought a hot war against them which lasted for ten years, from 1773 to 1783; and the result was utter failure. Those colonists were too tough to respond to bullying. So we had ten years of death and destruction: ten years in which our National Debt increased by £100 million—and they were real pounds then. And the result was complete failure. This makes one wonder what result faces us if we pursue our cold war against the Rhodesians.
On this note, a student of history might perhaps end; but I could not help taking, notice of what I took to be a challenge thrown out by the noble Lord, Lord Mitchison. He suggested that noble Lords on this side of the House were being purely destructive in their criticism of our Government; and, as I understood it, he challenged us to produce a constructive alternative. I will try to do so extremely briefly. I can state what I have in my mind in a dozen words. It is this. Our Government could respond to a U.D.I. by means of a "U.D.E."—and as we have not yet had a "U.D.E.", may
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I say that it is a unilateral declaration of exclusion.
I put that suggestion forward, my Lords, with all modesty, but there are certain points about it. It would provide a prompt solution, and several of your Lordships have said how urgent it is that we should find a prompt solution. It would also give a face-saving solution, and in the political world the saving of face is important. It need not necessarily be a hostile solution. It may sound hostile, but it need not necessarily be so; because if we think of our multiracial Commonwealth as a sort of multiracial club, the club secretary could put it to the dissident member that he had been behaving in such a way that he was no longer congenial to the other club members, and therefore the committee felt that he must leave the club. It could be added that, after all, time moves on; ideas change and develop, and there might come a time when perhaps the dissident member would seem a little more congenial to his fellow members of the club—and possibly they might even move slightly in his direction. Then of course it would be very nice if the member were to rejoin the club. It is simply an idea, my Lords, but a response to a challenge.
8.45 p.m.
LORD BARNBY: My Lords, at this stage in a long debate, when there are still several important speakers to be heard, it seems to me inopportune to attempt a set, prepared speech; but in answer to the possible question, "Then why speak at all?" I will first of all say that it is because I feel intensely on this subject and have watched it very closely. I feel that almost all the points which could usefully be raised have been brought out, and now they can only be embellished. The noble Marquess, Lord Salisbury, opened the debate with a skilfully marshalled and moderately delivered speech which gave a high tone to the debate. We may be proud in this House that it was followed by so many significantly informed speeches. It is impressive that this House always produces speakers with intimate knowledge who can make contributions of such high value.
I found that the speech of the noble Lord, Lord Balfour of Inchrye, also covered much of what I, and many others,

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must think, who, in their conscientious attitude, are inclined to follow the views of the noble Marquess rather than the views of the Government as put forward by the noble and learned Lord, the Lord Chancellor. In addition, there were the speeches of the noble Lord, Lord Milverton, who speaks from such a long experience of colonial administration, and the noble Lord, Lord Wedgwood, who also possesses intimate knowledge. This is a subject on which having intimate knowledge of the country concerned justifies those who speak. Alas! in another place where there is continual sniping about what ought or ought not to be done, I suspect that only a small proportion of the speakers have ever been to the country.
My Lords, one of the reasons I wanted to speak to-night is that only a few weeks ago I was in Rhodesia, and I took the trouble to go about and to satisfy myself on a good many points. That is what prompts me to refer to a very few of them. First, I would say, because it comes to my mind, that the noble and learned Lord, the Lord Chancellor, very properly putting the position of the Government so impressively, differed from the noble Marquess in at least three of the noble and learned Lord's statements which, while not inaccurate, were definitely slanted. The first of them he very properly corrected when the noble Marquess intervened. The second was when he referred to the population, particularly the black population. I think he failed to remember that among the population in Rhodesia there are several hundred thousand who have come in from neighbouring countries because they find Rhodesia better and more comfortable and the wages more rewarding. Of the 4 million black population half of them are under 17, so could not be voters.
The third thing he said, referring to the effect of sanctions, was that some 500 tobacco growers had gone out of business. Yes; out of business growing tobacco. But if farmers in England cannot grow wheat, are they prohibited from turning to potatoes? I took a good deal of trouble to go about in Rhodesia and see the effect of sanctions. They are turning from tobacco to mealies, Kaffir corn, sorghum, groundnuts and cotton, all of which are rewarding. Do not let us be under any illusion.
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Sanctions will not break Rhodesia. Those who worked in either of the two world wars with the Ministry of Economic Development know how difficult it is to effect a complete control of merchandise. We might just as well try to blockade Switzerland when we know that the borders with France and Italy are both open. So long as South Africa and Portuguese Mozambique are open, merchandise will flow into Rhodesia.
The noble and learned Lord the Lord Chancellor mentioned a second alternative course, which he did not recommend—the use of force. What stupidity to talk of force! Who is going to apply force? I suppose the idea is that it would be the United Nations. My noble Leader, in his well-reasoned speech, questioned the noble and learned Lord the Lord Chancellor with regard to the United Nations. Fifty-four of the members are behind with their subscriptions, and the organisation is £70 million in debt. It has been a complete failure in so many places. The Prime Minister is entirely wrong in handing this problem to the United Nations, because they are now discredited. The latest report on Israel should be an illustration of the futility of turning to the United Nations.
Countries like Sierra Leone, Nigeria, Ghana and Tanzania are all tinged with Communism. The danger of world Communism is very real to-day. I returned from Greece only yesterday. Look how the British Press represented the position in Greece. If the instability had not been brought under hand, Greece would have been under the influence of Communism. Businessmen in Greece admit what an improvement there is in conditions. There has been an entire change from irregularity.
One of the reasons given for sanctions is that there was an absence of law and order in Rhodesia. In Rhodesia the farmers and managers of the big farms and ranches are members of the auxiliary police. I spoke to several of them and found that none of them had been called out for months. There was a complete absence of any disorders. As my noble friend Lord Grimston of Westbury said, when these infiltrators come in, the black Rhodesians, freed from internal fears between rival parties, inform the police and prevent the danger from spreading. Incidentally, I wonder how many people realise that in the whole cauldron of

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Africa it is in Rhodesia alone that the police are unarmed. The suggestion that sanctions were applied because of internal disorders is completely fallacious.
I do not relent on anything I have said with regard to Communism, because we have just seen that the victory of 3 million Israelis over 70 million Arabs, together with what has happened in Greece, has given Communism a big setback. Why should the United States, who are fighting Communism, join with Britain in trying to break the strongest bulwark against Communism in Africa? The danger of all this is that because, inevitably, sanctions will not succeed, it may lead to the use of force. This would bring in South Africa; and let us be under no illusion about the danger to this country. In addition to the great loss that we have suffered by the Government's policy there will be a serious loss of trade to South Africa, which is our third biggest customer. Then there is the folly of our representatives at the United Nations in not more energetically opposing the attacks on South Africa and South-West Africa and the suggestions of an alternative Government, when there is no chance of an alternative Government. Therein lies danger.
The noble Lord, Lord Mitchison, who I am sorry to see is not in his place, said that the overwhelming majority of people in this country support the Government's policy. If we ask the majority of the responsible businessmen in this country, we find that they are all for negotiation: they want to see this thing brought to an end, to save the loss and bring back the trade. My Lords, it is on those grounds that I strongly support the appeals of the noble Marquess, supported by my noble Leader, that we should negotiate as quickly as possible and make the best trade we can. This will be for the benefit of the black African people, who are suffering the most. I conclude by repeating my appeal. What is the feeling of the majority of businessmen in this country? It is that the Government should move quickly towards negotiation.
9.0 p.m.
LORD FERRIER: My Lords, I should like to apologise in advance to the noble Lord who is to wind up and to the noble Marquess, Lord Salisbury, if I am unable to stay to the end of the debate. It
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would be a great inconvenience to me if I missed the night train to Scotland. I think it might be more courteous to your Lordships if I refrained from speaking, but I trust your Lordships will forgive me if I quite briefly take up one or two points that have not been made or which have grown out of the debate.
My other excuse for detaining your Lordships is that I believe it is important for Parliament and the public to know how widespread is the support for the noble Marquess. In this respect I entirely agree with what was said by the noble Lord, Lord Balfour of Inchrye: that it is proper that this debate should take place, and that as many Peers as possible should say what they have to say. It would have been wrong to lose the chance of emphasising the strength of feeling of those who are not members of (shall I say?) the Monday Club or the Anglo-Rhodesian Society, or necessarily associated with those movements. I am no Right-Winger, but I hold the strongest view in support of the noble Marquess on this matter. With due respect, I feel that I must contradict the implication in what the noble and learned Lord the Lord Chancellor said: that those who hold views like mine are a small Right-Wing, interested group. I beg to differ.
In some measure I support what the noble Lord, Lord Barnby, has just said. Throughout the country I sense an increased feeling of anxiety about the whole situation, and a desire for a settlement in Rhodesia before it is too late. In the leading article of June 14 The Times contains these words, right at the beginning
"Mr. Ian Smith's friends in Westminster have for weeks been running a campaign for new negotiations…
This, for all I know, may be true; but it is only a fraction of the truth. I am no friend of Mr. Smith, though I cannot help respecting him. Like many another friend of peace, I should like to see new negotiations as I dare say he would, and I support any move to this end. Surely only the friends of strife are prepared to sit back and let the situation simmer to disaster. I believe that the great bulk of the people of this country feel as I do, particularly worrying about the poor people, as the noble Lord, Lord Gridley, did, and as was mentioned by the noble Lord, Lord Grimston of Westbury. I am

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sure that the great bulk of white Rhodesians would like to go back to legality, if I may call it that, provided, and always provided, they are not threatened with "one man, one vote" too precipitately.
I have here a letter from a neighbour of mine, a Rhodesian. Her husband, like his father and grandfather before him, commanded a famous Scottish regiment, and circumstances were such after the war that he went to farm in Rhodesia, intending eventually to return to this country. She writes:
"My husband and I never voted for Mr. Smith. We did not want him to declare U.D.I. But now that the deed has been done and there appears to be no alternative to him or one man, one vote, then we must stand behind Smith, because Rhodesia is not yet ready for the Africans to take sole control of the Government. I have no doubt that they will advance slowly and surely and get more and more responsibility, but chaos and African fighting against African will be the only result of one man, one vote at the present moment. What is more, the large majority of the Africans know this and are terrified lest the white man should go."
This checks with much that noble Lords have already said in this debate about the average African, which is that they are content that their wild men are safely under lock and key. If such detention may be outrageous in terms of our standards here—and it may be so—it is not so in countries where the ways of life of many folk are generations nearer to the primitive.
When, last December, we sought more time, we sought more time for a peaceful solution. Even if sanctions are having an effect—and nobody denies it—it looks as if the noble Lord, Lord Fraser of Lonsdale, was right when he said about sanctions in our debate of December, 1965:
"I think Mr. Smith and his de facto government will sweat it Out."—[OFFICIAL REPORT, 7/12/65, col. 189.]
How right he has been. And one hopes that he is right in what he said to-day, when to my pleasurable surprise he said that he thought we were nearer a settlement than many of us believed. Let us trust that he is not in error. Surely, any time in a matter of this sort is time for negotiation. Surely, few people want to fight, and few people want Rhodesia to flee the Commonwealth. Surely, fewer still want to drive Rhodesia into the arms of South Africa, as so many noble
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Lords have indicated is more than possible.
I say this because the South African approach to the coloured problem is not the British approach; and it is not the Rhodesian approach, despite what the noble Lord, Lord Brockway, said in his speech, when he said that to his regret Rhodesia was drifting towards apartheid. I nearly cried out: "Whose fault is that?" I say it now because, since he spoke, I have received confirmation from one with close ties in Rhodesia that this trend towards apartheid in the threatened legislation to which the noble and learned Lord the Lord Chancellor referred is the direct result of the NIBMAR policy.
I also feel some resentment at the suggestion that for us to withdraw sanctions would be a betrayal of the Africans. I do not accept this view at all, and I prefer the view expressed by the noble Lord, Lord Balfour of Inchrye. Noble Lords may remember that the only time I have spoken in a Rhodesia debate I made it clear beyond doubt that I have reason to feel most strongly for the poor people—the poor African, the poor people to whom the noble Lord, Lord Gridley, referred in his speech.
Apartheid is not the British way of life; it is not the Rhodesian way of life. Let us strive to keep it this way. But time is running out. Let us remember the hard fact—and this point has only been touched on—that South Africa is not going to sit back and see Rhodesia destroyed, either economically or militarily. South Africa is becoming more and more determined to help Rhodesia in every way it can, and it must help its position by looking past Britain for other sources of supply to replace our massive trade with it; and also, in terms of purchasing machinery, to ensure that it buys machinery for which supplies of spares are likely to continue to be available and not be threatened by an extension of this sanctions system.
To turn to sanctions, with the passage of time one forgets that Mr. Wilson thought that Rhodesia would be on its knees a year ago, last year. The noble Lord, Lord Grimston of Westbury, has mentioned that; and I can only go on to say that Rhodesia is in fact "sweating it out". The noble Lord, Lord Barnby, referred to the tobacco crop and alternative production. There is another angle

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to that, which is this. This compulsion to diversify in the Rhodesian agriculture policy is in itself a good thing in terms of Rhodesia, and out of context with any of their relations with outside. Here, in this country—and this point has not been touched on—sanctions are bringing cruel injustice to harmless families; people whose only sin is that they dare to be Rhodesians or have Rhodesian connections. There are men who have served this nation in peace and war bitterly hurt by having their passports impounded at points of entry. There are women and children in financial difficulties because of the regulations administered, no matter how fairly, by the Bank of England. There are resources which never stemmed from Rhodesia which are frozen so that families cannot draw from them, for education and the like.
It seems to me that this is another reason why nothing but bitterness can stem from the present policy. And that is what is happening—bitterness on every side. If some of the Rhodesian Cabinet are stubborn, as they are, what end will stubbornness serve on our side? Another noble Lord, Lord Wedgwood, mentioned Dr. Hastings Banda's views. It is well to keep them in mind, and it is well also to remember how Israel has shown that a fit, determined and united people can go almost anywhere. Some of the speeches from noble Lords opposite have, quite frankly, made my flesh creep. There has been talk of the surprise at the state of emergency in Salisbury to-day. Of course there must be a state of emergency in Salisbury so long as there is cold war declared against them from here. Surely, it is the only natural result.
It is small wonder that so many pray that an end may be put to it all; and if the noble Lord, Lord Alport, can achieve a renewal of contacts, then he deserves every possible praise and support. If tolerance and common sense can triumph over pride and prejudice, many an anxious heart—and there are many such in Britain and in Rhodesia to-day—would rejoice.
9.13 p.m.
LORD STRANGE: My Lords, I trust that you acknowledge my sincerity when I say that I should not get up to speak to-night if the point which I have flown over to make had been made. But
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I have studied the various debates, and listened to them, and read them in Hansard, and I am surprised that what I consider to be the most important point in the whole question of our little bother with Rhodesia has not been made by anybody.
In the last few years, as many of your Lordships will be aware, a revolution in thought has taken place. We have come, by the new biology, to realise the enormous importance that territory has and has always had, in our lives and development. When I was a child at school evolution was a "mushy" subject. Some people thought we were descended from apes, and others thought we had just "happened". After a little while it began to become somewhat crystallised and we realised that we have evolved from some very simple form of life and that we had with us in our evolution certain basic instincts which had caused this evolution and carried us through the years to our present development as a species which we now see around us to-day.
The next interesting point came in the 'twenties and 'thirties. It is amazing to me that I have lived a life in which so much which is truth has only so recently been discovered. In the 'twenties and 'thirties various people started prying about and they came to the conclusion that the basic instinct which has carried us through life from the earliest times was sex. They came to that opinion by prying about with neurotic patients on couches in semi-dark rooms; by looking at animals in cages and observing their behaviour, and I think with a certain amount of bias.
In the last ten years a revolution in thought has taken place, for the biologists have stopped looking at animals in cages, the psychiatrists no longer worry too much about neurotic women on couches. The biologists have gone out into the open and observed animals as they really live—the birds and all the creatures and the life from which we have sprung—how they really behave and live in the open. They have found out (and this has not been generally known in the last few years, as many people have not had time to read the recent discoveries; but it is definitely true) that territory is the strongest instinct that we human beings possess in this world and in this life, and it is the cause of evolution. I should

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like to talk a lot more and give a lot of evidence on this subject, but it is already late at night. I dislike boring people; and I should hate to bore your Lordships by my long account of how this discovery has come about; but I will try to explain in a simple way.
You and I—most of us in our lives have had the desire to go and fight for our country. We have left our homes; we have left our sweethearts, our families; we have not cared very much whether we were killed or not. We cared for our countries. We, my Lords, who survived have had many friends, relations and children killed fighting for their country. In fact, in the world millions of people have been killed fighting for territory. How many people have you, my Lords, known in your lives who have been killed fighting for a woman? That is the point. The instinct of territory comes much stronger than sex, than self-preservation, than life itself. It is the strongest instinct that we have; it sways us all.
In all these discoveries, and in all this new biology, people have gone back in life. They have studied little colonies of living things which one would hardly call "life" but which move under the oil-immersion lamp and the oil-immersion lens of the microscope. People have seen that they form colonies, and that the colonies squeeze each other out. The defence of a colony is the most important thing in this life, as we know in this country. Have we not fought wars to defend our territory? What about the Battle of Britain? What about all the other battles? That is our strong suit.
Now we come to the question of Rhodesia. The noble Marquess, Lord Ailesbury, has unfortunately left, but he drew a comparison—I was going to say that it was obvious, but I should not say that—between Mr. Washington and Mr. Smith. We know very well that George III thought it would be a good plan to put a token tax on the Americans to see if he could tax the Colonies, and Mr. Washington and his friends did not like it. We thought they were acting illegally, and we fought a little war against them. But we lost it. To-day, most people think that Mr. Smith's ideas are wrong. We want to bring in our own views about democracy, and I must personally declare that all my life I have
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believed in democracy—I do not want there to be any mistake about that. Whatever the colour or anything else, I believe, in democracy.
When I was a little boy at a private school I wore the suffragette tie, and I was "had up" by the master who wanted to know why. Ladies were padlocking themselves to railings in Palace Yard and jumping in front of the King's horse. I said I could not understand why married women of thirty should not have the vote. I still cannot understand it; and I declare that. But when it comes to Mr. Smith, who is playing "Mr. Washington" to-day, his view is simple. He says "One man, one vote, once, and then dictatorship". If you look round Africa you see it is a continent that has always had dictatorship of some sort or other.
It may be that Mr. Smith is right. But that is not the point of my speech. The point of my speech is that it has been found quite recently that in a case of territory—and our deepest instinct is the defence of territory—the persons who defend territory always win. The noble Marquess mentioned America. They won. I am certain that we have got up against the force of evolution. It is Ascot Week and people are making bets; there is the Tote "treble" coming up, and they are hoping to win. We are all working on form. The form is this, that we are playing against the whole evolution system and we are bound to lose.
9.22 p.m.
VISCOUNT MASSEREENE AND FERRARD: My Lords, I shall not follow the noble Lord, Lord Strange, in his lecture on biology, but I should like to say this. I understood him to say that the greatest thing in our lives is territory. If that is so, it cannot have applied to the British race in the last twenty years because in those years we have handed over about a quarter of the world.
LORD STRANGE: My Lords, if I may intervene, I said "our own territory". What we have taken from other people is not necessarily our territory. This island is our territory, and the Isle of Man.
VISCOUNT MASSEREENE AND FERRARD: My Lords, if I may return to the subject of the Motion, I should

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like to thank the noble Marquess for introducing this debate, in spite of everything Lord Henley said. I have always been an incurable optimist, but even I am getting rather downcast. I do not think the Prime Minister really wants a settlement in Rhodesia. From reading the Blue Book on the talks in the "Tiger" and the suggested Constitution, it appears to me that in actual fact Mr. Smith had accepted the Constitution proposed. The part of the conversations which he could not accept was in regard to the interim period. You cannot blame him for that. The noble and learned Lord, the Lord Chancellor, said in his speech that all Mr. Smith has to do is to return to legality. Of course that is so, but the Prime Minister, with due respect, has made it, so far as I can see, extremely difficult, if not impossible, for Mr. Smith to return to legality, because the conditions laid down are conditions of unconditional surrender. The real power was going to be handed to the Governor. The Governor is answerable to Whitehall, and Whitehall is answerable to the Prime Minister. So I cannot see how Mr. Smith could possibly have accepted the suggestions as to the interim period.
THE LORD CHANCELLOR: My Lords, may I intervene to say that this is often said and it is quite untrue. May I just explain the situation? Before U.D.I. there was law and order, there was a Governor, and there was a constitutional Government which could do exactly what it liked; and, under the constitutional convention between us, whatever Acts of Parliament they passed, whether we agreed with them or not, there was no way in which we could interfere. All that was suggested on the "Tiger" was that they should return to the constitutional position which they had previously occupied under the 1961 Constitution, when we had no right to object about what the Governor did.
VISCOUNT MASSEREENE AND FERRARD: My Lords, surely under the suggestions for the interim period the Ministers to be appointed were not to be appointed by Mr. Smith; they were to be appointed by Mr. Wilson through the Governor.
THE LORD CHANCELLOR: My Lords, the position was to be the same as in 1961. It was for the Governor to decide
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who to send for, but certainly not on the advice of anybody in Whitehall.
VISCOUNT MASSEREENE AND FERRARD: Well, my Lords, evidently I read the Blue Book wrongly. I must in some way have read it wrongly, because from reading it it did not appear to me that that was the case. But there is one point which I should like to ask the noble and learned Lord on paragraph 17, which refers to an agreed settlement to be submitted by a Royal Commission to the test of acceptability to the people of Rhodesia as a whole. I should like to know how the Royal Commission could explain to the average African in Rhodesia the extremely complicated terms of an agreed solution. It does not seem logical. The average African in Rhodesia, from my slight experience of Africans, particularly tribal Africans, would be completely unable to understand what was being proposed. I think that the suggestions will fall down on paragraph 17. I must not be too long, but as I say, from my point of view it seems that the Prime Minister has, through his insistence on the terms laid down for the interim period, thrown away a great advance. The agreement to the Constitution which I understood was come to by Mr. Smith was a great advance; it was a great achievement, and I think it is a great pity that it appears to have been lost.
What is to be done? Is the Prime Minister going to change his mind? So far as I can see, nothing is going to be done until we have a change of Government. If one analyses the situation, it is really quite tragic, and is at the same time almost absurd. What on earth are we fighting about? Here one has two Governments, both loyal to the Crown, both constitutionally elected. All that the Government in this country are fighting about is how much control the Rhodesian Government shall have in their internal affairs. We really have made a terrible mountain out of a molehill. It is terrifying to see how far the Prime Minister has gone in taking the question to the United Nations and in blowing it up into a great world issue. This appals me. Rhodesia is now the only part of Africa where the Union Jack still flies. Why are we trying to destroy the last bastion of civilisation in Central Africa?

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Several noble Lords—the noble Lord, Lord Mitchison, the noble Baroness, Lady Gaitskell, and, I think, the noble and learned Lord the Lord Chancellor and others—have spoken about the moral issue of majority rule. But majority rule is not a moral issue; it is a political issue. You can read the Bible, the Old Testament, the New Testament, the Koran, almost any religious or philosophical book you like, but the principle of majority rule has never been described to my knowledge as "a moral issue". As I have often said before, majority rule is a very good principle in theory, provided that everybody is well educated and reasonably intelligent. On that basis it is an excellent principle. But we have tried majority rule all over Africa and in Asia, and in the great majority of cases all that has happened has been the complete destruction of democracy, the complete destruction of individual freedom, and dictatorships arising everywhere. Therefore, I cannot understand the argument that the Rhodesian question is a moral issue. I cannot understand this slavish adherence to the Fabian idea that majority rule is the end-all and be-all of everything. It may be so one day, but for the Prime Minister to threaten the Rhodesians that there will be no independence before majority rule is extremely irresponsible.
Another point which I should like to make, having read the Blue Book, is this. The Prime Minister said a great many things, but I was surprised when he said that the British Government cannot be pushed around. He is quite right in saying that generally, but the present British Government and the Socialist Government previous to it have been pushed around by every little "tinpot" country in the world, and we are paying them to push us around. Our nationals are insulted everywhere. We are insulted in Tanzania and we are insulted by the Egyptians. The only people the Prime Minister appears to be able to stand up to are Mr. Smith and the Rhodesians. If only he had not been pushed around by everybody else I should take off my hat to him. But he is saying that to the wrong person.
I do not know what is going to happen. I suppose it will be the same old story, and in the end the British will be the great losers. I have heard the figure of £200 million quoted as the cost through the loss of our trade and through help to Zambia.
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The position is quite pathetic. I should have thought that when we have so few genuine friends in the world in these days it was complete madness to alienate Rhodesia. She is really one of the last outposts of civilisation in Central Africa. The whole of the Middle East is on the boil, and the Suez Canal is closed again, so it is extremely important for us by all possible means to ensure stability in the southern half of the African continent. We are not achieving that by our present attitude to Rhodesia. It is true enough that sanctions are hurting, but I am quite sure they will only make the Rhodesians more firm in their resolve to resist. But if sanctions continue to hurt and increase in their severity, it is the African who will really feel the pinch.
Before I end, I should just like to say that the Government ought now to become practical in this matter, and they could do worse than take a leaf out of Dr. Banda's notebook, because he is at least a realist. The Rhodesian problem has become too serious to be the plaything of Party dogma, but I fear it has become too much an issue of Party politics. If only the Prime Minister could show real statesmanship, it would be quite possible to reach an agreement. At any rate, if an agreement is not reached the judgment of history will be extremely harsh on the lack of British statesmanship. I think it will end in disaster, as things are going at the moment.
9.41 p.m.
LORD MOWBRAY AND STOURTON: My Lords, these debates on Rhodesia seem to have a somewhat timeless air about them. The last time I spoke on this subject, which was, I remember, 18 months ago, I did not speak until 11 o'clock at night, so I feel I have a bonus of time ahead of me. I only hope that it is not a prophetic omen for the future. I remember the cartoon that one sees occasionally produced of the juror in the Tichbourne case. One sees him going in as a sprightly young man, and then one sees him come out at the end of the case as an old man with a long beard. I had an awful vision, listening to some of the speeches to-day, thinking of the possible war of attrition, with sanctions, that we may well be in this position in a few years' time, still discussing the same subject.
To come more immediately to the point, I speak as one who has many friends in

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Rhodesia; and, as a citizen of this country, I feel I have a right to speak my mind freely on something about which I feel strongly, as do many other people. I regard it as a moral issue, as do other noble Lords, but I do not draw the same conclusions as certain other noble Lords. But the principle of doing the best good to the most is still basically what is wanted by everyone. I do not feel myself to be part of a "lobby", which I always thought to be something which was organised by particular people for a particular purpose. If that is thought to be the case, I personally know nothing about it. I have occasionally sought information from people who know Rhodesia better than myself but that is the sum total of what I have ever taken part in.
The noble Lord, Lord Brockway, whose speech, I must confess, I listened to with tremendous admiration, because I thought that the depths of sincerity came from his soul, spoke of the sense of disillusionment which was appearing in the African nations about the Commonwealth, and what he interpreted their views of it to be. With great respect, certain other noble Lords possibly, including myself, feel that some of the emerging nations have caused other people a certain amount of disillusionment, which is precisely why some of our friends in Rhodesia—whites, perhaps—were a little worried and upset about their future. But I do not want to be controversial.
We all agree—or most of us on this side—as the noble Lord, Lord Bourne, said in his remarkable speech, that unimpeded progress to majority rule is the desirable object of everyone. My noble Leader, Lord Carrington, has said this many times, and I do not think there is any argument about it. Therefore much of what has been said, as though we were some odd sort of people from the backwoods, living 400 years ago, does not seem to apply. Common sense tells us that not everybody has necessarily a 100 per cent. right to rule himself. We should never dream of letting small children in a primary school run the school. With an emerging people, when they have not been long out of the jungle, such an analogy is not meant to be insulting.
LORD BROCKWAY: My Lords, since the noble Lord has referred to me, I want to assure him that many of us are deeply disappointed at what is happening in many African nations. But we have to look at the position historically. They cannot leap into democracy over a weekend; and if you take the similar period in Europe you find that there was much more violence, much more bloodshed, much more that was cruel then, than in the events in Africa during the present stage. Surely democracy is the way in which one learns. They will have to pass through that stage.
LORD MOWBRAY AND STOURTON: I thank the noble Lord for those remarks, I appreciate those points completely. I think the words he used were "times of emergence." Democracy is a splendid word. We have all studied what the Greeks did and what a perfect system they had in the early days in the Republic of Athens, from which the word came. In theory, it seems to me a perfect way, given certain basic facts. This seems to mean a certain amount of basic education and responsibility. But I think we are talking basically on matters of timing—timing of emergence. I do not want to get bogged down in detail. We are agreed that eventually majority rule is wanted; and this is what must happen.
The only point I would make is that Rhodesia, as we know it now under the present Constitution, is pledged to this ultimate aim. The noble Lord, Lord Royle, accused the Rhodesian Government of dragging its feet in respect of educational policies. He suggested that they wished to keep the Africans back unnecessarily. I raised this point 18 months ago when I spoke last about education. My noble friend Lord Sinclair of Cleeve has already mentioned certain points (I have had to jettison my notes because other speakers have said most of the things that I was going to say), but perhaps I might just amplify one or two points on his educational theme.
The noble Lord told your Lordships that there were now only about 15,000 to 16,000 African black children in secondary schools, as opposed to 680,000 in the primary schools, which for Africa is an astonishing feat to sustain, when

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one realises the numbers involved. But one must say again that in Rhodesia half the population of black Rhodesians is under 17 years of age. In Britain, I think the proportion is one under 17 to three over. So in Britain, there are three adults paying the taxes to support one child. In Rhodesia, with much less wealth, one grown-up has to pay for one child. Obviously it is a much heavier burden on the adult.
Despite this, there, in Rhodesia, is a plan, which is due to start in 1969 and to be completed by 1974, that of the children leaving primary school—and by 1969 there will be 80,000 a year leaving, all of whom will have done six or seven years in primary school—the brighter half (there will be educational and intelligence tests) will go on to a further four years of secondary school education. Owing to the lack of teachers and other facilities not all of those 40,000 can be given the full, what we should call academic, secondary education. They are proposing to skim 25 per cent. of that 40,000 and send them to a full academic secondary education, leading to sixth form and university standards.
This is not the action of a reactionary Government, trying to hold back an emergent people. They are honestly trying to do a job. For the 25 per cent. of the 40,000 who have been chosen out of the 80,000 school leavers they will have 300 secondary schools finished by 1974. The Government are guaranteeing the teaching facilities and payment to the teachers. They are guaranteeing capital grants for each of the 300 schools; and this in a country being pressed down by the outside world for reasons about which we differ. They are still planning ahead to help the black African children with secondary education; and remember, my Lords, that secondary and primary education are among the qualifications to get on to the vital voting roll which they have always said is the way to future equality and majority rule. This is the way of progress. It may not be exciting and revolutionary. Certain noble Lords seem to like the word "revolutionary" because it sounds exciting, but often steady progress is better than jumping too quickly.
I should like to mention some points about sanctions. Arguments on this subject seem to me to bounce in two directions. On the one side there are
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people who say that sanctions are having no effect, and therefore—"Ha, ha!"—the white Rhodesians will be happy. There are people who cry woe, and say that sanctions are awful and that white and black Rhodesians will suffer a ghastly fate and that then we shall be able to have our way. Obviously both these are extreme views and are rather pointless ways of looking at it. I should like to mention one or two things which have come to my notice. The noble Lord, Lord Mitchison, was worried that those Rhodesians who like whisky would be unable to get it, and having heard that Switzerland was among the countries not to adhere to certain regulations he thought the Rhodesians would have to have Swiss whisky, which he felt would bring them down more quickly than anything else. It is rather sad to have to say this, but I gather that there is a saying in Salisbury that good Rhodesians drink brandy, by which they mean South African brandy. Noble Lords may remember that Sir Winston Churchill once said that which was the better between whisky and soda and brandy and soda took a long time to decide; that whisky was slightly better, but if there was no whisky, brandy was good. I think the noble Lord, Lord Mitchison, may be happy to know that that is what is happening.
The noble and learned Lord the Lord Chancellor mentioned that certain new cars were in rather short supply in Rhodesia. I have someone from Rhodesia staying with me who assures me that there are large quantities of Japanese, French and Italian vehicles—commercial vehicles and cars—coming into the country. Not only that, but there are spare parts and servicing facilities which even in this country are sometimes not available in respect of some makes of vehicles. I am assured that this is happening. There are French textiles in the shops in Rhodesia. I am told that there are arrangements to provide French textiles for Rhodesian tobacco. Some countries are not encouraging trading with the Rhodesian Government, but they seem to be turning a blind eye to certain goings-on.
Finally, my Lords, on the question of sanctions I wish to mention something which I do not think is known. I have not seen or heard any mention of it. I am told that during the last twelve weeks

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a very large American syndicate has invested something like £12½ million in dollars in Rhodesia which will be used mainly to promote the manufacture of fertiliser. That has not been published anywhere, and seems to be unknown. America has subscribed to the imposition of sanctions, yet they seem to be turning a remarkably blind eye to such goings-on.
The result of this will be that at the end of the day B.M.C., Ford, Rootes, I.C.I. and Fisons will find that other people have taken their markets. So even if we do succeed with sanctions, we end up with the achievement of our markets having gone, because in a democracy we cannot force people to buy our goods. Basically, the ruling class in Rhodesia—which I admit at the moment is the white population—are loyal to the Queen, fond of Great Britain, and wish to do the right thing. They are united, with a large part of the native population, behind Mr. Smith. If we go on pushing them, there is a danger of pushing them into the Union of South Africa. They do not want to have apartheid, though I believe the 1925 Constitution would allow it, but if we go on with this war, without constructive results, South Africa is bound to receive them in the end, and not on the best terms. Therefore I beg Her Majesty's Government to give every possible consideration to this, to be generous, and not to stand on petty points of political advantage. The long-term advantage to any Government which succeeds in bringing peace is far greater.
9.57 p.m.
LORD BESWICK: My Lords, it is over seven hours and 28 speeches ago since the noble Marquess, Lord Salisbury, opened this debate, but we still remember the sincerity with which he spoke. Many points have been made, and they have ranged widely; and I am sure that I shall be excused if I do not attempt to answer all the matters that have been put before us for our consideration. With part of what the noble Marquess said, I think we shall all agree: we all deplore the fact that this sterile conflict should continue. There is no dispute at all between any of us in this House, especially at a time when there is so much bloodshed in other parts of the world, that this dispute should be
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frustrating constructive economic and political advance in Central Africa.
There is waste—though in answer to the noble Lord, Lord Salter, and to the noble Viscount, Lord Massereene and Ferrard, who made comments to the same effect, I would stress that we should not exaggerate the economic effect on the United Kingdom. It is not possible to give the noble Lord any reliable estimate for 1967 as a whole, but assuming—as I very much hope will not be the case—that the crisis continues for the rest of this year, the net cost, excluding any effect on the price of copper, to the balance of payments may be somewhat larger than £40 million, the cost in 1966. This is mainly because Zambia has only this year begun to make drawings against the emergency assistance of up to £13·85 million which we offered to her last autumn, and because of the prospect of increased imports of higher value tobacco from North America in substitution for Rhodesian supplies.
My noble friend Lord Brockway asked about a report in to-day's Guardian which purported to refer to a letter from Sir Humphrey Gibbs to the Prime Minister. It is not the practice in the House for correspondence with the Governor, which is confidential, to be disclosed, but I can assure the House on this occasion that this report in the Guardian is not to be relied upon. The noble Lord also asked me about plans for a future meeting of Commonwealth Prime Ministers, and I have to say that no decision has been taken about that.
Hitherto doubt has been expressed, particularly on the other side of the House, about the effectiveness of sanctions. Now it seems that we all—with the possible exception of the noble Lord, Lord Mowbray and Stourton, who has just spoken—agree that sanctions are biting; and the detailed report made to us this afternoon by the Lord Chancellor must have removed any lingering doubts which any noble Lord held, or wished to hold, on that point.
But the noble Marquess, Lord Salisbury, who I think in this was supported by the noble Lord, Lord Balfour of Inchrye, went on to say—and it was a good point, so far as it went—that the people who are facing this economic threat, as a result of sanctions,

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are the same sort of people who in this country faced much greater hardship during the war years. But, of course, that argument cuts both ways. We did face much greater hardship in this country during the war. We are a people like that, who do not give up easily; and it would be a great mistake for anyone in Rhodesia to believe that, simply because the problem is a difficult one to solve, and because there are certain material losses in the course of the struggle, we shall give up.
There has been a difference of opinion during the course of this debate about the wisdom at this point of time, while Lord Alport is taking the temperature in Rhodesia, of holding the debate at all. I quite agree with the noble Lord, Lord Carrington, that this is a free country, and that it is the duty of those who feel strongly about matters to state what their views are. But surely we also agree with what my noble and learned friend the Lord Chancellor said about the danger of Mr. Smith's régime interpreting what has been said by the noble Marquess, Lord Salisbury, and his friends this afternoon and this evening as representing a significant, let alone a majority, view in Britain. There can be no question of responsible people here in this country seeking to give up the struggle to bring back Rhodesia to constitutional rule.
The noble Marquess has said that some compromise is essential; and I agree with him. But the greatest critic of the present Government cannot say that we have not made concessions, that we have not been ready to compromise. The "Tiger" proposals went so far that many responsible people in this country, and in many countries of the Commonwealth, felt that we were too ready to make concessions. But, taken as a whole, those "Tiger" proposals, rejected by Mr. Smith, did open the way for unimpeded progress towards majority rule. The noble Lord, Lord Carrington, suggested that there was some misunderstanding over what the situation would have been in the period before independence, under the "Tiger" proposals. I think that my noble and learned friend the Lord Chancellor made some reference to this same point; but perhaps I could deal with the question, as it was put to me by the noble Lord, Lord Carrington.
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Those "Tiger" proposals were rejected by Mr. Smith and his colleagues, after he returned to Salisbury. The fact is that Mr. Smith and Mr. Howman, aboard H.M.S. "Tiger", had every opportunity to discuss these matters, and there was never any indication then that they were in the least uncertain about what the position would have been. Subsequently, the régime in Rhodesia, presumably for propaganda purposes, produced a document containing questionable interpretations on points on which they affected to be concerned. These included the point made earlier to-day by the noble Lord. But they chose to ignore the statements which had in fact been made by British Ministers which clarified these matters. As regards the question of the power of the Governor and direct rule, my right honourable friend the Prime Minister said on December 8 last year—and I quote:
"At no time since informal talks began in May has there been any suggestion by the Government, of direct rule from Whitehall, or of Governor's rule in Rhodesia".
And he has since reaffirmed this position.
The noble Lord, Lord Carrington, and the noble Marquess, spoke about the obstacle presented by the policy of NIBMAR. I agree that this is one of the crucial issues with which we now have to deal, but I also believe that there has been a good deal of misunderstanding—and misunderstanding deliberately fostered within Rhodesia—as to the British Government's position. Probably I can try to make this clear. Majority rule is our objective, but we do not demand, nor do I think it would be wise or right to demand, that there should be a headlong rush in this direction. Never at any time have we sought, unduly or unwisely, to accelerate constitutional progress to this end. We have made it clear that we accept the criterion for advance to full democratic government in Rhodesia should be that of achievement, and that the maintenance of economic and social stability is the cardinal objective of our policies. NIBMAR therefore cannot, except in the minds of those who do not want to understand, mean precipitate advance to majority rule. Moreover, if the principle of NIBMAR is now an obstacle to fruitful negotiations with the illegal government in Rhodesia, the responsibility for this rests squarely on the régime.
LORD BALFOUR OF INCHRYE: My Lords, could the noble Lord clarify one

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point further, if he would be so good? If NIBMAR does not mean there is any stoppage towards self-government, does it also mean a deferring of any recognition of independence for an indefinite time ahead until the progress of self-government has gone forward?
LORD BESWICK: My Lords, it means no independence before majority rule; but it does not mean premature majority rule. But I was going, if the noble Lord will allow me, to repeat almost word for word what the Prime Minister had said about our attitude as regards NIBMAR. He said that if there was a substantial and guaranteed change in the situation in Rhodesia he would be prepared to discuss the question of our Rhodesian policies again with the Commonwealth, to whom our intentions in this respect were stated at the meeting of Prime Ministers in London last September.
The noble Lord, Lord Carrington, made some play about the precision of the words used by the Prime Minister; but I am sure, although he seems on the point of getting to his feet, that he will not expect me to add to them, and I certainly am not—
LORD CARRINGTON: My Lords, I do not in the last want the noble Lord to add to the Prime Minister's words, but I would ask him to clarify his own words, which I do not really understand. He seems to me to be saying that NIBMAR does not mean NIBMAR. Surely if he says: "No independence before majority rule", and then says, "But that does not mean you are going to accelerate majority rule, that means you are going to postpone independence.
LORD BESWICK: My Lords, NIBMAR means no independence before majority African rule; that is what it means. But when subsequently the Prime Minister was asked about his attitude to this, he gave an explanation, to which I do not myself propose to add anything. The noble Lord himself said earlier that he thought the Prime Minister's words gave some room for manœuvre, but the extent to which this freedom is used depends entirely on the constructive response which is made by others.
My Lords, if we are looking for concessions, why is it that noble Lords in this House cannot bring themselves to appeal
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at least once to the group in Salisbury to make such concessions as would enable meaningful talks to take place?
From time to time in this House I have to answer questions about incidental developments in Rhodesia consequent upon the illegal declaration of independence. For example, the other day we had a Question about the Agricultural Research Council of Central Africa, and the fact that its excellent work had been obstructed by the withdrawal of Zambia. On that occasion, and on other occasions, certain noble Lords have been at pains to say that the disadvantages or hardships caused are due to the intransigence of Her Majesty's Government in the United Kingdom. But the world does not consider it is our intransigence. Only two countries in the world speak favourably of the Smith régime. Not one single country has recognised the Salisbury Group as the legal Government of Rhodesia. Therefore, why cannot certain noble Lords of the Opposition occasionally call attention to the fact—
LORD CARRINGTON: My Lords, may I interrupt the noble Lord? I really do not think he is entitled to say that. I have made it clear from these Benches, time and time again, that I thought it was a great mistake that Mr. Smith did not accept the proposals which were nearly agreed upon on board H.M.S. "Tiger". I said again this afternoon—and appealed again this afternoon to Mr. Smith as well as to Her Majesty's Government—to come to some negotiation and agreement. I really do not think the noble Lord is entitled to use the words he has just used.
LORD BESWICK: My Lords, to the noble Lord, Lord Carrington, I would say that I am quite entitled to address noble Lords in this House without his necessarily thinking that I am addressing him.
LORD CARRINGTON: The noble Lord referred to the Opposition.
LORD BESWICK: I referred to certain noble Lords of the Opposition, and there are certain noble Lords who on several occasions recently have put down Questions, one of them on the Research Council, for example, and other of the former Federal institutions set up in the days of legality, and those noble Lords

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have complained that, when the days of the useful work of this institution were brought to an end, it was the fault of Her Majesty's Government. I am addressing myself to those noble Lords—and I agree readily that they do not include the noble Lord opposite—and I ask them why they cannot, on occasions, accept the fact that the difficulties and consequences stemming from the illegal declaration of independence are matters which Mr. Smith himself can resolve.
The noble Marquess pleaded with us to look forward to the future and not to dwell on the past. I quite agree. But what is the future for Rhodesia if there is no return to legal rule? What chance have they of building up a prosperous and stable community if they face the world as an outcast of international society? Noble Lords may say that the great international machine of economic sanctions, which is now slowly and inexorably working, may run down as the years go by. But even in that case can anyone think that there is a real future in the modern world for a country in which 220,000 of one race regard themselves as superior to the four and a quarter million of the other?
Mr. Smith himself, when justifying his I.D.I., spoke especially about the long-term necessity for investment capital. No businessmen, he said, could ever seriously contemplate massive long-term investment unless—and I quote his words—"we are masters in our own house". Now they are the masters. Emergency laws keep down all opposition. But can anyone say that any businessmen seriously contemplate nowadays massive long-term investment under present conditions? And if a Republic is declared, if they get away with it for years ahead, even if we gave up the struggle at some point, it is as certain as night follows day that the majority of human beings there who happen to be coloured, and who now live in Southern Rhodesia under the domination of the white race, will declare that they can tolerate this doctrine of racial superiority no longer, and no businessman investing could ever feel secure while that position remains.
The noble Lord, Lord Balfour of Inchrye, himself emphasised how deeply men cherish things of the spirit. Referring to the effect of sanctions, he said that material standards are not all. When
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I challenged him, he accepted that these propositions applied equally to black men as to white. And it is because they do apply that we believe there can be no real long-term future; there can be no political stability; there can be no significant economic development, unless there is a clearly seen way forward for the majority in Rhodesia to have some say as to how they are to be ruled.
When those in Salisbury who now have the power to make decisions contemplate these alternatives, I hope they will ignore what the noble Lord, Lord Balfour of Inchrye, said about the dangers of premature majority rule, because those dangers, as I have said, and as the noble and learned Lord the Lord Chancellor has emphasised, of rushing into premature majority rule do not exist. Not by the clock nor by the calendar, was how the Prime Minister put it, are these things to be judged, but by achievement.
I much appreciated what the noble Lord, Lord Carrington, said about our noble colleague Lord Alport. Whatever we may think about his opinions about this particular matter or that, none would challenge his integrity and his independence of mind. They are recognised by all. And what he has to say will be considered with great care and attention. I am sure that all men of good will will hope that he will be able to make a hopeful report.
The noble Marquess said that there were some similarities between the Rhodesian position and that of the old American Colonies, and he ended his speech, rather movingly I thought, with a quotation. I, too, will venture for the first time to end what I have to say with a quotation, and it is from the American Declaration of Independence of 1776. And that Declaration, noble Lords will remember, said:
"We hold these truths to be self-evident; that all men are created equal; that they are endowed by their Creator with certain inalienable rights; that among those are life, liberty and the pursuit of Happiness; that to secure those rights Governments are instituted among men, deriving their just powers from the consent of the governed".
My Lords, if any indication were given to Lord Alport that those who now hold power in Salisbury are ready to act within the terms of that Declaration, then meaningful talks may well indeed be possible.
10.18 p.m.
THE MARQUESS OF SALISBURY: My Lords, we have now come to the end of this long and, I think, important debate, and if your Lordships will permit me I shall be very brief in replying. I should like first to thank all those who have taken part in it. I have sat through practically every speech that has been made to-day, and there were very few of them I should willingly have missed, whether I agreed with them or not. I do not regret having gone ahead with this debate.
It has, I think, been valuable, and though it has been commendably frank it has not, on the whole, been at all bitter, with the exception perhaps of the speech from the noble Lord, Lord Royle, whose sincerity I deeply respect, although I did not agree with him, and also perhaps the speech of the noble Lord, Lord Mitchison. Lord Mitchison has kept slipping in and out of the Chamber all evening, and each time I rather hoped he had gone to bed, but each time he came back again, and I suppose I really must say something about his remarks, to which he obviously expected a reply.
LORD MITCHISON: My Lords, I was waiting to hear the noble Marquess.
THE MARQUESS OF SALISBURY: If I may say so, the noble Lord said at the beginning of his remarks, I thought rather pontifically, that this was for him a moral issue, and that seemed to justify him, if he will forgive me for saying so, in talking a great deal of nonsense, which he proceeded to do.
He painted a picture of Rhodesia which I thought had no relation to the truth. He did not say that there was a far higher degree of African education in Rhodesia than in any other Central African State. He did not say that the standards of the health service and the individual security of the African are higher, equally, than in any other Central African State. He did not even mention the hundreds of thousands of Africans who have been slaughtered by their fellow Africans in the States North of the Zambesi. He just ignored them. I should like just to say this to him—I do not want to have an argument with him at this late hour. This is for me a moral issue just as much as it is for him, and in my view I
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have far better grounds, for I stand for that ordered liberty by which real civilisation can alone exist.
Now I would say one or two words on the special points he made. He said that the "Tiger" talks broke down on the constitutional proposals, and not on the proposals for the transitional period. I know that this is one of the subjects about which people will argue to the end of time. But in fact I do not accept this interpretation, and the quotation that he made later in the debate has not altered that view. As I understand it, these Rhodesians were required to agree to an abrogation of their existing Constitution, even if it was for only four months, and revert to the status of a Crown Colony governed by the Governor and with no Parliament. That was what they simply could not, and would not, do; and I do not blame them for that.
So far as the Six Points were concerned which he also mentioned, I do not think I disagree with them, although so much has been changed since they first saw the light and though I personally would make this reservation, which I make for myself and not for what he calls the Rhodesian Lobby. It concerns Point 6. I feel personally that I must make the reservation that those to be consulted under Point 6 must be such as are capable of understanding the issues involved in their vote. I do not yet know how that is to be ensured; and as I say, I make that reservation. The noble Lord may not accept it. He may not think that it matters very much whether they understand it or not. But I do think it matters whether they understand the issues, and that is why I make that exception.
I had hoped to get something rather more definite from the replies of the Government spokesmen, indicating a more open frame of mind. But I did not get much encouragement, I am afraid, from the speech of the Lord Chancellor who, if he will forgive me for saying so, made me rather sad. He seemed to have one policy: to accept an indefinite continuation of the present sanctions, whatever misery might be caused to the population of Rhodesia, black and white. From the point of view of the Africans it seemed to me to be a case of "Save me from my friends".

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Nor did I think the House got much more out of the noble Lord, Lord Beswick. His policy appeared to be just the same: "Keep on sanctions and hope for the best". I must confess that I thought that rather a sterile position to take up, though I can assure the noble Lord that I will read carefully in Hansard what he said about NIBMAR. But whatever the present attitude of the Government may be I hope sincerely that they will consider seriously all that has been said in this debate by men as wise and experienced as the noble Lords, Lord Bourne, Lord Macpherson of Drumochter, Lord Segal, Lord Salter, and the noble Marquess, Lord Ailesbury, in his very original speech.
I thought that Lord MacPherson of Drumochter's speech was especially important, since he had been to Rhodesia and had seen Mr. Smith and brought back proposals—proposals which, one might have thought, whatever the Government's final view about them, must at least deserve serious examination. But he got a reception from the Prime Minister which drove him to the conclusion—and which can only drive most of us to the conclusion—that the Prime Minister does not really want a settlement. His mind is completely closed to any compromise. He wants no part of a settlement; he wants the whole thing in his favour. That would be very sad, for I am afraid that it is going to be all too easy to push these old friends of ours out of the Commonwealth. That is a possibility which, curiously enough, never found a place in the speech either of the noble and learned Lord the Lord Chancellor or the noble Lord, Lord Beswick.
Do we really want this to happen? These white Rhodesians are sometimes given a very bad name in this country. Yet they are—as I know, and as I think Lord Beswick knows—our own people, and they speak our own language in the fullest sense of that much-used term; that is, they stand, as anyone who knows them will know, for the same broad principles of ordered freedom as we do.
LORD SHEPHERD: Ordered freedom?
THE MARQUESS OF SALISBURY: The noble Lord says "ordered" with a slight sneer.
LORD SHEPHERD: No, I was taking the point about "ordered" freedom.
THE MARQUESS OF SALISBURY: But freedom without a measure of order is chaos.
LORD SHEPHERD: The other way round is a different thing.
THE MARQUESS OF SALISBURY: If the noble Lord will accept that, I am quite satisfied. It is very difficult for many of us to think of them as rebels, and equally difficult to think of them as persecutors of the Africans, which they are not. I agree with the noble Lord, Lord Beswick, that there must be give and take on both sides if a settlement is to be reached. But do not let us try to make them surrender that independence which they have enjoyed for twenty years. They had it, in effect, years ago when I was at the Dominions Office, and for them to go back, as it were, into the nursery just simply cannot be. Surely the wit of man can devise in some form or other what I believe is now called a "package deal" which would avert that. That is my prayer, and it is also my last word to your Lordships to-night. I beg leave to withdraw my Motion for Papers.
Motion for Papers, by leave, withdrawn.

LEASEHOLD REFORM BILL
Brought from the Commons; read 1a, and to be printed.

MINISTRY OF HOUSING AND LOCAL GOVERNMENT PROVISIONAL ORDERS (BUXTON, STOCKPORT AND YORK) BILL
MINISTRY OF HOUSING AND LOCAL GOVERNMENT PROVISIONAL ORDER (GREATER LONDON PARKS AND OPEN SPACES) BILL
MINISTRY OF HOUSING AND LOCAL GOVERNMENT PROVISIONAL ORDER (WEST HERTFORDSHIRE MAIN DRAINAGE DISTRICT) BILL
Brought from the Commons; read 1a, to be printed, and referred to the Examiners.

SAINT BARNABAS, LEWISHAM BILL [H.L.]
Returned from the Commons, agreed to.
CHURCHES AND UNIVERSITIES (SCOTLAND) WIDOWS' AND OR PHANS' FUND (AMENDMENT) ORDER CONFIRMATION BILL
PITTENWEEM HARBOUR ORDER CONFIRMATION BILL

ROYAL BANK OF SCOTLAND ORDER CONFIRMATION BILL
Brought from the Commons; read 1a and (pursuant to the Private Legislation Procedure (Scotland) Act 1936) deemed to have been read 2a and reported from the Committee.
House adjourned at twenty-nine minutes before eleven o'clock.