Sitting of 5 April 1968

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

  HIGHLANDS AND ISLANDS INDUSTRY BILL
  Order for Second Reading read.
  11.5 a.m.
  Mr. Robert Maclennan: I beg to move, That the Bill be now read a Second time.
  The establishment of the Highlands and Islands Development Board by the Government in 1965 is now almost universally acknowledged to have been an unique and imaginative attempt to tackle the tough problems of the Highlands. The measure of the problem is the high rate of emigration from the area, the serious lack of job opportunities, especially for people leaving school and college, and the high and continuing level of unemployment. In my own constituency the level of unemployment during the last two years has averaged out at between 8½ per cent. and 10½ per cent. In these circumstances there can be no room for complacency.
  The Highlands and Islands Development Board is the Government's principal instrument for the economic regeneration of the Highlands, and it is right that this House should review periodically and regularly the effectiveness of the Board's efforts. Last summer the Scottish Grand Committee examined at some length the work of the first 18 months of the Board's life, and found a record of substantial achievement.
  The strategy of the Board is now becoming clear. It is, on the one hand, to seek and encourage the development of large scale industries at a number of nodal growth points throughout the area—Invergordon, Wick, Thurso, and Fort
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  William. From the nucleus of industry created there it is hoped and expected that satellite industries, both manufacturing and service, will radiate out, bringing increased prosperity to a wide area of the Highlands. For this policy at this time there is in the air a trace of the sweet smell of success. But no less important, though less spectacular quantitatively, is the other arm of the Board's strategy of regeneration. This is to attempt to underpin the economy of the Highlands and Islands by strengthening the traditional industries, agriculture, forestry, fishing, and tourism, and the smaller industries, the small scale industries, particularly craft industries. In each of these fields the Board has had some remarkable successes following the initiatives which it has taken. At random I would merely mention the fisheries training scheme, the calf marketing scheme for the Uists, and the provision of a number of factories providing jobs for upwards of 30 people in such intractable and difficult areas as the Island of Barra.
  It is now, however, time to examine the effectiveness of the Board's powers, the powers given to it under the parent Act of 1965, and to consider whether they are suitable and adequate for the enormous task which confronts the Board. It is my purpose in introducing this Bill, as I said to the House on 20th December, to enlarge and strengthen the Board in three material respects. Hon. Members will recall that I sought to strengthen the powers of the Board by clarifying the doubt which has arisen about the Board's capacity to form and promote companies on its own under Section 6 of the parent Act, and further to enable the Board, under Section 6 of that Act, to acquire a shareholding participation in companies in the Highlands. I further sought the leave of the House to introduce a Bill to enable the Board to participate in a company in return for a loan. Hon. Members will notice that the Bill goes less far than the intentions which were then spelled out. It is my hope, however, that the deficiencies of the Bill as it stands may be made good at a later stage. I should perhaps explain to the House that the difficulty has arisen through the wording of the Long Title. After my experience, I am in no doubt of the need for expertise in Parliamentary draftsmanship.
  Mr. John Brewis: Could the hon. Gentleman tell me whether equity shareholding includes shareholding in a company limited by guarantee?
  Mr. Maclennan: I anticipated that this point might be made. My intention is that there should be no restriction on the type of shareholding in which the Highlands and Islands Development Board could participate. If the Bill does not go as far as it ought in its present form, it is open to the House to enlarge the scope of the Bill at Committee stage or at a later stage.
  The effect of this Bill is to go no further than to clarify the powers of the Board. Those who participated in the debates on the parent Bill will recall that the Conservative Opposition of that day opposed extremely vigorously Section 6, which I seek to amend, on the grounds that the powers which it conferred upon the Highlands and Islands Development Board were too wide. The reverse has proved to be the case. Far from being too wide, the powers of the Board were not sufficiently, nor sufficiently specifically, spelled out. It is my objective to clarify this obscurity, and not greatly to enlarge the powers of the Board beyond what I believe to have been the intention of the Government and of the House in agreeing to the parent Measure.
  Naturally, the view of the Board has been a paramount consideration of mine. In my work as an hon. Member representing a Highlands constituency, I have had the opportunity of seeing how the Board has utilised its powers. Nothing that I have seen of the Board's work has led me to believe that the clarification of its powers in this respect would be anything but welcome.
  The reason for granting to the Board the particular powers which I would seek to give it is that there is a considerable advantage to be gained to the Highlands from enabling the Board to take an active and direct interest in the development of companies, rather than merely fulfilling the rôle of a moneylender.
  The Board has operated most successfully under the Section 8 powers its grants and loans scheme, and has given assistance to a large number of companies operating in the seven crofting counties. The effect has been to help
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  to stabilise the economy of the Highlands, but the Board has experienced some difficulties arising from that rather limited technique of assistance. There is a wide-ranging variety of companies operating in the Highlands, and different techniques of assistance are suitable to different types of firms.
  A further point is that the equity element of a company's capital structure provides stability as well as reserves upon which the company can draw. Too high an element of loan capital can weaken it, making it harder to overcome a period of difficult trading. The under-capitalisation of companies has been a prominent feature of commercial operations in the Highlands, and a number of instances have come to my attention of companies falling on evil days because they have not been able to raise the capital necessary within the area. The Bill, I believe, will do much to remedy this situation.
  Furthermore, companies would be more likely to find it easier to raise capital on the capital market if there were evidence of participation in the company by the Board, which would show public confidence in the operations of the company and in the helpful supervisory power that participation in the company would give to the Board.
  The most effective means of obtaining control over the operation of a company is through the medium of equity participation. It is not sought to extend the control of the Board over the operation of a company against the wishes of the company. Clause 1, subsection (1)(a), provides that, where the shares concerned are already issued, the Board must obtain the consent of the company before purchasing them. Thus, the Board could not, by a process of acquiring small blocks of shares in a company, acquire effective control without the agreement of the directors. In the Highlands the majority of companies are private, and in the case of private companies it will already be provided in the articles of association that the directors may decline to register a transfer of shares. Therefore, the words in the Bill "(with the consent of the company concerned)" would be effective in the acquisition of shares in public companies. In other words, this goes no further than Section 6 of the 1965 Act; there is no power here of compulsory acquisition. This point I

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  emphasise strongly, as it is open to misrepresentation.
  A further argument in support of enabling equity participation to be entered upon by the Board is that, although it may not wish to have complete control over the affairs of a company, it is reasonable that it should have a voice in its management policy, especially when they have provided a major source of the company's finance. In some cases the Board is supplying risk capital, taxpayers' money, on loan, and it is therefore proper that the public should share in the rewards of the Board's enterprise.
  It will be clear to hon. Members that, under Clauses 1 and 2, as under the parent Act, the approval of the Secretary of State for Scotland and the Treasury will be required. There can be no question of the Board being directly involved in major schemes of investment without such approval. My understanding is that the present limits operating upon the Board's granting of loans will be operative with regard to its powers under Clause 2, which amends Section 8 of the 1965 Act. The use of these powers would provide the Board with considerable assistance in a number of different spheres of activity. The experience of the Board has already shown that, in the important task of providing new manufacturing industry in the Highlands, its job would be greatly assisted by the extension of its powers.
  It is widely recognised in the Highlands that, in the past, there has been too great a dependence upon the service industries. The difficulty has been to establish manufacturing industries on a sound footing. No one would consider it to be a healthy situation when half of Scotland is dependent to the extent of 90 per cent. upon service industries.
  Whatever views one may have of other Government Measures which are beyond the scope of the Bill and probably beyond the scope of discussion today, this is clearly a most unhealthy situation. I make no great claims for my Bill to be more than assisting in a small way, but it is my intention in a small but important way to seek to strengthen the industrial sector of the Highland economy.
  I advance this view in the knowledge of the experience of the Board in more
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  than one instance. To take a specific case which has come to my notice, because of the apparent limitations on the Board's power, it was forced to give assistance by means of a large capital loan to a company whose existence was crucial to the community in which it was located. The result was seriously to distort the capital structure of the company, although it has been remedied to some extent by the making of a special grant. If the Board had had the power to participate by means of an equity shareholding, it could have put the company on a much sounder foundation. I am not at liberty to disclose the name of the company. Obviously these commercial matters are best kept private.
  There is also a scheme under consideration at present which would offer jobs to several hundred people in an extremely intractable area for which the Board has responsibility. I believe that it depends upon the Board having this power to bring about the successful conclusion of the proposal. Here again, I do not want to be more specific, but I assure hon. Members that I make the claim on good authority.
  I believe that the Bill embodies a useful extension of the powers of the Highlands and Islands Development Board. If the Board is to be able to tackle its formidable task effectively across the broad range of industrial activities which it seeks to foster, it must be armed with adequate and suitable powers. As I have said, there was criticism that the powers were too wide sweeping. In practice, however, this has not been found to be so. The power to participate in an equity shareholding of a company is an appropriate one which could be used to great effect in the vitally important job of liberating the untapped resources of the Highlands, and it would assist the Board's work in securing and enlarging the prosperity of the whole region.
  11.25 a.m.
  Mr. John Brewis: Mr. Speaker, it is interesting that you should call me immediately after the hon. Member for Caithness and Sutherland (Mr. Maclennan). The hon. Gentleman represents the constituency which is the furthest north on the Scottish mainland, whereas I represent the one which is furthest south. My home is slightly

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  south of Newcastle-upon-Tyne in latitude, but it is still possible to see the Highlands from parts of the area. I refer, of course, to the Mull of Kintyre. That shows the enormous territory which is covered by the Highlands and Islands Development Board.
  It is interesting to note that, in the southern Highlands of Galloway, we have problems which are just as bad as those in the Highlands proper. We have a high rate of unemployment, and the problems of depopulation in the Machars of Wigtownshire are worse, if anything, than in the Highlands. We are green with envy at the amount of money which has been spent by the Scottish Office over many years on developing the Highlands. It runs at slightly over £120 per head per year, whereas in the south it is very much less. It is apparent from the Board's report that it has managed to encourage some 14 different manufacturing industries in Shetland and 10 in the Isle of Lewis, while in the South I can think of only two which have come to Galloway since the, Labour Government have been in power.
  The powers of the Board which the hon. Gentleman seeks to extend militate against other parts of Scotland. Previously, the part of the country of which I speak was a development area. Now it has to compete against the priority being given to the Highlands and Islands Development Board. If I may give the House one example, a small manufacturing business has just started up in my constituency. It is quite unable to get help from the Board of Trade because it is in what is known as temporary premises. However, as I understand it, it could get loan or grant assistance from the Board if it was in the Highlands, as the Board thought fit.
  It appears that there are other ways in which the present Government have hindered development. Taking the same example, which is a family business running a small factory, it is very unlikely that, as it prospers, it will want to form a company. Corporation Tax and other Government measures make it less desirable to form companies than was the case hitherto. As a result, it will probably develop as a partnership.
  The main object of the Bill is to buttress industries which are liable to
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  fade out or go bankrupt. Certainly there is power in Clause 1 for the Board to subscribe for shares to a new company. I would have thought that that was explicit in the Bill. However, there seems to be no power to help a business which is more likely to develop as a partnership, and I wondered if it occurred to the hon. Gentleman when he drafted his Bill that it might be desirable to give the Board power to take an interest in a partnership of the sort that I have mentioned. We on this side of the House believe that it is very much better for private enterprise to develop areas where it can operate profitably. There are limits. Where it cannot make a profit, private enterprise cannot operate.
  If one considers Aviemore, it is interesting to see that the two big hotels owned by the Rank Company and the Fraser Company have invested at least £1 million of private capital in the Highlands, with good results for the surrounding district. If this had to be done by the Board, it would have meant the expenditure of public funds to a greater extent than the £1 million which it is intended to spend on hotels over the next five years. It is the Government's duty to create the conditions in which private enterprise can flourish.
  The chair lifts provide an excellent example. The first chair lift at Aviemore was put up by a consortium of hotel keepers and other business interests in the district. It is difficult for a chair lift to make a profit when one realises how short the ski-ing season is. Although it is used in the summer, it is hardly likely to be used to any great extent then.
  Is it the hon. Gentleman's intention that the Board should take shares in companies such as that, and is it his intention that the Board should create conditions in the Highlands to attract other industries? The chair lift company is limited by guarantee, and it may be that it is outside the provisions of this Bill, but I understand that the Board has already made this company a considerable loan? Why is it necessary for the Board to take shares, when it has power to grant loans?
  There are many other ways in which Socialist policy has militated against the development of the Highlands. Mr. John Rollo, a distinguished member of the Highlands and Islands Board, said about

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  three years ago that the Highland Board had suffered
  "A body blow, the second time in five months that the Board have had their feet kicked from under them."
  The second time to which he was referring was not the Transport Bill but to the development area status, and similar remarks were made recently by the Reverend J. I. Andrews of the Presbytery of Wigtown and Stranraer. Speaking about the S.E.T., he said: "From a rural Presbytery the members should take note of the legislation's effects"—local people were realising the iniquity of a measure designed to move—
  Mr. Speaker: Order. Second Reading debates are fairly wide, but not so wide as to cover the whole of the taxation system.
  Mr. Brewis: I am obliged to you, Mr. Speaker. I merely point out that 76 per cent. of the people in the Highlands are employed in service industries, and I wonder whether it is the hon. Gentleman's intention that the Board should take shares in some of these service industries, such as garages and transport undertakings, which are liable to be badly hit by other legislation which the Government have introduced.
  I know that hon. Gentlemen opposite have strong feelings about landowners. They want to kill them off, in the same way as we on this side wish to kill the Transport Bill, but if one looks at some of the things done by private enterprise and by landowners in the Highlands, one realises that they have helped the area to a considerable extent. The Isle of Colonsay is likely to be sold in the near future because of heavy taxation measures introduced by the Government, and in particular the more recent ones. Is it suggested that the Board should go in there and help in a place where the landowners have kept the community going for so many years?
  There are other examples of public enterprise having failed. When the National Coal Board came into existence, it refused to take over the Brora colliery. It was a Conservative Member, Sir David Robertson, who took over the business and kept it going.
  Mr. Maclennan: With regard to Broro colliery, is the hon. Gentleman aware that the Highlands and Islands Development Board has provided a large sum of money to enable the life of the colliery to be extended by enabling it to drive bores to determine whether there are new seams there?
  Mr. Brewis: I am interested in that. Is it the hon. Gentleman's intention to ensure that where the National Coal Board fails to take over an enterprise, the Highlands Board will go in and put right what public industry has failed to do?
  Another matter which worries me is the reorganisation of the Egg Board, and the position of the poultry industry in the Orkneys. I am glad that the right hon. Member for Orkney and Shetland (Mr. Grimond) is here. If the Government surrender to the pressure of the intensive livestock producers in other parts of the country, and the Egg Board is no longer able to carry on in its present capacity, this may create considerable problems for what is at the moment a flourishing industry in a remote part of the world. Is it proposed that the Highlands Board should be able to step in and take shares in a co-operative packing station in the Orkneys where public enterprise is not able to carry on?
  I give a rather tepid welcome to the Bill. I think that the power to take shares in industrial ventures is covered by the Industrial Expansion Bill which we discussed recently, although its name is misleading, and it should perhaps be called something like the proliferation of nationalisation Bill. I think that a simple Amendment to that Measure would give the Highlands Board the power which is sought here. On the other hand, it may be that these powers will be suitable for certain social developments. I shall therefore not oppose the Bill, in the hope that it will bring some needed help to the Highlands.
  11.37 a.m.
  Mr. George Willis: The general tenor of the speech of the hon. Member for Galloway (Mr. Brewis) is typical of the attitude of hon. Gentlemen opposite to the Highlands and Islands Development Board. Until he said at the end of his speech that he gave the Bill a tepid welcome, I was at a loss

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  to understand whether he was supporting it or not. The attitude of hon. Gentlemen opposite ever since the first Bill was introduced has been rather schizophrenic. At heart they really do not like the Board, but politically they have found it expedient to support it. This is really the cleft stick in which they have found themselves. I can understand their political difficulties. I can understand why, for political reasons, they give things a tepid welcome.
  This is a good Bill, and I congratulate my hon. Friend the Member for Caithness and Sutherland (Mr. Maclennan) on introducing it. It is an important Bill. It will add important powers to the armoury of powers possessed by the Board, and will enable it to tackle its job in a much more flexible way than it has been able to do in the past, particularly in regard to industrial development.
  In its first annual report, which I consider to be one of the best reports that I have seen on the Highlands, and in which it set out its general strategy, the Board made some interesting comments. After dealing with agriculture, forestry and tourism, it said:
  "Manufacturing industry is the third main prop and we increasingly regard it as the must urgent of all relative to the immediate need to stem a substantial proportion of the emigration of talented sons and daughters from the Highlands and Islands."
  It went on to say that
  "industrialists…do not flood in voluntarily, or even through general publicity drives."
  Then it said:
  "Without it, the region will continue to lack an f real possibility of a substantial enough rise; in numbers to give credibility to High-lard regeneration."
  This sets out the position of the Highlands and the importance of developing industry. Later the Report sets out the Board's overall strategy for the development of industry, namely, to encourage
  "the growth of industrial enterprise wherever a developer shows a personal and specific desire to settle or expand his enterprise; we will pursue, however, a more methodical programme of building small industrial growth points in scale with the possibilities of the West and islands."
  Later it says, in respect of larger-scale operations, that
  "we will do our utmost to generate major growth points".
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  It sets out the importance of industry in the Highlands. We should do all we can to strengthen the powers of the Board to enable it to tackle this desperately important problem.
  When the original Bill relating to the Highlands and Islands Development Board was introduced we thought that the Board had these powers. We thought that they were intra vires—a good legal phrase—and it was not until the Board had been set up and, as one of its first actions, had become interested in the Cairngorms development that the argument arose whether or not it had those powers.
  At that time the Cairngorms Winter Sports Development Board was in a difficult position. Vast developments were required. Because of the hotel developments that were going on there certain other developments were required, in the Cairngorms, and the old Development Board did not have the necessary capital to carry them out. The Highlands and Islands Development Board went into assist—first, to provide an additional tow. Then a new company was formed—the Cairngorm Sports Development Ltd.—and the question arose whether the Highlands Board could invest in the company in equity.
  A legal argument developed on the question whether this was intra vires or ultra vires, and the general view was that it was ultra vires. As a result, the Highlands Board took £25,000 worth of debenture shares in the new company, that being the only way in which it could then assist the company. The Chairman of the Board went on to the board of directors. Thus, at that early stage—1966, at the beginning of the life of the Board—the whole question arose of the powers of the Board to invest in companies.
  This was important because, as my hon. Friend has said, one of the weaknesses in the Highlands has always been that no capital has been invested there to bring about the necessary development. What capital there was in the Highlands sought areas other than the Highlands, which were much more profitable as a field of investment. There has always been a shortage of capital.
  Many companies in the Highlands failed for two main reasons: first, lack

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  of capital and, secondly, lack of managerial skills and marketing techniques. The Government have done something to help in the provision of managerial skills through the Scottish Council (Development and Industry), and now these powers have been passed to the Highlands Board. I do not know what progress has been made, but the Board must now undertake the task of providing this necessary element if industry is to develop properly in the area.
  The House has recently passed the Industrial Expansion Bill, which gives the Government the right to take up equity shares in industrial developments where certain plans were made. I see no reason why this power should not be given to the Board. It is the planning authority for the Highlands. It has been given responsibility for fostering industrial development. In those circumstances, it should have the powers which the Government have sought for themselves in other areas, where the Government are responsible for the kind of industrial development and expansion which was visualised in the Industrial Expansion Bill.
  I have always thought that when the Government invest money in private industry, since the taxpayers have to stand any losses it is only right and equitable that they should share in any profits. I could never understand the opposition to this view. I could never see that this was wrong. For these reasons I welcome the Bill and I congratulate my hon. Friend on having introduced it—and, in doing so, having displayed his knowledge of the needs of the area and the work being done by the Board, as well as the difficulties that it has met. I trust that the House will give the Bill a Second Reading.
  11.47 a.m.
  Mr. J. Grimond: I must apologise if I have to go before the debate ends, as I have an appointment in Scotland in the late afternoon.
  Under the Bill no firm in the Highlands will be forced to accept the Development Board as a shareholder; it will be open to the firm to say whether or not it wants the Board to take equity shares. But the Board may insist that
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  if it is to give assistance at all it should be in the form of some sort of equity holding. If the Board wants these powers I would not oppose it, but at some stage we should be told a little about the way in which the Board expects to exercise them.
  The Board itself is short of business and managerial skills. It has no prominent businessmen on it and, as far as I know, no call on business ability. How will it play the part of an equity shareholder? Let us suppose that it takes an equity shareholding; would it attempt to influence the policy of a company? This problem has already arisen in the case of the Government's shareholding in the British Petroleum Company. There the Government directors have been largely sleeping directors.
  In my view, this is a mistaken policy. If the Government go into business as equity shareholders and, if, as a result, they appoint directors to a company, they must take some responsibility for the running of that company.
  This raises difficult and important questions. First, one of the rôles that the Government must play is an arbiter between such a company and different sections of the economy. To my mind, the main rôle of the Government should be to stand back from the economy and do the overall planning. This is much more difficult if the Government are directly involved in certain companies. This, too, may be a dilemma for the Board.
  Secondly, the Government are not elected or selected for their business ability; nor is the House; nor are civil servants recruited for these purposes; and nor, as it is at present, is the Board. This raises the question whether the Government or we in this House or the members of the Board are suitable people to intervene directly in the affairs of companies.
  It may be said that there is another reason for equity shareholding, that the taxpayer, if he puts up funds, is entitled to some share of the profits. That is perfectly reasonable, but any company which thinks that it will make big profits in the Highlands in this way will not accept an equity shareholding. I fear that, as has happened before, the Government or Board could be left with

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  some extremely risky and unprofitable shareholdings. This is the danger of nationalisation—whether one favours it or not—that the Government are always left with the unprofitable industries.
  Also, it is by no means proved that Government participation leads to big profits. Just the opposite. The steel industry, the most recently nationalised, is already in the red. Therefore, I am not clear that the taxpayer will gain from this Bill. Of course, it will not deal with many problems in the Highlands and will not touch the most important? The future of the egg industry in Orkney is causing concern, but no one would claim that the Bill will deal with that kind of problem.
  This is not necessarily a criticism, but we should be clear that the major problem is that the Board is pulling against the tide of general Government policy. For instance, the increase in costs under the Transport Bill and the Selective Employment Tax are against any policy of Highland development. As these matters have already been mentioned, I feel entitled to mention them again—
  Mr. Speaker: Order. The right hon. Gentleman may just mention them.
  Mr. Grimond: It is necessary to encourage industry in the Highlands—although I am not clear that the Bill will lead to any great flow of new industries; but that is a matter of opinion—but it is also important to encourage existing industries. Some people may deplore the amount of employment in service industries in the Highlands, but nevertheless it is there and there is no alternative. I do not hold the old-fashioned view that service industries are more disreputable than manufacturing. It is noticeable that, although the Government complain about the amount of employment in services, the biggest service industry, the Civil Service, both local and national, has risen by leaps and bounds and is the main growth industry in the Highlands.
  We should not pretend that the Bill will touch the main difficulties which the Board faces. But if the Board requires these powers, I can see no grounds for sinister objections to this as nationalisation by the back door, because any firm can refuse this assistance, and if they ask for it, it cannot
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  be argued that the Board should be deprived of enforcing certain conditions. I should like far more explanation of how the Board will help industry and how it will operate.
  As I said, up to now, we have not begun to grapple with the problems posed by this piecemeal entry of the Government into private industry. This policy will not bear examination, from any point of view, but, since we are embarking on this course in different Acts and in different parts of the country, I do not oppose giving the Board these powers if it wants them.
  11.55 a.m.
  Mr. Malcolm MacMillan: I join my right hon. Friend the Member for Edinburgh, East (Mr. Willis), who was the Minister in charge when the Highlands and Islands Development (Scotland) Act was piloted through Committee and did a very good job—a job, made no easier by our close examination of the Bill almost line by line—in congratulating my hon. Friend the Member for Caithness and Sutherland (Mr. Maclennan) on his enterprise in introducing the Bill and his powers of perception and shrewd interpretation in noting the loopholes which Government draftsmen left in a Government Bill even after very close and long examination by the Committee and a good many changes by Ministers. That takes some doing, so he need not be modest about one little slip in drafting, which can easily be remedied.
  No one has so far disputed my hon. Friend's view that the Board should clearly know what its powers are—completely and adequately—so that it will not lack confidence and certainty in promoting measures which we all want in the Highlands to assist existing businesses and create new ones, as well as to reorganise and regroup smaller business units into bigger, viable entities for marketing and other purposes.
  No hon. Member openly opposes these aims. Since the original Act was passed, hon. Members opposite, despite all the flaws which they originally found in it, have often come forward asking that their constituencies should be brought within the area of the Board's powers and of the Development Act. Presumably, that means all the wide existing powers of the

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  Board, in every respect, industrial and otherwise. Therefore, there can be no serious objection by hon. Members opposite—unless they are completely split on this issue, as I do not think they are. Every Highland Member opposite and every Member for areas bordering the Highlands wants the introduction of a considerable amount of suitable industry. I do not want to be unfair to them, but they have all pleaded that the whole of that wider area, the Highlands and well beyond, come under the Act. Their ambition, therefore, must be to come under the Board in all its activities and powers.
  My hon. Friend the Member for Caithness and Sutherland said that the Act and the creation of the Board is one of the proudest achievements of this Government, and he is right. This was talked about for many years by the Liberal and Labour Parties, and by the Conservative Party, though, by them, much more belatedly and diffidently. Now, the job has been done by the Labour Government; the Board has been created and, in the short time that it has been in operation, it has had considerable success in many fields. Many businesses in the Highlands owe their continued existence, others their expansion, to the intervention and assistance of the Board.
  The hon. Member for Galloway (Mr. Brewis) paid tribute, although a little obliquely, to the Board by saying that it had done so well that assisted businesses in the Highlands are now threatening those in the Lowlands, or, at least, some in the border areas, including his constituency. His case, therefore, was for extending powers of the Highlands and Islands Board's kind under some similar agency, to the borders. That is what he was asking for indirectly when he spoke of the over-success of the Highlands Development Board's work in what he regards at the moment as creating too favourable conditions in opposition to his area. That is a wonderful advertisement for the Board's success and desirability.
  The right hon. Member for Orkney and Shetland (Mr. Grimond) would like to know how the Board will operate in this field, given these extended powers, and how far it will go with this proposed extension of powers, although he did not
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  quite oppose their being given. But that is ultimately a matter for Parliament and for the Secretary of State. There might otherwise have been one or two major blunders lacking overall scrutiny; but I do not think that the Board at its worst would get as far as that stage, since it would bring the Board itself tumbling down. No Government would allow any such public agency to go too far in the direction of major financial mismanagement.
  It would not be such a bad thing, at times, if there was not, even now, so much reference back by the Board to the Secretary of State. Although my right hon. Friend must be responsible in the end, within the control of Parliament, perhaps a few rather incautiously worded statements made by some people in senior Government authority have in the past caused the Board to become a bit discouraged. After all, merely the loss of a few thousand £s placed in an unsuccessful venture or two scarcely justify the wild critical statements made by some people that it might have resulted in the Board losing confidence had it paid too much heed. The Board must act with the supervision of the Secretary of State, so that ultimately Parliament is responsible. I suggest that that answers any criticisms on possible irresponsibility. But it must have freedom to experiment, too.
  In many respects the Development Act was a model one and I have no doubt that other areas, in England as well as in Scotland, would like similar legislation operating on their behalf. Some have said so publicly already. It will be remembered by hon. Members who served on the Scottish Committee how closely the Bill was scrutinised. I recall making over 50 speeches when it was going through Committee and the House. Those speeches provoked almost as many others; and when one realises that each of those had to be answered by the Minister, one can see that the legislation was thoroughly debated and examined. It is, therefore, remarkable that my hon. Friend the Member for Caithness and Sutherland has not only been able to pick at the drafting of this part of it, but has been able successfully to fill the cavity with this Bill.
  My hon. Friend enunciated three priorities in relation to the Bill, which

  773
  he said were of vital importance. The first was the financing of companies by the Board by the issue of risk-bearing equities. This is particularly important in Highlands and Island areas, where there is a great shortage of risk capital. The second aim was the creation of new businesses in areas where they are badly needed. The third was the reorganisation and regrouping of inadequately equipped and smaller firms which are anxious to co-operate in being reorganised and re-equipped to their advantage in operation and trading.
  We all want to see an extension of manufacturing industry in the Highlands and that is what my hon. Friend is trying particularly to assist businesses to create. Throughout the Highlands and Islands, too many people are dependent on seasonal, part-time and outdoor employment, particularly in the service industries. Like other hon. Members, I have no wish to criticise the service industries, particularly since one Government after another have in the past placed the emphasis on these industries—a good example is the emphasis they have placed on tourism—almost to the exclusion of manufacturing industry. That is why it must be admitted that it is foolish and harmful to penalise the tourist industry through the Selective Employment Tax and—
  Mr. Speaker: Order. The hon. Member is going wide of the Bill.
  Mr. MacMillan: I accept that you would not wish the debate to extend into a full discussion of those matters, Mr. Speaker. My one brief reference is over.
  Mr. Russell Johnston: Would the hon. Gentleman accept that according to the right hon. Member for Edinburgh, East, the idea which stimulated the hon. Member for Caithness and Sutherland (Mr. Maclennan) to introduce the Bill arose from the difficulty that was experienced in assisting a service industry, not a manufacturing industry, in my constituency?
  Mr. MacMillan: I accept that in many respects the service industries in the Highlands and Islands are as important in their own way as manufacturing industries. After all, at present they provide far more employment. However, we want to see a diversification of industry and
  774
  not what we have at present—an almost total dependence on seasonal, casual employment, resulting in high levels of unemployment, without full social security cover and, often, no unemployment benefit.
  The agency which all political parties have accepted now, and which is working successfully in our Highlands and Islands region is the Highlands and Islands Development Board. That is the view of virtually everyone in those areas. Nobody any more wants to destroy or even seriously modify the original legislation. Equally, nobody appears today to be wholly opposed to this Bill. I suggest, therefore, that there is no reason why me cannot have unanimity on this occasion. I accept that hon. Members may have misgivings about the Bill. Despite that, I hope that the official attitude of hon. Gentlemen opposite will be that the Bill is entitled to their complete blessing.
  We are desperately anxious to find employment for our people in the Highlands and Islands, not only at the growth points but throughout the area. Let me mention that, officially, in the view of the Government, Stornoway, in the Western Isles, has been scheduled as a growth point. One of the dangers of the growth point theory is that it can attract growth away from outlying places. Therefore, minor growth points in outlying areas must be created. It is vital, therefore, that any responsible public agency operating in this region has sufficient power to assist small businesses which have the enterprise and courage—perhaps, in cases, they have no alternative but to have enterprise and courage—to stay in outlying areas. It must, moreover, help them to modernise and grow. We should support the Bill if only because it could help the Board to achieve that result.
  With its continuing contact with an answerability to Parliament, I cannot think of a better agency than a Board of this nature which is able, with a sense of responsibility, to assist freely and adequately those with enterprise and promise, but who seek financial help. This is particularly important for existing industries which need only additional finance, and particularly at times when they are unable to raise money in the market on their own.

  775
  I remember arguing in Committee on the original legislation about the importance—at that time it was desperately needed in my constituency—of tide-over capital for firms which would otherwise fade out, resulting in a serious loss of jobs and development. We have now gone past that stage. The Board has powers. But, had the Board been in operation at that time, one firm of which I can think—and, no doubt, others have been in the same position—might have been saved before the point of no return was reached.
  It is important that the Board be able not only to attract, sustain and encourage industries, but that quick assistance be available in a practical form for local firms in trouble, and in most cases the practical help that is needed is finance. Power to engage in such help by investment through equity interests is vital and firms require help of such a character to come from a dependable source. As I pointed out, the Secretary of State must always ultimately supervise these matters when they are on a larger scale. Ultimately he is responsible to Parliament and he must, therefore, ensure that the schemes are sensible, are run well and that public money is properly handled.
  Now that Conservative Members opposite have now accepted the Board and its legislative basis, the Act, and admit that they wish to see the Act's advantages extended to their own constituencies, I hope that they will go further today than saying that they will reluctantly not oppose the Bill and, despite some of their misgivings, will give the Measure their positive, helpful blessing, rather than their muted blessing with faint praise.
  Their constituents, like mine, are desperately anxious to see the creation of suitable manufacturing industries throughout the area we are discussing. It is vital that these new industries are created, particularly in an area like mine which, year after year, has had winter and spring unemployment running at between 27 per cent. and 29 per cent. or more. They want good insurable continuing jobs in manufacturing industry under a factory roof to enable them to get away from their dependence almost wholly on service industry and on seasonal and casual employment, which means heavy seasonal unemployment. I therefore welcome the Bill.
  12.09 p.m.
  Mr. Ian MacArthur: When the hon. Member for Caithness and Sutherland (Mr. Maclennan) first announced his intention to introduce a Bill of this kind, I was suspicious of what he proposed to do.
  Mr. Willis: The hon. Gentleman is always suspicious.
  Mr. MacArthur: I am always suspicious of anything which at first sight appears to smack of Clause Four. From what was said originally I feared that the Bill would be more concerned with Clause Four than with the cause of the Highlands and Islands. Now, however, the hon. Gentleman has comforted me a great deal by his remarks, and I have also been comforted by reading the Bill, which we saw for the first time only a couple of days ago. The hon. Gentleman made it clear that the Bill does not confer any compulsory powers of acquisition on the Board, and I welcome this. It would have been contrary to the Board's rôle had compulsory powers of that kind been given to it.
  I congratulate the hon. Member on presenting his Bill so clearly, but he did not convince me of the need for these new powers. Yesterday, I again studied the first annual report of the Highlands and Islands Development Board. It was a very good report. Certain parts could be questioned, but so can parts of any report. I welcomed, in particular, the Chairman's opening declaration of faith. But I could not detect any demand by the Board for these additional powers—if, indeed, they are additional to those already in the principal Act.
  Nor have I been able this morning to discover from the hon. Gentleman any precise demonstration of the need for these powers. He referred to one company—and I understand that he must be circumspect in his reference to commercial enterprises—in which the provision of a loan has led to a distortion of capital structure but that had been redressed in the end by the provision of a grant. If that was so, I fail to see why these powers should be necessary in such a case.
  We should note a point of risk in the principle of the Bill. While the voluntary principle is retained in Clause 1,

  777
  there could be a certain element of compulsion. According to my reading of tae parent Act, the Board could lay down as a condition of grant aid or loan aid its acquisition of part of the equity holding in the company. Such "voluntory" action by the Board would smack a little of the old, traditional, voluntary nature of some aspects of life in the Army—" You, you and you."
  Section 8(2) of the principal Act empowers the Board on making a grant or loan to
  "…impose such conditions as they think fit.…
  That is a big power, and could—I do not say that it would—lead to the suggestion that a loan or grant would best be obtained if the Board were invited to acquire some part of the equity holding. That may be unlikely, but the House should consider the unlikely as well as the likely consequences of legislation.
  The hon. Gentleman said that it would be helpful to the Board to have these additional powers, but he did not say that it had requested them. He said that the powers would not be unwelcome to the Board. I can well understand that, but no one has yet demonstrated to me the need for them. The Board already have very extensive powers, and when we debated the original Bill, many of us on this side expressed doubts about their extent. I am gratified that the Board has not invoked them all, as I am sure that to do so would be contrary to the public interest. The Board has interpreted the Act with benevolence. I hope that it continues to do so, and that these larger powers will not be used.
  It is worth reminding ourselves of some of the powers contained in the parent Act. The Board already has power to acquire land compulsorily, to hold and manage land so acquired, and to
  "…dispose of or otherwise deal with such land."
  Section 5 says that the Board may
  "…erect buildings or other structures and carry out works or other operations on land…"
  By Section 6, the Board may
  "…acquire by agreement and carry on or set up and carry on, directly or through an agent, or themselves carry on as agent, any business or undertaking which in the opinion
  778
  of the Board will contribute to the economic or social development of the Highlands and Islands…"
  Should any doubt remain of the extent of its powers, we have the splendidly all-embracing Clause 9(1)(d), which gives the Board power
  "…to do all such things as are incidental to, or conducive to the attainment of the purposes of, any of their functions."
  Mr. Willis: Does not the hon. Gentleman appreciate that the Bill's method of giving financial assistance for the purposes outlined by my hon. Friend the Member for Caithness and Sutherland (Mr. Maclennan) is an additional means whereby the Board may well find it unnecessary to use the powers given to it in the principal Act? That being so, I should have thought that the hon. Member would welcome the Bill because of the flexibility it gives to the Board.
  Mr. MacArthur: Equally, the extra powers could lead to developments that might be unlikely, but developments which the House should note.
  Certain other questions of basic principle, and some practical questions too, are involved in the Bill. Referring to the most obvious practical question, I remind the House of what both the hon. Member for Caithness and Sutherland and the right hon. Gentleman the Member for Orkney and Shetland (Mr. Grimond) said: that if the Board were to acquire some part of an equity shareholding it would have a responsibility for the day-to-day management of the firm concerned. The one follows almost inevitably from the other.
  A further question is whether the Board has the competence or the staff to take on such a responsibility. I remember very well calling attention in the Scottish Grand Committee to the enormous responsibilities carried by the Board, and the vast amount of work with which it had to cope. The first annual report demonstrated the point impressively and showed that all that work was being done with an executive staff of 18 people. I asked how we could expect the Board to take on some of the larger responsibilities for business management which some hon. Members wanted it to shoulder. I repeat that question today. If the Board is to have a managerial rôle within commerce and

  779
  industry, has it the skill, the competence and the staff to carry out such heavy responsibilities?
  I turn now to some questions of principle. If the Board is to have a co-ownership rôle in a firm, there might be a consequent questioning of the Board's impartiality if approached by a competitor firm. However fair and just and honest the members of the Board are, and, I am sure, will always be, they could no longer appear to be impartial if they had a co-ownership rôle of that kind. We shall need substantial reassurance on that point because, above all things, if the Board is to fulfil its objectives, which we all support, it must be seen to be impartial by all who may wish to approach it for aid. That impartiality would be weakened by the Bill.
  There is a second consideration of principle. If the Board acquired a shareholding of this kind, it is at least likely that it would be a shareholding in a shaky or risky business, otherwise those running it would be unlikely to seek partnership by the Board in the equity shareholding. I suggest that there would be a natural pressure on the Board to continue to keep that firm in being and to fall back on the taxpayer to prop up what might be a commercial failure.
  Mr. Willis: Is that not also an argument where a company receives a loan or a grant from the Board?
  Mr. MacArthur: There is a wide difference between providing a loan or grant, with such conditions attached as the Board may determine—that power is given in the Act—and setting up the Board as co-owners of a business with the resources of the taxpayer behind it.
  Mr. Brewis: Am I not right in thinking that when a loan is made on mortgage or debenture the Board has a prior charge on the assets of the company, which protects public money?
  Mr. MacArthur: I am obliged to my hon. Friend for making that point.
  There is a further point of principle. In Section 11 the Board is given very wide powers to obtain information. If the Board were to secure a shareholding in a company, it would naturally and rightly want to make that company a
  780
  success. In the course of trying to make the company a success, it might require much more information about marketing, business conditions and experience among competitors than the firm could provide. In that case the Board would have power under Section 11 to require competitor firms to provide confidential commercial information. That would put the Board in a position of commercial privilege which certainly should not be extended to the acquisition of information to benefit a firm in which the Board has a direct day-to-day financial stake.
  While we all applaud the intent of the Bill, which is to help the Highlands to develop further manufacturing employment, I seriously question some of the practical issues which arise from the Bill and some of the matters of principle on which we should carefully reflect before giving the Bill a Second Reading.
  If the Government are seriously determined to help the Highlands, there are other measures which they can take. I suggest a three-point programme. First, they should free the Highlands, and Scotland generally, from the increase in petrol duty and vehicle licence duty. Secondly, the Government should withdraw the Transport Bill. Thirdly, and most important of all, they should free the Highlands from the wretched Selective Employment Tax which takes out of the Highlands much more each year than the Highlands Board can put in.
  12.24 p.m.
  Mr. Russell Johnston: I congratulate the hon. Member for Caithness and Sutherland (Mr. Maclennan) on introducing the Bill, and, indeed, on his good fortune in being allotted the time in which to do it. That is a fortuitous circumstance with which I am sure he is pleased.
  In common with my right hon. Friend the Member for Orkney and Shetland (Mr. Grimond), who unfortunately has had to leave, and a number of other hon. Members who have spoken, I have doubts about the basic difference which the Bill will make and I wonder why it has been felt necessary to introduce it at this time. As was said by the hon. Member for Perth and East Perthshire (Mr. MacArthur), we have had the Bill in our hands only since Wednesday. Generally speaking, this is a practice

  781
  of which the Government itself is guilty. I regret the fact that we continually have to debate fairly detailed Bills at very short notice.
  Looking at the Bill in the short time available, I am afraid that I have not viewed it with much enthusiasm, and I suspect that the more time I had, the loss my enthusiasm would be. As has been said, there is no evidence of any pressure from any source for this change. The Bill has come like a bolt from the blue or snow in April—which is sudden, can be pleasant but is quite unexpected. II. is puzzling to note that the Bill does not appear against any background demand. There has been no great pressure for it.
  I am not at all sure that it is the Government's job to try to run industry. I know that in extreme cases that is necessary and even inevitable. We have referred to Section 6 of the principal Act, which the Bill is intended to improve, and I recollect that I voted for Section 6 in Committee because I recognised that in extreme cases it would be necessary for the Board to undertake the development of industry. As reported in column 574, I gave two reasons:
  "The first would be to step in where private industry has failed but where it is nevertheless clearly undesirable, from the point of view of the development of an area in which the particular project is sited, that the project should die…Secondly…in order to step into areas where private enterprise has not trod or is unwilling to tread."—[OFFICIAL REPORT, Scottish Standing Committee, 6th May, 1965; c. 574–5.]
  I recognise that the Board requires that kind of power, but I am uncertain whether it is desirable to extend it in the Bill. I am not here opposing the Bill. I am prepared to be convinced about it, but I am still far from being convinced. It disturbs me that we spent 17 Committee sessions on the previous Bill and a long time on Clause 6. We argued about it fiercely. Now we are told, two-and-a-half years later, that Section 6 has had no effect at all and that its intention is obscure. The hon. Member told us that because of some defect, either in Parliamentary drafting or in the Government's interpretation of their own intentions, what is written in the Act is useless.
  Mr. Willis: Not useless.
  Mr. Johnston: That is virtually what the hon. Member for Caithness and Sutherland said: unless we have this Amendment, Section 6 as it stands is not effective, or is not as effective as was intended. It seems strange that a Section of such importance should be introduced only for us to find a few years later that it is ineffective.
  I am not sure about the Board's direct participation in management, which would be the result of the Board taking equity shares. That would mean that the Board would have a voting power in the company and would play some part in the management of the company and the direction of its affairs. I am not sure that the Board has the necessary expertise to do that, nor am I sure that it has the resources to man or actively to participate in a whole series of companies, if it were done on any scale. The hon. Member for Perth and East Perthshire spoke of the danger that the Board might be suspected of favouring a company in which it had taken shares against a competitor. Let us face it: that is the kind of risk with which the Board is faced almost everywhere. The right hon. Member for Edinburgh, East (Mr. Willis) was right: if a loan of £70,000 were made to the company instead of taking shares, it should still be interested in how that company progressed and would try to make sure that it was successful.
  Mr. Michael Noble: This is an important point which cannot be dismissed simply by saying that the Board is interested whether it has lent £70,000 or obtains £70,000 worth of equity shares. There is a very distinct possible difference in its view. So long as the company is solvent the Board will get the £70,000 back if it is a loan, but if it has to get a return on the equity shares it is very much in the Board's interest to push the project for an hotel or a garage against all the others. Then there is a different type of interest.
  Mr. Johnston: I agree. This goes beyond the point made by the right hon. Member for Edinburgh, East, but it is an extension of the same argument. We have to face this difficulty. The right hon. Member for Argyll (Mr. Noble) mentioned the case of a garage. The situation exists in which the Board might lend money for a garage. If just

  783
  down the road there is another garage which does not require to go to the Board for assistance, the "buzz" goes about locally—we all know this happens—and there is a feeling of partiality having been exerted although none was intended. I very much agree with the right hon. Member that this is an implicit risk. I think it could be exacerbated by any such change as is at present proposed.
  I agree very much that Clause 1 as it stands simply means that such shareholding would be taken only with agreement. I reiterate the point made by my right hon. Friend the Member for Orkney and Shetland that where a company is likely to make a large profit it is unlikely to wish its equity to be taken up in this way. Therefore, there is a real danger of the Board being saddled with unprofitable industry. This is one of the risks with which public ownership is faced. Often it ends by holding up the unprofitable babies.
  I am rather more concerned about Clause 2. I should be very pleased to be corrected, but it seems that the intention is that if a company approaches the Board for a grant or loan the Board can insist either that as a condition of giving the grant or loan the indebtedness is discharged in terms of the issue of shares, or alternatively, that in return for the assistance shares shall be given to the Board. The Clause says:
  "the Board on giving such assistance may impose such conditions as they think fit."
  So far as I see, this is not subject to the approval of the Secretary of State or to the Treasury in the way that the provision in Clause 1 is subject.
  This is an hypothesis, but it would appear that the Board is empowered, without reference to the Secretary of State or the Treasury, virtually to make a condition of assistance that it shall obtain equity shareholding in a company. This is somewhat disturbing. It is rather different from saying "by agreement" because there will be pressure. Companies will say that they want assistance and the Board, having admitted that the grounds for the request are valid, may put in a condition that the company gives it some equity shareholding. It may be forced to do this
  784
  without necessarily wanting to do so, or without the agreement mentioned in Clause 1.
  Mr. Malcolm MacMillan: Surely these conditions would be fully understood. There is a complete understanding of all these things and the Bill helps to make it clear. Before any transaction was undertaken, any firm entering the agreement would know exactly what was required.
  Mr. Johnston: It would appear that any company asking for a grant or a loan might be faced with a request from the Board for an equity shareholding.
  When the hon. Member for Caithness and Sutherland introduced his Bill under the Ten Minutes Rule, he said that Parliament must consider whether the tools given to the Board to do its job were adequate. The intention of the Bill, which he said is a limited, modest intention but an important one, is to sharpen the tools and to make the Board better able to do its job. I do not think that the limitations on the Board are legal; they are financial. It is rather like an army with a great many guns but very few shells. The reason why the Board is not able to do more is not that it has not plenty of power—it has loads of power—but that, rightly or wrongly, the amount of money given to it has been limited. Service industries are referred to as if they were in some way wicked. I think this is foolish. It is particularly ironical that this should be said at the same time that it appeared that one of the reasons which provided the idea for this Bill was that a particular service industry could not be as promptly and as effectively assisted as was intended. That seemed ironical and paradoxical.
  I do not oppose the Bill. I am worried and concerned about certain aspects of it. I am far from sure that it will make a big difference which the hon. Member for Caithness and Sutherland claims. I imagine that we shall have plenty of opportunity to pursue this matter in detail in Committee. Certainly it was very worth while to have a discussion of this sort of thing, although I still hold that the main problems facing the Highlands are related to the other policies the Government are pursuing, which are operating against the intention of the Board. Reference has been

  785
  made to Selective Employment Tax, the Transport Bill and so on. Mr. Speaker would not allow me to continue on that line.
  12.40 p.m.
  Mr. Hector Monro: We are all glad to have the chance today to discuss the Highlands, and for that reason we are glad that the hon. Member for Caithness and Sutherland (Mr. Maclennan) has introduced the Bill. We all want there to be more employment in the Highlands, particularly in manufacturing industry, but I share the doubts of the hon. Member for Inverness (Mr. Russell Johnston) about whether the Bill will be of any practical advantage. I want to be convinced that it will, that the extra powers sought will help the Highlands, and I should like to know how frequently, in the hon. Gentleman's estimation, they will be required.
  He spoke about satellite industries and it occurred to me, as it did to my hon. Friend the Member for Galloway (Mr. Brewis), that many of these small industries would not be companies, so that it would be difficult for the Highlands Board to participate in them as a shareholder. The same is true of the traditional industries, which we all agree to be important, but which, we also agree, are 90 per cent. service industries. The penalties which the Government have imposed on service industries are far more detrimental than any advantage which the Bill is likely to bring.
  I should like the Minister of State to tell us why this system of shareholding will be more advantageous to the companies or taxpayers than the present system of grants or loans. I agree with the right hon. Member for Orkney and Shetland (Mr. Grimond) that the Board night invest in companies which were not doing particularly well, that it might bolster up companies which were losing money, with consequent unfair competition for the hotels, garages and so on which did not have the financial advantage of a shareholding owned by the Board.
  Had the Bill contained any form of compulsory intervention by the Board, I should have opposed it, but although it provides for only voluntary participation, I share the doubts of the hon. Member for Inverness that Clause 2 might turn that voluntary participation into com
  786
  pulsory participation, because a company would have to decide to accept a shareholding by the Board, or receive no loan or grant. Doubts have been expressed about the business capability of the Board and whether it ought not to be strengthened by the membership of industrialists, or whether there should be an advisory committee, as under the Industrial Reorganisation Corporation, to vet industries and firms wanting Government support, an advisory committee which could give professionally expert advice. Perhaps the hon. Member for Caithness and Sutherland will highlight more emphatically why the present powers of loan and grant need to be extended. If the hon. Gentleman can convince me that it would be advantageous for the Board to be a voluntary shareholder, I should be much happier.
  I am sure that he will agree that by far the most satisfactory method of getting an expansion of manufacturing and service industry in the Highlands is to have a buoyant and expanding national economy. In this respect the Government have not always got their priorities right, in that the extension of development areas well down into England has reduced the opportunity of attracting industries into the far North, because the incentives are relatively the same wherever a company is. The major plus in Ross-shire is the geographical and physical features of Invergordon and not the great advantage of the Government's development area policy.
  I hope that the Minister of State will try to allay some of our fears, because we should not want to oppose any Bill which would promote industry and manufacturing opportunities in the Highlands. However, at the moment I am somewhat unconvinced that the Bill will have any effect, dramatic or otherwise, on the Highlands. I hope that the Minister will explain more fully his view of how the Government can participate through the Highlands Board.
  12.45 p.m.
  Mr. Michael Noble: It is difficult to say much new about the Bill, but it is a rather curious way to introduce action of this sort. While I am only too glad to congratulate the hon. Member for Caithness and Sutherland (Mr. Maclennan) on his perspicacity, I find it a little difficult to bracket with him his

  787
  right hon. Friend the Member for Edinburgh, East (Mr. Willis) who was Minister of State when the Act went through and who told us today that as early as 1966 he discovered this apparent gap in the Board's powers. It seems a little odd that the Government should have waited for two years without doing anything—and perhaps this action is due even now only to the initiative of the hon. Member for Caithness and Sutherland.
  It would be helpful to know whether the Board has asked for and believes that it needs this power and for what sort of purpose it is thought likely to be useful. I agreed with almost every word said by the right hon. Member for Orkney and Shetland (Mr. Grimond). There was a touch of practical realism in everything he said about this problem. I find it difficult to think of the sort of conditions in which this equity participation is likely to be to the benefit of both the industrialist who wants to develop in the Highlands and the Board. I can think of examples in which it could help one or the other, but I find it difficult to think of examples in which it would help both.
  As the hon. Member for the Western Isles (Mr. Malcolm MacMillan) said, everyone in the Highlands is entirely enthusiastic about trying to redress the balance between service and manufacturing industries. As a taxpayer as well as a Member of Parliament, I find it difficult to be certain that in schemes of this sort the interests of the taxpayer will be adequately safeguard. Although it is said that these schemes will be approved only if they are passed by the Secretary of State and the Treasury, one knows only too well how often, unfortunately, even in its first two years, the Highlands Board has picked a dud, has been quite unable to spot a dud which was clear to everyone else.
  The Board does not have the managerial skill or the expertise. I hope that it will build them up, but it does not possess them at the moment. Without meaning any disrespect to my friends and former colleagues at the Scottish Office, I do not think that there is any of this kind of expertise at the Scottish Office. I am tempted to support the idea of my hon. Friend the Member for Dumfries (Mr. Monro) that there should be a sort of small I.C.F.C. which could
  788
  vet proposals for the Highlands independently and give sound commercial advice. If the Board decided to ignore that advice, at least it would clearly know that it was taking that considerable extra risk, which it still might accept if it thought that to do so was socially necessary.
  Mr. Malcolm MacMillan: There is nothing to stop the Board from engaging such a committee of experts now, if it wants to do so.
  Mr. Noble: That is perfectly valid, but with its existing staff the Board does not have the necessary expertise.
  Mr. Willis: The right hon. Gentleman must know that in a number of cases already where it has been a question of requiring expert knowledge of a particular firm the Board has engaged that knowledge. It does the same as other bodies and pays for the knowledge.
  Mr. Noble: I believe that the Board will prove very useful to the Highlands, and therefore I do not want to over-stress the number of cases where there have been quite outstanding failures of judgment—let us put it no higher. The expertise will build up, but we must, as taxpayers and people responsible for Government money, make as certain as we can that if we are giving taxpayers' money to the Board for purposes like this, it is competent to handle it.
  I thought that the hon. Member for Caithness and Sutherland was modest and moderate in what he said when introducing the Bill. But I should not like it to pass unnoticed that whilst it is true that the Conservative Party opposed pretty fiercely many of the things in Clause 6 on the Committee stage, of the Act it is also true that none of those powers has been used by the Board so far. I am not saying that we were right or that the Government were right, but I think that the success of the Board will be in direct relationship to the care with which it uses the very Draconian powers that it has. Our opposition and questioning about them was right and proper, because it made people realise that if one gives enormous powers to a board it must be very responsible in the way it uses them—if it has to use them at all—or it will run into trouble. Therefore, I do not regret having asked a

  789
  great many questions about the powers, and I am not surprised that they have not been used.
  I think that it is true that companies have failed because they could not raise capital easily today. But it is equally true that the advantage to a company of equity capital is in almost direct proportion to its likelihood of not being a financial success, because if it is a financial success a loan is no problem to pay back. It is a prior charge and must be repaid. If the company is a doubtful proposition it is much better for its money to be in equity form because if it is not paying a dividend it is not paying the Board, shareholders or anybody else anything. Therefore, although I can see Clause 6 being an advantage, I am not certain that it would be much advantage to the taxpayer, in so far as he is a shareholder through the money that goes out through the Board.
  The hon. Gentleman was correct in saying that equity holdings would give the Board a voice in a company's management. That could be useful, but I do not believe that as the Board is at present constituted it has the necessary expertise to use that management wisely, unless it uses its other power of finding put how a successful company of that type is being run and applying the same methods to the company in which it has a shareholding. Everybody would find that distasteful and improper, and I am certain that the Board would not intentionally want to do so.
  If the Bill is needed by the Board, which we do not yet clearly know, if it will help to bring more manufacturing industry into the Highlands, and if one or two things which have been stated categorically turn out to be so on investigation in Committee, I do not see that the Bill can do any harm. But I cannot see that it will do a great deal of good yet either. I am very much aware that if the debate had been on Highlands generally it would have been very much wider. There would have been a great deal that all of us would want to say about the Highlands and Islands on which so far we have been very well disciplined. No doubt that will be possible at a later stage.
  Like the right hon. Member for Orkney and Shetland who has left, I have to catch an aeroplane to the Highlands this
  790
  evening. I hope that it will not be thought a discourtesy if I leave in a few minutes.
  12.55 p.m.
  The Minister of State, Scottish Office (Dr. J. Dickson Mabon): I fully appreciate the difficulties of various hon. Members on a Friday, particularly when they have engagements in Scotland, and I understand the closing remark of the right hon. Member for Argyll (Mr. Noble).
  Like my right hon. and hon. Friends, I congratulate my hon. Friend the Member for Caithness and Sutherland (Mr. Maclennan) on his initiative, and I hope that his Bill will make progress. The right hon. Member for Argyll asked if the Highlands and Islands Development Board had ever asked us for this clarification of Section 6 and for the Bill. It has asked on several occasions, and in public. It has made it clear that it is anxious to use section 6 as it was originally intended. It is true that the Section has not so far been employed to the extent we should like, but my feeling, which I am sure is shared by many people in the Highlands, is that the Board has had a very hard time in getting started and it has been almost friendless at times when it should have had the friendship of those from whom it should command a great deal of respect and support at times of trial. I shall return to the justification of the Bill shortly, but first I should like to comment on a number of points made. I should like to make it absolutely clear that the Government welcome the Bill.
  Mr. MacArthur: Is the hon. Gentleman telling us that the Board propose to acquire businesses, set up businesses and carry on businesses now with the powers of the Bill? I think that that is what he has just said. I hope that if that is so, he will comment on some of the questions of principle we raised earlier in the debate.
  Dr. Mabon: Absolutely. I was not going to hesitate to do that. I know, Mr. Speaker, that you will allow me to answer all the points made in the debate, and I shall not stray into any other matters into which other hon. Members were tempted to stray before you rightly brought them to order.
  The Bill clarifies the intention of Section 6 of the Highlands and Islands Development (Scotland) Act, 1965 to

  791
  extend the facilities which the Board has for the development of industry. None of us on this side of the House regard service industries as wicked. I make it absolutely clear that we should like to see service industries in the Highlands developing, but we must accept that one thing that has not developed under private enterprise and without the intervention of the Board is manufacturing industry.
  My right hon. Friend the Member for Edinburgh, East (Mr. Willis) whom I succeeded as Minister of State, made clear, by quoting an extract from the Board's first annual report, the strategy of the Board, which has been adhered to throughout the past year. I hope that in May or June we may be able to debate the Board's second annual report. Then it will be seen that it has had to work very hard not just within Section 8 but within other Sections, and on a grander scale working with Government Departments, for what we hope will be a significant development in the north. It is one which the Board could not sustain but which has been helped by it, which has in some cases been initiated by it, and which could lead to a great many manufacturing jobs in the Highlands.
  I do not accept the statement of the hon. Member for Dumfries (Mr. Monro) that Invergordon by its very nature is of such geographical advantage that without the intervention of the Government and the Board developments would take place there anyway. When the hon. Member for Galloway (Mr. Brewis) talked about people being green with envy in regard to position of Galloway vis-à-vis the Highlands, I think that he was more rightly illustrating that without intervention of some kind we shall not get the development we require in the peripheral areas of Scotland. Let us be fair. For 13 years the Tory party was in power, and the Opposition claim that the economy was well run then and that private enterprise can do the job anyway in these areas. The fact is that in the peripheral areas, including Galloway, Dumfries, the north-east, certainly the Highlands, and possibly even parts of Tayside, it is patent that without Government intervention, but just leaving it to private enterprise, these developments would not occur, and in the 13 years of right hon. and hon. Gentlemen opposite they did not occur.
  Mr. McArthur: No.
  Mr. Noble: The Minister will remember the pulp mill, and the Aviemore development, helped by the Government but sponsored by private industry.
  Dr. Mabon: The right hon. Gentleman is confusing the point. I am not saying that these things did not take place. They did, but, significantly, they were public-private enterprises and not left entirely to private enterprise. As the right hon. Gentleman would be the first to admit, the pulp mill would not otherwise have been established at Fort William. That is the point I am trying to make.
  The right hon. Gentleman the Member for Orkney and Shetland (Mr. Grimond), I thought, in a most confused speech, which was at best muddleheaded and at worst poisonous, a real mixture of arsenic and old lace, managed to get everything the wrong way round. For example, he said that he did not want Government directors. Why? Because they are sleeping partners and he instanced B.P. On the other hand, he did not want intervention by the Government if there were to be directors of the kind who are not sleeping partners but at the same time not interventionists—rather like Mahomet's coffin, suspended between heaven and earth.
  Of course, if there are directors from the Board on a company at the initiative of the Highlands Board and it has some equity holding then, if that happens, the consequence, a possible but not an inevitable consequence, is that the directors concerned will be there to look after the interests of the investment in the company, and wider issues of the welfare of the Highlands. Therefore, if there is intervention, which has its drawbacks and its advantages, we have really got to maximise the advantages and minimise the drawbacks.
  The right hon. Gentleman criticised this mechanism by saying that if a company is making a profit the Board would not be invited to have an equity holding. He is absolutely right, if the company is making profits and running a very good business. But what we are talking about is the enterprise where, even with good talented businessmen, there may not be capital. As my right hon. Friend the Member for Edinburgh, East

  793
  said in his excellent speech, there is distortion of the capital structure of the company as the result of grants and loans solely. Hence the reason for the Bill, even for those businesses with some substantial capital investment, in some cases, to make sure that they can develop. It will, by definition, be very risk capital. I accept that, and that brings me back to a point made by the right hon. Gentleman the Member for Argyll.
  He talked about duds. We can, I have no doubt, debate this elsewhere on the Second Annual Report of the Board. There have been duds, but they are a tiny minority of the very substantial number of firms which today would he out of business if the Board had not helped. There have been businesses which became defunct and others which are now in difficulties because the Board has not the powers we are seeking today. I cannot breach confidences, but it is within the knowledge of certain Members of the House which specific companies are concerned.
  After all, remember that by Section 8 of the 1965 Act, which this Bill seeks to substantiate, we shall be conferring power comparable to that which the Board of Trade achieved by the Industrial Development Act, 1966. So that it is not necessarily fair to criticise my right hon. Friend the Member for Edinburgh, East for his initiative with the 1965 Act, which he piloted through the Scottish Committee. By it we were doing in Scotland something not only unique in the United Kingdom but in the world. We were doing it within the Highlands and Islands in advance of the Government's general legislation which did not come until a year thence. I think we have done reasonably well by the 1965 Act.
  Mr. Russell Johnston: I think the hon. Gentleman's normal impartiality has been overcome slightly by his normal effusiveness. The basic point which my right hon. Friend was making was that experience of Government participation through directors—as in B.P.—in industry is that they were almost semi-retired rather than active, expert people. One asks whether the Board will get the kind of people needed to serve businesses in which it may or may not take an interest.
  Dr. Mabon: I am not quite certain whether the hon. Gentleman is entitled
  794
  to interpret his right hon. Friend's remarks without the right hon. Gentleman's being here, if I may say so with respect, but if he is right, that his right hon. Friend meant that directors ought to be activist directors, I would accept that, in certain circumstances, we would have activist directors as distinct from sleeping ones. There are businessmen of good will who are willing to come in and help with work of this kind in the Highlands and Islands.
  I go on to the point about management services. If hon. Gentlemen opposite will look at the First Annual Report, they will see a section there under "Membership, staffing and finance and on page 7, paragraph 36, it says of management services, that they are
  "To advise the Board in the setting up, and be responsible for the operations of a management and accountancy advisory service in the Highlands and Islands; to advise on management and accountancy assets of Board projects; to assist the Board in the preparation of their longer term plans; and to provide ' after care ' services to the firms which receive financial assistance from the Board."
  This Board was established in November, 1965. This is its First Annual Report, to the end of December, 1966. It was as early as that stage seeking to build up its management services. We shall be able to debate a comparable section in the Second Annual Report when it comes in a few weeks or next month, and I hope we shall be able to go into this matter of expertise at the hands of the Board.
  Of course, it has made mistakes. When the right hon. Gentleman the Member for Argyll was in office one of the biggest mistakes in the Department was the scandal of Cadco, where hundreds of thousands of pounds of public money were lost largely because of the lack of expertise and judgment at that time. In the Scottish Office, we have, of course, learned from Cadco. Since the right hon. Gentleman left we have been able to revise the procedures for the new towns. Through the Board's mechanisms and, indeed, even our own revised mechanisms of accountancy and judgment and so on, we shall not as far as it is humanly possible to ensure it, have another Cadco.
  So I take note of the right hon. Gentleman's criticism of his former colleagues in the Scottish Office, that is his Civil Service colleagues, and their lack

  795
  of expertise. We have to improve on that, and in specific cases we are seeking to improve wherever we can in this matter of making sure that Government intervention is advised and well advised, but we are not intervening to help obviously prosperous business which will succeed in making profits. We have to intervene to help the marginal business which is struggling hard in this matter of making a living and making a go of it. Of course, we shall be assisting with risk capital in the business. I accept that, but, as I say, that is the essence of the whole exercise itself. As I said, the Board is quickly able to put its expert, qualified staff, including professional accountants, there to help. I should like us to dwell on this when we have our further debate at a later time.
  The hon. Gentleman the Member for Inverness (Mr. Russell Johnston) made a number of points which I think I ought to comment upon. First of all, we believe that Section 6 is not ineffective, but it is defective in this regard. Hence the Bill. We are confident of what the Board intends to do in this regard once this legislation is on the Statute Book. The Government firmly believe, although they cannot make all their knowledge public, that with the extended power we shall do better than we have done for the Highlands and Islands. We have spent a great deal more money than we intended. When my right hon. Friend the former Minister of State introduced the Bill and debated it in Committee, he did not then believe that the amount of money we have made available in subvention to the Bill would be as substantial as it has been. We have done well in financing this. There is no implication that Section 6, if so amended by my hon. Friend, will mean that there will be net extra H.I.D.B. expenditure as a result of the new powers.
  Mr. MacArthur: Would the Minister give some indication of the expenditure which has been made and how it compares with the amount of money bled out of the Highlands by Selective Employment Tax?
  Dr. Mabon: Without notice I cannot give the precise figure. We may have a debate in the mid-summer, and it would be better for the figure to be given then
  796
  rather than that I should make a guess now.
  The argument on partiality is a peculiar one. After all, if there are grants and loans, are not these partial? Could not the same argument be applied? Without grants and loans, a great deal of the work of the Board would be negative. The hon. Gentleman would not argue that we should withdraw grants and loans on the grounds that they are partial. But they are just as partial. We have had complaints that a grant should not have been made in a given case. We know the Highlands and how, as the hon. Member for Inverness said, these things get round. There have been complaints, and we must accept that there will be charges of partiality. We must, therefore, rely on the Board being impartial as regards persons and partial only as regards public interests.
  Mr. Russell Johnston: Would the Minister not agree that there is a difference in degree here? He is right in saying that the same basic argument applies, but surely there is some difference in degree between an enterprise that has received a loan and an enterprise in which the Board has taken a direct, known and public stake?
  Dr. Mabon: This is arguable, and one would have to know of the specific instance in order to answer this. Many references have been made to chair lifts with which I do not entirely agree. The hon. Member for Inverness would, I am sure, agree with me that all the references made to the chair lift development were not accurate. I remember working very hard to persuade the then owners to become a limited company so that the Government could help them through the Transport Holding Company. It was only later when the change was made that they were able to get assistance of the kind that they needed. They had then, however, formed a limited company.
  Mr. Willis: They had to.
  Dr. Mabon: They had to, so that we could extend to them assistance available under other Acts as well as under the Highlands and Islands Development Act. I accept there might be an argument, but it would have to be an argument addressed to a particular instance. No doubt it will be claimed that this is

  797
  so, but I do not see how to avoid it, except by relying in the last analysis upon the personnel of the Board, and on the intermediate machinery which they are building up as the referee, so to speak, of first instance.
  I do not accept the rather scathing comment made by the right hon. Member for Orkney and Shetland about the Board members. There are prominent businessmen among them. We are all sorry about the death of Mr. Logan. It was a substantial blow to the Board and to the Highlands, as well as to his family and to his business. The appointment of Mr. Logan proved that we were intent on choosing certain businessmen of distinction to serve on the Board. We have Mr. Rollo who has been Deputy Chairman of the Board. I regard him as a good businessman and a prominent businessman. He may not be a tycoon, but at least his interest in the Highlands is genuine and he has worked very hard, albeit on a smaller scale, for individual industries, not only since the Board has been in existence and he a member of it, but long before the Board was established. I would defend Mr. Rollo. He is a good example of a businessman working on the Board. It may be that we should have more businessmen on the Board, but I would not like it to go out from this House that we do not have prominent businessmen.
  The second point made by the right hon. Gentleman was that the Board does not call upon business ability. That is not true. The Board has made errors, but so has every successful businessman. It is, in my opinion, unfair to keep knocking the Board when they have a very difficult task to perform in the glare of a not always sympathetic public limelight.
  The hon. Member for Galloway gave the impression that this amending Bill was for first-aid measures only. I hope that I have disposed of any belief that we regard this simply as first-aid. We accept that one of the main efforts of the Board in using Section 6 will be to stimulate industry with particular emphasis on manufacturing industry, and not simply to rescue by first-aid measures companies already in difficulties in the Highlands. This is not a social ambulance Bill. My hon. Friend is seeking to add an industrial generation Bill to the already substantive Act.
  798
  The hon. Gentleman spoke of the Government wanting to kill the landowners. I do not see the relevance of this comment on the Bill, but I can think of nothing more pejorative. I feel sure he was joking when he said this. Of course we recognise that a large number of landowners are now co-operating more favourably with the Government, particularly since the existence of the Highlands and Islands Development Board, than they have done before. The Government have a basic hard antipathy to some landlords who will not cooperate, who want to retain their feudal privileges, and believe that they are still living in the eighteenth century. We want to see them change their view, but we do not want to kill them, any more than we want to kill the Transport Bill with its rural bus grants, its shipping services and the control of all bus services under one umbrella.
  A point was made by both the hon. Member for Perth and East Perthshire (Mr. MacArthur) and by the hon. Member for Inverness (Mr. Russell Johnston) on the question of what would be called incipient compulsion. It is true that within the Bill, read with the original Section, there is absolutely no question of compulsory purchase of shares. Both hon. Members will agree that that is the literal truth. Their argument is that the purchase or the taking of shares could be a condition, with other conditions, of help by the Board. I must confess that may be true. It depends again on the circumstances that may arise. It may be that the Board feels that, without this, the capital structure of the company would not be sound and that, with the best will in the world, the company would be in difficulty in servicing loans and in repaying debts. The Board is entitled to take that view; it does at the present time; but unfortunately it cannot take the additional step, which is to help in the basic restructuring of the company.
  I come back to the directors. It does not follow in every case that with our shares we would have a director. It does not follow in every case that our shares would be conditional on granting loans and on other things. It depends on the precise circumstances.
  Hon. Members have to realise that it would not be fair for the Board to be

  799
  placed in the position of giving second-class help to an industry instead of first-class help, thus transforming a possible chance of success into a lesser chance by virtue of not being able to say that the company must agree on a re-structuring, with equity shares, at the same time as it has grants or loans. Of course, any industry is free to say no. In that case, it will not want anything from the Board. Alternatively, it may prefer to seek grants or loans from another source.
  I return to the point that we have to rely upon the skill of the Board in building up its accountancy services to give it the best advice. If that advice suggests that there should be an equity shareholding, I do not see why the Board should not offer it to the firm applying. It would not be the case in every application, but it could be in one or two or even a dozen. It would be wrong to seek to fudge or obscure that. It could be possible. In any case, the Board would not want to see a firm doing something reluctantly, because that might damage the purpose for which the transaction was being concluded.
  I very much welcome the initiative that my hon. Friend has taken. Obviously he will have a rough time with the critics on the Benches opposite in getting it through the House. As hon. Members know, there are two ways of hindering a Bill. The first is to vote it down. The second is the way of killing it with the kindness of many words and amendments. I hope that we shall have the good will of hon. Gentlemen opposite, although their speeches today were not as helpful as they might have been. As I say, my hon. Friend will have a tough time, but everyone on this side of the House and I am sure everyone in the Highlands will wish him all success.
  1.23 p.m.
  Mr. Maclennan: With the leave of the House, I am conscious of the fact that the Minister of State has already extensively covered the ground and answered most of the substantial points which have been made, so I shall not repeat them at length. However, there are one or two points which I want to make clear.
  A number of hon. Gentlemen opposite have asked about Clause 2 and to what extent the acquisition of shares
  800
  would be voluntary. They wondered if the Board would not impose a condition upon a firm seeking financial assistance. Under the parent Act as it stands at the moment, if a firm seeks a grant or a loan, the Board is empowered to impose such conditions as it thinks fit. In my view, Clause 2 goes no further in that respect.
  Much play has been made, particularly by hon. Members on the Liberal bench, with the alleged lack of business expertise of Members of the Board. However true, the charge is irrelevant. It would not be necessary for the Board to participate directly in the supervision of a business. The holding of equity shares would simply empower the Board under the articles of association of the company to nominate directors, men of such established and known business expertise as recommend themselves to the Board.
  The right hon. Member for Orkney and Shetland (Mr. Grimond) made the completely unsubstantiated charge that the Board could not call upon such services. It has not, of course, because it has not had the power to. In my view, however, the Board would be perfectly capable of calling on such business expertise, and it has already done so in a number of other areas of activity. One of the most notable contributions of the Board has been its "Operation Counter-drift", which has located businessmen throughout the country who are anxious and willing to come to the Highlands to live and give their services and so benefit Highland industry. According to a recent count, no fewer than 6,000 people have come forward. I do not say that the nominees to directorships of companies would necessarily be drawn from that list, but the point should be made that it is not a shortage of managerial skill at the Board's disposal which would put a scheme of this kind in jeopardy.
  A number of hon. Gentlemen opposite have argued that an element of risk is involved, and that is true. It is because of that that I commend the Bill to the House. It is precisely in the sort of situation where normal methods of financing companies are not available, for whatever reasons, that one would look for this abnormal method of financing business enterprise. It is recognised that conditions in the Highlands are totally different from those prevailing in

  801
  other parts of the country, and those conditions demand extraordinary measures. However, these measures do not go far beyond those already embodied in the Industrial Expansion Bill of this year and the Industrial Development Act of 1966. The principle is not a new one.
  The right hon. Member for Argyll (Mr. Noble) made the point that the powers available to the Board under Section 6 have not been used. That is a valid argument. One of the reasons why they have not been used is the very obscurity about their existence. It is my hope that these powers will be used in accordance with this Bill when, as I hope, it becomes law, and that the two Acts will be read together.
  The right hon. Gentleman also said that the Board could call upon expert bodies such as the I.C.F.C. to give it advice in matters of this kind. That is perfectly true. It is quite open to the Board, and there is a lot to be said for the idea. However, I do not go along with the right hon. Gentleman's view that, because the Board runs the risk from time to time of backing a dud, it should not enter into the risky sphere of manufacturing industry.
  In his customary sweetly reasonable way, the right hon. Gentleman the Member for Orkney and Shetland attempted to suggest that I and some of my right hon. and hon. Friends were critical in some way of the rôle of service industries in the Highlands. Nothing could be further from the truth. Anybody who knows anything about the problems of the Highlands knows that the Highlands are dependent on service industries. I do not think t can seriously be argued that the present situation is desirable. The disadvantages of the service industries are abundantly clear. To mention but one, many of the industries are largely seasonal in their employment opportunities. This is particularly true of the hotel and catering trade, but the same disadvantage is to be found in the distributive trades. It is this imbalance in the Highland economy which has been one of its basic weaknesses for many years, and I think that the Bill will make a small but important contribution towards rectifying this imbalance.
  I do not think that it is necessary for me to add to what my hon. Friend the Minister of State said about the imparti
  802
  ality of the Board in its operations. I agree with the hon. Member for Inverness (Mr. Russell Johnston) that inevitably there will be charges of this kind. There always are when public money is made available. When grants are provided, there are always charges that they are being unfairly or inequitably distributed. This is an inevitable charge, but I do not, from that, consider there to be any criticism of the Act as it stands.
  The hon. Member for Inverness also said that the limitations on the Board were not limitations of power, but of finance. This allegation is not only unsubstantiated, but is incapable of substantiation. Targets for spending put forward by the Government—I speak without authority, but these figures have been published—have been surpassed in each year of the Board's operations, and so far as I know no request by the Board for money has been refused.
  Mr. Russell Johnston: The other day the hon. Gentleman asked a Question about land reclamation. The main reason why land has not been reclaimed on a large scale is that money is not available for this purpose.
  Mr. Maclennan: The hon. Gentleman is speculating. There are technical difficulties in reclaiming land. There is the question of the acquisition of property, and so on. There are many obstacles which have nothing to do with finance. I understand that the Board is looking favourably at schemes for land reclamation. I know of two in my constituency which are being carefully considered, and I think that the hon. Gentleman's remark is wide of the target.
  The right hon. Member for Orkney and Shetland said that the experience of the Government in business was bad, and he instanced B.P. I think that the right hon. Gentleman gave an incomplete picture. In Scotland we have an example of extremely successful participation in industry by the Government. I am, of course, referring to Fairfields shipyard, which in some respects is a model of participation by private and public enterprise.
  In so far as the criticisms of hon. Gentlemen opposite are based on their prejudice against public enterprise in the Highlands, I think that they are wide of the mark, because it has become abundantly clear that private enterprise

  803
  on its own will not step in and provide the necessary manufacturing industries there. We have many years' experience of this. The major successes in the Highlands have been at least partially assisted with public money.
  The right hon. Member for Orkney and Shetland also said that the Board would in some way be called on to act as an arbiter between companies if it had the power provided in the Bill. I acknowledge that this is true to some extent, but this rôle can well be safeguarded by the appointment by the Board of independent nominees. I do not agree with the remarks made about the Board lacking managerial ability and skill. I think that my hon. Friend the Minister of State has shown how the Board is building itself up in this respect, but there is nothing in the Bill which will necessarily demand the appointment of one of the Board's own staff to the company concerned.
  This has been a very useful debate, and it has covered a lot of ground. It has helped to pinpoint the areas of controversy which may lead to further argument at a later stage. A number of hon. Members, and particularly the hon. Member for Perth and East Perthshire (Mr. MacArthur), asked why the Bill was necessary. I think that my hon. Friend the Minister of State answered more authoritatively than I can the question which he was asked by the right hon. Member for Orkney and Shetland. The Board wishes to have these powers, and I find this a persuasive argument in favour of the Bill. I have come to believe that the Board is the greatest hope that we have for the regeneration of the long neglected and industrially most seriously handicapped area of Scotland, the Highlands.
  Question put and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

  ROAD TRAFFIC (BURDEN OF RESPONSIBILITIES) BILL
  Order for Second Reading read.
  1.37 p.m.
  Mr. John Farr: I beg to move, That the Bill be now read a Second time.
  This is a simple Bill, designed to amend the Road Traffic Act, 1960, in a fairly simple and straightforward way. There was a real omission from the 1960 Act, and this was brought to light last year by a serious accident in Leicester when a man who was cycling to work in the early hours of the morning was knocked down by a vehicle with three occupants in it, and he subsequently died. The driver of the vehicle did not stop at the time of the accident, but before the accident three known occupants had been seen to enter the vehicle, and when the vehicle was stopped not long after the accident the same three people were in it.
  I do not want to go into the conditions leading up to the manner in which the vehicle was driven. The men in it had been working on night shift and had been engaged in certain other activities after that. When the police apprehended the occupants of the vehicle—the number of it had been taken—they were unable to obtain positive identification of who had been driving it. There were conflicting eye witness reports. One eye witness identified one gentleman as the driver, while another eye witness said that another of the occupants was driving. So conflicting was this evidence that the police found themselves powerless to prosecute not only the man they thought might be the driver but any of the other occupants of the vehicle.
  This incident has resulted in a situation which any Minister in any Administration must agree is manifestly wrong—a situation in which a man who committed manslaughter when driving a motor car and failed to stop after the accident is now driving around the City of Leicester without a stain on his character or even an endorsement on his licence.
  The Minister recognises that that situation is very wrong. I want to make it clear that I do not blame the police for their lack of action in this affair. By

  805
  the law of the land—the Road Traffic Act, 1960—they are powerless to prosecute unless the person driving at the time can be positively identified.
  The Minister may say the incidents of this nature occur too infrequently to justify Government action, and we may say "Thank heaven". The Minister may have statistics relating to similar cases—with the facilities at his elbow—which I have not been able to obtain. The fact remains that the present position allows tremendous scope for abuse. Who is to know that such cases will not occur much more frequently in future—when an accident occurs with one or more people in a motor car who, knowing of this loophole in the law, decide, "Why stop and face the music? Let us keep going. Even if there were people at the scene of the accident who took the number of the car, and could identify the car, provided we promise together that we will not declare which of us was driving we know that the police are powerless to act with any severity against us."
  It was with this fear in mind that my hon. Friends and I, together with hon. Members opposite, thought that we should introduce the Bill. I have had criticisms from one or two of my colleagues who are specialist lawyers—which I freely confess I am not—that there are certain weaknesses in the drafting of the Bill. It has been said that Clause 1 is not drafted as clearly as it might be, and that if it were enacted it might have the effect of imposing a severe penalty upon innocent passengers in a motor car.
  In response to that criticism—which is a valid one—I would claim that if the driver of a motor car knew that whether or not he remained silent, and whether or not he confessed to driving the vehicle, he would be treated in conjunction with his passengers as having driven the vehicle, there would be no incentive for his maintaining a guilty silence. In my view there would be no likelihood of such a man's declining to confess that he trove the vehicle—and certainly his colleagues in the vehicle would rapidly name him to the police.
  The Bill may not be word-perfect, but I put it to the Minister that it is a sin
  806
  cere effort—a starting point which will enable a Standing Committee to consider the position. I am not endeavouring to be doctrinaire as to what should be done; all I ask is that something should be done. Let us amend the Bill in Standing Committee. Let us talk about the way in which this loophole can be filled.
  The Minister may feel that one way in which my object can be achieved is to increase the present penalties provided in Section 232 of the Road Traffic Act, 1960, which must be faced by those who conspire together to conceal the identity of a driver. Compared with the gravity of many of the offences to which they apply those penalties are purely nominal. In the case of Mr. Riley, my constituent, who was knocked down and killed by the driver of this vehicle, no action was taken under the Section of the Road Traffic Act. It may be that one reason why the constabulary did not proceed against the occupants of the vehicle for failing to identify the driver among their own number was that the penalty is only about £20. The constabulary may have felt that that was too trivial a fine to warrant action by them in the very grave circumstances of the case.
  I want to make one plea to the Minister. I know from what he has told me and has written in letters to me—the contents of which I much appreciate, as I appreciate the spirit in which he has written them—that he is as concerned as I am about the situation, not only in the City of Leicester but in other parts of the country, that would arise if this abuse were practised more frequently. He may feel that this Measure, as the vehicle to adopt to get this wrong righted, is an incorrect one. If he feels that the Bill does not provide the right avenue of approach, will he give me an undertaking that the matter will be referred to one of the Specialist Committees now sitting—perhaps the one dealing with the revision of the criminal law?
  Something must be done. Unless my co-sponsors and I receive some form of undertaking from the Minister this afternoon, we shall seek leave to divide the House on the issue.
  1.47 p.m.
  The Joint Parliamentary Secretary to the Ministry of Transport (Mr. Neil Carmichael): I am aware of the background to the Bill which has been introduced by the hon. Member for Harborough (Mr. Farr) and I know the great sincerity with which he introduced it and how strong are his feelings about the unhappy story of his constituent who was knocked down and killed by a motor car.
  The purpose of the Bill is to prevent the occupants of a motor car from frustrating proceedings against the driver by their refusal or their inability—and it should be impressed upon the House that on some occasions it is a question of inability and not merely of refusal—to name the driver.
  The Bill would do this by providing that where the identity of a driver has not been established, all the occupants of the motor car shall be jointly responsible. It would seem that this joint responsibility would extend to civil as well as criminal matters. As we know from the hon. Member in his successful attempt to persuade the House that he should be given leave to bring in the Bill, its introduction arises out of the case of a constituent of his who received fatal injuries from a hit and run accident in December, 1966.
  In this case, the three occupants of the car were identified and were known to have been drinking at a works party. There was no evidence, however, as to which of the three men was driving at the time of impact. Although one might suspect that one was probably the driver, there was some evidence pointing to each of the three. The police considered that, on the evidence they had, they could not bring a charge, because they could not formally identify the culprit. The person responsible for causing the accident, therefore, got away scot free.
  The hon. Member accepts, as we all do, that the police acted perfectly correctly, but he is also naturally anxious to block what he regards as a loophole in the law. He asked for statistics about previous similar cases, but the police are not aware of any other such cases, so it is not unfair to say that the Bill is based on just one unfortunate case, and the old tag that hard cases make bad law is not inappropriate.
  808
  The hon. Member has said that the Bill's importance is not only that it will make it possible to prosecute all the occupants of a car in some cases, but that it is likely to induce other occupants to say who the driver was at the time of the offence. It might have that effect, but only at what we regard as the wholly unacceptable social cost of putting all the innocent passengers in jeopardy. This is not only unacceptable but unnecessary, since, in most cases where the identity of the driver is in any doubt, the provisions of Section 232 of the Road Traffic Act 1960 provide a remedy. An owner of a vehicle or any other person can be required to give any information which he has as to the identity of the driver and the maximum penalty here—the hon. Member made a mistake, I think—is a fine of not £20 but £50. That also, in certain cases, with many other things at stake, is not an excessive or even equitable fine, but the police regard this as an effective provision which usually persuades people to name the driver in the very few cases.
  Section 4 of the Criminal Law Act, 1967, deals effectively with acts such as changing seats when there has been an accident. In this case, offenders are subject to long terms of imprisonment if there is a deliberate intention to impede justice or apprehension or prosecution for an arrestable offence. This, of course, covers most hit and run accidents, which are the most likely cases where changing of seats might take place. So the police can and do use a fair armoury in cases which are not quite but roughly similar to this one.
  But the most serious objection to the Bill is one of principle. It is contrary to the criminal law to make persons responsible for an offence for no reason other than that they were nearby when it was committed. It is a rule that there must always be a connection between the offence and the offender, and the Minister of Transport and the Home Secretary are both agreed that it is more important that the innocent should not be wrongly convicted than that the guilty should be brought to book. The Bill would turn all this upside down and large numbers of innocent people would be convicted just so that one or two guilty drivers did not escape punishment.
  The hon. Member has had discussions and correspondence with the Department

  809
  and with my hon. and learned Friend the Under-Secretary of State for the Home Department and I think that he has been left in no doubt that, unless the Bill reconciled this joint responsibility with the fundamental principle of protection of innocent passengers from the threat of wrongful conviction, the Government would find it very difficult to give any hope that they would support the Bill. However, he asked whether the matter could be referred to the Specialist Committee relating to the criminal law. I cannot give an undertaking that I would so refer it or that I have the authority or power to do so, but I will certainly bring it to the attention of my right hon. Friends the Minister of Transport and the Home Secretary to examine again just how large this loophole in the law is, and how it could perhaps be stopped without putting in jeopardy people unconnected with the accident.
  This is an extremely difficult and awkward legal point, and to proceed with the Bill in its present form or anything like it without the fundamental safeguards, which we are all anxious to uphold, would be quite wrong. With the assurance that I will bring the points raised and the particular question which the hon. Gentleman has asked to the notice of my right hon. Friends, I must ask the House to refuse to give the Bill a Second Reading.
  Question, That the Bill be now read a Second time, put and negatived.

  HEARING AIDS BILL
  Second Reading deferred till Friday, 26th April.

  RENAL TRANSPLANTATION BILL
  Order for Second Reading read.
  1.57 p.m.
  Sir Gerald Nabarro: I beg to move, That the Bill be now read a Second time.
  We had a short debate prior to First Reading of the Bill, as it was inaugurated under the Ten Minute Rule, on Wednesday, 13th March, and I was then privileged to explain that a limited exercise only is here entailed in the matter of transplant of human organs. It is delineated very precisely in the Long Title of the Bill as to
  "Permit removal from the body of a human person, duly certified as dead, of any kidney or kidneys required for medical purposes, unless there is reason to believe that the deceased during his lifetime had instructed otherwise."
  Substantially, this is an Amendment of the Human Tissue Act, 1961 and it may be questioned why this amending Bill is propitious. The answer is quite short.
  During the seven years which have elapsed since 1961, the medical science of transplanting kidneys from a deceased person into the body of a living person, man, woman or child, has been largely perfected. We now know that the recipients of these human kidneys have lived for up to six years following the operation. The human kidney is the only blood-fed organ—for the cornea is not a blood-fed organ—which has survived for several years the hazards of tissue rejection. It would be wrong of me to talk about the chances of survival of those persons struggling for life at this moment who have been recipients of major organs, notably of hearts, in recent months.
  The medical profession advises me, no doubt correctly, that the hazards arising from tissue rejection following the transplant of a major organ are very great. Indeed, it is indisputable that, at this moment the only blood-fed organ of the human body which has been moved successfully on scores of occasions from the dead to the living is the kidney. I do not know—I doubt whether the Minister does; I am informed that no reliable statistics are available—how many successful operations of this kind have

  811
  been accomplished, but it is certainly several scores.
  I am advised by Professor Roy Cane of Cambridge—I hope that my hon. Friend the Member for Cambridge (Mr. Lane) will have an opportunity to speak later, when he will be able to confirm this from his own researches in Cambridge—that in Cambridge alone, in 1967, there were almost 30 successful renal transplants. There are, of course, other centres in Britain for renal surgery where similar results have been achieved.
  It may be asked why it is necessary, in my view and in the view of the sponsors of the Bill, to legislate in the narrow sense of kidneys alone. Not only is this necessary because kidney transplants have so largely been successful during the last seven years but for a much more fundamental and physiological reason. Kidneys removed from a dead body are valueless for transplant purposes unless chilled or refrigerated within one hour of their removal from the dead body; or, alternatively, inserted by surgical means into the body of a sick living human being, to save life.
  Under the 1961 Act it is necessary for the owner of the body to obtain the permission of the next of kin before the kidneys can be extracted. It is manifestly impossible to obtain such permission within one hour of the death occurring. When moving the Second Reading of the 1961 Measure, the then Conservative Minister, the late Miss Edith Pitt, who was for so many years a valuable hon. Member of the House, said:
  "By Clause 1(2) the person in possession of the body may also authorise removal of the parts unless—having made such reasonable inquiry as may be practicable—he has reason to believe that the deceased had expressed an objection to this or that the surviving spouse or any surviving relative of the deceased so objects."—[OFFICIAL REPORT, 20th December, 1960; Vol. 632, c. 1232.]
  I cite a common case which is sad and grievous to relate but which is common in our society. A young man, driving a motorcar along the M1, perhaps drives too fast and, having been involved in a collision, is taken to hospital grievously injured. The hospital is near the motorway, but he dies there. There are scores of such cases every year. Sadly, in the majority of cases young men and women are involved.
  812
  The hospital registrar or the doctor in charge of the hospital can hardly conform to the requirements of the 1961 Act if he wishes to arrange for the hospital surgeon to avail himself of the kidneys after death following the accident—kidneys which are probably entirely healthy and able to be removed from a healthy young man or woman—because the hospital registrar cannot telephone the spouse or next of kin in these terms and say, "Sadly, your husband had a motor crash on the M1 less than an hour ago, was admitted in a dying condition and he died here half an hour ago. We hereby notify you of his death. Please may we have his kidneys?" That procedure would be unthinkable, callous and uncivilised, but it is the requirement of the law if the kidneys are to be obtained.
  Although I cannot be sure of the statistics, the medical profession informs me that last year about 3,000 men, women and children died in Britain through kidney diseases and ailments. I am told that about 150 successful transplants were accomplished. The surgeons in charge of transplant operations have averred—they are unanimous about this—that the number of life-saving operations would have been infinitely greater last year had there been a generous supply of good healthy kidneys, chilled and refrigerated—a kidney bank, to put it that way—available for them to draw on, notably in the correct blood groups, just as it is commonplace today in the case of grievous accidents for surgeons and doctors to draw on blood banks in all parts of Britain although blood banks 20 years ago were unknown. Today human beings readily give their blood to these banks for the future saving of human lives.
  If I am able to steer the Bill onto the Statute Book, I envisage that, with the passage of time, similar arrangements will be made and we will have kidney banks. However, for the present we should change the law because it is unduly restrictive and, as a result, it is gravely handicapping the work of surgeons and doctors in carrying out successful kidney transplants.
  I recognise at once that there may be objectors to the Bill, on religious, moral and social grounds. On 13th March the hon. Member for Liverpool, West Derby

  813
  (Mr. Ogden) voiced shortly—he could not do more on that occasion—some of his objections. I have been unequivocal in all I have said and written on this subject in recent months in saying that I would provide the utmost safeguards in the Bill to facilitate objectors' making known their objections and, or, to put it in contemporary jargon, to contract out.
  The present state of the law requires a man or woman to contract in. For example, the Automobile Association published in its magazine Drive a few weeks ago a form of certificate which said, in effect, "I wish to state that if I am killed in an accident I have no objection to the surgeon, after my death, removing my kidneys to save a sick human life." The Automobile Association says, in effect, that the certificate should be inserted in the driving licence normally carried in a motorist's wallet—and most people carry their driving licences with them. Therefore, the present law requires that the person should contract in, but I say that that would not be sufficiently widespread among the motoring public particularly, and among all men and women, to secure a large enough supply of fresh human kidneys from the dead.
  I wish by this Bill exactly to reverse the law, so as to make it legal for any doctor to remove the kidneys of a human being after death, so long as the death has been certified by two doctors other than the surgeon who is to carry out the renal transplantation; to make it legal for the kidneys to be removed unless those who have died have said in their lifetime that they object to their kidneys being removed after death.
  I shall, in a few moments offer evidence in support of what I seek to do, but I want now to deal with one or two surgical aspects of what I am putting to the House. It may well be considered by some people not informed in the matter that it would be barbarous to cut open a dead body in order to remove the kidneys. I claim that it is not barbarous to cut a dead body in the very limited fashion which the removal of kidneys requires.
  The incision is clean, and relatively small—it is only a few inches long—and, after removal of the kidneys, it may be restored with precision and perfec
  814
  tion. A few weeks ago, studying every aspect of the problem, I said to my own doctor, "What is involved in taking out my kidneys, old boy?" He replied, "Not very much, Gerald. The good Lord has given you two. As far as I am aware, your kidneys are in good order, Gerald. You give me a sharp penknife, I will sterilise it, whip out a kidney and sew you up in a few minutes. The good Lord has provided that you, as a healthy human being will live many years on the one remaining kidney." Such is the perfect balance and construction of the human frame, in healthy condition. The point I seek to make is that the removal of kidneys from a dead body is relatively a small surgical operation—but the body has to be certified as being really dead by two doctors other than the surgeon who is to carry out the transplantation.
  Let me go a stage further. Very often, an autopsy—a post mortem—is ordered. Those acquainted with this process will know that it involves the opening of the body from the gullet to the crutch—not a small incision at all—and then the resewing of the body. That search for the cause of death is not generally objected to by society.
  Let me take the evidence a stage further. Fifty years ago, most men and women objected to cremation; today, for a variety of reasons, the majority of men and women opt for cremation—though, again, we do not know the exact figure. So it is innate in this option so freely expressed that the majority of men and women in our contemporary society accept the total destruction by fire of their remains, after death.
  Those who have religious leanings believe that the spirit will go aloft but that the inanimate remains are dead beyond redemption, and that whether they are put in the fire and cremated and utterly destroyed and sprinkled as ashes, or put in a coffin and buried deep down so that when the coffin disintegrates they go to the worms, the result is still the total destruction of those human remains. I hope that I do not offend susceptibilities by putting these matters in a somewhat indelicate fashion, but I am obliged to do so now because we are talking of very fundamental things.
  That leads me to my conclusion, which is a very important conclusion. I would go to any limits to save human life, especially

  815
  young life, and the tragic part of the nearly 3,000 deaths last year from kidney ailments and disease is that so many of the victims were young; lives that could have been saved had kidneys been available.
  As to the ethical grounds, I said when bringing in this Bill:
  "Following the diagnosis of death by conventional and accepted means, and death certified by two doctors, other than the surgeon conducting a renal transplantation, it is justified, in my view, on ethical grounds, to remove a kidney or kidneys for prolongation of life of a sick human being, always provided"—
  and, I repeat, always provided:
  "there should be some safeguard for persons who do not wish this to be done for religious or other reasons".—[OFFICIAL REPORT, 13th March, 1968; Vol. 760, c. 1377.]
  That is exactly my position today.
  Perhaps I may say at this point that I am most grateful to the right hon. Gentleman the Minister of Health for coming here on a Friday to listen to a private Member moving a Bill of this sort. It shows a great sense of Ministerial responsibility that I am not to be fobbed off by a Parliamentary Secretary. I congratulate the right hon. Gentleman on that sense of responsibility.
  The Minister has convened an important conference of all the leaders of medical, surgical, religious, lay and philosophical thought in this field, going as wide in his choice as he possibly could, to consider the implications of transplantation of organs having regard to the massive position this matter now occupies in the minds of civilised men and women all over the world. We are captivated, of course, by the story of the transplant of a human heart and the fact that the man is still alive. We are not ready to deal with that development yet. I want to deal with an area of proven success, which relates to kidneys, alone.
  The conference reached certain important conclusions on 6th March, 1968, which the Minister revealed on 25th March in reply to a Parliamentary Question from his hon. Friend the Member for South Shields (Mr. Blenkinsop). The reply stated:
  Conclusions of the Meeting held on 6th March, 1968
  "1. The practioners engaged in kidney transplantation explained that this work is now
  816
  being held up by the difficulty of obtaining sufficient cadaver kidneys. This was partly because of the difficulty of making the necessary inquiries of relatives in the time available partly because of lack of co-operation from medical colleagues in charge of potential donors before death on whom the task of making such inquiries would fall. They would like…"
  that is, the members of the conference—
  "the Human Tissue Act to be amended to dispense with the need for inquiries of the relatives, leaving it to objectors to make their views known in advance."
  Thus so far the conference recommends precisely what I recommend in this Private Member's Bill.
  I shall not read all the Parliamentary Answer, but the only other relevant paragraph, which is the fourth paragraph:
  "The conference accepted that in the absence of cadaver kidneys the taking of single kidneys from living donors might still be justifiable but emphasised that there were special consideration affecting young persons under 18 which made it especially difficult to ensure that consent was free from outside influence."—[OFFICIAL REPORT, 25th March, 1968; col. 761, c. 217.]
  I do not propose to deal with that in this Bill. I am only concerned in this Bill with the transplant of kidneys from dead persons to living persons.
  The Minister has been kind enough to tell me that his conference has retired to consider further the one outstanding matter in regard to transplant of kidneys, that is, what safeguards there ought to be. I believe that the greatest safeguard of all is built into this Bill. That safeguard is to encourage men and women to express their wishes one way or another during their lifetime and not to rely upon their relatives to do what they themselves ought to do about their human bodies.
  Most sensible men and women make a will. There are a few foolish people in all strata of society who do not make wills. That is because they have some sort of apprehension about making a will. I suppose that as educational standards rise in Britain the time will eventually come when everybody will make a will. I want people to proclaim in their lifetimes whether they object to their kidneys being taken after death. That is all I want them to do. Otherwise, if this Bill reaches the Statute Book, their kidneys would be taken. I say that that is not an unreasonable proposition.
  The Bill itself is simple and requires very little explanation from me. Clause

  817
  1 seeks to extract from the Human Tissues Act, 1961 any matter relating to renal transplantation. The Act of 1961 would no longer apply to kidneys. Under Clause 2 it would become lawful, when this Bill reaches the Statute Book, to take
  "from the body of a human person, duly certified as dead, any kidney or kidneys required for medical purposes unless there is reason to believe that the deceased during his liftime had instructed otherwise."
  Those words of mine may not be perfect to give effect to the sentiments which I believe are widely held, but of course they could be amended without difficulty in Committee.
  Clause 3 covers the very important point I have deliberately repeated twice:
  "a death certificate must be signed by two medical practitioners other than the surgeon conducting the renal transplantation."
  It is rather a pity that Mr. Speaker is not in the House at this moment for it is unusual—with deep respect to you, Mr. Deputy Speaker—to quote from the earlier activities of Mr. Speaker before he took the Chair, but in this context it is notable that Mr. Speaker of the House of Commons today, as the hon. Member for Southampton, Itchen was largely responsible for the support given to the Human Tissue Bill of 1960, which became an Act in 1961. He then said:
  "The Corneal Grafting Act, which is to be repealed…"
  by the Human Tissues Bill if it were carried—
  "was a Private Member's Bill which was introduced, as my hon. Friend the Member for St. Pancras, North (Mr. K. Robinson) said,…"
  The Minister of Health who is listening to me today—
  "under the Ten Minutes' Rule by Mr. Gerald Williams"
  the Conservative Member for Tonbridge in 1952—
  "and thanks to the generous co-operation of all Members of the House whom we had endeavoured to educate in the significance of the Measure, it got through all its remaining stages."—[OFFICIAL REPORT, 20th December, 1960; Vol. 632, c. 1240.]
  I like Mr. Speaker's words:
  "whom we had endeavoured to educate in the significance of the Measure."
  I have spelled out hundreds of thousands of words in the last two or three weeks explaining to hon. Members that I have no design on their kidneys during their lifetime.
  Mr. Eric Ogden: The hon. Member is not going to have mine out.
  Sir G. Nabarro: This is largely an educative process. Hundreds of letters have descended on me since 13th March, about two-thirds supporting what I am seeking to do, and about one-third opposing, but most of the men and women opposing did not quite understand what I am seeking to do, or they have a religious objection to it which I respect.
  It is very interesting that Mr. Speaker was the principal sponsor of the first human organ transplant Bill ever brought to this House, which also was a Ten Minutes' Rule Bill, like mine. It was called the Corneal Grafting Bill. It was brought in on 14th May, 1952 by the then Member for Tonbridge, Kent, Mr. Gerald Williams. The first sponsor was the present Speaker of the House, and the words used I think were significant and important to the case I am pleading today:
  "If the cornea is injured, it can be replaced by the cornea from another eye, and this will enable sight to be fully restored. At the moment these corneas are taken from the eyes of living people. That is to say, if somebody has a disease of the eye other than of the cornea and the eye has to be taken out, provided that the cornea is in perfect order it can be used for grafting on to the eye of somebody who has a disease of the cornea."—[OFFICIAL REPORT, 14th May, 1952; Vol. 500, c. 1445.]
  This is exactly analogous.
  Mr. Speaker, I am sorry to have been taking your name so largely in vain as to your activities before you were Mr. Speaker, but I am quoting from the speech of the then Member for Ton-bridge on 14th May, 1952 when he won permission to bring in the Corneal Grafting Bill of which you were first sponsor. You are the progenitor and initiator of human organ transplant legislation in this House by what you then did.
  Mr. Speaker: Order. The hon. Member can refer to what Mr. Speaker did in a previous incarnation but he cannot pray Mr. Speaker in aid of this Bill.
  Sir G. Nabarro: No, Sir; it is only a passing reference, and I am sorry if I have transgressed by quoting your earlier activities. I am a very enthusiastic supporter of what you did in those far off days, but there is this remaining difference

  819
  between the day when corneal grafting was first carried out in the year 1900 and the Bill which became the Corneal Grafting Act 52 years later. The Act of 1952 was the progenitor of the Human Tissues Act, 1961. Medical science and surgical evolution demanded that the law should be attuned to the then temporary condition. But the cornea is not a blood fed human organ; the kidney is. Since 1961 we have very largely perfected this process—it is not entirely perfected yet—but to facilitate perfection it is necessary to change the law in the sense that I have suggested.
  Mr. Sydney Bidwell: Does the hon. Gentleman know what surgeons advise as being how long it is that a kidney can be left in a dead body before it becomes unusable? I have in mind the feeling the people have about the whole question of organ transplanting, particularly the heart, which some people are reluctant to accept, fearing that one day one medical man will say, "Let us finish him off, because we have a more important person" and—
  Mr. Speaker: Interventions should be brief.
  Sir G. Nabarro: I do not know, and I do not think that anybody knows. Heart transplantation is in a very embryonic state. I do not wish to pursue that matter too deeply, first, because it is not within the compass of the Bill, even on Second Reading, and, secondly, because it would be a trifle unfortunate if I were to proclaim my views on the opportunities for survival of the one man alive today with a heart transplanted from another human being.
  There is a technical Parliamentary point which I hope will appeal to the Minister of Health. He is anxious to get the views of his highly informed conference on the safeguards necessary for renal transplantion. The Conference will meet again shortly. I hope that it will pronounce on safeguards at its next meeting. I fancy that it will, for this is not a matter of great difficulty, although it requires discussion among informed people. In the ultimate, it is a matter for Parliament and not a conference. A conference can make
  820
  recommendations, but it is for Parliament ultimately to establish the law.
  I plead with the Minister not to oppose the Second Reading of the Bill, which is original legislation on blood fed organs, and to let the Bill go to Standing Committee in the sure knowledge, with all his Parliamentary advice from his Ministry and elsewhere, that the Bill could not be taken in Standing Committee until after the Whitsuntide Recess, which would be about the middle of June. Surely his conference will have pronounced by the middle of June, eight to 10 weeks hence. I plead with him, therefore, to support the Second Reading today, leaving to his conference, which amply supports the principles of the Bill—only this matter of safeguards still outstanding—and then enjoin his conference to pronounce on the safeguards it recommends before 1st June, so that we may all consider them in Committee, on this Bill.
  I repeat that the Bill has all party support as well as medical and lay support in the House. There are 12 sponsors, 11 other hon. Members and myself. Six are medical doctors and six are laymen. Of the 12, six are Tory Members, five are Labour and one is a Liberal. I justly claim therefore that the Bill has powerful and widespread support.
  2.45 p.m.
  Mr. Laurence Pavitt: Had I been told in my early days in the House that I would have been sponsoring a Bill by the hon. Member who in a previous incarnation we used to know as the "Biggest kidder from Kidderminster", I should have been very surprised. But the hon. Member for Worcestershire, South (Sir G. Nabarro) has introduced a Bill which deserves the widest support. As with so many things here, I disagree with the hon. Gentleman 99 times out of 100, but on the 100th time one has to accept that he has argued his case with reason and has brought before the House a subject which deserves consideration. On this occasion I have no hesitation in giving him my fullest support. I remember one other occasion when a most important Measure, dealing with the safety of paraffin heaters, found its way to the Statute Book because of the hon. Gentleman's efforts, and I congratulate him on that, too.

  821
  My voice in support of the Bill today may not be so important as the fact that the previous Bill on the Order Paper, the Hearing Aids Bill, in which I am passionately concerned, which I am sponsoring, which has all-party support and is designed to help people with hearing disability, I have deferred for further consideration to a later date, and I hope that that has assisted the hon. Gentleman by providing him with time as much as my words of mine.
  He rightly said that at present there was a genuine limitation on the number of lives which could be saved, many of them young lives, because of the inadequate supply of kidneys to be transplanted into people who have had renal failure. Dr. Stuart Cameron, who has done some remarkable work at Guy's Hospital, recently invited a number of lion. Members from this side of the Committee to look at the dialysis and renal department of that hospital. He made that point with considerable force, impressing all of us. My hon. Friend the Member for Southall (Mr. Bidwell) asked flow quickly a kidney had to be transplanted. According to Dr. Cameron, if a kidney is removed within five minutes, that is extremely good; up to 30 minutes, it is all right, but beyond that difficulties start.
  The Bill will mean that lives which would now be lost will be saved. The hon. Gentleman called the findings of a recent conference to his support and so do I. One of the most interesting aspects of the examination of the whole subject of renal failure has been the pioneering work at the Royal Free Hospital and the constant examination of these problems by a group of doctors, the Transplantation Group, which meets at the Royal Free Hospital from time to time aid which has the backing of many of the surgeons and the physicians interested in the subject in the London area and which recently decided to give strong support to this Bill.
  Not only transplantation is important in renal failure. It should be known—and I wish that the Press would take more note of this—that this country leads the world in dialysis, the kidney machine. We have more kidney machines per head of the population than any other country. This development has saved countless lives by a machine which artificially
  822
  changes the blood when the kidney is no longer functioning. British work in this field is pre-eminent and it is something of which Britain should be extremely proud. Anybody working for an improved National Health Service should take pride in this fact.
  We hear about dialysis machines only when they are not available through the N.H.S. or when somebody has saved pennies to buy one. But dialysis work needs the Bill, because successful dialysis on renal failure must be complemented by a transplant programme alongside and connected with the dialysis department, so that the treatment which restores happiness for a limited number of years can be extended. The process of dialysis takes 10 hours three times a week and allows a person with renal failure to carry on for the rest of his life, but he could be saved all this time and trouble if the dialysis could be complemented by having a kidney available at the time when a transplant could be made, and thus save the need of further dialysis.
  Although there are matters on which we differ, I believe that my right hon. Friend is the finest Minister of Health we have had for many years. He has certainly done more for the Health Service in the past three years than was done in the previous 10. But however much he does, we cannot really supplement the hospital facilities, and overcome the shortage of beds, by home dialysis. That is a great help, but if we can have an effective transplant system most of the problems of training a relative and making sure that there is comprehensive coverage can be avoided.
  I had an experience of the magnificent way in which the units work only a few weeks ago. The renal failure had taken place of a young lady aged 21. The weather was very bad and her blood needed to be changed constantly. At a time when we faced the frustrations and hazards of political life and a number of problems were vexing us all it was very encouraging that within one hour 50 people could be obtained on the telephone to give a pint of blood. In the hours that followed 35 pints were given. That was the measure of the way in which a renal unit, a dialysis unit, can extend itself to save life. If living people are prepared to give of themselves in

  823
  that way the least one can do is to be prepared, when one's body is of no further value to oneself, to give the kidneys from it to save life.
  Unfortunately, after the night I gave my pint of blood, as one of the 35 who were able to do so, we were disappointed to learn on telephoning the next day that we had not been successful in saving the girl's life. But when I was having my cup of tea after giving the blood the touch on my shoulder by the father, who just said, "It is my daughter. Thank you", is the kind of sentiment that would make all of us think that if it is possible to save a human life by giving a pint of blood, 99 people out of of 100 would be only too pleased to know that they could save a life by the gift of their kidneys within five minutes of dying.
  Therefore, I hope that the House will at least give the Bill a Second Reading. Owing to the Human Tissue Act, 1961, assent must be obtained before organs are taken. I have checked with three teaching hospitals in the London area and have found that the number of people who refuse is infinitesimal, and that is in the very trying and difficult circumstances when the relatives must be asked immediately on the point of death whether or not this can be done. Few people deny the chance to give kidneys in order to save a life, and obviously the Bill would receive widespread public support throughout the country. I hope that it will not be killed this afternoon. Let it have its chance, let it go to Committee and have all the advantages of the results of the Minister's conference. If it cannot make the grade and it is necessary to have a better and more comprehensive Bill, it might be possible to introduce one at a later stage. But I ask the House to accede to the hon. Gentleman's request and give the Bill its Second Reading now.
  2.43 p.m.
  Mr. David Lane: I congratulate my hon. Friend for Worcestershire, South (Sir G. Nabarro) on bringing the Bill before the House today and on what he has done, particularly in recent weeks, to inform and educate public opinion about what is at stake. I am pleased to give the Bill my support, because I believe that it is a modest but very useful humanitarian Measure.
  824
  I pay tribute to the work of doctors and surgeons in recent years in this field. The Human Tissue Act, 1961, has already been quoted, and the mere fact that in our view this Bill is necessary is witness to the extraordinary speed of advance in this field of medicine and surgery in the past seven years.
  The Bill has in no way been accelerated by the recent heart transplant work and publicity about it. This problem has been obvious for many years in kidney surgery, and I acknowledge the work done by my predecessor, the former Member for Cambridge, Mr. Robert Davies, who was very aware of the problem and was already taking action soon after he came to the House in 1966 to put the facts before the Minister of Health.
  I should like to quote the experience in my constituency as one practical example of the work that is going on and the problem faced by those concerned in it. We have a team of doctors and surgeons working on the frontier of medical and surgical science and practice, led by Professor Roy Calne, and we have the transplant surgery unit and dialysis unit working together. At present the team is carrying out about 30 successful operations a year, and over 50 per cent. of the transplants it has done so far have been successful in restoring the patient to normal life. But there is great scope for increasing the work in the Cambridge hospital, and that is the point of the Bill. In the past year in the Cambridge area alone about 20 young people died of kidney disease who might have been alive today if the law had been different.
  We can make better use of the existing hospital facilities through this modest change in the law. It is essential that the kidney be removed within 60 minutes of death. The incision is very small, and the surgical team is always ready to go into action to make the transplant operation within a very few hours of notification of death and obtaining permission from the next-of-kin for the kidney to be removed. But under the existing law, which is unduly restrictive, we come up against a problem described by Professor Calne as follows:
  "The great difficulty is"—
  and this must be stressed—
  "that the kidney must be removed within an hour of death, otherwise it is of no use and

  825
  sometimes it is impossible to contact the relatives in this period or even if the relatives are contacted they are so distressed that to attempt a discussion on the removal of the kidneys would be an unwarranted additional burden."
  That very practical experience bears out what my hon. Friend said, and it is that difficulty which our Bill tries to overcome. I have quoted the experience of Cambridge, but there are many other places in the country known to hon. Members where the same work is going on. I do not say that the problems are necessarily so great in all cases, but it is a general rational problem.
  I want to stress one or two points about the Bill. First, it is deliberately confined to kidneys. We are not raising the much wider and more difficult problem of heart transplants. If it is passed, the Bill will give considerably more scope to the doctors and surgeons involved. The medical profession is predominantly in favour of a change in the law. Under the Bill, it will no longer be necessary to put the next-of-kin through the embarrassment and additional grief caused by the present law. The change we suggest is absolutely in line with an important conference dealing with medical ethics which took place about two years ago. Organised by the firm of C.I.B.A., it was attended by doctors, lawyers and churchmen. There was general agreement at the conference in the following terms:
  "In any designated hospital it should be lawful to remove from a dead person any organ required for medical or scientific purpose, unless the hospital authorities had reason to believe that the deceased in his lifetime had forbidden this to be done, provided that such removal should not disfigure the dead body."
  We know there are serious objections on the part of some people, and some hon. Members of the House. We heard the hon. Member for Liverpool, West Derby (Mr. Ogden) at the time my hon. Friend introduced his Bill, but it does seem to me that, as my hon. Friend has said, in a civilisation where cremation is becoming more and more general, where post-mortems are constantly done, disfigurement of the body by this operation is minimal. Of course, we absolutely respect the views of those who object, even if we do not agree with them, and who do not want their bodies maimed or disfigured in any way after death. So I stress the safeguards we are anxious should be contained in any new law or procedure in this field.
  826
  My hon. Friend has quoted clause 2 of the Bill, and mentioned cards which the A.A. has suggested motorists might carry—as it were, for contracting in. There are two other methods which I would mention for those who wish to contract out. They could carry, as many did in the war, a little bracelet saying they do not wish their bodies to be used for this purpose; and, looking a little further ahead, it might be possible to register the objections of individuals in some central computer, to which any hospital to which dead bodies are brought in could have immediate access. But I would suggest that objectors, whom we absolutely respect, would be amply safeguarded by the provisions of this Bill.
  As for public opinion, there was a recent survey which showed that a clear majority, some two-thirds, would be in favour of this kind of change in the law, and this was borne out in the correspondence which my hon. Friend mentioned.
  As for the Government, I too, should like to welcome the fact that the Minister has himself come here today. I hope he will smile kindly on the Bill. I am encouraged to think so because of the obvious interest he has been taking in recent months in this subject. Last December he appointed the Renal Transplantation Advisory Committee. My hon. Friend has already referred to the conference early last month whose conclusions were put to us the other day by the right hon. Gentleman in a Written Answer, and I should like to quote more of those conclusions in addition to those quoted by my hon. Friend. The first is this. The conference agreed that
  "no attempt should be made to lay down a legal definition of death or rules which doctors should observe in reaching what must be a clinical decision; but that to allay disquiet vital organs should not be removed until spontaneous vital functions had ceased and two doctors, each independent of the transplantation team and one of them being at least five years qualified, had certified that this condition was irreversible."
  I suggest that Clause 3 of the Bill is entirely in line with the spirit of that conclusion. Summing up, the conference said that it
  "accepted that Section 1(2) of the Human Tissue Act restricts the availability of donor organs to an extent which prevents the treatment of patients who will otherwise die. But the conference recognised that there are people, including the members of certain religious groups, who would object to the removal of

  827
  organs from their own bodies after death or from those of their close relatives. The conference did not reach firm conclusions on the safeguards which would be required for these people, and wished to meet again to consider them."
  I am pleased that in presenting the conclusions of the conference to the House the Minister appeared to have an open mind on this, saying he would await the outcome of the further meeting before deciding on the need for legislation and the form which it might take.
  I believe, as the hon. Gentleman the Member for Willesden, West (Mr. Pavitt) has just said, that the right course for the House, if I may presume as a very new Member to suggest this, is to give the Bill a Second Reading, and points of doubt which are genuinely worrying people can be put right, if they need putting right, in Committee; but we are today looking at this Bill in principle, and I would have thought that any Measure designed to save human lives should commend itself in principle to this House.
  2.55 p.m.
  Mr. Eric Ogden: I want to make it quite clear that I support the intention of the supporters of the Bill although I am almost wholly opposed to the methods which they propose to meet those intentions. This is the fundamental difference which I think it will be very difficult to meet.
  I must say I found it rather strange that the hon. Member for Worcestershire, South (Sir G. Nabarro), the champion of individual freedom, the hon. Member who, on the Industrial Expansion Bill only a few days ago, objected to it because it was—what did he say about it?—a "proliferation of nationalisation" Bill, now brings forward a Bill to make available by the State, for the purposes to be decided by the State, the bodies of those who are dead. That is what the Bill does. I think a better title for it might be "The Nabarro (Nationalisation of the Dead) Bill".
  I am told that it has enlisted the support of the medical profession. Whilst I have a very high regard for the medical profession, I think there are points of view on one side and the other about whether legislation should be entirely tailored to what the profession's proposals may be, and that the proposals should receive and be considered with a
  828
  certain amount of care. I am told that it has the support of my right hon. Friend the Minister of Health. I agree with the tributes which were paid to my right hon. Friend by my hon. Friend the Member for Willesden, West (Mr. Pavitt) a few moments ago. But I must say that this is a rather unholy partnership, a Burke and Hare Mark II "grave robbers" business, and not one I particularly support.
  The hon. Member for Worcestershire, South referred to my objections when he introduced the Bill, and he said my objections were shortly voiced. He said they could not have been any other. If he looks at the record he will see that I took only three minutes to voice my objections, where I could have taken 10, but I think that at least the point was made, and I shall try to be as brief now as I was on that occasion.
  The objection, as I said before, is not to the intention but to the method. The hon. Member for Worcestershire, South said that he wanted people to object in life, and that the objection should not have to be found only after death. I want people in life to decide consciously and positively what they want to do. He wants people to say, "You shall not take." I want them to say, "I propose to give". This is the difference, which I do not think we should be able to reconcile in this Chamber or outside.
  I accept that the hon. Gentleman has, as I have, a high respect for the living and a high respect for the dead as well, but it is the duty of human beings to decide in good faith and in sound mind how his bodily remains should be disposed of after death, and to do it by a deliberate act and by design and not by default.
  I have no objection to the operation. That does not distress me at all, certainly if the purpose is to save life. I was concerned when the hon. Gentleman said he would support any action if it meant the saving of human life. I think this is the way they began in Germany in the 1930s with some of the experiments which began there at that time.
  My main, principal objection is that I want people to contract in and not contract out, as we have provided for with people who come forward to give blood transfusions. I am certainly glad that on this subject we do not have to be paid for our blood as people do in some other countries.

  829
  I have to recognise that the Bill was introduced by leave of the House by a majority of 155 to 40. I accept that majorities have their rights, but minorities also have rights. It would, perhaps, be a little difficult of me at this time to try to talk out the Bill. If I had waited a little longer, that might have been easier, but I do not think that was the purpose for which I was sent to this place. A decision will have to be made it some time, and objections should be dealt with as they come along.
  I accept that the Bill is likely to receive approval either now or later because the Minister and the House seem to want it.
  As to safeguards, about which so much has been said, the hon. Member for Worcestershire, South said:
  "I reiterate that there would be adequate safeguards in the Bill proposed, for any religious or ethical objectors."—[OFFICIAL. REPORT, 13th March, 1968 Vol. 760, c. 1380.]
  I have waited for the publication of the Bill and I cannot see in the four Clauses of the Bill any provision for those safeguards.
  Sir G. Nabarro: May I explain the point? The Ministerial conference has now decided in principle that we should proceed exactly in accordance with the terms of the Bill, except only on the matter of safeguards. The Bill was printed after the Ministerial conference list met. I hope the safeguards will be pronounced by the conference before the Bill is taken in Committee so that an extra Clause can be added to enshrine those safeguards.
  Mr. Ogden: I accept to a large degree what the hon. Gentleman says, but I am not being asked to support or reject a Bill which may or may not have something added later. I am asked to support a Bill of four Clauses which is before the House now. As one who his some regard for Parliament, I must say that decisions are taken by this House and not by outside bodies. The safeguards to which the hon. Gentleman his referred are not in the Bill at the present time, but I accept that the intention is that some safeguards will be written Into the Bill later.
  The type of safeguard is a difficult matter. Reference has been made to a card and a bracelet. Are we to go back to the days of carrying bracelets and
  830
  a tattoo mark on the back? What kind of 1980 science fiction is this. Reference was made to a central computer agency. Even with such a safeguard we would have to rely entirely on individual doctors making the inquiries.
  Are those in criminal institutions to be automatically excluded? Are the insane to be automatically excluded? Are the mentally handicapped to be automatically excluded? Are the very young, who can neither make nor break contracts on their own behalf, to be automatically excluded? Are the very old, in geriatric wards, to be automatically excluded? There is a fear that there will be pressure in institutions, on those who have no protection for themselves. Will they not think something terrible might happen to them if they refused consent. Can we say it will be easier when dear Mrs. Jones has to go into hospital, and matron welcomes her and says, "We know you are rather ill, love, we are going to look after you, you need not worry. But in case things go wrong, can we have your kidneys?" How is the machinery to be worked out? In the same way as the hon. Member for Worcestershire, South, I also have had a great deal of correspondence, most of it supporting the point of view I put on the introduction of the Bill. It is fair, reasonable correspondence, not from the frenetic fringe, not from the lunatic fringe, but difficult to meet. There is in my city of Liverpool a Regional Urological Centre, and I have received a letter from a distinguished surgeon at this centre, which says in part:
  "As the physician charged with the responsibility of initiating a transplantation programme, I am naturally responsible for such cases occurring in your constituency of West Derby. Perhaps you could arrange to be with me when I next have to tell some parent that I can do nothing for their child, or some young husband that I can do nothing for his dying wife. You will then share the grief and anguish of such an interview, and will, I think, come to realise which would be the lesser of the two evils."
  That phrase,
  "the lesser of the two evils"
  may be the key. I have since had correspondence with the physician. I hope to visit the centre during the Easter Recess so that I can learn more of the process. The reply of the physician to the letter I sent him contained this paragraph:
  "Incidentally, you may be interested to know that I am also a little concerned about

  831
  paragraph (2) of the Bill and have written to Sir Gerald Nabarro suggesting some safeguards."
  The argument now is on, what kind of safeguards we can write into the Bill.
  To state again the fundamental objection, I want people to contract in, whereas the hon. Member for Worcestershire, South wants them to contract out.
  In spite of the propaganda campaign that may be building up for the extension of the proposed powers to other organs of the human body, I restrict my remarks to kidney transplantation. The passing of this Bill may diminish some of the respect that we have for the living and for the dead. The time may come when we begin to regard our bodies—these things of wonder and mystery—as collections of spare parts to be at someone else's disposal. I have already made provision for my own body. Parts of it may be useful to some hon. Member on this side of the House, but I have taken care to stipulate that they are not used for right hon. and hon. Members opposite.
  Clearly this Bill will now go to a Standing Committee. If we cannot get the maximum number of safeguards into the Measure with the maximum publicity for them, I reserve the right to oppose it much more strongly than I have done so far when it comes back on to the Floor of the House.
  3.5 p.m.
  The Minister of Health (Mr. Kenneth Robinson): I recognise that the hon. Member for Worcestershire, South (Sir G. Nabarro) has introduced this Bill with the aim of assisting the saving of more lives by facilitating renal transplantation. I applaud his motives with sincerity, and I congratulate him on his speech.
  Renal transplantation is still being developed, but I agree that recent experience now shows considerable promise that the results may reach a high level of success. I am very glad that my hon Friend the Member for Willesden, West (Mr. Pavitt) mentioned the complementary treatment of chronic renal failure by intermittent dialysis, and I am grateful to him for putting the position into better perspective than when reference is made to it in the Press. This country has a very good record in intermittent dialysis, and it is well that it should be known
  832
  and said from time to time. I thank my hon. Friend for saying so.
  As the hon. Member for Cambridge (Mr. Lane) said, the Health Ministers have set up an Advisory Committee on the development of renal transplantation, as was announced to the House on 14th December last. It was not the intention that this Committee should, nor has it been asked to, extend its deliberations to possible amendments of the law.
  I accept that the supply of kidneys for transplantation presents a real problem to the doctors concerned. Whilst living donors can be used. it is obviously preferable that the kidneys required should be taken from the dead. This is technically possible, provided that it is done very soon after death and that the kidney is itself suitable. The victims of road accidents are among the most suitable as potential donors, but equally the suddenness of death in such cases, often of young people, has the maximum emotional effect on the family and relatives.
  The Human Tissue Act, 1961, went as far as was thought to be reasonable at that time to strike a balance between facilitating the possible use of organs to save another life and the feelings and religious beliefs of the dead person's family. I think no one would deny that these have their place and that changes which may be desirable to keep pace with advances in medical science and practice will not be generally acceptable unless such feelings are treated with due respect.
  Thus we have, on the one hand, the claims put forward by many in the medical world that more lives could be usefully prolonged if it were easier to obtain organs for transplantation. They claim that many opportunities are at present lost to them, not because of objection by the donor or his relatives, which they would regard as decisive, of course, but because the time taken to carry out the procedure of obtaining consent under the 1961 provisions may render the kidney or other organ useless for transplantation. However, as most hon. Members have recognised, there is the clear need for safeguards to prevent unnecessary affront to the real and sincere feelings of those people who have objections to the removal of organs from the bodies of the dead.

  833
  I agree with those hon. Members who have said that we can be grateful to the Automobile Association for encouraging motorists to fill in and carry with them a card recording their willingness for their organs to be used in the event of death. Such action reduces the problems of consent very considerably, and I hope that today's debate will encourage even greater acceptance of the idea that another's life can be usefully prolonged by the transplantation of organs from a person whose life could not be saved.
  It was with the idea of bringing representative opinion to a focus that I convened a private conference to discuss the whole subject, as was announced in answer to a Question on 13th February. I was able to publish in the OFFICIAL REPORT of 25th March an account of the conclusions of the conference at its first meeting. Here I made it clear that the conference wished to meet again to consider the safeguards which will be needed in any Amendment to the Human Tissue Act for people who would object to the removal of organs after death from their own bodies or from those of their close relatives.
  Perhaps I should make clear at this point one matter on which I think the hon. Member for Worcestershire, South, may have inadvertently misled the House. In reading an extract from my Answer about this conference, he quoted the sentence:
  "They would like the Human Tissue Act to be amended to dispense with the need for inquiries of the relatives…".—[OFFICIAL REPORT, 25th March, 1967; Vol. 761, c. 216–7.]
  "They" in this case are the practitioners engaged in kidney transplantation, not the conference as a whole. The conference expressed a view in slightly less unequivocal terms.
  It will be about two months before this conference can be reconvened. I regret this, but for various good reasons it is impossible to make it earlier. As I have already said, I must await the views of the conference before I can decide on the precise form new legislation should take, in the event of the conference advising, as I believe is likely, that some change in the present law is desirable.
  834
  Turning now to the Bill before the House, I very much appreciate the motives of the hon. Member in bringing it forward, and his readiness to cooperate with the Government. I am content, therefore, to leave it to the House to decide whether to accord this Bill a Second Reading today, on the understanding that in about two months' time or so, when we have the report following the resumed meeting of the conference, we shall then recommend, after consulting the hon. Member, what action would be appropriate at later stages of this Bill, should it receive a Second Reading today.
  Question put and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

  LOCAL AUTHORITIES (GOODS AND SERVICES) BILL
  Order read for resuming adjourned debate on Question [15th December], That the Bill be now read a Second time.
  Question again proposed.
  Notice taken that 40 Members were not present;
  House counted, and 40 Members being present—
  Debate further adjourned till Friday, 26th April.

  HIGHWAYS (STRAYING ANIMALS) BILL
  Order for Second Reading read.
  Mr. Speaker: I do not propose to put this Bill to the House for Second Reading. It has not yet been printed.
  Second Reading deferred till Friday, 26th April.

  REPRESENTATION OF THE PEOPLE ACT 1949 (AMENDMENT) (No. 2) BILL
  Order read for resuming adjourned debate on Question [22nd March], That the Bill be now read a Second time.
  Question again proposed.
  Question put and negatived.

  EMPLOYER'S LIABILITY (DEFECTIVE EQUIPMENT) BILL
  Order read for resuming adjourned debate on Question [1st March], That the Bill be now read a Second time.
  Question again proposed.
  An Hon. Member: Object.
  Mr. Speaker: Objection does not postpone the debate at this time. The hon. Member must either vote for the Bill or against it. If he is opposed to the Bill he must declare his opposition to it.
  Question put and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

  REPRESENTATION OF THE PEOPLE ACT 1949 (AMENDMENT) BILL
  Order for Second Reading read.
  Mr. Speaker: I do not propose to put this Bill to the House for Second Reading. It has not yet been printed.
  Second Reading deferred till Friday, 26th April.

  PUBLIC SERVICE AND ARMED FORCES PENSIONS REVIEW BILL
  Order read for resuming adjourned debate on Question [26th January], That the Bill be now read a Second time.
  Question again proposed.
  Question put, That the Bill be now read a Second time.
  The House divided: Ayes 11, Noes 35.

  Division No. 112.]

  AYES

  [3.30 p.m.

  Braine, Bernard

  Nabarro, Sir Gerald

  Weatherill, Bernard

  Channon, H. P. G.

  Royle, Anthony

  Johnston, Russell (Inverness)

  Russell, Sir Ronald

  TELLERS FOR THE AYES:

  Lubbock, Eric

  Sinclair, Sir George

  Mr. John Farr and

  Monro, Hector

  Thorpe, Rt. Hn. Jeremy

  Mr. David Lane.

  NOES

  Barnes, Michael

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

  Reynolds, G. W.

  Bidwell, Sydney

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

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

  Boston, Terence

  Kerr, Russell (Feltham)

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

  Boyden, James

  Lestor, Miss Joan

  Roebuck, Roy

  Carmichael, Neil

  Lipton, Marcus

  Ryan, John

  English, Michael

  Marsh, Rt. Hn. Richard

  Shaw, Arnold (Ilford, S.)

  Ennals, David

  Mikardo, Ian

  Skeffington, Arthur

  Ensor, David

  Murray, Albert

  Wallace, George

  Faulds, Andrew

  Ogden, Eric

  Winnick, David

  Fletcher, Raymond (Ilkeston)

  O'Malley, Brian

  Heffer, Eric S.

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

  TELLERS FOR THE NOES:

  Jackson, Peter M. (High Peak)

  Palmer, Arthur

  Mr. Harold Walker and

  Janner, Sir Barnett

  Pavitt, Laurence

  Mr. Ernest G. Perry.

  PREVENTION OF CRIME (SCOTLAND) BILL
  Order for Second Reading read.
  3.35 p.m.
  Mr. Hector Monro: I beg to move, That the Bill be now read a Second time.
  This is a valuable Measure which will be widely welcomed by many people in Scotland. I am somewhat disconcerted because a Minister from the Scottish Office is not present to reply to this extremely important debate. I am wondering what sort of reply will be given, and perhaps the absence of the Minister who is responsible for this matter is indicative of the fact that he is in support of the Bill. We need all the support we can get because hon. Members who attend regularly on Fridays will be aware that the Government have blocked the Bill whenever it has come forward.
  The Bill is necessary because in recent years the number of crimes of violence in Scotland has increased astronomically. In 1957 there were 1,116 and by 1967 he number had increased to 3,536, a rise of 200 per cent. All Scotsmen cannot but feel ashamed of this increase in 10 years, and this is all the more reason for our taking action now to halt this rise. Pressure has been mounting in the last Pew years for the police to be given power to search for offensive weapons. Since the Government have failed to give the police in Scotland this power, despite pressure for it to be given by all of my hon. Friends and many hon. Gentlemen opposite, it is essential that we take the first opportunity in private Members' time to pass a Bill of this kind. My hon. Friend the Member for North Angus and Mearns (Mr. Buchanan-Smith) was lucky in the Ballot at the beginning of the Session, but unfortunately when he brought the Bill forward there was no opportunity to debate it. On subsequent occasions when it has been brought forward it has been objected to by the Government.
  While I will do my best to explain the purpose of the Bill, it would be better explained by a lawyer. At present the police in Scotland may apprehend an individual and search him for offensive weapons only if there is strong reason to believe that an act of violence will be
  838
  committed. In the dark and amidst the crowds leaving football matches in Glasgow and other parts of Scotland it is easy for weapons of this type, some of which are extremely brutal, to be carried by the thugs who use them, and the police cannot be certain that they will be used to commit acts of violence. It is also difficult, when such persons are apprehended, for the police to secure convictions.
  In Clause 1 are the words:
  "If a constable in Scotland has reasonable cause to suspect any person of having committed an offence under subsection (1) of this section, he may search that person and may detain him for the purpose of searching him."
  The police would be given the opportunity to apprehend and search people for offensive weapons which it was suspected they were carrying in order to commit crimes of violence. One knows of the broken bottle, the sharpened combs and sticks, and other most brutal weapons that are now being carried for this purpose.
  The incidence of murder, the extreme act of violence, has mounted dramatically in the last year or two. There were 41 murders in 1967 compared with a figure much nearer 30 in previous years. The numbers would be very much higher still but for the skill of surgeons and nurses who have brought back virtually from the grave people who have been assaulted in this way. To those surgeons and nurses and their colleagues very great credit is due.
  I have taken a particular interest in the prevention of crime because for a long period I was a member of a joint police committee and chairman of it for five years. Such membership enables one to look at the situation through the eyes of the police committee and the chief constable and through those of an ordinary member of the public. One notices with great pleasure how over the last 10 or fifteen years our police forces have been equipped to deal with crime generally, and have reached a very high standard of efficiency.
  Last week we were told that a regional crime squad is expected to be set up in a few weeks. That squad will be at a great advantage in chasing criminals who now use the motorways and dual carriage ways for quick escape. It will be able to get after those criminals quickly and,

  839
  more importantly, will be able, by means of efficient wireless communications, to alert other forces further along the roads so that the escaping men may be intercepted and apprehended. That system has worked very satisfactorily in Dumfries, where the number of escaping criminals who have been apprehended on the main trunk roads has risen dramatically. It is a most valuable indication of how modern wireless and motor cars can increase police efficiency in catching criminals.
  In considering a Bill of this nature one has to look at crime in all its aspects. In our many debates on the police force, and particularly a year ago when we dealt at some length with the Select Committee's Report on the police, I brought out the relation of the establishment of the police and the number of members in each force. It is easy to have an establishment of so many hundreds, but it is not nearly satisfactory to be 20 or 30 short of that establishment.
  We all know that the numbers of the police are well down. I know that the total is higher than it has ever been, but in Scotland we are certainly short of strength and we must make every endeavour to provide for more men. In the same way as with teachers, doctors and nurses, we have to consider the basic reasons why we are short of policemen. One of the prime reasons always has been that police pay has not been as attractive as the pay in comparable employment. It has to be remembered that there is hardly any other comparable service in which people are on duty or on call for so many days in the week and for long hours each day. It is only by the devoted and loyal service of police officers that we have been able in any way to contain the rising rate of crime, and the congratulations of the House should go to the Scottish police forces for the outstandingly able way in which they are carrying out their task.
  Not only strength and establishment, but equipment is needed to deal with the modern sophisticated criminal. I have said how improved wireless communications now are in the Scottish police forces. All cars and police vans have radios and are in constant touch with police headquarters in the main centres of population, but this, too, has been
  840
  augmented dramaticaly and efficiently by the introduction of individual personal radios which policemen on the beat now carry. These radios have made it possible to do away with the pillars and police boxes which one saw dotted about the town and from which the police reported by telephone to headquarters every now and then.
  Only last week, I was in my police headquarters and saw how stimulating it was to be able to listen to the controller in the operations room calling up his policemen on the beat, getting their answers and knowing exactly where they were, knowing that if an emergency arose, or if there were a 999 call, he could direct the nearest policeman at once to the scene of the crime to help to apprehend the criminal, or to give his services if it were a road accident or fire. This is a tremendous step forward and a development which must be encouraged in every way.
  For fighting the sophisticated criminal we have to provide criminal investigation departments with facilities of the highest quality, the best fingerprinting equipment, the best photographic equipment and so on. This is most expensive.
  For the provision of equipment a balance has to be struck between the cost to local authorities and the portion of money which has to be provided by central Government. In recent years that balance has been about right, but now equipment, particularly that of motor cars, radios and photographic equipment, is becoming so very expensive that we have reached a stage at which Government provision of money must be stepped up.
  I do not know if the Joint Parliamentary Secretary to the Ministry of Transport is to make an impassioned reply on behalf of the police in Scotland. It is quite extraordinary that the Government who have failed Scotland lamentably on the crime front should be resolutely opposed to this Bill and should have done absolutely nothing to bring in the provisions which we are asking for in relation to offensive weapons. There should have been a Scottish Minister to answer this debate. This is a scandalous state of affairs and something that Scottish people will be extremely cross about.
  It is not that the Government did not know that this debate would take place.

  841
  We have bombarded the Secretary of State for Scotland at Question time in December, in January and in March, and we shall do so again next week. He must take cognizance of the fact that Scottish people will not tolerate this situation much longer. It may be that we shall have a new Secretary of State for Scotland tomorrow, but whatever the state of play, we want very much more decisive action by the Government in relation to crime in Scotland. It cannot be allowed to go on as it is at the moment.
  I have not had time to study the newspapers today in detail, but I understand that a long interview has been given to a journal by the Under-Secretary of State for Scotland who is responsible for the police. He would have been better employed answering this debate. We want to know what the Government will do about search for offensive weapons. I have been diverted by the thought that the Parliamentary Secretary to the Ministry of Transport might have to reply to this debate. That has diverted my thoughts from where they would have been most gainfully employed—on the question of providing sufficient policemen to deal with the crime wave in Scotland.
  Mr. Deputy Speaker (Mr. Sydney Irving): Order. The hon. Member is getting even wide of a Second Reading debate. This Bill is concerned with the powers of constables to detain and search for offensive weapons. The hon. Member must stick to the Bill.
  Mr. Monro: I appreciate that, Mr. Deputy Speaker, but if we have not enough constables they cannot search for anything.
  Mr. Deputy Speaker: That may be so, but I am afraid that the Bill does not make provision for more constables.
  Mr. Monro: I, of course, bow to your Ruling, Mr. Deputy Speaker. I have tried to indicate to the Parliamentary Secretary to the Ministry of Transport, who apparently is responsible to the whole Scottish Office this afternoon, that the position in regard to crime in Scotland is serious. The figures are mounting, especially in Glasgow where unfortunately the strength of the police is at the lowest ratio compared with establishment. In order that they may combat this serious problem, it is absolutely essential that this Bill should go through.
  842
  What is so surprising is that the Government apparently do not wish it to go through. Why do they not accept that when young men are seen going down a street with very dubious intent it should be possible for a police constable to take one or two of them aside and search them? I know that there will be the difficulty of knowing when to say that a comb with a razor-sharp point at one end is an offensive weapon, or will he used with an offensive intention. But it is far better to be safe than sorry.
  The Under-Secretary has often said that it would be wrong, and infringe the individual's rights and freedom if he were to be stopped and searched. But if one is innocent I do not think that one would have any objection to being spoken to by a policeman, so long as it was not done in the full glare of publicity. We are so annoyed at the Government's attitude because the Bill would introduce relatively simple powers that would be detrimental only to the criminal armed with an offensive weapon.
  We must again press the Government to let the Bill go through, because it is what the people of Scotland want. I am sure that the hon. Gentleman has often read in the Scottish Press over the past year how much the people of Scotland are annoyed at the Government's attitude, and it is essential that action is taken at the earliest possible moment. I am sure that my hon. Friends will add support to this most important Bill, and I shall be very interested to hear what the Government have to say in reply.
  3.47 p.m.
  Mr. John Farr: It is with a little trepidation that I support my hon. Friend the Member for Dumfries (Mr. Monro), but I should not have stayed to do so on a Friday afternoon if I were not completely certain, from the not inconsiderable amount I know of Scotland, that the Bill is a Measure that Scotland needs. It is a plain, sensible and straightforward Bill giving the constabulary in Scotland specific additional powers which I think can be proved to be absolutely necessary. I believe that I am right in saying that they are powers granted to the constabulary in England and Wales two or three years ago. I know from the Chief Constable of the Leicestershire and Rutland Constabulary and one or two other chiefs

  843
  of police forces in England and Wales just how useful those powers, which my hon. Friend now proposes to provide for the Scottish police, have been to the police forces in the Midlands in executing their duties more efficiently.
  I support my hon. Friend in this well worth-while Measure because of the explosion of crime and criminal offences, which yearly increase in pace not only in England but in Scotland. There are figures in the Statistical Abstract which show that certain types of offences have increased in England and Wales in the past five or ten years. A significant fact which I feel sure will change if my hon. Friend is successful in getting his Bill through is that whilst they have increased by X per cent. in England and Wales they have gone up at exactly double that rate in Scotland in the same years. I feel that notwithstanding that the Scottish police forces are not up to establishment the extra powers of search which this Bill will give to Scottish constables will do the trick, and at least will break this very rapid acceleration in the crime rate in Scotland.
  I shall come in a moment to one or two specific instances which I wish to give to the House to substantiate what I have said, but I should first like to refer to the use of radio walkie-talkies. They are a great boon to police forces throughout the country especially in many places where those forces are low in establishment. They have found that, by the use of this sophisticated modern equipment, the average constables on the beat can, so to speak, almost be in two places at once. If one has a walkie-talkie in one's pocket—
  Mr. Deputy Speaker: This Bill does not deal with walkie-talkies, and the hon. Member is not relating his remarks to the Bill. He must do that.
  Mr. Farr: With great respect, Mr. Deputy Speaker, I was endeavouring to show that the use of walkie-talkies has been found in certain police forces to reduce the necessity for additional constables, and I was going on to relate my remarks specifically to the Bill.
  Mr. Deputy Speaker: I am afraid the Bill is concerned only with constables having this additional power, and the hon. Member has not so far related his remarks to the Bill.
  Mr. Farr: I will move on from walkie-talkies, and go on to say how useful the constabulary in England have found these additional powers granted to them in conection with poaching offences. In that connection these powers have been of real value. In many parts of England and in Wales, before the recent legislation was enacted, country police forces had no power of search such as is contained in my hon. Friend's Bill. They might have the very greatest suspicion of one or two people of poaching, but simply because they did not see the offence committed, they did not actually see a person they suspected kill the game or pick up the game, they could not, until very recently, arrest and search the suspected person, and that is the power contained in this Bill.
  Mr. Russell Johnston: I am sorry, but I do not follow the hon. Member's argument. Surely he is not suggesting that salmon can be an offensive weapon?
  Mr. Farr: I am not sure that the hon. Member could have been listening. I was only trying to point out to the House that useful examples can be produced in England and Wales of the added proficiency of the police since the recent legislation and since the police forces have been given the power which would be granted to the Scottish police by this Bill.
  Mr. Deputy Speaker: The powers here are related quite narrowly to search of persons suspected of having offensive weapons. I am afraid the hon. Member is wide of the Bill.
  Mr. Farr: With the greatest possible respect, I must apologise for not having made it clear to the House before that in England and Wales and, I understand, even in Scotland, a shotgun, used commonly by poachers to kill game—pheasants, etc.—is classed as an offensive weapon. The crime statistics which I have here show that the number of offences committed by armed criminals using shotguns has increased rapidly in both England and Wales. It is for that reason that I mentioned the subject. In the statistics which I have here perhaps one of the most significant is the increase in criminal offences. One of the most distressing things to us all has been the manner in which juvenile delinquency

  845
  has increased in Scotland. My hon. Friend mentioned the desirability of police forces in Scotland having the Dower to search juveniles who are suspected of possessing such offensive weapons—of searching them when they return from Scottish football matches and other crowded occasions.
  Mr. Monro: Hear, hear.
  Mr. Farr: There is no shadow of doubt that this type of hooliganism is on the increase throughout the United Kingdom. I have had personal experience of seeing it at football matches in London, and I am distressed to know, from what my hon. Friend says, that the same trouble occurs at some Scottish football matches, particularly in Glasgow. The figures for the whole range of juvenile offences for the ten or 12 years for which I have statistics have steadily increased, not only relating to the possession of offensive weapons but to a host of other things.
  Perhaps I can give the House an idea of the gravity of the situation by saying that in Scotland juvenile offenders who were committed for an offence in 1938 only numbered 15,408, and in 1966 that tragic figure had increased to 23,451, an absolutely staggering rate of acceleration.
  Another reason why the Bill will be a moon to the constabulary in Scotland is that it will help to fight not only the rate of juvenile criminal offences but the general increase in crime in Scotland, which has doubled in the last ten years. In some spheres of criminal activity such as murder, attempted murder or wounding and assaults, the figures in Scotland have far more than doubled over the past ten years. Although the number of the offences of murder, attempted murder and wounding and assaults has increased in England and Wales, in Scotland the rate of increase has been double or more than double the rate of acceleration in England and Wales.
  My statistics relating to crime in Scotland show that in 1963 two offences of murder were proved, and in 1966 that figure had risen to 23. The hon. Gentleman opposite may find this amusing. I find these figures tragic and significant. They are not a matter for hilarity on
  846
  either side of the House. The increase from two to 23 is a staggering rate of increase of nearly 1,200 per cent. In England and Wales in the same period, between 1963 and 1966, the figures went up only from 46 to 72, a rate of increase of something like 82 per cent. It is significant that the trend of certain crimes has increased by a far greater rate over the last few years in Scotland than in England and Wales. The Bill which my hon Friend has introduced this afternoon, by giving the constabulary of Scotland the powers which they need, can in my opinion, do nothing but good.
  Mr. Deputy Speaker: Mr. Carmichael.
  4.0 p.m.
  The Joint Parliamentary Secretary Ministry of Transport (Mr. Neil Carmichael): Mr. Deputy Speaker, we were—
  Mr. Monro: On a point of order, Mr. Deputy Speaker. I was under the impression that my hon. Friend the Member for Harborough (Mr. Farr) sat down exactly at 4 o'clock in order that the Question might be put.
  Mr. Deputy Speaker: I was listening very carefully to the chiming of Big Ben. In any case, the hon. Member for Glasgow, Woodside (Mr. Carmichael) had risen, and I cannot put the Question while there are still hon. Members wishing to speak.
  It being Four o'clock, the debate stood adjourned.
  Debate to be resumed upon Friday, 26th April.

  SHOPS BILL
  Order for Second Reading read.
  Hon. Members: Object.
  Second Reading deferred till Friday, 26th April.

  GAMING ESTABLISHMENTS BILL
  Order for Second Reading read.
  Hon. Members: Object.
  Second Reading deferred till Friday, 26th April.

  CLEAN AIR BILL
  Order read for resuming adjourned debate on Question [28th March],
  That Standing Committee C be discharged from considering the Bill and that the Bill be committed to a Committee of the whole House.—[Mr. Maxwell.]
  Question again proposed.
  Hon. Members: Object.
  Debate further adjourned till Monday next.

  PORT OF BRISTOL
  Motion made, and Question proposed,
  That this House do now adjourn.—[Mr. Ernest G. Perry.]
  4.1 p.m.
  Mr. Arthur Palmer: The subject which I intend to raise in the remainder of this afternoon is one of very great importance to Bristol and to the neighbourhood of Bristol.
  I need hardly tell the House that the Port of Bristol is one of the most famous not only in this Kingdom but in the maritime world generally. It is an ancient trading port with a history which is nearly as long as that of London. In its modern version, concentrated principally upon Avonmouth, it is a flourishing commercial centre and remains one of the most outstanding ports of Western Europe.
  It is an enterprise which is of great pride to the citizens of Bristol because it is a municipally-owned port. I suspect that it is probably the largest municipal trading undertaking still left in the country. It is financially sound. It has ample cash resources for development. There is no question of Bristol bringing any kind of begging bowl to Whitehall.
  Nor does the management of the port lack ideas. In 1964, the Port of Bristol Authority submitted to the National Ports Council the ambitious Portbury scheme on the west side of the River Avon. It was a scheme ultimately for 40 extra berths at a total cost of some £27 million. The scheme was approved by the National Ports Council approximately a year later as meeting a national need for a third major liner port.
  848
  To the bitter disappointment of Bristol generally, in which I include commercial industrial and all shades of political opinion, under the powers which it possesses, the Ministry turned down the Portbury scheme. It was rejected on the very narrow argument that the industrial hinterland of Bristol as too small to sustain the development. I think that that was a singularly myopic view, and it is one which had no support as a commentary from anyone who understands Severn-side. Nor did that view have the support of the regional planning council. Severn-side does not exist in isolation. Since Roman times it has been a natural meeting place for land communications. In addition, it now has a river bridge into industrial South Wales, and the new motorways to London and to the Midlands will ultimately join just outside Bristol. Railway communications have been excellent for more than a century. The railway engineer Brunel saw to that
  Following the rejection of the Portbury Scheme, the Bristol Port Authority, at the request of the Government—I emphasise that—submitted an alternative, more modest, development plan for Avonmouth, known as the West Dock Scheme, the total cost of which is proposed to be £15 million. Unfortunately, once again the familiar pattern of administrative delay has reasserted itself in this matter. The National Ports Council favoured Portbury, and I am sure willingly approves the much more modest West Dock Scheme. In fact, for the benefit of my hon. Friend, I can quote the view of the National Ports Council. It said:
  "Without development in one form or another of Avonmouth, there will be slow strangulation of this vigorous, bustling, and enterprising port."
  As I say, once again the familiar pattern of delay has reasserted itself, and the Ministry has intervened with lengthy correspondence and time-consuming inquiries.
  Its preoccupation is with discounted cash flow accountancy techniques in relation to the expected capital return on what is fundamentally a public utility, and not an industrial enterprise in the ordinary sense. I know that some of my right hon. Friends are much dazzled by these sophisticated economic techniques for deciding the merits of public investment. I am not so smitten.

  849
  I think that it is a highly subjective business, the truth is that economics is always a black art, wearing only the borrowed clothes of science, it is not scientific in itself. Very often with investments of this kind, provided the proposed scheme is imaginative in the first place, that there is plenty of vision, and that there is skill in management and afterwards hard work, results usually flow.
  In any case—and I do not think that my hon. Friend will be able to deny this—the Port of Bristol's own experts have had no difficulty in knocking many holes in the Ministry's calculations. Indeed, at one stage errors were found in the Ministry's calculations; the sums had to be done again for the expected rate of investment return.
  A supporting view to mine, expressing great doubt about the economic outlook, of the Ministry to this West Dock development was given by the Economic Planning Council in its comments on he Government's reply to the Tress proposals for the West of England. It said hat it was sceptical of the calculations which led to this reported Government conclusion and added that
  "such efforts may assist decision-making, but they have not yet attained the reliability, if they ever will, which entitles them to determine the decision."
  In other words, the planning council, with many expert resources at its command, rejects some of these narrow calculations made by the Ministry on the estimated rate of return for the West Dock. The Port of Bristol Authority, I know, is grateful to the Planning Council for the fine support that it has given. But one must be blunt. As a convinced supporter of the Government I say that in these days in the West of England the difficulty is that the views of the Planning Council do not apparently influence the Government greatly in any case. Everything the Council puts up is rejected, or is put away for the distant future.
  I have it on good authority that the Port of Bristol Authority thinks that it no longer has direct access to the Ministry of Transport. It has to go via the Planning Council—and the Planning Council, in turn, as I say, has little authority. I ask my hon. Friend whether it is time that a bar is placed against the Port Authority of Bristol in the matter of
  850
  direct access and, if so, whether a similar bar is placed against the ports of Southampton, London and Liverpool. I should doubt it.
  Four years have passed since Bristol first put forward its plan for the further development of its docks. Bristol is anxious and ready to expand its docks, but time is passing. Four years in which to argue, discuss and inquire is much too long a period. Bristol has been kept standing on the doorstep while other ports have pressed ahead with schemes, with the consent of the Ministry. One thing that Bristol has the right to ask for is parity of opportunity with the other great ports of the land.
  Many people in Bristol are beginning to feel that the Ministry long ago weighted the scales against their port. In spite of all that has been said by the National Ports Council and the Regional Planning Council in support of Bristol docks development, the Ministry, after apparently first deciding what its conclusion would be, has spent the time since then looking for arguments.
  I want to ask my hon. Friend some questions. First, when can Bristol expect a decision, one way or the other, in the matter of the West Dock Scheme? Remember this scheme was invited by the Ministry itself in substitution for Portbury—a much larger scheme which was rejected by the Ministry.
  Secondly, does my hon. Friend appreciate that if the West Dock Scheme is to be turned down in the way that Portbury was turned down—and there is much pessimism in Bristol on this point—any suggestion of some Utopian scheme instead, a third scheme which Bristol is expected to consider favourably, for an industrial estate on the North Somerset coast, which is to be combined with minor docks arrangements—would be no substitute for the schemes which the Port Authority itself has put up already, being anxious to continue with the profitability and expansion of its enterprise.
  Third, does he appreciate that Bristol is as much a commercial as an industrial centre, that the port is the key to Bristol's commercial prosperity and that, if the Ministry's barriers to expansion and modernisation are maintained, that prosperity cannot indefinitely continue. There are many great commercial undertakings

  851
  in Bristol, but, if port facilities are not strengthened, they will inevitably move away. What then will be the port's future? If it cannot evolve and expand, under competitive modern conditions it can face only a slow but sure decline. I should be grateful for answers to these important questions.
  4.16 p.m.
  The Joint Parliamentary Secretary to the Ministry of Transport (Mr. Neil Carmichael): I am grateful to my hon. Friend the Member for Bristol, Central (Mr. Palmer) for raising this subject, because it allows me to clear away some misapprehensions. Although I come from far to the north of Bristol, I know, as everyone does, of its importance and historical significance. It is by far the largest municipally-owned and controlled port and the city's justifiable pride in the port and its history is obvious in the fact that the municipal toast is not just to the city but to the city and the port. Historically, they have been closely bound together.
  Perhaps we should review the history of the last few years. The original proposal for the development of the docks on the Portbury flats envisaged the provision of a third major liner terminal to supplement and compete with London and Liverpool. The Government considered this proposal at length but concluded that
  "…the case for allocating a substantial part of the resources available for fort investment to the creation of a new major liner terminal, whether at Portbury or elsewhere, has not yet been made out."
  The reasons for this decision were set out in the White Paper published in October, 1966.
  At the same time, however, my right hon. Friend invited the Port of Bristol Authority and the National Ports Council to consider and submit alternative plans for the development of the port. They examined a number of schemes and it became clear that the physical conditions of the Severn Estuary, coupled with the already congested development of the Avonmouth Docks, limited the possibilities to comparatively modest changes inside the existing docks, or a major scheme at a cost of about £15 million.
  Of the various possible major schemes, that for the West Dock was the most
  852
  promising and it is that which they submitted to my right hon. Friend for approval and which is now under consideration. The scheme would provide for a new dock just across the Avon from the existing docks. It would have about 3,500 feet of quay and space for an oil berth for medium-sized tankers, and provision of the dock, with its lock entrance, quay walls and main services, but without any superstructure such as sheds, cranes, and oil jetty, would cost about £15 million.
  The total port investment for the whole country under the previous Government averaged little more than that per annum and now amounts to £45 million or so a year, so one project costing about £15 million would be a very major undertaking. It is exceeded in cost only by the major developments at Tilbury and Sea-forth, although the great deep-water ore harbour at Port Talbot will cost in the same region and the major development at King George Dock, Hull, will provide new facilities on a similar scale at only one-third of the cost of the proposed West Dock Scheme.
  Mr. Palmer: Would my hon. Friend agree that port development in Britain was neglected in recent years, certainly under Conservative Administrations, and that we should not take that as our yardstick for the future?
  Mr. Carmichael: I was saying that; that it has been neglected and that we are now beginning to spend money. However, in any situation, let alone in the present economic situation, it is incumbent on the Government to decide objectively where, and in what order, the money should be spent. Therefore, when we have a limited sum to spend we must decide where it is best spent. We must decide whether it should be £15 million in Bristol or one-third of that sum to get the same results in another port, which, in this case, happens to be Hull. If my hon. Friend will have patience and allow me to unfold the story he will see how decisions of this kind are coming together.
  I come to the nub of the matter. On any reasonable assessment of traffic and revenue prospects, the West Dock Scheme can at best barely pay for itself. The Port of Bristol Authority has given its estimate of the return on the scheme on the normal discount cash flow basis

  853
  mentioned by my hon. Friend, which is the yardstick used by the Government in most of the assessments made of investment and it is widely used in other countries. It is, therefore, not sufficient to say that in this case it is not the best way to proceed, although it is not the only factor to be taken into account. The Port of Bristol Authority's estimates of the return on that basis lies between 6·3 per cent. and 9·5 per cent. as against the normal minimum for low risk public investment projects of 8 per cent.
  But we cannot accept some of the assumptions on which Bristol has reached these estimates. In our view, even if Bristol's traffic forecasts are right, and even if completely new traffic does appear to replace the oil traffic originally included in the estimates, which it is now known will not materialise, the ceiling rite of return would be 6 per cent. On realistic traffic assumptions, it would be substantially less.
  The Minister is faced with a very real dilemma. On the standards which are applied to public investment, and against which all other approved port projects have been judged, this project is not viable. On the other hand, she is very much aware that, as the South-West Economic Planning Council has emphasised, ii some such development is not undertaken, the physical limitations of Avonmouth will restrict further development of the port, and lead eventually to the loss by Bristol of its status as a major port—and possibly, in the long-term, to a decline in traffic handling.
  It is for this reason that, as the Government's reply to the South-West Economic Planning Council made clear, we are still considering the proposal in the light of the representations made by the Council. This is not an easy matter, and I am afraid that I cannot tell my hon. Friend precisely when a decision will be reached, but my right hon. Friend certainly hopes that it will be within the next few weeks.
  My hon. Friend referred to the rather sensational reports which appeared in the Bristol Press about a fortnight ago about the M.I.D.A.S. study. Let me say at once that there is no Government study considering the development of a new industrial complex stretching from Port-bury to Weston, as one report had it. What is happening is that the Govern
  854
  ment are looking into the possibility of trying deliberately to develop in this country one or more maritime industrial development areas, where bulk processing industries can be established adjacent to port facilities capable of handling large bulk carriers and tankers. As hon. Members will know, areas of this type have been or are being developed by a number of continental countries, and in Japan and the United States.
  As a first step, the Departments concerned, together with the National Ports Council, have commissioned a study by engineering consultants to identify sites physically suitable for such development. They have examined some 30 areas, have identified three areas as containing sites matching the criteria, and eight others, including the Portbury Flats, as worthy of consideration, though they do not fully meet the criteria for such development. The consultants are now preparing broad estimates of the cost of developing the sites in the three "first-class" areas, and in certain of the "second-class" areas, including the Portbury Flats. Once this has been done, we will consider urgently whether or not to put in hand fully detailed technical and economic studies of one or more of these areas.
  But I must make it quite clear that no decision has been taken to go ahead with such a project anywhere; that the Portbury Flats, while under study, is a site with considerable disadvantages for this purpose, and that in any event any such project will be a very long-term one.
  Mr. Palmer: Will my hon. Friend deal with the complaint of the Port of Bristol Authority that it no longer has direct access to the Ministry?
  Mr. Carmichael: I can assure my hon. Friend that that is not the case. I am informed that the Authority is in close touch with the Deparment and has direct access to it. I have no idea where the lines have got crossed to produce the idea that the Authority must go through the economic planning council. The Authority frequently approaches the Department, and on certain aspects of the work an opinion is asked from the economic planning council, but I can assure my hon. Friend that there is continual contact, and that the Department is on remarkably good terms with the Port of

  855
  Bristol. I hope that this will remove an unnecessary irritation in what is already an intrinsically very difficult situation; and that I have been able to reassure my hon. Friend.
  Even if the Portbury area were chosen, and I have indicated that it is not very promising, the port provision required might not be all that different from the West Dock. I do not want to try to pretend to my hon. Friend, or give any excuses, but there is no intention to hold up any decision on the West Dock because of the M.I.D.A.S. study. That is something quite separate, because it may require port facilities different from those proposed for the West Dock.
  Every effort will be made by my right hon. Friend in the next few weeks to reach a decision on the West Dock scheme. My hon. Friend suggested that if that scheme was turned down he did not want a Utopian scheme. I have tried to put the matter into perspective. I do
  856
  not think that I have drawn a Utopian picture of the M.I.D.A.S. scheme, but have merely put the record straight by saying that there is a possibility of such a thing.
  We are very well aware that Bristol is a commercial as well as an industrial centre and that the port is important to the life of the city. What has to be decided is whether the expenditure of £15 million on the Port is the only way in which the commercial life of the area can be continued and expanded. This is my right hon. Friend's problem. The economic planning councils produce the schemes and the ideas—
  The Question having been proposed after Four o'clock and the debate continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at twenty-nine minutes to Five o'clock.

MINISTRY OF DEFENCE
  Expenditure in Wales
  Expenditure in Wales
  Aircraft Carriers
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  H.M. Embassy, Washington (Civilian Attaches)
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  Swashway Channel (Mooring Buoy)
  Civilian Employees
  Civilian Employees
  Anglo-American Radar Station (Orfordness)
  Anglo-American Radar Station (Orfordness)
EDUCATION AND SCIENCE
  Plowden Report (Implementation)
  Plowden Report (Implementation)
  School and University Buildings (Holiday Use)
  School and University Buildings (Holiday Use)
  Residential Maintained Schools
  Residential Maintained Schools
  Residential Special Schools
  Residential Special Schools
NATIONAL FINANCE
  Government Departments (Movement to Scotland)
  Government Departments (Movement to Scotland)
  Blind Persons (Tax Relief)
  Blind Persons (Tax Relief)
  Treasury Staff (Whitehall)
  Treasury Staff (Whitehall)
  Dividends
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HOME DEPARTMENT
  Victims of Crimes (Compensation)
  Victims of Crimes (Compensation)
  Advisory Council on the Penal System (Report)
  Advisory Council on the Penal System (Report)
LOCAL GOVERNMENT
  Joint Committee (Croydon)
  Joint Committee (Croydon)
  Welsh Local Authorities (Income)
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  Sub-Regional Study (Norwich)
  Sub-Regional Study (Norwich)
  Wash Barrage (Study)
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  Local Authorities (Expenditure)
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TELEPHONE SERVICE
  Telephone Directory (Preston)
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SCOTLAND
  Chief Inspector of Constabulary (Report)
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  Hurricane Damage to Forestry (Report)
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  Scottish Trawlers Federation (Delegation)
  Scottish Trawlers Federation (Delegation)
MINISTRY OF POWER
  Oil Rigs
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SOCIAL SECURITY
  Cost of Living (Increase)
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  Social Problems of Loneliness (Report)
  Social Problems of Loneliness (Report)
TECHNOLOGY
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  Television Reception (East Anglia)
BOARD OF TRADE
  Export of Vehicles (Trade Credits)
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  Joint Committee (Croydon)
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  Car Exports (Safety Regulations)
  Car Exports (Safety Regulations)
  New Factories (Wrexham)
  New Factories (Wrexham)
  Cotton Cloth and Yarn (Imports)
  Cotton Cloth and Yarn (Imports)
  Census Office (Location)
  Census Office (Location)
TRANSPORT
  Tyre Regulations
  Tyre Regulations
  Transport Costs (Rural Wales)
  Transport Costs (Rural Wales)
  Driving Licences
  Driving Licences
ROADS
  Blue Boar Flyover (A45)
  Blue Boar Flyover (A45)
AGRICULTURE, FISHERIES AND FOOD
  French Wheat
  French Wheat
  MEMBERS OF PARLIAMENT (ASSISTANTS)
  MEMBERS OF PARLIAMENT (ASSISTANTS)
  PALACE OF WESTMINSTER (ACCOMMODATION)
  PALACE OF WESTMINSTER (ACCOMMODATION)
  FOREIGN OFFICE (STAFF)
  FOREIGN OFFICE (STAFF)
  LORD PRESIDENT OF THE COUNCIL (STAFF)
  LORD PRESIDENT OF THE COUNCIL (STAFF)
MINISTRY OF LABOUR
  Women and Employment (Social Survey)
  Women and Employment (Social Survey)
  Employment (Cardiganshire)
  Employment (Cardiganshire)
  Joint Committee (Croydon)
  Joint Committee (Croydon)
ECONOMIC AFFAIRS
  Incomes Policy
  Incomes Policy
  Incomes Policy (Increased Productivity)
  Incomes Policy (Increased Productivity)
  Incomes Policy (Overtime)
  Incomes Policy (Overtime)
MINISTRY OF HEALTH
  Family Planning (Circular)
  Family Planning (Circular)