Sitting of 4 December 1968

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  ADVOCATES' WIDOWS' AND ORPHANS' FUND ORDER CONFIRMATION BILL
  Read the Third time, and passed.
ORAL ANSWERS TO QUESTIONS
  SCOTLAND

    Domestic Water Rates
    Mr. Buchanan-Smithasked the Secretary of State for Scotland how many local authorities have had to increase their water rate as a result of the contributions levied by the regional water authorities.
    The Minister of State, Scottish Office (Dr. J. Dickson Mahon): Of those whose decisions have so far been reported, 121 rating authorities are levying higher domestic water rates this year than last, and 57 the same or lower rates.
    Mr. Buchanan-Smith: Does the Minister of State realise that, as a result of regionalisation, some local authorities, particularly in my area, had to increase their water rate by as much as 400 per cent.? Is he aware that there is strong feeling among these burghs that some of his assurances during the passage of the Bill about satisfactory transitional arrangements have not been honoured?
    Dr. Mabon: If that is so, it is because the authorities have consented to transitional arrangements, since these agreements were made freely among themselves and confirmed by the Secretary of State. If the hon. Member wants to make a fair comparison once we have all the returns, he should examine the preceding years. Of the 121 authorities
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    which have increased their water rate against last year, 40 deliberately reduced their rate the year before. That is a very significant point.
    Mr. MacArthur: Will the hon. Gentleman not recognise that what has happened in many burghs fully justifies our warnings to the Government during the passage of the Water (Scotland) Bill? Does he not now regret that he did not accept an Amendment of ours which would have introduced reasonable transitional arrangements and saved this trouble?
    Dr. Mahon: On the contrary. The hon. Member must recognise that the so-called reasonable arrangements which he and his hon. Friends proposed would have made the situation worse, not better.
    Mr. Grimond: In view of the injustice which appears to be done to some burghs like Stromness and Orkney, are the Government open to amending the terms of these amalgamations?
    Dr. Mabon: No, Sir, these amalgamations are now in being.

    Agricultural Buildings (Rating)
    Mr. Buchanan-Smithasked the Secretary of State for Scotland when he will complete his review of the rating of agricultural building.
    Mr. Bruce-Gardyneasked the Secretary of State for Scotland if he will make a statement on his discussions with the Scottish National Farmers' Union regarding the industrial rating of intensive agricultural units.
    The Under-Secretary of State for Scotland (Mr. Norman Buchan): My right hon. Friend has not yet concluded his consideration of this question.
    Mr. Buchanan-Smith: How much longer will this be allowed to drag on? Does the hon. Gentleman not realise that, as each week passes, more anomalies and nonsenses are shown up? In all seriousness, cannot the Government take a grip on this and try to resolve the problem? There is great concern in the agricultural industry.
    Mr. Buchan: I am aware of the concern, but it is even more important that

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    we get the right answers. Many problems are involved. As the hon. Member should know, we want, when we eventually decide, to get the right solution.
    Mr. Bruce-Gardyne: Would the hon. Member recall that, while he is trying to get the right answers, farmers—who are not receiving S.E.T. premiums, as non-manufacturing, or R.E.P., or industrial investment grants—are still being charged rates as if they occupied industrial premises? Would he realise that this is a grotesque anomaly to continue much longer?
    Mr. Buchan: The hon. Member should know that all the costs to which he refers are taken into adequate consideration at the Annual Price Review. Scottish farmers know under which Government they benefit; it is this one.
    Mr. Stodart: Can the hon. Gentleman tell us anything about the consultations which he is having with the Scottish National Farmers' Union? Is he aware of the statement made yesterday that their representations on British Standard Time were entirely brushed aside? Would he give an undertaking—
    Mr. Speaker: Order. We are discussing that rating of agricultural buildings.
    Mr. Stodart: With respect, Mr. Speaker, I was about to ask whether the hon. Gentleman would assure us that representations on this matter will not be equally brushed aside.
    Mr. Buchan: We have never brushed aside any discussions with, or points made by, the National Farmers' Union. We have considered them on their merits. We have been considering their representations and, if they wish to see me again, I will again listen to them on this question.

    Uncertificated Teachers (Lanarkshire)
    Mr. Brewisasked the Secretary of State for Scotland how many uncertificated teachers are employed in Lanarkshire at the present time; and how many have been passed as suitable for conditional registration by the reference panels.
    The Under-Secretary of State for Scotland (Mr. Bruce Milan): I understand
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    that 355 teachers in the service of the Lanarkshire authority are ineligible for registration. None of the temporary appointments held by these teachers has so far been considered by the reference panel. I should add that the reference panel is not concerned with conditional registration.
    Mr. Brewis: As the enforcement of the registration procedure is likely to cause a considerable crisis in education in Lanarkshire, is the Secretary of State prepared to give any additional help to that county to get suitably qualified teachers?
    Mr. Millan: That is an entirely different question. The hon. Member knows of the special payments of £100 per year which came into operation several months ago and from which Lanarkshire benefits considerably—proportionately more than does any other authority in Scotland.

    Brucellosis
    Mr. Brewisasked the Secretary of State for Scotland how many cases of brucellosis infection in humans have been reported in the last year.
    Mr. Milan: Brucellosis is not a notifiable disease and comprehensive figures of its incidence among humans are not available. What can be said is that 73 persons in whom brucellosis had been diagnosed were discharged from Scottish hospitals during 1967, and that 188 cases giving presumptive evidence of the disease were diagnosed by Scottish laboratories in the last eleven months of that year.
    Mr. Brewis: Why can this miserable disease not be made notifiable so that there is some chance of detecting the source of the infection?
    Mr. Millan: One of the difficulties about notification is the considerable time which elapses between infection and diagnosis. It is therefore doubtful whether compulsory notification would enable us to bring about what both the hon. Member and I would like to bring about, the eradication of the disease.

    Commission on the Constitution
    Mr. Wrightasked the Secretary of State for Scotland whether he will arrange for the forthcoming Commission on the Constitution to consider the constitutional

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    position of Scotland as a matter of urgency and to publish its recommendations dealing with Scotland in advance of those dealing with other nations and regions.
    The Secretary of State for Scotland (Mr. William Ross): It will be primarily for the Commission itself to decide on its method of work, but I have no doubt that it will consider the various questions within it; terms of reference as quickly as possible.
    Mr. Wright: May I point out to the Secretary of State—
    Hon. Members: No.
    Mr. Speaker: Order. The hon. Member must ask a question.
    Mr. Wright: Is the Secretary of State aware that his reply leaves us in darkness as total as that produced by British Standard Time? May I ask him three specific questions? First, when will the Commission begin its deliberation; secondly, when will it be charged to produce a report; and thirdly, how will the subcommission of Scottish experts be chosen?
    Mr. Ross: These are matters which will have to be looked at. If I may reflect on the hon. Gentleman's reference about darkness and British Standard Time, I would point out that a few hours changes the darkness but I doubt whether a week, a month or a year would change the hon. Member's political gloom.
    Mr. Rankin: Will my right hon. Friend draw to the Commission's attention the fact that we have already had a Commission on this topic? Will he ask them to look at the views of that Commission before filing their proceedings?
    Mr. Ross: I do not doubt that the Commission to be set up will look at the findings of the previous Commission, but it would be wrong to suggest that they are covering exactly the same ground because this Commission will be looking at the matter from the point of view of the whole United Kingdom.
    Mrs. Ewing: Does the Secretary of State accept as a good beginning point for this Commission the finishing point of the last Commission—namely, that Scotland is a nation? Is he aware that this House and the United Nations Charter recognise the rights of a nation to
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    self-determination? In the event of the Commission finding against self-government for the next election, will the Secretary of State give an undertaking that he will accept that the verdict of the ballot boxes can overrule that finding?
    Mr. Ross: The hon. Lady has spent a long time proving a point which does not require to be proved—that Scotland is a nation. Scotland as a nation is in a very fruitful partnership, and from my point of view any indication of a change in that will have to be looked at very carefully indeed.

    Scottish Economy (White Paper)
    Mr. Gordon Campbellasked the Secretary of State for Scotland if he will make a statement on the latest position reached in relation to implementation of the White Paper on the Scottish Economy published in January, 1966.
    Mr. MacArthurasked the Secretary of State for Scotland if he will publish a White Paper setting out the progress that has been made towards meeting the employment targets published in The Scottish Economy, Command Paper No. 2864.
    Earl of Dalkeithasked the Secretary of State for Scotland whether he will now make an interim progress report on the implementation of the 1966 White Paper on the Scottish Economy.
    Mr. Ross: I refer hon. Gentlemen to my replies to the hon. Members for Moray and Nairn (Mr. Gordon Campbell) and Perth and East Perthshire (Mr. MacArthur) on 23rd October.—[Vol. 770, c. 1268–9, 1260.]
    Mr. Campbell: Will the Secretary of State now be honest with Scotland and admit, as with the National Plan, that the assumptions have changed, that little growth has taken place and that the results so far, especially with jobs, are very different from the targets?
    Mr. Ross: We hear all that every week. The hon. Member will not look facts in the face. If he would even read this morning's Press he would have seen the report of Sir Robert Maclean, the Chairman of the Scottish Industrial Estates Corporation, in which he points out that he has been letting factories at the rate

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    of one a week over the last year. If he reads that, the hon. Member will appreciate that we have considerably changed the whole pattern and basis of Scottish industry.
    Mr. MacArthur: The right hon. Gentleman will not recognise the fact which is staring him in the face—that employment in Scotland has dropped by about 30,000 people since the publication of the notorious Plan, compared with a forecast of an increase of 60,000 jobs by 1970. In the light of that, will he not leave this mood of total and unacceptable complacency and get on with the job of improving employment prospects in Scotland?
    Mr. Ross: I assure the hon. Member that there is no complacency on this side of the House. The successful efforts which we have been making to get new industry in Scotland are an indication of that.
    Earl of Dalkeith: What steps is the right hon. Gentleman trying to take to bring back to Scotland some of the 168,000 net emigrants who have gone from Scotland during his period of office?
    Mr. Rankin: Do away with landlords.
    Mr. Ross: I assure the hon. Member that if he looks at the most recently published figures for net emigration he will find that they are the best since about 1950. If the hon. Member had shown the same interest in this subject while his party was allowing this emigration to go on without doing anything about it,
    I should feel better satisfied by his questions.
    Mr. Woodburn: Will my right hon. Friend be very careful about the idea of bringing back all the Scottish emigrants, since about 20 million of them are said to be abroad? Is he aware that at this moment it is impossible, and for some time it has been impossible, to get skilled engineers to fill the jobs which are open in Scotland for them as well as for many other workers?
    Mr. Ross: My right hon. Friend puts the situation into proper perspective. I thought for a moment that he was about to tell me that most of the emigrants went from the Buccleuch Estates.

    Building Industry (Metrication)
    Mr. Gordon Campbellasked the Secretary of State for Scotland what consultations he is having with representatives of the construction industry and others concerned on the proposed change to the metric system by the building industry.
    Mr. Ross: Apart from the construction industry, the change involves the associated professions, the British Standards Institution, the National Building Agency, Government Departments and the clients of the industry, both public and private. Between these bodies there have been constant interchanges of view throughout the process, leading to the announcement in February, 1967, of the programme for the change, as well as in the subsequent working out of the programme, and my departments have taken a full part in these.
    Mr. Campbell: Is the right hon. Gentleman satisfied that the approach to this difficult change-over is being carried out in such a way as to minimise dislocation and expense to all concerned?
    Mr. Ross: Yes. The hon. Member will appreciate that the impetus for this action came originally from the Federation of British Industries. We have outlined the programme. As for familarising industry with the change, conferences and discussions have taken place and these are being extended right down the line to ensure that everybody understands what is being done and to minimise the difficulties which, I appreciate, could arise.

    Forth Road Bridge (Tolls)
    Mr. William Hamiltonasked the Secretary of State for Scotland if he will make a further statement on tolls on the Forth Road Bridge.
    Mr. Bruce-Gardyneasked the Secretary of State for Scotland if he will make a statement on the latest position regarding his proposal to increase tolls on the Forth Road Bridge.
    Dr. Dickson Mahon: My right hon. Friend has given the Forth Road Bridge Joint Board notice of his intention to make an Order to increase the tolls and has specified the newspapers in which notice of the change proposed shall be published.
    Mr. Hamilton: Is my right hon. Friend aware that that news will not be greeted with enthusiasm in Fife or anywhere else in Scotland? Despite the Report of the Accounts Committee, and in view of the fact that the Government are proposing to write off £243 million of the capital debts of London Transport in the new Bill, will not my right hon. Friend do the same with the capital debt on the bridge?
    Dr. Mahon: I agree that this statement will be received with disappointment. I am certain that if there are any objectors—and thy, Joint Board themselves may be objectors—and they ask for a local inquiry, then under the Forth Road Bridge Order (Confirmation) Act, 1958, we shall hold an inquiry, and objections can be lodged until 31st January, 1969.
    My hon. Friend raised a wider issue in the second part of his question. I would point out that the Confirmation Act, 1958, lays down the basis of agreement between the parties concerned and the local authorities at that time, and that agreement has to be honoured.
    Mr. Bruce-Gardyne: Will the hon. Member confirm that his answer exposes the nonsense so often talked by his right hon. Friend the Secretary of State on this subject before the last election?
    Dr. Mabon: There is no relevance in that comment. Clearly the hon. Member has not read any of the pronouncements and only assumes the legend.
    Mr. Noble: If an agreement has to be honoured which was agreed beforehand, why was it that his right hon. Friend was proposing to dishonour it?
    Dr. Mabon: There is no question of of that. The difficulty facing my right hon. Friend is that he has to uphold what was done by the right hon. Gentleman's predecessor and by the right hon. Gentleman.
    Mr. Lawson: Will my hon. Friend bear in mind that the Forth Road Bridge was built at the expense of a considerable amount of other road building which would have gone on at that time? If pressure is brought to bear now, will he ensure that there is no easing up at the expense of other road building now due in Scotland?
    Dr. Mabon: I much appreciate that. I only wish that hon. Members opposite would take the same balanced view. In defence of the Conservative Party, it is fair to say that the 1958 agreement did not spring from any compulsion on their part. It came from the accession of the local authorities concerned. One must be fair about this.

    Older Houses (Rehabilitation)
    Mr. William Hamiltonasked the Secretary of State for Scotland what plans he intends to initiate to rehabilitate older houses in both the private and public sectors; and how many houses he estimates will be so rehabilitated in the next 10 years.
    Mr. Ross: My plans were outlined in the White Paper on The Older Houses in Scotland. published in July. The legislation to be introduced this session will aim to stimulate action both by private owners and by local authorities, but I cannot quantify its likely effects over the next 10 years.
    Mr. Hamilton: We shall await with interest the legislation coming forward. Meanwhile, what was done in this matter in 1960–64?
    Mr. Ross: The last Act purporting to deal with the matter, passed before the 1964 election, has proved a dismal failure in respect of its use by the local authorities. But I would not minimise the difficulties of the problem.
    Mr. David Steel: What has the right hon. Gentleman done about the recommendation in the Cullingworth Report that an inquiry should be instituted into the problem of older houses and slum houses in rural areas?
    Mr. Ross: This is one of the aspects in which there was, over a period, more success in relation to the use of existing legislation because of the tied house factor. The legislative change was made in the early 1950s.

    Food Production
    Mr. Stodartasked the Secretary of State for Scotland how much of the net saving in imports of food of £160 million to be achieved by 1972–73 he expects to be made in Scotland.
    Mr. Buchan: It is neither practicable nor useful to make separate estimates for any one part of the United Kingdom. Scotland can, however, make a particularly valuable contribution in respect of beef and other livestock products.
    Mr. Stodart: If the Minister of Agriculture can make these calculations, and since there is a better statistical office in the Department of Agriculture at St. Andrew's House than at the Ministry of Agriculture itself, why cannot the hon. Gentleman give guidance to Scotland? If he cannot, since Scotland produces the best food in the United Kingdom, will he not agree that we should at least contribute one-tenth of the programme?
    Mr. Buchan: I accept the hon. Gentleman's compliment to the efficiency of my Department and of St. Andrew's House, and agree with it. But we believe that it is wrong to break this up area by area and commodity by commodity. We have laid down the broad programme and pace of expansion. No doubt circumstances will alter particular requirements and I think that the hon. Gentleman knows this subject well enough to rest content with that.
    Mr. Maclennan: While welcoming what my hon. Friend has to say about livestock, may I ask whether he has given consideration to the proposals of the N.E.D.C. and whether he challenges its assumptions about sheep farming which are particularly disappointing?
    Mr. Buchan: The N.E.D.C. Report is my nightly reading. I understand my hon. Friend's disappointment with the Report's comments about sheep. Two problems are involved, and both of them give concern. The one involves technical aspects and the other is the effort to increase demand for mutton and lamb in this country.

    Timber (Gale Damage)
    Mr. Stodartasked the Secretary of State for Scotland what date he has set as a target for clearing the timber blown down in the gale last January.
    Dr. Dickson Mahon: The target date set by the Action Group itself is the end of September, 1969.
    Mr. Stodart: Would not the hon. Gentleman agree that the situation in the light of that reply is extremely serious,
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    particularly in the private sector? Is it not the case that, by the end of last September, only 20 per cent. of windblown timber in that sector had been cleared and that, if the target date is to be reached, clearance will have to be stepped up in order to cover 75 per cent.? Since manpower has drifted away from these areas with the approach of winter, will he consider giving an inducement to try to get men back?
    Dr. Mabon: The hon. Gentleman has put his finger on the trouble. The figures he has quoted are more or less accurate. The shortage of skilled labour is the critical matter. We want to review this as we go on and consider whether we can improve on progress but, frankly, I do not know whether we can now manage the target because of manpower shortage. However, we shall do our best.
    Mr. Manuel: Will my hon. Friend note that the number of forestry workers employed by the Forestry Commission is being steeply run down? This will reach a figure of about 2,000 over the whole country but mainly in Scotland. Will he watch this aspect in Scotland?
    Dr. Mabon: We hope that every encouragement will be given by the Forestry Commission—as it has already done—to try to get men displaced to come and help with the wind-blow difficulties.
    Sir J. Gilmour: If the target date cannot be achieved, will it not be necessary to extend transport help beyond that date?
    Dr. Mabon: That is a fair point and we shall consider it as we go along.

    Clyde Estuary Development Study
    Mr. Galbraithasked the Secretary of State for Scotland in view of the size and complexity of various major projects such as that of Murco which are now envisaged in the Clyde area, if he will arrange for a comprehensive public inquiry covering all such projects rather than that each should be considered separately.
    Mr. John Robertsonasked the Secretary of State for Scotland if, before any decisions are taken, he will publish the proposals for the comprehensive

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    development of the Clyde and West of Scotland areas and allow the widest possible pubic discussion of such proposals and submit them to the House.
    Mr. Ross: The Clyde Estuary Development Study was commissioned to focus consideration of such issues. There will be a full opportunity for public discussion before planning decisions are taken on any major new industrial proposals within the ambit of the Study and, so far as possible, related issues will be considered together. I cannot at this stage say whether it will be appropriate to bring any of these proposals before the House.
    Mr. Galbraith: in studying the report will the right hon. Gentleman bear in mind that the development of industry along the Clyde estuary will not only be highly damaging to tourism but will also mean that inland towns will be denuded of industry? Would it not be better to see that industry is brought to the people rather than vice versa?
    Mr. Ross: There is a balance of considerations in all these things, but we must not jeopardise too readily the prosperity or possible increased prosperity of the Clyde..
    Mr. Robertson: Is my right hon. Friend aware that many members of the public are apprehensive about rumours of what is proposed and that some kind of public statement is required fairly soon? Does he also accept that, of all those involved in the discussions, it is only the elected representatives of the people in this House who have not had the opportunity of knowing what is proposed?
    Mr. Ross: I hope that we shall get the report of the Clyde Estuary Study in a few weeks' time. But there is little one can do about rumours except to point out that people should wait until they get firm information about what is really afoot.
    Mr. Noble: In view of the enormous possible importance of this development to the Clyde area and the very large number of interests involved, will the right hon. Gentleman do his best to publish the first report he has available so that the people know what is being planned and need not rely on rumours?
    Mr. Ross: The decision about publication of the report is not for me but I expect the Steering Group of the commissioning authorities to publish a report as soon as possible.

    Crime
    Mr. Galbraithasked the Secretary of State for Scotland, in view of the recently published figures of crime in Scotland, what steps he proposes taking to try to halt the increase which has taken place over recent years.
    Mr. Dempseyasked the Secretary of State for Scotland what action he proposes to take to reverse the increasing crime wave; and if he will make a statement.
    Mr. Buchan: With permission, I shall answer Questions 13 and 71 together.
    Mr. Speaker: Order. The Chair must be told of groupings.
    Mr. Buchan: I would refer the hon. Members to the reply my right hon. Friend gave to the hon. Member for Dumfries (Mr. Monro) on Wednesday, 27th November.—[Vol. 774, c. 121.]
    Mr. Galbraith: Is not this merely tinkering with the problem? How long will it take the hon. Gentleman to face the fact that the first duty of the Government is to provide law and order and that, when murder and crimes of violence have doubled over the last five years, ordinary citizens no longer feel that this is what is being done by the Government?
    Mr. Buchan: The hon. Gentleman should know better than to ask me to face this problem. It would have been more helpful to his own community if statements he has made—some of them outrageous—had slackened rather than increased the tension. Such statements do not help me in trying to get to grips with the problem in a positive way.
    Mr. Dempsey: Does not my hon. Friend agree that, if the courts got rid of inconsistency in sentencing, we might make better progress? For example, we have had an instance of a man being sent to prison for a driving offence while another received probation for murder. Ending that sort of situation would help to curb crime in Scotland.
    Mr. Buchan: If my hon. Friend will write to me about the instances he has in mind, I will look into them but he will not expect me to comment on the courts. They hear the full evidence.

    Western Isles (MacBrayne's Services)
    Mr. Nobleasked the Secretary of State for Scotland what changes have occurred in the estimates of the capital costs of the MacBraynes scheme to serve Islay, Jura, Colonsay and Gigha since July of this year; and what is the present estimate of the capital cost of this scheme and of that proposed by Western Ferries.
    Mr. Ross: Recent indications are that there will be some increase in the capital costs, but I have no reason to think that this increase will be so large as to affect my decision in favour of MacBrayne's services. I have therefore had no reason to ask Western Ferries for revised estimates of capital costs.
    Mr. Noble: Does not the Secretary of State understand that there is no need to ask Western Ferries to revise costs? They have already ordered a boat at a price they said they could afford. When the right hon. Gentleman says that there has been some increase he should be honest with the House and tell us what it is, because my information is that it is very considerable indeed, and that it is a waste of money.
    Mr. Ross: I do not consider it to be a waste of money at all, because I have had to bear in mind in respect of this decision—which was related originally to an overland scheme which was supported by the right hon. Gentleman and which was to cost very much more than the MacBrayne's scheme—the reliability and efficiency of the service, with reasonable passenger comfort. I was satisfied that this would come from MacBrayne's. I am not convinced that the same standard and assurance of service could be provided by the smaller ships and smaller terminals provided by Western Ferries. I had to take into account the possible consequences of a fragmentation of MacBrayne's services.

    Highland Counties (Roads, Bridges and Transport)
    Mr. Nobleasked the Secretary of State for Scotland what expenditure he
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    proposes to make in the roads, bridges and transport fields within the Highland counties above the existing programmes in the next three years.
    Mr. Ross: At this stage, I cannot forecast the level of Government expenditure in the Highlands during the next three years, either on roads and bridges or in that part of the transport field which is my responsibility.
    Mr. Noble: Does the right hon. Gentleman realise that we on this side do not expect him to be able to do anything, but that I have information that makes me believe that he has wantonly wasted £1 million in Islay, Jura and Colonsay and that he might have used the money more satisfactorily elsewhere?
    Mr. Ross: The right hon. Gentleman must appreciate that I resisted his blandishments to spend £1 million more in that respect. I can assure him that if he cares to go round the Highlands, as I have done, he will find that the people think that we are the first Government who have really started to tackle the problem.
    Mrs. Ewing: Is the Secretary of State aware that Scotland is at the bottom of Europe's motorway league—[HON. MEMBERS: "What?"]—and that he has not been able satisfactorily to answer questions about motorway proposals? Is it not clear that expenditure here would compare unfavourably with the expenditure on just one underground extension in London? Is it not time that the Government in Westminster attended to the Highlands, and the attendant problems?
    Mr. Ross: It is time the hon. Lady got her facts right. Her statement about motorways, like most of her other statements, has no relation at all to the truth.
    Mr. Eadie: Would not my right hon. Friend agree that this afternoon we are witnessing a certain amount of hypocrisy? Is he aware that only the other day in the Scottish Grand Committee an hon. Member on the other side called for massive cuts in public expenditure, and was not contradicted by his own Front Bench?
    Mr. Ross: There is no doubt about the difference between what hon. Members say in the House and what they do in the Division Lobbies.

    Housing Developments (Open Spaces and Recreational Facilities)
    Mr. Clark Hutchisonasked the Secretary of State for Scotland what advice he has given to city planning authorities about open spaces and recreational facilities in new housing areas.
    Dr. Dickson Mabon: Advice on the layout of housing developments, including provision for open spaces and recreation, is given in the Scottish Housing Handbook.
    Mr. Clark Hutchison: Has the Minister of State noticed that housing estates in Edinburgh and other cities never seem to be quite completed? Can he do more to see that proper recreational space is provided, and that there is, perhaps, a bit of landscaping? It would make all the difference.
    Dr. Mabon: I accept that fair criticism can be made of local authority estates in Edinburgh and elsewhere in Scotland—as, indeed, is the case in many private developments in Scotland. With this in mind, we are revising the housing handbook jointly with the Ministry of Housing and Local Government. I hope that a new bulletin will be ready by the end of next year. The hon. Gentleman will appreciate that this is an extremely complicated matter, but if we can raise standards all round it is really worth the effort.

    Fife (Communications)
    Mr. Clark Hutchisonasked the Secretary of State for Scotland what study his Department made of improvements in communications in Fife and between Glenfarg and Perth.
    Dr. Dickson Mabon: Communications in these areas are being examined in the Tayside Study and the East Central Scotland Land Use/Transportation Study. North-south communications will be greatly improved by the M90 motorway from Perth to the Forth Road Bridge, of which the Cowdenbeath bypass, now under construction, forms a part.
    Mr. Clark Hutchison: The motorway is moving rather slowly. Has the Minis-
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    ter noticed that this proposed closure of the railway, the direct link between Edinburgh and Perth, would harm communications, particularly to the north? Will he use his good offices to see that the railway is kept open?
    Dr. Mahon: I know that British Rail intends to make formal publication of its proposal to close but the decision whether or not to close the line will be taken by the Minister subsequent to the hearing by the Scottish Transport Users Consultative Committee, and the views of the Tayside Study Group Committee and the Scottish Economic Planning Council will be taken into account.
    Mr. Doig: Is the Minister aware that he has just authorised the expenditure of another large sum of money on the Dundee to Perth road; that the shortest route for all the traffic passing through, with the exception of purely local traffic, is not this road at all, and that he could save money by expenditure on the Fife road, which provides a much shorter route to Glasgow and Edinburgh?
    Dr. Mahon: I am aware of the announcement about the £400,000 to be spent on the A85, since I made it myself on Friday on behalf of my right hon. Friend. I would not agree that development of the A85 should take second place to a Fife regional road. It is the policy of the Government that we shall develop the M90 and the A85. The route of the East Fife road and its potential traffic growth are being studied for possible development some time in the seventies.
    Mr. MacArthur: Will the Minister agree that rapid links with the south are essential to the future economy of Perth? Will he recognise the very wide concern that has been expressed in Perth about the present proposal which would, in effect, put the city half an hour further away than at present? Further, can he say when the motorway is likely to be completed?
    Dr. Mahon: I hope that we would have the motorway, including the southern part of the Perth bypass, completed by the early seventies, but I cannot be precise without due notice. I quite accept that we have to hear the case both for and against British Rail's proposal for closure, but a proposition that has been drawn to our attention, and rehearsed in

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    this question, is that the line of the route might well use some of the railway track if permission for the closure is given, which I admit is an open question.

    Edinburgh-Hawick-Carlisle Railway Line
    Mr. David Steelasked the Secretary of State for Scotland whether, as Chairman of the Scottish Economic Planning Council, he will make public the views of the Council on the proposed closure of the Edinburgh-Hawick-Carlisle railway line.
    Mr. Ross: No, Sir.
    Mr. Steel: Is the Secretary of State aware that the Borders Economic Group has made public its view that this decision is a serious mistake, and that it is public knowledge that the Scottish Planning Council supports that view? Will he take account of the recent representations of the Scottish Council (Development and Industry) and the Church and National Committee of the Church of Scotland, and stand up to his Cabinet colleagues in seeking to have the decision reviewed?
    Mr. Ross: I can assure the hon. Gentleman that exhaustive study was given to this matter. As he knows, this closure was held up for a considerable period in order that we should have this exhaustive study, but there is no doubt at all that the evidence was that the decision would not be an inhibiting factor on economic growth.
    Mr. Monro: Would the Secretary of State accept that the closure of the goods section of a line subsequent to the closure of the passenger section are often equal disasters? Will he confirm or deny that the goods section of the Waverley line will be closed in the spring?
    Mr. Ross: I do not intend to confirm anything at all about that. It is a matter for the Ministry of Transport.

    Skye (Bridge)
    Mr. Russell Johnstonasked the Secretary of State for Scotland whether he will now institute a survey with a view to the construction of a bridge from the mainland to the Island of Skye.
    Dr. Dickson Mabon: No, Sir.
    Mr. Johnston: Is the Minister of State aware that the Scottish Council has agreed to undertake a private survey and is much to be congratulated on taking an initiative about something which is basically a Government responsibility? Can he assure us that he will give it every assistance and consider, for example, the possibility of a special grant to enable it to finish the survey quickly?
    Dr. Mabon: The hon. Gentleman asked me a similar question about the Ballachulish bridge survey, and he knows the pleasant consequence of that, which is that the Government have agreed that we shall do that survey ourselves. The hon. Gentleman knows that we cannot do everything at once. The Highland Transport Board and the Highlands and Islands Development Board have formed the view, which they have passed on to the Secretary of State, that in the context of the transport needs of the Highlands as a whole, a bridge to Skye must be a long-term possibility. I hope that the hon. Gentleman will accept the priorities.
    Sir F. Maclean: Will not the Minister of State soon press on with the existing scheme for a bridge from the mainland to the Isle of Bute?
    Dr. Mabon: That eloquently testifies not only to the dilemma facing the Government, but also to the dilemma facing hon. Gentleman opposite who want to cut Government expenditure.

    Crofters Commission
    Mr. Russell Johnstonasked the Secretary of State for Scotland when he expects to make a statement on the submission made to him by the Crofters Commission on the future of crofting.
    Mr. Ross: I cannot yet add to the answer I gave on 5th November to my hon. Friend the Member for Caithness and Sutherland (Mr. Maclennan).—[Vol. 772, c. 72.]
    Mr. Johnston: Can the Secretary of State assure us that we may have a debate on these proposals in the Scottish Grand Committee as soon as possible, and that there will be the widest consultation with the crofting community before any legislation is devised?
    Mr. Ross: A debate is a matter for the Leader of the House, but I am certainly anxious to have views on this subject publicly ventilated and certainly discussed by Members of Parliament, because it is a very complex and far-reaching proposal.

    The Borders
    Mr. David Steelasked the Secretary of State for Scotland when he will make a statement about the Government's acceptance of the proposals contained in the Johnson-Marshall plan for the Borders, in the light of the representations made to him by the hon. Member for Roxburgh, Selkirk and Peebles, the Borders Consultative Group and the local authorities.
    Mr. Ross: The comments received reveal differing points of view which it would be desirable to discuss with the authorities concerned before I make any final policy statement. These discussions will be held as soon as possible.
    Mr. Steel: Is not the Secretary of State concerned about the delay in implementing the White Paper's basic proposals on the Borders? If so, will he recognise that an early statement from him is desirable? Will he pay due regard to the general feeling that the plan should be amended more in favour of the expansion of the existing burghs?
    Mr. Ross: As the hon. Gentleman knows, there is another point of view. I received the comments of Roxburgh County Council only in mid-November and it would be wrong to proceed to a decision without having the necessary discussions with those concerned.

    Midlothian Schools (Swimming Pools)
    Mr. Eadieasked the Secretary of State for Scotland how many training pools or swimming pools there are in post-primary schools in Midlothian; and how many additional ones are planned for the future school building programme.
    Mr. Millan: Five; three more are under construction and one is being planned.
    Mr. Eadie: Is my hon. Friend aware that that information is most impressive? Does he not agree that information now
    1518
    becoming available shows that such projects are preventing loss of life through drowning?
    Mr. Millan: I am very glad to have that tribute. My hon. Friend may be interested to know that since we issued a circular on this matter, in May 1967, about 75 pools have been built or are now in the planning or construction stages. Those are very striking figures.

    Further Education, Midlothian
    Mr. Eadieasked the Secretary of State for Scotland what increase there has been in the number of further education students in the county of Midlothian at present; and if he will give the total numbers for the years 1963 to 1968, respectively, giving figures for male and female students.
    Mr. Millan: Provisional returns for October 1968 show enrolments of 3,123 in vocational further education courses in Midlothian compared with 2,677 in October 1967. In answer to the second part of the Question, I shall, with permission, circulate a table of figures in the OFFICIAL REPORT covering the total number of students enrolled in each session.
    Mr. Eadie: Would not my hon. Friend agree that the post-primary education policy pursued by the Midlothian Education Authority is a contributory factor in these increases in the numbers of students taking further education?
    Mr. Millan: Yes, Sir. The figures also demonstrate the influence which the new Esk Valley College is already having on further education in Midlothian.
    The following are the numbers of students enrolled:

    Session

    Males

    Females

    Total

    1962–63

    …

    1,194

    748

    1,942

    1963–64

    …

    1,410

    915

    2,325

    1964–65

    …

    1,707

    934

    2,641

    1965–66

    …

    1,700

    956

    2,656

    1966–67

    …

    1,705

    1,278

    2,983

    1967–68

    …

    1,721

    1,158

    2,879

    Mental Illness (Young Patients)
    Miss Herbisonasked the Secretary of State for Scotland how many mentally ill adolescents there are in Scotland; how many of these are in units for adolescents only; how many are in hospital wards with adult patients; and what plans

    1519
    he has for the provision of proper treatment facilities for these young people.
    Mr. Ross: At the end of last year there were 204 young people in the age group 15–19 receiving in-patient treatment for mental illness; of these 42 were patients in adolescent units, 14 were in psychiatric units attached to general hospitals and the remainder were in the adult wards of mental hospitals. In the current year two further adolescent units providing 34 beds have been opened giving a total provision of 76 beds. Regional hospital boards have plans for further developments, though none within the immediate future.
    Miss Herbison: Is my right hon. Friend aware that the Mental Welfare Commission is perturbed about the position of these young people? What advice does my right hon. Friend give to regional hospital boards in their discussions of what their priorities will be? Is there anything further he can do to ensure that these young people get the right treatment in suitable places?
    Mr. Ross: I am very grateful to my right hon. Friend for the interest which she has shown in this matter. On looking into the facts, I quickly realised that there was under-provision, particularly in the Western Regional Hospital Board area. Its plans are to expand Woodilee to a unit of 40 boys and 20 girls and there are other plans under consideration in respect of Stobhill, Leverndale and Gartnavel, with a possibility, if required, of further beds at Ailsa; but none of these is immediate, although we are getting on with discussions about them.
    Mr. Monro: Would not the right hon. Gentleman agree that the figures he has given are very sad and represent tragedy for some children and some parents? Will he look again at proposals for the South of Scotland, where parents at present have to travel to see their children at Larbert, which is too far away?
    Mr. Ross: The hon. Gentleman will appreciate that the Government have doubled provision in this respect. The Western Region Hospital Board has indicated that it is prepared to consider provision of a unit at Crichton Royal, provided it can be done by adaptation and without substantial capital expenditure.

    Local Authority Houses (Letting Policies)
    Mr. James Hamiltonasked the Secretary of State for Scotland what response he has had from local authorities to his circular letter recommending them to have some basis for common house-letting policies; and if he will make a statement.
    Dr. Dickson Mabon: The circular asked for a response only from local authorities which considered the policies it described to be unsuitable for their areas. So far two small burghs have indicated that they wish to continue with different arrangements. Many authorities are no doubt still considering the matter.
    Mr. Hamilton: Is my hon. Friend aware that in some parts of Lanark people have to wait for a house for two years, while in other parts they have to wait for seven years? Will he not remind local authorities that, in the interests of the people as a whole, the waiting periods should be level?
    Dr. Mabon: The circular was sent out only about six weeks ago. It is only reasonable to give local authorities time to consider it, because as my hon. Friend will appreciate, in Lanarkshire, for example, it will mean a substantial change of policy.
    Mr. Gordon Campbell: What general indication have the Government received from local authorities, in response to the circular on the recommendations of the Kay Report to the suggestions for improving mobility over the whole country, and in particular for abolishing residential qualifications for housing lists?
    Dr. Mabon: As I have said, it is a little early to be able to make an assessment because it is only six weeks since the circular was sent. Those with local authority experience will know that in local government that is not a long time when there have to be discussions in housing committees and allocation committees and so on before an issue goes to the council. So far, we have had only three letters and the hon. Gentleman would not, I am sure, like a reply based on only three letters.
    Mr. Steele: Will my hon. Friend make it clear that the circular is advisory and not mandatory on local authorities?
    Dr. Mabob: Yes, this is so.

    Unfit Houses
    Mr. James Hamiltonasked the Secretary of State for Scotland if he will now introduce legislation to prevent the reletting of houses deemed to be unfit and not closed when local authorities have rehoused existing tenants prior to demolition and clearance.
    Dr. Dickson Mabon: This is one of the matters under consideration for the Bill my right hon. Friend will be introducing this session.
    Mr. Hamilton: Is my hon. Friend aware that living accommodation is sometimes built over shops and that, under present legislation, the shops, which are sometimes used as dwelling houses, cannot be condemned? Will he ensure that in the new legislation local authorities will be given power to put a closing order on shops when an area is required for redevelopment?
    Dr. Mabon: I should like to think about that a little longer. I should not like at Question Time to give a straight commitment one way or the other. If my hon. Friend will leave it with me, I will discuss it with my right hon. Friend.

    Local Authorities (Contraceptive Advice)
    Mr. Dewarasked the Secretary of State for Scotland when he intends to authorise the supply of contraceptive advice and appliances on social grounds by local authorities under Section 15 of the Health Services and Public Health Act, 1968.
    Earl of Dalkeithasked the Secretary of State for Scotland whether he will now give local authorities the necessary instructions to bring Section 15 of the Health Services and Public Health Act, 1968, into force.
    Mr. Ross: I cannot add to the reply which I gave the hon. Member for Roxburgh, Selkirk and Peebles (Mr. David Steel) yesterday.
    Mr. Dewar: Will not the Secretary of State accept that it is a thoroughly unsatisfactory situation in which local authorities cannot give contraceptive advice on social grounds when English authorities can? Will he confirm that this restriction is purely a matter of finance and will he give an estimate of what public expenditure is being saved by this rather petty action?
    Mr. Ross: I entirely agree that we should like to be able to go ahead with this. It is a matter of finance. I cannot give a figure, but I do not suppose that it would be all that much. However, we have not had any representations from any Scottish local authority on this subject. It may be that each authority has its own ideas of priorities.
    Earl of Dalkeith: If it is cost which is holding back the Secretary of State, does he not agree that the cost of producing babies who may arrive by accident must be very much higher than the cost of advice and services rendered. in other words, that prevention of labour would be better than cure?
    Mr. Ross: The hon. Gentleman should bear in mind that we took most of those factors into account.
    Mr. David Steel: In his circular the Secretary of State described the lack of provision of birth control facilities as an economy measure. Is that not the strangest economy measure of all?
    Mr. Ross: The hon. Gentleman will appreciate that this is provision on the ground of social need. The health ground is not affected.

    Secondary Education (Reorganisation)
    Mr. Dewarasked the Secretary of State for Scotland whether he is satisfied with the progress being made by Scottish local authorities with the comprehensive reorganisation of secondary education: and if he will make a statement.
    Mr. Ross: Yes, I am satisfied, but the rate at which reorganisation can be implemented depends to some extent on the size and nature of existing school accommodation and on priorities in the building programme for each area.
    Mr. Dewar: Will my right hon. Friend look most carefully at any attempt to rethink the accepted content of reorganisation schemes as a result of events at municipal elections in May?
    Mr. Ross: Perhaps my hon. Friend has in mind something which might well be mooted in Aberdeen. I assure him that we shall give everything our usual careful consideration before coming to a decision.
    Mr. W. H. K. Baker: Will the right hon. Gentleman assure the House that he will give directions that there should not be any further concentration of secondary education in certain circumstances?
    Mr. Ross: If the hon. Gentleman looks at what has been done over the country, he will see that we have been flexible in our approach, bearing in mind all the local circumstances.

    Salmon and Trout Fishing (Report)
    Mr. Dalyellasked the Secretary of State for Scotland if he will make an interim statement on his policy on the recommendations in the Hunter Report on Salmon and Trout Fishing published in 1965.
    Mr. Buchan: No, Sir. Since the recommendations are closely interlinked, I think it better to wait until my right hon. Friend is able to make a comprehensive statement.
    Mr. Dalyell: After three long years, why no action yet?
    Mr. Buchan: I heard only the first part of my hon. Friend's question, "After three long years … ". As it is 101 years since the previous legislation was passed, perhaps three years is not quite so long.
    Mr. Stodart: Does the hon. Gentleman recall that, three years ago, his right hon. Friend the Member for Edinburgh, East (Mr. Willis) said that this matter was being studied urgently, and that two years ago it was being studied very urgently? Would it not be helpful to the Secretary of State if he called back his right hon. Friend to help him?
    Mr. Buchan: We are now discussing it extremely urgently.

    Scottish Special Housing Association
    Mr. Dalyellasked the Secretary of State for Scotland if he will instruct members of the council of the Scottish Special Housing Association to co-operate with local authorities in non-financial matters of amenity, and in particular to instruct them to enter discussions with those local authorities which, contrary to Scottish Special Housing Association practice, allow tenants to keep caravans in gardens.
    Dr. Dickson Mahon: Questions of this kind are best left to the council of management of the Association, but it is the practice of the council to operate in consultation with the local authorities in whose districts it owns houses.
    Mr. Dalyell: Is it not intolerable that a council of management, elected by nobody, should set itself up as an arbiter of taste superior to the locally elected representatives of the people?
    Dr. Mabon: The council of management is appointed by the Secretary of State and it is responsible for the day-to-day management of the Association's business. As such, it is entitled to take a view on these matters which may in some cases be better than some local authority practice—
    Mr. Dalyell: That is anti-democratic.
    Dr. Mahon: —or, on the other hand, may be not so good as local authority practice.

    The Highlands
    Mr. Alasdair Meckenzieasked the Secretary of State for Scotland, in view of the Government's policy for a shift of the sheep flocks towards the hills and uplands, if he will conduct a survey into the potential for expansion from the hills and uplands of the Highlands.
    Mr. Buchan: No, Sir. The Hill Lands Improvement Scheme and the work of the Hill Farming Advisory Committee, the Hill Farming Research Organisation and the Highlands and Islands Development Board can meet the needs of the situation.
    Mr. Mackenzie: As it appears that the Forestry Commission is re-examining its proposals for planting in the Highlands

    1525
    and going into the economics of afforestation, is not this an appropriate time to carry out a general survey of the potential of agriculture and forestry in the Highlands?
    Mr. Buchan: Where special problems arise, special surveys are carried out. One thinks of the Highlands and Islands Development Board surveys in certain areas. As regards afforestation, there is close liaison on this and the related problems between the two Departments involved and the Highlands and Islands Development Board.
    Mr. Maclennan: As an example of a survey carried out the results of which have not been made public, will my hon. Friend say what has happened to the plan for the Strath of Kildonan? The non-production of this plan is causing great annoyance in my constituency.
    Mr. Buchan: The Board has not yet put its proposals in that connection to my right hon. Friend.

    Farms (Livestock)
    Mr. Alasdair Mackenzieasked the Secretary of State for Scotland, in view of the imbalance in arable farming, due to the high profitability of cereal growing compared with livestock rearing, if he will now take steps to increase the profitability of livestock to redress this imbalance and improve the standard of husbandry.
    Mr. Buchan: The balance between cereal crops and livestock and the level of price guarantees and production grants as they affect different products will be considered, along with other relevant factors, at the forthcoming Annual Review.
    Mr. Mackenzie: Does the hon. Gentleman agree that the present system of cereal growing on farms year after year, without any change in rotation, makes for all sorts of troubles for the grower and lighter yields as time goes on? Would it not help the general standard of husbandry to have a better rotation system?
    Mr. Buchan: As a general statement of framing policy that is correct. I think that the hon. Gentleman has in mind the fattening of sheep in lowland areas. There has been an indication this autumn, since the store period, of a slight return to
    1526
    this form of farming, but it is too early to say.

    Fife Constabulary (Strength)
    Mr. Adam Hunterasked the Secretary of State for Scotland whether he will obtain a report as to the present strength of the Fife Constabulary and by how many that police force is over- or under-strength.
    Mr. Buchan: At 31st October, Fife Constabulary has an actual strength of 585 male and 29 female regular police officers; 17 males and 9 females below its authorised establishment.
    Mr. Hunter: According to Press reports about five weeks ago, the position seems to have worsened. Does not my hon. Friend think that the recent increase in police pay should have improved it?
    Mr. Buchan: There was a net increase in strength in 1967 and a further net increase from the beginning of this year. There are fluctuations from time to time throughout the year. I am sure that my hon. Friend is correct when he suggests that the recent pay award to the police should be a useful incentive to recruitment.

    Sheep
    Mr. Monroasked the Secretary of State for Scotland if the Government propose that the size of the sheep flock should be increased.
    Mr. Buchan: We look for an increase in sheep in the hills and uplands throughout the United Kingdom to compensate an expected further decline in low-ground flocks.
    Mr. Monro: How? Does not the hon. Gentleman realise that there is an increasing sale of hill sheep farms to the Forestry Commission and to private forestry companies? This is an urgent matter. Will he do something to help at once?
    Mr. Buchan: That does not directly arise out of this Question, but I told the House in reply to an earlier Question that we maintain close liaison on the related problems of agriculture and forestry. I have been giving a great deal of thought to the whole question of sheep on the

    1527
    hills and uplands, and I hope that technical assistance plus assistance through the Annual Price Review will be of help in the future.
    Mr. Stodart: The hon. Gentleman has given a disappointing reply to the effect that there was an increase in one sector but there was to be a decrease in another. If he cannot give the assurance for which my hon. Friend the Member for Dumfries (Mr. Monro) asked, does not that make nonsense of his right hon. Friend's expansion programme?
    Mr. Buchan: It does nothing of the kind. It is perfectly in line with my right hon. Friend's announcement. The hon. Gentleman will be aware of the diagnosis by the E.D.C. in this connection. Most farmers—perhaps not hon. Members opposite—accept that as a realistic appraisal. I hope that there will be an over-all increase in the number of sheep in Scotland, but it is too early to say that this will come about because of our policy directed towards the hills and uplands.

    Multi-Storey Flats (Gas Supply Fitments)
    Mr. Rankinasked the Secretary of State for Scotland if he will inquire into the extent to which the rigidity of gas supply fitments affects the safety of tenants in multi-storey flats.
    Dr. Dickson Mabon: My hon. Friend, no doubt has in mind the recommendations concerning the safety of gas installations made by the Tribunal of Inquiry into the collapse of flats at Ronan Point. My right hon. Friend the Minister of Power has these under consideration.
    Mr. Rankin: Do I assume that we shall in due course hear that something is being done and that electricity as a source of heat and power is far safer than gas for tenants in these flats when high winds are blowing? Is an admission to that effect now expected? Will my hon. Friend tell us what he is doing?
    Dr. Mabon: I can only comment that the tribunal reported that no case was made out for the permanent exclusion of gas from high blocks. My right hon. Friend has asked local authorities to cut
    1528
    off the gas in any case where there is the slightest doubt about the freedom of a block from danger of progressive collapse. My hon. Friend will hear more about this from the Minister of Power.
    Mr. Dempsey: How soon shall we hear something? How soon will something be done? We have 192 dwelling houses completed in Coatbridge, but allocations have been withheld because no effective action has yet been taken. Will my hon. Friend speed the matter up?
    Dr. Mabon: I fully appreciate the urgency of the matter. My hon. Friend must be aware of the circular which my right hon. Friend sent out recently giving guidance to Scottish local authorities. If there are specific cases in which we can give direct help, we shall be ready to give it.

    Gypsies
    Miss Herbisonasked the Secretary of State for Scotland what is the extent of the gypsy problem; and what advice he has given to local authorities on the provision of facilities for them.
    Dr. Dickson Mabon: The most recent estimate made puts the number of travelling people in Scotland at around 2,000. My right hon. Friend proposes to arrange for a survey to be made in the early spring of next year which should give a more accurate assessment of the numbers and more clearly identify the problems which the travellers face. In the meantime my right hon. Friend will give local authorities any necessary advice relating to this winter.
    Miss Herbison: Is my hon. Friend aware that there is much distress at present? I know that the Government are doing everything that they possibly can, but I should like to know whether local authorities, for this winter at least, could leave these people alone instead of hounding them from place to place and making their lives a veritable misery.
    Dr. Mabon: I agree with my right hon. Friend that this is a matter of some urgency. My hon. Friend the Under-Secretary of State had two meetings with representatives of the travellers. I answered a Question by my hon. Friend the Member for Coatbridge and Airdrie

    1529
    (Mr. Dempsey) as recently as 29th November saying that we are seeking to alleviate the present difficulties in cooperation with the local authorities concerned. I emphasise that again. We are doing our best.

  OFFICIAL REPORT (ERROR)
  Mr. Braine: On a point of order. May I draw your attention, Mr. Speaker, to the fact that my question on the statement of the Minister of State for Foreign and Commonwealth Affairs yesterday and his reply to it were omitted from the appropriate place in HANSARD and appear somewhere else in a totally different context.
  Since much of what happened subsequently yesterday related to what I said, and may be of some relevance to what may be said in a statement later today, may I respectfully ask you, Mr. Speaker, whether the omitted passages might appear in the OFFICIAL. REPORT of today's proceedings?
  Mr. Speaker: I am grateful to the hon. Gentleman for putting his point of order so pleasantly. If I may make an Obiter dictum, it is that, although we appear to take for granted the splendid work of those who serve us, and never speak of it unless there is an error, the whole House deeply appreciates that work.
  I have had a note from the Editor of the OFFICIAL REPORT on the point which the hon. Gentleman raises. It is clear that the typescript left the House with the pages in the proper order and correctly code lettered and numbered. Apparently, one complete page of typescript got out of sequence at the printers and was printed in the wrong place.
  I express my regret to the hon. Gentleman. At the same time, I pay tribute, not only to HANSARD, but to the printers who work through the night to provide the OFFICIAL REPORT each morning. Errors nay be distressing, but they are remarkably rare. The error in this instance will be corrected in the Bound Volume and, as the hon. Gentleman requests. an erratum will be printed in today's OFFICIAL REPORT.

  QUESTION TO MINISTER
  Mr. Bruce-Gardyne: On a point of order. In view of the widespread and growing anxiety throughout Scotland about the operation of British Standard Time, I wonder whether you, Mr. Speaker, have had any intimation from the Secretary of State for Scotland of an intention to answer now Written Question No. 58?
  Mr. Speaker: If there had been any such intention, the hon. Gentleman would have been aware of it before he put his point of order.

FALKLAND ISLANDS
The Minister of State, Foreign and Commonwealth Office (Mr. Fred Mulley): With your permission, Mr. Speaker, and that of the House, I wish to make a further statement on the Falkland Islands.
In accordance with the undertaking given to the House yesterday, I have now inquired into statements made in the House yesterday about Press reports of remarks attributed to my right hon. and noble Friend when he was in Argentina. I have discussed this fully with my right hon. and noble Friend and I have now received from Her Majesty's Ambassador the relevant Argentine Press reports of the Press conference in question.
The statement to which reference was made yesterday was made in the context of creating a framework in which the obstacles affecting ordinary relationships between islands and mainland will be overcome, particularly with regard to communications and economic and cultural links. In this context—and here I quote the relevant extracts from the two Argentine newspapers Clarin and Nacion:
"Question: Does this mean then that the problem would be to convince the islanders?
Answer: I think it is something which depends not only on Great Britain, but that Argentina also has to solve the problem. Britain's relations with the islands are very good, so it is a question of Argentina promoting good relations between herself and the inhabitants of the islands."
On the issue of sovereignty, again I quote relevant extracts from the Argentine newspapers concerned:
"Question: Has a date been fixed for the change of sovereignty?

1531
Answer: We are not thinking in such terms of a change of sovereignty. This is a question which depends entirely on the wishes of the islanders."
My right hon. and noble Friend confirms the accuracy of these reports.
The hon. Member for Essex, South-East suggested that my right hon. and noble Friend said
"that Britain and Argentina may make a joint effort to convince the islanders that a change of status would be convenient."
My right hon. and noble Friend made no such statement.
On all points in the Falklands and in Argentina, as I repeatedly told the House yesterday, he made it clear
"that there can be no transfer of sovereignty against the wishes of the islanders."
The issue was further raised yesterday of the present state of the discussions with the Argentine Government. Since my right hon. Friend the Foreign and Commonwealth Secretary discussed these problems himself with the Argentine Foreign Minister when he was in New York in October, the House would, I know, wish to have a statement from my right hon. Friend as soon as he returns from India.
I understand there has been discussion about this through the usual channels. My right hon. Friend will be making a statement next week.
Sir Alec Douglas-Home: I have some sympathy with the right hon. Gentleman in trying to explain the various statements made by his right hon. and noble Friend.
Mr. Shinwell: On a point of order. My right hon. Friend has just confounded the allegations made yesterday against my right hon. and noble Friend, Lord Chalfont. In the circumstances, should not we first—[HON. MEMBERS: "What is the point of order?"] I can teach the young fools on the benches opposite how to put a point of order. Go back to school.
Mr. Speaker: Order. Perhaps the right hon. Gentleman will continue with his point of order and not interrupt himself.
Mr. Shinwell: I am sorry, Mr. Speaker. I am easily disturbed.
In view of my right hon. Friend's statement, should not we ask the hon. Member
1532
for Essex, South-East (Mr. Braine) to withdraw the allegation which he made yesterday?
Mr. Speaker: That is a point of argument, not a point of order.
Sir Alec Douglas-Home: If the right hon. Gentleman had not been so impetuous, and had waited for my next sentence, perhaps he would not have had to make that kind of intervention.
We have been trying to extract information. We had to do exactly the same thing over Gibraltar. Trying to get the Minister of State to make a specific statement that sovereignty would not be transferred has been like squeezing water out of a stone.
I have only just seen the statement. However, the right hon. Gentleman says that his right hon. and noble Friend stated:
"We are not thinking in such terms of a change of sovereignty. This is a question which depends entirely on the wishes of the islanders."
The statement continues:
"On all points in the Falklands and in the Argentine, as I repeatedly told the House yesterday, he"—
that is, the right hon. and noble Lord, Lord Chalfont—
"made it clear 'that there can be no transfer of Sovereignty against the wishes of the islanders'".
Why did not the right hon. Gentleman say that before? If only he had done so it would have saved a great deal of trouble.
The right hon. Gentleman said that the Secretary of State will make a statement when he returns from his visit to India. We look forward to that with keen anticipation. If it confirms what the right hon. Gentleman has said, all well and good, but we reserve the right to debate this matter, if we wish to do so, after the right hon. Gentleman has made his statement.
Mr. Mulley: I am obliged to the right hon. Gentleman for his last remarks. I accept that the Opposition have the right on this as on every other question to debate the matter if they so desire. I am grateful to him for accepting my offer to ask my right hon. Friend to make a statement.

1533
I do not make an accusation against the hon. Member for Essex, South-East (Mr. Braine), but I could not find any newspaper quotation which measured up to the words which he used in the House. I am sure that he was quoting from memory. That was why I was not able yesterday to give the House the assurance, which I could otherwise have given, that my tight hon. Friend had not possibly used those words.
Mr. Emrys Hughes: Does the principle laid down by my right hon. Friend that the kind of government they get should always Le determined by the wishes of the islanders apply to islands in other parts of the world?
Mr. Mulley: I am concerned at the moment with the Falkland Islanders and since many newspapers have said that the more often I repeated the pledge, the less the House believed it, I prefer to stand by what I have said.
Mr. Braine Mr. Braine rose—
Hon. Members: Withdraw.
Mr. Braine: There is no question of withdrawing. [HON. MEMBERS: "Oh."]
Are we to take it from what the right hon. Gentleman has said this afternoon that he categorically denies the report—
Hon. Members: Withdraw.
Mr. Speaker: Order. I want to hear the hon. Gentleman.
Mr. Braine: Does the right hon. Gentleman now categorically deny the report in Monday's Daily Telegraph—[HON. MEMBERS: "Oh."]—that Lord Chalfont told a Press conference in Buenos Aires on Sunday that Britain could not work alone in convincing the islanders that a change might be convenient and that it must be a joint effort by Britain and the Argentine?
Does the right hon. Gentleman recall that yesterday he told the House that Lord Chalfont was accompanied by five journalists? If those journalists have been sending back incorrect reports, are not the Government to blame for not making their position crystal clear?
Mr. Mulley: I am sorry that the hon. Member has not been more candid with the House. He has just quoted from Monday's Daily Telegraph. Not only,
1534
when he made his point yesterday, did he not give any reference to a newspaper or any date, but he has now read the correct version. Yesterday—inadvertently I hope—after the word "change" as HANSARD records, he talked about a "change of status", which is a quite different situation from a change of relationships, about which my right hon and noble Friend was talking, as has been confirmed by the Argentine newspapers.
If the House or any hon. Member should be in any doubt about this, I would point out two facts. First, five other British newspaper correspondents were present, several representing newspapers which have been wholly critical of our policy on the Falkland Islands, and not one of them thought fit to report this as a significant statement. If it had been as important as the hon. Member suggests, the Daily Telegraph itself might have put it in a more prominent position in that newspaper.
Mr. Murray: In view of my right hon. Friend's failure to get a withdrawal from the Opposition, does he realise that he would have a great deal of support from this side of the House if he refused to answer any more questions from the Opposition on the Falklands until he has had a withdrawal from the hon. Member for Essex, South-East (Mr. Braine)?
Mr. Mulley: I am grateful for the support of my hon. Friend, and, indeed, of all my right hon. and hon. Friends. I share their disappointment that the hon. Member did not see fit to withdraw.
Sir F. Bennett: Will the Minister clarify two points arising from his statement yesterday? With reference to a referendum on Gibraltar, he said that as it was so well known what the opinion of the Falkland Islanders was at the present time a referendum would be superfluous, but does he recall that in the case of Gibraltar precisely the opposite argument was used and it was said that it was just as well that the world should learn straight away what the people of Gibraltar wanted?
As regards the statement today, does the right hon. Gentleman recall that yesterday he referred, I think, seven times to improved communications? Whatever else Lord Chalfont may or may not have said, he has gone on referring to

1535
strengthening links. What is the explanation for this, or is it a Freudian slip?
Mr. Mulley: I have read carefully the reports in the Press on Monday of Lord Chalfont's Press conference. They all reported that Lord Chalfont had stressed very much the need for improved communication links. I think that anyone with any knowledge of the problems of the Falkland Island realises that the fact that they have no access to the Argentine is a cause of very great difficulty for them.
Mr. Faulds: Will my right hon. Friend accept that most of us on this side are as convinced of the need for white self-determination in the Falklands as we are for black self-determination in Southern Africa? Will he please understand that we mean to maintain our stand in both these cases?
Mr. Mulley: I note the views of my hon. Friend.
Sir R. Cary: Why cannot a full-scale Parliamentary delegation visit the Falkland Islands, as was done by the visit of a Parliamentary delegation years ago to Newfoundland, when the future of that island was at stake?
Mr. Mulley: There has been a Parliamentary delegation recently, as the hon. Member for Louth (Sir C. Osborne) reminded the House yesterday, and I am sure that its reports have been of great value. Until the recent visit of my right hon. and noble Friend, no Minister had previously visited the Falklands in, I think, the 130 or more years of their existence as a dependency. The question of a Parliamentary delegation can be considered, but I would point out the difficulties of getting to and fro, demanding a good deal of time.
Sir Dingle Foot: Will the Government remind the Government of the Argentine, if they have not already done so, that both Britain and Argentina are signatories of the United Nations Charter and that under Article 73 of the Charter we are bound as a matter of duty, from which we cannot escape, to have regard, first and foremost, to the wishes of the inhabitants?
Mr. Mulley: As I explained to the House yesterday, it was because of the United Nations resolution that the discussions with the Argentine were first set on foot. Right from the very beginning in the debate in the United Nations, my right hon. and noble Friend Lord Caradon made it clear that, in our judgment, the interest and wishes of the islanders must be paramount throughout.
Mrs. Knight: May we take it that the Minister will not emulate his right hon. and noble Friend's example yesterday when, having made a statement in another place, he later went on television to admit that he had not given in that statement all the information which he possessed?
Mr. Mulley: I had the pleasure last night of watching the television programme concerned, and that was not the impression which I gained from it. So far, I have no invitation to appear on television tonight and I have no expectation of receiving such an invitation.
Mr. Mendelson: Is it not quite clear, in view of the last allegation, that all that Lord Chalfont said was, as I have heard many Governments saying over the years in similar circumstances, that in the middle of a diplomatic negotiation one cannot publish all the points involved? Is it not time that this personal vendetta against a public servant of Lord Chalfont's integrity and ability should cease once and for all?
Mr. Mulley: I strongly agree with my hon. Friend.
Lord Lambton: Will the Minister say whether he was aware yesterday, when he answered the question of my right hon. Friend the Member for Flint, West (Mr. Birch), that Lord Chalfont had received a letter the day before he went to the Falkland Islands which was relevant to the seaweed project? Did he mention the changed circumstances arising from that letter to the Governor and the Council of the Falkland Islands?
Mr. Mulley: I thought that I dealt with that matter yesterday when, I think, we had not the benefit of the presence of the noble Lord.
Viscount Lambton Viscount Lambton indicated dissent.
Mr. Mulley: I dealt with the matter. Lord Chalfont himself dealt with it in another place yesterday, when he said that the letter was marked "Confidential" and, therefore, sent for his personal information after he had left and it was forwarded to him and reached him just before he went to the Falkland Islands. That letter did not contain anything of the detailed information, or probability of early action, that has been more recently conveyed to the Press by the gentleman in question.
Mr. Shinwell: Is my hon. Friend aware that the hon. Member for Essex, South-East (Mr. Braine) was on television last night and repeated the allegations, as the transcript would show, made yesterday in this House and which are now found to be without foundation? In these circumstances, would my hon. Friend make a statement to the B.B.C. that the hon. Member for Essex, South-East should not receive his usual fee?
Sir Knox Cunningham: Will the Minister of State, on behalf of the Government—[Interruption.]
Mr. Speaker: Order. I want to hear the question.
Sir Knox Cunningham: Will the Minister of State, on behalf of the Government, say that there will be no further discussion of sovereignty with the Argentine, and if he has not that authority will he get it from the Prime Minister, who is sitting beside him?
Mr. Mulley: I went into this question at some length yesterday and I thought that the House had generally welcomed the undertaking I gave today that my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs will make a further statement next week.
Mr. Hamling: While welcoming warmly the statement made by my right hon. Friend, may I ask whether he would not agree that reliance and insistence upon inaccurate Press reports does a great deal of harm to the confidence of the Falkland Islanders in Her Majesty's Government and that it is the policy of both sides, surely, to reassure the islar ders and not upset them?
Mr. Mulley: I am obliged to my hon. Friend. I think that the difficulty in this
1538
case arose from the hon. Member for Essex, South-East giving to the House yesterday a wrong interpretation of a Press report, and it is for this reason that I regret that he will not withdraw it.
Mr. David Steel: Is the Minister aware that we on this bench have never had, and do not now have, any cause to question the integrity of Lord Chalfont, and that we accept that he did not use the words attributed to him yesterday in this House? But would the right hon. Gentleman accept that the Government could get out of this difficulty if they would stop using so much such words as, "There will be no transfer of sovereignty against the wishes of the islanders" and, instead, say, "The islanders do not wish any transfer of sovereignty. Therefore, there will be no change of sovereignty"?
Mr. Mulley: This is a most helpful suggestion which I will put to my right hon. Friend.
Mr. C. Pannell: Would my hon. Friend try to find out, on behalf of the House, why those Members opposite who want no further palaver with Argentina want to keep on talking ad nauseam with Mr. Smith?
Mr. Sandys: Since it is quite clear that the only thing which Argentina wants from Britain is possession of the Falkland Islands, and since the islanders are determined to remain British, can the Minister at least tell us what the negotiations are about? Will he tell us whether it has been made clear to the Argentine Government that the question of the transfer of sovereignty is not discussable in the negotiations?
Mr. Mulley: The discussions with Argentina arose for two reasons. One, because the two Governments were requested to discuss their dispute by the United Nations General Assembly. As my right hon. Friend the Foreign Secretary said in March, while we may not agree—and we do not agree—with the Argentine Government on this matter, it is difficult, in the light of a United Nations resolution, to refuse to discuss it with them, and since the dispute concerns sovereignty, naturally the question of sovereignty had to be discussed and has been discussed in these talks.
I think that the House will realise that one of the reasons why they have taken

1539
so long and have not come to a conclusion, and, indeed, may well not come to an agreed conclusion, is that we have, as I told the House yesterday, insisted throughout upon the paramount importance of the wishes of the islanders and cannot agree to any transfer of sovereignty against the wishes of the islanders. I thought that I had made that so clear yesterday; so clear, indeed, that I have been taken to task by, I think, almost every newspaper for having repeated it too often.
Mr. Hastings: Has the Minister read a report which appeared on Saturday last in La Prensa which, I understand, is a prominent Argentine newspaper, to the effect that agreement was feasible and that the interests, as opposed to the wishes, of the population would be taken into account, and that sovereignty would be transferred once relations have been improved, and, finally, that a period of from four to 10 years would be set aside for this improvement of good relations, in particular, communications? Is the Minister in a position utterly to repudiate that report?
Mr. Mulley: A question arose about the accuracy of remarks attributed to my right hon. and noble Friend at the Press conference. I am quite certain that no such comment of the kind that the hon. Member has just suggested arose in that conference. While I take no responsibility for what appears in British newspapers, I certainly have no responsibility for what may appear in papers abroad.
Sir C. Osborne Sir C. Osborne May I ask two questions? Why cannot the House be told what Lord Chalfont said to the Executive Council in the Falklands? Secondly, yesterday, if my memory is right, the right hon. Gentleman said that the islanders may change their minds. Will he give an undertaking that no British money will be used to induce them to change their minds?
Mr. Mulley: I am, frankly, astonished by the second question by the hon. Mem-
1540
ber, who has had an opportunity, which I, personally, have not had, of visiting the islands, and that he should suggest that we can make them change their minds by the offer of money. That is certainly not the kind of comment I would have expected from him.
As to the first point—I am sorry, but I am not sure what it was.
Sir C. Osborne: Why cannot the House be told what Lord Chalfont said to the Executive Council?
Mr. Mulley: The reason it was possible to have a more confidential talk with the Executive Council was that the Council is the Government of the Falkland Islands. Members of that body are bound by an oath of secrecy. In the normal course of diplomatic practice it is never possible to divulge details of communications without the consent of the other party. Normally, of course, one reaches the point where there is an agreed statement; or, if one cannot get to that point, a general announcement that the talks have come to an end.
Mr. Kenyon: Is my hon. Friend aware that if hon. Members could spend six months on those islands, the majority of them would change their minds? [Laughter.]
Mr. Speaker: Order. That is the question to end all questions.

BILL PRESENTED
  AGRICULTURAL TRAINING BOARD (ABOLITION)
  Bill to abolish the Agricultural, Horticultural and Forestry Industrial Training Board, presented by Mr. John Farr; supported by Mr. James Scott-Hopkins, Sir Clive Bossom, Mr. John Wells, and Mr. Paul Hawkins; read the First time; to be read a Second time upon Friday, 13th December, and to be printed. [Bill 50.]
ORDERS OF THE DAY

  CUSTOMS (IMPORT DEPOSITS) BILL
  Considered in Committee [Progress, 3rd December, 1968].
  [Mr. HARRY GOURLAY in the Chair]

Schedule 1

  EXEMPTED GOODS
  4.0 p.m.
  Mr. John Pardoe: I beg to move Amendment No. 44, in page 5, line 13, at end insert:

  Chapter 6 (all headings).

  Live trees and other plants; bulbs, roots and the like; cut flowers and ornamental foliage.

  The Deputy Chairman (Mr. Harry Gourlay): With this Amendment we will take also, Amendment No. 45, in page 5, line 13, at end insert:

  06.02(A)

  Buds, eyes and stems for grafting and budding; cuttings and slips; mushroom spawn.

  06.02(B)(1)

  Rose stocks neither budded nor grafted, the following:

  Rosina canina rooted single stems, not less than 4 feet in lengh

  Rosa canina seedlings

  Rosa laxa seedlings

  Rosa rugosa rooted single stems, not less than 4 feet in length.

  06.02(D)(1)

  Azalea indica, not in flower.

  06.02(F)(1)(a)

  Other trees, shrubs and bushes, not in flower.

  Mr. Pardoe: The first question that arises out of Amendment No. 44, which deals with Chapter 6 in the tariff list, is why the chapter was omitted in the first place. Will the Government give their reasons for omitting the chapter from the exemption list? It may be that the products dealt with in Chapter 6 could be categorised as unnecessary imports. We have heard a great deal about unnecessary imports, and I imagine that the reactions to the Amendment of many hon. protectionist Members will be, why should the Government want to flood decent British drawingrooms with nasty foreign cut flowers and foliage? The Amendment is concerned with live trees and other plants; bulbs, roots and the
  1542
  like; cut flowers and ornamental foliage. I have already given to the Committee my definition of unnecessary imports, which does not square with the more protectionist views of some hon. Members. I regard unnecessary imports as imports which no one in this country wants to buy, and since some quantities of these products are at present being imported, I do not accept the argument that they are unnecessary.
  Taking the 1967 figures, the total imports amounted to about £10,845,000 worth of goods, and, since this is a comparatively small product in the import range, would it not be administratively better to exempt it? By exempting the product group the administration of the scheme would be tightened. It is not likely that the Government will have to deal with large quantities at any one time. I suspect that the quantities of this product group coming in at any one time are quite small, and I therefore hope that the Government will consider the matter of administration.
  I turn now to the problem faced by Holland. The great bulk of imports of this product group come from the Netherlands. The total figure for the import of bulbs, tubers, tuberous roots, corms, crowns, rhizomes, dormant, in growth or in flower, is £4,846,000 in 1966, of which £4,344,000 came from the Netherlands.
  To take the 1966 figure for this product group—and I take the 1966 figure because the 1967 figures are not yet broken down, out of a total of £9,693,000 worth of goods—£6,821,000 worth came from the Netherlands. It is, therefore, a vital matter for this one country and, since we have very close and extensive trading relations with the Netherlands, it might well be that the Government should consider their interests in this matter.
  These products are mostly perishable, and I want to raise on this product group the question of what happens with perishable goods. An importer importing a piece of machinery, or something that is likely to be as good in six months time as it is now, who cannot find the deposit, may presumably leave the goods with the Customs and Excise and collect them six months later, or whenever the Government deems. Cut flowers would

  1543
  be of little use six months later, and I therefore wonder what the Government intend to do in the situation which I have envisaged.
  This might well happen in quite a number of cases. Will the Government say what they intend to do with perishable goods if the deposit cannot be found and the goods have to be left with Customs and Excise? I hope that the Financial Secretary has noted the questions I have raised and will give answers to them in the course of the debate.
  Mr. John Wells: Amendment No. 45, in my name, is slightly narrower than Amendment No. 44, which has been moved by the hon. Member for Cornwall, North (Mr. Pardoe). I believe that we should look at these product groups rather more strictly.
  The advantage of taking the smaller range is that the total value is very much less, and these are the vital products for the British nursery industry. The hon. Member for Cornwall, North has just said words to the effect that it is strange for a Liberal to suggest that cut flowers of foreign origins should be put in British drawing rooms. If we were to accept the narrower Amendment we would be dealing only with the raw material of the nursery trade. The Financial Secretary was at pains, when the Ways and Means Resolution was debated, to say that raw materials would be exempt. He was also at pains to remind us that seeds are exempt. The headings set out are basically the raw materials, the equivalent of seeds.
  I would mention heading 06.02(A), buds, eyes and stems for grafting and budding; cuttings and slips; mushroom spawn. All these are the equivalent of seeds although they are not physically such. Heading 06.02(B)(1) refers to rose stocks neither budded nor grafted. These common rose stocks cannot satisfactorily be grown in this country and they are traditionally imported. The entire nursery trade is based on importing them, and this is of great importance. Taking the last five years averaged together the cash value of these products amounts to just over £½ million a year. The quantity in numbers, again taking an average, is over 55 million units a year, that is to say, 55 units of work.
  1544
  With one or two exceptions, the nursery stock trade is based on small, one, two or three man businesses. The present season of the year is the time when they are planting, moving, lifting, transplanting and so on. It is their busy season, but it is also the time of the year when their cash liquidity is at its lowest. They have to buy in their new stocks from abroad, but they are not, generally speaking, paid until the spring. These small firms are at a low ebb financially, and if this extra imposition, which seems most irrational, should fall upon them they will be in a particularly bad way financially.
  This extra impost seems to be most irrational. If it should come upon them, they will be in a bad way financially. I am assured by the Horticultural Trades Association, which speaks for these people, that there will be unemployment and bankruptcy among small firms. We were told by the Financial Secretary that raw materials would be exempt. For that reason, I hope that he will look at these two categories favourably.
  My third category, subheading (D)(1), is azalea indica, not in flower. This could be said to be a luxury product, but, again, the general experience is that azalea indica is not grown afresh here. It is always imported, and there is a comparatively large trade in it. In terms of cash value, the figure is about £⅓ million a year, and that will not break the Treasury, though it might break many small firms.
  My final category is 06.02(F)(1)(a), which takes in other trees, shrubs and bushes, not in flower. This might sound to be a rather exotic import which we could well do without, but, again, this category of shrubs and trees is the raw material. The bulk of importers do not buy them for resale but for lining out in their own nurseries. The approximate ratio is that, in terms of value, about £ 1 in £18 is resold immediately. These are not items for resale and, in the view of the Horticultural Trades Association, they, too, are a raw material.
  I ask the Financial Secretary to look again at these four categories. Acceptance of my Amendment will not cost a lot, and the items involved have the special quality of being the raw material of a small man industry. I hope that he will be sympathetic towards it.
  Mr. Brian Harrison: I want to support Amendment No. 45. My reason for doing so is very logical, and perhaps I should declare my interest in that I am a nurseryman importing root stocks, buds, eye slips and some graft-wood. The reason such items are imported at present is that nurserymen are striving to substitute them for finished products which would have to be imported at a very much higher price. Taking, for example, a given category of roses, there are about 4 million coming in from Holland. One or two nurseries here have now discovered that, by importing raw material from Holland, and paying 3d. or 4d. each, they can substitute them for finished products which would have to be imported at about 1s. 6d. each.
  At this time of the year, root stocks have to be imported because grafting begins on 1st December or 1st January, and then work has to be done for selling at the end of the season, which is further than six months ahead of the present day. We understand that this levy will be taken off in six months' time. Instead of bringing in an object costing about 3d. or 3½d., which then has an amount of work put into it with British labour and is sold at the end of the period for 1s. 6d., nurserymen are to be hindered in bringing in the raw materials, which is what they are.
  In about six or nine months' time, to satisfy the demand of the home market, they will have to be imported at a cost of about 1s. 6d. each. It seems only logical that root stocks should be allowed to be brought in now, so preventing a very much more expensive import in six to nine months' time after this levy has gone.
  Furthermore, rose buds are a convenient and economical way of bringing in new varieties. If such new varieties have to be brought in as finished roses or finished viburnums, they will be about eight or nine times more expensive, and they will have to be paid for in foreign currency. In the following season, too, they will be much more expensive on the market than if the raw material could come in now.
  4.15 p.m.
  It must be emphasised that it is quite impossible to postpone this. It is no
  1546
  more possible than the story of the wartime agricultural executive officer who said that lambing had to be put off for six weeks. It is impossible to put off the grafting or budding of roses.
  Other plants, like azalea indica, come in, not for direct sale and, if they are not in bud now they are normally potted up here and allowed to flower, again with an amount of indigenous labour put in, and they are ready for the market in three or four months. If this is not done, they have to be brought in as finished products at greater expense from Holland, Belgium or France.
  I would draw the Financial Secretary's attention to a Report on Import Substitution in Agriculture, published a few months ago, which draws attention to the fact that we in this country should try to produce a lot of finished products which normally come finished from other countries. A number of nurseries are concentrating on this and trying to bring in raw materials. Later, it is hoped that it will be possible to grow and produce our own stocks, but rose stocks cannot be produced in six months at this time of the year, and there is nothing which can be done to fill in the gap. If this additional burden is placed on those who are trying to follow the recommendations of the Report and substitute finished products for finished imports, it will create tremendous problems for nurserymen.
  I hope that the very limited series of categories set out in Amendment No. 45 will be looked at again. The Treasury should realise that, by rejecting the Amendment, it will cut off its nose to spite its face.
  Mr. John Nott: I have never seen the benches opposite so naked and unashamed as they have been since the beginning of this debate. It is only during the last two or three minutes that a P.P.S. has joined the payroll vote on the Front Bench. Since we are discussing foliage, an appropriate comment might be that not even a fig leaf hides the Government's shame. We are meant to be discussing a key feature of their economic strategy, but not a single hon. Member opposite appears to be sufficiently interested to be present.
  I oppose the Amendment moved by the hon. Member for Cornwall, North (Mr. Pardoe). Not for political reasons, but

  1547
  for other reasons, I find the Amendment of my hon. Friend the Member for Maidstone (Mr. John Wells) more acceptable than that of the hon. Member for Cornwall, North.
  I am against the Bill in toto, because it is administratively inept and will damage this country, particularly our exports. When the Ways and Means Resolution was first proposed I suggested that it would also be subject to a huge amount of special pleading from every kind of interest and from all directions. Indeed, in the debates on the Schedule which follow we merely see the tip of the iceberg, as it were, of the special pleading now going on.
  The reason I do not oppose my hon. Friend's Amendment is that it is reasonable to exclude seeds and the raw materials of the horticultural industry. because these raw materials may not be available here. Although I believe in the maximum liberalisation of trade on industrial products, it is consistent to favour some kind of levy system on imports of agricultural and horticultural products. We have to look at the agricultural and horticultural industries differently from other industries.
  This is certainly accepted throughout the Western world. Being a supporter of a new system of agricultural support, namely, a system of minimum import prices and variable levies on imports, it is reasonable for me to oppose the Amendment moved by the hon. Member for Cornwall, North. I do so without any shame, although I am against the Bill as such. That is because it includes —and this is where it differs from my hon. Friend's Amendment—cut flowers. ornamental foliage and bulbs.
  My constituency has a growing and important part to play in the cut flower and bulb industry. In the same way that we wish to protect agriculture from dumping by overseas countries, so it is reasonable to protect our horticultural industry from dumping.
  I should not like to see Amendment No. 44 go through, because it embodies a move in the direction of a minimum import price protection for the horticultural industry. The bulb industry, which has been growing substantially in
  1548
  this country at the expense of the Dutch bulb industry, should be encouraged more than in the past. Likewise, the cut flower industry, which is vitally important in the Isles of Scilly and West Cornwall, should be encouraged and should receive the same kind of protection that the agricultural industry ought also to receive from minimum import prices and variable levies.
  That is why I oppose Amendment No. 44. But I am happy with Amendment No. 45 which seems to raise an entirely different principle, namely, the importation of the necessary raw materials which cannot sometimes be produced within the United Kingdom.
  The Financial Secretary to the Treasury (Mr. Harold Lever): I am grateful even for the modest kind of support that I am likely to receive from the hon Member for St. Ives (Mr. Nott) in view of his attitude to the Bill generally. I notice that he upholds very firmly the principles of free trade, except in relation to agricultural and horticultural products, for which we know that his constituency is famous. I can only congratulate him on the happy coincidence whereby interest and conviction dovetail so agreeably in a way which all too often many of us do not find possible.
  However, I have noted what the hon. Gentleman said in support. But protectionism is no part of the Bill's intent or thinking, so I cannot even accept this momentarily proffered hand of support from the hon. Member for St. Ives. I emphasise that this is not a protectionist Bill.
  I should again emphasise that our attitude to imports is not hostile as such. We are anxious to be able to afford the maximum amount of imports that the people select by bringing the ratio of those imports in relation to our exports into a satisfactory state at the earliest possible time.
  I am sorry to be tediously repetitive about it, but so many speeches are made in which it is suggested that we have not exempted certain articles because we dislike them. Far from it. I find for a brief and agreeable moment that we are wafted into the air of azalea scent, roses, live trees and ornamental flowers. I fear

  1549
  that we shall be engaged at some length on less agreeable articles as we move through the Schedule.
  Mr. Patrick Jenkin: "An existence à la Watteau", as W. S. Gilbert would have said.
  Mr. Lever: As the hon. Gentleman says, a Watteau-like appearance comes to the Committee for a brief moment.
  If hon. Gentlemen opposite regret the absence of some hon. Members on our side, I take this to be an indication of confidence in my hon. Friend and myself. I am sure that it is not any lack of interest in the many speeches which will be made by hon. Gentlemen opposite for whom, in this sort of situation, they normally provide a silent audience. I hope that hon. Gentlemen opposite will not feel depressed by the lack of numbers on this side at the moment, because it is certain that my hon. Friends will study earnestly what has been said in HANSARD.
  I hope that I have made our position clear. When articles are not on the exempted list it does not imply any kind of hostile disposition towards them. On Amendment No. 45, hon. Gentlemen must not, like the hon. Member for Malden (Mr. Brian Harrison), speak as if, when we do not exempt an article, it means that it is embargoed from entering. How otherwise can the hon. Gentleman speak of the Government biting off their nose to spite their face by refusing to give exemption to certain articles? I hope that the hon. Gentleman will not pessismistically assume that the articles in question will not come in in reasonable quantities. The most we are seeking, concerning those articles, is to make a marginal moderation in the flow or, to the extent that does not occur, some impact on our liquidity situation.
  Mr. Brian Harrison: Can the hon. Gentleman guarantee that nursery-men's bank managers will be prepared and permitted to advance the necessary money to cover the import levy?
  Mr. Lever: I have dealt with this point several times. I hope that the Committee will realise that courtsey to the hon. Gentleman again requires that I should, even to the point of tedium, repeat it.
  1550
  Any nurseryman who requires the import deposit, but has not the cash, will be able to offer any source of finance—an unimpeachable Government security of six months' duration—to secure it. If he has to pay interest, it will be on half the cost of the non-exempted article for six months. I do not want to repeat what I said. I refer the hon. Gentleman to what I said about it yesterday and on other occasions.
  This is an impediment. But I want the lion. Gentleman to know that, far from being resentful or hostile to the import, the Bill is founded on the assumption that most importers will remove most of the impediment to an extent which will not be ruinous to any importer. The hon. Gentleman must realise that this is done with great regret. I am sorry to impose even this impediment, but it is done for the ultimate advantage of all importers, because this is the lightest scheme that we could adopt. It is hard for people like the hon. Gentleman to be inconvenienced like this, and I am sympathetic. However, he might console himself with the thought that timely and moderate action of this kind might be the means of ensuring, for a long time to come, that the country can enjoy the most liberal trading conditions and the least interference with imports.
  In a sense this Measure, because of its moderation and timeliness, and its relation to our general strategy, will be an ultimate benefactor, not a victimiser, of the importer. I cannot resist doing what I did on television, when I quoted the words of Nye Bevan, who said, "When you kick a man in the teeth, even for his own ultimate and enduring benefit, you must not expect him to be immediately grateful". Although this Measure will inure to the ultimate benefit of all the people in this country, including the importers, I do not expect them to be immediately grateful. I appreciate that they have difficulties, and I sympathise with them. We are not hostile to them, but we have to maintain a certain discipline on the import side, in the manner consistent with the purposes of the Bill.
  4.30 p.m.
  Mr. A. P. Costain: Does the Financial Secretary agree that the general principle of the

  1551
  Bill is that raw materials should be exempt? Does not he accept that my hon. Friend has made the case that these are raw materials? Why is he against the importation of raw materials for the horticulture industry?
  Mr. Lever: They are not raw materials in the sense indicated by the Chancellor of the Exchequer, nor are they foodstuffs in the sense indicated by him. These are raw materials which, in most cases, have been the subject of work, and what in industrial areas would be called processing. They do not qualify under the Chancellor's definition.
  I know that only £10 million to £11 million are involved, but that involves an import deposit of about £5 million to £6 million, or 1 per cent. of the entire scheme. We need only 100 minor and attractive Amendments of this kind to make it a work of supererogation to have given the Bill a Second Reading, and to have passed the three Clauses, because we would eliminate the whole purpose of the scheme. We must preserve a sufficiently wide range of non-exempted articles to maintain the immediate impact of the scheme.
  Mr. John Wells: The hon. Gentleman says that the whole sector involves only £10 million to £11 million. Perhaps I might direct his attention to my Amendment—not the Liberal one—and, in particular, to the first part of it. I can only repeat the figures which I gave earlier. The amount involved is under £500,000. Surely, less than £500,000 for the first category, which is undoubtedly a raw material within the Chancellor's meaning, can be accepted? The hon. Gentleman must look again at his right hon. Friend's words.
  Mr. Lever: I heard what my right hon. Friend said, and I came to the conclusion that this was not within those words. Also, it would not be possible to use so selective an attitude at this stage of the scheme.
  I ought to point out, as I shall on other Amendments, at the risk of tedium, that the Government have taken powers to bring the scheme to an end at any time they think right, or to add to the exemptions particular classes in the light of the working of the scheme, or to lower the
  1552
  rate in relation to particular categories of goods. We cannot increase the rate, nor do we want to. We cannot remove an exemption, nor do we want to. But we have taken power to add to the exemptions and reduce the rate as we watch the working of the scheme.
  I know the interests taken by the hon. Member for Maidstone (Mr. John Wells) in all these fruits and horticultural products, and I shall study his arguments again. All these matters will be kept closely under review by the Government after the Bill has continued its operation for some while. At any time that we are able to take action under this power, we shall do so. At this stage, however, I have to urge the Committee to reject the Amendment. It would make an inroad prematurely into the list of goods not exempted and subject to the deposit.
  Mr. Peter Emery: I did not intend to intervene on this Amendment, but that the Financial Secretary's reply raises a matter of principle. It appears that we are likely to hear a similar reply to many of the Amendments. The answer we are to be given is that the Government will look at all the arguments, consider the matters fully, and, if they are suddenly impressed by the position, they can take action.
  Mr. Lever: The hon. Gentleman must realise that that is not what I said. I said that we would keep the arguments in mind, and we would watch the operation of the scheme in respect of particular items. We shall do so bearing in mind the arguments which have been advanced by hon. Gentlemen opposite. It is this watching of the operation of the scheme which is crucial to the operation of the powers which we have taken.
  Mr. Emery: I thank the hon. Gentleman for making absolutely plain what I thought was plain before.
  The hon. Gentleman is trying to suggest that he will watch the scheme, but he can watch it for only one purpose, and that is to make certain that it is operating properly, or in such a manner that he can take action to do what my hon. Friend has suggested, and that is to allow certain produce to be exempted. If that is not the case, the hon. Gentleman's argument is of no avail. In other words, he will be watching the scheme for no

  1553
  purpose, because watching it does not mean that one intends to do something about it. It seems a false argument to be put forward by the Government.
  I am particularly concerned about this, because this is the sort of argument that we had four years ago when we were discussing exemptions from the 15 per cent. surcharge. Over and over again Ministers suggested that they would watch the operation of the scheme, that they would listen to our arguments with great interest, and then, as time went on, if it was thought necessary to take action, they would do so. As I recollect the situation, the Government took no action at all while that surcharge was in operation.
  In other words, despite all the assurances given to us, the number of items excluded from the surcharge after the Bill became law could be counted on one hand. I should not go so far as to say that there were no subsequent exemptions, but there were certainly very few. I hope that the Minister will bear that in mind when he gives us the kind of answer we have just had.
  We do not have to look at the crystal ball. All we have to do is to read the book, and on doing that we find that, despite all the assurances, the Government took no action to increase the number of exemptions. Hon. Members who are trying to get items exempted should realise that the assurances we were given four years ago meant nothing at all. It is extending our credulity a little to think that those arguments can be hashed up again, and I hope that the Government will not repeat their performance of four years ago.
  Mr. Costain: I intervened in the Financial Secretary's speech to inquire whether he would accept these items as raw material. I understand he said that the Chancellor had decided they were not. We now have a farcical situation. Do hon. Members appreciate that a Socialist Government are introducing legislation to allow caviare to come in because it is a foodstuff, but are prohibiting the import of mushroom spawn, because it is not?
  Mr. Lever: The hon. Gentleman must not say that we are not allowing mushroom spawn to be imported. He is
  1554
  entitled to make an interesting debating point—it will not be for the first time—that caviare as a foodstuff is exempt, but he must not talk of any other article which is not exempt as being forbidden. It is not; it is subject to a minor impediment.
  Mr. Costain: I keep off the forbidden fruit. It is admitted that caviare is for a privileged class and mushroom spawn is not. The Financial Secretary said that these imports are not forbidden and all that an importer has to do is to find a finance house to lend him money so that he can lend it to the Government. I have been under the impression that the Government have sent instructions to the banks to put restrictions on lending. Is it suggested that another money lender will come in to lend at lower rates of interest? Mushrooms are a food which is grown in this country and the spawn coming here would help.
  Mr. Peter Blaker: I reinforce the point made by my hon. Friend the Member for Honiton (Mr. Emery). The Committee should look very suspiciously at the plea made by the Financial Secretary that the Government will see how things go, with the implication that they will take action to rectify anything which needs rectification.
  I ask the Committee to imagine what is likely to happen. For the first three months after the Bill has become an Act the Government will say, "We have not enough evidence yet to see whether there is something wrong here. Let us consider a little longer and see what evidence comes in." For the next three months they will say, "We are considering the evidence". At the end of the six months they will say, "This scheme will expire in six months' time, so what is the point of doing anything about it now?" If we are to get the thing right, let us get it right now.
  Amendment negatived.
  Mr. Pardoe: I beg to move Amendment No. 47, in page 5, to leave out line 46 and to insert:

  Chapter 22 (all headings)

  …

  Beverages, spirits and vinegar.

  The Deputy Chairman: With this Amendment we may discuss Amendment

  1555
  No. 48, in page 5, leave out line 49 and insert:

  Chapter 24 (all headings)

  …

  Tobacco.

  Mr. Pardoe: Amendment No. 47 seeks to fill in Chapter 22 by which the Government propose to exempt only two items, vinegar and substitutes for vinegar. I propose to include in the exemption all the items in Chapter 22 beverages, spirits and vinegar. I am not frightfully enamoured of the idea of flooding the country with imports of alcohol and smokes, but, of course, I am in favour of as free a trade as possible. I am extremely concerned about the effect that this Measure might have on the competitive situation, particularly in relation to tobacco.
  For some time some of us have followed events with anxiety. The situation might be slightly better now than it was a year ago largely because of the advent of Americans to this field, but to a large extent there is a monopoly situation. I have always believed that any form of protection in a monopoly situation can only exacerbate that situation. That is why I have tabled Amendment No. 48. It seeks to include all forms of tobacco in the exemption list, not only unmanufactured tobacco.
  I should like to know why vinegar is to be included in the exemption and not any other item in the group. Perhaps the Government are unaware that it is perfectly possible to make a quite tolerable form of vinegar from cider from the West Country. I hoped that I would get the support of apple-eating members of the Conservative Party in this matter. I do not see why it is necessary to exempt this one item while excluding all the others.
  4.45 p.m.
  I turn to a particular problem which I should like the Government to clear up. It is in relation to Guinness brewing in the Republic of Ireland. It was reported in the Sunday Times on 24th November that Guinness was preparing to change its distribution pattern as a result of the Bill. I wonder whether the Government have made investigations into this. It was suggested that the firm would ensure that its export markets were supplied from its Dublin brewery and its home markets exclusively from the Park Royal
  1556
  Brewery, in London. If that is the case the Bill would have an adverse effect on our exports, but increase exports from the Republic of Ireland. I imagine that the Government have had discussions with the Prime Minister and other Ministers of the Irish Government and probably with the Guinness brewing firm. I hope that they will be able to give us a satisfactory answer on this matter.
  Wines and spirits have been subjected to 12 different adverse duty changes since July, 1961. This latest Measure merely adds insult to injury for the industry. In this field probably more than in others many importing merchants are working large turnovers on very small capital. This Measure will make it extremely difficult for them. The scheme is scheduled to last for a year, but people in this trade tend to stock up in August, September and October for the Christmas period. It will be very difficult for them to build up heavy stocks next year at that time and the Christmas trade will be seriously affected as a result.
  The Minister of State, Treasury (Mr. Dick Taverne): In dealing with the various Amendments proposed to this Schedule, the Financial Secretary and I inevitably face a somewhat distasteful task. That is not because we do not believe in the Bill, but for two reasons. In the first place, as an hon. Member said in the last debate, these will be occasions for special pleading, by which I do not mean that the cases are undeserving, but that special cases are put forward which at first sight will appear deserving.
  Secondly, in dealing with the Schedule we have to face the fact that it is quite impossible to make a wholly logical division of what is exempt and what is not or one which altogether avoids anomalies. In formulating the Schedule, we have tried to avoid undue interference with commerce and industry and to secure the maximum coverage so that there will be the maximum effect on the volume of imports and on the credit restriction scheme. Because of that we have exempted food, fuel, unmanufactured raw materials and certain crudely processed materials. There will still be anomalies because of the balance in keeping the cover as wide as possible and yet preserving the categories.
  While one has sympathy with the trades which are affected by these Amendments

  1557
  and the fact that the importers concerned see other importers who do not have to find the deposit, I do not see that any special anomaly arises. The major Amendment deals with beverages and spirits and all the headings under Chapter 22. These are obviously not foodstuffs, although I understand that for some reason which I cannot explain vinegar is and always has been regarded as a foodstuff.
  Obviously, wines, beer and spirits, which are the main categories affected, are not foodstuffs. If they were to be exempted, a very wide category of goods would be exempted. In fact, despite the injuries, to which the hon. Member referred, which are supposed to have been caused to the wine trade since 1961, the fact remains that the consumption of wines has been rising sharply. In 1965, we consumed just under £30 million worth, in 1966, nearly £31 million, and this went up considerably to over £35 million in 1967.
  On the basis of the first nine months of the present year, consumption is nearly one-third up on 1967. So it is not as it the trade has suffered because of these impositions. Considerable totals are involved. During the first nine months of this year alone, over £32 million-worth of wines was imported. For beer, the total is £9 million and for spirits, over £14 million. So this would be a wide category of exemption.
  The hon. Member asked what the effect would he on distribution, for example, of Guinness. I cannot tell him the exact effect in every individual category, but the Financial Secretary and I have explained the likely overall effect of the scheme. But it would be rash to give forecasts about particular quantities for the actual import saving achieved.
  The second Amendment refers to manufactured tobacco. There is comparatively little manufactured tobacco imported. Imports last year were over £86 million-worth of unmanufactured tobacco, while, for manufactured tobacco, the figure was just over £3¼ million. But this is not an anomaly. Manufactured tobacco is clearly outside the basic categories to which the exemptions apply. I can see no particularly good reason for giving a special exemption to manufactured tobacco.
  1558
  As to the monopoly argument, as my hon. Friend said, this is not, in purpose, a protectionist Bill, and the hon. Member, to some extent, answered this himself when he said that there is no longer a monopoly situation in this country.
  Amendment negatived.
  [Mr. JOHN BREWIS in the Chair]
  Mr. Dudley Smith: I beg to move Amendment No. 91, in page 6, line 6, at end insert:

  Chapter 28

  …

  Inorganic chemicals.

  Any item at present exempt from duty under the Import Duties Act 1958.
  The Temporary Chairman (Mr. John Brewis): It would be convenient to discuss, at the same time, Amendments Nos. 49, in page 6, leave out lines 7 to 13 and insert:

  Chapter 28 (all headings)

  Inorganic chemicals; organic and inorganic compounds of precious metals, of rare earth metals, of radioactive elements, of isotopes.

  No. 119, in page 6, line 8, at end insert:

  28.03

  …

  Carbon, including carbon black anthracene black, acetylene black and lampblack

  No. 108, in page 6, line 9, after 'selenium', insert 'helium'.
  No. 50 in page 6, line 9, after 'tellurium', insert 'and phosphorus'.
  No. 51, in page 6, line 13, at end insert:

  Chapter 29

  …

  Organic chemicals.

  No. 52, in page 6, line 13, at end insert:

  Chapter 30

  …

  Pharmaceutical products.

  No. 54, in page 6, line 13, at end insert:

  Benzene, Cumene, Cyclohexane, and mixed Xylenes within 29.01.

  No. 74, in page 6, line 13, at end, insert:

  29.35 Furfuraldehyde

  Heterocyclic compounds; nucleic acids.

  No. 92, in page 6, line 13, at end insert:

  Chapter 29

  …

  Organic chemicals.

  Any item at present exempt from duty under the Import Duties Act 1958.

  Chapter 30

  …

  Pharmaceutical products.

  Any item at present exempt from duty under the Import Duties Act 1958.
  No. 100, in page 6. line 13, at end insert:

  9.201

  …

  …

  Ethyl benzene.

  No. 103, in page 6, line 13, at end insert:

  28.52

  …

  …

  Rare earth chlorides within 28.52.

  No. 105, in page 6, line 13, at end insert:

  28.12

  …

  …

  Boric oxide and boric acid.

  No. 109, in page 6, line 13, at end insert:
  Calcium carbide, within 28.56.
  Dicyandiamide, within 29.27.
  No. 110, in page 6, line 13, at end insert:
  Calcium hydrogen orthophosphate, within 28.40.
  No. 112, in page 6, line 13, at end insert:

  28.27

  …

  …

  Lead oxides; red lead and orange lead.

  No. 117, in page 6, line 13, at end insert:

  Magnesium chloride within chapter 28.30.

  Magnesium sulphate, calcined. anhydrous within chapter 28.38.

  Crude thorium and yttrium salts within chapter 28.52.

  Propylene tetramer within chapter 38.19.

  No. 133, in page 6, line 13, at end insert:

  28.12

  …

  …

  Boric acid.

  28.46

  …

  …

  Sodium borate.

  No. 56, in page 6, leave out lines 14 to 25 and insert:

  Chapter 31

  …

  …

  Fertilisers.

  No. 57, in page 6, leave out lines 26 to 28 and insert:

  Chapter 32 (all headings)

  Tanning and dyeing extracts; tannins and their derivatives: dyes, colours, print, varnishes, putty, silks, stoppings, inks.

  No. 138, in page 6, line 34. at end insert:

  35.05

  …

  …

  Dextrins and dextrin glues; soluble or roasted starches; starch glues.

  No. 120, in page 6, line 46, at end insert:

  38.09

  …

  …

  Wood tar; wood tar oils (other than the composite solvents and thinners falling within heading 38.18) wood cresote; wood naptha; acetone oil.

  No. 122, in page 6, leave out lines 47 and 48 and insert:

  38.19

  …

  …

  Chemical products and preparations of the chemical or allied industries (including those consisting of mixtures of natural products) not elsewhere specified or included; residue products of the chemical or allied industries not elsewhere specified or included.

  and No. 121, in page 6, line 48, at end insert:

  38.15

  …

  …

  Prepared rubber accelerators.

  Mr. Smith: Amendment No. 91 has been tabled by my hon. Friend the Member for Liverpool, Garston (Mr. Fortescue) and myself and together with it is Amendment No. 92, dealing with organic chemicals. The idea is that we should seek to get the Government to exempt those items at present exempt from duty under the Import Duties Act, 1958—both inorganic and organic chemicals—which are vital to the British pharmaceutical industry. We wish to call attention to the effect which the Bill will have on the National Health Service.
  I must declare an interest, because I am associated with a British pharmaceutical company, but this is not a case of personal special pleading, because my own company, although it would be affected marginally and irritatingly, will not be so severely penalised as many others. On the other hand, I hope that other aspects of the subject will be dealt with by my hon. Friends.
  Mostly, imported inorganic chemicals are used in proprietary or "over-the-counter" medicines, which are very important for general practice and self-medication, but they are, perhaps, not so important as organic chemicals, which are the raw materials for prescription medicines and are used in life-saving drugs. So far as the purpose of the deposit scheme is to reduce the level of imports, essential medicines should be exempt. I should have thought that lifesaving drugs are in a special category. Food is exempted, so surely these drugs should be.
  It is necessary to establish at the outset that an important category of prescription drugs, of ingredients which are used in those drugs, and of things which are called intermediates, which are raw

  1561
  and semi-processed materials, are not manufactured in this country and cannot be at short notice. Many of these are outlined in Chapter 29 of the 1958 Act. These are not irrelevant drugs. We all know that certain drugs can be used for a number of conditions, but the drugs which we seek to exempt are not those which are used for neurotics or hypochondriacs. They are front-line medicines in the war against disease, fighting pneumonia, bronchitis, heart disease, diabetes, all killers in their own right, which have been overcome by the advances made by medical science over the last decade or so.
  These drugs must be available on prescription. They are needed in hospitals and in any home where illness strikes suddenly. Nothing can be gained by placing obstacles in the way of imported goods and materials needed for the maintenance of public health.
  As to the sheer economics, it could be argued that there will not be severe hardship to the substantial large companies and that they will learn to live with this, but creating difficulties in the confident expectation that they will be surmounted surely makes their task all the harder. In the long term, this can only raise the price of drugs, of which the Government are, allegedly, so conscious. Any move in that direction is to be deprecated, when firms can have no real control over the issue. Vital drugs must be available if they are prescribed and it is dangerous and irresponsible to put obstacles in the way of an essential service like this.
  It has been said many times in these debates that industry will face additional expense, yet other burdens are being imposed by this Government. The pharmaceutical industry is about to learn to live and co-operate with the Medicines Act, a very complex Measure which will require a great deal of time and trouble on their part. The industry has, I think, probably more rules and regulations to cope with than most others, yet it has to combat also this legislation.
  It is not as if the industry does not contribute to our balance of payments position. It is generally admitted that it has an excellent export record. A recent published analysis of British-based companies shows a 97 per cent. rise in their favourable balance of payments. In
  1562
  fact, export values rose from £18 million in 1963 to £35 million five years later. Many of these exports were achieved with material which had to be imported before being re-exported. This is material either not easily available in this country or not available at all.
  An example which comes to mind—and the only example which I shall give from my own company—is that of camphor, which is an essential ingredient of semi-synthetic penicillin and vital to the side-chain effect of semi-synthetic penicillin. This material has to be imported, whether we like it or not. In view of the export performance of the industry, it is entitled to special consideration in determining whether these charges should be imposed.
  5.0 p.m.
  The principle that certain drugs or their ingredients must be imported because they are not manufactured or otherwise available here has been recognised for a long time, for example, by the grant of exemption from duty under the Import Duties Act, 1958. Many items are listed in Chapters 28, 29 and 30 of that Act.
  May I give one example of how two companies in this country will be affected by this new proposal—and I emphasise that I am not connected with either of those companies. These two substantial firms are concerned in imports of raw materials and partly processed substances for use in the manufacture of drugs in excess of £200,000 per annum. These are materials used exclusively in the very latest and most modern drugs to fight tuberculosis. It is essential that these materials be imported.
  The Financial Secretary said last night that one of the principles behind the Bill was to make people think again about importing. If he or I were unfortunate enough to be striken down with tuberculosis, the last thing that we should want would be for the firms concerned to have second thoughts about the importation of these materials.
  Mr. Harold Lever: When I spoke about thinking again, I meant thinking again about the extent of the importation so as to economise as far as possible and keep the imports to a minimum necessary for the reasonable and efficient

  1563
  conduct of the business. I did not say that they should think again whether they should import at all in relation to vital chemicals of this kind.
  Mr. Smith: I assure the hon. Member that both these companies are reasonable and efficient already and do not import more material than they need. But as the demand rises in the fight against illness, surely these imports will rise. But they do not waste these materials on profligate exercises. These materials are essential and are required urgently.
  The cost of drugs is constantly under discussion, although the pharmaceutical industry has proved conclusively that the cost of drugs made under the National Health Service is not unreasonable. Despite the fact that it has a captive customer in the Health Service and that from time to time there is a good deal of political controversy about it, by and large it has learned to live with the Health Service, and we hope that it will continue to do so.
  If the Bill is passed, it will be a deliberate act by the Government to put up the cost of drugs—a subject about which they allege they are concerned. Do the Government want to reduce the imports of the pharmaceutical industry? If so, this is a potential danger to the Health Service and an even greater danger to those who are seriously ill. Surely, in the name of common sense, prescription medicines and the materials associated with them ought to be exempt. I ask the Financial Secretary to give the Amendment serious consideration and to see whether he can accept it.
  Mr. Tim Fortescue: I rise to support my hon. Friend the Member for Warwick and Leamington (Mr. Dudley Smith) and, in particular, his remarks about the effect which these import deposits will have on the cost of drugs.
  It was only the day before yesterday that I pressed the Secretary of State for Social Services, at Question Time, about the basis on which calculations were made for dispensers' reimbursement fees, and he assured me firmly that what had to be taken into account was the cost of the National Health Service as well as the balance-of-payments situation.
  1564
  Under this Bill, this is not being done. My hon. Friend made that point eloquently enough, and I wish, therefore, to examine how the Schedule of exemptions has been compiled and the principles which have been put into practice in compiling it.
  On Second Reading, on 28th November, the Financial Secretary said that the import deposits would be charged on
  "all goods other than basic food, feeding stuffs, fuel and raw materials."—[OFFICIAL REPORT, 28th November, 1968; Vol. 774, c. 749.]
  Basic food and fuel are easy to define, and by and large on these items the Schedule has carried out what the Financial Secretary said, but to try to work out the principle on which the draftsman of the Schedule worked when deciding what is and what is not a raw material is very difficult indeed, until final enlightenment finally comes.
  I should like to ask the Committee to look at the Schedule of exempted goods for a moment, to make the point a little better. Page 5 is more or less in line with what the Financial Secretary said with respect to basic food and fuel. But on page 6 we begin the anomalies. In line 14 we have an exemption for guano. I accept that there was not much difficulty in deciding whether guano was a basic raw material, but it is not exactly what the Financial Secretary gave us to believe on Second Reading would be the kind of material exempted. Lower down the page we have exemptions for
  "casein, caseinates and other casein derivatives".
  Casein is by no means a raw material. It is a derivative of milk. But not only is casein to be exempted; derivatives of casein are to be exempted, too. None of these can be called raw materials in the true sense of the word.
  The next item is
  "Albumins, albuminates and other albumin derivatives".
  Next we have a complete anomaly, "exposed film and plates". Later, we have "natural rubber", which one accepts is a basic raw material, but the next item is "reclaimed rubber", and that moves right away from the principle which the Financial Secretary announced on Second Reading. I will not continue through the Schedule, because I have made the point sufficiently.

  1565
  Where is the demarcation line, to quote a term from another discipline, which the draftsman has used? Clearly, the exemption has not been limited to basic raw materials in the literal sense, such as ores, or materials in the natural state, or unwrought metals. Who has decided, and how has he decided, which other products can be included in the list of exemptions? Who did it and how?
  Suddenly enlightenment comes, because in the Schedule to the Finance Act 1964, which the Government introduced almost immediately they came into power, we find provisions identical with the Schedule to this Bill, being carried in the Bill only by the Amendments made to that Schedule in the debate in December, 1964 and later. All that has happened is that the provisions for import deposits—which, we must remember are not customs duties, as was made clear to us by the right hon. and learned Gentleman the Attorney-General, carry, by a strange coincidence, exactly t le same list of exemptions as the 1964 import surcharge, which was a Customs duty. This is the principle, if it can be called a principle, which the Government have followed.
  To make the point perhaps even more exact, I will refer to Amendment 74, which stands in my name and is being discussed with this group of Amendments. It proposes exemption for a product known as furfuraldehyde under the heading "heterocyclic compounds and nucleic acids". As is well known, furfuraldehyde is a product made from distilling cereal bran or corn cob waste with sulphuric acid. It can be made economically and in quantity only where there are large amounts of these waste materials or cereals fairly near a major seaport, otherwise it would be impossibly expensive. It is not made in this country. Some time ago, it was not even imported, except in a stage of processing known as furfuryl alcohol.
  About six years ago, however, a large firm in this country, with which I am connected—and here I declare an interest—at the expense of about £350,000 built a plant so that this bulky and basic raw material could be imported in the form of furfuraldehyde and furfuryl alcohol manufactured here from it.
  Furfuraldehyde is an essential element in the preparation of castings for the
  1566
  steel and motor industries, among others. Without furfuryl alcohol, from which furin binders are made, these industries could not use their present advanced and highly efficient techniques. It is a basic raw material for them and also as a solvent in oil refining. Indeed, the oil refining industry would soon grind to a halt if it were not available.
  During the Committee stage of the Finance Act, 1964, the then Financial Secretary stated, on 2nd December 1964, that furfuraldehyde is not a basic raw material. He said:
  "Furfural is prepared by distilling cereal bran with sulphuric acid. It is, therefore, itself a processed product and we come up against the difficulty about the heading under which it falls."—[OFFICIAL REPORT, 2nd December 1964, Vol. 703; c. 531.]
  It was said then and is presumably still said, because furfural has not been included on the exemption list, that, because the product has been through one process in its country of origin, because cereal bran has been distilled with sulphuric acid to make furfural for further processing after it gets here—
  Mr. F. A. Burden: On a point of order. While we have become accustomed to the fact that the benches opposite are empty, would it not be a good thing if the Financial Secretary were to recover from his apparent sleep so that he could listen?
  Mr. Lever: Further to that point of order. Is it not quite ridiculous for the hon. Gentleman to make any such allegation that I am not listening intently? I was up until a late hour last night and there is no reason why I should not close my eyelids even at the cost of temporarily depriving myself of the spectacle of hon. Members opposite.
  Mr. Burden: I apologise.
  Mr. Fortescue: I am sorry that my eloquence has made the Financial Secretary sleepy. I accept his explanation fully. I, too, was up until a late hour and feel much as he does.
  As I was saying, furfural is an important raw material for major industries and yet it is not quite a basic raw material under a recent definition, and it is not exempted under the Schedule. But many other derivatives from basic raw materials have specifically been so exempted. I have quoted some of them.

  1567
  The Financial Secretary should look again at this substance, furfuraldehyde. There are hundreds of other cases. This is but one example, of such raw materials which are not made in this country, which cannot be made here and which have temporary exemption under the Customs Tariff, 1959, but which are not specifically exempted in the Schedule. I am sure that he will see that this is an anomaly. He would not wish to have anomalies in the Schedule which would be of direct disadvantage to our export trade.
  5.15 p.m.
  Mr. Burden: I am glad to know that, when the Financial Secretary closes his eyes, it is merely that he is listening with them closed, and is not asleep. We all had a very late night and sympathise with him. But I hope that he will be more forthcoming on this Amendment than the Government have been on others so far. They have not given way on a single Amendment yet. I am not surprised that the benches opposite have been so empty, because there is no great enthusiasm for the Bill among hon. Members opposite.
  In asking for pharmaceutical products to be exempted, it might be pointed out that, inevitably, the import deposit will increase the prices and the difficulties of some smaller firms, although, as has been said, this will not he nearly as much the case in the pharmaceutical industry as in some other cases.
  It seems extraordinary that the Government should wish to increase prices of pharmaceutical products, but they will do so by the Bill. They will increase the prices and mop up liquidity in the industry. The National Health Service is our biggest user of pharmaceutical products and it is extraordinary that the Government should intentionally impose a restriction through import deposits which will make it more difficult to import them.
  In any event, it is unlikely that there would, to any great extent, be importation of these products unless they can be made better abroad and probably more cheaply. Perhaps they have a feature about them that companies in this country cannot produce.
  1568
  If that is the case, perhaps the hon. Gentleman can tell us to what extent imported pharmaceutical products are used in the Health Service. This is a relevant point. If he cannot go all the way and agree that pharmaceutical products should be excluded, perhaps he can at least agree to considering exempting those which are necessary for the Health Service and which are used widely by doctors and hospitals.
  Knowing the hon. Gentleman, I am sure that he will give consideration to this, because he is the last person who would wish to put any premium on human life or well-being. When dealing with pharmaceutical products we are dealing in many instances with products vital to the maintenance of human life and health. I hope that he will look at this from that point of view.
  Mr. Blaker: I wish to mention only one case, which is the subject of Amendment No. 103, which stands in my name. That case illustrates the arbitrary way in which the Schedule as it stands will work. I have a letter from a firm of electro-metallurgists in the constituency of my hon. Friend the Member for Ton-bridge (Mr. Hornby), which, among other things, is a contractor to the Government. It makes cerium mischmetall alloys. It has to import several hundred tons a year of raw material known as rare earth chlorides. I find it difficult to imagine a raw material which is more raw than that. Yet, as the Schedule now stands, the import deposit will be payable on that raw material.
  I therefore hope the Government will look again at this case. The firm believes that the substance is wrongly classified and should be under 25. 32(c)—other mineral substances. Had it been there, it would have been exempt under the Order. It may be possible to reclassify the substance, but assuming that that cannot be done, as I must for the purpose of my argument, I hope that the Government will be able to examine the case.
  Mr. James Scott-Hopkins: My hon. Friend the Member for Liverpool, Garston (Mr. Fortescue) put his finger on our difficulty with regard to partly-processed materials which are used by certain industries as raw materials. My Amendment No. 100 refers to ethyl benzene, a partly-processed

  1569
  product which is used as a basic raw material in the manufacture of synthetic rubbers, polystyrenes, and so on. As it is not available in quantity in this country it has to be imported. I understand that a plant will be coming on stream at the end of the coming year but, in the interim, the material has to be imported. It is vital to the synthetic rubber industry, and here I must declare an interest.
  The Financial Secretary said that the problem with this type of raw material was one of stockpiling, and that that was why he did not want to have any wide loopholes in the Schedule, but I urge him to give further consideration to exempting a material used to such a large extent as this is. When the plant now being constructed comes on stream, the industry will not need to import ethyl benzene, and will be able to get it more cheaply than the imported article. I therefore ask the hon. Gentleman to look with sympathy at my Amendment.
  Mr. Emery: Amendments Nos. 119 to 122, in my name and that of my hon. Friend the Member for Harrow, West (Mr. John Page), are concerned with basic raw materials. I ask the Committee to consider for a moment the whole Government concept of exceptions from the list of basic raw materials. During the Second Reading debate on the second Finance Bill of 1964, the Labour Chancellor of the Exchequer said:
  "The phrase 'basic raw materials' has been used in a generally descriptive sense. We have not attempted to apply it with precision because, obviously, there are many opinions about what is a raw material."
  The right hon. Gentleman went on:
  "… we have adopted as a guide the general principle that materials which have undergone only elementary processing should be exempted."—[OFFICIAL REPORT, 24th November, 1964; Vol. 702, c. 1096.]
  It was not just one process, but elementary processing. The materials we name are necessary raw materials of production, and this is particularly so with 38.19—chemical products. Here, we are attempting to exempt raw materials which are basic to a hundred and one industries—if I were to give all the relevant examples, the Committee would be sitting all night. The imported chemicals range from synthetic detergents right through to the whole carbon system of chemistry which is an integral part of our chemical
  1570
  industry running into many tens of millions of pounds.
  The import deposit on these chemicals will increase the raw material price by 2½ per cent. I cannot believe that that is what the Government want to do, as it is contrary to the whole policy enunciated by the Financial Secretary's right hon. Friend the "Minister of Production and Efficiency", or whatever it is—the old Ministry of Labour: though there is not so much efficiency.
  We are faced here with the Government purposely changing their mind for no apparent reason other than liquidity. Basing themselves on that argument, the Government have set their minds against allowing the exemption of what to a very large section of British industry must be considered raw materials and which fall within the definition used by the former Socialist Chancellor of the Exchequer in that debate in 1964.
  What concerns me is that in 1964 the late Mr. Edward Redhead, who was then Minister of State, Board of Trade, gave us an assurance when dealing with similar Amendments relating to Chapter 39. He referred to his right hon. Friend the Chancellor of the Exchequer as having said:
  "I shall, of course, always be ready to consider any similar glaring anomalies which hon. Members may alight upon."
  Then he went on:
  "… we will give most earnest consideration to any further representations that are made. We will examine them. I am not to be construed as committing myself on any specific instance, but I want it to be clear that this is not the last word until such time as there will be a general review … ".—[OFFICIAL REPORT, 2nd December, 1964; Vol. 703, c. 553.]
  I do not know what happened about that general review, but it is only too clear that nothing ever came out of it. Amendments we tabled obtained no alleviation at all during two years of the surcharge. The Government must now rectify a position which continues their former errors in connection with such chemical products as carbon, carbon blacks and rubber accelerators—all essential as raw materials in tyre production.
  If the Government do not accept these Amendments, they are not looking either clearly or sensibly at the situation. I

  1571
  do not in any way wish to detract from the most excellent speech of my hon. Friend the Member for Warwick and Leamington (Mr. Dudley Smith), but his is a natural appeal because it affects health. My Amendments have nothing emotional about them—they only concern ordinary raw materials needed by a section of industry.
  5.30 p.m.
  Mr. Geoffrey Hirst: As one who, like the hon. Gentleman, took a considerable part in those debates, I may say that, not only did nothing come out of that review but, although I made dozens and dozens of representations about chemicals, not one concession was granted afterwards, which is why exactly the same chemicals are now mentioned.
  Mr. Emery: I am delighted to have been reinforced by the hon. Gentleman. I remember his powerful speeches in 1964; in fact, I have just been reading one of them.
  What purpose can the Government have in trying to push up the costs of the raw materials of this section of industry? To do so does not in any way assist to keep down industrial costs. The Government would do well to show that they have had second thoughts and will not continue the anomalies of 1964 into the Bill.
  Mr. Derek Page: In general, I should like to support what has been said by the hon. Member for Honiton (Mr. Emery) about Amendment No. 92. These chemicals are unquestionably raw materials to the industry, particularly those chemicals which are not made in this country and which are, therefore, in general, exempt from duty. They cannot be considered as anything but raw materials. I understand that about £180 million' worth of these duty-exempt chemicals are imported, and we simply cannot do without them. If they are available in this country, they are not available in anything like sufficient quantities.
  A number of examples have been mentioned. I could add to the list ad infinitum—vinyl toluene, which is a tremendously important raw material for the paint industry and without which modern paints cannot be made, ethylene
  1572
  diamine, cyanuric acid, which are duty-exempt and not produced in this country, and many others. During recent months, there have been considerable imports of sulphuric acid and styrene monomer. No one could regard these as consumer goods on which there ought to be a clamping-down. They are raw materials for one of our giant exporting industries to the costs of which, as has been said, about 2½ per cent. will be added by the Bill.
  When a company is placing orders for these imports, it is impossible for it to know what proportion of these chemicals will be used in producing other chemicals for export, but what is certain is that a very high proportion will be used in the production of exports. The production of bulk chemicals is a highly price-sensitive industry. I have one example produced by a company in my own constituency which uses 1·4 tons of imported material to produce every ton of final product. This provision will mean a considerable increase in the cost of the exported product.
  What should be kept out are the imports of products with high profit margins, to which an increase of 2 or 2½ per cent. will not mean anything. Price competition in the sale of bulk chemicals is extremely keen and an increase of 2, 2½ or 3 per cent. in the cost of vital raw materials could lose us tens of millions of pounds of exports. It is a catastrophic mistake not to exempt chemicals which are duty-free, which implies that they are not produced in this country.
  The import surcharge of 1964 has already been mentioned. On that occasion, there was finally a concession which resulted in duty being rebated on that proportion of the imports used to produce chemicals for export. However, that is not sufficient in this case, because the damage will have been done by the extra charges.
  Sir Gerald Nabarro: With the import surcharge between 1964 and 1966 drawback was granted, which means that when an imported material found its way eventually into an export, the amount paid in respect of the import surcharge was refunded to the exporter. But that, I understand, is not possible with all the chemicals which we are now discussing.
  Mr. Page: That is what I was trying to point out. The concession which was made with the import surcharge is simply not possible on this occasion. However, as the concession was made for chemical exports on that occasion, we have every right to expect the Government to make an adequate concession in this case, and the only concession possible is exempting those chemicals now free from import duty.
  A number of chemical companies have already pointed out to me that foreign suppliers in general are offering to extend credit for up to six months, but this, of course, means that they are adding to their cons and, therefore, pushing up their prices a little. The net result will be not to cut down on imports, but to inflate our own costs and that will adversely affect the balance of payments. There is a rock-solid case for exempting these genuine raw materials.
  Mr. Nigel Fisher: I must apologise for coming into the Chamber late. I had not realised that the debate had started and I therefore missed the speech of my hon. Friend the Member for Warwick and Leamington (Mr. Dudley Smith). I should also declare an interest as a director of a group of pharmaceutical companies. I want briefly to return to the argument which my hon. Friend must have deployed and, I am sure, powerfully deployed.
  I am concerned not so much with the financial as with the medical aspect. Because of the Bill, my own group of companies will have to lock up at least £250,000, and perhaps, more which could otherwise be productively used. I do not claim that we cannot make that money available; of course, we can, although some smaller firms may not be in that position. This may be a serious matter for smaller firms who may not be able to find the cash and, if they cannot bring in their imports, a drug which they are manufacturing may not be made or may not be made in the same quantity. That might mean that patients in need of the drug would suffer in health as a result of the Bill.
  Inevitably, the price of some pharmaceutical products will be increased, which is bad enough. The prices of our exports may well have to go up, which
  1574
  will not help to sell them, and that may have a bad effect on our balance of payments and export position. My own group exports about 62 per cent. of everything we produce and holds the Queen's Award for Industry for so doing. However, it is the medical case which is much more important and more serious than the financial case or the export case or the balance of payments case.
  If they are unobtainable in this country, ingredients for important and essential medicines should be exempt from the Bill. We have all known the Financial Secretary very well for many years as a man of heart and imagination. Whether he was asleep earlier in the debate I neither know nor care, because I have a great respect for him. I make a direct personal appeal to him on medical, not financial, grounds seriously to consider whether he cannot exempt the whole pharmaceutical industry from the Bill; but, if he cannot do that, at least to think seriously about the exemption of important and essential medicines, the inclusion of which may be prejudicial to the health of some patients.
  Sir Arthur Vere Harvey: Perhaps I should say that I am interested in the fine chemicals industry, but I shall speak on this occasion on behalf of two large pharmaceutical companies in Macclesfield, one British-controlled and the other foreign-controlled.
  As my hon. Friend the Member for Surbiton (Mr. Fisher) said, it cannot be the Government's intention to affect the health of people, but there will inevitably be serious consequences for the pharmaceutical industry if the Bill remains unamended. I have never spoken about this industry during the last 12 years, but I must do so now on behalf of my constituents. The industry, which is about 60 per cent. foreign-controlled, exports 56 per cent. of its output. No one wants to impair that performance. It is essential that the industry should maintain its export effort.
  My concern is principally directed to the special ethical drugs which are of such value nowadays. One thinks, for example, of the drugs which relieve high blood pressure, bringing the blood pressure of a man of 60 down to that

  1575
  of a boy of 18 in a matter of days. The medical authorities running our mental hospitals would tell the Financial Secretary that beds are being emptied as a result of the proper use of drugs nowadays. The patients who once suffered for years are now able to do a useful job in the community.
  Many firms, no doubt, will be able to raise the money to cover the 50 per cent. deposit for 180 days. But that is not the point. What matters is that costs will go up for the consumer and for exporters, too. If foodstuffs are to be imported free of the charge, there is a strong case for exempting these special drugs, also. I agree with my hon. Friend when he says that the Financial Secretary is a warm-hearted man. We are sure that he will give these Amendments favourable consideration.
  Mr. John Page: My great anxiety is to improve the credibility of Government policies and to help hon. Members opposite—
  Mr. Patrick Jenkin: I admire my hon. Friend's fortitude in taking on such a Herculean task, especially at a time when the Evening Standard poll shows the Tories leading the Government by 27 per cent.
  Mr. Page: My hon. Friend's intervention reinforces the need for all of us who wish to see co-operation between the Government and industry to do all we can to help them in their public relations.
  Anyone engaged in the rubber industry who was told that carbon black—one of the subjects covered by Amendment No. 119—was not a raw material would need one of the drugs to which my hon. Friend the Member for Macclesfield (Sir A. V. Harvey) referred. Carbon black is an absolutely basic raw material for the main manufacturers of the rubber industry, and to pretend that it is not is absurd.
  The Financial Secretary may tell us that, if a large proportion of goods incorporating raw materials not included in the list are re-exported, drawback will be possible. It will be easy to compute such drawback in rubber tyre manufacture, but what about the rest of the industry, which has an export record of £47 million a year? I am speaking of that section of the industry in which the content of car-
  1576
  bon black in the finished product is comparatively small, the section the products of which are incorporated as components two or three stages away.
  It is impossible for an importer to be able to compute the amount of drawback which he should receive, or the amount of import deposit which he would be allowed to underpay. No manufacturer could give evidence of how much of what he makes will be exported, although it is probable that about half the articles made will be exported. Drawback, therefore, does not have a chance in this context.
  Let the Financial Secretary say in plain terms, "We have made a mistake this time. Obviously, carbon black is a basic raw material, and it shall go on the exemption list".
  5.45 p.m.
  Mr. Pardoe: I have put my name to five of the Amendments which are linked to the main Amendment now being discussed, and those Amendments would affect chemicals, both organic and inorganic, pharmaceutical products, fertilisers, tanning and dyeing. Most of the points have been covered, but one or two still remain to be raised.
  First, fertilisers. Certain groups in the fertiliser chapter are exempted. It all seems very complicated, and I should like the Financial Secretary to tell us, if he can, what is the value of imported fertilisers left out of the exemption list. On the face of it, it appears that virtually all fertilisers have been exempted, and I see no point in making the few distinctions which have been made. What is the value of the distinction?
  Second, phosphorus. I cannot tell whether phosphorus has been exempted or not.
  Mr. Harold Lever Mr. Harold Lever indicated dissent.
  Mr. Pardoe: In that case, I appeal that it should be.
  I hasten to say that I have no financial connection whatever with any company interested in any of the five Amendments to which I have put my name, which makes me almost a pauper in the House, I suppose. But I cannot see how any business can be expected to conduct its long-term investment planning if it is to be subjected to this kind of change.

  1577
  Albright and Wilson, a company in my constituency, finding that production costs of phosphorus were much lower in Newfoundland, primarily because of the sources of cheap power there, invested heavily in phosphorus production in Newfoundland. Now, however, the company will have to find about £1 million in this respect alone. The Government ought to give way on phosphorus. It is a basic raw material, and a large proportion of what we use here has to be imported. It is a special case, and I hope that we shall be told that the Government are prepared to reconsider their decision.
  Sir G. Nabarro: In the case of dutiable imports of partially manufactured chemicals—the point I raised in an intervention during the speech of the hon. Member for King's Lynn (Mr. Derek Page)—will the duty be refundable to the exporter when the goods imported are embodied in the export together with any element of cost arising from the imports deposit scheme, or will the refundable part be only in respect of the import duty and no part of the cost in respect of the import deposit scheme? Will the Financial Secretary answer that question when he replies?
  Mr. G. B. Drayson: The first item covered in Amendment No. 119 is carbon. There could not be a more basic element than carbon. My chemistry is a little rusty now, but I suggest to the Government that, if all elements, as opposed to compounds, were put in the exemption list—including, no doubt, the precious metals—the whole thing would be made much simpler.
  Mr. Patrick Jenkin: It would be right if I were to make a few comments to draw together the threads of the powerful case made by my hon. and right hon. Friends on this first major group of Amendments.
  It is perhaps right to point out—I am not sure whether this has been referred to in the debates—that the Schedule as it stands is identical with the Schedule relating to the temporary surcharge when that surcharge came to an end. A number of additions were made while the temporary surcharge was in force, but what we have in the First Schedule to
  1578
  the Bill is what was left at the end of 1966 when the surcharge ended.
  We are indebted to my hon. Friend the Member for Warwick and Leamington (Mr. Dudley Smith) for the manner in which he opened this debate and for the way in which a number of my hon. Friends have widened its scope and brought out the very critical and difficult problems which this group of Amendments poses in relation to a Bill of this sort. When one comes to chemicals and the various materials related to them, one comes to a sector which, on the basis proposed by the Government, poses problems which are totally insoluble according to any coherent or rational body of principle. The basic feature of the scheme is that raw materials should be exempted, and this sector raises in an acute form the question: what is a raw material?
  The Government's answer as embodied in the Bill is this. They take the whole of Chapter 27 of the tariff classification—mineral oils, fuels, waxes, and so on—a very few elements in Chapter 28, a number of compounds in Chapter 28, a few basic chemicals and mixtures of such chemicals in Chapter 31 and a few isolated materials in Chapters 32 to 38, mostly but by no means all natural pro ducts. In many cases, they have included—and this is the point at which the questions begin to arise—derivatives of these products—solvents, acids, spirits oils and so on.
  Having said that the test was the same as was applicable for the temporary surcharge, I think that it is helpful to look at what was said by the Government spokesman when comparable Amendments were discussed in December. 1964. The right hon. Member for Islington, East (Sir Eric Fletcher), who was then the Minister without Portfolio, said:
  "In so far as some of these chemicals are manufactured chemicals, they are not eligible for exemption. In so far as they are chemicals in their natural state or only slightly processed, they are eligible for exemption."—[OFFICIAL REPORT, 2nd December, 1964; Vol. 703, c. 516.]
  I am bound to add that that gets us absolutely nowhere. It is a totally arbitrary line derived, as we have seen from the list in the Schedule, from a totally arbitrary system of classification, and the results are entirely arbitrary.

  1579
  I should like to illustrate this point with a number of examples which have not been mentioned in the debate. Taking the test mentioned by the right hon. Member for Islington, East, he described the system and said that it included basic materials and some derivatives but that his task was to draw a line. The Bill mentions, for instance, mineral or chemical fertilisers, potassic. We propose by Amendment No. 110 to add dicalcium phosphate to the list of exemptions. Put in its tariff form, it is calcium hydrogen orthophosphate.
  This is an essential raw material used in the production of animal feeding stuffs. As far as can be seen, it is the only such raw material of any significance which has not been exempted. Furthermore, it is impossible to see any use for this material other than in the production of animal feeding stuffs. Why is it right to include in the list mineral or chemical fertilisers, potassic, and exclude dicalcium phosphate?
  The Bill exempts mercury. There is an Amendment to exempt helium. Helium is just as much an element as mercury. It is found in certain mineral formations only in the Western Hemisphere. Every ounce of it has to be imported, and it is an essential import. Helium is an element and so is mercury. Why is helium not to be exempt when mercury is?
  Take silicon, which is a non-metal but is used in the production of metallic alloys. Compare this with one of the products mentioned in Amendment No. 109, calcium carbide. That is a basic raw material for the chemical industry. It is so basic that, although it is a carbon compound, it is listed, not under Chapter 29, which deals with organics, but under Chapter 28, which deals with inorganics. It is produced by a reaction of coke and lime and, to the lay eye, is indistinguishable from coke, which would be exempt under Chapter 27.
  Calcium carbide is permanently free from duty and is imported from Norway and Yugoslavia. Imports are running at about £1¾ million per annum. It is a basic raw material for the whole of the acetylene-based chemicals. Why is that not exempt when silicon is exempt? One could make the same remarks about dicyandiamide, which is used in the manufacture of certain plastics. The
  1580
  Bill excludes bromine and iodine, which are materials produced by a simple processing of naturally occurring materials.
  In Amendment 117 we mention crude thorium and yttrium salts within Chapter 28.52. These are produced by a simple processing of naturally occurring materials. The same can be said for magnesium chloride and magnesium sulphate. I echo the remarks of my hon. Friend the Member for Blackpool, South (Mr. Blaker). How could anything be more of a raw material than those which he mentioned?
  Chapter 28 requires special scrutiny. Unlike all the other chapters, it is cast in a special form in that it includes basic raw materials and a great many often highly complex derivatives of those raw materials. It is not sufficient to regard it as a chapter full of chemicals which are manufactured products. It includes a large number of basic raw materials, all of which should be included in the Schedule to the Bill.
  I turn to Chapter 29 dealing with the organic chemicals. It is a pure accident of classification that certain of the chemicals in that Chapter are to be found there rather than, for instance, in Chapter 27. Many of them are the first derivatives by relatively simple processing of basic materials which are exempt. Amendment 54 deals with four basic chemical raw materials: benzene, cumene, cyclohexane and mixed xylenes. If they are in a crude state they are classified under Chapter 27, the whole of which is exempt from the import deposit. The fact that they are refined results in the accident that they are to be classified under Chapter 29 and, therefore, come within the import deposit charge. They could just as easily come within Chapter 27.
  These are the basic building bricks of the chemical industry and they are used to make such things as nylon, exports of which are running at about £11 million a year, and terylene, with exports running at about £16 million a year. Similar remarks could be made about a number of other chemicals such as propylene tetramer.
  I hope that I have said enough to show that even by the Government's own test by which they wish to exempt raw materials they have drawn the line in the wrong place. Our case, however,

  1581
  goes further than that. The application of this sort of import restriction to the whole field of chemicals demonstrates the folly of trying to run industry in this way.
  6.0 p.m.
  It has been said over and over again during the debate by many hon. Members that in the chemical industry, one man's product is the next man's raw material. It is equally true, as my hon. Friend the Member for Honiton (Mr. Emery) said, that the chemical industry is. perhaps more than any other, an international industry in which many basic chemicals have acquired the characteristics of being commodities which are widely traded in all over the world.
  There are two consequences of this international trade in chemicals. One is what might be described as the tidal flow. At some periods, it will be country A which has the products and is exporting to other countries. A few years later, country B will have put in the next lump of capacity and will then be making the flow go the other way. The flow follows the pattern of investment. For this reason, it is ridiculous to regard a flow of imports into Britain at any particular time as something which it should be sought to restrict by an import deposit of this sort.
  A second characteristic of this international trade is the growing practice of specialisation. As the hon. Member for King's Lynn (Mr. Derek Page) rightly said, it is crazy to believe that this country could make everything. Of course we could not. We import what other countries make more easily and more efficiently than ourselves and we export hundreds of millions of £s of chemical products which we make more efficiently than, or as efficiently as, anyone else. The Kennedy Round has recently given a tremendous fillip to this international trade in chemicals and it is growing rapidly. A Measure such as this, applied with the sort of discrimination which is necessary to make it tolerable, merely cuts it back.
  In a telling speech, the hon. Member for King's Lynn asked the vital question, on which my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) took him up and which, I hope,
  1582
  the Financial Secretary will be able to answer: what about exports? Here is an industry which is essentially producing intermediate raw materials for dozens of other industries, many of which have substantial imports. As the scheme stands, if these goods are transferred from an importer to a manufacturer who then manufactures and exports the finished product, there is no way in which the duty can be remitted. Indeed, the extent to which there can be a drawback is doubtful.
  Therefore, one is bound to conclude that by putting the import deposit on many of the industrial materials listed in Chapters 28 and 29 and subsequently, one is hitting at exports in a way which is manifestly not the Government's intention. Indeed, it can be summed up by saying that the Government have put forward the scheme on the footing that it is tolerable and acceptable only if exports are exempted from it and if raw materials are exempted.
  The debate this afternoon has shown that the Government have succeeded in exempting neither exports nor raw materials. I have no doubt whatever that the Committee will be justified in demanding that there should be the widest revisions and a substantial increase in the scope of the Schedule to take account of the many Amendments which have to be tabled and which have been ably spoken to by hon. Members, on both sides.
  We shall listen with interest to what the Financial Secretary says. I know that he wants to make the scheme as workable as possible and to do as little damage to British industry as possible. I hope that he will recognise the force of the argument advanced from both sides on this matter.
  [Mr. SYDNEY IRVING in the Chair]
  Mr. Harold Lever: I hope that the Committee will permit me to begin my answer to this long and closely argued debate by expanding a little on some general matter before going into some of the details of the argument.
  The first point that we must bear in mind is that it was necessary for the scheme to make a broad division between those raw materials which have undergone only a relative processing and all

  1583
  other materials. This is why it is not simply basic materials or whatever one calls a basic material. For the purpose of our selection, a basic material became, as far as we could make it, those raw materials which have undergone only elementary processing.
  I ought to say at once that it is impossible to draw the line in a way which will not produce an argument of anomaly wherever it is drawn. We know this all too well. Whether it be in relation to Purchase Tax—and the hon. Member for Worcestershire, South (Sir G. Nabarro) made a great reputation simply from examining the anomalies which resulted from the lines that were drawn in the Purchase Tax regulations—
  Sir G. Nabarro: I hope that the hon. Gentleman does not suggest that my reputation rests on Purchase Tax alone.
  Mr. Lever: I would certainly not be guilty of any such rash implication. I thought that the hon. Member was first in the field in exposing anomalies in relation to Purchase Tax which interested and amused the House, because, as it turns out, wherever the line is drawn there will be difficulty in reconciling in strict logic the articles that are excluded from or included in the benefit or disfavour, as the case may be.
  For example, a very good case has been made for helium. Helium is found in natural gas, from which it is separated by liquefaction. If it were to be separated, there are other elements of gases—oxygen, hydrogen, nitrogen, argon, and so on. I shall not turn this into a chemistry lesson, an area in which I have no special competence, but it can be seen easily that if we were to exempt helium, somebody would say how absurd it was to exempt helium and not hydrogen. if I exempted hydrogen, would be referred to the idiocy of failing to exempt oxygen, argon and a number of other gases. [An HON. MEMBER: "Why not?"]
  Hon. Members must remember that the House, in its wisdom, gave a Second Reading to the Bill in the form in which it was made clear that we were looking to an import effect and a liquidity effect by reason of deposits applied to a range of materials to the extent of £3,000 million a year at the commencement.
  Mr. Derek Page: Helium, for instance, simply cannot be produced in this country. The other things like oxygen and hydrogen can.
  Mr. Lever: If my hon. Friend will wait patiently, I will deal with the point, because he is not the first to raise it. I will certainly not fail to deal with it.
  The first point which I wish to get over to the Committee is that I shall not offer an exposition in chemistry, although I warn the Committee that I am very well equipped by my brief so to do, because what I have done in connection with hydrogen, argon, and so on, I am quite prepared to repeat concerning lanthanum, cerium, precordium, europium, terbium and quite a number of Latin-sounding metals, the point being that if I let in one of these ums or iums there are—
  Mr. Blaker Mr. Blaker rose—
  Mr. Lever: I will give way in a moment—a whole series of urns and iums which would have an equal claim.
  I am in the difficulty that I have to preserve a sufficiency of impact in the Bill to make it worthwhile and to produce the effect that my right hon. Friend the Chancellor intended in introducing it. Does the hon. Member wish to intervene?
  Mr. Blaker: The moment for my brilliant intervention has passed.
  Mr. Lever: I beg the hon. Member's pardon. Had I known, I would have stopped even in mid-sentence.
  That is the first point I have to make, and I accept, from the very able argument addressed to the Committee, that we could make cases in particular areas where logic would seem to suggest possible anomalies as between the treatment of one of these chemicals and some other article which is exempt, but I urge upon the Committee that the approach will have to be practical and not theoretical for the reason which I have indicated. that we must preserve the scheme with sufficient impact and then rely on the power we have, in the light of the working of the scheme, to favour, for example—this is not a hint—helium against hydogen or hydrogen against helium, according to the way the scheme is working in practice and where disruption or excessive interference occurs. So I shall urge

  1585
  the practical as against the theoretical drawing of lines, conscious that I shall be open to logical challenge and conscious that there will be possible argument.
  The next point is that it was essential to make it clear that the scheme is not of a protectionist character; that is to say, that the scheme is not designed to protect home producers against their foreign competitors. Non-availability, therefore, cannot of itself guarantee exemption. If it were clear from the scheme that non-availability were to be the test—in other words, if, wherever we have an article which cannot be manufactured in this country, we did not impose the discipline or intent of this deposit, that we freed it from that discipline—it would be quite clear that the scheme would have a protectionist character seeking to favour home manufactures against domestic imports. If we had done that, it would certainly have been against the spirit of E.F.T.A.—and we know the Opposition, at any rate, would have been very passionately against that—it would have been against the spirit of the Anglo-Irish Treaty and against the spirit of G.A.T.T., and it would certainly have been very difficult to operate consistently with our international obligations. So, as far as materials are concerned, non-availability is not an argument.
  I am sorry to have to keep on repeating it, but hon. Members must realise that non-availability would be a devastating argument if we were imposing an embargo of any kind. We are not. It is an impediment which is being placed, but which cannot be based on the criterion of non-availability.
  The Government are aware that, when the scheme is in operation, additions to the exemptions may become necessary in the light of serious difficulty in important areas—I do not want to discount the anxieties which hon. Members have about possible difficulties which may emerge in particular areas—so serious that the Government would feel obliged to erode the range of impact of the scheme. That we have power to do, and that is why the Bill provides that we shall have power to add to the list of exemptions or to reduce the rate, but not to add to the rate of the deposit. We shall watch the impact of the scheme and we shall be giving attention to cases, such as the
  1586
  chemical industry, with a view to operating one or the other of these powers as the situation may require.
  It is too early at this stage to take decisions about all these individual cases merely upon assumptions as to what the effect will be. Although I greatly respect the very rich range of experience which, in this area, we have seen manifested today, I prefer to act on actuality rather than on assumptions at this stage of the scheme.
  Hon. Members have said that they have had disappointing experience in the past in relation to the tariff situation. There are two points I must make. One is that the tariff situation is not on all fours with this situation. The intent of the tariff was to do something rather different from the intent of this scheme. The kind of difficulties which arose in the case of the 15 per cent. or even the 10 per cent. surcharge were quite different in scale from the kind of difficulties which, I frankly admit, could arise in particular areas in relation to the 50 per cent. deposit scheme.
  So I can only say—this assurance is given not in optimism but in good faith—that that power is not likely to erode the impact of this import deposit but, on the other hand, it is standing ready to do so, if the kind of serious difficulties which some hon. Members seem to fear may occur do, in fact, occur. I again repeat we are not dealing with a tariff or an embargo, but with an impediment, not by any means impossible to overcome, on the importation of goods, and this impediment, we hope, will be for as short a period of time as is necessary. I greatly regret—I repeat this on every occasion, so nobody shall mistake my attitude—the inconvenience which this causes to importers, but the sharper and more effective the impact of this scheme is, the sooner we shall be able to reduce the impediment and relieve the inconvenience.
  6.15 p.m.
  Mr. Dudley Smith: Would the hon. Gentleman say, therefore, why there should be an impediment on life-saving medicines?
  Mr. Lever: This brings me to one of the points made very earnestly by many hon. Members. The hon. Member for Surbiton (Mr. Fisher) put it with great

  1587
  force. I was not quite sure—I know it was very kindly meant when he said he did not care whether I was asleep or not; I still retained his regard—whether that was to be taken as implying that, even asleep, I am sufficiently receptive to logic and argument to be useful for the purposes of the debate, but I can assure hon. Members that I have not been asleep throughout any part of the argument, but, as the result of a late night and a subsequent day's work, I have found it convenient to economise muscular effort by lowering my eyes, although I regretted the very obvious deprivation which must inevitably result when I do so, sitting where I do.
  Mr. Blaker: The hon. Gentleman will realise that we on this side do not mind whether or not he keeps his eyes open, but that we want some indication that, at some time, he is going to keep his mind open.
  Mr. Lever: It is not closed.
  Mr. Hirst Mr. Hirst rose—
  Sir G. Nabarro Sir G. Nabarro rose—
  Mr. Lever: I was giving way to the hon. Member for Shipley (Mr. Hirst), but I will give way to both hon. Gentle-men.
  Sir G. Nabarro: Would the hon. Gentleman, before he concludes, answer the point I put to him with regard to drawback? I am sorry—I thought the hon. Gentleman was finishing his speech.
  Mr. Lever: Both suitors having withdrawn at this point, may I come to one or two of the detailed points I should like to make? It may be convenient if I deal with medicaments.
  I can assure hon. Members that the Government could not possibly allow any shortage of pharmaceutical products to develop in the manner which has been causing so much anxiety. I give the assurance to hon. Members that any danger of any person requiring a health-giving drug and being deprived of it because adequate imports are not coming in to supply the needs of the sick is quite out of the question. We have this power. I do not for a moment believe that it will be widely necessary to use it, and it may not be necessary to use it
  1588
  with pharmaceuticals, but we would not allow to occur a shortage of drugs or a shortage of medicaments for health.
  The whole point of the scheme, however, even with vital and necessary drugs, where we could not conceivably allow a shortage to develop, is that there is marginally an encouragement to ingenious stock management, so as to reduce at this point of time the level of imports in all of the fields which are not exempt. Hon. Members are experienced in this field. I am not going to allow a shortage, the Government will not allow a shortage, to develop at those crucial points such as a sufficiency of medicaments. It is out of the question. This does not mean that we cannot get some marginal economy in the import level of all the items affected, quite apart from the fact that we get this liquidity effect, the details of which I do not want to repeat again.
  The next point which I should cover is—
  Mr. Fisher: I am most anxious to listen to the arguments, but it has become difficult to do so because of the chatter of hon. and right hon. Gentlemen on the Front Bench.
  Mr. Lever: My hon. Friends, when they were engaged in their duties in other parts of the House, were missed by hon. Members opposite. When they are here, the maximum encouragement should be given to them, and I would suppose them to be discussing earnestly the details of the argument.
  I now turn to the problem that exercised many hon. Members and which exercises me, exports, and materials coming in which are components for somebody else's exports. I ask the Committee to notice that we shall later come to a Government Amendment to which I think I shall be speaking, the broad effect of which is to liberalise the possibility of exemption and of repayment in respect of export goods. I hope that the hon. Member for Worcester, South (Sir G. Nabarro), who is a zealous attender on these matters, may be fortunate enough to be present when that later Amendment is discussed. Should there be any imperfection in it in helping this export question I shall be glad to hear arguments. It is drawn in a much more liberal fashion than the original proposal,

  1589
  and I hope that it will be acceptable to the Committee, as making possible the widest avoidance of impediment to export by reason of import deposits.
  Sir G. Nabarro: In anticipating the further Amendment, is the Financial Secretary now giving the Committee an assurance that, so long as an importer demonstrates that the goods he is bringing into the country are for subsequent export from this country, the import deposit will be waived absolutely by Customs and Excise, without demur, without argument, without aggravation and without all the generally cantankerous behaviour for which Customs and Excise are well known.
  Mr. Lever: I am grateful to the hon. Member, but I know that he is a zealous champion of the rules of order and would not wish me to reply broadly to a question which is not the subject of the Amendment which we are discussing.
  Sir G. Nabarro: I am asking only for yes or no.
  Mr. Lever: Even a yes or a no is in order or out of order depending on the question to which it relates. I would not want the hon. Gentleman to have on his conscience that he had led me into a departure from a rule of order, particularly as nothing useful would be gained since we shall be discussing this Amendment, when it will be in order, somewhat later.
  For these reasons I ask the Committee to accept the advice which I shall offer to reject the Amendment and to rely upon Government action, if necessary; and to bear in mind that this does not stand alone as Government action in relation to our export/import ratio. It is to produce an immediate impact to support what we are confident is the fundamentally correct strategy, which is to bring exports and imports into a permanently more satisfactory relation than has been the case.
  Sir G. Nabarro: Mr. Irving, would you not on this occasion exonerate the Financial Secretary from any suspicion that he might be out of order in alluding to a forthcoming Amendment should it be selected, namely Amendment No. 73. It is difficult to know how to vote on the present Amendment, indeed, whether
  1590
  to divide the Committee in support of the Amendment or otherwise, without knowing the Government's attitude and without having this assurance.
  Mr. Lever Mr. Lever rose—
  The Chairman (Mr. Sydney Irving): Order. Both hon. Members have already alluded to the Amendment in question, and I do not think we can go further than that.
  Mr. Lever: I was about to try to assist the hon. Member in determining how he shall vote. In all logic, his complaint must be not on the chemical question but on the inadequate arrangements for export rebate, which we will come to later. I know that the hon. Gentleman is susceptible to logic, and in logic he must vote with the Government, if that is the question. Should there be a Division, he must vote with the Government on chemicals and, if he has a complaint, it is of inadequate arrangements, if they are inadequate arrangements, for export rebate.
  Mr. Hirst: The Committee will probably wish to come to a fairly quick decision, and I shall not detain it for more than a minute or two. I wish to say a word or two on this matter since I have spent 27 years in the chemical industry, although I am not now connected with it and therefore have no interest to declare. This led me to take strenous action in regard to the 1964 surcharge which has been referred to, when I spoke on a large number of Amendments relating to chemicals. I know that the three major associations of the chemical industry were not approached at that time. No reference was made to them on their reaction to the selection of certain items on the list. I am horrified to find that the list today is, in effect, the same list as before. In other words the same wretched fool who stuck a pin in the names in 1964 has stuck in the same pin in the same names this time. No progress has been made, and this is an entirely hit and miss business.
  Reference has been made to-day to carbon items. This is an important basic material for the chemical industry. The chemistry of carbon is an enormous factor, yet carbon is left completely out

  1591
  of the list. It is not good enough for the Financial Secretary to say that the Government are in great economic difficulties, and that he must impose all the impediments that he can in order to get the Government out of their difficulty. The Financial Secretary must approach the matter in a more practical way. He says that non-availability has no meaning in this context, but non-available had a meaning in relation to the surcharge.
  Mr. Lever: Non-availability alone cannot justify exemption.
  Mr. Hirst: Non-availability had the same meaning when we discussed the previous surcharge; there is something in common. The hon. Gentleman has had to draw a distinction between the two, but in both instances the effect is an increase in cost not in the proper direction.
  The situation is different if a material is not basically available. As the hon. Gentleman said, a moment ago, helium is not available. It is possible to get oxygen and nitrogen by fixation, as with ammonia, by getting oxygen out of the atmosphere; it is done every day; but it is not possible to get helium in that way.
  No reference has been made to events which have taken place during the intervening years, and the same list has been produced, the list which has been picked by a well-meaning civil servant without consultation with the industry. That is what I am protesting about. It is not fair to the industry concerned. It is not enough for the Government to try to reduce imports if the result is detrimental to exports. The list should be reviewed. We were promised a review last year, but we have never had it; items were added. Representations were made by the dozen, and I must have sent in 30 or 40 myself. Although they were all based on the experience and the knowledge of the industry concerned they have been ignored. The Government should look at the list in a more scientific and technical way, and it has the means to do so. There is no excuse for the Treasury to cough up this old 1964 list, without consultation, when no consultation took place previously.
  Mr. S. O. Davies: I know your patience is running low, but I
  1592
  must admit that it is an advantage on rare occasions to listen to the speeches made by hon. Gentlemen opposite.
  6.30 p.m.
  We have heard about the absolute necessity to import calcium. Then again. toluene was said to be incapable of manufacture in this country. We have heard references to carbon in speech after speech. The advantage which age has given me is that I have a vivid memory of conditions in the First World War, when we did not manufacture an ounce of calcium and it was all imported from Germany and Canada. However, we proved then that, in an emergency, we can manufacture it here.
  Again and again we have been told, both directly and by implication, that these substances can only apparently be manufactured abroad. That is far from correct and, certainly in the case of calcium, our scientists proved more than 50 years ago that if we are forced to manufacture here we can do it. There was a cry for calcium and for toluene, which was one of the major ingredients in explosives. It was found that the compound trinitrotoluene could easily be split into its elements and toluene would result.
  We have heard a lot about nylon and terylene and, during the First World War years, we saw a revolution in colours. All the conceivable colours were developed in this country from raw materials in those war years. A lot has been said about the defects and the lack of knowledge of our scientists and metallurgists to produce the substances which have been mentioned. As I say, taking calcium as one example, not an ounce was manufactured here before the First World War.
  Again before the First World War, all our anaesthetics came from Germany. When war broke out, in no time at all our scientists were put to work and we were able to manufacture all the anaesthetics needed for the fighting front and for our hospitals at home.
  I hope that the pathetic speeches in a minor key from right hon. and hon. Gentlemen opposite will not be accepted without question by my hon. Friends on the Treasury bench.
  Sir Keith Joseph: We have been fobbed off by the Financial

  1593
  Secretary in his usual charming manner. I hope that my right hon. and hon. Friends will now see fit to divide the Committee in order to register our great disappointment with the Government's rig id attitude.
  In this Bill, we are presented with the same list as the House left when we debated the surcharge nearly four years ago. A number of intermediates used in the pharmaceutical and chemical industries still have not been included, and clearly no systematic principle runs through the preparation of the Schedule.
  We are asked to treat the list as perfectly drawn, and that is highly improbable. My hon. Friend the Member for Shipley (Mr. Hirst) has told us of the lack of contact with the trade associations involved, and the result is that we have
  to rely upon the Government to intervene if the users of pharmaceutical or chemical intermediates suffer damage from this Bill in their trade and service to the public. My hon. Friend the Member for Blackpool, South (Mr. Blaker) demonstrated how hopeless is any dependence on the Government, who probably will plead for the first half of the year that the scheme has not been tried yet and for the later half, that the scheme is drawing to an end.
  I hope that my hon. Friend the Member for Warwick and Leamington (Mr. Dudley Smith) will press his Amendment to a Division.
  Question put, That the Amendment be made:—
  The Committee divided: Ayes 164, Noes 233.

  Division No. 22.]

  AYES

  [6.35 p.m.

  Alison, Michael (Barkston Ash)

  Gower, Raymond

  Mawby, Ray

  Allason, James (Hemel Hempstead)

  Grant, Anthony

  Maxwell-Hyslop, R. J.

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

  Gresham Cooke, R.

  Mills, Peter (Torrington)

  Awdry, Daniel

  Gurden, Harold

  Mills, Stratton (Belfast, N.)

  Baker, W. H. K. (Banff)

  Hall, John (Wycombe)

  Morgan, Geraint (Denbigh)

  Beamish, Col. Sir Tufton

  Hall-Davis, A. G. F.

  Munro-Lucas-Tooth, Sir Hugh

  Bell, Ronald

  Hamilton, Lord (Fermanagh)

  Murton, Oscar

  Bennett, Sir Frederic (Torquay)

  Hamilton, Michael (Salisbury)

  Nabarro, Sir Gerald

  Biffen, John

  Harrison, Brian (Malden)

  Noble, Rt. Hn. Michael

  Biggs-Davison, John

  Harrison, Col. Sir Harwood (Eye)

  Nott, John

  Birch, Rt. Hn. Nigel

  Harvey, Sir Arthur Vere

  Onslow, Cranley

  Blaker, Peter

  Hastings, Stephen

  Orr-Ewing, Sir Ian

  Body, Richard

  Heald, Rt. Hn. Sir Lionel

  Osborn, John (Hallam)

  Boyle, Rt. Hn. Sir Edward

  Heseltine, Michael

  Osborne, Sir Cyril (Louth)

  Braine, Bernard

  Hiley, Joseph

  Page, Graham (Crosby)

  Brinton, Sir Tatton

  Hill, J. E. B.

  Page, John (Harrow, W.)

  Bruce-Gardyne, J.

  Hirst, Geoffrey

  Pardoe, John

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

  Holland, Philip

  Pearson, Sir Frank (Clitheroe)

  Buck, Antony (Colchester)

  Hordern, Peter

  Peel, John

  Bullus, Sir Eric

  Hunt, John

  Percival, Ian

  Burden, F. A.

  Hutchison, Michael Clark

  Pike, Miss Mervyn

  Campbell, B. (Oldham, W.)

  Iremonger, T. L.

  Pink, R. Bonner

  Carlisle, Mark

  Irvine, Bryant Godman (Rye)

  Powell, Rt. Hn. J. Enoch

  Channon, H. P. G.

  Jenkin, Patrick (Woodford)

  Price, David (Eastleigh)

  Clark, Henry

  Jennings, J. C. (Burton)

  Pym, Francis

  Clegg, Walter

  Johnson Smith G. (E. Grinstead)

  Quennell, Miss J. M.

  Cooke, Robert

  Johnston, Russell (Inverness)

  Rawlinson, Rt. Hn. Sir Peter

  Cooper-Key, Sir Neill

  Jopling, Michael

  Rees-Davies, W. R.

  Costain, A. P.

  Joseph, Rt. Hn. Sir Keith

  Renton, Rt. Hn. Sir David

  Crowder, F. P.

  Kerby, Capt. Henry

  Rhys Williams, Sir Brandon

  Cunningham, Sir Knox

  Kimball, Marcus

  Rodgers, Sir John (Sevenoaks)

  Currie, G. B. H.

  King, Evelyn (Dorset, S.)

  Rossi, Hugh (Hornsey)

  Dalkeith, Earl of

  Kirk, Peter

  Russell, Sir Ronald

  Davidson, James (Aberdeenshire, W.)

  Kitson, Timothy

  Sharples, Richard

  Dean, Paul

  Knight, Mrs. Jill

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

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

  Lancaster, Col. C. G.

  Silvester, Frederick

  Dodds-Parker, Douglas

  Legge-Bourke, Sir Harry

  Smith, Dudley (W'wick & L'mington)

  Eden, Sir John

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

  Speed, Keith

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

  Loveys, W. H.

  Steel, David (Roxburgh)

  Emery, Peter

  Lubbock, Eric

  Stodart, Anthony

  Errington, Sir Eric

  MacArthur, Ian

  Stoddart-Scott, Col. Sir M.

  Eyre, Reginald

  Mackenzie, Alasdair (Ross & Crom'ty)

  Summers, Sir Spencer

  Farr, John

  Maclean, Sir Fitzroy

  Tapsell, Peter

  Fletcher-Cooke, Charles

  McMaster, Stanley

  Taylor, Sir Charles (Eastbourne)

  Fortescue, Tim

  McNair-Wilson, Patrick

  Taylor, Frank (Moss Side)

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

  Maginnis, John E.

  Temple, John M.

  Giles, Rear-Adm. Morgan

  Marples, Rt. Hn. Ernest

  Thatcher, Mrs. Margaret

  Gilmour, Ian (Norfolk, C.)

  Marten, Neil

  Tilney, John

  Gilmour, Sir, John (Fife, E.)

  Maude, Angus

  Turton, Rt. Hn. R. H.

  Glover, Sir Douglas

  Maudling, Rt. Hn. Reginald

  Vaughan-Morgan, Rt. Hn. Sir John

  Vickers, Dame Joan

  Whitelaw, Rt. Hn. William

  Worsley, Marcus

  Waddington, David

  Williams, Donald (Dudley)

  Wright, Esmond

  Wall, Patrick

  Wills, Sir Gerald (Bridgwater)

  Ward, Dame Irene

  Winstanley, Dr. M. P.

  TELLERS FOR THE AYES:

  Webster, David

  Wolrige-Gordon, Patrick

  Mr. Jasper More and

  Wells, John (Maidstone)

  Wood, Rt. Hn. Richard

  Mr. Bernard Weatherill.

  NOES

  Abse, Leo

  Finch, Harold

  Mapp, Charles

  Albu, Austen

  Fletcher, Rt. Hn. Sir Eric (Islington, E.)

  Marks, Kenneth

  Allaun, Frank (Salford, E.)

  Fletcher, Ted (Darlington)

  Mason, Rt. Hn. Roy

  Alldritt, Walter

  Foley, Maurice

  Mellish, Rt. Hn. Robert

  Allen, Scholefield

  Ford, Ben

  Mendelson, John

  Anderson, Donald

  Forrester, John

  Millan, Bruce

  Archer, Peter

  Fowler, Gerry

  Milne, Edward (Blyth)

  Armstrong, Ernest

  Freeson, Reginald

  Moonman, Eric

  Ashley, Jack

  Galpern, Sir Myer

  Morgan, Elystan (Cardiganshire)

  Atkins, Ronald (Preston, N.)

  Gardner, Tony

  Morris, Alfred (Wythenshawe)

  Atkinson, Norman (Tottenham)

  Garrett, W. E.

  Morris, Charles R. (Openshaw)

  Ashton, Joe (Bassetlaw)

  Ginsburg, David

  Morris, John (Aberavon)

  Bagier, Gordon A. T.

  Gray, Dr. Hugh (Yarmouth)

  Moyle, Roland

  Barnes, Michael

  Greenwood, Rt. Hn. Anthony

  Mulley, Rt. Hn, Frederick

  Barnett, Joel

  Gregory, Arnold

  Neal, Harold

  Beaney, Alan

  Grey, Charles (Durham)

  Newens, Stan

  Benn, Rt. Hn. Anthony Wedgwood

  Griffiths, David (Rother Valley)

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

  Bennett, James (G'gow, Bridgeton)

  Griffiths, Will (Exchange)

  O'Malley, Brian

  Bidwell, Sydney

  Hamilton, James (Bothwell)

  Orme, Stanley

  Binns, John

  Hamilton, William (Fife, W.)

  Oswald, Thomas

  Bishop, E. S.

  Hamling, William

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

  Blackburn, F.

  Hannan, William

  Padley, Walter

  Blenkinsop, Arthur

  Harper, Joseph

  Paget, R. T.

  Boardman, H. (Leigh)

  Harrison, Walter (Wakefield)

  Palmer, Arthur

  Booth, Albert

  Haseldine, Norman

  Pannell, Rt. Hn. Charles

  Braddock, Mrs. E. M.

  Hazell, Bert

  Park, Trevor

  Bray, Dr. Jeremy

  Henig, Stanley

  Parker, John (Dagenham)

  Brooks, Edwin

  Herbison, Rt. Hn. Margaret

  Pavitt, Laurence

  Broughton, Dr. A. D. D.

  Hilton, W. S.

  Pearson, Arthur (Pontypridd)

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

  Horner, John

  Peart, Rt. Hn. Fred

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

  Houghton, Rt. Hn. Douglas

  Pentland, Norman

  Buchan, Norman

  Howarth, Robert (Bolton, E.)

  Perry, George H. (Nottingham, S.)

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

  Howell, Denis (Small Heath)

  Prentice, Rt. Hn. R. E.

  Butler, Herbert (Hackney, C.)

  Huckfield, Leslie

  Price, William (Rugby)

  Butler, Mrs. Joyce (Wood Green)

  Hughes, Rt. Hn. Cledwyn (Anglesey)

  Randall, Harry

  Callaghan, Rt. Hn. James

  Hughes, Emrys (Ayrshire, S.)

  Roberts, Albert (Normanton)

  Cant, R. B.

  Hughes, Hector (Aberdeen, N.)

  Roberts, Rt. Hn. Goronwy

  Carmichael, Neil

  Hughes, Roy (Newport)

  Robertson, John (Paisley)

  Carter-Jones, Lewis

  Hunter, Adam

  Roebuck, Roy

  Castle, Rt. Hn. Barbara

  Hynd, John

  Rogers, George (Kensington, N.)

  Chapman, Donald

  Jackson, Peter M. (High Peak)

  Rose, Paul

  Coe, Denis

  Janner, Sir Barnett

  Ross, Rt. Hn. William

  Coleman, Donald

  Jay, Rt. Hn. Douglas

  Rowlands, E.

  Corbet, Mrs. Freda

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

  Shaw, Arnold (Ilford, S.)

  Craddock, George (Bradford, S.)

  Jenkins, Hugh (Putney)

  Sheldon, Robert

  Crawshaw, Richard

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

  Shore, Rt. Hn. Peter (Stepney)

  Cullen, Mrs. Alice

  Jones, Dan (Burnley)

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

  Dalyell, Tam

  Jones, T. Alec (Rhondda West)

  Silkin, Rt. Hn. John (Deptford)

  Darling, Rt. Hn. George

  Kenyon, Clifford

  Silkin, Hn. S. C. (Dulwich)

  Davies, Ednyfed Hudson (Conway)

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

  Silverman, Julius

  Davies, G. Elfed (Rhondda, E.)

  Lawson, George

  Skeffington, Arthur

  Davies, Dr. Ernest (Stretford)

  Ledger, Ron

  Slater, Joseph

  Davies, Harold (Leek)

  Lee, Rt. Hn. Frederick (Newton)

  Small, William

  Davies, Ifor (Gower)

  Lee, Rt. Fin. Jennie (Cannock)

  Spriggs, Leslie

  Davies, S. O. (Merthyr)

  Lee, John (Reading)

  Steele, Thomas (Dunbartonshire, W.)

  Delargy, Hugh

  Lever, Harold (Cheetham)

  Strauss, Rt. Hn. G. R.

  Dempsey, James

  Lewis, Arthur (W. Ham, N.)

  Summerskill, Hn, Dr, Shirley

  Dewar, Donald

  Lewis, Ron (Carlisle)

  Swain, Thomas

  Diamond, Rt. Hn. John

  Lomas, Kenneth

  Symonds, J. B.

  Dickens, James

  Loughlin, Charles

  Taverne, Dick

  Dobson, Ray

  Lyon, Alexander W. (York)

  Thornton, Ernest

  Doig, Peter

  Lyons, Edward (Bradford, E.)

  Tinn, James

  Dunnett, Jack

  McBride, Neil

  Tomney, Frank

  Eadie, Alex

  McGuire, Michael

  Tuck, Raphael

  Edelman, Maurice

  McKay, Mrs. Margaret

  Urwin, T. W.

  Edwards, Robert (Bilston)

  Mackie, John

  Varley, Eric G.

  Edwards, William (Merioneth)

  Mackintosh, John P.

  Wainwright, Edwin (Dearne Valley)

  Ellis, John

  Maclennan, Robert

  Walker, Harold (Doncaster)

  English, Michael

  MacMillan, Malcolm (Western Isles)

  Wallace, George

  Evans, Fred (Caerphilly)

  McMillan, Tom (Glasgow, C.)

  Watkins, David (Cornett)

  Evans, Gwynfor (C'marthen)

  MacPherson, Malcolm

  Watkins, Tudor (Brecon & Radnor)

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

  Mahon, Peter (Preston, S.)

  Wellbeloved, James

  Ewing, Mrs. Winifred

  Mahon, Simon (Bootle)

  Wells, William (Walsall, N.)

  Fernyhough, E.

  Manuel, Archie

  Whitlock, William

  1596

  1597

  Wilkins, W.

  Williams, Mrs. Shirley (Hitchin)

  Woof, Robert

  Willey, Rt. Hn. Frederick

  Williams, W. T. (Warrington)

  Williams, Alan (Swansea, W.)

  Willis, Rt. Hn. George

  TELLERS FOR THE NOES:

  Williams, Alan Lee (Hornchurch)

  Wilson, Rt. Hn. Harold (Huyton)

  Mr. Alan Fitch and

  Williams, Clifford (Abertillery)

  Woodburn, Rt. Hn. A.

  Mr. Ernest G. Perry.

  6.45 p.m.
  Mr. Douglas Houghton: I beg to move Amendment No. 94, in page 6, line 48, at end insert:

  39.02

  …

  …

  High density, high molecular weight polyethylene.

  The Chairman (Mr. Sydney Irving): With this Amendment we can discuss Amendment No. 102, in page 6, line 48, at end insert:

  39.03. F2.

  …

  Seamless tubular artificial sausage casing made from re-generated cellulose.

  Amendment No. 123, in page 6, line 48, at end insert:

  39.02

  …

  …

  Polymerisation and copolymerisation products (for example polyethylene, polytetra-haleothylenes, polyisobutylene polystyrene, poly (vinyl-chloride) and other poly (vinyl derivatives) poly (acrylic derivatives) and poly (methacrylic derivatives) conmarone-indene resins).

  and, for a Division if the Committee so wishes, Amendment No. 58, in page 6, line 49, after '40.01' insert:

  40.02

  …

  …

  Synthetic rubber.

  Mr. Houghton: Amendment No. 94 is one of a group of Amendments to the Schedule which I understand relates to artificial resins and plastic materials and covers as wide a range as synthetic rubber and seamless tubular artificial sausage casing made from regenerated cellulose. I am not aware of ever having had sausages encased in that material, but I have no doubt that it is very important.
  Mr. John Hall: The seamless tubular material to which the right hon. Gentleman refers is used for making skins for skinless sausages.
  Mr. Houghton: It is, so to speak, a non-skin.
  I will confine my remarks to Amendment No. 94. I suppose that this is a smaller moonbeam in the larger illumination of this Schedule. I cannot say that it has any great importance to the industrial activity and exports of this country, but it reveals the kind of anomaly and difficulty which many firms will encounter under the scheme. I make no
  1598
  apology for raising it as a purely constituency matter in which I have no personal interest whatsoever.
  The remarks of the Financial Secretary were extremely discouraging to this Amendment, because he said that it was necessary to draw the line somewhere—we all understand that—and that exemption is given to those raw materials which have gone through only elementary processes. This results in anomalies. For example, the importation of raw timber is exempt, but the importation of a basic material to make substitutes for timber is caught by the Bill. I will refer to that later.
  I should think that after the years that the Government have had since the import surcharge they could have found a more sophisticated Schedule of exemptions—[HON. MEMBERS: "Hear, hear."] I realise that when the Government first introduced the import surcharge they had to use what was readily at hand as the basis of distinction or discrimination between one import and another.
  The Committee will remember that when the Government introduced the Selective Employment Tax they used what was readily available, the Ministry of Labour Schedule, which had been drawn up for different purposes. It was adapted to the introduction of that tax. It is undesirable that taxation and financial measures of this kind should be erected upon a basis intended for entirely different purposes, because if that is done we are bound to get the kind of anomalies and injustices to which hon. Members on both sides of the Committee have referred.
  This material is purchased from Germany, in sheet or rod form, although it is produced originally from powder, and machined into a great variety of shapes and sizes. This is a new branch of the plastics industry, making a number of novel changes in the materials used for manufacture, with a considerable export potential. For example, with this material the firm in my constituency makes what are known as polymatic hammers. They are described as "durable, non-split, soft faced hammers"—just the sort of hammers that we want in the Parliamentary

  1599
  Labour Party. It seems a shame that one should have to pay a 50 per cent. deposit on the importation of raw materials which have such a desirable purpose as that.
  Mr. John Hall: Does the right hon. Gentleman believe that it is necessary to import such hammers? Is not he getting on very well without them?
  Mr. Houghton: We are getting on very well, but any additional equipment which enables us to get on better will be very welcome.
  With this material it is possible to make shuttles for textile manufactures. I am informed that the wood for a wooden shuttle will be imported under the exemptions provided for in the Schedule, but that the raw material to make a plastic shuttle will be caught by the Bill. I am told that a wooden shuttle lasts for one year, while a plastic shuttle will last for ten years. This is another use of a new material which will not only save the import of raw materials, but offer better prospects of export business.
  This firm on whose behalf I admit I am speaking is a small family business. If it were a public company, I should have to declare an interest in it, because I have a modest shareholding in every public company in my constituency. This is a matter of principle, because I think it enables one to see how businesses are doing, and to get a little closer to the industrial activity in one's constituency. I do not want any doctrinaire ideological interventions. That is what I consider to be the right thing to do. This is a private company, and it will have to place a deposit on the importation of all its raw materials. This will be a very severe drain on the firm's resources, and that is why I am making this plea on its behalf.
  I think it is a pity that under the Bill, because of our difficulty of drawing lines more sensibly than is done here, we exempt peanuts, but put the deposit limitation upon materials of the kind I have described. For the life of me I cannot understand why unmanufactured tobacco is exempted under the Bill, considering the content of it, the danger of it, and the dollar source of a great deal deal of it. However, this is all to do with the broad lines which have been drawn in distinguishing between those
  1600
  things which shall be subject to an import deposit, and those which are to be given exemption.
  This is a short case and it is, I am afraid, only an addition to the rather dreary queue of cases put by hon. Members who are seeking some concession from the Government. But, whether the case is hopeless or not, I think it is the duty of us in the House constantly to draw attention to anomalies and injustices of proposed legislation, because it is only by doing that that we can warn the Government that in adopting measures, albeit emergency measures, albeit measures for an overriding economic purpose, they should have regard to their effect on particular interests and spheres of activity, and the hardship and harm which they are doing to many people who are busy working for Britain in the export trade.
  It is sad that we have to accept the overriding objective of the Measure as being desirable in the national interest. We should have pulled out of our troubles by now, by greater efficiency, by greater effort, and by a greater realisation of the perils and problems which confront Britain in the world of today. The Bill really is another warning to the British people that we are not out of the wood. We are still in a highly precarious position in a rapidly changing world, and the Bill is necessary only because of our failure to overcome the difficulties of the last few years.
  Mr. John Hall: The right hon. Member for Sowerby (Mr. Houghton) has my utmost sympathy and complete support. It is not very often that I can say that about speeches made by the right hon. Gentleman.
  I am sure that the right hon. Gentleman will forgive me if I concentrate on my Amendment to which he was kind enough to refer during his speech. It relates to seamless tubular artificial sausage casing made from re-generated cellulose. Perhaps I should explain what that is, because there seems to be some doubt about it. It is tubing which is used for making a wide variety of sausages and processed meats and is an indispensable part of the food industry. When I say that it is used to make skins for skinless sausages, I must tell the Committee that it is used for just that purpose. It is used to form a sausage and

  1601
  the skin is then peeled off, leaving a form of sausage without a skin.
  This item is imported mainly from Canada, from the United States, from France, and from Germany. In passing, perhaps I might point out that under the Bill it will be possible to import sausages and processed meats from those countries with the kind of cellulose casing to which I have referred, and without having to pay any deposit. Presumably this will mean greater encouragement for importers to import sausages and other prepared meats with the skins on, rather than have to pay the augmented price resulting from buying cellulose skins made here, or processed here, with the deposit charge interest added to them.
  The basic tubing is not manufactured here, and there is no possibility that it will be in the near future, largely because of the high cost of putting down the necessary chemical plant, and the large market which is necessary in the country to justify expenditure of that kind. But there is one company—and here I must declare an interest, because it is a company of which I am the chairman—which undertakes part of the manufacturing process. This factory is in a development area and it imports partly from the United States of America, but very largely from France.
  I stress that it imports largely from France because it will not have escaped the notice of the Government that recently the French Government imposed quite severe restrictions. They have restricted the credit which can be given by French exporters to their customers. So it is very difficult indeed to look to the providers of what for us is a basic raw material to help us in the difficulty of finding the necessary deposit for six months.
  7.0 p.m.
  This company will have to find, over the six months' period, £250,000. Like all the firms affected or likely to be affected by this Bill, naturally it has approached its bank to see what is the position about obtaining accommodation. It has been told, in accordance with the directives given by the Chancellor to the Bank of England, that although the bank can help in the first few weeks to overcome immediate problems concerning shipments on the way or at present in the
  1602
  docks, after that some other method of financing will have to be arranged.
  If this company is unable to find a quarter of a million pounds to leave on deposit, and pay the interest on it as an interest-free loan for the Government for that period, at the best it will have seriously to restrict output and at the worst to close down. At the best it will have to reduce its labour force in a development area where every encouragement has been given to manufacturers to take on more labour. At the worst it will have to close the factory.
  It will be unable to supply the food trade with an essential part of that trade's requirements. This will be an encouragement to the food trade to import sausages and prepared meats which are already in artificial casings and do not have to pay the deposit. All this is at a time when the company is developing its market to a point at which there is a strong possibility of it being able in the next few years to set up a manufacturing plant and put down the very large sums necessary to manufacture the complete article in this country. By those means it would save a considerable amount in imports.
  I stress the main points about this Amendment. This semi-manufactured casing is the raw material of this industry. It is not obtainable here. It has already been said by the Financial Secretary that non-availability is not an argument, but surely non-availability must be an argument should an industry not be able to obtain materials or not be able to find the money to pay the deposit and have to close its factory.
  Whatever success the company may or may not have in finding the money to finance these imports, the money for the deposit will have to come out of its expansion programme. Hon. Members on both sides of the Committee are much concerned that a great deal of money has to be put aside for six months after being raised under considerable difficulty and that this will affect capital programmes of firms throughout the country. They will not be able in addition to the deposit money to raise money to finance those programmes, many of which are already planned. To give an example of the company with which I am concerned, we have been planning our expansion programme for the last

  1603
  five to seven years. If we have to find money for deposits that programme will be halted.
  The plans of this company to set up manufacturing plant here, with considerable saving of imports, will be put in jeopardy. When I was last speaking in the Committee between 2 o'clock and 3 o'clock this morning, I pointed out that that was generally regarded as the hour when human vitality is at its lowest. I expressed the hope that the Minister might have had his resistance so lowered that he would accept an Amendment. May I now express the hope that he is even more tired and will not resist but will be prepared to accept this Amendment?
  Mr. John Page: When my hon. Friend the Member for Wycombe, (Mr. John Hall) started talking about skins for skinless sausages I was irresistably reminded of the speech of the Attorney-General yesterday when he said that it was either a duty or a charge or not a duty or not a charge.
  I shall speak briefly in discussing two Amendments in my name and the name of my hon. Friend the Member for Honiton (Mr. Emery) and also the Amendment in my name, No. 58. Amendment No. 121 deals with rubber accelerators. A rubber accelerator is something which speeds up the vulcanising process in the rubber industry.
  The Chairman (Mr. Sydney Irving): Order. I am afraid that the hon. Member has misread the provisional selection list. His Amendment No. 121 was down for discussion with Amendment No. 91. I am afraid that he has lost his opportunity.
  Mr. Page: I think I am right, Mr. Irving, in believing that Amendment No. 123 is being discussed with the Amendment that has been moved. I shall not bore the Committee with a discussion of polytetrahaleothylenes, which I believe are vital, technical and strange to relate a very basic raw material. I shall address my remarks mainly to Amendment No. 58, which deals with the subject of synthetic rubber.
  I declare an interest as I am one of the 150,000 people employed in the
  1604
  rubber industry. About half the rubber used in this country is natural rubber and all that is, of course, imported. About £12 million-worth of synthetic rubber is imported and a little less than that is synthetic rubber in a basic form. It would be quite impossible for any import-saving to be made by increasing the output of British synthetic rubber factories. So it is merely a matter of the potential loss of growing export markets for synthetic rubber if manufacturers in the home factories are confined to the home market.
  The deposit on £12 million-worth of synthetic rubber imports will mean that throughout the year the industry would have a £3 million running deposit on the goods which are imported. That is a considerable sum and it will cause a considerable on-cost for a large number of products made by the rubber industry. There will be an absolutely nil import effect and a virtually nil liquidity effect. Already, with good stock management and foreknowledge of the market demands, there is not over-stocking of imported synthetic rubber. So the Bill will not reduce imports or stocks, and therefore will not reduce the quantities of imported goods. There is the greatest possible reason for exempting imported synthetic rubber.
  Among the chapter headings, 40.01, natural rubber, 40.03, reclaimed rubber, and 40.04, waste rubber, are all exempt, yet 40.02 mysteriously receives no exemption. The first illogicality of this is that it is the only block of four items of which one has been singled out for discriminatory treatment. But the real illogicality is that reclaimed synthetic rubber can be imported without deposit being required. This needs more expensive further processing than the basic manufacture reclaimed rubber as it leaves the factory.
  So the Government say that one raw material of this important industry is being singled out, while its "brother-in-law" can be freely allowed in. This is an extraordinary anomaly. The Government should consider this and show the industry and the country that they can be flexible by accepting the Amendment. I hope that we shall have as good a response as I had yesterday from the Minister of State, but that this time he will stick to his guns and accept the Amendment.
  Mr. Emery: The case made by my hon. Friend the Member for Harrow, West (Mr. John Page) was very telling. I have two more facts concerning the Amendment which relates to synthetic rubber which seem to make an impressive argument irresistible. Consumption of natural rubber during the first six months of this year was 97,900 tons, while that of synthetic rubber was 114,600 tons. In other words, the consumption of synthetic rubber was slightly greater than that of natural rubber. There is no major division between the uses of synthetic and natural rubber with one used in some processes and the other in others. They are usually blended to give a better process, certainly in tyre production. A total of £33 million-worth of loose tyres were exported.
  How do the Government propose that an importer—whether the Dunlop Rubber Company or any other major firm—shall obtain remission of deposit, when he cannot absolutely stipulate how much of this synthetic rubber to be used will be imported and how much will not? This cannot be decided at that one stage, so how is remission to be allowed?
  The second and more powerful question is, how can the Government possibly argue that it is right to exempt ordinary natural rubber but not synthetic? The two are being used as parallel raw materials and for that reason alone—if we accept the Financial Secretary's argument in our last debate—it would be sensible to accept the Amendment.
  I hope that I can reinforce my hon. Friend's argument that it is palpably obvious that this is a golden opportunity for the Government to give way. It is not as if no Amendments had yet been accepted. If the Government had to stick to their guns so as not to have to reprint the Bill before Report, there might be some argument for resisting our suggestions. But since we are to have a Report stage, it would be simple for them to give way on this well-intentioned and admirably argued Amendment, which makes sense for the rubber industry and for the motor industry which is so concerned with many rubber products.
  Sir G. Nabarro: I wish to intervene because an important establishment in my constituency is the Richmond Sausage Company. It is not unusual, of course, to
  1606
  find a sausage and pie manufacturing plant in an important agricultural area, and South Worcestershire produces many pigs. One of the by-products of pig meat is, of course, the filling of a sausage. If the Amendment were carried, regenerated cellulose sausage casings would be exempt from deposit. The sausage is ubiquitous. The value of sausages imported as finished sausages and not as their constituent parts is quite surprising. As my hon. Friend comments, they are fully fashioned.
  I looked up the value, and I was surprised to discover that sausages are separately classified, so important are they, in the Overseas Trade Accounts of the United Kingdom for October, 1968. Hon. Members will find them on page 11, section O, headed "Food and live animals" and under subsection 013.4—
  "sausages not in air-tight containers and sausages in airtight containers."
  That means whether the sausages are tinned or not.
  If they read these statistics, hon. Members will see that, based on the imports of sausages for the first ten months to October, 1968, we are importing foreign sausages at the rate of £2·2 million per annum. The Government's present proposals favour an increase in the import of foreign sausages and a diminution in the production of home-produced sausages in establishments all over the country, including the Richmond Sausage Company in my constituency. The point is that all the sausages being imported at a rate of £2·2 million per annum are ready made, finished sauages, with skins around them, for example as frankfurters, and they escape the import deposit scheme because they are classified as food.
  But if my farmers in South Worcestershire sell their pig carcases to a conversion factory, and from the pig meat is derived the sausage meat, and then that food processing plant has to import the regenerated cellulose sausage casing from abroad, that casing is classified under the import deposit scheme as attracting the proposals for 180 days and 50 per cent. ad valorem deposit. That is a disgraceful state of affairs. It is a deliberate move by the Chancellor to favour the foreign "banger" and to depreciate the value of the British "banger". It demon-states to the Treasury Bench the ridiculous limits to which they have taken us

  1607
  through their discriminatory practices in the Bill.
  The right hon. Member for Sowerby (Mr. Houghton) was exactly correct. These semi-manufactured materials, which are so essential to the export trade of the country and to the production of food in Britain, ought to be totally exempt. The cost to the Government would be negligible and importers would be greatly facilitated in being able to bring into the country materials of this kind without the payment of the import deposit.
  The discussion has been highly technical. My hon. Friend the Member for Wycombe (Mr. John Hall) is expert in these matters as chairman of a company dealing with the manufacture and distribution of these casings. No doubt his company supplies the Richmond Sausage Company.
  Mr. John Hall: Indeed we do.
  Sir G. Nabarro: I am delighted to see that he nods agreement at once. His company supplies the material to the company in my constituency, the Richmond Sausage Company at Evesham, and that immediately adds validity to the case which I am putting forward about these regenerated cellulose sausage casings. I hope that I have impressed the point on the Treasury Bench sufficiently to make them agree to relaxation in respect of this important semi-manufactured commodity.
  Mr. Taverne: It is inevitable in the debate on the Schedule that some of the arguments which have been advanced on these Amendments are not entirely dissimilar from those advanced earlier, and it will be no more surprising that some of the answers will be much the same as those previously advanced. My right lion. Friend the Member for Sowerby (Mr. Houghton) was aware of this, because he had heard a full reply by my hon. Friend the Financial Secretary on an earlier Amendment and he was not particularly hopeful about the fate of his own Amendment. He realised that all that my hon. Friend said in answering the debate on a previous group of Amendments applied with exactly the same force to his Amendment.
  1608
  Amendments 94 and 123 deal with products of the chemical industry and clearly it would be inconsistent for the Government to refuse exemption in relation to the pharmaceutical industry, to helium and other products and substances which we discussed in the previous debates, and then to exempt the group of products covered by these Amendments. Indeed, the Amendment illustrates the trap which the Financial Secretary sought to avoid, because if we make a concession on one point, inevitably more and more anomalies will appear. If we do not consider each case carefully in the terms in which my hon. Friend indicated, we shall build up pressure to widen the scope of exemptions, and by the time we have finished the scope of the entire scheme will have narrowed enormously.
  The hon. Member for Wycombe (Mr. John Hall) was supported volubly by the hon. Member for Worcestershire, South (Sir G. Nabarro).
  Sir G. Nabarro: Eloquently.
  Mr. Taverne: Eloquently and volubly. Both hon. Gentlemen realised that they were talking of a manufactured article. The Amendments refer to manufactured articles. To exempt them would be a breach of the broad category running through the Schedule by which manufactured articles are not exempt.
  Mr. John Hall: I cannot have made myself clear, and no doubt that is my fault. For my company this is a semi-manufactured article which we have to process thereafter.
  Mr. Taverne: It is manufactured, and it falls outside the category of raw materials and the other exempt categories which my hon. Friend outlined. The hon. Member said that in this case it is used as a raw material for the industry. That is precisely the argument with which my hon. Friend dealt in resisting the last batch of Amendments.
  The hon. Member also said that it is not manufactured in this country, but my hon. Friend pointed out that it would be wrong for the Government to base the case for particular exemptions on the ground that the goods were not made in this country, because that would give a protectionist character to the Bill which would be totally opposed to the spirit of the E.F.T.A. Treaty. The fact that it is

  1609
  manufactured in France, the United States or anywhere else cannot determine whether an article comes within the exempt category.
  Mr. John Hall: I do not think that the Minister has understood the problem. Not only is this material not available here but no other competing casing is available here. The concession for which I am asking does not raise the question of protecting a home industry.
  Mr. Taverne: I am afraid that the hon. Member does not follow the argument. He said chat the casing is not available here and that it can be obtained only from abroad, therefore it should be exempt. The implications are that if it were available here and if there were another source from which it could be obtained, then it should not be exempt. The inevitable logic of that argument is that the exemptions should be so directed that goods which are liable to attract the deposit are goods which in some way are competing with those produced in this country.
  7.30 p.m.
  Sir A. V. Harvey: Does not the hon. and learned Gentleman agree that he is giving an advantage to the miserable German frankfurter as against the British sausage?
  Mr. Taverne: I am saying that we cannot base categories of exemptions on the basis of protecting home industries. I am sure that the hon. Gentleman would not wish us to infringe the spirit of the E.F.T.A. Treaty.
  Sir G. Nabarro: I am not sure that the hon. and learned Gentleman has understood the agricultural implications of what I was putting to him. It is a first principle of Government policy to encourage import substitution. I demonstrated from the trade and navigation returns that sausages imported are worth £2·2 million per annum. What we are discussing militates against an increase in output of British sausages and encourages an increase in imports of foreign sausages.
  Mr. Taverne: The hon. Gentleman has cited one case where, to a negligible extent, his case may be supported. But his logic is that we should so arrange the scheme hat home production is protected at the expense of imports, and this
  1610
  is no basis on which particular articles can be exempted.
  Sir G. Nabarro Sir G. Nabarro rose—
  Mr. Taverne: No.
  Sir G. Nabarro Sir G. Nabarro rose—
  Mr. Taverne: There must be a limit.
  Sir G. Nabarro: We are in Committee.
  Mr. Taverne: No, I will not give way.
  Sir G. Nabarro: I will make another speech.
  Mr. Taverne: The hon. Gentleman can do so. But he has failed to grasp the fundamental fact that my hon. Friend the Financial Secretary made abundantly clear earlier and which I have repeated.
  Mr. John Hall: I tried to answer the point made previously by the Financial Secretary by saying that, although the argument of non-availability may have some merit in it—I do not say that it has—if it comes to a question of denial of material to an industry, bringing it to a stop, the non-availability argument has no other merit in it.
  Mr. Taverne: The hon. Gentleman is putting forward a different point. He says that the deposit will have such a drastic effect that the whole industry will be ruined. This is familiar ground. There is no reason to suppose that those who are in the sort of position which the company the hon. Gentleman spoke of is in will find it impossible to raise capital. We had the agricultural argument about this. Many hon. Members opposite have said that the scheme will not have the desired effect on the volume of imports because it will be too easy to raise capital. What the hon. Gentleman is concerned with here is a fractional effect of extra costs which this company will have to bear.
  I turn now to the Amendment dealing with synthetic rubber. Rebate on exports would be better considered on a later Government Amendment, which if selected will determine how the rebate will work. Here we are concerned not so much with the rebate but how far one can raise the deposit.
  The hon. Member for Harrow, West (Mr. John Page) pointed out that £12 million worth of synthetic rubber is

  1611
  imported. Immediately, this draws attention to the fact that the Amendment would mean exempting £12 million of imported goods. He said that the scheme means that about £3 million will be on deposit. I strongly contest his argument that, in this situation, the effect on liquidity will not apply. Of course it will apply. A sum of £3 million will be placed on deposit and, to that extent, liquidity of the home market will be reduced, unless there is a loan from a foreign bank which, to that extent, will bring an immediate gain to the reserves.
  Once again we have here a fully manufactured product, made abroad from chemicals which are themselves subject to the deposit. It would be inconsistent with the scheme as a whole if synthetic rubber were exempted. The hon. Gentleman said that reclaimed and waste rubber were themselves exempt but, like rags, these are treated as raw materials. Synthetic rubber is in a different category, obviously, from waste rubber and reclaimed rubber, just as rags are in a different category from other forms of textiles.
  Mr. John Page: I am listening to the hon. and learned Gentleman with care, and I do not think that a comparison of reclaimed rubber with rags stands up. Reclaimed synthetic rubber is a known product of known specification and is quite a thing of itself. It is not like rags, which can be converted and used in a certain way.
  Mr. Taverne: It is more akin to raw materials. Synthetic rubber could not be in the category of waste products which are exempt. The hon. Gentleman says that we cannot save imports here by producing more at home. Once again, the argument which applies in the case of sausage casings and other goods of non-availability at home must apply. In all the cases raised by these Amendments, as in those raised on earlier Amendments, there is the fundamental difficulty that one has to balance broad categories. We have to balance certain anomalies with the need to keep the scheme as broad as possible so that the credit restriction effect will be as wide as possible and, therefore, as advantageous to the economy as possible.
  Sir G. Nabarro: The hon. and learned Gentleman is burying his head in the sand. I shall proceed in words of two syllables so that he cannot possibly fail to understand. There is only one commodity in this group of Amendments that relates to food manufacture—that is, sausage casings. I am not talking about reclaimed rubber or anything but sausage casings. What is the objection to exempting sausage casings and thereby not giving preference to German frankfurters as compared with British pork sausages?
  Sir A. V. Harvey: And beef sausages.
  Sir G. Nabarro: I do not want to talk about beef sausages because they are not of the same quality as pork.
  Sir A. V. Harvey: They use the same casings.
  Sir G. Nabarro: I agree, however, that they use the same casings. The only manufactured commodity in this group which is related to food in any way is the sausage, and as finished sausages come into the country without paying import deposits because they are food, would it not be equitable to allow sausage casings in without import deposits in order that British manufacturers should not be penalised in comparison with their overseas competitors?
  Mr. Taverne: The hon. Gentleman has added nothing to the argument put forward by the hon. Member for Wycombe (Mr. John Hall) and to the point he himself put earlier. The answer is exactly the same as before. If this were the basis on which we were to proceed, then similar exemptions would have to be made in similar circumstances, and we would inevitably be drawn into a selection which would be a selection in order to protect the home market and discourage competition.
  Mr. John Hall: Have we now to wait until a company, mine or that of anyone else, is so affected by these provisions, so affected by the Government's own recently imposed restrictions on the banks, has to reduce output and discharge its employees? Is that what the Government are trying to do? Have we to wait until that happens before the Government adjust the Schedule?
  Mr. Taverne: My right hon. Friend has said that we will look at how the scheme works. There may be cases in which an Order will be made to exempt certain products, but it is totally fallacious to suppose that the effect will be to drive companies out of business. It is totally fallacious to suppose that it will be possible that a company that has to pay the import deposit, and raise capital to do so, will find the interest charged on that capital totally ruinous.
  Mr. Patrick Jenkin: Ever since I arrived in this House over four years ago I seem to have spent an unconscionable amount of time listening to Her Majesty's Ministers attempting to defend indefensible distinctions. We have had from the very beginning a whole series of legislation—with the temporary charge on imports in the first Finance Bill, in the debates on which it was my honour to take part—through investment grants and the Selective Employment Tax, and now with the import deposits. The Government have sought to draw distinctions and to discriminate between things that qualify and things that do not.
  While I have a great deal of sympathy for my right hon. and hon. Friends who have had to debate this present legislation, I have very little for the right hon. Gentleman the Member for Sowerby (Mr. Houghton) because, after all, he has for years supported a Government which believes in purposive intervention in industry, in Government taking discriminatory powers, and he cannot now complain if he finds that when the Government attempt to do this and it hurts some of his constituents—
  Mr. Houghton: I did not come here for the hon. Gentleman's sympathy, but for a concession from my right hon. Friends.
  Mr. Jenkin: If I may say to the right hon. Gentleman with great respect, he will not be disappointed by my lack of sympathy for him.
  The right hon. Gentleman has quite rightly put his finger on one of the three anomalies which this group of Amendments has shown up. He quite correctly said that the Customs Tariff is a document based on the Brussels nomenclature, agreed internationally in 1958, and form-
  1614
  ing part of our own tariffs in 1959, as amended from time to time, drawn up with the purpose of classifying goods in order that import duties and Customs duties could be attached to the goods identified and classified.
  He is perfectly correct, if I may say so with respect, in pointing out that it forms absolutely no basis at all on which to try to distinguish between categories of goods, as the Government are attempting to do in this Bill—between raw materials, food and fuel on the one hand, and manufactured articles on the other. Therefore, the right hon. Gentleman should not be surprised—and I do not think, quite honestly, that he was surprised—when he moved his Amendment to find that having adopted a system of classification exactly as he says—the Standard Industrial Classification was used for the S.E.T.—that all sorts of anomalies and nonsenses have been thrown up.
  This, I point out to him as kindly as I can, is an inevitable concomitant of any policy that seeks to intervene and discriminate. It is not possible to discriminate in the way in which the Government have attempted to do over and over again, and to draw distinctions which will result in rational answers. Inevitably, they are left wallowing in irrationality, and wallowing, if I may respectfully say so, as the Minister of State has done this evening, in attempting to explain the inexplicable and defend the indefensible.
  7.45 p.m.
  Another anomaly was brought out by my hon. Friends the Members for Harrow, West (Mr. John Page) and for Honiton (Mr. Emery) in drawing to the attention of the Committee, which they did with great force, the fact that in relation to synthetic rubber the Government have taken but one subhead out of the whole list of subheads in Section 1 of Chapter 40, where all the other headings are exempt—natural rubber, natural rubber latex, pre-vulcanised natural rubber latex balata, guttar perchar, reclaimed rubber, waste and parings, unhardened rubber, and so on. These are all excluded from the deposit but synthetic rubber latex—40.02—is not.
  The Minister of State tried to defend this on the ground that we were dealing with a manufactured product, and so we

  1615
  are, but this seems to have regard not to the nature of the product—and what we are talking about as raw materials—but to the nature of the process by which the product is arrived at. On the one hand, one has the natural product drawn from tapping rubber trees and, on the other hand, one has a processed product. My hon. Friend the Member for Harrow, West strengthened his case by pointing out that reclaimed rubber, which is exempt from the deposit, may still have undergone more processing than the synthetic rubber. That is what I mean by saying that the Government are driven to defending the indefensible and explaining the inexplicable.
  Again, my hon. Friends the Members for Wycombe (Mr. John Hall) and for Worcestershire, South (Sir G. Nabarro) have put their fingers firmly on a third anomaly, because if one is to draw distinctions between goods which are exempted from paying the deposit and goods which pay the deposit, one will inevitably result in penalising components which are imported for the manufacture of products which, if they themselves were imported, would be free. That is what my hon. Friend the Member for Worcestershire, South tried to point out to the Minister of State over and over again. The case is unanswerable, therefore my hon. Friend got no answer.
  This is a further inevitable anomaly that will result. When one is dealing with manufactured products one can, perhaps, in a chain of products that has been drawn up, make sure that one does not subject to import deposit a product where one has exempted a product further down the manufacturing line, but when one starts exempting a whole range of foodstuffs, including manufactured and processed foodstuffs which themselves require components which may or may not be imported, one is inevitably laying up for oneself a trap and an anomaly. It may be that the question of "bangers" from abroad, of regenerated cellulose sausage skins, is a rather bizarre example, but it clearly illustrates exactly the kind of anomaly that such a scheme as this creates.
  I do not know whether the right hon. Member for Sowerby intends to press his Amendment to a Division. I hope that he will, because he made, if I may say so, a powerful speech. If he does not, I understand, Mr. Irving, that you indicated that you would allow a separate Division on Amendment No. 58. I cannot do otherwise than advise my hon. and right hon. Friends to divide on which-so-ever Amendment is put for a Division.
  Question put, That the Amendment be made:—
  The Committee divided: Ayes 138, Noes 210.

  Division No. 23.]

  AYES

  [7.48 p.m.

  Alison, Michael (Barkston Ash)

  Dean, Paul

  Hirst, Geoffrey

  Allason, James (Hemel Hempstead)

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

  Holland, Philip

  Awdry, Daniel

  Dodds-Parker, Douglas

  Hordern, Peter

  Baker, W. H. K. (Banff)

  Eden, Sir John

  Hunt, John

  Beamish, Col. Sir Tufton

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

  Hutchison, Michael Clark

  Bell, Ronald

  Emery, Peter

  Iremonger, T. L.

  Biffen, John

  Errington, Sir Eric

  Irvine, Bryant Godman (Rye)

  Blaker, Peter

  Eyre, Reginald

  Jenkin, Patrick (Woodford)

  Boardman, Tom (Leicester, S.W.)

  Farr, John

  Jennings, J. C. (Burton)

  Body, Richard

  Fletcher-Cooke, Charles

  Johnson Smith, G. (E. Grinstead)

  Boyle, Rt. Hn. Sir Edward

  Fortescue, Tim

  Joseph, Rt. Hn. Sir Keith

  Braine, Bernard

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

  Kaberry, Sir Donald

  Bruce-Gardyne, J.

  Giles, Rear-Adm. Morgan

  Kerby, Capt. Henry

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

  Gilmour, Ian (Norfolk, C.)

  Kimball, Marcus

  Buck, Antony (Colchester)

  Gilmour, Sir John (Fife, E.)

  King, Evelyn (Dorset, S.)

  Bullus, Sir Eric

  Glover, Sir Douglas

  Kirk, Peter

  Burden, F. A.

  Cower, Raymond

  Knight, Mrs. Jill

  Campbell, B. (Oldham, W.)

  Grant-Ferris, R.

  Lancaster, Col. C. G.

  Carlisle, Mark

  Gresham Cooke, R.

  Legge-Bourke, Sir Harry

  Channon, H. P. G.

  Curden, Harold

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

  Clark, Henry

  Hall, John (Wycombe)

  Lubbock, Eric

  Clegg, Walter

  Hall-Davis, A. G. F.

  MacArthur, Ian

  Cooke, Robert

  Hamilton, Michael (Salisbury)

  Maclean, Sir Fitzroy

  Costain, A. P.

  Harrison, Brian (Maldon)

  McNair-Wilson, Patrick

  Crowder, F. P.

  Harrison, Col. Sir Harwood (Eye)

  Maginnis, John E.

  Cunningham, Sir Knox

  Harvey, Sir Arthur Vere

  Marten, Neil

  Currie, G. B. H.

  Hastings, Stephen

  Maude, Angus

  Dalkeith, Earl of

  Heald, Rt. Hn. Sir Lionel

  Maudling, Rt. Hn. Reginald

  Davidson, James (Aberdeenshire, W.)

  Heseltine, Michael

  Mawby, Ray

  d'Avigdor-Goldsmid, Sir Henry

  Hiley, Joseph

  Maxwell-Hyslop, R. J.

  Mills, Peter (Torrington)

  Price, David (Eastleigh)

  Tapsell, Peter

  Mills, Stratton (Belfast, N.)

  Pym, Francis

  Temple, John M.

  More, Jasper

  Quennell, Miss J. M.

  Tilney, John

  Morgan, Geraint (Denbigh)

  Ramsden, Rt. Hn. James

  Turton, Rt. Hn. R. H.

  Munro-Lucas-Tooth, Sir Hugh

  Rees-Davies, W. R.

  Waddington, David

  Murton, Oscar

  Renton, Rt. Hn. Sir David

  Webster, David

  Nabarro, Sir Gerald

  Rodgers, Sir John (Sevenoaks)

  Wells, John (Maidstone)

  Noble, Rt. Hn. Michael

  Rossi, Hugh (Hornsey)

  Whitelaw, Rt. Hn. William

  Onslow, Cranley

  Royle, Anthony

  Williams, Donald (Dudley)

  Osborn, John (Hallam)

  Russell, Sir Ronald

  Wills, Sir Gerald (Bridgwater)

  Osborne, Sir Cyril (Louth)

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

  Winstanley, Dr. W.P.

  Page, Graham (Crosby)

  Silvester, Frederick

  Wolrige-Gordon, Patrick

  Page, John (Harrow, W.)

  Smith, Dudley (W'wick & L'mington)

  Worsley, Marcus

  Pardoe, John

  Speed, Keith

  Pearson, Sir Frank (Clitheroe)

  Steel, David (Roxburgh)

  TELLERS FOR THE AYES:

  Peel, John

  Stoddart-Scott, Col. Sir M.

  Mr. Bernard Weatherill and

  Pink, R. Bonner

  Summers, Sir Spencer

  Mr. Humphrey Atkins.

  Powell, Rt. Hn. J. Enoch

  NOES

  Abse, Leo

  Ennals, David

  McBride, Neil

  Albu, Austen

  Evans, Fred (Caerphilly)

  McGuire, Michael

  Allaun, Frank (Salford, E.)

  Evans, Gwynfor (C'marthen)

  McMillan, Tom (Glasgow, C.)

  Alldritt, Walter

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

  MacPherson, Malcolm

  Allen, Scholefield

  Fernyhough, E.

  Mahon, Peter (Preston, S.)

  Anderson, Donald

  Finch, Harold

  Mahon, Simon (Bootle)

  Archer, Peter

  Fitch, Alan (Wigan)

  Manuel, Archie

  Ashley, Jack

  Fletcher, Ted (Darlington)

  Mapp, Charles

  Ashton, Joe (Bassetlaw)

  Foley, Maurice

  Marks, Kenneth

  Atkins, Ronald (Preston, N.)

  Ford, Ben

  Mason, Rt. Hn. Roy

  Atkinson, Norman (Tottenham)

  Forrester, John

  Mellish, Rt. Hn. Robert

  Bagier, Gordon A. T.

  Fowler, Gerry

  Mendelson, John

  Barnett, Joel

  Freeson, Reginald

  Millan, Bruce

  Beaney, Alan

  Galpern, Sir Myer

  Milne, Edward (Blyth)

  Benn, Rt. Hn. Anthony Wedgwood

  Gardner, Tony

  Morgan, Elystan (Cardiganshire)

  Bidwell, Sydney

  Garrett, W. E.

  Morris, Alfred (Wythenshawe)

  Binns, John

  Gordon Walker, Rt. Hn. P. C.

  Morris, Charles R. (Openshaw)

  Bishop, E. S.

  Gray, Dr. Hugh (Yarmouth)

  Morris, John (Aberavon)

  Blackburn, F.

  Greenwood, Rt. Hn. Anthony

  Moyle, Roland

  Blenkinsop, Arthur

  Gregory, Arnold

  Neal, Harold

  Boardman, H. (Leigh)

  Grey, Charles (Durham)

  Newens, Stan

  Booth, Albert

  Griffiths, David (Bother Valley)

  O'Malley, Brian

  Braddock, Mrs. E. M.

  Griffiths, Will (Exchange)

  Orme, Stanley

  Brooks, Edwin

  Hamilton, James (Bothwell)

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

  Broughton, Dr. A. D. D.

  Hamilton, William (Fife, W.)

  Padley, Walter

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

  Hannan, William

  Page, Derek (King's Lynn)

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

  Harper, Joseph

  Paget, R. T.

  Buchan, Norman

  Harrison, Walter (Wakefield)

  Palmer, Arthur

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

  Haseldine, Norman

  Park, Trevor

  Butler, Herbert (Hackney, C.)

  Hazell, Bert

  Parker, John (Dagenham)

  Butler, Mrs. Joyce (Wood Green)

  Henig, Stanley

  Pavitt, Laurence

  Cant, R. B.

  Herbison, Rt. Hn. Margaret

  Pearson, Arthur (Pontypridd)

  Carmichael, Neil

  Hilton, W. S.

  Pearl, Rt. Hn. Fred

  Castle, Rt. Hn. Barbara

  Hobden, Dennis

  Pentland, Norman

  Chapman, Donald

  Howarth, Robert (Bolton, E.)

  Perry, George H. (Nottingham, S.)

  Coe, Denis

  Howell, Denis (Small Heath)

  Prentice, Rt. Hn. R. E.

  Coleman, Donald

  Huckfield, Leslie

  Price, William (Rugby)

  Corbet, Mrs, Freda

  Hughes, Rt. Hn. Cledwyn (Anglesey)

  Randall, Harry

  Craddock, George (Bradford, S.)

  Hughes, Emrys (Ayrshire, S.)

  Roberts, Albert (Normanton)

  Crawshaw, Richard

  Hughes, Hector (Aberdeen, N.)

  Roberts, Rt. Hn. Goronwy

  Cullen, Mrs. Alice

  Hughes, Roy (Newport)

  Robertson, John (Paisley)

  Dalyell, Tam

  Hunter, Adam

  Roebuck, Roy

  Darling, Rt. Hn. George

  Hynd, John

  Rogers, George (Kensington, N.)

  Davies, Ednyfed Hudson (Conway)

  Jackson, Peter M. (High Peak)

  Rose, Paul

  Davies, G. Elfed (Rhondda, E.)

  Janner, Sir Barnett

  Ross, Rt. Hn. William

  Davies, Dr. Ernest (Stretford)

  Jay, Rt. Hn. Douglas

  Rowlands, E.

  Davies, Harald (Leek)

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

  Shaw, Arnold (Ilford, S.)

  Davies, Ifor (Gower)

  Jenkins, Hugh (Putney)

  Sheldon, Robert

  Davies, S. O. (Merthyr)

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

  Shore, Rt. Hn. Peter (Stepney)

  Delargy, Hugh

  Jones, Dan (Bumley)

  Short, Mrs. Renée (W'hampton, N.E.)

  Dell, Edmund

  Jones, T. Alec (Rhondda, West)

  Silkin, Rt. Hirt. John (Deptford)

  Dempsey, James

  Kenyon, Clifford

  Silkin, Hn. S. C. (Dulwich)

  Dewar, Donald

  Lawson, George

  Silverman, Julius

  Diamond, Rt. Hn. John

  Ledger, Ron

  Skeffington, Arthur

  Dickens, James

  Lee, Rt. Hn. Frederick (Newton)

  Slater, Joseph

  Dobson, Ray

  Lee, Rt. Hn. Jennie (Cannock)

  Small, William

  Doig, Peter

  Lee, John (Reading)

  Snow, Julian

  Dunnett, Jack

  Lever, Harold (Cheetham)

  Spriggs, Leslie

  Eadie, Alex

  Lewis, Arthur (W. Ham, N.)

  Steele, Thomas (Dunbartonshire, W.)

  Edelman, Maurice

  Lewis, Ron (Carlisle)

  Strauss, Rt. Hn. G. R.

  Edwards, Robert (Bilston)

  Lomas, Kenneth

  Summerskill, Hn. Dr. Shirley

  Edwards, William (Merioneth)

  Loughlin, Charles

  Swain, Thomas

  Ellis, John

  Lyons, Edward (Bradford, E.)

  Symonds, J. B.

  1618

  1619

  Taverne, Dick

  Watkins, Tudor (Brecon & Radnor)

  Williams, Mrs. Shirley (Hitchin)

  Tinn, James

  Wellbeloved, James

  Willis, Rt. Hn. George

  Tomney, Frank

  Wells, William (Walsall, N.)

  Woodburn, Rt. Hn. A.

  Tuck, Raphael

  Whitlock, William

  Woof, Robert

  Urwin, T. W.

  Wilkins, W. A.

  Varley, Eric G.

  Willey, Rt. Hn. Frederick

  TELLERS FOR THE NOES:

  Wainwright, Edwin (Dearne Valley)

  Williams, Alan (Swansea, W.)

  Mr. Ernest Armstrong and

  Wallace, George

  Williams, Clifford (Abertillery)

  Mr. Ernest G. Perry.

  Watkins, David (Consett)

  Sir G. Nabarro: I beg to move Amendment No. 118, in page 7, line 10, at end insert:

  44.15

  …

  …

  Plywood, blockboard, laminboard and battenboard and similar laminated wood products (including veneered panels and sheets); inlaid wood and wood marquetry.

  The Chairman (Mr. Sydney Irving): With this Amendment we are to discuss Amendments Nos. 59, in page 7, line 9, after '44.12' insert 'and 44.15'.
  No. 60, in page 7, line 10, at end insert:

  44.25

  …

  …

  Tool broom and brush handles.

  No. 88, in page 7, line 10, at end insert:

  44.13

  …

  …

  Wood (including blocks, strips and friezes for parquet or wood block flooring not assembled) planed, tongued and grooved, rebated, chamfered, V-jointed, centre V-jointed, beaded, centre beaded or the like, but not further manufactured.

  No. 89, in page 7, line 10, at end insert:

  44.14

  …

  …

  Wood sawn lengthwise, sliced or peeled but not further prepared of a thickness not exceeding 5 mm; veneer sheets and sheets for plywood of a thickness not exceeding 5 mm.

  No. 90, in page 7, line 10, at end insert:

  44.18

  …

  …

  Reconstituted wood, being wood shavings, wood chips, sawdust, wood flour or other ligneous waste agglomerated with natural or artificial resins or other organic binding substances in sheets blocks or the like.

  No. 128, in page 7, line 10, at end insert:
  Boxboards and other wood sawn lengthwise, sliced or peeled, but not further prepared, of a thickness not exceeding five millimetres, and used for box manufacture, within 44.14.
  Imported unassembled softwood boxboards within 44.21.
  No. 129, in page 7, line 10, at end insert:
  Finger jointed sawn timber, within 44.28.
  No. 132, in page 7, line 10, at end insert:

  44.21

  …

  …

  Complete wooden packing cases, boxes, crates, drums and similar packings imported assembled, unassembled or partly assembled—

  (a) imported unassembled, and consisting of softwood boxboards—

  (i) dove-tailed, mortised or tenoned at the ends,

  (ii) other;

  (b) other

  No, 130, in page 7, line 10, at end insert:
  Canadian Lumber Standard timber within 44.13.
  and No. 127, in page 7, line 10, at end insert:

  44.22(C)

  …

  Used barrels of oak whether assembled or not, staves and barrel heads being parts of such barrels.

  Sir G. Nabarro: I propose to address myself, first, to the importance of wood in our national economy, and the figures I shall employ are massive compared with those of earlier Amendments. During 1968, imports of wood and wood products will amount to about £326 million, which is a figure far larger than those associated with any earlier Amendments. That figure includes items which are exempt from import deposits and I delineate those at once as being 44·01 to 44.12, described as wood not planed or further manufactured, and 45.01 and 45.02 natural cork and waste cork. Broadly, those are in Division 24 of Imports in the Overseas Trade Accounts of the United Kingdom.
  The Amendment seeks to add to those items in Division 24 a group of timber products which are only part manufactured in the crudest sense and which are extensively used for essential purposes in the United Kingdom and in connection with our export trade.

  1621
  I expressed these apprehensions when speaking to the ways and Means Resolution on 26th November:
  "The Order means that the Government will take millions of pounds in import deposits from plywood importers in respect of raw materials which are then reconverted and used for packaging essential British exports on an economic basis to go all over the world."—[OFFICIAL REPORT, 26th November, 1968; Vol. 774, c. 261.]
  Earlier, I had referred to the use of plywood for a wide range of building and construction purposes.
  8.0 p.m.
  I wish first, to establish the contradistinction between the exempted and non-exempted items. Broadly, the exempted items are raw lumber. The timber trade may call them short ends, deals, or sleeper blocks, but, in other words they are felled trees, from the Soviet Union, Sweden or Finland, for example, if they are softwoods, and from West Africa, North America and elsewhere if hardwoods. They are trees which have been converted in a primary sense, roughly cut in section to rectangular shape, shipped in that shape, rough sawn, to this country. That timber has been excluded from the import deposit arrangements.
  Broadly, that timber falls within section 2 of Division 24 in the Overseas Trade Accounts of the United Kingdom, and it amounts in value of imports to £230 million sterling in this year, 1968, the figures being based on the first 10 months and grossed up to give the appropriate figure for the full year. Thus, £230 million worth of imports would be outside the import deposit scheme this year.
  There is then another large group, the group to which the Amendment refers, which falls within Division 63 of the Overseas Trade Account of the United Kingdom. I shall quote what is there said, since it relates fairly closely to the Amendment. It comprises
  "Plywood, blockboard, laminboard, batten-board, and similar laminated wood products (including veneered panels and sheets), inlaid wood and wood marketry, cellular wood panels".
  Again grossing up the imports to the full year, basing the figure on the intake during the first 10 months, we have a figure in Division 63 of £96 million. Thus, £230 million-worth of wood and wood products would be exempted from the import deposits arrangement, where-
  1622
  as £96 million-worth would attract the import deposit.
  My claim and that of my right hon. and hon. Friends is that plywood and associated products are truly raw materials. This large volume of plywood brought into the country saves vast quantities of timber. The timber I allude to here is rough sawn timber, principally in the form of softwoods. For example, the tendency during the past 20 years has been for nearly all the packages which carry exports from this country to be switched gradually from softwood to ply. wood packing cases. The reason is that plywood saves a great deal in shipping cube compared with the much bulkier softwood largely used in pre-war days.
  Although both softwood and plywood are imported for this purpose, one must bear in mind that with plywood wastage in the conversion of the trees largely takes place overseas before it is shipped to us, whereas the softwood is largely converted, with consequent wastage, in this country.
  In the context of this large user of both softwood and plywood—but most largely of plywood—it is grossly uneconomic to ask importers of plywood who will convert that material for export packaging to find 50 per cent. of the ad valorem landed cost of the plywood as a deposit for 180 days.
  I should be out of order, as we established during earlier debates, if I strayed to the later Amendment which, in broad terms, would provide that any raw materials brought into this country which are subsequently for export may be relieved of the import deposit. All I do at this stage is make a passing reference to it. If a timber importer brings in 1,000 bales of plywood—we all know what a bale of plywood looks like—he then sells that plywood partly for the manufacture of export packages, partly for purposes in connection with house building and partly for construction, mainly civil engineering construction purposes—for instance, to make contract shuttering for concrete members in civil engineering works, road buildings and the rest.
  It is utterly impossible for that primary timber importer in Manchester, Liverpool or any of the other great timber centres to declare at the moment of

  1623
  import that of, say, £100,000 worth of plywood which he is bringing in from Finland or the Soviet Union, he will undertake that the whole will ultimately be used for export purposes. He cannot do it. A major part of the plywood may be used for construction purposes, another major part may be used for house building and similar work, and a further part may be used ultimately for export purposes.
  Mr. Harold Lever: This is an important point. I want to assist the hon. Gentleman. He is back again—I do not complain—on the point which depends on the value of the Government Amendment dealing with exemption where export or export equivalent is to take place. If he has a dissatisfaction, his dissatisfaction must be with that Amendment. Although he may have a separate complaint regarding plywood in the sense which he is now putting it, he will be much better off, if he wants an answer from me, if he raises it, with his usual acumen, when we come to the Amendment which gives me power to do something for him. I suggest that he will be far happier with his reply if he waits until we are discussing that Amendment.
  Sir G. Nabarro: I am grateful to the hon. Gentleman, but I am in difficulty here because I cannot talk about that Amendment. All I can say is that it does not meet the case which I am now putting.
  Before going further, perhaps I should say that I have no interest to declare in the matter, as I have left the timber trade now, although I spent 20 years in it and know it intimately. The point is that it is impossible for a big importer to say in advance how much of the timber which he is bringing in will ultimately find its way into purposes which can be classified as contributing to the export trade.
  In any event, the inherent inflationary effect of the 50 per cent. deposit for 180 days in putting up the basic price of plywood by 2½ per cent. will result in substantial increases in the cost of these products. In the case of some plywoods, it amounts to an increase in price of as much as 5s. per 100 ft. All that increase must be attributed to essential purposes in this country because
  1624
  plywood, in view of its expensive character, is never used for anything but an absolutely indispensable purpose.
  I quote an example from random. It may be within the knowledge of many hon. Members that the second stage of the High Wycombe by-pass is nearing completion. There is a long viaduct there on the A40 road to Oxford. It is a huge civil engineering works and it comprises very largely reinforced concrete members which were fabricated on the site by pouring concrete into shuttering, the shuttering being the form piece to create the shape of the large structure which is to carry the road. All that shuttering is made in expensive plywood. All of it will rise in price by 2½ to 3 per cent. as a result of this import deposit arrangement. I think that that is incontrovertible.
  The ultimate use of plywood for export packaging is widespread and millions of pounds worth of plywood is used for that purpose every year. It is in connection not only with exports that I plead the case, but the very inflationary effect which the scheme will have on the cost of civil engineering construction and house building, which cannot escape the influence of the price increase as a result of the later Government Amendment.
  I wish to say a few words about the invidious contradistinction between softwood timber and plywood. I suppose that timber technologists have spent the last 30 years encouraging the use of plywood because it is so much more efficient and economic for a wide range of constructional and packaging purposes than softwood or hardwood. The very act of excluding softwoods from and including plywoods in the import deposit scheme discriminates against timber efficiency. We should be doing exactly the opposite.
  If the Financial Secretary claims that plywood is a manufactured commodity because three veneers have been glued together—
  Mr. Harold Lever: Five.
  Sir G. Nabarro: Sometimes five, but most plywood to which we refer is three-ply.
  Plywood can be 3, 4, 5, 6, 8, 9, or 12 millimetre. Its thickness can vary. Generally, the thicker it is the more veneers there are and the more gluing there is.

  1625
  The off-cuts are used to make blockboard, laminboard, and so on. But plywood is hardly a manufactured article, any more than a softwood deal coming into this country is a manufactured article. The tree is chopped down in Russia and is put through a large band mill. The waney edge of the timber is taken off on four sides, thereby making the section of the timber rectangular. It is cut to lengths of 6, 9, or 12 feet.
  All those manufacturing processes are carried out in the Soviet Union, Sweden, Finland, or whatever the timber-producing country may be, before the sawn deals are shipped to this country. Yet we discard all that and say that these deals are not manufactured and exempt them from the import deposit scheme. The same country, Russia, fells the tree, brings to the timber mill, lops to a length of perhaps 18 or 24 ft., puts a spike in each end of the log and rotates the log against a peeling knife so that a veneer of wood flows from the log. That veneer is then dried, steamed and glued to another veneer of wood. It is then trimmed and sent to this country and is called plywood.
  It is argued by the Treasury that the deals or softwood are less fully manufactured than plywood.
  Mr. Harold Lever: It seems so from the hon. Gentleman's description.
  8.15 p.m.
  Sir G. Nabarro: I do not think that it does. The processes are approximately equal. Throughout the scheme there is the invidious distinction made between manufactured timber products and the exempted items of wood products to which I referred at the beginning of my speech.
  I said that wood and wood product imports this year will total £326 million, of which £230 million worth would have been exempted from the import deposit scheme and £96 million worth would be made the subject of import deposits. But, that figure will be diminished if the Government's Amendment is carried exempting from the scheme those items which ultimately find their way into exports. I should have thought that in the interests of the efficiency of British industry, trade and commerce it would be wise to exempt all wood and wood products,
  1626
  except furniture, which does not come into the figures to which I have alluded; it is entirely separate. I should have thought that, in the interests of general efficiency, it would have been wiser to exempt wood and wood products coming into this country which form the largest single commodity with which we deal in our Amendments.
  For these reasons, I hope that Amendment No. 118, at least, will be acceptable to the Treasury.
  Mr. Arnold Gregory: I listened with great interest to the hon. Member for Worcester, South (Sir G. Nabarro). I do not claim to have an expert knowledge of the industry, but I have a deep constituency interest in it. I do not intend to take up the hon. Gentleman's argument. It was essentially a global argument dealing with colossal figures.
  I wish to refer specifically to how the import deposit scheme applies to plywoods, including the range of laminated wood used in the furniture-making industry. Since I shall refer to things like roomliners and unit furniture, it will be appreciated that this is a specialised part of the industry. I emphasise the point made by the hon. Member for Worcestershire, South that there is a strong argument within the industry that this is a raw material. I shall say later why those in the industry stress this point, but first I wish to describe the magnitude of the problem.
  I discussed the problem with people in the furniture-making industry only a few days ago. This specialised part of it is growing. My area is not a development area, but in Stockport and North-East Cheshire generally there has been a lot of diversification and new industries are emerging. There is the obvious feeling that if investment is made in a new industry and machinery is bought and installed the best must be made of it.
  I am referring essentially to small firms.
  Stress has been laid on the fact that the wood products are shaped in a highly competitive market for export purposes. Roomliners made by the firm of Peak Joinery Limited, of Stockport, are being sold in difficult export markets. The firm has to go to the length of filing away in shaping the product for sale in areas like

  1627
  Sweden, West Germany and the United States, the very countries which themselves export the raw material for making it up.
  There is, furthermore, a re-export process. In many cases, if it is desired to sell a highly sophisticated article of this nature for a world market in which there is keen competition, it is re-exported to Italy for relaying for veneer purposes. Polished woods of a particular nature are applied to finish the goods for this special market.
  The firm to which I have referred claims—I think, with justification—that the import deposit system will set it back in three respects. First. it wishes to make a still bigger challenge in the market and has had five years of development to prepare for this. Secondly, the company wants to continue an expansion programme in the industry. Thirdly, an aspect which we do not want to see anywhere, certainly not in my area, is the run down of the growing labour force.
  Plywood is imported from Finland and some has come from the Soviet Union. Dealings in softwood have been extended to as many markets as possible, but the main import is from Sweden. We re-export the finished article, in the form of furniture to that country.
  By virtue of having within the furniture industry a fall-out from the main activity, there is a demand for new types of woodworking machinery to meet the need. The company in question feels that if this were to reach the global terms mentioned by the hon. Member for Worcestershire, South, not only would the field be limited to a relatively small firm in Stockport, but there could be an influence on the much greater engineering industry to meet the demands for this new industry at home.
  In a letter confirming a conversation of mine a few days ago, Peak Joinery states that:
  "Our aim was to be the fulfilment of two separate but interrelated two-year plans. The first was implemented on 1st June, 1967, with the intention of consolidating the home market to a turnover of £750,000 per annum. Subject to the success of stage 1, the second plan is the exploitation of the export potential in Sweden, West Germany and the United States of America".
  That is no mean effort. It is up to the House and the Government to ensure
  1628
  that firms like this shape themselves in future in these terms. In no circumstances should we in any way hinder them.
  "Wih regard to exports"—
  writes the company—
  "our plan was to commence on 1st June, 1969, but due to the success of stage 1, we have already been able to undertake preliminary negotiations for an agency in Sweden and anticipate the contract, worth a minimum of £50,000 per annum, which will be completed in the next three weeks. This contract has taken six months of protracted negotiations and cost approximately £2,000 of our resources."
  The firm points out that it is preparing to sell its product on the basis of an expanding operation to meet the autumn and winter mail order trade in the United States.
  In referring to what is done in West Germany, Peak Joinery states that:
  "Our preliminary market researches show that in two years from June, 1969, we could reasonably expect to build up level to 1 million per annum by opening 10 branches in strategically placed cities."
  I could continue quoting from the letter to show how the exercise of this firm will be hampered by the restrictions to be imposed under the Bill. The company tells me that there will be cancellation of export projects for at least 12 months and a reduction of output for the home market in 1967–68.
  Mr. Harold Lever: I should like to be able to reply to my hon. Friend's satisfaction. Do I understand the letter to mean that those export projects will be frustrated because of the import deposits which the firm will have to pay on the materials to be processed for re-export? If that is the fact, I remind the hon. Member that the Government have put down a later Amendment to deal with precisely this problem. To the extent that my hon. Friend is addressing himself to that matter, perhaps he would like to contribute to the later debate upon it.
  Mr. Gregory: My hon. Friend is very helpful. The company will be pleased to know what he has said and I will not. therefore, develop that part of the argument at too great length.
  On the direct usage side, the company's concern was that in having to pay out so much money, it did not want to make a practice of borrowing from the bank for support in whatever was demanded by the new system of payments. This it has not done so far.

  1629
  The company expects a reduction in its labour force of from 160 to 100 employees, and the cancellation of plant and machinery investment for 1968–69 will represent a loss of engineering investment in terms of 25,000 men. This would be tragic.
  In view of what my hon. Friend the Financial Secretary has said, and in view of the time factor in dealing with so large a group of Amendments, I merely express the hope that the Government will give special consideration to the position as it affects plywoods and laminated woods, bearing in mind the global argument but remembering also that in some areas a new export trade is emerging and is producing a new line of products. The company could certainly he hampered in what it wants to do.
  Mr. James Allason: I wish to support the important case made by my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro.) and, perhaps, to take it a little further. My four Amendments would extend the area in Chapter 44.15 which my hon. Friend has discussed.
  It must be realised that other timber imports should be considered, and I suggest that they should be considered against the background that certain wood is exempt, as explained by my hon. Friend. I am speaking of wood not planed or further manufactured. We ought to remember the test which the Government apply to this, for these are materials which have gone through some elementary process. It is a very great pity that there is no Minister here at the moment from the Board of Trade, because while I have deep respect for the Financial Secretary to the Treasury, nevertheless, it is in the Board of Trade that they have knowledge of just how much manufacturing does take place in these wood products.
  8.30 p.m.
  I will deal with Amendment No. 60 about tool broom and brush handles. There is in the Board of Trade a sample of a brush handle such as is imported by a firm in my constituency, William Turner and Co., manufacturers of industrial wire brushes. I am very glad to see that a Minister from the Board of Trade has now arrived, just in the nick of time.
  1630
  These brush handles are pieces of wood only very roughly shaped, but are, nevertheless, essential raw materials for the brush industry. They have in the past been manufactured in the United Kingdom, but they are difficult to obtain now. One firm has gone out of production, and the other firm making them is finding such extreme difficulty in producing them that it recently doubled its prices and has had to quote two to three months delivery, which is pretty unsatisfactory for the delivery of raw materials to any industry. Now, that firm has found a source in Denmark, and that source will be supplying at 60 per cent. of the price which would have had to be paid in Britain, but now the firm finds that items which it receives will be subject to the import deposit scheme.
  That firm, as a small firm, will be up against the whole difficulty of finding finance to meet the scheme. I want to deal later with the general point about the implications of the scheme for small businesses, but in general terms I suggest that something which is only very slightly manufactured should be exempt from the scheme.
  I turn to Amendment No. 88 which deals with planed or jointed hardwood or softwood. A great deal of this is under Canadian lumber standards and is timber which is slightly manufactured and is used for industrialised building. At least, that is one of its main uses, but that is not exclusively its use. It is cheaper than sawn timber because it is further shaped than ordinary sawn timber which my hon. Friend was describing, and so has lost a lot of its bulk and therefore is cheaper in freight. The other reason why it is cheaper is that the waste material from it is of value and is used elsewhere. So here we have timber which really ought to be exempt as well.
  There is a new form of timber which is finger jointed goods. This is a method of joining short lengths of timber together in order to make longer lengths. This saves importing long lengths and then chopping them down to the size required and so wasting a considerable amount, and, because of this saving, it is economical, and, therefore, of value to this country. Otherwise, it has no advantage over the comparable solid length. I suggest it ought to be treated in the same way as sawn timber.

  1631
  Amendment No. 89 deals with veneer sheets. My hon. Friend the Member for Maidstone (Mr. John Wells) tells me he wishes to speak on that and therefore I will leave it.
  Mr. John Wells: No. Go on.
  Mr. Allason: The simple case is that veneer, as described by my hon. Friend the Member for Worcestershire, South, is just sliced from the solid sawn timber, but it is still timber and barely manufactured at all, and in those circumstances it would be much more sensible to treat it as sawn timber.
  Amendment No. 90 deals with particle board. Here, there are some very substantial imports. This year 200,000 tons will be coming in to the value of from £9 million to £10 million. This is used for the building and construction industry, for the furniture industry and for the caravan building industry. There is no effective replacement for the furniture industry, and for the other industries the alternative is more expensive or imported substitutes. The home production of roughly 40 per cent. of requirements is fully committed at the moment and for the first part of 1969. It is quite clear that this is a raw material needed by industry, and I hope therefore that that too may be exempt.
  I am still trying to clear my mind as to the main purpose of the scheme. Is it to discourage unnecessary imports? I think this is so. The Financial Secretary spoke as if the mopping up pools of liquidity was the main purpose of the scheme, but this cannot be so. If he wanted to mop up pools of liquidity he could do so by much simpler means than by this elaborate process of involving firms which want to import in the immense intricacies of depositing money and trying to borrow it from somewhere.
  The small businessmen will not be able to get the necessary loans, and I fear that a large number will have to close shop for lack of raw materials. The Government say that they will keep this under review; so that, presumably, when small businesses close and unemployment is created, they will start to do something about it. Surely the time to do something about it is before that happens. I suggest that the view of the Board of Trade that anything handled and pro-
  1632
  cessed, other than where there has been a very elementary process, ceases to be a raw material, is now out-of-date. Raw materials for industry are sometimes quite sophisticated, and the Board of Trade ought to know this. Where a good case is made for exemption, surely it is better to err on the side of generosity and grant the exemption than to go the other way.
  We must remember that when many small businesses have been ruined, the goods which they made in the past will still be in demand, and there will be only one source of supply, from overseas. There will then be a greater demand for imports than if the scheme had never been introduced. Therefore, let us exempt the raw materials of industry rather than run the risk of having to import finished goods. I appeal to the Government to think again.
  Mr. Arthur Blenkinsop: I intervene briefly more for information than for anything else. I have had constituency representations on this matter, many of which have already been met by the Government, but I am still concerned about some elements.
  If the deposit scheme resulted in the greater development of our own plywood-making industry, I would welcome it, but, as I understand it, this represents only a minute proportion of the total user and, certainly for any immediate purposes, this is out of the question. The industry is already more than fully booked for its existing capacity. The main demand in my area is undoubtedly in the shipyards. As I understand it, the point has been met already, but I would be grateful if my hon. Friend could confirm that that is the case. I think it is true that supplies for shipyards will be met by special exemption and that provision is made for exports and re-exports, though whether it will prove adequate no doubt will be argued later.
  There remains the problem of supplies for housing, furniture and all the provisions for housing. Firms who have been in touch with me are concerned that this might lead to considerable shortages of plywood and, as a result, to real difficulties in our housing programme. Naturally, that is a matter which is of considerable concern to me.
  Not only is there the possibility of increased costs but one of shortage of

  1633
  supplies. I would like my hon. Friend to say whether he can assure us, first, about supplies for shipyards and, second, about the fear of a shortage in such an important area of activity as housing.
  Mr. John Wells: I am glad to have the opportunity of following the hon. Member for South Shields (Mr. Blenkinson) in his remarks about shipyards. For a moment, I want to direct attention to Amendment No. 89, because the timber, veneers and plywoods referred to in it are the kind used frequently in smaller boatyards. Will the exemptions outlined in Schedule 2 apply to boatyards as well as to shipyards, and will they enable ship builders to use timber, not as the actual equipment on a vessel, but as part of the equipment for mending and repairing? I raised the specific point with the hon. Gentleman a few days ago when we discussed the Ways and Means Resolution. I would be glad for a clear answer to the point, either now or when we discuss the later Amendments.
  Turning from that point to Amendments Nos. 128 and 132, these are designed to exempt from this impost boxes primarily used by horticulturists and food processors and manufacturers as containers. Kipper curers and many other manufacturers and vendors of foodstuffs pack their products in boxes. Generally speaking, fish boxes have a life several times round, being transported from ports to the fish markets and back again to the ports. However, orchard boxes lie out of doors for longer periods than any other type of food box. Almost inevitably, they have a shorter life and have to be replaced more frequently. I am aware of the trend away from wooden orchard boxes to non-returnable boxes made of cardboard, but the fact remains that wooden boxes are still widely used, not only in apple orchards but in other orchards in the West of England and elsewhere. For that reason, I am glad that the debate on this group of Amendments was initiated by my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro), because it brings to light what is a genuine nation-wide horticultural problem.
  The Financial Secretary gave some very unsatisfactory answers about the lowly mushroom compared with the arrogant caviar. When we come to the containers for these more humble English
  1634
  foodstuffs, particularly bearing in mind the popularity of English apples in this House, I hope that he will be able to give a satisfactory reply. The Government have given way on absolutely nothing so far. This will cost them very little, but it will do a great deal to improve the position of the British horticulturist. I hope, therefore, that we will at last have some enlightenment.
  8.45 p.m.
  Mr. W. H. K. Baker: I wish to address my remarks to Amendment No. 127, standing in my name. As the Financial Secretary knows, I have written to him on this subject. I therefore await his reply with a great deal of interest, if not a good deal of anxiety, as I will endeavour to show.
  The operative industry which I had in mind in tabling this Amendment was the whisky distilling industry in Scotland which has a tremendous revenue producing potential both in the home market and in exports.
  Sir G. Nabarro: Over £100 million a year.
  Mr. Baker: As my hon. Friend rightly points out, more than £100 million a year.
  Sir G. Nabarro: That is exports.
  Mr. Baker: Exports, yes. The raw material—because I maintain that the commodity I am about to remark upon is a raw material and, therefore, should be exempt under the scheme—comes from the United States. Apparently there is a law in the United States forbidding the use of a whisky cask more than once. I do not pretend to know the reason. The cask is made of very close-grained oak. We cannot grow oak of a sufficient texture for that purpose. When a cask has been used, it must, by United States law, be broken down. It is then packaged up and becomes known as a shook. In barrel form a shook is 40 gallons capacity.
  The coopers in the United Kingdom and notably, but not exclusively, in Scotland, make up these shooks into 50 gallon hogsheads. Experience has taught the distillers that whisky is best matured for varying periods, depending on the distiller, in a 50-gallon cask, because that gives the best surface area per gallon,

  1635
  and by that method we get the famous Scottish whisky.
  Shooks need headings. Under Chapter 44.01 to 44.12, wood, not planed or further manufactured, is exempt from the import deposit. We can have as many headings to complete a cask as we like, but we cannot make a whisky cask exclusively out of headings. Therefore, we have an anomaly. If we want to mature our whisky, we have the headings, the top and the bottom of the barrel, but nothing to go between them under the terms of the Bill.
  Independent coopers, of whom, unfortunately, there are a declining number, are finding that their volume of business from the repairing of casks is declining as fast, if not faster, than their business itself. The reason is that blenders and the large distilling companies are employing their own coopers to do the repair jobs on the casks.
  Last week a cooper in my constituency received the following letter from his importing agent in Glasgow:
  "As you will appreciate this"—
  that is, the import deposit—
  "will result in our having to deposit with the Customs Authorities large sums of money, consequently it will be impossible for us to pay these deposits in advance of receiving your remittance."—
  this is the important point—
  "In the circumstances we suggest that the best system which could be adopted is that we will telephone you immediately the amount of Import Deposit required has been calculated, and that you will, by that day's mail, forward to us a cheque in payment of same."
  That is a tall order for a small firm. The amount of capital tied up in a cooperage is not enormous. There is not very much machinery. The work is done by extremely skilled men, and their cash liquidity, if I may use that expression, though it probably offends some of the financial pundits on this side of the Committee, and no doubt on that side, too, is not great, and they cannot, on the receipt of a telephone call, raise the sums of money which are required for the import deposit. We know the stringency of bank lending, on the instructions of the Government. We know how difficult it is for people to raise money in a hurry. That is the basis of the problem.
  1636
  There are three small cooperages, among many others, which work in my constituency as a consortium. They import more than 100,000 shooks per year. They are worth about £120,000, and thus at one time they will find themselves having to lay out £60,000 over 180 days.
  Mr. Harold Lever Mr. Harold Lever indicated dissent.
  Mr. Baker: The Financial Secretary shakes his head.
  Mr. Lever: Half the amount quoted by the hon. Gentleman. Does he wish me to explain?
  Mr. Baker: I agree it should be half the amount I quoted originally.
  If no home grown timber is available, what are the alternatives? Either the coopers have to go out of business, or we have to get some kind of redress for them, and that is why I hope the Government will accept the Amendment. Surely it is contrary to the Government's intentions and policy to affect the export market in any way? This proposal is bound to affect the export of whisky from Scotland to the rest of the world.
  The three firms which I have mentioned employ between them about 90 men. They are all, or nearly all, skilled coopers. These three small firms reckon that unless we can get an alleviation for them, 60 per cent. or 70 per cent. of their staff will quite shortly become redundant. I admit that those are small figures in terms of cash, and in terms of manpower, when considered in the wider national context, but they are extremely important for a small country area which I have the honour to represent.
  This morning I received a letter from the managing director of one of these small firms. He said:
  "… to offset the disastrous impact of this new charge we will be faced with the necessity of cutting down our labour force by 60 to 70 per cent., thereby making it almost impossible to carry on production at all, and certainly impossible to meet our customers' demands for delivery within a specified time."
  I therefore hope that the Government will see fit to include shooks for exemption under the terms of the Bill.
  Sir Eric Errington: I wish to refer to Amendment No. 113, which deals with things known as ebauchons, pieces of briar root which

  1637
  have been cleaned, boiled, partly dried and sawn into convenient shapes and sizes for transportation. The sole reason for boiling and drying them is to prevent rotting during such transportation. It is my contention that it cannot be maintained that these ebauchons are other than raw materials which have not been manufactured in any way. For this reason they should be excluded from the ambit of the Bill.
  It might have been said that ebauchons could be properly classified under the Customs tariff 1959 heading 44.04, wood that is roughly squared or half squared but not further manufactured. They are in the Customs tariff 98.11B,
  "Briar root blocks, roughly shaped by sawing but not further manufactured."
  The peculiar feature of 98.11 is that it deals mostly with smoking requisites including pipes, pipe bowls, cigar and cigarette holders. It would seem, therefore, that this is not in the right place. One of the peculiar features of this entry in the Customs tariff is that under the heading "rate of duty",
  "briar root blocks, roughly shaped by sawing but not further manufactured"
  —that is, ebauchons—are free so far as full rate of duty, and Commonwealth preference and E.F.T.A., are concerned. All the other things mentioned in the tariff list have a substantial percentage of the full rate of tariff.
  Small firms are concerned in this trade, and one is in my constituency. Proportionately, they have a high rate of exports. I am not founding my justification for this Amendment on the high rate of export, but purely on the fact that this is a non-manufactured article which, in my constituency and other places, is manufactured into briar pipes.
  In view of what the Customs tariff of 1959 says, that it is free in regard to all these matters, it must have been left out in error. There is nothing between 92.12 and Chapter 99, all headings. This seems to be a mistake. Whether it is or not, there is full justification for saying that this is not a manufactured article, but a raw material. This firm, my constituents, for whom I am speaking, feels strongly that it will do them great financial harm if full exemption is not granted. I hope the Minister will say something to ease their minds.
  [Mr. HARRY GOURLAY in the Chair]
  9.0 p.m.
  Mr. Frederick Sylvester: My hon. Friend the Member for Aldershot (Sir E. Errington) has mentioned most of the points which I wish to make about briarwood, but there are some others of importance with regard to Amendment No. 113. Following their own logic, the Government are obliged to accept the Amendment and I am confident that they will do so.
  My hon. Friend described how this material is provided, and there can be no serious doubt that the form in which it reaches this country is not manufactured in any material way. It serves as a raw material. During the war, we tried to make pipes from other materials, but I am sure that the Prime Minister would agree that there are very few things that serve so satisfactorily as briar-wood. Beech was used, with unfortunate results.
  Briarwood is indispensable to the industry. It is available only from Mediterranean areas, so there is no question of trying to promote the development of a British source of supply. In these circumstances, the Government must recognise that it is a raw material. It comes in in the only suitable form and is used solely as a base for manufacture. It is not replaceable from any British source and therefore qualifies, on any ground which they could name, as a raw material. I hope that the Minister, in return for my being so brief, will give an even briefer answer and accept the Amendment.
  Mr. John Biffen: This debate has taken on an exotic flavour, with discussions of shooks and ebauchons. I wish to speak more in support of Amendment No. 118, so forcefully moved by my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro).
  In the narrow context of this series of commodities, my hon. Friend highlighted the many disadvantages of the Bill. The first is the immense difficulty, once we have a policy of selectively seeking to identify what we believe to be raw materials or otherwise. The argument that a certain amount of processing of timber is permitted, but that beyond that point it ceases to be raw material and

  1639
  becomes a manufactured product, clearly indicates that the Government recognise that at some point they must make a distinction and that at some point there is a degree of arbitrariness. A very substantial case has been made that the line should be drawn other than where it is now proposed to draw it.
  Although I said that I would not follow the arguments of my hon. Friends the Members for Aldershot (Sir E. Errington) and Walthamstow, West (Mr. Sylvester), I must point out that the case made in respect of Amendment No. 113 seems overwhelmingly powerful. I hope that at least in respect of that Amendment there will be an indication of sympathy and flexibility on the part of the Treasury Bench.
  What worries me is that hon. Members are still discussing this legislation as though it had some capability of import substitution. The hon. Member for South Shields (Mr. Blenkinsop) commented on the difficulty which he foresaw in any import substitution taking place, although he conceded that this could be desirable. It seems to me that it is fallacious to think that there will be any degree of import substitution in a situation in which, on the figures given by my hon. Friend the Member for Worcestershire, South, the cost of the imported product would rise by 2½ per cent. to 3 per cent. and in which, on the Government's professed intention, this is to be a temporary Measure.
  It seems to me that in this situation we are driven to the conclusion—and here I beg to differ slightly from my hon. Friend the Member for Hemel Hempstead (Mr. Allason)—that this is primarily a piece of credit-squeezing legislation which is much more likely to be effective in that context than in any inducement to import substitution.
  Speaking to Amendment No. 118, I am concerned about the effect which the Bill will have on the building and construction industry, because I believe that one of two things will follow: either there will be a diminution in building and constructional activity because of the credit restrictions which will be felt by those intimately concerned with importing those products which are essential to the building and construction industry; or, alter-
  1640
  natively, there will be an increase in building and construction costs. The latter is a prospect which should be particularly daunting within the shadow of the White Paper just issued on local government finance, because any doubt about the very effective squeeze which will be operated in that part of local authority administration concerned with building and construction must have been speedily removed by the publication of that Paper.
  It would be a gesture of some generosity if the Financial Secretary were to accept the Amendment of my hon. Friend the Member for Worcestershire, South and if the Treasury Bench were to show a blinding spasm of good sense and good nature—because I am certain that his own generous and charitable inclinations would lead the Financial Secretary to accept that Amendment and I hope that he will disregard any official advice which he may have had to the contrary.
  Mr. Harold Lever: We have had a wide-ranging and, as I have said previously, closely-argued debate because those who have spoken obviously have close knowledge of their industries. Before dealing with detailed points, perhaps I may be permitted, even at the risk of repetitiveness, to set my remarks in context, because the matter has come up again, although it has been raised before.
  The two purposes in the light of which the Amendments must be seen are, firstly, to bring marginal pressure towards economising on certain imports—and to this end we cover a range of nearly £3,000 million—and, secondly, to bring selective pressure on liquidity by reason of immobilising deposits, month by month, to about £600 million, unless the rate is reduced or further exemptions granted.
  In the light of that—and I do not accept "either/or"—hon. Members opposite seem to be divided into two schools of thought. The first is the school which believes that the mopping-up of liquidity is a characteristic Government chatter, not seriously intended. The second school includes those who believe that it is the heart of the scheme. But both these factors apply—pressure to economise in stock management but not to bar the imports or impose a tariff on them, and the pressure on liquidity which will automatically arise as these deposits mount up. Bearing in mind the second

  1641
  purpose, that of the pressure on liquidity, hon. Members must appreciate that the Government, in taking power to amend the exemption list—to add exemptions or to lower the rate in what is a scheme temporary in intent, in function in relation to the Government's general strategy and in the wording of the legislation—have as their objective to act swiftly and usefully to get the balance of payments more rapidly into surplus.
  In this connection, it becomes important that we do not start the scheme too weakly, because we have no power in the Bill to strengthen it, nor would it be desirable to strengthen it, as we go along. We need to start with a reasonable impact, and we then have power to weaken that impact provided that there is no disruption of a serious kind.
  Hon. Members say that the time to act is before firms are ruined. I agree, and we have power to do so. We shall keep a close and continuous watch in consultation with the Board of Trade and all other interested Departments. We will be in touch and will watch the situation very closely. The powers are not taken for academic reasons or to evade the necessity for adjustment. They are taken for the vital reason that we can make appropriate adjustments, either in volume of the liquidity pressure as a whole by exemption additions or by lowering the rates in some categories and exempting others. That will depend upon the working of the scheme and how the export-import balance moves under its impact, which we believe will be fairly immediate.
  I repeat that I agree that there is no overwhelming logical policy to exempt one article rather than another at particular points. There is a general scheme, which we have outlined more than once, upon which the Government are acting. Conditioning that general scheme is not some absolute theological tying-down to first principles, but an attempt to apply reasonable selectivity in a non-protective way but always bearing in mind that we have to have an aggregate total of nonexempt goods approaching £3,000 million.
  Having conceded that, I still say that there are differences once one has the broad guide of basic materials not subjected to a significant amount of processing and others. I stress the practical
  1642
  consequences to be evaluated as the scheme is in operation rather than the perhaps impossible task at present to prove that one article rather than another should be subjected to the scheme because it has been subjected to more rather than less processing. On the other hand, as a broad guide it is not without its uses.
  9.15 p.m.
  The hon. Member for Worcestershire, South (Sir G. Nabarro) has quoted the very large figures of timber that would be affected. A very serious hole would be driven in the scheme as a whole if we were to exempt plywood and other timbers on the scale suggested in the Amendments. I therefore regret to say that it would need an overwhelming case for me to feel favourably inclined towards accepting the plywood exemption, particularly at this stage, before we have had an opportunity of seeing what the consequences are.
  Let us deal with some of the consequences, about which a very real natural and justifiable anxiety is felt by hon. Members on both sides. The first question is: what about the exports that figured in the arguments advanced by the hon. Member for Worcestershire, South and my hon. Friend the Member for Stockport, North (Mr. Gregory). I hope that, with the leave of the Committee, I can defer argument on this until we come to my Amendment dealing with exports. It is sufficient now for me to say that I believe that that Amendment, when it is proper to consider it, will reveal to the Committee that we have done everything humanly possible to relieve our export trade from the burden of import deposits.
  Sir G. Nabarro: If the importer of the plywood were selling the material wholly and directly to an exporter who was to use it the later Amendment would be satisfactory, but the fact is that millions and millions of pounds worth of this plywood is brought in by timber importers who do not know what the ultimate user and destination of the plywood will be. Probably two-thirds or three-quarters is used in the home market, and therefore would not qualify under the later Amendment, and possibly one-third or one-quarter might find its way into exports at some future indeterminate date. So the

  1643
  whole situation is hypothetical at the moment when the plywood is imported. That is why I say to the Financial Secretary that the later Amendment cannot meet this conundrum.
  Mr. Lever: I do not want to be guilty of dealing with the later Amendment in advance. It has, however, I would respectfully submit, some relevance. I take the hon. Gentleman's point. In deciding whet her or not he presses his Amendment to include plywood the hon. Gentleman might be influenced by the extent of the concession on export goods, and I will try to give him, as far as I properly can, a word or two on the subject.
  When merchants bring in the plywood the rule will still apply if they satisfy the Customs of the percentage of it which is to go to exports. I do not suggest that the Customs will be able to follow every yard of the plywood or ought to try to follow every yard of the plywood. I remember as a lad reading a popular book of that day about the adventures of a 3-guinea watch: we do not want a similar tale of ten square yards of plywood which someone follows to their ultimate and, perhaps, romantic destination in another country. The Customs will deal with the matter with a very broad brush as far as they lawfully can. They are there to help, and with any reasonable evidence as to the ultimate destination coming from the merchant they will be ready to be satisfied and exempt the plywood.
  I do not want to go into more detail, but at least what I have said meets some of the hon. Gentleman's interests and certainly those of my hon. Friend the Member for Stockport, North. It is not beyond the wit of merchants to give evidence of a satisfactory character to the receptive ear of the Customs, who are certainly instructed, and who are certainly anxious, to ensure that as far as they possibly can help they will help to avoid a penny piece of this import deposit falling on exports. I do not say that they should be able to trace every last penny piece, and nor do we want to create waste of time administratively, but there is good sense in the Customs on this matter and a great deal of experience. However, I will enlarge on that more fully when the Amendment itself arises for discussion. I hope that I have satisfied hon. Members
  1644
  that a very liberal Amendment is on its way and, of course, the faster we can get through our work, the sooner we shall come to that enjoyable aspect of the debate when we shall be examining export protection.
  The hon. Member for Hemel Hempstead (Mr. Allason) asked about broom handles. I am afraid that they cannot with any logic be exempt at this stage, although that is not to say that they will not be candidates, like other candidates, for exemption later. He was anxious about mopping up pools of liquidity. I have already dealt with that. It may be a somewhat outlandish and somewhat eccentric and bizarre occupation for the Government to engage in, but I assure him that they are so engaged in it and he may be consoled as to the seriousness of the purpose and possibly the usefulness of the purpose by his hon. Friend the Member for Oswestry (Mr. Biffen), who believes it to be a matter of major importance in the scheme.
  I do not want to go into great detail, but I must say that the case for Amendments Nos. 88 and 89 was one of the strongest which I have heard today. Whereas it would be inconsistent with the principle which I have put before the Committee and which I hope has been sympathetically received, to accept these Amendments until we have had a little more experience of the working of the scheme, I must say—and I do not mind if this is used against me—that there is certainly a case which is worth considering and it will be among those which will get prior examination when we come to operate in the light of practice, if the House sees fit to give the Bill a Third Reading.
  The hon. Member for Aldershot (Sir E. Errington) and the hon. Member for Walthamstow, West (Mr. Silvester) put their case for briar root very forcibly and ably and were it not for the fact that I think that it is a sounder principle not to rely entirely on abstract argument but to have a look a little longer at the operation of the scheme, I would have said that there was a great deal of force in their argument.
  Sir E. Errington: Will the hon. Gentleman deal with what seems to me to be an error? In the Customs tariff for 1959, briar root is free of all rates of duty,

  1645
  and if the Amendment is not accepted the Bill will seem to slap on a duty which was not previously payable.
  Mr. Lever: I am grateful to the hon. Gentleman, because that reinforces our point that this is not a duty in the sense that a tariff is. We would not think of putting a Customs duty on briar root—in fact. we have taken it off—but that does not mean that it should not bear this import deposit which has functions other than that of a duty, which is normally protective in character. It was not a mistake which lead to its being there. I accept that the hon. Gentleman has made a case which will require to be considered at an early date and, while I do not want to raise any false hopes, I can assure him that it will be one of the cases which I shall recommend for consideration with high speed as soon as we get the Third Reading of the Bill.
  Sir K. Joseph: This is such a small commodity with such a minimal impact on the Government's strategy. Will not the hon. Gentleman go so far as to make an exception for this undoubted raw material and let us have one Amendment?
  Mr. Lever: I do not wish to seem obdurate or unfeeling, and I hope that it was clear from my reaction to the hon. Gentleman that my motive was not lack of kindness but a feeling that it would be unwise in the Commitee stage to depart on an individual item. But I promised the hon. Gentleman that his argument had made an impact upon me, and, further, I promised that I shall not be slow to see that it is brought home to the appropriate quarters. That applies also to Amendments Nos. 88 and 89.
  Now, shipyards. Plywood for use in registered shipyards is exempt under Schedule 2, and perhaps we can look at that again. I see that there is a good deal of anxiety on the plywood front, as it were, about how far the scheme will affect the price of building. There will be a small effect on the price of plywood as of other articles affected by import deposits, but plywood is only one item in a building project and it need not necessarily represent more than a fraction of the cost of a building, save in the most unusual circumstances. Therefore, we are dealing here with a tiny fraction of a tiny fraction. One is not justified in being alarmed to an undue extent. I need
  1646
  hardly repeat my regret that this is necessary, but necessary it is in the circumstances of our export-import situation and for a short period of time.
  Now, boatyards. The answer will depend on the boatyard, the size of ship and the like, but small boats are unlikely to qualify under any plywood exemption. Again, the smaller the boat, the less the value of the plywood and the more miniscule the deposit effect on the cost of the boat.
  Certain specific problems have been raised such as that faced by coopers, to whom the hon. Member for Banff (Mr. W. H. K. Baker) referred. I sincerely sympathise particularly with smaller firms of this kind which are not accustomed to making detailed financial manipulations in the course of their business and are not endowed with large sums of liquid capital. I do not give them false reassurance, but I give them this advice. They ought to consult their bank manager. In certain cases he will at the early stages of the scheme be able to help them. In other cases he will be able to advise them where they can get the money. Perhaps I might repeat again what may not be understood by these firms, that they will be in a position to offer whoever lends them the money for the deposit a gilt-edged security of guaranteed six months' date. With a little friendly advice from their bank manager, lawyer, or whoever advises them, they ought to be able to raise the money so far as it is required beyond their liquid funds.
  I accept that this is an inconvenience. I greatly regret it. But the point here—I urge it upon the Committee—is that in imposing this inconvenience upon importers we are imposing the least inconvenience in any scheme intended to affect imports which we could bring in.
  I am willing to suffer all the points about the interesting anomaly as between mushroom spawn and caviare. I was not unimpressed by the case for mushroom spawn. Caviare, unhappily, is another matter. I cannot withdraw caviare from the list, even if I were so minded, as the Ways and Means Resolution has obviously been drawn by a Parliamentary draftsman addicted to it. It is not within the power of the Government now to withdraw caviare from the exemption list.
  9.30 p.m.
  Sir K. Joseph: These Amendments could hardly have demonstrated more clearly the large and small scale effects of the stroke of lightning which the Bill has imposed on all sizes and shapes of British industry.
  First, we have had demonstrated, as my hon. Friend the Member for Oswestry (Mr. Biffen) pointed out, the absurdities into which the Government are being led by trying to decide where a raw material ceases, because of the slightly less or slightly greater processing, to be a raw material. Then, when we have accepted that that absurdity runs through the Bill and the Schedule, we come to the severe impact on small scale industry illustrated by the admirable speeches of my hon. Friends the Members for Maidstone (Mr. John Wells), Aldershot (Sir E. Errington), Walthamstow, West (Mr. Silvester) and Banff (Mr. W. H. K. Baker).
  The speech of my hon. Friend the Member for Banff showed how severe the impact of the Bill can be in a firm devotedly and competently getting on with its business to the benefit of all concerned with it and of the country, suddenly to find the whole environment in which it works altered. I hope that my hon. Friend will advise the firm in his constituency to which he referred to seek financial advice urgently in the light of what the Financial Secretary said.
  I suppose that we have to express modified gratitude to the Financial Secretary for saying that he will look urgently at the formidable case made by my hon. Friends the Members for Maidstone, Aldershot, and Walthamstow, West for what cannot be anything but a raw
  material. I was glad that the hon. Gentleman expressed some sympathy with the case put forward by my hon. Friend the Member for Hemel Hempstead (Mr. Allason).
  At the other end of the scale of size, we come to the timber and plywood Amendment put so forcefully and clearly by my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro). Whether one considers the credit squeeze results or the import squeeze results of this Bill, one is bound to recognise, and the Government must recognise that the effect of the exclusion of plywood from the list of exemptions can only be to reduce the amount of house building and increase its cost. I should have thought that that was a result which the Government would wish to avoid, even if there were to be some inroads into the range of non-exempted goods.
  It is said that stocks of plywood in this country are low at the moment and that, therefore, unless the building and furniture industries are to suffer severely there will have to be considerable imports, which, if the money can be found for the deposit, are bound to increase the price of goods.
  We have had an excellent debate in which some of the absurdities of the Bill have been shown. I very much hope that, despite the sympathy of the Financial Secretary, my hon. Friends will support the Amendment by calling for a vote.
  Question put, That the Amendment be made:—
  The Committee divided: Ayes 144, Noes 213.

  Division No 24.]

  AYES

  [9.24 p.m.

  Alison, Michael (Barkston Ash)

  Burden, F. A.

  Elliott, R. W.(N 't'tle-upon-Tyne, N.)

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

  Campbell, B. (Oldham, W.)

  Emery, Peter

  Awdry, Daniel

  Campbell, Gordon (Moray & Nairn)

  Errington, Sir Eric

  Baker, W. H. K. (Banff)

  Carlisle, Mark

  Eyre, Reginald

  Beamish, Col. Sir Tufton

  Channon, H. P. G.

  Farr, John

  Bell, Ronald

  Clark, Henry

  Fletcher-Cooke, Charles

  Bennett, Dr. Reginald (Cos. & Fhm)

  Clegg, Walter

  Fortescue, Tim

  Bitten, John

  Cooke, Robert

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

  Blaker, Peter

  Costain, A. P.

  Giles, Rear-Adm. Morgan

  Boardman, Tom (Leicester, S. W.)

  Crowder, F. P.

  Gilmour, Ian (Norfolk, C.)

  Body, Richard

  Currie, G. B. H.

  Gilmour, Sir John (Fife, E.)

  Boyd-Carpenter, Rt. Hn. John

  Dalkeith, Earl of

  Glover, Sir Douglas

  Boyle, Rt. Hn. Sir Edward

  Davidson, James (Aberdeenshire, W.)

  Goodhart, Philip

  Braine, Bernard

  d'Avigdor-Goldsmid, Sir Henry

  Cower, Raymond

  Bromley-Davenport, Lt.-Col. Sir Walter

  Dean, Paul (Somerset, N.)

  Grant-Ferris, R.

  Bruce-Gardyne, J.

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

  Gresham Cooke, R.

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

  Dodds-Parker, Douglas

  Grimond, Rt. Hn, J.

  Buck, Antony (Colchester)

  Drayson, G. B.

  Gurden, Harold

  Bullus, Sir Eric

  Eden, Sir John

  Hall, John (Wycombe)

  Hall-Davis, A. G. F.

  Maclean, Sir Fitzroy

  Russell, Sir Ronald

  Hamilton, Michael (Salisbury)

  McNair-Wilson, Patrick

  Scott, Nicholas

  Harrison, Brian (Maldon)

  Maginnis, John E.

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

  Harrison, Col. Sir Harwood (Eye)

  Maude, Angus

  Silvester, Frederick

  Harvey, Sir Arthur Vere

  Maudling, Rt. Hn. Reginald

  Sinclair, Sir George

  Heseltine, Michael

  Mawby, Ray

  Smith, Dudley (W'wick & L'mington)

  Hiley, Joseph

  Maxwell-Hyslop, R. J.

  Smith, John (London & W'minster)

  Hill, J. E. B.

  Mills, Peter (Torrington)

  Speed, Keith

  Hirst, Geoffrey

  Mills, Stratton (Belfast, N.)

  Steel, David (Roxburgh)

  Holland, Philip

  Morgan, Geraint (Denbigh)

  Stoddart-Scott, Col. Sir M.

  Hordern, Peter

  Munro-Lucas-Tooth, Sir Hugh

  Summers, Sir Spencer

  Hunt, John

  Murton, Oscar

  Taylor, Sir Charles (Eastbourne)

  Hutchison, Michael Clark

  Nabarro, Sir Gerald

  Taylor, Frank, (Moss Side)

  Iremonger, T. L.

  Noble, Rt. Hn. Michael

  Temple, John M.

  Irvine, Bryant Godman (Rye)

  Onslow, Cranley

  Tilney, John

  Jenkin, Patrick (Woodford)

  Osborn, John (Hallam)

  Waddington, David

  Jennings, J. C. (Burton)

  Osborne, Sir Cyril (Louth)

  Wainwright, Richard (Colne Valley)

  Johnson Smith, C. (E. Grinstead)

  Page, Graham (Crosby)

  Weatherill, Bernard

  Jopling, Michael

  Peel, John

  Webster, David

  Joseph, Rt. Hn. Sir Keith

  Pink, R. Bonner

  Wells, John (Maidstone)

  Kaberry, Sir Donald

  Powell, Rt. Hn. J. Enoch

  Whitelaw, Rt. Hn. William

  Kerby, Capt. Henry

  Price, David (Eastleigh)

  Wiliams, Donald (Dudley)

  Kershaw, Anthony

  Pym, Francis

  Wills, Sir Gerald (Bridgwater)

  Kimball, Marcus

  Quennell, Miss J. M.

  Winstanley, Dr. M. P.

  King, Evelyn (Dorset, S.)

  Ramsden, Rt. Hn. James

  Wolrige-Gordon, Patrick

  Kirk, Peter

  Renton, Rt. Hn. Sir David

  Worsley, Marcus

  Knight, Mrs. Jill

  Rhys Williams, Sir Brandon

  Legge-Bourke, Sir Harry

  Rodgers, Sir John (Sevenoaks)

  TELLERS FOR THE AYES:

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

  Rossi, Hugh (Hornsey)

  Mr. Jasper More and

  Lubbock, Eric

  Royle, Anthony

  Mr. Hector Monro.

  MacArthur, Ian

  NOES

  Albu, Austen

  Dewar, Donald

  Howarth, Robert (Bolton, E.)

  Allaun, Frank (Salford, E.)

  Diamond, Rt. Hn. John

  Howell, Denis (Small Heath)

  Alldritt, Walter

  Dickens, James

  Huckfield, Leslie

  Allen, Scholefield

  Dobson, Ray

  Hughes, Rt. Hn. Cledwyn (Anglesey)

  Anderson, Donald

  Doig, Peter

  Hughes, Hector (Aberdeen, N.)

  Archer, Peter

  Dunn, James A.

  Hughes, Roy (Newport)

  Ashley, Jack

  Eadie, Alex

  Hunter, Adam

  Ashton, Joe (Bassetlaw)

  Edelman, Maurice

  Hynd, John

  Atkins, Ronald (Preston, N.)

  Edwards, Robert (Bilston)

  Jackson, Peter M. (High Peak)

  Atkinson, Norman (Tottenham)

  Edwards, William (Merioneth)

  Janner, Sir Barnett

  Barnett, Joel

  Ellis, John

  Jay, Rt. Hn. Douglas

  Beaney, Alan

  Ennals, David

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

  Benn, Rt. Hn. Anthony Wedgwood

  Evans, Fred (Caerphilly)

  Jenkins, Hugh (Putney)

  Bidwell, Sydney

  Evans, Gwynfor (C'marthen)

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

  Bishop, E. S.

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

  Jones, Dan (Burnley)

  Blackburn, F.

  Faulds, Andrew

  Jones, T. Alec (Rhondda, West)

  Blenkinsop, Arthur

  Fernyhough, E.

  Kenyon, Clifford

  Boardman, H. (Leigh)

  Finch, Harold

  Lawson, George

  Booth, Albert

  Fitch, Alan (Wigan)

  Leadbitter, Ted

  Braddock, Mrs. E. M.

  Fletcher, Rt. Hn. Sir Eric (Islington, E.)

  Ledger, Ron

  Brooks, Edwin

  Fletcher, Ted (Darlington)

  Lee, Rt. Hn. Jennie (Cannock)

  Broughton, Dr. A. D. D.

  Foley, Maurice

  Lee, John (Reading)

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

  Ford, Ben

  Lever, Harold (Cheatham)

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

  Forrester, John

  Lewis, Arthur (W. Ham, N.)

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

  Fowler, Gerry

  Lewis, Ron (Carlisle)

  Butler, Herbert (Hackney, C.)

  Freeson, Reginald

  Lomas, Kenneth

  Butler, Mrs. Joyce (Wood Green)

  Galpern, Sir Myer

  Loughlin, Charles

  Callaghan, Rt. Hn. James

  Gardner, Tony

  Lyons, Edward (Bradford, E.)

  Cant, R. B.

  Garrett, W. E.

  McBride, Nell

  Carmichael, Neil

  Gordon Walker, Rt. Hn. P. C.

  Macdonald, A. H.

  Castle, Rt. Hn. Barbara

  Cray, Dr. Hugh (Yarmouth)

  McGuire, Michael

  Chapman, Donald

  Greenwood, Rt. Hn. Anthony

  Mackintosh, John P.

  Coe, Denis

  Grey, Charles (Durham)

  McMillan, Tom (Glasgow, C.)

  Coleman, Donald

  Griffiths, David (Rother Valley)

  MacPherson, Malcolm

  Corbet, Mrs. Freda

  Griffiths, Will (Exchange)

  Mahon, Peter (Preston, S.)

  Craddock, George (Bradford, S.)

  Hamilton, James (Bothwell)

  Mahon, Simon (Bootle)

  Cawshaw, Richard

  Hamilton, William (Fife, W.)

  Manuel, Archie

  Grossman, Rt. Hn. Richard

  Hamling, William

  Mapp, Charles

  Cullen, Mrs. Alice

  Hannan, William

  Marks, Kenneth

  Dalyell, Tam

  Harper, Joseph

  Mason, Rt. Hn. Roy

  Darling, Rt. Hn. George

  Harrison, Walter (Wakefield)

  Mendelson, John

  Davies, Ednyfed Hudson (Conway)

  Haseldine, Norman

  Mikardo, Ian

  Davies, G. Elfed (Rhondda, E.)

  Hazell, Bert

  Millan, Bruce

  Davies, Dr. Ernest (Stretford)

  Henig, Stanley

  Milne, Edward (Blyth)

  Davies, Harold (Leek)

  Herbison, Rt. Hn. Margaret

  Morgan, Elystan (Cardiganshire)

  Davies, Ifor (Gower)

  Hilton, W. S.

  Morris, Alfred (Wythenshawe)

  Davies, S. O. (Merthyr)

  Hobden, Dennis

  Morris, Charles R. (Openshaw)

  Delargy, Hugh

  Horner, John

  Morris, John (Aberavon)

  Dell, Edmund

  Houghton, Rt. Hn. Douglas

  Moyle, Roland

  Dempsey, James

  Neal, Harold

  1650

  1651

  Newens, Stan

  Robertson, John (Palsley)

  Tuck, Raphael

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

  Roebuck, Roy

  Urwin, T. W.

  O'Malley, Brian

  Rogers, George (Kensington, N.)

  Varley, Eric G.

  Orme, Stanley

  Rose, Paul

  Wainwright, Edwin (Dearne Valley)

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

  Ross, Rt. Hn. William

  Wallace, George

  Padley, Walter

  Rowlands, E.

  Watkins, David (Consett)

  Page, Derek (King's Lynn)

  Shaw, Arnold (Ilford, S.)

  Watkins, Tudor (Brecon & Radnor)

  Paget, R. T.

  Sheldon, Robert

  Wellbeloved, James

  Palmer, Arthur

  Shore, Rt. Hn. Peter (Stepney)

  Wells, William (Walsall, N.)

  Park, Trevor

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

  Whitlock, William

  Parker, John (Dagenham)

  Silkin, Rt. Hn. John (Deptford)

  Willey, Rt. Hn. Frederick

  Pavitt, Laurence

  Silverman, Julius

  Williams, Alan (Swansea, W.)

  Pearson, Arthur (Pontypridd)

  Slater, Joseph

  Williams, Clifford (Abertillery)

  Peart, Rt. Hn. Fred

  Small, William

  Williams, Mrs. Shirley (Hitchin)

  Pentland, Norman

  Snow, Julian

  Willis, Rt. Hn. George

  Perry, Ernest G. (Battersea, S.)

  Spriggs, Leslie

  Wilson, William (Coventry, S.)

  Perry, George H. (Nottingham, S.)

  Steele, Thomas (Dunbartonshire, W.)

  Woodburn, Rt. Hn. A.

  Prentice, Rt. Hn. R. E.

  Summerskill, Hn. Dr. Shirley

  Woof, Robert

  Price, William (Rugby)

  Swain, Thomas

  Randall, Harry

  Symonds, J. B.

  TELLERS FOR THE NOES:

  Rankin, John

  Taverne, Dick

  Dr. M. S. Miller and

  Roberts, Albert (Normanton)

  Tinn, James

  Mr. Ernest Armstrong.

  Roberts, Rt. Hn. Goronwy

  Tomney, Frank

  Mr. Charles Fletcher-Cooke: I beg to move Amendment No. 95, in page 7, line 13, at end insert:
  Printing paper within Chapter 48.
  The Deputy Chairman (Mr. Harry Gourlay): With this Amendment we can also discuss Amendment No. 131, in page 7, line 13, at end insert:

  48.09

  …

  …

  Building board of wood pulp or of vegetable fibre, whether or not bonded with natural or artificial resins or with similar binders.

  9.45 p.m.
  Mr. Fletcher-Cooke: These two Amendments deal with paper, that is to say, one of the basic vehicles of knowledge, and we propose that printing paper within Chapter 48 should be excluded from the operation of the Bill.
  I would call the attention of the Committee to what is already excluded, which is easily visible on page 7 of the Bill, for the Schedule excludes
  "Paper-making materials (pulp and waste paper)"
  that is to say, the basic raw material of the communication of the written word, and also
  "Books, newspapers, maps, charts, manuscripts, typescripts, stamps, etc."
  which, I suppose, are the end products of the written word.
  Then it goes on, very mysteriously, to exclude a whole variety of types of the printed word, some of which, I should have thought, ought to have been caught. They are:
  "Trade advertising material … being material the primary purpose of which is to stimulate travel outside the United Kingdom.
  1652
  Trade advertising material within 49.11, being publications, illustrated or not, the primary purpose of which is to stimulate study or travel outside the United Kingdom … and less than full-size reproductions thereof … parts of books or booklets in the form of printed pictures or illustrations not bearing a text and less than full-size reproductions thereof … ".
  It is difficult to discover what is behind this. I assume that we have entered into an international undertaking by which we do not impose duty, if that be the word, on trade advertising material being publications whose primary purpose is to stimulate travel outside the United Kingdom. Unless we are obligated so to do, it seems incredible that we should exempt from a Bill designed to protect our balance of payments printed material designed to stimulate travel outside the United Kingdom.
  Will the Minister explain the exact terms of this supposed international obligation by which, in a Schedule more or less exclusively reserved to raw materials, there appears the extraordinary feature that printed booklets and brochures designed to induce our citizens to spend their holidays abroad can be imported without being subject to deposit. The situation is paradoxical. Will the Minister identify those obligations and their terms? Do they say that no duty or import duty or charge should be imposed?
  The use of those words would cast an interesting reflection upon the speech yesterday of the right hon. and learned Attorney-General. If all that those obligations say is that no duty or import duty or charge for Customs may be imposed, the Minister of State is a sufficiently good

  1653
  lawyer to realise that that casts an interesting and, maybe, sinister reflection upon the advice given yesterday to the Committee by the Attorney-General. Otherwise, the presence of this exception is ludicrous, to put it no higher.
  The purpose of Amendment No. 95 is this. If the raw materials of paper making under line 12 on page 7 are excluded, and if the finished product of paper, namely, books, newspapers, maps, charts, manuscripts, typescripts, stamps, etc. are excluded, it is quite inconsistent that the middle range, namely, printing paper, should attract the deposit.
  The former Chancellor of the Exchequer, now the Home Secretary, who conducted the 1964 surcharge Bill through the House of Commons will no doubt find echoes in this argument, since it was deployed by my right hon. Friend the Leader of the Opposition in those distant days in almost exactly the same words, namely, if one is excluding from the operation of the various barriers the raw materials of the printed word, and the printed word, it is absurd to exclude the intermediates, that is to say, printing paper within Chapter 48.
  That, quite briefly and, I hope, fairly cogently, is the case that I wish to advance on Amendment 95. We would like to include newsprint. I am not sure about the complexities of the various categorisations in the Her Majesty's Customs and Excise Tariff and the complications of Chapters 47, 48 and 49. But we have done it, and I am sure that the Minister will not take that point.
  As everyone knows, the newspaper industry is in financial difficulties. Importers of newsprint say that interest at 8 per cent. on the deposit will add 24s. to the price of one ton of newsprint. Added to other rises in costs, it will mean that newspapers will have to put up their prices, and we know that the growth of monopoly and the decrease in the number of newspapers available exercises public concern.
  I hope that the Minister will deal with the effect of the deposit upon newspapers and other media of public information and the dissemination of news. That increase in the price of a ton of newsprint strikes me as serious in the context of the newspaper industry at the present time.
  1654
  I come then to Amendment No. 131, which deals with building board of wood pulp or of vegetable fibre, whether or not bonded with natural or artificial resins or with similar binders. I should have thought that it is a raw material in every sense of the word. Fibre building board is reconstituted wood and is basically a raw material. Hardboard is used extensively by the construction industry for flush doors, kitchen fitments, renovations and maintenance work. The production of fibre building board in the United Kingdom is about 10 per cent. of our consumption and falls far short of requirements. If the Amendment is not accepted, the inevitable effect is that building costs will go up, and one socially undesirable feature at the moment is that building costs should increase.
  There, in a nutshell, is this group of Amendments—[An HON. MEMBER: "A nutshell?"] Yes, a nutshell. I think that I may say to the Home Secretary, who has seen this scenario through several times, that I have been relatively brief in moving these Amendments.
  In the history of this country there have never been taxes on knowledge to the extent that the Government have imposed by putting deposits, surcharges, and so on, on printing paper. This demand for an exception is quite outside the general run of arguments about polymers, billets, or whatever it may be. Material for the dissemination of the printed word should be exempt. The Government have recognised this by exempting end products, like books, newspapers, maps, charts, manuscripts, typescripts, and stamps, including these ridiculous brochures to entice our countrymen to take their holidays abroad. They also exempt paper-making materials, including pulp and waste paper. Yet they claw out the middle range of intermediates, and that takes some explanation from the Minister of State. I hope that he will give it to the Committee.
  Sir Harry Legge-Bourke: In the early hours of this morning I attempted to extract from the Minister of State some comment on the philosophy underlying these exemptions. He chose on that occasion to ignore anything that I said. I hope that tonight he will not do the same thing.
  Before proceeding further with these Amendments, I think that we ought to

  1655
  know what is in the Government's mind about the philosophy on which they are basing these exemptions. The difference between an absolute raw material and a partly finished material which is essential to a completed product, but which, partly completed, is useless for any other purpose, seems to be so fine that we can virtually lump the whole lot together as raw material.
  I do not know what else can be done with printing paper, except eventually to print upon it—[Interruption.] I suppose that a man could paper his house with it if he chose to do so, but I have a feeling that the general atmosphere would become a little monotonous as a result of that exercise.
  By looking at the original exemptions I have been endeavouring to discover the underlying philosophy in the Government's mind in making them. So far as I can see, it is basically, first, foodstuffs; secondly, works of art, such things as pearls and jewellery and matters of that kind; and, thirdly the necessary basic materials from which a manufacturer eventually produces something which can be sold by this country.
  I should think that printing paper naturally fell in the third category. I may conceivably have a remote interest in printing paper in that I am a director of a company which does a lot of offset lithographic printing. However, from this definition I am not sure whether this is so. It is not newsprint as we understand it that I am interested in, but other forms of paper on which printing takes place, so I declare an interest.
  I find it hard to understand why the Government should at one moment say that woven jute or one or two other substances which are already exempted in the Schedule should be exempt if they are not prepared to accept the Amendment.
  What disturbs me most is that information is already coming in on various fronts indicating that companies affected by this new legislation by having to put down deposits are already starting to put up prices to cover interest free loans being extracted from them by the Government for a period of six months. The Government will only have themselves to blame if our balance of payments
  1656
  situation is adversely affected, because they are making it more difficult for exporters to export the products which rely on partly finished materials coming in. If they impose this loan obligation—it is a loan, not a Customs duty; I shall never agree that it is other than a compulsory loan to the Government—they will only have themselves to blame if they further damage the economy of the country.
  Mr. R. T. Paget: I am much more concerned about the exclusions than the inclusions. Surely we have reached the point at which the idea that the Press conveys news is a delusion. People get their news from the B.B.C. and the television. They do not believe a word of the news they read in newspapers, because, quite rightly, they know that it is angled. What the Press conveys to them is sex, crime, scandal and Comment, and I do not see why those should not be taxed.
  10.0 p.m.
  Sir Douglas Glover: The hon. and learned Member for Northampton (Mr. Paget) is far too modest, because very often when I read my papers I note his comments, usually hostile to the Government of the day, and agree with every word he says. The Press has an enormous job to do in reporting comments of the so-called supporters of the Government. It helps the nation to form its conclusion about how the Government are running the country, and it would be deplorable if the hon. and learned Gentleman was not allowed to be so self-destructive to the Government whom he helped to put into office, much to his regret.
  What worries me about the Bill is that a good deal of the opposition has been hamstrung and spoiled by the original Ways and Means Resolution. There are some Members on this side of the Committee who, although they are critical of any interference with international trade, understand that when there is a crazy lunatic driving the car, and it is running downhill headlong into the sea, it is not a bad thing occasionally to put the brakes on.
  Under the Ways and Means Resolution, whereas the Government are bound to resist the Amendment to the hilt because it will reduce the amount of money which

  1657
  they will control as a result of the Bill, we on this side are inhibited from moving an Amendment to take out of the exemption list certain things which, if we are to have a Bill of this sort, are crazy.
  We are inhibiting learning, communication and study by a tax on newsprint and paper, but at the same time we have exempted the importation of caviare, and foie gras from Strasbourg. All the luxury foods are in some strange way now considered by the Labour Party to be the staple diet of the public, and every council house is now using these strange viands as the staple diet and no longer eating scrambled eggs and sauce for breakfast. Instead, there is a diet of caviare and foie gras.
  Mr. Houghton: The hon. Gentleman will realise that peanuts are also exempt.
  Sir D. Glover: The right hon. Gentleman knows that his comments and interjections in the House are always earthshaking, but he was standing on a bed of peanuts when he made his interjection—I am not usually unkind—and he fell flat on his back when he made. Peanuts are exempt, but are they an essential part of the diet of the nation?
  When I first got the Bill and looked through it, I thought that the list of exemptions was the list of the goods in respect o which the Government were going to insist on a deposit, because in the minds of the great mass of the British public half the items in the list are not essential. We are here dealing with an Amendment which seeks to remove an impost on something which it is in the national interest to import without any let or hindrance. Surely no democratic society thinks it is a good thing, despite what the hon. and learned Member for Northampton said about the B.B.C. being the only proper forum, to inhibit in any way the dissemination of news by the Press? I still think that the national local and weekly Press has an enormous rôle to carry out in this country. This Bill will inhibit the dissemination of knowledge, yet the same measure allows exemption; for luxury imports of so-called foods. This is supposed to be a Government which is looking after the interests of the people and not of the interests of those who are better off.
  I am not hostile to the Government trying to do something about our import
  1658
  bill and the situation which largely has been brought about by their mismanagement of the economy, but it has reached a stage at which urgent action is needed. As usual, and this has happened ever since 1964, they are doing it in the wrong way. They are trying to stop the import of vital machinery and putting an impost of 50 per cent. deposit on it while allowing luxury foods to be brought in although that is not what they intended.
  We cannot bring forward reasoned Amendments to provide a better balance because, if we did so, they would be out of order in view of the Ways and Means Resolution. The whole debate has been very frustrating because it is all one-sided. All that we can do is to bring forward Amendments to increase the list of exemptions; we cannot balance that by deleting items from the list. This has made for a sterile debate which is not helpful to the economy nor constructive from the point of view of the Government. The Government are to blame because of the way in which they introduced the Ways and Means Resolution.
  Mr. Taverne: I turn, first, to the point made by the hon. Member for Isle of Ely (Sir H. Legge-Bourke). I apologise for not answering it early this morning, but it related rather more to the Schedule than to the Amendment we were then discussing. It is a point which has been covered in discussion of earlier Amendments to the Schedule. Since I want to deal with it specifically, I will say briefly what the basic theme of the Schedule is.
  The Schedule is an attempt to reconcile two things which to some extent are in conflict. On the one hand, it is designed that this scheme should cause the minimum interference with commerce and industry. For this reason, certain particular categories of food, fuel and unmanufactured raw material have been totally exempted. On the other hand, it is also the desire of the scheme to cover as much of a group of products as possible and to reconcile these two objects, particular categories have been excluded.
  Because there is to some extent conflict and in our debates some hon. Members have successfully made a case for exemption of particular cases, I cannot pretend that there are not anomalies. There are

  1659
  bound to be anomalies just as there are when one draws up a list of Purchase Tax exemptions or a list of differential tariffs. There are anomalies but one has all the time to preserve the basic intention of the scheme and not to narrow the scope because the scheme is a measure of credit control concerning a large number of goods.
  The hon. and learned Member for Darwen (Mr. Fletcher-Cooke) very forcefully exploited one of the obvious anomalies which appears in the scheme. Before dealing with that anomaly which relates to his first Amendment I shall briefly comment on his second Amendment. The same kind of considerations apply to the second as led us to reject other Amendments. Whatever the merits of an Amendment to exempt building board of wood pulp or vegetable fibre, these are processed goods, composed of wood pulp, fibre and other vegetable material reduced to a fibrous state and compressed into sheets. If this category were exempted it would clearly lead to claims for similar treatment of a wide variety of comparable articles of wood and paper which are subject to deposit, and the scope of the scheme would be much narrower.
  But I think that the hon. and learned Member recognised that the stronger case related to the anomaly which he mentioned on the first Amendment. The anomaly does not arise out of the exclusion from the Schedule of printed paper—out of what is not exempted—but, as he stressed, from what is exempted. Printed paper is a fully manufactured product and, if it were exempted, it would create a contrast with other manufactured products. He himself pointed out that books and other forms of printed and publication material are exempted under the Schedule, so the argument to which I must address myself is why books and these other publications are exempt.
  Books have always been treated in a somewhat special fashion. They were specially removed from the scope of Purchase Tax in a celebrated wartime debate. They are also the subject of a special international Convention. The hon. and learned Member asked whether I could refer to any such Convention, and I can. It is the same Convention which deals with the trade advertising material referred to. I cannot find that actual part of the Convention, but the operative part,
  1660
  which he wanted me to quote, is Article 1, which states:
  "The Contracting States undertake not to apply customs duties or other charges on, or in connexion with, the importation of … Books, publications and documents"
  which are listed, it says, in annex A of the Convention.
  So books have always been specially treated for tax purposes. Books are also the subject of an international U.N.E.S.C.O. Convention. We are not compelled by that Convention to exempt books in this scheme, but books were exempted under the surcharge arrangements four years ago, because there was an international obligation to do so. We are not compelled to exempt books, but we did decide, on balance, since they were specially treated in the way of Purchase Tax and were the subject of this Convention, to create what I accept is a totally anomalous position for them within this Schedule as a special exemption. With the same Convention applying to the other kind of material as well, it was decided that books and trade advertising material should be within the exemption.
  On the other question, the effect on newspapers, that is no different from the effect on anything else. The extra cost which will have to be borne will amount to the interest on the deposits which the newspaper companies will have to forgo or the amount which they will have to pay if they borrow the money. This will be about 2 or 2½ per cent. That is why books are within this exemption. However, since it is not open to us to alter the exemptions in the Schedule, and we must have regard to what it is now proposed to exempt, the same arguments advanced in the past apply also to this Amendment.
  10.15 p.m.
  Mr. Fletcher-Cooke: The Minister was obliged to say that he was not compelled to exclude what he has excluded in the Schedule, otherwise he would have cast great doubt on the advice given to the Committee yesterday by the Attorney-General. I understand why he used that form of words. But it is not persuasive to say that the Government would voluntarily have excluded from the import deposit advertising material from abroad
  "the primary purpose of which is to stimulate study or travel outside the United Kingdom".

  1661
  I do not believe that any Government would have excluded such material from this deposit unless they were obliged to do so, otherwise it is totally contrary to the purposes of the Bill. Of course, the Minister is obliged to do so by the international Convention which he cited, which says that Customs duties or other charges on imports are not to be levied on such material—and that completely conflicts with the advice given by the Attorney-General yesterday that the Bill does not impose Customs duties or other charges on imports. This is the litmus paper, acid test of the degree to which that advice is compellable and persuasive.
  We are not, however, dealing with that Amendment at the moment. We are dealing with whether exempting
  "paper-making materials (pulp and waste paper)"
  at the bottom of the scale, and exempting
  "books, newspapers, maps, charts, manuscripts and typescripts"
  not to mention material for
  "publications, illustrated or not, the primary purpose of which is to stimulate travel outside the United Kingdom"
  does not inevitably, in any proper balance of trade, involve the exemption of the intermediate printing paper—and of course it must. There is no logic in it if it does not.
  This is a totally different matter from the other brave attempts to include materials which may not be absolutely and totally raw, but which are, neverthe-
  less, intermediate raw materials. This is a tax on the written word and upon the dissemination of information. This is a tax which will raise the price of newsprint to newspapers by £24 a ton, a figure not denied by the Minister of State. It is, therefore, a tax which in the whole of the tradition of this country, even in wartime, as the Minister of State reminded us, we have rejected, and I do not see why we should now reverse that policy.
  The hon. and learned Member for Northampton (Mr. Paget) said that the Press is ghastly, that no one believes it any longer and that the radio, the spoken or oral word, is much more trustworthy than the printed word. We prefer to allow the Press and the people to judge whether that is right or wrong. But let there be no doubt about it. This is a tax on the Press, a tax on knowledge. The Minister's attempts to defend it were not up to his usual very high level. He has a very difficult brief. He has a compulsion in respect of books, newspapers and brochures inducing our people to travel abroad. At the other end of the scale he has to exempt paper-making material. To try to squeeze out from the middle printing material, printing newspaper and newsprint is more than even he can do. I therefore recommend to my right hon. and hon. Friends that we register our protest in the Lobby.
  Question put, That the Amendment be made:—
  The Committee divided: Ayes 129, Noes 187.

  Division No. 25.]

  AYES

  [10.20 p m.

  Alison, Michael (Barkston Ash)

  Davidson, James (Aberdeenshire, W.)

  Hill, J. E. B.

  Awdry, Daniel

  d'Avigdor-Goldsmid, Sir Henry

  Hirst, Geoffrey

  Baker, W. H. K. (Banff)

  Dean, Paul

  Holland, Philip

  Bennett, Dr. Reginald (Gos. & Fhm)

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

  Hordern, Peter

  Bitten, John

  Drayson, G. B.

  Hunt, John

  Blaker, Peter

  Eden, Sir John

  Hutchison, Michael Clark

  Boardman, Tom (Leicester, S. W.)

  Emery Peter

  Iremonger, T. L.

  Body, Richard

  Errington, Sir Eric

  Irvine, Bryant Godman (Rye)

  Boyd-Carpenter, Rt. Hn. John

  Eyre, Reginald

  Jenkin, Patrick (Woodford)

  Boyle, Rt. Hn. Sir Edward

  Fletcher-Cooke, Charles

  Johnson Smith, G. (E. Grinstead)

  Braise, Bernard

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

  Jopling, Michael

  Bruce-Gardyne, J.

  Giles, Rear-Adm. Morgan

  Joseph, Rt. Hn. Sir Keith

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

  Gilmour, Ian (Norfolk, C.)

  Kershaw, Anthony

  Buck, Antony (Colchester)

  Gilmour, Sir John (Fife, E.)

  Kimball, Marcus

  Burden, F. A.

  Glover, Sir Douglas

  King, Evelyn (Dorset, S.)

  Campbell, B. (Oldham, W.)

  Goodhart, Philip

  Kirk, Peter

  Carlisle, Mark

  Gower, Raymond

  Kitson, Timothy

  Channon, H. P. G.

  Grant-Ferris, R.

  Knight, Mrs. Jill

  Clark, Henry

  Gresham Cooke, R.

  Legge-Bourke, Sir Harry

  Clegg, Walter

  Gurden, Harold

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

  Cooke, Robert

  Hall, John (Wycombe)

  Longden, Gilbert

  Costain, A. P.

  Hall-Davis, A. G. F.

  Lubbock, Eric

  Crowder, F. P.

  Harrison, Col. Sir Harwood (Eye)

  Mackenzie, Alasdair (Ross & Crom'ty)

  Currie, G. B. H.

  Harvey, Sir Arthur Vere

  Maclean, Sir Fitzroy

  Dalkeith, Earl of

  Hiley, Joseph

  McNair-Wilson, Patrick

  Maude, Angus

  Quennell, Miss J. M.

  Temple, John M.

  Maudling, Rt. Hn. Reginald

  Renton, Rt. Hn. Sir David

  Tilney, John

  Mawby, Ray

  Rhys Williams, Sir Brandon

  Turton, Rt. Hn. R. H.

  Maxwell-Hyslop, R. J.

  Rodgers, Sir John (Sevenoaks)

  Vickers, Dame Joan

  Mills, Peter (Torrington)

  Rossi, Hugh

  Waddington, David

  Mills, Stratton (Belfast, N.)

  Royle, Anthony

  Wainwright, Richard (Colne Valley)

  Monro, Hector

  Russell, Sir Ronald

  Weatherill, Bernard

  Morgan, Geraint (Denbigh)

  Scott, Nicholas

  Webster, David

  Munro-Lucas-Tooth, Sir Hugh

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

  Wells, John (Maidstone)

  Murton, Oscar

  Silvester, Frederick

  Whitelaw, Rt. Hn. William

  Nabarro, Sir Gerald

  Sinclair, Sir George

  Williams, Donald (Dudley)

  Noble, Rt. Hn. Michael

  Smith, Dudley (W'wick & L'mington)

  Winstanley, Dr. M. P.

  Onslow, Cranley

  Smith, John (London & W'minster)

  Wolrige-Gordon, Patrick

  Osborn, John (Hallam)

  Speed, Keith

  Worsley, Marcus

  Page, Graham (Crosby)

  Steel, David (Roxburgh)

  Wright, Esmond

  Page, John (Harrow, W.)

  Stoddart-Scott, Col. Sir M.

  Pink, R. Bonner

  Summers, Sir Spencer

  TELLERS FOR THE AYES:

  Powell, Rt. Hn. J. Enoch

  Taylor, Sir Charles (Eastbourne)

  Mr. R. W. Elliott and

  Price, David (Eastleigh)

  Taylor, Frank (Moss Side)

  Mr. Jasper More.

  Pym, Francis

  NOES

  Albu, Austen

  Fernyhough, E.

  MacPherson, Malcolm

  Allaun, Frank (Salford, E.)

  Fitch, Alan (Wigan)

  Mahon, Peter (Preston, S.)

  Alldritt, Walter

  Fletcher, Rt. Hn. Sir Eric (Islington, E.)

  Mahon, Simon (Bootle)

  Allen, Scholefield

  Fletcher, Ted (Darlington)

  Manuel, Archie

  Anderson, Donald

  Foley, Maurice

  Mapp, Charles

  Archer, Peter

  Forrester, John

  Marks, Kenneth

  Ashley, Jack

  Fowler, Gerry

  Mason, Rt. Hn. Roy

  Ashton, Joe (Bassetlaw)

  Freeson, Reginald

  Mendelson, John

  Atkins, Ronald (Preston, N.)

  Galpern, Sir Myer

  Mikardo, Ian

  Atkinson, Norman (Tottenham)

  Gardner, Tony

  Millan, Bruce

  Barnett, Joel

  Garrett, W. E.

  Milne, Edward (Blyth)

  Beaney, Alan

  Gordon Walker, Rt. Hn. P. C.

  Morgan, Elystan (Cardiganshire)

  Benn, Rt. Hn. Anthony Wedgwood

  Gray, Dr. Hugh (Yarmouth)

  Morris, Alfred (Wythenshawe)

  Bidwell, Sydney

  Greenwood, Rt. Hn. Anthony

  Morris, Charles R. (Openshaw)

  Bishop, E. S.

  Gregory, Arnold

  Morris, John (Aberavon)

  Blackburn, F.

  Grey, Charles (Durham)

  Moyle, Roland

  Blenkinsop, Arthur

  Griffiths, David (Rother Valley)

  Mulley, Rt. Hn. Frederick

  Booth, Albert

  Griffiths, Will (Exchange)

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

  Boston, Terence

  Hamilton, James (Bothwell)

  O'Malley, Brian

  Braddock, Mrs. E. M.

  Hamilton, William (Fife, W.)

  Orme, Stanley

  Brooks, Edwin

  Hamling, William

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

  Broughton, Dr. A. D. D.

  Hannan, William

  Page, Derek (King's Lynn)

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

  Harper, Joseph

  Paget, R. T.

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

  Harrison, Walter (Wakefield)

  Palmer, Arthur

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

  Hart, Rt. Hn. Judith

  Park, Trevor

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

  Haseldine, Norman

  Parker, John (Dagenham)

  Butler, Herbert (Hackney, C.)

  Hazell, Bert

  Pearson, Arthur (Pontypridd)

  Butler, Mrs. Joyce (Wood Green)

  Herbison, Rt. Hn. Margaret

  Pearl, Rt. Hn. Fred

  Callaghan, Rt. Hn. James

  Hobden, Dennis

  Perry, Ernest G. (Battersea, S.)

  Cant, R. B.

  Horner, John

  Perry, George H. (Nottingham, S.)

  Carmichael, Neil

  Houghton, Rt. Hn. Douglas

  Prentice, Rt. Hn. R. E.

  Castle, Rt. Hn. Barbara

  Howarth, Robert (Bolton, E.)

  Price, William (Rugby)

  Chapman, Donald

  Howell, Denis (Small Heath)

  Roberts, Albert (Norrnanton)

  Coe, Denis

  Huckfield, Leslie

  Roberts, Rt. Hn. Goronwy

  Corbet, Mrs. Freda

  Hughes, Emrys (Ayrshire, S.)

  Roebuck, Roy

  Crawshaw, Richard

  Hughes, Roy (Newport)

  Rogers, George (Kensington, N.)

  Cullen, Mrs. Alice

  Hunter, Adam

  Rose, Paul

  Dalyell, Tam

  Jackson, Peter M. (High Peak)

  Ross, Rt. Hn. William

  Davies, Ednyfed Hudson (Conway)

  Janner, Sir Garnett

  Rowlands, E.

  Davies, G. Elfed (Rhondda, E.)

  Jay, Rt. Hn. Douglas

  Shaw, Arnold (Ilford, S.)

  Davies, Dr. Ernest (Stretford)

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

  Sheldon, Robert

  Davies, Ifor (Gower)

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

  Shore, Rt. Hn. Peter (Stepney)

  Davies, S. O. (Merthyr)

  Jones, Dan (Burnley)

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

  Delargy, Hugh

  Jones, T. Alec (Rhondda, West)

  Silkin, Rt. Hn. John (Deptford)

  Dell, Edmund

  Kenyon, Clifford

  Silverman, Julius

  Dempsey, James

  Lawson, George

  Slater, Joseph

  Dewar, Donald

  Leadbitter, Ted

  Small, William

  Diamond, Rt. Hn. John

  Ledger, Ron

  Snow, Julian

  Dickens, James

  Lever, Harold (Cheetham)

  Steele, Thomas (Dunbartonshire, W.)

  Dobson, Ray

  Lewis, Arthur (W. Ham, N.)

  Strauss, Rt. Hn. G. R.

  Doig, Peter

  Lewis, Ron (Carlisle)

  Summerskill, Hn. Dr. Shirley

  Dunn, James A.

  Lomas, Kenneth

  Swain, Thomas

  Eadie, Alex

  Lyons, Edward (Bradford, E.)

  Taverne, Dick

  Edelman, Maurice

  McBride, Neil

  Tinn, James

  Ellis, John

  Macdonald, A. H.

  Urwin, T. W.

  Ennals, David

  McGuire, Michael

  Varley, Eric G.

  Evans, Fred (Caerphilly)

  Mackintosh, John P.

  Wainwright, Edwin (Deame Valley)

  Evans, Gwynfor (C'marthen)

  Maclennan, Robert

  Wallace, George

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

  MacMillan, Malcolm (Western Isles)

  Watkins, David (Consett)

  Faulds, Andrew

  McMillan, Tom (Glasgow, C.)

  Wellbeloved, James

  1664

  1665

  Wells, William (Walsall, N.)

  Willis, Rt. Hn. George

  Willey, Rt. Hn. Frederick

  Wilson, William (Coventry, S.)

  TELLERS FOR THE NOES:

  Williams, Alan (Swansea, W.)

  Woodburn, Rt. Hn. A.

  Dr. M. S. Miller and

  Williams, Mrs. Shirley (Hitchin)

  Woof, Robert

  Mr. Ernest Armstrong.

  10.30 p.m.
  Mr. Blaker: I beg to move Amendment No. 62, in page 8, leave out lines 22 and 23 and insert:

  Chapter 50 (all headings).

  Silk and waste silk.

  The Deputy Chairman (Mr. Harry Gourlay): With this Amendment, we will take the Amendments, Nos. No. 76, in page 7, line 11, at end insert:

  46.01 to 46.03

  Plait, braid and straw hoods and braids and hoods made of man-made fibre.

  No. 63, in page 8, line 23, at end insert:

  Chapter 51 (all headings).

  Man-made fibres, continuous.

  No. 124, in line 23, at end insert:

  51.01

  Yarn of man-made fibres (continuous) not put up for retail sale.

  No. 64, in line 33, leave out 'and 55.04' and insert '55.04 and 55.05'.
  No. 65, in line 34, after 'combed' insert:
  'and cotton yarn, not put up for retail sale'.
  No. 87, in line 47, after 'bags', insert 'and cotton mesh bags'.
  Mr. Blaker: Amendments Nos. 62 and 63 raise the question of what is a raw material, and the items covered by both are the raw materials for some industries, even if many of them are not raw materials in the sense of having had no process applied to them. As an example, I will mention the manufacture of ties. Many hon. Members will have seen a letter from the Tie Manufacturers' Association setting out the problem. The manufacturers say that this is a highly specialised product and that the material cannot be replaced by British manufacturers whose capacity is fully utilised, and they therefore buy abroad because they have to do so.
  They say, further, that the fabric represents 50 or 60 per cent. of the total cost of ties and they add that the industry consists of small manufacturers who, therefore, will suffer as much as anybody if not more than anybody from problems of liquidity.
  Amendment No. 87, which stands in the name of my hon. Friend the Member for Maidstone (Mr. John Wells),
  1668
  relates to cotton mesh bags or nets. These are a finished product, but the fact that they are not exempted by the Schedule illustrates a further anomaly, because, if they are not exempted, there will be an effect on the price of food, because these nets or bags are used, I am told, only to wrap food for sale to the public, for instance, to wrap parsnips, carrots and so on, but not, so far as I am aware, cabbage.
  I am also told that there is no substitute which is as good for this purpose and that jute bags, for example, which are exempted by the Schedule, are not so satisfactory, at least for this purpose. If we are not to include these cotton mesh bags in the exemptions, there will be an effect on the price of food to the public.
  Mr. Drayson: This morning I raised the question of the problem faced by two firms in my constituency, a problem covered by Amendment No. 62 and others. The matter with which we are concerned is the extent to which yarn used in a manufacturing process can be regarded as a basic raw material.
  The yarn with which one of the firms in my constituency is concerned is imported from Austria, but the firm tells me categorically that it would have no wish particularly to buy from Austria if it could get its requirements in the United Kingdom. It points out that this yarn is part Terylene, which has previously been exported from the United Kingdom, while the rest is Australian wool. The two are brought together in Austria and spun into yarn, which is then imported by my constituents, who tell me that they have firm contracts at fixed prices going right to the end of 1969 with delivery in November and December of that year.
  The final product manufactured in my constituency from that yarn is light-weight tropical suitings for export. The company's export performance is 98 per cent. of total production. Now, it faces the problem of having to pay the import deposit on the yarn, the basic raw material which comes in from the Continent. Even if the goods which the company manufacturers are exported within less than the three months for which the deposit is paid, it sees little prospect of obtaining draw-back on that money.
  I am encouraged by Government Amendment No. 73, and I hope to be told

  1669
  that this sort of case will be covered by it. This is a typical example of a material being imported with a view to re-export. The part of that Amendment which encourages me to think that it is covered is paragraph (1)(a):
  "The Commissioners may remit import deposit payable in respect of any goods if satisfied—.
  (a) that it is intended to re-export the imported goods, or goods incorporating the imported goods, or goods manufactured or produced from the imported goods."
  That is precisely this case. Although the Terylene and wool have gone through certain spinning processes, the yarn is imported for the express purpose of re-export. As I have said, the company's export record is excellent.
  The problem is accentuated because the company is working three shifts a day, something which successive Governments have urged the textile industry to do. It uses the yarn at a great rate, so that the import deposit will have a heavy impact, and it is anxious to hear at the earliest possible moment that the new charge will not, under the Government Amendment, actually fall upon it.
  A further major problem confronting this company is that it is now embarking on a programme of re-equipment, and it cannot both carry through that programme and pay the import deposit. Which do the Government prefer? Do they want companies to modernise and re-equip, or do they want them to use their resources to pay the import deposit? In its letter to me, the company says:
  "If we have to pay the deposit, we shall have to abandon the modernisation and re-equipment scheme".
  It goes on to say that its main competitors are in Germany, Japan and the United States, and it is having a hard struggle to keep ahead, though the present position is satisfactory. But it sees the import deposit scheme as a further handicap.
  This is another example of the way in which the policies pursued by the Government act as a brake on progress and hamper our export programme. The firm is quite a small one, employing 100 people, but the cloth it manufactures is exported to the value of £1 million. In its letter to me the firm says:
  "We think that we are making a useful contribution to the balance of payments."
  1670
  I should say that with 98 per cent. exports that firm is making an understatement, and that it is making an outstanding contribution to exports, and that the Board of Trade might consider the firm for the Queen's Award to Industry. If the Minister would like further details of this company's achievements, I shall be only too pleased to send them to him.
  In its letter the firm goes on to say that its order books extends well into 1969, and the firm is prepared to give an undertaking to Customs and Excise that it will accept orders only for export, provided, of course, that it can get an assurance that it will not have to pay this import deposit. I cannot see how this firm, which has an outstanding export record, can assist the Government or the country any more than it is doing at present.
  I hope, therefore, that the Government will find it possible to relieve this kind of yarn from the levy or, if that is not possible, to include firms with such export records as this firm has in the provisions of the Amendment to be moved by the Government later. When this import levy was imposed the firm asked me, "Do the Government really want us to export?" I am sure that we can assure the firm that the Government do want it to, but the Government are not giving very much encouragement to firms trying so hard to export.
  I have another example of a firm—I am sure there must a vast number of similar examples in Yorkshire and Lancashire—which, because it cannot get a supply of yarn from the United Kingdom, has to go overseas for it. It tells me it despatched some samples of cloth to Denmark on 20th November in a 25s. postal packet and up to 29th November it had not be received.
  I know that that does not really come within the scope of the Amendment, but it is an example of the difficulties which are being placed in the way of exporters, and they are entitled to ask the Government whether they will support them in this important work which they are doing.
  Sir A. V. Harvey: I want to say a few words about the tie industry, because it plays an important rôle in my constituency. Macclesfield ties are known all over the world for their quality, and are making a very real contribution to our exports, particularly the high-quality ties. silk ties and others.

  1671
  During the postwar Parliament, under the Attlee Government, ties got a poor deal from that Government, who, at one time, classified them as haberdashery so that they carried 100 per cent. Purchase Tax. I remember having a debate with the then Chancellor, Mr. Dalton, in the early hours of a morning, and eventually getting the tax reduced.
  Raw silk and silk waste is a raw material and is not affected, but spun silk is, and 50 per cent. of it, I understand, comes from E.F.T.A. countries, mainly Switzerland. That material goes into ties made in this country.
  I asked the hon. Member for Harrow, East (Mr. Roebuck) what tie he was wearing; he looked at the back and said, "Swiss". I think that hon. Members should wear British ties, good Macclesfield ties. The quality of the ties, and the materials, have changed considerably. Many ties are now made of synthetic materials. I do not know whether the Home Secretary wants to intervene. Perhaps he will tell us what tie he is wearing; it is probably a black one, in mourning for the Government. For over 50 years tie fabrics have been imported—
  The Secretary of State for the Home Department (Mr. James Callaghan): My tie is made of silk, in England.
  10.45 p.m.
  Sir A. V. Harvey: I am relieved to hear that.
  Approximately 78 per cent. of tie fabrics are imported. In Macclesfield, some ties are made in larger factories, but many are made up in the homes of individuals, as they have been for a hundred years; firms put out the work to be done in homes, and great skill is shown in the making up of ties. These firms are in no financial position to put down the 50 per cent. import deposit required under the scheme; they cannot raise the money from banks as large companies can. They are faced with intense competition from France, Italy and other European countries; and exporting to North America is a tough business. I hope that the Government will give sympathetic consideration to this matter.
  It seems to me that Ministers made up their minds 48 hours ago not to give way on anything. Is this a democracy, or not?
  Mr. Hirst Mr. Hirst: Not!
  Sir A. V. Harvey: What is the point of spending 48 hours in the House of Commons debating this when Ministers have decided beforehand to give away absolutely nothing? This is not the way to encourage industry. At the end of the day the Government rely on free enterprise to bring home the goods. Only by selling overseas at competitive prices goods which have been made here will the country solve its problems. These measures will put up the price of goods, certainly in the tie industry. I hope that the Chief Secretary will give this matter his favourable consideration, not for large firms, who are probably able to finance themselves, but for small firms who need help.
  Mr. Emery: Amendment No. 124, in my name, goes further than the silk and tie industry; it is concerned with manmade fibres.
  I have looked at my tie to see whether it bore the label "B.N.S."—British Nylon Spinners—and I am delighted to be able to assure my hon. Friend the Member for Macclesfield (Sir A. V. Harvey) that it bears the label "Made in Macclesfield", which, perhaps, will help his constituency.
  I am delighted to see the Home Secretary on the Front Bench. He will remember that on 2nd December, 1964 he was sitting in the same position and dealing with Amendments to the Finance Bill under the same tariff headings. In column 553 of HANSARD of that date he is quoted as saying that he would look at concessions and consider whether they were justified. We were hopeful that concessions would be made, but I can assure my hon. Friend the Member for Macclesfield that, as he might expect, nothing came of it.
  These are of special concern to many aspects of industry. When the debate was taking place in 1964, home production was able nearly to meet the total consumption of man-made fibres in industry. We produced about 98 per cent. of our requirements. As the Chief Secretary will know, that is not the position today. The amount available for the home market is such that 20 per cent. of industry's requirements has to be imported. I am surprised that my hon. Friend the

  1673
  Member for Worcester, South (Sir G. Nabarro) is not here, because carpets take about 80 per cent. The rubber industry is another that is affected, and, of course, so is the clothing industry.
  We know that the First Schedule to the Bill is that which applied at the end of the import surcharge in 1966. The Government's arguments in 1964 might have been relevant then, but the situation has altered considerably, and man-made fibre yarn is in much greater demand as a raw material in industry than it was in 1964. On that basis alone, it would seem that there is a strong argument for making a concession to man-made fibre yarn.
  It is suggested that if such a concession is made purely for man-made fibres, it would not necessarily cover those which are essentially for industry. I take that point. But if the Government were disposed to do it, I am sure that they could devise a sub-heading to ensure that it applied only to man-made fibre for industrial consumption.
  There is a strong argument which I hope that the Chief Secretary will consider. If he cannot give me a direct answer, we will be more than pleased to have an assurance that he will consider it before the Report stage.
  Mr. Charles Mapp: I have been most interested in the argument about ties and man-made fibres. However, the special pleas that have come from the benches opposite are not sustained by the state of the market as a whole. A good deal of it is controlled by monopolies, and other areas are subject to well-understood arrangements about production both here and in Europe. In the main, the only effective, reasonably free and unregulated competition comes from the Far East, and perhaps some attention to the state of the industry at home is just as desirable as the claims of other countries.
  I am very familiar with the man-made fibre side of the industry, which is of crucial importance. Its use is now overtaking that of natural cotton stock, and I would be hesitant to resist a small element of discouragement to imports of it.
  Mr. Emery: Following the hon. Gentleman's argument to its logical conclusion, if he is arguing against a monopoly or oligopoly position, the last thing that
  1674
  he would want to see is more "featherbedding" of home producers by limiting competition and giving them the safeguard of making importers pay the duty before they can put competitive goods on the market. I think that he should be on our side, rather than arguing as he is.
  Mr. Mapp: The hon. Member has failed to notice that I said the trade was largely monopolistic in this country and that I added that it was somewhat well-regulated on the Continent of Europe. The alleged open competition which he argued is present in this trade does not exist, apart from heavy rivals in the Far East with a low-paid labour basis. Because I am a member of this House and not a House in the Far East, I am anxious that an industry which has had a fair share of injury, inflicted by this and other Governments in the last decade or two, should have whatever small privilege as is conferred.
  There is some merit in the point made by the hon. Member for Macclesfield (Sir A. V. Harvey), but it is not so substantial as he suggested. I am not unfamiliar with his constituency, which is not far from where I live Equally, I am not unfamiliar with the claims of the silk industry, but I do not think it is so spread in individual homes as the hon. Gentleman suggested. Generally, this is a consumer element which most of us can afford whatever infinitesimal addition to the price is involved. For these reasons I hope that the Minister will resist the pressures put on him.
  Half an hour ago I listened to discussion about another industry in which an hon. Member said prices had already gone up. I wondered how a private firm, in a matter of two or three days, with all the problems arising from this Measure, could decide to increase its prices. That is an arbitrary decision. We are moving into an era in which price increases must be justified and be seen to be justified. This applies to salaries and incomes and must also apply to prices. If they can be justified, I would be the first to agree.
  Sir A. V. Harvey: It is all very well for the hon. Member to suggest that he does not mind paying more for ties—I am glad that he can afford to do so—but these firms have had two doses of

  1675
  Selective Employment Tax and they face increased costs. The hon. Member is completely out of touch with reality.
  Mr. John Wells: I am grateful to my hon. Friend the Member for Blackpool, South (Mr. Blaker) for drawing attention to Amendment No. 87, which is in my name. That Amendment seeks to exempt cotton bags in which nearly all field vegetables are now packed.
  The aim of the Ministry of Agriculture, Fisheries and Food is to get more heavy vegetables grown in this country. The Ministry and its supporters are anxious to increase the acreage of home-grown onions, brussels sprouts and other foodstuffs which go to market in cotton bags. My hon. Friend said that he did not think that cabbages go to market in cotton bags, but they do. I must declare an interest as one who uses them to send cabbages to market.
  11.0 p.m.
  Mr. Blaker: Is my hon. Friend suggesting that it was I who said that cabbages do not go to market in these bags? I am well informed on what cabbages go to market in.
  Mr. Wells: I apologise to my hon. Friend. I must have misheard him.
  These bags are used exclusively for the wrapping of foodstuffs. The quantity imported is between 25 million and 30 million a year, mainly from Hong Kong. The total duty under this new impost will be about £125,000 a year and this will be a direct charge on the horticultural industry. Although the hon. Member for Oldham, East (Mr. Mapp) may be able to afford a few more shillings for a silk neck-tie, the housewife in the supermarket will not pay more for her vegetables and the horticulturist is in the middle of this unfortunate position.
  The housewife is unable to pay more, the Government are forcing the grower to pay more for string bags, and all the costs of production are going up. The Government have just hit the horticulturist with increased oil fuel duties and the costs of marketing have gone up. It is invariably the grower who suffers. We have had a disturbing evening, with the Government giving way on nothing. Here is a golden opportunity. These units are used only for foodstuffs.
  1676
  The Government pay lip service to getting foodstuffs to the shops and to the housewife in a clean and wholesome condition, efficiently, and as quickly and cheaply as possible. Let us have some practical help by putting this one small item in the Schedule.
  [Mr. SYDNEY IRVING in the Chair]
  The Chief Secretary to the Treasury (Mr. John Diamond): I count myself privileged to have listened to a debate in which a number of hon. Members spoke robustly, demonstrating their knowledge of the materials with which they are concerned, and of their constituency interests, as hon. Members should. I have been interested to hear the great variety of articles which hon. Members would seek to exclude from the scheme.
  The debate has made it clear that if any one of these items were excluded on the grounds put forward, other than the export ground, the number of items entitled to exemption would be such that the coverage of the scheme would be sharply diminished. The principle of the scheme is that it is intended to have a sharp impact, and if hon. Members have regard to this, they will realise that to exclude such a wide and substantial range of goods would—I will not go so far as to say destroy—but would reduce the effectiveness of the scheme in a way we could not possibly accept.
  We have to have regard to the coverage of the scheme and, within that, to see which items could be excluded. With the exception of the export argument, these Amendments have sought to exclude materials which are in no sense raw materials. They are materials which many manufacturers use, and I see the starting point in terms of materials, but that is a common experience and has nothing to do with having raw materials or materials which would be excluded on the basis that they have reached only a simple processing stage.
  All these materials go much further than that. Indeed, many hon. Gentlemen have been pressing me about manmade fibres, many of which are made from complex chemicals not excluded from the scheme because of their complexity and the distance which they are removed from raw materials. Therefore, it would be wholly illogical to include

  1677
  the chemicals and to exclude the manmade fibre which is a further stage in the manufacturing process.
  I am bound to invite the Committee to say that these proposals in these various Amendments, if all similar proposals which could justifiably be attached to them were accepted, would really damage the scheme in such a way that it would be pointless to go on with it. The hon. Member for Macclesfield (Sir A. V. Harvey) and others who have spoken in similar strain are wrong when they say that we come here with a closed mind. It is also wrong to say that we do not wish to meet the reasonable desires of the Committee, at the same time retaining the main shape of the scheme.
  The major argument addressed to me by the hon. Member for Macclesfield, the hon. Member for Shipley (Mr. Hirst) and one other hon. Member was on exports. I am in difficulty here, because there is an Amendment down on this subject. I think that the Committee will not be unhappy to discuss the Amendment and to hear the Government's views about it, but we cannot discuss it now and it does not help to try to anticipate it. However, I believe that we are meeting the real needs of the situation on exports, but not arising out of these Amendments.
  Mr. Robert Cooke: Will the Chief Secretary give the Committee a clearly defined definition of a raw material? It would be helpful if he could.
  Mr. Diamond: That has been gone into before. None of these Amendments deal with raw materials or materials in the first stage of processing. They are all quite complex materials. The grounds on which they ought to receive special consideration are not those set out in these Amendments or in this Schedule. but in a separate Amendment which I should like to come to as soon as I reasonably can.
  Having said those encouraging words about exports, for the reasons I have given these Amendments must fall as all similar Amendments have fallen.
  Mr. A. G. F. Hall-Davis: It will not be any surprise to the Committee that the Chief Secretary has looked on these Amend-
  1678
  ments with just as little sympathy and receptiveness—certainly receptiveness—as he and his colleagues have looked on earlier Amendments.
  It is important that those who will be affected by the rejection of these Amendments should understand that one of the fundamental reasons for the Government's closed mind is that it has become increasingly clear that we have been considering not one scheme, but two schemes: a scheme of import deposits to exercise a moderating effect on imports coupled with a credit restriction scheme.
  During the discussion, perhaps more emphasis has been laid on the credit restriction aspect than on diminishing the flow of imports. It is as important, in the eyes of the Chancellor of the Exchequer, to use this scheme as a means of restricting credit as it is of restricting imports. Indeed, the Minister of State, on the last Amendment, said that the scheme, as a method of credit control, depends on it covering a large number of goods.
  It is one thing to talk about a large number of goods being affected by this scheme. I do not think that it is sufficiently appreciated that the number of firms affected by it is very much more concentrated, and that the impact on them will, therefore, be very much more concentrated, too.
  It is entirely understandable that those users of imported materials—and we have been talking about some of them on these Amendments—who have no possibility of turning to a home-produced material should feel aggrieved at finding such a savage financial burden imposed on them as unwilling tools of the Chancellor's credit policy, because that is what is happening. If, as is the case in these Amendments, one uses a highly discriminatory policy, applied fiercely, on a narrow sector to produce a general effect of credit restriction dispersed over a wide field, one must be prepared for some unforeseen consequence on those who are the unwilling dissipators of freeze throughout the economy. We know about heat conducting materials. Under this Government, one becomes a freeze conducting vehicle.
  These unfortunate importers, who have no alternative home source of supply for

  1679
  their basic materials of produce, are the unwilling dissipators of freeze throughout the economy. Import restriction does not enter into this at all. It just happens to be a convenient vehicle for putting a turn on the screw of the economy, using them as an instrument.
  I propose to say a few words about the effect on the textile industry of rejecting the Amendments. The hon. Member for Oldham, East (Mr. Mapp) made one of the rare contributions to the debate from the back benches opposite. I know the hon. Gentleman's great sympathy for the textile industry, and his understanding of it, but I thought that on this occasion he was wide of the mark. The hon. Gentleman said that he was not opposed to introducing a small area of privilege for an industry which, in the past, had suffered at the hands of the Government. In this case, the small area of privilege is going to those who do not need it, at the expense of those who do, because the effect of this impost will fall on those small units in the industry which have been going out of business in vast numbers.
  It will not affect the monopolists about whom the hon. Gentleman was talking.
  It will not affect the large producers. They will benefit. It is the small manufacturer, who has found it very difficult to get the quality and variety of yarn that he needs, and who is dependent upon imported materials to enable him to follow specialised production, and to continue in the fashion trade and specialised lines, who will be faced with this additional impost.
  During the last two or three years we have seen hundreds of small textile firms going out of business. The rejection of the Amendments will have, as one consequence, an acceleration in the reduction of variety of production in the textile industry, a further reduction in the number of small specialising units in the industry, and as a result, in a comparatively short time, a propensity to increase our imports, which is the exact opposite of what the Government wish to bring about.
  For those reasons I must ask my hon. Friends to reinforce the strength of their arguments by registering their votes in the Division Lobby.
  Question put, That the Amendment be made:—
  The Committee divided: Ayes 119, Noes 176.

  Division No. 26]

  AYES

  [11.15 p.m.

  Alison, Michael (Barkston Ash)

  Gower, Raymond

  Mawby, Ray

  Awdry, Daniel

  Grant-Ferris, R.

  Maxwell-Hyslop, R. J.

  Baker, W. H. K. (Banff)

  Gresham Cooke, R.

  Mills, Peter (Torrington)

  Bennett, Dr. Reginald (Gos. & Fhm)

  Gurden, Harold

  Monro, Hector

  Biffen, John

  Hall-Davis, A. G. F.

  More, Jasper

  Blaker, Peter

  Harrison, Col. Sir Harwood (Eye)

  Morgan, Geraint (Denbigh)

  Boardman, Tom (Leicester, S.W.)

  Harvey, Sir Arthur Vere

  Morrison, Charles (Devizes)

  Body, Richard

  Hiley, Joseph

  Munro-Lucas-Tooth, Sir Hugh

  Boyd-Carpenter, Rt. Hn. John

  Hill, J. E. B.

  Murton, Oscar

  Bromley-Davenport, Lt.-Col. Sir Walter

  Hirst, Geoffrey

  Nabarro, Sir Gerald

  Bruce-Gardyne, J.

  Holland, Philip

  Noble, Rt. Hn. Michael

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

  Hordern, Peter

  Osborn, John (Hallam)

  Buck, Antony (Colchester)

  Hunt, John

  Page, Graham (Crosby)

  Burden, F. A.

  Hutchison, Michael Clark

  Page, John (Harrow, W.)

  Campbell, B. (Oldham, W.)

  Iremonger, T. L.

  Pink, R. Bonner

  Carlisle, Mark

  Irvine, Bryant Godman (Rye)

  Powell, Rt. Hn. J. Enoch

  Channon, H. P. G.

  Jenkin, Patrick (Woodford)

  Price, David (Eastleigh)

  Clark, Henry

  Johnson Smith, G. (E. Grinstead)

  Pym, Francis

  Cooke, Robert

  Jopling, Michael

  Renton, Rt. Hn. Sir David

  Costain, A. P.

  Joseph, Rt. Hn. Sir Keith

  Rhys Williams, Sir Brandon

  Crowder, F. P.

  Kershaw, Anthony

  Rossi, Hugh (Hornsey)

  Davidson, James (Aberdeenshire, W.)

  Kimball, Marcus

  Russell, Sir Ronald

  Dean, Paul

  King, Evelyn (Dorset, S.)

  Scott, Nicholas

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

  Kirk, Peter

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

  Drayson, G. B.

  Kitson, Timothy

  Silvester, Frederick

  Eden, Sir John

  Knight, Mrs. Jill

  Emery, Peter

  Legge-Bourke, Sir Harry

  Sinclair, Sir George

  Errington, Sir Eric

  Lewis, Kenneth (Rutland)

  Smith, Dudley (W'wick & L'mington)

  Eyre, Reginald

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

  Smith, John (London & W'minster)

  Fletcher-Cooke, Charles

  Longden, Gilbert

  Speed, Keith

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

  Lubbock, Eric

  Steel, David (Roxburgh)

  Giles, Rear-Adm. Morgan

  Mackenzie, Alasdair (Ross & Crom'ty)

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

  Gilmour, Ian (Norfolk, C.)

  Maclean, Sir Fitzroy

  Summers, Sir Spencer

  Gilmour, Sir John (Fife, E.)

  McNair-Wilson, Patrick

  Taylor, Sir Charles (Eastbourne)

  Glover, Sir Douglas

  Marples, Rt. Hn. Ernest

  Taylor, Frank (Moss Side)

  Goodhart, Philip

  Maude, Angus

  Tilney, John

  Turton, Rt. Hn. R. H.

  Wells, John (Maidstone)

  Worsley, Marcus

  Waddington, David

  Whitelaw, Rt. Hn. William

  Wright, Esmond

  Ward, Dame Irene

  Williams, Donald (Dudley)

  TELLERS FOR THE AYES:

  Weatherill, Bernard

  Winstanley, Dr. M. P.

  Mr. Anthony Royle and

  Webster, David

  Wolrige-Gordon, Patrick

  Mr. R. W. Elliott.

  NOES

  Albu, Austen

  Garrett, W. E.

  Morgan, Elystan (Cardiganshire)

  Allaun, Frank (Salford, E.)

  Gordon Walker, Rt. Hn. P. C.

  Morris, Alfred (Wythenshawe)

  Alldritt, Walter

  Gray, Dr. Hugh (Yarmouth)

  Morris, Charles R. (Openshaw)

  Allen, Scholefield

  Greenwood, Rt. Hn. Anthony

  Morris, John (Aberavon)

  Anderson, Donald

  Gregory, Arnold

  Moyle, Roland

  Archer, Peter

  Griffiths, David (Rother Valley)

  Mulley, Rt. Hn. Frederick

  Armstrong, Ernest

  Griffiths, Will (Exchange)

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

  Ashton, Joe (Bassetlaw)

  Hamilton, James (Bothwell)

  Ogden, Eric

  Atkins, Ronald (Preston, N.)

  Hamling, William

  O'Malley, Brian

  Atkinson, Norman (Tottenham)

  Hannan, William

  Orme, Stanley

  Barnett, Joel

  Harper, Joseph

  Oswald, Thomas

  Beaney, Alan

  Harrison, Walter (Wakefield)

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

  Benn, Rt. Hn. Anthony Wedgwood

  Hart, Rt. Hn. Judith

  Paget, R. T.

  Bidwell, Sydney

  Haseldine, Norman

  Palmer, Arthur

  Bishop, E. S.

  Hazell, Bert

  Park, Trevor

  Blenkinsop, Arthur

  Herbison, Rt. Hn. Margaret

  Parker, John (Dagenham)

  Booth, Albert

  Horner, John

  Pavitt, Laurence

  Boston, Terence

  Houghton, Rt. Hn. Douglas

  Pearl, Rt. Hn. Fred

  Brooks, Edwin

  Howarth, Robert (Bolton, E.)

  Perry, Ernest C. (Battersea, S.)

  Broughton, Dr. A. D. D.

  Howell, Denis (Small Heath)

  Perry, George H. (Nottingham, S.)

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

  Huckfield, Leslie

  Price, William (Rugby)

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

  Hughes, Emrys (Ayrshire, S.)

  Roberts, Albert (Normanton)

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

  Hughes, Roy (Newport)

  Roberts, Rt. Hn. Goronwy

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

  Hunter, Adam

  Roebuck, Roy

  Butler, Mrs. Joyce (Wood Green)

  Hynd, John

  Rogers, George (Kensington, N.)

  Callaghan, Ft. Hn. James

  Jackson, Peter M. (High Peak)

  Rose, Paul

  Cant, R. B.

  Janner, Sir Barnett

  Ross, Rt. Hn. William

  Carmichael, Neil

  Jay, Rt. Hn. Douglas

  Rowlands, E. (Cardiff, N.)

  Castle, Rt. Hn. Barbara

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

  Shaw, Arnold (Ilford, S.)

  Coe, Denis

  Jones, Dan (Burnley)

  Sheldon, Robert

  Dalyell, Tam

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

  Shore, Rt. Hn. Peter (Stepney)

  Davies, Ednyfed Hudson (Conway)

  Jones, T. Alec (Rhondda, West)

  Short, Mrs. Renée (W'hampton, N.E.)

  Davies, G. Elfed (Rhondda, E.)

  Kenyon, Clifford

  Silkin, Rt. Hn. John (Deptford)

  Davies, Dr. Ernest (Stretford)

  Lawson, George

  Silverman, Julius

  Davies, Ifor (Gower)

  Leadbitter, Ted

  Slater, Joseph

  Dempsey, James

  Ledger, Ron

  Small, William

  Dewar, Donald

  Lee, Rt. Hn. Jennie (Cannock)

  Snow, Julian

  Diamond, Rt. Hn. John

  Lever, Harold (Cheetham)

  Steele, Thomas (Dunbartonshire, W.)

  Dickens, James

  Lewis, Arthur (W. Ham, N.)

  Strauss, Rt. Hn. G. R.

  Dobson, Ray

  Lewis, Ron (Carlisle)

  Summerskill, Hn. Dr. Shirley

  Doig, Peter

  Lomas, Kenneth

  Swain, Thomas

  Dunn, James A.

  Macdonald, A. H.

  Taverne, Dick

  Eadie, Alex

  McGuire, Michael

  Tinn, James

  Edelman, Maurice

  Mackie, John

  Urwin, T. W.

  Ellis, John

  Mackintosh, John P.

  Varley, Eric G.

  Ennals, David

  Maclennan, Robert

  Wainwright, Edwin (Dearne Valley)

  Evans, Fred (Caerphilly)

  McMillan, Tom (Glasgow, C.)

  Wallace, George

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

  McNamara, J. Kevin

  Watkins, David (Consett)

  Fernyhough, E.

  MacPherson, Malcolm

  Wellbeloved, James

  Fitch, Alan (Wigan)

  Mahon, Peter (Preston, S.)

  Wells, William (Walsall, N.)

  Fletcher, Rt. Hn. Sir Eric (Islington, E.)

  Mahon, Simon (Bootle)

  Whitlock, William

  Fletcher, Ted (Darlington)

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

  Willey, Rt. Hn. Frederick

  Foley, Maurice

  Manuel, Archie

  Williams, Alan (Swansea, W.)

  Ford, Ben

  Mapp, Charles

  Willis, Rt. Hn. George

  Forrester, John

  Marks, Kenneth

  Wilson, William (Coventry, S.)

  Fowler, Gerry

  Mason, Rt. Hn. Roy

  Woodburn, Rt. Hn. A.

  Freeson, Reginald

  Mikardo, Ian

  Woof, Robert

  Galpern, Sir Myer

  Millan, Bruce

  TELLERS FOR THE NOES:

  Gardner, Tony

  Miller, Dr. M. S.

  Mr. Neil McBride and

  Milne, Edward (Blyth)

  Mr. Charles Grey.

  Mr. Michael Shaw: I beg to move Amendment No. 106, in page 8, line 50, at end insert:

  70.03

  …

  …

  Glass in balls, rods and tubes, unworked (not being optical glass).

  The Chairman (Mr. Sydney Irving): I think that it would be convenient to discuss al the same time, Amendments No. 107, in page 8, line 50, at end insert:
  1682

  69.02

  …

  …

  Refractory bricks, blocks, tiles and similar refractory constructional goods.

  and No. 146, in page 8, line 50, at end insert:
  Graphite pipes within 69.03(B).
  Mr. Shaw: This Amendment has arrived on the Notice Paper in a typical manner, disclosing the difficulties under which both industry and the Opposition

  1683
  have to work in dealing with a Bill like this. The formation and development of the glass industry is in the middle of a most dramatic change. Very much depends on a high state of activity and on very large sums being spent on capital development. The industry is fiercely competitive and there is a wide variety in the state of prosperity among the various firms. Such an industry therefore has a great interest in the Bill and, properly, it has taken a hurried look at the way in which it will be affected.
  It has written seeking exemption in respect of at least two matters. Amendment No. 106 deals with the type of glass used for tubing, ampoules and the manufacture of clinical thermometers—glass vital for an important sector of the industry—and Amendment 107 seeks exemption in respect of refractory bricks which not only play an important and expensive part in the development of new factories but which also have to be replaced frequently. The industry states:
  "If these items are not exempted, the extra cost involved in making the deposits may be reflected in increased prices which might well be damaging to the export of lead crystal and scientific glassware".
  It is worth remembering that in 1967 the industry exported nearly £29 million of glass and glass products against imports of nearly £18 million.
  The industry is not certain how great the effect of the scheme will be. It comments:
  "Owing to the speed at which legislation is being introduced to cover the import deposit scheme, we have not been able to carry out a very thorough investigation of all the implications arising from it. However, we are immediately concerned with some items"
  —and I have mentioned them as the subject of the Amendments. That is typical of the handicap under which industry has been placed by the speed at which the legislation has been presented to the House. Even more, because this information has reached us at the last minute. it indicates the handicap under which hon. Members suffer.
  In view of the Ways and Means Resolution, we have not received sufficient information why there has been this great haste in pushing through the Bill so that we had no chance of consultations with industry before we discussed the Amendments. The manufacturers do not know the full impact of the Bill on their affairs
  1684
  and these items, but they are sure that it will have an effect which will be ill for their trade.
  Mr. Taverne: It will in no sense be out of disrespect to the hon. Member for Scarborough and Whitby (Mr. Shaw) or the glass industry if I deal with the Amendment briefly, but the issues involved are those which we have been debating for a long time. I was asked why we are in such a hurry with the Bill. With this kind of Measure, speed is of the essence. The Resolution must be introduced quickly and the Bill must follow the Resolution as soon as possible. We will, of course, in all these matters raised by hon. Members opposite look at the position very carefully, as my hon. Friend the Financial Secretary has said, with an eye on the powers in the Bill. But, when it comes to the subjects of these Amendments, the same principles apply which have so far forced us to turn down so many other requests.
  These products are manufactured from basic materials by more or less elaborate processes and they have gone beyond the stage of raw materials which would qualify them for one of the basic categories for which exemption is being provided. They therefore come within the categories which will be subject to the deposit scheme.
  I am sure that the Committee will understand that, however reluctant we may be in each case to turn down an Amendment, to let this one out would mean letting out many others and thus destroy the whole purpose of the scheme.
  Amendment negatived.
  11.30 p.m.
  Sir G. Nabarro: I beg to move Amendment No. 66, in page 9, line 10, at the end insert:

  73.06

  …

  …

  Puddled bars and pilings, ingots, blocks, lumps and similar forms, of iron or steel.

  73.07

  …

  …

  Blooms, billets, slabs and sheet bars (including tinplate bars), of iron or steel; pieces roughly shaped by forging, of iron or steel.

  73.08

  …

  …

  Iron or steel coils for rerolling.

  73.09

  …

  …

  Universal plates of iron or steel.

  73.10

  …

  …

  Bars and rods (including wire rod), of iron or steel, hot-rolled forged, extruded, cold-formed or cold-finished (including precision made); hollow mining drill steel.

  The Chairman (Mr. Sydney Irving): With this Amendment we shall discuss Amendment No. 67, standing in the name of the right hon. Member for Leeds, North-East (Sir K. Joseph), in page 9, line 20, at end insert:

  76.02

  …

  …

  Wrought bars, rods, angles, shapes and sections, of aluminium; aluminium wire.

  76.03

  …

  …

  Wrought plates, sheets and strip (including discs and circles), of aluminium.

  76.04

  …

  …

  Aluminium foil.

  76.05

  …

  …

  Aluminium powders and flakes

  76.06

  …

  …

  Tubes and pipes and blanks therefor, of aluminium; hollow bars of aluminium.

  76.07

  …

  …

  Tube and pipe fittings (for example, joints, elbows, sockets and flanges), of aluminium.

  Sir G. Nabarro: The large number of words on the Notice Paper cover, broadly ferrous metals imported into this country almost entirely for the engineering industry. Amendment No. 67 is the same in principle as Amendment No. 66, but covers non-ferrous metals and, therefore, we have exact complements in the metallurgical sense.
  The imports of iron and steel into Britain have been very large during 1968—no one will deny that—and there has been a sharp increase compared with 1967, due, no doubt, to devaluation. These are the kind of figures which have demonstrated to many in the business world that devaluation is not working. In 1968, based on the first 10 months of the year and again, as in the case of timber, grossed up to represent the full year at the same rate or volume of incoming iron and steel products, the figure will now be £158 million. In 1967, the figure was £116 million. So, in the case
  1686
  of iron and steel products, there has been an increase in imports of no less than £42 million.
  Of course, people import rolled and re-rolled steel products broadly to the specifications delineated in Amendment 66 for two reasons: first, because they cannot obtain prompt specifications in the required period of time for their engineering production processes in the United Kingdom or, secondly, because the prices offered by British steel manufacturers are not competitive with continental and other competitive suppliers.
  In any event, the shutting out of continental and other classes of foreign rolled and re-rolled steel products is likely to cause substantial dislocation in the engineering industry, particularly in workshops which have become attuned over a long period to the use of specialist steel from overseas sources. Restricting or coercing buyers in the engineering industry to buy only British steel in future is not only likely to cause dislocation, but also to put up their costs of production and their prices, quite apart from the difficulty of financing the import deposits scheme.
  Many of these specifications are not obtainable from British sources. Birmingham, the Black Country and Wolverhampton will suffer particularly on that score if there is a rupture of supply of iron and steel products from Continental sources, or a cesser of that supply.
  I hope, therefore, that the Treasury Ministers will think again about placing impediments on our free import of certain specifications of iron and steel rolled and re-rolled products which I claim are indispensable to the British industry in all its diverse form in all parts of the United Kingdom.
  Mr. John Page: I want to reinforce the case so cogently made by my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) and to speak particularly of the experience of one of our largest motor manufacturers, which has asked me to raise the subject.
  The British Steel Corporation agree that it has been proved that certain types of steel cannot be bought in this country, and that even if they could be bought it is important that overseas sources should be kept available to our manufacturers.

  1687
  The firm writes:
  "We have imported a minor amount of sheet and coil for many years and the reasons for this are understood and accepted by the British Steel Corporation. The need is so clear that the Corporation have given us their written approval to continue these imports and without loss of their loyalty rebate."
  The Corporation gives the fullest discount on what it supplies to certain customers on condition that those customers give it the whole of their business. The Corporation would not give that discount in this case if there were not very good reasons for certain steel products to be purchased abroad.
  I put it to the Minister that flexibility must be left so that the import deposit need not be paid in cases where it is overwhelmingly proved to the Board of Trade that suitable types of steel are not available in this country or should for strategic reasons be purchased abroad.
  Mr. Diamond: The hon. Gentleman the Member for Worcestershire, South (Sir G. Nabarro) told us a number of interesting things out of his deep knowledge of these matters. He told me—and I do not know that this is an immediate reply to him—something interesting about the non-supply of steel articles, and I propose to follow up what he had to say in order to find out why it is that these articles and this production are not available in this country. It seemed to me that this was a challenge to the steel industry that needed to be inquired into and followed up.
  The hon. Gentleman made two very important statements. He said that the amount of imports was great and that the increase in the amount imported in recent years—indeed, during the past year, I gathered—was very considerable. This is what the scheme is about. It is not to put up a barrier, as he suggested. It is not to exclude completely, as he suggested, steel and steel manufactured items from abroad. It is to take note of the vastly increased import in recent times of goods, most of which, if not all of which, we can make in this country. It is to discourage importers or, at all events, to make them think twice, in the interests of all manufacturers here and, if I may say so, in the interests of those who are not yet fully employed in the steel industry—
  Mr. Callaghan: Hear, hear.
  Mr. Diamond: —and we should encourage them all. Therefore, on the hon. Gentleman's general remarks and very cogent arguments, it is obviously right that the Government should have taken the steps they have taken.
  On the limited ground of an exception, what the form of the Amendment seeks is to remove the only tenable distinction, which is that between the wrought and the unwrought metal. Unwrought metal is excluded; the hon. Gentleman and his hon. Friends propose also to exclude wrought metal, either ferrous or nonferrous. That is a division which we could not accept.
  The hon. Gentleman has made it clear that the amount involved would be very considerable, and the only way in which to be consistent with what we are doing with raw materials and materials which have been processed in a very preliminary way requires us to stick to that division. The coverage of the scheme would be considerably eroded by the Amendment, and in those circumstances I hope that hon. Members will not press the Amendment.
  Mr. Patrick Jenkin: I hope that my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) will feel it right to ask the Committee to divide on the Amendment. There is a most remarkable contrast between the attitude brought to the Dispatch Box by the Chief Secretary and that which we have had through most of these debates on Amendments to the Schedule from the Financial Secretary. I am sure that the right hon. Gentleman will not misunderstand me if I say that I considered his reply protective. He was clearly seeing the import deposit not substantially as a means of impinging on credit, but as a method of trying to reduce the imports of products in order—and here he was cheered by the Home Secretary—to increase the employment of people in the steel industry in this country.
  This is exactly what we have been told throughout these proceedings is not the Government's intention. We have been told all along that it may have some impact on imports, a marginal effect upon imports, but that its chief intention is to impact on credit. The Chief Secretary's reply gave a very different interpretation and I cannot help warning him that it will make the task of the President of the

  1689
  Board of Trade, when he confronts his colleagues in the E.F.T.A. Council, just that much more difficult. I hope that my hon. Friend will think it right to press the Amendment to a Division.
  Sir G. Nabarro: I was inordinately brief in moving this important Amendment covering, as it does, about £158 million worth of imports during this year of the ferrous metal products alluded to in Amendment No. 66. I was brief because in the debate on the Ways and Means Resolution on 26th November—columns 258 to 261 of the OFFICIAL REPORT—I related this case in much greater detail. The Chief Secretary's reply this evening was not an effective answer to the case which I then related in
  depth and in detail. I endorse my hon. Friend's view and hope that my right hon. and hon. Friends will press this important matter to a Division.
  Mr. Peter Kirk: Surely the most significant part of the Chief Secretary's answer was his admission that he did not know why these products could not be manufactured in this country. Surely we should not part with the Amendment until he does know.
  Sir G. Nabarro: I entirely agree with my hon. Friend.
  Question put, That the Amendment be made:—
  The Committee divided: Ayes 106, Noes 165.

  Division No. 27.]

  AYES

  [11.44 p.m.

  Alison, Michael (Barkston Ash)

  Gurden, Harold

  Page, John (Harrow, W.)

  Awdry, Daniel

  Hall-Davis, A. G. F.

  Pink, R. Bonner

  Baker, W. H. K. (Banff)

  Harrison, Col. Sir Harwood (Eye)

  Powell, Rt. Hn. J. Enoch

  Bennett, Dr. Reginald (Gos. & Fhm)

  Hiley, Joseph

  Price, David (Eastleigh)

  Biffen, John

  Hill, J. E. B.

  Pym, Francis

  Blaker, Peter

  Holland, Philip

  Renton, Rt. Hn. Sir David

  Boardman, Tom (Leicester, S. W.)

  Hordern, Peter

  Rhys Williams, Sir Brandon

  Body, Richard

  Hunt, John

  Rossi, Hugh (Hornsey)

  Boyd-Carpenter, Rt. Hn. John

  Iremonger, T. L

  Royle, Anthony

  Boyle, Rt. Hn. Sir Edward

  Irvine, Bryant Godman (Rye)

  Russell, Sir Ronald

  Braine, Bernard

  Jenkin, Patrick (Woodford)

  Scott, Nicholas

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

  Johnson Smith, G. (E. Grinstead)

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

  Buck, Antony (Colchester)

  Jopling, Michael

  Silvester, Frederick

  Burden, F. A.

  Joseph, Rt. Hn. Sir Keith

  Sinclair, Sir George

  Campbell, B. (Oldham, W.)

  Kershaw, Anthony

  Smith, Dudley (W'wick & L'mington)

  Carlisle, Mark

  Kimball, Marcus

  Steel, David (Roxburgh)

  Channon, H. P. G.

  King, Evelyn (Dorset, S.)

  Summers, Sir Spencer

  Clark, Henry

  Kirk, Peter

  Taylor, Sir Charles (Eastbourne)

  Cooke, Robert

  Knight, Mrs. Jill

  Taylor, Frank (Moss Side)

  Costain, A. P.

  Legge-Bourke, Sir Harry

  Tilney, John

  Crowder, F. P.

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

  Turton, Rt. Hn. R. H.

  Dance, James

  Longden, Gilbert

  Waddington, David

  Dean, Paul (Somerset, N.)

  Lubbock, Eric

  Ward, Dame Irene

  Drayson, G. B.

  McNair-Wilson, Patrick

  Weatherill, Bernard

  Eden, Sir John

  Mackenzie, Alasdair (Ross & Crom'ty)

  Webster, David

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

  Marples, Rt. Hn. Ernest

  Wells, John (Maidstone)

  Emery, Peter

  Mawby, Ray

  Whitelaw, Rt. Hn. William

  Eyre, Reginald

  Maxwell-Hyslop, R. J.

  Williams, Donald (Dudley)

  Fletcher-Cooke, Charles

  Mills, Peter (Torrington)

  Winstanley, Dr. M. P.

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

  More, Jasper

  Wolrige-Gordon, Patrick

  Giles, Rear-Adm. Morgan

  Morrison, Charles (Devizes)

  Worstey, Marcus

  Gilmour, Sir John (Fife, E.)

  Munro-Lucas-Tooth, Sir Hugh

  Wright, Esmond

  Glover, Sir Douglas

  Murton, Oscar

  Goodhart, Philip

  Nabarro, Sir Gerald

  TELLERS FOR THE AYES:

  Gower, Raymond

  Noble, Rt. Hn. Michael

  Mr. Timothy Kitson and

  Grant-Ferris, R.

  Osborn, John (Hallam)

  Mr. Hector Moore.

  Gresham Cooke, R.

  Page, Graham (Crosby)

  NOES

  Abse, Leo

  Bennett, James (G'gow, Bridgeton)

  Castle, Rt. Hn. Barbara

  Albu, Austen

  Bidwell, Sydney

  Coe, Denis

  Allaun, Frank (Salford, E.)

  Bishop, E. S.

  Dalyell, Tam

  Alldritt, Walter

  Blenkinsop, Arthur

  Davies, Ednyfed Hudson (Conway)

  Allen, Scholefield

  Booth, Albert

  Davies, Dr, Ernest (Stretford)

  Anderson, Donald

  Boston, Terence

  Davies, Ifor (Gower)

  Archer, Peter

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

  Dewar, Donald

  Armstrong, Ernest

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

  Diamond, Rt. Hn. John

  Dickens, James

  Ashton, Joe (Bassetlaw)

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

  Dobson, Ray

  Atkins, Ronald (Preston, N.)

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

  Doig, Peter

  Atkinson, Nonnan (Tottenham)

  Butler, Mrs. Joyce (Wood Green)

  Dunn, James A.

  Barnett, Joel

  Callaghan, Rt. Hn. James

  Eadie, Alex

  Beaney, Alan

  Cant, R. B.

  Edelman, Maurice

  Benn, Rt. Hn. Anthony Wedgwood

  Carmichael, Neil

  Ellis, John

  Ennals, David

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

  Palmer, Arthur

  Evans, Fred (Caerphilly)

  Jones, T. Alec (Rhondda, West)

  Park, Trevor

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

  Kenyon, Clifford

  Parker, John (Dagenham)

  Faulds, Andrew

  Lawson, George

  Pavitt, Laurence

  Fernyhough, E.

  Leadbitter, Ted

  Pearl, Rt. Hn. Fred

  Fletcher, Ted (Darlington)

  Ledger, Ron

  Perry, Ernest G. (Battersea, S.)

  Foley, Maurice

  Lee, Rt. Hon. Jennie (Cannock)

  Perry, George H. (Nottingham, S.)

  Ford, Ben

  Lewis, Ron (Carlisle)

  Roberts, Albert (Normanton)

  Forrester, John

  Lomas, Kenneth

  Roberts, Rt. Hn. Goronwy

  Fowler, Gerry

  Macdonald, A. H.

  Roebuck, Roy

  Freeson, Reginald

  McGuire, Michael

  Rose, Paul

  Galpern, Sir Myer

  Mackie, John

  Ross, Rt. Hn. William

  Gardner, Tony

  Mackintosh, John P.

  Rowlands, E.

  Gordon Walker, Rt. Hn. P. C.

  Maclennan, Robert

  Shaw, Arnold (Ilford, S.)

  Gray, Dr. Hugh (Yarmouth)

  McMillan, Tom (Glasgow, C.)

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

  Greenwood, Rt. Hn. Anthony

  McNamara, J. Kevin

  Silkin, Rt. Hn. John (Deptford)

  Gregory, Arnold

  MacPherson, Malcolm

  Silverman, Julius

  Grey, Charles (Durham)

  Mahon, Peter (Preston, S.)

  Slater, Joseph

  Griffiths, David (Rother Valley)

  Mahon, Simon (Bootle)

  Small, William

  Griffiths, Will (Exchange)

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

  Snow, Julian

  Hamilton, James (Bothwell)

  Manuel, Archie

  Steele, Thomas (Dunbartonshire, W.)

  Hamling, William

  Mapp, Charles

  Strauss, Rt. Hn. G. R.

  Hannan, William

  Marks, Kenneth

  Summerskill, Hn. Dr. Shirley

  Harper, Joseph

  Mason, Rt. Hn. Roy

  Swain, Thomas

  Harrison, Walter (Wakefield)

  Mikardo, Ian

  Taverne, Dick

  Hart, Rt. Hn. Judith

  Millan, Bruce

  Tinn, James

  Haseldine, Norman

  Miller, Dr. M. S.

  Urwin, T. W.

  Hazell, Bert

  Milne, Edward (Blyth)

  Varley, Eric G.

  Herbison, Rt. Hn. Margaret

  Morgan, Elystan (Cardiganshire)

  Wainwright, Edwin (Dearne Valley)

  Horner, John

  Morris, Alfred (Wythenshawe)

  Wallace, George

  Houghton, Rt. Hn. Douglas

  Morris, Charles R. (Openshaw)

  Watkins, David (Consett)

  Howarth, Robert (Bolton, E.)

  Morris, John (Aberavon)

  Wellbeloved, James

  Howell, Denis (Small Heath)

  Moyle, Roland

  Wells, William (Walsall, N.)

  Huckfield, Leslie

  Mulley, Rt. Hn. Frederick

  Whitlock, William

  Hughes, Emrys (Ayrshire, S.)

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

  Williams, Alan (Swansea, W.)

  Hughes, Roy (Newport)

  Ogden, Eric

  Williams, Mrs. Shirley (Hitchin)

  Hynd, John

  O'Malley, Brian

  Wilson, William (Coventry, S.)

  Jackson, Peter M. (High Peak)

  Orme, Stanley

  Woof, Robert

  Janner, Sir Barnett

  Oswald, Thomas

  Jay, Rt. Hn. Douglas

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

  TELLERS FOR THE NOES:

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

  Page, Derek (King's Lynn)

  Mr. Alan Fitch and

  Jones, Dan (Burnley)

  Paget, R. T.

  Mr. Neil McBride.

  Sir K. Joseph: I beg to move Amendment No. 68, in page 9, line 31, at end add:

  84.45

  …

  …

  Machine tools for working metal or metallic carbides, not being machines falling within heading No. 84.49 or 84.50.

  84.46

  …

  …

  Machine tools for working stone, ceramics, concrete, asbestos-cement, and like mineral materials or for working glass in the cold other than machines falling within heading No. 84.49.

  84.47

  …

  …

  Machine tools for working wood, cork, bone ebonite (vulcanite), hard artificial plastic materials or other hard carving materials other than machines falling within heading No. 84.49.

  84.48

  …

  …

  Accessories and parts suitable for use solely or principally with the machines falling within headings Nos. 84.45 to 84.47 including work and tool holders, self-opening die-heads, dividing heads and other appliances for machine tools; tool holders for any type of tool or machine tool for working in the hand.

  The Chairman (Mr. Sydney Irving): With this Amendment we can take, also, Amendment No. 86, in page 9, line 31, at end insert:

  84.25

  …

  …

  Harvesting and threshing machinery; straw and fodder presses; hay or grass mowers; winnowing and similar cleaning machines for seed, grain or leguminous vegetables and egg-grading and other grading machines for agricultural produce (other than those of a kind used in the bread grain milling industry falling within heading No. 84.29):

  (a) root topping machines, root lifters and root harvesters;

  (b) parts of the machines of sub-heading (a) above

  (c) hay or grass mowers;

  (i) rotary blade type;

  (ii) other;

  (d) other:

  (i) agricultural and commercial horticultural machines;

  (ii) other.

  84.26

  …

  …

  Dairy machinery (including milking machines):

  1693

  (a) cheese presses;

  (b) milking machines;

  (c) parts of milking machines;

  (d) churns for butter making and combined churns and butter workers;

  (e) other.

  No. 147, in page 9, line 31, at end

  86.08

  …

  …

  Road-rail and similar containers specially designed and equipped to be equally suitable for transport by rail, road and ship.

  No. 125, in Schedule 2, page 10, line 36, leave out from "yard" to "and" in line 39 and insert:
  "for the purpose of being used for the building, repairing or refitting of ships in the yard".
  No. 148, in Schedule 2, page 11, line 18, at end insert:
  Spare parts for industrial and farming machinery and plant
  2. The Commissioners may remit the import deposit payable in respect of any goods if satisfied that—

  (a) it is intended to use them as spare parts or replacements for machinery or plant in use in manufacturing or processing industry or agriculture, and

  (b) such spares or parts are for machines or plant of foreign origin, and

  (c) such spares or parts are not manufactured in the United Kingdom.

  Sir K. Joseph: This is a group of most important Amendments. I shall take them quickly, because their virtues are self-evident. The first, No. 68, deals with a number of machine tools. The Government really have landed themselves in a problem here, because though they have recognised the importance of exempting imports which are to be turned into exports—and we note with pleasure that we shall be coming shortly to the Chancellor's Amendment for this purpose—they have not so far recognised that many of the exports for which firms have firm contracts depend upon machine tools which need to be imported because they are not available in this country.
  I have a selection of letters here from different firms, mostly small, with firm export orders which are entirely dependant for their implementation on the arrival of machine tools from abroad. The firms concerned face the need, under the Bill, to find deposits of large sums, in one case, £90,000. That firm says that it is quite impossible for it to find this
  1694
  sum or borrow it, yet, if it does not find it, it will have to break contracts, in one case involving a firm order worth £1 million of foreign exchange.
  I could give detailed examples, but I hope that the Government will take the point, which is amply illustrated in the letters I have received from hon. Members and directly, and which can be only a small sample of a wide-ranging problem. I hope that the Government will recognise the problem and will undertake to accept the Amendment, or to meet the point on Report or, if that is too hurried, to consider the point carefully and deal with it by discretion or by an Amendment.
  Amendment No. 86 deals with the need to import agricultural machinery. If such agricultural machinery is subject to deposit on arrival, obviously there will be an implication for farm costs.
  Amendment No. 147 is most important. The Government have recognised the importance of the shipping and shipbuilding industry by putting ships above a certain size in the Schedule of exemptions. I understand from the Chamber of Shipping that it has been accepted that containers should be treated in the same way as ships where the containers are, as it were, a part of a ship. The ships on which the containers go are exempt, but the containers which would go on them are not exempt. One shipbuilder has ordered abroad several thousand containers, and he is now faced with a totally unpredictable extra cost which may seriously affect the economics of his operation.
  No single Amendment which has been dealt with has such force as the case for exempting containers, and I hope, again, that the Minister will either accept Amendment No. 147, or that he will, on Report, by discretion, or by a later piece of legislation, treat containers in the same way as ships with which they go.
  Mr. Emery: I will attempt to be as brief as my right hon. Friend. Amendment No. 148 has equal strength with any other Amendment to this Clause. It is concerned specifically with spare parts for industrial machinery and plant already in this country and which, to enable industry to continue, must be properly maintained. It is concerned, also, with spare parts for agricultural machinery which is essential to enable

  1695
  the farmer to continue in operation. The Government surely cannot consider that it is right to limit imports of spare parts of machinery in such a way as to prevent the proper maintenance of machinery so that it stands idle.
  Almost by definition it is impossible for the proper spare parts for foreign industrial and agricultural machinery to be obtained in this country. To safeguard the Government's position, subparagraph (c) states that these spare parts should be exempted only if they are not manufactured in the United Kingdom. If they are manufactured in the United Kingdom, my argument falls to the ground, even if they are not genuine spare parts but merely replacement parts. I am willing to bend over backwards to persuade the Government to accept my argument. By definition, the Government cannot demand import deposits for spare parts for machinery which without those spare parts would stand idle.
  I cannot believe that that is the view of the Government. Therefore, I must ask them, if they will not accept the exact words of my Amendment, at least to accept the principle behind it and act upon it before we come to Report.
  [Mr. JOHN BREWIS in the Chair]
  12 p.m.
  Mr. Kirk: My right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) has made a strong case generally, but I want to refer specifically to Amendment No. 86, which deals with agricultural machinery.
  At a time when the Minister of Agriculture is calling for a vast increase in agricultural production, it is lunatic to limit the possibilities of doing it. We are told that British agriculture has to produce import savings of about £150 million in the period beginning 1970, but how is it to be done if our farmers cannot get the machinery with which to do it and, as my hon. Friend the Member for Honiton (Mr. Emery) said, even if they get the machinery, they cannot get the spare parts to keep it going.
  The Amendment covers virtually all the necessary machinery—[Interruption.] I did not catch what the Home Secretary said. Perhaps he would care to repeat it.
  Mr. Callaghan: I was thinking what a thin case right hon. and hon. Gentlemen
  1696
  opposite were making. and wondering when one of them would suggest that our farmers might buy British now and again. There is plenty of farm machinery which is manufactured in this country and which is of good quality, available at good prices and with early deliveries. They could buy that, instead of foreign-produced machinery.
  Mr. Kirk: If the right hon. Gentleman knew anything about agriculture, which, clearly, he does not, he would know that a very large part of the machinery used on our farms is provided from home sources. But if he wishes to restrict British farmers solely to supplies coming from home sources, a lot of which come from my constituency, he will not achieve the increase in agricultural production which his Government are so anxious to see, together with the import savings which will come from it—[Interruption.] If the right hon. Gentleman can produce figures, perhaps he will produce them now, instead of sitting there muttering.
  Mr. Callaghan: One of the features of the case put forward by right hon. and hon. Gentlemen opposite which have impressed me is that they have produced no figures in support of their claim.
  Sir K. Joseph: I hope that the right hon. Gentleman will recognise that, with rushed panic legislation, our case cannot be as well presented as it would be given proper time.
  Mr. Callaghan Mr. Callaghan rose—
  The Temporary Chairman (Mr. John Brewis): Order. We cannot have intervention after intervention.
  Mr. Kirk: Mr. Brewis, I am always prepared to give way to a right hon. or hon. Gentleman on the Front Bench opposite.
  Mr. Callaghan: All that the hon. Gentleman needs is to go to the Library, where he will find all the statistics about imported machinery that he wants. The fact that right hon. and hon. Gentlemen opposite produce no figures shows how thin is their case.
  Mr. Michael Alison: Did the right hon. Gentleman notice that, when Mr. Catherwood spoke about exports the other day, he pointed out that

  1697
  we have a favourable balance of trade on machinery? His argument that we import more machinery than we export is fallacious.
  Mr. Kirk: I am beginning to wonder whether the Home Secretary is now in charge of the Bill. I understood that he ceased to be Chancellor of the Exchequer a year ago. Perhaps he has resumed office and we have not heard about it.
  Mr. Callaghan: That is rather discourteous, even for the hon. Gentleman, when I rose in reply to his invitation.
  Mr. Kirk: I did so because I could not hear what he was muttering from a sitting position. I hope that he will not accuse me of being discourteous to him.
  Before this storm of interruptions fell about my ears, I was trying to say that, if the Amendment is not made, the Government will not be able to get the import savings which I understand that they are anxious to maintain. Therefore, it is important—
  Mr. Callaghan: Buy British.
  Mr. Kirk: It is no use the right hon. Gentleman's muttering "Buy British". He is not the hon. Member for Buckingham (Mr. Maxwell). He is Home Secretary. He knows the facts of life. I have no doubt that he wishes that he were the hon. Member for Buckingham. He is displaying symptoms of paranoia, and appears to be unable to make up his mind whether he is Home Secretary, Chancellor of the Exchequer or Minister of Agriculture. He must choose who he is. I have said once or twice, but the right hon. Gentleman did not appear to be listening, that if he is serious about having an increase in agricultural production, he should allow this Amendment to pass, as he appears to be in charge of proceedings at the moment and he is a senior Minister.
  Mr. Alison: I can hear the Home Secretary's comments almost as clearly as my hon. Friend's speech. If he believes that "Buy British" should be translated overseas and that the Germans should say, "Buy German", the Japanese should say, "Buy Japanese" and the French should say, "Buy French", would it not be a happier and more rational world?
  Mr. Kirk: I think that the Home Secretary would say that is about what he wants. Despite the somewhat disruptive nature of what I have been trying to say, I hope that it has been understood and that the Committee will accept these Amendments.
  Captain Walter Elliot: Amendment No. 125, in my name, deals with the shipping industry. Its purpose is to widen the powers of the Commissioners to remit import deposits so as to cover also importations of productive plant and equipment for use in a registered shipbuilding yard for building, repairing and refitting ships.
  Mr. Harold Lever: On a point of order. Is Amendment No. 125 being taken with this group?
  The Temporary Chairman (Mr. John Brewis): Yes.
  Captain Elliot: That was an unnecessary intervention.
  As at present drafted, the paragraph authorises remission only in relation to components, parts, preservatives or finishes of any ship being built, repaired or refitted in a yard or the equipment or machinery of the ship. The shipbuilding industry trades in an unprotected and international competitive market and it has long been recognised that it should be free to purchase not only materials and components, but also plant unhampered by import duties. This freedom dates back to the Import Duties Act, 1932, re-enacted and continued by Section 5(2) of the Import Duties Act, 1958.
  The Amendment would substitute in the Bill the wording in the existing regulations. It covers productive plant as well as materials and components. The Amendment is particularly important because many shipbuilding undertakings are carrying out major schemes of reorganisation following the Report of the Geddes Committee. Whenever possible new plant is obtained from home sources, but some has to come from abroad because of the nature of the plant or because of the cost. Today, most major reorganisation schemes are financed by borrowed money. Even if the 50 per cent. deposit can be found, it will add materially to the cost of the reorganisation schemes. This will be to the detriment of the industry's competitive position in world markets.
  Mr. Peter Mills: I wish to speak about Amendment No. 86. There is a very good case for using more British agricultural machinery. I fully accept that and I have said so on many occasions. Sometimes we are far too eager to use machinery coming from abroad when there is adequate and perfectly good British machinery, but we have the very serious problem of spares.
  In agriculture today we have many types of foreign machines. Some are very sophisticated, particularly mowers and combine harvesters and milking machines. It is ridiculous to think, when we consider the part which agriculture should be playing in the economy, that there should be hindrance in obtaining spares. To have spares at hand and to be able to get them to farms quickly is vital and this is, therefore, a suitable Amendment. All agricultural spares should be exempt.
  Another important point has not been mentioned: that certain types of machines being used on our farms are sophisticated and complicated types which we do not produce in this country. It is necessary for British agriculture to buy them. They include heavy crawlers and Dutch drainage equipment. If we want to get our farms in full working order, and capacity, it is necessary to use some of these heavy machines and tackle, particularly heavy drainage machinery and equipment from Holland and other countries. I could give other examples of heavy equipment to which the exemption should apply.
  Agriculture is playing a vital part now and will be even more important in future. It is stupid for the Government to hinder spares coming here with the specialised equipment which British agriculture needs. I hope that we shall have a satisfactory answer from the Minister. He should give a promise to farmers that there will be no delay. What is the use of having combines and other gear and no spares? I hope that the Minister will set my mind, and the minds of other farmers, at rest.
  Mr. Patrick McNair-Wilson: I support my hon. Friends the Members for Torrington (Mr. Peter Mills) and Honiton (Mr. Emery), and I am grateful to my hon. Friend the Member for Honiton for drawing attention to Amendment No. 148, which is in my name as well.
  1700
  The spares question is important. It is ridiculous if machinery, albeit foreign, which upsets the Home Secretary so much, cannot be used to the full. This Amendment is a modest attempt to ensure that spares can come in so that machinery can play a full part in getting the cut in our imports which we are striving for and to enable British agriculture to expand.
  One point which has emerged throughout the debate is the Government's refusal to give an inch on any item in the Bill. We are asking here for something so modest that at this late hour, at the end of the day, if the Minister could at least make this concession he would set at rest the minds of many people.
  If there is one criticism, it is of the bad public relations which the Government have used in connection with the Bill. I took a party of school children from my constituency round this building this morning. We came to the postcard stand and it was selling postcards produced in Spain. That is an example. I urge the Minister to give us a satisfactory answer. Postcards from Spain, children from an agricultural constituency, look bad when we are debating import control.
  12.15 a.m.
  Mr. Dudley Smith: I should like to reinforce the plea made on behalf of the machine tool industry The Government's action has come as a tremendous shock to the machine tool industry. As my hon. Friend said, the Government have got their public relations badly wrong.
  There are a number of machine tool firms in my constituency. One, which can by no means be described as large, has had to put down over £200,000 in deposits for machinery which cannot be obtained in this country. The industry has been doing a tremendous amount to try to get the country moving again and this scheme has come as a decided slap in the face. The Government, on this occasion, ought to give way, as my hon. Friend the Member for New Forest (Mr. McNair-Wilson) said, both on agricultural machinery and on general machine tools.
  Mr. Taverne: One common feature of all the speeches made so far has been their brevity—a sterling quality at this

  1701
  time of night. The reason my reply to these many Amendments, covering a very wide area, can also be brief is because they are all concerned with one common feature—manufactures.
  The Amendments cover a huge area. The first Amendment, for example, would exempt most machine tools from the deposit scheme. The second Amendment would exempt a huge quantity of agricultural machinery. The consequence of accepting the Amendments would be to blow a huge hole in the scheme. It would make nonsense of the scheme as a whole if this vast area of machine tools and agricultural machinery was to be made exempt.
  Mr. Peter Mills: Does the hon. Gentleman realise that although it may have serious consequences for the Bill, in agriculture it will have particularly serious consequences?
  Mr. Emery: And for the nation.
  Mr. Taverne: The argument here would apply to a great many other manufactures. The whole credit control aspect of the scheme, which is one of the two main purposes, would be not nullified, but enormously shrunk, if these Amendments were accepted.
  Various arguments were advanced in favour of making exemptions, but they were no different from those advanced in favour of other Amendments. In some cases it was suggested that there were people who needed machine tools which could only be obtained from abroad. Concerning machine tools, it is impossible to define any workable distinction between those that can only be obtained from abroad and those that cannot. It has never been the Government's intention, as my hon. Friend has explained time and again, to produce something which would be a purely protective Measure. Even if we could discriminate in favour of desirable imports, this would run counter to the spirit of the E.F.T.A. agreement.
  The short answer to the major Amendments for machine tools—and we could not specially exempt machine tools in shipbuilding from this category—and for agricultural machines is that this would destroy the major effect which the deposit scheme is designed to achieve.
  1702
  Two special pleas were made. One was for spare parts and the other was for containers. I do not fully understand the Amendment about spare parts, but that is a comparatively minor point. I am not clear whether it is meant to relate only to spares or, at certain stages, to whole machines.
  Mr. Emery: Perhaps I might help the hon. Gentleman. There is a misprint. If he looks at the line, "parts" should be two further on. So it is always spares and not machines.
  Mr. Taverne: I thought that that was probably the intention of the Amendment. But there are two diffculties about it. The first is the same fundamental point that arose on the other Amendments. This would mean that manufacturers were being exempted when the purpose of the scheme is to keep manufacturers out of the Schedule.
  The second point is that the administration of this kind of provision to decide the various points brought forward would be extremely difficult. It would place a huge volume of work on the Customs. We would have the difficulty of imports being held up at the docks and confusion being created there while inquiries were made whether the conditions of this exemption applied. The moment that this kind of situation arises, other importers are affected. We must have clear criteria to try to avoid the difficulties to which these Amendments would give rise.
  The most meritorious of the cases which were made was that relating to containers. The Amendment as it stands goes rather further than the representations which the Chamber of Shipping has been making, because it would apply also to containers which could be used wholly for United Kingdom domestic traffic. But this is a minor point. The difficulty here is, again, that one has manufactures, but I should like to look carefully at the position which arises, since there is obviously force in the point made by the right hon. Gentleman. A deputation from the Chamber of Shipping is discussing the matter with the Customs today. This is one of the items which will be considered carefully, with a view to the powers which the Government have in reserve being applied if a strong case arises.

  1703
  We must see how this works out. We shall listen carefully to the detailed representations which the Chamber of Shipping makes, but the bulk of the Amendments go fundamentally counter to the whole scheme and for that reason I cannot recommend the Committee to accept them.
  Sir K. Joseph: I thank the Minister of State at least for his attitude to containers, but my hon. Friends and I are very disappointed with the rest of his speech. Nevertheless, I ask my hon. Friends to consider that it might be better not to press the matter to a Division, to give us more time for the important group of Amendments relating to surgical instruments, and also to enable us to get, before too long, to the vital export Amendment which the Government have tabled.
  So that we can discuss these matters which are so important for industry, I ask my hon. Friends to consider not pressing the Amendment to a Division.
  Amendment negatived.
  Mr. Patrick Jenkin: I beg to move Amendment No. 69, in page 9, line 45, leave out from beginning to end of line 15 on page 10 and insert:

  Chapter 89

  …

  Ships, boats and floating structures.

  The only point on the Amendment—and I put it pursuant to representations made by a business man in my constituency to my hon. Friend the Member for Chigwell (Mr. Biggs-Davison), whose constituent he is—arises in relation to the International Boat Show. There, mostly British boats are on display. As with an increasing number of these shows, it is international, and firms there bring foreign made boats here, just as British-made boats go to foreign boat shows.
  The boats which will be displayed in the new year have been ordered, and in some cases are on the high seas. I imagine that a relatively small amount will as it were be taken out of the scheme if the whole of Chapter 89 were included in Schedule 1, and not merely boats of more than 80 tons and fishing boats and other classes of vessel mentioned in the First Schedule.
  This is a small Amendment which will contribute to international trade, and I hope that the Financial Secretary will
  1704
  feel able to make a sympathetic reply, possibly with a view to looking at this after the Bill has become law and making the necessary addition to the Schedule.
  Mr. Harold Lever: The present exemption covers the largest sea-going vessels which could be mainly engaged in commerce, and light vessels, dredgers. floating cranes and floating docks used in maintaining ships or navigation. It does not exempt pleasure yachts or similar vessels of fewer than 80 tons, and that is not an unreasonable split. The hon. Gentleman moderately pressed his case for yachts at exhibitions. I can set his mind at rest. Yachts which come purely for exhibition purposes are not chargeable to the deposit.
  I would only say, further, that, on this Amendment, we are on course. I say, "Steady as we go".
  Sir K. Joseph: I beg to ask leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  Mr. Burden: I beg to move Amendment No. 93, in page 10, line 16, at end insert—
  Medical and surgical instruments and apparatus within 90.17.
  I must say straight away that I am filled with quite a lot of hope. It seems that the Government's attitude is changing. I accept, of course, that these are manufactured goods. They are most clearly defined, and they appeal to a very restricted and professional market. They are for the supply of equipment to skilled professional men and women engaged in the treatment of human and animal suffering, illness and disease.
  I would point out that the Customs tables very clearly define what items come within this sphere. The cost of imports of medical, dental, surgical, and veterinary instruments in 1966 amounted to a total of £4,282,144, and some of these items are at present free. Among the free articles are aorted heart valves and Mitchell heart valves, and it would surely seem only logical that these should still be free.
  The range of duties on medical appliances and equipment go from 12½ per cent. in the lowest scale to 32 per cent. and those from E.F.T.A. and Commonwealth countries are all free of duty. I

  1705
  would remind the Government that if there is to be a continuation of imports on the same scale as in 1966, then a deposit of about £2 million will be required; and yet all these items for which we are asking exemption are needed solely for the treatment of injury and suffering and disease in human beings and in animals. They are used almost entirely by hospitals and the hospital services and, therefore, a great amount of the money which is expended on them comes from the National Health Service. They are used in clinics, both private and those established in the Service, and by doctors for the treatment of human suffering and injury.
  I ask the First Secretary and his right hon. Friends to consider very carefully whether these life-saving items could not be exempted from the charge.
  12.30 a.m.
  Mr. Taverne: The hon. Member for Gillingham (Mr. Burden) has made out a case which is deserving of careful consideration. We have not generally, under the Bill, been able to exempt imports because they were for a worthwhile purpose. The Financial Secretary had a long discussion with hon. Members earlier about chemicals, pharmaceuticals and medicaments, when much the same principles had to apply as applied to other products. Much as we would like to free an importer from the burden of the deposit if the import was for a particularly humane purpose, we cannot proceed in that way.
  If there is any shortage of these instruments because importers are unable to obtain the money for the deposits—which seems inconceivable—action could and would be taken. As the hon. Member fairly realised, these are manufactures, and not an insignificant quantity—£4 million worth, for which deposits amounting to £1 million, and not £2 million, would have to be found. I do not see that there will be any difficulty in raising the deposits.
  If we exempted goods for this purpose, we would then open a wide door to pressure for other worthwhile exemptions. In the circumstances, although the position will be kept under review, I would not advise the Committee to accept the Amendment.
  Mr. Patrick Jenkin: I cannot believe that the Minister of State was happy at having to deliver that reply. It was a typical example of what is wrong with a scheme like this. For a Minister to refuse a request as reasonable and modest as this—and one which was reasonably put by my hon. Friend the Member for Gillingham (Mr. Burden)—is a condemnation of the whole of this scheme. It is entirely appropriate that my right hon. and hon. Friends should support my hon. Friend should he be disposed to press his Amendment to a Division.
  Mr. Burden: We are extremely disappointed at the Minister's reply. Even at this last stage, I would ask the hon. and learned Gentleman to reconsider the matter—
  Mr. Taverne Mr. Taverne indicated dissent.
  Mr. Burden: He shakes his head. I think that the Government have gone as low as they possibly can on this, one of the last Amendments to be considered during Committee stage. They are saying that, before any exemptions for medical appliances and instruments necessary for the relief of human suffering can be made, it must be shown that there is a shortage, which means that the suffering must take place before they will—
  Mr. Taverne Mr. Taverne indicated dissent.
  Mr. Burden: Yes, that is what the hon. and learned Gentleman said—
  Mr. TaverneNo, there is no likelihood of any kind that those who will be needing these instruments will be unable to raise the deposits to import them.
  Mr. Burden: That is pure supposition. It may be pure supposition on my part to say that there will be suffering, but in circumstances like this it is better to avoid any possibility of suffering being caused, and remove this imposition. I must ask my right hon. and hon. Friends to join me in expressing our disgust in the Lobby.
  Question put, That the Amendment be made:—
  The Committee divided: Ayes 101, Noes 159.

  Division No 28.]

  AYES

  [12.25 a.m.

  Alison, Michael (Barkston Ash)

  Hall-Davis A. G. F.

  Page, Graham (Crosby)

  Awdry, Daniel

  Harrison, Col. Sir Harwood (Eye)

  Page, John (Harrow, W.)

  Bennett, Dr. Reginald (Gos. & Fhm)

  Hiley, Joseph

  Pink, R. Bonner

  Biffen, John

  Hill, J. E. B.

  Powell, Rt. Hn. J. Enoch

  Blaker, Peter

  Holland, Philip

  Price, David (Eastleigh)

  Boardman, Tom (Leicester, S.W.)

  Hordern, Peter

  Pym, Francis

  Body, Richard

  Hunt, John

  Renton, Rt. Hn. Sir David

  Boyle, Rt. Hn. Sir Edward

  Iremonger, T. L.

  Rhys Williams, Sir Brandon

  Braine, Bernard

  Irvine, Bryant Godman (Rye)

  Rossi, Hugh (Hornsey)

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

  Jenkin, Patrick (Woodford)

  Royle, Anthony

  Buck, Antony (Colchester)

  Johnson Smith, G. (E. Grinstead)

  Russell, Sir Ronald

  Burden, F. A.

  Jopling, Michael

  Scott, Nicholas

  Campbell, B. (Oldham, W.)

  Joseph, Rt. Hn. Sir Keith

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

  Carlisle, Mark

  Kershaw, Anthony

  Silvester, Frederick

  Channon, H. P. G.

  Kimball, Marcus

  Sinclair, Sir George

  Clark, Henry

  Kirk, Peter

  Smith, Dudley (W'wick & L'mington)

  Cooke, Robert

  Kitson, Timothy

  Steel, David (Roxburgh)

  Costain, A. P.

  Knight, Mrs Jill

  Taylor, Sir Charles (Eastbourne)

  Crowder, F. P.

  Legge-Bourke, Sir Harry

  Taylor, Frank (Moss Side)

  Davidson, James (Aberdeenshire, W.)

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

  Tilney, John

  Dean, Paul.

  Longden, Gilbert

  Turton, Rt. Hn. R. H.

  Drayson, G. B.

  Lubbock, Eric

  Waddington, David

  Eden, Sir John

  McNair-Wilson, Patrick

  Webster, David

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

  Mackenzie, Alasdair (Ross & Crom'ty)

  Wells, John (Maidstone)

  Emery, Peter

  Marples, Rt. Hn. Ernest

  Whitelaw, Rt. Hn. William

  Eyre, Reginald

  Mawby, Ray

  Williams, Donald (Dudley)

  Fletcher-Cooke, Charles

  Maxwell-Hyslop, R. J.

  Winstanley, Dr. M. P.

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

  Mills, Peter (Torrington)

  Wolrige-Cordon, Patrick

  Giles, Rear-Adm. Morgan

  More, Jasper

  Worsley, Marcus

  Gilmour, Sir John (Fife, E.)

  Morrison, Charles (Devizes)

  Wright, Esmond

  Glover, Sir Douglas

  Munro-Lucas-Tooth, Sir Hugh

  Goodhart, Philip

  Murton, Oscar

  TELLERS FOR THE AYES:

  Gower, Raymond

  Nabarro, Sir Gerald

  Mr Hector Moore and

  Gresham Cooke, R.

  Noble, Rt. Hn. Michael

  Mr. Bernard Weatherill

  Gurden, Harold

  Osborn, John (Hallam)

  NOES

  Abse, Leo

  Faulds, Andrew

  Lestor, Miss Joan

  Allaun, Frank (Salford, E.)

  Fennyhough, E.

  Lever, Harold (Cheetham)

  Alldritt, Walter

  Fitch, Alan (Wigan)

  Lewis, Ron (Carlisle)

  Allen, Scholefield

  Fletcher, Ted (Darlington)

  Lomas, Kenneth

  Anderson, Donald

  Foley, Maurice

  Macdonald, A. H.

  Archer, Peter

  Ford, Ben

  McGuire, Michael

  Armstrong, Ernest

  Forrester, John

  Mackie, John

  Ashton, Joe (Bassetlaw)

  Fowler, Gerry

  Mackintosh, John P.

  Atkins, Ronald (Preston, N.)

  Freeson, Reginald

  Maclennan, Robert

  Atkinson, Norman (Tottenham)

  Gardner, Tony

  McMillan, Tom (Glasgow, C.)

  Barnett, Joel

  Gordon Walker, Rt. Hn. P. C.

  McNamara, J. Kevin

  Beaney, Alan

  Gray Dr. Hugh (Yarmouth)

  Mahon, Peter (Preston, S.)

  Benn, Rt. Hn. Anthony Wedgwood

  Greenwood, Rt. Hn. Anthony

  Mahon, Simon (Bootle)

  Bennett, James (G'gow, Bridgeton)

  Gregory, Arnold

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

  Bidwell, Sydney

  Grey, Charles (Durham)

  Manuel, Archie

  Bishop, E. S.

  Griffiths, David (Rother Valley)

  Mapp, Charles

  Blenkinsop, Arthur

  Griffiths, Will (Exchange)

  Marks, Kenneth

  Booth, Albert

  Hamilton, James (Bothwell)

  Mason, Rt. Hn. Roy

  Boston, Terence

  Hamling, William

  Mikardo, Ian

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

  Hannan, William

  Millan, Bruce

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

  Harper, Joseph

  Miller, Dr. M. S.

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

  Harrison, Walter (Wakefield)

  Milne, Edward (Blyth)

  Butler, Mrs. Joyce (Wood Green)

  Hart, Rt. Hn. Judith

  Morgan, Elystan (Cardiganshire)

  Callaghan, Rt. Hn. James

  Haseldine, Norman

  Morris, Alfred (Wythenshawe)

  Cant, R. B.

  Hazell, Bert

  Morris, Charles R. (Openshaw)

  Carmichael, Neil

  Herbison, Rt. Hn. Margaret

  Morris, John (Aberavon)

  Castle, Rt. Hn. Barbara

  Horner, John

  Moyle, Roland

  Coe, Denis

  Houghton, Rt. Hn. Douglas

  Mulley, Rt. Hn. Frederick

  Dalyell, Tam

  Howarth, Robert (Bolton, E.)

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

  Davies, Ednyfed Hudson (Conway)

  Howell, Denis (Small Heath)

  Ogden, Eric

  Davies, Dr. Ernest (Stretford)

  Huckfield, Leslie

  O'Malley, Brian

  Davies, Ifor (Gower)

  Hughes, Emrys (Ayrshire, S.)

  Orme, Stanley

  Dewar, Donald

  Hughes, Roy (Newport)

  Oswald, Thomas

  Diamond, Rt. Hn. John

  Jackson, Peter M. (High Peak)

  Owen, Dr David (Plymouth, S'tn)

  Dickens, James

  Janner, Sir Barnett

  Page, Derek (King's Lynn)

  Dobson, Ray

  Jay, Rt. Hn. Douglas

  Paget, R. T.

  Doig, Peter

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

  Palmer, Arthur

  Dunn, James A.

  Jones, Dan (Bunley)

  Pavitt, Laurence

  Eadie, Alex

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

  Peart, Rt. Hn. Fred

  Edelman, Maurice

  Jones, T. Alec (Rhondda, West)

  Perry, George H. (Nottingham, S.)

  Ellis, John

  Kenyon, Clifford

  Roberts, Albert (Normanton)

  Ennals, David

  Lawson, George

  Roberts, Rt. Hn. Coronwy

  Evans, Fred (Caerphilly)

  Leadbitter, Ted

  Roebuck, Roy

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

  Lee, Rt. Hn. Jennie (Cannock)

  Rose, Paul

  1708

  1709

  Ross, Rt. Hn. William

  Summerskill, Hn. Dr. Shirley

  Whitlock, William

  Rowlands, E. (Cardiff, N.)

  Swain, Thomas

  Williams, Alan (Swansea, W.)

  Shaw, Arnold (Ilford, S.)

  Taverne, Dick

  Williams, Mrs. Shirley (Hitchin)

  Short, Mrs. Renée (W'hampton, N.E.)

  Tinn, James

  Wilson, William (Coventry, S.)

  Silkin, Rt. Hn. John (Deptford)

  Urwin, T. W.

  Woof, Robert

  Silverman, Julius

  Varley, Eric G.

  Slater, Joseph

  Wainwright, Edwin (Dearne Valley)

  TELLERS FOR THE NOES:

  Small, William

  Wallace, George

  Mr. Ernest G. Perry and

  Snow, Julian

  Watkins, David (Consett)

  Mr. Neil McBride

  Steele, Thomas (Dunbartonshire, W.)

  Wellbeloved, James

  Strauss, Rt. Hn. G. R.

  Wells, William (Walsall, N.)

  Mr. Emery: On a point of order, Mr. Brewis. May I refer you to Standing Order No. 48, which makes it clear that, in Committee or at any other stage, the procedure is such that no new Clause may be considered without notice? If that is so, what is the minimum notice that may be given so that a new Clause can be considered on Report if we proceed to that stage immediately after the Committee stage?
  12.45 a.m.
  The Temporary Chairman (Mr. John Brew is): That is not a matter for me. The hon. Gentleman will have to make his point of order to Mr. Speaker.
  Sir D. Glover: Further to that point of order. My hon. Friend the Member for Honiton (Mr. Emery) has raised a matter of very great importance to the Committee, and I am sure that he would like the advice of the Chair. How can he make that submission to Mr. Speaker when we are in Committee? If, by the time we cease to be in Committee and are back in the House, it is too late for him to make that submission, as is only too likely by the Ruling of the Chair, what protection is there for the rights of back benchers? We are here in very great danger of the rights of back benchers being overridden by the Ruling of the Chair.
  The Temporary Chairman: I regret to say that the time has passed in which new

  Goods for export

  5

  3.—(1) The Commissioners may remit import deposit payable in respect of any goods if satisfied—

  (a) that it is intended to re-export the imported goods, or goods incorporating the imported goods, or goods manufactured or produced from the imported goods; or

  (b) that the remission of import deposit would conduce to the exportation of other goods, being goods constituting or incorporating, or manufactured or produced from, equivalent articles.

  10

  (2) The Commissioners may repay import deposit paid in respect of any goods if satisfied that those goods, or goods incorporating the imported goods, or manufactured or produced from the imported goods, have been exported.

  15

  (3) Any remission or repayment of import deposit under this paragraph shall be subject to such conditions and restrictions, if any, as the Commissioners may think fit to impose for the protection of the Revenue; and if any condition or restriction so imposed is not complied with, or if, where import deposit has been remitted under paragraph

  Clauses can be taken in Committee. That is as far as I can go, because I am occupying the Chair. I cannot give any ruling on behalf of Mr. Speaker.
  Mr. Michael Jopling Mr. Michael Jopling (Westmorland) rose—
  The CHAIRMAN, being of the opinion that the principle of the Schedule and any matters arising thereon had been adequately discussed in the course of debate on the Amendments proposed thereto, forthwith put the Question, pursuant to Standing Order No. 47 (Debate on Clause or Schedule standing part), That this Schedule be the First Schedule to the Bill.
  Schedule agreed to.
  Mr. Jopling: On a point of order, Mr. Brewis. Is it not possible for us to discuss Schedule 1? I rose when you started to put the Question.
  The Temporary Chairman: Order. I regret to say that it is not debateable. It is the Chairman's discretion. I have put the Question. We must move on to Amendment No. 73.

Schedule 2

  RELIEFS
  Mr. Harold Lever: I beg to move Amendment No. 73, in page 11, line 42, leave out paragraph 3 and insert:—

  (i)(a) above, the goods are disposed of or used in a way inconsistent with the intention to re-export, the import deposit remitted or repaid shall become payable, or repayable, to the Commissioners.

  20

  (4) In this paragraph 'equivalent articles' means goods of any description which, in the opinion of the Commissioners (having regard to such matters, and in particular to such of the following matters, namely, the description, quantity, quality, value and function of those goods and the imported articles respectively, as appear to the Commissioners to be relevant in the particular circumstances) are sufficiently similar to the imported
  articles or to goods which could be manufactured or produced from the imported articles, to be reasonably regarded for the purposes of relief under this paragraph as interchangeable with those articles or, as the case may be, with goods manufactured or produced from them.

  25

  30

  (5) To facilitate applications for relief under this paragraph, the Commissioners may extend the said definition of 'equivalent articles' so as to include all or any categories of articles which are classified in the Customs Tariff 1959 (as applied by orders under the Import Duties Act 1958), in the same heading, sub-heading or sub-division of a subheading as the imported goods; and, where the relevant heading is sub-divided, it shall be for the Commissioners to determine, as between the heading, and the relevant

  35

  sub-heading or further sub-division, which is the appropriate classification to select.

  40

  (6) For the purposes of this paragraph—

  (a) any reference to goods produced or manufactured from any imported goods shall be construed as including cases where the goods are produced or manufactured partly from the imported goods, or wholly or partly from other goods produced or manufactured from the imported goods;

  (b) any container in which goods are exported, being a container—

  (i) which is provided by the supplier of the exported goods and is not required to be returned to him, and

  45

  (ii) for which, if it were returned to him, that supplier would give no credit and would discharge no contingent liability,

  shall be treated as forming part of the exported goods.

  The Temporary Chairman (Mr. John Brewis): With this Amendment we will take the Amendment to the proposed Amendment standing in the name of the hon. Member for Pudsey (Mr. Hiley), in line 19, at end insert:—
  Provided that the Commissioners shall repay the deposit repayable under this paragraph immediately evidence is available to them that the goods in question have been exported.
  and the following Amendments: No. 84, in page 12, line 6, at end insert:
  (2) The Commissioners may remit the import deposit payable in respect of goods if satisfied that it is intended to use them as a component part of goods intended for export or in the process of producing goods for export.
  and No. 126, in line 38, at end insert:
  Goods imported as a condition of exports
  5. Articles imported in fulfilment of a contract which also provides for the export of British goods of a value greater than the total value of such articles shall qualify for relief from import deposit.
  Mr. Lever: Broadly speaking, the effect of the Amendment is to make it possible for the Customs to relieve from import deposits goods which, when imported, can be shown to be intended for use in the export trade. I hope that hon. Members will notice the broad sweep of those words: the intention that so far as pos-
  1712
  sible all goods intended for use in the export trade will be relieved from any additional burden of the import deposits intended, in fact, to fall on home market goods.
  The effect is thus to generalise exemptions for exports and further liberalise the provisions in that we no longer retain the limitations of the law on protective duties which cover only part of the field. I hope that I will be forgiven, because it is of great importance to all exporters, to have this described somewhat accurately, if I go into some detail, even at this late hour.
  It will, of course, not be easy for the Customs to operate these reliefs, but they are already operating a similar scheme in regard to goods liable to protective duties and they will, as far as possible, combine the two operations. Broadly speaking, the intention is that in so far as importers can, at the time of importation, earmark goods or a proportion of them as intended for use in the export trade, whether as they stand, or after incorporation in other goods, or after being further processed or manufactured, the import deposit will be remitted on these goods or on the appropriate proportion of them.
  Sir K. Joseph: Will the Financial Secretary repeat that last sentence?
  Mr. Lever: If I can recall it.
  It will, of course, not be easy for the Customs to operate these reliefs, but they are already operating a similar scheme in regard to goods liable to protective duties and they will, as far as possible combine the two operations. Broadly speaking, the intention is that in so far as importers can, at the time of importation, earmark goods or a proportion of them as intended for use in the export trade, whether as they stand, or after incorporation in other goods or after being further processed or manufactured, the import deposit will be remitted on these goods or on the appropriate proportion of them.
  I can think of no words broader than that to cover the intention of the Government that the import deposit shall not fall on any goods intended for export in whatever form they ultimately appear at their export destination.
  But we go beyond that. Alternatively, if this cannot be done, that is, if the importer cannot earmark a proportion of the goods, or say that part of them is likely to be exported in this way, but can show that there is every expectation that a certain percentage of his goods in this class as a whole will be so used, the import deposit will be remitted on that percentage of his imports.
  Finally, to try to cover every possible case, if the importer cannot do either of those things, but can show that goods on which he has had to pay import deposit because it was not possible to establish the intention to export have actually been used in the export trade and duly exported, the import deposit can be repaid as soon as that is established. If he satisfies either of the two very broad conditions, he never has to pay it; if he cannot do that, he has to pay, but if, subsequently, he can show that a percentage of the whole of the goods has been exported, he will get his money back right away.
  Under some of the protective duty reliefs, the Customs operate subject to the concurrence of the Board of Trade, but this proviso is emitted from this provision. The reason is that cases will have to be settled so quickly that formal statutory consultation would be impracticable, but there will, of course, be sensible interdepartmental co-operation in a more general way.
  Sir D. Glover: The hon. Gentleman always tries to be practical and helpful to the Committee. Some Amendments today have dealt with chemicals, for instance. How far will this apply to them? Will it be once, or twice, or three times removed? For instance, if a firm buys some chemicals which are then used in the manufacture of other chemicals or other substances which are then exported, the total original import having been divided among some 20 firms in minor quantities, will all those firms be entitled to a come back, or will it be only at the point of departure that there will be that right to remission, the others being excluded?
  Mr. Lever: I will repeat one sentence which may give the hon. Gentleman satisfaction. Broadly speaking, the intention is that so far as importers can at the time of importation earmark goods, or a proportion of them, as intended for use in the export trade, whether as they stand or after incorporation in other goods, or after being further processed or manufactured, the import deposit will be remitted.
  It is simply a question of evidence. Of course, nobody will require from importers the sort of evidence which would be necessary, for example, to hang any hon. Member; that standard of proof will not be required. What is wanted is a reasonable, practical standard of proof. If it is forthcoming, the Customs will remit the deposit. This is not an area in which the Customs are inexperienced, because we have an identical problem with protective duties, except that there is not as liberal a coverage for an import duty as there is for the deposit.
  The broadest possible words have been used. To put it in plain non-legal language, there is complete power and discretion on the part of the Customs to protect from the import deposit burden any goods which are intended for export in any form, whether in their original form, or as part of a bundle, or after processing, or after processing by the man importing or somebody else.
  Sir D. Glover: I do not wish to be awkward, but there is here a matter of substance. Let us suppose that an importer genuinely imports a chemical which he then sells on the market. At that point, when he imports the chemical, he cannot say to the Customs that 25

  1715
  or 30 per cent. will be exported in some other form, though it may be two months later, after the chemical has been sold to others and has been processed, and when he may have a certificate from those other people showing that they are, in fact, exporting a certain percentage. I do not see how the Government can control the scheme at the point of first release.
  Mr. Harold Lever: The hon. Gentleman must first be clear that we have established a structure wide enough to deal with this. He then asks how we can, in the practicalities, establish the facts which would bring people within that structure. As I understand him, he is not complaining of the structure, which is as wide as draftsman's ingenuity can provide. The question is one of evidence. As I said, this is an area in which the Customs are exceedingly experienced, exceedingly flexible and exceedingly well able to make reasonable assessments.
  I take the case cited by the hon. Gentleman. One can look at the past experience of the user concerned, supposing him to be a merchant who is importing a particular chemical, sulphuric acid—I am not sure whether sulphuric acid is in the scheme—or whatever it may be. If he can show in a general way from his last year's trading that, say, roughly one-third of his material went into other people's export components, the Customs will look at the evidence of that in a broad, sensible and practical way, just as the hon. Gentleman would, I hope, if he had the task of assessing it for information purposes, and the Customs will remit the import deposit.
  Mr. Hugh Fraser: Let us take the simple example of a colour importer in London who imports cobalt and sells it to a colour-maker in the Potteries. The colour-maker sells the colour to a pottery firm, which then exports a quantity of its pottery on which the cobalt is used in the glaze. Is it intended that the process must be traced right back before the colour-maker can have his rebate? Does he have to have a certificate from Wedgwood to say how much cobalt was exported in the form of pottery?
  Mr. Lever: The right hon. Gentleman is drawing incorrect inferences. First, let me make the rule plain. The words are so wide about "intended for export" that I can assure the Committee that they cover this matter, through however many hands the goods may pass and through whatsoever number of processes they may pass. We are left with the practical question raised by the right hon. Gentleman and his hon. Friend, and this must be settled by practical men in a practical way.
  If it is just not establishable in any sort of reasonable and commonsense way, this is too bad. But most people have a reasonable notion and are reasonably able to show what percentage of the goods they are importing will ultimately find their way into the export trade. I do not want to particularise too much, but I shall use this example. We know that a man imports cobalt, and he deals with it in such a way that it is impossible for him to trace what happens to it ultimately. I should suppose that, if he can show that the normal user, the normal expectation in the nature of the customs he has, is that 50 per cent. will go to home and 50 per cent. will go to export, he will have not repayment of his deposit, but he will have remission of the payment; he will never have to pay it.
  It is important that all exporters and all those importing goods which are to be re-exported by themselves or by anyone else after processing, or after being handled by whomsoever thereafter, should realise that they can readily bring themselves within this exemption from payment of the deposit. I suggest that all people affected by the deposit who believe themselves to be handling goods with an ultimate export destination, after whatsoever complicated routes, should be in touch with the Customs. I imagine that most of them are already. They should be in touch with Customs to learn of the possible ways in which they can establish their right to come within the broad walls of this provision.
  1.0 a.m.
  I want to sum up in a sentence. We have all the power required to relieve exporters directly or indirectly of goods from bearing the import deposit. We have all the power and all the will. It only needs a little commonsense and

  1717
  practical communication with Customs to ensure that effect is given to this provision.
  Several Hon. Members Several Hon. Members rose—
  Mr. Lever: I am giving way in order. strictly from left to right.
  Mr. R. B. Cant: What about those at the rear?
  Mr. Ian Percival: I do not want the hon. Gentleman to think that I am in any way out of sympathy with the object of the Amendment, but he used the phrase, "if the importer establishes his right to so, then the duty will be remitted". That is not what the Amendment establishes, because it says, "The Commissioners may": not "shall". The hon. Gentleman shakes his head. I can quite see the point: he must be fed up with dealing with details. But what I am saying is correct. Under the Amendment the importer may establish on incontrovertible evidence the conditions required for the remission of the duty, but still the Customs have discretion. Why is it that the Government give the Customs discretion, instead of saying, to use the hon. Gentleman's own words, that the importers who establish these conditions shall have the right to have the duty remitted?
  Mr. Lever: The hon. and learned Gentleman obviously belongs to the hypothetical danger school of lawyers. The reason it is made discretionary is entirely for the benefit of the exporter. If we were to say "must" we would then have to set down very strict rules dealing with evidence, leaving nothing to the discretion of the Customs authorities as to the practicality of proving the very important consideration which the hon. Gentleman the Member for Ormskirk (Sir D. Glover) has put forward. So the hon. and learned Gentleman cannot have it both ways. If he wants me to put "must" in the Amendment I then have to put in very strict rules to ensure that that rigid provision is enforced. What I wanted was that the Customs should have discretion. Therefore, I have to have "may".
  I can assure the hon. and learned Gentleman that he is dealing with things which he thinks might happen, but will not. He will not think me rude, because
  1718
  he thinks that I am tired of detail—I am not—when I say that I cannot help feeling that he was being pedantic in that intervention if he thinks the purport is that in a case of incontrovertible evidence for remission the Customs will refuse remission.
  The whole point of this drafting is to ensure that Customs are not to be fettered with the obligation to stick to the strictest possible rules of evidence of the kind I suggested would be required to hang any hon. Member—on either side: I am being impartial—but should instead have more reasonable and practical methods of assessing evidence—the different kind of evidence which would be available.
  Sir D. Glover: Having raised this matter, may I say that, so far as I am concerned, I think that the hon. Member's explanation is absolutely first class? I accept it entirely. He has shown great sense in what he has said. I realise that there are a great many difficulties. I did not ask my question in any hostile manner. I wanted only to get information—
  The Temporary Chairman (Mr. Arthur Probert): Would the hon. Member help me by saying whether he is making a speech or asking a question? I remind him that I have not yet proposed the Question.
  Sir D. Glover: I thought that the hon. Gentleman gave way to me.
  Mr. Lever: I gave way to the hon. Gentleman.
  Sir D. Glover: I am grateful to the hon. Gentleman for saying so. Otherwise, I should be in some difficulty. I am very grateful for what he has said, and I accept it entirely. He has gone about as far as one could expect any Minister to go on this problem.
  There is one worry I still have, though, and that is about multiple transactions. The Minister has said the Bill is to run for only 12 months. Far from being excused their deposits, the people involved in these multiple transactions, will with all the best will in the world, not be able to get through them before the six months will be up. This is what worries me. As my right hon. Friend said about cobalt, by the time it is sorted out the six months will he up.
  The Temporary Chairman: Before the Financial Secretary replies, may I ask hon. Gentlemen to be brief in their interventions at this late hour?
  Mr. Lever: The hon. Gentleman has not, I fear, heard, and it is understandable. To secure remission, which means that the obligation to pay is remitted from the beginning, all the importer has to do is to give the evidence that there is a reasonable expectation that these goods will be exported within the wide phrases which I have already used. Once he does that, he is exempt from paying the deposit. If he can raise the expectation only in respect of a percentage of the goods, then he is from the start exempt from a percentage of the deposit. If for some reason he fails to raise that expectation, and later is able to show that the goods were directly or indirectly exported, he will get his money back right away, but that is the very last resort.
  Mr. Cant: I agree with the hon. Member for Ormskirk (Sir D. Glover) that the Financial Secretary's explanation has been extremely clear, and that it has solved most of my problems concerning the pottery industry. One question remains, although it may have been answered. I understand today from the Board of Trade that the decision whether or not to remit will be made by the local Customs official and that there will be no right of appeal. Will my hon. Friend comment on that?
  Mr. Harold Lever: There is always a right of appeal, in the sense that if a man is dissatisfied I suppose that he can have the matter taken up at the highest level. I assure all hon. Members that we have the widest power in the Clause to relieve exports directly and indirectly, and the will. The power and the will will be used in the most practical manner possible and not, as the hon. and learned Gentleman supposes, to deny unquestioned rights of this kind.
  Moreover, for import duty purposes, we have accepted the qualification contained in Section 1 of the Finance Act, 1966, that export relief does not depend upon the exportation of the actual goods imported, but may extend to goods which are interchangeable with them. We go further and link the relief with the Finance Act, thus ensuring that interchangeability can take place.
  1720
  The importer who imports 100 gallons of sulphuric acid does not have to follow the vats of acid around and show that those very vats were exported. If some vats of sulphuric acid went out, that will suffice for the purpose of getting relief pro tanto.
  Mr. Tom Boardman: The hon. Gentleman has referred to all importers and their rights, but perhaps he will make it clear that an exporter can get remission or repayment only if he is the person who paid the import deposit? Further, is the import deposit repayable on exports to the E.F.T.A. countries, bearing in mind Customs and Excise Notice 4A2, published today?
  Mr. Lever: I have had no notice of the second part of the question, but I will have it looked at urgently.
  In the meantime, I will tentatively give the answer to the first part of the question. It is not surprising that we remit the deposit only to the man who pays it. We cannot be expected to remit to a man who has not paid it. If the deposit is repaid it must surely be to the man who paid it. If it is remitted, it is to stop a man paying it at all. If it is remitted, as opposed to being repaid, there is nothing left to remit any more. We have not had a deposit. How can we remit anything further? As to repayment, we cannot make repayments other than to people who make deposits. I am not at all clear about what is troubling the hon. Gentleman.
  As for E.F.T.A. countries, I can say tentatively, until I have had time to reflect, that these, too, would be completely exempt—
  Mr. Tom Boardman Mr. Tom Boardman rose—
  Mr. Lever: We cannot be certain that traders who claim remission of the import deposit will be given E.F.T.A. tariff treatment by other E.F.T.A. countries. Customs are, therefore, telling traders at the moment that exports to E.F.T.A. countries do not qualify for relief. In our view, since the import deposit is not effectively a duty, remission of the deposit should not disqualify exporters from E.F.T.A. tariff treatment.
  I think that that is the point about which the hon. Gentleman wanted to

  1721
  know. He will get the remission, but apparently he will not be given E.F.T.A. tariff treatment by E.F.T.A. countries if he gets the remission. The treatment that E.F.T.A. countries give our exports is a matter for them, and there is nothing that we can do about it. All that we can do is remit the deposit when goods are being exported to E.F.T.A. We cannot guarantee what will be the reaction of an E F.T.A. country when the goods arrive at one of its ports. That is a matter which we will have to take up with the E.F.T.A. countries.
  Mr. Tom Boardman: I have copied the notice, and it says that it should be noted that exports for which E.F.T.A. tariff treatment will be sought cannot be counted is exports for purposes of relief from export deposit. If that is right, surely it means that an importer has to allocate his imports between those exports going to E.F.T.A. countries and those going to other countries. The situation will be even more complex than we anticipate.
  Mr. Lever: We are taking up the matter. It is not really complicated. The point is that, once we are satisfied that an export to E.F.T.A. on which remission has been granted will receive E.F.T.A. tariff treatment, we will remit We are taking up the matter urgently in Geneva, and we hope to give accurate information on it as soon as possible. It is not the fault of the Government. It is simply the fact, however much right hon. and hon. Gentlemen opposite may dislike it, that E.F.T.A. countries are independent State entities and are entitled to do what they think right.
  Sir D. Glover: We are passing a law without knowing what is happening.
  Mr. Lever: It is not a question of that. The law is quite in order. However, it seems useless to give relief to exports to E.F.T.A. countries if the effect of giving that relief is to disqualify them from E.F.T.A. tariff treatment. We are anxious to give both relief and procure for them E.F.T.A. tariff treatment. Our attitude is not half-hearted. We want them to get remission of the deposit and not to lose their E.F.T.A. tariff benefits by reason of that fact.
  1722
  The only reason this is in question is, I fear, because we cannot legislate for the E.F.T.A. countries, and we have to take up this matter with them—[Interruption.] We do not regard it as a charge—
  Sir K. Joseph: I did not mean to say that it is a charge, but that it could be treated as a charge. I did not mean to prejudice the hon. Gentleman.
  Mr. Lever: That is right, and it is an interesting point. We have had the advantage of the Attorney-General's view. In our whole treatment of it, we have imposed this obligation even where we have specifically exempted articles from Customs duty. It came up in our debates, and it is clear. We do not regard this as a disqualifying charge. I am sure that hon. Members would not want to prejudice the discussion which is being conducted urgently in Geneva. We want to get the best of all possible worlds for our exporters and we shall do our best to produce the best possible result in this respect.
  1.15 a.m.
  Mr. Joseph Hiley: I am in some difficulty over my suggested Amendment to the Amendment. If the Financial Secretary can tell me that in cases where deposits have been made and subsequently it is agreed that they should be refunded they will be refunded immediately, I would be content for that is the purpose of my Amendment. Rather than detaining the Committee, I ask the Financial Secretary if he will accept my Amendment as an addition to line 42. It would be merely dotting the i's and crossing the t's for immediate repayment for those concerned in the export trade.
  Mr. Lever: For the most part, relief will be provided by way of remission at the time of importation, and the need for repayment on proof of actual importation should arise comparatively rarely. It will be necessary in such cases to take the import deposit payment out of the usual automatic repayment machinery for special, separate repayment.
  This is bound to take a certain amount of time and we could not, therefore, undertake to make the repayment immediately the evidence is produced, but since it is our intention to make these special early repayments as soon as

  1723
  practicable after the essential facts have been established, the object of the Amendment can fairly be said to be covered.
  I can give the hon. Member for Pudsey (Mr. Hiley) the absolute assurance that the Customs will be instructed, when this fall-back situation comes, that we want to avoid taking the money and that it should be repaid at the earliest practicable moment when the evidence is produced.
  Mr. Hiley: In view of that assurance, I do not wish to move my Amendment.
  Mr. Blaker: I am sure that my hon. Friends would not wish to see anything which might prejudice the discussion now going on in Geneva on the question of refunds to exporters to E.F.T.A. countries of deposits which they have paid, but I think that the Committee should explore this question a little more because yesterday the Attorney-General made a categorical statement that there is no conflict between these proposals and the E.F.T.A. Convention. He was speaking as legal adviser to the House.
  It should follow without doubt that the deposits should be refunded, but my hon. Friend the Member for Leicester, South-West (Mr. Tom Boardman) pointed out that Custom and Excise Notice 482, which, I understand, was issued yesterday at the same time as the right hon. and learned Gentleman was addressing the Committee, says categorically that exports for which E.F.T.A. tariff treatment will be sought cannot be counted as exports for the purposes of relief from import deposit.
  It does not say that the question is being explored with E.F.T.A. and that an announcement will be made later. There is not a syllable of qualification in that notice. The average exporter should not be misled in this way. If the situation is unclear, it should be frankly admitted as one of the consequences of the way in which these proposals have been introduced and the speed with which they have been introduced. In the whole of what the Financial Secretary has said the situation has not been made clear. That is a deplorable way of proceeding.
  Mr. Harold Lever: That notice, admittedly, needs some amendment, but this
  1724
  will be attended to as soon as possible, when we have clarified the matter of the treatment to be granted by E.F.T.A. countries.
  Mr. Blaker: I am much obliged to the Financial Secretary for the helpful way he has spoken. If the Government had given this mature consideration, how is it that this notice was issued at the same time yesterday as the Attorney-General was telling the Committee that there was no doubt about the legal situation? If the Government had given this mature consideration, surely the news should have filtered through to Customs and Excise by yesterday. Apparently it did not, unless the explanation is that Customs and Excise are pursuing a separate policy from that of the Government.
  Mr. Emery: Is not the case that when we were discussing this yesterday no mention was made of this when we presumed that the deposit would be returnable on exports to E.F.T.A. If this is not so, it puts in doubt whether the scheme is contrary to the E.F.T.A. Agreement.
  Mr. Lever: Hon. Members have declared that they will not add to the difficulties that arise even though it means sacrificing a further point of chastisement. There are plenty of opportunities for chastisement.
  I wonder whether we could have a self-denying ordinance if I explained this a little more. The difficulty which presented itself to the Customs was that if they told exporters before the matter had been settled that they were going to remit the deposit that might prejudice the tariff treatment they received from E.F.T.A. On balance, the wiser course seemed to be not to remit the deposit until they had cleared up the point with E.F.T.A., because it means that by not remitting the deposit, there is no question but that our exporters are at present getting E.F.T.A. treatment. If we were to jump the gun and give them deposit exemption now before clearing up the matter, we would perhaps prejudice E.F.T.A. treatment of tariffs now. It is free from doubt so long as we do not give remission.
  Mr. Blaker: I have experience of international obligations and I cannot see what prejudice there would be if the Government had said frankly what the situation is.
  Mr. Lever: The hon. Member is not following me. Suppose we had remitted this right away with the query duty or deposit. This would have raised an important question for E.F.T.A. countries, whether they should say that it was not a charge or tariff before we have any discussions. By not remitting this, provisionally, we give ourselves the necessary breathing space of a few days to clear this up with the E.F.T.A. countries. The hon. Member will appreciate that once the duty is charged, or taken up by the E.F.T.A. countries, it is far more difficult to undo. When we take the matter up, is it for us then to release or to repay the deposit paid? It seems to be an entirely sensible rule.
  Mr. Blaker: I take the hon. Member's point. But is he aware of what the Minister of State said to the House on Second Reading, when this point was put to him? He said:
  "… discussions on this kind of problem have already started."—[OFFICIAL REPORT, 28th November. 1968; Vol. 774, c. 866.]
  The E.F.T.A. countries have been seized of the fact. Their embassies are full of skilful people who, no doubt, read the OFFICIAL REPORT every day, especially when it concerns a Second Reading debate on a matter like this. Therefore, they knew what the situation is. What possible prejudice could have arisen to a satisfactory result from the negotiations for which I and my hon. Friends wish, if the notice had, in effect, said what the Minister of State said to the House of Commons last week?
  A week has elapsed since the Minister of State said that discussions were already under way. My experience of international negotiations suggests that if we have a clear and simple case it should be straightforward enough for the Government to establish it. In the circumstances, I am confident that they will have a successful result, but they should have had it by now. I am disappointed that the Financial Secretary is not able to tell us what the result it. However, I am confident that he will be able to do so before long.
  But what will be the position when he gets his satisfactory result? Is he satisfied that his paragraph in Amendment No. 73 is adequate to cover the situation; or, depending on the result of the negotiations, will it need some further amendment?
  Mr. Harold Lever: We hope to satisfy the E.F.T.A. countries that this is not a duty within the meaning of the E.F.T.A. arrangements. The hon. Gentleman has been more fortunate than some of us in his international negotiations if he thinks that, in a few days, we can clear up a matter like this involving, as it does, several countries and aspects that have to be considered. These discussions were already in being when the Minister of State spoke, they are still in being, and we are trying to clear them up.
  I think that the hon. Gentleman has a good point on the wording of the notice. It might have been just as well to have reproduced, in effect, the Minister of State's speech in the notice. But, unhappily, those who drafted the notice either did not hear his speech, or, if they did, acted without sufficient subtlety.
  On the hon. Gentleman's other point, I think that the Committee would be well advised to leave it where it is. We are trying our best to help the exporters. Some people can believe that the Bill is bad. There are even some who could believe that this is a bad Government and others, although I hesitate to think so, who believe that there are bad Treasury Ministers. Whatever they are, they are all struggling, in the given circumstances, to try to assist the exporters to get the best of two worlds, namely, not to be afflicted with the import deposit and to still receive the E.F.T.A. treatment.
  If we attempted to jump the gun and give them remission in advance of the few days, I hope, which will be required to clear the matter up, we would prejudice the whole situation, because we would not be giving the E.F.T.A. countries proper time to reflect. On the whole, as hon. Members find, we always do better if we give people a moment or two to reflect. That is what we are doing by not remitting the credit until we have cleared the matter up.
  Mr. Ian Mikardo: Mr. Probert, you were good enough to indicate a few moments ago that we might discuss Amendment No. 84, standing in the name of the hon. Member for Leicester, South-West (Mr. Tom Boardman) and Amendment No. 126, standing in my name, together with Government Amendment No. 73.
  I hope that I may say, without the least scintilla of disrespect, that the fact that

  1727
  my Amendment has been grouped with the other two shows that even the Chair, with its great knowledge of these matters and its great experience in unravelling the meanings of even the most esoteric Amendment, has, nevertheless, totally misunderstood the point of my Amendment. If it had been understood, it could not conceivably have been grouped with the other two Amendments. It is on a totally different point, and I therefore feel that even at the cost of talking a little time at this late hour I must make the difference absolutely clear.
  1.30 a.m.
  The Government Amendment, and Amendment No. 84, seek to assist those exporters a part of whose exports consists of goods or materials or components which have been imported. My hon. Friend has won the praise of hon. Members on both sides of the Committee for the effort he is making to remove any obstacle which our exporters have in this highly competitive and difficult world in competition with exporters in other countries in selling exports in third markets.
  I am speaking about a different group of exporters, those whose power to compete with foreign competitors is affected by an import factor even though imports do not go into the goods they are exporting, and even though the imports may be of articles totally different from the goods they are exporting.
  I am talking of the growing practice of conditional sales, or conditional counter sales.
  Mr. Patrick Jenkin: Barter.
  Mr. Mikardo: It is not quite that, because that is 100 per cent. cover of one for the other. The practice to which I am referring is a growing one. Some people will find it reprehensible, but it does not matter whether they do or not. It is happening in this competitive world, and we have to keep up with our competitors.
  Under this arrangement a complete plant it may be a steel rolling mill, or a chemical or petro-chemical plant—is sold by a British company in competition with an Italian company and a West German one in a third country—the Communist market, the South American market, the Arab market, India, or wherever it is.
  1728
  The purchase price is satisfied as to, say, four-fifths in cash, or perhaps cash with an element of credit, and one-fifth in goods, which the exporter undertakes to find somebody to market. The plant may be sold for £3 million. Of that, £2½ million will be paid for in cash, and the remaining £500,000 in rice or other things.
  I repeat that this practice is growing very considerably in many markets of the world. Two N.A.T.O. countries do quite a lot of their purchasing from other Western countries along those lines, and in some fields we have been out-distanced by the West Germans and even more by the Italians, because they are more flexible about these countervailing purchase and trading arrangements.
  We shall be out-distanced still more, because this is a very competitive business in which one is dealing in margins sometimes of fractions of 1 per cent. If one has to take 20 per cent. of the purchase price in imports, and one then has to load on to that 6 or 7 per cent. for the cost of financing the deposit for 180 days, one has 1-plus per cent. over the whole thing, and very often that is enough to make the difference between the order coming to this country or going somewhere else.
  This practice is growing, and especially in certain fields where exports from this country are most valuable to our economy. It is growing most of all in the sales of complete plants which contain a substantial part of the payment element as being, not for what we would call the ironmongery, but for know-how, design, and engineering knowledge; and it is something of peculiar advantage to this country.
  So, since my hon. Friend the Financial Secretary said in respect of his own Amendment that he was leaning over backwards to help exporters not to be inhibited by any elements in the Bill in their contact with other exporters, I would say that British salesmen will be completely disadvantaged to the tune of something between 1 and 2 per cent. of price competitiveness by the application of this to the imports which they have to take, or have to get somebody else to take, as a countervailing purchase.
  I am sure that my hon. Friend has had an opportunity to consider this. I do

  1729
  not know the procedures, and I am not sure that he will have time to do something about this during later stages of the Bill, but, if there is time, I urge him seriously to consider this fact.
  We ate dealing with a group of exporters no less great and important than that group which the Chancellor has sought to cover. It would be absolutely wrong if one group of exporters was relieved of the consequences of the operation of the Bill and the other group was not relieved at all. I am quite sure that the Financial Secretary cannot but be seized of the importance of this, and I hope that he will give serious consideration to the possibility of accepting this Amendment, or, if it is not very well drafted, that he will say that he will look at something better drafted—something which I am sure he could get from a better draftsman than myself.
  Mr. Harold Lever: I can tell my hon. Friend, in answer to his query, that I am well seized of his point, but I must tell him that the nature of our proceedings s likely to be such that there will not be facilities later on—
  Mr. Evelyn King: Nonsense.
  Mr. Lever: The hon. Member says "Nonsense", but the fact is that I cannot offer the likelihood of an Amendment, and for this reason. What my hon. Friend has been talking about is not too clearly covered by some of our international obligations. The remission of deposit in these cases might be an infraction of some of our foreign obligations. The exporting of goods similar to those which have been imported is a matter which has already been dealt with by international arrangements, but, so far as I know, there are no such arrangements for what we might call bulk deals. On the contrary. I will look into it very carefully. He has missed one point: that we have the power to exempt by Order after the Bill is passed—
  Mr. Mikardo: But it is power to exempt only certain classifications of goods. That does not cover this point, because goodness knows what sort of goods come in on this basis. There is a very wide range.
  Mr. Lever: We can classify the goods as barter goods within a definition which I would not try to draft on my feet at this moment. I ask my hon. Friend not to press his Amendment. These deals are usually very large, so we can have proper time to examine them and to discuss them with him. If it is possible and lawful for us to assist in this way I should like to consider it favourably, but I cannot go beyond that. There are administrative and international complications which would have to be checked.
  Sir H. Legge-Bourke: I am sorry for the hon. Member for Poplar (Mr. Mikardo), who is seeking to get contracts honoured but is not getting all that he wants from the Financial Secretary.
  My point goes back to the Minister's original remarks. In reply to my hon. and learned Friend the Member for Southport (Mr. Percival), he made a very persuasive argument for saying that this should be a permissive instruction to the Customs rather than a mandatory one, and that if the phrase "the Commissioners shall" were substituted in every instance for the words "the Commissioners may", the whole Clause would have to be much more specific.
  But let us be under no illusion. However persuasive he may have been on this subject, this is delegated legislation writ very large, and in a very pernicious form. Some delegated legislation that we have had to tolerate in the past at least had the safeguard that it was the subject of Statutory Instruments which we could pray against. But this is delegated legislation without even that check. The hon. Member knows that not all Customs and Inland Revenue officers are as amenable as he is, whenever he can be.
  It is only natural that there will be some brushes in the implementation of this. Now and again tempers become frayed because industry is over-burdened with the amount of paper work required by the Government, not least with the Customs because of the delays which they cause in dispatching. Industry has no great love for Customs and Excise. Somewhat reluctantly, they accept the need for them, but we should not suppose that all will be sweet in implementing this.
  It is, therefore, most important that specific instructions should be given not

  1731
  only to the company importing the product but to the companies which are relying upon it to import for them and who themselves will be re-exporting the finished product in which is embodied the semi-finished original product. I foresee many disputes and confusions about whose obligation it was to tell Customs that some of a particular consignment was to be re-exported. It will often be extraordinarily difficult for the company which is merely importing the semi-finished material to be able to give a reliable figure to the Customs of exactly what the split will be in the total consignment between home consumption of the finished product and export. It is important that as soon as possible all the companies likely to be affected are given as full instructions as can be provided about how Customs should be informed of the re-exportable content of each consignment.
  I have a recollection of a former Member, now deceased, telling me that he had talked with a high officer of the Inland Revenue on his retirement and that the officer had boasted that in all the years he had occupied his most senior appointment he could claim with pride that the Inland Revenue had received more from the public than it was entitled to receive, because individuals had not exercised their right to claim. The happy phrase appears in the Amendment:
  "… as the Commissioners may think fit to impose for the protection of the Revenue … "
  I hope that the emphasis will be on the protection of the right of individual importers and exporters who are doing their best to help the country pay its way. Obviously, we want to protect the Revenue from gross abuse, but there are plenty of impositions on industry without the Government adding to them unnecessarily. The Commissioners appear to be completely free to introduce these conditions and restrictions. I hope that the financial Secretary will tell us that their main object will be to facilitate rather than to impede the efforts of industry to help the country pay its way.
  We are giving carte blanche and we shall have no control over the use of these powers. We are putting great faith in the Customs and Excise and I strongly suspect that they feel as the Inland Revenue felt when the Government intro-
  1732
  duced their first Finance Bill. The overloading of the Government machine is appalling, and the overloading of Customs which could result from the Bill could make life extremely difficult for them. The Financial Secretary apparently disagrees, but when one comes into contact with these officers one realises the burden which the Government have placed upon them. All Governments place burdens upon them, but this Government have done it more than most. The fact that this is unrestricted delegated legislation is a good reason why we should not have this beastly Bill at all.
  1.45 a.m.
  Mr. J. E. B. Hill: I intervene only because I have received urgent representations from a firm which recently moved to my constituency—last Friday—the Lotus Car Company, which is well known for its racing achievements and for the touring models which it makes and sells. So important did these representations seem that my hon. Friend the Member for Wanstead and Woodford (Mr. Patrick Jenkin) joined me in putting down the Amendment in our names to the Chancellor's Amendment No. 73 and I thank the Chair for adding it to the selected list today.
  In fact, most of the difficulties raised by my constituents have been answered, but answered at a very late hour and after an enormous amount of wholly unnecessary trouble, expense and anxiety has been incurred on my constituents' part and, I suppose, in the corridors of the Customs and Excise.
  Lotus makes a car called the "Europa". It is not available in this country. It was designed for the Common Market and the whole of the firm's production goes to export. It uses a Renault engine imported direct from France by the company. The company therefore applied for remission of duty and the first point of difficulty it raised was why it was told that it was only eligible for remission on that proportion of its total exports to countries other than E.F.T.A. countries. The Financial Secretary has made that point clear. I take the point and I hope that the company will be reassured. But the second point of difficulty was that it was told on Friday by the Customs and Excise at Norwich that, in any event, it was ineligible for any remission of the import deposits

  1733
  because the same person did not export as imported this French engine.
  The company structure is not uncommon. The group Lotus owns everything, but operates through some wholly-owned subsidiaries. This was made clear when it was made public in September. Lotus Cars Ltd. does the manufacturing and the importing of the engines required, whereas the wholly-owned Lotus Car Sales does sales and exports. But the two firms work together in an open plan office. There is not even a physical partition.
  The company was told on Monday in writing that it was ineligible. Yesterday morning it was telephoned to say that the local officer had received instructions from London changing all the rules. Presumably, he had received this notice. I make no complaint of the Norwich Customs officer. He has acted with great diligence and has been careful to communicate to the company as soon as he could every fresh instruction he has received.
  My complaint and question is: why need there have been this confusion and vacillation? Presumably, the idea of import deposits as a possible fiscal activity has been floating around for some time and, therefore, there might have been some detailed contingency planning. Why was it not until Friday that Amendment No. 173 appeared on the Notice Paper? Why was this provision not incorporated in the Bill originally?
  Secondly, why did we have to wait until yesterday and the publication of Notice No. 482 for the retraction of the untenable decision that the same legal entity must be both importer and exporter to qualify for remission? I ask for the hon. Gentleman's attention to this point, because I wonder whether he realises the astonishing waste of effort and time this apparent failure to do the homework is causing.
  Mr. Harold Lever: I realise that there is an astonishing waste of effort and time, but in a different connection. The hon. Gentleman has said that there was apparently some unawareness of the Amendment being tabled to liberalise the treatment for exporters. He has said that the Amendment is now being enforced by the Customs officers precisely as I assured the Committee that it would
  1734
  be enforced. I am not clear at this stage why he is so anxious. He has got what he wants for his constituents, who are being treated exactly as I said they would be. I explained this matter to the Committee and satisfied it on the point.
  If the hon. Gentleman wants me to go into the details at this hour, and not before the Amendment was tabled and considered by the Committee, as to why the original decision, not as liberal as this, was being enforced tentatively by the Customs, I cannot see what gain it will be to the Committee, because I tell him at once that the original position was not as liberal as the present. We have now liberalised it. Is the hon. Gentleman now telling me that he regrets that we liberalised it, or that we should be deterred from liberalising it because we get complaint of what was done before we liberalised it?
  Mr. Hill: I am simply saying that my constituents, and many other people, must be seriously wondering how it happens that the Government can allow one decision to be promulgated. There is this statement about the wholly-owned subsidiary being quite distinct from the other wholly-owned subsidiary, and that, therefore, there is no remission in law. There is the question of how that decision could ever be promulgated, and why it should be only after pressure and representation that a better ruling should be made. Surely the public are entitled to know—
  Mr. Lever: The hon. Gentleman knows the explanation.
  Mr. Hill: —why the Government seem to produce ill-considered legislation which they themselves have to amend and keep on amending. Surely, to ask for an explanation is not unreasonable.
  Mr. Percival: The Financial Secretary is usually so genial and courteous that I hesitate to join issue with him on a point which he has already told us he thinks is not very important, and on which my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) and my hon. Friend the Member for the Isle of Ely (Sir H. Legge-Bourke) seem to have found the hon. Gentleman persuasive. It is the question whether the word should be "may" or "shall". The hon. Gentleman described this as a pedantic point of law. I know of only two kinds of

  1735
  points of law—good ones and bad ones. If my point is a bad one, I apologise to the Committee for taking its time—
  Mr. Harold Lever: May I say to the hon. and learned Gentleman—because I withdraw any suggestion of pedantry—that, on mature reflection, I think that he is, rather unusually, wrong, and that in this context the word "may" means "shall" or "must". That is what I would advise, on the legal advice I myself have received, is the effect. So no effect would result from the hon. and learned Gentleman changing the word from "may" to "shall", because in the terms of this paragraph I am advised very firmly that "may" and "shall" would apply with equal force.
  Mr. Percival: Perhaps the Financial Secretary will acquit me of discourtesy if I say that I find myself unable to agree with him as readily as he would wish—
  Mr. Paget: If the hon. and learned Gentleman wants to be convinced, he had better go to the Library and read Julius v. Bishop of Oxford, which settled that point.
  Mr. Percival: I hear what the hon. and learned Gentleman says, but I must have my say, albeit it will take but a short time.
  If this is a bad point, I apologise to the Committee, but as I said in the early hours of yesterday, I do wish that if we mean something we could say it, and not use another word and say it does not mean that but something else. If we mean something, let us say it. I hope that what I have to say is not a bad point, but a good one.
  The Financial Secretary used certain phrases. I do not know whether they just slipped from his tongue—I do not think so; I think that they reflected his intention. One phrase that I wrote down was, "It is our intention to give a right … ". Another was: "Their right to come and ask for the deposit to be remitted … ". Let there be no doubt about it: if the word there used is "may", the importer has no right. It is no good the Financial Secretary wagging his head—and if the hon. and learned Gentleman the Member for Northampton (Mr. Paget) wants to intervene, I shall gladly give way. "May"
  1736
  is the word used from time immemorial to signify a discretion.
  2.0 a.m.
  Mr. Paget: This is a very well decided point. If the hon. and learned Gentleman cares to look it up, he will find that when a public official is given power by the word "may" for the benefit of an individual, he is bound to exercise it. "May" means "must" in this context. It has been well settled in a number of cases.
  Mr. Percival: I hear what the hon. and learned Gentleman says. I hope that he will have a word with his colleagues in the Board of Trade, because the word used in connection with the investment grant is "may" and the Board of Trade is contending at this moment that that confers a discretion and not a right.
  At all events, what is the point of all this? If "may" means "shall", why not say so? Why put "may" and then leave it to people to persuade the court that in this case it means not "may", but "shall"? It is too silly for words and if the House of Commons wants to bring itself into disrepute, let it go on doing that and let the hon. and learned Member for Northampton make the sort of point he has made. If it has already been decided that "may" in this context means "shall", for goodness sake let us start using "shall".
  The Financial Secretary said that the purpose was to allow the Customs a latitude, but he up-ended his own argument.
  Mr. Harold Lever: When I originally intervened, it was before I had had legal advice, which I took because I suddenly remembered the line of cases to which my hon. and learned Friend the Member for Northampton (Mr. Paget) referred. I was wrong in saying that "may" was to give discretion. The discretion is given in the conditions, "if they are satisfied". The "may", however, means no discretion, I am advised, so that "may" means "shall". I agree with the hon. and learned Gentleman that it would be preferable to stop using "may" when we mean "shall" and when it has the effect of "shall", but I should like to make it clear that I am not now saying that "may" gives discretion. It is the conditions which give discretion, not the word "may".
  Mr. Percival: I am obliged to the hon. Gentleman, because it seems that he and I are now entirely agreed. Perhaps we may therefore forget the intervention of the hon. and learned Member for Northampton, which was irrelevant at the level of agreement which we had reached. If "may" means "shall", let us put in "shall", which makes a much better fit. Furthermore, it does not detract from what the Government want to achieve.
  The hon. Gentleman has already taken my point that the latitude given to the Customs is in the two words, "if satisfied", which enables them to say—the importer does not have to establish a certain level of proof—that they are satisfied on any sort of evidence. The difference between the hon. Gentleman and me is that I think that if the word "shall" were inserted it would establish beyond doubt that if an importer went to the Customs with evidence which was clear beyond doubt, so that there could be no question of the Customs not being satisfied, the word is "shall" and there is no doubt—
  Mr. Harold Lever Mr. Harold Lever indicated dissent.
  Mr. Percival: The hon. Gentleman wags his head, but I hope that he will consider this. He and I are agreed with that when the Government use the word "may", they intend to mean "shall" and are relying on the fact that there are cases which say that "may" sometimes means "shall". Can he not go a little further and say that for once he intends to use the word he means, so that people will not have to say that he meant not "may", but "shall"? That would detract nothing from the purpose of the provision and would enable the House of Commons for once to say, "We said what we meant".
  [Mr. HARRY GOURLAY in the Chair]
  Mr. Tom Boardman: I will not develop the argument of my hon. and learned Friend the Member for Southport (Mr. Percival), except to say that there is a good deal of uncertainty about what is meant by the Bill. The Financial Secretary, who has tried to be most helpful, has found that some of the answers have had to be sought from outside the Treasury Bench. I think that he is far too
  1738
  complacent about the effect of the remission. Of course I welcome any liberalisation scheme of remission to help exports, but the hon. Gentleman has said that it will work in much the same way as draw-back. That is not so.
  The majority of goods which will attract the import deposit will not go direct to manufacturer-exporters; they will go through various hands and processes, and some of them will eventually find their way into the export channel. Only a small minority will go from the importer to an export manufacturer. Thus, the chain will have to trace through. Also there will have to be a division of goods going to E.F.T.A. and those going to other countries. The administrative task will be monstrous.
  An easy way to overcome the difficulty would have been to hand if we had assignability of the import deposit receipts, but that cannot apply now. That is precisely what happens in the case of draw-back of ordinary duty. The importer pays the duty. When the goods are subsequently made up and manufactured, passing through many hands, and re-exported, the exporter gets the draw-back. The same could have happened here.
  The only point of substance which distinguishes my Amendment No. 84 from the Government Amendment is that it refers also to goods intended to be used
  "in the process of producing goods for export".
  This covers plant and equipment used for exporting and would make them equally eligible for remission.
  I have an example here. Plant coming in from Germany to a small company is to cost £80,000, and 85 per cent. of the output of that plant will be exported. That has been the export proportion from similar plant. If I have understood aright, there will be no deposit remission on that.
  Mr. Harold Lever: The short answer is that the hon. Gentleman has not understood aright.
  Mr. Boardman: I am glad to have that assurance.
  Mr. Lever: I am sorry. The hon. Gentleman is referring to plant coming in to produce goods. There is no remission on that plant. Neither duty remission, if it is dutiable, nor deposit

  1739
  remission, and for the same obvious reason. The practice was the same under Conservative Governments in respect of duty, and I did not hear protests from the hon. Gentleman or his hon. Friends then.
  Mr. Boardman: I am talking about plant which is coming in at a cost of £80,000 and on which an import deposit of £40,000 will be payable.
  Mr. Lever: Why is the hon. Gentleman so keen to talk exclusively of the import deposit? Why not talk at the same time and for convenience of any relevant tariff duty which has long been established as payable and which also would not be remitted? Has it anything to do with the fact that this Government have brought in the import deposit and Governments of both complexions have for a long time operated tariffs on precisely the same principle?
  Mr. Boardman: I did not talk about duty, because it would have been strictly out of order. If I were allowed to stray on to that ground, I could give instances of duty remission on plant coming in from overseas having been cut back under the present Government.
  The point I am making on the import deposits is that plant coming in and which will be wholly used for the production of goods for export will still attract the import deposit. In the case I instanced for illustration, the plant cannot be produced here; it will attract a deposit of £40,000; interest will be borne by the manufacturer; and the export price will have to be increased; and there is no remission at all.
  That is the reason for my Amendment, which, I hope, will have support. The distinction between my Amendment and the Government Amendment for liberalisation of remission lies in the vital phrase
  "or in the process of producing goods for export".
  It is quite wrong that the deposit should be imposed in a way which will operate harshly against exporters.
  Mr. Robert Cooke: I do not want, at this late hour, to revive the recrimination we had a little earlier about the difficulties some of us have had with constituency cases involving goods brought
  1740
  in for processing and re-export, though those difficulties have meant anxious days for many people and a great deal of hard work for hon. Members—late into the night on many occasions.
  While one must feel happier at the liberalising Amendment which the Government have moved, I must join with my hon. Friend the Member for the Isle of Ely (Sir H. Legge-Bourke) in saying that it all depends on how the Customs behave; and my hon. Friend added that we in this Committee are not able to control them, once we pass a Bill. In spite of what the Minister has said, it will very much depend on how the rules are worked. One can only hope they will be worked in as liberal a way as he has suggested. I hope that, if we have any difficulty, the Government will be active in telling Customs to mend their ways—should there be any difficulty.
  The liberalising Amendment will deal very largely with the difficulties of the substantial importers of wine, of whom I spoke on a previous occasion, who blend and bottle for re-export, largely to dollar countries. There is, however, wine taken out of bond and processed in one way or another by the smaller firms. I gather that there are some processes which are more complicated than those used by the larger firms. They will have to pay the duty and there will be difficulty over the deposit. The Government have had very adequate representations from the big people in this trade. It is the smaller ones of whom I now speak, and I hope that the Government will bear their difficulties in mind.
  The other matter I wanted to raise, and was positively invited by the Financial Secretary to raise on this Amendment, is one of which I spoke very briefly at a late hour last night, and that is the difficulty of my constituent, who is a small close company with very limited capital and limited opportunities of obtaining credit and facilities for finding the extra money needed for deposits under this Bill, but who has obtained the exclusive franchise in the United States, Canada and South Africa for a foreign piece of machinery produced in a land far from the United Kingdom but similarly produced by one of our European rivals.

  1741
  The point my constituent makes is that he will not be able to find out of his resources the import deposit which he will have to pay on that part of his business which relates solely to the United Kingdom. So much of his money will be locked up in financing his home operations that he will not be able to find the money to finance this marvellous export trade. He says in his letter to me that he will have to cancel his plans for the United States, Canada and South Africa because he cannot finance his business in view of the deposit which will he locked up.
  2.15 a.m.
  I can see no way out for him unless the liberalising Amendment can be worked in such a way that the import deposit on the goods imported and sold in the home market can be remitted. Paragraph 3(1, b) states:
  "that the remission of import deposit would conduce to the exportation of other goods …".
  It would be fine if it stopped there, but difficulty is produced by the words and commas which follow, which my legal friends could no doubt explain to me.
  If the re-exports greatly exceed the imports for home consumption is there discretion to remit the deposit on those goods for sale at home? The Financial Secretary does not look helpful, but perhaps he can give me a glimmer of hope. There may be a loophole in the words:
  "… sufficiently similar to the imported articles …"
  contained in paragraph 3(4).
  I am sure that the Financial Secretary will do all he can to help. He has had this case in his office for some days. Despite the rules of order, surely exports are more important than bent rules of order, and I hope the hon. Gentleman will be able to say something helpful.
  Dr. M. P. Winstanley: I have one question which I hope the Financial Secretary will be able to answer, even at this late hour. It is not dissimilar to the point put by the hon. Member for the Isle of Ely (Sir H. Legge-Bourke). I fully appreciate that the intention of the Amendment is to liberalise the situation for exporters, and I welcome this, as will those small but highly specialised and
  1742
  efficient exporters in my constituency who depend upon imports.
  The Financial Secretary has explained that to make the provision flexible it has had to be drafted leaving considerable discretion. He has explained why the word "may" was used, and we now understand that "may" means something entirely different. The importer has been given two bites at the cherry. The deposit will be remitted immediately if he can demonstrate that the goods are to be re-exported in part or in whole, however indirectly. If he cannot satisfy the Commissioners on that point, he pays, and can later apply for repayment. If the importer is to be given two bites of the cherry so must the Commissioners, but they have not.
  Paragraph 3(1) states:
  "… if, where import deposit has been remitted under paragraph (1)(a) above, the goods are disposed of or used in a way inconsistent with the intention to re-export, the import deposit remitted or repaid shall become payable, or repayable, to the Commissioners."
  What kind of procedure has the Financial Secretary in mind? Customs and Excise, who are familiar with enforcement, have been given the job, but here there is a novel situation that an importer will be qualified for remission even if he shows that the goods he has imported are to pass through a number of hands before finally being exported. The disqualifying action, therefore, may be nothing to do with the person to whom the deposit has been remitted. Action may have occurred which has rendered the whole procedure invalid. A middleman, or a party to whom the goods have passed, may have used the goods for a different purpose, and I would like to know what the Financial Secretary has in mind on enforcement procedure. To what extent are the Customs and Excise expected to follow up goods? What kind of inspection will be conducted?
  I understand that the hon. Gentleman has made flexible arrangements, which are very satisfactory, and it is understandable that he has to have some kind of check. But the point concerning the hon. Member for Isle of Ely is how the officials concerned will behave, and that is a matter of some importance. Clearly, the Financial Secretary will have to give some thought to this, and I hope that he will give the Committee the benefit

  1743
  of his opinion on how this arrangement will work.
  Mr. John Page: The Financial Secretary said that one of my hon. Friends was dealing in the science of hypothetical fears. I have been engaged in an industry which has had to cope with import duty drawback for about 20 years. We have been told that the Customs and Excise have a lot of experience on which they can draw. I agree, but the immense new weight of imported goods with which they will have to deal will strain the organisation greatly, although the Financial Secretary remarked that it was only trivial.
  There is a booklet on import duty drawbacks which sets out what a person wishing ultimately to claim for import duty drawback has to do, and the complicated the detailed procedures which must be followed. Though the Government do not intend that these identical procedures shall be followed, it is difficult to see how the Customs and Excise are to safeguard the Inland Revenue unless they try to institute similar ones.
  The procedures are headed:
  "Requirements applying to manufacturers and to exporters and others who stock manufactured goods which include imported materials."
  They have to segregate materials, segregate products, keep special records, transfer the goods to other premises under certain forms, have notification and retention of evidence of payment, and a number of other details.
  I think that we must regard the Financial Secretary's statement as a holding one until the Customs and Excise have settled down to a modus vivendi for dealing with a new situation running at a rate of £750 million a year as from now. He stated that the Customs would allow remission on the basis of reasonable expectation. Would he qualify what he believes that such a basis would comprise? Until instructions are given further to those which he has confirmed tonight, remittance could be given in cases where general percentages of categories of end users can be presented immediately as evidence to the Customs officer at the time the deposit is being paid and claimed to be remitted.
  It is a most serious and difficult matter and, unless we can know exactly what
  1744
  a Customs officer in King's Lynn, Inverness, Glasgow, or Cornwall can consider to be a basis of reasonable expectation, the whole system must break down.
  I ask the Financial Secretary to give an exact and detailed statement of what he considers to be the basis of reasonable expectation which can be used as a definite rule for the time being. I also ask that if he makes that statement tonight, before altering it he will come back to the House and give details of a new statement of what the basis of reasonable expectation is. I assure him that instructions to the Customs and Excise will have to be changed within the next four to six weeks if the system is not to break down and remissions are to be allowed.
  Mr. Evelyn King: It is inevitable in a debate such as this that the subject changes with each speech. I was immensely disappointed with the reply that the Financial Secretary gave to my hon. Friend the Member for Leicester, South-West (Mr. Tom Boardman) on general grounds and on a particular case.
  In my constituency there is a firm, Weyrad (Electronics) Ltd., which employs 200 people. It manufactures components for navigational and radar goods. The firm sent me a telegram emphasising the strains that this Measure will put on it. It uses automatic machines which cannot easily be made in this country and an order for their importation has already been given for delivery by air. Suddenly, the firm has been told that on these machines there is to be a 50 per cent. deposit on the value of the import. For a firm of this size, and having regard to the value of the machines it seeks to use, this is a considerable impost.
  When we consider that on the amount which, presumably, the firm will have to pay to the Customs authorities it will have to pay 7 or 8 per cent. interest, it is seen that this is a considerable hardship. I should have thought this a direct disincentive to the export trade which should be the desire of everyone to encourage.
  The Deputy Chairman (Mr. Harry Gourlay): Will the hon. Member please relate his remarks to the Amendment before the Committee? He is going rather wide.
  Mr. King: I was surprised that the Financial Secretary said that he would see that so far as possible there would be exemption for goods intended for "use" in the export trade. Those were the words with which he opened his speech and I like those words. They certainly ought to include machinery such as I have described which is vital to the export trade. I cannot see how they can be valid if they do not refer to such machines. Nor do I think there would be practical difficulties in making this concession.
  2.30 a.m.
  Mr. Drayson: Twice in 24 hours I have raised the question of textile manufacturers importing yarn with the object of exporting finished goods. I welcome the additions which the Financial Secretary is proposing to the Second Schedule, but I would like him to take the opportunity to say that the type of case I have put forward, which we know is repeated many times in Yorkshire and Lancashire, will be covered by his proposals, particularly cases where a manufacturer is manufacturing goods, sometimes on commission, and selling them through an export house in Manchester or Bradford, or wherever it may be. I have copies of 12 letters from different export houses all operating for one firm of manufacturers which I have mentioned.
  Sir D. Glover: The Financial Secretary covered most of my doubts about this problem. What has been said by hon. Members on this side, with little support from the other side, which has been distinctly silent, is that once one gets beyond the import of first instance, despite the protestations of the Financial Secretary it is becoming like the pregnant girl in the brothel being asked to state categorically who is the father of her child.
  This is the problem which the Government will be up against with Customs and Excise. Once one gets beyond the point of first instance, and goods and merchandise get into other ownership, whatever the Government's protestations it will be impossible for the Government and for Customs and Excise to keep a complete link for rebate of deposit.
  Despite what the Financial Secretary said—and he is the most sensible member of the Government party—
  Mr. Mikardo: Withdraw.
  Sir D. Glover: I do not withdrawn. I think that he is the most sensible member of the party opposite. I do not withdraw. I have great admiration—
  Mr. Mikardo: I asked the hon. Member to withdraw only because he was being offensive to everybody else on this side.
  Sir D. Glover: I said it with great purpose and malice aforethought. I was being complimentary to the hon. Gentleman and purposely offensive to every other hon. Member on that side.
  The Financial Secretary, who understands commerce and industry, has done his best to reassure hon. Members on this side about the working of this. But once one gets beyond the point of first instance, despite his protestations, there is no way one can overcome our genuine anxieties. This is bound to be rough justice and, in the long run, will be disadvantageous to our export performance and to the country's efficiency.
  I raise this with a definite purpose. I understand that in a few moments we will be on Report, when the Government should be bringing forward amending Clauses to make the Bill much more logical and workable than it will be under the present situation.
  Mr. Patrick Jenkin: This has been one of the most important debates in Committee. I extend a cautious welcome, and it can be no more, to the Amendment to which the Financial Secretary has spoken. I welcome it because of its intention. The Financial Secretary has convinced the Committee that the Government's intention is that the import deposit scheme should in no way act as a fetter or brake on exports. In particular, I welcome his assurance on the point raised in the Amendment put down in the name of my hon. Friend the Member for Norfolk, South (Mr. J. E. B. Hill) and myself, that the original instruction that the importer and the exporter had to be the same company has been withdrawn and that this will be operated with the maximum flexibility.
  I understand and take the point about the doubt on E.F.T.A. treatment. We can only hope that this will be cleared up as rapidly as possible, because it is of

  1747
  major concern to companies doing a substantial amount of business with the E.F.T.A. countries.
  On flexibility of operation, while I recognise the intention, I think that we are bound to have reservations about how it will work in practice. As the Financial Secretary described it to the Committee, it is the Government's intention that this should cover almost very conceivable eventuality. This would seem to be a very far reaching extension of the reliefs from burdens on imports. It does not cover the case made by my hon. Friend the Member for Leicester, South-West (Mr. Tom Boardman) and my hon. Friend the Member for Dorset, South (Mr. Evelyn King). but it covers pretty well everything else. I accept the Government's bona fide intentions, but I share the fears which have been expressed about the terrifying complexity to which this will give rise.
  I fear that the system, with the best will in the world, will run into grave risk of becoming a bit of a paper chase with a large number of civil servants—much larger than the 250 mentioned on Second Reading as being the likely additional number—struggling to administer the scheme. I do not believe that, even yet, Treasury Ministers have taken on board the fact that this will represent a vast extension of the existing procedures which operate for import duty under Section 7 of the 1958 Act and Section 1 of the 1966 Act.
  A very large proportion of the goods to be incorporated into the extension are at present imported either permanently duty-free or they come in under temporary exemptions. No applications for remission, for draw back or for any of the other things have had to be made. It simply does not touch the problem. The import deposit scheme covers the whole sphere, with the limited exceptions mentioned in Schedule 1 which we have been discussing for most of yesterday and today.
  This will represent an enormous extension of the administration necessary to do it. From my inquiries, I believe that the Board of Trade recognises this. It has had this problem, and it is now seriously concerned with the weight of it. I only hope that, accepting the intentions
  1748
  of the Treasury Ministers that this should be as widely flexible as possible, they will recognise what this will mean in terms of administration both for the firms who will have to operate it and for the Customs and Excise. I anticipate that there will be tens of thousands of applications spreading not just from one company to another, but right down a chain, because of the substantial weight that the import deposit scheme is adding to the burden.
  I do not regard it as impossible that the delays into which this procedure is likely to run importers will induce a good many to recognise that the game is not worth the candle, they will pay the deposit to get hold of the goods and push them through the factories to get their production under way. This would utterly defeat the intention of the well-meaning and possibly valuable Amendment which we are discussing.
  The Financial Secretary has expressed great confidence in the skill, experience, and expertise of the officers of Customs and Excise to work this scheme in the manner that he has described it to the Committee. I sincerely and profoundly hope that the hon. Gentleman is justified, but I confess that I share the apprehensions which have been expressed by some of my hon. Friends, notably by my hon. Friend the Member for the Isle of Ely (Sir H. Legge-Bourke), that this is going to run into serious administrative difficulties. I draw the conclusion that if legislation of this sort is made tolerable only by the addition of a mass of complicated administrative paper work, involving millions of man hours, it is bad legislation, and ought not to have been brought before the Committee at all.
  Mr. Harold Lever: Legislation of this type is frequently recommended by leading personalities in the Opposition. Hon. Gentlemen opposite can groan. The fact is that it is the truth.
  This sort of scheme necessarily involves some minimal attention to administrative detail. Hon. Gentlemen opposite are singularly ambivalent. On the one hand, they press for innumerable concessions throughout the Committee stage, which, unhappily, I did not feel able to recommend to the Committee, and thereby simplified the administration, without receiving the appreciation one might have

  1749
  thought would be the case having regard to the remarks made when I make a concession and put down an Amendment to the greatest value to our exporters, in all forms.
  I am told that this will involve a paper chase. It becomes complicated only because I have ensured that the drafting of the provision shall be such as not to exclude a single possibility of assisting British exporters. It would have been simple to narrow the remission to cover only firms doing their own exports, but I have widened it to cover exports even if they occur six firms hence. The hon. Gentleman cannot have it both ways. This is the clearest and most liberal scheme possible for relieving exporters of the burden of the import deposit.
  I referred to goods which when imported can be shown to be intended for use in the export trade. That means those goods to be used in the export trade, and not to be used in making goods for the export trade. If anyone finds anything ambiguous about that, I shall clear it up straight away.
  There is not the faintest prospect of giving relief for deposit, or tariff, or any other duty on machines simply because they are being used for the export trade. This would be nonsense, because one does not know what is to happen to a machine, whether it will be used for three months, six months, or for 10 years, in the manufacture of particular articles. Unless it was intended facetiously, I must reject this argument. I take it that it was put forward in all earnestness, but I must reject the suggestion that we should give relief for machines on the ground of what the output was going to be. With goods exported within a measurable time there is some control. If I were to yield to what the hon. Gentleman said we would find that by comparison, the administrative complications of the relief that I am giving is child's play. If the hon. Gentleman's suggestion were accepted, over a long period it would be necessary to police the machines, check on the goods they were making this year and next year, winter and summer—
  Mr. Tom Boardman: It was not a facetious remark. I gave a factual illustration. The hon. Gentleman is talking of winter and summer. I remind him that this is to last for one year. I
  1750
  think that it is far less difficult administratively to police a specific machine of the type I illustrated than to police the mechanics of the remaining goods.
  Mr. Lever: I was being generous in suggesting that the hon. Gentleman's suggestion was intended to be facetious. It seems that the hon. Gentleman was seriously suggesting that we should provide relief for every machine and its production for a year. The hon. Gentleman can take it that we have no intention of making any such remission, nor would it be practicably desirable or within the bounds of reason to do so.
  With regard to the wording, I cannot do more than assure the Committee in open Parliament what our purposes are. I was bound to read it in the clearest terms so that exporters would know what it was intended their rights should be, and that would be a protection for them.
  I wish to say this in the clearest possible terms. I have the utmost confidence in the Customs in the matter of the administration of this provision. I know that they will show a practicality which we shall not be able to question in the use of this provision. I have been advised by the Customs, and not by a remote body, and it is manifestly unjust for hon. Members to make aspersions such as have been made because not a single hon. Member has offered to document facts when implying what has been implied against the Customs.
  2.45 a.m.
  Sir K. Joseph: Nobody has reflected upon the skill or competence of the Customs. What we have consistently criticised from this side of the Committee is the task which is being imposed upon them.
  Mr. Lever: if the right hon. Gentleman reads HANSARD tomorrow he will see that there was some claim that the Customs would operate this part of the Bill in a spirit very different from that which the Government have sought. We were told such things as that the Customs would need to be under constant surveillance, but that is certainly not necessary. The instructions which will be issued will be perfectly clear, and I have the utmost confidence that the Customs will operate them with sincerity and with fairness.

  1751
  I would like to finish with one small point. The hon. and learned Member for Southport (Mr. Percival) said that we should specify "shall" if we mean that and, without prolonging our discussion at this hour of the morning upon the relativity of "shall" and "may", I will tell him that I agree. Alas, however, it is too late for us to be able to give expression to his point on this occasion, but I can tell him that I will consult the Parliamentary draftsmen and, if they give a good reason, I shall see that "shall" is used in future. There is no other way of treating the various combinations of circumstances to fulfil the purpose we have intended here. We have the will, and I ask the Committee now to come to a decision.
  Sir D. Glover: Could we at least have an assurance for my hon. and learned Friend the Member for Southport (Mr. Percival) that, on Report, an Amendment may be moved to achieve precisely what is asked for?
  Mr. Lever: I have already told the Committee that I cannot offer to do that. For one thing, we must consult with those learned in drafting, but, as I have also already said, I cannot undertake to do that in time for this Bill.
  Mr. Robert Cooke: Could the Financial Secretary answer the point which I made, about importers who are very actively engaged in the export trade?
  Mr. Lever: What the hon. Member wanted me to promise was that the Government would relieve importers engaged in the export trade.
  Mr. Cooke: Those who are exporters in a very big sense.
  Mr. Lever: Yes, in a very big sense, but the fact that a firm is actively in the export trade does not, of itself, qualify that firm for relief.
  Amendment agreed to.
  Mr. Blaker: I beg to move, Amendment No. 111, in page 13, line 39, at end insert:
  Goods imported for use in defence systems
  7.—(1) No import deposit shall be payable—

  (a) in respect of goods imported by or on behalf of any Minister of the Crown, for use in, or for the development of, defence systems or for use by the armed forces of the Crown; or

  1752

  (b) in respect of any goods imported by or on behalf of any person engaged. pursuant to a contract with the Crown in that behalf, in the development of. or in the production of goods for, defence systems, for use in such development or production.

  (2) In relation to goods of the description in sub-paragraph (1) above, section 6 of the Import Duties Act 1958 (power to exempt particular importations of certain goods) shall apply as respects the repayment or remission of import deposit as it applies as respects the repayment or remission of import duty, provided that it shall apply as if paragraph (a) of subsection (1) thereof were omitted therefrom.
  This is an Amendment of some substance. Although our Armed Forces are being rapidly reduced in size, they do involve the purchase by the Government of substantial quantities of defence equipment from overseas, often from private sources. The Bill has two purposes—to reduce imports and to exercise a limited pressure on liquidity. Whether or not the deposit is payable cannot affect the quantities bought, including those bought overseas, since the Government will presumably act in accordance with their view of the national needs. Therefore, the adverse pressure on the resources of small firms will be particularly strong.
  If smaller firms cannot raise the deposit, it will mean not that the imports will not come in but that they will come in through another, bigger, firm which can raise the deposit. There will be greater difficulty, in that firms will not be able to raise the deposits from at least one possible source, the ultimate consumer, because that consumer is the Government. This is a reason to relieve importing firms of the burden of the deposit.
  I doubt whether the Amendment would have a substantial effect on the liquidity of the economy, but perhaps the Minister of State can give some figures. Paragraph (2) refers to Section 6 of the Import Duties Act, 1958, and I will be glad to explain that reference if it is not clear to any hon. Member.
  Mr. R. Gresham Cooke: I support my hon. Friend the Member for Blackpool, South (Mr. Blaker). An important principle is involved, because the Government have, in the past, taken power to exempt machinery, and so on, bought for

  1753
  essential Government purposes, and anything used by the Armed Forces should be exempt from these duties.
  I heard last night of a relevant example. I met a friend of mine, an importer of wines and spirits, who has a very large contract for the import of rum for the Navy. He has a shipment of £24,000 worth of rum on the seas at the moment from Trinidad, for which he will now have to find an import duty of no less than £12,000. His is a small firm and he will have difficulty in finding the money, but if and when he does he will no doubt have to raise the price of rum to the Navy. It seems stupid that, when the rum is consumed on board ship, it is free of Excise duty but the importer has to pay the import duty. I am sure that the Navy would be glad if the Government dropped the import duty in cases like this.
  Mr. Taverne: There are three parts to this Amendment. I am not sure that I understand its effect, and I know that I do not understand the third part. Its first aim is to exempt goods imported by the Crown. The Bill does not bind the Crown, so that part is not needed.
  It appears to be the intention of the second part that those who are under some contract with the Crown and import goods which will be used for defence development should be exempt. I do not see how that could possibly cover the importers of rum mentioned by the hon. Member for Twickenham (Mr. Gresham Cooke), because these are not goods for use by the Armed Services of the Crown. They are not being imported by the Crown. Moreover, paragraph 7(1)(b) refers only to goods which are imported for use in defence systems.
  Mr. Gresham Cooke: Paragraph 7(1)(a) refers to any goods
  "imported by or on behalf of any Minister of the Crown … for use by the armed forces of the Crown."
  Mr. Taverne: I am not sure that that case would be covered. It is vague. It is not clear in that case whether the goods were imported on behalf of a Minister of the Crown. If the person were purely an agent, that might be so, but if he were selling to the Crown it is not clear that paragraph 7(1,a) would apply.
  Mr. BlakerMay I give an example of what I conceive would be covered? I have in mind the importation of components for defence equipment, microwave systems and sub-assemblies for military equipment which are imported through importers in the private sector, as many other supplies for the use of the Armed Forces are imported.
  Mr. Taverne: I understand that part, but it would not cover the example given by the hon. Member for Twickenham.
  The second category with which the Amendment deals includes goods for use in defence systems imported by those who are
  "engaged, pursuant to a contract with the Crown in that behalf".
  There are three objections to exempting this category. First, it would be contrary to the Government's general policy; though the Government are not bound, those who are under contract to the Government would not have to pay the deposit. If it were more widely applied it would erode the scheme. More important is the creation of anomalies which would arise between those who were importing these goods under contract to the Crown and those who were not.
  Thirdly, because of a certain element of vagueness and the difficulty of identifying the goods in question at the time they leave the Customs, it would impose a major administrative difficulty of the kind which has been suggested in the debates. It is extremely important that the Customs should know exactly for what the goods were intended at the time they were imported. It would be difficult to identify the goods at the time they left the Customs for the latter to be absolutely clear about the purpose for which they were imported and clear that this sub-paragraph applied.
  I am totally at a loss about subparagraph (2). I do not understand why it is thought to be necessary. Under Section 6 of the Import Duties Act, the Treasury have power to give directions which would exempt from duty in respect of a limited list of goods. It is suggested that this limited list should be extended to apply to goods which are referred to in sub-paragraph (1), but since that subparagraph is in any event intended to exempt those goods from the payment of the deposit I do not see what further

  1755
  effect is achieved by sub-paragraph (2). As I cannot understand the purpose of that sub-paragraph, as the first part, paragraph 7(1,a), is unnecessary, and as paragraph 7(1,b) is undesirable, I invite the Committee not to accept the Amendment.
  3.0 a.m.
  Mr. Blaker: The purpose of subparagraph (2) is to provide machinery to give effect to the purpose of subparagraph (1) by adopting the machinery set out in the Import Duties Act, 1958, to make it available for the goods described. If the hon. and learned Gentleman says that sub-paragraph (2) is unnecessary, then I am satisfied.
  But I am not convinced by what the hon. and learned Gentleman said about acceptance of the intention of the Amendment, disregarding his anxieties about the machinery suggested. He said the exemptions suggested in sub-paragraph (2) would erode the scheme. I cannot see how this could be so in relation to at least the level of imports of defence equipment, because surely the level of these imports is decided by the Government in relation to its conception of national needs. I do not see how the Committee can be persuaded by the right hon. and learned Gentleman's argument, and I regret that he is unable to accept the Amendment.
  Amendment negatived.
  Schedule, as amended, agreed to.
  Motion made, and Question proposed, That the Bill, as amended, be reported to the House.—[Dr. Miller.]
  Hon. Members: Object.
  The Deputy Chairman (Mr. Harry Gourlay): The Question is not debatable.
  Mr. Emery: On a point of order. I want to make clear a position I raised with the Chair earlier, concerning Amendments on Report.
  The Deputy Chairman: The hon. Gentleman's point of order should be raised in the House and not in Committee.
  Question put and agreed to.
  Bill reported with 5 Amendments.
  Motion made, and Question proposed, That the Bill, as amended, be now considered.—[Dr. Miller.]
  Mr. Emery: On a point of order, Mr. Speaker. I refer you to Standing Order No. 48, where it is stated that
  "On a clause being offered in a committee on a bill, or on consideration of the report of a bill, the chairman or Mr. Speaker shall desire the Member offering the same to bring it up, whereupon it shall be read a first time without any question being put, but no clause"—
  and this is the point I am raising—.
  "shall be offered on consideration of report without notice."
  May I ask how we could have had notice of any new Clause for consideration on Report? Is it not the case that the Government have forced us into a position where it is impossible for a new Clause to be in order now? By this procedure, have not the Government denied the right of back benchers to amend the Bill on Report through the normal practice of introducing new Clauses?
  Sir D. Glover: On a point of order—
  Mr. Speaker: Order. I will deal next with the hon. Gentleman's point of order when he raises it. We are now discussing whether the Bill, as amended, be now considered. What the hon. Gentleman the Member for Honiton (Mr. Emery) has argued just now is, in my opinion, quite a reasonable argument against the Question before the House, which is, That the Bill, as amended, be now considered. If we move from the Committee stage to the Report stage as swiftly as we have moved now it handicaps hon. Members in the way he has described. This is an argument against considering the Bill now.
  Sir D. Glover: I support my hon. Friend the Member for Honiton (Mr. Emery). I want to make it quite clear that anything I may say is not in the slightest degree a reflection on the Chair or on the procedure of the House. We all know that we are governed very much by our Standing Orders and procedure and that, in theory, the Government are quite in order in moving to the Report stage immediately after the Committee stage. But I should like to protest at the present Government's proposals that tonight, immediately after the Committee stage, we should take the Report stage.
  Mr. Speaker, you can run a democracy on theoretical lines without the spirit of that democracy working at all.

  1757
  and in my submission to you the Government of the day should not, as they are doing tonight, seek to take the Report stage of a very controversial Bill immediately after the Committee stage—and a Committee stage in which many points have been argued virulently and cogently.
  If I may say so, Mr. Speaker, although you were not here, of course, it was a Committee stage during which many of the Government replies indicated a great deal of sympathy for the points of view we put forward. But they have had no opportunity at all of mature consideration of the arguments advanced in Committee. I am sure that every unbiased hon. Member would say that the hon. and learned Gentleman the Minister of State was not in any way convinced of the argument he put forward on the last Amendment we dealt with—No. 111—and that, if given the opportunity to consult his advisers and maturely consider the matter, he would be only too prepared on Report to go perhaps not all the way, but halfway, to the Opposition point of view and the development of the Bill.
  I want to make this submission, not only to you, Mr. Speaker, but to Parliament in general—
  Mr. Speaker: Order. What is happening now is perfectly in order, but the hon. Gentleman must not make his submission to Mr. Speaker. He must make his submission to the opposite benches.
  Sir D. Glover: I apologise, Mr. Speaker. I was, in fact, trying to be kind. I withdraw what I said, because I realise that I must direct my remarks to the Government.
  The Government are working what I would call the machinery of democracy, but they are not really working democracy at all. If hon. Gentlemen opposite want to ride roughshod because of their majority, they can do so, but if they do they are weakening the whole fabric of Parliament—[HON. MEMBERS: "Oh.") It is no use hon. Members groaning. I only wish that a great many of the people who sent them here could hear these groans.
  The whole basis of Parliament is debate. The whole basis of that debate is that when we have a Second Reading we accept the general principle of the
  1758
  Bill. Then we have the Committee stage, and the whole basis of that stage is that we argue the details of the Bill. It is understood that in our procedure the Bill is then taken away so that mature consideration can be given to the arguments advanced in Committee. If they see fit, the Government, on the Bill's return to the House on Report, may accept some submissions of the Opposition and sometimes some of those of their own supporters. This is done not just like that, but after mature consideration and after taking advice from officials in the Departments concerned. On Report, we work in a narrow compass, dealing with the faults of the Bill, trying to produce not a Bill which is contrary to the designs of that introduced on Second Reading, but more efficient, a Bill which will work better in the interests of the people as a whole.
  I am sorry to see that the Home Secretary, who has sat through many hours of debate, has suddenly left now that we have reached the crunch of the evening. I should have liked to tell him something about this. I am not very hostile to the Bill. I made a speech in July and another in the debate last week on the Ways and Means Resolution which showed that I was not all that hostile to the Bill.
  However, it is generally accepted that the Bill was produced in a rush, that it is full of anomalies and that it will give rise to many problems. We have now spent two days debating it in Committee and during those debates, during which hon. Members have shown much forbearance and not a great deal of hostility, Ministers have said time after time that they appreciate the point of an argument, or that they see the difficulty, but that at that stage they could not accept the Amendment. The Financial Secretary has been the soul of conciliation and so on.
  But the point is that Ministers have said that immediately after an argument has been adduced and before they have had time for mature consideration and discussion with their advisers. It is often after studying the collective argument that Ministers will bring forward Amendments on Report to meet the anxieties of the Opposition or at least partially to do so. This is how a Bill

  1759
  goes through its stages. Hon. Members have a duty—
  Mr. Roy Roebuck: Hear, hear.
  Sir D. Glover: It is all very well for the hon. Member to say "Hear, hear", but it is the duty of hon. Members to ensure that when a Bill becomes law, it is the best which can be produced, and that is our duty whether we are hostile to the Bill or in favour of it. In common sense, that cannot be done unless arguments in support of proposed alterations are properly considered. Ministers and their advisers must have the opportunity to study what has been said and to decide whether there is more in an argument for an Amendment than appeared to be the case at first sight.
  That cannot happen when the Government, by using their majority, ride roughshod over the will of Parliament and, by the drop of a guillotine, proceed immediately from the Committee stage to the Report stage. It is not even certain that this controversial Bill, which will create a lot of upset in the commercial activities of the nation, will achieve the object which the Government have in mind. I am not hostile to that object, but the Government have a great task in convincing the House that what they are doing is right. It is a Measure which breaks new ground and initiates new processes. It is almost inconceivable that the Government have got it 100 per cent. right the first time.
  Hon. Members opposite who have not spoken in our debates on the Bill have just as much responsibility for the working of the Parliamentary machine and for seeing that legislation is well drafted so that it will not bring injustice to a firm or group of employees in their constituencies. This is an entirely new system of deposits for the purpose of controlling imports. In our two days of debate, there has been no difficulty in producing arguments against a great many of the Bill's provisions. There has been no accusation of filibustering. Every point raised was argued cogently.
  Mr. Speaker: The hon. Gentleman is going a shade wide of the Motion. We are discussing whether the Bill, as amended, should be now considered.
  Sir D. Glover: I appreciate that, Mr. Speaker, but it is a little difficult for me to show why the Bill should not now be taken on Report unless I give you some of the background. You, Sir, of all Members now sitting in the Chamber, are the one who was not able to listen to our previous debates. I was trying to inform you of what went on.
  Mr. Speaker: I am always grateful for education, but we must keep to the Motion.
  Sir D. Glover: I understand how you appreciate the way in which I was trying to help, Sir, and I appreciate the kindly way in which you have accepted my instruction in this difficult matter.
  If we proceed to Report, any hon. Member who wishes to propose an Amendment will have to do it by manuscript Amendment. I must not say what your ruling would be—I am treading on even more tender ground now, Mr. Speaker—but the probability is that the Chair would refuse such manuscript Amendments. Therefore, it will be a mockery of a Report stage. The whole basis of Report is mature consideration of what went on in Committee. It is our duty to proceed in that way, with the object of improving the legislation which the House passes. I regret that a good many of us are lax in that duty, but that is what we should do.
  The Motion would make a mockery of the work of Parliament because no hon. Member has had opportunity to read all the debate in Committee, let alone give it mature consideration. The Government now are just using their majority to steamroller legislation through the House. I cannot carry this argument any further—[HON. MEMBERS: "Hear, hear."]—unless I am encouraged by the party opposite, and if it encourages me I am prepared to develop further arguments. What I say is that the procedure the Government are adopting is the negation of the whole basis of the way Parliamentary democracy ought to be worked.
  The Government can tonight get Report of the Bill because of their majority, but in the long run they will lose yet more prestige both in the country and among their own back benchers, because

  1761
  they are no longer working the Parliamentary machine as it was designed by our forefathers to work in the interests of the people.
  Sir H. Legge-Bourke: In rising to support what my hon. Friend the Member for Ormskirk (Sir D. Glover) has just said I should like to raise two other matters which he did not touch upon. It is worth recalling the fact that the Bill is incapable of amendment in another place. It starts by saying
  "We … the Commons of the United Kingdom in Parliament assembled … "
  because we are raising necessary supply, or allegedly necessary supply: therefore, the Bill cannot be amended in another place.
  I have on several occasions during the last two days heard the Financial Secretary say of a matter being discussed that he will look at it again. Just before the conclusion of the Committee stage we had a statement from the Financial Secretary—I hope he is listening—in reply to my hon. and learned Friend the Member for Southport (Mr. Percival) that he felt the word "shall" should be in the Government's Amendment.
  Mr. Harold Lever: Will the hon. Gentleman give way?
  Sir H. Legge-Bourke: May I finish?
  Mr. Lever: Surely.
  Sir H. Legge-Bourke: The hon. Gentleman said he would have to take the advice of the Parliamentary draftsmen before committing himself. I do not know whether he noticed, but one of them looked as though he was watching a fast rally at Wimbledon; he was shaking his head—
  Mr. Speaker: The hon. Member is one of my Chairmen and he knows what it is to keep in order. He must keep to the Motion.
  Sir H. Legge-Bourke: The point I am making is that the Financial Secretary gave an undertaking to look at certain things again. We—
  Mr. Lever Mr. Lever rose—
  Sir H. Legge-Bourke: I will give way in a minute.
  1762
  In Committee, hon. Members were entitled to think that there might be opportunity before the Bill finally came back to the House for something to be done.
  Mr. Lever Mr. Lever rose—
  Sir H. Legge-Bourke: I am not accusing the Financial Secretary—
  Mr. Lever: The hon. Member is most reluctant to give way, though he mentions my name and said that I gave undertakings in Committee to consider things, undertakings which would have lead him to believe that he would have opportunity on Report to hear further from me, or that there might be opportunities open to him. This is absolutely untrue.
  Sir H. Legge-Bourke: This is not what I have said or have accused the hon. Gentleman of. He is getting a little Jackin-the-Boxey.
  Mr. Lever: The hon. Gentleman must not make those accusations.
  Sir H. Legge-Bourke: The hon. Gentleman was very courteous during Committee. I hope that he will continue to be so. I only say that people who listened to things he said on certain of these matters were entitled to assume that, not necessarily on Report, but at some stage before we finally parted with the Bill, before Royal Assent, something might be changed.
  I am not saying at what stage, but we must not overlook the fact that the Bill cannot be amended in another place, so it is all the more reprehensible that we should be asked to take Report in the early morning immediately after the conclusion of Committee.
  The Financial Secretary, in replying to my hon. Friend the Member for Leicester, South-West (Mr. Tom Boardman), said that negotiations with E.F.T.A. were still being conducted. What is the hurry to get the Bill through quickly when a Ways and Means Resolution has been passed which will last for 25 days? In anticipation of the Bill receiving the Royal Assent the Government have power to authorise the Customs to collect the money. Every minute that passes strengthens the case for first completing the E.F.T.A. negotiations.

  1763
  The Parliamentary draftsmen should have an opportunity to consider the matters raised in Committee before Report. It is an outrage that we should be taking Report at 3.30 a.m., having completed the Committee stage at 3 o'clock. It is fortunate for the Financial Secretary that the hon. Member for Tynemouth (Dame Irene Ward) is not here.
  Mr. Jopling: I understand that we are debating whether or not the House should move to consider the Report stage of the Bill. The arguments already put to the House by my hon. Friends the Members for Honiton (Mr. Emery) and Ormskirk (Sir D. Glover) were compelling, and I am surprised that the Leader of the House has not seen fit to be present. This is a matter for the Leader of the House, and I suggest to the Government Whips that one of them should go and fetch him, so that he can hear the feeling of the House on the proposal by the Government to move at this hour the Report stage of the Bill.
  I do not want to use arguments about the hour of the night, and whether or not we are at our best. I want to use an argument which has affected me seriously during the last two or three hours, and which makes the manoeuvre of going straight to Report stage one of extreme difficulty for me. In Committee, I was waiting for the Motion, on Schedule 1, That this Schedule be the First Schedule to the Bill, as there were matters which I was anxious to raise at that stage. I wanted to ask why it was that certain items were not included in Schedule 1.
  Mr. Speaker: I am following the hon. Gentleman with great attention. If he wanted to raise a matter on the Question, That this Schedule be the First Schedule to the Bill, he should have done it in Committee. He could not do it on Report.
  Mr. Jopling: I am sorry, Mr. Speaker. I shall explain why it was impossible, and why at that stage I tried to do what you have suggested. This is the crux of my argument, if you, Mr. Speaker, would allow me to come to it.
  I wanted to ask the Government why certain items were included in Schedule 1. I do not want to press this too much,
  1764
  but I particularly wanted to ask why the Government had included dairy produce in the Schedule. At the moment, the whole of the agricultural industry is in the greatest difficulty—
  Mr. Speaker: Order. With respect, I hope that I am a most sympathetic Speaker, but the hon. Gentleman should have argued that in Committee when we were discussing the Question, That this Schedule be the First Schedule to the Bill. He could never discuss it on Report.
  3.30 a.m.
  Mr. Jopling: Mr. Speaker, I will come immediately to why that was not possible.
  When the moment came for the Question, That this Schedule be the First Schedule to the Bill, to be considered, the Chairman took it formally. I rose and, on a point of order, asked him why it was that I had not been called. This has put me in serious difficulty, because the Ruling of the Chairman was that this matter could not be raised, when I had been present throughout the Committee stage, intending to raise it.
  Mr. Speaker: Order. If it could not be raised then, certainly it cannot be raised on Report.
  Mr. Jopling: I am coming to my difficulty. As I was not able to raise it at that stage, and as my intention was to ask the Government why items were included, so that I could consider tabling Amendments for consideration on Report, my whole strategy of trying to alter the Bill was completely scuppered.
  In view of the Government's manoeuvre of moving straight on to Report at this hour, without giving us a reasonable break in which to consider what has happened and what was the Chairman's Ruling at that point in the Committee. I have had to change my plans in trying to get the Bill altered. I think that mine is a reasonable complaint. I hope, Mr. Speaker, that you understand my difficulty.
  It is for that reason that I object strongly to the Government's manoeuvre. Their motives are most dubious. I shall not have had proper time to consider my position. I do not know how I could have foreseen it. No one could have said that the Question, That this

  1765
  Schedule be the First Schedule to the Bill, would be decided formally. No one could have told me that I should not have an opportunity to ask why certain items had been included in the Schedule.
  In view of that, it is only reasonable to ask the Government for a little time to consider the situation and prepare Amendments that I feel I must table for discussion on Report. This is a most unparliamentary practice. I listened with interest to what my hon. Friend the Member for Ormskirk (Sir D. Glover) said. He pointed out that the Government are behaving in a way which runs completely counter to the spirit of free speech and the tradition of hon. Members examining Bills properly. It seems to be a growing practice of this Government.
  Mr. Speaker, I object strongly to the Government not giving us an opportunity to consider what has happened in Committee before moving on to Report. I can do no more than record my objection.
  Mr. T. L. Iremonger: I have listened very carefully for the last three or four hours to the debate in Committee and eagerly anticipated the Report stage. It seems inconceivable that this should be taken right away. I understand the virtue of the Standing Order to which my hon. Friend the Member for Honiton (Mr. Emery) drew attention. I should have thought that the whole House would be aware that it is convenient, in certain circumstances, to be able to move quickly from Committee to Report, but the object of that is the convenience of the House. If ever there were a classic example of a Bill to which it was essential that time should be given for consideration, this is that Bill.
  As my hon. Friend the Member for the Isle of Ely (Sir H. Legge-Bourke) said, it is not so important that the Bill should be got through before dawn today. It is important that when it is got through we should get it roughly right. The Bill breaks new ground administratively. It is a Bill in which the principle is fairly simple, but the detail is all. The detail has been carefully considered by both sides of tae Committee. Listening to the debate, I must say in fairness to the Minister of State and the Financial Secretary that I have never before known the Government Front Bench to be so receptive, open-minded, constructive and
  1766
  frankly open to persuasion that they might have second thoughts.
  Was this all a charade, a totally insincere and cynical exercise of leading hon. Members up the garden path and letting the children play with the toys of democracy and then saying, we shall wash it all out and go to bed? The Committee was trying to get the details right. This is the only opportunity the House will have to settle details about which our constituents will come on us hard. A great deal of money is at stake. Many individual enterprises and forms will be broken if it turns out that the law is such that their legitimate grievances cannot be met.
  I should not have thought it the object of the Government to achieve a bad Act of Parliament. Whatever their object may be, it seems extremely sinister that increasingly over the years of this Parliament the Government have been obsessed with the idea under the leadership of the former Leader of the House—
  Mr. Speaker: Order. We are discussing whether we shall consider the Bill now.
  Mr. Iremonger: I was saying that the suggestion that we should not consider the Bill would be sinister enough in any circumstances, but in the circumstances of the tendency in this Parliament it seems more sinister than ever because more and more this House has been required to accede to the convenience of the Government as an instrument of the Executive rather than as a proper deliberative Chamber in which the people should be able to put their objections through the voices of their representatives.
  I am aghast to see no serious attention given to these arguments by hon. Members opposite. The figure of the Patronage Secretary is lurking in the background. He is apparently wondering whether to come in and wash out consideration of the Bill without paying any attention to the serious second thoughts which the occupants of the Government Front Bench have indicated. Therefore the Bill is to come before the House in an unalterable form with no opportunity of changing it.
  Mr. Taverne: The hon. Member has been extremely fair in the way in which he has made his point, but the Financial

  1767
  Secretary and I gave no undertaking to consider these matters on Report. We listened to a number of very telling points and said that we would consider them in the light of the power to add to the list of exemptions. There is power in the Bill to add to the exemptions by Order.
  Mr. Iremonger: The hon. and learned Gentleman, although most assiduous and courteous throughout, was not on the Front Bench during our debates on all the Amendments. That may well have been what he was indicating, but his hon. Friends were considering matters far wider than that. The House cannot be satisfied that this was an entirely sincere exercise in procedure. I hope that the House will not accept this rapid move into making final provision on matters which we are entitled to have properly considered and brought before the House in a way which allows Amendments to be tabled.
  Sir K. Joseph: I rise, knowing that my hon. Friends have strong views, to ask your guidance, Mr. Speaker. One of the principal factors we shall have in our minds when considering whether to go on to Report is the question of Amendments. No hon. Member knows which Amendments will be selected. We cannot tell, because of the collapsing together of the normal stages of business, what Amendments have been put down and nor have we your guidance on which Amendments have been selected.
  This is exacerbated when it comes to new Clauses, because Standing Order No. 48 precludes consideration of new Clauses on Report without the giving of notice. We ask you what is meant by notice of a new Clause? Is the notice given by the handing in by one of my hon. Friends of a manuscript new Clause? Is that notice given by the handing in by one of my hon. Friends of a manuscript new Clause, or more than one, a sufficient notice for the purposes of Standing Order No. 48, permitting you to call it if Report follows Committee without interval? Is it possible for you to give guidance on that?
  Mr. Speaker: I thought I had already made that clear. The hon. Gentleman the Member for Honiton (Mr. Emery) was perfectly right earlier. Notice means formal notice. The new Clause must
  1768
  appear on the Notice Paper. This is one of the casualties of the procedure we are now discussing.
  Mr. Emery Mr. Emery rose—
  Mr. Speaker: The hon. Member for Honiton has exhausted his right to speak. He raised a matter as a point of order, but it was a point of debate. But I will be generous.
  3.45 a.m.
  Mr. Emery: I was trying to elicit a point from you, Mr. Speaker, and from your reply I wish to deal with why we should not proceed now to further consideration of the Bill.
  It seems to me one of the normal procedures of the House of Commons that on a Bill which affects a vast number of people, industries and those who work in them, there is normally a desire for the Government to try to ensure that these people who are affected are allowed time so that they, as well as hon. Members of Parliament, can consider what further action should be taken after Committee stage has been completed on the Floor of the House. If the Government fail here, industry has had no chance, and nor has anyone else. to consider the Bill, as reported from Committee to the House. What has happened from a little after 3 a.m. to 3.45 a.m., or when we get off this Motion, is stretching imagination well past breaking point.
  My major objection to the proceedings is that people outside the House have had no opportunity to consider many of the statements made by Government spokesmen in answer to the debate. We reflect the views that are expressed to us. This is a normal procedure. But the Opposition, by the approach of the Government, are being denied that right. We are being denied the opportunity of any consultation between the Committee and Report stages by the way that the Government are proceeding with this legislation.
  I say to the Chief Secretary, who is the senior Minister on the Government Front Bench at the moment, that this is not only a matter for the Government but for the House of Commons. I think that the Leader of the House should be in his place, because this is a matter for the House of Commons, not just for the Government. The rights of the Opposition should be defended by the Leader

  1769
  of the House. We cannot expect the Government to defend them. The Leader of the House should be here to listen to our objections to proceeding to Report Stage.
  I would appeal to the Leader of the House to use his influence to stop the Government overriding the rights of the Opposition, because that is what is happening. Indeed, if certain members of the Government, whom I remember so well in the period 1959 to 1964, were sitting on these benches now we would have had a near revolution. There would have been absolute uproar. We would not have this mild and fairly reasonable objection. We would have had the right hon. Member for Belper (Mr. George Brown), and heaven knows where we would have been.
  I turn now to my second reason for objecting to proceeding to the Report stage. This refers to the point of order that I tried to raise with you, Mr. Speaker, and on which you were so helpful. We are in the position of having to proceed to a most serious aspect, namely, seeking to amend a money Bill by manuscript Amendments. Even in a small Committee upstairs, where things can be dealt with easily, most chairmen object strongly to proceeding on manuscript Amendments. But the only way that any Amendment, if it is in order, can be taken on Report, if we get to it, is on a manuscript basis. No hon. Member on either side will have in his hand the Amendment being considered by the House. How we will proceed, unless the mover reads it out, I do not know. That would he an unworkman and unbusiness like way of proceeding.
  But, in addition, it appears that any new Clause, which is a normal method of amending on Report, probably could not be called. I have prepared a new Clause to try to meet some of the objections raised by the Government to certain Amendments considered in Committee. However, because of Standing Orders, I now find that Mr. Speaker can do nothing to ensure that that new Clause is called. We are completely hamstrung. It is impossible for us to proceed in that way and the Government realise this. If the party opposite was in opposition we should probably hear much stronger objection; than we are making.
  1770
  As a matter of reasonable House of Commons procedure, the Government have power, under the Ways and Means Resolution, to do whatever they want to do for another 10 days. I appeal to the Government to defend what they pretend to stand for, and postpone the Report stage until Monday of next week, or even to Friday, if that is preferable, to allow time for the Bill to be reprinted, and for the necessary consultations to take place. Nothing that is scheduled to happen on Monday is more important than this Bill. If Monday is a Supply day, I am sure that I could appeal to my Front Bench to give up that day to enable us to proceed with the Bill.
  The Financial Secretary was most guarded when he said that he would reconsider any points that we put forward. Twice, earlier on, I said that we would be able to return to certain matters on Report when the Bill had been reprinted. I purposely used that phrase because I had heard a rumour that the Government would adopt these tactics. Was there what I believe would have been an honourable approach on the part of the appropriate Minister? Did any Minister make it plain that there was no intention of having the Bill reprinted before we moved on to Report?
  As my hon. Friend the Member for Ormskirk (Sir D. Glover) said, this is the most adverse manner of proceeding in any form of Parliamentary operation. The Government cannot regard this as an example of good democratic government. I am surprised that my suggesting about sending for the Leader of the House has not been acted upon. Perhaps the Treasury Ministers do not want the right hon. Gentleman to come to the Chamber. The right hon. Gentleman may advise them of the basis of our argument and decide to give way to our plea.
  It is not as thought the Government's timetable is so full that it is necessary for them to force the Bill through tonight. This is the kind of maladministration that we saw at the end of last year. I did not like it then, but at least one could understand it. The Government claimed that there was no time to do things in any other way, but that is not the position now. That being so, it is abominable that the Government intend to push the Bill through tonight. That appears to be their intention, judging

  1771
  from the stony faces of the Ministers on the Front Bench.
  Mr. Charles Fletcher-Cooke: I am not sure that the Government appreciate the gravity of what it has done. It is true that there have been Bills of great importance and great urgency in which the Report stage has been taken immediately after Committee. That, I can understand, because Governments must do that when there is great urgency, but tonight we have not been told what is the urgency in this case. But, even if there is urgency, what the Government have not done as a Government always do in my experience, when they intend to adopt this procedure, is to move a Motion to modify Standing Order 48. If the Government wish to move directly from Committee to Report, then it seeks suspension of Standing Order 48 so that notice of Amendments and new Clauses may be given during the Committee stage.
  That is familiar and traditional practice and it is the one which the Government should have put into force on this occasion. What has happened? Obviously, the Government have had no thought for the rights of the House nor for the rights of the Opposition. No, the Government are so single-minded in driving this Bill through the House that they have not taken even this elementary precaution. Since they have not done so, it seems to me that they should pay the penalty for their omission. We should not debate the Motion which we are debating at this moment.
  Mr. Michael Shaw: I rise with a good deal of sadness. I feel that the Bill is very important indeed, but that the manner in which it has gone through the House has been hurried, to say the least. Obviously, there is not all the time in the world on this occasion, but, clearly, our rules give us time; and, presumably, when those rules were designed, they were designed in such a way that business which would be affected by those rules, and by the Ways and Means vote, could go through at a proper pace so that proper and due consideration could be given to all the various aspects of the legislation, whatever it might be.
  I refuse to believe that, extraordinary though this measure may be, such a
  1772
  measure was not envisaged when the Ways and Means procedure was laid down. I believe that there must be time for us to pursue this legislation throughout its various stages at a pace not only conforming with the dignity of the House, but at the same time, conforming with a procedure which permits of a sensible discussion of all the many problems raised.
  Many of us on this side of the House have been in great difficulty ever since the Bill first appeared. It was published late, and we suspect that we know the reason for that. Then, we went into the second reading and, at great speed rushed into the Committee stage. It was with the greatest difficulty that we managed to get into touch with different organisations throughout the country; organisations which had themselves to meet in order to discuss the implications of the Bill.
  A perusal of the Notice Paper will show that it was as late as last Monday that many Amendments were put down for the first time and even as late as yesterday we were getting many views pouring in from all over the country about the years held on the likely effects of this legislation in practice. In view of all the haste and the horrid manner in which we have had to draft Amendments, it is essential to have a pause before the Report stage.
  I am not sure whether the strongest case for this was not put by hon. Members opposite. All the comments have so far been sedentary, but they have been to the effect that hon. Members want to go home to bed. Of course they do, whether because they have other matters to attend to tomorrow or because they wish to return refreshed, after a night's sleep, to further consideration of the Bill.
  I agree with my hon. Friend the Member for Honiton (Mr. Emery) that it cannot be said that the Government's timetable this Session is too overloaded for us to be allowed another day. Many points have still to be decided, E.F.T.A. for one. How much better if, in the light of discussions here and outside, we could give further consideration on Report to what is still an inherently bad Bill, but one which, in the national interest, we should try to improve.

  1773
  We have not been wasting time. Many hon. Members have appeared for the first time at this late hour. I might call them the feet that vote. There has not been much evidence of their voices—
  4.0 a.m.
  Mr. Speaker: Order. The hon. Member must not narrate what happened in Committee. We are debating whether the Bill, as amended, be now considered. He must keep to that.
  Mr. Shaw: I will try to keep in order, Mr. Speaker. That shows that we are all affected by the lateness of the hour. The effect is not so apparent opposite, since one is not so tired when one can sit in the same position all the time.
  We should now have a pause, as a result of which there is a good chance that the Bill will be improved. We have already discussed 150 Amendments, but no Opposition Amendment has been accepted. I suspect that that is not because of any lack of merit, but because the Government are determined to get the Bill through in its present form without wasting another minute. The timetable is not that tight. We should not consider the Bill Immediately.
  Mr. Hugh Fraser: I am trying to move an Amendment on Report because it is only in the last few hours that I received representations from my constituents on points arising in the Bill. I propose to remain here until I am able to move that Amendment.
  This is typical of the situation in which not merely the Opposition but also the Government find themselves. The Bill affects trade amounting to about £3,000 million. It affects a great many importers who are constituents of hon. Members in all parts of the House. It is therefore important for the Government, who are not enjoying the maximum popularity, to be certain that the law being put before the people is as good as it possibly can be within the framework of policy. It is clear that some of the offers made by the Financial Secretary in reply to debates to which I listened cannot be put effectively into the Bill unless there is a pause for the Amendments to be considered. From reading the Bill and from the speeches, it has become clear that there are phrases in the Bill which lack clarity. Those drafting the Bill have had to work over-
  1774
  time and in some instances there has not been time for sufficient consultation with bodies outside Parliament. There is, therefore, strong argument for a pause.
  I know that it is important for the Government to get the Bill as soon as may be, but it cannot become law tonight; it still has to go to another place. Almost certainly it cannot become an Act until some time next week. The Government's position is protected by emergency powers and they should be able to delay the Bill for 48 hours, or even three or four days, in order to have a properly conducted Report stage, when the interests of so many people and such large sums are at the mercy of the Government—who have not had sufficient time to get the Bill into the best possible shape.
  Mr. Harold Lever: Nobody is more sensitive than I am to the charge that the Opposition have not had their proper rights and I am sure that hon. Members opposite are entirely sincere in supposing that they have some ground for complaint. I make that assumption, but I ask them to reflect on the realities of the situation, which I will outline briefly.
  First, the procedure which we propose to adopt, of taking Report and Third Reading immediately after Committee, was not challenged at all on the Leader of the House's business statement. If these constitutional rights, so hardly won by the forefathers at any rate of the hon. Member for Ormskirk (Sir D. Glover), are to be taken away, it is difficult to understand why no questions were asked by the hon. Member or any other hon. Member when it would have been open for them to ask them. I assure the hon. Gentleman and all other hon. Members that if, on the business statement last Thursday, there had been some complaint of this kind I, on behalf of the Treasury, would have done my best to accommodate them.
  What is the nature of the Opposition's grievance? They say they have been deprived of a vital constitutional right to move new Clauses on Report. We are led to suppose that, in their bosom, they have a number of new Clauses necessary to protect the citizenry from being ridden roughshod by the Government. Surely, it they have these new Clauses of vital importance to the citizens, they might have

  1775
  caused them to emerge in Committee, when they would have been in order in tabling them. If these new Clauses would be in order on Report, they would have been in order in Committee. Has this necessary protection of the citizens suddenly occurred to hon. Members? They neither objected to this procedure last Thursday nor brought forward these new Clauses in Committee, where we could all have joined together to protect the citizens.
  Sir D. Glover Sir D. Glover rose—
  Mr. Lever: I will not give way until I have finished.
  There is another point which gives me anxiety about the complaint of the Opposition that they have not had a Report stage when they could have brought forward these new Clauses and that we have deprived them of it. The truth is otherwise. There has been only one Amendment to the Bill, a Government Amendment, in Committee. The Government declared their intention of not accepting any other Amendment down on the Notice Paper. Unless I am misled, had the Government not tabled their Amendment, the Bill would have gone through Committee unamended.
  Mr. Patrick Jenkin Mr. Patrick Jenkin rose—
  Mr. Lever: I will not give way until I have finished.
  The Government Amendment was a concession to protect exporters from having a burden imposed on them. There would have been no debate on Report otherwise, because the Bill would have been unamended in Committee. Unless hon. Members want to gamble with the protection of the citizens by holding their new Clauses close to their bosom in the hope of a Report stage, the whole incident is remarkable.
  I want hon. Members to reflect on the picture they are projecting, even to a sympathetic audience like myself. First, if they really thought that a vital right was in danger, it was their duty to raise the matter on the business statement last Thursday. Secondly, if these new Clauses were vital for the protection of the citizens, they should have been tabled in Committee and discussed then.
  1776
  Thirdly, they have no cause to complain that the Government are depriving them of a Report stage because it was only the Government's action in tabling an Amendment and seeing that it was carried that gave them the right to have a Report stage at all.
  In these circumstances, it seems to me that hon. Members would do well to reflect on what I have said and ask themselves whether it would not be wiser from their point of view as well as ours now to proceed with the Bill, because the Bill contains, for the first time, the detailed instructions to the Customs and Excise which are so vital for the protection of our exporters, and I would like to see it on the Statute Book at the earliest possible moment.
  Several Hon. Members Several Hon. Members rose—
  4.15 a.m.
  Mr. Speaker: Order. The hon. Gentleman the Member for Ormskirk (Sir D. Glover) has already addressed the House. A number of his hon. Friends would like to speak. I would hope that he would let them.
  Sir D. Glover: On a point of order, Mr. Speaker. The Financial Secretary said just a moment ago that when he had finished his statement he would allow me to ask him a question.
  Mr. Speaker: I understand that. I was just appealing to the hon. Gentleman.
  Sir D. Glover: I want to clarify two of the points made by the Financial Secretary. First, he said that the matter was not raised on the business statement, and he is quite right—
  Mr. Speaker: Order. The hon. Gentleman cannot make a speech at this stage. It must be a brief intervention.
  Sir D. Glover: Then may I say that I am sure the hon. Gentleman's statement will be quite unsatisfactory to this side, because the whole basis of the Report stage is that the Government, in accepting an Amendment, by that very process accept the fact that the Bill is liable to further Amendment. To say that the Opposition should produce all our Clauses is not right, because the whole basis of our procedure is that these things have then to be considered.
  Mr. J. E. B. Hill: I found the Financial Secretary's explanation charming and courteous as usual, but somewhat unconvincing The claim that because on last Thursday's business statement no objection was taken to the House taking the remaining stages of the Bill immediately after the Committee stage, binds the Opposition, in the light of the events that have happened, is wholly unacceptable to me and, I suspect to my hon. Friends. Since last Thursday all of us have had a series of upsets. When I referred to them in Committee, the hon. Gentleman thought it rather churlish of me to mention all he troubles that have cropped up, but there has been a pattern of order, counter-order and disorder in the constituencies through the uncertainty of the central Government.
  How do we know that if there is an interval between Committee and Report our constituents will not raise all sorts of new troubles in tomorrow morning's post, or that we shall not hear of the issue of some new instructions to the Customs and Excise until tomorrow morning? We cannot know, and that seems to be a reason why there should be an interval between the stages.
  I should like to see the Leader of the House with us. I am sure that he would have had the precedents of where important Money Bills have had whole stages taken—not in time of war—in manuscript form when no Amendments are possible after the Bill leaves this House. Not only do we not have a printed amended Bill before us, but we cannot even look at the whole record of this Committee stage. I am sure that this procedure is wholly without Parliamentary precedent in peacetime. We must particularly bear in mind that the objectives of the Bill are secured effectively in the Ways and Means Resolution for provisional collection. I should like to see the Leader of the House here. I should like him to come armed with precedents—[HON. MEMBERS: "Where is he?"]—and no doubt armed for our better edification, perhaps for our reproof, with chapter and verse of occasions when this kind of conduct was previously pursued by the previous Conservative Government. I should like to know what those occasions were.
  1778
  What troubles me most is the point raised by my hon. Friend the Member for Westmorland (Mr. Jopling), because there are some of us, particularly those currently nominated by the House to study the import saving rôle of agriculture, who take the view that it is surprising that in a Bill wholly designed to discourage excessive imports, the Government should have included a Schedule which is wide ranging and which covers not just the indispensable basic foods, but somewhat sophisticated processed foods which we are satisfied could be produced in this country.
  Mr. Speaker: The hon. Member may not discuss now what he might have discussed in Committee, or what we may discuss on Report. We are discussing whether we have a Report stage.
  Mr. Hill: May I take it a little further, because it is a point of view which some of us hold and which I should like to have expressed on the record.
  Mr. Speaker: Order. The hon. Gentleman has got it on the record and he may not take it any further.
  Mr. Kenneth Lomas: In view of the importance which the hon. Gentleman obviously attaches to this part of the Bill, are we to assume that he and his hon. Friends intend to divide the House on this issue? May we have some guidance about that from the Opposition Front Bench?
  Mr. Hill: I cannot tell the hon. Gentleman what my right hon. Friends will do at the next opportunity for dividing the House. They may well be minded to do so.
  What worries me is that in Committee there was one opportunity when our views could have been expressed within the rules of order. Some Amendments could not be selected, because technically they were out of order in that they would increase or diminish the fiscal burden. For example, there was an Amendment in my name which would have given the Government power to subtract from the Schedule, whereas they now have power only to add to it. My Amendment could not be called and the only point at which one could legitimately question the content of the Schedule was on the Motion to agree to the Schedule.
  Mr. Speaker: Order. That took place in Committee, not on Report.
  Mr. Hill: Quite so. I should like to have time to study the record, because, although I was not present, I understand that when that point was reached the Chairman of the Committee ruled that that Motion should be taken formally.
  Mr. Speaker: Order. The hon. Member may not discuss in the House a Ruling which he did not like and which was given in Committee.
  Mr. Hill: May I put this to you, Mr. Speaker? Am I right in my understanding that the only ground on which the Chair may rule that a Clause "stand part", or a Schedule be agreed to, must be taken formally is when it has already been adequately debated?
  Mr. Speaker: Order. The hon. Gentleman has not understood what I have said to him. He may not ask Mr. Speaker to comment on the Ruling given by a Chairman in Committee. I had already said that before the hon. Gentleman asked me to do so.
  Mr. Hill: May I put it hypothetically? If the only occasion when certain matters can be raised and be in order is at the point when the Question on the Clause or Schedule is put, how can it be ruled that the Clause or Schedule has been adequately discussed?
  Mr. Speaker: Order. The hon. Gentleman is doing for the third time what I have told him he may not do. He must desist.
  Mr. Hill: I shall leave it there. [HON. MEMBERS: "Hear, hear".] Do hon. Members opposite understand the point? The difficulty here—I accept that it is a difficulty—in expressing a point of view which we should like to have expressed reinforces our argument that there should be an interval between the Committee and Report stages so that we may take advice about whether there can be opportunities for that view to be registered, either on Report, if possible, or perhaps at a subsequent stage in the passage of the Bill.
  It is a negation of our democratic processes that a genuine and widely held view among certain groups of us who have been studying this problem cannot be effectively recorded. That is a further
  1780
  reason for allowing time for the record to be printed and for further consultations and advice.
  Mr. Brian O'Malley (Lord Commissioner of the Treasury)Mr. Brian O'Malley (Lord Commissioner of the Treasury) rose in his place and claimed to move, That the Question be now put; but Mr. SPEAKER withheld his assent and declined then to put that Question.
  4.30 a.m.
  Mr. Blaker: I cannot let pass the suggestion by the Financial Secretary that, in some way which I do not understand, because the Opposition did not take exception last Thursday, at the time of the business statement, to the proposal that the Government should deal with the business in this streamlined way, we are now somehow estopped from complaining at the Motion to railroad the Bill through.
  As I remember, the Bill was published only on last Tuesday evening. On Thursday, immediately after the business statement, we had the Second Reading, within 48 hours of publication. I recall what I was doing at the time of the business statement. I was dashing about trying to collate the representations which were beginning to flood in from industry and from constituents in time for the Second Reading debate. How could we possibly know at that time what was going to pass after the business statement and until this moment?
  The Financial Secretary seemed to cast aspersions on the Opposition's motives in objecting to the proposal that we should now proceed to the Report stage. Why? I believe passionately that it would be wrong for the House now to proceed without an interval for reflection—[Interruption.]—and I resent, having sat right through our previous debates almost without leaving the Chamber—[Interruption.]—and having been present for more than half of the past 48 hours—
  Mr. Speaker: Order. We have had an interesting debate up to now. There is no reason why it should be interrupted.
  Mr. Blaker: I object to aspersions on my motives when I suggest that it would now be reasonable to take a pause.
  I would add my voice to the voices of my colleagues who have suggested that it would be in the interests of the House

  1781
  if the Leader of the House were present. It is some time now since we first asked that he should come. He is the Leader of the House, after all, and, surely, therefore has a responsibility to the House as a whole. If the Leader of the House cannot be obtained, then the Patronage Secretary, I believe, is now Deputy Leader of the House, and, therefore, if the Leader of the House—
  Mr. Speaker: I hope that the hon. Member will not run through the whole list of Ministers who might be here.
  Mr. Blaker: That might depend on how many Deputy Leaders of the House there are among Ministers. I do not recall.
  Reference has been made to the Ways and Means Resolution. The Government have power to take bonds, if not payment of cash their position is safeguarded. Some of my hon. Friends have suggested that that Ways and Means Resolution lasts for only 25 days. With respect to them, I do not think that that is correct. My understanding is that there is no limit of time. If I am wrong I shall be grateful to be corrected immediately by the Financial Secretary. My understanding is that there is no limit of time on the validity of the Resolution on which the Bill is founded.
  The House deserves a better explanation than that we have had so far; we have had only a very brief and, I thought, offhand explanation by the Financial Secretary, only a very cursory statement, about what the rush is. There was a reference by the Financial Secretary to the Customs requiring authority to proceed with certain actions. If this really is the difficulty perhaps the Financial Secretary will explain it a little more.
  Certainly, it is true that Customs and Excise are issuing instructions to importers and exporters, and one of those instructions raised some comment, and leads to some of the unfinished business which we shall have to consider on Report and which the Government are, I think, not now in a position to consider.
  Mr. Speaker: Order. There are too many informal debates going on at the moment.
  Mr. Blaker: This is a very fundamental Bill, and, as my hon. Friends have
  1782
  pointed out, it involves taking in a great deal of money. At a time when—I have the impression—hon. and right hon. Gentlemen on the Treasury Bench are just as tired as I am, when their judgment is just as fallible as mine is, and when their speech is somewhat slurred as mine is, I am rather shocked that they should now proceed as if we were at the peak of our judgment, and debate such a fundamental Bill.
  Sir K. Joseph: With your leave, Mr. Speaker, and that of the House—since I raised a point of order earlier—I would like to put a point of view to the Government. First, I would like to comment on the speech, the last part of which I heard, by the Financial Secretary. For once, the dulcet tones evidently deserted him. He has been courtesy itself throughout our discussion of the Bill, and we are most grateful to him, but in that speech he did not help us with some of his arguments and I would like to comment on some of them.
  If ever there was a Bill with which the Government themselves blundered, it is this Bill—from the start, when it was announced by the Chancellor, who did not seem to have heard of E.F.T.A. at all, when questioned on the effect of the Bill on the E.F.T.A. Agreement. Secondly, the Financial Secretary was quick to confess that the Bill in its preliminary form sought to impose a charge on the importer without any legal right in the Government's hands to take that charge. That was put right by the Resolution. Then, under the procedure, which admittedly the House accepted, for taking one stage immediately after another. the Government failed to suspend Standing Order No. 48 so that an hon. Member could put down a new Clause. Those are three failures by the Government.
  The Financial Secretary said that if we objected we should have raised our objection on the business statement. If he looks at what happened on the business statement, the hon. Gentleman will see that the Leader of the House announced that it was hoped to conclude this business on Wednesday, 4th December. We were not told that it was the Government's intention specifically to get this business by Wednesday, 4th December.

  1783
  At the end of Committee my hon. Friend the Member for Wanstead and Woodford (Mr. Patrick Jenkin) raised the question of the need for manuscript Amendments, and was told that that was a matter for Mr. Speaker. The Government are in no moral position to play the virtuous party in this sad tale of a potential denial to hon. Members first of the chance to consider the Amendments and what needed to be amended after Committee, and secondly the chance to put down a new Clause.
  The House is now considering whether it is right to take Report. I would accept that it may be right that the Bill has been on the stocks, in Government hands, for some months. We have, after all, an import deposits print which has the date 1967 on its back. Although the Government may have had the Bill for some time, we have not and the country has not. The Bill was introduced only a week ago—
  Mr. Harold Lever: The right hon. Gentleman has asserted that the Bill has its date printed on the back—
  Sir K. Joseph: On the folder.
  Mr. Lever: —the date of 1967. I would like to ask him what authority he has for supposing that that was printed in 1967?
  Sir K. Joseph: If the Government deny it, I accept their denial, but the date is in. It may be a pure coincidence that the number is there.
  Mr. Taverne: This is an internal memorandum, not a date.
  Sir K. Joseph: I accept the denial, and I withdraw the point. The country, the importers and the Opposition have had very little time since last Wednesday in which to consider the Bill. We and the country are denied time to study what the Government have said in Committee, and it would be a disgrace if the Report stage were taken now.
  Mr. Brian O'Malley Mr. Brian O'Malley rose in his place and claimed to move, That the Question be now put.
  Question put, That the Question be now put:—
  The House divided: Ayes 119, Noes 15.

  Division No. 29.]

  AYES

  [4.37 a.m.

  Allaun, Frank (Safford, E.)

  Gardner, Tony

  Morgan, Elystan (Cardiganshire)

  Allen, Scholefield

  Cordon Walker, Rt. Hn. P. C.

  Morris, Alfred (Wythenshawe)

  Archer, Peter

  Greenwood, Rt. Hn. Anthony

  Morris, Charles R. (Openshaw)

  Armstrong, Ernest

  Gregory, Arnold

  Morris, John (Aberavon)

  Ashton, Joe (Bassetlaw)

  Grey, Charles (Durham)

  Moyle, Roland

  Beaney, Alan

  Griffiths, David (Rother Valley)

  Mulley, Rt. Hn. Frederick

  Benn, Rt. Hn. Anthony Wedgwood

  Griffiths, Will (Exchange)

  Ogden, Eric

  Bennett, James (G'gow, Bridgeton)

  Hamling, William

  O'Malley, Brian

  Bidwell, Sydney

  Hannan, William

  Oswald, Thomas

  Bishop, E. S.

  Harper, Joseph

  Palmer, Arthur

  Blenkinsop, Arthur

  Harrison, Walter (Wakefield)

  Pavitt, Laurence

  Boston, Terence

  Hart, Rt. Hn. Judith

  Peart, Rt. Hn. Fred

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

  Haseldine, Norman

  Perry, George H. (Nottingham, S.)

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

  Herbison, Rt. Hn. Margaret

  Roberts, Rt. Hn. Goronwy

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

  Horner, John

  Roebuck, Roy

  Butler, Mrs. Joyce (Wood Green)

  Howell, Denis (Small Heath)

  Ross, Rt. Hn. William

  Cant, R. B.

  Huckfield, Leslie

  Rowlands, E. (Cardiff, N.)

  Carmichael, Neil

  Hughes, Emrys (Ayrshire, S.)

  Shaw, Arnold (Ilford, S.)

  Coe, Denis

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

  Shore, Rt. Hn. Peter (Stepney)

  Dalyell, Tam

  Jones, Dan (Burnley)

  Short, Mrs. Renée (W'hampton, N.E.)

  Davies, Ednyfed Hudson (Conway)

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

  Silkin, Rt. Hn. John (Deptford)

  Davies, Dr. Ernest (Stretford)

  Jones, T. Alec (Rhondda, West)

  Silverman, Julius

  Davies, Ifor (Gower)

  Leadbitter, Ted

  Small, William

  Dewar, Donald

  Lee, Rt. Hn. Jennie (Cannock)

  Snow, Julian

  Diamond, Rt. Hn. John

  Lestor, Miss Joan

  Swain, Thomas

  Dickens, James

  Lever, Harold (Cheetham)

  Taverne, Dick

  Dobson, Ray

  Lewis, Ron (Carlisle)

  Tinn, James

  Doig, Peter

  Lomas, Kenneth

  Urwin, T. W.

  Dunn, James A.

  Macdonald, A. H.

  Varley, Eric G.

  Eadie, Alex

  McGuire, Michael

  Wainwright, Edwin (Dearne Valley)

  Ellis, John

  Mackie, John

  Wallace, George

  Ennals, David

  Maclennan, Robert

  Wellbeloved, James

  Evans, Fred (Caerphilly)

  McMillan, Tom (Glasgow, C.)

  Wells, William (Walsall, N.)

  Evans, Ioan L. (Birm'ham, Yardley)

  McNamara, J. Kevin

  Whitlock, William

  Faulds, Andrew

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

  Williams, Alan (Swansea, W.)

  Fernyhough, E.

  Manuel, Archie

  Wilson, William (Coventry, S.)

  Fitch, Alan (Wigan)

  Marks, Kenneth

  Woof, Robert

  Ford, Ben

  Mikardo, Ian

  Forrester, John

  Millan, Bruce

  TELLERS FOR THE AYES:

  Fowler, Gerry

  Miller, Dr. M. S.

  Mr. Ernest G. Perry and

  Freeson, Reginald

  Milne, Edward (Blyth)

  Mr. Neil McBride.

  NOES

  Blaker, Peter

  Hill, J. E. B.

  Page, John (Harrow, W.)

  Boardman, Tom (Le'cester, S.W.)

  Iremonger, T. L.

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

  Emery, Peter

  Jenkin, Patrick (Woodford)

  Winstanley, Dr. M. P.

  Fletcher-Cooke, Charles

  Jopling, Michael

  TELLERS FOR THE NOES

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

  Joseph, Rt. Hn. Sir Keith

  Mr. Reginal Eyre and

  Glover, Sir Douglas

  Legge-Bourke, Sir Harry

  Mr. Timothy Kitson.

  Question, That the Bill, as amended, be now considered, put accordingly and agreed to.
  Bill, as amended, considered accordingly.
  4.45 a.m.
  Mr. Speaker: I have selected a manuscript Amendment standing in the name of the right hon. Member for Leeds. North-East (Sir K. Joseph). I will read it slowly. [Interruption.] Order. We are on a serious matter. Consideration of manuscript Amendments is quite a difficult matter both for the Chair and the House. The Amendment is in Clause 1, page 1, line 22, at end insert:
  "or, in cases where notice or notices of assignment of the right to return of the deposit have been duly given in writing to the Commissioners, to the ultimate assignee of that person."
  Mr. Eric Ogden: On a point of order, Mr. Speaker. I have never pretended to know procedure to the degree that other hon. Members do, but I put it to you that a manuscript Amendment supported by 15 hon. Members opposite is hardly a matter which should have serious consideration at this hour. [Interruption.]
  Mr. Speaker: I am going to deal with the hon. Member's point of order if the hon. Member will let me. He has suggested that this is not an appropriate hour to consider a manuscript Amendment, and he has also invited me not to consider a manuscript Amendment because only 15 hon. Members appeared in the last Division. The fact that an Amendment stands in the names of a considerable number or a small number of hon. Members is not a matter for the Chair when it is deciding whether an Amendment should be selected. Moreover, the selection of Amendments is a matter for the Chair which the hon. Member should not question at all.
  Several Hon. Members Several Hon. Members rose—
  Mr. Speaker: Order. Three hon. Gentlemen tire trying at once to catch my eye.
  Mr. Ogden: With respect, I had not finished putting my point of order. I am not trying to challenge your Ruling in any way, but I suggest that a manuscript Amendment which can secure the support of only 15 people on the other side should not be seriously considered.
  Mr. Speaker: If I appeared to interrupt the hon. Member, I rose to deal with his point of order because I thought he had finished. What he says in his second submission adds nothing to the first and that has been answered.
  Sir D. Glover: The hon. Member for Liverpool, West Derby (Mr. Ogden) has raised an important matter with the Chair. He says, rightly, that there are few Members in the House. There is about one-fifth of the total number of hon. Members.
  Mr. Speaker: I have already dealt with that point of order. We must not debate it. I have ruled.
  Mr. John Page: Without in any way questioning your Ruling, Mr. Speaker, I have a manuscript Amendment which would have come earlier than the one which you have called. The object of this Amendment was to elicit from the Minister of State—
  Mr. Speaker: Order. The hon. Gentleman cannot now begin to discuss the purpose of Amendments which he wished to place before the House. If his manuscript Amendment came before the one I have now selected, the obvious fact is that I have not selected his Amendment.

Clause 1

  CHARGE OF IMPORT DEPOSITS
  Mr. Fletcher-Cooke: I beg to move, in page 1, line 22, at the end insert:
  "or, in cases where notice or notices of assignment of the right to the return of the deposit have been duly given in writing to the Commissioners, to the ultimate assignee of that person."

  1787
  After the House has heard my eloquent discourse in support of the Amendment, I am sure that many more than 15 hon. Members will be supporting it—[Interruption.] They are all over on the Government benches, because they realise that the question of assignability, to which I now return after having had some encouraging noises at one stage from the Minister of State in Committee and then some discouraging noises from the Financial Secretary, is obviously one which the Government have considered, but should reconsider, because I think that it is unique in the history of the law of obligation or of debt that somebody who will be owing a debt to a person—that is to say, the Government—and who refuses to allow the creditor—
  Mr. Michael Shaw: On a point of order. First, I am finding it difficult to hear my hon. and learned Friend. Secondly, in all sincerity, I have no clear idea what this Amendment is about—[An HON. MEMBER: "Wake up."] I attempted to write it down when you, Mr. Speaker, so kindly read it slowly, but I could not get it down verbatim. I would be grateful if I could—
  Mr. Speaker: Order. On the first part of the point of order, I am grateful to the hon. Member because it does not help in dealing with a difficult problem like this if we have noise from any part of the House.
  Secondly, it is worth observing that the Chair rarely accepts manuscript Amendments because of the very difficulty that the hon. Member has raised. Normally the House is in possession, in print, of whatever it is discussing. This is the purpose of Standing Order No. 48, which was referred to in an earlier debate. However, I will read it again. The Amendment proposed is in Clause 1, page 1, line 22, at the end insert:
  "or, in cases where notice or notices of assignment of the right to the return of the deposit have been duly given in writing to the Commissioners, to the ultimate assignee of that person."
  Mr. Jopling: On a point of order. I am sorry to weary the House at this stage, but we are in great difficulty, Mr. Speaker, as you know. May I ask, first, whether it would be possible for you to put that Amendment somewhere where hon. Members could see it? I am afraid
  1788
  that I have tried on two occasions to write it down, and I still have not got it down. I am sorry if I have not written fast enough.
  The second point I should like to raise is whether you could give the House some indication whether you will be selecting other Amendments which hon. Members have put down. I am sure that you know how difficult it is to prepare one's observations and thoughts on the spur of the moment on Amendments which might be called. It would be to the great convenience of the House if we could have some idea what Amendments you might be likely to call at some future stage.
  Mr. Emery: Further to that point of order.
  Mr. Speaker: Order. I will deal with one at a time. We are on a most complex matter. I could of course solve the problem by not accepting manuscript Amendments. This would give satisfaction to at least one side of the House but not to the other. If I were to announce what other manuscript Amendments I have selected at this stage, the House, which is finding it difficult to cope with one manuscript Amendment, would be utterly befogged. It will be possible for the hon. Gentleman who raised this point of order, if he has not grasped the manuscript Amendment which I have read twice, to come to the Table and see it in writing.
  Mr. Emery: On a point of order. I wonder whether it would be possible for this manuscript Amendment to be placed in the "No" Lobby so that anybody could copy it. In the same way it would be helpful, if Mr. Speaker had selected any further manuscript Amendments, if they also could be placed in the "No" Lobby. Hon. Members would then have the opportunity of copying them before they were called and we would not have the difficulty we have at the moment.
  5.0 a.m.
  Mr. Speaker: I am glad the hon. Gentleman has raised that as a point of order. I shall see that the manuscript Amendment we are discussing is posted in the "No" Lobby. I shall also post in the "No" Lobby any further manuscript Amendments which I selected during the debate we had on whether the Bill, as amended, be now considered.
  Mr. Lomas: On a point of order. Mr. Speaker, is it not farcical, and does it not bring the House into disrepute, that fewer than 7 per cent. of the Opposition and only one-twelfth of the Liberal Party are here and keeping the House awake at this time in the morning? Is it not time that we tried to bring this farcical situation to an end?
  Mr. Speaker: I am not happy when any hon. Member either talks about bringing the House into disrepute, or brings it into disrepute. The existence of a minority in the House of Commons is not something which brings the House of Commons into disrepute. What is happening is perfectly in order. I doubt whether the hon. Member's point was even a point of order.
  Mr. Fletcher-Cooke: Once again may I revert to the rivetting question of assignability, because we had an extremely interesting debate on this in Committee. We discussed, first, the nature of the document or receipt which the warehouseman is to give to the importer if he pays the deposit, or to the bank or whoever it may be who pays the deposit. My hon. Friend the Member for Harrow, West (Mr. John Page) did us a good service by calling attention to the nature of the document and the way it operates at present, and also by drawing attention to the many improvements which might be made. It is upon that document that the question of assignability turns.
  In the course of those debates we discovered that an assignment, if I can use the phrase broadly, is decided at the beginning of the six-month period. That is to say the payment of deposit may be made, not by the importer, but by a bank, and thus the importer's credit with Customs is as it were made by a third party, or it can be assigned, again using the phrase broadly and not technically, at the end of the six months because the person who paid the deposit can give a mandate to anybody to withdraw it in the way that my hon. and learned Friend the Member for Northwich (Sir J. Foster) suggested
  It is only during the period of the deposit that no assignment is to be permitted in the legal sense of the word. That is to say the Government will refuse
  1790
  to take notice duly given in writing to them as the debtor that the creditor has assigned his debt in the normal method of legal assignment. This will not prevent assignments. They will not be legal assignments, but equitable assignments. Assignments will take place without the normal legal assignment or advice, because that is the way business works. There will be a declaration of trust, and there will he other forms of equitable assignment which will be far less convenient than the normal method, because they will be less secure, and the rate of interest that will have to be borrowed on the security of this document will be much greater, because the security will be less.
  It will be another method by which interest rates will creep up, which I think will be very undesirable, and therefore we revert in rather more detail to this question of the assignability, in the proper legal sense of the word, of the debt which the Government will owe to the importer during these six months. The arguments about the increase in the credit base, the velocity of credit, and so on, we have heard; although I must say that we have heard them stated rather than argued and I do not believe that the statements amount to very much. I think that they will prove to be a small consideration when put in the scales against the ease with which debts can be assigned in the course of normal trade.
  The hour is very late and I will not expand further, although I must say that I think the minds of the three representatives of the Treasury have fluctuated about this. I would appeal to them once more to consider this again, because it is a bad thing to interfere with the normal course of trade unless it be for good and demonstrable reasons. I do not believe that the credit base, liquidity, and so on, are affected. I also do not think that the Treasury Ministers' arguments have been very weighty; hut, by continuing to talk at this hour, I do not suppose that I shall get any further and so I beg formally to move this Amendment.
  Mr. John Page: Very quickly, I would refer to the nature of the document or receipt which is to be given. Owing to the indecent haste with which this Report stage has been taken, there is not before the House any statement by

  1791
  the Financial Secretary on why, on looking at this again, he could not accept the whole of our argument on assignability. On Tuesday. the Minister of State did say that on Report, or at some later stage during our discussion of this Bill, he would give us further information as to the discussions he had had about the type of receipt which was going to be given to the depositor. I think that it is agreed by the parties in this House that merely a stamped extra copy of Form C.139 would be sufficient, but I think we should all like to hear about the form in which the receipt will be given.
  Mr. Taverne: I said that I would look at the form again, but the form is not part of this Bill and the form which this document can take can be considered at another time. That is what I intended to convey, and I can add that I will write to the hon. Member.
  Mr. Page: I thought that we were discussing the form of the receipt and not the form, which is a very different matter. The whole of the discussion was on the form of the receipt, and there was disagreement about whether the tear-off section was in any way a proper receipt. This is a most important matter in considering assignability. We should know the form upon which the assignable document is to be issued. The House deserves something more than it has so far received, and a letter from the Minister—although I shall be most grateful to receive it—is hardly adequate for the commercial life of our country.
  It is estimated that people will have on deposit a sum running at around £750 millions or so. They should be told whether they will get a proper receipt, as they might from a garage for petrol or from a shop for an article of clothing, instead of an inadequately stamped copy of another document. There must be a firm undertaking. It is one of the tragedies of this hurried Report stage that homework is not done and the Bill becomes a mockery.
  Mr. Emery: My hon. Friend the Member for Harrow, West (Mr. John Page) referred to the matter of consideration, and this relates to administration under the Bill and the Amendment. The Financial Secretary's argument is that no docu-
  1792
  ment should be assignable, and the problem of assignment is the problem of liquidity. One of the problems was that the assignee would not be known until the end of the process, and it may have gone through many stages beforehand. I give him those arguments, but would it not be possible to arrange an efficient procedure by which the small number of firms concerned could be issued by the Commissioners 30 days after the date of deposit with a single cheque, not negotiable, payable only to the payee? If, within that 30 days, the payee nominated a single payee, it could then be assigned—only once, because the payee would then be the person to whom it would be assigned.
  This would allow the cheque to be absolute notice, backing for the loan, but would not allow for negotiability or for continued assignment. I had hoped that an Amendment would have been selected on that, but apparently it was too long, and length is one feature of a manuscript Amendment which the Chair must consider. I should be grateful if the Financial Secretary could at least let me know later about that possibility.
  Mr. Harold Lever: I am sad that it should have been supposed that I question the sincerity of the Opposition in wanting this debate or in raising the points which they have. If I do not deal with them more extensively, it will not he out of discourtesy but because we have the audience who have heard most of the arguments before. The Minister of State gave his undertaking in complete sincerity. The three Treasury Ministers here present most earnestly conferred with officials and discussed this in great detail before we concluded that we could not agree to assignability. The point just made by the hon. Member for Honiton (Mr. Emery) was considered even before he raised it as a possible halfway house and I am afraid that we turned that down too.
  In the end, if we concede that assignability runs contrary to the liquidity pressure purpose of the Bill, of course one assignment is not as damaging to that purpose or as administratively difficult as many assignments. On the other hand, it merely mitigates the evil, and it does not meet the whole case against assignability. Without going into polysyllabic descriptions of the monetary system, the

  1793
  case is that it makes the deposit more mobile and active than is desirable to meet the purposes of the scheme.
  In a sense we have met the lion. Member, because although technically it is not assignable, we invite someone to put up the deposit for the first time, which is equivalent to assignment. The importer can invite somebody to subscribe the deposit who has nothing to do with the transaction. In a sense, we have one assignment.
  I assure the House that we have not looked at the matter with dogmatic antipathy but with sympathy, but we came reluctantly to the conclusion that we could not accept the Amendment, and I ask the House to reject it for the reasons which I gave in greater detail in Committee.
  5.15 a.m.
  Mr. Patrick Jenkin: The Financial Secretary was not altogether successful in hiding the personal disappointment which he felt in not being able to meet us on this important question of assignment, and for that we express appreciation. I will not speak at length, for. we have been on this Bill almost continuously for two days, but the Financial Secretary did not meet the argument put by my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke) that a right to receive a debt of this nature, although not in law assignable, can nevertheless be made the subject of enforceable rights by way of declaration of trust, of equitable assignment, of equitable charge.
  The only consequence of the Government's refusal to recognise the obvious convenience of having a document which on the face of it is assignable and to have a procedure in the Bill which recognises the obligation of the debtor to the Commissioners to pay the ultimate assignee is to add to the already complicated difficulties which importers are facing. In order to achieve what they will want to achieve any way, the task is made that much more difficult. I do not believe that this is the right way to deal with traders under the Bill.
  My right hon. Friend referred to the announcement of the scheme as a stroke of lightning upsetting and disrupting the plans of businessmen throughout the
  1794
  country, and the volume of correspondence which has reached us, even in the few days which have been available, is evidence of that. We have discussed the problems which these importers will face in raising the money and in getting exemptions where goods will be exported, and in claiming drawback if they have not been able to get refund of the deposit. These are all major administrative complications, and it seems to me that the Government are taking a very narrow and short-sighted view in not, at any rate on this minor point—it is a minor point in relation to the Bill—drafting machinery which would make it that much easier for the importer to overcome the problems. I do not believe that, by accelerating the mobility of capital, this would have the sort of impact on the gilt-edged market that the hon. Member suggested. I do not think that it would make a sufficient detraction from the general impact of the scheme to warrant its refusal. My right hon. and hon. Friends are bitterly disappointed that, even after this further reflection, the Government have not been able to accept the demand made in the Amendment. I do not think that it would be right at this stage to ask my hon. Friend necessarily to press the Amend-to a division, but I see no reason why he should withdraw it.
  Amendment negatived.

Clause 2

  EXEMPTIONS AND RELIEFS
  Mr. Emery: I beg to move, in page 3, line 17, at end insert:
  "(2) No import deposit shall be payable in respect of any goods which qualify for duty drawback."
  I move the Amendment—
  Mr. Roebuck Mr. Roebuck rose—
  Mr. Emery: The hon. Gentleman has been making a number of interjections from his seat. He has played no part in these proceedings and does not deserve to be considered in any way by anyone in the House at this stage. I do not intend to give way to him.
  Mr. Roebuck: Will the hon. Gentleman give way?
  Mr. Emery: No.
  I move this Amendment because I have received, from a number of management organisations concerned with the administration of the Bill on behalf of industry, requests for information, mainly because there is growing up within industry the concept that if anything qualfies already for duty drawback then, as a rule of thumb, this means that no import deposit need be paid.
  I have suggested to those who have approached me on the matter that, as a rule of thumb, this must be incorrect, because duty drawback in many instances cannot always be known until later on. Indeed, there are often long and protracted negotiations. However, where duty drawback is already being paid, it is being argued by many people that the Bill will ensure that no import deposit need be paid.
  It would be helpful both to industry and to the Government if we could have a clear statement tonight which could be publicised, and the easiest way to get that statement was to put down the Amendment.
  Mr. Harold Lever: I am grateful to the hon. Member for Honiton (Mr. Emery) for giving me the opportunity to make the situation crystal clear. First, I give a general assurance that there are no goods which qualify for drawback when exported that are not covered by the Amendment made in Committee. There are two meanings to duty drawback. If the hon. Gentleman means by drawback that it is intended to cover remission of duty at the time of importation, I assure him and the interests concerned that goods which qualify for remission of duty on entry will automatically qualify for remission of import deposit also. I think that this is the point he is after.
  As the hon. Gentleman recognises, if one uses the term "duty drawback" in the strict sense of repayment of duty at the time of importation, it is hardly practicable to secure that an import deposit should not be repayable on goods which qualify for drawback, but where it is not established at the time of importation whether re-export is to take place. These goods would automatically qualify for repayment of import deposit in the same way as they qualify for repayment
  1796
  of duty; always provided, of course, that the export takes place within 180 days before the import duty deposit has been repaid in the normal course. I do not want to reiterate the provisions we have made which widen that in respect of exports.
  In the second sense of a duty drawback there is a fall back position. There are other opportunities to exporters to establish a right to exemption from the payment of deposit. I hope that I have made the position clear to the hon. Member, I am sure that, if widely known, it is a very valuable point.
  Mr. Emery: I thank the Financial Secretary for his reply. I am sure that certain paragraphs of that reply will give the sort of assurance that industry wants. I beg to ask leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  5.25 a.m.
  Mr. Harold Lever: I beg to move, That the Bill be now read the Third time.
  I speak in all sincerity when I say that if I speak briefly it is because, apart from the anxieties on constitutional matters which seemed to me to lead perhaps to an unnecessarily extended debate, the Committee debate and the Second Reading debate were very rewarding, and the two sides can say that between us we have thoroughly examined principles and the detail of the Bill. In those circumstances, I should have thought that there was little to add, except to say, once again, as my hon. and learned Friend the Minister of State made clear, and as I think I myself made clear on Second Reading, that we brought in the Bill with reluctance, and only because it was required to speed up the move into surplus while the general strategy worked, but that bringing it in in no way must be taken to indicate any departure at all from the Government's adherence to G.A.T.T., E.F.T.A. and the liberalisation of trade on which we believe the future prosperity of the world and of this country will depend. I am sorry that it distresses my hon. Friend the Member for Harrow, East (Mr. Roebuck). but I urge the House to give a Third Reading to the Bill, it being a necessary, temporary and valuable assistance to the move

  1797
  into surplus, which is the urgent need of the country at the present lime.
  5.27 a.m.
  Sir K. Joseph: We have had such a rushed concentration on the Bill that it would be: useful to spend a few minutes on a summary of how this side feels about it. First, we would like to repeat to the Ministers who have handled the Bill our appreciation of their personal courtesy. Secondly, we must regret that despite the time and trouble taken, there are very few changes and improvements in the Bill. One such improvement is entirely to the credit of my hon. Friend the Member for Crosby (Mr. Graham Page), because it was as a result of his comments that the Government introduced a number of Amendments to make sure that Orders on delegated legislation under the Bill came before Parliament.
  The other improvement to the Bill is the welcome Amendment made by the Chancellor of the Exchequer allowing a remission of import deposit on exports. For that, we are and all concerned are grateful. But, at the end of two long days, we on this side are left with the question in our minds: is it all worth the trouble? On the one hand, we have to accept that there will be a marginal reduction in imports, and on the other we have to accept that that for the whole country there will be a severe increase in the credit squeeze. But at what cost?
  The Bill is marginally protective and thus makes us marginally less efficient. It will marginally reduce exports as well as reducing imports, and hon. Members have developed a number of instances to show the link between any cut in imports and a consequential cut in exports. [Interruption.] The hon. Member for Harrow, East (Mr. Roebuck) is full of muttering this evening. He has not taken the trouble to master the Bill as far as I know, and I wish that he would let those of us who have tried to master it briefly summarise it.
  I was saying that the Bill is marginally protective, that it will marginally cut exports. It will distort trade, and I will give an example which I believe the Financial Secretary will have seen in the Press. The Press carries stories of several substantial supermarket chains which, as a result of the Bill, are switching some
  1798
  of their imports from non-exempt to exempt goods. The Bill will distort the trading pattern of all sorts of businessmen. It will damage the less sophisticated importers, perhaps cruelly and even fatally in some cases. It will divert cash in the hands of the larger importers, cash which in many cases might have been reserved and earmarked for investment, into sterile import deposits, and on top of all those handicaps it will distract business men from their proper job of making their businesses more efficient.
  At the end of the day, the whole operation of a temporary palliative benefit to the liquidity and balance of payments of the country may be nullified by a surge in imports which is likely to follow the end of the period during which the Bill is operative. We think that it is a very nice balance whether the Bill is more damaging than beneficial. We cannot give it a welcome, but we repeat our appreciation of the courtesy which has been shown to us.
  5.32 a.m.
  Dr. Winstanley: Having sat up with the Bill all night and all last night, I do not feel inclined to let it disappear in silence. I shall not keep the House for more than a few moments, but there are one or two comments which I should like to make.
  My right hon. and hon. Friends and I are not happy with the Bill in many ways, as we have already made clear. We are not happy about its possible effect on small firms, nor about other aspects which we have mentioned. Not unnaturally, we believe that free trade is perhaps one of the answers to the problems of the moment, and it would be difficult to regard this as free trade, and we are frightened of any move in the world which could lead to an escalation of protectionism.
  I am happy to say that in the course of our discussions the Financial Secretary has done what he can to liberalise things, particularly for exports, and I should like to place on record our appreciation of what he has done, especially in what has come to be known as the liberalising Amendment which we discussed for so long this evening. For reasons which I fully understand—and I hope that he will not misunderstand me—the introduction of this liberalising Amendment has

  1799
  brought about a degree of delegation unparalleled in this context.
  We are placing immense responsibilities on Customs and Excise officials. When I made this point earlier, the hon. Gentleman seemed to think that I was being critical of those officials. I hope that he will acquit me of that charge if I say that some of my best friends are Customs and Excise officials, and I hope that I shall not be misunderstood when I say that, for some of them are. Customs and Excise officials already enjoy considerable powers, but they are of a different kind from these enormous responsibilities. They will now be able to make up their minds on very important matters on very little evidence and without any kind of check procedure, as the Financial Secretary will admit. We ought not to allow to pass without comment the fact that, perhaps for good reason, we have introduced into these matters a highly unusual degree of delegation.
  We wish the Bill all possible success, and we wish all possible success to the officials of the Customs and Excise. We have given them a lot of extra work. If the Bill is successful, much of the credit must go to the Financial Secretary to the Treasury for the manner in which he has approached it and for the way he has told us he will operate it at later stages.
  5.36 a.m.
  Mr. Hugh Fraser: As my Amendment was not called, I shall put the point about the abrasive industry—rather appropriate at this point, perhaps—to the Financial Secretary after the debate.
  I, too, thank Ministers for the way in which they have conducted their affairs and for their politeness to the House. I thank the Financial Secretary also for the helpful Amendment which he introduced. None the less, this Measure is a leap in the dark. No one knows how it will work. We hope that it will succeed, but there are inherent dangers.
  Although, initially, it may improve our balance of payments, through money lent here from overseas in the short period, the long-term effect must be to put up the foreign exchange price of many of our imports by about 2½ per cent. Second, when the money which has been lent
  1800
  comes to be recalled—the Bill has been called a moneylender's charter, and so it will be, with absolute certainty for one's money at 8 per cent.—we may well find, at the end of six or 12 months, that we have another problem on our hands even more tough than some of the foreign exchange problems we have had to contend with up to now. Finally, there is the danger to our own interest rate structure and even the gilt-edged market, which is in such terrible disarray now.
  Those by-products of the Bill may be more damaging than the slight fall in unnecessary imports is worth. From the national point of view, one must wish the Bill success. Nevertheless, one can understand why it has been bitterly opposed for so long by those in the Treasury who think they know better.
  Question put and agreed to.
  Bill accordingly read the Third time and passed.

  INSPECTOR OF TAXES (CONDUCT)
  Motion made, and Question proposed, That this House do now adjourn.—[Dr. Miller.]
  5.38 a.m.
  Mr. T. L. Iremonger: The House will be grateful to the Financial Secretary for attending to answer this debate after answering long and detailed debates in two all-night sittings on the Bill which has just been passed. I thank him personally very much for the careful and thorough attention he has given to secondary details of the case which I have to put to the House, details which it will not be necessary to discuss this morning in the Chamber. The hon. Gentleman and I have discussed at length the matter which I wish to raise, but the House will wish me to explain the background in a brief narrative.
  My constituent, Mrs. Doris Richards, is a soldier's widow with a family of young sons whom she was working to support. She was a temporary civil servant working in the office of one of Her Majesty's Inspectors of Taxes. The Inspector made the suggestion, which she gratefully accepted, that he should give one of her sons tuition in mathematics. The boy visited the Inspector's flat for

  1801
  this purpose for some time, during which the Inspector took advantage of the arrangement to assault him sexually.
  The boy eventually told his elder brother, who told his mother. She caused proceedings to be instituted. The Inspector pleaded guilty and was given no sentence by the court. He was transferred by his Civil Service superiors to a similar post in another area.
  Mrs. Richards was outraged at this, and it so preyed on her mind that she eventually suffered a complete breakdown. Because of her absences from work through ill health she eventually lost her ob as a temporary civil servant. She now has great difficulty, in continuing ill health, in getting and keeping any job. She has been reduced to near destitution and dependence on public agencies for moral and financial support. This is the tragedy of a brave and capable woman absolutely broken by the devastating psychological shock of betrayal by the authority in which she had put her trust and of seeing, as it appears to her, the wicked flourish like the green bay tree.
  I want to ask the Financial Secretary two things. Firstly, that he should arrange an independent medical examination of Mrs. Richards and of her case history, to establish the degree to which the conduct of her superior officer was responsible for precipitating her breakdown, and, in that connection, I ask for an undertaking that she be compensated from public funds, as may be appropriate to the degree of responsibility established. After all, if a workman's life is wrecked by a fall from defective scaffolding his employer is liable for compensation, and I cannot see that the analogy with the wreckage of this woman's life is too far fetched.
  I should add just one thing. If I have been less than precise in describing Mrs. Richard's medical case history it is not because I failed to make proper inquiries about it, but simply because I do not think it fitting or fair to reveal all that has been confided to one about private and intimate matters. That is all I want to say about Mrs. Richards personally.
  The second thing I want to ask the Financial, Secretary concerns the public service, and it is simply that the Inspector in question should be dismissed.
  1802
  The seduction was—it could have been nothing less—a calculated, deliberate plan conceived by an inveterate paederast to inveigle this child into becoming his established catamite. The child in question was the child of a woman not only subordinate to the Inspector in the disciplinary hierarchy, but also peculiarly vulnerable by reason of her widowhood and her financial responsibilities.
  The violation of the slowly maturing personality of a child by a sexually mature person—for that is the nature of the offence, and the gender of the parties is of secondary importance—is an act of callous cruelty however we look at it. If we do not like to look at it from the point of view of John Gordon in the Sunday Express, we can look at it from the angle of Boris Nabokov. For no one has ever explained it more poignantly and perceptively than he did in his novel "Lolita". Altogether it would be impossible to imagine conduct more dishonourable, and, in the context of the public service, more unpardonable. And besides, by the nature of his office, an Inspector of Taxes, inevitably sensitive and susceptible to pressures and blackmail, should be required to be, as much as any officer of the Crown, sans peur et sans reproche.
  Music hall jokes apart, I think the general opinion in this country is that we are exceptionally well served by the officers of the Inland Revenue. Our tax inspectors are men of absolute integrity, I really believe, as well as of outstanding calibre of brain and mind. It is important that this standard should be jealously maintained, and it is important that it should be seen to be jealously maintained. I do not think that the sense of outrage and injustice expressed by the unhappy Mrs. Richards is in the least unreasonable. I think she has evinced a surer instinct for the true best interests and health of the public service than did the more merciful senior officials who decided not to dismiss this officer.
  I think a grave error of judgment was committed. It would be bad enough if no one had noticed or cared, but, in the circumstances, it cannot fail to undermine confidence in the standard demanded of public servants in responsible posts. It is painful and embarrassing for any hon. Member of this House to tread so close to the boundary of the Civil Service sanctuary, and I have been

  1803
  careful to avoid identifying any individual, to the extent that I could not myself, if asked, say who the officer is or where he is posted. I am not even aware of his name. I have no wish to pillory anyone. But I am concerned to protest against what seems to me a sinister indication of the lowering of standards required in servants of the Crown. I hope, therefore, that the Minister will be able to say that the officer concerned will be removed from the Service, to mark the gravity of this offence.
  5.47 a.m.
  The Financial Secretary to the Treasury (Mr. Harold Lever): I am grateful to the hon. Member for presenting his case, to all of which I cannot necessarily assent, with moderation and great fairness, considering how strongly he feels in not involving the name of and means of identifying the officer concerned. It is a sad and sorry story of a delinquent Inspector of Taxes who misbehaved in the manner that has been established by the hon. Member. I need hardly say that we regret the happening of such improper and very saddening events in which this man committed an offence against a fellow employee's child.
  The court, however, became seized of this matter, and they are in a better position than I am to form an impartial judgment of the gravity of his behaviour. I think that I ought to be swayed by the view of the court, which certainly implied that he was not an habitual offender, and that it was his first offence. He was given a conditional discharge, and no monetary or other penalty was inflicted upon him. It is clear that the court wanted this man to redeem his offence and to restore his behaviour to that which would, as the hon. Member has said, be more suitable to a man occupying this position.
  The question is whether the Inland Revenue authorities ought to have dismissed him. I respectfully submit, although I can see that anyone else is entitled to another point of view, that it would have been wrong for the Inland Revenue to have dismissed this man, having regard to the view of his offence taken by the court, and of the court's anxiety that he should rehabilitate himself after this lapse. Had I the judging
  1804
  of the matter, which of course I have not except by way of review in the light of the hon. Member's representations, it would seem to me the wrong way of approaching this, at this point of a man's life when he has been guilty of this very grave offence and has been given by the court the opportunity to redeem himself, if I or the Inland Revenue were to make it more difficult for him to do so by turning him out of the means of earning his livelihood, for which he had the skills and the connection and, presumably, no alternative skill.
  It seems to me that the Inland Revenue authorities were obliged to ensure that the circumstances of his employment were not such as to involve them in responsibility for any further delinquency that might occur. There is no such risk; he does not come into contact with young boys in his employment. It cannot be said that the risks, such as they may be, inherent in this man's psychology have been enhanced by the Inland Revenue decision to let him go on earning his livelihood. Far from being able to go with the hon. Member in wanting to see him dismissed, I am obliged to endorse the decision of the Inland Revenue, which seems to me to be the only decision which they could have taken in the circumstances, having regard to the court's decision.
  The second question that I ought to answer is, are we responsible for the nervous breakdown of the mother of this boy? Most sincerely, I would express my deep sympathy for the lady, but, in spite of that, on the closest investigation of the matter, we cannot accept that we are responsible for her condition or are liable to compensate her.
  I am sorry to offer two disappointments to the hon. Gentleman. I see no reason to interefere with the decision of the Inland Revenue to retain this man at his post, subject to all suitable safeguards as to the nature of his job. I cannot accept that, in the circumstances of the case and having regard to the condition of the day concerned, the Inland Revenue is obliged to make some form of compensation to her for her nervous condition. I do not believe that it has been established that her condition is an attributable responsibility of the Inland Revenue. The Inland Revenue is not liable for the acts of its servants other than in the

  1805
  course of their employment. The fact that, incidental to his employment, he meets the child of this lady and she is disturbed or upset because of what happened subsequently cannot be laid at the door of the Inland Revenue.
  Mr. Iremonger: It would seem to me that this officer was in charge of the office. He was the superior in charge of all the staff and. therefore, Mrs. Richards was, as it were, a moral responsibility of his.
  Mr. Lever: But it was not as if he assaulted a member of the staff in the course of his duty or the opportunities of his duty. He became friendly with a member of the staff and, as a result, gained access to her home and met her son. But that is a different matter from acting in the course of his duty. One might as well say that if he had fallen in love with a lady on the staff and seduced her or promised to marry her and had not kept his promise and she had had a nervous breakdown, the Inland Revenue would be responsible for that. I could not accept that principle. It is only for actions arising out of and in the course of the employment of the inspector for which the Inland Revenue ought to have responsibility.
  In those circumstances, I could not feel justified in advising the expenditure of public money.
  I do not want to go into the details of the lady's health, any more than did the hon. Gentleman. It is clear, in my judgment, that no responsibility falls upon
  1806
  the Inland Revenue in these circumstances.
  I think that the Inland Revenue has a moral responsibility to try and help the lady over her disturbed period, because she was an employee of the Inland Revenue. Having investigated the case, I am satisfied that the Inland Revenue has been to extreme lengths of consideration—and I do not blame the lady, because she was not well—in its desire to help her retain her employment, but it became clear that, for one reason or another, her health would not permit it.
  I am sure that the Inland Revenue behaved rightly. It had to accept the decision of the court in spirit as well as in law. It has no obligation to compensate the lady. It had an obligation, which it discharged to the full. to give her great consideration after this unfortunate and criminal incident in an effort to help her return to work in the normal way. Unhappily, because of her condition, that was not possible. But I think that the Inland Revenue made every attempt which could reasonably be expected of it.
  I regret having to give a disappointing reply to the hon. Gentleman. I am afraid that I cannot go along with him on either of his two points, though I renew my expression of sympathy to the lady concerned and my deep regret that the incident ever occurred.
  Question put and agreed to.
  Adjourned accordingly at five minutes to Six o'clock a.m.

SCOTLAND
  >Motorways (Edinburgh)
  >Motorways (Edinburgh)
  Solway Firth Barrage
  Solway Firth Barrage
  Storm Damage (Timber)
  Storm Damage (Timber)
  Lime Subsidy (Crofting Counties)
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  Dundee Dental Hospital
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  Multi-Storey Blocks
  Multi-Storey Blocks
  Technical Teachers (Training)
  Technical Teachers (Training)
  Scottish Office (Television Programme)
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  Unoccupied Property (Rates)
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  Housing Modernisation, Rosyth
  Housing Modernisation, Rosyth
  Electricity Generating Station (Firing Method)
  Electricity Generating Station (Firing Method)
  Conveyancing Fees
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  Prescription Charges
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  Landing Strip, Isle of Barra
  Landing Strip, Isle of Barra
  Land Reclamation
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  Forth Road Bridge
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  General Teaching Council
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  Water (Scotland) Act
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  School Hours
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  Rate Levying System
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  Computers (Scottish Office)
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MINISTRY OF DEFENCE
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TECHNOLOGY
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NATIONAL FINANCE
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EDUCATION AND SCIENCE
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EMPLOYMENT AND PRODUCTIVITY
  Agricultural Training (Scotland)
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  Government Training Centres (Wales)
FOREIGN AND COMMONWEALTH AFFAIRS
  Falkland Islands (Unauthorised Aircraft Landing)
  Falkland Islands (Unauthorised Aircraft Landing)
HOME DEPARTMENT
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  Adoptive Parents (Protection)
  British Standard Time
  British Standard Time
HOSPITALS
  Nuneaton
  Nuneaton
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  Birmingham Regional Hospital Board
  Coventry Hospital, Wallsgrave
  Coventry Hospital, Wallsgrave
  Ear, Nose and Throat Operations (Waiting List)
  Ear, Nose and Throat Operations (Waiting List)
SOCIAL SERVICES
  Local Authority Day Nurseries
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  Prescription Charges
  Prescription Charges
  Welfare Milk
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  Department (Report)
  Department (Report)
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  Family Planning Services
POST OFFICE
  Northern Ireland Telephone Directory (Postcodes)
  Northern Ireland Telephone Directory (Postcodes)
WALES
  Roads (Rhondda Valley)
  Roads (Rhondda Valley)
  Llantrisant Radial Road, Cardiff
  Llantrisant Radial Road, Cardiff
  Rent Assessments
  Rent Assessments
  Housing
  Housing

Preamble
The House met at half past two of the clock: The LORD CHANCELLOR Oil the Woolsack.
Prayers—Read by the Lord Bishop of Leicester.
The Viscount Mills—Sat first in Parliament after the death of his father.

HORNSEY AND GUILDFORD COLLEGES OF ART
LORD BEAUMONT OF WHITLEY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether the 1944 Education Act gives the Secretary of State for Education and Science sufficient powers to order an investigation into recent events at Hornsey and Guildford Colleges of Art.]
BARONESS PHILLIPS: My Lords, the Education Act 1944 enables the Secretary of State to hold an inquiry for the purpose of the exercise of any of his specific powers or duties under the Education Acts. None of his powers or duties under those Acts is exercisable in relation to the appointment and dismissal of teachers in maintained institutions of further education. Since my right honourable friend has decided that it is in the best interests of these colleges that the new arrangements they have instituted should be given a fair run, the question of using his powers with regard to other matters does not arise at present.
LORD BEAUMONT OF WHITLEY: My Lords, I thank the noble Lady for giving me a straight answer.
BARONESS PHILLIPS: My Lords, I am merely seeing that the Press have a correct report this time.

BRITISH REPRESENTATION IN THE YEMEN
LORD SORENSEN: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether a British Diplomatic representative is now stationed in the Yemen; if not, who is responsible for the British Legation building at Taiz; whether any British nationals reside in the Yemen; and what Government of the Yemen Her Majesty's Government it now recognise.]
THE MINISTER OF STATE, FOREIGN AND COMMONWEALTH OFFICE (LORD CHALFONT): My Lords, no British diplomatic representative is now stationed in the Yemen. There is no British Legation building at Taiz. The lease of the building that housed the Legation was given up when de last British diplomat left in February, 1963. So far as we know there are no British nationals residing in the Yemen. Her Majesty's Government continue to recognise the Royalist Government.
LORD SORENSEN: My Lords, from the last part of my noble friend's reply do I understand that we are recognising the Royalist Government in Yemen? Can my noble friend also say what the position now is between the rival forces in that country?
LORD CHALFONT: My Lords, I confirm that we do recognise the Royalist Government in the Yemen. So far as the present situation there is concerned the civil war continues. There does not seem to be any immediate prospect of a settlement. But I should require notice if the noble Lord wants any further details.

FALKLAND ISLANDS AND ARGENTINA
2.40 p.m.
THE EARL OF BUCKINGHAMSHIRE: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether, in view of the negotiations

167
being carried out with Argentina over the Falkland Islands, it would only be logical to hand over the Channel Islands to France.]
LORD CHALFONT: No, my Lords.
THE EARL OF BUCKINGHAMSHIRE: My Lords, I thank my noble friend for his quick reply. May I ask him whether he is aware that, while assurances have been given to the people of the Falkland Islands that there will be no change of sovereignty, this is something which the Argentine will not accept? Secondly, could my noble friend explain how Her Majesty's Government can sign an agreement which does not incorporate this clause, without which the Government would be "two-faced", both to the Falklanders and to the people of Britain?
LORD CHALFONT: My Lords, I think that I can add nothing useful to the Statement on this subject I made yesterday. There will be a Statement on the Falkland Islands, with the leave of your Lordships, later this afternoon. If the noble Earl will be prepared to wait until that Statement is made, it may be that some of his fears will be allayed. If not, we shall have to return to the subject again, because I cannot add anything to what I said yesterday.
LORD BLYTON: My Lords, can my noble friend say whether the Statement will contain the reason why the Falkland Government should know things on which my noble friend himself said on television last night he had to consult Parliament here?
LORD CHALFONT: My Lords, of course I cannot prejudge what the Statement this afternoon will say, but I can answer my noble friend's question more directly by saying that this was included in my Statement yesterday. I explained that we had had discussions with the Government of the Falkland Islands in the course of confidential inter-Governmental discussions and that to make such a statement in your Lordships' House would be to make it public. Again I am afraid that I cannot add to that.
LORD BARNBY: My Lords, could the noble Lord indicate whether the
168
words attributed to him in col. 32 of the OFFICIAL REPORT yesterday,
"when we have been required by the United Nations to discuss it",
are correct? If so, could the noble Lord give some enlightenment about how it comes about that the United Nations so readily submits to pressure in regard to our sovereignty, when there was so little activity on the part of the United Nations to bring pressure on Russia with regard to her occupation of Czechoslovakia.
LORD CHALFONT: My Lords, the noble Lord's question is well wide of the original Question and Answer and I am afraid I cannot answer it in this context.
BARONESS HORSBRUGH: My Lords. could the noble Lord say whether Her Majesty's Government are considering any other islands on which they could make the same arrangements as the Falkland Islands?
LORD CHALFONT: My Lords, as we have not yet said what these arrangements are, I cannot answer that question.
THE EARL OF SWINTON: My Lords, could the noble Lord answer this question, which may help with the Statement later? Is it not a fact that the Falkland Islands became British territory under the sole sovereignty of Great Britain years and years before the Argentine secured its independence from Spain?
LORD CHALFONT: My Lords, I think it would be unprofitable to enter into an historical analysis. I can only repeat what I said yesterday. We have no doubt about our legal title to the sovereignty.
VISCOUNT ST. DAVIDS: My Lords, is my noble friend aware of the occasion in recent history when another British Government were not nearly so kindhearted towards the inhabitants of other islands as the present Government, and gave away the Los Islands to the French, not only without consulting the inhabitants but against an express petition on the part of the inhabitants begging to remain British?
LORD CHALFONT: My Lords, my noble friend's historical knowledge is deeper and wider than mine. I am most grateful to him for that useful piece of background information.

ARMS SUPPLIES TO SOUTH AFRICA
THE MARQUESS OF SALISBURY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
e Question was as follows:
ask Her Majesty's Government which are the Governments who are at present supplying arms to the Union of South Africa; and, if they have not that information, whether they will take the necessary steps to obtain it.]
THE MINISTER OF STATE, FOREIGN AND COMMONWEALTH OFFICE (LORD SHEPHERD): My Lords, the contents of defence contracts entered into between foreign countries are normally confidential. However, if the noble Marquess would refer to a United Nations document of September 9, 1968 (a copy of which is in the Library), he will find some examples there of supplies claimed to be reaching South Africa from various sources.
THE MARQUESS OF SALISBURY: But, my Lords, we have our own representatives in the Union of South Africa. Does the noble Lord really mean to say that they cannot inform the Government? The United Nations at the moment is a sort of diplomatic alibi; everything is unloaded on to the United Nations. I ask: Have the Government got this information, and, if so, will they give it to your Lordships?
LORD SHEPHERD: My Lords, I am sorry the noble Marquess feels that my Answer is defensive. I put the last part in my Answer merely to give him some help and information. I would refer the noble Marquess to the first part of my Answer, which is that these contracts between foreign countries are nomally confidential, and, therefore, if this information is confidential it is difficult for Her Majesty's Government to obtain it, and certainly to disclose it.
THE MARQUESS OF SALISBURY: My Lords, I asked, not whether it is confidential, but whether Her Majesty's Government knew which these countries were. I ask them again: Do they know which countries these are?
LORD SHEPHERD: My Lords, we have had reports of certain countries supplying information, but sine we have no concrete evidence to that effect, I think it would be wrong for me to disclose it as though it were a source of truth.
THE MARQUESS OF SALISBURY: But, my Lords, the noble Lord has already said that it has been disclosed in a resolution of the United Nations. Why can it not be disclosed to the House of Lords?
LORD SHEPHERD: My Lords, if the noble Marquess wishes it, I will read out the report to which I have referred, but it would take a great deal of time. May I suggest to the noble Marquess that he reads this report, which, as I say, is in the Library, and if he then requires further information I will endeavour to give it to him.
THE MARQUESS OF SALISBURY: My Lords, is it not the fact that to give the information in this House to-day would be very embarrassing to the Government, and that is the reason why they have given the Answer they have?
LORD SHEPHERD: My Lords, the noble Marquess has been a Minister for many years, and he knows that information that is confidential must remain confidential. As I say, information of an arms contract between one foreign country and another is normally confidential.
LORD FRASER OF LONSDALE: My Lords, if the noble Lord is unable to give the information to the House of Peers, can he at least assure us that he will get the information through the Secret Service, or through other channels, so that the Government may be aware of their unwisdom, and even futility, in this matter?
LORD SHEPHERD: My Lords, clearly it is not for me in your Lordships' House to say what is available to Her Majesty's Government from secret sources. But if there is that information, clearly I could not disclose it to the House.
LORD BLYTON: My Lords, is my noble friend aware that we are pleased with his answers to questions, especially coming from the Rhodesian and South African Lobby?
BARONESS SUMMERSKILL: My Lords, would my noble friend not agree that it is quite normal for a Minister to withhold information if he feels that it is not in the public interest to divulge it?
LORD SHEPHERD: My Lords, I am glad that my noble friend has reminded the House of this fact.
LORD CARRINGTON: My Lords, why is it not in the public interest to divulge it? Is it not a fact that Her Majesty's Government are not supplying arms to the Union of South Africa because of a resolution of the United Nations? Is it not of some interest to us, who are losing a great deal of money therefrom, to find out what countries are violating the resolution of the United Nations?
LORD SHEPHERD: My Lords, no country has violated the resolution of the United Nations. As the noble Lord, Lord Carrington, will perhaps remember, this is not a mandatory resolution. It is a resolution which calls upon countries in the United Nations to adopt something, but they are not required to do it. Her Majesty's Government have thought it right, with other countries, so to do. In regard to the confidential information, this is confidential between two foreign countries if they are supplying arms. If we were aware of it, we should not disclose it.
LORD MERRIVALE: My Lords, could I ask the noble Lord a question similar to the one I asked last Thursday, which he then said he would answer if I put down a Question; namely, whether he can say to what extent French influence and interests are replacing those of Britain in the Simonstown area, and what is the loss to this country arising from the French submarine-building programme for South Africa? Her Majesty's Government must have those figures, because I imagine that the South African Government first approached Her Majesty's Government in regard to the supply of these submarines.
LORD SHEPHERD: My Lords, I have not the information for which the noble Lord has asked, and I repeat that if he will put it down as a Starred Question, I will seek to reply to it.
LORD GRIMSTON OF WESTBURY: My Lords, whatever the position—
LORD BALFOUR OF INCHYRE: My Lords, as there is obviously a great deal of interest—
LORD SHEPHERD: My Lords, I cannot possibly answer if two questions are to be asked at the same time.
LORD GRIMSTON OF WESTBURY: My Lords, whatever the position in regard to other countries, Her Majesty's Government are in this position: that, having imposed a savage squeeze and freeze on the people of this country, they expect the country to follow them in the export drive when they deliberately throw away the chance of exports for the defence of a vital British interest.
LORD SHEPHERD: My Lords, if the noble Lord will perhaps do a little homework in regard to trade statistics, he will see that our exports to South Africa are holding up very well, despite the deflationary programme in South Africa, and also that South African export trade with this country is substantial and is increasing. Therefore, this policy has not affected the export trade of this country to South Africa.
LORD GRIMSTON OF WESTBURY: My Lords, is the noble Lord aware that it is not a question of homework? If we exported these necessary arms, the trade figures would be far better.
LORD BALFOUR OF INCHRYE: My Lords, as there is obviously a great deal of interest in this Question, would the Minister kindly ask our Representative in South Africa to ask the South African Government whether they will give this information?—because, after all, if the Legislature asks for it it is the duty of the Executive to try to satisfy the Legislature.
LORD SHEPHERD: My Lords, the Government are clearly answerable to Parliament, but it is for the Government to decide how best to conduct their relations with a foreign country. I cannot believe that anything would more antagonise the South African Government—which clearly some noble Lords appear to seek—than to ask them for information which is confidential between two countries.
LORD BARNBY: My Lords, the noble Lord has been good enough to indicate

173
a deposit in the Library. Could he say whether that information extends to deals with Portugal, since those two countries in all discussions here have been bracketed? Is the information which he has reported also there with regard to Portugal? If not, could he supply that information?
LORD SHEPHERD: My Lords, the noble Lord will see the reports. He will see that these are reports which have been made by various member countries of the United Nations to the United Nations. That is the basis. They are fairly extensive, and I suggest that the noble Lord reads them.
LORD BARNBY: I thank the noble Lord.

BUSINESS
LORD BESWICK: My Lords, as my noble friend has already said, the noble Lord, Lord Chalfont, will be making a Statement about the Falkland Islands at a convenient moment after 3.30 p.m. I would also take this opportunity of saying to the noble Lord the Leader of the Opposition that I am sorry if he was inconvenienced yesterday by the order of the Statements which I gave, but some special factors were involved.

POVERTY IN BRITAIN
2.52 p.m.
LORD BEAUMONT OF WHITLEY LORD BEAUMONT OF WHITLEY rose to call attention to the serious extent of poverty which exists in Britain; and to move for Papers. The noble Lord said: My Lords, in rising to draw your Lordships' attention to the extent of poverty still existing in Britain to-day, I am aware, not least by the number of your Lordships who have put their names down to speak in this debate, of the wide knowledge of and concern for this subject displayed by Members of this House. Nevertheless, I think it is true that the extent of poverty is not understood by large sections of the public as much as it might, and indeed as much as it should, be.
It is unfortunately true that, in spite of growing efforts of a number of passionately devoted individuals, largely
174
connected with the voluntary societies of one kind or another—and here one must mention the Child Poverty Action Group, Shelter, Disablement Income Group and others of this kind—a large portion of the British public does not really believe that there is any serious poverty left in Britain. This is partly because they do not want to know. That is a very human reaction, because people do not like to know about the seamier side of life if they can help it. But I cannot help thinking that to a certain extent politicians are to blame. Because people are reluctant to know, there is the more need for politicians, whose business it is, to highlight these problems. One of the tragedies of the poor to-day is that, partly because of the comparative success of the trade union movement in this country, there is really no longer any great interest or Party which identifies itself entirely with the poor. To put it bluntly, my Lords, we are reaching a situation where there are not very many votes in poverty, and this is a tragedy.
In saying this, I am not discounting or failing to recognise the large number of individuals, of all Parties, who have interested themselves in this field and who are dedicated to the eradication of poverty. I think one would here want to pay a special tribute to the Labour academics such as Professors Abel-Smith, Titmuss and Townsend, without whom our knowledge and concern for the poor in this country would be much less than it is, and also the individuals concerned both in this House and the other House, of both Parties. To name them would be invidious and there would, I am glad to say, be too many. But I feel that although one could name them, they stand out against a general background of apathy in this country.
It is not my business to-day to go into the details in the field of poverty. I hope that the speakers who follow, with their great fund of individual experience and expertise, will be able to bring the microscope to bear on a number of individual situations. For we must not forget in this debate, when we may be handling large statistics, that each statistic is a case of human deprivation and human misery. It is my business to-day, I think, merely to set the scene for the debate and possibly, if your Lordships will bear with me, to produce one or two broad

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solutions to the problems. To start with, there is the definition of "poverty". To a certain extent, poverty must always be a relative concept. Neither our country nor any section of it can begin to compare, in terms of lack of goods and services, with some of the developing countries; and the levels of poverty, the levels at which poverty begins, will always be rising in the developed countries, and we hope also in the developing countries.
There is nevertheless a sense in which povery can be considered to be absolute, and you are poor in this absolute sense if you have not enough money, if you cannot afford to clothe yourself properly, to feed yourself properly, to warm yourself properly and to house yourself properly. About the numbers who really fall into this category there will always be dispute, but in our consideration of poverty we must bear in mind more people than actually fall strictly into this category. For instance, some people do not nourish their family as well as they might because they spend their money unwisely. "Unwisely", however, is a term we should do well not to use too freely in this context. The family which skimps on the right kind of food in order to have a television set is no doubt behaving unwisely, but it is hardly for us who do not have to live in the mind and soul destroying conditions of poverty to say categorically that these people should deny themselves a few things that make their lives bearable and which enable them to escape from the life they lead for a few hours.
There used to be a saying that to get drunk was the quickest way to escape from Manchester on a Saturday night. If I may take this is an analogy, at the risk of offending Mancunians who may be here, it may be the only way to escape from Manchester on a Saturday night if you do not have the money for the public transport, and to escape from Manchester on a Saturday night may be a psychological necessity as important as some of the physical necessities we are talking about. Equally, it is not for us to blame the people who do not plan wisely ahead. Anyone who has come into contact with serious poverty knows that on the whole a lot of these people do not plan ahead because hope has disappeared, because to-morrow will
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be as foul as to-day, and the day after will probably be fouler, and they do not even want to think about it. In the words of Martin Luther King:
"It is a cruel jest to say to the bootless, 'You must lift yourselves up by your own bootlaces'."
Again, there can be argument about whether a great deal of poverty is caused by the social inadequacy of families; but here it is an open question as to whether poverty causes inadequacy or inadequacy causes poverty, or whether, as to a certain extent must be true, it is a vicious circle. In this connection, I am glad to know that the noble Lord, Lord Donaldson of Kingsbridge, is going to mention the work of that most worthy and understanding of charities, the Family Service Units. As we will see, a certain amount of poverty is caused by ignorance—ignorance of steps that have already been taken by various Governments to relieve poverty, but that ignorance is in itself a factor which Governments must take into consideration.
Again, many old people are imbued with a pride that makes them reluctant to claim benefits. Anyone who has had to deal much with poverty, whether it be with constituents or through Government Departments or as a clergyman, has come across this. We also know that to a certain extent this ought to be deplored. From a Christian point of view, Charles Williams has said:
"He who will not accept dependence cannot learn nor love and in the end he cannot live."
But this again is something which must be taken into consideration and it is not for us to knock away the prop of self-respect, however misconceived, from those who get little respect from the people around them.
In other words, there are two forms of poverty. There are those who are genuinely appallingly badly off under present arrangements and who, by using the maximum information available and by not wasting any of their money on physical non-essentials, would still be poor. This is a body of some size—probably bigger than the statistics show, for even to-day the number of down-and-outs estimated by the Simon Community is 100,000, a sizeable proportion of whom slip through even the statistical nets of our society. There is, in addition, that much bigger group of those who, if they

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took the widest possible advantage of all the provisions that there are at the moment, would be above the poverty line but who for some reason or other do not take this advantage. For them, too, we must have a care.
Luckily the care of Governments of all complexions over a number of years has meant that we are not confronted with a large, amorphous mass of poverty. We are able largely to identify the groups into which almost all the poor fall, and therefore to produce, at any rate in theory, solutions to deal with the different problems of those groups. Exact numbers, as I have said, are extremely difficult to arrive at and figures are already out of date by the time they are produced, but working on the basis of the Townsend and Abel-Smith Survey of 1960 and the 1966 Report on Circumstances of Families it would appear probable that something in the nature of one in ten of the people in this country fall into the poverty bracket.
Following Townsend and Abel-Smith, the main categories are, first, families where the head is at work but where he either has a low income or a large family, or both; second, old age pensioners; third, families without fathers to support them; fourth, families with members who are permanently sick, and fifth, families where the father is unemployed. In all categories better organisation and publicity by the Ministry of Social Security would improve the situation to some extent. I am well aware that this is being worked on, but, if I may say so, I do not think it is being worked on quite hard and fast enough. For the low paid and unemployed the total solution would need changes in other areas of policy. In the field of social security, removal of the wage stop and relaxation of the rule that anyone working full time cannot benefit from benefits would be a considerable help. The obstacles to these changes are well known and therefore we must look for a different solution.
However, I would ask the noble Baroness who is to reply to this debate one question, and I apologise for springing this one on her without warning. I do not wish to press her for an answer to-day, but would the Government consider lifting the wage stop for a fortnight over Christmas? I am told that this might be administratively practicable, it
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would not be difficult and would not really breach the principles concerned. It would make all the difference over this Christmas to a large number of families and, in particular, a large number of children. It is probable that there are half a million people living in poverty as a result merely of the fact that their wages plus any benefits that they may get in the way, for instance, of family allowances do not add up to the amount of money needed to keep the family decently fed, housed and clothed.
I suggest that one answer to this problem, as I am sure many of your Lordships will agree, is the minimum wage; but there is no reason why the minimum wage should be as high for the unmarried man as it is for the married ma a with several children, and I think there is a double way forward here. A great deal of the poverty of the low wage earner occurs where there are large families. Karl Marx stated an important principle when he urged the need to differentiate what people earn from what people need.
"From each according to his ability, to each according to his needs"
is to-day an idealistic social charter, but one need not go as far as that to realise that the principle can be usefully adapted to-day.
Let us separate what a job is worth in the open market and what a man is worth from what his dependants need to live on. If the State will guarantee a minimum standard of living for the children, then the minimum wage needed for the man himself becomes lower. This is an important way of applying selectivity to the basic wage. So the first solution which I am putting forward is that of a realistic increase in family allowances, to include the first child as well as the rest, at a rate which would ensure basic subsistence, varied according to age and carrying through to those children who stay on at school beyond the school-leaving age.
I am aware that this is political dynamite and is said to be highly unpopular with the electorate. I maintain that there is no other real solution, and the objection to it, that it encourages large families, must be marginal in a society where large families are becoming exceptional. As much money as possible to pay for this can be clawed back from tax allowances, and once it had been established there would be little obstacle

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to the introduction of a minimum wage which, because the responsibility of children was dealt with otherwise, would be much less than it would be if children's allowances were not dealt with in this way. If these solutions were adopted, then the problem of families where the father is unemployed would disappear. Poverty here is often the result of the wage stop, and if there were a realistic minimum wage together with realistic family allowances this situation would not exist at all.
With old age pensioners the problem is largely one of publicity, although here a larger basic pension as a right, related to the average national wage, would carry us forward. A particularly difficult poblem has been raised by families with members permanently sick. As noble Lords will be aware, although there are special allowances for the blind and for those injured as a result of their work, others disabled or chronically ill are entitled to much less, both during illness and after, and cannot get any compensation for loss of earning power. Certain people cannot get any benefits at all—for instance, the disabled housewife supported by her husband. As we are now beginning to be aware through the efforts of the Disabled Income Group, this can cause extreme and harrowing poverty of the worst possible kind. It is extremely good news that the Ministry of Social Security has ordered an investigation into this problem and into the numbers concerned. It is nothing less than a national scandal that nothing should have been done about this before now, and it is to be hoped that action will be taken as speedily as possible.
There is much more that could be said and I hope much more that other noble Lords are going to say. I am no more unaware than the rest of your Lordships, including the noble Lords on the Government Front Bench, of the difficulty of paying for the schemes necessary to put these problems right. I am aware that it will take time. What I and my noble friends would ask for is two specific commitments. The first is the easiest: it is a commitment which would say that this Government, and indeed all political Parties, would establish a programme for the eradication of poverty from this country over a certain period of time, and
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that they will pledge themselves to the attainment of certain goals which they will continue to put in the forefront of their programmes. The second is an acknowledgment that this is the first priority in our national life.
My Lords, I am not speaking as someone who has a particular axe to grind on the subject. As some of your Lordships will know, the subject I specialise in is education. Therefore I am not coming to you, as many of us are sometimes tempted to do, saying that whatever is our pet subject is the most important of all and everything else must give way. But even from the point of view of self-interest we cannot let this problem take a back seat. To wipe out poverty in this country would take a lot of the heat out of the racial question. It would also be a necessary preliminary step towards persuading the people of this country that we must make a massive effort to help the developing countries, one of the most important, if not the most important, of the aims of our foreign policy over the next fifty years. And even in education we know that poverty is one of the most important factors inhibiting the full use of the talent of this country. And so to those who say that we cannot afford to wipe out this poverty, my answer on this plane is the Chinese proverb:
"It is no economy to blow out the candle early if the result is twins."
But more importantly, I say that no country which regards itself as civilised, no people who regard themselves as Christian, no nation which regards compassion as a worthwhile value in human life should put up with the kind of poverty which still exists in Britain and which has been wiped out in countries smaller and less great in any conventional sense of the term than our own. These statistics, with their heartbreaking individual stories of men and women and children warped and ruined for life by poverty, are a blot on our country, a blot paid for every moment of the day in suffering of individuals, and it should be the aim of us all to wipe it out in the quickest possible time. In the words of Professor Townsend:
"The ultimate test of the quality of the free, democratic and prosperous society is to be found in the standards of freedom, democracy and prosperity enjoyed by its weakest members."
My Lords, I beg leave to move for Papers.
3.12 p.m.
LORD SANDFORD: My Lords, it does not often happen that a debate in your Lordships' House is started off by two inferior clergymen in succession, but the occasion gives me special pleasure as it falls to me to thank the noble Lord, Lord Beaumont of Whitley, on behalf of the whole House for having introduced this Motion. I think your Lordships would agree that he has done so in a thorough manner and focused our thoughts most effectively on this important subject, a subject which deserves all the attention that our hearts and minds can give to it. Before I start on my own speech I should like to mention to those of your Lordships who received the list of speakers earlier this afternoon that the noble Lord, Lord Sandford, has no intention of making two speeches; the noble Lord who is winding up from this Box from this side is my noble friend Lord Drumalbyn—a great relief to me and no doubt to your Lordships as well.
It is often our just boast that in your Lordships' unreformed House we can bring to bear upon almost every subject first hand knowledge of it, but I doubt whether this is actually true to-day. I must certainly disclaim it for myself because, apart from some few months as a very junior naval officer in Alexandria at the beginning of the war, when income certainly never came anywhere near to matching expenditure. I have always been reasonably comfortably off—and I doubt whether the noble Lord, Lord Beaumont, has any experience of the dole either. But if there are other noble Lords here who have such experience I hope that they will be able to bring themselves to speak of it, because this is a topic on which the voice of first-hand experience is needed to balance the voice of statistics, on which we all so much have to rely.
However, what we lean do—and I should like to go a little further than the noble Lord who opened the debate—is to get the problem into perspective: first of all, poverty in Britain in relation to poverty elsewhere in the world. It is certainly right for us to be concerned with our own poverty here because this is what we can influence most easily, and the acuteness of our own people's poverty is made particularly severe by the fact that they have to endure it surrounded
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by affluence. But the point at which we draw the poverty line here in Britain is at an income level which is, in real terms, ten times higher than the income level of the poorest countries in the third world—Africa, Asia and Latin America. And this has to be borne in mind.
Secondly, our poverty now compared with our poverty in the past. It is as well to remember, I think, that it is only a generation ago, in 1931, that we had 3 million unemployed. At that time that meant one-fifth, 20 per cent., of our whole working force out of work; to-day what is causing concern is a proportion of 2½ per cent. out of work. Only just over another generation back beyond that, at the turn of the century, Charles Booth was reporting that in London he considered 30 per cent. of the population to be living in poverty, and Seebohm Rowntree, taking a rather more precise survey in York, described primary poverty as affecting 10 per cent. of the population and secondary poverty another 18 per cent. That state of affairs to-day would mean 16 or 17 million people deserving the dole. In fact about 2 million (in very round figures) are now receiving supplementary benefit.
Thirdly, another point of perspective, compare our problem in this country with the problem of poverty in another affluent country, the United States. For all its immense resources, the United States, a country which is certainly going to beat us to the moon, is way behind us in this race, with 18 million people below their official poverty line w rich is broadly comparable to our own. This is getting on for 20 per cent. of their population. We are talking to-day about people in Britain in a similar plight, a sector of our population which I would not put as high as the noble Lord, Lord Beaumont, did: I should have said it was something like 5 per cent. of our population. Shameful as it is to have 2 million people drawing supplementary benefit in these Gays of affluence, we have made some progress with the problem, and we have made it faster than some others. But if we have done this, surely it is a spur to make better progress now.
And so I turn to the problem itself. So far as we have accurate statistics, the problem before supplementary benefits and family allowances were raised recently was as it has been described by

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the noble Lord, Lord Beaumont. We have two documents to refer to. The first is, Circumstances of Families, and here in the Report (if I may just summarise) we had 145,000 poor families without fathers, 160,000 poor families with fathers out of work or off work, and 140,000 poor families with fathers working but unable to make both ends meet. That has all been improved by the recent additions in family allowances. But we are still left with something of the order (one cannot be sure, and if the noble Lord, Lord Kennet, has further more precise statistics it would be helpful to have them early in the debate) of 200,000 to 250,000 children in families still below the poverty line.
To these we need to add the elderly. When the Report, Financial and Other Circumstances of Retirement Pensioners, was published a year before that, we had one and a quarter million elderly people in retirement and in receipt of supplementary benefit—I am not saying that is the same thing as living in poverty—and, in addition, three-quarters of a million whose pension and savings were not meeting their needs but who, for one reason or another, were not at that time receiving supplementary benefit though entitled to do so. Again, if I may suggest it, I think it would be helpful to have an indication from the noble Lord, Lord Kennet, at an early stage in this debate, as to the success the Government are having in reducing the numbers of people in this last category.
So much for the statistics. I will not go into any further detail now because the noble Lord who opened the debate has outlined the problem well and the noble Lord who is to follow me is in a much better position than I am to supply us with up-to-date statistics. The only other factor that I should like to mention, and invite Lord Kennet to correct if it is quite wrong, is that supplementary benefit is now running, I think, at the rate of a little under £400 million per annum. This is a point to which I shall return in a moment.
I should now like to spend a moment or two, after that reference to the statistics, in trying to get the problem into more personal terms. I am talking now about families known to me personally that I have had occasion to visit within the
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past week or so. Here, in passing, I should like to say how good it is to receive in the annex in this latest Report from the Ministry of Social Security some case histories which give a personal note to what otherwise are rather arid statistics. This is a new feature, I think, and I hope it will be extended.
I deal now with two families whose story it seems to me might throw some light on and help to give a framework to this debate. I, of course, give them a little anonymity and disguise. Take Mrs. W. She has a husband on the disabled list, seldom fit enough to work, out of work now and for some weeks past, ill at home at present. There are eight children in the family. There are twin boys of three at home all the time, and there is one daughter at home sick at the moment. The Ws. are housed by a housing trust in property which is due to be demolished quite soon and has been suffering from planning blight for, I should think, four or five years. The basement has already had to be abandoned; the furniture is of the barest. Two items have lightened the load of this family: one is the increase in family allowances; the second the fact that the eldest boy has got work and he adds quite a bit to the family income without adversely affecting the scale of benefit. He has made himself responsible for his brothers' and sisters' pocket money and for his own clothes.
On the debit side—and this may seem a small thing—the last time the elder girl went to the chemist for a prescription he pointed out to her that she was no longer young enough to get one free. This has now to be sorted out. But Mrs. W. is cooking for eight children, looking after a sick husband and putting up the first bit of wallpaper that her kitchen has seen for many years, and she can ill spare the time to get away and do battle with officials about prescription charges or anything else. Yet it is small items like these that fatally upset Mrs. W's precarious budget and start things like rent arrears and everything else that follows from that. And the winter is only just beginning.
A family such as this illustrates, I think, the importance and urgency of further study of this question of disability and disablement, because that is what is affecting this family; and it will

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be helpful to know from the noble Lord, Lord Kennet, when we can expect the result of the current survey in this field. At the same time, I should like to ask whether we can look forward to regular surveys covering all these different fields, on a continuing basis and not just on an ad hoc basis when some particularly severe problem arises.
Take another case. I will call him Mr. K. His wages are, at the best of times, never high. His work is seasonal, high in the summer and low in the winter at a time when fuel bills are beginning to mount up. He has been on short time for several weeks. He is not working at all at the present time; he is drawing supplementary benefit, but that is cut off by the wages stop before Mr. K's winter budget can be balanced. All the children are at school, and the increase in family allowance has therefore helped out there, too. But Mrs. K. has chronic bronchitis, which comes on in the winter and especially then, prevents her, although she is fit in other respects, from adding to the family income. Rightly or wrongly, Mrs. K. believes that all her children are prone to the same chronic illness, bronchitis, and when in cold weather it proves impossible to heat any rooms beyond the kitchen her anxiety about their health is naturally acute.
I could go on with these case histories, but I have mentioned only two as illustrating the importance of looking into this question of disablement and demonstrating that there is nothing dramatically wrong here, nothing newsworthy; no one has had had a gas explosion or anything really dramatic. The Ws. and the Ks. are typical of the families we are thinking about, just keeping their heads above water. But any further small setback may sink them and break them. Nothing in sight at present will set them up in life with any real sense of self-respect, security, freedom or choice.
One can consider some suggestions for improving the lot of our poorest families in the short term, and I will do that. But what I really want to do after that is to consider some of the underlying causes. I myself cannot complain, as some of my noble friends feel that they should, about the recent increases in the scale of family allowances. They have been a great boon to the poor families receiving
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them, and, given the facts presented by these two reports on the state of our poorest families, coupled with the Government's mismanagement of the economy and their relative lack of really radical research and socialist Clinking about this problem, these measures are the best kind of crash programme that could be expected.
The harmful side effects, the duos and strain that is caused by the recoding work that has to be done in tax offices, which has had a bearing on some of these families, the fact of the resentment that this increase has to be borne by other families and not across the board, are not to be ignored. But it ought to be possible next time to devise a better way of paying benefits to our poorer families which will succeed more than this has in lifting all the families concerned in this group out of their poor condition and without these bad side effects.
The Conservative Party has prepared one scheme, Must the Children Suffer? which has attracted a number of comments from Government Benches in another place. But each time the criticism is of a different kind. It would be helpful to-day to know what the Government think about this particular way of dealing with this problem. But benefits to help the children are not enough. Is it not possible to allow greater discretion to the Ministry of Social Security and their officers in the distribution of benefits, and particularly of supplementary benefits? I could not at the moment go as far as the noble Lord, Lord Beaumont, and urge the abolition of the wage stop. I should have thought that the reasons for retaining it have been argued well enough, and the difficulties of lifting it for a short period seem to me at first sight to be extremely daunting, if not insuperable.
LORD BEAUMONT OF WHITLEY: My Lords, if the noble Lord will forgive me, when he reads Hansard to-morrow he will see that I did not advocate the abolition of the wage stop.
LORD SANDFORD: My Lords, I thank the noble Lord for that intervention. But I think I agree with the noble Lord that it is bad economics, among other bad things, to apply the rules of the wage stop too rigidly. For example, if Mr. K, whom I was just talking about, were to desert

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his wife, or Mr. W, whom I was also talking about, were to commit a crime in a desperate attempt to get out of his circumstances, the full scale of supplementary benefit would eventually become available to Mrs. K, and if Mr. W went to prison the cost to the taxpayer would be increased by something of the order of £10 to £15 a week. So is it worth striving for small economies of a few shillings here and there when a little more flexibility would go so far to reduce risks like these and to hold families together?
I hope that the noble Lord, when he follows me, or the noble Baroness, when she replies to this debate, may be able to tell us of the developments in this direction that have followed in the year since this Report on the administration of the wage stop was published, because I think the developments there are promising and helpful. The same applies to homes and housing. Is it right to be quite so strict and rigid in collecting rents punctually from these very poor families? In our courts it is mandatory, I believe, in some cases, and quite common practice in others, to receive a social report before passing sentence. Are our social services so unco-ordinated that action by local housing authorities against poor tenants in arrears of rent cannot also wait for a social report to see whether the action proposed is fair and sensible in all the circumstances?
This brings me to my last proposal for the treatment of the present symptoms of proverty. Surely it should be possible to bring into this problem more of the personal touch. All the devices available for maintaining income, and better and more selective ones, if such can be devised, are needed; but poverty, whether of families or of pensioners, cannot be cured over the counter. The more extreme it is the less can it be so cured. So many small sudden setbacks can so quickly become major and lasting disasters.
These very poor families and these very poor lonely old people really need a visit a week from someone. Many of them, thank goodness! get it from their friends and neighbours, and from their families; but all of them need it, and it should not be too difficult to ensure that they all get it. I am not asking for a visit a week from a doctor or a health visitor, or from a case worker or an official—
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there are not enough of these professional people to go round. In any case it is not necessary; nor is it a good thing for the whole of this problem to be handled by officials. But a visit from someone who is in touch with experts like this, someone who can provide an early warning defence against the first onset of trouble, ought to be possible. Someone like this is surely worth more than all the experts and the benefits put together, if the experts and the benefits come into action too late. I hope that this is the kind of development that will gain encouragement from the implementation of the Seebohm Report which, if I may remind your Lordships, still awaits endorsement by the Government.
I should like now to turn to the question of prevention, as well as cure, because I do not think that tinkering like this is ever going to solve this problem. We need to go more deeply into it: we need to look further into the causes, and to tackle them, as well as treating the symptoms. Looking at the whole of the social work field I would say that this business of what the doctors call "prophylaxis" in social work is still really in the pre-historic age. For field workers in the social services it is as if doctors in the Health Service had to cope in surgeries and hospitals without any preventive action like vaccinations against smallpox, without any immunisation for diphtheria or polio, without any mass X-ray services, without any school medical services, without any measures of public hygiene. That, of course, the medical profession would now think of as being absolutely hopeless, yet almost all our social workers are in this sort of situation. They are grappling with social problems that are already serious, if not desperate. Only too few are engaged in studying and prevention of the causes, and what can be done to stop some of these problems from arising at all.
My Lords, let me just illustrate one or two examples of what I mean here. One underlying cause of poverty is an unstable marriage, a home in which husband and wife are at loggerheads, in which one deserts the other, or to take an extreme case (this accounted for 145,000 of the families which this Report found to be in poverty), families in which there is no father at all. I would judge—and the noble Lord, Lord Kennet, will correct me if I am wrong—that something of the

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order of £50 million is spent in assisting fatherless families. Two to three million pounds is spent in legal aid helping couples to get divorces. How much is spent helping young people to understand and learn the difficult art of "living happily together ever after" when they are married? Compared with the figures that I have just given, the amount, although it is more than it has been in the past, is precious little. A grant of £65,000 to all the voluntary agencies—such as, for example, the National Marriage Guidance Council—who do the work in this field. And their efforts have to counter a massive campaign in marketing everything under the sun that encourages all the misunderstandings and illusions about sex that are possible.
Take another example. One underlying cause of poverty is disorganised, casual and seasonal working conditions. One hears a good deal about the economic damage done by unofficial strikes, for example, in the car industry, the docks, or the construction industry; but the domestic damage in the families of the lowest paid workers due to continuous interruptions and changes of job, and ups-and-downs in wages, is very serious indeed. There was once a time when the poor were the beneficiaries of industrial action. My Lords, I believe that they have now become the first casualties.
One further cause underlying a good deal of the poverty that we see to-day, which makes it much harder to bear, is the lack of community and community care. Some years ago your Lordships will remember the noble Lord, Lord Taylor, confessing that a survey he had had undertaken revealed that, because of this factor, people living in the slums of Bethnal Green regarded themselves as happier than those who were living in the New Town of Harlow, of which he was so proud. The noble Lord, Lord Rhodes, the Lord Lieutenant of Lancashire, talking last week about slum clearance in the North West, warned us of the same thing.
My Lords, the concept of community care is a fine one. It has come into social work thinking in recent years, but ever since the war we have been bulldozing it into the ground with each group of slums that we have been clearing without the faintest thought or idea as to how to put it back again into tower
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blocks of flats, new estates, or New Towns. The lack of this community care has the most serious effects on our poor families. Some of this will be corrected as the various priority programmes that the Government have set afoot get under way: priority programmes in certain urban areas for houses, others for schools, and another introduced last week for social need. But the figures involved here are tiny—of the order of, I think, £5 million per annum, in the case of the housing programme; £6 million per annum, in the case of the programme introduced last week, to be set against £400 million per annum being spent on supplementary benefits. I am sure that these proportions are wrong. I say nothing about housing, one of the biggest factors in the whole of this poverty field, because my noble friend Lord Drumalbyn will be dealing with that when he comes to wind up from d is side at the end of the debate.
I will end by saying that when the Labour Party came into power four years ago they led us to expect that they had new policies, particularly new social policies, ready to swing into instant action. Those were the words of their Manifesto and their speeches, so w have good reason to complain of the delay in bringing these plans and policies, which were supposed to be so ready, into action. We have no reason to complain now that, after four years of dither, they are introducing policies put forward years ago by the Conservatives. I quote from our own Election Manifesto:
"Combine the Ministry of Health, the Ministry of Pensions, National Insurance and National Assistance".
They have just done it, having taken two bites at it.
"Establish inspectors of welfare".
They have just begun to do it, and the first reference to it is to be found on page 23 of this Report.
"Attach a research organisation to the Ministry of Social Services."
That, also, is in the Conservative Manifesto. The Government need to do that next, and they have already begun by getting out some plans, about which we shall be interested to hear.
"Give special help to areas where there is the most need."
Their Bill to do this was this week read a second time in another place. It is

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a late, small, slow move, but we live in days when we have to be thankful for small mercies. Meanwhile, as the noble Lord, Lord Beaumont of Whitley, has done well to remind us, the poor are still very much with us.

THE FALKLAND ISLANDS
3.44 p.m.
LORD CHALFONT: My Lords, with your Lordships' leave, I should like to repeat a Statement which is being made in another place by my right honourable friend the Minister of State for Foreign and Commonwealth Affairs. May I begin the Statement by saying that when many times during the Statement my right honourable friend refers to "my noble friend", he is referring to me. The Statement is as follows:
"In accordance with the undertaking given to the House yesterday, I have now enquired into statements made in the House yesterday about Press reports of remarks attributed to my right honourable and noble friend when in the Argentine. I have discussed this fully with my right honourable and noble friend and I have now received from Her Majesty's Ambassador the relevant Argentine Press reports of the Press Conference in question.
"The statement to which reference was made yesterday was made in the context of creating a framework in which the obstacles effecting ordinary relationships between islands and mainland will be overcome, particularly with regard to communications and economic and cultural links. In this context, and here I quote the relevant extracts from the two Argentine newspapers Clarin and Nacion:
'Question: Does this mean then that the problem would be to convince the islanders?
'Answer: I think it is something which depends not only on Great Britain but that Argentina also has to solve the problem. Britain's relations with the islands are very good so it is a question of Argentina promoting good relations between herself and the inhabitants of the islands.'
"On the issue of sovereignty, again I quote relevant extracts from the Argentine newspapers concerned:
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'Question: Has a date been fixed for the change of Sovereignty?
'Answer: We are not thinking in such terms of a change of Sovereignty. This is a question which depends entirely on the wishes of the islanders.'
"My right honourable and noble friend confirms the accuracy of these reports."
May I break off there to assure your Lordships that I do indeed confirm the accuracy of these reports. To continue with the Statement which is being made in the other place:
"The honourable Gentleman the Member for South-East Essex suggested that my right honourable and noble friend said
'that Britain and Argentina may make a joint effort to convince the islanders that a change of status would be convenient.'
"My right honourable and noble friend made no such statement.
"On all points in the Falklands and in the Argentine, as I repeatedly told the House yesterday, he made it clear
'that there can be no transfer of Sovereignty against the wishes of the islanders.'
"The issue was further raised yesterday of the present state of the discussions with the Argentine Government. Since my right honourable friend the Foreign and Commonwealth Secretary discussed these problems himself with the Argentine Foreign Minister when he was in New York in October, the House would, I know, wish to have a statement from my right honourable friend as soon as he returns from India. I understand there has been discussion about this through the usual channels, and my right honourable friend will be making a Statement next week."
That, my Lords, is the end of the Statement.
LORD CARRINGTON: My Lords, the House will be grateful to the noble Lord, Lord Chalfont, for having repeated that Statement, but I must honestly tell him that it does not greatly reassure me. There is the assumption in one of the questions which he quoted that only the date for the change of sovereignty had to be fixed; and in regard to the question put to the noble Lord that the problem would be to convince the islanders, surely "the problem" must

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have referred to the question of sovereignty and nothing else. Even though his answers to these questions were unexceptionable, I must say that the whole trend of that report fills me with the greatest misgivings.
May I ask the noble Lord this question? Has he observed that the Argentine Foreign Minister has said that he would not sign any agreement which does not recognise Argentine's sovereignty over the Falklands? In view of this, and the fact that the inhabitants have repeatedly said that they wish to remain British, will he tell the House what on earth is the point of continuing the discussions? Does he not realise that to remove the question of sovereignty from the agenda is just about the only way that will allay the deep suspicion that we have of the motives of Her Majesty's Government?
LORD CHALFONT: My Lords, if I may refer first of all to the comments of the noble Lord on the Statement, I can only tell him that when the question was put to me that the problem would be to convince the islanders, my understanding of it was the problem of communications and economic and cultural links, because that is what I had been talking about with correspondents up to the moment that that question was put. I can therefore assure the noble Lord that my answer referred to that problem and not to the problem of the transfer of sovereignty. Similarly, when the question was put to me "Has a date been fixed for the change of sovereignty?", I said that the question depended entirely on the wishes of the islanders. I may add that I am at pains not to try any harder than I did yesterday to convince noble Lords opposite about our good faith in this matter, but simply to put the record straight.
To come to the specific points made by the noble Lord, I cannot, of course, comment on statements which are reported to have been made by the Argentine Foreign Minister. So far as removing the item from the agenda is concerned, I believe that the noble Lord and your Lordships' House will want to wait until my right honourable friend returns from India when he, who had these discussions with the Argentine Foreign Minister in New York, will be here and will make a report
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in the other place, which of course will be made known in your Lordships' House.
LORD CARRINGTON: My Lords, surely the noble Lord must know whether or not the Argentine Foreign Minister made this statement. We have an Ambassador in the Argentine. Has the Foreign Office no knowledge of what the Foreign Minister said? This was reported in The Times this morning. Is the noble Lord suggesting that the whole thing is a fabrication?
LORD CHALFONT: My Lords, whether or not the report is a fabrication is not anything upon which I have commented. I certainly do not suggest that. I only suggest that it would be improper for me to comment upon remarks alleged to have been made to newspaper reporters by the Argentine Foreign Minister. I can confirm that the Argentine Foreign Minister has, of course, been in touch with us through the normal diplomatic channels. What has been said to us is confidential, and I cannot comment upon that either. But it would certainly be improper for me to comment on a remark made to a newspaper reporter and published in the Press.
LORD OGMORE: My Lords, in my view the answers given to-day by the noble Lord do not carry this situation further. We are just as unclear about the matter as we were yesterday, and in fact to some extent even more unclear. We are now told that the Foreign Secretary also had a discussion in October with the Argentine Foreign Minister and discussed these problems. We do not know what the problems are because the noble Lord will not tell us what the negotiations are between the United Kingdom and the Argentine.
May I ask the noble Lord to give this assurance to the House? Is he aware that what is worrying this House and another place, as well as the public at large, is that people fear that the British Government are trying to make a business deal with the Argentine at the expense of the Falkland Islands? That is the crux of the whole matter. Can he assure us that, whatever these Press statements may say, there is no deal, that there will not be a business deal at the expense of the Falkland Islanders, and that, irrespective

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of commercial aspects, they will be entirely free to decide whether or not they will remain British subjects?
LORD CHALFONT: My Lords, let me first of all underline that I did not repeat this Statement with the object of carrying things any further in your Lordships' House. This is a Statement being made in another place.
A NOBLE LORD: My Lords—
LORD CHALFONT: My Lords, may I please finish the statement which I have to make, and then I will answer questions. I repeated the Statement in your Lordships' House because it had been asked for in the other place. The Government agreed to make it, and I thought it courteous and informative that I should repeat it in your Lordships' House.
If I may come on to the question of the discussions between my right honourable friend and the Argentine Foreign Minister in New York, these were discussions carried on while they were both at a United Nations Conference. I have said that my right honourable friend, who is in India at the moment, will be returning and will be making a full Statement next week, and I ask noble Lords to await a report from him. He is the person who had the discussions.
To come to the third part of the noble Lord's question—I really think it hardly necessary to answer it, but I will do so—there is no question whatsoever of the sovereignty of the Falkland Islands being bartered away with Argentina or with anyone else.
THE EARL OF SWINTON: My Lords, may I put again the question which I put to the Minister earlier on, and on which he asked me to await the Statement that was to be made? As the House will recollect, the question was this. Is it not a fact that the Falkland Islands were a sovereign possession of the United Kingdom long before the Argentine Government obtained its independence from the Spaniards? If that is so—and certainly there is no doubt that it is—and if the noble Lord accepts that we are absolute masters of the sovereignty of our own possessions, is not the only way of allaying suspicion and of making the position clear to the
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Argentinians, to the Falkland Islanders and to the people of this country, that he should say quite frankly that there is going to be no question of the transfer of the sovereignty of the Falkland Islands? If that is said firmly to the Argentine Government, then everybody will be at rest. But short of that there must continue to be the most complete suspicion of what is in the minds of Her Majesty's Government, and of their intentions.
LORD CHALFONT: My Lords, this question has now been asked so many times that I fear to repeat the familiar answer, because it will simply bore your Lordships' House. All I think I had better say is this. The historical background to the Falkland Islands question is a long and complicated one. We have no doubt whatsoever about our title to the sovereignty. I think I can make that clear without going into the question of the Spanish rights and the Argentine rights that are alleged to derive from them.
I ask noble Lords once again to await the return of my right honourable friend from India. As I have said, he had these talks in New York, and perhaps I may make the point—as certain noble Lords seem to be surprised that he was having these talks—that the fact that he was having them was published at the time. It was made quite clear then that the talks would be continued in London and I noticed no uproar at that time. He has had these talks. I can do no more than to repeat to your Lordships' House the assurances which I gave yesterday. I am prepared to go on doing that as long as your Lordships wish, but I am not prepared to go further in the light of the Statement which I have just repeated.
BARONESS LLEWELYN-DAVIES OF HASTOE: My Lords, the noble Lord, Lord Carrington, referred to the "motives" of the Government. We on this side have watched him orchestrate the noble Lords who might speak next, and we wondered whether this continued reiteration about suspicion and things of that kind, calling into question the motives of Her Majesty's Government, do not in fact contribute most materially to the difficulties. If noble Lords really have the interests of the Falkland Islanders at

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heart, would it not be better to leave this, as my noble friend has suggested, until a further time?
LORD CHALFONT: My Lords, I am grateful to my noble friend for that intervention. I understand the disquiet of noble Lords opposite and, indeed, of certain of my noble friends behind me. I agree with my noble friend that the constant imputations of bad faith to Her Majesty's Government can do nothing but exacerbate the situation in the Falkland Islands where, as I have already told your Lordships' House, the Executive Council have told me that they for their part are satisfied of our good faith.
LORD CARRINGTON: My Lords, the reason is that we do not think we are getting a straight answer from the noble Lord. That is why we are suspicious of the motives of the Government—not necessarily of the noble Lord. Will the noble Lord do this? Will he find out from the British Ambassador in Buenos Aires whether or not the Argentine Foreign Minister did or did not say that unless there was a transfer of the sovereignty of the Falkland Islands to the Argentine, the Argentine would not sign an agreement? Would he do that? If it is true that the Foreign Minister did say that, and bearing in mind that the people of the Falkland Islands want to remain British, will he remove the whole question of sovereignty from the agenda of any further talks?
LORD CHALFONT: My Lords, I will of course undertake to clarify with Her Majesty's Ambassador in Buenos Aires any issue that remains unclear in the minds of the Government. Having obtained that clarification, if it is necessary we shall act upon it. I cannot undertake to publish it, neither can I give any undertaking of the sort that the noble Lord has suggested, and I can add nothing to the Statement that I have just made.
LORD LOVAT: My Lords, I do not know whether the noble Lord can speak Spanish, but is he aware that at the present time the Argentine Press are hinting that his Statement was the most tortuous made from the Government Front Bench since the noble Lord, Lord Beswick, answered questions on foot-and-mouth disease and Argentine beef?
THE EARL OF SELKIRK: My Lords, wilt the noble Lord recognise that there are a very large number of places in the world in which claims by one country of sovereignty to another exist, that they are a fertile cause of instability, and that the conduct of Her Majesty's Government may tend to be taken as a precedent for the way in which these discussions should be conducted?
LORD CHALFONT: My Lords, I am grateful for that contribution to this exchange. Of course, any international dispute is a potential cause of instability. It was to remove that instability that we engaged in these discussions with the Government of Argentina.
LORD CARRINGTON: My Lords, may I ask one last question? Will the noble Lord be prepared to come to the House tomorrow and tell us whether or not the Argentine Foreign Minister did make this statement?
LORD CHALFONT: My Lords, I cannot undertake to do any such thing. If a Question is put down I will answer it. I think I should make it clear that our discussions with the Argentine Government about this have been, and confidential. I cannot undertake to report to your Lordships' House any statement made by the Argentine Foreign Minister to our Ambassador, and I cannot, I fear, comment upon remarks that he is alleged to have made to the Press.

POVERTY IN BRITAIN
3.58 p.m.
Debate resumed.
THE PARLIAMENTARY SECRETARY, MINISTRY OF HOUSING AND LOCAL GOVERNMENT (LORD KENNET): My Lords, if we may by general consent return to poverty within our own shores, I should like first of all—I am sure on behalf of the whole House—to thank and congratulate the noble Lord, Lord Beaumont of Whitley, for raising this matter to-day, and in no less measure for the balance and moderation and good information of his speech, which, if I may say so, exceeded those shown in a quotation from his writings printed in this morning's Guardian. He was more up to date this

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afternoon. I think we may all look forward to a useful debate at what is well known to be a formative moment in Government policy on this matter.
For the most part, I should also like to thank the noble Lord, Lord Sandford, for his remarks. I know that the whole House will have listened with respect to what he had to say about prophylaxis. This is a field in which he is exceptionally well qualified. His ideas will merit study within the Government, and they will get it. The speech of the noble Lord was not entirely free of Party points, which I regret. But there it is; that is one of the things we are here for. I do not think I have ever heard this Government accused in the same sentence of both mismanagement of the economy and a lack of Socialist thinking by anybody from the Conservative Front Bench. The conjunction of these two reproaches more often comes from certain noble Lords who sit behind me. I wonder which it is the noble Lord would like more of first—better management of the economy or more Socialist thinking.
There are various detailed points in what the noble Lord said that I am able to take up now, and I think it may be convenient to do so before coming to the generality of my remarks. The noble Lord suggested that in rent collection cases councils should await a social report, as the courts do. I think this might be a cumbrous course to adopt. If somebody cannot pay the rent the right course is to give him a rent rebate. This is what civilised councils do, and the Government hope to see more councils do it in an intelligent way. In general, I can confirm the figures which Lord Sandford gave for this and that. There are now about 1,800,000 old people receiving supplementary benefit. This is 400,000 more than in 1966, before the scheme started. Noble Lords who know about this field will remember that it has many times been said that 500,000 more received it, and this was true in September of last year. Up to that time the increase was 500,000. But since then some no longer need it because the National Insurance benefits have risen. I confirm that the expenditure on supplementary benefit is now running at a little over £400 million a year. The noble Lord, Lord Sandford, also asked when the survey
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of the disabled would be to hand. We hope to get preliminary results into the Department about the middle of next year, and the final report should be published during 1970.
The House will know that the Government are engaged at this moment in preparing plans for the future development of our social insurance scheme, and this is the first thing I should like to talk about. Our proposals for a new and modern structure in which contributions will be related to earnings are now well advanced, and we hope to publish this winter a White Paper setting them out for public consideration and discussion. We believe that our new approach to social insurance will provide a contributory scheme not only set upon firm foundations but also—and this is what will be new—responsive to the developing needs of a dynamic economy. You have to have a system so that if the general wage level goes up in a given profession or trade after a man has retired, he should not be entirely cut off from that increase in general prosperity just because it has happened too late for him to get it in the form of direct wage earnings.
All this is going to be a matter of great and interesting debate next year, after the White Paper is out. I should not say much about it at the moment, of course. It is clear that, like any major reform affecting the whole structure of society, it is going to be full of transitional arrangements. There are at the moment earnings-related elements, and after the new scheme comes into existence there will be flat rates. It will be a great acceleration in the process of transition from the one to the other. Just how long it will take before the new scheme works up into top gear I cannot of course say at the moment. There is some reason to suppose—and this is a point of the greatest importance, because in all these matters we are reliant upon public opinion; no Government can do anything that the public do not want them to do for very long—that most people think that if there is any sector of the community in favour of whom they would be willing to forgo some good things for themselves, it is the old. This growing climate of opinion, which I think is fairly well known, will

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of course make easier the far-reaching changes we are about to propose.
We have also made a start on the modernisation of the provision for sickness, unemployment and widowhood. The interim scheme, introduced in 1966, pays in the early months of these conditions benefits which are related to earnings and which therefore provide a considerably better level of compensation than before. This has been welcomed. Perhaps the greatest concern is about poverty among the old. For the vast majority of them, the National Insurance retirement pension is the staple part of their income, and it is of course understandable that our old people and those who speak for them should be worried in a time of rising prices. I have not heard this worry reflected yet in the House to-day, and I congratulate those noble Lords who have spoken so far on, I guess, knowing the true situation, but I may as well set it out.
I share the general concern about this matter of pensions vis-à-vis rising prices, and so do the Government, but we can look back with some pride on the advances made in the level of retirement pensions. I want to say this quite clearly, because it is sometimes said that these pensions are being allowed to fall behind the standards reached by the rest of the community. This is not true. The Government lost no time on assuming office. In 1965 retirement pensions, as well as other insurance benefits, were increased, and this was followed in 1967 by a further general increase. In all, those increases have raised the main rates of retirement pension by one-third. The advances made in 1965 and 1967 have already contributed to a higher standard of living for pensioners. The higher rates then established have been paid throughout the successive years; and, indeed, at the present time, even after allowance has been made for price increases since 1964, the real value of retirement pensions—and this is the measure of their real purchasing power—is notably better than that of the rates in payment when the Government came to power. The real improvement is, in fact, about 15 per cent. One-third is the absolute improvement in money terms.
But disablement and sickness—and do we not know it!—may bring financial as well as physical and social handicaps.
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They may mean interrupted earnings, reduced earnings or the end of a useful working life.
LORD DRUMALBYN: My Lords, I wonder whether the noble Lord would forgive my interrupting at that point. In giving the increase in the real value, is he able to say what is the position so far as concerns the increase in real value of earnings, if any?
LORD KENNET: Not at the moment, my Lords, though I hope that perhaps my noble friend who is to wind up the debate may be able to make this comparison to the House.
The disablement or sickness of someone other than the breadwinner—and this, I know, was a point which was exercising Lord Beaumont when he opened the debate—can obviously strain the whole family. Some problems are still unsolved, but we have made good progress through the increased benefit rates, through the earnings-related supplements, which I have mentioned, and through supplementary benefit. I think the main point here is that a disabled member of the family who is unable to work can now claim supplementary benefit as part of the entitlement as of right. This winter's White Paper, which I have just mentioned, will show the way to further progress on this front, too. I have just mentioned the survey of the chronic sick and disabled.
BARONESS SUMMERSKILL: My Lords, may I just ask my noble friend whether that includes the housewife?
LORD KENNET: Not unless she is disabled.
BARONESS SUMMERSKILL: The disabled housewife who is not in gainful employment. She cannot claim supplementary benefit in her own right, can she?
LORD KENNET: May I return to that point later? I shall return to it, or my noble friend Lady Phillips will.
Illness and disablement require a co-ordinated approach; that is obvious. Medical treatment, rehabilitation or nursing aids would be no use if the sick person had too little food to keep himself alive to make use of them. Equally, cash would be of no use without the services needed to restore health or to reduce the consequences of disablement.

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The new Department of Health and Social Security, the office of the Secretary of State for the Social Services, the Green Paper on the Health Service, the Seebohm Committee Report—these are the landmarks of our common concern to deploy our resources in the best way for the relief of suffering and to meet need, equally whether in money or in services and goods. I know as well as anyone that there is still a long way to go.
My Lords, so far I have talked of insurance schemes which help people by contributions during their working life to lift themselves out of povery in old age, sickness and other misfortunes. But we must also look at the supplementary benefits which for people not in full-time work provide a guaranteed minimum standard of life. This is a concept to which I shall return. The Government have done much since 1964 to improve the standard provided by the Supplementary Benefits Scheme and its predecessor, National Assistance.
It may be helpful if I explain briefly how the scheme works. First, one considers what a person already has to live on. This is referred to in the legislation as his "resources". These include part-time earnings, State benefits, private pensions and savings. In calculating the resources, parts of certain kinds of income and certain amounts of savings can be ignored, or, to use the statutory term again, "disregarded". Next one considers what a person needs to keep himself and his family. This is known under the legislation as his "requirements". These are calculated from the scale rates which are themselves laid down in the legislation for the ordinary needs of the family and take into account the actual rent he has to pay and any special needs the family may have. The scheme then pays the amount required to bring what he has, his resources, up to what he needs, his requirements.
My Lords, in March, 1965, the level of National Assistance requirements was substantially raised. In November, 1966, National Assistance was replaced by the Supplementary Benefits Scheme which was an advance in three ways. First, it provided a right (or, as the Act calls it, an entitlement) to benefit; in particular for old people, the Supplementary Benefits Commission cannot reduce benefit
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below the level set out in the legislation. This means that old people are sure of a guaranteed income. I want to say more about the results of this when I talk about the old in more detail. Secondly, it improved standards by fixing higher levels for benefit by bringing in (through the "long-term addition") a higher level still for old people and certain others—typically the chronic sick, such as the diabetics, who, so long as they are sick, have more expenses than healthy people who are below the requirement level for some other reason than their own sickness. The standards were also improved, beyond the long-term benefits, by removing the rigid limit on the amount of savings the person could have before receiving benefit.
Thirdly, the scheme brought up to date and simplified the rules about income and savings which could be (to use the statutory term) disregarded. The aim of all this was to get a system of non-contributory benefit which could win public confidence and get people to come along because of the injection of the new element of "entitlement". It was epitomised by the bringing together of non-contributory and contributory benefits into one Department, the new Ministry of Social Security.
My Lords, the levels of requirements were raised again in October, 1967 and again in October, 1968. This last increase was to protect the most vulnerable people against price increases caused by devaluation. When all these increases are taken together, it is clear what considerable steps have been taken since 1964 in raising the minimum standard of life for people who, for one reason or another, cannot be expected to work or cannot find work. If one compares the levels of National Assistance rates in October, 1964, with the levels of supplementary benefit now, the real value, after taking account of price changes, has increased in the four years by 23 per cent. Even this does not include the additional improvements brought about by the new long-term addition that I have just mentioned, which is now running at 10s. a week, and the other beneficial changes which were made in the rules when the Supplementary Benefits Scheme was started in 1966.
Before I leave the subject of supplementary benefits I should like to take up

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the noble Lord, Lord Sandford, on one word which he used. He said it was "disgraceful" that there should be now two million people on supplementary benefits. We are all entitled to our opinions; but for my part I would entirely reject that word. It is not disgraceful that there should be anybody on National Assistance or on supplementary benefit. The Supplementary Benefits Scheme is simply the means that we in our society use to ensure that nobody shall be too poor. Other means are thinkable. Each one of us could name three or four other means of doing this; and I think that those who know anything about it could name three or four objections to each of the other means. At the moment the means we have is the Supplementary Benefits Scheme. I should much regret it if it got around that this House, or anybody in it, considered it a disgraceful means. It is not disgraceful; it is an honourable means and the most convenient means available at this moment.
LORD SANDFORD: My Lords, may I just take the opportunity of accepting that comment, which I think my remarks deserved? What I was attempting to say was that we ought to regard it as a challenge to improve our policies towards the poor that we have something of the order of two million people who need this kind of assistance. It is not a disgrace that they are receiving it.
LORD KENNET: My Lords, I accept that and thank the noble Lord for his words.
My Lords, I should now like to consider some of the main groups who have benefited from this rise in standards. First, there are the old, who form about 70 per cent. of the households receiving supplementary benefits. One of the main impetuses behind the new scheme was the Report of the Government inquiry, Financial and Other Circumstances of Retirement Pensioners. That Report said that large numbers of old people who could have got National Assistance did not know about it or were unwilling to claim it. The new scheme, with its emphasis on entitlement, its more straightforward rules, its higher standards and the publicity campaign with which we accompanied it when it was launched, attracted the half-million extra old people on to the supplementary benefits
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list. These are the half-million that I spoke about just now. This figure has now fallen, for the reason that I gave, to 400,000. This speaks for itself. I would accept that there are sill old people who do not claim the supplementary benefit. But the new Supplementary Benefits Scheme and the Rate Rebate Scheme, which in 1967–68 benefited 700,000 poor people over pension age, have marked decisive steps towards removing poverty from old age.
Another large group receiving supplementary benefits are the sick end the disabled. Many of these are also receiving National Insurance sickness benefit, but an almost equal number are people, usually the congenitally sick and disabled, who have never been able to acquire an insurance record because they have never got to work. It is among this latter group that supplementary benefit is particularly important, and is likely to remain so, as a cure of poverty. For example, where parents have living with them a badly disabled child who has no prospects of working, they know that from the age of sixteen he will be entitled to supplementary benefit in his own right without regard to their resources. Then there are the unemployed.
At this point (I do not know whether the House will agree that it is not a digression) I want to speak for a moment about the present unemployment situation and to place on record some figures which I find are mysteriously ignored in public debate at the moment. On October 14 this year, there were 535,000 unemployed persons in Great Britair. This is a distressing number. It is higher than it was—the debate is very familiar—but it is lower than it was at the time of which the noble Lord, Lord Sandford, was speaking in the 1930s. But what do we mean when we say "an unemployed person"? It is a fact that that figure makes no distinction at all between a person unemployed for one week and a person who has been unemployed for three years. If a man goes along and registers as unemployed, he shows up in that list. The list knows no distinction between the long-term and the short-term unemployed. I should like to give the House a figure about this.
At that date, two months ago, 45·8 per cent. of the unemployed had been

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unemployed for eight weeks or less. That is to say, just on half were unemployed for under two months—are at any given moment under two months; just on half get back to work within two months. This is what it means. I do not know what opinion each of your Lordships will form of this individually, but my own is this: that in a country with rising standards of living, often called "affluent", and in the most part justifiably called affluent; in a country with rather good unemployment benefit levels; in a rather civilised country, a modern country, it is not remarkable, I think, that a man who is looking for a new job should take eight weeks about it. I do not think that this is a matter for any distress to anybody. If it takes him longer than that, we may begin to worry.
If we call the remaining 54 per cent. those who are really unemployed, we find that the total is a little over a quarter of a million; and not the "somewhat over half a million" which is generally discussed. Why it is generally discussed is something which has always puzzled me: the true figure is nearer a quarter of a million.
THE LORD BISHOP OF LEICESTER: My Lords, if the noble Lord will forgive me, I have no doubt that mathematically what he said is correct; but it did not convince me, in the way in which he said it. If I understood the noble Lord rightly, he said the fact that only 45 per cent. had been out of employment for eight weeks was a proof that everybody got back within eight weeks. That does not seem to me to follow, unless a point is taken at another period and you can show that the 45 per cent. have gone round once.
LORD KENNET: My Lords, I do not quite follow the reasoning of the right reverend Prelate, and I am reluctant to get into one of these statistical haggles. Of course I did not mean to say that everybody got back at eight weeks, only that at any given moment half had been out of employment for under eight weeks; and in a situation where that is so, that is a pretty good indication that half of them are, on the whole, short-term people and that it is not all up at the long-term end—the year, or nine months, or a
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year and a half, which is what is really worrying in a society.
My Lords, the last large group I want to mention are the so-called fatherless families. Here I think the House will know that there has been a fairly startling increase, from 85,000 fatherless families receiving supplementary benefit in 1955 to 176,000 to-day. The Supplementary Benefits Scheme pays benefit to any woman with dependent children not living with her husband, or with another man, without requiring her to register for work—provided, of course, that maintenance payments or earnings do not take her income above the supplementary benefit level for the family. The Government are very conscious of the special position of this group and the need to devote further thought to their position, if only because they are an increasing group. But they do not form a homogeneous group, and here the flexibility of the Supplementary Benefits Scheme is of value. Even within the three main groups of widows, separated wives and unmarried mothers there are important distinctions. A wife may be legally separated from her husband, or may have been temporarily deserted by him, or anything in between. The unmarried mother may be living with her parents, or may be married in all but name to the father of her child, or may be entirely alone. But in all cases where there is no man to support them the woman and her family are now able to have their income brought up to the supplementary benefit level. Thus people not in full-time work and their families are taken out of poverty by the Supplementary Benefits Scheme.
My Lords, there is one more smaller group of families whom we cannot help through the Insurance or Supplementary Benefits Scheme but who may need our help just as much. These are the families of people in full-time work who cannot qualify for benefit, however low their earnings; and linked with them are the people who, although they are on supplementary benefit, have the amount of their benefit restricted by the wage stop. The extent of this problem was shown by the inquiry and Report, Circumstances of Families in 1966, which has been referred to more than once this afternoon. This Report said that in July of that year there were about 160,000 families in these groups, containing about

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500,000 children, who were living below the November, 1966, supplementary benefit levels, for what that is worth; that is a point to which I shall come later.
It was the main aim of the family allowance increase this year to help these families. Until then family allowances had remained unaltered since 1956. Within the last year the Government have, in two stages, increased them by 10s. for each qualifying child, thus more than doubling their value; so that the allowance is now 18s. a week for a second child and 20s. a week for the third and each subsequent child. The advantage of the increase was concentrated on those families that needed it by so adjusting tax allowances that the man paying tax at the standard rate paid back in extra tax the full amount of his extra family allowances, while at the other end of the scale the really poor man received the full increase—I say "man" but of course it is the woman and the family who receive the full increase without any tax reduction whatever. This ingenious means has, I think, met with little criticism since it has been in operation—though we heard a lot against it before it came in—and it appears to me to be a neat and wholly beneficial way of solving what would otherwise have been the extremely difficult and intractable social problem of how to get the money to these people.
My Lords, I will say this in conclusion. I have not attempted to define poverty because I think that above the level needed to maintain life itself there is no clear-cut definition. The nearest, perhaps, we can get is that poverty is whatever standard of life any community at any given moment finds to be intolerable to contemplate. What I would claim is that since 1964 the Government have markedly improved the standards of the poorest by means of higher insurance benefits and the new Supplementary Benefits Scheme for those unable to work or not expected to work; and by means of higher family allowances for people in work or where supplementary benefit is wage-stopped.
I might just at this point break off to say that we will look at Lord Beaumont's "Christmas Package" suggestion on the wage stop. It is a most attractive idea, but I wonder how far one could go in this direction. if that is cancelled for a couple of weeks, I can think of a great
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many other things which everybody would like to see cancelled for a couple of weeks too—and there might be no end to it this side of a total income tax remission of a fortnight every year. For many people, too, the rate-rebate scheme has been an additional help.
But, despite what I have said, we on this side of the House—and I think that noble Lords opposite know it—arc not complacent. The White Paper is going to be the next big step forward, and the noble Lord, Lord Beaumont, put down his Motion (in a way I regret that he did) just a little too early for us to be able to discuss that White Paper. I expect that we shall have another debate when it comes forward. Moreover, we are building up research into what needs to be done for the less well-off groups. Already a lot is done. I do not accept Lord Sandford's sneer about its being only in a Conservative Manifesto that you find research on social problems; there may have been a word or two about it in ours also; and we all know the political ideology which lies behind the great volume of immensely valuable research which has been done by private researchers outside Government: altogether.
The noble Lord, Lord Beaumont, concluded by asking the Government for two pledges: first, to have a programme to eradicate poverty and, secondly, to make that programme the first national priority. I should like to say a word about both, because I think that they are extremely interesting and constructive suggestions. A programme to eradicate poverty should be very good indeed. We all know what a programme is and what eradication is, but none of us knows what poverty is. Here is a difficulty for any Government, one on which I should like to expatiate for a moment. We are all agreed that there is poverty above the starvation line, but once we get above that line, whit we call the poverty line is a floating value judgment.
There is also a floating political judgment, which may be changed and is always changed upwards and I have no doubt will be changed upwards again, of what is the statutory poverty line: that is, the requirement line in legislation. A Government can say that there are too many people: they must help some people by raising the statutory line.

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This is very good. People who ought to have more money will begin to get it. On the other hand, the critics will be able to say, "Lo and behold, last year there were 1,800,000 old people" (or whatever the figure was) "below the poverty line; this year there are 2½ million. The figure is going up. Disgrace! The number of poor is increasing". Not a bit of it. The number of people who are as poor as they were last year has decreased because those officially below the poverty line are getting something done about it. So we are in a cleft stick. If we define poverty in statutory terms in a generous way, to help more people, we also make more people statutorily poor. It is hard to know what is the right thing to do. For this reason I should be a little hesitant about making a Government programme to eradicate poverty in any very precise terms. Of course, at the moment there is a programme to alleviate poverty. I have just outlined what it is, and it is a good one. If we do not have an Office for the Eradication of Poverty, it is only because we are addicted to slightly more pompous words than the Americans. But we have a Department of Health and Social Security which is doing just about that.
Turning now to the second demand for a pledge that we should make such a programme our first national priority, I would say, "Yes", except that I should have to say what is second and what is fifteenth, and then we should get one of these very unwelcome lists. We all agree—and I am glad we all agree—in all Parties in our political system, that there are various grave social difficulties, all of which must be tackled. So while I cannot give the noble Lord a pledge that we will make the eradication of poverty the sole first priority, I can give him a pledge that it will not be the second.
BARONESS BIRK: My Lords, may I ask my noble friend about the point I raised? He talked about bringing up the amount of supplementary benefit for fatherless families. Could he say whether the Government have in mind a special allowance for fatherless children? The fatherless child needs the same keep because he is in the same position.
LORD KENNET: My Lords, I am not sure that I am getting my noble friend's
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point. Fatherless children come in fatherless families.
BARONESS BIRK: If we take it from the point of view of the child's needs, then we should make an allowance for fatherless children irrespective of how they lose their fathers—through divorce, for example, as well as through death—because at the present moment there are anomalies.
LORD KENNET: Is my noble friend speaking about children in care?
BARONESS BIRK: I am speaking about children who are living with their mothers and who are fatherless.
LORD KENNET: My Lords, I think I had better say that I will study this point and write to my noble friend about it.
LORD SANDFORD: My Lords, I am most grateful to the noble Lord for having answered almost all the points I raised and for having confirmed the ones I asked him to confirm, but there is one question I asked him to which it would be nice to have an answer. How successful have the Government been in persuading retirement pensioners, who seem to be entitled to supplementary benefit and are not receiving it, to accept it? Perhaps we shall hear from the noble Baroness, Lady Phillips, at the end of the debate about this matter, because I think it is important.
4.35 p.m.
THE LORD BISHOP OF WINCHESTER: My Lords, we are all indebted to the noble Lord, Lord Beaumont of Whitley, for drawing attention to the serious extent of poverty which still exists in Britain. In supporting the Motion, I would stress first of all the need for a proper perspective. As the noble Lord, Lord Sandford, has already reminded us, we need to see such poverty as still exists in Britain within the wider context of world poverty, and although world poverty is not our subject to-day I hope I may be excused for recalling a few of the salient facts about the world situation.
I quote two sentences from World Poverty and British Responsibility, a Report published by a Working Party for the British Council of Churches in 1966. It says:
"In 1962, the average annual income per head of the 1,400 million people living in the

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developing countries was less than £50. There has been little improvement in the position since then. In India, 470 million people had an average income of less than 10s. a week."
In the light of this world situation, it is doubtful whether in speaking of human need in this country we are justified in using the word "poverty" without qualifying the word by the addition of the word "relative" or "comparative" for, as we have been reminded to-day, poverty is a relative conception.
Turning, then, to the relative or comparative poverty in Britain, I think that here again it is important that we should view the situation in a proper perspective. I refer, for example, to the pamphlet The Liberal Crusade against a Selfish Society. While it is not possible to exaggerate the appalling destitution of thousands of homeless and displaced families in this country, to which the Shelter Campaign has so rightly drawn our attention, I suggest that it is misleading to state, as is stated in this pamphlet, that:
"100,000 of our old people die every year as the direct result of hunger and cold."
Such a bald statement, so it seems to me, does scant justice to our social services and to those who administer them. For is it not a fact that for several years our social security arrangements have been such that no one need die of hunger and cold, if benefits are claimed and if family and neighbours and the beneficiaries themselves are reasonably attentive?
This leads me to say that I hope that none of us will seek to make political capital out of this problem of poverty in our midst. Whether we belong to this Party or to that Party or, indeed, owe allegiance to no Party, let us give one another the credit of sharing equally a deep concern for the solution of this problem, and let us all together thankfully recognise the immense progress in eliminating poverty that we have witnessed in this country in this century through the efforts of successive Governments, and not least through the social legislation leading to the Welfare State as we know it to-day.
I have recently been reading Roy Jenkins's Life of Asquith and I cannot refrain from recalling the startling historic fact that 60 years ago—yes, only 60
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years ago—when Asquith introduced a non-contributory pension of 5s. a week at 70 for those whose total income did not exceed 10s. a week and who had not disqualified themselves by being criminals or lunatics or by becoming with n the previous year paupers, the scheme was violently criticised for showing a reckless generosity. Lord Rosebery thought the plan
"so prodigal of expenditure as likely to undermine the whole fabric of empire",
and another Peer described it as
"destructive of all thrift."
We have advanced a long way in the last 60 years! Bearing in mind the Prime Minister in 1908, it is a great joy to see his daughter the noble Baroness s raring with us in this debate this afternoon. Again we have advanced a long way in the past sixty years.
What is the situation to-day? We are all indebted to the noble Lord, Lord Kennet, for his reassuring statement on the Supplementary Benefit Scheme and the results already accruing to the great benefit of many thousands of people. Under this scheme, as I understand it, putting it quite briefly, pensioner; who are not in full-time work have a statutory right to have their incomes brought up to a guaranteed weekly level by means of a supplementary pension, and those who are under pension age and are not in full-time employment—the sick, disabled, unemployed, widows, mothers left alone with young children—are entitled to a supplementary allowance adequate to bring their income up to what is re3arded as a proper level.
It is well known, as we have been reminded already this afternoon, that there have been many who in the pas-. have hesitated to avail themselves of these supplementary benefits and have consequently lived below the poverty line either because they have not known how to apply for these benefits or because they thought it was not quite a respectable thing to do. I understand that a fairly recent Ministry survey revealed an estimated 850,000 pensioners who were entitled to supplementary benefit who were not drawing this benefit. I am glad to be able to say that the Church of England clergy, encouraged by a letter from the two Archbishops, have been endeavouring

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to co-operate with the Ministry in encouraging those who are entitled to supplementary benefit to apply to the Ministry of Social Security.
It would seem to me, therefore, that if the statement in the Liberal pamphlet to which I have referred,
"that at least one person in eight of our total population lives in conditions of extreme poverty",
is accurate, it should be qualified in all fairness by a parallel statement that much of this extreme poverty would not exist if those eligible were to apply for the supplementary benefit to which they are entitled. There is, however, an important question that arises in connection with many who are physically or otherwise disabled and are not entitled to a pension, as those are entitled who are disabled in industry or by polio contracted during service in Her Majesty's Forces. This matter has already been touched upon. I know that many disabled persons, with a courage and determination that win our admiration, equip themselves to be wage earners; but many are entirely dependent on social security and are forced to turn to voluntary societies for supplementary assistance. I would express the hope that Her Majesty's Government may give sympathetic consideration to the possibility of providing pensions for those who are totally or partially incapacitated by an incurable and permanent disability and who are not receiving pensions from other sources.
My Lords, I have tried to put the whole problem in its proper perspective, but a right perspective provides no justification for closing our ears to the. challenge presented by the gap between rich and poor, whether it be on a world level, the gap between rich and poor nations, or on our British level, the gap between rich and poor within our own nation. It would seem that without wishing to be unduly pessimistic we must accept the fact that there will always be this gap between rich and poor so long as men and nations remain fundamentally selfish and acquisitive in their attitudes and fail to respond to the redemptive influence of love—the love of God, the love which for a Christian is seen exemplified in the life of Jesus. History indicates that no political programme,
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however revolutionary, can ultimately succeed on its own in narrowing this gap. Those of us who, for example, have visited countries behind the Iron Curtain have quickly become aware of a continuing gap between rich and poor, although the rich may not be the same folk as the rich before the revolution, and the poor may not be the same poor. Nevertheless, the gap between rich and poor continues.
This gap must always confront us with a challenge—a challenge which we cannot evade. The question that we have to ask in every generation is just this: What can we do to narrow the gap? It is easy enough to adopt a policy of despair, and to say the little that we can do is so little that we might as well give up the attempt. I am sure, my Lords, that we should all regard this defeatist attitude as wrong. If, however, we proceed to ask what practical steps we can take, then I think we are driven to recognise that it is a question of priorities.
Let us for a moment turn our thoughts to the world situation, with which I began. Without focusing our attention on particular nations, must we not all as world citizens ask ourselves whether it can really be right for nations of the world to spend thousands of millions of pounds on the exploration of space and attempts to land on the moon, or in the preparation of weapons of destruction, while two-thirds of the world's population go hungry every day and millions are dying each year of hunger and malnutrition? I am happy to recognise that this country is at present contributing about £200 million a year in aid to developing countries, but this represents under 1 per cent. of our total national income.
While on this subject, perhaps I may be allowed to draw the attention of your Lordships' to the fact that the Anglican Bishops at the Lambeth Conference endorsed the appeal of the World Council of Churches at Uppsala, that the Churches should do their utmost to influence the Governments of industrialised countries to increase annually the percentage of gross national products officially transferred as financial resources, exclusive of private investment, to developing countries, with a minimum net amount of 1 per cent. to be reached by 1971.

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We are, however, primarily concerned this afternoon with poverty or comparative poverty in Britain, and nothing that we do to help developing countries overseas ought to deflect us from this problem of poverty in our midst. I have no ready-made solutions. I content myself with observing that each Government has the heavy responsibility of considering and deciding upon the question of priorities in the national budget in such a way that the gap between rich and poor within our nation is steadily narrowed rather than widened. It is not, I should think, that it is morally wrong to be rich or necessarily an evil to be poor. Everything depends on the use made of riches and the spirit in which material possessions, or the lack of them, is regarded. None of us can be complacent so long as there are men, women and children, equally with ourselves members of the human family, who are deprived of the opportunity of living a full life.
In this Human Rights Year, I would remind the House of Article 25 in the Universal Declaration of Human Rights:
"Everyone has the right to a standard of living adequate for the health and wellbeing of himself and of his family, including food, clothing, housing and medical care and necessary social services."
This, my Lords, is one of the "equal and inalienable rights of all members of the human family" to which the Preamble of the Declaration refers. The ultimate aim of all our social legislation in this country must be to enable every citizen to live a life of dignity in freedom.
LORD KENNET: My Lords, if I may have the understanding of the House for one moment to intervene, I would say that the right reverend Prelate quoted, as Lord Beaumont did not, from the Liberal Pamphlet called, The Liberal Crusade against a Selfish Society. I should like to make, if I may, a couple of remarks about the figures which appear in that pamphlet. It builds up this picture of a very terrible situation. It says that 9 million people live in slums and substandard houses. To that, I would say that a slum is one thing, but a substandard house is another. A house may be substandard if it simply does not have hot and cold running water in a wash hand basin. Many of those substandard
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houses are perfectly all right to live in, though something ought to be done to them. The pamphlet speaks of 100,000 of our old people dying every year as a direct result of hunger and cold. My Lords, I know of no evidence whatever that such a thing happens, and I do not know where the authors of this pamphlet got theirs. It speaks of 750,000 old people living below National Assistance level. To that, I would say that there were 750,000 old people who did not claim National Assistance, although they were entitled to it, three years ago. I would point out that of course there has not been such a thing as "National Assistance" in the last two years.
It speaks of 500,000 of our children being undernourished. My Lords, once again I know of no evidence that such a thing is so, and I wonder where the authors of the pamphlet got theirs. Finally, the pamphlet says:
"These figures imply that at least one person in eight of our total population lives in conditions of extreme poverty".
I do not think that the figures, even if they were correct, would imply any such thing, but in any case the figures are not correct.
4.52 p.m.
LORD SOPER: My Lords, I hope I may have the indulgence of your Lordships' House, because I have agreed to speak at another meeting on the same topic some long way from here. I recognise that up to now in this debate my noble friend Lord Kennet is the only lay filling in an otherwise exclusively ecclesiastical sandwich. If I am to be included in that sandwich I should like to justify my presence and what I have to say, not by claiming first-hand experience of poverty, except by inadvertence now and then, which the noble Lord, Lord Sandford, has indicated as a prerequisite of a really authoritative speech, but by saying that for at least forty years I have been cheek and jowl with poverty in my professional career. 'Therefore, perhaps your Lordships' House; will admit a reminiscence which I think helps to put the present situation in perspective and is corroboration to some extent of what the right reverend Prelate has just said.
Forty years ago you could debouch from the Old Kent Road to streets like Rivet Street and finds no houses with

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doors upon them. You would find houses almost entirely bereft of furniture. Almost my first experience as a minister was being asked by my deaconess whether I could go over to a certain house in Rivet Street where it was said a man was committing suicide. "Would I go to help him?"—a slightly ambiguous request, which I endeavoured to follow. I found he was standing in the middle of a room in which there were two families, each huddled into a corner; there was no furniture whatsoever except a soapbox and some rags on the floor. That was not a particular and egregious exhibition of poverty in one particular street off the Old Kent Road, as I have every reason to know. People who talk about poverty to-day are talking about an institution and a curse which in many respects has been largely removed from our cities—and thank God for that!
If we are profitably to utilise the opportunity provided by the noble Lord, Lord Beaumont, we shall do well, I am sure, to look at those alternative forms of poverty which have taken the place of the endemic poverty, which are more miliary now than particularised in groups of people and in particular parts of London and other conurbations. The first great difference to-day is that poverty has moved West in the great cities and one finds it now behind the stucco of quite respectable West End terraces, where people are living in respectable poverty and are much less likely to seek the opportunities that a Welfare State provides for them. If it be true, as I have no doubt it is, that few of them will die of cold this winter, it is my experience as a practising parson that over and over again people living in such circumstances have not enough money to keep themselves warm, and only just about enough money to keep themselves clothed and housed. Although statistics are available which could be, I suppose, regarded as authoritative, I will not question them except to say that it is the experience of every social worker whom I have come across that this situation is very widespread.
The second characteristic of poverty today is that much of the poverty that could be alleviated is not alleviated because of a lack of take-up. I hope that this is not a piece of my own Party allegiance,
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and I hope it is not a piece of Party bias, but the more I read both of the promise and of the performance of the present Welfare State as carried out hitherto by the present Government, and the new proposals and anticipations of the new scheme under Social Security as a whole, the more I am impressed by them. They have a magistral sweep, a comprehensiveness and an idealism, which all commend themselves to me. And I, for one, am profoundly grateful for the changes that they have enabled me, and every other social worker, to see in the general conditions, which once were deplorable.
It is necessary, I think, to remind ourselves that of the 900,000 who were entitled to retirement pensions and did not take them up, a great many did not want them or did not need them. It is assessed (and, here again, I cannot substantiate the accuracy of this figure, although it is authoritatively stated) that 250,000 of them in fact did not take up their retirement pensions because for various reasons they were unwilling to take the trouble so to do, or were unprepared to face what they regarded as a social insult or an exhibition of charity. Nothing seems to me to commend itself so much in the present attitude of Her Majesty's Government as this attempt to remove the social sense of some kind of charitable deflation of one's own personality present in the way in which these social benefits were acquired in the past. Of the 235,000 families which are, I believe, living below supplementary benefit level now, it is interesting that only 25 per cent. took up their children's meals concession, not because they were, as I think, already well fed, but because of this reluctance. Therefore, perhaps one of the most justifiable and one of the most encouraging of all the features of the present social security system is that if it can remove this allergy and unwillingness, then it will be doing something of prime importance.
I should like to mention, too, very briefly, two areas in which present poverty has become recognisable and is hectic. One of them has already been adverted to at least twice in your Lordships' House this afternoon. I am proud to be able to say a word of encouragement to the Disablement Income Group. I have read their literature with relish

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and I acclaim them. I acclaim them for the care with which they presented their evidence and the exactness with which they have set out their programme. I would venture to quote from at least one of their pamphlets. Whatever may be the answers which hitherto have been given most clearly by my noble friend, I should like an assurance, if he can give it, concerning the 400,000 who are disabled and the families who suffer from that disablement. Here be it admitted that there is no more secretive and no more reticent person, in my judgment, than the one who has been disabled for a very long time; there is a humble pride about people of that character and of that background which I am very proud to recognise.
But is it, or is it not, true that those for whom no cash benefits whatever are available as yet come in the following categories of disabled people: people whose earning capacity has been reduced but not eliminated by injury or disease, or who, because of their disability, incur extra expense in order to perform their normal work; married women who have totally lost their earning capacity but whose contribution record does not entitle them to indefinite continuation of sickness benefit; housewives (mentioned by the noble Baroness), with injuries received or diseases contracted while not gainfully employed; and, above all, disabled children who, though they will of course receive their family allowances, will not be in receipt, unless I am misinformed, of benefit? Surely it should be the aim of this House and of Her Majesty's Government not only to provide for widows and pensioners a guaranteed income but also to provide a guaranteed income for those who are permanently disabled. These seem to me to be eminently reasonable propositions, quarried out of the present situation by the enthusiasm and persistence of the Disabled Income Group, and I hope they will be encouraged by what the noble Baroness will say at the end of this debate.
I conclude with another reference, which I make no apology for mentioning. If we are considering poverty in the general sense of the word then a great deal of it is idiosyncratic to-day and it depends for its relevance and general provenance
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on qualities which are both economic and moral. I believe that alcohol is one of the prime causes of poverty, and I can give a great deal of evidence to support that belief, but I think an even greater cause is the increase—the fantastic increase—in gambling. It would be difficult to arrive at correct figures or a general knowledge of what in fact is the substance of such a claim n as I now make from evidence which comes to me from persons I believe to be valid.
I should like the Government further to restrict advertisements for drinking. I believe this would have a salutary effect. I believe it would be very much better if the Government would entirely repudiate the principle which led to the emergence of the betting shop. Let me make a confession. When the betting shop problem first arose I was one who felt that as a kind of rough justice the betting shop was a good idea—or rather a lesser evil. I do not believe it any longer; I believe the betting shop is an outstanding curse, a centre of squalor and one which radiates all kinds of poverty. I am sure this is happening, and if the true figures for the dispersal of our treasure in the ridiculous and anti-social behaviour patterns of gambling were available it would be seen to be a major cause of poverty. I hope Her Majesty's Government will bring themselves to look again at the whole question of betting shops.
I was brought up in a good Socialist background which taught me that poverty was a crime. I never quite believed it. It is a dangerous over-simplification. It is not a crime for those who suffer it, and in one sense it was not a crime communities where the solution of it was impossible. It is interesting to reflect that embedded in the Muslim faith is the obligation to provide alms, because there is no possible proposition that there should be the abolition of poverty. Also how often has the New Testament been misquoted—"The poor you will always have with you"—which, of course, is not what was said. In one sense if poverty is a crime it is only because society, being able to get rid of it, is nevertheless unprepared to make the effort so to do. In that sense I would suggest that for the first time in our human story we could obliterate the kind of poverty which is below what is usually known as the "poverty line". It is not

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a fanciful piece of idealism, but a piece of practical statesmanship.
Therefore I will finish by referring to the concluding remarks of my noble friend. It may not be a first priority, but it dare not be a second; and if the modern community is fashioned in such a way as to lead to the abolition of this kind of poverty as its fundamental requirement, then it will necessarily demand such radical and revolutionary changes in the whole structure of that society as might well satisfy even the most Left Wing minded on this side of the House, and would certainly commend itself to those who believe that an achievement of the Kingdom of God as a reputable, decent, livable society is not necessarily postponed to another world but can be made here on earth.
5.5 p.m.
LORD AMULREE: My Lords, I do not want to follow my noble friend Lord Beaumont in taking a broad look at the problems of poverty, but I want to bring forward one or two small points which I think could be considered and which, if properly implemented, could probably reduce a certain amount of the poverty in this country.
The first thing I wish to refer to is the kind of poverty which can be relieved from official circles by means of supplementary benefit, and so on, yet the people to whom it could apply just do not know that it is possible to get this help. In my view, this is partly because there has not been a great deal of propaganda or publicity about this work, and partly, in the second place, because quite often it means filling in a form which may be extremely complicated, and some people really cannot bring themselves to take the trouble to fill it in. To give one or two examples, there are a certain number of parents whose children reach the age when they normally leave school and who would like those children to continue their education. I believe it is possible to obtain financial assistance towards this end, but many people do not know anything about it and therefore they suffer as a result.
In the same way, fathers who try to do a full-time job and also take care of their children when the mother is away with a long-term or chronic illness can
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get some sort of assistance. Unmarried mothers who are too young to have left school (there are not a great many of them, but cases do occur) sometimes do not get the benefits to which they are entitled because they, or the people in charge of them, do not realise what kind of things are possible. Then again there is the person who suffers an industrial injury, for which benefit can be obtained but who because, due to ignorance, they do not apply until after the time allowed has passed, may have difficulty in getting what they would have been entitled to if they had applied at the right time. Possibly it was not brought to their attention at the time when they could have applied.
Recently a leaflet has been sent out to some of the Citizens' Advice Bureaux called, The Short Step. That gives a lot of extremely good advice, and one would like to see it circulated on a much wider scale. It explains various difficulties, gives advice to people on how to obtain welfare food, free meals at school, clothing for schoolchildren, the various kinds of medical charges involved in obtaining spectacles and dental treatment, and that kind of thing. I am sure that there are a number of people who are entitled to these benefits but who do not know about them, and as a result they come into the poverty level. This pamphlet gives advice to the Citizens' Advice Bureaux about rent rebates and rate rebates, and those other reliefs which can make an enormous difference to a family living on the poverty line, if we may call it that. One would like to see a good deal more propaganda or publicity for these things.
I do not want to go into the question of the disabled person who is suffering from a disease, because my noble friend Lord Wade is going to refer to that when he speaks, but it seems to be a serious gap in our welfare services that those people who are disabled by illness, as opposed to those people who are disabled as a result of war or industrial injury, do not get any benefit at all. I believe that this situation is about to be changed. I am not sure, but I think the Government have in mind some legislation which will change that situation, so possibly the matter is not quite as serious as I thought.
There is another rather small anomaly which can cause trouble. I think I am

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right in saying that when a workman goes into a new area to find a job he goes to the employment exchange; but in order to be properly registered there he must have an address. Before he can get an address he has to get lodgings; and, supposing he can find lodgings, he probably has to pay some rent in advance. For some reason he has got no money, and finds it difficult to get money from the social security services because he has no address. So there is a little vicious circle which can lead to quite a lot of unnecessary poverty. The same thing applies—and this has been referred to in this House on more than one occasion—when people come out of prison. They have trouble with their National Insurance card, the prison address, with the stamp and all that, which makes it more difficult for a prisoner to get a job. This brings up one more aspect of poverty which could be eliminated by some kind of administrative action.
We have had a good deal of talk about the question of retirement pensions. I quite agree with the noble Lord, Lord Kennet, who said that the Government had put up the retirement pension and that the new rate represented a real increase, and not merely a nominal one, in the value of the pension. But we must keep the figure continuously under review, because if prices go up under the Government's present economic measures the increasing cost is very soon going to gobble up what the people got with their increased pension.
Here again I would put in one more plea—it is one that has been made in this House many times—for the old people who do not get the pension because they were born chronologically at the wrong time. I know that the number is not very large, and that it is falling each year as people die. I also know that, supposing the Government were to allow this, they would be breaking one of the "sacred cows". That is perhaps a curious statement to come from somebody on these Benches, but I mean that they would be breaking a Beveridge principle. But for people like that I should be prepared to see the Beveridge principle broken: because these people do suffer a lot. It is true that they can now get their supplementary benefit, but it has been brought out that some of
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these old people who are entitled to supplementary benefit do not apply for it. I think that on the whole question of supplementary benefits there is a wrong idea of the psychology of people.
It is said that these old people do not apply because they are too proud, they do not want to accept charity. It is not that at all. They do not apply because they have not got the t me to apply; they cannot be bothered to apply, in the sense that their life is so taken up with living and taking care of themselves that they cannot go to the Post Office or the social security office to find out what they can get. It is not that they are too proud, it is just that they cannot be bothered to find out. I always refer to the Poor Law with a certain amount of kindness. The Poor Law had one or two good principles in it, one of which was the relieving officer whose job it was to know what was going on in his particular district and to visit his old people regularly. I know there was not a great deal to be had at that time, but here was one individual whose personal responsibility it was to see that people knew what they were entitled to and got it. Possibly when we get some of our new social workers coming along that situation may come back again. I am certain that you must bring the benefit to the people and not expect them to go and fetch the benefit from the office.
The noble Lord, Lord Soper, referred to the dangers of alcoholism and poverty. I am quite certain that if we could get proper treatment for alcoholics—I do not mean people who drink, but alcoholics—and for drugs addicts when the new treatment centres start, when the new clinics get going, people may be cured, and that that will make soma contribution, although perhaps not a very big contribution, to the diminution of poverty in this country.
There is one further thing that I would mention. I was very pleased to see, that the Government have put a sum of £15,000 aside to take care of the Czech students who were already here or who came over to this country at the time of the troubles in Czechoslovakia. They have put this quite big sum at the disposal of the students so that they can continue. I think the total number of Czechs is about a couple of hundred.

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But there are 2,500 students from Nigeria and Biafra in this country now who have no money at all because of the civil war in their country, and one wonders whether the Government could not possibly give something towards their care. If they can do it for the Czechs, they can do it for them also. I am told that if something like that does not happen some 300 or 400 of these students will have to give up their higher education and go back to their country, which would be a great disaster, because one of the things Nigeria will need after the civil war has settled down is as many properly trained and educated people as it can get. I put that forward as one more aspect of the relief of poverty in general.
5.18 p.m.
LORD COOPER OF STOCKTON HEATH: My Lords, like the previous speakers I should like to express my gratitude to the noble Lord, Lord Beaumont of Whitley, for bringing this important social matter before the House for debate. There has been a great deal of speculation and judgment expressed as to the people who, through their own behaviour, may bring themselves into the sphere of poverty, and there has also been speculation as to who precisely are the poor. The noble Lord, Lord Kennet, very correctly said that poverty was a very difficult thing indeed to define. I want to deal with one aspect of poverty which I think is very important indeed and which I do not think has so far been mentioned; namely, the poverty of fully able-bodied people at work who are badly paid or lowly-paid. Again, we have the same problem of definition.
The Government asked the Prices and Incomes Board to try to define the low paid, and because "low-paid" is justification for proceeding with wages applications all sorts of phrases have developed—low paid, lower paid, lowly paid and so on. But again the Prices and Incomes Board had difficulty in defining low-paid workers. They said that the term was relative, which is not very helpful, because, as I have heard in wage negotiations, the man earning £25 a week claims to be relatively poorly paid compared with the man earning £35 per week.
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Of course, one danger of defining the low paid would mean the starting up of a whole series of applications for wage increases, and not only the low paid might benefit but all those above them who wanted to maintain their differentials; and if that happened we should be in a sorry state indeed. So this is a most difficult problem. But even though we can make only a sort of imperfect attempt at defining low pay because of the lack of detailed information (a matter which I think has been referred to in this debate and to which I shall revert later) I think it is possible to get a broad indication of what we are talking about. In fact, by inference I think Lord Kennet dwelt a great deal on this subject, because he brought it down to the question of needs. He started to talk about supplementary benefit, and I accept his inference that those who are at a level below what one would receive in supplementary benefit could be regarded as being below the poverty line.
If you take the position of a family who in the normal way do not get any social benefit—I refer to a man, his wife and one child, because as soon as you have a second child you are then entitled to family allowances and you get some help from the State—if the breadwinner was on social security benefit, with all the allowances to-day if he were away from work permanently he could draw something in the region of £12 in benefits and a further £2 rent allowance, an average of £14 a week. The basis of my contribution this afternoon is that a worker at work must earn £15 a week if he is to have the same income as a person permanently away from work on National Assistance or supplementary benefit, that person having a wife and child dependent upon him. It is rather interesting (because, in spite of all that has been said, the T.U.C. are a responsible body) that in the operation of their own incomes policy this is the level they put on the matter. They regard any person whose earnings—not wages—for 40 hours are less than £15 a week as being in a category in regard to which they can reasonably promote a wage increase.
It is interesting, also, to see the size of this problem. When you come to low-paid workers you have more statistical evidence to go on. There is not an

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up-to-date, comprehensive survey of the distribution of earnings in Britain, but there are three sources on which we can base certain conclusions. The last survey on earnings was in October, 1960—eight years ago. This covered 73 per cent. of manual workers in 128 industries. We also have the annual return of the Inland Revenue and the Government's annual family expenditure survey. I do not think there is any doubt that we urgently need—and I hope that this debate may encourage this to be done—an up-to-date, comprehensive survey into the question of low earnings which would obviously cast a clear indication on some of the causes of poverty. In another place the other day a Question was asked about this point, and at column 264 of Hansard for November 19 it was stated that among men and women who were employed full-time (the figures do not include part-time workers) 1,700,000 men and 3,700,000 women were earning under £15 a week. It will be seen from this statement that the bulk of the women in the labour force are earning less than £15 a week, and that a sizeable proportion of men are under that figure.
I noted Lord Sandford's reference to what the Government have done. I believe—and I am glad that it has been said from the Liberal Benches—that the Government have done a great deal to try to solve this problem. But of course more can always be done. From what I gathered, Lord Sandford wanted a little more flexibility and a little better management, and he seemed to suggest that then everything would be right. I must apologise in advance for quoting this, but he reminded me when he tried to suggest how progressive the Conservatives are (I hope this is so, and I am sure changes have brought about many things), of those happy days when Labour was never in power, and we used to have a happy little village where the Conservative Party and the local parson were close together and I, as a choirboy, sang the famous hymn:
"The rich man at his castle,
The poor man at his gate.
God made them high and lowly
And ordered their estate."
We have all moved from this state of affairs, and we do not now accept poverty as inevitable—as, of course, this debate indicates.
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Nevertheless, it is useful to try to pinpoint who are the people who are on low pay and I suggest below the poverty line. Clearly, from these figures—so mush has been said about this that one almost hesitates to say it again—women particularly are in this very low paid b7acket, and all of us are anxious to get this problem sorted out. We all know that it will not be done in a day; but again more can be done. As has been said, a great deal of propaganda is now contributing towards the realisation that this is a most important and urgent social problem.
But if you analyse some of the industries where men are low paid you find that some of them are fit to do only light work. The partially disabled have been referred to, and there are the industries where typically the labour force is old. This is a roost interesting point and an indication of change. Two of the worst industries are Government industries; Government manual and local government. Here again, much has been done through the Prices and Incomes Board which has drawn attention to the situation. In the past these were most attractive places of employment because there was regular security, sick pay, superannuation and so on. The result is that to-day we find older men holding on to their jobs for their pension right; but these are jobs which cannot hold young men, who are in and out all the time. So this is one kind of industry where low pay exists. And of course we all know that, because of the attempt to try to get some regional influence, certain regions are places of poor pay.
It is easy to say these things, my Lords, but it is not easy to see the answers. It is an awful thing that the accident of where one lives should determine one's level of income. People talk about mobility, but they should not say that in a facile manner. After all, it is not so easy to move about, because when you move about you are not moving one person you are moving a family.
Another interesting point to rote is that the low paid exist in all industries. Among the 128 industries listed in the survey to which I have referred, in some of the more prosperous industries—printing, oil refining and motor manufacturing—the proportion of low paid was 3

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per cent. In all manufacturing industries the average proportion of male full-time employees earning less than £15 a week is about 7½52 per cent.; and for all industries the figure is 9½25 per cent. Of those industries again, 56 have a higher than average percentage of low paid, and this ranges from 10 per cent. to 40 per cent. who are paid less than £15 a week.
This debate has revealed that there are special reasons for some of these situations. But again this only emphasises the need for an up-to-date inquiry into the number of low paid, who they are, and what remedial action can be taken. I would add that there is no single solution. It is a serious and complex problem, as has been demonstrated by the contributions to the debate. There are three possible approaches, and I appreciate that the Government are giving thought to these approaches. 1 would hope, indeed I am sure, that the debate will make a contribution towards giving attention to this serious problem. The first of these approaches is an increase in social benefit, particularly family allowances. Again this is a very considerable problem. It raises the question of taxation; how you allow for the children in a family; whether you should allow for them in taxation or whether you ought to avoid that problem and pay more benefit by way of family allowances.
Especially in regard to the low paid, there is the desirability of extending some form of negotiations in this field. It is absent, and it may well be asked, "Why don't the trade unions do something about this?" But it is particularly in these low paid industries where there is hardly any organisation at all. If you take the wages councils that cover a very large slice of low paid workers, the rates of pay are 20 per cent. less than the negotiated rates in other industries.
Another matter which has been referred to is the need to look closely at the position of the disabled. I was quite surprised recently to receive appeals for monetary grants from institutes where they were retraining the disabled. As I understand it, there are only about four large institutes in this country, and I should think that at the most they could cater for about 1,000 people. I visited two such places quite recently, and I
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could not help but admire the marvellous work that they were doing. In the one I particularly asked about 95 per cent. are finding employment after training. This is marvellous, because apart from the social position the great benefit for the individual concerned cannot be measured.
The Government feed these centres either through the Ministry of Education, in the case of children going through the schools who have disabilities, or through the Ministry of Labour (or the Ministry of Employment and Productivity as it is now called) in the case of disabled people. The Government generously support these institutions, but the amazing thing is that if they want to change them from a workhouse appearance to modern hostel accommodation, then they have to find the capital themselves. I think this is a great pity. I do not think it would cost a great deal of money to help with the capital as well as help, as the Government already do, on the revenue costs. It is a great pity that these people are dependent on charity in order to modernise their own buildings. I think this is again a point worthy of examination, and that it is a possible way of helping these people to return to employment. I do not think that there would be many of these people who would be low paid, because the kind of work for which they are being trained, many of them for electronics and so on, are jobs where they could be very useful in the light of the technological changes that are taking place in modern industry.
As I say, I was very impressed with all that was being done in these centres, but when all has been done I still believe you will have the problem of poverty or, if you like, low nay. I am quite definite in my own mind about this. There has been a lot of argument industrially about this, but I think most people are coming round to the point of view that we must have a statutory minimum earning guarantee.
LORD DRUMALBYN: My Lords, the noble Lord is making a very interesting speech, and I wonder whether he would allow me to interrupt him for just a moment? He is talking now about minimum pay. Does he propose that there should be a fixed rate for the job, or

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would it be a rate related to family responsibilities? I think he would agree that on a wage of £15 the single man might be well above the poverty line, but that a man with a number of children even with family allowances might well be below it.
LORD COOPER or STOCKTON HEATH: I thank the noble Lord. There was a time when I used to say that a single man is always a potential married man, but I do not think that is a fair answer to the noble Lord. I do not object myself to that kind of assessment, to have regard to the responsibilities. It is hard to discriminate between the two men in this respect but I think the most important thing is that the job should be such that the average person can earn—on earnings, not on rate—£15 a week for, say, a 40 hour week. The need for this is brought out very clearly because, as has been said, you cannot give supplementary benefit to a person whose wage is below what you yourself assess is necessary from the point of view of supplementary benefit for the person who is not at work.
I would conclude my remarks by a reference to the important Report that is becoming almost a Bible for some of us, the Royal Commission's Report on Trade Unions and Employers Organisations or, to give a briefer description, the Donovan Report. They examined this matter and they made a recommendation which sums up pretty well what I have been trying to say. In paragraph 278 they refer to low pay and they say:
"Low pay has from the beginning been one of the criteria under which exceptional pay increases have been permitted under the incomes policy."
In paragraph 280 they say:
"Some of the lowest paid are not covered by Wages Councils. The possibility of a national minimum wage or of fixing statutory minimum earnings needs to be examined. In our view it is for the Government, having carried out a review of all associated problems, to formulate and state in clear terms what its policy is in relation to the lowest paid workers and how it is to be pursued."
I think this is a very modest request. I am not asking for any more than that. I would close my remarks by once again thanking the noble Lord, Lord Beaumont of Whitley, for bringing this question to the attention of the House. I am quite sure that the Government will give very
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careful thought to all that has been said this afternoon.
5.37 p.m.
LORD ILFORD: My Lords, I should like first of all to join with many other noble Lords in expressing our thanks to the noble Lord who has introduced this Motion this afternoon. It enables us to clear our minds and to sort out our ideas about the meaning of poverty and its existence in the Welfare State. I suppose that the first question that presents itself to us this afternoon is this: has the Welfare State, in its 25 years of existence, relieved our society of the stigma of poverty? If the Welfare State has failed to do this, then it has failed in its purpose and it would be better to turn from the Welfare State to something else.
I think that it is probably true to say that there is no class or section of our people who are living to-day in conditions of abject and persistent poverty. That has not always been the case. It was not so in the 19th century. It is the reproach of that great century of achievement that whole classes of the population lived below any acceptable standard of subsistence. The measures which were taken to relieve that situation, notably the Poor Law of 1835, failed completely in their purpose. Their failure was mainly founded upon an atmosphere of nervousness and uncertainty in which the spirit of humanity played a very minor part. Indeed, it was left to the great voluntary organisers of those days, Lord Shaftesbury, Dr. Barnardo, General Booth, to deal with the problems of persistent poverty. I think that to-day our problem is not to rescue from poverty some particular class of persons, but to provide adequate assistance in individual cases.
The circumstances of individual cases vary very widely. I think that it; important that we should understand how the benefits paid by the Supplementary Benefits Commission are estimated. There is an immense difference in the needs of different individuals and families. Take their rent alone. There are immense variations in rents in different parts of the country. In London, the average rent paid by the applicants for supplementary benefit at the latest date for which figures have been published was 37s. 4d. The average rent in Scotland was only 22s. 4d.; the average rent in Wales was

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25s. 5d., and in the rest of England, outside London, 30s. 11d. So a person who received a flat-rate benefit in London might well be in poverty, although a person in Scotland who received the same amount would have his needs adequately met. It is important to remember that the great merit of supplementary benefit is that it adapts the payment to the needs and requirements of individuals and to individual circumstances.
It is not only rents that vary. The obligations of individuals vary, too. There are many people who have quite expensive diets prescribed by their doctors, and this must be taken into account if the need of that individual is to be adequately met. In the same way some people have clothing needs due to the fact that for some reason there is excessive wear and tear on their clothing. Those needs have to be met before we can say that a person's needs have been adequately met by supplementary benefit.
The former National Assistance Board followed this method of assessing allowances, each allowance being the result of separate assessment. That was one of the merits which it had. Of course, those advantages have now passed to the Supplementary Benefits Commission; but perhaps I may be forgiven if I look back with a certain nostalgia to the National Assistance Board. The Board enjoyed the confidence of the public to a substantial degree, and I regretted that the National Assistance Board was transformed into something else. I have never criticised the Supplementary Benefits Commission and I do not intend to do so now. It was a most ingenious and effective piece of administrative policy and it has been incorporated, I hope on satisfactory terms, into the Ministry of National Insurance. But when one looks back at the degree of independence which the Board enjoyed one begins to wonder whether its continued existence would not have been more in line with the Minister's new policy for the set-up of these Departments than the course which he apparently is going to take.
I should like to ask the Minister to consider having a body with the independent existence of the old National Assistance Board and not separated from the Minister by an intermediate Minister, which I think is a weakness—that is to
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say, a Minister of the second rank (I say that without disrespect to him) who will have immediate supervision of the Ministry of Social Security. Could not something of this sort be revived? I put forward this suggestion without any real expectation that it will be met by the Minister. But there are great advantages in a body enjoying a substantial measure of independence, as did the old Assistance Board, whose sole task is to seek out individuals in need and to endeavour to remedy their needs.
If the Welfare State is effectively to relieve the poverty of those in need, some of us will have to change our views about the means test. Oddly enough, we have heard very little this afternoon about the means test. I think that the Party opposite are reconciled to it now. Indeed, there is no proposal that in the new Ministry of Social Security the means test should be abandoned; but that has not always been the attitude of noble Lords opposite. It was unfortunate that the Labour Party should have committed themselves to an undertaking to abolish the means test before they appreciated the practical administrative difficulties of taking that course. It would have been better if the Party opposite had contained themselves a little longer until they became responsible and found out the great difficulties of establishing that flat-rate scale of benefit which they had promised and which would meet everybody's requirements. You are at once up against the inequalities in need of which I spoke a moment ago.
I believe that the public now accept the means test. I am sure that the public accept the higher rates of benefit. They do not desire that old people should live otherwise than in modest comfort; they do not desire that deserted wives should suffer or that the low-paid should suffer. They are quite willing that the taxpayer should find the means to prevent these things. What they are insistent about is that the benefits should not be paid to persons who do not require them. Selectivity, whether we like it or not, has become one of the major administrative problems of to-day. The means test has spread from the central Government. To-day one encounters it in a great many different forms and in many different places. There is a means test for school meals, school milk, home

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helps, some services in education, prescriptions of course, and in quite a number of other services, most of them administered by the local authorities. There seems to be a case for reviewing these means-tested services. It may be possible to establish some uniform standard of need, by which the need in all these cases could be measured. At the same time, it might be possible to examine the conditions of other services which are at present entirely free, with a view to seeing whether they, too, might be brought within the range of selectivity.
All these services appear to-day to involve a great deal of form-filling. In the old days the National Assistance Board made it one of their principal aims to avoid the necessity for filling-up forms. They sent a visitor to call at the house, interview the applicant and obtain the information, which he entered on the case paper. That was a very expeditious service. I do not think it gave as much offence as it was sometimes said to do. I have taken part in a great many of those interviews, and I never remember being present at one at which the person interviewed appeared to resent it; and, indeed, I do not think they do. I know that the noble Baroness is going to claim, as the Minister claimed, that the number of persons receiving supplementary benefit has increased by about 400,000 since 1964–65. I would only remind the Minister, and the noble Baroness who is going to reply, that of course the number of old age pensioners in the country has also increased, and we do not know how far the increase of 400,000 is due to different methods of collecting claims and how far it is due to the natural increase in the number of persons reaching pensionable age.
I should be very glad to think that the methods of propaganda and of application which have been followed have been successful in bringing into benefit a number of persons who were otherwise standing outside. The task of the Ministry has not been made easier by the way in which it has been received by the Press. I wish we could get rid of the expression, "the dole". A man may go on to unemployment insurance benefit during a period of unemployment, and may be quite properly drawing benefit, but I can think of nothing more disheartening than
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to say of him that he is "on the dole". I wish we could persuade the newspapers to give up that expression altogether.
I have only one or two other short points to make. I was interested this afternoon in the speech of the noble Lord, Lord Beaumont of Whitley. If I do not follow him into all of his conclusions, that does not indicate that I did not appreciate what he had to say. But I would endeavour to persuade him to drop his proposal that the "wage stop" should be remitted for a fortnight at Christmas. That is going back to the Guardians. The Assistance Board and their successors have always been a little cautious lot to do anything which was too reminiscent of the practices of the Guardians. This is "Christmas Day in the workhouse", and persons who are getting supplementary benefit would not welcome being confused with relics of the Poor Law which sometimes make their appearance, as this one has done this afternoon.
I was very interested in what my noble friend Lord Sandford said about allocating visitors and the need for visiting old people. That is, indeed, what used to be done. Certainly, when I had something to do with it, a visiting officer used to obtain the name of some sympathetic friend who lived near the applicant. He interviewed the friend and arranged that he should pay calls at fairly regular intervals, and if anything went wrong with the old person—if he was ill or sustained an accident—the "Pensioner's Friend", as we called him, would communicate with the office and the Board's, officer would make the necessary arrangements to deal with him. That was a regular procedure in those days. I wonder if the noble Baroness can tell us whether that practice is still being followed. It was a very useful and valuable way, not only of relieving the loneliness of old people, but of ensuring that any misfortune which overtook them was brought to the notice of the authorities without delay.
I think that is really all I desire to say upon this subject this afternoon. Somebody has said, "The poor are always with us". That is only half the truth. I do not think the poor are always with us. I think that modern society has gone a very long way to eliminating poverty in groups and classes, and what we are concerned with to-day

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are these minor points—minor in comparison with the whole structure—which come to light from time to time, where for some reason the accepted system has not worked well. That is the problem to-day, and I am sure that it is a problem with which all of your Lordships are familiar and to which we shall endeavour, so far as we can, to draw attention and to suggest remedies.
5.57 p.m.
BARONESS SUMMERSKILL: My Lords. I should like to thank the noble Lord who initiated this debate, because it has enabled noble Lords on both sides of the House to give a great deal of thought to a most important problem—probably the most important in the world—of how to relieve poverty. The approach of many of us is a little different. I feel that we have, perhaps, attached too much importance to discussing various aspects of the National Insurance Acts. While I do not agree with a great deal of what he said, I agree with my noble friend Lord Ilford—I feel that he is a friend, because when I was Minister of National Insurance he was Chairman of the Assistance Board.
LORD ILFORD: I made great progress with the noble Baroness.
BARONESS SUMMERSKILL: My Lords, I do not know whether the noble Lord said that I had made great progress or whether he had, but let us say that we both had. But I agree with him that although two families may be receiving the same amount of money to relieve their poverty, nevertheless their standard of living must depend upon their needs. "Needs" is, of course, the key word. I have always felt, and I still feel now, that there is one category in our midst who must be suffering from abject poverty, and that is the individual or family which is entitled to supplementary benefit but which still does not claim it. There are certain old people who remember their childhood, when their parents had to resort to what was known as the Poor Law. That so shocked the family that some of these old people utterly refuse to ask for supplementary benefit, although they are fully entitled to it. I should say that one would find abject poverty in those families to-day.
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Of course, poverty can be relative. I was very glad that my noble friend Lord Cooper of Stockton Heath spoke about the poverty which existed in those families where the wage earner had only a very low wage. I should like to speak to-day of the poverty which exists in the world of working women, who seldom make a fuss, who never indulge in sit-down strikes and who never parade in protest marches. Those are workers who have problems but who are reluctant to tell the world of their great needs. I do not know whether one should praise them or blame them for their civilised conduct, but the fact is that their passive behaviour enables their employers to exploit their cheap labour without fear of retaliation.
The degree of poverty which exists can be estimated only by an examination of the wage rates which are revealed in the Government's Social Survey of Women's Employment, published this year—and it is a reflection on our present civilisation that such figures can be published in 1968. According to this, there is a very large number of women working long hours whose earnings are very low. Ten per cent. of those paid weekly and 9 per cent. of those paid monthly worked 41 or more hours a week and earned less than £6 a week. We have been hearing to-day about allowances, supplementary benefit and so on which, in the aggregate, are much higher than the wage earned by these women. My Lords, £6 a week for 41 hours at routine, soul-destroying jobs! And these sums represent their full, actual earnings, including bonus and piece-work, before off-takes. I do not know how many of your Lordships have been in a factory and watched women at piece-work. Many of them scarcely lift their eyes from their work—it is absolutely harrowing—because they know that in order to make this miserable sum by the end of the week on piece-work and bonus they must not relax. My Lords, 31 per cent. of these women earn less than 4s. an hour and 53 per cent. earn less than 5s. an hour.
I would say that if poverty is relative, as indeed it is, then we have sweated labour in Britain to-day. It is argued—and oh!, how often I have heard these arguments—that women do not have dependants and do not have to contribute

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to the family income, and even that they do not have to keep themselves. This argument is absolutely fallacious. Many women, including widows, divorced and separated women and unmarried mothers, have dependants. We have heard to-day that an unmarried mother can claim supplementary benefit and need not go out to work; nevertheless, that girl has to go from house to house before she can get accommodation, because the landlady always feels that her rent will be assured only if there is a man there in a regular job. We therefore cannot dismiss some of these problems because supplementary benefit is forthcoming.
Then, again, there is the single woman who has to look after elderly parents. To show the size of this problem 1 would remind your Lordships that some 10 per cent. of all the families in England and Wales fall into these two categories of women without the support of a husband and single women who have to look after their elderly relations. Furthermore, the argument about dependants is irrelevant, because wage rates are not related to family responsibilities. Men without dependants are paid the same as those with dependants; and I have yet to meet somebody who supports the argument that dependants are the key to this question who is prepared to agree that bachelors and spinsters should be paid at the same rate. The noble Lord, Lord Cooper, said that we must have a minimum rate, and that the question was whether this should be related to dependants. I listened very carefully, but I did not hear a complete answer to that question. There is no doubt about it, though, that the trade unions—and, of course, the noble Lord, Lord Cooper, is an eminent trade union official—are moving just a little in the direction of more equality between the sexes.
Taking industry as a whole, however, I believe that the gap between men's rates of pay and women's rates, far from lessening, is widening. The Ministry of Labour returns show that between 1956 and 1966 the average weekly earnings of men increased by 72 per cent. while those of women increased by 68 per cent. Yet it was in 1888 that the Trades Union Congress declared that women should enjoy equal pay. Only a few weeks ago, in the Department of Employment and
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Productivity, there was a meeting of the engineering employers and employees. One woman trade unionist was allowed in. The discussions went on for some days, and during that time women's rates were not mentioned. At the end, this woman, her patience exhausted, cried out, "You have sold us down the river!". This is 1968, my Lords. I remind your Lordships again that t was in 1888 that women were promised that they would be given equality.
Employers argue that Britain could not compete in world markets if labour costs were increased by equal pay. This kind of argument has been used for generations to oppose improvements in women's pay. It was used, indeed, to justify the employment of tiny children in the mills. The cry of the employer in the 19th century was, "We must have the 5, 6 and 7-year olds; otherwise, Britain will no longer he great." The prejudice still exists, and it seems to me extraordinary that to-day, still, the men in places of power are completely incapable of ridding themselves of this prejudice which dooms women to this kind of sweated lababour—£6 for a week of 41 hours.
I should like to say something about the married woman who is not gainfully employed outside her home. I do not have to remind some of your Lordships, perhaps, that there are many hazards in married life, but they include some which are not of a kind that your Lordships have to face. For a woman there is the whole question of sickness, widowhood or divorce, against which she has no adequate financial protection. The condition of the fatherless child has been mentioned to-day; and the child has been ably described by that wonderful writer Margaret Wynne. But the mother of such a child has to fulfil the roles of both parents. She is not only financially handicapped: she is denied the comfort and support of the father of her child. Therefore, when one is thinking of giving supplementary benefits one must recognise that this woman wants help of a kind which sometimes money cannot necessarily meet. She wants help, she want friendship, she wants comfort. On the other hand, the fact that she can now get supplementary benefits without having to go to work will enable her to care more adequately for her child.

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Then there is the wife who is disabled but who was not in gainful occupation at the time she developed her disablement. That is the category I was asking my noble friend about. Let us say she develops multiple sclerosis. If she develops that when she is in gainful employment, then, of course, she can receive an allowance. But if a married woman develops multiple sclerosis as a housewife, she is not given any supplementary help. Let us picture the man, perhaps in a low-paid job, with a family and with a wife who is unable to do the household chores. In these circumstances, if he cannot afford help, and particularly in those houses where there are dependent children, he may have to give up his work and rely on supplementary benefit. The alternative is for him to stay at work, for his wife to go to hospital and for the children to go into the care of the local authority, at great expense to the community.
My Lords, we are asking the Government to speed up consideration of these cases. When I say "we", I am referring to the little group called D.I.G. (the Disablement Income Group) organised by that wonderful, and herself disabled, woman known to many noble Lords. The Group is focusing attention on the plight of the disabled housewife in the home. I would ask my noble friend to try to speed up these considerations. Despite the fact that the plight of such a woman, disabled and incapable of caring for her family, should have the attention of the Government, we were told to-day that no report is to be made until 1970. I know my noble friend's capacity for prodding in the right direction. Will she prod on behalf of such women? The case is recognised—that is the most important thing—and the Committee is working on it. Do not let them have to wait for another two years. I would remind my noble friend that the misery of this woman is threefold. She must bear her disability and the financial difficulties of the home and the mental anguish of helplessly watching while her family undertake those household chores she feels are her concern.
6.11 p.m.
LORD DONALDSON OF KINGSBRIDGE: My Lords, I cannot
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follow my noble friend without saying how entirely I agree with every word she has said. I shall be talking about one of her instances, the mother of a family in trouble. I want to begin by making an apology. I had apologised to my noble friend Lady Serota, but as my noble friend Lady Phillips is to reply, perhaps she will accept it that I may not last out this debate. I have something that I cannot avoid doing.
I want to confine my remarks to one part of the problem of poverty and that is the family in trouble. The noble Lord, Lord Sandford—whom I shall follow, with the exception of one or two political glosses, particularly in the first part of his speech—referred to the families that manage to keep their heads just above water. I wish to speak about the families who do not. The antidote to poverty is usually thought of as money; but unfortunately the difficulty here is that money by itself will not do the trick—at least, not in the kind of cases that I am speaking of. I am proud to be closely associated with the Family Service Units which have for the last twenty years specialised in working with and for families in trouble. Just as the Salvation Army or the Simon Community are places of last resort for the solitary vagrant, or the meths. drinker from Skid Row, so the family service units are called in by the local authorities and others when all normal means of help have failed. They set no store by whether the trouble is due to the family's fault or not; they are concerned only with the future.
It is superficial to talk of success in an area so confused and difficult to assess as this, but I think the family service units have made a considerable impact in this area and that their experience is worth examining. At the moment we have centres in eleven provincial cities, as well as six branches in London, with a total case load of about 1,200 families. We do not keep waiting lists but we understand from those authorities who refer people to us that they could send a great deal more if we could take them.
One of the commonest problems found is that referred to by the noble Lord, Lord Sandford: that of the father with several children who has been unemployed or sick for a long time and whose

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sole income is the supplementary benefit allowance, usually reduced by the wage stop so that he is virtually without financial incentive at all to prefer work to unemployment. In spite of this, these men are often under considerable pressure to accept work. If they refuse low wages they are called malingerers and thought of as work-shy. In our experience, however—though there may be individuals of which this is not true—most of these men, like all other classes, from the very rich to the very poor, would be happy to work provided that this made some difference to their income. Putting money aside to meet fortnightly rent or gas or electricity bills is extremely difficult on a minimum income of this kind, particularly as these families never have enough clothes, bedding, furniture, food, domestic utensils or anything else. If the wheel comes off the pushchair, or Johnny goes through the seat of his trousers, there are no savings to fall back on. The unemployed head of the family who has scraped along from crisis to crisis, and who is frustrated and depressed by his failure to provide properly for his family, may well "jib" at going to work for a net increase in income of no more than "a few bob.".
The only real incentive to such a man is to earn enough extra to make a noticeable lightening of the depressing poverty of his family. The trouble is that he may be worth less to any prospective employer than it costs the Supplementary Benefits Commission to keep body and soul together in his family. It might be possible to solve this problem if we could extend a man's right to take part-time work and to get a reasonable benefit from working while still drawing his supplementary benefit allowance. At present, an unemployed man cannot earn more than £1 without his supplementary benefits allowance being reduced by the full amount of any additional earning. If he could keep even £3 or £4 from part-time work, he could help his family, restore his self-respect and save the public purse. I hope that my noble friend will look carefully into this suggestion and not be too much put off by talk of scroungers and malingerers.
My Lords, there are various lessons that we can learn from the experience of the family service units. In the first place, families and children as they grow up
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must be cared for generously. Parsimony here is false economy. The work of the social service is bedevilled by people to whom not enough was given in their early years and who spend the rest of their lives trying to even up these deficiencies. This, of course, means that more money is needed for the growing family. The increased family allowances, to which my noble friend referred, have had a real effect here.
In the second place, it is very clear to our workers that money by itself is not enough. Poverty is more of en a symptom than a cause. Psychological, social, marital—even physiological—difficulties underly the situation. Money is necessary, but by itself it is far from sufficient. Thirdly, I think that in all our cases we see the need for personal concern and active support, in the form of a visit once, twice or three times a week, as an essential ingredient of any planned rescue work. This was pointed out by the noble Lords, Lord Sandford and Lord Ilford. This may go o d for months or years—or even for the family's full lifetime as a family. One can see that there is a real difficulty in having the Supplementary Benefits Commission give extra money to families just because they do not use it properly. But this could and should be done through the social worker concerned. He should be able to go to the statutory authority and say: "If I could halve this family's outstanding debts I could pull them through. They will never pay the lot. Can I have £x to help them do it?" Every social worker needs to be able to lay hands on small sums of money at critical moments. But, my Lords, these social workers should not be asked to waste their time, for which they are hopelessly underpaid and which is in very short supply, going round drawing rooms and running bazaars to make the money.
I have said that these people are hopelessly underpaid. Social workers are underpaid—and no one really disputes this. But I wonder whether it is widely realised that the other most important contact which the deprived family makes is even worse paid, though admittedly his skills are not so high. The clerical officers at the Ministry of Social Security, of whom there are 40,000, who make the first and vital contact with the customer at the counter, begin with £455 a year,

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at 17, and work up to a ceiling of £1,100 a year, at 32. The executive officers, who have a most difficult and exacting role, handling the complex case work which comes up to them from the counter, authorising payments and making home visits, are not much better off. They get from £625 to £1,559 a year according to age and length of service. Some clerical officers, indeed, earn less for their tiring and difficult job than they pay out to the families they are looking after. Clearly, to have anomalies of this kind is simply asking for trouble. It seems to me a curious and rather daunting indictment of our society that everyone connected with this particularly sensitive area of trying to help the under-privileged families, whether social worker or public servant, should be equally undervalued.
The course which my right honourable friend the Secretary of State for Social Services must pursue to alleviate the distress in this most painful of all kinds of poverty is quite clear, and it is threefold. First, he must channel more money into these families as of right. He should maintain and extend his present excellent policy of increased family allowances. He must find some way of increasing the level of supplementary benefit allowances, and he would do a great deal for the low earner—who is the source of a great many of the most intractable cases—if he could follow my suggestion and make part-time earnings more possible. But however he does it, he will not meet with success without more basic money.
Secondly, he must tackle organisation. The way to do this has been well laid out in the Seebohm Report, as was once again pointed out by the noble Lord, Lord Sandford. I hope that my right honourable friend will implement that Report rapidly to ensure proper co-ordination of the social services at local level, with first-class officials in charge, to see that they are not neglected. Thirdly, he should grant special allowances to local authorities for employing additional social workers, including bodies like the family service units and others with power to draw, in a controlled and modest way, on funds made available to deal specifically with this problem of distressed families. The Seebohm Report suggests, in paragraphs 601 to 604, that local authorities should have powers to
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give discretionary grants to families with children and to adults where necessary. This seems to cover my point, particularly the recommendations in paragraph 604, which on this subject is quite specific.
I should like to put forward one suggestion which might help in catching families on the way down, so to speak. One of the main functions of our field workers, and indeed of all social workers dealing with families in trouble, is to try to find out the total liabilities which have to be met week by week, and to make a plan to see that enough money is put aside to meet them. I believe that nearly always this is done much too late. I think that there is a case for setting up in this country an organisation similar to the Credit Counselling Service of Toronto.
This Service was founded in 1966 and is there to give advice to people of all levels of society who find themselves sinking under an unmanageable weight of debt. It is not designed to help only the problem families. I heard of it first in quite another context through the Consumer Council, but it is evidently highly appropriate to the cases we have been talking about to-day. Every social worker and probation officer is familiar with this situation of hopeless indebtedness, but not necessarily sufficiently well equipped to analyse and advise his client on this often fairly technical point. The existence of an expert body to whom they could turn and to which they could refer cases would be invaluable.
The Toronto Service is already dealing with between 100 and 150 cases a month. It has been able to give direct and immediate help to 70 per cent. of the cases referred to it, and has referred the other 30 per cent. to other agencies. In the first 14 months it dealt with 1,842 cases involving more than 15,000 creditors and 6 million dollars. This is a joint effort by the commercial community and the social work agencies, both of whom have everything to lose from bad debts. I have spoken to the noble Lord, Lord Crowther, who as your Lordships will know is chairman of a committee on Consumer Credit, and he will look at this; but I hope that my noble friend will look at it, too. It seems to me an idea that we could pursue.

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My Lords, I know that it is no use crying for the moon. If I ask my right honourable friend to "jack up" social workers' salaries; raise the level of supplementary benefit allowances and increase the pay of 40,000 public servants, I shall not get very far. That is part of the long-term plan which my noble friend Lord Kennet told us about, and to which we look forward in due course. But I am asking for something much smaller to be given to us immediately. It would cost nothing to let the low earner on supplementary benefit allowance get some benefit from part-time work. The objections are not financial but social: that it would be abused. Well, my Lords, so are death duties and income tax abused. In my opinion that is not a reason for not doing it. Otherwise, I ask only for the rapid enforcement of the Seebohm Report and a generous interpretation of its recommendations in paragraph 604. Quite frankly, this would very nearly do what is needed.
My Lords, poverty in a family with young children is the most grievous of all forms of poverty. So long as men are feckless and women inadequate we cannot hope entirely to eliminate it. But experience shows that skilled support, with money behind it, can do a great deal. I hope that we shall not be deterred by financial arguments of uncertain validity from spending the modest sums needed to maintain and expand this service and thus to protect our distracted mothers and defenceless children. In conclusion, I should like to thank the noble Lord, Lord Beaumont of Whitley, for opening up these questions. I apologise to your Lordships for speaking only about a tiny corner, but it is a tiny corner which it is within our power enormously to improve, and quite quickly, by the expenditure of quite a small sum of money.
6.28 p.m.
BARONESS ELLIOT OF HARWOOD: My Lords, I follow the noble Lord, Lord Donaldson of Kingsbridge, and the noble Baroness, Lady Summerskill, with enormous pleasure. I agreed with every word the noble Baroness said, and if I may reinforce everything she said in order to back her up with the Government, I should like to do so. No one knows more about this matter than the noble Baroness.
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She puts the arguments far better- than any of us and hits the nail on the head in a way which makes me quite envious. Now that she has hit this nail so hard, I hope that the noble Baroness, Lady Phillips, who I know is very sympathetic, will put these things before her Minister in as strong a way as she possibly can.
My Lords, I entirely agree that what has been suggested by the noble Lord, Lord Donaldson of Kingsbridge, is enormously important. I should like to support him in his plea for the implementation of the Seebohm Report which, it seems to me, would lead to one of the most important reorganisations of our social services. I know that it will be difficult, and that it will not be accepted by many people. We in Scotland are to put the Report into effect in 1969, and I shall be engaged in that work myself since I am a member of a local authority and chairman of two of the committees which will be involved. I know that it is going to be an extremely difficult task, but I am determined that it shall be done because I am quite sure that it will be of enormous benefit to the administration of the social services in any given area, which is, after all, the best way to help the people about whom we are talking.
My Lords, I have a feeling that poverty in 1968, not to say 1969, should in all reasoning be an anachronism. We live in an age of mass production and distribution in which goods that are cheap and often very good are available to the public. Yet in spite of this and in spite of the efforts of both political Parties over many years, we still have problems of poverty. I have listened to all the speeches, and I do not think that any of us can really say what leads to poverty. We cannot put our finger on one particular thing. In my field of experience, which has mostly been in child care, youth work and probation work, it is difficult to know whether the behaviour habits of people reduce them to a state of poverty or whether it is poverty that starts off the behaviour which leads to so many troubles. But I am certain that there is a close liaison between poverty and the families whose way of life has brought them in one way or another into the hands of the local authority services—or not into them because those services do not cover a wide enough field of work.

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Obviously, broken homes are a source of unhappiness and lead to poverty. Quarrelling and maltreatment of children lead to broken homes. It is not only lack of money coming into the family that makes for unhappiness, because I have known many families who have come into our categories of care who have been quite rich but who, for one reason or another, did not manage to live either happily or wisely and to some extent their standard of living had gone down because of their incapability of managing their lives.
I have an interesting book in my hand by Sir Alec Clegg, who is, as many of your Lordships will know, Director of Education in the West Riding of Yorkshire. It is entitled Children in Distress. In this highly populated and, I should have thought, fairly prosperous area of England, some 5,000 children receive help, described here as "curative help", for conditions which bring them within the ambit of the social services, and Sir Alec reckons that there are 25,000 to 30,000 who need help of one kind or another but whose particular difficulties the social services do not cover. I think that this is an enormous number. Such facts should make us realise that these conditions show a deterioration and degeneration of family life.
There are many children who fall within the range of children's officers and of the services for the mentally ill and handicapped. But there are many who do not. The children who come into the care of the existing social workers will be helped, but how are we going to get at the children of families who do not fall into the categories where social helpers come in and where it is difficult to see what is going to happen? This book gives a number of heart-rending cases of what happens to children of broken families where there are no services to deal with them.
The noble Lord, Lord Donaldson of Kingsbridge, said that more money would be a help. That is so, but it is not only a question of money. I think we would all agree about that. We really cannot say to any Government that they must spend great sums of money to raise family allowances, because we know that we do not have the money; and if we are
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already spending £400 million on supplementary benefits, it is asking a lot to raise this sum. Although naturally I should like that to happen, I feel that I cannot ask for that. I believe that it is by trying to make the existing services more effective that we can help people at the present time.
This is where the Seebohm Report comes in. If it is implemented, a range of services will be provided in every given area (we have not yet had the Report on the reorganisation of local government), so that far more will come within the orbit of social work than ever before. And this is what I would like to see. I am sure that much could be done if there were more preventive measures available. Already the change in the Children's Act has meant that a great deal of preventive work is now being done by children's officers which could not be done before because they were not allowed to do it. The voluntary organisations, whose work we all know, could be brought into a co-ordinated scheme under the Seebohm reorganisation. If the social services dealt not only with individual groups of people but with the whole care of the community, that would be enormously helpful. And it goes without saying that increased and improved housing is one of the things which would help.
Our real difficulty is the fragmentation of treatment and of preventive measures. The results of this have to be seen to be believed. At page 15 of his book, Sir Alec Clegg writes:
"…if a child does something which is obviously an offence, a bench in town A may send him to an approved school for which the Home Office will be responsible if the identical offence is detected in town B, committed by a similar youth drawn from similar circumstances, the bench there, after receiving a report showing the child to be maladjusted, may try to find him a place in a special school maintained by the local authority but for which the Secretary of State for Education and Science is ultimately responsible. If a youngster stole food and ate it, he would be dealt with by the Home Office: if he stole candles and ate them (as once happened), the bench would insist on an inquiry and the boy would be likely to be dealt with by the Department of Education and Science. If, however, he is only nine years old when he steals, the Department of Education and Science will continue to educate him, and only if he steals a year later will the Home Office undertake this task."
One can imagine that this jungle in which the social services are organised

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at the present time must lead to enormous complications and an inefficient form of service. I would plead with the Government—and it is their own policy I am asking for—to do their best to implement as soon as possible the Seebohm Report, particularly those recommendations easy to implement, as the noble Lord, Lord Donaldson of Kingsbridge, suggested, because I believe that this is one of the ways by which we could prevent some of the tragedies which happen to-day and also prevent the poverty we all want to see eliminated.
6.40 p.m.
LORD WELLS-PESTELL: My Lords, I, too, should like to thank the noble Lord, Lord Beaumont, for introducing this debate, which I think should rank as one of the most important debates that this House could possibly have. I cannot think of anything more important than the question of poverty. Unfortunately, it does not exercise the minds of as many people in the community as I think it should. and I am sorry to see so few noble Lords in the House during the debate this afternoon. I could follow the noble Lord, Lord Sandford, and the noble Baroness, Lady Elliot of Harwood, a good deal of the way, but I am bound to say that I cannot accept that many causes of poverty are due to social conditions—marriage breakdown, and so on—although I accept that things like those aggravate the situation.
I think we are in danger of wanting to believe that much of the poverty in this country is caused by factors outside the financial field, but I do not accept that for one moment. Many people were astounded and shocked at the disclosures made by Professor Abel-Smith and Professor Townsend in their Report entitled, Poor and the Poorest, published in December, 1965. While it is not my intention to deal at length with some of their conclusions, for they relate, I agree, to the year 1960, I should like to quote one sentence from their summary which reads:
"In 1960 approximately 18 per cent. of the households and nearly 14·2 per cent. of the persons in the United Kingdom, representing 7½ million persons, were living below a defined National Assistance level of living."
That meant, my Lords, that in 1960 about one-seventh of the total population of the
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United Kingdom, involving 2¼ million children, were living in povetry.
LORD KENNET: My Lords, would the noble Lord yield for one moment? What he quoted was, "living below a defined National Assistance level", and a moment later that became, "living in poverty". I am wondering whether the noble Lord has anything more to say about that shift of wording.
LORD WELLS-PESTELL: Indeed I have. I do not think anyone would accept that the National Assistance level payable at that time could amount to anything more than poverty, so I do not withdraw the use of the word "poverty". We cannot, unfortunately, take any comfort from the fact that this was in 1960, for I know of no evidence which leads me to believe that the situation is appreciably better to-day. I would accept the fact that there is not available It the present time a great deal of statistical information concerning poverty or the plight of the poor now, in 1968, but in June and July, 1966 (I think that is the year for which we have the latest information) the Ministry of Pensions and the National Assistance Board, as it titer was, carried out a survey of families with two or more children. Their Report, Circumstances of Families, has been referred to already this afternoon. It disclosed what was already know to professional social workers; namely, that poverty is more widespread than people realise—and, as I said at the beginning, perhaps more widespread than many of us want to know, otherwise we may have to do something about it.
It may appear difficult to refine poverty, but many attempts have been made, and perhaps the most realistic have been made by Seebohm Rowntree, Beveridge, the National Assistance Board and, last but not least, the British Medical Association. Rowntree gale it as a family whose total income was insufficient to purchase the necessities to maintain physical efficiency, taking into account the nutritional levels recommended by the British Medical Association, plus a modest amount for conventional needs.
If I may return to the Report, Circumstances of Families, that Report showed that nearly 500,000 families, involving 1¼ million children, were either

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on supplementary benefit or had incomes below supplementary benefit level. It showed that those below, but not getting supplementary benefit—and I emphasise that I am talking about those who are not getting supplementary benefit—included about 140,000 families which could not get supplementary benefit because the father was working full time. We hear so much these days about men refusing to work because they are better off living on the dole or on the Welfare State, but here are 140,000 men who are husbands and fathers and who are working full time for less than they would get if they were out of work. These 140,000 men, with families, accounted for nearly 500,000 children, who suffered as a result of their father's low wages and from the fact that their fathers preferred to work rather than to live on the Welfare State.
LORD KENNET: And who have benefited, perhaps, from the introduction of the new family allowance scales.
LORD WELLS-PESTELL: I shall be happy to deal with that in a moment or two. This is what makes me say that money does play an important part in understanding and relieving this problem. The Report disclosed that tens of thousands of families or fatherless families who were entitled to supplementary benefit were not receiving it, either because they were too proud to apply for it or because they were ignorant of their entitlement to it. Nearly two-thirds of all families of working fathers—and I emphasise again "working fathers"—living below the supplementary benefit level had only two or three children. If I may at this stage slightly disagree with the noble Lord, Lord Beaumont. their plight was not due to their having too many children. Strangely enough, and probably contrary to normal thinking, it was found in that survey that it was not the very large families who were in circumstances of poverty, for the large families accounted for only a minority of the poor. I thought I should mention that, in passing.
The really serious matter, to my mind (this is probably a point that the noble Lord, Lord Sandford, was making), is that married couples about 35 years of age, with young children, are, with the possible exception of the aged, the hardest
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hit financially in our community at the present time; and they can do nothing about it if the husband is in full-time employment. But for the mothers' earnings, many more families would have been in poverty, for about a further 50,000 families, involving 150,000 children, would have fallen below the National Assistance Board level. It is interesting to note that more than one in five fathers with six or more children —20 per cent. of the fathers with six or more children—work 60 hours a week or longer in order to make ends meet. I think that this point ought to be made, in view of the criticism that is sometimes made against people who are working. It is true that since 1966, when the Report was published, the subsistence-scale level, based on the essential needs of a family with three children aged from 5 to 10 years, has risen from £10 17s. per week, as it was in November 1966, to £12 5s. to-day. However, the fact remains that this increase, plus the increase in family allowances, has been absorbed by higher food prices and devaluation. I want to suggest to my noble friend Lord Kennet that, because of these increases, these people are not substantially better off to-day.
LORD KENNET: My Lords, to take up the noble Lord's suggestion, I do not think he was here during my speech, otherwise he would have had the figures I gave about this.
LORD WELLS-PESTELL: My Lords, it is perfectly true that I was not here when the noble Lord made his speech, although I have read it since. But this is a view that I take, having gone into the matter very carefully. If £12 5s. a week is required by a family with three children between the ages of 5 and 10 years to keep them from falling below the subsistence level, it is not surprising that the number in poverty is still very high to-day and that husbands who are working find it necessary, as often do their wives, to do part-time evening and week-end work in order to maintain a decent standard of living. One can see at once the effects that this kind of family life must be having upon the children.
It is only fair to say that the Government have never claimed that the increases in family allowance were sufficient. When the increase in family allowance was made in July, 1967, Mr. Gordon

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Walker admitted, if my recollection is accurate, that about half the children in families below supplementary benefit level would remain in that situation; in other words, 300,000 children would remain below the supplementary benefit level. To refer to the household income in 1967, the Family Expenditure Survey showed that 1,800,000 men in full-time employment in the United Kingdom were earning less than £15 per week gross, their take-home pay after deductions being much less. In other words, their take-home pay was not much higher than the level of supplementary benefit. Of those 1,800,000, 1,500,000 were manual workers.
I live in a rural and farming area—I am not a farmer—and it is in rural areas where many of the lowest paid workers are to be found. I believe that many people think that poverty is to be found only in the large cities, but this is not so. Some two years ago the Prices and Incomes Board Report on the pay of workers in agriculture in England and Wales exploded the myth of the affluent farm worker living rent free and receiving many benefits in kind. The Board found that about one-third of the male general farm workers earned less than £12 a week including overtime. Even allowing for the recent award, which does not come into effect until February 1, the minimum wage for farm workers now I believe is £11 11 s. per week. The Report showed that about 25 per cent. of the general farm workers in the United Kingdom are earning less than £13 a week including overtime. Yet the level of subsistence has been fixed at £12 5s. So a farm worker with a wife and three children between the ages of 5 and 10 years, after normal deductions and after paying the normal rent for unfurnished accommodation, as many of them do these days, are below the subsistence level. It is perfectly true that the occupation of a tied cottage is a benefit and its low rent makes a considerable difference, but it must also he borne in mind that we can no longer argue that the cost of living in rural areas is lower than in urban areas. This is no longer true. It would be true to say that sometimes the cost of living is higher.
Most of us would agree that poverty is soul destroying, humiliating and can be devastating to family life. I should
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go so far as to say that it is an offence to our society. I do not entirely blame the Government, for I am not unmindful of the difficulties they have had to face and are still facing, I believe through no fault of their own. But I cannot escape the feeling that in recent years tie poor have become poorer and the rich have become richer; that the gap between the richest and the poorest has widened and not narrowed. I do not think it would be unfair to state that Government policies—and I fully understand the reasons for them, although they are sometimes a matter for argument—of economic expansion, rationalisation of industry and aids to investment, and the incomes policy, plus devaluation, have tended to increase private wealth to exceptional levels. Our taxation policy tends to hit the lowest paid rather more than the better off members of the community. A comment in this week's issue of the New Statesman says:
"In 1968 alone any ordinary, prudent investor has increased his capital by "75 per cent. and many more have doubled it."
I think we must make a sincere and sustained effort to narrow what seems to be an ever-widening gap between the rich and the poor. It is said that the poor are always with us, but it seems to be more true that the rich are always with us. I cannot accept that enough is being done to help the less fortunate members of our society.
This will not be popular, I know, but I say that too many people in our community have far too much money. On Saturday, November 23, the day following the Chancellor of the Exchequer's announcement of price increases, the British Broadcasting Corporation reported individuals spending as much as £350 in one go on wines and spirits in order to escape the increased tax. This Christmas, the new "Queen Elizabeth 2" was due to take about a thousand passengers on a cruise for four days and three nights at a cost in some cases of £1,000. I quote, if I may, from yesterday's Guardian, which says:
"more than 600 passengers, some of them paying as much as £1,000 for option suites on the four-day trip".
Do we realise, my Lords, that £1,000 for a four-day trip represents roughly what we give one person for four years as a retirement or old-age pension?
LORD STRABOLGI: My Lords, I am sorry to interrupt my noble friend. I agree with a great deal of what he says, but I think in fairness to the shipping line concerned he should point out what he may have forgotten: that this cruise was being made in order to benefit a very worthy cancer society.
LORD WELLS-PESTELL: My Lords, it was my intention to draw attention to that as well. But it does not alter the fact, so far as I am concerned, that there are a large number of people in the community who can spend £1,000 on a four-day trip. I am wondering whether they would have given a thousand pounds to Cancer Research if there had not been a four-day trip on the "Queen Elizabeth 2". I wonder how many of the thousand passengers would have provided a Christmas dinner for a needy family before they embarked. Very few of them, I imagine. It is not surprising that there is widespread dissatisfaction and a growing feeling of hostility on the part of a large number of people in the community when they see such inequality of income. Some of us believe that the redistribution of wealth, the narrowing of the gap between the haves and the have-nots, is a basic political issue about which there will be fundamental differences of views and approach in your Lordships' House, but I believe that this Government will have to deal with this particular matter in a more determined way in the future than has been possible since 1964.
I ask the Government to consider a wealth tax, the proceeds of which should be devoted exclusively and entirely to easing the lot of those in poverty. I think the Treasury recently estimated that the yield from a one per cent. wealth tax on all wealth above £20,000 would yield £180 million. I think a more accurate estimate would perhaps be in the region of £300 million. If we do not do this, if we do not come to grips with this problem—and I accept that there are all sorts of psychological and social reasons for poverty, though that is not the complete explanation: nor do I believe that Seebohm is going to be the saviour or the solution of this problem—in the last analysis it will mean increasing the level of subsistence, it will mean paying higher wages, in order that people may live a decent life with a decent standard. If we do not do this, the line between the
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haves and the have-nots will become even more defined than it is at the present moment, and if that happens there is always a danger of increased social and industrial unrest.
Those in the community who are more fortunately placed financially than many others (and I believe them to be numerous) will have to agree to take a little poverty into their own lives, for I feel that we are under a moral obligation and are morally responsible for those less fortunately placed in the community.
LORD KENNET: My Lords, the noble Lord said at an earlier stage that he would be happy to deal later with the new family allowances system. I wonder whether he would like to do so at this point.
LORD WELLS-PESTELL: My Lords, I am much obliged to my noble friend, but I thought 1 had dealt with that matter. I thought I said that in my view the increased allowances have not improved the situation because they have been absorbed by higher food prices and a higher cost of living generally resulting from devaluation. I was under the impression that I had dealt with that point.
7.4 p.m.
LORD WADE: My Lords, I should like to join with other noble Lords in congratulating the noble Lord, Lord Beaumont of Whitley, on introducing this debate and on his choice of subject. It has been an extremely interesting and thoughtful debate. Like the noble Lord, Lord Soper, I commend the work of D.I.G. and other voluntary bodies; and, having said that, I propose to limit my few remarks to the subject of disablement. I think the case for reform has been made out and I wish merely to add my own testimony. In doing so I wish to make particular reference to those disabled by polio. I could very well cover a much wider range, but I am anxious not to repeat what has been said by other speakers in this debate.
For many years I have been interested in the subject of polio, in the realm both of research and also of assistance for those affected by it. In his speech the noble Lord, Lord Sandford, appealed to noble Lords to speak from personal experience. I had not intended to introduce a personal note but I will just mention, in passing, that I was myself a

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polio victim and it took me more than two years to re-learn how to walk.
Polio involves long-term, and often lifelong, disablement. Fortunately very great advances have been made in research, and the numbers who suffer serious consequences from polio have been greatly reduced by modern vaccines. Nevertheless, there are numbers of people living to-day who have been paralysed by polio, and there are still cases of persons who suffer seriously from polio contracted either in this country or abroad. The sudden paralysis often involves a complete change in a person's way of life. For some it is difficult to become reconciled to that change, although I am bound to say that the great majority respond to the challenge cheerfully and with a remarkable determination to overcome the disability. There is no doubt, however, that the process of reconciliation is made more difficult when the disablement is accompanied by the hardships of poverty, that poverty being a consequence of the disablement.
I recognise that poverty is relative. That phrase has been used by several noble Lords during this debate. A man who is earning a good wage or salary, and who suddenly finds himself solely dependent upon social security, may yet be nominally much better off than some starving peasant in one of the underdeveloped countries, but the hardship is none the less real. I should like to give a few examples which have been provided for me by a body known as the British Polio Fellowship.
The first case concerns a salesman for an export firm who was earning approximately £50 a week. He contracted polio when abroad, within a year of his appointment, and became totally paralysed. He receives no disablement pension, because of course polio is not an industrial disease. I believe that if he had contracted polio when in the Forces he would have been provided for, but in these circumstances there is no disablement pension, as I understand the matter. His savings were soon used up. His wife was in poor health but she went out to work, and then, unfortunately, she had to give up that work owing to her own ill-health. They had one young child. They are now dependent on sickness benefit and supplementary benefit from
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the Ministry of Social Security. There is also a small grant available from a charity, but it is difficult to make ends meet—and one has to recollect that a little time ago that man was in good health and was earning £50 a week.
The second case is one of a husband and wife. It does not often happen that both husband and wife are afflicted with polio, but I know of a few cases. In this case the husband was a chartered accountant, and he died in March 1967. His widow is paralysed, though she manages to get about with the aid of a calliper and two sticks. She hay three young children, aged 7, 5, and 15 months. In a way she may be comparatively fortunate because she owns a small bungalow; but there are heavy outgoings. Her income is the widow's pension and the family allowance. This widow hopes to go out to work when the children are a little older; but at present it is a hard struggle.
The third case relates to a teacher who was working in Nigeria. He had a university degree and very good prospects. He caught polio in 1965, at the age of twenty-six. He was an only child and unmarried. His father was killed in the last world war. His mother had remarried and had a family by her second marriage, and therefore other commitments. He again is one who ha; had to face a combination of severe physical disability and the experience of poverty. He is dependent on social security and some financial assistance from his n- other and stepfather. These are just bare facts, but when one knows all the human circumstances I think one appreciates the seriousness of the problem.
In some cases the circumstance; are exceptionally complex. For example, there is the case of a man of thirty-two years of age who caught polio, and the worry, not so much of the disablement but of the financial consequences, led to a nervous breakdown; and this in turn had serious psychological effects on his wife and daughter. The case is one of those taken up by the British Polio Fellowship, and if the circumstances had been known earlier, and help had peen given earlier, much of the tragedy night have been averted. I agree that it would be a mistake to assume that all t lee problems can be solved by remedying the financial anomalies. Nevertheless

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there are grave financial anomalies in the present situation.
Finally, since I have been talking about disability, I should like to pay tribute to the report of the B.M.A. Working Party on Aids for the Disabled, but I think this shows clearly the need for greater coordination in the provision of aids, and this adds point to the view which I think many have expressed in this debate; namely, that there are still serious imperfections in our social services, and the sooner they are remedied the better.
7.14 p.m.
LORD ARCHIBALD: My Lords, I apologise for intervening at this late stage without having put my name down, and I thank my noble friend Lord Gifford for agreeing to stand back for a moment. I felt impelled to intervene because of a remark made earlier in the debate by the noble Lord, Lord Sandford, about Members of your Lordships' House who had themselves experienced poverty. I think I can claim to have had that experience. When I was born, 70 years ago I admit, my father was earning £1 a week, and even allowing for the different value of money of to-day as against that time noble Lords will agree that that was pretty well on the poverty line. Later, in the big trade depression of 1907–8, of which one very seldom hears because no statistics of unemployment were kept in those days. he was unemployed, partly from illness and partly because of the trade depression, for the best part of a year. There was no unemployment benefit, so that during that period the small amount of savings were used up, household goods were pawned and finally there was the indignity of going for Poor Law relief.
I do not want to make a big, colourful story of this, but I should like to tell your Lordships of my father's reaction the first time that he went before the parish council to apply for Poor Law relief. He came back furious with indignation, not on his own behalf but on behalf of the man who was before him in the queue going up to the table where the councillors were sitting. The chairman had said to the man in front, "That is a very good jacket you have on", and the man stripped his jacket to show that he had
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nothing under it. That is how the poor were treated 60 or 65 years ago.
There are only two points I want to make. One is that enormous progress has been made since the days of my childhood. I am not going to evaluate which Government did what, which Government deserves the credit. What I am going to claim quite boldly—and I know that noble Lords on the other side will resent this—is that the improvement has been due to the tremendous propaganda of the Labour Party against poverty in the midst of plenty. That propaganda has created a climate of opinion which no Government dare disregard, with the result that improvements have been made by Governments of different political colour. That is the main point, that there has been an enormous improvement.
My final point is that the improvement is not yet good enough, and I am particularly indebted to my noble friend Lord Wells-Pestell for the information that he put before us with regard to the situations in which to-day it is not yet good enough. I therefore hope that the climate of opinion for improvement in social conditions will grow, that there will be no let-up; and I think the discussion this afternoon indicates that there will be no let-up in the drive towards the final and complete elimination of poverty in a wealthy country.
7.19 p.m.
LORD GIFFORD: My Lords, may I begin by apologising to the noble Lord, Lord Beaumont of Whitley, and to the House for not having been here at the beginning of the debate. I was at work at my trade and I was quite unable to get away. Poverty is a subject about which I could speak with very great passion. I live in the heart of North Kensington, one of those grey twilight areas where poverty lurks behind the elegant facades of which the noble Lord, Lord Soper, spoke; a community beset by all the worst results of poverty, appalling housing shortage, appalling conditions in the houses that exist, overcrowding, racial tensions, and almost total lack of facilities for play and recreation. It is an area favoured only by the devoted men and women, churchmen, volunteers, social workers and ordinary citizens, who give up their time to try to solve the problems. They can do no more than scratch

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at the surface, and their experience of an area like that emphasises that whatever the progress of the past, if we look into the future nothing but a crusade against poverty can bring any kind of opportunity to the inhabitants of a community like that; and there are many all over the country.
I shall limit my remarks to a more particular aspect of the problem, and speak as a lawyer. As a lawyer, what appals me about an area such as Notting Hill is the failure of those who live there to exercise their legal rights, to obtain the legal advice and representation which they need. The poor, like everyone else, have rights guaranteed by the law, some of them, many of them indeed, introduced in the last four years, such as security of tenure, the right to a fair rent, the right to improved social security benefits. But in case after case one finds that, whether through ignorance or apathy, fear or sheer financial hardship, the protection of the law somehow passes people by. The rich man with a legal problem consults his family solicitor as he consults his doctor. The poor man, thank goodness! has a doctor to consult, but he has no family solicitor or any kind of adequate substitute. Indeed, when one bears in mind the kind of problems which confront poor people, the traumas involved in the kind of injustices which attend a poor community, one realises that there are always people ready to take advantage of the poor, and to take advantage, one might mention most particularly in this connection, of the immigrant—Irish, Asian, or West Indian. The need for someone to fight for his rights is imperative.
I may be asked: how can this be, when we boast one of the finest legal aid systems in the world? I pay tribute to that legal aid system—it was one of the finest creations of the post-war Labour Government—but in spite of that, this situation exists. It exists in the first place because of ignorance. Take, for instance, the Rent Acts. The Rent Act 1965 was a magnificent piece of legislation. A recent survey published in New Society on September 12 of this year showed that in eight streets in Islington nearly half of the tenants had never heard of the Rent Acts, and of those that had about one-third had no idea what they were about. In other fields, I have no
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doubt that there are thousands of victims of road accidents, victims of shoddy consumer and trade dealings, who have no knowledge of the possibilities of redress.
In the second place, even if the need for legally qualified advice is recognised, it is rare that it will be sought. In many deprived areas there are simply no solicitors at all. I do not blame the solicitors, because of course they go to areas where a commercial or monied clientele can be found, and not to areas of poverty. But, more significantly than that, one finds again and again that there is a deep-rooted suspicion in the minds of people living in poor communities of the whole legal process, which so often seems to favour and to be the handmaid of the dominant class in society—the landlord, the hire-purchase company or the police.
There is a fear that the solicitor "will not be interested in my case", a fear which indeed is justified, because naturally there may not be the same interest in a poor man's £20 claim as in a rich man's £200 claim, even though to the one man the claim is as important as to the other. There is a fear, too, that vast sums of money would De involved, a fear often justified because there are many big gaps still in the legal aid system: appearances before tribunals, appearances in small cases before magistrates' courts and in prosecuting small claims in the county courts.
The inadequacy of the legal services provided and available to the poor their failure to exercise those rights and the fact that those rights do not get exercised is something which has been recognised this week in the publication of two significant reports, one by a group of Conservative lawyers and one by a group of Labour lawyers. Both groups recognise the urgency of remedying this need. If you look upon the legal aid system as the protector and guarantor of the rights of the individual and as a weapon in the hands of those who are subjected to injustice, then on those report: you will agree that this is a situation which must be remedied.
How can it be remedied? Not, I think, by merely extending the ambit of the legal aid system or strengthening its powers. It would require an enormous financial outlay to cover all

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the small claims which the poor need to have maintained for them and to make it not only attractive but profitable for solicitors to practise in this kind of area. The outlay would be enormous. Even so, I do not think that you would get people going to lawyers and seeking their legal advice. A much more effective remedy would be the establishment in the heart of these areas of legal centres or offices staffed by high quality, full-time lawyers committed to the needs of that community, and devoting their time and energy and brains to it. This idea was put forward in the Labour lawyers' report which has been published by the Fabian Society under the title Justice for All. It is a scheme, too, which ought to be financed by the State as an ancillary and necessary service to the legal aid system.
I think it could make a substantial and vital impact on the morale and prospects of a poor community if lawyers, trusted by the community, could be readily available, giving the same skilled advice and representation to tenants as, for instance, their landlords so assiduously and successfully seek; devoting the same kind of brainpower into securing for poor people the maximum legal benefit under social security as is devoted—and how successfully !—by skilled lawyers to enabling the rich to pay the minimum legal taxes. Indeed, however, well staffed a social security office is, inevitably there are injustices, some of which have been pinpointed by the Child Poverty Action Group. No real bureaucracy can be without injustice, and one needs legal thinking brought to bear on the problem.
Of course, the existence of a service such as this would not end the poverty; but if success in the battle against poverty lies, as I believe it does, not merely in making available generous security benefits but in the capacity of people in poor communities themselves to fight as individuals for their rights when they are denied them and against the injustices to which they are particularly prone, then such a service could provide a real remedy. It is now, and has been for the last few years, a shining beacon of the legal profession in the United States. The existence of services like these has been an essential feature of the war
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against poverty in that country, and it could be so here as well.
One of the essential features of a healthy society is that the law and the legal process should be known and utilised and respected. In areas such as Notting Hill it is little known and little utilised, and it is hardly to be wondered at if sometimes it is little respected. As a lawyer, I am ready to fight to see ended the present ignorance and apathy, unhealthy as it is to the community and often tragic to the individual, and to bring the law and the machinery of law into the areas which need its protection.
7.30 p.m.
LORD TAYLOR OF GRYFE: My Lords, I wish to thank the noble Lord, Lord Beaumont of Whitley, for introducing this subject to-day. While he may have felt discouraged from introducing this debate because of the imminent publication of a White Paper covering this field, I am glad that he decided to go ahead; because before any White Paper is acceptable to us—and to the country—I am sure that it is essential to create a public opinion that will welcome the extension of social services which I believe is envisaged in the White Paper.
I am glad, too, that we have had the opportunity in this House of making a contribution to changing public attitudes in relation to poverty, and that the noble Lord, by this debate, has been able to create an atmosphere in this House of acceptance of the State's responsibility in this field. While we have discussed various forms of organisation for the administration of social services, it must be faced, in the light of the extension of poverty in our midst, that this extra effort will probably cost more money. I have been alarmed in the past few days to hear the speeches that have been made about cutting Government expenditure, and I feel it is important that, whatever economies are contemplated in Government expenditure, they should not be at the expense of the social services, of which we are so proud.
I was interested to hear the noble Lord, Lord Sandford, quote the experience of the United States of America, the most affluent of our affluent States, in which he said that 18 million Americans were living below the poverty line, because America is the classic

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example of regarding public expenditure as something wicked and private expenditure as something virtuous. As a result of this there exists the situation which John Kenneth Galbraith described as public squalor alongside private affluence. It is good to-day that in this House we have accepted the State's responsibility for meeting some of the great social needs that confront us. I hope that in the campaigns which are being waged for cutting Government expenditure it will be recognised that a good system demands that we make provision for the needy, the aged and the sick in our midst.
It is often assumed that there is no poverty in our midst, and perhaps today's debate, and the publicity which I hope it will receive, will help to change that belief. I shall not repeat the statistics which have been given, and which have been accepted by all who spoke in this debate. One figure remains with me, however. It is the statement that nearly half a million families and one and a quarter million children were either on supplementary benefit level or had incomes below that level. Half a million families, my Lords!
Earlier to-day in this House—a very full House—there was generated a good deal of excitement, with questions. Members were lively and excited about the future of the Falkland Islands. I am not going to enter into that controversial field, but what we have been discussing subsequently is the case of half a million families and one and a quarter million children. The total population of the Falkland Islands, according to Whitaker's Almanack, is 2,164 persons. I wish them well, and I hope that we shall be able to solve their problem. But let us get a sense of proportion about the matters which generate our attention and our concern. I believe that this problem of poverty is one of the problems which this House has done well to discuss; and, as I have said, I hope that it will create a public opinion which accepts the State's responsibility in this field.
Perhaps I may be excused if I quote some statistics about Scotland. These are not statistics of which Scots are proud, but I think I should highlight the degree of poverty that exists in this somewhat underdeveloped area. An analysis of all adult male earnings in Scotland, in all
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occupations, shows that 24 per cent. were under £15 per week, as against 11 per cent. in South-Eastern England and 15 per cent. in the Midlands. In Scotland, 10 per cent. were below £12 7s. Od. per week, while in the South-East the lowest earning 10 per cent. were below £14 14s. 0d. per week.
LORD ILFORD: My Lords, perhaps the noble Lord will forgive me if interrupt him for a moment. He will not forget that rents in Scotland are exceptionally low compared with those in England.
LORD TAYLOR OF GRYFE: My Lords, I accept that rents tend to low, particularly in the large housing estates in Scotland. But there are other additional costs which have to be met by people in Scotland because of the distances—for transport, and so on. However, I accept the noble Lord's point.
Let me just give your Lordships some more information which will perhaps put a proper balance on the picture. In the City of Glasgow almost 50 per cent. of the population have been rehoused. This is a city of nearly one million inhabitants. Despite that tremendous programme, at the moment nearly two-fifths of the remaining dwellings in Glasgow are without a fixed bath or shower; on,-fifth lack an internal water closet; two-fifths do not have hot water supply to three points; that is, bath, wash-hand basin, and sink. The number of totally unfit houses in Glasgow is 11,000; and 75,000 are sub-standard and not improvable. In other words, my Lords, 41 per cent. of the City's stock of housing is estimated to be below standard.
I can recall that I had the distinction, which I believe I share with the noble Lord, Lord Archibald, of representing the Bridgeton Constituency on the Glasgow Town Council (it is not many yean ago, and it still exists) and it was not uncommon to visit homes where five or six people were occupying a single room; to see the dampness in the walls; to see the baby in the pram because there was no other place for the child to sleep in houses that were rat-infested; and it was not rare to see the children's faces scarred by the vermin bites. There has been a review, a more recent review than my own personal experience in Bridgeton, by Dr. Arneil, who has been examining

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the recurrence of rickets in Glasgow. Rickets is a disease which we thought had been cured, but rickets are appearing in children in the City of Glasgow. In Bridgeton Dr. Arneil found that only 15 per cent. of the families had their own inside W.C. and only 6 per cent. had a bath. Over half had no hot water, and nearly 90 per cent. of the people lived in one or two rooms. In that part of the City not one family on National Assistance lived in more than two rooms, and the average density in the single apartment dwelling was 4·8 persons per room.
I used to listen with great interest to a very great man, Mr. Victor Gollancz, who used to make appeals to the conscience and charity of people. Before he made an appeal at a public meeting, particularly in relation to the victims of the concentration camps, he used to sit quietly for an hour and try to imagine the sufferings of the people for whom he was appealing. We have discussed poverty so much this afternoon that I think the word "poverty" has almost become a cliché, and it is extremely difficult for us to imagine precisely what it means to have an average of 4·8 persons per room living in single apartment dwellings in the heart of Glasgow. It is a situation of growing hopelessness, and there is inevitably escapism in gambling and drinking, and even gangsterism. But these are the products of that kind of situation. In Scotland, deaths in the first year of life in children of unskilled workers amount to 37·2 per thousand live births, more than three times as frequent as deaths of children of professional men. A child born into the home of an unskilled worker has much less chance of surviving than the child who by accident of birth has been born into the home of a professional man. These are the facts of poverty in Scotland and the City of Glasgow, and I am sure that they can be repeated in examples given by other noble Lords taking part in this debate.
It is right that, although one finds it necessary to draw attention to the conditions which exist, one should pay tribute to the Government for what has been achieved. The noble Lord, Lord Kennet, has to-day given details of the improved scale and outlined some of the enormous improvements in social benefits over the
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past two years. It is to be hoped that in the new scheme to be contained in the White Paper the standards will be maintained and that other benefits will be introduced which will avoid some of the discrepancies and difficulties which I have mentioned.
One sometimes imagines that poverty is strictly related to the poor housing conditions which I have described, but in examining cases in the books of social workers in the West of Scotland in the past few weeks, I have been impressed by the fact that poverty is not so prevalent in the Gorbals as it is in the new housing estates. When families move from low-rental slums into high-rental local authority housing they face the additional burdens of the all-electric houses to which they move. In some areas in smokeless zones their fuel bills jumped by 10s. to 18s. a week. I have heard of proceedings being taken against families who, because they could not afford the smokeless fuel, had burned the usual type of coal. Because of these changes in their life, because they have to furnish a greater number of rooms, their hire purchase debts accumulate, and they have to pay more for their heating, lighting, and their travel to and from work. All these things, plus an increasing burden upon families who move into the new housing areas, mean that low-earning workers find it difficult to maintain a reasonable standard of life and meet their commitments.
I agree with the noble Lord, Lord Soper, that alcohol and betting are contributory factors to poverty. I commend his advice to the Government that there ought to be some control of the advertising of alcohol, and that we should look again at the spread of the opportunities for gambling caused by the extension of betting shops. Although these people live in the sort of drabness which I have tried to describe, they are surrounded by an advertising industry which spends £500 million per annum in telling people to take "Get away holidays for get away people", telling people about holidays in the sunshine, creating needs which are not real. I think this creates tensions in our society. Children are influenced by advertising. and if they are denied many of the things which are advertised in the glossy magazines or

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upon the television screen, they feel rejected, as do their parents.
Although the State will inevitably play an increasing part in meeting the needs of social welfare, it would be a great mistake to neglect the great resources which are available in our country and the desire to help on the part of many people who are active in the voluntary agencies. It would be a great mistake to regard social service and community welfare as being the province of middle-aged, middle-class ladies who have a bit of time to spare. I admire the work of the Women's Voluntary Service and other agencies of that type, but at the same time as we glamorise for our youth the Voluntary Service Overseas, we should also glamorise the opportunities for service by young people in their own communities. Therefore, I hope that the Government not only will be concerned to extend their own responsibilities in this matter but will encourage in the community the idea of service.
We must be very careful about the whole idea of "giving" service. When I was engaged in post-war relief in Europe at the end of the war I recall working alongside a great veteran of relief work. She said, "What we have to do is to see that we preserve the self-respect of the people who are receiving clothing and other goods." I was inclined to be somewhat impatient in my rush to get things done, but I realise that it is terribly important in any welfare work not to humiliate people just because they are needy or poor. We must conduct our services, whether they be State or voluntary, in a spirit of working together in the interests of establishing and creating a better community.
Furthermore, in a great many of the policies which the Government must devise to meet the existing economic problems we must also be careful not to legislate unduly in favour of indirect taxation, selective employment tax and other impositions which add to the total cost of food and other essentials. I was interested to hear in the other place speeches suggesting that there should be a switch from direct farm support to a levy on imports, or that there might be some other value-added tax. We must he extremely careful that all the measures which are proposed to meet the current economic crisis are not levied in such a
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way that the poorest in our midst are hurt. I hope that that will be accepted.
I accept the point of the noble Lord, Lord Wells-Pestell, that the gap in our community is growing greater. Figures were given in the New Statesman two or three weeks ago. I hope that we shall not too easily accept the inflationary pressures of the Trades Union Congress, because there again inflation is at the expense of the poorest sections of our community. I hope, too, that we shall not accept the demands of the C.B.I. that greater opportunities and incentives should be offered to the high-earning minority. We must be careful about the kind of society which we are trying to create, and recognise that while there are poor people in our midst who are badly organised, who are perhaps an ineffective pressure group, who have no political funds like trade unions or private companies to donate to political Parties, who may not even be important in terms of voting power and who cannot withdraw their labour, they have a claim on our country and on our people. Their appeal is to the Christian conscience of our people, and our people will be poorer spiritually if they do not recognise that claim.
7.52 p.m.
LORD MITCHISON: My Lords, I promise to be brief. When St. Francis preached about poverty he preached naked and he reduced the people of Assisi to tears, but I do not think your Lordships have taken quite enough clothes off. I mean, of course, metaphorical clothes. In fact, as a community I do not think we have taken quite enough clothes off. As I see it, there is nothing inevitable in poverty. There is nothing that one ought not to be able to avoid. It has no moral justifications, at any rate nowadays, except one given by my noble friend who has just sat down, and I think it was that which made St. Francis think it beautiful—that it was, as it were, a way towards working for the community. Be that as it may, let me go a little further in what I am saying to-night.
We have had a very interesting debate, for which we ought to be extremely grateful to the mover of the Motion. '3ut it has ranged far and wide. There have been all kinds of things considered—such-and-such a report, polio, and half-a-dozen other things, all properly related of

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course to poverty, but none of them looking at the fundamental problem of what we are going to do about it. We are told that the Government are doing splendidly. I am sure they would all get up and say so. But Governments have been doing splendidly for generations now and, as my noble friend Lord Wells-Pestell said, they have made astonishing little difference. I make no apology for giving your Lordships one or two of the facts about this. They are quite simple.
I should like to quote from a book called The Wealth of Britain which was published this year. On page 264 the authors come to this conclusion:
"If full employment, the action of powerful trade unions and the political struggles of this century have been unable to affect the share-out of incomes since 1920"—
and that they have shown to be the case—
"the main reason lies in the power of one factor working the other way—the uneven distribution of property. There are calculations which purport to show that the inequality of property holdings has also been lessened"—
and then they refer to a table which shows the proportion of the national wealth possessed—and I draw your Lordships' attention to this—by the top 1 per cent. of the population. According to the table, it has lessened from 65 per cent. to 70 per cent. in 1911–13, to 42 per cent. in 1951–56 and 42 per cent. again in 1960. But the authors point out, and I think quite rightly, that the inequality is still strikingly great—much greater, for example, than in the United States of America—and that since rich people receive higher returns on their capital than poorer people the income derived from this wealth is even more unequal. At least it appears to be declining, yet even on this showing there was no progress in the 1950s—and, my Lords, there were 13 years of Conservative Government.
Then the authors refer to another calculation:
"The main criticism against these estimates is that, with a greater or lesser degree of sophistication, they depend on the returns of death duties and, therefore, neglect the growing efficiency with which large estates avoid these payments."
I will not trouble your Lordships with the next part. The book goes on:
"Taking all these factors into account, it may well be that the years since the Second
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World War have seen a change in the other direction—a growing inequality of property."
That is what my noble friend Lord Wells-Pestell said. This book agrees with him, and I agree with him.
It has been a growing inequality, not only of property but of power, too; and at present the rich in this country are getting richer and more powerful. That does not accord with any moral standard whatever; it does not accord with ordinary sense, and it does not accord with political stability. Time may be rather short. I am getting on in years and I do not know what I shall see towards the end of my life. But I feel that the present society in which we live, with those figures moving as they are, is essentially unstable; and it is unstable because it is wrong.
I cannot think that the House of Lords in 1968, rather late at night, is going to do much about it—I do not expect it to. But one may at least just make this point: that the absolutely grossly unequal distribution, the growingly unequal distribution, of property in this country is probably one of the main factors—possibly the main factor—that cause poverty among us, and it cannot be right. It is a perfectly simple proposition. If we did not all live in a rather complicated society, if we had not all been brought up to accept a great many ideas which seemed necessary for that society, we should say to ourselves, "How can people live together like this?" It is a wicked thing as I see it, and have spent my life saying so. I see no reason to alter my opinion now.
I feel that a certain change has occurred. A few years ago one could have said, "There is a possibility that the position may be changed peacefully without too much convulsion." But the chances of that happening are getting smaller and smaller, and in this country we are approaching, with the orderly respectability of British conventions, a revolutionary situation which we do not really recognise. It must be a revolutionary situation. Something as wrong as this cannot go on. It may lead to what we were told about polio. It may lead to all of the things we were told about to-day. It may, at least, lead to what we were told just now about the present state of Glasgow. Those are the symptoms. Those are the spots in the

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measles, and you do not cure the disease merely by trying to cure the spots. By all means deal with the spots; but, sooner or later, if this society is to continue as it has been built up since the Industrial Revolution, we shall have to face the problem of the gross wickedness of the maldistribution of property in this country.
We were told that the percentage for the poor was to be 50 per cent. There is good authority for that. Capital gains tax is only 30 per cent. We might perhaps begin with that. There are other taxation measures—wealth tax, and things of that sort—but what I should like to see is this Government (or, if not this Government, some other Government) facing up to the question of what they are going to do about the incredible inequality in the distribution of wealth in our society. I say this to them as a candid friend. I suppose, but at any rate a very old one: "If you lose the next Election, my boys, you will lose it because you have done too little, and not because you have done too much."
8.1 p.m.
LORD DRUMALBYN: My Lords, we are approaching the end of an extremely interesting debate and one which, as the noble Lord said, has ranged over a great number of subjects. We are all most grateful to the noble Lord, Lord Beaumont. I think he must be almost embarrassed by the thanks which have been expressed to him for introducing this debate, but they are none the less real, and not least because he made such a brief though comprehensive speech and pinpointed the main problems so admirably. My Lords, one of the things to which he drew attention was the duty to see that, so far as possible, nobody lives in poverty; and, of course, one then immediately has to decide what we mean by that. There seems to have been fairly general agreement in this debate that the only yardstick, the only way we can discuss this matter, is to take the level of supplementary benefit, which is supposed to ensure that people can meet their essential needs, and to say that if they cannot meet their essential needs then they are in poverty.
I was very much interested in the speech that the noble Lord, Lord Kennet, made. If I may say so, I thought it
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was a very good one. One of the points he made was that the higher one draws the line of the poverty level the greater the number of people who will fall below it, and therefore the greater the number of people who will, by definition, appear to be poor. This has undoubtedly been happening in recent times. Anyone who has ever been at the Ministry of National Insurance at a time when benefits have been increased is well aware of this, because it has invariably happened, and whoever has been at the Box has been a real target for just this very reason. So I have every sympathy with what the noble Lord, Lord Kennet, said in this regard. It is not that it is therefore disgraceful that there should be two million people on supplementary benefit. This is certainly not the case, as my noble friend explained. But there is a general feeling, I think, that in the long run National Insurance benefits (and this point was thrown at me when I was in the Ministry) ought to be enough to cover all normal needs. Indeed, I thin it is true to say that, originally, National Assistance was intended to be transitional; and the noble Lord, Lord Kennet, has said that we are to have more transitional arrangements. Transitional arrangements tend to persist. I am afraid. The real nigger in the woodpile here, of course, as my noble friend Lord Ilford has said, is rents.
The right reverend Prelate the Bishop of Winchester, in a very interesting speech, made two points of which I made a note. One was when talking about Mr. Asquith's arrangement;—the scheme that he then introduced and the criticism of it, that it was a destruction of all thrift. I am afraid that to some extent this is true of any means tested scheme. Of course, Mr. Asquith's was a means-tested scheme, and in the end we got away from it. The curious thing was that I think for thirty years before Mr. Asquith introduced his plan this whole question of whether one should hive a contributory scheme or a means-tested scheme had been discussed. In the end, of course, we came to a contributory scheme, and I think we would all consider that to be right. It makes people feel that they have a real basis of entitlement, by virtue of their contributions, to what they are going to get. The right reverend Prelate also spoke about the disabled who have never been insured and

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therefore get no pension. This, of course, is a particularly difficult problem. As in the case of many of the problems which have been raised to-day, we shall look with some care to see whether the Government's new scheme covers this kind of case—that, for example. of children who are disabled from birth and therefore have never been insured in their own right.
Then, of course, there is also the case of wives—and here I am not quite so sure what is the right course to pursue. It is sometimes argued that cash benefits as of right in respect of a wife cannot be included in an insurance scheme. I am not sure about this. I do not see why not. I see the great difficulty of including them in an insurance scheme so far as judging whether they were ill enough, within the meaning of some rules which one would have to make, to be entitled to the benefit; but, generally speaking, a man is insuring his ability to earn, and to the extent that his capacity to earn is impaired through the illness of his wife this seems to be an insurable risk. It is simply a question of establishing the right in each particular case; and I wonder whether it would not be possible to provide for a constant attendance allowance in some way out of the National Insurance Fund.
I look forward to what the noble Baroness will have to say about the very interesting proposal made by the noble Lord, Lord Donaldson. that part-time earnings in such circumstances, at any rate where the wife is ill. should be made up to supplementary benefit level. I think this is a point that is worth considering. There is already, of course, one breach in the rule that those who receive benefits must have paid for them by their own insurance contributions, and that is the case, which has already been mentioned in the course of the debate, of unmarried mothers, whose earnings can be made up to supplementary benefit level. So this is not an absolute rule even now, and perhaps the breach could be widened a little as breaches always can be, though with great resistance from the Treasury.
My Lords, I do not want to pursue the course that noble Lords have taken in considering the distribution of wealth rather than the distribution of poverty
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to-day—indeed, I would doubt whether the two are wholly connected. After all, we are concerned with the proceeds of wealth, the distribution of incomes, rather than with the distribution of capital. I know, of course, that people can dispose of their capital and spend it, but to the extent that incomes are now very much levelled down when compared with what they used to be I think that this may have been one of the causes of the fact that poverty as we used to know it—and I think everybody has agreed with this—hardly exists to-day. There are not the great blocks of poverty that there used to be.
I would put it in this way: that there are really three sources of poverty, given the definition of poverty that anything under supplementary benefit level counts as poverty. There are three elements: first of all, there is inability to work or to find work; then there is inability to earn enough to cover one's essential needs; and then there is inability to go to work because of family circumstances—a point which I have already covered. So far as cash needs are concerned, the inability to work or to find work would appear to be adequately covered already, and has been further covered by the graduated unemployment and sickness benefits scheme.
LORD MITCHISON: My Lords, would the noble Lord allow me to interrupt him to ask him when he gets Hansard to-morrow to look at the first sentence I quoted which dealt exactly with the point he is now putting?
LORD DRUMALBYN: My Lords, I will certainly do that but at the moment I am not quite certain of the point the noble Lord is referring to.
My Lords, if a man is unable to work or to find work, then social security provides enough by definition in normal cases to keep him from statutory poverty. It will, by and large, ensure that he receives allowances for himself and his family plus his rent and rates. Provided that he can manage his affairs, the present levels of benefit, including supplementary benefit, should enable him to get by without great hardship, certainly for a time—I shall come later on to the question of housing. He may at that point have to abandon some of the things he is buying on hire-purchase. This is one of the

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facts of life; that is the nature of the contract of hire-purchase.
The main problems of poverty arise with those who are not entitled to claim supplementary benefit—there is no doubt of that: it has been amply illustrated in the debate: those who are in full employment but earning less than the supplementary benefit levels of payment, and those affected by the wage stop; those not working but who, if they were, would be earning less than the supplementary benefit. If one eliminates what I may call self-induced poverty, excessive spending leading to debt, or sheer bad management, there seem to be three main factors to be considered: first, earnings; second, family circumstances; and, third, rent and rates. Obviously, a combination of low earnings, a large family, high rents and rates lead to the worst cases of poverty. If sickness is added, the cup is then full; or, to put it another way, the larder is empty.
The Supplementary Benefits Commission Report on The Administration of the Wage Stop, which I do not think has been mentioned in the debate so far (it was presented just a year ago), found that in about one-third of the small number of cases examined—it was only a small number—the family was unable to manage and a further one-third could only just manage: but many of those were falling into debt and half the total had rent arrears. In one-third of the cases the deduction from the normal supplementary benefits was over £2 10s. a week and in two cases out of 52 it was at least £6.
To some extent, the Supplementary Benefits Commission can mitigate hardship by discretionary payments for fuel, clothing, bedding and food; and one-third of the cases had had their gas and electricity cut off at some time. This is a very typical case, because these payments come periodically, and the system of weekly benefits or of weekly supplements does not really cater for this situation. I know that in some cases arrangements can be made; but this is an important factor in poverty. It tends to increase the anxiety of poverty.
Secondly, the Supplementary Benefits Commission can mitigate hardship by helping to ensure that families receive the concessions to which they are entitled—rent rebates where they occupy
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local authority housing, free school meals, welfare milk, and so on. This is of extreme importance. But the Supplementary Benefits Commission can operate only where there is an entitlement to supplementary benefit, where the wage-earner is not working. And, as the noble Lord, Lord Wells-Pestell, said, the Report Circumstances of Families showed that this means that in only one in eight cases, 20,000 out of 160,000 families, can the Supplementary Benefits Commission help. The remaining cases are those of low earnings.
The doubling of the family allowances has helped a lot but it has not yet solved the problem. There are still. apparently, some 230,000 to 250,000 children living in families with means below the supplementary benefit levels. The noble Lord, Lord Cooper, advocated a minimum wage in order to get over this difficulty. But this does not give the flexibility needed. The minimum wage is much more than minimum for some and not enough for others. If we had a system like the French system where the employers pay family allowances on a much greater scale and side by side with that you have equal pay as the base. then, I of course, you get a different set of circumstances altogether. If we are ultimately to go into the Common Market we may have to come towards that kind of arrangement.
How can we rescue the remaining 250,000 children from poverty and what is now the extent of it? It is rather typical that in this debate we have had necessarily to quote figures which are well out of date. Surely this illustrates the fact that, just as on the basis of that Report into the circumstances of families it was possible to introduce increased family allowances—and I give the Government full credit for this and particularly the Minister of Social Security at the time, because I know that it is very difficult to get the Treasury to do this—then we ought to have a continuing operation and to look every three years into the situation. In that way, each time we may be able to halve—we cannot do it all at once—the number of those in real poverty and so come down to a bare minimum.
The main variables in all cases are I rent and the size of the family. The basic

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need in all cases is the same. The incomes are all limited by what they can earn plus the family allowance—and that is why family allowances are so very important. They have a crucial role to play in the relief of poverty—and not only in the case of the 2½per cent. or so with joint earnings below the supplementary benefits level. I do not know whether this is the correct percentage, but obviously 160,000 families was roughly 5 per cent. and it seems now to be approximately half.
Family allowances differ in essence from all other social security payments in that they come direct from the Exchequer and are akin to retirement pensions in that they are taxable. Like the basic retirement pension they must be universal if only because to administer them on a means test would be both unfair and inefficient. A means test would penalise thrift and penalise the effort to improve one's own circumstances. Being universal, the cost of them should, it seems to me, also be borne by the whole community, and it seems to me wrong to put any extra cost on those who have children. It seems wrong that children's allowances should be reduced in order to pay for higher family allowances.
Children's allowances and married allowances are, I should have thought, too low already and will have to be considerably increased if equal pay is enforced. Either they should be paid for by the employers—which would mean what the noble Lord, Lord Taylor, has been talking about: the prices of goods and services would go up and the cost would be met in proportion to the consumption of the goods and services—or out of general taxation or, perhaps, out of a mixture of the two. That seems to me to be the essence of the matter. Family allowances are, as Sir John Walley has said, "a practical expression of our common citizenship", and are the biggest single factor in the relief of poverty due to the size of the family.
There is another factor which is much more intractable, I believe, and that is rent. Of three people with identical low earnings, one may have the good fortune to occupy a local authority house in an area where rents are subsidised by rates;
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the second may be paying a high rent for so-called furnished accommodation and the third may be literally homeless. A family which is homeless is certainly in poverty. I believe that last year the number of people in part III temporary accommodation in England and Wales was over 15,500, compared with fewer than 11,000 at the end of 1963. Of these 15,500 nearly 10,000 were children. As to overcrowding there is something like 400,000, I believe, who live in such conditions—I think that figure is right. In Glasgow there are some 90,000 living at least three to a room. I think this bears out the figures given by the noble Lord, Lord Taylor of Gryfe.
The Inquiry into family circumstances found that 12 per cent. of families and 17 per cent. of children were living in overcrowded conditions. Nearly one-third of families with four or more children where the father was in full-time work were overcrowded, and over one-third of fatherless families. So long as these conditions subsist it is wrong, in my view, that subsidised local authority housing should be under-occupied. I am told that in London alone there are 30,000 G.L.C. houses where there are two spare bedrooms, and 6,000 with three spare bedrooms. Surely it is wrong that people should be able to make money out of letting spare rooms in subsidised local authority housing. It is also wrong that private houses should be allowed to fall into disrepair because the rent is kept down and the landlord is forced to subsidise his tenants.
The steps proposed by the Government to renovate and modernise private housing are certainly welcome in themselves, but they are bound to lead to increases in rent. Until there is once again an adequate supply of houses I see no reason why there should not be some means devised to help people whose earnings fall below supplementary benefit level to pay a fair rent for their houses, given the control of fair rents which exists.
My Lords, so far I have dealt with family poverty, and this leads to the further question of care. I should like to say a word or two about that. In general, care is provided by local authorities with power to make such charges as they think fit in particular circumstances, and they have to judge whether care is

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necessary. If it is necessary, say where a wife of a family is sick, why should not the charge be met by a National Insurance payment? It is a perfectly insurable risk. The growing burden of the rates is one of the greatest handicaps to meeting the needs of the citizen in a local authority. One way of dealing with the growing rate burden, especially in the bad areas, would be by spreading the liability over the whole country. Certainly the growing burden of the rates will continue to be an increasing problem, and I should have thought this was one way in which the rates could be kept down.
Of course, the question of the care of the aged looms largest of all. The retirement pension is calculated on the basis that an old person can look after himself or herself. If he or she cannot, care has to be provided or else that person will be in poverty and unable to meet his or her needs. The report issued in March by the Office of Health Economics estimated that while some 268,000 people are getting home helps there are some 348,000 people who feel that they should be getting home helps. While 69,000 people are getting hot meals from mobile services there are 361,000 people who would like to get them. This gives some indication of the gap here. The Social Work (Scotland) Act should pave the way for meeting more of the need in Scotland. The Seebohm Report has made similar recommendations for England and Wales. The main recommendation, I believe, is for a single local social service department. I wonder whether the noble Lady is yet in a position to tell us whether the Government have accepted this in principle.
May I conclude by saying that the more we keep families together the better. Not only is it socially desirable but it also would save money. The cost of keeping a child in a remand home now works out at about £1,000 a year; the cost in respect of a residential home is about £625 a year. Yet a qualified worker earns between, say, £1,000 and £1,500 a year; so on pure mathematics, provided that the qualified worker can look after two or three children, it is quite a good bargain. I hope that we shall not over-institutionalise and over-professionalise (one or two people have made this point) on our care services. The Scottish Act provides for co-operation with voluntary services, yet
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there is always the danger that when responsibility for care is laid on a local authority, they will feel that they must discharge it for themselves and by themselves. However comprehensive we may seek to make our State and local authority services, there will always be gaps to be filled.
There is a tendency for people who could help to feel that they ore not needed, and in any case that they are doing all that they can possibly be required to do by paying their ever-growing rates and taxes. The extended responsibilities laid on local authorities are bound to cost more, even if their unification should result in economies. Yet they cannot wholly solve the problems of poverty, and I would join in the hope which has been expressed that the Government will start giving positive encouragement to voluntary and, as indeed the noble Lord, Lord Taylor of Gryfe, suggested, and will remove some of the disincentives.
The noble Lord, Lord Beaumont of Whitley, spoke of apathy, but I think that the apathy is due largely to the fact that so much has been taken away to officialdom, which makes us feel, "Well, this is looked after; let them get on with it." The right reverend Prep to the Lord Bishop of Winchester asked what we could do as individuals to narrow the gap. Well, my Lords, the larger the units of local authority social services become, the more necessary it is to have voluntary organisations to deal with small community areas so as to mobilise the goodwill and desire to help those in need. The Churches do much, and I think they could be helped to do more. Perhaps one of these days we shall have a Chancellor of the Exchequer who will help them to do more and help other voluntary organisations—local, general, specialist and national—to do more.
My Lords, in some ways poverty in a Welfare State is less bearable than it used to be, precisely because it is more scattered than it used to be. Poverty isolates, poverty needs friendship so that, in the words of the Report on the Wage Stop, the unrelieved dreariness of life in poverty can be eased—instances of no holidays for five years, for example, and no prospect of one, and not least the constant anxiety that poverty imposes.
8.29 p.m.
BARONESS PHILLIPS: My Lords, we are indeed grateful to the noble Lord, Lord Beaumont of Whitley, for his powerful speech in introducing this splendid debate and also for the subsequent contributions from noble Lords on both sides of the House. I think it was the noble Lord, Lord Beaumont of Whitley, who said that we have here a fund of individual expertise and this has surely been demonstrated to the full by the contributions which followed his opening speech. I would say at once that the noble Baroness, Lady Serota, should be replying to the debate, but unfortunately she is ill. If I may declare an interest, at least I can tell the noble Lord that I have spent practically all my working life in trying to do something to make the conditions of the poor a little better in varying degrees.
The noble Lord, Lord Sandford, referred to the history of this problem and to the position in other countries, as did the right reverend Prelate the Lord Bishop of Winchester, my noble friend Lord Soper and my noble friend Lord Archibald, who spoke very much from the heart. While I cannot claim to have suffered poverty in the sense in which my noble friend Lord Archibald spoke, in my days of amateur drama I remember taking a role in Love on the Dole. When we recall that this was written less than thirty years ago, and that the fears depicted in the play were those with which ordinary people lived—the fear of unemployment, of the workhouse and (begging the pardon of the noble Lord opposite) of the family means test, we realise that all that is still in the memory of people now living. I would say at once that, according to our Socialist philosophy as I understand it, what we feared then was not a test of means—because we all have to undergo this at times in our lives—but the family means test, where if a relative was living with a family that relative had to leave home in order that the family could receive a little more. Of course I am not referring to the noble Lord's distinguished service with the National Assistance Board, but he will know that this happened in our own time. This is a kind of poverty from which I believe we have moved away.
I am bound to say that I found one or two comments of noble Lords a little
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depressing, particularly those of my noble friend Lord Mitchison. I am sure that it was a brilliant exposition of society as he sees it and I am certain that some of the facts he gave we must look at seriously. Nevertheless, I am afraid that I cannot accept that ordinary people are not living in better conditions than they were. The noble Lord said that things were not very much better now. Living as I do in a working class district, I see women of 60 and 70 wearing good clothes for the first time in their lives: ordinary people driving in cars and ordinary people taking their children for holidays. All this must make the quality of life better.
LORD MITCHISON: My Lords, my noble friend will not remember, but fifty or sixty years ago wealth was very badly distributed. All I was saying is that it is still.
BARONESS PHILLIPS: My Lords, I accept my noble friend's point. Perhaps he will also take from me that wealth—or incomes; it depends which way we like to refer to this—is perhaps a little better distributed than it was. And, of course, ultimately we take nothing with us.
The noble Lord, Lord Sandford. put a question to my noble friend Lord Kennet on his remark that the supplementary benefit scheme at the beginning covered about half a million more old people, and that in 1967–68 about 700,000 other old people were helped by rent rebates. Unfortunately it is not known exactly how many of these people were not previously claiming National Assistance, through ignorance or reluctance; but what is clear is that the number of those benefiting has substantially increased. It is equally clear that the Minister aims to deal with this question of publicity—a point referred to by the noble Lord, Lord Amulree.
When the entitlement campaign was first initiated the Ministry published a leaflet—The Short Step. I never know whether I am entitled to show things of this kind in your Lordships' House, but if I were entitled to show it this is what I would have shown to your Lordships. As your Lordships will recall, the entitlement campaign was launched by the then Minister and there was a national distribution of leaflets. The campaign has continued in different ways. It was in

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the nature of an experiment, and the then Minister, and certainly our dynamic new Minister, is very anxious that people shall know of the various entitlements they have. I have here an extract from a message which Mrs. Judith Hart, when she was Minister of Social Security, wrote for the old people's welfare journal, in which she makes an appeal to those not already receiving benefit to come forward.
I am not sure that anybody has the answer to how to get people who will not come forward to claim benefits. As has been said, those of a certain age associate benefit with charity. We can get over to them only by a process of education. As the right reverend Prelate said, these days nobody should die in a room through lack of warmth or food, because they can be helped. I believe that this is one of the areas in which volunteers, to whom the noble Lord, Lord Sandford, referred and on whose work he will know I am as great an enthusiast as he is, can do a great deal. I cannot help thinking that perhaps this is associated in some way with the break-up of church-going. People went to see what was happening to the lady next door. It would be much more simple for friendly visitors to convey to old people some of these facts which at the moment have to come through an official source.
Every Minister has emphasised how important it is to contact these old people. I have had a letter from an old lady who describes herself as a "satisfied client: she tells me that the 90s. she receives is more than she has ever had for herself at any stage in her life, and she is typical of many working-class women. But she has drawn my attention to the leaflet at the beginning of her pension book, which says:
"Please arrange for someone to call at my home to talk over any extra benefits that I may receive."
What could be more straightforward and simple? I hope that this is very productive.
The noble Lord, Lord Sandford, referred to the wage stop, and the noble Lord, Lord Drumalbyn, said that we had made no reference to it this afternoon. I am happy to tell noble Lords that the wage stop beneficiaries have received considerable extra help, and this is probably what they had in mind. Not only have they benefited according to
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family circumstances from the increases in family allowances but they have had the advantage of several other easements under the recent report of the Supplementary Benefits Commission on the administration of the wage stop—the introduction of local authority rats for labourers who were formerly on regional rates, the abolition of the previous 7s. 6d. deduction for intangible expenses, the substitution of three months for six months as the measure of temporary sickness, with a corresponding reduction in the case of prisoners' wives and the discontinuance of the practice whereby a wife's earnings were deducted in full from the husband's wage-stop benefit. These are four very practical pieces of assistance. I will not weary your Lordships by going through ill the figures, but from January, 1967, 24,500 were in this wage stop category, and in August, 1968, there were 22,000.I hope that this answers the point raised by the noble Lord.
LORD SANDFORD: My Lords, I am sure that the House will be most grateful to the noble Lady for that full reply.
BARONESS PHILLIPS: My Lords, the noble Lord, Lord Amulree, referred to the fact that social security officers had not been helpful in the case of one man who could not get supplementary benefit as he did not have an address. I am happy to tell the noble Lord that this is not so. I rather thought this to be the fact. Supplementary benefit is payable whether a person has an address or not. If a person without an address calls at the social security office he will, if he has no resources, be given a payment to meet his immediate needs and to enable him to put down a small deposit on lodgings when he has found lodgings. Full supplementary benefit will then be paid, and will take account of the rent that he has to pay. I am happy to be able to give that piece of information to the noble Lord.
There has been a great deal of reference to the Disablement Income Group—and perhaps here I should declare re an interest, because I was one of the people instrumental in launching this organisation, and it is somewhat ironic that I am now called upon at this Despatch Box to deal with this matter. Neverthless, while, unfortunately, I cannot tell the

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noble Baroness, Lady Summerskill, or noble Lords concerned, that there is an immediate result from this very active and able campaign, I am able to say that the Government's Social Survey, which at the moment is carrying out a survey of chronic sick and handicapped, is taking account of this and will have something to say; and, equally, the White Paper on the Social Structure of Social Security which will be coming out, incidentally, in 1969. My right honourable friend in another place said that the Report of the Survey will not be available before 1970, but a lot can be done by local authorities in this matter with the data that we shall be able to send them earlier. So I am hopeful that something will come out of this.
I was interested to hear Lord Drumalbyn's suggestion of a way in or out of this problem, because if I were to level one accusation against Lord Beveridge it would be that he seemed to base the whole of the scheme on earnings—either you were earning or you were not earning—which put the wife, since she has no recognition within the wage structure, in a difficult position; and, of course, in another sphere the difficulties of the widow spring largely from the fact that her pension comes from a recognition of her husband's contribution and not her own. I well recall going to see the noble Lord, Lord Drumalbyn, when he was the Minister and appealing to him for widows; and I expect he will have noticed that some of the things for which I then asked, though not all, have been given by the present Government. There is little doubt that the problems of the disabled wife are directly related to the structure of the scheme, but I am equally certain that the Survey and the White Paper will have something to say on this. In this connection, too, I would say that the Survey will have a great deal to say on the problems of the physically handicapped generally.
I was very touched by the contribution of the noble Lord, Lord Wade (I do not know whether he is still here), because I remember that when my own husband had a terrible disabling stroke, which rendered him speechless and unable to move on the right side, the process of rehabilitation was cushioned by
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the fact that there was some money to pay for taxis and to make everything as easy as possible. I can see the horrible situation of the polio victim whose recovery would be retarded by lack of money. But there is little doubt that this Survey is going fully into the problems of the chronic sick and the handicapped. I was glad, also, that the noble Lord, Lord Wade, made reference to the B.M.A. Paper, Aids to the Disabled, which will help the Government in their studies in this aspect.
The noble Baroness, Lady Birk, inquired about fatherless families, and for the Record I should say that she was trying to make the point that the children should have an allowance as of right. I think we come back again to the same point; namely, that the structure of our whole scheme will need to be re-thought. The noble Lord, Lord Soper, referred to alcoholics. I cannot elaborate on previous replies on this subject, but the noble Lord will appreciate that by constantly referring to this matter, particularly in a debate of this character, he is doing just what he hopes to do; namely, bringing the constant attention of the Government to this problem.
My noble friend, Lord Cooper of Stockton Heath, in an interesting speech, referred to the low-paid worker. I would merely quote what my right honourable friend said in a speech to a body in which I am particularly interested. He said:
"Unfortunately to-day there are far too many family men whose wage is so low that they cannot maintain their family even at the modest level which the Supplementary Benefits Scheme lays down as our national minimum. Ten per cent. of men earn less than £14 a week."
That is a point made by the noble Lord. My right honourable friend went on to say:
"It is a delusion to believe that low wages can be got rid of simply by passing an Act of Parliament or introducing a national minimum wage."
I will not dilate further on this subject, because I think it is one on which we may be able to have an interesting debate at a later date.
The noble Lord, Lord Ilford (we recall his tremendous contribution in this field, and are always delighted to hear what he has to say) made some reference to the visiting of old people, and suggested

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that perhaps the officers of the Supplementary Benefits Commission were not carrying out the work in quite the same way. I am happy to tell him they visit old people quite regularly and periodically. At the risk of appearing to be ungracious, as we often have little chats on various things, I would ask whether he remembers that 73 per cent. of the retirement pensioners during the period of the National Assistance Board did receive the discretionary addition. So perhaps things are not too different, although we have a different structure for assessing means. I hope the noble Lord will accept that the scheme of visiting, begun so admirably, is still continuing.
I think we saw from the salaries quoted by one noble Lord how, as always, people who work for people seem to have such inadequate rewards. This is an extraordinary thing. I often wondered as a social worker whether I was paid a low salary to keep me in the right frame of mind for dealing with people—perhaps, as the noble Lord, Lord Archibald, said, the necessity to undress in order to show that people feel cold without a coat. There is little doubt that people who deal with these individuals are of a varied kind and character, as the noble Lord knows, and have great skill, sympathy and patience. I think we should pay tribute to them at this time, because it is rarely that one gets an opportunity to do so.
The noble Lord, Lord Donaldson, whom we again recognise as performing a wonderful work in the family service units, referred to the idea that anyone receiving supplementary benefit which was restricted under wage stop provisions should be allowed to take part-time work. At first glance this seems to be quite a viable proposition. I would not say that my right honourable friend rejects it. I would merely say at this point that anyone who is working full-time for a wage might be put at a disadvantage if in fact this were done. But this is not to turn down this suggestion out of hand. A debate of this kind is looked at very closely, as noble Lords who have been in Government will know, and therefore at this point of time, I say no more than this.
On the point of the Credit Counselling Service (and I am sorry that no other
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noble Lord made reference to this), the Citizens' Advice Bureaux have for years done a valuable work in this field, almost literally on a shoestring, long before the Government helped them, and mainly with spendid voluntary workers—although they now have to be paid workers. While, again, I am not saying that this Credit Counselling Service is not an excellent idea, I think it would be right to make this reference to those people who have been doing just this for a long time, and, if I dare suggest it, with a little more help could possibly do a little more.
The noble Baroness, Lady Elliot, mentioned—"Don't bother", says a voice behind me. I remember that the noble Earl, Lord Longford, told me once that if a noble Lord was not present at the closing speech we did not reply to him. I must say that I find it a little difficult to take up the Papers and then to put them away again. However, I expect that at this time your Lordships will not wish me to go into things too deeply.
The noble Lord, Lord Gifford, in a very interesting and lively contribution, brought to our notice something which would probably not have been brought into the debate had he not don e so; as I recall, no other noble Lord touched on ii. I am sure he will appreciate that both these pamphlets are very new and therefore have not been considered by the Government. And it would be embarrassing and a little difficult if I were even to suggest anything on behalf of my noble and learned friend who sits on the Woolsack, other than to say that of course there are two Reports of the Legal Aid Advisory Committee which show exactly what these pamphlets how that there are people who need legal aid but are not at present receiving it. In a dialogue of this kind, I would say that this point, again, will be looked at, and the noble Lord may rest assured that the ideas contained in his speech will be considered.
The noble Lord, Lord Taylor of Gryfe, made a very splendid speech and, I think, touched us deeply. Those who read the Supplement to a Sunday paper last week which referred to case historic s in Glasgow will feel, I think, that it more or less underlined everything the noble Lord said. Indeed, those in poverty are

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always in danger of being delinquents, and from this poverty stems many things. The noble Lord will not expect me to comment in full on the various points he put forward.
My Lords, I hope that I have covered the speeches of all those who have spoken. I always feel quite certain that I have not covered the points raised by the noble Lord, Lord Drumalbyn, who is usually so brilliant in the way he covers the field. I come to his speech at the last when I am beginning to feel a little tired, so I hope that he will forgive me. I would say only this: that in the counselling in connection with electricity bills I think he again has a very valid point, which I hope the people visiting for the Supplementary Benefits Commission, and so on, will bear in mind.
My Lords, the definition of poverty will always change. It will change according to the society in which we live; it will change according to the cultural patterns by which we are surrounded. What I can say—perhaps because the noble Lord, Lord Beaumont, said that politicians did not seem too concerned about the poor—is that the Socialist philosophy recognises not only the dignity of the human being but that all men shall have equality of opportunity, that they shall have freedom from poverty, from degradation and from fear; and this is something to which the Government will set their hand.
8.53 p.m.
LORD BEAUMONT OF WHITLEY: My Lords, noble Lords will all be sorry to hear of the illness of the noble Baroness, Lady Serota, but we are grateful to the noble Baroness, Lady Phillips, for such a brilliant and full summing up of the debate, after which there is very little to say. I should, however, like to make just two quick points. First of all, nothing I have heard to-day makes me feel that the combination of a basic wage and adequate family allowance is not the right way forward. Indeed, a certain amount of what I have heard, particularly from the noble Lord, Lord Drumalbyn, makes me think that it is. Secondly, I am most grateful to the noble Lord, Lord Kennet, for saying that he would take up this question of the Christmas stopping of the wage stop, and
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I hope that he will not allow himself to be too put off by the argument that this might be the thin end of the wedge. As we all know, if we paid much attention to that argument, nothing at all would get done.
The figures in the pamphlet which was published by Mr. John Pardoe and myself were mentioned. I had them checked at the time. I have not had time to-day to have them rechecked, since I did not know that they were going to be brought into this debate and I did not want to leave the Chamber too much for fear of missing what your Lordships had to say. There is a new edition coming out, and I promise that I will either justify or correct the figures in that. One or two figures may be wrong. Undoubtedly in one or two cases quoted there is merely a difference of interpretation; for example, where Lord Wells-Pestell says that something is poverty which Lord Kennet says is not poverty. This has led me to a feeling at some moments this evening that we might have been debating the wrong subject. In the briefs that I had been given I came across a memorandum from one Liberal research assistant to another, which reads:
"Jim talks about the elimination of poverty. I object. Discussion should, to my mind, he centred more on the rights of all citizens to equality than on trying to define their minimum needs and meet them from a sense of charity".
I think that that is something which the noble Lords, Lord Wells-Pestell and Lord Mitchison, particularly, would agree on. I personally, although I did not bring it into my opening speech, think not only "Down with poverty! Abolish it!" but, "Down with riches and abolish them, too!" And if anyone thinks that comes ill from me, I will explain it privately afterwards.
We have heard appeals to get the problem into perspective. In the sense of poverty at home as opposed to poverty in the world, I entirely agree that we must get it into perspective. I hope I made the point in my opening speech, but I should like quickly to make it again, that it is only when you abolish poverty in one country that you can, as they are beginning to do in Scandinavia, raise the whole question of world poverty and positive action about it as something which

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people will get "enthused" about and the ordinary electorate will begin to support. As to looking at poverty in the perspective of what has been done and what progress we have made, no, my Lords, I cannot, I will not, and I hope that I never shall. For what we have done has no doubt been good, but the present needs are so many and the solutions so urgent to be found that I do not think we can spend much time looking at the problem in perspective.
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Finally, I should like to thank all your Lordships very much for the great wisdom and the number of very good suggestions that have come out of this extremely useful debate. I beg leave to withdraw the Motion standing in my name on the Order Paper.
Motion for Papers, by leave, withdrawn.
House adjourned at two minutes before nine o'clock.