Sitting of 1 February 1968

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
ORAL ANSWERS TO QUESTIONS
  WALES

    House-building
    Mr. Birchasked the Secretary of State for Wales how many of the reduction of 15,000 houses in England and Wales announced in Command Paper No. 3515 will be in Wales; and in which authorities they will be.
    The Under-Secretary of State for Wales (Mr. Ifor Davies): About 1,000. It is too early yet to say which authorities will be affected. My right hon. Friend will not, however, impose any restrictions in the areas of greatest need.
    Mr. Birch: What are the areas of greatest need?
    Mr. Davies: I assure the right hon. Gentleman that my right hon. Friend will look at this matter very closely and priority will be given to authorities where needs arise from industrial development and to authorities which have the greatest obsolescence problems.
    Mr. Gibson-Watt: Does not the Under-Secretary agree that a good deal of time has now elapsed since devaluation during which the Government should have been thinking about their policies in this respect? Would it not be more helpful if the Secretary of State could now tell North Wales, South Wales, East Wales and West Wales which areas will be affected?
    Mr. Davies: This matter is receiving the closest attention. The number of houses built has been a record figure. The figure of 1,000 should be regarded as a diminution in the rate of increase rather than as a reduction.

    Transport Bill
    Mr. Gibson-Wattasked the Secretary of State for Wales what representations he has had from industrial organisations in Wales concerning the abnormal load duty proposed in Schedule 12 of the Transport Bill; and what reply he has sent.
    The Minister of State, Welsh Office (Mrs. Eirene White): My right hon. Friend has not received such representations.
    Mr. Gibson-Watt: That greatly surprises me, because I have received a great number. Will not the Transport Bill do a great deal of harm and raise industrial costs and therefore raise the cost of living of all the people in Wales? Is not the main point of having a Secretary of State for Wales in the Cabinet that legislation which will have obnoxious effects on Wales can be blocked?
    Mrs. White: Any representations which may have been made would have been made to my right hon. Friend the Minister of Transport. She has already made it clear that in Committee on the Transport Bill she may be willing to consider possible ameliorations in her regulations for the development areas.

    Roads (Expenditure)
    Mr. Birchasked the Secretary of State for Wales what percentage of the cut in road estimates for 1968-69 announced in Command Paper No. 3515 will apply to Wales; and on what categories of roads in Wales will these cuts fall.
    The Secretary of State for Wales (Mr. Cledwyn Hughes): About 5 per cent., falling partly on small improvement schemes on trunk roads but mainly on the maintenance and improvement of local authority roads. All the major improvements on trunk and principal roads will proceed as previously planned.
    Mr. Birch: Can the Secretary of State give me an assurance that the St. Asaph bypass road will be proceeded with as at present laid down? Does he realise the danger of cutting down on the maintenance of roads, because, if they are not maintained in the ordinary way, in

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    a few years' time the costs are far greater than they would otherwise have been?
    Mr. Hughes: I can give the right hon. Gentleman an assurance on the St. Asaph bypass. I think that expenditure on some minor roads can be postponed without undue hardship. I am anxious, in co-operation with highway authorities, to get the priorities right on minor roads.

    Brynderwen Bridge, Abermule
    Mr. Hoosonasked the Secretary of State for Wales what steps he intends to take to ensure that the Brynderwen Bridge at Abermule in Montgomeryshire can carry heavily laden transport vehicles.
    Mr. Ifor DaviesMy right hon. Friend will consider objections to the proposal to impose a 20-ton weight restriction on the bridge and will write to the hon. and learned Member as soon as he is able to reach a decision.
    Mr. Hooson: Does the Under-Secretary appreciate that the normal daily loads along this road are often heavy loads? is a very severe handicap for an area removed from industrial centres to have an imposition of this kind on the main route out of such areas as Newtown?
    Mr. Davies: I assure the hon. and learned Gentleman that my right hon. Friend is well aware of the general problems and he will study the particular difficulties revealed by the objections before deciding what is the best course of action.

    Abercrave-Onllwyn Road
    Mr. Tudor Watkinsasked the Secretary of State for Wales when a grant will be made available for the Abercrave-Onllwyn road; when work is to commence; and how long he estimates it will take.
    Mr. Ifor Davies: My right hon. Friend has made a grant of £313,754 to the Breconshire County Council towards the estimated cost of the scheme. So far as the date of starting is concerned, this is a matter for the Breconshire County Council, but I understand that it plans to start work this month. The work will take about two years.
    Mr. Watkins: Has the Breconshire County Council been told that a grant is now forthcoming?
    Mr. Davies: The County Council has been informed. This is the largest grant-aided scheme ever to be given to Brecon-shire and it should assist the economic wellbeing of the area.

    Pit Closures
    Mr. Probertasked the Secretary of State for Wales if he will instruct the Welsh Economic Council not to approve proposals for pit closures, except for geological reasons, in areas where there is high unemployment or where high unemployment is likely as a result of such closures.
    Mrs. White: No, Sir. The arrangements are that the Chairman of the Industry and Employment Panel of the Welsh Economic Council is consulted about proposed closures and, having considered the implications of the closure against the background of the local economic situation and prospects, it is open to him to recommend whether a particular closure should be deferred. It is then a matter for the Government to decide what action should be taken.
    Mr. Probert: If the Economic Council advises strongly against such a closure, who makes the final decision? Is it the Secretary of State for Wales or the Minister of Power?
    Mrs. White: The ultimate decision lies with my right hon. Friend the Minister of Power, but my right hon. Friend the Secretary of State is fully consulted.
    Mr. Hooson: Is it normal procedure to provide alternative means of employment in the areas before the closure order of the pit is made?
    Mrs. White: The prospects for employment in the area are the main matters for consideration by the Chairman of the Industry and Employment Panel.

    Rhayader (Expansion Plan)
    Mr. Tudor Watkinsasked the Secretary of State for Wales whether he will make a statement on the progress of the Rhayader expansion plan; and what is the position of applications for permission to develop within the town.
    Mrs. White: At a meeting in the Welsh Office on 4th January last, at which all those concerned with the development of

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    Rhayader were represented, the development plan was discussed. While there are certain matters—particularly concerning the line of the trunk road—which have to be further studied, the authorities concerned can now go ahead with some industrial and housing development, and I hope that they will do so.
    Mr. Watkins: There is great disappointment in Rhayader at the long delay. Is my right hon. Friend aware that it is nearly 12 months since the Secretary of State made a very good announcement about the expansion plan, but the assurance given by an officer of his Department that action would be taken within two months has not been fulfilled?
    Mrs. White:As my hon. Friend knows, there have been technical difficulties which have to be fully investigated before a final conclusion can be reached. I know that he is concerned about applications for development and planning consent. All but one of these, I understand, have now been cleared with the county planning officer.
    Mr. Gibson-Watt: Would it not be a good thing if this matter were brought to a head at the earliest opportunity? Rhayader is at present suffering from a type of planning blight which is avoidable, and, if it were possible for the local authorities and the Welsh Office to get down to the question, would not a speedy answer be a happy outcome for a good number of people?
    Mrs. White: As I have said, the Welsh Office has been dealing with precisely the point raised by the hon. Gentleman. I understand that in all cases but one the matter has been cleared. That one is in the vicinity of the possible line of the road. The matter is in dispute, and in that instance permission cannot at the moment be given.

    Land Use (Planning Control)
    Mr. Ednyfed Hudson Daviesasked the Secretary of State for Wales if he will take steps to ensure that, in the reorganised structure of local government in Wales, provision will be made for close co-ordination of physical land use planning control with economic planning.
    Mr. Cledwyn Hughes: Yes, Sir.
    Mr. Davies: Is my right hon. Friend aware that, in the past, co-ordination has been entirely lacking, and will he say what steps he proposes to take to remedy the situation?
    Mr. Hughes: I would not agree with my hon. Friend that co-ordination has been entirely lacking, and the Government's proposals for reducing the number of local planning authorities in Wales and for reconstituting the Welsh Council will greatly strengthen co-ordination on all aspects of planning both within the areas of the local planning authorities and in Wales as a whole.

    Welsh Council
    Mr. Ednyfed Hudson Daviesasked the Secretary of State for Wales if he will take steps to ensure that the new Welsh Council is given specific powers to call for private and public investment in Wales, and that full publicity is given to its work except where secrecy is clearly desirable.
    Mr. Cledwyn Hughes: I can assure my hon. Friend that the Welsh Council's responsibilities will be wide enough to enable it to advise the Government on the need for private and public investment in Wales. Although there may be occasions when it will be asked to submit advice in confidence, the Council will at its discretion be free to prepare reports for publication.
    Mr. Davies: The second part of that Answer will be welcomed in Wales, but does not my right hon. Friend agree that, in addition to having the right to give advice, the Council should be required to make specific recommendations for investment and development in Wales?
    Mr. Hughes: I shall welcome any proposals which the Council asks me to pursue, but I hope that my hon. Friend will not under-estimate the substantial investment in the private and public sectors which is in hand for Wales.
    Mr. Birch: The Question asks that the Welsh Council shall have power to call for investment. Does the right hon. Gentleman recall that Owen Glyndwr said, "I can call spirits from the vasty deep", and he was then asked, "But when you call them, will they come?"? This is really the point here.
    Mr. Hughes: We on this side of the House prefer to draw our inspiration from Robert Owen of Newtown and not from Owen Glyndwr.
    Mr. E. Rowlands: Will my right hon. Friend now authorise the publication of the reports of the existing panels of the Welsh Economic Council, as much advance information was not included in "Wales—the Way Ahead" which ought to see the light of day?
    Mr. Hughes: As my hon. Friend knows, up to now the reports of the Welsh Economic Council have been on the basis of confidentiality, as has been the practice of the Economic Councils in England and Scotland. But, as I have said, from March onwards the Council will, at its discretion, be able to publish reports.
    Sir Harmar Nicholls: The right hon. Gentleman said that co-ordination was not lacking. Did he hear his right hon. Friend say in reply to Question No. 2 that representations on Welsh matters had gone mainly to the Minister of Transport and had not been drawn to his attention? Is not that a lack of coordination, if what the right hon. Lady said was true?
    Mr. Hughes: On these matters there is complete consultation between the Welsh Economic Council and the National Coal Board and between the Welsh Economic Council and the Welsh Office, because it is the Council's duty to report to me in the first place. There is complete co-operation between my right hon. Friend the Minister of Power and myself.

    Leaseholders (Enfranchisement)
    Mr. Probertasked the Secretary of State for Wales if he will take further action to enfranchise those leaseholders whose tenancies terminated after the 8th December, 1964, and before the passing of the Leasehold Reform Act, 1967.
    Mr. Cledwyn Hughes: No, Sir. This would require fresh legislation, and in this connection I would refer my hon. Friend to the Answer given to him by my hon. Friend, the Joint Parliamentary Secretary to the Ministry of Housing and Local Government on 25th January,1968 —[Vol. 757; c.178]
    Mr. Probert: That was a very bureaucratic reply. Is my right hon. Friend aware that there are many elderly people who are now becoming disfranchised and who are apt not to take notice of official notices in the Press? Will he consult further with the Minister of Housing and Local Government on what action should be taken in this respect?
    Mr. Hughes: I remind my hon. Friend and other hon. Members that very wide publicity coverage was given to this matter in the weeks before 27th January. As I have said, any change now would require fresh legislation. In the circumstances, in view of the time which was allowed and the publicity which was given, I would not regard that as reasonable at this stage.
    Mr. Alec Jones: In view of the widespread concern felt by elderly people on this issue in South Wales, will my right hon. Friend give a categorical assurance that those people who have not exercised their rights under the Leasehold Reform Act are still fully protected in their right to occupy and own their homes under the 1954 Act?
    Mr. Hughes: Yes, provided that the requirements of the law have been fulfilled. But my hon. Friend must give me firmer evidence on that question. He has asked for something which is very difficult, as hon. Members on both sides know, but I shall be glad to look at the extent of evidence which exists on the point.

  EDUCATION AND SCIENCE

    Students (Support)
    Mr. van Straubenzeeasked the Secretary of State for Education and Science whether the current review of Government expenditure includes reconsideration of the substitution of loans for grants for students.
    The Secretary of State for Education and Science (Mr. Patrick Gordon Walker): All aspects of student support are kept under review, but I have no proposals at present to introduce a system of loans.
    Mr. van Straubenzee: The Secretary of State will have noted the very responsible attitude towards the whole question

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    of grants taken in the last few days by the leaders of the students' unions. Will he give an assurance that, in his negotiations, which, I understand, are to take place tomorrow, he will respond to this mood and listen carefully and constructively to any alternative suggestions for economies which the leaders of the unions put before him?
    Mr. Gordon Walker: I shall, as always, listen very sympathetically to any responsible, or, indeed, irresponsible, representations—they will be responsible in this case—which are made to me. But the specific Question was about loans, and I have no proposals at the moment.

    Polytechnic Governing Bodies (Student Representation)
    Mr. van Straubenzeeasked the Secretary of State for Education and Science what advice he has given local education authorities concerning student representation on the governing bodies of polytechnics.
    The Minister of State, Department of Education and Science (Mrs. Shirley Williams): My right hon. Friend has not advised that there should be student representation on the governing bodies of polytechnics. We shall not raise any objection if an authority wishes to provide for it.
    Mr. van Straubenzee: I thank the hon. Lady for that reply, but does she recall that in the case of certain polytechnics satisfactory solutions have been reached regarding student representation? Does she not think it appropriate to make those examples known to other places where rather more old-fashioned views seem to prevail?
    Mrs. Williams: We shall consider that. But I should point out that in our notes of guidance we strongly indicated that provision should be made for student representation in matters of concern to students. We did not wish to lay down the precise form which it should take.

    School Leaving Age
    Mr. Ronald Bellasked the Secretary of State for Education and Science what estimate he has made of the effects of a deferment of the raising of the school leaving age beyond 1970 –71 on current expenditure.
    Mr. Gordon Walker: There will be savings of nearly £20 million on current expenditure in England and Wales both in 1971–72 and in 1972–73 as a result of the deferment of the raising of the school leaving age by two years.
    Mr. Bell: Is the right hon. Gentleman aware that the Prime Minister said in his statement that there would be a saving of £33 million in the year 1968–69 in respect of school building arising from this decision? Could he now, in answer to me or, perhaps, in the OFFICIAL REPORT or by letter to me, explain how that figure was arrived at and why he did not now mention it?
    Mr. Gordon Walker: The figures referred to by my right hon. Friend related to capital savings which fall in those two years. Current savings come in later years simply as a result of there being fewer pupils in the secondary schools and the consequent effect on the cost of school meals, equipment and so on. This is simply a question of the distinction between capital saving and current saving.
    Mr. Lipton: Has my right hon. Friend noted that those countries in which the bulk of the population can neither read nor write do not suffer from anything like the same degree of political and economic complexities that we are suffering from in this country?
    Mr. Gordon Walker: This is certainly a very complex country, and our education system also is very complex.
    Mr. Christopher Priceasked the Secretary of State for Education and Science if he will make a statement on his present policy in relation to the projected raising of the school leaving age to 16 years.
    Mr. Gordon Walker: The Government's decision to postpone the raising of the school leaving age for two years was announced by my right hon. Friend the Prime Minister on 16th January.—[Vol. 756, col. 1577.]
    Mr. Price: Is my right hon. Friend aware that the pledge to maintain the teacher training programme is an earnest of the fact that the school leaving age will be raised in 1973? However, will he at a very early stage name a single leaving

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    date as a further earnest that we are moving towards raising the school leaving age in 1973?
    Mr. Gordon Walker: I am glad that my hon. Friend has given me the opportunity to say that it has been somewhat overlooked that we have not done any-fling to decrease the supply of teachers, which is an earnest, a proof, of our intention to raise the school leaving age. I am giving careful and urgent consideration to his second question.
    Mr. van Straubenzee: Will the hon. Gentleman realise that his official word on this, as on everything else, is wholly prejudiced by what has been passing during the last month? Is he aware that areas such as that which I represent are seriously prejudiced, and delightfully prejudiced, by the large number of children voluntarily staying on at school, but for whom now no additional provision of buildings can be made?
    Mr. Gordon Walker: On the contrary; if there are children who need school roofs, we have to provide them. That is done under the general school building programme.
    Mr. Marks: Will my right hon. Friend stress the need for local authorities to continue the training of experienced teachers ready for the raising of the school leaving age? Sonic local authorities have made cuts.
    Mr. Gordon Walker: Yes, I have told local education authorities that in my view they should give priority to the encouragement of teachers and not economise in that respect.
    Sir E. Boyle: Is it not particularly important at this moment that the impetus behind the training of teachers and the planning of the syllabuses in preparation for the raising of the school leaving age should not be lost in any way? Will the right hon. Gentleman make it at abundantly plain that both sides of the House are now absolutely pledged to the introduction of the raising of the school leaving age at the new date?
    Mr. Gordon Walker: I agree with the right hon. Gentleman. The Schools Council, which is particularly concerned with curricula changes, is pressing ahead with undiminished vigour and I hope that the
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    supply of teachers will be maintained with the same momentum as in the past.

    Plowden Report
    Mr. Hornbyasked the Secretary of State for Education and Science what specific measures he has taken, apart from the special building allocation of £16 million for priority areas, to implement those recommendations of the Plowden Report which fall within the responsibility of the Government.
    Mr. Gordon Walker: Some £10 million of the normal major building programme for 1968–70 has been allocated to primary schools in educational priority areas and part of the recently announced addition of £8 million a year to the programmes for 1968–69 and 1969–70 is for those areas. In current quota calculations a number of teachers have been reserved for service in these areas. I have made an announcement on corporal punishment in special schools. Preparation of a pamphlet on parent-teacher relations is going forward.
    Mr. Hornby: Is the Minister aware that there is a very strong feeling that the widely welcomed recommendations of the Plowden Report are not being accepted with anything like the speed that is wanted, particularly in view of the very stringent financial circumstances under which local education authorities will have to operate over the next three years? What action will he now take on the subject?
    Mr. Gordon Walker: Quite a lot of the proposals of the Report are being and have been carried out, but some of them, as was clear from the Report, will be very expensive. These, like any proposals of that kind, must wait a certain while. It is clear that the restrictions on central and local Government expenditure will hold up some of these and other desirable reforms.
    Mr. Christopher Price: Will my right hon. Friend consider issuing a circular to advise those local authorities with priority areas inside them to protect those areas when they consider how to apply the cuts in their current expenditure which they will have to make over the next two years?
    Mr. Gordon Walker: We are now considering the various proposals made to

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    us by local education authorities in response to an earlier circular about educational priority areas. In so far as we have funds available, these will be protected and specially favourable discriminatory treatment will be given to the areas that we can choose.
    Sir E. Boyle: May I ask the right hon. Gentleman three specific questions arising from his rather disappointing Answer? First, what encouragement is he giving to more nursery classes in existing school buildings? Second, will the Minister consider a point I have often made about changing the weighting of the rate support grant to help areas of high population density? Third, will he take an interest in a number of projects that the universities are putting forward to form a close liaison with local authorities on projects for educational priority areas?
    Mr. Gordon Walker: We are very keen on the last point, though it depends in part on what universities want to do. It is very important that nursery classes should go forward, and, in so far as we can finance them, that will happen. I do not think that the proposals of the Plowden Report for complete nursery provision can be put into effect quickly. Leave alone the very great cost, nursery classes would simply take teachers from primary schools. One must balance one thing with another. The rate support grant is a very complex matter which we are looking into. It does not concern only my Department.

    Management Studies
    Mr. Hornbyasked the Secretary of State for Education and Science what encouragement he is giving to the provision of courses in management studies at undergraduate level in institutions for which he is responsible.
    Mrs. Shirley Williams: I am anxious to see such courses provided at the appropriate level. Many undergraduate courses in the fields of engineering and other subjects contain an element of management studies. But specialised courses are normally post-graduate or are taken by practising managers already in industry.
    Mr. Hornby: What attitude has been expressed to the Minister by industry about the provision of courses such as these at the undergraduate level?
    Mrs. Williams: The hon. Gentleman will know that there are industrial representatives on the industrial training boards, which are concerned with management courses—of which there is a considerable increase—and there are the regional advisory committees and governing bodies of technical colleges. Within all these spheres, courses in business studies contain an element of management study, but up to now the main approach in undergraduate studies has been on a broad level of which management studies form a part, but not the whole of the course.

    Computer Programming Schools
    Mr. Huntasked the Secretary of State for Education and Science whether schools of computer programming are subject to registration or approval by his department.
    Mrs. Shirley Williams: No, Sir.
    Mr. Hunt: Surely the hon. Lady is aware that fee-paying computer schools are mushrooming all over the country? On the strength of glib promises of a quick road to top salaries students are being induced to part with large sums of money for courses which often prove to be quite beyond their capabilities and at the end provide certificates which are useless to them. Is not there a strong case for some sort of system of registration, in the interests both of students and reputable computer programming schools?
    Mrs. Williams: Yes, Sir. This is a very fair point. But the hon. Gentleman will recognise that it is difficult for us to protect every single buyer. We have a system of recognition as efficient, and any student has a right to inquire whether an institution is so recognised. In order to be be so recognised, institutions must fulfil fairly stringent conditions about the nature of their courses. We are shortly to produce a bulletin indicating all the courses for computer programmers, systems analysts and the like in colleges of further education. There is a very fast-expanding provision for students in the

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    State system, but there are difficulties about trying to prevent private enterprise institutions from starting on these grounds alone.

    Middle Schools
    Mr. J. E. B. Hillasked the Secretary of State for Education and Science what, in relation to middle schools, are the relevant educational, financial and other standards where these under current legislation and practice differ as between primary and secondary school.
    Mr. Gordon Walker: Apart from the provisions in the Education Act relating to managing and governing bodies, there ere certain provisions in my Department's regulations which differentiate between primary and secondary schools. The most important in the context of the establishment of middle schools are the building regulations and I am considering amending these to provide separate standards for middle schools.
    Mr. Hill: Is not it time that the Minister's Department, and, indeed, all of us, got away from the conception of a rigid distinction between primary and secondary education and devised a more flexible system of relating the standards and grants to the different child age years? Surely, that would cater for the needs of schools of all age ranges?
    Mr. Gordon Walker: I quite agree that we clearly need a more flexible arrangement because of the arising of middle schools. We are already applying new building standards. My difficulty is that the Act recognises only primary and secondary schools. I must decide whether a middle school is primary or secondary. Until we can alter the Act we shall introduce flexibility as far as we can by regulations and other means short of legislation.

    Teacher Centres
    Mr. J. E. B. Hillasked the Secretary of State for Education and Science what is the number and proportion of local education authorities which have now established teacher centres.
    The Minister of State, Department of Education and Science (Miss Alice Bacon): One hundred and thirteen out of 162.
    Mr. Hill: What steps is the Minister taking to ensure that this very important development, its maintenance and—I hope—its further extension, will not be jeopardised by the present restrictions on the education expenditure of local authorities?
    Miss Bacon: These courses are arranged by local authorities, and I hope that they will continue. The hon. Gentleman will have seen the very valuable working paper produced by the Schools Council, which will, of course, continue in this very good work.

    University Building Programme
    Mr. Edward M. Taylorasked the Secretary of State for Education and Science what will be the effect of the restrictions on capital spending on the university building programme.
    Mr. Gordon Walker: Capital expenditure will be reduced by £0.75 million in 1968 –69 and £2.5 million in 1969 –70. it is for the University Grants Committee to decide how best to secure these savings.
    Mr. Taylor: Is it not short-sighted madness to cut the university building programme? How can the Minister justify the Government's throwing away millions of pounds on pointless nationalisation schemes when depriving the nation of qualified manpower in this way?
    Mr. Gordon Walker: Part of that supplementary question was wholly irrelevant to the other part. When we were having to scrutinise central Government expenditure so carefully and make certain savings it would have been wrong to exempt universities altogether. I do not think that the universities will find this very troublesome. I am sure that it will not lead to a reduction in the number of students, and that with slightly better and more intensive use of their capital equipment the universities will be able to accommodate under the new arrangements the flow of students going to university.

    Party Political Broadcasts
    Mr. Ronald Bellasked the Secretary of State for Education and Science if he will take steps to prevent local education authorities making school

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    building, staff and pupils available for use in party political broadcasts
    Mr. Gordon Walker: No, Sir. This is a matter for the local education authority and the school managers and governors to decide. They will, no doubt, take into account the undesirability of school children being involved in questions of political controversy.
    Mr. Bell: Is the right hon. Gentleman aware that the recent Labour Party broadcast was set in a Hull school, which was named, that the headmaster, a named member of the staff and pupils took part in the broadcast, the whole of which was set in the school? Does the right hon. Gentleman believe that to be desirable?
    Mr. Gordon Walker: I was aware of those facts. This is a matter for the local education authority and it would be very wrong if I attempted to decide these things. I was not consulted ahead of this programme and there was no reason why I should have been, for it does not lie within my discretion. It is a matter for the local education authority, the headmaster and others. I have been informed that the children involved were questioned only after their parents had given consent.
    Sir E. Boyle: Would not the right hon. Gentleman agree that, while we would all support head teachers and other teachers and staff having the fullest opportunity to take part in ordinary political activities, it is a mistake to identify any one school with any particular political party in a way which surely seems to have happened in this case?
    Mr. Gordon Walker: If it is a mistake, the right hon. Gentleman should direct his rebuke to the people concerned, who were the local education authority, the governors and the head teacher.
    Mr. Ogden: Does my right hon. Friend think that there would have been any complaint from the Opposition if this had been a Conservative headmaster?
    Hon. Members: Yes.
    Mr. Gordon Walker: I hope that hon. Members opposite would have been consistent enough to attack that, too, and I would have given the same answer.

    Comprehensive Education
    Mr. Christopher Priceasked the Secretary of State for Education and Science what advice he has given to local education authorities in cases where they have failed to reach agreement concerning comprehensive reorganisation with voluntary aided secondary schools after discussions with their governors according to the terms of Circular 10/65.
    Mr. Gordon Walker: None, Sir.
    Mr. Price: Is my right hon. Friend aware that the headmaster of Wolverhampton Grammar School, the Chairman of the Aided Schools Association, has recently boasted that the status of those schools enables them to resist reorganisation? Is he aware that a city like Birmingham has so many aided schools that, unless they co-operate, it is quite impossible to go comprehensive at all?
    Mr. Gordon Walker: It is very important that aided schools should co-operate in the introduction of comprehensive reorganisation. Although this has caused some trouble in particular localities, the denominations themselves have been extremely helpful and I should like to say how much I appreciate the way in which they have done their utmost to co-operate. In some areas there are special difficulties of geography or size of school, but on the whole this is going ahead not too badly.
    Mr. Ronald Bell: Will the right hon. Gentleman say why people should be expected to co-operate in committing suicide?
    Mr. Gordon Walker: Clearly, the denominations, who know a lot about suicide, do not share the hon. and learned Gentleman's view.
    Mr. R. C. Mitchell: Is my right hon. Friend aware that in some areas the whole comprehensive system could be seriously jeopardised by the existence in the middle of one non-denominational — stress non-denominational—voluntary school?
    Mr. Gordon Walker: I agree. This can happen and is happening in certain cases, but if one puts it into perspective, I think that it will be seen that we shall

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    make the best progress by local negotiation and with the aid in particular of the denominations.

    National Theatre (Finance)
    Mr. Channonasked the Secretary of State for Education and Science what proposals Her Majesty's Government now have to make in regard to the financing of the proposed new National Theatre.
    Mr. Hugh Jenkinsasked the Secretary of State for Education and Science what is the present position regarding the National Theatre; what progress has been made; and when building will begin.
    The Minister of State, Department of Education and Science (Miss Jennie Lee): The position of the Government remains unchanged, we are prepared to share the cost of the National Theatre equally with the Greater London Council, subject to a maximum contribution, related to costs at tender stage, of,£3¾ million. The Government propose to introduce a Bill in due course to remove the limit of £l million placed on their contribution by the National Theatre Act, 1949.
    Mr. Channon: Is the right hon. Lady aware that her statement, coupled with the equally important and earlier G.L.C. statement. will be widely welcomed? Can she confirm that there will be very little expenditure in the next two years? Does she agree that the National Theatre will be potentially a great earner of foreign currency?
    Miss Lee: I am most grateful to the hon. Gentleman for those remarks. I hope that now there will be a combined operation to lose no further time. I hope that legislation will be introduced before the end of the year and although no money will be required for about 18 months, I hope that everyone concerned will be able to get ahead without further delay.
    Mr. Jenkins: While it is very welcome to hear that the Government intend to introduce legislation to deal with the matter, it would give even greater pleasure if one could see some sign of one brick being placed on another. Can my right hon. Friend give an assurance that the
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    actual building will quickly follow the legislation?
    Miss Lee: I can assure my hon. Friend that I shall do everything in my power to ensure that and that I am most anxious after these long delays that we should get ahead. I hope that we are now reaching agreement with the G.L.C., which will mean that at last we shall begin to see the bricks.
    Sir Harmar Nicholls: While this decision will be acceptable to many people who think of the possibility of Britain becoming the world powerhouse for entertainment and drama generally, will the right hon. Lady also bear in mind that it is essential that some help should be given to the commercial theatre through the remission of the Selective Employment Tax, or by initial allowances, or in some other way?
    Miss Lee: The hon. Gentleman may know that the Arts Council has set up a distinguished committee which is investigating relations between the subsidised theatre and the commercial theatre.
    Mr. W. Baxter: When my right hon. Friend is thinking about the National Theatre for England, will she remember that there is a claim for something similar for Scotland?
    Miss Lee: I would not dream of intervening directly in Scottish affairs, but my hon. Friend must be aware that Scotland received a 40 per cent. increase in its arts grant last year and that this matter is entirely within Scottish discretion.
    Mr. Batsford: I welcome the Government's decision. However, is the right hon. Lady aware that the Government's contribution is considerably less than that of the Greater London Council, because the G.L.C. is also providing the site on the South Bank?
    Miss Lee: I reached a very tough package deal with the predecessors of the present G.L.C. when all these matters were settled. There was, quite properly, a little delay, because the new council wanted to look at all the figures carefully, but I hope that we shall be able to go ahead now on the basis of the agreement reached with the present council's predecessor.

    The Arts
    Mr. Robert Cookeasked the Secretary of State for Education and Science what is to be the revised level of Arts expenditure in each of the next five years, following the economy measures announced on 16th January; and whether he will make a statement.
    Miss Jennie Lee: No decisions have been taken on expenditure on the Arts in later years, but for 1968 –69 expenditure on the Arts will total about £15·3 million, an increase of just over £ 1 million on 1967 –68. The Arts Council grant in 1968 –69 will be £550,000 more than in the current year.
    Mr. Cooke: Does the right hon. Lady recognise that the upward trend has been halted, no doubt due to the present economic measures? Will she undertake to keep the House fully informed on the nature and scope of this expenditure?
    Miss Lee: I am not sure whether that was a mark of approbation or disapproval. I can assure the House, and I was very anxious to make this statement, that the existing commitments of the Arts Council will be maintained and the 8 per cent. increase even permits a modest and reasonable increase in activity.
    Dr. David Kerr: Would my right hon. Friend accept that on both sides of the House this expenditure is regarded as very wise expenditure on behalf of the country? Would she also note that certain schemes which may be put in hand will of themselves require a constant increase in expenditure if they are to justify their initial hope?
    Miss Lee: I accept that and that is why, in maintaining commitments on existing projects, there has been a modest but, I think, a most helpful, increase on last year's grant.
    Mr. Channon: Can the right hon. Lady confirm that the overwhelmingly large proportion of the sum that she has announced will go to projects already in existence?
    Miss Lee: That is the understanding. The allocation is not for me, it is a matter for the Arts Council; but I want to assure those engaged in very wonderful work all over the country that their interests are being looked after.
    Mr. Robert Cookeasked the Secretary of State for Education and Science what savings in administrative costs related to the Arts will result from the economy measures of 16th January.
    Miss Jennie Lee: It is for the Arts Council and other arts bodies receiving grants-in-aid to decide how much to spend on administration out of the total grants agreed by Parliament. The grants-in-aid to the various bodies for 1968 –69, which will take into account estimated administrative needs as well as other essential requirements, will be published in the Estimates.
    Mr. Cooke: Will the right hon. Lady nevertheless undertake to keep the House fully informed about the administrative expenditure, because if money is short we want to be sure that it is going to projects and is not wasted on administration?
    Miss Lee: I will most certainly do that, but the House may be assured that the Arts Council is in very good hands and its business interests will be carefully looked after.

    Grammar Schools (Watford)
    Mr. Raphael Tuckasked the Secretary of State for Education and Science (1) whether candidates for the Watford grammar schools are admitted on the basis of their having attained a sufficient educational standard; and whether the schools are selective in their intake;
    (2) when, under the reorganisation plan for the county of Hertford, the Watford grammar schools will become comprehensive.
    Miss Bacon: The answer to both parts of the first Question is "Yes, at present" and to the second Question "as soon as additional building has been authorised and completed".
    Mr. Raphael Tuck: Why was the Hertfordshire plan approved without reservations to make sure that those particular schools would cease to be selective, and why was no assurance sought from the Hertfordshire authority on a particular date when they would have become comprehensive, when the Government gave their approval to the plan?
    Miss Bacon: The Hertfordshire authority scheme of secondary reorganisation was accepted in September of last

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    year without reservation as far as the Watford area was concerned. Instructions will be given at the appropriate time about the amendment to the Articles of Government in relation to the introduction of comprehensive reorganisation.

    Overseas Students
    Sir C. Osborneasked the Secretary of State for Education and Science what is the total number of overseas students; from which countries they mainly come; how much of the £1,000 a year that they each cost is paid as a subsidy from public funds; and whether, in view of the country's economic difficulties, he will cut this expenditure.
    Mrs. Shirley Williams: A total of 29,659 in full-time and sandwich courses in the Universities and Colleges of Further Education in Great Britain. In 1966–67, the latest year for which figures are available, the largest numbers came from Commonwealth countries, U.S.A., Iraq, Iran and Norway.
    The average annual cost per student ranges from about £300 for a non-advanced course of further education to over £800 for a university course. New student; pay fees of £150 for non-advanced courses, and £250 for advanced and university courses. The remaining cost is met mainly out of public funds. We have no proposals for reducing this expenditure.
    Sir C. Osborne: Why did the Minister choose to reimpose prescription charges rather than to cut overseas foreign students grants?
    Mrs. Williams: Last year, as the hon. Gentleman knows, overseas students fees were raised. In the Government's view to do this again would be unfair. Secondly, this is a form of overseas aid which does not involve any expenditure on the balance of payments.

    Road Safety Tuition (Automatic Level Crossings)
    Dr. John Dunwoodyasked the Secretary of State for Education and Science whether he will ensure that instruction en the functioning of automatic level crossings with half-barriers shall be a part of road safety tuition in all schools.
    Miss Bacon: This is a matter for the local education authorities and the
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    schools, but those concerned should be aware of the need to ensure, with the co-operation of British Rail, that, where automatic level crossings are introduced, school children are adequately instructed in their safe use.
    Dr, Dunwoody: Would my hon. Friend agree that parents in many parts of the country feel, justifiably, very anxious about these crossings? Would she further agree that there are sufficient crossings in the country for instructions and tuition to be given throughout the country and not just in those areas where crossings are being set up?
    Miss Bacon: I fully understand the anxiety of my hon. Friend about these crossings, and it is essential that children should receive some instruction, particularly if there may be a tendency to play "last across" in the same way as children do on the roads. My right hon. Friend the Minister of Transport informs me that officials of British Railways visit local schools and talk to the children, show them films of the crossings in action, and distribute posters and pamphlets.

    RHODESIA
    Dr. David Kerrasked the Prime Minister what proposals he has for discussions with the Presidents of Zambia and Tanzania on alternative policies to end the rebellion in Rhodesia.
    The Prime Minister (Mr. Harold Wilson): Her Majesty's Government are in close touch with the Government of Zambia, as with other Commonwealth Governments, on all aspects of the Rhodesian problem. Consultation with Tanzania is less easy since she broke off diplomatic relations with us in December, 1965, but as the House knows, my right hon. Friend the Commonwealth Secretary met the Presidents of Zambia and Tanzania during his African tour late last year.
    Dr. Kerr: Is my right hon. Friend aware that most of us on this side of the Chamber support the insistence on Nib-mar as a prerequisite of any further moves in Rhodesia? Would he also accept that the same majority of us on this side of the House, and I suspect a number of hon. Members opposite, would

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    equally support him if he were to demonstrate what we all know exists, that is to say, his concern for the future of Zambia and Tanzania in this context?
    The Prime Minister: I have had ample opportunity, both at Question Time and in debates, for being very well informed of the views of hon. Members in all parts of the House on this question.
    Mr. Maudling: Does the Prime Minister not recognise that any negotiated settlement is totally impossible on the basis of Nibmar?
    The Prime Minister: The right hon. Gentleman has raised that many times in the past and I would refer him to the answer I gave him on the last occasion.
    Sir Knox Cunningham: Would the Prime Minister also consult with Dr. Banda of Malawi? Could he not perhaps get a more realistic view of the present situation in this way?
    The Prime Minister: I am in close touch with the President of Malawi, as with all other Commonwealth Heads of Government. I had the opportunity of discussing this matter with the President of Malawi when he was last in this country.
    Mr. Winnickasked the Prime Minister if he will make a statement on the latest position on Rhodesia.
    Mr. Bostonasked the Prime Minister if he will make a further statement about the Rhodesian situation.
    The Prime Minister: I would refer my hon. Friends to the Answers given to Questions on this subject last Tuesday by my right hon. Friend the Commonwealth Secretary and to my own Answers to Questions on 18th, 25th, 30th January. —[Vol. 757, c. 1067; Vol. 756, c. 1948; Vol. 757, c. 578; Vol. 757, c. 1087.]
    Mr. Winnick: Is the Prime Minister aware that some Conservative M.P.s have been saying in Rhodesia that the régime should stick it out because a Conservative Government would drop sanctions immediately? Would the Prime Minister consider asking the right hon. Member for Kinross and West Perthshire (Sir Alec Douglas-Home), when he makes his visit to Rhodesia, to dissociate his party from that form of mischief-making?
    The Prime Minister: I am aware that on past occasions, particularly just before the last General Election, this kind of wishful thinking existed on the part of Rhodesian authorities, as a result of things said to them. I have certainly no need to make any representations to the right hon. Gentleman, because his own record in this matter, when he was Prime Minister, is very clear and I know that he will wish to stand by the warning that he then gave to the then Government.
    Sir Alec Douglas-Home: I thank the right hon. Gentleman very much. Am I right in thinking that he has put his right hon. Friend in Coventry for a month?
    The Prime Minister: As the right hon. Gentleman knows, following his distinguished example, I do not interfere in these matters, having complete confidence—as I think he had—in my Chief Whip. The right hon. Gentleman will be aware that unlike the situation in Rhodesia, the activities of all Members of Parliament in this country are abundantly reported, and not subject to censorship, as in the country he is shortly to visit.
    Mr. Frederic Harris: When will the Prime Minister realistically face the fact that, contrary to his own expectations, sanctions have failed and will continue to fail? What does he propose to do next?
    The Prime Minister: If the hon. Gentleman thinks that sanctions have failed, he had better get in touch with the Rhodesian Tobacco Growers' Association to see whether it agrees.
    Mr. Bellenger: Has my right hon. Friend noticed the conciliatory replies by Lord Shepherd, the representative of the Government in another place, during the debate on Lord Alport's suggestion about Rhodesia? Lord Alport was the Government representative who went to Rhodesia. When will we have an opportunity to discuss these cognate matters?
    The Prime Minister: I am well aware of what was said in another place on these matters. What I think is regrettable is that the important statement made by Lord Alport, on his own responsibility, was fully censored in Rhodesia so that

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    the advice which he then gave was not available to the general public of Rhodesia. My right hon. Friend will be aware that, after we invited Lord Alport last year to put certain propositions and to sound out feeling there, it became clear from my right hon. Friend's visit that, far from any move being made towards acceptance of the "Tiger" proposals, the Rhodesian authorities had moved a great deal further from them.
    Mr. Heath: Is the Prime Minister aware that, although sanctions have had an effect on the economy of Rhodesia, there is no indication that they can ever have a decisive effect on the régime in Rhodesia or on Rhodesia itself? As the Prime Minister himself has forsworn the use of force, this matter can be dealt with only through negotiation. Therefore, should not he and the Commonwealth Secretary continue their efforts to resolve the conflict which exists, some aspects of which were shown to the Commonwealth Secretary during his last visit?
    The Prime Minister: Of course, the right hon. Gentleman must take responsibility for the views which he expressed about sanctions and their possible effect. But my right hon. Friend was in Rhodesia following Lord Alport's mission and, as the House well knows, there was a very serious reversal, even from the post "Tiger" situation, by the Rhodesian authorities in that they laid down new conditions which went a long way beyond "Tiger" and were totally opposed to the principles which the Conservative Party and we ourselves have always put forward.
    Mr. Heath: If, as I believe, this matter must be settled by negotiation, surely the job of the Commonwealth Secretary is to see how the points raised by Mr. Smith can be negotiated in the context of the five principles, and that as the British Government—[Interruption] There are many observers who believe that this is not impossible. As Britain is the major country involved, surely the onus must rest on us to continue efforts through negotiation.
    The Prime Minister: The purpose of the "Tiger" discussion was to see how far we could reach a settlement based on the six principles, and that was also the purpose of my right hon. Friend's visit.
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    What became clear from the new terms insisted on by the Rhodesian authorities was that they totally rejected the principles; they have now totally rejected them. I agree with the right hon. Gentleman that all problems of this kind ultimately need to be settled by negotiation, but there is a difference between negotiation between people who want a settlement within the terms and the suggestion sometimes put to us from the benches opposite that this Government should crawl to an illegal régime.
    Mr. Thorpe: Would not the Prime Minister accept that, since all three political parties in this House voted for the application of sanctions, all three parties were entirely sincere in that vote and would not wish in any way to reconsider their position? Secondly, would he accept that the view of the Leader of the Opposition that we are dealing with aspects of a police State, to quote his own words, makes it very difficult unless we are prepared to take the first initiative?
    The Prime Minister: The phrase "police State" has been used by the leaders of all three parties. Concerning those who voted for sanctions, I have never doubted the integrity of those on this side of the House or of the right hon. Gentleman's party, or of the minority of those in the Conservative Party who on a very famous occasion also voted for sanctions.
    Mr. Wyatt: On a point of order. It was said recently that time and again on Tuesdays and Thursdays we had the same Questions on the Order Paper, the same supplementary questions and the same replies. We have now wasted 10 minutes on the subject of Rhodesia. Cannot we have another subject?
    Mr. Speaker: That point was raised last week. The hon. Gentleman must read the discussion in HANSARD.
    Mr. J. T. Price: Would not my right hon. Friend agree that if Chief Superintendent Butler had shown a spirit of defeatism in condoning illegality similar to that evinced by hon. Members opposite —[Interruption] If one of our chief inspectors, the one I have named, had shown a spirit of condoning illegality, another man called Wilson would still be living in luxury in Canada on stolen

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    money instead of having been returned behind bars in Parkhurst Prison?
    The Prime Minister: Perhaps one of the many differences between the Rhodesian case and the one which my hon. Friend has in mind is that Chief Inspector Butler had the full co-operation of the local police authorities in dealing with an illegal situation.

    NATIONAL ECONOMIC DEVELOPMENT COUNCIL
    Mr. Martenasked the Prime Minister when he next proposes to lead a discussion with the National Economic Development Council on devaluation.
    Mr. Hamlingasked the Prime Minister when he proposes to discuss with the National Economic Development Council the advantages to be obtained by export industries through the price advantage gained through devaluation.
    The Prime Minister: I expect that the National Economic Development Council next Wednesday will continue the discussion which we had at the January meeting on these and other vitally important issues.
    Mr. Marten: is the Prime Minister aware, as I am sure he is, that many British exporters have had to raise their prices very substantially since devaluation due to the increase in Corporation Tax, Selective Employment Tax, freight rates, Bank Rate—[Interruption]—this is all perfectly true. As a result, much of the value which could be obtained from devaluation is being lost. Would the right hon. Gentleman discuss with the N.E.D.C. this whole area of costs before it is too late?
    The Prime Minister: The hon. Gentleman will be aware that the announced increase in Corporation Tax is a tax on profits; it is not an increase in costs. He will be further aware that very many of our exporters have reduced their prices by varying amounts. The hon. Gentleman will have seen the statement made by my right hon. Friend the President of the Board of Trade about price policies to be followed. I have no reason to think that a large number of exporters are not taking full advantage of the new opportunities arising from devaluation.
    Mr. Maudling: Would the Prime Minister give a figure for the amount by which the advantages of devaluation have been reduced by the Government's measures in withdrawing the export rebate, and so on, and by increased costs of fuel and raw materials?
    The Prime Minister: I should want notice of that question. It was accepted by Ministers at the time that there was some derogation from the full 14 per cent. and 16 per cent. respectively as a result of the abolition of the export rebate, the latest position on which the right hon. Gentleman knows. There have been many different estimates for different industries, and, since some industries will now be able to work at full capacity rather than lower capacity, this will help to lower their costs. In general, exporters who really want to get the business have shown that they can take full advantage of devaluation to adjust their prices to whatever figure seems to them to be likely to increase their export revenue and that of the nation.

    STANDARD OF LIVING
    Mr. Martenasked the Prime Minister whether, in view of his decision to be concerned directly in the work of the Department of Economic Affairs, he will make a statement on the steps he has taken to raise the standard of living of the British people between the end of August, 1967, to date.
    The Prime Minister: The hon. Member will have seen the relevant indices affecting production, productivity earnings and prices during this period, though he will be aware of the steps we have had to take to rectify the fundamental weaknesses in our economy with which he and his former Government colleagues left us.
    Mr. Marten: Does the Prime Minister recall the remarks of the ex-Chancellor of the Exchequer only six months ago that devaluation must mean a lowering of standards for the British people? If it does not mean that, it does not mean anything at all. What steps is the right hon. Gentleman taking to lower the standard of living of the British people in accordance with the letter to the International Monetary Fund?
    The Prime Minister: The hon. Gentleman will be aware that the statement made by my right hon. Friend was fully debated for two days in the debate which followed devaluation. I have nothing to add to what was said from this bench on that occasion. Since the hon. Gentleman is now showing concern in the standard of living of the British people, he will no doubt have studied the indices to which I have referred, including the very big increase in productivity. He will recall that the Government have raised the standard of living of a very considerable number of those living on National Insurance benefits during the period he has in mind.
    Mr. John Fraser: Would my right hon. Friend try to agree performance targets with industry so that not only industry but the British people might be made fully aware of the advantages and opportunities which can accrue from devaluation for increasing their standard of living?
    The Prime Minister: My hon. Friend will be aware, not only of the work of the N.E.D.C., but of the work of the individual economic development councils in respect of the possibilities now open to industries and individual firms as a result of devaluation.
    Mr. Heath: What projection have the Government given the N.E.D.C. of the rise in the cost of living during 1968?
    The Prime Minister: Speaking from memory, as yet I do not think that any particular estimate has been put before it beyond what has been said to the House by Ministers, but I will be glad to investigate whether in the rather formidable list of documents given to it this figure has been given and give an answer in the House. As I said in answer to the previous Question about the N.E.D.C., we shall be continuing the discussion at the next meeting next Wednesday.
    Mr. Stratton Mills: Has the Prime Minister any comment to make on the National Opinion Poll published this morning which shows that two-thirds of the electorate are dissatisfied with the way in which he is running the country?
    Mr. Speaker: Order. Supplementary questions must arise from the Question on the Order Paper.
    The Prime Minister: May I answer the hon. Gentleman, Mr. Speaker, since he has raised this matter? I am sure that he would not wish, by referring to this, further to embarrass his Leader in view of what is said about him in that poll.
    Mr. Hugh D Brown: May I ask my right hon. Friend a serious question? In the light of the exhortation in his statement of 16th January to people on the shop floor, what direct encouragement can he give to shop stewards in the trade union movement to ask managements what initiatives they have taken with the opportunities that devaluation has presented?
    The Prime Minister: This is a serious Question. My hon. Friend will have seen the suggestion that I made in the course of a speech in the country during the Recess proposing that all significantly sized firms who export or who could export should set up export committees representative of managements and trade unions to discuss what either side could do to get more exports, the workers pressing, perhaps, for greater activity on the sales side and for changes in layout, and the management side asking for full cooperation in seeing that orders are met, in getting down costs and abolishing practices. I am glad to see that this proposal has received quite a lot of support in industrial circles, although some of the best firms have always had committees of this kind.

BUSINESS OF THE HOUSE
Mr. Heath: May I ask the Leader of the House to state the business for next week?
The Lord President of the Council and Leader of the House of Commons (Mr. Richard Crossman): Yes, Sir. The business for next week will be as follows:
MONDAY, 5TH FEBRUARY—Private Members' Motions until 7 p.m.
Afterwards, debate on a Motion to take note of the Parliamentary Commissioner's Sachsenhausen Report.
Motion on the Ploughing Grants (Emergency Payments) Scheme.
TUESDAY, 6TH FEBRUARY—Debate on a Motion to take note of the Ninth Report

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from the Estimates Committee, 1966–67, relating to manpower training for industry, and the Second Special Report, 1967–68.
WEDNESDAY, 7TH FEBRUARY—Supply
(9th Allotted Day):
There will be a debate on storm damage in Scotland, which will arise on a Motion for the Adjournment of the House.
Prayer on the Labelling of Food Regulations.
THURSDAY, 8TH FEBRUARY—SeCOnd
Reading of the Revenue (No. 2) Bill.
Motions on the Double Taxation Relief Orders relating to Australia, the Faroe Islands, Brunei, Fiji and the Gilbert and Ellice Islands Colony.
FRIDAY, 9TH FEBRUARY—PriVate Members' Bills.
MONDAY, 12TH FEBRUARY—The business proposed is the remaining stages of the Transport Holding Company Bill.
Mr. Heath: Is the right hon. Gentleman aware that we have put down the debate on storm damage in Scotland because we believe that this is an emergency on a national scale which demands the attention of the whole House? Could he tell us what has happened to the Bill on the reorganisation of the Post Office, and when we may expect that? Secondly, he will recall that he gave an undertaking that the very obscure White Paper on the fuel policy of the Government would be cleared up by his right hon. Friend. Can we have a firm assurance that this will be done?
Mr. Crossman: I am grateful to the right hon. Gentleman on the first subject. I had discussed whether this should go to the Scottish Grand Committee, and I felt that the whole House would prefer to regard it as a British rather than merely a Scottish disaster. On the Post Office Bill, in view of the need to relieve the burden of legislation in the House, the Government have decided to defer the introduction of the Bill to convert the Post Office into a public corporation. We intend to introduce it at the beginning of the 1968 –69 Session so that it can receive the Royal Assent as early as possible in 1969. As for the fuel policy White Paper, I think that my right hon. Friend was
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asked to make a statement about the effects of devaluation on the fuel policy, and he hopes to give the answer soon.
Mr. Victor Yates: Referring to Monday night's proposed debate on the Parliamentary Commissioner's Report, knowing that that Report is at present before a Select Committee of the House, is it not rather discourteous to that Committee that it should not be permitted to report on the matter before there is a debate on the Floor of the House?
Mr. Crossman: I am grateful to my hon. Friend, who gave notice to me that he was hoping to raise this matter. I have consulted the Clerks on the exact constitutional position, and I have consulted other members of the Select Committee. There is some difficulty here, but I want to explain my difficulty. I gave a specific pledge that, when this Report was made, there would be a debate on the Floor of the House. The Report was made before Christmas. I discovered that it was not yet being considered by the Select Committee, and that, if it ever started considering it, there was bound to be further delay. On balance, since the Parliamentary Commissioner does not report to the Select Committee but to the individual hon. Member who raises any issue, I thought that the individual hon. Member and Parliament would wish to have the Report considered as soon as I received word that the Foreign Office was ready to reply. As this was, unusually, a matter in which the whole House was interested, I thought that the whole House would like to consider it at the earliest opportunity.
Mr. Tapsell: Can the Leader of the House tell us why the Government are not seizing the opportunity in next week's business to give effect to the Prime Minister's recent pledge that the most vulnerable sections of the community will be shielded from the effects of devaluation? When will appropriate announcements be made?
Mr. Crossman: The answer is that the amount of damage done between devaluation and now to the most vulnerable sections would not really justify immediate measures. There is, therefore, no immediate prospect of these measures being announced as a matter of immediate urgency, because the effects do not justify it.
Mr. C. Pannell: Will the Leader of the House please reconsider what he has said about the Sachsenhausen affair? Obviously it would have come with far greater force if the Select Committee could have examined all that was said, and pursued some of the matters in that Report and brought them to the attention of the House. It would be most unfortunate, after the Parliamentary Commissioner had ruled on it, if it even appeared that certain culpable people were allowed to ride away on a debate on the Floor of the House rather than that proper consideration be given to the faults in the Civil Service itself by the Select Committee.
Mr. Crossman: I considered this very carefully. and I would not deny to my right hon. Friend that there is an important issue here where we need to get our procedure correct. I would remind him that the Parliamentary Commissioner is an official who works for the individual back-bench Member of Parliament. I am sure that it would be a mistake if we made it an absolute rule that, in every case where the Parliamentary Commissioner has given his report to the individual hon. Member, we should be denied any discussion of it on the Floor of the House until the Select Committee had made a second consideration. This does not seem to be what we intended, and I am not prepared, therefore, to make an absolute rule. I thought that each case needed to be considered on its merits and, in view of the absolute pledge which I had given for a full debate of the s case on the Floor of the House, I had no doubt, after nearly two months' delay, that the House had the right to hear what the Foreign Secretary had to say in reply and to debate it.
Mr. Sandys: Concerning the Government's legislative programme for the Session to which the right hon. Gentleman referred a moment ago, can he say whether it is still the intention of the Government to introduce legislation to reform the House of Lords in this Session?
Mr. Crossman: I do not think there has been any change in the programme at all.
Mr. Lawson: Is the Leader of the House aware that the Parliamentary Com-
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missioner's Report was only published on 20th December last, that the House rose for the Christmas-New Year Recess, and that there has virtually been no opportunity whatsoever for the Select Committee to examine this matter? Is he also aware that at the last meeting of the Select Committee it was decided that it would be detrimental to its functioning if this report were taken away to the Floor of the House? Would he, therefore, reconsider this matter?
Mr. Crossman: This is a matter where we have to work out our procedures as we go between the Select Committee and the Floor of the House. After careful consideration, I wrote to each Member of the Select Committee saying that I regarded this as a quite exceptional case. I said that normally I would think it was in order for the Select Committee to consider it first, but in this case what I had said to the hon. Gentleman the Member for Abingdon (Mr. Neave) and others made it imperative for me, after waiting nearly two months, to adopt this course. After all, this is redress of a grievance. There are people waiting to have their grievances heard, and I am not prepared to wait six months for that.
Mr. Hogg: Will the right hon. Gentleman recall that this is the fifth time I have had to ask him about the Gaming Bill and on each occasion I have received an assurance which has not been fulfilled? Does he realise that this continued uncertainty and delay combined with other factors is rapidly producing a situation which is becoming chaotic?
Mr. Crossman: The factor which has caused anything chaotic in the world of gaming has been less my statements here than certain decisions of the courts. Decisions of the courts have to be taken into account by Ministers introducing new Bills. In my view, it is not unreasonable, in view of these extremely important decisions of the courts, that the Home Secretary should take another careful look at the Gaming Bill.
Mr. Hogg: Can he say when he will come to a conclusion?
Mr. Crossman: I appreciate the right hon. and learned Gentleman's need—indeed, the need of the whole House and the country—for a quick decision. I hoped to give it this week. I could not

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give it this week, but if the right hon. Gentleman talks to the Home Secretary about it he will find that there is no undue delay. There is a major difficulty created by the uncertainties, which themselves have been created by the decision of the High Court.
Mr. Heath: Does this mean that this Bill may not go ahead this Session?
Mr. Crossman: I would say that the most probable thing is that the Bill will have to de reconsidered in the light of the court's decision.
Mr. Dobson: My right hon. Friend has announced deferment of the Post Office Corporation Bill. Would he have discussions with his right hon. Friend the Postmaster-General about notifying the vesting date of the new Corporation, because the pile up of delay in this matter is causing concern to the staff involved?
Mr. Crossman: I think I made it clear, in answer to the first question by the Leader of the Opposition, that the date of vesting would be postponed for only a very few months. In fact we would hope to get the Royal Assent as early as possible in 1969. That means that the vesting date would be postponed by perhaps three or four months.
Mr. Selwyn Lloyd: Reverting to Monday's debate at 7 o'clock, is it not a fact that this is a Motion to take note and that therefore the Select Committee will be able to take into account, not only the Report, but also the Foreign Secretary's statement and the debate in the House. and nothing will prevent it making a further report?
Mr. Crossman: I am grateful to the right hon. Gentleman. That is a fact. If the Select Committee, in its wisdom, feels that there is a further matter to investigate arising from the report of the Parliamentary Commissioner, nothing we do on Monday will prevent it from doing so. I would add that if the Select Committee had begun its investigations and started taking evidence, I would probably have reflected that it would be highly embarrassing to have a debate on the Floor of the House. Since the Select Committee has taken no action whatsoever on the report, this does not arise, and the Committee will be free to in-
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vestigate the case after the debate on Monday with the advantage of the Foreign Secretary's statement and any statements on the Floor of the House.
Mr. Orme: Will my right hon. Friend bear in mind that he should not lean too far backwards to the Select Committee on the Sachsenhausen affair, because some of us would like to see action following Monday's debate. This is a matter of public importance. The House has pressed for a settlement and it should now be resolved. I do not want to see it lost in a Select Committee or anywhere else. Can my right hon. Friend give an assurance that we can expect some action as from Monday, because there are many people on this side of the House who want a settlement in this matter.
Mr. Speaker: That can be raised in the debate on Monday.
Mr. Crossman: My hon. Friend thought I was leaning over backwards in favour of the Select Committee. By no means all Members of the Select Committee took the view of some of my hon. Friends behind me. A number of Members actively support the debate taking place on Monday. I can assure my hon. Friend that a firm announcement will be made by the Foreign Secretary about the steps that he is taking to deal with the situation.
Sir A. V. Harvey: Is the Leader of the House aware that next Monday is satisfactory to some of us who have been interested in the matter. One of the individuals involved is suffering from very bad health. The sooner this matter of compensation is settled the better, regardless of any Select Committee. If we want another debate we can have one at a later date.
Mr. Crossman: I am grateful to the hon. Member. I would add that one thing which urged me to have the debate quickly was the anxiety of the Foreign Secretary, now that certain things have been pointed out, to redress as rapidly as possible the grievance which has been raised. It seems unfair for him to make a statement which the House is unable to debate. Therefore, if he were to redress the grievance, the time to have the debate is when he makes the statement. I hope we shall not delay the

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redress of grievances by insisting that no action can ever be taken on a Parliamentary Commissioner's report before the Select Committee has made a second examination.
Mrs. Rençe Short: My right hon. Friend acted with commendable speed in response to our request last week for a day for the Estimates Committee. May I ask him when he feels he is likely to be able to give a second day to discuss the report from the Estimates Committee which has received the Department's reply?
Mr. Crossman: My hon. Friend should be grateful for the swift action last week. I do not think I can promise such a rapid accession to her demand today.
Mr. Bryan: Does the Leader of the House appreciate that when the Postmaster-General promised the introduction of the Post Office Reorganisation Bill for January, this promise was listened to very carefully by Post Office workers'' Does he appreciate the extent to which the delay which has been announced will affect the morale of Past Office workers whose careers are deeply affected by this fundamental reorganisation?
Mr. Crossman: Certainly that is a factor that I was bound to take into account in coming to this decision. I have no reason to believe that a delay of three to four months in the vesting date will have any effect on the morale of Post Office workers.
Mr. Alexander W. Lyon: Is my right hon. Friend aware that the Members of the Select Committee considering the Report of the Parliamentary Commissioner would not be serving on it if they were not interested in the speedy redress of justice, and that the only reason they are raising the conduct of this particular case is that they were grossly kept in the dark by the Leader of the House? The letter to which he referred, which was speedily written, was written only at 9.30 last night, after the almost unanimous opinion of the Select Committee had been conveyed to him by the chairman. What is in issue in this particular case is whether the Select Committee ——
Sir H. Lucas-Tooth: On a point of order. I have refrained from taking part
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in these exchanges as Chairman of the Committee, but it is my duty to suggest as a matter of order that we should not discuss proceedings which occur in Committee until the Committee reports.
Mr. Speaker: The hon. Member is right. It will be out of order to discuss the proceedings of the Select Committee until it has reported.
Mr. Lyon: I referred to the opinion of some Members of the Committee only because the Leader of the House had already expressed some views ——
Mr. Speaker: Order. I hope that the hon. Member will take advice from the Chair.
Mr. Lawson: Is it not the case that the Leader of the House has already referred to some Members of the Select Committee being in agreement with him? Is it not the case that he has therefore discussed the proceedings in that Committee and got away with it? If my right hon. Friend is permitted to get away with it, should not my hon. Friend also be allowed to continue to discuss ——
Mr. Speaker: Order. I assure the House and the hon. Member that if one hon. Member was allowed—to quote him —to get away with it, I would allow another to do so, but that is not the position. I hope that we are not going to spend a lot of time on this. We have a lot of business ahead of us. What the Leader of the House was referring to was his communication to members of the Committee.
Mr. Peyton: May I ask the right hon. Gentleman whether he agrees that it is totally inadequate to duck the issue of the fuel policy White Paper by saying that his right hon. Friend hopes to answer a question at some time? What we want is a clear statement from the Government about whether they stand by their White Paper. May we have it next week?
Mr. Crossman: There is no question of the Government not standing by their policy. My right hon. Friend was asked whether devaluation had had such a substantial effect on policy as to modify it. The answer is that it has not, and he will give the reasons why in answer to a question.
Mr. Randall: Reverting to my hon. Friend's statement about the Post Office, and the deferment of the legislation until next year, is he aware that this will do very little to allay the apprehensions of the staff of the Post Office, as against the staff associations? They are apprehensive at the moment, particularly about conditions of work, superannuation, and a number of other matters. Is there nothing that my right hon. Friend can do to allay the apprehensions which have arisen because of the delay in introducing this legislation?
Mr. Crossman: I do not think my hon. Friend can say that the apprehensions have been caused by the delay, because they were there before I made my announcement twenty minutes ago. The apprehensions are about the substance of the case, and do not arise from anything that I have said today.
Mr. Dance: Has the right hon. Gentleman read Motion No. 126 relating to the iniquitous idea of disbanding the Civil Defence Corps and the Auxiliary Fire Service?
[This House calls upon the Government to reconsider its decision to disband the Civil Defence Corps and the Auxiliary Fire Service which deprives thousands of volunteers of their right to train and serve in a rôle which has been recognised by this Government and its predecessors as a necessary and important part of a policy of the deterrent against the threat of nuclear war, and which has already saved the lives of many of their countrymen in peace time.]
Will he give the House a chance to debate this subject before these excellent services are disbanded?
Mr. Crossman: The House will have plenty of opportunity to debate this when the Order comes before it.
Mr. Maclennan: May I ask whether the Government, having indicated their sympathy with the recommendations of the Latey Committee on the age of majority, intend to bring forward legislation soon to implement them?
Mr. Crossman: I think I can safely say that we shall not bring it forward in next week's business, or even in the business of the week after next.
Dame Irene Ward: As the Government will block my Theft Bill, having quickly introduced a Theft Bill in another place, may I have an assurance that this Measure will be dealt with speedily so that protection may be afforded to museums and galleries, and, secondly, that the Government will not play party politics with this very important issue?
Mr. Crossman: I do not think that there is any question of playing party politics. If I remember rightly, the Theft Bill has been introduced in another place, and I would like, if I may, to have discussions with the hon. Lady, in her time, behind the Chair.
Mr. Molloy: Reverting to the Sachsenhausen debate on Monday, may I stress that this is a very important matter to those officers involved? Is my right hon. Friend aware that his decision today will be welcomed by most Members of the House, and indeed throughout the country, in not allowing a form of machinery of the House to become a self-imposed brake, and at the same time being determined to do his duty after the debate?
Dr. Winstanley: Would the right hon. Gentleman agree that the Select Committee discussing the Parliamentary Commissioner's Report is in no way responsible for the Foreign Secretary's delay in making a statement or taking action on this matter? He could have made a statement to the House at any time.
Mr. Crossman: I suggest that we should not anticipate the debate on Monday afternoon. I do not think that one can blame the Foreign Secretary or the Foreign Office for any delay in dealing with this Report. Both my right hon. Friend and the Foreign Office worked faster than the Select Committee.
Mr. Roebuck: As this is Human Rights Year, and also the 50th anniversary of the Parliament (Qualification of Women) Act, 1918, can my right hon. Friend find an early opportunity to debate the curious practice which is growing up of Conservative parties vetting the wives of prospective Parliamentary candidates? Is he aware that such a debate would be extremely topical in view of the Arab slave market that we have seen at Warwick this week? Will he provide an early opportunity to discuss this?
Mr. Speaker: Order. Important as the topic may be, the hon. Member must not pursue it in detail at Business question time.
Mr. Crossman: It is a novel idea, but I suggest to my hon. Friend that there are opportunities in private Members' time for such intimate Motions as that.
Mr. Webster: In view of the difficulty of finding time for the Post Office Bill, may I ask the right hon. Gentleman whether he is aware that Standing Committee F will be glad to give time and precedence for it over the Transport Bill, for which there is no urgent need?
Mr. Crossman: I take note of the hon. Gentleman's tastes in Bills.
Mr. Mendelson: Does my right hon. Friend recall that the Minister of Power undertook not only to consider the effects of devaluation on the fuel White Paper, but to consider carefully the Report of the Committee on Science and Technology, particularly on the future development of nuclear energy? Will my right hon. Friend accept my assurance that people in mining constituencies want the Minister to do a thorough job on this and not rush it, and to take all relevant factors into consideration?
Mr. Crossman: I am grateful to my hon. Friend for that statement. As I said last week, my right hon. Friend is taking the trouble to make a most considered reply to the Committee, and I have postponed the debate on the Committee's report until that reply is published, which it should be in March.
Mr. Younger: Can the right hon. Gentleman say why it is that the Scottish Sanding Committee will not be meeting on Tuesday of next week? In view of the large number of matters waiting to be discussed, is it not incompetent that we should waste a whole day?
Mr. Crossman: I would like to consult my right hon. Friend the Secretary of Sate for Scotland and in due course give a considered reply to that unexpected question.
Mr. Wyatt: Will my right hon. Friend consider having a full day's debate on the fuel policy? If he thinks that devaluation has made no difference to the Government's fuel policy, many people think that adding £85 million a year of
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foreign exchange to the oil bill, and going on with the nuclear power stations at enormous capital cost—
Mr. Speaker: Order. The hon. Member can ask for time; he cannot argue the merits.
Mr. Crossman: I think that my hon. Friend misunderstood me. I said that it had had no basic effect on the facts on which the policy was based. I will consider giving a day, but I have already said to my hon. Friend the Member for Penistone (Mr. Mendelson) that when we come to debate the Report of the Select Committee on Science and Technology—and this is a vital aspect of the policy —there will be a whole day's debate, I hope.
Mr. Jopling: May I ask whether the right hon. Gentleman has seen Question No. 88 for Written Answer today? Will he give an undertaking that if the Minister of Agriculture wants to make a statement about the increase in the price of bread, he will come to the House and do it? In view of the well-known enthusiasm of the Leader of the House to enhance the prestige of Parliament, will he give an assurance that there will always be time for Ministers to come to the House to make important statements rather than deal with them by planted Written Questions?
Mr. Crossman: I agree that on important issues a statement to the House, followed by questions and answers, is preferable to dealing with them by Written Answers, but there are times when replies are so technical that the House would become impatient. [Interruption.] I agree that this is not technical. I will tell my right hon. Friend of the hon. Gentleman's wishes.
Mr. Marks: May I call my right hon. Friend's attention to Early Day Motion No. 118 which stands in my name and has been signed by 49 hon. Members?
[That this House considers that as an interim measure prior to the raising of the school-leaving age in 1973 a single annual leaving date in July of each year should be introduced as soon as possible to enable all children to receive a full four-year secondary school course.]
This urges that a single school leaving date should be established, and has

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received considerable support in educational circles. Can he give time for an early debate on this?
Mr. Crossman: I cannot give any assurance about an early debate, but my right hon. Friend the Secretary of State for Education and Science has taken very full notice of this Motion.
Mr. Awdry: Does the right hon. Gentleman realise that the work of the Standing Committee which has been sitting for so many hours on the Transport Bill is hindered and hampered by the failure of the Minister of Transport to produce the Report on road and rail costs? Would he see that that Report is in our hands next week or the Committee suspended?
Mr. Crossman: I have looked into this matter since the remarks last time. I am assured by my right hon. Friend that no delay has been caused in dealing with the passages of the Report now being discussed, and that the relevant information will be well available before the part of the Bill is discussed to which the hon. Gentleman refers.
Mr. Wellbeloved: Would my right hon. Friend rearrange next week's business to provide time for a debate on the vicious escalation of the war in Vietnam as a result of the Vietcong offensive? Would he bear in mind that it is desirable that the House should debate this so that the Prime Minister may be assured, before flying to Washington, that he has the overwhelming support of the House in his genuine and courageous search for peace in Vietnam?
Mr. Crossman: I will communicate that message to my right hon. Friend, but I cannot give hope of a debate on foreign affairs next week. We had a two-day debate on foreign affairs in the very recent past.
Mr. Gresham Cooke: Would the right hon. Gentleman take note, with regard to an extra day for the Estimates Committee Report, that there is an excellent Report on prisons and the prison service, with about 200 recommendations, to which the Home Office has replied, which should have an early debate?
Mr. Crossman: It is not a question of an extra day; we have not yet ex-
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hausted the time allocated to Reports of the Estimates Committee.
Dr. Kerr: Noting the regrettable but, we hope, still reversible decision to reintroduce prescription charges, would my right hon. Friend give us time to demonstrate that all the money which this would produce could well come from the pharmaceutical industry ——
Mr. Speaker: Order. We cannot debate an issue under the guise of a Business question.
Dr. Kerr: I was asking for time to debate the Sainsbury Report next week.
Mr. Crossman: I do not think that it will be debated next week, but I would have thought that my hon. Friend will have many opportunities when we reach the Orders dealing with prescription charges.
Mr. Monro: Would the right hon. Gentleman give a definite assurance that the Minister of Agriculture will make a statement in the House next week if the price of bread goes up today?
Mr. Crossman: I will certainly communicate that request to my right hon. Friend.
Mr. Lomas: Does my right hon. Friend not appreciate that, by allowing the House to reach a decision on the Sachsenhausen Report, the authority of the Select Committee and the P.C.A. will be undermined? Does he not also agree and confirm that the letter sent to the members of the Committee was not received until 9.30 last night, and, further, that the real answer to this would have been to get the Foreign Secretary to make a statement to say whether he agreed or did not agree with the findings of the P.C.A.? If he did agree, this would have been acceptable and, if he did not, it would have been a matter which could he investigated by a Select Committee of this House.
Mr. Crossman: I would have thought that the House had this problem really in perspective after the considerable number of questions which have been asked. There are times when this House of Commons and its right to debate something is more important than the rights of a Select Committee. There is no question of acting contemptuously. The House

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has a perfect right to debate this any time that it wishes, and I think that we were right to do so early and clear this matter up.
Mr. Onslow: Can the right hon. Gentleman confirm that the Government have now decided not to proceed with the necessary Order for the expansion of Stansted Airport? If not, when will we get this Order?
Mr. Crossman: I do not think that it will be next week.
Mr. English: Why did my right hon. Friend, in mentioning that the Parliamentary Commissioner reports privately to individual Members, not mention that this Report is not of that sort but is a published special Report with the object being considered by the Select Committee? Will my right hon. Friend agree that we all want to redress the immediate grievance but also want to prevent such things being caused in future by this Department, as it has done in this case?
Mr. Crossman: All I can say is that my hon. Friend is under a misapprehension about the nature of this Report. It is a perfectly normal Report by the Parliamentary Commissioner on a matter raised by a Member of the House. It is true chat it was raised by him after ho had put down an Early Day Motion and got many hundreds of names to support it, but that does not alter the procedure. It was not published simply to show the Select Committee but because it was of great interest to practically every hon. Member. As we all cared a great deal about it, and as the Foreign Secretary was deeply concerned to act as quickly as possible to repair the damage, I am amazed that hon. Friends of mine should behave in this way.
Mr. Heath: Would it not be helpful if the right hon. Gentleman offered to meet the members of the Select Committee
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after the debate so that these matters can then be rearranged for the future?
Mr. Crossman: This is an excellent idea, because, as I said, there is some tidying to be done. This is an unusual Select Committee. It is not like the Public Accounts or Estimates Committee, because the Parliamentary Commissioner's relationship to it is not the same. That relationship is to the individual Member and the House as a whole, and if there is any doubt in the minds of the Members about their function, we can discuss this with them. But I took the precaution of clearing this with the Clerks and discussing with you, Mr. Speaker, whether there were any question of impropriety or contempt of the Select Committee in the House debating this next Monday. I satisfied myself that there was not.
Mr. Marten: Can we have some time a debate on space activities?
Mr. Crossman: The proper answer is, "Yes, some time".
Mr. David Steel: Before the Christmas Recess, the Leader of the House held out some hope of a half-day debate on the Report of the Services Committee on the new building. Has he still that in mind?
Mr. Crossman: I still think that this is something which the House might consider, but we have very important things to do up to the Budget.
Sir Harmar Nicholls: While proud that the Opposition are giving some of their limited time to discuss the Scottish tragedy, some of us wondered why the Government did not do so. It seemed to me a matter which could have been better dealt with in some of their more abundant time.
Mr. Crossman: That is the kind of matter which we sometimes discuss through the usual channels.

INDUSTRIAL EXPANSION BILL
Order for Second Reading read.
4.8 p.m.
The Minister of Technology (Mr. Anthony Wedgwood Benn): I beg to move, That the Bill be now read a Second time.
This Bill consists of two separate parts. Part is concerned with specific projects for which special legislation is sought—for example, the increase in the borrowing powers of the N.R.D.C., the acquisition of Beagle, the financing of the Queen Elizabeth 2, and so on, and I shall be dealing with these projects separately when I come to the Clauses which provide for them. In addition to these projects, I shall want to deal separately with the question of a specific Clause covering the production and financing of Concorde.
However, the main part of the Bill deals with industrial investment schemes and invites Parliament to make provision for new and more general powers in relation to industry and to strengthen Parliament's rôle in this respect. I thought that it would be helpful if I dealt with this part of the Bill first. Since I understand that this is likely to be—or was likely to have been—a controversial Bill, upon which the Opposition intend to divide the House, I thought it would be useful to give some explanation of why the Bill has been brought forward so that the debate can be set in the wider context.
There is little disagreement between the two sides of the House on the need for Government financial support of industry. This has long been accepted and established by Governments of both parties. It has expressed itself through various Measures, in the form of special allowances or grants, or through loans or guarantees or even, in some cases, through equity participation.
For example, the Conservative Government supported the aircraft industry by giving assistance in the form of launching aid to the development and production of civil aircraft, civil aeroengines and associated equipment. They
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also supported, when they were in power, the shipbuilding industry by adopting measures under the Shipbuilding Credit Act, 1964, to stimulate orders for British yards. When in office, the party opposite supported the cotton industry under the Cotton Industry Act, 1959, designed to help firms to scrap old machinery and to re-equip. The Iron and Steel Act, 1953, provided for Government assistance where additional production facilities were required, and in 1959 and 1960 substantial loan agreements were made with Colvilles and R.T.B.
Thus, in proposing today a new Measure designed to make Government support for industry possible, no novel principle is involved. What is new is the scope of the powers sought and the machinery by which assistance is to be authorised and given. Up to now, Governments have always acted either by virtue of executive powers, as in the case of Fairfields, for example, or by promoting a special Statute, as in the case of the recent Shipbuilding Industry Act.
Neither of these methods is wholly satisfactory either to the industry concerned or to the Government or to Parliament itself. Executive action under general powers entirely without reference to Parliament—this has often happened —denies the House any say whatever. By contrast, if the alternative procedure is adopted, the industry concerned may suffer if it has to wait for special legislation, which is very lengthy to prepare, present and pilot through. I have in mind the shipbuilding industry, which would have gained greatly had the present Act been available earlier.
This delay has meant that action within the time scale which, after all, in all these cases, is dictated by industrial realities, has been almost impossible. Since the object of all the schemes has been to assist industry, it is industry which suffers if there is delay. In practice, all Governments in recent years have tended to anticipate the legislative timetable by promising, and, in some cases, actually granting, the necessary funds in advance of full enactment. Looking back on this, I find that a Labour Government did this in respect of the Cotton Spinning Re-Equipment Subsidy Act, 1948 and the party opposite in the case of the Shipbuilding Credit Act, 1964.

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Where promises have been made by Ministers, they have been given under a cover of a cautious formula to provide against the possibility that the Bill may be delayed, defeated or dropped. Ministers have had little option in operating schemes of this kind, but I find the practice of Executive anticipation highly unsatisfactory: it unquestionably erodes Parliament's authority. Therefore, if we are to accept that Governments are going to have to support industrial reorganisation or investment or any sort in future, there is a strong case for an Act of Parliament which formally lays down the ground rules upon which such intervention or support should take place and provides machinery for authorising specific acts of intervention as and when Ministers decide to recommend them to Parliament and Parliament to approve them.
Whatever arguments we may have on the Bill —this will obviously be an interesting debate today and in Committee—the House should first confront this argument, that this embodies an important improvement in constitutional arrangements, so that, however we do it, there should be ground rules which the House lays down and on which it later authorises clearly what should be done. One of the interesting things which strikes one in reflecting on the Second Reading today is that the House is having one of its very rare opportunities—I almost said its first opportunity —for a broad discussion on the general nature of the relationship between Government and private industry and the form which financial help should take. With the exception of the special Clauses on specific projects, with which I will deal later, the Bill does not, of course confer any special powers on the Government without further reference to Parliament.
It does provide that Ministers may present proposals to the House, involving the use of the powers contained in the Bill, and then seek Parliamentary authority for schemes or projects which make use of those powers. This authorisation would be by affirmative order and would activate the ground rules in respect of a specified scheme. If the Bill had nothing else to recommend it—although, I believe. that it has—I suspect that it might be justified on these grounds
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alone, for it will allow action to be taken more rapidly, within more clearly defined limits and under more direct Parliamentary control than has been the case hitherto.
So much for the machinery and Parliamentary aspects of the Measure. I will now briefly set the Bill in its wider economic context. Some hon. Members may sincerely believe that the best thing that Government can do is to minimise their relations with industry and allow market forces to operate as freely as possible [HON. MEMBERS: "Hear, hear."] I imagined that that would be the view of some hon. Gentlemen opposite. This argument certainly merits debate, but I shall confine my remarks to one argument in contradiction to that view.
No advanced industrial nation in the world does, or possibly could operate on that principle. That is not to say that all intervention is good. I would not go so far as to say that. However, a doctrinal objection to all intervention—reflected by the primitive growls which greeted my earlier question—is wholly impracticable. Apart from the Government's rôle in relation to the defence industry—which has always been regarded as a special case—intervention has now extended, broadly, to the support of aerospace generally. Indeed, I am often urged by hon. Gentlemen opposite to intervene directly, by means of financial support, to support various aerospace projects—and, of course, aerospace taken in its broadest sense embraces the work of an enormous sector of science-based industries.
In this country Government support of aerospace has taken the form, long accepted, of launching aid, including research and development expenditure—some of it very expensive indeed—for civil aircraft and for our own space projects. In the United States, however—where defence and space spending are both relatively and absolutely far higher than ours—the impact of United States Government spending is correspondingly greater. It is no exaggeration to say—and certainly any industrialist in any of these industries will agree with this—that many, if not all, of the most advanced science-based industries in the United States have had their progress paid for by the American tax-payer and Government.

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The seven billion dollar budget of the American Space Agency this year is not just a most expensive return ticket to the moon. It is the means by which the electronics industries—including computers, telecommunications, microelectronics,
numerically-controlled machine tools firms and a number of others—have built up their present commanding position, done on enormous development contracts and production orders paid for by the Federal Government in Washington.
Mr. Nicholas Ridley (Cirencester and Tewkesbury): Would the right hon. Gentleman care to say how much of that seven billion dollars has been spent on acquiring equity capital in those space and science-based industries in America?
Mr. Benn: I am obviously coming to the question of equity. I am now dealing with the growl which emanated from hon. Gentlemen opposite—and, if my ears told me aright, the hon. Gentleman contributed greatly to the noise—and to the argument that the Government should keep entirely out of industry.
Sir Tatton Brinton (Kidderminster): Will the right hon. Gentleman remind himself that he spoke of minimising Government relationships with industry, and not eliminating them? Is he aware that my hon. Friends and I do not suggest that they should be eliminated, but that they should be minimised?
Mr. Benn: My argument is that the American Government by maximising their intervention, have put their industry in a highly competitive position. Even it we are arguing about degree, it is an important point of principle. Based on this, the American industry has been able to compete abroad with a huge, growing, publicly-generated home market and to sell at prices that are difficult, if not sometimes impossible, for us to match.
We in this country have neither the need nor the resources to fight back using the same techniques. However, it is clear that the Defence Department in Washington and the Space Agency are running their industrial expansion programme in a way that is directly beneficial for I.B.M., I.T. & T., Westinghouse and a number of other famous American corporations—and, indirectly, through the
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spin-off which this creates, to other American industries.
Important though this sort of fall-out or spin-off is, I have the gravest doubts as to whether the benefits of it correspond to the scale of the expenditure involved. Indeed, I suspect that this is not a very cost-effective way of proceeding and that, in seeking to stimulate growth more directly, as this Measure does, we could get a far better return on a far lower outlay of public funds. It is clear that we simply cannot ignore the massive scale of American and other public enterprise stimulation of science-based firms in the private sector.
Those who criticise the idea of Government intervention have a responsibility to provide alternative answers to this problem. How do they propose that British industry should be helped to face this competition? Can they say on what possible grounds of logic or common sense one can argue for limiting the Government's capability for stimulating advanced production simply to aviation and space, and for denying other engineering industries similar advantages? Why should there be launching aid for civil airliners and not for sophisticated machine tools, new generations of computers, the latest electronic communication systems or, indeed, any other advanced project?
This is not a purely theoretical question. It has become a practical problem in my Department because we inherited from a number of other Departments' powers which had grown up in different circumstances—a rag-bag of differing powers which had grown up piecemeal over the years without any obvious logic whatever. For example, I inherited from the Minister of Aviation and before that from the Minister of Supply, very great powers in defence production and research. Some of these powers are temporary and some have been renewed on an annual basis. Also from that Department came the power to encourage the production of civil aircraft, including production financing by means of launching aid.
On the shipbuilding side, which we inherited from the Board of Trade, it was necessary to come forward with a special Measure, which was passed last year, to set up a board, to provide it with

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finance and to allow it to become involved in the reorganisation of the industry. By contrast, in relation to other industries, my Department is limited—as are the Government generally—simply to civil research and development contracts. They are useful, but they are a poor substitute for the more comprehensive capability in the other spheres which I have mentioned.
The Industrial Expansion Bill does, therefore, do more than just extend the power of the Government in relation to industry. It rationalises a whole host of powers that have grown up higgledy-
piggledy, and leaves the Government with a general capability to help any industry in accordance with clearly defined rules, if the House is prepared to approve a scheme.
I shall go a little wider in putting the Bill in its context, and relate the work that will be done under it to the central economic problems facing Britain. These problems, which have often seemed intractable under Governments of all parties over the last 25 years, do not lend themselves to an easy solution. Various remedies have been attempted and all of them have some part to play.
The reduction of overseas spending, especially in relation to defence commitments, will ease the burden on the balance of payments. The evolution of a prices and incomes policy is reducing the risk that inflation may cheat us of the fruits of growth. Devaluation, much as we tried to avoid it, will make our exports more competitive in price. But it is widely accepted, on both sides of the House and in the country as a whole, that the competitiveness of British industry, especially in the advanced fields of science and technology, will decide whether or not we can overcome our past weakness and advance at a higher rate of growth, with a payments surplus, full employment and without inflation.
The Bill will contribute towards a solution of this problem. Nobody thinks for a moment that direct methods can succeed alone and in isolation. However competitive British industry may become, we will not get out of our difficulties if we remain over-committed abroad, allow inflation to impede us or are driven into deflation by the burdens of an insupportable exchange rate.
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It would be equally foolish to think that, by dealing with all these things, we shall have done everything that needs to be done. Direct intervention, if it is sensibly organised, can greatly reinforce other measures, and it should be devised for that purpose. That is why I wish to relate the theme contained in the Bill to the switch of resources which was one of the things which came out of the statement made recently by the Government on public expenditure.
I say this because the object of the Bill is to reinforce the switch of resources. This was also the object of our cuts in the public expenditure programmes; and in any parallel measures that may be, taken in relation to private consumption. This switch of resources can be presented in terms of a changed emphasis in respect of industrial policies. Not only have we decided to base our world rôle on our geographical location as a European power, but we have also decided to concentrate far more national attention on ways and means of strengthening our industrial base.
Three changes in emphasis are made possible by the Bill. The first is the shift of emphasis in industrial policy—the shift of resources from defence to civil industries, which is implicit in the policy which we have announced and which will release men and money for industrial growth. This is paralleled by an extension of capability on to the civil side.
The second is the shift from an almost exclusive preoccupation with aerospace and nuclear research—in which the Government have always done a lot, because it was only in those spheres that they could do a lot—to the development of a more general capability for helping all engineering and other industries.
The third shift of emphasis—to which a great deal of attention has been devoted —is a movement away from the limited approach to growth implicit in the support of research and development to a more direct recognition that production technology—production itself and marketing—are at least as essential to the achievement of industrial strength. Formidable as our national research capability is—and it is formidable indeed—our commercial performance has not in the past been commensurate with the amount of money we spend as a nation on research and development. It is a

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remarkable anomaly, which I urge the House to consider, that we should have extensive powers to help industry in one respect—namely, in research and development—but no similar capability to help in others. This is something which the Bill will allow us to correct. It will make it easier for us to achieve these changes of emphasis, and the Government will not be limited in their capacity to stimulate industrial growth simply by the accident of history which has confined them to certain sectors and certain rôles within each sector.
This, then, is the general background to the Bill, and I come to some of the questions which a Measure of this kind inevitably and properly raises. The first question which I suspect will be raised today—and which has been anticipated by some Press comment—is whether the Bill is necessary, even allowing that we want to do these things? I have tried to deal with the general argument in support of a Government rôle in relation to industry. However, there are some critics who, though they may accept this, may ask why existing organisations like N.R.D.C. and I.R.C. cannot be used instead.
Anyone considering the matter will see that N.R.D.C.'s rôle in this context is not as complete an argument as the I.R.C. argument. This argument will not, we know, come from hon. Gentlemen opposite, who were bitterly opposed
to the I.R.C. However, part of the answer is that both N.R.D.C. and I.R.C. will be used whenever possible, and that there is no intention of duplicating their work or creating competitive machinery.
N.R.D.C. and I.R.C. are effective because they have clear terms of reference laid down by Parliament and because they enjoy an independent status. For example, N.R.D.C., which was criticised by hon. Gentlemen opposite when it was established in 1948, was set up with the intention of concentrating on stimulating innovation and technology. This is part of the job I am talking about in connection with this Bill, but it is not the whole of the job. There may be projects which are rich in export potential but which are not technologically interesting. If they are not they fall outside the terms of reference of N.R.D.C. This Bill does not represent a vote of no
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confidence in N.R.D.C. Because there is a doubling of their borrowing ceiling from £25 million to £50 million, which is sufficient proof of confidence in N.R.D.C., and of itself refutes any suggestion that the Bill will derogate from their rôle.
The I.R.C., for which my right hon. Friend the Secretary of State for Economic Affairs is responsible, has equally clear terms of reference. Its principal rôle is the rationalisation of British industry and it has been quite active in its first year. What needs to be done in some sectors of industry may well go beyond rationalisation. It may involve the evolution of a policy that does not require rationalisation at all. To give an example, I.R.C. could hardly have taken on board the reorganisation of the shipbuilding industry as recommended in the Geddes Report, because this required the undivided attention of a small board able to use a number of different techniques.
I think the House knows that Sir Frank Kearton has accepted my invitation, if the Bill is enacted, to become Chairman of the Advisory Committee. One of the purposes of the Committee will be to provide that members of N.R.D.C. and I.R.C. shall have an opportunity of considering projects, initiated either by industry or by Ministers, for possible action under the Bill. This Committee will have among its functions the job of seeing that the two Corporations shall have an opportunity of deciding what rôle they want to play, if any. This will not derogate from their authority or independence or oblige them to act as agents for the Government if they do not wish to do so.
I can envisage circumstances in which N.R.D.C. and I.R.C. might well cooperate with each other to carry through a part of a project with or without the executive participation of a sponsoring Department. In so far as they do this, it will mean that the Government delegating as they have in a number of areas, the execution of industrial policy to industrialists who now serve on the two Corporations. The same is equally true of industrial boards established under the Bill comparable to the Shipbuilding Industry Board, which is doing a good job of work of a kind which no Government Department could do on its own.

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I hope, however, that, critics of the Bill will see some quite interesting possibilities implicit in the further development of this technique, because even those who dislike the idea of a growing rôle for Government in industry should be relieved to find that wherever possible the job will be discharged by those with experience of both sides of industry rather than by Government Departments themselves. This certainly is how I visualise this partnership developing and it is a new aid interesting departure.
The second question which may well be asked in the debate is, what projects are likely, to come up under the Bill? This question, of course, is impossible to answer for exactly the same reason as it was impossible to answer exactly the same question during the Second Reading debate on the I.R.C. Bill. At that time quite a lot of play was made with the question, "What do you want I.R.C. for?". All I could say is that this is new machinery and we shall see. When I look back to that time I realise how absurd it would have been to suggest that we could have said in 1966 that about the summer of last year I.R.C. would help English Electric to join with Elliott Automation, that a little later they would help G.E.C. to take over A.E.I. and that in about a year they would be working on the merger of B.M.H.-Leyland.
I ask hon. Members who may today ask what projects may come under this Bill to look back to the exactly similar situation which occurred over the other Bill when we said that it was impossible —and it was impossible—to anticipate exactly how the new Corporation would work.
Mr. John H. Osborn (Sheffield, Hallam): Will the right hon. Gentleman accept that where the environment is conducive to amalgamations and mergers other agencies could do that work and there is no need for a Government agency sponsored by a Minister to do it? Why cannot public money be used as little as possible rather than creating another organisation for the use of this money? This is the argument we shall deploy.
Mr. Benn: That was the argument against the N.R.D.C. Lord Chandos, speaking about the N.R.D.C., described it as "a mug's game". The argument
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was that if there were inventions worth having the market would take them up. Then we had the argument about I.R.C. If the hon. Member is saying, after 18 months' experience, that he thinks the I.R.C. was unnecessary. he will not be one who is saying, "Why are we not using I.R.C.?" To that extent he meets my point. It would be better to look at this in the light of the facts.
Where would, the market have been in the Geddes operation in shipbuilding? Where would the hovercraft or the cephalosporin activities have been but for the N.R.D.C.? Are we sure that the market would have dealt with some of the things which the I.R.C. has? I ask hon. Members to be more pragmatic in their approach to these matters. All machinery is experimental and has to be judged in the end by results, but new machinery may play a part in this area to which hon. Members opposite have objected hitherto on doctrinal grounds.
It is of course true that a number of possible projects have been considered by my Department, but until the Bill was published and consultations with the firms or industries concerned had taken place it would not be possible to see which of these schemes should be brought forward to the Advisory Committee or embodied in an affirmative Order for presentation to the House. Schemes under the Bill, just like work done by the I.R.C., would be of such a nature that the tightest security would be necessary on commercial and financial grounds. I am not at all embarrassed, and I do not think anyone on this side of the House would be embarrassed, not to circulate in the OFFICIAL REPORT
things which would be done in the next 12 months.
I wondered whether the party opposite had changed, because the right hon. Member for Enfield, West (Mr. Iain Macleod), who denounced the I.R.C., said when the Bill was debated:
"We do not think it is the Government's business; we do not think the Government do it very well; we do not think the Government should do it at all."—[OFFICIAL REPORT, 15th February, 1966; Vol. 724, c. 1228.]
That was his argument, so he will not be urging us to use the I.R.C. for the purposes of this Bill.
The next question 6, what safeguards are there against the support of lame

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ducks? This is a point which the hon. Member for Eastleigh (Mr. David Price) raised in the debate on shipbuilding, when he said:
"I have a curious preference for supporting success."—[OFFICIAL REPORT, 9th March, 1967; Vol. 716, c. 1798.]
So am I. It is perfectly fair to put this question. It is one to which the Government are more interested in finding an answer than is the Opposition. Since the powers of the Bill will, it is explicitly stated, not be used when alternative sources of finance are available, we are here talking about schemes and projects of a kind where the risk of failure is inextricably bound up with the possibility of success.
This has often been accepted in relation to civil aircraft where not every project has been successful. One of the reasons why we have the Advisory Committee is that it can look at this aspect, but we do not intend to use the industrial schemes to finance lame ducks. We have the Advisory Committee to help us, but we shall not put to the Advisory Committee schemes which are likely to come into that category. Only those people who believe that the national interest can never be different from the interests of the market could rule out any possible necessity for powers of this kind.
I come to the next question, which is about unfair discrimination. This is a point which has been raised about Government support for one firm as distinct from support for another. This is a real problem, but one that can be over-stated. Quite apart from discrimination in procurement policy, where procurement has been used to further industrial policies as with the airframe mergers of 1960, there is an equally wider scope for discrimination in Acts of Parliament. For example, under the Science and Technology Act of 1965 civil and research and development grants are left to the discretion of the Government. But in practice charges of discrimination have not arisen and I should be surprised if they arose under the present Bill. In so far as it is necessary to justify powers that could be discriminatory I think I would base myself on the need to be selective. Selectivity as a principle has recommended itself strongly to the party opposite in one connection and it seems
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to have greater force in this connection. It seems to me that it has rather greater force in this connection, because the object of industrial policy, as we see it, is to pick winners and not to run an undiscriminatory "meals-on-wheels" service for British firms whether they are efficient or inefficient.
Mr. Cranley Onslow: I am interested in this line of argument. Is not the Minister aware that some of the things which he has said already tend to suggest that he will not be able to do what he is now claiming? Much of the interest which may be brought to him will not be so much because an industry is a high-risk industry as because a project is one which, for various reasons. is incapable of earning an acceptable profit. Therefore, he will find himself in a position of buying more and more lame ducks unless he tackles the profit question.
Mr. Benn: I see that point. I think that it is a perfectly fair point. I would accept that, when the Bill is on the Statute Book, many people may ask for money. The question really is what criteria we should use to judge whether to support them. The aircraft industry, in which the hon. Gentleman has an interest, is always coming to the Government and saying, "This is a high risk which we cannot carry. Will you support us in this project?" This has not been controversial. Nobody has said, "This is a lame duck". Indeed, it would be a curious reference to a fast aircraft to call it that. The answer has always been that this is a high technology industry where it is proper for the Government to contribute to maintain a capability, but this has not been possible in other areas.
A great deal has been made of the question of equity. People have asked, "Why do you propose to take equity at all?" The C.B.I. and the Opposition have chosen to concentrate upon this and to make it the spearhead of their attack. No doubt we shall hear the same spine-chilling warnings from the Tory Party this afternoon to the effect that any form of soft embrace by the Government ends up with a grip of iron from which there is no escape. This line of attack, although extremely popular, will not be very effective, because it really is not true. There is no compulsory power in the Bill.
Mr. Stanley Orme: Why net?
Mr. Benn: I will come to that later. I did not think that I should get away with it as easily as all that. We had all this before when the I.R.C. was debated. The Chairman of the Tory Party at that time—as a matter of fact, I am not sure whether he was then Chairman of the Tory Party; no doubt the speech he made on that occasion helped to secure his promotion—gave the most terrible warnings about what I.R.C. would do. Whatever may be thought of I.R.C., nobody would accuse it of having spread the tentacles of Whitehall power and Socialist ideology into the virgin lands of pure free enterprise. It has been fulfilling a different function of fertilisation by consent.
Mr. Patrick Jenkin (Wanstead and Woodford): I will not follow the right hon. Gentleman in his metaphor. Surely he recollects the undertakings given over and over again in the House to the effect that it was not the function of the I.R.C. to become a permanent shareholder in enterprises. The very first thing I.R.C. did was to take a shareholding in Rootes or the take-over by Chrysler.
Mr. Benn: There is nothing permanent in that: where is the permanency? I ask they hon. Gentleman: where is there any statement by I.R.C., by Chrysler, or by Rootes that the holding in that company is permanent? Can the hon. Gentleman point to it?
Mr. Patrick Jenkin: If the hon. Gentle-man is prepared to give an indication to the House that I.R.C.'s shareholding is to be put on to the market in the near future, then, of course, I shall withdraw what I have said.
Mr. Benn: First, there is a provision for repayment. Obviously the hon. Gentleman has not followed it. Secondly, to take the view that everything which is still going on is permanent is to make a very curious assumption. This was a decision in that instance, and it did not breech a single undertaking given in the House. Anyway, my argument is not that the holding will not be permanent, but that there are no compulsory powers in the Bill. If the hon. Gentleman can find compulsory powers in the Bill—powers for the compulsory acquisition
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of equity under the general provisions of the Bill—he is on to a very different point.
Sir Harry Legge-Bourke (Isle of Ely): As we have got on to the Rootes-Chrysler issue, I must intervene. One of the things which was most disturbing about that was that, after all the assurances we were given to the effect that I.R.C. would be allowed to use its own independent judgment on matters of this kind, the very first thing it had to do was something which it was made to do by the Minister.
Mr. Benn: No, that is totally untrue, and I am very glad to have the opportunity of saying this in the Bill. It is true that under Section 2(1)(b) of the Industrial Reorganisation Corporation Act, the I.R.C. can be asked to do certain things; but in the case of the Chrysler-Rootes holding the Corporation was not compelled to take this holding. Indeed, I say publicly in the House that the proposal for a holding came in the first instance from that source and not from me.
I come on now to the question, which is really quite an important one: why should there be an equity holdin at all? This same provision was included in the Shipbuilding Industry Bill. When that provision came before the House, the Opposition spokesman said that he did not have any particular doctrinal objection, but he thought on practical grounds that he preferred to support success.
The reason for this is that, if the Government are to invest millions of £s in private industry, it is reasonable that, among the legal ways of doing this, should be a capability, by consent, of providing that the rewards may be shared along with the risk through the subscription of equity capital.
I cannot visualise how often an equity holding will be proposed or accepted. Neither can I forecast on how many occasions the proposal for the equity holding will come from industry and be rejected by the Government, or on how many occasions the proposal may be the other way round.
For those who, like my hon. Friend the Member for Salford, West (Mr. Orme), would like to see compulsory powers, I would simply say that this is not the Bill to do that. That is all I would say. If it is right to nationalise an industry or a firm, it seems to me that this ought to go through the full

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machinery of an Act of Parliament and it would be quite wrong to attempt it as a by-product of a Bill which has different objectives. This means establishing a difference in conception, which I think is very real and important, between nationalisation, on the one hand, which is something which I think should be done by enactment, and the use of a public agency, a form of public enterprise, in co-operation voluntarily with industry. This is really what the difference is. I think that less nonsense would have been talked about the Bill over the last six months if those who had had access to knowledge about its provisions had not tried to stimulate this sort of extremely irrelevant criticism of the provisions of the Bill.
Sir T. Brinton: Would the right hon. Gentleman make one thing clear, though? If an enterprise says to the Government, "We need assistance under the Industrial Expansion Act?", will the Government be in a position to say, "We will not supply any assistance unless we get equity shares in exchange", because this is not clear? It seems to me to be a two-way bargain in which the Government could do this, in which case they would be using a form of compulsion.
Mr. Benn: No, there is no compulsion. No firm will be obliged by Statute to receive a Government equity participation. I know what the hon. Gentleman is on. He is asking: if a firm comes to the Government and says, "We want a grant of £50 million for this project", a project which may be very profitable, will the Government be in a position to say, "Yes. We will let you have it, but part of it, or all of it, will be in equity and we think that this is the right way to do it"? Then it is for the firm to say, "We do not want it". That is entirely for the firm to say. What the hon. Gentleman is asking for is a prescriptive right for industry to come to the Government to get money on terms which suit the firm or industry without any regard to the interests of the taxpayer or of the community as a whole. This is not an argument which can be presented quite as simply as the hon. Gentleman would have it.
I turn now to deal quickly with the specific Clauses of the Bill. I do not
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know whether I need do this at any great length, because they will all be coming up in Committee.
Clause 1 authorises sponsoring Ministers to provide financial support for industrial projects by means of industrial
investment schemes. To do this, the Minister concerned, with the approval of the Treasury, must lay a draft before Parliament and obtain approval by resolution of the House of Commons. Since a scheme is in essence concerned with the expenditure of money, it is thought right that control of these schemes should rest with the House of Commons alone.
Clause 2 defines the purpose of a scheme, namely, that it must be for any industrial project likely to be to the benefit of the national economy. It must be calculated to improve efficiency, to create or expand capacity, or to promote or support technological advance in an industry or section of an industry. It must be one which would not be undertaken without Government financial support. In other words, there is no attempt to replace the existing means of financing investment. It excludes the nationalised industries and the Shipbuilding Industry Board, till the end of its life, from the provisions of the Bill.
Clause 3 makes clear that schemes——
Mr. Onslow Mr. Onslow rose——
Mr. Benn: I would like very much to give way, but I know that many hon. Members wish to speak. I said that I would refer to the Concorde, and I shall do so later.
Clause 3 makes clear that these schemes may be either for a whole industry or a section of an industry as well as for projects for particular firms. Such a scheme may involve the creation of an industry board, which may be given other matters to administer. The Clause provides also for such a board's constitution and status and for the disqualification of its members from Membership of the House.
Clause 4 provides that the schemes will specify the aggregate amount of expenditure which may be incurred, and that the overall limit shall not exceed £100 million, or £150 million if the House raises the limit.
Clause 5 authorises me to appoint an advisory committee and pay its administrative expenses. I have already referred

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to that. The Corporations may provide staff and other facilities to enable the advisory committee to do its work.
Clause 6 provides for an industry board to be dissolved on the date prescribed. I think that a temporary life for a board may be right, as with shipbuilding; but it may necessitate Orders in connection with solution
Clause 7 provides for the Ministers exercising these powers to report annually to Parliament. Clause 8—here we move from the general to the particular—provides for the "Queen Elizabeth 2" scheme.
Clause 9—this is another of the special aspects Of the Bill—makes an Amendment to the Shipbuilding Industry Act, 1967, to widen the purposes for which grants may be made to shipbuilding and main engine manufacturing firms in connection with the reorganisation of their resources. This is a detailed point which does not come in the general category which I described earlier.
Clause 10 provides for the ceiling of the N.R D.C. to be increased to £50 million. Clause 11 provides for the purchase of the assets of Beagle Aircraft. The need for legislation in this case arises because it is necessary to amend Section 1(1) of the Civil Aviation Act, 1949, which prevents me at the moment from manufacturing civil aircraft. One hon. Gentleman said that what had been done so far was illegal. That is quite inaccurate. It is done under the Civil Aviation Act, and I shall furnish him with information about it.
Clause 11 provides further that the application of the proviso may be set aside in relation to a transaction which is the subject of an industrial investment scheme. That, again, applies to an aircraft scheme. Clause 12 and Schedule 3 deal with powers derived from the Ministry of Supply. I shall not go into this in detail now. They are inherited powers which are being rationalised and brought up to date.
Clause 13 provides for a special power needed in relation to the Board of Trade. It is this Clause which occasions the very large number of repeals referred to in Schedule 4. Clause 14 provides for moneys which are received by way of repayment to be paid into the Exchequer.
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Clause 15 provides that the power to make a scheme is to be expressed by a Statutory Instrument, and, similarly, that it [may] be revoked or varied by a subsequent Order.
Clause 16 relates to Northern Ireland. Clause 17 provides for the Short Title of the Bill and for the repeal of certain enactments.
I come now to the question of financing the Concorde, to which I referred briefly at the beginning. As I have told the House, I have been authorising the purchase of certain long-dated items, and the production programme is on schedule. However, as the project proceeds, the build-up of expenditure on the production side will increase, and it would not be right to continue to finance it on this basis. Specific legislative authority must be sought from the House. I believe that the proper course here is for me to introduce a separate Clause in the Bill, with its own financial provision, seeking specific authority for Concorde financing. The Long Title of the Bill is in such terms as would permit this to be done, although a new Money Resolution would be needed.
The details of the scheme for supporting Concorde production have yet to be agreed with the manufacturers, but I hope to be ready with a Clause shortly. I propose, therefore, to introduce this separate self-contained Clause for the financing of Concorde production during the Committee stage. However, in view of the scale and importance of this operation, I think that it would be right to make a statement in the House at the time of tabling the Clause, and there will be an opportunity for the separate Money Resolution to be debated before the Clause is discussed in Committee.
Finally ——
Sir Keith Joseph: Before the right hon. Gentleman comes to his peroration, there is one matter to be cleared up. I am not quite sure—perhaps I should be—whether the specific proposals to increase the money available to Cunard, the N.R.D.C. and so on come out of the £100 million immediately available or are in addition to the £100 million. Will the right hon. Gentleman make that plain?
Mr. Benn: There was an unusually inaccurate Press report about this. The

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£100 million relates to the industrial investment schemes, and Cunard and N.R.D.C. are special provisions. The same applies to Beagle ——
Mr. David Price: And the S.I.B.?
Mr. Benn: —and the S.I.B.—these are special provisions which are, as it were, one-Clause Bills within the Bill itself. But they are absolutely categorical and specific, and the enactment of the Bill will authorise expenditure of these moneys for these purposes. No other money whatever is authorised by the Bill, except that the House would be enacting a Measure which would allow later Orders to come forward which would in total allow schemes up to £100 million to be authorised. Therefore, the report which took the individual projects and fitted them into the £100 million was inaccurate. It is quite clear from the Bill, and I am glad that the right hon. Gentleman gave me an opportunity of making the point.
Mr. Orme: Is the rate of interest in respect of the Concorde to be the same as it is in respect of Cunard?
Mr. Benn: My hon. Friend had better wait till I am in a position to come forward with the arrangements for the provision of Concorde finance. I do not want to be tempted into a comparison between the Concorde and Cunard because I should get into difficulty.
Mr. David Price: The right hon. Gentleman has said that he will produce the new Clause with regard to the Concorde later. Will the financial provision necessary for this Clause be included within the £100 million, or will it require a Financial Resolution additional to what we are already being asked to vote on tonight?
Mr. Benn: I have covered that, but I realise that it is very complicated. No, it is not intended that the £100 million for the industrial investment schemes will embrace the financing of Concorde production, so a new Money Resolution will be presented. When I make a statement in the House, there will be an opportunity to ask questions, and then there will be the Money Resolution, after which the Committee will have an opportunity to debate it.
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I am sorry to have taken so long, but there were many interventions which I could not myself control. I shall now summarise what I have said about the Bill and commend it to the House. The complexity and the cost of modern industrial processes are such that Government and industry are being driven closer together in every country of the world. Other great industrial nations—whether they be Communist or capitalist does not seem to make much difference —have evolved ways and means of stimulating technological progress and industrial development by either direct or indirect means. We must do the same. The Bill is intended to lay down the ground rules which will make possible stimulation without subsidy through a partnership of enterprise, private and public. This we propose to do through a Measure which will give Parliament the fullest opportunities itself to decide the ground rules in general and then, in each case, to see how and when they should be applied; and all this must be done within a time scale which is rapid enough to meet the deadlines which are dictated not by Government desires but by industrial events.
For all these reasons, my colleagues and I believe this to be a good and useful Measure which will do the job it is intended to do. I believe that it will rapidly pass through the zone of political controversy into a period of, at least, peaceful coexistence, and, I would say, active co-operation between the Government and industry, upon whose wealth-creating rôle all of us ultimately depend for our livelihood and the future of this country.
5.0 p.m.
Sir Keith Joseph: We are grateful to the Minister, particularly for his courtesy in giving way to a number of my hon. Friends. But we must begin by declaring our opposition to the Bill, which I shall try to explain as clearly as I can.
First, we take exception to the pretentiousness of the title, an electioneering title if ever there was one. So far as the unknown future projects are concerned—I am not referring to those listed in the Bill—a more accurate title would be, "A Bill to lend and often lose the money of the taxpayer." This is a capital

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borrowing Bill, not a technological Bill, and not necessarily an industrial expansion Bill.
It is brought forward by a Government who have failed in all their main economic duties. They have failed to diagnose the state of the economy correctly. They have always been caught unprepared. They have failed to control public expenditure. Admittedly, no Government have ever entirely succeeded in controlling it, but the present Government have done far worse than normal. They have also failed altogether to release the energies of the people by improving the tax system, which they have made steadily worse.
The Bill has been brought forward by a Government whose three years in office have been crowned by a forced devaluation for which there was absolutely no contingency planning. It has been brought forward by a Government who, eight weeks after devaluation, produced some cuts in Government expenditure, many of which were bogus and which were followed at once first by a Transport Bill which will add heavily to the costs of our competitive private industry, and then by this Bill, which will hinder rather than help the purposes we all have at heart.
The Bill has been, and still is to some extent, all things to all people. It was announced by the First Secretary of State in Birmingham last 25th June as a move in the direction of extension of public ownership. Those terms were confirmed by the Prime Minister, and the Bill was treated as a sop to the Left-wing by the Government. As we heard from the interventions of some hon. Members opposite during the Minister's speech, for a long time it has been one of the panaceas of Members of the Left, whose views are no doubt sincerely held, that a general enabling Bill leading to dictated operations and activities by individual firms and industries could be the prelude to a fabulous breakthrough in industrial growth, a sort of British leap forward.
When the C.B.I. reacted very sharply in response to the First Secretary's comments and quoted to the Government the present Foreign Secretary's assurance that after the Steel Bill the Government had no intention of moving further towards a purchase by the Government of equity
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participation in private enterprise, the Prime Minister and the Government played it down. But there is still the element in the parentage of the Bill that is due to a conciliatory attitude towards the Left-wing, and the naïve expectation that the Government can choose better than the market what industry will one day find profitable.
The second element in the Bill's parentage is the Government's disappointment with the performance of the I.R.C. during its first year. This afternoon the Minister gave us a panegyric of the I.R.C. It is true that we on this side of the House have not seen fulfilled under the present and past management of the I.R.C. the fears we expressed from the Dispatch Box. But we understand that it is just because some Ministers were disappointed that those fears were not fulfilled, and because the I.R.C. refused to jump its fences and force its panaceas on industry, that the Bill was conceived. I see that an hon. Gentleman opposite, who I believe is in the counsels of the Government, nods his head in approval of that. The hon. Gentleman, the Member for Heywood and Royton (Mr. Barnett) is chairman of the Parliamentary Labour Party's Finance Committee.
Mr. Joel Barnett (Heywood and Royton): No influence.
Sir K. Joseph: We must defend the I.R.C. against one charge which the Minister made against it this afternoon —I am sure by mistake. He told one of my hon. Friends that the I.R.C. intervened purely off its own bat in the Rootes-Chrysler deal. But the present Financial Secretary to the Treasury said on 1st February last year:
"The Rootes-Chrysler deal was under Section 2 (1,b)."—[OFFICIAL REPORT, 1st February, 1967; Vol. 740, c. 652.]
That is the subsection giving the Government power to direct the I.R.C. On reflection, the Minister may wish to correct that point.
Mr. Benn: I am interested to hear that the right hon. Gentleman is now revising his view of the I.R.C. That is the most interesting part of what he has just said. He has really withdrawn his opposition to the I.R.C., just as he will to the Bill. I will check HANSARD to see if my recollection is correct. I referred

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to the Rootes-Chrysler case being done under Section 2 (l,b), but that does not give the Government power to direct the I.R.C. The I.R.C. has an absolute right to do or not do something even when a request goes in under that Section and in that case the proposal would come not from me but from Mr. Grierson.
Sir K. Joseph: It may be that we are both right in our way, and that under Section 2 (l,b) the I.R.C. retains its freedom to act.
The third stand in the parentage of the Bill comes from the Minister's speech at Cambridge last September, when he spoke of selective intervention as being the dominant industrial strategy of the Government for the coming 12 months. We believe that the Government are still failing to do all the things that are essential for the economic climate, and are preferring to elevate a series of more or less—I emphasise "less"—sensible activities of Government into a strategy. The Bill is one of those minor activities.
There are some commitments in the Bill to Cunard, the N.R.D.C., the Shipbuilding Industry Development Board, and in connection with Beagle—and now with Concorde—which are far better probed in Committee. We believe that each of those should have been brought before Parliament in a separate Bill, so that they could have been scrutinised even more fully. However, I believe that it is not for us to go into them in great detail in a Second Reading debate, beyond pointing out that the S.I.B.'s provisions go considerably beyond Geddes, and beyond the proposals and commitments of the Government during the Committee stage of the Shipbuilding Industry Act.
We want to meet the Minister on his main argument. We naturally accept that there is a profound interaction between Government and industry in this country, as in any other. But we maintain that it is the Government's main job to get the economic climate right and get enterprise operating in the public interest by the two main motivating forces of competition and incentives within the proper framework of law.
We maintain that, given the right economic climate, most projects which
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make sense will not be frustrated for lack of money. We are blessed with a capital market which is the envy of the world. I do not think that I am exaggerating. Whether it will remain the envy of the world if the Government continue in office introducing deliberately, or sometimes by mistake, a series of measures which weaken the flow of capital through the market into successful industry, we may very much doubt. The Government have deliberately dried up the issue of equity shares. By their tax policy they have dramatically cut the retentions of companies, which are the source from which all new investment and risk-taking must come. The Government are thoroughly ambivalent and schizophrenic about investment. They want investment and they want risk taking, but, by their tax policies and by their attitude to prices, they have reduced, not just slightly but dramatically, the funds on which companies depend for industrial risk taking, namely, retentions.
Mr. Barnett: Will the right hon. Gentleman agree that under his own Government every time the country went into a period of boom it was found that, because of the investment policy which had previously applied, there was a shortage of capacity despite everything the Government had done?
Sir K. Joseph: That appears to be true, but it does not follow from that that a mere quantitative increase in investment is the solution to our problems. The quality and use of investment matter as much as quantity.
The Government are introducing a Bill to encourage and help investment and risk taking in private enterprise, and yet they are the same Government who in the same month have raised Corporation Tax by 2½per cent., which by all informed opinion will reduce retentions by companies by no less than £80 million in a year; and who quote as the largest of their post-devaluation cuts an £80 million postponement of an admittedly unannounced proposed acceleration in the payment of investment grants, in other words, a further £80 million cut in the cash flow of industry from which investment and risk taking must come.
In preparation for the debate I was amazed to find that retained earnings of industry between 1965 and 1966 were

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halved as a result of the 1965 Finance Act, a reduction of several hundreds of millions of pounds. The 1967 comparison may show an improvement, but this example shows the damage which the Government are doing through their general fiscal policies, damage which in part they are seeking to repair by the Bill. [HON. MEMBERS: "Where is the money going?"] The money is going in distribution and most of it flows back to me Chancellor of the Exchequer through Me tax payer, because the Government wrongly calculated that industry would cut its distribution and hold its retentions. If an industry were to do that, it would make itself the victim of take-over bids, because its shares would be under valued. It is because the Government lack the normal knowledge of the market that they are defeating their own objective. I believe that the Government want more investment, but they are defeating their own objective and destroying confidence by their own naïve actions.
Mr. Frank Hooley (Sheffield, Heeley): Has the right hon. Gentleman seen the second Annual Report of the Prices and Incomes Board, which drew attention to the fact that over a period of four years private industry has had £1,700 million retained profits available for investment which it completely failed to invest?
Sir K. Joseph: But industry has been in vesting more than it has retained profit, because it has borrowed in order to invest and it has had the help of Government grants to invest. It would be a sophisticated sum to compare retentions with investments.
It is true that a number of industries competing with ours have the backing of immense support from their Governments through defence procurement orders, particularly in America, and we accept that the Government have a big and important job to do in seeing that our equivalent industries have the chance to prosper and flourish. But, like Professor Galbraith in his recent book, the right hon. Gentleman drew most of his arguments from areas where the Government are the main client. The Minister made play with the fact that where the Government are the main or only client, in space and in defence, they have had power to help industry by research and development and procurement orders,
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and he asked why the Government should be restricted in their help to industry to the defence and space areas.
The Government already have immense powers as the client and buyer, and the Minister will not deny that. Ministers have immense power in specification if the Government as the client want to improve technology, performance, standards and export competitiveness in a vast range—civil as well as defence—of British products and services, and for those industries the Bill is totally unnecessary. Where the Government are not the client, the Minister and his colleagues already have vast powers under existing legislation to support research and development and they have the activities of the N.R.D.C., the I.R.C., the I.F.C., and the I.C.F.C. to support production, or to help industries seeking to improve their production.
"But", says the Minister, slightly complainingly, "the Government are concerned because we do not seem to get from visible exports suitable recompense for the vast research effort which goes into industry". Has he never contemplated that it may be because so much of the vast research effort in this country is carried out in Government research establishments, as has been the case under both parties? We believe that if some of the talent in Government research establishments were bid for by industry and if the Government gave research and development contracts under their existing powers and as the client of many industries, whether civil or defence, that talent would work far more effectively.
Do not the Government recognise that the American nuclear breakthrough has come from a combination of minimal Government research and maximum private enterprise research, whereas in this country—and I am saying nothing against the A.E.A.—private enterprise has not been encouraged by research and development contracts to participate in the identification of the commercially exploitable systems and their commercial development?
There is here huge scope for debate on which I can only touch, but we believe that the Government have ample powers, through all the agencies which I have mentioned and as buyer and through

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research and development contracts, to give all the encouragement they want to the technological or other progress of industry.
Of course at the end of the day there will remain individual projects and schemes—and the Shipbuilding Board and the Cotton Reorganisation Board were typical—falling outside the Government's powers and outside the powers of all Government agencies and outside the powers of R. and D. expenditure by the Government. That we recognise and, as the Minister quoted, we took various relevant actions ourselves. But it was hypocritical for the right hon. Gentleman to talk of the Bill strengthening Parliament's hand.
The difference between the two sides of the House is that we object passionately to these large powers being given to the Government by way of an enabling Bill. We have no objection to the Government's bringing forward specific proposals when neither the market nor the Government's existing powers or agencies, give the Government the opportuity to help. We have no objections to such proposals being brought forward in full Parliamentary procedure through a Bill, so that they can be given full scrutiny by the House.
Mr. Orme: Money without power.
Sir K. Joseph: On the contrary; we believe that it is right for the House to have the fullest chance to scrutinise any proposal by the Government for this kind of expenditure where neither the Government's existing extensive powers nor the market will do what the Government judge to be in the national interest.
We accept that there will be such cases. What provision are the Government offering to Parliament? Affirmative Resolution procedure! That has a minimum time and a minimum of stages —one only—and no power to amend. This destroys the Minister's right to talk of this Bill as strengthening Parliamentary control. We brought forward individual Bills and, if necessary we shall bring forward individual Bills again in those cases where neither the existing powers nor the market suffice for something that we judge to be in the national interest.
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The Minister sheered off telling us anything about the sort of projects that will come forward under this Bill. He must recognise, and he paid minimal attention to this, that if he is really true in saying that there will be no effort to displace existing sources of finance, then the commercially sound projects will be financed by the market. I am accepting of course that the ship-building industry reorganisation would not have been financed by the market. We brought in the equivalent for the cotton industry. If the Minister's assurance that existing sources of finance will not be displaced is carried out, that is to say that the Government do not offer cheaper money than the market, then I fear that this Bill will tend to lead to the use of the taxpayers' money for industrial lame ducks and white elephants—just the sort of selective social service for industry which the Minister so scorned in his speech.
This Bill provides a blanket enabling power to allow any Government to give or lend taxpayers' money, without proper Parliamentary scrutiny, to any projects for reasons that may be no more than the whim or worse of a Minister or the Government. By worse I mean anything from the most sincere belief of Ministers to the merest Parliamentary or political gerrymandering and lobbying. This is a Bill which opens the door to the possibilities of corruption. [Interruption.] It is because ——
Mr. Benn: This is a very strong word to use. Before the right hon. Gentleman passes on to a less controversial point could he say how it opens the door to corruption any more than the Government's existing powers to supply money for the aircraft industry? Why, because it is beyond the aircraft industry, does corruption enter in, or is he suggesting that the possibility of corruption has already existed in the aircraft industry? Would he explain why corruption could not equally enter in with large sums of research and development money? Is this really the right way to develop a political objection to the Bill?
Hon. Members: Withdraw.
Sir K. Joseph: I do not withdraw at all. I am making no charge against individual right hon. Gentlemen, and the Minister knows this. I am saying that it opens the door to this. The more

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public spending there is, of all sorts, the more chance there is of Parliamentary gerrymandering, under any Government. I will accept a point common to both sides of the House. We all know the inexorable pressure built up upon the Government to use public money to rescue many industries in parts of the country for which we all feel emotion, and because this Bill will give power by affirmative Order only for the spending of even more public money, we see it as an extension of the Executive's power, which we regard as already too large. It was too large under us. I make no accusation against right hon. Gentlemen when I say that this opens the door to further possibilities of corruption.
Mr. William Hannan(Glasgow, Mary-hill): If the right hon. Gentleman is not alleging corruption against Ministers, is it against members of the Industrial Reorganisation Corporation, which has the power under this Bill to review applications?
Sir K. Joseph: I will come to that in a moment.
"This Bill could mean the green light for another Groundnuts scheme."
[Laughter.] Hon. Gentlemen opposite laugh, but I am only quoting from anarticle in last week's Sunday Times by
the hon. Member for Billericay (Mr. Moonman), who is the Chairman of the Parliamentary Labour Party's Scientific and Technological Committee. They were not my words.
"This Bill could give the green light for another Groundnuts scheme."
This is from the Sunday Times of 28th January, 1968.
Of course, we accept that there may occasionally be a suitable case but why should there not be full Parliamentary procedure? Most of the long shots backed by the Government will not come off, and they will swamp the few successes that the Government, I hope and expect, will haw. Firms will no doubt, as the Minister says, queue for help, but will those be the best firms or industries, with the best projects? No. The whole record of successive Governments shows that Governments are not good, even with advice, at picking winners that the market has failed to identify.
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What reason are we given for enabling powers of this sort when the Government have such extensive powers already? We are told that there must be speed in response, but if the right hon. Gentleman was correct, and existing sources of finance will not have been displaced, then each project will have been offered, or dare I say hawked, round the market already. If the market experts have already refused the project, will it be right for the Government to rush in with affirmative Order procedure?
Would it not be wiser to take a little time and take the project through full Parliamentary scrutiny? The Minister speaks of ground rules and the White Paper speaks of a rigorous, independent and consistent system of appraisal in paragraph 8, but I find no rigorous ground rules set out in the Bill, and I do not know whether the Minister, in Committee, will be developing what he means by the discipline that ground rules will exercise.
We are offered certain safeguards and I have dealt with the inadequate one of Affirmative procedure. We are offered clearly defined ground rules, which are not clearly defined at all. We are offered, and we must take this extremely seriously, an Advisory Committee chaired by the highly effective Sir Frank Kearton. We want to ask the Secretary of State for Economic Affairs if, when he replies, he would be good enough to tell us whether the reports of this Committee will be published. Will he also tell us under what obligation the Minister will be to accept these reports and to heed the advice of the Advisory Committee?
We welcome the Committee, if we have to have this Bill, but the Advisory Committee will make no sense and be no safeguard unless its reports are published, so that if the Minister goes against them the public may be able to judge. The further safeguard that we are offered is that no one need accept the Government's money. With the Government's existing enormous power there can be pressure brought to bear on firms and industries to volunteer, if not to accept. Anyway there will be plenty of takers for easy money.
After all it is not difficult to have bright ideas if taxpayers take the risk, should they go wrong. When we were in power the present Prime Minister criticised industry for waving its begging

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bowl at the Treasury. Now the Treasury seems to be opening a special saloon bar, the "Begging Bowl Bar", for easy money at the taxpayers' expense—another reversal of attitude from the Prime Minister's opposition days.
This Government is just not suited—I beg this Government's pardon—no Government is suited to make investment decisions of this sort. A few overworked officials are not likely to be able correctly to assess opportunities which those who have their own money or careers at stake have, they may claim, misjudged. Unless the advice of the Advisory Committee is published then its presence can be small comfort to us on this side of the House.
Let the Government concentrate on improving their performance as a client before trying to become a banker.
How can the Government avoid unfairness as between firms? Perhaps the Government do not mind, because they have recently allowed the British Railways workshops to compete with private enterprise with an apparently unlimited amount of subsidy behind them.
It is true, as the Minister says, that the Government use their procurement powers and are not accused of discrimination, but they use them, as an intelligent client should, either by some enlightened form of tendering or because they lay down the specifications and price requirements and accept orders or research and development contracts only when satisfied that they will get what they pay for. Now we are talking of a totally different order of intervention which may well make for unfair discrimination between one firm and another. Generally, we believe that selective intervention of this sort is far more likely to preserve inefficiency under political pressures, despite all the Minister's good intentions, than to promote an improvement in efficiency.
Once on the Statute Book, this Bill could be used to extend the public sector, and we know that some hon. Members hope it will. We wish to repeat, and repeat again, that the public sector is inherently likely to be more inefficient than the private sector because it is not subject to the discipline of the market and because, in many cases, it is subsidised. We object to the extension of the public sector, particularly when it is subsidised.
Mr. John Rankin: Does the right hon. Gentleman seriously believe that if the development of the British aircraft industry had been left to private enterprise it would have occupied today the commanding position which it does in world aviation?
Sir K. Joseph: I think that if the Air Corporations had not been nationalised, then perhaps the British civil aircraft industry would not have such bad clients as under both parties it has had. I am admitting, as is necessary to my case, that Governments are bad investors generally, bad bankers and bad choosers, and the less they have to invest, bank and choose and the more they limit themselves to doing their own job properly, the better.
Mr. Rankin: That is begging the question.
Sir K. Joseph: If the Government continue, by attacking profits, raising taxes and eroding the capital market, to reduce the response and the volume by which the market can respond to the needs of private enterprise, I suppose that they will be able to claim that private finance is not as available as it was, or even as it is now, for adventurous projects. As I have said, the Government are schizophrenic about risk taking in investment, and it is no good, on the one hand, introducing Bills meant to encourage investment and, on the other hand, reducing the funds available for investment by many times the amount by their fiscal policy.
I wish to remind the Secretary of State for Economic Affairs of some questions which I have asked already and to put one additional question. Will he tell us about the publication of the advisory committee's reports? Will he tell us whether there is any more to the ground rules than we can find in the Bill? Will he tell us—and this is a point in which my hon. Friend the Member for Eastleigh (Mr. David Price) is particularly interested—how the Bill fits into the assurance given by the Government in the Letter of Intent to M. Schweitzer that the borrowing requirement will be limited to £1,000 million? After all, we know of a number of calls on that borrowing requirement now. Would the Secretary of State tell us how the money to be spent under the Bill fits into, as we hope it does, the assurance of £1,000 million

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as the ceiling given to M. Schweitzer in the Letter of Intent?
Apart from the individual projects—Cunard, Concorde, N.R.D.C., Beagle and shipbuilding on which I am not pretending to make detailed comments—[HON. MEMBERS: "Oh."]This is not the Committee stage. We are discussing the principles of the Bill. The Bill will probably do some good somewhere—[HON. MEMBERS: "Oh."]—wait for it—but the potential for harm of this enabling measure far exceeds its scope for public benefit. Any benefits which may conceivably emerge on the most optimistic assumptions will be trivial compared with the vast release of energy and enterprise which a real incentives and competition policy would secure.
There are constructive activities for a Government to take towards industry by its procurement policy, by its R. & D. contracts as a client, by all its existing powers, through all its existing agencies and, above all, by the general economic climate of incentives and competition. These will be our methods, and, in the exceptional case of any scheme or support outside Government powers and outside the market which we, when we are the Government, consider desirable, we shall introduce a proper Bill devoted to that project, as we did when we were in office.
This Measure has all the evils of an enabling Bill. It reinforces the fears of all but the most naiveïthe fears of the taxpayer of backing white elephants and lame ducks, the fears of industry of creeping nationalisation and of unfair competition from the subsidised and expanding public sector. These are not likely to produce industrial expansion. We on this side heartily say "Yes" to industrial expansion, but not industrial expansion by a Bill, not industrial expansion by more government and more intervention. We shall rather get industrial expansion by less and better government doing its own job properly and leaving the market and industry to do theirs.
We shall vote against the Bill. We shall probe it in Committee. If it passes, we shall repeal it when we return to power in view of the excessive powers which it gives ministers for waste and misuse of the taxpayers' money.
5.36 p.m.
Mr. Eric Moonman: I am sure that the right hon. Member for Leeds, North-East (Sir K. Joseph) will not forgive me if I follow him down his rather tortuous path, but I intend to do so. He has had a great deal of fun at the expense of a Bill which makes an attempt to provide the Government with an opportunity of assisting certain projects and which is based on a great deal of information and evidence which the Government have received over a period of time. This is not a new device. Clearly it has been considered by the Ministry of Technology for some considerable time.
The form of economic debates and debates dealing with the national economy are predictable. Most speakers offer alternative briefs to those of the Government or the Chancellor of the Exchequer. The result is that we have too many wide canvases and we cannot always see the detail for the generalisation. I hoped that on this occasion, in dealing with a specific aspect of the national economy, the right hon. Member would have adopted a much more critical approach to the Bill. I believe that there is a need for a critical assessment of the Bill. I do not think that we have had it. It may be that other speakers will contribute to the debate on a much more intelligent level.
One of the things which has troubled some of us is that when we are engaged in general economic debates there is not the facility to clarify some of our thinking on specific areas. We have a great opportunity today to look at one of the instruments, and I hope that other hon. Members will take advantage of this opportunity.
The Bill has been under fairly heavy attack, however regrettable, and this should not startle us. What is regrettable and serious is that it could be so misunderstood. The C.B.I. was opposed to the Bill at a very early stage and to the fact that this was the sort of legislation which might involve the Government in industrial planning within the decision-making processes of a company.
The Prime Minister was most charitable to the Opposition in the Gracious Speech in stating what the Bill would not do. Today, the Opposition have gone

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much further. The right hon. Gentleman said that the Government have been rather schizophrenic about the Bill. I am afraid that that is the very expression that I would use to describe his own speech. He talked about the Bill being "a minor element", which suggests that it is not important, and then he raised great bogeys about what it could do to industry. Finally, he made some unfortunate references to corruption. I have been unable to find any part of the Bill which would open the door to such abuse. He said that the Bill would extend public ownership. Again, I cannot find any reference to it. He talked about the timing of projects, and I take him to task on that because he has set the standard for what may follow from his right hon. and hon. Friends not only today but in Committee, so that he must be prepared to take this one. He is critical of the way the Bill will minimise the stages for the development of a project.
There are two elements in the Bill. First, the Ministry of Technology has been anxious to plough funds more easily into selected private industries and firms. Secondly, part of Socialist theory is to use funds to obtain for the State new ordinary shares in the companies concerned. I suspect that the Government do not wish to argue the latter, so I will relate my comments and criticisms to the former, about good management practice, based on my own experience of management and management situations.
Clearly, the Ministry has very substantial powers to aid research and development in different firms and industries under the Science and Technology Act, 1965. However, it has no similar powers to aid production and marketing in different firms and industries. The matter has been made much more acute by the gap between science and technology in Britain, so that Japan can spend less on research and development proportionately to Britain and yet obtain a greater payoff. What undermines Britain's efforts to keep pace with technological progress is our reluctance to change, innovate, explore and experiment.
In short, there are two arguments. The most productive kind of technological research aims not at new products but at new manufacturing methods. This, at best, is what the Bill is likely to achieve.
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The second point is that small and medium-sized firms still have an important rôle to play in the nation's economy but, on occasion, support and assistance is needed in certain areas. Although there is little evidence in Britain to show the interaction between technological innovations and company growth, many studies have been made in the United States, of which I might perhaps mention three.
A study by Professor Hamburg at the University of Maryland on Major Innovations from 1946 to 1955 discovered that over two-thirds of them resulted from the work of independent inventors and small companies. A study by Professor Merton Peck, now at Yale University, of 149 inventions in aluminium fabricating techniques and aluminium finishing found that major producers accounted for only one of seven important inventions. Lastly, a study by Professor Enos of M.I.T. revealed that all of seven major inventions in the refining and cracking of petroleum were made by independent inventors, and that the main contributions of the large companies were simply improvements.
I suggest that that fits in neatly with the view that Britain is a country which makes many important technological discoveries of significance and often of revolutionary application, most of which are exploited elsewhere, largely in the United States. I suggest that there are scores of ideas which are generated in Britain at industrial and university laboratories which are not taken up because British manufacturers can see no market for products and which are later exploited elsewhere. This is a very important reason for having this Bill.
What are the obstacles to Government involvement in industry? The first one is the C.B.I.'s criticism that reflects the reaction of certain people in industry who have failed to come to terms with the rôle of the Government in industry which has been accelerated in the last eight years under Governments of both parties.
The right hon. Gentleman admitted that there has been a continuing interest taken by industry in what the Government can offer. This is something which has not just developed in the last three years, because it has been going on intensively for the last eight years,

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although the pattern was instituted in the last war. This is not a doctrinaire point of view. The fact is that a point is reached in the development of an industry where one not only wants participation with the Government but the maintaining of proper standards.
One of the reasons for Government intervention is that, where a company is not able to achieve a certain degree of success, the Government have a responsibility and a rôle to play. This has nothing to do with all the dubious arguments about bad government and corruption. There is a basic Government responsibility to get inside industry and find out—which is the whole idea behind the industrial training boards.
These boards would not have been developed had industry itself been much more aware of its responsibility for the training and education of management. I can recall that, at the British Institute of Management in 1956, I attempted to explain to large numbers of managers the value of this. That is not to say that large and medium-sized companies were not aware of the value of the development of management and of understanding modern techniques. A considerable number of them did so, and there is an even greater number now.
However, we have not made the progress in ten years that we should have. In spite of the influence of our American-based companies, the influence of the business schools and the greater interest in education, and despite the pleas that appear annually from Ministers and Government leaders generally, it required some instrument to step up interest and activities in the training of management. That instrument was the Industrial Training Act.
Therefore, I feel that the Opposition cannot have it both ways. I would hope that the official view of the Opposition is to support——
Sir K. Joseph: It so happens that I am a co-founder and the first chairman of the private enterprise Foundation for Management Education which raised a vast sum from industry to build the business schools, which was then matched by an equivalent sum from the Tory Government. It was a private enterprise initiative, and I am proud to have been one of the two co-founders.
Mr. Moonman: I am always interested to hear the qualifications and experience of right hon. and hon. Members.
I believe that a real push forward in management training and education will be stimulated by the training boards. The efforts of individuals, companies and organisations like the one to which the right hon. Gentleman referred, B.I.M. and the British Productivity Council have gone some way, but they are not sufficient.
One of the great problems in this area is to understand how far one can get across to the small and medium-sized companies. This is the dilemma of people who understand the problems of those companies, and that is not just a feeling and experience that exists on the other side of the House.
A criticism of the Bill is whether the Government structure is sufficiently flexible and distinguishable to give industry the type and quality of advice and help that it needs. This is a vital point. It is a problem which is not directly related to the Bill. It is one which I hope that we shall have an opportunity to debate on another occasion. It is the relationship between Government and industry, and certainly this is not the occasion on which to discuss it. The way in which industrial affairs are structured within the Government would be a much more serious argument for right hon. and hon. Gentlemen to raise.
I am concerned by the reference in Clause 1 to the eight Government Departments at least, which, could be involved. I realise that there may not be sufficient time for the Minister to tell us much more about it when he comes to wind up, but I hope that he will take note of my concern and arrange for some information to be made available before the Bill goes to Committee. We would like to know how and why all these Departments are involved. I recognise that it is a problem of the present structure, and not a criticism of the Bill as such.
I would make a criticism of the Bill in Clause 2, which indicates the criteria upon which assistance will be given. I offer this to the Minister in a constructive spirit. I hope that he will be able to give us more information on the

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phrases which appear in the Clause, saying that assistance will be calculated
"to improve the efficiency of an industry or section of an industry",
"to create, expand or sustain productive capacity in an industry or section of an industry",
and,
"to promote or support technological improvements …"
We must do this a little better. It is very uncertain, though it is true that, if one conducted a word association test about "efficiency", one would come up with a wide range of descriptions.
We can remove some of the criticism and anxiety that surrounds a Bill of this description if we have a much more specific description of what it means. I am not satisfied with it, and I feel that any comment or criticism made on this ground is worthy of consideration.
In conclusion, I ask for a strong Bill. This means that if the Government are to benefit from the involvement of their assistance to industry they should penalise failure. Otherwise we will be in danger of propping up the inefficient firm. American Government contracts to industry contain a Clause which provides for this. I cannot help feeling that on occasions when the financing is of a considerable nature, within the limits set down, I would like something on these lines to make sure that the Government are not always the loser where a project fails.
I hope that my right hon. Friend will accept these comments from a loyal Government supporter in the constructive spirit in which they are offered. Long after the current economic analysis is forgotten and long after the present phrases about corruption and the uncertainties expressed by the Opposition and the C.B.I. are forgotten, I believe that industrialists and employees alike will look to the Act for assistance and guidance. There is an interesting phrase in the Bill which I know appeals to some of my colleagues, about it being "creative". I believe that it is, and I hope that some of the details will be put right so that it can properly flourish.
5.51 p.m.
Mr. Peter Blaker: This Bill has been presented to the House as one essentially to do with technology.
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I have been puzzled how the Government have either been able to get away with this claim; or perhaps they have deluded themselves into thinking that it is a Bill to do with technology. As I read it, and as my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) said, it is simply a Bill for the provision of capital. According to the Bill, that capital can be provided to any sort of industry.
If one looks at Section 2, all that is necessary is that, in the opinion of one of the authorities mentioned, the scheme must be
"… likely to conduce to the benefit of the economy of the United Kingdom,"
and certain considerations are set out by which the authority will be guided. Those considerations include,
"…to create, expand or sustain productive capacity in an industry or section of an industry."
So that the resources of the Bill are available for the hairdressing industry, the candy-floss industry and any other which the authorities may see fit to consider.
As my right hon. Friend implied, instead of being called the Industrial Expansion Bill, it could equally have been entitled the Groundnut Scheme Repetition Bill or it could appropriately have been called the Expiring Industries Resurrection Bill or anything on those lines.
When I am not engaged as a Member of Parliament, I am a farmer. I farm in country which used to be industrial country. It was the centre of the charcoal industry of this country two or three hundred years ago. I have wondered sometimes what would have happened if the pressures now available for retaining expiring industries in existence had been available at the time when the charcoal industry was on its way out. We should have had the Daily Express thundering that we must preserve this industry at all costs because it had saved us at the time of the Spanish Armada by the magnificent guns that it had produced, and so on. Let us imagine that the Government of the day had been dependent on the support of the Charcoal Burners' Union. Hon. Members opposite may think this a bit far-fetched, but suppose some latter-day Savundra comes along to the Government in a few years' time with a project which he claims, backed by apparently the best scientific

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evidence, enables one to use coal for the creation of food. Is it possible that this Government, if still in office at that time, might be swayed a bit by the fact that that was the object of the exercise and not be influenced solely by economic and financial factors?
I differ from the hon. Member for Billericay (Mr. Moonman). The Bill gives powers, as I understand it, to 16 Ministers, not eight or thereabouts, because it mentions "a Secretary of State", and there are a great many Secretaries of State. Those Ministers include the Secretary of State for Foreign Affairs. It is easy to see why he is included, because he promoted the National Plan. Therefore, he is very experienced in these matters. However, it is rather difficult to see why the Secretary of State for Commonwealth Relations should be on the list. About the only members of the Cabinet who are not given these powers are the Prime Minister and the Lord President of the Council, and one can see in those cases why they are left out.
The gentlemen who are given these powers to deal with £150 million of the taxpayers' money are lineal descendants of the groundnuts experts. I believe that it is wrong to give any Government the powers contained in this Bill, but it is quite crazy to give them to a Government who have shown by their mismanagment of the economy in the last three years that economically, financially and industrially they are no more than pigmies.
The Minister relied on the argument that it will not, after all, be the Government who will be taking decisions unaided on investment proposals submitted to them, but they will be assisted by an advisory committee. There is also the argument that the decisions must be taken in the national interest. Although the Minister claimed that the advisory committee and businessmen will have power to take decisions, it seems clear that the major decisions will be taken by the Government.
This brings us to the question: what is the significance of the words "in the national interest"? As soon as one imports the factor of the national interest, the field is wide open, because what is in the national interest, as we all know, is very much a subjective decision and tends to vary for political reasons.
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Let us consider the case of the aluminium smelter project which the Government have proposed. Here the Government have created a situation by their own ineptitude in which, whatever they do, and they have to do something, they must be wrong. Who will decide, and on what grounds, what should be done about this problem? Who will decide what weight to give to the fact that we could buy cheaper aluminium overseas than we could make in this country, unless there is a subsidy borne and paid for by the taxpayer or the consumer? Who will decide whether it is in the national interest to buy from overseas or for that subsidy to be paid? Who will decide what weight to attach to the worsening of our relations with Norway which would result if we went ahead with this scheme? These questions will be decided very largely on party political grounds. Therefore, to say, as the Bill does, that the national interest will be taken into account is quite useless when we are considering whether the taxpayers' interests are to be safeguarded, whether the consumers' interests are to be safeguarded, or whether any other interests are to be safeguarded. It all depends what interests the Government of the day consider are more important than others.
The Minister introduced an argument which I can only suspect he was using humourously. If he was not, it is very alarming. He would have to be dimmer than I think he is. That was an argument that, because we on this side of the House are in favour of selectivity in relation to social services, we must logically be in favour of the selectivity which is allowed to the Government by this Bill. I am objecting particularly to this element of selectivity, because the Bill gives the Government the decision to say, "You, such and such a company, will live, and you, such and such a company, will die".
Mr. Barnett: Rubbish.
Mr. Blaker: The hon. Gentleman says "Rubbish". He has not read the Bill or if he has he cannot understand it.
Mr. Barnett: The hon. Gentleman and his hon. Friends have been arguing that we would do well to leave industry alone, and not give it any money. He is saying that once the Government decide not to

1615
give money it will die. All I am saying is that that is rubbish.
Mr. Blaker: The hon. Gentleman has confirmed that he has not been following what has been going on. That is not what we have been saying.
Let me follow the Minister's argument about selectivity. Is he, in relation to the social services, saying that the Government should have the right to say to Mr. Jones, "You will not receive family allowances because you are not in the national interest", and to Mr. Green, "You will get them because you are in the national interest"? Hon. Gentlemen opposite seem to be expressing disbelief. This is even more horrifying, because it shows that they are not exercising their imaginations, if, of course, they have them. That is the power which the Bill will give the Government in relation to industry, and we say that if that power is given to the Government we are on a very slippery slope.
Mr. R. F. H. Dobson: Would not the hon. Gentleman agree that the Government already have these powers? My right hon. Friend spelled them out to him. The science and technology Act makes available to the Government the same sort of choice to which the hon. Gentleman is objecting now.
Mr. Blaker: I do not think the hon. Gentleman can mean that the Government already have these powers. If they have, why have they introduced the Bill? We are saying that all arbitrary discretionary powers given to a Government should be given with the greatest reserve. The Government have not demonstrated that it is necessary to give these enormous powers to any Government, let alone this one.
Mr. Dobson Mr. Dobson rose——
Mr. Blaker: I have given way enough.
That brings me to my second main objection to the Bill, namely, that it is an enabling Measure. It will allow the Government to take action by Orders in Council, which will mean that we will have only a few minutes of debate and no possibility of amendment in respect
1616
of vast schemes which will discriminate between one industry and another, and between one firm and another.
The Government say that there are a number of reasons why they should operate in this way, but I find them unconvincing. They say that private capital is not available to finance enough of the right schemes. Have they seriously considered improving the private capital market? Have they seriously considered encouraging savings? Only in this morning's papers we read of the deplorable decline in private savings. They have not given us any indication that they have considered those things.
It is said that there will be a saving of Parliamentary time. The Lord President of the Council has recently introduced measures to reform our procedure. We were told that these would enable us to devote more time to important matters instead of spending day after day discussing the Finance Bill on the Floor of the House. We on this side of the House are prepared to devote time to matters of this importance even if they are presented to us in the form of Bills, as opposed to Statutory Instruments.
The Government say that the Bill will enable action to be taken promptly. I do not believe it is necessarily right that action should be taken promptly. There is a lot to be said for the proposition that if action of this kind is to be taken, it should be taken slowly, and it should be made difficult to take. Because of this procedure, it will be easy for the Government to make enormous mistakes.
Let us consider who will be the applicants. There will no doubt be many deserving firms which will come forward and ask for help, but there will be many who will be less deserving, but will still ask for help because they will have failed to get money from the private market, or even if they could have got it from there they may hope that by presenting their case in a certain way they will get the benefit of cheap money from the Government.
I cannot understand how the Government reconcile what appear to me to be two inconsistent arguments. I fail to see how they reconcile the statement that there will not be competition with private sources of money—which seems to mean that before the applicant goes to the

1617
relevant board he will have gone round the private market—with the claim that action will be prompt.
I shall vote against the Bill because
believe that the enabling powers in it are unnecessary. I believe that it will lead to the wrong projects being adopted, and, most important of all, that it will extend the area of arbitrary Government.
6.6 p.m.
Mr. Lewis Carter-Jones: The debate so far has been extremely interesting, because hon. Members have taken a stand on the point of view on which they decided before they rose to speak.
Hon. Gentlemen opposite seem to be concerned about defending the individual. I should like, in a paradoxical way, to argue that the Bill will defend the individual firm. If the House will bear
with me, I shall develop my theme in as short a time as possible, provided that there are not too many interruptions.
No one has objected to the idea of research and development being carried out by the Government. Government money is provided for this, and in his professional capacity as a farmer the hon. Member for Blackpool, South (Mr. Blaker) is prepared to accept Government money. He does so for a very good reason. I support the idea of subsidising farmers. We have decided in the national interest to subsidise a particular industry. The hon. Gentleman did not object at any time.
Mr. Blaker: My point is that the powers in the Bill will enable the Government to favour one farmer as against me, and I object to that.
Mr. Carter-Jones: The hon. Gentleman is obviously not aware of the selectivity which takes place in respect of hill farmers in Wales. There is selectivity there, and it is a good thing, too.
Everyone talks about the weather, but nobody does anything about it, primarily because there is nothing we can do. Everybody talks about us being behind in technology, but when a proposal is put forward to advance it, hon. Gentlemen opposite object. I see one hon. Gentleman opposite disagreeing with me. I look forward to hearing his speech.
Mr. Rankin: God help us
Sir Cyril Osborne: The hon. Gentleman needs it.
Mr. Rankin: It is just a prayer.
Mr. Carter-Jones: This is a voluntary Measure. No one has to come along to obtain money. There is no compulsion about it, and we ought to start the argument from there.
The second feature about the Bill is that it is flexible. Help can be given in a variety of ways to suit the individual's needs. Hon. Gentlemen opposite want us to be selective. The help can be given in a selective way to suit the needs of a particular industry.
Who will get the rewards? To my mind this is the key to the Bill. Paradoxically, this Measure will protect the small man, and the medium-sized firm. I shall develop this theme in a moment. Perhaps I might paraphrase Shaw's well-known expression and apply it to industry and technology: Those who can, do. Those who cannot, become financial advisers—[Interruption.] We have helped the hon. Gentleman sometimes in the past, but he may feel that he has not done justice to his teachers.
This quotation applies in industrial technology, which is why the Bill will protect the small and medium firms. In my professional career I have met skilful and inventive people and no one objects to helping research and development. The objections are to the logical development of assistance to production. Hon. Members opposite say that we should go to the market place, but one meets some crafty people there, and an idea worth developing in the national interest becomes a plum to be plucked by some financial wizard, possibly from America —but it is the initiative and skill of an ordinary human being which is being pinched.
The Government will not pinch his idea, because the scheme is voluntary and he will not be compelled to come forward. This could create the choice which hon. Gentlemen opposite want. People could decide whether to go to the market place or to the Government for money for development. Do hon. Members object to choice now? If a firm felt that, as a logical development of R. and D. on a worthwhile project, that they should go to the market place for money to put it

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into production, that would be in everyone's interest. I strongly support the Bill.
6.13 p.m.
Mr. John H. Osborn: Hitherto, in debates on this subject, I have tried not to make political points but to concentrate on the agreement between the parties, but the Minister tonight made little reference to the political background to this Measure. Not only does industry now appear to be involved in politics but its future is subject to political design and interference, and the Bill is no exception. We must accept that the industrialist and the businessman come from a background in which the trader should not take sides during wars, or support one political party against another.
In spite of the observations of the C.B.I., the majority of management in industry accept the Bill as one more Measure in the process of legislation during the last three years which may not be desirable but to which they must adjust. This is one of a number of Measures forced through Parliament to provide our present political masters with more and more domination over our industrial society, regardless of whether it increases the wealth which will be to the benefit of the people. These Measures are leading to massive stagnation.
The Minister spoke lightly of Government intervention, but hon. Members opposite will remember their debates in the early 1960s on Clause Four. In March, 1961, they reached conclusions on the ownership by the State of production, distribution and exchange. The Prime Minister wrote in the New Statesman at the time:
"Labour's social and economic objectives can be achieved only through an expansion of common ownership substantial enough to give the community power over the commanding heights of the economy."
That is a phrase well known to hon. Members opposite.
"The unresolved question is, what are the commanding heights? In the context of the Plan, the commanding heights which should come into public ownership will clearly be those industries, or undertakings, which require to be publicly owned if the Plan is to be fulfilled."
The Prime Minister and the present Secretary of State for Economic Affairs, who
1620
was then a director of the Labour Party research department, wrote:
"We must consider what may well be the most important contribution which public ownership can make to the nations economic revival. We have already called attention to the menacing growth of private monopoly and the consequent concentration of economic power into irresponsible hands."
Perhaps the right hon. Gentleman will elaborate on those ideas and how they are being put into practice. He has gained some practical experience of office since then.
It is a fact that a large industrial group has immense powers, and in these cases we must have adequate monopoly legislation, which in fact has come about, but other legislation has accelerated this process, including the Restrictive Trade Practices Act. Our concern tomorrow should not be the power of private groups but the control of the powers of the public sector. The Conservative Government tried to lay down guidelines and to interfere with industry to the absolute minimum.
The latest dictum of recent years is that in "Signposts for the Sixties", which said:
"To achieve these different purposes, the forms of public ownership will, of course, vary widely."
We have seen plenty of this in the last few years.
"Already we can see it developing in various forms—nationalisation of a whole industry or firm, State participation in industrial companies on a partnership basis, the establishment of State-owned undertakings …"
The Bill is one more manifestation of political doctrines hammered out by the Socialists in the early 1960s and in that document. We cannot ignore the fact that the implementation of these doctrines has stifled industry and is one reason for devaluation and the cuts which face the nation today.
January was not only a month for unnecessary cuts. In January, the Government committed themselves to more expenditure, much of it in the pursuit of political dogmas, than they cut out, even at the expense of their sacred cows. On the day of the announcement, we considered the £70 million Transport Holding Bill and the next day saw the publication of the Industrial Expansion Bill, which will cost £200 million. This week Supplementary Estimates have amounted

1621
to £357 million. My hon Friend the Member for Twickenham (Mr. Gresham Cooke) said of the Estimates:
"Government expenditure is completely out of control. We are saddled with the most extravagant Government we have ever had. The electorate are beginning to realise this."—[OFFICIAL REPORT, 30th January, 1968; Vol. 757, c. 1099.]
Little did he know that, in the newspapers today, we would see the verdict of the National Opinion Polls—an 18 per cent. Conservative majority. Thus, we are debating this important subject against a background of extreme political and economic uncertainty.
The Second issue which concerns me is the Bill's scientific and industrial background. It is essentially a financial Measure, giving the Government powers to invest in industry, for example by buying shares, but its real purpose has been wrapped up in this package of science and technology. On 26th April, 1960, nearly eight years ago, I moved that Mr. Speaker should leave the Chair so that the House could consider a Motion to the effect
"That this House, aware of the need to encourage well-directed Government investment in industry, welcomes Government support for scientific and technological research."
Hon. Members opposite, supporting the Government, welcomed that then and they we-come it now, but in the Second Reading debate on the Industrial Reorganisation Corporation Bill, I reminded hon. Members:
"In the last few years the Socialist Party has turned completely head over heels in its attitude towards the desirability of rationalisations and mergers."—[OFFICIAL REPORT, 19th October, 1966; Vol. 734, c. 271.]
We accept that rationalisation is desirable and we accept these amalgamations, but we are bringing into being yet another agency, and a Government agency, with even greater powers than the I.R.C.
This brings me to the parallel between the, Industrial Reorganisation Corporation and the proposals of the Bill. I asked hon. Members on the Front Bench a number of questions about how much money was being spent and on what projects. We have had reports on the telecommunications industry and its relationship with the Post Office and we have had reports, with very little information, about aluminium smelting. We have been advised that the I.R.C. has
1622
committed £18·8 million: nearly £3·2 million to Rootes—as we have already debated that, why was this necessary? —another £15 million for the merger between English Electric and Elliott Automation—we may wonder why the money came from the I.R.C. and not the normal organisations—and the rest to the amalgamation between E.M.I., Elliott Automation and Nuclear Enterprises. This is where the money has gone. Is this worth-whole activity? What is the relationship of this activity to the Bill?
The breakdown is referred to in an article by Michael Shanks in The Times on Monday. Referring to the Bill, he said:
"My own view all along has been that the Bill will prove in fact to be a comparatively minor affair, capable of doing a number of useful as well as some silly things, but that it would certainly not transform the economy …"
But the I.R.C. has changed. I do not believe that the Minister of Technology commented on the fact that we changed the managing director, whom we pay £20,000. We lost a very good man in Mr. Ronald Grierson, who wrote of this type of Bill in the Spectator of 10th November:
"The idea of a statutory instrument to enable government to meddle in the affairs of individual companies has always had a fairly strong appeal to left-wing theorists. However, the main impulse behind the new measure probably comes from another and more recently conceived economic doctrine: that the way out of industrial stagnation is not by general reflation but by selective intervention in support of specific industries and chosen companies.… It is here that the question of how to use the taxpayer's money arises. The state could take the view, as in the United States, that provision of public funds for selected industries (computers, aircraft, etc.) is a justified charge to the public purse …"
Today's debate is about the very issues which Mr. Grierson raised so ably in this respect.
We must consider, particularly this week, the problems which the take-over boom is introducing. It is interesting to note, that, writing in the Financial Times recently, Mr. Christopher Tugendhat said:
"The Government's active participation in the consolidation of industry into large units is bound to create problems. It is likely to be most acute in those cases where there is only one British company involved in a particular industry."

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Later he Wrote:
"In the circumstances, the Government will take on a position almost akin to that of a large shareholder, even when it does not have any equity, simply by virtue of its ability to alter the level of tariffs."
Many issues are raised by these important matters, and the third aspect I will concentrate on, is that of the principles involved. We are now trying to discuss, in the House and elsewhere, the relationship between the Government and industry—a relationship which is bound to become more and more important. This very subject has been a theme which has received my active consideration for many years, even before I came to the House. Assuming that a Conservative Government will shortly be in power—indeed, one need not assume that; it is inevitable—one must consider what will happen if that Government wishes to decentralise and devolve control. Conservatives have supported the concept of planning. After all, if planning is essential within a single company, it is essential within industry generally.
Three or four years ago my hon. Friends and I supported the idea of setting up an agency, in which Government Departments would be represented, to examine the capacity requirements of an industry and to ensure that, when new capacity was required, it could be developed. We thus supported the concept of the little "Neddys". After the last debate, it was pointed out to me that a number of those engaged in the work of the little "Neddys" regretted that they might be wasting their time. I hope that now their time is not being wasted and that it is proving more productive.
If a project is worth while—whether it is rationalisation within existing industries or the creation of new ones—it is desirable that it should be financed by the market; by the traditional institutions and particularly by international money. The nationalisation of the steel industry has, I am convinced, deprived that industry of vital international money at a time when we must cut import expenditure. The E.E.C. and E.C.S.C. have always been able to draw on international money for rationalisation purposes.
Under the type of legislation being introduced by the present Labour Gov-
1624
ernment, we are obliged to use Government money, which is national money, obtained from the taxpayer.
One of our greatest tragedies is that money available from industry for investment has been curtailed; the amount of industrial money going into investment has been halved in recent years. If risk, courage, ingenuity and energy by industry were better rewarded, we would have greater production and more development and research. If industrial money of this type were easier to come by, industry would spend more of its own money on this type of investment. We have reached the point when British industry is being deprived of the wherewithal to finance new ventures and to take advantage of some of the opportunities which are available in the world.
I have met many people who are faced with solving this problem and I have been associated with the problem myself. The trouble is that we are in an industrial and economic environment in which industry must come cap in one hand and begging bowl in the other. This is why the present element of stagnation exists and why there will not be as much hostility to the concept of Government money as there otherwise might be. The honey pot, as Mr. Grierson said, is bound to attract people if money is available. The Government must provide the climate and environment in which industry can create its own opportunities with its own money.
Certainly the Government can help to create these opportunities, but we object to the wide executive powers which the Government are taking—spending powers which are not subject to the scrutiny of the market, spending powers which are directed by civil servants—excellent, able people, but in many cases without the sort of industrial experience that is necessary—spending powers that may result in taxpayers' money being used to help too many lame ducks and spending powers which, while being subject to Parliamentary control, are too great because we in Parliament do not have the mechanism to provide that scrutiny which is so essential.
It would be interesting, as the fifth point I was to raise, to know how the Bill was conceived. Hon. Gentlemen opposite have spoken, particularly when

1625
we have been debating steel and the about the I.R.I.—the Istituto Per La Ricostruzione Industriale—perhaps the most well written about industrial organisation in Europe. The history of as, no doubt, appealed to hon. Gentlemen opposite as a basis for State intervention in industry at this time.
I recently took part in a visit to Italy and, on that occasion, I visited the I.R.I. have a copy of I.R.I.'s Annual Report with me and I gather, from the documents I see in the hands of hon. Gentlemen opposite, that some of them also have this Report. I suggest that the I.R.I. has been the originator of this Bill. It should be remembered, however, that I.R.I. grew out of a Fascist régime and out of debilitation after the last war. Its articles allow for an endowment fund, and this provides 12 per cent. of its investment. By this machinery, there is control by the Government, yet industrial activity is subject to normal criteria which industry has to meet. Indeed, only 12 per cent. of its money comes from its endowment fund. When I was in Italy and saw I.R.I. I noticed an article in the Economist of 7th October, 1967, which stated:
"The formula has found its admirers abroad, not least among left-wing British M.Ps., pressing the Government to intervene in private industry through the creation of a State holding company".
That article was not welcomed by the heads of I.R.I., as it pointed out:
"By British standards, I.R.I. is bafflingly secretive about its targets and its real performance is bafflingly obscure".
I suggest that I.R.I. is not a model which justifies this Bill but that it is, in fact, a model of what might be done in an effort to provide a solution to the tangle which is growing among our already nationalised industries.
In another place yesterday Lord Beeching called for an end to nationalised industries being used as political shuttlecocks between the Conservative and Labour Parties. He complained that the nationalised industries would be lucky if they did not find themselves unable to discharge all their responsibilities within the resulting straitjacket.
The problem of aluminium smelting has been greatly discussed. It should be, because this is the first example of Government intervention, and I agree that it
1626
is desirable in this case. However, today it is being handled by I.R.C. Tomorrow, there may be powers in this Measure by which it will be handled. I was suspicious when the Prime Minister had to provide a gimmick at the last Scarborough conference to keep the delegates optimistic about the future. The right hon. Gentleman said:
"But let me tell you this morning of a proposal for the establishment of new science-based industries in development areas".
I call that his Scarborough No. 2 speech. In October I wondered to what extent the Prime Minister in particular and Socialism in general were jumping on the scientific bandwagon. I wondered if that was being done merely to placate a large number of discontented rebels at the annual party conference. To what extent was the Prime Minister jumping the gun and assuming that cheap electricity was here before it had actually arrived? After all, the fast breeder reactor is 10 or 15 years off. Do we yet know at what price it will generate electricity?
On the other hand, bearing in mind that cheaper energy and fuel prices will be with us, the Government cannot be condemned for planning how to introduce energy consuming industries, to meet the time when cheaper energy is available. Certainly the Government have a rôle to play, but in my view it is a question of how little, rather than how big, that rôle can be. On October 4th there was an enormous Press release—put out by the Ministry, no doubt; it was also in the OFFICIAL REPORT in answer to a Written Question I tabled this week—appeared on this subject. I will not read it, although in it the right hon. Gentleman referred to the financing of electricity generation. There was considerable comment in the national Press about the difficulties involved and the fact that not only the Minister of Technology, but the Minister of Power and also the President of the Board of Trade would be faced with making the final decision. There has been the undignified scuffle between the Chairmen of the Steel Corporation and the National Coal Board about the price of coal for industry.
During the debate on the Coal Industry Bill, the sum of £45 million was mentioned for subsidising sales to the Gas Council and the Central Electricity

1627
Generating Board. When we discussed the Supplementary Estimates early yesterday morning this matter was also raised, during debates on the Second Reading of the Consolidated Fund Bill. In the latter debate I summarised a number of Parliamentary Questions which I had tabled to the Minister of Power and the Answers I have received.
I pointed out certain outstanding facts which had to be borne in mind. For example, the cost of electricity generation in Norway, Canada and Switzerland is 0·25d. per unit. Press reports a month ago indicated that the cost of 0·37d. per unit might be acceptable to the Rio Tinto Zinc Company. The cost of electricity to area boards is 1·28d. per unit and the average cost to consumers—I am referring to the final cost—is 1·78d. per unit. In other words, the cost is six to eight times what it will be to existing aluminium smelting units. How can this vast differential be bridged by the Government without subsidisation?
My hon. Friend the Member for Louth (Sir C. Osborne) was quick off the mark in raising this matter. He asked a Question about subsidies on 14th November and received an assurance from the Prime Minister that there would be no subvention or increased cost of electricity to other users. Our European friends, as well as our friends in E.F.T.A., will want to know how this differential is to be bridged.
Without elaborating on this Government saga of interventionism, I must point out that if an aluminium smelting industry, which is commercially viable, can be established in this country and can give an adequate return on capital—and can create employment, save on our balance of payments and, even allowing for a transitional phase, can be viable—then it is to be welcomed. My inquiries indicate that the Rio Tinto Zinc Company, with its wide international experience, was willing to finance its own project with international money and buy its own power station. However, the whole basis of our nationalisation legislation would make that impossible. On what basis was the Rio Tinto Zinc Company not allowed to establish its own nuclear power station, while, according to Press reports, Alcan is apparently
1628
being allowed to set up its own coal-fired power station?
Why was the I.R.C. invited to join the act? Why should the Government act as assessor and start a Dutch auction? Will they offer to provide money for what might turn out to be a viable project, irrespective of Government intervention? If not, and if it will not be a viable project, will money be committed for this purpose from this Bill?
The ramifications of the first case of Government intervention into a science-based activity are an ill omen for the future. Why should the C.E.G.B. have a monopoly of power generation and why cannot it hire its transmission facilities? If an existing industry can obtain preferential terms for electricity on realistic industrial tariff rates, why should not this be made available to other industries? This is an example of the sort of selectivity about which my hon. Friends and I have been speaking.
In Yorkshire, where I live, we have a new coal-fired thermal power station alongside cheap coal. This is not a development area, although there is rising unemployment. Recently I have read a report issued by the Sheffield Shipbuilding and Engineering Federation—it was providing evidence for the Hunt Report on grey areas—stating that no major industry had been brought into South Yorkshire in recent years. In this area we have a conventional power station, but, according to an Answer which I received recently from the Minister of Power, it is possible to generate electricity at the same price as a nuclear power station.
These are the ramifications and these are the problems into which the Government have moved. In cases of this type how should the Government intervene? How would a Conservative Government intervene? Major new industries involve Board of Trade industrial certificates, town and country planning and provisions about housing and labour, all of which are the responsibility of Government. Unfortunately, the Prime Minister at Scarborough made a political issue out of a decision which could have been dealt with with the minimum of publicity rather than the maximum.
If the Industrial Expansion Bill provides opportunities for unnecessary meddling by Government, it should be rejected outright. If it becomes law a

1629
future Conservative Government should repeal it forthwith. I welcome the statement which was made by my right hon. Friend the Shadow Minister.
6.40 p.m.
Mr. Stanley Orme: I will not follow the hon. Member for Sheffield, Hallam (Mr. J. H. Osborn) for I did so we would have a long way to go. I wish, however, to take the central theme which he and other hon. Members have mentioned about the Bill relating to Government intervention and the whole position of Government and industry.
One wonders what all the fuss is over this Bill. I understand that the Opposition have virtually made this a censure debate, but there does not seem to be much censure about it. I noticed that when the right hon. Member for Leeds, North-East (Sir K. Joseph) opened for the Opposition he made general criticisms of the Bill, but specific items which he could have criticised he left entirely alone. Reference has been made to the C.B.I. I understand that the C.B.I. has known the contents of the Bill for a considerable time. We saw the build-up of opposition before the Recess when hon. Members opposite were asking when this Bill was to come forward and saying that they honed it would be dropped because it contained nationalisation. I should like to know what changes have taken place between the time when the Bill got off the stocks and its arrival for Second Reading today.
This is a comparatively small Measure, but it has some very important aspects. I speak as one who is unashamedly an interventionist in industry. I believe that we can obtain many of our objectives only through direct intervention by the Government. The Opposition wants to have it both ways. Hon. Members opposite want money for some projects, a interventions they made during the speech of the Minister showed, but when equity shares or control by the Government in relation to them are mentioned, up go their arms in horror.
The right hon. Member for Leeds, North-East said that the proposal for share buying was made in order to placate the Left wing of the Labour Party. Those of us who know the party a little better
1630
know that if the late Mr. Hugh Gaitskell were here he would not take that view. When the debate took place in the party about industry and society many of my hon. Friends advocated direct public ownership and control.
Coming to one or two aspects of the Bill which the right hon. Member for Leeds, North-East deliberately avoided, Clause 8 refers to the loan to the Cunard Steamship Company. The right hon. Member said that he would deal with that in Committee but it concerns £25 million of public money at a rate of interest of 4½ per cent. Taking into account repayment and the cost of money today, what form of direct Government subsidy is involved here? There is a very serious point here which is not merely concerned with getting back the money. It could be invested at a much higher rate than 4½ per cent. We should have some information about that.
Then there is the Beagle project. The right hon. Gentleman said that that can be dealt with in Committee, but it is a specific item which he could have discussed when debating the Bill on Second Reading. Is there any opportunity given in the Bill for hon. Members such as myself to ensure some of the direct intervention we want to see? When I interrupted my right hon. Friend the Minister, he suggested that the debate on this Bill was not a suitable occasion to discuss that.
The kernel of the Bill is in Clause 2, which refers to the contents of schemes. This is the crux of the Bill. There is a word there which makes it easy for me to support the Bill. It is in paragraph (b) which says:
"to create, expand or sustain productive capacity in an industry or section of an industry …".
The use of the word "create" means that we can create separate publicly-owned industries under the Bill. I am absolutely astounded that the right hon. Member for Leeds, North-East did not say anything about this. I am doing the job for him.
In British industry at the moment it is not enough to subsidise industry, nor is it sufficient to provide money which, as has been said, is sometimes for lame ducks and sometimes for very lively ducks. If we are to achieve some of the things we need it is essential to create

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publicly-owned science-based industries, as the Prime Minister said in his science speech at Scarborough in 1963. I am glad that my hon. Friend the Secretary of State for Economic Affairs is on the Front Bench because I am sure he is familiar with the quotation I am about to make. The Prime Minister said:
"What we now need to do and what we are committed to doing is, first, carefully to expand the scope of this research development and, secondly, to ensure that where new industries are established on the basis of State sponsored research the State will control the industries which result."
That was a very explicit statement. I could quote a further paragraph expanding that point. Why do I say it is important for us to create these industries? First, they need to be created within development areas. We need to create them for import substitution. I shall give instances of where I think such industries could be of great benefit. There has been reference to the Sainsbury Report on the drug industry. I should like to see the manufacturing of certain drugs taken over by the State.
The machine tool industry, which has been in private hands for a considerable time, is a very uneven industry in development. Some sections of it are proceeding with modernisation, and sophisticated machine tools are being produced. I come from an area where this industry is still very retarded. I do not understand why we should not create a public machine tool industry. This would not be nationalising the present industry, but creating a new science-based industry. The aircraft industry, shipbuilding and industrialised building consortia are other obvious examples.
As to the acquisition of shares or of equity, great pains have been taken to convince people that the Bill contains no element of compulsion. The White Paper twice says that the legislation:
"will not confer any compulsory powers …".
The only way in which the Government will get any shares is when shares come and give themselves up, if the Government are not to acquire any through the market. I believe that this is a deliberate sop to industry, designed to remove any fear that industrialists will be subjected to the test of efficiency.
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On the question of private investment in industry, paragraph 23 of the Trades Union Congress Economic Review 1968a most important critique of our economic situation—states:
"Government assistance to private industry is running at around £2 million a day."
We can see no return for much of this investment. The T.U.C. goes on to make this very important point:
"A large part of this derives from 'blanket' payments related primarily to the industry or the geographical location of the firm, without reference to its efficiency, future plans, industrial relations structure, or to the needs of growth in a particular industry or section."
It is fantastic that the Government introduce a Bill such as this without writing into it provisions to safeguard public money. An obvious example is that the Bill should contain a code of conduct which would operate in any industry in which the Government invest money. Amendments along these lines will be very germane in Committee. The recognition of trade unions and of trade union procedure should be made prerequisites to the receipt of any Government investment. Any firms receiving Government money should be obliged to use the consultative machinery.
The United States Government, in their procurement of products for the space programme or for any other purpose, ensure that firms have the right type of machinery and machine tools and have the proper standard of efficiency. The Government should have the right of access to accounts. Firms should be made accountable. The Government should be able to assess from the accounts the unit costs and the manner in which production is carried out. One condition should be that the proper percentage of disabled is employed.
We are talking about the hardware of modern industry—about technical research and development, production, new techniques and technology. We shall not get that hardware unless those who work within industry are socially accepted. We continually hear criticism of restrictive practices and about people retarding production. British workers will never be coerced. They can be persuaded to accept many things as long as it is done on a fair and equitable basis. The problems which arise on the docks, in the engineering industry, or in transport, to take merely three examples, arise, in the main,

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from defects in the social technology of industry. The value of all the hardware —technology, investment and machinery —will he destroyed if it is not accompanied by the advancement of the workers within the industry and by the acceptance of progress.
Sir C. Osborne: On both sides.
Mr. Orme: I accept that. Perhaps the greatest weakness in British industry is, in many cases, not top management, r or the workers. In many cases the greatest weakness is middle and lower management. Something must be done about this. The ratio of productive workers to non-productive workers is far greater in Britain than it is in America and many other countries.
I believe that these points are important. The problem in industry and in the national economy at the moment, in the solution of which the Bill has a part to play. is only the tip of the iceberg. "The commanding heights of the economy" is a phrase which many of us on this side understand. We on this side have strong views on how industry should develop. I believe that it can develop only by more Government intervention. by public control, and by the introduction of new methods and techniques.
The Bill can play a part in reaching that goal. Despite the basic criticisms I have made, I believe that the Bill can be used to secure an extension of some of the desirable objects I have mentioned. I hope that this is only the first of many measures we shall discuss relating to the national economy and industry.
6.58 p.m.
Sir Harry Legge-Bourke: The hon. Member for Salford, West (Mr. Orme) has expressed the hope that this will be the first of a series of Bills. After the I.R.C. Bill it is certainly the second. I greatly regret that either of these Bills was put before us. The hon. Gentleman was on a very strong point when he started talking about the machine-tool industry. The Minister of Technology was given the sponsorship of four very important industries, of which the machine-tool industry was one. Before more powers are given to the Minister of Technology, it might well be worth everybody's while to check up to see what wonderful achievements have come about
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in the industries of which the Minister has been given sponsorship.
The story in the machine-tool industry is a sorry one. I know that £2 million has been made available for research, but Professor Blackett, President of the Royal Society, said at the Parliamentary and Scientific Committee's lunch last year that it does not by any means automatically follow that, if a lot of money is spent on research, better productivity or even a better turnover will result. We must be very careful, therefore, before we give any more Ministers any more power to start interfering in industry.
In that context, I turn to the very first Clause of the Bill. The Ministers brought in are the Minister of Technology, a Secretary of State—any Secretary of State —the Board of Trade—not the President of the Board of Trade—the Minister of Public Building and Works, the Minister of Transport, the Minister of Power, the Minister of Agriculture, Fisheries and Food and the Minister of Health. As I say, "a Secretary of State" includes any of the Secretaries of State. Adding them up from the latest published list of the Government. I find the total is 14, if we include the Foreign Secretary, and he is a Secretary of State as much as any of the others. I suppose that we shall have the Foreign Secretary suddenly imagining that he has got back to his National Plan and starting bridge building, perhaps, with some nations hitherto not over-keen to associate with us too closely. I do not know. But I cannot help being reminded of the old limerick, which I may have recited in the House many years ago —
"There was an old person of Lyme
Who married three wives at a time.
When they said, 'Why the third?',
He said, 'One's absurd,
And bigamy, Sir, is a crime'."
If that was bigamy, I do not know what this Bill is. It is technological concubinage which will outdo anything that Abdul the-Bulbul-Amir ever thought of. We are getting to a stage now when no one will quite know which Minister is next to spend more of the taxpayers' money without having to make clear that he has permission from Parliament to start the exercise.
The Minister of Technology made a lot of play with the idea that the Bill brings

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Parliament into these matters more than ever before. It does no such thing. We all know what will happen. Every possible pressure will be brought to bear to get some section of industry, whatever it is, which the Minister of Technology or any other Department picks on to have the whole thing buttoned up. It will then be presented to us as a fait accompli. Parliament will have the sorry business of having to deal with an Order which we cannot amend. It will be either all or nothing, and a Government with a majority can always force these things through without Parliament having any right to amend at all.
It is a highly specious argument which the right hon. Gentleman deployed today, suggesting that Parliament is being given more power. In fact, Parliament will be compelled to vote more of the taxpayers' money for these purposes, and it will have less say than ever in how it should be spent.
As has been said, there is a deep issue of party political philosophy wrapped up in all this. Hon. Members opposite have always been extremely suspicious of profit making. It is in the tradition of Socialists to be suspicious of those who make profits. Yet, at the same time, they always urge that more money should be spent by the State for the general benefit, especially for the less fortunate. An egalitarian argument comes in sooner or later. They are concerned to spread the wealth of the nation over as many people as possible.
Where on earth will the wealth come from unless it is possible for industry to make profits? The surest way to help the greatest majority of people lies in having industry really profitable. The higher one taxes industries and the higher one taxes the individual, the less there will be in the profit eventually left, and the less encouragement ——
Mr. Speaker: Order. Second Reading debates are wide, but we cannot discuss taxes on this Bill.
Sir H. Legge-Bourke: Mr. Speaker, with the greatest respect, we on this side feel very deeply about the Bill because we know that it will give more power to the State to tax the people. That will be the consequence of it. If the State takes upon itself—this is what the Bill
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involves—the right to take away from one section of the community and pump into another what the industries themselves have earned by their sweat and labour, and probably have a better idea how to spend, it gradually whittles away democracy, as I understand it. If I may say so, we had this argument in the debate on the Industrial Reorganisation Corporation Bill. The same thing applied there.
I said at that time that I felt that those who were accepting jobs of that kind, to be managing director or chairman of the I.R.C. and so on were either pathetically naive or, perhaps, wanted to help the Socialist cause. I find it very hard to believe that Mr. Grierson would have agreed with what the right hon. Gentleman said today. Mr. Grierson has gone. It is astonishing that, on the day after the news that the new chairman of the I.R.C. has been appointed, there was no mention of it by the Minister of Technology in his speech opening the debate. I suppose that the Government want to keep that fox in the bag right to the end so that they can let it out, as the Secretary of State for Economic Affairs may choose to do, when he replies later tonight.
When the present Chairman of the I.R.C., Sir Frank Kearton, spoke in London on 6th November, 1966, to an American audience incidentally—it was the first time he had said it, so it was singularly inappropriate—he observed that
"The Socialists seem to have a better appreciation of business matters than the previous Government".
I wonder whether he still says that today. After devaluation and the Government's utter unpreparedness for it, does he still think that this Government are better for business than their predecessor?
While he was still managing director of the I.R.C., but writing in his private capacity, Mr. Grierson, in a letter to The Times of 1st April 1967, said that his job
"Reduced to basic terms means eliminating obstacles now impeding such developments"
that is, changes in the industrial structure
"which would promote competitiveness and profitability".
Then he went on:
"Although first indications are promising, it is too early to say how far this exercise can be successful. However, even at this early

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stage, I believe it relevant to state—and I write entirely personally and not in my official capacity—that by far the biggest obstacle to the dynamic development of industry lies in the absurdly disincentive effect of present taxation levels on earned income."
Mr. Speaker: Order. The hon. Gentleman is a Chairman. He must note what the Chair is saying. We cannot discuss the disincentive effect of taxation on the Second Reading of this Bill.
Sir H Legge-Bourke: If that be so, Sir, if we cannot discuss the views of an officer of one of the bodies vitally affected by the Bill, I do not understand the rights of an hon. Member.
Mr. Speaker: Order. As I have already pointed out, the hon. Gentleman is a Chairman. Discussion of the views of the Chairman of the I.R.C. on this Bill and on the interference of Government in industry is legitimate. But discussion on taxation will have to come in the Budget debates.
Sir H. Legge-Bourke: If that be so. Sir, I must abide by your Ruling. But I should have thought that anyone who succeeded Mr. Grierson—and an old friend of mine has just been appointed—should now recognise what the task confronting him is. It is not quite the task, I think, which Mr. Grierson thought he would have when he first took over as managing director of the I.R.C. at the beginning. Mr. Grierson kept himself in a completely independent position, accepting directions from neither his former employers nor the Government. Now as managing director of the I.R.C. we have a highly salaried man whom I is- now to be extremely honourable, able and compassionate. He is to receive a salary which the Government consider him to be worth. I wish him luck, and hope that he makes a great success of the iob—while he has it. But, I repeat my right hon. Friend's statement at the beginning of the debate that we shall repeal the Act, if this Bill ever reaches the Statute Book, because we believe that on the whole industry knows better than the Government how to get its money.
Certainly, judging by the work that the I.R.C. has done so far, I do not accept that the mergers it has brought about were right. I have yet to see them proved right, and I very much doubt whether, even if they prove to work in the long
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run, that will ever justify the sums of money which the I.R.C. has pumped into them. If mergers should come about at all, they should do so on the financial ability of the two enterprises which are merging. It is utterly wrong that State money should be used for this purpose.
Just as I hope that we shall repeal the Bill if it ever becomes an Act, I must say that when the Conservatives return, as they will, I shall not rest until the sort of job which my old friend Charles Villiers accepted last night, is ended altogether.
7.12 p.m
Mr. Joel Barnett: The speech of the hon. Member for Isle of Ely (Sir H. Legge-Bourke) had one thing in common with those of his hon. Friends. The whole of it lacked any constructive comment, like that of his right hon. Friend the Member for Leeds, North-East (Sir K. Joseph). That right hon. Gentleman's speech will have been notable for only one thing, the irrelevant passage dealing with corruption. It was as disgraceful as the last comments of the hon. Gentleman for Isle of Ely.
The first question that should be asked about the Bill is whether it will help to achieve the objectives set out in Clause 2. But for the Opposition, who have shown themselves, as ever, to be the most doctrinaire party in this country, that is not the first question. Their first question is not what are the objectives of the Bill and whether we can achieve a better state in industry. They ask will it give some of the fruits of expansion to the people of this country through the Government's investing in equities. If so it is wrong. In other words, they are not interested in the real problem.
Presumably, they would not mind so much if the Government were to invest in fixed-interest stock. They apparently agree for example that it is all right, under Clause 8, to lend £24 million to Cunard at 4½ per cent., which seems to me to be equivalent to a subsidy to the company. At present, interest rates are very high, but even assuming lower average interest rates, it is a subsidy of at least 2 to 2½ per cent. per annum. As the purpose of the money for Cunard is to repay a loan which the company took at ½ per cent. above Bank Rate. I

1639
cannot see how it fits the criteria of the Bill.
Incidentally, the Chairman of Cunard told us in his annual report last year that the company does not receive any Government subsidy. All I can say is that I wish that I could receive money at 4½ per cent. interest today. Call it a subsidy or not, I shall be very happy to have the use of it. The Opposition are right about Cunard in the commercial sense, in that I would rather invest in it on a secured fixed-interest basis than have a share in the proceeds. But why is there the subsidy, and why have we not been told by the Government the justification for it? It is not a loan from the Government to do a particular job, but is simply to repay another loan. It cannot be any credit to British prestige to have the "Queen Elizabeth 2" sailing the seas of the world and exposing to the world the losses which it seems inevitable it will make.
If, on the other hand, it is a commercial proposition, why on earth are the taxpayers being asked to subsidise Cunard's shareholders and the passengers on these luxury jaunts? I should make it clear that I have no objection to people making those sort of trips. I should be delighted to try one if I had the time—and the money. But there is no valid argument for taxpayers being asked to subsidise these people. I should like to be told by the Government why we are doing it.
Another small matter in the Bill concerns Clause 11, under which we are giving retrospective power to the Minister to produce civil aircraft. Apparently he did not have this power when he bought Beagle. I have no objection to giving him the power to produce civil aircraft, but we are entitled to know what we are getting for the £1 million. For example, I hope that before we reach the Committee stage we shall have an opportunity to see the balance sheet. I tried to get one, but it is a private company and one cannot obtain it. What net assets are we getting for the £1 million? Are we paying anything for goodwill? If so, I wonder why, when I imagine that nobody else wanted the company. It may well be that we are getting a bargain, but perhaps we are getting a dud. Even though the sum concerned is a mere £1 million in the
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context of the many thousands of millions of pounds spent in a year, we should know what we shall get for that money.
I now turn to the main question of whether the Bill will help to achieve the objectives of Clause 2. I assume that most hon. Members, even the Opposition, would approve of the Bill's objectives, although at times one wonders. I certainly support the Government's objectives and want to see them achieved. I believe that it is right that we should make a direct intervention in industry, and I am sorry that we are not using to better advantage the £700 million that we have committed under the regional employment premium for seven years in this kind of more direct intervention.
I am in favour of the Bill's objectives because of the sort of problems that we all know face the Government and industry. As I said when I intervened in the speech of the right hon. Member for Leeds, North-East, he knows that the major problem is shortage of capacity. Every time we try to increase production we come up against the fundamental problem; there is a flood of imports and a balance of payments crisis, and we must return to deflation. Despite the obvious and inevitable demand for additional capacity, manufacturers have not gone ahead, and we are entitled to ask why they have not produced the extra machine tools and other types of plant and equipment which the country desperately needs, and which we shall need even more as soon as we want to increase production.
There are a number of reasons why industry has not gone ahead. Money is one reason, but not the major one. I entirely agree with Lord Shenfield, Chairman of the Industrial Commercial Finance Corporation, when he said that for normal commercial purposes money is generally available. Money may be one reason why industry has not gone ahead, but it is not the major one. It seems to me that the main reason is the ultra-cautious approach, and the perhaps understandable fear that future demand will not be there for the goods that industry is required to produce. A Minister can and should take a rather longer-term view. He should be able to persuade industry of the need to increase capacity and at this stage, when he is trying to persuade industry to move in a particular direction,

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the finance is useful, although not fundamental to the exercise.
Those are the reasons why the Government must have power to intervene at selected points, for if, despite the persuasion of the Government, industry will not go ahead, the Government must act. Governments are constantly criticised for the failures of our economy and the failures of industry, when they do not have the power to intervene.
However, despite my general agreement on objectives, I wonder whether the Bill's proposals form the best vehicle to achieve what the Government and I want to see achieved. How would it work in practice? I am very concerned about the conglomeration of boards and companies and Ministries to deal with various aspects of the same problem. Each serves a useful purpose but there is a grave danger that they will get in each other's way. There is the I.R.C., the N.R.D.C., the I.C.F.C., MinTec, the D.E.A., the Board of Trade, merchant banks, finance houses and other institutions.
One must ask whether what we are trying to do could have been done by one of the existing bodies, perhaps by a revised I.R.C. We would not need to revise the I.R.C. very much. The main Clauses of the I.R.C. Act and the Bill—incidentally and interestingly, both Clause 2— have almost identical wording. There would not need to be much change to enable the I.R.C. to do precisely the same task which we are to ask the board and committees to do under the terms of the Bill.
On can conclude only that the I.R.C. did not want to do the job, and I think that that is what has happened. I understand the reason—the I.R.C. feared that it would be using both the stick and the carrot and would therefore ruin the relationship which it had, or thought it had, with industry. It could be argued that the carrot used alone by the I.R.C. since its formation has had some useful results. From the information available to me it is not possible to say just how much the I.R.C. has done specifically to bring about some of the mergers of the last 12 months and the great spate in recent days. I hope that it has had a great deal to do with them, but even if the efforts of the I.R.C. had been substantial, it seems to me, and apparently seems to
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the Government, for they would not otherwise have brought in the Bill, that there is room for something more to be done to get the expansion which we need.
Presumably, a new body is needed because the I.R.C. did not want to do the job, but is that a reason which should satisfy either the Government or industry? After all, industry will know what this is all about, and it seems therefore that we are creating an additional and unnecessary body. Both the new boards and the I.R.C. will be supervised by two separate Ministers, and at the same time we have another Ministry, the Board of Trade, with B.O.T.A.C. and all the other grants and loans, running quite separately. There are, therefore, three Ministries and three separate organisations all doing a very similar job.
My view is that the fears of the I.R.C. are largely unfounded. Managing directors and company chairmen have many faults; they are certainly not babies. They know the score and certainly know what help the Government are able to give them and what benefit they get from co-operation with Governments. But, of course, in the last resort, Governments must govern. They are held responsible for the faults of industry and, if they do not get co-operation, they have to intervene.
So, while I accept the need for intervention and the idea behind the Bill. I am not satisfied that what it proposes is the best set-up. It is not good enough just to include the N.R.D.C. and the I.R.C. on the Advisory Committees, as Clause 5 proposes. The Board to be set up under the Bill should take over and make subsidiaries of the two other organisations, the I.R.C. and the N.R.D.C., with one Minister, and at the same time it should take over the functions now performed by the Board of Trade which are exactly complementary to those other functions. There would then be one Minister with one group responsible for the whole problem, rather than three Ministries, three Ministers and three different types of Boards.
Ultimately, the success of such a set-up depends on the men and women in the industry at all levels, but the organisation and the men running the sort of board which we set up will also be important. In the debates on the I.R.C. my right hon. Friend who was then the

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First Secretary said that the I.R.C. would be in a better position than merchant banks to be persistent with industry. I hope that I am not doing the I.R.C. an injustice—and I repeat that I have not seen enough to be able to know how much it has done in the spate of recent mergers—when I say that it is my impression that it has not been persistent enough under the previous management.
Given a more persistent approach, there are men in industry who are willing to respond. If the Bill will help to get the sort of management which I have mentioned, it could provide a vehicle, not to change the structure of industry overnight, as my hon. Friend the Member for Salford, West (Mr. Orme) would like and which is an entirely different matter, but to make a contribution to the vital task of increasing the industrial capacity which we so desperately need.
7.27 p.m.
Mr. Tom Boardman: I am totally opposed to the Bill, though totally in favour of industrial expansion. As my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) said, the label on the Bill is completely misleading about the contents in the packet. The Bill has nothing to do with industrial expansion, and industrial expansion is essential if we are to get the highest national production, the highest exports and the highest earnings and the highest profits which we need for the nation's economy.
The Minister referred to certain ground rules, and I want to comment on one or two of them. The first safeguarding condition relates to the competent authority which can bring about an industrial investment scheme. When I saw those words, I looked back hurriedly to see who the competent authorities were, and I saw a long list of Ministers and I thought that the definition of a competent authority was somewhat optimistic, remembering what little impact those Ministers have so far made on the industrial scene.
The next guiding rule was that in the Minister's opinion a scheme was likely to be conducive to the benefit of the economy of the United Kingdom, or any part or area of the United Kingdom. I can visualise investment schemes which
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would be beneficial to a part or area of the United Kingdom, but of no benefit to the national economy as a whole and disastrous for other parts of the economy. For example, one of the many Ministers might consider it to be desirable and beneficial greatly to expand the hosiery industry in a distressed area of Scotland. It would be beneficial to that area to have large sums of the taxpayers' money spent there, but it would be of no benefit to the national economy, and it could have grave consequences upon areas such as my own constituency of Leicester, where the hosiery industry is privately financed. The industry there would then be faced with subsidised competition from other parts of the country.
The third ground rule, to summarise the words of the Bill, is that the investment scheme will not be commercially viable. The last three lines of Section 2 read:
"… but would not (in view of the risk involved or the probable return on commercial investment) be undertaken without such financial support as is authorised by this section."
In other words, it has to be a project which is not commercially viable. At any rate that is something with a ring of Socialist truth about it. I am sure that any project which was taken over that did not meet that qualification then would jolly soon qualify after this Government had meddled with it for a while. We have been talking about support for lame ducks, but it is quite clear that the investment scheme must be for something which is not commercially viable
Mr. Benn: Would the hon. Gentleman apply this to the aircraft industry? Would he say by definition that all the assistance that his colleagues gave to the aircraft industry during their term of office was, by definition, non-commercially viable?
Mr. Boardman: The point I am making is that this is an authority for open-ended future expenditure by competent Ministers, which will be allowed if the project is not commercially viable. At this point I am not concerned about whether the advances made in the past, whether the schemes initiated by my right hon. Friends, when in office, were commercially viable. There was no doubt the opportunity at that time for a full debate in this House.
Mr. Benn Mr. Benn indicated dissent.
Mr. Boardman: I accept that, because, I was not here. The general proposition that I am making is that the qualification for an investment scheme being taken over is that it is not commercially viable. There may be projects which may in the national interest demand the support of public money. I can think of many. These are nothing to do with economic or industrial expansion. They are a charge on our industrial capacity, however. Prestige buildings and projects of one kind or another may well be justified, and this House should say whether they involve the expenditure of public money.
Let us not kid ourselves that these projects add to our industrial capacity. They are a charge on that capacity. It is really a case of the efficient, expanded and profitable parts of our industry paying a large amount in taxes which under this Bill will be devoted to supporting the inefficient and the non-commercially viable. It is robbing rich Peter to pay poor Paul, and it is that aspect, among others, to which I am totally opposed. The Minister made a good deal of play about the voluntary aspect of the Bill and the fact that no one would have their shares or their undertakings purchased without their consent. The weak and the inefficient, those who have these non-commercially viable projects, will probably be willing to enter into some joint venture with the Government. They will willingly accept the prop or crutch that the Government extend to them.
My concern is for the strong and efficient competitor who sees his inefficient rival using his money, paid in taxes, to compete with him. This will be the effect of this Bill. It will frustrate and stultify industrial expansion. This was foreshadowed some time ago, when in The Times of 24th July, 1967, the science reporter, Pearce Wright, wrote:
"MINISTRY PLANS TO PUSH NEW MACHINE TOOLS
The Minister of Technology is examining a system of incentives to encourage light engineering firms to adopt a new type of machine tool —".
It then goes on to refer to a process described as cold extrusion. It said that a scheme of investment grants for factories willing to re-equip with machine tools
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might be introduced. It also referred to the cost being high. Re-equipping costs were £200,000 per unit. It spoke, too, of the risks involved.
I am chairman of a comparatively small engineering company. At the time that this was published it was on the point of ordering cold extrusion equipment, the very equipment referred to in the article. Not unnaturally, reading that Government incentives were to be given to firms installing this, I wrote to the Minister—I was not at that time a Member of this House—inquiring whether those firms which had been progressive and ordered this equipment before the announcement was made would qualitfy for the grant. I was told that the article was not entirely accurate but was "somewhat misleading" and referred to the Board of Trade. I pressed for an assurance that any such grant or scheme that may come about would be extended to those firms which had been progressive and had risked their own capital. I was unable to receive that assurance. I was told:
"May I in the first place reiterate that the Press article was rather misleading, and therefore I am afraid I am unable to give the assurance you seek. There are no plans at present within the framework of the proposals under consideration for financial assistance to be given towards capital invested."
It was, of course, a denial that the proposals were to come about. Having listened to the Minister and read the White Paper it is clear that the article in The Times was reflecting what the Minister had in mind, the encouragement of the new machine-tool industry, helping technologicially advanced industries and so on.
When this Bill becomes law, the firms that are contemplating making that type of investment will first, instead of making their own calculations on whether the risks are worthwhile, go to the Ministry or the competent authority and say: "Here we are, we have a project here which we think is attractive. It is very risky. May we have some money for it?". If the Minister concerned says "No", they will then say: "May we have your assurance that if we invest our own money you will not come along later and help someone else out?". This will be a brake on individual initiative

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and upon firms making their own calculations of the risks to be taken, deciding whether to invest capital and what the chances are of getting ahead of others who may come in later with Government assistance.
It has been said by hon. Members opposite that we have not put forward any alternatives or constructive criticisms. I can tell the Minister very shortly what I believe we need for industrial expansion. We do not need this Bill at all. First, industry needs to be able to keep more of its profits in order that it can finance its own industrial expansion, because it is only out of the retained profits of industry or out of private savings that industrial expansion can be financed without inflation. The second thing which industry needs is to be freed from the bureaucracy sitting on its back and committees looking over its shoulder and to be allowed to get on with the job. Thirdly, it needs a climate set by the Government in which it can have confidence. None of these things is present at the moment. If they were present, there would be industrial expansion and national prosperity again.
7.41 p.m.
Mr. Bob Brown: I am sure that the hon. Member for Leicester, South-West (Mr. Tom Boardman) would not expect me to follow the line which he has taken.
As I see it, the Bill is designed to allow the Government to assist industry in special cases of national interest where the normal market forces would preclude necessary investment. It astounds me that such great exception should have been taken by hon. Members opposite on this question of national interest. The Bill is a very welcome addition to the carrots which the Government can already offer to British industry in persuading it to modernise itself. I do not think that any hon. Member would be bold enough to suggest that British industry does not need modernisation.
The objects of the Bill seem very worthy indeed and, I should have thought, would commend themselves to the House, because where devaluation has not provided all the incentives necessary to firms to expand their exports or their import-saving capacity the Bill will clearly give
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the Government the opportunity of providing the necessary support for such firms.
The Minister of Technology will be able to support the design, development and production of the finished article, including civil aircraft. By doing so, he can ensure that the results of research and technological development are fully exploited rather than have large sums of abortive expenditure, which has happened so many times in the past. I do not think that anyone would disagree that abortive expenditure, whether in the public or private sector, is a gross waste of national resources.
The ability of the Government to provide really speedy assistance under the Bill is of the utmost importance. Provision of finance for the purchase of the Beagle aircraft, further finance for the organisation of shipbuilding and the authorisation of the loan for the completion of the new Cunarder have been referred to already. Suffice it to say that I agree with my hon. Friend the Member for Heywood and Royton (Mr. Barnett) about the interest charges being made to the Cunard Company. If I could get my house mortgage on the same terms, I should be very delighted.
One of the more important provisions concerns the additional funds for the N.R.D.C. and the ability to respond to further needs of industry as and when they arise. The wide forms of assistance in the Bill particularly please me. They are a good step forward—loans, grants, guarantees, the underwriting of losses, which I sincerely hope does not happen too often, and the subscription of share capital. It is the subscription of share capital which has raised the most lather among hon. Members opposite. But the important point which seems to have been overlooked in so many quarters is that shares will be acquired only by consent of the firm concerned.
The limit of financial control proposed in the Bill is £150 million. When I read the article on Monday in the financial section of The Times, I was a little despondent when I found that Michael Shanks suggested that £65 million of it was already committed. I was pleased to hear my right hon. Friend's assurance today that that is not the case.
The setting up of the Advisory Committee to make sure that projects are

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worthy of support and to examine the problem of unfair discrimination must, in spite of the fears expressed, be seen as a clear safeguard against abuse. In the case of a recommendation being made by an official body, such as N.R.D.C., my right hon. Friend will be entitled to set up an independent board to advise him. This is a most important safeguard which hon. Members opposite should welcome. Another safeguard is the fact that none of Her Majesty's Ministers can make use of any of the powers in the Bill without first laying an order before Parliament and getting the assent of the House. The presence of the Chairman of the Industrial Reorganisation Corporation as Chairman of the Advisory Committee a id the association of the I.R.C. and the N.R.D.C. with the Committee both in terms of membership and of staff should clearly ensure that there is no overlapping of the functions of other bodies. This is something which particularly pleases me about the provisions.
I turn to the question of regional development. Paragraph 18 of the White Paper entitled "Industrial Expansion" reads:
"In exercising the powers under the new legislation, the Government will take full account of regional needs and international obligation."
We have heard plenty about international obligations in recent times and I do not wish to refer to the matter again, but I should like clarification on the question of regional development. I hope that whoever winds up for the Government will enlarge on this matter.
appreciate that industrial expansion cannot take place in the development areas and the regions in isolation from national expansion, but I want to make it clear to whoever replies for the Government that my colleagues and I in the Northern Group will not tolerate a situation in which as a direct result of the introduction of the Bill areas like the North-East of England suffer further imbalance. I express this as a word of warning. I therefore ask my right hon. Friend to make it clear that activities arising from the Bill will have, if anything, a regional bias. I want him to spell out clearly what is meant by the pronouncement in paragraph 18 of the White Paper.
If I might now spend a few minutes on the Tory arguments, both the Tory Party and the C.B.I. have argued against
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the Bill from the very first day of publication. They have said that it will lead to creeping nationalisation. Right hon. and hon. Gentlemen opposite are crying "Wolf" about creeping nationalisation, and I am sure that my right hon. and hon. Friends will agree with me when I say that, far from seeing a wolf round the corner, all that I can see is a tiny puppy-dog. I see no threat of creeping nationalisation in the Bill.
Then we have had the hoary story about the waste of public money. Really, the C.B.I. must be in some difficulty and embarrassment over the argument about the waste of public money, because I am sure that many member firms of the C.B.I. would dearly like an injection of public money.
Mr. Ridley: Does the hon. Gentleman not find it a little strange, two years after the last General Election, to be supporting a cut in the social services in order to spend £220 million more on private industry? This is a reference to the begging bowl argument, and all that goes with it.
Mr. Brown: I do not see that at all. A cutback on the further expansion of social services is not unreasonable in present circumstances, and that is why I supported the Government in the Division Lobby. In any event, there is no question of an actual cut. It is a slowing down of the expansion which had been planned. That is rather different from a clear cut.
Right hon. and hon. Gentlemen opposite, who lavished £100 million of taxpayers' money on the aircraft and steel industries, are hardly in a position to object to a scheme which includes built-in safeguards against the waste of public money. Surely they will not seriously argue that, where public money has been invested in industry or anywhere else, the Exchequer should not have the opportunity and right to seek a return for it.
In any event, the objections of the Tories and the C.B.I. have missed the point, which is that this is not a shotgun marriage. The Government are not proposing such a marriage between themselves and industry. The Government cannot impose assistance under any Clause of the Bill. They can only exercise their power at the invitation or with the connivance of industry. In the case of a

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mutually agreed seduction, it is wrong of right hon. and hon. Gentlemen opposite to scream about British industry being raped.
7.54 p.m.
Mr. Nicholas Ridley: I will deal with the remarks of the hon. Member for Newcastle-upon-Tyne, West (Mr. Bob Brown) in a moment, but I want to be brief, and I will come straight to the point.
We have been accused by hon. Gentlemen opposite of being against all aid to industry, but I suggest that they have got into a muddle about the purpose of aid to industry. No one who supported the Conservative Government could say that he is opposed to all aid to industry. The point of such aid is to increase the technology and the research and development which goes into the modern products which we as a nation have to make.
There is a possible second reason why we should put money into private industry, and it is to help it deal with the social consequences of decline, regional development, temporary difficulties due to dumping, and matters of that sort.
Those are the only two reasons which occur to me as being valid, and I would remind hon. Members that declining industries and social matters are the responsibility of the President of the Board of Trade or the Minister of Labour. The responsibility of the Minister of Science and Technology arises only if money is injected for that purpose.
We should reject the arguments which appear more and more in Labour Party dogma for State aid to industry in favour of import saving. This is a form of neoprotectionism along the lines of, "We will do it here to keep out your beastly products, though we know that we cannot do it as well". That argument must be ruled out.
The other argument is based on jobs bribery, "We must keep so and so in business because the jobs of a thousand men are at stake". That will lead to nothing but keeping derelict industrial establishments going, and no heed should be paid to subsidising a declining industry in the name of technology for fear of the electoral consequences.
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For myself, I reject the prestige argument, and that is why I find myself in the company of the hon. Member for Heywood and Royton (Mr. Barnett) in saying that the Cunard loan was a mistake, and I said so when it was mooted by the Conservative Government several years ago.
Having narrowed down the reasons for assistance, the next consideration is how the assistance should be given. If we want to develop new products, we should concentrate our money on research and development contracts. What is the point in investment, buying shares, and buying up whole industries? That has nothing to do with research, development or technology. The Minister was at pains to quote the vast sums spent by the American Government on space and technology, but, when I intervened, he dodged the issue and did not admit that not one dollar has been spent on investment in shares and State aid. Every single dollar has gone into research and development contracts.
By shaping the control in such a way, it is possible to get the firm or industry concerned to deliver the exact goods required. If it is necessary to push forward in a particular science or industry, all that one has to do is to draw up a contract so that it is done. Then it becomes possible to place orders for the products required. The Government purchase about a third of our industrial production, and they have immense scope for promoting research and development by means of the orders that they place. With care and competition, they can do an immense amount with the money. I would not say that the money was not to be brought forward, but it should be used entirely in this fashion.
The other way of doing it, which is to buy shares or make investments in companies which are thought to be important, has many drawbacks. Often it is illegal because the subsidy element is against the G.A.T.T. Treaty, the E.F.T.A. Treaty, or some other obligation. However, I do not make much of that, because it is not all that important, but it is an argument which has to be taken into account.
As my hon. Friend the Member for Leicester, South-West (Mr. Tom Boardman) said, it is robbing Peter to pay Paul; it is taking from the rich, successful and prosperous to bail out the others,

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and it is keeping investment in businesses which should be in others.
The example of Millom is very much in point. The Minister has refused a grant ED the company to develop the revolutionary spray steel making process. By that, he is refusing assistance to the firm which invented and developed the process and, at the same time, he is making it pay tax on its profits to subsidise the Steel Corporation, which will get away with the advantages of the process. This sort of awful, arbitrary and discriminatory decision must make the Minister suffer many a sleepless night, and sometimes he must make the wrong decision. This one is wrong and it shows the danger of this sort of selective intervention of which he is so proud.
Mr. Hooky: In point of fact, I think that Millom did not invent this process. It was invented by I.S.H.R.A.
Mr. Ridley: It was invented by I.S.H.R.A. and developed by Millom with I.S.H.R.A. help and assistance. All the development work was done by Millom and at a later stage English Steel aid another firm set up pilot plants. As a result of the two-year delay which has taken place Millom has lost its lead, and its chance of exploiting the invention has been lost through waiting for a Government grant which in the end never came.
Mr. Robert Howarth: The right hon. Member for Leeds, North-East (Sir K. Joseph) claimed that these developments with real potential would be supported by the market. In this case why was it not supported by the market?
Mr. Ridley: That is a good point. Millom is still going ahead. The point is that waiting for two years has destroyed its lead. It got enmeshed in bureaucracy. It would have done better to have gone ahead from the word go. It was held up for the first year by refusal of permission under the original Iron and Steel Act whereby the Minister of Power had power to prevent it, and that he did until the last possible moment when the time limit expired.
One final argument against investment in private industry which to my mind is conclusive—the other two are not conclusive—is that once an industry feels that it has the advantage of being able
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to fall back upon the public purse, discipline has gone. If one goes beyond perhaps 40 or 50 per cent. of public capital, the State is inevitably committed to that firm. If it goes into the red and does worse and worse and worse, there is nothing that can be done to stiffen the management or prevent those losses being made. The State has never declared one of its children bankrupt. I wish it would. It would be a most salutary thing for it to do. The result is the growing feeling all the time in the minds of chairmen of nationalised concerns and industries that there is no need to worry, because the State will have to come to their rescue.
Mr. Benn: The hon. Gentleman might have referred to the Firth of Clyde dry dock, which was an example of support given by the party opposite, and, when the matter came forward, by a conscious decision we allowed the firm to go into liquidation. We paid the liquidator so as not actually to see the assets dispersed, and it became absorbed in an economic group. If the hon. Gentleman is to make statements like this—he has made a number—he should check their accuracy, because he is not giving the House accurate information.
Mr. Ridley: I am not acquainted with the details of the dry dock that the Minister mentions and I may in that particular instance be in the wrong. I do not know. However, I should like to quote one example from this Bill—[Interruption.]there are exceptions to every rule, but my exception to allowing industries to rely to much on Government capital ——
Mr. Robert Howarth: Short Brothers.
Mr. Ridley: Short Brothers is a good example of a firm which has never been able to stand on its own feet.
The proposal is made that we should purchase the Beagle Aircraft Company for £1 million. Applying the criteria which I have set forth to this proposition, I cannot see that it is in the technological forefront to buy a light aircraft company. Nobody would hold that it was. Nor are there any employment or social reasons, which, in any case, should be taken care of by the Board of Trade. Therefore, I am bound to conclude that it is for no good reason that this sort of company is to be acquired. This is the prestige point.

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The reason given is that we cannot afford not to have a light aircraft firm. I, as did two hon. Gentlemen opposite, specifically excluded prestige from my list of criteria. If that is so, it would seem important that this company should have a chance of being prosperous and show a good return on the money that we are investing in it.
I want the Minister to give us his views about the future. So far as I know, this company has never made a profit. In the 18 months that it has belonged to the State it has lost £2·4 million, or £2.4 million have been given to it by way of grant. I presume that was largely to cover running losses. In the 18 months that it has been in public ownership it has sold 19 aircraft. I am told that to have a reasonable break-even we need to sell between 200 and 300 a year. These are not very encouraging prospects. I hope that the Minister will be able to persuade us in Committee before we go ahead with this particular purchase—we are not committed; this is one of the purchases which has not been given legal authority—that we have a very much better prospect of profit and return on our money in the future.
If we wanted to help the Beagle Aircraft Company we should have given it a development contract. Why did not the Government, in the course of purchasing aircraft for the R.A.F., offer to give it a development contract? This would have been one way of injecting public money into the light aircraft industry. In that way the Government would get the products they want without being encumbered with ownership of the company. Let somebody else do that. All the disadvantages that I have mentioned will inevitably accrue.
Finally, we must think about the future. The Minister has been at pains to emphasise the need for Parliamentary control over each separate acquisition or injection of public capital. What matters is that not just at the time of being purchased, although I agree with that, but after three, four or five years there should be a procedure whereby these injections of public money are examined to make sure that they have been right and proper injections and whether the companies into which they were put should be allowed to continue.
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Suppose we had to buy a lame duck somewhere along the road. How will this House be able to terminate the liability? The right hon. Gentleman must realise that these proposals carry the need for public accountability a considerable step further. A Select Committee of the House—perhaps the Select Committee on Nationalised Industries—should be empowered to do efficiency audits on each of these projects to ensure that we, as the taxpayers' representatives, are getting value for our money. There is no point in making investments for the sake of dogma or doctrines. These investments must be made for hard commercial reasons. Indeed, the Minister has sought to justify this Bill on the ground that these are good commercial investments which the market for some stupid and stubborn reason will not make. Therefore, we must be allowed to check why and how the money has been used and whether it has been a good investment.
With that thought I leave the question, because I believe it is vital to think beyond the moment of committing the capital to the every-day task of making accountable to this House how that capital has been used and whether it has been properly employed.
8.10 p.m.
Mr. John Rankin: I welcome the Bill, and in view of the fact that one or two of my colleagues are still desirous of speaking I shall try to make my remarks and comments as brief as possible.
I want to look at what I think may be the effect of the Bill on those sciences which are associated with aerospace. Their birth has coincided with what we might call a new era which began some time before the Second World War and led to three great events. The first of these was a social one, the advent of nylon into women's stockings—a remarkable invention. The second was the Olympus engine, and ultimately, the chief one, which came about very recently, the launching of the Concorde. These have heralded the new world into which we in Britain must enter more fully. Whether the financial provisions in the Bill will be sufficient to ensure this will become obvious only as time goes by and I feel sure that if they are insufficient the Minister and the Government

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will direct their attention to remedying that situation.
Nowadays aerospace plays a more important part in our lives than any other industry, but its development proceeds more slowly in the Old World than in the New. In Britain the industry employs 260,000 persons; in Western Europe it employs 201,000; but in the United States it engages 1,400,000 people. In 1966 America invested £3,340 million in its development. We in Britain invested only a relatively small sum, £194 million, while France invested £150 million. I am certain that the Minister conversant with these facts, and realises that greater public financial support is demanded. Europe outside the Communist bloc was still more closely tied to the older industries which employed 56 million people, as against the 23,600,000 in the United States.
Due to our lack of concentration on the newer technological industries, in 1966 Europe managed a turnover of only £1,234 million to which we in Britain contributed £570 million, and France £385 million, while both played an important part supplying the United States with the scientists she required, and at the same time lamented the brain drain which helped the American industry to its phenomenal aerospace sales in 1966 of £8,815 million, seven times greater than that of Western Europe. In fact, Europe's total output only equalled the amount by which the American aerospace industry expanded its production in 1966. In the same year its exports reached a post-war record of £560 million, and this did not include the sums paid by us and other nations of Western Europe for patents, licences, and tech-n cal "know-how", worth another £200 million annually.
There is, however, another kind of fall-out. It has been calculated that the United States is saved £1,500 million in education costs by the emigration of non-Americans, which includes Britons, to make up for her lack of university-trained manpower. The rate of inflow of foreign-trained scientists is reckoned to be 1,000 per year. This is happening at a time when the British aerospace industries employ a mere 7,000 scientists in research and development, compared with the American total of 100,000. In France the comparable figure is very difficult to
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get, but we know that 15,000 are employed on design work.
This morning I listened to a team of Manchester University students being quizzed on the 8 o'clock news bulletin. Some of them are nearing the end of their science or engineering degree courses. They admitted that while £20,000 of public money had been spent on fitting each of them for his occupation in life, they still propose to emigrate. I do not challenge their decision. It is their right. Most were bound for Australia, next in favour was Canada, then came the United States, and after that Sweden. Altogether, only half of them proposed to remain in Britain. The others felt that opportunity abroad was greater, and this is perhaps explained by the fact that our gross national product grew from £510 of £570 per head between 1961 and 1965, while during the same period the increase in the United States was from £1,000 per head to £1,250.
Sir T. Brinton: I gather the hon. Gentleman is arguing that we ought to treat this matter in the same way as the United States do, because he seems to be quoting their success.
Mr. Rankin: I am not suggesting any such thing. I am merely making comparisons and providing information about these countries, which I think is important in any decision to which we may come.
That, briefly, is the reason for the brain drain westwards. Life is richer there, and we contribute to that richness by the export of ideas which, in my view, we ought to be applying to improve our own standards of living.
That brief survey should, however, still lead us to some clear conclusions. In my view, from the figures that I have given, no nation in Europe can face American competition unaided and alone. Whether it be in investment, research, development, output, sales, or employment, the United States outstrips us all individually. To survive, the separate twigs must be bound together, as in the old fable.
The European Technological Community is the key to success—I hope that my right hon. Friend is taking note of this, in the new world of aerospace opportunity which lies before us. The American

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group, the Russian group and the Chinese group must now be matched by the European group. Such a reformation would inevitably lead to a better use of our resources. After all, 40 per cent. of America's aerospace activities are concentrated in the State of Washington and in California. European technology would be greatly strengthened if it were similarly disposed. This would pave the way for new industries, the necessary extension of existing ones and a stronger basis for the economy.
Opportunity today knocks at our door. What form does it take? The International Air Transport Association stated recently that the world's scheduled airlines will require a further 5,500 jet aircraft in the next 12 years, an order worth roughly £20,000 million. To keep abreast of developments in air transport, European airlines alone face an investment of about £4,000 million in that period, and, at the same time, Europe will have to replace nearly 6,000 aircraft used in the strike/defence capacity—a potential market estimated to be worth £4,500 million, and this ignores military transport and support aircraft. I am also leaving out of account the requirements of the charter and non-scheduled operators and general aviation.
Nor does this include military exports outside Europe or developments in avionics, missiles and space. On a conservative estimate, the international investment in aviation will be between £3,000 and £4,000 million a year over the next 10 years. We have little room in this country for unemployment if we face up to the opportunities which lie ahead.
In civil air transport, the Director-General of I.A.T.A. forecasts that 177 million passengers who were travelling the world in 1965 will have become 580 million by 1975 and 770 million by 1980. The numbers of passengers handled at Heathrow, Gatwick, and Stansted was 11,860,000 in 1965. And the total aircraft movements were 221,000. I am leaving aside Prestwick, Abbotsinch and other airports in this calculation. The British Airports Authority estimates that, by 1980, the number handled at those airports will have risen to 45 million and aircraft movements to 442,000.
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I have merely taken a peep at opportunity, which is limitless. One thing, however, must be made clear. All the world's our oyster: let us open it.
8.25 p.m.
Sir Tatton Brinton: It is difficult to follow the argument of the hon. Member for Glasgow, Govan (Mr. Rankin), because it consisted mainly of a "song of infinite repetition", after Walt Whitman, but did not have much bearing on the Bill. Of course the world is full of opportunities, and of course we admit that there are some occasions on which Government assistance and intervention is justified ——
Mr. Rankin: Would the hon. Member not agree that the opportunities are also increased by the Bill?
Sir T. Brinton: If that was the hon. Gentleman's point, it did not seem evident to me.
I was saying that Government assistance and intervention can be justified to obtain the effects desired by society. We must admit this, considering the many occasions on which Conservative Governments have admitted the principle. We do not suggest that it is never right for the Government to assist or intervene, but when the Government commit money to an enterprise, surely there must be three basic requirements—first, that the enterprise is highly profitable and economically desirable; second, that it is required for defence or strategic reasons; or, third, that it is socially desirable to prevent hardship,. suffering or the economic collapse of large areas.
First, the question of whether an enterprise is profitable is for judgment in advance, but if the motive for supporting it is that it should make a profit, the best judge is the private enterprise free market system of financing, because It is better qualified than any ad hoc group or advisory committee. This is a question of judgment, but I am talking about motives and not results. If the motive is defence or strategy, that is another question, which I will omit. This is largely where the Government and the suppliers of defence equipment must work closely together, but the Bill is not about that. The third aspect is the social one, which is adequately covered by the existing powers of the Board of Trade and the

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Ministry of Labour, in view of the substantial advantages which the Government can offer to obtain the necessary social adjustments which industry can give.
So we are left with the profitable aspect. Although it has been suggested that the Bill has specialised objectives— the hon. Member for Govan suggested that it had a strong bearing on aerospace —this is nonsense. There is no necessity for the Bill if the only considerations are aerospace or defence objectives. The Minister particularly referred, for instance, to the machine tool industry ——
An Hon. Member: And Concorde.
Sir T. Brinton: I will come to that in a moment.
The Minister suggested that the Government should finance the machine tool industry. But this is a workaday industry and not a highly specialised one with a particular national objective. It is the basis of the whole of industry. It is suggested, however, that the Government should be able to take an interest in this industry—not merely an interest in getting it going or in injecting new ideas, hut an interest in production.
The most significant part of the Minister's speech was that in which he said that there would be certain shifts of emphasis, and he spoke particularly about research and development as a Governmental interest being switched to production and marketing. If it is the intention of the Government to endeavour to get mixed up in those highly technical and complicated subjects, they are biting off more than they can chew and are entering an exercise which should not be the province of this or any other Government. This is not the function of Government. Perhaps we are expressing again tonight the fundamental cleavage of opinion between the Labour and Conservative Parties. It is the division of opinion between the centralisation of power —nationalisation of production, exchange and distribution—and free enterprise. It is a question of which is the right answer.
It is evident that the Bill does not have any true basis in logic. The right hon. Gentleman said, in effect, "This is new machinery. Its actual use we shall see". This is simply asking—not by any
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means for the first time by this Government—for a blank cheque to enable the Government to do what they like without specifying to either the House or the country what they intend to do.
A specious part of the right hon. Gentleman's speech was when he said that he could not illustrate for what these powers might be used. That, he said, was too confidential a matter for us. He did not even tell us where in the past the lack of these powers had proved to be a handicap to industry. In the absence of such concrete illustrations, we should not give the Government a blank cheque to spend £100 million or £150 million of the taxpayers' money to buy into industry.
When considering Clause 2, one must admit that, among the various reasons for which a properly constituted authority may invest in industry, is not merely the need to establish or increase production, but to sustain productive capacity. I cannot imagine a wider objective. If anyone wished to write an open cheque for the Government, that is what we are being asked to do now.
And when considering the question of equity, the Government's objectives, if they were sincere —and I do not believe
that they are—could be met by taking extra powers, if they need them—which I do not believe they do—to lend money to industry to encourage the starting and development of the right sort of ideas. N.R.D.C. and a gaggle of other agencies already exist—the Government established the I.R.C.—to do this work.
When the Government openly say that they want to get into production, they are exposing their hand and the political motive behind the Measure. It is not the function of Government to get into the ordinary productive process, except where that is required for the national interest, such as for defence or for certain social reasons.
I said at the outset that there are occasions when my three basic motives for such action may not cover all the cases that could arise. In such circumstances, the Government should justify their action. It is absolutely kidding Parliament for them to suggest that an affirmative Order is sufficient control by the House over the possible future operations of the Government. They are

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intending to get into industry in detail—not into dealing with the problems that have been dealt with by this and former Governments, by special measures, but to get their little sticky fingers into the operations of private industry; and I suspect that they intend to do this on an increasing scale. Sums like £150 million are not small. I shudder to think what use will be made of this money.
As a producer of goods, I believe that the Bill has only one objective and that that is political. It is to fulfil what is still, after all, the declared policy of the Labour Party. It is Clause 4, nationalisation. They want to nationalise all the means of production, distribution and exchange. Since "nationalisation" has become a dirty word, some other method must be found to satisfy the Left-wing opposite.
8.36 p.m.
Mr. William Small: I support the Bill. This has been a wide-ranging debate, but I wish to comment on the philosophy that lies behind the Bill, and, in doing so, it will be clear to hon. Gentlemen opposite why I support it.
We are really discussing the question of whether one can run a country—particularly a country which is faced with the sort of problems that we face—on the basis of Parliamentary etiquette and armed with a copy of Erskine May. Many of the industrialists that I have met—and, whatever hon. Gentlemen opposite think, I have met a lot of them —have told me that Britain's prestige and status in the world is shrinking. They recognise that if we are to earn our way in the world we must compete. However they also recognise that our biggest competitor in the commercial and industrial world generally is Japan, which has leap-frogged us in the last 10 years; and now the Continent has the same sort of infrastructure.
For many years we in Britain have enjoyed protection based on imperial preferences and Crown Colony status. The hon. Member for Kidderminster (Sir T. Brinton) asserts that the Government need intervene only in matters of defence. The trouble is that that has been Government policy for too long. That is
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why we need Measures such as this. The assistance that is given to management generally must be lubricated and industrialists must be persuaded to look further than their own garden fences. Too often they tend to ask, "What is in it for me?" That is why this is a good Bill.
We cannot afford the spasmodic luxury of every individual saying, "Give me a helping hand." That has been said too often in the past, in respect of Cunard, Rootes and many others. The Bill is a stepping stone in the right direction. Are we to have export-led reflation, or are we to go on as we have been for too long? After all, what is our export record? My criterion would be for the mergers of G.E.C. and A.E.I. and all the others to be supported under the I.R.C. if they had the complement of an export record and not supported if they did not show an increase in that record.
I have with me a copy of today's Times referring to men who will lose their jobs through the G.E.C.-A.E.I. merger. There were 144,000 in the industry after the merger. Some of the lubricant provided by the Government should be used to cushion the effect of these men. The position may be the same with regard to Rootes and Chrysler. Reference has been made to Alcan. This has a necessary facet in British industry in terms of import substitution plus the fact that it is likely, should coal be used, to save many miners' jobs. Shipping will benefit under the Bill to the extent of £20 million.
I hope that the Minister has looked at the French scene in terms of export records. France, like Britain, depended on things which have now disappeared. For instance, there was the Algerian market. This should be viewed against the situation in Holland. The export performance in France is 11 per cent., but in Holland it is 30 per cent. France is reconstructing by introducing management consultants and having an industrial secretariat to support the efforts to get exports. There is a message for us there.
I have a high regard for Ronald Grierson, who assisted the Government for 18 months in an unpaid job. In The Times he indicated what his problem was.

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His interests were in trade and banking and he could not be independent. The change now is that there is to be an independent chairman with a highly-paid job. Will it be the initiation by a highly-paid chairman, a professional and a full-timer or, as it was under Mr. Grierson, the job of dotting the i's and crossing the t's of mergers such as Elliott Automation, G.E.C., Leyland and others which fall into their laps, the initiation taking place outside and being merely approved in principle? Or is the job now to be done by Mr. Villiers, an initiation into the market place of mergers which are required for an export-led resurgence?
8.43 p.m.
Mr. David Lane: From the debate so far, it seems that the Bill s getting an extremely lukewarm reception from hon. Members opposite as well as those on these benches. One of my reasons for opposing it is that in this delicate field of negotiations between industry and Government the Bill is likely to promote confusion rather than confidence.
The Bill, alas, shows that one of the sacred cows survives. The sacrifice of that one sacred cow would have been a small price to pay for the beneficial psychological effect that there would be for British industry. I concede that conceivably there may be instances in which the Bill could be useful, but they will be far outweighed by the dangers of error and waste, and I have no doubt that the balance of advantage to the nation will be unfavourable.
The Bill is open to criticism on several grounds, but I shall touch on only two. One is the effect on the frontier between the private sector and the public sector at the economy. The other is the criteria by which the powers in the Bill will be used. In the relationship between the private sector and the public sector, if the Bill is passed, all Government discretion and discrimination will be widened where it should be narrowed and the tap of public expenditure will be loosened where it should be tightened. We shall not even have the safeguard, which the Prime Minister promised the House on 31st October, of adequate Parliamentary control to protect the public purse. What I fear we shall have is further growth of the consultative
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machinery for a great many industries, just at a time when industrialists are crying out at the load of inquiries, form filling and other things which distract them from their main job of trying to run their business more efficiently.
The latest industrialist from whom I have personally heard is a very talented electrical engineer in Cambridge in a company which is heavily engaged in the export trade. He wrote to me this week in these terms:
"The approach of some of the technical departments (of government) does not help our export efforts, and some of the engineering establishment could well be released to industry to reinforce our efforts."
The Bill is likely to have the effect of confusion, despite what has been said by hon. Members opposite, between the Industrial Reorganisation Corporation and the new apparatus which will result from the Bill. I am not convinced by the explanations we have had so far. It is a strange sense of proportion on the part of the Government that the new managing director of the I.R.C. will be paid £20,000, although only recently the Government dug their toes in about raising above £12,500 the salary of the new Chairman of British Railways.
My second point is the criteria, what we have called this evening the ground rules. As the Minister said earlier, it was my constituency of Cambridge which had the doubtful honour of being chosen for the first detailed exposition of the Government's ideas when the Minister of Technology spoke there during the by-election in September. He said:
"To be effective, Government help has got to be selective. It may mean helping those with the greatest prospect of success and very often picking winners and backing them."
I was greatly relieved when the right hon. Gentleman failed to pick a winner on that occasion. The truth is that no Government since the war have had a very distinguished record for picking winners in this field. Further, this Government are peculiarly sensitive to political pressures.
My own fears about the Government's will and competence in using the powers of the Bill are increased by what I think is an ambiguous commitment to an advisory committee in Clause 5. It may be a Freudian slip, but it says merely that the Minister "may appoint an Advisory Committee". I believe that this should be compulsory, not merely permissive.

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We have learned that the fears about the Bill are not confined to this side of the House. We have heard about the misgivings which the hon. Member for Billericay (Mr. Moonman) expressed in an article in the Sunday Times and on which he enlarged today. Without a firmer undertaking about Clause 5, and without a much clearer explanation of the ground rules than we have yet had, I believe that the Government have no right to ask the House to give the Bill a Second Reading this evening.
As it happens, the Government are grappling with a problem right at this very moment which is relevant to the Bill and which has been referred to briefly by several hon. Members. I refer to the aluminium smelter. We have been told by the Press that it may be brought within the machinery of the Bill. We have also been told that a decision is likely to be taken next week. Obviously we cannot expect whichever of the many Ministers concerned is finally to be responsible for the smelter to announce any decision today. What I suggest that we can expect is that when the Secretary of State for Economic Affairs winds up tonight he will do something to clear up the prevailing confusion and uncertainty. I put this to the Secretary of State very seriously, because the criteria which govern the Government's approach to this smelter issue will surely give a good idea of the criteria they have in mind for the Bill.
I have four brief questions to put to the Secretary of State. First, how far do the Government intend to push the concept of import-saving for its own sake? Second, have they sufficiently considered the repercussions on overseas trade? Third, do the Government still stand by the Prime Minister's statement last November, in answer to my hon. Friend the Member for Louth (Sir C. Osborne), about
"neither … an Exchequer subvention nor an increase in the cost of electricity to other users" —[OFFICIAL REPORT, 14th November, 1967; Vol. 754, c. 213.]
Fourth, will the Government undertake that, if specially favourable terms are granted to one large fuel user, others will not be put at a disadvantage? If they do not give that undertaking, we shall have yet another new area of discrimination. I hope that the right hon. Gentleman will
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do his best to answer those four questions about the aluminium smelter. We are entitled to an answer before we vote tonight.
Having worked in industry before I came to the House, I deplore the confidence gap which is steadily widening between the Government and industry. In 1964, the party opposite came into office with great good will on the part of industry, and it has squandered it since. Today, instead of persisting with Measures of this kind which, on the most optimistic judgment, can have only a marginal effect, the Government ought mount a major effort to close that gap and to rebuild the broken confidence of industry.
The trouble is that there are far too many Members of the Government prejudiced against private enterprise and passionate for intervention. As soon as he was appointed—the very day, I think —the Secretary of State for Economic Affairs flaunted his interventionism like the Red Flag, and, naturally, industry shuddered. The Government no longer have the physical presence of the right hon. Member for Battersea, North (Mr. Jay), but the memory lingers on in the belief that the gentleman in Whitehall knows best.

There is still time for the Government to exorcise this spirit and replace it by the common sense which is so often shown by the right hon. Gentleman's son who is now economics editor of The Times and by no means unsympathetic to the present Government. Recently, he wrote in The Times about what he put forward as a medium-term strategy, and he gave five points. One of them was:
"Abandon the Industrial Expansion Bill and resolve to keep to a minimum the chopping and changing of government economic and industrial policies which only create uncertainty and inhibit expansion."
It would be far better for the country if the Government had taken Mr. Peter Jay's advice.
8.52 p.m.
Mr. Robert Howarth: I welcome the Bill. The Minister of Technology spoke enthusiastically about it, and it offers, as I understand it, a third useful tool to assist—it can only assist—in the industrial reconstruction which is so necessary for the development of our economy. This is the whole

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basis of the Bill, and I found quite remarkable the Opposition Front Bench spokesman's decision to ignore it. In his speech, the right thon. Gentleman the Member for Leeds, North-East (Sir K. Joseph) built up a facade of rather spurious political objections, spurred on, no doubt, by his extreme wing. I am not referring to hon. Members who have been resent throughout this debate. All Front Benches have their pressure groups behind them, and they have to keep looking over their shoulder. I know that most of them have been absent for the greater part of the day, but, obviously, their presence was felt by the right hon. Gentleman, who, on many other issues, takes a realistic and sensible line.
The right hon. Gentleman was pushed, I thought, into surprisingly ridiculous channels. One cannot take seriously the suggestion that any Government, from that side or this, given our past and present economic situation, could withdraw its intervention over a large field of British industry. The logic of his argument would lead to the steady destruction of the whole machinery of Government intervention built up not only by the present Government in a short time but also over many years by the party opposite, and I do not accept that logic for a minute. As we saw in the debate on Monday, the party opposite act very differently when they are in Government from the way in which they talk when they are in Opposition. I suppose that that is their saving grace.
I was very interested in the right hon. Gentleman's declaration that if they return to power they will repeal the Bill, if it has become an Act. That clear commitment was taken up with enthusiasm by the right hon. Gentleman's Backbenchers. But I wonder why he did not say anything about their intentions towards the I.R.C., and it will be interesting to hear what the final spokesman for the Opposition says about that. Do they intend to wind it up? I am prompted to ask because I had the stimulating and instructive experience of serving on the Committee considering the Industrial Reorganisation Corporation Bill. Government back-benchers are urged to restrain themselves on such occasions, and we had to listen to a whole series of what can only be described as political
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diatribes from rising back-benchers obviously trying to make their mark in Opposition.
If I had taken the trouble to look up the OFFICIAL REPORT of that Committee stage I should have forced the right hon. Gentleman to eat his words, for the very sort of thing that hon. Members opposite are saying about this Bill were said in Committee on the Industrial Reorganisation Corporation Act. Yet, as many hon. Members opposite have readily admitted, the I.R.C. has already, in a short period, performed a very useful function. The omission of the I.R.C. from their threat to repeal this Bill was very significant.
It is incredible to compare the examples chosen by various hon. Members opposite with what actually happened when they were in Government. One needs only to refer to aviation. For two or three decades year in and year out, hundreds of millions of pounds of the taxpayers' money went to both military and civil aviation, apparently without objection by hon. Members opposite.
I am also reminded of the Coal Industry Bill, which we considered only a few weeks ago, and which I think proposed the spending of about £135 million over a number of years. I think, speaking from memory, that it was not opposed by hon. Members opposite. That Bill gave strong support to a declining industry. Because of my constituency interest in Lancashire, I also recall the Cotton Industry Act introduced by the Conservative Government, which I think cost the taxpayer about £30 million in 1959. All those Measures, which I support and which have the support of hon. Members opposite, rather contradict the sort of speeches we have heard today.
While a few hon. Members opposite made reservations about the proposed £24 million for Cunard, it will be interesting to see how they express those reservations in Committee.
I conclude with a brief reference to the two items of aviation specifically mentioned in the Bill, one of which concerns support for the Beagle Aviation Company. My hon. Friend the Member for Heywood and Royton (Mr. Barnett) asked about the company's assets. Although I cannot give details of them, I can say that its products are worth supporting Support will mean that the

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market is not completely dominated by American manufacturers. If we leave general aviation open to the Americans, it is easy to argue that we should leave the whole of civil aviation, including helicopters, open to them, and there is no end to this. I welcome the decision to rescue—there is no other word for it—the Beagle Company from oblivion by using £1 million or more of Government money.
Secondly, I am glad to hear that provision is being made for the large sums of money required to support the production of Concorde. Having got so far with such an outstanding aviation project, whatever the arguments may have been initially, I am pleased that the Government at an early date will provide for the large sums of money for ordering the production versions of the Concorde. It is a project well ahead of anything else in the world, and this provision will bring great heart not only to the people who work in the industry, but to all those who have loyally supported the aviation industry as a whole.
9.1 p.m.
Mr. David Price: After five hours' debate we still remain a happy little band of brothers. This has been a debate of slow tempo but none the less an interesting debate. We can all agree that the Bill is a misnomer, that it has very little to do with industrial expansion, whatever merits right hon. and hon. Gentlemen opposite like to attribute to it. We have to consider the Government's credentials. "Industrial expansion" was the great cry of the General Elections of 1964 and 1966, but while the index of manufacturing production increased between 1962 and 1964 by 14 points, between 1965 and 1967 the increase in the index was zero. That is the context in which we have to consider the Bill.
I remind right hon. Gentlemen opposite that in 1965 they launched what was to be the grand strategy for industrial expansion. It was—if I dare mention it in polite society—something called the National Plan. That was all about industrial expansion. Have hon. Members opposite forgotten the national target of a 3.8 per cent. annual growth rate and industrial investment, which is what we are talking about tonight, at a 7 per cent.
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growth rate? Have they forgotten the easy hopes of the right hon. Gentleman the present Foreign Secretary, who said:
"…I am able to ask the House to welcome this plan as a reasonable basis for claiming that at last Britain is on her way".—[OFFICIAL REPORT, 3rd November, 1965, Vol. 718, c. 1064.]
We are now into February, 1968 and talking about creating the basis for industrial expansion. Where have all the targets gone? Gone for a Burton every one. I feel sorry for the Foreign Secretary. Like Engelbert Humperdinck he must be asking himself, "Am I that easy to forget?"
I can understand the frustration of the right hon. Gentleman the Minister of Technology. I know that he feels passionately and sincerely about the industries which he has sponsored, but the truth is that although those industries were envisaged in the National Plan as having a faster growth rate than the generality of industry, which was understandable, for they seemed to the national planners to be the industries most likely to have faster rates of growth, in fact they have not been exempted from the general conditions of overall industrial stagnation. Some have shown a growth rate while the total of industry has not, but, on the whole, compared with their targets they have not done so. No doubt the right hon. Gentleman can point to the growth of the computer industry, on which I congratulate him, but, on the other hand, the figures for motor car production are not very encouraging.
I can understand why his mind is turning to the concept of selective industrial expansion, trying to find some way to get his industries through the general economic circumstances of the country, and above all the circumstances of Government policy. It is a view that is superficially attractive, but it does not stand up to examination. I acknowledge straight away that in a mixed economy influences can be brought to bear upon events by the State which had a marginal effect upon the level of particular industrial activities.
The most obvious examples are the fiscal arrangements to help the developments areas. All of us who have had anything to do with this know that the effects are only marginal, and that we cannot protect development areas, except marginally, from general economic

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conditions. I suggest to the right hon. Gentleman that this applies equally to the industries for which he is responsible. It is an illusion—and I honour him for thinking that he can do it—to imagine that he can protect his industries from the retrogressive effect of the Government's economic policy.
I can best summarise our objections to this selective approach, and this is at the heart of the Bill, from an extremely important article written by Samuel Brittan in the Financial Times recently. It is a more precise summary than I can give. He says:
"The objections of industrial selectivity can be grouped under four headings: the political threat of arbitrary government; the inability of Whitehall officials to take industrial decisions; the irrelevance of the approach to our main economic problems, and the probability that, so far from fostering efficiency, it will turn out to be a form of feather-bedding of politically sensitive industries and areas."
He went on to say this, which I think is of constitutional importance:
"The fundamental political objection to industrial selectivity is that it replaces the idea of a Government of laws with a Government of men … framework of known and predictable rules is an essential part of a free society; and once punishments and regards are meted out according to the arbitrary whims of particular individuals we are on a slippery slope."
Mr. Barnett: On that basis, would the hon. Gentleman not have selected, say, the shipbuilding industry, the coal mining industry or the cotton industry?
Mr. Price: There is a difference with a whole industry. Let us be frank about these three industries. We were doing it, not entirely for economic reasons, but with our eyes open, as much for social reasons as economic ones, helping in the transition. I accept that because I have yet to meet a complete economic man, someone who at some point does not say that there are considerations other than economic. We should be clear about that and know what it costs us when we make social decisions in the economy.
This leads me to what is the second leg of the Government's argument, which is what I call the "gap" argument. This is the argument deployed in paragraph (2) of the White Paper which talks of:
"… projects which were in the national economic interest but which, because of a divergence between national and private costs and benefits, especially in the short term, could
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not be expected to go ahead solely on the basis of finance from existing sources."
This is a dubious proposition to us. We will wish to hear more from the right hon. Gentleman who is to wind up, but more particularly we shall want to hear further when we get into Committee about the nature of these projects, which the Government think make economic sense for the nation, but which are not commercially viable.
I can think of projects which might well appeal to us, according to our fancy, for all sorts of non-commercial reasons. I cannot very readily think of projects which are economic to the nation, but not individually economic. I am sure that the Government benches will agree that in our post-devaluation situation we must be particularly harsh about what does and does not make economic sense. If I can put it this way, we cannot afford the Walter Mitty dreams on prestige projects, which I am sure all of us have somewhere. We would do well to ponder the advice given by the noble Lord, Lord Cromer, in Cmnd. Paper 3516. He said:
"… it must be recognised that in the free enterprise society of the non-Communist world it is still the prime responsibility of business management to engage in activities of sufficient profitability to the investor that capital can be both raised on a continuing basis and rewarded on market terms"—
and this is the crunch —
"dictated by the profitability of other alternative investment opportunities after considering the risks involved."
Let the House remember that when the State invests in an industrial project the investment is a forced one for the investor because it is the taxpayer and the holder of Government funds who are the real investors.
The House should also remember that in this country we have a highly sophisticated capital market, and in this we have a great advantage over some of our European competitors. Institutional deficiencies in their capital markets which have led to a number of para-State bodies being organised and set up and possibly being efficient are not relevant here. Whether our capital market remains efficient lies in the hands of right hon. Members opposite, particularly the Chancellor of the Exchequer. But, in any case, we already have a number of important State

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institutions. I think immediately of the F.C.I., the I.C.F.C., the N.R.D.C. and the I.R.C. I do not accept the I.R.C. yet. We are in the happy position as of now in capital matters of having both the belt of the free capital market and the braces of State institutions. I do not see that we need any more.
The Minister suggested that we on this side of the House had changed our view and that we would regret having voted against the establishment of the Industrial Reorganisation Corporation. That is not so. The fact that a number of major mergers have gone through recently has been primarily due to the changed attitude of right hon. Members opposite. All the time that they were sitting on these benches they were against mergers. I remind them of what they said in "Signposts for the Sixties":
"We have already called attention to the menacing growth of private monopoly and the consequent concentration of economic power in irresponsible hands. The giant corporations or private financial empires which dominate so much of the British economy, and which decisively influence its total performance, grow each year larger, fewer and yet more closely interlocked."
This is the party which when it becomes the Government, and having written that, swanks because they feel that they have played some part in effecting the merger of G.E.C. and A.E.I. Frankly, I do not see the consistency.
The biggest influence on bringing mergers about came when the Government came in and rightly changed their views —I give them all credit for it—and let it be known that mergers were now in and "on" and, broadly speaking, would have Government support. We on this side of the House recognise that there is a penumbra between the public and private sectors. Having said that, we still believe that the best method yet devised of determining the marginal allocation of industrial resources must be the operation of the free market.
As many of us have pointed out on numerous occasions, including my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) today, the intervention of the law is necessary to ensure that the equivalence of power between buyer and seller is maintained, because only thus can a free market be maintained and
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a just price reached. This applies in the capital market just as much as it does in the commodity market. But equally we recognise that the very existence of a mixed economy introduces major market distortions often beyond the reach of the law, and the most obvious example is a public body which is a monopoly buyer or a monopoly seller.
Furthermore, we recognise similar distortions on the world market, and I am sure that the whole House will agree that the relevant market for British industry today is not Britain but the world. I get a little worried at certain neomercantilist speeches from right hon. and hon. Gentlemen opposite.
The major distortions which exist in the world market make life difficult for certain British industries, and I will mention three of them. The first is nationalist trading policies, above all, "Buy American". The Minister of Technology knows the difficulties which some of his industries have experienced. The second is the enormous subsidies given by the Federal taxpayer in the United States of America to advance technological projects. They arise particularly because the United States of America has been on a semi-war economy since the end of the Second World War. The right hon. Gentleman spoke about the effects of the N.A.S.A. programme, and I agree with him entirely. The third distortion is that whereas our American competitors enjoy a vast homogeneous home market, our equivalent European market is divided, and that is part of the reason why many of us feel that joining the Treaty of Rome is the right thing for Britain in the long term.
The conclusion which I draw is that the Government have a rôle to assist industries which are especially exposed to those distortions in the world market and, to illustrate that, I cite the examples of civil aircraft and computers.
There is a variety of ways in which the Government can properly assist, but I believe that the strategy of assistance should be catalytic rather than interventionist. For instance, I would identify Clause 10, which deals with further advances to the N.R.D.C., as lying within the catalytic strategy, though the right hon. Gentleman will appreciate that we shall want to probe the relevance of this

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figure of £50 million in Standing Committee.
The research argument in favour of the Bill seems to be misplaced. We recognise the catalytic rôle of the Government in assisting research, remembering particularly that research is tied up with education. However, I will not pursue hat thought, because it will involve me n a tortuous argument, but I am sure hat the right hon. Gentleman will take my point.
The Government have all the powers that they require already, and I need only refer to Section 5 of the Science and Technology Act, 1965, to illustrate that point.
The Minister of Technology argued about launching aid for industries other than aero-space. He said, "If we support aero-space, why not computers and machine tools". That is precisely what the N.R.D.C. is doing. However, what really matters in getting a development project through into production, if it,seems viable, is not so much setting up production facilities as getting orders. Orders are the basis of it. That would be my quick reply to the hon. Member for Eccles (Mr. Carter-Jones). It is not manufacturing which is the problem, but orders.
I would say to the hon. Member for Glasgow, Govan (Mr. Rankin), who got on the famous technological gap between Europe and America, that I do not think that there is such a gap. 1 believe that there is an innovation gap, or what is sometimes referred to as a management gap.
That leads me on to the production argument in favour of the Bill. We read in paragraph 5 of the White Paper that the Government
"must be able to operate more directly and more flexibly in support of production itself."
As a general proposition, we disagree. As of now, I can think of only one exception, and that is Concorde.
The real problem facing British and European industry in the face of American competition is not so much a research or even a production problem. It is a marketing, a management and a motivation problem. I am sure that the right hon. Gentleman will be familiar with a recent publication of great significance.
"Le Defi Americain",—"The American
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Challenge", by M. Servan Schreiber. With devastating clarity, he draws attention to the superiority of American marketing and their dedication to the concept of profitability. Mr. Schreiber says,
"What interests the American manager is his margin of profit; what interests his European counterpart is running his factory. It is not the same thing."
I ask the Government: what are they doing to improve their own public purchasing as a stimulus to technological advance?
On the Bill as a whole there is one other broad point; that is the effect of the financial provisions of the Bill on the post-devaluation cuts. I understand from a Written Answer to a Question that I put to the Minister of Technology that the new commitments under Clauses 9, 10 and 11 are extra to the £13 million cut that the Prime Minister announced that his Department had to take in next year's expenditure. It seems to me that that is immediately removed by increasing the grants to the Shipbuilding Industry Board from £5 million to £20 million.
Also, what is the effect of the borrowing powers under the Bill which, I calculate, has a ceiling of £131 million in relation to the Chancellor's Letter of Intent to our common bank manager Mr. Schweitzer, where, in Article 10, he said that the Government's borrowing in the next year would be held within a ceiling of £1,000 million?
Finally, I would ask the Minister about Concorde. He made a brief announcement. We on this side, as he would imagine, would prefer specific legislation on it. We do not want the financing of Concorde added to the Bill on Committee stage. Why was this not included in the Bill? This is no new problem. He has known all along that the Government would have to find the finance. I ask him to give an undertaking that when he makes his statement on the Concorde arrangements it will not be made on a Friday.
Our objections to the Bill are not only economic; they are also political. As most of my hon. Friends have pointed out, the Bill enables the Government to extend further the boundaries of public control and public ownership. I think this is incontrovertible and I have the support of the hon. Member for Salford.

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West (Mr. Orme) who made a charmingly helpful speech in support of our case.
I find nothing surprising about the present Government seeking such powers. It is entirely in character. They are a Socialist Government and we should not be surprised when they try to advance State Socialism. But what I do find inconsistent are the different arguments deployed by the Government spokesmen on the Front Bench. Some of them—I rather thought that this was the tenor of what the Minister of Technology was saying in his final remarks—seek to diminish the Socialist content in this legislation. They say it is not very much anyway. They fall back on the famous excuse of the Victorian housemaid. The House will recall the incident of the unfortunate housemaid who found herself pregnant. On being confronted by her censorial mistress with this incontrovertible fact, her defence was. "Well, Mum, it is only a little one anyway". I prefer the attitude of those other members of the Administration who seek not to deny that this is a Measure of further Socialism —for instance, the Birmingham speech of the First Secretary of State, which has been mentioned by my right hon. Friend, and the speech of the hon. Member for Salford, West.
Could it be that this Bill has opened the eyes of British industry? If we look at the August number of "British Industry", we see that the Government were warned what to expect:
"To give a Government blanket powers to tramp indiscriminately into any sector of industry that takes their fancy would strike at the whole fabric and success of the mixed economy."
They are doing just that in this Bill. It seems to me that the underlying political compromise necessary to make a mixed economy work has been overturned. One might say that Mini-Socialism is on the way out and Maxi-Socialism is on the way in. I see the hon. Member for Heywood and Royton objects to that.
Mr. Barnett: I do not object.
Mr. Price: I apologise to him.
I refer the right hon. Gentleman to what the Leader of the House said in Birmingham last week. We have it on his personal authority that
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"at last the decisions have been fixed which will make it possible at home, as well as abroad, to build a Socialist policy on sound foundations."
That is the Government's post-devaluation strategy. This Bill is a postdevaluation Measure. It fits the strategy, and I am prepared to accept the authority of the Leader of the House about what is or is not Socialism. The right hon. Gentleman seems to be the greatest expert on comparative Socialism. After all, he has at one time or another in his political progress raided every known repository of Socialist truth. Indeed, I regard him as the ideological Bonnie and Clyde of the Labour Party. We do not like that strategy, and we will resist it.
This is a bad Bill. It makes no contribution to the post-devaluation situation. At best, it will be little used, and therefore irrelevant. At worst, it will constitute a serious diversion of resources from viable projects to ones of economic dubiety. It is a bad Bill on economic grounds. It is a bad Bill on bureaucratic grounds. It is a bad Bill on constitutional grounds. It is a bad Bill on political grounds, and therefore I invite the House to throw it out.
9.26 p.m.
The Secretary of State for Economic Affairs (Mr. Peter Shore: As the hon. Member for Eastleigh (Mr. David Price) said, this has been a quiet debate. It has also been a serious one, and, perhaps rather surprisingly, a good humoured debate, at least at times. I think that the reason why it has on the whole been rather low keyed, to use the hon. Gentleman's phrase, is that hon. Members on both sides of the House have found, when they have turned to consider the underlying problems with which the Bill is aimed to deal, that they have some measure of agreement about those problems, and that the differences which emerged about the best way of tackling them were a good deal less than many had thought.
It was the right hon. Member for Leeds, North-East (Sir K. Joseph) who, as it were, set the course of the debate. In response to the strong case put forward by my right hon. Friend, he virtually conceded it in principle, because he said, when looking at the powers in the Bill—and this is very important.

1681
though I do not wish to misquote him—that we already had various forms and organisations with which it was possible for the Government to assist industry, but taking account of that, at the end of the day there would remain individual industries and projects outside all these measures. There will be such cases, and the right hon. Gentleman has no objection to specific measures of assistance. His objection is to the method. Nevertheless, he conceded the argument for the Bill in principle, that is, that there are situations in which we need to intervene selectively to help to deal with specific problems.
The hon. Member for Eastleigh adopted a similar approach. Towards Lie end of his speech he said that the Government had a rôle to assist industries which were subject to distortions in world markets. In evidence of that, he cited not only the aircraft industry, about which there appears to be a great deal of agreement, but computers as well.
That greatly eases my task, because the basic argument has been conceded before we begin. It is true that right hon. and hon. Gentlemen opposite have raised difficulties and problems, but I do not think that anyone who takes account of their broad judgments to which I have referred. and then measures their objections against them, can easily justify the three-line Whip which I understand they have issued, and this great resistance which they have expressed in odd interviews in the Press and elsewhere. Nor do I think that anyone can easily justify the great uproar which has gone on in private industry, and which, of course, has led to a number of statements, of which we are all aware, from the C.B.I.
In reply to the right hon. Member for Leeds, North-East, I would say that the proposed advisory committee will advise us confidentially and we do not intend to have its reports published—nor do I think that he would expect this. This has not been the practice with the I.R.C., or with the B.O.T.A.C., with which the House is familiar.
I want to restate the basic aim of the Bill and go on to the central argument of the hon. Member for Eastleigh. He quoted from the White Paper the phrase about the divergence of national and private costs and benefits, and said
1682
that he would probe in Committee where the divergence lies. He is in for an interesting exercise in definition. We will find it easy to identify particular cases and rather more difficult to generalise, but I will offer one or two observations.
This is central, because many of the critics in the party opposite regard the Bill as unnecessary, because they say that the capital market can provide finance for any commercially viable product. This criticism is misconceived because, as Clause 2 makes plain, the Bill will not be used to finance projects which the market is able and willing to handle. It is those which the market cannot finance with which we are concerned.
It is generally recognised that some projects, on a straight calculation of costs and benefits, cannot command support from the normal commercial sources, yet they are economically worth while when national costs and benefits are considered. Hon Members did not need persuading of this when they were in power, since they often gave money for industrial projects which they considered desirable. My right hon. Friend quoted a number of instances. We have seen cases for which the market has not been able to provide.
The Geddes Report indicated that, from a fragmented and largely unprofitable shipbuilding industry, a viable structure could be evolved, capable of competing in world markets. Such an industry could clearly offer substantial benefits to the balance of payments, but the essential help needed over the reorganisation period was not available from the market, so the Government had to step in. Again, in 1965, I.C.T. badly needed cash to develop its 1900 series of computers and could not raise it on the market. Fortunately, the I.R.C., with the support of the Minister of Technology, was able to help and that intervention has obviously benefited our computer industry.
Similarly, the pre-production scheme for machine tools accelerated technological innovation by relieving users of the risks inherent in unproven equipment, by encouraging manufacturers to develop advanced machines. I was surprised that the hon. Member for Ely (Sir H. Legge-Bourke) could see no evidence, in these

1683
industries in which special assistance has been pioneered since we came into office, of any success.
I was looking at the figures of these three industries. First, on computers, in the first 10 months of last year as compared only with the year before, our exports of computers went up by over 100 per cent. This is remarkable, and is of great benefit to the balance of payments and the economy ——
Sir K. Joseph: The right hon. Gentleman has surely conceded much of our case by quoting the I.C.T. help from the I.R.C. and has shown clearly that the Government already have powers, without this Bill, to do almost everything which is needed. What he has underestimated is our objection to the enabling provisions of the Bill.
Mr. Shore: I will deal with that point in a moment. What I am establishing here, against his hon. Friend's point that the experience of selective intervention has been unprofitable and unrewarding in the three years since this Government has been in office, is that, so far as computers are concerned, the evidence is obviously the other way.
On machine tools, despite the fact that we are in the middle of the bottom period of the business cycle, we have nevertheless achieved, this year and last, record levels of machine tool deliveries. The last example of this is the shipbuilding industry. One has only had to open one's newspapers virtually every day over the last three or four weeks to see the signs—and the actual orders, including the £10 million order which came in today to our shipyards—which would not have happened but for the shipbuilding reorganisation which we have carried through ——
Sir H. Legge-Bourke: As the right hon. Gentleman referred to my speech, I would ask him to recollect that I made it in the context of a remark by his hon. Friend the Member for Salford, West (Mr. Orme) about the machine tool industry. What I had in mind was the actual figures, which are that the industry's new orders in 1966 were 7·7 per cent. below the level of 1965.
Mr. Shore: I was talking about deliveries for 1967 and I said that they were at a record level. It would be un-
1684
wise to guess what deliveries will be in 1968, but I am fairly confident that we shall be able to maintain and, indeed, exceed the deliveries of the past year.
I should like to consider the examples which I have quoted of the Government's selective assistance, and would remind hon. Members opposite of the many selective acts which they took. It is, therefore, possible to identify the main situations where special State financial assistance may be required. First, there are those industries whose structure presents a major obstacle to financial viability. In these cases it may be that a board, as was used for shipbuilding and cotton, would be the right solution; and this is provided for in the Bill.
Secondly, there are those industries which are particularly vulnerable to the effects of the business cycle, such as steel and machine tools. Hon. Members will recall the massive £130 million which was put into R.T.B. and Colvilles in the post-1959 period. Our recent experience is that these have not been able to enjoy a sufficient and sustained period of prosperity to finance the capacity which they need—and are consequently overburdened with long order books, and we get rising imports whenever the economy moves into high gear. This is the situation with which we are all familiar.
Thirdly, there are those industries where scientific research and advanced technology require so vast and costly a rate of innovation that they can be sustained only if a very long-term view of profitability is taken. There are examples enough in this sphere and hon. Members on both sides have spoken about them today. One need only think of the fast reactor at Dunreay, which I agree is in the public sector, or the Concorde aircraft, to see why special financial assistance is required.
We are here dealing with projects which are extremely expensive and which lie so far out on the ordinary frontiers of technology that it is impossible for a considerable period to guarantee that they are even technologically feasible and that, if they are, they will be at the same time commercially viable.
Those are, as I see it, the three main situations in which some form of intervention may be required. However,

1685
there are others. In those I have described it is simply unreasonable to expect that the ordinary mechanism of the capital market—and it is a well-developed capital market in Britain—can supply the resources required.
Sir Douglas Glover Sir Douglas Glover (Ormskirk) rose——
Mr. Shore: No.
My view is that the number of these situations, which we have experienced and are experiencing now, will increase rather than diminish in the years ahead. If there is a difference of view between the two sides of the House, it is that my hon. and right hon. Friends are not afraid of this and that we tend to look to the future rather than the past in deciding where to give Government aid to industry. The principle is the same. The national advantage does not always coincide with the short-term commercial calculations of the capital market.
We are sometimes asked to give examples. The Government have not been prepared to give details before projects have been firmly worked out with fl -ms or industries. We gave the same answer to requests at the time of the I.R.C. legislation and I think that, basically, the House accepts and understands tie difficulties that we would have, and how unwise it would be, if we attempted to spell out the situations in which the Bill's powers and finance could be used.
I will, however, mention one example. It has been mentioned by a number of hon. Members, and it is the aluminium smelter. I mention it because it is now a matter of public discussion, although I will not embark on a lengthy discussion with hon. Gentlemen opposite who, I believe, were basically directing their questions to the subject of what should be the electricity supply pricing policy in this country rather than to the actual case for the smelter.
It may be appropriate to use these powers in the case of aluminium smelting projects. This would surely be an illustration of the sort of case in which considerable advantage through import saving could accrue to the economy. It is not difficult to conceive other cases. For example, firms may be considering investing in projects capable of leading to increased exports, but depending on the application of largely new and un-
1686
tried ideas and processes. My hon. Friend the Member for Billericay (Mr. Moonman) was right to emphasise that not always new projects but new processes are often the things that matter.
Firms may not always have sufficient resources to back their own judgment and put these schemes into effect. The market may not share a firm's faith or be prepared to offer funds only at such high risk premium that the project will not be viable. Under present arrangements, projects like this would have to languish and valuable exports would be lost until investors became convinced of their merits. The country cannot afford to wait. We need increased exports now if we are to make full use of the opportunities we have.
I have tried to put what I would call the basic case for the Bill.
Mr. J. H. Osborn: Can the hon. Gentleman say whether or not viable propositions have been put up? If they have been, what is the need for money under this scheme or any other scheme for aluminium smelting?
Mr. Shore: Propositions, as the hon. Member knows, have been considered by the I.R.C. for aluminium smelters. The matter is still under consideration and a statement will be made at the appropriate time. I am afraid that the hon. Member cannot press this any further now.
Having outlined the basic strength of the case, I turn now to the objections. First there are those—and it was interesting to see that they were not very numerous today—who are quite passionate non-interventionists. Some hon. Members, only a few, think the Government have no business to assist industry at all. Those who have those views are clearly not attuned to the thinking of the Front Bench opposite. I refer to them as an extreme school of thought, perhaps the Wolverhampton school of thought. I need not spend time in refuting it.
The second argument I have to deal with is the one I expected to hear a great deal about. It is the argument about equity shares. It is necessary to put this into perspective. This is only one of a number of ways in which the Bill will enable us to give financial assistance to industry. These will include loans, grants. guarantees, the underwriting of losses,

1687
convertible debentures and, of course, preference and equity shares. It is a very broad spectrum indeed. In each case the form of support given will be discussed with the companies concerned and will be determined with their agreement according to their particular circumstances.
Why do we think it would be wrong to exclude equity shareholding? I say "wrong" as the C.B.I. and others have urged us to exclude equity shareholding from this range of financial powers. I will give my reasons. First, because it will make sense to many of the companies concerned that we are prepared to invest in equity. Why indeed do companies issue equity shares? Because of the greater flexibility which they gain in relation to the servicing of capital. To hear some hon. Members opposite speak one would conclude that there was something unnatural and abnormal for companies to rely upon equity financing when it is of course very common indeed. There are some projects which firms will find it much easier to go ahead with if financial assistance takes this form rather than the obligation to repay fixed interest loans.
In Committee on the Shipbuilding Industry Bill on 11th April, 1967, the hon. Member for Dorset, West (Mr. Wingfield Digby), speaking for the Opposition on a similar Clause—that Bill also gave the Minister power to subscribe to equity shares—made this point:
"I concede at once that there may be cases in which it would be to the advantage of a company to make over a certain number of shares in which there might or might not be a dividend—probably in the present state of the industry a small one—rather than to pay fixed interest."
I think that is right.
The second reason why I think it would be wrong to exclude equity is that equity arrangements can benefit the public purse by giving a higher return. This is certainly right when the taxpayers' money is being used to bear the risk of investment. The House will recall a very wise investment which was made just before the First World War in the equity of the Anglo-Iranian Oil Company under a Liberal Government. The market value of that very modest investment is today £530 million. Its dividend revenue to the
1688
Exchequer is £24 million in 1967 and the cumulative total which the Exchequer has received is £260 million since the original investment was made. I welcome this and I should have thought that any reasonable person would welcome it as well.
Mr. Emrys Hughes: Is the Minister aware that this had the very strong support of Sir Winston Churchill?
Mr. Shore: I am indeed. I am also aware that a very well known Conservatitve Prime Minister of the day, Disraeli, also invested in shares in another project, the Suez Canal. It would be wrong for the Government to ignore this aspect. While it is true that public money successfully invested in projects to the national advantage will benefit the whole community it is also true that as a consequence in these cases substantial rewards will accrue to equity owners. It would be wrong for the Government, depending of course on the particular circumstances, not to get the best possible return for the taxpayer. [Interruption]
Mr. Speaker: Order. If the hon. Member for Peterborough (Sir Harmar Nicholls) wishes to intervene, he must seek to intervene deliberately.
Sir Harmar Nicholls: On a point of order, Mr. Speaker. In the traditional way, I was trying to catch the Minister's eye to get him to concede me the Floor.
Mr. Shore: I am much more inclined, Mr. Speaker, to give way to hon. Members who have been attending the debate. There are many who have attended it and who have put good questions to me.
My hon. Friend the Member for Salford, West (Mr. Orme) welcomed the Bill and wanted it used for the extension of public ownership in industry. I can only say to him, as my right hon. Friend said earlier, that this is to misconceive the purpose of the Bill. When this Government feel that it is right to extend the public sector through an act of nationalisation or through a major extension of the public sector—the existing nationalised industries—they will certainly come to the House and ask for such powers. We have already had a number of measures, as the House will

1689
recall, but I think that it would be a mistake to mix up these entirely different purposes.
Some hon. Members opposite have asked, "Do you really need new powers? Why not work through the I.R.C. and the N.R.D.C.?"
Sir K. Joseph: And by the Government's power as buyer.
Mr. Shore: These are powers that the Government have. The answer is that tie main purposes of the I.R.C. and the N.R.D.C. do not cover the whole range of the Bill. The primary purpose of the N.R.D.C. is to support the development or exploitation of inventions and the promotion of research. It is no part of the Corporation's functions to promote industrial efficiency as such or to expand productive capacity, at any rate where the element of invention or novelty may not be a factor. Similarly, the main purpose of the I.R.C. is to promote structural change in industry. The I.R.C. has power, at my request, to establish or develop an individual firm, but it was never envisaged that the Corporation would make extensive use of the power. As the House will recall from my earlier remarks. I envisage a situation in which an industry board would be the agency through which Government assistance should be given. It is very difficult indeed to see how the I.R.C. could be adapted to this purpose.
I turn now to what I consider to be in many ways the most important of the many objections that have been raised to the Bill. This is the fear of unfair discrimination—[Interruption]
Mr. Speaker: Order. No hon. Member can address the House against a background of conversation.
Mr. Shore: It is the fear of discrimination, that the Government will discriminate unfairly between individual firms within an industry. This fear can be exaggerated. My right hon. Friend pointed out earlier that the placing of R and D contracts with individual firms has operated very fairly and successfully for many years without constant complaints of discrimination, and the purpose of the Bill is to see that nationally desirable projects are carried through, not to take over and specially favour particular companies.
1690
I resent—I am sure that hon. Members on both sides of the House will join me in this feeling—what the hon. Member for Leeds, North-East said about log rolling, political pressure and, indeed, corruption. Of course it is true that any large organisation which is equipped with substantial funds is an object for pressure of one kind or another. However, the suggestion that, because the Government, local authorities, nationalised industries or large firms have the power to spend, the people who are in control of them bend to this pressure and use their powers in an arbitrary and corrupt way is far-fetched and is in one sense very derogatory to the House of Commons.
Sir K. Joseph: Does not the right hon. Gentleman recall that, shortly after the Minister of Technology had opened the debate, his hon. Friend the Member for Newcastle-upon-Tyne, West (Mr. Bob Brown) threatened the Government that the North-West members of his party would not forgive the Government if the powers under the Bill were not used to help the North-West Region?
Mr. Shore: I know what my hon. Friend's concern is, and it is a perfectly legitimate concern. My hon. Friends, including my hon. Friend the Member for Glasgow, Scotstoun (Mr. Small), are concerned that the powers of selective intervention under this Bill and under other Measures should, when they are used, have regard to the needs of the less fortunate regions of this country. I have no objection to that whatever. Indeed, both the I.R.C. and the N.R.D.C. have been asked constantly to bear this in mind when taking the decisions which come within their purview.
In conclusion, I shall put the Bill in the general context of Government policy. Since we came to power three years ago, our central concern has been to help the modernisation and re-equipment of British industry. There are many factors involved. Undoubtedly, investment is the key. This Bill should be seen, therefore, as part of a programme of measures designed to promote investment in British industry.
Our aim is not just to increase investment, although this is necessary. We want also to be able to influence its timing,

1691
its geographical location and, selectivity, its application to points of the greatest national advantage. As regards timing, we have a new instrument in the investment grant, which can be used, as it was in November. 1966, when the rate was increased, to sustain investment when there is a temporary downturn in demand in the economy.
For the location of investment, we now have a panoply of measures—the Local Employment Act and the Industrial Development Act, which includes the differential investment grant. For the encouragement of investment at the points of greatest national advantage, we have the I.R.C. and the N.R.D.C., and we shall soon have the additional capability provided by this Bill.
Most of these measures arc of recent origin, but there is already evidence of their success. It is now clear, some 18 months after the Measures of July, 1966, that we have not had at the end of 1967 that collapse in industrial investment which was such a painful feature of 1962,
about 18 months after the Measures introduced by the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd). Further, the signs are that investment now is on an upward trend for 1968, whereas in 1963 it was plunging still further down.
With the Industrial Expansion Bill, the I.R.C. and an enlarged N.R.D.C., we shall at last have a substantial and flexible capability to help us and industry to get on with the job of building a strong economy, for which we were elected.
Mr. Peter Emery Mr. Peter Emery (Honiton) rose——
Mr. Charles Grey (Treasurer of Her Majesty's Household)Mr. Charles Grey (Treasurer of Her Majesty's Household) rose in his place and claimed to move, That the Question be now put.
Question, That the Question be now put, put and agreed to.
Question put accordingly, That the Bill be now read a Second time:—
The House divided: Ayes 299, Noes 231.

Division No. 38.]

AYES

[10.0 p.m.

Abse, Leo

Coe, Denis

Ford, Ben

Albu, Austen

Concannon, J. D.

Forrester, John

Allaun, Frank (Salford, E.)

Conlan, Bernard

Fowler, Gerry

Alldritt, Walter

Corbet, Mrs. Freda

Fraser, John (Norwood)

Allen, Scholefield

Craddock, George (Bradford, S.)

Freeson, Reginald

Anderson, Donald

Crawshaw, Richard

Galpern, Sir Myer

Archer, Peter

Cronin, John

Gardner, Tony

Armstrong, Ernest

Crossman, Rt. Hn. Richard

Garrett, W. E.

Atkins, Ronald (Preston, N.)

Cullen, Mrs. Alice

Ginsburg, David

Atkinson, Norman (Tottenham)

Darling, Rt. Hn. George

Gordon Walker, Rt. Hn. P. C.

Bacon, Rt. Hn. Alice

Davidson, Arthur (Accrington)

Gray, Dr. Hugh (Yarmouth)

Bagier, Gordon A. T.

Davies, Dr. Ernest (Stretford)

Greenwood, Rt. Hn. Anthony

Barnes, Michael

Davies, G. Elfed (Rhondda, E.)

Gregory, Arnold

Barnett, Joel

Davies, Ednyfed Hudson (Conway)

Grey, Charles (Durham)

Baxter, William

Davies, Harold (Leek)

Griffiths, David (Rother Valley)

Beaney, Alan

Davies, Ifor (Gower)

Griffiths, Rt. Hn. James (Llanelly)

Bellenger, Rt. Hn. F. J.

Delargy, Hugh

Griffiths, Will (Exchange)

Bence, Cyril

Dell, Edmund

Gunter, Rt. Hn. R. J.

Benn, Rt. Hn. Anthony Wedgwood

Dempsey, James

Hamilton, James (Bothwell)

Bennett, James (G'gow, Bridgeton)

Dewar, Donald

Hamilton, William (Fife, W.)

Bidwell, Sydney

Diamond, Rt. Hn. John

Hamling, William

Binns, John

Dickens, James

Hannan, Willam

Bishop, E. S.

Dobson, Ray

Harper, Joseph

Blackburn, F.

Doig, Peter

Harrison, Walter (Wakefield)

Boardman, H.

Dunn, James A.

Hasetdine, Norman

Boston, Terence

Dunnett, Jack

Hattersley, Roy

Bottomley, Rt. Hn. Arthur

Dunwoody, Mrs. Gwyneth (Exeter)

Hazell, Bert

Boyden, James

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

Heffer, Eric S.

Braddock, Mrs. E. M.

Eadie, Alex

Henig, Stanley

Bradley, Tom

Edwards, Rt. Hn. Ness (Caerphilly)

Herbison, Rt. Hn. Margaret

Bray, Dr. Jeremy

Edwards, William (Merioneth)

Hilton, W. S.

Broughton, Dr. A. D. D.

Ellis, John

Hooley, Frank

Brown, R. Hn. George (Belper)

English, Michael

Houghton, Rt. Hn. Douglas

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

Ennals, David

Howarth, Harry (Wellingborough)

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

Evans, Albert (Islington, S.W.)

Howarth, Robert (Bolton, E.)

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

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

Howell, Denis (Small Heath)

Buchan, Norman

Fernyhough, E,

Howie, W

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

Finch, Harold

Hoy, James

Butler, Herbert (Hackney, C.)

Fletcher, Raymond (llkeston)

Huckfield, Leslie

Butler, Mrs. Joyce (Wood Green)

Fletcher, Ted (Darlington)

Hughes, Rt. Hn. Cledwyn (Anglesey)

Callaghan, Rt. Hn. James

Foley, Maurice

Hughes, Emrys (Ayrshire, S.)

Carter-Jones, Lewis

Foot, Sir Dingle (Ipswich)

Hughes, Hector (Aberdeen, N.)

Castle, Rt. Hn. Barbara

Foot, Michael (Ebbw Vale)

Hughes, Roy (Newport)

Hunter, Adam

Mayhew, Christopher

Rose, Paul

Hynd, John

Mellish, Robert

Ross, Rt. Hn. William

Irvine, Sir Arthur

Mendelson, J. J,

Rowlands, E. (Cardiff, N.)

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

Mikardo, Ian

Ryan, John

Jackson, Peter M. (High Peak)

Millan, Bruce

Shaw, Arnold (llford, S.)

Janner, Sir Barnett

Miller, Dr. M. S.

Shinwell, Rt. Hn. E.

Jay, Rt. Hn. Douglas

Milne, Edward (Blyth)

Shore, Peter (Stepney)

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

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

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

Jenkins, Hugh (Putney)

Molloy, William

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

Jenkins, Rt. Hn. Roy (Stechford)

Moonman, Eric

Silkin, Rt. Hn. John (Deptford)

Johnson, Carol (Lewisham, S.)

Morgan, Elystan (Cardiganshire)

Silverman, Julius (Aston)

Jones, Dan (Burnley)

Morris, Alfred (Wythenshawe)

Skeffington, Arthur

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

Morris, John (Aberavon)

Slater, Joseph

Jones, J. Idwal (Wrexham)

Moyle, Roland

Small, William

Jones, T. Alec (Rhondda, West)

Mulley, Rt. Hn. Frederick

Snow, Julian

Judd, Frank

Murray, Albert

Spriggs, Leslie

Kelley, Richard

Neal, Harold

Steele, Thomas (Dunbartonshire,W.)

Kenyon, Clifford

Newens, Stan

Stewart, Rt. Hn. Michael

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

Oakes, Gordon

Stonehouse, John

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

Ogden, Eric

Strauss, Rt. Hn. G. R.

Kerr, Russell (Feltham)

O'Malley, Brian

Swain, Thomas

Lawson, George

Orbach, Maurice

Swingler, Stephen

Leadbitter, Ted

Orme, Stanley

Taverne, Dick

Ledger, Ron

Oswald, Thomas

Thomas, George (Cardiff, W.)

Lee, Rt. Hn. Jennie (Cannock)

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

Thomson, Rt. Hn. George

Lestor, Miss Joan

Owen, Will (Morpeth)

Thornton, Ernest

Lever, Harold (Cheetham)

Padley, Walter

Tinn, James

Lewis, Arthur (West Ham, N.)

Paget, R. T.

Tomney, Frank

Lipton, Marcus

Palmer, Arthur

Tuck, Raphael

Lomas, Kenneth

Panned, Rt. Hn. Charles

Urwin, T. W.

Loughlin, Charles

Park, Trevor

Varley, Eric G.

Luard, Evan

Parker, John (Dagenham)

Wainwright, Edwin (Dearne Valley)

Lyon, Alexander W. (York)

Parkin, Ben (Paddington, N.)

Walden, Brian (All Saints)

Lyons, Edward (Bradford, E.)

Parkyn, Brian (Bedford)

Walker, Harold (Doncaster)

Mabon, Dr. J. Dickson

Pavitt, Laurence

Wallace, George

McCann, John

Pearson, Arthur (Pontypridd)

Watkins, David (Consett)

MacColl, James

Peart, Rt. Hn. Fred

Watkina, Tudor (Brecon & Radnor)

MacDermot, Niall

Pentland, Norman

Weitzman, David

Macdonald, A. H.

Perry, Ernest G. (Battersea. S.)

Wellbeloved, James

McGuire, Michael

Perry, George H. (Nottingham, S.)

Wells, William (Walsall, N.)

McKay, Mrs. Margaret

Prentice, Rt. Hn. R. E.

Whitaker, Ben

Mackie,John

Price, Christopher (Perry Barr)

Wilkins, W. A.

Maclennan, Robert

Price, Thomas (Westhoughton)

Willey, Rt. Hn. Frederick

MacMillan, Malcolm (Western Isles)

Price, William (Rugby)

Williams, Alan Lee (Hornchureh)

McMillan, Tom (Glasgow, C.)

Probert, Arthur

Williams, Mrs. Shirley (Hitchm)

McNamara, J. Kevin

Pursey, Cmdr. Harry

Williams, W. T. (Warrington)

MacPherson. Malcolm

Randall, Harry

Willis, George (Edinburgh, E.)

Mahon, Peter (Preston, S.)

Rankin, John

Wilson, Rt. Hn. Harold (Huyton)

Mahon, Simon (Bootle)

Rees, Merlyn

Wilson, William (Coventry, S.)

Mallalieu, E. L. (Brigg)

Reynolds, G. W.

Winnick, David

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

Richard, Ivor

Woodburn, Rt. Hn. A.

Manuel, Archie

Roberts, Albert (Normanton)

Woof, Robert

Mapp, Charles

Roberts, Goronwy (Caernarvon)

Wyatt, Woodrow

Marks, Kenneth

Roberta, Gwilym (Bedfordshire, S.)

Yates, Victor

Marquand, David

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

Marsh, Rt. Hn. Richard

Robinson, W. 0. J. (Walth'stow, E.)

TELLERS FOR THE AYES:

Mason, Roy

Roebuck, Roy

Mr. Harry Gourlay aud

Maxwell, Robert

Rogers, George (Kensington, N.)

Mr. Neil McBride.

NOES

Alison, Michael (Barkston Ash)

Brinton, Sir Tatton

Crowder, F. p.

Astor, John

Bromley-Davenport,Lt.-Col. Sir Walter

Cunningham, Sir Knox

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

Brown, Sir Edward (Bath)

Currie, G. B. H.

Awdry, Daniel

Bruce-Gardyne, J.

Dalkeith, Earl of

Baker, W. H. K.

Bryan, Paul

Dance, James

Balniel, Lord

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

Davidson,James(Aberdeenshire,W.)

Batsford, Brian

Buck, Antony (Colchester)

d'Avigdor-Goldsmid, Sir Henry

Beamish, Col. Sir Tufton

Bullus, Sir Erie

Dean, Paul (Somerset, N.)

Bell, Ronald

Burden, F. A.

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

Bennett, Sir Frederic (Torquay)

Campbell, Gordon

Doughty, Charles

Bennett, Dr. Reginald (Gos. & Fhm)

Carlisle, Mark

Drayson, G. B.

Berry, Hn. Anthony

Carr, Rt. Hn. Robert

du Cann, Rt. Hn. Edward

Biffen, John

Channon, H. P. G.

Eden, Sir John

Biggs-Davison, John

Chichester-Clark, R.

Elliot, Capt. Walter (Carshalton)

Birch, Rt. Hn. Nigel

Clark, Henry

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

Black, Sir Cyril

Clegg, Walter

Emery, Peter

Blaker, Peter

Cooke, Robert

Errington, Sir Eric

Boardman, Tom

Cooper-Key, Sir Neill

Farr, John

Body, Richard

Cordle, John

Fisher, Nigel

Bossom, Sir Clive

Corfield, F. V.

Fleteher-Cooke, Charles

Boyle, Rt. Hn. Sir Edward

Costain, A. P.

Fortescue, Tim

Braine, Bernard

Craddock, Sir Beresford (Spelthorne)

Foster, Sir John

1694

1695

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

Lane, David

Rawlinson, Rt. Hn. Sir Peter

Galbraith, Hon. T. G.

Langford-Holt, Sir John

Rees-Davies, W. R.

Gibson-Watt, David

Legge-Bourke, Sir Harry

Renton, Rt. Hn. Sir David

Giles, Rear-Adm. Morgan

Lewis, Kenneth (Rutland)

Ridley, Hn. Nicholas

Gilmour, Ian (Norfolk, C.)

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

Ridsdale, Julian

Gilmour, Sir John (Fife, E.)

Lloyd, Ian (Portsm'th, Langstone)

Rippon, Rt. Hn. Geoffrey

Glover, Sir Douglas

Lloyd, Rt. Hn. Selwyn (Wirral)

Robson Brown, Sir William

Glyn, Sir Richard

Longden, Gilbert

Rodgers, Sir John (Sevenoaks)

Godber, Rt. Hn. J. B.

Loveys, W. H.

Rossi, Hugh (Hornsey)

Goodhart, Philip

Lubbock, Eric

Royle, Anthony

Goodhew, Victor

McAdden, Sir Stephen

Russell, Sir Ronald

Gower, Raymond

MacArthur, Ian

Scott, Nicholas

Grant, Anthony

Mackenzie, Alasdair(Ross&Croma'ty)

Scott-Hopkins, James

Grant-Ferris, R.

Maclean, Sir Fitzroy

Sharples, Richard

Gresham Cooke, R.

Macleod, Rt. Hn. lain

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

Grieve, Percy

McMaster, Stanley

Silvester, Frederick

Grimond, Rt. Hn. J.

Maddan, Martin

Sinclair, Sir George

Gurden, Harold

Maginnis, John E.

Stainton, Keith

Hall, John (Wycombe)

Marples, Rt. Hn. Ernest

Steel, David (Roxburgh)

Hamilton, Marquess of (Fermanagh)

Marten, Neil

Stodart, Anthony

Hamilton, Michael (Salisbury)

Maude, Angus

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

Harris, Frederic (Croydon, N.W.)

Maudling, Rt. Hn. Reginald

Summers, Sir Spencer

Harris, Reader (Heston)

Mawby, Ray

Tapsell, Peter

Harvey, Sir Arthur Vere

Maxwell-Hyslop, R. J.

Taylor, Sir Charles (Eastbourne)

Harvie Anderson, Miss

Mayden, Lt.-Cmdr. R. J.

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

Hastings, Stephen

Mills, peter (Torrington)

Taylor, Frank (Moss Side)

Hawkins, Paul

Mills, Stratton (Belfast, N.)

Teeling, Sir William

Hay, John

Miscampbell, Norman

Temple, John M.

Heald, Rt. Hn. Sir Lionel

Mitchell, David (Basingstoke)

Thatcher, Mrs. Margaret

Heath, Rt. Hn. Edward

Monro, Hector

Thorpe, Rt. Hn. Jeremy

Heseltine, Michael

Morgan, Geraint (Denbigh).

Tilney, John

Higgins, Terence L.

Morrison, Charles (Devizes)

Turton, Rt. Hn. R. H.

Hiley, Joseph

Mott-Radclyffe, Sir Charles

Van Straubenzee, W. R.

Hill, J. E. B.

Munro-Lucas-Tooth, Sir Hugh

Vaughan-Morgan, Rt. Hn. Sir John

Hirst, Geoffrey

Murton, Oscar

Wainwright, Richard (Colne Valley)

Hogg, Rt. Hn. Quintin

Nabarro. Sir Gerald

Walker, Peter (Worcester)

Holland, Philip

Neave, Airey

Walker-Smith, Rt. Hn. Sir Derek

Hordern, Peter

Nicholls, Sir Harmar

Wall, Patrick

Homby, Richard

Noble, Rt. Hn. Michael

Walters, Dennis

Howell, David (Guildford)

Nott, John

Ward, Dame Irene

Hunt, John

Onslow, Cranley

Weatherill, Bernard

Hutchison, Michael Clark

Orr, Capt. L. P. S.

Webster, David

Iremonger, T. L.

Orr-Ewing, Sir Ian

Wells, John (Maidstone)

Irvine, Bryant Godman (Rye)

Osborn, John (Hallam)

Whitelaw, Rt. Hn. William

Jenkin, Patrick (Woodford)

Osborne, Sir Cyril (Louth)

Wills, Sir Gerald (Bridgwater)

Jennings, J. C. (Burton)

Page, Graham (Crosby)

Wilson, Geoffrey (Truro)

Johnson, Smith G. (E. Grinstead)

Page, John (Harrow, W.)

Wolrige-Gordon, Patrick

Johnston, Russell (Inverness)

Pardoe, John

Wood, Rt. Hn. Richard

Jones, Arthur (Northants, S.)

Percival, Ian

woodnutt, Mark

Jopling, Michael

Peyton, John

Worsley, Marcus

Joseph, Rt. Hn. Sir Keith

Pike, Miss Mervyn

Wylie, N. R.

Kaberry, Sir Donald

Pink, R. Bonner

Younger, Hn. George

Kimball, Marcus

Powell, Rt. Hn. J. Enoch

King, Evelyn (Dorset, S.)

Price, David (Eastleigh)

TELLERS FOR THE NOES:

Kitson, Timothy

Prior, J. M. L.

Mr. Jasper More and Mr. Reginald Eyre.

Knight, Mrs. Jill

Quennell, Miss J. M.

Lancaster, Col. C. G.

Ramsden, Rt. Hn. James

Bill accordingly read a Second time and committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

ROYAL ASSENT
Mr. Speaker: I have to notify the House in accordance with the Royal Assent Act, 1967, that the Queen has signified Her Royal Assent to the following Acts:

1 Consolidated Fund Act 1968.

2. Provisional Collection of Taxes Act 1968.

3. Capital Allowances Act 1968.

INDUSTRIAL EXPANSION [MONEY]
Queen's Recommendation having been signified —
Motion made, and Question proposed,
That, for the purposes of any Act of the present Session to authorise the provision of financial support, pursuant to schemes laid before Parliament, for industrial projects calculated to improve efficiency, create, expand or sustain productive capacity or promote or support technological improvements, it is expedient to authorise the payment out of moneys provided by Parliament of

(a) expenditure under industrial investment schemes by authorities authorised by the said Act to make them, subject to the limitation that the aggregate amount of such expenditure (excluding expenditure in fulfilling guarantees of the payment of

1697
interest) shall not exceed £100 million or such greater amount not exceeding £150 million as may be provided by order;

(b) any expenditure of the Minister of Technology in connection with any committee appointed under the said Act to perform functions in relation to such schemes as aforesaid, and any expenses of any such committee or any body authorised by or under the said Act to perform functions in relation to such schemes or any such scheme;

(c) any expenditure of the Board of Trade, not exceeding £24 million, in making loans for purposes of or connected with the construction or introduction into service of the liner Queen Elizabeth 2;

(d) any increase in the sums so payable under the Shipbuilding Industry Act 1967 which is attributable to any provision of the said Act of the present Session raising to 420 million the limit on grants under section 3 of the said Act of 1967 or otherwise amending that section;

(e) any increase in the sums so payable under the Development of Inventions Act 1967 which is attributable to any provision of the said Act of the present Session raising to £50 million the limit on outstanding a ivances under section 7 of the said Act of 1967;

(f) any increase in the expenditure of any Minister or government department which is attributable to any provision of the said Act of the present Session amending or modifying the Ministry of Supply Act 1939 or section 1 of the Civil Aviation Act 1949;

and to authorise the payment into the Exchequer of any sums required to be so paid by the said Act of the present Session.— [Mr. Bent.)
Sir Keith Joseph: My hon. Friend the Member for Eastleigh (Mr. David Price) and I asked the Government to explain how the borrowing powers under the Bill fit into the assurance given to the International Monetary Fund that the borrowing powers would be kept under £1,000 million this year. We have had no answer, and we should like to have one. Secondly, we should like a completely clear picture about the implications of the total borrowing requirements of the Bill in the light of the ambiguity admitted by the Minister of Technology when we questioned him.
The Bill allows the Government to spend, not £100 million plus £50 million by affirmative Resolution, but £100 million, plus £50 million, plus £15 million, plus £1 million, plus £7 million for Cunard, plus £15 million under the Shipbuilding Industry Act, plus an unknown
1698
amount for Concorde. Would one of the Ministers tell us what the bill will add up to in total borrowing power—it is considerably more than £100 million on the face of it —and how it fits in with the assurance given to Mr. Schweitzer in the Letter of Intent?
The Minister of Technology (Mr. Anthony Wedgwood Benn): First, it makes no difference and does not modify the Letter of Intent sent by the Chancellor of the Exchequer. Secondly, the right hon. Gentleman said that I had admitted that there was an ambiguity. I did not. I drew attention to an error in a newspaper report about the Bill. There is no ambiguity in the Bill; it has been made absolutely clear.
The main part of the Bill sets a ceiling of £100 million which could be raised, if the House wished, by Order to £150 million. This section of the Bill provides for no expenditure whatsoever, but gives the Government the power to seek authority from the House for expenditure. That disposes of what one might call the industrial investment schemes.
On N.R.D.C., it raises the borrowing ceiling from £25 million to £50 million. Here one is talking not about a ceiling but, in real terms, about the rate of expenditure by N.R.D.C. which has been running at about £5 million a year. On the question of shipbuilding, it gives power to me, subject to the advice of the Shipbuilding Industry Board, to raise the amount of money for grants from £5 million to £15 million, but the rate of spend is what is involved. We shall discuss how this operates in Committee. The provision concerning Cunard similarly is for my right hon. Friend the President of the Board of Trade. Finally. there is Beagle.
Of all those items over and above the industrial investment schemes, each of which requires specific Parliamentary authority, one is talking about the £25 million for N.R.D.C., £15 million for shipbuilding and £24 million for Cunard and Beagle. This makes no difference to the letter of intent. It is conditioned by the rate of spend.
The right hon. Gentleman asked me about the Concorde financing. My answer must be the same as that which I gave in the House, namely, that when I am in a position to come forward with

1699
a Concorde Clause I shall make a statement to the House. There will be a separate Money Resolution covering that Clause, and I will deal with any questions about that when they arise.
Sir K. Joseph: May we have an assurance that the Committee stage will not be started until the House has had ample time to digest the Money Resolution and the information given by the Minister about Concorde? Surely we cannot have that in the middle of the Committee stage?
Mr. Benn: The right hon. Gentleman had an opportunity to raise that matter during the Second Reading of the Bill. I said to the House—and this has been widely known for some time—that the financing of Concorde would require legislative cover, that the negotiations and discussions about this have been going on, and that I was not in a position to table a Clause on the Concorde financing in the Bill but I should make a statement to the House and that the House would have an opportunity for a debate on the Money Resolution and the Clause would go forward to the Committee stage. I do not see why consideration of the Bill in Committee on the Clauses which do not concern Concorde can possibly be delayed by the fact that later there would be a discussion on the Concorde issue.
Dame Irene Ward: With regard to the borrowing powers being given and the vast sums of money involved, I gather that the Minister has undertaken to my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) that he will prepare some answers to questions which he has not been able to answer in the debate before the Committee stage is reached. Will he be in a position then to let us know what is to happen to the Consett Iron and Steel Company ——
Mr. Speaker: Order. That is not exactly on this Resolution.
Dame Irene Ward: No, I know that it is not.
Sir K. Joseph: With the leave of the House, we have had an assurance —
Mr. J. T. Price: On a point of order, Mr. Speaker. Is it in
1700
order for a multipilicity of speeches to be made from the two Front Benches? We are not in Committee.
Mr. Speaker: I am grateful for the hon. Gentleman's confirmation of Mr. Speaker's Ruling. A second speech is made by leave of the House. I think that the House would give it on this occasion.
Sir K. Joseph: By leave of the House, I press the Minister of Technology to give us an assurance that he will do his best to give the House the information about the Concorde before the Committee stage begins.
Mr. Benn: This is really a matter involving the business of the House [HON. MEMBERS: "By leave of the
House."]—by leave of the House, if the House wants an answer. I have said that I will bring it forward as soon as I am in a position to do so. But I could not accept that a discussion about the earlier Clauses of the Bill which do not concern Concorde could necessarily be affected by this other simultaneous discussion. If it were thought in Committee that it was a barrier, no doubt the right hon. Member for Leeds, North-East (Sir K. Joseph) would make a case for it in Committee.
Mr. Robert Cooke: I want to press the Government further on the Concorde Clause. What will happen if the Committee stage is concluded before the Government are ready with their financial proposals?
Mr. Speaker: Order. The Minister does not need the leave of the House if he wishes to speak.
Mr. Benn: If I may have the leave of the House again, the hon. Member for Bristol, West (Mr. Robert Cooke) is asking a question about the Money Resolution which is not before the House, namely, that which will accompany the Concorde Clause. In view of the doubt about the project which such a question raises, it is proper to say that it is our belief and intention that the Clause will be brought in time for the Committee stage of the Bill. I think that the hon. Gentleman has no reason to be anxious on that score.
Question put and agreed to.

AGRICULTURE
Select Committee on Agriculture to have power to appoint Sub-Committees aid to refer to such Sub-Committees any the matters referred to the Committee:
Every such Sub-Committee to have power to send for persons, papers and records, to sit notwithstanding any adjournment of the House, to adjourn from place to place, to report to the Committee from time to time, and to admit strangers during the examination of witnesses unless they otherwise order:
Three to be the Quorum of every such Sub-Comm ittee:
Committee have power to report from tirne to time the Minutes of the Evidence taken before such Sub-Committees and reported by them to the Committee:
During the present Session the Committee to have power to appoint persons with expert knowledge for the purpose of particular inquiries, either to supply information which is not readily available or
1702
to elucidate matters of complexity with in the committee's order of reference [Mr Crossman]

NATIONALISED INDUSTRIES
Motion made, and Question proposed,
That a Select Committee be appointed to examine the Report and Accounts of the Post Office and of Nationalised Industries established by Statute whose controlling Boards are appointed by Ministers of the Crown and whose annual receipts are not wholly or mainly derived from moneys provided by Parliament or advanced from the Exchequer. —[Mr. Gourlay.]
Amendment proposed, to leave out from "Industries" to the second "whose" and to insert "and other bodies in which the State has a controlling interest".—[Mr. Trevor Park.]—instead thereof.
Several Hon. Members Several Hon. Members rose—
It being after Ten o'clock, and objection being taken to further Proceeding, the debate stood adjourned.
Debate to be resumed Tomorrow.

CRAMLINGTON NEW TOWN
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Gourlay.]
10.25 p.m.
Mr. Edward Milne: It is my pleasure to raise the question of the future of Cramlington New Town. This is the third occasion on which I have been privileged to raise the question of Cramlington on an Adjournment debate. The first occasion was 13th December, 1962, following the then Government decision to schedule the area as a development district in the previous year. All concerned were awaiting the announcement of the siting of the first advance factory in the new town against the same background of extensive pit closures in South-East Northumberland that we are facing today.
It is pleasing to record that the firm of Wilkinson Sword, which subsequently occupied the advance factory, is now firmly established in the new town. It has extended into a factory of its own and now employs over 600 people, with the prospect of further expansion in the future.
Replying to the Adjournment debate at that time the Parliamentary Secretary to the Board of Trade pointed out that Cramlington New Town was a happy partnership between the local authorities and private enterprise builders and that it should become the focal point for economic and social growth in South-East Northumberland.
The second occasion when this matter was raised on an Adjournment debate by myself was on 10th June, 1964, when I pointed out to my hon. Friend's predecessor at the Ministry of Housing and Local Government that the local authorities in South-East Northumberland were engaged in the battle to attract industry while the then Government were still making up their minds whether the problem existed or not.
Because of its background history and development Cramlington is limited in the legislation that can be used to assist it. Great progress has been made, but tremendous difficulties lie ahead in the path of those who see the new town as the centre of activity to create full
1704
employment in the area and to introduce the social climate and amenities that go with it.
Part of the plan for the new town has been made necessary by the decline in the old basic industries. The potential of the area for future growth has been recognised for a long time. There is no need to stress the adaptable manpower, the excellent communications and all the other services and amenities that go to make for a thriving industrial community.
There are three main ways in which the Government can assist at present. There is, first, the New Towns Act. But this has already been rejected in the past and, quite frankly, there is little hope of operation now. However, something between this Act and the present situation would need to be operated by the present Government to deal with the difficulties that lie in front of us. There is also the Town Development Act and the Industrial Development Act. We have been greatly hampered by lack of understanding in Whitehall about the nature of the new towns project and the problems which confront us. If one was to ask the main way in which Government assistance could be given, it would be summed up in three words—more substantial grants—because lack of finance lies at the root of our problems.
To give my hon. Friend an illustration, the Northumberland County Council has 12 officials employed on building up
Cramlington, and they are doing an excellent job under difficult circumstances. But, as he knows from his own experience in the Department, something like 250 officials are employed on similar tasks in Scottish new towns of comparable size. There is a lack of arrangements for comprehensive assistance from the Government under the Acts which we have mentioned. Possibly following tonight's debate my hon. Friend could prevail upon his right hon. Friend the Minister responsible for the region to devote some of his time to this exercise.
Under the 1962 Agreement between Northumberland County Council and William Leech (Holdings) Ltd., the private developer agreed to pay the County Council a contribution of about £150 per acre for land owned and developed by the developers. I should like to see the Minister of Housing and

1705
Local Government carry out a full investigation into the cost of land at Cramlington, including the sale price and the resale p-ice, and I say that advisedly, because on record there are a number of instances of land having been sold and resold during the development of the town and the activities surrounding it.
The advantages to the County Council of having the assistance of private developers at a time when the Government were unwilling to recognise their existence under the New Towns Act can, of course, be recognised. There was little alternative facing the local authority at that time. But it is useful to observe that al the moment the selling price of houses in Cramlington New Town area is £250 more than that of similar houses in parts of the district around Cramlington. Whether this is a matter for the National Board for Prices and Incomes or for my hon. Friend's Ministry I would not care to say at this stage, but it certainly must be looked into.
In the brief time at my disposal I should like to give the House an idea of the immensity of the task facing the local authorities. Nothing at all in the way of grant has been paid on any of the local authority expenditure on roads, drainage and associated services, and the preliminary development costs of the industrial estates within the new town which the County Council have to meet amount to well over £4 million. The County Council's commitments for services, including schools, in the new town complex is about £7½ million.
Seaton Valley Urban District Council, a small council, whose officials and councillors have performed a Herculean task in tackling the problems created by the new town within their boundaries, has had to build an abnormal number of new houses in relation to the size of the authority and certainly well in excess of its own needs as an urban district council housing authority. It was a courageous decision on its part—in keeping with the Council's recent actions—to be possibly the first authority in Britain to implement the findings of the Maud Committee and to reorganise its departmental and committee structure, a factor which has been of immense assistance in the development of Cramlington. The Council's premises have had to be ex-
1706
tended to accommodate increased staff. In addition to all these matters and to the associated commitments, they are faced with an increase of 25 per cent. in the rents of post-war houses in the area and a cost of about £2 million to modernise their pre-war housing in order to bring it into line with other developments around it. As my hon. Friend can readily appreciate, we cannot build a new town —not to present-day standards—without bringing the rest of the area around it into line with the development that is taking place.
Further, in recent weeks, arising from the Government's announcements on the Coal Industry Act, and the further contraction of the mining industry, steps are being taken to bring Cramlington into a special development area. This is to be welcomed. The Board of Trade is to acquire a substantial part of the Nelson industrial estate, something which I believe ought to have been done in the mid-fifties or the early 'sixties at the latest, and so time is not on our side.
The decision to acquire has been taken, and decisions are now in the course of being taken to secure the transfer of the land. The difficulties encountered since the new town first emerged were never seriously tackled because of the complicated nature of the present arrangements, and the lack of decision on the question of the legislative power and the Government grant can well delay to a dangerous extent the progress of this ambitious project.
Linked with the past difficulties of Cramlington New Town, is the rôle that it has to play in tackling the new problems of the years between now and 1970. In this Adjournment debate I am asking for Government action now. There is an urgent need to accelerate the development of Cramlington. The financial burden on the local authority is tending to retard its growth, and the need for immediate and continuing substantial financial support from the Government is overwhelming.
Industrially, the town is well on its way to success, despite the hard roads that undoubtedly lie ahead, but the town centre developments and amenities have not kept pace with this development. The Postmaster-General, who knows the area

1707
well, has promised to look into the needed improvements in the Post Office and telephone services, and we look forward to results in this field in the near future. I am grateful to my right hon. Friend for the interest that has been shown in this aspect of the development.
The relationship between the industrialists who have occupied factories on the site in the new town, and the local authorities and other bodies concerned, has been a very hapy one. An Industrial Services Committee, under the chairmanship of the Clerk of the Seaton Valley Urban District Council has done an excellent job in co-ordinating the needs of industrialists who have moved in, and of assessing the needs 'and demands of those who are considering moving to Cramlington.
I should like to see the Ministry of Housing and Local Government and other Ministries concerned playing a stronger and more influential part in the committees dealing with various developments in and around the new town. I would suggest a co-ordinating committee of the various Government Departments.
I want to pay tribute to the Government Department on the site in the region for the excellent way in which it is tackling the problems confronting the town. The Board of Trade officials and others are doing an excellent job. More is still required to be done. The coordinating committee that we have suggested would be made up of the Department of Economic Affairs, the Board of Trade, the Ministry of Housing and Local Government, the County Council and the Seaton Valley Urban District Council, the neighbouring local authorities of Blyth, Bedlington and Longbenton, as well as others, with support from the Regional Economic Planning Council and the North-East Development Council.
If this were tackled vigorously and early, we would be well on the way to turning Cramlington into the success it deserves to be and would bring to this part of Northumberland the security of employment to which its past industrial endeavours entitle it. We ask this not just because we think that the new town's success is essential for the Northern Region and Britain's economic future but because we believe that the Government's
1708
policies are on trial here and that on the success of our efforts will depend their success throughout the country.
10.41 p.m.
Dame Irene Ward: I associate myself with the remarks of the hon. Member for Blyth (Mr. Milne) about the problems of Cramlington. They have for a long time caused great anxiety to all of us who wish our part of the world and Cramlington a successful future. The time has come for us to be told what assistance can be given. The trouble with Adjournment debates is that, after the case has been excellently put, the Ministers reply, and although they are as helpful as possible, there is little opportunity for a progress report. The hon. Member said that this was the third time he had raised the matter on the Adjournment, which proves that, in view of the reform of Government machinery which is in the air, it would be helpful to know when we could have a proper progress report.
I should have thought that the Minister with special responsibilities for the North could have been here to hear the hon. Gentleman's speech. As the Chairman of the Regional Economic Planning Council occasionally says that he is frustrated—meaning either that he has not enough to do or does not get the response to what he does he could move forward on this issue. I hope that the Parliamentary Secretary will not just develop the smaller point but will assure us that, before long, the appropriate Minister will give us a detailed account of how, in regard to Cramlington, which is associated with my constituency and particularly with Whitley Bay, we can continue the good work done by so many people over the past few years.
10.44 p.m.
The Joint Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. James MacColl): Everyone would agree that Cramlington is an interesting experiment of enormous value to the North-East which everyone wants to see advance from success to success, but, as my hon. Friend the Member for Blyth (Mr. Milne) very fairly said, it is, as it started, a happy partnership between local authorities and private enterprise.
It is not the Government's responsibility, and it is not for the Government

1709
to make a report about its progress. If we tried to do that, the hon. Lady the Member for Tynemouth (Dame Irene Ward) would be the first to complain about fussy bureaucrats from Whitehall interfering. We are anxious to do all we can to help, but the local authority would be the first to say that it is its responsibility, and it is certainly not likely to be backward in pushing ahead with requests and pressing us on matters which worry it. We in the Department have been in regular touch with them about progress, so I assure my hon. Friend that there is no failure of communication.
One element of complication in this interesting partnership between the local authorities and private enterprise is shown in the case of the town centre, which is supposed to be financed by the private developers. It is, therefore, they who must take the main initiative in going ahead with it. The other interesting, but confusing, aspect is that Cramlington is partly an overspill arrangement to meet the overspill from the conurbation of Tyneside, but partly also a growth area—as my hon. Friend put it, a special development area for the development of industry to help to meet some of the stains on the economy of the area and to help to provide employment. My hon. Friend rightly attaches importance to this and it is fair to say that already the Government have been doing quite a lot and that this is working well.
My hon. Friend mentioned the fortunate and happy history of Wilkinson's. This has been a tremendous asset to the area. The Board of Trade is taking over an industrial site, although my hon. Friend scolded the Government for not having done that in the 'fifties and early 'sixties. I was not, governmentally, about then. However, since my right hon. Friend has been responsible, we have taken steps to move in and already about 2,500 jobs have been provided by I.D.C.s and a further 5,000 jobs have been approved by the granting of I.D.Cs. That is a comforting side to the really important industrial foundations of the town.
The confusion between these two sides —the overspill and the growth area—comes in in almost every respect on this financial question. That is one of the reasons why it is so difficult to assess quickly what help can be given. On
1710
the straightforward housing side, we have now got far and away the biggest and most flexible subsidy for housing that has ever been available from the central Government to a local authority. It is geared to the rate of interest and adaptable to increases in costs. It is far greater than the block subsidy—the fixed payment—which was available before the passage of the 1967 Act.
In addition, there is for overspill families an Exchequer contribution of £12 for 10 years, accompanied by matching contributions from the sending authorities designated under Section 9 of the Act. The difficulty is to know how many of the people going in are overspill, and that must be watched.
My hon. Friend referred to sewerage. A 50 per cent. grant is available under the Town Development Act and a grant is available under the Local Employment Act, 1960. But those depend on the size of the overspill and how far the expenditure is directly linked with industry. That, too, must be watched.
I appreciate my hon. Friend's anxiety about roads. This is a difficult problem. The county has a great responsibility in this direction and I appreciate how it is financially stretched. There are, however, grants. There is still the specific grant of 75 per cent. for principal roads. and estate roads are likely to count for grant under the Local Employment Act.
In a Bill which had a Second Reading only yesterday there is a proposal for a small but useful contribution. Exchequer contributions can be made to district councils doing town development schemes towards providing buildings for social, cultural or recreational purposes. There is also the possibility of a grant for town centre redevelopment under the Local Government Act, 1966. Out of this patchwork there emerges a fairly consistent system for helping in these ways. I agree that the position needs to be watched. My right hon. Friend will be anxious to know of the problems and will not close his mind to what can be done. This is not the best time to press for increased grants, but this matter will be borne in mind.
My hon. Friend enumerated the people who would have to be considered in regard to a co-ordinating committee for the administration of the town. This

1711
showed the complication of the operations, but it is a matter for the local authority to make up its mind about any addition to its responsibility. He also referred to the very distinguished Clerk of the Urban District Council, whom I know well. He has made great contributions to his field of local government. He is perfectly capable of taking initiative and advising the Council.
Mr. Milne: While tributes have rightly been paid to the Clerk of the Council, his efforts need Government backing if they are to have the success they deserve.
Mr. MacColl: I am sure he will not be backward in coming forward. If necessary, he will come to us with specific proposals. No doubt the local authorities which have undertaken this historic experiment, which is something we watch with care, must be worried. They have
1712
great financial burdens and are worried about the future. On the other hand, they have resources and the skill of men to do a very good job in the North-East towards providing growth and new life for a new community of enormous value.
I do not think it likely that we can apply new towns procedure because the new towns programme is already fixed. Town development arrangements are available and I have enumerated examples of the kind of assistance that can be given. The answer to this problem is a continuation of the very close friendly co-operation between my Department and the local authorities under the vigorous supervision of my hon. Friend who is so fervent in carrying out his duties.
Question put and agreed to.
Adjourned accordingly at six minutes
to Eleven o'clock.

EDUCATION AND SCIENCE
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  Sport
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  School Meals
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  Schools, Shropshire (Building Programme)
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  The Arts
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HOME DEPARTMENT
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  Immigrants
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  Quinine
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  After-Care (Voluntary Service)
  Police
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ECONOMIC AFFAIRS
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POST OFFICE
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WIRELESS AND TELEVISION
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NATIONAL FINANCE
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ROADS
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MINISTRY OF LABOUR
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MINISTRY OF DEFENCE
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HOSPITALS
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HEALTH
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BOARD OF TRADE
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TECHNOLOGY
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  EUROPEAN ECONOMIC COMMUNITY
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AGRICULTURE, FISHERIES AND FOOD
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WALES
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OVERSEAS DEVELOPMENT
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MINISTRY OF POWER
  Cables
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Preamble
The House met at three of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Chester.

GREECE: U.K. RECOGNITION AND PRISONERS' TREATMENT
3.6 p.m.
LORD MILFORD: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government how they reconcile their resumption of normal relations with the Greek Junta with the statement of the Parliamentary Under-Secretary of State at the Foreign Office that, "There is reason to believe that the treatment of some prisoners has been excessive even by local standards, which are not the same as ours ".]
THE MINISTER OF STATE FOR FOREIGN AFFAIRS (LORD CHALFONT): My Lords, the fact that we have dealings with a Government in no way implies that we approve of its policies.
LORD MILFORD: My Lords, while thanking the noble Lord for his Answer, may I ask whether he would consider that recognition weakens the struggle of all those organisations, political parties and individuals fighting for full democracy in Greece?
LORD CHALFONT: No, my Lords, I cannot agree with that. The Greek Government meet our criteria for recognition, and indeed no formal act of recognition was requested or made. It is the view of Her Majesty's Government that the best way of exerting influence upon foreign Governments is to have diplomatic relations with them.
LORD CONESFORD: My Lords, can the Minister state how the conduct complained of in this Question compares with the treatment of literary men in Russia?
LORD CHALFONT: My Lords, I think that is well outside the context of the original Question.
LORD GIFFORD: My Lords, may I ask the noble Lord whether, in view of the reports that have come out of Greece, and in particular the horrifying reports of the representatives of Amnesty International about the ill-treatment of prisoners, the Government will see that this matter is raised in the Council of Ministers and the Council of Europe, and in the North Atlantic Treaty Organisation? May I remind him that these organisations are pledged to defend human rights and freedoms?
LORD CHALFONT: My Lords, I take note of what my noble friend has said, but I think really this is an instance where the best way in which we can operate is to make representations, which we hope will be effective representations, to the Greek Government, and we will do that through the normal diplomatic channels.
LORD MILFORD: My Lords, will the noble Lord reassure us that recognition does not in any way diminish Her Majesty's Government's disapproval of the actions and policies of the military junta? And will the noble Lord tell us what steps have been taken, and will be taken, by Her Majesty's Government to press for the full implementation of the amnesty promised before Christmas, and full democracy in Greece?
LORD CHALFONT: My Lords, I think the first part of that question was answered in my Answer to the noble Lord's original Question. The fact that we have dealings and diplomatic relations with a Government in no way implies approval of its policies. So far as the second part of the question is concerned, we will, of course, make all the necessary representations through our diplomatic channels.
BARONESS GAITSKELL: My Lords, will the Minister agree that it would be difficult to base our diplomatic relations on reports of Amnesty International, seeing that there was a report of Amnesty about Aden which was very detrimental to our own Government? Also, does not the noble Lord think it would be a bad thing if the countries involved had stopped diplomatic relations?
LORD CHALFONT: My Lords, I am grateful to the noble Baroness for that intervention. As I said earlier, whatever reports may have been made from other quarters, the Greek Government fully meets our criteria for diplomatic recognition.
LORD FARINGDON: My Lords, is my noble friend aware that this excuse, that by entering into a relationship with an offensive Government one can to some extent mitigate—or is in a better position to mitigate—the badness of their behaviour, is an excuse which we have heard time and time again but, to my knowledge, has never been effective?
LORD CHALFONT: My Lords, I am sorry if the noble Lord feels that way about diplomatic relations. I can only say that the Government believe—and perhaps I might add that I personally believe—that if we are to have an effective foreign policy, and if we are to make effective representations to other Governments, especially if there are aspects of their policies about which we have reservations, the only sensible thing to do is to see that we are not in a situation in which we cannot speak to them. It is for that reason that we have diplomatic relations.
LORD WAKEFIELD or KENDAL: My Lords, would the noble Lord explain why a resumption of negotiations and recognition of the Government of Rhodesia has not been effected, in view of what has just been said? Would it not be far better to recognise that illegal but de facto Government in the same way as has been done in Greece?
LORD CHALFONT: My Lords, I think that question is about as far from the content of the original Question as Rhodesia is from Greece.

ARMED FORCES REORGANISATION
3.12 p.m.
LORD THURLOW: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government when the White Paper on the proposed changes in the role, size and shape of the Forces, referred to by the Prime Minister in paragraph 18 of Cmnd. 3515, will be published.]
THE LORD PRIVY SEAL (LORD SHACKLETON): My Lords, the decisions taken by Her Majesty's Government on defence, which were announced on January 16, will result in major changes in the role, size and shape of the Forces, their equipment and supporting facilities, and it will take some time to plan all this in detail. It will not, therefore, be possible to deal with more than the broad implications of these changes in the Statement on the Defence Estimates 1968, which will be published later this month, but a Supplementary Statement, in which progress will be reported, will be presented later in the year.
LORD THURLOW: My Lords, I am grateful to the noble Lord for that Answer. May I ask whether he is aware that there is growing apprehension throughout the Services about the coming cuts, so that it is important that the Government's proposals as to amalgamations and reductions should be made as soon as possible?
LORD SHACKLETON: My Lords, I have noted the noble Lord's point.
EARL JELLICOE: My Lords, may I ask the noble Lord whether it is the Government's intention to produce the Supplementary Statement before the Summer Recess?
LORD SHACKLETON: My Lords, I am afraid I cannot answer exactly when that Statement will be produced. Undoubtedly, for reasons of the kind mentioned by the noble Lord, Lord Thurlow, the Government are anxious to publish the Statement as soon as possible.
LORD ST. OSWALD: My Lords, would the noble Lord give some assurance that

867
when the Supplementary Statement is published it will be announced through a ministerial Statement to Parliament, rather than through what has now become the normal channels; namely, a Press leak? Will the noble Lord answer that question?
LORD SHACKLETON: My Lords, I do not know whether the noble Lord regards that as a serious question. I think he is just trying to pull the Government's leg. If he reads what the Prime Minister said, and will read again what I have said, he will see that this refers to a proper Defence Statement which will be published as a White Paper.

RHODESIA: COST OF SANCTIONS
3.14 p.m.
LORD GRIMSTON OF WESTBURY: My Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government what is the direct cost to this country of operating sanctions against Rhodesia, and what assessment they have made of the consequential indirect losses arising therefrom.]
LORD BESWICK: My Lords, the direct cost of payments by the Exchequer, including aid to Zambia, was £27½ million between I.D.I. and December 31, 1967. The cost to the United Kingdom balance of payments cannot be precisely estimated. The cost for 1967 will probably be similar to that of £40 million given for 1966 by the Prime Minister on March 16, 1967. In addition, about £10 million of the additional cost of copper imports in 1967 might be attributed to the Rhodesian situation, among the many factors affecting copper prices.
LORD GRIMSTON OF WESTBURY: My Lords, from those figures which the noble Lord has given, the cost so far as they know is £37 million a year. But is he aware that there are other matters which, as he said, are difficult to estimate,
868
such as the increased cost of tobacco, which now has to be bought from other sources which are more expensive than Rhodesia and which also involves dollars? Is it quite impossible to estimate what that may cost? Further, there is the indirect cost through other countries getting into the Rhodesian market and our permanently losing those exports. It is really impossible to make any estimate of those figures, which must be pretty considerable?
LORD BESWICK: My Lords, the figure I gave was £40 million, not £37 million, for the cost to the balance of payments, and this is made up of various items, including the estimated increased cost of tobacco imports, the estimated increased cost of copper imports and the other factors which the noble Lord has mentioned.
THE EARL OF MANSFIELD: My Lords, can the noble Lord give an assurance that the Government will not add to the loss this country is already enduring as a result of sanctions by giving way to the demand for some £20 million made by Zambia for the alleged losses that that country is supposed to be suffering as a result of sanctions?
LORD BESWICK: My Lords, that is a different question. I cannot say anything on it except that the "alleged" loss is a very real one to Zambia.
LORD BOOTHBY: My Lords, may I ask the noble Lord whether he realises the continuing irritation that is involved between this country and Rhodesia—and I have been there quite recently—over these sanctions? They are doing no good. We are not going to bring Rhodesia down. Take them off and make a settlement.
LORD BESWICK: My Lords, Her Majesty's Government are very anxious to make a settlement, but only on terms which are acceptable not only to the people of this country but to the whole of the rest of the world. No country has as yet recognised the present régime in Rhodesia.

SOUTH AFRICA ARMS EXPORTS EMBARGO
3.17 p.m.
LORD GRIMSTON OF WESTBURY: My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government what assessment they have made of the loss to the export trade which will be occasioned both directly and indirectly as a result of their refusal to export any arms to South Africa.]
LORD CHALFONT: My Lords, Her Majesty's Government's decision to continue unchanged the arms embargo policy towards South Africa, which has been implemented since November, 1964, and which is in line with United Nations Security Council resolutions, took the economic as well as all the other implications fully into account. The value of the South African orders for defence equipment which might have been placed in this country had this policy been changed is impossible to assess. Her Majesty's Government have no reason to expect that exports to South Africa of other goods will be affected. Indeed, we hope and expect that, with the advantage given by devaluation, our exports to South Africa will continue to increase.
LORD GRIMSTON OF WESTBURY: My Lords, could the noble Lord, arising out of that Answer, say that a direct loss of about £200 million might have been incurred through the refusal to supply arms, some of which I think are now being supplied by France? Furthermore, when he says that he does not expect any indirect loss to occur through this policy, does that take any account of the annoyance and anger that have been aroused by the refusal to export arms to a country which is allowing us to use her ports to an increasing amount because of the closure of the Suez Canal, and that a good deal of anti-British sentiment, which will find its way into withholding orders from this country, is being built up for a so-called moral reason which many people regard as pretty questionable? Could the noble Lord also tell me, in connection with this matter, how one uses a submarine, for instance, in Johannesburg to put down a civil riot?
LORD CHALFONT: My Lords, in the first place the question about submarines and civil uprisings is totally irrelevant to the question of Her Majesty's Government's policy. When the noble Lord mentions a sum of money that has been involved in this whole policy—and I repeat, it is a continuation of a policy, not a new policy—this is, I presume, a calculation of his own, it certainly is not a figure that has any official status. We always accepted that an arms embargo must lead to some loss of trade, but I would ask the noble Lord and your Lordships' House to believe that there is far more at stake in the supply of arms to South Africa than a simple acceptance or rejection of a particular arms order. I can also assure the noble Lord that all the factors he has mentioned—political factors, economic factors and moral factors—were taken into account when Her Majesty's Government decided to continue this policy.
THE EARL OF SWINTON: My Lords, may I ask the noble Lord whether he has considered the declaration by the South African Government that they may bring the whole of the Simonstown Agreement to an end, with the result that this country may lose the use of the ports which are so invaluable to us? And what action has been taken to ensure that we shall continue to have the use of those ports—not just Simonstown, but Durban and Cape Town, Which were worth more than a million tons to us during the war?
LORD CHALFONT: My Lords, I can only say that Her Majesty's Government have received no approach from the South African Government on any of those points. The noble Earl will be aware, I am sure, that the Simonstown Agreement imposes no specific obligation upon us whatsoever to supply defence equipment, other than certain vessels which were supplied before the embargo was introduced. I am aware that the South African Prime Minister has said that he will look anew at the Simonstown Agreement in the light of the decision to continue our arms embargo. But I must tell your Lordships' House that we have, as I say, received no approach of this kind from the South African Government.
VISCOUNT DILHORNE: My Lords, can the noble Lord say whether the

871
Government have made any assessment of the loss involved in regard to the export trade, as the Question asks? The noble Lord has given no figure at all. If there is any assessment, can we know what it is? If there is no assessment, could not the Government find out?
LORD CHALFONT: My Lords, the fact that no assessment of this cost has been publicly announced does not necessarily mean that Her Majesty's Government have not made one. Requests from foreign Governments for defence equipment are normally confidential, and I cannot reveal to the House details of the items about which the South African Government made its inquiries in the first place. Therefore, so far as the arms argument is concerned I can give no figure; but so far as other exports to South Africa are concerned, I am sure it will be a matter of common knowledge to your Lordships' House that since this embargo was first imposed in 1964 our trade with South Africa has increased yearly.
VISCOUNT DILHORNE: My Lords, I asked the noble Lord about the loss to the export trade, and whether he knows the figure; and if the Government know the figure, is there any reason why Parliament should not be told? I have not asked him about the breakdown of the figure, but can he not give the total? It really does not suffice to say, "We know it, but we are not going to tell you".
LORD CHALFONT: My Lords, as I have said, the question of a loss to the export trade is irrelevant, because since the arms embargo was applied—
VISCOUNT DILHORNE: My Lords, that is the Question on the Order Paper.
LORD CHALFONT: My Lords, as I was saying, since the arms embargo was applied our exports to South Africa have increased, not decreased. If the noble and learned Viscount is asking a specific question about a specific inquiry from the South African Government about arms, as a result of which we decided to continue the present policy, then I am afraid I cannot make that figure public.
VISCOUNT DILHORNE: My Lords, I was not asking that. I was merely asking the noble Lord to answer the Ques-
872
tion on the Order Paper, which he has not done.
THE EARL OF MANSFIELD: My Lords, is not the reason for not replying that the Government are afraid to give the figures, in view of the great shock it would be to the country to see how much we have lost?
BARONESS GAITSKELL: My Lords, would not the Minister agree that this passionate request for arms to South Africa from members of the Opposition simply ignores our moral reputation in the whole of the Afro-Asian world? If any noble Lords had been in the United Nations and had heard the proceedings there they would realise that our reputation would have become absolutely disreputable if we had reinstated arms for South Africa.
LORD MOYNIHAN: My Lords, would the noble Lord, Lord Chalfont, notice that these remarks are coming only from one section of the Opposition?
LORD CHALFONT: My Lords, I am grateful for those most recent interventions, but I must take issue with the noble Viscount opposite when he suggests that I have not answered the Question on the Order Paper. If he will look at the Question on the Order Paper he will see that I answered it by saying:
"The value of the South African orders for defence equipment which might have been placed in this country had this policy been changed is impossible to assess."
That is the answer to the Question on the Order Paper.
THE EARL OF DUNDEE: My Lords, is the noble Lord aware that our previous policy up to 1964 of supplying only arms which could not be used to deal with civil disturbance, was perfectly satisfactory, reasonable, and moral in world opinion? Is he aware that those nations in the United Nations who objected did not themselves ever have to send, or want to send, any kind of weapons to South Africa? And is he aware that there is no reasonable, rational justification for refusing to supply South Africa with arms which are necessary for her defence against overseas aggression?
LORD CHALFONT: My Lords, I cannot, of course, answer for policies or interpretations that were made before Her Majesty's Government decided to

873
continue with our present policy. I can only say that our policy is fully in line with a United Nations resolution, and that in deciding to continue it we took all the factors into account.
LORD CONESFORD: My Lords, can the noble Lord inform someone who really does wish to follow the moral principle involved, why it is right to refuse arms to a country to resist external aggression, but right to supply arms to a country for the purpose of conducting a civil war?
LORD CHALFONT: My Lords, I am not entirely sure of the fine point of that question. I am sure it will come home to me later. All I can say is that the reason that we have decided to continue this policy is that we have subscribed to a United Nations resolution on this subject, and we are anxious to abide by it.
LORD BOOTHBY: My Lords, I should like to ask a quite moderate question: it will not be provocative in any way. I should like the noble Lord to give us an assurance that he realises the importance of Cape Town to this country to-day, having regard to the closure of the Suez Canal, and that he will do his best to facilitate agreement between this country and South Africa, because we are both completely dependent upon each other and if things went really wrong it would do almost as much damage to us as it would do to them. I simply want him to realise the amount of traffic—
LORD SHACKLETON: My Lords, would the noble Lord give way?
LORD BOOTHBY: My Lords, I will not make a speech. I will sit down.
LORD SHACKLETON: Would the noble Lord care to give way?
LORD BOOTHBY: Does the noble Lord want me to sit down?
LORD SHACKLETON: Yes.
LORD BOOTHBY: I am delighted to sit down.
LORD SHACKLETON: My Lords, I think the rest of the House shares the noble Lord's feelings on that matter. It would be helpful if he could ask a question. We have gone into this matter at
874
some length. The House is most tolerant, but there is a point beyond which it feels a little less tolerant, and I feel that the noble Lord was rather near that point.
LORD GRIMSTON OF WESTBURY: My Lords, as the Government cannot make any assessment of the cost of their policy, may we take it that they will pursue it relentlessly, however much the loss may be? Is that the position?

BUSINESS OF THE HOUSE
3.28 p.m.
LORD SHACKLETON: My Lords, I beg to move the Motion standing in my name on the Order Paper. In moving this Motion—I hope I am not out of order—may I say that there is nothing sinister in our taking all the stages of the Consolidated Fund Bill in one day, in the sense that it has no connection with the appointment of my noble friend Lord Shepherd as Deputy Leader of your Lordships' House. I should like to extend my congratulations to him, saying that it gives me and everybody on this side of the House enormous pleasure, and I venture to suggest that it will give pleasure to noble Lords opposite. I beg to move.
Moved, That Standing Order No. 41 (No two stages of a Bill to be taken on one day) be dispensed with for the purpose of allowing the remaining stages of the Consolidated Fund Bill to be taken this day.—(Lord Shackleton.)
EARL JELLICOE: My Lords, I should like to echo what the noble Lord the Leader of the House has said. I am sure that, like him, I am completely out of order in what I am about to say. Nevertheless, I should like to say it, and I should like to add from these Benches our sincere congratulations to the noble Lord, Lord Shepherd, on his appointment. Like all Governments, the present Government have been known to make a mistake or two. But I think that everyone who knows the noble Lord, Lord Shepherd, well—and we all know him very well indeed—will know that the Government have not made a mistake on this occasion. Not only has the noble Lord to be congratulated but also the Party opposite and, I would add, the House as a whole.
LORD BYERS: My Lords, we on these Benches should not like to feel that on this occasion we, too, were not out of order. I should like on behalf of my colleagues to express our sincere congratulations to the noble Lord on a very well-deserved promotion.
THE MINISTER OF STATE FOR COMMONWEALTH AFFAIRS (LORD SHEPHERD): My Lords, with the permission of my noble friend, may I join the other two noble Lords in being out of order? I have ben the Chief Whip for a number of years, both in Government and in Opposition, and although some of the "old hands" of your Lordships' House have not exactly accused me of breaking the Rules of the House, as I suggest they have been broken this afternoon at Question Time, perhaps I may have "bent" them from time to time. I am now again turning "gamekeeper", and it may be that, having been a "poacher", I shall now be a better "gamekeeper".
On Question, Motion agreed to.

CONSOLIDATED FUND BILL
LORD BESWICK: My Lords, I beg to move that this Bill be now read a second time.
Moved, That the Bill be now read 2a.—(Lord Beswick.)
On Question, Bill read 2a: Committee negatived.
Then, Standing Order No. 41 having been dispensed with (pursuant to Resolution), Bill read 3a, and passed.

LONDON CAB BILL
3.32 p.m.
THE MINISTER OF STATE, HOME OFFICE (LORD STONHAM): My Lords, I beg to move that the London Cab Bill be read a second time. This Bill is about licensed London cabs—of which we all have plenty of first-hand knowledge. We all know what they look like and we all travel in them. But it would be a bold man who would claim to know everything about the laws under which they operate. All told, there are eleven Acts of Parliament concerning cabs, ranging from 1831 to 1907, plus a scatter of
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highly complex statutory instruments covering the period from 1934 onwards. I hope, therefore, that noble Lords will bear with me if I explain the background to the provisions of this Bill in rather more detail than would be necessary if the parent Acts did not go back to the reign of William IV.
The Bill deals with three quite separate problems concerning the London cab: first, taxi fares and the 6-mile limit; secondly, the use of parking facilities by licensed cabs; and, thirdly, the use of words like "cab" and "taxi" on, or in connection with, vehicles that are not licensed cabs. The fares problem closely affects both the travelling public and the licensed cab trade. At present a cab driver is compelled in law to accept a hiring for any journey within the Metropolitan Police District if it is not more than six miles or does not last more than an hour. The rates of charge for such journeys are prescribed. But for any journey beyond either of these two limits, commonly known as the "compellable limit", the driver is free to decide for himself whether to accept the hiring at all and to agree with his would-be passenger what the charge will be.
The Bill will change this situation in two ways. First the Secretary of State is to be given power in Clause 1 to prescribe rates of charge for all journeys, irrespective of distance, providing they are within the Metropolitan Police District; and this includes London Airport. I believe your Lordships know why we feel this change is necessary. To put it bluntly, there is unfortunately a minority of licensed cab drivers who abuse this traditional freedom to negotiate the fare for these longer journeys. Exorbitant rates have been charged. What is more, the victims are all too often those who are most vulnerable—overseas visitors unfamiliar with our language and bewildered by our money—or the stranded wayfarer desperate to get home.
I emphasise that it is only a minority of cab drivers who exploit the present situation. But they cause a disproportionate amount of annoyance to travellers. They also do a lot of damage to the licensed cab trade, whose well-earned reputation for integrity and reliability is most unfairly tarnished by the activities of this grasping minority. Indeed, the

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pressure for powers to regulate the fares for these longer journeys comes just as much from the licensed cab trade as from those concerned with the interests of the travelling public.
If the Bill becomes law, the Home Secretary intends to prescribe the rates of charge for all journeys within the Metropolitan Police District as soon as possible, but he will consult all three sections of the licensed cab trade (proprietors, owner-drivers and journeyman-drivers) before any order is made. This means that when the new rates have been prescribed, although a driver will still be free to refuse to accept hirings for journeys of more than six miles or lasting more than an hour, if he accepts such a hiring he will be able to charge only the prescribed rate.
Clause 2 of the Bill embodies a second change in the law. It enables the Secretary of State to extend the 6-mile compellable limit itself (either generally or for particular journeys). I emphasise, however, that this is intended as a reserve power only. We have no immediate intention of using it, and we hope indeed we shall not need to use it. But we must have it there in reserve in case a substantial number of drivers try to defeat the object of regulating the fares for the longer journeys by refusing to accept hirings in excess of six miles. The cab trade have never been exactly enthusiastic about this provision—a deputation from the Cab Section of the Transport and General Workers' Union came to see me about it when the point was first mooted about two years ago, and I fully understand their anxieties in this respect. We have always appreciated that extending the compellable limit would raise a number of questions of practice and principle that would need to be very carefully discussed with the trade. Indeed, it was for this reason that it was agreed in another place to write into the Bill a specific requirement for prior consultation before an order can be made under Clause 2. But, as I have said, we hope that it will not be necessary to invoke this provision. It is really up to the drivers themselves.
I now turn to the second topic of the Bill: parking facilities for cab drivers. This is an entirely domestic but very real problem; namely, what to do with their cabs when they want to knock off for a
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meal. As the law now stands, a cab driver is allowed to leave his cab unattended in the public street only if he has parked it at one of the cab ranks that have special facilities for what is called "tail-end" parking. There are not very many of these, and for technical reasons which I need not go into now, it is not possible under present powers to increase their number. What we have therefore done in Clause 3 of the Bill is to get rid of one of these nineteenth-century provisions altogether and to tag on a proviso to the other one (which is in other respects still needed) so as to allow on-street parking by cabbies in any formally authorised parking area. I think your Lordships will agree that this is a sensible solution to what must otherwise be an increasingly irksome, if not positively painful, situation for hard-working and hungry drivers.
I come now to the third topic of the Bill, the restrictions that we are seeking to impose on the signs that may be displayed on private-hire cars and on advertisements relating to private-hire car operations Only licensed cabs are allowed by law to ply for hire in the streets: that is why we have a licensing system. It is, and always; has been, illegal for a private-hire car to ply for hire in the streets. But, regrettably, it happens. And it happens much more easily if private-hire vehicles are able to display signs or slogans that include words like "cab" or "taxi" which have for decades been associated—in the minds of Londoners and many other people—with licensed London cabs. Clause 4 accordingly prohibits absolutely the display on these private-hire vehicles, the non-licensed vehicles, of the specific words "cab" and "taxi', whether alone or as part of a word such as "mini-cab", and also the two words "For hire" if they stand alone. More generally, it also prohibits the display of any sign so worded as to suggest, in effect, that the vehicle can be flagged down in the street. This is the point of this clause and it is an important point; the question of preventing, if we can, vehicles which are not licensed London cabs from being flagged down in the street.
In addition to the restriction on what cart be written up on the vehicle itself, Clause 5 imposes parallel restrictions on advertisements for private-hire cars. Here the method adopted to protect the public from

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being misled is a requirement that advertisements inviting application to a London address or telephone number for the hire of cars may not incorporate the words "cab" or "taxi", unless the vehicles are licensed cabs or, if they are not, the advertisement makes it clear that they are not. This restriction applies only to advertisements. It does not apply, say, to a bare entry in the telephone book, or to the name of a firm written up over its premises, neither of which is an advertisement.
This should go a long way towards meeting criticism voiced by the trade at the illicit encroachment of private-hire car operations in a field where licensed cabs have enjoyed, and are entitled to enjoy, a monopoly. I realise that it does not tackle, nor is it an attempt to tackle, all the problems with which the cab trade would have liked us to deal. For they are greatly concerned with the wider question of just what the respective fields of operation of licensed cabs and private-hire cars ought to be in an area which at present is the monopoly of neither; namely, telephone hirings for more or less immediate journeys. This is a field in which licensed cabs most often come into direct competition with private-hire cars, and where, accordingly, and understandably, they are chafed by the fact that as licensed cabs they are subject to restrictions from which the private-hire cars are free.
The Bill does not attempt to provide solutions to these problems; nor would it be appropriate for it to try to do so. This is as yet an almost completely unmapped road. We recognise that there is a problem—that the present dichotomy between licensed cabs and private-hire cars resting simply on the right to ply for hire may no longer fit the needs of to-day's travelling public as well as it used to; or, indeed, provide an appropriate framework for the kinds of service that the London cab and private-hire car could or should provide in the conditions of London to-day.
It is questions of this sort that the Independent Committee under Mr. Maxwell Stamp, which was set up by the then Home Secretary last October, will be asking; and they are questions to which it is important that the right answers are found. I am sure your Lord-
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ships will join me in wishing the Committee well in its explorations. I am equally confident that noble Lords will also agree that, meanwhile, we should only impede the Committee's work if we were to concern ourselves with piecemeal amendments of the hackney carriage law.
It is for this reason that we have confined this Bill to the three topics that I have outlined. All are matters on which the need for something to be done is in our view urgent, and where the solution—and I think it is obvious from the Bill—is straightforward. Our objectives may be limited, but they are very worth while. I hope that on that basis your Lordships will give this Bill a Second Reading and a fair wind through the rest of its passage through the House.
LORD HAWKE: My Lords, before the noble Lord sits down—
LORD STONHAM: May I just move—
LORD HAWKE: I should like to ask about two practical points. The noble Lord has not really told us what, under the new dispensation, journeys over six miles will cost per mile, compared with what they cost at the moment on the clock, and details of that nature.
LORD STONHAM: My Lords, this has not yet been decided. I should have thought this could have been left until the debate. I did say in my speech that this Bill will empower the Secretary of State to make regulations with regard to fares, but that before doing so he will consult all three sections of the cab trade.
LORD BROCKWAY: My Lords, also before the noble Lord sits down, may I ask him whether consideration is being given to a problem which has been raised over the years in another place; namely, that of parking spaces at railway stations which are limited to a number of privileged taxicab owners? It means that when they are empty passengers have to go long distances before they can get a taxicab service at all.
LORD STONHAM: My Lords, I hope there will be a limit to the number of questions put to me before I sit down. But if my noble friend is unable to stay to speak in the debate, I can say that those are some of the "tail-end" taxi parking sites which I mentioned, of which

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there are all too few. The Bill, as it were, lifts the legal restrictions on the parking of taxi cabs, and this and other points are either covered by the Bill or will be considered by the Independent Committee. I beg to move.
Moved, That the Bill be now read 2a.—(Lord Stonham.)
3.48 p.m.
LORD DERWENT: My Lords, I am sure we are all grateful to the noble Lord, Lord Stonham, for the brevity and clarity with which he has explained this Bill. May I say straight away that we on these Benches welcome this Bill, and we think it is a good one. I am particularly glad to see the flexibility that is contained in the Bill. Your Lordships are not very fond of giving Ministers powers to make regulations and so on, and as a rule they like to spell out the details in a Bill. But I am quite certain that this is impossible in a Bill of this kind. May I give one very simple example? Owing to the increased costs of taxis through the years, the increase in fuel bills, largely because of taxation and the fall in the value of money and so on, fares have to be altered every few years. For example, if one were to spell out in the Bill a list of the new fares that will come into force, then every few years, when the fares had to be altered, one would have to introduce a new Bill. So I am quite certain that it is right that the powers, particularly those in Clauses 1 and 2, should be left with the Minister. He has to consult those interested and then lay Orders before Parliament; and if we do not like any of those Orders we can in fact throw them out. I am sure that is the right way to handle this problem.
As the noble Lord has said, this Bill does not deal with all the problems. As he has explained, there is a Committee sitting under the chairmanship of Mr. Maxwell Stamp; but it is quite right that this Bill should have come forward on its own as soon as possible. But I should like to say one word about the very widespread criticism that there has been as to the delay in bringing the Bill forward. I seem to remember that when my noble friend Lord Brooke of Cumnor was Home Secretary there was a draft outline of the Bill already in being. That is more than three years ago, and I appreciate that it is not quite as easy as would appear at
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first sight to hurry these matters. There are many people to be considered and interests to be consulted. First of all, there are the taxi-cab proprietors or the taxi-cab companies, whatever one likes to call them. They have to provide a service, but they also have to make a reasonable profit or they will not operate, and then people in London will not have a taxi service. They are the first people who have to be considered.
Then there are the not quite distinct but rather distinct interests of the owner-driver; the man who owns one cab and drives it himself. His interests are by no means identical to those of the taxi companies. Then there are the journeymen drivers, the drivers who drive for the taxi companies. Their interests are different, very often, from the interests of the owner-drivers. As much agreement as possible has to be reached among these people, and then that agreement has to be put on a meter in the form of a taxi fare. Everyone has to give way a little, perhaps, but in the end they all have to charge the same fare although their interests are different. So negotiations are very complicated. Above all, apart from the interests I have mentioned, there are the interests of the public, those interests being that there should be a good taxi service at the cheapest possible rate. So the public have to be considered, too.
When it comes to this question of criticism about delay, I think the Government have possibly made one mistake—in all good faith; I concede that. If my recollection is right, up to 1965 what used to happen was that that section of the Home Office which was in charge of this matter saw these different interests one by one and discussed matters with them. Then, when they had more or less got agreement—I say "more or less", because you can never get complete agreement—they would go to the Home Secretary, who might say, "Yes; that is the sort of agreement I want"; or he might say, "I think the public are being rather hardly done by, and I shall not be able to agree when you get round a table unless they give way a little on this particular point". Or he may even say, "Look; the last increase in taxi fares was only three years ago"—shall we say?—"and it is too soon to alter it again, partly because of the expense of new meters", and so on. Having

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reached that sort of stage, they all then got round a table and the final agreement was hammered out, after which legislation was introduced.
It was not a very fast-moving affair, but I think it moved faster than matters have moved lately. I am suggesting to the noble Lord that perhaps the Government have gone a bit wrong because in November, 1965, they set up the London Joint Consultative Committee. My Lords, there have been appalling delays—and I use that word advisedly—in the working of this Committee. By November, 1966, a year after this Committee was formed, they had had only two meetings, and at that date no further meetings were scheduled and no proposals ready. I do not want to be unfair: perhaps things have speeded up a little in the last year—I do not know. But I would ask the noble Lord to tell us when he comes to reply whether they are going on with this Committee, which has apparently slowed matters up. Or are they perhaps going to alter the functions of the Committee? Or are they going to alter the constitution of the Committee? Or is the Home Secretary going to put a bomb under them to make them work a bit more quickly? I think we are entitled to know the answers to these questions. This is always a slow business, but I think that in the last three and a half years the slowness has really been too much.
Because of this delay—and this is one of the main reasons why I wanted to talk about it—there have been widespread suggestions that all London cabs should be handed over to the Ministry of Transport. I most sincerely hope that this will never happen. The Ministry of Transport have many good points—I have always been a great admirer of their road engineering section, and so on—but they have never been renowned for their consideration of the public, and under the present Minister that seems to be getting worse. If your Lordships do not believe that, I suggest you look at the Transport Bill that is before the other place.
On the other hand, one of the prime duties of the Home Secretary in nearly all his legislation and in everything he has to do is to consider the public. He is, to a large extent, the guardian of the general public, and he is very used to
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being just that. Some of these negotiations were going on when I was at the Home Office, and I remember my noble friend Lord Brooke of Cumnor saying that he thought that in the discussions that were then going on the public had not been considered sufficiently. The Home Secretary is used to doing that in all kinds of spheres, and I hope most sincerely that he is going to be allowed to go on doing it and that it will never be transferred to the Ministry of Transport.
May I say just one or two words about the Bill? As the noble Lord has said, the obligatory journey now is a 6-mile one. I was sorry to hear him say that they were holding in abeyance this power to alter the limit, hoping they would not have to use it. That may be so, but really this "6-mile or one hour" business is a bit of nonsense nowadays. It was laid down, I think I am right in saying, in the Act of 1853. It was done, not for the public or for the cab driver: it was done to protect the horse—that and nothing else. My Lords, I went out the other day, walking about London looking for a cab-horse in need of protection. I could not find one; and that this 6-mile journey should stay there at all, or the one hour provision, is really a bit of nonsense. I hope, therefore, that these reserve powers will be used almost at once.
The situation now, before this Bill becomes an Act, is a most extraordinary one. It is that if you are going to do a journey of over six miles you are supposed to negotiate your fare with the taxi driver. If you do not do that, then, when he has driven over six miles, he can charge you anything he likes. The vast majority of taxi drivers are very reasonable, honest people who charge properly, but there are some who do not. Perhaps your Lordships can visualise these negotiations. You first of all start on a journey. You do not know it is over six miles, and it may well be that the taxi driver does not, either. He does not know it is 6¾ miles; he knows that only when he sees it on his meter. So it is a bit tricky. The man who has to negotiate may be a foreigner who has arrived at, say, Victoria Station. He cannot speak a word of English, and his kind friends have given him a piece of paper with an address written on it. He does

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not know. He knows he is in London and that is about all. How is that man going to negotiate a fare?
LORD STONHAM: My Lords, perhaps I may interrupt the noble Lord at this point. I assume he is talking about the present position, and that he made it clear that this will not be the position if this Bill becomes an Act, when all fares within the Metropolitan Police District—including London Airport—will be subject to the regulations which will be produced and approved by Parliament. The only option open to a driver will be to accept a hire of any duration within the Metropolitan Police District in accordance with the regulations or refuse the hire.
LORD DERWENT: My Lords, I did say that the present law is an absurdity. For that reason I hope that this 6-mile limit will not be left; because I think it might be misunderstood. It is nonsense to say that a taxi cannot be compelled to go more than six miles; it certainly ought to be longer. But I appreciate that when this Bill becomes an Act, according to the present wording, there will be a fixed charge over six miles. This will get rid of the Heathrow trouble we have all been having.
The second question I want to ask the noble Lord is this. How are these longer-distance charges to be brought to the notice of the passenger? Are there going to be new meters on the cabs to record an unlimited distance? Is a notice to be exhibited in the cab—or what? I am asking for information. I wonder whether this has been thought out.
That is all I want to say about the Bill. We approve Clauses 3 and 4, and I am not going into them, as they have been fully explained by the noble Lord, Lord Stonham. When the noble Lord has given me the satisfactory answers that he doubtless will to my questions, I hope that your Lordships will give this Bill a Second Reading.
4.3 p.m.
LORD MOYNIHAN: My Lords, I welcome a Bill at this time dealing with the problem of the taxi trade, but I regret that I am unable to muster much enthusiasm for this one. It is not so much what this Bill will do that I disagree with, although I will show later that I am rather worried about it; it is what
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it clearly fails to do that upsets me. It is not often that we have the opportunity, either in this House or in another place, of discussing the taxi trade and I feel that this unique opportunity has been missed. I wish first to complain most bitterly about the narrowness of the drafting of the Long Title of this Bill. I should personally have wished to put down many Amendments in Committee; but because of the narrowness of the Long Title I shall presumably not be allowed to do so. One wonders how long it will be before this subject comes up again, and why the Government have missed this golden opportunity.
First, there is the question of cut-of-date legislation which, as is the case with most other subjects in this country, badly needs to be cleared up, clarified and redefined. Only one section of the 1831 Act, Section 35, is amended by this, Bill, and very properly. I wonder whether noble Lords have read Section 43 of that Act which is still in force. If I may, I will quote from it:
"In case any person shall actually pay to the driver of any hackney carriage, whether in pursuance of such agreement or not any sum exceeding his said proper fare, which shall have been demanded or required by such driver, the person paying the sum shall be entitled on complaint against such drivel before any Justice of the Peace to recover back the sum paid beyond the proper fare."
This section is still clearly in force.
Also in the 1831 Act are provisions for the feeding of horses by the police after vehicles improperly parked have beer removed. This procedure is very familiar to many of us: I am sure that many noble Lords will have from time to time suffered the indignity of having their cars towed away. But these days one is fortunate enough not to have to worry about the feeding of the horses of the vehicles then in the hands of the police. It seems to me to be absolutely ridiculous that provisions of the kind I have quoted from the 1831 Act are still in force. It would have seemed to me to be an absolutely perfect opportunity in Committee to put into this Bill provisions to repeal all of this totally useless and unnecessary remaining legislation. And there are other points., with which I will not bore the House in detail, derived from the London Hackney Carriage Act 1831, the Metropolitan Public Carriage Act 1869, the Town Police Clauses Act 1847 and

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others, all of which could well have been repealed at this stage.
What is badly needed in this Bill is one clause repealing everything in these Acts which is outdated. Regrettably, it is not there; and, even more regrettably, I am advised that it cannot be put there in Committee by myself or by any other noble Lord because of the narrowness of the Long Title. This in my opinion is a bad mistake. From 1949 to 1954 there was a Working Party which reported to the Government on what actions should be taken. The actions that I have suggested were also included that Report. No action has been taken so far on this, and it now looks as if this opportunity is being missed again.
My Lords, let me turn now to what the Bill actually does. There are, as the noble Lord, Lord Stonham, so lucidly put it, three different points in this Bill, and I will, if I may, spend a few moments discussing this terrible problem of London Airport. The noble Lord, Lord Stonham, has said—and I endorse this 100 per cent.—that we are talking about a tiny minority of taxi drivers in the London area. I do not wish to repeat this every time I am talking about them because, of course, the vast majority of taxi-drivers are scrupulous and honest in their dealings. I do not wish in any way to throw any bad light on them. I am concerned only with this tiny minority.
I returned from the Canary Islands three days ago and, having it in mind that I was going to speak on this Bill, I left the Europa Building at the Airport having decided that for the time being I was going to be a foreigner who did not speak a word of English. I saw facing me an enormous sign, which nobody could possibly miss, warning me about what was going to happen. Unfortunately, it was in English, and (as a "foreigner") I did not understand a word of it. I then went over to the foremost group of taxi-drivers standing around and I addressed one of them in Spanish. I was absolutely amazed when he replied to me in Spanish. This, I think, shows that it is such a lucrative business that time spent learning European languages and the cost of such courses is immediately reimbursed, at an enormous profit, for anybody who can speak the
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slightest bit of a foreign language in the taxi trade at the airport.
I said, in admittedly rather bad Spanish, "I want to go to Bayswater". The leading taxi-driver turned to me and said, "Bayswater!" as if I had asked him for John o'Groats. Now I think that Bayswater is a fairly reasonable sort of place to want to get a taxi to, but I was made to feel, in my role as a visiting Spaniard, that Bayswater was quite out of the normal run of places to which people hiring taxis might wish to go. I was made to feel that I had asked for something quite exceptional, and that they were doing me an enormous favour if they could find anybody who was prepared to take me there. I was quoted—and I suggest that if anybody disbelieves me he should go and try it himself—a fare of £7 10s. 0d. from London Airport to Bayswater.
Would your Lordships just think for a moment what effect this experience would have on visiting tourists or businessmen? This situation is absolutely deplorable, and it must be prevented without further ado. I should like to see something a little more concise in the Bill about this matter. If I leave the subject there, I should like to have an assurance from the noble Lord, Lord Stonham, when he replies, that in the shortest period of time there will be a definite tariff from London Airport to the centre of the West End and vice versa. I do not, within reason, care what the tariff is, but it must be a definite tariff so that people cannot be "taken for a ride".
I would suggest to your Lordships, and I am a fairly well-travelled man, that possibly one would have to go to the back streets of Naples, or to Beiruit, before one would be treated by a taxi driver in the way that this minority—I repeat "minority"—of taxi drivers treat foreign visitors to London Airport. It would also be a good idea if, when setting this tariff, the Government took into consideration what one pays in other European countries to travel from an airport to the centre of a town where the distance is approximately the same as it is from London Airport to the West End. I think they will find that even £3 10s. 0d. which is, I believe, the fare one is charged—that is if one is lucky and speaks English—is still excessive.

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My Lords, I should like to turn to the part of the Bill relating to where cabs are allowed to park. I welcome everything which is contained in the Bill on this subject. I feel, however, that one thing has been left out, and I wonder whether it would be possible to insert it during the Committee stage. I refer to the case of an old lady, or somebody carrying a lot of parcels or suit cases, who wishes to embark or disembark when a taxi is standing in a road where there is a single yellow line. Under the present law, and under the law as it will be when this Bill becomes an Act, if a taxi driver should be one of the few that one finds these days with sufficient courtesy to walk to the side of the street and help an old lady into his taxi, or carry her bags, and he leaves his taxi unattended even temporarily, he is in breach of the law and could be fined. If this is the case—it may be that I have misunderstood the matter—I wonder whether it would be possible to have some wording in the Bill to allow a taxi driver so employed to leave his taxi unattended for a maximum period of five minutes, or some similar time, in a road where there is a single yellow line.
I come now to the question of minicabs. Here I am afraid that I find myself (I must state that I am speaking for myself on this subject and not for my Party) in disagreement with the Government and with what is in the Bill. In my experience mini-cabs provide an extremely good service in the Central London area; usually a better service than the licensed taxis. They are often considerably cheaper to hire, and one can nearly always obtain a mini-cab which is not the case with licensed taxis. It is argued that it is unfair to licensed taxi drivers if they have opposition from the mini-cabs, but I put it to your Lordships in this way. A licensed taxi driver can ply for hire and can also accept bookings over the telephone. A minicab driver cannot ply for hire and can accept bookings only on the telephone. It would appear to me that the boot is on the other foot, and that this is unfair to the mini-cab drivers rather than to the drivers of licensed taxis. There would be no such things as mini-cabs if there were no demand for them. If they did not make a profit, they would not exist. The taxi service, excellent as it
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may be, is not sufficient to meet the demand in Central London in peak period and I feel that the mini-cabs offer a very useful service.
I agree that the use of words such as, "taxi", "cab", "for hire" on the cars while they are being driven around should not be allowed. I do not wish to see mini-cabs permitted to ply for hire. However to ban forms of advertising such as cards, and the placing of advertisements about mini-cabs above telephones and such things as that, would prevent minicab drivers from providing a valuable service. Even if this were done, the object would not be achieved, because although I am not in a particularly inventive frame of mind this afternoon, I am quite sure that I could think of other words not covered by the clause which would mean the same thing, and which, after a few months, the public would come to realise related to what are known as mini-cabs.
This brings me to the end of what I want to say about the Bill and I should like now, with your Lordships' permission, metaphorically to drive my taxi a little beyond the 6-mile limit, and discuss another aspect of the taxi trade in Central London which is not dealt with in the Bill. I mentioned that I propose to do this to the noble Lord, Lord Stonham, so I suppose, to take the metaphor a little further, it might be said that the fare had been agreed.
Again, my Lords, I am talking about a tiny minority of London taxi drivers, not this time those at London Airport, but those who prey on tourists, fore goers and people from out of London who may be in Soho and the West End areas after dark. Unfortunately, there are certain night clubs and restaurants of not an entirely satisfactory character who outrageously advertise in two trade newspapers, one called the Steering Wheel and another called the Compendium, of which I have here a copy. They advertise that they will pay taxi drivers who deliver passengers to their premises a commission which in some cases goes up to £2 a head. I ask your Lordships to consider a party of five tourists—and when I say "tourists" I do not necessarily mean people who are not English; it could be a party from out of town—who are walking along a street in Soho after dark not knowing where to go, and a

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taxi driver, blatantly and illegally, walks across the street to them, leaving his taxi unattended on a rank, and suggests to them that he knows a suitable place where he can take them for their evening's enjoyment. If these people are gullible enough to accept his invitation and get into the taxi, they will be taken to a night club where, because of the fact that the taxi driver would be paid £2 a head for the party, they will be subjected to a surcharge of £10 on their bill before they sit down to have a drink. This is not good for our image as a centre of tourism; it is not good for the entertainment business, and it should be stamped out.
Another point that I should like to raise is this. If taxi drivers driving around London produce two such parties a night, they are making £20 a night. This is not declared and not taxable, and the Inland Revenue are losing, too.
LORD STONHAM: My Lords, I cannot accept that this is not taxable. If it is income from a man's occupation, it is taxable. What the noble Lord means is that they are cheating the Inland Revenue, just as burglars do, by not returning their income.
LORD MOYNIHAN: My Lords, I bow to the noble Lord's wisdom, because that is entirely the case. Not only are tourists receiving extremely bad value, but to some extent this is hurting first-class establishments who would otherwise have had the patronage of these people. The police seem to be either unable or unwilling to make arrests. In recent weeks I have spoken to many members of the police force in the Central London area on this subject. I received the same answers from all of them. They said that if they made an arrest on these grounds, the offending taxi driver would be fined £1 and that it would be a waste of time for everybody, because £1 does not constitute a fine which would hurt a man who has made £10 in committing the offence.
I wonder whether the noble Lord can answer this question? Can he tell me how many prosecutions of taxi drivers there have been recently for this kind of offence, and what fines were imposed or other action was taken against them? If, as I suspect, the number of prosecutions
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and the amount of fines both prove to be ludicrously small, I suggest the law must be changed. This has been brought to the attention of the authorities on numerous occasions.
There is a nightclub in Soho, which has an excellent reputation, which has been in existence for many years and which has over 100 Members of your Lordships' House as members, called the Gargoyle Club. This is built on the site where King Charles II went to visit a wench by the name of Nell Gwynne. I believe that the wenches are still as beautiful these days, although not patronised by Royalty to the same extent. The owner of this establishment has written 37 letters in the last four years to various bodies, including the police, trade unions and his M.P., and I should like to quote two of the replies which he received.
The first reply is from the Speaker of another place. It is dated October 21, 1965. It says:
"Dear Mr. Jacobs, I have now heard from the Assistant Commissioner about the matter you raised by letter of the 9th August. I give below the relevant extract:
'I am now in a position to tell you that as a result of police action to deal with alleged touting by cab drivers in the West End in the vicinity of night clubs and licensed restaurants 11 cab drivers have been prosecuted. Touting now seems to have decreased, but its financial rewards are such as to make its complete elimination virtually impossible'."
LORD BOOTHBY: My Lords, the noble Lord has bored us stiff for nearly three-quarters of an hour. I beg to move that he be no longer heard—
LORD MOYNIHAN: My Lords, I very much regret having bored the noble Lord. I hope that I am not boring your Lordships' House; if I am, I will certainly give way.
Another reply which the same gentleman received was from his Member of Parliament, Mr. Smith, enclosing a copy of a letter to Mr. Smith from New Scotland Yard, dated September 13, 1966. It says:
"Dear Mr. Smith, In the absence of Sir Joseph Simpson on leave I am writing in reply to your letter of September 1st about taxi-drivers.
It is good to read of your high opinion of cabbies because we do try to maintain a high standard in licensing them. It is inevitable,

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however, that some will turn out to be unscrupulous and will take advantage of foreign visitors. Some of the lazy ones are apt to hang about London Airport in the hope of getting a foreign fare who may be gulled into paying as much for one journey as two more sophisticated fares will pay for two journeys from the airport to the West End of London. You may know that the legal requirement for a journey of more than six miles is that driver and fare shall come to terms and the 'clock record' does not have to be used.
We are alive to this and have been hoping to reach agreement with the cab firms on a standard fare but have so far failed to negotiate a figure that would be satisfactory to us.
Your constituent's complaint about the 'flags down' technique is the first of this nature for some time though that is not to say it doesn't happen …"
My Lords, I have here copies of 33 letters which have been sent to the Commissioner of Police, at Scotland Yard, or West End Central police station during the course of five months, and it is amazing to me that the police should reply that this is the first complaint of this kind, because it is obviously not so. I can send the noble Lord, Lord Stonham, the correspondence if he so wishes.
To summarise, I should like to know how many convictions have taken place in the last three years and what fines and penalties were imposed. I put it to your Lordships that the police owe a duty to the public to enforce the law as it now stands and if it is unenforceable, for any reason whatsoever, it should be changed. There are also taxi-drivers every night in Soho and the West End of London blatantly outside their cabs soliciting for prostitutes. Probably a few cases of prosecution for living off immoral earnings might be the way to stop this practice.
4.23 p.m.
VISCOUNT FURNESS: My Lords, I rise to give a general welcome to the Bill, and perhaps I may do so more briefly than the noble Lord who has just sat down. It should be stated, however, that it is a great pity, after so much hard work has been done by various Committees since 1949, that only this limited Bill could be introduced. Still, I suppose one must be thankful for small mercies.
The Bill is permissive, in that it authorises the Secretary of State to make Orders, subject to the Negative Resolution pro-
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cedure, regarding the fixing of fares. This is to be welcomed and I am grateful to the noble Lord, Lord Stonham, for his explanation of the way this may be implemented. Clause 2 empowers the Secretary of State to extend the limit of six miles, which was fixed in the London Hackney Carriage Act 1853, as the distance which the driver of a cab is by law obliged to undertake. As my noble friend Lord Derwent indicated, this provision was inserted in the law in 1853 when the sole means of locomotion for cabs was the horse, and this limit was considered to be a reasonable distance before the horse—and probably the driver, too—needed rest or refreshment. This; limit is now completely obsolete and arbitrary, and has no relevance to present conditions, and I am glad to see that the Secretary of State will have power to extend it.
This, presumably, will deal quite satisfactorily—and I am sure the noble Lord, Lord Stonham, is going to deal satisfactorily—with the position regarding journeys to and from Central London and London Airport, which other noble Lords have mentioned. This is fine, so far as it goes, but there is one anomaly which I should like the Minister of State to consider. If he cannot give me an answer to-day, perhaps he will be able to do so later by correspondence.
This is a problem which arises, I imagine, frequently. I know it happened to me just before Christmas, when I got into a cab in central London not far from your Lordships' House and proceeded to a point not beyond the 6-mile limit, dropped off a friend—it happened to be a very attractive young lady—and returned immediately in the same cab to my flat in central London. Admittedly, it makes a total journey of more than six miles. The trip I made happened to be in the evening, and certainly did not take anything like an hour, so it did not fall within the other criterion Admittedly, the driver is not obliged, as the law now stands, to undertake the journey; and admittedly, I did not specifically state to the driver at the time—this was probably my fault—that I was going to this point, which happened to be just the other side of the Zoo, and back again to central London. But I should certainly have thought that there

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was a case for fixing the fare at something approaching the meter fare, because one had hired the cab in central London and was returning in it to central London, which would certainly assist the driver in getting another fare. I am quite sure that if one hires a cab in central London and goes to somewhere far out, like Golders Green or Wimbledon, and pays the driver off there, the driver may have difficulty in finding a fare, but if he drops you in Sloane Street the same factor does not arise.
LORD STONHAM: My Lords, could the noble Viscount tell me whether in the instance he speaks of he paid a fare higher than was shown on the clock?—because, if so, he could easily have avoided that by paying the fare on the clock when he arrived at his first destination and then going back and again paying the fare on the clock. The driver would have had to take him, because it would have been within the compellable limit of six miles or one hour.
VISCOUNT FURNESS: Unfortunately, I was not aware that 11s. 6d. was the magic sum at the time. I am afraid I got caught. This is something which perhaps some of the foreign visitors and non-English-speaking visitors mentioned by the noble Lord, Lord Moynihan, would "cotton on to". Unfortunately I was talking English at the time.
Clause 3 is, of course, most welcome, and rectifies an obvious anomaly in the existing law. In order to meet the point made by the noble Lord, Lord Moynihan, I do not know whether it would be possible for hire cabs to use parking meter bays, obviously on payment of the appropriate fee, at the request of a passenger who might have some package to collect at a shop or who has to pick up a sick or infirm person. The noble Lord mentioned this point. I do not know whether it is legal now, or whether it will be possible under the Bill as now drafted.
There was a lot of controversy in another place over Clause 4, which deals with private hire cars and so-called minicabs. I fully support what the Government are trying to do to distinguish between them. For the rest, we must await the Report of the Maxwell Stamp Committee, the announcement of which was made by Her Majesty's Government
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on June 9, 1967, and the members not appointed until October 26. I understand from the statement made by the Under-Secretary of State in another place on the Second Reading of this Bill that the first meeting of the Committee took place in November. I hope it will not be too long before they are in a position to report, and that no great delay will elapse between the Report of the Committee and the introduction of comprehensive legislation to deal with the problems of the cab industry in London. This was a point made by other noble Lords, and particularly by the noble Lord, Lord Moynihan. In fact, he devoted the great burden of his speech to points which will be considered by the Maxwell Stamp Committee and which, as he pointed out, arise from the Long Title of the Bill.
The spokesman of Her Majesty's Government in another place gave figures which indicate that the number of licensed cabs on the roads in the London area has been steadily increasing since 1960. This is in spite of the increase in mini-cabs and is most encouraging, and will, I hope, go a long way to meet the point. The figure for 1966, according to the Government spokesman in another place, was 7,764. The only point which disappoints me is that not one of them ever seems to be plying for hire in my direction on a rainy night.
4.35 p.m.
LORD LINDGREN: My Lords, I suppose it is only natural, when we get a Bill like this, that everyone wants to extend the scope of the Bill and the few cases of abuse come much more to the fore. I congratulate the Government on bringing in this Bill, limited though it is, because it is long overdue. The London taxi is part of London's transport, and because it is at the service of the public, over a period of years it has been subject to considerable restriction—restriction, that is, for the protection of the public. The standard of the vehicle, and even the type of the vehicle, is controlled by the Metropolitan Police. The driver is licensed by the Metropolitan Police.
No one has spoken to-day of the tremendous training—almost 18 months' full-time training—that has to be undergone to become a London taxi driver. There is no Member of your Lordships'

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House who has ever picked up a taxi and not been able to go wherever he wanted to go without having to tell the driver the way. In fact, I should not be surprised if many of your Lordships, like myself, when you do not know exactly where it is you want to go, take a taxi. As I say, the training takes 18 months, and during the course of the training every 28 or 56 days the applicant for a licence is subject to tests, apart from his tests of knowledge and the rest, and in addition he has to take a public service vehicle driving test.
Perhaps I may deal, also, with the point raised by the noble Lord, Lord Moynihan, in regard to one or two taxis which seem to operate in a part of London which I am much too poor to frequent. The licence of the taxi driver can be withdrawn at any time by the Commissioner of Police if he considers the driver not to be a fit and proper person to have it. I was surprised that the noble Lord said the police had given him the impression that a prosecution, even involving a small penalty, was not a deterrent to a taxi diver, because in determining who is a fit and proper person, so far as the Commissioner of Police is concerned the number of convictions for any type of offence is taken into account.
The taxi driver, if he has his licence withdrawn, has no court of appeal. This is one of the points made by London taxi drivers. Due to their training, and this control of the London taxi drivers, I feel that they have the right of protection against what they think is the unfair competition of the mini-cab. The noble Lord, Lord Moynihan, seems to favour the mini-cab. But their drivers are not licensed to carry passengers, their vehicles are not subject to tests or to standards, and, while there are a number of minicab firms which are quite above suspicion, many of them are operating with drivers who are driving in the evening after they have done a full day's work, and are not of the standard of driving that they should be in order to carry fare-paying passengers. Often they are doing it with their own cabs and are not insured for carrying passengers. I feel that the London taxi driver is entitled to protection against this unfair competition.
There is one point I should like to raise in regard to the Bill, and it is this. I am not too sure that Clause 4(2) offers
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sufficient protection to the London taxi driver against advertisement. However, I hope that my noble friend Lord Stonham will look at this point, and if it is possible to put down an Amendment I should like to put one down. I appreciate that it is very difficult, and it may be that the noble Lord feels that the point is in a way covered by the clause of the Bill.
The noble Lord, Lord Derwent, referred to the clause on control of licensing of London taxis. I agree with him entirely that it is not a matter for the Ministry of Transport—I thought that that point had died a natural death a long while ago. But there is, I think, room for reconsideration as to whether in present-day circumstances the Metropolitan Police and the Home Office are the right persons to control them. As I said earlier, taxis are part of London's transport. There is talk of London transport being passed to the Greater London Council. The Greater London Council is now the traffic authority for London, and it might be a good idea if the taxi, too, so far as the licensing of taxi cabs is concerned, was transferred to the Greater London Council. After all, the licensing authority for taxis outside the London area is the local authority. True, the job is not so onerous there as it is in London, where, after all, there are over 12,000 drivers and over 7,000 cabs, and 40 per cent. of the cabs are those of owner-drivers, to whom Lord Derwent referred. I congratulate the Government on the Bill. Although it is limited in scope, I think it is urgently necessary, and I am glad that it is having a good reception this afternoon.
4.42 p.m.
LORD BOOTHBY: My Lords, before the noble Lord, Lord Stonham, replies, I should just like to ask him one question. I welcome the Bill. I approve of every word he said. But there seems to me to be one rather exasperating thing in our otherwise excellent taxi service in London. It is that too often taxis, with their "For hire" light on, pass you when you hail them. I suggest to the noble Lord that he might consider putting an Amendment into this Bill to say that a taxi driver, if he is going home, should switch this light out, but that if he has it switched on he ought to stop when he is hailed. In the last six months taxi

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after taxi has passed me with lights blazing showing they were for hire, simply because the drivers wanted to go home. All I am suggesting is that, if they want to go home, they should switch their light out.
VISCOUNT MILLS: My Lords, with your Lordships' permission, I should like to intervene for a moment. Having listened to the speech of the noble Lord, Lord Moynihan, I thought that it could be construed as an attack on taxi drivers generally. I have used taxi drivers a great deal in the last few years, and I have never once experienced any unfairness or any discourtesy. I take my hat off to the taxi drivers of London, and I was very sorry to hear Lord Moynihan's speech.
4.44 p.m.
LORD STONHAM: My Lords, I was very pleased to hear that tribute from the noble Viscount, Lord Mills, to the—perhaps he would agree with me in saying this—generations of London taxi drivers to whom we all owe a great deal. When I heard the speech of my noble friend Lord Lindgren, I thought that I myself had been somewhat remiss in not enlarging on that point with some emotion myself, but I rather felt that your Lordships would prefer that I dealt strictly with the Bill. But I am very glad that the last three speakers have emphasised that point, with which I very much agree.
The noble Lord, Lord Boothby, said that one exasperating thing he found in an otherwise excellent taxi service was that sometimes you found a taxi, with its "For hire" light blazing, dash by you and take no notice of being hailed. I can only say that anyone who will do that to Lord Boothby must be lacking in discernment. I have had it happen to me with a bus, but not with a taxi. But whether or not we can have a by-law or an Amendment on this point is certainly not a matter to be dealt with now; it may well be a matter for consideration by the Committee.
My noble friend Lord Lindgren rightly referred to the long training needed by a taxi driver, to the immense knowledge of London he has to acquire, and to the many and important restrictions and regulations which taxi drivers have to observe. Their knowledge of London is
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quite remarkable. I confess that, as a guest, of course, I lunch or dine at a number of clubs. In most cases I say to the taxi driver, "Such-and-such a club", and he takes me there, even if I have not a clue where it is within half a mile or so. It is very much like the typist who said she had had a wonderful holiday in Majorca, and when asked where it was she said, "I don't know. We went by air". It is very much the same with a good many people who take a ride in a London taxi. It is a very wonderful service. Some points of dissatisfaction have rightly been mentioned in the debate. I think that the great majority of taxi drivers and taxi owners would agree that it is right to raise these points. They are as anxious about them as anyone else, but it is just as well that we recognise the great value of this service. The taxi drivers, among many things in this great City, are almost unique in the world, and it is important that we should recognise it.
My noble friend Lord Lindgren doubted whether Clause 4 was protection enough. I am convinced that it is in respect of the job which it sets out to do, which is to make it as sure as it is humanly possible to ensure that a private hire car cannot be flagged down in the street in the belief that it is a licensed taxi cab. That, I believe, the Bill achieves. Other matters—such as the relationship over the whole field of cars that you pay to take you about, between licensed cabs and private hire cars—I think should be properly left to the Committee which is examining these matters and which will consider evidence from both sides.
The noble Viscount, Lord Furness, put what was to me a very fine point. I will certainly write to him about it—I refer to the "there and back" journey—but I would say this. I would certainly regard the charging of a higher fare, even without this Bill, as an unwarrantable imposition, and certainly when the Secretary of State frames his regulations under the Bill I will do my best to ensure that this sort of thing could not happen and that there will be no dubiety about it.
I was very grateful that the noble Lord, Lord Derwent, welcomed the Bill, as did the noble Viscount and my noble friend. I think it has been given a general welcome. Indeed, I am sorry we have

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been so long in bringing it in. The noble Lord mentioned that in the dim dear days almost beyond recall, when his noble friend Lord Brooke of Cumnor was Home Secretary, he thought there was a draft Bill in the Home Office. I can only say that this was one of my early "loves" when I went there. I do not remember ever seeing such a draft Bill. But he is quite right: this is a very difficult matter. I mentioned when I introduced the Bill that it was two years ago when I personally met a committee when there was a hope of a Private Member's Bill being introduced by my late noble friend Lord Monslow. We in fact agreed about it round the table in my room, and the Bill was going to be introduced in another place. But three or four days later—no! It was nothing to do with the Home Office; it was nothing to do with my noble friend. But these things happen, and so it was delayed for another year.
The noble Lord asked about the London Joint. Consultative Committee, and asked whether we were going to put a bomb under it. He must surely know that the London Joint Consultative Committee is expressly precluded from considering fares. Fares do not come within its remit at all, so of course it does not consider them. Applications for increases in fares will continue to be dealt with in exactly the same way as in the past. In fact we have not had an application from the trade for an increase in fares since 1964, so naturally we have not had to consider it. The London Joint Consultative Committee will continue to consider matters of interest to the trade. There have been no meetings recently because the trade have not suggested any points that they wish to have discussed within that Committee.
LORD SILKIN: My Lords, can my noble friend tell us briefly what are the functions of this Consultative Committee?
LORD STONHAM: My Lords, it is a Joint Consultative Committee consisting of all sections of the trade—those who own cabs, those who own and drive cabs, and those who merely act as journeymen cab drivers—together with Home Office officials, who sit to discuss matters of joint interest to the cab trade, other than fares. There are many matters of interest to them.
LORD DERWENT: My Lords, do I take it then that the Committee never takes a decision about anything? Do the members only consult?
LORD STONHAM: My Lords, if this Committee took a joint decision which required either administrative action or legislation then it would be highly likely that action would be taken. This surely is current normal practice: when a Committee is appointed which advises the Secretary of State, the decisions as to action must be taken by him.
LORD DERWENT: Certainly; I agree.
LORD STONHAM: My Lords, the noble Lord asked me a question which I think probably every noble Lord wanes to know about, and that is with regard to the new charges for the longer journeys. We intend to arrange for the new rates to be shown on the meter, and I think the noble Lord was tinder some misapprehension when he said we must ensure that people cannot be "taken for a ride." What he meant was that we must ensure that people can be taken for a ride and not overcharged; and in order to ensure that, we shall not fix a fare from London Airport to Bayswater or Hyde Park Corner. The fare will be on the meter, and in due course people who do that journey often will know how much it will cost.
The noble Lord, Lord Derwent, also asked about the transfer of responsibility to the Ministry of Transport. I must confess that the mere suggestion came us a great shock to me. I really cannot tell him anything in addition to what the then Home Secretary said, in reply to a Question some considerable time ago, which was referred to the Prime Minister on March 9, saying that departmental responsibilities will remain as they are until after the Departmental Committee's report is complete, which will be some time hence. We shall then be in a position to consider what, if any, changes are necessary.
With regard to the 6-mile limit, the noble Lord, Lord Derwent, said that this was nonsense. He said it was related to the days of the horse-drawn vehicle—and it certainly was. But the 6.-mile limit is now also a protection to the cab driver.
LORD DERWENT: My Lords, I did not think I had explained myself very well. I still think it is nonsense. This limit was made for the horse, because in those days a 6-mile journey took a considerable time. It cannot really be said to apply to the cab driver now, because a 6-mile journey, even in London, takes very little time indeed.
LORD STONHAM: My Lords, there are many areas in London to-day, and many times of the day, when a 6-mile journey takes just as long in a cab as it would with a horse.
LORD BOOTHBY: In fact it takes much longer.
LORD STONHAM: It is certainly much quicker to travel by bicycle; and in some instances it would be even quicker to walk. The point with regard to the protection of the cab driver is a valid one. If he has to go from Victoria to Muswell Hill, which is about six miles, he has to go through a great deal of traffic and possibly come back again. If he is towards the point where he has to hand over to his next driver—because as your Lordships know drivers share cabs—it would be proper for him to refuse.
The noble Lord, Lord Moynihan, made the point that we should repeal virtually everything in these old Acts that was obsolescent.
LORD MOYNIHAN: My Lords, I said "obsolete", not "obsolescent".
LORD STONHAM: My Lords, I take the noble Lord's point. In fact that is what I meant to say, because I know that that is what he said. But there are many places in England where there are still horse-drawn vehicles plying for hire—for instance, the front at Blackpool, which is not quite so fashionable as Bayswater. It is because some of these old Acts still have a purpose that they are not repealed.
LORD MOYNIHAN: My Lords, I thought I was right, and I find that I am. I see that the City of London is mentioned twice in the Long Title of the Bill. This is a Bill for the City of London, and I do not think there are any horse-drawn vehicles plying for hire in the City of London. A few years ago, in Hyde Park, there may have been a couple of
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what the Indians call "gharries", but I do not know whether there are any left to-day. In any case, that is surely an entirely different matter.
LORD STONHAM: My Lords, it would be wholly unsafe for anyone in this House to say that anything had died out in London. The reason for the twice-repeated mention of the City of London is because this Bill applies to London cabs, which means not only the Metropolitan Police District but the City of London. That is the reason why we have not gone into a great many of the matters covered in other Acts, and also because it would be wrong, in a short Bill of this kind, with its few limited, though useful, objectives, to undertake a whole review of the Hackney Carriage Acts.
The noble Lord, Lord Moynihan, raised a point on parking. He will be aware that Clause 3 allows taxis to park in meter bays, which they may not do at present. When he spoke about "five minutes on the yellow line" I am sure he did not mean—and if I am wrong he can say so—that he wanted the parking regulations to be altered. If he did, I would tell him that that is a matter for the Ministry of Transport. But I think he was talking about an alteration in the restrictions on hackney carriages being left unattended. If that is so, there would be no danger of action being taken in the instance he cited, namely of a cab driver helping his fare—perhaps an old lady or somebody with a child—and who for that reason has to leave his cab unattended for a short period. No policeman would be so foolish as to act in those circumstances; and even if he did, I am sure that no conviction would lie.
The noble Lord referred, graphically and I am afraid accurately, to the business of a few taxi-drivers who ply this extraordinary trade in a small part of the West End of London and who receive payment. There is no secret about it. They are advertised in some papers. This is one of the advertisements. It says here:"—pays you 30/-per person that you bring along". Certainly it is a very unpleasant sort of business and it is difficult to see how a taxi-driver can conduct such a business and at the same time comply with the conditions of his licence. The noble Lord, Lord Moynihan said, quite rightly,

905
that it was not good for the country's image, and it is not good for the catering and entertainment business. But he also said, which was not correct, that the police were unable or unwilling to make arrests. That is not so.
I will now give him the facts for which he asked. First, with regard to the law, there is no specific offence of "touting" in the London Hackney Carriage Acts, and in fact police normally take action under Section 33 of the London Carriage Act 1843—we still need some of these old Acts—which states:
"Every driver who shall ply for hire elsewhere (not including private property) than at some standing or place appointed for that purpose commits an offence."
The penalty is £10. It became £10 from January 1 this year, under the 1967 Criminal Justice Act.
VISCOUNT COLVILLE OF CULROSS: My Lords, I think it was the Criminal Law Act, but I may be wrong.
LORD STONHAM: If the noble Viscount will look, I think he will find it is in Schedule 5 of the Criminal Justice Act. Attempts have also been made by police to report drivers "touting" in exactly the circumstances described by the noble Lord for the offence of "misbehaviour" under another section of the 1843 Act, Section 28, which provides a punishment for every driver who during his employment shall be drunk or make use of any insulting or abusive language or shall be guilty of any insulting gesture or any misbehaviour. The penalty is £3 or two months' imprisonment; and this was not increased, the noble Viscount will be glad to know, under the Criminal Justice Act 1967. It says so in my notes and I do not have to rely on memory. Unfortunately—perhaps I should not say unfortunately—the courts have taken the view that "touting" in the circumstances described is not misbehaviour, so the police drew a blank over that. The noble Lord asked me how many prosecutions there have been for this offence. In the whole of the Metropolitan Police district in the first nine months of 1967, 72 cab drivers were reported for "plying elsewhere"—that is the offence. Of more immediate relevance to Lord Moyniham's point, there were 27 cases reported at the West End Central police station alone. These
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resulted in 7 convictions, 9 cautions, 2 dismissed, 3 no further action and 3 awaiting decision of the court.
LORD MOYNIHAN: My Lords, I am extremely impressed by the figures the noble Lord has given, but I wonder whether he agrees that it would be perfectly possible to have 27 prosecutions every evening. Could he hold out some hope that the police might be instructed by the Home Office to conduct some sort of campaign to try to eliminate this practice? I wonder, further, if he would give an answer to the question as to whether he feels it would be possible to prosecute cab drivers directly soliciting for prostitutes under the law to do with living off the immoral earnings of such prostitutes.
LORD STONHAM: This would be entirely a matter for the courts. I cannot give assurances or judgments on hypothetical cases like that. It would be a matter for the police, and for consideration by the Director of Public Prosecutions. If he was satisfied that a prosecution should take place, the court would decide. No one, I am sure, could give an answer to the noble Lord on a question like that. On the other point, so far as we are aware, no offence of this kind has been committed so far this year, since the £10 fine began. Therefore it appears to be having some effect. The noble Lord asked whether I would not agree that 27 offences are committed every night. I would not agree. I do not know that. The noble Lord may be right, but I do not think so. I do not think it can be happening on that scale.
LORD MOYNIHAN: If the noble Lord would give me one evening of his time, any time he chooses, I would prove it to him.
LORD STONHAM: I think the police always do this job better than Members of your Lordships' House, and it can be safely left to them.
There is one very important matter which I have not yet mentioned. This is the most important sanction of all. Under Section 30(1) of the London Cab Order 1934, the Deputy Commissioner of the Metropolitan Police has the power to revoke or suspend a cab driver's licence if he is considered unfit to hold such a

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licence. Of course, this is a serious step, and it must not be taken lightly, for it means taking a man's living away from him. But where a driver is persistent in the type of behaviour associated with "touting", then consideration is given to his suitability to hold a licence. In accordance with this policy, two drivers had their licences revoked or suspended last year. It is not that the fines are negligible.
I know that the noble Lord said this to the best of his opinion, but it is quite untrue that the police are unable or unwilling to make arrests. It is an extremely difficult matter, but the fact is that they are succeeding. They are prosecuting. I would suggest to the noble Lord that in raising the matter as he has in this way it may well be that he has achieved, quite rightly, the objective he had in mind of bringing this unhappy practice to public notice. He may also persuade some people who go to these clubs in this way what enormous sums they are paying if the clubs can afford to pay the taxi driver £2 a head. I am sorry about the 37 letters from the manager of the Gargoyle.
LORD MOYNIHAN: They were from the manager of the Gargoyle and other West End establishments.
LORD STONHAM: I should be very glad if the noble Lord would send them to me, and I will do my best to see that the matter is cleared up. I have tried to answer all the questions. I am grateful for the general welcome your Lordships have given and the interest shown in the Bill. I hope that this will continue during the remaining stages, and that they will not be so strenuous that they take a long time to get through.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

ROYAL ASSENT
5.9 p.m.
THE DEPUTY CHAIRMAN OF COMMITTEES (BARONESS WOOTTON OF ARINGER): My Lords. I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified her Royal Assent to the following Acts:
Consolidated Fund Act,
Provisional Collection of Taxes Act,
Capital Allowances Act.
House adjourned at ten minutes past five o'clock.