Sitting of 12 February 1968

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
DEATHS OF MEMBERS
Mr. Speaker: I regret to have to inform the House of the deaths of Samuel Sydney Silverman, esquire, Member for Nelson and Colne, and Richard Emmanuel Winterbottom, esquire, Member for Sheffield, Brightside, and I desire, on behalf of the House, to express our sense of the loss we have sustained and our sympathy with the relatives of the hon. Members.
ORAL ANSWERS TO QUESTIONS
  TECHNOLOGY

    Civil Aircraft (Supersonic Flight)
    Mr. Corfieldasked the Minister of Technology what progress has been made in reaching agreement with the United States Government in regard to regulations governing supersonic flight of civil aircraft over land.
    The Minister of Technology (Mr. Anthony Wedgwood Benn): We and the French are discussing with the United States authorities various technical and operational aspects of supersonic flights by civil aircraft, but it is too soon to discuss specific regulations.
    Mr. Corfield: Have the right hon. Gentleman's discussions included the United States, and, if they have, will he bear in mind the importance of making any agreement sufficiently long-term to cover the American S.S.T. as well as the Concorde?
    Mr. Benn: Yes, Sir; obviously, we have everything to gain by keeping in close touch with the American authorities, and we have this point in mind.

    Buccaneer Aircraft
    Mr. Corfieldasked the Minister of Technology, what redundancies have resulted from the recent cancellation of Buccaneer aircraft for the Royal Navy; and what proposals he has to ensure a more stable employment position in the aircraft industry.
    The Minister of State, Ministry of Technology (Mr. John Stonehouse): Hawker Siddeley Aviation has announced that about 1,000 men will become redundant in the next few months at Brough. It has since been announced that these redundancies will be reduced to about 500 men. Employment in the aircraft industry has been fairly stable for the last three years, and the industry has a substantial forward programme of work.
    Mr. Corfield: Does not the hon. Gentleman realise that that is really an argument for hastening the review of R.A.F. requirements? Is it not time, for example, that we had a firm production contract for the Harrier, among other things?
    Mr. Stonehouse: There is a firm contract for the R.A.F. programme now arranged. The actual agreement on production of the Harrier has not been fixed, although we have been trying to reach agreement with the firm on contract provisions for some time.
    The main matter raised in the Question is employment stability. I can say without fear of contradiction that there has been more employment stability in the aircraft industry over the last three years than in any other similar period since the end of the war.
    Mr. Boyd-Carpenter: Would not employment stability in this firm and industry be greatly improved if the Government would reconsider the ban on the export of Buccaneers to South Africa? Now that they have decided to authorise the export of handcuffs, will they not permit the export of Buccaneers, which are much less effective weapons of oppression?
    Mr. Stonehouse: I do not think that it would affect the position to a great extent. What has happened in the last three years is that the Government have given priority to production for civil aircraft

    919
    and less emphasis on defence employment, with the result that the long-term stability of the aircraft industry has been endorsed. If right hon. and hon. Members opposite will look back to the figures during the period of their Administration, they will notice that in the three years to 1960 the reduction of men employed in the aircraft industry was 21,000, in the three years to 1964 the reduction was 37,000, and in the last three years the reduction, depending on the month of comparison, has been between only 3,000 and 6,000 men.
    Mr. Speaker: Order. Questions and answers can be too long.

    Shipbuilding Industry
    Mr. Wingfield Digbyasked the Minister of Technology how many shipbuilding yards, launching what annual tonnage, are situated outside the development areas, making them ineligible for regional employment premium payments and therefore placing them at a disadvantage with other yards; and what steps he intends to take to restore the balance.
    The Joint Parliamentary Secretary to the Ministry of Technology (Mr. Gerry Fowler): About 30 yards, which over the last five years have together launched less than 30,000 gross tons a year of merchant ships of 100 tons or over. I am not convinced that the shipbuilding industry should be treated differently from others as far as regional employment premium is concerned, but we have advised shipbuilders outside development areas with special local problems to submit evidence to the Hunt Committee.
    Mr. Digby: Does the hon. Gentleman realise that in the shipbuilding industry this system of yet further advantages for development areas is working extremely unfairly, particularly at a time of highly competitive tendering? Will he take real notice of this grievance?
    Mr. Fowler: We have taken notice of the submissions made to us, and, as I have said, we have advised firms to make submissions to the Hunt Committee. There is no evidence that the big yards mainly in the development areas have been taking an above average proportion of the orders for which small yards also compete.
    Mr. Rankin: But is my hon. Friend aware of the importance of good relations between men and management in leading to the success of the shipbuilding industry, and is he aware that due to this last Friday Fairfields declared a profit for this year of £300,000 and are doing in two years what it was originally felt could not be done in five?
    Mr. Fowler: I fully accept that. I might add that the effect of uncompetitive methods, or a decline of local markets in certain areas which shipyards were founded to serve must not be blamed on the R.E.P.
    Mr. David Price: Is the Minister aware that his substantive reply only covered merchant shipping and not naval work? Is he aware that one of our most successful exporters is a relatively small company, Vosper-Thorneycroft, which has a better export record in naval craft than any big yard and is not in a development district? Its work is labour-intensive and it has a legitimate grievance. Will he look at it?
    Mr. Fowler: I am visiting Vosper-Thorneycroft in the near future. When British shipbuilders are competing with world competition, it is not clear that R.E.P. is a disadvantage to them.
    Mr. Willeyasked the Minister of Technology what was the value of orders taken by the British shipbuilding industry in 1967.
    Mr. Fowler: The value of orders for new construction taken in 1967 is estimated at £151 million. Information is not available about orders taken for repair work.
    Mr. Willey: Has the very welcome increase in orders in the last quarter of last year been maintained this year?
    Mr. Fowler: It is too early to say what is the pattern for this year. As my right hon. Friend is no doubt well aware, if often takes some time to bring an order to fruition, and we still cannot judge what is the post-devaluation situation in ordering.
    Mr. David Price: Will the Minister bear in mind that although there was a very good increase in orders in the last quarter, they were largely concentrated on super-tankers, and this gives rather a

    921
    bias to the general increase in orders, which both sides of the House look to?
    Mr. Fowler: I entirely agree with the hon. Gentleman. The 1967 figure includes £34 million-worth of orders for five very large tankers. To some degree, this distorts the figures. The general order position is not nearly as encouraging.
    Mr. Blenkinsop: While we are all delighted that there have been the new orders at the end of last year and that orders are coming in now, can my hon. Friend do anything to speed up turning the orders into work in the yards? There is great anxiety about the delay on the design and preparation side.
    Mr. Fowler: That is a matter for the yards' management. I cannot urge them to change their management procedures in this way.
    Mr. McMaster: Is the Minister aware that the picture has been greatly distorted by a few large tankers and that because of the shortage of orders for smaller ships heavy redeployment has been forecast by Harland and Wolff, one of the largest yards in the country? Will he do something to speed up the placing of immediate orders to avoid such redundancies?
    Mr. Fowler: Much as we desire to see an, increase in the number of orders placed, we are not responsible for the orders placed by shipowners. We can, and do, encourage them to place orders with British yards, but we cannot make them do so.
    Mr. R. C. Mitchellasked the Minister of Technology what requests for financial aid he has received from those shipbuilding firms who do not receive the regional employment premium; and if he will make a statement.
    Mr. Fowler: My right hon. Friend has not been asked by the Shipbuilding Industry Board to approve any loans or grants to such a firm, but I understand that the Board has a number of such cases under consideration.
    Mr. Mitchell: Would the Minister not agree that the differentiation caused by the regional employment premium does not make sense in the shipbuilding industry? Would he in fact devise some
    922
    method of giving it to the industry as a whole rather than differentiating between the regions?
    Mr. Fowler: This matter has been dealt with in reply to Question No. 3. I think my hon. Friend would agree that the Government's policy of attempting to take new work to the development areas is a sensible one, and we cannot make exceptions for particular industries without strong evidence indeed.
    Mr. McMaster: In view of the recommendations for a consolidation of the shipbuilding industry, will the Government consider publishing a plan for the further amalgamation and reconstruction of the shipbuilding industry?
    Mr. Fowler: I do not think that this matter needs a plan. We are hoping that the industry will produce proposals with encouragement from the Shipbuilding Industry Board. That is what the Board was set up to do.

    European Airbus
    Mr. Martenasked the Minister of Technology by what date the proposed European airbus will be in airline service; and by what date he estimates that its possible rivals will be in airline service.
    Mr. Stonehouse: The European airbus should enter service early in 1973. An American airbus might come into service in 1972, but as it would have a longer range it would not be a direct competitor.
    Mr. Marten: Is it true that the three national airlines of Britain, France and Germany must commit themselves to this aircraft by the summer of this year? If they do not, or if the orders do not amount to 75, will the project be cancelled or will the French go it alone? Would not that be very serious for the long-term stability of our industry?
    Mr. Stonehouse: It is true that the airlines will be expected to enter into commitments by the summer of this year. There is another detailed Question on the Order Paper about this point.
    Mr. Robert Howarthasked the Minister of Technology if he will make a statement on the progress of negotiations for a European airbus.
    Mr. Stonehouse: The work of the first phase of the project is proceeding well. The next stage is the submission of detailed reports by the companies at the end of April.
    Mr. Howarth: Can my hon. Friend be a little more firm on the question of proposed dates? Is it possible to give dates for projected first flight and possible entry into service?
    Mr. Stonehouse: As I have announced this afternoon, we hope that the aircraft will go into service in 1973. We are satisfied that the design work is going well and we hope that we will be able to get the airlines to consider their commitments before the summer.
    Mr. Robert Howarthasked the Minister of Technology what airline interest has been expressed to him in the European airbus by the British European Airways, Air France and Lufthansa.
    Mr. Fortescueasked the Minister of Technology what airlines have notified him of an interest in the A300 airbus.
    Mr. Stonehouse: British European Airways, Air France and Lufthansa are co-operating in the preparation and evaluation of the aircraft's specification. Interest in the aircraft has been expressed by many airlines, both inside and outside Europe.
    Mr. Howarth: Can my hon. Friend say whether approaches have been made specifically to Alitalia, one of the other major European airlines, whose order for this aircraft would be of prime importance?
    Mr. Stonehouse: We know that Alitalia has been considering an airbus, and I discussed with Ministers in Rome last June the prospect of the Italians co-operating with us in the production of the airbus. It was made clear to them that this would be tied to purchase of the aircraft by Italian airlines.
    Mr. Fortescue: While welcoming the recent news that the two French national airlines are now firmly interested in this aircraft, may I ask whether it is still the Minister's intention that work on the aircraft should not go forward until 75 firm orders are in the bag?
    Mr. Stonehouse: That has been our position, it is our position and it will continue to be our position, because it is on a basic firm market by the three main airlines concerned that this aircraft can become a viable project, particularly for our own United Kingdom firms involved.
    Mr. Burden: Does the hon. Gentleman really expect that customers, particularly foreign customers, will place firm orders for this aircraft before they get firm particulars of its performance, which have not yet been forthcoming?
    Mr. Stonehouse: That is exactly what the design phase is intended to provide. The companies will give those specifications to the airlines within a few weeks and the airlines will then be expected to make a commitment. Airlines in the United States book their aircraft well in advance before the constructors begin to spend money on the building of an aircraft. We must adopt the same philosophy in Europe if we are to make a successful aircraft industry.

    Concorde Aircraft
    Mr. Martenasked the Minister of Technology if he will now make a further statement on the financing of the Concorde.
    Mr. Biffenasked the Minister of Technology if he will make a statement on the financing of the post development stages of the Concorde; and if he will give an assurance that the liability to British public funds will be strictly limited to development costs.
    Mr. Benn>: Discussions with the manufacturers on the financing of Concorde production are continuing. I informed the House on 1st February that I would introduce a Concorde clause into the Industrial Expansion Bill at the Committee stage and would make a further statement to the House. I have nothing to add as yet.—[Vol. 757, c. 1590.]
    Mr. Marten: Does the proposal to finance the Concorde in this way through the Industrial Expansion Bill mean that the Government could be contemplating taking equity shares in the British Aircraft Corporation?
    Mr. Benn: I ask the hon. Gentleman to await the publication of the Clause. [HON. MEMBERS: "Why?"] Because I promised to make a statement to the House, and I think that it is better to wait until I make that statement and table the Clause. I can, however, make it clear that the Concorde production finance will be by means of a separate Clause and not under general powers in the Bill.
    Mr. Biffen: As the British Aircraft Corporation is so eloquent about the aircraft's economic prospects, is not it extraordinary that it should not itself wish to finance the post-development cost rather than swing it on to the British taxpayer?
    Mr. Benn: It is not expected that the Government will provide all the finance for the Concorde. One of the things we are discussing with the firm is the point the hon. Gentleman raises, but I understand that even the United States Government will be paying some part of the American S.S.T. programme.
    Mr. Ellis: What is the position as regards the production line? Has it been held up in any way by problems of finance?
    Mr. Benn: There has been no delay whatsoever in the work on the production of aircraft, for which we have been making money available.
    Mr. Corfield: Will the right hon. Gentleman bear in mind that unless the Concorde comes to production with the minimum of delay, and then can go into production as rapidly as possible, the total cogs are bound to inflate?
    Mr. Benn: Yes, but there has been and will be no delay. The hon. Gentleman's Question gives me the opportunity of saying so.
    Mr. Onslowasked the Minister of Technology when the first flight of the Concorde prototypes 001 and 002 will now take place.
    Mr. Hastingsasked the Minister of Technology what is now the forecast date for the first flight of Concorde 001.
    Mr. Benn: The manufacturers are making a detailed review of adjustments and checks remaining to be completed before the first flight of zero-zero-one.
    926
    They will be making a statement about a revised first flight date as soon as they are in a position to make a reasonably firm prediction. I am not prepared to anticipate this statement. First flight of zero-zero-two remains planned for September, 1968.
    Mr. Onslow: The House will be encouraged to know that there has been no delay for any reason in 002. As to the roll-out of the aircraft, will the Minister give the firms responsible an indication that it would be a good thing if the men in the industry, particularly on the shop floor, who have taken such a part in the project and worked so skilfully, will be able to take part in the ceremony, as they were prevented from doing in Toulouse?
    Mr. Benn: This is a matter principally for the firms, but I have taken the opportunity of discussing informally with B.A.C. how this might be handled. The hon. Member's suggestion is a very useful one.
    Mr. Hugh Jenkins: When the flight takes place, will my right hon. Friend pay particular regard to it especially in relation to noise levels, both supersonically and subsonically?
    Mr. Benn: I should be very alarmed if the first flight was supersonic. The purpose of the first flight is to make preliminary tests, and on that occasion engine noise will be noted. That is why test flights are held.
    Mr. Hugh Jenkinsasked the Minister of Technology what effect solar flares will have on Concorde when flying at a great height.
    Mr. Benn: They will have no significant effect either on the aircraft or its occupants. On the very rare occasions when a solar flare occurs that is of sufficient severity to justify the precaution, the aircraft will descend to an altitude lower than that at which it would normally cruise.
    Mr. Jenkins: Is my right hon. Friend aware that the engine which is to be used for this aircraft, the Olympus 593, consumes more fuel than any other known aircraft engine, and that if a solar flare were experienced in mid-Atlantic, the aircraft would not be able to make landfall in either the United States or the United Kingdom?
    Mr. Benn: My hon. Friend is misinformed on this. The Concorde has about the same range subsonically as supersonically. There is an in-flight warning system that will give 20 minutes warning of a solar flare. All that is required is that the aircraft descends from 60,000 to 50,000 feet. I must tell the House that even in this Chamber we are exposed to solar flares, but they are not fatal at this altitude.
    Mr. Corfield: Does not the right hon. Gentleman agree that it is time that we started taking a pride in some of our achievements, instead of constantly banging them?
    Mr. Benn: I absolutely agree. I must say that that warning applies to both sides of the House in certain circumstances.
    Mr. Marten: Would the Minister inform his hon. Friend that all these matters were gone into most carefully in 1962 and 1963 when this subject was being projected? Would he advise him to stop knocking the Concorde on every opportunity?
    Mr. Benn: Yes, if hon. Members opposite will stop knocking Beagle, and one or two of our other aircraft projects. One of the problems here is that this is exploring the frontiers of technology. Some people think that Concorde will be avoiding solar flares like Dr. Who avoiding the Daleks, and it is not like this at all.
    Mr. John Hynd: May we take it from the Minister's Answer that the Government intend, in spite of Press reports, to go on with the Concorde?
    Mr. Benn: I have taken the opportunity of making this clear, but I am glad to have a fresh opportunity.
    Mr. Jenkins: On a point of order. In view of the unsatisfactory nature of that reply, I beg to give notice that I will seek to raise this matter on the Adjournment at the earliest possible moment.

    Wear Shipyards
    Mr. Willeyasked the Minister of Technology what was the cost of the report by outside consultants on a scheme for the merger of Wear shipyards.
    Mr. Fowler: I understand that the Shipbuilding Industry Board has offered
    928
    a contribution of £12,600 towards the cost of this report.
    Mr. Willey: I recognise that the negotiations must necessarily be confidential, but as their results will considerably affect Sunderland. and public money is involved, will my hon. Friend consider making a statement on the issues concerned in them?
    Mr. Fowler: That would be singularly unwise at this stage. We can scarcely publish the Report; neither the Geddes Committee nor the Act envisaged the publication of Reports. for this would be scarcely conducive to progress in the negotiations. We hope for a rapid solution to this problem.
    Mr. Wingfield Digby: Has the Shipbuilding Industry Board agreed to contribute to any further merger investigations of this kind beyond the ones we already know of?
    Mr. Fowler: I do not think that that question arises from the main Question. As far as I am aware, the answer at present is, "No".
    Mr. David Price: Am I correct in believing that, although these yards have not yet produce a successful merger. they have already worked together in a Liberty ship replacement order?
    Mr. Fowler: That is scarcely correct. Two of the yards have worked together, namely Austin and Pickersgill and Bartrams, but these are all separate firms. The other three yards on the Wear are a part of a single firm, the Doxford and Sunderland Shipbuilding and Engineering Company.

    Coal Derivatives
    Mr. Eadieasked the Minister of Technology (1) what part his Department has played during the last 12 months in the technology of derivatives from coal;
    (2) to what extent his Department has been involved in experiments of extracting sulphur on the sites of coal-fired power stations; and if he will make a statement.
    The Joint Parliamentary Secretary to the Ministry of Technology (Dr. Jeremy Bray): The Ministry's Warren Spring Laboratory is investigating processes for

    929
    the recovery of sulphur from flue gases, but not specifically in relation to power stations. The Central Electricity Generating Board is concerned with the application of such processes to power stations, and there is close collaboration between the Board and the Laboratory. The Department is doing no other work on derivatives from coal because no prospects of economic operation are foreseen.
    Mr. Eadie: I am grateful to my hon. Friend for his reply. Does he agree that it makes the case for a complete re-examination of the whole question of derivatives from coal, that it indicates to some extent that the Report of the Wilson Committee on Coal Derivatives in 1960 is now dated, and gives grounds for examination forthwith of the use of one of the only raw materials we have in this country in anything like abundance?
    Dr. Bray: The Ministry of Power is responsible for research on coal products in the first place. My hon. Friend would be mistaken if he supposed that its verdict on coal products would be different from that of the Wilson Committee. There is no case for sulphur removal as a source of sulphur, but the sale of by-product sulphur could cut the cost of reducing air pollution.

    Anglo-Soviet A greement
    Mr. Lubbockasked the Minister of Technology what consultations were held with the Royal Society, the Confederation of British Industry and the Council of Engineering Institutions, respectively, on the preparation of the Anglo-Soviet technological agreement.
    Mr. Benn: Close consultations were held with the Confederation of British Industry, whose Captains of Industry visit to the Soviet Union had resulted in agreement for collaboration by industry in a number of areas. No direct interests of the Royal Society or Council of Engineering Institutions were similarly involved. I shall consult them as necessary in the course of implementing the agreement.
    Mr. Lubbock: Is the right hon. Gentleman aware that the C.E.I. and the Royal Society might have liked to be consulted about the preparation of the agreement,
    930
    and, although it is too late to rectify that now, will he ensure that in the meetings which will be arranged between himself and Mr. Kirillin or the representatives of each party the C.E.I. will be asked to nominate persons who would assist in the deliberations?
    Mr. Benn: I shall certainly keep in touch with the C.E.I. on this, as I have done over a whole number of issues since I have been in the Department. Professor Blackett is my scientific adviser and Deputy Chairman of the Advisory Council on Technology, and the relations through him with the Royal Society have been good. I shall not overlook any possibilities of bringing these organisations in.
    Sir H. Legge-Bourke: Is it not important to distinguish between collaboration in the scientific general basic research field and collaboration and doing business on a commercial basis in technological equipment? Will the right hon. Gentleman make clear that there is a clear distinction between the rôles of the Royal Society on the one hand and industry on the other?
    Mr. Benn: That is right. That is why I have encouraged the C.B.I. to make its own direct contacts and have worked closely with it. It is taking the lead in most areas of industrial technology for the very reasons which the hon. Gentleman has mentioned.

    Atomic Energy Authority (Nuclear Power Stations)
    Mr. J. H. Osbornasked the Minister of Technology what negotiations the Atomic Energy Authority has had with prospective aluminium smelting companies with a view to building and operating a power station to supply the needs of the Atomic Energy Authority, Capenhurst, as well as the proposed aluminium smelting industry.
    Dr. Bray: A proposal from Rio Tinto Zinc and the A.E.A. for a jointly-owned nuclear power station was examined by the Government, in consultation with C.E.G.B. This led to consideration of the provision of power for aluminium smelters as a separate issue, and the Government are at present examining proposals.
    Mr. Osborn: Is there any reason why the A.E.A. should not generate its own power for any purposes in conjunction with Rio Tinto Zinc, and are the Government and the Ministry of Technology opposing the project as undesirable or supporting it?
    Dr. Bray: On the contrary, the proposal opened the way to the development of the aluminium smelter industry in this country, which introduced the principle of special tariffs for loads of this characteristic. The Government have said that these loads are in principle available for similar projects, and when proposals are put up for the expansion of Capenhurst the case can be made.
    Mr. Dalyell: Can my hon. Friend say when the examination to which he has referred is likely to be completed?
    Dr. Bray: In accordance with the time scale for the completion of Capenhurst, which is not yet firm.

    Private Industry (Development Contracts)
    Mr. J. H. Osbornasked the Minister of Technology how many development contracts have been placed by his Department with the private sector of industry in 1967; and what has been the total value of these contracts.
    Mr. Fowler: During the year in question a total of 3,490 research and development contracts and amendments to such contracts were placed with industry. The total net value was £171 million.
    Mr. Osborn: Can the hon. Gentleman state how many of these are outside the N.R.D.C., and what method is there for regularly reporting to the House the content and cost of the projects? Has there been any cut in the budget for the current year as a result of the statement in January?
    Mr. Fowler: In answer to the last question, I do not think that this has gone through the machine yet. I am afraid that I cannot give an answer with regard to the N.R.D.C., but I am prepared to write to the hon. Gentleman if he would like an answer.
    Mr. Osborn: Outside the N.R.D.C.?
    Mr. Fowler: Yes, outside the N.R.D.C. I am afraid that we cannot publish de-
    932
    tails of the contracts, many of which are commercial and, therefore, confidential.
    Sir H. Legge-Bourke: Can the hon. Gentleman say what part of the £171 million is concerned with aircraft as distinct from other projects? Can he also say whether in approaching the whole problem the Department makes any distinction between those projects which are designed to exploit to the full the existing state of the art and those which are designed to increase the state of the art?
    Mr. Fowler: I cannot give the exact proportion with regard to the aircraft contracts, but it is a very large part of the £171 million. The objective of such contracts is to make money, to encourage industry to show a profit.
    Mr. Osborn: I beg to give notice that I shall seek to raise the matter on the Adjournment.

    Price Increases (Notification)
    Mr. Biffenasked the Minister of Technology how many price increases have been notified to him under the volutary early warning arrangements since devaluation; how many officials are employed full-time on the vetting of these prices; by what number have these officials been increased since devaluation; and if he will make a statement.
    Mr. Benn: Since 20th November, 1967, my Department has received 47 price increase notifications under the early warning arrangements. Four officials are employed full-time in examining price proposals and dealing with price complaints; their number has not been increased since devaluation.
    Mr. Biffen: Can the right hon. Gentleman confirm that within the figure of notifications that he has given is included the price increase which was proceeded with for hearing aid batteries by Mallory Batteries of 50 per cent. and 78 per cent., and also confirm that the proposed price increase was examined and confirmed by his Department?
    Mr. Benn: My Department does not approve price increases. No Department does under the early warning system. The early warning system provides that the Department shall be notified, and then it is considered by the Department, and

    933
    then, as in this case and in one or two others, reference is made to the National Board for Prices and Incomes. I should make clear that the procedure does not in any circumstances provide for the Government to approve specific price increases

    Beagle Aircraft Ltd.
    Mr. Ridleyasked the Minister of Technology what profit or loss was made by Beagle Aircraft Limited in 1966 and 1967, respectively.
    Mr. Benn: The latest audited accounts of the company are for the periods of six months to 30th June, 1966, and nine months to 31st March. 1967; the trading losses for these periods were £251,000 and £890,000, respectively.
    Mr. Ridley: First, is it true that the company has now lost more than £6 million since it was started? Secondly, can the right hon. Gentleman say why it is that in these days, when secrecy is deplored in the private sector, published accounts for the public sector, which Beagle specifically is, have not been made available to hon. Members?
    Mr. Benn: The hon. Gentleman should recognise that what are described as losses here involve money for the re-equipment and development of the company. I had hoped that the hon. Gentleman would take this opportunity to apologise for having said that the Government have been supporting the company illegally. It is a company which is developing to meet a very rapidly developing market in this field, and I do not think that the hon. Gentleman's contributions have helped very much.
    Mr. Onslow: Leaving all that aside as irrelevant, will the right hon. Gentleman tell us when he expects the company to make a profit and how much public capital will be injected into it over the next five years?
    Mr. Benn: The full amount of capital required to develop the company to take advantage of the very large market—about 12,000 light aircraft a year are made and sold in the world—will be substantial. We shall have an opportunity of discussing this during the Committee stage of the Industrial Expansion Bill.
    934
    It may well be that about £5 million will be required to put the company in a position to get its share of the market.
    Mr. Robert Howarth: Will my right hon. Friend confirm that if the company were allowed to go out of existence there would be no manufacturer of British light aircraft in this country?
    Mr. Benn: It is true that the reason why the Government considered the matter and reached the decision that they did was that when Pressed Steel decided to go out of the light aircraft business this country would have lost its capability in a field where a very large number of aircraft are likely to be wanted in the future.
    Mr. Ridleyasked the Minister of Technology how much public money has been spent on acquiring Beagle Aircraft Limited.
    Mr. Benn: None, Sir.
    Mr. Ridley: Does that mean that the £1 million which the Government owe to Pressed Steel Fisher Ltd. and have owed for the last 18 months has not even had interest paid upon it? Why do not the Government pay their debts to people from whom they buy things, or otherwise pay interest on the money which they owe?
    Mr. Benn: The position is—the hon. Gentleman, I think, knows it very well —that under the Civil Aviation Act, 1949, the Government have the power to support the production of civil aircraft. It is on this basis that every single major civil aircraft, including Concorde, has been supported. The purchase of the aircraft will require legislative authority, and this is being sought from the House in the Industrial Expansion Bill.
    Sir A. V. Harvey: How many orders for aircraft are held for this company at present?
    Mr. Benn: There is another Question on that subject on the Order Paper.
    Mr. Fortescueasked the Minister of Technology what representations he has made to the Government of the United States of America regarding their decision which has prevented Beagle aircraft with United States engines being exported to South Africa.
    Mr. Stonehouse: Although I cannot reveal the nature of discussions with the United States authorities on this question, it is well known that the United States strictly enforces the United Nations embargo.
    Mr. Fortescue: In view of the large sums of public money which are to be poured into this company, can the Minister assure the House that every possibility of installing French, British or any other engines in this aircraft, so that it can be exported to friendly countries, is being explored?
    Mr. Stonehouse: Yes, of course, we will explore that. A re-engining of this aircraft would, however, be a very expensive job and, therefore, we would have to consider it seriously.
    Mr. Corfield: Can the Minister explain why the British Government were prepared to allow this aircraft to be exported, bearing in mind its internal security effects, while refusing to allow the export of Buccaneers which, clearly, cannot have an internal security effect?
    Mr. Stonehouse: We regarded this aircraft as not coming within the United Nations embargo because it was an unarmed civil aircraft. The United States did not take the same view.
    Sir A. V. Harvey: A few moment ago the Minister said that he would tell us how many firm orders had been received for Beagle aircraft. By that, does he mean deposits? Will he now say how many firm orders are held?
    Mr. Stonehouse: That is another question. We will obtain the information and write to the hon. Member.
    Mr. Goodhew: On a point of order. The Minister of Technology, when asked by my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley), distinctly said that he could not give the number of firm orders placed with Beagle Aircraft because he would be giving it in reply to a later Question. We have now dealt with the only other Question on the Order Paper dealing with Beagle Aircraft. Are we not to have an answer from the Minister? If he cannot give it, would it not be more honest for him to say so?
    Mr. Speaker: Whether a Minister answers a Question in the way he answers it is a matter for the Minister.
    Mr. Benn: I understood from my hon. Friend that the Question tabled on the number of orders was withdrawn, and in recollecting that I said that a Question had been tabled. I thought it right to refer to the fact, but if it has been withdrawn I will give the Answer in answer to another Question.
    Sir A. V. Harvey: On a point of order. I seek your protection, Mr. Speaker. In answer to my former supplementary question, the Minister was quite definite that I should get the answer, and the House should get the answer. Later on in Question Time we find that this is not forthcoming. We have been told that we require to put down a Question. Surely the Minister ought to get your permission to give this information to the House, which is very important.
    Mr. Benn: I do not require the permission of the House. I require a Question asking this, then I shall give the answer.

    Aircraft Noise (London Airport)
    Mr. Barnesasked the Minister of Technology what progress is being made with the research currently being carried out into the practicability of requiring aircraft arriving at London Airport to make a steeper two-segment approach in order to reduce aircraft noise.
    Mr. Stonehouse: The Department is undertaking a programme to evaluate the feasibility of the two-segment approach, but it will be some time before an assessment can be made.
    Mr. Barnes: Can my hon. Friend say a little more about the timetable to which I believe the Royal Aircraft Establishment is working? Can he give an assurance that the Government will give full backing to this type of research in view of the great benefits that it could offer to people living immediately under the glide path to London Airport?
    Mr. Stonehouse: I agree that it could be of immense significance in regard to noise some way from the airport, though it will not reduce the noise within four or five miles of the runways. We are

    937
    taking very serious interest in research being conducted not only in Britain at the Royal Aircraft Establishment but also in the United States.

    F111 Aircraft Contract (Cancellation)
    Mr. Hooleyasked the Minister of Technology what steps are being taken by his Department to recruit for employment in Great Britain those British engineers who will have to leave Fort Worth because of the cancellation of the contract with General Dynamics for the F111 aircraft.
    Mr. Stonehouse: I do not expect the cancellation of this contract to have much effect on any British engineers who may be employed by General Dynamics, but the services of Management Selection International Incorporated, the recruiting agency sponsored for the purpose by my Department, will be available for those who wish to return to this country. We have alerted M.S.L. to this point.
    Mr. Hooley: Is my hon. Friend aware that there was a Press report that a considerable number of such people would be free? Does he not think that he should take the same vigorous action to recruit our people who are now in the United States as United States firms take to seize our people over here?
    Mr. Stonehouse: That is exactly what we are doing through M.S.L., through whom we have had a number of inquiries for British personnel in the United States who want to come back to the United Kingdom. But the direct staff with General Dynamics who are employed by my Ministry are, of course, being returned to the United Kingdom.

    Computer Sales (Czechoslovakia)
    Mrs. Renée Shortasked the Minister of Technology what progress has been made on negotiations by International Computers and Tabulators Limited to sell computers to Czechoslovakia, sponsored by his Department; and if he will make a statement.
    Dr. Bray: Negotiations for the sale of computers are a matter for the manufacturers and customers concerned. But I understand that I.C.T. has delivered
    938
    five 1900 series computers to Czechoslovakia, with a further machine on order, to a total value approaching £2 million.
    Mrs. Short: May I thank my hon. Friend for that encouraging reply and point out to him that, in view of devaluation and the fact that our total exports of sophisticated materials such as this to Eastern Europe are very small, there is considerable opportunity for us to go ahead and sell in this market?
    Dr. Bray: I assure my hon. Friend that the companies concerned, with the full support of the Board of Trade and of my Department, give the strongest support to sales in Eastern Europe and that they have not been unsuccessful.
    Mr. David Price: Would the Minister agree that in this market, as in many other markets, it is an illusion to think that one can sell a great deal of sophisticated equipment without entering into some sort of deal that entitles the client country to do some of the manufacture?
    Dr. Bray: That is a point which, as the hon. Gentleman knows, is very much under discussion. There are instances when parts of systems are indeed manufactured under licence in the client country. Those countries are very keen that we should take advantage of some of their technology, too.

    Rolls Royce RB207 and 211 Engines
    Mr. Onslowasked the Minister of Technology what research his Department has conducted into the potential world markets for the Rolls Royce RB207 and RB211 engines.
    Mr. Stonehouse: Market research carried out in collaboration with the manufacturers has shown that both the RB207 and RB211 engines should be highly competitive in world markets. The RB207 is already specified for the European airbus.
    Mr. Onslow: If the European airbus does not materialise, will the RB207 go into any other airframe? Is there any airframe which the Minister can particularise for which the RB211 has been specified?
    Mr. Stonehouse: I do not follow the question. The European airbus will materialise. We are going to build it.
    Mr. Maxwell-Hyslopasked the Minister of Technology if he will make a statement on the latest position in the negotiations about the specification of the Rolls Royce RB211 engine for the United States airbus.
    Mr. Stonehouse: With the full support of Her Majesty's Government Rolls Royce are offering the RB211 for both the Lockheed and McDonnell-Douglas versions of the United States airbus. No decision has yet been made.
    Mr. Maxwell-Hyslop: What technical support is the Minister's Department giving at diplomatic level in the United States? Is there a representative present there so that he can be on call in these very major negotiations?
    Mr. Stonehouse: The highest possible support has been provided to Rolls Royce in its attempt to get the RB211 into the American airbus. Our Ambassador in the United States is doing a great deal to assist.

    Defence Firms (Civil Work)
    Mr. Bishopasked the Minister of Technology what action he is taking to encourage greater diversification of those firms seeking to change from defence to civil work, especially in the aircraft industry.
    Mr. Benn: A substantial and increasing share of the aircraft industry's resources is already devoted to civil work. The Industrial Expansion Bill, which is now before the House, contains provisions which would enable me to support a shift of resources from defence to civil industries.
    Mr. Bishop: Would my right hon. Friend not agree that, with the defence cuts, the changing from swords into ploughshares is urgent, and that more might be done to help in under-water techniques, laser projects and even pot and pan projects, if redundancy is to be avoided?
    Mr. Benn: Diversification is for the firms concerned but what the Industrial Expansion Bill, if enacted, will do, will be to make it possible for launching aid
    940
    to be given for civil projects, and not just for aircraft projects as hitherto. Our own establishments would certainly offer advice on this, and I am naturally anxious to see it happen.
    Sir H. Legge-Bourke: Are we to understand from that answer that one of the major objectives of the Industrial Expansion Bill is to make good orders for firms which were meeting defence contracts and whose defence contracts have now been cancelled? We were not told that on Second Reading.
    Mr. Benn: Not at all. I repeated what I said on Second Reading. We have the illogical position where we are providing launching aid for aircraft but not for any other advance project, and the fact that we would, under the Bill, if enacted, be able to do this, would help to stimulate diversification.

    Variable Geometry Aircraft
    Mr. Hastingsasked the Minister of Technology to what extent, in view of the cancellation of British orders for F111K aircraft, the project study for a British variable geometry aircraft is being accelerated.
    Mr. Edelmanasked the Minister of Technology what progress has been made in connection with the proposal to manufacture an all-British strike aircraft based on the variable geometry principle.
    Mr. Stonehouse: The British Aircraft Corporation is making good progress in its study of the operational and technical factors affecting the possible development of this aircraft.
    Mr. Hastings: Will the Minister accept that this is a totally unsatisfactory Answer to the Question? Is he aware that unless we start to build before long on this design, which should meet European requirements overall, let alone other markets as well, we shall be bypassed, not only by the French but the Germans, who are not so timid as this Government?
    Mr. Stonehouse: The hon. Gentleman has put his finger right on the point when he talks of building an aircraft to meet European demand. That is exactly what we want to do in this case, and a premature building of an aircraft now,

    941
    to meet purely our own requirements, may not meet what we hope in the long run will be a wider European demand, that will make the aircraft far more successful in sales.
    Mr. Edelman: In connection with this project, will my hon. Friend confirm that the Government have now repudiated the policy put forward by the Chancellor of the Exchequer, when he was Minister of Aviation. that Britain will henceforward never build a sophisticated military aircraft alone?
    Mr. Stonehouse: Of course I am not prepared to do that.
    Mr. Goodhew: Is the hon. Gentleman aware that the F111K was to replace the TSR2, which was to replace the Canberra? What does he think the R.A.F. will be doing between now and the time when the Minister makes up his mind and gets such an advance strike and reconnaissance aircraft into production?
    Mr. Stonehouse: As the hon. Gentleman knows this is a question for my right hon. Friend the Secretary of State for Defence. He is also aware that our commitments have been charged.

    Independent Computer Industry (Parliamentary Question)
    Mr. Burdenasked the Minister of Technology what authorities were consulted in providing the answer to a Question on 7th December, 1965, which asked about the criteria for determining what constitutes an independent British computer industry; and what was the total cost of obtaining the information provided.
    Mr. Benn: The answer was given on the authority of my predecessor and I do not think that it would be relevant to give the names of those consulted or attempt to cost their advice.
    Mr. Burden: Would the right hon. Gentleman be surprised to hear that a very eminent and independent authority, carrying out investigations into the cost of Parliamentary Questions, has assessed that the Answer to this Question cost over £800?
    Mr. Benn: This is a question that should be addressed to the Treasury, if it was simply the cost of the Question in
    942
    that particular case. I was asked to calculate the cost of obtaining the information, which indicated a rather different point.

    Northern Region
    Mr. Urwinasked the Minister of Technology what proposals he has for the development of the electronics industry in the Northern Region.
    Dr. Bray: I am taking every opportunity for promoting the development of the electronics industry in the Northern Region, as in other development areas. Employment in telecommunications, radio, and electronics in the Northern Region increased from 17,000 in 1964 to 22,300 in 1966, and is expected to increase as a result of the rationalisation of G.E.C./A.E.I. telecommunications activities. Four development schemes were approved last year which are expected by the applicants to lead to 1,500 new jobs.
    Mr. Urwin: The House will be greatly encouraged by my hon. Friend's reply. I realise that he is fully aware of the need for an expanding electronics industry in the Northern Region, but may I request him to move even faster to achieve this objective?
    Dr. Bray: I am grateful for my hon. Friend's encouragement.
    Mr. Lubbock: Is the Minister aware that, although we welcome the evening out of employment throughout the regions of this country by creating new industry in the North-East and the other development regions, we cannot help deploring the way in which the closure of the G.E.C.-A.E.I. factory at Woolwich has been handled; in particular, the absence of any consultations with the trade unions concerned? Will he ensure, before any final decisions are made, that the trade unions are brought into the picture and that adequate arrangements are made for the retraining and making of redundancy payments to the workers who have been displaced?
    Dr. Bray: This is a somewhat different question. The question of redundancy is a matter of concern wherever it takes place.
    Mr. Urwinasked the Minister of Technology when he intends to establish a research station in the Northern Region.
    Dr. Bray: There are no plans at the moment for establishing a new research station. If another is required the claims of development areas, including the Northern Region, would be given special consideration.
    Mr. Urwin: Is my hon. Friend aware that there is an extremely inequitable distribution of research facilities throughout the country? The Northern Region is singularly badly off in this respect. May I urge him to give further consideration to this matter? If we are to have expanding economy in the Northern Region it is essential that it should have more research facilities.
    Dr. Bray: As my hon. Friend knows, we inherited a very uneven distribution of research activity. Furthermore, the pattern was not well organised in relation to its function. While we are tidying up the research organisation of this country it is unlikely that we shall be able to establish many new research establishments, but I assure my hon. Friend the development areas will be given full consideration.
    Mr. David Price: Would the hon. Gentleman not agree that the largest private commercial industrial research centre is in the Northern Region?
    Dr. Bray: Yes; and the Department is taking every possible step to increase the support for it.

    European Technological Community
    Mr. Moonmanasked the Minister of Technology what are the numbers and the levels of staff in his Department engaged on research or general background material in connection with the establishment of the European Technological Community; and what is the nature and scale of such projects.
    Mr. Benn: My Department is actively participating in the development of the Government's proposals in relation to European technological co-operation. But it is not practicable to segregate this effort from that devoted to other aspects of the Department's work.
    Mr. Moonman: Is my right hon. Friend aware that the reticence of his reply, along with those of his colleagues on Friday, will depress many people in Europe who have accepted the credibility
    944
    of our proposals for scientific and technological collaboration in Europe?
    Mr. Benn: If I were thinking of this from the outside, I should be much encouraged by the idea that European collaboration was not segregated from the normal working of the Department but was integrated in all the industrial divisions, where it should be.
    Sir H. Legge-Bourke: Will the Minister bear in mind that there is a real danger of restricting and restraining industrial co-operation with Europe if we place too much emphasis on the Technological Community as such? What is important is that we encourage firms, for example T.N.P.G., to co-operate with European firms in getting on with a good job?
    Mr. Benn: That is the philosophy we adopt. If the C.B.I., in relation to Eastern Europe, can negotiate direct, so much the better. We regard our job as the removal of obstacles which prevent co-operation taking place fully. That is why patents, specifications, standards, company law and various other aspects of collaboration are our principal concerns. We do not wish to do what industry itself can do.

    Russia, Poland and Roumania (Technical Agreements)
    Mr. Moonmanasked the Minister of Technology what facilities his Department is able to offer to British companies in the public and private sectors wishing to pursue the aims of the recently signed technical agreements with Russia, Poland and Roumania.
    Mr. Benn: My Department would be glad to help trade associations and individual firms, arrange for joint approaches by industries, secure agreement of the Russian authorities to the exploration of new potential areas of collaboration. It will, if requested, support the efforts of private industry by the provision of experts from the Government establishments, as well as seeking the co-operation of one of the nationalised industries when this is sought. But speaking generally the main effort will be provided by industrial enterprises which see, flowing from these collaborative efforts with the Russians, advantages whether in technological gains or the export of goods and of know-how.
    Mr. Moonman: I am grateful to my right hon. Friend for that detailed reply. May I ask him whether he will consider making this information and possibly more detailed items, available to industry so that it has it for its convenience?
    Mr. Benn: I shall make available any information which would be helpful; but the C.B.I.", which has played a leading and extremely helpful rôle, should make known to industry what opportunities exist. I hope that it will do so. as well as ourselves.

    European Free Trade Association
    Mr. Hooleyasked the Minister of Technology if he will convene a ministerial meeting of representatives of the European Free Trade Association countries to arrange for the preparation of a report on technological co-operation in Europe, as a counterpart to the report now in preparation by the Commission of the European Economic Community.
    Mr. Benn: No, Sir. We are prepared to consider the possibility of technological co-operation with any European country and, to this end, welcome the proposals made by the Benelux Governments which include a suggestion for common action in various fields, including technology.
    Mr. Hooley: Is my right hon. Friend not aware that the Six are taking this question of technological co-operation very seriously indeed? Is it not time that we took comparable steps and studies with our own partners to establish a strong negotiating position?
    Mr. Benn: I do not think that technological collaboration is something where one establishes a strong negotiating position by starting on two sides. Indeed, so far as E.F.T.A., within the Stockholm Convention, has taken an interest in technology, it was to agree to harmonise standards on an all European basis. The answer that I gave, if my hon. Friend reads it carefully, will open up the possibilities which he wants.
    Mr. David Price: Would the right hon. Gentleman not agree that the biggest single obstacle to increasing trade in technological products, not only between E.F.T.A. and Europe, but round the free world, is the tariff obstacle? The stan-
    946
    dardisation of regulations—pharmaceutical and so on—round the world is most important, and probably G.A.T.T. and the U.N. are the two best places to do it.
    Mr. Benn: I am sure that if we are serious about trade and technological cooperation, standards are of great importance. I would not say they are the only or the greatest obstacles, but without improvement along these lines there will be an absolute limit to the amount we can achieve.

    Mr. Kirillin (Talks)
    Mr. Dalyellasked the Minister of Technology if he will make a statement on his official talks with Mr. Kirillin.
    Mr. Benn: My talks with Mr. Kirillin were directed towards the further development of technological relations between the United Kingdom and the U.S.S.R. under the aegis of the Technological Agreement which we signed during his visit. I will forward details to the hon. Member.
    Mr. Dalyell: What is the scope for co-operation in the commercial vehicle industry?
    Mr. Benn: One of the subjects in which, if my memory serves me aright, the C.B.I. is taking a lead involves the motor industry. Obviously this is an area where both technological collaboration and, even more, future trading prospects are important.
    Mr. Dalyellasked the Minister of Technology if he will make a statement on his talks with the Russians on co-operation in educational technology.
    Mr. Benn: Educational technology, including programmed learning and teaching machines, is one of the areas which is to be explored under the Technological Agreement between the United Kingdom and the U.S.S.R. which was signed during Academician Kirillin's recent visit to London. In this, as in other similar areas, the first task is to identify with the Russians special aspects of mutual interest. I am, of course, in close touch with my right hon. Friend the Secretary of State for Education and Science.
    Mr. Dalyell: Can my right hon. Friend say when the first phase is likely to be?
    Mr. Benn: I took the opportunity, at Mr. Kirillin's suggestion, of seeing Mr. Elyutin, the Russian Minister of Education, when he was visiting this country. I discussed with him the possibility in general terms and he was extremely interested in it. There will now be an information paper prepared covering both the educational and the industrial sides of this matter. This will be transmitted to the Soviet Union and exchanged for a paper from them and we shall then see what working group should be set up.

    Hearing Aid Batteries (Prices)
    Mr. Burdenasked the Minister of Technology why he has approved an increase of 50 per cent. in the price of hearing aid batteries without first referring the matter to the National Board for Prices and Incomes.
    Dr. Bray: The hon. Member will know that the question has now been referred to the National Board for Prices and Incomes for examination.
    Mr. Burden: Why did the Government take so long, having had early warning of the rise of 50 per cent. in hearing aid batteries? Would the hon. Gentleman be surprised to hear that the implication in a letter from the Prices and Incomes Board was that it had been condoned and agreed to by the Government?
    Dr. Bray: References are not made lightly. I would urge the hon. Member to await the report of the Prices and Incomes Board.
    Mr. Lubbock: Is the hon. Gentleman aware that I wrote to the President of the Broad of Trade about this matter, on 12th January, and am still waiting for a reply, in spite of the fact that an announcement has been made publicly? Is it not rather discourteous to keep me waiting for so long?
    Dr. Bray: The hon. Gentleman perhaps knows that it is this Department, not the Board of Trade, which is responsible in this case. He will appreciate that the question was dealt with by my right hon. Friend only last week.
    Mr. Marks: is my hon. Friend aware that since his right hon. Friend
    948
    announced that this had been referred to the Prices and Incomes Board, his industrial policy division has written to constituents who inquired telling them that after examination these proposed price increases were considered to be "not inconsistent" with the Government's prices policy? Will my hon. Friend correct this statement, and instruct his officials to avoid the use of double negatives when dealing with the public?
    Dr. Bray: If my hon. Friend will let me have a copy of the letter, I shall examine it.
    Sir H. Legge-Bourke: As a user of these batteries, may I ask the Minister whether he will consider having consultations with the industry and the Ministry of Health to see whether we can undo the fixation in the Ministry of Health with the Medresco model? If this were to happen we might be able to keep the price of both hearing aids and batteries.
    Dr. Bray: I appreciate the hon. Gentleman's interest in this, and I am sure that he will pursue it with the Ministry of Health.

    SOCIAL SERVICES (VOLUNTARY SERVICES)
    Mr. Juddasked the First Secretary of State whether he will initiate comprehensive round table conferences at the national and local level concerning the rôle of voluntary social services in the Welfare State.
    The First Secretary of State (Mr. Michael Stewart): I am anxious to encourage the fullest possible use of the voluntary social services, in co-operation with the statutory services, and will bear my hon. Friend's suggestion in mind.
    Mr. Judd: Would my right hon. Friend not agree that there will always be a place for the most progressive sort of voluntary agency, working in close collaboration with the statutory services? Would he not further agree that it is high time that the Government, in thinking about the future, consulted fully with the voluntary bodies both at national and local level?
    Mr. Stewart: I would entirely agree with the first part of what my hon. Friend has said. As to consultation, we are already engaged in that. I am not sure that a round-table conference is necessarily the wisest way of doing it, but I am engaged in a number of consultations with voluntary bodies.
    Sir Knox Cunningham: Have not the voluntary services a very important part to play in modern Britain, and will the right hon. Gentleman give every encouragement to those people who are prepared to give their services voluntarily?
    Mr. Stewart: Yes. I thought that I had made that clear in my Answer to my hon. Friend, but I am glad to repeat it.

BEAGLE AIRCRAFT LTD.
Mr. Boyd-Carpenter: On a point of order. Mr. Speaker, it will be within your recollection that, in reply to my hon. Friend the Member for Macclesfield (Sir A. V. Harvey), the Minister of Technology admitted that he had, inadvertently of course, misled the House about a future Question on which he would be giving the number of Beagle aircraft for which firm orders had been placed.
May I ask whether, as one would expect, the right hon. Gentleman has asked your permission to make this up to the House by making a statement now?
Sir A. V. Harvey: Further to that point of order. Mr. Speaker, it will be within your recollection that the Minister said that the Question had been withdrawn. My colleagues and I have done some research, and I cannot find evidence of the Question having been withdrawn. I think that it would be satisfactory to us all if the right hon. Gentleman were to clear up this matter, because it is of some importance. Back benchers should not be fobbed off with this kind of treatment.
Mr. Ridley: Further to that point of order. I can find no record whatsoever of any Question being withdrawn since the beginning of this month. I can find no record of a Written Question, so I do not believe that it could have been unstarred. I believe that the right hon.
950
Gentleman owes it to us, having given my hon. Friend the answer that he would reply to the Question at a later stage, to give us the information which he has refused to give. This is typical of all his answers on this important question of Beagle aircraft.
The Minister of Technology (Mr. Anthony Wedgwood Benn): When I answered the supplementary question, I had clearly in mind the idea that a Question was down on the Order Paper on this subject. If I am wrong about this, if my memory let me down, I apologise unreservedly to the House.
Having said that, I think that it would not be right to seek to answer a Question of this kind without it being down on the Order Paper. The reason for this will be evident when I answer the Question. We are here talking about a particular firm and its commercial prospects. I would not wish to rely on a recollection in answering a Question as important as this. I repeat that I apologise if, accidentally, I was under the impression that such a Question had been tabled, and it has not.
Mr. Burden: Further to that point of order.
Mr. Speaker: Order. No point of order really arises. Hon. Members have conveyed their opinions about what they regard as the Minister's failure to answer.
Sir A. V. Harvey: As the Minister has apologised for having unintentionally misled the House, may I say that I accept the apology very willingly, but will follow the matter up at a later date.
Mr. Peyton: On a different point of order. Mr. Speaker, I would like, with respect, to ask what advice you can give the House and Ministers about the action they should take in these cases. Though the Minister has apologised, and everyone accepts that, he stated quite clearly that he was going to answer this Question. He must have had the impression that somewhere in his voluminous notes there was the Answer. Accepting the Minister's reply, and accepting his good faith, he must, nevertheless, be in a position to answer the Question.
Mr. Speaker: I can only go back to the point of order itself. Mr. Speaker has no power to make a Minister answer in

951
any way which is pleasing to hon. Members. Indeed, on the simple point of order, a Minister is not compelled to replay. He has taken notice of the recriminations which have been made against him. He has, however, apologised.
Mr. Ridley: In view of the unsatisfactory nature of the answer to Questions Nos 16 and 17, I give notice that I shall raise them on the Adjournment.
Mr. Speaker: The hon. Member is too late.

BILL PRESENTED
  FREEDOM OF PUBLICATION PROTECTION
  Bill to give greater freedom of publication of matters of public interest by clarifying and amending the law relating to contempt of court, official secrets and libel; and for purposes connected therewith, presented by Mr. Jasper More; supported by Mr. Mark Carlisle, Mr. Arthur Davidson, Mr. Deedes, Mr. Charles Fletcher-Cooke, Mr. Iremonger, Mr. Woodrow Wyatt, and Mr. Michael Heseltine, read the First time; to be read a Second time upon Friday, 10th May and to be printed. [Bill 84.]
ORDERS OF THE DAY

  TRANSPORT HOLDING COMPANY BILL
  Considered in Committee
  [Sir ERIC FLETCHER in the Chair]

Clause 1.

  (OBJECTS AND POWERS OF TRANSPORT HOLDING COMPANY.)
  3.36 p.m.
  Mr. David Webster: I beg to move Amendment No. 1, in page 1, line 11, leave out ' one hundred ' and insert sixty-five '.
  The Chairman: I think that it will be convenient if, with this Amendment, we discuss Amendment No. 4, in line 11, at end insert:
  (2) A further fifteen million pounds shall be added to the aggregate principal amount outstanding in respect of money borrowed by the Transport Holding Company by affirmative resolution of the House of Commons.
  Mr. Webster: Thank you, Sir Eric.
  On consideration, I think that it will be found that these Amendments are complementary in design. Their purpose is to limit the amount by which the British Transport Holding Company can increase its borrowing power. It proposes to increase the amount by £35 million. The Minister's statement announcing the, increase referred in the Bill was made immediately after the Prime Minister's statement about economic stringency, When we were told that no sector would be exempted.
  We do not object to B.E.T. receiving compensation of £35 million, but we assist this proposal on the ground that the Opposition feel it our duty, whenever possible, to assist the Government to carry out their word. Having given their word, we think that it is necessary to assist Parliament in granting money to enable them to carry it out.
  Despite that, we have the greatest reservations about the method by which this has been done. I would like, first, to discuss the £35 million for B.E.T. and then the other moneys referred to in the second Amendment. These are hypothetical moneys, because we have never received an estimate from the

  953
  Government of how much money will be required to pay out minority interests involved.
  We have the greatest reservations about how this money for B.E.T. has been dealt with. This has been a fine psychological exercise of which the Lord President of the Council will no doubt be proud. The Government announced that by force they would take over all the buses in the main conurbation. This was made public about 18 months ago. We knew that they meant all the buses. Investment allowances have been removed from bus operators. There was then the P.T.A. threat, following which almost on the eve of the publication of the White Paper regarding these P.T.A.s, the share price of B.E.T. A shares was depressed to 58s. 9d. Thus, it would seem the offer was made on apparently generous terms. Since then the price has risen and in the early part of January it was 70s. 3d.
  I see the hon. Member for Bodmin (Mr. Bessell) nodding. He would also nod agreement at the cynical action of the Government, immediately after the price was agreed, of putting back the investment grant or the 25 per cent. bonus to bus operators for what they are doing. To do this immediately after the deal had been settled is an appalling thing, if Government honesty is ever to be believed again while this Government are in office.
  We want to know the effect on the earnings of the restoration of the bus grant of 25 per cent. In dealing with this point in the Second Reading debate the Minister of State said that the whole thing would be on the valuation of assets. Assets are valued on their earning capacity, and this has been increased by 25 per cent. since the terms were agreed. We want to know what is involved. We want to know the monetary value of the assets. Can the Minister tell us when the assets being taken over were last valued, and on what terms the valuation was made, and whether they will be included in the accounts of the Transport Holding Company at the revised asset value.
  I ask the Minister this because I have a particular interest in the matter. He will remember that not long ago, in Standing Committee—and it is nice for
  954
  members of the Standing Committee to have a breath of fresh air in the House today—he gave an undertaking that all the assets of the National Freight Corporation would be revalued and put into the balance sheet at the revised valuation before the Corporation set up shop. This would be sound practice, and for that reason he was repudiated by the Minister. I hope that the hon. Gentleman will give us an assurance on this matter today, before the Minister returns from whatever she is doing at the moment. We want to know what was the last valuation, when it was carried out, what the asset value was, and what was the earning percentage of the assets.
  We are being told that the taxpayer on the citizen must take an interest in our great industries. The citizen is taking an interest in this great commercial concern at a price-earnings ratio of twenty-fold, which means an earnings rate of 5 per cent. on the assets. So the citizen will be very interested, because he will have to raise money in the market at about 9 per cent. or have taxes levied in order to get a return of 5 per cent. Before long this will prove to be yet another deficit-financing operation. Was it right, in the interests of the taxpayer, to buy into an industry that is certainly not at the peak of its economic achievement?
  We also want to know how the money will be raised. In the more leisurely terms of Committee proceedings we can inquire of the Minister how the money is to be raised. Will it be borrowed on the market? In the Second Reading debate the Minister talked cheerfully about the going rate of interest. We want to know what is meant by this. Will it be at prime bill rate plus 1¼ per cent.? Very few concerns that are getting a prime bill rate plus 1¼per cent. will be earning only 5 per cent. on their assets. So the citizens who will invest want to know the rate of interest to be charged. Or will there be a straight addition on taxation, to buy out this immense and well-run concern?
  Incidentally, nothing is said to indicate that it will be made to run better than previously. However, I will stick to the narrow point and say that the total extra borrowing given under the Bill is £70 million. The saving on prescription charges announced the same day—which caused writhings and screaming from

  955
  hon. Members below the Gangway opposite—was to be £25 million; the wear and tear tax to be levied under the Transport Bill would mean another £40 million, and the abnormal load tax would represent another £5 million which adds up neatly to £70 million. Is this how the operation is to be carried out? We should be grateful to be told what additional taxation will be levied to balance this immense amount of money.
  On 16th January the Minister of State is reported in the OFFICIAL REPORT as saying, about the big investment in the nation's buses which the Board of the Transport Holding Company would acquire, that
  " the value of this large public holding in the bus industry would be safeguarded during the inevitable changes in the organisation of the bus industry if the T.H.C. had full control of the B.E.T. Group…."—[OFFICIAL REPORT, 16th January, 1968; Vol. 756, c. 1637.]
  3.45 p.m.
  How will it be safeguarded? Is it to be safeguarded against competition? We know that the holding company has been run on a commercial and competitive basis. Does this mean that it will no longer be run on that basis, and that the interests are to be safeguarded by buying out the main competitors, as a result of which there will be no criterion of efficiency and no yardstick to judge what service is being given to the community? I shall be glad to know whether the Minister can elaborate his statement.
  Later in his speech—he made quite a speech—he said that there would be significant economies in running the two bus companies together, yet the chief economist of the holding company, Mr. Glassborow, will tell us that if we run a fleet of 90 vehicles it works out at about 3s. 2d. per vehicle mile, but that with a fleet of above 1,000 vehicles it works out at 3s. 10d. per vehicle mile. There is no economy in this. Will the Minister tell us where he gets his figures? I am sure that my hon. Friends—and especially my hon. Friend the Member for Manchester, Withington (Sir R. Cary), whom I see looking so attentive and waiting sphinxlike for this discussion, with his expert knowledge—will be keen to probe the point of costing. We shall be especially glad to hear my hon. Friend's expertise in the matter.
  956
  Without any details being given—this is the usual thing with this Government, the Minister of Transport and the Minister of State—we have heard that some of the extra money is to be used to buy out the undertaking in Glasgow. I have several hon. Friends representing constituencies in Birmingham, Manchester, Liverpool and Newcastle, and they will want to know why, if Glasgow is being given compensation, their corporations should not receive compensation for the loss of assets which are bought from the ratepayers without any appeal or compensation.
  Not only will the ratepayers not be compensated; they will have the privilege of paying for the railway deficit in their region without having the advantage of closing the railway lines. My hon. Friends who represent these other large conurbations, while not wishing to be mean to the citizens of Glasgow—no mean city—will want to know what justice will be given to their ratepayers and taxpayers.
  We are told that offers have already been made by three other bus operators wishing to come into the Transport Holding Company net or the National Bus Company net. This is undoubtedly what is to be expected. The Government are inimical of private enterprise and private savings, and of the individual company which is trying to serve the bus companies and the travellers and these companies know that when these things are taken away from them their management problems are made colossal. They want to get out of the business and into something else. I am not surprised that at least three of these big operators want to do that. We shall have a State leviathan with a discrimination against private bus operators—and not only the discrimination that we see today; my hon. Friends will know that under Clause 45 of the Transport Bill every nationalised board has the right to manufacture spares, and will have the right to discriminate against private bus operators.
  For all these reasons, there will be considerable probing of the cost. The Transport Holding Company has been commercial. It will not need to be now, because it will be taken away from competition and is becoming almost a monopoly.

  957
  There was doubt on Second Reading—this relates to the additional £15 million referred to in Amendment No. 4—about how much was required for the minority interests. I hope that the Minister of State will tell us the exact state of negotiations. If they are in a delicate state, publicity would not be good, but it is now nearly three months since the agreement that the British Electric Traction Company should be taken over by the Government, and one wants to know the terms of compensation for the proprietors of the minority interests. As soon as we know this, and have been able to probe the assessment of valuation, we will come to our conclusions.
  We also want to know what will be done to compensate the local authorities in the four major conurbations. If treatment is to be given to Glasgow and the private shareholder, we want to ensure that the ratepayers who own these proud fleets are also compensated. I look forward to hearing the Minister of State and I am sure that my hon. Friends will want to cross-examine him, because we are discussing today an immense amount of money. at the very time that the Prime Minister has said that he will run the economy as tightly and commercially as possible. This is the first negation and the House will do well to probe and ponder it thoroughly.
  Mr. John Peyton: In the Sunday Telegraph yesterday was an exceedingly interesting, though not particularly cheering, interview with the Leader of the House. With his usual lack of modesty—not to put a stronger term upon it—he referred to the "fascinating" experiment in the management of publicly-owned industries represented by the right hon. Lady's Bill or Bills. We perhaps would substitute another adjective for that of the right hon. Gentleman. We would refer to this experiment not as "fascinating", but as awful, irresponsible, menacing and plain folly, in meddling with something which the Government only imperfectly understand.
  The White Paper made it clear to us all that the British Electric Traction Company was taken over by the Government on the Government's own terms—
  The Minister of State, Ministry of Transport (Mr. Stephen Swingler)indicated dissent.
  Mr. Peyton: The hon. Gentleman shakes his head, but even the White Paper said that other bus companies would be given similar treatment and that the Transport Holding Company would take them over on the same basis on its valuation—
  Mr. Swingler: The hon. Gentleman knows that that is false, and I hope that he will have the decency to withdraw it. The position has been explained. The Government were not involved in the negotiations; they were between the Transport Holding Company, set up by the previous Government, and British Electric Traction.
  Mr. Peyton: If the Minister of State is inviting the Committee to accept that the British Electric Traction was not conscious at the back of its mind that the Transport Holding Company was more than just another innocent body going quietly about the world with good intentions, he is wrong. B.E.T. knew very well that the Transport Holding Company was the direct representative of the right hon. Lady and her Ministry, that it was a henchman to carry out this Government's purposes. Therefore, B.E.T. agreed. It had no option.
  Moreover—the Minister of State has not apologised for this—the ground rules were subsequently altered. Investment grants for buses and the rest were made available after the negotiations, and I cannot but believe that British Electric Traction, even faced with the menaces of the Government's proposals, would have taken a slightly more sanguine view of its case had it known that the ground rules would be thus altered.
  I draw the Committee's attention to the speech of the Minister of State on 16th January, that day of ill-omen, and ask hon. Members to pause and think what sort of reception would have been accorded a privately-owned company issuing such a prospectus. The prospects should be a little more glowing than this. Moreover, the prospects delineated by the Minister of State on that occasion, not rosy in themselves, came from a Government whose performance has always fallen far short of promise.
  I remember some of the right hon. Gentleman's remarks on that occasion. He referred to "opportunities for

  959
  rationalisation", and said that there would be substantial advantages in having a single publicly-owned company, with which the new passenger transport authorities could negotiate for the provision of services in their areas. He also said
  "From all these points of view, the acquisition by the T.H.C. of the remaining interests in the B.E.T. group makes good commercial and operating sense."—[OFFICIIAL REPORT, 16th January. 1968; Vol. 756, c. 1638.]
  Quite apart from the fact that we would not repose much faith in the Government's judgment of good commercial and operating sense, we would feel, if the Government really cannot promise more than that from their proposals, a certain apprehension and lack of enthusiasm about adopting them.
  Of course, the proposal to take over British Electric Traction is already water over the dam. It is finished, and there is nothing we can do about it. Once again, the Committee is discussing a fact and discussing it too late. This is a very difficult pill to swallow.
  The £35 million which will be required for British Electric Traction leaves a balance in this £70 million, and before we accept vague assurances that the Government have their eyes on the buses of Glasgow Corporation or anyone else, we want to hear more specific proposals. Again and again, Ministers get bored with these protests, but I believe that the Committee would be totally wrong to allow Governments to go forward with proposals made in this sloppy way —[Interruption] I have no doubt that the Minister of State and the Parliamentary Secretary have something thrilling to say to each other, but it would be a nice change if they would pay attention to the Committee—
  Mr. Eric S. Heffer: It is better than listening to the hon. Member, I am sure.
  Mr. Peyton: The hon. Member for Liverpool, Walton (Mr. Heffer) will doubtless be able to intervene later with all the charm and modesty for which he is renowned.
  No Government ought to come before the House with proposals covering large sums of money while using such vague terms as those used by the Government
  960
  to justify that expenditure. They should be able to tell the House in detail why they want the money. But the only detail which we have been given covers action which the Government have already taken. I know that, for very good reasons, Ministers are becoming somewhat insensitive to attacks because they so often lay themselves open to criticism, but I very much hope that this afternoon one Minister or the other—we might even be so fortunate as to enjoy the presence of the right hon. Lady—will give us in some detail the reasons why the Bill should remain in its present form and why the figure should not be reduced to the £65 million which my hon. Friend, with all the modesty which we expect from him, proposed to the Committee.
  That is not much to ask, but I very much fear that we shall be disappointed and that once again we shall be treated with that arrogant disregard of which the Government are master. It remains only to add that that is the only thing of which they are master.
  4.0 p.m.
  Mr. Peter Bessell: As the hon. Member for Weston-super-Mare (Mr. Webster) pointed out in his admirable opening speech, the Government faced the House on Second Reading of the Bill with afait accompli They had already given certain undertakings and assurances. It is not the purpose of the Committee in any way to cause the Government to break the undertakings which were made before Second Reading.
  Nevertheless, we are considering the Bill at a most unhappy time in the financial history of the country, and it is right that the Amendment standing in the name of the hon. Member for Weston-super-Mare and the Conservative Opposition, and to which I have added my name, should be carefully considered. We expect reasoned answers to the questions which have been put to the Minister of State. The questions were put to the Minister of State in the hon. Member's opening speech in a moderate manner. He was asked clear questions on which the Committee requires clarification. Without that clarification, it would be impossible for the Committee to allow the Bill to continue on its course.
  We must be assured that the borrowing powers which the Government are

  961
  seeking to increase under the Bill will be used for purposes which are satisfactory and necessary. We are, of course, anxious to see the Government fulfil commitments which they have undertaken, and I am confident that no hon. Member wishes to do anything which would cause the Government to fail to meet those commitments. Nevertheless, the amount required is considerable and is in excess of those commitments and, like the hon. Member for Weston-super-Mare, I am anxious about the process whereby the revaluation of these assets can occur.
  We had a long debate recently in Standing Committee F on the question of real value and book value, and whether purchases should be made by any Department under the control of the Government at book value or whether they should be made, instead, at the real value of the assets, which would mean a revaluation.
  A precedent has been set by the terms of the Bill and the negotiations which the Government undertook before 16th January when the Bill was given a Second Reading. This is, therefore, a most inportant question to which the Minister should address his mind. He should seek to answer it to the satisfaction of at least some hon. Members.
  The hon. Member for Weston-super-Mare raised a point which I, too, was anxious to raise. I will therefore not labour it at length. But we know that there is to be compensation for the municipal bus undertaking in Glasgow. I am interested to know why there should be this special arrangement for the undertaking in Glasgow. I agree with the arrangement and approve of it. But why should a Corporation such as Birmingham, which has a most responsible transport system under its control, not enjoy the same benefits? Why are the ratepayers of Birmingham to be denied equal treatment to that being given to the ratepayers of Glasgow? I can ask the same question about Manchester, Bristol and the City of Plymouth, which is near my constituency.
  All these places are carrying on municipal bus undertakings in a responsible manner. There is no need to acquire the undertakings because of irresponsibility. In fact, they are being acquired as part of the Government's major plan. And yet, under the terms of the Bill,
  962
  there will be a special advantage to the City of Glasgow which will not be applied to other municipal bus undertakings.
  The Government are seeking great powers under the main Transport Bill. It was made clear on Second Reading that the Bill is, in effect, a part of that major Bill. I see the reasons for and the sense in dealing with this as a separate issue. It appears to me to be a necessary arrangement, and I appreciate the Government's reasons for making it. But if we discuss this Bill objectively, as I hope we shall in Committee, we cannot have far from our minds the wide provisions of the other Bill, which will be directly affected by this Bill, just as this Bill will be affected by the main Transport Bill.
  I am anxious to hear the reply of the Minister of State to the questions raised on this side of the Committee, particularly on the important issue raised by the hon. Member for Weston-super-Mare, who has put before the Committee not only the attitude of the official Opposition but the attitude which I take as representing the Liberal Party.
  Lieut.-Colonel Sir Walter Bromley-Davenport: I had not intended to intervene in the debate, but the excellent speech of my hon. Friend the Member for Yeovil (Mr. Peyton) prompted me to answer one of the rather difficult questions which he put to the Minister. He asked the Minister how this money would be raised. The answer to that question is always the same: in the end, in some form or other, it will be found by the taxpayer. Once more, the taxpayer will be asked to pay for and to take over a prosperous industry run by private enterprise, and the result will be the exactly the same as in every other nationalised industry—gigantic losses and a worse service for the consumer.
  Mr. Peyton: My hon. and gallant Friend has dealt with one important point. The other point which I put—and I hope that he did not misunderstand me—concerned what is the balance of money which is not already committed to the take-over of B.E.T. To what purpose will that be devoted? The Government have not told us.
  Sir W. Bromley-Davenport: I thank my hon. Friend for that intervention. I

  963
  hope that the Minister will answer that question.
  If a nationalised industry loses money it does not matter. Nobody could care less, because the taxpayer must foot the bill. This means that the prosperous industry which we are discussing will be run by a set of Ministerial stooges who have never been engaged in private industry, who have never had any industrial experience and who have never had to make a profit or be turned off the board by their shareholders. How, therefore, can they make a success of this enterprise?
  Why have hon. Gentlemen opposite introduced this Measure? The answer is because, from the Prime Minister downwards—including all their fellow travellers, on the front and back benches—the one thing they love is hate. It is because of their hatred of private enterprise and of anyone who can make an honest profit. At the back of our minds must be the statement once made by Dr. Goebbels, when he knew that Germany was losing the war. He said that if the Germans were defeated they would slam the door so hard on Europe that nobody could ever open that door again on prosperity. That is why the Labour Party has introduced this Measure—because it knows that it has lost the next General Election—
  The Chairman: Order. The hon. and gallant Gentleman seems to be wandering rather a long way from the Amendment.
  Sir W. Bromley-Davenport: You have been tolerant, Sir Eric, and I am grateful for that. Without wishing to be further reproached by you, I will merely add that the reason for hon. Gentlemen opposite introducing this Measure is because they want to make it as difficult as possible for the Conservatives to take over and help Britain to recover.
  Mr. Graham Page: I rise to support the Amendment, which was so eloquently moved by my hon. Friend the Member for Weston-super-Mare (Mr. Webster) and to urge the Committee to accept the view that Parliament should not authorise as much as a £70 million increase in these borrowing powers—as much as £35 million more than is required for the B.E.T. transaction. I say
  964
  this because I believe that the Transport Holding Company has so misused its present funds that we should not authorise further borrowing by the company. I refer particularly to the surplus in this £70 million over and above that required for the B.E.T. transaction. Explaining why this money was required, the Minister of State said in January:
  " The purpose of the Bill, therefore, is to enable it "—
  the Transport Holding Company—
  " to borrow additional sums from the Minister sufficient to enable it to complete the purchase of shares in the B.E.T. bus group and still leave a sufficient margin for other contingencies which may arise."—[OFFICIAL REPORT, 16th January, 1968; Vol. 756, c. 1635]
  I will give an example of gross misuse of funds by the Transport Holding Company which should convince anybody that further borrowing should not be allowed. I am not concerned with which party established the Transport Holding Company. Since 1964 the Labour Government have been responsible for it and my example refers to the years since 1964.
  4.15 p.m.
  There is a car delivery company which is a subsidiary of the Transport Holding Company and which, at the beginning of 1965, had borrowed from the holding company £350,000. By the beginning of 1966 that loan had gone up to £518,500, an increase of £168,500 in a year. By the beginning of 1967 the figure was up to £568,500, another £50,000 in that year. In a matter of two years there had been an increase in the borrowings by this subsidiary company from the holding company of £218,500. In addition, on current account, this car delivery firm owed the holding company £145,000 at the beginning of 1967.
  So the holding company had lent to this firm nearly £750,000—incidentally, on fixed assets which were worth only about £500,000. But that is not the whole story of the bolstering up of this firm by the holding company because there are a number of subvention payments transferred from other subsidiaries of the holding company to bolster up this firm, but I will come to those later.
  At the moment, I would like the Committee to bear in mind the loan of £750,000 to this firm. One might think that a firm which could borrow £750,000 and warrant all that financing of its

  965
  affairs would be carrying on a business which was a resounding success. One would imagine that its profits were leaping ahead year by year, if it could attract finance in this large sum from the Transport Holding Co.
  Nothing could be further from the truth. In 1965, this firm made a trading loss of £20,000. In 1966 its trading loss was £90,000. But to cover these facts on the profit and loss account, there is a subvention payment of £216,000 transferred to it from other subsidiaries of the holding company. The full picture, therefore, is of a company which has been lent nearly £1 million by the holding company or its subsidiaries and turns out to he a company which is capable of making a loss of £90,000 a year. If that is the way the holding company has used its money over the past few years, Parliament should not let it borrow any more.
  I said that that was the full picture. Perhaps it is the full financial picture, but it is by no means the full picture. Why has this car delivery firm made these heavy losses? The reason is because its representatives call on the manufacturers of cars, those who have to arrange for the delivery of their vehicles by road, and ask what rate they pay to car delivery firms. To be more specific, they say "What rate do you pay to the A. B. &Co.?" I use those initials, but they conceal a firm which happens to be that of a constituent of mine.
  When told the rate charged by a car delivery firm, this subsidiary of the Transport Holding Co.—which, remember, is making losses of £90,000 a year—immediately undercuts that rate and offers a lower one—which, of course, proves wholly uneconomic. But what could they care? As my hon. and gallant Friend the Member for Knutsford (Sir W. Bromley-Davenport) said, it does not matter when a company which is backed by taxpayers makes a loss—that is, it does not matter to the company it does to the taxpayer.
  I therefore urge the Committee to agree that Parliament should not continue to condone this sort of trading, to condone this sort of loss which, as my hon. and gallant Friend said, eventually falls on the taxpayer.
  Sir John Eden: It has been made clear from this side
  966
  that there are two main reasons for supporting the Amendment. The first is that the money the Government seek is likely to be used for purposes that would certainly not be in the taxpayers' interest. The second is that it would be used by an organisation whose past actions do not justify us in having any confidence that it will secure even an adequate return on the capital invested.
  As my hon. Friend the Member for Crosby (Mr. Graham Page) has just made quite plain, there are many areas of the past activities of the Transport Holding Company that should have been more closely examined and which, in normal circumstances, would certainly be most carefully scrutinised before anyone would part with further sums in that direction.
  Like my hon. Friend the Member for Yeovil (Mr. Peyton), I want a full and detailed explanation from the Minister of exactly what he means by the phrase "good commercial sense". He used that phrase very often in the Second Reading debate. He justified the grouping together of all the bus companies in one main system of ownership as "good commercial sense", but that is just a catch phrase. What we want to hear is the real justification for and an explanation of his use of those words.
  I do not for a moment suppose that he means that the grouping together of bus companies in the way the Government propose will lead to an improvement in service to the travelling public: if he were to advance that as the reason for this Measure he would be laughed out of the House and of the country, because every nationalised industry that has come forward on that pretext has manifestly and miserably failed in its purpose.
  Mr. Swingler: Would the hon. Gentleman say, or does he wish to say, that British Road Services and the Tilling bus group have not, since 1962, been good commercial sense?
  Sir J. Eden: I am making it quite clear to the Minister of State—and I am surprised that he has not understood the message—that the taking into public ownership, or the taking over by the State, nationalisation, is not in the public interest, whether the public is the taxpayer or a user of the services. That is so throughout the length and breadth of. the nationalised industries—
  Mr. Swingler Mr. Swingler rose—
  Sir J. Eden: No. The hon. Gentleman can no doubt reply to the debate in due course.
  I want to hear from the hon. Gentleman some justification for his view that there is likely to be an improved public service—since he is so sensitive on the point—in bringing all the bus companies together. The Minister did not in the Second Reading debate advance that as a principal case for seeking to extend the borrowing powers of the Transport Holding Company. On 16th January he said:
  "…there are, clearly, significant economies to be obtained from having all the main bus companies under a single control."
  Apparently, therefore, it is economies of administration that he is going for, and from which he expects to get greater efficiency or cheaper service as a result of grouping the bus companies together.
  But the Minister must know, as every other hon. Member knows, that economies of scale in bus operation are notoriously difficult to achieve and are by no means a foregone conclusion. There is a limit to size beyond which it may well be very unwise to go. There is a limit to size beyond which the operation of bus companies may well be working in exactly the opposite direction to that of achieving efficiency and economies of scale. I should have thought that the hon. Gentleman would have plenty of evidence of that.
  We are left, then, with the conclusion that the good commercial sense will be not in the hands of those who will be left free to judge in fair and equitable terms what may be a commercial way of operating things but will, instead, be the decision of the political head. It is about this aspect that not only the House but everyone in the country should be most alarmed.
  The Minister of Transport has already made it quite clear in the various measures embraced in the package Transport Bill now before the House that she sees herself as the ultimate arbiter and judge of all these matters, and that it is to her that everyone will ultimately have to turn. I can turn to her for one or two things perhaps, but I should certainly never dream of turning to her for good commercial sense.
  968
  The right hon. Lady has no commercial experience. She has no understanding of the operation of bus services. She has no understanding of how to run a nationalised industry. Yet we are being asked to advance millions of pounds to enable a political operator to determine what is or what is not good commercial sense in this respect.
  And not only is the thinking about bus companies, but of other activities, as we have heard from my hon. Friend the Member for Crosby. It was made quite clear by the Minister of State on Second Reading that the thinking is not only about the Glasgow City Corporation bus undertaking, or any other city's bus undertaking; that it is not only about those bus companies for which the Government have already got lines out, but is about road haulage interests as well.
  Just what has the Minister in mind? If I am to be asked to advance money to a particular enterprise, I want to know the purpose to which that money is to be put. On 16th January, the hon. Gentleman said, that already a number of
  "…private bus operators have written to the Minister of Transport offering to negotiate on the acquisition of their undertakings and others have approached the Transport Holding Company ".—[OFFICIAL REPORT, 16th January, 1968; Vol. 756, c. 1638–1640.]
  He seemed very pleased to be able to say that. That might mean that some of the money may be used to acquire those interests. That, I understand is the intention behind the Bill.
  If that is so, and if the companies are willing to negotiate with the Transport Holding Company or the Minister, as the case may be, why are they so eager? What is it that interests them? Why are they so anxious to part with their interests? Could it possibly be that those bus companies are running into financial difficulties; that the prospect for them is not particularly bright? In that case, might they not be anxious to approach the Transport Holding Company, which has limitless funds at its disposal and can offer wholly uncommercial prices to acquire undertakings? If that is the case, the Minister is not defending the taxpayers' interests.
  But, of course, it could well be that there is another answer to the question,

  969
  and it was put forward by my hon. Friend the Member for Liverpool, Wavertree (Mr. Tilney). It is that the bus undertakings which remain have already seen the shadow cast over their activities by the totally unfair, biased and distorted (trading activities of a top-heavy nationalised organisation like this. With that attitude, I have every possible sympathy.
  Therefore, for every conceivable reason —on the ground of taxpayers' interest, and on the ground of potential user interests—I say that there is full justification for sending the Bill back where it came from, and sending the Minister chasing after it.
  4.30 p.m.
  Mr. Archie Manuel: It is a long time since a Committee has listened to so much ranting and general statements made without any proof. That is the sort of stuff which might go down well at a meeting of the Primrose League, but we have to examine this matter a little more closely.
  We have listened to suggestions that it is quite wrong for a margin to be allowed in the borrowing total given by the Bill, but this is quite common practice in the financial world. Hon. Members opposite know as well as I do that it is common practice for local authorities, when they are getting near the end of the financial year, and there is likely to be an overdraft, to give power to the town clerk to borrow much in excess of what is needed so that they can make certain that there will be money to carry on activities until the rates come in. Apparently hon. Members opposite think that is wrong and that there should be no margin.
  The hon. Member for Bournemouth, West (Sir J. Eden), in a very arid speech, showed a lot of spite against a lady, which seemed a quite ungentlemanly thing to do. He suggested that it was quite wrong to have co-ordination of bus services. I do not know his constituency very well. I do not know whether there are large rural areas in it, but I know that in Scotland many bus routes are quite uneconomic. There are many branch railway lines, and main lines, which are quite uneconomic. Wednesday after Wednesday I have listened to hon. Members opposite pleading with Ministers of Transport to keep services going on
  970
  branch lines by diesel trains or, if the railway service has to be taken off, to provide bus services.
  Those services are quite uneconomic. It costs a hefty sum for a railway to finance private bus companies to operate in order to provide services in such areas. Looking at the matter fairly, would hon. Members opposite not agree that it is sound common sense, if we are to provide services in sparsely populated rural parts of the country, to ensure that the lucrative services should help to pay for the services which are uneconomic?
  Mr. Bessell: I am following the hon. Members argument with interest and a great deal of sympathy, but would he not agree that under the terms of the Bill which is being considered in Standing Committee F provision is made for that by means of the passenger transport authorities being able to authorise a precept on the rates to deal with uneconomic rail services? That, therefore, does not arise in relation to this Bill.
  Mr. Manuel: I hope that I am in order because I am replying to points made by hon. Members opposite about bringing the bus services together. The transport authorities which we have been discussing at length in Committee F are to work in the large conurbations. I am dealing with passenger bus services in rural areas, which will not come under the transport authority. I hope that the areas of the transport authorities will be as wide as possible and that everything running into a terminal centre of a city will be encompassed, but I am not dealing with those services. I do not think that the hon. Member for Bournemouth, West was dealing with them, either.
  It seems quite logical, if we are to provide bus services where they are necessary, that the more lucrative routes should help to pay for those which are uneconomic. The strict commercial efficiency as laid down by the hon. Member would appear to mean taking buses off those routes, then everyone in those districts who had not a private car would either have to walk or to cycle. I do not think that people in rural areas want that.
  The hon. Member for Crosby (Mr. Graham Page) spoke about the Transport Holding Company bolstering up a subsidiary by paying more than its assets were worth. We get this kind of thing

  971
  every day, but hon. Members opposite do not condemn companies which have take-over bids. This proposal is a mere flea-bite compared with what the hon. Member's friends are doing in the financial jungle of take-over bids. If he looks at the history of transport he will discover that this is no new thing. The old private railway companies did it for very wrong reasons. When buses started to ply in country areas and to interfere with railway companies' profits, the railway companies decided that they could kill that menace by buying up the bus companies.
  Mr. Geoffrey Wilson Mr. Geoffrey Wilson (Truro) rose—
  Mr. Manuel: Just a moment.
  I believe that the West Riding Bus Company paid 63s. for each £1 share. The same thing happened about the canals, when they were doing well. To avoid that competition with private railway companies, they were bought and closed down.
  Mr. Graham Page: I regret that I did not make my argument clear to the hon. Member. I was not talking about take- over bids. My complaint was about the continual excessive financing of a company which was making a loss year after year.
  Mr. Manuel: That may be so, but if the Transport Holding Company believed that it could provide better services and get a greater control of buses over a wider area, although many of those routes were losing money—
  Mr. Geoffrey Wilson: I cannot allow the hon. Member to get away with the complete fairy story that the old railway companies bought up the bus companies so as to stop them operating. The railway companies started the buses. The Great Western Railway was the pioneer of motor buses in the western area long before any other bus services started.
  Mr. Manuel: My old friend the hon. Member for Truro (Mr. Geoffrey Wilson) and I have been connected with the railways for a long time, he as a solicitor and I on the footplate. Solicitors are necessary in all walks of life. He has referred to one company, but the West Riding Bus Company, did not belong to the railways. Hon. Members opposite ought
  972
  to look fairly at the position and try to recognise the transport needs of the country. In the rural areas especially, many of those needs cannot be catered for economically.
  The hon. Member for Bournemouth, West spoke about efficiency and profit-making. Presumably, he would close down all these services, but is that the sort of thing we want? I am certain that it is not in view of the Question put by hon. Members from all parts of the House on this matter. It is not a party matter, but the hon. Member labels a thing "nationalised" as if everything that was nationalised was bad. Unfortunately, successive Governments have had to take transport services into public ownership. The railways, which were not paying, were nationalised by the Socialist Government. The Tory Government did not denationalise them.
  Would it not have been good business for the Tories to have renationalised the railways? The collieries, which were being worked out, were nationalised by the Socialist Government, and the Conservative Government did not denationalise them. The Army, the Navy and the Royal Air Force are not run down by the Tories, yet these are all nationalised services and very efficient ones, too. The hon. and gallant Member for Knutsford (Sir W. Bromley-Davenport) who made a massive attack in his Second Reading speech—I do not know what Amendment he was dealing with—adorned one of the nationalised services when he was in the Brigade of Guards.
  Mr. Webster: Will the hon. Member declare what Amendment he is dealing with?
  Mr. Manuel: I have kept myself in order by following the points made by hon. Members opposite. I have spoken to each of the headings that I jotted down. However, I think that I should be straying now if I began to deal with other nationalised services, although they have been mentioned already in the debate. In view of the country's transport needs, it should be recognised that there is a need for the Transport Holding Company to be able to borrow up to the amount specified.
  Mr. Julian Ridsdale: I am glad to support my hon. Friend the

  973
  Member for Weston-super-Mare (Mr. Webster), who moved the Amendment so ably. I find it difficult to approve the expenditure of such a huge sum of £70 million on the nationalisation of buses and coaches at a time when we are expecting sacrifices in the social services, on the educational side, and on prescription charges. I wonder what was going through the mind of the Secretary of State for Education and Science as he sat listening so attentively to the debate. Unfortunately, he has now left us. I could not help wondering whether he thought that this expenditure of £70 million was worth while at a time when he has to make such sacrifices.
  Mr. Manuel: Where in the Bill does it say that the Transport Holding Company w ill spend £70 million?
  Mr. Ridsdale: The hon. Gentleman is quibbling. He knows full well that the total sum will be £70 million.
  Mr. Michael Heseltine: On Second Reading, the Minister of State said:
  "The purpose of the Bill, therefore, is to enable it "—
  that is, the Transport Holding Company—
  "to borrow additional sums from the Minister sufficient to enable it to complete the purchase of shares in the B.E.T. Bus Group and still leave a sufficient margin for other contingencies which may arise."—[OFFICIAL. REPORT, 16th January, 1968; Vol. 756, c. 1635.]
  Mr. Ridsdale: I am grateful to my hon. Friend.
  The crucial question is: how is this money to be raised? Is it to be borrowed on the market? The holding company earns 5 per cent. on its assets. The market rate for money at present is 8 per cent. or 9 per cent. Who is to pay the difference—the taxpayer? At a time when the Government are trying to cut back on Government spending, the taxpayer is once more asked to foot the Bill. In view of the cross-currents of finance set up by the Bill, not only the taxpayer, but also the consumer, will have to pay the price of nationalisation. I fear that, as has occurred with rail fares, electricity charges and gas charges, bus fares will rise throughout the country as a direct result of the Bill, because it is brought forward at a very inappropriate
  974
  time in the country's finances. This is why I ask how the money is to be raised.
  Mr. Nicholas Ridley: The money will be printed on the Government's printing press.
  Mr. Ridsdale: Everyone is bothered about how the money is to be raised, but we know that the consumer and the taxpayer will, in the end, have to pay.
  4.45 p.m.
  Mr. J. E. B. Hill: The theme of the Minister's speech of alleged good commercial sense is what worries me. It carries the implication that the board of the Transport Holding Company supports this idea. All the evidence points the other way. The allegation that the purchase of the B.E.T. shares was the result of a commercial agreement is nonsense. The background obviously was that, if the shares were not sold by agreement, compulsory powers would be taken. That destroys the Government's whole case. If the Government had put the Bill forward on the basis that this was a flagrant piece of out-and-out expropriation on bad terms for the taxpayer, we might have accepted it as a bitter pill. However, to dress it up as sound commercial practice is more than one can stomach.
  It is absurd to allege that it is necessary to own everything in order to avoid borderline overlapping and lack of liaison. It is easy for two organisations such as the Transport Holding Company and B.E.T., which have worked together successfully over a period of years, to Make any further marginal adjustments which may be necessary. There are good precedents in other sectors of industry. In sugar marketing, the whole country is zoned up for efficient marketing arrangements between two large bodies. That precedent could well stand for bus transport.
  This acquisition by the public takes place against a background of declining profitability. The decline is occurring largely because competitive management is disappearing. My hon. Friend the Member for Worcester (Mr. Peter Walker) put this very clearly on Second Reading:
  "The Government are trying to create a system in which no comparison has to be made with nationalised undertakings."—[OFFICIAL REPORT, 16th January, 1968; Vol. 756, c. 1651.]

  975
  That is the nub of the matter, because the yardstick of efficiency, and, therefore, of profitability, will disappear with this merger.
  The decline in profitability is obvious, because the Transport Holding Company's profits, which rose from £14 million in 1963 to £17 million in 1964 and 1965, then began to decline—to £14 million in 1966. I do not know what the figure is for 1967, but it is not likely to be more than £10 or £12 million. I am prepared to wager that the profits will be much less than that by the time 1968 is over. They are tailing down, and the downward trend is even more significant inasmuch as, in the latter years, those declining profits are related to a larger capital base. The Transport Holding Company has acquired some large undertakings in recent years, and yet, despite that great increase in the structure, profits are going down.
  Why? There are the great pressures operating against profitability. Bus fares tend to be controlled downwards, for quite understandable reasons. In a nationalised industry, the pressures to keep fares down will be even greater, and the Government will always be subject to the political temptation to resist what may be a necessary increase for commercial purposes. On the other side of the scale, with competitive management, there is a lively pressure to contain wage costs. In a sole nationalised monopoly, that incentive is removed. The evidence is clear. In the history of recent negotiations, the B.E.T. played a very useful part in having to emphasise commercial standards because it had shareholders to which it was responsible.
  Declining profitability will tend to follow from the introduction of the freight liner system, not because it is not good in itself, but because the railways will be most anxious to make it a success. Such rates as I have noted from firms with which I have been in touch seem so favourable that I can only suppose that there is an element of loss leading in them. Loss leading is all right in a commercial company if there are shareholders to check what is happening to the reserves. In a nationalised industry, loss leading is a dangerous practice, particularly in a matter such as transport where it is so extraordinarily
  976
  difficult to get accurate separately identifiable costings.
  For all those reasons, there is a declining tendency. There is another reason, which may not be very welcome to Government supporters. Once a large sector of what should he commercial transport is passed under nationalised control, the inquisitiveness of the Stock Exchange is lost. No longer does the Stock Exchange look at the use of capital and the efficiency of management. trying to decide whether a particular firm is doing relatively well or badly. It is lost in the nationalised maw, and a powerful check on management is removed, a check which the action of the Stock Exchange maintains on other private enterprises.
  The Transport Holding Company has, in my judgment, owed its success to sound commercial management. It would be madness, therefore, to authorise a further extension of credit so that one folly can be piled upon another. If the cash is to be paid out, it will result in a demand on real resources. I cannot accept the Government's view that it is just a transfer of assets. It all depends on how the transfer is financed. Where is the £70 million to come from? If it is to come genuinely from savings, it will not be inflationary. If it is to come genuinely from increased taxation, it may be inflationary only in an indirect sense. But if, as I suspect it will, it is to come from Government-created credit, this will most certainly be inflationary at the time.
  When my hon. Friend the Member for Harwich (Mr. Ridsdale) was speaking, my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) interjected a comment about printing money. It is even easier nowadays. One need not go to the trouble of printing £ notes. Just write out a few extra Treasury Bills. It is much quicker and easier.
  The Government's policy here could be disastrous. In my non-parliamentary activities, I have to put such agricultural projects as I have to a searching test—the local bank manager. These proposals would not survive the test of a branch manager's examination.
  Mr. Henry Clark: Although the theme of buses has dominated the debate so far, I hope that

  977
  this will not deter the Minister from paying at least a little attention to the tail of the dog here—a very important tail—the Irish Sea shipping services which are owned by the Transport Holding Company.
  I approach this debate with an open. mind, and with the rather limited interest not of buses but of the Irish Sea shipping services. I am certain that, if the Transport Holding Company were to approach shareholders on the stock market with the paper we have available here as the prospectus, in the first place the Stock Exchange Council would not allow it to ask for money. The last accounts we have ended in December, 1966. We have had no current information on the trading of the holding company for the last 14 months. This is despicable. It is well below normal commercial practice, and one generally expects from Governments something rather better than commercial practice in the matter of supplying information.
  On the Government benches there are just three hon. Members sleeping. One wonders whether the Labour Party is looking after the interests of the public, when £70 million more is about to be thrown down the drain.
  Mr. John Page: There are only two hon. Members opposite, not three.
  Mr. Clark: I accept the correction. It is remarkable that the hon. Member for Central Ayrshire (Mr. Manuel), who should have an interest in the route which links my constituency to his, the LarneArdrossan ferry, made no mention of it in his long speech.
  It is typical of the nationalised industries that we have here a major interest of the Transport Holding Company in buses and a minor interest in shipping services. It is just the same on the railways: there is a major interest in railways and a minor interest in shipping services. Whenever one tries to get an idea of the Government's policy for shipping services, the discussion is dominated by talk of bus or rail services. I hope that one result of this debate today will be to elicit from the Minister an assurance and a statement of what the Government's policy is for the Irish Sea shipping services.
  978
  Much of the £70 million will, no doubt, be wanted for buses, but some of it may be wanted for ancillary purposes. It is not without interest that in the accounts ended December, 1965, the Atlantic Steam Navigation Company, which operates in many cases with a great deal of enterprise in the Irish Sea, made a profit of £782,000, and in the following year it made a loss of £90,000. Could the Minister give an explanation? I know that there was a shipping strike, but I do not think that that went the whole way to change a profit of more than £700,000 into a £90,000 loss. What is happening to the Larne-Ardrossan and Larne-Preston routes? There have been new developments on which the Minister will have to enlighten us.
  5.0 p.m.
  Some considerable time ago the Government purchased the Atlantic Steam Navigation Co., which had been taken over and run with great efficiency by the late Major Bustard as probably the first container shipping service in the world. I am very happy that the Government have seen fit to allow it to be run very largely by the Bustard family, but the Government still control the company's overall policy. Only the other day we heard that it has broken out of that monopoly of Irish Sea freight rates which used to be called the Euston Shipping Conference and became the Irish Sea Shipping Association. I was delighted to hear it.
  What exactly is the policy to be on freight rates? Shall we have a fully competitive service? I have no doubt that the Bustard family would like to run an efficient service and long may they continue to do so, but will the Government say, "You must put your balance sheet right. You must make profits on your shipping services, as in the past. to bolster up your bus companies." The bus companies may be vital to many of the rural constituencies, but I do not think that any bus service to any part of England is half so vital as the general level of shipping freight rates from Ireland to England. Unless we halve commercial and competitive shipping rates, the whole of industry in Northern Ireland can suffer.
  I come here with an open mind, because we have little information, but if I do not receive the information I want from the Minister I shall return to the

  979
  point. We have never been able to find out British Rail's policy on its £700,000 profit on the Larne-Stranraer route. What is the policy of the Transport Holding Company on the £782,000 profit of the Atlantic Steam Navigation Company two years ago and last year's £90,000 loss? Is the Transport Holding Company's policy to run the Irish Sea services at the maximum possible profit so that it can bolster up its bus companies and perhaps show a decent balance sheet, for once in a nationalised industry, or is it, as it should be in a nationalised industry, to produce the lowest and most competitive commercial rates on the Irish Sea, both for the good of the company and of industry on both sides of the Irish Sea?
  We want an answer from the Minister before the House can vote an additional £70 million capital to the Transport Holding Company, which would not stand a chance of raising 6d. on the Stock Exchange.
  Mr. John Tilney: I. very much agree with what my hon. Friend the Member for Antrim, North (Mr. Henry Clark) has just said. I remember from my history books that at the time of the South Sea Bubble a prospectus was issued of a project the details of which were subsequently to be announced. The prospectus of the right hon. Lady is very similar, and it seems to me that she is the modern bubble.
  I am not against passenger transport authorities; I have the honour to represent an urban constituency, and many of my constituents enjoy going into the country. But if the rural buses are to be in adequate supply they should have an open subsidy which is known to all, and their losses should not be covered up in a bigger organisation. There is something to be said for a passenger transport authority on Merseyside. I think that passenger transport there has been balkanised a bit too much. We have the Crosville Company, which is now partly owned by the railways, and the Ribble Company, which is partially a Transport Holding Company possession.
  The hon. Member for Bodmin (Mr. Bessell) referred to a number of cities and the amount of compensation they
  980
  would receive. I do not think that he mentioned Liverpool. We have a deficit on our transport operations at present of, I think, £3 million, but we have immense assets, worth about £8 million, including the great Edge Lane Depot. Will they be taken away? Will the ratepayers of Liverpool thereby suffer unduly? I do not understand that being done by a Socialist Government, which has a large number of Socialist hon. Members from Liverpool at present. I hope that the ratepayers will take note of that in the years to come.
  What will the Minister do about private hire, and about private enterprise companies which run excursions? There is a large number on Merseyside. Will they be taken over or squeezed out over a period of years? Admittedly, Liverpool Corporation buses can compete with them now, but only within the boundaries of Liverpool.
  Will the Minister increase unnecessary and, above all, unfair competition with those who pay rates and do not just draw the rate money in? Unfortunately, this is the Socialist thought in so many cases.
  I understand that every three years the private companies must go to the North-West Traffic Commissioners for a licence. What will happen in the future? Will the licence be allowed for the first few years and will there then be threats to take it away just when the P.T.A. becomes a bit stronger? This is really blackmail under the blanket. It is just around the corner. It is what all the companies fear and that is why they are now going to the Minister and hoping to get a reasonable price for their assets. I understand that they must apply to commissioners in other areas to which their services go. If the national competitor objects, what will happen? It is judge and jury in one, and the private companies know that they will have an unfair trial.
  What will happen about the agencies, some of which the Minister already owns and others will presumably be bought? Will they be instructed to let tours out only to those companies which have been nationalised? That is the fear running through so many private enterprise companies which produce the profits which the country and the Chancellor of the Exchequer want, rather than the losses which the Minister will produce.

  981
  The roads in Liverpool are bad. We have often talked about the need for links with the M6 and the docks, but not many are provided in the immediate road programme. Houses, which the people of Liverpool and people throughout the country greatly want, are to be cut—admittedly not in the development areas—because of devaluation and what the present Socialist Government have done. Yet, on the very day that the cuts were announced, this Bill had its Second Reading. What folly! Do the Government never take account of what people overseas think? I thought that it was important that the £ should be supported. None of us wants another devaluation, yet this is the sort of action that will make people overseas wonder whether we really mean what we say.
  Mr. Harold Gurden: A few moments ago the hon. Gentleman opposite asked how it came about that I and my hon. Friends were wondering what would happen to the £70 million and whether that figure ought to be discussed. He said that there was no justification for alleging that £70 million was involved. But where in the Bill is there an assurance that £70 million more will not be spent? I should have thought that anyone with experience would recognise that once a figure is inserted for any form of nationalisation it will not be the end of the story and that at some later date the Government, if they are a Socialist Government, will come forward for a higher figure still. Therefore, it seems that the £70 million is not the end of the story. I think it fair to assume that £70 million is the figure involved since it is the one that is given clearly in the Bill.
  The hon. Gentleman also said that it was right that profitable bus routes and areas should subsidise the unprofitable ones. This is another typical piece of Socialist philosophy. The cities that have just been mentioned have considerable assets in public transport. Certainly someone must speak for Birmingham, which has a very large undertaking with enormous assets and no debts. Birmingham is to get none of the £70 million as I understand it. Who has paid for the assets that Birmingham, Bolton, Salford and other cities have in their transport undertakings? The answer is the citizens who use the services, the people who have
  982
  paid the fares on the buses. It is the ratepayers who have created those enormous assets, and now they are not to get a penny out of it.
  It may be that some of us who do not like nationalisation do not like this sort of operation, but might be tempted to go along with some parts of the Bill if it were fair and equitable to all concerned, but, clearly, that is not so. It is not even pretended that the Bill will be fair to the bus-using public and the ratepayers.
  Even this is not the worst of the story. There is more to come. If cities like Liverpool and Birmingham are to lose their services they, too, may find themselves subsidising other non-profitable services. As well as losing all their assets, they will have to start subsidising other services. What is more, they are to be told exactly how much is to be levied on the rates to pay for any losses that may be incurred anywhere within a certain area.
  Some of my hon. Friends have spoken about the possibility of the financing of this sort of operation or similar ones being done by the free money market. Let there be no mistake about it; if cities like Birmingham and Liverpool were to have their undertakings taken over by the stock market, the ratepayers and bus users would at least get some compensation, but they will get nothing from the Government.
  I hope the Government will think again even at this stage of the Bill. Let us try to make sense out of this in combination with the Transport Bill and see whether we can give some satisfaction to cities which have such enormous assets. Why should they be robbed? Why should they always be at the losing end of the stick? It happened years ago with electricity and gas undertakings. Birmingham and other cities lost all their assets—many millions of £s. They have never had anything back for this. That also was under a Socialist Government. They were told that it would be better for them.
  Mr. Tilney: And prices have gone up three times.
  Mr. Gurden: My hon. Friend is right. I was just coming to that point. The cities have seen nothing but increasing costs. They could have supplied their own gas and electricity at much lower prices than

  983
  they are having to pay now. The same thing will happen with transport. These cities will not only lose everything they have but in future will have to pay considerably more and even have a precept on the rates on top of that.
  5.15 p.m.
  Mr. Ridley: Two or three of my hon. Friends posed a very important question. They have asked where the money is to come from. My hon. Friends the Member for Harwich (Mr. Ridsdale) and Birmingham, Selly Oak (Mr. Gurden) referred to the possibility of borrowing the money. The Government must be frank about it. The money is not going to be borrowed. This is money which gives Mr. Pierre-Paul Schweitzer a feeling of horror and chill and makes us put a ceiling on our net borrowing requirements. He is not interested in any part of our accounts other than the strange figure of the net borrowing requirements, and this is because he knows that the present Government cannot borrow anything and that instead they are printing the money.
  I have with me the accounts for 1965–66, and these show that the increase in indebtedness—that is, printing—plus the increase in notes and coins—that is printing—together total £376 million. The increase in savings and marketable transactions together total minus £147 million. The increase in borrowing abroad is £403 million. The net change in gold and foreign currency reserves is minus £128 million. So the Government did not borrow a penny that year. They paid out £147 million. What they are doing is whirring the printing presses round in order to fob off this counterfeit currency in exchange for pinching the assets of the nation's business and enterprise. It is a most disgraceful way to carry on. If the Government went into the market and honestly raised £70 million by the issue of gilt edged stock and then lent it to the Transport Holding Company, there would be some justification for the Bill.
  But all of us in our heart of hearts know perfectly well that we are playing a game. The Government have not borrowed for 10 years. If one adds up the figures over the last 10 years one finds that the Government have not borrowed a single pound in that time. All this talk about capital in the public sector is so much hogwash. The capital that goes
  984
  into the public sector is a mixture of forced saving by over-taxation and of Government printing. In the year in question £171 million was from over-taxation and £376 million from printing. One cannot put a price on this money. It is not money that one borrows. It is an amalgam of tax money and printed money. Therefore, if we are to dole this stuff out to the Transport Holding Company we have to understand the implications of so doing upon our national finances. Every further tranche which we dole out to the nationalised sector further devalues our currency. Admittedly, a few years elapse before we have to pay the bill, before we are caught up with it, but if we do not do this. if we do not nationalise these companies, if they are left alone, as so many of my hon. Friends have cogently suggested, this form of erosion of the pound will cease.
  If the Government want to make an honest currency out of the pound, they must withdraw the Bill and any similar Measure which they may wish to bring forward for any more of their loss-making enterprises of which they are so proud. That is why the International Monetary Fund has put a limit on our borrowing. It is not because the Fund is cantankerous, stupid, mean-minded or looking at the position from the viewpoint of accountants. It is simply because there is a limit to the amount of money that one can print if one expects to borrow heavily from bankers overseas. As the country is now so heavily indebted to our creditors throughout the world, it does not help at the same time to be printing like mad to devalue that debt still further.
  On purely financial grounds, therefore, it is quite wrong to lend this money. The problem would be bad enough if it was working capital for the Transport Holding Company, but to print money to nationalise sensible, viable concerns is the height of folly. I very much hope that hon. Members opposite will join us in the Lobby in demonstrating for once that they are on the side of the currency instead of the Labour Party.
  Mr. John Page: This is the most important Amendment that we are discussing to the Bill which finally knocked away the rickety bridge across the credibility gap for the Government. It was

  985
  on 16th January, immediately after the Prime Minister's statement, that we had the Second Reading of the Bill to get more money to spend on more nationalisation. This afternoon, only one hon. Member on the back benches opposite—the hon. Member for Central Ayrshire (Mr. Manuel)—has bothered to be here to listen to the discussion concerning £70 million of the taxpayers' money.
  I do not believe in nationalisation or in State control, but if I did I would not go around buying up bus companies with the unlimited sum of money that the Lobby fodder on the benches opposite are prepared to give the Government.
  Mr. Manuel: When the hon. Member says that he would not be bothered about buying up bus companies, I do not know whether he knows the geography of Scotland and where the Government—[ANHON. MEMBER: "Oh."] Stop groaning, and you will hear something that will educate you.
  Mr. Frederic Harris: It will be the first time from the hon. Member.
  Mr. Ridley: On a point of order. May I speak to your defence, Mr. Irvine, and say that you do not need educating? You are perfectly educated and the hon. Member should not seek to educate you.
  The Temporary Chairman (Mr. Bryant Godman Irvine): I do not think that any point of order arises, but hon. Members should address the Chair.
  Mr. Manuel: Thank you, Mr. Irvine.
  I know that the hon. Member for Harrow, West (Mr. John Page) is fair-minded. I want him to realise that both his Government and the present Government have had to invest very large sums of money in bus undertakings, steamship undertakings, the Orkneys Steamship Company and MacBraynes on the West Coast of Scotland in running all those steamship and bus services to keep a service going at all. The hon. Member's phillosophy would be to write off the whole of that because those services do not pay. Is that the proper way to treat the people of Scotland, of Wales, or the North-East?
  Mr. Page: If the hon. Member will be patient, he will find that the philosophy
  986
  enshrined in my three-minutes speech is a complete answer to his question and one which I believe, is embraced by wise hon. Members on both sides.
  My philosophy is the Beeching philosophy for running a nationalised industry, that it should be run economically and at a profit. If a particular undertaking cannot be run profitably, a special proposition must be made to the Government or to the local authority to ask for a subsidy for the service. That seems to make sense. To go around blindly buying up rather ropey businesses, however, is something which I do not understand.
  If I believed in nationalisation, I would spend the money on buying some really good stuff which would give a good return to the taxpayer. That is where the words of the Minister of State about the Bill making good commercial sense ring so hollow. Every argument made during his Second Reading speech for buying up these bus companies was the opposite of good commercial sense. The hon. Gentleman can put the argument on any other grounds he likes, but to say that it is done for good commercial sense is not true.
  Mr. F. A. Burden: Would it not be better for the Government to buy the ropey old concerns which are not making a profit—
  The Temporary Chairman: Order. The hon. Member should address his remarks to the Chair.
  Mr. Burden: I am sorry, Mr. Irvine. Would it not be better for the Government to buy up the ropey old concerns which are not making a profit rather than buy up good ones which are making a profit and then put them in the same position?
  Mr. Page: When my hon. Friend reads the account of the interesting speeches which we have had so far today, he will realise that into the Government's maw are likely to go all the transport undertakings, both those which are profitable and those which are not. That is what seems to be so particularly stupid. It is being done only to sublimate the monopolistic desires of the Minister of Transport to have complete centralisation for all transport undertakings.

  987
  The board of B.E.T. has done very well out of its deal with the Government. It has got its £35 million and it will be able to invest it at a higher profit than it has been making in running the buses.
  Mr. Manuel: Not as well as Ferranti did.
  Mr. Page: B.E.T. has been successful.
  From the sum which we are supposed today to be granting for the purchase of B.E.T., some money will be left over. We have heard very little about how this is to be spent. The Minister of State is asking for a blank cheque so that he can spend the money how he likes, but it seems to me that the extra money is likely to be spent on paying back the loans and the overdrafts of various municipal bus and other undertakings so that when they are taken over, the overdrafts and the loans will be paid.
  With those municipal undertakings, the Minister of State is also taking over other undertakings which do not have debts. It is extraordinarily unfair that ratepayers and others who have invested their money in successful undertakings should, apparently, get nothing, whereas those who have been unsuccessful will have their loans made up by the remainder of the taxpayers.
  Surely, the final answer to the transport position is as I have outlined and as Lord Beeching has clearly stated. The real answer is that there should be as much competition as possible. My hon. Friend the Member for Crosby (Mr. Graham Page) spoke of the car transporter business which was losing money by trying to undercut private enterprise, which seemed to be making a profit from the same business. In my constituency of Harrow, two routes which have been dropped by London Transport as being unprofitable are now being run profitably by local bus undertakings.
  Surely that makes sense. The real answer is to devolute power, not to acquire it. We deserve much more support from the hon. Gentlemen opposite in the Division Lobby tonight than I suspect we will get in turning aside and rejecting this absurd Bill, on the very logical grounds which have been outlined.
  5.30 p.m.
  Mrs. Jill Knight: The man in the street knows only too well from bitter experience that an industry nationalised is an industry in the red. He was made uncomfortably aware of this only last week when he read that nationalised steel is now losing £1 million a week, and he knows very well that the railways are losing more than £2 million a week. There is usually some gloomy compensation in the fact that at least all are suffering equally under nationalization.
  In the present Bill even suffering is not equal. Some authorities, says the Minister, will certainly suffer more than others and Birmingham will suffer more than Glasgow. A technical reason why Glasgow is to get compensation and Birmingham is not has been advanced, and I have listened to it most carefully. The citizens of Birmingham have a directness of approach which the Minister would do very well to emulate. Technical reasons are beside the point. The point is that Birmingham ratepayers will have to foot a large bill, from which Glasgow is freed.
  As my hon. Friend the Member for Birmingham, Selly Oak (Mr. Gurden) pointed out, Birmingham, with its ability in this direction, and willingness to run the authority well, has done it so very well that it has no deficit. Because it has done so well it is now to have thrust upon it this extra rate burden, while Glasgow—and I understand that this figure is correct, but I am open to correction—is £6 million in the red on its transport undertakings. It is to get off scot free, and I use the phrase advisedly.
  Mr. Manuel: On the point about the takeover of the assets, the hon. Lady was in local government I understand, and she will realise that in this connection local government services, such as the hospital service, have been taken over by a local authority or a group of them, and it was always agreed that one took over the assets or the losses. There was no sort of exchange of money. One cannot have it both ways.
  Mrs. Knight: That is precisely the point that I made earlier. It is the kind of point for which the Birmingham citizens will not have the smallest hit of

  989
  sympathy. What it boils down to is that an authority which has run its transport undertaking well enough will have to pay twice, in that it will get no compensation at all, but will have a heavier burden thrown upon the rates.
  It is interesting to read on page 3 of Cmnd. 3481 the following:
  ".‥the main network of public transport is no longer an appropriate activity for private companies whose prime duties must be to their shareholders.…"
  This reveals a very bad sort of reasoning, and a very bad ability to reason on the part of the authors of the White Paper. The fact is that if the authority is not running well, and the public are not using the transport system, then the shareholders will suffer and they will be the very first to insist on a bus service being run at a benefit, so that they receive that benefit as well as the travelling public. This dismissal, as it were, of private enterprise, leaves completely untended another important question and that is: who bears the losses? Why, the shareholders do.
  We are talking now about the public who are suddenly to bear these losses. For these reasons I felt that I must intervene in this debate, partly because my own city, part of which I have the honour to represent, feels extremely sore about the treatment that is being meted out under the Bill—and it is right that the Minister should know this—and partly because I must put on record the feelings of the citizens of Birmingham over this bad, unfair and totally illogical Bill.
  The Joint Parliamentary Secretary to the Ministry of Transport (Mr. Neil Carmichael): We have had a most interesting and exhaustive debate, and I will endeavour to reply to the points raised. It should be recognised that many of these points, while quite properly included in the discussion of such a Bill as this, would probably be more profitably discussed in Standing Committee F, such as the points relating to the P.T.As., which are being discussed there currently.
  It is also true to say that many of the points raised are even more appropriately in order on another, later Amendment, dealing with municipal transport. This debate has to some extent followed that of the Second Reading debate on 16th January, and a very great deal has been
  990
  made of the borrowing of money at such a time, when the Prime Minister had just made his statement on the cuts in expenditure. I felt that this had been dealt with fully by my hon. Friend the Minister of State, myself and many other hon. Friends, when we dealt with the question of the assets not being transferred but the physical resources from one heading to another.
  It was pointed out that the return would more than cover the outlay by the Government. There have been some questions about the rate of return payable. I remember discussing this on Second Reading. The British Electric Traction Company rate had been something like 5¼ per cent. It was pointed out that while that was what it was distributing, the actual profits of the company were probably nearer 9½ per cent., as shown in the recent application for an increase in fares.
  Mr. Peyton: This is where the difference lies. It may have been dealt with fully, but it was not dealt with adequately. The point about this being a transfer of assets is blurring the edges. One is paying out cash. As my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) pointed out, this has to be printed. This means extra money in the system and it is directly inflationary. What really disturbs us is that there is no Treasury Minister here to answer these arguments, because it is the Treasury's scandalous disregard for propriety in this matter that is undoubted.
  Mr. Carmichael: This was dealt with very fully on Second Reading. I do not say that we can satisfy the hon. Gentleman. We can only give the facts, and hope that they are sufficient at some point, to convince him that we are merely transferring the assets and not creating any new physical demand on resources because of the transfer of these assets.
  Mr. Webster: Will the hon. Gentleman give an answer to the question which has been asked many times: what is the compensation for the minority interests in B.E.T. and other bus companies?
  Mr. Carmichael: That is what I hope to come to in the full discussion on the Amendment.

  991
  In the Bill, we ask for an increase of borrowing powers from £30 million to £100 million for the Transport Holding Company. Up until now the Company has spent about £21 million of its existing borrowing powers. The total borrowing powers at present are about £30 million. The Company believes that it will require to borrow to the limit of the £30 million in respect of its capital investments in vehicles and fixed assets in the year 1968. If the Amendment went through, and gave it only £35 million, which would be about the figure that was negotiated between the financial advisers of the B.E.T. and the T.H.C., it would be left extremely short.
  There is the problem of the private shareholders in the British Electric Traction Company. The negotiations have not reached a stage at which a firm figure could be given. We are at the stage of not knowing what the figure will be. Therefore, considerable leeway must be allowed to the Transport Holding Company in its borrowing powers to be able to purchase these shares. But we have no doubt—
  Mr. Heseltine: Am I to understand that the Transport Holding Company does not know the extent of the capital commitment into which it has entered to acquire B.E.T. buses?
  Mr. Carmichael: This is still being negotiated. Obviously, there are limits on the figures. We have an idea of the figures, but negotiations between the advisers to the B.E.T. and the Transport Holding Company are proceeding and private shareholders' shares will be purchased on advice from private bankers, on a basis relative to the purchase of the larger B.E.T. shareholding. It is not possible to give a precise figure, but there are limits within which the Transport Holding Company is working.
  I was interested in the general tenor of the debate. I thought that we had all agreed on Second Reading that the Transport Holding Company was a viable company, but we have had all sorts—
  Mr. Gurden: This explanation about the £70 million and the borrowing has not satisfied us. The Prime Minister
  992
  said that no sacred cows were to be untouched. What sort of cow does he call this one?
  Mr. Carmichael: This is the same point. We obviously disagree on the question of physical assets. I do not see us getting agreement on it tonight. We believe that physical assets are not involved. The money is coming from the market—[An HON. MEMBER: "Which market?"] Coming from the Government, which will require to borrow it. The pool of money borrowed will not be any greater because the British Electric Traction Company will not be bought for pennies and halfpennies in actual cash. It will be bought for stock in large investment companies which will, in turn, be lending this money in another way.
  Mr. Peyton: The hon. Gentleman has admitted that the money will have to be borrowed. Is he saying that this money will be borrowed on the long-term duties market, or will there be Treasury bills'?
  Mr. Carmichael: There will be Treasury bills.
  Mr. David Mitchell Mr. David Mitchell (Basingstoke) rose—
  Mr. Carmichael: The Transport Holding Company has been told by the Government, and it was explained on Second Reading, that the balance of the money for which borrowing powers are asked would be used to take up any commercially viable offers or opportunities that it thought it could profitably take up. The extra borrowing powers are for that. It has been suggested—
  Mr. David Mitchell Mr. David Mitchell rose—
  Mr. Carmichael: I will not give way. I have given way a number of times. Many Members opposite did not give way when they were asked questions earlier.
  There have been a number of suggestions that the type of business which the Transport Holding Company has taken over has been commercially viable one moment and has turned out the next to be described as extremely ropey. I prefer the comments made on the Second Reading by the hon. Member for Worcester (Mr. Peter Walker), who said:
  "The one reason why the Transport Holding Company has had such success is that it has

  993
  been run by those who have a commercial attitude.—[OFFICIAL REPORT, 16th January, 1968; Vol. 756, c. 1651.]
  We believe that the Transport Holding Company has been a highly profitable organisation.
  I would now like to deal with one or two of the points which have been raised. The hon. Member for Crosby (Mr. Grham Page) dealt with a specific subsidiary of the Transport Holding Company and what appeared to be the great difficulty into which it got. The holding company has about 100 or more subsidiary companies. Periodically, one or other of these companies will find itself in commercial difficulties. As all large organisations and holding companies find with their subsidiary companies, periodically one of them gets into difficulties and it is the decision of commercially motivated men whether to subsidise that company through a difficult patch to reap the greater profitability in the long run or wind it up. It is obvious, in the case mentioned by the hon. Member for Crosby, that the holding company, with this commercial judgment about which we have been told, decided that it was better to lend additional money to get it through a difficult period.
  5.45 p.m.
  On the question whether this company unfairly cut rates, which could be a serious thing, if the hon. Gentleman —he is not here, but I am sure he is an extremely attentive man and will look at the reply—will give us or the Transport Holding Company some of the details about whether rates were cut, we will be only too pleased to examine them.
  A great many of the points that were raised can more profitably be dealt with on the question concerning municipal buses and municipal services later on.
  To leave more time for future debate on the other Amendments, we think that £100 million is absolutely essential for the Transport Holding Company to give it enough elbow room to do the job for which it was set up by the Tory Government in 1962.
  I would point out one example relevant to the question of asking for more than is immediately necessary. In the 1962 Transport Act provision was made for the British Railways Board to borrow about
  994
  £550 million. This sum was thought to be enough to last about five years. During the five years since it came into existence the Board has borrowed less than £100 million. In other words, the Tory Government have given the British Railways Board borrowing powers for £400 million more than they required to give them space in which to operate.
  This example shows that some margin must be provided for in any large organisation in respect of borrowing powers. We do not believe that such a ridiculous and extravagant sum as £400 million additional elbow room is required. In the present fluid situation with the Transport Holding Company, we believe that a modest margin of £30 million is reasonable. I therefore ask the Committee to reject the Amendment.
  Mr. Heseltine: It is extraordinary that the Joint Parliamentary Secretary should explain to the Committee that he is totally convinced that he needs another £70 million between now and the end of 1969 to do the work of the Transport Holding Co., when, on the Second Reading, he said that that was when the T.H.C. was to be wound up. The T.H.C. has used £21 million since 1962, when it was set up. Of that figure, it has used £11 million since the end of 1966, and we are now told that it needs an additional £70 million for the remaining one year that it has to live. This is an extraordinarily extravagant way in which to spend this money.
  Earlier today the Minister of State gave us the impression that the T.H.C. and the B.E.T. had completed an arms-length transaction without any reference to the Ministry of Transport. It had been agreed by everyone that it was in the best interests of the bus industry that this deal should take place. The Minister knows that this is not the explanation. It bears no relation to the negotiations that went on, and the only reason why the T.H.C. decided to make an approach to the B.E.T. in the first place was that it was appalled at the Passenger Transport Authority proposals about which the Minister was having discussions. It decided that the only way in which it could prevent the Minister from establishing the sort of P.T.A. that she had in mind was for it to buy out the B.E.T. buses. This is why the negotiations took place.

  995
  If the Committee wants evidence of that, we have the statement of Mr. Spencer Wills, the Chairman of the B.E.T. He explained what he thought of the Minister's proposals, and this quotation underlies the decision of the B.E.T. to accept the offer made by the T.H.C. He said:
  "It is always quicker and simpler to destroy than to build well. To my mind it would be tragic if your bus interests in the united company which, together, form a healthy viable structure—one fit to emulate, and be emulated by, the best in other groups—were now to be sacrificed in favour of the untested fabrication of a passing Minister."
  That is the background to the offer being made. That is why we have this vast extension of borrowing on behalf of the T.H.C., and it is ludicrous for the Minister to go on pretending that this is some kind of arm's-length rationalisation of the bus industry for good commercial reasons, dreamed up in the offices of the T.H.C. It is simply rubbish, and the Minister knows it.
  Mr. Peyton: Perhaps my hon. Friend will remind the Minister of State of what is said on page 11 of the White Paper, Public Transport and Traffic:
  " The price—some £35 million—represents the T.H.C.'s estimate of the value of the underlying assets."
  That is in the B.E.T. There was no negotiation. The T.H.C. fixed the figure.
  Mr. Heseltine: I am grateful to my hon. Friend. I shall deal with that in due course. The situation is admirably summarised by that quotation from the White Paper.
  In spite of repeated requests to do so during the discussion on these Amendments, the Government have made no attempt to justify the calculations upon which this figure of £35 million is based. No attempt was made in Standing Committee F, or has been made in the House, or in public, to give any indication of how this £35 million is justified.
  This is a serious situation, because the Minister is trying to justify the decision to spend this money. I would have thought that he would have made some investigations into whether this was a fair price. Despite everything that has been said from this side of the Committee this afternoon, neither the Minister of State nor the Joint Parliamentary Secre-
  996
  tary has seen fit to give us any justification for it. The explanation is that they are not particularly interested in justifying it. They are so glad to see the buses come under public ownership that they do not care how much money is spent to achieve that result.
  My hon. Friend the Member for Crosby (Mr. Graham Page) referred to a lamentable situation which has arisen in his constituency. It is the sort of situation about which we are worried.
  The Joint Parliamentary Secretary explained that so far £21 million of the £30 million ceiling had been used. We would therefore have thought that another £9 million were available for the purposes of the B.E.T. acquisition, but we are told that this money is to be invested in additional assets. Has no provision for depreciation been made in the accounts of the T.H.C.? Has no provision been made to cover the extension or replacement of assets of this sort? This is the sort of question which the Ministry should have asked when the T.H.C. wanted to borrow the money. The Joint Parliamentary Secretary refused to give us a clear explanation of how much money is to be spent on the further acquisition of the minority interests of the B.E.T.
  It is extraordinary that we should be giving what amounts to blanket authority to spend a vast sum of money. We are told that the T.H.C., when it made the bid in the first place, did not calculate how much additional money was to be invested to get hold of the minority interests. If a takeover bid in the private sector was organised in this way, there would be a howl of protest from the financial journals.
  The hon. Member for Central Ayrshire (Mr. Manuel) may sneer at the pressures of the financial journals, but one of the purposes of these watchdogs of the Press is to ensure that this sort of reckless bidding does not go on. The chairmen of companies proposing takeovers do their homework. The Ministry of Transport has not done any. It does not know why the £35 million is required and it has no idea what the further commitment could amount to. This is a remarkable revelation.
  Mr. Manuel: The hon. Gentleman must remember that he is a rather young

  997
  Member. He should realise that the powers which we are using were put on the Statute Book by his Government. During the Second Reading debate the hon. Member for Manchester, Withington (Sir R. Cary) said:
  " I think the trouble is the use in the 1962 Act of this rather general expression for those objects '. They are (i) to form, promote and assist companies, (ii) to subscribe for, take, acquire and hold, exchange and sell securities of companies."—[OFFICIAL REPORT, 16th January, 1968; Vol. 756, c. 1641.]
  Mr. Heseltine: I am grateful to the hon. Gentleman. If he had quoted the Section in detail he would have seen that it said
  " as if the holding company were a company engaged in a commercial enterprise.…"
  The hon. Gentleman knows that a commercial enterprise would not behave in this way. If he is saying that we are not entitled to look back and review the 1962 Act, it is extraordinary that he is prepared to follow a Prime Minister who can change his mind every five minutes. We are not allowed to review what every five years we did.
  We have accepted that it is not possible for the T.H.C. to welsh on its offer to the B.E.T., but it does not follow that we should be prepared to allow the company to go on making uncosted and uncalculated offers with money which is to be provided in excess of what it needs. There is no real economic case for buying out the B.E.T. in the first place.
  During the Second Reading debate the Parliamentary Secretary said that the additional borrowing powers were necessary—
  The Temporary Chairman: Perhaps the hon. Member will recall that the Chair would like to hear what he is saying, as well as the rest of the Committee.
  6.0 p.m.
  Mr. Hestline: I apologise, Mr. Godman Irvine.
  The Parliamentary Secretary will remember that during the second Reading
  debate he said that the borrowing powers Bill that we are discussing was an essential prelude to the Transport Bill which is now being dealt with in Standing Committee F. He is quite correct. But he will also know that in Standing Committee F it has been made abundantly plain, first, that there is an alternative to acquisition and, therefore, a change of ownership of the bus company and, secondly, that we believe that it would have been quite possible to achieve the results desired by passenger transport authorities by giving additional powers to the traffic commissioners to carry out the co-ordination about which we have heard so much. In that event, it would not have been necessary for the Transport Holding Company to raise an additional penny piece, let alone an additional £70 million.
  We are now told, in the revelation which was literally dragged by my hon. Friend the Member for Yeovil (Mr. Peyton) from the Parliamentary Secretary, that the Government will print the money to finance this operation. There is no question of its being a commercial take-over in the sense that we understand the Transport Holding Company would like to indulge in. The money is simply to be turned out by the production of yet more Treasury bills.
  It is extraordinary that this Government should go on producing financial tactics of this sort at a time when they are asking so many people to draw in their horns for various reasons. We believe that there was no need to buy out the B.E.T. in the first place. There is no need to buy out more companies in the same field. If the Government are to invest in this way they might do the public the courtesy of making financial investigations before they do so. I have no hesitation in asking my hon. Friends to vote for the Amendment.
  Question put, That the Amendment be made: —
  The Committee divided: Ayes 135, Noes 208.

  Division No. 44.]

  AYES

  [6.3 p.m.

  Allason, James (Hemel Hempstead)

  Biffen, John

  Bruce-Gardyne, J.

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

  Biggs-Davison,John

  Buck, Antony (Colchester)

  Baker, W. H. K

  Bossom, Sir Clive

  Bullus, Sir Eric

  Balniel, Lord

  Boyd-Carpenter, Rt. Hn. John

  Burden, F. A.

  Bell, Ronald

  Boyle, Rt. Hn. Sir Edward

  Campbell, Gordon

  Bennett, Dr. Reginald (Gos. & Fhm)

  Bromley-Davenport, Lt.-Col. Sir Walter

  Carlisle, Mark

  Bessell, Pater

  Brown, Sir Edward (Bath)

  Carr, Rt. Hn. Robert

  Cary, Sir Robert

  Hogg, Rt. Hn. Quintin

  Peel, John

  Channon, H. P. G.

  Holland, Philip

  Percival, Ian

  Clegg, Walter

  Hordern, Peter

  Peyton, John

  Cordle, John

  Howell, David (Guildford)

  Pink, R. Bonner

  Costain, A. P

  Hunt, John

  Pounder, Rafton

  Craddock, Sir Beresford (Spelthorne)

  Hutchison, Michael Clark

  Powell, Rt. Hn. J. Enoch

  Cunningham, Sir Knox

  Iremonger, T. L.

  Prior, J. M. L.

  Currie, G. B H.

  Jennings, J. C. (Burton)

  Ramsden, Rt. Hn. James

  Dalkeith, Earl of

  Johnston, Russell (Inverness)

  Renton, Rt. Hn. Sir David

  Dance, James

  Kershaw, Anthony

  Ridley, Hn. Nicholas

  d'Avigdor-Goldsmid, Sir Henry

  Kimball, Marcus

  Ridsdale, Julian

  Dean, Paul (Somerset, N.)

  Kitson, Timothy

  Rossi, Hugh (Hornsey)

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

  Knight, Mrs. Jill

  Royle, Anthony

  Dodds-Parker, Douglas

  Lane, David

  Russell, Sir Ronald

  Eden, Sir John

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

  Sharples, Richard

  Elliot, Capt. Walter (Carshalton)

  Lubbock, Eric

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

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

  McAdden, Sir Stephen

  Silvester, Frederick

  Emery, Peter

  Maclean, Sir Fitzroy

  Sinclair, Sir George

  Eyre, Reginald

  McMaster, Stanley

  Smith, John

  Fortescue, Tim

  Maginnis, John E.

  Steel, David (Roxburgh)

  Gilmour, Ian (Norfolk, C.)

  Marten, Neil

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

  Glover, Sir Douglas

  Mawby, Ray

  Summers, Sir Spencer

  Glyn, Sir Richard

  Maxwell-Hyslop, R. J

  Teeling, Sir William

  Goodhart, Philip

  Mills, Peter (Torrington)

  Thorpe, Rt. Hn. Jeremy

  Goodhew, Victor

  Montgomery, Fergus

  Turton, Rt. Hn. R. H.

  Gower, Raymond

  More, Jasper

  Vaughan-Morgan, Rt. Hn. Sir John

  Grant, Anthony

  Morgan, Geraint (Denbigh)

  Vickers, Dame Joan

  Gresham Cooke, R.

  Mott-Radclyffe, Sir Charles

  Walker, Peter (Worcester)

  Grieve, Percy

  Munro-Lucas-Tooth, Sir Hugh

  Walker-Smith, Rt. Hn. Sir Derek

  Griffiths, Eldon (Bury St. Edmunds)

  Nabarro, Sir Gerald

  Walters, Dennis

  Gurden, Harold

  Nicholls, Sir Harmar

  Webster, David

  Harris, Frederic (Croydon, N.W.)

  Noble, Rt. Hn. Michael

  Whitelaw, Rt. Hn. William

  Harrison, Brian (Maldon)

  Nott, John

  Wills, Sir Gerald (Bridgwater)

  Harvey, Sir Arthur Vere

  Onslow, Cranley Wilson,

  Geoffrey (Truro)

  Hastings, Stephen

  Osborn, John (Hallam)

  Wood, Rt. Hn. Richard

  Heald, Rt. Hn. Sir Lionel

  Page, Graham (Crosby)

  Worsley, Marcus

  Heseltine, Michael

  Page, John (Harrow, w.)

  Higgins, Terence L

  Pardoe, John

  TELLERS FOR THE AYES:

  Hill, J. E. B.

  Pearson, Sir Frank (Clitheroe)

  Mr. Bernard Weatherill and

  Mr. Hector Monro.

  NOES

  Albu, Austen

  Davidson, Arthur (Accrington)

  Harper, Joseph

  Allaun, Frank (Salford, E.)

  Davies, Dr. Ernest (Stretford)

  Harrison, Walter (Wakefield)

  Allen, Scholefield

  Davies, G. Elfed (Rhondda, E.)

  Hart, Mrs. Judith

  Armstrong, Ernest

  Davies, Harold (Leek)

  Hattersley, Roy

  Atkins, Ronald (Preston, N.)

  de Frietas, Rt. Hn. Sir Geoffrey

  Heffer, Eric S.

  Atkinson, Norman (Tottenham)

  Delargy, Hugh

  Henig, Stanley

  Bagier, Gordon A. T

  Dell, Edmund

  Herbison, Rt. Hn. Margaret

  Barnett, Joel

  Dempsey, James

  Hooley, Frank

  Baxter, William

  Dewar, Donald

  Howarth, Harry (Wellingborough)

  Beaney, Alan

  Dickens, James

  Howarth, Robert (Bolton, E.)

  Benn, Rt. Hn. Anthony Wedgwood

  Dobson, Ray

  Howell, Denis (Small Heath)

  Bidwell, Sydney

  Doig, Peter

  Hoy, James

  Bishop, E. S

  Dunn, James A

  Hughes, Emrys (Ayrshire, S.)

  Blackburn, F

  Dunnett, Jack

  Hynd, John

  Blenkinsop, Arthur

  Dunwoody, Mrs. Gwyneth (Exeter)

  Irvine, Sir Arthur

  Boardman, H

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

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

  Booth, Albert

  Edelman, Maurice

  Jeger, George (Goole)

  Boyden, James

  Edwards, Rt. Hn. Ness (Caerphilly)

  Jenkins, Rt. Hn. Roy (Stechford)

  Braddock, Mrs. E. M

  Edwards, Robert (Bilston)

  Johnson, Carol (Lewisham, S.)

  Bray. Dr. Jeremy

  Ellis, John

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

  Brooks, Edwin

  English, Michael

  Jones, Dan (Burnley)

  Broughton, Dr. A. D. D.

  Ensor, David

  Jones, T. Alec (Rhondda, West)

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

  Evans, Albert (Islington, S.W.)

  Judd, Frank

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

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

  Kelley, Richard

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

  Faulds, Andrew

  Kenyon, Clifford

  Buchan, Norman

  Fernyhough, E

  Kerr, Russell (Feltham)

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

  Fletcher, Raymond (Ilkeston)

  Lawson, George

  Butler, Mrs. Joyce (Wood Green)

  Fletcher, Ted (Darlington)

  Lee, Rt. Hn. Frederick (Newton)

  Callaghan, Rt. Hn. James

  Foot, Michael (Ebbw Vale)

  Lee, Rt. Hn. Jennie (Cannock)

  Carmichael, Neil

  Fowler, Gerry

  Lee, John (Reading)

  Carter-Jones, Lewis

  Fraser, John (Norwood)

  Lestor, Miss Joan

  Castle, Rt. Hn. Barbara

  Gardner, Tony

  Lewis, Arthur (W. Ham, N.)

  Chapman, Donald

  Garrett, W. E

  Lewis, Ron (Carlisle)

  Coe, Denis

  Ginsburg, David

  Lipton, Marcus

  Coleman, Donald

  Greenwood, Rt. Hn. Anthony

  Loughlin, Charles

  Concannon, J. D

  Gregory, Arnold

  Lyons, Edward (Bradford, E.)

  Conlan, Bernard

  Grey, Charles (Durham)

  Mabon, Dr. J. Dickson

  Crawshaw, Richard

  Griffiths, David (Rother Valley)

  McBride, Neil

  Cullen, Mrs. Alice

  Hamilton, James (Bothwell)

  McCann, John

  Dalyell, Tarn

  Hamling, William

  MacColl, James

  Daring, Rt. Hon. George

  Hannan, William

  MacDermot, Niall

  1000

  1001

  McGuire, Michael

  Oram, Albert E

  Silkin, Rt. Hn. John (Deptford)

  Mackenzie, Gregor (Rutherglen)

  Orbach, Maurice

  Silverman, Julius (Aston)

  Mackie, John

  Orme, Stanley

  Skeffington, Arthur

  Mackintosh, John P

  Oswald, Thomas

  Slater, Joseph

  Maclennan, Robert

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

  Spriggs, Leslie

  McNamara, J. Kevin

  Owen, Will (Morpeth)

  Stonehouse, John

  MacPherson, Malcolm

  Paget, R. T

  Swingler, Stephen

  Mahon, Peter (Preston, S.)

  Pannell, Rt. Hn. Charles

  Thornton, Ernest

  Mallalieu, E. L. (Brigg)

  Parkyn, Brian (Bedford)

  Tinn, James

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

  Pavitt, Laurence

  Urwin, T. W.

  Manuel, Archie

  Pearson, Arthur (Pontypridd)

  Wainwright, Edwin (Dearne Valley)

  Mapp, Charles

  Pentland, Norman

  Walden, Brian (All Saints)

  Marks, Kenneth

  Perry, Ernest G. (Battersea, S.)

  Walker, Harold (Doncaster)

  Mellish, Robert

  Perry, George H. (Nottingham, S.)

  Wallace, George

  Millan, Bruce

  Price, Thomas (Westhoughton)

  Watkins, David (Consett)

  Milne, Edward (Blyth)

  Probert, Arthur

  Wellbeloved, James

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

  Randall, Harry

  Wells, William (Walsall, N.)

  Moonman, Eric

  Rankin, John

  Whitaker, Ben

  Morris, Alfred (Wythenshawe)

  Rees, Merlyn

  Wilkins, W. A.

  Morris, Charles R. (Openshaw)

  Reynolds, G. W

  Williams, Alan Lee (Hornchurch)

  Morris, John (Aberavon)

  Richard, Ivor

  Williams, W. T. (Warrington)

  Moyle, Roland

  Roberts, Gwilym (Bedfordshire, S.)

  Willis, George (Edinburgh, E.)

  Murray, Albert

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

  Wilson. William (Coventry, S.)

  Neal, Harold

  Rodgers, William (Stockton)

  Woof, Robert

  Newens, Stan

  Roebuck, Roy

  Yates, Victor

  Noel-Baker, Francis (Swindon)

  Ross, Rt. Hn. William

  Norwood, Christopher

  Rowlands, E, (Cardiff, N.)

  TELLERS FOR THE NOES:

  Oakes, Gordon

  Shaw, Arnold (Ilford, S.)

  Mr. Eric G. Varley and

  Ogden, Eric

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

  Mr. Alan Fitch.

  O'Malley, Brian

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

  The Deputy Chairman (Mr. Sydney Irving): We now come to Amendment No. 2, with which may be taken Amendment No. 3, in page 1, line 1, at end insert:
  Provided that no part of the additional borrowing provided in this Act shall be used until the Transport Holding Company shall have disposed of its interests in the following corn panics (and their subsidiaries):

  Thomas Cook and Sons Ltd.

  Thomas Cook and Son (Bankers) Ltd

  British Holding Estates Ltd.

  Dean and Dawson Ltd.

  England and Parrotts Ltd.

  and Amendment No. 9, the new Schedule:
  SPECIFIED ASSETS

  Bristol Commercial Vehicles

  Eastern Coach Works Ltd

  Park Royal Vehicles Ltd.

  Mr. Heseltine: On a point of order. Are we to have a vote on Amendment No. 4, Mr. Irving?
  The Deputy Chairman: Yes, the Chairman selected No. 4 for a Division, but it is the practice in Committee of the whole House to have the Division as the Amendment comes up in its order on the Paper.
  Mr. Heseltine: I beg to move Amendment No. 2, in page 1, line 11, at end insert:
  'but no part of this further borrowing shall be used until the Transport Holding Company shall have disposed of its interests in the assets listed in the Schedule (Specified assets) to this Act '.
  The purpose of this Amendment, and of Nos. 3 and 9 which we are discussing with it, is to put before the Committee an
  1002
  alternative method of helping to finance the money required for the acquisition of B.E.T. buses. The Holding Company is to be wound up in about a year, and, in its present ownership, are two specific groups of assets, which could be returned to private ownership with the minimum of difficulty and which could raise substantial sums towards the acquisition of B.E.T.
  6.15 p.m.
  I should describe how these groups of assets came into public ownership. In both cases this was almost incidental and irrelevant to any main decision of Government policy. First, the State ownership of Thomas Cook and Sons Limited dates from a period in the last war. Thomas Cook was owned by the Wagon-Lits Company, the headquarters of which is in Brussels and was occupied by the Germans during the war. As a result, the assets of Thomas Cook were transferred to the Custodian of Enemy Property in the United Kingdom and Mr. Churchill introduced a Bill to transfer the ownership of Thomas Cook's subsidiaries to the four existing railway companies
  Those companies were sold 25 per cent. of the equity in Thomas Cook and its subsidiaries for £1 each. At the end of the war, the companies compensated Wagon-Lits out of the resources of Thomas Cook and agreed to give back to Wagon-Lits 25 per cent. of the overseas activities of Thomas Cook. That

  1003
  was the partnership which was set up after the war and which came under the nationalisation of the railways in 1947.
  Dean and Dawson, the second travel and tourist subsidiary of the Transport Holding Company was a subsidiary of the old London and North-Eastern Railway. It also came into State ownership when the railways were nationalised. British Holding Estates was owned 50 per cent. by Thomas Cook and 50 per cent. by the London, Midland and Scottish Railway and it was intended before the war to establish a chain of holiday camps throughout the country although, because of the war, only one, at Prestatyn, was established. The other company listed as a subsidiary of Thomas Cook is England and Parrotts Limited, which is a freight company but is listed within the travel and tourist groupings of the Transport Holding Company.
  Thus, the picture is clear. There was no Government decision to have State intervention in travel and tourism. At no stage was this a political controversy: it was an accident that these companies became State-owned.
  Then, we move to the companies listed in the new Schedule to the Act, which are the manufacturing companies of the bus interests. There are three—Bristol Commercial Vehicles, Eastern Coach Works Limited, and Park Royal Vehicles Limited. The same accident of fate affected them, although in a different way. Bristol Commercial Vehicles and Eastern Coach Works were wholly-owned subsidiaries of the Tillings group of companies. The Government decided to nationalise the Tillings companies as a result of a deliberate act of policy, but the Government never had any interest in taking over the manufacturing of bus companies, so the fact that the State is involved in manufacturing buses is incidental to the State's decision to move into the ownership of buses in 1947.
  Park Royal Vehicles comes into the picture in 1965. In the 1962 Transport Act, the manufacturing companies within the bus operations of the Transport Holding Company were not allowed to manufacture except for the boards set up under the 1962 Act and for wholly-owned subsidiaries of nationalised companies. In other words, they were allowed to manufacture only "within the family".
  1004
  The present Government decided in 1965 to extend the manufacture and sale of buses into a wider sector and, therefore, did a deal with Leyland Motors, whereby the latter took 25 per cent. of the equity in Bristol Commercial Vehicles and Eastern Coach Works in return for the Transport Holding Company receiving 29 per cent. of Park Royal Vehicles, a coach building subsidiary of Leyland Motors. That is how that third group came within the general ownership of the State.
  We have now reached the stage at which the Transport Holding Company wishes to extend its ownership of the operating companies in the bus industry, and, of course, we are discussing whether it should be enabled to borrow—or rather, as we have discovered it to be, print—substantial extra sums to extend that ownership. We have passed the relevant Amendment and know it will have those powers, but the purpose of these Amendments is to make and dispose of the assets before it takes advantage of any of those additional borrowing facilities.
  There seem two overwhelming reasons why the T.H.C. should be encouraged—indeed, by this Amendment, made—to take this step.
  First, all hon. Members and the country are aware that this is a moment of immense financial restraint in which many schemes which are urgent in the eyes of industrialists and many personal plans by citizens have had to be shelved as a result of the Government's deliberate decisions to clamp down on the economy. At such a time it seems a reasonable suggestion that the Transport Holding Company should he subjected to precisely the same financial constraints as those which many of us have had to bear and that they should be prepared to sell off assets for which they have no need. There is no case for the State holding those assets.
  Mr. J. T. Price: This is an historical note about how these companies came to be within the Transport Holding Company and part of the nationalised industry. It is not accurate in detail, but I will leave that aside. Does not the hon. Member understand that the holding company was set up by the Conservative Party by means of the Transport Act, 1957? I served on that Standing

  1005
  Committee for three months. That decision has never been challenged. The holding company included Thomas Cook & Sons Ltd., Dean and Dawson and the other companies which have been mentioned. They were taken over by agreement with the Government in office. The right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) was Minister of Transport at the time. The present argument is going far beyond anything ever put to us at that time.
  Mr. Heseltine: I apologise if I have one or two details wrong. In fact, the Transport Holding Company was set up by the 1962 Act. It is an interesting argument by hon. Members opposite that we on this side of the Committee should for ever be committed to a precedent set by a Government elected at the time from members of the Conservative Party while hon. Members opposite are prepared to troop into the Lobby for any change of policy which, at a drop of the hat, commends itself to their Government.
  Because one set of policies seemed expedient in 1962, we cannot be tied to those policies for ever. We wish to re-examine the situation. The need for a re-examination of the policy is brought about by the financial situation into which hon. Members opposite have got the country. We believe that the Transport Holding Company, too, ought to suffer the restraints placed on the rest of us by the economic situation and ought to be compelled to dispose of these assets, as I am suggesting.
  There is no case at all for the State to be involved in the provision of travel agencies, credit card facilities or any of the other numerous services offered by Thomas Cook and their subsidiaries. We on this side of the Committee—the hon. Member may call is doctrinaire if he wishes, and I do not run away from that charge—want to see such companies owned in the private sector unless there is an overwhelming and unanswerable economic case why they should be in the public sector. I ask the Minister of State, in his reply, to explain the economic and commercial case for the State ownership of Thomas Cook and the other companies which we are discussing.
  I hope. too, that the Minister of State will tell us about the detail of the opera-
  1006
  tions of Thomas Cook. We have available to us the annual report of the Transport Holding Company, and anyone reading it must come to the conclusion that the information about Thomas Cook is not overwhelming in detail or complexity. We ask the hon. Member to go much further in explaining to us how well the company has done in the years of State ownership. We should like an up-to-date asset valuation. Perhaps the Minister of State will make a special point of dealing with that. What is the up-to-date commercial valuation of the freehold properties owned by Thomas Cook and its various subsidiaries? Will he give us a breakdown of the profits arising from various sections of the activity? We do not even know the turnover figures. Will he be good enough to give us the turnover figures from the various activities?
  The Minister of State may say that it is not normal for such companies to publish that information in detail. I refer him to page 84 of the 1966 Report of the Transport Holding Company, which has the sub-divisions of road haulage, road passenger services and travel and tourist facilities. In the first two sub-divisions, it gives immense detail. Under the road haulage companies we are told the gross receipts and profits, as well as vehicle miles, staff employed and traffic vehicles owned. Under road passenger transport we read about passenger miles, vehicle miles, staff employed and the number of traffic vehicles. But under the travel and tourist subsidiaries all we are told is the profits before taxation. That enables us to make no assessment of the activities of that company. So that the Committee may make an informed decision whether this undertaking should be sold back to private enterprise, will the Minister give us the necessary figures?
  The Minister may well say that he does not have that information and cannot answer the questions. Under Section 29(14) of the 1962 Act it is made clear that the Minister is entitled to that information. If he does not possess it, the Committee is entitled to know why he has never sought to obtain it. The Act provides that
  " The Holding Company shall furnish the Minister with such returns, accounts and other information with respect to their property and

  1007
  activities, and the property and activities any company which is their subsidiary, as may from time to time require."
  Let him not therefore, reply that the information is not available to the Minister. He is entitled to it and there is a statute to back his request for it.
  The Minister may say that because this is a complex and world-wide industry there are occasions on which it is not easy for it to do as well as might be expected and that on this occasion he does not want to give the figures. But we have no doubt that this company operates in a field which is immensely successful and profitable.
  The Deputy Chairman: Order. Will the hon. Member please address the Chair?
  Mr. Heseltine: I am sorry, Mr. Irving.
  May I quote the 1966 accounts of the American Express Company? The Report of the Board of Directors to the shareholders states:
  "In 1966, for the nineteenth consecutive year, consolidated earnings of American Express and its subsidiaries set new record highs ".
  That is not a bad record for a company operating in tourism and travel. The American Express Company provides the most detailed accounts of the various activities in which it indulges.
  According to the 1966 figures, the profit for the Thomas Cook travel and tourist subsidiary was £1·7 million. The year before that it was £2·1 million. Will the Minister give us the figures for 1967? I know that he will say that the accounts for the Transport Holding Company have not yet been published, and it is a fact that it is only five weeks since the end of 1967. But that will not be acceptable as an excuse, because the accounts for the Thomas Cook subsidiary run to the end of October, so that it is three-and-a-half months since the end of their last financial year. We are entitled to ask what is the trend of profitability. In 1965, the profit was £2·1 million and in 1966 is was £1·7 million. The Minister should give us an indication of which way it was moving in the year ended 31st October, 1967. An indication would be satisfactory for our purposes at this stage.
  1008
  May we move to the manufacturing companies in the bus companies? These, too, are profitable In 1965 the three companies with which I am concerned made £332,000. In 1966 they made £226,000. We do not have the figures after that and it would be interesting to know them. I should also like the underlying asset figures involved in those companies.
  6.30 p.m.
  I think that the Minister will be prepared to accept that in suggesting that manufacturing bus companies should be sold off to specialists in that sphere, we have some sympathy with him because he is the person whose report into London Transport's manufacturing of buses recommended that London Transport should not go on manufacturing those vehicles. I appreciate that that report has not been published. Perhaps the hon. Gentleman will confirm that that document, which was presented to the Ministry of Transport, recommended that London Transport should not go on manufacturing buses and that that is in accord with what I am saying.
  One of the problems involved in the manufacture of buses is that it is an immensely capital intensive operation which requires large international markets. It is, therefore, difficult for relatively small companies, such as those mentioned in the Amendment, to compete in this sphere. There is, therefore, a case for integrating them into much larger units. Indeed, the case is proved by the decision to do a deal with Leylands. Reading the Transport Holding Company's report, it is apparent that the Leyland deal was done to give to those companies the additional services which they could not afford.
  It is in this context that I can best answer the question raised by the hon. Member for South Ayrshire (Mr. Manuel). Times have changed since all this took place way back in the 'forties. The Transport Holding Company was set up in 1962. In the meantime, there has been great rationalisation in the motor industry. It therefore seems reasonable to say that this rationalisation should be continued in respect of these three companies involved in the body and chassis-building sections of the bus industry. These companies should be returned to private ownership.
  Sir Harmar Nicholls: Is my hon. Friend as disturbed as I am at the fact that the Minister of State has again put away his pen? My hon. Friend is asking a number of pertinent questions which should be answered. Some of us who have held Ministerial posts know only too well that one cannot rely on one's memory to remember questions of this type. The Minister should be making notes so that the Committee is given the fullest information.
  Mr. Heseltine: I am grateful to my hon. Friend for that intervention. The Minister of State has never been the most forthcoming of Ministers in his answers. He has a lot to say in advocating cases but not much to say when justifying them, particularly under pressure. He can rest assured that we will press him, as we are in Standing Committee F, to try to get the answers to these questions, or at least to discover that the answers do not exist.
  There is another substantial reason why these two groups of companies should be returned to private interprise. The financial disciplines applying to the Transport Holding Company are now to be changed. In 1962, when the Holding Company was established, there were clear directives, and it was told
  "… to hold and manage the securities vested in them by virtue of this Act…. as if the Holding Company were engaged in a commercial enterprise…"
  Although that discipline existed in the 1962 Act, in the Transport Bill which is now before Standing Committee F a new set of financial disciplines is being imposed, at least on the bus company. I want to know which set of financial disciplines the Government intend to apply to the travel and tourist industries because it is not clear—this is not mentioned in the Transport Bill—what disciplines will apply there. But the manufacturing companies of the national bus group, as it will be constituted, are to be given clearly different and contrary financial disciplines to those imposed by the 1962 Act. The 1968 Transport Bill says:
  " It shall be the duty of each of the authorities to whom this section applies so to perform their functions under the Act of 1962 or this Act as to secure that the combined revenues of the authority and of their subsidiaries taken together are not less than sufficient to meet their combined charges properly chargeable to revenue account, taking one year with another."
  1010
  This is a totally different sort of financial provision from that in the 1962 Act. We are, therefore, in a situation—certainly for the bus manufacturing companies—in which they will be allowed to operate on a break-even basis, despite the fact that, after the deal with Leylands, Leylands are entitled to expect them to run on a commercial basis; and on that basis the company agreed to change its shares for those of the Park Royal Company.
  I hope that the Minister will comment on the competitive position of the Bristol and Eastern Companies in relation to the competition that they will have with Leyland Motors which is, after all, an extremely competitive and profitable organisation and which is operating and manufacturing buses in its own right. Will it now compete with a manufacturing company which is charged only to break even?
  We seem to have reached the stage when the Government should take account of a new mood which is sweeping through Britain. We have heard from hon. Gentlemen opposite their passionate conviction in favour of the increasing encroachment of the State. The activities of the Minister of Transport, playing a sort of wild game of monopoly with paper money, must be seen to be believed. There is an awareness in the country, even if it has not percolated through to the benches opposite, that people want a greater sense of responsibility in the community and want increasing incentives in their jobs and an expansion of their opportunities to own shares and assets in those activities.
  This is precisely what the Amendment is designed to do. It is appalling that no attempt has been made to justify the financial disciplines which exist or to cost the proposals. We are, therefore, saying that, in the spirit of Britain today, it would be incomparably better to return these activities to private enterprise, where we know that sanctions exist, rather than to leave them to the maw of the Ministry of Transport with its doctrinaire and uncosted proposals.
  Mr. J. T. Price: In his interesting and vigorous speech, the hon. Member for Tavistock (Mr. Heseltine) raised some ideological notions which have been debated many times in Parliament. Had he not made such a vigorous speech I would

  1011
  not have been tempted to intervene. I do so—
  Sir Harmar Nicholls: May I intervene?
  Mr. Price: and without interruption from the hon. Member for Peterborough (Sir Harmar Nicholls)—because it is obvious from the remarks of the hon. Member for Tavistock that hon. Gentlemen opposite are sufficiently aware of the finances of the five companies in question to want to denationalise them. We have Thomas Cook and Sons Ltd. along with Thomas Cook and Son (Bankers) Ltd. We also have British Holding Estates Ltd., Dean and Dawson Ltd., and England and Parrotts Ltd. I have sufficient good faith and charity to know that the Conservative Central Office does not send Front Bench spokesmen here to agitate for the denationalisation of something that is losing money. I sometimes wish that it did. The Conservative Central Office never agitates for the denationalising of, say, the coal mines or the rolling stock of the railways, a sector which has given us many headaches because it is losing a great deal of public money.
  The hon. Member for Tavistock has naively put forward the suggestion that we should sit silent, unconscious of our responsibility to the public interest, while hon. Gentlemen opposite get away with denationalising the profitable section. They are always challenging us on this issue. Nevertheless, we are good democrats—[Interruption.] I speak for myself, if for no one else. I have always done so, as every senior Member knows.
  We are always being told that the railways are losing a lot of money because of had management and so on—we all know that line of country. I sometimes wish that academic people on both sides would take the trouble to get to know how industry works, without just coming here with ideological notions—and that remark goes for some of my colleagues as well as for hon. Members opposite.
  Mr. A. P. Costain: I have listened with much interest to the hon. Gentleman. If we do come along with proposals for the denationalisation of things that we know are losing money, will he support us?
  Mr. Price: I am not in a position to answer until I know what the proposition is. I never buy a pig in a poke, even from my own Ministers: they have to prove the case, first.
  The Tory Central Office obviously knows that these are the profitable sections. If we are being criticised for running the railways at a loss, surely we cannot agree to running only the unprofitable sections. In years gone by, when the Conservative Party was in full control for 13 years—and I was in Opposition all that time—no such preposterious proposal as this Conservative Amendment was then made.
  Mr. Manuel: My hon. Friend is making a very interesting point. A little earlier, we had the hon. Member for Harrow, West (Mr. John Page) putting forward the plea that we should nationalise some of the more profitable parts in order that we could show a profit for nationalisation.
  Mr. Price: That confirms what I am saying. I quite prepared for hon. Members to draw their own conclusions. I am not trying to ram anything down their throats—[Interruption] I could not ram anything down the throat of the hon. Member for Peterborough—I know him too well, and I would not try to do it—but I say to him and to the hon. Member for Tavistock who has just delivered a very vigorous oration that he little understands that when he is charging the Government with the task of denationalising the profitable sections he is also paying the Government a compliment, because if hon. Members opposite claim the right to criticise the Government for having nationalised and incurred a loss, they must also give the Government credit when a profit is shown.
  We have had instanced again tonight the great firm of Leylands, one of the most efficient sections of industry and run by private enterprise under ordinary company law. I have always paid my respects to that company as a highly efficient and well organised concern. It has done marvellous export work, and we want it to continue to do so. What is being said from the other side of the Chamber is that this great firm, with its expertise and its high-powered executives—men of action, and of great industrial experience—did not know what it was

  1013
  doing when it made an agreement with the Government to have some sort of share in this firm of England and Parrotts. That is the implication—
  Mr. Heseltine: I do not think that I ever said that Leylands did not know what it was doing, but the hon. Member must be aware that what may be in the interests of Leylands may not be in the interests of the ratepayer or the British public.
  Mr. Price: One must draw one's own conclusions. Leylands generally knows what it is doing, and one must presume that, if it enters into some consortium arrangement with the Government, it knows what it is doing.
  Anyone setting up here as a politician and making polemical speeches must take a knock on matters of principle. The principle here is that in Britain, as in almost every other advanced country with a mixed economy, partly private sector and partly Government controlled, the two halves are gradually being dovetailed as industry becomes more and more rationalised. I believe that to be inevitable—[Interruption] I am broadminded—not narrow minded or ideological. I face the facts of life as I see them. I believe that it is inevitable that there will be a greater and greater move to this sort of integration where common interests can be pursued with greater efficiency than they can be by a ruthless and senseless competition. That is what is happening throughout the world.
  Things are done rather differently in Italy. I have taken the liberty on several occasions to refer to the Italian model of nationalisation. The Italians do not finance their nationalised industries with capital from national loans, shown below the line in the Budget, as we do. They proceed under Italian company law, and they have far more nationalisation there than we have. They work indirectly by making company law apply to the profitability and efficiency of companies, and I wish that there was a greater appreciation on both sides, regardless of this ideological polemical bunkum that this is the way the world is now moving. If we realise that, we shall not let down anyone whom we represent.
  I do not think that there is the slightest possibility of my hon. Friend giving way on this Amendment—it would be an
  1014
  obvious nonsense for him to do so. I hope that he digs his heels in and, perhaps, reinforces in different language what I have said.
  6.45 p.m.
  Mr. John Biffen: The hon. Member for Westhoughton (Mr. J. T. Price) said that he is a good listener. I accept that he is a better democrat than listener, because I thought that the arguments advanced by my hon. Friend the Member for Tavistock (Mr. Michael Heseltine) were not only aggressive and well argued but were moderate in content.
  It is a sign of the nervousness of hon. Members opposite on this issue that whenever one challenges the existing frontiers between private and public ownership—which is truly what the Amendment seeks to do—one is immediately accused of being theological or doctrinaire, as though some principle about the nature of the ownership of industry is not what political debate is all about. I believe it to be what political debate is about, and I am sure that the hon. Member for Reading (Mr. John Lee) holds that view very strongly.
  Therefore, when we bring our minds to bear on an issue, it is only a question of whether or not we discuss it in total irrelevance to the facts. Whatever could be said of my hon. Friend's speech, it was not argued in total irrelevance to the facts. It was argued closely in relation to the historical sequence whereby these companies came to be owned by the State and, in as much as he was allowed to do so, it was related to their current economic performance. Nothing could be more consistent with the best traditions of principle and none the less undogmatic debate than that.
  My hon. Friend is quite right to draw attention to the dangers of Socialism by accident, not least because in that way the Tory Party has contributed its own share to the collectivist State, often quite unconsciously. This evening we have the chance to do something we were unable to do in the past.
  The hon. Member for Westhoughton referred to a Standing Committee which was the very first on which I sat. I had only just come to the House. On that Committee I learned to be a very good listener. I sat throughout the entire Committee stage and never once opened my

  1015
  mouth—[Interruption.] And who is to say who are the beneficiaries or otherwise of my Saul-like conversion?
  I want to add only one or two small points to my hon. Friend's case, but I believe that this debate will lose nothing from our having short sharp speeches and then a vote.
  One of the two points I wish to make concerns the principle of divesting which is implicit in this Amendment, and the other the capital requirement of certain types of industry, in so far as that touches on the general problem of what we should seek to be in the public sector and what should be in the private sector. Hardly a week goes by when we do not read of the divesting activities of one company or another. Very often these are activities which are actively encouraged and welcomed by the Government. I give two examples within the reasonably recent past to refresh the memory of the Committee on this point. A couple of years ago or more B.S.A. sold its machine tool interests to Herberts. More recently, in the last ten days, Tube Investments sold its steel-making equipment subsidiary Loewy-Robertson to Davy Ashmore.
  In passing, I say to the hon. Member for Westhoughton that it is not just a question of the only asset which one can sell being a profit-making asset. The T.I. disposal of its steel-making equipment interests is a case in point. It was selling a loss-making asset which presumably the purchasers thought they could use more effectively. It is not a fair criticism to say that the only time when one considers divesting an asset, as we seek to do by this Amendment, is when that asset is profitable, but it happens sometimes. It is more likely than not that these assets are profitable.
  That leads to the second point, the nature of the assets to be disposed of under this Amendment to the private sector. A great deal of argument has been put forward in the House, particularly with the change in scale of technology, that there are certain areas of the economy where the capital demand is so vast and where the rate of return is over such a remotely future period that this is an area which cannot be trusted to the private sector.
  1016
  This is the argument which was summarised, I suppose, by the Prime Minister in his argument that Socialism had the case made for it by the advance of science even if it had not existed before—what he called the technological revolution. This is the argument which says that industry must be brought under Socialism because of electronics, data processing and the like. This evening we are discussing an asset which cannot under any circumstances be said to demand such a vast capital sum that the private sector would be unable to provide it.
  Therefore, if anyone thought to reallocate the frontiers between the public sector and the private sector, starting from as unprejudiced a premise as his political instincts permitted him, it seems inconceivable that we would wish to put travel agencies into the public sector. But we know that all the evidence of this Government in action tells us that there are vast areas in which they are determined that financing shall proceed on a public sector basis. Therefore, in order to justify their case, they have to demonstrate that there is an overwhelming reason why one cannot make the adjustment in this particular instance in any other way.
  Quite clearly, the most casual acquaintance with the workings of the stock market and the present ability of any good class share to command considerable support, even the most superficial acquaintance with those circumstances, must lead one to be quite confident that there would be no difficulty whatever in selling the category of shares indicated in this Amendment, because the capital involved is of such a modest dimension that it could not conceivably frighten off the private sector.
  Although this debate has proceeded with a certain amount of ideological fervour, I do not think it suffers any the less because it is so argued. Undoubtedly there comes a time when by accident, and particularly during wartime, decisions are taken when they have not been properly debated. I think it undoubtedly true that this evening much of the argument must proceed against the background of national stringency and the national economic situation. Nevertheless, I hope that when we go through the Division

  1017
  Lobbies it will be with a cool, calculated determination that we have identified an area of public sector financing which we believe rightly belongs to free enterprise.
  Mr. Edward Milne: I do not want to follow the speech of the hon. Member for Oswestry (Mr. Biffen) too closely, although I listened to what the hon. Member said with a great deal of attention and I think some attention has to be paid to his argument about the frontiers of public and private enterprise. In the context of this Amendment I feel certain that my hon. Friend the Minister of State will resist the claims put forward and will proceed with the Bill as originally intended.
  We have seen over a wide sector of the economy vast sums of public money used for private purposes with very little complaint. That is why I was surprised when the hon. Member for Tavistock (Mr. Michael Heseltine) moved into the realm of the travel agency. We ought to look very carefully indeed at this aspect. It was described by one hon. Member opposite as "nationalisation by accident". Accident or not, the figures which the hon. Member gave of profits of the company mentioned in the Amendment were reasonably adequate. I hope that in the operation of this Bill and in its later stages my right hon. Friend will look not only at the question of retaining the company in public ownership, but also of examining its activities so that it becomes even more profitable.
  When we look at the question of the operation of the public sector in this regard we see that it has a record of achievement which has eclipsed many of its supposedly more efficient rivals. [An HON. MEMBER: "How do you know?"] If the hon. Member who remains seated while making interjections wants an answer, I will answer him on that point. The reason I know is the figures which the hon. Member for Tavistock quoted about the profits made by Thomas Cook over the last two years. On the basis of the figures the hon. Member used as a foundation for his case, one can demonstrate that in those two years over £3 million profits were made by this company. I concede at least at this stage that we are asking that the increase should be extended in the years ahead because of the public investment in this sector.
  Mr. Ridley: How on earth does the hon. Gentleman come to the conclusion that the results are good simply by taking a profit figure, when he has no idea of the turnover, of capital employed, of past losses or profits, or of any other details? The hon. Gentleman must be the most gullible Member in the House. I would advise him not to get involved in any financial transactions if he takes profits as the sole criterion.
  7.0 p.m.
  Mr. Milne: I would not yield second place to the hon. Gentleman in gullibility. He asks me how we know in relation to Thomas Cook & Sons Ltd. All the figures are not available at the moment. Hon. Members opposite have always used the yardstick of profitability to measure the success or failure of the public sector. We therefore ask that this matter be examined in the light of improving this position, of adding and expanding to it. The rate of profit for travel agencies is very small. At least, that is what the firms in the private sector have argued repeatedly. Hon. Members opposite, who claim a good deal of foresight in the business world, would not have allowed Thomas Cook & Sons Ltd. to remain in the public sector in 1962 had they realised the tremendous strides that this sector of the economy would make in the years following 1962. The Amendment should be rejected. I ask my right hon. Friend the Minister to ensure, not only that the company is retained within the purview of the Bill but that steps are taken to ensure that it expands its activities.
  Mr. Geoffrey Wilson: The hon. Member for Westhoughton (Mr. J. T. Price) said that he served on the Standing Committee which considered the 1962 Bill. I attended every meeting of that Standing Committee. My hon. Friend the Member for Tavistock (Mr. Michael Heseltine) quoted Section 29(6) of the 1962 Act, which provides that it shall be the duty of the Holding Company so to conduct its business as if it were engaged in a commercial enterprise. However, my hon. Friend did not go on to the next sentence, which provides that one of the duties of the Holding Company shall be to
  "sell securities…and generally to carry on any business usually carried on by a holding company".

  1019
  The Conservative Government of the day left it to the Holding Company to act in a commercial manner, and if it wished, to sell Thomas Cook & Sons Ltd. or any other body which it had in its charge.
  The point which I think that hon. Members opposite have missed is that the situation has considerably changed since 1962. Today we are being asked to agree to an increase in the borrowing powers of the holding company to enable it to acquire the remaining shares in the bus companies of which it already holds a substantial proportion. To do this, it has been necessary to ask Parliament for increased borrowing powers.
  We contend that before the holding company is given increased powers it should dispose of assets which are not essential to its business and use part of the money deriving from the sale of those assets to finance the purchase of the bus companies.
  If an hon. Member opposite said to his bank manager, "I own a leasehold house in circumstances to which leasehold enfranchisement does not apply. I want a large overdraft to purchase the freehold. I hold a large amount of securities which are nothing to do with my business. I do not want to sell those securities, because they are profitable. Will you lend me the money instead?", the bank manager would in present circumstances say, "It is contrary to Government policy to encourage private lending for personal reasons. You had better sell your securities". The holding Company is in exactly the same position.
  Mr. J. T. Price: The hon. Gentleman has asked a rhetorical question. If in certain circumstances I asked my bank manager for an overdraft, he would give me certain advice. Let us suppose that I put the question in another way. If I said to my bank manager, "I have a considerable number of shares in Thomas Cook and Sons Ltd. I also have a considerable number of shares in Fire, Auto and Marine Insurance Co., now in liquidation, I propose to sell the shares which I hold in Fire, Auto and Marine", my bank manager would say that I was crackers. This is what the hon. Gentleman is asking me, a supporter of the Government, to do.
  Mr. Wilson: No. We have heard that Thomas Cook & Sons Ltd. came entirely by accident into the hands of the railways. As long ago as 1929 Wagon Lits bought up Thomas Cook. It was quite a surprise for people during the war to learn that Thomas Cook & Sons Ltd. was in the hands of the Custodian of Enemy Property. It was because Thomas Cook and Sons Ltd. was in those hands, simply because Hitler had captured Europe. that the railways were brought into this matter in 1942, rather reluctantly. I know, because I was serving in the Legal Department of one of the railways at that time.
  It is true that Thomas Cook & Sons Ltd. started as an agency dealing with excursions in Great Britain, but for many years its principal business was overseas. Thomas Cook & Sons Ltd. was the pioneer in arranging pilgrimages from parts of the Muslim world to Mecca, which is an activity that has nothing whatever to do with British Railways. Thomas Cook took Sir Garnett Wolseley to Egypt to suppress the rebellion of Arabi Pasha in 1882. In 1884, Thomas Cook took the ill-fated General Gordon up the Nile to Khartoum. A little later Thomas Cook took the still more ill-fated expedition to try to rescue him.
  For a long time the company has not been concerned principally with transport in Britain, and British Railways would never have thought of being concerned with Thomas Cook's business. In present circumstances, it would be useful if, instead of extending the borrowing powers of the holding company, that company sold a valuable asset and raised the money in that way.
  The profits of Thomas Cook have been mentioned. I have spoken to a number of tourist agents. Tourist agents say that they do not think that Thomas Cook is making as much money as it should be and that somebody else would probably do better. This is, therefore, a very saleable asset.
  As to selling profitable assets, if a nationalised industry is making a large profit and has a surplus it would be appropriate for it to diversify. There would be no reason why British Railways, if it were making a large profit, should not invest surplus assets in Swiss hotels or in a Monte Carlo casino or in

  1021
  motels in the Everglades of Florida. However, there are no surplus assets and none of this has anything to do with British Railways. Nor has Thomas Cook As British Railways is not making a profit, but is making a loss, it would be reasonable for it to sell its investment in Thomas Cook to raise money to purchase the buses, if that is the Government's intention.
  Mr. J. T. Price: The hon. Gentleman usually gets his facts right. Thomas Cook & Sons Ltd. has a great deal to do with British Railways. Every office of Thomas Cook in this country, and many of its offices abroad, is an agent for British Railways and it sells British Railways tickets by the million every year.
  Mr. Wilson: That is a minor part of its business compared with its world-wide tourist business. Its interests go much outside railway tickets to Brighton, Blackpool or such places. If we had the figures showing the proportion of its business relating to journeys on British Rail and that relating to business overseas. the hon. Gentleman would find that the British Rail section was very small.
  Mr. Henry Clark: Does my hon. Friend agree that the sale of British Rail Tickets by Thomas Cook &Son is almost in the form of a loss-leader to get people into the shop?
  Mr. Wilson: That might be. There are other agencies, such as Pickfords which sells rail tickets and is also a nationalised concern. Thomas Cook & Son is not present everywhere.
  I do not want to delay the House by continuing argument about the matter. We should consider whether to sanction an increase in borrowing powers when assets which are not essential to any transport interests in this country are available for sale.
  Mr. John Lee: This looks like being quite a long night, for reasons made clear by the hon. Member for Oswestry (Mr. Biffen), who was kind enough to refer to my views. The Ministry of Transport is one of the few Departrnents of the Government on whose proposals the lines of cleavage go down the middle of the Floor of the House. One of the reasons why I take an interest in
  1022
  transport is that the Ministry is one of the few Departments from which one can be sure that some kind of a Socialist case will be put forward. [Horn. MEMBERS: "Hear, Hear."] I know that hon. Members opposite do not like it, but if they are undergoing some anguish this evening they can console themselves by thinking of what hon. Members like myself, on the Left-wing of our party, must put up with when almost every other Department is having its affairs discussed in the House.
  Hon. Members opposite associate nationalisation with seedy suburban stations, with unpunctual trains run inefficiently by mutinous staff, and with coal mines being closed down, or anything else that is not make a profit at the time. Therefore, anything in the hands of the Government which makes a profit, or is likely to make one, will be their target.
  The hon. Member for Truro (Mr. Geoffrey Wilson), gave us a most interesting account of the diverse interests of Thomas Cook and Son and tried to say that they were very wide of the activities of British Rail. But what he was really saying was that the range and diversity of transport is very great. It has been the whole of my right hon. Friend's policy that we should try to integrate our communications system as far as we can. There is nothing in the least strange in Thomas Cook and Sons ranging its activities wide over the world. I suppose that the hon. Gentleman would not regard the running of a hotel as obviously within the scope of British Rail, yet Gleneagles is a nationalised asset.
  7.15 p.m.
  I take it for granted of the Ministry, as I would not of some others, that the Amendment will be resisted. What I should like to know from my hon. Friend the Minister when he replies to the debate is whether we can be sure of what will be done in the event of the Amendment ever being put into effect, if there should ever be a future Conservative Government, and if it were minded to denationalise and sell off these assets or others like them.
  I remember the unsatisfactory circumstances surrounding the denationalisation of road haulage, some of which was sold at knock-down prices. I also remember

  1023
  that not all that was denationalised in the 13 years of Conservative rule is even now being renationalised. I know that my right hon. Friend will deal effectively with most of the private sector of road haulage under the Transport Bill. But certain sectors of civil aviation, such as charter air companies, were denationalised by the Conservatives and there is not the slightest sign of their being brought back into public ownership.
  I should like to be certain that there will be no future compensation, no kind of second round on this. I am sure that the Amendment will be resisted, and I hope that we shall find that the scope and tentacles of the Transport Holding Company become more and more extensive. I do not think that any hon. Member on this side of the Committee, even those who are less enthusiastic than I am about public ownership, will have anything but praise for my right hon. Friend, though we know that this will lead to no end of a political row, which is one of the reasons for tonight's demonstration. Hon. Members on this side of the Committee will vote solidly against the Amendment.
  Mr. Bessell:The Amendment is possibly the most important on the Order Paper. I hope that the hon. Member for Reading (Mr. John Lee) will forgive me if I do not follow him into the realms of ideological discussion on the advantages or otherwise of nationalisation as a whole. I want to address myself briefly to the points in the Amendment which commend it to me and my party.
  I congratulate the hon. Member for Tavistock (Mr. Michael Heseltine), on what I believe was his debut at the Dispatch Box in moving the Amendment. He made a very powerful case which needs to be answered fully by the Minister of State.
  Two hon. Members on this side of the Committee have made the point that Thomas Cook and Son and its subsidiaries were an accidental acquisition. It came into the portfolio of the Transport Holding Company by a series of accidents over the years. Even the right hon. Lady in the all-embracing terms of the Transport Bill which we are at present consider-
  1024
  ing in Standing Committee F, does not suggest that any of the many boards and other organisation which she is to establish should act as tourist or travel agents. I do not think that it can be seriously in the Government's mind that any agencies of Government are best fitted to be a travel or tourist agency.
  It has been asked whether Thomas Cook and Son are making a profit, and a figure has been given which shows that in the past two years there was a surplus income. One cannot say whether it is a useful profit or not because we do not know what the company's total assets are, nor do we know how much capital is being deployed, nor have we any idea of the extent to which profit relates to the present capital value of the company. If one considers the vast organisation which Thomas Cook and Son represents, with its ramifications throughout the world, its offices and agents and agencies in almost every country in the western world, it is obvious that the figure quoted of El½ million is relatively small in relation to what must be a very substantial cash flow.
  There is one way in which we can judge this. The hon. Member for Tavistock referred to American Express, which is the giant rival of Thomas Cook and Son. But it has not always been so. There was a time when American Express was a relatively small and struggling company and Thomas Cook was well established in the field of travel and tourist agencies. Today, American Express is not only the world's leading travel agent but is one of the major bankers of North America. Apart from its travel cheque system, which is far more acceptable than any other throughout the world, it has a department which deals with credit cards which is not only very profitable to American Express but is one of the most enterprising of its many ventures and has attracted many people to make use of its services.
  Thomas Cook & Son, although a pioneer in its field—I accept that this is so—has stagnated. There can be no doubt in the minds of any of us who have had any experience of travel abroad that if one is looking for an efficient travel agency one will look to American Express before Thomas Cook & Son. I am sorry that this has to be said, but it is necessary to illustrate the point that it would

  1025
  be provident on the part of the Government to offload this asset. I believe that under private enterprise Cook & Son could prosper as it did in the past. I believe that it would have the incentive that is essential for a profitable organisation and that is inevitably absent within a public body.
  The point was made in the debate on the last Amendment that where one has a public undertaking there is no requirement to make a profit. This is not wholly true. At the same time, the jobs of the people who are managing Thomas Cook & Son, the jobs of the people who are acting in its agencies abroad and the jobs of the people who are responsible for the advertising, the promotion and so on are not in jeopardy if Thomas Cook & Son does not make a large profit in relation to its cash flow or capital assets. This is not true under private enterprise.
  There is a peculiar and special reason why Thomas Cook & Son should be not only profitable but an extremely efficient travel and tourist agent, and that is because its name is synonymous all over the world with travel in Britain. Many of us who live in this country think of Thomas Cook & Son as being a company which will provide service for overseas travel or travel within this country, but for the person who lives in the United States or in many parts of Europe Thomas Cook & Son is a name which they relate to travel and holidays in England. I am always very sorry at the absence of promotion from Thomas Cook & Son in the North American Continent. I speak with considerable knowledge of the area. For many years my business interests have taken me across the Atlantic several times a year, and, therefore, I know not only from my own experience but from experience of dealing with business people and others in the dollar-spending areas who propose to come here for their holidays that Thomas Cook & Son has failed in recent years to make the kind of impact that it would be compelled to make if forced to produce a profit, if answerable to its shareholders and if it had to produce its figures at public meetings of the company annually.
  Having said that, I believe that there are three basic reasons why the Amendment should not be rejected by the Government. First, the efficiency of Thomas Cook & Son would improve
  1026
  under private enterprise. There is room for that improvement. Secondly, an improved and more efficient company would channel visitors into this country with dollars and foreign currency to spend here, which we desperately need. Thirdly, it would be a gesture towards world opinion and to those people, particularly bankers overseas, who are gravely concerned at the amount of money which the Government are intending to spend not just within this Bill but within the main Trainsport Bill which is being considered in Standing Committee F. It is clear to me that the Government need to make gestures at the moment, and this is the kind of gesture that would be acceptable to our friends abroad and one which I believe would be important within the context of this Bill and within the context of the main Bill now being considered in Standing Committee F.
  There is no reason—the point has repeatedly been made from this side of the Committee—for any Government to enter into the travel business. It is not a business which is by its nature a very profitable one, and it has to be managed efficiently. There has to be real drive, enthusiasm and vigour behind it if it is to make large sums of money in relation to capital deployment. Thomas Cook & Son came under the control of British Rail and of the Transport Holding Company accidentally. There is no reason why it should remain there. Its sale would go some distance towards the £70 million which the Government are requiring to raise under the terms of the Bill. It could, I think, serve a far more useful rôle under private enterprise. I hope that the Minister of State will recognise that there is a reasoned and sensible argument to be advanced behind these Amendments, and I trust that, in particular, Amendment No. 3 will not simply be turned down by the Government, as have so many reasoned Amendments which have been put forward not only today but in Standing Committee F, and which have not even had a chance of fair consideration.
  Mr. Leslie Huckfield: Considering the great fuss that various hon. Members opposite have created outside the House against Bills like this one, I am rather surprised that there are not more of them on the benches opposite this evening.
  Mr. John Page: If the hon. Gentleman had been present during the discussion on the first Amendment he would have seen that there was only one hon. Member present on the Government back benches, the hon. Member for Central Ayrshire (Mr. Manuel), who certainly made the most of his opportunities in interruptions. A criticism of that kind does not come very well from the hon. Member for Nuneaton (Mr. Leslie Huck-field).
  Mr. Manuel: On a point of order, Mr. Irving. I would ask the hon. Gentleman to withdraw the word "interruption" and say "speech".
  The Deputy Chairman: That is not a point of order. [Interruption.]
  Mr. Manuel: Further to that point of order, Mr. Irving. The hon. Gentleman said that I was interrupting. I was called on and spoke in the debate on the first Amendment. His statement ought to be corrected.
  The Deputy Chairman: The hon. Gentleman cannot speak further to a point of order which has already been adjudicated as not being a point of order.
  Mr. Huckfield: I am most grateful to the hon. Member for Harrow. West (Mr. John Page) for his interjection. I suggest to him that hon. Members opposite have committed themselves to oppose Bills like this one in a way that hon. Members on this side have not. I also suggest that if hon. Members opposite make commitments outside the House. at least one or two of them should try to fulfil them.
  I should have thought that the very fine pedigree that the hon. Member for Truro (Mr. Geoffrey Wilson) has given Thomas Cook & Son was in itself the best evidence that we could support from this side for nationalisation. I should have thought that the last thing one wanted to do to a company which had such a fine pedigree was to return it to private enterprise.
  I am disturbed by another matter. On transport matters we seem to have the emergence lately of a rather dangerous doctrine, that where there is a flourishing public company in competition with a private company the private company should buy the other. I am surprised to
  1028
  hear the hon. Member for Bodmin (Mr. Bessell), who is very fluent in these matters, suggesting that the sale of one of the more profitable parts of the Transport Holding Company will impress bankers abroad.
  Mr. Bessell: How does the hon. Gentleman know that it is profitable? A profit of £1 million or £10 million is not relevant. What is relevant is the capital deployed, the cash flow, the actual asset value of the company. We cannot say that it is profitable in the real sense of the term until we know these facts.
  Mr. Huckfield: I lectured in economics for about four years before coming to this House. and I assure the hon. Gentleman that I took full cognisance of the factors that he has mentioned and I am also taking note of the potential of Thomas Cook & Sons, which has not so far been accepted. I am rather concerned to hear hon. Members opposite make comparisons with private companies and then try to tell us that a private company would sell off one of the more profitable parts of its holding. I suggest to the hon. Member for Oswestry (Mr. Biffen) that if he makes comparisons with private industry, we could all benefit from accurate comparisons.
  Apart from that, it has been advocated that we should not have this kind of travel agency enterprise in public hands. The hon. Member for Bodmin is always telling us that he has travelled widely and what people abroad think of us and our tourism. The hon. Member cannot have been to Ireland. because the Irish Tourist Board is a very successful example of private public enterprise in this way.
  Hon. Members opposite are always advocating, both inside the House of Commons and outside, better integration and rationalisation of commercial activities. It would appear to be a rather silly argument that where there is a profitable part of the business, it should be disposed of so that we can bring in unprofitable parts. That theory appears to he contained in the argument that some hon. Members opposite have tonight advanced. For these reasons and many others, I urge rejection of Amendment No. 3.
  7.30 p.m.
  Mr. J. E. B. Hill: I hope that the fate of the Amendment will be decided not by economic theory, but by the test of what makes good commercial sense, which is the doctrine now adopted by the Government. It does not seem to me that Thomas Cook is necessary for the mainly passenger and freight activities of the Transport Holding Company. It may in a sense be relevant and connected, but it is not essential. Most of its large tourist business is today linked with air and shipping and not with rail or road. In the 1965 figures for Thomas Cook, rail accounted for only one-tenth of its bookings.
  I consider that Thomas Cook is a valuable asset, as many hon. Members have suggested, which might be better realised because we are not making the most of it under the Transport Holding Company. There are various reasons. First, in what is an expanding and international business—the growth of traffic on a mass scale—Thomas Cook is handicapped by being tied to too many of the, perhaps, necessary criteria of nationalised industries, notably in conditions of employment which it is able to offer its staff.
  There is great competition in the travel world for the up-and-coming manager, the man of ideas. Rather like bright boys in advertising, those people are sought after. They move around and they are attracted, not only by levels of salary, but by such matters as pension rights, share options and various things which are frowned upon within the nationalised sector.
  There is also the disadvantage of sheer size which brings with it lack of flexibility and, of late years, a lack of personal interest. Most of us will have experienced this when travelling. It is not the fault of the people in Thomas Cook but is simply because of the sheer scale of the business. There is also evidence that the big and developing business in he United States would expand still faster if Thomas Cook were run on private enterprise lines.
  It is also handicapped because, as a quasi-Government agency, its travel interests may not strictly be in accord with Government policy. It is rather hard for Thomas Cook to go flat out selling£50 package tours when the whole of Government policy is trying to restrain the expenditure of foreign exchange.
  1030
  I would like to know the real value of Thomas Cook. All we know is that there has been no valuation of Thomas Cook as a whole. In that, I am at one with the hon. Member for Blyth (Mr. Milne). All we know is that some of the sites from time to time have been developed on a profitable basis, but there is the chain of offices around the world which probably could be developed in each country to show a considerable value above book value. Another feature is the great good will of a travel business which has a household name. We know that the profits have averaged just below £2 million for the last four years, although of late there has been a marked decline.
  One unusual feature about the business to which reference has not been made is the value of the large amounts of money which are held by Thomas Cook on deposit through the year in the form of proceeds from the sale of travellers' cheques which are not promptly cashed. The pattern of most of the business is that the intending traveller or holidaymaker pays his deposit for his holiday and buys his travellers' cheques considerably in advance of the time when he cashes them. Thomas Cook in turn does not have to settle its hotel accounts until some time after the holidays have ended. The result is that generally, at any one time during the year, Thomas Cook has in hand considerable sums of money.
  In the accounts one sees that in December, which is certainly not a high point in the year, £12¾ million of money paid for travellers' cheques was in hand. The figure rises in the summer and over the year as a whole the sale of travellers' cheques has increased from£50 million in 1964 to£63 million in 1966. There is, therefore, great scope for earning interest on the handling of that money.
  I believe, incidentally, that the whole of the profit or the interest on handling the money accrues to British interests and that 25 per cent. does not go to the Wagons-Lits holding. If, therefore, Thomas Cook were put up for sale, these factors would attract a good body of potential purchasers. It is not inconceivable that the possibility of handling these large sums of money with real professional expertise would attract, say, a consortium of merchant bankers, because the money is available for professional use. I suggest that with the

  1031
  present status of Thomas Cook, no one has seriously thought of that. Nor is it the business of the Transport Holding Company to try to chase that kind of activity.
  By capitalising on the average profit of about£2 million and adding something fairly substantial for the potential property development and for the use of the money or interest, it might well be found that a sale would produce a substantial part of the extra loan money for which the Bill asks and that, therefore, much less would be required of the public.
  If, as the hon. Member for Truro (Mr. Geoffrey Wilson) said, one has a good capital asset, of which one may not be making the optimum use, it may be much better, granted that there is an overall need for more capital, to sell that asset and make a capital profit, rather than making an annual revenue profit, which is not as great as it might be. I hope that the Government will do what they say and use their commercial judgment in testing the market, and not go again to the taxpayer for a loan which, if it is made, is far more likely, in the end, to have to be written off than repaid.
  Mr. John Page: This is another very important Amendment. If it were carried, the whole of the rest of the Bill might become unnecessary. I hope that we shall hear from the Minister of State what are the asset values of Thomas Cook and the other tourist interests of the State holding organisation and the value of its vehicle building interests. The figures given are so obviously unacceptable—the good will of Thomas Cook is put at£200,000. That is a kind of joke figure, which must have been dreamed up at some early stage—perhaps the good will as it was in 1930. These figures obviously do not represent the value of the good will of the business as it is today.
  May I put right a remark in an intervention in another speech of mine when the hon. Member for Central Ayrshire (Mr. Manuel) said that I came here with a great plea to the Government to nationalise profitable industries? What I said earlier was that I hate nationalisation and State control, but if I was a nationaliser I would not start going for the obsolescent industries, to put the taxpayers' money into them.
  1032
  I said that I thought it was a dangerous philosophy, and might possibly sow thoughts into the minds of hon. Gentlemen opposite but, having read a certain amount of Fabian tract and that kind of thing, in order to keep myself abreast of what the Government are thinking, I see that it has probably occurred already to some hon. Gentlemen, like the hon. Member for Reading (Mr. John Lee) and some of his other hon. Friends.
  We have been accused on this side of the Committee of raising this as a matter of prejudice. It is said that we are saying, "Let's denationalise for the sake of denationalisation". This has a very strong appeal to me in many cases but it is not for that reason that we are pressing this Amendment. We are doing so because we believe that it is the way for the Government to run their business, honestly and honourably. They are interested primarily, in this Bill and the transport undertaking as a whole, in running transport undertakings. They are not interested in the running of tourist activities and holiday camps and that kind of thing.
  This is proved by the fact, and I am open to correction here, that in the new Transport Bill there is no mention at all of Thomas Cook and the vehicle building interest. There are 240 pages, but not one of them mentions this. It cannot be an important aspect of the Government's approach to transport.
  Irrespective of the fact that Thomas Cook and its staff and the country would benefit if Thomas Cook were to come under private enterprise control, and so be given the greatest spur of profitability which this would bring about, what we are pressing for is that the Government should sell off this saleable and attractive asset for a substantial sum, and, by so doing not have to use more of the taxpayer's money or print more money in order to get the£70 million for which they are asking in the Bill.
  7.45 p.m.
  It seems a clear opportunity, and it is also good business, because if one's business is primarily in one area and one wishes to have a further investment in the same direction, it must make good sense to sell off that part of the business which is not one's prime interest and then use the money so raised to purchase the

  1033
  new assets which it is felt one needs for the running of one's main interest. I am absolutely certain that Thomas Cook as the prime interest of an independent board of directors would prosper much better, to its own advantage and that of the country—because it can be a very big earner of overseas currency—by the very fact that it was an individual interest and responsibility of a particular board. It would have much more drive behind it than at present.
  The other Amendment deals with vehicle building. In my business life I have a certain amount to do with the motor industry. Let me quickly make note of the competitors of these companies listed in the new Schedule. One sees that there is the commercial side of the Ford Motor Company, Bedford, which is the British General Motors Organisation, Rootes, with its Commer, tied up with Dodge and Chrysler, and finally, in the new British Leyland Motor Corporation, Morris Commercial, Leyland and I think I am right in saying A.E.C. too.
  There are four large groups there. These people use their facilities for research and development in the making of their commercial vehicle and their other vehicles, placing this at the disposal of their bus and coach manufacturers. This research and development is expensive, not only in money terms but in terms of the expertise of a small number of trained people. The tooling-up of new models is a great expense too. In the same way as the private car industry is now a fashion business, so more and more are the buses, coaches and commercial vehicles becoming a fashion business, in that companies wish to change and need to change.
  This particularly applies to coaches and buses, which have to go all out to attract patrons. In these big organisations they not only get the technical backing but the overseas backing for their export trade which allows decent runs for new models. I hardly see that this group of partly-owned commercial vehicle builders, partly owned by the State holding organisation, is viable.
  This moment when there is rationalisation, particularly in the commercial vehicle field, seems an absolutely ideal time commercially to investigate whether these small companies should join with the larger groups which I have mentioned
  1034
  and which I believe will give them a better opportunity of survival.
  Many of the people working at the Park Royal works live in my constituency. The employees will have a greater opportunity for full employment and the survival of their industry if they are completely divorced from the Government and wholly under commercial operation than they have at the present time.
  I ask the Parliamentary Secretary therefore to give serious evidence to the Committee that he is not turning down this proposal out of any kind of prejudice. It would also be wise to take the trouble to acknowledge that there is some weight in the arguments which have been put forward from this side of the Committee, which I believe are very cogent, weighty and sensible.
  Mr. J. H. Osborn: My hon. Friend the Member for Tavistock (Mr. Michael Heseltine) moved the Amendment extremely well. I wish he were here now so that I could congratulate him. He raised a most important point, the gist of which is similar to the point raised by my hon. Friend the Member for Harrow, West (Mr. John Page). I will therefore curtail my remarks slightly.
  We are here discussing business acumen and business activity. The Minister of Transport is asking for an extra£70 million. Is she inviting the Transport Holding Company to carry on its business in a businesslike manner?
  We have been asking questions about profitability, capital employed and return on capital. According to the last annual report to 31st December, 1966 profits were about£14 million and the capital employed collectively was about£182 million. Consolidated profits were at the rate of 8·2 per cent. which, for a nationalised industry, is not too unsatisfactory.
  I will concentrate my remarks on the manufacturing subsidiaries. On page 67 of the Annual Report and Accounts, the gross receipts for Bristol Commercial Vehicles Ltd. are shown at about£3 million and for Eastern Coach Works Ltd.£2½ million, and the profits are£226,000. There is a footnote:
  "The buses and coaches manufactured by Bristol Commercial Vehicles Ltd. and Eastern Coach Works Ltd. were mainly sold to fellow subsidiaries of the Transport Holding Co."

  1035
  My hon. Friend the Member for Harrow, West talked about size. We have very little information, based on this report, of the capital employed in bus manufacture. We have knowledge of the gross receipts, which I take to be turnover, and we have knowledge of profit. I complain time and time again about these reports. Looking at them as though one were a shareholder, in the context of the new Companies Act, one finds very scant information about this activity.
  Page 42 of the Report, dealing with bus companies, records that B.C.V. produced 727 bus and coach chassis and 141 engines in the last year. Eastern Coach Works Ltd. produced 693 bodies. Star Bodies produced 398. I suggest that the numbers in this Report are very small compared with the standards to which we have become accustomed in Vauxhall, Rootes, and particularly the British Leyland Corporation and A.E.C.
  We are faced with a number of small, diffuse companies. It could well be that they have a case—we have no information on the numbers employed—for standing on their own feet as independent entities in different parts of the country. This was logical in 1962—Conservative Ministers certainly stated that—but I wonder whether it is equally logical now. If we could have some information about these bus companies we would be happier.
  We must also consider the Amendment—I will not deal with the travel agents side—in the context in which the debate is being held. We had the announcement of£300 million Government cuts in expenditure with a promise the year after of£400 million. Yet on the same day, on Second Reading of this Bill, the Minister of Transport asked for an extra£70 million. Hon. Members on this side reiterated that this was profligate and unwise. It certainly caused grave doubts about the Government's integrity.
  This leads me to ask whether these manufacturing activities and the activities of the travel agents are being run as well as those of their competitors. The hon. Member for Bodmin (Mr. Bessell) gave a good reason for doubting whether Thomas Cook and Sons Ltd. has made the ground that American Express has made.
  1036
  How are the three bus companies named in the new Schedule proposed in Amendment No. 9, faring in the league, not only in this country, but outside? Are they operating in fair competition with the four big companies which have been created in this country? It could be that their activities are sufficiently small and sufficiently specialised not to matter. I took part in the debates on the 1962 Bill and we were reminded then that they were very specialised activities.
  The hon. Member for Westhoughton (Mr. J. T. Price), the hon. Member for Nuneaton (Mr. Leslie Huckfield) and others stressed that this was a debate between those who believe in free enterprise and those who believe in nationalisation. It is not strictly that, because those who believe in free enterprise believe in the best uses of our resources. I have agreed—I have mentioned this in the House and outside—that nationalisation for a period has served this country well. I am on record as having said that.
  The hon. Member for Westhoughton quoted Italy. He said that it was the accepted tendency to extend nationalisation in Italy and he referred to the Isti-tuto per la Ricostruzione Industriale in particular. This is a new formula for nationalisation, a formula where there is an endowment fund of approximately 10 per cent. of all capital employed—I spoke about this on 1st February in col. 1625 of the debate on the Industrial Expansion Bill—which is not subject to normal interest criteria. All other finance is subject to the normal financial criteria of the market. But even in Italy there is doubt whether this organisation is operating under conditions of fair competition against other organisations.
  We should conduct the whole debate, particularly on this Clause, in the context that whoever is running the Transport Holding Co. must look at their assets and ask whether those assets are being deployed correctly.
  My hon. Friend the Member for Oswestry (Mr. Biffen) mentioned that Davy Ashmore has been taking over some of these smaller competitors. He did not mention Brightside, which happens to be a Sheffield company. He mentioned Loewy-Robertson, and there are other instances of that kind of operation.
  We gave a Second Reading to the Industrial Expansion Bill in an atmosphere

  1037
  where rationalisation is supposedly being encouraged by this Government: If the Government intend to support rationalisation, or even provide an agency such as the I.R.C. to do it—which l would regard as a shotgun marriage—why should their activities be excluded from scrutiny and analysis? Why should there be one law for the private sector and one for British Railways? Why exempt the activities which come under the Minister of Transport? I hope that we shall receive a satisfactory answer.
  If a large industrial organisation cannot raise funds for its activities, it has to divest itself of some of them. I therefore suggest that my hon. Friends have raised a valid point, and that the integrity of the Government is at stake. If they cannot satisfactorily answer the arguments on the Amendment, who will trust riot only the Minister, but the Government as a whole? I hope that they will look dispassionately at the problems which we have raised. I hope, too, that they will accept the Amendment. If it is rejected, I hope that it will not be for reasons of dogma. We must receive satisfactory answers, otherwise the overseas bankers will be far from satisfied.
  8.0 p.m.
  Sir Harmar Nicholls: I hope that the Minister will answer the questions which have been put by my hon. Friends, and particularly those put by my hon. Friend the Member for Tavistock (Mr. Michael Heseltine) who made an excellent speech.
  I want to revert to Amendment No. 3, and to discuss in particular Thomas Cook and Sons Ltd. in the light of the speeches made by the hon. Members for Nuneaton (Mr. Leslie Huckfield) and Westhoughton (Mr. J. T. Price). The only arguments that I have heard against the points made by my hon. Friends is that these Amendments have been put down out of prejudice, and because of a doctrinaire belief in private enterprise. It is said that we have not looked at all the facts, and that it is merely to further this doctrinaire feeling that the Amendment has been tabled. I think that my hon. Friends have disposed of that point of view. The doctrinaire feeling that we may have about private enterprise does riot come into it. The facts speak for themselves. The evidence does not need the support of any doctrinaire feeling which may be present on the general
  1038
  question for and against private enterprise.
  I was particularly interested in the speech of the hon. Member for Nuneaton. He said that he ought to be listened to as a speaker with some authority because for four years he had lectured on economics. He thought that he produced pretty strong reasons why his argument ought to be accepted. As a medium-sized business man, I have had to listen to the lectures of bank managers for many years, and particularly over the last few months. The point of view of the lecturer and that of the lectured is different. The hon. Member for Nuneaton said that no private enterprise business man would think of selling off a profitable part of his business, particularly if it was the only profitable part of it. I speak as a private enterprise business man. There are often occasions when a private business man is eager to sell, and it is right to sell. This is when the business is becoming less profitable with each passing year. It is a good idea to sell while the value is reasonably high. It is a good thing to get the price while it is there and worth having.
  Thomas Cook is losing its business to its competitors, not only American Express, but others in this country. The Government's holding in Thomas Cook is likely to become less as each year goes by. As a business man, as distinct from a lecturer, I advise the Government that now is the time to turn their holding into cash, and to use the cash in other parts of their interest where it could be put to better use.
  This is, of course, presupposing that Thomas Cook, because it is a quasi-Government Department, is not in a position to make the best of its business. There is not much doubt about this. I think that even hon. Gentlemen opposite will admit that if there is one business in which private enterprise is needed more than anywhere else, it is in the sort of business carried out by Thomas Cook. It is a business which ought not to have difficulties put on it by any sort of bureaucracy, however quasi it may be. This is a private enterprise business, and I believe that we ought to consider it from that point of view.
  I do not think that anything which is even only half Government controlled can

  1039
  compete in earning foreign currency in the tourist business. For many years I was a Minister at the Ministry of Works. We had control of our ancient monuments, in which an enormous amount of money is tied up. I know that the officials at the Ministry tried hard to turn those assets to worthwhile account, but, because of the restrictions imposed on any Government Department, and because of the standards to which they have to adhere in terms of accepting advertisements on their literature, they were hamstrung before they started. Ancient monuments have a terrific value compared with historic houses under private control, but if one compares the earnings of the latter with those of the former, one realises the enormous opportunities that are being lost. Having seen this from the inside, I submit that ancient monuments could become perfect caravan sites, and become a great attraction for tourists. They have great potential, but, because they are controlled by a Government Department which works under restrictions, it is impossible to make them a success.
  Thomas Cook is a private enterprise business which came under Government auspices by accident. At the moment it is earning a profit, and the Government may get a reasonable price if it is sold now. I do not think that they will get the same price in three or five years' time. From the point of view of timing, and doing what is really in the national interest to earn foreign currency, the Government ought to accept the Amendment.
  Mr. R. Gresham Cooke: My hon. Friend the Member for Sheffield, Hallam (Mr. J. H. Osborn) is right. The Bristol Coach Works, Bristol Commercial Vehicles, and Eastern Coach Works represent a small unit which makes only a few hundred buses a year, and it ought to be tied up with one of the large units. I remember how it became nationalised in 1948. It was really a mistake. It was owned by private enterprise, with a good deal of money from Bristol City. At that time it was not possible to reach agreement on how to run it in future, and it was thought that the best thing to do was to sell it to the Government. That was how it became nationalised. It ought
  1040
  now to go back to private enterprise, and be tied up with one of the big groups, perhaps Leyland Motors and B.M.C. It would be a useful outlet for this concern to have a factory in the South as well as in Birmingham and Preston. I think that the Government should now denationalise this small unit which can hardly be viable on its own.
  Another reasoning applies to Thomas Cook. Any thing that the Government touch in the transport world becomes a mess, and Thomas Cook ought to go back to private enterprise. When the Minister of Transport was looking for a new chairman for British Railways, she went to see Mr. Duncan Dewdney of Esso. Everything was kept highly confidential. He did not tell anybody, but within a few days his name was splashed over six newspapers as the prospective Chairman of British Railways. It was leaked by the Ministry of Transport. That is the kind of way in which things are carried on by the Minister and the Ministry.
  Finally, the Minister of State said frequently during the Second Reading debate that he was going to nationalise the buses for good and commercial reasons. He made a good point. He stands forward as a man of commerce who wants to make things profitable. Now is his chance. Let him sell off Bristol Commercial Vehicles; let him sell off Eastern Coach Works of Lowestoft—a small plant—and Thomas Cook. He will then get a lot of capital for running the railways. If he is a man of common sense he will take the advice offered from this side of the Committee.
  Mr. Swingler: We have had an interesting debate. We do not often get the opportunity to discuss the affairs of the small subsidiaries of the Transport Holding Company, and it is useful to be able to do so. I congratulate the hon. Member for Tavistock (Mr. Michael Heseltine) upon his debut on the Opposition Front Bench. He made a vigorous and expansive start, and will undoubtedly have a long career on the Opposition Front Bench. He stimulated an extremely interesting discussion.
  I am in favour of hon. Members—especially those who participated in its creation in 1962—becoming acquainted with the affairs of the Transport Holding

  1041
  Company and getting as intimate a knowledge as they can of its subsidiaries' activities. In the course of doing so, however, I hope that they will be careful not to involve senior officers in the organisation, who have their loyalties, in political controversies about aspects of high policy.
  My hon. Friend the Member for Westhoughton (Mr. J. T. Price) and the hon. Member for Oswestry (Mr. Biffen) are not in the Chamber at the moment. I agree with them that the two sides of the Committee are here involved in an issue of principle. The situation was expressed clearly by the hon. Member for Oswestry, and not as interpreted by the hon. Member for Peterborough (Sir Harmer Nicholls). The hon. Member for Oswestry made it clear that the Conservative Party is in favour of denationalising wherever possible—especially the case of an activity which would prove profitable for private interests. We take note of that as part of the approach, expressed in a variety of ways, of hon. Members opposite..
  It is no good their pretending that they were just picking on certain companies on their merits. There is an issue of principle here, in respect of profitable assets which, in the opinion of the hon. Members opposite, are more appropriate in the private sector. They similarly take the view that it is more appropriate to leave the loss-making activities in the public sector. That is the basic approach of the Conservative Party..
  Hon. Members opposite must face the situation in the light of what they put into the 1962 Act, which still governs the terms of reference of the Holding Company. They should consider—bearing in mind what the hon. Member for Worcester (Mr. Peter Walker) said during the Second Reading debate about its commercial management—whether it is desirable to put the Holding Company into a strait-jacket. It is to be seriously argued that whenever the Holding Company wishes to enlarge its activities in any sphere there must be a comparable disposal of some of its assets to offset it? If so, I would say that that is arguing that the Holding Company should be put into a strait-jacket and never be allowed to expand.
  Sir Harmar Nicholls: Where it is appropriate.
  8.15 p.m.
  Mr. Swingler: The hon. Member for Peterborough says "Where it is appropriate". It was he and his hon. Friends who made it possible, in the 1962 Act, for the Holding Company to expand its activities in this way. It was the hon. Member and his hon. Friends who provided£30 million in borrowing powers for the Holding Company, to enable it to expand its activities under the 1962 Act. It was not their view at that time that the Holding Company should be put into a strait-jacket, and that wherever it was seen to be commercially desirable to extend its activities it should come forward with a proposal for an offsetting disposal of its assets.
  I am not talking about the days which hon. Members opposite usually wish to forget—the days of 1962. I am talking about the description of the Holding Company given on 16th January, during the Second Reading debate by the hon. Member for Worcester. He then said, in contrast to some of the things that we have heard in this discussion:
  "The one reason why the Transport Holding Company has had such success is that it has been run by those who have a commercial attitude."—[OFFICIAL REPORT, 16th January, 1968; Vol. 756, c. 1651.]
  That is the description by the hon. Member for Worcester of the management of the Holding Company as in January, 1968—a success because it is run by those who have a commercial attitude. We presume that he agrees that those people are capable of making commercial judgments.
  Mr. J. E. B. Hill: If the Minister is going to seek to take credit for the commercial management of the Holding Company he should take account of the fact that the chairman has resigned because he disagrees with the policy. He wanted to resign in July, but was persuaded to stay on. We therefore have a marked disagreement in the management in respect of these proposals.
  Mr. Swingler: The events alleged by the hon. Member for Norfolk, South (Mr. J. E. B. Hill) took place a long time before 16th January this year, when the hon. Member for Worcester described the Holding Company as being a success because it is being run by those who have a commercial attitude. Hon. Members

  1043
  opposite must make up their minds whether, like the hon. Member for Worcester, they regard the Holding Company as a success, or whether they regard it as a failure, as some hon. Members have decribed it. They should ask themselves whether its management has a commercial attitude, or whether the hon. Member for Worcester is wrong and it has mismanaged its affairs.
  Precisely because of the attitude which my right hon. Friend and I take to public enterprise we do not agree that the Holding Company and its concerns should be put into a strait-jacket, or that we should operate the absurd policy which would mean that whenever the Holding Company acquired a fresh interest or extended its activities there would have to be a corresponding offsetting disposal of assets.
  Mr. J. H. Osborn: There is a straitjacket on private industry when there is a shortage of capital. This is a different criterion. The shortage of capital is a financial strait-jacket which is placed upon private firms as well as upon the Holding Company.
  Mr. Swingler: We are arguing whether the Government should provide additional capital for the Holding Company on the basis that it has been successful and, over the years, has not only paid the interest on the capital provided by the Government but, in addition, has annually paid further sums into the Treasury. From that point of view the Holding Company has been highly successful. I would not describe this success as a mismanagement of public enterprise. In this case I agree with the hon. Member for Worcester, that it has been successful over the years in its diversified activities. Its management has had a commercial attitude, and has exercised commercial judgment.
  Mr. Webster: I have no doubt that the Minister agrees with the rest of what my hon. Friend the Member for Worcester (Mr. Peter Walker) said in the Second Reading debate. He went on to say:
  "The Minister has decided to dispense with competition and to create one big State monopoly so that no longer will the commercial element exist in this type of transport"— [OFFICIAL REPORT, 16th January, 1968; Vol. 756, c. 1651.]
  Mr. Swingler: The hon. Member is well aware, of course, that that statement is vastly inaccurate—[Interruption.]—Hon. Gentlemen should read the White Paper. Of course my right hon. Friend could have decided to create a vast State monopoly, just as she could have decided to erect the British Transport Commission again, as an umbrella over all nationalised transport activities. She decided, as we are discussing upstairs in Standing Committee F, precisely against doing that, and that is why we are legislating to establish local government-dominated bodies to take over public transport, especially in the great urban areas. It is another form of public enterprise—
  Mr. Webster: On a point of order. This is good stuff from the Minister of State, but would not this be more appropriate, Sir Barnett, to a debate on the Question, "That the Clause stand part of the Bill"?
  Mr. John Lee: The hon. Member raised it.
  Mr. Swingler: Perhaps I may have a word before you rule on that, Sir Barnett. In the course of this debate, I have many times been tempted to rise on a point of order to point out that several hon. Members—I will mention them if you wish—have been discussing passenger transport authorities and other matters which come under Clauses 9 and 10 of the Bill which is under discussion upstairs, and to which I am merely making reference.
  Mr. Webster Mr. Webster rose—
  The Temporary Chairman (Sir Barnett Janner): Order. I do not consider that anything which I have heard up to now is out of order, and, with the greatest respect, there is no need to suggest that other hon. Members were out of order, because, if they had been, I am sure that they would have been stopped by the Chair.
  Mr. Michael Heseltine: On a point of order. May I refer you, Sir Barnett, to column 1637 of the Second Reading debate, in which the Government spokesman said that this Bill is an essential preliminary to the comprehensive Transport Bill which is being discussed upstairs?
  The Temporary Chairman: I do not quite know what that has to do with it, but the hon. Member may certainly point it out to me for what it is worth.
  Mr. Webster: On a point of order—
  The Minister of State, Scottish Office (Dr. J. Dickson Mahon): A filibuster?
  Mr. Webster: This is not a filibuster, as the hon. Member, who has just arrived, says.
  I am trying to establish the point that these are very closely-drawn Amendments and that there are many related topics which we will want to raise on the Question, "That the Clause stand part of the Bill".
  The Temporary Chairman: I will not say anything about that now: perhaps we should leave it until we reach that Question. I think that what is being said now is in order.
  Sir Harmar Nicholls: On a point of order. The fact is that the Minister of State has raised this issue in trying to refute our main argument that the Question, "That the Clause stand part of the Bill" should be allowed to be developed, since otherwise the record will not show the full argument which is necessary to a public decision.
  The Temporary Chairman: I do not think that the hon. Member's thought is applicable here. The Minister of State is speaking in order. Consequently, perhaps we had better get on with the debate.
  Mr. Swingler: Nothing was further from my thoughts than to suggest that any other hon. Member was out of order. I was merely defending myself against the charge that I was out of order.
  Let us go back to this point. The hon. Member for Bodmin (Mr. Bessell), the hon. Member for Norfolk, South and others have suggested that the reason that they wish the Transport Holding Company to dispose of its bus manufacturing assets, including its interest in Leyland Motors and Thomas Cook and its associates, is that the T.H.C. has been mismanaged and cannot manage these concerns. That is one line of argument. Another has been that, whenever the T.H.C. acquires new enterprises, it must dispose of some old ones as a balance. A
  1046
  further line was that we should denationalise these concerns anyway.
  I agree—I understood that the hon. Member for Worcester meant this quite genuinely—that the T.H.C. has generally been commercially successful. It has certainly never been subsidised. It has always made a profit and continually paid money into the Treasury, over and above the payment of its interest rates. It has been successful according to those criteria. I think that it has been well managed and that it has managed its diversified activities well.
  We deplore the sort of "knocking" of Thomas Cook in which the hon. Member for Bodmin indulged. I will certainly go into that and other criticisms of the way in which these subsidiaries of the T.H.C. have been managed. However, in my right hon. Friend's judgment, the T.H.C. has been well managed and is capable of managing these concerns.
  Indeed, in so far as the publicly-owned Tilling bus group is the main customer for Bristol Commercial Vehicles and Eastern Coach Works, it is clearly desirable and advantageous that they should also be under public ownership. Further—
  Mr. Bessell: In examining the question of Thomas Cook & Son, will the hon. Gentleman examine it in relation to American Express?
  Mr. Swingler: Certainly.
  I was dealing first with the first Amendment, about bus assets. It was made clear at the time of the exchange of assets, in relation to the investment in Park Royal Vehicles, that one of the objects of the deal between the T.H.C. and Leyland Motors was to enable these companies to use the Leyland sales organisation. That was recognised as commercially sensible. Two subsidiaries were manufacturing bus chassis and bodies mainly for a publicly-owned group of operators—the Tilling Group— and, furthermore, they were doing a deal with Leyland Motors by the exchange of shares so as to get the greatest advantage out of marketing and salesmanship.
  I should have thought that hon. Gentlemen opposite would accept that as a commercially sensible deal. Likewise—
  Mr. Michael Heseltine: Would the hon. Gentleman now explain the position

  1047
  of Leyland Motors where the financial disciplines of the manufacturing subsidiaries will be moved from a breaking even to a commercial basis?
  Mr. Swingler: That is not so. If the hon. Gentleman studies the matter, he will see that these bodies will be expected to continue to make a profit. The remit of the new organisations is to break even, but the subsidiaries will be expected—as indeed they do—to make a profit. I should have thought that hon. Gentlemen opposite would have applauded a public enterprise which makes a contribution in this way.
  Several criticisms have been made about information. I would ask hon. Gentlemen, who present themselves so often in debate as having business know-how, to compare the information given by these companies with their privately-owned competitors—
  Sir Harmar Nicholls: They do not break the law.
  Mr. Swingler: Certainly. Everything that has to be done in law is done. In relation to Thomas Cook, I have undertaken to go into these aspects, but I can assure hon. Gentlemen that, in the highly competitive travel agency business, and taking into account Thomas Cook's role in the banking world, as much information is given as is given by Thomas Cook's British competitors in the private sector. I am advised that I can give the assurance that that is the position. We will certainly go into any of the other detailed criticisms which have been made.
  Sir Robert Cary: My hon. Friend the Member for Tavistock (Mr. Michael Heseltine) asked about the last financial year. Could information about the last financial year be placed in the Library for hon. Members to see or, failing that, could it be placed before the Select Committee on Nationalised Industries?
  Mr. Swingler: As soon as that point was raised I asked for the latest information and was informed that the financial returns are not yet available. As soon as the information which is normally given is available, it will be given. But it will be appreciated that this organisation in the public sector is in competition
  1048
  with similar organisations in the private sector. Those who want the organisation to be run on strictly commercial lines should not demand that more information be given by this organisation than is given by its private enterprise competitors.
  Mr. J. T. Price: Will my right hon. Friend resist all pressures to disclose detailed commercial information which could be used by the private trading sector in other branches of the industry unless there is reciprocity by the trading associations representing private operators, whereby they provide an equal amount of information to that which hon. Members opposite are demanding? Will my hon. Friend give that firm undertaking?
  8.30 p.m.
  Mr. Swingler: I assure my hon. Friend that, while this organisation will comply with the law, we shall not ask it to make any further disclosure than that which is made by its privately-owned competitors, because any success which it has had or will have in the future depends on its operating in a strictly commercial way.
  I apologise for taking so long, but I have been subjected to many interruptions. I ask the Committee to reject the Amendment on the grounds that the organisations here named are part of the diversified activities of the Transport Holding Company which has been a successfully managed and profitable national enterprise. I know of no evidence to suggest that it has been mismanaged or that it would be better managed if it were sold to private enterprise. We on this side of the Committee want the Transport Holding Company to expand, and we ask the Committee to approve these borrowing powers to enable it to expand. We believe in the policy, and I hope that the Committee will endorse it.
  Mr. Webster: The Minister of State was a little selective in his quotations from my hon. Friend the Member for Worcester (Mr. Peter Walker). He quoted my hon. Friend as having said:
  "The one reason why the Transport Holding Company has had such success is that it has been run by those who have a commercial attitude. They have built up the Company in competition with free enterprise."

  1049
  But he continued—and the Minister of State did not quote it:
  "The Minister has decided to dispense with competition and to create one big State monopoly so that no longer will the commercial element exist in this type of transport."— [OFFICIAL REPORT, 16th January, 1968; Vol. 756, c. 1651.]
  If I developed that point I should move too far on to the Question, "That the Clause stand part of the Bill", on which we wish to develop arguments away from the narrow points which we have made in the debate.
  My hon. Friend the Member for Oswestry (Mr. Biffen), it has been claimed. said that we wanted to sell profitable State enterprises to private enterprise. I agree. When there was such a transaction, there would be an adequate valuation of the assets and the earnings on those assets, which is normal take-over practice either way. We should insist on that throughout the industry and will insist on it whenever we can in commercial transactions. My hon. Friend the Member for Harrow, West (Mr. John Page) said that if the Amendment were carried the rest of the borrowing powers and the burden of taxation on the individual from the borrowing powers the Treasury bills to which the Joint Parliamentary Secretary referred, which will be an extremely expensive method of borrowing—would not be necessary. In 1965 the earnings of Thomas Cook & Sons Limited were£2 million. They fell last year to£1·6 million. But 1965 is a more standard year. If we took 15 times the earnings, it would capitalise Thomas Cook & Sons Limited at£30 million. If that were done and we revalued the assets of various other organisations mentioned in the Amendment, and took a check on the earnings, so as to have a double check on earnings and assets, the taxpayer would not be carrying the present burden, and part of this money would pay for the prescription charges.
  Only when one starts talking about matters like prescription charges does one get the interest of hon. Gentlemen opposite. When one talks about finance, particularly in relation to this Measure, one receives from the benches opposite only vague looks and embarrassed sniggers, and a complete absence of Treasury Ministers. It is deplorable that at half-past eight at night there has not
  1050
  been, throughout the debate, one representative from the Treasury on the Front Bench opposite, and not even a Whip.—[HoN. MEMBERS: "The Whips are here."]—I apologise. I note that two Government Whips are present. If we had the rest of the Whips here we could cater for every taste within the Labour Party. Meanwhile, I give notice that if a Treasury Minister is not present when we debate the Question, "That the Clause stand part of the Bill" we will express strong criticism indeed, because so far the Transport Ministers have been unable to answer the financial questions we have asked.
  Mr. Manuel: On a point of order. The hon. Gentleman is assuming that there will be a debate on the Question "That the Clause stand part of the Bill." Are you aware, Sir Barnett, that in debating this series of Amendments the arguments have gone extremely wide indeed and that probably every conceivable aspect of the matter has been raised? Would you agree that no good would be served by our debating the Question "That the Clause stand part of the Bill" when we get to that point, because if the debate did take place on that Question hon. Gentlemen opposite would merely by repeating their earlier remarks?
  Mr. Bessell: Further to that point of order. Are you further aware, Sir Barnett, that when discussing a Bill of this importance, which involves such vast sums of money, it would be indeed extraordinary if a debate did not take place on the Clause stand part?
  The Temporary Chairman: That is not a point of order, but a matter affecting a hypothetical situation. The hon. Member for Weston-super-Mare (Mr. Webster) was a little near the mark when he referred to the Question "That the Clause stand part of the Bill", but I am sure that he wishes to keep within the terms of the Amendment so that the Committee may get on with its business.
  Mr. J. T. Price: Further to the point of order raised by my hon. Friend the Member for Central Ayrshire (Mr. Manuel). Without wishing to be tedious, I submit that my hon. Friend made that point validly because our rules rest on the assumption that whoever is in the

  1051
  Chair when a debate of this type is occurring shall be governed and influenced in deciding whether there should be a debate on the Question "That the Clause stand part of the Bill" by the length of the debates on the detailed Amendments that have preceded the Question being reached.
  The Temporary Chairman: I accept that the hon. Gentleman has no desire to be tedious. His point of order does not arise at the moment. When we get to the Question "That the Clause stand part of that Bill" he may care to raise the matter again.
  Mr. Webster: I had almost forgotten what I was saying. The hon. Member for Central Ayrshire (Mr. Manuel) has entertained the Committee with one of his many interventions, speeches, points of order and other forms of diverse entertainment and has again cheered up our affairs.
  However much my hon. Friends oppose Socialism, there is one aspect of it with which one cannot help sympathising. Socialists say that a nationalised industry should not in every respect be absolutely commercial, in the sense of having balance sheets, hard-faced accountants looking into every aspect of its working and so on, because of the social considerations involved. We respect that, although we think that this argument is often carried too far.
  On this criterion of social benefit for deprived parts of the country, would hon. Gentlemen opposite explain how on earth this comes into our discussion of Thomas Cook'? That argument of Socialism does not arise in this or other parts of the Amendment. One part of Thomas Cook is a bank. It deals with foreign travel and with domestic travel for people coming to this country. It is absolutely essential that it should be run on the basic management criterion. The basic management criterion is that a manager should be responsible for assets and for their earnings, and if he cannot earn in competition he should dispose of the assets to someone who can. We have had excellent and precise figures of American Express, but we cannot judge Thomas Cook, or the other subsidiaries, on that basis. There are those of us who are interested in transport. and
  1052
  I myself am also interested in nationalised industries in general, being on the Select Committee concerned. My hon. Friend the Member for Manchester, Withington (Sir R. Cary) has suggested that the Select Committee should be given figures. I am grateful to my hon. Friend for his suggestion, but as we do not as a Committee exist, and have not existed since the Session began, the information would not be of help to us.
  Mr. J. T. Price: I think that we had better have the record straight. The Select Committee on Nationalised Industries does exist. I am a member of it. It was set up by this House more than 10 days ago. The hon. Gentleman suggests that we are some sort of spirit body, but we do exist.
  The Temporary Chairman: We are again getting a little beyond the Amendment. Whether or not the Select Committee exists does not come within the realms of this discussion. I should be grateful if the hon. Member for Westonsuper-Mare (Mr. Webster) would keep to the Amendment.
  Mr. Webster: Yes, Sir Barnett. I am grateful to have the assurance of the hon. Member for Westhoughton (Mr. J. T. Price) that he and I exist: that is something we have established tonight— and about the only fact we have had.
  When Standing Committee D was dealing with the Iron and Steel Bill, the Minister of Power said in column 2038 of the Committee proceedings that he would disclose further information on such items as capital employed, turnover and estimated profit for the ancillary activities of the Corporation and of the publicly-owned companies. I suggest that the criterion suitable for the Minister of Power in that respect is also applicable now.
  We have heard from the Prime Minister of the cutting edge of the economy. These subsidiaries of the Transport Holding Company which we wish to denationalise now—and if we fail tonight, we shall do it when we can—are completely commercial companies. They want to be free of political interference. They want the right of management to conduct their own affairs, have an adequate up-to-date assessment of their asset policies,

  1053
  and get maximum earnings from those assets. Until we get more of this criterion into the economy, the more rapidly we, hall sink into disaster.
  Question put, That the Amendment be made:—
  The Committee divided: Ayes 122, Noes 203.

  Division No. 45.]

  AYES

  [8.44 p.m.

  Allason, James (Hemel Hempstead)

  Clyn, Sir Richard

  Onslow, Cranley

  Baker, W H. K.

  Goodhew, Victor

  Osborn, John (Hallam)

  Balniel, Lord

  Gower, Raymond

  Osborne, Sir Cyril (Louth)

  Bell, Ronald

  Grant, Anthony

  Page, Graham (Crosby)

  Bennett, Dr. Reginald (Gos. & Fhm)

  Grant-Ferris, R.

  Page, John (Harrow, W.)

  Bessell, Peter

  Gresham Cooke, R.

  Pardoe, John

  Biffen, John

  Grieve, Percy

  Peel, John

  Biggs-Davison, John

  Griffiths, Eldon (Bury St. Edmunds)

  Percival, Ian

  Birch, Rt. Hn. Nigel

  Gurden, Harold

  Pink, R. Bonner

  Boardman, Tom

  Harris, Reader (Heston)

  Pounder, Rafton

  Bossom, Sir Clive

  Harrison, Brian (Maldon)

  Powell, Rt. Hn. J. Enoch

  Brewis John

  Hastings, Stephen

  Prior, J. M. L.

  Brown, Sir Edward (Bath)

  Hay, John

  Ramsdert, Rt. Hn. James

  Bruce-Gardyne, J.

  Heaid, Rt. Hn. Sir Lionel

  Renton, Rt. Hn. Sir David

  Buck Aniony (Colchester)

  Heseltine, Michael

  Ridley, Hn. Nicholas

  Bullus, Sri Eric

  Hill, J. E. B.

  Ridsdale Julian

  Burden, F. A.

  Holland, Phjlip

  Rossi, Hugh (Hornsey)

  Carlisle, Mark

  Hordern, Peter

  Royle, Anthony

  Cary, Sir Robert

  Howell, David (Guildford)

  Sharpies, Richard

  Clark, Henry

  Hunt, John

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

  Clegg, Walter

  Hutchison, Michael Clark

  Silvester, Frederick

  Cordle, John

  Jennings, J. C. (Burton)

  Sinclair, Sir George

  Corfield, F, V.

  Johnston, Russell (Inverness)

  Smith, John

  Costain, A. P.

  Kimball, Marcus

  Steel, David (Roxburgh)

  Craddock, Sir Beresford (Spelthorne)

  Knight, Mrs. Jill

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

  Cunningham, Sir Knox

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

  Summers, Sir Spencer

  Currie, G. B. H.

  Lubbock, Eric

  Teeling, Sir William

  Dalkeith, Earl of

  Maclean, Sir Fitzroy

  Tilney, John

  Dance, James

  McMaster, Stanley

  Turton, Rt. Hn. R. H.

  Dean, Paul (Somerset, N.)

  Maginnis, John E.

  Vaughan-Morgan, Rt. Hn. Sir John

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

  Mawby, Ray

  Vickers, Dame Joan

  Eden. Sir John

  Maxwell-Hyslop, R. J.

  Walker, Peter (Worcester)

  Elliot, Capt. Walter (Carshalton)

  Mills, Peter (Torrington)

  Walker-Smith, Rt. Hn. Sir Derek

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

  Monro, Hector

  Webster, David

  Emery, Peter

  Montgomery, Fergus

  Whitelaw, Rt. Hn. William

  Errington, Sir Eric

  More, Jasper

  Wills, Sir Gerald (Bridgwater)

  Ewing, Mrs. Winifred

  Morgan Gemini f Denbigh)

  Wilson, Geoffrey, (Truro)

  Eyre, Reginald

  Munro-Lucas-Tooth, Sir High

  Worsley, Marcus

  Fortescue, Tim

  Murton, Oscar

  Foster, Sir John

  Nabarro, Sir Gerald

  TELLERS FOR THE AYES:

  Gilmour, Ian (Norfolk, C.)

  Nicholls, Sir Harmar

  Mr. Bernard Weatherill and

  Glover, Sir Douglas

  Nott, John

  Mr. Humphrey Atkins.

  NOES

  Albu, Austen

  Carter-Jones, Lewis

  Edwards, Rt. Hn. Ness (Caerphilly)

  Allaun, Frank (Salford, E.)

  Castle, Rt. Hn. Barbara

  Edwards, Robert (Bilston)

  Allen, Scholefleld

  Chapman, Donald

  Ellis, John

  Atkins, Ronald (Preston, N.)

  Coe, Denis

  English, Michael

  Atkinson, Norman (Tottenham)

  Coleman, Donald

  Ensor, David

  Bagier, Gordon A. T.

  Concannon, J. D.

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

  Barnett, Joel

  Conlan, Bernard

  Faulds, Andrew

  Baxter, William

  Crawshaw, Richard

  Fernyhough, E.

  Beaney, Alan

  Cronin, John

  Fitch, Alan (Wigan)

  Benn, Rt. Anthony Wedgwood

  Crossman, Rt. Hn. Richard

  Fletcher, Raymond (Ilkeston)

  Bidwell, Sydney

  Cullen, Mrs. Alice

  Fletcher, Ted (Darlington)

  Binns, John

  Dalyell, Tam

  Foot, Michael (Ebbw Vale)

  Bishop, E. S.

  Darling, Rt. Hn. George

  Fowler, Gerry

  Blackburn, F.

  Davidson, Arthur (Accrington)

  Fraser, John (Norwood)

  Blenkinsop, Arthur

  Daviw, Dr. Ernest (Stretford)

  Galpern, Sir Myer

  Boardman, H.

  Davies, G. Elfed (Rhondda, E.)

  Gardner, Tony

  Booth, Albert

  Davies, Harold (Leek)

  Carrett, W. E.

  Boy den, James

  de Freitas, Rt. Hn. Sir Geoffrey

  Gourlay, Harry

  Braddock, Mrs. E. M.

  Delargy, Hugh

  Greenwood, Rt. Hn. Anthony

  Bray, Dr. Jeremy

  Dell, Edmund

  Gregory, Arnold

  Brooks, Edwin

  Dempscy, James

  Grey, Charles (Durham)

  Broughton, Dr. A. D. D.

  Dewar, Donald

  Griffiths, David (Rother Valley)

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

  Dickens, James

  Griffiths, Rt. Hn. lames (Llanelly)

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

  Dobson, Ray

  Hamilton, James (Bothwell)

  Buchan, Norman

  Doig, Peter

  Hamling, William

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

  Dunn, James A.

  Hannan, William

  Butler, Mrs. Joyce (Wood Green)

  Duntiett, Jack

  Harper, Joseph

  Callaghan, Rt. Hn. James

  Dunwoody, Mrs. Gwyneth (Exeter)

  Harrison, Walter (Wakefield)

  Garmichael, Neil

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

  Hart, Mrs. Judith

  Hazell, Bert

  Manuel, Archie

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

  Heffer, Eric S.

  Mapp, Charles

  Roebuck, Roy

  Henig, Stanley

  Marks, Kenneth

  Rose, Paul

  Herbison, Rt. Hn. Margaret

  Mellish, Robert

  Row, Rt. Hn. William

  Hooley, Frank

  Mendelson, J. J.

  Rowlands, E. (Cardiff, N.)

  Howarth, Harry (Wellingborough)

  Millan, Bruce

  Shore, Peter (Stepney)

  Howarth, Robert (Bolton, E.)

  Milne, Edward (Blyth)

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

  Howell, Denis (Small Heath)

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

  Silkin, Rt. Hn. John (Deptford)

  Hoy, James

  Moonman, Eric

  Silkin, Hn. S. C. (Dulwich)

  Huckfield, Leslie

  Morris Alfred (Wythenshawe)

  Silverman, Julius (Aston)

  Hughes, Emrys (Ayrshire, S.)

  Morris, Charles R. (Openshaw)

  Skeffington Arthur

  Irvine, Sir Arthur

  Murray, Albert

  Salter, Joseph

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

  Neal, Harold

  Murray, Albert Spriggs, Leslie

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

  Newens, Stan

  Steele, Thomas (Dunbartonshire, W.)

  Jones, Dan (Burnley)

  Noel-Baker, Francis (Swindon)

  Swain, Thomas

  Jones.Rt.Hn.Sri Elwyn (W.Ham.S.)

  Norwood, Christopher

  Swingler, Stephen

  Jones, T. Alec (Rhondda, West)

  Oakes, Gordon

  Taverne, Dick

  Judd, Frank

  Ogden, Eric

  Tinn, James

  Kenyon, Clifford

  O'Malley, Brian

  Urwin, T. W.

  Kerr, Russell (Feltham)

  Ooram Albert E.

  Varley, Eric G.

  Lawson, George

  Wainwrieht Edwin (Dearne Valley)

  Leadbitter, Ted

  Orbach, Maurice

  Walden, Brian (All Saints)

  Lee, Rt. Hn. Frederick (Newton)

  Orme, Stanley

  Walker, Harold (Doncaster)

  Lee, Rt. Hn. Jennie (Cannock)

  Oswald Thomas

  Wallace, George

  Lee, John (Reading)

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

  Watkins, David (Consett)

  Lestor, Miss Joan

  Owen, Will (Morpeth)

  Wellbeloved, James

  Lewis, Ron (Carlisle)

  Page, Derek (King's Lynn)

  Wells, William (Walsall, N.)

  Loughlin, Charles

  Paget, R. T.

  Whitaker Ben

  Lyons, Edward (Bradford, E.)

  Pearson, Arthur (Pontypridd)

  Wilkins W A

  Mabon, Dr. J. Dickson

  Pentland, Norman

  Williams Alan Lee (Hornchurch)

  McCann, John

  Perry, George H. (Nottingham, s.)

  Williams W T (Warrineton)

  MacColl, James

  Price, Thomas (Westhoughton)

  Willis. George (Edinburgh, E.)

  McCuire, Michael

  Probert, Arthur

  Wilson, William (Coventry, S.))

  Mackenzie, Gregor (Rutherglen)

  Randall, Harry

  Woof Robert

  Mackie, John

  Rees, Merlyn

  Yates, Victor

  Mackintosh, John P.

  Reynolds, G. w.

  Maclennan, Robert

  Richard, Ivor

  TELLERS FOR THE NOES:

  MacNamara, J. Kevin

  Roberts, Albert (Normanton)

  Mr. Niel McBride and

  MacPherson, Malcolm

  Roberts, Gwilym (Bedfordshire, S.)

  Mr. Ernest Armstrong.

  Mahon, Peter (Preston, s.)

  Robertson, John (Paisley)

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

  Amendment proposed: No. 3, in page 1, line 11, at end insert:
  Provided that no part of the additional borrowing provided in this Act shall be used until the Transport Holding Company shall have disposed of its interests in the following companies (and their subsidiaries):
  Thomas Cook and Sons Ltd.
  Thomas Cook and Son (Bankers)
  British Holding Estates Ltd.
  Dean and Dawson Ltd.
  England and Parrotts Ltd.—[Mr. Webster.]
  Question put, That the Amendment be made:—
  The Committee divided: Ayes 120, Noes 203.

  Division No. 46.]

  AYES

  [8.53 p.m.

  Allason, James (Hemel Hempstead)

  Currie, C. B. H.

  Hastings, Stephen

  Baker, W. H. K.

  Dalkeith, Earl of

  Hay, John

  Balniel, Lord

  Dance, James

  Heald, Rt. Hn. Sir Lionel

  Bell, Ronald

  Dean, Paul (Somerset, N.)

  Heseltine, Michael

  Bennett, Dr. Reginald (Gos. & Fhm)

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

  Hill, J. E. B.

  Bessell, Peter

  Eden, Sir John

  Holland, Philip

  Biffen, John

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

  Hordern, Peter

  Biggs-Davison, John

  Emery, Peter

  Howell, David (Guildford)

  Birch. Rt. Hn. Nigel

  Errington, Sir

  Eric Hunt, John

  Boardman, Tom

  Ewirig, Mrs. Winifred

  Hutchison, Michael Clark

  Bossom, Sir Clive

  Eyre, Reginald

  Jennings, J. C. (Burton)

  Brewis, John

  Fortescue, Tim

  Johnston, Russell (Inverness)

  Brown, Sir Edward (Bath)

  Foster, Sir John

  Knight, Mrs. Jill

  Bruce-Gardyne, J.

  Gilmour, Ian (Norfolk, C.)

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

  Buck, Antony (Colchester)

  Glover, Sir Douglas

  Lubbock, Eric

  Bullus, Sir Eric

  Glyn, Sir Richard

  Maclean, Sir Fitzroy

  Burden, F. A.

  Goodhew, Victor

  McMaster, Stanley

  Carlisle, Mark

  Cower, Raymond

  Maginnis, John E.

  Cary, Sir Robert

  Grant, Anthony

  Mawby, Ray

  Clark, Henry

  Grant-Ferris, R.

  Maxwell-Hyslop, R. J.

  Clegg, Walter

  Gresham cooke, R.

  Mills, Peter (Torrington)

  Cordle, John

  Grieve, Percy

  Monro, Hector

  Corfield, F. V.

  Griffiths, Eldon (Bury St. Edmunds)

  Montgomery, Fergus

  Costain, A. P.

  Gurden, Harold

  More, Jasper

  Craddock, Sir Beresford (Spelthorne)

  Harris, Reader (Heston)

  Morgan, Geraint (Denbigh)

  Cunningham, Sir Knox

  Harrison, Brian (Maldon)

  Munro-Lucas-Tooth, Sir Hugh

  Murton, Oscar

  Prior, J. M. L.

  Teeling, Sir William

  Nabarro, Sir Gerald

  Ramsden, Rt. Hn. James

  Tilney, John

  Nicholle, Sir Harmar

  Renton, Rt. Hn. Sir David

  Turton, Rt. Hn. R. H.

  Nott, John

  Ridley, Hn. Nicholas

  Vaughan-Morgan, Rt. Hn. Sir John

  Onslow, Cranley

  Ridsdale, Julian

  Viokers, Dame Joan

  Osborn, John (Hallam)

  Rossi, Hugh (Hornsey)

  Walker, Peter (Worcester)

  Osborne, Sir Cyril (Louth)

  Royle, Anthony

  Walker-Smith, Rt. Hn. Sir Derek

  Page, Graham (Crosby)

  Sharples, Richard

  Webster, David

  Page, John (Harrow, W)

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

  Whitelaw, Rt. Hn. William

  Pardoe, John

  Silvester, Frederick

  Wills, Sir Gerald (Bridgwater)

  Peel, John

  Sinclair, Sir George

  Wilson, Geoffrey, (Truro)

  Percival, Ian

  Smith, John

  Worsley, Marcus

  Pink, R. Bonner

  Steel, David (Roxburgh)

  Pounder, Rafton

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

  TELLERS FOR THE AYES:

  Powell, Rt. Hn. J. Enoch

  Summers, Sir Spencer

  Mr. Bernard Weatherill and

  Mr. Humphrey Atkins.

  NOES

  Albu, Austen

  Faulds, Andrew

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

  Allaun, Frank (Salford, E.)

  Fernyhough, E.

  Manuel, Archie

  Allen, Scholefield

  Fitch, Alan (W gan)

  Mapp, Charles

  Atkins, Ronald (Preston, N.)

  Fletcher, Raymond (Ilkeston)

  Marks, Kenneth

  Atkinson, Norman (Tottenham)

  Fletcher, Ted (Darlington)

  Mellish, Robert

  Bagier, Gordon A. T.

  Foot, Michael (Ebbw Vale)

  Mendelson, J. J.

  Barnett, Joel

  Fowler, Gerry

  Millan, Bruce

  Baxter, William

  Fraser, John (Norwood)

  Milne, Edward (Blyth)

  Beaney, Alan

  Galpern, Sir Myer

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

  Benn, Rt. Anthony Wedgwood

  Gardner, Tony

  Moonman, Eric

  Bidwell, Sydney

  Garrett, W. E.

  Morris, Alfred (Wythenshawe)

  Binns, John

  Gourlay, Harry

  Morris, Charles R. (Openshaw)

  Bishop, E. S.

  Greenwood, Rt. Hn. Anthony

  Murray, Albert

  Blackburn, F.

  Gregory, Arnold

  Neal, Harold

  Blenkinsop, Arthur

  Grey, Charles (Durham)

  Newens, Stan

  Boardman, H.

  Griffiths, David (Rother Valley)

  Noel-Baker, Francis (Swindon)

  Booth, Albert

  Griffiths, Rt. Hn. James (Llanelly)

  Norwood, Christopher

  Boyden, James

  Hamilton, James (Bothwell)

  Oakes, Gordon

  Braddock Mrs E. M.

  Hamling, William

  Ogden, Eric

  Bray, Dr. Jeremy

  Hannan, William

  O'Malley, Brian

  Brooks, Edwin

  Harper, Joseph

  Oram, Albert E.

  Broughton, Dr. A. D, D.

  Harrison, Walter (Wakefield)

  Orbach, Maurice

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

  Hart, Mrs. Judith

  Orme, Stanley

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

  Hazell, Bert

  Oswald, Thomas

  Buchan, Norman

  Heffer, Eric S.

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

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

  Henig, Stanley

  Owen, Will (Morpeth)

  Butler, Mrs. Joyce (Wood Green)

  Herbison, Rt. Hn. Margaret

  Page, Derek (King's Lynn)

  Callaghan, Rt. Hn. James

  Hooley, Frank

  Paget, R. T.

  Carmichael, Neil

  Howarth, Harry (Wellingborough)

  Pearson, Arthur (Pontypridd)

  Carter-Jones, Lewis

  Howarth, Robert (Bolton, E.)

  Pentland, Norman

  Castle, Rt. Hn. Barbara

  Howell, Denis (Small Heath)

  Perry, George H. (Nottingham, S.)

  Chapman, Donald

  Hoy, James

  Price, Thomas (Westhoughton)

  Coe, Denis

  Huckfleld, Leslie

  Probert, Arthur

  Coleman, Donald

  Hughes, Emrys (Ayrshire, S.)

  Randall, Harry

  Concannon, J. D.

  Irvine, Sir Arthur

  Rees, Merlyn

  Conlan, Bernard

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

  Reynolds, G. W.

  Crawshaw, Richard

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

  Richard, Ivor

  Cronin, John

  Jones, Dan (Burnley)

  Roberts, Albert (Normanton)

  Crossman, Rt. Hn. Richard

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

  Roberts, Gwilym (Bedfordshire, S.)

  Cullen, Mrs. Alice

  Jones, T. Alec (Rhondda, West)

  Robertson, John (Paisley)

  Dalyell, Tam

  Judd, Frank

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

  Darling, Rt. Hn. George

  Kenyon, Clifford

  Roebuck, Roy

  Davidson, Arthur (Accrington)

  Kerr, Russell (Feltham)

  Rose, Paul

  Davies, Dr. Ernest (Slretford)

  Lawson, George

  Ross, Rt. Hn. William

  Davies, G. Elfed (Rhondda, E.)

  Leadbitter, Ted

  Rowlands, E. (Cardiff, N.)

  Davies, Harold (Leek)

  Lee, Rt. Hn. Frederick (Newton)

  Shore, Peter (Stepney)

  de Freitas, Rt. Hn. Sir Geoffrey

  Lee, Rt. Hn. Jennie (Cannock)

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

  Delargy, Hugh

  Lee, John (Reading)

  Silkin, Rt. Hn. John (Deptford)

  Dell, Edmund

  Lestor, Miss Joan

  Silkin, Hn. S. C. (Dulwich)

  Dempsey, James

  Lewis, Ron (Carlisle)

  Silver-man, Julius (Aston)

  Dewar, Donald

  Loughlin, Charles

  Skeffigton, Arthur

  Dickens, James

  Lyons, Edward (Bradford, E.)

  Slater, Joseph

  Dobson, Ray

  Mabon, Dr. J. Dickson

  Spriggs, Leslie

  Doig, Peter

  McBride, Neil

  Steele, Thomas (Dunbartonshire, W.)

  Dunn, James A.

  McCann, John

  Swain, Thomas

  Dunnett, Jack

  MacColl, James

  Swingler, Stephen

  Dunwoody, Mrs. Gwyneth (Exeter)

  McGuire, Michael

  Taverne, Dick

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

  Mackenzie, Gregor (Rutherglen)

  Tinn, James

  Edwards, Rt. Hn. Ness (Caerphilly)

  Mackie, John

  Urwin, T. W.

  Edwards, Robert (Bilston)

  Mackintosh, John P.

  Varley, Eric G.

  Ellis, John

  Maclennan, Robert

  Wairlwright, Edwin (Dearne Valley)

  English, Michael

  McNamara, J. Kevin

  Walden, Brian (All Saints)

  Ensor, David

  Macpherson, Malcolm

  Wallace, George

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

  Mahon, Peter (Preston, S.)

  1058

  1059

  Watkins, David (Consett)

  Williams, Alan Lee (Hornchurch)

  Woof, Robert

  Wellbeloved, James

  Williams, W. T. (Warrington)

  Yates, Victor

  Wells, William (Walsall, N.)

  Willis, George (Edinburgh, E.)

  Whitaker, Ben

  Wilson, William (Coventry, S.)

  TELLERS FOR THE NOES:

  Wilkins, W. A.

  Mr. Ernest Armstrong and

  Mr. Harold Walker.

  Amendment proposed: No. 4, in page 1. line 11, at end insert:
  (2) A further fifteen million pounds shall be added to the aggregate principal amount outstanding in respect of money borrowed by the Transport Holding Company by affirmative resolution of the House of Commons.—[Mr. Webster.]
  Question put, That the Amendment be made:—
  The Committee divided: Ayes 119, Noes 203.

  Division No. 47.]

  AYES

  [9.4 p.m.

  Atlason, James (Hemel Hempstead)

  Glyn, Sir Richard

  Osborn, John (Hallam)

  Baker, W. H. K.

  Coodhew, Victor

  Osborne, Sir Cyril (Louth)

  Balniel, Lord

  Gower, Raymond

  Page, Graham (Crosby)

  Bell, Ronald

  Grant, Anthony

  Page, John (Harrow, W.)

  Bennett, Dr. Reginald (Gos. & Fhm)

  Grant-Ferris, R.

  Pardoe, John

  Bessell, Peter

  Gresham Cooke, R.

  Peel, John

  Biffen, John

  Grieve, Percy

  Percival, Ian

  Biggs-Davison, John

  Griffiths, Eldon (Bu y St. Edmunds)

  Pink, R. Bonner

  Birch, Rt. Hn. Nigel

  Gurden, Harold

  Pounder, Rafton

  Boardman, Tom

  Harris, Reader (Heston)

  Powell, Rt. Hn. J. Enoch

  Bossom, Sir Clive

  Harrison, Brian (Maldon)

  Prior, J. M. L.

  Brewis, John

  Hastings, Stephen

  Ramsden, Rt. Hn. James

  Brown, Sir Edward (Bath)

  Heald, Rt. Hn. Sir Lionel

  Renton, Rt. Hn. Sir David

  Bruce-Gardyne, J.

  Heseltine, Michael

  Ridley, Hn. Nicholas

  Buck, Antony (Colchester)

  Hill, J. E. B.

  Ridsdale, Julian

  Bullus, Sir Eric

  Holland, Philip

  Rossi, Hugh (Hornsey)

  Burden, F. A.

  Hordern, Peter

  Royle, Anthony

  Carlisle, Mark

  Howell, David (Guildford)

  Sharpies, Richard

  Cary, Sir Robert

  Hunt, John

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

  Clark, Henry

  Hutchison, Michael Clark

  Silvester, Frederick

  Clegg, Walter

  Jennings, J. C. (Burton)

  Sinclair, Sir George

  Cordle, John

  Johnston, Russell (Inverness)

  Smith, John

  Corfield, F. V.

  Knight, Mrs. Jill

  Steel, David (Roxburgh)

  Costain, A. P.

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

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

  Craddock, Sir Beresford (Spelthorne)

  Lubbock, Eric

  Summers, Sir Spencer

  Cunningham, Sir Knox

  Maclean, Sir Fitzroy

  Teeling, Sir William

  Currie, G. B. H.

  McMaster, Stanley

  Tilney, John

  Dalkeith, Earl of

  Maginnis, John E.

  Turton, Rt. Hn. R. H.

  Dance, James

  Mawby, Ray

  Vaughan-Morgan, Rt. Hn. Sir John

  Dean, Paul (Somerset, N.)

  Maxwell-Hyslop, R. J.

  Vickers, Dame Joan

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

  Mills, Peter (Torrington)

  Walker, Peter (Worcester)

  Eden, Sir John

  Monro, Hector

  Walker-Smith, Rt. Hn. Sir Derek

  Elliott,R.W.(N'c'tlc-iipon Tyne.N.)

  Montcomerv. Fergus

  Webster, David

  Emery, Peter

  More, Jasper

  Whitelaw, Rt. Hn. William

  Ewing, Mrs. Winifred

  Morgan, Geraint (Denbigh)

  Wills, Sir L,eraid (tsriugwater)

  Evans, Gwynfor (C'marthen)

  Munro-Lucas-Tooth, Sir Hugh

  Wilson, Geoffrey, (Trurn)

  Eyre, Reginald

  Murton, Oscar

  Worsley, Marcus

  Fortescue, Tim

  Nabarro, Sir Gerald

  Foster, Sir John

  Nicholls, Sir Harmar

  TELLERS FOR THE AYES:

  Gilmour, Ian (Norfolk, C.)

  Nott, John

  Mr. Bernard Weatberhill and

  Glover, Sir Douglas

  Onslow, Cranley

  Mr. Humphrey Atkins

  NOES

  Albu, Austen

  Boyden, James

  Concannon, J. D.

  Allaun, Frank (Salford, E.)

  Braddock, Mrs. E. M.

  Conlan, Bernard

  Allen, Scholefield

  Bray, Dr. Jeremy

  Crawshaw, Richard

  Atkins, Ronald (Preston, N.)

  Brooks, Edwin

  Cronin, John

  Atkinson, Norman (Tottenham)

  Broughton, Dr. A. D, D.

  Crossman, Rt. Hn. Richard

  Bagier, Cordon A. T.

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

  Cullen, Mrs. Alice

  Barnett, Joel

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

  Dalyell, Tarn

  Baxter, William

  Buchan, Norman

  Darling, Rt. Hn. George

  Beaney, Alan

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

  Davidson, Arthur (Accrington)

  Benn, Rt. Anthony Wedgwood

  Butler, Mrs. Joyce (Wood Green)

  Davies, Dr. Ernest (Stretford)

  Bid well, Sydney

  Callaghan, Rt. Hn. James

  Davies, G. Elfed (Rhondda, E.)

  Binns, John

  Camtichael, Neil

  Davies, Harold (Leek)

  Bishop, E. S.

  Carter-Jones, Lewis

  de Freitas, Rt. Hn. Sir Geoffrey

  Blackburn, F.

  Castle, Rt. Hn. Barbara

  Delargy, Hugh

  Blenkinsop, Arthur

  Chapman, Donald

  Dell, Edmund

  Boardman, H.

  Coe, Denis

  Dempsey, James

  Booth, Albert

  Coleman, Donald

  Dewar, Donald

  Dickens, James

  Judd, Frank

  Padley, Walter

  Dobson, Ray

  Kenyon, Clifford

  Paget, R. T.

  Doig, Peter

  Kerr, Russell (Feltham)

  Pearson, Arthur (Pontypridd)

  Dunn, James A.

  Lawson, George

  Pentland, Norman

  Dunnett, Jack

  Leadbitter, Ted

  Perry, George H. (Nottingham, S.)

  Dunwoody, Mrs. Gwyneth (Exeter)

  Ledger, Ron

  Price, Thomas (Westhoughton)

  Dun woody, Dr. John (F'th & C'be)

  Lee, Rt. Hn. Frederick (Newton)

  Probert, Arthur

  Edwards, Rt. Hn. Ness (Caerphilly)

  Lee, Rt. Hn. Jennie (Cannock)

  Randall, Harry

  Edwards, Robert (Bilston)

  Lestor, Miss Joan

  Rees, Merlyn

  Ellis, John

  Lewis, Ron (Carlisle)

  Reynolds, G. W.

  English, Michael

  Longden, Gilbert

  Richard, Ivor

  Ensor, David

  Lyons, Edward (Bradford, E.)

  Roberts, Albert (Normanton)

  Evans, loan L. (B'rm'h'm, Yard'ey)

  Mabon, Dr. J. Dickson

  Roberts, Gwilym (Bedfordshire, S.)

  Faulds, Andrew

  MacArthur, Ian

  Robertson, John (Paisley)

  Fernyhough, E.

  McCann, John

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

  Fitch, Alan (Wigan)

  MacColl, James

  Roebuck, Roy

  Fletcher, Raymond (Ilkeston)

  Macdonald, A. H.

  Rose, Paul

  Fletcher, Ted (Darlington)

  Mackenzie, Alasdair(Ross&Crom'ty)

  Ross, Rt. Hn. William

  Foot, Michael (Ebbw Vale)

  Mackenzie, Gregor (Rutherglen)

  Shore, Peter (Stepney)

  Fowler, Gerry

  Mackintosh, John P.

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

  Fraser, John (Norwood)

  Maclennan, Robert

  Silkln, Rt, Hn. John (Deptford)

  Galpern, Sir Myer

  McNamara, J. Kevin

  Silkin, Hn. S. C. (Dulwich)

  Cardner, Tony

  MacPherson, Malcolm

  Silverman, Julius (Aston)

  Garrett, W. E.

  Mahon, Peter (Preston, S.)

  Skefflngton, Arthur

  Courlay, Hurry

  Mallalieu, E. L. (Brigg)

  Slater, Joseph

  Greenwood, Rt. Hn. Anthony

  Manuel, Archie

  Spriggs Leslie

  Gregory, Arnold

  Mapp, Charles

  Steele, Thomas (Dunbartomhire, W.)

  Grey, Charles (Durham)

  Marks, Kenneth

  Swain, Thomas

  Griffiths, David (Rather Valley)

  Marten, Neil

  Swingler, Stephen

  Griffiths, Rr. Hn. James (Llanelly)

  Millish Robert

  Taverne Dick

  Hamilton, James (Bothwell)

  Mendelson, J. J.

  Tinn, James

  Hamling, William

  Mikardo, Ian

  Urwin, T. W.

  Hannan, William

  Milne, Edward (Blyth)

  Varley, Eric G.

  Harper, Joseph

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

  Wainwright, Edwin (Dearne Valleyl)

  Harrison, Walter (Wakefleld)

  Moonman, Eric

  Walden, Brian (All Saints)

  Hart, Mrs. Judith

  Moonman, Eric

  Wallace, Geirge

  Hazell, Bert

  Morris, Alfred (Wythenshawe)

  Watkins, David (Consett)

  Heffer, Eric S.

  Morris, Charles R. (Openshaw)

  Wellbclovccl, James

  Henig, Stanley

  Murray, Albert

  Wells, William (Walsall, N.)

  Herbison, Rt. Hn. Margaret

  Neal, Harold

  Whitaker, Ben

  Hooley, Frank

  Newens, Stan

  Wilkins, W. A.

  Howarth, Harry (Wellingborough)

  Noel-Baker, Francis (Swlndon)

  Williams, Alan Lee (Hornchurch)

  Howarth, Robert (Bolton, E.)

  Norwood, Christopher

  Williams, W. T. (Warrington)

  Howell, Denis (Small Heath)

  Oakee, Gordon

  Willis, George (Edinburgh, E.)

  Hoy, James

  Ogden, Eric

  Wilson, William (Coventry, S.)

  Huckfield, Leslie

  O'Malley, Brian

  Woof, Robert

  Hughes, Emrys (Ayrshire, S.)

  Oram, Albert E.

  Yates, Victor

  Irvine, Sir Arthur

  Orbach, Maurice

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

  Orme, Stanley

  TELLERS FOR THE NOES:

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

  Oswald, Thomas

  Mr. Ernest Armstrong and

  Jones, Dan (Burnley)

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

  Mr Harold Walker.

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

  Owen, Will (Morpeth)

  Jones, T. Alec (Rhondda, West)

  Mr. Michael Heseltine: I beg to move, Amendment No. 5, in page 1, line 11, at end insert:
  (2) No part of the resources of the Transport Holding Company shall be used for the acquisition of any part of a municipal undertaking if the terms upon which such acquisition is to be concluded differ from those provided for the acquisition of municipal undertakings in Part II of the Transport Act 1968.
  The Temporary Chairman: If it suits the convenience of the Committee, we can also debate new Clause No. 2, "Buses and coaches":
  No moneys provided by this Act shall be employe I to acquire bus or coach undertakings apart from British Electric Traction and minority interests thereof.
  Mr. Heseltine: There is a difference between these two Amendments, and although they can be taken together for the purposes of debate, I should like to
  1062
  deal with them quite separately. The first Amendment has as its purpose to ensure that no municipal authority should receive terms for its bus passenger undertaking that are different from those terms provided in the Transport Bill now being considered in Committee. I do not believe that a more reasonable Amendment could be put forward.
  The second Amendment will be more controversial in that it precludes the Transport Holding Company from making any further acquisition of buses after it has completed the acquisition of B.E.T. To deal with Amendment No. 5, obviously the Minister has decided under the Transport Bill, now in Committee, that she wishes to transfer the ownership of municipal undertakings so that the passenger transport authorities should be operating authorities. This in

  1063
  itself is highly controversial and something which we are examining in Committee. She has laid down, in Clause 17 and Schedule 4 of the Bill, terms on which the municipal authorities are to have their undertakings confiscated.
  9.15 p.m.
  Basically the terms are that there is only one form of compensation available to the municipal authorities and that compensation is provided for in Clause 17(2,d). The compensation is
  ".…by way of contributions to the cost of any adjustments arising from the severance of the undertaking so mentioned from the other activities of that council."
  In other words, there is to be no compensation for the assets of the municipal authorities, there is to be no compensation for the good will, and there is to be no compensation for anything that might be regarded as the trading operation of the particular undertakings wherever they fall within a P.T.A. area.
  Sir Harmar Nicholls: It is very unfair.
  Mr. Heseltine: It is very unfair not only to Birmingham, but to all the municipal authorities who will find themselves within an area designated as a P.T.A. It is extremely unfair and it is the subject of widespread adverse comment from the municipal authorities concerned. However, those are the given terms which we are discussing in the Amendment.
  It would be possible for the National Bus Company or the Scottish group, which are constituted in Part III of the Transport Bill upstairs, to come to a conclusion with municipal authorities to take over their undertakings on different terms. It is unnecessary for me to speculate about the occasions upon which such negotiations could go on between the National Bus Company and some other undertakings. We are here to consider the principle of the matter and it is unnecessary to grub around looking for practical examples. The fact of the matter is that there is nothing to prevent the Transport Holding Company, as it is today, or the National Bus Company, as it will one day be constituted, coming to an agreement with municipal authorities to take over their undertakings on terms substantially or totally different from those laid down in Clause 17 of the Transport Bill upstairs. I cannot believe that the Ministry of Transport intends that to be the case.
  1064
  The Amendment I am moving is so reasonable and so much in accord with common sense that it must be acceptable to the right hon. Lady and her friends. The Amendment would probably never have been needed to be moved had it not been for the Parliamentary Secretary's answers to my hon. Friends when they questioned him about this matter on Second Reading. I refer the Committee to what the Parliamentary Secretary said in reply to the question about the sort of terms it would be possible for an authority outside a P.T.A. to get and whether those terms would be different from those which had been given to local authorities within a P.T.A. area. I will read his reply—
  Mr. Manuel: On a point of order. The hon. Member for Tavistock (Mr. Michael Heseltine) in moving the Amendment has indicated that the intention is to guard against something laid down in Clause 17 of the Transport Bill now before Standing Committee F upstairs. We have not arrived at Clause 17. That Clause could be amended. We have no idea how it will finally be set out when the Committee comes to its decision for recommendation to the House. I wonder whether this is in order, because a different conclusion could be arrived at in Committee.
  The Chairman: The hon. Member has made a valid point which can be raised in debate. He is not out of order, in discussing the Amendment, in referring to a section in another Bill now in Committee which may or may not be passed in that form. So far as it is relevant to the Amendment we are now discussing, reference can be made to it.
  Sir Harmar Nicholls: On a point of order. Sir Eric, you said that a relevant point had been made by the hon. Gentleman. I do not think that that Committee can be inhibited from doing its duty by the thinking of my hon. Friend and others in tabling this Amendment. If the point made by the hon. Member for Central Ayrshire (Mr. Manuel) is valid, it means there is some suggestion that we are inhibiting it in some way.
  The Chairman: Order. I said that the point raised by the hon. Member for Central Ayrshire (Mr. Manuel) was a valid one for him to make in the debate

  1065
  on the Amendment. He can draw attention to the fact that Clause 17 has not been reached in Committee upstairs, but it is in order to discuss its relevance to the Amendment.
  Mr. Heseltine: The hon. Member for Central Ayrshire has introduced the most optimistic note that I have heard in this entire debate. He has suggested that it is conceivable that the Minister will accept an Amendment to the Transport Bill. As we have been labouring—
  The Chairman: Order. We cannot discuss what might happen with regard to the Transport Bill. All that is in order is to refer to the fact that there is that Clause in the other Bill.
  Mr. Heseltine: I apologise, and I shall leave that subject at once.
  I was going on to quote from the speech of the Joint Parliamentary Secretary to show why we on this side of the Committee felt it necessary to table the Amendment. It was because of a reply givenü by the hon. Gentleman when he was asked whether there was any possibility of a municipal authority coming to a commercial arrangement with the T.H.C. or the National Bus Company on terms which differed from Clause 17 of the Transport Bill. He said:
  "I should like to be able to give a 'yes' or 'no' answer, but there is no such thing as a 'yes' or 'no' answer to a great many questions. All politicians know that it is infantile to suggest giving a 'yes' or 'no' answer to many questions."—[OFFICIAL REPORT. 16th January, 1968; Vol. 756, c. 1733.]
  It is not possible for us to have a categorical assurance, but I hope that tonight the hon. Gentleman will give an assurance by accepting the Amendment, because the reply to which I have referred has given rise to a real element of doubt. If the doubt can be cleared up, the Amendment will not be pressed.
  The doubt must be cleared up, otherwise the Minister will be saying that she is prepared to legislate for a situation in which it will be possible to agree to, or authorise, or at least approve in the background, two different sets of negotiations being carried on. First, the expropriation of local authority undertakings, with no compensation wherever a P.T.A. area is designated, and the other where the National Bus Company, or the
  1066
  Scottish group, comes to a different commercial arrangement with a municipal authority outside a P.T.A. area. I cannot believe that any hon. Member would be prepared to vote for legislation which could, in effect, differentiate between the terms available to local authorities in his constituency and local authorities in other parts of the country. The Amendment seeks to avoid that differentiation.
  Mr. Peter Mahon: Many local authorities regard their transport undertakings as an absolute headache, and in every sense a liability. They are answerable to their ratepayers, and often they cannot face their responsibilities in anything like an adequate manner because of the difficulties in dealing with their transport undertakings. I believe that the word "expropriation" would not arise in many of these cases.
  Mrs. Knight Mrs. Knight rose—
  The Chairman: Order. We cannot have an intervention on an intervention.
  Mr. Heseltine: In view of what the hon. Gentleman has just said, no doubt he will have no difficulty in following me into the Lobby. If local authorities are so passionately inclined to dispose of their undertakings, they will find it easy to accept the terms of Clause 17(2) of the Transport Bill. The hon. Gentleman made the point graphically. He said that local authorities found that their transport undertakings were a headache, and a continuing liability. Surely they will flock to get rid of them on any terms. The Amendment says:
  "No part of the resources of the Transport Holding Company shall be used for the acquisition of any part of a municipal undertaking if the terms upon which such acquisition is to be concluded differ from those provided for the acquisition of municipal undertakings in Part II of the Transport Act 1968."
  Those terms take over any outstanding liability of the undertaking, and pay no compensation. It would be inconveivable for a municipal authority with feelings as described by the hon. Member to object to those terms.
  Let us consider the matter from the opposite angle. Let us consider a situation in which a municipal authority digs in and says, "Under no circumstances are we prepared to give up our undertaking. It is very valuable. It has immense property assets. It has interests of one sort

  1067
  and another, and the separation activities of moving ourselves from our offices in order to hand them over to a passenger transport authority would be totally unacceptable." It might kick up quite a row. Let us also assume that there are three major Labour marginal seats surrounding the area of this local authority, which would mean that the Ministers were under great pressure not to take over the authority's undertaking. Unless the Amendment were agreed to it would be possible for the Minister to send her minions from the holding company or the bus company to do a quite different deal with the local authority.
  I do not suggest that the Ministry of Transport is plotting this type of activity; I merely say that it is technically possible for such a thing to happen, and it cannot be the wish of the Committee that it should be technically possible. In those circumstances the Parliamentary Secretary would not be placed in any embarrassing situation in agreeing that no municipal authority can do a better deal with the holding company or the bus company than with the Passenger Transport Authority as provided for in the Transport Bill. I hope that the Minister will accept the Amendment in the spirit in which it is moved, because it is extremely useful.
  Coupled with this Amendment is the proposed new Clause 2, which makes a different suggestion. I am sure that from the point of view of hon. Members opposite it is less acceptable. It provides that
  "No moneys provided by this Act shall be employed to acquire bus or coach undertakings apart from British Electric Traction and minority interests thereof."
  We say that if this borrowing power is sanctioned a line should be drawn—that enough is enough, and that unless a specific case can be proved there is no purpose—now that the State has scooped the pool and will have accumulated within its orbit 25,000 buses, virtually carrying all stage passenger traffic—in continuing its acquisition of privately-owned companies.
  It would be possible for us to argue that there is no need for the State to have spent a penny piece in acquiring any buses. The purpose for which these buses are being acquired is, ostensibly, to bring about reorganisation of pas-
  1068
  senger transport within the great cities. The Ministry will know that its plans, and the means by which it intends to carry them out, have met with nothing but united hostility throughout the land. The Ministry cannot call in aid a single reputable professional organisation involved in transport which believes that the scheme that the Ministry is imposing is the right scheme.
  There is no need for the Ministry to continue to buy up the ownership of buses. Everybody accepts that there is a need for rationalisation, reorganisation and co-ordination, but it is clear that everybody that the Ministry has consulted—if it is not so the right hon. Lady must produce some evidence to the contrary— has made it abundantly clear that the Ministry needed to take over the ownership of not a single bus in order to achieve the ends it had in mind.
  What is needed is to continue the trend in our big cities of co-ordinating and consultative committees, and to give the Traffic Commissioners powers to arbitrate, in the event of the imposition of plans prepared by those bodies, between the conflicting interests, to achieve coordination and rationalisation. That would have cost nothing, but it would have achieved, without this controversy and immense Parliamentary programme, the ostensible results which the Minister says she wants.
  9.30 p.m.
  I have doubts whether those are the results which she wants. I believe that she wants ownership of the buses and that it is as simple as that. But she has said that she wants to co-ordinate passenger transport in the big cities. Now, against the professional advice of everyone in transport, she has come close to achieving the dream of hon. Members opposite, which was frustrated 20 years ago, of taking into public ownership the operations of buses in stage services. By the ownership of B.E.T., she will have done just that.
  But there is no need to go further. The right hon. Lady has achieved what she set out to do. We can now see no cause for spending yet more money, with all the disadvantages which we have described, to mop up the few independent companies left. I ask the Parliamentary Secretary to search his soul about the

  1069
  reasons why neither he nor the Minister of State—he knows that the same is true in Standing Committee—whenever we ask for justification of this wanton spreading of public largesse, for fact and figure about the benefits which will follow, ever gives it—
  Dr. Dickson Mabon: Oh.
  Mr. Heseltine: The hon. Gentleman knows that there has been no attempt to justify the change of ownership. I ask the Parliamentary Secretary to do so tonight—not with any great optimism, because I have been asking this for many months, and although I am told how reasonable it is, no Minister goes further than saying that the case is proved and they know what they want to achieve.
  When it comes to examining in detail the benefits of a change of ownership, all the arguments are against it. All the benefits would be achieved much better if it were left in the present disparate ownership, and the Ministry knows it—
  Dr. Dickson Mabon Dr. Dickson Mabon indicated dissent.
  Mr. Heseltine: The hon. Gentleman should not shake his head. If he can produce any evidence, let us have it. That is what the Committee is here for. If there is any evidence, why do we not get it, now or in the Standing Committee? I know why and the hon. Member knows why: there is not a shred of professional testimony on his side. That is the reason for the overwhelming silence of his spokesmen whenever we discuss this matter.
  Anyway, we accept that it looks as though we will buy out, on behalf of our citizens, B.E.T. The offer has been made and accepted, so we are now giving hon. Members opposite another chance to prove what they have always said. Surely it is reasonable that, now that they have taken 85 per cent. of all the carriage services, they should call a halt and, perhaps in six or twelve months, produce detailed results from their management of those buses to show that all the generalised phrases which we have heard so much for so long are justified.
  I would have thought that the Parliamentary Secretary would be springing to that Box and saying, "That is a reasonable challenge. We have 85 per cent. of the buses. We know how we will operate and reorganise them. Give us
  1070
  the chance and we will prove it. We will rest on our laurels and account for our stewardship."That is what I would say in his place.
  I sympathise with the hon. Gentleman here, because everyone knows that it does not matter what he or the Minister of State thinks or says. The conviction behind this whole scheme is that of the Minister herself. She believes in it, and I am sure that she is off now plotting some further extension of her powers. How much better it would be if she were here to justify the purposes of the Bill. Of course, even if she were here, we know from past experience, and those who have consulted her know from past experience, that she has no factual justification for her actions. There was a tragic delegation which went to the Ministry of Transport to see the Minister of State. At the end of a long series of discussions the Minister of State shrugged his shoulders and said, "I am sorry. The Minister had made up her mind".
  That is the secret of this proliferation of legislation aimed at securing ownership of the buses. The Minister took the decision a year ago before she went through the fantasy of consultation up and down the land. Embodied in the Bill we have this expensive doctrinaire attitude. I could forgive that if there were a shred of evidence that it would work in practice or any factual basis for the proposals.
  I move with some conviction that we should not continue the acquisition of further interests because I know that it is not a party political point. [HoN. MEMBERS: "Oh."] Hon. Members opposite are so mesmerised by their doctrinaire infallibility that they believe that there is a great army of professional evidence on their side. Can they tell me why I have been on my feet for a quarter of an hour [HON. MEMBERS: "No."]—without so much as a peep from the Joint Parliamentary Secretary when I challenged him?
  Let me conclude with a final challenge. If there is some professional organisation which they can call in aid or one independent arbiter who has advocated their plans, let them say so.
  Mr. Russell Kerr: The Road Hauliers' Association.
  Mr. Heseltine: We move from the sublime to the ridiculous. If the hon. Member reads "Roadway" as carefully as I do, or if he has had as many consultations with the Association as I have had, he will know that their views on the Transport Bill make mine appear very moderate.
  If the Minister can say that there is one professional organisation which they can call in aid or one set of facts on which they base their argument, at least we shall believe that the Minister of State has done his homework. He knows, I know, and the Committee very shortly will know, that there is not a shred of hope that they will be able to produce such an argument—not one. Because not one exists.
  Mr. Manuel: I am interested in the Amendment. The hon. Member for Tavistock (Mr. Michael Heseltine) went to great lengths to try to prove that if we accepted Clause 17 of the Transport Bill we should do a great injustice to local authorities which have transport undertakings, for we should take them over. I do not know whether he has been in local government. Many hon. Members have been in local government and know that under many Acts of Parliament various municipal undertakings have passed to a wider control. These were Acts passed by various Governments of different political colours. The Gas Bill will be fresh in hon. Members' minds. Electricity undertakings were taken over from municipal authorities. The hon. Member said that, willy-nilly—
  Mr. J. T. Price: Who is he?
  Mr. Manuel: This is a serious debate. The hon. Member for Tavistock said that assets would be lost. Whether in the gas or electricity industries, the debits and assets of municipalities in these undertakings were taken over when nationalisation occurred. This was, and is, common form. Naturally, when areas had private undertakings, as occurred in parts of the country, they received compensation. But municipal undertakings have always been dealt with differently. The same applied when we took over the hospital services; and hon. Gentlemen opposite will agree that there was a vast improvement compared with the charity boxes which were shaken round our cities two or three times
  1072
  a year to provide the finance to run the hospitals.
  While the hon. Member for Tavistock may call in aid various professional bodies, we accept that he and some of his hon. Friends are tied to road haulage undertakings, as they are to other people in the country—[Interruption.]—tied hand and foot and that these people are kind to them at election time. We know the history of this.
  Mr. Webster Mr. Webster rose—
  Mr. Manuel: Let me finish.
  Mr. Webster: Will the hon. Gentleman withdraw?
  Mr. Manuel: Withdraw what?
  Mr. Webster: On a point of order. The hon. Gentleman alleged that my hon. Friend the Member for Tavistock (Mr. Michael Heseltine) is being financially assisted by some of these undertakings.
  Mr. Manuel: I did not.
  Mr. Webster: Will he state clearly what he meant?
  Mr. Manuel: I said that the hon. Gentleman was very close to them and that they were very kind to his party. I did not mention finance. It is not bad to be kind to one another.
  Mrs. Knight Mrs. Knight rose—
  Mr. Manuel: I always give way to a lady.
  Mrs. Knight: If the hon. Gentleman did not mean that such associations or organisations have been kind in a financial way, would he say in which way they have been of assistance to my hon. Friend?
  Mr. Manuel: The hon. Lady is usually as bright as a bee. We do not normally have to explain things so carefully to her. I said that the hon. Member for Tavistock could call various professional bodies in aid, that some of these bodies were possibly tied to road haulage undertakings, that they provide professional services for them, are perhaps employed by them, and that, therefore, they should try to put as good a case as possible on their behalf in circumstances such as this.
  Mr. Michael Heseltine: I had in mind two sets of people who were totally opposed to these proposals. The first was the Association of Municipal Corporations, which is against this ownership being transferred, and the second were the four main cities in the areas which are to be designated as P.T.A.s. These have nothing to do with the road haulage industry, as the hon. Gentleman well knows, but are opposed to the Bill.
  Mr. Manuel: The hon. Gentleman has given two examples. I thought that he had a list as long as one's arm.
  Mr. Heseltine: Shall I go on giving examples?
  Mr. Manuel: The two examples he gave are English-based. My knowledge of local government is in Scotland. If he wants to quote examples to me, he will prove his case better by giving better examples. The four conurbations which will be passenger transport authorities mentioned by the hon. Gentleman are in England. He can call those English bodies in aid if he wishes, but he will not ring a bell with me by doing so. By this Measure we are trying to provide a better, integrated transport service within those and other conurbations so that the needs of the people are met.
  We do not want buses running without any regard to other forms of transport. We want to avoid the queuing and all the rest of it that we see in the large cities, together with terrific congestion in the streets. That is what the Bill is about, and it is conditions such as I have mentioned that we shall try to alter. No matter what vested interest comes up against us, seeking to delay us and get us to move aside from that principle, we shall fight it as hard as we can. That is my sincere belief.
  9.45 p.m.
  The hon. Gentleman also spoke of taking over the operation of the buses. I do not know whether or not he was referring to the bus companies, but these buses within the conurbations—and the same will apply to the railways, and to the underground systems, if they are there—will all come within the orbit of the passenger transport authority. That is what we want, and that is why we are trying to batter in as much education as we can in the Standing Committee in
  1074
  order to take hon Gentlemen with us, and away from their belief in a complete profit motive being the mainspring of service to the people in those areas.
  That is common sense, and every transport authority that has written on the subject has said that an integrated transport system is necessary in those areas. The hon. Gentleman agrees with me—I have won him over on that. But he never agrees that a passenger transport authority is good. I believe that this step will save many lives and street accidents, and will enable us to avoid much of the present congestion in our city streets.
  I would go much further than my right hon. Friend the Minister of Transport, because I would see to it that heavy vehicular traffic did not use our city streets at all during the daytime—
  The Chairman: I am afraid that the hon. Gentleman must confine himself to the Amendment.
  Mr. Manuel: I am sorry, Sir Eric, if I am straying, but I thought that in dealing with points raised by the hon. Gentleman opposite I was completely within the rules of order. He dealt with buses in the conurbations, and Amendment No. 5 is about municipally owned buses within our large cities. I draw attention to the fact that in many areas the need is to take over buses that are not within the conurbation.
  We already have a situation in Scotland where, because of the scarcity of population and the inaccessibility of areas and the routes within them, the services are unprofitable, but we have always supported the principle that those services should be subsidised. In some places it is done by running the whole concern, and in others, such as MacBrayne's coastal shipping and bus services on the west coast of Scotland a very heavy yearly subsidy is paid. That is sane transport in operation. Without it, the people there would be denuded of transport altogether. So it is not just a question of taking over the buses.
  The hon. Gentleman has been to great lengths to try to inform the Committee that because of powers which the Minister of Transport will give them, the passenger transport authorities, will take over from the local authorities, but if hon. Members will just read the Transport Bill they will see that each of the

  1075
  authorities that is to be formed and given power to operate, co-ordinate and integrate the services within the conurbation is to be dominated by representatives of the local authorities. They will be in the majority. It is very necessary when we have the sort of propaganda we have been receiving from hon. Members opposite, which is misleading the people—
  Sir Harmar Nicholls: On a point of order, Sir Eric. I have been looking carefully at the new Amendment and the new Clause and I find that this argument has nothing whatever to do with either.
  The Chairman: I will stop the hon. Member when I think he is out of order.
  Mr. Manuel: The point made that the Minister will take them over is not a real one because she has laid down in the Bill that the majority of members of the authorities running these services will be local authority members. There will also be members representing skills and professions necessary to ensure that there is a good service. People in the country will not worry about the professional organisations. They will use their common sense and will recognise that we are bringing something into being which has been needed for a very long time. I believe the people will give us the support we need to make that an accomplished fact.
  Mr. R. W. Elliott: The hon. Member for Central Ayrshire (Mr. Manuel) quite rightly said that Amendment No. 5 has to do with the taking over of municipal authority transport concerns. He also said that the people will recognise that something is being done to their advantage. I rise in the name of the ratepayers of Newcastle-upon-Tyne, a section of which city I am proud to represent, to assure the hon. Member, the Parliamentary Secretary and the Minister that the ratepayers of Newcastle-upon-Tyne do not see this piece of legislation as something which is to their advantage.
  I have had a form of plebiscite taken and I have had an enormous number of letters from people in the constituency. I have had a great deal of support for the suggestion that this legislation is wrong and extremely expensive. I sup-
  1076
  port my hon. Friend the Member for Tavistock (Mr. Michael Heseltine) who said that this legislation is doctrinaire. I agree wholeheartedly. The hon. Member for Central Ayrshire said that it was something for which people had been longing. I can assure him that the Newcastle Corporation transport undertaking, which started in 1901, has served the city extremely well for 67 years. It has not been and is not at this moment a burden on the rates of the city, but, because the city is designated as a public transport authority area, we are to suffer from this legislation.
  This legislation means that the ratepayers of Newcastle-upon-Tyne are to lose to the new authority an asset worth£3 million. Does the hon. Member for Central Ayrshire imagine that Newcastle ratepayers rejoice about that? If so, he had better come and talk to them—or rather, he had better come there so that they can talk to him. This undertaking has never been a burden on the rates, but we are asked to give it up without a penny of compensation. This is one of the greatest public disgraces of the century. In the name of the ratepayers I represent, I object most strongly.
  We are being asked to bear the ever-increasing losses of suburban railway lines. This is a very bad Bill for the ratepayers of Newcastle-upon-Tyne. I end my support for the Amendment by quoting the Labour Party 1964 Election Manifesto, which said that Labour would
  "seek to give early relief to ratepayers by transferring a larger part of the burden of public expenditure from the local authorities to the Exchequer."
  This proposal somewhat conflicts with that promise.
  Mr. Julius Silverman: How much relief have the ratepayers of Newcastle had from their transport undertaking?
  Mr. Elliott: I repeat that the Newcastle-upon-Tyne Corporation's transport undertaking does not at this time impose any burden on the ratepayers and that under the terms of the Bill the ratepayers will lose an asset worth£3 million.
  Mr. Hugh D. Brown: This has been an interesting debate. The hon. Member for Tavistock (Mr. Michael Heseltine) has demonstrated to me that being at the Dispatch

  1077
  Box does something to some people. He appeared to be so carried away by his own eloquence that he did not know, and certainly did not believe in, half of what he was saying. I was surprised at his extravagant language, including nouns such as "expropriation" and "confiscation ". He said that the powers of the Holding Company to acquire and to negotiate were unfair and that there had been widespread adverse comment on it.
  It is time that someone put a more balanced point of view, because that is the sort of propaganda rubbish which we hear from Members such as the hon. Member for Newcastle-upon-Tyne (Mr. R. W. Elliott), who said that a valuable asset was being taken from the ratepayers of Newcastle-upon-Tyne. The case of Birmingham, for example, should be put. The fact is that the municipal undertaking has contributed nothing to the ratepayers; it has provided a service. The hon. Gentleman should not create the impression that something is being taken from the ratepayers. Although it is not a burden on the rates, it has never contributed to them. It is a dishonest way of presenting an argument when hon. Members opposite try to create the scare of "Bloody Barbara" who has some wicked Left-wing plot to confiscate a service.
  Mr. Michael Heseltine: What the hon. Gentleman says about Birmingham may well be true, but he will know that in the conurbations there are numerous smaller local authorities which have operating agreements with the private companies which the Bill is now buying up. Those private companies make a contribution which goes into the rate fund and saves the ratepayers money.
  Mr. Brown: I would not dispute that. I do not know it. I suggest, however, that it is a minor and marginal point arising from special local circumstances and that it does not affect the main argument. The financial set-up of municipal undertakings varies. I would not presume to speak about Birmingham or about Newcastle, but I know a little about Glasgow. The factors vary due to traffic and geographical circumstances, but the basic proposition is sound that no municipal undertaking contributes anything to the rates. In Scotland they
  1078
  are trading departments which have to wash their faces year by year in financial terms. They have no assistance from the rates and are no burden on ratepayers; but they contribute nothing to the ratepayers. I welcome this part of the Bill for its effect in Scotland. It is an excellent thing. [Interruption.] If hon. Members will make jokes and interrupt, I hope that they will at least do so loud enough for me to hear.
  Mr. Bessell: Of course Glasgow welcomes it—
  It being Ten o'clock, The CHAIRMAN left the Chair to report Progress and ask leave to sit again.
  Committee report Progress.

  BUSINESS OF THE HOUSE
  Ordered,
  That the Proceedings on the Transport Holding Company Bill may be entered upon and proceeded with at this day's Sitting at any hour, though opposed.—[Mr. Harper.]

  TRANSPORT HOLDING COMPANY BILL
  Again considered in Committee.
  Question again proposed,t the Amendment be made.
  Mr. Bessell: I was about to say to the hon. Member that of course Glasgow welcomes this. Glasgow is the one city which will receive compensation. Birmingham will not, and that is why Birmingham does not welcome it. There is a great difference between the position of the two cities.
  Mr. Brown: The hon. Gentleman should not presume to talk about Glasgow, because this is the first time that I have heard that it will receive any compensation. [Interruption.] All right. If we get something, we are grateful. But it is certainly not on the cards at present.
  I am sorry to use a constituency illustration to deal with the main argument, but it is useful. In my constituency, which is on the periphery of the city, transport services are provided by municipal transport, two companies within the Scottish Omnibus Group, and British Rail. Whatever the argument for the

  1079
  financial arrangements we are discussing, the case is made for some form of integration or co-ordination. Hon. Members opposite apparently do not dispute that. In that kind of set up it makes sound common business sense for the undertakings to be in one group; that will enable us to provide a better service. At present, Glasgow Corporation is negotiating to hand over the municipal undertaking to the Scottish Omnibus Group, and the idea has received general support in the city. Unlike other cities, Glasgow has no political bias about the handing over of a municipal undertaking to another authority.
  Therefore, with or without compensation, Glasgow has taken a decision which, in its opinion, will lead to a better and more efficient transport service. For the life of me, I cannot understand all the spurious opposition to something which, in a city like Glasgow, we have already decided is desirable. The terms of compensation were examined just as in the taking over of gas, electricity, hospitals and other services. The services are still being provided, and that is what matters. We are satisfied that the arrangement will give us not only more local control but more Scottish control over a service which is basic to the community. For these reasons, I am satisfied that the citizens of Glasgow will welcome it, with or without compensation.
  Mr. W. H. K. Baker: I am glad to follow the hon. Member for Glasgow, Provan (Mr. Hugh D. Brown), but I am sure that he will forgive me if I do not follow him up and down Sauchiehall Street. I wish to address my remarks to new Clause 2, which was so ably referred to by my hon. Friend the Member for Tavistock (Mr. Michael Heseltine).
  I represent a remote constituency, an area suffering from depopulation and, more recently, the threat of railway closure. We are awaiting at the moment an announcement that the loop lines in my constituency will be closed. Tomorrow the Traffic Commissioners are sitting in Keith to hear applications for licensing for alternative bus routes when the lines are closed. In such a rural area as I represent, with a sparse population and long distances between towns and villages, it is essential to have good
  1080
  communications not only for the local residents but for the school children, and particularly the secondary school children, who have long distances to travel to and from school. This is emphasised by the constant centralisation of secondary education in the larger towns. Although I am speaking of my constituency, this applies to many other constituencies in Scotland.
  I am delighted to see on the Government Front Bench the Minister of State, Scottish Office—
  Mr. J. T. Price: On a point of order, Sir Eric. May I inquire whether we are still discussing Amendment No. 5, in Clause 1, page 1, line 11, because I have heard nothing in the last five minutes to do with the Amendment, and it is still going on?
  The Chairman: At the moment we are discussing Amendment No. 5 together with new Clause 2. I am bound to say that I was waiting to see whether the hon. Member for Banff (Mr. Baker) was going to apply what he has so far been saying to either the Amendment or the new Clause.
  Mr. Baker: I was about to come to the point, Sir Eric. I was saying that I am delighted to see the Minister of State sitting on the Government Front Bench because he knows a little of the problems that we have to face.
  My main point is that I want to know whether we shall see as a result of the acquisition of bus or coach undertakings by the Transport Holding Company an improvement in bus or coach communications in an area such as I represent. I should like to know what improvements the Government visualise as a result of the Bill. If it were not for the fact that buses and coaches were employed by the local education authority in my constituency to take children to and from school, and if it were not for partial subsidising of those routes, the private operators would have to close down. I admit that. But I cannot see that if they are acquired by the Transport Holding Company we shall get more efficient communications. If that were so, I should be prepared to vote against the Amendment and in favour of the Government's proposition. I hope that the Joint Under-Secretary will be able to tell us in categorical terms

  1081
  exactly what improvements we may hope for in the rural areas.
  In the summer when the coaches to which I have referred are not being used to transport children to and from school they cope to a great extent with tourists who come into the county. The coaches are used for sightseeing tours, and the sights are well worth seeing. The scenery in Upper Banffshire and the Cairngorms is well worth seeing. When we can get more tourists there we shall be better off in the remote areas. I should like to know whether, if these coaches are nationalised, we shall get better facilities for tourism.
  The Minister of State appears to nod his head. I should like to hear from him or his hon. Friend how the position will be improved. These buses are operated by small private operators. When they are nationalised, will we see a sign outside the depot, "See Banffshire in Barbara's buses"? Will that attract more tourists? Do not forget the repercussions throughout the country on more and better tourism. Will we see more tourists flocking into the County of Banff as a consequence? I wish I could believe that it was true. I hope that the hon. Gentleman will tell us what benefits will accrue to such areas as my constituency.
  The Chairman: Mr. Mapp.
  Mr. Ted Leadbitter: On a point of order, Sir Eric. During his latter remarks on new Clause 2, the hon. Member for Tavistock (Mr. Michael Heseltine) made a statement challenging the Government Front Bench and comparing the nature of the acquisition of B.E.T. with an anomaly, as he tried to describe it, in the method adopted in Standing Committee F concerning the P.T.A.s. The hon. Member said that the A.M.C.—he used the word "Council" rather than "Corporation"—was totally against it.
  For the record—and this is the nature of my point of order, Sir Eric—
  The Chairman: Order. I do not think that the hon. Member is rising to a point of order. He may be indicating something that he wants to say in debate, but he should say it during the course of debate when he catches my eye.
  Mr. Leadbitter: With respect, Sir Eric, this is a point of order. The minutes of the general purposes committee—
  The Chairman: Order. It is not a point of order to make a correction in what other hon. Members have said. The hon. Member can make a speech about it later.
  Mr. Leadbitter: I will make the point later, Sir Eric.
  Mr. Charles Mapp: I was rather pleased with the contribution of the hon. Member for Banff (Mr. Baker). Behind all the funny words that we have heard from the Opposition Front Bench, the hon. Member has discerned that the Clause seeks to prevent the Transport Holding Company from buying, in whatever set of circumstances may be the cause, some of the local bus companies which may fail for all sorts of legitimate reasons. If they fail—and fail they do, unfortunately—there would be no undertaking with a public conscience such as the Transport Holding Company which would be in a position to buy them up and provide the kind of service that the hon. Member had in mind. That was the main reason why I would object to the new Clause.
  The combined Liberal and Tory Parties on the benches opposite have not done their homework on the new Clause. What they are doing in 1968 is disowning the work of the right hon. Member for Wallasey (Mr. Marples) in 1962. He it was who put together the 1962 Act, when, for the first time, we had from the party opposite, who then occupied this side of the House, the Transport Holding Company. As we know, the then Tory Government within their Act gave the Transport Holding Company financial facilities with which to do its work. In those days, no one in the party opposite took exception to the Transport Holding Company having such powers of finance to do its job. In the meantime, the Transport Holding Company has in various ways been doing exactly that.
  The Tory Party, in failing to do their homework, say, in effect, in the new Clause that the Transport Holding Company must not acquire any further bus or coach undertakings except from British Electric Traction. I wonder whether hon. Gentlemen opposite, particularly the

  1083
  Front Bench, have looked at the Bill, especially Clause 1(2). It will be seen that the other side has accepted the implications of the work of the right hon. Member for Wallasey in the early days. This subsection says that there appears to have been some doubt recently as to whether the Transport Holding Company should have been making these acquisitions over a period of time.
  10.15 p.m.
  The only Amendment in the combined names of Tory and Liberal Members is to the effect that the company can do it in future but not in a retrospective sense. In principle the party opposite is disowning the work of its own Government of 1962 which clothed the Transport Holding Company with the necessary financial flexibility to do its job. In 1968 it is conducting a campaign up and down the country. The hon. Member for Tavistock (Mr. Michael Heseltine) has been in Manchester learning about things there. He did not know where the place was, I do not suppose, until a few months ago.
  He would not know who these people were, but I know these authorities in the Manchester area. He will be very happy because, perhaps for a time, we have a Tory chairman of Manchester City Council. This is not the case in many of the other local authorities in the area. He asked whether there was any evidence of any professional opinion on this point. I happened to be addressing a body of 30 professional and technical staff employed by London Underground recently. This perhaps would not be accepted by hon. Members opposite as being a body representing people knowing anything about this subject. We were discussing the technicalities of running overhead and underground railways systems. These people did not share all these professional views that I have heard tonight from the other side. The fact is that there is a mass canvass going on, which has so far not got off the ground. It is unlikely to get off the ground and it is a pity, for the sake of the party opposite, that it will not do so.
  Mr. Leadbitter: I only want to make one point. I repeat that the hon. Member for Tavistock (Mr. Michael Heseltine) in making the general comparison between
  1084
  the method of acquisition here of B.E.T. and referring to the matters upstairs in Part II of the Transport Bill challenged our Front Bench, saying that there was not one scrap of evidence to support what was being done. He later said that the A.M.C. was totally against this. I have before me the Minutes of the General Purposes Committee of the A.M.C. dated January, 1968, from the reports of Committees of the Association of Municipal Corporations. Following a suggestion made by the Passenger Transport Association that steps should be taken to indicate dissent to the Minister about her proposals the Minute says:
  "Our attitude remains that, fundamentally, the establishment of passenger transport authorities should await the reorganisation of local government…".
  The first point is that it is not against the P.T.A.s. Further down this is what the Minute says:
  "Acknowledging, however, that firm steps need urgently to be taken to deal with the traffic problems of the conurbations, we consider that the Association would not wish to oppose the setting up of passenger transport authorities as bodies representative of local authorities and transport operators…".
  That is the evidence. What I am suggesting here, in bringing this matter to the attention of the House, is that the hon. Member, although not intentionally, has succeeded in misleading the Committee, because there was evidence in support of the Minister's case.
  Mr. Michael Heseltine: I was mentioning that the A.M.C. is totally against some aspects of the P.T.A. proposals. I referred specifically to the operating concept of the P.T.A. proposals. I am grateful to the hon. Member for The Hartlepools (Mr. Leadbitter) who has specific problems with this Bill. I realise that the Labour-controlled council in his constituency has sent him to the Ministry of Transport to ask for Amendments to the Bill. I appreciate that he has problems.
  I would add slightly to the knowledge of the Committee by quoting even more from the particular report which the hon. Gentleman was waving. It says, that is the A.M.C.
  "…has indicated opposition to the proposals for the immediate transfer of local authority undertakings to the P.T.A.s. It has been contended that they should remain with existing operators…".

  1085
  The Amendment is about ownership of buses. We all agree that some sort of co-ordinating Passenger Transport Authority is a good thing. My right hon. Friend the Member for Wallasey (Mr. Marples) set up the Land Use Transportation Study in the West Midlands, the forerunner of all this centralisation and co-ordination within the great conurbations, as hon. Members opposite know. We are not talking about the co-ordinating function of P.T.A.s. We are talking about ownership, and it is ownership that the A.M.C. has specifically come out against. The hon. Member for The Hartlepools has the quotation and we mentioned it upstairs in Standing Committee F. I in no way misled the Committee. I quoted exactly the views of the A.M.C. and the hon. Gentleman knows it. If he wants further evidence of what they are let him go back to The Hartlepools and ask his own council.
  Mr. Leadbitter: I have two points. Earlier, on a point of order, when I indicated I was going to refer to the minutes of the A.M.C., the hon. Member for Worcester (Mr. Peter Walker), the chief spokesman on the Bill upstairs, rushed out to get his own quotation from the minutes of the meeting last week. What he did not say upstairs and what the hon. Member for Tavistock (Mr. Michael Heseltine) has not said here, is that that quotation is taken from a passage in the minutes which refers to a period in July last year. The minute I have read deals with the consequent considerations of the A.M.C.
  On the question of The Hartlepools constituency—
  Mr. Michael Heseltine Mr. Michael Heseltine rose—
  Mr. Leadbitter: I will give way when I have dealt with the hon. Gentleman's two points. Concerning The Hartlepools constituency, it is the opinion of the Council that it should support the Bill, and it supports Part II. However, because it is a Bill involving an operating changing the complex of transport, it is proper that a responsible authority should seek to amend it in order to improve it. That is what I am seeking to do and I hope I have the co-operation of the Minister.
  Mr. Carmichael: Again, we have had a long discussion on these Amendments. I should like to start by referring to the
  1086
  quotations made by the hon. Member for Tavistock (Mr. Michael Heseltine) referring to what I had said on Second Reading on 16th January. It is true that I said:
  "I should like to be able to give a 'yes' or 'no' answer",
  but the hon. Member was less than fair. I am sure he did not realise, but had he looked back to the answer I gave to him and to the hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor) he would have seen that I made it clear that Glasgow would not be given any consideration greater than that of any other area which would be taken in on the basis of the passenger transport authority. I said:
  "Glasgow will not have any special edge on anywhere else. It is important to realise that the Company and Glasgow Corporation are also aware of the Transport Bill and what it involves. It would do them less than justice to suggest otherwise."—[OFFICIAL REPORT, 16th January 1968; Vol. 756, c. 1733.]
  That is a fuller quotation of what I said, and I stand by it with regard to Amendment No. 5. Glasgow will be in the same position as any other local authority in a P.T.A.
  The real problem is that hon. Gentlemen opposite do not understand, or refuse to try to understand, the whole question of what is a P.T.A. I have visited many areas and discussed the matter with local authority representatives. I am not particularly persuasive, but, by the time I left, having given them the facts, they were beginning to realise that a P.T.A. would not be a creature of Whitehall, as they had been told by hon. Gentlemen opposite.
  Mr. Michael Heseltine: I have followed the hon. Gentleman's journeyings around the country. Will he tell us which local authorities he visited, and whether they are now convinced that he has something worth while to offer them?
  Mr. Carmichael: I am not suggesting that local authorities are now convinced. I am suggesting that following my visits they have sloughed off the propaganda which has been poured into them, and the doctrinaire attitude which had been inculcated in them by hon. Gentlemen opposite. There is no question but that many local authorities have begun to realise that my right hon. Friend intends to create an organisation which will give

  1087
  them the assets of the transport undertakings in their areas, and that such organisations will have only one-seventh of their membership contributed to, or nominated by, the Minister. This is not new in local authority areas
  Mr. Bessell: On a point of order. Sir Barnett, are we discussing the Transport Holding Company, and the Bill relating to it, or are we now in session in Standing Committee F, with a lot of new Members? I can find no reference to P.T.A.s in the Bill.
  The Temporary Chairman (Sir Barnett Janner): I think that the Minister is in order.
  Mr. Carmichael: I think that I am entitled to reply to the points which have been raised. The question of P.T.A.s was raised during the debate. In fact, the hon. Member for Tavistock raised it during one of the longest interventions that I have ever heard in the House. I therefore feel that it is reasonable for me to clear up this point in relation to Amendment No. 5 as it would affect Glasgow. We are discussing the effect of the Bill as against the effect of setting up P.T.A.s, and what I said on the 16th January is reasonable from Glasgow's point of view.
  There is a point about which I must be honest. I spoke about P.T.A.s and their relationship with the T.H.C., and the acquisition of assets within areas designated as such. I stand by what I said. Outside the P.T.A. areas, the T.H.C. may be in a different position. This was referred to by one of my hon. Friends who referred to bus companies in rural areas being asked to be taken over by the T.H.C. because they can no longer provide services in an area such as that mentioned by the hon. Member for Banff (Mr. Baker).
  In certain areas, local authorities with only a few buses are finding things difficult. They have either done so or are thinking of entering into negotiations with the T.H.C. with a view to acquisition. I am referring to local authorities which number their buses in tens, and which are never likely to be involved in a P.T.A.
  On the questions raised by the hon. Member for Newcastle-upon-Tyne, North (Mr. R. W. Elliott), I have visited Newcastle; whether or not there will be a subvention on the rates is a matter for the representatives of the local authority. If they decide that the fares could be increased instead—because these will not be subject to the Traffic Commissioners—this is up to them. The choice whether to carry any burdens of transport on the fares or whether to spread it over the community as a whole will be theirs. It is, nevertheless, finally a decision of the Passenger Transport Authority, which will be very heavily representative of the municipality.
  The hon. Member for Banff spoke on new Clause No. 2. The Bill which is being discussed in Standing Committee F upstairs is absolutely essential if an area like Banff is in the future to be given a good transport service. Provision for rural services is a real break-through for an area like this, and knowing he is a very fair-minded man, I hope that he will consider the arguments put forward by some of my hon. Friends and agree that on this occasion he should vote with the Government in rejecting the Amendment.
  Question put, That the Amendment be made:—
  The Committee divided: Ayes 120, Noes 202.

  Division No. 48.]

  AYES

  [10.30 p.m.

  Allason, James (Hemel Hempstead)

  Bruce-Gardyne, J.

  Elliot, Capt. Walter (Carshalton)

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

  Buck, Antony (Colchester)

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

  Baker, W. H. K.

  Burden, F. A.

  Emery, Peter

  Balniel, Lord

  Carlisle, Mark

  Errington, Sir Eric

  Bennett, Dr. Reginald (Got. & Fhm)

  Cary, Sir Robert

  Eyre, Reginald

  Bessell, Peter

  Clark, Henry

  Fortescue, Tim

  Biffen, John

  Clegg, Walter

  Foster, Sir John

  Biggs-Davison, John

  Corfield, F. V.

  Cilmour, Ian (Norfolk, C.)

  Birch, Rt. Hn. Nigel

  Costain, A. P.

  Glover, Sir Douglas

  Boardman, Tom

  Cunningham, Sir Knox

  Glyn, Sir Richard

  Bossom, Sir Clive

  Dalkelth, Earl of

  Goodhart, Philip

  Boyd-Carpenter, Rt. Hn. John

  Dance, James

  Goodhew, Victor

  Brewis, John

  Dean, Paul (Somerset, N.)

  Gower, Raymond

  Brinton, Sir Tatton

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

  Grant-Ferris, R.

  Brown, Sir Edward (Bath)

  Eden, Sir John

  Grant, Anthony

  Gresham Cooke, R.

  Maxwell-Hyslop, R. J.

  Rossi, Hugh (Hornsey)

  Grieve, Percy

  Mills, Peter (Torrington)

  Royle, Anthony

  Griffiths, Eldon (Bury St. Edmunds)

  Montgomery, Fergus

  Russell, Sir Ronald

  Gurden, Harold

  More, Jasper

  Sharpies, Richard

  Harris, Reader (Heston)

  Morgan, Geraint (Denbigh)

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

  Harrison, Brian (Maldon)

  Monro-Lucas-Tooth, Sir Hugh

  Silvester, Frederick

  Hastings, Stephen

  Murton, Oscar

  Sinclair, Sir George

  Hay, John

  Nabarro, Sir Gerald

  Smith, John

  Heald, Rt. Hn. Sir Lionel

  Nicholls, Sir Harmar

  Steel, David (Roxburgh)

  Heseltine, Michael

  Nott, John

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

  Hill, J. E. B.

  Onslow, Craniey

  Summers, Sir Spencer

  Holland, Phllip

  Osborn, John (Hallam)

  Teeling, Sir William

  Howell, David (Guildford)

  Page, Graham (Crosby)

  Thorpe, Rt. Hn. Jeremy

  Hunt, John

  Page, John (Harrow, W.)

  Tilney, John

  Hutchison, Michael Clark

  Pardoe, John

  Turton, Rt. Hn. R. H.

  Iremonger, T. L.

  Pearson, Sir Frank (Clitheroe)

  Vaughan-Morgan, Rt. Hn. Sir John

  Johnston, Bussell (Inverness)

  Peel, John

  Vickers, Dame Joan

  Kimball, Marcus

  Percival, Ian

  Walker, Peter (Worcester)

  Knight, Mrs. Jill

  Pink, R. Bonner

  Walker-Smith, Rt. Hn. Sir Derek

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

  Pounder, Rafton

  Webster, David

  Lubbock, Eric

  Powell, Rt. Hn. J. Enoch

  Whitelaw, Rt. Hn. William

  Maclean, Sir Fitzroy

  Prior, J. M. L.

  Wilson, Geoffrey (Truro)

  McMastor, Stanley

  Raimden, Rt. Hn. James

  Worsley, Marcus

  Maginnis, John E.

  Renton, Rt. Hn. Sir David

  Maude, Angus

  Ridley, Hn. Nicholas

  TELLERS FOR THE AYES:

  Mawby, Ray

  Ridsdale, Julian

  Mr. Bernard Weatherill and

  Mr. Hector Monro.

  NOES

  Albu. Austen

  Dunn, James A.

  Kenyon, Clifford

  Allaun, Frank (Salfcrd, E.)

  Dunnett, Jack

  Kerr, Russell (Feltham)

  Allen, Scholefield

  Dunwoody, Mrs. Gwyneth, (Exeter)

  Lawson, George

  Armstrong. Ernest

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

  Leadbitter, Ted

  Atlins, Ronald (Perston, N.)

  Edwards, Rt. Hn. Ness (Caerphilly)

  Lee, Rt. Hn. Frederick (Newton)

  Atkinson, Norman (Tottenham)

  Edwards, Robert (Bilston)

  Lee, Rt. Hn. Jennie (Cannock)

  Bagier, Gordon A. T.

  Ellis, John

  Lee, John (Reading)

  Barnett. Joel

  English, Michael

  Lestor, Miss Joan

  Baxter, William

  Ensor, David

  Lewis, Ron (Carlisle)

  Benn, Rt. Hn, Anthony Wedgwood

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

  Loughlin, Charles

  Bidwell, Sydney

  Faulds, Andrew

  Lyons, Edward (Bradford, E.)

  Binns, John

  Fernyhough, E.

  Mabon, Dr. J. Dickson

  Bishop, E. S.

  Fletcher, Raymond (Ilkeston)

  McBride, Neil

  Blackburn, F.

  Fletcher, Ted (Darlington)

  McCann, John

  Blenkinsop, Arthur

  Foot, Michael (Ebbw Vale)

  MacColl, James

  Boardman, H.

  Fowler, Gerty

  MacDermot, Niall

  Booth, Albert

  Fraser, John (Norwood)

  McGuire, Michael

  Boyden, James

  Galpern, Sir Myer

  Mackenzie, Gregor (Rutherglen)

  Braddock, Mrs. E. M.

  Gardner, Tony

  Mackie, John

  Bray. Dr. Jeremy

  Garrett, W. E.

  Mackintosh, John p.

  Brooks, Edwin

  Gourlay, Harry

  Maclerman, Robert

  Broughton, Dr. A. D. D.

  Greenwood, Rt. Hn. Anthony

  McNamara, J. Kevin

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

  Gregory, Arnold

  MacPherson, Malcolm

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

  Grey, Charles (Durham)

  Mahon, Peter (Preston, S.)

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

  Griffiths, David (Rother Valley)

  Mal1alieu,J.P.W.(Huddersfield,E.)

  Buchan, Norman

  Griffiths, Rt. Hn. James (Llanelly)

  Manuel, Archie

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

  Hamilton, James (Bothwell)

  Mapp, Charles

  Butler, Mrs. Joyce (Wood Green)

  Hamling, William

  Marks, Kenneth

  Callaghan, Rt. Hn. James

  Hannan, William

  Mason, Rt. Hn. Roy

  Carmichael, Neil

  Harrison, Walter (Wakefield)

  Mendelson, J. J.

  Carter-Jones, Lewis

  Hart, Mrs. Judith

  Millan, Bruce

  Castle, Rt. Hn. Barbara

  Hazell, Bert

  Milne, Edward (Blyth)

  Chapman, Donald

  Healey, Rt. Hn. Denis

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

  Coe, Denis

  Heffer, Eric S.

  Moonman, Eric

  Coleman, Donald

  Henig, Stanley

  Morris, Alfred (Whthenshawe)

  Concarmon, J. D.

  Herbison, Rt. Hn. Margaret

  Morris, Charles R. (Openshaw)

  Conlan, Bernard

  Hooley, Frank

  Murray, Albert

  Crawshaw, Richard

  Howarth, Robert (Bolton, E.)

  Neal, Harold

  Cronin, John

  Howell, Denis (Small Heath)

  Newens, Stan

  Crossman, Rt. Hn. Richard

  Howell, Denis (Small Heath)

  Noel-Baker, Francis (Swindon)

  Cullen, Mrs. Alica

  Hoy, James

  Norwood, Christopher

  Dalyell, Tam

  HuckfieHd, Leslie

  Oakes, Gordon

  Davidson, Arthur (Accrington)

  Hughes, Emrys (Ayrshire, S.)

  Ogden, Eric

  Davies, Dr. Ernest (Stretford)

  Hynd, John

  O'Malley, Brian

  Davies, G. Elfed (Rhondda, E.)

  Irvine, Sir Arthur

  Oram, Albert E.

  Davies, Harold (Leek)

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

  Orbach, Maurice

  de Freitiis, Rt. Hn. Sir Geoffrey

  Jay, Rt. Hn. Douglas

  Orme, Stanley

  Dell, Edmund

  Jenkins, Rt. Hn. Roy (Stechford)

  Oswald, Thomas

  Dempsey, James

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

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

  Dewar, Donald

  Jones, Dan (Burnley)

  Owen, Will (Morpeth)

  Dickens, James

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

  Page, Derek (King's Lynn)

  Dobson, Ray

  Jones, T. Alec (Rhondda, West)

  Paget, R. T.

  Doig, Piter

  Judd, Frank

  Pentland, Norman

  1090

  1091

  Parry, Ernest G. (Battersea, S.)

  Silkin, Rt. Hn. John (Deptfond)

  Watklns, David (Consett)

  Perry, George H. (Nottingham, S.)

  Silkin, Hn. S. C. (Dulwich)

  Wellbeioved, James

  Price, Thomas (Weathoughton)

  Silverman, Julius (Aston)

  Wells, William (Waisall, N.)

  Probert, Arthur

  Skeffington, Arthur

  Whltaker, Ben

  Reea, Merlyn

  Slater, Joseph

  Wilkins, W. A.

  Richard, Ivor

  Spriggs, Leslie

  Williams, Alan Lee (Hornchurch)

  Roberts, Albert (Normanton)

  Swingler, Stephen

  Williams, Mrs. Shirley (Hitchin)

  Roberts, Gwilym (Bedfordshire, S.)

  Taverne, Dick

  Williams, W. T. (Warrington)

  Robertson, John (Paisley)

  Thornton, Ernest

  Wilson, William (Coventry, S.)

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

  Tinn, James

  Woof, Robert

  Rodgers, William (Stockton)

  Urwin, T. W.

  Yates, Victor

  Roebuck, Roy

  Varley, Eric G.

  Rose, Paul

  Wainwright, Edwin (Dearne Valley)

  TELLERS FOR THE NOES:

  Ross, Rt. Hn. William

  Walden, Brian (All Saints)

  Mr. Joseph Harper and

  Shaw, Arnold (llford, S.)

  Walker, Harold (Doncaster)

  Mr. Alan Fitch.

  Shore, Peter (Stepney)

  Wallace, George

  Clause ordered to stand part of the Bill.
  Clause 2 ordered to stand part of the Bill.

  New Clause 3.

    (ROAD HAULAGE.)
    No moneys provided by this Act shall be employed to acquire road haulage undertakings.—[Mr. Webster.]
    Brought up, and read the First time.
    Mr. Webster: I beg to move, That the Clause be read a Second time.
    I will be brief, because the Government supporters are wilting and it is practically impossible to get a logical answer from the Government Front Bench because both hon. Gentlemen are exhausted and punchdrunk.
    When the Prime Minister went to Washington, he said that, if the Government did not nationalise road haulage this time, they would take the lid off the already nationalised B.R.S. The Minister of State said that the taking over would be on commercial terms, by which he meant the doubling of excise duty, three increases of fuel tax, the removal of investment grants, the imposition of special alterations which loaded the thing against the private haulier, the possibility of such a special authorisation, if they got it, being revoked, and the addition of an extra£8 for an eighttonner, plus the abnormal road tax. We will do nothing to help the Government take over road haulage on those loaded terms, which is the reason for the Clause.
    Mr. Swingler: I am not sure who is wilting, but I have already answered this in debates on other Amendments, by saying that we favour the expansion of public enterprise in road haulage and the other diversified activities of the T.H.C. I think that we should say no more, but put the matter to the vote.
    Mr. Bessell: I support the hon. Member for Weston-super-Mare (Mr. Webster). We have received no concession or indication from the Government today that they are prepared even to consider the reasonable and reasoned Amendments of this side. This disturbs me, because, whenever a Government bring in a large Bill and a connected smaller one—this Bill is a corollary to the Transport Bill—they normally undertake at least to consider some of the Amendments. The Government have brought down an iron curtain which is impossible to penetrate even to the extent of their undertaking to consider our arguments. In circumstances such as these, I trust that the Opposition will press the Amendment to a Division.
    Question put, That the Clause be read a Second time:—
    The Committee divided: Ayes 115, Noes 197.

    Division No. 49.]

    AYES

    [10.45>m.

    Allason, James (Hemel Hempstaad)

    Emery, Peter

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

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

    Errington, Sir Eric

    Lubbock, Eric

    Baker, W. H. K.

    Eyte, Reginald

    Maclean, Sir Fitzroy

    Balniel, Lord

    Fortescue, Tim

    McMaster, Stanley

    Bennett, Dr. Reginald (Gos. & Fhm)

    Foster, Sir John

    Maginnis, John E.

    Bessell, Peter

    Gilmour, Ian (Norfolk, C.)

    Maude, Angus

    Biffen, John

    Glover, Sir Douglas

    Mawby, Ray

    Biggs-Davison, John

    Glyn, Sir Richard

    Maxwell-Hyslop, R. J.

    Birch, Rt. Hn. Nigel

    Goodhew, Victor

    Mills, Peter (Torrington)

    Boardman, Tom

    Gower, Raymond

    Montgomery, Fergus

    Bossom, Sir Clive

    Grant, Anthony

    More, Jasper

    Boyd-Carpenur, Rt. Hn. John

    Grant-Ferris, R.

    Morgan, Gcralnt (Denbigh)

    Bretwis, John

    Gresham Cooke, R.

    Munro-Lucas-Tooth, Sir Hugh

    Brinton, Sir Tatton

    Grieve, Percy

    Murton, Oscar

    Brown, Sir Edward (Bath)

    Griffiths, Eldon (Bury St. Edmunds)

    Nabarro, Sir Gerald

    Bruce-Gardyne, J.

    Gurden, Harold

    Nicholls, Sir Harmar

    Buck, Antony (Colchester)

    Harris, Reader (Hetton)

    Nott, John

    Burden, F. A.

    Harrison, Brian (Maldon)

    Onslow, Cranley

    Carlisle, Mark

    Hastings, Stephen

    Osborn, John (Hallam)

    Cary, Sir Robert

    Hay, John

    Page, Graham (Crosby)

    Clark, Henry

    Heald, Rt. Hn. Sir Lionel

    Pardoe, John

    Clegg, Walter

    Heseltine, Michael

    Pearson, Sir Frank (Clitheroe)

    Corfield, F. V.

    Hill, J. E. B.

    Percival, Ian

    Costain, A. P.

    Holland, Philip

    Pink, R. Bonner

    Dalkith, Earl of

    Howell, David (Cuildford)

    Pounder, Rafton

    Dance, James

    Hunt, John

    PoweH, Rt. Hn. J. Enoch

    Dean, Paul (Somerset, N.)

    Hutchison, Michael Clark

    Prior, J. M. L.

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

    Iremonger, T. L.

    Renton, Rt. Hn. Sir David

    Eden, Sir John

    Johnston, Russell (Inverness)

    Ridley, Hn. Nicholas

    Elliot, Capt. Walter (Carshalton)

    Kimball, Marcus

    Ridsdale, Julian

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

    Knight, Mrs. Jill

    Rossi, Hugh (Hornsey)

    Royle, Anthony

    Summers, Sir Spencer

    Webster, David

    Russell, Sir Ronald

    Teeling, Sir William

    Whitelaw, Rt. Hn. William

    Sharples, Richard

    Thorpe, Rt. Hn. Jeremy

    Wilson, Geoffrey (Truro)

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

    Tilney, John

    Worsley, Marcus

    Silvester, Sir George

    Turton, Rt. Hn. R. H.

    Sinclair, Sir George

    Vaughan.Morgan, Rt. Hn. Sir John

    TELLERS FOR THE AYES:

    Smith, John

    Vickers, Dame Joan

    Mr. Bernard Weatherill and

    Steel, David (Roxburgh)

    Walker, Peter (Worcester)

    Mr. Hector Monro.

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

    Walker-Smith, Rt. Hn. Sir Derek

    NOES

    Albu, Austen

    Fraser, John (Norwood)

    Milne, Edward (Blyth)

    Allaun, Frank (Sailord, E.)

    Galpern, Sir Myer

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

    Allen, Scholefield

    Gardner, Tony

    Moonman, Eric

    Armstrong, Ernest

    Garrett, W. E.

    Morris, Alfred (Wythenshawe)

    Atkins, Ronald (Preston, N.)

    Gourlay, Harry

    Morris, Charles R. (Openshaw)

    Atkinson, Norman (Tottenham)

    Greenwood, Rt. Hn. Anthony

    Murray, Albert

    Bagier, Gordon A. T.

    Gregory, Arnold

    Neal, Harold

    Barnett, Joel

    Grey, Charles (Durham)

    Newens, Stan

    Baxter, William

    Griffiths, David (Rother Valley)

    Noel-Baker, Francis (Swindon)

    Benn, Rt. Hn. Anthony Wedgwood

    Griffiths, Rt. Hn. James (Llanelly)

    Norwood, Christopher

    Bidwell, Sydney

    Hamilton, James (Bothwell)

    Oakes, Gordon

    Binns, John

    Hamling, William

    Ogden, Eric

    Bishop, E. S.

    Hannan, William

    O'Malley, Brian

    Blackburn, F.

    Harper, Joseph

    Oram, Albert E.

    Blgnkinsop, Arthur

    Harrison, Walter (Wakefleld)

    Orbach, Maurice

    Boardman, H.

    Hart, Mrs. Judith

    Orme, Stanley

    Booth, Albert

    Hazell, Bert

    Oswald, Thomas

    Boyden, James

    Healey, Rt. Hn. Denis

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

    Braddock, Mrs. E. M.

    Heffer, Eric S.

    Owen, Will (Morpeth)

    Bray, Dr. Jeremy

    Henig, Stanley

    Page, Derek (King's Lynn)

    Brooks, Edwin

    Herbison, Rt. Hn. Margaret

    Paget, R. T.

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

    Hooley, Frank

    Pentland, Norman

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

    Howarth, Robert (Bolton, E.)

    Perry, Ernest G. (Battersea, S.)

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

    Howell, Denis (Small Heath)

    Perry, George H. (Nottingham, S.)

    Buchan, Norman

    Hoy, James

    Probert, Arthur

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

    Huckfield, Leslie

    Rees, Merlyn

    Butler, Mrs. Joyce (Wood Green)

    Hughes, Emrys (Ayrshire, S.)

    Richard, Ivor

    Callaghan, Rt. Hn. James

    Hynd, John

    Roberts, Albert (Normanton)

    Carmichael, Neil

    Irvine, Sir Arthur

    Roberts, Gwilym (Bedfordshire, S.)

    Carter-Jones, Lewis

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

    Robertson, John (Paisley)

    Castle, Rt. Hn. Barbara

    Jay, Rt. Hn. Douglas

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

    Coe, Denis

    Jenkins, Rt. Hn. Roy (Stechford)

    Rodgers, William (Stockton)

    Coleman, Donald

    Jones, Dan (Burnley)

    Roebuck, Roy

    Concannon, J. D.

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

    Rose, Paul

    Conlan, Bernard

    Jorres, T. Alec (Rhondda, West)

    Ross, Rt. Hn. William

    Crawshaw, Richard

    Judd. Frank

    Shaw, Arnold (Ilford, S.)

    Cronin, John

    Kenyon, Clifford

    Shore, Peter (Stepney)

    Crosstnan, Rt. Hn. Richard

    Kerr, Russell (Feltham)

    Silkin, Rt. Hn. John (Deptford)

    Cullen, Mrs. Alice

    Lawson, George

    Silkin, Hn. S. C. (Dulwich)

    Dalyell, Tam

    Leadbitter, Ted

    Silverman, Julius (Aston)

    Davidson, Arthur (Accrington)

    Lee, Rt. Hn. Frederick (Newton)

    Skeffington, Arthur

    Davies, Dr. Ernest (Stretford)

    Lee, Rt. Hn. Jennie (Cannock)

    Slater, Joseph

    Davies, G. Elfed (Rhondda, E.)

    Lee, John (Reading)

    Spriggs, Leslie

    Davies, Harold (Leek)

    Lestor, Miss Joan

    Swingler, Stephen

    de Freitas, Rt. Hn. Sir Geoffrey

    Lewis, Ron (Carlisle)

    Taverne, Dick

    Dell, Edmund

    Loughlin, Charles

    Thornton, Ernest

    Dempsey, James

    Lyons, Edward (Bradford, E.)

    Tinn, James

    Dewar, Donald

    Mabon, Dr. J. Dickson

    Urwin, T. W.

    Dickens, James

    McBride, Neil

    Wainwright, Edwin (Dearne Valley)

    Dobson, Ray

    McCann, John

    Walden, Brian (All Saints)

    Doig, Peter

    Maccoll, James

    Walker, Harold (Doncaster)

    Dunn, James A.

    MacDermot, Niall

    Wallace, George

    Dunnett, Jack

    McGuire, Michael

    Watkins, David (Consett)

    Dunwoody, Mrs. Gwyneth, (Exeter)

    Mackenzie, Gregor (Rutherglen)

    Wellbeloved, James

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

    Mackie, John

    Wells, William (Walsall, N.)

    Edwards, Rt. Hn. Ness (Caerphilly)

    Mackintosh, John P.

    Whitaker, Ben

    Edwards, Robert (Bilston)

    Maclerman, Robert

    Wilkins, W. A.

    Ellis, John

    McNamara, J. Kevin

    Williams, Alan Lee (Homchureh)

    English, Michael

    MacPherson, Malcolm

    Williams, Mrs. Shirley (Hitchin)

    Ensor, David

    Mahon, Peter (Preston, S)

    Wilson, William (Coventry, S.)

    Faulds, Andrew

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

    Woof, Robert

    Fernyhough, E.

    Manuel, Archie

    Yates, Victor

    Fitch, Alan (Wigan)

    Mapp, Charles

    Fletcher, Raymond (Ilkeston)

    Marks, Kenneth

    TELLERS FOR THE NOES:

    Fletcher, Ted (Darlington)

    Mason, Rt. Hn. Roy

    Mr. Ioan Evans and

    Foot, Michael (Ebbw Vale)

    Mendelaon, J. J.

    Mr. Eric G. Varley.

    Fowler, Gerry

    Millan, Bruce

    Bill reported, without Amendment.
    Motion made, and Question proposed, That the Bill be now read the Third time.
    10.55 p.m.
    Sir Harmar Nicholls: On a point of order, Mr. Speaker. I think that this is the first time under the new rules that a Motion has appeared on the Order Paper on a Third Reading, That the Question be not put forthwith. To speed proceedings, may I say that I hope that if such a Motion appears again on the Order Paper it will not be ignored. On this occasion it may be right not to extend the proceedings after the debate has gone on fully in Committee, but under the new rules, if we put down a Motion to have a Bill discussed on Third Reading, we should examine the Bill further in the actual form in which it leaves the Committee.
    Mr. Speaker: I am sure that the House will note, and the hon. Member's side of the House will especially note, what the hon. Member has said.
    10.56 p.m.
    Mr. Heseltine: It is interesting that no member of the Cabinet has been present to listen to the debate until the last few minutes. If I were a member of the Cabinet, and we were asked to extend public borrowing by £70 million at a time such as this in the economic circumstances of the country, I would not have come to the House for this debate, but it is extraordinary that we should not have had a member of the Cabinet present until this time and that the Minister of Transport has not been present throughout Committee stage.
    It is also extraordinary that, despite most detailed probing of Ministers, they have not given a single indication of the
    facts about Thos. Cook. This was a remarkable opportunity thrown away by hon. Members opposite to prove in detail the triumphs of the Transport Holding Company to which they have referred. They could have put before the House in great detail all the successes of which we have heard so much, but all they have been content to do has been to assert that there have been successes and not to justify the statement by facts.
    We are extending the public sector by £70 million. The Bill reveals clearly the real motives behind the Prime Minister's continual promise to reduce public expenditure. The Bill reveals that his promise is no more than one more politically expedient promise, made today and forgotten tomorrow.
    10.58 p.m.
    Mr. Swingler: I greatly regret that right up to the last stages of the Bill Opposition spokesmen have been inaccurate. Some of my right hon. Friends in the Cabinet have been present in the course of the proceedings, including my right hon. Friend the Secretary of State for Scotland.
    The Opposition have had a very full opportunity to attack the Bill up to the last minute. We come back to the last point which divides the House. It is that we are in favour of the extension of public enterprise in transport. I am glad that this Bill provides a means of extending public enterprise in transport which the country very much needs, and I heartily commend it to the House.
    Question put, That the Bill be now read the Third time:—
    The House divided: Ayes 194, Noes 116.

    Division No. 50.]

    AYES

    [10.59 p.m.

    Albu, Austen

    Bray. Dr. Jeremy

    Dalyell, Tam

    Allaun, Frank (Salford, E.)

    Brooks, Edwin

    Davidson, Arthur (Accrington)

    Allen, Scholefield

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

    Davies, Dr. Ernest (Stretford)

    Armstrong, Ernest

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

    Davies, G. Elfed (Rhondda, E.)

    Atkins, Ronald (Preston, N.)

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

    Davies, Harold (Leek)

    Atkinson, Norman (Tottenham)

    Buchan, Norman

    de Freitas, Rt. Hn. Sir Geoffrey

    Bagier, Gordon A. T

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

    Dell, Edmund

    Barnett, Joel

    Butler, Mrs. Joyce (Wood Green)

    Dempsey, James

    Baxter, William

    Callaghan, Rt. Hn. James

    Dewar, Donald

    Benn, Rt. Hn. Anthony Wedgwood

    Carmichael, Neil

    Dickens, James

    Bidwell, Sydney

    Carter-Jones, Lewis

    Dobson, Ray

    Binns, John

    Coe, Denis

    Doig, Peter

    Bishop, E S

    Coleman, Donald

    Dunn, James A

    Blackburn, F

    Concannon, J. D

    Dunnett, Jack

    Blenkinsop, Arthur

    Conian, Bernard

    Dunwoody, Mrs. Gwyneth, (Exeter)

    Boardman, H. (Leigh)

    Crawehaw, Richard

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

    Booth, Albert

    Cronin, John

    Edwards, Rt. Hn. Ness (Caerphilly)

    Boyden, James

    Crossman, Rt. Hn. Richard

    Edwards, Robert (Bilston)

    Braddoch, Mrs. E. M.

    Cullen, Mrs.. Alice

    Ellis, John

    English, Michael

    Leadbitter, Ted

    Paget, R. T.

    En or, David

    Lee, Rt. Hn. Frederick (Newton)

    Pentland, Norman

    Faulds, Andrew

    Lee, Rt. Hn. Jennie (Cannock)

    Perry, Ernest G. (Battersea, S.)

    Fernyhough, E

    Lee, John (Reading)

    Perry, George H. (Nottingham, S.)

    Fitch, Alan (Wigan)

    Lestor, Miss Joan

    Probert, Arthur

    Fletcher, Raymond (Ilkeston)

    Lewis, Ron (Carlisle)

    Rees, Merlyn

    Fletcher, Ted (Darlington)

    Loughlin, Charles

    Richard, Ivor

    Foot, Michael (Ebbw Vale)

    Lyons, Edward (Bradford, E)

    Roberts, Albert (Normanton)

    Fowler, Gerry

    Mabon, Dr. J. Dickson

    Roberts, Gwilym (Bedfordshire. S.)

    Fraser, John (Norwood)

    McBride, Neil

    Robertson, John (Paisley)

    Galpern, Sir Myer

    McCarm, John

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

    Gardner, Tony

    MacColl, James

    Rodgers, William (Stockton)

    Gourlay, Harry

    MacDermot, Niall

    Roebuck, Roy

    Greenwood, Rt. Hn. Anthony

    McGuire, Michael

    Rose, Paul

    Gregory, Arnold

    Mackenzie, Gregor (Rutherglen)

    Ross, Rt. Hn. William

    Grey, Charles (Durham)

    Mackie, John

    Shaw, Arnold (Ilford, S.)

    Griffiths, David (Rother Valley)

    Mackintosh, John P

    Shore, Peter (Stepney)

    Hamilton, James (Bothwell)

    Maclennan, Robert

    Silkin, Rt. Hn. John (Deptford)

    Hamling, William

    McNamara, J. Kevin

    Silkin, Hn. S. C. (Dulwich)

    Hannan, William

    MacPherson, Malcolm

    Silverman, Julius (Aston)

    Harper, Joseph

    Mahon, Peter (Preston, S)

    Skeffington, Arthur

    Harrison, Walter (Wakefield)

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

    Slater, Joseph

    Hart, Mrs. Judith

    Manuel, Archie

    Spriggs, Leslie

    Hattersley, Roy

    Mapp, Charles

    Swingler, Stephen

    Hazell, Bert

    Marks, Kenneth

    Taverne, Dick

    Healey, Rt. Hn. Denis

    Mason, Rt. Hn. Roy

    Thornton, Ernest

    Heffer, Eric S

    Mendelson, J. J.

    Tinn, James

    Henig, Stanley

    Millan, Bruce

    Urwin, T. W.

    Herbison, Rt. Hn. Margaret

    Milne, Edward (Blyth)

    Wainwright, Edwin (Dearne Valley)

    Hooley, Frank

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

    Walden, Brian (All Saints)

    Howarth, Robert (Bolton, E.)

    Moonman, Eric

    Walker, Harold (Doncaster)

    Howell, Denis (Small Heath)

    Morris, Alfred (Wythenshawe)

    Wallace, George

    Hoy, James

    Morris, Charles R. (Openshaw)

    Watkins, David (Consett)

    Huckfield, Leslie

    Murray, Albert

    We beloved, James

    Hughes, Emrys (Ayrshire, S.)

    Neal, Harold

    Wells, William (Walsall, N.)

    Hynd, John

    Newens, Stan

    Whitaker, Ben

    Irvine, Sir Arthur

    Noel-Baker, Francis (Swindon)

    Wllkins, W. A.

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

    Oakes, Gordon

    Willey, Rt. Hn. Frederick

    Jay, Rt. Hn. Douglas

    Ogden, Eric

    Williams, Alan Lee (Hornchurch)

    Jenkins, Rt. Hn. Roy (Stechford)

    O'Malley, Brian

    Williams, Mrs. Shirley (Hitchin)

    Jones, Dan (Burnley)

    Oram, Albert E

    Wilson, William (Coventry, S.)

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

    Orbach, Maurice

    Woof, Robert

    Jones, T. Alec (Rhondda, West)

    Orme, Stanley

    Yates, Victor

    Judd, Frank

    Oswald, Thomas

    Kenyon, Clifford

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

    TELLERS FOR THE AYES:

    Kerr, Russell (Feltham)

    Owen, Will (Morpeth)

    Mr. Ioan Evans and

    Lawson, George

    Page, Derek (King's Lynn)

    Mr. Eric G. Varley.

    NOES

    Allason, James (Hemel Hempstead)

    Eyre, Reginald

    McMaster, Stanley

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

    Fortescue, Tim

    Maginnis, John E.

    Baker, W. H. K

    Foster, Sir John

    Maude, Angus

    Balniel, Lord

    Gilmour, Ian (Norfolk, C.)

    Mawby, Ray

    Bennett, Dr. Reginald (Goa. & Fhm)

    Glover, Sir Douglas

    Maxwell-Hyslop, R. J.

    Bessell, Peter

    Glyn, Sir Richard

    Mills, Peter (Torrington)

    Biffen, John

    Goodhew, Victor

    Monro, Hector

    Biggs-Davison, John

    Gower, Raymond

    Montgomery, Fergus

    Birch, Rt. Hn. Nigel

    Grant, Anthony

    Morgan, Geraint (Denbigh)

    Boardman, Tom

    Grant-Ferris, R

    Munro-Lucas-Tooth, Sir Hugh

    Bossom, Sir Clive

    Gresham Cooke, R

    Murton, Oscar

    Boyd-Carpenter, Rt. Hn. John

    Grieve, Percy

    Nabarro, Sir Gerald

    Brewis, John

    Griffiths, Eldon (Bury St. Edmunds)

    Nicholls, Sir Harmar

    Brinton Sir Tatton

    Gurden, Harold

    Nott, John

    Brown, Sir Edward (Bath)

    Harris, Reader(Heston)

    Onslow, Cranley

    Bruce-Gardyne, J.

    Harrison, Brian (Maldon)

    Osborn, John (Hallam)

    Buck, Antony (Colchester)

    Hastings, Stephen

    Page, Graham (Crosby)

    Burden, F. A.

    Hay, John

    Pardoe, John

    Carlisle, Mark

    Heald, Rt. Hn. Sir Lionel

    Pearson, Sir Frank (Clitheroe)

    Cary, Sir Robert

    Heseltine, Michael.

    Percival, Ian

    Clark, Henry

    Hill, J. E. B

    Pink, R. Bonner

    Clegg, Walter

    Holland, Philip

    Pounder, Rafton

    Corfield, F. V

    Hordern, peter

    Powell, Rt. Hn. J. Enoch

    Costain, A. P

    Howell, David (Cuildford)

    Prior, J. M. L.

    Dalkeith, Earl of

    Hunt, John

    Renton, Rt. Hn. Sir David

    Dance, James

    Hutchison, Michael Clark

    Ridley, Hn. Nicholas

    Dean, Paul (Somerset, N.)

    Iremonger, T. L

    Ridsdale, Julian

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

    Johnston, Russell (Inverness)

    Rossi, Hugh (Hornsey)

    Eden, Sir John

    Kjmball, Marcus

    Royle, Anthony

    Elliot, Capt. Walter (Carshalton)

    Knight, Mrs. Jill

    Russell, Sir Ronald

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

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

    Sharples, Richard

    Emery, Peter

    Lubbock, Eric

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

    Errington, Sir Eric

    Maclean, Sir Fitzroy

    Silvester, Frederick

    1100

    1101

    Sinclair, Sir George

    Tilney, John

    Whitelaw, Rt. Hn. William

    Smith, John

    Turton, Rt. Hn. R. H.

    Wilson, Geoffrey (Truro)

    Steel, David (Roxburgh)

    Vaughan-Morgan, Rt. Hn. Sir John

    Worsley, Marcus

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

    Viekert, Dame Joan

    Summers, Sir Spencer

    Walker, Peter (Worcester)

    TELLERS FOR THE NOES:

    Teeling, Sir William

    Walker-Smith, Rt. Hn. Sir Derek

    Mr. Jasper More and

    Thorpe, Rt. Hn. Jeremy

    Webster, David

    Mr. Bernard Weatherill.

    Bill accordingly read the Third time, and passed.

    EDUCATION BILL [Lords]
    Order for Second Reading read
    Motion made, and Question put forthwith, pursuant to Standing Order No. 60A, That the Bill be now read a Second time.
    Question agreed to
    Bill accordingly read a Second time
    Bill committed to a Standing Committee, pursuant to Standing Order No. 40 (Committal of Bills)

    AGRICULTURE
    Mr. Peter Bessell discharged from the Select Committee and Mr. Alasdair Mackenzie added to the Committee.—[Mr. loan L. Evans]

  WORCESTERSHIRE COUNTY COUNCIL (EXPENSES)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. loan L. Evans]
  11.9 p.m.
  Mr. James Dance: I welcome this opportunity of protesting most strongly at the very unfair burden of some £6,672 being imposed on the ratepayers of Worcestershire. The expenditure of this sum was abortive as a result of the complete change of policy of the Minister of Housing and Local Government.
  For clarification, I must go into the whole history of how this expenditure was incurred. I fear that it is rather lengthy. Section 28 of the Local Government Act, 1958, which received the Royal Assent on 23rd July, 1958, imposed a duty on county councils to review the organisation of county districts and rural parishes and make proposals for changes with a view to effective and convenient local government.
  The review could not be started until the external boundaries of the county had
  1102
  been settled by the Minister after reports from the Local Government Commission, nor could the county council touch the Boroughs of Halesowen, Old-bury and Stourbridge, which were in the West Midlands Special Review Area. Nevertheless, the county council had preliminary thoughts about the problem in 1959 and was fairly well advanced when the Ministry issued Circular 35/62 on 2nd October, 1962, dealing with the county reviews. In that circular, the Ministry said:
  " It is important for the future of local government that each county council should tackle this task with determination, and should propose changes wherever they consider this necessary to secure effective as well as convenient units."
  By that time, the external shape of the county had been fixed and the county council was able to start in earnest on its own review. It employed extra staff —one administrative officer and one draughtsman—specially for county review work from 1963–64 to 1965–66. The proposals had to be in the stereotyped form laid down in Circular 36/62 and this involved a large printing and mapping bill. I have some of the documents with me. The cost of the whole exercise was about £6,675.
  The county council submitted its proposals to the Minister on 3rd November, 1965.
  On 10th February, 1966, the Prime Minister announced in the House of Commons that a Royal Commission on Local Government in England would be set up and that the Minister of Housing and Local Government, then the right hon. Member for Coventry, East (Mr. Cross-man), followed that by announcing that the Local Government Commission for England would be wound up. The right hon. Gentleman went on to say:
  " Under the Local Government Act, 1958, each county council is required, once the work of the Local Government Commission is sufficiently advanced, to undertake a review of the county districts in their area. I intend to deal with county reviews already submitted to me, but I shall have to consider further what is to be done in the case of reviews not yet completed."

  1103
  In answer to my right hon. Friend the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), the right hon. Gentleman said:
  ' I have, naturally, discussed the county reviews with the County Councils Association and I have told it that the three reviews which are near readiness will continue. One has come to me already, namely, Shropshire. The two which are nearest—they are both near to inquiry—are Cornwall and Worcestershire. They will continue. That is definite. I will have the others looked at to see how near to completion they are, because I quite agree with the right hon Gentleman; I do not want this work to be lost or stopped. The last thing I want is to see a freeze.
  I have been asked how long. I would say that the Royal Commission can do its work in not much more than two years. That is our view. I will explain why in a moment. I think that it can be done. Then the legislation will immediately follow, I hope. In this period I think that we have plenty of work to do. We have a mass of decisions already to implement in Orders. I intend, wherever an inquiry has been held, to continue this to the point of decision and of Order. There is, therefore, a great deal of work which will go on. Minor reviews and adjustments can continue exactly as they have done during the existence of the Commission."—[OFFICIAL REPORT, 10th February, 1966; Vol. 724, c. 644–6.]
  On 7th March, 1966, the Ministry notified the County Councils Association that the Minister proposed to discontinue the submission of reviews after 31st August, 1966. The Department wrote:
  "The Minister would also like to ensure, so far as possible, that work on reviews which have largely been completed is not wasted."
  An inspector of the Ministry held a local inquiry from 1st to 16th June, 1966. At the inquiry, Bewdley Corporation fought a proposal to reduce it to a rural borough, but most time was occupied by investigating Kidderminster Corporation's representations that the proposal did not provide for an enlargement of its boundaries by the absorption of Bewdley Borough, Stourport urban district and parts of Kidderminster rural district and the defence of this territory by the local authorities concerned. The county council did not incur any outside legal expenses at that inquiry, but several of the county district councils spent large fees on legal representation.
  Meanwhile, the Minister announced his decision on the Shropshire Review. He had confirmed practically all the proposals, which included the conversion of
  1104
  several ancient municipal boroughs into rural parishes and the amalgamation of some rural districts. The Order for Shropshire followed and the changes have now come into effect.
  On 10th August, the right hon. Member for Rossendale (Mr. Greenwood) became Minister of Housing and Local Government. The inspector, in a report to the Minister dated 16th September, 1966, recommended the reduction of Bewdley to a rural parish and the dismissal of Kidderminster Corporation's representations about enlarging Kidderminster, and in the main supported the county council in everything where there had been any contention.
  While the county council was awaiting the result of the inquiry, the Minister introduced on 27th October, 1966, the Bill which was to terminate the county reviews. On the Second Reading, on 23rd November, 1966, he repeated that his predecessor had decided, where a county review had been completed, that all the work put into it should not be put on one side but should be considered on its merits. He also made it clear that the four members of the Government Commission who lost their jobs on its abolition had been paid compensation, though they had no claims which were enforceable at law.
  This Bill did not worry the county council because it appeared that their own proposals were safe, but time passed by without any word from the Ministry until a senior officer of the Ministry wrote on 13th March, 1967, that
  " the decision should be fairly soon now and certainly in time for any proposals accepted by the Minister to be brought into effect by 1st April, 1968."
  But this was followed on 3rd May, 1967, by an announcement in the House of Commons by the Minister that it had been decided to make no decision on the county reviews which had been submitted to the Ministry, whether or not an inquiry had been held, except to give effect to those proposals which had been generally agreed locally and were urgently needed.
  As the county council's major proposals had been resisted locally, he wrote on 19th May, 1967, that the only one he thought qualified for approval was an agreed extension of Droitwich Borough, which was being expanded under the

  1105
  Town Development Act 1952, into Droitwich rural district involving a matter of about 293 acres and 15 people.
  If the Minister argues that the county review did achieve this small change it should be pointed out to him that a similar result could have been achieved by the county council making an Order under Section 141 of the Local Government Act, 1933, for confirmation by him, as it did over the expansion of Redditch a year earlier, without any cost at all.
  The Minister's announcement was totally unexpected and contained no hint that any compensation would be made to this county council or to the few other county councils who had carried out their statutory duty. Indeed, the Bill which received. Royal Assent on 10th May, 1967, still recognises that the county council was under a legal duty to submit proposals to the Minister and the Minister, by the same token, is still under a legal duty to come to a decision on them, not merely shirking making a decision at all. As the county council was totally unaware that the Minister would fail to come to a decision at all, it obviously could riot safeguard its position under the Bill by pressing for a Clause which would have indemnified them financially.
  The clear pattern of recent legislation is that if Parliament undoes something, such as where it authorises the revocation of a planning permission, the person who undoes the thing has to pay compensation to the victim. The same consideration should apply when a Minister, by an administrative action for which he has no statutory authority, stultifies the action of someone who has carried out his part of a statutory duty.
  Cancellation charges have always been paid to a frustrat contract. By putting this right the Minister would not commit himself to heavy expenditure of public funds. Only four other counties are concerned, Cornwall, Warwickshire, Herefordshire and Bedfordshire. They seem to be in a similar position. Of these only Cornwall, in addition to Worcestershire, has gone as far as a public inquiry. To my mind, it is quite clear that it would be unfair to ask our ratepayers to pay this, large sum.
  On 19th December, last year, I asked the Minister whether he would reconsider this decision not to make a grant to Worcestershire County Council in view
  1106
  of the fact that the expenditure was rendered abortive by his change of policy. I received the following reply:
  " No. My right hon. Friend could not accept that when a change of circumstances makes a piece of work abortive the authority concerned should be reimbursed the cost of it. In any event, the expenditure was not wholly abortive as the Droitwich Order now before the House gives effect to one of the county council's proposals."—[OFFICIAL REPORT, 19th December, 1967; Vol. 756, c. 358.]
  I consider this most unfair, and a very unsatisfactory Answer. I have dealt with the question of Droitwich in saying that this could have been effected, without any expense at all, by the county council making an Order under Section 141 of the Local Government Act, 1933. The county council's contention is that it could be quite possible for the Minister to make a special grant on the same principle as he makes grants to local authorities for such things as removal of oil pollution from beaches, which presumably does not need statutory sanction.
  It appears that the Minister has made this situation into the good old bookmaker's joke, "Heads I win, tails you lose". Should the county council's exploratory work be productive of an acceptable solution, the county council is prepared and agreeable to pay the expenses incurred. On the other hand, should the county work be rendered abortive by the Minister's changes of policy, the Minister still expects the county to pay. This is most unjust. Whichever way one looks at it financially, the council is bound to lose. Not only is there a question of expenditure incurred by the county council, but local authorities within the county have also incurred expenditure in preparing their opposition to the county council's proposals.
  I therefore hope that the Minister will think again and will see that justice is done by removing this unfair burden from the ratepayers of Worcestershire. I know that my hon. Friends from the county would like to add their comments to what I have said, particularly in dealing with more local matters, and I can only hope that their persuasiveness will make it quite certain that the Minister does change his mind.
  11.24 p.m.
  Sir Talton Brinton: I am most grateful to my hon. Friend the

  1107
  Member for Bromsgrove (Mr. Dance) for giving me an opportunity of saying one or two words in support of what he has already said. I will not recapitulate the argument that he has put forward on behalf of the county as a whole. The expenditure throughout the whole county is, as he said, about £6,675. This falls, in any case, for the county precept on to the local authorities within the county. I should like to underline something else that he has said.
  There is a very substantial expenditure by the local authorities. I can give three examples. The Borough of Kidderminster, which put forward certain proposals, spent £1,870. The urban district of Stourport-on-Severn spent £4,458 in round figures. This is not a very big place, with a population of 20,000 or so, and a corresponding number of ratepayers. Such an expenditure is very serious indeed for a medium-sized, one might almost say a small local authority. In addition, Bewdley Boro, another very small authority, spent £773. This is a total, for these three areas of £7,100—more than the entire county spend on its case.
  If it was argued that this was extravagant, I would only remind the Minister of how vitally important these proposals are to the local authorities. They can alter the whole complexion of local government throughout an area for all time, and it is fair that their views should be put forward with expertise and with the proper sort of legal representation. This was what caused most of the extra expenditure.
  I support my hon. Friends in urging the Minister to look again at the heavy expenditure caused to small authorities arising from a Ministerial requirement for a county review which has been rendered entirely in vain and empty by another Ministerial decision. They have gone to all this trouble and expense for nothing. Will the Minister please think again?
  11.25 p.m.
  Sir Gerald Nabarro: My constituency is the largest in geographical area in the administrative County of Worcester and it embraces five local authority areas: the urban district of Malvern, the Borough of Evesham, the
  1108
  rural district of Evesham, the rural district of Upton-on-Severn and the rural district of Pershore.
  Not only is the amount of £6,500 referred to by my hon. Friend the Member for Bromsgrove (Mr. Dance) here entailed, but a very substantial sum in aggregation has been spent by these five local authorities in investigating the circumstances for the redrawing of boundaries. I suppose that in my constituency alone a sum of £20,000 has already been spent by these five local authorities, all of which has fallen on the shoulders of the ratepayers. That is in addition to their proportion of the £6,500 which found its way ultimately into the county council precept for the local authorities in my constituency. Therefore, the sum spent in total on behalf of my constituents is well over £20,000.
  I make only one point. That is the revocation by the succeeding Minister of the quite definite undertaking given by the then Minister of Housing and Local Government, which ought to be repeated during this debate. The Minister was the present Leader of the House and he was quite emphatic and unequivocal in what he said. Referring to the three local authorities, he said:
  " One has come to me already, namely, Shropshire. The two which are nearest—they are both near to inquiry—are Cornwall and Worcestershire. They will continue. That is definite."—[OFFICIAL REPORT, 10th February 1966; Vol. 724, c. 645.]
  Of course, the Worcestershire County Council took those words at their face value and quite literally. It therefore carried on. The revocation took place a few months later, by which time it had incurred all this expenditure, and I think it not unreasonable that an ex gratia payment should be made to the administrative county of Worcester to offset at least a substantial part of these expenses.
  11.28 p.m.
  The Joint Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. Arthur Skeffington): May I, first, be permitted to thank all the hon. Gentlemen who have spoken on the very concise and clear way in which they have put their case. It has made by task easier in answering, even if what I have to say is not so acceptable. I am afraid that I shall give little joy to them, but that is not to say that subsequently I

  1109
  should not like to consider carefully what they have said to see whether there is anything else that we can do. However, as at present advised and on the case I hope to make in the time at my disposal, that is not very likely.
  The hon. Gentleman the Member for Worcestershire, South (Sir G. Nabarro) and the hon. Member for Kidderminster (Sir T. Brinton) have referred to sums which were in addition to those mentioned by the hon. Member for Broms-grove (Mr. Dance). Therefore, I will not say much about them, because they are outside the scope of the debate. However, the fact that these large sums were expended—the hon. Member for Worcestershire, South referred to a sum of £20,000, which is larger than I would have expected, though I do know, having professionally, in the past, taken part in many of these inquiries, that they do become an expensive exercise—indicates one element which was taken care of in the present Minister of Housing and Local Government's statement in 1967, changing, I admit, what had been a policy decision, namely, not to proceed where the county's proposals were in certain cases hotly disputed.
  My right hon. Friend the Minister of Housing and Local Government, in making the change, said:
  " I shall be announcing final decisions shortly on the county reviews now before me and here too my approach will be to give effect only to those individual proposals which are generally agreed and urgently needed in advance of any wider reorganisation."—[OFFICIAL REPORT, 3rd May, 1967; Vol. 746, c. 89.]
  I can tell the hon. Member for Bromsgrove and the other hon. Members who have spoken that there would have been no need for this embargo if there had been general agreement among local councils. Although on the whole the county's proposals were moderate, some, for example, the one to put Bewdley into another rural district, were hotly contested and, from the point of view of the contestants, rightly so.
  The situation changed with the knowledge that the Royal Commission was proceeding more rapidly than we had hoped and we had the undertaking that the report was likely in the autumn of this year. When my right hon. Friend the now Leader of the House made his statememt all he could say was that it was expected that the Royal Commission
  1110
  would take about two years. The fact that it is making such excellent progress has created a new situation and it was in the light of that that the Minister decided on the policy announcement to which reference has been made and part of which I have read out.
  I want to come to the important con stitutional problem which arises here. It has always been held by administrations of both parties that if there is an acute change in the circumstances needing a change in policy it does not follow, and cannot follow automatically, that the Minister making the change incurs financial liability for expenditure which may have been undertaken by all parties, in good faith, before the announcement of the change.
  I am glad that the hon. Member has raised this, because it gives me an opportunity of putting the other side of the coin. It would be a novel constitutional doctrine if when, except in exceptional circumstances, a Minister felt bound in the interests of good government to change a decision that necessarily guaranteed that all abortive expenditure would be met. I submit that these circumstances are not, to that degree, exceptional, although they may bear harshly on some ratepayers.
  We feel that it would be futile to undertake a considerable change in the county when the Royal Commission is making such good progress. In the case of the uncontested part of the review proposals for Droitwich we were able to proceed by Order to implement the recommendations. That Order is now before the House. I do not agree with the hon. Member who said that there was no virtue in doing it in the way we have, because the circumstances necessitating this change were known to those at the inquiry, and representations could have been made about them.
  The other point I feel I must make is that the proposals were submitted to the then Minister on 3rd November, 1965, long before the statement to which the hon. Member for Bromsgrove referred, which was on 10th February, 1966. I gather that most of the expenditure had been incurred before the statement was made. This could affect the possibility of an ex gratia payment. If a local authority, or other body, had been encouraged or induced to undertake a

  1111
  course of action by a Minister who then changed his policy, there might be aprima facie case for some payment.
  In this case, as the hon. Gentleman said in his interesting opening speech, the county was under a statutory duty to carry out this survey. 'There is all the difference in the world between making an ex-gratia payment—as has been made occasionally to local authorities who have undertaken specific work at the request of the Ministry and then, because there has been a change of policy, that work has been rendered abortive—and making a payment for something which the counties have to do under the 1958 Act. All this expenditure—or at any rate the major part of it—having been incurred before the proposals were presented, I do not think it could be said that there is the same obligation.
  I do not want to put too much weight on this argument, but I want to get it on record so that the public can get the picture in perspective. The hon. Gentleman referred to a figure of £6,600. This is a modest requirement. The county has not strained to put in every item. It has been extremely reasonable, but, weighed against the resources of this rich and powerful county, this sum represents about one-tenth of 1d. rate. I am not saying that the county council was wrong to try to get £6,600 out of the Government, but I am saying that, spread over
  1112
  the county—I am not dealing with the other sums because they are outside the debate—this is not quite such a burden as might be expected.
  I thank those hon. Members who have taken part in the debate. It would be a new constitutional principle if, when there was a change of policy because of new circumstances—and the new circumstances here are the speed with which the Royal Commission has got on with its job, and the fact that we hope to have its report in the autumn—also there was a contested decision; and the hon. Member for Worcestershire, South knows how fully it was contested—the Minister concerned were to be responsible for the authority's costs. If this were so, a Minister would feel reluctant to change policy—which would often be a disadvantage to the country—or it would put on the central Government responsibility for expense which it ought not to have placed on it.
  I have taken careful note of everything that has been said in the debate. It will be understood that I am not holding out any promise that there can be a grant in this case. I am glad that the hon. Gentleman has put the facts on the record, and given me the opportunity to reply.
  Question put and agreed to
  Adjourned accordingly at twenty-two minutes to Twelve o'clock

TECHNOLOGY
  Northern Ireland
  Northern Ireland
  Anglo-French Collaboration
  Anglo-French Collaboration
  Anglo-Soviet Agreement
  Anglo-Soviet Agreement
  British Leyland Motor Corporation
  British Leyland Motor Corporation
  F111 Aircraft (Cancellation Compensation)
  F111 Aircraft (Cancellation Compensation)
  Hearing Aid Batteries (Price Increase)
  Hearing Aid Batteries (Price Increase)
  European Aviation Industry
  European Aviation Industry
  Saudi Arabia Air Defence Consortium
  Saudi Arabia Air Defence Consortium
  Atomic Energy Authority (Research and Development Programme)
  Atomic Energy Authority (Research and Development Programme)
  TSR2 Aircraft
  TSR2 Aircraft
  Hawker Siddeley Dynamics Factory, Whitley
  Hawker Siddeley Dynamics Factory, Whitley
  National Gas Turbine Establishment
  National Gas Turbine Establishment
  Research and Development Contracts
  Research and Development Contracts
  Elstob Committee
  Elstob Committee
  Research Officers
  Research Officers
  Scientific Officers
  Scientific Officers
  Beagle Aircraft
  Beagle Aircraft
  European Satellite Telecommunications System
  European Satellite Telecommunications System
  Concorde Aircraft
  Concorde Aircraft
MINISTRY OF LABOUR
  Government Training Centre, Hartlepool
  Government Training Centre, Hartlepool
  Redeployment
  Redeployment
  Unemployment (Thorne and Goole)
  Unemployment (Thorne and Goole)
  Wage Rates (Increase)
  Wage Rates (Increase)
  Fishing Vessels (I.L.O. Conventions)
  Fishing Vessels (I.L.O. Conventions)
  Remington Rand (Redundant Workers)
  Remington Rand (Redundant Workers)
  Redundant Workers (Tyne and Wear)
  Redundant Workers (Tyne and Wear)
  Hawker Siddeley Ltd. (Redundant Workers)
  Hawker Siddeley Ltd. (Redundant Workers)
  A.E.I./G.E.C. Merger (Redundant Workers)
  A.E.I./G.E.C. Merger (Redundant Workers)
  BALTIC STATES
  BALTIC STATES
  SOUTH YEMEN
  SOUTH YEMEN
  RUSSIAN FISHING VESSELS (SCOTLAND)
  RUSSIAN FISHING VESSELS (SCOTLAND)
  MR. BRIAN YATES
  MR. BRIAN YATES
  PASSPORTS
  PASSPORTS
  CHANNEL ISLANDS (WARTIME DEPORTEES)
  CHANNEL ISLANDS (WARTIME DEPORTEES)
  BRITISH HONDURAS AND GUATEMALA (REPORT)
  BRITISH HONDURAS AND GUATEMALA (REPORT)
  ANGLO-SOVIET AGREEMENT (BRITISH CLAIMS)
  ANGLO-SOVIET AGREEMENT (BRITISH CLAIMS)
  MR. LEON GREENMAN
  MR. LEON GREENMAN
  SOUTH WEST AFRICANS (UNITED NATIONS RESOLUTION)
  SOUTH WEST AFRICANS (UNITED NATIONS RESOLUTION)
PUBLIC BUILDING AND WORKS
  N.A.T.O. Ammunition and Storage Depot, Glen Douglas
  N.A.T.O. Ammunition and Storage Depot, Glen Douglas
  Lamp Standards (Constitution Hill)
  Lamp Standards (Constitution Hill)
MINISTRY OF HEALTH
  Abortion Act (Private Nursing Homes, Birmingham)
  Abortion Act (Private Nursing Homes, Birmingham)
  Departmental Staff
  Departmental Staff
SHIPPING
  Hovercraft Ferry Services
  Hovercraft Ferry Services
  Fishing Vessels (Icelandic Waters)
  Fishing Vessels (Icelandic Waters)
  Survival at Sea (Protective Clothing)
  Survival at Sea (Protective Clothing)
BOARD OF TRADE
  Overseas Marketing Corporation
  Overseas Marketing Corporation
ROADS
  M5
  M5
  Road Bridge, Lewes
  Road Bridge, Lewes
  A38 (Accidents)
  A38 (Accidents)
RAILWAYS
  Waverley-Hawick Line (Closure)
  Waverley-Hawick Line (Closure)
  Formation and Station Sites, Edinburgh (Disposal)
  Formation and Station Sites, Edinburgh (Disposal)
  Dingwall-Kyle of Lochalsh Line (Closure)
  Dingwall-Kyle of Lochalsh Line (Closure)
  LAW OF CONTEMPT (REVIEW)
  LAW OF CONTEMPT (REVIEW)
  DIVORCE ACTIONS (SCIENTOLOGY)
  DIVORCE ACTIONS (SCIENTOLOGY)
MINISTRY OF POWER
  N.C.B. and British Steel Corporation (T.U.C. Proposal)
  N.C.B. and British Steel Corporation (T.U.C. Proposal)
ELECTRICITY
  Power Stations
  Power Stations
GAS
  Consumption
  Consumption
  Gas Industry (Devaluation)
  Gas Industry (Devaluation)
HOME DEPARTMENT
  Leominster Level Crossing (Inquiry)
  Leominster Level Crossing (Inquiry)
  Road Safety Act, 1967 (Offences)
  Road Safety Act, 1967 (Offences)
  Breath Testing Device
  Breath Testing Device
  Breath Tests
  Breath Tests
  National Marriage Guidance Council (Exchequer Contribution)
  National Marriage Guidance Council (Exchequer Contribution)
COMMONWEALTH AFFAIRS
  Gibraltar
  Gibraltar
  Biafra (British Nationals)
  Biafra (British Nationals)
  South-East Asia
  South-East Asia
NATIONAL FINANCE
  Taxation
  Taxation
  Decimal Currency
  Decimal Currency
  Selective Employment Tax
  Selective Employment Tax
  Aerospace and Electronics Industries (Government Holdings)
  Aerospace and Electronics Industries (Government Holdings)
  Agricultural Training Board
  Agricultural Training Board
AGRICULTURE, FISHERIES AND FOOD
  Argentine and Uruguay Meat
  Argentine and Uruguay Meat
  Foot-and-Mouth Disease (Cancelled Exports)
  Foot-and-Mouth Disease (Cancelled Exports)
  Horticultural Improvement Scheme (Grants)
  Horticultural Improvement Scheme (Grants)
  Departmental Staff
  Departmental Staff
MINISTRY OF DEFENCE
  Fishery Protection Vessel (Icelandic Waters)
  Fishery Protection Vessel (Icelandic Waters)
  Polaris Missile Test Firing (Press and Television Facilities)
  Polaris Missile Test Firing (Press and Television Facilities)
  Scientific Officers
  Scientific Officers
  Defence Costs (Salaries and Wages)
  Defence Costs (Salaries and Wages)
  Departmental Staff
  Departmental Staff
  Service Personnel Overseas (Devaluation)
  Service Personnel Overseas (Devaluation)
EDUCATION AND SCIENCE
  Primary School Children (Milk)
  Primary School Children (Milk)
  Departmental Staff
  Departmental Staff
LOCAL GOVERNMENT
  Supplementary Loan Sanctions
  Supplementary Loan Sanctions
HOUSING
  Differential Rent and Rebate Schemes
  Differential Rent and Rebate Schemes
  PARLIAMENTARY QUESTIONS
  PARLIAMENTARY QUESTIONS
WIRELESS AND TELEVISION
  B.B.C.2 (Bexhill)
  B.B.C.2 (Bexhill)
POST OFFICE
  Letter Mail (Northants)
  Letter Mail (Northants)
TELEPHONE SERVICE
  Automatic Telephone Mechanisms (Decimal Currency)
  Automatic Telephone Mechanisms (Decimal Currency)
SCOTLAND
  Scottish Office (Departmental Staff)
  Scottish Office (Departmental Staff)
  Ambulance Service
  Ambulance Service
  Police Forces (Promotion)
  Police Forces (Promotion)
  Criminal Statistics
  Criminal Statistics
  Motorways
  Motorways
  Retired Persons (Malnutrition)
  Retired Persons (Malnutrition)
SOCIAL SECURITY
  Retirement Pensions
  Retirement Pensions