Sitting of 20 February 1968

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS

  FELIXSTOWE DOCK AND RAILWAY BILL (By Order)
  GREATER LONDON COUNCIL (GENERAL POWERS) BILL (By Order)
  SAINT SAVIOUR, PADDINGTON BILL(By Order)
  CHESHIRE COUNTY COUNCIL BILL(By Order)
  Second Reading deferred till Thursday.

ORAL ANSWERS TO QUESTIONS
  HOUSING

    Private House Building
    Mr. Blakerasked the Minister of Housing and Local Government whether he will now make a statement on the methods by which he proposes to safeguard the private house building programme from the effects of the devaluation of the £ sterling.
    The Minister of Housing and Local Government (Mr. Anthony Greenwood): The best safeguard for the private house building programme is a strong economy. This is what we are seeking to achieve. Option mortgages, and the 100 per cent. guarantee scheme will help private house builders by supporting the demand for home ownership.
    Mr. Blaker: Does the Minister agree that the response to the option mortgage scheme has been slow, and that therefore the scheme is unlikely to have much effect in counteracting the result of devalua-
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    tion? Will he estimate by how much private house building this year will fall below the numbers achieved in 1964?
    Mr. Greenwood: I do not agree with what the hon. Gentleman said in the first part of his supplementary question. Among existing borrowers, the figure opting is 5 per cent., and for new borrowers it is 11 per cent., which is just about what we expected. In reply to the second part of his supplementary question, I remind him that starts in the private sector went up by 40,000 last year, and last year and the signs are very promising for this year.

    Direct Labour Schemes (Financial Control)
    Mr. Costainasked the Minister of Housing and Local Government whether, in the light of the Government's economy measures, he will now withdraw his department's Circular 50/65 and recommend to local authorities the need for tighter financial control over their direct labour building departments.
    Mr. Rossiasked the Minister of Housing and Local Government what steps he will be taking to safeguard ratepayers against overspending by direct labour departments of the kind that has recently come to light.
    Mr. Greenwood: I do not intend to withdraw Circular No. 50/65. I am pursuing the question of financial control and management with the local authority associations. In considering applications for subsidy and loan sanction for direct labour schemes, the Department takes account of the past performance of the direct labour organisation concerned. Direct labour schemes are subject to the same cost yardsticks as schemes undertaken by contractors.
    Mr. Costain: Does the Minister appreciate that the output per man year from direct labour, as shown by his own statistics, is the equivalent of £2,674 a year, whereas that from contractors is £3,300 a year? Is not that a major deficiency? How does he propose to tie in his expanding economy with efficiency if he does not allow efficiency to take its natural course?
    Mr. Greenwood: I believe that direct labour organisations in most cases are extremely efficient, but local authorities should appreciate the need for very strict

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    and firm financial control of them. The hon. Gentleman has no doubt seen the report of the District Auditors' Society, which is in the Library. I am in discussion with the local authority associations with a view to issuing a manual for local authorities on direct labour organisations.
    Mr. Rossi: Has the Minister not gathered from case after case concerning direct labour schemes—Camden, Southwark, Liverpool and so on—that the lesson to be learned is that a local authority cannot control a commercial enterprise of this kind in the same way as private industry can, and that the result has been a loss to the ratepayer in each lamentable case after the other?
    Mr. Greenwood: The hon. Gentleman is wide of the mark. The number of local authorities with the kind of experience to which he refers is a very small percentage of the whole. Improvements can be made, and I am determined that they shall be drawn to the attention of the local authorities.
    Mr. Molloy: Is my right hon. Friend aware that the massive housing problems which we have had for decades are the result of the ineptness and failure of private enterprise, and that in the main the improvements are the result of local authorities' efforts via their direct labour building forces?
    Mr. Greenwood: Both the local authorities and private enterprise have been doing very well under a Labour Government.

    Council Houses (Rent Increases)
    Mr. Marksasked the Minister of Housing and Local Government if he will send a circular recommending to local housing authorities a maximum percentage increase in any one year in the rents of individual council houses.
    Mr. Greenwood: I have advised local authorities to moderate any necessary rent increases so far as practicable, to phase any unavoidable substantial increases over a reasonable period, and to limit the increase due at any one time. Any further advice must await the report of the National Board for Prices and Incomes on this subject.
    Mr. Marks: I thank my right hon. Friend for that reply. Is he aware that a previous Circular from his Department mentioned a figure of 15 per cent.? Is not even this high compared with the 3½ per cent. norm for wages and other matters?
    Mr. Greenwood: The 15 per cent. figure was in a different context. The difficulty about my hon. Friend's suggestion is that, if we were to have a percentage increase, the largest rents would qualify for the largest increases.
    Mr. Lubbock: Is the right hon. Gentleman aware that the South Suburban Co-operative Society is demanding increases amounting to 100 per cent. in rents from certain constituents of mine? If I let him have details, will he see that this matter is also considered by the Prices and Incomes Board?
    Mr. Greenwood: I do not think that can arise out of a Question about council rents.
    Mr. Spriggs: Does not my right hon. Friend agree that rent increases affect the cost of living?
    Mr. Greenwood: Indeed they do. That is why we referred the whole subject to the Prices and Incomes Board.
    Mr. Winnickasked the Minister of Housing and Local Government if he will make a statement on the progress of the proposed council rent increases which were referred to the National Board for Prices and Incomes.
    Mr. Greenwood: I have no statement to make on this subject pending the Board's report.
    Mr. Winnick: Can my right hon. Friend say what action he proposes to take if these outrageous Tory-controlled G.L.C. increases are allowed by the National Board for Prices and Incomes? Many council tenants are very concerned.
    Mr. Greenwood: There is not very much point in referring a matter to an inquiry and then anticipating the decision that it reaches. Perhaps my hon. Friend had better put down that Question after the Board has reported.
    Mr. Frederic Harris: If sensible rents are not agreed, is it not true to say

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    that substantial increases in rates must take place?
    Mr. Greenwood: If the hon. Gentleman is simply asking me to agree that there are three sources of income to the housing revenue account—Exchequer subsidy, rents and rates—the answer is yes.

    Building Site, Wolverhampton (Housing Scheme)
    Mrs. Renée Shortasked the Minister of Housing and Local Government how many dwellings will now be erected on the council's site at Castlecroft, Wolverhampton, under the scheme approved by his Department; how many were to have been provided under the original scheme which he approved and which was discarded by the local authority; and what will be the total additional cost to the ratepayers of Wolverhampton.
    The Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. James MacColl): The revised scheme has not yet been sent to the Department for formal approval. I understand it will provide for some 156 dwellings. The earlier scheme was for 288. My right hon. Friend is not in a position to make any detailed cost comparisons.
    Mrs. Short: Does not my hon. Friend think that it is a very serious matter for a town with a land shortage and a long waiting list for houses to lose 130 housing units on one site alone? Is he aware that the discarded plan cost the ratepayers £40,000 and that this had to be met by increasing council house rents? Will he look at the matter again and urge the local authority to reconsider the original scheme?
    Mr. MacColl: I do not think that the old scheme went to final tender on cost, and the new scheme has not yet reached us. I cannot, therefore, compare costs. But I will bear in mind what my hon. Friend has said.

    Building Materials
    Mr. Gresham Cookeasked the Minister of Housing and Local Government whether, in view of the necessity to improve the balance of trade, he will circularise all architects and engineers
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    drawing up plans for building local authorities' houses, urging that wherever possible indigenous materials are used for the construction of such buildings and the use of imported materials reduced to a minimum; and whether there are existing instructions to architects and engineers in this connection, and of what nature.
    Mr. MacColl: Subject to building regulations, the choice of materials is within the discretion of local authorities and there is no standing advice on this matter from the Department. My right hon. Friend will however consider any suggestions designed to reduce the use of imported materials.
    Mr. Gresham Cooke: Will the hon. Gentleman send a Circular to local authorities urging them to cut out things like continental doors, fancy fittings, Italian terrazzos, foreign glass and the rest which can be used in these houses? In view of the importance of the balance of payments, will he do something about it?
    Mr. MacColl: Local authorities and builders have a great incentive to be cost-conscious now. My right hon. Friend is considering what advice to give local authorities and will bear in mind the point made by the hon. Gentleman.

    Servicemen (Emergency Housing Scheme)
    Mr. Martenasked the Minister of Housing and Local Government how many houses planned for civilian occupation have now been or are planned to be acquired for occupation under the emergency housing scheme by Servicemen returning from overseas as the result of the Government's defence cuts; what effect this will have on local authorities; and if he will make a statement.
    Mr. MacColl: The total target under the emergency housing scheme is about 8,100 houses of which 2,750 have been completed and a further 5,000 are in process of acquisition. In most cases, these houses were already under construction or planned to be built by private builders, and local authorities will have taken that development into account in considering the demand on local services.
    Mr. Marten: Will this not reduce the supply of houses to civilians and, therefore, increase somewhat the pressure on local authorities? Can the hon. Gentleman show these figures separately in the housing statistics? What is the cost of these houses?
    Mr. MacColl: The cost is a matter for my right hon. Friend the Secretary of State for Defence. I think that private developers, if they want some further stimulus to build, will find this of help to their plans.
    Mr. Lipton: Does my hon. Friend realise that, even with the provision made under the emergency housing scheme. the. extent to which local authorities make provision for Servicemen on their discharge from the Forces is still miserably inadequate?
    Mr. MacColl: I think that local authorities hope to keep this matter very much to the forefront of their policy.

    Housing Programme
    Mr. Frank Allaunasked the Minister of Housing and Local Government how many houses he estimates are likely to be completed in 1968, 1969, 1970 and 1971.
    Mr. Murtonasked the Minister of Housing and Local Government whether he will now announce a revised national housing target for 1970 and for the intervening years; and whether he will make a statement.
    Mr. Allasonasked the Minister of Housing and Local Government what revisions he has now made to the 1970 housing target.
    Mr. Greenwood: I expect the number of houses built in the United Kingdom in each of the years to 1971 to be well over 400,000. I am not, however, prepared to make precise estimates for particular years, since it is difficult to forecast with precision the performance of the private sector. The measures we have taken to stimulate the demand for home ownership should however help towards a good result. My aim is to see that every year the largest practicable number of houses are completed.
    Mr. Allaun: Would the Minister agree that, even if the priority area programme
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    is to be maintained, as I hope it is, houses should not be built elsewhere unless they are really needed? Would he therefore strive to get somewhere near the 500,000 level rather than the 400,000?
    Mr. Greenwood: I have said that my aim is to see that every year the largest practicable number of houses is completed, and I shall certainly do everything that I can to achieve that aim.
    Mr. Murton: The right hon. Gentleman has admitted his dependence upon the private sector. May I ask him how he expects the private sector to play its part when it is held back by Government Measures on the economic front? Is this the way that the Ministry intends to build a new Britain?
    Mr. Greenwood: I have not admitted anything. The Government have always said that their object is to have building divided as to 50 per cent. private sector and 50 per cent. local authority. I would remind the hon. Gentleman that the Government have provided the option mortgage scheme and the 100 per cent. guarantee scheme, which is something that hon. Gentlemen opposite never thought about.
    Mr. Allason: The House will hear with deep regret the abandonment of the very sacred pledge to meet the 500,000 target. Even if the Minister is to abandon his target for public enterprise, could he not try again as regards private enterprise? If he could see that sites are available, so that private enterprise could build, then he might have a chance of getting nearer to his original target.
    Mr. Greenwood: I am glad to hear the hon. Gentleman is sad, because his right hon. and learned Friend the Member for Hexham (Mr. Rippon), in October, was complaining that we were building too many houses. It is very comforting to have the hon. Gentleman's assurance. We shall certainly do everything possible to allow local authorities to go ahead. This is not a cut in the number to be completed this year, it is a cut in a programme that we had anticipated would be possible in the years after 1968.
    Mr. Crawshaw: Would my right hon. Friend agree that the economic prospects indicate that the private sector will not come up to its expected target?

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    Would he therefore make every effort to increase the target for the public sector?
    Mr. Greenwood: I have not set a target for the private sector, where, my hon. Friend will appreciate, it is not possible for the Government to set a target. There is every reason to believe that this year the private and public sector will build more houses than in 1967.

    Council Houses (Single-Person Dwellings)
    Mr. Christopher Priceasked the Minister of Housing and Local Government whether, in areas of high under-occupancy and severe shortage of building land, he will make special grants to encourage local authorities to redevelop council houses as single-person dwellings.
    Mr. MacColl: In suitable cases grants are paid for the conversion of council houses into flats but I would not favour the demolition of fit houses.
    Mr. Price: Is my hon. Friend aware that most of the council estates built in the 1920s were solely three-bedroomed family houses, and that the old people who now almost exclusively live in them are most reluctant to live a long way away, so that conversion is not enough and demolition will very soon be the answer?
    Mr. MacColl: A great deal can be done by conversion, and by prudent management in moving people nearer their families, so that one can reduce the amount of under-occupation in particular areas.
    Mr. Allason: Could the Minister tell us what investigation the Ministry is undertaking into under-occupation in the public and private sectors, or whether they feel that they already have that information?
    Mr. MacColl: From time to time we have sample surveys into the state of houses, but the responsibility for management is essentially that of the local housing authority, not of my right hon. Friend.

    Private Houses
    Mr. Murtonasked the Minister of Housing and Local Government how many permanent dwellings were com-
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    pleted by private builders in Great Britain in 1967; and what estimate he has made of the probable number of such completions in 1968.
    Mr. Graham Pageasked the Minister of Housing and Local Government if he will take steps to reverse the decline in the number of houses completed in the private sector since October, 1964.
    Mr. Greenwood: In 1967 private builders in Great Britain completed 200,438 dwellings. It is too soon to estimate how many they will complete in 1968. Demand will be stimulated by both the mortgage option and mortgage guarantee schemes and the prospects for a rise in completions in 1968 are reasonably good.
    Mr. Murton: Does the Minister not recollect that, in 1967, 18,000 fewer houses were built by private enterprise than in 1964 as a result of the Government's austerity measures? How far will the Minister allow this to proceed before some of these appalling restrictions are taken off the private building industry?
    Mr. Greenwood: The hon. Gentleman cannot have listened to an answer which I gave him earlier. The really relevant figures at the moment are that starts in the private sector last year were up by 40,000, and the figure for the last quarter of 1967 was 58,000, which was about 6,000 up on the corresponding quarter of the previous year. Starts were up substantially and, presumably, in consequence, completions will follow suit.
    Mr. Graham Page: Does the Minister not realise that those who have to live in houses are concerned with completions and not with starts? Is it not a fact that in 1967 there were some 5,000 fewer completions than in 1966, some 13,000 fewer in 1966 than in 1965, and some 14,000 fewer in 1965 than in 1964?
    Mr. Greenwood: The hon. Gentleman knows perfectly well why there was difficulty in completions of private houses in the early part of last year. Towards the end of the year, completions were rising very sharply and, unless hon. Gentlemen opposite spread too much despondency in the country, the houses started by private enterprise will be completed.
    Mr. John Hynd: Will not the Minister concede to the Opposition that we should have fewer starts and more completions?

    Housing Programmes (Northern Region)
    Mr. Bob Brownasked the Minister of Housing and Local Government what e feet the proposed curtailment of house-building by local authorities in 1969–70 will have on the programmes of authorities in the Northern Region and of the programme of Newcastle City Council.
    Mr. MacColl: The programmes of Newcastle City Council and other priority areas in the Northern Region will be safeguarded as we have already made clear. I cannot estimate what the precise allocation for particular regions will be until we have completed our discussions with the priority authorities about their requirements.
    Mr. Brown: Is my hon. Friend aware that many Tory controlled local authorities are quite prepared to see the measures as an excuse seriously to curtail house building? Is he further aware that the Newcastle City Council, with a waiting list of 6,000, is contemplating selling land within the city boundary to a "spec" builder?
    Mr. MacColl: I should be sorry to see a fall in the great housing record of Newcastle, but the council must make its own decisions.
    Mr. Graham Page: Is the House to understand from the hon. Gentleman's Answer that there is no allocation of these cuts throughout the country from area to area? Is this another example of the failure to prepare the cuts after devaluation?
    Mr. MacColl: No. It is an example again of our extraordinary success in getting a record housing programme through and completed with the full cooperation and confidence of local authorities.

    Building Work (Clearance of Roads and Footpaths)
    Mr. Bob Brownasked the Minister of Housing and Local Government if he will take steps to have included in all local authority housing contracts a clause making it legally binding upon the contractor to keep all roads and footpaths clear of mud up to the date of completion of the whole contract.
    Mr. MacColl: No, Sir. It is already an offence under the Highways Act, 1959, to deposit anything on the road which is a danger or nuisance to road users, and I do not think a contractual clause on the lines suggested would add much further protection.
    Mr. Brown: Is my hon. Friend aware that many of my constituents residing on the new Kenton Bar estate have suffered considerable inconvenence and distress as a direct result of the contractor failing to cope with this problem? Will he inform Newcastle Corporation that it has the power to deal with this problem?
    Mr. MacColl: I have no information about this. If my hon. Friend would care to write to me about it I should be happy to do what I could to help him.

    Rent Act, 1965
    Mr. Barnesasked the Minister of Housing and Local Government what steps he is taking to bring to the attention of more tenants in areas where rented accommodation is in short supply their rights under the Rent Act, 1965.
    Mr. MacColl: My right hon. Friend proposes to launch within the next few months a publicity campaign involving the use of posters on commercial sites and leaflets and he is considering the use of other publicity media.
    Mr. Barnes: I welcome any steps which my hon. Friend is able to take in this direction. Is he aware that the failure in some cases of local authorities and the police to take prompt action, where there is harassment after a successful application to the rent officer, is still proving a serious disincentive to some of the people who most need the protection of the Act?
    Mr. MacColl: I am always glad to look into complaints about failure to take proceedings in cases of harassment. I do not know of any bad cases, but I agree about the importance of making clear to tenants and landlords their rights to go to the rent fixing machinery.
    Mr. Graham Page: If the rent officers are to be reduced by 60 during 1968, what is the point of this campaign?
    Mr. MacColl: The point of this campaign is to direct it to places where there is the most risk of exploitation by landlords.

    Rent Act, 1955
    Mr. Allaunasked the Minister of Housing and Local Government if he will seek to amend the Rent Act, 1955, to make it a criminal offence for landlords to charge new tenants more than the previous controlled rent.
    Mr. MacColl: My right hon. Friend has no proposals for altering the provisions of the Act, which enables either party in a regulated tenancy to apply for the registration of a fair rent, which will be the maximum legally recoverable.
    Mr. Allaun: Does my hon. Friend appreciate that new tenants are usually unaware of the previous controlled rents paid and have great difficulty in ascertaining what they were?
    Mr. MacColl: If there has been a previous regulated rent it is an offence to give false information about it.

  LOCAL GOVERNMENT

    Industrial Effluent (Disposal)
    Mr. Wallasked the Minister of Housing and Local Government what was the total estimated cost in 1966–67 of approved schemes for the disposal of effluent by industry and local authorities, respectively, necessitated by the new standards of pollution established by the river boards; and what Government grants have been made.
    Mr. Robert Howarthasked the Minister of Housing and Local Government what estimate he has made of the cost of capital expenditure over the next 10 years on sewage disposal and treatment equipment and buildings by local authorities necessary to give effect to the Rivers (Prevention of Pollution) Acts, 1951, and 1961 and the Public Health Act, 1961.
    Mr. Peytonasked the Minister of Housing and Local Government (1) if he will set up an inquiry into the rapidly growing problem of the disposal of industrial effluent; and if he will make a statement;
    (2) what estimate he has made of the total capital expenditure over each of the next five years on a national basis on the disposal of industrial effluent.
    The Joint Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. Arthur Skeffington): This subject was examined by a sub-committee of the Central Advisory Water Committee before the relevant legislation was passed in 1961. My right hon. Friend has since had correspondence about it with the Confederation of British Industry and also met it, and he has studied individual cases where appeals have been made to him. My right hon. Friend is satisfied that Parliament did right to pass this legislation, and that inadequate control of discharges into rivers is not only insanitary but uneconomic. The practical application of the Acts can only be studied usefully in relation to particular cases. For this reason he has not placed on local authorities and industry the burden of compiling returns to enable him to arrive at a total of how much less they might spend if their effluents were dirtier, and this element is not treated separately for the purpose of grants.
    Mr. Speaker: Order. Answers are getting rather long.
    Mr. Wall: Why has disposal of trade effluent not been costed by the Government? River boards are demanding higher standards but no one knows the cost to industry or local authorities. Will the hon. Gentleman assist the local authorities in this matter?
    Mr. Skeffington: We are studying the problem and assembling some facts but that does not in any way derogate from my Answer.
    Mr. Howarth: Will my hon. Friend accept that, even if some of the more modest estimates by sections of industry and others of the likely cost of cleaning our rivers are correct, some estimate ought to be made by the Government?
    Mr. Skeffington: I thought that I had already indicated that, as we build up information, we shall know more about this matter. Local conditions vary enormously.
    Mr. Peyton: Is the hon. Gentleman aware that the squeezing together of all these Questions, although they are

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    distantly related, is typical of the dilettante attitude of the Government towards this very important problem? Does not he think it odd that, faced with this great and growing problem which presents increasing claims upon our national resources, the Government are not even able to give any estimate of costs?
    Mr. Speaker: Mr. Moyle—Question No. 6.
    Mr. Peyton: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the reply, I beg to give notice that I shall seek to raise the matter on the Adjournment at the earliest opportunity.

    Tree Preservation Orders
    Mr. Moyleasked the Minister of Housing and Local Government whether he is satisfied that the present powers under tree preservation orders are adequate far as town and country amenity is concerned; and whether he will make a statement.
    Mr. Skeffington: Yes, Sir. The Civic Amenities Act, 1967, strengthened and added to existing powers, increasing the maximum penalty for unauthorised felling, requiring the replacement of trees which die or are cut down, and the preservation or replanting of trees affected by new development.
    Mr. Moyle: Will my hon. Friend accept that the enthusiasm of the public for this part of the Civic Amenities Act will increase to the extent to which they can see action taken in their own areas? Will he undertake to ensure that these powers are used as vigorously as possible?
    Mr. Skeffington: I am happy to give that assurance. We sent an explanatory communication to the local authorities urging them to use these new powers.

    Land Commission
    Mr. Willeyasked the Minister of Housing and Local Government what amount of land has been acquired by the. Land Commission; and how much of the land has been disposed for development.
    Mr. William Priceasked the Minister of Housing and Local Government how many pieces of land have to date been purchased by the Land Commission.
    The Minister of State, Ministry of Housing and Local Government (Mr. Niall MacDermot): The Commission is negotiating for the acquisition of some 800 acres in Great Britain for disposal mainly to house-builders and also to local authorities. None has yet reached the stage of completion. Many other cases are being investigated.
    Mr. Willey: Is my hon. and learned Friend aware that the Land Commission should now be getting under way? Can he assure me that it will not be subject to Treasury brakes?
    Mr. MacDermot: I do not think that there is any question of Treasury restraint in developing the programme. I agree with my right hon. Friend that this is a time for us to look forward to the Commission's acquisition programme getting under way. It would not have been right for it to have attempted to plunge at once into its acquisition programme without making a proper examination of land supply and demand. That is what the Commission has been doing in the short time in which it has been in existence.
    Mr. Price: Is not my hon. and learned Friend's Answer an astonishing admission of failure? If, as we are told, the Commission has a staff of 1,300, can he estimate what footage each civil servant will require in the first 12 months?
    Mr. MacDermot: I do not agree that this indicates failure. The majority of the staff are concerned with the collection of levy and not with the land acquisition programme. As I have said, it would not have been right to plunge at once into the acquisition programme. Careful preparation and consultation are required before the Commission begins the process of acquisition, which itself is a lengthy process.
    Mr. Costain: Does not the hon. and learned Gentleman appreciate that 800 acres is about three days' supply of land? Is not this deplorable? Does not he realise that builders are hopelessly

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    short of land? What is he going to do about it?
    Mr. MacDermot: I agree that 800 acres is a small amount but, as I have said, many other cases are being investigated and these cover many thousands of acres.
    Mr. William Priceasked the Minister of Housing and Local Government how much the Land Commission will cost during its first 12 months; and what is its estimated income during the same period.
    Mr. MacDermot: Approximately £3·2 million. I must ask my hon. Friend to await the Financial Statement for the first year's yield of levy, but the build up of this and of the proceeds from land transactions is still in the very early stages.
    Mr. Price: Is it not apparent that the Land Commission is a very expensive luxury? Would it not be wise to scrap it and start again? Is not the answer the public ownership of all building land?
    Mr. MacDermot: My hon. Friend's solution would be rather more expensive. As I have explained in answer to an earlier Question, inevitably the build-up of the work of the Commission has been slow to start with, and the yield of the levy during the first year will not be great, largely because of the extensive concessions made during the passing of the Act to minimise hardship in the initial period.
    Mr. Graham Page: Does not the hon. and learned Gentleman think that his hon. Friend the Member for Rugby (Mr. William Price) should have stopped his supplementary question at the words "scrap it", and left it at that? Has not the expenditure of this £3·2 million resulted merely in making land more scarce and more expensive?
    Mr. MacDermot: No. There is another Question later dealing with land prices. The hon. Gentleman's conclusions are quite wrong.

    New Towns and Town Development Schemes (Financial Assistance)
    Mr. Ridsdaleasked the Minister of Housing and Local Government why it is his policy to grant assistance to local
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    authorities when new towns are developed or where overspill is planned, but not when private development has taken place or is planned.
    Mr. MacColl: Financial assistance to local authorities under the New Towns and Town Development Acts must be devoted to planned development and cannot be used to promote the natural growth of towns through private development. Within new towns and town development schemes there is of course an assured place for private development.
    Mr. Ridsdale: Can help be given to local authorities, particularly where private developers are prepared to pay half the cost of such planned development, as in the case of Frinton and Walton?
    Mr. MacColl: The difficulty is that it would be hard to distinguish Frinton and Walton from other expanding towns which are also enlisting the aid of private developers. I do not think that there is a case for giving special treatment.

    Land Commission Act (Betterment Levy)
    Mr. Ridsdaleasked the Minister of Housing and Local Government whether he will seek to amend the Land Commission Act so that the betterment levy is not paid by retirement pensioners.
    Mr. MacDermot: No, Sir.
    Mr. Ridsdale: Does the Minister think it fair that an old-age pensioner, about whom I have sent details, should have to pay £70 on £350 from the sale of his back garden, when he was going to use the money for repairs to his bungalow and a holiday, which he had not had for four years? Is it not a scandalous example of the way in which the Land Commission is working?
    Mr. MacDermot: In the example that the hon. Gentleman has given, as in others, the levy is at the rate of 40 per cent. on the increase in value due to betterment. To try to make exceptions because of hardship cases would open the door wide to all sorts of unjustified exemptions. I am aware of the case to which the hon. Gentleman has referred. The Commission has power to allow the payment by instalments. If there is any difficulty I hope that the person concerned will make an application accordingly.
    Mr. Graham Page: With these examples of hardship due to payment of betterment levy cropping up all over the country now, will not the hon. and learned Gentleman consider initiating legislation to exempt the private dwelling house, the residence of the betterment levy payer, in the same way as it is exempted from Capital Gains Tax?
    Mr. MacDermot: There are some hardship aspects which need to be considered, but I do not think we can go as far as the hon. Gentleman suggested.
    Mr. Ridsdale: In view of the unsatisfactory nature of that reply, I beg to give notice that I shall seek to raise this matter on the Adjournment at the earliest possible moment.

    Sewage Disposal
    Mr. Robert Howarthasked the Minister of Housing and Local Government if he will set up an inquiry into the disparity in cost between various parts of the country for the disposal and treatment of sewage with a view to taking steps to equalise standards and costs to the ultimate benefit of domestic and industrial users.
    Mr. Skeffington: No, Sir. Given the differences in the wastes to be disposed of and in local facilities for disposal of effluent and sludge, equalisation of either standards or costs would be impracticable.
    Mr. Howarth: What justification can there be for the type of disparity which is reported, which places such a burden on particular domestic and industrial users? Is there nothing that the Government are prepared to do about this that would help?
    Mr. Skeffington: I have already dealt with this point but we should be prepared to look into individual cases. They vary very widely in view of the nature of the effluents to be disposed of.
    Mr. Peyton: In view of the paucity of information offered by the Government on this subject, why on earth are they resisting a request for an inquiry? Information is obviously required and they do not have it.
    Mr. Skeffington: The legislation dealing with the subject, as the hon. Gentle-
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    man knows, goes back over a great many years. The 1961 legislation is imposed on top of it all. We are carrying out investigations all over the country to see what are the total results, and if we find it necessary, further action will be taken.
    Mr. Graham Page: Is the hon. Gentleman aware that he has had the opportunity in two Questions now, of explaining the Government's policy, and there seems to be no policy at all? Would he give some assurance that new legislation is under consideration if the existing legislation is not sufficient for him to find out the cost of this scheme?
    Mr. Skeffington: I shall be in a position to tell the House when we have had more experience of the working of the legislation passed by the Administration supported by the hon. Gentleman.

    Rate Support Grant (Educational Priority Areas)
    Mr. Christopher Priceasked the Minister of Housing and Local Government if he will amend the formula for the rate support grant so that it includes a substantial element based on the criteria laid down by the Plowden Report on Primary Schools for educational priority areas.
    Mr. Skeffington: The arrangements for the distribution of rate support grant take some account of both the differing needs and the differing rate resources of local authorities. My right hon. Friend is of course, keeping the arrangements under review but he has no proposals at present to amend them.
    Mr. Price: Is my hon. Friend aware that as a result of this Report the Department of Education has agreed to pay substantial differential capital payments to local authorities to help them with these priority areas, but under the present arrangements for the rate support grant, there is no machinery to pay the necessary extra current expenditure to run those capital projects?
    Mr. Skeffington: As I have explained, my right hon. Friend is keeping this matter under review and no doubt representations can be made to the Ministry of Education, if the need arises.

    Woodlands (Safeguarding)
    Mr. Moyleasked the Minister of Housing and Local Government if he will give details of the guidance he is giving local authorities in order to safeguard traditional amenity woodland.
    Mr. Skeffington: Amenity woodlands are the subject of a series of conferences which this Department is organising in areas known for the quality of their deciduous woods. These bring together the local authorities, statutory bodies, woodland owners and farming, forestry and amenity interests, to discuss what can be done to safeguard the woodlands. Local authorities have power to make tree preservation orders; and to buy specially important woodlands.
    Mr. Moyle: At the risk of drawing attention to the inconsistencies of hon. Gentlemen opposite who voted for the Civic Amenities Act under which my right hon. Friend's powers are exercised, can my hon. Friend say whether there is sufficient staff in local authorities to administer this part of the Act?
    Mr. Skeffington: There are difficulties in some areas, but it would be fair to say that, taking the country as a whole, this is not a feature which is preventing the sort of development that we want to see.

    Stansted Airport (Runways)
    Mr. Biggs-Davisonasked the Minister of Housing and Local Government what representations he has received from local authorities and other bodies and individuals in Essex against the proposed realignment of Stansted runways; and what reply he has made.
    Mr. MacDermot: My right hon. Friend has received representations from 15 local authorities in Essex, including six parish councils, and six local authorities in Hertfordshire, and from 15 other organisations and 14 private objectors or groups of objectors.
    These views are now being carefully considered.
    Mr. Biggs-Davison: Will the Minister kindly circulate in the OFFICIAL REPORT a list of the authorities and others who have made these representations to his Department? Does he realise that the
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    proposed realignment would make matters even worse for my constituents and subject even more Essex schools to intolerable noise? What new inquiry is proposed?
    Mr. MacDermot: Certainly I will consider the hon. Gentleman's suggestion about circulating the list. I think it is better that I do not comment on the representations which have been made, as they are still under consideration.
    Mr. Boston: Can my hon. and learned Friend say whether there is any substance in the suggestion by the anti-Stansted lobby that the Council on Tribunals might be told to look into the possibility of further inquiries? Does he not think that there have been enough inquiries already, and that it is now time to get on with the work of building the airport?
    Mr. MacDermot: I know that a suggestion has been made about the Council on Tribunals and that the Council is itself considering the matter. With regard to the question of further inquiries, this is among the matters which have been urged in the representations to which I have referred. Like all the other representations, it is being considered.
    Mr. Allason: Has the Minister had any representations from the Railways Board, as I understand that British Railways have discovered that the scheme will cost another £20 million? What does he intend to do about objections from those people who, whilst not aggrieved by the previous scheme, will be aggrieved by the new scheme which is to be put forward? Surely they are entitled to make their objections at a public inquiry.
    Mr. MacDermot: The Railways Board is not among the bodies to which I referred. The second matter raised by the hon. Gentleman is among those being considered and which were the subject of representations.
    Mr. Maxwell-Hyslop: Why does the Minister not admit that the Government have been wrong about this altogether and should start again from scratch?
    Mr. MacDermot: Because we do not agree with the hon. Gentleman's premise. We think that the proposal made by this Government, which is, incidentally, the one made by the previous Government, is right.
    Mr. George Jeger: Since the original proposal depended on the runway being left as it was and utilised, and that has now been discarded, is there not a case for an independent new inquiry to be held?
    Mr. MacDermot: I can only repeat that I do not want to comment on matters on which we have received representations. This is one of them.

    Land Prices
    Mr. Rossiasked the Minister of Housing and Local Government what increase in land prices has taken place since 6th April, 1967; and what effect the starting of the betterment levy has had an those prices.
    Mr. MacDermot: Recent prices in the land market have not shown a constant pattern and it will be some time before a firm judgment can be made on trends in 1967. The figures so far available suggest that the average increase for the year 1967 seems likely to be lower than in recent years.
    My right hon. Friend has asked the Land Commission to use their acquisition powers if there is evidence of landowners trying to pass on the levy in increased prices.
    Mr. Rossi: From what source does the Minister of State derive his information, because the professional information appears to indicate a 20 per cent. increase in the cost of land based on pre-levy prices? This is the professional information as shown, for example, in the Financial Times which, in detailed terms, means an increase of £200 in the cost of a three-bedroomed house as a result of the levy?
    Mr. MacDermot: The information comes from a wide variety of sources and includes the reporting of transactions to the Inland Revenue. I assure the hon. Gentleman that the figures that he is quoting are very wide of the mark and very wide of the figures to which I have referred. It is too early for me to try to give any firm figure, but I assure the House that the indications are that there will be a substantial drop in the rate of growth.
    Mr. Frank Allaun: Is my right hon. Friend aware of the feeling that the big
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    landowners, their lawyers, surveyors and political spokesmen will succeed somehow in circumventing the intentions of the Act and that more drastic action is needed to deal with the land racket?
    Mr. MacDermot: I hope that any hon. Members who have evidence to suggest that the levy is being passed on in increased prices will report these matters to the Land Commission.
    Mr. Rossi: On a point of order. In view of the unsatisfactory nature of the reply, I beg to give notice that I wish to raise the matter on the Adjournment at the earliest possible moment.

    Rivers (Cleanliness)
    Mr. Wallasked the Minister of Housing and Local Government why he approves river authorities setting different standards of cleanliness of river water; when standards will be introduced for estuaries; and if he will take steps to co-ordinate the referred standards and to see that they are introduced gradually.
    Mr. Skeffington: It is right that standards for effluents discharged to a river should vary according to conditions in the river at the point of discharge and the use made of the river downstream. There is a right of appeal to the Minister if Standards are thought too high. Standards can already be fixed for certain discharges to estuaries.
    Mr. Wall: As the relevant legislation is seven years old and the Government have not even costed the price of cleaning our rivers, let alone estuaries, about which the Minister did not reply, will the hon. Gentleman take steps to co-ordinate this and bring in the increased costs gradually over a period of years?
    Mr. Skeffington: I understand that under the Clean Rivers Act the river authorities pay special regard to the discharge of effluents into tidal waters and, indeed, have standards which are different and more advantageous to industry.
    Mr. Wall: On a point of order. In view of the unsatisfactory nature of the reply, I beg to give notice that I wish to raise the matter on the Adjournment at the earliest opportunity.

  SOUTH AFRICA (SECURITY COUNCIL RESOLUTION)
  Mr. Winnickasked the Prime Minister what recent consultations he has had with the Prime Minister of South Africa regarding the resolution unanimously adopted by the Security Council of the United Nations on 26th January.
  The Prime Minister (Mr. Harold Wilson): None, Sir.
  Mr. Winnick: Can the Prime Minister state what representations have been made about the many South African political prisoners who have been physically tortured, as well as 37 South-West African prisoners? Instead of promising arms, should not the right hon. Gentleman the Member for Kinross and West Perthshire (Sir Alec Douglas-Home) try to visit such prisoners and also the courageous woman under house arrest, Helen Joseph?
  The Prime Minister: I must make it clear that I am not responsible for the movements of the right hon. Gentleman while he is abroad.
  As to representations to the South African Government, which was the subject of the Security Council resolution, representations have been made, on instructions, by Her Majesty's Ambassador in South Africa.
  Mr. Heath: Can the Prime Minister tell the House whom he considers now to be the lawful Government in South-West Africa? Who is responsible for law and order there?
  The Prime Minister: I have nothing to add to the statement made by my noble Friend, Lord Caradon, when he voted for this particular motion in the United Nations. The South Africans have responsibility at this time for law and order, but we have voted for the resolution in the United Nations. At the same time, we have said that we do not go along with all parts of it which at the present time assert a United Nations responsibility for law and order there.

  EUROPEAN TECHNOLOGICAL COMMUNITY
  Mr. St. John-Stevasasked the Prime Minister whether he will make a statement on the progress being made to
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  establish a European technological community.
  The Prime Minister: I would refer the hon. Member to the Answer I gave on the 1st of February to Questions by my hon. Friends the Members for Faversham (Mr. Boston) and Newark (Mr. Bishop).—[Vol. 757, c. 404.]
  Mr. St. John-Stevas: Since this has proved one of the happier of the Prime Minister's initiatives—[An HON. MEMBER: "The only one."]—no; if I wish to be rude to the Prime Minister, I will be rude on my own occasion—should he not be pursuing it both in private and in public with much greater vigour and making clear exactly what new institutions he has in mind to set up to make it work?
  The Prime Minister: Yes, Sir. The hon. Gentleman will be aware that the response to our broader major initiative in Europe has not been the responsibility of Her Majesty's Government. The hon. Gentleman knows the difficulties.
  We have been discussing the technological community with representatives of the Dutch Government on their visit to London this week. My right hon. Friend the Minister of Technology is currently discussing with the C.B.I. and others concerned our proposals—originally their proposals—for an institute of technology in Europe. We are pursuing it with all concerned.
  Dr. David Owen: Is my right hon. Friend aware that by refusing to share the technology of Capenhurst and partial enrichment we are in danger of driving the European countries to establish their own enrichment plant and in this way we shall get no commercial contracts for this valuable investment?
  The Prime Minister: I made this clear to President de Gaulle last June. We are prepared to have the fullest discussions on the basis of a European nuclear programme provided, but only provided, we are part of a wider European market.
  Mr. James Davidson: Can the Prime Minister give the House any information on the West German reaction to this proposal, which has been put forward on a number of occasions by my hon. Friends and myself?
  The Prime Minister: Is the hon. Gentleman referring to the main question or the question of enriched uranium?
  Mr. Davidson: To the main question.
  The Prime Minister: At the time the Guildhall speech was made we had a very warm welcome from the German Government, and they have pursued it further with us. The hon. Gentleman will be aware that the Benelux proposals, which we have supported, provide for both bilateral and multilateral contacts on technological questions.
  Mr. Heath: Is the Prime Minister aware that a new institution like a technological community, at a time when the executives have been fused and there is a general move towards fusion by all the communities, may not be the most helpful way of proceeding, whereas to encourage the idea of a technological institute may produce very good results for our own industry? About enrichment, is this not a matter which is dealt with by, or at least comes under, the nonproliferation treaty arrangements? Are there not very big issues at stake here, as well as the servicing of nuclear reactors?
  The Prime Minister: On the first question, we have always made it clear that oar proposal for a European technological community did not mean adding a fourth institution, particularly, as the right hon. Gentleman said, at a time when the three existing communities are being merged. What we want is a very strong technological component within the Common Market arrangements, in addition to such proposals as the European institute of technology.
  On the second question, there is, I think, nothing in the proposed terms of the non-proliferation treaty which would prevent our having the fullest co-operation with European partners on the production of enriched uranium 235 or other nuclear products for the purposes of the civil development of nuclear energy. The non-proliferation treaty—[An HON. MEMBER: "Get on with it."]—I was answering two important questions which the right hon. Gentleman put, and he understands the answers even if his hon. Friend does not. There is nothing in the treaty to prevent that kind of development.
  Mr. Heath: Would the right hon. Gentleman make it clear—[An HON. MEMBER: "Not again."]—I should like to clarify this point, because of its importance in relation to weapons. Is the Prime Minister saying that he has indicated that he would be prepared to make available to the European countries the "know-how" of enrichment of uranium as we have it at Capenhurst?
  The Prime Minister: This is certainly an important question. The answer is that, last summer, I told President de Gaulle and other European leaders that we were prepared to join them in setting up a joint European system for the production of enriched uranium 235 on the ground that we have the "know-how". Others have a certain kind of "know-how", although not comparable with ours. But they do have certain other advantages, like cheap electricity—although Pierrelatte is very expensive, as the right hon. Gentleman knows—and we offered to join the French and others in a joint programme for development.

  WOMEN (HUMAN RIGHTS YEAR)
  Dame Irene Wardasked the Prime Minister what special legislative and administrative action with regard to equality of rights for women he will propose to celebrate the fiftieth anniversary of the enfranchisement of women and Human Rights Year.
  The Prime Minister: The hon. Lady will know that following my reply to her supplementary question on 13th February she has sent me a number of suggestions which I have in turn brought to the attention of my right hon. Friend the Chancellor of the Exchequer. The hon. Lady will also know that as her suggestions mainly involve fiscal matters I cannot comment at this season of the year.
  Dame Irene Ward: I thank the right hon. Gentleman for that reply, but there are a number of things which are not necessarily the Chancellor's responsibility. Is not policy mainly in the hands of the Prime Minister? I have sent him constructive proposals, some of which have emanated from the Chairman of the Parliamentary Labour Party, so may I hope for results before long?
  The Prime Minister: I am most grateful to the hon. Lady, of course, for

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  responding to my request for specific proposals. Most of them are fiscal, and she will understand why I cannot comment on them, but we shall certainly study any others which she sends us.
  Mrs. Lena Jeger: Is my right hon. Friend aware that we were able to sign the U.N. Covenant about the political rights of women only with the longest list of reservations ever submitted to the U.N., many of them relating to the position of women in the dependent territories? Will he consider this, especially in Human Rights Year?
  The Prime Minister: Certainly, but this country, when it signs these Conventions, intends its signature to mean something. That is why we make it very plain if there are matters on which, for one reason or another, particularly independent territories, the Convention cannot be carried out to the full letter.
  Mrs. Ewing: Have the Government investigated the cost of enforcing—[HON. MEMBERS: "Reading."]—has the right hon. Gentleman investigated the cost—[Interruption.]
  Mr. Speaker: Order. It is women's rights year.
  Mrs. Ewing:—of enforcing the principle of equal pay for women? If so, when, and what findings have the investigations produced?
  The Prime Minister: The hon. Lady will probably be aware of the statements of my right hon. Friend the Minister of Labour on this question. Some estimates have been made of this, and my right hon. Friend is consulting industry on the whole question of equal pay for equal work. I should be glad to send the hon. Lady a copy of the statement made by my hon. Friend the Joint Parliamentary Secretary to the Ministry of Labour on this question.

  INDUSTRIAL PRODUCTION
  Sir C. Osborneasked the Prime Minister, in view of the fact that November's rise of 1½ per cent. in industrial production was still below the pre-squeeze level of July, 1966, when he expects his target of 4 per cent. annual increase to be achieved.
  The Prime Minister: I would refer the hon. Member to the Answer given by my right hon. Friend the Chancellor of the Exchequer to a Question by the hon. Member for Worthing (Mr. Higgins) on 18th January.—[Vol. 756, c. 654.]
  Sir C. Osborne: Why have the sacrifices which the right hon. Gentleman imposed in the freeze and squeeze policy of July, 1966, failed to produce the industrial results which he promised?
  The Prime Minister: The hon. Gentleman will be aware that there was a considerable increase in productivity in the year following those measures. I am sure that he will also know, with his very close contact with industry, of the much sharper rise in industrial production which is going on at present.
  Mr. Dickens: Can my right hon. Friend say whether or not the Government accept the figure of 6 per cent. as the rate of economic growth for this country set out in the T.U.C. Economic Review between mid-1968 and mid-1969? If not, what is the Government's figure for this period?
  The Prime Minister: We have made it clear to the T.U.C. in our discussions with them that it would be perfectly feasible in present conditions to get an increase of 6 per cent. or even more, but on the basis of a consumer boom and with the danger of a high degree of inflation. That is why my right hon. Friend quoted a figure of 4 per cent. in 1968 and, he said, perhaps 1969 as well.
  Mr. Maudling: As we shall have to export about 17 per cent. more in sterling terms to earn the same foreign exchange, how much of this 4 per cent. will be left for private consumption or investment?
  The Prime Minister: I have nothing to add to previous answers on that question by my right hon. Friend. The right hon. Gentleman is absolutely right. We need a very big increase in exports and import-saving, and this will take a high proportion of the 4 per cent. Of course, everything depends, both as regards the answer to the right hon. Gentleman's question and that to my hon. Friend, on whether we get a more than average increase in productivity this year, which would enable higher personal consumption and, of course, a higher rate of total production.

  EUROPEAN ECONOMIC COMMUNITY
  Mr. Roebuckasked the Prime Minister what proposals he now has for new economic groupings, in view of the failure of the attempt to enter the European Economic Community.
  The Prime Minister: I have nothing to add to the speech by my right hon. Friend the Foreign Secretary in the Foreign Affairs debate on 24th January.—[Vol. 757, c. 428.]
  Mr. Roebuck: Does my right hon. Friend not recall that, last May, he envisaged the possibility of talks about such groups if the Common Market negotiations did not proceed with pace and momentum? Why have we not had them yet? Is it because of some rigidity among some of his right hon. Friends? If so, will he teach them the virtues of pragmatism?
  The Prime Minister: There is no question of undue rigidity here. My hon. Friend knows the Government's policy. We have made our application for entry of Europe. We have run into—many people forecast this and everyone knows the reason for it—a roadblock, but we shall continue our soundings and contacts with those in Europe who strongly support our entry. Therefore, there is no need at this time for conversations of the kind which my hon. Friend suggests.
  Mr. Thorpe: Although the events of last week in Paris would suggest that the Federal German Republic's Government are not as firm allies as some of us had hoped that they would be, do we take it that the Benelux proposals are still regarded by the Government as very much a live issue?
  The Prime Minister: Yes, Sir, we regard them as a live issue and as an essential next step forward. As regards what happened in Paris, it is too early to form any clear view, but the German Government are sending a high official over for discussions with my right hon. Friend tomorrow and we hope to know a great deal more by the end of the week about what happened in Paris. No one is very dear about the exact significance of the Paris agreement.
  Mr. Heath: Have the Government done an analysis of the consequences of
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  individual tariff reductions covering both industrial goods and agriculture, as would appear to lie behind the proposals in Paris? If so, what conclusions did they come to, especially in view of the fact that the most-favoured-nation clause of G.A.T.T. would have to apply?
  The Prime Minister: Yes, there is certainly a good deal of doubt about whether this would be consistent with G.A.T.T., unless it was part of a total free trade area or a total economic union. Also, of course, no one understands what is meant by the reference to agriculture, whether it would mean more exports from E.F.T.A. countries to the Common Market or the other way around. It is not possible to make a detailed statistical assessment, because the proposal has not been put forward at all clearly following last Friday, and there is some doubt about whether any detailed proposals have been worked out by any of those who support that idea.
  Mr. Heffer: Would my right hon. Friend in considering any possible temporary alterations not be led astray by those voices being raised urging a North Atlantic free trade area which I am sure most Members of the House recognise is not on?
  The Prime Minister: We shall not be led astray. So far as this situation is concerned, we recall, as will the right hon. Member for Barnet (Mr. Maudling), that when we tried to negotiate a free trade area the answer was "No, you must put in your application". This has now been done twice by successive Governments. Now we are told—I use these words—I hope correctly—in the Parliamentary sense—"Back to Maudling. Back to the free trade area proposals", which suggests that there is a rather more fundamental objection to British association.
  Mr. Wyatt: Does not the Prime Minister agree, whatever may be said about the change in the German Government's attitude, that Paris last week showed a great change in General de Gaulle's attitude, in his suggestion that we might join the Common Market by stages involving a greater economic association stage by stage? Would it not be worth while, not sticking to our own rigid attitude, but trying to find out what

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  that means, and seeing if we can do something about it.
  The Prime Minister: That is exactly what we are trying to do. That is the reason for the talks with the German Government tomorrow, and with other friends in Europe to see exactly which was meant. It would be a great mistake to say that, because of last Friday, we should withdraw our support for the Benelux proposals. These should be examined. It has been suggested that we might come into the Common Market at some point, as a result of this particular lead, but there does not seem to be so far any definition of when or with what degree of guarantee.
  Mr. Crouch: Before the Prime Minister considers any alternative groupings, can he say that he has not finally excluded from his mind the possibility of some association with the Economic Community?
  The Prime Minister: We made clear our position about association with the Economic Community. If by that the hon. Gentleman means Article 238, we have made clear that we regard this as an unsatisfactory alternative to our main application. The proposals from Paris so far at any rate seem a good deal vaguer than a straight Article 238 association.
  Mr. Raphael Tuck: Has my right hon. Friend envisaged progressive reduction of tariffs between E.F.T.A. and the E.E.C. to the point where we get the establishment of the Thirteen as a much wider-looking Community?
  The Prime Minister: That was the proposal made by Her Majesty's Government at the E.F.T.A. Prime Ministerial Conference in Vienna in May, 1965, but when the proposal was further urged with the Six it ran into the same kind of blockage as we have had with other proposals.
  Several Hon. Members—
  Mr. Speaker: Order.

QUESTIONS TO MINISTERS
Sir Knox Cunningham: On a point of order. Owing to the interest shown
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in Question No. 6, and seven other Questions on the Order Paper, may I ask whether the Prime Minister has made any request to you, Sir, to answer them all together at the end of Questions?
Mr. Speaker: I know the interest, and was endeavouring to reach Question No. 6, but without success. I have had no intimation from the Prime Minister.

ANGLO-SPANISH TALKS (GIBRALTAR)
Mr. Maudling (by Private Notice)asked the Secretary of State for Foreign Affairs if he will make a statement on the reopening of negotiations with Spain over Gibraltar.
The Under-Secretary of State for Foreign Affairs (Mr. William Rodgers): We delivered a Note to the Spanish Government yesterday proposing that the talks at official level which we had planned to hold last year should begin in Madrid on 18th March. We have suggested that either side should be free to raise whatever subjects it wishes to discuss.
Mr. Maudling: Is the Under-Secretary aware that his statement that either side can raise any subjects it likes will give rise to doubt, as it appears to include the question of sovereignty? Could he reaffirm in that context the repeated assurance on behalf of Her Majesty's Government that the sovereignty of Gibraltar is not a subject which they can allow to be put at issue.
Mr. Rodgers: I am prepared to reaffirm that. We thought it better in the circumstances that if talks were to begin and to be fruitful there should be an open agenda and no pre-conditions. I can confirm that we are not going into the talks in order to discuss the transfer of sovereignty.
Mr. George Jeger: In view of the intransigence of the Spanish Government, why are we wasting time on these farcical talks before Spain has given any sign of good will by reducing its barbarous and uncivilised restrictions against Gibraltar?
Mr. Rodgers: I do not think they are farcical talks. I think my hon. Friend has indicated the need to try to talk

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together to alleviate the conditions of the people of Gibraltar as far as possible. It seems reasonable to take any steps we can to lower the temperature and to discuss such practical subjects as shipping and communications.
Mr. Jeremy Thorpe: The House will accept that the Under-Secretary's assurance is correct and that we are not going into these talks to discuss the sovereignty of Gibraltar, but would the hon. Gentleman, arising out of the intervention of the right hon. Member for Barnet (Mr. Maudlin;), make it clear that not merely are we not going to raise the question of sovereignty, but that if this is raised this is not something that is negotiable?
Mr. Rodgers: I do not think it would be right to try to lay down the actual exchanges which may or may not take place. By reaffirming our previous view, I sought to make it clear that there is no change of policy involved. In the Note we delivered yesterday, we have made clear that we do not intend to discuss the transfer of sovereignty. We have said that. I cannot be responsible today for what may or may not be said in the course of discussions by the Spanish representatives.
Mr. Shinwell: How does my hon. Friend reconcile the statement he has just made with his original reply? He told the House that any question can be raised by either side. Would he make it clear beyond possibility of doubt that the question of sovereignty, if raised by the other side, will be excluded from the ccnversations?
Mr. Rodgers: I think my right hon. Friend is reading more into my original reply than is justified. When the House was informed on 23rd October last that we hoped talks would take place, we said that they should be about matters of common concern, including Gibraltar. This remains the position.
Mr. Boyd-Carpenter: Will the hon. Gentleman tell the House whether representatives of the Government of Gibraltar will be associated with these discussions and, if not, will he give an assurance that no agreement will be entered into with the Spanish Government which is not acceptable to the people and Government of Gibraltar?
Mr. Rodgers: I am able to give the second assurance. These are, however, bilateral discussions of a general kind, and I do not think that they are likely to result in the sort of agreement the right hon. Gentleman suggests.
Sir F. Bennett: Having been completely in the right in all our attitudes towards Spain and Gibraltar in the past, is it wise at this stage to get ourselves into a false position by saying that something can be raised on the agenda which we have also announced publicly that we will not discuss?
Mr. Rodgers: We are not in a false position. Everything said in the House is well known to the Spanish Government. I have made our position doubly clear again today. Our Note of yesterday has been published and I will make it available in the Library. I do not believe that there is a possibility of misunderstanding.
Mr. Ogden: Would my hon. Friend note the feeling of the House and tell the Foreign Secretary that this House is not prepared to discuss the transfer of sovereignty from this country to Spain?
Mr. Rodgers: I think that my right hon. Friend fully understands the mood of the House.
Several Hon. Members Several Hon. Members rose—.
Mr. Speaker: Order.

MR. GUPTA
Mr. Mendelson (by Private Notice)asked the Secretary of State for the Home Department if he will call for a report from the Chief Constable on the recent physical attack upon a coloured bus inspector at Oxford, and whether he will make a statement.
The Secretary of State for the Home Department (Mr. James Callaghan): Sir, I have made inquiries of the Chief Constable of Oxford this morning and he will send me a full report in due course. I am told that Mr. Gupta was attacked outside his house on 16th January, but I am glad to say that he was not seriously injured. Mr. Gupta has also received threats over the telephone. Inquiries have not so far led to the persons responsible for the attack or

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threats being identified. The police have given protection to Mr. Gupta and his family, and I understand that the bus company which employs Mr. Gupta is giving all possible assistance to him and to the police.
I greatly regret these happenings, and I am sure the whole House will do likewise. I wish to emphasise that intimidation of this kind is a criminal matter and will be treated as such by the police.
Mr. Mendelson: May I thank my right hon. Friend for that reply? There is no need to labour the general universal importance of this case. Would it be possible, in addition to what the police have done so far, to provide, if Mr. Gupta so desires, 24-hour protection for him by the police so that there should be no need for any voluntary organisation to try to protect him, because that might have undesirable consequences? Secondly, if Mr. Gupta should reapply for the job, which the bus company has very fairly offered to him, he should be encouraged, and will speedy efforts be made to bring the criminals to book, including those who aided them in one way or another?
Mr. Callaghan: Protection has been given to Mr. Gupta since 10th January at various levels of intensification, including a 24-hour protection for him and his family if it seemed necessary, although this has now been discontinued, but this is a matter for Mr. Gupta.
As regards the question of Mr. Gupta's future, I would hope for two things—first, that he will reapply and, if he is considered fit, that the bus company will reappoint him as an inspector: and, secondly, that those responsible are brought to book.
Mr. Hogg: Whilst in a sense it is a work of supererogation, will the right hon. Gentleman accept that we on this side of the House would also wish to be associated with his condemnation of this kind of thing?
Mr. Callaghan: I took the liberty of including the whole House in my condemnation of the matter because I believed that I could speak with confidence for everybody, not only in the House but in the country, who wants to see race relations on a proper basis here.
Mr. Luard: Does my right hon. Friend agree that one slightly redeeming feature of this deplorable affair is that the gentleman concerned has had the fullest possible support from the local union concerned in Oxford and that the bus company itself has given an assurance that it will be prepared to keep this post open for Mr. Gupta? Will my right hon. Friend, through the liaison officer whom his Department has appointed in Oxford, do everything possible to encourage Mr. Gupta to apply again, and, if not, will he encourage other representatives of immigrant communities, many of whom are employed by this bus company, to apply for similar positions in Oxford?
Mr. Callaghan: I know that my hon. Friend, in whose constituency this incident occurred, has taken a considerable interest in this matter. I gladly respond to his question. I was very glad indeed to read that the chairman of the Oxford branch of the Transport and General Workers' Union had condemned this attack so unreservedly and had set an example to many more prejudiced people in the way in which relations between races should be conducted.
Mr. Hooson: Will the right hon. Gentleman satisfy himself that there will be the most thorough investigation of the crime so as to bring the criminals who perpetrated this terrorism to justice and, if necessary, ensure that the Oxford police have the support of New Scotland Yard in this matter, because nothing would so satisfy the country as to see acts of terrorism of this kind, on whomsoever they are perpetrated, adequately punished?
Mr. Callaghan: I accept that. I am sure that the Oxford police will call in any assistance it wants. If I may become slightly out of order, the police are having considerable success in other matters at the moment, and I am glad to say that less than three hours ago one of those responsible for the murder at Fulham was arrested at Bolton in Lancashire and that the man who committed the murder this morning in Acton has also been arrested.
Hon. Members: Oh.
Mr. Hogg: On a point of order, Mr. Speaker—[Interruption.]
Mr. Speaker: Order. I suspect that many right hon. and hon. Members are trying to address me on a point of order.
Mr. Callaghan: Mr. Speaker, it has been pointed out to me that I should have said "the alleged murder".
Mr. Ronald Bell: Should not the Home Secretary have said also, as I am sure that he would have wished to say, "one of those alleged to be responsible"?
Mr. Thorpe: Further to that point of order, Mr. Speaker. Although the Home Secretary has withdrawn his remark, in which he sought to suggest that certain persons, who may be suspected, have already been convicted of a capital offence—[HON. MEMBERS:"No."] Further to that point of order—[Interruption.]
Mr. Speaker: Order. This is a very grave matter. Mr. Thorpe.
Mr. Thorpe: Further to that point of order, Mr. Speaker. I quite clearly heard both what the Home Secretary said initially and what he sought subsequently to say by way of amendment. Would it not be in order, as capital charges are involved—
Hon. Members:Not capital.
Mr. Thorpe: At any rate, a charge of homicide may well be brought. Ought not the right hon Gentleman to make it clear that, notwithstanding his remark, he would wish to pass no comment upon the culpability or otherwise of those whom it is the task of the courts and not the Home Secretary to try?
Mr. Callaghan: I will gladly give that assurance. I have no desire to quarrel with the judiciary on this matter. Crimes
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of violence are a very serious matter indeed. I bring to the attention of the House one thing, and one thing only, namely, that the police, in so far as they are responsible, are acting in as good a way as they can to ensure that the courts try those against whom offences are alleged. I hope that they will continue to do so.
Mr. Hogg: Further to that point of order, Mr. Speaker.
Mr. Speaker: Mr. Hogg.
Mr. Shinwell: On a point of order.
Mr. Speaker: Order. I have called the right hon. and learned Member for St. Marylebone (Mr. Hogg) on a point of order.
Mr. Hogg: Further to that point of order, Mr. Speaker. Will it not be accepted that the Home Secretary simply made a slip of the tongue—[HON. MEMBERS: "Hear, hear."]—and did not intend to prejudice the matter in any way?
Mr. Shinwell: Sir, I was about to remark that when a right hon. Gentleman admits that a mistake has been made it is not debatable and we ought to accept it.
Mr. Speaker: I think that we can now move on. Mr. Marten.
Mr. Marten: My supplementary question goes back to the original Question. I want to assure the Home Secretary, as a Member for Oxfordshire, that the acts which are alleged to have taken place, with their disgusting overtones of racialism, will not have the support of the people of Oxfordshire.
Mr. Callaghan: I am very much obliged to the hon. Gentleman.

ROAD TRAFFIC (BURDEN OF RESPONSIBILITIES)
3.48 p.m.
Mr. John Fan: I beg to move,
That leave be given to bring in a Bill to provide for the joint responsibility of all the occupants for the conduct of a motor-car, where the identity of the driver cannot be established.
The object of the Bill is to plug a serious loophole in the law. I wonder how many hon. Members present realise that, as the law stands, it is possible for a motor car to be involved in a hit-and-run accident and for the vehicle and its occupants to be apprehended shortly afterwards, but that, because the actual driver at the time of the accident was not positively identified and the occupants declined to name him, the police are powerless to act.
A constituent of mine cycling to work in Leicester on 23rd December, 1966, was the victim of just such a hit-and-run accident and, as a result, died in hospital of his injuries. In this case there was double identification of the occupants of the vehicle, three men, who had been drinking and who had been warned before they drove off that they were unfit to drive. There was no difficulty about the identification of the car, but confusion subsequently arose as to who was actually driving the vehicle at the time of the accident. A first witness identified one man as the driver, and a second witness was not sure. Another man was actually in the driving seat when the car was stationary afterwards. The occupants themselves declined to help in any way.
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The law as it stands requires that the driver at the time of the accident be positively identified, and therefore the police have been powerless to act in this case and the crime has gone unpunished.
Let us consider the implications of this. Any car driver involved in an accident after dark, so long as he has an adult passenger in the car, can rely on his knowledge that when the car is traced no action can be taken if he and his passenger decline to admit having been the driver. This is manifestly wrong. All my hon. Friends who are members of the legal profession agree with me about that, but they are not so unanimous as to the type of solution which should be sought for the problem. My suggestions are contained in the Bill which I seek to bring before the House. I hope that the House will agree also that the present law in this respect is manifestly wrong, and accordingly that they will give me leave to bring in the Bill.
Question put and agreed to.
Bill ordered to be brought in by Mr. Farr, Mr. Bradley, Mr. Peel and Mr. Percival.

ROAD TRAFFIC (BURDEN OF RESPONSIBILITIES)
Bill to provide for the joint responsibility of all the occupants for the conduct of a motor-car, where the identity of the driver cannot be established, presented accordingly, and read the First time; to be read a Second time upon Friday, 5th April, and to be printed. [Bill 86.]
ORDERS OF THE DAY

  PUBLIC EXPENDITURE AND RECEIPTS BILL
  Order for Second Reading read.
  3.55 p.m.
  The Chief Secretary to the Treasury (Mr. John Diamond): I beg to move, That the Bill be now read a Second time.
  The main purpose of the Bill is to enable savings in public expenditure to be made. It achieves this partly by reducing certain items of expenditure and partly by increasing certain receipts; but the policy changes involved are substantial and need careful consideration.
  I would refer to the statement on public expenditure which my right hon. Friend the Prime Minister made on 16th January. He, laid the greatest stress on the need to achieve a progressive and massive shift of resources from home consumption, public and private, to the requirements of export, import replacement and productive investment. The shift from private consumption will, I imagine, be fully discussed in a month's time in the course of the Budget debates. The Measures necessary to achieve a shift from public consumption can, in the main, be implemented without legislation. The Bill before us deals with those Measures for which legislative authority is required.
  Following up my right hon. Friend's statement on 16th January, the House discussed the issues involved in a debate lasting for two days. In a month's time we shall again be discussing during the course of a debate lasting several days all the relevant aspects of our economic situation. I do not imagine, therefore, that the House would wish me to spend time today in commenting on the economic situation, other than to say that nothing has happened during the course of the last month to alter our view that the Measures described by my right hon. Friend the Prime Minister must be carried out as soon as possible and as fully as possible so as to get the maximum benefits from devaluation.
  Mr. J. J. Mendelson: Surely my right hon. Friend is not going to address the House on the important
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  provisions in this Bill without trying to prove that they are economically relevant to increasing our exports and releasing resources for manufacture for exports?
  Mr. Diamond: These proposals have been placed in their context. They were placed in their context very fully by the Prime Minister, and there was a very full debate in which all hon. Members had an opportunity to share. I have referred to the matter briefly, and I shall return to this point later. I hope my hon. Friend will have an opportunity of explaining more fully the point about the economic background which he has in mind.
  I was saying that it is necessary for us to have regard to the economic background and to what my right hon. Friend the Prime Minister said a month ago and to what has happened since, and to proceed on the basis of obtaining the fullest benefit from devaluation. That is why we are introducing this Bill at this early opportunity.
  Before coming to the major proposals of the Bill, I think it would perhaps be convenient for me to deal with certain minor provisions which, though closely related to the general theme of my right hon. Friend's statement, were not in fact specifically mentioned by him. These are to be found in Clauses 5 and 6.
  Clause 5 deals with the difficulty we are in with regard to a number of fees and charges for Government services which, because they are fixed by Statute, have tended to become out of date and out of line with the cost of the services rendered. We propose to take powers to vary such fees and charges by order. As the Clause makes clear, these powers will be exercised either to increase the charges up to—but not beyond—the point where we broadly cover the cost involved, or, possibly, to abolish the charges altogether where the yield is likely to be such that it is not worth while collecting them.
  Schedule 3 lists the various enactments involved and includes two sets of charges to which I should perhaps refer briefly as they are of considerable public interest. First, there are the registration fees payable in respect of certificates for birth, marriage and death. When this Bill becomes law it is intended that these fees shall be raised, and discussions are

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  already in train with the local authority associations. Secondly, there are the charges payable under the Road Traffic Act in respect of hospital treatment given to victims of road accidents. At present hospitals, whether within the National Health Service or outside it, can claim from a motorist admitting liability or from his insurance company the cost of treating the victim of an accident, but this cost is subject to a limit of £50 for in-patient treatment and £5 for outpatient treatment. These limits, which were fixed in 1934, are clearly ripe for reconsideration.
  Continuing the process of disposing of the "small change" according to the right hon. Member for Enfield, West (Mr. Iain Macleod), I should like to refer to the provisions of Clause 6. As the House will be aware, when the Board of Trade, after a careful investigation, decides to make a building grant in a development area, they are required first to consult the Board of Trade Advisory Committee, which we all know as B.O.T.A.C. Because the number of building grant applications has risen substantially in recent years, this requirement to consult B.O.T.A.C. leads to disproportionate expenditure of time and administrative resources. Many of the applications are for quite small projects costing £10,000 or less, and it is accordingly proposed that in the smaller cases the Board of Trade should have the discretion not to consult—that is, to act without consulting B.O.T.A.C.—thereby saving time and money and speeding up the development area projects.
  Lord Balniel: Am I right in understanding that this removes the right of appeal when a grant is refused?
  Mr. Diamond: I will note that. I hope that by the time my right hon. Friend the First Secretary replies to the debate he will have discovered the answer. I could not give it offhand, I regret to say.
  I turn to the major provisions of the Bill. It will be seen from the Summary of Financial Effects to be found at the end of the Explanatory and Financial Memorandum that the immediate effect of Clauses 1 and 4 is to increase expenditure. Perhaps I should explain, therefore, how it comes about that Clauses
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  increasing expenditure are to be found in this Bill.
  Clause 1 provides for increased contributions to the National Insurance Fund. It is expected that the current year's operations of the fund will show a deficit of some £75 million, and if there were no increasing contribution further deficits would follow in 1968–69 and in 1969–70, by which time the balance remaining in the fund might be insufficient to finance the demands made upon it. Accordingly. increased contributions are required from all concerned—that is, from employed persons, employers, self-employed persons and non-employed persons—according to the details which will be found set out in the First Schedule. These in turn will lead to an increase in the Exchequer contribution of £13 million in a full year.
  I should like to refer to the Report of the Government Actuary which accompanies the Bill, Cmnd. 3532, and which sets out the reasons for the worsening of the situation to which I have just referred. Summarising them shortly, they are, first, the continuing number of sicknes claims; secondly, the continuing increase in the proportion of men retiring as soon as they reach the age of 65 or, if they continue working. retiring as soon as may be after that; thirdly, pensioners are living longer, or, as one Lobby correspondent put it to me in a much more dramatic phrase, they are dying less often; fourthly, we are experiencing a fall in the total working population, and this has led to a shortfall in contribution income.
  It is, of course, a cardinal principle of our insurance system that income and outgoings should be kept reasonably in balance and it follows, therefore, that we must take this opportunity to increase the scale of contributions.
  Dr. David Owen: Could my right hon. Friend say whether the estimation of the fund going into deficit is based on the fact that earnings will remain constant from 1967 to 2005, which was the basis of the previous actuarial estimation last year?
  Mr. Diamond: If my hon. Friend has considered the Government's Actuary's Report, which I hope he has, he will have seen that all relevant considerations have been taken fully into account.
  Mr. Eric S. Heffer: Could my right hon. Friend indicate in which of the payments to which he has referred the greatest amount has been paid? Has it been in sickness payments, unemployment benefit, increased pensions, or where?
  Mr. Diamond: My hon. Friend did not allow me completely to answer the intervention of my hon. Friend the Member for Plymouth, Sutton (Dr. David Owen). I take it that my hon. Friend is referring to the four reasons which I gave—
  Mr. Heffer: Yes.
  Mr. Diamond:—and is asking for their contributions to the total effect. I do not have a sufficient breakdown of the figures, but again I will endeavour to ensure that by the time my right hon. Friend the First Secretary replies he will give my hon. Friend such information as is possible.
  I say to my hon. Friend the Member for Plymouth, Sutton that I do not think that it is necessary to consider the level of remuneration in 2005 to ascertain a reasonable indication of the likelihood of the deficit this year, the following year or the year after. If he looks at these three years, he will see that the deficit in each case has been carefully computed and that the net effect of continuing with the present rates will leave an insufficient balance in the fund to cope with the cash demands which may be made upon it. He and I would not like a situation like that to arise. That is why we must have regard to the Actuary's advice and increase the contributions. But it is clear from what I have said about increasing the contributions that this is a matter which would have arisen irrespective of the recent review of public expenditure.
  The new rates are set out in the respective parts of the First Schedule and call for explanation, I think, in one respect because it is a matter which I would not wish the House to misunderstand, although the amount involved is small. I can best describe it as the situation relating to the disappearing ha'penny.
  In his statement on 16th January, my right hon. Friend the Prime Minister referred to an increase of 6d. a week for employees and 6d. a week for employers. But a careful scrutiny of the rates shown in Schedule 1 reveals that a fully em-
  250
  ployed adult male pays an increase, not of 6d., but 6½d. To make matters worse, the increase for the employer is not 6d. but 5½d. Let me therefore explain straight away that this has been done in order to get rid of the ha'pennies in the final amount, and that justice has been done, because this variation has been the offset.
  A similar adjustment has been made in the increase in the National Health Service contribution to which I shall be referring in more detail shortly. There the proposed 6d. increase on the employee has been reduced to 5½d. and a corresponding ha'penny has been added to the employer. The increases proposed are therefore in total precisely as forecast by my right hon. Friend and in each and every case the ha'penny in the final charge has conveniently disappeared.
  The Government Actuary's Report sets out the full effect of these proposals and I do not imagine that the House will wish to spend further time on the other provisions of Clause 1 which can perhaps more conveniently be discussed at the Committee stage.
  Mr. Joel Barnett: Why should we have to accept increasing regressive taxation to increase the National Insurance stamp at this level and to make a charge for prescriptions rather than increase the National Insurance stamp slightly more and not reintroduce prescription charges? Could my right hon. Friend explain the logic of the case?
  Mr. Diamond: Very simply. My hon. Friend is mixing up two quite different things. The National Insurance Fund must stand on its own feet. Prescription charges are a separate matter.
  Lord Balniel: The stamp for the National Health Service does not go into the National Insurance Fund. It has been quite separate since 1957.
  Mr. Diamond: I am grateful to the hon. Gentleman. That is exactly what I was saying to my hon. Friend, and it is the kind of interruption that I get only too rarely.
  I was about to refer to Clause 4, which arises from the Government's decision to reduce civil defence preparations to a

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  care and maintenance basis and to disband the Civil Defence Corps and the Auxiliary Fire Service. It is intended that the run-down of civil defence should be completed by the end of March 1969, and the Clause makes provision for the payment of compensation to those who lose their employment or otherwise suffer loss or diminution of emoluments.
  The terms on which compensation will be paid will be set out in regulations, and it is intended to follow the general pattern adopted in other cases of statutory compensation, for example, on the reorganisation of local government. Altogether, between 2,000 and 2,500 persons may be affected. We believe that the great majority will find other jobs within local authorities or elsewhere, and my right non. Friend the Minister of Labour will give every possible assistance to that end. But to the extent that they suffer loss, the regulations will provide effective help. The payments are unlikely to exceed £250,000 in a full year, and I expect that in the event the total will turn out to be well within that figure.
  I now turn to the important proposals in the remaining two Clauses, Clauses 2 and 3. Clause 2 provides for the 6d. increase in the National Health Service weekly contribution, which will total £25 million in a full year. The relevant considerations were explained very fully by my right hon. Friend the Prime Minister, and there is little I can add to his statement at present. As he indicated, the intention is to reintroduce prescription charges in the spring, along with arrangements for refunding them to those in financial aid and to war pensioners—
  Mr. Mendelson: Refunding.
  Mr. Diamond: I repeat—along with arrangements for refunding them to those in financial need and to war pensioners. Arrangements will also be made to exempt from the charges the elderly, children, the chronic sick and expectant and nursing mothers. The present position is that my right hon. Friend the Minister of Health is having discussions with the medical profession about the best methods of organising an exemption scheme, and is about to consult other interests concerned. He will be making
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  a statement as soon as he can, and is well aware of the widespread interest in the subject—
  Mr. Mendelson: Opposition.
  Mr. Diamond: Bearing in mind the difficulties to be overcome, it is inevitable that it should take a little time to work out fully satisfactory exemption arrangements. These matters, however, are not the subject of the Bill or the Clause. The Clause deals with the separate matter of the National Health Service stamp, a matter which for practical purposes is closely tied to Clause 1 and the National Insurance Fund. Having regard to the administrative problems and expense involved, both to employers and Government Departments, it would clearly not be possible to contemplate introducing the higher National Insurance and National Health Service contributions at different dates. In view of the facts brought to light by the Government Actuary's Report, it is most important that the National Insurance Fund should secure the increased income from the higher contributions as soon as possible.
  Clause 3 provides for the ending of free milk for secondary schools, a decision which I know is regarded with considerable anxiety. [HON. MEMBERS: "Hear, hear."] Let me, therefore, first relate some of the considerations involved. The facts are that about 93 per cent. of primary schoolchildren have, and will continue to have, free milk. However, with secondary schoolchildren the popularity of milk has been falling steadily for some time. By last year the number of secondary schoolchildren at maintained schools taking milk had dropped to 60 per cent. This year the figure has dropped further to 58 per cent. Although it would perhaps be going too far to say that the evidence on nutritional grounds is at present conclusive against the need for continuing the present policy, it certainly points that way, and we are advised that one could not base a case for retention on the nutritional evidence.
  We very carefully considered the possibility of providing free milk for some secondary schoolchildren on grounds of special need, and we decided to continue free milk for children at special schools. But we have reluctantly concluded that it would not be possible to select from

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  secondary schoolchildren in ordinary maintained schools those who should receive free milk while their fellows were not receiving milk in school at all. Great difficulties are obviously inherent in selecting individual children on nutritional grounds, or grounds of family financies. In particular, there is the overriding human difficulty that any such provision would inevitably single out children and lead to considerable embarrassment.
  Mr. Frank Allaun: Will my right hon. Friend accept that there are thousands of secondary schoolchildren from poor homes, mainly with disabled fathers, broken homes or widowed mothers, who are going to school each day with no breakfast and who have had nothing to eat since 5 o'clock the previous evening? Does not he think that this mean, miserable cut of £5 million a year is far outweighed by the damage to the health of these children that milk would have prevented? Even if some children do not need it, thousands do, and both free milk and milk that is paid for will be lost under the cut. I plead with him to reconsider it, even at this late stage.
  Mr. Diamond: I have taken my hon. Friend's point. I am most anxious that he should not lose his right to be called in the debate, though it is not for me to say, by intervening at too great a length. He asked if I was aware that too many children are attending school on an empty belly, and what I am doing about it. Had he allowed me to carry on to the next sentence, I would have told him. What I am doing is to deal with the problem of free school meals. Considerable efforts are now being made in co-operation with the local authorities to improve the take-up of free school meals, and that is the answer to his point. A survey published last summer disclosed that only about 50 per cent. of the children eligible for them were receiving free school meals. Accordingly, a campaign has now been mounted to draw parents' attention to the availability of free school meals where the parental income falls below a certain level. Moreover, as from April this year free meals will become automatically available—
  Mr. Emrys Hughes Mr. Emrys Hughes(South Ayrshire)rose—
  Mr. Leo Abse Mr. Leo Abse(Pontypool)rose—
  Mr. Speaker: Order. We have had a fair number of interventions.
  Mr. Diamond: The Government are making arrangements as from April—
  Mr. Emrys Hughes: On a point of order. I submit that we have not had a fair number of interventions, because there has been no intervention by a Scottish hon. Member and no explanation of how Scotland is affected.
  Mr. Diamond: I shall be only too happy to give way to my hon. Friend, as I have to everybody else, without question. But surely he would not ask me to give way to somebody who has not yet risen or to somebody who invites me to do so in the middle of a sentence. He is a patient friend of mine, and I am sure that he will be willing to wait until the end of the sentence, or even the end of the paragraph, and then I shall listen carefully to what he has to say. In the meantime, may I remind him, because this is what he was particularly interested in, that as from April this year free meals will become automatically available to fourth and subsequent children, irrespective of income.
  Mr. Emrys Hughes: I am sorry if I asked my question prematurely. The figure of £5 million is for the whole country. Can my right hon. Friend break it down to give the Scottish figure? In view of the rather different conditions in Scotland, will my right hon. Friend get the Secretary of State for Scotland or another Scottish Minister to deal with the Scottish aspects?
  Mr. Diamond: I am sure that my hon. Friend will wish to pursue this matter when we come to the Committee stage and break down the details. I will see whether it is possible to give him the information he seeks later today.
  Mr. Abse: Will my right hon. Friend explain how it will help the thousands of children living in poverty, who are receiving free school meals and, consequently, have a demonstrable need for school milk, that other children are to receive free school meals?
  Mr. Diamond: I know that this is a painful matter for my hon. Friend the

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  Member for Pontypool (Mr. Abse), because he and I have discussed it. We are all human beings and we are all fathers. [HON. MEMBERS:" Not all of us."] Many of us are. Indeed, I was going on to say that we are not only fathers but grandfathers.
  My hon. Friend referred to a demonstrable need for milk. But that is not a case he can demonstrate. He cannot demonstrate the need on nutritional grounds at the ages of those attending normal secondary schools. We have been into that position most carefully, and it is because that case cannot be demonstrated and for that alone that we feel able to put forward this proposal, which I know is not very welcome.
  But I assure the House that the Government are well aware of their responsibility for the health of the nation's children and are satisfied that we are acting responsibly in recommending the proposals in Clause 3. The decision to end free milk at secondary schools was not taken with any pleasure, however much one can justify it on economic grounds. But the same can be said of many of the decisions announced by my right hon. Friend the Prime Minister a month ago. Many of them were extremely painful to take.
  There have, of course, been many other proposals for improving the lot of our people which my colleagues in the Government have pressed upon me but which, on economic grounds, I have been unable to accept. Such proposals have thus never been included in any programme and have never become known to the House. Any one of us can think of methods of improving aspects of our welfare services at a cost of additional public expenditure. But that is not the question.
  The question is, having regard to the rate at which the welfare services have improved and to the increasing share of public expenditure which has gone into them, and in a situation where a reducing share is going to defence, how we can, in present circumstances, adjust our proposals so that we give the fullest possible effect to our scale of values and our sense of priorities in public expenditure without at the same time putting an unbearable burden on the economy. I sug
  256
  gest that we shall best achieve that objective by carrying through the proposals in this Bill.
  Mr. Mendelson: My right hon. Friend, in illustrating the general economic background, was surely supposed to try and prove how cutting out school milk would release resources for the export drive. He has not done so.
  Mr. Diamond: My hon. Friend must not be irritated.
  Mr. Mendelson: I am.
  Mr. Diamond: He should not be.
  Mr. Mendelson: I am not the only one.
  Mr. Diamond: Perhaps he will do me the courtesy to hear what I am saying. I related these matters to their context. We can all propose measures or resist measures for economy. We can all propose measures for improving or economising on the welfare services. But that is not the whole question.
  The question is, given that we have to put on our economy a bearable burden, how can we apportion what we are doing in terms of public expenditure to the welfare of all concerned? This rests on a sense of priorities. One cannot judge one item on its own within the total of what we can afford and the economy can bear. These new proposals are the best that the House can follow in this context.
  4.25 p.m.
  Lord Balniel: The Chief Secretary to the Treasury has made a characteristically courteous and clear speech, but I was surprised by the way in which these Clauses, with their very substantial social implications, were explained so cursorily and superficially. The Bill raises the National Insurance contribution quite substantially—something which used to be described by hon. Member opposite as a regressive poll tax.
  Mr. Ian Mikardo: It still is so.
  Lord Balniel: Indeed, it still is so described by many hon. Members opposite. The Bill also raises the cost of the National Health Service stamp, something inextricably intertwined with the decision to impose prescription charges.

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  The Bill also provides for compensation for Civil Defence workers because of the abolition of Civil Defence. This is that part of defence which by no stretch of the imagination can be described as having an offensive potential. It also abolishes free milk in secondary schools. The Government are burying their sacred cows and the only lament is a Treasury brief. I must say that the mutes at this funeral are the Secretary of State for Education and Science, the Minister of Health and the Minister of Social Security. It is surprising that so few of them are present at this debate. Indeed, it would have been reasonable for one of them to have taken part.
  Mr. Diamond Mr. Diamond rose—
  Lord Balniel: No. I would rather continue.
  HON. MEMBERS:Shame.
  Lord Balniel: This Bill is concerned with a hotch potch of odds and ends involving the legislative implementation of the Prime Minister's statement last month. We voted for our Amendment in the debate on that statement, but we did not vote on the main Question, and it is right to state at this stage that it is not our intention to vote against this Bill. Equally, as we are to have no explanation from the Secretary of State for Education and Science, the Minister of Health or the Minister of Social Security, it is right and reasonable to ask the Government to consider taking the Committee stage on the Floor of the House.
  I do not intend to refer to that part of the Bill concerned with civil defence, because an Order will have to come before the House and we shall then have an opportunity of debating that decision. I prefer to devote the major part of my remarks to the increase in the National Insurance contribution and the National Health Service stamp. In broad terms, the stamp is to be increased by 1s. a week for an employed man—6½d. to come from him and 5½d. from his employer. The sum of 5½d.. will come from the employed woman and 4½d. from her employer. A similar increase is being made in the contribution to be paid by self-employed persons. The contribution for a
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  self-employed person is to go up by 8d. for a man and 7d. for a woman. This increase in the contribution follows hard on the neels of an increase in contribution only last November. Payment into the National Insurance Fund is on a tripartite system. It is partly paid for by the employer, partly by the employee, and partly by the Exchequer.
  So Exchequer contributions also will have to be increased. In his Report the Actuary shows that in 1969–70 the additional contributions which will be brought in by this Bill will amount to £50 million. Consequently the taxpayers' additional contribution will have to amount to £13 million.
  Before dealing with the National Insurance Contribution, I want to refer to the increase, as a result of this Bill, in the National Health Service stamp. As I pointed out, helpfully, to the Minister in an interjection, the National Health Service stamp is entirely separate from the National Insurance Fund. Nonetheless, in the eyes of the public these two are absolutely indistinguishable. They are paid for on the stamp. They are both paid for out of the same purse or pocket. It is right, however, to point out that the 1s. increase in the National Insurance contribution has absolutely nothing to do with the devaluation package announced by the Prime Minister in January. The increase in the insurance contribution flows from the National Insurance Act of last year and is necessary in order to stop the Fund going into deficit.
  Here, to confirm my interpretation, I want to quote from what the Prime Minister said in his speech of 16th January. He said:
  "I have referred to the National Health Service stamp. The House ought to know that quite apart from the expenditure review, and for quite other reasons, a further 1s. 6d. for employees, 6d. for employers, will be needed to prevent the National Insurance Fund from going into deficit. This will be done at the same time as the 6d. increase in the National Health Service contribution which is calculated on the stamp."—[OFFICIAL REPORT, 16th January, 1968; Vol. 756, c. 1588.]
  The National Health Service stamp is being increased for a totally different reason. It is being increased by 6d. as part of the package deal announced by the Prime Minister, and it will bring into the Treasury an additional £25 million. The picture for the general

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  public is that there is a 1s. increase in the National Insurance contribution and a 6d. increase in the National Health Service stamp. This follows on two previous increases in contribution which have been made since the present Government came into office. The employed man's contribution went up by 2s. in March, 1965, and by a further 2s. only last November. Under the present Government's administration, the stamp which the employed man, the working man, has had to pay will have gone up from 11 s. 8d. to 16s. 8d. when this Bill becomes law. This is an increase of 5s. or 40 per cent., and it is an increase which is a good deal more than the percentage rise in wages during the same period of time.
  The stamp is forming a higher proportion of the wage than it did when the present Government came into office. I find it rather astonishing that such a Measure can be produced by a party which, when they were in Opposition, so regularly and bitterly complained about increases in the contributions on the stamp. We know that the Leader of the House regarded the measures of July, 1966, as being a dash for freedom and that today he regards this package deal as being a great stride towards Socialism. It was the Leader of the House, when in Opposition, who said this about a 1s. increase in the contribution:
  "So heavy is the burden put on the worker now by saying that all workers must pay the same that everyone earning under £15–£16 a week is being mulcted of far more than the share due from him for the rest of the social services. This, of course, is the old evil of the poll tax on the poor. Each time the Government put one shilling on that tax they make the burden more intolerable."—[OFFICAL REPORT, 28th January, 1963; Vol. 670, c. 657.]
  This Government have not put Is. on that tax—they have put on 5s. They have done it at a time when they have frozen wage levels. It was not only the Leader of the House but the Prime Minister, too, in those far-off, carefree days in Opposition, who was equally forthright in attacking increases on the stamp. It was he who accused the Conservative Government:
  "… in times of crisis, of increasing stamp contributions which bear heavily on those whose needs are greatest and whose incomes are lowest."
  That was in a speech at Swansea on 25th January, 1964.
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  All this has changed now. The wicked poll tax has been transformed, in more high falutin' language, into the contributory insurance principle. On Friday when I urged that the very elderly, who had even been forbidden to contribute to the National Insurance Scheme, should be allowed a small pension, made up only of the tax element, not of the Contributory element, we heard the Minister of Social Security defend this principle with a kind of fixed rigidity, as if it was the law of the Medes and Persians.
  Mr. Mendelson: I do not expect the hon. Gentleman to make the Government's case, speaking from where he does, but he must put into the record of the House that while his Government used to put up the poll tax and not improve the benefits very much, this Government have put up the poll tax but have very considerably increased benefits. He has not said a word about that yet.
  Lord Balniel: Speaking immediately in reply to the hon. Gentleman, and very much off-the-cuff, I want to point out first of all that earnings were going up. Also, if I remember rightly, the pension was put up five times. It was certainly put up more than the rise in the cost of living. In addition, the increase in the contribution, which I certainly accept we made when in office, was made at a time when there was reducing taxation, combined with rising earnings. The great difference now is that the contribution is being put up; the economy is stagnant; more people are unemployed; and taxation is also being increased.
  In the existing insurance scheme, certainly I accept the value of the contributory principle. It is not something which it utterly unalterable, but it has considerable value. However, on this occasion, the Government are under-estimating the effect of this sequence of increases in contributions on the lowest-paid worker. The effect on the lower-paid worker will be severe, especially for families living at or below the supplementary benefit level. When one takes into account rising costs following devaluation, rising fuel prices, the increase in the weekly stamp, the reintroduction of prescription charges, and the ending of free school milk, it will not be very long before that 7s. increase in family allowances has been whittled away completely.

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  Time and time again in these debates, we have pointed out that, for the family really in need, the 7s. increase is totally inadequate. It will leave a quarter of a million children living in families not at but below the supplementary benefit level. The increase in the weekly stamp is now to be added to their burden. If only the Government could concentrate realistically on giving more generous help to the poorer families, taking into account the liability of the weekly stamp, I would be very much happier about the Bill.
  So far, I have spoken about the impact on the general standard of life of the increase in the stamp. Now I want to refer specifically to the 6d. increase on the National Health Service stamp. The decision of the Government to raise the National Health Service stamp is part of the package deal which is connected with the reintroduction of prescription charges. When prescription charges were abolished, I queried whether this was the right priority in the Health Service. It does not seem to be a moral issue. It is an issue of the method of financing the Health Service, and the Health Service is desperately under-financed. With limited sums of money, it seemed more important to concentrate our efforts on the building of new hospitals, the upgrading of old wards and the better payment of nurses and doctors. But the fact remains that the Health Service today is seriously under-financed. Roughly, it is financed as to 85 per cent. by taxation, 11 per cent. by contributions, and 4 per cent. by private payments.
  I do not disagree with the Government's decision to reintroduce prescription chargesߞ
  Mr. Mendelson: The hon. Gentleman voted for it. It is his party's policy.
  Lord Balniel: I make no apology for that. I think that there are higher priorities in the Health Service, and I do not disagree with the decision to re introduce prescription charges.
  Mr. Eric Ogden: The noble Gentleman said that he did not disagree with the reintroduction of prescription charges. Will he make it clear that his party also agrees with their reintroduction?
  Lord Balniel: I am speaking on behalf of the Opposition Front Bench, and, of course, what I say represents the view of my party.
  Some method must be found for raising the totality of the finance which backs the National Health Service. The Prime Minister has decided to reintroduce prescription charges at the proposed rate of 2s. 6d. per item. Without any exemption, except for those on supplementary benefit, this would have brought in £50 million a year. However, the Government have decided to extend the former list of exemptions, and this has halved the revenue which will be forthcoming from the charges.
  Mr. Mendelson: That is quite incorrect.
  Lord Balniel: The hon. Gentleman says that that is incorrect. All that I can say is that that is what the Government themselves have said. Does the hon. Gentleman want me to quote the Prime Minister's words?
  Mr. Mendelson: At the most, the saving will be between £8 and £12 million. The hon. Gentleman is wrong, not the Government.
  Lord Balniel: Perhaps it is rash of me to do so, but I have taken the Prime Minister's words at face value. He said:
  "The scheme as initially introduced would save about £50 million in a full year. But the further exemptions, which we regard as fair and necessary, would reduce this saving to about £25 million … and we propose to make this good by increasing the National Health Service employees' contribution by 6d. as soon as possible."—[OFFICIAL REPORT, 16th January, 1968; Vol. 756, c. 1588.]
  The original revenue which would have been brought in by the reintroduction of prescription charges has been halved by the decision to extend the list of exemptions. The House is entitled to an explanation of exactly what progress is being made in securing arrangements for these exempted categories—the elderly over 65, children up to 15, expectant and nursing mothers and, in particular, the chronic sick. This matter is related directly to the increase in the stamp.
  I want to ask one question, and I hope that I can have a categorical answer at the end of the debate. Will the refund

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  arrangements and the exemption arrangements come into force simultaneously with the reintroduction of prescription charges? The House is entitled to an answer to that question when deciding whether to agree to this proposed increase in the National Health Service stamp. If the exemptions do not come into force at the same time as the charges, not only will the chronic sick and the elderly pay a prescription charge of 2s. 6d. for every item, but they will also be paying the increased National Health Service stamp which is designed specifically to meet the cost of the exemptions.
  Mr. Emrys Hughes: Does the hon. Gentleman include the lower-paid workers with the chronic sick and the others?
  Lord Balniel: That is a question which the hon. Gentleman ought to address to the Government, because that would eliminate virtually all of the revenue-raising propensity of the prescription charges—[HON. MEMBERS: "Answer."] My answer is that I have long held the view frequently expressed by hon. Members on these benches that, if prescription charges are to be reintroduced, there should be exemptions for those living on supplementary benefit, those living at supplementary benefit level, expectant and nursing mothers, the elderly and, if they can be defined, those who are chronically sick.
  It would be very easy from this side of the House to talk like right hon. and hon. Members opposite did when they were in Opposition. I could say that what the Government are proposing is monstrous and that the whole Bill should be withdrawn. I feel that the Government under-estimate the hardship which they will cause. No one in this House can see how the Prime Minister is implementing his pledge to protect the most vulnerable sections of the community. If I took that line we would still surely be left at the end of the day with the problem of how to pay for the rising cost of pensions. How ironical it is to read their schemes of 1957 called "National Superannuation". How ironical that "Signposts for the Sixties" promised that the introduction of half-pay on retirement would be
  "One of the first jobs of the next Labour Government …"
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  How misleading it is to read the 1966 Labour manifesto, which said,
  "Our plans for a far-reaching reconstruction of social security were well-advanced when we took office in 1964".
  Obviously those plans have collapsed in ruins. Instead, we have what everybody in the House recognises is no more than a facade of a social security review. My guess is that as we come closer to an election some kind of rough and ready earnings-related pensions scheme will be introduced. But what a far cry from those definite promises to introduce the minimum guaranteed incomes scheme, to use the Prime Minister's own words, "without delay".
  We should examine carefully the reasons given for the increase in insurance contributions, because they have nothing to do with the package deal. They are of considerable significance to the whole financing of the future of our social services. When the National insurance Act, 1967, was introduced, the Government Actuary last summer considered that the contribution rates due to start last autumn would be sufficient to last until 1970 to finance the present level of benefits. He said that the increased contribution would be
  "… more than is needed to meet the direct cost of the increased benefits."
  Since he wrote his report a number of new factors have emerged which have completely upset his calculations. The most important of these are the lower mortality rate among pensioners, the trend towards earlier retirement, and a fall in the working population.
  The trend towards earlier retirement is very dramatic—if anything can be dramatic in a Government actuary's report. In 1959 about 47 per cent. of men claimed retirement pension on reaching 65. By 1967 this figure had reached 66 per cent. For many people with hobbies and money early retirement and a prolonged expectation of life—perhaps retirement from 60 to the age of 80—is an ideal situation. However, anyone who has worked in geriatrics knows that this ideal is by no means always achieved. Retirement, irrespective of financial background, can create real psychological problems for the man, and also for the wife.
  I have no intention of delaying the House much longer. Obviously I would

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  be out of order were I to develop the broad structure of reform I would like to see in our system of pensions. However, I do put forward one consideration specifically tied to the question of the increase in the National Insurance contribution. On social grounds, there are many arguments for saying that a sudden jump from full-time employment one day to complete retirement the next day is often bad for the morale of elderly people. I do not want to push anybody who desires to retire into staying in work a single day longer than he wants. However, I do feel that the Government and industry should perhaps consider together the possibility of removing an obstacle which stands in the way of those who would prefer to retire gradually.
  One reason why it is very difficult, from an employer's point of view to maintain an elderly person in part-time employment, is that he has to pay a full contribution on the stamp. Is there not room for some kind of flexibility to be developed? Would it not be possible for a reduced contribution to be paid by employer and employee where the employee is elderly and only wants to undertake part-time work? I think that this suggestion merits serious consideration by the Government.
  The Bill is mainly designed to finance not improved social services but the existing social services. It involves taxation in the shape of contributions and taxes to the value of £16 million. It is the third National Insurance contribution increase since the present Government came into office. It goes alongside the fact that since the present Government has been in office taxation has been increased by £1,300 million.
  The Prime Minister has said many things. He has implied that it is wrong to increase the National Insurance stamp contributions at times of crisis. He has said that he would protect the most vulnerable sections of the community. He has said that he would not increase taxation. He said that just one day before the public went to vote. I suppose that, so far as the House is concerned, what the. Prime Minister says is utterly irrelevant. But we have a new Chancellor—the white hope of the Labour Party, the Sir Galahad, the liberal, the intellectual, the cultivated Chancellor. I think it is right that we should know what he
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  says. I quote from his book, "The Labour Case. Why should you vote Labour?"
  Mr. fain Macleod: Why indeed!
  Lord Balniel: Why indeed! In his book the Chancellor says:
  "The commitments of the Labour Party's policy—provided they are not all rushed through in the first year, which nobody has ever suggested—can be carried out comfortably without any question of an increase in the tax burden. On the contrary, they should leave room for substantial tax reductions."
  The social service promises of the Labour Party certainly have not been rushed through in the first year of their Government. Taxation has been increased by £1,300 million. We now wait to see what the present Chancellor's first Budget will be.
  4.57 p.m.
  Mr. Ian Mikardo: The noble Lord the Member for Hertford (Lord Balniel) has made a powerful criticism of the Bill largely on the ground that some of its provisions are regressive and throw disproportionate burdens on those in the community least able to bear them. On this ground he launched a powerful attack on the Minister introducing the Bill, and, for good measure, on a whole archipelago of other Ministers for not having resigned on account of the Bill.
  He told us that his opposition to the Bill was so great and his condemnation of it so total that he would not indicate any disapproval of it by dividing the House. Though I always listen to the noble Lord with great attention and respect, from the moment he uttered that sentence I could not see any significance in anything he said afterwards and I could not believe that any serious-minded hon. or right hon. Member on either side could attach any importance to what he said.
  I do not find shadow boxing a very entertaining spectacle. I do not find the issuing of challenges, followed by an ignominious flight from the arena, a very heroic posture, or one, above all, worthy of a noble gentleman. Like the noble Lord, I, too, object to many provisions of the Bill on the grounds that they are regressive, and I will say at once that wild horses will not drag me into a lobby

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  tonight to vote for it. I nail my colours to the mast at once.
  Principally, this is because of the regressive nature of some of these measures. Few people understand how, even before these measures, the burden of tax was spread through the community. If one asked an ordinary chap to draw a graph, of which the horizontal axis was annual income, rising from £200 or £300 to goodness knows how many thousands, and the vertical axis was the percentage of total income paid in tax of all forms, and asked him what it would be like, he would say, "It will be an ascending curve, perhaps a parabola, with the percentage of income paid in taxation going up very rapidly as the income goes up." I could do all this much better, Mr. Deputy Speaker, if it were in order for me to have a blackboard.
  But that is not what such a graph would show. What it would show is the aspect of a trough. It would begin at a certain point, at the level of the poorest people, showing the percentage of income paid in tax of all sorts, and would gradually fall, as income increased, to a certain point, and then start to rise again. It is only at the level of the very richest man that the percentage paid in tax would be as great as the percentage paid by the poorest man.
  This may surprise many people and may seem very mysterious, with all these progressive rates of Income Tax, but the solution of the mystery is very simple. It is the stamp. It is the poll tax which represents so much higher a percentage of the income of the lowest income families than of the highest, and reverses what would normally be the progressive rate of taxation.
  The poorest and the richest in the land both pay about two-sevenths of their incomes in taxation of all forms, and those like us, between the poorest and the richest, pay a lower fraction—and that cannot be right. It should be the business of this House, and certainly the business of the party now in Government, to put it right and to ensure that the bearing of burdens is dished out in proportion to the width of the shoulders and that those who are best able to bear should have most to bear.
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  The measures in this package deal, some of which are enshrined in the Bill and some of which we still have the dubious pleasure of awaiting, not only do not reverse this regressive process but add to it. Only one tax would be more regressive than the stamp and that is a tax on bread. Apart from that, no tax is so regressive. I know that I cannot ask the Chancellor of the Exchequer to anticipate his Budget, but if it includes a tax on bread—which we would all regard as unthinkable—it would not be out of line with the philosophy behind the package deal and the Bill. That is why I am so affronted by this Measure.
  We have heard much about the necessity for cutting Government expenditure, and there is a good deal of confusion, on this subject, about what are cuts in public expenditure, what are cuts in private expenditure and whose private expenditure is affected. An ordinary family, with a couple of kids at secondary school, on the implementation of this Measure, must find additional amounts of money—and very considerable amounts, when the prescription charges return. Some people, who are fairly well off or even moderately well off, will find that money without trenching into the normal pattern of their essential expenditure. It will come out of savings or out of smokes or drinks or out of having a more modest holiday or out of providing a little less towards the profits of the football pool promoters, but it will come out of something that will not cut into their normal expenditures.
  But there are thousands of families in my constituency for whom these additional burdens can be met in only one way and that is by cutting their expenditure by an equivalent amount of essential expenditure. Therefore, these are not cuts in public but in private expenditure and in the private expenditure of only the poorest people. That is not what I came into this House for. That is not what I joined my party for nearly 40 years ago, and it is not what I have been working for all these forty years—and I am not going to start supporting that sort of thing now.
  I was a little shocked by the defence of the Clause relating to school milk by the Chief Secretary. As I understood it, his argument was that two-fifths of the kids do not want the milk so let us take

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  it away from the three-fifths who do. With great respect, this is below the Chief Secretary's normal standards of logical appreciation. It does not seem to fit.
  He said that it is hard to justify it on need. The Treasury will treat people as if they were statistics. Not all people are alike or in the same circumstances and, of course, the need is a terribly varying factor in different sectors of the community and different parts of the country. Would my right hon. Friend say that there is no need for this milk in the poorest parts of Poplar or in the Gorbals in Glasgow? He cannot just dismiss the matter in this global way.
  We are told in the Explanatory and Financial Memorandum that we shall save about £5 million in a full year on this school milk provision. The figure of £5 million in conjunction with the word "school" plucked a chord in my memory, and I thought hard when I was in my bath this morning until it came to the surface. Five million £s is given as tax relief to the public schools on account of the fiddle by which they are registered as charities. So we chisel £5 million off the parents of children going to State schools and give a precisely equal amount to the parents of children going to public schools. If the Chief Secretary bases his assessment of what is right on need, that seems to me a cockeyed assessment, because, by and large, I should think that the parents of children going to State secondary schools are not quite as well off as the parents of children going to public schools.
  I for one will not be a party to this business of taking from the poorer in order to subsidise the richer. I am getting a bit puzzled by the Government's priorities. The £5 million a year for school milk is equivalent to a little more than the subsidies given by the Government to private industry in two days. Every two days throughout the year private industry gets from the Government in subsidies in one form or another as much as will be saved on school milk in a year. Two or three large companies, perhaps even a single large company, will get this much. Although it may be done for worthy purposes in the interests of expansion or of development of the
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  underdeveloped areas, in the end the beneficiary is the private shareholder.
  If we are to make people bear burdens like this so that there is plenty of money to give in subsidies to the private sector so that the shareholders benefit—and, looking at the movements on the Stock Exchange, they have not been doing too badly—it seems to me a reversal of what should be going on. Since this is part of a general economic plan, I would say to the Chief Secretary that if he is looking for savings let him look at the very large amount of money being doled out, in some cases with very little scrutiny, and which do not stand up to serious examination.
  I remember that my right hon. Friend the Chancellor of the Duchy of Lancaster, when he was a back-bencher, was the first to mention in the House the begging bowl of private industry. It does not have a begging bowl any more. It found that it was too small and got filled up too quickly; it could not hold all the boodle. It has now abandoned the begging bowl and instead has acquired a croupier's rake and is busily shovelling in the shekels from every corner of the taxpayers' table. We are asking people to pay the cost of it. There are all these mergers and amalgamations going on, with the Government feeding in money in the way of interest-free loans for which the taxpayers are paying.
  No doubt private industry is strengthening itself, and, incidentally, strengthening the economy—I concede all that—but it can do it whilst leaving the taxpayer to bear the social costs of the operation. If there is a merger or if rationalisation takes place, some people are made redundant. Private industry should worry: the State pays. Some people need retraining. Again, private industry should worry: the State pays. This is the reverse of the way in which the priorities should be worked out. The taxpayer is paying the social cost of restructuring industry. Working men are suffering the consequences and are having to pay more on their stamp and in all sorts of other ways for it.
  I should not mind if this operation were effective. It is bad enough to bribe a man if the end result is that he does the thing for which he was bribed, but if we bribe him and he does not do it we have the worst of all worlds. We are bribing

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  entrepreneurs to go into advance factories in the development areas. Sixty-one of them are empty. We say, "Hard luck on the poor miners". The Minister of Power says that it is a running-down industry, there is not much we can do about it, and men will have to come out of the mines and go into other jobs.
  The noble Lord the Member for Hertford said something about pre-election exchanges. My hon. Friends will recall that among the pre-election new thinking was the necessity to get some public enterprise into these areas. Where is it?
  Sir Cyril Osborne: Why support them?
  Mr. Mikardo: If the hon. Gentleman had come in earlier, he would know the answer to that question.
  Where are these enterprises? The Postmaster-General says that he has to import telephone equipment because he cannot get it from industry in this country. Why does he not arrange to have it made it Durham or in Scotland or in Wales? What is happening instead is that some of the money which we are dragging out of poor people by the Bill is going into a kitty from which rich companies are being subsidised to do the job, and they are not doing it.
  Mr. John Pardoe: Is the hon. Gentleman suggesting that we in Cornwall, who cannot get a railway service from a nationalised industry, should make it ourselves?
  Mr. Mikardo: I was not talking about a railway service. The hon. Gentleman knows that I was not talking about a railway service. I think that he will concede that his intervention was a bit of a flop.
  The priorities in the package deal from which this Measure flows are wrong. An earlier leader of the Labour Party with whom, it is true, I had many disagreements but whose integrity we all respected, whether we agreed with him or not, said, as so many other people in the Labour Party have said, that Socialism is about equality. He did not mean, and nobody who talks in that vein means, a national cake which is chopped into 50 million equal parts which are then dished out. What he meant was that in a civilised society, in a society which likes to think
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  of itself as a moral society, an enormous difference between the best-off and worst-off sections of the community is offensive to every decent man, whatever his party. What he meant was that we should exert ourselves constantly towards narrowing the gap, perhaps by ensuring that as overall things get a bit better those at the bottom of the scale get proportionately more than those at the top of the scale.
  I was brought into this movement, to which I have devoted all my adult life, by reading Tawney's essays on Equality. I re-read them last week, and they stand up as well todays as they did nearly half a century ago. I believe that economic and social purpose means bit by bit—and I appreciate it takes time—removing and reducing the offensiveness of this very wide gap. I will support any measure that moves in that direction and I will oppose any measure that moves in the opposite direction. That is why, wherever else the Government may get support for this measure tonight, it will not get it from me.
  5.21 p.m.
  Mr. Marcus Worsley: The hon. Member for Poplar (Mr. Mikardo) started his speech by chiding my noble Friend the Member for Hertford (Lord Balniel) for stating that he did not intend to vote against this Bill. The hon. Gentleman went on to say that he did not intend to vote against the Bill either. He indicated that he would not have supported the Government but, since my noble Friend indicated that so far as this side of the House is concerned there was not to be a Division, the hon. Gentleman was not saying anything very grand or brave.
  Mr. Mikardo: I know the hon. Gentleman is not the sort of man to take an unfair advantage. He must realise that there is an enormous difference between the refusal of an Opposition to divide the House and the refusal of back-bench Members of the Government party.
  Mr. Worsley: The hon. Gentleman chided my noble Friend for lack of courage, but goes on to say that he does not intend to support his own opinion by going to the Lobby himself. There is no great courage in abstaining in a Division which does not take place.
  Mr. Pardoe: I would inform the hon. Gentleman that there are three parties is this House and that we have every intention of dividing the House.
  Mr. Mikardo: If the Liberal Party had not divided the House, I would certainly have done so.
  Mr. Worsley: I am most grateful to the hon. Gentleman, who has clarified the issue. This is not what he said in his speech. He indicated in his speech that he did not want to support the Government. In view of his remarks now, I withdraw what I said. I was intending to go on to say that I listened to his speech with great interest and at first found myself agreeing with him much more than I expected. I would now like to revert to that aspect—the financing and poll tax aspect—of the National Insurance Scheme.
  In regard to Clause 4, obviously I do not oppose the compensation in civil defence, but I do bitterly oppose the loss of employment. This Government are proposing to reduce the most urbanised society in the world to a state of unpreparedness in civil defence which no other Western country knows. Although two Ministers on the Front Bench find it impossible to listen to this, this is the most serious single step taken in the years they have been in Government. The right hon. Gentleman the First Secretary comes to the House, passes this off lightly and, when it is raised by an hon. Member opposite does not listen to the debate.
  The First Secretary of State (Mr. Michael Stewart): It is true that I made a comment to my right hon. Friend, but the hon. Gentleman is not entitled to say that I was not listening.
  Mr. Worsley: The right hon. Gentleman gave a good impression of not listening. I withdraw my remark if this was a kind of gloss on my remarks. I hope he was saying that he thoroughly regretted the treatment which the Government have given to civil defence. It is the first duty of the Government to provide for the safety of the citizens. There is no duty which should come before that. This Government, as a political sop, are putting civil defence on a care and maintenance basis.
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  Nevertheless, I understand from the words of my noble Friend and the assent of the Home Office Minister, who was formerly in his place, that there will be a full opportunity to debate this matter, which will be the occasion for a full discussion on civil defence. All I wish to do is to indicate my opposition to the policies that make Clause 4 necessary.
  Mr. Emrys Hughes: For many years during the Conservative Administration I was asking for a debate on civil defence from the Conservative Leader of the House, but I could not get it.
  Mr. Worsley: I was supporting the hon. Gentleman in that demand. I could not agree more about the neglect in this House—and I do not think this is a party matter—in the past about civil defence. The hon. Gentleman and I hold different views about the matter, but I think it is wrong that neither of us had the chance of arguing this on the Floor of the House. I regret that, without this background of discussion, the Government have taken this disastrous decision.
  In regard to the first two Clauses, like my noble Friend, I find it extraordinary that the Government Actuary should have produced two Reports during the last 12 months—one in June last year and one this month—which show such radical differences.
  I always have a healthy regard for actuaries. I feel that they had a higher wisdom. They use figures in a way which impresses me enormously, so I cannot think that it is the fault of the Government Actuary. To make statements so radically different at such short intervals must indicate that his calculations have been based on quite insufficient data. It underlines the fact that we are groping in the dark in all these matters of social policy. Our demographic intelligence has failed conspicuously since the war to warn us of the movements of population and of the situation with which we were going to be confronted.
  In December of last year, I asked the right hon. Lady the Minister of Social Security how many full-time qualified research workers she had in her Department. She replied that she had three. We are basing both the structure and the finance on an exceedingly elaborate and important social service on guesswork.

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  Now I believe that this Actuary's Report is likely to be only the tip of an iceberg of financial crisis which is going to attack the National Insurance Fund in the years that lie ahead—a crisis caused by entitlements against the Fund running ahead of contributions to the Fund.
  The Actuary's Report mentions two matters on which he now regards himself as having made a mistake last year. He thought then that the lighter mortality rate was a temporary feature. I cannot imagine why he should have thought that. It seems an exceedingly naive point of view. Surely if he had been backed up by a proper intelligence department in the Government he could have avoided that mistake. The Government Actuary also notes in his Report that there has been a fall in the total working population. Surely this is something which could have been foreseen with rather more clarity than has been the case in the past.
  I believe that these features are likely to continue. We ought to know something about the period after 1970. This Report of the Government Actuary deals only with the next couple of years. It says nothing about the latter period. The First Secretary owes it to the House to share with the House a little of his thoughts about the future period. It is clear from the increases which have been made that the Government must intend a further rise before decimalisation, because the new stamps are expressed in decimalised units.
  It has been said that an increase in the total population of over six million is expected between 1966 and 1980 and that less than one million of that six million will be of working age. In other words, the facts that the Government Actuary has adduced in his curent Report are likely to become even more effective in future years than they are today. My personal belief is that the present flat rate contribution will not take the strain. Clauses 1 and 2 are another nail in the coffin.
  In 1948 the total stamp for a man was 9s. ld. I am talking and shall continue to talk of the contribution of employer and employee together. Under the Bill, and including S.E.T., as, to be fair, we must for a very large section of the population, it will be either 58s. 2d.
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  or 63s., according to whether a person is contracted in or contracted out. The present contribution is seven times greater than the original contribution. This is a rise incomparably higher than either the rise in wages or the rise in the cost of living. The real increase in taxation, as the hon. Member for Poplar correctly called it, has been enormous. In round terms there is a £3 addition on a worker's wages.
  Already—in this I am wholly with the hon. Member for Poplar—this level is cruelly high for vulnerable people, particularly those who for family reasons can work only part-time. A good example is a woman looking after an aged relative, but this applies to women over a very large range who have family responsibilities and to those whose ability to earn is impaired through disability, through age, or for any other reason.
  The employment of such people is actively discouraged by our present system of a high poll tax. It is worth saying in passing that such people tend to work in trades which attract the full rate of S.E.T. Lighter jobs tend to be service jobs and to be subject to the full 63s. tax, even for a part-time worker—provided he works over 21 hours. This high level of contribution is one of the principal reasons for the scale of family poverty in families whose head is in work.
  I turn to consider those reaching retirement age. My belief—I hope that I can carry the House with me; my noble Friend spoke on these lines—is that in a society where people live much longer and are much fitter much longer they should be encouraged not to work at full pitch until a certain single date in their lives and then retire and from that moment onwards do nothing. I believe that they should change gear, as it were. I believe that men and women should be prepared, at an age which would vary but which might be anything between 55 and 65, to take less responsibility and less demanding work, either in their own profession or in other professions.
  Social policy should be aimed at encouraging this. Our present social policies have the exactly opposite effect. Such people are losing their earning capacity. They are taxed with this poll tax at nearly the same level as those whose

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  earning capacity is not impaired. We should take steps—this would be a comprehensive measure—to encourage such gradual retirement. The present system, per contra, encourages the elderly to retire when for their own and the national good they would be better doing a lighter job. It turns them thereby needlessly from potential contributors to the fund into beneficiaries of the fund. Therefore, the very existence of this high poll tax contributes to the financial crisis which I see ahead.
  I personally believe that we shall have to turn from the present flat poll tax system, which is perpetuated by the Bill, which has all the unfairness which I have indicated and which the hon. Member for Poplar indicated, and which is harsh and counter-productive, to a percentage system which takes account of ability to pay. Such a system would have enormous advantages. It would, first, ensure that the lower remunerations were taxed for social benefit at lower levels. It would also build into the system as incomes and salaries rose an increase so that the rate of stamp would not need constantly to be adjusted. The increase in wages would automatically produce an increase into the fund.
  Finally, the introduction of decimal currency which is now near enough actively to influence our social policies would be a very good moment to switch to a percentage system. It would be much easier to work a percentage system on a decimal currency. I therefore urge the Government, as part of the great review which the right hon. Gentleman in his peroration will no doubt tell us is in existence, though we see no evidence of it, to consider replacing the flat rate poll tax with a percentage tax as part of decimalisation.
  5.40 p.m.
  Dr. David Owen: In February, 1966, the Government published one of the best White Papers which this Government have produced, on Public Expenditure, Planning and Control, Cmnd. 2915. I think that one of the most precious responsibilities of a back bench Member of Parliament is to guard the control of expenditure. I feel that today public expenditure is out of control and that there is no coherent planning or strategy lying behind it. This is the most serious situation which faces us.
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  Although I shall talk about specific measures, it is a matter of great urgency to have a committee to investigate the control of all public expenditure which will tie in with Cabinet reviews, Treasury procedures and with this House, so that we can follow its working year by year. We should not have a committee purely to deal with public expenditure in individual sectors such as health, education and social security. What we are involved in is the exercise of balance, and this is a major subject to which we should address ourselves, because at present only the Government have to effect a balance between competing priorities. In the present post-devaluation situation, I accept that there must be some cuts in public expenditure, and what is of concern is the balance between cutting the growth of public expenditure and cutting the growth of personal spending.
  I was opposed to cutting public expenditure in the summer of last year, because it seemed to be postponing the evil day when we should have to devalue, but now I fully accept that there is an economic case for it.
  Many of us have drawn attention to the Government Actuary's Report. The situation is so strange that it seems to stem from incompetence or a refusal to face the statistics. In June, 1967, we had a 6d. increase in the National Insurance poll tax, and we were told this would carry us on until 1970, but now the Government come back to us, in February, 1968, and demand another increase, and demand it on an actuarial basis. Either there is something wrong with the Actuary or there is obvious incompetence, and this sort of incompetence cannot go on.
  The Government have a very serious responsibility. Having said this, I would point out that I accept the global figure of these proposed cuts in expenditure, though not some of the individual cuts. The years 1968–69 and 1969–70 are important years, and the Chancellor of the Exchequer will be forced to cut the annual increase in personal consumption of 3 per cent. which people have become accustomed to in this country for some years, to a nil rate of growth in 1968–69 and a fractional increase in 1969–70. To those of my hon. Friends who consider that there should be no cuts in public expenditure I would point out that the

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  alternative is to make cuts in personal consumption. We can argue about individual cuts, but we are talking about the global arithmetic at this stage. In the National Plan period the annual growth rate of public expenditure will now average slightly under the 4¼ per cent. envisaged in the National Plan. This must be judged against the 4 per cent. annual economic growth rate on which these figures were projected.
  In the summer of last year I felt anxious that a Socialist Government faced with this situation of poor economic growth would make ruthless cuts in public expenditure and allow the rise of personal consumption to continue. This is naturally popular, even with some supporters of the Labour Party. The Government have in fact either by accident or design been unable to control public expenditure, and it has increased at the expense of personal consumption. That is quite right, and I believe that as a result they have achieved the right balance in this situation.
  If we are then to argue about individual items, it is for us to show what we would cut and to put forward other cuts, which would take effect immediately, in 1968–69 and 1969–70, when they are urgently needed.
  Mr. Mikardo: The speech which is being made seems to be based on the assumption that the Government estimate of a growth or no-growth rate is correct. The hon. Member has already criticised one set of Government figures. Is he aware that the General Council of the T.U.C. totally disagrees with the Government's estimates of growth?
  Dr. Owen: If we manage to get greater growth, well and good, but we shall get it only if we restrain the demand at home, and to a certain extent this is part of the case to which I was trying to make a contribution.
  People say that many of these cuts make little economic sense in that they are not restraining home demand, but the aim is also to produce savings in the years immediately ahead. Cuts were introduced in public expenditure in January, but still it will grow overall by 2·8 per cent. in 1967–68 to 1969–70. Before the Opposition make their usual attack on public expenditure, they should
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  remember that it grew at a substantial rate even in their own period, largely due to the run-away inflation in 1963–64.
  This is the background of public expenditure. In considering it we must realise that in comparison with other countries, including America and most of the E.E.C. countries, in the last decade we have spent less on social security and have had a much higher level of personal consumption. There is a myth of our being the most overtaxed country in the world, but this is nonsense. We have neglected public expenditure and have allowed public squalor to grow up in the midst of private affluence. Our effort must be to put back the emphasis on public expenditure even at the expense of personal consumption.
  The Government must try to develop a strategy in seeking cuts in all the social services. In the Health Service increased charges may be a tax on sickness, which is to my mind very hard to defend. I would prefer us to look for a system of charging in the Health Service which is not a direct tax on sickness, and that is why I welcome the Amendment which is suggested in this Bill to the Road Traffic Act.
  Before playing about with charges in connection with the Road Traffic Act, I suggest that the Government should consider a wider proposal which would bring in far more money. It is estimated that 100,000 people were admitted as inpatients to the Health Service in the last year for which we have figures as a direct result of road accidents, and the cost was some £10 million to the National Health Service. Out-patient cost would probably amount to another £5 to £10 million, making a total of between £15 and £20 million. It would be perfectly possible to go to the motor insurance companies centrally and present a bill for road traffic accidents at the end of the financial year, and get their actuaries to make an apportionment, the global sum being paid into the National Health Service.
  To those who are against charging in principle I say that this is not a charge on sickness but on motor car users, who are, by and large, the more affluent members of our population. The burden of road traffic accidents on the National Health Service in terms of finance and manpower is very real. One has only

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  to look at the amount collected under the existing system of charges to see that. In 1958–59 it was £357,113, and in 1965–66 it was £633,193. There has been a rapid increase in the number of road traffic accidents and the cost to the National Health Service. Simply to add to the existing system, raising the maximum contribution from £50 or £5, will bring in very little revenue, and the money will be very expensive to collect.
  I wonder if sufficient attention has been given to a memorandum prepared by the Association of Hospital Management Committees and the Association of Chief Financial Officers which clearly shows the expense of collection. A survey in Wales in 1957 showed that the cost in staff time engaged in the collection of this income in the Welsh Hospital Group alone, including finance department staff and other clerical workers, amounted to £3,622 or 30 per cent. of the income produced. A further survey by the Manchester branch of the Association showed the clerical costs of emergency treatment as being as high as 89·5 per cent. of the income. To increase the charge for emergency treatment would be ludicrous, and I hope that the Government will not do that. The cost of collecting further treatment charges was 15· per cent. Taking the total income of 139 hospital groups, supplying information 32·9 per cent. of the amount brought in was absorbed by the costs of collection.
  Those facts must have been known to the Ministry of Health for many years. When it becomes clear that there must be cuts in the Ministry's budget I wish that it would look for changes that it could make without damaging the National Health Service. My right hon. Friend the Minister of Health was right not to choose to cut the hospital building programme. To have done that, as some of my hon. Friends suggested, would have been a savage blow to the whole fabric and structure of the National Health Service. In effect, it would be a tax on sickness, because adequate resources would then not be available, and it would also be financial nonsense.
  How many people realise how much of the present expenditure in the N.H.S. is non-current? Little more than one tenth. The problem we face is that we meet very high maintenance costs in
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  keeping existing hospital beds in old-fashioned hospitals. The maintenance-tocapital ratio of providing an existing bed in a good hospital, which costs £2,000, as opposed to a perfect bed in a new hospital, costing £9,000, is one to 4½. Any private industry, faced by these figures, would immediately push ahead with hospital building. It makes economic sense, and therefore it should not be cut.
  But there are other areas where cuts could be made. The principle of amenity beds has been in the N.H.S. for some time. They give privacy, for which the patient pays, but they do not give the pre-emptive right to a private bed. If another patient must go into that bed because medical reasons make it vitally necessary, the person who is paying must move out. The charge for the beds is at present hopelessly unrealistic, and we could make much more money from them than we do now. At present they bring in £342,482 a year. Why not advertise them? How many people know that the facility exists? It is right that the N.H.S. should aim to provide a varied consumer service. What is wrong is to allow somebody to buy specialist skills and equipment at the expense of others whose medical need is greater. But privacy means a great deal to a businessman or a professional man, and if he is prepared to pay for it I cannot see why the N.H.S. should not start to make money from the amenity beds. [Interruption.] And if a docker wishes to pay for an amenity bed I do not see why he should not.
  The N.H.S. is grossly under-financed. Those who object to private practice, as I do, must face the fact that if enough money is not spent on the N.H.S. more and more people will opt out of it. By rigidly rejecting any alternative financing system, we are damaging our Health Service. That does not mean that I want random financial charging in the N.H.S. To introduce a system of charges for consultation would be total anathema to me; it would be a great barrier to a patient seeking the primary consultation. I shall not go into the argument about prescription charges, but many people feel that they form a great barrier to consulting. I think that that fear is exaggerated, but I agree that it is justified in some cases. If my hon. Friends really believe

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  in the N.H.S. we must be more objective about financing it.
  I return to the question of the National Insurance Fund. Why do we continue with short-term sickness benefit? I cannot see why it should not be a responsibility imposed on the employers for which they will have to make a minimum standard of provision laid down by law, with safeguards for the disabled. For example, if employers were made responsible for the first two or three weeks of sickness there could be a saving to the Fund of £70 million or £100 million. Was this discussed in Cabinet as an alternative to raising the National Insurance Fund contribution? Did my right hon. Friend look at the whole financing of the Fund and consider that as a way of saving £70 million or £100 million in a year, and, what is more, saving it very rapidly within the next financial year?
  There are other areas in which we can look rather more realistically at financing. It has been said that we must move away from the regressive poll tax. Most of us on this side of the House have long since believed that we must have a graduated contribution, compulsory, perhaps even including a contribution from married women who work. That would introduce to the N.H.S. a system of contributory financing which is much fairer than the present system. We are told that this would take a long time, and that we must wait for the social services review. But all the time we wait we see short-term measures introduced which simply damage the social security framework, and that is very serious.
  I find it very hard to understand how in the statement of my right hon. Friend the Prime Minister on 16th January it was possible to say that we would have a generous system of exemptions from prescription charges, which I support—though many of my hon. Friends will point out how difficult it is to implement—and proposed making this £25 million good by increasing National Health Service employees' contributions of 6d. as soon as possible. Those two matters are unrelated. I do not see the logic of the argument, unless it is said that my right hon. Friend the Minister of Health must make a certain amount of cuts in his own Budget, of £29 million in 1968–69 and
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  £31 million in 1969–70. If that is the order that goes to my right hon. Friend, why not consider the alternative methods of saving money?
  To judge from the Answers to Questions put to the Ministry, I do not see evidence that it has ever looked at alternative finance. When forced to make economies in its budget, it looked for the only thing to hand, which was prescription charges. I cannot understand the difficulties. Certainly, when given a direct choice between cutting the hospital building programme and imposing prescription charges my right hon. Friend chose rightly, and I support him. But he should never have been put in the position of having to make that choice. We must have contingency planning in the Ministries, but it is still absent.
  Hon. Members opposite may cheer, because they think that what I have to say next is exclusively their policy, but it is not. We must link together the Ministries of Social Security and Health and put them under one Minister, a Secretary of State for Social Affairs, speaking in the Cabinet for that Department and balancing the claims of the existing different Ministries. This is utterly vital.
  The Government are causing considerable upset by some of these measures to people who believe desperately in these services. Probation officers, social workers, doctors—and there are quite a number of Socialist doctors—and others are finding it increasingly hard to justify this piecemeal approach to social security. We cannot go on talking about waiting for the review. This has become a problem of great urgency.
  There is also a problem in that, while increasing these contributions, we are already seeing a situation in which poor families, desperately in need of the new increase in family allowances, are finding that it is not going to be enough, and just as the Government are having to ask the House for increased contributions so they should further increase the family allowances.
  I know that this is unpopular and that people say there are no votes in it. But the Chancellor of the Exchequer is, I believe, aiming for the system of give-and-take, tying together benefits and

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  fiscal policy, for which we have asked for two years. I hope that he will soon follow this with an increase in the family allowances, because that is badly needed.
  The whole concept of financing the social services must be looked at realistically by the present Government. I know that there is extreme anxiety about increasing charges. It is felt that by doing sc we open the floodgates to abuse, or that we are creating two services. I am extremely worried by the fact that, in the health services, the private sector is continually growing even though 95 per cent. of the people do not feel dissatisfied with the N.H.S. The dissatisfaction is largely confined to administrators and people who work in the National Health Service. But there are people who genuinely feel dissatisfied and unless we match resources to need, we shall create two services simply by refusing to face the facts of life.
  Having said that, I pay tribute to the fact that we are maintaining high levels of public expenditure and I say to my hon. Friends that when the Budget comes they will find that it will have to cut domestic consumption. They will not like that either. But we cannot, in the present economic situation, have it both ways. Far too many of us are trying to have it both ways.
  The Government have made the right choice in keeping public expenditure to reasonably high levels and in making cuts in personal consumption but I am under no illusion that this move will be popular with many people. Nevertheless, I believe it to be right.
  6.3 p.m.
  Sir Cyril Osborne:I apologise to the hon. Member for Poplar (Mr. Mikardo) for intervening when I had missed the first part of his speech. But I came into the Chamber especially to hear him. He is one of the most attractive and amusing debaters. What he said provoked me to take part, but I apologist for not being here for the beginning of his speech.
  The hon. Member damned the Bill hip and thigh, but he will not oppose it because, he says, the Liberals are going to do that for him. He is still supporting the Government responsible for this policy. Since he so bitterly opposes that policy, however, I would have thought
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  that he could not continue to support the Government. After hearing his moving and humane speech, especially on the case of children's milk, I cannot understand a man of such depth of feeling and sincerity not refusing the Whip and helping to destroy the Government he feels responsible for so much social harm.
  Most hon. Members will agree that this is a miserable Bill, which has practically no friends except those sitting on the Government Front Bench.
  Mr. Emrys Hughes:The hon. Gentleman is mistaken. The spokesman for the Opposition Front Bench said that right hon. Members opposite would not divide against it.
  Sir C. Osborne:That does not make them friends of the Bill. Nor is the hon. Member for Poplar going to vote against it. It is fair to say that this is a miserable little Bill with few friends in the House. If there were a free vote tonight and no electoral consequences, the Bill would be thrown out neck and crop. [Interruption.] Seven Labour candidates have tried to throw me out of Louth and all have failed.
  Mr. Emrys Hughes:How is the hon. Gentleman going to vote?
  Sir C. Osborne: The hon. Member for Plymouth. Sutton (Dr. David Owen) said that public expenditure was completely out of control and that some cuts were inevitable. He said that this sort of incompetence cannot go on. But this is his own Government—the Government he is going to support. Yet he says that such incompetence cannot be allowed to go on. I hope that that sort of message will go to the voters in the by-elections in the next few weeks. They will show him. But he made one mistake. He said that the only way to get economic growth was to restrain home demand.
  Dr. David Owen Dr. David Owen indicated dissent.
  Sir C. Osborne>: I wrote his words down. If I have mistaken him, I apologise, but we shall see in HANSARD just what he did say. But the hon. Gentleman is wrong. He is looking at the problem from the wrong point of view. It is not that we want continuously to cut and cut. What we have to concentrate on is how we can increase national productivity, the amount that the Government

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  have to deal with. We have to increase what is available. Why are we in this mess? Why are the cuts necessary? Why this Bill? These are all direct consequences of the Prime Minister's statement in July 1966.
  Herbert Butler: And Lord Thorneycroft.
  Sir C. Osborne: Lord Thorneycroft is not Prime Minister. The Prime Minister sits on that side of the House. I can understand that hon. Members opposite feel uncomfortable about all this. If this Bill had been brought in by a Tory Government, they would have been raving mad against it. Only a Ramsay Macdonald could have brought this from the Labour benches. This is 1931 all over again. The ghost of Ramsay Macdonald is walking in the Labour ranks today.
  Why is all this necessary? It is because the Prime Minister said, in his tragic speech of July 1966, that this sort of adjustment would be necessary. Why? Because, he said, we were spending more than we earned. What is the gap in our accounts which makes it necessary to bring in a miserable little Bill like this, which is only part of a bigger package?
  As I understand it—and the right hon. Gentleman will correct me if I am wrong—our indebtedness as a nation is almost £800 million a year. By itself this sounds a big figure. That is the extreme amount by which we are in the red. But the gross national product is about £30,000 million a year. We are, therefore, on the wrong side of the balance by about 6d. to 9d. in the £ at the most. That is all. But the way the Government are tackling it is to cut that 6d. instead of increasing our income by 6d.
  Why cut the people's standard of living all the time? Why cut the social services, of which both sides of the House have been so proud? Why not tackle the problem from the right angle and say, "Let us get 6d. more into the kitty"? This is the way to tackle the problem, and I am surprised that the Government have not faced it this way. The right hon. Gentleman inherited from the present Foreign Secretary the National Plan. If that had succeeded, as the Foreign Secretary boasted it would, this miserable Bill would not have been necessary, nor would
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  the Prime Minister's policy of July, 1966. It is because the Government's economic policy is such a miserable failure that this Bill is necessary.
  In order to help, even with this futile policy, the Government have had to borrow many hundreds of millions of pounds from the gnomes of Zurich, at whom their supporters have so often sneered. We have had to go on our hands and knees to borrow money from them. Last time the Chancellor signed a Letter of Intent, in which the Government agreed that three times a year the foreign bankers would be allowed to inspect our books to see if this sort of thing was necessary, if it were justified. They can look over our shoulders and say, "You can do this, you can do that, that is wrong, that is right".
  When I asked the Prime Minister last week if Members of this House could have the same facts given to them as the international bankers were to receive, he said "No". I would like to know whether the right hon. Gentleman the First Secretary can justify the economic facts of our nation being given to foreign bankers but denied to Members of this House. Is this the sort of democratic Government of which the Labour Party are so proud? [Interruption.] This Government has been mishandled by the Labour Party, and not the Tories.
  This is what I should expect hon. Members opposite, if they were sitting on this side of the House, to be fuming about. Before we can really judge whether this is necessary we ought to have the economic facts given to us. Would the right hon. Gentleman deal with this?
  The one Clause in the Bill that is the least defensible is Clause 3 which is to cut school milk. It says that milk shall no longer be provided to pupils of secondary schools. If the Labour Party over the years, for as long as I can remember, have thumped one cause harder than any other, it has been that children at school should be reasonably well fed and that one of the best ways to help that was by free milk. This has been a cardinal feature of the Labour Party. Now they are running away from it. [An HON. MEMBER: "What would you do?"] I am not running the country—it would not be in such a mess if I were.

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  This is the tragedy of the party opposite. They are running away from the principles upon which their power was based. It was this sort of appeal that they made in 1966 which got them the unexpectedly huge majority. They know that they are ratting on their own people. They are letting the old people down. That is why they look such a group of guilty men. The hon. Member for Ebbw Vale (Mr. Michael Foot) used to love to play with the phrase "guilty men". He should come and sit on this side of the House and look at the guilty men, who run away from the most sacred principle that their party has ever had.
  The total saving through the Bill is £16,780,000. It is quite a sum, but it is tiny compared with the problem facing us, which is not one of saving but of earning. Hon. Members should look at my side of the problem for a little while. I had a Question to the Prime Minister today that vitally affects this Bill. I asked him:
  "… in view of the fact that November's rise of 1½ per cent. in industrial production was still below the pre-squeeze of July 1966, when he expects his target of 4 per cent. annual increase to be achieved."
  As usual the Prime Minister sidestepped the issue and gave a half-truth an3wer, the sort that we now expect from him. May I remind hon. Members opposite of the true facts. These are why this Bill is necessary. I have here the monthly Digest of Statistics for January 1966, table 46 of which shows that, seasonally adjusted, industrial production, for all industries, in July 1966—when the Prime Minister said that he was bringing in this new and horrible policy which his party would scarcely accept—stood at 135. The next month it was down to 134, in September down to 133, October down to 132 and November down to 131. This Bill, to save money, is necessary because our industrial productivity has continuously fallen.
  If the rise that the Prime Minister promised this House and the country had been achieved, there would have been heaps of money in the national kitty, making this Bill unnecessary. It is the failure of the Government to get increased industrial production that has made this Bill necessary. What is such a tragedy is that we are concentrating our efforts on cutting and cutting, when
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  the Government should be devoting their attention to increasing production. It is on this that they stand condemned.
  The latest figure of industrial production is only 134, still one point below the 1966 figure, when the Prime Minister said that we were in such a desperate mess. If his promise of a 4 per cent. annual increase had been achieved, we would by now have had industrial production up to 141, and that would be giving us scores of millions of pounds more in the national revenue, making such a measure as this unnecessary.
  It is because the Labour Party have failed so miserably on the production front that they are condemned—not only from below the Gangway but even by those in the centre, by the hon. Member for Plymouth, Sutton (Dr. David Owen), who spoke so half-heartedly in support of this miserable Measure. I regret that this Bill is necessary, for the sake of the people who are to suffer the consequences. I would urge the Government to turn their attention to industrial productivity, to get more money into the kitty, so that this step will not have to be repeated.
  6.18 p.m.
  Mr. Michael Foot: Before coming to some of the matters to which the hon. Member for Louth (Sir C. Osborne) and others have referred, I should like to say, as my first comment on the Bill, that I think it is of extremely dubious constitutional propriety. When we had the general package presented to the House in January some of us objected, not only because of its particular content, but because of the way in which some measures which we accepted were wrapped up with others which we found extremely distasteful. The crisis was caused because many of us believed that this was an improper way for the Government to present their measures to the House. We thought that it was exploiting the procedures of the House to assist the Government, and that they ought never to have resorted to such a step. It appears in this Bill that they are resorting to that kind of device again.
  There are some Clauses in the Bill dealing with matters of which all of us on this side of the House would approve. However, they are combined with other measures which are entirely unconnected and, by wrapping up the package in this

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  way, we are denied the right to deal with the matter as we ought as a House of Commons.
  In the history of the House of Commons, there was a considerable process of what was known as "tacking". It usually arose in disputes between this House and the House of Lords. Measures were introduced by Governments in bygone days, and tacked on to them were features which the Government knew would be objectionable but which they hoped to get through both Houses. That went on until about 1702, and no one would wish the Labour Government to revert to that precedent.
  It is contrary to the proper procedure of this House, and, if hon. Members turn to page 836 of Erskine May, they will see this statement:
  "As for the modern equivalents of bills of aids and supplies, namely, Consolidated Fund and Finance Bills, the rules of order of the House of Commons exclude the possibility of foreign matter being tacked to such bills by way of amendment; and respect for constitutional practice prevents the inclusion of such matters among their original provisions."
  By presenting this Measure in this fashion, the Government have not shown a proper respect for the constitutional practice laid down by Erskine May. It may be that the House of Lords would decide to regard the Bill as one in which the Government have resorted to the old practice of tacking. If it did, there would be a constitutional crisis. However, certainly there is a constitutional crisis inside the Labour Party because of this process of tacking, and I know that I speak on behalf of many of my hon. Friends when I say that the more that the Government revert to the practice of tacking to get measures through the House, the more hostility they will arouse.
  All Governments have to present unpopular measures, though I must say that this Government have exceeded their quota. However, it is much better for the Government to present them quite clearly and individually and tell us that they ask us to vote upon them, instead of trying to mix them up with others.
  I come now to Clause 3, which many of us find particularly offensive. I need hardly remind hon. Members that it deals with school milk. Certainly there
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  are hon. Members on this side of the House who did not find the Chief Secretary's explanation at all satisfactory. He said that there had been some kind of examination which had shown that, from a nutritional point of view, it was not necessary to maintain the supply of free milk in secondary schools.
  It is very peculiar that we have not had that examination presented to us before and that it cropped up only when the Government discussed these measures over Christmas and in the early part of January. I had heard before no serious argument from the Government for stopping the provision of free milk in schools. All previous reports have indicated the opposite conclusion to that presented today.
  If one examines the material provided so efficiently by the Library as background information for this debate, he will see that all the material tells in the opposite sense to that presented by the Chief Secretary. The National Food Survey of 1964, which I gather is the latest information available, does not point to the conclusion that the Chief Secretary has presented. That survey emphasised that the families who derived special benefit from the provision of school milk were the largest and poorest ones. By taking away school milk, we have selectivety in reverse with a vengence. The poorest people will be hit worst, and they are the families who, according to every survey, it is most difficult to help.
  My hon. Friend the Member for Plymouth, Sutton (Dr. David Owen) advocates quite rightly an expansion of family allowances to deal with the situation. But we are forced to the conclusion that it is an absurd way to come to the assistance of our poorest families who have been causing the greatest concern for some years to be considering a measure which will hit them hardest.
  It is quite wrong for the Government to think that they can force through a measure demanding that we should abandon the provision of school milk on the trumpery evidence which we have been offered from the Treasury Bench. There will be an opportunity of debating this in Committee, and the Government will have to produce much better evidence than any that they have offered us today if they are not to be, as I hope, defeated in Committee.

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  No one can deny that the provision of free school milk in secondary schools is as simple a piece of Socialism as one could imagine. It has been operating successfully for 20 years. We have not had a single scrap of evidence to contradict the opinion of most medical authorities who have said that it has made a great contribution to the nutrition of our children. It is difficult to calculate what would be the condition of children's teeth and their general standard of health if the milk had not been provided.
  Most of the evidence provided by the Library underlines the conclusion that the provision of free milk in our schools has been an important contributory factor to the welfare and improving nutritional standard of the people. We have not had a scrap of evidence telling against that claim. It is shameful that a Labour Government can propose that we should abandon this Socialist measure after it has been in operation for 20 years.
  My hon. Friend the Member for Poplar (Mr. Mikardo) touched on one of the aspects of the measure which has caused us the greatest concern. It is the further heaping of burden upon lowest-paid workers. No one can deny that the package with which we were presented in January hit hardest the lowest-paid worker. He was hit by the 2s. 6d. prescription charge, hit by rising prices resulting from devaluation or pre-devaluation, hit by the previous proposal for curtailing school meals for certain categories of children and, above all, hit by the steady increase in the poll tax. Accumulated together, all these burdens fall hardest on the lowest-paid worker.
  My hon. Friend the Member for Plymouth, Sutton says that part of the argument is whether the cuts are generally necessary. That is an argument into which I should like to enter, but, within it, there is also the question of making the cuts fair, as he acknowledged. In presenting the whole package to the House, it was part of the Government's claim that it was a fair package. We say that it is grossly unfair, and one of the aspects making it so unfair is the item about the stamp which is presented to us in this Bill. It is said that when this increase comes into operation, there will have been increases totalling 5s. imposed by the Government. As some of
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  my hon. Friends have said, in saying that, it is only fair to compare it with the increase in benefits. That is a justified retort, but it is not a sufficient retort, and certainly it is not one which is likely to satisfy any of my hon. Friends.
  As opposed to right hon. and hon. Gentlemen opposite, we on this side of the House have fought three General Elections on the pledge that we would abolish the poll tax. There is not the slightest doubt about it. We have said that there is a remedy for this situation. There is not a single hon. Member on this side who is not opposed to the poll tax and who has not condemned it as being grossly unfair. We were sent here partly because we said we would uproot this evil at last.
  I remember the debate about old-age pensions in November, 1964, when the Government went ahead with an increase in pensions, but said, "Our aim is to proceed as soon as we can to fulfil the pledges we have made in carrying through the abolition of the poll tax and the comprehensive scheme for pensions."
  One of the most attractive features of the new pensions plan drawn up by the Leader of the House, acting on behalf of the Labour Party, was that it abolished the poll tax. Yet once again we are being asked to vote for a measure which says that the poll tax is not merely to continue, but that the burden of it is to be made heavier than ever. It is an intolerable situation in which to place elected Members of the House of Commons. One of the most grievous aspects of present-day politics is the growing belief of many people that election pledges do not count. They do count. It would have been scandalous if this measure had gone through without severe protest against what is being done.
  What is the Government's position about abolishing this poll tax'? Why did not they consider it on this occasion? Is it because the plans are not prepared? The Labour Party scheme for abolishing the poll tax and overhauling the pensions scheme was produced in 1957–11 years ago. I can understand the previous Minister of Pensions not introducing the scheme in October, 1964. It would have been difficult to have done so then. But not three years later. The plan must be

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  in the Ministry, so why is it not introduced? The most likely reason—the most creditable reason to the Government—is that they believe that it would impose considerable financial burdens on the Exchequer and that this is not the best moment to do it, because certain people who survey the finances of this country would not like it.
  In the debate in October, 1964, about raising pensions, my right hon. Friend the Member for Sowerby (Mr. Houghton) at the end said that it was very difficult for us to go ahead with the increase because the gnomes of Zurich would not like it. In those days even Ministers used the phrase "the gnomes of Zurich". My right hon. Friend the Member for Sowerby said that we were not going to have to care about them in future; we would go ahead with our plans none the less. But we have not gone ahead with our plans. They have gone back into the pigeon holes.
  Did the Government consider in December and January when they were looking at these cuts whether they could introduce the fair Labour Party system for dealing with pensions rather than continue with the unfair Conservative plan? They may say, "We did not have time. It had to be done in a terrible rush." One answer to my hon. Friend the Member for Plymouth, Sutton, who was saying that these proposals looked at in isolation do not stand up to examination by those who have studied the social services, is that it had to be done in a great rush.
  Why such a rush? Because they feared another run on the £, because they had signed the Letter of Intent, and because they were concerned about the general economic situation. That is the answer, is it not? We all know it. It was because a panic had been worked up in the country. In my opinion the panic went beyond all bounds. We had almost plunged ourselves into a state of morbidity in the way in which we discussed our economic affairs. Taking the past 20 years, despite all the qualifications made in all parts of the House about the way it has been done, this country has improved its economic situation very greatly. We have increased our exports tenfold as against a sixfold increase in imports. Our economic position is not
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  as described in the Daily Mirror. Our economic position is strong. Therefore, one of my main charges against the Government, and one of the reasons why I believe that what they did between December and January was so much to be criticised, is that they allowed the mood of panic to sweep across the country unchecked and even encouraged. It may be that they have recovered a little of their poise now, but this Bill is one of the legacies of that spasm of hysteria.
  This is not the Public Expenditure Receipts Bill; it is the Cecil King (Appeasement) (No. 1) Bill. We have coalition measures without a coalition. The Front Bench opposite approves of the Bill. We shall have the Cecil King (Appeasement) (No. 2) Bill in a week or two when the Government have worked out a scheme for applying the exemptions to the prescription charges, if they ever can. They had not worked it out when they presented the package to the House of Commons. They came along and said to us, "You must vote for this, even though we do not know what it means."
  Sir C. Osborne: Why did you vote?
  Mr. Foot: I did not. The hon. Member for Louth (Sir C. Osborne) jumps to conclusions so fast it is hardly possible for us to get a word in. That is why some of us would not vote and why we propose to continue our opposition to a Measure which we think arises from that period of hysteria, which should be forgotten. Certainly it should be drastically amended. We believe that by adopting this course we will be performing a service for the Government, for the Labour movement outside, and for the people who sent us here.
  The Bill introduces a shameful proposal for abolishing a Socialist measure, the provision of milk in schools, and it imposes very heavy burdens on the lowest-paid workers in defiance of all the methods for dealing with these problems which we have advocated at three General Elections.
  If the Government continue upon the course of presenting measures such as this to the House of Commons they will never recover their position in the country. Governments are entitled to think about their support in the country—indeed it is their duty—but they should

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  be thinking how they can rebuild the confidence of their own supporters, let alone the floating voters. Soon the only supporters the Government will have will be the floating ones. The others will have sunk.
  It is a question of rebuilding the support, first, of our own supporters. We will not rebuild it with unjust measures of this nature. We will not rebuild it with measures which destroy Socialist measures which we have had for 20 years or more. We will not rebuild the confidence of the Labour movement by asking people to dismantle the Health Service. That trick has been tried once before. It does not work. It has been tried and it had to be rectified. It involved a long painful process inside the Labour movement to try to rescue the Government from the mistake of making attacks on the welfare services which have chiefly been built by the Labour movement, and of which it is so justly proud.
  Some of us refuse to vote for this Measure. The more we can get to abstain from voting for the Bill tonight the better it will be for the health of the Government. Sometimes some of my hon. Friends say, "Are you not trading on somebody else's action; are you not abstaining in the hope that others will go into the Lobby and enable you to escape from your difficulties?" I am not trading on such a hope. I am asking as many hon. Members as possible on this side to abstain from voting for this anti-Socialist measure. The more hon. Members on this side who do that, even to the point of inflicting a defeat on the Government, the sooner we shall change the course of Government policy, the sooner we shall start to rebuild the strength of the Labour movement, and the sooner we shall get the kind of Government that the people of this country voted for and deserve.
  6.40 p.m.
  Mr. John Pardoe: I go much further than the hon. Member for Ebbw Vale (Mr. Michael Foot). I ask hon. Members not to abstain but to join the Liberals in dividing the House, and to vote with us. That is my position because I believe that this is a disreputable piece of legislation. It is almost incredible if one looks back to the 1964 election, to realise that, just three years later, we are facing this kind of shame-
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  ful legislation. We are continually being told, whenever we raise social security matters, that we must await the great, all-pervading review and the next step in it. I do not know whether the Government will tell us that this is one of the next steps, but, if it is, it is not one which I intend to take.
  If this is a pitiful Bill, the official Opposition are a good deal more pitiful. The noble Lord the Member for Hertford (Lord Balniel) made a strong attack and did not say one good word for the Bill, but he will not vote against it. Why not? Does he agree with the Bill? He said that he does not. I believe that this is part and parcel of the deadly consensus which has this country in its grip—"hands across the Dispatch Box," "unity to all and sundry." Did the noble Lord recommend this ignoble posture to his party, or did he recommend a different course which they would not follow?
  Lord Balniel: Perhaps I can help the hon. Gentleman. Surely he recollects our major economic debate, when we put down a reasoned Amendment stating our views on the totality of the cuts which were necessary to rescue the economy from the total mismanagement which had resulted in devaluation, but we did not vote against the main Question and it seems logical that we should not vote against the specific reductions in expenditure which are contained in the Bill.
  Mr. Pardoe: I do not think that two faults make it any better. I am aware that the noble Lord's party did not vote with the Liberals when we divided the House against the cuts on that occasion. They should certainly have joined us tonight or, better still, have divided the House themselves. I suspect that the reason why the Tories will not join us in the Lobbies is that any mention, however passing, of cutting school milk is enough to get Tory support for any Bill, however disreputable.
  I will not deal at length with the civil defence measures, but I am not happy with the lack of definition of the words "care and maintenance". The noble Lord did not refer to these measures, either, with the ingenious excuse that he would be able to do so on an Order later on. He need not be so coy. He is his party's spokesman on social security

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  and, therefore, is ignorant of civil defence. So am I, but I am not coy about it. But this is the first time that ignorance has ever stopped the Conservative Party from speaking about something—
  Lord Balniel: I am sorry to interrupt the hon. Gentleman again, but we will be able to debate civil defence on the Order. Let me make it clear. We do oppose the Government's decision to abolish the Civil Defence Corps. I do not claim a specialised knowledge of the subject, but I make it clear, on behalf of the Opposition, that we are opposed to the abolition of the Corps and we will record our views on the Order.
  Mr. Pardoe: By fits and starts throughout my speech, we may elicit the Conservative Party's attitude.
  We have been told that the Bill is part of the measures to make devaluation work. For my money, it is part and parcel of the evidence that no preparations were made to make devaluation work before it was upon us. One can only say that if one has advocated devaluation over a long period. I have advocated it for at least three years within and without the House, and I believe that a contingency plan should have been drawn up for it. We warned the Government time and again that it would come, but, when it came, no plans were in the pipeline and no contingency thinking had been done.
  We have been told that one of the reasons for the Bill is the shortfall in the National Insurance Fund. We have been saying over and over again that this is inevitable. Of course there is a shortfall in the Fund and there will continue to be, because the whole system of insurance has been overtaken by inflation. Therefore, as we have said, it is time to reorganise the financial structure of our social security system. The Government should have known this. They have been warned often enough, not only from these benches but from their own side.
  I have consistently opposed, on behalf of my party, the poll tax. We have urged the abolition of the weekly stamp and individual contribution records. We have an alternative. We have said that it should be replaced by a social security
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  tax related to earnings. It is necessary that this tax should be clearly differentiated from the body of taxation. If it is merely part of the Income Tax, for instance, it will be raided for east of Suez or any other follies of some future Government.
  We have said, therefore, that it should he a percentage tax on a firm's pay-roll, with two-thirds from the employer and one-third from the employees. It should be collected by the Inland Revenue. which would simplify administration, and it should be totally reserved for social security purposes. That is immensely important.
  Almost every time one speaks on social security, one must deal with the myth of the National Insurance Fund. There is, of course, no such Fund, in the sense that one normally refers to it, in insurance terms. Why the Government Actuary has been called into this matter at all I do not know, since I see no actuarial element in our social security procedure. There may be a small relic of it somewhere, but it is difficult to find.
  So, there is no insurance principle, no Insurance Fund and no actuarial element. It is time that the Government realised that major changes have taken place in the financial structure of our social security system and swept it away and started again.
  I would not mind these increases so much if Labour had improved the general service in line with its promises, but when one reads through "National Superannuation", published in 1957, or "New Frontiers for Social Security", published in 1963, one sees that these have become the tombs of Labour's idealism.
  One certain principle which was established in those pamphlets was that contributions were to be related to earnings. The speeches of right hon. and hon. Members opposite in and before the election campaign of 1964 showed that Labour was not in the least modest about their proposals or lacked confidence in their ability to put them into practice. For instance, in his election address in 1964, the Prime Minister said:
  "An income guarantee will ensure that everyone has enough to live on as a right and

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  without recourse to National Assistance. This will come without delay."
  Yet three years later, it still has not come.
  Since then, there have been restatements by hon. Members opposite that they still believe in this. The right hon. Lady the ex-Minister of Pensions, who had to resign from that position, said in a television broadcast on 22nd March, 1966, which I am sure she will remember:
  "Must people really wait until the next century before they get a decent pension? The Tories seem to think they should. The Labour Government will create a fair and just scheme far everyone now, not in the 21st century. Our scheme will give retirement on half pay arid built-in safeguards against any rise in prices."
  Labour have abandoned all their plans which they had when they were in opposition, and have replaced them with a review which is not a policy. The Conservative Party has no alternative to offer, because if they had an alternative they would not be too ashamed to vote in the Lobby tonight. We do have an alternative and that is why we claim the right to divide this House tonight, and we certainly shall do so.
  Our alternative, stated in certainly the last three elections, is that there should be a flat-rate basic pension which is large enough for people to live on, so that they should not have to crawl for what used to be called National Assistance and what is now called supplementary benefit. There should be a flat-rate basic pension across the board, and it should be equal to at least half the average earnings of a man in industry. It should remain that proportion of the national wage, so that the pensioners of this country continually share in the growing wealth of the nation. I remember that kind of phrase coming from hon. Gentlemen in the last election campaign and in the one before that. But I say that it is very dangerous if the Government get involved above a flat rate for earnings-related benefits, because I believe that this will involve them in all manner of complications. It is very much better to leave bespoke pension policies to the private sector, and for the State to confine itself to paying an adequate flat basic rate on which people can live. So I ask the Government to leave that part of it—the tailor-made part—to occupational schemes.
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  I should now like to turn to what the hon. Member for Ebbw Vale called a "Socialist policy of school milk." I was not entirely certain in my own mind that it was a Socialist monopoly. What I find extraordinary about the Government, is that their only alternative to free milk seems to be no milk at all. It would have been perfectly possible, if they were really up against the financial wall, to exact some sort of charge for milk. I have shown them a way in which they can do this, without any of the difficulties of selecting between the poor children and the better-off children. So it is absolute nonsense to suggest that the only alternative to free milk is no milk, or the Conservative solution of charging the full price to everyone. I have said that we should amalgamate the price of milk and the price of meals at an economic level, and we should then add that benefit as though it were in kind to the taxable income at the end of the year on the Income Tax form.
  Those of us who are parents put on the Income Tax form what we receive in family allowances and we are taxed on it. There is no reason at all why we should not have a figure inserted there of the value of school milk and school meals which our children have received in the course of the year, and we should be taxed on that. It would be perfectly possible to upgrade this amount in such a way that the payers of standard rate Income Tax would pay the whole economic cost back to the Exchequer.
  There would be no collection of the money in the school classrooms; no teachers and no other kids would know who was getting the free milk or the free meals. None of those problems would be present; they would all disappear. I am sorry to repeat this again and I expect that the Joint Parliamentary Secretary to the Ministry of Social Security, who is now on the Front Bench, has heard this before. But I have said, over and over again, that this is the policy which the Government should follow and I have explained it in detail in letters to him in the past.
  There is, of course, a very considerable difficulty in the proposal—and this was mentioned by the right hon. Gentleman who spoke from the Government Front Bench—of selecting children on nutritional grounds or on grounds of poverty.

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  I accept that. It is terribly difficult to tell who requires milk for nutritional reasons and that is why I do not advocate that that should be done.
  On National Health contributions, it is true—and it has been said already by hon. Gentlemen opposite and on this side—
  Rear-Admiral Morgan Giles: Before the hon. Gentleman leaves the subject of schools and taxation forms, would he also agree that it would be equitable to put on the taxation forms at the end of the year the amount which people who educate their children in the private sector have saved the country, and to allow tax accordingly?
  Speaker: The debate is wide, but not as wide as that.
  Mr. Pardoe: I should be delighted to follow that particular hare, Mr. Speaker, but I shall bow to your Ruling on that. National Health contributions have had to increase because, as we all know, the National Health Service is hopelessly under-financed. It will still be hopelessly under-financed when we increase these contributions. They will not make a halfpenny worth of difference to that. We are spending this year a much lower proportion of our resources on the health service than many countries in Europe, and certainly far lower than in America. In fact, the proportion of our resources which goes into health has not increased since 1949, whereas in many countries in Europe it is increasing by 1 to 2 per cent. every 10 years. So, again, I ask the Government not to come to this House with a miserable, pathetic Measure to put the odd pennies on the insurance contribution, but to come here with a thought-out scheme for re-financing the health service to provide it with an increasing share of the nation's resources. I should have thought that was a Socialist priority. If the Government have forgotten that it is a Socialist priority, it is certainly a Liberal priority.
  They have also said that these increases are to pay for the exemptions, and the Financial Secretary said—and these are his very words—that the Minister of Health was discussing these exemptions with the doctors and was "about to discuss arrangements with
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  other interests." So here, again, is the great state of preparedness which some of us might, I suppose, have been led to expect. They are "about to discuss arrangements," but they have committed themselves to exempting whole categories of people, such as the chronic sick—how do you define them?—the old, the children and all the rest. I am all in favour of these exemptions, but one thing I know is that they cannot be done.
  There is no way by which this can be organised, and the Government should never have committed themselves to that promise without a full-scale investigation as to how it could be done. The Government must not go to the doctors now and ask the doctors how they are going to get them out of the mess into which they have got themselves. It is not their business; it is not the chemists' business. These discussions should have been held much earlier.
  So the Government's social policy is today a thing of shreds and patches. They have lost all sense of purpose in the social field. Hon. Gentlemen opposite who oppose these Measures should vote against them. There is no Motion on the Order Paper in which they can pick holes; no words to which they can take exception as they have done in the past on some occasions, excusing themselves from voting for that reason. There is no fear, either, that they will defeat the Government. We are not yet quite large enough for that. What is more, they will not even have to rub shoulders with the Tories in the Lobby. There would be no unpleasantness like that.
  Are they at the next election to go to their constituents behind their party's slogan, which will inevitably have to be, "Go with Labour for the guts to break our promises." It is no good, after their party has been defeated at the next election, saying that they lost because the Government did not do the right things, as their children will ask them, "Daddy, what did you do when the Labour Government took the wrong turning?" They will say, "We sat on the grass and took our boots off" and their children will rightly despise them. What is the point of having conservative measures from a Labour Government? One might just as well have them from a Conservative Government. They might actually work; I doubt it, but they might. I hope that

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  hon. Gentlemen who feel this way will vote with us tonight in the Lobbies. If they do not, they will be exercising their conscience by the seat of their pants.
  6.59 p.m.
  Mr. J. J. Mendelson: When my right hon. Friend the Chief Secretary to the Treasury began to introduce the Bill today I felt sorry for him. As he went on presenting the case which he tried to make I felt even more sorry for him. For us on this side, this is a serious argument and a serious debate. That is why my right hon. Friend found himself in such a difficult position.
  The scene changed completely when the noble Lord the Member for Hertford (Lord Balniel) intervened. It was reduced to the level of obvious hypocrisy and humbug. My hon. Friends and I showed the noble Lord that we did not intend to take any humbug from him. The noble Lord had the face and the effrontery to talk about shifting the burden on to lower paid workers. Only a few months ago he was at the Conservative Party conference at Brighton, where the right hon. Member for Enfield, West (Mr. Iain Macleod), who sat next to the noble Lord this afternoon, but who kept very quiet, triumphantly carried the Conference and established himself as a potential third leader by advocating a policy which would raise an addition £1,000 million in indirect taxation and shift the burden from direct taxation to indirect taxation. Could there be clearer evidence of the desire of the Tory Party to put the main burden, if it was ever returned to power at a general election, on to the shoulders of the lower paid workers? Therefore, much time can be saved in this debate by dismissing the humbug and the hypocrisy of the Conservative Party and by concentrating on the argument among those who really feel and know about those things, namely, the Labour side.
  Before continuing with the case I wish to advance, it ought first to be agreed amongst us that we shall not get very far in this debate if we try to score points on the misery of withdrawing school milk and on the policy of adding to the poll tax. Speaking for myself, I do not believe that I can teach any of those on the Government Front Bench—those that are here today and those who are away doing their work in their
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  Departments—any single point about the measures contained in the Bill. We have been through it all before. It is the leading figures in the Government who have taught me a good deal of what I know about the irrelevance of these measures. It would waste the time of the House and misconceive the argument if I were to try once more to go into great detail about them.
  I turn, instead, to consider the reasoning and the reasons behind the Bill and why a Government like the Labour Government should come to the House and expose themselves to the kind of criticism which they knew would be coming their way, knowing all the arguments which would be advanced against them and knowing that they had no case to make in reply.
  It was miserable to a degree this afternoon to see my right hon. Friend the Chief Secretary, who is normally a brilliant artist of Parliamentary debate and who leaves most of us, with perhaps three or four exceptions on both sides, standing 50 yards from the post when he has a case, not able to put forward any argument at all and merely stating that the Government had come to some conclusions because they had some—reportsunidentified—to the effect that two-thirds of the children involved in secondary schools did not need the milk, that it was very difficult to find a scheme by which some of the others who did need it, on his own admission, could be supplied with the milk, and that, because the means test arrangements would he so difficult as to make it administratively impossible, the Government had to proceed with what they were now doing—depriving those who need it and asking the House to vote for it.
  In passing, my right hon. Friend referred to the prescription charges. He brought the tidings to the House—I shall be brief about this, as my right hon. Friend was—that a great administrative inquiry was being conducted at present into how the refunds and the exemptions could be arranged. My right hon. Friend seemed to be worried that there might be some impatience in the House to learn when this administrative inquiry would be completed.
  I want to establish one point and put my right hon. Friend's mind at rest. I

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  say on behalf of most of my right hon. and hon. Friends that, if the Government discover, as I am sure that they must discover, that it is administratively impossible to bring forward a scheme which could apply exemptions, even on their own terms, and if they come to the House and say that they have tried but have failed, there will be no misery on this side: there will be understanding and approval.
  I believe that the background to the matters before us this evening is to be found much more in international politics and the atmosphere created by the Opposition in this country than in any details of social inquiries. I quote from the Financial Times of Friday, 16th February, under the heading:
  "Jenkins to get Budget advice from I.M.F. team".
  The dateline is Washington, February 15th:
  "A team from the International Monetary Fund will be looking over the shoulder of Mr. Roy Jenkins, Chancellor of the Exchequer, while he makes his preliminary Budget calculations next week.
  It would be wrong, I was told on good authority today, to assume that this team will actually participate in the writing of Britain's Budget—but, on the other hand, it will state its own idea of the extent to which the I.M.F. believes demand should be cut, and the figure thus produced by the Fund team is one from which Mr. Jenkins will certainly be constrained to work."
  When the Letter of Intent was first sent off, I asked for an Adjournment debate under Standing Order No. 9. I gave as my reason that, if the Letter of Intent was adhered to, there would be legislation flowing from these undertakings which many hon. Members would find it impossible to support. Today we are in the presence of some of these measures. It was, therefore, not lightly that some of my hon. Friends and I voted against the Letter of Intent.
  A question was asked from the other side—what is the constitutional propriety of insisting on a vote upon this? The answer is to be found in the first instalment this afternoon. The imposition of prescription charges and the withdrawal of free school milk have been built up into a sacred cow in reverse by the Opposition and by ill-informed opinion in this country.
  For years there has been a campaign against certain aspects of the Health
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  Service. Many men in public life have been whispering about the withdrawal of school milk. Some of these very rich men have now left their reserve of the whispering campaign and come out in an open advertisement. We have witnessed the obscene spectacle of millionaires demanding that free school milk be withdrawn from primary schoolchildren as well.
  However, the Government must accept much of the blame, because they are opening the door to such proposals. Therefore, the two reasons which I believe that the House should be carefully considering are, first, that the Government have accepted the wholly fallacious argument that, to be internationally credible and to enjoy and preserve the credit of international bankers, either in the standby credit, which we have not yet drawn on, or in some other future credit, they must establish their identity as tough men who will deal in tough measures with the British people. That is the first serious argument that forms the background to this debate. This something we must argue about with my right hon. Friend the Chief Secretary, unlike the details of whether children should have school-milk.
  The second ground is the atmosphere of hysteria in Britain. Nobody has contributed more to this than the Press lords and members of the Opposition. Time and again when I was listening to the noble Lord saying how we must have a reasonable, calm approach to these measures I was reminded of the campaigns which many members of the Opposition have conducted, directed against allowing anybody abroad to feel confidence in our economic position. They have made a major contribution in creating this atmosphere of hysteria. They are at it again. In their campaign of vilification against the Prime Minister personally, they are deliberately saying to people abroad that nobody should believe anything the head of the British Government said. That is their case. It was not repeated this afternoon by the noble Lord, but that has been their case time and again. Their contribution to the creation of this hysteria has been used by others to demand that these measures should be carried out by the Government.

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  The noble Lord was carrying out the kind of operation which the Conservative Party will be carrying out in the country in the coming months. They have established a demand for certain Conservative policies, that is to say the withdrawal of school milk and the reimposition of prescription charges; and the Conservative Party in fact went into the General Election in 1966 demanding the reimposition of prescription charges. They will add the word "Socialism" and go to the electorate and call these measures Socialist measures. I warn the Government that an argument presented in that way could be very effective. Those of us who urge the Government to stop in their path before it is too late will be found to be the true friends of the Labour Party, working for its future success in the next election.
  Lord Balniel: The hon. Gentleman is being provocative. It is reasonable to remind him, and it is within the recollection of the House, that he told me not to believe what the Prime Minister had said in his speech on 16th January, when the Prime Minister said that the introduction of prescription charges would cost £50 million and that the National Health Service contribution would raise £25 million. He specifically told me not to accept the word of the Prime Minister.
  Mr. Mendelson: I said nothing of the kind. When the noble Lord was quoting at me the Prime Minister's figures, I said, "Do you always accept everything the Prime Minister says?". I was referring to the kind of campaign of vilification to which I have alluded. I was coming to the argument involved in the figures. Reliable estimates have now been put forward—and we have not yet had any evidence from the Treasury Bench to show that these estimates are incorrect—showing that, once one has worked out a system of exemptions, once one has exempted all the categories mentioned by the Government, once one has calculated the short-fall on prescriptions which will then be used, one finds that the maximum figure of savings will be £12 million. That was my point earlier this afternoon.
  I must move away from that and get back to my main arguments. What is involved here is a mistaken strategy, and that is why the Government keep on telling
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  us that nobody likes these measures. They keep on talking about the package deal, of which we have the first part this afternoon, as if it were an act of nature. What we have never been told is, who imposed what on whom? Where was the package concluded? What Cabinet Minister banged the table and said, "We must have this particular measure", such as the withdrawal of school milk and the imposition of prescription charges'? Of course, they cannot talk about that. There is no question that the Government have accepted the misguided strategy that they must prove their credibility, both to Tory and other opinion at home and to bankers abroad, by trying to carry out these measures.
  This brings me to my final point. Nobody can provide a shred of evidence that these measures are relevant to the release of real resources for the export trade; my conclusion is that to make devaluation work—which is now an agreed national policy and a matter on which the Government received the full support and the confidence of the entire Labour Party after devaluation—the problem involves releasing real economic resources and moving them away from producing things which are mainly needed at home, or which are not particularly needed at present, and to use those same economic resources to produce goods for export.
  If someone from the Treasury Bench were to tell me that the Post Office must stop producing certain things for the home market because some of those products could be switched to exports, I would defend it, vote for it, and explain it to the people at large in the country. But where one deals with school milk and the imposition of the large sum of 2s. 6d. for a prescription, there is no relation whatsoever between such a measure and the release of real economic resources.
  We are not even in a situation in which we are over-employed, a situation in which we have to take people from doing one particular job, even if that job might be useful, to put them on to the export trade. We still have 600,000 people available, and if one exempts 180,000 as permanently unemployable, it leaves over 400,000 people who are not at work. It is a problem of absorbing these real resources and of putting them into the export trade.

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  With a sad heart, I conclude that there is no case which the Treasury Bench can make on this matter. There are many of us, knowing that there is no case for these measures, who feel that we cannot support them. Therefore, we urge the Government to turn away from and to change this misguided, dangerous policy before it is too late.
  7.16 p.m.
  Rear-Admiral Morgan Giles: Clause 4 of the Bill provides for compensation for civil defence employees for loss of employment, and so on, as a consequence of the policy of the Government. I wish to address myself for a short time to the narrow point about these civil defence employees.
  Clause 4 gives the Home Secretary wide powers to make regulations with regard to the future of these men. I should like from him a specific assurance that the terms which they will be given will not be less generous than those which have been offered to local government officers made redundant, for instance, by the formation of the Greater London Council, or by boundary changes and so on in the past.
  The civil defence officers feel most strongly on this matter. Indeed, the Association of Civil Defence Officers has organised a rally and a protest march in London next week, when it intends to present a petition to the Prime Minister. We must surely recognise that these civil defence employees have loyalties and ambitions, hopes and fears, like anybody else. The real point is that they do not want to be abolished at all—the compensation which they want is to retain their jobs. In reply to a Parliamentary Question which I put down on this subject last week the Under-Secretary of State at the Home Office told me, when I asked what factors he had taken into account when deciding the Government's policy, that they were three-fold. First, he was considering the current level of civil defence expenditure; secondly, he mentioned our financial circumstances; and thirdly, he spoke of the risk of a nuclear attack.
  On these three points one must comment that, at the current level of civil defence expenditure, as shown in the Explanatory Memorandum, the saving
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  will be £20 million. We do not know exactly how this is calculated, but the majority of the people employed in the civil defence organisation are volunteers on very small bounties. So the £250,000, which is also mentioned in the Memorandum to the Bill, does not at first sight appear very generous to the professional officers who helped train these volunteers. It is to be hoped that some of these officers will be transferred to other local authority work, but that will not compensate for the abrupt halt in what these men consider to be a crusade to educate the public on how to look after themselves in the worst sort of disaster which could come to the country.
  A man would indeed be advertising his bankruptcy if he cancelled his fire insurance on his house and then urged his local council to sack the fire brigade. Is this the pass to which the economic policies of the Government have brought the nation?
  Last summer, the then Home Secretary addressed the W.R.V.S. General Council. He said:
  "We reject the argument that a nuclear attack would mean that any precautionary preparations had been useless. This would amount to saying that, if the worst should happen, we should leave things to take their course in a community totally unprepared and uncared for. This would be an abdication of responsibility. A Government must take reasonable steps to safeguard its people both in peace and war, and this we intend to do."
  Now the right hon. Gentleman is Chancellor of the Exchequer. Then, he was talking to civil defence volunteers and officers whom we are now considering. We should be told clearly what has happened on the international scene to make that policy so recently declared by the Chancellor invalid. That explanation must also be conveyed without delay to the civil defence officers whose terms of service he intends to terminate so abruptly.
  Last Thursday, when this subject was being discussed, the Joint Under-Secretary of State, in reply to a further Question concerning whether it was the Government's policy to keep the organisation in a state from which it could be rapidly reactivated if needed, said:
  "Yes, sir. It can indeed be reactivated … we are preserving the operational physical assets and the core of knowledge and expertise which would enable us to raise the level

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  of civil defence rapidly if necessary, and the warning and monitoring system is being continued it existence."
  When asked how this organisation would be manned, the hon. Gentleman replied:
  "… a great deal of work is being done by those in Government and local authority service thereby maintaining and manning the essential elements … "
  Later, he said:
  "The initial training required to support a continuously ready system of central and local government in war might cost about £2 million."—[OFFICIAL REPORT, 15th February. 1968; Vol. 758, c. 1552–3.]
  So we have the absurdity that, while £20 million is claimed to be the figure saved by abolishing civil defence in peace, we are told that it would cost only £2 million to raise it and man it in war time. One can only hope that the terms of compensation being offered to the displaced officers are based on figures not as phoney as those I have quoted obviously are.
  One cannot emphasise too much that these civil defence officers deserve extremely well of their country. Their success can be judged—and they would be happy to be so judged—by the response of some of the volunteers in many parts of the country, who have refused to be disbanded. According to press reports, they are content to forgo their bounties and travelling expenses and some together to preserve some continuity in this vital task without support from the Government. This is a tremendous tribute to the way they have been guided and trained by the civil defence officers. It is right to point out that the officers are not concerned so much with their detailed compensation but are bitterly concerned at the Government's reckless dismantling of this vitally important organisation which they have built up.
  A civil defence assistant controller wrote the following to me on behalf of his staff:
  "For we, who have no axe to grind and certainly no grandiose sense of our competence. know, and can say with all honesty, that if the Government thinks that after any lapse of time a sudden alarm to arms will conjure up an effective organisation for civil defence based on us as in the past, they are most grievously mistaken."
  If the Government insist on hurtling down this Gadarene slope, and if the compensation for these officers is to be fair, it must be extremely generous.
  7.27 p.m.
  Mr. Eric S. Heffer: This House is being asked to support a Bill which, like the package before it, can only be described as far as I am concerned as a piece of Parliamentary sharp practice. My hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) made the point that the Bill should not have been presented in this way. I agree with him, because when we look at its contents we find that some parts are more than acceptable to hon. Members on this side, while others—and the Government are fully aware of the views expressed—are anathema to hon. Members on this side.
  For example, we have at the same time the abolition of free school milk in secondary schools and the speeding up of the process of building grants in development areas. I do not know of any hon. Member who would object to the speeding up of the process of building grants in development areas. Everyone will accept this as a progressive move. Changes in various fees are also largely acceptable. But when it comes to the question of milk being abolished in secondary schools and of workers once again being forced to pay another Is. per week in extra contributions for National Insurance, then I say that that is not acceptable to hon. Members on this side.
  The Government have no right, and had no right when the package was first brought in, to place hon. Members in a position where they have to say to their constituents, "This is what we fought the election on, but we are going to vote against it in the House of Commons." I could not honestly go back to my electorate and say that, while I fought for the abolition of prescription charges, I now accept them. Perhaps some right hon. Members on the Front Bench do not care whether their election pledges were given or not. But I do care, and I am certain that most hon. Members agree that when they say something to those who vote for them they expect it to be carried out, or to hear a very good reason why it should not be carried out and why we are not prepared to do it. No good reasons have been advanced.
  This Bill has both a positive and a negative side. Unfortunately, it is overwhelmingly negative, particularly in regard to National Insurance contributions.

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  As regards National Insurance contributions, we have to look at it fairly closely and see what is involved. In 1963 the contribution by the worker was 11s. 8d. per week. It is now going to be 16s. 8d. per week. This may not mean very much to somebody who is earning £100 a week, or £60 a week, or even £40 a week, but to a worker earning £10 per week before tax—and it is interesting to note that there are just on 2 million employees in this country who are earning between £10 and £12 per week before tax or any contributions are taken out—that extra contribution of 1s. a week is an intolerable burden.
  It is no good talking about equality of sacrifice. There is no such thing as equality of sacrifice when, as has been said so often this afternoon, there is a poll tax across the board where people are paying exactly the same amount. To the £10 a week man 1s. is quite different from 1s. to the £100 a week man.
  We also find that since the Labour Government took power contributions have gone up by 5s. per week. There was a positive side. In fact, the contributions from the employers, when there were increases to be made, were increased by a higher amount each time than those from the workers. With each contribution the workers paid less and the employers paid more. This was a deliberate policy by my hon. Friend the ex-Minister of Pensions. In this Bill the policy is being reversed. The workers are paying 1s. and the employers 6d.
  My hon. Friend the Member for Plymouth, Sutton (Dr. David Owen) made an interesting point. It was a very thoughtful speech, but I did not entirely agree with him. I certainly agreed with him regarding no cuts in social services. Last June we were on the same side of the fence fighting the same battle. I cannot understand why we can be on the other side of the fence now that cuts in social services are being carried out.
  My hon. Friend made an important point in saying that the employers should be forced to pay for short-term sickness. I am not sure whether his proposal is the best method. The same conclusion could be arrived at by putting the employers' contributions up to a higher level than those paid by the workers. That has the same effect, and that is
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  what we were beginning to do. The ultimate was to bring in an entirely new scheme, which has been lost somewhere along the line in some review. I believe we could have continued the process of putting up the contributions of the employers to a higher level than those of the workers.
  We ought to have alternatives, and that is one alternative. Why was it not done? Because we have been pussyfooting around the C.B.I., the Bank of England, the City, the international bankers and the Conservative Party in that period; because there has been a philosophy developed in our party in that period that apparently we have to be tough. Tough with whom? The employers; the bankers; the international bankers; the City; and the Conservative Party. They all say we have to be tough with the workers. But the workers are the people who elected us into power and expect us to carry out our policies on their behalf.
  We can have an Iron Chancellor; we can lose all our support; we can go into the next election with a bunch of generals from the Front Bench and a few secondary generals from the back bench and no army behind us. This is how we are going on at the moment. It is important to remember why we were elected into this House and who we were elected to represent.
  All my working life I have been a worker until I came into this House of Commons. I was very proud of that. I do not regard myself now as doing an honest day's work in the way I used to. I work very hard, but I do not make the same contribution towards the wealth of this country as I did when I worked in a factory or on a building site. But the workers elected me, and I represent them. I may not be working with them at the bench, but I consider it is my responsibility to represent people I have always worked with and who elected me into the House of Commons to be one of their spokesmen. They expect us as Labour Party supporters to be tough with our enemies; not to pussy-foot around, not to compromise with them, and not to give away every strategic position as we are at the moment without one shot being fired by the Opposition.
  Mr. Frank Hooley: They do not even bother to vote.
  Mr. Heffer: They do not need to vote. We just give away our positions. We cannot go on much longer like this. I am not talking about some stupid coalition or Conservative Government. The time has come when we, as a party, have to get back to the basis of our beliefs. We believe in a change in our society, and that means that we bring those at the lower levels of the ladder higher up rather than push them down. At a time of this Is. increase in the contribution, rents are also being increased in Liverpool by an average of 8s. 9d. a week. Bus fares have gone up; rail fares have gone up by a local decision, not a national one. This can be done at local level. All this is going on and our people are the ones who are getting the blunt end of the stick. We cannot have it much longer, and I say, as a worker representing them, we are sick of it. Those are harsh words, very harsh words—
  Mr. Stanley Orme: Fully justified.
  Mr. Heffer:—but they have to be said at this moment of time. For we still have time—not very much time, but we still have it, and we can reverse the trend, we can get a better redistribution of wealth in this country.
  We talk about having to take £800 million out of the economy. It was £400 million at first. Yesterday I discovered it was £800 million. I suppose that next week it will probably be even more. All this has got to be taken out of the economy. Remember, it comes out of the pockets of our people. They buy less.
  We have got to find an alternative. I am not going to say that I know exactly what the alternative is, but we have to tell the civil servants that this is what we will not do, and we have got to find alternatives. We have got to raise this money in a different way.
  One word on the question of school milk. I remember that when I was a boy going to school my mother gave me the money to buy milk. I think it was one-third of a pint that one got. I think that pre-war—in 1934—when this was brought in rind one had to purchase it, less than 50 per cent. of the children took advantage of it, because obviously they could not afford it—or it was not there to be taken advantage of. Now it is 58 per
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  cent. or 60 per cent. That is a vast step forward. But that milk helped me very much. I will tell my hon. Friends this, that my brother died of tuberculosis when he was 21. Why? How did he get it? Because one lived in rotten, damp conditions in houses which ought not to have been lived in, because one could not get food that one should have got.
  All that has largely been eliminated, but it is our responsibility as Socialists to continue with the important, vital social services which have been beneficial to the poor among our population and the fact that we as a Socialist Party are going back on what we did in 1946 is an absolute scandal. There is no justification for it whatsoever.
  I do appeal to my hon. and right hon. Friends even at this late stage to reconsider the position. What is the amount to be saved on school milk—£5 million. We give £100 million per annum in the regional employment premium to various employers some of whom do not require any of it at all. Of that money £5 million could have been knocked off to save the free milk.
  I finish on this note. I do urge my hon. and right hon. Friends to reconsider this whole matter. I feel very deeply about this. I feel passionately about it. Somewhere along the line we took decisions which were wrong decisions, wrong decisions because we have not had the courage and the strength and the boldness to stand up and fight. The time has come when we must fight. If this Labour Party went down fighting, well and good; but to go down by giving away our positions to the enemy without firing a shot in defence is absolutely disastrous and scandalous.
  7.44 p.m.
  Mr. George Younger: One of the things which makes having these debates in this House very well worth while is the standard of the contributions which are made when issues are discussed about which many people feel deeply. I should like to say what a pleasure it has been to see the absolute and obvious sincerity of hon. Members who have spoken, particularly on the other side of the House, and particularly the hon. Gentleman the Member for Liverpool, Walton (Mr. Heifer). I want to make it clear that I did not agree

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  with all that he said: I suppose I disagreed with most of what he said, but when hon. Members are prepared to make speeches of that level of sincerity they make real contributions to Parliament, and I hope that the hon. Gentleman will not himself under-estimate the value of the contribution which he made.
  Of course this matter is bound to raise the strongest feelings among many Members. It is bound to raise those feelings because it affects the lives of so many of the people who elected us to come here to represent their interests. It raises strong feelings, too, among those who feel strongly about these matters because by many of the Clauses of this Bill specific pledges made to the people who elected us are being broken by this Government. None of us, even those of us not of the Labour Party, ought to take such matters lightly.
  I am very glad that the hon. Gentleman the Member for Walton and others have not taken these things lightly, because they matter very much indeed and they matter to us as Members of Parliament. They matter, too, to the standing of Parliament, the standing in which Parliament and politicians are generally held all over the country. I hope no hon. Members will feel that we take these things lightly, because ill will among the general public towards politicians naturally rubs off not on just one party or the other, but on everybody in all parts of the House, and that is something that none of us should take lightly.
  We are debating this Bill against what the hon. Member for Plymouth, Sutton (Dr. David Owen), I think it was, called the background of public expenditure having got quite out of control. This may not be generally agreed, but I believe he was quite right in saying that, and it has got out of control, not because the Government have been rushing around and spending in a profligate manner, which would be quite bad enough, but because the economy from which the money comes has been declining, or at least relatively declining.
  The awful lesson which has to be rubbed home, to many Members of the House certainly, but also to many people in the country, is that we simply cannot run steadily expanding social and welfare services if the basic economy is failing
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  to expand. That is the fundamental point, and that is why the Government have today come to the point of introducing a Bill which I am certain 99 per cent. of hon. Members of the Labour Party thoroughly regret and deeply hate having to do. The reason for it, however, is that the basic economy of the country has been prevented from expanding for such a long time, at least three years now. If we can get that across, and if we do nothing else, in this debate, then I think that may lead to some of the harsh decisions which must be taken being taken by the Government, to avoid our getting into this position again.
  I find myself in complete agreement with what the hon. Gentleman for Ebbw Vale (Mr. Michael Foot) started his speech by saying. I do not claim to be an expert in Parliamentary procedure and I do not suppose that I ever shall be, and I cannot make my comments from the same knowledge which the hon. Gentleman has after all his years in this House, but as an ordinary back bencher faced with this Bill and trying to make up my mind whether I support it or am against it and what I feel about it as a whole is a most terribly difficult task. It is a difficult task for hon. Members to be faced with a Bill like this, and the reason is that it is a conglomeration of different measures from different Departments of the Government, but all brought together in one Bill upon which we are supposed to make up our minds in one debate. It poses very great difficulties for hon. Members when measures are introduced in this way.
  Clearly, it also poses very great difficulties for the Government in handling the debate. There is no doubt that there are practical difficulties. For instance, we certainly ought to have the Minister of Health here when a matter of such importance to his Department is being discussed. Certainly, we ought to have had the presence of the right hon. Lady the Minister of Social Security when matters of this kind are discussed. Perhaps it would be pressing the point too far to say that the Home Secretary should have been here all the time because of the reference to compensation to civil defence officers, but the point is there nevertheless. There are so many different subjects involved that it is physically impossible for all the principal Ministers

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  concerned to be present all the time, but, because of the importance of the individual items, they ought to have been here, prepared to answer and to listen to the points which have been so well made in the debate.
  I turn now to the background to the increase in the National Insurance contribution. It has already been pointed out that, only in June, 1967, we had the last increase. On that occasion, it was raised for mechanical reasons, so to speak, in order to keep the National Insurance Fund in proper financial balance. We were told that it was necessary for that reason and it would see things right for some time to come. Indeed, I believe, though I am not certain, that it was said that it would see things right until 1970.
  When the Prime Minister made his announcement on 16th January, one assumed that we were supposed to accept the present proposed increase in the contribution because it was part of the post-devaluation package and it had to be brought in, regrettably, on that account. But not so. The reason for this increase also is actuarial. Purely for accounting reasons, there must be another 6d. increase now.
  As the hon. Member for Plymouth, Sutton put it so well, it is incredible that we are so lacking in reliable information that the Government can say in June one year that an increase is necessary and will last for three years and then, only six or seven months later, justify the introduction of another increase on mechanical and accounting grounds. To adopt the words of the hon. Member for Walton, this is something which we cannot allow to go on.
  If the information on which we are working is so inadequate that that sort of thing can repeatedly happen, the Government would carry with them backbench Members of all parties in providing the necessary resources to give better and quicker information. We should not cavil if that provision could be made by voting more money or making more people available. The running of a modern Government is complex enough, without our having to work on such patently inadequate information as these recent changes in the stamp have revealed.
  Now, the question of the rise itself. I shall not repeat the observations already
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  so well made by hon. Members about the effect of the extra contribution on employees, and particularly on those at the lower end of the income scale. The point has been well made. It has been true of all increases in the National Insurance contribution, and there have been many in past years. Whenever there is an increase, it falls hardest on those who can bear it least.
  Nevertheless, it should be said that, at this time, the increase comes at a point when almost everything else, except the wages which people earn, is going up. There is a concentration of adverse factors on the family budget. We should take this seriously on both sides, not shrugging it off as just another price increase. The stamp contribution is going up at the same time as people's rents are going up, at the same time as their fares for getting to work are going up, at the same time as the cost of goods in the shops are going up, in spite of what the Consumer Council says, at the same time as taxes have been increased for those whose income qualify for Income Tax, and at the same time as all manner of other charges such as the prescription charge are going up. There is, as I say, a concentration of rises, to which this will add another 1s. a week.
  While we are considering the position of the less well off sections of the community, I must add a word about those parts of the country where average earnings are substantially lower than they are in the more prosperous parts. I do not overstate the case, but these matters are important for those who live in the more remote areas. The difference in average earnings between the South-East of England and Scotland generally is estimated—this is to put it modestly—at between £1 and £2 a week. The 1s. rise may seem small, but it is another burden, and a relatively greater burden in areas where average earnings are lower and where, at the same time, the cost of living is in many respects high. This is, therefore, a problem which affects the development areas and remote places more heavily.
  The hon. Member for Walton spoke of the regional employment premium. Doubtless, the regional employment premium is going to many who do not

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  really need it. It is a thoroughly indiscriminate way of dishing out help to industries whether they are useful or not, whether they export or not, and whether they are deserving or not in many ways. As the House knows, we on this side intend to abolish the Selective Employment Tax and all that goes with it. However, if we are seeking a way to help the regions, it would be very much better to devise a system which gave help to people in the regions who are finding life more expensive and difficult because of the factors to which I have referred. If the regional employment premium money were used in that way, some of it at least would be much better spent than it is at present, being dished out indiscriminately, right, left and centre, regardless of need.
  Now, the compensation proposed for redundant workers in civil defence. This is a matter which we take lightly at our peril. Of course, it is the easiest thing in the world, in the circumstances of early 1968, when one is looking for economies, to say, "Here are a few millions. If we cut them off absolutely here and now, no one will notice. No one will mind except those who are directly concerned. In six or nine months or a year, nothing catastrophic will happen as a result of the cut—certainly nothing compared with the great outcry when prescription charges are put up". Yet, in the long term, is this not, perhaps, the most irresponsible decision of all?
  Have we reached the stage when we cannot afford to spend, perhaps, £10 million on an insurance policy to ensure that, if ever the unspeakably dreadful horror were to happen to Britain when there was some form of nuclear explosion or a catastrophe like that, possibly not through our fault, possibly because another great Power, by mistake, sent a nuclear device towards us, there would be people who could render vital service to the nation? None of us here today can foresee the many possible reasons for such a disaster, yet, for the sake of £10 million or so, the Government are prepared to disband completely the small company of devoted people who have, largely without remuneration, set themselves the task of finding out what would be needed and how it might be possible to
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  save lives, however few, in such a catastrophe.
  It is the easiest thing in the world to shrug it off, to say that it will never happen, that it could not happen and that even if it did, there would be no point in saving lives, but that is a terribly irresponsible attitude. For the sake of trying to square the books in this rather shabby money-saving exercise, which has to go on for other reasons, it is sad that this organisation should be scrapped, leaving the country in what might be unforeseen circumstances with no means of looking after people and saving life. It may be a consolation to the Government that this dreadful eventuality is unlikely and, if it happens, they are unlikely to be there to take the blame, but, none the less, the blame will be theirs.
  I hope that they will have second thoughts about entirely abolishing civil defence. I do not know whether it is of any help, but I can tell them that those concerned would be more than willing to meet them any part of the way to carry on this service for little or no cost. If they have to provide it for virtually nothing, on a voluntary basis, with the minimum equipment and help and so on, they will do so as a service to the community. I hope that at any rate the Government will pay tribute to the spirit of those prepared to do for nothing what apparently costs too much to contemplate at the moment.
  I should also like more information about this small change in the procedure for building grants in development areas. I know that the functions of the Board of Trade Advisory Committee have been largely reduced because of the change in the method of paying incentives and industrial grants and so on, but I wonder what is envisaged as a successor to the Advisory Committee. Clause 6 says that there shall be substituted for the present wording:
  "'after consultation, if the Board see fit, with the advisory committee (that is to say, an advisory committee appointed for the purposes of this Act by the Board)'"
  I should like a little explanation. I find it difficult to understand exactly who is to have to consider these matters and it would be helpful to know exactly what is involved in applying for grants, by whom they will be considered and how.

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  I suppose that it is inevitable that the discussion should have centred round the two main and most painful things which the Bill involves—an increase yet again in the price of the Health Service stamp and the introduction of the 2s. 6d. charge for prescriptions. There has been same little misunderstanding about this last issue and I want to make it absolutely clear that this is one part of the Bill with which I wholeheartedly agree.
  I have always said that the prescription charge should remain and I said that its removal was a mistake and I always called for it to be brought back. I never went so far as to say that the charge should be increased from 2s. to 2s. 6d., but I will not cavil at that 6d. either way. In some respects, the removal of the charge was probably the only election pledge of 1964 which was fully arid completely and immediately and swiftly implemented. I said that it would be a mistake from the point of view of the country's economy and expenditure on the Health Service generally, and it has been proved beyond all doubt that my view was correct.
  The hon. Member for Plymouth, Sutton congratulated the Government on choosing between bringing back the prescription charges and cutting the hospital building programme. If that had been the choice, I would have congratulated them, because it would have been absolutely right to bring back prescription charges rather than cut the hospital building programme. But that was not the choice, for the hospital building programme has not been left. It has been cut and we know it. There have been announcements to this effect. A sort of editorial in the current edition of the magazine of the Scottish Western Regional Hospital Board starts with these words:
  "The Secretary of State's announcement that the starting dates of a number of large capital projects in this region have been put back by various periods of up to a year is a bitter blow."
  I entirely agree that it is a bitter blow and I hope that the hon. Member for Sutton will appreciate what the Government have done. They have brought back prescription charges and cut the hospital building programme in one fell swoop, something which we shall not let go without mention.
  Mr. Laurence Pavitt: Why is the hon. Gentleman so keen on putting an indirect tax on sick people, a tax which only the sick pay and from which only the healthy are completely exempt, when a 1¼ per cent. increase across the board could be absorbed and would give far more to the Exchequer than this charge?
  Mr. Younger: I respect the hon. Gentleman's known sincerity on this issue and I am equally sincere the other way round. I have always believed that the prescription charge should be paid by all those people who are able to pay it and that the exemptions should cover all those unable to pay it. I have never been able to understand the great difficulty, suggested by several Governments, in the way of framing the exemptions. This seems much simpler than anyone cares to suggest. I have always favoured a system which would allow a doctor to prescribe on prescription forms of different colours for each category of exemption. In this way we could cover the chronic sick, old-age pensioners, children and expectant mothers. I cannot see that not to have a charge for prescriptions is justified when the Health Service as a whole is so desperately short of money.
  Mr. Hooley: How does the hon. Gentleman propose to distinguish between wealthy old-age pensioners—and there are some—and poor old-age pensioners? Would a doctor be authorised to investigate the means of each patient?
  Mr. Younger: That would be an excellent refinement. I do not know whether that would be possible, but if the hon. Gentleman cares to try to devise a method, I should be glad to help him. Perhaps he has in mind putting forward a Ten-Minute Rule Bill in which I can support him. When the Health Service is so short of money, it is completely unjustifiable that people who are well off should be able to get ordinary prescriptions for nothing. In the best of all possible worlds, that would be lovely, but when the Service is so short of money, this is the wrong priority. I have always said so and I say so now and I am glad that at last the Government have come round to my view.
  8.8 p.m.
  Mr. Emrys Hughes: I have some sympathy with the view of the hon. Member for Ayr (Mr. Younger) that the Bill is a conglomeration of different items. As I shall speak largely about the situation in Scotland, I might say that it is rather a haggis of a Bill. We have oatmeal and liver and onions and everything mixed up into a most un-appetising and indigestible morsel. I can say that, because I am objective about these matters.
  I want to deal with a subject which has troubled many hon. Members opposite, civil defence. I suppose that civil defence is the oatmeal and the other ingredients. One hon. Member laments the fact that not much has been said about civil defence for a very long time. When I was in Opposition I frequently asked the Leader of the House when we were to have a full day's debate on civil defence, but we never got it. Civil defence is presumably the defence of the civil population, but when it came to discussing how to defend the civil population we never had a day in which to discuss it; only now, when civil defence is being virtually wound up and the Government are going to save ultimately £20 million on it, do we have some attention being devoted to this subject.
  If we are to have a war at all, I sympathise with hon. Gentlemen who say we need civil defence; but apparently the Government have come to the conclusion that we are not going to have a war, and I understand that in his last television speech in America, when tactical nuclear weapons were discussed, the right hon. Gentleman the Prime Minister dismissed the matter as "sheer bloody lunacy" I agree with him on that.
  The Government have come to the conclusion that civil defence must be put on a sort of care and maintenance basis. They have knocked off £20 million, and now hon. Members opposite are complaining about it. I do not complain about this, because in the event of nuclear war I believe that civil defence is largely an impossibility; but in that case the Government might reconsider the question of cutting down some of the causes which may result in a nuclear war.
  I wonder whether hon. Gentlemen opposite would say that nuclear war is now
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  something against which we must not prepare, because it is obvious from the preparations being made by the Government in other directions that the Government are preparing for possible nuclear war. Otherwise we should not have had a Polaris submarine firing off an expensive weapon costing a million dollars. There must be the possibility of a nuclear war, or the Government would not throw away our money in this way. I am told that they sent a piper to be present on that occasion. I do not know what he played—perhaps a lament for the British taxpayer!
  We have this dismissal of defence against nuclear war and at the same time the piling up of atomic weapons on the assumption that we are going to have a nuclear war. If we are going to cut out nuclear defence, there is a much greater reason for saying that it is impossible to defend the civil population in a nuclear war and we should therefore cut this enormous preparation for a nuclear war for which we shall be asked to pay, probably next week.
  I sympathise with those hon. Members who say that the volunteers in civil defence are worried about their organisation being wound up. I was interested to learn that they were to have a parade of posters protesting against civil defence cuts, and taking place in Whitehall—a sort of Aldermaston march in reverse!
  If the Government adopt the idea that a possible nuclear war is sheer bloody lunacy—I apologise for using the word "bloody", but it is the word used by the Prime Minister—then we have to examine carefully the enormous bill which is still going to be met by the taxpayer under a Bill which we shall be asked to sanction when the so-called Civil Estimates come before us. I sympathise with those who ask for better treatment for these volunteers, but I have come to the conclusion—and I support the Government on this—that they cannot do very much, and it is time to be realistic, so that this part of our organisation should be wound up, with a saving of £20 million.
  Now comes an item which we on this side of the House object to very strongly, and that is saving at the expense of school milk. As has been pointed out already, this has occupied the minds of the Labour Party for very many years. I remember

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  that when James Maxton came to the House of Commons this was one of the first things which led to the suspension of the Clyde Group. Some Conservative Ministers at that time were advocating cutting school milk, and Maxton called a Minister who did this a murderer for depriving slum children of their milk. The House did not have so much imagination as the Clyde Group, and Maxton and his colleagues were carried out protesting. Now, however, we have a Labour Government, for which Maxton and others gave their lives, saying "We are desperately hard up; we must cut school milk and students' bursaries and make other economies of this kind."
  What about school milk? It has been pointed out that these cuts will bear hardest on the poorest of the poor. I remember hearing the Prime Minister make a very able speech at the last Scarborough conference, in which he referred to the achievements of a Labour Government and to the crimes of a Tory Government, and in giving a catalogue of the sins of the Tories he said "What the Tory Party did was to put a heavy weight on prescription charges and put a burden on the poorest of the poor, who were least able to bear it." That is what the Prime Minister said, and so we believe that we are justified in making the strongest possible protest in this House at the present time.
  I speak for a constituency in Scotland where there is a certain number of miners who are comparatively well paid, but there will be closures of the pits, and I have been told only this week that there will be pockets of unemployment in some of the isolated mining villages. Although I believe that the Board of Trade is doing its best in many ways, yet we are likely to see an increase in unemployment in these mining villages during the next year, and our older people will not be able to get jobs. It is the elderly who will suffer, people over 51. Many of them are suffering from what is called "miners' disease", a chest disease, and these people will have need of prescriptions.
  The poor people and their families will suffer. Some of the younger men will have children going to school. The increase in the cost of living—everybody in Scotland knows that the cost of living is going up—the increased charges and
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  the reduction in income will bear heavily on the children going to secondary school. It will not be those who go to Gordonstoun who suffer. There will not be much suffering by the people who go to Rugby, Eton or Harrow. But anyone acquainted with working-class life knows that there is a grave danger that, as a result of shrinking incomes, there will be hardship among the people receiving the lowest wages.
  I protest against this. It is completely unworthy of a Labour Government. In making our protest and refusing to vote, we are expressing the will of our constituents. The question will naturally be asked: suppose there is a very large abstention among Members on the Labour benches, will the Government fall? Suppose by some accident, by some computation which is impossible to imagine, with the Opposition lining up as a coalition with the Government, that the Government were to carry the Motion by only one vote; or suppose that by some miracle they were defeated on this issue. Would the Prime Minister hasten to Buckingham Palace and put his resignation before the Queen? Not on your life! This is the bogy which has frightened some of my hon. Friends.
  I have heard the Prime Minister accused of many things in the last few months, on many occasions unfairly and unjustifiably. I have never indulged in those accusations. But I have never heard him accused of having suicidal political tendencies. Therefore, if the House asserted itself, if Members voted as they should vote, the Government would be in a very difficult position. What would they do the next day? There would be a Cabinet meeting in Downing Street, and the Prime Minister would say, "Lady and Gentlemen, the House has come to a certain decision. Are we going to the country?". They would put up their hands in horror and say, "Oh, Harold, no, no, no." Then the Prime Minister would come to the House next day and say, "The Government are going to do the democratic thing and accept the majority decision of the House of Commons". Of course, that is what has happened before—from time immemorial.
  Therefore, I urge my hon. Friends not to be deluded that we shall have a General Election if the House rightly

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  decides that school milk, prescription charges and all the rest of the social security cuts are not necessary in the interests of the country. I have not the slightest idea about what goes on in the Cabinet, except when I read the "leaks". But I know that the Cabinet has been discussing these things. I am, I hope, a House of Commons man and believe that this House should be the boss of the country and not the Cabinet. The Government should pay more heed to what the House thinks. I should be delighted tonight if the Government got a severe shaking on this matter. I hope that they will get it, if not on this issue, then on prescription charges. It will be a good thing for the Government, a good thing for the country, and a good thing for the future of the Labour Party.
  8.25 p.m.
  Mr. Edwin Brooks: This is a Second Reading debate, but there have been occasions, notably in some of the recent speeches from this side of the House, when one has gained the impression that this is a Report stage debate, with Clauses 1, 2 and 3 being fought line by line. I think that this degree of acrimony is inevitable in a Bill of this sort when we are trying to discuss its principle, because it is an unprincipled Bill. It is a rag bag of a Bill and, with due deference to my hon. Friend the Member for South Ayrshire (Mr. Emrys Hughes), it is a Scotch broth of a Bill.
  Nevertheless, my hon. Friends must ask themselves why the Government have felt it necessary to bring forward the Bill. We are perhaps living in unprincipled times, and at times like this, just as the devil has all the best tunes, so sometimes the Left seems to have a good chance of capturing all the best causes. This is one of the difficulties when we have an argument over policy being muddied to some extent by the debate over party tactics, leading to polarisation within the Parliamentary Labour Party which makes the debate on policy all the more difficult and bitter.
  The Government, who have the right to expect the support of Members who are elected to maintain a Labour Government in power, should nevertheless recognise that many of us who go into the Lobby with the Government have some
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  very grave reservations about the events not only of the last few weeks and months but since October 1964. This is the Government who pride themselves on their pragmatism. At times I am tempted to say, "A pox on pragmatism!" We have had too much of it.
  That is not to say that there is not a time for realism. Indeed, I think that even within the Bill there is a sign of welcome realism, but, like my hon. Friend the Member for South Ayrshire, I agree that the time is long overdue when we should have ended this sham and delusion of civil defence. There are good things in the Bill, but the realism of it has been absent from many of the debates which we have had.
  I think that it was my hon. Friend the Member for Liverpool, Walton (Mr. Heller) who somewhat chastised my hon. Friend the Member for Plymouth, Sutton (Dr. David Owen) by asking why, apparently, he was no longer fighting to oppose the social cuts which several hon. Members, myself included, lobbied about last September. He asked, "Where is the difference now?" The difference is simply that we have devalued. Devaluation was no victory it was a defeat, and there is no doubt that some of my hon. Friends, including some of those who tonight so passionately attack the Government, completely misunderstood just how much of a defeat it was and is bound to be seen to be in the months ahead when it casts its shadow.
  Let there be no doubt that if the country must have a second devaluation later this year or next year, it will not be just a defeat for the Labour Government. It will not be just a defeat for social democracy, although it will be that, for my lifetime. It will almost certainly be a defeat for Parliamentary democracy. Many of us on both sides of the House are well aware, as we have debates on our economic predicament, that there is an ominous resemblance between what is happening in this country in the late 1960s and what happened in France in the late 1950s. There is a growing mood of bitter disillusion with the institutions of Parliamentary democracy.
  We, too, have those who call for a strong man. We have the strong men, the Cecil Kings—or perhaps one should say the Cecil King-makers—seeking in

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  some of our erstwhile colleagues men who will put the Government straight and the country right by making Great Britain Limited their goal and objective. It is a curious thought that those who put forward this idea were at one time those who looked upon the problems and difficulties of our society from a Socialist standpoint. There is sometimes a danger in our excessive patternalism that we shall move into what is not very far removed from National Socialism.
  It has been said several times tonight that public expenditure is out of control, and I think that that is true. We have had several examples tonight, and one could easily add more. One could cite the fact that in one of the sacred cows we were told was not to be sacrosanct, the Concorde supersonic airliner, we have had an escalation of costs by 3½ times in five years. The intramural expenditure on the aeroplane, in addition to £500 million research and development charges, amounts to £28 million borne by the British. When we are discussing priorities, as we must be implicitly when we discuss the Bill, it is relevant to ask for whom that type of extravagant venture is designed. Which of our constituents who voted for us in the full flush of enthusiasm in 1964–66 are particularly enamoured with the thought of flying across the Atlantic so fast that they will take a whole day to catch up with the time changes. The intramural expense of £28 million for those costs has escalated three times in two years, yet tonight we are having a bitter and difficult argument for hon. Members on this side of the, House about the odd £1 million here and there.
  A few years ago the Government took a decision which I supported, and still support, to cancel the TSR2. One of the really alarming things was not the argument for or against the plan but that the cancellation charges which were expected at the time of cancellation proved to be wholly in error by a factor of almost two to one. That again shows how public expenditure is now reaching crisis proportions and threatening the very sovereignty of Parliament over the basic task of allocating priorities, which must be measured in terms of financial expenditure.
  We have talked a great deal about priorities in the debate. So much of
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  what my hon. Friends have said has been to argue, as one can readily understand, that the priorities in the Bill, particularly those exemplified in the first three Clauses, are wholly mistaken. We have talked about sacred cows. I do not know what is wrong with having sacred cows at times. I suppose that one can scare the life out of a sacred cow by behaving like a bull in a china shop, and to some extent that is what we have done in the panic reaction to some of the problems we faced in December and January. The problem, which I suppose is inherent in any modern advanced society, is reconciling growth with some sort of social principle of democratic equality, call it what one likes, and the inevitable tension between the two.
  I think that at times we have forgotten the lessons of history. Looking back over the past 100 years, we find that the sort of growth rates which we seem to take for granted in Britain, Western Europe and elsewhere today as being quite compatible with our institutions of government have only rarely been achieved since 1870 in this country. It is the exception rather than the rule to have growth rates of 4 per cent. a year continuously. We must recognise that this will not come about simply by repeating the old nostrums.
  Hon. Members have made the point that it is because the Government have failed to ensure an increase in production that so many of these problems have come upon us, but when we look at these problems of growth I sometimes think that those, on this side of the House, who feel strongly about problems such as Health Service charges are ignoring that history does not stop still and that many of the problems which they are talking about tonight are problems which they experienced 30 or 40 years ago. There is no doubt many of the problems which a country with 3 or 4 million unemployed had to face in the 1930s are not the problems which are being faced today. It is essential to have at least an understanding of the need for change in our social priorities.
  It may be said that to cut out milk from secondary schools is a cheap and nasty way of getting economies, and I certainly could not rejoice at such a step

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  in itself or in any other framework. Let us, however, ask ourselves whether, perhaps because of the last 30 years or so of growing State paternalism, we are beginning to produce in the minds of people an assumption that the whole responsibility for bringing up families and running their lives, is fundamentally the responsibility, not of themselves, but of the State.
  It has been said, for example, that one alternative to taking away the free milk would be to increase family allowances, but many hon. Members have expressed anxiety that that might not in practice lead to the children in need being given the nutrition which the loss of school milk involves. What we are saying is that we cannot trust people to look after their own children. Let us have no doubt about public attitudes. That is what lies behind so much of the public objection to the increases in family allowances which certainly hon. Members on this side publicly advocate.
  It is often said that a person who gets a family allowance immediately spends it on bingo, on drink or on tobacco. That is a wilfully mischievous misrepresentation. It is to some extent true, however, that in certain parts of our society too many people rely upon the State to bail them out of the difficulties into which they get themselves. This is a problem of paternalism which comes back to my earlier point about the attitude of the Chairman of the National Coal Board: let us surrender our freedom to those who know, and all will be well. Of course, those who know are always the ones who put forward proposals like that, and when they get into power they are difficult to shift.
  Inevitably, a debate of this sort is bound to stray widely because we are discussing some of the major problems which face us as a country and, certainly, us on this side as a Labour movement. Some of those who are representing Britain as a country on its last legs are talking nonsense, and mischievous nonsense. As has been pointed out tonight, this country has a splendid record since the war in the development of exports. It is a first-class effort by a country which has bled itself white defending freedom in two world wars.
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  Let us not forget the price which has been paid by a million men in the First World War and by vast treasure as well as human life in the Second World War. The country has made a spectacular recovery in so many respects from the effects of those disastrous wars. We should be proud of that achievement and far less willing constantly to compare ourselves adversely with those on the Continent against whom not so long ago we were defending our freedom.
  It has been said that we are a strong country and therefore do not need to carry out these economies. This policy is going to the wrong extreme, because the fact remains that our position in the 'thirties, in terms of the balance of payments was, as we all know, fortunately helped by the possession of vast overseas investments. To some extent what we are seeing in the 'sixties is our coming to terms with end of an empire. This is a painful process, involving very considerable economic reorganisation and sacrifice.
  It is all the more difficult for this reorganisation and sacrifice to be carried out by a Social Democratic Government, given the sort of mixed economy and mixed society that we have in the context of an essentially world capitalist order, than it might be perhaps if we were all too tamely to follow the nostrums offered to us by the party opposite. The task is still worth fighting for, and my criticism of this Government is that they have been far too timid as a Social Democratic Government. They have been far too pusillanimous at times in following the orthodox, the conventional wisdom.
  My hon. Friends who have expressed their intention of abstaining tonight should not think that they are the only ones concerned about the future of this Bill, and this Government. This is a difficult decision for any of us, but what is important is that the argument over policy should go on and should not be diverted, deflected or distorted by arguments of personalities and the problems which inevitably arise over disagreements about the tactics as distinct from the essence of what this argument is all about.
  8.42 p.m.
  Mr. Hector Monro: I do not want to follow the hon. Member for

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  Bebington (Mr. Brooks) in his very sincere speech. As usual he has explained his own views carefully and persuasively. I want to put a very short point relating to Clause 4 and civil defence. It has to do with the compensation which is vitally necessary, although it is very disappointing that this should arise.
  The permanent staff of the Civil Defence Corps has set a wonderful example to the volunteers, who in return responded to their leadership and training, becoming a first class service. I have no doubt that those who are employed on the permanent training staff of the Corps will have no difficulty in finding jobs, even in the present trying times because of their qualities of leadership and their training. We must treat them generously because they came into civil defence with the expectation of a whole-time career, reaching until retirement age.
  To be suddenly put out of their jobs at very short notice must be a very shattering blow to them. This applies not only to those members of the permanent staff of local authorities, joint police committees and watch committees who are responsible for running civil defence, but also to the civil defence college staff at Taymouth Castle and at Sunningdale, all of whom have done exceptionally fine work.
  The hon. Member for South Ayrshire (Mr. Emrys Hughes) never believed in civil defence, and I will not follow his arguments. There are aspects of the work other than that dealing with the nuclear deterrent. Civil defence now plays a most useful part in dealing with any national disaster, such as Aberfan or the recent hurricanes in Scotland. There civil defence played a very full part, having immediately at its disposal radio communication facilities, emergency cooking, and the general "know-how" to deal with such abnormal situations.
  This is not the moment to pay tribute to the Civil Defence Corps, to its permanent staff or to its volunteers. Those tributes will be paid later. However, when the Government bring in the Order to implement Clause 4, I hope that they will be as generous as possible. It has been a cruel decision for the Civil Defence Corps' permanent staff to have to be told that they must leave their jobs at the end of March. They have given long hours of work, often well into the
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  night, with the consequential interferference in their domestic arrangements. It has not been an easy task. However, they have always risen to the challenge and done a first-class job. January and February will hold sad memories for the Civil Defence Corps and will go down as the time when its members learned that the end of the road for them was in sight. The Government will regret their decision. I think that they made it hastily without realising its full implications.
  When we return to power, I am certain that we will realise the great value to the nation of the volunteer spirit. I hope that we shall set up a Civil Defence Corps which will be of great value to Britain and bring it up to the highest state of modernisation in the context of the national situation as it will be then. I am certain that we will do something on those lines. In the meantime, I commend the volunteer spirit which the Civil Defence Corps has shown. Because of that, I hope that the Government will be as generous as possible.
  8.47 p.m.
  Frank Hooley: I will not comment on the arguments of the hon. Member for Dumfries (Mr. Monro) except to say that I hope that the Government have given some consideration to the problem of rendering civil assistance in peacetime and are satisfied that the apparatus necessary is completely adequate when the formal civil defence mechanism is wound up.
  I do not share the view of some of my hon. Friends that the International Monetary Fund is a body to be viewed with suspicion and dislike. I believe that the I.M.F. is an extremely important mechanism in international affairs. It has contributed a great deal towards the solution of certain problems that the country has encountered in the last 20 years, in addition to contributing to the maintenance of a system of international payments and currency transactions without which grave catastrophes might have befallen the economic systems of the countries of the world. Without the standby credit which has been negotiated, this country might have been forced into economic policies which were far more disastrous for our people and for the world at large.

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  If anything the Fund has not developed a sufficient sophistication and a sufficiently advanced rôle in the world's monetary affairs. We shall not solve our balance of payments problems and those of the United States until the International Monetary Fund has power to manage a reserve currency to supplement sterling and the dollar. Unfortunately, that day is so far ahead that we nave been forced into devaluation to solve our immediate problems. Consequently, we have to consider those policies which will make devaluation work from the point of view of our own affairs.
  It is argued that to make devaluation work it is necessary to divert resources from public and private expenditure so that we can concentrate on exports. I am not persuaded that public expenditure takes an undue proportion of our national wealth. Figures which I have seen seem to indicate that, by comparison with other advanced industrial countries, we are by no means out of line. Where we are out of line is not in public expenditure but in private consumption, which takes an undue proportion of the wealth that we produce. Therefore, I am not happy about the proposals which the Government have made for cutting public expenditure, because I am not sure that they are sound in pure economic terms.
  There is a certain logic in cutting back on things like roads and schools where there are physical resources being used and where we can possibly dispense with the use of labour and materials and divert them to other projects which may contribute to export. However, I can see no logic in cutting expenditure on school milk which can make no contribution to export performance and can only be damaging in a general way to the health of schoolchildren.
  It has been suggested that only 60 per cent. of school milk is taken up. On a rough calculation, this must mean that about 2 million children take it. To take away this facility from about 2 million children is retrograde and foolish. It seems fantastic to argue that a social service which has existed for many years should be discontinued when we are in fact richer than we have been for a long time. I cannot see any economic or social logic in this action.
  Mr. David Winnick: Would my hon. Friend not agree that if milk is to be discontinued it should be done only after a great deal of research and not as a panic economic move?
  Mr. Hooley: This is part of my argument. I am not persuaded by the arguments advanced that there is a logical case for this action in either economic or social terms.
  Concerning private expenditure, clearly one weapon is taxation. I am appalled that the Government have chosen a method of taxation which is regressive and falls severely on the lower income groups. It is accepted all round that taxation in the form of the insurance stamp is regressive and bears most hardly on the poorest families. I will illustrate this with some figures. The 16s. 8d. stamp represents 7 per cent. of the gross income of a man earning £12 a week and 5·5 per cent. of the gross income of a man earning £15 a week. Translating that into terms of the wealthier, it is equivalent to a £140 annual charge on a man earning £2,000 a year, and a £350 annual charge on a man earning £5,000 a year. The order of charge we are making on the lower income groups is 7 per cent. for a man earning £12 a week and 5·5 per cent. for a man earning £15 a week. This demonstrates that the limit has been reached and in fact surpassed for levying taxation of this kind on people in the lower income groups.
  I do not see why we cannot, at the stage of sophistication in tax matters that we have reached, substitute for this evil poll tax a graduated social security tax which can be levied according to income. It would have many advantages. It would produce greater revenue at a time when employment was high and the economy booming and provide even more funds for our social services.
  It seems entirely wrong that we should persist in the flat-rate contribution, which is not sound in insurance terms. The flat-rate contribution provides only 60 per cent. of the Insurance Fund. It is not a serious actuarial calculation. I regard it as an out of date form of taxation and I hope that the Government at an early date will replace it.
  3.54 p.m.
  Mr. Eric Ogden: I will take two points from the debate. Clause 4 provides compensation for possible redundancy among civil defence workers. I cannot understand why the Opposition are prepared to allow this Clause to go through unchallenged, bearing in mind all the implications in it for further measures on civil defence. I do not see the logic of saying, "We will accept Clauses making provision for redundancy", without putting their opposition into more concrete form than they Lave tonight.
  I deal first with the suggestion about alternative sources of revenue. Hon. Members opposite have opposed the S.E.T. and the regional employment premium. This assistance to industry and employment in the development areas is the reason why I am here tonight, because in 1964 and 1966 in Merseyside and other development areas there was a great feeling that the imbalance of the economy between the "two nations" of the South-East and the other regions was wrong and that these two measures would help correct the balance.
  It is said that penance is good for the soul, and I have been doing my penance by sitting here tonight to share responsibility for the Bill. If penance is good, my soul should be improved, but I found no joy in the debate. Yet I doubt whether it does politicians harm to eat a Hale humble pie from time to time. The noble Lord the Member for Hertford (Lord Balniel) and some of his colleagues made some party points but at least had the grace to show restraint.
  The hon. Member for Louth (Sir C. Osborne), however, said that we were guilty men. It is a strange trial in which the accused on this side have outnumbered the accusers, the Opposition, throughout the debate, in which a series of speakers have been called from this side simply because the Opposition could not call up more reserves, in which the Liberals, who will divide the House tonight, were absent for large parts of the debate, in which the official public prosecutor, the noble Lord, agreed with the actions of the accused if not with the reasons for them—I think that he would agree that he mainly favours those measures in the Bill—in which half the
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  accused have added their own charges against my right hon. and hon. Friends above the Gangway, and in which the independent prosecutor from the Liberal benches stirred up mayhem and mutiny.
  My hon. Friend the Member for Liverpool, Walton (Mr. Heffer) was a little unfair to suggest that the only friends of the Bill are on the Government Front Bench and that some of our friends on the Front Bench cared little about their election promises. I do not think that they like the Bill any more than we do.
  I notice that fourteen right hon. and hon. Gentlemen have spoken before me. The order of calling rather disturbed me, since six Conservative abstainers were called and five Labour abstainers—selfconfessed, honest men—and one Liberal opponent. Only with the falling-off of the debate on that side were some Labour supporters called. My speech makes the total—
  Mr. Deputy Speaker(Sir Eric Fletcher): Order. I assume that the hon. Gentleman is not making any reflection on the Chair.
  Mr. Ogden: If that was the impression, Mr. Deputy Speaker, it was not my intention. I make the tally 5–1 at the moment against those prepared to go into the Lobbies for or against the Bill—
  Mr. Emrys Hughes: if my hon. Friend had been here a little more assiduously and a little earlier, he might have been called.
  Mr. Ogden: If my hon. Friend had eyes in the back of his head, he would have seen that I have been here for a lot longer than he has.
  If Parliamentary reform had advanced to the stage at which only those prepared to vote could take part in the debate, this Bill would have had its Second Reading hours ago. I like this Bill as little as my hon. Friends, either above or below the Gangway. It is a hotchpotch. The only reason for it or for our supporting it is that necessity compels—and it might have been a great deal worse.
  I have heard many hon. Members putting forward suggestions about what we should or should not do in regard to

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  Government expenditure. No new ideas seem to have been put forward tonight and, certainly, the ideas which were put up have already been put up, considered and rejected. But what shall we do when our own Government receive points to consider and then turn down those proposals? Should we sulk? Should we thank the Liberals for giving us a chance to abstain, or should we vote against the Government? After all, as my hon. Friend the Member for Ayrshire, South (Mr. Emrys Hughes) has said, this is not a vote of confidence in the Government; this is a two-line Whip. There are no terrible penalties for those who support or do not support or abstain on this. No one tells us how we should vote. As I see it, it is not a question of whether we should or should not go into the Lobbies to support the Government, in order to avoid a general election. It is not an exercise in persuasion; we should be leaving it a little late if we tried to persuade the Government tonight. Certainly, it is not a question of conscience and I do not think anyone has put that forward tonight.
  As I see it, the question over the broad issue—and, again, I like this Bill as little as any—is whether I have to accept my share of responsibility for the Bill being here tonight, whether I have to decide that I support this Government only when they do what I want them to do, or whether I have to share responsibility and support them when they do things which I do not like. I have put forward my ideas and the Government have turned them down. There is only one answer as I see it, and that is that I was sent here to support the Government when they are right, and also to support them in the Lobbies when they are wrong. Persuasion is a long way off, but it will be extremely interesting to find out just who goes into the Lobbies tonight.
  9.0 p.m.
  Mr. Michael Alison: The hon. Member for Liverpool, West Derby (Mr. Ogden) cast a few aspersions about the relatively empty benches on this side of the House today. But I hope he will get my point when I tell him that we on this side of the House believe in what one might describe as the division of labour; that is to say, if there is going
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  to be plenty of criticism coming at the Government from its own benches, why be here? The criticism is evidently present and the division of labour is a rational, political and economic procedure, so I hope we shall hear no more about that tonight.
  I should like to start by saying that this Bill really cannot be called a very momentous one in terms of the sheer scale of finance which it involves. It is effecting reductions in Exchequer and local government expenditure amounting to some £17 million. This may be compared with the latest total of Civil Supplementary Estimates which I have here—it is a bulky volume—for the year ending 31st March this year, which gives us an increase in projected Government expenditure of £562 million; a figure which is 30 times as large as the cuts which we are talking about this evening. So against this relatively small financial Measure, we have the continuing process of what one might call the natural momentum of growth in Government expenditure. When one compares this Bill to the total Government expenditure which is likely to be realised for the years 1968–69 and 1969–70, as the Chief Secretary knows very well, we are in the figures of £15,000 million, and by comparison the figure in this Bill is eclipsed almost into extinction. So it cannot be called a very momentous Bill in terms of the sheer scope of finance.
  But it has a wider significance which is out of all proportion to the simple scale of finance involved, to the mere cuts in expenditure of £17 million-odd, because the Bill amounts to the first specific statutory proposals to come forward before this House from the Government, implementing those momentous announcements from the Prime Minister of 16th January this year. In other words, it is the first tangible product—this rather limp and tawdry little Bill—of the new thinking process going on behind the scenes in the Government following devaluation. Put another way, it is the spearhead—and we are bound to regard the Bill in this light—of the Government's attack upon the new problems facing this country in the year of devaluation.
  One is bound to make an appraisal of the Bill in this context, not simply in terms of the volume of money involved,

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  but as an instrument of change, as a spearhead of attack upon the nation's problems. Against this background, the Bill can only be described as utterly laughable. What a trumpet note it sounds to the country for the advance into the promised land that the Prime Minister held before us—the promised land of higher exports, of import substitution, of a huge increase in productive capacity to get industry on its feet again, let alone the promised land of Socialism.
  By talking about trumpet notes I have been diverted from dealing with the rather vivid description given by the hon. Member for Liverpool, Walton (Mr. Heffer) of the way the forces were likely to divide tonight, with the generals on this side, as he picturesquely described us, marching without their army away from the sound of the gunfire, with the little Liberal Party marching towards the sound of the gunfire, and, I imagine, with the hon. Member for Walton and his colleagues below the Gangway pussy-footing with the Opposition in the Members' Lobby on an abstention. This is the sort of note of advance that the Bill sounds. It is laughable.
  The laughter is bound to dry in one's mouth as one considers the Bill against the background, not only of the task it is meant to achieve in terms of reforming the Government's economic policy, but of the more human aspect of the hurt it will do. It is legitimate to consider this as the first aspect. The first charge that the First Secretary will have to answer, and the main criticism of the Bill by the Opposition, is that it will hurt people. Our main indictment in criticising the Bill and the Government's whole economic policy, of which the Bill is simply the tip of the iceberg, is that this bungling mismanagement of Government economic policy is what has resulted in what can only be described as a crisis measure. Whenever the Government respond to a crisis, it is always people who get hurt rather than things. A Government in control of an economic situation can moderate and adapt national policies for investment and for the deployment of productive resources so as to control the procedures affecting things. But when a Government are involved in a crisis, when something hits them, when the economy is blown off course, to use the euphemism of the day, it is people who get hurt before things.
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  Let me give a vivid illustration by quoting something which the Chancellor said when discussing the measures which would have to follow devaluation. I quote a passage from the speech he made the day after the crisis measures were announced:
  "It is also the reason why, in many cases, we have had to go for identifiable cuts involving policy changes. Only in this way is it possible to make substantial short-term savings without the economic nonsense of stopping construction schemes halfway through, or failing to provide running costs after capital expenditure has been incurred."—[OFFICIAL REPORT. 17th January, 1968; Vol. 756, c. 1792.]
  The economic nonsense that the Chancellor talked about was the polite but academic way of saying that if the car has to stop suddenly it is the "bods" inside it who will get hurt. It is a roundabout way of saying that if you are hit by a crisis, you have not the time, the scope or the room for manoeuvre to do rational things in terms of investment projects in nationalised industries. You go for the cuts that hurt.
  The indictment against the Government is that the first instrument which they produce in response to a crisis is something which is going to hurt people. It is going to leave unaffected the investment programme of the nationalised industries in the short-term and inanimate things of that nature, but it is the people who get hurt first. This is always the effect in response to a crisis over which the Government have no control.
  Eric Lubbock: I was wondering why, in view of the hon. Gentleman's criticisms, he is not going to help us and divide against the Government on this Bill.
  Mr. Alison: The hon. Member for Orpington (Mr. Lubbock) must hear me out. I hope that I shall be able to satisfy him by the end of my speech.
  I should like to turn to the first category of people who are going to get hurt. Here my eye falls, as it always does in these sorts of debates when social services and cuts are under review and when there is criticism in the wind for the Government. upon the hon. Member for Penistone (Mr. Mendelson). One remembers vividly the immediate reaction he had to the Prime Minister's announcement on 16th January. In almost the

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  first supplementary, he put a very fair question to the Prime Minister about the 8 million lower and lowest-paid workers and how they were going to be affected by the prescription charges.
  It is fair for the Opposition to criticise the Government—and I am not going to accept any accusation of humbug from the hon. Member for Penistone—on a Measure which, although we approve of it in part, we totally disapprove of the context and the manner in which it was introduced. The truth about these new impositions upon the category of people to whom the hon. Member for Penistone drew attention is that not only will they get the full blast of the return of prescription charges, but that they will get the full blast of the poll tax, the increase on the stamp.
  The point which we want to stress is that this comes in the face of a period of severe restraint on wages, in a period of massive and deliberately permitted increases in prices in basic commodities resulting from devaluation. It comes within the context of the niggling extra charges after devaluation, such as the extra electricity charges, and in the context of goodness knows what we are going to find in the Budget. It is a fair point for the Opposition to make that we disapprove of this sort of change in the context in which it is taking place.
  The hon. Member for Penistone has a long-enough political memory to recall that Lord Butler, when a Member of this House, as Chancellor of the Exchequer introduced a Budget in 1952 which brought in for the first time since the war a cut in the food subsidies, which worked out at a cut of something like £250 million or £200 million off the food subsidies. It resulted in an imposte per capita on the community at large of perhaps 1s. 6d. per head in the extra cost of living. But this was associated with a packet which was very different from the one which the Government are presenting to the nation tonight. It was associated with substantial increases in social service benefits, in family allowances, in tax allowances and, indeed, with a drop in the Income Tax rates. This was the context in which a perfectly valid Tory philosophy was introduced.
  One of the things that makes the mud of humbug fall lightly on Members on
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  this side of the House is that we notice that friends of the hon. Member for Penistone and those who sit with him have done nothing in the last two years about urging the reintroduction of food subsidies, which would have been a rational programme to argue.
  Mr. Mendelson: I have also been here long enough to remember that in one of the Budgets during the Tory Administration they at one and the same time returned £81 million to Surtax payers, £19 million of unearned income, and they put up the social service and prescription charges. My fear is that if the party opposite got into power again, they would do exactly the same thing and concentrate all the burdens on the lower-paid workers.
  Mr. Alison: Whatever the hon. Member may say, I can tell him that the country at large is sighing a deep sigh, "Give us back Tory Budgets" in the light of what we will get on 19th March. It is all very well for the hon. Member for Penistone to argue that point, but what about the reductions in Surtax? Have the Labour Party reintroduced them on a comparable scale? Have they reintroduced food subsidies? They criticise the cuts, but they do nothing about them. Their arguments, therefore, are not very convincing and certainly not damaging.
  We say that this tawdry, irrelevant instrument is so completely disconnected with the real needs of the country that we must have an assurance from the First Secretary that it fits into some kind of rational scheme as the main justification for the changes which the Prime Minister announced. My heart beat as one with the hon. Member for Penistone and his hon. Friend the Member for Walton in asking precisely where in the Bill is the spearhead of change and the instrument for causing a massive shift of resources from home consumption to exports and to investment. We cannot find them anywhere.
  It is not only the category to whom I have referred who will be hurt by the Bill—and it is the people who will be hurt whom we should be thinking about tonight. It is the Government's policy to introduce as a measure of economic change something which will change people and not things. That is part of our indictment against the Government.

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  Our concern is not only for the people who will have to pay more and who will get less, but with the category which s referred to in Clause 4—the civil defence workers, about whom I want to say something.
  The compensation item in Clause 4 might at first sight give cause for gratification but I think that the reverse will be the truth. The pay-off which this trivial sum of £250 million represents will be regarded by the professional and voluntary civil defence workers as almost a humiliating and insulting bribe to get out of the picture of national voluntary service. It is like getting a sixpenny tip from a millionaire, and it is an insult to the whole corps of voluntary workers.
  We come back to the question which has been put from below the Gangway on the Government side: what conceivable relevance can this sort of Measure have to the massive shift of resources—by which we are bound in some degree to mean manpower—to exports?
  The forces involved, the Civil Defence Corps, the Auxiliary Fire Service and the Territorial Army Volunteer Reserve—they are in many cases the people who will be hit—are part-time people who give voluntary service after working hours. It is extremely difficult to see how the disallowing on financial grounds of their contribution to the community will make any difference to the Government's avowed programme of shifting resources to export industry. Exactly the reverse will happen, as far as I can see, by taking away from a great many people who give valuable time and service in a voluntary capacity, often after hours, to these admirable and necessary national services. They will go to the clubs or the pubs, stay at home or go to the shops. Instead of a massive shift of resources into export there will be a tendency for more people to have idle hands and go spending.
  The economic implications which underline this Bill are the most worrying. There could be some justification for these measures if we could have a real assurance that they could be part of the hard base upon which the Government were proposing to build up some rational edifice of economic strategy for the future. This is our real anxiety. We can see nothing arising from this Bill which points to the necessary changes for getting
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  the economy straight which are going to lead to a long-term solution of our problems.
  I was very struck by observations of hon. Members, particularly the hon. Member for Plymouth, Sutton (Dr. David Owen), when he spoke about the expenditure of the Government being out of control. This is a fair point. This is where one gets the demoralising, stark and completely rational contrast between what the Government are doing with the left hand and the right hand. On the right hand is this trifling instrument of expenditure coming before the House involving £17 million and hurting a lot of people in the process—quite unnecessarily in some cases. On the other side is the massive continuing growth of uncontrolled Government expenditure.
  How do we know at the end of this current financial year that the Government will not come forward with another huge volume of Civil Estimates which have flowered and blossomed in an uncontrolled way to negative the policy of cuts? This is the problem affecting the House—this problem of the people we are cutting off by surgery in this Bill who will be unable to participate in the automatic growth of Government expenditure. There is this £562 million of increased Civil Estimates for this year—it makes one's heart weep—against the sort of things we are having to deal with this evening.
  One item was the substantial increase in expenditure by the National Coal Board as a result of advertising costs in connection with the nationalisation of steel. This is going up by something like 70 per cent. in the Civil Estimates, a figure of £40,000. This is allowed to get through, but this Bill cuts off aspects of expenditure which affect people very directly and personally.
  Mr. Emrys Hughes: How does it compare with the advertising costs for the Army, Navy and Air Force? Does the hon. Member object to that?
  Mr. Alison: I believe we ought to be defended, and I believe that advertising, where it is related to potential exports, is a good thing, but to allow the Government to increase their expenditure by about 50 per cent. and to bring about a cut in this Bill of these figures shows complete irrationality.

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  I would like to draw attention to some of the ways in which the Government could make a rational programme of change. Surely the first point is the need to do something about the shift of resources, as the Prime Minister described it. There has to be some rational programme for a true shift of resources. This must mean, above all, a shift of manpower. This is the problem we find in the Government's programme so far.
  The only thing that could contribute towards a shift in resources is to cut back in those resources where manpower is used wastefully. We have scope for this in the field of nationalised industries.
  Mr. Speaker: The hon. Member would not be out of order if he were to come to the Bill.
  Mr. Alison: I bow to your Ruling, Mr. Speaker, and look to where Government expenditure might be shifted. Surely the first shift should be towards exports, but there is nothing which the Government have produced this evening that can conceivably be called a more rational use in the nationalised industries of the things they use, or rational in the Government's policy for the development areas. The First Secretary knows the planning in the D.E.A. intimately and must be aware that, in the context of our present difficulties, the policies originating in the D.E.A. for outlays of huge sums of money across the board for development area policy—
  Mr. Speaker: Order. This is a wide debate, but it is not as wide as to cover the whole of Government policy and expenditure, and the hon. Member must come to the Bill.
  Mr. Alison: I am trying to pin my remarks to Clause 6—[HON. MEMBERS: "Hear, hear."]—and the provisions for relieving the Board of Trade of the need to examine building grants in the development areas. [HON. MEMBERS: "Hear, hear."] I am glad the penny has dropped all around, Mr. Speaker.
  The point about this is that this is going in precisely the wrong direction. Surely the present outlays of Government money in the development areas is the most irrational of their policies at the present time that we could conceive. Huge
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  outlays are going to keep men in the same jobs very often. It is a fact that these areas are not notable for their contribution to exports. [HON. MEMBERS: "Nonsense."] This is absolutely true.
  Mr. Ogden: Nonsense.
  Mr. Alison: I dispute this with the hon. Member. I have seen the Port of London Authority report which examines the origin of exports, and the overwhelming majority of exports originate in three standard regions, and they are not development areas. Indeed, over 50 per cent. by value of exports originate from 100 firms. Yet the Government try to make a broadcast spread of aid to the development areas. The Government continue to lay out these huge sums of money for development areas and, indeed, take power under the Bill to increase them. That could not be more irrelevant to the needs of the country for a shift of resources to exports.
  To use the phrase I used before, this Bill is the spearhead of the Government's attack on our real economic problems, and it is really a pathetic instrument which will achieve absolutely nothing at all. We want to hear tonight some really convincing arguments from the First Secretary not only upon the reasons why this first instrument the Government put before the House should be one which hurts people and has very little effect on the changing of things, but upon where and how it will contribute anything at all to the shift of resources to exports. To achieve that must mean making the most productive use of manpower and of every productive factor, and the First Secretary must explain what will be the effects of the Bill upon the economic prospects of the country, let alone the political prospects of the party opposite, and we hope to hear something reassuring from him tonight.
  Mr. Lubbock: The hon. Gentleman promised to explain to me, before concluding, why he is not going to vote against the Bill. Would he kindly do so?
  Mr. Alison: I gladly reply to the hon. Gentleman's question. I am sure he will not expect me to elaborate upon the difficulties of doing that. We have expressed our reasonable criticisms of the

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  Government's policies and the terms of the Bill, but having supported the broad principle of Government retrenchment we should lay ourselves open to criticism if we attacked individual items of the Government's package.
  9.30 p.m.
  The First Secretary of State (Mr. Michael Stewart): Before I say anything else, I must take up some of the remarkable observations of the hon. Member for Barkston Ash (Mr. Alison) about the development areas. It is true, as he says, that a considerable proportion, too high a proportion, of this country's economic and export activity has been concentrated in a limited number of areas. But that is exactly what is wrong. Because that has been the situation for many years, we have time and again faced the difficulty that, if we tried to expand the whole economy, we produced overheating it certain areas while depression remained in others. This has hampered the whole job of getting our economy right.
  That is the point of regional policy and help to development areas, to which, apparently, the Conservative Party is now opposed.
  Mr. Alison: I am obliged to the right hon. Gentleman for giving way so soon. How does he reconcile the policy of massive shift of resources to exports with, simultaneously, massive shift of resources to the development areas? He cannot have it both ways.
  Mr. Stewart: The point is that a number of activities which in the past have been carried on only in certain areas can be carried on in the development areas, where there is the labour available.
  In this connection, I refer also to the regional employment premium. Several hon. Members who spoke about the regional employment premium were under the impression that there is a sum of £100 million which, if it were not spent on the regional employment premium, would be available to be spent on something else. That is not so, as was made clear when the House debated the matter. To a large extent, this is a self-creating sum. It is paid in respect of increased economic activity which in turn makes the payment possible. It is not true that, if we stopped paying the regional employment premium, we should have that
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  amount of money to spend on other things. It is that point which has been neglected by those who have attacked the regional employment premia.
  I come now to the Bill itself. Many hon. Members have observed that it is a Bill dealing with a fairly wide range of subjects, and the presence of a large number of Ministers has been demanded. During the debate, every Department concerned in the Bill has been represented at some time on the Front Bench, and during nearly the whole of the debate the attendance on the Government Front Bench has outnumbered the total attendance on the opposite benches, Front Bench and back benches. The excuse given by the hon. Member for Barkston Ash was that the Conservatives did not come to this debate because they were relying on my hon. Friends to do their work for them. I do not know how my hon. Friends relish this vision of them as substitutes for the Conservative Party. I must say that they are a good deal more vocal and entertaining than anyone we ever hear on the opposite side.
  Mr. Mikardo: And right, too.
  Mr. Stewart: The hon. Gentleman was highly contemptuous of the Bill. It was in his language, a spearhead which gave out an uncertain note. At the same time, it was an inadequate base for the Government's policy. Let me spell it out. The Government have taken a large number of major decisions. Whether they are agreed with or not, it is not disputed that massive decisions have been taken. But some of the largest of them do not require legislation. For example, the very important decisions with regard to defence do not require legislation to implement them, except for the comparatively small item dealt with in Clause 4 of the Bill. The Bill then, apart from Clause 1, which is in a special category, is simply that part of the Government's measures which happens to need legislation. The facts that these measures are a small part of the whole policy is merely because some things require legislative change while others can be changed administratively. We should be clear about the nature of the Bill.
  I shall first answer some questions about the Clauses and then questions about the larger aspect of policy and

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  how the Bill fits into policy. I was asked a number of questions about the Government Actuary's Report. I was asked whether he assumed a constant level of earnings. The answer is that he has done so since 1964. Previously, in his reports he used to assume an increase of 2 per cent. per annum, which was hardly more realistic. The basic reason why he assumes a constant level of earnings is that if he did not, and if he postulated some rate at which earnings rose, he would have to make a similar assumption about the rise of benefits. If neither is assumed, one gets, none the less, something like the picture of the extent to which the Fund is paying its way.
  I was asked what had caused the imbalance which Clause 1 is intended to rectify. Among the benefits themselves, the growth in the payment of retirement benefit is by far the largest item, amounting in 1967–68 to about two thirds of the total by which the Fund is put out of balance. In the two subsequent years the amount by which retirement pensions will increase will be equal to the total by which the Fund is put out of balance. The other items tend to cancel each other, some being plus and some minus.
  My hon. Friend the Member for Plymouth, Sutton (Dr. David Owen) felt that the Actuary should be more farseeing. There are limits to human capacity for far-sightedness. It is possible—it is not so very difficult—to estimate in the near coming years what will be the number of people of retirement age. It is very much more difficult to foretell whether a tendency for people to retire at 65 rather than 67, or 67 rather than 69, will increase, decrease, or remain the same. That is the kind of factor which creates these difficulties. This is the kind of subject on which study continually proceeds, but it would be wrong to suppose that we have had to make this reconsideration because of sheer carelessness in ignoring obvious facts.
  Mr. Hooley: Does not this argument indicate that in fact an actuarial calculation in the real sense is impossible?
  Mr. Stewart: There is something in that, but my hon. Friend is in danger of arguing too much. If there is a contributory scheme, there has to be some relation between what one expects to pay out
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  and what one expects to get in. The fact that it is difficult to make that calculation exactly for a long period ahead is not a valid reason for not trying to make it as far as human knowledge can go.
  A major part of the argument about Clause 1 was the suggestion that this was a poll tax. I do not dispute that. I do not dispute that that is a serious objection. One can consider the alternative of making increases in the graduated rather than the flat-rate contribution. I do not believe—and I think that hon. Members who have studied these things would agree with me—that that would have been more welcome, or that people would have regarded it as fairer than what we have done, because this part of the scheme is subject to severe criticism.
  I accept that the remedy to this problem is the creation of a real earnings-related scheme in both contributions and benefits, related more thoroughly and fairly to earnings, and that is a task on which we are now engaged. I must ask my hon. Friends to accept that the Government are not just sitting idle, but that this is a major undertaking requiring consideration of every kind of worker and every kind of problem with which he may be faced. We shall get on with it as speedily as we can. I accept that, looking beyond the 1970s, a continued reliance on the flat rate would not stand the strain.
  Mr. Michael Foot: Does my right hon. Friend say that this Measure is not now prepared and that the Government have not prepared the full, graduated pension scheme to which we are pledged? If so, why is it not used?
  Mr. Stewart: It is not yet completed. It is a very long and a very complicated task.
  Miss Margaret Herbison: Before that point is left, I understand that my right hon. Friend says that there would be a great many complaints if there were a graduated contribution, but what consideration has been given to putting the heavier part of it, if not the whole 1s. 6d., on the employers of this country, rather than another 1s. on the workers?
  Mr. Stewart: I accept that. Sharing was considered, but we have to weigh

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  up the effects of such a measure on industrial costs, when the increase of our exports is a major matter of policy. I shall take up this point about low-paid workers a little later on, if my hon. Friends will be patient.
  On Clause 2, I was asked about the preparation of an exemption scheme and for details of it. I do not propose to give them here. These discussions are proceeding, but they are confidential. I am confident that we shall be able to produce an exemption scheme, as was said in the original statement. I was asked if the increase in the National Health stamp and the exemptions would be simultaneous. I cannot pledge that they will be simultaneous to the day, but there will be no substantial gap in time between the two things.
  The hon. Member for South Ayrshire (Mr. Emrys Hughes) suggested that not only are we to have prescription charges but that the hospital programme has been cut as well. That is not so. The things to which he referred occurred for reasons which he will find out if he consults the Secretary of State for Scotland. They are not connected with this package at all no part of this package reduces the hospital building programme, and I would remind him that it was not this Government who cut the Ayr hospital out of the hospital building programme.
  On Clause 3, I agree with everything said by my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) about the nutritional value of milk for primary school children, but so far as secondary school children are concerned, for some years past at medical and school teachers' conferences this question has been argued to and fro, and the Department of Education and Science has had certain medical advice about it. The answer was exactly as described by my right hon. Friend the Chief Secretary, that it cannot be said with certainty that this is medically necessary. I am putting it no higher than my right hon. Friend the Chief Secretary put it, but I would add that it is a totally different problem from that of the distribution of milk in primary schools, the value of which is undoubted.
  I am prepared to give way to my hon. Friend the Member for Ebbw Vale, but I hope that I shall not have to do so too often.
  Mr. Michael Foot: What does my right hon. Friend mean by the words "medically necessary"? Are those words taken from an official report? If so, will he present it to the House? Does not he agree that it is medically advantageous that as many children as possible should have school milk? Is he not avoiding the charge made against him?
  Mr. Stewart: The proposition of secondary school milk is very different from any proposal about primary school milk. [Interruption.] I listened with patience to my hon. Friend the Member for Poplar (Mr. Mikardo); I hope that he will listen to me.
  A number of hon. Members showed interest in Clause 4. I must point out to hon. Members opposite that it is not open to them to be always demanding reductions of public expenditure and then cry out whenever anything that they particularly like happens to be touched. I believe that, in the general context of the measures, this measure, which saves £7million in a full year, was necessary. I can give the assurance that the provision for compensation will be substantially on the same terms as for local government employees who are affected by local government reorganisation. It will be based on what is called "the Crombie code".
  There are two points to answer on Clause 6. One hon. Member seemed to think that the Clause creates a substitute for B.O.T.A.C. It does not. This is merely a matter of drafting. B.O.T.A.C. remains in existence. The sole change is that the Board of Trade does not have to consult B.O.T.A.C. unless it thinks it necessary to do so. Consultation is now at its discretion. About half of these grants are for £3,000 or less, and it was felt that it was not necessary to go through this procedure for many of them.
  I was asked whether the Clause took away the right of appeal by people who had been refused grants. I do not know quite how to answer that. I suppose that the answer is "No", because there never was any right of appeal; the situation remains exactly as it was. It has often happened that people who have been refused grants have asked the Board to reconsider the matter either directly or

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  by approaches through hon. Members, and that they can still do.
  I should deal with a point which I meant to deal with in connection with Clause 2, because it refers to the very interesting and important speech of my hon. Friend the Member for Plymouth, Sutton. He asked whether money to pay for people in hospital injured in street motor accidents could be collected by a levy on the motor insurance companies. I listened to that with interest. I shall communicate it to my right hon. Friend the Minister of Health. It is certainly worth examining. My hon. Friend also raised the question of a higher charge for amenity beds. I think that the answer is that I do not believe that pursuit of that line would give anything comparable to the sums of money involved.
  I have, I hope, dealt with the points raised on the Clauses. The main interest of the House has been in the relationship of the Bill to economic policy as a whole and the effect of it on the poorest people.
  Mr. Heffer: I asked a question which I hoped would be answered. I asked what was the percentage of the deficit of £75 million paid in unemployment benefits.
  Mr. Stewart: I referred to that earlier. I said that by far the greater part of the increase in benefits is in respect of retirement benefit. I cannot give the actual figure for unemployment benefit—I will do so later—but it is comparatively small. Retirement benefit accounts for about two-thirds of the whole.
  On the question of the relationship of all this to the whole economic situation, it is not disputed that it is necessary for the country to improve its balance of payments. The hon. Member for Louth (Sir C. Osborne) urged that we should think of doing that more by increased production than by cuts. I would agree, and I suggest that he looks at the speech I made in last year's Budget debate, when I described the various measures being taken by the Government for the very purpose of increasing production. They are now beginning to bear fruit in the figures of higher productivity per man engaged in industry that we are now seeing. But, of course, that does not
  360
  necessarily happen speedily enough to deal with the immediate balance of payments problem and that is why, although the hon. Gentleman's point is important, it cannot be the whole answer.
  One could also deal with an adverse balance of payments by cutting overseas expenditure, particularly military expenditure, and we have done that on a considerable scale. But when both encouragement to productivity and reduction of overseas expenditure have been done, it still remains true—and I do not think that any hon. Member, however critical of the Bill, has been able to dispute this—that there must be a shift to exports at the present time.
  Sir C. Osborne Sir C. Osborne rose—
  Mr. Stewart: I am sorry. I cannot give way now.
  Sir C. Osborne: The right hon. Gentleman referred to me.
  Mr. Stewart: If I thought that that meant that I had to give way to the hon. Gentleman, I would not have referred to him.
  The shift to exports must mean that both private and public consumption cannot expand as fast as we had planned or hoped. I want to emphasise what I said in an earlier debate, that it is not proposed actually to cut down either social expenditure or private consumption, but the rate at which they increase must be limited. [Interruption.] Hon. Members must put any particular item in the context of the whole package. If they study the statement of my right hon. Friend the Prime Minister they will see that there has been an expansion of about 40 per cent. in all major social services over the past three years. It is against that background that we must consider the matter.
  One hon. Member urged that we have too much private consumption and too little public expenditure. Without entering into the whole argument about that, I must ask him to consider that in recent years and in the current year we have been increasing public expenditure very considerably on the most laudable and necessary objects. But, in the light of that, it is not unreasonable to say now that the rate of increase must be slower than before.

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  It is from that situation that what is called a package comes. I use the word "package" deliberately because it was constructed not, as my hon. Friend the Member for Plymouth, Sutton feared, without any philosophy but with regard to the fact that one cannot put the whole of the cut on any one service. The whole cannot go on defence, though there is some cut of defence. There is some cut in aid to industry, and there is a cut in private consumption. [Interruption.] Perhaps my hon. Friend will notice what is being done about the payment of investment grants—
  Mr. Mikardo Mr. Mikardo rose—
  Mr. Stewart: I am sorry. I cannot give way.
  Mr. Mikardo: How much is the cut in aid to industry?
  Mr. Stewart: It is in the Prime Minister's statement, in the passage about investment grants.
  Mr. Mikardo: I have read it. It does not answer the point.
  Mr. Speaker: Order. We cannot argue by cross-talk.
  Mr. Stewart: If every one of the 630 Members were asked exactly what package he or she would have constructed, no two Members would produce exactly the same package. We weighed up what we believed was right in general and that is what we commend to the House. But it must be commended as a package. It is easy enough for an individual Member to say, "I do not like this item. Take it out". When both sides of the House had finished with it, there would be no measures left at all. Government, neither by the present Government nor by any other, cannot be conducted in that way and that spirit. We have put forward a series of measures which we believe hang together and which are necessary.
  That part of the debate to which I listened with most interest, and about which I have felt most deeply throughout all this business, is how this affects some of the poorest people in the country. I listened to the speech of my hon. Friend the Member for Liverpool, Walton (Mr. Heffer). I beg him to realise that those of us in the Labour Party who disagree with him on this matter feel quite as
  362
  deeply as he does about the needs of working people and have as wide an experience of those needs. [Interruption.] All I ask is that those who support the Government should be granted as much right to claim sincerity for their views as he and other hon. Members have for theirs.
  Mr. Mikardo: Tell Mr. Schweitzer.
  Mr. Speaker: Order. Hon. Members have been listened to. Right hon. Gentlemen must be listened to as well.
  Mr. Stewart: This question has to be looked at against the background of the very many things the Government have already done to help the poorest people in the country. In the last three years, there has been an increase in the real value of the retirement pension on a scale which I do not believe has ever before been achieved in three years. There have been increases in supplementary benefits and, what is of particular value to the poorest people, alterations in the administration and the whole approach to it, so that many of those who need supplementary benefit now apply for it, and it is intended later this year to give a further increase in supplementary benefits.
  In addition to expanding these traditional services, we have brought in new social services like redundancy payments which have been of great value in removing what might otherwise have been serious hardship.
  Mr. Mikardo: The Government also brought in redundancy.
  Mr. Stewart: There has also been the rate rebate scheme, which has been of great value to some of the poorest in the land and that has been extended. There will also be the increase in the family allowances in April.
  I do not underestimate—and I have the kind of constituency which does not enable me to do so—the problems of some of our poorest fellow citizens and I am glad to be a member of a Government who have rendered them very valuable service and who, apart from the ordinary social services, have delivered them, particularly in London, from the rapacity of private landlords. All these things were worth doing and I am proud to be a member of the Government who did them.

  363
  Now we have to face the fact that we are doing things that are disappointing and discouraging, but the worst service we could do to the poorest of our fellow citizens would be to dodge difficulties so that this country never got out of the troubles which have faced it since the end of the war. For the reasons I have given in this speech and on other occa-
  sions, I believe that what we are doing now, unattractive as some of it is, is relevant to the job of re-establishing this country's finances and that I believe to be one of the most valuable services we can render our poorest fellow citizens. I believe this Bill to be necessary and I commend it to the House.
  Question put:—
  The House divided: Ayes 216, Noes 8.

  Division No. 60.]

  AYES

  [10.0 p.m.

  Albu, Austen

  Ennals, David

  MacPherson, Malcolm

  Alldritt, Walter

  Ensor, David

  Mahon, Peter (Preston, S.)

  Anderson, Donald

  Fernyhough, E.

  Mallalieu, E. L. (Brigg)

  Archer, Peter

  Finch, Harold

  Mapp, Charles

  Armstrong, Ernest

  Fletcher, Raymond (Ilkeston)

  Marks, Kenneth

  Atkins, Ronald (Preston, N.)

  Foley, Maurice

  Marsh, Rt. Hn. Richard

  Bacon, Rt. Hn. Alice

  Ford, Ben

  Mayhew, Christopher

  Bagier, Cordon A. T.

  Forrester, John

  Millan, Bruce

  Barnes, Michael

  Fraser, John (Norwood)

  Miller, Dr. M. S.

  Barnett, Joel

  Galpern, Sir Myer

  Milne, Edward (Blyth)

  Baxter, William

  Gardner, Tony

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

  Bence, Cyril

  Garrett, W. E.

  Molloy, William

  Bennett, James (G'gow, Bridgeton)

  Gordon Walker, Rt. Hn. P. C.

  Moonman, Eric

  Binns, John

  Grey, Charles (Durham)

  Morgan, Elystan (Cardiganshire)

  Bishop, E. S.

  Griffiths, David (Rother Valley)

  Morris, Charles R. (Openshaw)

  Blackburn, F.

  Griffiths, Rt. Hn. James (Llanelly)

  Moyle, Roland

  Boardman, H. (Leigh)

  Hamilton, James (Bothwell)

  Murray, Albert

  Bottomley, Rt. Hn. Arthur

  Hamling, William

  Neal, Harold

  Boyden, James

  Hannan, William

  Oakes, Gordon

  Braddock, Mrs. E. M.

  Harper, Joseph

  Ogden, Eric

  Bray, Dr. Jeremy

  Harrison, Walter (Wakefield)

  O'Malley, Brian

  Hart, Mrs. Judith

  Oswald, Thomas

  Brooks, Edwin

  Haseldine, Norman

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

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

  Hattersley, Roy

  Page, Derek (King's Lynn)

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

  Hazell, Bert

  Palmer, Arthur

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

  Healey, Rt. Hn. Denis

  Panned, Rt. Hn. Charles

  Buchan, Norman

  Henig, Stanley

  Parker, John (Dagenham)

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

  Hobden, Dennis (Brighton, K'town)

  Pearson, Arthur (Pontypridd)

  Butler Herbert (Hackney C.)

  Horner, John

  Peart, Rt. Hn. Fred

  Callaghan, Rt. Hn. James

  Houghton, Rt. Hn. Douglas

  Pentland, Norman

  Cant, R. B.

  Howarth, Robert (Bolton, E.)

  Perry, Earnest G. (Battersea, S.)

  Carmichael Neil

  Howell, Denis (Small Heath)

  Price, Thomas (Westhoughton)

  Carter-Jones Lewis

  Hoy, James

  Probert, Arthur

  Castle, Rt. Hn. Barbara

  Huckfield, Leslie

  Pursey, Cmdr. Harry

  Chapman, Donald

  Hughes, Rt. Hn. Cledwyn (Anglesey)

  Randall, Harry

  Coe, Denis

  Hughes, Roy (Newport)

  Rees, Merlyn

  Coleman, Donald

  Hunter, Adam

  Reynolds, G. W.

  Concannon J D

  Hynd, John

  Rhodes, Geoffrey

  Corbet, Mrs. Freda

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

  Richard, Ivor

  Craddock, George (Bradford, S.)

  Janner, Sir Barnett

  Roberts, Albert (Normanton)

  Crawshaw Richard

  Jay, Rt. Hn. Douglas

  Roberts, Gwilym (Bedfordshire, S.)

  Cronin, John

  Jenkins, Rt. Hn. Roy (Stechford)

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

  Crosland, Rt. Hn. Anthony

  Johnson, Carol (Lewisham, S.)

  Rodgers, William (Stockton)

  Crossman, Rt. Hn. Richard

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

  Rogers, George (Kensington, N.)

  Cullen, Mrs. Alice

  Jones, Dan (Burnley)

  Rose, Paul

  Dalyell, Tam

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

  Ross Rt Hn. William

  Davidson, Arthur (Accrington)

  Jones, J. Idwal (Wrexham)

  Rowlands E (Cardiff. N.)

  Davies, Dr. Ernest (Stretford)

  Jones, T. Alec (Rhondda, West)

  Shaw, Arnold (Ilford, S.)

  Davies, G. Elfed (Rhondda, E.)

  Kelley, Richard

  Davies, Ednyfed Hudson (Conway)

  Lawson, George

  Sheldon, Robert

  Davies, Harold (Leek)

  Ledger, Ron

  Shore, Peter (Stepney)

  de Freitas, Rt. Hn. Sir Geoffrey

  Lee, Rt. Hn. Frederick (Newton)

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

  Delargy, Hugh

  Lewis, Ron (Carlisle)

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

  Dewar, Donald

  Lipton, Marcus

  Silkin, Rt, Hn. John (Deptford)

  Diamond, Rt. Hn. John

  Loughlin, Charles

  Silkin, Hn. S. C. (Dulwich)

  Dobson, Ray

  Luard, Evan

  Slater, Joseph

  Doig, Peter

  Lyon, Alexander W. (York)

  Small, William

  Dunn, James A.

  Lyons, Edward (Bradford, E.)

  Snow, Julian

  Dunnett, Jack

  McBride, Neil

  Spriggs, Leslie

  Dun woody, Mrs. Gwyneth (Exeter)

  McCann John

  Stewart, Rt. Hn. Michael

  Eadie, Alex

  McGuire, Michael

  Symonds, J. B.

  Edelman, Maurice

  McKay, Mrs. Margaret

  Taverne, Dick

  Edwards, Rt. Hn. Ness (Caerphilly)

  Mackenzie, Gregor (Rutherglen)

  Thomas, George (Cardiff, W.)

  Edwards, William (Merioneth)

  Mackintosh, John P.

  Thornton, Ernest

  Ellis, John

  Maclennan, Robert

  Tinn, James

  English, Michael

  McMillan, Tom (Glasgow, C.)

  Urwin, T. W,

  Varley, Eric G.

  Wellbeloved, James

  Willis, George (Edinburgh, E.)

  Wainwright, Edwin (Dearne Valley)

  White, Mrs. Eirene

  Woodburn, Rt. Hn. A.

  Walden, Brian (All Saints)

  Wilkins, W. A.

  Wyatt, Woodrow

  Walker, Harold (Doncaster)

  Willey, Rt. Hn. Frederick

  Yates, Victor

  Wallace, George

  Williams, Alan (Swansea, W.)

  Watkins, David (Consett)

  Williams, Alan Lee (Hornchurch)

  TELLERS FOR THE AYES:

  Watkins, Tudor (Brecon & Radnor)

  Williams, Clifford (Abertillery)

  Mr. Alan Fitch and

  Weitzman, David

  Williams, Mrs. Shirley (Hitchin)

  Mr. Joan L. Evans.

  NOES

  Davidson, James (Aberdeenshire, W.)

  Steel, David (Roxburgh)

  Grimond, Rt. Hn. J.

  Thorpe, Rt. Hn. Jeremy

  TELLERS FOR THE NOES:

  Hooson, Emlyn

  Wainwright, Richard (Colne Valley)

  Mr. Eric Lubbock and

  Mackenzie, Alasdair (Ross&Crom'ty)

  Winstanley, Dr. M. P.

  Mr. John Pardoe.

  Bill accordingly read a Second time.
  Bill committed to a Committee of the whole House.—[Mr. Fitch.]
  Committee Tomorrow.

BUSINESS OF THE HOUSE
Ordered,
t the Proceedings on the Motion relating to Ways and Means may be entered upon and proceeded with at this day's Sitting at any hour, though opposed.—[Mr. Diamond.]

PUBLIC EXPENDITURE AND RECEIPTS [MONEY]
Queen's Recommendation having been signified—
Resolved,
That, for the purposes of any Act of the present Session to increase contributions payable under the National Insurance Act, 1965 and the National Health Service Contributions Act, 1965, to provide compensation for civil defence employees in connection with the reduction of activities under section 2 of the Civil Defence Act, 1948, to provide for increasing certain fees and other payments, and for other purposes, it is expedient to authorise the under-mentioned payments:—

(1) in connection with the increase of contributions under section 3 (flat rate contributions) of the National Insurance Act, 1965, the payment out of moneys provided by Parliament of any resulting increase in the sums so payable by way of Exchequer supplement under section 7 of that Act;

366

(2) in connection with the increase of National Health Service contributions, the payment out of moneys provided by Parliament of any resulting increase in the sums so payable under section 5 of the National Health Service Contributions Act, 1965 on account of contributions in respect of persons treated as belonging to Northern Ireland or the Isle of Man;

(3) in connection with any provision for payment of compensation by reference to loss of employment or loss or reduction of emoluments as a result of the revocation or amendment of regulations under section 2 of the Civil Defence Act, 1948, payment out of moneys provided by Parliament of grants in accordance with section 3 of that Act in respect of the expenses of local authorities and police authorities in paying the compensation;

(4) in connection with any provision for increasing fees, charges or other payments where the amount is fixed or regulated by Act of Parliament, payment into the Exchequer of any resulting addition to the sums so payable by virtue of any enactment.—[Mr. Diamond.]

WAYS AND MEANS

  NATIONAL HEALTH SERVICE CONTRIBUTIONS
  Resolved,
  That the existing weekly rates of National Health Service contributions payable by insured persons be each increased by an amount not exceeding 6d. or, in the case of rates payable by persons under the age of eighteen, 3d.; and that the existing weekly rate of National Health Service contributions payable by employers be increased from 7½d. to 8d.—[Mr. Diamond.]

DRUG ADDICTS (NOTIFICATION)
10.11 p.m.
Mr. W. F. Deedes: I beg to move,
That an humble Address be presented to Her Majesty, praying that the Dangerous Drugs (Notification of Addicts) Regulations 1968 (S.I., 1968, No. 136), dated 1st February 1968, a copy of which was laid before this House on 8th February, be annulled.
When the Dangerous Drugs Act was in Committee, some of my hon. Friends and I entered one plea. We urged that the Regulations, of which these are the first to appear, should exceptionally be approved by Resolution and not be subject to this procedure. Otherwise, I foresaw that we would have to go through this gambit of seeking to annul the Regulations which, like the Act, we support in principle. For reasons which did not convince the predecessor of the hon. and learned Gentleman the Member for Lincoln (Mr. Taverne), the Home Office felt unable to meet this request, so here we are doing what I feared. I can only hope that the medical profession and others concerned with the Regulations will understand why we are doing it in this way.
These Regulations are the first of a number that will be needed to put the Act into operation, and they are not the least important. I find it depressing that these Regulations should reach us about a thousand days after the Committee, presided over by Lord Brain, first recommended that something of this kind should be done. Making all allowances for the difficulties which we know occur, a thousand days is a long time to deal with a problem of this urgency. However, they now implement one of the Act's two main legs; that is to say, Section 1 (1,a) requiring all medical practitioners to notify a central authority of those whom they have reasonable grounds for suspending are addicted to specified dangerous drugs. This will come into force this week. As from Thursday, all doctors will be required to make this notification.
I see certain advantages in making this the first step. At the same time, it also appears that the timing of the Regulations, envisaged when we were discussing the Act, has gone somewhat awry.
368
I am subject to correction, but it would appear that at least two conditions attached to these Regulations have not yet been fulfilled. First, we have no fresh definition of the word "addiction". In the Regulations is a slight adaptation of the definition given by Lord Brain nearly three years ago. Is this the last word on the subject? It may be adequate, but we were told by the Minister in Committee on 20th April that something different might be drafted. He said:
"There is no definition of an addict in existing law, but the Regulations which we shall make under this Clause will include a definition. There was a suggested definition in the Brain Report. Our definition will probably be based on that, but I should be surprised if it followed it exactly."
To be fair, it does not follow it exactly, but it is very close, and I wonder whether we should regard it as the final version.
Much more important, we were promised at the time that a panel of experts would assist general practitioners in determining whether patients who came to them fell within this or some other definition of addiction. At the same meeting of the Committee, the Minister said:
"Our present intention is that there should be at least four panel members in each hospital region, and that the doctor should consult an individual panel member rather than the whole panel.
In our view, the panel ought to be set up and publicised, certainly to the profession, before the regulations under this Clause come into operation, so that doctors know exactly where they stand before this obligation falls upon them."—[OFFICIAL REPORT, Standing Committee G, 20th April, 1967; c. 7–8.]
This obligation falls upon them on Thursday. My second question is, how far have the panels been established and how far do doctors know of their existence?
It is important that they should exist in some form, however rudimentary—and not simply in London, where good advice on this difficult subject is not hard to come by, but in other regions where there may be few addicts and general practitioners may have little first-hand knowledge of patients of this kind. Perhaps we may have some up-to-date picture of these panels. I do not know what members of the profession have

369
been advised about by publicity. I doubt whether they have heard much about these panels, at least up to today.
I turn now to a development since the Brain Committee's Report and since our Committee discussions last year, which bears on the Regulations. We now know—it is no secret—that there has been introduced into this complex field of hard drug taking a new element, that of the occasional taker of heroin, the "experimenter". He is not, at least for the time being, necessarily addicted to heroin as defined in the Regulations, but he uses the drug once a week or perhaps more or less.
Surely it is important that we should know who these people are, where they live and something about them. If we are to build up any picture of the geography of hard drug addiction, this is invaluable information. I accept that not all these people are likely to come the way of general practitioners, even after Thursday, but, if they do, surely they should be notified. Should not some central record of those addicted to heroin also include those who may be taking it but are not necessarily addicted? In this sense, the Regulations are incomplete.
Are they being supplemented with specific advice to general practitioners? It is important to know this. In any case, even if they are being given additional advice or guidance, under the Regulations as they stand they are not required to notify anyone but an addict. Therefore, this point should be cleared up.
There is another kindred complication here, and there is no secret about this either. Certain drugs, which were not taken into account at the time of the Dangerous Drugs Act, 1965, or the Dangerous Drugs Act, 1967, are now coming into use. One or two of them are hardly less dangerous than the drugs covered by these Regulations, but they are not in the Schedule to the principal Act of 1965, nor are they as yet on the United Nations list. I suppose the best examples of these are methedrine—and there has been a certain amount written about this in the Press—and amphetamine which there seems no doubt is being taken intravenously to an unknown extent. The medical profession find it extremely diffi-
370
cult to judge what is happening here, and we ought to take the earliest steps to find out. I think that something of a switch by a certain number of people from heroin to cocaine to methedrine is possible. I appreciate—
Mr. Speaker: With all the sympathy in the world, I must remind the right hon. Gentleman that he cannot amend on this Order the parent Act and the Schedule to the parent Act.
Mr. Deedes: I appreciate that, Mr. Speaker, and I am not continuing the point for very long. I was only going to say that the Regulations offer us a chance to find out what we want to know. I do not press the hon. Gentleman for a firm answer on this, but we ought to be prepared to extend the scope of Regulations such as this as quickly as possible if developments suggest that is necessary. I hope the hon. Gentleman will be able to assure us that this is possible.
Finally, the Regulations provide for a certain course of action which is eminently fair and has been approved by the medical profession, but which will not necessarily be swift, against any doctor who refuses to comply with these Regulations and does not after Thursday notify an addict who comes to his notice. Some months ago I should have thought the likelihood of any doctor refusing to comply with these Regulations was really too unlikely to bother about. But since a recent case which has achieved some prominence I feel less sure.
When we have Regulations dealing with the prohibition of the supply of drugs, it will not be difficult to catch up with any doctor who refuses to conform with these Regulations, though it may take a little time to bring him to book. He will, of course, be traced through the pharmacy records. But if a doctor chooses to ignore these Regulations before the prohibition on prescribing drugs comes into force and continues to treat but not to notify as he is now required to do, it will not be very easy to bring him to book.
It may be that—and I think I am just within the bounds of order here—that the interval between these Regulations and those dealing with the prescription of drugs will be short one, and I hope the Under-Secretary will be able to say something about this. The distance between

371
this and the next set of Regulations seems very important indeed, and in the light of recent events I hope the Home Office will look again at the interval which could elapse between starting the machinery of those Regulations against a doctor refusing to conform with them and actually bringing him to book. I repeat that six months ago this was an unthinkable contingency, but it is not quite unthinkable now. For those reasons I thought it right to raise the matter of these Regulations and to repeat what we must do.
It goes without saying that we hope they are going to succeed, as a great deal depends on their success. If they work we should, within a matter of weeks, be able to repair at least one major weakness in our scheme for combatting drug addiction, which is—I must not say our ignorance, but our very vague idea about the real numbers involved—a very big advance. Perhaps even more important, the Regulations will enable us—I shall be interested to hear the Under-Secretary's observations—to discover addicts who by one means or another have been resorting to more than one doctor. If every doctor is required to notify, certain names may appear twice on the list held by the Home Office. This would indeed be a very remarkable advance.
We must not under-rate the difficulties—I am sure that the Under-Secretary does not—which will confront a very large number of practitioners in implementing these Regulations. The majority of them have little or no experience of handling addicts, because most addicts have been channelled into the hands of a relatively few doctors and practitioners may now encounter them for the first time. These doctors will look for guidance. I should like to think that the guidance is available. During the passage of the Bill we discussed pretty thoroughly the use of the information which will be derived from these Regulations, and I do not want to go over all that ground again.
However, it is relevant to ask two questions. First, when under these Regulations names have been notified to the central authority, who I understand will be the Chief Medical Officer at the Home Office, what action will be taken to follow up the information? After all, these will be the names of people notified by doctors as being addicts who will for an un-
372
known period be continuing to receive their prescriptions from doctors as opposed to treatment centres. It is very important that some kind of follow-up by some agency should be undertaken so that we know what these people are up to. This is a question on which I should be glad of a little more guidance.
One other question on the central point has concerned a number of my hon. Friends. It is fair to quote what the Minister of State, Home Office, said some months ago about these Regulations:
"Once the new system has been established on a statutory basis, it is possible that inquiries will be received from other sources, but, as I say, the whole of the list will be safeguarded by the Official Secrets Act, and it will have to be determined administratively where the information can be passed. We know that marriage partners, persons with whom addicts are living, employers, and others may ask questions, but I think we should have to say quite clearly that this information could not be given to the majority of these people."—[OFFICIAL REPORT, Standing Committee G, 20th April, 1967; c. 20.]
This is an important point, because it relates to the use that will be made of the information derived from these Regulations. Anything that the hon. and learned Gentleman can say on that would be of great interest to my hon. Friends and myself.
In raising the matter now we shall not delay or impede what the Home Office has in mind. On the contrary, in view of the amount of doubt and uncertainty which have prevailed about these and certain other Regulations which it would be out of order to discuss, some of it stimulated by people who do not want the Act to work, I hope that this will give the Under-Secretary an opportunity to say some of the things which need to be said.
10.28 p.m.
Mr. Arthur Blenkinsop: I rise only to welcome the speech of the right hon. Member for Ashford (Mr. Deedes) and the opportunity it gives us to secure as full a reply as possible from the Home Office on the nature and implication of these Regulations. I share the right hon. Gentleman's anxiety that the Regulations should be effective and that the consequent actions of the Government should follow as rapidly as possible. Can my hon. and learned Friend say anything further about the sequence of events

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which is likely to follow from the Regulations, although I appreciate that this is a matter on which we cannot go into detail now? It would help many of us to know something of the timetable that the Home Office and the Ministry of Health have in mind.
I have sympathy with my hon. Friends on the Front Bench on the question of timing. While we all would have wished to see much more rapid action in many of these matters, we appreciate many of the problems involved and the difficulties of ensuring the full co-operation of, for example, the medical profession in this matter. I assume that this would be one of the problems which has had to be faced concerning the time when the Regulations have been brought forward.
Like others, I would be extremely interested if we could hear a little more about the nature of any central register which may be developed from the basis of information provided as a result of the Regulations. I hope very much that we will not be too seriously limited in the information that we can provide, which could be of the utmost importance in regard to the emergency treatment, for example, of cases which might arise by the natural problems of secrecy and the like. Anything that can be said about this I would welcome.
There is also the point, which the right hon. Member for Ashford has raised, concerning the deep anxieties which many of us have about the wider range of drugs and the new developments which are taking place which make our ideas on the matter out of date within a few weeks. Many of us are concerned about whether the provisions in the Regulations will prove adequate to deal with some of the new developments of which we are beginning to be well aware, which may prove to be just as anxious a matter to the whole of the community as the problem of heroin.
Therefore, I do no more than welcome the fact that this opportunity is being given to my hon. Friend the Under-Secretary of State to reply to this brief debate and assure him that there is deep concern on both sides of the House on the matter and a deep anxiety that the Regulations and other Measures which succeed them should be successful.
10.33 p.m.
Dr. M. P. Winstanley: The whole House will be grateful to the right hon. Member for Ashford (Mr. Deedes) for giving us an opportunity to debate this important matter and for giving the Under-Secretary of State an opportunity to explain, within the limits of the Rules of Order, the use to which he will put the Regulations and the sequence of events in the campaign in a matter which is of the greatest importance to us all.
In general, I welcome the Regulations. All that they really do is to make a reality of what many people have believed to be the situation for a long time. There seems to have been a general impression that there was already a sort of register of addicts and that all general practitioners were required to furnish this information. That, however, was not the case.
The Minister of Health and the Home Secretary had opportunities of obtaining that information but by rather devious means, and without the Regulations they have had to rely on the drugs register. When a chemist's register was produced and showed that a general practitioner was persistently issuing National Health Service prescriptions, because it would be those transactions that the chemist would have to enter if the general practitioner himself did not do the dispensing—the entry would be recorded not in his register, but in the pharmacist's register—the fact would be brought to the attention of the Home Secretary and in due course one of his medical officers would call on the general practitioner to find why it was necessary regularly for him to prescribe heroin or morphia for a certain individual. That was a long and tortuous process, however, and it is necessary to have a system of the kind which is now intended.
It is also necessary, as soon as possible, for the Home Secretary and the Minister of Health to have all the information which is available on a subject about which we all talk a great deal but about which we do not know everything by a long way. There are all sorts of guesses about the size of the problem, and nobody really knows.
These Regulations will assist. They will be very necessary indeed, not only to the Home Secretary but also to the

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Minister of Health, in enabling them to assess what will be their next steps and where they will take them. Obviously it will be impossible for the Minister of Health to decide what resources will be needed in terms of the availability of treatment centres and so on, till he has this information and knows where the addicts are and what their number is in any locality.
I would urge one point on him which I hope he will answer, namely, the question of timing. The right hon. Gentleman referred to it and I wish to refer to it, too. In our previous debate, whilst I supported all the measures which were being taken—and I still do, and I support these Regulations—I stressed what I am sure every doctor would stress, that the whole question of the timing of these various operations is absolutely crucial. If things are done in the wrong sequence or with too much haste, then the whole thing could collapse about our heads and we could be in a desperate situation. If, for example, any kind of restrictive regulations were introduced or appeared to be introduced before the Minister of Health was in a position to cope with the problem, we should be doing precisely what we want to avoid doing, namely, encouraging the creation of a black market. Therefore, I hope we shall hear tonight from the Government something about the timing of what is to happen.
I accept that it is necessary to have these kinds of Regulations in order to establish the size of the problem and certain details about it. I am not minimising this problem. I regard it as desperately serious and of desperate significance, but nevertheless I think that from the purely quantitative point of view it is still not large. I think the Minister will find that is so when the Regulations work and he gets the figures. There are many general practitioners who are never approached by an addict at all. I think it is necessary to say this, because so many people seem to think that general practitioners throughout the country are inundated with requests from people for prescriptions for drugs in circumstances in which it would be necessary for them to take action under these Regulations, but it is not the case. In my nineteen years' of general
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practice the occasions on which I have been approached for drugs as specified here have been very rare, so rare that they stand out and one remembers them. However, if once a doctor gets a reputation for being sympathetic to applicants, and of being prepared to spend time with an addict and prepared to give special consideration to these cases, it may be that that individual practitioner will get a great many applications.
If that number were taken as a statistical basis, the total position would be unreal. There would be a tendency to multiply the figure and to say that that is the size of the problem. It is not. Some addicts approach doctor after doctor in their efforts to get adequate supplies and, theoretically, could appear over and over again in the returns from different doctors. These Regulations will provide information more widely and enable the Ministers to know more about the true size of the problem.
I would like an answer to a question on Regulation 1(3,b,iv):
"if the attendance is at a hospital, by a medical practitioner on the staff of that hospital."
This exempts a doctor from the requirement to notify if notification has already been carried out by somebody on the staff of that hospital. There is a point of some importance here. The vital factor in the management of the addict, if it is to be done successfully, is continuity. The Minister of Health agreed, and I am sure that the Home Secretary agrees, that continuity of care is vital. There are addicts at present under the care of specific practitioners at certain hospitals. I am sure that it will be helpful to the Minister to know the names and identities of the doctors, not the hospitals, and for how many addicts they are prescribing.
There is a danger that, when the Regulations come into force and there are the new treatment centres, if a patient is suddenly cut off from, say, the psychiatrist under whose care he has been and he is made to go somewhere else, he will break the treatment off. I do not for a moment suggest that he will have inferior treatment elsewhere. The danger is that his treatment will cease altogether. The requirement for purely hospital notification does not take account of the important personal relationship between an

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individual patient and a specific doctor. The patient's relationship is not with a hospital; it is with a doctor. The Minister may well find it helpful to have that information, but, under paragraph (3,b,iv), it is envisaged that he will not have it. I should like to hear from the hon. and learned Gentleman about that.
In general, I welcome the Regulations, and I hope that they will work.
10.41 p.m.
Mr. John Brewis: The form o: the Prayer, to annul the Regulations, should not be taken as an indication that we oppose them. We are very much in favour of the Regulations and feel that the delay has been too long already. They ought to have come into force much sooner. There is delay, also, in bringing in the other regulations which are needed to control the prescribing of drugs. When will they be laid before the House?
I wish, first, to refer to the important question to which my right hon. Friend the Member for Ashford (Mr. Deedes) stressed, namely, the co-operation of the medical profession. There is a very small minority of medical men who are not playing the game by drug addicts. I mention in particular the name of Dr. Petro, which has figured in the popular Press in the last week or two. What is to happen—
Mr. Deputy Speaker (Sir Eric Fletcher): Order. It is difficult to see how that can arise on Regulations which provide merely for the notification of drug addicts.
Mr. Brewis: I was leading up to the question of what the sanction would be in the event of a doctor not complying with the Regulations, Mr. Deputy Speaker. Under Section 2 of the Dangerous Drugs Act, 1967, a direction may be given to a doctor that he shall not in future prescribe drugs at all, but this is hedged about with a requirement that the matter may go to a tribunal, which will take a considerable time. This, surely, is wrong, when we have the flagrant and scandalous evidence of over-prescribing by doctors which is associated with the name of Dr. Petro. How quickly will that sort of abuse we put right?
Second, how far will the system of notification deal with another loophole in our drugs law? Where are addicts at
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present getting their drugs? As far as I can see, the Home Office and the police are not proceeding nearly actively enough against the vendors of drugs simply because they are not getting the information on which they could take action against "Big Jim", "Long Tom", or whoever it may be who is peddling drugs. I hope that these Regulations will give the Government a chance to bring these people to book. It is not being done sufficiently at present. Will the hon. and learned Gentleman tell us how the Regulations will help on that side of the matter?
I want thirdly to deal with the definition of drugs in Regulation 3(1). The Dangerous Drugs Act, 1965, contains a list of many drugs—a whole page of them—but, curiously enough, at the moment only three drugs are of any importance, although the Schedule to that Act lists about 40, giving their chemical names. Surprisingly, I do not see heroin mentioned. Is it included under another name? More important, methedrine does not seem to be included. When these Regulations come into force, will doctors like Dr. Petro be able to continue to prescribe methedrine, which in many ways is much more dangerous than heroin? An answer to that question is urgent.
10.46 p.m.
Mr. Mark Carlisle: As other hon. Members have said, these are important Regulations which in many ways are far-reaching, because, by requiring doctors to notify particulars of people attending them as patients, it largely cuts across the normally accepted doctor-patient relationship.
I have three comments to make about the Regulations. The first concerns that of timing, a subject which other hon. Members have mentioned. It appears that something has gone wrong with the timing of the legislation. We are tonight dealing with Regulations motivating Section 1(1,a) of the Dangerous Drugs Act, 1965, and yet it is clear from the debate in Committee that it was undoubtedly the intention that both parts of the Act, both notification by doctors and the control of prescription, should come into operation at the same time.
The Minister of Health himself said:
"I hope that treatment facilities will be ready on this scale by the time the Regulations are made. It might well be decided then

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that the Regulations under paragraphs (a) and (b) should have a common operative date. It is desirable, if possible, that these two sets of provisions should come into force simultaneously."—[OFFICIAL REPORT, Standing Committee G, 20th April, 1967.]
He said very much the same thing at the Committee's second meeting.
We must therefore ask why it is that we have only these Regulations tonight. Does the Parliamentary Secretary consider that it is wise to bring this legislation into force in this piecemeal way? Notification and the control of prescriptions go together, and it is important that at the time of the notification of addicts there should be control of prescribing by the general practitioner and that there should be treatment centres where prescriptions can be given. The Minister himself said that the whole purpose of notification was that treatment could be given.
If there is notification, are treatment clinics available so that people notified as addicts can go to clinics? There was a somewhat alarming report—I use the word generally—in a Sunday newspaper on Sunday about the situation in London, and I should be grateful if the Parliamentary Secretary would say whether that was a true assessment of the position, or whether, as the Minister of Health has suggested, there are already 15 clinics in existence.
Mr. Deputy Speaker: I do not think we can pursue that in any detail. It is in order to inquire when some other Regulation may be made, but it is not permissible in discussing these Regulations to speculate as to whether reports in Sunday newspapers about the availability of treatment are correct.
Mr. Carlisle: I am most grateful, Mr. Deputy Speaker. I was leaving that point, and shall do so with the comment that bringing in the Regulations to notify without clearing up the undoubted dangers of loopholes may mean that people unwilling to go to a doctor, with the danger of notification, may be driven into the undesirable black market.
My second point is that which my right hon. Friend has already raised about the panel. Do panels now exist of doctors to whom the doctor can go if he is not sure whether a person is an addict and should be notified under the Regulations?
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Clearly, that was envisaged by the Brain Committee and throughout the whole debate on the Dangerous Drugs Act, and we should know if the panels now exist, and it not what is being done about them.
My third point is more general. Does either the Home Department or the Ministry of Health intend to give any advice to doctors as to how the Regulations apply, and in particular as to whether they should inform the patient that they propose to notify the chief medical officer that he is a drug addict or a suspected drug addict? This question was raised in Committee and was left somewhat in the air. It is a difficult question, because as I understand it the important thing is the confidence between the patient who is a drug addict and the doctor. It is a question of balance whether that confidence is more likely to be shattered by telling the man that he will be reported, or by not telling him and his finding out in another way.
10.53 p.m.
Mr. Maurice Macmillan: I do not want to detain the House for very long, and I should be out of order if I made anything but the most passing reference to problems of treatment. But I hope that it will be all right to say that we are discussing not only the Regulations but, by implication, the rather miserable lives of a number of people.
We should be grateful to the hon. Member for Cheadle (Dr. Winstanley) for pointing out that in some aspects this is not a large problem, and that perhaps the most important part of the Regulations is concerned not only with the treatment and method of handling existing addicts, although this is important enough, but hopes to confine addiction to as small a number of people as possible, especially young people. I hope that we can be given Home Department's figures for 1967. I think that the total for 1966 was 1,349, of whom about 329 were under 20.
My right hon. Friend the Member for Ashford (Mr. Deedes) and my hon. Friend the Member for Runcorn (Mr. Carlisle) pointed out that it was originally hoped to bring in two sets of Regulations together, those we are now discussing and those which are yet to come on the control of prescriptions. I wonder how much the apparent slowness in getting the new treatment facilities going is likely to

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delay the second leg of the Regulations controlling prescriptions. The new treatment facilities were announced by the Minister a week or so ago, and the very wide interest in this aspect—indeed, in all aspects of the problem—is demonstrated by the number of Questions put to him and by the Adjournment debate last July. That interest, which is on both sides of the House. is rather greater than might be implied from the numbers present tonight to discuss this somewhat narrow point of notification, but it is well that it should be known outside the House that this is not a problem which the House takes lightly.
I do not make too much of the newspaper articles in this connection, except to say that I think they express a sense of unease and a feeling that perhaps the Ministry is not as in control of the situation as it would like to be. We are, therefore, worried about the further delays involved in splitting the operation of the Act into two legs. I hope we can be told how long it will be before the next set of Regulations is brought forward.
On these Regulations, I reinforce what my right hon. Friend said on the question of definition of addiction and the allied problem of the drugs to which these Regulations will eventually have reference. In the Adjournment debate last July, the Minister said:
"I should explain that I shall be using the term drug addicts ' in this debate to mean addicts to heroin and cocaine, since it is to the treatment of these forms of addiction that the present measures are being directed."—[OFFICIAL REPORT, 25th July, 1967; Vol. 733, c. 634.]
I think that my right hon. Friend made the point clearly that perhaps the Minister should consider whether other forms of drugs should not now be included.
I want to ask, too, about the whole question of the definition of addiction as opposed to habituation, which my right hon. Friend touched upon in referring to what he called the occasional addict—the person who takes heroin from time to time but cannot be said to be addicted within the meaning of these Regulations. This is important, both from the point of view of trying to help someone who might be on the point of becoming an addict but is not one yet in terms of the Regulations, and also from the point of view of dealing with those who are ex-
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ploiting addicts and potential addicts, changing their liability to come under these Regulations by switching their drug to one which is not or may not be covered by the Regulations.
Then there is the whole question of confidence. Is there any possibility that the confidence between doctor and patient—and, although we may talk of addicts and treatment centres, this basically is still a relationship between doctor and patient about which we are making Regulations—will in any way be disrupted more if there is a feeling that the centres are not fully operational, so that doctors who would not normally treat an addict but would report him feel that it may be difficult to get the addict the attention which should go with notification?
Another aspect is the difficulty which may or may not arise through delays, involving the question of people receiving maintenance doses and addicts seeking genuine treatment and cure being mixed up together. There are considerable dangers involved in this. Do these Regulations have any effect on this aspect?
To sum up, there seems to be some uncertainties, more than any of us on either side would like. These include the question of panels, the definition of addiction, new drugs, the list of drugs, the problem of the experimental taker, the occasional taker, or the addict who is not under these Regulations, and the major problem of the interval between these two sets of Regulations.
I hope that the Under-Secretary can give us much more information and I am sure that he is anxious to do so. I trust that he will be able to allay some of the anxieties clearly felt in many quarters and expressed by some hon. Members. Perhaps he can clarify a point which I suspect is causing a little unease, and that is the boundary of responsibility between his right hon. Friend the Home Secretary and the Minister of Health. There is always a great danger when questions of health and law come together, and I hope we can have some clarification.
Mr. Deputy Speaker: Order. There is nothing about the Minister of Health in the Regulations.
Mr. Macmillan: I hope that I can show that I was not out of order. I was referring to the definitions which come

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within the Regulations. There is a number of references to medical practitioners, those in hospitals and so on. Apart from the fact that these are Home Office Regulations, one may think that this was the responsibility of the Minister of Health, and it is on this point of slight uncertainty that I was speaking. I hope that the hon. and learned Gentleman can give us information about this.
The problem is extremely difficult, and I hope that those concerned, and those who may not be so deeply concerned but read about the problem in the newspapers and so, realise that although the debate is initiated by a Prayer against the Regulations, it carries no implication of disapproval. I hope it will be realised that, in seeking this debate, my right hon. Friend was also putting forward evidence of our desire to make the Act work effectively.
11.2 p.m.
The Under-Secretary of State for the Home Department (Mr. Dick Taverne): I am sure that everyone, not only in the House but outside, will fully understand why this Prayer has been moved. It is not only that the right hon. Member for Ashford (Mr. Deedes) is entitled to move it, but he has performed a service in doing so, enabling a number of points to be cleared up. Some of the points I cannot answer at once because I do not have the figures, while I cannot answer others because I would be out of order in trying to do so. I must tell the hon. Member for Farnham (Mr. Maurice Macmillan) that the figure for 1967 is not yet available. The last figures are for 1966, which show an overall number of addicts of 1,349, of which 899 were heroin addicts.
The first question of the right hon. Member for Ashford dealt with the timing of the Regulations, a point raised by others. As the hon. Member for Cheadle (Dr. Winstanley) said, timing is very important, but I am not sure that the question of the definition is at all relevant to timing. Since the definition has been mentioned, I shall deal with it first. All that my right hon. Friend the Minister of Health said in Committee was that the definition would probably be based on the Brain Report, but he would be surprised if it followed it
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exactly. That is more or less the present position.
Of the four limbs of the definition contained in the Brain Committee formula—repeated administration, dependence, over-powering desire for continuance, and no medical need—the first three are in paragraph (2) of Regulation 1, and the fourth appears in paragraph (3) of the same Regulation. There are some very slight modifications, but, basically it is the Brain Committee formula. There is a slight difference in the new words "so dependent that", but it is not really a substantial departure from the Brain Committee formula.
However, the really important point is that the medical profession has been consulted on this definition, and the medical bodies are satisfied that the present wording is a realistic test to apply in clinical practice. That is an assurance which the House needs and can be given. If it should turn out in practice that this is not a satisfactory definition, it can be altered in the future.
As for addiction as opposed to habituation or dependence, about which the hon. Member for Farnham asked, this is a difficult question. The terms are somewhat loosely used in international parlance, and it would be a mistake now to try to clarify the point. We should be concerned solely with the definition contained in the Regulation.
The next question that I was asked was the obviously very important one about the Advisory Panel of Experts. I am glad to inform the House that this Panel is now in being. A leaflet was sent to all National Health Service doctors a few days ago (which is why right hon. and hon. Gentlemen may not yet be aware of it), which not only tells them about the effect of the Regulations but refers specifically to the doctors on the panels in all the different regional hospital board areas over the country.
I cannot say that in every single case there are four doctors, but in the majority of cases there are at least four doctors on such a panel. I think that the whole country is covered. It is not intended that these doctors should operate as a panel but that each doctor on the panel can be consulted by another doctor who needs advice. The list has been made

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available for doctors in private practice, and it has been made known in the medical Press that it is available for them. The very important feature of the panel has been seen to and, from that point of view, nothing has gone awry in the timing of the Regulations.
I was then asked about the occasional taker, and I agree with the right hon. Member for Ashford that it is desirable to know about these occasional takers. One has the recent rather unfortunate case in Crawley where there seems to be a number of people who are not yet properly addicted but have become occasional takers of heroin. The full details of those are not yet available, but we know that the speed of addiction varies in each case. However it is difficult to build up a geography of the kind that the right hon. Gentleman wanted to see, because we are not dealing with addiction but with misuse.
Obviously there are certain difficulties about making the misuse of drugs a subject for the notification procedure. Even if there were no ethical difficulty about notification, where it is simply a case of quasi misuse, it would be hard to force doctors to report all the cases of suspected misuse if no clinical condition was likely to be presented. It would be impractical for the central authority to confirm the large number of doubtful diagnoses that might come forward. A mass of formal reports based on suspicion might be more confusing than helpful. There is a difficulty about it, but any doctor who is in doubt about a case can consult either the central authority to see if an individual has been notified before or consult a member of the panel in his area.
Mr. Deedes: I assume that the doctor will be immune from any action that might be taken through inadvertently notifying someone who could prove subsequently that he was not an addict?
Mr. Taverne: Certainly.
Mr. Brewis: Is it not an offence to take cannabis, marijuana? Surely it should equally be an offence to take heroin without the question of addiction coming into force?
Mr. Taverne: I think the hon. Member is straying a long way from the Regulations. The offence is the possession of
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cannabis. It would be extremely unwise if we followed what, in a sense, is the American pattern of making the taking of certain kinds of drugs an offence. That would give no hope for the addict for treatment, and it would be going in the wrong direction.
Dr. Winstanley: On the same point—
Mr. Taverne: I will not give way, because I think we are straying from the Regulations if we move into that area.
I was next asked about the dangerous drug, methedrine. I must ask the House to await the advice which we are given by the Standing Advisory Committee on Drug Dependence. That Committee is considering this urgently, as the right hon. Gentleman the Member for Ashford knows. It is right that we should wait to see what advice it gives, because on this question advice differs. There are many people who think that to use the Brain Committee procedure, if I may so describe it, would be the wrong way to deal with methedrine. I do not know whether that is right or wrong, but I am sure this is a matter on which we must have expert advice. If amendment of the law is needed to deal with methedrine on the lines of heroin, obviously we would gladly consider an amendment of the law. However, we must wait for the experts to make up their minds first.
I was asked several times about the difficulties of enforcement. This is intimately tied up with the prescribing regulations. I cannot commit the Government to a definite date, but I can assure the House that these further prescribing regulations will be produced fairly soon.
Treatment centres in their various forms will be available when the prescribing regulations are brought in in the near future.
The question of tribunal machinery is important. We are considering the preparation of this machinery for enforcing both sets of regulations.
I was asked about confidentiality both by the hon. Gentleman the Member for Farnham and the right hon. Gentleman the Member for Ashford. This point was gone into in some detail in Committee. There is no intention of giving information about notification except to two kinds of person: first, the doctor who

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inquires and who shows the central authority that he has a professional interest in the case; secondly, the police who will need to take this information into account in their scrutiny of the chemists' prescription records. They are given information for this purpose and they will be given the information which comes to light through the notifications. We will also collect what other information we have about addicts from other sources for the purpose of research, but any access to records for research will be carefully controlled on undertakings to comply with the Official Secrets Act.
I was asked how far the patient will be told that he has been notified, as it were. This must be a question for the individual doctor to judge. Only the doctor can assess whether it would be wise to notify the patient. This must be left to the doctor.
I was asked: what will be the follow up on addicts notified by general practitioners? This depends on the drug. If it is heroin, the central authority will hope to encourage the transition to treatment centres by suitable approach to the doctor concerned. Some heroin addicts will be notified initially by the treatment centres. If it is not heroin, the doctor will be free to go on prescribing, even under the new régime, but the Regional Medical Officers of the Ministry of Health will keep in touch with doctors as they do now.
I was then asked by the hon. Member for Cheadle about Regulation 1(3)(b)(iv). As I understand it, this means that if it is the same doctor who has made the notification within a period of 12 months, he will not have to notify again, but that if it is different doctor in the same hospital, he will be required to notify.
The hon. Member for Galloway (Mr. John Brewis) asked me about action against pedlars. The notification scheme is not designed to assist the police to catch pedlars, but if new pockets of addicts come to light in areas where drug taking had not been thought to be a problem, the police will be alerted to the possibility of trafficking, but doctors would have professional objections against notification being used against
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trafficking whether by addicts or pedlars. We shall be in a better position to know, through notification, where some addicts are getting their drugs. The definition covers heroin and not methedrine, but the question of methedrine is now being considered.
I was asked by the hon. Member for Runcorn (Mr. Carlisle)—
Mr. Brewis: Before he leaves that point, may I ask the Under-Secretary whether methedrine could not be added very easily to the Schedule if the Committee recommended it?
Mr. Taverne: It would require a change in the law and could not be covered by Regulations. Only drugs covered by the Single Convention can be covered by these Regulations. Since the Single Convention of 1961 does not at the moment cover methedrine, it will require another change in the law.
I was asked by the hon. Member for Runcorn why the two Regulations could not be made at the same time, but these Regulations will be useful in providing us with much information even before the prescribing Regulations are ready.
I have already dealt with the question of whether a doctor will tell his patient. This is entirely a matter for the doctor.
I would like to agree with the final remarks by the right hon. Member for Ashford. These Regulations and the notification procedure will be extremely valuable to us because they will give us a lot of extra information which we do not have now. I can confirm that one benefit we hope to see is in cases where patients are going to different doctors. This will give us an extra means of control because it means that the patient who plays off one doctor against another will find that he cannot do so in future, in all likelihood. The moment one doctor notifies, he will be able to get information which a previous doctor has notified, and also the central authority will know.
The Regulations have been welcomed and represent a major step forward. They will shortly be followed by another set of Regulations which will make the general scheme effective.
Question put and negatived.

G.E.C./A.E.I. MERGER
Motion made, and Question proposed, That this House do now adjourn.—[Mr. McBride.]
11.18 p.m.
Mr. Stan Newens: The takeover of A.E.I, by G.E.C. is merely one of a spate of mergers taking place at the present time. This raises an important public issue, not only for those affected. There are also issues of wider national importance. There is general recognition today of the inadequacies and inefficiencies of many British enterprises and the need for modernisation and rationalisation certainly applied to A.E.I. Many private enterprises are failing the nation and if the Opposition devoted one-tenth of the time which they spend attacking public ownership to the waste and inefficiencies and failure to seize opportunities of private enterprise, the public's eyes would be truly opened.
I am therefore not opposed to rationalisation for modernisation or the improvement of techniques in the electronic industry, and therefore in A.E.I., but the benefits to the shareholders should not be the only criterion. I accept that there is a need to ensure the efficient use of capital, and this is measured in a capitalist society by profit margins, but there are two other vital responsibilities in rationalisation—first to the workers and second to the community.
The Government policy of supporting mergers and handing over rationalisation and modernisation to the "golden boys" of British industry, the most successful, go-ahead and ruthless captains of industry, does not ensure that responsibility to the workers and the community is covered. Mr. Arnold Weinstock, the chosen architect of the new A.E.I.-G.E.C. complex, undoubtedly has enormous energy, initiative and intelligence but his primary responsibility is to the shareholders and the merger's preliminary history has demonstrated this clearly.
This is just not good enough. Vast sums of public money are being spent to subsidise private industry at a rate, according to a recent T.U.C. document, of £2 million. According to The Times of 5th February, this year A.E.I, is expected to get £400,000 a year from Government payroll subsidies, including the
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regional employment premium for development areas of 30s. per worker per week and the selective employment premium of 7s. 6d. a week for each employee for providing 4,000 jobs in development areas.
In addition, the Government provide £5 a week for a man in training. I have not bothered to go into the investment grant entitlement and so on, but, short of giving the factories away, public generosity could hardly be greater. Public expenditure on this scale demands public responsibilities. I would prefer public ownership. I entirely support the creation of jobs in development areas, but it is idiotic to make people unemployed elsewhere to create these jobs, which could be created without that cost.
I make no apology for voicing my first concern about the effect on those made redundant. It is all very well for professional men to expect at the outset of their career to move around the country for promotion but, in the average case every redundancy may mean real hardship not only to the employee but to his wife and family if they are asked to move. We must remember that industry exists for man and not man for industry. It is much preferable to provide work near a man's home.
My second concern is the responsibility to the community. In my constituency, A.E.I. came to Harlow New Town to produce for profit. However, large numbers of houses were provided at public expense to enable the firm to recruit labour. It would be a vast waste if this were not taken into account, which means allowing for the effect on Harlow when any large closure is proposed.
We must also take into account projects which were under way in the research laboratory at Harlow. If they are not completed, effort and capital will be wasted. It may, of course, be more profitable for an individual enterprise to buy new methods on licence from abroad, but this is not in the national interest.
Again, I think that public responsibility is called for when one considers the grave danger that highly-skilled personnel, educated and trained with the British taxpayers' money, may be attracted to go abroad and add to the brain drain. However, the problem in my constituency at Harlow will, I admit,

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be comparatively small compared with that created at Woolwich, and of course there may be worse to come in other parts of the country for the employees of A.E.I.
Experience of this merger demonstrates the need for a national plan and public ownership of industry in which industrial democracy can be introduced and the workers and the community consulted about rationalisation. This would, of course, be the Socialist solution, and I make no apology for referring to it tonight.
In the absence of this solution, however, the Government have a responsibility to lay down a code of conduct for private industry when mergers occur. It should be axiomatic that workers and their representatives, local authorities and regional planning councils, should be consulted before closures and redundancies are settled.
Today the workers of Crompton Parkinson, of Chelmsford, were lobbying Members of this House. They first learnt of the intended closure of their factory from the Press. This is disgraceful, but it is almost the usual practice. Closures should be dovetailed into schemes for absorption of labour released, and there should be proper removal allowances, provisions for rehousing and travel allowances, etc., for workers who move.
Private industrialists—and in this case the new management of A.E.I.—should be made to face up to the full cost of rationalisation—the social cost—and recognise that they are fully responsible for the workers and the community before they chalk up gains.
There was not, in fact, proper consultation before the recent A.E.I. closures took place, although I confess—and I welcome it—that there appears to be some slight improvement in the firm's attitude towards the problems which have been created.
The Minister should, in my view, intervene to ensure that proper consultation takes place, not only in the future, but also that there should be some compensation made for the lapses which have taken place to date. If not, we shall create a Luddite attitude among workers. It is unrealistic not to expect people to
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fight for jobs just because the captains of dustry have adjudged it in the public interest that these jobs should be removed. We in this House will fight hard enough for our jobs at the next General Election, irrespective of what the captains of industry say, and I do not think we can criticise people outside the House for doing the same.
The Minister should recognise now that unless he takes action these mergers will certainly produce enormous resistance from all those affected, not merely the lower-paid workers but also the highly-skilled men and even those in executive grades who all stand to lose from the effect of mergers and rationalisation.
11.28 p.m.
Mr. Christopher Mayhew: The House should be grateful to my hon. Friend for raising this question, and particularly for the extremely effective manner in which he put the case for a national code of conduct to cover mergers like this in future. I think the points he made will get wide support in the House.
I should like to ask two questions of the Minister:firstly, whether the Government are prepared to work out and put forward a code of conduct; and, secondly, whether he will look at the practice in regard to industrial development certificates in this area.
We all know the policy of the Government on this point, but there are cases when it is quite wrong, in a situation such as exists in Greenwich where many industrialists wish to set up there and employ people, that they should be prevented from doing so by the Government. I should like an assurance from the Minister that if there is unemployment in that area—and we hope there will not be—it will not be caused in any way by the Government's refusal to allow employers who wish to go there and establish works to do so.
11.30 p.m.
Mr. William Hamling: I am grateful for the opportunity to intervene briefly to add one or two questions to those asked by my hon. Friend the Member for Woolwich, East (Mr. Mayhew). I am glad that my hon. Friend the Member for Epping (Mr. Newens) has seen fit to raise this subject tonight.

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The two questions to which I wish to refer concern the problems of older workers in Woolwich. I understand that some thousands of workers are affected who are no longer young workers. They are, therefore, people whom we do not expect to be able easily to travel about looking for other jobs. I should like an assurance from my hon. Friend the Joint Parliamentary Secretary to the Ministry of Technology that opportunities will be taken to ensure that the older workers particularly are looked after.
The other question to which I should like my hon. Friend to refer is the possibility of alternative employment. The announcement was such a shock and was so overwhelming for many people that they are very frightened that alternative jobs will not be easily found in South-East London, particularly when one bears in mind the nature of the urban development in that part of South-East London, which is old, Victorian and reminiscent of some of the older industrial parts of the country.
These are matters on which we have had urgent representations from our constituents, and I should like to think that the Government have these problems very much in mind.
11.32 p.m.
Mr. James Dickens: We are grateful to my hon. Friend the Member for Epping (Mr. Newens) for giving us the opportunity of making a short contribution to this vexed question which has grown up because of the recent G.E.C. decision to close factories at Woolwich. Sydenham and Harlow and the research laboratory at Blackheath.
I want simply to make two brief points. First, I very much hope that the Government will take seriously the proposition set out by some 76 hon. Members requiring a code of conduct for the private sector of industry for all those firms which are in receipt of Government money. In short, what we are saying is that with the cash goes social responsibility.
My second point is that we have to regard the G.E.C. closure at Woolwich especially as a textbook example of how not to do it. Even after an interval of a fortnight, we still do not know certain basic elementary details about the closure.
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We do not know in detail, for example, where all the workers live, the age distribution of the workers at Woolwich or Sydenham or, for that matter, their skills.
With a code of conduct, there must go from the Government a request to the private sector to prepare forward manpower plans for factory closures setting out precisely and in detail what alternative employment opportunities there will be within the enterprise. That is the only way to deal with the widespread rumours which are inevitable in a situation like this.
I was very disturbed, as, I think, many of us were gravely disturbed, at the implication behind a remark made a week ago last Monday by my right hon. Friend the Minister of State, Board of Trade, when he said that the regional economic planning councils had no say in commercial policy decisions of this nature. If that is so, it makes complete nonsense of regional government. I want the Government to give instructions to the regional economic planning councils that they have a right to prior consultation in all developments of this nature. I endorse all that my colleagues on this side of the House have said.
11.34 p.m.
The Joint Parliamentary Secretary to the Ministry of Technology (Dr. Jeremy Bray): We are grateful to my hon. Friend the Member for Epping (Mr. Newens) for giving us a chance tonight to go over this important question. As my hon. Friend has said, the changes at Harlow announced by G.E.C. stem from the general review of the structure of the organisation following the G.E.C.-A.E.I. merger. The change is aimed at a concentration of related activities in one location. This is expected to result in greater efficiency and increased competitiveness.
G.E.C. has told us that it is reviewing all A.E.I. activities at Harlow, as in other areas. The company has already decided to concentrate all its process control work at Leicester. This involves transferring to Leicester Harlow's process control work as well as the computer activities at Manchester and the system development unit at Knutsford. Harlow will become essentially the centre for scientific apparatus activities, involving mainly electron microscopes and mass spectrometers. It is

395
expected that the field will grow sufficiently to occupy most of the hourly-paid people at Harlow who were engaged in process control work.
The merger received the endorsement of the I.R.C. and the expected rationalisation and improved efficiency is generally accepted as serving the national interest. Indeed, when my rt. hon. Friend the President of the Board of Trade considered the proposal for this merger, although no details had been worked out it was clear that there would be some closures of factories and some expansions. Decisions on the utilisation of capacity are, of course, for the firm to take in the light of its commercial judgment, but G.E.C. gave assurances that as far as possible these closures, contractions and expansions would accord with the Government's regional policies. The announced reorganisation of the telecommunications group is in line with these assurances and will result in an increasing concentration of telecommunications work in the development areas.
Regarding the research and development centre in telecommunications at Harlow, I understand that the decision to run this down is based on the company's wish to rationalise its research effort with the large G.E.C. research centre at Wembley and research and development activities elsewhere. It is understandable how the company came to the view that the relatively small separate unit at Harlow employing about 120 people could not be justified as a separate exercise. From the country's point of view, we cannot afford to use scarce resources inefficiently in research and development, any more than in any other field. The reorganisation of research and development by G.E.C.—A.E.I. is, of course, a matter for the company, but, naturally, the Government are interested in seeing that our national resources are well used. It is the view of G.E.C. that the reorganised research and development effort will be as strong as, or stronger than, the separate efforts of G.E.C. and A.E.I.
To sum up the position at Harlow, out of the nearly 1,000 workers at Harlow it appears that perhaps 130 in the research unit and perhaps another 150 in other departments might become redundant, making a total of less than 300 in a
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labour force of about 1,000, and not taking any account of increases in other activities. I understand that the precise numbers cannot yet be finalised. This is against a background where the level of unemployment in the Harlow Exchange area in February was 1·8 per cent., compared with an average of 4·2 per cent. in Scotland, 4·3 per cent. in the North and 4·7 per cent. in Wales. In addition, the Board of Trade estimates that there are already 640 jobs in the pipeline for the Harlow area from schemes which have already received I.D.C. approval.
As for Government support, the Harlow factory is contributing to the production of a 1 million volt electron microscope which is the subject of an £80,000 research and development contract with A.E.I. This contract is linked to the pump priming manufacture of three units costing approximately £600,000 for N.P.L., the Atomic Energy Authority and the Science Research Council.
It is not known whether any premises will be vacated by G.E.C.-A.E.I. at Harlow, but it certainly would not be difficult to find alternative uses for any premises which became vacant. However, it is unlikely, to say the least, that the development of the new town will be affected by this redundancy at all, and I only wish that every industrial situation with which we have to deal had as few problems as that of A.E.I. at Harlow.
Mr. Norman Atkinson: Do I take it from my hon. Friend's earlier remarks that the electron microscope manufacture is to be removed from Trafford Park and will be given to Harlow at some subsequent date?
Dr. Bray: I am afraid that I cannot give any information on that, but perhaps my hon. Friend will write to me—or to the company, when, I am sure, it will endeavour to reply.
The Woolwich closure is a far more serious affair, resulting in the redundancy of 5,500 workers over a period of about a year. It was largely in pursuit of rationalisation in the telecommunications industry that I.R.C. gave its support to the G.E.C. bid for A.E.I. According to Press report, A.E.I. telecommunications lost over £3 million in 1966–67. The task

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was stated by Mr. Arnold Weinstock when he said:
"In order to remain in the telecommunications game we must get 50 per cent. more output with 5,000 fewer workers in the A.E.I. telecommunications factories."
The decision regarding Woolwich was for the company. It was fully aware of the current and future demands of the Post Office and the importance of meeting Post Office delivery and other requirements. The company will have taken these factors into account in the reorganisation of its telecommunication activities and in planning for adequate capacity to meet future Post Office needs.
But we must look beyond the needs of the Post Office. The industry will need to be increasingly competitive in the future both to gain exports and for home needs; and an adequate scheme of rationalisation is needed to achieve the most efficient production. This is of the highest importance for the industry.
The Woolwich factory is an old factory. There are new factories, under employed, in Scotland and the North-East. The Government have taken major measures, with the support of the Labour Party and the trade unions, to secure the growth of employment in development areas rather than in London and the South-East. I gladly acknowledge the understanding of this by the workers at Woolwich, as well as by their representatives in this House. We have recognised all along that this cannot be achieved without a measure of upset and inconvenience, and I would be the last person to minimise the effect of redundancy for the workers at Woolwich or anywhere else.
Efforts are being made to find a suitable occupant for the factory site. The Ministry of Labour has made arrangements to interview and register the workers affected and to give advice about alternative employment and training. My hon. Friend the Member for Woolwich, West (Mr. Hamling) was concerned particularly about the older workers, and my hon. Friend the Member for Lewisham, West (Mr. Dickens) about the proper registration of the workers and an analysis of their potential. I am advised that the sooner a timetable for the rundown can be agreed to, the sooner the Ministry of Labour will be able to get to work. If the present degree of co-operation continues, there is no reason why this work
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should not start very soon. I am sure that it is in the interests of the workers in Woolwich that the Ministry of Labour should be allowed to get to work as quickly as possible.
It is fairly easy to place skilled, semi-skilled and technical workers in other jobs. It is more difficult to place unskilled workers, especially the elderly. Nevertheless, if the redundancies are spread over a period of a year or so, the problem will be less severe than it otherwise might have been. The position is complicated, as my hon. Friend the Member for Woolwich, West said, by the nature of the urban surroundings of Woolwich. It is further complicated by the proposed development at Thamesmead. My right hon. Friend the Minister of State at the Board of Trade has already said that the Board of Trade would consider any application for industrial development certificates at Woolwich and Thamesmead from suitable London firms with strong ties in the area.
It would be foolish to minimise the problem of development in London and the South-East. There is great pressure for development, as my hon. Friend the Member for Woolwich, East (Mr. Mayhew) reminded us. The Board of Trade will be keeping a very close eye on the situation. There is no reason to believe that a situation in any way comparable with that in the development areas could conceivably arise in South-East London.
Mr. Mayhew: I am grateful for my hon. Friend's assurance that the Board of Trade is keeping an eye on this. Are we to understand that the Board of Trade has not set its face against a relaxation of its industrial development certificate system in this instance?
Dr. Bray: I would abide by the statement by the Minister of State at the Board of Trade that applications for industrial development certificates in Woolwich and Thamesmead from suitable London firms with strong ties in the area would be considered.
Mr. Mayhew: And no more than that?
Dr. Bray: It is really quite a lot. It has been reported that the possible closure of Woolwich was discussed by A.E.I. with the Greater London Council before there was any question of the

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take-over by G.E.C.; so it cannot be said that the take-over created difficulties of employment in Woolwich though it certainly would have brought them forward.
Many of my hon. Friends have signed an Early Day Motion regarding a code of conduct for mergers. The Motion affirms full support for the Government's regional policies as an instrument of full employment and economic growth, and notes the very considerable Government support for private industry in pursuing these policies. The Motion goes on to urge the preparation of a code of conduct applicable to all private firms in receipt of public funds, following discussions with the C.B.I. and the T.U.C. It covers a very wide field, stretching far beyond factory closures and manpower redeployment and includes transferability of pensions, equal pay, staff status for manual workers and company training policies. I assure my hon. Friends that that Motion is being earnestly considered by the Ministers responsible.
I fully appreciate the concern about this matter which is felt in the House and the country, but it is too sweeping and it does not help to talk of a lack of social responsibility in recent company mergers. I should make it absolutely clear, if it is not already, that the consequences of rationalisation and moving employment from areas where labour is generally scarce to areas where new employment is generally needed were fully appreciated and actively sought by the Government. There is a danger that, by speaking with two voices, the Government and Parliament—and my hon. Friends should not under-estimate their influence in this matter—we shall hold up and distort the pattern of social and industrial change the direction of which is generally agreed.
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It is right to make sure that no one can forget the social aspects of his actions in making major industrial decisions. However, we often find it easier to create bogies to explain the difficulties with which we are faced. But it is unfair and it defeats the objective which we are all seeking to label industrialists as socially irresponsible when what they are undertaking is the socially esssential task of modernising our economy.
Let us consider the genuine human difficulties and let us find better methods of working—and I agree that we have not found them all yet—and let us deal urgently with the immediate pressing problems with the vigour and confidence which are needed, but let us not hold up the socially and economically essential task of modernising industry. There are consultations on a wide scale among the many people involved. I am anxious that my hon. Friends should be fully involved and I am sure that I can rely on their co-operation to ensure that the best solutions are found.
Mr. Newens: Will my hon. Friend say clearly whether it is the Government's policy to press on industrialists the need for prior consultation, not only with the workers and their representatives, but with the regional planning councils and others, prior consultation and not merely the announcement of a closure when the decision has been made?
Dr. Bray: The importance of consultation is constantly stressed, but my hon. Friends have gone further than that in proposing a specific code of conduct. This further proposal is being considered by right hon. Friends and I ask my hon. Friends to await the outcome of that consideration.
Question put and agreed to.
Adjourned accordingly at twelve minutes to Twelve o'clock.

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

THE CASE OF ABLE SEAMAN FIELD
2.35 p.m.
Lord BROCKWAY: My Lords, I beg leave to ask the first Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government what sentence has been passed by court-martial on Able Seaman Cliff Field for desertion.]
The LORD PRIVY SEAL (LORD SHACKLETON): My Lords, Able Seaman Field was not tried by court-martial. He was tried summarily and sentenced to dismissal from Her Majesty's Service and 60 days detention. He will also be serving the 236 days suspended sentence arising from a previous court-martial conviction.
LORD BROCKWAY: My Lords, while I appreciate that reply and thank my noble friend for it, does he appreciate that I am not raising this issue on the ground of conscientious objection? This boy is an Amateur Boxing Association finalist. Is my noble friend aware that I am raising this Question on the ground of the repeated refusal of discharge by purchase? Could he say whether this boy's sentence before he is discharged, of 60 days and 236 days lost remission, means that he will be discharged before that long period is over?
Lord SHACKLETON: My Lords, I am certainly aware that Able Seaman Field is not a conscientious objector. He wished to leave the Navy in order to pursue his career as a boxer. Of the two sentences he is now serving, the 60 days relate to his last sentence, when he was tried summarily, and the 236 days are from a previous sentence, when he was
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court-martialled for an assault on his commanding officer at the time of his previous appearance before that officer. I am not quite clear what my noble friend is asking. I can only say that this man will have to serve his sentence, with such remissions as he may obtain for good conduct. It is true that he had hoped to be released from the Service at an earlier date in order to pursue his career. Later on there was a possibility of release on compassionate grounds, but they were not strong enough.
LORD BROCKWAY: My Lords, is this not a case of a boy of 15 joining the Service under pressure from his family, who have a record of service in the Armed Forces? Is it not the case that his father, who had long service in the Navy, is now in a condition of mental disturbance because of what is happening to his son? Is it not the case that his brother has offered to replace him? And is it not scandalous that boys of 15 should have to serve these long periods in the Services and that when they ask to get out they are repeatedly refused that possibility, even when they are prepared to purchase their discharge, but have to undergo these long sentences?
LORD SHACKLETON: My Lords, I have great sympathy with what my noble friend has said, and I would agree with him in the first of his cases. As to whether this is scandalous, may I say that the matter has to be looked at in the context of this young man's career. He did not ask to be released from the Navy until he was 21, when he was long past the age of being a boy and at a time when he might equally well have entered into a long engagement. I know that my noble friend is pursuing a fundamental issue, which we have already debated in your Lordships' House and which is now under consideration by my right honourable friend the Minister of Defence for Administration. In relation to the broad principle with which my noble friend is concerned, I can only say that it is being again considered.
LORD BROCKWAY: My Lords, I thank my noble friend for that reply.
BARONESS SUMMERSKILL: My Lords, apart from the other points that my noble friend has brought up—and I heartily agree with him on the question of principle—one aspect of the case is

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very disturbing. If my noble friend decided to discharge a man because he wished to be a boxer, would he not be creating a most curious precedent? Could he tell me what he is going to do with other boys who want to pursue perhaps more worthwhile professions and ask to be discharged?
LORD SHACKLETON: My Lords, I am grateful to my noble friend. My right honourable friend, of course, has refused to discharge this Able Seaman because he wanted to be a boxer. When I was in the Air Ministry I was once asked to release a very successful "pop" group. In both of those cases the men concerned might earn foreign exchange, but that would not be an adequate reason. It is simply because it would create an undesirable—in fact, an unacceptable—precedent that we cannot single out one career which might have to be postponed. Many of these young men, when in the course of their training it becomes apparent that the Navy or Army is not for them, are allowed to go. The effect of Able Seaman Field's actions is that he will be released from the Service slightly later than he would have been if he had waited for the ordinary procedure to operate.
VISCOUNT ADDISON: My Lords, could my noble friend say whether these two sentences are to be served concurrently or consecutively?
LORD SHACKLETON: My Lords, the 60 days is the more recent award of punishment and, as always happens in the case of somebody under suspended sentence, the remainder of the suspended sentence will be served, but there is a prospect of remission in the light of good behaviour.
LORD BROCKWAY: My Lords, may I ask whether it is not the case that Able Seaman Field has now 60 days to do plus the 236 days' lost remission? In view of this complicated situation, would my noble friend inform us when it will be possible for this man to obtain remission and to obtain the discharge that he has been seeking ever since he was 21 years of age?
LORD SHACKLETON: My Lords, as a quick calculation—it was 236 days—I make it that, with full remission, he will
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serve a combined total of 198½ days. However, I should not like to be bound absolutely by that quick calculation. I cannot state the exact date that he will be released because it will depend on whether he earns remission. If the noble Lord wishes me to give an estimate of it, assuming that remission is earned, I will try to do so. But it will not be an official figure, because it is bound to be hypothetical.

RAIL CLOSURES
2.43 p.m.
THE EARL OF KINNOULL: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government why they are not prepared to suspend all withdrawals of rail services and closure of stations until the Transport Bill has received the Royal Assent.]
LORD HILTON OF UPTON: My Lords, the Government's aim is to stabilise the rail network as soon as possible so that the new policy embodied in the Bill can have its full effect. Whore the customary detailed examination of a closure proposal indicates that consent is the only possible conclusion, it is clearly right that the decision should be implemented as quickly as possible.
THE EARL OF KINNOULL: My Lords, I thank the noble Lord for that reply. Would he not agree that certain lines at present under the threat of closure could be reconsidered under Clause 36 of the Transport Bill? Is it not therefore totally unfair to allow these closures to proceed?
LORD HILTON OF UPTON: My Lords, full consideration is given to the railways, as indicated in the noble Earl's supplementary question. The Minister, in considering closure proposals, can, and does at present, take full account of the possibility of grant.
THE EARL OF KINNOULL: My Lords, with respect to the noble Lord, I do not think this can possibly be so, because under the clause a new grant is provided—a power which at present the Minister does not have.
LORD REA: My Lords, may I ask the noble Lord whether the Answer to the Question as printed on the Order Paper is: "Yes; they are not prepared"?
LORD HILTON OF UPTON: My Lords, if the noble Lord would like me to repeat the Answer, I would gladly do so, but I think he has the gist of it.

U.S. IMMIGRANTS AND VIETNAM WAR SERVICE
2.47 p.m.
LORD BROCKWAY: My Lords, I beg leave to ask the second Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether residence and work permits will be given, in accordance with this country's liberal tradition of political asylum, to Marc Floyd Ellington and John James, American citizens and conscientious objectors to military service in Vietnam.]
THE MINISTER OF STATE, HOME OFFICE (LORD STONHAM): My Lords, as I explained in reply to a Question by my noble friend on January 30, a conscientious objection to military service is not, in general, a ground for political asylum, nor is it, in itself, a ground for refusing admission or enforcing departure. Consideration is given, in the light of normal immigration policy, to proposals, including proposals for employment, submitted by foreign nationals as a basis for stay in this country. This has been explained to Mr. James, who has been granted an extension of stay until March 12, to give him an opportunity to submit such a proposal. Mr. Ellington's present permitted stay as a visitor expires in three weeks' time, but it is open to him to submit a proposal as a basis for extended stay.
LORD BROCKWAY: My Lords, is my noble friend aware that I appreciate that, under the limitations of the decisions, an extension has been granted to these two boys? Is he aware that these boys are sincere conscientious objectors? Further, is he aware that they are both artistes, very sensitive to cruelty in the world? May I ask my noble friend, in view of the fact that we treat those who escape
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from South Africa and from Communist countries as political refugees, whether he will extend the principle of refugees to boys who, for the deepest conscientious objection, are unprepared to undertake military service?
LORD STONHAM: My Lords, I cannot do what my noble friend has asked. We cannot regard these boys as political refugees. An applicant for political asylum must establish that he has a well-founded apprehension of danger to life or liberty or persecution of such a kind as to render life insupportable on racial, religious, national or political grounds, and the possibility of the imposition of a fine or imprisonment for breach of his country's laws would be regarded as punishment and not persecution.
LORD BROCKWAY: Really, my Lords! Is my noble friend aware that these boys would be liable to a sentence of five years imprisonment for refusing their service in Vietnam on the ground of conscientious objection? In view of our own liberal attitude towards conscientious objectors, cannot the Government take the liberal attitude in international affairs of recognising that they have the right of asylum in this country?
LORD STONHAM: My Lords, I think I have made the position perfectly clear.
SEVERAL NOBLE LORDS: Hear, hear!
LORD BROCKWAY: Very badly.
LORD STONHAM: We cannot interfere with the nationals of another country, or interfere in another country's laws. One of these boys, for example, has had his case heard three times in his own country before he left the country, the third time in the High Court of Justice. It is quite impossible to do as my noble friend suggests. But in every case, including these two cases, we generously apply the rules applicable to all foreigners who apply for permission to enter; and both these boys can have their cases considered for a continued stay if only they will put them forward.
LORD BROCKWAY: My Lords, may I give notice to my noble friend that I will raise this matter again at the earliest opportunity?
LORD DERWENT: My Lords, before the noble Lord replies, may I ask

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whether he is aware that many of us on this side of the House are very glad to hear that the Home Office continue to make no differentiation between one alien and another who wish to come here?
LORD STONHAM: My Lords, I think that cases of this general kind should be dealt with—and I do not like to deal with individual cases—in the full knowledge of all the facts; and I very much welcome the suggestion of my noble friend that he will raise this matter again so that it can be fully dealt with and the arguments fully explored—not in this way of question and answer, when we can have only a wholly incomplete picture. I would also say that my Department has dealt with all these cases with the utmost sympathy and has leant over backwards to be helpful. But we cannot interfere with the laws of another country.
LORD FARINGDON: My Lords, is not the practice here, in the ordinary course of events, not to exercise against the nationals of a foreign country who have taken refuge here, laws which are repugnant to us in this country?
LORD STONHAM: My Lords, this is another example of how difficult it is to answer part-questions of this kind. If we have a discussion on this subject it will be possible fully to deploy any differences that may exist between this country and another.

GENERAL HACKETT AND N.A.T.O. OFFICERS' OBLIGATIONS
LORD WIGG: My Lords, I beg leave to ask the Question which stands in my name of the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether the pay of General Hackett is borne on Ministry of Defence Votes; whether he is subject to the provisions of the Army Act; and if so whether he is required to comply with the provisions of paragraph 680 of the Queen's Regulations.]
LORD SHACKLETON: My Lords, General Hackett is Commander-in-Chief, British Army of the Rhine, and at the same time Commander, Northern Army Group. His
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first appointment is national, his second international. In accordance with long-established practice, General Hackett's pay continues to be borne on Ministry of Defence Votes. As a serving officer, General Hackett is subject at all times to the provisions of the Army Act. In his national capacity he is required to comply with the provisions of paragraph 680 of the Queen's Regulations for the Army; but as Commander, Northern Army Group, he is subject to established NATO procedures.
LORD WIGG: My Lords, may I express gratitude to my noble friend for the fullness of his reply? Is he aware that it will give general satisfaction to al those who are concerned with the democratic way of life that officers and other ranks serving in Her Majesty's Forces are at all times required to be subordinate to the civil authority, and that statements concerning matters of political moment should be made only by Ministers, or made under their authority?
May I now turn and ask my noble friend a question about General Hackett's relations to NATO Command? Is my noble friend aware that if the same principle as applies to British forces is applied to NATO, it would have been incumbent on General Hackett to have sought permission from the Secretary-General of NATO? Was such permission sought? If not, what protestations were submitted to the British Government through our NATO Ambassador by Signor Brozio? If General Hackett did not consult Signor Brozio, did he seek permission from General Lemnitzer, SACEUR; and, if he did not, why did he seek to obtain authority or permission from General Graf Von Kielmannsegg, remembering that he is a Federal Commander and subject of the West German State, and it so happens that the contents of General Hackett's letter coincided with the views of the German Government?
LORD SHACKLETON: My Lords, I will try to deal with the interesting and important questions my noble friend has asked. First of all, I entirely agree—and I am sure all of your Lordships will agree—that it is a fundamental principle of our democratic approach that the military should always be subordinate to the civil power. The noble Lord then asked me a number of particular

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points as to the dealings that went on within NATO in regard to this particular incident. The fact that General Sir John Hackett's views coincide with General Von Kielmannsegg's views is not very surprising, since they also coincide with the views of Her Majesty's Government. But that is not the substantial point my noble friend is making, which relates to the procedure and whether in fact the permission or the agreement of Signor Brozio had been obtained, or whether he had been consulted. I can only say that, so far as I know, he was not consulted, but I do not know whether he is making any representations on the subject; if he had done so, I think they would almost certainly have been confidential. It would appear, from what the noble Lord has suggested, that there is an area to which my right honourable friend the Secretary for Defence is giving active consideration, and that is whether in regard to NATO procedures these matters of authority for making published statements—however desirable those statements may be—may need further examination. But I think it would be inappropriate for me to go further, beyond saying that I will see that my right honourable friend is aware of the noble Lord's views, and I have no reason to suppose there should not be some substantial agreement.
LORD WIGG: My Lords, I am much obliged to my noble friend.

GIBRALTAR
THE EARL OF BESSBOROUGH: My Lords, I beg leave to ask a Question of the Government of which I have given them Private Notice: namely, Whether they will make a Statement on the reopening of negotiations with Spain over Gibraltar.
LORD BESWICK: My Lords, my noble friend Lord Chalfont will be making a Statement, in answer to this Question, at a convenient moment after 3.30 p.m.

PORT OF LONDON BILL [H.L.]
Read 2a, and committed to the Committee on Unopposed Bills.
ALL SAINTS, STREATHAM BILL [H.L.]
Read 2a, and referred to the Examiners.

CHRIST CHURCH WITH SAINT ANDREW AND SAINT MICHAEL, EAST GREENWICH BILL [H.L.]
2.58 p.m.
THE CHAIRMAN OF COMMITTEES (THE EARL OF LISTOWEL): My Lords, I beg to move that this Bill be read a second time.
Moved, That the Bill be now read 2a.—(The Earl of Listowel.)
LORD FARINGDON: My Lords, this Bill and the previous Bill are two of a very large number of Bills which are on their way to your Lordships' House. They all deal with the destruction of churches and the secularisaton of churchyards. I suggest to your Lordships that these Bills are extremely difficult to deal with. We have had a number of them, and I have myself opposed at least one in the past. I find that it is very difficult to know exactly what are the pros and cons of these Bills even when, as I have, one has read the Bill. For example, I think there is no indication in the Bill that is before us at the moment of the age and antiquity of the church. I suggest that in these cases it is very important that this House should be alert on two grounds. The first is defence of architectural monuments of importance; that is to say, the churches themselves. Also, from the amenity point of view, these are, so far as the churchyards are concerned, open spaces. There is a natural tendency for the older churches and churchyards to fall victims to this particular treatment; in other words, to their secularisation. It is because they are ancient that they are likely to be situated in areas where there is very little open space and where even a "pocket handkerchief" of open space is immensely valuable. Unfortunately, they are also immensely valuable in the property market.
I am not opposing this Bill, but I am entering, if I may, a caveat against the too easy passing of these Bills by Members of your Lordships' House. I know

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there are other Members of the House who are interested in this and are disturbed by this process. These two Bills before your Lordships' House are not the only Bills dealing with churches; there are seven more Bills of this kind which are taking their place in the queue. I believe these Bills should not be passed without more extensive inspection than they receive nowadays. I hope they will receive such attention this afternoon, and also in the future.
THE EARL OF LISTOWEL: My Lords, I think we are all aware of Lord Faringdon's continuing interest in the problem of the use and disposal of land released by changes in the structure or condition of churches and churchyards, and these problems are, of course, often raised in Private Bills. I was glad that the noble Lord said he did not wish to oppose the Second Reading of this Bill because, as your Lordships are aware, the usual practice of this House is to give the Bill an unopposed Second Reading so that it may be sent to an Unopposed Committee of this House, and the question of whether it is opposed or not will arise when it is returned to your Lordships for Third Reading. I can assure the noble Lord that his remarks will be carefully considered by the promoters as well as by everybody else concerned with the Bill.
LORD AMULREE: My Lords, I should like to say how much I support what the noble Lord, Lord Faringdon, has said. I did not intend to speak on this subject this afternoon, because I have an Unstarred Question down for next Tuesday dealing particularly with open spaces in London, and I had proposed to raise this matter at that time. But I certainly agree with every word spoken by the noble Lord, Lord Faringdon.
LORD MITCHISON: My Lords, without taking up your Lordships' time, I should like to say that I entirely agree with what the noble Lord, Lord Faringdon, has just said. I used to have a constituency which contained the oldest church in the country, the maintenance of which was a continual "headache", but that is another story.
On Question, Bill read 2a, and referred to the Examiners.

LOCAL GOVERNMENT BILL [H.L.]
LORD MERTHYR: My Lords, I beg leave to introduce a Bill to remove doubts concerning the powers of county councils to make certain grouping orders; and for matters connected therewith. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read 1a.—(Lord Merthyr.)
On Question, Bill read 1a, and to be printed.

MAURITIUS INDEPENDENCE BILL
3.5 p.m.
LORD SORENSEN: My Lords, I beg to move that this Bill be now read a third time.
Moved, That the Bill be now read 3a.—(Lord Sorensen.)
LORD FARINGDON: My Lords, I apologise to your Lordships and can only claim that you do not often have to listen to me, and I beg you to make that an excuse for listening to me yet a third time to-day. I have been brief on the previous occasions and I will be on this, but I feel I cannot let this occasion pass without a word, as I have for many years had the privilege and pleasure of the friendship of the Prime Minister of Mauritius, Sir Seewoosagur Ramgoolam.
I think Mauritius is extremely fortunate in having Sir Seewoosagur as its Prime Minister. He has shown immense patience and skill in negotiating with Her Majesty's Government. I know that this Bill goes forward with the support—and indeed the enthusiastic support—of all Members of both places in this Parliament. Sir Seewoosagur is particularly conscious of the great difficulties—and do not let us minimise them—which face the newly formed State. Its two greatest troubles are those with which the Prime Minister has done his best to deal in the past and will deal in the future—that is to say, over-population and racialism. It seems a curious thing to say, but I think the recent troubles in Mauritius have shown in a most

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encouraging way the non-racial attitude not only of the Prime Minister but also of the Leader of the Opposition, Monsieur Duval. Both those politicians have shown themselves, if I may put it this way, to be statesmen, and I think Mauritius is lucky in having them to guide her future career. I said I would not detain your Lordships, but I feel this tribute ought to be paid by those who have had the privilege of the acquaintance of the Prime Minister of Mauritius and who have, as I have, the greatest admiration for him.
LORD OGMORE: My Lords, as the noble Lord, Lord Faringdon, has opened a discussion on the Third Reading of this Bill, my noble friends and I feel it is only right that we on these Benches should express our best wishes to Mauritius for a happy and successful future. There has been a long association between Mauritius and ourselves and we feel it is only right that all Parties in the House, and those who sit on the Cross Benches, should express their good wishes at this time.
There are two matters which I feel the Government should consider carefully in their future relationship with Mauritius. The first is that Mauritius depends on us to a large extent for her economic well-being. The Commonwealth Sugar Agreement is of vital importance to her, and undoubtedly in the past it has meant a great deal for the Mauritian economy. As Mauritius virtually has a one-crop economy this Agreement is of tremendous importance, and I hope that in future, as she will now be an independent member of the Commonwealth, instead of being a Colony, the good will of the British Government, whatever Party happens to constitute it, will be afforded to the island.
The second point is that undoubtedly in some way we shall be responsible for the defence of Mauritius. At the present moment I gather we have a battalion of troops there—the King's Shropshire Light Infantry—owing to the internal difficulties which have happened there in the last few months, and I believe it is proposed that those troops should remain there for some time—how long a period, I do not know. There may, of course, be aggres-
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sion from outside, as well as internal difficulties. I think this points to the conclusion that some of us have long come to: that the British Government's policy in reducing the Regiments of the Line is a fantastically stupid one. This is not a defence debate and I will not pursue the matter at any length, but it adds one more example to the claim that I and others have put to this Government, that to spend vast sums on Polaris submarines and their equipment, to continue the nuclear (so-called) independent weapon and to cut down the conventional forces, particularly the British infantry, which it will be impossible to replace when once they are gone, is a policy which cannot but be detrimental to the country.
I would therefore ask the Government once more to look again at this policy and not to cut down the Regiments of the Line, because not only do we need them here in this country but we shall need them in Mauritius and elsewhere; it is quite obvious to-day that law and order could not be maintained in Hong Kong or in Mauritius and various other parts of the world if it were not for the British Regiments of the Line. In those circumstances I repeat my request to Her Majesty's Government to save our old regiments. These are two of the matters which I think arise on this Third Reading. I have no other matters to raise at this time, and therefore I would conclude by once more wishing Mauritius every possible success in the future.
On Question, Bill read 3a.
LORD SORENSEN: My Lords, I am sure that all Members of this House appreciate the good wishes that have been expressed by the two noble Lords to supplement those that were expressed on the previous occasion, and I am sure, equally, that the people of the new independent country of Mauritius will appreciate the sage remarks made by both noble Lords. As for the reference to the Regiments of the Line, I am utterly incompetent to deal with that matter, but I will certainly see that it is passed to the appropriate quarter. My Lords, I beg to move that this Bill do now pass.
Moved, That the Bill do now pass.—(Lord Sorensen.)
On Question, Bill passed.

LOCAL AUTHORITIES' DIRECT- LABOUR BUILDING DEPARTMENTS
3.12 p.m.
THE EARL OF KINNOULL THE EARL OF KINNOULL rose to ask Her Majesty's Government whether they are satisfied with the commercial and financial practice adopted by the direct-labour departments of local authorities and whether these contribute adequately to the national economy. The noble Earl said: My Lords, the subject of direct-labour departments of local authorities, their work and their cost to the community, raises, I appreciate, a fairly wide avenue for an Unstarred Question. I am particularly glad to see that my noble friend Lord Brooke of Cumnor and other noble Lords intend to take part in this short debate, as well as the noble Lord, Lord Kennet, for the Government. Perhaps I should say at the beginning that there are a great many differing and varying services that the direct-labour departments provide for the community, and some of them, such as street cleaning, refuse collecting and sewerage are thankless tasks carried out often under difficult conditions by a loyal and in many cases underpaid staff. All of us, I am sure, would wish to pay tribute for those services.
The purpose of my Question to-day is to draw the Government's attention to the widespread concern that is felt about the work, the productivity and the efficiency of the direct-labour building departments of local authorities, handling both the maintenance work and the new construction work; for it is these departments which, week by week, absorb so much of our national and local resources and which almost week by week are shown by one report or another to be almost squandering public funds through inefficiency. Yet despite the cases we read about, despite the recommendations on cost control by the District Auditors Society, and despite the recommendation by the Prices and Incomes Board, in their Report No. 29, on more work study leading to greater productivity, the Government appear to have shown a singular lack of leadership in seeking ways to improve the efficiency of these departments. I hope to-day that the noble Lord, Lord Kennet, will be able to tell us what positive plans they have for the future.
As the House will be aware, by far the biggest proportion of work handled by the direct-labour building departments is concerned with repair and maintenance work. In fact, I believe I am correct in saying that out of the 178,000 men employed by the 1,300 local authorities in the direct-labour building departments four-fifths of them, or 138,000 men, are engaged in maintenance, and only one-fifth, or 28,000 men, are employed in new construction work. When one examines the productivity figures and the cost figures of those maintenance departments, the general picture appears that the departments are being run far too often on the principle of low wages and low productivity. The noble Lord, Lord Kennet, will, I am sure, have far more facts than I have been able to glean on this point, but I am sure he would agree that the scope for improving the management and the productivity of those departments is enormous. The Prices and Incomes Board highlighted this in their Report No. 29, and they strongly recommended that more work studies should be carried out; and not only that body but the District Auditors Society as well came out in favour of stronger cost control. But I think I am right in saying that, despite those recommendations, the progress towards more work study and towards bonus incentive schemes is proving very slow.
I am told that over the past ten years only one-quarter of the local authorities have instituted work studies and bonus incentives, often with the help of management consultants, and the results of those studies coupled with incentives have been a truly remarkable and astonishing increase in productivity, ranging from 60 per cent. to 100 per cent. Yet, despite that staggering saving, and with the evidence that incentives clearly increase productivity, again it is a remarkable fact that only 16 per cent. of the entire direct-labour department staff are at present on such incentive schemes.
The enormous slack that can Le taken up in maintenance departments following work studies and incentives can best, I think, be demonstrated by the actual savings that have taken place in various local authority areas. In Norwich City, for instance, over £40,000 was saved within one year following a work study and a resulting management planning and

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budgetary control service. In Slough, I am told, over £100,000 has been saved; in Grimsby £68,000; in Cardiff £100,000; in Wolverhampton £60,000; in Nottingham £90,000. To many of these local authorities this can represent up to 6d. on their rates. All these examples, and the many more examples I could quote, prove, in my opinion, the urgent necessity to persuade local authorities to examine their maintenance departments by work study without further delay and to stop the waste of national resources.
I consider that the Government themselves should take a leading part in this matter. One is aware that the Government set up the Mann Committee to examine maintenance departments, and perhaps the noble Lord, Lord Kennet, when he comes to reply can say when he expects the Committee's Report to be published. The policy adopted by many of the local authorities in placing a very low percentage, in some cases no percentage at all, of maintenance work to outside contractors is, I believe, a policy that should not be encouraged when the management and productivity of direct-labour departments is so much in doubt.
May I turn briefly to the new construction work of the direct-labour departments? The record of these departments in recent years is even more unhappy than that of the maintenance departments. The House will be aware that the direct-labour departments employ about 26 per cent. of the total labour force in the new construction industry, yet their productivity contributes only some 14½ per cent. of the national productivity. Despite this, the Government have never disguised their encouragement to local authorities to increase their share of new construction work and in a circular, No. 50/65, have even issued a directive absolving local authorities from obtaining any outside competitive tenders. They followed this up in 1966 by announcing that direct-labour building costs were proving cheaper per square foot than outside contractors' costs. This has always been questioned.
But despite this optimism on the part of the Government, we have witnessed in the last two years an increasing number of failures by direct-labour departments of local authorities. In the well known
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case of Salford City, where the costs escalated by some £700,000 above the original estimates, we learn that 33 out of 40 separate contracts given to the direct-labour departments have exceeded their original estimates. We learn also, with regard to this case, that the root cause of the trouble lay in poor management, poor budgetary control and poor productivity. As the House will know, the result of the inquiries led to the closure of this department, and in other cases where investigations have been carried out—in Southwark, Camden, Coventry, and in Wolverhampton—we have seen overspending on the original estimates as high as 30 per cent.
With all this recent evidence, are the Government really still satisfied that their Circular 50/65 is in the best national interest? The method the direct-labour departments adopt for estimating the new work has been under fire for a considerable time, both from the outside contractors, their competitors, and also from the District Auditors Society who consider that the on-costs have never been carefully enough taken into account. I hope that when he comes to reply the noble Lord, Lord Kennet, will be able to say what action, if any, the Government intend to take to see that the direct-labour departments' estimating procedures are improved.
The policy of outside tendering in competition with direct-labour departments has also been the subject of debate for some time, and the Banwell Committee examined this in great detail. The House will recall that this Committee came down in favour of negotiated tenders or selective tenders from contractors they already knew—suitable contractors. I suggest that this question of direct-labour departments of local authorities is a subject of tremendous concern, and to-day I hope that the noble Lord, Lord Kennet, will be able to advise us what steps the Government intend to take to try to improve the efficiency of these departments so that they may contribute more adequately to the national economy.
3.25 p.m.
LORD FISKE: My Lords, I am sure that this is a subject which will be debated here with knowledge and with skill. I am sure that we are all grateful to the noble Earl, Lord Kinnoull, for the way

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in which he has introduced this matter this afternoon, because so often the subject of building by direct labour can become a political shuttlecock between the champions of private enterprise, on the one hand, and the champions of public enterprise on the other.
I want to suggest to your Lordships that this is not enough. What we really need is an assessment of building by direct labour in our society: what are its advantages, what are its disadvantages, what are its limitations, and what are its possibilities. I think this is not perhaps the easiest of moments at which to discuss this subject, because in the whole field of local government we have to await the Report of a Royal Commission whose findings its would be wrong for anybody to try to anticipate. If by any chance the Royal Commission should come down in favour of larger units in local government, then of course the case for building by direct labour would be that much strengthened, because I think it is the size of the local government unit that can often decide whether a direct-labour department is a viable proposition or not. For example, first, the larger authority can so arrange its work that there is continuity of work for the direct-labour department—surely the most important part of all—and, secondly, by reason of its size, it can secure a better management structure both in salary and therefore in calibre.
I should like to pause for a moment to consider this question, because one of the great handicaps to direct-labour building by local authorities is the fact that none of the opportunities that are open to a private trading organisation is open to a local authority, for the simple reason that the salary of its chief operatives must be fixed within the scale of salaries of officers of local authorities. Nor has a local authority the power to dispense any of the fringe benefits which can be done in the private sector. This has a great effect on management calibre and, as I shall hope to show shortly, on the size to which the organisation can grow and the complexity of work that it can undertake.
There is one more thing that I want to refer to, which I think is most important. It is that the direct-labour organisations that I know carry out their full part in the training of apprentices.
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This, within the building industry, is something of supreme importance. If we do not train apprentices we must not complain of bad or shoddy workmanship. It is up to the local authorities—and I think they are doing this—to set an example to the building industry as a whole, to see that the proper quota of apprentices is trained. I have noticed that in the last twelve months the apprentices' register for the year ended December, 1967, showed a figure of 13,839, whereas that for the twelve months ended in December, 1966, was 16,369. So it will be seen that there is a considerable fall in the training of the next generation of building operatives. This, I think, is one of the most important activities that a direct-labour department should indulge in.
As I see it, the great disadvantage of direct labour is the impossibility of its always—I stress "always"—going to tender, unless it is also to be allowed to tender for work outside the province of the authority's own work. I underline "always" because I believe that any direct-labour department should from time to time put itself to the test with its competitors, to make quite sure that the whole of its organisation is competitive as well as being publicly owned. Such a course ensures that the quantity surveyors, the accountants who look after the building accounts, and the critics, are on their toes. In a field of productivity which takes place in the full blaze of Press and public watchfulness, direct labour must be seen to be more economical and of benefit to the ordinary ratepayer.
Should it have limitations? This is something which your Lordships will wish to consider very carefully. The noble Earl referred to its work in the maintenance of a council's corporate estate. This is a very valuable contribution to the public work. In the authority which I know best, there is a permanent force of some 7,000 men who are responsible for maintaining and repairing something like 250,000 dwellings. They do this as permanent employees of the authority, pensionable with the same sickness rights, and so on, as anybody else employed by that authority. This must be seen as a great improvement in the terms of employment which normally obtain in the building industry as a whole.

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There is another great sphere of activity in which I believe that direct labour can be very usefully employed, and that is where it is virtually impossible to give an estimate unless it is heavily weighted. I will illustrate what I mean by that. Before the war, in the Mile End Road, in Stepney, there was a very well-maintained estate of 24 almshouses and a chapel, maintained by Trinity House for (the inscription says) "decayed mariners". At the end of the war that group of almshouses, built about the time of Wren, was a bombed ruin, and a decision had to be taken as to whether it should be swept away with a bulldozer, or whether it should be restored to become a useful addition to the housing provision in that part of London. The second decision was ultimately taken.
No ordinary contractor would have dared to give an estimate for this job unless it had been extremely heavily weighted, so heavily weighted, in fact, that the authority would probably have been unable to accept it. By giving it to the direct-labour department, however, it was possible to do several things. It was possible to restore those almshouses to their previous glory; it was possible to provide housing at economic rents to people who found themselves, for social reasons, working in Stepney, so that it has never been a burden on the ratepayer; and it gave unique opportunities to train the building authority apprentices in work which they would never otherwise have seen. To my mind, these were worthwhile objectives which went towards restoring what is now a unique and very pleasant corner of what used to be the Borough of Stepney. I consider that direct labour is eminently suitable for that sort of work.
We then come to new work. It is in regard to new building work that we have to think of limitations, since so much new building work employs not only builders but many other professions and skills. It also involves very expensive and seldom-used plant, and it may be that new building undertaken by direct labour should be confined to new building that falls within the scope of an ordinary builder and is not the sort of work usually undertaken by a large-scale contractor. But, with that limitation, it is fair that the direct-labour departments should have some new work, so long as they can
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prove to the authority, and through the authority to the public at large, that, taking one job with another, they can do it as cheaply as, or cheaper than, the private contractor would do it. Public accountability and eternal vigilance are essential requisites to public enterprise of any kind, and perhaps in this sphere they are more essential than ever. But I am sure from my own experience that if this is done there is a great role indeed for direct-labour building.
3.35 p.m.
LORD NUNBURNHOLME: My Lords, may I crave the indulgence of your Lordship's House if I read my speech, for the sake of accuracy? The Tenterden Rural District Council, in whose area I live, have been practising building by direct labour since 1946. I am very grateful to the Chairman and officers of this Council who have readily made available the following information which I feel will be of interest to your Lordships.
The Tenterden Rural District Council is a small authority, which has a penny rate product of £830, and administers a population of 8,000. The Council has built houses by direct labour successfully over a period of 22 years, completing a total of 286 houses, fiats and bungalows. Direct-labour contracts at present in hand consist of 24 bungalows and 8 houses. The direct-labour department carries out maintenance and repair of over 800 properties and also is carrying out major improvements and extensions to pre-war houses. Cost of building has been reasonable and tenders have always been lower than those of outside contractors. The following figures of actual cost confirm this.
In 1966, 12 3-bedroomed houses were completed at a cost of £1,860 per house. In 1967, 19 bungalows with central heating and other amenities for old people were completed at a cost of £1,935 each. This year the latest direct-labour tenders for one-bedroomed bungalows to Parker-Morris standards are £2,100 each, and for three-bedroomed houses to similar standards at £2,770 each. This latter price compares favourably with the Ministry's cost yardstick of £3,008 per house. This may seem a large increase on the 3-bedroomed houses over the 1966 figure, but one must bear in mind that the new 3-bedroomed houses are built to

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a higher standard, which also includes central heating. Direct-labour building bears its proper apportionment of salaries, architects' fees and administrative costs, and overheads on wages, stores and tools, and these facts are carefully checked by the district auditor annually. The Council is satisfied that the workmanship is of a high standard. This is shown in the repairs account, and is also due to the fact that the same workmen who build the houses also have to maintain them, and often live in them. There are both good and bad builders, and this can apply to housing authorities; but it is certain that the strict financial control and supervision of local authorities and the penalties attached to both officers and councillors must, in the long run, keep them on the right path.
If any of your Lordships are interested in further details of costs et cetera, or in seeing what this very small Council has achieved, the Chairman and officers will be delighted and proud to show them what the Council is doing. In conclusion, my Lords, I feel that the facts and figures quoted indicate the desirability of the employment of direct labour in council building. The saving of costs in this authority appear to be at least 10 per cent. However, it is essential to have very accurate planning and programming of work. Also, good supervision is a "must". Certainly I would stand up for the small authorities' being allowed to continue using direct labour.

GIBRALTAR: TALKS WITH SPAIN
3.40 p.m.
THE MINISTER OF STATE FOR FOREIGN AFFAIRS (LORD CHALFONT): My Lords, I should like, with permission, to repeat a Statement being made in another place on the subject of Spain and Gibraltar. The Statement which is being made by the Under-Secretary of State for Foreign Affairs is as follows:
"We delivered a Note to the Spanish Government yesterday proposing that the talks at official level which we had planned to hold last year should begin in Madrid on the 18th of March. We have suggested that either side should be free to raise whatever subjects it wishes to discuss."
That is the end of the Statement.
THE EARL OF BESSBOROUGH: My Lords, I am grateful to the noble Lord for repeating that Answer to us here. I am glad to hear that negotiations will be beginning on March 18, but I should like to ask the noble Lord this question. I notice that the Answer says that the Government have suggested
"that either side should be free to raise whatever subjects it wishes to discuss."
I do not know how carefully that Answer has been worded, but is the noble Lord aware that Ministers in another place, and I think here, have repeated on various occasions that the sovereignty of Gibraltar cannot be at issue, and I hope that that is a subject which will not arise. As we know, it is a subject in which all Spaniards are interested. I should be grateful if the noble Lord could explain this particular wording to us, and also if he would give us an assurance—repeated assurances have been made, I think, both in this House and in another place—that the interests of the people of Gibraltar themselves must be paramount.
LORD CHALFONT: My Lords, we have made it perfectly clear to the Spanish Government that we are not going into the talks in order to discuss the transfer of sovereignty. But many of the practical problems of Gibraltar, such as, for example, the division of territorial waters in the Bay, raise questions of sovereignty, and for that reason we should not want such questions to be excluded from the discussions. We think that the talks will have the greatest chance of success if the agenda is kept open, and that is why we have suggested that both sides should be free to raise whatever subjects they wish to discuss. I can repeat the assurance that I and other members of the Government have made before, which is that we are determined, and we remain determined, that the views of the inhabitants as to where their interests lie shall not be ignored.
LORD MERRIVALE: My Lords, will Her Majesty's Government and the noble Lord bear very much in mind, when tackling these discussions next month in Madrid, the words of the noble Lord, Lord Shepherd, when he said last Thursday that it was Her Majesty's Government's aim that the Gibraltarians should have maximum control over their internal domestic affairs? Also, will the

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noble Lord consider raising at these discussions the Spanish restrictions against Gibraltar, because they extend over a wide field, including labour, tourism, trade, social and cultural aspects and political and psychological matters? Also, does the noble Lord not feel that one of the items for discussion should be the question of reducing the restrictions on the frontier and in the air?
LORD CHALFONT: My Lords, of course we will bear in mind what the noble Lord has said, including what he has said about the restrictions that are visited upon the people of Gibraltar at the moment. In the talks we will, of course, try our best to bring about an improvement in the situation there.
LORD GRIMSTON OF WESTBURY: My Lords, as there is a possibility that the recent United Nations resolution on Gibraltar may be brought into the talks, could the noble Lord say what Her Majesty's Government's attitude is to that?
LORD CHALFONT: My Lords, I think that my noble friend Lord Caradon has made the attitude of Her Majesty's Government to the United Nations resolution quite clear—and we have made it clear to the Spanish Government—that we do not intend to conduct any talks on the basis of that resolution.
LORD STRATHCLYDE: My Lords, my noble friend asked that the views of the people of Gibraltar should have paramount consideration. The noble Lord in replying said that they would not be ignored. Are we to take that as being the same thing?
BARONESS EMMET OF AMBERLEY: My Lords, may I ask the Minister whether there will be a representative of Gibraltar at the talks?
LORD CHALFONT: My Lords, I am afraid that I cannot answer that question off-hand. I will get the information and will let the House have it. So far as the noble Lord's question is concerned, I cannot go further than the wording I used in my Answer. We have used this formula before, and I think it would be unwise if I were to depart from it now. We are prepared to say, and to mean, that the interests and the views of the people of Gibraltar, which were made
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clear in the recent referendum, shall certainly not be ignored in our talks with the Spaniards.
LORD ST. OSWALD: My Lords, I shall naturally study the words of the noble Lord with great interest. But I suggest to him that he has given the impression that never will the British Government consider any form whatever of transfer of sovereignty; and I suggest that whereas it is spoken of as if the interests of the Gibraltarians and a refusal to contemplate this are identical, it may in fact be that a refusal ever to contemplate or discuss any form of transfer of sovereignty is exactly opposite to the interests of the Gibraltarians. I am sorry that that is a very complicated way of setting out a complicated subject, but what I am saying is that I hope the Government will not go in as didactically as the noble Lord sounded to me this afternoon.
LORD CHALFONT: My Lords I would agree with the noble Lord that that is a very complicated formulation. But I assure him that we shall not go into this didactically, as he puts it, or with our minds closed. But he will know, and the House will know, that when my noble friend Lord Shepherd was recently in Gibraltar he was able to confirm that the views of the Gibraltarians as reflected in the referendum are absolutely clear and unequivocal. There can be no misunderstanding between us about what they want, and we certainly will have their interests and their views very much in our minds when we go into these talks. But we shall not, as I say, go into them with closed minds.
THE EARL OF ARRAN: My Lords, have Her Majesty's Government not given an unequivocal assurance, both to this House and to another place, that in no circumstances will they consider the surrender of Gibraltar and the Gibraltarians to the Spanish Government?
LORD CHALFONT: My Lords, I have said even to-day that we have made it clear to the Spanish Government that we do not go into these talks to discuss the transfer of sovereignty.
THE EARL OF BESSBOROUGH: My Lords, therefore the use of the term "whatever subjects" either side "wishes to discuss" was perhaps a little ill-chosen. Will the noble Lord not agree?
LORD CHALFONT: NO, my Lords. It was precisely and very carefully chosen for the reason that I said in answer to an earlier supplementary question; that is to say, there are a number of practical questions into which the question of sovereignty comes. But we are not going to discuss the transfer of sovereignty.

LOCAL AUTHORITIES' DIRECT- LABOUR BUILDING DEPARTMENTS
3.48 p.m.
Debate resumed.
LORD GARNSWORTHY: My Lords, I wish to return to the subject raised by the noble Earl, Lord Kinnoull. We were listening a few minutes ago to what I thought was a very informative speech by the noble Lord, Lord Nunburnholme. Before that we had the great pleasure of listening to a most constructive speech from my noble friend Lord Fiske. I rise to comment briefly on the experience of the local authority on which I serve. Surrey is not a housing authority, and we employ only a comparatively small number of men in what are generally referred to as direct-labour teams. But we have a fairly large architects' department, and I think the results that we achieve there may be of some interest in our consideration of this matter. The total annual capital value of building work in the county undertaken by the county council amounts to between £4 million and £5 million, and of this total the sum of £3 million is handled inside the architects' department. That leaves a quite substantial amount of work to be placed with outside architects and consultants, but it gives us the advantage that we are using both methods.
May I take as an example a job which costs, say, £225,000? If the architectural and consultants' work is paid for at the full-scale rates laid down by the R.I.B.A. and the other consultants' professional bodies, the figure of the cost is 14 per cent., or £31,500. If all the work is done inside our own architects' department, the percentage cost—and I am allowing for the overheads involved additionally—comes to 11 per cent., or £24,750, representing a saving on a job of that size of £6,750. So it will be seen that on the total volume of work in the county undertaken within the architects' department the difference between the
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cost when paid for at what are known as the full-scale rates and the cost when the job is done by our own architects' department represents a saving of some £90,000 a year. I think I ought to say that this authority, like some other fairly large authorities, has been able to negotiate scales slightly more favourable than those I have mentioned as being laid down by the R.I.B.A. and the other consultants' professional bodies, and on that basis our saving is in point of fact slightly less; but it amounts to at least £70,000 a year.
I think it is proper that I should pay tribute to the very efficient organisation of the architects' department in Surrey, and to add that the services it renders extend beyond those given by outside architects. Further, the cost of schemes that have to be revised or, occasionally, scrapped is included in the figure of 11 per cent. that I mentioned earlier. Obviously, if those schemes were done by outside architects then that cost would be outside that 11 per cent. I trust that this very brief statement may be of some interest to your Lordships in our consideration of this subject, and helpful in the determination of the Question raised by the noble Earl, Lord Kinnoull.
3.54 p.m.
LORD BROOKE OF CUMNOR: My Lords, we have listened to a series of informed speeches, and that alone must gratify my noble friend Lord Kinnoull and help him to feel that it was worth while initiating this debate on a somewhat specialised but very important subject. He asked whether the Government would tell us what practical plans they have for raising the efficiency of direct labour departments, and I hope that we shall get an answer to that question from the noble Lord, Lord Kennet, because to all appearances the one practical step which this Government have taken has been the issue of a circular which was more likely to militate against high efficiency in local authorities' direct labour departments than in favour of it.
I have never been one of those who have seen this problem in black and white, with no shades of grey. I have always thought that there was a place for direct labour, and I think the debate this afternoon has upheld that view. I have always been against those who have thought that the philosophic basis of

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direct labour justified it, however badly it did in practice in particular circumstances. I found myself in agreement with a great deal that my old colleague and, I suppose, enemy in London, the noble Lord, Lord Fiske, said on this subject from his great experience. But what I think your Lordships would like to know is whether the Government are now going to adopt a more vigorous policy to secure higher efficiency in the direct-labour departments of local authorities, rather than let matters rest with the 1965 circular which in itself removed a safeguard designed to ensure efficiency.
It is a fact that, where it has been possible to measure it, the value of output per man employed by direct-labour departments tends to be lower than the output per man employed by private industry working on similar tasks for local authorities. I was glad to hear the noble Lord, Lord Fiske, say that in his view the case for using direct labour on maintenance and repair work was considerably stronger overall than for using it on new building. In the field of most local authorities there is certainly a good deal of work not suitable to be done by ordinary outside contract. It is work which it is difficult to measure or evaluate in advance. For example, there is the day-to-day repair and maintenance work which needs to be closely linked with repair because it would be a mistake to have some people coming round to do the maintenance and then others following on afterwards to do repair work which the maintenance men had laid bare.
But the fact that output per man tends to be lower tells against direct labour on new construction work; and, on the whole, a large building firm can offer greater scope for ability, and therefore attracts abler men to its senior posts. There is also more variety of work within the field of a building firm working for a variety of customers than there is in an ordinary local authority area, though I grant that some exceptionally large local authorities can produce the variety.
But that does not mean that there can be no part for direct labour to play where circumstances are favourable. For example, circumstances are favourable to direct-labour experiments in a place where local builders are not very good, or are
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not really up to the sort of work which that particular local authority has to get done; circumstances are favourable where there is any evidence of a "ring" among the local builders; and circumstances are favourable where the building industry is at any given time so overstretched that it is extremely difficult for a local authority to get genuinely competitive tenders because, quite frankly, the builders have so much work on their hands that they do not want to take on local authority contracts in addition. I hope that the Government broadly agree with my analysis so far.
Now we come to the problem as seen through the eyes of a local authority. If it embarks on construction work by direct labour, it must be able to provide continuity of work. That is easier, on the whole, for a private building firm. It has a multiplicity of potential customers, whereas, as the noble Lord, Lord Fiske, said, the local authority's direct-labour department has only one. I noticed what the noble Lord said about the larger authorities of the future being able to build up a much stronger direct-labour department than a small authority can. Well, I think it is too hypothetical, either for him or for me, to seek to forecast the findings of the Royal Commission. I sometimes wonder whether local government, as it is to take shape in the future, may not be something very different from the local government that he and I first entered many years ago.
A local authority will wish to keep its direct labour force continuously employed, and so it may be tempted for the sake of continuity to put it on to jobs for which it could have got lower prices from private enterprise and thereby saved its ratepayers' money. This is exactly the problem that I had to face when I was the responsible Minister; and in the year 1959 I issued a circular which said that a local authority with a direct labour force must periodically—not every time, but periodically—test its efficiency, by seeking competitive tenders for at least one contract in three. The rural district council referred to by the noble Lord, Lord Nunburnholme, will not have had anything to fear from that requirement, for he said that that rural district council frequently went to tender and that its direct-labour department was able to do better than the lowest tender it received.

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Had I been someone who saw this problem solely in terms of black and white, who thought private enterprise always ideal and direct labour no good at all, I should not have taken the responsibility of saying that a local authority need go to tender for only one contract in every three. But there are unfortunately people on the other extreme—I seek to steer a middle course between them, as did the noble Lord, Lord Fiske, to-day—who think that everything is wrong with private enterprise and everything is right with direct labour, and that therefore it does not really much matter whether direct labour results are tested by open competition with private enterprise.
I remember that not very long after the issue of the circular to which I referred, the Salford City Council sent a deputation to see me to try to persuade me to release it from that one-in-three obligation. I note with interest that Sal-ford is one of the authorities which in recent times has got into serious trouble through overspending by its direct labour force. Nothing that has occurred has convinced me that it is a wrong policy to insist that a direct-labour department should have to compete with private enterprise for at least one in three contracts.
My Lords, it was Mr. Crossman, as Minister of Housing and Local Government, who weakened unwisely. In Circular No. 50/65, referred to by my noble friend Lord Kinnoull, and issued in November, 1965, he released local authorities from that essential obligation to test the competitiveness of their direct-labour departments periodically against the service that private building firms could give. He said they would do well to go to tender sometimes; but he put no obligation on them to do so. Until this weak policy is remedied, until every local authority is required and obliged periodically by Government insistence to compete with private enterprise prices, the series of disquieting reports from the independent district auditors exposing wasteful expenditure by direct-labour departments will continue.
I have in front of me the district auditor's report dated August, 1967, on the building department of the London Borough of Camden, part of which I formerly represented in another place;
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but my old borough is merged in Camden, and Camden is under different political control. What the district auditor said was:
"An examination of the 1966/67 bonus claims of the men in the seven area forces showed:

(i) that a large proportion of the bonus claims were for work for which no written orders—either by the Building Department or by the 'customer' department—could be traced;

(ii) that many bonus claims were for work which did not appear in the time-sheets of the tradesmen making the claims;

(iii) that, in many cases, materials which were apparently essential for particular jobs had not been issued to tradesmen who had claimed bonus for those jobs; and

(iv) that only a small proportion of the bonused work had been independently checked and that this small cheek had revealed a high proportion of over-claims."

The district auditor came to the conclusion that a considerable amount of ratepayers' money was being wasted by inefficiency in this Department which permitted these excessive claims.
But I particularly want to invite your Lordships' attention to this farther passage in the district auditor's report. He said:
"In 1961/2, 1962/3, and 1963/4, the Building Department's tenders were the lowest and the final costs of the jobs concerned were reasonably within the Department's estimates. In 1964/5, however, the Building Department's tender was the highest of the four submitted and they failed to get the job. No competitive tenders have been sought since then although it is fair to add that, in discussion at audit, the Building Manager fully accepted the need to test the market from time to time in open competition. In view of the decline in profitability and competitiveness suggested by the later section of this report on New Building Schemes, the Council will doubtless wish to assure themselves that the Building Department's maintenance work is being carried out efficiently and economically, and it is suggested that they could with advantage resume the former practice of requiring competitive tenders from lime to time, preferably somewhat more often than once a year."
My Lords, I apologise for the length of this quotation; but from it you will see the mischief the 1965 circular has done. It has conveyed to local authorities running direct-labour departments that it is not really very important to test their efficiency against private enterprise from time to time. One then finds that the district auditor comes along, after the money has been spent, after the money has been wasted, and, in

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effect, criticises the council for not having applied this test of competition—the very test from which this Government have officially released the local authorities. Every penny that is wasted here or elsewhere in local government has to be paid for by the public; whereas if a building firm wastes money the loss falls on the owner of that firm, or on the shareholders, and not on the innocent public.
Sometimes, when I hear people taking the extreme side in defending direct labour in all circumstances, I feel that they are bemused by the old fallacy that goods which are sold at a profit are more costly to the public than goods on which no profit is made. One has heard that stupid expression of view. Of course, the public is not nearly so foolish. Out shopping, as between two articles of equal quality, one buys the cheaper automatically. One does not dream of asking which shows the lower profit, and choosing to buy it on that account. High efficiency can produce goods at low cost with substantial profit. Low efficiency will produce neither profit nor value. Profit is the resultant of efficiency, and efficiency is spurred by competition. That really is why capitalism is intrinsically more effective than Socialism in getting the public value for money.
But I must not go away from my noble friend's specific Question into a discussion of Socialist and capitalist philosophy, though it is very relevant to this subject; it is at the very root of it. In authorising that 1965 circular, Mr. Crossman showed that he cared more for Socialism than for the pockets of the ordinary family that has to pay its rates, and, through the rates, to meet the losses on direct labour schemes if they are "bodged". To judge by recent local government elections, the public is not very keen just now to pay the price of Socialism.
My Lords, I believe that this debate will do great good if it produces a further anxiety in your Lordships' House and elsewhere, to have the pros and cons of direct labour, and its relative suitability and unsuitability in different circumstances, coolly analysed. There has been much too little of that in the past, and a step away from it was taken by the issue of the 1965 circular. It is that
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circular which has done so much damage by creating the wrong atmosphere, and furthering the idea that direct labour is a good thing in itself, even when it does not deliver the goods as cheaply as they might have been obtained in other ways.
Some of the revelations of waste in the district auditors' reports on direct labour schemes operated by Labour-controlled local authorities seem hardly consistent with the tense, taut, atmosphere of technical efficiency which the Labour Government have declared their determination to demonstrate. Until they realise the mistake of that 1965 circular, or until they take other and thoroughly effective steps to safeguard the public against waste by ill-advised or ill-managed direct-labour departments of local authorities, the Government are being inconsistent with their own policy of higher national efficiency. That is what I think this debate is about; that is what we are asking the noble Lord, Lord Kennet, to answer.
4.15 p.m.
THE JOINT PARLIAMENTARY SECRETARY, MINISTRY OF HOUSING AND LOCAL GOVERNMENT (LORD KENNET): My Lords, the House will be grateful to the noble Earl, Lord Kinnoull, for raising this interesting question. In the main we have had a good discussion on it, though during the closing moments I detected a suggestion of the "shuttlecock" element as my noble friend Lord Fiske called it. That I shall do my best to damp down, rather than pursue it with full ballistic vigour. It was extremely important and interesting for us to hear from no fewer than three noble Lords about their own experiences, whether as chairmen, members or, indeed, beneficiaries of direct-labour departments of differing sizes. I was particularly impressed by the fervent endorsement of the operations of what must be the direct-labour department of one of the smallest building local authorities in the country.
The noble Earl, Lord Kinnoull, was right, I believe, to emphasise at the beginning that we are not talking just about maintenance, or just about house building, but that the term "council workmen", wherever we may find them, is another name for members of a direct-labour organisation. They do street

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cleansing, highway maintenance, horticulture, and God knows how many other things besides the maintenance of buildings and the building of buildings. To put in proportion the complaints which we have heard about the operations of certain direct-labour departments (I am not minimising them: there have been regrettable episodes), I should like to remind the House that most local authorities in England have a direct-labour organisation dealing with building maintenance. Within that, less than most—a minority—actually carry out construction work with direct labour. Out of all the local authorities in England, no fewer than 1,297 use direct labour. Of those, 187 use direct labour for the building of new buildings, including houses. This roughly confirms the picture given in other terms, in terms of actual men employed, by the noble Earl, Lord Kinnoull.
My Lords, there is one thing I must emphasise right at the beginning about the decision whether or not to have a direct-labour department at all. I was most interested to note that nobody suggested that in general local authorities ought not to use direct labour and ought not to maintain such organisations. I think that perhaps the noble Lord, Lord Brooke of Cumnor, went furthest towards it, in using the word "experiment" about direct-labour organisations; saying that it was a useful field of experiment in the use of direct labour. Of course, my Lords, these things are established at a very high level.
LORD BROOKE OF CUMNOR: My Lords, I do not want there to be any misunderstanding. What I said was that most local authorities could very wisely use direct labour on their maintenance and repair work. If I used the word "experiment" in my speech, I think that I was using it in the context of new construction. Obviously, the first time a local authority uses direct labour for that it is an experiment.
LORD KENNET: My Lords, I did not mean to misinterpret the noble Lord, and of course I accept his explanation. But the question whether or not local authorities should have direct labour at all, and, once they have it, whether or
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not it should be used on this or that—typically on new construction—is a matter for the local authorities, and is not the business of Government. Naturally, any Minister of Housing, as the noble Lord, Lord Brooke of Cumnor, from his longer experience, will know better than I do, is concerned to see that those local authorities which have direct-labour organisations, use them sensibly. Successive Ministers have had different ways of approaching it and each has done his best, but it is not the job of the Minister of Housing and Local Government to say what tasks a local authority should set to be done by direct labour.
The burden of complaints which have struck the public conscience and have been mentioned to-day against direct-labour departments, especially in new building, concerns inefficiency and waste and I think we need to dwell on that for a moment. I would emphasise that I am not saying there is no inefficiency and waste, or that the Government do not have to do anything about it. I shall come to that. But would one be right to form a negative judgment about direct labour, as such, because of these examples of inefficiency and waste? I believe not. If one were to say, "O.K. it just proves that you should not employ direct labour at all", since the job has to be done, that would leave, as the only possible alternative, that the work should be done by contractors. And, of course, 90 per cent. of new house building is done by contractors.
We should compare inefficiency and waste on the part of private contractors with the examples which are before us of inefficiency and waste in direct-labour organisations. This is an extremely difficult thing to do, because with direct-labour organisations one can tell exactly what a building job costs, because the council has to pay up. When the contractor does the same job, one cannot tell exactly what it costs. One can tell the price that he tenders and what, after negotiation, the council may finally pay; but one cannot tell the cost. The contractor may make a thumping profit or, equally likely, he may make a loss He is not going to tell us—this is the nature of private enterprise. It operates on balance from year to year and gets by like this.

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The only way we can make a sound judgment on this is by looking at the failure rate of building contractors, because if a building contractor repeatedly finds his costs well above the tenders he puts in, he cannot exist and goes out of business. This, although it may or may not involve loss to the public, certainly indicates inefficiency. So let us set against the examples that have been given—I need not name them again—in the direct-labour field the fact that in 1966, the last year for which the convenient figures are available, no fewer than 481 private building firms went bankrupt. This figure does not include voluntary liquidations. Noble Lords would be right in imagining that the six or eight glaring examples of inefficiency in direct-labour organisations which have been given are offset by something on a much larger scale on the other side, though, in fairness, I must remind your Lordships again that private contractors are building 90 per cent. and direct-labour departments only 10 per cent. of the houses in this country.
THE EARL OF KINNOULL: My Lords, could the noble Lord tell the House how many of the firms which went bankrupt were employed by local authorities? This is relevant.
LORD KENNET: My Lords, I cannot do that, but I think (speaking subject to later correction if I am wrong), probably a large majority of them did house building, or at any rate jobs comparable with what direct-labour organisations do, including the building of houses in the private sector, if not for local authorities.
The noble Lord, Lord Brooke of Cumnor, said that in the case of inefficiency and waste by private builders the loss does not fall on the public, whereas in the case of direct labour organisations it does. This is not so. The loss sometimes does fall on the public. If a local authority employs a contractor to build houses and the contractor "goes bust" sometimes the local authority has to pay up. So that in such cases inefficiency and waste falls on the ratepayer as surely as it does in the other case.
VISCOUNT STONEHAVEN: My Lords, would the noble Lord bear in mind that a local authority can, and often does,
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insure against this contingency at a nominal rate, in which case the loss does not fall on the ratepayers, whereas they cannot insure against direct-labour losses?
LORD KENNET: My Lords, that can be done, but even that does not always help. Noble Lords who are familiar with this field will remember that last year a couple of local authorities were badly "stung" by the well-publicised collapse of a private developer.
I hope that we can agree that this should not be an ideological matter. House building is a difficult trade. It is tricky for many reasons, and mistakes are made by all who operate in this field. I think that noble Lords opposite should not maintain or continue to claim that the record of direct-labour organisations is in any way worse than the record of the private sector. To do them justice, they did not do so. They just attacked the record of the direct-labour organisations. I would say that there are faults on both sides and that it is less than just to attack one side on this. At this point, with your Lordships' approval, I should like to draw the curtain on the "shuttlecock" aspect of these organisations.
My Lords, I come now to the question of the one-in-three bid. This idea has a long history, which is not always remembered. The Girdwood Committee, which inquired into the costs of house building in 1948, found that it was then the practice of the Ministry of Health (we were then under the first Labour Government) to approve building by direct labour only where the estimated cost had been tested by competitive tendering or where it was known to compare favourably with current tender prices in the locality, so that tendering was not needed to show it. That was the situation throughout the lifetime of the first Labour Government. When the Conservatives came to power, they declared themselves against this procedure of competitive tendering in most cases, and adopted the 1959 rule requiring that only one contract in three should be put out to competitive tender.
I would point out that the first move made by the present Opposition when they were in office was to reduce the impact involved in competitive tendering

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on direct-labour organisations. That ran for six years, and when Labour came in again we found that this was not working right, not because it was in itself an undesirable idea—I do not think there was anything ideological in this—but because it was found to be too mechanical and was preventing direct-labour organisations from planning a straight run of work for themselves, because they might have been tripped up on every third job. Though it is hard to measure these things, it was making direct labour less efficient than private developers who could organise straight runs of work for themselves, because they could "dot about" and take contracts here and there, taking the ones where they could win, because they were good at that type of work.
In this respect I was particularly interested in what my noble friend Lord Fiske said, that it was acceptable to reinstate competitive tendering only if the direct-labour organisations were allowed to jump about and do jobs in other people's areas so that they could become almost national concerns like the big developers. It had another effect which was possibly even more undesirable. There was an incentive to "fiddle", because it meant that direct-labour organisations, especially the big ones, which had so many jobs going all the time that nobody knew which order they came in, were under strong temptation to undertake only the jobs they knew they could do best and most cheaply. This was not good. It annoyed the contractors against whom they would have had to compare estimates, if they had been put out to competitive tender in the proper way, and led to frictions and difficulties. It worked out in a mechanical way and tended either to make it difficult for the building up of a steady run of work or to make for what I might call, without stretching a point, "fiddling" on the part of local authorities.
So we went back on this. Direct-labour organisations were no longer obliged by circular to test one in three. The noble Lord was fair about this. He pointed out that the then Minister did not say that there ought not to be any more testing, but that it would be a good thing to do this from time to time. I should like to assure the House that this is being done to a considerable extent. It is
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done not by order, regulation or degree of the Minister, but by a nod and a wink from the principal regional officers of the Ministry throughout the country, and it seems to be working out on the ground with such a degree of common sense that I did not even bother to inquire how often it was being done. Indeed, I should not get meaningful figures, because I should never know whether the testing had been carried out entirely on the initiative of the local authority or because there had been a suggestion from the regional officer of the Ministry. That is the way things go now, and, so far as the Government can see, this is a satisfactory condition. We are getting competitive tendering, and if a direct-labour organisation seems to be going off on a long run of untested operations, then it is given a pretty strong hint that it ought to test one or two by competitive tender.
LORD BROOKE OF CUMNOR: When the noble Lord says that they are given a very strong hint, can he say what he he means by that? I understand how these strong hints are given but, having been the responsible Minister for four years, I know also how local authorities can ignore even very strong hints. What sanction are the Government applying in the last resort?
LORD KENNET: My Lords, these are day to day operations, and the noble Lord will know what good reasons there are for a Ministry and local authorities to remain on good terms. Any deterioration of relations in one field may sometimes cause deterioration in others, and this is a situation which is desired to be avoided by both sides.
There is one detailed point on costing which I think is worth making. Many complaints which are levelled against direct-labour organisations boil down to the fact that the final costing sometimes turns out to be higher than the estimate. This is, of course, the exception rather than the rule. We forget the thousands of schemes which go ahead without any trouble whatever. Sometimes when the cost turns out to be higher than the estimate there may be perfectly good reasons for it: the total of the work may have been increased during the run of the job; there may have been some agreed change. Very often such things (shall I say?) get ignored by those who are predisposed

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against these organisations, especially the local Press and so on. In the remainder of the cases, where there is no good reason for the increased cost, it may be a case of bad estimating, in the first place, or it may be a case of bad supervision of the work while it is going on. Bad estimating does not necessarily mean the loss of public money. This has to be borne very much in mind. It only means the loss of public money if a contractor could have done the job more cheaply at the final cost. The mere fact that the direct-labour organisation estimated £1,000 and carried it out at £1,500 tells you nothing about whether a private contractor would have been able to carry it out at less than £1,500, however he estimated in the first place. Of course, bad management, once a job is begun, always means waste, whoever is doing it. Sometimes the waste disappears altogether, and we never know about it. That is on the private side.
Because the new subsidies—and here we come to an important point—introduced under the recent Housing Subsidy Act are payable on the estimated cost at tender stage and not on the final cost, local authorities now have a strong financial incentive for making sure that the direct-labour department's estimate is realistic and that there is no subsequent overspending, because if there is they get no subsidy on it. This is in itself a large part of the answer to Lord Kinnoull's Question as he put it down.
Even beyond that, of course, there are cases where there has been clearly mismanagement, and in these cases successive Ministers are not now, as they have never been, inactive. I think it is worth reminding the House that in the case of Salford, which has been mentioned once or twice, it was found that they were overspending very badly, and my right honourable friend Mr. Mellish, who was then the Joint Parliamentary Secretary, urged the council to retrench and cut down to maintenance and small building projects and reform their organisation. This they have done, and I am sure noble Lords opposite would agree that they are right to have done so. This they began to do before the recent change in that part of the world. When a direct-labour organisation over-reaches itself, this kind of radical reappraisal may be necessary, and all sorts of changes urged
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upon local authorities. I give Salford as one example of a case in which this was done. If it happens again, it will be done again.
The noble Earl, Lord Kinnoull, mentioned the Report Study of the District Auditors' Society, but this point was not taken up in the debate. This Report plays a large part in the present situation, and in the view of the Government is of some importance. The District Auditors' Society last year produced, on the initiative of their own members, and primarily for the use of their own members, a useful Study on the financial control of new works undertaken by direct labour. The Minister made this Study available to those interested as long ago as last April, and a copy was placed in the Library of this House. My right honourable friend then entered into consultations with the local authority associations about the steps to be taken in the light of this Study. He has now received their agreement to the formation of a small Working Party drawn from local and central government. If there are any reserves on the part of any of the local authority associations about the possibility of joining this Working Party, I hope that the Government can rely upon the help of those noble Lords opposite who are interested in this matter to remove those reserves. This Working Party will draw up a short manual of principles of financial control and management for the work in question using the District Auditors' Society's Study as a basis. This manual, if it is acceptable by all concerned, could very well turn out to have a long-lasting and profoundly useful effect in the field that we are considering.
We have talked a lot about where direct-labour building has gone wrong. I want to wind up by giving the House two examples of local authorities where direct-labour building has turned out very well indeed. The County Borough of Sheffield have calculated that their direct labour force has saved £1½ million over 17 schemes comprising over 5,000 dwellings. On 11 of these 17 schemes—and this will please the noble Lord, Lord Brooke of Cumnor—the contract was obtained in competition with private contractors. To go to the other extreme, a rather small building authority, the

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Bladen Urban District Council, build about 100 houses a year on direct labour, and they do it at about 25 per cent. below the Ministry's cost yardsticks. These achievements are often forgotten in the blaze of publicity coming from certain quarters in the Press about the failures of the system.
To conclude, I have said what the Government are doing, but perhaps I can wrap it up in one sentence. We are seeing that there is competition when there appears to have been a long run without it, and where there appears to be a case for it. We are no longer in the mechanical method of one in three. We have set up this Working Party with the local authority associations—and I very much hope that they will collaborate—to go into what may turn out to be a kind of bible or a system for the guidance of direct-labour organisations. We sometimes descend like a ton of bricks. The Government are not convinced that there is a case for any more compulsive reform or any more general examination. I should perhaps clarify the point that the Mann Report, about which the noble Earl asked, was into the central government's direct-labour organisation—and I refer to the maintenance organisation of the Ministry of Works. So it does not come into this particular field. Having said all that, I should like to answer the noble Earl's Question by saying that the Government are convinced that they make a contribution, and that it is a useful one. In the overwhelming majority of cases it is well and wisely carried out. There is no case for the nationalisation of the building industry into so many local authority direct-labour organisations, and there is no case, equally, for the capitalisation of those existing municipal organisations.
THE EARL OF KINNOULL: Before the noble Lord sits down, I wonder if he could say whether the Government intend to expand or encourage the
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work studies in the local authority departments concerned, particularly to encourage productivity?
LORD KENNET: Certainly, my Lords. It is a question once again of encouragement. If a local authority have the resources to do this, and think it wise to do so, then of course they will get any advice and help they can from the Ministry to do it. But I am not sure to what extent it is the Minister's role to urge an authority to carry out a work study into its own affairs if the authority does not want to do so. On the other hand, what the Ministry can do is to help to diffuse the results of studies carried out by one authority, among other authorities who may not have the resources to make their own.

AIRDRIE COURT HOUSE COMMISSIONERS (DISSOLUTION) ORDER CONFIRMATION BILL
Brought from the Commons; read 1a, and (pursuant to the Private Legislation Procedure (Scotland) Act 1936) deemed to have been read 2a and reported from the Committee.
NATIONAL LOANS BILL
Brought from the Commons, endorsed with the Certificate from the Speaker that the Bill is a Money Bill within the meaning of the Parliament Act 1911; read 1a, and to be printed.
REVENUE (No. 2) BILL
Brought from the Commons, endorsed with the Certificate from the Speaker that the Bill is a. Money Bill within the meaning of the Parliament Act 1911; read 1a, and to be printed.

REGIONAL ECONOMIC PLANNING COUNCILS
4.41 p.m.
Lord ILFORD Lord ILFORD rose to ask Her Majesty's Government whether they will state the responsibilities and functions of the Regional Economic Planning Boards and Regional Economic Planning Councils and their intended relation to the local town planning authorities. The noble Lord said: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper. I put down this Question in the hope that it will enable the Government to tell us something about the work which is being done by the Regional Economic Planning Boards and the Regional Economic Planing Councils. I also hope that the noble Lord who is to reply on the Government's behalf will be able to tell us something about their intentions for the future of these two bodies.
Your Lordships, I think, have not heard very much about the activities of the Regional Economic Planning Councils. These bodies were set up soon after the Government took office. They have no express statutory authority, but were formed under the general powers of the Secretary of State for Economic Affairs. They have no executive powers and their functions, as I understand it, are purely advisory. Their purpose was stated then to be:
"To provide effective machinery for regional economic planning within the framework of the National Plan."
Since then, the National Plan has gone into cold storage, and I imagine that planning is proceeding for the second edition of the National Plan which will in due course, I suppose, make its appearance. So far as I am aware, the functions of these bodies have never been more precisely defined than by the Secretary of State in the statement from which I have just quoted.
I am not aware of any other statutory body whose responsibilities and functions are defined in more general or uncertain terms. The Government have in fact created a whole structure of Councils and Boards covering the whole country and having no express statutory authority at all. Parliament has really heard nothing of them, except the statement by the Minister, which I read a
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moment ago. There may be good reasons for this unusual procedure. I hope the Minister will tell us whether the Government regard these Boards as a temporary or a permanent part of our local administration, and, if they look upon them as a permanent part, whether it is intended to give statutory authority to them in the usual way.
These Councils have been superimposed upon the local planning authorities. It is not surprising that when bodies whose functions are defined in such imprecise terms are superimposed upon other authorities, with very similar although not identical functions, a certain amount of uncertainty and misunderstanding should result. Attempts are made periodically to resolve these uncertainties by holding conferences with the planning authorities, and by the action of some of the chairmen of the Councils who have made efforts to establish personal contacts with planning authorities and, indeed, with the local authorities in their regions which are not planning authorities. Certainly contacts made in that way have proved to be very helpful. Not all the chairmen have seen fit to do that. Nevertheless, over a wide field, in spite of the attempts of planning authorities and planning Councils to avoid misunderstanding, there remains an atmosphere of uncertainty, indecision and, I am afraid, in some cases, frustration. I hope that to-night the Minister will have an opportunity to clear the air.
The first thing one has to recognise about these Councils—and this is vital to the whole of our understanding of what they are supposed to do—is that they are the instruments of central Government and are no part of local government. Yet in some cases they have been treated, and indeed have sometimes treated themselves, as though they represented a third tier in the local government structure. I hope the Minister will make it clear that these councils are the instruments of central Government and not in any sense an addition to the structure of local government.
These Councils and Boards were intended to be concerned with economic planning, leaving the physical planning to the planning authorities; and that, I believe, is still the intention. But it has

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been found that, as a practical matter, you cannot very well separate physical planning from economic planning, and indeed the two are almost invariably inter-twined. It is therefore important that these Councils should maintain contacts, not only with the local authorities which are planning authorities, but with the local authorities which are not planning authorities. It may well be that the authorities which are not planning authorities will be most directly affected by the decisions the Councils make. A Council, for example, may decide that a certain industry should expand in a certain place. Its expansion will involve an expansion of the local authority's housing programme; it will involve more schools, an increase in the welfare services and all the other things that go with population. So I hope that the Councils—I know that some have done so—will make contacts not only with local authorities which are planning authorities, but with those local authorities which are not, which may be very much affected by the decisions the planning Council will take.
I do not intend to-night to enter upon the various uncertainties and misinterpretations which must necessarily be encountered when negotiations between bodies whose functions are so similar take place. One difficulty which I think has proved to be a real obstacle has been that of "confidentiality" as it is called. I gather that the members of the local planning councils are subject to the Official Secrets Act and accordingly they are very careful not to disclose, in the course of their negotiations, anything which may bring them into trouble with the authorities. That puts a serious limitation on those discussions which take place between local authorities and planning Councils. I think it has been found that "confidentiality" is a real obstacle. I hope it will be possible to release the strictness of "confidentiality" when these negotiations are taking place. If a local authority is not told what the ultimate purpose of the planning Council is likely to be, it is difficult for them to make a useful contribution to the discussion, and I hope a much greater degree of frankness will be possible in these discussions in the future than has been found to be the case hitherto.
One other matter that I want to deal with is that these Councils, like all such bodies, are beginning to develop ambitions. It is suggested from time to time that they should be given executive functions—functions perhaps to make broad planning decisions. If that were done it would mean that the character and functions of the Council would be completely transformed and it would add to the present two-tier structure of local government a third tier which could result only in a further difficulty in negotiation and further intricacy of our local administration.
Another suggestion that is made is that the Councils should include a number of elected persons, or of persons who are nominated by the local authorities. I think that suggestion would completely defeat the purpose which the Minister had in mind when these Councils were created. It is not by any means the case that if the individuals were elected they would be the persons from whom the Minister would wish to have advice. It would mean that the persons elected to the Regional Planning Councils might not be in possession of either the qualities or of the knowledge which the Minister desires from them. In that way it would completely defeat the purpose which the Minister has in view. I hope to-night the Minister will be able to assure us that neither of these suggestions will find favour with Her Majesty's Government.
There has been built up an immense structure of circumlocution about these Councils. No doubt they have done valuable work, and if to-night I may have appeared once or twice to be critical I hope nothing I say will be interpreted as a reflection on them, and it will not be thought that I have failed to recognise the valuable service which the men and women who serve on these Councils have given, without remuneration. I have no wish whatever to reflect adversely on what these Councils have done. I imagine many of them have completed the task which was set them in the first instance. Four, if not five, have produced valuable surveys of their areas, and it may be that when these surveys have been produced the work which they have to do will come to an end. I do not know whether that is so or not.
But does the work which remains to be done really justify this elaborate structure of Councils and Boards, with their paid chairmen and their staffs and all the expense which goes with the setting-up of bodies of that kind? Is it really not possible to find means by which the existing planning authorities, either singly or grouped together, perhaps in a standing conference or otherwise, could furnish the Minister with the information which he needs for central planning? I should have thought that this was possible, without creating this great structure of new authorities. Instead, there has been built up alongside local authority planning what is virtually a duplication of the present planning authorities. The Government ought to consider how far this duplication is really necessary and how much longer it will continue to be necessary. If they regard it as permanent they should give it the express statutory authority which is customary when such bodies are set up and which at present the Economic Planning Boards and Councils do not possess.
4.58 p.m.
VISCOUNT GAGE: My Lords, I want to support this Question put by my noble friend, but from the rather special angle of the South-East Region, which in some ways is different from any other region, first, because of its immense population of 17 million—bigger than a number of European countries, bigger than the whole of Norway, Sweden and Denmark put together—and also because it contains London, which is not only the biggest city in Great Britain but also a focal point of that drift to the South-East which has been causing so much concern in recent years; and secondly, because the problems of this region tend to be more national in character and less purely regional than those of any other region.
I approach this subject from the humble point of view of a local planning authority. I call it a humble point of view because it is fashionable to-day to regard local planning authorities as so parochial and so restricted in their outlook that their views are hardly worth considering. It may be that this criticism is justified, but I can only assure your Lordships that up to the present it has been extraordinarily difficult for us to be anything but parochial. All the
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time we have been willing to put into our schemes the elements of these wider national conceptions if we had only been able to discover what they were. The sort of questions we should have been very willing to have guidance about were such matters as whether we should take London overspill and, if so, in what form, whether in the form of planned movement, expanded towns, with industry; or whether we just expanded the number of commuters we were to have; and what sort of industry we were to be allowed for our own purposes.
All this was wrapped up with the question of the drift to the South-East. It was really not possible to get answers to those questions. All we could do was to send up our schemes, prepared to the best of our ability, and see what happened. In due course, which might have been anything up to two years, they were returned to us with the Minister of Housing and Local Government's comments and amendments. We did not quite know what happened to those schemes in Whitehall, but we assumed that they had been the rounds of all the other Ministries, and that the Ministry of Housing and Local Government had acted as co-ordinator of those views.
The system worked, up to a point, but it was clearly very wasteful of time and effort to prepare plans simply on a sort of trial-and-error basis. So we were very glad when we learned in the early 1960s that the then Government, the Conservative Government, were going to produce a South-East Study. And when the Study was produced, in 1964, it did give us some guidance. It tried to indicate the kind of target population we should aim at, and indicated the towns which might be expanded. It was all very tentative, however. A number of figures were obviously wrong. But perhaps in the course of time we should have hammered out something. All that, of course, is academic, because the present Government, when they came into power, almost immediately withdrew the South-East Study. The reason, we understood, was in connection with the newly formed Department of Economic Affairs, and we rather understood that the Government did not think sufficient examination had been made of the economic problems that were then arising.

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This question of how far economics is essential to physical planning, as my noble friend has said, has never really been entirely clarified. Even a local planning authority can understand that implementation of these plans needs enormous amounts of money, for housing, roads and what-have-you. With the lack of resources it might well be that those resources would have to be rationed. But we were aware that one of the dangers of planning was that one might move into a sort of dream world, with wonderful projects for reconstructing various areas and building road systems that never really took shape at all but existed only on paper. So anything which would bring greater realism would have been very welcome. Beyond that we really could not see.
As we were recently told by Professor Jukes, economic planning really means a number of different things and introduces a whole lot of new agencies. As Mr. Enoch Powell has recently pointed out, it may mean a computation of the number of people employed in filleting fish or preparing dehydrated vegetables in 1973. But, in all seriousness, I believe that it is partly the failure of the Government to be more specific on this question of how economics are essential to physical planning that has caused certain confusions to which he referred. This is perhaps by the way.
My Lords we waited for three years, and in 1967 there appeared Stategy for the South-East. The form of this production was somewhat suprising. It was not, as in the case of the South-East Study, sponsored by the Ministry of Housing and Local Government—indeed, it was not sponsored by any Ministry. It was a report of the Economic Council to the Secretary of State for Economic Affairs, and to this day we do not know whether or not the Government accept it. Yet we have been asked by the Chairman of the Economic Council to comment on it. I feel that this is slightly putting the cart before the horse. As I have said, large questions of policy do arise in this area. We have seen in the past the difficulties that have arisen from the drift to the South-East. We are now beginning to see some of the problems created by Government measures to reverse that movement and push back
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industry to the North. The example of Woolwich is very clear in our minds. I think there will be more such cases, and some Department may well have some reservations before the scheme is finally approved.
But even supposing the Government take the whole of these great schemes as a basis for discussion, what is to happen then? I suppose that there will be some formal consultation with the local authorities. So far, there has been very little. It is true that the Chairman has had a number of working luncheons with the various authorities, and certainly we do not grudge Mr. Hackett his working luncheons, or any other luncheons: we shall always be glad to see him. But these are not a very obvious substitute for proper, formal consultation. Although we in local government are a pretty well disciplined lot, we do have views, and in this particular connection those views do not entirely coincide with the views of the Strategy for the South-East. I think there will be some disappointment if our views are ignored.
It is not at all surprising, of course, that there should be differences of opinion. Town planning is not an exact science; economics is not an exact science. In fact, your Lordships may remember the dictum of Mr. Lloyd George who, at a moment of exasperation, said that if there were six economists there would be seven opinons, two of which would be the opinions of Lord Keynes. I am only arguing that this Strategy for the South-East is an extremely competent document, very well supported by logical argument, and I am glad to see that a distinguished member of the team that produced it is to take part in the debate this afternoon.
But there are other arguments that can be advanced, equally supported by logic, and in fact what is happening to-day is that an enormous number of what I might call prize essays are being written, putting forward and supporting all sorts of views without anybody being quite clear in his mind who is going to judge who will get the prize. We are sending our comments and our prize essays not to the Economic Council but to our voluntary associations of all the authorities in the South-East that is to say, the London

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Standing Conference, presided over by my noble friend Lord Nugent of Guildford, and it may be that this body has a very valuable part to play in ironing out differences and reaching agreement on various points.
Even so, it is exceedingly unlikely that it will be able to iron out all disagreements. I cannot imagine even the most complete form of consultation reaching unanimous agreement, for example, on the question of the third London Airport, and whether it should be at Stansted or not. There will be other similar cases. Decisions have to be taken, and I am asking how they are going to be taken. Hitherto, as I have said, the Minister of Housing and Local Government has been the Minister who has presented the local authorities with Government policy, and probably in the past he has, no doubt with great difficulty, attempted to co-ordinate ministerial policy. That is a highly important thing in planning, never more so than at the present day when Ministers keep having more and more powers conferred on them. Without this co-ordination we can easily have a position where we can establish trading estates which, under his licensing system, the President of the Board of Trade never allows us to fill up. We can have a situation where the Ministry of Transport authorises the closing down of a railway line just before a town is going to be expanded. We can have a situation where, having carefully preserved a large area of beautiful country, the Minister of Power finds it necessary to put a nuclear power station in the middle of it. All these things can happen if there is no co-ordination.
I happen to know that one point at issue to-day is the extent to which statutory undertakers ought to come under the planning law. I am pointing out that we cannot deal with these things at local level; they must be dealt with at ministerial level, or even at Cabinet level. Is the Minister of Local Government going to continue these functions as hitherto? He is the only Minister who has statutory planning powers. He is the Minister who has power to amend our schemes and to decide on appeals, and he seems the obvious Minister to continue this function. Alternatively, is some new system envisaged? Is there
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any significance in the fact that this Report Strategy for the South-East was conceived as the responsibility of the Department of Economic Affairs, and that this debate is being answered by the representative of that Department? One thing I must say is that I most devoutly hope it does not signify that henceforward town and country planning is going to be under dual control, the Ministry of Housing and Local Government working through the local authorities, and the Department of Economic Affairs through the Economic Council, and that the local authorities will, in effect, be under two masters.
We in local government have to consult a whole host of bodies, such as the Land Commission, the Countryside Commission, the Forestry Commission, the Electricity Generating Authority—all statutory undertakers in their respective fields. I make no complaint about that. But if in addition to them, under some obscure phraseology in regard to the word "consultation", we shall be required, in effect, to submit our basic plans to the Economic Council before we send them to the Minister, I do not think that would work at all. I do not believe we should ever get finality.
I have noticed that Lord Beswick is a most experienced debater, and I am perfectly sure that he is capable of making a well-reasoned and well-informed reply to questions of this sort without conveying any information whatever. My noble friend behind me is perhaps more confident than I am that he will give that information. But on the assumption that my supposition is right, I might perhaps express a hope that the Minister of Housing and Local Government will be restored to his old position quite soon. Of course, in matters of this magnitude time must be given for consideration. That is perfectly true. It is also true that on the strength of this document, and before it has been approved, the G.L.C. is already making plans for decanting its population with certain boroughs, without even informing the local authorities who are concerned round about of their rights. That is just an example of the confusion that I hope will be avoided in future. I agree that this is a large subject, and that it affects a great number of people. I think that

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is all the more reason why the planners at the top should themselves be planned, and why we of the lower grade should operate under an intelligible chain of command.
5.16 p.m.
LORD DONALDSON OF KINGS-BRIDGE: My Lords, it is probably a good thing that one representative of a planning council should also be a Member of your Lordships' House, and as such I feel it encumbent on me to say something about my experiences. I am a member of the South-East Planning Council, which has come in for some rather threatening looks from the other side. I shall make a short statement and confine it almost entirely to generalities. I have absolutely no intention of defending step by step the organisation of regional planning throughout the country. I think it is possibly a good idea. I think we have to see how it works, and I think we shall make our decision in due course when we see how it works.
Originally, many of us who were appointed to this body felt a good many of the doubts which the noble Lord, Lord Ilford, has, if I may say so, so acidly expressed. We were pretty hesitant as to what good we could do, how useful another advisory body would be. After all, it absorbs the time of able men in public life, and a large number of highly paid and competent civil servants, and has no executive power whatever. To begin with, it seemed to us that every issue that was brought before us had already been decided by somebody else. But I am glad to tell your Lordships that we have now been sitting for nearly two years and there is a general feeling among us, I think, that we are less uneasy than we were about our relevance to the whole subject. As the noble Viscount, Lord Gage, has pointed out, the Council spent its first year producing this document Strategy for the South-East, which I think was a year well spent, and I hope that this strategy may in fact get the prize which the noble Viscount suggested might be available. But he complains, I think a little early, that it has not yet received the Government's blessing. It is an immensely complicated subject. There are an enormous number of people whose views have to be taken into consideration. The noble Lord and
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the noble Viscount would be among the first to complain if we brushed these views aside or treated them cavalierly. So I think the noble Viscount must be reasonable and remember that this is not yet six months old. I believe the chances are extremely high that a strategy such as this will be adopted as a guide to development in the South-East. This, of course, does not mean that the lines can never be passed. It simply means that anybody who wishes to cross these lines will have to have a good reason for doing so.
I have said that I think most of my colleagues on the South-East Planning Council are convinced that there is a genuine need for an overall body of this sort to sit in permanent session to take account of the changing trends in population level and housing statistics which come in month by month and are constantly being revised; to receive at the earliest moment notice of the intentions of the various bodies functioning within the area—that is to say, local and central, public and private; enormous bodies like the G.L.C., and small but important bodies like the Location of Offices Bureau. There is an enormous number of intentions to be co-ordinated, and one job of this Council is to plot all these intentions on one canvas and to try to see how much they conflict, then to point this out and to try to make sure that, as a group, they are conforming to the general strategy, and, where necessary, to give advice about priorities. As the enormous developments in this area occur—and they will happen, whether we plan it or not—the availability of men and materials will become shorter, and somebody will have to settle what is to be done first. I entirely agree with what was said on the other side of the House that there should be no intention by these bodies to be executive; this would confuse the issue completely. But there is a strong case for somebody who is not executive and who is not personally involved to look at this complicated question as a whole and to give the responsible Minister advice on what to do.
I will not say a great deal more about this subject. I will not take this step by step, but if we simply look at the

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Stansted story it will help us to realise how useful bodies of this kind could be. This is not the moment to open up the question of Stansted, with its rights and wrongs, but it is enough to say that if the South East Planning Council had been in existence when the Stansted project was first taken up, it would have subjected it to the fiercest critical scrutiny, because it is slap in the middle of one of our country zones. We should surely have wanted to know the arguments for and against alternative sites and should have wanted them to be made public. We should surely have insisted on having a proper explanation of why it is so difficult and expensive to move the Ministry of Defence installations in the South to some slightly less suitable place. And if, after all this, the verdict had still been Stansted, which it might well have been, I take it that the local inhabitants would have been just as angry as they are now, but the rest of the country would have been able to see that all the right questions had been asked and answered before the decision was taken.
I am pleased that the noble Lord, Lord Ilford, does not complain that these bodies are not elected. We have a much wider cross-section of articulate and independently-minded people than we possibly could get if they had to stand for election. We have on our body four or five highly distinguished people expert in planning, transportation, docks and such matters, and we also have a few, as it were, common-sense additions, of which I hope humbly to be one. I have no qualifications at all; it is probably not a bad thing to have a few. Within our deliberations I consider we have extreme democracy. We are a nonpolitical body and there is no political bias observable. All issues are debated fiercely and without fear or favour; and the chairman, if I may say so, is quite hard-worked. This is very healthy. My own belief is that in the course of time we shall find that these nine Regional Councils have an independent, well-taken view of the problems of their areas, debate them honestly, fairly and sharply, and can give advice to the Government on the best way to solve the formidable problems which are going to confront us in this very small island in the next fifty years.
5.25 p.m.
LORD INGLEWOOD: My Lords, the three noble Lords who have just spoken have all been looking at this problem through expert eyes, my two noble friends on this side of the House from long experience in local government, and the noble Lord who has just sat down as a member of a Regional Economic Planning Council. I want to look at the problem through the eyes of the man in the street, for it is surely ultimately for the good of the man in the street that this whole organisation has been set up. It is understandable that he is becoming increasingly puzzled. Advisory committees are a familiar part of the machinery of Government, but these Regional Economic Planning Councils do not seem to fit in with the recognised ideas of how such committees do their work and render their reports, as has been mentioned by the noble Viscount, Lord Gage.
If I am rather more critical than the other noble Lords who have spoken, I hope that no one will think that I am unfairly so. I have often been asked in the North of England, where I live, what exactly is the purpose and power of our Economic Planning Council. Up to to-day, I have only been able to reply that I do not know. I doubt whether anybody really knows. Unfortunately I have seen their patronage increasing, and this is not a good thing. I have also noticed—not, I am glad to say, in our part of the country, but, judging from what I have heard from other parts—that some Councils make no attempt to disguise their growing ambitions. The noble Lord, Lord Ilford, mentioned this matter.
I have heard it said that the purpose is to bring Whitehall to the Regions, but that, to me, is a meaningless platitude, because no Minister or Department can possibly delegate worth-while responsibility either to individuals or to a committee which have neither the traditions nor the discipline of the Civil Service or any reasonably direct responsibility to Parliament.
This really is a most timely debate which my noble friend has introduced, and I hope that the Government will take full advantage of the opportunity to make clear not only the present

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position, which is far from clear, but also the future intentions of the Government and the developments which they would like to see.
I have spoken to the Minister, and he knows generally how I feel; and as I do not want to make his reply any more difficult, it might be easier if I were to frame my speech (which will not be a long one) in the form of four questions. The first is: will the Minister clear up the question of the Government's policy for these committees? We know that the word "advisory" can be elastic. I can see two possible aims. Some people have thought that they were appointed primarily to help the Government frame and implement their policy. If so, I would ask why one finds in the ranks of these Councils members who would call themselves Conservatives, when we know Government policy is based on Socialism. I would again ask: have these men who call themselves Conservatives been taken in? I hope that that is not so, but when I look from where I live in the North across the Border into Scotland I can see a body comparable with an English Regional Council, though not exactly the same, presided over by the Secretary of State, which I should have thought an undisguised political body.
If this is not the Government's intention for the English Councils, as other people think, and if they are designed to find the greatest measure of common ground between us all in furthering the various policies for the good of all, which is a worthy object, why have some chairmen been appointed whose whole career in the public service has been associated in people's minds with Party politics? I must point out that I should be just as critical if these chairmen whom some of us may have in mind had been Tories as if they were Socialists. A lifelong Party politician cannot be the best chairman for an advisory body of this sort.
Having said that, I do not want anybody to think that I am wishing to question in any way the great ability, the energy or the honourable motives of the chairman of the Northern Economic Planning Council, even though his methods leave us all wondering. But while some Councils—the Yorkshire and Humberside Council, for example—set
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about their business with commendable modesty, our Northern Council seems to have a non-stop programme of Press conferences and T.V. appearances, and to make use of all the paraphernalia of modern public relations which, as I have said, can only puzzle people. This has another effect, which I think is unfortunate: that it tends to disparage in people's minds the standing of local authorities who do not generally indulge in public relations officers and techniques of this sort.
As to the membership, the noble Lord opposite has told us of the membership of his Council, which I think is broadly representative of other Councils, and therefore I will not go into this subject at any length. But I will say, in regard to the industrialists who are members of Councils, that it seems to me that they tend to represent bigger interests and the principal industrial organisations, whereas I feel that Councils would be stronger in some ways if there were more who had experience of smaller-scale industry. Having come here via another place—and the noble Lord, Lord Beswick, will I think agree with me here—I cannot help but wish that more of these industrialists had at one time or another in their successful lives offered their services to local government, and particularly county councils; the ballot box is very good discipline and experience for us all.
Then another difficulty was mentioned by the noble Lord, Lord Ilford. I understand that members of Regional Councils are subject to the Official Secrets Act, because it happens that they must see Government papers which presumably are not for general distribution. This must put the members of local authorities at a certain disadvantage, particularly if, as mayors or chairmen of their authorities, they have certain knowledge affecting their own area but which under the Official Secrets Act they are not allowed in any way to indicate, either to their officials or to their colleagues.
When referring to the membership of the Councils, in our part of the world we must not forget Mr. Lee, a Minister in the Department of Economic Affairs, who I gather has special but not very clearly defined responsibilities for the North of England. He is a Minister in

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the D.E.A., which is the sponsoring Department for the Regional Councils in all areas, and so I find it a little difficult to see what special responsibility he has for us when he must be equally responsible for everybody else. I should like the Minister to say whether Mr. Lee's responsibilities also run in Scotland, or whether the boundary between England and Scotland in this particular instance is just one more iron curtain. It really is extremely difficult to understand exactly how all this fits in.
My last question concerns the financial side, and it has to do with the cost to the country of this whole organisation. It is now several years since these Councils were appointed. The Boards are surely only a larger edition of the meetings of the principal officials of the central Government Departments in the main provincial towns, which have been going on for a very long time, but the Regional Economic Councils are new. Of course, when I ask the cost I am not referring to salaries, because there are no salaries for members except the wretched pittance which is paid to the chairmen—and wretched it must be in proportion to the time and effort which they put in. Your Lordships are well placed to sympathise with those who put in a lot of time for nothing.
What I am concerned with is the cost of this whole system of what has been called "bringing Whitehall to the regions". This volume, Civil Estimates, 1967–68, is very large and thick. It has hundreds of pages, but I cannot find one single reference in it to the cost of these Regional Economic Planning Councils and Boards which we are discussing here this afternoon. There is no information of any sort or kind. Under the D.E.A., all one learns is that, like almost every other branch of the public service when it comes to salaries, regional policy was staffed this year by 175 men and women drawing salaries to a total of £289,000, as against the 160 who were doing the same job last year. May I ask whether the noble Lord anticipates that next year those figures will be higher still?
Surely I am right in supposing that local authorities' accounts are all audited and published, and I should like to ask the noble Lord who is to reply why the accounts of the Regional Economic Boards and the Regional Economic
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Councils should not be audited and published in exactly the same way as the accounts of local authorities. For instance, I am certain that there has been a considerable increase in the staff and in the expenditure at Wellbar House in Newcastle-upon-Tyne, which I used to know some years ago, and there must now be a huge bill for travelling and for conferences. And when we consider this question of conferences, the expenses go far beyond the expenses of Council or Board representatives. Conferences in the North of England are not the same as conferences in Whitehall, where you pick up a telephone, speak to a colleague, collect your file and walk across the street. Local authority and voluntary society representatives who attend our endless conferences travel 60 or 70 miles and may have to spend a night away from home, and often it seems to them that the conference has been in aid of very little else, except an excuse for one more Press hand-out in the interests of the Regional Council. I think, and I am sure other noble Lords will agree with me, that this whole organisation is ripe for attention from the Public Accounts Committee in another place.
Having said all that, I should like to finish by saying that I am in no doubt at all that we need some organisation to help members of county councils and county borough councils to think more widely and to consider problems which cross their boundaries, because the county area is too small an area for much of our planning to-day. Not least ought this to be possible when the county boundary happens also to be the boundary between England and Scotland or the boundary between England and Wales, which at the moment does not happen. Further, I am sure that, with the help and cooperation of others, members of county councils ought to be encouraged to take more cognisance of the economic factors affecting their areas. This is what lies behind this whole conception of regional economic planning, but I doubt very much whether the Regional Economic Councils and their Boards as at present set up are the best method of achieving it.
5.38 p.m.
LORD BROOKE OF CUMNOR: My Lords, I think it will be clear to the Government by now that what my noble

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friends are seeking in this short but excellent debate is clarification and fixing of responsibilities. I feel that I ought to crave your Lordships' indulgence for taking up the time of the House on each of the two Questions which we have been debating this afternoon. This one, however, happens to be on a subject in which I have had a deep interest for a great many years. It must be thirty years now since I ventured to submit a memorandum urging regional development policies to the Royal Commission on the Distribution of the Industrial Population, which was admirably presided over by Sir Montague Barlow. Since then I have had twenty years experience in local government and ten years as a Minister of the Crown, so I hope I can see the whole question from most of the relevant points of view.
It was I who some eight years ago initiated the South-East Study, which was the first effort of its kind to examine the planning problems of a whole region, and I sought to get it done within what I might call the framework of local government. The question which I think my noble friends have been asking to-day, particularly my noble friend Lord Gage, is whether we are now blurring responsibilities by carrying on planning work partly under the ægis of the Minister of Housing and Local Government through the local planning authorities, and partly under the ægis of the Ministers of the Department of Economic Affairs through these Regional Economic Planning Councils.
That seems to me a very pertinent question. I have no doubt whatever that Planning with a capital "P"—the sort of Town and Country Planning which is done by local authorities—is of little value unless it has a sound economic basis. Town and country planning, if it is thought of merely as an amenity exercise, is bound to go wrong and to lead people astray in the present day. But unless the Government are going to deprive local authorities of their planning functions—and, indeed, the Minister of Housing and Local Government of his overall planning responsibility—it is a little hard to see how the Department of Economic Affairs and these Regional Economic Planning Councils fit into all this.
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Thirty years ago I was pleading that the Barlow Commission should recommend to the Government the creation of regional machinery, which in those days was almost non-existent. Now I have a great deal of sympathy with the complaints of my noble friends that the machinery is becoming so complex that effective action may be inhibited. Perhaps I should explain a little more what I mean by that. I am not doubting the competence of any of these bodies; and I do not doubt it for a moment when the noble Lord, Lord Donaldson of Kings-bridge, says that the members of his Economic Planning Council, as they continue their work, become more and more conscious of the importance of the work their Council is doing. That is natural and as it should be. But what masters is not only that each separate piece of the machinery should be satisfied that it is doing a worth-while job, but the it the whole collection of pieces of machinery should fit together into one effective machine which is going to turn out goods.
My Lords, that is what we are worried about at the present time; and we are the more worried because a tremendous amount of this work—this very largely unpaid work of public service—falls upon a limited number of extremely busy people. I know how busy the key people in local government always are. I suspect that a great many of those who are serving as colleagues of the noble Lord, Lord Donaldson, and Mr. Hackett, for whom I have a high personal regard, on the South-East Planning Council, are extremely busy people in their own right, so to speak; and I am sure the same is true of the regional economic bodies elsewhere. Because they are busy people, they must realise the more that this work needs to be done with economy of time, economy of paper and economy of result. In other words, the machinery must be so designed as to create the best possible value at the end with the minimum expenditure—my noble friend Lord Inglewood might say "of money", but I am inclined to say of people's scarce, valuable time. Now this is where we are all hoping that the noble Lord, Lord Beswick, will be able to help us. My noble friend Lord Gage, in his very clear speech, emphasised how real is the danger of local authorities becoming confused by the appearance of a series of

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reports. They may be valuable in themselves, but what exactly is the authority of each one?
It is a tremendous task. I grant at once that the Government are in a dual difficulty. One difficulty is of their own making and that is in having created the Department of Economic Affairs; because I should have thought there was bound to be some overlap between it and the Ministry of Housing and Local Government in this field. The second difficulty, not of their making, or only partly of their making, is that this is a period of transition in local government. Many people think that the old pattern of local government is inadequate for the burdens it is increasingly having to bear, but few of us would honestly wish ourselves into the job of the members of the Royal Commission, believing that we could easily write a Report showing how local government should pan out. The truth is, as I said earlier this afternoon, that the local government of the future may be—I do not know; but it may be—very different in pattern from the local government in which a number of your Lordships, including myself, have gained our experience; and the Government are having to develop their regional economic policy—an important task—at this transitional stage of local government.
What I am asking is that the Government should make as clear as they possibly can to all concerned just where the responsibilities lie, just what local authorities must be prepared to do, and just where the decisions eventually are going to be taken. If we can get this right I am sure that we can improve the pattern of machinery for the better government of this country and for its better economic development on a regional and national basis. But if we get it wrong, we shall be wasting a great deal of key people's valuable time and missing a tremendous opportunity. I hope the Government will accept that this debate has not been initiated in any Party political spirit, but that the Question was put on the Paper, I think most wisely, by my noble friend Lord Ilford from the conviction that the House of Lords is a place where there is time, as there is not always in another place, to ask the Government to state clearly how they see the machinery and how they desire the machinery to operate.
5.48 p.m.
LORD BESWICK: My Lords, we have had an interesting discussion, and I hope that it will prove to be a useful one. Those noble Lords who have spoken have kept closely to the Question put down on the Order Paper by the noble Lord, Lord Ilford; and, as did the noble Lord, Lord Brooke of Cumnor, who preceded me, I appreciate very much the spirit in which the noble Lord initiated our discussion. It was particularly interesting, I thought, that, although there were criticisms to be made, there was no noble Lord (and certainly not the noble Lord, Lord Brooke of Cumnor, who initiated the South-East Study) who in any way attempted to controvert this idea of a regional approach to our problems. As the noble Lord, Lord Brooke, said, it is a matter only of the effectiveness and efficiency of the system that we are anxious to establish. I hope I am right when I say that I accepted the reference by the noble Viscount, Lord Gage, to my debating ability as a compliment. In any event, I assure him that this evening I am concerned only to try to state, or to restate, the thinking of the Government about the regional planning machinery.
My Lords, may I first distinguish between the Regional Economic Planning Councils and the Regional Boards? As the noble Lord, Lord Ilford, said, the Councils are advisory bodies—and I emphasise, as he asked me to emphasise, this word "advisory". Their purpose is to assist the Government in two main ways. The first is to consider the needs, potential and the problems of a region as a whole, so that the Government can take a more informed view in the formulation of national policy. Secondly, the Councils are required to develop plans, and a broad planning strategy, for each region as a guide for action by the Government themselves and for the other bodies within the region who have executive powers and responsibilities. As my noble friend Lord Donaldson said, the Council members are appointed by the Secretary of State for Economic Affairs as individuals with knowledge and experience of the region, capable of making a contribution to the planning of the region as a whole. The members are drawn from both sides of industry, from local authorities, and from universities and professional bodies concerned with

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aspects of planning. The Councils, therefore, embrace a very wide range of experience, and few will doubt the value of their contribution in the planning field. The members are not, let me stress, appointed as representatives or delegates of any public body or interest. This means that they are free to advise on what they consider to be the best interests of the region as a whole.
The Boards, on the other hand, consist of representatives of the main Government Departments concerned with the economic, physical and social planning in a region. They customarily include representatives of the Board of Trade, the Ministries of Agriculture, Housing and Local Government, Transport, Labour and Technology, with the representative of the D.E.A. in the Chair. Most of these Departments have had regional representatives before these Councils were established, and most of them are fairly fully occupied with their different departmental responsibilities. But the Board does provide greater co-ordination of the work of the Departments, and through the Board the Councils are provided with the basic information and supporting services which they need. The provision, in this way, of facts available to Government and information about Government policies enables the Councils to form their own ideas against a practical and realistic background. The Councils and Boards together therefore constitute the regional machinery. I have stressed that the Councils are advisory, but of course they are also the only bodies concerned with the task of economic planning for a region as a whole. The Government must therefore attach weight to the views and advice which they receive from the Councils in relation to regional matters.
The planning work of the Councils is not dependent upon there being a National Plan, although, naturally, they must take full account of national policies and national planning studies. At the same time most of us will appreciate that economic planning is a continuous process, and Councils, by studying their regions and formulating proposals, contribute to national planning as it evolves. The noble Lord, Lord Ilford, has been concerned, as was the noble Viscount, Lord Gage, with the relationship of these regional bodies to local town planning
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authorities and local authorities generally.
The powers and responsibilities of the local authorities are defined by Statute; and those Statutes are in no way affected by the existence of the Councils and Boards. The Planning Councils have no executive powers, and cannot take decisions, which can only be taken by the Government and by the local authorities. Their influence, which can be considerable, comes from the fact that they look at problems on a regional scale, and the value of the work they do is enhanced by their capacity to identify regional problems as a whole. These arrangements do not affect local authorities' own duties and rights, particularly of access to Government, nor do they diminish the need for local planning authorities to cooperate together. The Government see no conflict between the bodies such as the Standing Conferences of Planning Authorities and the Planning Councils. On the contrary, there is here a fruitful basis for co-operation between the statutory authorities responsible for local planning and the Councils concerned with the application of Government policy in the region.
The noble Viscount, Lord Gage, mentioned a particular case where there had been, he thought, some confusion as a result of proposals made by the South-East Planning Council about decanting overspill population in a certain borough. May I say how much I appreciated the intervention by my noble friend Lord Donaldson of Kingsbridge and the way he gave his point of view about the relationship of the South-East Council with the local authorities within their area. But I imagine that the noble Viscount was referring to the Hastings incident. I understand that the South-East Council recommended that Hastings should have an overspill scheme. This was noted by the Ministry of Housing and Local Government and by the Greater London Council. As a result the G.L.C. approached Hastings to negotiate agreements.
It might be thought that here was an example of a Regional Council, by virtue of their responsibility to range over the region as a whole, identifying a suitable borough for overspill decanting. The G.L.C. is, of course, free to open discussions with planning authorities about

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overspill, and Hastings, as a county borough, was under no obligation to consult neighbouring authorities unless they were directly affected. I see the noble Viscount wishes to intervene, but perhaps I may add this, which I hope will to some extent meet the noble Viscount. It may be that it would have been wiser if the East Sussex County Council, of which the noble Viscount is a distinguished member, had been informed. I quite agree; but this was, in fact, overlooked. But there was nothing here which in any way acted against the principle or the structure that we are discussing. However, it should have been a matter of courtesy, I should have thought.
VISCOUNT GAGE: My Lords, I intervene to say, in the interests of strict accuracy, that the Hastings area appears in the South-East Study strategy map as an area for future study—by whom it does not say. I agree that it might have been developed, as it was under the South-East Study; but the same thing had been happening also in Hampshire.
LORD BESWICK: Yes, my Lords, but surely there was a local authority, the G.L.C., whose responsibility was to consult with local authorities, here, in fact, consulting with a county borough who, for their part, were quite entitled, without any permission or other consultation, to discuss a matter of common interest. I quite agree that it might have been better if those two local authorities had kept informed the surrounding East Sussex County Council. But I am assured that this is an isolated incident. Most of the Council's strategy and the reference they made to the overspill proposals is related to the long-term. There is no immediate urgency about the decisions. But the Government are anxious that the uncertainty created should be cleared up as early as possible, and I understand that the Government reply will be made public as soon as possible.
That was one particular example and, as I have said, I think in that case we are dealing with an isolated incident. But I recognise that the noble Lords who have spoken, including the noble Lord, Lord Ilford, himself President of the Association of Municipal Corporations,
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must speak with an experience which reflects a feeling among local authority organisations; and if they say that there is to some extent uncertainty, then clearly there must be some basis for the views they express. On the other hand, my Lords, I do not feel that we should exaggerate the degree of uncertainty. I do not think it would be wise, either, to overlook what has already been done to clear away this uncertainty, and to establish greater understanding.
For example, last November the Secretary of State had a useful meeting with representatives of all the local authority organisations; with the A.M.C., the County Councils Association, the Urban District Councils Association and the Rural District Councils Association, and I believe there also were present representatives of the Greater London Council. The discussion which they had was specifically to consider this matter of the relations between the local authorities and the regional bodies. My right honourable friend has every hope that the respective roles will be more clearly understood and that, consequently, there will be established greater scope for cooperation. I understand that as a result of that meeting a memorandum has been prepared setting out the factors discussed and the understandings which were reached. Preliminary discussions on the draft of that memorandum have already begun with some of the local authority organisations.
The noble Lord, Lord Ilford, spoke, as did the noble Lord, Lord Inglewood, about the inhibitions which, they felt, might be placed upon some Council members by virtue of the fact that they operate under the Official Secrets Act. It is true that they are sometimes consulted by the Government on matters about which there is a degree of secrecy, or, at any rate, the matters are confidential; and clearly it facilitates frank discussion with the Regional Councils if this secrecy is observed. But although some measure of restraint is necessary, I am surprised, and indeed sorry, to hear that this is causing any real difficulty. Certainly, it is the intention both of the Government and of the Councils to strengthen their co-operation and not allow the operation of the Official Secrets Act to come between them in any significant way.

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My Lords, since I was asked to make this clear, I emphasise again that it is the desire of the Government that there should be the closest possible relations between the Councils and the planning authorities, with each side helping the other to the good of both. Co-operation is the keynote, and there is no question at all of the Planning Councils being imposed on the local authorities as an intermediary between them and the Government.
The noble Lord, Lord Inglewood, asked about the cost of these Regional Councils. I can understand that he had some difficulty in picking out the various items because, as I have said, the members of Regional Boards are themselves members of different Government Departments, and, of course, their salaries are carried on the different Departmental Votes. The annual expenditure on the D.E.A. Vote of the Northern Regional Economic Planning Council, which is what the noble Lord asked about particularly, is for the travelling and subsistence allowances only, plus an honorarium of £750 to the Chairman. The travelling and subsistence costs of all the Councils are included in the amount under sub-head "B" of the Department Vote. The noble Lord will find, if he looks at the Command Paper, that under sub-head "B" of the D.E.A. Vote there is an amount of £75,000, but this includes the general administrative expenses of the Department, as well as all the travelling and subsistence allowances for all the Councils in the country.
LORD INGLEWOOD: My Lords, in the interests of accuracy will the noble Lord allow me to say that it was £75,000 last year? It is £82,000 this year, which shows the upward trend.
LORD BESWICK: My Lords, the noble Lord is better informed than I am. I am dealing with the Civil Estimates for the year ending March, 1968, and the figure under subhead "B"—I quite agree with the noble Lord—is £82,000, as against £75,000 last year.
The noble Lord asked whether these accounts are audited. Of course, the estimates of Government Departments come under the Comptroller and Auditor General. The noble Lord, Lord Inglewood, also asked about the New-
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castle office in which he seemed to think there had been changes, and where he thought there might be expenses. I gather that the Northern Regional Economic Planning Board has a supporting staff of 19 in the Regional Office, whose total salaries amount to approximately £35,000 per annum. In addition, of course, they incur the normal travelling expenses.
My Lords, the White Paper on Town and Country Planning (Cmnd. 3533) stated clearly that it is the intention that the local planning authorities should consult planning councils on the formative stage of planning so that account part be taken of the Council's views on regional policies and strategies in the preparation of local authority plans. It is, of course, for the Ministry of Housing and Local Government to consider the development plans of local authorities and for the local planning authorities to consider how far their plans should be adjusted in the light of the strategy for a region that may be recommended by a planning council. It is the intention that both central and local planning should be influenced by the studies and advice on regional considerations from the Councils and the Government make public their views on the reports prepared by the Councils, but the final decision rests, and must rest, with the executive authorities.
That is the position at the present time. I was asked about the future. Many ideas have, of course, been floated in various quarters about the development of regional machinery. As noble Lords will know, there is a Royal Commission sitting now to consider the future of local government. Its findings and recommendations will, no doubt, have a bearing not only on the shape of local government but on regional planning itself. I cannot, therefore, speculate as to what may be the development of these regional planning bodies in the future. We must wait to see what comes out of the Royal Commission's Report.
For the present, my Lords, the Government are satisfied that the Councils have an important role to play as advisory bodies, and they will continue to give them every support. I was very grateful that the noble Lord, Lord Ilford, felt able to pay a tribute to the contribution made by the Regional Councils, by these unpaid people. For my part, I should like to add my tribute to the work and

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effort put into regional planning by some 240 people, all eminent in their own walk of life and all very busy but who nevertheless contrive to serve their region in this way. In particular, the studies and reports they have prepared have earned
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wide commendation, and I hope that we shall find it possible to congratulate them on what they have done so far.
House adjourned at eight minutes past six o'clock.