Sitting of 26 February 1968

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

  Hixon Level Crossing Accident (Tribunal)
  The Solicitor-General (Sir Arthur Irvine): I beg to present a Petition from Sir William Arthur Harvey Druitt, Her Majesty's Procurator-General and Treasury Solicitor, on behalf of the Tribunal directed to investigate the accident which occurred at Hixon Level Crossing, Staffordshire, on 6th January last. The Petition stales that reference is desired to be made al the investigation to the Report made by the Committee to which the British Transport Commission Bill was referred in 1957, to the minutes of evidence taken before that Committee and to the OFFICIAL REPORT for 30th May, 1963, and 1st February, 1968.
  The Petition continues:
  "Wherefore, your Petitioner prays that your Honourable House will be graciously pleased to give leave to the proper Officers of the House to attend the said formal investigation and to produce the said report and minutes of evidence and the relevant numbers of the said Official Report of your Honourable House. And your Petitioner, as in duty bound, will ever pray…"
  As I propose to move a Motion in respect of this Petition, Mr. Speaker, I ask that the Petition be read.
  Petition read.
  The Solicitor-General: I beg to move, That leave be given to the proper Officers of this House to attend and produce the said documents accordingly.
  Question put and agreed to.
  Sir H. Legge-Bourke: On a point of order. I do not wish to delay the House now, Mr. Speaker, but might I have your permission to raise a point of order on this matter at the end of Question Time?
  Mr. Speaker: Yes.

ORAL ANSWERS TO QUESTIONS

  BRUSSELS (PROPERTY LEASES)
  Mr. Roebuckasked the Secretary of State for Foreign Affairs why his Department signed 65 additional leases for property in Brussels last year.
  The Secretary of State for Foreign Affairs (Mr. George Brown): Forty-eight of these properties were hired for the staff of our North Atlantic Treaty Organisation delegation shortly before the Organisation's headquarters moved to Brussels. An equivalent number of hirings have been given up in Paris and the rents of these are therefore an offsetting saving.
  The other 17 leases replace existing hirings or were needed for extra staff in the Embassy and our delegation to the European Communities.
  Mr. Roebuck: Is it not a fact that the Government are now spending more than £200,000 a year for rent for accommodation in Brussels? What inquiries were made by the Foreign Office to see that all this accommodation was being properly used before these additional hirings were acquired? Can my right hon. Friend assure us that there will be no further hirings in 1968?
  Mr. Brown: I do not know about that, but my hon. Friend clearly wrote his supplementary question before he heard my reply. The extra hirings which we are taking in Brussels are, for the most part, to replace the ones which we previously had in Paris.

  RUDOLPH HESS
  Mr. Longdenasked the Secretary of State for Foreign Affairs what is the cost to public funds in terms of money and manpower of Great Britain's share in guarding Rudolph Hess; and what is his policy regarding the continuation of this obligation.
  Mr. Wingfield Digbyasked the Secretary of State for Foreign Affairs what reply he has received from the Soviet Government in answer to his approach to them about the release of Rudolf Hess from Spandau Prison.
  The Under-Secretary of State for Foreign Affairs (Mr. William Rodgers): I regret to say that the Soviet Government have refused to agree to the release of Rudolf Hess from Spandau.
  The direct cost to Her Majesty's Government in guarding Hess arises from the employment of five British warders, and in 1966 amounted to £6,691.
  Mr. Longden: Is it not time that, in conjunction with our American and French allies, we stopped paying this price for Soviet vindictiveness and released an old gentleman who is far beyond doing any harm to anyone?
  Mr. Rodgers: Without necessarily following the hon. Member in his precise terminology I entirely agree that for practical and humanitarian reasons it would be better that Hess should be released, but I do not think that it can be done in the way the hon. Member suggests.
  Mr. Digby: Apart from the question of expense, does it not seem unjustifiable that Hess should now be suffering solitary confinement, to which he was never condemned?
  Mr. Rodgers: As I have said, it would be better if he were let out. He has been locked up now for 25 years, which is long enough.
  Mr. Paget: Considering that Hess came to us and surrendered himself to try to make peace, would not that £6,000 be better spent by arranging for his escape?

  VIETNAM
  Mr. James Davidsonasked the Secretary of State for Foreign Affairs by what authority the British Embassy in Saigon acted as an intermediary between the Governments of South Vietnam and the United States of America after the banning of the Council of Elders by the South Vietnamese Government in December, 1965.
  Mr. George Brown: I am not aware of any such event in December, 1965.
  Mr. Davidson: Was it not the case that the American Ambassador, Mr. Maxwell Taylor, denounced the South Vietnamese action at the time and that the British Ambassador had to intervene to restore relations?
  Mr. Brown: I rather get the impression that the hon. Member is thinking of events that happened at the end of 1964, in which there was a short period of misunderstanding between the Americans and the South Vietnamese. The British Ambassador—as, of course, he always would—did his best to clear this up. It was cleared up in a very short time.
  Mr. Winnickasked the Secretary of State for Foreign Affairs if he will now take further action to bring an end to the Vietnam war.
  Mr. Blakerasked the Secretary of State for Foreign Affairs if he will now take further steps towards a peaceful resolution of the war in Vietnam.
  Mr. St. John-Stevasasked the Secretary of State for Foreign Affairs whether he will now take a new initiative to secure a negotiated settlement to the war in Vietnam.
  Mr. Barnesasked the Secretary of State for Foreign Affairs if, in view of the latest developments in Vietnam, he will now take further steps to bring about a peace settlement.
  Mr. Frank Allaunasked the Secretary of State for Foreign Affairs what further proposals he has for ending the war in Vietnam.
  Mr. George Brown: We are in constant contact with the Governments concerned in the Vietnam conflict in an unceasing effort to promote an early settlement.
  Mr. Winnick: Since talks could begin the moment the Americans unconditionally stop their bombing of North Vietnam, will my right hon. Friend support the position now taken up by the Secretary-General of the United Nations? When will the British Government tell the Americans that they can no more win the war against the Vietcong than the French could win against the Vietminh?
  Mr. Brown: I respect the military judgment of my hon. Friend in the latter part of his Question. On the first part, it is equally clear that talks could begin the moment Hanoi made it plain that they were ready to go to the table. We could go on for ever asking who is to start first. What I want to try to do—

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  and what a lot of other people want to do; and I invite my hon. Friend to join with us—is to get them both ready to go at the same time. At the moment it is Hanoi that is holding back.
  Mr. Blaker: Will the right hon. Gentleman tell the House a little more about the attitude of North Vietnam towards the possibility of talks? For example, what is their current attitude towards the San Antonio formula and what conditions are they laying down as preconditions to joining in such talks?
  Mr. Brown: The hon. Gentleman will be aware that there are many different indications and that one of the difficulties of attempting to discuss this matter openly by way of Question and Answer session is that one is making a subjective judgment all the time about which expression of view is really the one of the Hanoi Government. I have recently seen one in which they appeared to reject the San Antonio formula. On the other hand, there is reason to believe that this may not necessarily be the position. I have discussed this topic not only with the Governments concerned but also recently with U Thant. I cannot say to the House that I have any clear evidence that Hanoi is ready to come to the table, but, on the other hand, I do not believe that one should rule it out as a possibility. I suggest, therefore, that the best thing that I can do is continue to press through all the channels open to me.
  Mr. St. John-Stevas: In view of the rising tide of suffering and savagery in Vietnam, for which both sides are responsible, cannot the right hon. Gentleman himself try a further personal initiative to bring this appalling war to an end?
  Mr. Brown: I do not think that any personal, public initiative at this moment would help very much. However, that does not mean that I am not taking initiatives and am not in contact with others who are also in a position to help. I shall continue to do that, but I think that, at this time, it would be wrong to identify them. I agree about the increasing savagery of this war. One of the things that moves one most is the fact that it is bound to go on increasing on both sides. There has been a good deal of recognition of this and a number
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  of us are doing all that we can to arrange a situation in which the two sides can get to the table.
  Mr. Barnes: Are not both sides now further from peace talks than they have ever been before? As one of America's friends, would not one of the best things that we could do be for us to concentrate on trying to bring home to her how tragically and hopelessly confused her present Vietnam policy has now become?
  Mr. Brown: I do not agree that both sides are further from talking now than they have ever been before. Indeed, that may turn out to be very wide of the mark. I suggest that it would be better if we stopped identifying ourselves as either America's friends or Vietnam's friends and instead identified ourselves as the friends of peace who want to get both sides to the table.
  Mr. Frank Allaun: If my right hon. Friend says, as he just said, that he would not rule out the possibility of U Thant's policy being operated, why not back it, since the wisdom of that policy could be tested within a matter of days?
  Mr. Brown: I am sorry if my hon. Friend misunderstood me because I did not even say that. As my hon. Friend knows, the difference between what U Thant has said and what I have said is that he has identified one of the four points as something that should happen all by itself, and he says that he believes that, if it happened, something would then follow. I am bound to say that in my recent talks with him I was given no more basis than in others I have had for believing that this is necessarily so. I therefore remain with the view that the four points I have outlined on many occasions, taken together, provide a package deal which would justify the talks starting.
  Mr. Biggs-Davison: Will not the right hon. Gentleman reconsider what he said about not identifying ourselves with any of the countries concerned in this war? Has he no feeling of solidarity for our fellow subjects in Australia and New Zealand?
  Mr. Brown: As the hon. Gentleman well knows, I was making the point that the feeling of most of us at the moment

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  must be for the suffering of innocent people in Vietnam, whether North or South, and the casualties being suffered by all of those who are fighting, regardless of from where they come. The best thing we can do is not to raise partisan banners but to try to get the two sides to the peace table. However, I am prepared to go on to say, as I have said many times before, that the major responsibility now for holding this up rests with Hanoi.
  Mr. Richard: Will my right hon. Friend take this opportunity to reiterate clearly the fact that it is the opinion of Her Majesty's Government that to dissociate ourselves from the United States at this time would make the cause of peace more, rather than less, difficult?
  Mr. Brown: That is very firmly our view. My right hon. Friend the Prime Minister has said time and again that if we thought that such a step would bring peace nearer, we would take it. However, I do not believe that it would. I believe that it would lose us influence where we have it and would gain us none where we have not got it. I believe that the line we are taking now is the right one in the interest of trying to bring this conflict to a halt.
  Mr. Molloy: Is not my right hon. Friend trying to face two ways at the same time? If we are genuinely trying to be the arbiter and neutral in this vulgar war, should not we dissociate ourselves from one of the belligerents and say that the proposal of U Thant should at least be put to the test?
  Mr. Brown: I suggest that it is my hon. Friend who is trying to face both ways at once. If my fellow co-Chairman would cease his operations in support of one of the belligerents—or even if he did not do that but joined with me in reconvening the Geneva Conference—we could make progress this afternoon.

  CAMBODIA
  Mr. James Davidsonasked the Secretary of State for Foreign Affairs as co-Chairman of the Geneva Agreement, whether he will seek to have observers placed on the Vietnam-Cambodia frontier to ensure that the neutrality of Cambodia
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  may be observed during current military operations in Vietnam.
  Mr. George Brown: I regard the preservation of Cambodia's neutrality as vitally important. So far as Cambodia's frontier with Vietnam is concerned, we have long held that the best way to ensure this neutrality would be by expanding the activities of the International Control Commission as the Cambodian Government have requested. The Commission is seized of this matter and consideration lies there at the moment.
  Mr. Davidson: What practical steps have Her Majesty's Government taken as co-Chairman to try to safeguard Cambodian neutarilty, other than giving lip service to the request of the Cambodian Government?
  Mr. Brown: It is not a question of giving lip-service; we have made it clear by our declaration what our views are. So far our other co-Chairman has been unwilling to join with us in a proposal to extend the work of the International Control Commission. Nevertheless, the Commission itself is competent to do this. We have drawn its attention to it and various efforts to help have been made, and we hope that it will take action.
  Mr. R. C. Mitchell: Is my right hon. Friend aware that large numbers of North Vietnamese regular troops are stationed in Cambodia? In fact, North Vietnam is using Cambodia as a base for its aggression against South Vietnam.
  Mr. Brown: I think it would be better if I kept out of that. I take note of what my hon. Friend says.
  Mr. Dalyell: Has there been any direct approach from the Cambodian Government to Her Majesty's Government on the question of the Commission?
  Mr. Brown: The Cambodian Government would like to see the activities of the Commission extended. Cambodia has a very long and mountainous frontier—as my hon. Friend knows more personally than I do—and the ways by which it could be supervised would require mobile forces. These are available, and we should like to see them used.
  Mr. Dodds-Parker: Is it true that the Russian and Polish members of the Commission are refusing to allow the arrival

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  of better equipment to make these forces available?
  Mr. Brown: It is better if I simply say that the matter rests at the moment with the Commission, which is empowered to take action, if it will.

  SOUTH AFRICA (SECURITY COUNCIL RESOLUTION)
  Mr. Hugh Jenkinsasked the Secretary of State for Foreign Affairs what action Her Majesty's Government are taking in relation to the Security Council's resolution of 25th January concerning the illegal trial of 37 South-West Africans.
  The Minister of State for Foreign Affairs (Mr. Goronwy Roberts): I would refer my hon. Friend to my replies to my hon. Friends the Members for Portsmouth, West (Mr. Judd) and Sheffield, Heeley (Mr. Hooley) on 19th February.—[Vol. 759, c. 8.]
  Mr. Jenkins: Is it not the case that the Security Council Resolution called upon all member States to exert their influence in order to induce South Africa to comply with the provisions of the Council's Resolution? What steps has my right hon. Friend taken to exert his influence in order to induce South African compliance?
  Mr. Roberts: This is precisely what Her Majesty's Government have done. On instructions our Ambassador in South Africa conveyed to the South African Government our strong feelings on this question of retrospective legislation, especially any carrying the death penalty. We also made sure that an observer was present at the trial, from 26th January to the end of the trial. Finally, my right hon. and noble Friend Lord Caradon made a very good speech—a strong speech—at the United Nations, reasserting Her Majesty's Government's abhorrence of this kind of behaviour.
  Mr. Wall: Can the hon. Gentleman explain why a self-confessed terrorist, caught armed, should not be sentenced to imprisonment?
  Mr. Roberts: Her Majesty's Government have repeatedly condemned terror-
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  ism in every form. They equally condemn the terrorist Act under which this trial was held.

  CONSCIENTIOUS OBJECTION
  Mr. Hugh Jenkinsasked the Secretary of State for Foreign Affairs if he will take steps to propose to the General Assembly of the United Nations that the right of conscientious objection be universally recognised by member nations.
  Mr. Goronwy Roberts: No, Sir. We looked into this recently and concluded that there was little common ground for United Nations action. The Council of Europe has also come to a similar conclusion in relation to its members.
  Mr. Jenkins: Does not my hon. Friend agree that since this country recognises real conscientious objection, it would be right and proper for us to endeavour to extend that recognition generally?
  Mr. Roberts: We have taken part in discussions both in the Council of Europe and in the United Nations with a view to expanding liberal and humane policies in this aspect of human rights but, as I have said, detailed discussions in the Council of Europe, for instance, have yielded the position that there is so little common ground that, as of now, it would not seem to be a fruitful point for us to take up in the United Nations.

  GREECE
  Mr. Winnickasked the Secretary of State for Foreign Affairs what action Her Majesty's Government are taking in the Committee of Ministers of the Council of Europe on the recent resolution on Greece passed by the Consultative Assembly of the Council of Europe; and if he will make a statement.
  Mr. Luardasked the Secretary of State for Foreign Affairs what steps he is taking to ensure effective action by the Committee of Ministers of the Council of Europe to restore full political and other human rights in Greece.
  Mr. William Rodgers: The resolution and recommendation passed by the Consultative Assembly of the Council of

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  Europe will be considered by the Committee of Ministers shortly. Our attitude will of course reflect our policy of using all our influence towards an early return to democracy and respect for human rights.
  Mr. Winnick: In view of Amnesty's report of the horrifying tortures carried out on political prisoners by the military régime, will my hon. Friend refer the whole matter of torturing to the International Committee of the Red Cross? Can he comment on the disgraceful expulsion of Mr. Leslie Finer from Greece?
  Mr. Rodgers: There are Questions about Mr. Leslie Finer later on the Order Paper. On the first part of the supplementary question, I agree that all of us have been shocked by Amnesty's report about the maltreatment of political prisoners, and certainly the possibility of raising the matter with the International Committee of the Red Cross is in our minds.
  Mr. Speaker: Order. It is not in order to anticipate other hon. Members' Questions.
  Mr. Brewis: Does the Minister think that the best way to persuade a proud, independent State and an ally in N.A.T.O. to return to democracy is by giving that State a time limit and threatening it with expulsion from the Council of Europe?
  Mr. Rodgers: It is obviously a matter of judgment how best to get Greece moving in the direction that we all want to see. I think that the Government have made it clear that there is a balance here which must be preserved. But this does not prevent our condemning behaviour which we think abhorrent, and saying that we want to see a movement to democracy in Greece as soon as possible.

  UNITED NATIONS RELIEF AND WORKS AGENCY
  Mr. Moyleasked the Secretary of State for Foreign Affairs whether he will now announce the United Kingdom's contribution to the United Nations Relief and Works Agency for the Agency's next financial year.
  Mr. Goronwy Roberts: Her Majesty's Government hope shortly to be in a posi-
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  tion to make a statement on the precise level of their contribution to the United Nations Relief and Works Agency for the current year.
  Mr. Moyle: Will my hon. Friend undertake to ensure that the contribution is maintained at levels comparable with previous years, particularly in view of the fact that the current living conditions of Arab refugees are a standing incitement to the Arab peoples to adopt extremist policies?
  Mr. Roberts: I hope to make an early announcement of the amounts that will be made available. I am sure that we shall again be making a substantial contribution to U.N.R.W.A. this year. I join my hon. Friend in his remarks about the condition of the refugees, and the whole House will feel that whatever sum we are able to make available for this purpose will be most worth while.

  ALGERIA (DIPLOMATIC RELATIONS)
  Mr. Moyleasked the Secretary of State for Foreign Affairs when diplomatic relations are to be restored between Her Majesty's Government and the Government of Algeria.
  Mr. George Brown: We are in touch with the Algerian Government. There have been further discussions recently and I am hopeful that we can resume diplomatic relations in the near future.
  Mr. Moyle: Will my right hon. Friend make every effort to achieve success in these discussions, since he could then represent to the Algerian Government the fact that oil is reaching the illegal regime in Rhodesia via Total, the French company?
  Mr. Brown: Without commenting on my hon. Friend's assertion, which I have no grounds for supporting or denying, I must make it clear to the House that if we are in diplomatic relations with the Algerian Government we shall be in a better position to exert influence in a number of areas in which we are interested, including this one.
  Mr. Wood: Can the right hon. Gentleman give us any further news about the

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  British aircraft, in respect of which questions were put to his hon. Friend the other day? Can he also say what contribution this country is making in various ways to the economy of Algeria?
  Mr. Brown: I do not think that I can answer the second part of that question without notice. To answer the first part, I have reason to believe that, as we make progress with the resumption of diplomatic relations and as our relations with the Algerians improve, the release of the aircraft will be a much more definite possibility.

  FOREIGN AWARDS
  Sir J. Langford-Holtasked the Secretary of State for Foreign Affairs what are the difficulties and complications delaying his decision regarding permission for British subjects to wear foreign decorations approved by him; whether he is aware that an early decision was promised to the hon. Members for Liverpool, Wavertre (Mr. Tilney), Hertfordshire, South-West (Mr. Longden) and Shrewsbury, on 19th July, 1967; and what he now proposes to do.
  Mr. William Rodgers: I am happy to tell the House that it has now been agreed in principle that the Foreign Orders Regulations should be amended to provide for the grant of unrestricted permission to United Kingdom private citizens in all cases to wear awards which, in accordance with the Regulations, they have been permitted to accept. I hope to arrange for a notice to appear shortly in the London Gazette announcing this change.
  Sir J. Langford-Holt: In thanking the hon. Gentleman for the part he has played in this, may I assure him that, while it has been a long time coming, it has been well worth it in the end?
  Mr. Rodgers: On the contrary, this is the moment to congratulate the hon. Gentleman on the successful outcome of his campaign.

  STRAITS OF TIRAN
  Sir J. Langford-Holtasked the Secretary of State for Foreign Affairs by what means in the past he has asserted
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  the right of free and innocent passage through the Straits of Tiran on behalf of British shipping; and how he proposes to assert this right in the future.
  Mr. George Brown: The maintenance of the right of free passage through international waterways is primarily a task for the international community as a whole, working through the United Nations. Her Majesty's Government have consistently affirmed this right, and took particular care to ensure that the Security Council Resolution on the Middle East, which we tabled and which was unanimously adopted on 22nd November, explicitly affirmed
  "…the necessity for guaranteeing freedom of navigation through international waterways in the area".
  Sir J. Langford-Holt: Contrary to what the Foreign Secretary said, is not the task of protecting British shipping primarily the task of Her Majesty's Government?
  Mr. Brown: I fear that the hon. Gentleman is living in a bygone age. The maintenance of the right of free passage through international waterways is nowadays, and must be, primarily a task for the international community. There are more maritime Powers than we alone and it is for the international community to look after these rights; and that is why we have worked, and will continue to work, through the United Nations.

  PORTUGAL (UNITED NATIONS RESOLUTION)
  Mr. Biggs-Davisonasked the Secretary of State for Foreign Affairs what action is being taken by Her Majesty's Government with regard to the Resolution of the United Nations General Assembly dated 21st November, 1967, on the report of the Fourth Committee concerning territories under Portuguese administration.
  Mr. Goronwy Roberts: Her Majesty's Government have repeatedly made it clear that they regret Portugal's unwillingness to admit that the principle of self-determination is applicable to her overseas territories. We voted against the resolution because it contained several unacceptable features.
  Mr. Biggs-Davison: Is it not the case that both the I.L.O. and the W.H.O. made favourable reports on the administration of Portuguese provinces in Africa? Will the Government suggest to the U.N. Secretary-General that he should accept the latest invitation by the Portuguese Government to visit these territories to see conditions for himself?
  Mr. Roberts: There may be such reports but the resolution was directed to the shortcomings of Portugal in regard to a specific but fundamental fact, namely, unwillingness to admit the principle of self-determination as applicable to her overseas territories. We must insist that this is accepted by all countries. Although we would have wished to have voted for this resolution and were prevented from doing so only by the fact that there were introduced into it unacceptable references and provisions, we stand very firmly behind the views of the United Nations on this matter.
  Mr. Whitaker: Could we not suggest at the United Nations that referendum be held in these territorie: similar to the one we held in Gibraltar to ascertain what the wishes of the inhabitants are?
  Mr. Roberts: That is an interesting suggestion.

  NUCLEAR WEAPONS
  Mr. Biggs-Davisonasked the Secretary of State for Foreign Affairs to what extent in the negotiating of a draft Non-Proliferation Treaty the right of European nations collectively to develop and possess nuclear weapons systems for combined defence has been safeguarded; what new restrictions it is proposed to place on the international exchange of information and assistance in the exploitation of the peaceful uses of nuclear energy; and what is the intended position of Euratom vis-à-vis the International Atomic Energy Authority.
  Mr. George Brown: I apologise for the length of this Answer, but after all this is an important Question. The non-nuclear weapon States would be prevented by the Non-Proliferation Treaty from manufacturing nuclear weapons or receiving the transfer of such weapons or of control over them. Far from
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  inhibiting the full and free interchange of civil nuclear information and assistance, the Treaty expressly endorses the right to such interchange. The Safeguards Article III of the Treaty would permit the International Atomic Energy Agency and the parties to the Treaty to negotiate agreements that take full account of the fact that some of the parties are members of a regional organisation that has its own safeguards system.
  Mr. Biggs-Davison: Does the latter part of that Answer mean that under the Treaty there would be no obstacle to a united European defence system developing its own nuclear weapons system?
  Mr. Brown: That is quite a different question either from the last part of the Question on the Order Paper or from my reply. I was dealing with a safeguards system which obviously raises the question in Europe of safeguards for Euratom. That is a different question.
  Mr. Pavitt: Is it not time, in addition to the long-performed ritual dances at Geneva and other places, that the Government should be seen to be taking a new initiative in discussions for disarmament? What has happened to the Minister for Disarmament?
  Mr. Brown: My right hon. Friend the Minister of State with special responsibility for disarmament is away this day engaged on a very relevant issue. We are still, of course, taking initiatives. The fact that this Treaty has so nearly reached a successful outcome and so nearly reached the point where nations can be invited to sign it, owes a great deal to what first my noble Friend and now my right hon. Friend have contributed.

  " BRITAIN IN EUROPE " (GRANT)
  Mr. Martenasked the Secretary of State for Foreign Affairs for what precise purposes have the public funds allocated to Britain in Europe Limited, of Chandos House, S.W.1, been increased to £7,500 this year and if he will make a statement.
  Mr. George Brown: The grant-in-aid to "Britain in Europe" is to assist that

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  organisation in promoting a proper understanding in Europe of the British point of view on European affairs.
  Mr. Marten: Now that the Government's attempts to get into the Common Market appear to have collapsed—as a minority of hon. Members forecast they would—why does money still go on being given to this promotional organisation? Was a similar amount of money given to the Anti-Common Market League so that we could have the great debate promised by the Prime Minister, or to N.A.F.T.A.
  Mr. Brown: That question seemed to get a lot of miss-shots into one barrel, if I may put it that way. [Laughter.] Perhaps they were blunt dum-dum bullets. I will work it out and do it better next time. Our position is that there is no reason at all for assuming that, what the hon. Member was kind enough to say he applauded, the effort to join a wider Common Market has lapsed. It has not. It remains and a great deal is still going on. This organisation and others—this is not the only one, a list was given by the Under-Secretary a little time ago in answer to a Question in the House—does more than just put forward our view about the kind of economic or political Europe we think ought to emerge, but also ensures that the British view about international affairs is made clear in Europe. I think that the limited amount of money which we grant to it is more than justified as there is great need for this work to be done.
  Mr. Jay: Is it not quite improper for the Government to hand out public funds to these sectional propaganda organisations at a time when we are having to economise on the National Health Service and all kinds of things? Will the Foreign Secretary do his obvious duty and terminate this waste of public money?
  Mr. Brown: I note my right hon. Friend's conversion to that view which is not one which he used to hold.

  SUEZ CANAL
  Mr. Martenasked the Secretary of State for Foreign Affairs if he will make a further statement on ships detained in the Suez Canal.
  Mr. Boyd-Carpenterasked the Secretary of State for Foreign Affairs when he now expects the British ships trapped in the Bitter Lakes to be freed.
  Mr. George Brown: I am continuing to do all I can to get the arrangements for the release of the ships restarted.
  Mr. Marten: Is the loan which is being negotiated with Egypt at the moment contingent on the right of the nations which own ships trapped in the Suez Canal to get them out? What are the terms of that loan?
  Mr. Brown: There is no such thing as a loan in that sense. Question No. 35 specifically deals with that subject.
  Mr. Boyd-Carpenter: What has happened to the optimism which the right hon. Gentleman showed a few weeks ago on this topic? As he now appears to rely on the international maritime community for protection of British shipping, will he organise it to put sufficient pressure on Egypt to secure the release of ships unlawfully imprisoned in the Canal for nine months?
  Mr. Brown: If the right hon. Gentleman thinks more closely he will realise that there is more than one source of responsibility for the fact that the previous arrangement we got started came to a stop. I am in touch with both Governments concerned and with the international agency and the other maritime nations concerned and of course with Mr. Jarring's mission. We are doing the utmost we can to get these arrangements restarted. Rather than trying to apportion blame or showing prejudice, I think that is the right thing to do.
  Mr. Colin Jackson: Can my right hon. Friend give an assurance that the United Nations mission is itself in touch with the Israelis and the U.A.R., bearing in mind that the original incident may have been caused by a misunderstanding? [HON. MEMBERS: "Oh."]
  Mr. Brown: Yes. My hon. Friend has a great deal of knowledge about this. He may be a great deal nearer right than those who take the opportunity to jeer. I can give an assurance that the Jarring mission is in touch with both sides, as we are, but I think that at this stage in our work the less I am asked to comment in public the better.
  Sir G. Nabarro: What help is Soviet Russia giving in this matter? Is the naval presence of Russian ships in the Mediterranean helping the right hon. Gentleman to free British ships locked up in the Suez Canal?
  Mr. Brown: I do not at first sight see the connection between that question and the Question on the Order Paper, but if the hon. Gentleman cares to put down a Question of course I will consider it.
  Mr. Henigasked the Secretary of State for Foreign Affairs whether it is the policy of Her Majesty's Government only to seek the reopening of the Suez Canal on conditions which enable the ships of all nations to make use of it.
  Mr. George Brown: Yes, Sir. In Her Majesty's Government's view any settlement of the problems of the Middle East must include respect for the right of free and innocent passage through international waterways for the ships of all nations.
  Mr. Henig: While I welcome that Answer, may I ask my right hon. Friend to tell the House whether he has made it clear to the United Arab Republic that any friendly pressure put on Israel to reach a quick agreement whereby the Suez Canal is promptly reopened must necessarily include the concession by the United Arab Republic that it shall then be open to the shipping of Israel as well as that of other nations?
  Mr. Brown: Our view has repeatedly been made clear, not least importantly in the resolutions which we carried unanimously through the United Nations. As to what concessions are made by whom at any stage in the solution of the various problems that go together to make up the Middle Eastern problem, I think it is probably better to leave that in the present state of affairs to the Jarring mission and the negotiations that it is having now.
  Dame Irene Ward: Is the right hon. Gentleman aware that so far as the British maritime position is concerned I do not think he is getting on very well for Great Britain? Will he get on a little bit better for Great Britain please?
  Mr. Brown: I never had much hope that the hon. Lady would ever feel other-
  932
  wise. But she might like to know that in regard to the Straits of Tiran we are getting along exceedingly well now. So far as the Suez Canal is concerned, as I have already said negotiations are proceeding and everything that can be done is being done. She may also be relieved to know that as a result of the closing of the Canal large tankers are being built—many of them—at the moment, which, of course, will mean that if the Canal stays closed much longer the need for it will be a good deal less. I have no doubt that the United Arab Republic has this thought in its mind.
  Sir Knox Cunningham: Can the right hon. Gentleman say when we are likely to get our ships out of the Suez Canal—in 1969, or will it be 1970?
  Mr. Brown: With great respect, that is a question which the hon. and learned Gentleman must realise I cannot answer. I shall get the vessels out as soon as I possibly can. There are 15 ships in the Canal, so other people are also concerned with this. Indeed, there are a lot of other interests in it. We shall all get them out as soon as we can. Meantime, it may help the hon. and learned Gentleman to know that the crews are being well taken care of, that replacements are occurring as required, that there are no problems any longer about provisioning them, and that I have just received from them my Great Bitter Lakes tie as a member of the club.

  EUROPEAN ECONOMIC COMMUNITY
  Mr. St. John-Stevasasked the Secretary of State for Foreign Affairs what representations he has received from the Benelux Governments; and what action he intends to take on the proposed Benelux plan to link Great Britain with the European Economic Community.
  Mr. George Brown: The Benelux proposals for closer integration in Europe were formally transmitted to Her Majesty's Government on the 19th January. We have accepted these proposals and we are in close touch with the other Governments concerned about the next steps.
  Mr. St. John-Stevas: Because of the plethora of plans, are we not in danger

  933
  of falling between three stools? Would not the best plan for the Government be to call an early conference of interested nations to discuss details of the Benelux proposals?
  Mr. Brown: The Benelux proposals and the much more recent Italian memorandum, which I had only over the weekend and which seems in many ways to reinforce and go along with those proposals, will be discussed at meetings which are to be held in the very near future. The Franco-German declaration is exceedingly vague and I am not clear how significant in all this it is, but we are ready to look at proposals made in each as soon as we receive them. Contrary to the hon. Gentleman, I think the way in which things are moving offers hopes which will lead to steps which in turn will lead to a wider membership of a more integrated Community.
  Mr. Henig: Will my right hon. Friend take care in these consultations not in any way to attempt to drive a wedge between France and her partners in the European Community, and will he also bear in mind that the Franco-German entente is one of the most hopeful developments in Europe since the war?
  Mr. Brown: I have no interest whatever in trying to divide France from her partners or France from Germany or the other way round. There would be no point in trying to join a widened European Community if we had succeeded in destroying the Community first. It is no part of our policy to do that. On the other hand, we must pursue our objectives in what we regard as our interests, and others must be as clear about our interests as we are about theirs.
  Mr. Maudling: As the Franco-German proposals could be of very great significance, would the right hon. Gentleman take positive steps to ensure that clarification is available to Her Majesty's Government as soon as possible?
  Mr. Brown: I find it very hard to know on what the right hon. Gentleman can base his first assertion, because there are no proposals. There was a declaration but there are no proposals. However, I have certainly been in touch with the Dutch—the Dutch Prime Minister and Foreign Minister were here last week—with my German colleague and with
  934
  the French and the Italians, and have made perfectly plain that we should like to see what this means in terms of proposals so that we can see whether they are significant and whether we can help with them and turn them into realities.
  Mr. Henigasked the Secretary of State for Foreign Affairs what consideration he has given to the possibility of temporary association under Article 238 of the Treaty of Rome between the United Kingdom and the European Economic Community.
  Mr. George Brown: We have, of course, looked into the possibility of some form of association with the European Economic Community. But I have consistently made clear the difficulties which would attach to any form of relationship with the Community which fell short of full membership.
  Mr. Henig: Does my right hon. Friend realise that his answer will give some disappointment to friends of this country inside both the E.E.C. and the European Free Trade Association? Further, is he aware that what is being suggested is simply that he look at the possibility of a temporary form of association, during which period Britain and the E.E.C. could harmonise their policies in a variety of fields, with a view, in the end, to the aim which he desires?
  Mr. Brown: I hope that I have not given disappointment to any of my friends; I often do to others. On the question of association, my hon. Friend must, with respect, take into account that any form of arrangement which left us with obligations but no rights or powers to influence what happens, and then the need to enter at some later date on terms which we had not ourselves influenced, would seem to me to have nothing to commend it to the country at all.
  Mr. Bruce-Gardyne: Will the right hon. Gentleman assure us that, if the French and German Governments were to come forward with proposals for a free trade solution embracing the European Community and the countries which apply for membership, Her Majesty's Government would welcome such a proposition?
  Mr. Brown: Had we not better wait to see whether they come forward with anything, and, if they do, what it is?

  PERSIAN GULF (BRITISH FORCES)
  Mr. Blakerasked the Secretary of State for Foreign Affairs what consultations took place with Governments in the Persian Gulf about their offer to contribute towards the cost of stationing British troops there; and why the offer has been declined.
  Mr. Fisherasked the Secretary of State for Foreign Affairs whether he will accept the official offer received from the Rulers of State in the Persian Gulf to defray the cost of leaving British forces in the area after 1971.
  Mr. Goronwy Roberts: I would refer the hon. Gentlemen to the replies which my right hon. Friend the Secretary of State for Defence gave to the hon. and gallant Member for Lewes (Sir T. Beamish) on 14th February and which I gave to the hon. Gentleman the Member for Blackpool, South (Mr. Blaker) on the same day.—[Vol. 758, c. 1346–7 and c. 368–9.]
  Mr. Blaker: Will the hon. Gentleman deal with the point with which his right hon. Friend did not deal on those occasions? The Secretary of State for Defence referred on 22nd January to the need to establish an alternative basis for stability in the Persian Gulf, as, indeed, in South-East Asia. What are the Government's ideas about how that alternative basis for stability should be established?
  Mr. Roberts: I think that the Question was directed towards whether consultations had taken place between us and the Rulers and why their offers had been declined. I think that what the hon. Gentleman now raises is another matter. However, on the question of consulting the Rulers, after carefully considering the offers we told the Rulers that they were not acceptable to us, and the reasons for this were fully explained to them. As a result of that discussion the decision was unchanged, and it still stands.
  Mr. Fisher: Would not the hon. Gentleman acknowledge that our forces are a stabilising influence in the Gulf, that our only reason for withdrawing them is financial, and that if the beneficiaries pay, that reason falls to the ground? Why are we refusing from the
  936
  Trucial States the very thing we are actively seeking from the West Germans?
  Mr. Roberts: It is not the position that only our military presence has up to the present formed a guarantee of stability in the Gulf. There is a good deal to be said for enabling these States to achieve a successor system of security from our own resources, possibly with guidance and help from their friends. As to the question of the cost, this is a large and complicated question, and I would refer the hon. Gentleman to the Answer to certain hon. Members who raised the subject on 14th February given by my right hon. Friend the Secretary of State for Defence who said that he would consider making available further information on this subject when the statement on the Defence Estimates comes to be debated.
  Mr. Maudling: But as no effective consultations took place with the Rulers before their offer was rejected, cannot the hon. Gentleman now give some indication of the economic calculation upon which this very important decision was based?
  Mr. Roberts: As I have said, it is a very large and complicated question. The right hon. Gentleman and other hon. Members raised it on 14th February, and my right hon. Friend the Secretary of State for Defence, quite rightly, said that he would consider making further information on this very complicated matter available to the House when the statement on the Defence Estimates came to be debated.
  Mr. Leadbitter: Does my hon. Friend agree that the offer by the Rulers to pay for British troops carries with it a very dangerous condition indeed, namely, the power to deploy British troops to the satisfaction of the Rulers, and that this is a condition which this country could never afford to accept?
  Mr. Roberts: I hope that nothing will be said to make less possible the successful outcome of the very encouraging developments in the Gulf these days where the Rulers are coming together and talking constructively of plans for co-operation and even for unification. As to the question of control, this would, of course, arise if an offer of this sort

  937
  were accepted, and it was one of the factors which decided Her Majesty's Government not to accept the offer.

  UNITED NATIONS (UNITED KINGDOM ROLE)
  Mr. Juddasked the Secretary of State for Foreign Affairs whether he will make a statement on Her Majesty's Government's policy regarding their rôle in the United Nations and its specialised agencies following Great Britain's military withdrawal from east of Suez.
  Mr. Goronwy Roberts: Yes, Sir. In my right hon. Friend's speech to the General Assembly on 26th September, 1967, a copy of which is in the Library of the House, he reiterated the firm belief of Her Majesty's Government in the United Nations and in all it stands for. This belief, and our determination to work in the most practical way for the fulfilment of its ideals and aims, are in no way affected by the decision to accelerate the withdrawal of troops stationed east of Suez. We strongly support the peacekeeping activities of the United Nations, and shall continue to play an active part in them.
  Mr. Judd: Will my hon. Friend agree that the logic of recent defence and foreign affairs policy decisions is that we are more rather than less dependent on the international community for our own economic well-being, and must we not, therefore, now give the highest possible priority to working through international institutions in terms of practical foreign policy?
  Mr. Roberts: It has been and will continue to be Her Majesty's Government's policy to support the United Nations fully and, in particular, through its specialised agencies, including the peacekeeping operations.

  MIDDLE EAST
  Mr. G. Campbellasked the Secretary of State for Foreign Affairs if he will make a statement on the situation in the Middle East.
  Mr. Colin Jacksonasked the Secretary of State for Foreign Affairs if he will make a statement on the current situation in the Middle East.
  Mr. Ridsdaleasked the Secretary of State for Foreign Affairs whether he will make a further statement on the work of the United Nations special representative in the Middle East, and, in particular, the progress that is being made to secure the reopening of the Suez Canal.
  Mr. Waltersasked the Secretary of State for Foreign Affairs if he will make a statement on the situation in the Middle East.
  Mr. George Brown: I explained the situation to the House on 24th January. I do not think that any further statement on my part would be helpful or appropriate at present while the mission of the Special Representative of the Secretary-General in the Middle East is in progress.
  Mr. Campbell: Are the Government considering further action towards a settlement in order to supplement the work of the United Nations representative Mr. Jarring and also to be taken when he has exhausted all the possibilities which are open to him?
  Mr. Brown: I have no reason to think that such a moment will arise. We are at the moment working closely with him, closely with the United Nations, closely with the parties directly concerned and with our friends and allies in order to make a success of the mission. I believe this to be the likeliest way in which we shall reach a solution of this very complex problem. I am sure that we shall continue to work as we are at the moment.
  Mr. Jackson: Bearing in mind the United Nations resolution on Jerusalem and our own resolution of 22nd November, what representations have Her Majesty's Government made to the Israeli Government concerning their tightening economic and political grip on Old Jerusalem?
  Mr. Brown: We are in touch with both the Israeli Government and the Arab Governments about things which are done by any of them which make this a more difficult problem to solve. I do not wish to seek out anyone for public mention here, but my hon. Friend may take it quite certainly that I am in touch with each of them about the need for not

  939
  making the problem more difficult than it inevitably is.
  Mr. Ridsdale: Is the right hon. Gentleman aware that some of us think that he is being complacent about this, especially over the Suez Canal? The resolution of the United Nations was passed on 22nd November. What further steps are being taken at the United Nations to raise this question again, in view of the long time it is taking? It is urgent that something be done soon.
  Mr. Brown: It is the impatience which the other side of the House show which led to the original Suez disaster. There is a good deal to be said for patience here. I can think of nothing which would contribute less at this moment than the course which the hon. Gentleman recommends, namely, taking the matter back for public debate in the United Nations. I am sure that the right thing is to try to create a situation in which the Jarring mission can succeed. If I have the hostility of right hon. and hon. Members opposite on this question, I am very glad to have it.
  Mr. Shinwell: Is not my right hon. Friend correct and wise in his statement that a negotiated settlement between the United Arab Republic and the State of Israel is much more likely to succeed than intervention by the United Nations? Is it not possible that the grant of a loan to the United Arab Republic, with certain conditions relating to passage through the Suez Canal, an assurance to the State of Israel of security in the future and possible negotiations between the two parties, would be likely to provide a solution?
  Mr. Brown: One of the things which the Jarring mission may well succeed in doing—I hope that it will—is to lead towards a situation in which the various parties concerned—there are more than two—can come to direct negotiations; but that will come by stages, and I agree with my right hon. Friend that the right thing to do is to encourage it to come there. As to the security of Israel, I do not regard that as linked with any financial arrangements involving the United Arab Republic. As I said earlier, the question of a loan does not really arise. If I can reach Question No. 35, I shall answer it and state what the position is.
  Mr. Walters: As the United Nations resolution provides the best hope of a settlement in the Middle East, is the right hon. Gentleman in close touch with the United States Government to see that they use some influence to try to bring about a settlement on both sides?
  Mr. Brown: Very much so. The contact between us is very close, both at Foreign Secretary level and at Ambassador level in New York. We are working closely together on the subject.

  LATVIA, ESTONIA AND LITHUANIA
  Mr. G. Campbellasked the Secretary of State for Foreign Affairs what is the present policy of Her Majesty's Government regarding recognition of the sovereignty of Latvia, Estonia and Lithuania.
  Mr. William Rodgers: Her Majesty's Government recognise that the Baltic States have been de facto absorbed into the Soviet Union, but have not recognised this de jure.
  Mr. Campbell: If we have not accorded de jure recognition to the annexation of these three States by the Soviet Union, how has it been possible to make an agreement with the Soviet Union involving the claims of British nationals against those States?
  Mr. Rodgers: There is no moral judgment involved in the recognition of reality, and what we were seeking to do in reaching the agreement with the Soviet Union was to help those who have been waiting many years for a settlement of their claims.
  Mr. Wood: In the event of these three countries recovering their sovereignty, will Her Majesty's Government accept the obligation to return to them the assets which we hold on their behalf?
  Mr. Rodgers: This is not the moment to deal with hypothetical questions.

  BRITISH HONDURAS
  Mr. Chichester-Clarkasked the Secretary of State for Foreign Affairs when he expects to receive the report

  941
  of the mediator with regard to problems concerning British Honduras outstanding between Guatemala and the United Kingdom.
  Mr. Goronwy Roberts: I cannot say when the report is likely to be received. As I explained to the hon. Gentleman on 5th December, 1967, it is for the mediator to disclose his recommendations when he feels ready to do so.—[Vol. 755, c. 268.]
  Mr. Chichester-Clark: Is the hon. Gentleman prepared to repeat the earlier assurances given to my hon. Friend the Member for Torquay (Sir F. Bennett) and others that, in the event of a constitutional change in the position of British Honduras, the voice of the people will be decisive, not that of the political parties?
  Mr. Roberts: This question was very adequately dealt with when it was raised and answered by my right hon. Friend the Secretary of State for Commonwealth Affairs and my hon. Friend the Minister of State. Our attitude is that we should stand ready to be consulted by the Government of British Honduras about the form of consultation, if necessary, at the time when matters arise from the mediator's report.
  Mr. James Johnson: Will my hon. Friend bear in mind the bitter opposition of the Official Opposition, led by Philip Goldson, and of the loyalist and Commonwealth elements in the country? Can he give an assurance on behalf of Her Majesty's Government that the usual forms of consultation will take place—talks at Lancaster House before independence and an election before independence—in the case of this Colony as with all other Colonies?
  Mr. Roberts: I can give the assurance that all proper forms of consultation will be followed in this case.
  Mr. Braine: Is the hon. Gentleman aware that there is still a great deal of anxiety on both sides of the House about this? If as a result of the promised consultation of the people after the mediator's report a majority come out against cession to Guatemala, is it the Government's intention to stand by the wishes of the people?
  Mr. Roberts: That is not a question that I can give an answer to now. It is a hypothetical question to which it would not be wise to give an answer. The answers which have been given are that we shall have the proper forms of consultation with the lawfully and democratically elected Government of British Honduras when the time comes.
  Mr. Maudling: Why cannot the Minister of State answer the question now? Are the Government saying that they want to retain the right to override the views of the majority of the people of this territory?
  Mr. Roberts: No, we have not said that at all. What we have said is that it is normal and proper for Her Majesty's Government to consult the lawful and democratically elected Government of British Honduras.
  Several Hon. Members—
  Mr. Speaker: Order.
  Mr. Chichester-Clark: In view of the unsatisfactory nature of that reply, I beg to give notice that I shall seek to raise the matter on the Adjournment.

QUESTIONS TO MINISTERS
Mr. Wood: On a point of order. As the Foreign Secretary is obviously anxious to answer Question No. 35, has he your permission to do so, Mr. Speaker?
Mr. Speaker: Ministers always have Mr. Speaker's permission if they request it. I have not received such a request.

HIXON LEVEL CROSSING (TRIBUNAL)
Mr. Speaker: Sir H. Legge-Bourke, point of order.
Sir H. Legge-Bourke: I am very grateful to you, Mr. Speaker, for giving me the opportunity to raise a point of order arising out of the Petition presented by the Solicitor-General at the beginning of Question Time today. It will be within your recollection and that of hon. Members who were present that the Solicitor-General petitioned the House for leave that the evidence given before the Select Committee on an opposed Private Bill,

943
namely, the British Transport Commission Bill, 1957, should be made available to the Tribunal which is inquiring into the Hixon level crossing railway disaster.
In rising to my point of order. I do not wish in any way to challenge the permission which the House has now given to the Solicitor-General. However, in fairness to my fellow members of that Committee, of which I was Chairman, it is only right that I should say that I was not informed that this announcement would be made this afternoon. In the interests of my fellow members of that Committee, who were the late Sir David Campbell, then Member for Belfast, South, and the hon. Members for Bootle (Mr. Simon Mahon) and Edinburgh, Central (Mr. Oswald), we ought at least to seek some method of ensuring that, when this evidence is read before the Tribunal, hon. Members who did their best to arrive at a right judgment on this matter will not in any way be compromised.
The Select Committee heard evidence from the Chief Signal Engineering Officer of British Railways, and a high official of the Ministry of Transport, Colonel McMullen, who had been on the Continent and had gone into this matter in great detail. I have read all the evidence again since the Hixon disaster. I would like to place it on record, having read all the evidence over again, that on the evidence which was put before my Committee I do not see that we could have arrived at any other decision than that which we came to.
The Solicitor-General (Sir Arthur Irvine): Further to that point of order, Mr. Speaker. I understand that the normal practice was followed in the case of the Petition which I presented today and the Motion which I moved and that it is not normal for notice to be given to the Chairman of the Committee concerned. One is attentive, I hope, to the courtesies of this place. I regret that the hon. Gentleman was not told in the time that was available that the Motion was to be moved.
On the wider point, I have no doubt that the evidence which the House has decided can be made available to the Tribunal will be treated by the Tribunal as evidence of fact. As for the rights of hon. Members, and in particular hon.
944
Members who served on the Select Committee, my right hon. and learned Friend the Attorney-General is appearing before the Tribunal and the House may be confident that he will carefully safeguard the interests and position of Members of the House.
Mr. Shinwell: I rise to a more limited point of order, not on this issue. Mr. Speaker, I am not quite sure what method requires to be deployed, but will you ensure that the rights of other Members of the House are not weakened by the introduction of Petitions during Question Time? Perhaps in future Petitions could be presented immediately after Questions.
Mr. Speaker: The time at which Petitions are presented is governed by the Orders of the House. This is certainly a matter which the House might consider. On the method of presentation of Petitions, right hon. or hon. Members who present a Petition can either read the Petition themselves or read part of it and have the full Petition read by the Clerk. It would always be better to do either one or the other—that is, either read the Petition themselves or present it formally if they wish the Clerk to read it.
On the larger issue raised by the hon. Member for Isle of Ely (Sir H. Legge-Bourke), first on the personal courtesy side, I am certain that the hon. Gentleman is satisfied by what the Solicitor-General has said. Perhaps I should emphasis that the Bill of Rights protects the proceedings of the House of Commons, which may not be called in question in any court or place. But to assist the proceedings of the law the House may allow reference to be made, as it has permitted in this case, to the evidence taken by a Select Committee. No court would presume to criticise the findings of this Committee, and that is not included in the Petition to which the House has agreed. As the Solicitor-General has told the House, the evidence will be taken merely as evidence of facts. I hope that this is clear to the hon. Gentleman.
Sir H. Legge-Bourke: Further to your Ruling, Mr. Speaker. I would humbly like to thank you for what you have said. Perhaps you will also allow me the opportunity of saying that I fully accept the Solicitor-General's apology.

SHELTON HOSPITAL (FIRE)
Sir J. Langford-Holt (by Private Notice)asked the Minister of Health whether he will make a statement on the fire at Shelton Hospital, Shrewsbury.
The Minister of Health (Mr. Kenneth Robinson): I deeply regret that 21 patients lost their lives in a fire at Shelton Hospital, Shrewsbury, last night. I have had a preliminary report from the Birmingham Regional Hospital Board which indicates that the fire started at about midnight on the first floor of a two-storey building which accommodates women psychiatric patients. Forty-two patients were sleeping on this floor at the time; they were mainly elderly and some were bed-ridden. Twenty-one of these patients have died and 14 are being treated at the Royal Salop Infirmary. Of these one is critically ill, one is seriously ill and 12 are suffering from shock and minor burns and are under observation. The ground floor was undamaged by the fire and the 56 patients sleeping there were unharmed. I have asked the Chairman of the regional hospital board to convey my sympathy to the relatives of those who have died and to those who have been injured.
An inquiry will be held into this tragic occurrence and I am in consultation with the regional hospital board as to the form it should take.
Sir J. Langford-Holt: I thank the right hon. Gentleman for that statement. He will know that this hospital was constructed 14 years before the Indian Mutiny, and this probably goes right to the heart of the problem. Will he be holding any inquiry to consider whether this opportunity might not be taken for a drastic review, not only of the buildings of this hospital but of other mental hospitals throughout the country?
Mr. Robinson: The House will know that we have a large number of old mental hospitals, but the fire precautions at this hospital were approved by the fire authority.
Mr. Moonman: May I also offer my sympathies to the relatives of those who have died in the fire? In view of the difficulties involved in maintaining safety and attracting staff to old buildings,
946
would the Minister make details available to the House, giving the staff-patient ratio in this hospital, as well as a full statement of staff-patient ratios in other hospitals? Will he also say where hospitals are more than 80 or 100 years old?
Mr. Robinson: I would be very glad if my hon. Friend would put down one or more Questions on this subject, to let him have the information that I possess.
Mr. Dean: We on this side of the House would wish to be associated with the expressions of sympathy which the Minister has expressed to those concerned and for those who have lost their lives in this tragic accident. May I ask the Minister two questions? He said that there would be an inquiry. Can he say whether the findings will be published and, secondly, in view of this tragic accident, will he ask all hospitals to review their fire precautions, particularly those hospitals where there are old people as inmates?
Mr. Robinson: On the second point, I will see what recent instructions have been given on this matter and, if further instructions are called for, I will see that they are issued. I would think that the findings of the inquiry will almost certainly be published, but I would just like, formally, to reserve my position until I receive the report.
Mr. Victor Yates: May I ask my right hon. Friend if he is aware that for some years past there has been criticism of the dangerous condition of this particular hospital? Will he look into this to see why such a building is not changed, in the interests of other hospitals, some of which are in a very dangerous condition?
Mr. Robinson: I was not aware of what my hon. Friend has alleged, and it seems to conflict with the statement that I have just made to the House about the fire precautions at the hospital being approved by the fire authority. I will be very glad to look into any information or evidence that my hon. Friend would care to put forward.
Mr. More: As one who has served for six years on the management committee of this hospital, may I ask the Minister whether he has had proposals for the replacement or rebuilding of the hospital,

947
a matter upon which we regularly failed to get any satisfaction from the Birmingham Regional Hospital Board?
Mr. Robinson: As the hon. Gentleman implies in his question, this is a matter for the regional hospital board, which has very large calls upon the resources that I am able to make available to it.
Mrs. Lena Jeger: While not expecting my right hon. Friend to anticipate the findings of the inquiry, is he aware that there is great public dismay because of a report that this ward was locked and that there was no attendant on duty? If that was the case, will he ask his hospitals not to follow what may be a very dangerous practice?
Mr. Robinson: My information is that this was the only locked ward in the hospital, and I am inquiring into this aspect. Contrary to what my hon. Friend has alleged in the second part of her supplementary question, I understand that this ward was not without an attendant.
Several Hon. Members Several Hon. Members rose—
Mr. Speaker: Order. Mr. Diamond, statement.

GOVERNMENT CONTRACTS
The Chief Secretary to the Treasury (Mr. John Diamond): The Government have reached agreement with industry on new arrangements for placing and pricing the non-competitive Government contracts covered by the existing profit formula. These arrangements will take effect immediately.
The then Minister of Aviation informed the House on 2nd March, 1966, that the Government were discussing with industry the need to secure a contractual right to equality of information and post costing. He also announced that the Government were inviting comments from industry, which had pressed for a review, on the profit formula used in these contracts.
Discussions on these two issues have been detailed and prolonged. They have proceeded in parallel, but the Government have made it clear that there can be no question of paying a price for the
948
equality of information which the Second Lang Report recommended for the fixing of fair and reasonable prices. To achieve genuine equality the Government has also insisted on the right to post-cost individual contracts. Industry has acquiesced in the use of new contractual conditions which meet the Government's essential requirements.
The Government and industry have agreed that the aim of the formula should be to give contractors a fair return on capital employed; that is to say equal on average to the overall return earned by British industry in recent years.
The yardstick will be the average of industry's earnings over the last seven years for which figures are available—1960–66. This gives a figure of 14 per cent. on capital employed.
Given the complex accounting issues involved there will be further urgent discussions with industry on the rates to be applied to achieve this aim.
The Government recognises the importance of fair profits for their contractors, and mean to ensure that outstanding efficiency should be rewarded. This can be done by agreeing a fixed price (which limits the Government's financial liabilities) at an early stage. This gives the contractor a strong incentive to increase his profits by improving his efficiency. Alternatively, target prices can be agreed with suitable profit-sharing provisions in appropriate cases.
The Government accept the view of the Second Lang Report that fixed prices freely negotiated should in general not be retrospectively modified. The main uses of post-costing would therefore be not to renegotiate prices, but to price follow-on orders, to check the accuracy of cost estimates and to provide necessary cost information. This should improve the quality of estimates and reduce the weight on Government Departments.
Nevertheless, arrangements must be made to deal with excessive profits, given that there is no competitive check on the agreed prices. With equality of information and post-costing the risk is substantially diminished, but selective post-costing may still indicate cases where excessive profits may have been earned. The basic issue will be whether the original price was fair and reasonable, and

949
whether the profit was fairly earned by outstanding efficiency.
Agreement has been reached on a proposal to set up an impartial Review Board, and to secure acceptance of its rulings by a new contractual condition. Both sides could refer contracts where profits of 27½ per cent. or more on capital employed and losses of 15 per cent. or more had been made, to establish whether any reimbursement, or compensation, was justified. In exceptional cases, the Board might review contracts referred to it by either side within these percentages where there was evidence that prices had not been fair and reasonable. In addition to reviewing individual contracts and giving rulings which both sides would agree in advance to accept, the Review Board would also be given the task of collating the evidence for a review of average earnings on contracts. For this purpose the Review Board would act in an advisory capacity. A review after three years, which could relate actual earnings on this work to the latest trends in overall average earnings of British industry, would be in the interests of both sides.
Mr. Higgins: As the Chief Secretary has said, these are highly complex accounting issues. Might I ask him to clarify three points? First, with regard to the figure of 14 per cent. which he gave, apparently as the level of rate of return of capital which the Government would expect firms undertaking these contracts to achieve, has that figure been calculated on a historic-cost basis for measuring capital or a replacement-cost basis, or a mixture of the two? Secondly, are we right in supposing that this is effectively the ex-post rate of return they expect to achieve so that the rates which are included in the contract would therefore be somewhat different—I would presume somewhat higher than these figures—which would give industry a basis for making investment decisions?
Thirdly, does the statement truly reflect the view expressed by the Lang Report, which was that it accepted the view that fixed-price contracts should not in general be retrospectively modified, but on the pure facts of the case, was not the final recommendation of the Lang Report that it would deprecate the idea of the Ministry having a general right to post-cost fixed price contracts?
Mr. Diamond: The answer to the first question is that the 14 per cent. is based on historic cost. The answer to the second question is that the rates in the respective contracts for cost-plus and noncompetitive risk contracts would be such as to secure, all told, the target over a period, of the 14 per cent. in commercial terms, to which I have just referred. With regard to the third question, the Lang Report, as the hon. Gentleman suggests, did not recommend post-costing. In paragraph 5(36) it says:
"We would deprecate the introduction of post-costing into Ministry of Aviation fixed price contracts…."
It went on to indicate circumstances in which it might be necessary to refer to post-costing. In the view of the Government, one cannot have genuine equality of information without post-costing.
Mr. Mikardo: May I ask my right hon. Friend two questions? First, does not he think that the two figures of 27½ per cent. profit and 15 per cent. loss are too high even allowing for the reservation that in some cases the matter may be investigated even if the figures are lower? Secondly, is it not obvious from his statement and from the questions of the hon. Member for Worthing (Mr. Higgins) and my right hon. Friend's answers that these matters are much too complex to be dealt with by question and answer? Therefore, would my right hon. Friend ask the Leader of the House to arrange a debate on this very important matter?
Mr. Diamond: I will arrange to have the attention of my right hon. Friend drawn to my hon. Friend's comments. With regard to the figures mentioned, this is a trigger mechanism, nothing more, as I am sure my hon. Friend appreciates. These are merely outside figures—either of extreme profit or of extreme loss in terms of return on capital—which if reached could compel a reference to the Review Board. Figures within that range might result in a reference to the Review Board. But I think that my hon. Friend would agree that one does not want to go into unnecessary detail when profits are within a reasonable band.
Mr. Boyd-Carpenter: Does the right hon. Gentleman's statement mean that in future, as in the past, the acceptable

951
rate of profit on a non-competitive Government contract will differ as between risk and non-risk contracts? Secondly, can he say whether the obligation under Standard Condition 43 to agree a fair and reasonable price will in future be laid down as relating solely to the particular contract of which it is a clause and not to the general relations between any particular firm and any particular department?
Mr. Diamond: The right hon. Gentleman is right in suggesting that there will be the distinction in future as before between risk contracts and non-risk contracts, both of the non-competitive variety. The "fair and reasonable" clause in the conditions applies to that particular contract.
Mr. Sheldon: In congratulating my right hon. Friend on his efforts to obtain equality of information and post-costing, may I ask him whether he can say if this will apply to present contracts already being carried out and also to those contracts already terminated but for which payment has not yet been made?
Mr. Diamond: No. With regard to contracts entered into but which are not complete in the sense that the price has not been fixed, it would not be right to compel, indeed it would not be possible to compel, a change in the contract terms. But when the contract is not complete in the sense that the price has not yet been fixed, it will be open to the contractor to opt for the new profit formula if he wishes to incorporate it in his contractual terms.
Mr. Lubbock: Is the Chief Secretary aware that everybody will welcome the agreement reached between the Government and industry in this matter and only regret that it has taken two years to achieve? Would he agree that it is very important, if we are to get the maximum incentive effect from fixed price contracts, to agree the fixed price as early as possible in the progress of the contract?
Mr. Diamond: It is agreed on all sides that an essential condition of securing efficiency and good relationships is to get the terms agreed as soon as possible, but, as the hon. Gentleman knows, in certain cases the complexities are such that "as
952
soon as possible "is bound to take a little time. It has taken some time to reach agreement. The hon. Gentleman knows that it takes two people to reach agreement.
Mr. Cronin: While I welcome my right hon. Friend's efforts to avoid excess profits, is he aware that it is rather disappointing that there are not direct financial incentives for increased efficiency on the part of contracting firms such as those practised by the United States Department of Defence?
Mr. Diamond: With respect, I think that there are direct incentives to increase efficiency, because once the price has been fixed, provided it has been fixed on a fair and reasonable basis and on the terms of full equality of information, there is every incentive for the contractor to improve his efficiency in production by every possible means and gain the profit which arises from that increased efficiency.
Sir A. V. Harvey: In the past, one of the weaknesses has been the insufficiency of Government cost accountants to deal with their side of the work which has led to delays and inefficiency. Is the right hon. Gentleman prepared to use outside help, either accountants or cost accountants, to speed up the work and to get early decisions and efficiency?
Mr. Diamond: That is a different question which I should have to consider very carefully in relation to the general request that public expenditure should be kept down. I realise that a number of elements come into that.
Mr. Dalyell: As a member of the Public Accounts Committee at the time of the Lang Report, I should like to express a very favourable reaction to my right hon. Friend's statement. May I ask him two questions? First, what are the functions of the impartial review body? Secondly, is he sure that these present measures do not make even more complex and difficult the job of the Inland Revenue?
Mr. Diamond: I can say "Yes" immediately to my hon. Friend's second question. I am grateful for his introductory remarks. The functions of the review body would be twofold. The first would be to decide whether in cases submitted under the trigger mechanism to

953
which I referred an additional payment should be made by the Government to the contractor or whether a refund should be made by the contractor to the Government having regard to the degree of profit or loss made and all the relevant circumstances which surrounded the contract. That would be a compulsory decision binding on the parties to the contract. The other function would be to review in three years the overall profit made by industry on Government contracts. We have not yet been able to get information of that kind, and it is necessary for goodwill in future.
Sir G. Nabarro: Whereas a 14 per cent. return to a contractor is not ungenerous with most contracts, would not the right hon. Gentleman agree that the nub of this matter is that non-competitive tendering, which amounts to cost-plus, should be reduced to an absolute minimum and that competitive tendering should always be enforced by the Government wherever practicable?
Mr. Diamond: Yes. I recognise that cost-plus tendering should be reduced to a minimum, but there are a number of contracts which are not of a competitive nature which, nevertheless, are not cost-plus, and it is those contracts in particular to which I am referring. All told, I think that there is about £600 million worth of contracts a year let on a non-competitive basis, of which about £200 million are cost-plus and £400 million are non-competitive risk contracts.
Several Hon. Members Several Hon. Members rose—
Mr. Speaker: Order. We must move on. We have a lot of work ahead of us.

ORDERS OF THE DAY

  PUBLIC EXPENDITURE AND RECEIPTS BILL
  Considered in Committee.
  [Sir ERIC FLETCHER in the Chair]

Clause 1.

  (CONTRIBUTIONS UNDER NATIONAL INSURANCE ACT, 1965.)
  4.0 p.m.
  Mr. Eric S. Heffer (Liverpool, Walton): I beg to move Amendment No. 2, in page 1, line 7, to leave out ' (in place of ' and insert:
  ' for increased employers' contributions (in addition to'.
  The Chairman: It would be convenient if at the same time we discussed Amendment No. 12, Schedule 1, page 6, leave out lines 1 to 40;
  Amendment No. 31, Schedule 1, page 7, leave out lines 33 to 46;
  Amendment No. 32, Schedule 1, page 8, leave out lines 1 to 11;
  Amendment No. 15, Schedule 1, page 6, line 22, column 2, leave out 12 8' and insert 12 2 ';
  Amendment No. 18, Schedule 1, page 6, line 22, column 3, leave out 15 1 ' and insert 14 7 ';
  Amendment No. 22, Schedule 1, page 6, line 29, column 2, leave out 11 0 ' and insert 10 6 ';
  Amendment No. 23, Schedule 1, page 6, line 29, column 3, leave out 12 6 ' and insert 12 0 ';
  Amendment No. 25, Schedule 1, page 7, line 16, column 2, leave out 14 1 ' and insert 14 7 ';
  Amendment No. 28, Schedule 1, page 7, line 16, column 3, leave out 16 6 ' and insert 17 0 ';
  Amendment No. 71, Schedule 1, page 7, columns 2 and 3, leave out line 19 and insert:
  | 1 0 2 | 1 3 9
  Amendment No. 29, Schedule 1, page 7, line 23, column 2, leave out 19 4 ' and insert 1 0 2 ';
  Amendment No. 30, Schedule 1, page 7, line 23, column 3, leave out 1 2 11 ' and insert 1 3 9 ';
  Amendment No. 16, Schedule 1, page 6, columns 2 and 3, leave out lines 22 to 31 and insert:

  £

  s.

  d.

  £

  s.

  d.

  0

  12

  5½

  0

  14

  10½

  0

  7

  3½

  0

  8

  5½

  0

  10

  9½

  0

  12

  3½

  0

  6

  1

  0

  6

  11

  Amendment No. 26, Schedule 1, page 7, columns 2 and 3, leave out lines 16 to 26 and insert:

  £

  s.

  d.

  £

  s.

  d.

  0

  14

  9

  0

  17

  2

  0

  19

  6

  1

  3

  6

  0

  12

  11

  0

  14

  5

  0

  17

  8

  0

  19

  9½

  Amendment No 17, Schedule 1, page 6, columns 2 and 3, leave out lines 22 to 33 and insert:

  £

  s.

  d.

  £

  s.

  d.

  0

  12

  1½

  0

  14

  6½

  0

  7

  0½

  0

  8

  3½

  0

  10

  6½

  0

  12

  0½

  0

  6

  0½

  0

  6

  9½

  0

  8

  3½

  —

  0

  6

  9½

  —

  and Amendment No. 27, Schedule 1, page 7, columns 2 and 3, leave out lines 16 to 28 and insert:

  £

  s.

  d.

  £

  s.

  d.

  0

  15

  1

  0

  17

  6

  1

  0

  2

  1

  3

  9

  0

  13

  2

  0

  14

  8

  0

  17

  10

  1

  0

  1

  0

  10

  1

  —

  0

  8

  4

  —

  As I have indicated, it will be possible, if desired, for there to be separate divisions, not only on Amendment No. 2, but on Amendments Nos. 15, 16 and 17.
  Mr. Heffer: I wish to direct my remarks particularly to Amendments Nos. 2, 17 and 27. It is possible that some of the points which I make in support of the Amendments will overlap. I therefore ask your indulgence, Sir Eric, if I should move from one Amendment to another. It is, however, the principle with which we are concerned.
  The object of the Amendments is basically to place the additional contributions on the shoulders of employers and not of employees. The Bill makes a combined contribution of 1s. a week for the employee and 6d. for the employer. My hon. Friends and I who have put down our Amendments take
  956
  the view that that is wrong because it places a totally unnecessary and intolerable burden upon the lower income groups. In addition, it reverses the trend which we have seen operating since the Labour Government came into office in 1964.
  Therefore, we believe that if it is essential to raise £50 million a year to overcome the deficit—and incidentally, on reading the Report of the Government Actuary, we find that six months ago the view was expressed that sufficient money would be coming in to meet the increased benefit, whereas six months afterwards we find that there will be a deficit of £75 million. It appears that someone cannot add up the figures.
  Nevertheless, we are told that we must raise £50 million a year. We say that if we have to raise that amount in extra contributions, the extra money should come totally or almost totally from employers and not from workers, and certainly not from the lower income groups. That is what we seek to provide in our Amendments.
  Unless it is amended, the Bill will reverse the trend which has started during the period of office of the Labour Government. We find, for example, that on 3rd June, 1963, the employee's contribution was 11s. 8d. per week and that of the employer 9s. 8d. In other words, the worker paid 2s. a week more contribution than the employer. On 29th March, 1965, however, after the Labour Government had come into office, the gap was beginning to be narrowed; the contribution of the employee was 13s. 8d. but the employer's contribution rose to 12s. 11d.
  Again, on 30th October, 1967, the contribution from the employee was 15s. 8d. and the contribution from the employer was 15s. 2d. a week. The gap was, therefore, narrowing and we had reached the position that the employee was paying only 6d. a week more than the employer. Unfortunately, the stage was never reached where the employer was paying more than the employee. Nevertheless, the gap was narrowing.
  In the Government's proposals which are now before the House, we find that the gap is reverting to what it was before. The contribution of the employee is to be 16s. 8d. and that of the employer

  957
  15s. 8d., an increase of from 6d. to 1s. in the gap to the disadvantage of the employee. We believe that this is wrong. In present conditions, with increased rents, increased prices of many commodities, increased local bus fares and the like, this is an intolerable burden which should not be placed upon the working people.
  Mr. Frank Allaun: I agree with the point which my hon. Friend is making, but has he not overlooked something which strengthens his case: that there has been a 5s. increase on the stamp for all workers, including low-paid workers such as engineering, railway and building labourers, who take home about £11 a week?
  Mr. Heffer: Since when?
  Mr. Allaun: Since 1964.
  Mr. Heffer: I was coming to that. In the case of the two previous extra contributions which had to be paid by the workers, extra benefits were given. On this occasion, no extra benefit is being paid out. As far as I can ascertain from searching the history of contributions, this is the first time that there have been extra contributions without any extra benefit accruing to those who pay the contributions. This, therefore, is fundamentally wrong. In putting forward our Amendments we wish that position to be changed.
  By our Amendment No. 17, we suggest that the Schedule 1 contribution for an employed person should be reduced from 12s. 8d. to 12s. 1½d. and from 15s. 1d. to 14s. 6½d. with corresponding reductions throughout for other employed persons. We are not suggesting that the self-employed should have a reduction. That category covers us as Members of Parliament. We would be paying the increased contribution, as would be the employer, although, incidentally, this might unfortunately have a bad effect on certain self-employed persons who were not earning very much money. In the main, however, this will not hit most people who are self-employed, and the object is to reduce the contribution of the employed person.
  Amendment No. 27 would increase the employer's rate of contribution from 14s. 1d. to 15s. 1d. and from 16s. 6d. to
  958
  17s. 6d., with increased contributions throughout. I need not detail them all.
  That is the object of the Amendments. We have worked them out as far as possible to make certain that the full contribution is placed where it should be placed: on the shoulders of the employer. I know that the argument will be used that if we put the full contribution upon the employer, that will increase the costs of goods and put up our export prices and that this would be a terrible burden for employers to bear. I would like to tell the Committee from experience what happens in other countries about these sorts of contributions. One has only to look at agreements which are reached between trade unions and employers in most—indeed, I would say, nowadays, probably in all—of the basic industries in the United States of America to find that the contributions for meeting insurance, health, pensions benefits come totally from the employers. For the workers these are non-contributory. So it is no good saying, "This is a terrible burden for our employers", because other employers in other counntries, the United States and many countries in Europe, bear the full brunt of the contributions for these benefits.
  Really the answer to this is that if the employers feel it such a burden, if we place this extra burden on to their shoulders, they should start doing something about modernising their industries in order to get greater productivity so that they can meet these extra costs. In the United States, in particular, when there are increased wages and increased contributions for the various social benefits, the employer usually reacts by increasing productivity by introducing new machines, new methods of production, and so on. These increases are a spur to productivity. I suggest that this is something we could also do in this country.
  Sir Cyril Osborne: If this argument is taken to the extreme and employers are made to rationalise to that degree there could be mergers, as between G.E.C. and A.E.I., and there could be factories closed, so creating other social problems. The price for efficiency can be too high in social terms.
  Mr. Heffer: Well, the hon. Gentleman is extending the argument a little far, and on to policy. I am quite certain, on the

  959
  basis of experience in other countries, that we can have much greater efficiency, and that this can act as a spur to efficiency. I base myself on experience in the United States particularly, and personal experience I had in visiting the United States and seeing the position there.
  I want to conclude by saying that I hope whoever of my hon. and right hon. Friends replies to the debate on this Amendment will say that the Government will accept these Amendments in their entirety. If they are not prepared to accept the Amendments I personally would certainly do my best to persuade as many as I can of my hon. Friends to go through the Lobby in order to vote that the extra contributions should be met by the employers and not by the employees as proposed in the Bill at present.
  Mr. J. J. Mendelson: In supporting this Amendment I wish to confine myself to three points only, because this debate would not be served by being lengthened by repetition, and my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) has already made the main case for this set of Amendments. My three points are these.
  4.15 p.m.
  First of all there is the question of policy behind the arrangements the Government have put into the Bill. This was referred to very sharply and very clearly by my right hon. Friend's predecessor in her office as Minister of Social Security. My right hon. Friend the Member for Lanarkshire, North (Miss Herbison), in the debate on Second Reading, interrupted my right hon. Friend the First Secretary when he replied to the debate and after he had made the point that he accepted a great deal of the criticism which had been made of the way these contributions were arranged. I quote what he said, because it gives meaning to the intervention of my right hon. Friend the Member for Lanarkshire, North. He said:
  "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."
  Referring to that point my right hon. Friend the Member for Lanarkshire, North, said:
  960
  "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 Is. on the workers? "—[OFFICIAL REPORT, 20th February, 1968; Vol. 759, c. 356.]
  That intervention had the full weight and responsibility of my right hon. Friend who had given such distinguished service in the office of Minister of Social Security. The question therefore arises whether this is not the key to the present dispute. Given the fact that the Government were not ready at this moment—I will leave that on one side for the present moment—the Government were not ready, for whatever reasons, to introduce our major new scheme which we put to the country in the General Election, and which we all hope the Government will put to Parliament one day, and the sooner the better—given that that is not being done at the present moment by the Government—what was the reply which the First Secretary, on behalf of the Government, gave to my right hon. Friend? This was his reply:
  "I accept that. Sharing was considered, but we have to weigh 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."—[OFFICIAL REPORT, 20th February, 1968; Vol. 759, c. 356.]
  I do not believe that my right hon. Friend the former Minister of Social Security was not aware, when she made her point in that intervention, that that was one of the factors to be considered. I suspect she must have been aware of it on previous occasions when this matter was considered in advance in the Government when she was still in office; she was not unaware that this point about costs was one of the factors; but she obviously was not persuaded that this was a sufficient reason for putting this additional considerable burden on the workers and not on the employers. I think, therefore, that it will be of considerable interest to members of the trade union movement and members of the Labour Party in the country that my right hon. Friend, who is a member of the National Executive, and has been one of the trusted leaders of the movement over many years, found it impossible to accept that point and, as a result, found it quite impossible to

  961
  support the Government in the Lobby at the end of the Second Reading debate. I find it strange that others of my hon. and right hon. Friends in the Government with the same antecedents find acceptable what my right hon. Friend the Member for Lanarkshire, North does not find acceptable.
  My second point concerns the argument used by my right hon. Friend the First Secretary in reply to that intervention. It is a traditional argument which we heard many times from the previous Administration when we were sitting on the other side of the Committee. Nothing is easier than for the Financial Times or the C.B.I. to produce the blanket argument that nothing extra can be put on the employers' contribution because it would increase costs. I think that my hon. Friend the Member for Walton dealt excellently with that point.
  In addition, we are now in a situation where burdens are being concentrated on the shoulders of the lower-paid workers in a number of different ways, and the first matter which many of us raised when the Prime Minister announced the measures that he envisaged after devaluation was our concern for the eight million lower-paid workers. That is felt by all hon. Members on this side of the Committee, and those of us who are particularly interested in these Amendments have no monopoly of concern in this matter.
  When it comes to the test of Government policy, it is obvious that many measures will flow from the Letter of Intent and from the policy which the Government are pursuing, and they will hit the lower-paid worker specially hard. Prescription charges will be of no great consequence to people at higher income levels, and the argument which has been heard whenever the subject has come up is that there will be exemptions. However, unless the Government produce an entirely new category it will not be possible to exempt lower-paid workers, since they are in full employment.
  This is a point of capital importance. Those people cannot be exempted, and, even if the Government were to introduce a new category which exempted several million workers in full employment, it is hard to see who would be left to pay
  962
  prescription charges. I would welcome such a move, but it would be a new departure, and I do not expect that the Government will do it.
  This is an additional shilling on the poll tax. With his usual fairness in debate, my right hon. Friend the First Secretary admitted that it is a poll tax, and he repeated the criticism of the poll tax which we had made when we were in Opposition. However, it means that the burden will be particularly heavy again on the lower-paid workers whom we on this side of the Committee are here to protect.
  I turn now to my third and last point, which concerns the position that will arise after many of these measures have been accepted and brought into operation. There are more apprehensions about the course of Government policy in these areas than the Government have been prepared to admit so far. When a major Government policy is first announced, many people do not get down to all the details of how it will affect them. Who can blame them? It is the task of Members of Parliament to do that. In view of that, I have never accepted the argument often advanced by implication from the Government Front Bench that we are agitated about these matters, that they are agitating matters for people who are active in the Labour Party and not for the general public. That is a completely fallacious argument. When these measures come to be introduced and people begin to see how they and their families are affected, there will be a spate of criticism which will outdistance anything experienced by the Government so far.
  I urge my right hon. Friends not to proceed with this imposition of the new burden, but, instead, to listen to what my hon. Friend the Member for Walton said in the Second Reading debate. The representatives of those who will be particularly hard hit by this new increase in the poll tax have the right to be heard. While no one claims to feel any more deeply than my right hon. and hon. Friends on the Treasury Bench about these matters, they have made a mistake and allowed themselves to be panicked into accepting the traditional case of the business community. They ought now to desist from that policy by accepting this set of Amendments.
  Sir C. Osborne: I want to say at once that, if an extra £50 million was imposed on British industry, I do not believe that it would break it or sink the export drive. That is sheer nonsense. It would have a marginal effect, but it would not break the backs of banking and industry.
  However, having listened to the speech of the hon. Member for Penistone (Mr. Mendelson), which he made with his usual aggressive persuasiveness, I wonder what sort of speech the right hon. Lady would have made if she had been sitting on this side of the Committee and a Conservative Government had introduced a measure of this kind. She would have played merry hell to an extent which very few hon. Members could equal. That is her dilemma, and, with your permission, Sir Eric, later in my speech I will refresh her memory about past events, because she is in the same position as that in which Philip Snowden was placed by Ramsay Macdonald in 1931. I feel sorry for the right hon. Lady—
  The Minister of Social Security (Mrs. Judith Hart): The hon. Gentleman need not.
  Sir C. Osborne: I was hoping that she had some sense of political honesty. If she has not, let her have it her way.
  The hon. Member for Liverpool, Walton (Mr. Heffer) said that the extra shilling places an intolerable burden on the lower-paid worker. Although that is an exaggeration, it is partly true. It is a criticism which has been made many times by hon. Gentlemen opposite when they have sat on these benches.
  The hon. Gentleman pleaded that if the extra shilling were all put on industry and employers were compelled to bear it, they could do so quite easily. I think that there is more truth in that than the hon. Gentleman realises. After all, 42½ per cent. of industry's profits go straight back to the Chancellor, and that means that 42½ per cent. of the extra £50 million placed on industry would have to be paid by the taxpayer. The whole burden would not fall purely on private profits, because nearly half of them go straight to the Chancellor. He would have to bear his share.
  The hon. Gentleman went on to reason that this would do what similar actions have done in America, driving employers
  964
  to greater and more ruthless efficiency. I beg him to think of the social price that that might involve. The Government are striving for greater efficiency, and it is they who have caused the two great electrical firms of A.E.I. and G.E.C. to come together. It was a Government Agency which encouraged it. What does the hon. Member for Woolwich, West (Mr. Hamling) think about that? He thinks that efficiency has been bought at too high a social price, and, having spent my life in industry, I agree with him. There is a point beyond which I would not buy efficiency at the cost of social consequences.
  The logic of the argument of the hon. Member for Liverpool, Walton is that he would urge us ruthlessly to fill our factories with the latest and finest labour-saving machines. Consequently we would swell the ranks of the unemployed even more than they are today. Does the hon. Gentleman want that?
  4.30 p.m.
  Mr. Mendelson: Whatever some of my right hon. and hon. Friends might have said were we in opposition, the hon. Gentleman has always been consistent. He was always in favour of putting the burden on the workers; not on the employers.
  Sir C. Osborne: That is a damn lie—[Interruption.]
  The Chairman: Order. That is un-parliamentary language and the hon. Member must withdraw it.
  Sir C. Osborne: I withdraw the words, but the truth remains. The hon. Gentleman knows it. It is quite untrue.
  Mr. John Hynd: On a point of order. Is it in order for an hon. Member who is asked to withdraw an un-parliamentary expression to do so with such a qualification?
  The Chairman: I would prefer it if the hon. Member gave an unqualified withdrawal.
  Sir C. Osborne: I will do it willingly at your bidding, Sir Eric. But I still have my ideas as to what is true. Therefore, through you, I appeal to the hon. Gentleman the Member for Walton, who is at least a reasonable person and knows something about

  965
  industry from the union side. If his argument were taken to its logical conclusion, the price we would have to pay in social consequences would be enormous, and hon. Gentlemen opposite know what I mean. If the right hon. Lady were this side, she would say that the Government were buying efficiency too dearly in the lives and working conditions of the poorest people. This is what she is asking us to do and this is what the Government are doing. That is why I think that the whole concept of the Bill is wrong, not only this Clause.
  I will remind the Committee of the conditions under which this extra 1s. is being imposed. I think it is agreed on both sides that, towards the end of the coming year, the cost of living will go through the roof and the Government will not be able to stop it. But the Government are saying to the lower-paid workers, "We are very sorry for you about this. You will have to tighten your belts and bear the burden to help the Government out of their financial difficulties. We are going to impose a rigid wage freeze on you, too, to help you so to do."
  These are the conditions under which the extra 1s. is to be imposed. It is no use hon. Gentleman screwing their faces. They know that it is true. This is what makes it so iniquitous from my point of view.
  In addition, Government policy, as stated by the Prime Minister in his famous speech in July, 1966, is to change industry by squeezing out men here and putting them there. It is easier to squeeze men out of one set of jobs than to put them into another set. It is much easier to create unemployment than to find new jobs. This is what the Government have set themselves to do: create more unemployment, impose a wage freeze, and then put added burdens on the poorest workers and tell them not to squeal. I wish hon. Gentlemen opposite were sitting on this side and attacking the Government for so doing—[Interruption.] Come over to this side and do it now—[Interruption.] Tonight hon. Gentlemen opposite will have a chance of giving real evidence about where their consciences lie when they go into the Lobbies.
  There is another point about the general conditions. I come from the Mid-
  966
  lands. We are supposed to be immensely prosperous, but only last weekend it was stated that there are more men unemployed in Birmingham today than at any time over the last 20 years. That is because of the Government's policies. These are the conditions under which the right hon. Lady, in her new guise, is prepared to impose a greater burden on the poorer and the lower-paid workers. I would never have believed that she could bring herself to do it.
  With your permission, Sir Eric, I remind the Committee what a predecessor of the right hon. Lady—another famous member of the Labour Party—said when he was placed in the same unhappy, intolerable position. I am sure the right hon. Lady could use these words. He said:
  "I rise to discharge one of the most disagreeable tasks that has ever fallen to my lot."
  I think she will agree that is true.
  "It is no pleasure to call upon people to make sacrifices or to bear additional burdens "—
  I think that is true of the right hon. Lady, too—
  "and only a consciousness that those sacrifices and those burdens are necessary to avert far greater sacrifices and burdens makes my task this afternoon tolerable."
  Philip Snowden was forced by Ramsay MacDonald to say that on 10th September, 1931. She occupies this position and I should have thought she would never have accepted it. To my mind this is 1931 all over again.
  Mr. Mendelson: Now, now, now!
  Sir C. Osborne: The hon. Gentleman says, "Now, now, now!". You were good enough to say, Sir Eric, that we could deal with this problem in its widest aspects.
  Mr. Mendelson: The hon. Gentleman is certainly taking advantage of that.
  Sir C. Osborne: I am. That is what I am here to do. It is my job to oppose what I think is not good, and this is not good. That is why I am opposing it.
  In the same speech the spokesman for the then Labour-inspired Government said:
  "While I am no more enamoured of this tax than in the past "—

  967
  that is again what the right hon. Lady will say—
  "I feel that in the present circumstances it is a ready instrument for affording all sections of the community an opportunity to make a contribution to our needs "—[OFFICIAL REPORT, 10th September, 1931; Vol. 256, c. 297, 309.]
  The right hon. Lady will surely follow exactly the words and actions of Philip Snowden when he was reviled, as the hon. Member for Ebbw Vale (Mr. Michael Foot) knows full well, by the Left Wing, who, if they had the courage today, would give the same treatment to their Government this evening.
  I should like to make one more quotation. I have many more if I am challenged. One of the mildest of the Labour Leaders in those days was Jimmy Clynes. I would like the right hon. Lady to bear in mind what he said and to withdraw the whole of this beastly Bill. I am glad that the Treasury is represented, because I would like to pass this on to the Treasury, too. On 11th September, 1931, Jimmy Clynes said:
  "We cannot have real economy "—
  this is what the Bill is about—
  "by reducing the buying power of the people".
  That is what this will do to the lower paid worker. If we make him pay more in tax he has less to give his wife to buy food. I am interested to know whether hon. Members below the Gangway will support the right hon. Lady.
  Mr. Mendelson: The hon. Gentleman is supporting her.
  Sir C. Osborne: I am not. The hon. Gentleman is making a great mistake.
  Jimmy Clynes went on,
  "and we shall find very shortly these substantial reductions reflecting themselves in an increase of unemployment as well as in deepening distress among the more needy sections of the population."—0[OFFICIAL REPORT, 11th September, 1931; Vol. 256, c. 440.]
  Surely this is what hon. Gentlemen below the Gangway are saying, and this was said in 1931. Yet they are following the same stupid policy, which was usual in those days when we were in a financial jam. The way to get out of a jam is not by cutting and cutting, but by expanding. The whole concept of the Bill is wrong. The whole idea is wrong. The Govern-
  968
  ment have gone made. The way to get out of our difficulties is to produce more wealth and let everybody share it. The Government have gone crazy.
  The Chairman: Order. I must remind the hon. Member that we are not discussing the whole Bill, but only this series of Amendments.
  Sir C. Osborne: I understood from you, Sir Eric, that you would allow the debate to go fairly wide.
  The Chairman: I did not say anything of the kind. I said that this series of Amendments could be considered together, but the debate must be confined to them. We are not discussing the Bill as a whole.
  Sir C. Osborne: Then I shall come back to the question of the imposition of this Is. tax, which is germane. Are the workers of this country, compared with those of other countries, in a good position to bear this extra burden? That is a fair question, and I commend to the House an article by the City Editor in last Thursday's Evening News. The headline was:
  "British worker the poor man of Europe".
  It is true that he is less able than most of the industrial workers of Europe to stand the extra burdens which the Government are imposing on him. It is no good hon. Gentlemen opposite trying to run away from that. This is an extra burden on the shoulders of the poorest paid workers. The article said:
  "The British worker is now among the worse off in Europe."—
  This is under a Labour Government.—
  "Compared with the average European worker, he gets much less from his employer in the shape of social security, holidays, pension, sickness aid and bonus and is not even particularly well paid."
  This is the British worker, on whom the right hon. Lady intends to impose an extra burden. In the early 1950s British workers were the best paid in Europe, Switzerland and Sweden excepted. Today we are at the bottom of the league, and yet the right hon. Lady proposes to impose this extra burden on them.
  Hon. Members: We have had 13 years of Tory misrule.
  Sir C. Osborne: Hon. Gentlemen opposite have had three years in which to do something about it, but all they have succeeded in doing is deepening the gloom. It is no good them running away from the economic facts.
  In obedience to you, Sir Eric, I shall not go on although I have many good quotations which I could give the House. I suggest that hon. Gentlemen opposite who are keenly interested in the social consequences of economic cuts should go to the Library and read the debates of 1931. I have been reading them over the weekend.
  On 19th November, 1967 the Prime Minister made a broadcast, during which he made this promise:
  "It is the duty of the Government to ensure by special measures that when burdens have to be borne, those who are liable to be hardest hit are protected, and your Government will fulfil that duty."
  They are failing to do that. That is another promise which the Prime Minister has broken, and I regret that the right hon. Lady has allowed herself to sponsor this Measure.
  Mr. Ian Mikardo: I never listen to the hon. Member for Louth (Sir C. Osbcrne) without agreeing with some of the things that he says. This is not surprising, because invariably in the course of his speeches he says a dozen different things which conflict with each other, and the simple laws of mathematics establish that one of them at least is bound to be right.
  I agree with much that the hon. Gentleman said. Above all, I agree with what was implied in a large part of what he said, that the real division between hon. Members is not between Labour and Conservative or Liberal, between those who are brilliant and those who are mediocre, between those who are great orators and those who are less articulate, but that the real division is between those who say the same thing on whichever side of the House they sit, and those who say different things according to the side of the House on which they sit.
  4.45 p.m.
  I think it is broadly true of the hon. Gentleman that he has not changed his ideas much in moving across the Floor. Indeed I hope I am not being unkind if I say that I detect no evidence that he
  970
  has ever added to his ideas at any time. I hope that I might say of myself that it would be difficult to detect any notable difference between the views which I hold today on matters such as those before us, and those which I held when I was sitting on the other side of the House.
  During the Second Reading debate last week there was considerable discussion of the point which has been referred to shortly this afternoon, namely, the extent to which this poll tax, as everybody agrees it is, is a regressive tax, and therefore ought to be deplored. No one wants to use today's occasion to enter into any repetition, whether tedious or fascinating, if repetition can ever be fascinating, and I do not want unduly to labour the point; but it is a fact, and it ought to be re-stated, that this extra bit of burden, not a great deal of money in absolute terms, but added to many other things, is one more straw on the backs of the already overloaded working class, and especially the lower paid workers. This weighs far more heavily on the lowest paid than those who are not so low paid.
  Mr. Frank Allaun: Is my hon. Friend aware that there is a great deal of resentment among the workers about whom he is talking against people whom they describe as layabouts? I think that they are mistaken, because these form a tiny minority, but one can, nevertheless, understand the perturbations of these people who are to be made to bear the extra burden of 5s. a week since 1964, when the so-called layabouts will escape payment of this poll tax.
  Mr. Mikardo: That is a point, but, as my hon. Friend said, one is talking about so few people, that it is not a major point. The real point is that this 5s. cumulative is a considerable burden on the lowest paid people who can meet it only by cutting down expenditure on essentials. This is why this tax is wickedly regressive.
  Better off people meet it by cutting down on marginal things, on smoking, or on drinking, or they have a less expensive holiday, or they take it out of savings, or out of the weekly football pool, but the lowest paid workers have no such margins. They can meet this extra 5s. only by spending less on essentials. This is a tax on private expenditure which

  971
  affects the basic standard of living of only the poorest people.
  It is true that until today every one of the additions was mitigated by substantial increases in benefits, but I put it to the House that that fact is irrevelant to the regressive nature of the tax, because these substantial increases in benefits could have been financed in ways which were not regressive. The fact that there were benefits does not alter the regressive nature of the tax. It is this which makes it so objectionable to us all. The First Secretary saw this point clearly in his speech last week. If I may be allowed a small personal statement, I must say that on re-reading the Report of the debate and of my right hon. Friend's speech I very much regret—I offer my apologies for the fact—that during it I did not conduct myself with my normal restraint. He saw this point clearly, and we all saw it and we cannot get away from it. It is this above all which makes this Part of the Bill so objectionable to so many of us, and makes us so angry—perhaps angrier than we should ever allow ourselves to be within this Chamber.
  It will be objected, of course, that, if we tried to put the extra on to the employer, this would add to labour costs and reduce our competitiveness. On this, I would make three points. The first is the point of the hon. Member for Louth who fairly said, out of his experience as a businessman, that it would be nonsense to suggest that £50 million would put us on our knees. Let us bear in mind that the Government are subsidising private industry to the tune of £700 million. The only effect of the Amendment therefore would be to "claw back"—as the Treasury phrase has it about 7 per cent., and only 7 per cent., of the subsidies which private industry already gets from the taxpayer.
  The second point is that of my hon. Friend the Member for Liverpool, Walton (Mr. Heffer). If it is said that these increases in labour costs will make us uncompetitive in export markets, the question arises, uncompetitive with whom? With the West Germans, the French, the Belgians? I invite the House to compare—probably I do not need to, because every hon. Member knows these facts as well as I do, and most of them
  972
  better—what is laid upon the employer as a contribution towards social services for workers in this country with the similar obligation in, for example, all six countries of the European Economic Community. They will find that, without exception, our employers are let off far more lightly than any of their competitors. Therefore, it cannot be true that it is the social service burden on the employers which makes them uncompetitive.
  Third, how much is this burden? It is hard to strike averages and they can be a little misleading, but, if we are talking of workers earning about £15 or £20 a week, this extra shilling for which my right hon. Friend is asking represents between a quarter and a third of 1 per cent. on the pay roll. But, of course, the final cost of the product is not labour cost alone. That is only a percentage, which varies considerably from industry to industry and even from factory to factory and from product to product. Broadly speaking, however, throughout the engineering industries, labour costs are about 30 per cent. of final costs.
  If we can take that figure as the average, we can see that the increase in labour costs of between a quarter and a third of 1 per cent. will mean an increase in the cost of the product of about a twelfth to a tenth of 1 per cent. Will anyone in his right mind say that that will make the difference between our being competitive in export markets and not being competitive? It is chicken feed compared with the export rebates which industry has at times had, with S.E.T. payments, which industry has had and in some cases still has, with investment allowances, the increased competitiveness resulting from devaluation and all the rest of it.
  It is absolute chickenfeed, and therefore it will not stand up for a minute for the Front Bench to say—I hope that they will not try to "kid" us but will abandon this rather silly point—that this would put a burden on the employer which would seriously weaken British industry's competitiveness in export markets. On these grounds, I hope that, if the Government do not see the sense of this proposal, there will be a demonstration of opinion in favour of it in the Lobbies.
  The hon. Member for Louth invited some of us to go over there to oppose the

  973
  Bill. But it is no good going over there to oppose it. Last Thursday, the noble Lord the Member for Hertford (Lord Balniel) held forth for half an hour about what a rotten Bill it was, and, at the end, had to fulfil the task, which I fancy was extremely distasteful to him he is, after all, a decent and honourable man—of saying, "This is such a terrible Bill that we ain't going to vote against it." So I am going to stay over here to carry out opposition which really is opposition. I beg my right hon. Friends to have second thoughts; if they do, they will see that there is virtue in the Amendment.
  Mr. John Peyton: It was the hon. Member for Poplar (Mr. Mikardo) who got me to my feet, and I wish him well in his determination to provide a real opposition to the Bill. I know of no one who produces a more able blend of modesty and confidence with which to fortify his contributions. I say this without any irony, but I say also that it enables him to get away with murder and worse. He has been talking about the monstrous subsidies which are "given" to industry by a generous, openhanded Government, who open the horn of plenty for an industry which does not deserve it. But where on earth do the Government get this plenty before they so kindly bestow it on industry?
  I hope that the hon. Member for Poplar will concede that I have said some very similar things on both sides of the House. Wherever I have sat, I have objected to the endless meddling by Governments, of whatever colour, in things of which they are very inadequate masters. I greatly object to the perpetual practice of robbing Peter to pay Paul, of taking money from one pocket to put it in another. The height and depth of farce was reached and passed when the Government introduced the Selective Employment Tax. It is this constant desire to meddle to which I object.
  However, the hon. Member has always been reasonably consistent, and I only hope that he and his hon. Friends will make something of their opposition and make it bite and hurt, because there are one or two people on the Government Front Bench, known better to him than to me, who are suitable, ready-made victims for it.
  I am sorry that the right hon. Lady is no longer there, because, although I
  974
  do not wish to throw the Bill out neck and crop, as did my hon. Friend the Member for Louth (Sir C. Osborne), I would say that this is a mess into which the Government have got themselves. It has nothing to do with us. My attitude is perfectly simple: the Government have brought this on themselves and must find their own way out without either my support or my rather reserved condemnation of and pity for the inadequacies which they always show in facing the nation's problems.
  5.0 p.m.
  I am sorry that the right hon. Lady is not here. I can envisage the speech that she would have made from these benches. Vitriol would have been made to look like milk by the side of what the right hon. Lady would have delivered. I am sorry that she is not sitting by the side of the hon. Member for Poplar at the moment.
  Mr. Mikardo: The hon. Member is not nearly as sorry as I am that I do not have my right hon. Friend next to me.
  Mr. Peyton: The hon. Member is a very modest man. He would be the first to say that anything that he could contribute in his most fighting mood would be mild compared with what the right hon. Lady would say if she were to go on a crusade. It is for that reason that, merely as a student of oratory, I am sorry that we shall not be treated to an opposition speech from the right hon. Lady this afternoon.
  It was the hon. Member for Poplar who tempted me to my feet. He said that he and his colleagues were more angry than any man had a right to be within the walls of this Chamber. I must point out that hon. Members opposite do not always show the most convincing signs of that anger. There is a good deal of blank fire. The real missiles are not always obvious, at least to me. I very much hope that we shall see some of these weighty words carried into action.
  If hon. Members opposite are really talking in the same vein as some of the founders of their Party, and are burning with a righteous and almost holy anger, surely they will not confine themselves to speeches; when they come to a point such as this, on which they obviously feel strongly, they will surely

  975
  take effective action and not be content with a mere charade of words.
  I trust that some of them will still be seething with—if nothing worse—at least a nasty form of indigestion at the memory of the Prime Minister's unforgettable broadcast following devaluation—the most dishonest statement that was ever made.
  The Chairman: Order. The hon. Member must address himself to the Amendment that we are discussing, namely, whether the incidence of the increased contribution should fall upon the employer or the employee.
  Mr. Peyton: That is just the point that I am pursuing Sir Eric. In his broadcast the Prime Minister said that it was his purpose to protect the most vulnerable sections of the community—just the people to whom we are now applying our minds. It is that promise that has been broken. Here I interrupt myself to welcome the right hon. Lady back. I have been paying a tribute to her oratory, and expressing my great regrets—in which I was joined by the hon. Member for Poplar—that she was not in a position to make an opposition speech this afternoon. I ventured to express, with restrained modesty, the feeling that had she been in a position to do so the words which would have come from her mouth would have made milk seem like vitriol. I am sorry that we are going to have a real tergiversation on the part of the right hon. Lady, and that she will be defending these proposals instead of opposing them. However, such is my admiration of her that I have no doubt she will make a very good job of it.
  Remembering the Prime Minister's promise to give special protection for the most vulnerable sections of the community, and bearing in mind that, as the Committee must realise, those words meant nothing—as the Prime Minister's words always mean nothing I was expressing the hope that those hon. Members opposite who feel that the Government have brought the country and their party to this low ebb, and forced the Prime Minister to swallow his words, will not be content merely with words but will convert what has hitherto been a charade of words, in which no bones were broken, into a programme of action
  976
  which will put this Government where they should be.
  Mr. Michael Foot: I do not propose to follow the hon. Member for Yeovil (Mr. Peyton) in any great detail. My hon. Friends and I do not need any instructions about our conduct or consciences from the hon. Gentleman or from the hon. Member for Louth (Sir C. Osborne).
  The hon. Member said that he had been tempted to his feet. We did not know that he was so bashful. We do not rate his political chastity so high as that. It was interesting to note what tempted the hon. Member to his feet. It was not the considerations that we have been putting to the Committee about the difficulties of the lower-paid workers. It was not the question of the imposition of the stamp. That did not bring the hon. Member to his feet. It was when my hon. Friend the Member for Poplar (Mr. Mikardo) referred to the huge subsidies paid to private enterprise that the hon. Member thought that a faint, distant slur had been cast on some employers. That brought him to his feet. So we do not pay much attention to him.
  The hon. Member for Louth was not much nearer the mark. He described my right hon. Friend as a Philip Snowden. I must say that I have never seen the likeness. Philip Snowden was one described as a cantankerous spinster whose virtue no one dared or cared to assail. I have never looked upon my right hon. Friend in that way. The hon. Member's comparison was not very apposite.
  What we are concerned about is a measure designed to raise cash. It is a measure to help the Chancellor of the Exchequer.
  Mrs. Hart Mrs. Hart indicated dissent.
  Mr. Foot: My right hon. Friend shakes her head. I know that part of the Bill is designed to help cover up or make good the deficiency in the Insurance Fund, but other parts are designed to assist in carrying through the economic measures which the Government announced in January. We might have had a Bill merely increasing the insurance stamp by 6d. or 1s. to make good the deficiency as revealed in the Actuary's Report, but then the other parts of this Bill would not have been incorporated. I would not put

  977
  it past the Government's ingenuity to have postponed the introduction of this Bill if it had not been for the other considerations.
  Therefore, my right hon. Friend was not quite correct in saying that this Bill had nothing to do with economic measures. It helps the Government and the Exchequer in the sense that if the economic difficulties of the country were not as the Government seek to describe them—or if the Government did not think that they were as they seek to describe them—when the Government discovered a deficiency in the Insurance Fund it would have been possible for the Exchequer to make it good. It should have been especially possible for a Labour Government because we all remember the powerful criticisms made by the Labour Party in Opposition about the way in which Exchequer contributions to the Insurance Fund had been diminished over the years.
  This was one of our major criticisms of the Tory Administration's graduated pensions swindle, with its attempt to conceal—it was not concealed particularly well—these contributions into the General Fund. Thus, when the Labour Government discovered, as they did only recently apparently, that there was a deficiency in the Fund that had to be made good, the most natural response of Labour Minister should have been, "Let the Exchequer make this good. We have been arguing for years that too much Exchequer money has been kept out of the Fund."
  The Chairman: Order. No Exchequer contributions arise on this Amendment. We are discussing the relevant contributions between the employer and employee.
  Mr. Foot: I had intended to adapt my argument to this point, Sir Eric. When I began, I explained the purpose of the Bill—
  The Chairman: Order. I have explained to the hon. Gentleman what is relevant in discussing the Amendment.
  Mr. Foot: I have your point, Sir Eric. I am not sure that you have mine. I said at the beginning that the purpose of the Bill was to raise cash for the Exchequer. When I said that, my right hon. Friend contested it. I was, therefore, seeking to remove her apparent mis-
  978
  understanding of the situation and it was necessary for me to remove that to come to the question of how the money should be raised.
  This whole question must affect the argument of where the money will go, and I am saying that it will go partly to recoup the Exchequer. I follow that by saying that this money could have been provided by the Exchequer, particularly since many of my hon. Friends say, "If the Exchequer was not prepared to provide it, it was wrong for the Government to go to the workers and put such a heavy proportionate burden on them, and in particular the lower-paid workers". Thus, that alternative could have been adopted by the Government.
  Having excluded that alternative, the Government decided not to ask the Exchequer to make up this deficiency but to consider the question of dividing it between the employer and worker. The Amendment says plainly that we believe that that division has been wrongly made. It is true that later we will discuss the 6d. on the National Health contribution—which, naturally, raises extra and different points—and while we may say that it is possible to differentiate between the two, the worker who must pay the contribution does not try to differentiate between the health 6d. and the other 6d. They both come out of the same pocket. It does not make much difference to the worker which section is involved in the production of this money and, in considering whether it is right to impose this 6d., we must remember that later we will discuss the provision of another 6d., which is a further addition to the argument.
  Why did not the Government decide to make this choice? I will not rehearse the arguments adduced by my hon. Friend the Member for Poplar and others about the reply of the First Secretary, who said that it would add so much to industrial costs that it could not be contemplated as an alternative. However, the other answer was partially given in the debate, when it was pointed out that if one tries to equate the burdens which will be put on the employer as distinct from the employee, one gets into the inherent difficulty of accepting that this is unjust. Indeed, any way of raising extra money under the present Insurance Scheme is

  979
  unjust, and that has been the central charge of the Labour Party.
  5.15 p.m.
  The Labour Party's official policy has for years been against the present Insurance Scheme. No argument which the Labour Party has presented to the country over the past 10 years has been more consistent than this one. It is simply that any money raised under the Insurance Scheme on the old basis is unfair. That has been, and still is, our view—and the view of hon. Gentlemen opposite in this matter is not important in this context because they are in favour of a totally different scheme which involves a perpetuation of the injustice. Our argument is in favour of removing this injustice. We therefore cannot understand why the Government have not been prepared to adopt the Labour Party's own remedy for solving this injustice.
  The First Secretary's answer is that a new scheme is not yet complete. If that is the argument for persisting with this balance between employer and worker in the matter of contributions, I must assure the Government that it is an argument which we find impossible to accept. I have no doubt that a new scheme is complicated and difficult to work out. However, I have not the slightest doubt, knowing those who do this work in the Ministry and who, since October 1964, have been working in this sphere—and knowing the diligence and energy of my right hon. Friend—that a scheme could exist or does exist. I believe that if the Cabinet said to my right hon. Friend. "You can have the money and the Parliamentary time to introduce the Labour Party's own pension scheme, with the abolition of the poll tax", she would immediately reply, "Done.", and it would be introduced immediately and would be law within a matter of weeks.
  This being so, we are faced with the situation—that is, if my argument is correct—that some other Members of the Cabinet are trying to stop this from being introduced. We must discover why—[HON. MEMBERS: "And whom."]—an obstacle has been placed in the way. I will not bother with trying to discover who is involved because I am not concerned with personalities. I leave hon. Gentleman opposite to draw their own conclusions. I suggest that the Chan-
  980
  cellor will not allow it to happen, and while I do not wish to be personal, I suggest that while acting with the best motives, the Chancellor—
  The Temporary Chairman (Mr. Gorden): Order. Whatever the motives, they do not come within the terms of the Amendment.
  Mr. Foot: I was aware that my words were out of order the moment I had uttered them. However, that is the situation. The Bill which we had every right to expect has not been presented to us and I hope that my right hon. Friend will not reply to this discussion by attempting to justify what is being done in this measure. Indeed, I hope that no attempt will be made to justify it because this is an intolerable situation, especially at a time when so many other impositions are being placed on the lower paid worker. I hope, therefore, that my right hon. Friend will say that this is unjust—as unjust as it always was—and that this measure has been introduced as a result of general political factors which we must try to help remedy. Whatever she says, I trust that she will announce that it is the intention of the Government, because of the injustice of this and similar measures, to speed up the process of the plan for the abolition of the poll tax.
  I do not see why the Government should not announce immediately that such a scheme will be introduced this Session. It could make a considerable difference to our whole approach to this and many other affairs. I wish to help the Chancellor out of a hole and I assure him that such an announcement would help with his Budget. I urge the Government to consider the possibility, because of the unfair burdens being placed on particularly the lower paid workers by this and other measures, of completing their plans for the introduction of the Labour Party's own pension scheme so that it may come into operation early and be passed through Parliament this Session.
  If my right hon. Friend will say that she has Government sanction for achieving that, then that will be of great help. In the meantime, if she wants the support of her hon. Friends and the country, she will get it easily by merely agreeing to the Amendment. If it were to be made clear that henceforth there would be no increases in the poll tax on the workers

  981
  but that every time a deficiency occurred in the Insurance Fund the burden would be placed on the employer, thus bringing the proportionate burden nearer to that obtaining in many other European countries, there would be quite a lot of pressure from employers as well for us to go ahead with our plan.
  I am serious in my proposal. The Government should take note of our case and should accept one of the Amendments. The clearest Amendment would be No. 17. If the Government were to say that they would accept it, there would have to be some consequential alterations in other Clauses. We have had difficulty in working out the exact wording. I therefore hope that my right hon. Friend will not say that the detailed form of our Amendment is not acceptable. She knows full well what our case is.
  We suggest that the whole of the extra amount which the Government say they must raise in cash under the Bill should be raised from employers and that nothing should be raised by poll tax on workers. If the Government agreed to our suggestion, it would cause widespread satisfaction on this side of the Committee and in the country. It would awaken the country to the burden inherent in this form of insurance scheme. It would bring nearer the day when we get the full pension plan which the Labour Party promised that it would introduce.
  Therefore, our proposal is a serious one. We shall vote upon it, unless we get satisfactory assurances from the Government. When we vote upon it, the more people who vote for it the sooner we shall ensure the introduction of Labour's pension plan with no poll tax.
  Mr. John Pardoe: I shall confine my remarks now to the narrow point at issue. I hope to expand on the general issue on the Question, That the Clause stand part of the Bill.
  The narrow point at issue is whether employers should bear the whole of the increase. Whether or not hon. Members opposite intend to divide on this issue, I certainly intend to do so and shall vote for the Amendment. I was amazed to hear the hon. Member for Poplar (Mr. Mikardo) ask who had provided the opposition to the Bill. On past history it can be said that the opposition in the
  982
  matter of votes has come from the Liberals.
  Mr. Stanley Orme: Is not the hon. Gentleman saying that he will divide the Committee on an Amendment which is not his?
  Mr. Pardoe: I understand that under the rules of the House of Commons I am entitled to vote on any Amendment, whether or not I have put my name to it.
  Mr. Orme: We will do the dividing.
  Mr. Pardoe: Unfortunately, an Amendment standing in my name, which would provide a rather radical alternative, has not been selected. Even if hon. Members opposite do not intend to keep the Government's word for them, I shall attempt to do so. It seems rather hard that the burden of keeping people's word for them should fall on the Liberals. Later this week we shall attempt to keep the word of the right hon. Member for Streatham (Mr. Sandys).
  I agree with the Amendment—not with the detailed mathematics which have been expressed, but because, as I said on Second Reading, I believe that a social security tax—this is in no sense that—should fall as to two-thirds on the employer and as to one-third on the employee. The Amendments do not go as far in that direction as my suggestion undoubtedly would. However, they go some way towards it. I believe that that is the right division for the future burden of social security.
  No doubt the Government will say that this proposal would increase the cost of labour to the employer. Labour costs in Britain are not all that high compared with those of our major competitors. In the Common Market countries—we are always being told that this is the standard by which we should operate—employers bear a much higher proportion of the cost of social security—rightly so. If I have to choose between increasing employers' costs and increasing the cost of living of lower-paid workers, I know where my priority is and I know that I shall always choose to increase the labour costs of employers.
  Whether this proposal would add to employers' costs or not, raising the employee's contribution by 1s. will undoubtedly raise costs and create an inflationary situation. Whichever way it is

  983
  done, it will add pressure to inflation. I am amazed that the Government seem to think that an extra 1s. each week will not make any difference. An extra 1s. will not disturb any right hon. or hon. Member, but the Government are perhaps getting out of touch with people on the sorts of income where 1s. a week extra really makes a difference.
  I represent an area in Cornwall which has the lowest average income per head of any county. I know only too well that many of my constituents have to budget to the nearest 1s. It is easy for right hon. and hon. Members, especially those on the Government Front Bench, perhaps, to get out of touch with the facts of life of ordinary housekeeping and to forget the row of tins on the mantlepeice. There are such rows in many houses in my constituency, because my constituents have to budget very tightly.
  This is why, if I have to choose between the Amendment and the Government's proposal, I shall certainly choose the Amendment. Although hon. Members opposite did not force a Division on Second Reading, I hope that they will divide on the Amendment. Then we shall have an opportunity of voting for it.
  Mr. Orme: The debate seems to have centred round the question of the effect that the poll tax has on the lower-paid worker. I want to consider how the Government's proposal will affect the incomes policy and the desired redistribution of income.
  When the Labour Government first came to office in 1964, they started the process of redistributing income, taking into account the fact that the poll tax still existed, by imposing the greater part of any increases on employers. That was an interim measure leading up to the abolition of the whole scheme. The regrettable thing about the Bill is that this process is now being reversed and the largest part of the increase is being placed on employees.
  Further, this time there is to be no increase in benefit. My hon. Friend the Member for Penistone (Mr. Mendelson) very cogently pointed out that, although there was an increase of over 4s. 6d. in the contribution, benefits such as redundancy payments and unemployment pay were also increased. The regressive nature
  984
  of the step being taken under the Bill concerns us greatly.
  References have been made to my right hon. Friend the Minister of Social Security and to statements made by her predecessor in office. We shall await with interest what she has to say about the poll tax and the introduction of this Government measure. I want to hear the defence. I hope it is better than what we had from Government speakers in the debate last week. They begged the question and did not face up to the arguments. It was said that the matter would be dealt with later in a speech, but it was never reached. This measure will have a direct bearing on the Government's economic policy because it is one of many measures in this package deal which will hit the lowest-paid workers.
  5.30 p.m.
  I have here the T.U.C.'s Economic Review, the grey book which will be discussed on Wednesday. It deals mainly with the question of the lower-paid worker. It states in paragraph 10 on page 7 that there should be a basic redistribution of income within our society. It says in another paragraph that preferential treatment should continue to be given to lower-paid workers.
  In the section dealing with the social services the T.U.C. states that since the war a general argument has been advanced that the costs of the social services have consistently been outstripping productive costs and have been far in excess of what the country can afford to pay. We know that this is entirely wrong. In paragraph 12 the document says that these myths have now been thoroughly exposed and that reports about housing, schools, lower-income families and urban transport, to name only a few, have shown how great is the need for a further reallocation of resources. It states that this requires a transfer of income and wealth to the worse-off sections of the community. That is what the T.U.C. states in its document, and I am very pleased to read it into our record because we are concerned about that very section of the community.
  Are not prices going up? Will not all sorts of burdens fall on the lower-paid workers? What about the arguments we had in the House on the prices and

  985
  incomes policy? What was the Government's defence of that policy and the retrogressive legislation that was introduced? They said that it would benefit the lower-paid workers. Yet, on the other hand, the Government take direct measures completely to oppose that policy.
  I am not sure whether the Government are aware of the resentment that is felt about the insurance stamp among the working people. These people are not opposed to paying for something when they see that it is a direct contribution to the wellbeing of the country. But they have not been asked to pay and they have no chance of not paying. The money is deducted from their wages every week; they pay Income Tax by P.A.Y.E. In fact, the Government collect every halfpenny from them in the form of the stamp and the taxation. These people then see avoidance and all sorts of other things going on in the higher income groups, and there is a deep resentment because of this action. I do not believe that the Government appreciate what they are bringing upon themselves by these measures if these people feel that, it is not in the interests of justice as they see it and that there will not be a reallocation of resources and expenditure.
  I do not think that the Government realise the anger that will be felt against them when the full effect of the stamp, prescription charges and school milk measures are added up and the burden is placed upon the people who can least afford it. Those of us on this side who are opposing these measures are not doing it because we like it or because we think it is pleasurable to criticise. We are doing it because we feel that the Government are fundamentally wrong and going against everything that we stand for in relation to the abolition of the poll tax, school milk provisions and prescription charges—things on which we fought the General Election.
  This is why we feel so disturbed. This is why we reply to some of our hon. Friends who ask "Why are these issues raised?" that in a democracy it would be fatal not to raise them. It would be wrong if the feelings of the people were not expressed. I have consulted many of my constituents and many people in my party and discussed this fully and
  986
  frankly with them. They cannot understand why the Labour Government have taken such measures as these.
  I urge my right hon. Friend to look at this matter very seriously. We shall force this issue to a division; we shall vote for it. We shall do that because we feel that we ought to record our opposition to this measure. If this is not done in a Parliamentary democracy, the validity of Parliament, about which we hear so much criticism, begins to take a very sinister form. Therefore, we believe that this is a matter of paramount importance. This represents, at any rate to the Labour Party, a measure of basic importance. Consequently, I urge my right hon. Friend to accept the Amendment. Otherwise, I am afraid that we shall have to push it to a vote.
  Mr. John Hall: I intervene briefly in order to join the coalition of backbenchers that is arising, mostly in opposition to a poll tax. I am in considerable agreement with the speeches made from both sides on this issue. It occurs to me that if the backbenchers got together they could form a much better Government than the one now in office. Perhaps we might suggest to the present Government that they should stand down in favour of a coalition of backbenchers.
  Sir C. Osborne: It could not be worse.
  Mr. Hall: That is true.
  I come back to the points made with considerable eloquence about the effect of the growing cost of the insurance stamp, whether National Health or the total insurance stamp, on workers, whether lowly paid or not though it certainly imposes the greatest burden on the lowly paid. I think that one might find a definition for this, though so far it is not forthcoming.
  I have always been opposed to the increasing cost of the National Insurance stamp. I dislike poll taxes. I should like to see a change in our method of taxation so that we did away with stupid things like S.E.T. and the constant rise in the cost of Insurance stamps and had one tax, a payroll tax, which would cover the social security needs of the country.
  Like my hon. Friends, I do not think that the cost of this would impose an intolerable burden on industry. I believe

  987
  that if industry had to carry a high proportion of the cost of the social welfare of the country it would be a great stimulation to avoid the hoarding of unnecessary labour, a great stimulation to increasing the efficiency of production and a great stimulation to making industry basically far more efficient than perhaps it is now to meet the cost. I hope that the Government—I am sure that my own party will do so when it succeeds to office in the fairly near future—will give attention to this point.
  The arguments put from both sides of the Committee against the increase in the insurance stamp contribution on the ground of increasing hardship for workers who have to pay it without regard to their incomes are unanswerable. I say that they are unanswerable, but I am sure that the right hon. Lady will try to find a way of answering them. Hon. Members on both sides will listen with the greatest interest to hear how she explains away something which is fundamentally a contradiction of everything for which the Labour Party stands. Over the past three years, we have witnessed Ministers eating their own words to such an extent that they must all have had indigestion. One wonders what will happen today. How will the meal be made palatable to the right hon. Lady and to the Committee as a whole?
  I beg the right hon. Lady, if it is not too late and she is not speaking to a prepared brief, to consider carefully what has been said. I hope that, when we come to the point, hon. Members opposite who have tabled the Amendment will not be put off and induced to withdraw it by the thought, as it seemed at one time they might be, that they would have support from the Liberal Party. So often—I am sure that they will forgive me for saying this—we have heard wounding words directed at their own Front Bench which have not been supported in the end by a move into the Lobby.
  Mr. Mendelson: The hon. Gentleman should direct his advice at his noble Friend the Member for Hertford (Lord Balniel).
  Mr. Hall: I am not giving advice. I am making a comment on past history. I
  988
  hope that hon. Members opposite will make history today by voting for their own Amendment and showing their displeasure.
  Mr. James Dickens: Despite its somewhat unlikely source, the speech made today by the hon. Member for Louth (Sir C. Osborne) contained more than an atom of truth. He gave the Committee a series of quotations from a debate in the House on 8th-10th September, 1931. That debate was concerned with the National Economy Bill introduced at the direct instigation of the Federal Reserve Bank of New York.
  The Public Expenditure and Receipts Bill is but the first instalment of a broadly equivalent measure introduced by this Government to placate the International Monetary Fund and the Bank of International Settlements. Let no one misunderstand it. It means that, throughout this year, the British people will be subjected to a continuing stream of measures designed to hold public expenditure and, where possible, to reduce it.
  The Temporary Chairman: Order. The hon. Gentleman must address himself to the Amendment.
  Mr. Dickens: I shall come to it very quickly, Mr. Gurden. I am first pointing out that the decision to increase the National Insurance contribution, the decision imposed under this Bill which we seek to amend, is part of a general policy of trying to placate the I.M.F. and other outside financial interests.
  There is much opposition to this Bill in the House and in the country. For example, the T.U.C. is to meet at Croydon on Wednesday to debate the vitally important Economic Review, 1968. My hon. Friend the Member for Salford, West (Mr. Orme) made one quotation from that document. I shall make another, which has a direct bearing on the incidence of the National Insurance contribution on the employee.
  In paragraph 255, dealing with our tax system, the T.U.C. comes to this conclusion:
  "Many recent examinations, including those made by the Government, have shown that the British tax system, broadly defined, is not in practice highly progressive and is certainly not getting more progressive."

  989
  It gives three principal reasons for this. I shall not discuss the first and second, but the T.U.C. notes:
  "Thirdly, and perhaps most important, social security contributions constitute a flat-rate poll tax and are thus highly regressive. It has been estimated that people with less than £12 a week pay well over one-third of their incomes in indirect taxes and National Insurance.
  The overall effect of these three broad categories of taxation is that the total tax system is, if anything, more regressive at the lower levels of income. A survey published recently in the Government publication 'Economic Trends' showed that, for example, a household of two adults and two children earning £12 a week in 1964 paid in total 28 per cent. of their income in taxation, where a similar family on £2,000 a year paid only 25 per cent. of their income in taxation."
  That brings out clearly the highly regressive nature of the National Insurance contribution as it affects the lower-paid worker. Moreover, the incidence of this contribution is increasing in its severity on the lower-paid worker.
  5.45 p.m.
  In 1964, taking an average weekly wage of £12 a week, the proportion then devoted to National Insurance contribution plus National Health and Industrial Injuries contributions came to 4·9 per cent. In 1968, at £15 a week, the equivalent proportion is 5·5 per cent. So the regressive nature of the poll tax is increasing in intensity.
  Several hon. Members have drawn attention to the disparity between contributions made by employers in this country and employers abroad in respect of social welfare expenditure. It might be useful to examine what the average contributions are in this respect. In manufacturing industry, the Ministry of Labour found in 1964 that 3·6 per cent. of total labour costs were paid then by British employers in the statutory National Insurance contributions, with, in addition, a further 3·1 per cent. paid on private social welfare payments, making a grand total of 6·7 per cent. The Ministry of Social Security, in a more recent survey of countries in the European Economic Community, as at 1st January, 1967, drew up the following information on the employer's contribution which shows that it is markedly higher in every respect than it is in the United Kingdom. For example, in France the employer is paying 32·1 per
  990
  cent. of the employee's total earnings in respect of his contributions to the employee's pension, sickness, unemployment, industrial injuries and family allowances. The figures for other Western European countries also are much higher than they are here, ranging from 14·1 per cent. in the Federal Republic of Germany and the Netherlands to just over 50 per cent. in Italy.
  It can scarcely be argued, therefore, that the British employer is heavily burdened by social insurance costs. Neither can it seriously be argued, as my hon. Friend the Member for Poplar (Mr. Mikardo) pointed out, that the additional cost of this contribution levied on the employer would make it difficult for him to be more competitive in export markets. I do not remember that, when the 25s. per week of the Selective Employment Tax in respect of men aged 18 and over was debated in 1966, this was a cogent argument advanced in this House then.
  My hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) reminded us that during and since the 1950s there has been a tendency in this country to move away from the old Beveridge principle which, in 1942, set out to establish that in future British social insurance would be based upon a tripartite payment—one-third from employees, one-third from employers and one-third from general taxation. In this connection, it might be useful to refer to the Report of the Actuary, Cmnd. 3532. In Appendix 2, the Actuary makes the assumption that Exchequer supplements to flat-rate insurance contributions will, henceforth, be one-quarter of the flat-rate contribution in respect of employed persons. In effect, this means that we are now working to the principle, broadly, of 80 per cent. of the cost of National Insurance being contributed by employers and employees and 20 per cent. coming from the Exchequer. I want the Government to move away from that in the interim period before the production of a national superannuation scheme.
  My hon. Friend the Member for Ebbw Vale made a passionate appeal for the Government to introduce a national superannuation Bill in this Session. I fully support that appeal, but I think that we are both being somewhat optimistic in

  991
  making such a request for there can be no doubt that there will be no further improvements in British social welfare so long as we are at the mercy of I.M.F. economists. So, in echoing my hon. Friend's appeal, I believe that the Government can make a start tonight by withdrawing the imposition of the additional 6d. on the employee's contribution, and making a stand here on this first measure they are introducing to obey the dictates of international finance. This Government must stop running away; it must stand up and fight. I can think of no better occasion than that provided this evening to make a start to fight back in support of our principles.
  Mr. Albert Booth: I beg to move Amendments No. 16 and No. 26.
  The Temporary Chairman: Order. The time has not come to move those Amendments. The hon. Member may speak on them, but we must first dispose of Amendment No. 2.
  Mr. Booth: I beg your pardon, Mr. Gurden. The purpose of those Amendments is to reduce the proportion of the increase to be borne by the employee, and to increase the proportion to be borne by the employer. Although this may appear to be an attempt to water down the proposal of Amendment No. 1 in the name of my hon. Friend the Member for Liverpool, Walton (Mr. Heffer), that is not the case. I have added my name to his Amendment.
  My Amendments are designed to give an opportunity to the right hon. Lady to indicate that the Government are prepared to agree that there is a serious case to be made on the issue of the ratio of insurance contributions to be borne by the worker and the employer and to concede that in some small measure this would be a means of meeting the problem. I make clear at the outset that if the Government do not do this I shall vote in the Lobby for Amendment No. 17. I shall do so because that will be the only way to show clearly how repugnant I find it as a Labour Member, representing a constituency with a great many low-paid workers, to pass this abhorrent sort of measure.
  It would be serious at any time for the Government to introduce such increases
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  in a flat rate poll tax, but it is more serious at a time when there is such restriction on wage increases which could be obtained by lower-paid workers. No responsible trade union leader representing workers on low rates of pay could say that he could not press for an increase on their behalf at a time when they can refer him to the recent big increases in rent they have suffered. Some workers in my constituency have had their rents increased by 50 per cent. in the last six months.
  Such increases are analogous to the social insurance increases. In both cases there is an increase in payment for exactly the same amount of benefit, not an increase to bring about an improvement but for exactly the same service. Workers who are paying increased rents are living in the same houses as before. Workers who will have to pay increased social insurance contributions will receive exactly the same benefits. I should expect a Labour Government, when considering a measure such as this, to give very serious consideration to the limit at which a worker starts to pay the maximum contribution. That limit has been changed in previous legislation, but this legislation leaves it at £6. Any worker earning over £6 a week will have to pay the maximum weekly rate of contribution. A large proportion of lower paid workers will be faced with the necessity of finding the extra contribution. On these grounds alone this Measure is unacceptable.
  As a Parliament, we have to decide whether social insurance contributions should be a charge upon industry, a poll tax, a form of payroll tax, or to be met by a profits tax. All these are ways of dealing with the problem, but at present we meet the cost of social benefits partly from taxes and partly from contributions. We have to concern ourselves primarily with the proportion of the contribution that comes directly from employee and employer in relation to the benefit received. I agree with hon. Members who have made comparisons between this country and other countries in Europe. I shall make some comparisons, but not on the same basis. I shall not compare the percentage of the total cost of the benefits borne by the employee and by the employer.
  It is more appropriate to consider the relationship between the amount paid by

  993
  the employer and the amount paid by the employee in other European countries. In France, the employer pays five times as much as the employee. In the German Federal Republic the employer pays one-sixth more, in Belgium two and a half times a; much, and in Italy—which has staged a remarkable economic recovery—the employer pays eight times as much. In Luxembourg the employer is paying 60 per cent. more than the employee.
  The effect in those countries has not been to stop improvements in social benefits; in fact, they have been quite considerable. The effect has not been to price them out of the market, because of the cost of their goods. Most of those countries have rates of economic growth which compare favourably with our own. The only conclusion one can draw is that this is beneficial to industry and beneficial to social insurance benefits. Therefore, it is a course which should commend itself to the right hon. Lady.
  If we continue to finance social benefits by a poll tax, falling equally on all workers, we will arrive at the situation where we will be unable to improve social benefits because the financing of those benefits will be circumscribed by the level which the lower-paid worker can afford. That would be an unreasonable thing to expect and we should reject this Clause in its present form and support the Amendment.
  6.0 p.m.
  Mr. Emrys Hughes: I notice that the names on this Amendment are of Members representing English constituencies. It would be a mistake to think that the points of view and the arguments contained in the Amendment are not widely shared in Scotland. In my constituency there is considerable discontent about the increases in different payments that have to be paid by the low paid workers. A great many speeches have been made since the noble Lord the Member for Hertford (Lord Balniel), who leads for the Opposition, was instancing various categories of exemptions and referred to the lower-paid worker. I asked him what a lower-paid worker was. Like Pilate, when he was asked about truth he did not stay to answer but referred it to the Government Bench. We have had frequent references to the lower-paid worker. What income
  994
  does one need in society today? I remember the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd) arguing that anyone below £5,000 a year was in poverty. There must be a very large percentage of the population who are lower paid workers.
  Mr. Peter Tapsell: The hon. Gentleman is slightly distorting what was said a good many years ago. What was said was that someone on £5,000 a year could no longer, as in the past, be regarded as very rich. This is a very different thing.
  Mr. Hughes: There is a subtle ideological difference which should not be allowed to get into this argument. There are all kinds of ideas on what constitutes a lower-paid worker. Members of Parliament sometimes argue that, compared with directors of nationalised industries, they are poorly paid workers. I travel down from Scotland on a plane with executives who would regard Members as low-paid workers. There is a question of relativity in all this.
  These arguments do not enter into the considerations of those of us who live in areas like mine and the right hon. Lady, who is my next-door neighbour, where there are a good many people having to face the fact that as a result of pit closures they must look for other occupations. Some of them have to take up employment in industries where wages are lower than in mining. They consider that the lower-paid worker is someone who does not earn the average wages earned in the coal-mining industry. In that industry a considerable proportion of people would be classed as lower paid workers because, after they have the stamps deducted, about which we are talking, and all the other impositions, their income is very low indeed.
  This especially applies to women workers. I recently visited a new factory where girls working on machines were producing shoes for export. Some earned £7 or £8 a week. That is not a magnificent income these days, but it was a higher income than that of the girl who had to travel a long distance to work. Because of the changes in industrial conditions, people are having to look for jobs in other parts of the county, travelling long distances from their homes. Young girls are having to travel

  995
  20 miles, from isolated mining towns to factories, and at the end of the week, when they have deducted their bus fares from their wages, they are definitely poorly paid workers.
  All these impositions have an effect on the income of a family and are relevant to this Amendment. To some who think in terms of the high wages earned in the prosperous parts of England, a 1s. or 2s. 6d. increase in milk or an increase in the prescription charges may be a trifle, but it mounts up in such a way as to bring a family below the poverty line.
  An hon. Friend talked of the incidence of taxation and how a low-paid worker was having to meet the country's taxation in increased food prices. I put a Question to the Minister of Defence the other day asking him how much per head per family defence was costing. I was told it was 16s. per head. For a man and wife 32s. has to be found in taxation for so-called defence. With a man, wife and three children that is £4 a week, to be found in one way or another, for so-called defence. I know that there is some alleviation of this through Family Allowances and so on, but the fact remains that a large percentage of the working class comes into the category—however one defines it—of lower paid workers. It is this class of workers whom we are trying to defend and protect in this Amendment, for which I will vote.
  Mr. Cyril Bence: While not entirely supporting the Amendment, I want to put some very serious considerations to my right hon. Friend upon the implications for the lower-paid workers. Most of us on these benches have spent our lives on the factory floor and know that just above the labourer—semi-skilled level—nearly every worker in an industrial enterprise can improve his earnings. This can be done either for domestic reasons, or through factory negotiations and increases in piece-work rates. However, for the lowest-income group, there is no way of increasing earnings. He is there—a labourer, a general handmaiden who runs around the factory, unable to improve his earnings.
  There are labourers in Glasgow coming out of factories with under £11 a week. This is so bad that my right hon. Friend's Ministry went so far as to
  996
  mitigate the wage stop when these men became unemployed, because that level was too low in the incomes scale. How can we reconcile mitigating the wage stop when they are unemployed and putting on another 1s. a week when they are employed? This is about the first time, with the exception of the introduction of the Selective Employment Tax, that I have tendered any criticism of the Government in four years. However, as a former toolmaker in industry, I must express serious criticism of a measure such as this.
  I do not agree with the point in the Amendment that the cost should be put as an industrial charge on industry. I do not know who are employers and who are not. They are huge institutions. Different industries have different wage contents in their product. It would be wrong to make this a charge on industry—and this is where I disagree with the Continental system—especially on the shipbuilding industry in which there is a high wage content and where the burden would be far in excess of the burden on the electronics industry and other industries where the low-paid worker is badly paid.
  My right hon. Friend should examine the possibility—and this has ben suggested before—of dealing with this matter through a social security tax. Let us have a social security tax with graduated contributions based on income. We cannot go on levying this poll tax which falls on a large group of workers—perhaps two million workers—who cannot do a thing to improve their earnings. They rely entirely on the trade unions to take action with their employers to raise their wages, and then there is a large section of trade unionists who insist on maintaining the differential. It is difficult for shop stewards to raise the level of those in the lower income bracket because there are people who will fight for maintaining the differential. This is unfortunate, but it is a fact of industrial life.
  I beg my right hon. Friend to give an assurance that this is only a temporary measure. We are self-employed. We could pay more, especially the self-employed people here who have fat incomes outside. We should be prepared to pay a lot more for the lower income groups

  997
  who cannot reach the level of skilled workers for various reasons, possibly because of a lack of opportunity, and who are on the bottom run of the ladder. They should be excluded entirely from this wretched poll tax, this flat contribution, which we have opposed for 15 years.
  My right hon. Friend's predecessor introduced a measure to mitigate the wage stop which the previous Administration applied rigorously. It was applied in my constituency, and other hon. Members and myself raised cases concerning it time and again. I ask my right hon. Friend to maintain that mitigation when people are in work by doing something about this heavy poll tax.
  Mr. W. A. Wilkins: I should like to say a few words before the Minister replies, for two reasons. First, I have been strongly provoked by the hon. Member for Louth (Sir C. Osborne), who treated us to one of the most astonishing contributions of humbug which I have heard in this Chamber in all the years that I have been a Member. Secondly, I want to have a word with one or two of my hon. Friends below the Gangway and offer them a bit of counsel and assure them that I am 100 per cent. in sympathy with their views.
  6.15 p.m.
  This proposal is a poll tax; there is no doubt about that. Rightly or wrongly, from the time when my right hon. Friend the Member for Llanelly (Mr. James Griffiths) was Minister, it has been so characterised in the House of Commons. There have been those who have denied it. But for the Opposition to try to present a case in the way that they have done today, particularly by the hon. Member for Louth, is ridiculous. I interrupted him once or twice from a seated position telling him that I could produce headlines to counter all the headlines which he was producing—unfortunately, I could not find the prize one, but I found one or two others—which show that this situation has been with us ever since the Conservative Party came to power in 1951.
  The attack has been mainly twofold—on the social services and principally on the National Heath Service. These have always been the "targets for tonight". I have served on three Committees upstairs
  998
  when the right hon. Member for Wolverhampton, South-West (Mr. Powell) has attacked in the most violent manner almost all the charges under the National Health Insurance Act, and I have tried to prevent him from doing so. The last time that the Conservative Party won an election before it was defeated in 1964—
  The Deputy Chairman (Mr. Sidney Irving): Order. The hon. Gentleman is straying far from the Amendment, which is concerned with the division of the contribution under the National Insurance Act between the employer and the employee.
  Mr. Wilkins: I am coming to the point. I am challenging the Opposition on talking as though this was the first time that this has happened when, in fact, it has been happening since 1951. In 1961, they were responsible, through their Chancellor of the Exchequer, the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd)—the man dubbed "See-saw Selwyn "—for doing these things. On 2nd February, 1961, the right hon. and learned Gentleman proposed to do exactly what we propose to do now—put 1s. on contributions, is. on cod liver oil and 1s. on prescription charges. The hon. Member for Louth, who provoked me into saying these things, did not remind the Committee of that. He indicated that this was the first time that it had happened.
  Sir C. Osborne: On a point of order. The burden of my speech was that this had happened in 1931, and I made quotations to support that. Therefore, it is wrong to say that I said that this was the first time that it had happened.
  The Deputy Chairman: That is not a point of order.
  Mr. Wilkins: I was referring, when the hon. Member interrupted, to the fact that this has been with us literally since the system was invoked.
  What my hon. Friends below the Gangway have been saying is absolutely true. This is the case which we were presenting when we sat on the benches opposite. I took part in the debates and said these things and meant these things. Therefore, my hon. Friends have a right to say, "Why are we doing it in this way?".
  I remember the winding-up speech during one of the debates on proposals of

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  this kind for additional charges in the National Health Service. I remember—that is why I have looked it up—what the Minister's right hon. Friend the present Secretary of State for Scotland said as he come to the conclusion of his speech for the then Opposition. I commend this to my right hon. Friend for her consideration. This was what he said—
  Mr. Emrys Hughes: What was this?
  Mr. Wilkins: This was Willie Ross. I said before that it was the present Secretary of State for Scotland. He said:
  "I hope that the Chancellor "—
  that was the right hon. and learned Member for Wirral—
  "is feeling proud of himself and his achievements. So far as we are concerned, we have opposed this with logic as well as with passion, because we feel that we have got justice upon our side. I sincerely hope that my hon. Friends who have not yet spoken will use Parliamentary time "—
  The Deputy Chairman: Order. The hon. Member really is out of order. He is discussing the raising of the contribution, but the Amendments are concerned with the distribution of the contribution between employer and employee. I hope that he will come back to order.
  Mr. Emrys Hughes: I am sure, Mr. Irving, that most of us are interested in what my hon. Friend is leading up to. The argument, I understand, deals with the lower-paid worker. If I remember the peroration exactly, by the time that my hon. Friend comes to it, you will find that it is in order.
  The Deputy Chairman: The hon. Member for South Ayrshire (Mr. Emrys Hughes) was given considerable latitude in his speech. So has the hon. Member for Bristol, South (Mr. Wilkins), but I think that he has now exhausted the tolerance of the Chair.
  Mr. Wilkins: I did not need rescuing, Mr. Irving, because I was coming to the point. I am saying to my right hon. Friend the Minister that we should be consistent. We are now the Government instead of the Opposition, but because we are the Government we should be consistent with what we said when we were the Opposition. I am trying to ask my right hon. Friend to look again at this matter and at the method whereby
  1000
  we raise the additional money which is needed for the Health Service.
  I agree that Parliament should take a further look at the way we raise the sums of money that we require for our health services. I am—
  Mr. Emrys Hughes: On a point of order. If my hon. Friend is not allowed to finish his quotation, Mr. Irving, may he be allowed to give us the date of it?
  The Deputy Chairman: This is an important matter. I hope that hon. Members will not waste the time of the Committee.
  Mr. Wilkins: I have been thinking seriously about this matter. I do not like this method of gradually increasing the contributions for the National Health Service every fourth or fifth year.
  The Deputy Chairman: Order. In the Amendments we are discussing another aspect of the problem and not the one that the hon. Member is addressing to the Committee. He must come to the Amendments.
  Mr. Wilkins: I am sorry if I am out of order, Mr. Irving, but I should have thought that it was in order to suggest ways and means of raising the money which the Minister is asking Parliament to vote for the purposes of the Health Service. I should have thought that that was in order on the whole batch of Amendments. The Lord only knows what some of them mean. Nevertheless, I thought that the debate was wide and that we could suggest that the Government should consider other ways of raising the money.
  The Deputy Chairman: The hon. Member has made that point although it is out of order. I hope that he will not dwell on it.
  Mr. Wilkins: I was coming to the end of my peroration, Mr. Irving.
  I said at the beginning that I had risen for two reasons. The first was that I was provoked by the humbug of the hon. Member for Louth.
  Sir C. Osborne: Who's talking?
  Mr. Wilkins: The second was that I wished to say a word to my hon. Friends behind me and whom I am supporting in their protest about these charges. The

  1001
  only thing I want to say to them about this is that the Conservative Opposition, who have been encouraging them in this by their plaudits as they have gone on and on urging them to belabour the Government on this issue, did exactly the same thing in the past but not one of them went into the Lobby with us on that occasion. Therefore, we have a lesson to learn from the disciplines of the party opposite, who are delighted to see that we are both Government and Opposition. It saves them doing their job.
  From the point of view of the Government, I hope that now that my colleagues have made their protest, they will not carry it to the extremes that they have suggested.
  Mrs. Hart: I am sorry that one or two of my hon. Friends have made it clear that, no matter what I say, unless I concede their point they will vote in the Lobby for their Amendment, because that rather restricts the effect that I can hope to have on their thoughts on these matters. I can, however, at least hope to convince some of my hon. Friends who have not expressed such a clear determination that our proposals are by no means as unpleasant as they consider them to be and that there are good reasons why the proposals in the Bill should be accepted.
  At the cost of being a shade tedious for a few moments, I wish to go into the question of the necessity for an increase in contributions to make up an emerging deficit in the National Insurance Fund. It is necessary that I should do this because none of my hon. Friends or hon. Members opposite who have spoken on the Amendments has commented on the reason why it has been necessary to increase the contributions.
  Mr. Tapsell: On a point of order. I apologise for interrupting the right hon. Lady, but in view of your Ruling, Mr. Irving, is it in order for the Minister to make a speech on the lines which she has just indicated?
  The Deputy Chairman: The right hon. Lady, as all hon. Members, must speak to the Amendments. The more general argument is appropriate to the Question, That the Clause stand part of the Bill.
  Mrs. Hart: Indeed, Mr. Irving, but to indicate why it is necessary to increase the contributions in the proportions which the Bill proposes to increase them, I suggest that it is first necessary to establish why the amount of the contribution is necessary.
  The Deputy Chairman: If the right hon. Lady is developing an argument which is essential and relevant to the Amendments, that is perfectly in order.
  Mrs. Hart: Thank you, Mr. Irving.
  I felt that one or two of my hon. Friends suspected that the need to increase the contributions, however they were divided between employer and employee, had emanated solely from the International Monetary Fund and from sources which they did not regard with approval and that the Government Actuary's Report was not to be taken as seriously as I am bound to take it.
  The Government Actuary's Report, which accompanies the Bill, makes it clear that the trends which have become apparent in the last month or so were not so apparent at the time when, for the last increase in contributions which took place in October, the legislation went through the House last July. The reasons why that is so emerge clearly from the Government Actuary's Report.
  6.30 p.m.
  It emerges very clearly, and I would just underline one particular point here, that the Government Actuary, of course, is continually getting a stream of statistical information from my Ministry and from other Government Departments relating to the income of the Fund, the expected income of the Fund, and the expected outgoings from the Fund, and that the information which the Government Actuary gets is related to things like the expected trend in mortality, the expected trend in employment, the expected trend in retirements, and even a variation of 1 per cent. in income or outgoings, which in normal forecasting might be thought to be a negligible variation, makes a difference of about £20 million to the Fund.
  What happened on this occasion was that the trends have gone further than at the time of the legislation last July when they would not have provided a good enough ground for specifying what

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  might be the emerging deficit in the Fund. The trend has now become quite clearly established, and there will be a deficit to meet, as indicated in the Actuary's Report, unless contributions are raised by the total amount which is specified in the Bill. It is necessary to be clear about the total amount of contributions before we discuss their distribution between employers and employees. This amount is absolutely necessary as a result, in particular, of the trend towards more retirements, and the trend towards more people requiring sickness benefits. Those are the two major trends which have affected the intake of the Fund. They have a double effect, because if more people retire earlier more people are drawing out of the Fund and there are fewer people remaining in the working population to contribute to the Fund.
  I wanted to make that clear, and I should also make it clear that the date on which contributions will be raised will be 6th May.
  I now come to the arguments which have been put forward by my hon. Friends about the ratio between the employers' and the employees' contributions, and the very strong arguments, with which I have a great deal of sympathy, about the particular problems of the lower-paid workers, and the arguments about the unfairness of any poll tax such as this. I turn to what my hon. Friend the Member for Ebbw Vale (Mr. Michael Foot) said on this matter. I think that what he said in the Committee this evening was an amplification of remarks he made in the Sun newspaper last week when he suggested, as he did today, that there was some, perhaps sinister, reason why the Government had not yet presented their wage-related scheme. It must be ready, he said; it is the Cabinet which is stopping me from producing it, it is my right hon. Friend the Chancellor of the Exchequer who is saying that I may not produce the new wage-related scheme, which is sitting waiting ready in the cupboard.
  I cannot say strongly enough that this is totally unfounded, that there are extremely good reasons why the wage-related scheme has not yet emerged in its White Paper stage, but why it will, I
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  hope, within the next year—before the end of this year.
  I think I should remind my hon. Friend that the new wage-related scheme, in which we shall no longer have to be concerned about the inequities of a poll tax to raise insurance contributions but in which there will be earnings-related contributions, is a considerably bigger scheme than was the Beveridge scheme, and that the Beveridge scheme took seven years from the setting up of the Beveridge Committee to the appointed day following the legislation. We have now got to the point, to the mid-stream point, of some extremely complex issues. I want to mention what some of those issues are, so that my hon. Friend can understand that this is not the kind of scheme one can translate from—
  Lord Balniel: On a point of order. Is the right hon. Lady in order? Certainly some of us would like to debate this matter later on, but is it in order to discuss the whole of the earnings-related scheme now, as is, apparently, the intention of the right hon. Lady?
  Mrs. Hart: Further to that point of order. I was specifically asked by two or three of my hon. Friends, though not, of course, by hon. Gentlemen opposite, who do not share the same interest of my hon. Friends in the Labour Party's wage-related scheme—when the wage-related scheme was likely to be forthcoming, what was holding it up, and I think that this has a very strong bearing on why it is not possible to have a wage-related contribution in this case.
  The Deputy Chairman: Order. The Chair has given a little latitude in the debate. On the other hand, I am afraid that we cannot have the whole of that issue debated on this Amendment. I think that the right hon. Lady must come very quickly to the Amendment.
  Mrs. Hart: With respect, Mr. Irving, I am addressing myself to the arguments adduced by my hon. Friends in favour of their Amendments, and I am answering questions which were put to me, which they regarded as relevant to their arguments, and which I regard as relevant to their arguments, and which, with respect, I think the Committee has to

  1005
  accept as relevant to the argument about the distribution of the flat-rate contributions as between employer and employee and about the need to have instead wage-related contributions. All these arguments were adduced by my hon. Friends, and, with the greatest respect, they were right to make their arguments, and were not stopped in their arguments as being out of order.
  The Deputy Chairman: The Chair has allowed a little latitude in this debate, and I think I have already given latitude to the right hon. Lady. I hope that the right hon. Lady will help the Chair maintain order by coming to the substance of the Amendment; that she will conclude her present argument as soon as she possibly can and come quickly to the Amendment.
  Mrs. Hart: Indeed, I am not proposing to go into the merits or demerits of an earnings-related scheme. I wanted to indicate the problems on which my officials are working extremely hard to cover the matters—just about every matter—contained in our present social insurance scheme. Therefore one has to look at the long term and the short term, sickness, widows, married women pensions—every single aspect of a social insurance scheme; each one has to be caught up and worked out.
  I can assure my hon. Friend the Member for Ebbw Vale—this is the particular assurance which, I think, he wanted from me—that the new earnings-related scheme is not in the slightest degree being held up, and the moment the work is completed a White Paper will be published, and it will then be available for full discussion by the House and by my hon. Friends. There is no kind of truth in the suggestion that there is some financial reason, some policy reason, why it is not forthcoming at the moment.
  It is because the flat-rate contribution represents a regressive poll tax that we regard the production of the new earnings-related scheme as so important and urgent; because I agree with my hon. Friend—of course I do—that throughout the years we have complained of the flat-rate insurance contribution as bearing altogether too heavily on the lower-paid workers. We have regarded it, and
  1006
  still regard it, as a regressive form of contribution, and we want to get rid of it as soon as we can. If, indeed, I could find a technique whereby I could introduce an earnings-related scheme, a system of wage-related contributions, before—
  The Deputy Chairman: Order. The right hon. Lady must come to the Amendments.
  Mrs. Hart: Mr. Irving, I apologise on this occasion, but my difficulty is, as the Committee will realise, I think—though hon. Members opposite are not particularly anxious to realise it—that there is a very close relationship between wage-related contributions and the argument about the contributions to be borne by the employer and the employee—
  Mr. Tapsell Mr. Tapsell rose—
  The Deputy Chairman: Order. The right hon. Lady is perfectly correct—there is a relationship; but, so far, she has not made it.
  Mr. Tapsell: Will the right hon. Lady accept that some of us are extremely interested in the points which she is making and are waiting to make similar points ourselves when we come to the Question, That the Clause stand part of the Bill?
  Mrs. Hart: Hon. Gentlemen opposite fail to realise the motive behind my hon. Friend's Amendment. My hon. Friends are concerned that, since we still have flat-rate poll tax contributions, the distribution of those contributions should be as they have suggested in their Amendment rather than as I propose in the Bill. Their concern arises from the fact that we have not yet got earnings-related contributions.
  Mr. Mikardo: With respect to my right hon. Friend, she is confusing the issue. I should love to hear what she has to say about earnings-related contributions, but she has forgotten that we shall be coming to the Question, That the Clause stand part of the Bill, and it can be dealt with then. Accepting for the moment that there is a fixed contribution, we are saying that it should be borne by the employer. That has nothing to do with earnings-related contributions.
  Mrs. Hart: I take my hon. Friend's point. I was about to move on and to say that, since we do not have a system of wage-related contributions, the argument about the proportion to be borne by the employer and that to be borne by the employee is a matter which concerns my hon. Friends in their Amendment.
  I must distinguish at once, as the debate has tended not to distinguish, between that part of the increase which is related to the National Insurance contribution, dealt with in this Clause, and the National Health Service contribution, which arises in a later Clause. Some of my hon. Friends tended to wrap them up into one. As regards the National Health Service contribution, there has always been a certain relationship between the employers' and the employees' contributions which is of a different order compared with the relationship within the National Insurance contribution. It is the National Insurance contribution that we are discussing now.
  Taking the immediate impact on the man with average earnings, the effect of the contribution which he is now asked to pay will be an increase of ½d. in the £. The fact is that, under the 1967 uprating, the contribution paid by employees with average earnings represented 6 per cent. of their earnings.
  Sir C. Osborne: Can the right hon. Lady give the figures?
  Mrs. Hart: I am about to give them. In October, 1966, the figure of average earnings was £20 6s. 1d. The October, 1967, figure of average earnings shows it to have increased to £21 7s. 6d. That means that the extra contribution payable under the Bill leaves the percentage of an average worker's income paid in contributions unchanged. That is very relevant.
  Sir C. Osborne: The right hon. Lady is using the correct figure from the Ministry of Labour of £21 odd as being the average earnings of an industrial worker over 21 years of age. However, our complaint is about the man who is getting less than that, because the burden falls on the poorer-paid man.
  6.45 p.m.
  Mrs. Hart: The hon. Gentleman has a natural temptation to go to the point
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  which I am about to cover next. However, before I come to the specific problem of the lower-paid worker, I want to take up a point which was made by my hon. Friend the Member for Lewisham, West (Mr. Dickens) and one or two others of my hon. Friends. They made great play of the ratio between employers' contributions and employees' contributions here compared with contributions in E.E.C. countries. With the best will in the world, and at whatever aspect of the social services one looks, it is not possible to draw real comparisons between this country and the E.E.C. countries because of the different way in which a number of our social services are financed and the degree to which the employers' contribution in a number of E.E.C. countries supports services which are paid for by taxation here. Without wanting to knock down my hon. Friends' points, one cannot make meaningful comparisons between social service expenditure and the contribution paid by taxation on the one hand and what employers and employees pay on the other.
  Mr. Pardoe: I find it extraordinary that just such a table of comparisons should have been included in a Labour Party publication when right hon. and hon. Members opposite were in opposition, called "The Twelve Wasted Tory Years".
  Mrs. Hart: If the hon. Gentleman likes to refer to the documentation on this matter published by the Government in the last year or two, he will find that this point is made. One cannot make a true comparison between them.
  I turn now to another of the points made by my hon. Friends. I will come specifically to the lower-paid worker in a moment. I was asked why the Government had not followed the line adopted in 1965 and in the last uprating in 1967, when there had been a different distribution of the proportions of the contributions to be paid. I have already said that, taking account of the increase in average incomes, the percentage is the same as it was after the 1967 uprating. In addition, last October, for the 1967 uprating, the disparity between the employer's and the employee's extra contribution was only 3d. out of a 4s. 1d. increase under the main National Insurance Scheme. If one takes 3d. out of 4s. 1d.,

  1009
  one can see how infinitesimal would have been the difference in pence if one tried to relate that same proportion to this increase. In fact, what my hon. Friends are arguing about is a penny, on the basis of the 1967 up-rating—[HON. MEMBERS: "No."] Those of my hon. Friends who say that we ought to preserve the relationship created by the last uprating are arguing about a penny.
  Mr. Orme: I do not think that my right hon. Friend does it deliberately, but she is misinterpreting the point of view that was advanced. The comparison that we made was that, on the previous occasion, the employer paid more and the employee paid less. We were not arguing about whether comparative increases should be made this time, but that the employer should pay more. That was the point which my hon. Friends and I made about the redistribution of income. My right hon. Friend is misinterpreting the point.
  Mrs. Hart: With respect, I do not think that I am. Others of my hon. Friends said that the whole increase should be met by the employer. At the moment, I am dealing with the point raised by my hon. Friend, which is by how much one would have had to increase the employers' contribution and reduce the employees' contribution if one wished to retain the same ratio. However, it is an infinitesimal amount in this increase because it would have the same ratio as 3d. bore to 4s. 1d.
  There were those who argued that the whole increase should be borne by the employer because of the problem of the lower-paid worker. My hon. Friends are quite right when they point out that, fundamentally, to change the relative position of the lower-paid worker, we are not talking just about poverty programmes but about programmes for equality. Those hon. Members opposite who lured my hon. Friends with siren voices to vote against the Government this evening would not agree with my hon. Friends or with me about the extent to which a programme for the redistribution of wealth is necessary before we can solve the problems of the lower-paid worker. But let me—[Interruption.] I am sorry to make hon. Gentlemen opposite so furious. I would expect it to be my hon. Friends who were furious.
  Mr. Mikardo: Perhaps my right hon. Friend will allow me to intervene. If she is trying to tell the Committee that the only reason we shall vote for the Amendment is because we have been dragged into it by hon. Gentlemen opposite, she will make me furious.
  Mrs. Hart: I assure my hon. Friend the Member for Poplar (Mr. Mikardo) that I would never dream of suggesting that he could ever be lured by hon. Gentlemen opposite anywhere. I am suggesting that hon. Gentlemen opposite are doing their best to see if he will succomb to their temptations, which is a different matter.
  I am making the point that behind the discussion this evening are fundamentals on which my hon. Friends are a good deal more likely to agree with me than with hon. Gentlemen opposite.
  Mike Miller, who runs the Ford Foundation poverty programme in New York, recently said that poverty is a matter of relativities, that it is relative deprivation, that it ushers in the whole question of the discussion of equality. Accepting that this is so, I turn to consider how the Government are assisting lower paid workers to withstand the penny in the E increase represented by this contribution. My hon. Friend the Member for Liverpool, Walton (Mr. Heffer)—I could be wrong—indicated that on prescription charges we were doing nothing to protect the lower-paid workers. In fact, as my hon. Friends know, people in full-time work living below supplementary benefit level are one of the groups we will protect from prescription charges whether by refund or, as I hope, by exemption. This was mentioned—[Interruption.] I am surely entitled to answer the points which have been put to me by my hon. Friends. If the hon. Gentleman the Member for Shipley (Mr. Hirst) was not in the Committee to hear them he should at least not interrupt when I seek to answer them—[Interruption.]
  The Deputy Chairman: Order. I hope that hon. Members will leave matters of order for the Chair. It is a difficult enough job as it is.
  Mrs. Hart: This was one of the points mentioned in the debate.
  Another point on the protection of the most vulnerable section of the community

  1011
  is that, one month before the National Insurance contribution increase comes into operation, which will be on 6th May, all the families of lower-paid workers will have begun to draw, if they are not already drawing some part of it, a 7s. increase in family allowances. Since poverty arises from the maladjustment of family responsibilities to a low wage and not only from the low wage itself, this will mean that an average family with two children will have 7s. extra coming into the house against the extra cost of this Bill and other measures involved. That is one part of it.
  Lord Balniel: Was the figure of 7s. family allowance fixed on the assumption that there would be an increase in the National Insurance contribution?
  Mrs. Hart: Of course not. As the noble Lord will have seen from the Actuary's Report, the trends that made the increase necessary in the National Insurance contribution emerged only within the last two or three months.
  Another thing the Government have done—and this is terribly relevant to the problem of the lower paid and their families—is that, by establishing the family allowance increase in April on a give-and-take basis, we have created a foundation on which in future we can give more help to lower-paid families without at the same time wasting a great deal of money by giving family allowances—or allowing families to retain the full value of their family allowances—when they are in middle income groups and do not need the help so much. Therefore, it cannot be said that the Government, in introducing this Bill, are failing to introduce at the same time measures that give positive, practical and substantial help to the very people about whom my hon. Friends are concerned.
  I do not know how far I carry my hon. Friends with me, but, given that it is absolutely essential to raise contributions to put the National Insurance Fund into a reasonable position again, given that we agree that the flat rate is an iniquitous poll tax to be replaced by our new scheme as soon as we can bring it in, given that the new scheme will end the iniquities of the flat-rate poll tax, given that until we can do that there is no
  1012
  technique so far available to me whereby I can end those iniquities, given that the proportion of a worker's income represented by these increased contributions, bearing in mind the increase in average wages, remains the same as it was at the time of the last up-rating—
  Mr. Mendelson: Will my right hon. Friend please answer the question which I and my right hon. Friend the Member for Lanarkshire, North (Miss Herbison) put in the main debate: why, in considering these matters, did not the Government put the whole of the increase on the employer? My right hon. Friend has not yet answered this question.
  Mrs. Hart: I have not done so, because I would have to argue a matter which has been ruled out of order by the Chair, namely, the question of the increase in Exchequer contributions to substitute for the lack of employees' contributions. That is what would be required. The reason that this is not done, and the reason I would be opposed to it, is because, as I have explained on a recent occasion, our social insurance system—
  Mr. Heffer: On a point of order. This is a relevant point, because the whole argument up to now has been about the increase in the contributions of the employer. My right hon. Friend has made the point that she cannot deal with this because she would have to discuss the question of Exchequer contributions. I should like to know what precisely is the Chair's Ruling. It makes the whole of this debate a lot of utter nonsense unless we know the answer from the Government.
  Mr. Mendelson: Further to this point of order. Previously in the debate hon. Members have referred to the Exchequer contribution and have been completely in order. Therefore, I do not think my right hon. Friend should have any fear on this.
  The Deputy Chairman: The Chair has not ruled anything out of order which is relevant to the Amendments on the Order Paper. We cannot have a full debate on the National Insurance Act, but if the right hon. Lady is able to relate it to the Amendments, she will be in order.
  Mrs. Hart: I do not see why I should be interrupted on points of order to say that something is relevant which I am in the middle of saying.
  The Exchequer contribution, in its relation to the National Insurance Fund generally, stands at the moment at about 15 to 16 per cent. I explained on a recent occasion in the House—and it was this I was saying when my hon. Friend made his point—that our National Insurance Fund guarantees benefits as of right on the basis that people have contributed to the Fund and draw benefits from it. Our Fund is a pay-as-you-go one. Today's benefits are financed in the main by today's contributions; tomorrow's benefits are financed by tomorrow's contributions. If one were seriously to start a trend of disturbing the ratio between total contributions and Exchequer contributions, one would be distorting the basis of the National Insurance Scheme and paving the way, as I explained to hon. Gentlemen opposite about ten days ago, for a totally different system in which benefits were financed primarily out of taxation, in which they were therefore exposed to the whims of political and economic fortune, and in which there was no longer the guarantee that pensions were paid as of right, which is what the Labour Party values.
  7.0 p.m.
  That is why I would not want seriously to disturb the present ratio which the Exchequer contribution bears to the other contributions made to the Fund. That is why it is not an answer to the problems about which my hon. Friends are concerned. I have explained why an answer cannot be found, either, in changing the proportion between the employer and the employee, namely, that I maintain that the proportion as represented by a percentage of wages is unchanged.
  My hon. Friends are quite wrong, and so are hon. Gentlemen opposite, if they seek to make the case that the Government are not protecting the lower-paid workers, and the most vulnerable. I believe that my case is made, and I must honestly say to my hon. Friends that, although recognise how deeply their case springs from concern about this problem of poverty, a concern which I share totally, their case is not made out. I appreciate that their concern arises
  1014
  from the effect of low paid employment, but I believe that their anxiety that the Amendment should take the place of the provisions of the Bill is a misplaced emphasis, and does not follow logically or rationally from the concern which I share with them.
  >Amendment negatived.
  The Deputy Chairman: The Question is, "That the Clause stand part…".
  Mr. Mikardo: On a point of order. Mr. Irving, your predecessor made it clear that although a large number of Amendments were being debated together, they could all be voted on separately.
  The Deputy Chairman: I have not departed from the Ruling given by the Chair. The Amendments must be voted on in the order in which they appear on the Notice Paper. This Motion has to be put before we come to the Amendments on which the hon. Gentleman wishes to vote. His right as conceded by the Chair will be preserved.
  Question proposed, That the Clause stand part of the Bill.
  Mr. Marcus Worsley: I hope that the right hon. Lady will accept from me that the interventions in her speech on the Amendment did not, as she appeared to be suggesting, indicate a lack of interest by this side of the Committee in what she was saying. We were concerned lest she took a broader view of the rules of order than was taken by other speakers. I have risen to urge the right hon. Lady to expound in greater detail—and I assure her on behalf of my hon. Friends that it will be without interruption—on those matters which she sought to raise, we thought by stretching the rules of order, on a relatively detailed Amendment.
  One of the difficulties of this type of Bill, including as it does so many different matters, is that when it is given a Second Reading it is very difficult for the Minister proposing it to cover all the points that are raised. There are a number of matters which we would like to discuss, and to have what I might call Second Reading explanations from the right hon. Lady.
  I start with subsection (2). The right hon. Lady is here seeking an extension of the powers of her Department. I have

  1015
  no particular criticism of this extension as such, but, when a Minister seeks an extension of powers, it should be justified, and I hope that the right hon. Lady will be kind enough to say what case there is for this broad extension of powers in her Ministry.
  The two main matters which fall to be debated under this Clause are, first, the impact of the Clause on the vulnerable sections of our community. We discussed this in some detail on the first Amendment, but I would like the right hon. Lady to give us a little more information on just what impact the Clause will have on these people. Research carried out by her Ministry has shown that under the previous arrangements, after she had raised Family Allowances by 7s., there were likely to be 250,000 children below the poverty level. How many more children will be brought into this category by these new legislative enactments? The Government have said that they will protect the most vulnerable orders of society, but the Clause will increase the burden on those who are most vulnerable.
  The main burden of the debate on the Clause must be on the extraordinary fact that in the few months between June of last year and February of this year the Government Actuary produced reports which were so different that they upset all the Government's financial calculations. I think we must be told the reason for these extraordinary diversities of judgment. When Mr. Harold Macmillan was Chancellor of the Exchequer, he described running the Treasury as being akin to calculating the trains on last year's Bradshaw. It seems that the Government are operating on last year's Old Moore's Almanac. It is astonishing that two completely different reports could be produced in such a short interval of time. As I said during the Second Reading debate, this is clearly not the fault of the Actuary. It must be due to faulty information being fed to him, and I would like the Minister to tell us just how such extraordinary diversities of judgment can come about in such a short time.
  There are two matters on which I would like an answer. The Government apparently assumed—and I would like some indication of why they did so—that the lighter mortality rate among pen-
  1016
  sioners was "only temporary". Why did they make that assumption? Surely it shows a remarkable lack of perception, and a lack of research in the Department, if the right hon. Lady cannot give accurate information on such matters. Why was the fall in the working population not anticipated? These two facts, which could have been anticipated if the right hon. Lady had adequate research facilities in her Department, have upset the Government's calculations on this important matter. Surely there should now be an infinitely more effective and sophisticated research element in the right hon. Lady's Department to give the necessary information.
  There is an amazing difference between these two Reports. In the June Report, the Actuary was talking complacently about the picture up to 1970, which he was convinced was in order, except for a little deficit in the last year, and was looking ahead into the sunny uplands of surplus in the 1980s. Yet this month's Report has shown a complete difference. It makes no mention of the period beyond 1970. The First Secretary said on Second Reading:
  "I accept that, looking beyond the 1970s a continued reliance on the flat rate would not stand the strain."—[OFFICIAL REPORT, 20th February, 1967; Vol. 759, c. 356.]
  What an astonishing change that, last June, the Actuaries Report should calmly look ahead into the 1970s, 1980s and even 1990s on the flat rate basis and that the responsible Minister should say in February that it would not stand the strain.
  How are such extraordinary variations of judgment possible in so short a time? They do not bring any cause for confidence in the administration of the right hon. Lady's department. The Government owe the House and the country a much fuller explanation of how the Minister sees the finances of the scheme working in future. We are more than anxious to debate any proposition relating to a future pensions policy. The right hon. Lady will have heard in this debate and others many of my hon. Friends criticise the present flat rate poll tax and she will find many, in the House and the country, with her in an attempt to find a fairer system without these disadvantages for the low wage earner and part-time worker.

  1017
  But she and her hon. Friends must not pretend that this poll was created by Tory Governments; they should remember that it was introduced under the 1946 Act and came into operation in 1948 under a Labour Government. This should surely not be a matter of party controversy. The flat rate system was devised during the war and introduced after the war by a Labour Government. It served its purpose well over a period, but we all now agree that it should be replaced. So we should get away from the foolish and quibbling attitude of pretending that the Tories introduced this.
  What we all would like to do is find a more equitable system of financing social services which does not have this impact, but I must remind the right hon. Lady that this Government through S.E.T., have vastly increased many of the system's ill-effects. I realise that it falls only on the employer, but it has a disincentive effect, which we must criticise, of discouraging the employment of vulnerable people. I hope, therefore, that the Minister will state more clearly her ideas of something to replace the flat rate system. She will have all our attention in this matter.
  7.15 p.m.
  Dr. David Owen: The Committee faces a considerable problem. In answering the Amendments, my right hon. Friend in effect made a "Clause stand part" speech, which was difficult to avoid. The core of the argument is whether we continue the present financing of the National Insurance Fund. This is causing the greatest concern on both sides. I say to the Minister and the Chancellor of the Exchequer that, if the Government Actuary can produce a report in June, 1967, which is shown seven months later to be based on totally inadequate information, they have a duty to explain why.
  The explanation in Command Paper 3532 is nowhere near accurate. It would be a reasonable Government Actuary's Report if it were considering the situation for a normal year during which it had been estimated that the Fund would be in deficit. If we were debating this Report in 1970 following the previous argument in 1967, its information would be reasonable, but it covers up a total incompetence in estimating trends.
  1018
  We will all expect, considering how we collect statistics and the appalling imbalance between regions, a considerable margin of error, but we are asked by the Report to accept a margin of at least 4 per cent. My right hon. Friend said that a 1 per cent. error could cost the Fund £20 million. We are asked to accept that, by March, 1968, the Fund will show a deficit of £75 million, when we already knew that the Fund was estimated to make a surplus this year of £1 million.
  This is not something which we are just arguing about now. It was argued in July, 1967. Average wages have slightly increased, so the Fund has earned more, but I am concerned because this country must take a severe cut in personal living standards over the next two years to make devaluation work. I advocated devaluation in the House for many months before it came, so I have a responsibility to make it work, which makes me look critically at any flat-rate tax on lower-paid workers when I am asking them to accept voluntary restraint.
  What I will not accept is the old principle that the National Insurance Fund had to be self-balancing and could not run into deficit. The actuarial basis of the Fund is fraudulent. We all know it, and it is time that it was said and the Minister was not in the invidious position of having to defend a system which is reputed to be actuarial but which is not. We must get away from this principle and she should ask for money on the basis of need and not some spurious claim that it is running into deficit.
  I asked the Chancellor of the Exchequer for a statistical estimate of how soon the Fund would run into deficit, in view of the previous estimates over the past 20 years, but I received no reply. The reply might have been frightening. Seven months later, the Fund is running into deficit. In seven months' time, will my right hon. Friend come back again and apologise? I know that it hurts her as much as anyone on this side to increase this poll tax: she has admitted it herself.
  The basic thing which must be changed is the financial structure of the National Insurance Fund. As long as we continue to impose upon my right hon. Friend, through the House, this millstone, consisting of a statutory duty to balance

  1019
  the Fund, she will have to ask the House for further contributions. We can still argue about the balance, and how the contribution should be made up, but the basic problem arises from the fact that we have inherited a financial system which is a nonsense, and which is not based on need, and it is particularly necessary to change it now.
  I want to make a few detailed points about the Actuary's Report, which is grossly inadequate. It talks about trends. If the trends were wrong in June, 1967, how are we to know that they are right in February, 1968? We should have a detailed actuarial report showing the basis of these trends. I thought that some of the trends were extremely worrying, and merited a debate in themselves. For instance, we are told that
  "The rise in sickness which has occurred during the past four or five years has continued and claims during the nine months ended in December last were about 2 per cent. above the level assumed in June, 1967."
  Most of us would be prepared to accept a 2 per cent. increase in sickness claims, although we would all regret it and want to know the reasons for it. Looking back to June, 1967, we find that there was also an increasing trend in sickness then. It said
  "It is difficult to judge whether the trend had been halted, but to allow for the increase an addition of 3 per cent. has been made to the previous estimates of the cost of sickness benefit."
  So the Committee is now accepting an increase of 5 per cent. in the cost of sickness benefit. Why is sickness increasing? This is something about which the Committee has the right to ask the Government. We want a full and detailed breakdown.
  The Temporary Chairman (Mr. Victor Yates): Order. The hon. Member cannot raise that point on the Clause.
  Dr. Owen: The basis of the Clause is the Actuary's estimates contained in Cmnd. 3321 and Cmnd. 3532, Mr. Yates. The Reports are interrelated. I hesitate to question your Ruling, Mr. Yates, but if we are not able to discuss the financial basis for the National Insurance Fund the whole debate will break down.
  The Temporary Chairman: I thought that the hon. Member was going on to
  1020
  the question of general health, which does not arise under the Clause. To the extent that his remarks relate to the Clause he is in order.
  Dr. Owen: I am grateful, Mr. Yates. I do not intend to follow that line of questioning, but it reveals something which might cause us considerable concern.
  The other question that concerns me is unemployment. We have had a fast-rising rate of unemployment for some time. The basis on which I believed that devaluation was the right choice—and the last month's uemployment figures show this—was that there would be a falling trend in unemployment. One of the major reasons why we should accept devaluation as a coherent strategy is that it allows the Government to increase industrial productivity and to expand, while unemployment progressively decreases.
  We are now told that the long-term rate of unemployment of 2 per cent. is again to be adopted. I wonder what the result would be if we could ensure that unemployment in 1968–69 dropped to 11 per cent. I should have thought that that would be a reasonable target figure, even given the financial constraint and all the policies that the Government are asking us to accept, and which I am prepared to accept. My hon. Friends and I may differ on that point. But I would expect devaluation to result in a rapid fall in unemployment.
  What do the Actuary's figures reveal? The Report shows that if unemployment falls to 1½per cent. in the year 1968–69 we can expect a saving of £60 million on the National Insurance Fund. Reference has already been made to the fact that wages are bound to increase, even if we have a nil norm. This means a saving in the National Insurance Fund. These arguments were put forward in the previous debate in July. We heard from the Ministry at that time that if there was a 5 per cent. increase in wages in the years 1967–68 and 1968–69 there would be an increase in the National Insurance Fund of £2 million in the first year and £20 million the next year.
  However we look at the parameters on which the Actuary's figures are based we are forced to conclude that they are a nonsense. The record of the Minister of Social Security stands for anyone to see. She is extremely concerned about

  1021
  the situation but she is forced, by the financial structure within which she must work, to impose an increasingly savage poll tax—and at a time when the Government are asking for wage restraint in order to make devaluation work but we have not yet tackled the problem of a national minimum wage.
  I accept the principle of wage restraint and, if necessary, legislation to ensure it, but I will not continue to support a savage poll tax on lower-paid workers or a situation in which nothing is done about those lower-paid workers. We now have a situation in which millions of people, for a full week's work, earn less than the supplementary benefit. It is an impossible situation. When we consider the wage stop figures—and it is particularly brought home to us when we have high unemployment—we realise that this is just the tip of the iceberg.
  This is the real social problem about which I know my right hon. Friend is concerned. She must tell the Chancellor of the Exchequer that the financial system on which the National Insurance Fund is based is a nonsense. She must ask for the removal of the limitation on her freedom to allow for need, so that she can administer her Department humanely. Until that is done we shall continue to have these absurd debates, which try to justify the unjustifiable.
  Mr. Tapsell: There would seem to be three main aspects to the further increase in the weekly stamp for National Insurance proposed in the Clause. First, there is the financial justification; secondly, there is the question of its immediate social effect and, thirdly, there is the long-term implications that it holds for the future.
  To me, and presumably to many hon. Members opposite who have spoken to previous Amendments, one of the most depressing aspects of the debate is the fact that we have been told by the right hon. Lady—as we are told in the Actuary's Report—Cmnd. 3532—that the proposed increase in the employee's stamp has nothing to do with the grave economic situation which the Government's folly has brought about.
  Apparently, the Clause has not been inserted op the basis of the policy advocated by the hon. Member for Plymouth, Sutton (Dr. David Owen) or the I.M.F.
  1022
  It is not part of the policy of deliberately lowering the standard of living of the British people to make devaluation work. On the contrary, we are told that the increase is simply the result of the necessity to keep the national Fund in balance—to keep the pay-as-you-go arrangements in balance—because of three changing social characteristics among our people which have nothing to do with the economic situation; first, the fact that pensioners are living longer, secondly that people are retiring earlier and, thirdly, that the working population is decreasing.
  7.30 p.m.
  We are told that if the stamp is not increased, the Fund will go into deficit. It is depressing to think that we have no guarantee that there will not be a further increase in the stamp on 19th March, when the Chancellor belatedly tackles the problem of private purchasing power and expenditure. This is a depressing possibility because it gives added point to the second aspect of the increase; its immediate social effects.
  As hon. Gentlemen opposite have pointed out, this is the third increase in the employee's contribution to be made by the Labour Government since October, 1964. It constitutes a total rise of 5s. a week payable by every employed man, putting the personal contribution of the employee up from 11s. 8d. to 16s. 8d. a week. It is the first time that anyone can remember that such an increase has not been accompanied by an increase in benefits; and, of course, it must be viewed against the background of sharply rising taxes and prices.
  It is not surprising, therefore, that hon. Gentlemen opposite—and I join them—should have emphasised the fact that this latest increase will again hit hardest the most vulnerable sections of the community. One wonders about the fate of the pledge given by the Prime Minister to the nation on television on 19th November, 1967, when he said that the hardest hit sections of the community would be protected from the effects of devaluation. In recent weeks I have sought to discover the Government's practical intentions for giving effect to that pledge. I have received a number of odd answers to some supplementary questions.
  The answers I have received to this simple yet vitally important question

  1023
  have been surprisingly varied and vague. For example, the Leader of the House told me that the most vulnerable sections of the community were not yet sufficiently feeling the ill-effects of devaluation to justify any special measures to protect them. The right hon. Lady the Minister of Social Security, both a few weeks ago and today, said that the hardest hit had already been protected by the latest family allowances legislation—this magical piece of legislation introduced some months before devaluation, though it is not yet in effect. The Prime Minister, with his greater political skill, has given me both answers on different occasions. No doubt feeling that this is an untenable position, even for him, the right hon. Gentleman now refuses to answer any further questions on this subject and simply transfers them to other Ministers.
  The proportion of the National Insurance stamp to national average earnings will, in May, when this proposal comes into effect, be higher than it was when the Conservatives left office in 1964. In many parts of the country—certainly in rural areas such as South-East Lincolnshire and in my constituency—it will be a real burden to many. It is all very well for the right hon. Lady to talk about average national earnings being over £21 a week, but my constituency contains a large number of agricultural workers, many of whom, during at least the winter months are on or near the basic agricultural wage and, in addition, large numbers of people on the coastal strip who obtain only part-time seasonal work on quite low wages. In my constituency £21 a week is way above average local earnings.
  Consequently, this proposed additional shilling on the stamp will have three immediate and undesirable social effects. The first is that the elderly, the not very fit and the slightly below par performers will find it harder to stay in work. Employers will increasingly find the National Insurance stamp too much to pay for anyone who is not completely on top of his job. This will be particularly the case in industries which pay the full S.E.T.—notably the service industries—and this will apply with severity in my constituency, where the service industries provide a large part of the employment.
  1024
  I was surprised to hear the arguments used by the hon. Member for Liverpool, Walton (Mr. Heffer)—who I regret is not now in his place—to the effect that if this increase was shifted entirely to the employer, then this would help to increase efficiency. In the comparisons he gave about employers and employees in this and other countries, he omitted to mention the S.E.T. aspect here, a factor which must be taken into account in making such comparisons.
  We cannot all be pacemakers. We must concern ourselves with the problem of what is to happen to people when they pass their physical or mental peak. That is one of the great drawbacks to the present system. Thus, the second undesirable social effect of this increase will be that people will find it harder still to get part-time work. This will bear particularly hard on women with dependent relatives, on the elderly and on those who are not completely fit.
  The third immediately undesirable social effect will be on the 160,000 large families which, despite the fact that the breadwinner is in employment, contain about 250,000 children living below the subsistence level. I hope that the Minister will give precise answers to the questions asked by my hon. Friend the Member for Chelsea (Mr. Worsley) on this point because, as I understand the position, even when the family allowances increases come into effect later this year, they will still leave about 125,000 children in families below the subsistence level. I hope the Minister will make the position clear. It is evident that the National Insurance contributions problem will not be overcome by the availability of an extra 7s. a week on family allowances, particularly for these "wage-stopped" families.
  What are the future implications of the Clause? We are all interested to know whether this country is at the beginning of a substantial increase in the expectation of life for pensioners. Although until recently the chances, at birth, in one's teens or in one's early 20s, of living to be 60 were continually improving, once one reached the mid-sixties one's expectation of life seemed not to be much better than it was 20 or 30 years previously. The latest Government Actuary's Report seems to suggest

  1025
  that, perhaps because of medical advances, a real break-through has been achieved and that the expectation of life for pensioners has now statistically improved.
  If this is so, this must have fundamental implications for many of our social services. While it would not be in order for me to discuss these in detail on this Clause stand part, but confining my remarks strictly to the narrow National Insurance point this fact might seem to mark the point where the increasing financial instability of the fund, which even now is being heavily subsidised by the graduated contributions—remembering that practically no graduated pensions are yet being paid—will not be solved by future proposed increases in flat-rate contributions. If pensioners are to live longer this will throw an increasing burden on a decreasing working population to support an increasingly larger retired population. It will cause growing pressures to abandon the flat-rate contribution, the "poll tax" as many hon. Members opposite contemptuously referred to it. When I first came into politics the flat-rate contribution earning a pension paid as of right was one of the things of which the Labour Party was proud. Although it was a Beveridge recommendation it was implemented by the Labour Government. Now it is an extraordinary thing about Socialists that while other people would be silent and blush they shuffle off their guilt on to others and so we are told that this wonderful flat-rate contribution earning a pension as of right which was trumpeted from all the Labour platforms is now to be regarded as a discredited Tory plot.
  Dr. David Owen: I wonder whether the Tories would keep silent or blush?
  Mr. Tapsell: I think this to be a time when, for the sake of the country, Tories should do neither. I agree with my hon. Friend the Member for Chelsea that a great deal of rather bogus nonsense is talked about the so-called poll tax. The situation has changed largely because of the failure of successive Governments to control inflation and the flat rate contribution is now outliving its usefulness. We should all be thinking along different lines, perhaps of abolition of the flat rate contribution combined with abolition of
  1026
  Selective Employment Tax and moving instead towards a possible personal percentage based social security tax with higher proportionate contributions from employers as in most other Western European countries. To that extent I have considerable sympathy for the speeches of the hon. Member for Poplar (Mr. Mikardo) and others.
  The introduction of a new type of National Insurance stamp, even under the present flat-rate arrangements seems urgent at an intermediate rate between the full rate and the industrial injuries element to cater for part-time workers and the elderly who want to ease up, but not to retire altogether, and some other categories who will be particularly hard-hit by this Clause. The present arrangement whereby one has to be out of National Insurance altogether or pay 16s. 8d. is too rigid and, far from helping those categories which it is meant to help, it causes positive harm.
  Some sections of the Press—and one assumes some sections of the public—seem to be seized with an almost masochistic fervour for misery at the present time. They can hardly contain their glee as they wait for all the bad news to be announced on 19th March. Perhaps they think it will all happen to the other chap but this particular bell must toll for all of us. I do not share this feeling for the hair shirt, one strand of which is woven for us by this Clause. I look forward with hope and confidence to better times under different leadership.
  7.45 p.m.
  Mr. Norman Atkinson: Before referring to two important omissions, perhaps I may comment on the speech of my hon. Friend the Member for Plymouth, Sutton (Dr. David Owen). He said that in order to make devaluation work he was quite willing to see wage earners suffering a reduction in living standards. That is by no means a unanimous view on this side of the Committee. As I am sure many others do, I completely reject the argument behind that thought. The remainder of the hon. Member's speech I thought extremely to the point. It graphically demonstrated the problems facing the Government at the moment.
  On Second Reading the Chief Secretary referred to the result of transferring

  1027
  these costs to the employer which, he argued, would increase industrial costs and, therefore, reflect an increase in our export prices and as a result we might suffer a fall in export earnings. I have gone to the trouble of getting some figures from a very reliable source to try to analyse what has happened to export prices as a result of increased industrial costs since 1958. As a result of analysing costs and on-charges since that time, I find that the effect of transferring these costs to the employer would make a difference of ·0008 per cent. on export prices. I am sure the Minister would want to answer this.
  The Temporary Chairman: Order. The hon. Member seems to be referring to a matter dealt with on a previous Amendment. The Motion is, That the Clause stand part of the Bill. I do not think we can have another discussion on the Amendment.
  Mr. Atkinson: I am sorry, Mr. Yates, but I thought this was relevant to the Clause we are discussing. It was referred to by the Minister when discussing this Clause. By an omission the right hon. Lady failed to answer it and, because of that, I am raising it again.
  The other matter to which I direct the attention of the Committee is that the whole of the right hon. Lady's argument was about relating contributions to average earnings. When saying that average earnings are £21 7s. 6d. a week, she should also claim that benefits are likewise the same proportion of annual earnings, but they are not. It is bogus to argue that because contributions remain today at the same percentage of earnings this is a justifiable increase while at the same time failing to mention that benefits have slipped far behind what they were in the years quoted. This relates to lower wage earners and it is an argument we have to meet.
  The right hon. Lady has not related this argument to the whole question of the wage stop. One of the most obnoxious things about the poll tax is that lower income workers are generally subject to a wage stop and therefore cannot take advantage of the maximum benefits under the scheme. Yet, at the same time it is proposed to impose on them the same increase as that which applies
  1028
  to workers receiving very much more per week who are not subject to a wage stop.
  It would have been wrong to have allowed this debate to go by without directing some attention to these two omissions by which the Government spokesmen have not answered points made in the debate and which, for reasons best known to them, they have avoided answering.
  Mr. Pardoe: I wish to take up some of the points made by the hon. Member for Plymouth, Sutton (Dr. David Owen) concerning mistakes made by the Government Actuary. I say "mistakes" advisedly. If we relate this Clause to the Report we had from the Government Actuary, we see that certain of these errors could have been avoided. I do not like using the word "Actuary" in connection with a National Insurance system because the actuarial element is very small. We do not have a fund; we have an account: and where one has an account one has accountants and not actuaries. It would probably be better to dismiss these words from the language that we use in our debates on the social security system.
  In the Government Actuary's Report it is said that income from contributions has been adversely affected by changes in the contributing population. The Report says that without any clear indication of the underlying causes it was impossible to forecast the extent to which these trends would continue. Obviously, it is sometimes impossible to forecast some of the trends. I agree that mortality figures are extremely difficult and complex.
  However, I think that we could have made better attempts at it had we employed the normal techniques that planners and business would have used, such as some kind of market research related to willingness to stay away from work when sick, which is one of the factors which have increased the amount of sickness benefit. There are also the problems which arise, as mentioned in the Report due to the desire to retire earlier. I think it would have been possible by normal businesslike techniques to discover whether there had been an increase in those intending to retire at an earlier age. We could have decided that last June when the last Report was made, or last October when we voted these figures.

  1029
  When the Government Actuary tells us that in October, 1967, the higher rates of benefit were intended to take care of the period up to March, 1970, and then we are faced with these very significant changes, it negates the whole basis of planning. I do not see how one can plan any thing if one does not have better figures to work on. Perhaps this is a sphere in which we should use business techniques of forecasting and forget a little of the actuarial techniques, which do not seem to be applicable in this case.
  I want to take up one or two of the points made by hon. Members opposite. The hon. Member for Poplar (Mr. Mikardo) said on the Amendment that the difference between right hon. Members was between those who say the same thing on whichever side of the House they sit. Perhaps we ought to have a special section in this House where those who remain constant could sit. The hon. Member could use the Liberal benches for this purpose. It is one of the very few places where one can remain consistent.
  I have been taken off my guard. I assumed that I could rely on the word of hon. Gentlemen opposite that they would divide on the last Amendment. I have ceased to take the word of certain members of the Government Front Bench, but I took the word of hon. Members on the back benches. So I am sorry that we did not divide. I shall ensure that that does not happen again.
  The right hon. Lady tried to answer the point that had been made. It was a much more general point than was applicable to the specific Amendment that had been moved and related to the Clause as a whole. On the point about why the Government had not brought forward the major scheme which would have meant that the Clause need never have been before us, the right hon. Lady said that they had nearly ready a very big scheme, one very much bigger than the Beveridge scheme. I hope that it is not just big. One can say the same thing about the Transport Bill; it does not necessarily mean to say that it is good legislation.
  From some of the points that have emerged from speeches from the benches opposite, I should not say that what we are going to get from the Government will have any great relation to the policies
  1030
  which they put forward when in Opposition or to schemes that I should want to see.
  Mrs. Hart: The work that we are doing on the wage-related scheme is specifically to translate the Labour Party policy on superannuation into legislative terms.
  Mr. Pardoe: I am glad to hear that at last one promise is to be kept. I am only sorry that the Government have not kept the promise that said that the plans were ready to swing into action. "This will he done without delay" was what the Prime Minister said in his election address about this scheme.
  I do not want to fight on this issue. There are much more important points in the Bill to discuss. I do not think that anybody should vote against the Clause—I certainly intend to—unless he has an alternative. I am sorry that my Amendment which puts a specific alternative for a social security tax was not called, but I fully understand why. Nevertheless, I believe that I and my hon. Friends have consistently put forward an alternative for a social security tax related to income. It would mean that the whole basis of the poll tax could be swept away. It would be a very much more satisfactory method of financing our social security system. It would be a percentage of pay roll. It is important to realise that under our proposals the lower-paid workers would not be paying more than they are now; many of them, certainly the lowest paid, would be paying substantially less.
  I want to take up a point that we were not able to take up on the Amendment, that there are three contributors to the social security system, not two. The hon. Member for Ebbw Vale (Mr. Michael Foot) tried to make this point, and I think that he succeeded in spite of the fact that there seemed to be moments when he was moving out of order. He made the point that the Exchequer was an important contributor. I remember when the Labour Party criticised the Conservative Party for its failure to keep the Exchequer element up to the mark which the Labour Government had set in the 1945–50 period.
  The right hon. Lady—I found it extraordinary—used the word "dangerous" in relation to what she called the distorting

  1031
  proportion of the contribution from the Exchequer. I do not think there is anything very dangerous in it. That contribution has already been distorted and distorted considerably. In 1948 the employers and the employees met only 69 per cent. of the total cost of the social security system. In 1933 they were paying 81 per cent. Now, according to the latest figures of the Government Actuary, what the Government are paying is down to 16 per cent. So the Exchequer contribution to this so-called fund has fallen from 31 per cent. in 1948 to 19 per cent. in 1963 and 16 per cent. according to the latest figures in the Actuary's Report.
  The tendency under the Conservative Government for this to happen was attacked by right hon. and hon. Gentlemen opposite when they were on this side of the House. It is a pity that the Government have allowed this to get out of hand and let the Exchequer contribution he reduced in this way. But I hasten to add that I do not think that an increased Exchequer contribution would solve the whole problem. It would, however, certainly have been substantially better than the Government's proposal in this Clause. I should have preferred to see an increased Exchequer contribution because at least part of it would have come from taxes related to income and it would not have borne so heavily on the lower-paid workers.
  Because I have put forward what I believe is a comprehensive alternative and because I believe that the Government have taken the very worst of all the options open to them, I shall certainly vote against the Clause.
  8.0 p.m.
  Mr. Mikardo: I am grateful to the hon. Member for Cornwall, North (Mr. Pardoe) for his kind invitation to join him on the Liberal bench, which he put on the ground that that bench is the home of consistency in the House. I beg him to recall that consistency has no virtue in itself. One of the favourite novelists of my youth described consistency as the refuge and consolation of the dull-witted. Consistency is of value only if one is consistent for the right thing. With no great effort, I can resist the hon. Gentleman's invitation to join him there in being consistent on behalf of that strange collec-
  1032
  tion of moonbeams from the larger lunacy which constitute Liberal Party policy.
  The point I have risen to make is almost procedural. My hon. Friends and I indicated in the previous debate that we think that what is proposed in the Clause is wrong. We did not divide on Amendment No. 2 because we thought that the point was better raised on Amendment 17. But the quirks of our Parliamentary procedure impose a long gap between the time when we put our arguments a few minutes ago and the time when Schedule 1 will be reached, very late at night. Because of that, one might be misunderstood if one registered one's voice on Amendment No. 17, very late.
  Moreover, I have in mind, as I always have, the convenience of those hon. Members who are hanging about the building only for the purpose of supporting the Government in the votes which are to come. I would not want them to have to vote too late. For these reasons, my hon. Friends and I have decided that we shall not divide the Committee on Amendment No. 17 but shall show our view of the situation by voting against the present Question, That the Clause stand part of the Bill.
  Mr. Mendelson: On what was, in many ways, the main question, namely, why the Government had not decided to put the additional burden on employers, I was glad to note that, at least, my right hon. Friend the Minister of Social Security did not repeat the statement made by the First Secretary of State, that it would have interfered with the export prospects of business people because of the increase in their costs. That argument was sunk without trace, and of that I am glad.
  The points which my right hon. Friend did make, however, did not make a convincing case. She referred to the lower-paid workers, telling the Committee that the Government would do a number of things for them but that, in any case, that section of lower-paid workers who were entitled to draw supplementary benefits would not be affected by some of the charges which would be imposed, for example, prescription and other charges. That is a very poor case.
  Mrs. Hart: My hon. Friend has got slightly wrong the passage in my speech to which he is referring. I said that the

  1033
  Government are making provision that people in full-time work below supplementary benefit level—the lower-paid workers about whom my hon. Friend is talking—will be protected also against prescription charges.
  Mr. Mendelson: Yes, that is precisely the point to which I was referring. I may not have expressed myself clearly, but I understood the point when my right hon. Friend made it in her speech. I am coming to it now.
  If my right hon. Friend confines that protection only to that section of the lower-paid workers who have such a low income that they are entitled to supplementary benefits although fully at work, she underlines the case which my hon. Friends and I have been making all afternoon. It leaves out millions of lower-paid workers who are just above that very low income line. They will not be protected at all. That disposes of the point which my right hon. Friend attempted to make.
  Her only other point established what seems to be a new sacred cow. My right hon. Friend referred to a certain percentage of total earnings. She said that the percentage would not be changed, the implication being, without further argument, that this was ipso facto a justification for what the Government are doing. Where is that justification? Where has the Labour Party ever argued that the percentage contribution of total earnings which working people make to this poll tax must remain as high as it has been and must remain the same? I have yet to see any reference to such a doctrine in Labour Party policy. Therefore, the point is without value.
  What my hon. Friends have been arguing today, and what my right lion. Friend the Member for Lanarkshire, North (Miss Herbison) argued in the main debate, is this. Why did not the Government, in the circumstances in which they are operating, put this burden on the employers instead? We have had no answer. It is no justification to say that, if one takes average earnings, average take-home wages, the percentage does not go up. My right hon. Friend knows well—I would not presume to teach her—that this means totally different things to people earning £13 a week and people earning £24 a week. It is common ground among all social workers in this field that
  1034
  it is highly dangerous and misleading to deal in averages and percentages when considering this point. I had thought that that was elementary.
  My right hon. Friend has made a disappointing reply. It has in no way changed my mind in opposing the Clause.
  Mrs. Hart: First, I take up the point made by the hon. Member for Chelsea (Mr. Worsley) with reference to subsection (2). The hon. Gentleman knows what the purpose is; it is stated in the Clause. It is to give extra powers to the inspectors of the Ministry. What the hon. Gentleman really wants to know is why the extra powers are needed. Essentially, they are needed to make sure that, where employment records are held by an agency, these records are available for inspection in order to ensure that contribution liability is being met. We have introduced the subsection because we have found some difficulty in making sure that there is no evasion of contributions, particularly in parts of the building industry. Parts of the "lump" system operate in such a way that we shall be assisted in ensuring that we can enforce contribution liability by the introduction of this subsection. That is its entire purpose. We think that the Department needs strengthening by the powers which the subsection will give.
  Next, I was asked about the Government Actuary's forecast and the basis for requiring that the National Insurance Fund should have more money available to it than had hitherto been thought necessary. These figures appear in the Government Actuary's Report, but I repeat them now in order to set the argument in perspective. Expenditure from the Fund is expected to exceed income by about £75 million in 1967–68. When the 1967 Bill was introduced, imposing the present contribution rates, it was expected that income would exceed expenditure. Hon. Members want to know what are the factors which have led to the change of view about the assumptions regarding the National Insurance Fund.
  I say to my hon. Friends who have just announced their intention to vote against the Clause that in so doing they will be challenging and rejecting the view that the National Insurance Fund would be liable to run into deficit and they

  1035
  would, therefore, be risking that there would not be enough money in the Fund to pay benefits to many of the lower-paid workers who become sick or unemployed about whom they are concerned.
  Mr. Heffer: Bring in another Bill then.
  Mrs. Hart: The fact remains that my hon. Friends are proposing to vote against a provision which will put the National Insurance Fund out of the danger of going into deficit.
  Mr. Heffer: Bring in another Bill.
  Mrs. Hart: If my hon. Friend would make his interventions in the ordinary way, standing on his feet, I might be better able to hear and deal with them.
  Mr. Heffer: I suggest that the answer is that the Government rush a Bill through Parliament, as they intend to rush the Commonwealth Immigrants Bill through, to put the full contribution on to the employer.
  Mrs. Hart: If that is my hon. Friend's view, his natural and logical course is of action is to vote against the Schedule, but that is too late at night for him, so he will not do that.
  Mr. Heffer: My right hon. Friend has no idea whether I shall be here to vote against the Schedule. She does not know whether I shall be here at that time. I shall decide at that moment what to do.
  Mrs. Hart: I apologise to my hon. Friend if I am drawing deductions about his motives from the statement of my hon. Friend the Member for Poplar (Mr. Mikardo).
  Mr. Heffer: My hon. Friend the Member for Poplar (Mr. Mikardo) speaks for himself. I speak for myself.
  Mrs. Hart: As I said earlier, the first point is that very minor variations in trends, or in what trends turn out to be, make a very substantial difference. It has been stressed that a 1 per cent. difference can make a difference of £20 million to the Fund. I stress that the facts, the information and statistics on which the Government Actuary prepares his assessment, are facts about a changing situation.
  1036
  There are two elements to consider. One is the situation itself and whether people retire earlier or have a greater tendency to become sick and the reaction to those changed facts in terms of the Fund. It is not easy for the Actuary to have the facts on all the varying trends available to him at a point in time when he needs to make a decision about how far a trend is temporary and how far it is permanent. If the information he gets from the various Departments as to what is happening—from my Department amongst others—indicates that this month more people are retiring from work than retired from work last month, he must make an assessment as to whether this is a monthly or a seasonal aberration or variation, or whether it is part of a long-term trend of which we are seeing just the beginning.
  It is not so much in essence a difficulty of making correct judgments about trends. It is much more a question of the facts of the situation themselves changing in an unpredictable way. For example, it would not have been possible for any Government Actuary or any Registrar-General to predict two or three years ago that there was likely to be a slight increase in the birthrate, demographic influences which might have profound effects on the economy. Nor can the Government Actuary, the Registrar-General or the Ministry of Social Security predict that some people will decide to retire at 64 or that people will retire at 65 instead of continuing in work a little longer.
  Mr. Pardoe: The right hon. Lady is correct in saying that some of these things could not be predicted, but the Government Actuary could have accurately predicted, by normal market research and motivational research techniques, people's intentions about their retirement age last year.
  Mrs. Hart: Of course. We could have had an opinion survey in July of last year and asked people, "When July of next year comes, will it be your intention to retire?" One could not possibly base predictions about the Fund on opinion surveys carried out at a point of time in advance of the point when the decision is to be made. This would lead to far greater defects than anything we could imagine from our present methods.

  1037
  One seeks to establish one of two things. The first thing is what are the current facts about a situation, which is what we ask, what we know and what we pass on to the Actuary—for example, "So many people retired this month. So many people retired last month". That is fact. Alternatively, one can ask people, "What is your intention next month?" The difficulty here is that by the time next month arrives they may have had a change of mind and they may say, "I shall stay on at work for another month or two". This would be a very unreliable basis on which to conduct National Insurance Fund finance.
  8.15 p.m.
  Mr. Tim Fortescue: Of course this could happen. However, this is done in every business. Due allowance is made for people who may change their minds. This allowance may be a 10 per cent. or a 5 per cent. factor. This is known by market researchers. A much more reliable view is obtained by assuming that the large majority of people will not change their minds than by not taking a survey.
  Mrs. Hart: If the hon. Gentleman can prove to me that the predictions of most business firms are always sound and accurate, I will consider the application of that technique. A 1 per cent. variation here produces a very large amount of money. This is one of the problems which we are up against and which the hon. Gentleman and any business firm is not up against. A 1 per cent. variation in their assessments does not normally produce such enormous consequences as a 1 per cent. variation here produces. The margins of error that market research surveys allow for are usually in excess of 1 per cent. Even the 1 per cent. factor here is very significant.
  The figures show that there were two major intensifications of the trend that produced the consequence we are considering. One of them was more earlier retirements, together with—they have to be seen together—lighter mortality, with the result that more old people are staying alive, having retired, and need to be paid retirement pensions and other benefits. The second was that there has been more sickness. One of my hon. Friends began to discuss this, because he is very concerned about it, but was ruled to be
  1038
  slightly out of order. I merely state the fact that greater allowance must be made for increased sickness.
  The consequence of both these factors produced a third factor, namely, that the flat-rate contributions do not yield as much income, because both of the previous factors lead to the result that fewer people are paying into the Fund. This is why the Fund is in deficit. It is no fault of the Government Actuary's that his predictions or assessments of last July have had to be revised in terms of more recent trends. Nor is it the fault of my Department or of the other Ministries which have been feeding in the information about the new situation as rapidly as the new situation arose. It is simply that new trends are developing and becoming firmer, and they change the situation.
  Mr. Worsley: Will the right hon. Lady confirm, in the light of what she has said, that no attempt is made to forecast on the basis of sociological research, and so on, what will happen in the future? It is entirely on existing trends and past facts.
  Mrs. Hart: Attempts are made to use current facts to make decisions about probable future short-term trends. If the current facts change, there has to be a revision of the assumptions about future short-term trends. This is inevitable in the course of events.
  I turn, finally, to the substance of the Clause in terms of what my hon. Friends have said about the lower-paid workers. I am sorry if my hon. Friends regard me as being arrogant. I think that they are grievously mistaken in taking the attitude that they are taking to the Clause. I say this because I think that the reasons I gave earlier were convincing reasons. I ask them to recognise that the Government are pursuing as rapidly as they can a new scheme which will avoid all the problems of a flat-rate poll tax in National Insurance. I will not go into all the arguments that I adduced on the Amendments.
  When we talk about the lower-paid workers, and I say this particularly to my hon. Friend the Member for Penistone (Mr. Mendelson), we are talking of those who earn less than average. In doing so we are bound to talk, on the

  1039
  one hand, of those who are a certain distance below the average, and those who are so far below that they fall into the category which, for convenience, is referred to as being of supplementary benefit level. This is because we have no other standard of reference at present. I doubt if it would be right to seek an absolute measure of poverty, because it is bound to be relative. As our standard of living improves it will be right that the standard we regard as below the level should also rise.
  The only convenient point of reference is the supplementary benefit level. We are bound to distinguish, in terms of degree and relativity, between those whose earnings leave them below supplementary benefit level and those whose earnings leave them somewhere between supplementary benefit level and average wage levels.
  Given that the purpose of a Socialist Government must essentially be to achieve the degree of redistribution of wealth that can reduce the disparities in society, we are nevertheless faced with the fact that, in terms of resources at our command, our priority objective in relation to those below average wage levels must be those who are the poorest rather than those who are less poor. The Government have given ample evidence of their concern for them, and of their actions to protect them.
  Throughout our incomes policy the emphasis has always been on the need and desirability of paying particular attention to the lower-paid workers. In family allowances we have introduced large increases, operating from this April. They are the first all round since 1952 and will operate in such a way, adjusted to taxation, that we can lay the foundation for further advances. We have done things about rent rebates, rate rebates, and safeguarding the position of this particular group when increases in school meals and welfare milk take place in April. The only people who will find that they are less well off will be those on the very fringe. For the rest we have taken tremendous care. My hon. Friend the Joint Parliamentary Secretary spent a great deal of time, together with Ministers from other Departments, working out detailed arrangements to ensure that the increases in family allowances, together with the
  1040
  increased charges in other areas, would not worsen the position of these people.
  We do not know how many they are. I cannot tell the hon. Gentleman who asked me that question, because this is a relative concept. Since there have been so many changes since the Family Circumstances Survey, some of which would tend to increase the numbers in the very poor group and some to decrease them, it is not possible to say. There have been rises in rates and wages, operating in different directions, together with rises in family allowances. We can only discover the number by another large survey of this type, or by some process of continuing research, which is the kind of thing at which we ought to aim.
  My hon. Friends are very wrong if they think that in these measures the Government have taken there is the slightest tendency to forget the desperate needs of this group of lower-paid workers, whose incomes leave them, in conjunction with their family responsibility, below supplementary benefit level. They are wrong too in believing that one can brush on one side the need to put the National Insurance Fund into a proper condition, because it is the National Insurance Fund which pays the benefits to those who need help in our society. They are therefore quite wrong in believing that their Socialist duty is to oppose this Clause. I believe that the support of this Clause can justifiably be included in my Socialist duty.
  Dame Irene Ward: The right hon. Lady has given a long and learned dissertation on what has happened within the National Insurance Fund. I wanted to put certain facts on the record. If one has to take account of these changes and trends and all these impossible situations, which one cannot possibly foresee or prepare for, is it not odd, having regard to all these things, that at the time of the General Election, the Government knew nothing about this, and that when the Prime Minister made his famous broadcast at the time of devaluation it never occurred to him? He talked about the protection of those in the lower income groups and said that no one would find their pockets affected by devaluation. He did not know anything about the alterations and the trends about which

  1041
  the right hon. Lady has spent such a long time telling us.
  All this goes to prove that nothing was taken into consideration at the time that the pledges were made, either at the General Election or by the Prime Minister in his speech. That is all I wanted to put on the record. I do not know whether the right hon. Lady can
  add a further dissertation. It would be very interesting, for the Committee and the country, to know whether the Prime Minister or the party knew at the time of the General Election.
  Question put,That the Clause stand part of the Bill:—
  The Committee divided: Ayes 205, Noes 29.

  Division No. 66.]

  AYES

  [8.27 p.m.

  Albu, Austen

  Greenwood, Rt. Hn. Anthony

  Moyle, Roland

  Alldritt, Walter

  Grey, Charles (Durham)

  Mulley, Rt. Hn Frederick

  Allen, Scholefield

  Griffiths, Rt. Hn. James (Llanelly)

  Neal, Harold

  Anderson, Donald

  Hamilton, James (Bothwell)

  Oakes, Gordon

  Atkins, Ronald (Preston, N.)

  Hannan, William

  Ogden, Eric

  Bacon, Rt. Hn. Alice

  Harper, Joseph

  O'Malley, Brian

  Bagier, Gordon A. T.

  Hart,. Mrs. Judith

  Oswald, Thomas

  Barnes, Michael

  Haseldine, Norman

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

  Beaney, Alan

  Hattersley, Roy

  Page, Derek (King's Lynn)

  Bence, Cyril

  Hazell, Bert

  Pannell, Rt. Hn. Charles

  Bennett, James (G'gow, Bridgeton)

  Henig, Stanley

  Parker, John (Dagenham)

  Binns, John

  Hilton, W. S.

  Pavitt, Laurence

  Bishop, E. S.

  Hooley, Frank

  Pentland, Norman

  Blackburn, F.

  Houghton, Rt. Hn. Douglas

  Perry, Ernest G. (Battersea, S.)

  Blenkinsop, Arthur

  Howarth, Harry (Wellingborough)

  Prentice, Rt. Hn. R. E.

  Boyden, James

  Howarth, Robert (Bolton, E.)

  Price, Christopher (Perry Barr)

  Braddock, Mrs. E. M.

  Howell, Denis (Small Heath)

  Price, Thomas (Westhoughton)

  Bradley, Tom

  Hoy, James

  Probert, Arthur

  Bray, Dr. Jeremy

  Huckfield, Leslie

  Randall, Harry

  Brooks, Edwin

  Hughes, Roy (Newport)

  Rees, Merlyn

  Broughton, Dr. A. D. D.

  Hunter, Adam

  Reynolds, G. W.

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

  Hynd, John

  Rhodes, Geoffrey

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

  Irvine, A. J. (Edge Hill)

  Richard, Ivor

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

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

  Roberts, Albert (Normanton)

  Buchan, Norman

  Janner, Sir Barnett

  Roberts, Goronwy (Caernarvon)

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

  Jenkins, Rt. Hn. Roy (Stechford)

  Roberts, Gwilym (Bedfordshire, S)

  Butler, Mrs. Joyce (Wood Green)

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

  Robertson, John (Paisley)

  Cant, R. B.

  Jones, Dan (Burnley)

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

  Carmichael, Neil

  Jones, Rt.Hn.SirElwyn(W.Ham,S.)

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

  Carter-Jones, Lewis

  Jones, J. Idwal (Wrexham)

  Roebuck, Roy

  Castle, Rt. Hn. Barbara

  Jones, T. Alec (Rhondda, West)

  Rogers, George (Kensington, N)

  Coe, Denis

  Judd, Frank

  Rose, Paul

  Coleman, Donald

  Kenyon, Clifford

  Ross, Rt. Hn. William

  Conlan, Bernard

  Lawson, George

  Rowlands, E. (Cardiff, N.)

  Corbert, Mrs. Freda

  Lee, Rt. Hn. Frederick (Newton)

  Sheldon, Robert

  Craddock, George (Bradford, S.)

  Lestor, Miss Joan

  Shinwell, Rt. Hn. E.

  Cronin, John

  Lever, L. M. (Ardwick)

  Shore, Peter (Stepney)

  Cullen, Mrs. Alice

  Lewis, Arthur (W. Ham, N.)

  Silkin, Rt. Hn. John (Deptford)

  Dalyell, Tam

  Lewis, Ron (Carlisle)

  Silkin, Hn. S. C. (Dulwich)

  Davidson, Arthur (Accrington)

  Lipton, Marcus

  Skeffington, Arthur

  Davies, Dr. Ernest (Stratford)

  Loughlin, Charles

  Slater, Joseph

  Dempsey, James

  Lyon, Alexander w. (York)

  Small, William

  Diamond, Rt, Hn. John

  MacColl, James

  Snow, Julian

  Dobson, Ray

  MacDermot, Niall

  Spriggs, Leslie

  Doig, Peter

  Macdonald, A. H.

  Steele, Thomas (Dunbartonshlre, W.)

  Dunwoody, Mrs. Gwyneth (Exeter)

  McGuire, Michael

  Stewart, Rt. Hn. Michael

  Eadie, Alex

  McKay, Mrs. Margaret

  Summerekill, Hn. Dr. Shirley

  Edwards, Robert (Bilston)

  Mackie, John

  Taverne, Dick

  Edwards, William (Merioneth)

  Mackintosh, John P.

  Thomas, George (Cardiff, w.)

  Ellis, John

  Maclennan, Robert

  Thornton, Ernest

  English, Michael

  McMillan, Tom (Glasgow, C.)

  Tinn, James

  Faulds, Andrew

  McNamara, J. Kevin

  Urwin, T. W.

  Finch, Harold

  MacPherson, Malcolm

  Varley, Eric G.

  Fitch, Alan (Wigan)

  Mahon, Peter (Preston, S.)

  Wainwright, Edwin (Dearne Valley)

  Fletcher, Ted (Darlington)

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

  Walker, Harold (Doncaster)

  Foley, Maurice

  Mapp, Charles

  Wallace, George

  Ford, Ben

  Marks, Kenneth

  Watkins, David (Consett)

  Forrester, John

  Marsh, Rt. Hn. Richard

  Watkins, Tudor (Brecon & Radnor)

  Fowler, Gerry

  Maxwell, Robert

  Wellbeloved, James

  Fraser, John (Norwood)

  Mellish, Robert

  Wells, William (Walsall, N.)

  Freeson, Reginald

  Miller, Dr. M. S.

  Whitlock, William

  Calpern Sir Myer

  Milne, Edward (Blyth)

  Wilkins, W. A.

  Garrett, W. E.

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

  Willey, Rt. Hn. Frederick

  Gordon Walker, Rt. Hn. P. C.

  Moonman Eric

  Williams, Alan Lee (Hornchurch)

  Gouriay Harry

  Morgan, Elystan (Cardiganshire)

  Williams, Clifford (Abertillery)

  Gray, Dr. Hugh (Yarmouth)

  Morrise charies R. (Openshaw)

  Williams, Mrs. Shirley (Hltchin)

  Williams, W. T. (Warrington)

  Willis, George (Edinburgh, E.)

  Woodburn, Rt. Hn. A.

  TELLERS FOR THE AYES:

  Wilson, Rt, Hn. Harold (Huyton)

  Woof, Robert

  Mr. Ernest Armstrong and

  Wilson, William (Coventry, S.)

  Mr. Ioan L. Evans.

  NOES

  Allaun, Frank (Salford, E.)

  Hughes, Emrys (Ayrshire, S.)

  Osborne, Sir Cyril (Louth)

  Atkinson, Norman (Tottenham)

  Jackson, Peter M. (High Peak)

  Pardoe, John

  Bessell, Peter

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

  Perry, George H. (Nottingham, S.)

  Bidwell, Sydney

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

  Ryan, John

  Booth, Albert

  Kerr, Russell (Feltham)

  Thorpe, Rt. Hn. Jeremy

  Davidson,James(Aberdeenshire, W.)

  Lee, John (Reading)

  Wainwright, Richard (Colne Valley)

  Davies, S. O. (Merthyr)

  Lubbock, Eric

  Winstanley, Dr. M. P.

  Dickens, James

  Mendelson, J. J.

  Dunn, James A.

  Newens, Stan

  TELLERS FOR THE NOES:

  Heffer, Eric S.

  Norwood, Christopher

  Mr. Michael Foot and

  Hooson, Emlyn

  Orme, Stanley

  Mr. Ian Mikardo.

Clause 2.

  (NATIONAL HEALTH SERVICE CONTRIBUTIONS.)
  Question proposed,That the Clause stand part of the Bill.
  The Chairman: The Question is, That the Clause—
  Mr. Maurice Macmillan Mr. Maurice Macmillan (Farnham)rose—
  Hon. Members: Oh.
  Mr. Macmillan: I agree with the implication from right hon. and hon. Members opposite that the main debate on the Clause could be taken on Schedule 2, but there are one or two points which I should like to raise at this stage.
  Naturally, we accept the Minister's view that all lower-paid workers deserve consideration but, as the right hon. Lady said, some are poorer than others; and we accept her corollary that priority should be given to the poorest. That was the burden of the Prime Minister's pledge when he was speaking of the result of devaluation on the people: that the poorest and those least able to help themselves would be protected. All I can say is that the Clause seems as odd a way of carrying out that pledge as Clause 1.
  There are one or two things that we would like to know from the Chief Secretary or whoever replies to this debate. If the purpose of this increase in the National Health Service contribution is to replace the prescription charge exemption, why are the Government exempting one lot of people whom they have designated as poor and retrieving the results of that exemption by means which will
  1044
  have the biggest impact on the lowest paid workpeople?
  Even if some of those people, as the Minister indicated, share in the exemption from the prescription charge, nevertheless the Clause cancels out that benefit by the increase in the National Health Service contribution unless they are exempted from this also. Of course, as has already been said in previous debates, there is really no method by which the Government could carry out the Prime Minister's pledge and the policy set out by the right hon. Lady earlier this evening without some form of graduated charge for the National Health Service stamp. It cannot be, I hope, that we are to be told that this will be a very significant increase in terms of the total cost. I do not think the same sort of argument can be held to apply as was applied to the insurance stamp, that the money was needed to reimburse the Fund, because the stamp itself produces only some 12½ per cent. of the total cost of the Health Service, and this increase will not be very significant marginally—except, of course, to those who pay it.
  Perhaps whoever is to reply to the debate, if any, on this Clause will also say what is the significance of the various increases. Why are employers paying only 8⁓ per cent. more, and employed men 17 per cent. more, employed women 22 per cent. more, and employed boys and girls 15 per cent. more? Presumably there is something behind this type of increase and there is some sort of theory which has gone to make these differences, other, perhaps, than raising them to the nearest convenient ½d.—which it may well be, for all I know.
  There is one other point. In the Second Reading debate the First Secretary, having been asked for details about

  1045
  the preparation of the exemption scheme, said:
  "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."—[OFFICIAL REPORT, 20th February, 1968; Vol. 759, c. 357.]
  I think the Committee would be grateful if the Chief Secretary could at this stage be a little more precise as to the progress of the discussions on exemptions, bearing in mind that, till the exemptions are made, those whom hon. and right hon. Members have designated as being the least able to bear the burden will have to pay the prescription charge.
  Perhaps he could further say precisely what is the relationship in the timing of Clauses 1 and 2 coming into force and the exemptions being fully operative in connection with the prescription charge.
  Those are the few points which we on this side would like to raise at this stage, without prejudice to any further contribution which we may feel inclined to make on more detailed aspects of Schedule 2, when the time comes to discuss that.
  The Chief Secretary to the Treasury (Mr. John Diamond): The hon. Gentleman the Member for Farnham (Mr. Maurice Macmillan) has indicated that he does not think a long debate is necessary on this Question, but has asked me certain questions which I shall do my best to answer. First, to the question he latterly asked, the answer is, quite shortly, that I have nothing to add to what was said on Second Reading; the distance in time is not sufficient to make it worth while to make a further statement to the Committee just yet.
  On the rates, the hon. Gentleman asked whether there was any question of rounding off the halfpenny. As I explained fully on Second Reading, the answer is yes.
  8.45 p.m.
  I want to spend more time on what he termed "helping the poorest". Helping the poorest is enabling those who would otherwise have to pay prescription charges to be exempt. As my right hon. Friends the Prime Minister and the Chan-
  1046
  cellor explained, if all categories of exemption are to be carried through, the proposal would cost some £25 million, and the way to recoup the £25 million is by the increase in the National Health Stamp. If we recouped it in the way in which the Bill proposes, there would still be a proportionate burden on the employee contributor which is interesting in its incidence. The proportion would he 0·72 per cent. of the average weekly earnings. The existing rate came into force in 1961, at which time, the hon. Member for Farnham supported the Government, when the proportion was 0·90 per cent. In 1964, when the present Government came into office, it was 0·77 per cent. The contribution we suggest, therefore, will result in a percentage proportionate burden which is lower than it was in 1964 and considerably lower than it was in 1961. I emphasise that it is necessary to have the contribution to provide help for the poorer sections of the community and those in greatest need in terms of health.
  I want now to draw attention to a further point which has not been sufficiently taken into account. This debate will have its impact on the debate on the Schedule, as the hon. Gentleman says, but I think that it is convenient to make the point now. The argument is put forward frequently about a flat-rate tax of this kind being a regressive burden, as it is, I have indicated what the proportions are, but that is not the whole story because people naturally will ask why those at the bottom of the scale should bear a comparatively high burden. I do not think that sufficient attention is paid to the net effect on families of direct and indirect taxes and subsidies in cash and in kind. If those are taken into account in terms of egalitarian effect, the position in 1966 was that a married man with two children earning just over £17 a week received as much in benefit as he paid in taxes. The break-even point was a little above £17 a week for a man with two children. For a man with three children, the break-even point was £23 a week. It has to be borne in mind that average wages then were substantially below what they are now, yet, even in 1966, a man with a wife and three children was receiving more in subsidies in cash and in kind than he paid in direct and indirect taxes on a wage of £23 a week. Therefore, it is wholly inaccurate to allege that we are

  1047
  unaware of the needs of those at the bottom of the scale in terms of living standards and incomes. We are fully aware of them, and the Government's policy has been such as to introduce that kind of situation, and, although I cannot give precise figures, my latest information is that the break-even point, as one would expect, is rising.
  In those circumstances, without going into too much detail on the Clause, I hope the House will be willing to allow it to stand part.
  Mr. Pardoe: I intend to divide the Committee against the Clause. Therefore, it behoves me to explain why, and I shall do so briefly.
  I do not wish to go into the arguments against a poll tax again. These are still as valid on Clause 2 as they were on Clause 1. I am against any attempt to finance our social security or our Health Service out of a poll tax. That is one reason why I shall certainly vote against the Clause tonight.
  There are many other methods by which we raise finance for the Health Service. The National Health Service contribution gives us about 11 per cent. of the total cost of the Service. Therefore, a very small increase indeed on other methods of taxation could produce the same result.
  I shall vote against the Clause because in so doing it will be a vote for certainty. The Chief Secretary has said—and it is implicit in the Financial Memorandum—that the purpose of the increase in the National Health contribution is to pay for the £25 million worth of exemptions which are to be made in prescription charges. I totally deny that the Government have any idea whether that £25 million is an accurate figure. They cannot say that it is an accurate figure, because they have not done the necessary negotiations which could lead them to a firm assessment. The right hon. Gentleman in his speech on Second Reading said that the Government had now entered into negotiations with the doctors and were about to enter into negotiations with the other interested parties—presumably the chemists and various other assorted categories. I hope that the "about to" is now in the past
  1048
  rather than the future, a few days having elapsed.
  It is impossible for the Government to put a firm figure of £25 million. Until the Government can tell us how they intend to administer these exemptions and give us a better indication than that given by the right hon. Gentleman—I understand he is not able to give a firm indication—it would not be right for us to vote a sum of money which is a totally uncertain figure.
  We know very little about the administrative costs of making these exemptions. I hasten to say that I am wholeheartedly in favour of exemptions because I am totally against prescription charges. But I oppose the Clause for what it does not do in the sense of reforming the whole basis of financing our National Health Service. Unfortunately, this is another small piece of patchwork legislation which will put off the day when the reform of the financial structure of the Health Service can be put through the House.
  Because I am against prescription charges and because these increases in the National Health contributions are to pay for those charges, it follows that I would be totally against the raising of these charges. I say to hon. Members on either side who are against prescription charges that logically they must be against this increase since it is designed to pay for them. Therefore, I shall follow logic in that part as well.
  Question put, That the Clause stand part of the Bill:—
  The Committee proceeded to a Division:—
  Mr. FITCH and Mr. GOURLEY were appointed Tellers for the Ayes but no Member being willing to act as Teller for the Noes, The CHAIRMAN declared that the Ayes had it.

Clause 3.

  (SCHOOL MILK.)
  Mr. John Lee: I beg to move Amendment No. 60, in page 3, line 7, at end insert:
  Provided that in no case shall the provisions of this subsection apply to a pupil whose parent or guardian or other responsible person is in receipt of unemployment benefit or has been in such receipt at any time during the past twelve months.

  1049
  About 18 months ago I moved an Amendment to the Finance Bill in a very short speech of two minutes. I hope that I shall be almost as brief in moving the Amendment, because I know that the majority of the Committee wants to get on to the substantive discussion on the Clause. The Amendment is one of a number of attempts to right a situation which many of us regard as indefensible, because it is this Clause, of the whole Bill, which is the most objectionable to my hon. Friends and myself who have been crowding the Notice Paper with Amendments. Indeed, the whole discussion has related to the iniquity of a flat-rate system, of flat-rate contributions, or indiscriminate methods of burdening the contributor.
  The Government's decision to withdraw facilities for school milk for secondary schools is offensive to us for many reasons, not least because of the reports in recent years which have come from the Child Poverty Action Group on the amount of adolescent and child poverty. It is quite clear that poverty is not confined to those in primary schools. The purpose of the Amendment is to try to safeguard those who are most likely to be affected adversely by the withdrawal of these facilities.
  I must apologise for the somewhat slipshod and imprecise wording of the Amendment. It contains a reference to
  "parent or guardian or other responsible person".
  I could not think of a more compendious way of embracing what I am trying to say, which is that the deleterious effects of the Clause should at least be spared to the children of those who have fallen into very difficult circumstances, namely, those parents, or those who are responsible for the children, who have become unemployed. The Amendment exempts those whose parents or guardians not only are unemployed at the time but have been unemployed before, since, if one has been unemployed, one's resources are run down. The 12 months is an arbitrary period, but it is an attempt to mitigate at least some of these effects.
  I have not had time for much preparation on this, since I have been much more concerned with the fact that my wife has presented me with a baby. Perhaps, in that case, I should declare an interest. I have come post-haste from the hospital to move this Amendment.
  Mr. Emrys Hughes: My Amendment concerns the position in Scotland and would mean that this provision would not apply—
  The Chairman (Sir Eric Fletcher): Order. I think that the hon. Gentleman is under a misapprehension. His Amendment, No. 5, is to be discussed with Amendment No. 10, which has not yet been called. At the moment we are discussing a separate Amendment, No. 60.
  Mr. Emrys Hughes: Do I understand that mine will be called later, Sir Eric?
  The Chairman: The hon. Member's Amendment, No. 5, is not being called separately but it can be discussed with Amendment No. 10, which is to be called later.
  9.0 p.m.
  Mr. Emrys Hughes: I wish to speak shortly on this Amendment as well, Sir Eric.
  One aspect which has not yet been mentioned is the effect on the farming community, and I am surprised that, on a matter of such importance to that community those, who usually speak for its interests know nothing about it. It is, therefore, left to me to say a word for the farmers of England as well as those of Scotland.
  This is bound to affect the English milk producers much more than the Scottish. The total likely saving is £5 million, of which £700,000 applies to Scotland and £4,300,000 to England and Wales. This must, of course, affect the farmers, especially when many are trying to recover from the effects of foot-and-mouth disease. Yet those who normally speak for them are missing, and it is left to me, a Scottish Member, to put the point of view of the English dairy producers. I shall develop the Scottish point later.
  The saving of £5 million happens to be the cost of running one Polaris submarine for one year. We are cutting off school milk for our children to pay for the running of a Polaris submarine for one year.
  I do not wish to develop that point further in respect of the United Kingdom but I shall have a lot to say about it in relation to Scotland. I was once told that the meanest kind of man was the one who would steal milk from a

  1051
  blind kitten. That is what the Government are doing politically by taking away milk from the children in the secondary schools.
  Sir C. Osborne: I wanted to make that point on the Question, That the Clause stand part of the Bill. I represent an agricultural constituency in England, and I support the hon. Member for South Ayrshire (Mr. Emrys Hughes). I should like to know what effect this provision will have on the Milk Marketing Board and the farmers who produce milk. Will it be a serious effect? Will it involve any special reduction in demand? Will the milk that would normally be sold or given to children in secondary schools go into normal consumption? Can it be absorbed, or will it go into the manufacturing side, from which not so much is received?
  I hope that we shall be given an explanation. Finally, I would not like the statement of the hon. Member for South Ayrshire—that he alone speaks for the farmers—to go unchallenged.
  The Under-Secretary of State for Education and Science (Mr. Denis Howell): I shall endeavour to address myself to the Amendment, which, I regret to say, has nothing to do with the Milk Marketing Board, or even to the considerations raised by my hon. Friend the Member for South Ayrshire (Mr. Emrys Hughes), which are more appropriate to be dealt with on the next Amendment, or on the Question, That the Clause stand part of the Bill. My hon. Friend the Member for Reading (Mr. John Lee) kindly contained his remarks and I shall try to follow his good example.
  I am sure that the Committee would wish me to congratulate my hon. Friend on adding to the educational problems of my Department by producing an offspring for whom we shall endeavour to do our best. Whatever quarrels he may have with us about school milk, at least he will be delighted to know that welfare foods remain inviolate and intact. Since his child will now be able to obtain welfare foods until 5 years of age and will still enjoy milk in primary school until the age of 11, my hon. Friend will not personally be worried for the moment.
  1052
  The Amendment is deficient in many respects. First, of all the people who could lay claim to be dealt with in this way it singles out one category, namely, the unemployed.
  Mr. John Lee: I appreciate what my hon. Friend says, but does he realise that other Amendments which have not been called would have widened the scope of the discussion?
  Mr. Howell: It is not for me to say what Amendments should be called; I can only address myself to the Amendment that is before us. In trying to assess and meet a need the Amendment is far less generous than the normal scales which are applied within the Department of Education, and which apply not merely to unemployed persons but to all kinds of other persons on supplementary benefits, especially the sick and pensioners. This is the system adopted in the schools meals service.
  In practice, it is also open to gross abuse and, therefore, could not be accepted by the Government. It provides that if a person is unemployed at any time during a period of 12 months his children should obtain free milk, presumably for the period of 12 months. That would mean that if a person were unemployed for one day or one week his children would automatically be eligible to obtain free milk for 12 months. That is what we presume the Amendment means.
  If it does not mean that but means that a child should get free milk for the period of unemployment, it would be even more ludicrous. We should have to set up a considerable organisation within the Ministry of Labour in order to provide milk when a father was unemployed and to withdraw its supply when he was employed. This could be an alternating practice, which would place a considerable burden on the administrative machine. In the schools—quite apart from our administrative difficulties—the teachers, having regard to their recent expression on the whole school meals service, would find great difficulty in working it.
  Mr. John Lee: My hon. Friend is advancing cogent arguments about the difficulty of exempting certain categories. Are we to take it that those arguments

  1053
  will be advanced in respect of any categories of people we may discuss later?
  Mr. Howell: My hon. Friend must not anticipate future speeches of mine which may deal with arguments yet to be put before the Committee.
  Even more important than the arguments I have advanced against the Amendment, if my hon. Friend's proposal were approved the effect in the schools would be extremely embarrassing, because it would mean that ordinary secondary school children would not receive free milk, while free milk would have to be given to the children of people who were unemployed. This would immediately create problems of embarrassment and sensitivity which the Government have spent the last 12 months, I believe with success, trying to eliminate. In November of last year my right hon. Friend sent circular 12/67 to all local education authorities on the subject of school meals. That circular made it plain that we did not intend to tolerate any system for the collection of money for school meals which made it possible to identify children who were receiving free meals.
  I am happy to say that we have achieved a large measure of success with that campaign, both in terms of improving the take-up, to which we will come later, and also in getting almost every local education authority to review its system for the collection of school meals money. New arrangements have in many cases been made for collecting this money, which is now often done by the collection taking place outside the classroom and by a variety of other means so that it is not possible to identify those children receiving free meals. We have high hopes that it will not be possible for much longer, if it is possible even now, for children receiving help by way of free meals to be identified in this way. If that policy commends itself to the Committee, it would be a grave mistake to depart from it in the radical manner set out in the Amendment. I therefore urge my hon. Friend to withdraw the Amendment or, if he will not, for the Committee to reject it.
  Mr. John Lee: I beg to ask leave to withdraw the Amendment.
  Amendment, by leave, withdrawn.
  The Secretary of State for Scotland (Mr. William Ross): I beg to move Amendment No. 6, in page 3, line 9, to leave out from ' duty ' to ' be ' in line 11 and to insert:
  ' or, in certain circumstances, confers a power on education authorities to provide, or to make arrangements for the provision of, milk for pupils and others) shall, so far as it relates to pupils in attendance at public schools, junior colleges or other educational establishments,'.
  The Temporary Chairman (Mr. Victor Yates): I suggest that it would be convenient for the Committee to discuss at the same time Amendments Nos. 7, 8 and 9.
  Mr. Ross: That will be convenient, Mr. Yates, because these are drafting Amendments to the provisions in the Clause dealing with the Scottish position. The first two represent a more explicit statement of the confinement of free milk to children receiving primary education and, in the next two Amendments, we put right an omission; that is, we do not intend to remove the free school milk from any children in special schools, being handicapped children and the like. The result is that this is at once a more explicit statement of the position in primary education and at the same time follows what has already been done for schools south of the Border. Be they children of 15, 16 or whatever age, so long as they are at special schools, the milk will be free.
  9.15 p.m.
  Mr. Emrys Hughes: I welcome, of course, the statement made by the Secretary of State for Scotland. The fact that he has had to make it shows what little thought was given to this Measure before it appeared.
  Amendment agreed to.
  Further Amendments made: In page 3, line 12, after ' duty ' insert:
  ' or, as the case may be, conferring such a power,'; In line 13, after ' education ', insert ' or special educational treatment';
  In line 16, at end insert 'or special educational treatment '.—[Mr. Ross.]
  Mr. Peter M. Jackson: I beg to move Amendment No. 10, in page 3, line 26, leave out from "Wales" to end of Clause and add:
  "or as regards Scotland, until the national food survey has conducted an up-to-date report

  1055
  on the nutritional value of the provision of school milk in secondary schools, and until Parliament in the light of its findings has decided to make this section operative by affirmative order".
  The Temporary Chairman: With this Amendment we can consider Amendment No. 5: In line 8, leave out subsection 2.
  Mr. Jackson: I very much hope that my right hon. Friend will accept this Amendment. Its gist is that the provisions of this Clause will become operative when hon. Members have satisfied themselves that the provisions have been justified. I begin my statement of the reasons for adopting this Amendment by referring to what was said in justification of this Clause by Front Bench spokesmen on 20th February.
  The Chief Secretary addressed himself to this problem and noted that there had been a decline in the inception of school milk in secondary schools. He said that this had dropped to 60 per cent. last year and to 58 per cent. this year. He also said:
  "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 nutritional evidence."
  That was a rather qualified statement, not a fulsome assertion in support of the provisions of this Clause. In reply to an intervention by my hon. Friend the Member for Pontypool (Mr. Abse) he went further. He said:
  "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 have been able to put forward this proposal."—[OFFICIAL REPORT, 20th February, 1968; Vol. 759, c. 252, 255.]
  That statement goes very much further than the earlier one.
  When he summed up the debate, the First Secretary referred to the proposal in a somewhat more qualified form. He said:
  "it cannot be said with certainty that this is medically necessary."—[OFFICIAL REPORT, 20th February, 1968; Vol. 759, c. 357.]
  1056
  The logic of that is that it cannot be said with certainty that school milk is unnecessary. That proposition logically follows. It is only right and proper that the House should be informed about the advice that the Minister has received on this matter. I have spent some time today going through the literature available to me, and all the evidence that I can find in the Library indicates that there is no support for the proposition that I have just read out.
  I begin by drawing the attention of the Secretary of State to a Report published by the Ministry of Health in 1937, that of the Advisory Committee on Nutrition, referring to milk. A great deal of work was done by that Committee. It said:
  "Milk is of such outstanding value that the consumption of a sufficient quantity of it may be regarded as the key to proper nutrition. Every one of the constituents of milk possesses high nutritive value and it is, therefore, most desirable that all of these should be utilised for human nutrition, more especially because the diets of many people are deficient in the nutrients supplied by milk and certain of its products."
  Paragraph 24 of that Report was headed:
  "Recommended increase of milk consumption."
  It went on to suggest that
  "the desirable amount of milk for children is from one to two pints per day."
  It might be said in reply that "That was 1937 and we now have the advantages of 30 years' knowledge. Perhaps the views of scientists then have been modified." Therefore, I draw the attention of the Committee to more recent work. I understand that one of the standard texts in this field is that of Davidson and Passmore, "Human Nutrition and Dietetics". It concludes:
  "All nutritionists would agree that a regular intake of milk is beneficial to growing children."
  In addition, I quote from an American authority named Sherman. He says:
  "milk greatly favours growth and development in youth, confers health and vigour throughout adult life and postpones old age. In no other way can the food habits now prevailing, especially in our cities, be so certainly and so economically improved as by a more liberal use of good milk."
  In those quotations I have talked about children. If I understand the argument that we had on Tuesday, young people cease to be children at the age of 11. We

  1057
  know that this is nonsense. Young people grow—there is a volume of evidence to suggest this—not only till the age of 16 or 17 but till the age of 19. So I think it is very regrettable that there should be this cut-off of milk consumption in our schools at the age of 11.
  I quote further evidence. Sir Wilfred Fish, the former President of the General Dental Council, had a good deal to say about the contribution of free milk in combating the prevalence and ugliness of hypoplastic teeth among children. The work which is being done by him is also confirmed by a nutritionist whom I presume all hon. Members will know, Professor Yudkin, the Professor of Nutrition at Queen Elizabeth College, London. I do not know whether my right hon. Friend is familiar with the more recent work of Professor Yudkin. However, I draw his attention to some of Professor Yudkin's findings. But I notice my right hon. Friend nodding; I am very pleased at that. Professor Yudkin is in the process of undertaking a study of school children in London. I do not have details of the specific point of the study, but I understand that his study is not in educationally under-privileged areas. His interim finding came as something of a surprise to me, as, I am sure, it will to many hon. and right hon. Members. He stated that, of those children, about a quarter of the boys and a third of the girls receive no solid food from their afternoon tea to next day's lunch, a matter of 18 hours. Without the intake of milk in the morning at half-past 10 or 11 o'clock, these children would, in fact, go hungry.
  I come now to a general statement which Professor Yudkin has made about the nutrient value of milk:
  "There are many ways in which children can obtain the diet necessary to promote health and promote growth, but the simplest and most economic way of ensuring this is to make certain that they have a good deal of milk each day. My personal view is that the Government's investment in school milk is paying excellent dividends."
  He did not say that he was referring only to young children. He has not qualified that statement with any reference to children up to the age of 11. Has my right hon. Friend or his Ministry received any advice on this matter from Professor Yudkin? If so, what was it?
  I turn next to the Plowden Report. All of us on both sides agree that our edu-
  1058
  cation welfare services are provided to assist poorer children to make more effective use of the education system. The Plowden Committee considered this matter in some detail, and I draw attention to various passages in its report. In Appendix 14 it was said:
  "The proportion receiving milk was correlated with bad social conditions".
  Table 6 lists the positive and negative correlations between certain social variables, on the one hand, and the take-up of school milk, school dinners and so on, on the other. My hon. Friend the Member for Reading (Mr. John Lee) made the point well when he spoke about the importance of school milk for the children of unemployed workers. The positive correlations in Table 6 are these: between the children of semi-skilled and unskilled workers and the intake of school milk; between children experiencing overcrowding in their housing conditions and the consumption of school milk; between children in low-value dwellings and the take-up of school milk; between family size and the take-up of school milk; between the children of widows aged 35 to 39 and the take-up of school milk. It is obvious that this section of the community will be much harder hit by the Clause than other sections.
  I drew attention now to an excellent article written by my hon. Friend the Member for Manchester, Wythenshawe (Mr. Alfred Morris) which appeared in the Guardian of 20th January. He summed up the objections to this Clause very well, quoting further evidence in his article:
  "The National Food Survey has demonstrated that in families with one child an average of 27 per cent. of the milk consumed per head is obtained through the welfare and school milk schemes."
  That is a small percentage, only 27 per cent. through welfare or the schools. However,
  "In families of two, three and four children, the figures are 36, 40 and 47 per cent. For many poorer families the welfare and school milk scheme undoubtedly provides much higher percentages of their total consumption and the National Food Survey also provides statistical proof of the vital importance of milk as a source of protein and calcium to families with three or four children where, as in so many cases, the nutritional value of their diet falls below the recommended allowances."

  1059
  We have been assured that such families will receive additional sums in family allowance, but many of my hon. Friends will join me in expressing some scepticism as whether the additional amount of family allowance will be spent on school milk. That line of argument does not convince me.
  9.30 p.m.
  The gist of our case is that, as a result of the Clause, many poorer children will suffer preventable hardships and permanent ill health. My hon. Friends and I cannot accept such consequences. I have some specific questions to ask. First, I have read statements to the effect that the Ministry has received advice; in other words, there must be a volume—I would hope a considerable volume—of evidence to counter the evidence I have presented. It behoves my right hon. Friend to give us some of this evidence so that people like Professor Yudkin and others can state whether they think it is satisfactory.
  Secondly, for how long has this matter been under review? As I understand it, the argument is not that we must save a miserly £5 million. It is that children over 11 are not terribly interested in drinking this milk; this is not an economy measure; this milk is not needed. Over what period has this study taken place?
  Thirdly, was this a detailed study? Anyone who thinks carefully about this will not be convinced by the argument that only 58 per cent. of children in secondary schools drink school milk. It will probably be found that in middle class areas the percentage take-up will be small but in educationally underprivileged areas the figure might be very high. Have the studies been comparative studies—that is, comparing schools in economically under-privileged areas with those in middle class areas?
  Finally, it is claimed that £5 million will be saved. I am sure that my right hon. Friend's attention has been drawn to the claim by the National Farmers' Union that farmers will lose about £2 million as a result of this exclusion and the Unions' statement that it will insist on this cutback in farmers' income being made good at the Annual Price Review. This milk will be sold to buttermakers and to cheesemakers for 1s. 6d. a gallon
  1060
  instead of 4s. a gallon. The sum which the Ministry of Agriculture, Fisheries and Food will have to make good, if it is to compensate farmers for their loss of income, is £1,875,000. If the National Farmers' Union is successful in its negotiation, the real saving may well be, not £5 million, but nearer £3 million.
  Sir C. Osborne: I should like to support the plea made so excellently by the hon. Member for The High Peak (Mr. Peter M. Jackson) for the retention of milk in secondary schools. I want to look at the financial side which to me is of equal importance. Before doing so I would say that this is the meanest Clause in a thoroughly bad Bill. How mean can a Government get to do a thing like this? Had hon. and right hon. Gentlemen opposite been on these benches they would have howled with anger if we had done this kind of thing. The language would have been unprintable if we, as a Tory Government, had proposed this. I cannot understand for the life of me hon. Gentlemen, who I know have the interests of the school children at heart, agreeing to a mean, miserable proposal of this kind.
  The Temporary Chairman: Order. The hon. Member is really dealing with the Clause. This is an Amendment. Perhaps he will confine his remarks to the Amendment.
  Sir C. Osborne: With great respect to the Chair, and of course I shall bow to your Ruling, the hon. Member for The High Peak was allowed to deal with the matter from the very widest aspect, and I thought that I could do the same. If you rule me out of order, I cannot continue.
  The Temporary Chairman: The hon. Member for The High Peak was careful to relate his remarks to a survey, and I am asking the hon. Member to confine himself to the Amendment on the Notice Paper.
  Sir C. Osborne: If I am confined by the Chair, which I think is rather unfair—[Interruption.]—I withdraw that. If I am to be confined in this way, with your permission and that of the Committee, I will wait until the debate on Clause stand part, and then I will say what I have to say, like it or not.
  Mr. Emrys Hughes: We listened to a very interesting speech by my hon. Friend the Member for The High Peak (Mr. Peter M. Jackson), dealing with the nutritional aspects of this Clause. He has asked some very pertinent questions and I should like to ask some equally pertinent ones about the position in Scotland. He has quoted many eminent authorities on the subject of nutrition but I believe that the pioneer and the greatest expert of all in this subject was John Boyd Orr, when he was Director of the Rowatt Institute of Aberdeen.
  I am quite sure that when this Bill reaches another place, if Lord Boyd-Orr is able, he will descend upon the House of Lords and make a speech. I hope that this Measure will be rejected there. The classic book on milk nutrition was written by John Boyd Orr 30 years ago. This Measure is retrogressive and we should have some definite evidence as to whether the Government have carried out any inquiry on purely dietetic and nutritional grounds. Have they carried out any inquiry at the Rowatt Institute at Aberdeen? Have they come to any conclusions at all about nutrition or is this merely a piece of economy—a miserable piece of economy brought in at the last minute?
  I have made some inquiries about what this decision means to Scotland. In the part of the County of Ayrshire which I represent, £24,000 a year will be saved. Curiously enough, the people who have become interested in this matter are the farmers of Kilmarnock. who promptly sent a telegram to the right hon. Member for Kilmarnock (Mr. Ross) pointing out what effect this will have on the dairy industry of the county.
  Mr. Eric Lubbock: I bet he did not reply.
  Mr. Hughes: I should like to know whether an inquiry was carried out in Ayrshire, which has a very good and long record in providing milk for school children. One of the pioneers of it was the late Mrs. Clarice McNab Shaw, a predecessor of my right hon. Friend the Member for Kilmarnock. I am sure that if she had been a Member now she would have been opposing the Clause and arguing on the same lines as I am arguing. In Lanarkshire, £81,000 will be saved; in Glasgow, £150,000; and in
  1062
  Edinburgh, £53,000. I should like to know whether any inquiry was carried out by the education authorities in Scotland before the decision was made to cut off milk for the secondary schools. If not, why not? Surely the local authorities, which have experience in this matter, are entitled to some consideration. If no inquiry was made, it should have been made.
  I have conducted an inquiry of my own. I live in an area in Ayrshire in which there is a fairly large secondary school and a small Roman Catholic school. This weekend, I had conversations with the Rector of Cumnock Academy. He told me—and these are the latest figures—that 705 pupils, or 62·2 per cent., get milk. If the Clause is passed, 705 pupils in this school will have their milk cut off. There is a smaller school, a Roman Catholic school, called St. Conval's near my house. I have no brief for this school, because the children of it sometimes come along and steal my apples. But, because they steal my apples, that is no reason why I should steal their milk.
  Suppose that some intelligent school child, or even somebody in a brains trust of the Young Socialists, asked what was the reason for this. It is said that the country is in difficulties, that we must find money for the Polaris submarines, for the "Britannia" and other things. It may be asked, "What is the economic reason?". The answer may be, "The country is in a bad way. We need more exports". But how will this decision help exports? Will the farmers who are engaged in producing the milk go into the factories to help to increase exports? Perhaps they will be needed in Johnnie Walker's factory at Kilmarnock. Will there be any economic advantage if the people who may be displaced from the farms of Ayrshire manufacture one liquid instead of another?
  It would be difficult to put up an answer to an intelligent question asked by an intelligent pupil when told one day by his teacher, "No milk today." When asked why, the teacher would have to reply," That was the decision of a Labour Government. I am thoroughly ashamed of this."
  Sir C. Osborne: Say it again.
  9.45 p.m.
  Mr. Hughes: I do not need to say it again. It has probably gone home. That position is typical of Scotland.
  If there is no economic argument, what possible case is there? The financial argument is simply superficial and trivial. There is, however, the argument of whether the children take the milk. I have made inquiries and I discover that 705 pupils at the big secondary school take it. It can, therefore, be said that if 62 per cent. of the children in a big secondary school like Cumnock Academy take the milk, there is justification for continuing it.
  I have asked whether there can be waste, and I made inquiries from a friend of mine who is the janitor at the school. He said, "Yes, there is waste. Some children do not take the milk. Some bottles go back partly empty." When I asked whether he was in favour of cutting off the children's school milk, however, he replied, "Definitely, no." Every school teacher, every official and everybody connected with supplying milk to the schools of Ayrshire whom I have been able to consult has agreed that this is a retrograde action and educationally is completely unjustifiable.
  I turn to the economic case. I believe that the farmers have a case. At the weekend, I was able to consult one of the best known farmers who lives in Ayrshire, Mr. William Young, of Skerrington Mains, a constituent of my right hon. Friend the Secretary of State for Scotland. He expressed to me in forceful terms the position of the Scottish Milk Marketing Board. He pointed out that the cut will mean that in Scotland the supply of 2 million gallons which is consumed in secondary schools will be lost to the farmer. This means that in Ayrshire many small dairy producers will feel the loss as a result of the cutting down of school milk.
  I have a wealth of statistics, but I do not propose to go further in this matter than to say that the farming community regards this as a very bad step from the viewpoint of the milk producer. Every person who is interested in the economics of the milk industry thoroughly agrees. It is not as bad as in England—we have not had foot-and-mouth disease in Scotland—but at a time when
  1064
  we are being told that we need to grow more food at home, this is how the farmer is being encouraged.
  I had a statement from a farmer who supplies a local school. The economics are that if the vans which take out the school milk do not have to deliver to the school, overhead charges will be such that that farmer will probably have to increase the price of milk to the consumer. Instead of treating the dairy industry in that way, we should be encouraging it. My hon. Friend the Member for The High Peak pointed out the implication that when the Price Review comes, the farmers will say that the loss must be made up in the Price Review. If the price goes up, where is the economic sense of it?
  I think I have stated the case very clearly and very concisely from the point of view of the schoolchildren and that of the farmers and that of the dairy industry, and I hope we shall get some modification of the Government's attitude and that this will be welcome in the county which I represent.
  Mr. Stan Newens: My hon. Friends the Member for The High Peak (Mr. Peter M. Jackson) and the Member for South Ayrshire (Mr. Emrys Hughes) have made out a very strong case and I entirely concur with what they have said. I utterly deplore the proposal to abolish school milk in secondary schools. I say this as a teacher and one who has had a number of years' experience teaching in secondary schools.
  Instead of arguing merely about financial results what we have done in proposing this Amendment is to give my right hon. Friends an opportunity of testing the validity of their argument on nutritional grounds. Let us postpone the implementation of this proposal till the nutritional value of the provision of school milk to secondary schoolchildren is investigated. That, surely, is an eminently reasonable proposal? If, as a result of a survey, it is proved that no nutritional value of any significance is provided by this means there will be a very strong argument for abolishing the provision of school milk in secondary schools, but surely my right hon. Friend would not insist on going ahead with a proposal of this sort if he believed it

  1065
  would cause serious damage to the nutrition of even a small section of our children in the secondary schools? Therefore, what we ask by this Amendment is that investigation be made before a decision is taken, before the damage is done.
  There is today a widespread assumption, which is quite false, that the milk is no longer necessary, that we have completely conquered the consequences of insufficient consumption of milk. There was up to a few years ago a widespread assumption that we had completely conquered poverty in this country, and then the child poverty group and other people got to work and they showed that there is a great deal of poverty here in our midst, and on a scale which none of us believed to be possible. It is true today—is it not?—that there are hundreds of thousands of children living in homes in which the wage earners do not receive wages equivalent to what they would receive from the Ministry of Social Security if they were unemployed. There are, therefore, many children in families up and down the country relying on incomes which are below Ministry of Social Security standards. The Government's surveys of family expenditure have repeatedly shown up on what low incomes some people have to sustain their families. Let us remember that the cost of living index does not fully reveal the state of poverty in our country because it over-estimates the consumer durables, and in many families, still to this day, there are not that number of consumer durables which there are assumed to be, on average, up and down the land.
  In my view, school milk is particularly necessary for the children of large families in the lower income groups, especially where, because of the disgraceful conditions of unemployment, those families are found in the development areas. I represent an area which is regarded as a very prosperous one, but I am extremely concerned about the children of families living in other parts of the country, so I am in no way advancing the selfish point of view of my constituents alone.
  Even if it is proved that milk is not necessary for children of secondary school age who come from the homes of higher-paid workers—and I do not concede that point, though I am prepared to accept it
  1066
  for the sake of argument—there is still an overwhelming case for the retention of school milk for the children of lower-paid workers. If the milk is not provided free, it will not be drunk on anything like the scale by children who are in need. We must remember that there is not a completely straight correlation between income and nutritional standards. Many people do not provide themselves or their children with a balanced diet; indeed, in many cases, children from poorer homes tend to get a less unbalanced diet. If parents provide their children with the money and it is possible to buy milk at school, the children may prefer to buy pop, but that does not indicate that the children's judgment in this respect is one of which we can approve as responsible Members of Parliament. Quite often, parents will allow their children to buy what they choose. As a teacher, I have pleaded with children to spend their money on school meals which provide a balanced diet, rather than yield to the attractions of the chip shop or the pie and mash shop up the road.
  The Government's proposal will do a great deal of damage to the nutritional standards which our children have enjoyed for a good number of years. My hon. Friend the Member for High Peak has stolen some of my thunder, but I have before me the Report of the Chief Medical Officer of the Ministry of Education for 1939 to 1945 on the Health of the School Child. According to that Report, in 1935 over 11 per cent. of our children were classified as having slightly subnormal nutrition or bad nutrition. Even in 1945, over 9 per cent. were in that same category. One matter about which the Chief Medical Officer was very proud was the way in which the provision of school milk had been increased until 80 per cent. of children were thought to be taking it.
  How many hon. Members doubt that the provision of school milk is one of the factors which have provided the better standards of health enjoyed by our children since then? How have we the temerity to take it away now? Do we have to wait for proof of malnutrition and the dire effects of this sort of policy before we restore the provision of milk?
  In support of the case for the Government's proposals, I know that some people will quote the attitude of school

  1067
  teachers who are not enthusiastic about secondary school children having school milk. Many teachers take that view not because they object in principle to school milk, but to the disorganisation which it causes in the classroom. This is a problem of proper school organisation. In the school in which I used to teach it never caused any disorganisation in the classroom. So I ask my hon. Friends—
  It being Ten o'clock, The CHAIRMAN left the Chair to report Progress and ask leave to sit again.
  Committee report Progress.

  BUSINESS OF THE HOUSE
  Ordered, That the Proceedings on the Public Expenditure and Receipts Bill be exempted, at this day's Sitting, from the provisions of Standing Order No. 1 (Sittings of the House).—[Mr. Gordon Walker.]

  PUBLIC EXPENDITURE AND RECEIPTS BILL
  Again considered in Committee.
  The Temporary Chairman: Mr. Newens.
  Mr. Newens: Mr. Yates, I was referring to the fact that some people had said that many teachers were not in favour of the provision of school milk for secondary school children. This is on the ground of the disorganisation which may be caused in the classroom. This can be overcome quite simply. It was overcome in the school in which I used to teach. Therefore, the problem of organisation ought not to be regarded as a reason for dispensing with a vital service.
  The proposal to abolish school milk for secondary school children is disgraceful. It is a paltry step to take this milk away from our children, particularly—
  Sir C. Osborne: The hon. Member for Epping (Mr. Newens) has made a most powerful case against this proposal from his experience as an expert teacher. May I ask him if he is going to vote against it—[Interruption.] I am entitled to ask that—[Interruption.]
  The Temporary Chairman: I was about to suggest that the hon. Member might come a little closer to the Amendments we are discussing, because this is not Clause stand part.
  Mr. Newens: The hon. Member for Louth (Sir C. Osborne) will have his answer in due course. I hope that he will be patient.
  If school milk is abolished for secondary school children the saving will have no useful effect, as has been pointed out by my hon. Friends already. It will only be used to justify a larger subsidy to the farmers. What on earth is the use of reducing expenditure if it results in a reduction of production in relation to the reduction in expenditure?
  The idea of a Socialist Government economising at the expense of children's milk means a blow which will fall particularly on the children of lower paid workers. With respect to the hon. Member for Louth and his hon. Friends, it is clear from the emptiness of the benches opposite that very few members of the Conservative Party are concerned about this issue. We know that their children will not suffer from this particular step.
  How many of us are prepared to go through the morning without a midmorning drink? Instead of letting children drink bottles of pop, and so on, why not provide them with something of real nutritional value?
  I support the Amendment, and I plead with the Government to accept it, because it will provide for a national survey to be taken before the school milk is stopped and the damage is done. I hope that my right hon. Friend will agree to this. If he does not, I shall feel strongly about it, and I am sure that I shall satisfy the curiosity of the hon. Member for Louth.
  Mr. Orme: I want to deal with a specific item in relation to this question of nutritional value as it affects my constituency and that of my hon. Friend the Member for Salford, East (Mr. Frank Allaun).
  It has been said that the provision of milk in schools has played a major part in raising the standards of children's health and in body building. This is so beyond a shadow of doubt. The provision of free milk to school children is a basic Socialist measure, and I am sure

  1069
  that I carry the vast majority of my hon. Friends with me when I say that.
  As has been said, there are different standards in this country. Some Members represent better areas of higher development than others. I represent an area which has its roots in the Industrial Revolution. Much of our housing is still bad. There is still overcrowding, and although some modern secondary schools have been built there, many of the children are in many ways under-privileged.
  To support that statement I have here the report of the Medical Officer of Health for Salford, Dr. Burns, who is well known, not only in Salford, but throughout the country. He says that Salford children are particularly in need of a school health service. He goes on to say:
  "It is well to recognise the difficult social psychological and physical conditions in the less fortunate parts of North-Western urban industrialised areas. These conditions have led to a lower standard of health and a lower social—cultural standard of living Mothers who have had poor health themselves with difficult financial and family conditions are often not able to give their children the practical health education in general and, in particular, the nutritious but expensive foods such as proteins and fruit which are essential for full health.…
  We know that Salford schoolchildren are among the shortest and lightest in England, as evidenced in a special Ministry of Health enquiry into heights and weights of school children aged five and fourteen years…"
  In my area there are no fixed baths in 34 per cent. of the households. Only 45 per cent. of the houses have the exclusive use of hot water, fixed bath, and indoor toilets. The same sort of thing is to be found in many areas of Britain. We want to get rid of these conditions, and they are being got rid of, but too slowly. Coupled with those conditions, one finds moderate or large-sized families with the parents earning low wages as labourers in engineering, on the Manchester Docks, or in one of the many industrial occupations in the area. School milk is a basic part of the nutrition of many families. Since this measure was proposed, school teachers have told me that, although they do not like onerous duties Like supervising school meals or school milk distribution, none of them wanted these things abolished so that their conditions could improve. They wanted a
  1070
  different method of dispensing, but not abolition.
  The child who has a decent breakfast before he leaves home and returns to a good meal might not mind, but children from larger families without these conditions, almost without exception, take school milk. I can, therefore, think of no more retrograde step by this Government to save £5 million, especially in view of the other factors like the effect on the farming community. There are many fine new blocks of flats and new houses in my city, but on Sunday I entered a part of the city which still has to be cleared and will exist for quite a few years yet, unfortunately. I saw children and talked to many families about this and I believe that these are the people who will suffer, in cities like Salford and the main industrial conurbations.
  The Government must virtually have been out of their minds to have decided, for the sake of an approximate saving of £5 million, to make this a part of the package. This will damage children's diet. On Second Reading, it was said that this will not be applied to primary school children. A couple of years ago no member of the Government would have contemplated it for secondary school children either. How standards decline!
  To deny free school milk to children from 11 to 15 when they are growing and need to build up their bodies is a retrograde step. Many of these children, through no fault of their own, may not get a balanced diet but may be fed pie and chips or pop—
  Mr. Frank Allaun: They may get no breakfast.
  Mr. Orme: As my hon. Friend says, they may get no breakfast.
  This is what we are trying to avoid. My right hon. Friend knows that we put down the Amendment with sincerity—not to demonstrate against the Government but to get rid of this Measure. There is a way out for him—to accept the Amendment, which postpones this proposal until the new Committee has reported. Surely nothing could be more fair. Surely any Government—especially our Government—would want to go ahead on the basis of a report like this. I hope that these points will go home to my right hon. Friend and the Government. If not, some of us will have to

  1071
  record our objections in the only way open to us.
  10.15 p.m.
  Mr. James Davidson: I rise to speak very shortly in support of the Amendment. I am glad to follow the hon. Member for Salford, West (Mr. Orme), because I agree entirely with what he said. It so happens that a few months ago I went to an annual gathering of the British Legion in a village and was introduced to the oldest legionnaire—a very old man. I said to him, "To what do you attribute your tremendous health and vitality at the age of 80?" He said, "I have never touched a drop of milk since the day I was weaned".
  That is not a very good argument for the Amendment, but it is a good argument inversely, because I had no proof of this point. The Amendment provides that milk should not be withdrawn until there has been a national food survey, so that the facts on which withdrawal are based are well proved. There was no proof that the old man's not taking milk was the reason for his health. I suspect that it was something very different—perhaps a liquid of a totally different colour.
  There is another reason why I feel it essential that milk in secondary schools should not be withdrawn. In a certain class in the local school in my village there was a boy—one of a family of seven—with a widowed mother, living in a two-roomed tenement. Incidentally, the family has now emigrated to Canada. I had cause to complain about the amount of homework children from this class were given, and the head teacher replied that it was quite fair because the same amount of homework was given to every child.
  I then compared the child to whom I have referred with another child, whose mother was an ex-schoolteacher, and said, "There is no equality in this, because whereas the child whose mother is an ex-schoolteacher goes home at night to a good supper, having had a good breakfast and a school meal in the middle of the day, and is then coached by her mother, who presses her on so that she will do well the following day, the other child, who is one of a family of seven, has
  1072
  to go home, carry the coals, help look after the younger children and do all sorts of other chores.
  In a case like that the boy was probably living on a very much poorer diet than was the girl. In my opinion the withdrawal of school milk will still further remove the possibility of achieving equality. At least children competing in school should have the same basis of equality in nutrition, even if they cannot have that basis in respect of the type of home background in which they are required to do their homework.
  There is another aspect of this matter. I can speak from experience gained from my children. I suggest that this is an entirely arbitrary withdrawal of milk, because it must be borne in mind that there is a wide age range at which various children reach puberty. I have a boy of 12 who has not reached puberty, although he is at secondary school, and a girl aged 10 who has reached puberty but is still at primary school. There must be many parallel cases. I suggest that the boy of 12 is much more in need of milk than is the girl of 10. I suspect that the age ranges are much wider than that, and that this withdrawal of milk is entirely arbitrary in relation to puberty.
  Children's teeth are notoriously bad in the county of Aberdeen, partly because the water has a high acid content. It is good drinking water, but its acid content has a bad effect on teeth. I speak from experience as a farmer when I say that if cast ewes are brought down from Ross-shire and kept for a season or two in Aberdeenshire, even if they come down with a full mouth of teeth, within two years they will have lost the lot. This is due to the acidity of the soil as well as the water. In Aberdeen it is essential that children, right up to the age of 16, 17 and even 18, should drink plenty of milk if they are to grow at least into middle age with a mouthful of decent teeth.
  Not being a dairy farmer, I do not have an interest to declare. I would, therefore, not argue that school milk should continue to be provided in secondary schools merely so that farmers may keep their profits up. However, I understand that the Government are striving for a managed market in agriculture. This withdrawal of milk from secondary

  1073
  schools is bound to cause some depression in the dairy industry. This will have striking repurcussions on beef from the dairy herd, and will inevitably assist in raising the price of beef and our dependence on imported beef. Hon Members will know what this may mean, particularly if we are forced to depend more on beef imports than we are at present.
  A number of hon. Members have referred to the attitude of teachers. From the teachers with whom I have talked, I cannot believe that there is any great feeling on their part against the giving of milk to secondary school pupils because of the nuisance in classroom routine that is caused. It would be a selfish and inward-looking teacher who thought along those lines. Any teacher worth his or her salt knows that schools are run for the pupils and not for the teachers.
  Sir Myer Galpern: All evening I have been asking myself whether the proposal to withdraw milk from secondary schools is being advanced on nutritional grounds or on grounds of economy. If it is being advanced on nutritional grounds, then, as has been admirably argued by my hon. Friends, we need an immediate and comprehensive survey to find out whether milk has any nutritional or dietetic value for the pupils who are now receiving it.
  I remind the Government that the Amendment is not a wrecking proposal but merely says, in effect, "If the Government can adduce ample and conclusive evidence to show that the supply of milk to secondary school pupils is of no nutritional value whatever, then we are prepared to consider the question of its abolition". But the whole argument tonight revolves around the fact that milk, as far as it can be established without an expert and scientific survey, does not have any nutritional value—and certainly not the sort of value which, particularly as laymen, we have thought it has had for so long.
  If we are being told, in the absence of medical evidence, that milk has no nutritional value, then I suggest that that is a phoney argument because it means that we should have withdrawn this milk many years ago, particularly at times when there have been difficulties with our educational budget. The weakness of the Government case lies in the fact that they
  1074
  are not prepared to say categorically yes or no whether milk has any nutritional value.
  As a layman and former chairman of the largest education committee in Scotland, the Glasgow Corporation Education Committee, I assure the Government that we have established, as far as laymen can establish, that milk has been of the highest nutritional value. In industrial areas and in Glasgow and its environs we unfortunately have a large and growing army of young people, who, to supplement the meagre incomes of families, go out to work in the mornings, often leaving home as early at 5.30 a.m., then going to school and, after school, doing one or two hours further work. No humane person would allow a boy to go out in the harsh weather we experience in the North simply for the sake of his health. He goes out in order to gain income which is very much needed to make the difference between absolute poverty and a semblance of solvency.
  These children, in ever-increasing numbers, will go straight from employment in delivering newspapers to the classroom. They will have no drink of any kind, from about half-past five in the morning to the meal at 12.30 p.m. The £5 million per annum spent on the supply of milk to secondary school pupils is not being wasted because the milk is drunk by those pupils. It is not thrown down the drain; they are drinking £5 million-worth. That in itself is a sufficient argument that a large percentage of secondary school pupils require milk.
  I am concerned about the large army of pupils who will have nothing whatever from early morning until midday in the depths of our harsh winter. How a Socialist Government can say—one can conclude that it is only for economic reasons—that we must save this £5 million and deny these children the opportunity to build up their bones and be able to enjoy reasonable health in later years, I cannot understand.
  My son who is not at school now, through a great deal of force and argument had school milk. He will not be encouraged to continue the process any longer because the Government say that the milk has no nutritional value, and surely they would not say a thing so mean solely to save £5 million. So the Milk

  1075
  Marketing Board has lost a customer. We could multiply that by the number of secondary school pupils who find the milk supply to them is ceasing and they are told that it is of no nutritional value. What about the misleading advertisements which say "Take a pinta day"? I suppose they should be stopped forthwith because, according to the Government's assessment, the milk has no nutritional value after the age of 11-plus.
  I shall certainly go into the Lobby to support the Amendment because I believe this matter has not been properly thought out. It has been done in a panic and an effort to cheesepare for a miserable £5 million. I put this last point in the form of a question to my right hon. Friend. Clause 3, according to my reading, does not preclude a local authority from continuing to provide the milk. It simply removes from the authority the onus of supplying the milk. Assume that a local authority such as Glasgow—which has
  1076
  done many things in the past despite Government instructions, whether from a Labour or a Tory Government—decides to continue the provision of milk to secondary school pupils. Glasgow Corporation has a strong case for doing so, and I hope that it will do so even though the cost would have to come on to the ratepayers, who I am sure would willingly bear it. Would the expenditure rank for Exchequer grant? Or will the Government say "Because you are doing something that we are trying to prohibit you from doing, it will not be eligible for an education grant"?
  I hope that the Government will see the wisdom of the Amendment. Let us be honourable and face our responsibilities and agree to conduct a survey. Let us on these benches tell the Government that if at the end of the day they can show beyond a shadow of doubt that milk is not worth drinking we will accept that.
  10.30 p.m.
  Mrs. Lena Jeger: I support the Amendment because it seems the only reasonable way in which we can make a thoroughly mean and contemptible Clause in any way tolerable to us. I am very surprised at my right hon. Friend, who is not an unkind man. I am sure that he can take no pleas ire in this process of deprivation with which he has become associated. I think it fair to ask in the Amendment for him to pay regard to the information and nutritional advice that has been given to him. If we are not satisfied with its amplitude, our Amendment should be accepted. It asks for the facts of the situation on which the decision has been based.
  It seems a most extraordinary economic doctrine that has suddenly and conveniently been discovered to coincide with an economic crisis in which the Government are concerned. My right hon. Friends cannot have it both ways. It is incredible that there is real clinical judgment or hanest professional advice behind this policy. If it were a question of a sudden discovery by some underpaid medical officer of health somewhere that milk may not, in the Minister's words, be medically necessary, surely it would have been more credible if the doctrine had been adduced separately in an education context and not read out in that lugubrious list of economic sacrifices, of cows which had to be killed. It seems most extraordinarily irrelevant.
  As an old civil servant, I know that Ministers can always get the advice that they want. [Interruption.] One of my right hon. Friends says that I must have been a very bad civil servant. But I have some recollection of how these things work. What we have to consider is not only that there has been this flashing light on the road to Damascus which is to convert us all to a religion of non-milk drinking but that this moment of truth occurs at the precise age of eleven. If that is the kind of advice on which my right hon. Friend is basing the Clause, I can only say, with hesitation, that the advice that he is given is more convenient than clinically credible. The coincidence is too extraordinary.
  There is another thing that I cannot understand. We are told that our
  1078
  children are so much bonnier, better and healthier that they do not need milk. What survey has my right hon. Friend carried out to convince himself that the reason why they are so bonny, healthy and splendid is not that they have been having milk? Or is he really looking around and saying that these children have thrived on milk and it has done them so much good that we should now take it away from them? It is an absurd proposition to put to the Committee. In my view, one of the reasons why we have a bonnier generation of children is that we are now getting in our schools the children of young mothers who themselves. when they were at school, were the first generation to have the benefit of school milk and school meals. If our suggestion for a survey is refused, I must press my right hon. Friend to explain on what information he has come to his conclusion.
  I turn now to the Plowden Report. I do not want my right hon. Friend to say that Plowden refers to primary school children and is, therefore, irrelevant. The Plowden Committee was a very good and thorough Committee. In Appendix 14 to its Report, it reported that:
  "The proportion of children receiving dinners was highest in the high social class areas where social conditions were good.… The proportion receiving milk was corelated with bad social conditions. The contrast in patterns may well have been due to the fact that a charge is imposed for meals. Thus, the proportion receiving dinners tended to be low where the proportion of children in great need was high."
  Because the milk was free, in the poorest areas and schools the proportion of milk consumed was higher.
  What evidence has my right hon. Friend that this pattern which Plowden found in primary schools is not repeated in the secondary schools? Have we not a pattern in the secondary schools of fewer children in the poorest areas taking dinners and most taking the milk, probably taking the milk, indeed, because they are not taking the dinner? I have no evidence about it. An investigation to uncover that sort of information would be most helpful and would enable the House to come to a rational and objective conclusion.
  I know that there are problems in secondary schools. When I was at

  1079
  secondary school, I could not stand milk—and I do not really go much for it now. I do not think that children should have milk pushed at them. Nothing is worse for children than being made to have something because it is good for them. But, in the absence of evidence to the contrary, I want the milk to be available for those who want it. In the experience of teachers with whom I have discussed this matter, it is the children who really need it who take it most avidly, who take it hungrily.
  Mr. Geoffrey Rhodes: This has been said by two hon. Members now. To my great regret, I understand the take-up to be worst in the poorest communities.
  Mrs. Jeger: I can only say that that is not the evidence of Plowden. I appreciate my hon. Friend's intervention because, if we are to contradict Plowden now, this is another reason for having a further survey and for putting further information before the Committee. If my hon. Friend and I have rather different impressions and information from different teachers and we are reading different authorities, that is all the more reason—I am glad to see that my right hon. Friend is nodding—
  The Secretary of State for Education and Science (Mr. Patrick Gordon Walker): I was just moving my head. I was not nodding.
  Mrs. Jeger: My right hon. Friend's head slipped. In the comprehensive report which we had on the circumstances of families, it was made abundantly clear that there is in this country a hard core of poverty, notably poverty among children.
  I want to ask my right hon. Friend whether he has related the information in the survey to his present proposals. We have been anxious for a long time about this question of child poverty, and we were told to he patient because the Government did not want to take any steps without a thorough survey, without a thorough investigation. A very good survey was done and I can only suggest that it is very important that in this matter the Government should take time.
  After all, this medical discovery that milk may not be absolutely necessary is
  1080
  not the same as the discovery that the milk is actually poisoning the children. Therefore there seems to be no need for this indecent haste. Let us look at the whole question more carefully. May I remind the Committee that this survey found that in the poorest families, where the father was out of work, only about one quarter of those entitled to free meals at school actually took them. I appreciate all that has been done to improve this, but what we are arguing for is some investigation into whether these children who do not have dinners are not benefiting from having free milk.
  Are these nutritionists who are advising my poor right hon. Friend saying that free milk is bad for children who do not have dinners, or has my right hon. Friend no information on whether milk is good for children who do not have dinners? If we have not got this information, surely the decision is premature? We know that in every aspect of the welfare services where one has some charges and some options out of the charges, there is overall a low take-up of benefits. It is only by making the service available free that we can be sure that people benefit from it.
  Information has been given to the Committee about Professor Yudkin's work. I want to stress the discovery in the National Food Survey, that in families with one child, 27½ per cent. of the milk intake in those families came from welfare and school sources. Jump to four children and it is found that 47 per cent.—nearly half of the milk consumption in those families—came from welfare and the schools. My right hon. Friend can ask: how do I know that these are secondary school children? I do not know, but I do not know whether he knows. The sort of survey we have in mind would discover points such as this.
  Royston Lambert, writing in "Nutrition in Britain 1950–1960", says:
  "The findings of the Government's Food Survey, when analysed, do not support the popular assumption that the diet of the British people has improved uniformly in the years 1950–1960. On the contrary, they show that imperfect nutrition, judged by the official standard of adequacy, has actually become more extensive."
  Later he says:
  "It is when the findings are examined by family size and composition that the national performance is seen to be misleading. Family size and composition are now the principal

  1081
  determinants of nutritional status in our society."
  I will not weary the Committee any further. Enough has surely been said to convey to my right hon. Friend our genuine anxieties, our anxieties, as has been said, not to wreck this Clause—not yet—but at least to be sure of what we are doing. The Committee has absolutely no evidence on which it can come to a rational, fair decision.
  10.45 p.m.
  Mr. Lubbock: How right the hon. Lady the Member for Holborn and St. Pancras, South (Mrs. Lena Jeger) is to say that we must be sure of what we are doing. Until we have the information recommended in the survey, how can we be sure and how can we let the Clause go through unamended without the strongest possible assurances from the Minister that he will provide that information?
  Of all the reversals in Government policy since they came into office, the one which we are not discussing is, perhaps, the most extraordinary. If at the 1964 Election anybody had said that in three years' time the party opposite would be depriving secondary school children of milk, people would have thought him mad. I am astonished that the Government have come to the pass that we are discussing this evening and depriving secondary school children of their milk to pay for the economic mistakes which they have made over the last three years.
  Even if we admit that the Government have made all those mistakes, why should they take it out in this mean and petty way on the children in our schools? This is shocking. What I also find shocking is that so few hon. Members on this side of the Committee have remained to take part in the debate. We could have done with some expert advice from a few of the farmers on this side. Have they not been receiving expert information from the National Farmers' Union concerning this matter, to which reference has been made several times, not least by my hon. Friend the Member for Aberdeenshire, West (Mr. James Davidson)? Some of the points made by my hon. Friend were extremely relevant.
  The problem goes far wider than merely the dairy industry. It has repercussions for the whole of agriculture and
  1082
  the prices we pay for other foodstuffs, such as beef in particular, and for our balance of payments; although I shall not refer to that in detail because we are considering the health of the schoolchildren and all other things pale into insignificance in comparison. It would have been valuable if we could have had the advice of some of the farmers on this side to add to that given by my hon. Friend the Member for Aberdeenshire, West.
  I dare say that when the Minister replies, he will point to the increased family allowances which have recently been provided for by the Government and the increased social security benefits which are being introduced. The point is, however, that they are being rapidly swallowed up by increases in the cost of living. The family allowances had not been increased for a long time until the recent change, which has been put partially into effect and will be completed in April. By the time that parents received those increased family allowances to which they are entitled in April, however, nearly the whole of that amount will have been swallowed up by increases in the cost of living and will be surpassed during the coming year as the effects of devaluation show themselves throughout the economy.
  In my opinion, therefore, the parents of families with many children will find themselves worse off in spite of the increased family allowances. Similar considerations apply to the people on unemployment, sickness and supplementary benefits of various kinds.
  The survey should not only include the nutritional effects, but also how the families on low incomes, or in receipt of benefit of various kinds, will be affected by the Clause and whether the children in those families will receive the milk and whether their parents will be able to pay for it from the increased benefits which the Government have provided.
  When looking at the figures which are available, one must have considerable doubts. In the Family Expenditure Survey Report for 1966, for example, showing the amounts spent on milk in families with various incomes, there is a significant correlation between the size of a family's income and its expenditure on milk. In families with a weekly income

  1083
  of between £6 and £10, the expenditure on fresh milk was 5·45s., whereas in families with an income of between £20 and £25 the weekly expenditure on milk was 10·21s., or nearly double. So, either one has to say that the children of families with incomes of from £20 to £25 were drinking too much milk, or that the children in the families with incomes of from £6 to £10 were not getting enough. Therefore, the secondary school milk was of very considerable benefit to these poorer families on from £6 to £10.
  It is quite obvious to me that if we take this secondary school milk away the families with such small incomes as that will not be able to afford out of their own pockets to make up for that supply of milk. They will have other expenses—children's clothes, electricity, gas, transport, many of which items are already going up because of the Government's general economic policy. They will simply have nothing left over to buy extra milk to make up for the milk which their children are to be deprived of in school.
  The hon. Lady the Member for Holborn and St. Pancras, South (Mrs. Lena Jeger) referred to the Circumstances of Families Report presented by the Ministry of Social Security. Here again we have absolutely concrete evidence that a very large number of families with children are living at or below the supplementary benefit level; there were no fewer than 1,110,000 children in families at or below the supplementary benefit level as at the date of that Report.
  In view of that huge number, unless the Government can say categorically that there has been no nutritional value in milk all along, then it is a mean and despicable thing which they are doing.
  Mr. Mendelson: After the comprehensive case which has been made by so many hon. Members, all I want to do is to take up two lines of argument which were left in the air by the Government during the Second Reading debate and ask my right hon. Friend to clear them up, if he will.
  The first one is the case made by the Chief Secretary to the Treasury when he opened that debate. He said:
  "We very carefully considered the possibility of providing free milk for some
  1084
  secondary school children 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 secondary school children 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 finances. In particular, there is the overriding human difficulty that any such provision would inevitably single out children and lead to considerable embarrassment."—[OFFICIAL REPORT, 20th February, 1968; Vol. 759, c. 252.]
  But earlier in the same speech the Chief Secretary had already told us:
  "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."—[OFFICIAL REPORT, 20th February, 1968; Vol. 759, c. 252.]
  What the Chief Secretary, on behalf of the Government, was telling the House on Second Reading was—and this is the point I wish to put to my right hon. Friend—that two-fifths were not taking it; three-fifths were taking it.
  There was some doubt as to how many of those three-fifths really needed it. Anticipating the point which hon. Members might make, and also being concerned themselves, like the rest of us, with those children, the Government had tried, the Chief Secretary said, in other words, to find some means of seeing to it that those children among the three-fifths who were taking it last year should get it, but they had failed to devise an administrative machine to get children to receive the milk. In other words, because they did not find means of ensuring that the children who needed free milk should continue to have it, they decided to drop the whole scheme. That is selectivity stood on its head.
  It is a remarkable achievement for a Government who are carrying on all these discussions on selectivity. We have Ministers saying that it depends on the end from which one starts. The attitude of the Labour Party, on the other hand, always has been that one starts from the end at which it is required. Faced with a situation where only 60 per cent. of children are taking free school milk, the Government turn selectivity upside down and, because they cannot find administrative means to do the job, they turn down all children, including those who badly need it.

  1085
  The second point which I wish to put to my right hon. Friend arose out of an intervention by my hon. Friend the Member for Pontypool (Mr. Abse). It referred to the other argument advanced by the Chief Secretary in reply to my hon. Friend the Member for Salford, West (Mr. Orme), who pointed out that, to his own knowledge, a number of children went to school in the morning having had no breakfast or, at best, an inadequate breakfast. My hon. Friend's point was very much reinforced by my hon. Friend the Member for Glasgow, Shettleston (Sir M. Galpern) in his remarkable contribution.
  The Chief Secretary addressed himself to my hon. Friend's point. Summarising his argument, he said that the Government were aware of the position and intended to deal with it. Asked how they would deal with it, the Chief Secretary said that we on this side of the Committee should be patient, because he would tell us. They intended to launch a publicity campaign to bring home to the parents of children entitled to a free school meal that they were entitled to it, the idea being to encourage larger numbers to have it. In my interpretation of what the Chief Secretary said, I see that I carry with me my hon. Friend the Parliamentary Secretary, with whom I usually agree on facts, though not always on policy.
  My hon. Friend the Member for Pontypool asked how it could conceivably help those children who are not getting a proper breakfast to deprive them of school milk, even if they are persuaded by the Government's publicity campaign and have the meal at lunchtime to which they are entitled? That point is unanswerable. If we accept that a publicity campaign is to start and the hope is that the Government will persuade more children to have the free meal at lunchtime to which they are entitled, how can that justify our not seeing to it that they get some milk in the middle of the morning? It is absurdity taken to its nth degree.
  My right hon. Friend turned round to one of my hon. Friends who intervened not long ago, and I noticed his look of relief and half-smile. It was the only intervention which he could hope to adduce to make even an oblique point to support the Government's case. Apart
  1086
  from that intervention, we have not heard one word in support of the Government's case.
  Mr. Rhodes: Before my hon. Friend draws too many conclusions from my intervention, if I am fortunate enough to catch your eye, Sir Eric, I shall point out to the Committee that my point makes the present decision a very bad one.
  11.0 p.m.
  Mr. Mendelson: In that case, never have I been more delighted to have been proved wrong than on this occasion. That reinforces the point that I was making. My right hon. Friend was wise and much shrewder than I thought in shaking his head when I said that he turned round in relief. He had no reason to turn round.
  The point is that the Government ought to take note of the feeling in the Committee and among their supporters. Governments have occasionally done this, though not very often, and it has stood them in good stead.
  An Hon. Member: Stansted.
  Mr. Mendelson: My right hon. Friend knows that there has been no consultation with the Members of the Parliamentary Labour Party on this proposal. He also knows that if there had been consultation the proposal would have been rejected by an overwhelming majority of the Parliamentary Labour Party.
  In those circumstances, it would be the wisest and the most democratic course for my right hon. Friend, when he comes to reply, to announce that the Government accept this most reasonable Amendment and go forward with the support of their own supporters and most other hon. Members.
  Mr. Brian Harrison: I think that attention should be drawn to the fact that in so important a debate concerning a basic foodstuff there is no representative of the Ministry of Food here to look after the interests of the Department, unless the Secretary of State for Scotland has a watching brief on behalf of the English Department. However, having heard him complain bitterly at other times where there has been no Scottish Minister responsible for this section present, I think we are entitled to be critical of the fact that the right

  1087
  hon. Gentleman responsible for Agriculture and Food is not here tonight.
  Mr. Pardoe: The hon. Member for Maldon (Mr. Brian Harrison) is making points about the absence of certain hon. Members. Is he satisfied with the number of back benchers of his own party who are present here tonight?
  Mr. Harrison: It is extremely important that the Minister directly responsible should be here. [HON. MEMBERS: "Answer."] Furthermore, it is equally surprising that we have not had any contribution from that Department. I am, however, delighted to see that the Minister directly responsible for sport should be present, because I am sure that he will be able to contribute to the queries which have been raised by the hon. Gentleman who have put forward this Amendment suggesting that an inquiry should be made. I am sure that the hon. Gentleman is conscious of the fact that his Department has been among those who have sponsored and enthusiastically supported the Round-Britain-Race where adults have been proved to benefit from the supply of mlk.
  It is ludicrous that, on the present inconclusive evidence, a line should be drawn between primary school children and secondary school children about whether they should have milk. It is ludicrous, and I would be only too interested to hear the sort of remarks that will be made by right hon. and hon. Gentlemen currently on the Government Front Bench. If this proposal had been introduced by a Conservative Government as an economic measure, the hypocrisy of the current scrooges on the Government Front Bench is horrifying—
  Mr. John Ryan: The hon. Member for Maldon (Mr. Brian Harrison) speaks about hypocrisy. Is he aware that he came in only three minutes before he started to speak?
  Mr. Harrison: I am grateful to the hon. Member for Uxbridge (Mr. Ryan) for giving me the opportunity to explain why I was absent from the Committee for only two hours during the whole of this debate. I was in very much earlier, but I was called away on some constituency points. That does not alter the
  1088
  fact that no case has been made for not giving free school milk to this group of children. I very much hope that wiser counsels will prevail, and that the Government will look again at the possibility of an inquiry, so that we can get some real facts.
  There is just one possible reason why some right hon. and hon. Gentlemen opposite have taken this line, but this is the sort of inconsistency which I do not think can have any weight. A long time ago there was a scare that milk was taking up quantities of Strontium 90. If the Government are worried about this today, they ought to cut out supplying free milk right across the board, and not merely to the one section of the community which is now to suffer. These youngsters are not able to look after themselves, because they do not have a vote. The Government cannot make a case for denying this form of welfare food to adolescents at an age when they most vitally need it.
  Mr. Rhodes: I remind the hon. Member for Maldon (Mr. Brian Harrison) that the most parsimonious thing about the debate during his two-hour absence has been the attendance of his colleagues on the benches opposite. My impression of the debate is that only a few radicals on educational matters within the Labour Party and Members of the Liberal Party have expressed any interest in this subject.
  As we are talking about hypocrisy. I challenge the right hon. Member for Birmingham, Handsworth (Sir E. Boyle) to declare the Conservative Party's policy with regard to the supply of milk for secondary school children. My opponent at the last General Election said that he understood it was Conservative Party policy to economise on school milk because this service was not required at the secondary stage. I shall be interested to hear the official Conservative policy.
  This is a debate on nutrition. It is a very narrow debate, or should be to be in order, and it seems that we are arguing about whether there is sufficient evidence to justify the economy being made by not supplying milk to children over 11 in the secondary schools. I have read a great deal of evidence on this subject. It is bound to be somewhat inconclusive, because individuals vary within social classes, in terms of their own

  1089
  health, and in terms of the rest of their diet.
  What I would concede is that it is clear that the nutritional value of milk for someone below the age of 11 is, generally speaking, much higher than for someone above that age, but there is no real medical evidence that there is no nutritional value, or little significant value, in milk for children above that age. It all depends on the individual.
  The whole point of many of the speeches from this side of the Committee is that the nutritional value of milk is particularly high when there are relatively large families with relatively low incomes, where the per capita consumption of milk in the family is very low. In other words, the nutritional value of milk is in direct relation to the rest of the child's diet, and this is where the crunch comes. Those who will suffer most from this measure are the poorest families, the largest families.
  I represent a northern constituency. The per capita consumption of milk is lower in the North of England than in any other region. It is markedly lower than in the South-East.
  I understand from doctors that there is evidence that in parts of South-East England there is now a problem of overweight in children in their early and mid-teens. That may be a problem in the South-East, but it is not a very big problem among the children of the unemployed, lower-paid workers in Tyne-side, for example. We must therefore ask whether there is still a sufficiently hard core of lower-paid workers with large families where there is an inadequate intake of milk. Are there not enough for the Government to be very cautious about abolishing school milk in secondary schools? We must make sure that only if there is substantial medical evidence to warrant this step should it be taken.
  That is why I think that this provision is premature. I understand that various food surveys are going on, which will carry out substantial investigations into this problem, and I should have thought that it would be better to have a far deeper investigation before coming to the conclusion that we should withdraw school milk in secondary schools. I shall listen to the answer from the Minister
  1090
  with as much objectivity as I can, because I am willing to be convinced.
  If it had been a question of saving a substantial sum, such as £50 million, it might have been reasonable to say that there was so doubt about it, and as a large sum was involved we should let it go. But the sum involved is very small, and we have not heard the medical evidence.
  On the question of take-up, which caused some confusion between my hon. Friend the Member for Holborn and St. Pancras, South (Mrs. Lena Jeger) and my right hon. Friend, it is probably true to say that the take-up by children of working-class families at primary school is higher than the average, although the position varies in different parts of the country. But there is evidence that take-up is relatively low, even in the children of working-class families, at secondary school level, although this, again, varies in different parts of the country.
  But I do not draw the conclusion that because the take-up is low among the children of working-class families we should not care whether school milk is withdrawn or not. I take the contrary view. If, because of a lack of education in nutrition and the understanding of a proper diet, there is a low take-up among members of the community who often need milk most, in my view it would be fatal for the myth now to get round that milk for children beyond the age of 11 is of no great value, because this would make it even more difficult to educate working-class families on the value of milk for their children. That argument does not strengthen the Government's case.
  In the North of England the last solid intake of food in many working-class families is as early as 5 or 6 o'clock. There is no solid breakfast—sometimes there is no breakfast at all—and the school meal is often provided, on a shift basis, as late as 1 o'clock. This means that some children have to go for 16 or 17 hours between solid meals. I do not suggest that the provision of one-third of a pint of milk will solve the problem of these families, but it would help a little.
  There are not many teachers who go through a whole morning without some liquid refreshment, even if it is only a cup of tea, and the abolition of school milk in

  1091
  secondary schools is something that requires serious questioning in this Chamber. Until we have seen the results of the survey we need to hear a far more substantial case than has been put forward. I made a statement a year ago that from my observations of working-class families I had come to the conclusion that our policy should be the provision of a half pint of milk each day in schools.
  I know that it will be said that some families do not need the milk, but I am getting sick and tired of pointing out that the worst effect of the abolition will be among the poorest working-class families, whose particular interests I was sent to the House of Commons to defend.
  11.15 p.m.
  Mr. Ryan: I hope that my right hon. Friend will meet the substantial points made in the first-class speeches on this Amendment. I single out the moving speech by my hon. Friend the Member for The High Peak (Mr. Peter M. Jackson) and the speech by my hon. Friend the Member for Glasgow, Shettleston (Sir M. Galpern), who cast serious doubt on the decision-making processes through which the Government went before announcing this major decision.
  The research to which we refer in this Amendment could be chemical or physical research into the nutrient quality of milk, or research to assist research already done into the consumption of milk. I hope that my right hon. Friend can tell the Committee what survey the Government commissioned into the nutrient value of milk which caused such a change of policy; and that he can tell the House clearly when the survey was conducted. I can hardly believe that it was between 21st November when the letter was sent to the International Monetary Fund and 17th January when the statement was made to the House announcing this decision, with other quite different ones.
  If research showed that the nutrient value of milk was not what we thought, surely the change could have been made, and the benefits derived, earlier? One hears remarks by people that milk in secondary schools should be abolished, and there was a most curious argument by a member of the Labour Party at the weekend that only 40 per cent. of
  1092
  children want their milk. If one translated this into rate rebates or supplementary pensions, that they should be cancelled, because only a few want them, and others do not, does one scrap them or continue them as a genuine social vehicle of advance for our people?
  This leads one to say that part of the research should be into wide regional variations into the take-up of milk. Teachers and the National Union of Teachers have expressed doubts about the way milk is dispensed and this calls for increasing study into a better way of dispensing milk. My right hon. Friend would find it difficult to make a statement that it was no longer true that milk was well-known to contain nutrients which were necessary to children because this would start a move away from milk throughout the country which would be harmful.
  My hon. Friend the Member for Shettleston, asked whether local education authorities would still be entitled to provide milk, should they so desire, and whether the Exchequer would bear the cost if a local authority was prepared to mount such a service. Might I ask my right hon. Friend whether he would encourage local authorities or individual schools to provide an alternative source of milk through vending machines, what control there would be of such machines and what arrangements would be made for them. These practical questions are being asked in one's own constituency by people who are gravely concerned by the switch in policy.
  In supporting the Amendment, my feeling is that the Government's problem is not so much for research in the social sphere to see the use and value of milk. All the evidence points to a decision contrary to that taken by the Government. The Yudkin Survey, the National Food Survey and the Household Expenditure Survey showed that school milk is most necessary for the larger and the poorer families, and, unless he produces evidence to the contrary my right hon. Friend will be accused of having taken this decision irrationally.
  Last week, the Government announced another inquiry on Stansted, which we hope will not disregard all relevant factors, as the first did. We hope that my right hon. Friend will bear that lesson in mind, that there is no substitute for

  1093
  rationality in making the right decision. If that has been abandoned whether to appease bankers or anyone else, another decision has to be decided on. But that will not be the end, since groups like the Child Poverty Action Group will probe this decision over the years. If it is wrong, it will come back to the Labour Party and the House. I plead with my right hon. Friends to accept the Amendment.
  Mr. Laurence Pavitt: I face the difficulty of most hon. Members after a comprehensive debate on a narrow point, especially since my hon. Friend the Member for The High Peak (Mr. Peter M. Jackson) has done his homework so well. I, too, support the Amendment and feel keenly the emotions of the hon. Member for Orpington (Mr. Lubbock), who found it extraordinary, and of my hon. Friend the Member for Holborn and St. Pancras (Mrs. Lena Jeger), who found it mean and despicable. I find it incomprehensible. I have been working with my colleagues who are in the Cabinet for years and cannot understand how they reached this decision.
  Under the Amendment, the nutritional facts would be established before the Clause was implemented. I am glad that a representative of the Ministry of Health is here, because that Ministry is seeking to get away from cure to prevention of illness. This is what the National Health Service is about. We have the opportunity when a child is growing to establish solid bones and healthy bodies for the rest of his life. Now, at the age of 11, and despite the fact that bones will grow until the age of 20, we will ignore this factor. Precisely because of this opportunity of giving school milk we have been one of the few countries to eliminate rickets. The calcium and protein which we have fed school children has given them the strength to withstand such diseases.
  The National Food Survey showed that, in a family with two children, the protein and calcium diet broken even; with three children, the deficiencies are 5 per cent. in protein and 6 per cent. in calcium; with four children, they are, respectively, 10 per cent. and 13 per cent. One of the great advantages of the National Health Service was that we were fighting against bad teeth, which
  1094
  lead to so many other problems in the human frame. The school dental service is undermanned and, with the present ratio of dentists to children in, for example, the Inner London Education Authority, the task is impossible.
  It was a tragedy that at the time when we were making inroads into this problem, our affluent society meant more fruit lollies, more ice-cream, more soft drinks, with all their cyclamates, and the rest of it, with the result that as fast as we were able to make progress in the dental sphere, we lost ground. One of the advantages on our side in this battle, which we have been fighting for 20 years to secure healthy teeth, has been the knowledge that every day the diet of children has contained calcium, and this has been part of the weapons at our disposal in this struggle.
  Now, for the sake of £5 million, we are told that we have been wasting our time for 20 years, that we were wrong and that we need not have bothered. In the whole framework of what we have been trying to do, I still find that in the Labour Party many people want us to continue this work and believe that decisions like this can only mean that we are going back on the pledges which we have given over the years. Thus, on straightforward health grounds, as well for reasons of commonsense, I must support the Amendment in the Lobby and hope that the Government will do the same. Without an assurance that there will be no harm to the health of the nation, I could not possibly support the Clause in its present form.
  Sir C. Osborne: Hon. Gentlemen opposite may be interested to know—[HON. MEMBERS: "Get on with it."]—I have been sitting here since four o'clock this afternoon and, being the only Member of my party wishing to speak to the Amendment at this stage, I find it difficult to accept the jeers of hon. Gentlemen opposite. I have had to wait until all hon. Gentlemen opposite who have wanted to speak have done so. I protest because, having spent so many hours listening to them, they should have the decency to listen to me without jeering. I have sat all this time because I support the Amendment and regard the Clause as abominable. No hon. Gentleman opposite can be proud of this Government

  1095
  proposal and they must vote against it. Because, like most hon. Gentlemen opposite, I support the Amendment, I have stayed on to register my support. If I did not feel this way, I would have gone home hours ago.
  An hon. Gentleman opposite referred to the Minister as "my poor right hon. Friend". How that fits the Minister. The right hon. Gentleman is accident-prone.
  Mr. Ivor Richard: Do not be patronising.
  Sir C. Osborne: The Minister has handled this problem tonight in a way which disappoints even his keen supporters. He must accept the Amendment, and I have sat here since four o'clock waiting to hear him say that he would do so. [HON. MEMBERS: "Get on with it."] Having waited all this time, I will make my own speech at my own pace.
  The Amendment refers to having a nutritional value test. The Minister must relate that to a financial test. For example, how much nutritional value will be set against the miserable £5 million which he hopes to save out of total Government spending of £10,000 million, this representing a saving of about half a farthing in every £? Half a farthing is what the Government are defying their best supporters over to force through a policy which none of them likes and which, if there were a free vote tonight, would be turned down. This Amendment, if it is rejected, will be rejected by the votes of hon. Members who have heard nothing of the argument throughout the day. If those of us who have sat here all day and taken part in the debate were to vote now, we would overwhelmingly support the Amendment and reject Clause 3. Clause 3 reaches the very bottom.
  11.30 p.m.
  The hon. Member for South Ayrshire (Mr. Emrys Hughes) made a quip many hours ago. He said that someone had described as the meanest thing a human being could do was to steal the milk from a blind kitten. I have a better quotation. It is from a speech by Jimmy Maxton, who was a very honoured member of the party opposite. Even the Foreign Secretary will accept that. Discussing
  1096
  this kind of proposal, Mr, Maxton said, on 8th September, 1931, when we had a stooge Labour Government—and this is very much to the point tonight:
  "the … Government … enters the House, not as the great, stalwart defender of the nation, as it described itself, but as the miserable hireling, the kept person, of the banking interest of this country; and it enters on the clear understanding that finance and its high priests only tolerate it if it is prepared to take the milk out of the bottle of the unemployed man's baby."—[OFFICIAL REPORT, 8th September, 1931; Vol. 256, c. 54]
  Now the Government are taking the milk out of the bottle of the school children. From this the back benchers below the Gangway are censuring their own Front Bench. The proposal against which this Amendment is moved is the most despicable I have heard in my 23 years membership of this House. If we had a free vote it would not go through; the Government know that well.
  As against the loss in nutritional value for school children, the Government are to save £5 million. How can they justify that? I will give two examples of Government spending, one of which sticks in my gullet. The right hon. Lady who is Minister for the Arts boasted on 2nd February that she had received from this Government an extra £550,000 for the Arts Council.
  Sir Edward Boyle: Hear, hear.
  Sir C. Osborne: My right hon. Friend would prefer to rob children in secondary schools of milk to provide "Arsenic and Old Lace" for those who can easily afford to pay for their own entertainment. I would rather choose good money for poor children in secondary schools. He can have his "Arsenic and Old Lace."
  If the Government wanted to save £5 million out of the enormous expenditure of £10,000 million, there are dozens of other places where cuts could be made rather than cutting the milk for kids in secondary schools. This is why I protest. If the Government were so terribly hard up and there was no other way in which they could save the £5 million or if the £5 million were vital to our survival as a nation, there might be something to be said for it. But money is being poured out recklessly elsewhere. When the Budget comes, hon. Members

  1097
  will find that the Government are going to spend £1,000 million more this year than they did last year. In order to help provide that extra £1,000 million, £5 million will be stolen from the kids who go to secondary school—out of their milk bottles. It is against this that I protest.
  This will be regarded in the country as the meanest thing that an incapable Government ever brought forward. I think that hon. Members opposite will agree that if they had put in their Election address in 1966 that this was what they were going to do more than half of them would not have been elected. It is because I feel that the whole concept is wrong and because I feel that it is so mean—so contemptibly mean, as hon. Members below the Gangway have said so often—that I shall willingly oppose it and go into the Lobby with those who will support the Amendment.
  Mr. Gordon Walker: We have had a number of very sincere and very important speeches in the debate. My hon. Friend the Member for The High Peak (Mr. Peter M. Jackson) said that the First Secretary in the Second Reading debate did not give very fulsome support to this part of the Bill. That is true. None of us gives fulsome support to it. It is a very awkward and unpleasant decision that we have not taken either easily or with pleasure.
  But I must say straight away that we cannot accept the Amendment because it would put off indefinitely what we regard as an important policy. My hon. Friend the Member for Holborn and St. Pancras, South (Mrs. Lena Jeger) was very frank and said that the Amendment was not intended to wreck the Bill yet—that is, that a little later it was intended to wreck it. It is, therefore, an indefinite postponement that is being asked for.
  The National Food Survey which is suggested in the Amendment is an annual report. It is very thorough and very slow to produce. The date of the current one is 1964. It is an extremely thorough, long report which deals not only with milk but with all sorts of food problems. The procedure suggested of affirmative Orders and so on would be extremely dilatory, and we cannot afford the delay.
  There has been some mockery of the amount of the saving—£5 million. It has been called miserable and so on. But it
  1098
  will help devaluation to work, and there has been singularly little reference to that in this debate. [HON. MEMBERS: "How?"] I am just going to explain. I really shall explain the points that I am going to make. Some parts of the total package that we produced help devaluation to work by an actual shift of resources. Some other parts of the package, of which this is one, help it to work by reducing the burden of public expenditure. Since the Vote on Account, everyone must realise how extremely important it is to reduce the burden of public expenditure and make it that much easier for my right hon. Friend the Chancellor of the Exchequer not to impose, as he said he will otherwise have to, too much new taxation.
  We cannot accept the argument of taking a particular saving of £5 million and saying "What does that matter?", because one could treat all the savings in this way. The whole of the package is made up of a series of £5 million.
  In reply to what was said about the effect on agriculture and farmers, let me say that farmers cannot, any more than anybody else, escape a degree of contribution to what is necessary to make devaluation work.
  Mr. Emrys Hughes: Is this to be taken into account in the assessment of the subsidy to agriculture?
  Mr. Gordon Walker: I have said what I have said, and I shall leave it there. I come now to the point on which very many of my hon. Friends laid great stress—
  Mr. James Davidson: Does the right hon. Gentleman believe that the £5 million will be a complete saving? Does he not appreciate that this food will have to be replaced by something else, a large part of which may be imported?
  Mr. Gordon Walker: That would affect any saving one made anywhere; it could have all sorts of secondary repercussions. This is a saving of £5 million which will be made.
  Now I should like to deal with the question of the nutritional value of milk in secondary schools. We sought advice about it, of course. This is not something which we just settled without thought. Advice was sought by the permanent head of my Department from my Chief

  1099
  Medical Officer, who consulted the Committee on Medical Aspects of Food Policy. Broadly speaking, the essence of the report was that present evidence does not allow us to say whether the abolition of free school milk would affect health. Present evidence does not allow a conclusion to be drawn.
  That advice referred to milk in all schools, but we did not rely on that alone since it referred to all schools. We came to the conclusion that the case for going on with milk in primary schools was none the less extremely strong. This was our view, for several reasons, one of them being the very high rate of take-up in primary schools—93 per cent., or as high as one can effectively go. This costs £13 million in a year, and all that expenditure has not been touched. That, naturally, is a point which has not been made, but it is of some importance.
  Mr. Peter M. Jackson: Before he leaves the question of the advice he received, will my right hon. Friend assure us that he will arrange for publication of this report?
  Mr. Gordon Walker: It is not a report; it is a letter sent from one of my officials to another. I cannot publish advice given to me by my officials.
  Mr. Lubbock: Why not?
  Mr. Gordon Walker: Because it would be wrong and improper and it would lead to all sorts of difficulties. Also, there is a lot of comment in the letter. If the Chief Medical Officer knows, when he gives advice, that it will be published, he will have to be extremely careful about what kind of advice he gives me.
  Mrs. Lena Jeger: Exactly.
  Mr. Gordon Walker: Any civil would be in that position.
  Mr. John Lee: Is my right hon. Friend saying that there are different standards of veracity, depending on whether a thing is to be pubilshed or not?
  Mr. Gordon Walker: Nothing of the sort. I am just stating the ordinary and accepted constitutional doctrine in this matter.
  Mr. Emrys Hughes: On a point of order, Mr. Yates. Is it not the custom
  1100
  of the House that a document of this kind should be laid before the Committee?
  Mr. Gordon Walker: Further to that point of order, Mr. Yates. I have not quoted from the document at all.
  The Temporary Chairman: The question would arise only if there was a quotation. There is also the consideration of the public interest.
  Mr. Gordon Walker: I understand that, if there is not a quotation from a document, there is no reason to lay it. I should like to go on to answer the points made by my hon. Friends, if they would allow me.
  We felt that there was a case for carrying on with milk in primary schools, at a cost of £13 million but the case for milk in secondary schools was far less strong. It is not the only factor, but there is some weight to be given to the falling take-up. The take-up has been falling extraordinarily fast. Between 1962 and 1967, it fell from 66·5 per cent. to 58·3 per cent., an average fall of 2½ per cent. a year which looks as though it is going to continue. The fall has been quite steady ever since 1962.
  11.45 p.m.
  In that period there has been a fall of 12 per cent.
  Mr. Kenneth Marks: Does that include those in the 15–16 age group? Is the 2½ per cent. accounted for by those who have stayed on at school, aged 16 and older?
  Mr. Gordon Walker: It includes the take-up of all secondary school children. Everybody.
  Mr. Marks: Up to 18?
  Mr. Gordon Walker: It would include those, if they are in secondary schools. Another factor to be borne in mind is that the educational, medical associations and organisations are far from clear about the value of milk in secondary schools. The National Association of Head Teachers, at its 1966 Conference proposed the withdrawal of milk from secondary schools, except for those who needed it on medical grounds. The B.M.A. has expressed conflicting views. On 15th July 1967, the Annual Representative Meeting was told that the

  1101
  Council of the B.M.A. was against with-drawing milk but the Annual Representative Meeting passed a Resolution, recommending that free milk for school-children should be discontinued at the age of 11, except in cases of medical necessity.
  It is administratively impossible to make an exception for any particular category on medical or other grounds. We have gone as far as we possibly can in this direction by maintaining free milk in special schools. Both the major teachers' organisations have been either very inconclusive in this matter, or have been against continuing milk in secondary schools. I have had no representations from any teachers' organisation, from any local authority associations, or from any established educational body on this matter.
  Mr. Peter M. Jackson: I apologise for interrupting again but I would like to to give my right hon. Friend some information to which it appears he is not privy. I have information from the Library that the General-Secretary of the National Union of Teachers has stated that this step is regarded as retrogressive. It is not in order for him to say that there is unanimity on the part of the teaching profession.
  Mr. Gordon Walker: I have said that I received no representations, and I have received no representations.
  Mr. Lubbock: There is no point in making representations to this Government.
  Mr. Gordon Walker: We receive a great many representations on a great many things, and if there was strong feeling on this in educational and medical organisations, as is held in some quarters, I would unquestionably have had representations. There has been relatively little concern about something that is very worrying, namely the short take-up of free school meals in our schools. This is something of extreme importance. The schools meals provide a very large proportion of the necessary calory and other intake of children. [Interruption.] Nonetheless, it is wholly relevant to the question of the nutritional considerations of schoolchildren. We have had a great success in this direction. Last November
  1102
  I sent out a leaflet for schools to distribute to parents, through pupils. It was designed to bring to the attention of parents the rights of their children to free school meals.
  Before this campaign started, the take-up of school meals had risen by 22 per cent. Since the leaflet was distributed, it has gone up by another 26 per cent. Altogether, since last November another 180,000 schoolchildren are receiving free school meals, who were not having them before. This is something of which we should be proud. On 4th April, further children will be getting free school meals, regardless of income. This is one of the things that we are doing in order to try to help larger families. Some hon. Members have pointed out this need.
  Having listened to the whole of the argument, and paid attention to the points raised, I hope that the Committee will now dispose of this Amendment, and I invite the Committee to reject it.
  Mr. Michael Foot: As the hon. Member who put down the Amendment, I am extremely dissatisfied with the reply given by the Secretary of State. I do not believe that he has provided an adequate answer to the overwhelming case which has been presented by hon. Members on this side of the Committee.
  My right hon. Friend says that there has been a campaign to increase the taking-up of school meals. If there has been a fall in the consumption of milk, we say that there should be a campaign to ensure that it is taken up, too. More-over, the nutritional evidence which has been presented to the House does not bear examination. At any rate, we have not the power to examine it.
  Normally in such a case, a Minister who referred to a document of the kind in question should have been prepared to present the document to the House. The reason for this rule is precisely that Members of the House of Commons shall be able to examine that kind of evidence. If we are now to be told that we must agree to the abolition of school milk on the basis of the Minister's interpretation of a private letter to him, which none of us is enabled to examine, that is not a proper way for the House of Commons to decide on a matter of such importance as this.

  1103
  I defy anybody who has listened to every word of the debate, as I have done, to say that an extremely powerful case has not been made for the Amendment. I therefore repeat what I said on another Amendment, although it is much stronger now. I urge all hon. Members on this side who agree with the Amendment to vote for it.
  My right hon. Friend the Secretary of State said at the outset of his speech that he could not accept the Amendment because it would mean, probably, the collapse of the whole proposal. The implication is that if there were a survey into the nutritional value of school milk, it
  would come to the conclusion which has been presented by every hon. Member on this side who has spoken in the debate, except the Secretary of State.
  Therefore, I urge every hon. Member on this side who believes that the argument is overwhelming on the side of maintaining the Socialist plan for providing school milk on a collective basis in secondary schools to vote for that view tonight.
  Question put, That the Amendment be made:—
  The Committee divided: Ayes 37, Noes 150.

  Division No. 67.]

  AYES

  [11.55 p.m.

  Allaun, Frank (Salford, E.)

  Hughes, Emrys (Ayrshire, S.)

  Park, Trevor

  Atkinson, Norman (Tottenham)

  Jackson, Peter M. (High Peak)

  Pavitt, Laurence

  Bidwell, Sydney

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

  Perry, George H. (Nottingham, S.)

  Booth, Albert

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

  Ryan, John

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

  Kerr, Russell (Feltham)

  Steel, David (Roxburgh)

  Davidson,Jame(Aberdeenshire,W.)

  Lee, John (Reading)

  Thorpe, Rt. Hn. Jeremy

  Davies, S. O. (Merthyr)

  Lubbock, Eric

  Wainwright, Richard (Colne Valley)

  Dickens, James

  Marks, Kenneth

  Winnick, David

  Dunn, James A.

  Mendetson, J. J.

  Winstanley, Dr. M. P.

  Fletcher, Ted (Darlington)

  Newens, Stan

  Galpern, Sir Myer

  Norwood, Christopher

  TELLERS FOR THE AYES:

  Heffer, Eric S.

  Orme, Stanley

  Mr. Michael Foot and

  Hooley, Frank

  Osborne, Sir Cyril (Louth)

  Mr. Ian Mikardo.

  Hooson, Emlyn

  Pardoe, John

  NOES

  Albu, Austen

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

  Lyon, Alexander W. (York)

  Alldritt, Walter

  Faulds, Andrew

  MacColl, James

  Allen, Scholefield

  Finch, Harold

  MacDermott, Niall

  Anderson, Donald

  Foley, Maurice

  Macdonald, A. H.

  Bacon, Rt. Hn. Alice

  Ford, Ben

  McGuire, Michael

  Bagier, Gordon A. T.

  Forrester, John

  Mackie, John

  Barnes, Michael

  Freeson, Reginald

  Mackintosh, John P.

  Benoe, Cyril

  Gordon Walker, Rt. Hn. P. C.

  Maclennan, Robert

  Bishop, E. S.

  Gourlay, Harry

  McMillan, Tom (Glasgow, C.)

  Blackburn, F.

  Gray, Dr. Hugh (Yarmouth)

  McNamara, J. Kevin

  Blenkinsop, Arthur

  Grey, Charles (Durham)

  MacPherson, Malcolm

  Boyden, James

  Hamilton, James (Bothwell)

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

  Braddock, Mrs. E. M.

  Hamling, William

  Marsh, Rt. Hn. Richard

  Bray, Dr. Jeremy

  Hannan, William

  Mason, Rt. Hn. Roy

  Brooks, Edwin

  Harper, Joseph

  Mellish, Robert

  Brown, Rt. Hn. George (Belper)

  Hart, Rt. Hn. Judith

  Miller, Dr. M. S.

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

  Heseldine, Norman

  Milne, Edward (Blyth)

  Buchan, Norman

  Hattersley, Roy

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

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

  Hazell, Bert

  Morgan, Elystan (Cardiganshire)

  Butler, Mrs. Joyce (Wood Green)

  Hilton, W. S.

  Morris, Charles R. (Openshaw)

  Cant, R. B.

  Houghton, Rt. Hn. Douglas

  Moyle, Roland

  Carmichael, Neil

  Howarth, Robert (Bolton, E.)

  Mulley, Rt. Hn. Frederick

  Carter-Jones, Lewis

  Howell, Denis (Small Heath)

  Neal, Harold

  Coe, Denis

  Hoy, James

  Oakes, Gordon

  Coleman, Donald

  Huckfield, Leslie

  O'Malley, Brian

  Cronin, John

  Hynd, John

  Oswald, Thomas

  Cullen, Mrs. Alice

  Irvine, Sir Arthur

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

  Dalyell, Tam

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

  Page, Derek (King's Lynn)

  Davidson, Arthur (Accrington)

  Janner, Sir Barnett

  Parker, John (Dagenham)

  Davies, Dr. Ernest (Stretford)

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

  Pentland, Norman

  Diamond, Rt. Hn. John

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

  Perry, Ernest G. (Battersea, S.)

  Dobson, Ray

  Jones, J. Idwal (Wrexham)

  Prentice, Rt. Hn. R. E.

  Doig, Peter

  Jones, T. Alec (Rhondda, West)

  Price, Christopher (Perry Barr)

  Dunwoody, Mrs. Gwyneth (Exeter)

  Judd, Frank

  Rees, Merlyn

  Eadie, Alex

  Kenyon, Clifford

  Reynolds, G. W.

  Edwards, William (Merioneth)

  Lee, Rt. Hn. Frederick (Newton)

  Richard, Ivor

  Ellis, John

  Lever, L. M. (Ardwick)

  Roberts, Albert (Normanton)

  English, Michael

  Lewis, Ron (Carlisle)

  Roberts, Goronwy (Caernarvon)

  Ennath, David

  Loughlin, Charles

  Roberts, Gwilym (Bedfordshire, S.)

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

  Stewart, Rt. Hn. Michael

  Wellbeloved, James

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

  Stonehouse, John

  Wens, William (Walsall, N.)

  Rodgers, William (Stockton)

  Summerskill, Hn. Dr. Shirley

  Whitlock, William

  Rose, Paul

  Taverne, Dick

  Wllkins, W. A.

  Ross, Rt. Hit. William

  Thomas, George (Cardiff, W.)

  Williams, Alan Lee (Hornchurch)

  Rowlands, E. (Cardiff, N.)

  Tinn, James

  Williams, Mrs. Shirley (Hitchin)

  Shore, Rt. Hn. Peter (Stepney)

  Urwin, T. W.

  Willis, Rt. Hn. George

  Silkin, Rt. Hn. John (Deptford)

  Varley, Eric G.

  Wilson, William (Coventry, S.)

  Slater, Joseph

  Wainwright, Edwin (Dearne Valley)

  Woodburn, Rt. Hn. A.

  Small, William

  Walker, Harold (Doncaster)

  Snow, Julian

  Wallace, George

  TELLERS FOR THE NOES:

  Spriggs, Leslie

  Watkins, David (Consett)

  Mr. Alan Fitch and

  Mr. Ernest Armstrong.

  The CHAIRMAN, being of opinion that the principle of the Clause and any matters relating, thereto had been adequately discussed in the course of the debate on the Amendments proposed thereto, forthwith, put the Question pursuant to Standing Order No. 47 (Debate on Clause or Schedule standing part), That the Clause, as amended, stand part of the Bill.
  Mr. Mikardo: Mr. Yates, I should like to make some observations—
  The Temporary Chairman: I have decided that the Clause has been sufficiently discussed and, under the Standing Order, I have put the Question.
  Mr. Mikardo: On a point of order. The only aspect of the Clause—
  The Temporary Chairman: Order. I am sorry, but there can be no point of order. Under the Standing Order, it is in order for the Chairman to put the Question.
  Mr. Mikardo: May I make a submission to you, Mr. Yates? With great respect, I wish to make a submission because I think that I have a point of substance, and I should be grateful if you would give consideration to it. The only matter discussed on the Clause so far has been on an Amendment dealing entirely with—
  The Temporary Chairman: Order. I am sorry, but the Chair has decided that the Clause has been sufficiently discussed. Pursuant to Standing Order No. 47, I have put the Question.
  Mr. Michael Alison: Further to that point of order. In making this Ruling, I really must ask you to confirm that you consider that the fullest opportunity has been given, particularly to right hon. and hon. Members on the Opposition Front Bench—
  The Temporary Chairman: Order. There can be no point of order on this. The decision has been made that the Clause has been sufficiently discussed, and I have put the Question pursuant to Standing Order No. 47.
  Mr. Alison: Further to that point of order—
  Hon. Members: Order.
  Mr. Alison Mr. Alison rose—
  Hon. Members: Name him.
  The Temporary Chairman: Order. I have given my Ruling, and I have put the Question.
  The Committee divided: Ayes 121, Noes 6.

  Division No. 68.]

  AYES

  [12.4 a.m.

  Alien, Seholefield

  Carmichael, Neil

  Faulds, Andrew

  Anderson, Donald

  Carter-Jones, Lewis

  Finch, Harold

  Armstrong, Ernest

  Coe, Denis

  Ford, Ben

  Bacon, Fit. Hn. Alice

  Coleman, Donald

  Freeson, Reginald

  Bagier, Gordon A. T.

  Cronin, John

  Gordon Walker, Rt. Hn. P. C.

  Barnes, Michael

  Cullen, Mra. Alice

  Gourlay, Harry

  Bence, Cyril

  Dalyell, Tarn

  Gray, Dr. Hugh (Yarmouth)

  Bishop, E. S.

  Davidson, Arthur (Accrington)

  Grey, Charles (Durham)

  Blackburn, F.

  Davies, Dr. Ernest (Stretford)

  Hamilton, James (Bothwell)

  Blenkinsop, Arthur

  Diamond, Rt. Hn. John

  Hamling, William

  Boyden, James

  Dobson, Ray

  Hannan, William

  Braddock, Mrs. E. M.

  Doig, Peter

  Harper, Joseph

  Bray, Dr. Jeremy

  Dunwoody, Mrs. Gwyneth (Exeter)

  Hart, Mrs. Judith

  Brooks, Edwin

  Eadie, Alex

  Haseldine, Norman

  Brown, Rt. Hn. George (Belper)

  Ellis, John

  Hattersley, Roy

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

  English, Michael

  Hilton, W. S.

  Buchan, Norman

  Ennals, David

  Houghton, Rt. Hn. Douglas

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

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

  Howell, Denis (Small Heath)

  Hoy, James

  Milne, Edward (Blyth)

  Silkin, Rt. Hn. John (Deptford)

  Huckfield, Leslie

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

  Slater, Joseph

  Hynd, John

  Morgan, Elystan (Cardiganshire)

  Snow, Julian

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

  Morris, Charles R. (Openshaw)

  Stewart, Rt. Hn. Michael

  Janner, Sir Barnett

  Moyle, Roland

  Stonehouse, John

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

  Mulley, Rt. Hn. Frederick

  Summerskill, Hn. Dr. Shirley

  Jones, T. Alec (Rhondda, West)

  Oakes, Gordon

  Taverne, Dick

  Judd, Frank

  O'Malley, Brian

  Tinn, James

  Kenyon, Clifford

  Oswald, Thomas

  Urwin, T. W.

  Lever, L. M. (Ardwick)

  Page, Derek (King's Lynn)

  Wainwright, Edwin (Dearne Valley)

  Loughlin, Charles

  Parker, John (Dagenham)

  Walker, Harold (Doncaster)

  Lyon, Alexander W. (York)

  Pentland, Norman

  Wallace, George

  MacColl, James

  Perry, Ernest G. (Battersea, S.)

  Watkins, David (Consett)

  Macdonald, A. H.

  Prentice, Rt. Hn. R. E.

  Wells, William (Walsall, N.)

  McGuire, Michael

  Rees, Merlyn

  Whitlock, William

  Mackie, John

  Reynolds, O. W.

  Wilkins, W. A.

  Mackintosh, John P.

  Richard, Ivor

  Williams, Alan Lee (Hornchurch)

  McMillan, Tom (Glasgow, C.)

  Roberts, Goronwy (Caernarvon)

  Williams, Mrs. Shirley (Hitchin)

  McNamara, J. Kevin

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

  Woodburn, Rt. Hn. A.

  MacPherson, Malcolm

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

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

  Rodgers, William (Stockton)

  TELLERS FOR THE AYES:

  Marsh, Rt. Hn. Richard

  Ross, Rt. Hn. William

  Mr. Eric G. Varley and

  Mellish, Robert

  Rowlands, E. (Cardiff, N.)

  Mr. Alan Fitch.

  Miller, Dr. M. S.

  Shore, Peter (Stepney)

  NOES

  Davidson, James(Aberdeenshire,W.)

  Thorpe, Rt. Hn. Jeremy

  TELLERS FOR THE NOES:

  Osborne, Sir Cyril (Louth)

  Wainwright, Richard (Colne Valley)

  Mr. Eric Lubbock and

  Pardoe, John

  Winstanley, Dr. M. P.

  Mr. David Steel.

  Lord Balniel: On a point of order Sir Eric, I accept that under the authority of the House, and Standng Order 47, you are entitled to close the debate. Under what right did you refuse to accept the point of order raised by my hon. Friend the Member for Barkston Ash (Mr. Alison)?
  The Chairman: The hon. Member knows that the Ruling of the Chair cannot be challenged.
  Lord Balniel: Further to that point of order. I am simply asking under what authority of the House it is open to the Chair to refuse to listen to a point of order.
  The Chairman: Under the Standing Order a duty is placed on the Chairman to decide whether the Question should be put, and if he so decides, he has to put it. No point of order arises.
  Mr. Pavitt: On a point of order. I apologise to you, Sir Eric, and to the Committee for raising this, but, in respect of future debates, would it be possible, if you decide that after the debate on an Amendment the Standing Order procedure will be followed, for the Committee to be informed prior to the discussion of the Amendment?
  The Chairman: One cannot decide until the end of the debate on the Amendment whether Standing Order No. 47 should be invoked.

Clause 4.

  (COMPENSATION TO CIVIL DEFENCE EMPLOYEES FOR LOSS OF EMPLOYMENT ETC.)
  Question proposed, That the Clause stand part of the Bill.
  Mr. Alison: There is one point which should like to raise with the Minister. It is a matter of some substance, though I agree that it is at the same time a rather special and particular point. Perhaps I could draw the Minister's attention to this by referring to an Amendment which, unfortunately, was tabled too late, and therefore had to be starred. It has not been called, but it makes the point specifically.
  I do not know whether the Under-Secretary of State at the Home Department noticed that my hon. Friends and I tried to table an Amendment to include regional hospital boards among the authorities which had the right to pay compensation to redundant civil servants, or civil defence workers, and at the same time receive grant aid.
  12.15 a.m.
  I hope that the Parliamentary Secretary will be able to confirm that the Government are aware of the fact that it is not only the local authorities and police authorities which are responsible for making payments and taking on civil defence workers; I can give him a specific

  1109
  instance which occurred in the South-West Regional Hospital Board where a man was taken on as a salaried civil defence worker in the hospital, concerned with taking care of various amenities and arrangements in the event of war or other catastrophe.
  In the same context I want to draw the Minister's attention to some real difficulties which arise in the question of the estimation of the severance pay, or ex-gratia payment, or whatever the Minister may call the payment to be made under the Clause in respect of the man who will become redundant.
  Let me give an illustration of my point. The case has been brought to my attention of a man who has suffered two crippling losses of income as a result of the general Government policy of retrenchment in defence and civil defence matters. This man was earning a salary of about £2,000 a year when employed at one of the Army Home Defence centres as a civil defence officer. His income, when that job rolled up in 1966, dropped from £2,000 to £1,100. When he switched to the South-West Regional Hospital. Board as a civil defence officer employed by the hospital board for civil defence purposes his scale of salary was within the bracket of £800-£1,000.
  When compensation payments are being estimated, does the estimate include the full bracket—does it go from the bottom figure right to the top figure—and will compensation be judged on the basis of potential in the office in which the man has been declared redundant? Let us imagine that a man was taken on by the hospital board within the salary scale £800-£1,200. His potential earning expectation, wherever in the bracket he happens to be when declared redundant, must be taken into account.
  If he is going to have to take on a job in another place in which the salary bracket is lower—perhaps from £600 to £1,100, instead of £800 to £1,200—the compensation paid to him should take some account of the fact that the loss of ability to earn the maximum in his salary scale, as a result of having to leave one job and go to another, is a real factor to take into account. Will the Parliamentary Secretary make certain that regional hospital boards will be included among those authorities by whom compensation can be paid and, at the same
  1110
  time, will he take into account the fact that a man, although he might not have been earning the maximum within his salary scale, has some reason to expect what he could ultimately earn in the post had he been able to stay in it?
  The compensation payable will presumably have some reference to the kind of subsequent employment which a redundant civil defence officer finds. If he moves straight into a job in which he gets more money than he did as a civil defence employee there does not seem to be much case for paying him compensation for loss of job. If this is the case is it the Government's intention to wait to see what subsequent job each redundant civil defence worker gets, so that they can assess what compensation is considered morally obligatory upon them?
  If this is so, employees declared redundant will obviously wait as long as possible before taking positions at high salaries or will take positions at low salaries and hope to persuade the Government that they have taken a hard knock. What will be the basis of assessment? The Clause is vague. Are local authorities to base their calculations on the loss between the job they have and the job they move into, or on a flat and arbitrary basis?
  Mr. Jeremy Thorpe: Before the Minister addresses the Committee, may I pay tribute to the Government for the fact that this Clause expresses most aptly, appropriately and lucidly the total doubt which obviously still existed about the cuts in civil defence and their effects when they were introduced. The Committee will recall the questioning of the Under-Secretary of State last week about the care and maintenance basis and further probing showed that he did not know what was involved. It is logical. We have waited some time and the Government are still finding out what the cuts imply and infer, and some of the Government's, supporters are making similar discoveries and not finding them palatable.
  We are told that reduction or discontinuance will save £20 million a year and it would be interesting to know how the sum is worked out. Only by seeing whether it is the correct sum can we know that the total compensation of £¼ million attracting 75 per cent. Exchequer grant is

  1111
  reasonable, having regard to the circumstances. Perhaps the Government will for the first time draw back the veil on their intentions for civil defence. In Clause 4 they say that compensation may be paid to such persons
  "as may be so prescribed and who suffer loss of employment or loss or diminution of emoluments".
  Have they any idea at the moment whether or not, or in what categories, whether part-time or full-time, and if part-time what is the ceiling and whether the compensation is to be based on service or on financial reward attracted or whether on the skill which has been given? It would be interesting to know that. My suspicion is that the Government do not know the answers. If they give them to the Committee tonight, it will be the first time the information has been given. In subsection (3), which is the best piece of Government drafting to do what the Government have not the remotest idea of what they are doing, they say
  "Different regulations may be made under this section in relation to different classes of persons, and regulations so made may include provision as to the manner in which and the person to whom any claim for compensation under this section is to be made".
  What different classes of persons have they in mind? Is that still in contemplation by the Government or are there firm proposals? Can we know what classes they are, how the £¼ million compensation is to be arrived at, how it is to be linked with the redundancy payments to which certain members of civil defence would be entitled, and how this is to be set off against the £ ¼million compensation?
  This is a golden opportunity for the Government, in asking the Committee to give them carte blanche, to make these regulations to say who are in the categories affected and who will not receive compensation.
  The Under-Secretary of State for the Home Department (Mr. David Ennals): I should not like to go into all the details which will undoubtedly be dealt with on Thursday in the debate on the cuts in civil defence expenditure. I do not for a moment accept what the right hon. Member for Devon, North (Mr. Thorpe) says about the answers at Question Time.
  1112
  If he wishes to protest further, he may do so during the debate.
  The Clause principally concerns about 2,500 local authority employees, about half of whom are in specialist civil defence posts and the remainder in clerical, administrative or manual posts. It is expected that local authorities will be able to transfer some to other work, but it is too early to tell how many. We would expect most to be transferred from civil defence work, or, if necessary, outside, by June, 1968, and almost all by the end of September, 1968. Compensation is unlikely to exceed £250,000, which is small compared with the expected saving of £7 million a year on local authority civil defence. The hon. Member dealt with a very small number who are not covered because the tasks on which hospital boards employ these people are not imposed by Regulations under the Civil Defence Act, 1948. So there would be no redundancies because of revocation or amendment of such Regulations.
  However, about 10 people in Scotland and eight in England and Wales are likely to be made redundant, but it is improbable that a compensation claim will arise in more than three cases. Provisions have been made for this and payments will be on the basis given in the Clause. This is the same as for local authority reorganisation, accepting the principles of the Crombie Code.
  Mr. Alison: Precisely how will these emoluments be determined for regional hospital employees by the local authority or police authority, since there must be some basis for computing how to disperse this £250,000? Will it be based on loss of expectation of earnings or on drop of earnings on transfer?
  Mr. Ennals: The compensation Regulations would be the same as in previous similar cases of local government re-organisation, which local authorities and their staffs have accepted as reasonable. Although some principles have been laid down, this is for negotiation between local authorities, and this will apply to the regional boards. It is not just a question of the redundant but of the loss of emoluments by the small number of doctors as much as by the civil defence workers covered by the Clause.
  Question put and agreed to.
  Clause ordered to stand part of the Bill.

Clause 5.

  (INCREASE IN FEES, ETC.)
  Question proposed, That the Clause stand part of the Bill.
  Mr. Alison: What further income for the Exchequer and local authorities is likely under the Clause? I do not believe that it is intended to diminish this money, although the Explanatory Memorandum suggests that it may give rise to powers to waive or abolish some trivial payments like those for posting notices. The principal source of local authority income hitherto has been the registration of births, deaths and marriages—about £800,000 a year. Do the Government intend to help local authorities here?
  12.30 a.m.
  A cursory glance at the figures in the Local Government Financial Statistics for England and Wales for 1964–65 suggest that they are substantial losers on their services in respect of the registration of births, deaths and marriages. On revenue account, total expenditure in 1964–65 was about £2½ million and the income—from fees, rents and other recoupments—amounted to about £800,000. It seems, therefore, that the local authorities have a large gap to close. Will they be empowered to increase the fees under the Clause?
  The fees for the registration of births, deaths and marriages have increased only twice since 1837, once in that year and again in 1952. In view of the debits being incurred through some Government expenditure—for example, on milk—public opinion would probably not feel outraged if a modest increase was made in the charges for some of these licences to help local authorities close this gap. In other words, is the Minister taking powers to increase rather than diminish these charges?
  Under this heading, for central Government income, substantial sums are obtained by way of road accident payments by those treated in hospital after accidents. I understand that in 1965–66 such payments totalled between £600 million and £700 million—[Interruption.] I may be wrong. Total receipts under this healing in respect of the Road Traffic Act, 1960, made to management committees, hospital boards and so on were at out £633,193. Whatever the
  1114
  figure, are these charges fully in keeping with the true costs incurred by the authorities which receive these payments? I imagine that those who make them are fully covered by insurance and would not suffer hardship if they were increased.
  It must be a matter of concern when a Clause offers scope for the Government to at least double their income in certain respects, particularly since the present income of about £800,000 under some outdated charges could be increased to about £1,600,000. I hope that the Chief Secretary will be more forthcoming now than he was on Second Reading, first in his remarks about what the Exchequer may receive and second about what the local authorities may receive.
  Mr. Diamond: I am grateful to the hon. Member for Barkston Ash (Mr. Alison) for the general welcome he has given to the Clause, which was implicit in everything he said. Where fees are being collected which cost more to collect than the net income they bring in, power is taken to abolish them. Apart from that the whole purpose of the Clause is to increase fees which have been left undisturbed for many years, in some cases for a century and in some altered only twice in a century.
  I should have thought that the whole Committee would share our view that this is a sensible way of proceeding. In the first case, negotiations are going on with local authorities, which have been consulted on this matter and in the second case, as the hon. Member rightly said, in many cases the liability will ultimately fall on the insurer rather than on the insured party. A later Amendment deals with that point. There will be an opportunity for increasing fees if the House thinks fit, by bringing forward an Order.
  The Clause is an enabling Clause, no more than that. As it gives the Government power to bring Orders before the House, it would be a gross insult to the House to estimate in advance what the views of the House might be on those Orders. It would not be right to attempt to say what decision this House might come to at a future stage about a number of items involved in the powers in this Clause. Therefore, I am sure the hon. Member will realise that it is not that I am unwilling to give an estimate, but that this is the sort of topic

  1115
  on which no estimate could properly be given.
  I am grateful for what the hon. Member said in recommending the Clause, and I hope that it may now be allowed to stand part of the Bill.
  Question put and agreed to.
  Clause ordered to stand part of the Bill.
  Clauses 6 and 7 ordered to stand part of the Bill.

New Clause 3.

  (EXPENDITURE ON GRACE AND FAVOUR RESIDENCES.)
  After the passing of this Act, public expenditure on grace and favour residences shall be reduced by 75 per cent.
  All tenants of such residences shall pay a full economic rent, subject to a rent rebate scheme to be approved by Parliament.—[Mr. William Hamilton.]
  Brought up, and read the First time.
  Mr. William Hamilton: I beg to move, That the Clause he read a Second time.
  This Bill is a Public Expenditure and Receipts Bill. Its purposes are to cut expenditure and to increase receipts. We have been told by international bankers, by the Tory Party, by the C.B.I. and others that we have got to cut, and cut drastically, public expenditure. The Prime Minister and other Ministers have said that there must be no sacred cows; that nothing is sacrosanct. We are also told that there will be complete fairness and equity, that as far as possible there will be equality of sacrifice.
  The vogue word is selectivity—that is, you select your victims according to your prejudices. So far as I see, there is nothing selective in the Bill we have been discussing all day. No equality of sacrifice can be detected in any part of the Bill. The principle seems to be, the less you have the more you pay. This new Council is a modest little thing. It is a very tiny bit of a candle end, not much more than the cost of depriving a few thousand kids of their school milk.
  It is extremely difficult to get information as to the precise origins and history of grace and favour residences as an institution. They have certainly existed for
  1116
  well over 200 years, having originated, I believe, as residences for members of the Court and the Royal retinue. I believe it is true that Dr. Samuel Johnson once wrote asking if he might be provided with one in 1776 and was refused.
  On the accession of William IV in 1830 the Civil List was reduced by Parliament, and, among other things, the repair and maintenance of Royal Palaces and Gardens was transferred to the annual Parliamentary Votes. About 1877 the whole question of grace and favour residences was submitted to the Treasury and was the subject of a number of Treasury letters, and it was then decided to continue the existing practice; that is, that the Minister—the Minister of Works, as it then was—should be responsible for the repair and maintenance of the structure and services and for modernisation on change of occupation of these grace and favour residences. The internal maintenance is the responsibility of the residents themselves. I understand that they also pay rates and fire insurance and the cost of heating, lighting and water; but they pay no rent.
  It is true that many of these residences are unsuitable and badly planned for modern requirements. But so are hundreds of thousands of the residences of all our constituents. Modernisation, we are told, is a difficult and expensive problem. So it is in Glasgow. So it is in all our urban areas.
  I was told in answer to a Parliamentary Question that in the 10 years from 1951 to 1961 the total expenditure by the Minister of Works on those houses averaged about £24,000 a year. In the period 1952–62 the average cost of maintenance and improvements prior to occupation of the grace and favour residences in the Minister's charge was equal to about 1s. 6d per square foot per annum.
  I give some examples of the expenditure incurred. At 10 Kensington Palace between 1954 and 1962 £13,628 was spent, including £4,428 in 1960 for redecoration and other services pending occupation by Princess Margaret. In 1964–65 £43,000 was spent on apartment 9 at Kensington Palace for the same reason. There was a lot of bomb damage there, I understand. In 1964–65 at Hampton Court Palace £1,000 was spent on

  1117
  apartment 2 on preparation for reoccupation and at apartment 10 £1,500 for the same reason. At apartment 35—one house—£8,000 was spent in modernisation for reoccupation. In 1965–66 at Hampton Court Palace the cost of reoccupation services at apartment 4 was £3,000 and at apartment 32A the cost was again £3,000. At St. James's Palace in the same year the reoccupation services at apartment 31B cost £8,000. Finally, apartment 1A at Kensington Palace has cost the taxpayer to date £73,000, to house one family.
  12.45 a.m.
  Mr. Lubbock: The list which the hon. Gentleman has given is most impressive. I remind him that the modernisation of No. 10 Downing Street cost £3 million.
  Mr. Hamilton: I was Chairman of the Estimates Sub-Committee which had something to say about that. If the hon. Gentleman reads the Report, he will find what I thought about it.
  The Minister of Public Building and Works, who is the right hon. Member for Bermondsey (Mr. Mellish), has 140 of these houses in his charge: 57 at Hampton Court, 43 at Windsor Castle, 16 at Kensington Palace, eight at Marlborough House Mews, nine at St. James's Palace, three at Buckingham Palace, one at Kew Palace and one at Hyde Park. These residences are entirely at the disposal of Her Majesty the Queen. They are granted to members of the Royal Family, to persons who have rendered special service to the Crown, and, at Hampton Court, to widows of men who have rendered special service to their country. I could give some examples. One was given to Sir Alan Lascelles, the Queen's former private secretary. At that time, he was a director of the Midland Bank. I do not think that he is now, but I took the trouble to look at the figures and I found that, in 1967, the Midland Bank had 25 directors, with total emoluments of £160,000. This was a fellow who was living rent free, at the taxpayers' expense.
  There was a piece in the Daily Express at the time:
  "At Hampton Court Palace, the Queen is running a rather superior widows' home, choosing the tenants herself from widows of men who distinguished themselves in some form of service for the country."
  1118
  It then cites certain examples. There is a Post Office engineer who managed to get one of these houses by falling in love with and marrying Princess Margaret's maid.
  I was so intrigued and excited by this marvellous instrument for awarding rent-free houses to those who had rendered valuable service to the nation that I wrote to Her Majesty on 14th July, 1964. I raised the matter with my constituency party and, with the permission of the people concerned, I gave to Her Majesty the Queen the names and addresses of two retired miners and their wives in my constituency. I pointed out that they had been 50 years in the pits. They had been in much greater danger than a lot of the military men who had got these houses. Both couples were living on their pension. Each of them seemed to me to have a cast-iron case for retirement with rent-free leisure. I was full of expectation when I received a letter from the Palace, dated 17th July—no delay in replying:
  "Dear Mr. Hamilton,
  "I am commanded by The Queen to thank you for your letter of 14th July on the subject of the allocation of Grace and Favour Houses.
  Yours sincerely,
  M. E. Adeane."
  The Chairman: Order. It is not in order to bring a communication from or on behalf of the Monarch into the debate.
  Mr. Hamilton: Thank you, Sir Eric. I make the point to emphasise that if this is to be the case, if these tenancies are to be given by Her Majesty on the ground of national service, then national service does not solely cover military service, and so long as the taxpayer is footing the Bill we have a right to make representations that they should be given to a much wider selection. Also the public ought to seek—and in the context of the Bill the Government ought to seek—to reimburse themselves of the expenditure that has been involved in maintaining and repairing these houses.
  There is not much involved—an average of £24,000 a year. My new Clause says that we claw back three-quarters of that. We say to the owner that he pays the bill. There is a precedent for this. In 1931, when the economy measures were being taken, the Civil List was reduced at the Monarch's instigation.

  1119
  It is not an unreasonable request at this time that some contribution be made from the highest to the lowest.
  It seems to be perfectly sound and reasonable. The principles on which the new Clause is based have been accepted by all, namely that all tenants of houses on which public money is spent should pay a rent. It is not a question of rent or no rent, but rent in some degree compatable with that person's income. This is the selectivity about which we are talking, the selectivity principle which I have incorporated in this new Clause. Moreover, it accepts the principle enunciated first by the Prime Minister that no cow shall be sacred in the saving of public expenditure. Those who are backing Britain should support this new Clause.
  Mr. Emrys Hughes: I wish to support the new Clause moved by my hon. Friend the Member for Fife, West (Mr. William Hamilton) because the Prime Minister said that no Department of State should be exempt from scrutiny. As far as I can see, this Department of State does not seem to have been investigated at all. I believe that we are entitled, when the nation is in extreme financial difficulties, to go right to the top of the list of expenditures to see if some economy cannot be effected. For example, some economy could be made out of the £416,000 spent on the Royal Yacht "Britannia"—
  The Chairman: Order. That does not arise on this new Clause.
  Mr. Hughes: I know, nor does the question of the expenditure, which I am told is likely to rise to £500,000, on the investiture of the Prince of Wales. I suggest that if we are discussing economy cuts at all we should be prepared to carry this through to a rigorous and careful examination of all the departments of public expenditure of the State.
  I know that my hon. Friend the Member for Fife, West, comes in for a good deal of criticism because he takes an unpopular line in this matter. When we hear him arguing for economic rents he is only pursuing to its logical conclusion the arguments that go on in every local authority in the country. I know that he is not popular when he persists as Chairman of the Estimates Committee in what
  1120
  I think is a very useful service to the Committee and the House, but I do not see why he should be attacked as though he had indulged in brawling in church. I am glad that he has raised this matter and I hope that even if the new Clause cannot be accepted the Treasury will be encouraged to pursue the exploration of these avenues of finance so that economies can be effected.
  I remember that when the Civil List was under consideration in the House I moved several amendments, and if they had been carried there would have been a considerable reduction in public expenditure, and there would be less money for the Chancellor of the Exchequer to have to find. I do not see why the Labour Government should say, "Oh, do not touch that, because the Establishment will not like it". I do not see any reason at all why we should not apply the same scrutiny as my hon. Friend conducts with the Estimates Committee not only to grace and favour houses but to other avenues of expenditure.
  I noticed that he left out Scotland. I should like to know what information he has about grace and favour houses or anything similar to them in the Palace of Holyrood. I understand that various people are accommodated there. I wish that my hon. Friend would carry his investigations north of the Border.
  I am quite prepared to support this new Clause, hoping that the Chancellor of the Exchequer will not hesitate to prune unnecessary expenditure, whether it be in Holyrood or in Buckingham Palace, whether it be in the Royal Yacht "Britannia", or anywhere else. I hope it will be carried out in the spirit of economy, realising that this country is on the verge of bankruptcy, realising that we need all the money we can get, realising that we must save the £. realising that we have got to set an example to other nations of the world. Therefore, I think that the hon. Member for Fife, West has done a service to the Committee and I hope the Committee will carry the new Clause.
  Mr. Diamond: I am grateful to both my hon. Friends the Member for Fife, West (Mr. William Hamilton) and the Member for South Ayrshire (Mr. Emrys Hughes) for their approach to matters of economy. Every Treasury Minister must

  1121
  welcome all the support he gets in that approach, and I am sure I shall find that same approach very valuable in many respects.
  The new Clause deals with a limited amount of expenditure, as my hon. Friend the Member for Fife, West has pointed out, is, he says, on average £24,000. That may be quite right as an average figure. Last year the figure was apparently £26,000. So I am confirming, broadly, what the hon. Gentleman has said—
  Mr. Mikardo: Could my right hon. Friend tell us—
  Mr. Diamond: Just a moment—and this is the cost of maintaining the structure of these grace and favour residences and for their external repair.
  Mr. Mikardo: I am obliged to my right hon. Friend for giving way. Could he convert that £26,000 into the equivalent of one-third pint bottles of milk?
  1.0 a.m.
  Mr. Diamond: Well, I am not very good at mental arithmetic on my feet, but the hon. Gentleman's point is taken.
  What I am going to do is to explain, if the Committee will be good enough to bear with me, the circumstances affecting these properties. The first thing which, I am sure, the Committee fully realises is that grace and favour residences belong to the Crown and are at the disposal of the Sovereign. The arrangement which has been entered into between my right hon. Friend the Minister of Public Building and Works and the Palace provides only for the maintenance of the structure and for the external repairs. The tenants certainly do not pay rent, but they are responsible for the internal decorations, heating, lighting, insurance, and so on.
  I have given confirmation of what my hon. Friend has said about the expenditure. There are, all told, some 135 such residences at present occupied. My hon. Friend the Member for Poplar (Mr. Mikardo) can easily work out how much it costs per residence in terms of public expenditure.
  Mr. Mikardo: Too much.
  Mr. Diamond: My hon. Friend says, "Too much." It is a matter which I
  1122
  am explaining and I do not think that the Committee would feel that this was a case where it wanted to press the new Clause.
  I understand what my hon. Friend the Member for Fife, West called "selecting your victims according to your prejudices" as being his definition of what are good priorities. It may apply to all of us for aught I know. I hope that it does not. I hope that we all regard matters objectively, and the other causes which have been put forward are indeed objective. With this same approach, I should feel that the Committee would not wish to proceed with the new Clause.
  Mr. Alison: Since the right hon. Gentleman has touched on the relatively insignificant figure, to which the hon. Member for Fife, West (Mr. William Hamilton) referred, of £24,000, can he elucidate a figure which has not been brought out but which is of comparative interest: that is, precisely what the Exchequer is saving in respect of the grants which it will not now pay to local education authorities for school milk?
  Mr. Diamond: I see nothing about school milk in the new Clause.
  Question put and negatived.
  The Chairman: May I be informed whether a Division is required on Amendment No. 17?
  Mr. Mikardo Mr. Mikardo indicated dissent.
  Schedule 1 agreed to.
  The Chairman: Mr. Heffer. Mr. Booth. I am calling Amendment No. 65. I am not sure whether it is being moved.
  Mr. Orme: No, Sir Eric. We are not moving those Amendments.
  Schedules 2 and 3 agreed to.
  Bill reported, with Amendments; as amended, considered.
  Mr. Deputy Speaker (Sir Eric Fletcher): Third reading?
  Mr. Ernest Armstrong: This day.
  Motion made and Question, That the Proceedings of this day's sitting be suspended—[Mr. John Silkin]—put forthwith, pursuant to Order [12th December] (Sittings of the House), and agreed to.

HOUSING (CONTROLLED TENANCIES)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Armstrong.]
1.5 a.m.
Sir John Eden: I want to take this opportunity of discussing the effect of controlled rents on the relationship between landlord and tenant. I will try to be brief, because I know that my hon. Friend the Member for Aldershot (Sir E. Errington) hopes to have a chance to intervene in the debate.
Happily, there is no conflict between the majority of landlords and their tenants, but, as in any other fields of human relationship, there are exceptions. Most often, because, regrettably, it is the most usual, we hear about the bad landlord. But no one would argue that for this reason all landlords must be rogues. Nor, as I shall show, would one be justified in assuming that all tenants are angels. There are bad tenants, too.
I have come across enough examples to be convinced that there are tenants, no doubt kindly and considerate people normally, who become unscrupulous in exploiting the favourable position in which they are situated, at grave cost both to the pockets and to the health of their landlords.
Just as it is possible for a bad landlord to harass his tenant, so, with the existence of controlled tenancies and virtual security of tenure, it is possible for the bad tenant to make life hell for his landlord. The landlords whom I have in mind are not the big investment companies and business enterprises. I am thinking of the small landlords who own no more than one or two properties.
The Fair Rent Association, with which the Joint Parliamentary Secretary will be familiar and to whose industry in studying this problem I would pay tribute, tells me that about 10 per cent. of our total housing stock is subject to controlled tenancies. More than half of those are owned by small landlords, and a high proportion of them are widows and retired persons. Probably they bought one or two houses during their working lives to provide them with
1124
homes or a small addition to their income when they came to retire.
They now find that they cannot get possession if they want to and that the rents which they receive are wholly inadequate to cover outgoings and meet the costs of essential repairs. Of the many examples that I could give, I take just one from my own constituency. In East Howe, in Bournemouth, there is a property owned by a man who lives in the lower part. The rent for the upper part is controlled at 25s. a week. The landlord has to pay rates out of that which amount to 13s. a week. Being a single person, he is taxed on the remainder at 8s. 3d. in the £. Obviously, that does not leave much over, but he is responsible for all repairs inside and out. Recently, he has had to draw on his savings. He is now 57 years old, and he will be retiring shortly. When he does, his income will be reduced considerably, and he will be much less able to meet the outgoings on his property.
Many other cases will be known to the hon. Gentleman and to other hon. Members. I could give many examples of persons who are retired, some of them on supplementary benefits and allowances, who are much worse off than their tenants. They find that the rents of their properties are pegged at such a low figure that it is impossible for them to meet essential costs.
In a debate in another place on 7th December last, Lord Kennet referred to
"…the well-known fact that if you hold rents down it is difficult to get repairs done."—[OFFICIAL REPORT, House of Lords, 7th December 1967; Vol. 287, c. 846.]
The national position is much worse even than the example I gave from my own constituency.
The average rent received by landlords of controlled tenancies is much lower than the one I quoted. It is more like 17s. per week, and this is supposed to provide for costs of repairs, management, insurance, and so on. It is well recognised that council house rents have had to go up to take account of rising costs. Council house rents are, on average, three times as high as the rents of private controlled tenancies. Is it any wonder that so often, in the case of these older private houses essential repairs do not get done, the property deteriorates, and slum conditions develop?

1125
To a conscientious landlord who wants to look after his own property, this is one of the most distressing features of the present control system. Something must he done urgently to remedy the situation. The Minister has the necessary power ready to hand in Section 11 of the Rent Act, 1965. He has the power to convert controlled tenancies to fair rents. I hope that this will be pressed on with much greater determination than has so far been displayed. I know that it is only a short time since this Act came into force and the procedure came into operation, and I know that the Government have claimed that more time is required; but, although it may not be possible to put this into operation everywhere, I am sure that the Minister would agree that rent officers are ready to tackle it in some areas. I hope, therefore, that I can have an assurance from him that in those areas where it is immediately possible Stage 2 will be introduced without delay.
I stress this, because, if the rents were put right, not only would there be the prospect of improvement to our stock of older dwellings, but the main cause of friction between landlord and tenant would be removed. Apart from that, it would be elementary justice. It is quite wrong, in my opinion, that one section—often the poorer—should subsidise another, often not only better off but better able to look after themselves. There are many tenants who are younger than their landlord or landlady. They all too often, from the examples which I have been gven, seem to indulge in a form of intimidation which amounts to cruelty. At the very least they can create a situation of nervous tension in their relationship with their landlord. At the worst, they can be responsible for driving their landlord to despair.
I have here a letter from London which gives an illustration of some of the forms of intimidation which take place. I will quote parts of it:
"There are outside doors left ajar causing draughts from which we suffer. The dustbin lids are not replaced securely. The lavatories are blocked. The deliveries from postman are sent away on the ground that they have arrived at the wrong address. The wireless is kept on so loud that it can be heard from further away. The conversation is carried on in a loud and offensive manner."
It is all rather small and petty stuff, but there is more that I could quote along the same lines.
1126
I have a case here from London where the landlady is aged 72. She has only her pension to live on with the addition of a small rent of 19s. 10d. The tenant is an alderman who is rather overbearing in his attitude. He caused the lady considerable distress, and this led to her having a nervous breakdown. There is another case from Derby, where the landlady and her two spinster sisters—they are aged 66, 68 and 70—have had a wretched experience with their tenant He holds a B.A. degree and is an inspector of electrical engineering, yet he subjects these ladies to continuous abuse and rudeness which causes them a great deal of distress and anguish.
I could give many examples from my own constituency. There is one from Capstone Road, where the tenant constantly thumps above the head of the landlord, and indulges in malicious talk. There is one in The Grove, Moordown, where constant complaints are made against the landlord and his wife. There is another in Shelbourne Road, where the landlord has been reduced to a nervous wreck.
It appears that the tenants are always ready to call for help from the public health department and to lodge complaints against landlords. All these forms of intimidation are comparatively minor in themselves, but over a period of time, when taken together, they amount to persistent nagging, and in some cases to persecution. Where the landlords are elderly, they do for the most part find it impossible to endure, and I ask myself why they should be put in this position.
Many of the younger ones find themselves under increasing pressure, and the strain often proves too much for them. I do not exaggerate, as I am sure the hon. Gentleman will recognise, when I say that the tyranny of the tenant is all too much of a reality for many a landlady who is the innocent victim of a situation not of her own making. Some of these people came into property ownership because they could not find any other way of getting accommodation for themselves and their families. This applies particularly to young married couples, and I have met many examples of people being forced to buy rent-controlled property comparatively cheaply, in order to get a roof over their head. They take over a

1127
sitting tenant, with a controlled rental, to give themselves a chance to live in one of the two flats into which the house has been divided.
For the most part landlords are reluctant to resort to any form of legal action. This is because they know that it will run them into considerable expense. Solicitors are not very ready to come forward to help them because they know how difficult it is to prove the case, and in any case such action would probably result in a worsening of the relationship with the tenant. They also have great difficulty in trying to sell their property, because the existence of such an artificially low rent makes it a bad investment and, therefore, buyers are not readily available.
Tenants, however, are not always so backward in complaining, although some local authorities, such as mine, do not like to intervene in what they regard primarily as a dispute between two private people. But even when tenants have claimed protection again harassment, as I have found from the catalogue of examples given to me by my authority, their complaints have often been unjustified.
I hope that the Minister will take steps to try to even things up a bit as between landlord and tenant. I have a number of questions that I would like to put to him. Could the sort of harassment described in Section 30 of the 1965 Act be taken to apply to the landlord as well as to the tenant? Since the main difficulty seems to arise where the landlord and tenant are living under the same roof, could an owner-occupier come within the definition of a "residential occupier" as referred to in that Section?
At the very least, would the Minister take an early opportunity to make it clear to local authorities that they should be as ready to inquire into complaints made by a landlord as they are in respect to complaints by a tenant? Lord Kennet, in the debate on 7th December last, said that the Government had undertaken a general and comprehensive review of the problems and legislation affecting older houses and were bearing in mind the difficulties of landlords as well as those of tenants.
Tonight I have had time only to touch on the fringe of some of these difficult-
1128
ties, but they are very real. This is a sensitive enough area of human relationships even without the existence of controlled tenancies. I am sure that the Minister is aware of the problem, and I hope that he will take this opportunity to make it clear that he condemns harassment and persecution by either side.
1.21 a.m.
Sir Eric Errington: I want to call attention very shortly to the position which arises when there is not necessarily any dispute between a tenant and a landlord. I have the case of a house which is in my constituency which has a rent which is £17 a quarter. My constituent, who lives with her sister, writes to remind me that in 1962 I went down to look at the house. She now says that she and her sister can go on on longer as a landlord and that the insistent and continual demands for repairs are totally beyond their capacity to meet. She says that it is a large house, with seven large rooms. It is equipped with every convenience and is exceedingly well-appointed with two large bathrooms, upstairs and downstairs. She says that it can, and should be, converted into two good flats. This lady is 83 years of age and her sister, who suffered in the war, has a full disability pension.
My constituent states that she has been called upon to put in a new heater for the bathroom, although a new one was supplied four years ago. She has had to putty the windows and put in a new cistern, and these repairs will be much more than a year's rent.
Would the hon. Gentleman say why it is not possible to turn a controlled tenancy of this kind into a regulated tenancy? This is not like the case of a London house, because in London there is still a housing shortage. In many parts of the country, including this place in my constituency, there is no great shortage of housing. Here is a house which could be turned into two good flats. Here we have a reasonable position between the tenant and the landlord, but nothing can be done because of the continued control.
What are these two old ladies to do? They are caught up in a position where they can do nothing. If the Lord President of the Council—when he was Minister of Housing—meant what he

1129
said when he stated that he wanted to establish a fair rent as between landlord and tenant, surely this is the time, and this is the sort of case in which the Minister could proceed at once to establish that fair rent by existing control and substituting a regulated rent.
1.25 a.m.
The Joint Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. James MacColl): I would certainly agree with the hon. Gentleman the Member for Bournemouth, West (Sir J. Eden) that the problem we are discussing is comparatively small. Most tenants and landlords get on well and have a good deal of common understanding. There are cases of tension and difficulty, often no doubt with faults on both sides, and often human problems of adjustment which are not easy to translate into terms of legal right.
The hon. Member quoted a figure of 10 per cent. of housing stock as still being an old control. That is probably as good an estimate as is possible, but all these estimates are a little uncertain and my right hon. Friend is hoping to have a survey later in the year which will give a much clearer idea of the size of the problem of old control.
I am afraid I cannot be encouraging about the introduction of Section 11 of the Rent Act, 1965. It is quite right that it can be introduced for dwellings in any area, or dwellings in any band of rateable value in any area. It could not be introduced for a particular house or class of house except in terms of rateable value, but my right hon. Friend feels we should have more experience with the rent regulation system to see whether it can be extended to any area, to any category of controlled dwellings, or to controlled dwellings generally. This can be done by affirmative Order.
There are safeguards for landlords. The dice are not as much loaded against the landlord as the hon. Member implied, because it is possible to go to the courts to get possession in certain circumstances where there is a genuine ground for complaint about the behaviour of the tenant. The expeditory procedure which can be applied to possession cases of this kind produces fairly quick results. In excep-
1130
tionally urgent cases, it is possible to get an expedited hearing taking on average a little over two weeks.
The hon. Member raises an interesting point about the interpretation of Section 30(5) of the Rent Act, 1965. It is not for me to interpret the law but for the courts, and any doubt about what the Section means should be decided by the courts. But, for what it is worth, I will give him some idea of my view. It is probably true that an owner-occupier living in a house of which he has sublet a part is probably a residential occupier within the meaning of the Section, but I think difficulties might arise: the first is the threat, which is
"to interfere with the peace or comfort of the residential occupier or members of his household, or persistently withholds services reasonably required for the occupation…"
These must be done to make the occupier give up his occupation or refrain from exercising a right or pursuing a remedy in respect of the premises or part of them. In some cases, it would be difficult to show that a subtenant was harrassing a residential occupier, but if there were any harassment, that would be over the property occupied by the subtenant. There might be difficulties, but they would be a matter for the courts.
My right hon. Friend cannot tell local authorities what to do here. They must decide for themselves, though no doubt they will judge from this debate whether they are carrying out their duties properly. Most of the cases of friction which reach the Ministry concern furnished premises, for which the rent tribunal has more discretion over security of tenure than the court has in the case of unfurnished property.
There are other obvious difficulties about the size of controlled rents, but I would not have thought this particular problem was any worse in the case of controlled rents than in the case of registered ones. In the case of people "flitting" without paying rent, it would be better. By definition, the old controlled tenant has lived in a place for at least ten years, he is settled and is not in the habit of moving on without paying his rent.
I recognise that some of these human problems are difficult and that there

1131
might be faults on both sides which a little mutual understanding could overcome. As my noble Friend said in another place, we are considering the problem of the repair of old property. We will bear in mind what has been said tonight in our present review.
The debate having been concluded, the Motion for the Adjournment of the House lapsed without Question put.
Mr. DEPUTY SPEAKER suspended the sitting of the House at twenty-seven minutes to Two o'clock till this day at Ten o'clock pursuant to Order.

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