Sitting of 1 July 1968

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

OFFICIAL REPORT (CORRECTION)
Mr. John Rankin: On a point of order, Mr. Speaker. May I draw attention to an error in the OFFICIAL REPORT of Friday's proceedings where, in column 1045, I am shown as the hon. Member for Glasgow, Provan? I am still the hon. Member for Govan.
Mr. Speaker: The mistake will be corrected.

HOUSE OF COMMONS (SOUND AMPLIFICATION)
Mr. Speaker: May I announce to the House that I understand that the amplifiers and loud speakers are not working at the moment? The engineers are trying to find out the cause of the trouble. I hope that all hon. Members will speak up.
ORAL ANSWERS TO QUESTIONS
  EMPLOYMENT AND PRODUCTIVITY

    Unemployment
    Mr. Gwilym Robertsasked the Secretary of State for Employment and Productivity what are the figures for the numbers of wholly unemployed adults and unfilled vacancies in Great Britain for May 1968; and what are her estimates of the figures for August 1968, November 1968, January 1969 and May 1969.
    The First Secretary of State and Secretary of State for Employment and Productivity (Mrs. Castle): At May 1968, there were 514,081 adults registered as wholly unemployed, and 193,891 notified
    1064
    vacancies for adults remaining unfilled, in Great Britain. I am not prepared to give forecasts of the future level of unemployment or of unfilled vacancies.
    Mr. Roberts: Would not my right hon. Friend accept, however, that forecasts of this type are absolutely necessary and should be expected? Would she not accept, further, that any forecast is better than no forecast, and does she not agree that the underlying trend in the figures is satisfactory and shows that, basically, devaluation is working?
    Mrs. Castle: My predecessor, the right hon. Member for Southwark (Mr. Gunter), always refused to give forecasts, and I think that he was right. As regards the trend, I would say to my hon. Friend that if exports pick up sufficiently—and the latest C.B.I. industrial survey provides grounds for optimism—the trend of unemployment should fall.
    Mr. R. Carr: Is it not a fact that the Prime Minister gave the House and the country an earlier general forecast when he said that the problem in the autumn was more likely to be a shortage than a surplus of labour? Does that forecast still stand?
    Mrs. Castle: The right hon. Gentleman has said that it was a forecast in general terms, and the Chancellor has himself given a general forecast. My hon. Friend, on the other hand, asked for detailed figures.
    Mr. Martenasked the Secretary of State for Employment and Productivity in how many months in 1967 and 1968 the total of wholly unemployed, seasonally adjusted and excluding school leavers, has been above 500,000.
    Mrs. Castle: Fourteen.
    Mr. Marten: Is the Minister aware that, in the last 14 months, the number of wholly unemployed, as defined in the Question, has been above the half million mark on 14 occasions, compared with only seven in the whole 13 years of Tory rule? Are we to assume that the Government are honouring their election pledge about full employment and that a figure above half million unemployed is now their definition of "full employment"?
    Mrs. Castle: The period of seven months under Tory rule when the figures

    1065
    rose above half million was followed by the balance of payments crisis of October, 1963—
    Mr. Marten: What have the present Government got?
    Mrs. Castle: —because there was a failure by that Government to tackle the underlying cause, which is what this Government are doing and will continue to do.
    Mr. Scott: Nevertheless, will the right hon. Lady confirm—
    Sir Knox Cunningham: Speak up.
    Mr. Scott: Nevertheless, will the Minister answer the question and confirm that the figure of half a million is regarded as normal?
    Mrs. Castle: Certainly not, because, as has been said in answer to a previous Question, both the Chancellor and the Prime Minister have pointed out that the rise in exports which there is every reason to believe will follow devaluation will enable these figures to come back.

    Naphthylamine (Bladder Cancer)
    Dr. Summerskillasked the Secretary of State for Employment and Productivity what steps he is taking to encourage more people who have worked, or are working, in contact with the chemical naphthylamine to be screened for bladder cancer.
    The Under-Secretary of State for Employment and Productivity (Mr. E. Fernyhough): The Carcinogenic Substances Regulations, 1967, require that people in factories whose work exposes them to alpha- or beta-naphthylamine must be screened for bladder cancer so long as they work in the factory, and be advised by the issue of a cautionary card when they leave the factory to continue to be screened.
    The manufacture and use of beta-naphthylamine is in fact prohibited by the Regulations although there is provision for exemptions for medical and scientific research and testing; no exemptions have been granted. The Department is trying, with the help of the industries, concerned., to trace workers formerly at high risk from these bladder carcinogens,
    1066
    and not covered by the Regulations, to encourage them to be screened.
    Dr. Summerskill: Would my hon. Friend bear in mind that there are several thousand people who worked in industrial rubber processes twenty years ago? How many of those have responded to the Minister's appeal?
    Mr. Fernyhough: So far, we have contacted about 43,000, but, unfortunately, only 2,500 have made themselves available for screening.

    First Secretary (Staff)
    Mr. Martenasked the Secretary of State for Employment and Productivity how many staff in her Department are engaged on duties connected with her work as First Secretary.
    Mrs. Castle: None can be separately identified.
    Mr. Marten: What has the Minister done in her office as First Secretary? What is the job of First Secretary? Is it merely a status symbol?
    Mrs. Castle: As the hon. Member knows full well, these are matters for the Prime Minister, and I have nothing to add to what the Prime Minister told the hon. Member for Harrow, West (Mr. John Page) on 21st May.

    Royal Commission on Trade Unions (Report)
    Mr. Kenneth Lewisasked the Secretary of State for Employment and Productivity what action she proposes to take following the publication of the Report of the Royal Commission on trade unions.
    Mrs. Castle: I would refer the hon. Member to my statement to the House on Thursday, 13th June, 1968.—[Vol. 766, c. 449.]
    Mr. Lewis: Will the right hon. Lady promise that she will deal expeditiously with the many important matters arising out of this Report and that we shall not have to wait as long for action as we have waited for the Report? Will she also promise the House that, when she is reviewing the action which she will take, she will also consider the Minority Report?
    Mrs. Castle: In the first part of his supplementary question the hon. Member is

    1067
    merely repeating a Question which I answered when I was making my statement to the House, when I made it clear that the Government regarded it as important to press ahead with discussions on this Report. It is clearly necessary for us to have consultation with the C.B.I. and the T.U.C., and both of them have rightly asked for full consultation.
    Mr. R. Carr: Will the right hon. Lady bear in mind that it is felt strongly on all sides of the House that we should have the opportunity to debate the Report before the Government make up their mind?
    Mrs. Castle: I am aware of that point, which was raised from both sides of the House when I made my statement. The right hon. Gentleman will understand that all that I can say is that it is a matter for the Leader of the House and that it should be pursued through the usual channels.

    Employment
    Sir B. Rhys Williamsasked the Secretary of State for Employment and Productivity what steps she is taking to encourage a higher proportion of the total population over school-leaving age to enter employment.
    Mr. Fernyhough: The employment, training and rehabilitation services which my Department provides or assists are available to those seeking employment and are developed to meet changing needs.
    Sir B. Rhys Williams: Is not the problem, which is a matter of concern for us all, not merely that old people in this country are tending to live longer and to be active longer but that they are still expected to retire at the same age? Could not the Government take some action to encourage the provision of employment for older people, including taking steps to get rid of the earnings rule?
    Mr. Fernyhough: The Government's local employment offices are always requesting employers to judge men on their merits rather than on their age.
    Mr. Gwilym Roberts: Does my hon. Friend not agree that the greatest single contribution which the Government could make to getting more people over
    1068
    school age at work would be to make it illegal for people to live on inherited and invested wealth?
    Mr. Fernyhough: My hon. Friend had better put that question to the Chancellor of the Exchequer.
    Mr. R. Carr: Does the hon. Gentleman recall that some ten years ago we had a special Committee looking at the problems of the employment of the old? Quite rightly, it was dissolved after it had done a certain amount of work. Will the Government consider whether it is appropriate, ten years later, to have another review?
    Mr. Fernyhough: I will ask my right hon. Friend to consider that point.

    School Leaving Date
    Mr. Silvesterasked the Secretary of State for Employment and Productivity what study she has made of the effect that any proposal to introduce a single school-leaving date would have on the employment prospects of school-leavers; and if she will make a statement.
    Mr. Fernyhough: My right hon. Friend has consulted the C.B.I., the T.U.C. and the nationalised industries. We are now giving careful consideration to their views.
    Mr. Silvester: Does the Minister recognise that one of the most important features of this review is the view of employers of what will be added to the value of school leavers through having an extra term, not merely the view of those in education on what they can do with the extra term?
    Mr. Fernyhough: I appreciate that, but the hon. Member will appreciate that while the T.U.C. have expressed their views on the matter, both the C.B.I. and the nationalised industries at the moment are divided in their opinion about it.

    Nationalised Industries (Prices)
    Mr. Edward M. Taylorasked the Secretary of State for Employment and Productivity by what percentage the prices of nationalised industries have increased since October, 1964; and what is the comparable percentage rise in the prices of household goods.
    The Under-Secretary of State for Employment and Productivity (Mr. Roy Hattersley): The percentage rise between 13th October 1964 and 21st May, 1968, in the average level of retail prices of goods and services provided by the nationalised industries and included in the Index of Retail Prices was 18·9 per cent. The comparable rise for the durable household goods group of the Index was 10·1 per cent.
    Mr. Taylor: Do not those staggering figures show that the nationalised industries, as at present organised, are driving a horse and cart through the prices policy? In those circumstances, will not the Minister make it a point to ensure that he appoints the best possible management to nationalised industries by paying people the right salaries, in line with those paid by many successful private firms such as Hambro's Bank?
    Mr. Hattersley: The payment of the top management of nationalised industries is a matter which must be raised with the appropriate Ministers. The hon. Member claims that a horse and cart are being driven through the incomes policy, but I am sure that he will recall that the Prime Minister has given an assurance that all major increases in public sector prices will be referred to the National Board for Prices and Incomes.

    Messrs. Seaborn Industries, Glasgow
    Mr. Edward M. Taylorasked the Secretary of State for Employment and Productivity if she is aware that redevelopment will require Messrs. Seaborn Industries, which provides employment for epileptics in a sheltered workshop in Glasgow, to vacate their present premises by August 1969; and if she will take steps to give assistance to the firm to establish its new premises in Glasgow before that date.
    Mr. Fernyhough: I am aware of the problem facing this firm and discussions are being arranged in respect of financial assistance for alternative facilities.
    Mr. Taylor: Is the Minister aware that a great deal of gratitude will be shown among those people working in this factory if he can ensure that alternative premises are provided before they are forced out of their old premises?
    Mr. Fernyhough: I thank the hon. Member for that compliment. He can rest assured that, within the financial circumstances in which we operate, we shall do all that we can.

    Agricultural, Horticultural and Forestry Industry Board
    Mr. John Wellsasked the Secretary of State for Employment and Productivity by what authority the Agricultural, Horticultural and Forestry Industry Board proposes to enforce payment of levies on employers who refuse to pay.
    Mr. Hattersley: I would refer the hon. Member to the reply which I gave to my hon. Friend the Member for Norfolk, North (Mr. Hazell) on Friday, 14th June.
    Mr. Wells: Is the Minister aware that the Question, which received a Written Answer on a Friday, was put down late at night on a Wednesday by a Government supporter, that it had all the characteristics of a planted Question, and that it made it impossible for hon. Members on this side of the House to put supplementary questions? The point which the hon. Member for Norfolk, North (Mr. Hazell) and I sought to raise was this: does the Minister realise that this Board is extremely unpopular with the entire farming community and that the reply which he gave to the hon. Member for Norfolk, North made it appear even more dictatorial than it looked already?
    Mr. Hattersley: I have no comment to make on the circumstances of the Question nor on the interpretation of the hon. Member for Maidstone (Mr. John Wells) of the motives of my hon. Friend the Member for Norfolk, North. But I am grateful to the hon. Member for Maidstone for giving me another opportunity to confirm that the Levy Order is in force and that farmers who do not respond to it can be dealt with in the way set out in the Order.
    Mr John Wellsasked the Secretary of State for Employment and Productivity whether, in view of the number of refusals to pay the levy, she will now dissolve the Agricultural, Horticultural and Forestry Industry Training Board.
    Mr. Hattersley: No, Sir.
    Mr. Wells: I repeat my question: is the Minister aware that nearly the entire farming community are dissatisfied with this Board? They are not opposed to training, but they are dissatisfied with this Board. Will the Minister think again about it?
    Mr. Hattersley: I am aware that the hon. Member is dissatisfied with the Board but I am not at all sure that he speaks for the industry. The National Farmers' Union, with whom I have had the closest consultation during the last few months, are working out a system by which they believe the Board and the industry can live in peace. I hope that it works satisfactorily. I know that a number of comments have been made about the Board, but they are certainly not justified.
    Mr. David Mitchell: Is the Minister aware that the mushroom growers are being made to pay the levy while an appeal is still being considered whether the levy should apply to them?
    Mr. Hattersley: I am aware of the special problems of the mushroom growers, but I am sure that the levy is being applied in a reasonable way. Part of my discussions with the Board and the N.F.U. are concerned with the problems of special groups, one of whom are comprised of the mushroom growers.

    Building and Construction Trades
    Mr. Hooleyasked the Secretary of State for Employment and Productivity what is the estimated total of workers in the building and construction trades unemployed at the latest available date.
    Mr. Fernyhough: At 10th June, 1968, there were in Great Britain 94,900 persons registered as unemployed who last worked in the construction industry, Minimum List Heading 500 of the Standard Industrial Classification.
    Mr. Hooley: Is my hon. Friend satisfied, in the light of these figures, that it is reasonable to provide so many places in Government training centres for these trades? Is there not an abundance of labour in these trades?
    Mr. Fernyhough: I cannot accept that. After all, almost half of the 94,000 are unskilled workers. They do not necessarily have a long attachment to the
    1072
    industry. They join it at one time and leave it at another. Generally speaking, it is very necessary to continue our training schemes, remembering that we cannot have too many skilled men.
    Mr. Heffer: Would my hon. Friend agree that 94,000 operatives, of whom almost half are skilled, being unemployed in the construction industry is much too high a figure? Can he say which trades are involved? Will he bear in mind that we still have a housing shortage in Britain and that these workers should be building houses and should certainly not be unemployed?
    Mr. Fernyhough: I agree that the figure is too high. We are anxious to see both skilled and unskilled men in employment. It would take a considerable time to give my hon. Friend a breakdown of the figure of skilled men unemployed and, if he will permit me, I will give him the information later.
    Mr. Speaker: Before calling the hon. Member for Acton (Mr. Kenneth Baker) to ask Question No. 28, I remind hon. Members that the amplification system is not working and that they should speak up.

    Civil Servants
    Mr. Kenneth Bakerasked the Secretary of State for Employment and Productivity how many industrial civil servants she estimates will be employed by her Department on 31st December, 1968.
    Mr. Baker: On a point of order. I wish to inform the right hon. Lady that the reference in the Question to industrial civil servants should be non-industrial civil servants. I hope that she will be able to answer my Question, as amended, but if she cannot, then I shall be happy to receive her Answer to the Question as printed.
    Mrs. Castle: I am afraid that the hon. Gentleman will have to be satisfied with my Answer to his Question as printed. It is too late to amend the Answer at such short notice.
    The Answer is about 1,100, of whom approximately 200 will be part-time.
    Mr. Baker: Would the right hon. Lady refresh her memory by referring to the Answer given by the then Minister

    1073
    of Labour on 19th February of this year when he forecast substantial cuts in the number of civil servants employed in the Department, although it is probably fair to say that he did not anticipate himself being concerned in that run-down of staff?
    Mrs. Castle: I must certainly plead guilty, in answering the main point of the hon. Gentleman's supplementary question, in that there has been an increase in these figures. On 1st January, 1964, the Department employed 559 industrial staff of whom 81 were part-time workers. I accept that they are much smaller figures. The increase since then almost entirely reflects the continued and considerable expansion in training and retraining in Government training centres and in an increased number of industrial rehabilitation units. This shows that there are often good reasons for an increase in civil servants.

    Engineering Industry Training Board (Grants)
    Mr. Kenneth Bakerasked the Secretary of State for Employment and Productivity why the Engineering Industry Training Board does not pay a training grant for students doing one year's thick sandwich industrial training courses.
    Mr. Hattersley: The Board has recently decided to pay supplementary as well as general grant for the two: one: one type of sandwich course.
    Mr. Baker: Does the supplementary grant also apply to the thick industrial training course, such as the one:three: one year course and so on?
    Mr. Hattersley: I understand that the one: three: one course is not generally regarded as a thick course, but, rather, the two: one: one. All sandwich courses are covered by the general grant, with varying degrees of application.

    British Steel Corporation (Union Recognition)
    Mr. Winnickasked the Secretary of State for Employment and Productivity what is the latest position in the current dispute between the Clerical and Administrative Workers Union and the British Steel Corporation.
    Mr. Ted Fletcherasked the Secretary of State for Employment and Productivity what further action she proposes to take to resolve the continuing dispute between the British Steel Corporation and the Clerical and Administrative Workers Union on the question of union recognition.
    Mr. Victor Yatesasked the Secretary of State for Employment and Productivity if she is aware that the dispute between the Clerical and Administrative Workers Union and the British Steel Corporation has been extended, and that a large number of clerks in Scotland are on strike, many of whom have been locked out by Stewart and Lloyds, Glasgow, and that a number have been suspended by the same firm in Birmingham; and if she will now intervene, with a view to bringing about an early settlement of the dispute.
    Mrs. Castle: About 1,200 members of the Clerical and Administrative Workers Union and 89 members of the Association of Scientific, Technical and Management Staffs have been on strike at plants of the British Steel Corporation since 21st June. I am keeping a close watch on the situations.
    Mr. Winnick: May I declare my interest in that I am a member of the C. & A.W.U.? Is my right hon. Friend aware that the members of this union in the industry concerned will in no circumstances give up their basic fundamental right to recognition by the employers? Is it not possible for my right hon. Friend to arrange a top-level meeting—a meeting at the highest possible level—to seek an end to the dispute once and for all on the basis of recognition; otherwise I warn her that strikes will continue in this industry?
    Mrs. Castle: I think that my hon. Friend knows that I have seen both the two unions referred to in the Question as well as the British Steel Corporation and representatives of the T.U.C. I have tried to examine the issues implicit in this and to see whether there is any basis for conciliation. I can only say to my hon. Friend that I do not think that a top-level meeting at this stage would help matters forward. In any event, there is some doubt about whether some of the parties would be willing to attend.
    Mr. Winnick: We would be.
    Mr. Kenneth Lewis: Would the right hon. Lady assure the House that she is not intending, in connection with this strike, to wait until the last minute, when the matter is settled, and then have a tea party?
    Mr. Winnick: Cheap.
    Mr. Lewis: Is she aware that some of us believe that while the Government may not be willing to enter into these matters, it is vital that they maintain the conciliation machinery of the Ministry? Will the right hon. Lady assure the House that this conciliation machinery is permanently active and is not something that comes into existence when it is too late?
    Mr. Winnick: The hon. Gentleman is mischief-making.
    Mrs. Castle: That supplementary question proves what a blessing it is for British industry not to have the Conservative Party in office.
    Miss Herbison: Will my right hon. Friend reconsider the position and re-examine the question of whether this is not the time for top-level talks? Is she aware that most of those who belong to the C. & A.W.U. joined that union because of a circular sent out by the British Steel Corporation in which the Corporation advised them to get into their appropriate unions? Is she aware that these union members are, therefore, feeling very bitter because they consider that their democratic rights are being taken away from them?
    Mrs. Castle: I am sure that my right hon. Friend appreciates that the Government cannot issue directions to the British Steel Corporation in this matter. The question of recognition is, in this connection, not a matter for the Government but for the Corporation, which went out of its way to consult the T.U.C. and tried to go through the appropriate procedure. These inter-union matters are extremely difficult to handle and they must be handled within the trade union movement in consultation with the Corporation.
    Mr. R. Carr: Does the right hon. Lady think that these sort of recognition problems are likely to increase rather than decrease in the next few years? Might it not be wise to conduct an inquiry into this and other systems—for example, the
    1076
    American bargaining agency system—so that workers are given an opportunity to show by vote which union or unions they would like to represent them?
    Mrs. Castle: I note the right hon. Gentleman's suggestion. This question of inter-union recognition was dealt with in the Donovan Report and will be one of the items which I shall be discussing in my early consultations with both sides of industry.
    Mr. Tinn: Is my right hon. Friend aware that, as a steel trades unionist, I welcome her cautious approach to what is essentially an inter-union dispute and which, I believe, can be more favourably resolved by the T.U.C?

    Productivity Agreements
    Mr. Moonmanasked the Secretary of State for Employment and Productivity how many productivity agreements have been examined by her Department up to the latest available date in 1968; and what proportion she has approved.
    Mrs. Castle: By 21st June, 1968, my Department had dealt with 1,192 productivity cases in the application of the Government's policy for productivity, prices and incomes, of which 1,098 had been approved.
    Mr. Moonman: While being grateful to my right hon. Friend for that Answer, may I ask her to make an early statement about the proportion of agreements that include provisions for non-process workers like supervisory, specialist and sales staff? Is she satisfied that she has sufficient staff in her Department to do this job?
    Mrs. Castle: If my hon. Friend will table a Question on the first part of his supplementary question, I will do my best to answer it. To answer the second part, I am confident that the setting up of the new productivity department will put us in a very strong position to deal with what I hope will be the increasing number of productivity deals which will come before us.
    Mr. Heffer: On a point of order, Mr. Speaker. It is bad enough for us not to have any amplification in the Chamber, but might I point out that the temperature in the Chamber seems to be much

    1077
    higher? It seems that the air conditioning system is not functioning. Could that be looked into as well?
    Mr. Speaker: The matter will be attended to.
    Mr. Moonmanasked the Secretary of State for Employment and Productivity, in view of the dangers of false productivity agreements, if she will issue further guidance to employers' and trade unions' organisations to bring again to their attention the criteria previously set out in the Prices and Incomes White Papers.
    Mrs. Castle: Guidelines drawn up by the National Board for Prices and Incomes are set out in Appendix II to the recent White Paper "Policy for Productivity, Prices and Incomes in 1968 and 1969", Cmnd. 3590, and are brought to the notice of industry by my officers both in examining claims and also in the course of providing general advice on industrial relations matters. A leaflet based on the National Board's report on productivity agreements has been prepared by the Board and widely distributed.
    Mr. Moonman: Does not my right hon. Friend agree that, while many of our fellow trade unionists take great care in the preparation of productivity agreements, there are some who do not, and would she not also agree that "phoney" productivity agreements are better than none at all?
    Mrs. Castle: I agree that they are very little better, and that is why my productivity department will have a very important rôle to play in ensuring that we get discussions between unions and managements on productivity agreements on an expert basis.

    Bradwell, Hathersage and Bakewell
    Mr. Scott-Hopkinsasked the Secretary of State for Employment and Productivity what is the percentage of unemployment in Bradwell, Hathersage and Bakewell in Derbyshire; and how this compares with similar figures for 1967 and 1964.
    Mr. Fernyhough: At June, 1968, June, 1967, and June, 1964, the percentage rates of unemployment for Bakewell were 1·7, 1·4 and 1·1, respectively.
    1078
    Bradwell and Hathersage form very small parts of the area covered by the Sheffield employment exchange. At the same dates, the percentage rates, which can only be calculated for the whole of the travel-to-work area comprising Sheffield, Attercliffe and Woodhouse, were 1·7, 1·7 and 0·7.
    Mr. Scott-Hopkins: Would not the Under-Secretary of State agree that his reply shows that the figure has gone up since 1964, and will he do his best to encourage industry to the area?
    Mr. Fernyhough: Whilst I acknowledge that there has been a relative increase in unemployment in the area the hon. Gentleman mentions, it would be very remiss of me at this moment, with the undoubtedly high unemployment there is in the development areas, to say that we will look too kindly upon applications for I.D.C.s in areas where unemployment is still only 1·7 per cent., while we still have some areas where it is much higher.

    Industrial Efficiency (Wages)
    Mr. Kenneth Lewisasked the Secretary of State for Employment and Productivity whether she will conduct an inquiry as to the effect of higher wages on efficiency in British industry.
    Mrs. Castle: No, Sir. The operation of the Government's policy for productivity, prices and incomes ensures that a close and continuing watch on the link between wages and efficiency is maintained.
    Mr. Lewis: Is the right hon. Lady aware that a minute ago she said that a bad productivity deal had some merit? Does she accept that a bad productivity deal has no merit but that a good one, which gives high wages in return for extra work, is something the Department should go for to the fullest possible extent?
    Mrs. Castle: I accept what the hon. Gentleman says about the importance of a good productivity deal. A "phoney" productivity deal can be very dangerous. It is valuable, none the less, that we all start thinking in productivity terms, and then it is for all those concerned in industry, with the help of my Department, to ensure that we are talking in realistic terms.

    Computer Programmers and Systems Analysts (Salaries)
    Mr. Dudley Smithasked the Secretary of State for Employment and Productivity (1) what information she has regarding the movement of salaries of computer programmers during the past 12 months;
    (2) what information she has regarding the movement of salaries of systems analysts during the past 12 months.
    The Under-Secretary of State for Employment and Productivity (Mr. Harold Walker): I regret that comprehensive information about salary movements in these occupations is not available in the form requested.
    Mr. Dudley Smith: Does not the hon. Gentleman think that it is vital that this information should be available when we are dealing with the whole question of wages and salary negotiations? Will he please look at this again, because how can he expect the prices and incomes policy to succeed without the fullest possible information over the widest possible area?
    Mr. Walker: We are seeking to extend the area of information available. To this end, we are instituting a new sample survey in September of this year which will yield additional information.

    B.O.A.C. Pilots (Dispute)
    Mr. Rankinasked the Secretary of State for Employment and Productivity if she will make a further statement on the matter in dispute between the British Overseas Air Corporation and their pilots.
    Mrs. Castle: Since I last reported to the House on 17th June, my Department has had informal discussions with B.O.A.C. and B.A.L.P.A. and on 28th June I appointed Professor John Wood of Sheffield University, with the agreement of the two sides, to act as an independent chairman to assist them in seeking a basis for a resumption of work and in the subsequent negotiations on outstanding matters.
    Following a meeting of the two sides under Professor Wood's chairmanship on 29th June, the B.A.L.P.A. representatives
    1080
    reported yesterday to their Committee and B.A.L.P.A. is seeking clarification of certain outstanding points at a further joint meeting under my Department's chairmanship today.
    Mr. Rankin: I congratulate my right hon. Friend on that appointment. She may recollect that that was one of the first things I suggested to her. May we hope that the professor succeeds in bringing this disastrous dispute to a successful and speedy conclusion?
    Mrs. Castle: I am grateful to my hon. Friend for those remarks. I am sure that he will be the first to understand that, as the talks are now at a very delicate and hopeful stage, it would be unwise for us to pursue any details at this stage.
    Mr. Lubbock: Will Captain Merrifield and Sir Giles Guthrie meet across the table personally? Does the right hon. Lady agree that it would have been much better if they had been started off on those lines instead of hurling insults at each other?
    Mrs. Castle: I think that the hon. Gentleman is a little out of date in his supplementary question. The negotiations are now at a very hopeful stage. I should not like to say anything in the House which might jeopardise them.
    Mr. Fortescue: Once the aeroplanes are flying again, will the right hon. Lady consider consulting the President of the Board of Trade to see what can be done to improve industrial relations in B.O.A.C.?
    Mrs. Castle: The hon. Gentleman will understand that that is not a question for me.
    Mr. Ronald Bell: Will the right hon. Lady try to get the air services resumed while the negotiations are going on, because it seems a pity that that should not be the case?
    Mrs. Castle: I do not want to be drawn into any more details.

    Directors (Remuneration)
    Mr. Frank Allaunasked the Secretary of State for Employment and Productivity if she will ask the National Board for Prices and Incomes to investigate all cases where directors' remuneration has

    1081
    been raised to above £20,000, plus dividends, or by more than the norm of wages increase.
    Mrs. Castle: I would ask my hon. Friend to await the Question I hope to answer at the end of Question Time about the treatment of the highest levels of remuneration under the Government's policy for productivity, prices and incomes.
    Mr. Allaun: In view of that reply, I have no supplementary questions.
    Mr. Selwyn Lloyd: When the right hon. Lady is making that statement, will she have regard to the difference between net and gross incomes and draw attention to the fact that the Chancellor of the Exchequer is the principal profiteer from this sort of increase?
    Mrs. Castle: The right hon. and learned gentleman had better await the statement.
    Mr. Bishop: As my hon. Friend the Member for Salford, East (Mr. Frank Allaun) seems to be showing an unusual sympathy for the higher income groups by this Question, will my right hon. Friend look at the remuneration of directors at much lower levels as well as at the higher increases of directors?
    Mrs. Castle: I suggest that my hon. Friend awaits my statement.
    Mr. R. Carr: On a point of order, Mr. Speaker. Did the right hon. Lady indicate that she does not intend to answer Question No. 67 following this Question?
    Mr. Speaker: The right hon. Lady said that she would be making a statement in answer to Question No. 67 at the end of Questions.
    Mrs. Castle: May I intervene here, Sir? I am somewhat confused by the fact that we have made such rapid progress. I see that the hon. Gentleman who tabled Question No. 67 is here in his place, so, instead of making a statement at the end of Questions, perhaps I could answer all these points on Question No. 67 at the end of Questions.
    Mr. Speaker: Perhaps that would be better.
    Mr. Arthur Davidsonasked the Secretary of State for Employment and Productivity what steps she will take to
    1082
    ensure that the highest levels of remuneration are kept in line with incomes policy.
    Mrs. Castle: Paragraph 50 of Command 3590 makes it clear that the principles of incomes policy should apply to individual salaries and other forms of remuneration, including that of Company Directors and Executives, that are fixed outside the usual process of collective bargaining. The Government have, however, decided that there is a need for further guidance on the application of this general principle. They are therefore asking the N.B.P.I. to examine the application of this general principle to remuneration at the highest levels, both in the private sector and in nationalised industries.
    In view of this general reference to the N.B.P.I., I have decided that it would be inappropriate to answer any questions on salaries and other forms of remuneration paid to individuals.
    Mr. Speaker: The answer to this Question was postponed pending the arrival of the Minister. We now come back to Question No. 67.
    Mr. Davidson: Is my right hon. Friend aware that her Answer will do something, but not very much to convince people that for a prices and incomes policy to be effective it must apply to all sections of the community? Will she, however, say something to reassure Mr. Jocelyn Hambro that he is not sufficiently important to be singled out for special treatment and help him to get rid of his inferiority complex and feeling of persecution?
    Mrs. Castle: I cannot accept my hon. Friend's suggestion that this reference will not mean very much, because, of course, we have given the Board very wide terms of reference and there is ample scope for examining the whole field. I am sure that the evidence will be of very great value to the Government.
    Mr. Iain Macleod: Is not the truth of the matter that the First Secretary has got herself into a ridiculous position and is now trying to get out of it? Does she not think that at a time like this she and her Department have better things to do than to organise witch hunts?
    Mrs. Castle: I am sorry. I cannot accept either of the right hon. Gentleman's assumptions. This is an aspect of prices and incomes policy which the Government have had under consideration for some time. I should have thought it was obvious to the House that we cannot have either a continuing situation in which the needs of the nationalised industries are not given very careful consideration and at the same time the need for convincing the people of this country that the policy can and must apply to all sections of the community.
    Mr. Frank Allaun: As wage increases are only a few shillings a week in most cases, why should there be increases of thousands of pounds a year? While my right hon. Friend's Answer gives some satisfaction, is she aware that she has said that only the principle will be investigated whereas, in the case of wage earners, their increase has been investigated and not the principle?
    Mrs. Castle: The Government have always recognised the difficulty of controlling individual salaries, not only in industry or in the City. There is a problem here once we go away from groups covered by collective bargaining to individual salaries, but the Government's recognition of the need for restraint in the field of individual salaries, which the C.B.I. has accepted, has always been part of the prices and incomes policy. One of the things which may emerge from the Board's Report is how far the policy has been effective in this area. The Government will obviously have to consider the position in the light of the Board's report.
    Mr. Selwyn Lloyd: When I asked a question earlier, the right hon. Lady asked me to await the statement. Will she draw the attention of the Board to the very penetrating supplementary question I asked?
    Mrs. Castle: I regret to inform the right hon. and learned Gentleman that I have forgotten what the question was. The terms of reference of the inquiry are very wide indeed and I am sure that the Board will have under consideration all relevant factors.
    Mr. Shinwell: In view of the allegation against my right hon. Friend that
    1084
    she is trying to get herself out of a ridiculous situation, will she say which is the worse—to suffer an accusation of that kind or to deal with the merchant bankers, people in the City of London and industrial tycoons who are exploiting shareholders and their own concerns by taking far more out of the profits than they are entitled to?
    Mrs. Castle: Far from feeling myself to be in a ridiculous position, I believe that I have announced an important step forward.
    Mr. Lubbock: Why does not the right hon. Lady admit that her hon. Friend the Under-Secretary of State dropped a goo-lie in his reference to Mr. Hambro and get on with a consideration of the genuine issues here? For example, will the Prices and Incomes Board be able to consider the relationship between the salaries paid to the heads of nationalised industries and those in private industry, with a view to ensuring that we have the best men in the public service?
    Mrs. Castle: I thought that I had made that absolutely clear in my original Answer when I said that we should examine the application of the general principles of remuneration at the highest levels both in the private sector and in nationalised industry. I repeat that this is a problem which the Government have had under consideration for some time, as anyone who is concerned about the future strength of the nationalised sector, as I am.
    Mr. Sheldon: Will my right hon. Friend bear in mind that there is little logical relationship between the various wage differentials, and far less between the remuneration paid to company directors—for example, the £91,000 a year paid to one gentleman and the remuneration paid to other directors—and will she accept my congratulations for instituting an inquiry?
    Mrs. Castle: I am grateful to my hon. Friend. There is no doubt that the Board will produce a valuable report.
    Mr. Fletcher-Cooke: What is the position of Mr. Hambro now? Was he not informed that his individual case would be investigated by the right hon. Lady's Department? Is that still so, or has that individual investigation been dropped,

    1085
    and it is. now a general investigation by the Board?
    Mrs. Castle: The House was informed that we intended to get in touch with Mr. Hambro, and we did. A letter from him in reply to our earlier approaches is on its way. In view of the earlier answer, I do not propose to comment on Mr. Hambro's case.
    Mr. Heffer: Why has not this action been taken before, since many of us on this side have for the past two years consistently pointed out that only organised workers are brought under scrutiny by the Prices and Incomes Acts? Second, can my right hon. Friend explain why some hon. Members opposite think that it is a witch-hunt when higher salaries are to be investigated but not a witchhunt when working-class earnings are investigated?
    Mrs. Castle: I entirely agree with the point implicit in the last part of my hon. Friend's supplementary question. It is an indication of the whole attitude of hon. Members opposite in this matter. They always believe in these investigations so long as they are unilateral.
    In reply to the first part of my hon. Friend's question, there are two reasons. Only since the coming into operation of the Companies Act have we had a source of real information. That is one important factor. Second, as I have said to the House already, the policy has been evolving all the time, and, if we are tightening up in other directions, we should certainly tighten up in this.
    Mr. Biggs-Davison: Was not Mr. Jocelyn Hambro grossly in error in saying that the right hon. Member for Huyton (Mr. Harold Wilson) is the worst Prime Minister since Lord North? Is not he the worst Prime Minister ever?
    Mr. Frank Allaun: On a point of Order, Mr. Speaker. As I have on the Order Paper a Question about Mr. Hambro, are not these questions out or order?
    Mr. Speaker: I thought that the hon. Gentleman's Question was answered.
    Mr. Allaun: I have not made my point clear, Mr. Speaker. I have a Question about Mr. Hambro on the Order Paper, not for today but for some days hence.
    1086
    In the circumstances, do not these questions and answers anticipate that Question in dealing with the matter today?
    Mr. Speaker: It is not out or order to ask such supplementary questions as arise from the answer today. The rules governing supplementary questions are not as rigid as those for other matters.

  HOUSE OF COMMONS

    Standing Committees
    Mr. Worsleyasked the Lord Privy Seal whether he will move that it be a standing order that seven clear days' notice be given of the first meeting of a Standing Committee on any Bill.
    The Lord Privy Seal and Leader of the House of Commons (Mr. Fred Peart): I should not wish to propose such a change without prior consideration by the Select Committee on Procedure.
    Mr. Worsley: In that case, will the right hon. Gentleman consult the Select Committee? Is he aware that it is very important that hon. Members with outside interests should have at least seven days' notice of the first meeting of a Standing Committee in order that they may discuss Bills properly?
    Mr. Peart: I will note what the hon. Gentleman has said. The position is not unusual, but I take note of his remarks.
    Mr. Worsleyasked the Lord Privy Seal whether he will move to amend the practice of the House so that in no circumstances may two Bills be taken in a Standing Committee on the same morning.
    Mr. Peart: No, Sir.
    Mr. Worsley: I hope that the right hon. Gentleman will consider this point. It is not a party matter. It is for the convenience, not only of hon. Members but of the many people who wish to make representations, that they should know when the Committee is to meet.
    Mr. Peart: I accept that this is an important matter. Of course, this does happen on a number of occasions and it affects mainly Private Members' Bills. I do not think that I can change this now, for obvious reasons, but if the hon.

    1087
    Gentleman would like to have more detailed information I should be glad to speak with him.

    Refreshment Department (Pay)
    Mrs. Lena Jegerasked the Lord Privy Seal why barmen employed in the Refreshment Department receive an average of 30s. a week more than barmaids; and what are the differences in their duties.
    Mr. Peart: The bar staff of the Refreshment Department are paid according to the Wages Council Act.
    Mrs. Jeger: As I am sure that my right hon. Friend will be the first to recognise that equal pay on a gradual basis is now Government policy, will he start by seeing that things are put right in this House?
    Mr. Peart: My hon. Friend is on a very important point there. I sympathise with her. I will convey what she says to the Chairman of the Department concerned.
    Sir Knox Cunningham: Would not the Lord Privy Seal think it wise to consider the wages of all the refreshment staff before the Summer Recess?
    Mr. Peart: This is certainly a matter in which we are anxious to help those who serve us so well.
    Mr. John Page: As the bars concerned are in a Royal Palace, are the payments of the staff subject to the rules of the Prices and Incomes Board?
    Mr. Peart: I should have thought so, as in any other nationalised institution.

    Broadcasts of Proceedings
    Mr. Frank Allaunasked the Lord Privy Seal what representations he has received on the experimental broadcasts of proceedings of the House of Commons; if he will make a statement on the result of the experiment; and what progress he will recommend towards public broadcasts along similar lines.
    Mr. Peart: Other than those of my hon. Friend, I have so far received few representations about this experiment. A report from the B.B.C. has been received by the Services Committee, which is now examining it. I hope that the Committee
    1088
    will be able to report its recommendations to the House before the Summer Recess.
    Mr. Allaun: Will my right hon. Friend agree about clarity of the reproduction? It was so good that one could hear the comments of the interjectors, who were often more interesting than the speakers. As some of us think that Parliament is not the private property of Members of Parliament but should belong to the whole nation, will he now suggest that there should be a public experiment in this Chamber?
    Mr. Peart: I think that the first step should be for the Services Committee, which represents the House, to study the matter and perhaps bring out a report before we come to any conclusions. That seems to be the right order of going about it.
    Mr. Lane: Is the Lord Privy Seal now sympathetic towards an experimental closed circuit television broadcast on similar lines?
    Hon. Members: No.
    Mr. Peart: That is another matter. I am dealing with the sound broadcasting experiment.

    House of Commons Offices Commission
    Mr. Maddanasked the Lord Privy Seal whether he will seek to amend the House of Commons Offices Act 1812 to substitute for the Chancellor of the Exchequer, the Secretaries of State, the Attorney-General and the Solicitor-General as members of the House of Commons Offices Commission, the Leader of the House, the Chairman of Ways and Means, the Parliamentary Secretary to the Treasury, the Opposition Chief Whip and three other Members to be nominated by Mr. Speaker.
    Mr. Peart: It would be premature to draw conclusions at this stage. As I said during the exchanges following the business statement last Thursday, the present position regarding the issues raised about the staffing of the House will be urgently considered by the Services Committee and reported to the House.
    Mr. Maddan: Does the Lord Privy Seal recollect that the Services Committee apparently did not protest at the cuts that were enforced last year? Will he also have regard to the fact that as the Services Committee is mainly nominated by the Whips the Government could always have a majority on it, and to change it in present conditions is rather like jumping out of the frying pan into the fire? Finally, will he bear in mind that this House is the watchdog of the taxpayers' interest, and that it is an unnecessary impertinence for the Treasury to interfere with it?
    Mr. Speaker: Order. Supplementary questions should be reasonably brief.
    Mr. Peart: I hope that the hon. Gentleman will not look upon the Services Committee as a tool of the Executive. It is an all-party Committee which does valuable service, as I hope the hon. Gentleman will, on reflection, appreciate. As I said as Leader of the House during business questions, the first step in relation to an inquiry into this important matter should be for the Services Committee to consider it. I thought that there was agreement on that on both sides.
    Mr. Maxwell: Will my right hon. Friend bear in mind that I resent the imputation made by some hon. Members that I am a tool of any party? Furthermore, does he not agree that the Services Committee has not been given a chance to consider the matter before, but that we look forward to considering it?
    Mr. Peart: I am quite sure that the Services Committee will consider it.

    U.N.E.S.C.O. RESOLUTION (SOUTH AFRICA)
    Mr. Hooleyasked the Secretary of State for Foreign Affairs why the United Kingdom abstained on 28th May from supporting in the United Nations Economic and Social Council a resolution condemning the continued infringement of trade union rights and unlawful prosecution of trade union workers in South Africa.
    The Minister of State for Foreign Affairs (Mr. Goronwy Roberts): We voted in favour of those parts of the
    1090
    resolution which endorsed the conclusions and recommendations of the ad hoc working group on trades union rights in South Africa, but we felt obliged to abstain on the resolution as a whole because it also extended the original mandate of the working group to cover infringements of trades union rights in South-West Africa, Rhodesia and the Portuguese territories in Africa.
    Mr. Hooley: Is my right hon. Friend aware that it docs no good to Britain's reputation for us to appear to be indifferent to or to condone this kind of practice, which is the product of the apartheid doctrine of South Africa? Could we not take a positive attitude in the Councils of the United Nations on this kind of resolution?
    Mr. Roberts: We make our abhorrence of apartheid perfectly clear constantly and consistently. The question here was whether this was the best method of dealing with the matter in the territories I have named. My right hon. Friend the Minister of State explained the position fully, and I think it is widely understood and accepted.
    Mr. Ronald Bell: Was not such a resolution a clear infringement of Article 2, paragraph 7, of the United Nations Charter?
    Mr. Roberts: I could not at the moment say whether the resolution was an infringement of that Article.
    Mr. Speaker: Order. Will the right hon. Gentleman speak up? There is no microphone.
    Mr. Roberts: I am sorry, Mr. Speaker. If the hon. Gentleman will kindly table that question, I will do my best to answer it.

    UNITED NATIONS RESOLUTION (SOUTH-WEST AFRICA)
    Mr. G. Campbellasked the Secretary of State for Foreign Affairs what were the reasons for the abstention by the United Kingdom on the resolution on South-West Africa adopted on 12th June by the General Assembly of the United Nations by 96 votes in favour, with two against.
    Mr. Goronwy Roberts: The United Kingdom was one of 18 members States which abstained on this resolution. We were opposed to the provisions of the resolution calling for severance of economic and other relations with South Africa; nor could we support its other provisions which derived from earlier General Assembly resolutions on South-West Africa on which we had abstained.
    Mr. Campbell: As the right hon. Gentleman will know, I am concerned that the United Nations Organisation should work as effectively as possible, having worked there myself for several years. But does not this decision and other decisions which the United Nations has taken recently show that a majority of members is not always right?
    Mr. Roberts: The majority of no organisation, national or international, is always right.
    Mr. Winnick: In view of the nature of the South African Government and the policies they pursue, is it not all the more necessary to make sure that the territory of South-West Africa is not permanently controlled by the South African Government?
    Mr. Roberts: We are constantly studying the best way in which to solve this very difficult and legally doubtful question. I have already said that we are engaged in a study of the issues raised. Our friends in the United Nations perfectly well understand our efforts and we hope that in co-operation rather than in polemic this very difficult question may be solved.

  PUBLIC BUILDING AND WORKS

    North-West Region
    Mr. Alfred Morrisasked the Minister of Public Building ad Works when he will announce his policy regarding the disparity between new public investment in construction per head of population in the North-West and in other regions; and if he will make a statement.
    The Minister of Public Building and Works (Mr. Robert Mellish): This is only one aspect of the development of the North-West. The Government are now
    1092
    studying the position as a whole in the light of the Report of the North-West Economic Planning Council, and their views will be made known in due course.
    Mr. Morris: Is my right hon. Friend aware that there is concern in the North-West to see action on this Report at the earliest possible date? Could he also say what has been done by the Government in this very important field?
    Mr. Mellish: In the North-West Region from 1964–67 over 40,000 new jobs had been found. The record of the previous Administration over a similar period of time was 29,000 jobs.

  BOARD OF TRADE

    Advance Factories (Northern Region)
    Mr. Will Owenasked the President of the Board of Trade how many advance factories are still untenanted in the Northern Region; and what action is being taken to ensure a tenancy either private or public service.
    The Parliamentary Secretary to the Board of Trade (Mrs. Gwyneth Dunwoody): Nine Board of Trade advance factories in the Northern Region are untenanted; negotiations for the disposal of five of these are under way. Our efforts to interest industrialists in the remainder continue actively.
    Mr. Owen: While we recognise that the Ministry's efforts in the establishment of advance factories have been commendable, is not my hon. Friend aware that at the moment there are some of these factories which have been empty for more than 12 months? If private enterprise cannot be induced to take this opportunity, should not public enterprise be encouraged to do so?
    Mrs. Dunwoody: We are concerned about the number of advance factories standing empty, particularly in the Northern Region, but we are encouraged by the fact that there have been an increasing number of inquiries since the beginning of the year, and that we are going at great speed, and have done for some time.
    Mr. Scott-Hopkins: What is the capital cost of keeping these advance

    1093
    factories, not only in the Northern region but in the country as a whole?
    Mrs. Dunwoody: I should require notice of that question.
    Mr. Tinn: Will my hon. Friend reply to that part of the Question which relates to provision for publicly operated firms if private enterprise is not coming forward to this vital opportunity?
    Mrs. Dunwoody: While we quite understand the immediate approach and the immediate appeal of the idea of the Government moving into these kind of factories, this is not quite a simple question and not one on which we have as yet been able to reach a decision.

  RAILWAYS

    Diesel Cars
    Mr. Allasonasked the Minister of Transport whether he will give a general direction to British Railways to withdraw the two-car Craven diesel units from service on commuter lines pending the report on the accident on the Luton-St. Pancras line on 12th June.
    Hon. Members: Where is the Minister?
    Sir Knox Cunningham: On a point of order. Are we to understand that the Government are so discourteous to the House that there is no Minister here to answer this Question?
    Mr. Speaker: These answers will be given later.
    Later—
    The Joint Parliamentary Secretary to the Ministry of Transport (Mr. Bob Brown): I apologise to the House for not being present when the Question was first called. The Answer is as follows:
    No, Sir. The safety of operations of the railways is the statutory responsibility of the Railways Board, and it would not be appropriate for my right hon. Friend to give a general direction of this kind.
    Mr. Allason: As these Craven units were designed for rural services and it is nonsense to use them in the commuter rôle, the Minister ought to have sufficient control over the British Railways Board
    1094
    to deal with the matter. Does he realise that, after this series of fires, it is not fair to put commuters into a car from which there are only four exits?
    Mr. Brown: I do not accept that. In any event, it would be entirely wrong for my right hon. Friend to interfere in what is a matter of day-to-day management on the railways.
    Mr. Goodhew: Is the hon. Gentleman aware that, although the inquiry is to begin tomorrow, the results will be a long time coming? Is he prepared to accept responsibility for the safety of these passengers in the interim?
    Mr. Brown: It would be wrong for my right hon. Friend to presuppose the outcome of any inquiry, and, as I have said, it would be wrong for him to intervene in what is a management matter for British Railways.
    Mr. Peter Walker: The Minister must be aware of the grave anxiety felt by people using this line. Is it not possible for him to say categorically that there is no danger whatever or that he will see that other types of carriage are used, until the inquiry is concluded?
    Mr. Brown: The Minister is aware of all the anxieties. He is aware also that the management of British Railways is to be depended upon to exercise responsibility.
    Mr. Allasonasked the Minister of Transport what modifications were made to diesel cars on British Railways as a result of the recommendations made by the inspecting officer of the inquiry into the fire which occurred in a diesel car on the Luton-St. Pancras line in August, 1965.
    Mr. Bob Brown: The recommendations made by the inspecting officer in his Report on the fire that occurred on a diesel multiple-unit passenger train at Sandridge near St. Albans on 18th August, 1965, were restated in the Report on the later fire on a similar train at Napsbury near Radlett on 9th February, 1966. The modifications carried out by the British Railways Board as a result of the recommendations in these two Reports have been dealt with together, and I would refer the hon. Member to the Answer

    1095
    to the hon. Member for St. Albans (Mr. Goodhew), on Monday, 17th June.—[Vol. 766. c. 104.]
    Mr. Allason: When the Minister answered on this matter before, he did not refer to the two earlier inquiries into fires. There have been three fires before this last one, and three inquiries. We heard only of the one inquiry. Is the hon. Gentleman satisfied that even with modifications these cars can be made safe?
    Mr. Brown: Again, this is a management matter for British Railways.
    Mr. Heffer: On a point of order, Mr. Speaker. Further to the point of order I raised earlier about the hot air in the Chamber, could you say whether anything is being done? It seems to be getting worse, not better.
    Mr. Speaker: I am sure that the hon. Gentleman does not want Mr. Speaker to leave the Chair to attend to it. I have had inquiry made, and those in charge are aware of the matter which he has raised. I have not had any report yet.
    Mr. Heffer: Might it not be a good idea, Mr. Speaker, if the House were suspended and the Chamber emptied while the matter was settled?
    Mr. Speaker: We cannot do that.

  SCOTLAND

    Queensferry Road Flats, Edinburgh
    Mr. Stodartasked the Secretary of State for Scotland if, in view of the Royal Fine Art Commission's objections on the grounds of form, scale and character, he will intervene in the proposal to build five blocks of five and 12 storeys alternatively in Queensferry Road, Edinburgh, on the grounds that such a development would conflict with the importance attached to the maintenance of views in Edinburgh, as emphasised in the Quinquennial Review.
    The Minister of State, Scottish Office (Dr. J. Dickson Mabon): No, Sir. This is a matter for Edinburgh Corporation, which is aware of the views expressed by the Commission and will no doubt take them into account in examining the
    1096
    detailed plans for this proposed development.
    Mr. Stodart: Is the hon. Gentleman aware of the very considerable anxiety which is being expressed by people affected by this, and indeed, by those who are not? Will he make representations to Edinburgh Corporation that it should give this matter further consideration?
    Dr. Mabon: I know of the concern and certainly appreciate the position of the hon. Member, whose correspondence with my noble Friend I have seen, but there are certain matters of principle and detailed application which are being considered. I am quite sure, however, that Edinburgh Corporation will take the views of the Royal Fine Art Commission into account.
    Mr. Rankin rose—
    Mr. Speaker: Order. We have a lot of business ahead of us.
    Mr. Rankin: Further to that point of order. In view of the somewhat unusual temperature from which we are suffering, would it not be helpful if hon. Members had the opportunity of removing their jackets?

SCOTTISH ESTIMATES
Estimates set out hereunder referred to the Scottish Grand Committee:—

Class III, Vote 2, Scottish Home and Health Department

Class IV, Vote 5, Roads and Transport Services, Scotland

Class V, Vote 2, Department of Agriculture and Fisheries for Scotland

Class V, Vote 4, Department of Agriculture and Fisheries for Scotland (Agricultural Grants and Subsidies)

Class V, Vote 6, Department of Agriculture and Fisheries for Scotland (Agricultural Price Guarantees)

Class VI, Vote 2, Scottish Development Department

Class VI, Vote 5, Housing, Scotland

Class VI, Vote 15, National Health Service, etc., Scotland

Class VI, Vote 16, National Health Service (Superannuation, etc.), Scotland.—[Mr. Concannon.]

NURSES AND MIDWIVES (PAY)
3.41 p.m.
Mr. George Lawson: I beg to move,
That this House, while commending the Report of the National Board for Prices and Incomes on Pay of Nurses and Midwives in the National Health Service for many of its features, nevertheless, regrets its failure to give sufficient recognition to the higher levels of qualification and skill in the nursing profession and urges that the rectification of deficiencies in this respect should be an immediate concern of Her Majesty's Government.
I begin by quoting the reference in Report No. 60, which appears in the first paragraph:
"We were invited by the Government, as a result of joint representations by the two sides of the Nurses and Midwives Whitley Council, to examine the pay, both in terms of structure and level, and conditions of service of nursing and midwifery staff. The reference covers 300,000 lull-time and part-time hospital staff in England. Scotland and Wales and 34,000 local authority nursing staff—all the grades covered by the Council."
Paragraph 2 begins by saying:
"The reference came to us in July 1967 …".
If the Prices and Incomes Board had been more pedestrian, it would probably have made a Report merely on salary scales and conditions of employment and service, and in all probability we should not have been having this debate. But whether one says that it is to the credit or discredit of the Board, depending on one's attitude, it is true to say that the Board, in its inquiry, went further than merely to consider the wages and salary scales and conditions of employment. In effect, the Report goes into the whole field of nurse recruitment, training, classification and organisation. It is almost a complete review of the nursing services as they function within the hospital service and local government service.
The Board, in compiling its Report, did not go about its task superficially. It tells us, in paragraph 4:
"Our findings are based to a large extent on the results of investigations which we undertook specially, and for which we were able to secure the services of expert advisers. Detailed studies of nursing work were carried out in eleven hospitals and a survey by questionnaire was made by 587 hospitals."
We therefore have a statement that the inquiries conducted by the Board were conducted under the guidance of expert advisers and that detailed examination
1098
was made into the functioning of eleven hospitals and there was a wider examination of nearly 600 hospitals. Bearing in mind that such scrutiny never seems to have been carried out before, this is a Report to which great weight might be given. Perhaps because of this there has been much concern, manifested recently, about some of the findings in the Report.
I cannot claim that I have paid particular attention to conditions in the nursing service. Some of my hon. Friends have displayed a much more aggressive interest in them than I have done. However, I find the Report valuable, first, because of the information it gives. It tells us, for example, how complex and varied the nursing service is. It tells us that there are over 200 salary scales. That is worse than the situation in the shipbuilding industry and many other industries with which we often concern ourselves. There is a wide diversity not only of salary scales, but of nursing categories.
We all know of state-registered nurses and student nurses. Perhaps not so many people are acquainted with senior enrolled nurses, enrolled nurses, pupil nurses, nursing auxiliaries and nursing assistants. Those are what might be called the basic categories. There is a whole range of additional qualifications which nurses can acquire. This is, an immensely complicated service with a great variety of skills and high levels of educational qualifications, and those in it carry a considerable measure of responsibility.
The Report is to be commended because it enables us to understand so much more fully than we might have done the complexity of the service. It also shows, if not directly, then certainly indirectly, if we are prepared to read between the lines, that there is a great range of standard in the services available to people under the National Health Service. There are hospitals ranging from the great teaching hospitals of international reputation to places of which people do not wish to know. We have different hospitals with very different standards of staffing.
It is clear from the Report that there are different standards of skill among the staff in the hospitals. I should like to quote

1099
one or two salient points in the Report. Paragraph 60 states:
"The level of cover by trained nurses at night is low…. At one teaching hospital which we visited it was usual to have one trained nurse and two student nurses on duty in each ward. At the most highly staffed non-teaching hospital we saw it was usual to have two student nurses in each ward and one trained nurse between two wards. At other non-teaching hospitals, staffing at night was by three student nurses between two wards (to allow for meal reliefs), and one trained nurse between five or six wards. There were even instances of patients being in danger because of inadequate or inexperienced night staff."
In other parts of the Report we are told of other kinds of hospitals—such as phy-chiatric hospitals—where the staff can do no more than perform a custodial duty at night.
We see from the Report, in a way that I have not seen it before, the wide range of standards, of service and of staff, including skilled staff. We also see from the Report that there is a steady shift from the higher level of skill or qualifications to lower levels. Far be it from me to say anything that might reflect on any degree of nursing skill. All right hon. and hon. Members would agree that in our nursing profession we must have an abundance of the very highest level of nursing knowledge and skill.
We want to see progress towards higher levels in our hospitals, but we find that there is a steady shift towards lower levels of composition of the nursing staff. A bigger and bigger part is made up of the enrolled nurse, the pupil nurse training to become an enrolled nurse, the nursing auxiliary and the nursing assistant, and a smaller part is made up of the registered nurse and the student training to become a registered nurse.
I understand that the shift has been going on over many years, but to take only the three years covered by the Report, 1963–66, in England and Wales the total increase of the student registered category of nursing staff is about 1,900, or about 2·4 per cent. whereas the increase in the number of the lower skilled categories is about 16,900, just over 23 per cent. In case my hon. Friend the Under Secretary of State for Scotland smiles because he thinks that conditions are so much better in Scotland, I should tell him that over the same period the total increase in the numbers of the
1100
higher skilled categories in the profession in Scotland was 106, about half of 1 per cent., whereas the increase in the other categories was 3,330, about 31 per cent. Therefore, the shift has been greater in the smaller area than in the larger, despite the higher reputation we have in Scotland for our hospital facilities and levels of education in nursing. The number of student nurses in Scotland fell over the three-year period by about 555.
The situation in our hospital service is such that, according to paragraph 53 of the Report,
"The staff nurse"—
that is the basic career grade, I understand, in the nursing profession—
"has practically disappeared from the scene in many hospitals."
Paragraph 56 says, of the position in London:
"The shortage of trained staff is made good to some extent by the use of agency nurses. At present, in the London area they are used not merely to fill temporary gaps, but they form an important part of the permanent staff of hospitals. They account for one in seven of full-time staff nurses in the London area. The additional cost to the hospital service is considerable."
I was interested to see in the Nursing Times of 21st June an advertisement by the Kent Nursing Association calling for agency nurses and offering them salaries of up to £110 a week [Laughter.]. I mean £110 a month.
I think that it is 20 years ago this week that the National Health Service was begun. It was a very great conception, and over the years it has performed immense humane services, but there should not be the wide differences in standards shown in the Report. I look with urgent concern to both my right hon. Friend the Minister of Health and my right hon. Friend the Secretary of State for Scotland for the publication of the Green Papers containing the results of the examination of the present structure and functioning of the Health Service, and their recommendations for the speedy modification or elimination of some of the worst differences of standards. I am sure that all hon. Members on both sides of the House will echo what I say about that.
The Report's main recommendations dealt with salaries and related matters. They must be very well known to all hon. Members present. The Board

1101
recommended an increase at the lower end of the scale of 14 per cent. spread over two years, tapering off to 9 per cent. at the higher levels. It recommended overtime payment for work at unpopular hours—and very unpopular hours are worked at night and at weekends, but the recommendation of time and a quarter to be paid only after a period of time, and not right away, does not strike me as particularly generous.
I know many folk in industry who would not feel very induced to work on a Staturday or Sunday for time and a quarter. The Report failed to cover all those who might be called upon to work during those periods, but I suppose that we can take the recommendation of such advances as going in the right direction.
There are recommendations for increases in certain additional payments for long-term service and service in very unattractive forms of nursing. These recommendations, while important, form quite small parts of the Report.
There are also recommendations for abolition of the broken shift system. It has been described to me, and I have had a chance to observe it, and I can well imagine how aggravating a broken shift system is to nurses who come on duty expecting to get away that evening and who are pleaded with to carry on, because of certain difficulties, and to do a working day spread over many hours. This kind of thing is always objectionable. The recommendation that the broken shift should be eliminated as speedily as possible is surely to be welcomed.
While it might be said that these recommendations constitute the principal objective which most of us suppose to be that of the Board—this is the kind of thing it was asked to look at and recommend upon—the Royal College of Nursing and the National Council of Nurses look on them with considerable reservation. In their own comment on the Report, on page 19, they say:
"Whilst the Council considers the recommended increase in salaries to be generally disappointing as a response to the Staff side salary claim, it accepts that these must be viewed in the context of the present financial position of the country."
I am sure that my right hon. Friend the Secretary of State for Employment and Productivity would be delighted if
1102
that were the general attitude, but the fact that the Nursing Council is so moderate on this matter lends very great weight to those representations on which it is not so moderate. It is important that we recognise how moderate the Council is being in terms of the recommendations of the Board and I reiterate that this very moderation gives its views on other aspects even greater force.
The primary objection of the Council is to those recommendations which tend to circumscribe or which relate to nursing education. As the Council sees it, the Board's recommendations in relation to the longer term interests of the profession—and primarily the educational standards—point in the wrong direction. Indeed, the Council thinks that not only do the recommendations not help, but that they are positively injurious in their nature. That basic complaint, which is shared by all the nursing bodies, is a fair point to make. The Council says that it considers that the prerogative of the profession has been encroached upon by the Board's making recommendations on this matter at all.
In other words, the profession is saying politely—far more politely than many of us would have put it—that the Board should not have made recommendations on this matter at all and that such matters as nurse entry, education and training and, to use a rather harsh term, nurse utilisation, are the subject of negotiation. I hope that the overwhelming majority of hon. Members will be on the side of the nurses on this and other matters.
There is also the point concerning age of entry. The Board recommends that the age of entry into the student nursing category should be reduced from 18 in England and Wales and 17½ in Scotland. It is clear that the profession is opposed to this and I think that it is right. The valuation which we place upon ourselves is the one which most people come to accept.
This was the first profession of women in this country to achieve statutory registration. They fought for it for more than 30 years and finally got it in 1939. They were the first profession of women to say, "These are our standards. We insist upon them and we shall use the law to maintain them." In any case, a reduction in the age of entry would run

1103
counter to the whole stream of development of our society. More and more youngsters are staying on at school after the statutory leaving age. The whole idea is that they should aim for jobs with higher educational content and higher status. Yet the Board recommends reversing that process for nursing.
The attitude of the nursing organisations receives no support in the Report. For example, the present qualification for entry to the Register is two O levels and the nursing organisations want to see this raised in stages to five O levels for entry to the Register. For entry to the Roll the pupil nurse ought to have at least two O levels. The Board suggests an aptitude test for entry to the Roll and does not lay down any academic qualifications, and, rightly, the nursing associations are deeply concerned.
The Royal College of Nursing has put it to me, as it has done for years, that the entry standards should be raised. If we lower those standards we will get a lower quality of youngster into the profession. The College has for a long time sought to introduce a standard of entry requiring some five O levels. This would not be exceptional. It is normal for a whole range of new professions, many of them catering for the same kind of girl —for example, radiology. It is quite normal for such professions to require five O levels and some of them also require A levels. The nurses say they realise that their objective could not be reached at once, but they claim that it should be achieved over a period. That is why they are so opposed to the tendency of the Report to depress, instead of lift, the educational standards of nurses. The nurses do not want standards of education to be lowered.
As we all know, student nurses form a large part of the nursing staff of the hospital service. I do not like their use as cheap labour. In many ways, the approach is that the student nurse should not be described as a student, although that is not the approach of many of the best teaching hospitals. But there is no doubt that in many hospitals these girls are used primarily as cheap labour, and many do not get the training which they ought to be given.
I have had abundant evidence recently of girls being asked to take jobs with a
1104
responsibility which a second-year or third-year student ought not to be asked to accept, jobs which should be given only to the fully qualified nurse, and yet these girls are paid very much less, on average about half, than the amount paid to the registered nurse. This is the crux of the matter. It is not that nurses are sometimes treated with greater discipline than adult girls should be subjected to, or that their life outside the hospital is circumscribed. These are petty matters compared with the importance of what she is paid for the work she does, and the evidence is that far too often the young girl is treated as cheap labour with little consideration given to her training as a student nurse.
Can we be satisfied that about 70 per cent. of patient care is undertaken by students? Are we sure that it is always adequately supervised and that the student receives the education which is her due? If we are satisfied about that, are we content that she should be paid 50 per cent. of the wage payable to a registered nurse who does the same work? I have no hesitation in saying that all hon. Members would say that we are not satisfied and that this is the kind of thing which we want to be changed.
One of the things which I find particularly irksome is that these girls are described as receiving not salaries, but allowances. An allowance for a first-year nursing student, after deductions of £25 for board and lodging, works out at £370 a year. This is exactly the allowance paid to a university student living in London away from home. But the student is paid on the basis of a 30-week year, while the nurse is paid for about 50 weeks. The student gets £370, or £340 outside London, as an allowance free of tax and does not have to pay National Insurance contributions. The nurse pays both tax and National Insurance contributions, and probably one-quarter of her income goes on those items. She often does back-breaking work, although she is called a student nurse, and even in her third year her allowance works out at only about £430 —under the terms of the Report—and she then has to face these deductions.
Yesterday afternoon, I was talking to a nurse who has nearly completed her three years' training. She told me that she could not live on what she was paid.

1105
She managed only because she lived near her parents and was subsidised by them. She said that many of the girls with whom she was associated lived largely on soup as a basic diet, because they could not afford much more. I appreciate the nation's economic difficulties, but something must be done about this matter. Student nurses should be relieved of the obligation to pay tax. With any kind of justice, why should girls in one category have to pay tax when girls in the other do not? I know that this would cost a lot of money, but we are losing many of these girls from the service, and something must be done.
There is a variety of other annoyances. For example, when an increase in salary is negotiated, there is an increase in the amount which has to be paid for board and lodgings. This is a proportionate increase. The girl to whom I was talking yesterday said that she had had £10 retrospective payment, of which about £6 10s. had been used to pay an examination fee and she had used the rest to buy books. She said that some of her colleagues had been left with only £2 or £3, because they lived in. Is there any justification for this proportionate increase, difficult though the nation's financial position may be?
More especially, the charge for board and lodgings is the same irrespective of the quality of the board and lodgings. The charge is not related to whether the girl has a bedroom of her own. She may be sharing a bedroom, or be in a dormitory, or be sharing toilet facilities with others, or she may have a nice bedroom, according to the hospital, but, according to her status and according to what she is receiving, so she pays. I am sure that my right hon. Friend cannot justify that. Perhaps he does not know that it goes on, but I am now shouting in his ear that this type of thing is the cause of so much ill-feeling and should be ended. If there has to be a charge, it should be commensurate with what is obtained and should not be fixed irrespective of the kind of service provided.
Another difficulty is that a girl who has completed her training as a registered nurse and who then decides to become a midwife may suffer a fall in salary of £151, plus £36 which she would have been getting if she had continued as a
1106
registered nurse, making a total of £187 in her first year of midwifery training. If she were an ordinary student who had decided to take another course, it could be argued that she had chosen to do so, but one such girl is acting in a large maternity hospital as an equivalent to the ward sister. She is a trained nurse and her duties are so arranged that when the ward sister is off, she is on. She is giving trained service for a salary which, she tells me, the domestic worker is getting for a 20-hour week. That kind of thing is bound to break anybody's heart.
There is a feeling of wrong and injury. My right hon. Friend should look at this and consider what he can do. There is great concern about educational standards, and he should pay great attention to what the nursing profession says. It is concerned with the standards and quality of nursing, and when it gives advice in terms of nurse training, the kind of organisation there ought to be for training nurses, then he should pay great heed to it. The Report says that the Board's recommendation in this connection is for larger grouping of our nursing schools, which shows very little concern for the quality of the education given to the girls. At bottom, what the Board is recommending is a better pooling system of junior nursing labour, where they can be more efficiently employed over the hospitals in a given area. If that is how the recommendations would work, then the profession would be utterly opposed to it.
I am fortified in my belief in this respect by the attitude displayed in the Report towards the tutor nurse. I understand that it can take eight years to train a tutor nurse, and that she will normally go to university for two years, yet she is lowly graded and lowly regarded, in the Report and the Health Service. An examination made into this in 1966 showed that 44 schools of nursing were in the charge of unqualified nurses. My hon. Friend the Parliamentary Secretary has earned some ill-repute, undeserved in many other respects, by a remark to the effect that they were skilled nurses and unqualified tutors. Of course they are, but they are not skilled tutors.
To take a comment made by the Board in its Report concerning tutors. The Board was discussing the question

1107
of student wastage. The General Nursing Council for England and Wales recommended that one way of countering student wastage was by paying the tutor a higher salary. The Board comments:
"We are not pursuaded, however, that increasing the pay of those who teach will by itself do much towards preventing the wastage of those who are taught."
That is a dreadful and shameful statement. Anyone who knows anything about teaching, or who has been taught —and we have all been taught in some way or other—knows how immense is the difference between teachers. We can be stimulated by some and depressed by others. Many of our student nurses are being taught by unqualified, uninspiring nurses, whom they can perhaps see are not fit to teach and we are bound to have this wastage. A girl wants to be taught to become skilled as quickly as possible, and if she finds that the person responsible for teaching her cannot give her this knowledge, she will leave. On this basis, it is very important that the tutors be regarded highly. I see you straining at the leash, Mr. Speaker, so I will draw quickly to a conclusion.
Figures have been given which show a steady decline in the number of qualified tutors. We have almost no qualified or registered qualified tutors under the age of 30. The bulk of them are between the ages of 50 and 60. This means that the tutor is passing out; there are no fresh entrants. On this basis, there is a powerful argument for dealing with this problem. There are certain meannesses in the Service, not just the hospital service, which I would like to see examined.
In most cases the district nurse is treated very meanly. She has a substantially smaller salary than the ward sister, with whom she is comparable in terms of skill. In many cases she is better qualified than many ward sisters. She has a salary which, at its minimum, is more than £100 less than the ward sister. Often she has to have a telephone and a motor car—although I have seen district nurses standing in a queue waiting for a bus, which is not an efficient use of labour. When she has a car and telephone, these are taken as part of her wages, which is absurd. We should treat these women, performing this valuable service, in a much better way.
1108
If the nursing profession is to regain its former status—although it still retains that in our minds—the very top people in the profession must be adequately rewarded. If there is to be room for proper differentiation of rewards for the varieties of skills and responsibilities this is vital. The nursing profession is adamant that what is offered is far too small—it is about £3,000. The Salmon Recommendations for the reorganisation of the service takes the top person in the profession and says that they are worth only £2,295.
The nursing profession says, and it has reached this conclusion after having examined many like jobs, that the very lowest at which the top salary should be reckoned, is £4,500. It does not say that there are thousands of women who will get this, but that it is a gradual process of establishing posts. It says that where and when they are established, the top person should be put on that level. Sub-sequently, that will leave room for the proper adjustment of the other scales. These are my proposals, the views I have reached as a result of a careful study of this report, which I would not have undertaken had I not been successful in the Ballot. I am sure that all hon. Members will thoroughly support my Motion.
Mr. Speaker: May I remind the House that this debate finishes at 7 o'clock, and that many hon. and right hon. Members wish to speak. Reasonably brief speeches will help.
May I also announce that I have had a report on the state of the atmosphere in the Chamber. I am informed that the air conditioning plant is designed to reduce the outside temperature by 10 degrees and that at the moment the outside temperature is 88 degrees. The engineers have managed to get the temperature of the Chamber down to 73 degrees, which is 15 degrees below the outside temperature. They are still continuing to do the best that they can.
4.30 p.m.
Sir John Vaughan-Morgan: The hon. Member for Motherwell (Mr. Lawson) has done a considerable service in bringing this matter before the House at this stage. No one can say that his speech in any way raised the temperature of the Chamber and I shall endeavour to follow suit. The hon. Member gave

1109
a comprehensive review of the problems of the Report and in obedience to your wishes, Mr. Speaker, I shall try to be very brief. I disagree violently with him on one point, but I will refrain saying anything on that at this moment.
As I understand, the Minister will wind up the debate. That places me in a little difficulty, because I should like to have known exactly how far he has got in his consideration of the Report. I understand that the Report will now go back to the Whitley Council for consideration. The other suggestions in the Report will no doubt be chewed over by those concerned. I think that the Minister would agree that it will do no harm for him to have a few warning shots across his bows as to the bits of the Report which I believe will be unacceptable to almost anybody at this stage in the proceedings.
I wish to voice the concern felt in many quarters, not only by the Royal College of Nursing, at some of the recommendations contained in the Report. I think that one needs to look at the Prices and Incomes Board first. There is its Report No. 60. That is a remarkable output for a comparatively short life. The matter was referred to it in June, and it reported in March—nine months. The 14 wise men and women who composed the Board have found it possible to resolve problems that have worried many more expert people for many years. As a result of visiting about 15 hospitals and the answers to some questionnaires, it has not hesitated to make the most fundamental and far-reaching recommendations, some of which go far beyond any concern with the pay of nurses and midwives.
To give an example in paragraph 157 the Board comes out with a suggestion for area hospital boards. I take it that it has read and digested the Porritt Report. There may be a great deal to be said for this, but, to my mind, when the Minister is considering the matter and about to produce his Green Paper I hope we can take it that he will give the matter rather more than nine months consideration before he comes down so categorically on the side of a very fundamental change in the structure of the National Health Service.
I find it extraordinary that anybody can come forward with some of these recommendations on the basis of such
1110
very short experience. Many other of the suggestions are equally superficial. For example, the suggestion that the grading structure put forward in the Salmon Report, except for Grade 10, should be introduced on 1st January is ridiculous. I think that it took the Salmon Committee two years to report and produce a very well-thought-out scheme which the Minister has accepted in principle, and it is now being tried out experimentally in one or two places. This is right. But for this body to come forward and say that it can all be done within a matter of a few weeks, is puerile.
In any case, it is starting at the wrong end. The first matter to be implemented is at the top. The first thing to do is to appoint the Chief Nursing Officer. With her experience and wisdom she can get the Salmon structure going from above. So I hope that that recommendation will be totally disregarded.
Understandably, most of the Report is concerned with matters of pay. I do not want to burden the House with too many detailed comments and my own views about what is good and bad in the recommendations. But there is one choice comment in the Report where the Board says in paragraph 159:
"we think first that the largest increases in pay should be concentrated where shortages are most serious ".
To me, that is a blinding glimpse of the obvious. I cannot think of a better reason for giving the increases in pay, but one must be frank and say that that is not consistent with the Board's attitude throughout.
For example, this principle, which, in my view, is right, is not to be allowed to apply in the case of qualified tutors, a point which the hon. Member for Motherwell dwelt on at some length. He was right to do so. It shows an admission that there is a general shortage of tutors. If there is a shortage of tutors there will be a shortage of nurses, particularly of good nurses. Recommendations such as this are calculated to discourage those who are qualified to move into the sphere of nursing education.
There are many other points that I could bring forward, but I leave them to my hon. Friends and hon. Members opposite to speak about. I want to raise one more fundamental principle which perhaps goes even wider than some of

1111
the terms of the Motion, and that is the question whether the Whitley machine is the right one to deal with the question of nurses' pay.
The matter of nurses' pay has been taken out of their hands for the moment and put in the hands of the Prices and Incomes Board, and now it goes back to the Whitley machinery, for ultimate decision, presumably, by the Minister. This is a bee in my bonnet which does not have many opportunities of buzzing around. I do not know whether we ought not to take a leaf out of the book of the doctors and dentists and institute a review body. The Whitley machine is something of a sacred cow. Very few people like to criticise it, but it is appallingly slow and cumbersome. The doctors and dentists have opted out of the Whitley machinery, and I think that the time has now come to create a similar body for nurses and midwives and another review body for the other grades in the National Health Service.
The fact is that within the nursing ranks shortages occur, but a shortage cannot be met without consideration of both sides in the Whitley machinery and the appallingly long procedures that are gone through. Outside the nursing grades and the doctors, sometimes the work is held up because there is a shortage in a particular grade, such as pharmacists, who were mentioned. Sometimes it is even telephonists, a shortage which can cause the whole work of a hospital to be threatened. At the moment, it is a shortage of medical secretaries in the big cities which is jeopardising the work of many of the big hospitals. Nothing can be done about it. It is all under consideration by the Whitley Council. Then, at long last, the increase or change in grading, or whatever it may be, goes forward, and ultimately the shortages are made good, but by then a lot of valuable time has been lost.
Although I do not ask the Minister to pronounce on what would be an even more fundamental change today, I hope that he will give this his consideration and try in that way to resolve one of the most difficult problems in the National Health Service.
4.39 p.m.
Miss Margaret Herbison: I should like, first, to congratu-
1112
late my hon. Friend the Member for Motherwell (Mr. Lawson) upon choosing this important subject for a debate. I think that all hon. Members who are in the Chamber would like to congratulate him on the way in which he has dealt with it.
We had an Adjournment debate on this subject, initiated by my hon. Friend the Member for Fife, West (Mr. William Hamilton), and on that occasion the Under-Secretary of State for Scotland made certain pronouncements. He told us that recommendations of Report No. 60 of the Prices and Incomes Board on salaries had been accepted, but that the recommendations concerning training, age of entry and other matters had not necessarily been accepted. It is important that we should know this, and it is of great importance today that my right hon. Friends the Minister of Health and the Secretary of State for Scotland should have the views of hon. Members on vital matters such as training which have been raised by my hon. Friend.
Both sides of the House are critical of some of the recommendations in the Report of the Prices and Incomes Board, but before I go further I feel that the Government deserve some credit for the way in which they have handled, in the first instance, the salary awards which were made. There has been criticism, but, at least, the 4 per cent. has been paid and it has been made retrospective. Those in psychiatric hospitals and those who look after the old people and the chronic sick have also had the increased lead in salary which was proposed in the Report.
We in this House have a great responsibility towards nurses. I remember the debate which continued throughout the night when I sat on the benches opposite, when time and time again it was stated that because of the devotion of nurses to their work and because of their attitude towards their patients, they would not strike. Even at that time, when they were so shabbily treated, they neither went on strike nor threatened to strike.
We simply cannot take that devotion for granted. When nurses show that very great sense of responsibility, there is an even greater responsibility on Ministers of the Crown and on ordinary Members of Parliament, on both sides of the House,

1113
to ensure that nurses, their conditions of service and their salaries are given far more attention than they might otherwise be given.
I wish to look first at a point touched on by my hon. Friend concerning the very great wastage of nurses who go into training. I understand that of every 100 young girls who are attracted to nursing, 30 per cent. fall out before they have completed their training. I do not know whether the Government—the present or previous Governments—have investigated as thoroughly as they should the reason for this great wastage of those young women who, in the first instance, have been attracted to nursing. One of the reasons might be the inadequacy of their pay.
I said that the Government could take some credit for what they had already done as a result of the Report, but when I look at the payment of nurses and at the payment of benefits to other people for whom I was responsible for almost three years, I have to say to myself that this is a 4 per cent., 12 per cent., or 20 per cent. increase—on what? In other words, was what the nurses—or, for that matter, our old people—had previously an adequate sum? The answer of all us must be that it was not adequate. Therefore, whatever consideration the Government give to this matter, they must begin from the premise that never in our history have our nurses been adequately paid.
I met a representative group of nurses from the County of Lanark. Like my hon. Friend, who met them at another time, I was greatly impressed by the case that the nurses made to me. I was greatly impressed by the temperate manner in which they made it. I would give them full marks for not being extravagant in their actions or in their claims. The Report from the Royal College of Nursing dealing with the Prices and Incomes Board Report No. 60 takes into account the financial circumstances of the country, and this fact was remarked upon to me by the group of nurses whom I met. In other words, we are not dealing with a group of hotheaded people who want something irrespective of whether the country can afford it. It is, again, because of that attitude of the nurses generally, whether they be in the Royal College of Nursing
1114
or in the trade unions, that there is an added responsibility upon us as Members of Parliament to ensure that they get fair play.
In moving the Motion, my hon. Friend the Member for Motherwell dealt with some very wide issues. I should like to deal with a number, but I will deal with only two. The first is the question of training and how tutors are affected by the Report which has been published and the fears of the nursing profession if the Government in their wisdom, after consideration, finally accept its proposals.
Like my hon. Friend, as a result of this debate I have obtained a great deal of information. Any nurse who wants to become a registered tutor must have high qualifications. First, she must have what the nurses call eight years of preparation to start with. Before she is accepted for the two years' training in a university course, she must have the entrance qualifications for the university. These are no mean qualifications that we are asking of those who are to perform the vital job of training and tutoring young nurses. The extra reward which they now get, or even the extra reward which is proposed in the Report, either in salary or in promotion prospects, is so little that I believe, as do the nurses, that there is very little incentive indeed for them to undertake that great extra preparation.
Let us look at the figures. A registered nurse tutor gets £1,232. We find in the profession that even those who have taken the training and who are registered nurse tutors are being attracted into other forms of teaching. As an example, from the County of Lanark, a man who was receiving his £1,232 obtained a post in a college of technology and his salary immediately jumped to £2,300. How are we to keep those tutors in the nursing profession, where they are so vitally needed, if that is the position in which they find themselves at the present time?
I turn now to clinical instructors, who must have at least seven years' preparation plus a six months' course at a training college. After the six months' course, one would have thought that they would be able to look forward to some extra financial reward, but, not a bit of it. After that extra training, there

1115
is no additional financial reward. All of this is reflected in the shortage of registered nurse tutors and clinical instructors.
If one looks at the ages of tutors and clinical instructors one finds that the vast majority of them are over 50 years of age. That again is very serious, because it means, in effect, that when they come to the point of retirement there are no younger ones ready to step in and take their places.
I have been given some figures for Scotland. In August, 1967, there were 102 nurses doing this vital work of tutoring without the necessary qualifications. Even worse than that, there were 96 vacant posts in Scotland alone. This must be a great cause for concern not only for the nursing profession, but for the two responsible Ministers and all hon. Members. We must always link this position with the care and the safety of patients. They must not be forgotten. It must also be linked to whether our young nurses are getting adequate training.
I can think of nothing which would lead to more wastage among young nurses than the feeling that they are in a job, being used as cheap labour, and are not receiving the training which will make them responsible people in their chosen profession. I am afraid that that is happening today in some instances.
I had intended to say quite a bit about midwifery tutors. I have some information before me which my hon. Friend the Under-Secretary of State may have already. If he has not got it, I will gladly send it to him. My hon. Friend the Member for Motherwell also dealt with this point.
Looking again at wastage, it must be remembered that the young woman who is to be trained in midwifery is a State-registered nurse. However, when she takes her training in midwifery, immediately her salary drops, in spite of the additional training that she has undergone to care for our mothers and children.
In Scotland, of those trained in midwifery between March, 1966, and February, 1967, 10·6 per cent. went overseas. In the period from March to November, 1967, that percentage increased to 16·6, and in case anyone
1116
thinks that included in that percentage there are a number of young coloured nurses who have come here for training I would stress that the figure is exclusive of those who have returned to their own countries.
The second aspect deals with nurses employed by local authorities. Those whom I met felt that the section of the Report dealing with them had much to recommend it, and I learn that my own County of Lanark has already implemented some of the Report's proposals.
There are a number of matters which must be a source of worry for most people concerned with the domiciliary services. First, there is a real shortage of experienced administrators in the service. Again, this is not surprising when one looks at the facts and realises that the salary of an assistant nursing officer is only £36 a year above that of field staff and that no living accommodation is supplied for such a person. I feel strongly that it is because of the lack of incentives that most nurses in the field do not seek promotion. Who will seek promotion to take on heavier responsibilities with no incentive to do so?
Turning to those who are actually doing the work of caring for patients in their own homes, we find that district nurses are still paid £110 a year less than ward sisters. I would be the last to say that ward sisters do not carry a great responsibility, but I feel that district nurses carry at least as much. I have had experience of a district nurse in my home and I can speak almost from the heart about the kind of work that they do for our old people. So often old people are able to stay in their own homes when otherwise they might be taking a bed in a hospital.
My hon. Friend the Under-Secretary of State has already had a meeting with Scottish representatives of the Royal College of Nursing, and I know that he has promised to meet them again at the end of the year. I urge him and my right hon. Friend the Minister of Health to give serious consideration to the case made to them by the nursing profession on such matters as education and all that is bound up in it. I know, too, that they will give great consideration to what is said today. Even in a profession of mainly dedicated people, promotion

1117
prospects are important. Training is also important, both for the nurse who wishes to know that she is on top of her job and for the care of the patient.
I congratulate our Government on what they have done already, and I urge them to give the gravest consideration to the points made today.
4.58 p.m.
Mrs. Jill Knight: To understand the attitude of our nurses, it is necessary to look at the frame of mind in which they awaited Report No. 60 from the National Board for Prices and Incomes on the Pay of Nurses and Midwives. This was the first: time for 20 years that a chance had been taken to examine in depth the problems facing the nursing service. Incidentally, it is 20 years ago that the National Health Service first began. In all that time there has not been an examination such as this was to have been. For that reason, the nurses were extremely anxious and awaited with great eagerness to see what the Report said.
There was the chance to dissect and examine the whole suffering of the valiant nursing service and prescribe some sort of remedy. The scalpel of the National Board for Prices and Incomes probed, the stethoscope roamed about the affected area, temperatures and blood counts were taken, and, finally, the surgeon threw all the suggested modern remedies out of the window and bled the patient.
Because of the attitude shown by Report No. 60, there is widespread frustration and dismay in the nursing profession. It is true that the Report suggests that starting salaries should be raised, but it does not make the same proposal for concluding salaries for those at the peak of the profession. A nurse constituent of mine, who has a gift for a turn of phrase, has written to me saying, "This has resulted in a sliding scale resembling a deflated concertina". Attracting women and, indeed, men into the nursing profession is not just a matter of starting salary. The salary scale at the top level must be adequate.
I want to make three points briefly about the future. They have been mentioned by other hon. Members, but, as the right hon. Lady the Member for Lanarkshire, North (Miss Herbison) said,
1118
this is an extremely important matter because there is a grave shortage of hospital tutors. The Minister of Health ought to accept that the ratio of one tutor to 40 students is too big. The Royal College of Nursing suggests that it should be one to 30 for general nursing students and one to 20 for students in psychiatric nursing. That is very important.
The grading proposals of Report No. 60 for hospital tutors was extremely disappointing. In Appendix XI on page 66 of the Report, the Board suggests how the different grades might fit into the new grading structure which is so important in attracting people into this branch. The Board suggests that tutors should be in Grade 7 and principal tutors in Grade 8, and in the body of the Report reference is made to the principal tutor in a very large group school being in Grade 9. What does this mean, and in which group will they finish?
One most important point about tutors is that when they have finished their training they are qualified to teach certain subjects in colleges of further education. If they opt to do that, they get far more money than if they opt to be a hospital tutor. I do not know whether the Minister of Health is on speaking terms with his right hon. Friend the Secretary of State for Education and Science, but it would be helpful if they got together and made up their minds that the colleges of further education should not attract these people from the hospital service where they are desperately needed.
The hon. Member for Motherwell (Mr. Lawson) spoke of student nurses taking a drop in salary, after they have become S.R.N., when they opt to take midwifery courses. If he proposes to take the point up with his right hon. Friend, I must tell him that he will not get very far, because I took it up with him more than a year ago, and when I explained the case of a constituent who had suffered a similar drop in salary, the only reply which I received from the Ministry was that there was no shortage of midwives anyway, so why should anyone be concerned about it?
It is most important that hon. Members on both sides of the House should attempt to explain to the Minister the frustration felt by nurses. One of them wrote to me about Report No. 60

1119
explaining exactly how she and her colleagues feel about it. I sent the letter to the Minister for comment. After a short time I received a reply, not from the Minister but from the Parliamentary Private Secretary, stating that this was a matter for the Whitley Council and that my constituent was advised to make her views known to her staff organisation.
This constituent is a member of the sub-committee of the Royal College of Nursing responsible for the comments on Report No. 60, and her views and those of her colleagues are very well known indeed to her staff organisation. Having submitted her comments on the Report, and having made her views known to the staff organisation, she thought that the next step was to contact her Member of Parliament to make sure that the Minister knew these views. When she did so, she was pushed back again to the bottom of the ladder and told to contact the Whitley Council.
Mr. William Molloy: Is not the hon. Lady aware that this kind of recommendation and protest has been going on for the past 20 years, but that nothing happened about it from 1948 until this year?
Mrs. Knight: As far as I can see, nothing much will happen now unless many hon. Members press very hard for some action. The point which I am trying to make is that it is excessively frustrating for people who have already done all the things which they should do through their staff organisations and who then seek to contact the Minister through their own Member of Parliament, to find themselves once more at the bottom of the ladder. I do not care how long this has gone on. It is high time that it was stopped.
It is not just a matter of pay. There are many other causes of frustration and worry in the nursing service. They have clearly shown their reaction to Report No. 60. For example, there is the point about the varied educational standard. The hon. Member for Motherwell, too, raised that most important point. I understand that they want older candidates with acceptable qualifications to be admitted for training as nurses and that, too, is important. The working of the shift system is another point for consideration. I could mention many other issues but I
1120
will not go into them deeply because other hon. Members wish to take part in the debate.
All these problems, and many others which could be mentioned, add up to the biggest total of discontent the nursing profession has had for a very long time. The right hon. Lady was right to say that the responsibility is on all of us to see that these pleas are heard. These are not railway workers, or airline pilots, or sewing machine operatives. For that reason, among others, their pleas ought to be heard, and I earnestly hope that they will be heard.
5.8 p.m.
Mr. Kenneth Lomas: When I entered the Chamber I made two promises to myself. The first was to be brief—a promise I intend to honour. The second was—for a change— not to be political. But the speech of the hon. Lady the Member for Birmingham, Edgbaston (Mrs. Knight) sorely tempts me to break that promise because it seemed to me to accuse hon. Members on this side of the House of not holding an examination into this problem of nurses' pay. That was one. of the most unfair statements which I have ever heard in this House. We have had only three years of the last 20—the three years since 1964—to do that. I hope that it is recognised by the hon. Lady and her hon. Friends that the Government were right in setting up the National Board for Prices and Incomes and certainly right in referring the whole question of the pay of nurses and mid-wives to the Board for the Report— Report No. 60—which the Board has now presented.
But I promise to be brief, and I will therefore come to the points which I want to raise. I am sure that the House agrees that the speech of my hon. Friend the Member for Motherwell (Mr. Lawson) needs to be read in depth. It showed that he has given very careful consideration to the whole of the Report. I hope that he will understand if I do not touch on the points which he raised but deal with other aspects of the Report. Before coming into the House, for 10 years I was an employee in the Health Service, and I am a Member of Parliament sponsored by the National Union of Public Employees which, I remind my right hon. Friend the Member for

1121
Lanarkshire, North (Miss Herbison) also represents nurses. It is not only C.O.H.S.E. who recruit nurses. The National Union of Public Employees has a very large number of nurses in its ranks.
It is fair to say that much of the Board's Report on the question of hospital efficiency and productivity confirms the view which my union and I have held for some time about the need to improve the quality of the hospital service by raising the level of management efficiency and, of staff productivity. Paragraph 157 of Report No. 60 says:
"We think that there is a diffusion of authority and a fragmented system of management which makes it difficult to increase efficiency in the hospital."
That paragraph goes on to
"…suggest that in the long term the present system might give way to a single tier system in which authority and management functions would be concentrated in a small number of Area Health Boards or similar bodies."
It might be said that matters like this should be left until the Minister has produced his Green Paper and the matter has been argued and discussed. But the Board went into this matter very thoroughly and came up with ideas which conform very much to those which my union has expressed on many occasions.
We have taken the view that area health boards might well have similar boundaries to the revised local authority boundaries which might be recommended by the Royal Commission on Local Government. Such area boards could integrate the three existing wings of the National Health Service; the hospital service, the local authority service and the executive council service. The sooner we get everything under one umbrella, the better the Health Service will be in every possible respect. It will be possible, once we have done that, to create and be responsible for an occupational Health Service which is long overdue.
In paragraph 158 the Board points out that:
"Immediate steps are needed and are possible to increase efficiency. Within the hospitals there are great differences in efficiency …".
The Report points out that these differences in efficiency occur
1122
"… whether this is considered in terms of the use of available staff, unit costs, or ward routine generally."
These views reiterate what was said by the Board in Report No. 29, which was concerned with manual workers in the Health Service. They underline the fact that this matter is of consequence not only to nurses and midwives but to the whole of the Service and that the matter must be looked at in that context.
In this light we must try to understand that if the efficiency of the nursing services is to be improved, there must be an opportunity to plan and implement changes in working practices which could be reflected in terms of pay and conditions. This is exactly what the Board said when it referred to ancillary workers in Report No. 29. I hope that we will see these recommendations implemented to that it will be possible to introduce work study and incentive payments schemes and productivity bargaining.
For a considerable time my union has been raising these matters and has been trying to make hospital managements conscious of the need to raise productivity and efficiency. However, the process has been slow and difficult and a great deal more pressure is needed at Government level if hospital management committees and regional hospital boards are to understand how imperative it is to achieve our main objective of linking improved pay with improved productivity.
There has been criticism of the pay awards suggested by the Board. We are, of course, never satisfied with what nurses get because they perform a service which cannot be measured in £ s. d. In view of the general economic condition of the country, my union believes that the award is about as fair as one could expect in present conditions. We welcome the increase from £50 to £100 in the mental level for all grades in pyschiatric hospitals, as well as the payment, for the first time, of £100 as an allowance to all grades in geriatric and long-stay hospitals.. This is a welcome decision, which is long overdue. We also welcome the recommendations for extending overtime payments to all grades in psychiatric hospitals up to and including the level of ward sister and charge nurse.
However, the two major issues in Report No. 60 which fall short of the ex-pectations of my union are those which

1123
reject the claims made by the unions for a shorter working week and for the general application of overtime pay to all grades of nurses. There is no doubt that nurses work a longer week than any other staff inside the hospital service. While recognising this, the Board says that the working week of nurses is shorter than that of some occupations outside the Service. Unfortunately the Board does not substantiate that claim.
It is recognised that the vast majority of workers today enjoy a basic 40-hour week, and not the 42-hour week of the nurses. Apart from the injustice of nurses working different hours from other hospital workers inside the same institutionalised unit, there is an element of unfairness in this. It is fatuous to say that because a small minority of workers outside hospitals still work more than 40 hours as a basic working week—I grant that that applies in a few instances, such as in catering and agriculture—nurses should be deprived of what is an almost universally accepted right, and I hope that the Government will consider the matter further.
On the question of overtime, the Board says that a recent Ministry of Health survey showed that little overtime was being worked at present in general hospitals and that this indicated that there was no general staff shortage. In consequence, it recommends against the introduction of overtime pay. This is a peculiar argument, because if no overtime is being worked, the concession of making payments for overtime could be introduced without involving the Service in any significant increased cost. It is a harsh message to tell nurses that they must establish a general staff shortage before they can be paid for the overtime they are working. This is an Alice in Wonderland attitude which must be changed. Overtime is a very personal thing to the individual and for nurses to be treated differently from virtually every other grade in the hospital is a serious anomaly which must be put right.
The recommendations of the Board on payments for night and weekend work appear in paragraph 160 (iii) and are an improvement on the present position. However, they fall far short of the provisions that are usually made for workers who are required to be on duty
1124
at the most inconvenient hours. For example, ancillary grades working in the same hospital as nurses receive time and a quarter for night duty whereas nurses get time and one tenth. For Saturday afternoon duty, ancillary grades receive time and a half while nurses get time and a quarter. For Sundays, ancillary grades get double time while nurses get time and a quarter. This division of payment and division of staff does not create the harmonious hospital service we want, and the Government must look at it.
In the general sense, the Board's recommendations tend to undermine the existing position in the hospital service, since the large body of workers on duty at night and weekends are nurses and ancillary staffs and, in particular instances, the premium payments proposed are less favourable than those already applying to nursing staff on special duty allowance arrangements.
An interesting comment in paragraph 54 of the Report is that hospitals are forced to use agency nurses to fill the gaps left by the shortage of staff nurses. The Board says that more than 1,300 agency nurses were employed in hospitals in July, 1967—most of them in the London area. My union has continually complained about the practice of hospitals employing agency staff, not only in the nursing but in the domestic, professional and technical grades. It has a very serious effect on staff morale when it is known that agency nurses are being paid much more than the hospital nurses. That seems to be quite wrong. Equally, it tends to give a false picture of genuine staff shortages, which can only be remedied in the true sense by improving the pay and conditions of those who work in the hospital services.
I welcome the Report. It has some faults, but much of what it says is good. The Government intend to act on many of the recommendations, and we should indeed be glad that the Government referred the whole question to the Board. The Report calls for action, and the action must be taken in a fairly short space of time, because we have a great problem in making sure that we hold our nursing staff, improve the quality, and get the numbers that are so badly needed.

1125
One fact must be clearly understood by nurses and by anyone else in the National Health Service. The advances that have been recommended by the Prices and Incomes Board have not been handed to the nursing profession, or to the ancil-laries or to anyone else on a plate. They are the direct result of negotiations that have taken place by the trade unions, and of the pressures that have been brought to bear on management and the Government by the unions in order to persuade them that these things should be very carefully considered.
The lesson that the nurses, above all, should take to heart is that they must no longer rely upon the sympathy and the understanding of the general public. They must realise that if they are to make progress they must unite in a militant organisation that is recognised and one that can push their claims straight to Government level and argue the case forcefully on their behalf. If the nurses want to see an improvement in their pay and conditions, and if they want to go from strength to strength, my advice is. that their best course of action is to join a union, and in particular my union—the National Union of Public Employees.
5.24 p.m.
Mr. Cordon Campbell: I congratulate the hon. Member for Motherwell (Mr. Lawson) on his success in the Ballot and on having selected this subject for two main reasons. First, the question of nurses' pay is very topical, in view of the recent Report of the Prices and Incomes Board, which has made an examination of the whole structure of the professions involved, and, secondly, because these professions are an essential part of our country's services for healing and the care of the sick.
I do not have any close connection with our medical services: my experience is mainly having spent a year as a patient in a well-known teaching hospital at the end of the war. That inspired in me a great admiration for the nursing profession, as I think it would in anyone who had a similar experience. It is clear that nursing is a vocation and a profession with high standards and fine traditions, and when pay and conditions are being considered we must be careful to preserve these.
1126
I intend to raise two main points. First, the position of qualified tutors has already been raised and in the course of my remarks I shall wish to say more on that subject, especially because the Report draws attention to some of the deficiencies in the present system but does little towards remedying them. My other point will relate to gradings, and to the salary ceiling that is proposed. I shall seek information from the Ministers concerned about their plans for grading, and I shall also wish to query the salary ceiling.
Nurse tutors have to undergo an arduous two-year course after some years of previous training. They then have the responsibility of teaching student and pupil nurses. Upon their teaching will depend the flow of large numbers of trained nurses, and on them also will depend the interest of those nurses in their profession, and their knowledge and efficiency.
In page 44 of its Report, the Board says:
"Our main conclusion on training was that a high priority should be given to setting up larger training schools, independent of the nursing management of particular hospitals. This would ensure both better use of tutorial staff, and a better organised and more worthwhile training programme for student and pupil nurses."
The Board clearly regards training as important. It has drawn attention to some of the deficiencies, but says nothing to encourage those who are already teachers and those planning to be tutors.
Appendix XI, on page 66, proposes that for salary the tutor should be in Grade 7 and the principal tutor in Grade 8. That clearly does not put them high enough in relation to other categories. There is already a tendency for potential tutors and registered tutors to go into administrative posts, where their pay is better. That tendency is likely to get worse if these recommendations are followed. I think it was the Nursing Times of 21st June which gave an example of 96 tutors who recently left teaching in schools of nursing. It was found that 90 of them are now receiving a salary greater than that of a principal tutor, to which position they would otherwise have expected to graduate.
There is, therefore, this financial temptation to move into administrative or

1127
other jobs. The Report of the Prices and Incomes Board admits that more registered tutors are needed. I hope that while the Ministers will find that parts of the Report can be accepted, they will very seriously examine the teaching side, and the position of nurse tutors and principal tutors, because these proposals will do nothing to help fill the gaps that are there already or deal with a situation that is likely to grow worse.
My second point relates to grading. If the Report of the Salmon Committee is implemented on 1st January, 1969, certain questions arise. Will the nurses in hospitals be allocated to the various grades suggested in the Report? Will hospital staffs be reorganised into these grades? I seek information because it is not clear to me whether the Government will encourage this.
I agree with those who have said that a salary ceiling of less than £3,000 for the very highest post in the profession is the wrong way to deal with this matter. I hope that this will be re-considered, because those who occupy these very few responsible posts at the top of the profession carry very great responsibilities. It will not encourage an intake of responsible people into the profession if a ceiling of this kind is imposed. Not only that, but the ceiling at the top governs the salaries of all those below. I hope that the Government will not follow this recommendation and will discard the proposal to proceed by way of setting an inadequate and unambitious ceiling.
I have kept to these two points, which I think are most important. There are many other things that I and others could say about the Report. I hope that the responsible Ministers will take special account of these two points.
5.31 p.m.
Mr. William Hamilton: The whole House and the country owes my hon. Friend the Member for Mother-well (Mr. Lawson) a deep debt of gratitude for giving us an all too infrequent opportunity to discuss what I think is the noblest profession in the world. I say that partly because I married one member of the profession and produced another. Therefore, I have always had an interest in the profession, partly from the materialistic point of view, but also
1128
because I have always felt that it was, in addition to being the most noble profession, the most grossly exploited one.
The debate has spent a disproportionate amount of time on highlighting the shortcomings of the Report, the anomalies and the injustices. It is right to put on record what the recommendations will cost when implemented. Paragraph 143 gives the figures—£201 million for the United Kingdom hospital service, £33·5 million in local authority services; the 9 per cent. increase will amount to £17 million; the overtime in the two stages together will account for over £14 million. So there are substantial increases.
When the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd) was Chancellor and sought to impose a prices and incomes policy, he selected the nurses for a freeze. We fought this in the House. The right hon. and learned Gentleman said, "Whatever happens to other sections of the community, the nurses shall get nothing". I remember appearing on the platform with the hon. Member for Fife, East (Sir J. Gilmour). The nurses were more militant then than they ever were before and are ever likely to be in the future, as a direct result of the attitude of the then Conservative Government. We should get this problem into some kind of perspective.
The Report can be criticised to some degree in that it pays rather too much attention to the numerical quantity of nurses that we require, rather than to the quality of nurses. Since the National Health Service was inaugurated, there have been enormous developments in medical science and knowledge. This must mean an increasingly high quality of nursing labour in the hospital service. This highlights a problem which has quite properly been emphasised in the debate, namely, the need to increase and improve the quality of nursing education and to ensure an adequate supply of highly-qualified teaching staff.
It has been pointed out repeatedly that the Report recommends no incentive to ensure that this will happen. On the contrary, there are some contradictions in it. The Board says that the age of entry should be lowered, but it does not say where we shall get the increasing numbers of tutors to train the increased

1129
number of nurses. If this recommendation is accepted, the position qua training will be worse.
The second point concerns the differentials, a point which has been made ad nauseam. In a profession which is basically female in content, it is of crucial importance that there should be an extremely attractive career structure. This is much more important in a predominantly female profession than it is in a predominantly male profession. I agree 100 per cent. with the staff side that there ought to be a sufficiently high top salary to allow for a proper career scale below it. A group matron, who will be called the Group Nursing Officer Grade 10 under the new structure, and who could be responsible for 10 to 15 hospitals, with, perhaps 2,500 to 3,000 patients, plus hundreds of staff, will get less than £3,000 a year. It is outrageous that this has lasted so long, because this is what is to be, not what is. As there are 200 grades below that, this is not a career structure.
The facts and figures now coming out under the Companies Act show that top industrialists are getting £20,000, £30,000, £40,000 to £50,000 a year. A good professional footballer gets more than two or three times what a matron of a group of hospitals will get. The B.O.A.C. pilots have been mentioned. They are asking for an increase of £4,000 to £5,000 a year on top of the present £6,000 to £7,000 a year. The argument is that the safety of hundreds of lives is in their hands day after day. What do we think a matron has in her charge? If a B.O.A.C. pilot is striking for that kind of salary, how much more so have these people the right to be militant about their position?
The Report speaks of the increasing importance which must be attached in the hospital service to the employment of more and more part-timers. Much of the wastage of nurses, though a smaller proportion than many people think is due to nurses getting married and leaving. Often they want to return. I have personal experience of this from my own wife and daughter. Nurses trying to get back into hospitals just cannot get the kind of hours that suit them domestically.
The days have gone when the nursing profession was manned by spinsters and
1130
people who had missed out for one reason or another. It is a profession which will be manned by people who are married, who have brought their families up, and who want to give service to the community. This is a vast untapped source of public service which we should strain every nerve to bring back. Hospital management must be much more flexible. Instructions should go out to hospitals to be more flexible in producing sufficiently attractive terms for these people to come back.
The Prices and Incomes Board and my hon. Friend the Member for Mother-well have done an extremely good service in focusing public atention on a highly admired profession, which gets more praise than any other profession. We give it everything but cash.
5.40 p.m.
Dame Irene Ward: Like every hon. Member in the House, I am grateful to the hon. Member for Mother-well (Mr. Lawson) for instituting this very important debate. I can hardly remember a debate dealing with a tremendous number of detailed matters concerned with the profession in which there has been so much unanimity on both sides of the House and so much emphasis on what is required to move forward into modern life with our nursing services. I imagine that the Ministers concerned will also be extremely gratified that they have so much material which is in harmony on which to work when they can find time to get down to the new organisation.
I wish to make an observation about productivity in relation to prices and incomes and the nursing profession. Having fairly recently spent some months in hospital, I think it hardly possible to talk about increased productivity in relation to the nursing profession because those engaged in the profession have not a single section of unoccupied time. What worried me when I was in hospital was the calls which the matron, doctors, and sisters had to make on the nursing profession, very often when the nurses were not in a fit state of health to offer the work they were required to do. The way in which it was done, their cheerfulness when they ought to have been in bed being nursed rather than nursing patients, made one wonder whether in all this general discussion any emphasis should be laid on increased productivity.

1131
I am sure that in hospital management there is room for better administration, but there is very little room indeed for increased productivity in the nursing profession. I should not like to think that all the betterments required in the nursing service would have to depend on increased productivity as laid down by the Prices and Incomes Board, because it would be quite impossible and impracticable in that case to achieve them.
All the main points have been adequately covered and many hon. Members have spoken from personal experience. I do not wish to waste the time of the House re-emphasising those points. It causes grave anxiety to me and, I am sure, to many hon. Members, that the Prices and Incomes Board, which is well geared to certain jobs it has to do and certain investigations it has to make within a sphere in which it is competent, should assure that it knows very much about the grass roots of hospital administration. Someone has to say this. I do not want always to be put into the position of having to criticise those who are trying to carry out very difficult jobs for the nation, but I do not think the Prices and Incomes Board, as my right hon. Friend the Member for Reigate (Sir J. Vaughan-Morgan) brought out so well, was competent to make some of its observations.
Many of the observations made by the Board were just plain stupid. The Board did not have the knowledge or experience to make observations. I hope that in the use made of the Prices and Incomes Board we shall not have repetitions of very glorious and competent people thinking that they can make observations which the House has to follow on all sorts of professions and industries for which they have not the experience to offer any adequate opinion. I happen to have the privilege of being a vice-president—and a president in my region —of the Royal College of Nursing. I know a great deal of the way in which it has tried to work, what it requires and thinks necessary to establish a first-class nursing service, which it has tried to do throughout the years—not always with the support which it ought to have received from any Government.
I do not think my Government paid nearly enough attention to what was said
1132
by the professional nursing organisation. I am always a little chary in talking about Whitley Councils because I do not know enough about these matters, but we should remember when we talk about what goes on in Whitley Councils that the management side take their directive from the Minister. If one has read, as I have, a great deal of the evidence and discussions between the management side and the staff side and those detailed to speak for the staff side in the nursing profession, one knows that it is usual for Ministers—Conservative as well as Socialist— to adopt a very bland expression in answering Questions and debates in the House. I have had a lot of experience with my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell). We did not see eye-to-eye and I do not suppose we ever will, but there is not the slightest doubt that a great many of the difficulties which the nursing profession has experienced since the establishment of the Health Service have been due to instructions given by or at Ministerial level to the management side.
I am not certain that the management side of the Whitley Council is really competent to adjudicate, advise or direct or stonewall on the requests put forward by the staff side. I do not say that they are not very competent civil servants, but they may not be competent in knowing what is necessary for the nursing profession. Ministers of the Crown never get down to the grass roots when they issue instructions and the management side cannot give them the knowledge. They cannot give anything away unless they have the support of the Minister. I do not believe Ministers, any Ministers, have been as interested in the nursing profession because they knew with what a good section of the community they were working and that they would not have nearly as much political trouble with them as from doctors, dentists and various royal colleges. The management side was given its instructions, and one could never move it.
I hope that the Government will take into account the unanimity of views expressed this afternoon and realise that we want fair and just action. We do not want the Prices and Incomes Board or Ministers behind the scenes giving the Whitley Councils their instructions, which never see the light of day in the

1133
House. The Executive has so much power that back benchers feeling passionately on the matter, as we all do, can hardly break through the sound barrier. Therefore, I hope that the Ministers will find it easy to make their case to the Treasury.
I return to the awful point that one can never argue with the Treasury. I am very pleased that a very nice tribute was paid to the Minister in one of the Sunday newspapers, which said that he really minded about the matter. I am sure that he does, but does the Chancellor of the Exchequer know anything about it? Does he know enough to pay attention to what the Minister of Health tries to get from him for something on which the House feels strongly?
So we return to the old argument that the Executive takes the power, and the Executive here is the Treasury. The Minister, who may be boiling hot inside for all I know, and may disagree with the Prices and Incomes Board, can at any rate give better instructions to the Whitley Council. But he must take directions from the Chancellor.
I hope that the Ministers will take note that the House is unanimous, and if the nurses cannot bring sufficient pressure to bear I hope that both sides of the House will ensure that whatever the Minister thinks right and just is done. I hope that he will not have to back-pedal, but that if he has to do so the House will somehow or other be able to say what it wishes to the Chancellor.
We have had a very interesting debate and I look forward to specific proposals that are practical, fair and just resulting from it for this great profession in which we are all so interested.
5.54 p.m.
Mr. William Molloy: We have just listened to an enjoyable speech by the hon. Member for Tyne-mouth (Dame Irene Ward), but it did not do much to enhance the cause of the nurses. The hon. Lady was greatly in error in trying to lump the Whitley Council system, which may not operate perfectly for the nurses, with other Departments of State. I speak from experience as a former departmental staff side chairman, I could spend a great deal of time telling the House what was wrong with the Whitley Council system but I
1134
do not believe that even under a Tory administration the staff side members of Whitley Councils were such simpering sycophants as the hon. Lady tried to say that they were in taking directions from their Ministers.
I now turn to the debate. I was interested by the comments of the hon. Member for Birmingham, Edgbaston (Mrs. Knight), who made a very vigorous speech on behalf of the nurses. It is a great pity that she was not in the House during the period from 1948 to 1964. For, as she rightly said, for 20 years nothing much was done for the nurses on the question of pay.
Mrs. Knight: What I said was that the Prices and Incomes Board's Report was the first report in depth after a 20-year period. I was not criticising the fact that it was the first. I was saying that after all that waiting it was a disappointing report.
Mr. Molloy: If we go back further than that, the fact that nothing at all was produced is much more disappointing. I was going to say that I hoped that the hon. Lady will show her very vigorous speech to the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd), who did so much to impede, denigrate and down-grade the nursing profession.
I suppose that it is inevitable that in a debate such as this many of the points one would like to raise are already covered, particularly when one speaks late in the debate. Much of what I should like to have said, and perhaps said more forcibly, has been said by other hon. Members on both sides of the House. We are all grateful to my hon. Friend the Member for Motherwell (Mr. Lawson) for providing us with this opportunity to state the case for the nursing profession this afternoon. Because so many specific recommendations have been made, I wish to speak generally on the nursing profession and to try to underline, that, for far too long it has been brutally exploited.
I am sick and tired of people telling me that a girl must have a sense of vocation to be a nurse, and be miserably treated, underpaid, and the subject of very severe discipline; but that a girl does not need a sense of vocation to be a model earning several thousands of pounds a year, to look after horses or to be a kennel maid, with better conditions and

1135
better pay. She must have a sense of vocation only to be a nurse, when she is responsible for making a contribution to people's comfort when they are sick in hospital, and for this she is not expected to have the same kind of remuneration as those who exhibit dresses, look after greyhounds or look after horses. That is the sort of thing that goes on in Great Britain today, and has been going on for the past half century.
To a certain degree I could agree with my hon. Friend the Member for Mother-well when he said that it is necessary to have a higher standard of girl entering the nursing profession. But I take the view that any young girl in the nursing profession today has already achieved a high degree of responsibility to her fellow human beings. I am not particularly concerned with whether she can cube a certain number or whether her syntax is absolutely perfect when she writes. We are reaching a situation in this country where before one is allowed to answer the telephone an employer will want to know whether one has five or six O-level certificates. We are carrying the ridiculous argument of this form of education much too far, though there must at some time be an examination or test, of course. In one part of the Report the Board calls for lowering the age of entry, but it is not prepared to do anything or suggest anything which might enhance the status of the future nurse at the other end of the scale. There is something wrong in its argument.
I do not believe that we should all get young women—it is mainly a profession of young women—to become nurses by trying almost to blackmail them, taking advantage of their conscience, suggesting that because they want to serve the community in that magnificent way there is something not very nice about having a good salary or proper accommodation for so doing. This is what we have done for far too long.
As a qualification for entry into the profession, we want not merely proof by examination of a certain level of intelligence but a combination of level of intelligence with the right personality and sincerity. It would be worth the nation's trouble if we devised a scheme by which a young woman wishing to enter nursing who had not, on the face of it, the neces-
1136
sary number of O-level passes could have a detailed examination of her work at school carried out and a period of interview at which it could be decided whether, notwithstanding her lack of academic qualifications, she nevertheless had the right fibre, so to speak, to make a nurse. An essential qualification for a good nurse is not merely academic success but a well-above-average love for one's fellows. This is most important, but it is something which, as I say, we have cashed in on in the past.
I deplore the attitude of mind which suggests that the standard of remuneration for nurses does not matter. The blunt truth is that, at all levels in the profession, from trainee nurse right through to matron, nurses are underpaid. The profession is underpaid because society has taken advantage of the fact that the profession is the very last one to indulge in any sort of industrial action. Society has in the past taken a mean attitude.
I have already emphasised that we have our priorities wrong here. This is not my right hon. Friend's fault. I am sure that he will agree that, if it only were possible—this is what we must work for —it would be much better both from the point of view of the State and from the point of view of nurses' remuneration if a nurse in hospital were looked upon as just as important a person as someone exhibiting fur coats or silk gowns in what I understand are called model houses.
Until we face the realities of the situation, we shall get nowhere. One hon. Member who spoke earlier—I am sorry he is not here now—described how he arrived at the frontier of understanding all that was involved in being a nurse only when he was a patient. It almost came to that. This happens far too often. People are not particularly interested in the nursing profession until the moment comes when a loved one or someone they know intimately is taken to hospital after being in an accident or being struck down by an awful disease. From that moment on, people's views of the nursing profession is elevated 1,000 per cent. In such circumstances, people say not merely that nurses are worth their weight in gold but they should be paid their weight in gold. But then, after the nurses and doctors have done their work and the loved one is restored

1137
to health at home, the great admiration and respect for the nursing profession seems to slip away.
This debate today has reminded us that we must not concern ourselves only on special occasions with the status of the nursing profession. Not just when disaster befalls someone whom we love, a member of the family or someone whom we know well, but at all times we must concern ourselves with the work and status of the profession, one of the most poorly paid professions in this country.
I have heard it said that in addition to their salary nurses receive lots of odds and ends from charitable institutions and other forms of charitable subsidy. It is a fine thing, for instance, that people in the theatrical profession and the managements of theatres help whenever they can by providing tickets for young nurses to go to the theatre and other shows. That is good and to be applauded, but what is wrong is that such generosity is used sometimes as an argument for asserting that nurses should not have better pay.
I know that other right hon. and hon. Members wish to speak, apart from the two Front Bench speakers, so I shall curtail savagely other parts of my speech. There are, however, one or two other matters which I wish to raise. I have tried to find a reference to the question of discipline in the Report of the Prices and Incomes Board, but I have not come across it yet, though it may well be there. I welcome the transformation which is taking place in many hospitals where there is now a more intelligent form of discipline. This is coming about because of the new attitude taken especially by some of our brilliant younger matrons. The concept of nursing as a form of military profession seems to be passing, and this is all to the good. However, the improvement is by no means general, and it should be encouraged wherever possible.
In a well-known teaching hospital not 100 miles from here, which is matroned, if I may use that term, by an excellent young matron, the staff not only admire their matron but they have a love for her because of the way in which she concerns herself to turn them out as first-class nurses while at the same time not making them subject to a hide-bound and
1138
ridiculous system of discipline. This is another aspect of progress which ought to be fostered.
All the young people beginning in this magnificent profession are equivalent in status to other students. We hear protests today from students in our universities who want more say in the way they are managed and their universities are run. There is something to be said for taking nurses more into consideration when the management of their profession is discussed. I do not mean that nurses should say how a hospital ought to be run—that would be absurd—but I believe that we should take cognisance in depth of the views of nurses, not just through their trade unions or through the Whitley Council but, perhaps, through groups of nurses themselves throughout the country. This would be a worth-while exercise, an exercise not merely for the benefit of the profession itself but for the benefit of the whole country.
The debate has been excellent. It has been worth-while not merely for nurses, for staff nurses, for matrons, for district nurses, for the whole body of the nursing profession, but also for the general public. The probability is that at one time or another each of us or someone near us will be in hospital. Therefore, it means that from the debate and the Report will flow an improvement in the status of nurses from the trainee up to the matron, that we shall get a better form of remuneration for nurses and a better organisation for the nursing profession, and what is more, a happier nursing profession, it must follow that these benefits will not stop at the nursing profession but will find expression throughout the population when from time to time people have to go into hospital.
Notwithstanding the Report, I still believe that there is a great deal to be done to uplift the dignity and status of the nursing profession. Even if some of the Report were implemented tomorrow, it is shameful to have to acknowledge that the manner in which we treat our nurses is almost a hypocrisy within our democracy, and something must be done about it. I say to the nurses: "Unite. You have nothing to lose but the meanness accorded to you in your magnificent profession."

1139
I would add that my right hon. Friend the Minister of Health has probably done more in these four years than any of his predecessors in the previous 20, and this is acknowledged in the nursing profession. The tragedy is that if the Minister and the Government had not been concerned about the National Health Service and the nursing profession, things would have gone on as they were before and nothing much would have been said. But my right hon. Friend has done a magnificent job for the nursing profession and opened the eyes of its members to what they can achieve, and through helping them he has even put himself in a position of being attacked, though I know he will not mind that. Many nurses know full well and applaud what he is doing on their behalf.
I hope that the Minister will take the best of the Report and implement it and ignore the worst of it. I am sure that when he applies his nimble mind to the best of it he will make it even better. What he is doing means that we shall live happier and healthier lives, and those who go into hospital will know that they are looked after by a happy and efficient nursing profession acknowledged to be the magnificent profession that it is.
6.14 p.m.
Mr. Edward M. Taylor: A constituent has sent me a letter saying that nurses are notoriously bad at standing up and fighting their own battles. Even if this were true, I think, after listening to the speeches today, particularly the last one, that the nurses can be convinced that if they cannot fight for themselves there are hon. Members on both sides of the House who are glad to do the job for them.
There has been a great amount of criticism of the Prices and Incomes Board's Report. My experience of its Reports is that, while we may disagree violently with the Board's conclusions and say, as my right hon. Friend the Member for Reigate (Sir J. Vaughan-Morgan) said, that some of the conclusions should not be implemented, the fact is that the information given and the lucid way in which complicated questions are presented are admirable in
1140
many cases, such as gas and electricity prices and municipal rents. We have had complicated matters presented in a very fair and balanced way. Where we disagree is on conclusions. I was surprised by the clear statement on page 8 of the Report that recruitment was not a problem in the meantime but would become one because of demographic factors in the near future.
On the question of tutor nurses, the Report has made crystal clear how urgent the problem is and how large it is in schools. It mentions that of the 44,740 students in general training, 19,000, or 44 per cent., were in schools which did not meet the General Nursing Council's recommended ratio. That ratio is not a generous one; it is one tutor to 40 students. The fact that 44 per cent. of students were at schools that did not meet that figure shows how serious the problem is.
The problem was presented in another way by the right hon. Lady the Member for Lanarkshire, North (Miss Herbison), who gave the figures for Scotland of qualified tutors. In respect of the Western region alone we see how serious the position is. The establishment of tutors is 210, but of that number 59 are not there, represented by vacant posts, and 56 are non-certificated teaching staff —not people who are not qualified, but people who do not have the special qualification for teaching. The figures for Scotland as a whole show an establishment of 410 represented by 96 vacancies and 102 full-time non-certificated teachers. So we have a situation in Scotland where about half the establishment is either not there or represented by people who are not fully qualified. We have an alarming situation.
On the subject of the career structure and the salary structure, the hon. Member for Fife, West (Mr. William Hamilton) mentioned the various allowances for special duties—geriatric duties, late duty and so on. I hope that the Government will be fully aware of the anomalies in salaries which are arising as a result of increasing allowances, as a result of raising the basic rate and as a result of not raising the top level. We have the absurd situation that a night sister's salary can be higher than that

1141
of a night superintendent because of special allowances, and a senior enrolled nurse in a geriatric hospital working at weekends can have a salary higher than a fully qualified tutor.
I am not saying that the special allowances are not justified. Of course they are. For working in geriatrics and for late working allowances are justified. But there is a real danger that these special payments will undermine the basic differentials which are at the root of any career structure. This is the danger at present.
I can tell the Minister and, in particular, the Under-Secretary of State for Scotland that hon. Members on both sides of the House were glad to learn that in view of representations made by hon. Members on both sides and the Royal College of Nursing the Minister of Health has given an undertaking that the matter will be reviewed at the end of the year when the salary scales are due to be introduced. What has been said from both sides of the House will have made clear to the Minister that there is a case for such a review for nurse tutors, and I hope that the reconsideration will be carefully done and that the result will be favourable.
6.19 p.m.
Mr. Maurice Macmillan: I join other hon. Members in thanking the hon. Member for Motherwell (Mr. Lawson) for raising this important matter and particularly for raising a United Kingdom subject rather than a national one, though I am happy to see that Scottish Members on both sides of the House were well represented.
The pay of nurses and midwives has been a major problem for successive Governments. My hon. Friend the Member for Tynemouth (Dame Irene Ward) suggested that the Minister was rather too much in control of the management side of the Whitley Council. Perhaps I might suggest that one of the difficulties that successive Governments have faced is the ease with which the Treasury can use nurses' pay as a method of making cuts in Government spending or preventing rises in Government spending. Ministers on both sides have been attacked about this.
This is one of the reasons why it is important that the
1142
"… failure to give sufficient recognition to the higher levels of qualification and skill …"
should not dissuade the Minister from not accepting this part of the Report. The Board indicated that it was necessary to pay market rates for skills in nursing as well as for other professions, but, unfortunately, it did not sustain that principle in its recommendations. That is why the Report has had such a bad reception, not only from the profession, but from both sides of the House. Here I must declare an interest, perhaps not one in a technical sense, but in that I have a natural bias towards the staff side as publisher of the Nursing Times.
I want to make two main points, both of which have been argued in different aspects. The first concerns the differentials; the second concerns the special aspects demonstrated by the position of the sister-tutors and their effect on nursing education. I want to deal with them in relation to the hospital service, the nursing staff and the difficulties which, in some ways, have been slightly exacerbated by some of the provisions of the Report.
The structure of nurses' pay has always had many anomalies. Successive Governments have had difficulty in trying to equate the justice of the case and the needs of recruiting with the demands of the Treasury. The anomalies have been at their worst in two forms of hospital service: first, the specialist nursing and, secondly, the professions ancillary to nursing and other employees of the hospital service, such as pharmacists and physiotherapists. I shall return to this aspect later.
There has always been a great recruiting problem. One of the difficulties which the profession has had to face is that it is not open to it to take industrial action. It cannot strike. It cannot even go slow. Student nurses cannot even change their job without, in effect, leaving the profession and this makes them an obvious target for exploitation by the State and the community as a whole.
The combination of these factors has led the Board in its Report to penalise the top end of the profession. Up to now, the anomalies at the top have had no great result on women staying on or leaving the profession. This is changing and, because the Report creates at the top end more anomalies than it removes,

1143
I suspect that the rate of change and the rate of leaving the profession will accelerate.
The Board suggests raising the floor, and quite rightly, but it has not suggested raising the ceiling. There is a squeeze between Grade 1 and Grade 9, leaving aside Grade 10 for the moment. I need not develop that point, as it has been made clear by other hon. Members. The pressure between the top end of Grade 1 and the bottom end of Grade 9 is particularly great.
I shall not weary the House with percentage figures, but they indicate that the differential between the most highly-paid people in Grade 1 and the most lowly paid in Grade 9 is too small. This has had a consequential effect of squeezing up the differentials in the other grades, particularly reflected in the lack of improvement in the position of sister-tutors, among others, in Grades 6 and 7. This, of course, applies over the whole range, as many hon. Members have argued.
The second aspect turns on the whole question of the position of the chief nursing officer in Grade 10. The Board has failed to comprehend two factors. The first is the nature of the post and the second is the implications that its nature should carry in relation to salary. In effect, the position of chief nursing officer Grade 10 is a "Salmon" creation. It is a new post of a new type and shape. It is not merely an upgrading of existing posts and it is not strictly comparable to any job now existing in the hospital service. It is not comparable entirely, for example, with the job of matron, because it includes, to an extent which the job of matron does not, planning for the future as well as supervising day to day functions in a group of hospitals. The overall responsibility for a group of hospitals is very great. It is not really comparable to any present position and the tendency of the Report to compare it with hospital administrators is a wrong conclusion to draw.
A chief nursing officer will normally be dealing with 1,600 staff and a budget of about £1½ million. I tried to find out what women in comparable jobs in industry are likely to be paid. Messrs. J. Lyons and Company would expect to pay a woman between £4,000 and £5,000 a
1144
year for a job of this magnitude, and I am informed that Messrs. Marks and Spencer, in a relatively small store where the manageress was working as No. 2 to a man, would expect to pay her about £3,000 a year. Even that would be slightly above the top level of a chief nursing officer, who will have far greater responsibilities.
Allied to this is the question of training. The whole future of nursing education and training is likely to be adversely affected by some of the Report's recommendations. First, there is the obvious reason of the too low pay for sister tutors; secondly, there is the less obvious reason that the Report tends to exaggerate the position of a student nurse as simply an employee of the hospital service, as a pair of hands—although it is harder on the legs and feet. This is also bound to affect recruitment, because if student nurses are to be paid as apprentices they must receive the proper education and training, because that is the only factor which makes the low pay for student nurses, or of apprentices in any industry, tolerable.
The requirements of training mean that there is no protection and no protest open to student nurses except that of leaving their profession. Once they are trained, they can get a new job outside the hospital service, and even a new job within the public service without having to go into private nursing. But the student nurse cannot, and it is very small wonder that wastage is now about 36 per cent. This cannot be stopped simply by improving the level of pay of student nurses.
The standard of their training and education, prospects for future pay, the differential for the skilled person and the career structure are far more important to these very young girls than their actual pay at the moment. But if those other factors are not right, they will rightly expect the rate for the job. In other words, they have to be paid in training or in cash, but not by an inadequate mixture of both.
I am not concerned to argue that the reward for the sister tutor is miserable; that is obvious. If it was not obvious before the debate, the remarks of the right hon. Lady the Member for Lanarkshire, North (Miss Herbison) and of my hon. Friend the Member for Moray and

1145
Nairn (Mr. G. Campbell) have made it obvious. We have already seen that there is a drifting away from the hospital service in some of the ancillary professions. Now the tendency to drift away, even to other parts of the public service, is well established.
As my hon. Friend the Member for Birmingham, Edgbaston (Mrs. Knight) said, the sister tutor can get £600 or £700 a year more in a training college than in a hospital, and in these circumstances the factor of vocation and the desire to serve the public is not altered, because a service to education obviously has to be carried out and can be performed as well in a training college as in a hospital.
Even if the Minister cannot accept some of the other arguments put to him, I hope that he will be able to have second thoughts about this aspect of the Report. These factors affect the whole future of the service within the National Health Service, the shortage of nurses and the right of people, even if they are serving their fellow man and even if they have a vocation for it, to be properly paid and to expect proper prospects of promotion and reward.
This brings me to a few general considerations which I want to raise. The objections to the Report which have already been expressed show up certain other parts which can be criticised, although I, too, find a great deal to praise, and the Minister must not think that we do not find anything to praise if we spend the limited time available in what I hope is constructive criticism. Reading through the Report, I felt that at the back of its mind the Board had the thought that one of its most important tasks was the factor of keeping down Health Service costs and that it should do so in a way which would enable the nursing service to carry a disproportionate burden of any economies.
It is a common fallacy of all prices and incomes policies that keeping the rate of pay below the market level automatically reduces or keeps down the labour cost of the operation concerned, regardless of any other considerations, such as efficiency of management, the most efficient use of labour, and so on. The Report ignored far too much the other demands, both inside and outside the public service, on nurses and on other
1146
people with the skills and integrity required for the nursing profession, especially at the top levels. The Report tended to underrate the need for married women at high levels of employment within the Service and, as one hon. Member said, the fact that the youngish, single, dedicated woman just does not exist any more, and it took very little account of the fiscal consequences of all this.
I am sure that hon. Members will appreciate that various adjustments could be made to the tax position of both married and single women which would enable them to discharge their duties at the top level of a profession, such as nursing, far more readily and far more easily. As the Board went wide of simply the pay and conditions of nurses, it could have strayed as far as to consider that type of constructive suggestion.
Perhaps the Board did not need to take all these considerations into account, but the Minister must, for there will otherwise be a great danger that the failure to get pay conditions and structure right at the top will be very damaging not so much now as in the future when the Minister develops his plans for the grouping of hospitals in the development of the district general hospital and the grouping of nurses' training. The more we try to centralise and to economise in administration, whether on the Porritt line or not, the more important it will be to get right the structure of employment within the different sections of a service.
Where, in the past, these things could be dealt with on a relatively small scale, with room for variations to take greater account of factors which did not have a very wide application, what the Minister is now trying to do—and I am not saying that he is wrong—is to establish this type of organisation on a national basis and to carry that through with a unified Ministry with the full sanction of Government behind it.
In these circumstances, it is up to the Minister to pay a little more attention than the Board did to the details and to the possibilities for the future. I am not trying to criticise the Board for having gone well wide of its terms of reference, but merely saying that it ignored some of the factors which the Minister has not

1147
ignored in his Green Paper and of which, I hope, he will take account when he considers the recommendations of the Report.
We have seen all the dangers. We have seen the psychiatric social workers being tempted away from the hospital service to local government service. We have seen radiographers, the hospital pharmacists, the physiotherapists and many more leaving, and now we shall see the sister tutors leaving and perhaps some other high grade people not coming into the service. I will not ask the Minister to accept that all this stems from the sort of approach which the Board tends to take to these problems, for opinions differ on the value of that aproach, and I am perfectly willing for him to disguise the need to pay the market rate if he wishes to quote comparability, which is merely saying the same thing in a different way. But it is essential to have the differential between Grade 1 and Grade 9 wide and every time the level of pay is raised, as the cost of living goes up, to carry the increase through to keep the differential up to Grade 9.
I hope that the Minister will appreciate that by putting up the salary of Grade 10, he would not be creating a major problem for hospital administrators and that if the whole structure started at a higher level, differentials would be much easier to maintain half way down. Above all, I hope that he will bear in mind that the hospital service is competing for highly qualified men and women whose sense of vocation and dedication can be fulfilled outside the service. The future of the service, as well as justice, means that they must be able to get their true reward by still working within it.
6.40 p.m.
The Minister of Health (Mr. Kenneth Robinson): I would like to join with other hon. Members in congratulating my hon. Friend the Member for Motherwell (Mr. Lawson), not only on initiating this debate, but also upon his constructive contribution to it. The debate has been constructive in the way that one would expect of a debate dealing with the affairs of a profession to whom the whole country owes so much. I will do my best, in the time available, to answer some of the
1148
points, but it might be helpful if I say a little about the background of the reference of nurses pay to the Prices and Incomes Board.
In 1965, the Nurses and Midwives Whitley Council reached a settlement, giving increases in pay averaging just over 11 per cent. which were to last for two years, to the end of June 1967. This settlement represented a substantial improvement, and was in marked contrast to the difficulties which have attended nurses' pay claims under the previous Conservative Administration. My hon. Friend the Member for Fife, West (Mr. William Hamilton) and my right hon. Friend the Member for Lanarkshire, North (Miss Herbison) reminded the House that nurses were the first victims of an attempt in 1961 to hold pay increases in the public sector to 2½ per cent.—an action which led to a difficult and acrimonious period of negotiation, culminating in arbitrations in successive years. When the 1965 settlement was due to expire, the staff side of the Whitley Council submitted a general pay claim for very substantial increases, and there were other outstanding claims on overtime, hours of work and special duty payments.
Following a joint recommendation from both sides of the Whitley Council, the Government referred nurses' pay and related conditions of service to the Prices and Incomes Board on 29th June last year. As the House knows, the Report was published on 28th March of this year. The Government accepted that the pay proposals contained were consistent with incomes policy and commended them to the Whitley Council for negotiation. The effect of the recommendations on pay was to give a general salary increase of 9 per cent., with 14 per cent. increases at certain points, to be paid in two stages, 4 per cent. back-dated from October, 1967, and the remainder from 1st January, 1969.
It is only right to make the point that at a time of a nil norm and a 3½ per cent. ceiling, both the Board and the Government were clearly recognising that exceptional treatment for nurses was called for within the terms of an income policy. Taking together the effect of these recommendations and the previous settlement, the pay of nurses will be very substantially higher on 1st January next than it was three years ago. This progress has been

1149
made at a time of considerable economic difficulty. The hon. Member for Farnham (Mr. Maurice Macmillan) suggested that somehow the Report aimed at reducing the costs of the N.H.S. Adding £44 million extra to the salary bill seems an odd way of going about it.
The Whitley Council has already made substantial progress in its discussions. It has reached agreement on the general pay increase. The Board made other recommendations over and above these general increases in salary, and these too, have been engaging the attention of the Whitley Council. The Council has reached agreement, operative from 1st April, on the recommendation of an increase in the psychiatric "lead" for nursing staff engaged in psychiatric nursing and the introduction of a similar geriatric "lead" for those engaged in this type of nursing. I am grateful to my hon. Friend the Member for Huddersfield, West (Mr. Lomas) for mentioning that. There are other recommendations which have been agreed by the Council, including the extension of overtime pay to certain grades and an increase in the annual leave entitlement of certain local authority staff.
There has been considerable criticism from the profession on what the Board said on nursing education. This theme has occurred in a number of speeches on both sides of the House. I cannot accept that the Board took an unfair view of the importance of nurse training, nor that it was not equipped to deal with it. The terms of reference of the Board enabled it to range very widely, and it was asked to look at related conditions as well as pay. The profession, rather too easily, took offence at this. I agree that the Board might have said more about the functions of nurse tutors, but it said a great deal about nursing education and improvements which could be made.
My Department will be discussing these recommendations with the hospital service and the General Nursing Council. I had a meeting recently with representatives of nursing education from the Royal College of Nursing and I believe that what I said then went some way towards relieving some, at any rate, of their anxieties on this score.
There has been criticism of the pay of nurse tutors. Some people have taken the view that their pay ought to be linked
1150
with that of other categories of teachers rather than with other categories of nurses. This was implicit in what my right hon. Friend the Member for Lanarkshire, North and my hon. Friend the Member for Motherwell said. The Whitley Council has always taken the view, which I share, that links with other nursing staff are more important. In recommending the top scale of Grade 7 for the registered nurse tutor, the Board was giving her a larger than average increase.
Taking together the effect of the Salmon Committee's recommendations and the Board's Report, there will be a new career structure with three grades instead of two, and the highest salary open to nurse tutors in the highest posts, in Grade 9, will be 60 per cent. higher than the highest salary provided for principal tutors in the 1965 Whitley Agreement. I am fully conscious of the importance of nurse education and of the scope for improvement. I set out my views on this to hospital authorities last year.
Age of entry is primarily a matter for the General Nursing Council, but for some years I have made no secret of my view that it might be lowered. In this, I part company with my hon. Friend the Member for Motherwell, and I think with the general view of the Royal College of Nursing. This recommendation will be discussed with the General Nursing Council.
The number of qualified teaching staff needs to be increased. As the Board said, their uneven distribution accentuates the problems arising from their general shortage. My Department is studying, with the General Nursing Council and the Royal College, the whole question of the requirements and functions of tutors.
The impression was given in a number of speeches that the number of registered nurse tutors is declining. This is not so. The numbers are increasing slightly. I agree that the average age is higher than we should like to see it. The salary decision follows the general view of the Whitley Council, that comparisons should be with other nurses. One hon. Member gave an example of a nurse tutor who went to a technical college for a considerably higher salary.

1151
All I can say is that if there is this movement, there must be another in the opposite direction, to balance out the numbers, so that we are managing to achieve this small increase, year by year. The introduction of the scheme of nursing administration, recommended by the Salmon Committee should do a great deal to improve the status of senior nurses, as well as providing better management and an improved service. I will not repeat what the hon. Member for Farnham said about the duties of a chief nursing officer, but this is a very significant step forward.
The Salmon Committee recommended that the new structure should be tried out over a period in a series of carefully chosen pilot schemes and then generally introduced over a period of years. Accordingly, 17 hospital groups in England and Wales have so far been selected for pilot schemes and others are under consideration. The selection involved extensive consultations and visiting of the hospitals by a team from my Department to ensure that the group was suitable and that everybody understood the implications. I understand that, in general, this method and procedure has commended itself to the hospital service and the nursing profession, but we are reaching the stage at which wider implementation must be considered.
However, this is not a simple question of introducing new grades. It is a matter of defining new rôles, setting out clear lines of authority and ensuring that communications are free from obstruction. The Prices and Incomes Board recommended that a deadline should be set for the complete implementation of the Salmon recommendations. I am considering this, and I am consulting regional hospital boards on what they would consider practicable.
I turn to the question of pay. There has been considerable debate on the recommended salary of the chief nursing officer. The staff side made a claim for scales of pay with £4,500 as the maximum of the higest scale. The Board considered it and recommended scales with a maximum of £2,950. I am well aware of the disappointment felt in the profession at this recommendation, but the Board took evidence from all the interested parties, and I have no doubt that
1152
the staff side and the professional interests consulted put their point of view very forcefully. The Board reached its conclusions after careful consideration and in the light of the incomes policy, and the Government have no reason to question its conclusions. I think that I am right in saying that the Board did not take evidence from the Department on this point.
My hon. Friend the Member for Motherwell took exception to the increases in board and lodging charges for resident nurses which accompanied the pay increases. I think that there is some misunderstanding here. These increases and their operative date were very clearly recommended by the Board. But this is a question not only of the level of nurses' net pay, but of fairness as between resident and non-resident staff. Board and lodging charges do not represent and never have represented the full cost of providing these services. In other words, resident staff are subsidised. To freeze charges when costs have risen would be to increase the amount of subsidy, so that, in practical terms, resident staff would receive more real benefit than nonresident staff, which I think would be unfair.
There is no doubt that in the past highly subsidised residence has had a depressing effect on remuneration. The Board recognised this and recommended that a start should be made on costing the various services which are provided with a view to a realistic charging system. This will not be easy, but I am considering how the necessary information can be collected.
My hon. Friend the Member for Motherwell suggested that great weight should be given to the Report. The right hon. Member for Reigate (Sir J. Vaughan-Morgan) and the hon. Lady the Member for Tynemouth (Dame Irene Ward) took a rather different view and said that less weight should be given to it. A good deal was made of the alleged shift in the structure of the nursing profession in the hospital service in the direction of the less skilled. But there has been a steady increase in the number of more skilled nursing staff, although admittedly a higher rate of increase in the number of less skilled.
There are two ways of looking at these statistics. One is the way in which my

1153
hon. Friend the Member for Motherwell looked at them. The other is this. We have managed through the roll to tap an extra source of staff who were either unwilling to undergo a three-year training, or who perhaps lacked the necessary educational requirements. Certainly, this is not a development which the Royal College of Nursing regrets. I have here its comments on the Prices and Incomes Board's Report, in which it says that
"This requirement pre-supposed a reduction in the number admitted to training for the Register with a corresponding increase in those admitted to training for the Roll. …. The Council now reaffirms this as a policy objective."
The State enrolled nurse plays a large part and will play an increasingly large part in the work of our hospital service.
My hon. Friend the Member for Fife, West referred to the Board's recommendations relating to part-time staff. The service is already independent to a very appreciable extent on the services of married women working part-time. The importance of this source of recruitment and the need to try to make the best use of the hours that part-timers can offer have been repeatedly drawn to the attention of hospitals, and I have, on a number of occasions, stressed that much of the further increase in nursing staff must come from this source.
Although still more must be done, I think that the performance so far has been quite creditable. The number of part-time nurses has risen from nearly 36,000 to over 48,600—that is, in terms of whole-time equivalents—and part-time midwives by 50 per cent., from 1,200 to 1,800. If one excluded trainee nurses and midwives, almost all of whom are on full-time courses, the proportion of part-time staff becomes nearly one-third of the total nursing staff of our hospitals.
There has been reference to the split shift system. We shall consider this. The suggestion was that it made for bad staff relations without any gain in staff and efficiency. This may often be true, but not invariably. I gather that sometimes nurses find advantage in working split shifts—for example, where a hospital is near a large shopping centre.
Mr. Laurence Pavitt: Would my right hon. Friend consider the
1154
situation in which a nurse starts a split duty at 7.30 in the morning and finishes at 8 p.m. and gets no extra pay for it, whereas stokers in the same hospital do? When he considers the split shift system, will he consider this point?
Mr. Robinson: I am sure that that is a matter which the Whitley Council will look at in the course of its consideration of the outstanding recommendations in the Report.
I can understand that there is some disquiet in the nursing profession. I know that nurses have been disturbed by some passages in the Board's Report, and that they are worried about the status of chief nursing officers and matrons and about standards and quality of training. Where the Salmon management structure is introduced, new rôles must be defined with some changes of attitude. I accept that that in itself tends to lead to uncertainty. But I do not think that we should exaggerate this disquiet or the justification for it. The Salmon Report was a major step forward in the organisation of hospital nursing services. I think that, on the whole, it is generally accepted that my Department acted wisely and with care in the way in which the pilot schemes were introduced.
I can give the assurance that I shall not act hastily on the Board's recommendations on training and management which have disturbed the profession. I do not think that hon. Members can accuse me or my Department of any lack of interest in the well-being of the nursing profession. There will certainly be proper consultation with the service and with the profession about all these recommendations.
I think that we must accept the independent findings of the Board on pay up to 1970. But the staff side will see that it is for the nurses to establish their new position in the structure of management. Their chief nursing officer posts are new, and until they are properly established the staff side perhaps cannot fully develop its arguments. But the Government cannot accept that in the recommendations on pay at the higher levels in the nursing profession at present, and in the context of incomes policy, there are deficiencies in the Board's

1155
Report which need to be rectified. For that reason, I feel unable—
It being Seven o'clock, the Proceedings on the Motion lapsed, pursuant to Standing Order No. 5(6) (Precedence of Government Business).

FINANCE BILL (ALLOCATION OF TIME ON REPORT)
Ordered,
That the Order of the House [18th June] be varied as follows—

1. On Report any Amendment to leave out Clause 50 and any other Amendment to that clause shall be considered before New Clauses.

2. The proceedings on Report shall be completed in four days and shall be brought to a conclusion as follows—

Amendments to Clause 50–11.20 p.m. on the first of those four days.
All remaining proceedings—7 p.m. on the last of those four days.—[Mr. Harold Lever.]

ORDERS OF THE DAY

  FINANCE BILL
  As amended (in the Standing Committee), considered.
  [1ST ALLOTTED DAY]
  Mr. Speaker: I have posted, as is my wont, my provisional selection of Amendments. Under the Motion which the House has just passed, we are taking Clause 50. I have not selected Amendment No. 49 or Amendment No. 176. I shall presently ask the hon. Member for the City of Chester (Mr. Temple) to move his Amendment No. 11.
  May I remind the House of two things. First, the Division will take place not on party lines. It will help the Chair to secure a balanced debate if those who seek to catch my eye and have not already done so will indicate on which side of the argument they have come down.
  The other matter of which I remind the House is that many hon. Members wish to speak. Reasonably brief speeches will help.

  FINANCE BILL

    Clause 50
    PROVISION FOR A NATIONAL LOTTERY
    7.1 p.m.
    Mr. John M. Temple: I beg to move Amendment No. 11, in page 46, line 11, leave out Clause 50.
    Perhaps I have never felt a greater sense of responsibility in this House than I feel this evening, when I move to leave out what The Times, in its leader of 29th June, described as that "curious Clause" under which the Chancellor of the Exchequer seeks powers to divert to the Consolidated Fund any sums made available to him through a national lottery.
    The Government have a knack of doing things at the wrong time and in the the wrong way and, in this case, the wrong thing as well. I say "the wrong time" because this Finance Bill has been only partially discussed. It seems amazing that we are spending valuable time when we should be discussing details of how revenue is raised and distributed on a discussion of this nature. I say "in the

    1157
    wrong way" because I have always understood in Parliament that the right place and the right time to debate principles is on the Second Reading of a Bill.
    Therefore, this debate is to take a decision largely in a vacuum. Any undertakings which may be given tonight by the Treasury Bench cannot in any way tie future Chancellors of the Exchequer. Therefore, our discussions will be relatively valueless, although I know that there is a great deal of interest in the discussion on the Clause concerning a national lottery.
    Tognight, I shall not speak on behalf of any sectional interest. I am a frequent speaker on behalf of local authorities, I have in the past spoken for the Churches and I have also spoken on betting matters. Tonight, however, anything which I say will be entirely my own responsibility and I shall have no regard whatever to any sectional interests.
    Although I should like to be extravagant in my language, I shall endeavour to curb my extravagance and put my arguments in moderate terms. I am glad to see that the Chancellor of the Exchequer is present. The very thought of a State lottery nauseates me, having seen the tatty advertisements for State lotteries in other countries. The last thing that I would wish to do would be to encourage a vast increase in betting. When we discussed the principal legislation on betting and gaming some years ago, so that I could satisfy myself that it was necessary in the interests of the police that betting should be controlled, I went over to the Republic of Ireland and I saw betting shops for myself. With reluctance I voted for them, because it was a method of introducing control. As a result of the introduction of betting shops, however, there has been a vast increase in betting in this country in recent years.
    Loose thinking might lead hon. Members, on both sides, to think that a national lottery would be on the lines of assistance to their own particular charities. I believe that a great many hon. Members may vote for the Clause simply because they think that it will help their own pet research project, hospitals, or, possibly, even the sport in which they are interested. Make no mistake about it, however. The object
    1158
    of the Clause is perfectly clear. Any revenues which come in will go into the Consolidated Fund. Some revenues may go in various directions subsequently as directed under a Bill which is to be brought in later.
    I suggest that this national lottery will be extraordinarily bad business for the Treasury. It is very largely on economic grounds, to say nothing of the moral objections, that I will ask for the rejection of the Clause. It is rather nonsense to bring in Finance Bill experts on both sides this evening when there is so much more intricate legislation to be discussed.
    I would like to deploy the general case as I see it against a national lottery. I shall be brief, because I know of the tremendous interest in the subject on both sides. On Second Reading of the Finance Bill, the Chancellor of the Exchequer said that the Clause would
    "enable hon. Members to decide the case in principle for or against a national lottery." —[OFFICIAL REPORT, 24th April, 1968; Vol. 763, c. 265.]
    I have already said that the right place to decide the principle is in a Bill where one can see exactly where the proceeds of the lottery will go. The principle which has been accepted previously by the House in any connection with a national lottery is that any funds accruing as a result of profits on the lottery should go to specific and specified causes. That is a quite different situation from that which faces the House today.
    The Chancellor was wise enough to give us his thinking on the subject during his Budget statement on 19th March, when he said that his idea was that part of the profit should go into general revenue and part to desirable objects. I can, however, say from experience, having studied local government finance fairly deeply, that the history of assigned or hypothecated revenues is a very bad one. They have always been taken over by the Government. Assigned revenues were got rid of as long ago as 1907. All hon. Members know what happened to the Road Fund. It was first raided, then it disintegrated, again into the hands of the then Chancellor of the Exchequer.
    Therefore, I have absolutely no confidence that whatever undertakings are given by the Treasury Bench, as the years roll on that these revenues will

    1159
    not be grasped by successive Chancellors of the Exchequer. This is, indeed, a very bad moment in time for the House of Commons to be discussing a national lottery. When our country is regarded as the banking centre of the world, even the mere consideration of raising revenue through a national lottery appals me when I think of the £ at its present record low level.
    To turn to the situation overseas as I see it, many hon. Members will have travelled, as I have done, in foreign countries and seen the very tatty posters in post offices, on kiosks and attached to all kinds of other what I might call public places. Just fancy the "Plushy prize of the Prime Minister" being advertised. It is usually the "special prize" of the President of a certain republic. But, thank heavens, our present Prime Minister is not yet president of this country. Just imagine the situation of the "Prize of the Prime Minister". I regard it as rather degrading, whoever is Prime Minister at any particular time.
    That is applicable especially to the present Prime Minister, who described the proposal of one of my right hon. Friends with regard to Premium Bonds, which was a very modest one, as a "squalid raffle". Presumably, the Prime Minister is behind these proposals. They are Finance Bill proposals in the name of the Chancellor of the Exchequer and, presumably, are backed by the Prime Minister. However, those were the views of the right hon. Gentleman comparatively recently.
    I want to make it clear that I am not narrow-minded on these matters. The House will know that, I am sure. I am got against small lotteries for specific causes, nor am I against a local authority lottery if the local authority concerned can promote a Private Bill and get it through Parliament, which is no mean task. In the same way, I hope that other opponents of the scheme will not be narrow-minded in their approach.
    I want now to deploy the general economic case against a national lottery, as I see it. It is a very powerful one. Does the Chancellor of the Exchequer claim that a national lottery will attract money from other forms of gambling, or
    1160
    does he claim that it will attract fresh money? If he claims that it will attract money from other forms of gambling, he will have to satisfy the House that the Revenue will do better out of a national lottery than it does out of the taxing of gambling at present. I think that it is unwise for the right hon. Gentleman to seek to go into the gambling business. He does very well out of the duties on betting and gaming. Would he seek to go into the beer business, because he is getting good revenue from wines and spirits? I hope not.
    If I may give the House one or two rough figures, the betting and gaming duties are estimated in the current year to be likely to bring in about £100 million, so I was informed by the Chancellor of the Exchequer the other day in answer to a Parliamentary Question. Of that sum, £58 million is attributed to the general betting duty and the duties on gaming and gaming machines, and £42 million will come from the pool betting duty.
    On the other hand, if the Chancellor claims that there will be a vast increase in gambling in the country as a result of the promotion of a national lottery, I am dead against any increase being directly promoted by the Government.
    I would, however, claim a certain amount of knowledge of gambling types, and I can give the House a categorical assurance that those who bet on horse and dog racing and on gaming machines will not be interested in taking tickets in a national lottery. The people who will take part in a national lottery are likely to be those who at present spend quite small sums week by week on football pools. At present, the football pools are a magnificent investment for the Chancellor of the Exchequer. The revenue costs him almost nothing to collect. He is getting a duty of 33⅓ per cent., and he does not have to promote any organisation of his own. In addition, the Postmaster-General receives a considerable revenue. It is estimated that the Post Office gets £16 million per annum in respect of postage in connection with pools, and it gets £7 million in the form of poundage. If a national lottery attracted half the money which at present goes to the pools, the Post Office would lose £12 million per annum, and the

    1161
    Chancellor of the Exchequer would lose approximately £20 million per annum in betting duty.
    Taking averages of the possibilities of prize money, expenses and revenue deriving from a national lottery, the Chancellor might get £20 million on the basis of what would be transferred from the football pools. However, I reckon that the expenses of running a national lottery would be of the order of 20 per cent., prizes would take 50 per cent., leaving about 30 per cent. to go into the Consolidated Fund. If there is not to be any additional profit—indeed, there may be a loss—why does the right hon. Gentleman seek to promote a national lottery, with a whole new organisation, when this country is surfeited with organisations of various sorts?
    I am glad to see the Financial Secretary in his place. Normally, he is very frank in his statements from the Treasury Bench, and we appreciate his frankness. On 2nd February last, he gave his thinking on the matter and indicated some of the countries who now run national lotteries. He said:
    "They include Belgium, Ceylon, Costa Rica, Ethiopia, Spain, Gibraltar, Greece, Israel, Portugal, Turkey, Japan, Norway, Rhodesia. Austria, West Germany and Cyprus."
    My comment would be that those are hardly in the first division in the world.
    As regards the expense ratio, again the Financial Secretary was frank. He said that it ranged from 3 per cent. to 40 per cent. [have taken my figure from France's experience, where a national lottery has been run for many years. The expense ratio there is 18 per cent., and that is why I base ours on something of the order of 20 per cent.
    Turning to how much money might be raised, again I quote the Financial Secretary, who gave an indication of the scale of the revenue which might be collected. I can assure hon. Members that it is no Pandora's box. He said:
    "… in Belgium it produces £3 million a year, Sweden, £11 million, Spain £29 million, the Irish Republic £3½ million, Norway £23 million, Australia £8½ million, France £15 million a year."
    He went on:
    "Thus, anyone who supposes that a significant contribution to the economic problems of the country will result from a lottery would,
    1162
    of course, be considerably overstating the case."—[OFFICIAL REPORT, 2nd February, 1968; Vol. 757, c. 1767.]
    Any hon. Member certainly would be. The amount of money will be very small, and about as much as the Tobacco Duty brings in in a week. In fact, I believe that the Italian lottery has lost about £60 million during the last few years.
    That is the rough economic case which I deploy against the proposal, taking into account the experiences of other countries. In addition, there are anxieties among certain communities in this country. My right hon. Friend the Leader of the Opposition has received a letter from Chev. George V. Lepre, who is leader of the Lancashire Maltese Community. Like other national communities in the country, its members are very interested in supporting their own national lotteries and they hope that the Chancellor will be able to give a firm undertaking that, if his proposals are carried, there will be no discrimination against other national lotteries, sales of whose tickets are made here.
    Mr. Speaker, bearing in mind your plea for brevity, I would sum up by saying that, without a very substantial increase in gambling, I can see no extra revenue going to the Chancellor of the Exchequer. Judging by the exchanges which we have had, I think that the Chancellor will be loath to lose any of the present revenue. In other words, everything points to the possibility of a great increase in gambling being encouraged by the Government, which will put an additional strain on their incomes policy.
    I am a justice of the peace and, though I have not sat recently, I have seen in court on frequent occasions that gambling is one cause of the heads of families getting into trouble. There has recently been a vast increase in gambling, and I would be horrified if I thought that the State intended to go into the business and encouraged the heads of families to gamble even more than they do at the moment, thereby bringing ruin and despair to their families.
    Speaking from personal experience, it is clear that sophisticated gamblers will have nothing to do with a national lottery when 50 per cent. of the ticket money is taken in expenses and revenue taxes. They would regard it as an extraordinarily

    1163
    bad bet. Where will the money come from?
    Mr. Joseph Hiley: My views on gambling are probably the same as those of my hon. Friend. But does he not think that it might be a good idea to nationalise gambling, because if it went the same way as the other nationalised industries it would mean that there would be a diminution in the amount of gambling?
    Mr. Temple: That is a point of view. I am not in favour of the State going into the gambling business.
    All this additional gambling on a national lottery will come from the least-well-off members of our society. Already, those people have their incomes very much under pressure, and I should feel very sad if the House tended to give any encouragement to such gamblers to invest more in gambling than they are investing at present.
    I am not against small lotteries, nor am I against lotteries where the good cause concerned can be clearly identified, whether it be a charity or a sporting event. But let us not advertise that our country has sunk so low that our Treasury has to go into the gambling business.
    Mr. Speaker: I remind the House that many hon. Members wish to take part in the debate.
    Mr. James Tinn: I will try to follow that injunction, Mr. Speaker, but since we are following through the arguments which we put forward to a rather smaller House when I introduced my Bill on 2nd February, I feel it necessary, to some extent at least, to follow the same point of view and perhaps to try to take up one or two of what, with all respect to him, I thought were the more glaring inconsistencies in the speech of the hon. Member for the City of Chester (Mr. Temple).
    I want to make it clear that I have never challenged hon. Members who oppose the idea of a national lottery on moral grounds. I respect their convictions and I believe that it would be inappropriate in the course of a short debate to try to influence them against those convictions. I do not disregard them. But those who hold those convictions need to ask themselves two questions:
    1164
    First, if they oppose a national lottery ought they not to advocate the abolition of all forms of gambling? If not, it seems to me wholly unreasonable for them to oppose a particular extension of gambling which would at least have the merit of serving a useful public purpose. Some hon. Members have indicated how small the extension would be.
    Secondly, I want to deal with the point of view often repeated by the hon. Member for Worcestershire, South (Sir G. Nabarro), who opposes not gambling as such but State participation in lotteries on principle. I pay tribute to his consistency, for he opposed Premium Bonds on the same ground and, therefore, he is entitled to take that point of view. But I ask other hon. Members who did not oppose Premium Bonds, and who, in fact, participate in that scheme, whether in all logic they can oppose this extension of a principle which Parliament appears already to have accepted.
    Nor do I challenge those who, like the hon. Member for Wycombe (Mr. John Hall) and my hon. Friend the Member for York (Mr. Alexander W. Lyon), are concerned at the prospect of possibly helping to encourage an easy-come-easy-go materialism. I respect that point of view, too. But I put it to them that unless they are advocating a total abolition of the enormous gambling industry in this country, have they a right to oppose, and can they justify to themselves opposing, this extension of it which I believe would bring much more public good than any marginal increase in the betting tax.
    No doubt all hon. Members over recent weeks have received a considerable flow of correspondence on this subject. But I remind them that the lobby against the idea of a national lottery is very efficiently and effectively organised and that there is no corresponding lobby organised to propagate the idea. I put that point in the hope that hon. Members will bear it in mind when weighing the correspondence which they have received, because opinion polls of the last 20 years, including some very recent polls, have shown a great majority of public opinion, from 75 per cent. to 85 per cent., in favour of the idea of a national lottery.
    We also need to look very seriously at the concern of those who fear that such a lottery would increase the total amount

    1165
    of gambling. I want to give a frank answer to that question. I believe that it would increase it. A certain number of people who ordinarily do not go to the betting shops, or to the gaming houses, would, if the scheme were properly promoted, be induced to buy one or two tickets a week. But to suppose that such a marginal increase would create a new and growing social evil is to lose a sense of perspective and grossly to exaggerate. Much the greater part of the business accruing to a national lottery would come from existing forms of gambling, perhaps particularly from football pools. It has been suggested that sophisticated gamblers would not be interested in a national lottery, but at least those who support football pools would be able to judge for themselves which was the better bet.
    May I put a point to the Chancellor of the Exchequer or the Financial Secretary. If such a lottery were to be developed, I hope, and I think that most hon. Members share my hope, that the administration and the central office would be sited in a development area to help to remedy any marginally adverse effect which there might be on employment because of the successful competition which I envisage with the football pools.
    I draw hon. Members' attention to the proposals in the minds of 50 or so local authorities, led by the Greater London Council and by Edinburgh, to promote local authority lotteries. It might well be that a properly organised national lottery would be a safeguard against a proliferation of local lotteries which might have certain harmful aspects because of the competition which there would be in sales methods if various great cities were endeavouring to promote their own lotteries, none of them perhaps doing very well but all of them possibly driven to indulge in sales promotion methods which we should not welcome.
    May I. turn to other arguments of principle against a national lottery, the first rather powerful. It is that in any mature society the purposes which I have in mind for a national lottery to benefit, such as; medical research, should be served entirely from the national Exchequer as a matter of deliberate choice and not as a matter of chance.
    1166
    7.30 p.m.
    We would all take that view if we had an ideal State. However, society is not organised in that way and until it reaches that stage of maturity—it is hypocritical to pretend that it has; neither the taxpayer nor the Health Service contributor is yet prepared to fork out sufficient money to ensure that all these public services are provided—this argument cannot hold water. As long as there are genuine public needs being unfulfilled by the national Exchequer, we are not entitled to stand pat on this argument. Perhaps one day a mature society will determine its priorities and make a national lottery unnecessary.
    In any event, in the sort of national lottery I envisage, the allocations of profits accruing to the Exchequer would be subject to the same rational criteria as one presumes are applied to the general fund of taxation. Is this quite so rational when we are stocking up nuclear bombs at a rate far faster than we will ever use them? I must not be led astry, but I had to put that question.
    It is argued that a national lottery would present an uncertain revenue. Although that is true, is it truer than any other sort of tax? The Treasury's estimated yield from betting tax has generally exceeded expectation and nobody can dispute the fact that there would be a net increase in the funds available for public purposes as a result of a national lottery.
    One of the oddest arguments against a national lottery is that it would amount to a system of voluntary taxation. I admit that it would, but is there anything wrong with that? When we go to the dentist we do not insist on having our teeth extracted without anaesthetic. If we can have some extra money taken from our pockets a little more painlessly, is there anything wrong with that? It might be argued that doing it the hard way—paying taxes in the conventional sense—builds character. That may be so. But it plays the devil with one's temper.
    It is said that the appeal of a national lottery is directed more towards those with lower incomes, so that their contribution would not merely be a voluntary form of taxation but would be regressive. There is something in that argument, but

    1167
    I ask hon. Members who adduce it, including the hon. Member for the City of Chester, to consider the other side of the coin, which is the sort of people who, I think, they have in mind and the fact that they are already, for social and psychological reasons into which we need not delve, betting to the limit, either by way of football pools or local betting shops.
    I believe that they will simply transfer their bets to the national lottery, which will probably give them better odds as well as the knowledge that when they lose their money it is going to a more useful purpose than into a private individual's pocket, with a small proportion going to the Treasury.
    I was surprised to learn that the Chairman of the National Savings Movement had come out forthrightly, at the movement's recent conference, against the idea of a national lottery. Since the whole movement, which is an important part of the economy and which serves us so well, depends to a considerable extent on the principle of gambling, it seemed that he was not being altogether disinterested in taking that view.
    I remind the hon. Member for Worcestershire, South that taxation on gambling brought in £70 million last year and that the State would be doing a Pontius Pilate act if it disclaimed all responsibility for gambling at a time when its coffers are being extended by that amount.
    It is sometimes argued that a national lottery is a costly way of raising funds, and those who adduce this argument quote foreign lotteries. Unless one is extremely selective in one's choice, the facts do not bear them out. The most expensive is the Maltese lottery, which costs 29 per cent. to collect. Many hon. Members have expressed concern about that country's lottery and have urged that we should do nothing which might harm its development. Only one inconsistency in their argument is their desire to do nothing here that might harm the lottery in Malta.
    We must, at the same time, consider the least expensive lotteries, such as the one in Norway, which costs 1·5 per cent. to collect, and the one in Sweden, the total cost of which, including commission, is 2 per cent. Lest I be accused of
    1168
    selecting my examples, I remind hon. Members that only two of the 19 lotteries quoted in the excellent Report of the Churches Council on Gambling cost more than 20 per cent. to collect.
    Several hon. Members have questioned why we need to go to the trouble of organising a lottery when we could simply increase the betting tax. On the face of it, this is an attractive argument, but presumably the Chancellor already imposes by way of betting taxes as much as he thinks the market can bear. I suggest, therefore, that he can be relied on to increase it if he feels that the yield could be increased without the deterrent effect of the tax going too far.
    As I say, this is a tempting argument, but we must bear in mind that it is the ordinary small punter who, in the long run, must pay when the betting tax is increased, because not always does the bookie suffer. A national lottery would not preclude my right hon. Friend from raising the betting tax. Indeed, the two are not necessarily exclusive and I therefore see no reason why we should turn down an additional source of revenue.
    I hope that the Financial Secretary will give clear intentions about the proportion of the funds raised through a national lottery to be devoted to the general fund. I say that because many hon. Members who would support my proposal are not prepared to support Clause 50 because they believe that all the net profits will go to the Consolidated Fund. This fear deters many people from supporting this concept and I hope that my hon. Friend will repeat the assurances which he has given to me.
    On the contrary, other hon. Members will argue—
    The Financial Secretary to the Treasury (Mr. Harold Lever): Let me clear up this point straight away. The Clause is drafted with this reference to the Consolidated Fund exclusively to bring the Clause within the ambit of the Finance Bill. It has no relation whatever to the ultimate destination of the lottery funds themselves.
    Sir Stephen McAdden: That is what the Clause says.
    Mr. Lever: But, as I have told the House, the reason why the Clause says

    1169
    that is that it had to say it so that we could debate the principle of the Finance Bill.
    Mr. Tinn: I welcome that assurance. I only wish that all hon. Members were present to hear it, because I think that the confusion may have led some hon. Members to stay away who would otherwise have supported the idea.
    The argument that the money should go to the general fund of taxation has an appeal as a matter of logic—I concede that. The proposition is that the moneys should then be distributed amongst the public needs as assessed by the Treasury and the Government. There are two powerful arguments against that view. First, the public resistance to high taxation and the higher contributions for the National Health Service will always mean, I think, that there will be around the existing area of State responsibility a penumbra—an area—of unfulfilled things; of things that ought to be done, but cannot be done because the community is not prepared to pay for them. A national lottery would enable inroads to be made there, and medical research would be prominent in this respect.
    Secondly, a national lottery is a form of voluntary taxation depending on public appeal, and one would be rather out of touch with the public if one fancied that there was a great drawing power in the idea of pouring money into the Exchequer. That idea does not have the appeal that my hon. Friend may imagine it has.
    Assuming, as I hope, that the principle is accepted, I should like the Financial Secretary and the Chancellor of the Exchequer to keep a genuinely open mind on one point on which they indicated that they disagreed when the provisions of my Bill were being discussed. That point is control of a national lottery, if it were set up. They preferred—demanded, rather; insisted upon—much tighter Treasury control, and dismissed the idea of an independent board.
    I find it difficult to understand how the Treasury could organise and operate on a large scale a commercial venture like this, and distinguish on the disbursements side between the conflicting claims of research, and so on, as at present set up. I ask them to consider this point again. After all, the question of Parlia-
    1170
    mentary accountability and Treasury control will be taken care of in the Bill that will be produced if this Clause is agreed to this evening.
    I appeal to the Chancellor of the Exchequer and to the Financial Secretary with all the earnestness I can muster to keep not only an open mind, but a very sympathetic attitude to the particular purpose I envisage as No. 1 priority for the profits, or a very large proportion of them, of such a lottery—medical research. A tremendous amount is waiting to be done. Facilities at some of the great London hospitals are totally inadequate. This is a heavy responsibility on us all. A national lottery would go at least some way towards helping us to meet that responsibility.
    rose—
    Mr. Speaker: Again I would remind the House that many hon. Members wish to be called. If speeches are not reasonably brief, many hon. Members will be disappointed.
    7.45 p.m.
    Mr. Graham Page: When I first looked at the Bill I thought that the House was in some dilemma in having to decide whether to vote for a national lottery or no lottery at all. Many hon. and right hon. Gentlemen believe that a sweepstake run by a responsible and experienced concern and devoting a percentage of the proceeds to medical research could and would bring a very great benefit to the country. But, as my hon. Friend the Member for City of Chester (Mr. Temple) said, they can see no advantage in a lottery which may be run by civil servants and the proceeds of which may be swallowed up in general revenue.
    I therefore looked again at the Clause, and I found that the first two lines read:
    "If, with a view to raising money to be paid into the Consolidated Fund, arrangements are made …"
    There is nothing in the Clause to say that the gross proceeds are to be paid into the Consolidated Fund, and if any Government like to administer it so that a part of the proceeds are paid into the Consolidated Fund that is entirely in accordance with the Clause.
    Again, there is nothing in the Clause to prevent the sale of the right to run a

    1171
    national sweepstake and to pay the purchase money from that sale into the Consolidated Fund. That would be exactly in the contemplation of the Clause, because it would be an arrangement
    "… with a view to raising money to be paid into the Consolidated Fund …"
    Having used the word "sweepstake", may I make a distinction between a lottery and a sweepstake. A lottery, as I understand it, has direct connection between the drawing of numbers and the winning of prizes, whereas a sweepstake is something where an exciting sporting event intervenes between the drawing of a ticket and the winning of a prize. Again, I see nothing in the Clause to prevent a national sweepstake being run instead of merely a national lottery.
    That distinction is important from the point of view of the success or otherwise of a venture of this sort. A sweepstake provides an opportunity for publicity, for excitement and interest, and for the stimulation of the public to subscribe, whereas a lottery is just pure gambling, which is not so attractive to many people. As has been shown by lotteries which have been run in overseas countries, a lottery palls after a time, whereas a sweepstake sustains interest.
    It follows that if one is having a national sweepstake on a great sporting event, at least part of the proceeds should be devoted to the improvement of that event: the improvement of the ground on which the event may be played or run, the improvement of the players, whether they be human or animal, and generally devoting some of the proceeds to the improvement of that sport.
    Mr. Paul B. Rose: Would not the hon. Member agree that this would be an excellent way of assisting amateur sports clubs, many of which are at present labouring under the twin burdens of gaming tax and S.E.T.?
    Mr. Page: The hon. Member must be telepathic. I was about to say that the full benefit should not go only to the one event but that a small proportion should be allowed for general recreational purposes, and sporting events in general.
    If we assume, for example, that two sweepstakes a year could produce between £30 million and £50 million in the
    1172
    year—and I do not think that I am exaggerating the figure when I take comparisons with other countries—quite a small percentage would suffice to improve the sporting event on which the sweepstake was held and to support general recreational facilities—
    Sir Gerald Nabarro: Gross?
    Mr. Page: Yes.
    Sir G. Nabarro: After expenses or before expenses had been paid?
    Mr. Page: I cannot estimate accurately. I can only take the sort of figures which occur in other countries. I would think that £50 million gross was probably the right figure for, say, the first year. It might build up to something more substantial later.
    The difference between lottery and sweepstake is an important factor to which the Government should give consideration if they are setting up arrangements for this sort of venture. Interest and enjoyment would be sustained by a sweepstake on an event such as the Grand National, Wimbledon, the Test series, or even the lone yachtsmen in a race round the world.
    Secondly, people are concerned when they pay for tickets in a lottery or a sweepstake not only about the prize money, not only about the event, but also about the destination of their money and the cause to which they are contributing. A recent Gallup Poll showed that 8 out of 10 people were in favour of a national sweepstake which would provide money for medical and surgical research. I am sure that the poll would have shown different results if the public had been asked to give their views about contributing towards general taxation—a mere drop in the ocean of general taxation.
    The majority of people draw a very clear distinction between charitable gambling and non-charitable gambling. If someone came up to you, Mr. Deputy Speaker, in the street and asked you to buy a raffle ticket for one of those ghastly cushions, you would hesitate to do so. However, if you are approached to buy a ticket for such a cushion at a church bazaar or other charitable organisation, you would subscribe readily. Your hope to heaven that you will not win the cushion, but you subscribe because it is a good cause.
    Mr. Gwilym Roberts: Does not the hon. Gentleman admit that there is not statistical evidence to suggest that 8 out of 10 would not support a sweepstake, whatever its purpose might be? The millions who invest on the pools each week during the winter season—this is certainly not for charity— seem to suggest that people would invest irrespective of the eventual destination of the money.
    Mr. Page: I am not using statistics. I am using common sense. I have had to deal with raffles and the sort of gambling which I call charitable gambling. The Churches' Council draws a, great distinction between non-charitable and charitable gambling when it says that £1,000 million a year is spent on non-charitable gambling. Many reputable organisations have passed formal resolutions at their annual general meetings in support of a national sweepstake on a good sporting event, providing that the proceeds go to medical research. I cite the National Union of Townswomen's Guilds, the National Federation of Business and Professional Women's Clubs, the National Association of Leagues of Hospital Friends, and many ordinary people in unions, such as the Amalgamated Society of Woodworkers.
    The success of sweepstakes in countries which base them on an event and on a good cause has been proved. The hospital sweep in Eire has raised £68 million for Irish hospitals since the sweepstake started. Two-thirds of that money has been contributed from this country. I was rather shocked when my hon. Friend the Member for the City of Chester asked the Government to give an undertaking to protect our subsidies to Malta. Why should we go on subsidising Malta through a lottery and be denied the right to contribute that sort of money to our own hospitals, which are crying out for contributions to research? It may be said that the funds for research should be provided out of ordinary revenue and that hospitals should not have to rely on gambling. [HON. MEMBERS: "Hear, hear."] I am not so sure about that. Research is a long-term business. Research itself is something of a gamble. It is right that the State should be cautious about investing money in research work. Frequently research fails.
    1174
    Anyhow, however strongly one holds the view that all medical research should be supported' out of ordinary revenue, one is living in cloud-cuckoo-land if one thinks that enough money will ever be contributed by any Government to meet the needs of medical research. Some extraordinary kind of revenue and some extraordinary ear-marking of revenue is needed to meet that now. Hospital endowment funds are dwindling. I understand that they are shortly to be taken over by the Government. What prospects are there for us to prevent the brain drain by continuing the sort of research that teaching hospitals are doing now if their endowment funds are taken from them and if no other source of revenue is provided?
    Mr. Frank Hooley: Is not the hon. Gentleman equally living in cloud-cuckoo-land if he supposes that once the Treasury gets its hands on this sort of revenue it will devote it to medical research?
    Mr. Page: I am coming to that point. I think there is a solution to it. I am precluded from referring to a good many pages of print which appear as an Amendment on the Notice Paper. I will refer the hon. Gentleman to them privately.
    I want to make a third point about the criteria for operating a lottery or a sweepstake. Under the Clause it could be operated either by civil servants in a Government Department or by a private organisation on sale to it by the Government of the right to do so. I would not want to set up some new bureaucracy conducting a national sweepstake where there is existing machinery which could run it efficiently. We do not want the dead hand of nationalisation upon such a live venture as a sweepstake. If—I repeat "if"—a national lottery run by the Treasury were a success, the result might be to take some money away from the pools, and the fear then is that there might be some unemployment on Merseyside. I say "if a national lottery were a success". I cannot think it would be if it were run in a nationalised form.
    Mr. J. T. Price: I want to ask the hon. Gentleman, who is conducting his argument with considerable force and vehemence, who will run

    1175
    the national lottery. I am in a different position than he is, because I am opposed to it. He has referred to it as a national lottery. Who in the name of God is to run it except the Government? It cannot be farmed out to somebody else.
    Mr. Page: I am flattered by the hon. Gentleman; I have made my points and my argument so clearly that he has anticipated my very next sentence. This is where I come to the machinery which I would wish to be established for operating a national sweepstake. If the pools were permitted under licence to run a national sweepstake, this would give stability to employment on Mersey-side. At the moment the pools have to dismiss their employees during the summer months. If they were permitted on tender to pay the Government a sum which would be paid into the Consolidated Fund, in accordance with the Clause, to run a national sweepstake, this would give stability of employment in the pools concerns on Merseyside. There is nothing in the Clause to prevent the seetting-up of the form of national sweepstake which I am convinced is the only form which would be acceptable to the public, namely, that an authority, such as the I.T.A. or other supervisory authority of that sort, should be appointed. It would put the project out to private tender, the tenderer receiving 20 per cent. to 25 per cent. of the proceeds of the lottery and standing the whole expense of it—
    Mr. Russell Kerr: Money for old rope.
    Mr. Page: —his profit being limited to 5 per cent. of the proceeds, and the remainder of the proceeds going as to 35 per cent. or 40 per cent. in prizes and as to 35 to 40 per cent. to medical, surgical and hospital research work to be allotted by the authority—not by the Treasury, but by the authority set up for this specific purpose, to consider how to allot the proceeds to the best form of research. As I read Clause 50 there is nothing to prevent that being done.
    This is the proposition I put before the House. Because I believe the proposition is in accordance with Clause 50, because I believe a vote against Clause 50 would be taken by the public as a vote against
    1176
    all forms of national sweepstake or national lottery, even though the Government gave an undertaking that some of the proceeds would be devoted to medical research, and might make the public think that we have voted against all sweepstakes which might help medical research. It would be tragic if we did not take this opportunity to provide this help for medical research and hospital improvement.
    8.0 p.m.
    Mr. James A. Dunn: The hon. Member for Crosby (Mr. Graham Page) made an interesting proposition for supporting either a sweepstake or a lottery when he referred to some of the problems affecting Mersey-side. One thing he perhaps overlooked was that in the original intentions for a sweepstake or lottery proposed by the hon. Member, and taken up my my hon. Friend the Member for Cleveland (Mr. Tinn), money should be raised for charity. From what I have heard this evening it would appear that some of my hon. Friends would accept that a Chancellor of a Labour Government is more benign and generous than a Chancellor from the Opposition party. Let me make perfectly clear that I treat them with equal distrust when they get hold of money and are about to allocate it.
    Sir G. Nabarro: Withdraw.
    Mr. Dunn: I will not withdraw.
    Sir G. Nabarro: No, I do not mean withdraw that remark. I mean that the Financial Secretary should withdraw.
    Mr. Dunn: Unless we keep a rigid control on how the money is allocated under such schemes as proposed by Clause 50, I am afraid that what the hon. Member for Crosby has said will not happen, will not happen. The hon. Member mentioned sporting events suchas the Wimbledon Tournament. I heard of a Merseyside cricket club getting money for a new toilet facility on its own ground. This was not a facility for the rest of the community. The Treasury would be sending out grant aid from funds provided under Clause 50 which should be allocated on merit alone and not used for such purposes.
    Once we allow Governments to raise revenue in this way there would be no

    1177
    saying how they would finish. Examples, not very good ones, were given by the hon. Member for the City of Chester (Mr. Temple), who asked why the State should not go into the beer trade. But the State is in beer. There are State breweries which are very prosperous. Once the Government intervene in the gambling industry they must be prepared to accept the criticisms which are often justly made of the industry from time to time.
    I am not, in principle, against gambling. I gamble myself. I have a little flutter on the pools. I must be a gambler, because I stood in the General Election to get here. It was a gamble in 1964 and it might be a gamble at some subsequent date. That is a gamble I am willing to take. I generally take the view that while there was a possibility or arranging a Private Member's Bill acceptable to this House for a national lottery or form of lottery or sweepstake, to raise money for charity, it would have had an attraction for people all over the country because they would have been making a donation to the charity and no one would worry that much whether he won or not.
    As soon as the State intervenes, however, everyone wants his pound of flesh. The hon. Member for Worcestershire, South (Sir G. Nabarro) would probably want not only his pound, but his ounce. When the Treasury was running a gamble I would want exact accountability and to know exactly the percentage rate of the prizes. I should be continually asking Questions about what concessions were given to the sellers of tickets and what commission they were paid. I should want to know how it affected unemployment in my constituency because on Merseyside large numbers of our constituents are employed by the two largest pools firms. In my constituency, over 1,000 are employed by those two firms.
    Naturally, with a constituency interest, I would ask these Questions. If we followed the suggestion made by the hon. Member for Crosby, and fanned this out to an independent agency, I should ask the Financial Secretary those Questions, but he would say, "I cannot answer. You must direct the question to the newly-appointed board." Perhaps there are too many boards at the moment without accountability to this House. I admire the work done by a local pools firm, but if it
    1178
    participated in a national board it might not be so forthcoming with information about its performance. That is a fear I have about a national board.
    Under the Bill proposed by my hon. Friend the Member for Cleveland, we could have had a number of people who do a lot of work on behalf of charity acting as trustees and advisers, making appeals in the same way as they do now. I have raised money for charity; I raised £1,000 in one night. I cajoled and begged and dragged money out of people for charity and they did not object. But if I said that the Treasury would provide £2,000 if they provided £1,000 for a charitable function, they would not want to know me, for once the Treasury got the money no one would know where it had gone. The Treasury may allocate certain resources to certain funds, but it would be usurping the responsibilities of those who should be attracting those funds.
    My hon. Friend the Member for Cleveland said that a national opinion poll showed quite clearly that the people would accept a national lottery. I say nothing in contravention of that, but I offer a challenge to him to go to the country and ask: does the nation wish to have a national lottery whose funds should go to the Revenue for purposes which the Treasury should decide? I doubt whether he would get 2 per cent. to support him.
    Mr. H. P. G. Channon: The debate has shown that those of us who have enthusiastically favoured a national lottery from the early stage are beginning to have grave doubts about the scheme put forward by the Government. My vote tonight will be governed largely by what the Government say will be the method of controlling the national lottery we are discussing. Although I am in favour of the principle of a national lottery or sweepstake—I prefer the idea of my hon. Friend the Member for Crosby (Mr. Graham Page)—I am not in favour of a national lottery whereby the revenue goes into the Consolidated Fund and the Treasury decides how it shall be allocated in future.
    My enthusiasm for a national lottery is waning for other reasons. It has been argued persuasively by several hon. Members that there might be a net loss to the Revenue rather than a net gain. I

    1179
    hope that the House will be given the Government's view and impression on this and other arguments. We are in some difficulty tonight in that we are asked to buy a pig in a poke and we do not really know what is proposed. The Financial Secretary must give us more information.
    I should in certain circumstances favour a national lottery. I think that it is probably worth voting for the Clause. I look upon this as, in a sense, a Second Reading debate on a national lottery scheme, although I have grave doubts about the details. The sort of national lottery which I should like to see in this country is one raising large sums of money and run by an independent board—that has high priority—the independent board allocating funds for different causes and charities. Medical and surgical research would obviously have high priority, but it need not be the only consideration. Other charities might be able to put a case to the board. In different years, different charities might benefit, or there might be a scheme under which it would not be different charities benefiting each year but the board would allocate certain proportions of its funds to different charities in different years.
    I should be in favour of that idea if there were an independent board allocating the money. I do not want the Treasury to allocate it. In the case of arts charities, for example, I should not want the Arts Council to allocate the funds. I think of this as a new form of patronage which would be able to disburse funds to deserving charities in this country.
    If the Government's idea is that the moneys would be paid into a fund run by a Treasury-controlled board which would put a certain proportion into general expenditure and pay another proportion to deserving charities, charities which the Treasury thought deserving, that is a non-starter for me. We must have a clear answer from the Government about it.
    Sir G. Nabarro: When my hon. Friend talks about an independent board, does he envisage the board as independent of Parliament?
    Mr. Channon: No. It would not be independent of Parliament, but it should
    1180
    not be run by the Treasury or a Government Department. There would have to be some procedure whereby Parliament had a say in ensuring that the lottery was run in an honourable, honest and efficient manner. However, these are details which could be worked out along the lines suggested by my hon. Friend the Member for Crosby. It could, to use the rather inelegant phrase, be farmed out to a private firm or organisation to run, or it could be run in some other way. For my part, I should not mind about that.
    Sir G. Nabarro: All these are impeccable sentiments which, I am sure, would be supported in all parts of the House, but what concerns me is the extent to which Parliament would control the apportionment of funds. I should want to know whether I could get as much in South Worcestershire as my hon. Friend could get in Southend, East.
    Mr. Channon: Perhaps my hon. Friend will agree that we might have a Select Committee—he might be the chairman of it—or we could take any one of innumerable methods which could be devised. I hope that my hon. Friend, who is opposed to the idea of a national lottery in principle, will at least agree with me that, if one could devise a system generally suitable for a national lottery along the lines I have suggested, it should be possible to work out the details in a manner which would satisfy even him.
    However, I suspect that the Government are putting forward a scheme which is unlikely to be acceptable to many hon. Members, even those who are in favour of a national lottery. A scheme under which the Treasury would be the arbiter and under which a large proportion of the funds raised went into the Consolidated Fund—or any variations on such a scheme—would not be acceptable. Therefore, before I decide to vote on Clause 50 tonight, I shall want a clear answer from the Financial Secretary about the Government's intentions. Is it intended that there should be a board controlled by the Treasury, that board making the allocations, or is it the idea that the board would be completely independent? Second, what proportion of the funds would go to charities and what proportion into the Consolidated Fund?

    1181
    If we have a favourable answer on those matters, I may vote for the Clause. Otherwise, I shall be tempted to vote against it.
    8.15 p.m.
    Mr. Harold Lever: Mr. Speaker invited hon. Members to let him know their position so that an opponent of the Clause might be followed by a supporter. It seemed to me appropriate, having heard neither opponent nor supporter but an open-minded and reasonable approach to the Clause, that it would be suitable if the House heard an equally open-minded and reasonable approach. I thought, therefore, that it would be for the general convenience if I rose at this moment.
    We have no Government view on whether we should or should not have a national lottery. Hence the free vote. The Government think that the House should have an opportunity to express its opinion on the subject so that, if it expressed an opinion in favour of a national lottery, that opinion could have a further opportunity to find expression in the form of a Bill. It does not follow, because the Government give the House this opportunity, that they are in favour of a national lottery. It is a matter for every hon. Member to decide according to his own judgment, conscience and wisdom.
    Mr. Dunn: My hon. Friend the Member for Cleveland (Mr. Tinn) introduced a Private Member's Bill on the subject. During the proceedings on that Bill, the representative of the Treasury—perhaps it was my hon. Friend the Financial Secretary—suggested that it was a matter which should be taken up by the Treasury and brought within a Finance Bill. How does my hon. Friend reconcile that view with his present statement?
    Mr. Lever: There is nothing which the House likes less than hon. Members reading back their own speeches. I try to avoid doing it, although I often have them read back at me by others. In the proceedings on his Bill, I told my hon. Friend the Member for Cleveland (Mr. Tinn) that the Government would be interested to see what view, the House took on it. However, I thought and the Government thought that it would not be right to take the view, if the House expressed a decided majority view on the
    1182
    Private Member's Bill, with all its special provisions, that that should be interpreted as an expression of the general will of the House on the question of a national lottery. I imagine that my hon. Friend would be grateful to the Government for taking that view.
    Our view was that, after the opinion of the House expressed on my hon. Friend's Private Member's Bill, we should, in a more general way and not tied down in the specific fashion indicated in my hon. Friend's Bill, introduce a Clause in the Finance Bill which would give the House an opportunity to decide in a broad context what it felt about a national lottery as such.
    I hope that no one will be misled by the wording of the Clause into supposing that anything else is at issue to-night. All that is at issue tonight is whether, in a general way, hon. Members favour the notion of a national lottery. The Clause was drawn in this fashion so as to bring it within the ambit of the Finance Bill, but even as drawn, as the hon. Member for Crosby (Mr. Graham Page) pointed out, it is merely a form of words which would not inhibit the Government, in drafting a Bill, as to the ultimate destination of the proceeds of the lottery.
    The wording of the Clause is such that, in any case, the terms on which the lottery would be conducted would depend upon a Bill which would have to come before the House independently of the Clause. I hope that no hon. Member supposes that, if the Clause becomes law, it will authorise a lottery in this country. It would do nothing of the kind. There would still have to be an entirely separate Bill which would have to be approved by the House, in which all the conditions and terms on which a national lottery was to be organised would have to be set out. We could approve, amend or reject it as we wished.
    Sir S. McAdden: I accept the hon. Gentleman's good faith, but he gave an undertaking on a previous occasion to give the House an opportunity of deciding on a free vote what it thought of the principle of a national lottery, but it was not necessary, to debate that principle, to insert a Clause in the Finance Bill. Does not inserting such a Clause more

    1183
    or less pledge the Government in favour of it?
    Mr. Lever: Inserting a Clause in the Finance Bill in fulfilment of that undertaking leaves any right hon. or hon. Member on the Government benches free to vote according to his conscience. It is not one of those matters like the Prices and Incomes Bill, where we are all driven into one Lobby. This is a serious issue, but of a type that should be left to the free discretion of all hon. Members. The fact that it is embodied in the Bill need give nobody the impression that the Government are urging individual members of the Government to go into the same Lobby. Some members of the Government, like myself, happen to be in favour of the Clause, but others will no doubt vote against it if they are so minded.
    It should be plain to everybody, first, that it is an absolutely free vote, and, second, that the passing of the Clause commits the House to nothing except a general indication of sympathy for the concept of a national lottery. It does not exclude any degree of hypothecation that the House may see fit to impose in a subsequent Bill, which would be absolutely necessary before any lottery could be undertaken. It does not exclude any particular organisation of the national lottery. Provided that the House expressed a general wish that there should be a national lottery, by passing the Clause, it could be run by the Board of Trade, the Treasury, an independent board, or farmed out, as has been suggested.
    Mr. J. T. Price: In his usual bland fashion, my hon. Friend is trying to get away from the main issue. The Clause would be a very valuable paving provision in the Government's possession if it were embodied in the Bill as a result of tonight's deliberations. It is no use saying that it is only an abstract point to get a sort of straw ballot. I do not accept that. It is an attempt to change policy by proxy.
    Mr. Harold Lever: My hon. Friend is quite wrong. A national lottery will be no more in being if the Clause is passed than if it had not been put before the House. We believe that it is a convenient vehicle for the House to
    1184
    express a general view. Before anything can be done to give effect to that view in detail, so that a national lottery could operate, we should have to introduce an entirely separate Bill which would go through all the normal stages of a Bill— Second Reading, Committee, and Third Reading—and go to the House of Lords.
    Mr. Leo Abse rose—
    Mr. Lever: I normally give way without stint, but I shall continue, because in the special circumstances of this debate most of my speech would otherwise consist of giving way and none of it in explaining my points to the House.
    Mr. Abse: Since my hon. Friend is apparently leaving open the question of where the funds will go, and since some of us believe that Socialism is the language of priorities and that the House should determine where money collected should go, are we to understand that the Government would go so far that they would allow a Bill to go through with hypothecation as part of its principle?
    Mr. Lever: That would have to depend on the terms of the Bill and what the House thought when it came before it.
    I hope that no hon. Member will think that I am guilty of discourtesy if I do not give way again. I should be discourteous to the House if I gave way at this point, more particularly since if hon. Members wait many of their questions will be answered.
    The House should be entirely clear that we are voting in a general way to give guidance to the Government as to whether it is worth while bringing a Bill before the House that would institute a national lottery. The Clause seemed a convenient and economic means of achieving that end.
    rose—
    Mr. Lever: 1 may as well save the energy of hon. Members on both sides of the House now by asking them to retain their places, because I do not intend to give way before completing my speech. Then, if any hon. Member wishes to put a question to me in the familiar form by saying, "Before the hon. Gentleman sits down, …", after I have sat down I shall be very happy to do my best to meet their request.

    1185
    Having disposed of the point that the House would give no licence to start a national lottery by passing the Clause, I wish to make my second point that the view of my right hon. Friend the Chancellor of the Exchequer is that if there is to be a national lottery in all probability it must be a State monopoly. That would have to be decided in a later Bill, assuming that the Clause is passed. My right hon. Friend feels that it would not be desirable to have a great number of competing lotteries, because then we might be open to the charge that we were inaugurating high-pressure salesmanship and encouraging gambling and the like. [An HON. MEMBER: "That is what my hon. Friend is doing."] I am not sure whether my hon. Friend means that I am engaging in high-pressure salesmanship at present.
    The question before the House is whether it wishes in principle to have a national lottery. I am giving hon. Members the guidance that my right hon. Friend's view is that if there is to be one it should be a State monopoly.
    The second question that has troubled some hon. Members concerns the revenue that might be lost to the State, while some hon. Members seem to be troubled that the State might have too much revenue from it. My right hon. Friend's view is that the right course would be to exact a pools betting duty on the lottery, just as such a duty applies to the pools promoters. It is absolutely right that in setting up a national lottery the State should not, in effect, establish unfair competition with very large existing organisations which are subjected to a 33⅓ per cent. pools betting duty.
    Another reason that the duty will have to apply is that it is thought that some people may transfer part of their allegiance—and their cash—from the pools to the national lottery, and if the national lottery were not subjected to the same rate of duty there would be a net loss to the Revenue. Once the Treasury has had its normal pools betting duty that will be an end to the Revenue's claim, in all probability, although I do not want to give a firm commitment. That would be a matter for the House when the Bill is before it.
    For the two reasons I have given, the view now is that the pools betting duty should apply to a national lottery as to
    1186
    any form of pools betting. After all, the pool promoters contribute a great deal. In the Bill we are constantly talking about the geese that lay the golden eggs. I give an assurance that we are very closely concerned with the expectation of life of this goose and, therefore, shall protect it in the manner that I have indicated.
    Who would run the lottery? The House may find it useful if we dispel some of the fantasies that chase around in some hon. Members' heads. The Chancellor's view is that it would probably be best to entrust the day-to-day administration of the lottery to a national lottery board. This will have the function of running the lottery and deciding its management in a semi-independent manner. It would not be subjected to the directions of the Treasury, and it would decide what was to be done with such funds as it might hypothecate for general charitable purposes.
    I cannot tonight go into the details of hypothecation. My hon. Friend the Member for Cleveland asked for an assurance that we should be sympathetic to it. The Chancellor has expressed himself unambiguously as being sympathetic to the notion of hypothecation. In view of what has been heard in the House tonight, if the Clause is passed and a lotteries Bill is brought in, I cannot imagine that 'my right hon. Friend would disregard the widespread view that there ought to be a measure of hypothecation. But it would be done not by the Treasury, I assure the hon. Member for Southend, East (Sir S. McAdden), but by the national lottery board, and the board would be advised by an independent and carefully set-up commission of a kind that we could all agree upon, which would try to find the most appropriate expressions of the hypothecation.
    The kind of things that immediately come to mind are sports and the arts, and there are many other very worthy causes for which there is never enough money and the State, in the nature of things, never provides enough money, and these things always welcome some additional support.
    8.30 p.m.
    I hope that hon. Members who are ready to pounce on the Bill as something from which the Treasury will gain will

    1187
    bear in mind that the main Treasury interest is to ensure that if there is a lottery we get the same rate of duty as from pools, and that we do not exclude the concept of hypothecation and have not the smallest desire to control the direction of the hypothecation. Indeed, it would be embarrassing and improper for the Treasury to take upon itself the invidious task of judging between sports grounds and other objects. It must be done by an independent and reputable advisory commission.
    I have now dealt with hypothecation, and I hope that what I have said is to the satisfaction of those who are interested in the subject.
    If hon. Members want to think in terms of how much the lottery may raise, I have already given some indication and told the House that, in France, Government receipts in 1967 were £70 million, in Spain £41 million, and in Italy £36 million. In some of the smaller countries Governments did not do so well. It will not do to say that only second-league countries operate lotteries. It is a little difficult to speak of Japan, France, West Germany, Greece, Denmark, Belgium, Norway, Italy and Turkey as second league countries. One cannot brush them aside and say that they are second-rate countries.
    Each hon. Member is entitled to his own view on the lottery and whether we should have one. That is a matter for hon. Members. It seems to me a little difficult to see that the lottery, if instituted, will contain any of the dangers that some hon. Members felt were likely, such as a great increase in gambling. The hon. Member for the City of Chester (Mr. Temple) talked about people ruining their lives by gambling. I hardly think that there will be great numbers of suicides lying around with torn-up lottery tickets by the pistols which took them out of the world. I must be honest and say that I have not studied the fatal statistics of lottery ticket buyers in other countries. However, this is a matter for hon. Members to vote upon.
    Although I am speaking from the Dispatch Box I now speak as an individual, and not as a member of the Government, and in this capacity I say that I shall vote for the Clause. I have found myself very much in line with the mind of the hon.
    1188
    Member for Southend, East. We are not buying a pig in a poke. The House will still have to decide in every detail the kind of pig that we are to have before it gets into our pockets.
    I think that the problems of the indepedent board and the fears about Treasury dictation have been adequately dealt with, and I hope that the hon. Member for Southend, East and I may be, in comradely fashion, in the Lobby together. Speaking as an individual Member, I hope that the House will defeat the Amendment and approve the Clause so as to enable the House to examine in detail the prospects of a national lottery.
    Mr. John Tilney: Will the hon. Gentleman make certain that he does not take away the employment of people on Merseyside and give it to the board? He has not said where the board will be established and how it can avoid duplication of the overheads.
    Mr. Lever: I was very sympathetic to the point put by my hon. Friend the Member for Cleveland, who said that the obvious place for establishing the board would be in a development area where it would give much needed employment in a reasonable sort of way.
    Mr. J. J. Mendelson (Henistone): My hon. Friend should not be so lighthearted about people committing suicide. He must be aware that many people, including a considerable number of working people, lose all their wages on Friday evenings. He should not try to ride off on statistics of suicides. The charge against him is that, in general, he is encouraging gambling and lowering the standards of the nation.
    Mr. Lever: My hon. Friend is hardly fair to me in saying that I was laughing at suicides in general. I was laughing at, and still find mildly derisory, the concept of people ruining themselves by gambling on the State lottery and finally killing themselves. That was my only point.
    Mr. Iain Macleod: Like the Financial Secretary to the Treasury, I speak for myself. There is no party issue in this. There is no Whip on this side and I am sure that there is none on the Government side. To many people,

    1189
    this is a moral issue and one must respect that view, but I do not see it in that light. The Government are involved in the betting taxation and in premium bonds, and many hon. Members know, from their constituency experience, of clubs, to which they may be attached for political, sporting, charitable or social reasons, which are largely kept going by one-armed bandits from which the Chancellor rightly takes a rake-off. I cannot feel, therefore, that it is a matter on which it: is necessarily improper for the Government to intervene in this way.
    This sort of proposal has had many parents, the most recent of these being the hon. Member for Cleveland (Mr. Tinn). But in considering an alternative Budget last year—I emphasise that it was last year because of the second of the only two points I want to make—in an article in The Financial Times of 6th April, 1967—and it has been echoed on both sides of the House—I wrote:
    "I turn to a purely personal proposal. … I have always remembered when first, as Minister of Health, I began to go round some of our greatest hospitals being amazed at the excellence of the work and (all too often) the squalor of the surroundings. There have been of course hospital building programmes but there is an enormous amount to be done. It would be pleasant if the State could find all the money needed but every Minister of Health of both political parties knows this to be a pipe dream. I would prefer that money for new hospitals should come from a National Lottery rather than it should not come at all."
    It follows that I am in agreement with Amendment No. 176, which would provide for the money to be devoted to the building or equipment of hospitals and which stands in the name of my hon. Friend the Member for Scarborough and Whitby (Mr. Michael Shaw) but which has not been selected.
    Mr. Hooley: How would the right hon. Gentleman ensure the existence of supplementary funds for medical research and so on? Would not this proposal result in a diminution of the normal funds because the Treasury would obviously take account of the additional source of revenue for hospital building?
    Mr. Macleod: That is obviously the point I am just about to come to. It is a genuine one. One asks whether hypothecation is possible or whether it is an illusion. That is really the point
    1190
    which the hon. Gentleman is on. We all know the fate of the Road Fund, although it is true that, in quite a number of countries, funds from the taxation of the motorists are used particularly for the provision of roads. Once or twice in recent Budgets we have seen what could be called a notional form of hypothecating revenue. The previous Chancellor of the Exchequer, for example, matched, at any rate in his sums, the option mortgage scheme and some of his proposals relating to betting tax, and the present Chancellor put forward a proposal for family allowances which he proposed at the time, although he has wisely dropped the idea, to match by removing the first three days of sickness and unemployment benefit.
    I have little doubt that it can be done, although the danger is that to which the hon. Member for Sheffield, Heeley (Mr. Hooley) has referred—that whatever precautions one takes and however carefully one draws up the scheme for a board, the Treasury will cut down its appropriation by something like the amount by which the board would increase it. This is a problem, but I do not believe that it is insuperable. In terms of what I wrote a year ago, to those who have seen, as I have seen, tarpaulins going on the work of Health Service hospitals because the 5th of April is coming and the money has run out, although not in all circumstances in every year, this is important as a first point, and one cannot be unsympathetic to the idea.
    I make the second point briefly. The Chancellor would be wrong to go ahead with this Clause in this year. The report of the debate will look a little odd tomorrow morning. We are not debating the Guillotine, nor who is responsible for it, but at least it will look odd that this of all Clauses in the Finance Bill, some of which have not been discussed, should be singled out for preferential treatment by the House of Commons.
    It very often happens—and I hope that the Chancellor will pay attention to this—that at a time of weakness in sterling, something which in other circumstances can be quite appropriate can have psychologically exectly the wrong effect. I give the instance of the loan in the autumn of last year from the Swiss banks. We all know what the reason behind that was. It was to show that

    1191
    those banks and this country had confidence in the £, had confidence that it would not be devalued and were prepared to put money in it. But people read that, and in my view rightly and, as events turned out, rightly, exactly the other way round, because they thought that it was very odd that we should be spending our time asking for, or, anyway, accepting, such a very small loan.
    That is why the only other point which I want to put to the Chancellor is this. This proposal is still part of the Budget. As the Financial Secretary has told us, it would need another Bill in due course. We know that sterling at the moment is rocking somewhere along in the bottom and that War Loan is about 45¼. In those circumstances, it would show that the House of Commons had a lack of gravitas to pass a Clause of this nature after a special debate at this time.
    I have said enough to show that, partly because of my own experience, I am by no means unsympathetic to the idea, provided that we know exactly where the money is going and provided that we know, in the instance I have given, that it would be going towards hospital building programmes. But we have had no such assurance, probably rightly, from the Financial Secretary. Secondly, nobody can be happy about the outline he has given of what is in the Chancellor's mind. I cannot help putting it to the Chancellor that this debate, unthinkingly, may well do a lot of harm. I therefore hope that he will take the Clause away and that he will be defeated on it tonight. It may well be that in calmer days an opportunity to put forward something of this nature will arise, but it would be wholly wrong for the House of Commons to pass this new Clause tonight, and I hope that we will not do so.
    8.45 p.m.
    Miss Margaret Herbison: I wish to oppose this Clause as strongly as I can, with no "ifs" or "buts". There have been so many "ifs" and "buts" in speeches this evening. The Financial Secretary tried to describe to us what the Government line was—that if the majority wishes, the Government would bring in a Bill making possible a national lottery. That is the wishy-
    1192
    washiest form of government that I have ever come across. The Government must have some ideas on this. If they are opposed to a national lottery we would never have found this Clause in the Bill. It seems that the intervention of the Minister, far from helping us, has made it more difficult for some of us.
    There were some of us, when we were on the benches opposite, who opposed Premium Bonds very strongly. In the debate on the Queen's Speech I said, and I think that this will be the first time that I have ever repeated a speech that I have made:
    … the Chancellor of the Exchequer made a spectacle of himself when he stood in Trafalgar Square peddling what many of us call raffle tickets."—[OFFICIAL REPORT, 12th November, 1956; Vol. 560, c. 610.]
    For a Labour Chancellor to be even thinking in terms of a national lottery, is a sorry spectacle, and one that makes me very sad. The Government are pandering to a deep-seated malaise, the kind of philosophy that we sometimes describe as "I'm all right Jack", or that which is typified by a desire to get rich by any means but hard work. That seems to be a very wrong thing for our Government to do at this time of serious economic and financial difficulties. It is a philosophy of selfishness, one which we criticised so often when in Opposition, one that was fed and nurtured by almost everything the Tory Government did during those 13 years.
    There was always an appeal to the lowest instincts in our people. Having gone through all those years, our Government are faced with this deep-seated malaise. I had always believed that there was a wide gulf between such a philosophy demonstrated during those years and that for which this Labour movement of ours has always stood. Gambling has become almost a social curse. I am opposing this Clause not on religious grounds, although I could do so, but on what I would call moral and ethical grounds. I have always believed that the Socialist movement, from its inception, was based on moral and ethical principles. If that is the case, through our Government saying quite clearly that should a majority vote for this they are ready to bring in a national lottery, we are departing very greatly from those principles on which our movement was

    1193
    based. My training in this movement taught me that if one was a Socialist one was not a taker; one must always be ready to give. This is the very opposite. We are being asked to support a national lottery.
    Mr. Peter Mahon: Does not my right hon. Friend think that the idea that if we do not have a national lottery we shall not get the hospitals and roads which we need so desperately is repugnant to all of us?
    Miss Herbison: I was coming to that point, but before doing so I wish to give one or two reasons why I consider gambling to be a social curse.
    There has been reference to the number of people who lose their wages gambling at weekends. We all know that far too much money is spent on bingo by people who cannot afford to spend it. In the homes of those people there is sometimes great hardship. I see people passing my home going to bingo centres, and I give myself a shake and say to myself that I should not be over-critical of them because for me a night with a good book or with good music is what I require. But, then, I was lucky in my village in having the chance of a good education and a great deal to fall back on. Because of that, I cannot be over-critical when I see women going to bingo centres. But we must remember that so often money is spent which should not be spent in bingo centres. The same thing applies to many other forms of gambling.
    Mr. Harold Lever: My right hon. Friend is aware that it is not the Government's intention to bring in national bingo and that the hon. Member for the City of Chester (Mr. Temple), who moved the rejection of the Clause, said that he had voted for betting shops but resented a national lottery.
    Miss Herbison: I know only too well that it is not the Government's intention to introduce national bingo. I was dealing with gambling generally and its hold on people. If the Government introduce a national lottery, they are, in effect, saying that there is nothing wrong with extensive gambling and that it is all right to gamble.
    I heard the intervention of my hon. Friend the Member for Cleveland (Mr. Tinn), who is in favour of a national
    1194
    lottery. I respect his wishes. I accept that if the Government do not introduce a national lottery it will do nothing to curb gambling. On the other hand, I take great exception to the Labour Government giving the seal of respectability to gambling in general.
    Mr. Tinn: But can my right hon. Friend square in her conscience the uncomfortable fact that we as a nation are not prepared to find through taxation and other means all the money needed for research and hospitals with the fact that she is prepared to deny this additional means of helping to provide for some of these things?
    Miss Herbison: I do not have to square that fact at all. The things which have been said tonight are a shocking indictment of our country. The right hon. Member for Enfield, West (Mr. Iain Macleod) said that if we do not have a national lottery we must put tarpaulins over hospitals until after 5th April. We have been told that if we do not have a national lottery the medical research which is so essential will not be carried out. What an indictment of a supposedly civilised and Christian people that the only way we will get our hospitals or our medical research is by sinking to get the money from gambling from a national lottery.
    I know that Chancellors of the Exchequer are faced with great difficulty. I do not think that anybody on this side of the House knows more forcibly than I do the difficulties with which the Government are faced. Again, however, if Governments feel that we need the hospitals and the medical research, they should have the guts to say to our people that they will get it in the only fair way possible, and that is by taxation. The suggestion that people want more money to jingle in their pockets and to do what they like with it rather than accept their responsibilities is a philosophy which I do not accept.
    Here we are, a country faced with great economic and financial difficulties, a country that will overcome those difficulties—as the Government are continually telling our people—only if every one of us is willing, in whatever job we do, to give the very best that is in us to raise production. Is not that the appeal which

    1195
    should again be going out from the Government instead of the appeal of getting rich quick for a few people and a great many people spending more than they can possibly afford to spend?
    I should like to see the Government, when they have the time—because our economic and financial problems are the biggest problems at the present time— undertaking some thorough research into why we have so much gambling and trying to find other ways and means of catching the interest of our people, to give them something much more worthwhile than in their lives than attending bingo centres. For all these reasons, I oppose, the Clause as strongly as I can.
    Sir S. McAdden: I think that hon. Members on all sides, no matter what views they hold on this question, will have been deeply moved by the speech of the right hon. Lady the Member for Lanarkshire, North (Miss Herbison). I congratulate her on the way she expressed herself and the views she holds, which I largely share.
    It must, however, be remembered that the supporters of a national lottery have garnered their strength in many fields. They have gone round appealing for medical research for blind babies and pleading their case that the money cannot be raised in any other way than by a national lottery. That is bunkum, and it is time that this House said so. It is possible to produce a public opinion poll which gives a particular figure provided that the poll happens to put the question in a certain way. Public opinion polls of that kind do not influence me.
    We are told by the Financial Secretary that it is necessary for the Clause to be inserted in the Finance Bill, of all Bills, so that the House can express an opinion on this matter. That is bunkum, too. If the Treasury or the Government wanted to obtain an expression of the opinion of the House on the question of a national lottery, they could do what I challenged them to do in Committee— that is, to produce their proposals, to explain what kind of lottery it would be, how often it would be held, what the prizes were to be and how much would go to charity and how much to the State.
    I argued all those things in Committee on an earlier Bill. Instead of resorting
    1196
    to the challenge on which House would have been able to come to a clear decision—in other words, instead of introducing clear-cut proposals setting out the various things which I have mentioned— we have this vague Clause in the Finance Bill that
    "If, with a view to raising money to be paid into the Consolidated Fund, arrangements are made …"
    a national lottery shall be permitted.
    Then we have the Financial Secretary, knowing that the House would wish to be informed of the Government's ideas, giving us the thinking of the Chancellor on the matter. I am not interested in what the Chancellor thinks. I am interested in what he proposes. He is asking the House to give him carte blanche to introduce any kind of national lottery that he likes. This House is to have no control of the distribution of any funds which are raised by it.
    We are told that it is necessary to put this Clause into the Finance Bill. It is not necessary at all. The subject of a national lottery is nothing new. It was discussed by the Royal Commission on Betting, Lotteries and Gaming, 1949-1951, which, in the course of its Report, had something to say about the principles of gambling legislation. Its conclusions were:
    "In the first place, if the State undertakes the provision of gambling facilities with the object, among others, of securing revenue, it is very difficult to avoid giving the impression that the State has an interest in stimulating gambling."
    That is quite clear.
    The Report goes on:
    "Secondly, the provision of gambling facilities is in no sense an essential service, and is in our view inappropriate for inclusion within the sphere of the State's activities."
    I agree entirely, and, at a time when a Budget has been introduced which bears heavily on all sections of the community, when we have one of the most complex Finance Bills ever, and when we cannot afford time to discuss some of the more complex legislation in the Finance Bill, I cannot understand why it is necessary to insert the Clause into the Bill and to devote to it a maximum of four hours and 20 minutes of discussion on the principle of a State lottery. In the eyes of the world, the Government present us as a country which has not got its priorities right.

    1197
    Let me make my position quite clear. I am all in favour of the State using its powers to levy taxation upon such gambling as exists at present and to take away from those who indulge in these unproductive enterprises the opportunity of getting funds which the State can use more properly. That is quite different from the State embarking upon a gambling venture of its own.
    At this point, I want to correct a wrong impression that I may have given last Friday, following which I received a number of calls from representatives of the Press. I said that it is perfectly proper, in my view, for the State to tax gambling, but not to start a venture of its own. I went on to say that I thought that the State should tax the earnings of prostitutes, but should not open State brothels. I want to make it clear that I am in no way in favour of prostitution. I hope that that is sufficient to correct the impression which appears to have beeen gained by some gossip writers in the national Press.
    The Press has not got the basic facts right. A paper which I read regularly, the Daily Express, said at the end of its leading article on Saturday morning that we ought to establish a national lottery to help the needy and the sick. However, that is not what is proposed. We are not being asked to vote on the principle of a national lottery for that purpose. What we are discussing is the setting up of a lottery the proceeds of which will go into the Consolidated Fund.
    We have had soothing words from the Financial Secretary, who has told us, "Do not worry about this. We will have a Board which will sort it all out and, if there is anything left over after the 33⅓per cent. has gone to the Treasury, the Board will decide how to distribute it." That is not good enough, and it is an impertinence for such a proposal to be put before us without the clearest information which this House ought to have before it is asked to come to a decision.
    Obviously, some members of the Government think that a national lottery is necessary, otherwise it would not be in the Finance Bill. In that case, why did they not produce their proposals in such a form that we were capable of reaching an accurate judgment of them?
    1198
    Mr. Speaker, I know that many hon. Members wish to contribute to the debate, so I will not labour the point unduly. I emphasise that there is all the difference in the world between the State taxing activities like gambling and the State starting a gambling venture of its own. If the State is to start a gambling venture of its own, it must be for the purpose of encouraging gambling. It can be for no other reason. It cannot be for the purpose of raising revenue from the existing expenditure on gambling because the existing expenditure on gambling is already taxed, and, at the rate of 33⅓ per cent. on football pools, is producing about £40 million a year.
    The only purpose of this legislation can be to encourage more and more gambling. I hope that the House will throw out the Clause neck and crop.
    Mr. David Weitzman: After some of the recent speeches, I cannot help feeling that we have been listening to a highly emotional outburst. I ask the House to approach the matter in a realistic fashion.
    Many comments have been made about the Chancellor daring to put the Clause into the Bill and about time being wasted in this way. Let us consider what happened. On 2nd February my hon. Friend the Member for Cleveland (Mr. Tinn) introduced a Bill which was given a Second Reading by a proportionately high vote. That Bill was sent to Committee. It was obviously the will of the House that it should be sent to Committee and that it had to be dealt with.
    The Government took the view that they could not agree with the mechanics of the Bill. They adopted what seems to be a very reasonable and sensible attitude to it. They said that the House had pronounced in favour of a Bill dealing with a national lottery and had supported the idea that a national lottery should be instituted in order to achieve certain purposes charitable and otherwise. That had been done on a Friday when a considerable number of hon. Members had not attended.
    Mr. J. T. Price: The majority of hon Members had not attended.
    Mr. Weitzman: A number did not attend, and it was their own fault that they did not attend. The House on that occasion expressed a view and the Government, in my view, rightly, said,"The House having expressed itself in favour of the principle, let us test it with a free vote."
    A number of hon. Members opposite and some of my hon. Friends have raised objections that there is a difference —that the Bill introduced by my hon. Friend the Member for Cleveland dealt with its charitable objects and that this Clause does not. With all respect, that criticism is unrealistic. It has been explained to the House that if we want to test opinion in a Finance Bill it is impossible to do other than introduce a Clause in this way and in an innocuous form. My hon. Friend the Financial Secretary explained in detail what will follow. If the House agrees with the principle of a national lottery, the matter does not end there. There will be a Bill which will set out the constitution of a board and the objects for which the national lottery will be arranged, and there will then be an opportunity for every hon. Member to discuss the national lottery, to go into it in detail, to seek to amend the proposal and to vote against it if he wishes. What can be wrong about that?
    Sir S. McAdden: I am sure that the hon. Member will turn his mind to the question why it was necessary for the opinion of the House to be tested on the Finance Bill.
    Mr. Weitzman: I have explained. I hoped that the hon. Member was listening to what I said. I have endeavoured to explain in words each of four simple letters. It is simple logic. It satisfies me logically, and I had hoped that it would satisfy the hon. Member. I hope that it is appreciated by hon. Members on both sides of the House and that it satisfies them. In my view the Government have acted properly, and the objection to the fact that the Clause does not contain a specific reference to charity or to any other object is not valid.
    I listened with interest to the fine, emotional speech of my right hon. Friend the Member for Lanarkshire, North (Miss Herbison), in which she spoke in high moral terms of the ideals of the Labour
    1200
    Party. But I urge her and others to be realistic because it is too easy to be hypocritical about this matter. Indeed, I regard a lot of the opposition to this proposal as being sheer hypocrisy. It is all very well for hon. Members to be indignant and to say that gambling is wrong and should be morally condemned. If we could start afresh, and say, "There is no gambling in Britain. We will not have gambling because it is morally wrong", we might be able to do something about it. But we have gambling, on a large scale, and Governments have agreed over the years that they should try to enforce a system so that gambling is kept within bounds.
    We should never forget that the State takes an active part in gambling; for example, by way of Premium Bonds. Although we might say that the capital of Premium Bonds is always at the disposal of the investor and that he is merely losing the interest which he might otherwise earn, we must remember that the Premium Bond investor is prepared to gamble because he is forgoing the interest that he might otherwise earn. There is heavy taxation with regard to casinos, racing and gaming machines. The State is already heavily committed. It is no good adopting a high moral attitude about what we in the Labour Party or any other party might do to condemn gambling because it is immoral. The State is not only taking an active part in gaming but is also taking its share of the proceeds.
    Rightly or wrongly, Englishmen like to gamble and that instinct will not be suppressed by legislation. Try as we may, we will not completely suppress it and if we try to legislate to do so we will only drive it underground and encourage criminal activities. Nor should hon. Members talk about what happens in countries which belong to the "second league" because most of them, like France and Belgium, are well respected and have national lotteries with no ill effects.
    I see no reason why the State, which takes its share of gambling proceeds, should not conduct a national lottery so that it benefits from the money that is gambled in this way. The Financial Secretary referred to 33 per cent., and that figure will answer many of the criticisms about the amount of money which

    1201
    the State might lose from its taxation of football pools and so on. As the State takes its share of gambling, it is ridiculous to talk about the deleterious effect that a national lottery might have. If people buy 6d. or Is. tickets in a national lottery, I cannot see how that will drive them to suicide or tremendously increase the amount of the wage packet devoted to gambling. It might be a good deal better if my hon. Friends dealt more critically with the gaming that goes; on at the betting shops and not with what I think is rather an innocuous form of gaming—a national lottery.
    I beg my hon. Friends to be realistic. Do not let us adopt this high moral tone, but rather recognise that we are living in a practical world. As we have this gaming going on, the State ought to get the benefit of it—it should not be left to private individuals, I hope that the House will take a realistic view of the Clause, and support the principle of a national lottery.
    9.15 p.m.
    Mr. W. H. K. Baker: I should like first, humbly to congratulate the right hon. Lady the Member for Lanarkshire, North (Miss Herbison) on what she said, because I agree wholly with at least nine-tenths of it. I believe that where the Conservative Party started to go wrong was when it introduced Premium Bonds, and that it went from bad to worse when it introduced legalised bingo, and the rest. That view I hold most sincerely.
    Very little remark has been made about the position of the churches in the context of the Clause, and I should like to quote the Deliverance which was agreed to by the General Assembly of the Church of Scotland in May of this year. It reads:
    "The General Assembly believe that public lotteries as a means of providing social amenities are both harmful and wasteful and call upon Church members to oppose proposals for introducing these and urge national and civic representatives to resist pressures in this direction."
    In an article in the Daily Telegraph today, Mr. Colin Coote suggests that we should have more Church militancy; that there should be less Church acquiescence. He takes to task various Church leaders for not taking a more positive lead in
    1202
    what I consider to be the very grave moral issue that I believe we now face. I do not, of course, claim to be a Church leader, by I feel that it is right that the House should know what the people in Scotland are thinking. The right hon. Lady put the case cogently, but I would take it a little further to the Church of Scotland, because the presbyteries of the churches, having discussed it in kirk session and then at the General Assembly, have come out forthrightly against the proposal.
    In its Report to the General Assembly of the Church of Scotland, the Social and Moral Welfare Board had this to say:
    "Were an intelligent and high-principled Scottish citizen of an earlier age to come back among us, it is safe to say he would be shaken much more by the change in moral climate and behaviour patterns than by the wonders of space flight, television and nuclear power."
    After enumerating many of the moral things that this person would have found wrong, the Board speaks of:
    "… gambling of every sort flourishing on a colossal scale, and increasingly with State approval and participation …"
    It is State approval and participation that we who are opposed to this Clause wish to wipe out.
    At present, again as the right hon. Lady said, we are being urged to think rationally about the real wealth of our nation; we are being urged to sacrifice, and we are being urged to work harder. We are told by the Government that there is a sense of justice between citizen and citizen. Some of us might disagree on political terms with that, but in moral terms we are absolutely at one.
    At such a time it is incredible that such proposals should come before the House. I go further. When dubious proposals like this are put forward—this must be a dubious proposal, if the conscience of the Chancellor and of the Government is so clouded that we have to have a free vote on it—it is a sign of decadence in the nation. We cannot afford to go any further down the slippery slope than we have already gone. This is not justice based on worth. It is an artificially manufactured form of chance.
    The hon. Member for Cleveland (Mr. Tinn) said that the odds were more favourable in a national lottery than in many other forms of gambling. The odds are more in favour of a richer person if he

    1203
    can buy more tickets. The poorer person will pay relatively more from his income than will the rich.
    There is always the moral sanction of the Churches. The Churches throughout the nation have come down heavily against a national lottery. I do not think that a national lottery will increase the spiritual or economic health of the nation. It is bound to have a cumulative effect, as the hon. Member for Liverpool, Kirk-dale (Mr. Dunn) said. I consider that it would have an adverse effect on the charities, which are at present dependent on voluntary support for their welfare. If any Government, whether it is the present Government or any other, were to go further, harder and quicker to encourage savings, there would be no need for this sort of thing.
    In conclusion, I ask the Government three brief questions. First, to what extent will more civil servants be involved in setting up whatever form of control board there is to be? Secondly, if the proposals are to be put into force, can we have an undertaking that the headquarters of whatever board or authority it is will not be situated in London? Finally, if a Bill is brought in to give effect to it, should the Clause be approved, will there be a free vote in the House?
    Mr. Gwilym Roberts: I find myself somewhat out of harmony with some of my right hon. and hon. Friends, with whom I usually agree on basic moral principles. Up to now our discussion has been on rather too high a moral plane. There have been suggestions that great moral principles are involved. We have been talking about the Clause as though we were talking in a void, as though gambling was not already an essential part of the whole structure of our society, in which the Stock Exchange, the Government and everybody else is already involved.
    In these circumstances, instead of the Socialist Utopia which some of us may reach at some stage or other, in the short term we must apply ourselves to the task of trying to make gambling make some contribution, not only to private profit, but also to the public purse. My support for the Clause is based purely and simply on the fact that I believe that by the use of a State lottery the Government could
    1204
    ensure that they got a bigger cut from gambling than they do at present.
    I am not in the least happy about some of the arguments put forward in favour of this proposal by some of my hon. Friends, nor by the Financial Secretary. This talk of hypothecation is quite alien to this side of the House. I agree entirely that our party can never believe that any hospital or welfare service should have to depend on some doubtful premise of this type. This idea of hypothecation is completely out.
    I am also very unhappy about the lack of information about the intention of the Government. After the speech of the Financial Secretary I am worse in the mire than I was at the beginning. What we have been asked to do—this is the terrible thing—is to give virtually a blank cheque to the Treasury; and we do not even know when and if the Treasury will cash the cheque, even assuming that there is a vote of nine to one or four to one in favour of maintaining the Clause. We do not know that the Treasury then would act.
    What is far worse is that we do not even know, when the Treasury decides to act, what form the action will take. We are not told what is envisaged, whether it is to be a weekly lottery or a monthly lottery. We are not told whether it is to be a large prize lottery or a small prize lottery. There are very essential differences. We should consider the essential difference of the variation of these two types of lottery. If we have a large prize lottery it will not achieve the aims which I hope to see achieved. The money for that lottery would come from football pools and from some of the big money bets in racing, from the Tote, and so forth. If, on the other hand, it was a small prize lottery the money would be attracted from other charitable causes, from football pools and even local Labour parties' efforts. It is essential to know exactly the form that this cheque will take and who is to make the payment.
    I am not basically against gambling, [Interruption.] The hon. Member for Worcestershire, South (Sir G. Nabarro) may be surprised about that. If I believed that this would substantially increase gambling, particularly the worst forms of gambling, I would be opposed

    1205
    to it. It has been suggested that gambling leads to the breakdown of homes and to people spending all their earnings in the betting shop. It is true that gambling causes a host of difficulties, but that is not the type of gambling we are concerned with this evening. [An Hon. Member: "How does the hon. Member know?"] The type we are concerned with is small stake gambling.
    Mr. Peter M. Jackson: My hon. Friend has been saying that we do not know what the proposals are, yet he has the impertinence to say that we are dealing with the smaller type of gambling. Only a few moments ago he said that we did not know what type it was.
    Mr. Roberts: I accept that, but if we look at the parallel of national lotteries we see it is clear that if we run a lottery on any scale it must be run with very small stakes. We cannot have a lottery with £1 or 30s. stakes or anything like that if it is to have a general appeal. A lottery with general appeal must have stakes of 2s. or 3s. That being so, such a lottery would not lead to a man putting his head in the gas oven, as might be the result of his putting £2 or £3—or sometimes more in some working-class families—on the horses every week.
    From that point of view, therefore, a lottery would not give support to the worst forms of gambling. Indeed, I should welcome a provision to limit the number of tickets which an individual could take up, being very much opposed to an extension of the individual's share in gambling.
    9.30 p.m.
    This proposal, therefore, would not tend to accentuate the worst forms of gambling. All one could hope for from Clause 50 would be the transfer of some of the money spent on football pools and in other ways into a national lottery. The intention expressed by my hon. Friend the Financial Secretary, that it would be subject to the same percentage taxation as the football pools, means that the Treasury cannot lose on the idea.
    Mr. John Tilney: It could.
    Mr. Roberts: It could lose only if the total invested on football pools plus the lottery were reduced. Perhaps the hon. Gentleman would be delighted if that were so and the total of gambling were reduced.
    Mr. TilneyThere might be a great deal lost in postal revenue.
    Mr. Roberts: I doubt that there would be a substantial loss in the postal services. The net effect of this proposal would not be a substantial increase in the amount of gambling. I believe that there would be a movement away from the worst forms of gambling, the large stake gambling, towards small stake gambling.
    The only reason why I support this rather nebulous Clause is that, in my view, if we do not support it we shall, in effect, be accepting the existing alternative, namely, private enterprise gambling. On the other hand, by accepting the Clause we shall at least say, "Let the money come to the public purse instead of going into private coffers". I am totally opposed to any idea of hypothecation. I tell my hon. Friend the Financial Secretary now that if, or when, the Treasury in its wisdom decides to bring in a Bill, and that Bill in any way involves what I should regard as non-Socialist hypothecation, I shall oppose it.
    For the present, however, because 1 regard the Clause as giving an opportunity for a worth-while transfer of funds from the private to the public purse, I am prepared to support it.
    Mr. Speaker: Again I remind the House that many hon. Members wish to speak. For the past hour, hon. Members have responded to my appeal for brief speeches.
    Mr. Tilney: The hon. Member for Bedfordshire, South (Mr. Gwilym Roberts) claimed that he was a realist. He wants a bigger cut from gambling. I hope to show that there would be the danger of a smaller cut and that the Treasury would probably lose by having a national lottery.
    The hon. Gentleman complained—and I agree with him—about the lack of information from the Financial Secretary. He talked of a blank cheque. Having

    1207
    listened to the Financial Secretary telling us that the Government approach this question with an open mind and without a settled view, I am reminded of the South Sea Bubble prospectus for an enterprise the particulars of which would be announced later. That seems to be the Government's attitude, save that, having said that, the Financial Secretary went on to say that the Chancellor has made up his mind that it would be a State lottery and he could not stand the idea of a great number of competing lotteries.
    I cannot understand why one should not have regional lotteries or lotteries managed by great local authorities such as the Greater London Council or many of the smaller local authorities, lotteries in which there would be some regional feeling and a wish to have something done locally. He did not explain why it should have to be a State lottery.
    The right hon. Gentleman said that the Chancellor had made up his mind that a pools betting duty similar to that on the pools should be applied to the national lottery, and added that there would be a national lottery board. Therefore, the Government have given quite a lot of thought to this. They are not really approaching the matter with an open mind. I agree with my right hon. Friend the Member for Enfield, West (Mr. Iain Macleod) that this is a thoroughly bad time in the country's economic history to have a debate of this kind, when so many other Clauses in the Bill have not been properly discussed.
    The Government may think at first sight that it would be pleasant to tap some unused money and do something worth-while with it, using for that end the innate selfishness of men and women who wish to get a very large prize for doing very little, selfishness to which the right hon. Member for Lanarkshire, North (Miss Herbison) referred to in a most moving speech. But how much money is there to spare? Not much is now kept under the mattress, what with inflation and the spending spree earlier this year—
    Mr. Speaker: Order. The hon. Gentleman must not tempt himself to go outside the terms of the Amendment.
    Mr. Tilney: I understand that, Mr. Speaker, but I was trying to argue that
    1208
    the money which the Government hope to tap will have to come either from other forms of savings media like the Premium Bonds, or, more likely, from the football pools, which very much affect employment on Merseyside. I understand those who think that one should try to catch the heart strings of many people with a small amount of money who might say, "Rather than put my money in the savings bank or work out what pools combination will win, I must go in for this great lottery that will do so much good for us all." But, as far as I can see, no particular hospital will be helped and no local enterprise will be helped. We do not know what charities are in the list for a bonanza from the Government.
    Mr. Dunn: The hon. Gentleman spoke of charities, but they have never been mentioned from the Government side of the House tonight. Charities have been completely ignored.
    Mr. Tilney: There has usually been an argument—certainly there was in February—from many of those talking about a national lottery that good causes and charities would be helped. My argument is that all that the Government are now saying is that the proceeds must all be for the Consolidated Fund. Whoever wanted to do anything for the Consolidated Fund that could be avoided? Very few people know about it, except that it is an amorphous mass rising or falling rather like a gasometer. It cannot have any appeal to the public. It is unwept, unhonoured, and, although we talk about it from time to time, largely and rightly unsung.
    If the money is to come from somewhere the main place is the pools. Last year they produced £30 million revenue, and next year it will be £40 million, at a cost of £2,500. Pools betting duty must be the cheapest tax in the world, and it is largely provided by people on Mersey-side. I have here particulars of the employment. I believe that there are 2,000 in Glasgow and 1,000 in Cardiff, but no fewer than 14,759 people on Merseyside whose jobs depend on the pools. Of these, 8,665 are in Liverpool alone. In Bootle—I do not see the hon. Member for Bootle (Mr. Simon Mahon) present—there are no fewer than 1,897. It is extremely interestinig that in Huyton there are no fewer than 1,774.
    Mr. Eric Ogden: Will the hon. Gentleman not agree that it is interesting that the number of pools employees who live in the constituency of the hon. Member for Crosby (Mr. Graham Page), who opposes the proposal, is only 119?
    Mr. Tiilney: I was going to mention that, but I am grateful to the hon. Member for doing so. He has a larger number of pools employees in his constituency than I have.
    Mr. Speaker: Order. I hope that the hon. Gentleman will not pursue any more constituency figures tonight.
    Mr. Graham Page: Since I have been referred to, and figures have been quoted, did not my hon. Friend hear me say in my speech that I had a proposition to put—and I put it in my speech—for stability of employment for the pools employees during the summer, and that my scheme for a national sweepstake would provide that stability?
    Mr. Tilney: It is my scheme, too, but only if the House decides to pass the Clause.
    I remind the right hon. Member for Huyton (Mr. Harold Wilson), whose Government has been referred to as that of Lord North, that 1774 was when Lord North was in charge of affairs. It is interesting to see that the Dictionary of National Biography says that he remained in office on a course which it is impossible to justify.
    Mr. Speaker: Order. If Lord North ran a lottery he would be in order at the moment, but I am not at all sure whether he did.
    Mr. Tilney: Finally, I agree with my hon. Friend the Member for Crosby (Mr. Graham Page) that if we have to have a national lottery we should let those who are experienced in running the pools run it. They have all the expertise. There are also the overheads; if they run it we shall not have duplication of overheads.
    9.45 p.m.
    Mr. J. T. Price: It would be a sorry day for the country and the House if every hon. Member who rose to speak in a debate of this kind had to make
    1210
    an apology first for raising ethical or moral considerations.
    This proposition has been cynically put forward, I am sorry to say, by my hon. and learned Friend the Member for Stoke Newington and Hackney, North (Mr. Weitzman), who is not at the moment in his place, but I warned him that I should refer to what he said if I were fortunate enough to catch Mr. Speaker's eye.
    I have taken part in a number of debates in the House over the years when the question of gambling has been involved, going back to the early debates, for example, on the Betting and Lotteries Bill, when I was one of a very small minority group who had the temerity to approach the Measure as a moral and ethical question, and we got very small change out of our advocacy in those days.
    Nevertheless, we have a situation today in which every responsible observer of the social scene is aware of the fact that the country is suffering grave social disabilities because of the persistent growth of the gambling habit and its permeation of all aspects of society.
    I should never be so foolish as to imagine that the House by legislation could abolish gambling. That would be asking for too much. It would be impracticable. But what my hon. and learned Friend said a few moments ago was that because gambling has become so universally popular in all its manifestations, the House ought to shut its eyes to the social and moral consequences of that development and do nothing about it except help it increase.
    This, of course, is a case of the Government, quite improperly in my view, allowing the Finance Bill to be used for the purpose of flying a kite. The proposition has been put, quite honourably, by its sponsors in the form of private Bills on earlier occasions. They have advocated the creation of a State lottery to provide finance for hospitals and other deserving charities. There is nothing new in this proposal, therefore. What is new is that the Government have decided to use the machinery of the Finance Bill to set out a paving Motion which would allow them to bring in further legislation.
    I oppose this strongly for a number of reasons, largely moral and ethical but

    1211
    some of which are good economic reasons as well. I am an old member of the Labour Party. I was bred in the old Socialist philosophy and tradition of people no longer with us, people who did not believe that something for nothing was a good social objective, who condemned the philosophy of "get rich quick whether you are going to make any useful contribution to the welfare of society or not". We condemned that root and branch as an evil philosophy which should be condemned, and I am saddened to have heard one or two of my hon. Friends, who really should know better, becoming so sophistical in their attitude as to say that the moral question does not matter.
    They have quoted the welfare services. They have referred to the hospitals and research centres which are needed. I remind them that, less than 20 years ago, most of our hospitals were entirely dependent upon charity for their work. The National Health Service is less than 20 years old. There are many deficiencies in our hospitals. There are many things we would like to provide in increasing facilities for the worthy people running them. But nevertheless our hospitals provide an infinitely better service to their patients and to the country than they ever did when dependent on charity.
    What kind of a philosophy for a modern State is it which asks us, when we have gone away from the old philosophy of charity for our hospitals, to go back and rely on gambling to shelter the Government and the State from the responsibility of providing finance for these institutions? I condemn that philosophy, reasonably, I hope, and without undue passion. I do not want to get worked up about it, although I am strongly tempted to, having had to listen to palpable heresies poured into my left "lughole" such as that which I heard from my hon. and learned Friend the Member for Stoke Newington and Hackney, North, who is sitting smiling very wisely at me from a recumbent position.
    You will remember, Mr. Speaker, that it was Ignatius Loyola who founded the great society called the Society of Jesus. I hope that no Roman Catholic will be offended by what I am going to say. The Society of Jesus was founded on the
    1212
    philosophy that, if there was a good end in sight at the end of the road, any means were legitimate to achieve it—that the end justified the means.
    Mr. Graham Page: No, no.
    Mr. Price: That was basically the philosophy which gave rise to many great periods of human suffering all over Europe. But I shall not develop that further. I have put it on the record.
    Mr. Speaker: Order. If the hon. Gentleman develops it much further we must have a debate on it. We do not want that now, however. We are discussing the question of a national lottery.
    Mr. Price: I am much obliged. We will get back to lotteries, which is where I was going.
    The only argument of substance in favour of this national lottery has been that good would result, that it would provide financial support for hospitals. I deny that a desirable end can be achieved by foul or doubtful means. Ultimately, the things which happen in between destroy the good end.
    Other hon. Members have criticised the Clause on different grounds. For example, there have been constituency arguments. It has been said that a State lottery would be in competition with Littlewoods and other pools promoters. As crude a constituency point as that has been made. If hundreds of thousands of people are employed in completely unproductive work churning out millions of forms and accountancy books every week to cater for this gambling which everybody seems to like—and many of my constituents will not like my saying this in the House tonight, but I am not concerned, because I want to say what I believe to be true. It is wrong constantly to dangle before our citizens who are engaged in gambling to the extent of at least £1,000 million a year the prospect of having a lucky strike which will cancel out all the need for hard productive work for this dear country of ours, the hope that they will strike a rich vein of gold by a lucky throw of the dice or by a lottery. This concept should be condemned and I hope that I have condemned it with due moderation.
    I appeal to all those within hearing of my voice, including some of those who

    1213
    are lurking in the Lobby, to vote against the Clause so that a little sense can return to our counsels about gambling.
    Mr. Paul Dean: The hon. Member for Westhoughton (Mr. J. T. Price) said that this was a moral issue. I agree. To a large extent it is a moral issue, but it is also a practical issue involving economic and financial considerations. I hope that those hon. Members who intend to vote against the Clause will not claim that they are the people who are moral and that those of us who are to vote for it are immoral.
    I do not propose to develop this argument overmuch, but it is noteworthy that lotteries of various forms were accepted in our country in the 16th, 17th and 18th centuries at a time when the moral law, as laid down by the Churches, was a great deal stronger than now. Those who have spoken against the Clause have tended to read too much into what it actually says. The Clause says:
    "If … arrangements are made in such manner as Parliament may hereafter determine …"
    In other words, all we are now doing is to have a Second Reading to a Second Reading which will follow later if a Bill is introduced. There will be plenty of time to discuss the details and, one hopes, to influence this or the succeeding Government before legislation is formulated.
    I do not suggest that I like all the suggestions which the Financial Secretary put forward about the way in which the mind of the Government is moving. I intend to vote for the Clause, because I want the principle of lotteries to be reestablished in our country because of the value which they can do to good and, above all, to charitable causes.
    If they are to be successful they must be for specific purposes, which have a charitable content, and to which people are likely to give generously and freely. Equally, and this comes to the practical economic arguments, they must, as far as possible, be directed to causes which will help to reduce the taxpayers' burden. It is for these reasons that I believe hospital building is the most appropriate subject for a lottery, either national or, as I would prefer, local, operated by the local hospital board or the local authority.
    Sir Arthur Vere Harvey: Would my hon. Friend explain how any money derived from this form of lottery will find its way into building new hospitals? Has he taken into account that this country owes tens of thousands of pounds overseas to foreign bankers? What will they think about this debate when we are in such a state?
    Mr. Dean: That is a fair point, and I assure my hon. Friend that I will deal with it in the course of my speech. Before I do so I want to say that I accept the weight of the argument which hon. Members have put forward, from both sides, that the proceeds of a lottery going into the general revenue will not be a successful move. I accept that entirely. Again, the Clause does not say that. It is merely enabling, leaving the details to be dealt with later.
    Why do I mention hospital building? Because here is a specific purpose, a worthy cause, and if we can combine pride in the local hospital with the natural desire of people to have a flutter, there could be a source of great financial strength. It may be said that the State ought to provide the money, and that these alternative sources should not be needed. The State does not provide the money. The hon. Member for Westhoughton spoke about the dependence of hospitals before the war on charitable contributions. We are now spending substantially less, in real terms, on hospital building than we did before the war. There is some significance in the fact that in those days we did, to some extent, tap the local charitable effort for local institutions, whereas now we do so in a very marginal way. At present we rely very substantially on taxation, and under the present hospital building arrangements we are well down the league table.
    It is significant that in the two countries in which I have studied lotteries in operation where they are used for hospital building purposes—the Irish Republic and Australia—they are spending a substantially higher proportion of their national wealth on hospital building than we are.
    Mr. Michael Shaw: As I understand my hon. Friend's argument, curiously enough I

    1215
    support his objectives 100 per cent. It seems that he is supporting the principle of a lottery on a very narrow front indeed. Surely the logic of that is that he cannot be in favour of this Clause, but only in favour of a specific Bill that may be brought in later.
    Mr. Dean: I am trying to speak briefly, and I have taken only one aspect to illustrate the theme that I am putting forward. The answer I would give to my hon. Friend is that in this one area, and I will not stray outside it, there are three answers to this problem. The first is to increase taxation still more in order to build more hospitals. The second is to accept an inadequate rate of building, which is the present position. The third is to look for alternative sources of additional revenue. I reject, and I hope that all my hon. Friends would reject, the first possibility of higher taxation.
    It being Ten o'clock, the debate stood adjourned.

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

  FINANCE BILL
  Question again proposed, That the Amendment be made.
  Mr. Dean: Taxation is far too high already, particularly direct taxation. I hope that the whole House would reject the second possibility, namely, to accept an inadequate rate of building, because that would be a counsel of despair.
  In my view, we are left with the third possibility only, namely, to find additional sources of revenue for these very worthy causes. This is one additional sources of revenue which I believe is highly desirable, and the Clause would enable us to vote in favour of the principle of it.
  Mr. Alexander W. Lyon: If it is desirable that we should spend more money on new hospital building, why is it right to say that we should not get
  1216
  that extra money from increased taxation? We should take it out of the same pockets by means of gambling.
  Mr. Dean: We would find additional sources by means of the sort of suggestion which I have made. If there were merely a transfer of funds from one form of gambling to another, we would be no better off.
  I rest my case—and I agree that we cannot prove this one way or the other until we have seen it in practice—on the distinct possibility that we shall tap additional sources, particularly at local level, through this proposal. In view of the desperate need to improve our hospital services and many other services, it would be a great pity if the House were to reject this proposal. We are being asked only to approve the principle of lotteries; we are not agreeing to any way of carrying it out. I hope that hon. Members will think very hard before rejecting the principle.
  Mr. Ron Lewis: I am delighted to follow the hon. Member for Somerset, North (Mr. Dean) in the debate, for more than one reason. We became Members of the House at the same time, I representing Carlisle and the hon. Gentleman representing Somerset, North, the constituency in which I was born. He lives in the same village as my mother lives today. In that respect, we have something in common.
  I was greatly alarmed to hear the hon. Gentleman say that he was in favour of establishing the principle of lotteries in this country. I say in modesty and with sincerity that that will not go down very well in the hon. Member's constituency, even among some of his supporters. He went on to give this country's position in the hospital building league table. I do not wish to make party political capital out of this issue; it far surpasses party controversy.
  My hon. and learned Friend the Member for Stoke Newington and Hackney, North (Mr. Weitzman) accused some hon. Members of being emotional. I make no apology for being emotional on this matter. I am not unmindful that when Mr. Harold Macmillan introduced his Premium Savings Bonds he was thoroughly attacked for doing so by hon. Members on my side of the House. Whether that attack was made for party

  1217
  political gain, or whether it was made on moral issues I do not know, but the plain fact is that the Labour Party opposed Premium Bonds at that time.
  Sir A. V. Harvey: I remember the time when the present Prime Minister criticised them a great deal, but he has since appealed to the people to buy Premium Bonds.
  Mr. Lewis: That may be so, but, with all respect to the hon. Member for Macclesfield (Sir A. V. Harvey), hon. Members have no need to throw stones in that respect. On that occasion, the principle was strongly condemned by the Labour Party.
  The main issue as I see it is whether the State should be the custodian of some kind of national lottery. In discussing the Clause, it would be wise to look at history, particularly of this country. Lotteries were first heard of in England in 1569 and for some time were legal, but, alas, so many of the lotteries in those days became private and cheating affairs and became mixed up with the more reputable ones that legislation was necessary and State lotteries were put to an end in 1826. Now, the whole question of a State lottery is being revived. If the House of Commons, by its decision tonight, gives the green light for "Go", I believe that it will be one of the most disastrous decisions taken in this House for a considerable time.
  Of course, I am all in favour of some kind of control of gambling. I am glad that the question was considered by the present Lord Butler. I am glad that my right hon. Friend the Chancellor of the Exchequer is looking at the question in the Bill. I look at this aspect from the moral point of view. I make no apology for that. I suppose that in many cases, to some of us, morality stems from religious modes of thought and, possibly, some kind of theological understanding, whilst to others morality may be simply an activity of conscience. To me, the question of a State lottery is a moral issue. If I think that a State lottery is morally wrong, in my view it cannot be politically right, from whichever side of the House it stems.
  Parliament is right to look at gambling and to legislate, but for the State to become involved in it is wrong. Therefore,
  1218
  I agree with my right hon. Friend the Member for Lanarkshire, North (Miss Herbison) that gambling stems in the main from selfish desires and a kind of get-rich-quick mentality—not that people who gamble are bad by any means. Some of my best friends are heavy gamblers. On the other hand, a "bookie" built a row of houses and named them "Mugs' Cottages". To many, gambling is antisocial, and for the State to indulge in anti-social business is morally wrong.
  The redistribution of wealth through the disbursement of large prizes by chance without reference to need or effort is contrary to a just society. To pander to the desire for personal gain without service is demoralising to society at any time, and particularly at this time of economic crisis, when appeals are made from almost all sides of the House to the nation for greater productivity and responsible citizenship.
  If a national lottery is established, it will encourage further the already considerable incidence of gambling in our society. Have we not reached the point when a ceiling should be placed on it, to try and tone it down? Assuming that the House gives the Government its support tonight, I believe that gambling will be given the green light.
  Despite all that may be said, and however well it is intended, the principle of a national lottery will be received by most people as an assurance that taxes will not be increased. Is there any responsible hon. Member who can give that assurance? We shall increase rather than diminish the generally accepted idea that we are over-taxed.
  A lot of play has been made in the course of the debate about money for hospitals. Compared with my younger days it can be safely said that we are living in an affluent society. The 1968s are far different from the 1930s. In those days, we had only two places to go. Either we went to the chapel or to the "pub", and many of us had to go to the chapel because we had no money to go to the "pub"—
  Mr. Speaker: Order. The Chair is not interested in the variety of religious experiences of the hon. Gentleman. He must come to the Amendment.
  Mr. Lewis: Mr. Speaker, I respect and respond to your Ruling, but I was trying

  1219
  to point out that we had no money for gambling in those days.
  I believe that the people have a genuine sense of responsibility. If they are asked to do something to bring our medical services right up to date, I am sure that they will be prepared to do it. I believe that they would accept a proposition that, instead of setting up a national lottery the Chancellor held a kind of national levy whereby everyone contributed 5s. towards our health services, given the assurance that all contributions would go to the health services.
  I am against this lottery, and I shall vote against the proposal. I believe that gambling in this country is out of control. I beg hon. Members on both sides of the House to reject the proposal contained in the Finance Bill.
  10.15 p.m.
  Sir G. Nabarro: My controversy with the hon. Member for Cleveland (Mr. Tinn) began on 23rd January last in a Parliamentary Question. My views were expressed shortly in that and, for the sake of brevity, I will quote it, without relating the argument in any detail. I said:
  "Will the Chancellor bear in mind the fact that there is a good deal of opinion in this House and elsewhere that gambling in Britain is already excessive and that for the State to add to the burden would be immoral and unacceptable to millions of men and women in this country? Will he study the Church Commission on Gambling to ascertain the facts of the situation?"—[OFFICIAL REPORT, 23rd January 1968; Vol. 757, c. 190.]
  The reply from the Chancellor was sarcastic and procrastinating in character. I shall not relate it.
  The exchange took place two months before the Budget. The Chancellor did what I wanted him to do in his Budget. He increased substantially the taxes on gambling. The yield in 1967–68 was of the order of £70 million. Of that, £35 million came from the football pools and the remainder from the gaming duty and licences for one-armed bandits and similar machinery. Under Clause 4 of the Bill his yield is expected to be £100 million, and he has therefore marked up the revenue yield expected from gambling by about 43 per cent. In my judgment that is the correct policy.
  But the taxable limit on gambling has not yet been reached in this country. Far
  1220
  from it. A calculation was made by the Chancellor in his Budget speech, which, for brevity, I will not quote in which he said that doubling the gaming duty from 2½ per cent. to 5 per cent. was the equivalent of raising Purchase Tax on gambling to 70 per cent. I cannot follow his mental processes in that, nor can anybody else. The aggregation of the turnover on gambling is between £1,200 million and £2,000 million per annum. Nobody knows the exact figure. Those are the figures given by the Churches Commission on Gambling. If one assumes that the correct figure is about the mean between the two limits which I have given, one can call it £1,600 million a year as the aggregation of all gambling. In my judgment it is ridiculous to suggest that the taxable limit for gambling, on a turnover of £1,600 million, is only £100 million. It is much more.
  Mr. Speaker: Order. With respect, the hon. Member cannot argue on this Clause increases in the taxes on betting in other Clauses.
  Sir G. Nabarro: I am arguing what is the alternative to a State lottery, Mr. Speaker, and if I may be allowed to finish my paragraph, I will demonstrate that.
  A State lottery will not raise the sums of money which have been attributed to it. The wildest estimates have been made by participants in the debate as to what the yield of a State lottery would be. The particular miscreant, the greatest culprit, in that exaggeration is the hon. Member for Bedfordshire, South (Mr. Gwilym Roberts). In a Parliamentary Question to the Chancellor of the Exchequer on 23rd January, he asked whether the Chancellor of the Exchequer realised that a State lottery would produce
  "a net profit to the Exchequer of £200 million a year."
  It was not a word used in a slipshod fashion. It was in the Parliamentary Question on the Order Paper He spoke of
  "a net profit to the Exchequer of £200 million a year."—[OFFICIAL REPORT, 23rd January, 1968; Vol. 756, c. 189.]
  It is generally said that out of £100 vested in a State lottery, £50 is allocated

  1221
  to prizes, £20 is allocated to administrative expenses and £30 is allocated to the Revenue or to profit. That is the consensus of statistical evidence available from other minor countries.
  Mr. Gwilym Roberts rose—
  Sir G. Nabarro: I will not give way to the hon. Member, who has interrupted throughout the debate for more than 3¼ hours. [HON. MEMBER: "No."] I have sat here for 3¼ hours. The hon. Member spoke for 20 minutes.
  Mr Roberts Mr Roberts rose—
  Sir G. Nabarro: I will give way to the hon. Member if he feels sore.
  Mr. Roberts: I thank the hon. Member. Briefly, if we had 5s. tickets and sold 32 million weekly, it would bring in £8 million a week. If 50 per cent. of that were paid to the Exchequer, that would be £4 million a week or £200 million a year.
  Sir G. Nabarro: The hon. Member is statistically wrong and his Question on the Order Paper was wrong. I will demonstrate by mental arithmetic why he is wrong. I said that the revenue yield from a State lottery was about 30 per cent. In his Parliamentary Question the hon. Member said that the profit would be £200 million a year. If £200 million represents 30 per cent.—
  Mr. Roberts: No.
  Sir G. Nabarro: On his own showing it does. In that event, the total sum invested is £700 million a year which, divided by 52, is almost £14 million a week. The argument is nonsense. We could never ever raise £14 million a week by a State lottery. The hon. Member has indulged in statistical hyperbole about a State lottery on many occasions. He is by profession a statistician but I would not employ him.
  One might, given very great success with a State lottery, raise a sum approximately equal to the sum we now raise by football pools, £30 million to £40 million a year, but it would be at the expense, and to the detriment, of the football pools. [HON. MEMBERS: "NO."] I am against the principle of a State lottery and if hon. Gentlemen opposite say "No", then I ask them, including the hon. and learned Member for Stoke Newington and Hack-
  1222
  ney, North (Mr. Weitzman) who has been a consistent opponent of mine in this matter, to remember that they are arguing, perhaps inadvertently, that by having a State lottery one would get a great deal of additional gambling. Is that what they want? It is not what I want, because gambling in Britain is already utterly excessive.
  I do not object to reasonable gambling by people who can afford it and who are prepared to forgo other things to punt. I do not smoke and I drink very sparingly. The money I save on cigarettes and drink I am perfectly prepared to use for gambling purposes, notably on by-elections. There is a moral in my telling this story. I put 100 guineas on the Oldham, West by-election and I am delighted to see my hon. and learned Friend who won that constituency waving to me—
  Mr. Speaker: Order. The hon. Gentleman must not pursue his personal habits in detail. I remind him that we are talking about lotteries.
  Sir G. Nabarro: I mention it en passant, Mr. Speaker. I got 7 to 4 on at Oldham, West and the odds were 2 to 1 on at the Dudley-Stourbridge by-election. I had 100 guineas on each. The proceeds of these wins at by-elections are virtually tax-free. The reason for excessive gambling in Britain today, which we all recognise—the hon. Member for Liverpool, Kirkdale (Mr. Dunn) complained about the way it is increasing—is because of the continuous increase in the level of taxation, which is equally excessive. It is also due to the fact that gains from gambling are almost tax free and certainly show a much greater yield to the punter than honest hard work. That is why gambling is excessive—
  Mr. Speaker: Order. That may be so, but the hon. Gentleman must come to the subject of the Amendment.
  Sir G. Nabarro: For all these very good and valid reasons I shall tonight repeat the performance which I gave in the company of my hon. Friend the Member for Southend, East (Mr. Channon), when I was first teller and he was second on 2nd February when he divided the House against what was then the private Bill of the hon. Member for Cleveland (Mr. Tinn). I therefore advise my hon. Friends to trip into the Lobby in support of the Amendment and against Clause 50.
  Mr. Leo Abse: When the Ballot for Private Members' Bills takes place and we queue up, we are very much aware that, one by one, we tend to dither over the number of our choice. It is a moment of time when each of us, even the most rational, is suddenly impressed with the superstitions which belong to the irrational and fantasy world of gambling. Although we know the absurdity of the lottery in which we indulge, we guarantee, by participating in it, that we will rarely discuss the right matter at the right time and, particularly if we have not been drawn, by the right hon. Member—
  Mr. Speaker: Order. I trust that the hon. Gentleman will now come to the Amendment.
  Mr. Abse: I know, Mr. Speaker, and I think that it is necessary, to try to understand the consequences of what is behind the principle of a lottery, that we should begin to understand the consequences in ourselves and the consequences to the Government if we permit this sort of Clause to go through.
  I was seeking to explain that at the time when we are indulging in our own little phantasy we are regressing to the most primitive mode of thought. We are entering into a gamblers' world, where the impossible, where everything that challenges causality, everything that is absurd, is greedily believed. It is a world where two and two never make four— they may make 100, or nothing.
  As I have listened in past years to those who have come to me professionally in difficulty as a consequence of gambling —the embezzling clerk, the falsifying trade union official, or the fraudulent bank manager—I have heard them explaining how they thought their luck would change. I have always glimpsed a world of their absurd magic: pick up a pin, wear a charm, touch a dwarf, or see the moon through glass, see a magpie, three parrots or so many crows.
  I do not mock at those who find real life so bewildering or so painful that they must escape to gambling. I do not mock at those who are disenchanted and disappointed with life, so that, perforce, they must dream of wealth and riches, vainly hoping that by a ballot or bet their impoverished life may perhaps at some
  1224
  time be magically transformed by some external gain of fortune. I do not mock at them. I do not bring to this problem some of the puritanical zeal which has informed some of the speeches we have heard, nor do I choose, as some hon. Members have, to quote theology, because I have not forgotten that one of the Apostles himself was chosen by lot. But by very different means. I come to the same conclusion, as I notice from past readings of debates, as even the hon. Member for Wimbledon (Sir C. Black); and I can assure my hon. Friend the Financial Secretary that a time when I find myself in agreement with the hon. Member for Wimbledon is so rare a phenomenon that he should take regard of the wide section of public opinion that is against the proposal.
  In this House we seek to govern by rational argument and rational discussion —[Interruption.] We try. We do not necessarily succeed. We try to lead people from irrationality and prejudice and our task all the time in our legislation is to defy those who pessimistically believe that the perplexity and helplessness of the human race is such that it cannot be remedied, that we are the playthings of gods, of chance, or luck or fate.
  The House should remember when it focuses its attention on a Clause such as this that there was a time when all Governments were dealt with by chance. I do not want to provoke Mr. Speaker, who is looking at me vigilantly, but we should remember when involving ourselves in this matter that there was a time in ancient Greece when people would flock to the oracles to seek guidance in public affairs, for no law was enforced without oracular approval—
  Mr. Speaker: This is one of my favourite subjects, but it is out of order tonight.
  Mr. Abse: What I am seeking to say, Mr. Speaker, is that in approaching the subject of this Clause we must be careful that we do not regress into the same habits as have past Governments.
  Perhaps I might quote just a little— and I shall not trespass far—in aid, by saying that from the time of the Scythians, the Turks and the ancient Germans, as we know from Ezekiel and Nebuchadnezzar, we have again and again had

  1225
  Governments who have governed by all sorts of magic: by, for example, labels on which were written various alternatives and then attached to arrows. The archers let fly, the advice attached to the furthest arrow being accepted—
  10.30 p.m.
  Mr. Speaker: Order. The hon. Member will not be out of order if he comes to the Amendment and to the present century.
  Mr. Abse: I am seeking to show that the Romans had government by bibliomancy. By many magic ways past Governments have been motivated in deciding legislation in other times. If there are those who think that this recall is irrelevant, it is well to remember when dealing with a Clause of this kind that there are millions of people in our electorate who regularly read their horoscopes in the popular Press and glossy magazines. We should understand with a sense of responsibility when we introduce a lottery of this kind what is the state of public opinion. If people are influenced by Fleet Street astrologers more than by any social legislation we pass, it is time for us to assert the voice of reason. The voice of reason, of the intellect, is very soft, has to be endlessly repeated, has many rebuffs, but, although it is a soft voice, fortunately the voice of reason is one which does not rest until it has obtained a hearing.
  It is true that people cannot be bludgeoned into hearing it. As has been well said, it is true that we cannot end gambling legislation. We cannot force the community into rationality, but surely our role should be to contain it, to curtail it and certainly not to activate it as an act of State so that we spread and create more superstition and more irrationality. I do not regard this debate at all as one between those who are puritans and the permissive. As a humanist and a rationalist, I find the idea of a national lottery as no less repugnant than those nonconformists in my constituency who have written to me urging opposition to the proposal.
  Some hon. Members are so fascinated by an opportunistic approach to government that each piece of legislation is considered by them an as isolate with no apparent awareness of the need for a
  1226
  Government to have a style and a philosophy. They are utterly indifferent, for example, to the possible effect of interposing pleas for greater productivity and less absenteeism and bringing in or suggesting a national lottery. One thing I observe, and I say this to the Financial Secretary, is that when we had a proposal from Harold Macmillan he brought it forward with consummate skill. He saw to it that our present national lottery was called Premium Savings Bonds. The moral value of saving is a dogma of the theologically-minded politician for which Britain is rightly renowned.
  Harold Macmillan could claim that he conferred a twofold blessing on his country. By his inventive mind he gave us savings bonds which enabled the citizen to achieve affluence in the flesh as well as salvation in the spirit by one and the same coupon, and the beatific mirage of everlasting glory is greatly enhanced by the chance of winning £50 on the way.
  But my hon. Friend the Member for Cleveland (Mr. Tinn), to whom we are primarily indebted for this debate, has, I am astonished to find, made no similar attempt. Nor has there been any similar suggested attempt to be drawn in Socialist terms by the Financial Secretary. He has not attempted to create any philosophy to justify his view. I am astonished to find that no similar attempt has been made to justify this extraordinary suggestion to the Parliamentary Labour Party. Arthur Henderson, one of our founding fathers, I have recently read, once told a T.U.C. conference:
  "Gambling is a greater foe to Labour than all the forces of capitalism."
  Doubtless most would consider that an overstatement.
  But when today's Labour Members stand their philosophy on its head, I am bound to query the spectacle. Socialism surely has something to do with the redistribution of wealth, with the community taking unearned income from the undeserving and deploying, according to determined priorities, the money for the benefit of the whole community. Is not that what Socialism is supposed to be about?
  The national lottery is the very antithesis of this. It would collect money from all the community. It would hand

  1227
  over a substantial proportion of the proceeds—unearned, untaxed, undeserved— to a newly-created capitalist. Then it would use the balance under the guise of hypothecation for causes which succeeded in jumping the queue. I have sought in Private Members' Bills sometimes to introduce bold notions, but this is the biggest piece of effrontery that I have ever encountered since I have been in the House.
  I do not want to talk about the economics of a national lottery. It is clear, as hon. Members have pointed out, that they are, to say the least, ambiguous. I want, however, to draw attention to one point my right hon. Friend the Member for Lanarkshire, North (Miss Herbison) did not bring out in her wonderful speech. When I opposed the Betting and Gaming Bill, I said that I believed that it would lead particularly to a spread of betting among women. That is confirmed. Anyone who has spoken to bookmakers knows, as I know from the experience in South Wales, that women are going into betting shops in the morning in the middle of their shopping. Although they may not remain in betting shops with the men in the afternoon, in fact they are going there regularly in the mornings. Every bookmaker knows that there has been a great growth of betting among women.
  It may be, as has been said by Simone de Beauvoir and others, that women believe more in luck than men. It certainly seems to be proven by statistical surveys and tests which have been pointed by Professor John Cohen of Manchester. Perhaps it is, as Simone de Beauvoir says, that when a woman wants something and goes into a shop for it she believes that she will get it by adopting a passive attitude. She is there. She sees what she wants. She thinks that she is going to get it; perhaps like when a woman is thinking of seducing somebody. She is there and she will get it. She takes it as given. A man, on the other hand, will want to do something more to determine his fate. Certainly, there is a different psychology.
  What seems to be certain is that women believe in luck more than men. This is very dangerous at this time, because at least as long as there is some obstruction, like filling in a football coupon, or
  1228
  even the fact that one must make a bet, which comes between women and betting, there is a built-in check. With a national lottery, women can participate in betting upon a large scale merely by handing money over and without actively participating in any other way. We must accept that, if we adopt the idea of a national lottery, we are inviting women to participate in gambling on a very large scale indeed.
  It is obvious from what the Financial Secretary has said that, if he has to put a tax of 33⅓ per cent. upon a national lottery, it can be worth while only provided that we extend the whole sphere of gambling. It is obvious from what my hon. Friend has said that this can be done only provided that we remove all the present inhibitions—all the present restrictions on advertising, and so on —that are, fortunately, in-bulk into our gaming laws.
  This, in fact, is an attempt to institutionalise irrationality. It is an attempt to activate a primitive mode of thinking among the community. Those who have stood up and said that we have got to accept it are yielding to this irrationality, and being utterly defeatist. I believe that there is is a moral and ethical question here. The real question is whether we want to govern our affairs in a rational form, or whether we want to regress into the most primitive way of thinking.
  I consider the substance and the timing of the proposal utterly inept. That it lacks gravitas, as the right hon. Member for Enfield, West (Mr. Iain Macleod) said, is self-evident. These are seasons where, if we as a people are to succeed, we have to adapt ourselves to a new role and have to be realistic. It is no good our pretending that we can retreat into illusion. We must retreat from fantasy worlds and fantasy thinking.
  I am surprised at what the Chancellor has suggested. We have in my right hon. Friend the Chancellor of the Exchequer someone who, if he has done anything, has made a great attempt to make this country think more realistically. He has done more, in my view, than any member of the Government, perhaps, in making us understand our present rôle. I am surprised and somewhat disappointed that a person with his sense of realism should,

  1229
  even obliquely, suggest that the House should move towards a piece of legislation which is founded on fantasy, dream and irrationality.
  Mr. Michael Alison: Like the hon. Member for Pontypool (Mr. Abse), I add my modest tribute to the right hon. Lady the Member for Lanarkshire, North (Miss Herbison), who made what seemed to me to be the moral case most powerfully. I am bound to accept nine-tenths—I say that advisedly— of what she said. At the same time, I do not base my moral objection to the Clause on the ground that the moral case as the right hon. Lady put it is wholly self-evident or that the case which my hon. Friend the Member for Somerset, North (Mr. Dean) argued, that there was no morality in the question, was itself a proven proposition. The important point is that the moral issue is disputed. There are those who feel that this is a moral question, and there are those who do not. It is a disputed question.
  My charge against the Government is precisely that they have come down on one side of the argument, quite improperly, by saying, in effect, that, whether it be moral or immoral, they are prepared to accept a national lottery. That is to take a moral decision on the issue, and that is what I find objectionable.
  Mr. Harold Lever: The Government have not said that they are prepared to accept a national lottery. They have said that they are prepared to accept the guidance of the House.
  Mr. Alison: That seems rather like a married man saying that he is prepared to enter into relations with a woman of easy virtue if a lot of people tell him that it is all right to do so. It is no defence at all. The Government have made a deliberate moral choice, coming down on one side of the argument. That is inescapable, as one looks at the way they have handled the matter.
  Mr. Robert Sheldon: The hon. Gentleman is being grossly unfair. The Chancellor of the Exchequer is leaving it to the House to decide what is its moral view on the matter.
  Mr. Alison: In my view, it is quite improper for the Government to do that, on moral grounds. The hon. Member
  1230
  for Ashton-under-Lyne (Mr. Sheldon) underestimates the extent to which what is written into law nowadays acquires a sanctity and a hallowed quality which, perhaps, it did not have in days gone by, when there were more tenable and more closely observed laws in other spheres. Nowadays, what the Government write into legislation tends to be accepted by the great mass of people as the standard and the norm. This is why it is an improper decision for the Government to make in a disputed question of morals.
  Mr. Evan Luard: Would the hon. Gentleman suggest that the Government should not allow the House to take a moral decision on such matters as abortion or divorce legislation? Is it not normal in many moral matters to allow Members freedom of conscience to decide for themselves, the House making a collective decision, rather than the Government taking it upon themselves to seek to impose their own moral view on the House as a whole?
  Mr. Alison: There is a distinction there. The proposals regarding divorce, for example, are in the form of a Private Member's Bill, and there is scope for specific Amendments or a series of changes in the Bill which the Government may make as a condition of giving it time. That is a different matter. It is wrong for the Government to adopt a position on this issue and say—
  Mr. Harold Lever: They are not.
  Mr. Alison: The Financial Secretary cannot get away with that. They are prepared to say that they will accept it if the House indicates a certain view. They are undervaluing and underestimating the significance of the effect it will have upon the population, who often take the moral lead they seek in life from the nature of the laws which we pass in the House. There are few other means available nowadays. What we write into law becomes hallowed and regarded as the appropriate norm for conduct. That is why the right hon. Member for Lanarkshire, North was right in the passionate vehemence with which she argued against this course.
  10.45 p.m.
  Besides being undesirable on moral grounds, the proposal is irrational and would mean an inefficient use of resources.
  Mr. Dunn: Would the hon. Gentleman take the point of the statement by his right hon. Friend the Member for En-field, West (Mr. Iain Macleod) in an article he wrote in the Financial Times? Would he give a moral judgment on that, as well?
  Mr. Alison: I thought that in his speech tonight my right hon. Friend the Member for Enfield, West (Mr. Iain Macleod) created a wholly new situation with his reference to gravitas. He struck a note that is absolutely right, and I fall into line behind that.
  I do not think that a national lottery would lead to a net increase in saving, which must be the economic justification for it. A switch from one kind of saving to another is quite unproductive. I underline the point of my hon. Friend the Member for the City of Chester (Mr. Temple) about a switch from pool betting, and, in addition, I wonder whether the Chancellor appreciates that the real victims of the switch from saving which I believe would come would be the voluntary collectors of the National Savings Movement.
  Like all Chancellors, the right hon. Gentleman handed out the usual bouquet to the movement this year. I have been a Member for only a very short time, but I have not heard a single Chancellor who has not made the statement that the right hon. Gentleman made this year about the debt of gratitude he owes to the voluntary National Savings Movement. The voluntary collectors should not be underestimated. The voluntary seller of National Savings Certificates who persuades somebody to dip into his or her pocket for five or 10 bob is making a genuine contribution to saving that sum, which will not be spent on consumption. If such a saver is approached not by voluntary hawkers of National Savings Certificates, but by paid officials of the Government with a lottery ticket as the alternative it is almost certain that the five or 10 bob will be switched into the ticket. Not only on moral but on economic grounds, it is not a good thing to undermine the efforts of the National Savings Movement.
  The argument about the worthiness of the cause is rather specious. The Government have been in a bit of a dichotomy about this rather delicate ground. They are not certain how much emphasis
  1232
  to put on the argument that there are so many deserving projects held up for the lack of the wherewithal that the Government cannot scrape together. If they are sensible projects that the country must have nobody says that the money is not available. As the Churches' Council on Gambling put it, are we prepared to have a national lottery on the defence budget?
  Mr. Mendelson: Was the hon. Gentleman in the House when his right hon. Friend the Member for Enfield, West (Mr. Iain Macleod) behind whom he has just fallen in, made this point, and said that tarpaulins had to be put over hospital buildings that were half ready when he was in office, and, therefore, he wanted money for a lottery?
  Mr. Alison: It is always rash to give way to that sharp commentator the hon. Member for Penistone (Mr. Mendelson), but I repeat that I fall entirely into line behind my right hon. Friend.
  The Government would not dare to argue that we should finance the defence budget, for example, by a national lottery. That is something that one cannot gamble on. We must have it. That means logically that they are prepared only to bring into the periphery of the lottery what are really secondary needs, important though they may be. It is conceded that the funds available from the national lottery should be hypothecated, but hypothecated only to matters of secondary importance. The show has really been given away, because when a crisis comes the money must be found for something really important, such as continuing free school milk or free spectacles, and the national lottery funds, which, by definition, are matters of secondary importance, will always be available for the Government.
  I believe, therefore, both on moral grounds and on grounds of economic efficiency that we shall not create net new savings but shall undermine the National Savings Movement, particularly the small savers part of it, and so we should accept the Amendment.
  Mr. Frank Hooley: Those who argue in favour of the Clause seem to have produced two very diverse and curious arguments. On the one hand, my hon. Friend the Member for

  1233
  Cleveland (Mr. Tinn) suggested that taxation can be reduced because there is such a golden bonanza in organised gambling that the State can cash in on it and so we can cut taxation by relying on this painless means of raising revenue. On the other hand, there are those who would have the money denied to the Treasury and specially allocated to some cause which they have usually dressed up as hospitals because this makes a special emotional appeal to people who would not otherwise be particularly impressed by this means of raising money. These diverse arguments do not fit together.
  I find the schizophrenia of the Government more peculiar. They have only just put through the House a Bill, which has my full support, to bring under proper supervision and public control the very serious evil of gambling, which has grown up as a consequence of the ill-thought-out and disastrous legislation of the Conservative Party a few years ago. Now they are incorporating this Clause in the Finance Bill.
  It is no use the Government saying that this is just a technique for a free vote. The Finance Bill is the most important Measure of any Government in any year, and to put in it a Clause which does not vaguely say that the Government may or may not have a lottery, but gives specific power to create one when the time is ripe, is an indication of Government thinking. No Chancellor will take up the time of the House with this kind of proposition unless it is one to which he has given serious thought and which he believes should be seriously considered by the House and the country at large.
  I do not accept the argument that the Clause is just to test opinion. There are scores of other ways in which that can be done. It is most peculiar that the Government should bring in the legislation that we have just passed to bring gambling under control and almost at the same moment bring forward a proposition deliberately designed to encourage, spread and create gambling.
  My position on gambling is clear: that organised gambling, the calculated exploitation for profit of the gambling instinct which is in all of us, is a social menace and ought to be brought under the strictest possible control.
  1234
  The arguments against gambling were put with classic simplicity and cogency by the late Archbishop Temple. He put forward three reasons. First, it is based on a bad principle—reward without effort. In the year in which the Government are endeavouring to impress upon all our people the importance of productivity, the importance of using skill, whether of hand or of mind, to the best possible effect, it seems incredible that in the Finance Bill, the most important Bill of the year, there should appear this Clause suggesting that the technique and process of raising revenue by gambling somehow has something special to commend it.
  The second reason is that gambling originates in a bad frame of mind— coveteousness, desire for gain as such. The third is that it has bad social consequences. This is incontrovertible. We know that the calculated spread of organised gambling produces serious social consequences, with which this House has spent a great deal of time trying to deal.
  It has been argued that somehow the money will be produced for worthy causes. But it is not a question of raising money, but of employing resources. Money is merely an index of the amount of resources to be used. For anyone to suggest that development of these resources should be determined in a magical manner by the institution of gambling is, to me, fantastic. It has also been suggested that those who oppose gambling are hypocritical because they do not object to the taxation of existing forms of gambling. But checking existing forms of gambling by levying taxation on them is a different matter from deliberately setting out to create a whole new market and enhancing the amount of gambling that is already going on.
  Those who argue that this proposal will merely transfer money from one form of gambling to another must bear in mind that, if a State lottery is created, then presumably the State is deliberately setting out to make people gamble. There is no point in it otherwise. One does not set up a vast apparatus of administration and organisation for this activity unless one wishes to raise considerable sums of money. This implies advertising, persuading people to gamble, presenting to the nation the idea that organised

  1235
  gambling is something which a civilised State should encourage and promote. That proposition is totally repugnant to me and to a great many others.
  I accept the moral case put by my right hon. Friend the Member for Lanarkshire, North (Miss Herbison), but I believe that, in addition, there is a sound social and economic case for rejecting the Clause and supporting the Amendment.
  Mr. Charles Morrison: The House is wearing its mantle as preserver of the nation's morals. Even though I have a forebear who enjoyed or suffered the nickname of "Old Morality", I do not intend to argue on the moral issue. I wish to examine this proposition from the practical point of view, and from that point of view I am not convinced—even less so after hearing the debate—that the advantages of a national lottery would outweigh the disadvantages.
  If the lottery is to be financed by new money coming into gambling, surely it would be much better if the money were raised by the Government through a really attractive savings scheme, which would benefit everyone taking part and not just a few lucky prize winners. If, on the other hand, the money comes from funds already used for gambling, they are more than adequately taxed now. I believe that a lottery could have an adverse effect on resources at present used in support of sport of various kinds. That fear is echoed by a number of sports club chairmen.
  I want to refer, first, to the pools. If a national lottery is to cut into funds at present going into the pools, a very important source of revenue to the Football League clubs will be harmed. At present, the Football League receives about £1 million per annum from the football pools by way of royalty for the use of the League's fixture list and this is paid as a percentage of turnover. Very few League clubs are in a healthy financial state and any diminution in the pools' turnover could clearly be serious for football.
  11.0 p.m.
  The recent Chester Report on football has recommended that there should be established a pools levy board which on the turnover of the pools would levy another £1 million a year to be used
  1236
  for the benefit of football. If this recommendation is adopted, the potential for football could be reduced by a national lottery.
  I want, secondly, to refer to the many small pools and sports clubs' competitions such as raffles and jackpots which are often the main, and sometimes the only, source of income for development funds and current expenditure for a vast number of small sports clubs. I have had several letters from sports club chairmen expressing their fears about a national lottery. They all reiterate the fear that something will have to give way for a national lottery and that it is more likely that their types of small gambling will have to give way first.
  I should like to quote one letter from the chairman of a county cricket supporters' association who wrote of the proposal, perhaps a little harshly in view of what the Financial Secretary has said:
  "How like the present Government! They care little for those who merely want to work hard to earn what they need to keep sports and charities going. Instead, they increase the duties we pay, then propose to compete with us unfairly and, having driven us out of existence, to leave us to the caprices of the Minister for Sport. I place little reliance on this."
  If the "Minister for Sport" had made more money available, his caprices might not be a bad bet, but there is nothing to say that a national lottery would benefit sport as a whole more than the losses which its establishment would incur.
  Nothing that the Financial Secretary said earlier tonight draws me any nearer the conclusion which I should have liked to have reached—that, on balance, a national lottery would benefit sport or any of the other excellent causes mentioned throughout the debate, and, therefore, I am not prepared to give the Government carte blanche nor to support a national lottery tonight.
  Mr. Eric Ogden: I begin with a word of comfort to my right hon. and hon. Friends on the Front Bench. Perhaps someone should send for the Financial Secretary and tell him that someone hopes to be able to say a kind word to him, because he has been present for most of the debate and has suffered slings and arrows which ought not to have been cast at him. His back has looked more like that of

  1237
  a porcupine than the back of a Financial Secretary. That is poor reward for someone who had to go in to bat on a sticky wicket and defend Government intentions which were clearly supportable, namely, to give the House the opportunity to make a decision on a free vote. There cannot be many hon. Members who would disagree with that intention. The opposition is concerned with the manner in which the issue has been chosen and with the choice of issue.
  Many hon. Members have said that gambling is a moral issue. My position is quite clear—I am in favour of gambling and winning and opposed to gambling and losing. There is no doubt about the dangers of gambling and those hon. Members who have drawn attention to them should have given the rest of us credit for being aware of them.
  Mr. Mendelson: There is a difficulty about that. The gamblers mention only their winnings. The hon. Member for Worcestershire, South (Sir G. Nabarro) told us what he had won on by-elections, but he did not say how much he had lost on the by-elections at Gorton and Brightside.
  Mr. Ogden: I am grateful for that reminder. I asked him about Brightside, but not about Gorton. In between these two extremes, there are those who support gambling and see nothing wrong with it, and those who support it in principle, and see nothing right with it. Perhaps I should explain that I was brought up in a Primitive Methodist home. Gambling has been here for a long time, and is likely to be here for an equally long time. It is a fact of life.
  We have to come to a decision in the House about gambling. The majority of the House would, I believe, have preferred that this should have been left to a decision on the Private Member's Bill, as introduced by my hon. Friend the Member for Cleveland (Mr. Tinn), and that it should have been the duty of the Government to intervene only to ensure the integrity and efficiency of the organisation that would be set up.
  They would have given it underlying status, they would have said that it was an honest organisation, and have guaranteed it. I thought that the opinion of the House had been expressed on the
  1238
  Bill introduced by my hon. Friend. It was a little harsh of the Financial Secretary to say that the Government want to ensure that the House has a free vote. We have already had one. If I heard him rightly, he drew a distinction between a free vote on a Private Member's Bill and a free vote on Government business or an Opposition Motion. This is a very dangerous doctrine.
  If there is to be a vote, and I doubt it, having listened to the speeches, this automatically means that the Government will be committed to producing a scheme if the Clause is accepted. My objection is that the House is being asked to support or oppose the principle. I agree that it is logical to decide the principle, and decide later whether one supports the scheme that comes forward. The House is entitled to be illogical. I would have preferred a scheme brought forward by my hon. Friend the Member for Cleveland, which I could have opposed, or a scheme brought forward by the Government. We would know the type of organisation, the place, the profits. This is not something detailed and concrete, to which we can give a "yea" or "nay". It is only when the House has that information that we would be entitled to say"yea" or "nay".
  We listened carefully to the Financial Secretary. We can always rely on a Treasury Minister to give us good reasons why taxation should be increased. He explained that it was proposed to take 33⅓ per cent. from this fund in order to be fair to the football pools people, because we take that amount from them. This is equity, but not the kind of equity that I would support. It is one thing to take it as unearned income, out of profits; it is a different thing to take it from charitable organisations. This is what we would be doing. The Financial Secretary left a number of unanswered questions about the purpose, scope, organisation, headquarters of the lottery, its efficiency, controllers, its place in the national economy and accountability to the House.
  Finally, I have 14,751 reasons for opposing this and 14,750 of those are people employed on Merseyside, at present working for Littlewoods. A total of 1,589 of them are my constituents and I make no apology for defending such employment

  1239
  on Merseyside, unless someone else will come along and give us alternative employment. I had a visit from a pools courier, not the one who brings £75,000, who brought with him a lot of useful information. We employ a lot of people. If we can provide alternative employment it might be different. I do not like the idea of the hon. Member for Crosby (Mr. Graham Page) of farming this out. In principle, I dislike the idea. It is one thing to tax gambling; it is another to support and encourage it. For that reason alone, I hope that the House will oppose the Clause and support the Amendment.
  Sir Cyril Black: I agree with everything that the hon. Member for Liverpool, West Derby (Mr. Ogden) said about our lack of information on the proposals on which we are required to vote. I listened to what the Financial Secretary said, but it must be a rare occasion for the House to be asked to vote on any matter on which it has been left so completely in the dark about the Government's proposals. We do not know how much they propose to sell the tickets for. We do not know how many prizes there will be or what their size will be. We do not know who will run the scheme. Most important, we do not know what will happen to the money if there is a profit from the scheme.
  Having heard the Financial Secretary, it seems to me that three things are clear. First, in spite of all the protestations about neutrality, the Treasury wants this lottery. Secondly, the Treasury intends to take the lion's share of any money that the lottery may produce. Thirdly, if charities are fortunate in getting anything, it will be merely a derisory amount. I would advise hon. Members to ignore any belief that charities in which they are interested will benefit from these proposals, because, to put it no more strongly, what the Financial Secretary has said is indefinite and nebulous in the extreme.
  Reference has been made to the effects of a national lottery, if introduced, on the volume of savings. However, I do not think that anyone has referred to the significant speech of the President of the National Savings Movement only a week or two ago on the occasion of the annual congress of the movement. This is what Sir Miles Thomas said:
  1240
  "My own personal view is that a thoroughgoing national lottery would be unethical in itself, morally bad for the country and economically bad for our standing abroad. Surely there are opportunities enough for those who want to gamble without the State promoting and sanctifying it as a new form of social service. Surely the Government can get the revenue from gambling by taxation without giving it the dignity of the new aura of Government finance."
  Following that speech, and having heard the defence of a national lottery by the Financial Secretary, by an overwhelming majority the very large attendance at the congress passed the following resolution:
  "That this Committee expresses its strong disapproval of the suggestion of a national lottery and supports the personal views of the Chairman, Sir Miles Thomas, in the matter."
  With the emphasis and importance that I believe the Government place on savings, I cannot understand that the Government should be proceeding at this time above all others with this proposal when they have a clear indication from the National Savings Movement of the effect, in the judgment of that movement, upon national savings as a whole.
  I hope that the House will repudiate this undesirable, unethical and untimely proposal.
  11.15 p.m.
  Mr. Peter Mills: Much of what I wanted to say has already been said, but this is an important decision we have to make: whether or not we want a national lottery. I do not agree with the Financial Secretary that it will not have this effect. If we agree to it, I believe that the Government will go ahead, and very rapidly. If we vote for this Clause, it will go a long way along the road towards having a national lottery.
  I hope that everybody will think carefully about it, as the consequences could be very serious indeed. Some people may say that it does not matter, but I believe these sort of things do matter and that the Government should give some leadership in these matters. I much regret that they are, in a sense, encouraging a national lottery, as I do not want to see any extension in gambling at present, however attractive it may be.
  Tonight, we have had the attractive propositions of health, hospitals and re-

  1241
  search, but this is not the way to get them; the way is through savings, a better economic situation and further taxation on gambling. There is a large source still to be tapped and that is the way to provide the money so necessary for research, hospitals, and so on.
  It seems dreadful that this country should stoop to this method of providing funds 'or these worthy causes, so I hope that we shall support the Amendment.
  It is an important decision that we have to take. If we do not support the Amendment, we shall see a further extension of gambling, which would have serious consequences. It is something I do not wish to see at all.
  Question put, That the Amendment be made:—
  The House divided: Ayes 166, Noes 76.

  Division No. 257.]

  AYES

  [11.19 p.m

  Abse, Leo

  Hamilton, James (Bothwell)

  Nabarro, Sir Gerald

  Allen, Scholefield

  Hamilton, Michael (Salisbury)

  Newens, Stan

  Armstrong Ernest

  Hannan, William

  Noble, Rt. Hn. Michael

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

  Harris, Frederic (Croydon, N.W.)

  Ogden, Eric

  Atkinson, Norman (Tottenham)

  Harrison, Col. Sir Harwood (Eye)

  Orme, Stanley

  Baker, W. H. K. (Banff)

  Harvey, Sir Arthur Vere

  Osbom, John (Hallam)

  Baxter, William

  Harvie Anderson, Miss

  Oswald, Thomas

  Beamish, Col. Sir Tufton

  Haseldine, Norman

  Palmer, Arthur

  Bell, Ronald

  Hay, John

  Pardoe, John

  Bishop, E. S.

  Hazell, Bert

  Parkyn, Brian (Bedford)

  Black, Sir Cyril

  Heald, Rt. Hn. Sir Lionel

  Peel, John

  Blaker, Peter

  Herbison, Rt. Hn. Margaret

  Percival, Ian

  Body, Richard

  Hiley, Joseph

  Powell, Rt. Hn. J. Enoch

  Booth, Albert

  Hogg, Rt. Hn. Quintin

  Prentice, Rt. Hn. R. E.

  Braine, Bernard

  Hooley, Frank

  Price, Thomas (Westhoughton)

  Bromley-Davenport,Lt.-Col.SirWalter

  Hooson, Emlyn

  pym, Francis

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

  Houghton, Rt. Hn. Douglas

  Ramsden, Rt. Hn. James

  Buchan, Norman

  Howarth, Harry (Wellingborough)

  Randall, Harry

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

  Hughes, Rt. Hn. Cledwyn (Anglesey)

  Rhy8, Williams, Sir Brandon

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

  Hunter, Adam

  Ridley, Hn. Nicholas

  Butler, Herbert (Hackney, C.)

  Hynd, John

  Rippon, Rt. Hn. Geoffrey

  Callaghan, Rt. Hn. James

  Jackson, Peter M. (High Peak)

  Roberts,Rt.Hn.Goronwy(Caernarvon)

  Campbell, B. (Olclham, w.)

  Jenkin, Patrick (Woodford)

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

  Campbell, Gordon (Moray & Nairn)

  Johnston, Russell (Inverness)

  Roebuck, Roy

  Carlisle, Mark

  Judd, Frank

  Russell, Sir Ronald

  Chichester-Clark, R.

  Kaberry, Sir Donald

  Sandys, Rt. Hn. D.

  Clegg, Walter

  Kenyon, Clifford

  Sharpies, Richard

  Cullen, Mrs. Alice

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

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

  Cunningham, Sir Knox

  Kerr, Russell (Fentham)

  Sinclair, Sir George

  Currie, C. B. H.

  Kershaw, Anthony

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

  Dalyell, Tarn

  Kimball, Marcus

  Smith, John (London & W'minster)

  Dance, James

  Kitson, Timothy

  Steel, David (Roxburgh)

  Davidson,James(Aberdeemhire,W.)

  Lane, David

  Stodart, Anthony

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

  Lewis, Ron (Carlisle)

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

  Dempsey, James

  Luard, Evan

  Taylor, Frank (Moss Side)

  Dewar, Donald

  Lubbock, Eric

  Temple, John M.

  Dickens, James

  Lyon, Alexander W. (York)

  Thomas, Rt. Hn. George

  Digby, Simon Wingfield

  McAdden, Sir Stephen

  Tilney, John

  Dodds-Parker, Douglas

  MacArthur, Ian

  Turton, Rt. Hn. R. H.

  Douglas-Home, Rt. Hn. Sir Alec

  Mackenzie, Gregor (Rutherglen)

  van Straubenzee, W. R.

  Driberg, Tom

  Macretman, Robert

  Wainwright, Richard (Colne Valley)

  Dunn, James A.

  Macleod, Rt. Hn. lain

  Walker, Peter (Worcester)

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

  Mahon, Peter (Preston, S.)

  Wallace, George

  Eyre, Reginald

  Manuel, Archie

  Ward, Dame Irene

  Femyhough, E.

  Marten, Neil

  Watkins, Tudor (Brecon & Radnor)

  Foot, Rt. Hn. Sir Dingle (Ipswich)

  Mawby, Ray

  Weatherill, Bernard

  Foot, Michael (Ebbw Vale)

  Maydon, Lt.-Cmdr. S. L. C.

  Whitelaw, Rt. Hn. William

  Galbraith; Hn. T. G.

  Mendelson, J. J.

  Williams, W. T. (Warrington)

  Gilpern, Sir Myer

  Miscampbell, Norman

  Wilson, Geoffrey (Truro)

  Gilmour, Sir.John (Fife, E.)

  Monro, Hector

  Worsley, Marcus

  Glover, Sir Douglas

  More, Jasper

  Yates, Victor

  Goodhew, Victor

  Morgan, Elystan (Cardiganshire)

  Younger, Hn. George

  Gower, Raymond

  Morgan, Geralnt (Denbigh)

  Gregory, Arnold

  Morris, Charles R. (Openshaw)

  TELLERS FOR THE AYES:

  Grey, Charles (Durham)

  Morrison, Charles (Devizes)

  Mr. Michael Alison and

  Gurden, Harold

  Munro-Lucas-Tooth, Sir Hugh

  Mr. Peter Mills.

  Hall, John (Wycombe)

  Murton, Oscar

  NOES

  Allaun, Frank (Salford, E.)

  Biffen, John

  Channon, H. P. G.

  Bacon, Rt. Hn. Alice

  Boyle, Rt. Hn. Sir Edward

  Crosland, Rt. Hn. Anthony

  Bamett, Joel

  Bradley, Tom

  Crossman, Rt. Hn. Richard

  Beaney, Alan

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

  Crouch, David

  Dean, Paul (Somerset, N.)

  Iremonger, T. L.

  Rees-Davies, W. R.

  Diamond, Rt. Hn. John

  Jenkins, Rt. Hn. Roy (Stechford)

  Reynolds, Rt. Hn. C. W.

  Doig, Peter

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

  Richard, Ivor

  Doughty, Charles

  Kirk, Peter

  Rodgers, William (Stockton)

  Dunnett, Jack

  Lawson, George

  Rose, Paul

  English, Michael

  Lee, John (Reading)

  Sheldon, Robert

  Ennals, David

  Lever, Harold (Cheetham)

  Silkin, Rt. Hn. John (Deptford)

  Ensor, David

  Loughlin, Charles

  Silkin, Hn. S. C. (Dulwich)

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

  Mallalieu, E. L. (Brigg)

  Stonehouse, Rt. Hn. John

  Fisher, Nigel

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

  Taverne, Dick

  Fletcher, Raymond (likeston)

  Marquand, David

  Tinn, James

  Fraser, John (Norwood)

  Morris, Alfred (Wythenshawe)

  Varley, Eric G.

  Ginsburg, David

  Murray, Albert

  Walker, Harold (Doncaster)

  Gourlay, Harry

  Noel-Baker, Francis (Swindon)

  Watkins, David (Consett)

  Hamling, William

  Norwood, Christopher

  Weitzman, David

  Harper, Joseph

  O'Malley, Brian

  Whitaker, Ben

  Hirst, Geoffrey

  Oram, Albert E.

  Williams, Alan Lee (Hornchurch)

  Hordern, Peter

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

  Wood, Rt. Hn. Richard

  Horner, John

  Park, Trevor

  Howell, Denis (Small Heath)

  Parker, John (Dagenham)

  TELLERS FOR THE NOES:

  Howie, W.

  Peart, Rt. Hn. Fred

  Mr. R. Grabam Page and

  Huckfield, Leslie

  Perry, Ernest G. (Battersea, S.)

  Mr. Gwilym Roberts.

  Hunt, John

  Rawlinson, Rt. Hn. Sir Peter

  Further consideration of the Bill, as amended, adjourned.-[Mr. Concannon.]
  Bill, as amended (in the Standing Committee), to be further considered Tomorrow.

  OVERSEAS AID BILL
  Order read for resuming adjourned debate on Question [28th June], That the Bill be now read a Second time.
  Question again proposed.
  11.27 p.m.
  Mr. Frank Judd: In resuming our debate on the Bill, all of us who are concerned about the subject would like to express our appreciation of the extra time which has been found for the debate. We are sad that the extra time had to be found in this way, in a scramble at the last moment. It is our belief that the subject is not receiving the degree of attention which it deserves, and, as has been shown not only in the context of this debate, but in the context of what happened in the last debate on overseas aid and development, it is clear that we ought to be thinking more about the possibility of establishing a Select Committee which, among other responsibilities, could look at this important sphere of the Government's work.
  There are two other reasons why I welcome the Bill. First, the International Development Association has established beyond doubt an outstanding record of achievement in development work. Secondly, the fact that the Government are presenting the Bill to the House is yet another piece of evidence of the Government's commitment to the overseas aid and development programme. No one should underestimate the degree of respect and admiration which has been won both abroad and in this country from articulate leaders of opinion by the stand which the Government have made in their determination, following devaluation and the economic measures subsequently introduced, not to cut down the aid and development programme beyond the impact of devaluation itself.
  We ought to recognise that the Bill has fairly moderate objectives, because the operation of replenishment aims to raise a total of only 1,200 million dollars —about 400 million dollars annually— whereas not very long ago George Woods, while still President of the World Bank, pointed out that in terms of absorptive capacity the developing countries
  1246
  were in a position to use effectively 1,000 million dollars per annum over the next few years.
  It must be observed, in connection with the Bill and the operation of replenishment, that the proposals in effect must be endorsed by the United States Government. I hope that the Minister will give an assurance that even if this endorsement is not forthcoming, Her Majesty's Government will take a lead in making a stand to ensure that the operation of replenishment for this vital organisation succeeds in at least some form. In reviewing the relevance of the Bill and the operation of replenishment, we must consider the matter against the background of a number of vital considerations in the whole approach to development these days, and I will refer briefly to eight of these vital considerations.
  First is the motivation, or attitude, of the Governments of the recipient countries, an aspect which we do not often consider. I am referring to the sort of lead which has been given by the Government of Tanzania, who pointed out in their Arusha Declaration that external assistance, whatever its form, cannot of itself guarantee development but that development depends in the final analysis on the will and determination of the peoples and Governments of the territories concerned to see progress and that external aid must be judged according to how it fits in with that will and determination.
  In view of this significant breakthrough in thought about development and the lead given by the Government of Tanzania, I am perplexed by the decision of Her Majesty's Government to cancel all aid and technical assistance to Tanzania. Apart from the issue of pensioners, and on this we seem to be continuing a scheme which has no virtue and which should have been revised long ago, it seems that a social democratic Government are standing on their head if they are not giving priority in their development programmes to co-operating with a Government who are committed to such a philosophy of inter-dependence and are putting so much stress on self-reliance.
  Secondly, a vital consideration at present when considering the whole sphere of development is the problem of loans, and this is not unrelated to my first point.

  1247
  With the vast deadweight of capital and interest repayments round the necks of so many developing countries, their motivation and will for development is being crippled because their Governments and peoples are increasingly feeling that they are working harder all the time simply to pay off old loans. We must seek a solution to this problem.
  Thirdly, we must consider in depth the question of tied and untied aid. When considering countries which are at a critical stage of evolution, it is extraordinary that we, the developed countries, should be working out with them policies for development which are forcing them into making economic decisions on anything but sound economic criteria. Unfortunately, these developing countries are being forced into patterns of economic activity through tied aid which are distorting the growth of their economies.
  Fourthly, the lack of co-ordination in the development of a country too often, through unco-ordinated aid coming in on bilateral programmes, causes fragmentation in an economy at a time when there should be harmony. Too often there are unrelated, separate programmes of aid arriving from sources of origin thousands of miles away which pay lip-service to the principle of local planning Ministries or Departments but which basically yet again distort the economy because they are not being co-ordinated into practical, overall economic programmes based on the priority needs of the country.
  Fifthly, of vital importance in the development of a country is the need for a greater emphasis on regional development. There is the need for infrastructure and trade within regions of Africa, Asia and Latin America.
  Sixthly, we must look at the need for longer term planning. At the moment, many developing countries go through great difficulties because they are not able to plan with confidence in the long-term, as they are so dependent on the annual budgets of the donor countries, on the fluctuations in the financial well-being of those countries—as we have seen with the case of Tanzania—on the political relationships with individual donor countries. We must look at this aspect, because if we are talking in any real sense about assured development in
  1248
  developing countries those countries must be able to plan with some longer-term certainty.
  Seventhly, if we are to have any sense in the programme at all we must look at the vital need for the export earning potential of the developing countries. It is nonsense to be involved in giving aid and technical assistance if we are to deny those countries as they develop the opportunity to export their goods and materials.
  Finally, we must look at the need to get the right balance between labour intensive and capital intensive development, and here the whole philosophy of intermediate technology is vitally relevant.
  Looking at these considerations, and others could be mentioned, we can immediately demonstrate the proven value of the International Development Association. The Association provides a forum in which the developing and the developed countries can participate together. There is a sensible distribution of the demands made upon the developing and the developed countries. The developing countries are only asked to make 10 per cent. of their contributions in convertible funds.
  Here we have an operation in which it is seen that the developing countries have their part to play, and are expected to play it. Also, in this operation we see a forum for objective and sensible interplay of the experience of the developed countries with the felt needs and views of the developing countries. We also clearly see in I.D.A. a means whereby the loans to which I have referred can be made available on sensible and not on crippling terms. Incidentally, we also see a system which establishes a fair basis for contributions by the developed countries themselves.
  In I.D.A. we see the machinery for co-ordination to avoid the fragmentation I have mentioned. We also have the effective and authoritative framework for sound competitive tendering for projects to make sure that the developing countries are not being lead up the garden path in this respect.
  Here, immediately, are some proven advantages of I.D.A., but we should put on the record four reservations about the present situation. First of all, what is very sad in this operation of replenishment is the insistence of the United

  1249
  States on tying all its contribution. This is a retrograde step, and we should make it clear that we are very unhappy about it. Secondly, we must accept that whatever we do in respect of the replenishment of I.D.A. we must match it by a determined effort to move forward from the last U.N.C.T.A.D. in terms of progressive policies on tariffs so that we really open up markets for the developing countries.
  Thirdly, we must look at the degree to which I.D.A. and other agencies have, perhaps, tended to concentrate too much on capital intensive projects, and see how it could work more effectively on labour intensive projects as well. We must accept that complementary to any operation of this kind is the need for technical assistance—that is to say, the education and preparation of manpower to build up in any developing country the local resources necessary to make it genuinely able to manage its own economy.
  The Bill refers to regional development banks. These have a potentially very significant part to play in regional development, but the potential of the African Development Bank and the Asian Development Bank is far from being fulfilled. The African Development Bank, at the moment, has virtually no resources and the Asian is preoccupied, unnecessarily perhaps, with a quick return on capital investment. There is need for great effort on the part of our Government to see these problems overcome.
  In generally welcoming the Bill, we would do well to remind ourselves of the objectives of aid and why the Bill and replenishment of I.D.A. fit so well into the programme. Two primary objectives must be to see developing countries reaching genuine independence and reaching as rapidly as possible the point of self-generating economic growth. If we accept that these are laudable aims, a question which is frequently asked is: can we afford it? If we argue for aid and development in terms of charity, something we do to help other nations at our own expense and which we can afford to do only when we are relatively well-off, people may argue that in time of economic difficulty it is rather odd to be concentrating on aid programmes and giving them the priority which the Government continues to give
  1250
  to them. I think that these traditional charitable concepts are misleading and not very sound. As a nation, we cannot afford not to give high priority to aid and development.
  We have seen in recent months, perhaps more clearly than ever before in Britain's history, that we are utterly dependent on the international community for our economic well-being. As a trading nation which for its prosperity and for maintaining, let alone increasing, its standard of living, is dependent on the economic well-being of the international community as a whole we have to build up world purchasing power. Paul Hoffman has argued that in his days in industry he had always said that it was nonsense to set aside less than 4 per cent. of one's annual budget for market development. At this juncture, this is something which Britain has to take extremely seriously. It is not only that we want to build up world purchasing power, but, as a country so dependent on world stability, we have to try to lessen tensions. Probably one of the most fundamental tensions in the international community in the immediate future, and stretching beyond it, will be the problem of the gap between the affluent and the less affluent sections of the world's population. The majority of the world's population, which is less affluent, is increasingly aware of this gap which separates it from the privileged minority of which we are a part.
  The majority of the world's population, the under-privileged, happens to coincide in broad terms with the coloured section of the population. We have seen the tensions and the potentially explosive forces represented in racial conflict. Not only in terms of building up our markets in the long-term, but also in terms of overcoming the basic tensions which could undermine international stability, we have to give priority to closing this gap. If we do not achieve this, the uncertainties surrounding the future of the international community will very directly affect our well-being.
  For these reasons we have a very simple answer to those who argue that because of our present economic position we should be reviewing how much we are doing in terms of aid and development and that we should not be doing so much. We should say to them

  1251
  that if we are to avoid a recurrence of the sort of situation we are in at the moment in an even more aggravated form, we must give aid and development the highest priority. For this reason, if we look at our dependence on the international community, in our conduct of foreign policy, we shall have to work increasingly through international organisations.
  For another thing which we have seen clearly in recent months is that we are no longer a great imperial power, able to police our interests alone and able to go round the world ordering things as we would ideally like to see them. Therefore, we must club together with other nations to work out our destiny in terms of practical interdependence. It is for that reason that a Bill such as this, concerned with giving practical support to one of the most effective international agencies, is so much to be welcomed.
  11.45 p.m.
  Sir George Sinclair: I join those who have from both sides of the House supported the Bill and given it a warm welcome. The International Development Association has now a fine record of success behind it. I believe that, even in a time of financial stress, it is right that Her Majesty's Government should support the replenishment of the funds of the I.D.A. at the proposed higher figure. I am glad that the Bill has complete support from both sides of the House. At a time when Britain is hard up for funds, it is right that our own people, should know that the funds we are able to transfer to developing countries through I.D.A. are being properly used and are serving, not only the developing countries but also—here I agree with the hon. Member for Portsmouth, West (Mr. Judd)—our own long-term interests. The skill with which the I.D.A. has managed its funds and chosen its projects should be a reassurance to those who are responsible for putting the Bill before the House and seeking additional funds.
  I believe that the speech made by the Minister last Friday, when I was away in another country, established good ground on which those who believe in aid could stand against disillusioned attacks on the whole principle of aid.
  1252
  The work of the I.D.A. is a success story. I believe that we should give more publicity to it, not only in general terms, but in some description of the projects that it has made possible—the real advances in the infrastructure of many developing countries that have been financed through this fund.
  Apart from the sucess of the projects themselves, there is the valuable procedure—the careful vetting of the projects put forward, the discussion between the Association and the developing countries and the joint agreements on how schemes shall be carried out.
  The other feature which I think is probably the most important of all is that projects under I.D.A., are jointly financed. They cannot be undertaken unless the receiving country itself puts a high priority on the project and is prepared to pay half the cost. This is the litmus test, and it is important, because it means joint involvement. Having myself been involved for a number of years in trying to put in action just this principle that central government funds should go most readily to projects in which those who are benefiting from the schemes are prepared to commit themselves to meeting up to half or even more of the cost, I believe that these I.D.A. programmes have real social benefit; they require involvement of both sides and a bridge of common action between the affluent world and the developing world. This is a range of schemes, under the right kind of administration, which Great Britain should support.
  When we add to that the fact that, in recent times, for every £1 spent by Her Majesty's Government on I.D.A. 30s. has come back to this country in orders, we are on firm ground, even at a time of financial stress, in asking our country to support a transfer of resources of this kind.
  And so, I strongly welcome Clause 1 of the Bill, which deals with the replenishment of the fund.
  Even more, perhaps, I welcome Clauses 2 and 3. They provide for assistance for regional banks which draw on local resources as well as on resources from the developed countries. This is a partnership in action to which all countries involved contribute as they can. Anyone familiar with the working of the

  1253
  Colombo Plan and the attitude it has engendered of exchange of benefits— drawing away from the idea of charity but developing the idea of joint participation in projects in the regions themselves—is bound to welcome the general pattern of careful and constructive support for regional banks drawing upon the resources of the area as well as from the industrialised countries.
  I welcome Clause 3 because it brings a financially strong territory, Hong Kong, into the development of Asia, where Hong Kong's great markets may lie in the future. This is in the long-term interest of Hong Kong. It will bring collaboration between that outpost of successful free enterprise and the mixed economies of South-East Asia. That is the kind of partnership which anyone on this side of the House must welcome.
  Clause 4 ties up some loose ends in helping to make more attractive and secure the work of some of those who are engaged in technical assistance, one of the most important services which we render today and will be rendering for years to come to the developing countries.
  I would ask the Minister to tell us what steps he is taking through the I.D.A. and his aid programme generally for the better co-ordination of public aid and investment from the private sector. These should be considered as part of a total transfer of resources from this country to the developing countries, and one sector should take careful note of what is happening in the other. They should as far as possible be made to support one another. I have been critical—as the Minister is aware—of what was done or rather not done by Her Majesty's Government in consulting private enterprise on the spot in Singapore and Malaysia at the time when we were considering the terms of compensatory aid after the planned withdrawal of our armed services from Singapore and Malaysia. There, I believe, we failed to secure a proper co-ordination of the opportunities of private enterprise and the programmes of public aid which were being discussed. This lack of consultation could lead to waste and to loss of opportunities for free enterprise, on which the return on overseas aid largely depends.
  1254
  The terms of aid have already been fully dealt with. I agree that we must be careful about the terms we offer, especially for capital-intensive projects, so that aid is made effective and does not produce a growing burden which the countries cannot pay off without wrecking their development programmes. The hon. Member for Portsmouth, West dealt with the problem of planning our aid ahead. We should, I believe, commit ourselves for four to five years ahead in these programmes. This is important to the receiving countries. We should be prepared to bind ourselves, as certain other countries are already doing, to a progressive movement towards achieving the new and increased U.N.C.T.A.D. target of 1 per cent. of our gross national product in total aid to the developing countries. We should commit ourselves for four to five years ahead to an increasing programme until we meet that target. It is of great assistance to the developing countries if they can rely for four or five years ahead on a stable and measurable amount of aid coming not only from the international agencies but though bilateral aid, which must always play a major part in the transfer of resources.
  I agree with the hon. Gentleman that I.D.A. funds should no longer be concentrated on capital-intensive infrastructure projects, but should now take greater cognisance of the overwhelming needs of the agricultural sections of most developing countries. The developing countries themselves are increasingly coming round to this point of view. Technical advances in agriculture by the use of water, improved seed, fertilisers and new techniques of cultivation are making possible advances in the supplies of food which are of crucial importance not only to the health of these countries but to their internal stability and the saving of foreign exchange through doing away with the need to import food.
  With our great experience of agriculture overseas hon. Members can still offer a great deal of technical assistance here. I hope that not only through bilateral aid through the public sector but also through the I.D.A. we shall put greater emphasis on helping agriculture in the developing countries. I join in the plea that the Intermediate Technology Development Group, in which, once again.

  1255
  I declare an interest, should be given rather more robust support by the Ministry than they have given up to now. I am sure that the Minister and the Parliamentary Secretary are now both well aware of the impact of this movement, which is winning wider and wider support in international circles. It has an important contribution to make where perhaps progress can still be most spectacular—in the agricultural sector and in the rural areas, helping people at very little cost—this is the essence of the scheme—to raise their own standards of living.
  I welcome the Bill and would encourage the Minister, who has fought a strong battle at a time of great domestic difficulty in Britain, to persist in his efforts to keep up the level of aid. In particular, I hope he will succeed this evening in increasing the funds to be put at the disposal of the International Development Association.
  12.1 a.m.
  Mr. John Lee: I join hon. Members on both sides in welcoming the Bill. I echo the words of my hon. Friend the Member for Portsmouth, West (Mr. Judd) in expressing gratitude to the Government and the Chief Whip for providing extra time for the debate. It is interesting to see how an upsurge of wrath quite impartial in its ideological origins should have produced this situation. But it is only fair to say that the Minister and the Chief Whip gave way graciously, and that I think the House has been the gainer for what has happened.
  I express profound gratitude because when the package deal was brought before the House last January overseas aid was spared the axe. I can say this as one who spent most of last week staying out of my normal Lobby and on one occasion voted against it. In spite of my dislike of package deals, this was one of the factors which put me in the Government Lobby last January at a time when there was considerable controversy about the subject.
  As to the scope of the scheme, we were treated to a very critical speech at the end of the debate on Friday, and there seemed to be a threat of others. The hon. Member for Shipley (Mr. Hirst)
  1256
  spoke rather slightingly of the scheme. At the same time, he drew attention to one or two problems that excite legitimate criticism. He drew attention to the paradox of our own position as a debtor nation borrowing short term in many cases and lending long, not a procedure which commends itself as being financially sound. He also drew attention to the paradox of the situation whereby money is being provided for the Government of India and a specific portion of which is to repay interest on loans of capital previously provided.
  One must accept that this is a criticism, but it is only a peripheral matter. Most of us would say that, although these paradoxes are tiresome, to concentrate on that kind of criticism is to lose sight of the important aspects of the programme. Hon. Members on this side of the House are grateful to the hon. Member for Essex, South-East (Mr. Braine) for his very sympathetic and generous aproach and the helpful speech that he made, which commended itself enormously tho those of us who have an interest in these matters. If he excited a little displeasure from some of his more Poujadist hon. Friends, I hope that he will bear their strictures with fortitude.
  I agree with the suggestion by my hon. Friend the Member for Portsmouth, West that there should be a Select Committee to investigate and supervise the disbursement of overseas aid from this country. If we cannot have an adequate debate on overseas aid more than once in two years—which seems to be the case—the least we can hope for is a Select Committee at a time when the House is gradually proliferating Committees.
  I welcome the provision in Clause 4 of the Bill in relation to pensions. It will help to do what one is always hoping will be done in this country. It will make it easier for people to transfer from one occupation to another. There has been much talk of the desirability of people being able to move to and fro between the Civil Service and industry and of the need for greater trans-ferability between the home and overseas Civil Services. This would benefit both the country and those involved by providing them with a wider range of experience. It has been said of the Civil

  1257
  Service—and the Fulton Report confirmed it—that it is narrow in outlook. This proposal should provide a countervailing influence and widen the interests of civil servants.
  The hon. Member for Essex, South-East suggested some kind of analysis or stock taking of the progress made with overseas aid in the last 20 years. I am sure that we would welcome that. In accepting terms, no doubt the results in many cases have not been as great as we hoped or expected. But this cannot be said in general. Although criticisms, which I do not echo but understand, have been made of the aid programmes in general, I do not think that, in this case, it can be argued that the aid is not subject to the most stringent control that the most fastidious accountancy mind would demand, and it is not a bad thing that in some areas of aid there should be financial discipline.
  A sharp distinction should be drawn, therefore, between aid of an emergency kind, such as that offered by Oxfam, and the kind of economic aid designed to strengthen the economies of the recipient countries. This distinction was drawn long ago at the time of the Macpherson Report on Welfare in the West Indies, just before the Second World War. I looked up Andrew Shonfield's book "Attack on World Poverty", published seven or eight years ago, in which he said that we are more likely to make the greatest impact by concentrating our aid upon those countries nearer to the point of break-through.
  Sir G. Sinclair indicated dissent.
  Mr. Lee: I think that there is a case for saying that, at any rate, given our limited resources, one would rather like to see it concentrated in the areas where the greatest impact is likely to be made. This is in complete contrast with the situation of the Commonwealth Development Corporation, whose assistance is, for obvious reasons, spread over a very wide range of countries and projects such as those concerned with hotels, tourism, and airports, which are not so easy to justify as the kind of aid included in this programme.
  Sir G. Sinclair: Would not the hon. Gentleman agree that the Commonwealth Development Corporation itself exercised just the kind of scrutiny which is exer-
  1258
  cised by I.D.A. and as over as wide a range of projects, but nevertheless brought a reasonable return to this country, enabling it to go on financing new projects, and did this very successfully in territories far from take-off point, but at the stage of being most in need of help?
  Mr. Lee: Yes, I would accept that. I was not criticising its lack of financial discipline. I am glad that the hon. Gentleman has given me the opportunity to correct that impression. I think that it was a matter of too many projects in too many places. If he thinks that that is too harsh a criticism, perhaps the hon. Gentleman will accept that there is an argument for it.
  But I agree that, despite the unhappy start in many ways, the Commonwealth Development Corporation has done yeoman work in many places and has been able to provide assistance which has been genuinely economically useful. I should add, in fairness, that since its more recent activities have been concentrated on a number of island communities —and the great majority of the few dependent territories left within our control are, of course, of that category— it is only natural that its activities should be directed to tourism, and so on, because there is very little else to be done.
  Nevertheless, in the context of the Bill, we should be thinking about aid which has a wider impact, not necessarily or specifically about the Commonwealth aspect, and it would be right for the aid to be concentrated on countries where, on the whole, the greatest impact is likely to be forthcoming.
  On Friday, the hon. Member for Essex, South-East drew attention to the extraordinarily wide terms of reference of the regional banks which seem to permit them to invest in countries far from being under developed. This is an absolutely valid and pertinent criticisim. I should like to take up this argument and say that we would be in a better position to assist countries overseas if we could control capital movement much more than we do.
  Hon. Members on the left of my party have made the criticism that we have lacked capital control. That criticism has been largely directed to the fact that the absence of these controls has hazarded our economy even more than

  1259
  has been avoidable, but one could add the further criticism that, because capital has been allowed to be taken out and invested in developed countries like Australia and New Zealand, that has denied the more deserving countries, in this context, capital which they would otherwise have had.
  Mr. Braine: The hon. Gentleman is dealing with a most interesting subject. Is he aware that it has recently been asserted by the C.B.I, that the return on capital invested in under-developed countries is marginally higher than the return on capital invested in developed countries, and that there seems to be considerable advantage in encouraging the flow of private investment to underdeveloped countries?
  Mr. Lee: I am delighted to have that support. The hon. Gentleman and my hon. Friends below the Gangway and I may be able to get together.
  The free convertibility of sterling which the Conservatives disastrously introduced about 10 years ago has not helped us to control capital movements, but this is not a particularly partisan occasion and I am grateful to the hon. Gentleman for his assistance. However, the hour is late and it is appropriate that I draw my speech to a close.
  I hope that this scheme will not be stultified by the requirement that the 12 nations shall make 950 million dollars available before it gets off the ground. When the Parliamentary Secretary replies I hope that he will be able to say something about this. The crucial date for this to be implemented is very close. If we do not have any news of ratification by sufficient nations to form a quorum for the agreement, there will have to be a lot of rethinking, and maybe some other changes if we are to make the true contribution that we ought to be continuing to make, for the benefit of the under-developed world.
  12.15 a.m.
  The Parliamentary Secretary to the Ministry of Overseas Development (Mr. Albert E. Oram): The speeches in the debate, partly on Friday afternoon, and partly this evening, have been of two kinds. There have been those of the hon. Member for Essex, South-East (Mr. Braine), my hon. Friend the Member for
  1260
  Caithness and Sutherland (Mr. Maclennan), and a great deal of the speech of the hon. Member for Dorking (Sir G. Sinclair), which have been largely directed to the specific purposes of the Bill. Other hon. Members quite rightly, took this as an opportunity to discuss wider aid matters, more general than the specific Clauses in that Bill.
  I will reply to the second category first, and I shall have to do so more briefly than I would wish since I have a number of specific points related to the Bill to which I must reply. The hon. Member for Dorking explained why he was not present on Friday. If he had been here, I doubt whether he would have used the phrase "complete support of the House" for the Bill. The atmosphere on Friday was somewhat different from that this evening, as my hon. Friend the Member for Reading (Mr. John Lee) pointed out.
  The hon. Member for Shipley (Mr. Hirst) particularly attacked the Bill and it was evident that there were other Members opposite preparing to do so. It is worth emphasising, as the hon. Member for Essex, South-East did, that in this matter of the replenishment of the International Development Association's funds, apart from a small minority in the House, there is overwhelming support for the action of the Government, and overwhelming support for the work of I.D.A.
  The hon. Member for Shipley, who, unfortunately, is not here this evening, said that this country was in economic difficulties, and therefore we could not afford to help those worse off than ourselves. He illustrated this, when challenged, by a simple exercise in business ethics, by saying that his firm would not have prospered if it had to lend money to customers to enable them to pay the bills sent to them by the firm. I would counter that homely illustration with an equally homely one of my own, from the ethics of neighbourliness, rather than those of a strict business code. If a man is buying his house on mortgage, and is having difficulty in repaying to the building society, this does not preclude him from lending his neighbour a few pounds, if that neighbour happens to be out of work and his children are sick and hungry. This is an analogy on the world scene which we should have in mind. It

  1261
  is true that we as a country need to borrow. But it is also true that many countries would be only too eager to have our problems rather than theirs. We must recognise that in this two-world situation of the "haves" and the "have nots" we are definitely on the side of the "haves", and it is our moral duty to do what we can to help the "have nots".
  I am by no means saying that the case for overseas aid rests solely on its moral justification, important though that is. There is a very great deal of mutual benefit in aid giving, and a number of hon. Members have stressed it. My right hon. Friend made this very clear on Friday, as he did even more fully in the debate on 7th May. Therefore, there is no doubt that, as my hon. Friend the Member for Portsmouth, West (Mr. Judd) said, we cannot afford not to give aid.
  The only other two general points which I need take up before turning to some detailed points were made by the hon. Member for Dorking, who referred to the need to help agriculture, and by my hon. Friend the Member for Portsmouth, West, who spoke about the need to encourage labour-intensive developments in developing countries. This is a thesis which we have been able to discuss on earlier occasions, and I know that the hon. Gentleman and my hon. Friend recognise where my sympathies, and those of my right hon. Friend, lie. Far be it from me to detract from the credit of the Intermediate Technology Group, to which tribute has been paid. However, a good deal of the work which the Ministry has been sponsoring under other titles is of the same order as the kind of activity which the intermediate technologists urge us to engage in. Much of the work of the Tropical Products Institute is kindred to the kind of projects we are being urged by Dr. Schumacher and his associates to sponsor and encourage.
  Relating what the hon. Gentleman said about agriculture to the work of I.D.A., I can assure him that in recent years I.D.A. funds have been increasingly devoted to help both in agriculture and in education, and less to the basic infrastructure on which it perhaps concentrated in its earlier years. Referring to the total I.D.A. commitments up to date, of 1,730 million dollars, about 300 million dollars have gone to agriculture and
  1262
  forestry, and that 300 million dollars has been dispersed within the last three or four years. This emphasises that the policy is directed in the direction which I think the hon. Gentleman would wish.
  The other point which the hon. Member raised concerned the coordination of bilateral and multilateral aid and private capital. We are very much aware of the importance of this matter; we are constantly concerned with it. There is co-ordination in the work of the international consortia and the consultative groups under the World Bank. We have in our Ministry an aid co-ordination department which is constantly in touch with other Departments in Whitehall to ensure that in our aid there is the right kind of beneficial mix between Government capital and private capital and technical assistance in the kind of combination which the hon. Gentleman rightly advocated.
  I now turn to some of the points raised by the hon. Member for Essex, South-East in his helpful and constructive speech on Friday. Some of the details, as he will recognise, we can take up more readily in Committee. He chided us about a wrong date. I agree that there is an error and I am sure we shall have his support in putting that right.
  I can confirm the point he asked, that replenishments will be effective only when at least 12 contributing countries with an aggregate contribution of 950 million dollars have given formal notification of their agreement to this, and the hon. Gentleman will find this set out in paragraph 20 of the White Paper, Cmd. 3599. This requirement emphasises the overriding importance of the American contribution to which a number of hon. Gentlemen have called attention. We must all hope, as my right hon. Friend said, that American ratification will not be long delayed. We certainly want to set what example we can in this House and country, and that I am sure we are about to do.
  The picture is not so black with other contributors as the hon. Gentleman feared on Friday. He asked if it were true that only Denmark had so far ratified. We understand that eight countries, including Germany, have already ratified and that two more are well on the way

  1263
  to that point and that their pledged contributions, excluding our own, come to 240 million dollars. This is not what is required but it is an indication of considerable progress so we should not be pessimistic.
  I notice that my hon. Friend the Member for Portsmouth, West when referring to negotiations for replenishment, used the word "tying" in relation to the agreement reached. I hope he recognises that he must have been using the word loosely, in that the agreement does not tie I.D.A. funds in the way that we usually use the words "tied aid". My right hon. Friend explained the end-of-queue treatment of contributions on Friday and if my hon. Friend reads my right hon. Friend's speech he will find that we are a long way from having the tying of I.D.A. funds.
  On Clauses 2 and 3, the hon. Member for Essex, South-East raised the question of definition of a development bank, saying that the provision was too loosely worded and that this might enable development to go on in North America and Australia and so on. He said that this was a Committee point and I hope that he will agree that we can take it up next week.
  On the next point—
  Mr. Bernard Braine: There was a point which puzzled my hon. Friend and me. A moment ago, we understood the hon. Member to say that the funds of the I.D.A. are not normally tied, whereas, if he consults col. 1031 of the OFFICIAL REPORT for last Friday, he will see that his right hon. Friend said:
  "The funds of the I.D.A. have always been tied."—[OFFICIAL REPORT, 28th June, 1968; Vol. 767, c. 1031.]
  I am sure that this is a misprint for "untied" and we should get this straight.
  The Minister of Overseas Development (Mr. Reginald Prentice): I am reported as saying that. I hope I did not, and I have taken steps to have it corrected and the word "untied" inserted in the Bound Volume.
  Mr. Braine: I have a clear recollection that the Minister, who speaks with extraordinary clarity on these things, said "untied". The OFFICIAL REPORT is
  1264
  wrong here—and our words here are going to be carefully weighed.
  Mr. Oram: We are grateful to the hon. Gentleman for pointing that out. It is important to get it correct.
  Mr. Judd: While we are on the point, I should like to get clarification. My remarks referred to the contributions by the United States. I understand that until 1971 the contributions made by the United States must be used in terms of purchases within the United States. This, I understand, is tied aid, but I may be wrong.
  Mr. Oram: There is, in that sense, an element of tying in the earlier stages, but the whole of the United States' contribution will be available in a free form within the period of three years. This was explained by my right hon. Friend on Friday.
  The hon. Gentleman raised a point on Clause 3 about the guarantees that Britain would be required to give under the articles of the Asian Development Bank. He asked whether it would include Hong Kong. I am sure that he has gathered from the subsequent speeches that Hong Kong is included. Indeed, the main purpose of the Clause is to cover the membership of Hong Kong. Hong Kong wishes to be a member, and by the terms of the agreement Britain must guarantee Hong Kong's subscription. The amount of subscription is currently under negotiation.
  The hon. Member thought that there could not be other possibilities than Hong Kong. I assure him that there are two others, Brunei and Fiji. Britain is responsible for the external relations of those two territories. They are both associated with E.C.A.F.E. and, therefore, are potential members of the Asian Development Bank.
  The last point raised by the hon. Member on the Bill was the reason why it was expected the Clause 4 would not require any extra money. The point is that Government expenditure under this pensions scheme relates only to the Ministry's corps of specialists or technical assistance officers while they are in Government service, and the Clause in no way increases the number of these people who will be employed. It simply includes people from the Channel Islands

  1265
  and the: Isle of Man as people who are qualified to serve in this way. It does not increase the numbers and, therefore, does not increase the funds which will be needed.
  The hon. Gentleman raised the much broader question of responsibility for overseas pensions. He recognised, I think, that the Bill does not by any means directly affect this question. As he said, this is not the occasion to go into this matter in detail. I assure him, however, that my right hon. Friend has recently given careful reconsideration to this issue but has not felt able to bring about any change of policy in this matter. A major difficulty is that we are operating within a well-known stringent aid programme, and to take over responsibility for pensions would involve either finding new aid money, which in present circumstances, regrettably, we cannot find, or taking it out of the existing programme. This would mean that we would almost certainly need to rob poor nations to relieve richer nations of responsibilities which, at present, they are able to fulfil.
  The only other point that I need make in reply concerns Woods' appeal for a "grand assize". The hon. Member for Essex, South-East asked for a British initiative in this. He said that my right hon. Friend had often uttered sympathetic noises, but he wanted something more forthright than that. I can offer not much more than sympathetic noises tonight, but I would make this point and I am sure that the hon. Gentleman will recognise this. If this concept of a grand assize is to have real value, it must be, and must be seen to be, over and above Governments. It must be independent of Governments. We therefore welcome the fact that it was the then President of the Bank who made the suggestion, and we feel that it is right that the initiative should come from there. It is our duty to indicate, as we have done, that we welcome this initiative from the Bank and that we should willingly co-operate in the work of this grand assize, but we feel that that is how it should be formed, with the initiative on the side of the Bank all the time.
  I welcome the speeches made tonight and on Friday which described in general terms the high value of the work of the
  1266
  International Development Association. The hon. Member for Essex, South-East, in particular, spelled out some of the Association's achievements and the soundness of the principles upon which the Association works. I join him thoroughly in that commendation. It is because my right hon. Friend and the Government see great value in the work which I.D.A. does that we confidently ask for the endorsement of the Bill by the House.
  Question put and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Committee of the whole House.—[Mr. loan L. Evans.]
  Committee this day.

  OVERSEAS AID [MONEY]
  Queen's Recommendation having been signified—
  Resolved,
  That, for the purposes of any Act of the present Session to enable effect to be given to international arrangements for the making of contributions and other payments to the International Development Association, it is expedient to authorise—

  (1) the payment out of moneys provided by Parliament—

  (a) of sums required for making payments to the Association on behalf of Her Majesty's Government in accordance with any arrangements made by the Board of Governors, or with members, of the Association, and for redeeming any notes or other obligations issued to the Association in accordance with any such arrangements;

  (b) of sums required for making contributions to the capital stock of any international regional development bank on behalf of Her Majesty's Government in accordance with any international agreement or other arrangements and for redeeming any notes or other obligations issued to any such bank in accordance with any such arrangements;

  (c) of sums (not exceeding in the aggregate £5,000,000 or such greater amount as may be specified in an order made by the Minister of Overseas Development with the approval of the Treasury) which may be required for making payments on behalf of Her Majesty's Government in fulfilment of any undertaking given in pursuance of the Asian Development Bank Agreement that they will be responsible for obligations under the agreement of any country or other territory for whose external relations they are responsible;

  (d) of any sums required by that Minister for paying the whole or a proportion of any

  1267
  contribution payable by virtue of the said Act of the present Session by a participant in the Overseas Service Pensions Scheme established under section 7 of the Overseas Aid Act 1966 to the Overseas Service Pensions Fund so established.

  (2) The payment into the Consolidated Fund of sums received by Her Majesty's Government—

  (a) in pursuance of any agreement or arrangements mentioned in paragraph (l)(a) or (b) above; or

  (b) in repayment of any payment mentioned in paragraph (1)(a) above.—[Mr. Prentice.]

  PUBLIC TRUSTEE (MRS. SCANLAN)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. loan L. Evans.]
  12.37 a.m.
  Mr. Humphrey Atkins: The Public Trustee is an official appointed by and reporting to the Lord Chancellor. It is not very often that the activities of the Public Trustee are debated in the House, even though he has a substantial department and, I understand, employs about 35 professionally qualified staff and about 530 other staff. The last occasion on which the affairs of the Public Trustee were raised substantially in the House was about 4½ years ago when the then Member for Solihull, Sir Martin Lindsay, raised a number of questions affecting the Public Trustee's Department and made a number of allegations about the way in which that officer handled various estates.
  The matter which I wish to raise today is considerably smaller than that raised by Sir Martin Lindsay four years ago, but I suggest that it is no less important because it is smaller. It might even be said that it is more important because, in answer to my hon. Friend the Member for Petersfield (Miss Quennell) on 24th January, the Attorney-General made it clear that of all the estates handled by the Public Trustee, over half are estates valued at £5,000 or less. It therefore seems that the great bulk of the Public Trustee's work is done in handling the smaller estates, which are no less important to the people concerned than are estates running into figures many times exceeding that. The particulr matter to
  1268
  which I wish to refer could be classed as one of the smaller matters that the Public Trustee handles, but to the people concerned it is of the greatest importance.
  Briefly, I will relate to the House the facts which form the subject of the important questions which later I shall put to the Solicitor-General. Mrs. Scanlan was one of my constituents who some years ago made a will under which, after two bequests, she left her house, which was virtually the whole of her property, in trust for her son's use during his lifetime, and thereafter absolutely to charity. One of the executors for her will was her son but, understandably, Mrs. Scanlan looked for the other executor and trustee to some person or body who might reasonably be expected to outlive her son. It is not altogether surprising that she chose the Public Trustee, who was appointed under the terms of the will as the other executor and trustee.
  However, before Mrs. Scanlan died the circumstances somewhat changed. Her son married and Mrs. Scanlan decided to change the main provision of her will and leave her property outright to her son. I appreciate that she could have done this by scrapping her original will and making a new one, but she decided not to do that. She wanted the two bequests to stand and therefore, instead of re-writing her will, she made a codicil by which she left her property, apart from these two bequests, outright to her son.
  Subsequently she died. It is clear, therefore, that her testamentary instructions consisted of three bequests, two very small and the great bulk to her son, who was also one of the executors. Her son, my constituent Mr. Scanlan, asked the Public Trustee if he would renounce probate. After all, there were two executors, it was a simple will and it seemed to him that there was no particular need why he should not be the sole executor. The Public Trustee refused to do this. I am not quarrelling with his right so to refuse, but I should like to know why he refused in this case.
  As the hon. and learned Gentleman knows, I took the matter up with the Lord Chancellor who, in a letter to me, said that the Public Trustee was
  "… reluctant to … renounce probate … unless there are exceptional circumstances …"

  1269
  It would be interesting to know what sort of exceptional circumstances would cause him to renounce. This was a clear case in which he might reasonably have been expected to do so. It was a simple will, there was another executor and I see no reason why the Public Trustee insisted on acting.
  However, in this case he did, and the settlement of Mrs. Scanlan's estate proceeded. The bulk of the work of settlement was done by the son's—that is, the other executor's—solicitors. But when the estate had been settled, the Public Trustee then sent the estate a bill. Leaving aside the petty expenses, the Public Trustee's account was for £78. This may not seem a large sum, but when I say that that figure amounted to more than the total of two of the three bequests, it will be realised that in an estate of this size it was a substantial amount.
  This sum was challenged by the other executor. A certain amount of correspondence ensued, and after a time the Public Trustee agreed to revise his charge from £78 to £52. This gives rise to certain questions. How was it that the Public Trustee did not calculate his charges in the first place if he regarded the final figure of £52 as proper?
  This raises a serious matter. If my constituent had not challenged the Public Trustee the estate would have had to pay the first and higher charge, and it was only after that challenge that the Public Trustee agreed to reduce it. But in how many cases have people who have placed their affairs confidently in the hands of the Public Trustee, expecting to be treated reasonably, been asked to pay, and have paid, a higher charge than the Public Trustee, on reflection, agrees to be necessary? The Public Trustee owes a duty to estates to calculate his charge accurately from the beginning, and not to wait until he is challenged before he does so.
  The second point is that even the reduced charge of £52 was higher, by 25 per cent., than the bill sent in by the solicitors of the other executor. As I have said, the other executor's own solicitors did the bulk of the work, and their account was substantially lower than even the reduced charge of the Public Trustee.
  1270
  The Lord Chancellor, in his letter to me to which I have referred, says that the Public Trustee's charges are fixed by the Treasury with his approval. I therefore hope that as a result of this short debate the Solicitor-General will use this authority to look into the whole question of the Public Trustee's fees; and that he will be able to give me an answer, to the specific questions I have asked.
  I hope, however, that he will go further. It is popularly supposed that the Public Trustee will act to preserve the value of the estates, and will make reasonable charges for his work. In this case, it appears to me that his action has diminished this estate by an unreasonable amount, and that the work he is doing is not what people suppose it to be. I hope, therefore, that the hon. and learned Gentleman will be able to use this opportunity to clear up the doubts that have arisen in my mind and, I fear, in the minds of many other people.
  12.47 a.m.
  The Solicitor-General (Sir Arthur Irvine): I welcome the opportunity afforded by the hon. Member for Merton and Morden (Mr. Humphrey Atkins) to consider the action taken by the Public Trustee in a particular case. If I may say so, the hon. Member stated the facts of the matter accurately, and I will not take up the time of the House in recapitulating them.
  It was on 16th August, 1966, that the Public Trustee was informed of Mrs. Scanlan's death, and was asked whether he would renounce his executorship. He declined to do so. The hon. Gentleman, quite understandably, did not give the details of the estate with which we are here concerned, but it is perhaps useful to have it on the record that the total of the estate was £3,949 11s. 11d. It comprised, as the hon. Gentleman indicated, in the main the freehold of a house in Church Lane, Merton Park, and for the rest, some £629 worth of National Savings Certificates, four fully-paid policies with an insurance company, and an element of household goods. Save for two legacies of £50 each, the whole estate was bequeathed to her son absolutely.
  From 16th August, 1966, to March, 1967, the Public Trustee. Mr. Scanlan, as executor, and his solicitors were

  1271
  engaged in getting probate, collecting the assets and distributing the estate, and in May of that year the Public Trustee presented Mr. Scanlan with his account, including his charges in accordance with the scale of fees, totalling £78 6s. 2d. and petty expenses, £6 9s., making a total of £84 15s. 2d. Thereafter Mr. Scanlan asked if the fees could be reduced and the Public Trustee agreed to waive one-third of the acceptance and withdrawal fees, which reduced his charges to £52 4s. 10d.
  It was in February, 1968, that the hon. Member drew the matter to our attention and said—I hope that I paraphrase fairly the position as he put it to us—that although there was no necessity for the Public Trustee to act as executor, he declined to withdraw and as a result this small estate incurred his charges additional to those of the solicitors acting and those charges were in excess of the solicitors' even after the agreed reduction. The question whether the Public Trustee is prepared to renounce probate is always dealt with personally by the Public Trustee. That occurred in the present case. He looked at the matter himself.
  There were two reasons why he refused to do so in this instance. Mrs. Scanlan had appointed the Public Trustee executor to her will. She did not see fit to revoke the appointment in her codicil made only a short time before her death, and she had put on his shoulders the responsibility for paying the two legacies and distributing the residue to his co-trustee. In the circumstances Mrs. Scanlan must have wished the Public Trustee to act and he therefore had a clear duty to do so. If the Public Trustee just renounces probate when invited to do so, it would undermine public confidence in him.
  Before doing so he has to satisfy himself that there are exceptional circumstances justifying that course. He found none in this case. The only guidance given to him by the Public Trustee Act is contained in Section 2(3) which states that:
  The Public Trustee may decline, either absolutely or except on the prescribed conditions, to accept any trust, but he shall not decline…"
  I ask the House to note this—
  1272
  "to accept any trust, on the ground only of the small value of the trust property."
  When the papers in this case were drawn to my attention, I wish the hon. Member to know, I at once addressed my mind to the point that the testatrix had first provided that her house was to be held in trust and later, in the codicil, left the house unconditionally to her son. I asked the question, was it reasonable to draw the inference in those circumstances that when she made this change in her disposition the testatrix, if she had thought about it, would have revoked the appointment of the Public Trustee as executor? That question occurred to me and I gave it thought. It has to be remembered that the Public Trustee is very often executor where there is no trust. In the case of Mrs. Scanlan the appointment of the Public Trustee as co-executor with her son was made in a will dated 27th December, 1960. By a codicil dated 1st June, 1963, she gave two pecuniary legacies and otherwise confirmed the will. By a codicil made on 16th April, 1966, she revoked the life interest in the house, which was given to her son and gave him the fee simple of the house absolutely, but she left the appointment—this is what I ask the House to observe—of executors in her original will undisturbed.
  It is not unimportant on analysis that the second codicil was a typed document in which the date was typed as "—date of— 1964" and then the date was inserted in manuscript and the year altered to 1966 and initialled. If the codicil had in fact been originally prepared in 1964, the testatrix had had two years to consider whether she should modify it before she finally executed it in 1966 in the presence of her medical adviser and a neighbour.
  There were, in those circumstances, I suggest, good grounds for thinking that there was no oversight here on the part of the deceased when the matter is analysed. It was certainly no last-minute change of provision on her part. There was reason to think that there was no desire on her part that the Public Trustee should, contrary to her original intention, not act. In those circumstances, the Public Trustee, in my view of the matter, owed her a duty to act.
  That is what I have to say upon the first limb of the argument put to the

  1273
  House by the hon. Gentleman. I turn now to the matter of the charges. The Public Trustee is required by Statute to be self-supporting, his income from fees meeting the salary and other expenses of his office. But, unlike banks and other institutional trustees, he is not required to make a profit. The fees are fixed so as to achieve this balance. Naturally, like other organisations, his office has been affected by rising costs generally. He is liable for S.E.T., and work connected with the Capital Gains Tax has increased his expenditure. But the fees have remained unchanged over the last five years.
  I have mentioned, as did the hon. Gentleman, that the Public Trustee in this instance reduced the acceptance and withdrawal fees by one-third, a reduction of £26 1s. 4d. I am asked why this reduction was not applied in the first place. The level of fees to be applied by the Public Trustee is determined by the Public Trustee Fees Order, 1957, Statutory Instrument No. 485 of the year. We are dealing here, therefore, with a statutorily supported scale of fees. I suggest that it is appropriate and right, therefore, in determining what fees should be applied, to begin at that base. This is what is invariably done. From that point, if inquiries are made and there are thought to be grounds for reducing the charges, consideration is given to the circumstances. I am sure that the hon. Gentleman will not want to get dialectically into the position where he is raising any kind of protest at the reduction which was applied in the case of this estate.
  It is said that the solicitors' charges were less than the Public Trustee's. There, is no basis for the comparison between the two. I want to face the point as
  1274
  fairly and squarely as I can. In this case we are not dealing with the instance of a solicitor acting as a solicitor-executor. The fees of a solicitor-executor acting as such would, one supposes, have been substantially higher. Knowing what the scales are, we can say that they would have been higher.
  The amount of work which the solicitor had to do in this instance was diminished by the Public Trustee's activity. It was the Public Trustee who communicated direct with the Revenue to obtain clearance from tax liability. It was the Public Trustee who corresponded with regard to the valuation, who examined the draft probate papers, who opened the banking account, who applied for encashment of the National Savings Certificates. All that was work done by the Public Trustee.
  Although I simply set out in this debate the headings of what was done, there was a considerable amount of work involved. It is a fair point to make that the work done by the Public Trustee had the consequence of diminishing the work which the solicitor was called upon to do.
  The whole matter has been studied carefully by us, and we have come, not complacently or superficially but after analysis, to the conclusion that on the decision not to renounce and in the matter of the charges applied we are satisfied that, as we would expect, the Public Trustee acted with correctness and efficiency in the performance of his public duty.
  Question put and agreed to.
  Adjourned accordingly at one minute past One o'clock.

EMPLOYMENT AND PRODUCTIVITY
  Wool, Jute and Flax Industry (Training Levy)
  Wool, Jute and Flax Industry (Training Levy)
  Employment
  Employment
  Training Boards (Administrative Costs)
  Training Boards (Administrative Costs)
  Equal Pay
  Equal Pay
  Bradford Colliery, Manchester (Closure)
  Bradford Colliery, Manchester (Closure)
  Unemployment (Northern Region)
  Unemployment (Northern Region)
  Labour Forces (International Table)
  Labour Forces (International Table)
  Stoppages of Work (International Table)
  Stoppages of Work (International Table)
  Hereditary Peers (Gainful Employment)
  Hereditary Peers (Gainful Employment)
  Disabled Persons
  Disabled Persons
  National Board for Prices and Incomes
  National Board for Prices and Incomes
  Directors' Salaries
  Directors' Salaries
  Retail Price Index
  Retail Price Index
  Wages and Salaries
  Wages and Salaries
  Nationalised Industries (Senior Officials)
  Nationalised Industries (Senior Officials)
  Engineering Industry (Wage Claim)
  Engineering Industry (Wage Claim)
  Unemployment (North East)
  Unemployment (North East)
  Nationalised Industries (Prices)
  Nationalised Industries (Prices)
  Unemployment (Northumberland)
  Unemployment (Northumberland)
  Epileptics (Sheltered Workshops)
  Epileptics (Sheltered Workshops)
  Mr. Jocelyn Hambro (Salary)
  Mr. Jocelyn Hambro (Salary)
  Training Levies (Administrative Costs)
  Training Levies (Administrative Costs)
  Unemployment
  Unemployment
  Salary Increases
  Salary Increases
  PALACE OF WESTMINSTER (LIGHTING STANDARDS)
  PALACE OF WESTMINSTER (LIGHTING STANDARDS)
  SPECIALIST SELECT COMMITTEES
  SPECIALIST SELECT COMMITTEES
  HOUSE OF COMMONS (DINING FACILITIES)
  HOUSE OF COMMONS (DINING FACILITIES)
  HOUSE OF COMMONS (OFFICE ACCOMMODATION)
  HOUSE OF COMMONS (OFFICE ACCOMMODATION)
  CHEMICAL AND MICROBIOLOGICAL WEAPONS (TREATY)
  CHEMICAL AND MICROBIOLOGICAL WEAPONS (TREATY)
  NUCLEAR WARFARE
  NUCLEAR WARFARE
  BONDED DEBTS
  BONDED DEBTS
  U.S.S.R. (EXPULSION OF BRITISH CITIZENS)
  U.S.S.R. (EXPULSION OF BRITISH CITIZENS)
  UNDERGROUND NUCLEAR TEST EXPLOSIONS
  UNDERGROUND NUCLEAR TEST EXPLOSIONS
TECHNOLOGY
  Mallory Batteries Limited
  Mallory Batteries Limited
  Dounreay Fast Reactor
  Dounreay Fast Reactor
  Computer Industry
  Computer Industry
LOCAL GOVERNMENT
  Radio Communications Advisers
  Radio Communications Advisers
  Land Fund (Historic Buildings)
  Land Fund (Historic Buildings)
HOUSING
  Rehousing (Clearance Areas)
  Rehousing (Clearance Areas)
EDUCATION AND SCIENCE
  Radio Research
  Radio Research
  Summerhill School
  Summerhill School
  Synthetic Proteins and Carbohydrates
  Synthetic Proteins and Carbohydrates
  11-Plus Examination, Bootle
  11-Plus Examination, Bootle
  Maricourt Comprehensive School, Bootle
  Maricourt Comprehensive School, Bootle
  Swimming
  Swimming
  Students (Accommodation Charges)
  Students (Accommodation Charges)
  OFFICIAL SECRETS ACT (PROSECUTIONS)
  OFFICIAL SECRETS ACT (PROSECUTIONS)
  UNITED CLEARING LIMITED
  UNITED CLEARING LIMITED
COMMONWEALTH AFFAIRS
  Gibraltar Manpower Commission
  Gibraltar Manpower Commission
  Gibraltar (Constitutional Discussions)
  Gibraltar (Constitutional Discussions)
  Dependent Territories
  Dependent Territories
AGRICULTURE, FISHERIES AND FOOD
  Foot-and-Mouth Disease, Wales
  Foot-and-Mouth Disease, Wales
  Biscuits (Sizes and Prices)
  Biscuits (Sizes and Prices)
  Charolais Cattle (Imports)
  Charolais Cattle (Imports)
MINISTRY OF DEFENCE
  Medical Officers
  Medical Officers
  Qualified Doctors (Direct Entry)
  Qualified Doctors (Direct Entry)
  Regular Commissions Board (Rejected Candidates)
  Regular Commissions Board (Rejected Candidates)
  Sandhurst (Entrants)
  Sandhurst (Entrants)
NATIONAL FINANCE
  Petrol Tax
  Petrol Tax
MINISTRY OF HEALTH
  Royal Commission on Medical Education (Psychiatry)
  Royal Commission on Medical Education (Psychiatry)
  Family Planning
  Family Planning
  National Health Service (Green Paper)
  National Health Service (Green Paper)
  Aerosol Asthma Sprays
  Aerosol Asthma Sprays
  Mentally Subnormal Patients (Staffs)
  Mentally Subnormal Patients (Staffs)
  Prescription Charges
  Prescription Charges
  Epileptics (Prescription Charges)
  Epileptics (Prescription Charges)
HOSPITALS
  Psychiatric Services
  Psychiatric Services
  Abortions (Notifications)
  Abortions (Notifications)
  Psychiatric Consultants
  Psychiatric Consultants
  Consultants and Registrars
  Consultants and Registrars
OVERSEAS DEVELOPMENT
  Former Dependent Countries (British Officials Pensions)
  Former Dependent Countries (British Officials Pensions)
HOME DEPARTMENT
  High Security Risk Prisoners
  High Security Risk Prisoners
  Mandrax
  Mandrax
PUBLIC BUILDING AND WORKS
  Palace of Westminster (Hut, Commons Court)
  Palace of Westminster (Hut, Commons Court)
  Government Office Building, Horseferry Road
  Government Office Building, Horseferry Road
SCOTLAND
  Unregistered Teachers
  Unregistered Teachers
  Swimming
  Swimming
BOARD OF TRADE
  Local Employment Acts and Industrial Development Act (Assistance)
  Local Employment Acts and Industrial Development Act (Assistance)
  Male Employment, Rhondda
  Male Employment, Rhondda
TRANSPORT
  Directorate General of Economic Planning (Staff)
  Directorate General of Economic Planning (Staff)
  Traffic Scheme, Carlisle (Ambulance Route)
  Traffic Scheme, Carlisle (Ambulance Route)
  London Transport (White Paper)
  London Transport (White Paper)
  Motor Cyclists (Safety Helmets)
  Motor Cyclists (Safety Helmets)
RAILWAYS
  Hurst Green—Lewes Line
  Hurst Green—Lewes Line
  Diesel Trains (Fires)
  Diesel Trains (Fires)
  COLNE VALLEY-HUDDERSFIELD AREA (ECONOMIC STUDY)
  COLNE VALLEY-HUDDERSFIELD AREA (ECONOMIC STUDY)

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

NORTH ATLANTIC FREE TRADE AREA
LORD MOYLE: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they have expertly examined the NAFTA proposals; and, if so, whether they will now publish their conclusions.]
THE MINISTER OF STATE FOR FOREIGN AFFAIRS (LORD CHALFONT): My Lords, as my right honourable friend the Prime Minister explained in another place on March 21, Her Majesty's Government studied the suggestion for a North Atlantic Free Trade Area intensively before announcing our decision to apply for entry into the European Economic Community on May 2, 1967.
LORD MOYLE: My Lords, while thanking my noble friend for that reply, may I ask him whether he does not think that it would he useful as well to publish the Government's findings upon this
2
proposal, so that the people of this country may have a basis upon which to assess the relative merits of the North Atlantic Free Trade Area and the Common Market?
LORD CHALFONT: My Lords, I think it is a fallacy to suppose that there are any relative merits between these two suggestions; but indeed our considerations that resulted from our study were presented, in debates in this House and in another place, after our application to join the European Economic Community in May, 1967.

WESTMINSTER HALL ROOF TIMBERS
LORD TREFGARNE: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government what progress has been made with the treatment of the roof timbers in Westminster Hall; when they expect the work to be completed, and what degree of protection they expect the treatment will offer.]
THE PARLIAMENTARY SECRETARY, MINISTRY OF PUBLIC BUILDING AND WORKS (LORD WINTERBOTTOM): My Lords, about half the work has been completed and we plan to finish the rest by the middle of 1970. We hope that the treatment will afford permanent protection against the ravages of the death watch beetle, but we shall have to wait five years before

3
we can determine how far it has been successful.
LORD TREFGARNE: My Lords, I am grateful to the noble Lord for that informative reply.

THIRD LONDON AIRPORT INQUIRY
2.39 p.m.
LORD BALFOUR OF INCHRYE: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government why no commercial aviation pilot of suitable and recent experience was nominated as a member of the new Lord Airport inquiry; and whether Her Majesty's Government will now consider such an addition to the Committee membership.]
LORD BESWICK: My Lords, as I said in answer to a similar Question on June 27, the field of expertise covered by the membership of the Commission is already wide and it would be impossible to include representation of all aspects relevant to this matter. The Commission, of course, will be free to seek outside advice from whatever sources they wish and interested individuals and bodies, such as the British Airline Pilots Association, will have the opportunity to submit evidence.
LORD BALFOUR OF INCHRYE: My Lords, arising out of that reply, may I ask the Minister whether he appreciates that my Question is really very different from the one to which he referred, in that this Question refers to the most honourable and skilled body of commercial captains of aircraft who, after all, will be the constant and permanent users of the airport? Therefore, is it not logical that a member of that profession should be included in this Commission? Will the Government not be obstinate on this matter but reconsider it?
LORD BESWICK: My Lords, I quite agree the Question is different, but I am afraid the answer is the same. The noble Lord knows that I think a pilot point of view would be useful, but I am abso-
4
lutely certain that, although they are not represented on the Commission, their point of view will be known and will be taken into account.
LORD WAKEFIELD OF KENDAL: My Lords, is it not important that an experienced pilot should be able to give evidence during the discussions that the Commission no doubt will have? That is the point. Surely a very widely experienced pilot must be able to make a most valuable contribution to the deliberations of this body.
LORD BESWICK: My Lords, there will be more discussion on this matter than there has ever been in the history of Commissions, and I am absolutely certain that there will be an opportunity for flying personnel, either individually or through their association, to make known their points of view. Setting up a Commission of this kind is a difficult matter if everyone is to be represented. I should have thought that the present size was large enough. As I said last week, although each of us might have shaped the Commission just a little differently I hope that now they have been appointed, we can let them get on with their work.

BAC 2–11 AIRCRAFT PROJECT AND AIR-BUS PROPOSALS
3.41 p.m.
THE EARL OF KINNOULL: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government in view of the extensive sales orders of the Rolls Royce RB 211 engine in America and the current report on the lack of support for the European airbus, whether they will reconsider now their decision to abandon the BAC 2–11 project.]
LORD BESWICK: My Lords, the Government decided that they could not support the BAC 2–11 project because they were not satisfied that the market demand would justify the necessary R and D expenditure. The decision on the future of the air-bus has yet to be taken.
THE EARL OF KINNOULL: My Lords, I thank the noble Lord for his reply. Could he confirm or deny the

5
discouraging reports—and I am sure we have all read about them in the Press—about the lack of support by the airline operators for the European air-bus concept, and could he say how soon a final decision as to the go-ahead for this project will be made?
LORD BESWICK: My Lords, the position remains that before a decision is taken to proceed with this project, there must be a commitment from the three sponsoring countries for a minimum order. I have seen this speculation in the Press, but the decision as to whether or not the project can go ahead will be taken this month by the three member Governments, Britain, France, and Germany, and of course they will be in full possession of all the information that the market researchers have been able to gather.
THE EARL OF KINNOULL: My Lords, if Rolls Royce had won their engine order with the Americans before a decision on the BAC 2–11 had been taken, could the noble Lord say what difference it would have made to the launching cost, of the BAC 2–11 project?
LORD BESWICK: My Lords, I agree that it is a that the RB 211 was not sold to Lockheed before a decision was taken on the BAC 2–11. But I understand that there will still be a cost for the development of the RB 211 for any new aircraft, the BAC 2–11 or another, something of the order of £9 or £10 million.
THE EARL OF KINNOULL: My Lords, finally, could the noble Lord say whether he feels that the Government should now encourage the British aircraft industry to design a British aircraft suitable for this magnificent RB 211 engine?
LORD BESWICK: My Lords, I am sure that we should all like to see this new British engine exploited in some British aircraft. If any new proposal were put forward by the manufacturers, it would certainly be most carefully considered.
LORD TREFGARNE: My Lords, is the noble Lord aware that there is widespread concern in the European airline
6
industry over the increase in costs announced in another place recently in the European air-bus project, coupled with serious doubts about the basic concept of the European air-bus. Would he therefore see whether the Government could reassess the BAC 2–11 project in the light of producing this perhaps more viable alternative?
LORD BESWICK: My Lords, I think my answer to the last question probably answers that which has just been put by the noble Lord. There are doubts, and there are always doubts about any aircraft project. Whether they are sufficient to rule out proceeding with the A 300 is a matter which the three member Governments will decide later this month. I repeat that I should like to feel that the RB 211 would be utilised in some British projects.

BUSINESS
LORD BESWICK: My Lords, it is intended to adjourn the Committee stage of the Transport Bill for a short time at about 7 p.m. in order to take the three Third Readings on the Order Paper. I hope that this will be helpful to those who are working hard on the Committee stage of the Transport Bill. It may then be for the convenience of the House if we finally adjourn our proceedings this evening, taking into account the difficulties outside, at about 10 p.m. Dinner will be available this evening between 7 and 8.30 p.m.
LORD NUGENT OF GUILDFORD: My Lords, I should like to thank the noble Lord, Lord Beswick, for outlining the arrangements for to-day. Certainly on this side it will be welcome to have a short break at about 7 o'clock. Is the noble Lord able to give us any idea as to how long this other legislation will take and when we might resume the Committee stage of the Transport Bill?
LORD BESWICK: My Lords, I always find it difficult to say how long other noble Lords will speak on any matter, but I should have thought that it will take probably ten or fifteen minutes—not sufficiently long to have a meal, but it will be something of a break.

TRANSPORT BILL
2.47 p.m.
THE MINISTER OF STATE FOR COMMONWEALTH AFFAIRS (LORD SHEPHERD): My Lords, I beg to move that the House do again resolve itself into Committee on this Bill.
Moved, That the House do again resolve itself into Committee.—(Lord Shepherd.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD AILWYN in the Chair.]
Clause 24 [Establishment and general duties of Bus Company and Scottish Group]:
On Question, Whether Clause 24 shall stand part of the Bill?
LORD DRUMALBYN: I am sure the Committee would not wish to part with this clause, which opens up a new Part of the Bill, without some discussion. So far we have dealt with the operation of buses in Passenger Transport Areas. We now turn to the operation of buses primarily other than in transport areas, although agreements can be made between the Passenger Transport Authorities and the two new organisations, the National Bus Company and the Scottish Transport Group created by this clause. These bodies will be created simply by the transfer of other bodies which are already in public ownership.
This is, in a sense, merely an organisational clause, but there are certain differences. For example, the Transport Holding Company made profits. On the six Area Groups of the Tilling Association it made profits averaging £4 million a year between 1965 and 1967; and on the Scottish Bus Group the Transport Holding Company made an average of £3·2 million profit. These profits, according to the Transport Holding Company's report, were more than enough to pay interest due to the Minister on capital invested. Indeed, in these three years the Transport Holding Company was able to pay the Government, over and above the interest on its capital liabilities, an average of £1·7 million in taxation on profits and a figure of £3·9 million on revenue surplus, as well as
8
retaining in its business an average of £3·6 million. The National Bus Company and the Scottish Transport Group do not make profits; their duty is only to break even. No doubt they will be subject to the instructions in the White Paper on the nationalised industries.
It is difficult to see why it was necessary to make these organisation changes—I suppose it is partly due to the Government's opposition to profits. Another point is that the Transport Holding Company is obliged, by Section 29(4) of the 1962 Act, to act:
"in accordance with such directions as may from time to time be given by the Minister."
Perhaps the noble Lord can help us on this point, but I cannot find any provision in the Bill for the Minister to give directions either to the National Bus Company or to the Scottish Transport Group. There are a number of particular powers (such as that contained in Clause 51) and many provisions in the Bill restricting the freedom of action of these two bodies without first obtaining the consent of the Minister. These restrictions run counter to the flexibility to which the Transport Holding Company has attributed its success. It says in its report:
"From the beginning, the Holding Company has worked through a system of subsidiary and associated companies, each individual company being separately responsible to the Holding Company for the actual operation of the business entrusted to it. The consequent freedom and flexibility throughout the organisation as a whole, the resulting accountability and discipline and the element of protection afforded against the more direct forms of abuse of public ownership have, in the Holding Company's view, been major factors in securing the success of the businesses concerned."
It is right that I should ask the Government for an assurance that this flexibility will continue under the new organisation. The conception of the National Bus Company is that it is to be a national as opposed to a local network. Perhaps I might refer to paragraph 9 of the White Paper on Public Transport and Traffic which says:
"A clear distinction must be drawn between the national transport network (designed to handle movement between cities) and the short-distance local movement of people which needs to be a local responsibility."
The means of achieving this distinction seem rather extravagant. Under Clause 18(1)(c) the Passenger Transport Executives are to make, or to propose, agreements with the National Bus Company,

9
as well as with the private bus companies, for the provision of services within, to and from their area. Clause 50 gives powers to the National Bus Company and the Scottish Transport Group to enter into arrangements for the transfer of property rights and liabilities, and no doubt those powers would enable them to transfer part of their undertakings to the Passenger Transport Executives. But it is not clear that either can be compelled to do so.
Schedule 6 deals with provisions as to what are called "existing operators". Clause 28 provides for the transfer, on the appointed day, for the purposes of that clause, of the rights and liabilities in passenger bus companies from the Transport Holding Company to the National Bus Company and the Scottish Transport Group. Will the National Bus Company and the Scottish. Transport Group be regarded as "existing operators"? Will the Passenger Transport Executives have power to compel the National Bus Company and the Scottish Transport Group in that part of their undertakings? If so, will they be compensated, as the private operators are to be compensated?
Of the four proposed Passenger Transport Authorities this problem is most acute in the Tyneside area. In that area there are only two municipal undertakings, Newcastle and South Shields. The rest of the bus services are provided mainly by a Tillings subsidiary, United Automobile Services and British Electric Traction (Northern General) plus Gateshead and District Bus Company. All this shows that the setting up of a single bus company in England and Wales is unlikely to achieve anything. It also shows that the arrangements at present contemplated to set up four Passenger Transport Authorities have been, to say the least, imperfectly studied so far. Most of us will remember that when the railways were separate, a passenger could take a ticket to go from A to B and travel by any route he liked, returning by a different route, yet paying less for a return ticket than for two singles. This practice still prevails in many of the bus companies. All of that was lost in the railways. By and large there was not much, if any, great co-ordination between services. The amalgamation of the railways may have been a convenience for management, but it seems to have produced only disadvantages for passengers. The reasons for amalgamation were financial, and
10
even these have not worked out as they might.
My last point is one of local and contingent interest, in that I am not certain whether it will arise. Why is it that if it were decided to have a Passenger Transport Authority in the Carlisle area at a later date, the Passenger Transport Executive would have no duty at all to cooperate with the subsidiaries of the Scottish Transport Group? Similarly, if there were a Passenger Transport Authority in the Dumfries area, a Passenger Transport Executive would not have a duty to co-operate with the National Bus Company. I ask the noble Lord to have a look at this before the next stage, because this situation might arise. It is right that we should have some further explanation as to the need for setting up these vast juggernauts.
2.57 p.m.
THE PARLIAMENTARY SECRETARY, MINISTRY OF PUBLIC BUILDING AND WORKS (LORD WINTERBOTTOM): The noble Lord, Lord Drumalbyn, began the debate, apparently on Clause 24, but one of his points raised subsequently, that relating to finance, dealt with Clause 27 while the point about the powers and methods of providing co-operation between the various interested bodies related to Clause 24. He has perhaps drawn the debate a little wide, but I will do my best to give a general answer. If he is dissatisfied, perhaps at least on the relevant clause he will get a greater amount of illumination.
LORD DRUMALBYN: We are talking about Clause 24 now.
LORD WINTERBOTTOM: I will do my best to bring into Clause 24 the wide-ranging points raised by the noble Lord. First, why the creation of a juggernaut? The noble Lord will agree that the situation at present is a little disorderly. Some bus services are being run by the Transport Holding Company, some in certain cases by the Railways Board, by local authorities, and there will be the public transport organisations set up by Part 11 of the Bill. All in all there is a generally untidy pattern. But this untidiness is not necessarily a bad thing.
I do not believe that because a thing seems perfectly orderly, it is therefore

11
good. On the other hand, the measure of disorder that would exist after the Bill is passed would, unless we sorted out these various elements, be unacceptable. The proposed form of rationalisation will, after a period of transition, give the average member of the travelling public a better service, because it will be a more coherent service. I note in particular, in relation to this, the last point made by the noble Lord as to the situation existing in, shall we say, the border areas, and I or my noble friend will try to give the noble Lord a certain amount of information as to how this might work under the proposed new arrangements.
May I now turn to the question of finance? This is really dealt with under Clause 27, but I shall be very pleased to give the noble Lord a preliminary indication of Government policy on this matter now. It is true, in spite of the fact that these were publicly owned companies, that they were earning a substantial profit. I think this proves only that in normal circumstances nationalisation is no handicap to earning a normal return on capital. But the noble Lord has drawn the attention of your Lordships' Committee to a slight difference in wording, and in order to put the matter right I should like to let him know what is the Government's interpretation of this matter. The financial duty of the Bus Company will be similar to that of other nationalised industries, and also compatible with the recent White Paper on Nationalised Industries: A Review of the Economic and Financial Objectives (Cmnd. 3437). It is the Government's intention to enter into discussions with the National Bus Company as soon as it is established in order to settle targets of financial performance which take full account of all considerations and developments in the White Paper. The Company is expected to be a fully viable undertaking, providing for the interest on its capital loan by the Exchequer and for the renewal of its assets out of revenue. I hope the noble Lord feels that this gives it flexibility. In fact it is going to operate as a normal commercial undertaking, as the Tilling Company and others have operated in the past. The wording may be a little different, but the intentions are the same.
12
The other question raised was, whether there was a clash between national and local intentions in the power to transfer parts of, shall we say, a national element of the bus services to a local element, and vice versa, and what powers of compulsion exist. This is covered by the general ruling set up under Clause 28 in this Part of the Bill, and also by the latter stages of Clause 24 itself—the noble Lord is quite right. There was a substantial discussion in another place on this particular point, where at first it was laid down that it was the duty of the National Bus Company to co-operate with other companies. But as a result of that discussion a similar reciprocal duty was imposed between the Railways Board, the National Bus Company and the London Board in order that services should be co-ordinated, and to enable information to be exchanged about alterations of services. I think it is true to say that co-ordination of services must be on a voluntary basis. The border area between a Passenger Transport Authority and the operating of the National Bus Company is a very detailed area of operation, and I think the noble Lord will agree that it is difficult to legislate for this. So all that the Bill has done is to lay down the duty of these two groups of organisations to co-operate in producing a rational border agreement between their two areas of operation. That is the intention of the Bill.
LORD DRUMALBYN: May I ask the noble Lord a question about what he has just said? I will not talk about the Scottish Transport Group at the moment, because no Passenger Transport Areas are yet determined for Scotland—or, rather, no decision to have Transport Areas in Scotland has been reached—but the National Bus Company is obviously going to have to run into the metropolitan areas of the Passenger Transport Areas, and it is obviously going to be a difficult matter to decide how far the National Bus Company is to be allowed to continue to operate the services it at present has. Does the noble Lord envisage that in an area such as Tyneside it may well be that the National Bus Company should continue to operate the services which it has at present, or does he think that in the long run the Passenger Transport Area will take over the running of virtually all the services in its own area which are on

13
a local basis, or up to a range of, say, 30 miles outside? I think 30 miles is the definition of the "vicinity". I think it is important that we should know what the Government have in mind here.
I think it is also going to work out rather unfairly for local authorities if, in that case, it is necessary for the National Bus Company to be compensated for losing its services. The reason for this, of course, is that if you take an area such as Tyneside, with just its two local transport undertakings, these two county boroughs will lose their transport undertakings and yet, when it comes to the acquisition of any other transport undertakings, where good money has to be paid or further investment made, they will have to pay just as much as anybody else for the acquisition of other undertakings or extensions of the undertaking. This is a matter which local people consider is extremely unfair; and there is always the possibility that the whole form of the undertaking may be changed later on. That is quite possible. That being so, it seems that a better arrangement will have to be worked out to decide just how much those county boroughs or municipal boroughs which have passenger transport undertakings are losing at the present time. This should, so to speak, be fixed so that if at any lime the arrangements were changed they would not lose in the interim; that is to say, they would get back at least what they put in at the beginning.
I think there is a good deal more scope for studying these aspects than there appears to be in the Bill at the present time, and the whole question of the interplay of the National Bus Company and the Passenger Transport Areas is obviously going to need a great deal more study. One does not often complain that a Ministry has not sufficient powers, but I would doubt whether there are sufficient powers in the Bill to deal with this particular aspect of the matter.
LORD WINTERBOTTOM: The noble Lord has, I think, made an important point here, as in the case of Carlisle, in raising at this stage of the debate the difficulties which might arise in specific areas. The Bill, of course, is drawn in general terms, arid the detailed arrange-
14
ments will have to be made as and when these Passenger Transport Authorities come into being. Tyneside P.T.A. is not here yet: it is only forecast in the White Paper. I think the difficulties foreseen by the noble Lord must be studied by the Ministry after this debate. It may well be—I do not say it will be, but it may well be—that when the Passenger Transport Executive comes into being in the Tyneside area the National Bus Company will continue to operate some services, but this will be a matter for the Tyneside Transport Executive to decide. It will not be for the Bus Company: it will be for the Transport Executive to decide in the light of their statutory duty to cooperate with the National Bus Company.
I think we should expect the Transport Executive and the Bus Company, in concert, to work together to present a rational plan for future bus services in which the National Bus Company will continue to cover part of the conurbation. Obviously, the National Bus Company might want to run buses from, say, Tyneside over the Pennines to the West of Britain and might start from a common bus station in the centre of some Tyneside town. But this is something that will have to be worked out by the bus company and the Transport Executive together. But the decision will be with the Transport Executive in the Tyneside area in the light of its statutory duty to co-operate. I hope that that is clear. I am afraid that I cannot make it any clearer.
Clause 24 agreed to.
Clause 25 [General powers of Bus Company]:
On Question, Whether Clause 25 shall stand part of the Bill?
3.12 p.m.
LORD DRUMALBYN: I should like to ask three questions about paragraph (f) of Clause 25 which is the power to carry on business as travel agents. First, do any of the road passenger transport subsidiaries of Tilling Associates Limited or British Electric Traction carry on business as travel agents at present? If so, I take it that this paragraph would be unnecessary since paragraph (j) of the same clause already says:
"With the consent of the Minister, to carry on any activities which the Company would

15
not apart from this paragraph have power to carry on but which a subsidiary of the Company was carrying on immediately before it became such a subsidiary."
That would then be unnecessary. Moreover, if the National Bus Company ever acquired another road passenger company which ran a travel agency, whether as a subsidiary or as part of the business, the National Bus Company would then have power to continue to run it. It is difficult therefore to see why paragraph (f) is needed unless it is intended to acquire travel agencies or to set up new travel agencies.
If none of the road passenger transport subsidiaries at present carries on business as travel agents then, since the Transport Holding Company own Thomas Cook and Son it is quite unnecessary to include paragraph (f). Section 14(1)(b) of the Transport Act 1962, which is continued in this Act in Clause 47, empowers the Board:
"…to enter into agreements with the other Boards and with any subsidiary of any of the Boards or of the Holding Company, for the management, working and use by one party to the agreement of works, land or other property belonging to the other party, and with respect to the rendering of services and the pooling of receipts or expenses."
So the National Bus Company could make arrangements for the services of Thomas Cook and need not have their own travel agencies. I wonder why the Government feel it necessary to take this power.
LORD WINTERBOTTOM: I suppose this is part of the general argument that will be developed in the course of to-day about extending the commercial powers of individual units of the national transport system. I and my noble friends will argue that if these companies are to run as commercial undertakings, and to publish their accounts under the terms of the Companies Act, they should be given powers to use their assets, their purchasing power and their negotiation power in order to maximise their return on capital. At the moment, some of these bus companies operate their own booking services and, therefore, agencies.
It is the intention of the Government that this particular duty should be spelled out. The mere fact that the Transport Holding Company at the moment owns Thomas Cook, and that for the time
16
being it will continue to own it, does not mean to say that it is not necessary for individual bus companies to set up their own travel agencies. It is part of the philosophy of making all these individual operating companies commercially responsible and for them to earn a proper return on their capital that these powers to set up business as travel agents or to carry on any other activity (which is detailed in paragraphs (f) and (g)) are included in the Bill. It is the intention that they should operate as normal commercial undertakings; if they think that a travel agency is necessary they will have one.
LORD BALFOUR OF INCHRYE: If the Government obtain this power for certain companies to operate travel agencies, do the Government intend to ensure that these powers, when used, are used in accordance with the professional code of conduct which travel agents are now hammering out and which are an essential safeguard for the public against dishonest or deceptive bookings? It is important that we should have some undertaking that the high standard which this profession is trying to impose on itself should be continued.
LORD WINTERBOTTOM: I should hope that the Government would support those individual firms in the travel agency business which are trying to raise their standards. It is unthinkable that the Government should set up in any of these nationalised companies a second-rate and dishonest service. Nevertheless, the noble Lord is right to bring the point to the attention of the Committee.
LORD NUGENT OF GUILDFORD: I listened with interest to the justification advanced by the noble Lord, Lord Winterbottom, for putting in the power in paragraph (f). I noted his remark that these companies ought to have the opportunity of maximising their return on capital. But, of course, the capital is provided by public funds, by the taxpayers, and therefore is, to some extent, provided by the people with whom the companies are going into competition. This is the objection that we continue to make. Does the noble Lord really think that these companies of the national transport system will want to open up new travel agencies? I

17
accept that the ones that exist will probably want to carry on business.
We know from reading the Prices and Incomes Board Report that there are already too many travel agencies and that a good many are making a loss. It seems to me to be extremely unlikely that any of these people will want to, or should, open up new ones. This is the kind of objection that we have in so many places in this Bill. It takes such omnibus powers to do everything—including many things which I am sure no sensible person would want to do. It is a highly risky business. I question whether the noble Lord is being sensible in putting in here such wide powers to do things that it is most unlikely anybody would want to do.
LORD WINTERBOTTOM: I have great sympathy with the point the noble Lord has made. We hope that the various bus companies and subsidiary companies will exercise their normal commercial judgment and will not set up travel agencies just "for the hell of it." Nevertheless, I think that this massive Bill is intended to give the redesigned British public transport system the powers it requires to do those things which it may at an appropriate time consider necessary. I am reasonably certain that the amount of capital available to these companies will not be so large that they will he able to start on any "wild-cat" ventures in this field, particularly since the Thomas Cook organisation exists already within the framework of the general pattern. But I think the Committee are grateful to the noble Lord for his caveat. I am sure the bus companies will bear this in mind.
LORD ROBERTSON OF OAKRIDGE: May I intervene at this point? I think it is a pity to bring in the question of Thomas Cook and Son. Thomas Cook and Son is a great world-wide organisation, and I am sure that it sells a great many more tickets for travel by air than it sells for travel by rail or by road. It is not, as it were, an instrument ready-made for the help of bus companies.
Clause 25 agreed to.
Clause 26 [General powers of Scottish Group]:
3.20 p.m.
LORD DRUMALBYN LORD DRUMALBYN moved Amendment No. 100:
Page 42, line 17, leave out paragraph (f) and insert—
"(f) to enter into agreements with travel agents designed to promote traffic on the Board's passenger services;"
The noble Lord said: Having, as it were, reconnoitred the ground with the last Amendment, we come on to a somewhat similar, though by no means identical, Amendment. It relates to the Scottish Transport Group. The purpose of the Amendment is to leave out the power to carry on business as travel agents and to substitute a power:
"…to enter into agreements with travel agents designed to promote traffic on the Board's passenger services"
This Amendment differs in character from the previous one. For one thing, it was put forward in another place and was the subject there of a rather confused and lengthy discussion. Unfortunately, the Scottish Minister of State confused the issue by referring to Section l4(1)(b) of the Transport Act 1962, which has little to do with the case.
The Amendment would empower the Scottish Transport Group to enter into agreements with any other travel agents, and not merely with travel agencies that are subsidiaries of the Railways Board or the Transport Holding Company or some other nationalised board. The Minister pointed out that the Transport Holding Company happens to have a Scottish subsidiary which is a travel agency, Sanderson's Travel Agency, Ltd. He also pointed out that Section 14(1)(a) of the 1962 Act, as applied by Clause 47 of this Bill, would allow the Scottish Transport Group to do what is proposed in the Amendment. What he did not seem to understand was that the Scottish Transport Group would be able to enter into agreements with travel agents, designed to promote traffic on the Board's passenger services, only if they already had power to carry on the activities of travel agents themselves. Of course, they will not have that power if this Amendment is carried. I do not mean to suggest that they would be unable to enter into agreements with other travel agents; what they would not be able to do would be to take over subsidiaries and run travel agencies in that way.
It was also suggested in the debate that the Caledonian Steam Packet Company, which at present belongs to the railways but is to be transferred to the

19
Scottish Transport Group, owns a number of small travel agencies. As I understand the Bill, if the Amendment were accepted, the Scottish Transport Group would have power under paragraph (m) of subsection (1) to continue to carry on these businesses. Equally, the Scottish Transport Group would have power, according to the Minister of State, to carry on Sanderson's Travel Agency under the terms of paragraph (m). What we want to know, therefore, is why the Government want this power when there is already power for the Group to carry on the existing travel agencies? Do they want the Scottish Transport Group to be able to acquire other travel agencies or to set up new ones, or is there some other explanation?
It may be that the clue is in Clause 53, which deals with the dissolution of the Transport Holding Company and and enables the Minister by order to transfer the remaining companies of the Transport Holding Company, apart from the companies referred to in Schedules 3 and 7, one of which is Thomas Cook and Son. The noble Lord, Lord Robertson of Oakridge, has expressed regret that Thomas Cook should be brought into this discussion at all. I am not certain that there is anything derogatory in bringing Thomas Cook into it, and it is true that Thomas Cook is a world-wide organisation. But that would not prevent the detaching of parts of it to particular organisations set up under this Bill. The noble Lord, Lord Robertson of Oakridge, suggested that it would not be appropriate that Thomas Cook should deal with the bookings of the National Bus Company. I do not know why not. An agency deals with every kind of booking. Perhaps it deals primarily with its own. For example, if the railways had an agency, it would deal primarily with railway bookings, but it would take every other kind of booking as well. In the same way, the National Bus Company would no doubt deal primarily with National Bus Company bookings, but would deal with others as well. The same, presumably, will occur with regard to those travel agencies which the Scottish Transport Group will already be taking over.
I should like to know whether the fact that this power is here indicates an in-
20
tention on the part of the Government to assign part of Thomas Cook's business to the Scottish Transport Group. If this is the intention, I should like to make only two comments about it. First, if Thomas Cook is to remain in public ownership I should like to see its business in Scotland run by some Scottish organisation, although I should much prefer to see Thomas Cook disposed of entirely to private enterprise, now that it has been detached from the Transport Holding Company as a whole. At least the taxpayer would then get something back, and Thomas Cook might begin to make reasonable profits once more, instead of at the comparatively beggarly rate of £800,000 a year which it made last year.
The nub of this matter is that it seems wrong in principle that an organisation offering a specialist transport service, as the Scottish Transport Group will do, except in the Western Highlands and Islands, should enter into competition with travel agents who are selling the Scottish Transport Group's services. I am not suggesting that the Scottish Transport Group should divest itself of the existing services. I am suggesting that there is a danger point for any organisation which is itself running specialised services when it enters into competition with other bodies running specialised services. They are less likely to be successful than people concentrating on their own business, and it does not seem to be a proper use of Exchequer money if it is a question of taking over other travel agencies, or even setting up new travel agencies.
The noble Lord, Lord Winterbottom, talked about the best use of resources. We maintain that the best use of resources in respect of specialised agencies is for the agencies to run their specialised jobs themselves. In the case of bus companies, it is a good platonic principle that they should run buses and not get involved in all kinds of other extraneous services. Travel agencies would be an extraneous service for the Scottish Transport Group. It has its own specialised transport travel agencies which can cater for the services—a combination of bus, rail, sea and, possibly, even air travel—to the Islands and parts of Scotland. There is no reason why it should not develop these, and there is

21
full power to do that without having a provision in the Bill. Such a provision can be justified only if there is some intention to encourage the Scottish Transport Group to enter into competition with those other travel agencies part of whose business will be to help the business of the Scottish Transport Group, and it seems to me that it would be a bad thing were such competition to take place.
LORD BALFOUR OF INCH RYE: I very much hope that my noble friend will stand by this Amendment, because I think it is important. I sincerely hope that the Scottish Group will not have this power to enter into the business of travel agents, but will be restricted to co-operating with existing agencies.
My main reason for saying this is that I know of small towns in the counties of Sutherland and Caithness, and of one in particular in Ross and Cromarty, where the bus comes down the High Street and stops before a small general shop where people get in and out. This shop carries on the business of travel agents, as well as other miscellaneous activities. Under the Bill as proposed by the Government, the great and powerful Scottish Group can come along and put part of that poor little man's business out of existence, and thus increase the already heavy economic difficulties that traders have in certain parts of these counties. I think that this is an unnecessary power and a dangerous power. The Bill is not very popular in Scotland. This provision will make it far less popular. If the Government gave this concession it might ameliorate to some small degree the dangers to existing trading interests in these counties in Scotland which many people see inherent in this power.
3.33 p.m.
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR SCOTLAND (LORD HUGHES): I should be exceedingly disappointed if the noble Lord, Lord Drumalbyn sought to stand by this Amendment. If it were carried, it would be the reverse of helpful to the arrangements about which the noble Lord, Lord Balfour of Inchrye, has just spoken. The suggestion that it is dangerous to have this power, and the picture which the noble Lord has just painted, of the Scottish Transport Group
22
having so much money to throw about that it would seek to dissipate it by setting up travel agencies in remote Highland villages and small Highland towns, really go far beyond any of the fanciful ideas which have yet been expressed on this Bill. It reminds me of the alleged old maid who is supposed to look under her bed every night to see if there is a man there—whether in fear or in hope has never been clarified. I do not know whether the suggestions put forward by noble Lords are put forward in fear or in hope.
The effect of this Amendment would be to remove the Scottish Group's power to act as travel agents and to substitute for it a power to enter into agreements with travel agents. It is very desirable that the Scottish Group should have the same power as any other transport operator to act as travel agents since this will help it to attract additional tourist traffic to its various bus and shipping services. Certain subsidiaries of the Group, as the noble Lord, Lord Drumalbyn, pointed out, already have this power. He referred to Sanderson's Travel Service, Limited and to MacBrayne's. It would be difficult to visualise MacBrayne's services functioning at all if they did not have this power. The noble Lord is not suggesting that this power should be taken away from subsidiaries, and the noble Lord. Lord Balfour of Inchrye, does not seem to have comprehended that the subsidiaries already have this power. All that is being suggested in this clause is that this power should be given to the Group as a whole.
The Opposition are constantly asking the Government to impose on nationalised undertakings the principle that they should work according to ordinary commercial principles. Therefore, surely it is reasonable that when an organisation of this kind is being set up it should not only have commercial liabilities imposed upon it but also enjoy commercial advantages. Subsidiaries of the Group will have offices at a number of places and it will be an additional service to the public to be able to book travellers on other operators' services. It is clearly desirable, for instance, that one subsidiary of the Group should be able to book travellers on the services of another subsidiary. If this Amendment were

23
accepted, this would not be possible because Section 25(1)(a) of the Transport Act. 1962, which is applied to the Scottish Group by Clause 47(1)(b) of the Bill, gives the Group a duty to ensure that none of its subsidiaries engages in activities which the Group itself does not have the power to carry out.
We should have the ridiculous position that if someone went to MacBrayne's to ask them to make arrangements involving two separate services, although everybody would know that MacBrayne's was part of the Scottish Group MacBrayne's would have to say, "We are very sorry but we have power to deal only with the services which we ourselves are providing." With the very limited travel agency facilities which exist in the greater part of the Highlands, particularly over the bulk of MacBrayne's territory, such a situation would make absolute nonsense.
LORD DRUMALBYN: It may be that the noble Lord has not appreciated what the term "travel agency" connotes. In the old days of separate railway companies, when one took a ticket from one place to another involving travel over more than one line, the company from which one took a ticket acted as a travel agency. The noble Lord is now suggesting that in the same way there could not be similar arrangements between subsidiaries of the Scottish Group. Surely it would be possible to book a ticket from Glasgow to Lamlash even though there were no such power as this? Is the noble Lord suggesting that in booking such a ticket the Scottish Group would be acting as an agent?
LORD HUGHES: The advice which I am given is that if this Amendment were accepted by the Committee, it would not be possible for one subsidiary to arrange travel facilities except on its own undertaking because the Group would not have the power. And under Clause 47(1)(b) the Group could not pass this power on to its subsidiary. I detected from the noble Lord's question that he agrees with me in that to deprive the subsidiaries of the opportunity of arranging through-traffic, particularly in the Highlands, would be absolute nonsense.
LORD NUGENT OF GUILDFORD: Under paragraph (m) the Group will
24
have power to carry on its existing activities, which include existing travel agencies, so that the Group in principle still has power to conduct the business of travel agents. What we are resisting is the power to develop them further.
LORD HUGHES: I would not deny that the Bill also gives the Scottish Transport Group power to develop these agencies further, and one way in which they would be developed further is to permit this cross-booking between one subsidiary and another. That I think is a desirable and very necessary function of its job, and to deprive the Group of it would be to withhold the sort of service which the people in Scotland are entitled to get. But, beyond that, I think the fears are groundless. I can see the point which noble Lords might be seeking to make, if one were to transfer the argument which the noble Lord, Lord Balfour of Inchrye, took of a small town with a shop doing a minuscule sideline business as a travel agent, and considered what might happen in a much larger centre of population where the Scottish Transport Group might consider the setting up of a new travel agency seeking to take business away from those who are already, perhaps, serving the area perfectly well.
But the general power which is given in this respect is a capacity power; it is merely being given the power to do this. The Scottish Group obviously will use this power where there is a good prospect of a satisfactory financial return. It will not do so if it is merely going to take away from established agencies business which they are handling perfectly satisfactorily. If I might give a case in point, there has been a reference to Thomas Cook & Son. There is a branch of Thomas Cook in my home town, but for twenty years any travel business I have done has been done with a particular private agency, and I did not feel under any obligation, Socialist or otherwise, to transfer my business to Thomas Cook's when I had been getting perfectly satisfactory service from another agent in the town.
The Scottish Transport Group will be well aware of the fact that it will earn the profits of an agent only if it sets up an agency or expands an existing one still further, where it is perfectly obvious that

25
there is a demand for such services which is not going to be met from elsewhere. The Group will have overall financial duties imposed on it, and will therefore be under no temptation to indulge in loss-making activities. Another point which was raised in another place was possible unfair competition between such a service provided by the Group and one provided in the ordinary way by private enterprise; and in this connection selective employment tax was mentioned. If I might repeat what was said in another place, my right honourable friend the former Minister of Transport has given an assurance that it is the Government's intention to achieve equal treatment between private undertakings and nationalised ones for the same type of activities.
Finally, I would point out that in the last resort the Secretary of State is given power to direct the Group to discontinue activity. This is provided for in Section 27(4) of the 1962 Act, as applied by Clause 52(3) of the Bill. This is not a sinister move to nationalise the travel agencies' service in Scotland; it is merely a method of enabling the Group to make the best use of the services which it is providing, and to enable it to use the services in one subsidiary to help to support the services of another. Only in a place where the Board can expect to increase the volume of their business by introducing a travel agency service, and where a travel agency service does not exist at the present time and where one is likely to be profitable in itself, would there be an expansion of services along these lines. The primary purpose of the Scottish Transport Group is to provide transport, and to do such incidental things as help it to provide that transport profitably. It will not do so if it embarks on the creation of a "travel agency empire" only for the purpose of creating losses.
LORD DRUMALBYN: We are not only concerned here with the avoidance of loss to the Exchequer; but also concerned with unnecessary loss to individual traders. I do not think that we can take this matter further to-day because of the question of definition. We should like to go further into the matter, and possibly I could have a talk with the noble Lord as to the actual scope of the meaning of the words "travel agency". If it were the case that it would be impossible for them to have a through booking unless the
26
powers to carry on business as travel agents were included in the powers of the Scottish Transport Group, then of course in the limited sense we should have to agree to the inclusion of those powers. But what we are concerned with is that the business of travel agents should not be taken away front them merely because, for reasons of the organisation of the bus services and other transport services in Scotland, it is thought right to have a single unified service. This is the point we have in mind.
I hope that my noble friends will agree with me, but, because of the technical aspect of this, I do not think we ought to press this matter to a Division to-day. But I think we should like to look at this again and we may revert to it on Report stage. We would hope to get a closer definition, or at least a full assurance from the Government that they do not intend to operate this power so as to take away the business from established travel agencies, or indeed to branch out into the travel agency business in its widest sense, including booking accommodation and so forth.
LORD HUGHES: I should be delighted to have such a talk with the noble Lord, Lord Drumalbyn, in due course because I am quite certain that, if we can work at this and other things in a way which perhaps is rot possible in Committee, we will find that the things that he don not wish the Government to undertake are causing him needless fears, and the things which the Government particularly wish to be able to do under this clause will be things to which he would not wish to take exception. If we, by getting round the table and discussing these matters, can clarify what I feel at the moment are really misconceptions, then I would suggest that this debate and the course which the noble Lord now proposes to take will have served a very useful purpose indeed.
LORD ROBERTSON OF OAKRIDGE: Before the noble Lord sits down, may I say that I think it would be a very good plan for this matter to be discussed between the two sides. I think there are one or two things to be remembered, particularly in regard to Thomas Cook & Son, which has been mentioned several times by the noble Lord, Lord Drumalbyn. It is as well, for example, to remember why

27
Thomas Cook & Son is a nationalised undertaking: because it was acquired by the private railway companies, and this at a time when they were in great financial difficulties. Therefore, it is rather, as it were, a poor argument to say that these undertakings should do their own job and should not acquire a travel agency. I think it is rather a bad argument. But, on the whole, I think that the noble Lord, Lord Drumalbyn, has a point here, so long as it is carefully examined and worded in a way that will not cause difficulty for these undertakings.
LORD DRUMALBYN: In view of what the noble Lord has said, and what the noble Lord, Lord Robertson of Oakridge, has said, I beg leave to withdraw the Amendment at this stage.
Amendment, by leave, withdrawn.
Clause 26 agreed to.
Clause 27 agreed to.
Clause 28 [Transfer to Bus Company or Scottish Group of certain securities, rights and liabilities]:
On Question, Whether Clause 28 shall stand part of the Bill?
3.50 p.m.
LORD DRUMALBYN: I want to ask one question on this rather lengthy clause; namely, whether the present subsidiary arrangements for David Macbrayne are expected to continue under the new dispensation.
LORD HUGHES: It depends what the noble Lord means by "the present subsidiary arrangements". I certainly do not envisage that a subsidy as such will disappear over night. It does not necessarily follow that the subsidy will continue at any given level, but that it will continue to be an assisted service for at least some time into the future must be quite obvious.
LORD DRUMALBYN: If I might push the point a little further, this is a question which is of obvious interest to Scotland. The Outer Isles is a difficult area which is supported by the nation as a whole to the extent of about £600,000. If it were intended to whittle that down and the Scottish Transport Group were to be expected to find this subsidy out of its own resources by charging higher fares
28
in other parts of Scotland in order to be able to maintain the service to the Outer Isles, I think we should at least know about it. In other words, if the intention of the Government is that the burden of the subsidy should be transferred from the Treasury on to the Scottish fare payers, then I think we should know about it.
LORD HUGHES: The noble Lord, Lord Drumalbyn, is not at any time given to overstatement, and when he says that the Western Isles is a difficult area, he certainly does not overstate the case. When he goes on to say that, if it were intended that the subsidy at present running at £600,000 should be transferred to the Scottish bus users or the general services of the Scottish Transport Group, then this should be known, I agree with him, and I can assure him that if that were to happen, he would certainly hear about it.
Clause 28 agreed to.
Schedule 7 agreed to.
Clause 29 agreed to.
Schedule 1 [The New Authorities]:
3.52 p.m.
LORD DONALDSON OF KINGS-BRIDGE LORD DONALDSON OF KINGS-BRIDGE moved Amendment No. 101:
Page 204, line 21, after ("in") insert ("overseas trade,").
The noble Lord said: This Amendment was put down by the noble Viscount, Lord Caldecote, but he has had to go abroad, and as I have an Amendment immediately following in somewhat similar form, he asked me if I would speak to this Amendment for him. This is not a very difficult task, because it is an entirely sensible, modest and self-explanatory Amendment which is helpful to me. The noble Viscount, as the noble Lord will know, is the Chairman of the Economic Development Committee for the Improvement of Exports, and it was in the course of discussion in this Committee that they came to the conclusion that this very large Bill of 156 clauses, which must be dealing with the way of getting goods out of and into this country, never mentions overseas trade and export at all. I have only the word of the noble Viscount, Lord Caldecote, for this, because I have not been through the Bill to check it.
The noble Viscount thought that probably the best place to get in some reference to overseas and the importance of exports was in paragraph 4 of Schedule 1, where the way in which the Minister or the Secretary of State is to choose the members of the new Authority is expounded. If it just said, "Choose the best men you can", it would have been difficult to say much. But certain categories have been laid down, and when you lay down categories the omissions become important; and I think the omission of experience in overseas trade is something which should be put right. This Amendment, therefore, suggests that in the fourth line it should be said that the people being appointed should have shown capacity in not only transport, industrial, commercial or financial matters, but also in overseas trade. I do not think that further words of mine can help this Amendment. It seems to me to be a clearly sensible one. I beg to move.
LORD WINTERBOTTOM: In the light of this country's present difficulties, one naturally has great sympathy with the Amendment tabled by the noble Viscount. But, on the other hand, like so much else in life, if you try to define a certain facility or duty too precisely you merely succeed in causing damage instead of preventing it. The actual formula in paragraph 4 is that the Minister or the Secretary of State shall choose people who have had
"wide experience of, and … have shown capacity in, transport, industrial, commercial or financial matters, applied science, administration or the organisation of workers".
These are fairly wide fields of experience. What the noble Viscount is trying to add to the Bill is an additional, rather narrower experience, lying somewhere between transport, commercial or financial matters. In fact all these three fields are covered in the Bill.
The trouble is that if we try to add to this broad list of experience which is demanded from future members of the new Authorities the rather limited qualification of experience in overseas trade, we may find that all sorts of other more limited groups will try to press to get representation on these new Authorities. But I can give the noble Lord who has spoken for the noble Viscount an assurance that this is a factor which must
30
weigh with the Minister or the Secretary of State when making these appointments, because every man in a position of authority must be aware of the importance of the export industry. Where it is relevant, I am certain that this would he an additional factor of experience which will be taken into account in making the appointments. I hope that I have satisfied the noble Lord.
LORD NUGENT OF GUILDFORD: I should like to add a few words in the absence of my noble friend Lord Caldecote. I thought that the Amendment could not have been more effectively moved than it was by the noble Lord, Lord Donaldson. I am bound to say that I find it difficult to follow the argument of the noble Lord, Lord Winter-bottom, that to put in someone with experience of overseas trade would have a narrowing effect. After all, we in this country live on overseas trade. If we look at the other categories here—and I agree that they are all important—transport, industrial, commercial or financial matters, applied science, administration or organisation of workers, I should not say that overseas trade was narrower than any of those. Surely it spans almost everything. I really think that the noble Lord, Lord Donaldson, and my noble friend Lord Caldecote have a point here. It is a nuisance to put in yet one other category, no doubt, but if one of these people could be an expert in overseas trade, and therefore one who understands the link-up of domestic transport with outgoing transport, this would be a help. I wonder whether the noble Lord would be good enough to have a look at it. I think it would improve the Schedule.
LORD HANKEY: As one who has been mixed up with the export effort a good deal, I should like to support this Amendment strongly. We have suffered almost equally from delays in deliveries due to strikes in the motor car factories and delays due to communications trouble. I think it would be a great advantage that there should be somebody in the freight authority who really Hider-stands the need for pressing on with exports and has had experience in that matter.
LORD WAKEFIELD OF KENDAL: I hope that the Government will think again on this point. After all, again

31
and again they have stressed the importance of exports and the overseas trade. It seems rather contradictory. Here is something which is designed to help overseas trade, to assist speeding goods to the ports, and, in fact, to further the very objective which the Government want to see achieved. It is really important that there should be somebody on the new Authorities who has real knowledge of overseas trade. There are many people who have experience of the necessary commercial and financial matters here at home, but just have not had the experience and knowledge of what has happened overseas. It is so essential, for example, to get goods properly packed, to the port in time, and things of that kind. If you have a person with overseas experience, who can give that knowledge and experience to his colleagues, surely he must be of value. Surely it must further the Government's object of extending and developing our overseas trade which is so important to this country.
LORD MITCHISON: I should like to add a word in support of the Amendment. I do not understand that the Amendment would oblige the Government to have a member specially versed in overseas trade but it would remind those who have to operate the Act (as it will then be) of the importance of it. I agree with what the noble Lord, Lord Wakefield of Kendal, has just said. I should have thought it was advisable as a reminder, and I understood that that was the reason why the Amendment was put forward. I have no doubt that it does not make much practical difference from a narrow point of view, because whoever was versed in overseas trade would certainly fall under one or other of the general words at present, but it is an indication of good intention—like the Scotsman, but perhaps I had better not quote that. At any rate, I am sure that it would do no harm and would be to the general advantage and an indication of the intention of the Government.
LORD BURTON: I also feel the Amendment can do no harm. I wonder whether it is necessary to tie the Ministers down at all.
LORD SILKIN: There are eight categories of persons already specified as
32
categories from among whom not more than ten members should be appointed. I do not think it would make a ha'porth of difference if there were nine categories. I suggest that my noble friend should look at this point again.
LORD REDMAYNE: In my opinion the fault here lies in the original drafting of the Schedule. It seems to me always to be quite absurd to try to specify different categories of people who ought to be included in this or that authority. If one reads paragraph 4 it is clear that these particular categories apply to each of the new Authorities, which again makes the proposition a little ridiculous, because it cannot apply equally to two or three.
I realise that I am laying myself wide open on this, because I am quite sure I shall be told either that this paragraph was lifted from the previous Act, and was therefore the work of the Conservative Government, or, alternatively, that it was put into the Schedule as a result of pressure in another place. It seems to me better to redraft the Schedule and to take out paragraphs 4 and 5 in respect of these particular requirements, thereby adopting the sensible course of leaving it to Ministers to choose in the case of any particular Authority those who have the ability to fill the posts. As an ex-Patronage Secretary I must confess that from time to time I have suggested that certain individuals might be desirable for a particular appointment, but even then one is not so sinful as to make those recommendations without taking into account all the propositions which have been mentioned in this short debate.
LORD WINTERBOTTOM: I think the noble Lord, Lord Robertson, has answered the noble Lord, Lord Nugent of Guildford, on my behalf. If one makes the specification sufficiently broad one gets away from the problem of trying to foist on the appropriate Minister an individual with certain narrowly specialised qualifications. But while I cannot commit my honourable friend the Minister of Transport on this matter I will undertake, because of the strong view which has been expressed on this point, to bring it to his notice, and will try to give noble Lords some satisfaction at the Report stage of the Bill.
LORD DONALDSON OF KINGS-BRIDGE: I am sure the noble Viscount,

33
Lord Caldecote, will feel that this Amendment has been properly aired and that we have had a sympathetic reply from the noble Lord, Lord Winterbottom. Therefore, I ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
4.5 p.m.
LORD DONALDSON OF KINGS-BRIDGE LORD DONALDSON OF KINGS-BRIDGE moved Amendment No. 101A:
Page 204, line 23, at end insert ("or who are representative of the consumer interest.")
The noble Lord said: My task here is made easier, and perhaps somewhat shorter, by the fact that we have covered in our last discussion most of the points in regard to this Amendment. Every Bill which comes before your Lordships' House has two aspects, one of which is invariably the consumer, and he is seldom mentioned. If there are to be categories at all, somebody representative of consumers should be thought worthy of sitting on management committees, and not only on consultative committees. Secondly, the consumer, above all, must have some say in how the final thing is organised.
The Consumer Council conducted some inquiries into consumer consultative machinery in the nationalised industries, and the result was an elegant book which is well worth reading, although I doubt whether many of your Lordships have read it. This consultative system is not really working at all satisfactorily and we feel strongly that the only way to get the consumer properly looked after is to get him a seat on management. My noble friend Lord Winterbottom has estopped himself to some extent from one argument against me, because his argument against the last Amendment was that it was a sub-category of categories already mentioned in the list of people. I challenge him to tell me under which category of these names the consumer comes. Of course the consumer never does come in, and I suggest with real sincerity that he should be mentioned in this Schedule. I beg to move.
LORD ST. HELENS: I wish to support this Amendment and in particular what the noble Lord has said about how seldom the consumer is mentioned in our debates. either in this House or in another place. Indeed, so far as our debates in Committee have been concerned, this
34
is only the second time the consumer has been mentioned. The first occasion was by my noble friend Lord Merrivale. A great many of us sitting on the Back Benches, listening to the Committee stage of this Bill, have great misgivings, because in fact this Bill is a vast extension of bureaucracy. There is no argument about that. Time after time, the Minister gets up in this House and explains, with great charm, that, whatever may be in the Bill, in fact it is not the intention of the Minister to work that way. But we are not debating the intention of any current set of Ministers; we are debating something that is going to be the law of the country for years ahead, and the Government taking to themselves vast, bureacratic powers. We want to do what we can to see that at least the consumer is represented. It may well be that, as a result of the wise counsels given by my noble friend Lord Redmayne, the Government will scrap certain paragraphs in the Schedule and will re-write the Schedule. They would be well advised to do so. I would then beg of them that if they are going to re-write the Schedule the interests of the consumer should be mentioned.
LORD MITCHISON: I am afraid that I cannot support this Amendment. The reason is quite simple. At one tine the Co-operative Movement used to have a journal which was called the Producer, with which was incorporated the Consumer, We are all of us in a sense, consumers, and when one tries to find someone to represent the consumers one immediately gets into difficulties. Take freight, for instance. Who is the consumer "of freight, and who is going to represent the consumer of freight? I should have thought there were incredible difficulties in finding someone who would fill the bill completely, because it is not in the nature of things that such a person should exist.
I do not agree with what has been said about bureaucracy; I am sure noble Lords would hardly expect me to. But, really, to cure bureaucracy by adding to the number of representatives on a committee advising the Minister does not seem to me to be the shortest way of doing it. I think therefore the short answer is that this is a Bill about production, or transport, analogous to it, as it were, and it is not the kind of thing on

35
which the consumer would expect to be represented at the top. One has to look to see that the consumer has his opportunities at the place where it hits, and that is a good deal lower down than these general advisory bodies. I feel, therefore, this is impracticable, and, if I may say so with great respect to my noble friend, also slightly illogical.
LORD ST. HELENS: If I may say so to the noble Lord, I have listened to him making a great many speeches in both Houses, but I have seldom heard him making so undemocratic a pronouncement.
BARONESS ELLIOT OF HARWOOD: May I rise to support the mover of this Amendment and beg that the Minister will consider this very seriously indeed. I do not think anybody realises how little the user of our nationalised industries, transport or any others, the consumer, has ever heard of, or knows about, the committees (called Consultative Committees) which are supposed to represent him and to be putting his point of view in these industries. The noble Lord, Lord Donaldson, has in his hand a Report which the Council made when I was its chairman. We were horrified to find that in the case of transport, when it was suggested that the people could protest against certain iniquities or matters which were not well organised in connection with transport, only 4 per cent. of the people who were asked whether they had ever heard of the Consultative Committees, or of points of view being expressed by consumers, had ever heard of them at all; and nobody ever thought of writing about anything, unless it happened to be a rather energetic person who had some personal grievance he wanted to put right.
We are here dealing with a new Bill, an enormously long Bill, which is going completely to reorganise the whole transport services. I do not agree with the noble Lord, Lord Mitchison, that people are not concerned with freight. If any of your Lordships are producers of any kind, whether in agriculture or anything else, you will know we are deeply concerned about freight. If you travel on the railways, which I do frequently, you realise the incredible inconvenience caused when trains do not run or schedules are altered or times changed, as at the present
36
moment. It think it is absolutely essential that in these categories of people, who are going to be part and parcel of the organisation which is going to run the new Authorities, there should be people who will speak up for the consumers of these industries. They would be far more efficiently run, because people would have the courage to get up and say what they thought and not be hampered by having particularly to speak up for any individual organisation, such as trade union or management or whatever it might be. They should be independent, freelance people using the railways, or whatever the service is. I hope very much that this opportunity will be taken to see that in this Bill, if in no other, at last the people who use the transport, who are on the receiving end, have a voice in how the organisation is being run.
LORD GEDDES OF EPSOM: I must indicate an interest because I serve on a nationalised Board. If the Minister will forgive me for replying to the question of the noble Lord, Lord Donaldson, he asked the Minister which categories represented the consumer. The answer is, all of them; all the categories indicated in the make-up of the Board represent the consumer. The consumer is the customer. This is the board of management. Any board of management that ignores the customer is not only hopelessly inefficient but could not possibly carry on its job.
When we talk of putting in a particular category of consumer, what do we mean? Do we mean customer, one particular customer, one sort of customer, when we are dealing with transport? Clearly the consumer is the customer, and I repeat that the customer is represented by every one of these categories because when they serve on the Board they are in fact the management. Noble Lords opposite know this as well as anyone. If management does not consider the consumer the consumer will go and management will be useless. So, in my submission, we do not need this Amendment.
BARONESS HORSBRUGH: Might I add one or two words, following on the noble Lord. He said that if management do not consider sufficiently the customer or consumer then they are in very great difficulties, or words to that effect. But surely that is why so many of our nationalised industries are in difficulties; that is the very reason, because

37
they do not consider the consumer. I quite see that this particular committee is to be a committee of management, but I think that what several of us would like to see in this Bill is that management and the other interested parties, right down to the consumer, the customer (call him what you like) is included. A great many consumers would then understand better the difficulties the management are up against, and they would therefore be able to help to explain the situation to fellow-consumers if they were given more information and taken into consultation right from the start.
LORD WINTERBOTTOM: I shall give to the noble Lord, Lord Donaldson, the same undertaking as that which I gave to the noble Viscount, Lord Caldecote, through his mouth. I think I can put that with quiet confidence because, as he knows, the Minister has already had these points of view brought to his attention, and I hope to have some sort of satisfactory answer to give to the noble Lord in due course. "Due course" in my mind refers to, to a certain degree, a discussion which doubtless will take place on Clause 55, which is the main clause dealing with consumers' interests in this Bill. Clause 55 in the case of freight and in the operation of ships provides that the scope of the Transport Users' Consultative Committees established by the 1962 Transport Act is to be extended to cover services and facilities provided by the National Freight Corporation and its subsidiaries and the transport services, excluding buses, provided by the Scottish Transport Group and its subsidiaries.
In the case of road passenger transport services, complaints and representations of users may be addressed to the traffic commissioners who are responsible for the licensing of passenger services under Part III of the Road Traffic Act 1960. That in point of fact does show the correctness of the noble Lord in deciding to put down an Amendment on the Schedule, because this particular element is omitted from the main descriptions in Clause 55. But I should like to say to the noble Lord that I would have thought that paragraph 5 of Schedule 1 covers the point. Paragraph 5 reads:
"In appointing the chairman and other members of any of the new authorities the
38
Minister or, as the case may be, the Secretary of State shall have regard to the desirability of having members who are familiar with the special requirements and circumstances of particular regions and areas served by the authority in question."
I would have said that that was saying, in a greater number of words, those who are representative of the consumer interests, and of the interests in a region or area. I feel, even if the reply of my right honourable friend the Minister is not altogether satisfactory, that nevertheless there are substantial safeguards for consumer interests in paragraph 5 of Schedule 1.
LORD DONALDSON OF KINGS-BRIDGE: I thank my noble friend for going so far to meet me. It seems to me that the main point has nor been granted; that is, that we should get the heel of the consumer into management. Quite frankly, we think that management would be a great deal better if it had consumers quite specifically represented. My noble friend Lord Geddes of Epson said that in a sense the consumer is simply the customer. This is so; but there are specialised customers, and our view is that management would manage better if this fact were more strongly represented. It is not done elsewhere. This is a new Bill, and provides an opportunity to do it. Rut in view of the support we have had from noble Ladies opposite, and the discussion and the kind words of the noble Lord who has replied, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Schedule 1 agreed to.
4.21 p.m.
Clause 30 [Permit for certain bus services in lieu of road service licence]:
On Question, Whether Clause 30 shall stand part of the Bill?
LORD DRUMALBYN: This is a most interesting clause, which I think was not debated in another place. What it sets out to do is to fill the gap in rural bus services in a way of which we in this country have not had much experience, but of which in many other countries they have a good deal of experience. In those countries the gap has been filled in a similar way to this, greatly to the benefit of our motor car manufacturers

39
who have exported vehicles to meet this sort of need.
I am worried that perhaps this clause is too narrowly drawn. I should like to draw the attention of the noble Lord to subsection (2) which says:
"The traffic commissioners shall not grant a permit under the foregoing subsection unless they are satisfied that there are no other transport facilities available to meet the reasonable needs of the proposed route."
I remember a route in my previous constituency, Dumfriesshire, in which there was one service a week in each direction. Under this clause as drafted, so far as I can see, the transport commissioners could not grant a permit for a minibus on this route because there are already transport facilities available. I would ask the noble Lord to look at the drafting of this clause, because I do not think it is intended that there should be no transport facilities available to meet the reasonable—or unreasonable—needs of the proposed route. I think what is meant is that there are insufficient other transport facilities available to meet the reasonable needs of the proposed route. As it stands, it seems to me that the subsection is too narrowly drafted.
My other comment on this clause is that I am not sure what is the purpose of subsection (3)(c), or at least one part of it. This says:
"… the traffic commissioners may attach to any permit under that subsection such other conditions as they may think fit for securing that— ….
(c) passengers shall not be taken up or shall not be set down except at specified points"—
and then it goes on:
"or shall not be taken up or shall not be set down between specified points."
I hope that this will not be made as restrictive as that. Obviously, safety factors are involved here. Further, once a minibus gets into a large town into which it may be running there are considerations of picking up and setting down then. But to limit it to allowing the traffic commissioners to specify that passengers shall not be taken up and set down except at specified points, seems to me to be quite unduly restrictive on a minibus going through rural areas.
I would certainly accept the other part:
40
"or shall not be taken up or shall not be set down between specified points."
This may well be right. This is a different consideration, and it would apply to areas where the road is dangerous or where it is in a built-up area, and all the rest of it. But it seems to me that there are these two points in regard to which the clause seems unduly restrictive.
LORD MITCHISON: On the noble Lord's first point, I venture to think that he has not given full effect to the language of the clause. He quoted the words:
"The traffic commissioners shall not grant a permit … unless they are satisfied that there are no other transport facilities available".
But the following words are:
"to meet the reasonable needs of the proposed route."
If the wording had been "there are no other transport facilities on the proposed route", then the instance he gave would be in point. But it is more than that. They have to be not only available on the proposed route, but available to meet the reasonable needs of people. Perhaps in the remoter parts of Dumfriesshire even a single bus a day would be hardly sufficient for that purpose.
LORD DRUMALBYN: May I simply say to the noble Lord that I think that this can be read in a different way as well, and this is why "insufficient" would seem in this case to be a much better word to use than "no".
BARONESS ELLIOT OF HARWOOD: I should like to support the words of the noble Lord, Lord Drumalbyn. One of the difficulties of a transport system is that in order to make it fit the requirements of the user, the consumer, it has to be fairly flexible. There is a good example of an extremely successful running of buses which the noble Lord, Lord Mitchison, will know well. It is the bus which runs from Glasgow, right down Loch Fyfe to Lochgilphead. I have used this bus often, and the number of stops which are allowed are, I think, nothing like the number of stops that are in fact, by use and accommodation, made through the services of the bus driver. Where these are the only methods of getting about, as in this part

41
of Scotland, this makes the service remarkably good.
I think it would be a great pity it in our rural areas we were so tightly to restrict the services with rules and regulation that the services were not able to fit in with the needs of the rural communities who live nearby and are spread over rural routes. We want to make it possible for people to use the services, and so give them a much better chance of paying. This will be much more valuable from the point of view of the people who are running these services. It can be done. It is done successfully in many places. I hope that in this new Bill the matter will be left fairly flexible so that people can put on buses and they can be used in the best interests of the consumer of bus accommodation.
THE EARL OF CROMARTIE: I should like to support my noble friend Lord Drumalbyn, and the noble Baroness who has just spoken, from the point of view particularly of the West Highlands, where it is not possible to have specified points of picking up passengers and setting them down. Crofter communities are often placed well away from the road, and people walk along and expect to be picked up on the road. It is not practical to confine them to set stopping places. Years ago there was an occasion when it would have been a disaster. I stress that it is riot the case now, but at one time there was an old crofter lady who had an illicit still at a certain point on a road, and when the Excise man was not aboard the bus invariably stopped there.
4.30 p.m.
LORD WINTERBOTTOM: I am glad that the noble Lord, Lord Drumalbyn, welcomes this particular clause in principle. It is not only North of the Border where this provision will enable new and valuable services to be introduced. In Northamptonshire, there are no bus services in the part of that county where I live, but there is an excellent network of school buses running mornings and evenings. I have always wondered why it should not have been possible to include in these services individuals who are not school children but who want to go about that part of the country. This Bill gives us the power to do this, and I have every sympathy with what the noble Lord has
42
said on subsection (2) of the Clause, and I will look into the point whether or not "no other transport facilities" in fact is so restrictive that if there is one bus service a week, this would kill the whole scheme. I do not believe that to be the case because the intention is that the facilities must be available to meet the "reasonable needs" of the proposed route. "Reasonable needs" is, I would have thought, surely more than one day a week. For that reason, however, while I am confident that the intention is sensible, I will make certain that the wording of subsection (2) is not, in fact, so restrictive that a single bus service once a week would kill the whole scheme.
As regards the point made on subsection (3)(c)—the taking up and putting down of passengers at specified points—this particular subsection is entirely permissive. The traffic commissioners can fix these putting down points or they need not; it is up to them to choose. If we think in terms of the part of the world in which I live, I can thank of a number of crossroads and schools where the buses stop anyway and where there would be natural picking up and putting down points. I am reasonably certain that, if the intention is that we should implement our local pattern of public transport by this means, then sensible things will be done by the traffic commissioners in defining the points where people can be picked up and put down. Again, if the position is contrary to what the noble Lord and I believe it to be, I will let the noble Lord know.
LORD MITCHISON: Before we leave this clause, may I suggest that the words "and sufficient" after "available" would remove any ambiguity?
LORD DRUMALBYN: I am grateful to the noble Lord for the assurances that have been given, but I would just ask the noble Lord to bear in mind that an operator would be liable to lose his licence if he did not conform to such conditions as are laid down here, and it would be very difficult indeed in rural areas to conform with the conditions that an operator should not stop and pick up a wayfarer who wanted to be picked up here or there, so I hope he will consider this.
Clause 30 agreed to.
Clause 31 [Abolition of special control over bus services provided by local authorities outside their areas]:
On Question, whether Clause 31 shall stand Part of the Bill.
LORD DRUMALBYN: This is a Clause which abolishes the special control over bus services provided by local authorities outside their areas. I would like to ask the noble Lord what is the reason for this change in the law. My view is that while passenger services continue to be regulated by the Traffic Commissioners, it does not seem unreasonable that a local authority that goes outside its own area should get authority to do so. There may be a good case for giving a local authority special privileges within their own area, but there does not seem to be any good reason for giving them special privileges outside their own area.
LORD WINTER BOTTOM: This is really part of the earlier argument. One assumes that the individuals who will be recasting the various traffic services will act in a sensible way, and that we will get a rationally integrated system of transport, some starting inside a local authority area and generated within a Passenger Transport Authority, and some which will link up with the services run by the National Bus Company. The intention of this clause is really to give the planners of our future bus network the flexibility that any sensible organisation might require. It is basically the substitution of the words "on any road inside or outside their district" for the words "on any road within their district". The licensing procedure will still apply to these services as a separate procedure, but these wider powers to enable public service vehicles to run outside the area of the local authority must, in fact, give an element of flexibility which, in the long run, will give the consumer better service.
Clause 31 agreed to.
Clause 32 [New bus grants]:
LORD NUGENT OF GUILDFORD LORD NUGENT OF GUILDFORD moved Amendment No. 102:
Page 50, line 18, leave out from ("make") to ("a") in line 19.
LORD DRUMALBYN: This clause deals with the new bus grants and the purpose of this Amendment is to make them more generally available and for
44
the clause not to be so very restrictive as it is. The clause, as it stands, enables the Minister to
"make in such cases as he thinks fit, a grant to any person operating public service vehicles in Great Britain towards approved capital expenditure incurred by that person in providing a new vehicle of a type approved for the purposes of this section by the Minister…"
This group of Amendments, 102, 103, and 104 would first of all leave out the words "in such cases as he thinks fit" so as to make it necessary for the Minister to make grants evenly available to everyone who wants them towards the cost of providing a new vehicle, and would also leave out the words "of a type approved for the purposes of this section by the Minister". The clause goes on:
"being a vehicle which is provided for use by that person wholiy or mainly as a stage carriage in Great Britain…".
Here again it is felt that this is unduly restrictive. The vehicle may be provided also as an express carriage and the mere fact that it is only occasionally provided as an express carriage would not, of course, exclude the vehicle from a grant as the clause is drafted, but we do not think that goes far enough. We think that if the manufacturers are to be able to have complete freedom in designing the best possible vehicles, the authorities should be free to experiment with different kinds of vehicles, otherwise it will depend so very much on the judgment of the Minister. The Minister may personally have very little experience of running buses at all, and it is not his advisers that are going to have this experience, it is the bus companies that are going to have this experience and they should have the greatest possible latitude in the choice of their buses.
The history of the railways is one indication of the danger of leaving this kind of decision in the hands of a very few people. I remember in my early days in Parliament pressing for the use of diesel locomotives; I was assured that as this country was built on coal with vast supplies of coal below it, we would never leave coal. This was the argument, and for a long time this was the general attitude in the Ministry and in the Railways Board: coal was the thing and engines must be steam engines. Then, all of a sudden, overnight, the whole thing changed to the total disruption of our railway system. We had breakdowns all over the country in the early days, and so

45
on. We could not even get the locomotives we wanted in this country. We had to import the designs, if not the locomotives, from outside, and this is what happens if you make the choice as narrow as is defined by this clause. Here the Minister is to be left the sole judge as to the cases in which he thinks fit a grant should be made, and it should only be for stage carriages. This series of Amendments would extend that not only to the stag:, carriages but also to the express carriages, and would make clear that it is only the capital expenditure which has to be approved and not the type of vehicle. I beg to move.
4.40 p.m.
LORD MITCHISON: I find these Amendments, particularly the first, rather remarkable. The Bill says that the Minister may "in such cases as he thinks fit" make a grant. He has to have Treasury approval, but the intention of the Amendment is to oblige him to make a grant. There was a similar clause in the Housing Acts providing for the purchase of houses in certain cases where it might be advantageous to have them handed over without a cash consideration at all. They were finally reduced to selling the houses for Is. That would be the effect of this Amendment, since it does not affect the amount of the grant which the Minister is to make, but simply advises him to make "a grant".
LORD DRUMALBYN: The noble Lord will bear in mind that passenger carrying vehicles used to be entitled to investment grants.
LORD MITCHISON: I dare say, but that is not this clause. This clause is intended by this Amendment to oblige the Minister, with the approval of the Treasury, to make a grant. The curious intention of the Amendment appears to be saved by not saying how much the grant is to be; and by leaving intact subsection (3) which allows him to impose any conditions which he wants to, including repayment. He might make a handsome grant of, let us say, half-a-crown on the terms that it was repaid the next day. I cannot quite accept the first Amendment as a serious proposal, and I am certain that the noble Lord, Lord Drumalbyn. will not wish to press it. He has said in terms that he wanted to take the discretion away from the
46
Minister and make a grant obligatory. The Tory Party must give up this practice of trying to make it obligatory to hand over public money to private enterprise. It is usually wise to leave a certain amount of discretion with the elected Government of the day.
THE DUKE OF ATHOLL: I do not quite follow the noble Lord Lord Mitchison. This Amendment says that the Minister "may" make a grant, not that he shall make a grant. I should have thought one might have left it entirely to the discretion of the Minister, provided that the Treasury approves. Surely the words "in such cases as he thinks fit" are rather redundant.
LORD MITCHISON: I am inclined to agree with the noble Duke, but we were told that the object of the Amendment was to make a grant obligatory.
THE DUKE OF ATHOLL: But if one reads its wording one sees that it does not in fact do that. I support the second Amendment very strongly, and I hope that the noble Lord, Lord Winterbottom, will enlighthen me on one matter.
In the more remote and rural parts of Scotland there is a definite need for bus services, with buses holding not the usual thirty to forty people, but holding 12 or 15 people. Most of these services are almost bound to be uneconomic because the demand for them is fairly low, except during the three summer months June, July and August. A grant for the development of a suitable bus of this sort and for the manufacture of such buses would be a great help to the more remote parts of Scotland, Wales and no doubt South Western England. I hope that either the second of these Amendments will be accepted, or that we shall be told that a new type of Vehicle approved for the purposes of this clause by the Minister will not be restricted to the conventional type of bus.
LORD WINTERBOTTOM: I, too, may have misunderstood the noble Lord, Lord Drumalbyn. I did not think that he wanted to make this proposal obligatory on the Minister, but thought that he wanted the grants made under it to be evenly available and that there should be fair treatment of all people concerned. I should like to reassure him or this point. We all agree that the power of the Minister to pay a grant must clearly

47
be permissive; the word "may" in line 18 makes it permissive. Of course, the Treasury must be concerned, and the position of Parliament in voting the necessary money must also be preserved. The wishes of the noble Lord, Lord Drumalbyn, are clearly understood by the Government. The terms on which the Minister will give grant are being discussed with the bus manufacturers' and operators' organisations and will of course be the same for all operators who qualify. There will be no question of admitting only claims from, for example, the nationalised bus undertakings. This covers the point of the grants being evenly available throughout the industry.
I should like to turn to Amendment 103, which relates to the approval of types of vehicle by the Minister. The noble Lord, Lord Drumalbyn, feared that this approval might be excessively restrictive, that it might freeze the pattern of design in the wrong place and at a wrong point of development. The case for standardisation in bus design has been fully explained in the White Paper, Public Transport and Traffic. It is one of the fundamental objects of the scheme as propounded in the Bill that it should encourage the purchase, for stage services, of standardised buses of high quality. Discussions with bus manufacturers and operators about the standards to be set are at an advanced stage.
The standards will provide for more than one type of bus, and there will be no question of an arbitrary restriction of standards which will deprive operators of suitable types of vehicle. As I read this part of the clause, the initiative at the end of the day must come from the Minister. He must approve the types which will be made standard. This will not be dreamed up out of his head or within his Department, but will be designed as a result of discussions with the manufacturers and operators. This is an attempt to bring some order into what at the moment is a rather chaotic situation. There has been a tendency for individual bus firms to let down their standards. Standardisation in vehicle engineering, indeed in all forms of engineering, would cut costs markedly. The object of the exercise is to get buses of a design which will enable us to use the available labour more productively.
48
Amendment 104 is a proposal to extend the new bus grants scheme to cover express services. This runs counter to the Government's proposal. These express services include the longer-distance services, with minimum fares of 1s. or more, including holiday services and also public excursions and tours. The scheme in the White Paper and in the Bill has been deliberately restricted to stage services since the intention is to help the day-to-day short-distance bus services which are essential to the community and are in particular economic difficulty. Likewise, it is these services which vehicle standards need to be adjusted to permit of one-man operation on productivity grounds. This matter is stressed in recent reports by the National Board for Prices and Incomes. The fact is that these productivity considerations do not apply to the general run of express services. For this reason, the Government want to limit the grants to the stage services.
The definition of "wholly or mainly" in the clause will be interpreted administratively. Special cases, such as vehicles of fairly luxurious type which are used initially on express and excursion services for a year or so and then transferred to stage work, can be considered if their merits deserve it.
LORD NUGENT OF GUILDFORD: May I thank the noble Lord for dealing so fully with these three Amendments. To some extent, he has met the anxieties expressed by my noble friends and shared by myself. The first point with which the noble Lord, Lord Mitchison, dealt very skilfully and thoroughly referred, at any rate in substance, to the situation in which we have a bus industry which no longer enjoys the investment allowances which were common to all bus operators before at the rate of 30 per cent. Now this very limited grant system is to be introduced which will apply only to a specific type of bus of which the Minister will approve. We have a general doubt about the wisdom of such a limited approach to this field.
The noble Lord, Lord Winterbottom, said that the Government have deliberately excluded express services. I acknowledge straight away that the major problem with which we have to contend is the stage carriage service. This will be a continuing problem for the rest of our

49
lives and until somebody has thought of something better. I agree that that is where the shoe pinches tightest. But I should have thought that there was a good deal of interlocking between the stage carriage service and the express service, especially in the more remote areas. My noble friend the Duke of Atholl referred to the problem in the Highlands. In those areas, the stage carriage service is often related to the express services. I think that it is unwise to concentrate the grant on one point only. While I would acknowledge that advantages are to be obtained from standardisation—in reducing manufacturing costs, by getting long manufacturing runs and probably with spares and maintenance, too—there are disadvantages.
The questions which I should like to ask the noble Lord and which I jotted down are these. Does he not feel any anxiety that this uniformity may inhibit progress and invention? The fact that the Minister is to consult a committee of manufacturers still will not prevent rigidity once the type has been settled. I feel great anxiety that this may inhibit progress and invention. In particular, may not uniformity handicap the development of new types for the export market, where our manufacturers are outstandingly good? How can we be sure that the Minister and his civil servants, even with a panel of manufacturers to help them, will be more omniscient and far-sighted in looking into the future than a range of individual manufacturers who have their own ideas, some of which are wrong, but some of which may be outstandingly right?
Is not the noble Lord taking the doctrine of centralisation of decision too far in this field? I understand his thought and I can see value in it, but does he not recognise that there are great dangers in it, too? Is he really sure that he has the right balance? This obviously is not the kind of Amendment which we should press. However, we are concerned to get the same result. We want a good, healthy, developing, inventive bus manufacturing industry producing buses as cheaply and effectively as possible. I question whether pitching the grants on one narrow field only will do.
LORD WINTER BOTTOM: The point made by the noble Lord must concern us all, and particularly the Ministry of
50
Transport. Government Departments are seldom inventive. They may administer wisely, but, with the exception of my Ministry, of course, they very seldom invent anything. The concerns expressed by the noble Lord needed to be expressed. But I can assure him that there is every intention to consider experimental vehicles. Indeed, further on in the Bill there is provision for grants for the development of experimental types. I can give an undertaking that the Minister will always consider new types of buses if and when the industry puts them to him. However, our immediate problem is for more standardisation, and this we should like to carry through with the powers given in the Bill. I assure the noble Lord that his apprehensions will not be forgotten.
THE DUKE OF ATHOLL: Could the noble Lord answer my question about whether mini-buses would be considered?
LORD WINTERBOTTOM: I should have thought that the whole range of buses and all types of vehicles would be considered by the Minister in setting the standards required. Obviously, minibuses must fall within this category.
LORD DRUMALBYN: In view of what the noble Lord has said, for which I thank him, I beg to ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
4.57 p.m.
LORD WINTERBOTTOM LORD WINTERBOTTOM moved Amendment No. 105:
Page 50, line 25, leave out ("the appointed day") and insert ("such date, not being earlier than 1st September 1968, as the Minister may by order specify.").
The noble Lord said: With the leave of the House I will move Amendments Nos. 105 and 106 together, since Amendment No. 106 is consequential on Amendment No. 105. The purpose of these Amendments is to enable the Minister, if he so desires, to apply the new bus grant scheme to new buses which become E vailable for use by operators for stage 'work on or after September 1, 1968. Under the clause as it stands, which provides for this date to be fixed as an "appointed day" a date earlier than that of Royal Assent would not be possible. The White Paper Transport Policy indicated that that scheme would apply to buses delivered to

51
operators from the autumn of 1968. Discussions with bus manufacturers and operators about the scheme have reached an advanced stage, and the Amendments will ensure that there need be no artificial restriction on the selection of date for this purpose, assuming that the scheme as a whole is agreed in the near future. The Amendments have Treasury approval.
The Amendments will empower the Minister by order to fix any date for this purpose on or after September 1 this year, whether before or after Royal Assent. This order will not be subject to Parliamentary procedure. These Amendments relate only to the method of defining the vehicles eligible for the purpose of the scheme. Clause 32 itself, and the powers to pay grant under it, will not come into force until the day appointed under Clause 156, which will, of course, be after Royal Assent. There is therefore no question of grants actually being paid in advance of Royal Assent. I beg to move.
LORD NUGENT OF GUILDFORD: I thank the noble Lord for his explanation, and say that the Amendments re acceptable to us.
On Question, Amendment agreed to.
LORD WINTER BOTTOM: I beg to move No. 106.
Amendment moved—
Page 51, line 18, leave out from beginning to second ("the") and insert ("date specified under").—(Lord Winterbottom.)
On Question, Amendment agreed to.
Clause 32, as amended, agreed to.
Schedule 8 agreed to.
Clauses 33 and 34 agreed to.
Clause 35 [Provisions with respect to operation of public service vehicles]:
5.1 p.m.
LORD NUGENT OF GUILDFORD LORD NUGENT OF GUILDFORD moved Amendment No. 107:
Page 53, line 31, leave out ("consider any representations") and insert ("shall have power to consult if they think fit").
The noble Lord said: I beg to move Amendment No. 107, and it may be convenient to debate No. 107A with it. Clauses 35 and 36 relate to new arrange-
52
ments for the licensing of public service vehicles, and they have a special importance for noble Lords here because they had very little debate in another place. These clauses first appeared in another place on the Report stage, so that the Commons had no opportunity to debate them on the Committee stage. I think, therefore, that they merit very close attention.
Perhaps I might just say a word for the benefit of noble Lords who are not entirely familiar with the complications of licensing. Public service vehicle licensing rests on the 1960 Act, Section 127, and it is in fact a very effective system. Whereas the licensing of freight vehicles is, in my judgment, defective (and here I am with the Government on the clauses, to which we shall come later, which are going to improve it), the licensing of public service vehicles is, I would say, effective. The system consists of two licences, the first of which is a road ser-vice licence which the traffic commissioner may grant to the operator to operate a public service vehicle. The second is the licence granted to the vehicle itself, and before granting it the traffic commissioner has to satisfy himself that the vehicle is in every way fit to carry passengers for public service. The vehicle's fitness is frequently and very effectively checked by Ministry officials to ensure that it conforms to the current Construction and Use Regulations, and any defects that may be discovered could result in the suspension of the licence and the vehicle being taken off the road; or, indeed, the licence could be revoked if the traffic commissioner thought necessary. I mention this because I want to make the point roundly that the existing system is a satisfactory one.
As I say, this clause first appeared on Report stage in another place, and it arose as a result of representations by Labour Back-Benchers who applied to the Minister to put this clause on the Statute Book. I make this point to noble Lords: that this Bill, which we have all recognised is a record Bill in size, is quite clearly not one in which the Government or the Minister has felt reluctant to include anything that the Minister or his officials thought would be necessary for transport. Therefore it is a pretty fair conclusion that this possibility must have been considered in the Ministry of

53
Transport before the Bill was ever drafted and that the experts there, including the Minister, had come to the conclusion that no such clause as this or the next one was really needed. However, here it is.
When the public bus industry—that is, the Passenger Vehicle Operators' Association—were asked what they thought of this clause, and the next one, they reacted immediately with the reply that they considered that neither clause was necessary. They were very much opposed to the second one, and they did not think the first one was necessary. But within three weeks of receiving this letter the clause was on the Order Paper, and had very rapidly been passed by another place. We can all make a comment, I think, on this way of treating both the industry and Parliament: that something of very considerable importance, and affecting a great many people, should be put forward to go on the Statute Book in such a rushed and high fashion.
Turning to the merits of this clause, noble Lords will see that it gives certain categories of people mentioned in paragraph (b) the right to make representations which the traffic commissioner must consider when issuing a licence. The present position is that the traffic commissioner is fully authorised to consult with anybody he likes; and does so, if he considers it necessary. So it is quite unnecessary to put anything like this into the Bill. Why those who wanted this in the Bill wished A to be there it is not for me to say. The only point I make is that it is quite unnecessary to have it there at all. But what is necessary is that the traffic commissioner's judgment in dealing with licences should be as unfettered as possible. He should be completely free to consult whom he likes and then to use his own judgment as to how he will issue a licence if he thinks it necessary and if he thinks it is justified. This is the background to it.
The effect of our Amendment is marginal. It would leave the power to consult but it would reduce somewhat the cogency. Paragraph (b) now reads that the traffic commissioners
"shall consider any representations with respect to any of those matters made by any of the following persons,…"
The Amendment will make the paragraph read that the traffic commissioners
54
"shall have power to consult if they think fit with respect to any of those matters…"
The Amendment I am moving is a pretty marginal affair, but it reduces it a little. I may say that the industry thought that the right thing to do was to remove this clause altogether. I do not wish to suggest a course which would be offensive to the Government in a relatively small matter like this, and therefore I am moving an Amendment which would perhaps make for a compromise. I hope that noble Lords opposite will see that this is a quite semsible, practical thing to do, and I beg to move.
LORD MITCHISON: The noble Lord who moved this Amendment will remember that the mountains gave birth and they produced at the end only a rather small mouse. His mountains gave birth with great eloquence, but at the end I wonder whether there is really even a mouse. I am not quite clear what difference this Amendment is supposed to make; and I am rather afraid that if it is meant to omit anything it is omitting an obligation which noble Lords opposite, who were so intent on democracy and the interests of the consumer a short time ago, would not wish to see omitted.
All the clause does—and I quite agree that it is not a very weighty or important matter—is to oblige the traffic commissioners to consider certain representations. Why I feel it is not really very important is that they undoubtedly ought to do so anyhow, and almost certainly they would, but there is perhaps an advantage in setting out those bodies who have a specific right, which must not be overlooked, to a consideration of their representations. That is now going to be removed, and what is going to be put in its place is a power "to consult if they think fit" with those same bodies. It is only if they think fit. I should not have thought that this needs to be put in a Statute at all. If you oblige people to consult you may cause a good deal of inconvenience and delay. That is why people sometimes are reluctant to have provisions to that effect in a Statute. It seems to me unnecessary to remove a provision—which, whatever one may think of its importance or form, was intended for the protection of the public and the consumer in certain respects—and to substitute for it something which

55
adds nothing to what the traffic commissioners would do anyway. One has a good deal of sympathy with some of the "mountains" to which I listened with great attention. One feels that the "mouse" is rather a small one, possibly both non-existent and running the wrong way; and therefore undoubtedly an Irishman of a mouse.
LORD BALFOUR OF INCHRYE: Unlike the noble Lord, Lord Mitchison, I see a very considerable difference between the Bill as it stands and the Bill as it would be if this Amendment were accepted. Under the Bill as drafted it is obligatory for representations to be considered with respect to any matter set out. Under the Amendment it would be within the discretion of the authority to consider such representations. Representations are not always either relevant or accurate. Representations can very quickly lapse into accusations, particularly when we look at subsection (2)(a) which says:
"…the previous conduct of the person in question in relation to any trade or business in the course of which vehicles of any description are operated, being a trade or business—
(i) carried on by him or by a company of which he is or has been a director;"
That really means that any ex-employee who has a particular grievance or feels a particular grudge against his employer will have an absolute right to bring that forward to the authority to be considered. I think that is thoroughly wrong. We have often seen irrelevant and unfair accusations made when application is made for renewal of the licence of licensed premises. My fear is that if this very wide power is left in the Bill we shall see that sort of conduct repeated in this field. For that reason I hope the Government will give sympathetic consideration to the Amendment of my noble friend.
LORD ROBERTSON OF OAKRIDGE: I very much support this Amendment. I do so for rather personal reasons. I discovered fairly early in my dealings with my good friends in the trade unions that as soon as I had agreed to consider representations I had, in fact, agreed to concede representations. That is the meaning these words are given by many of our friends in the trade unions. I think those words contain an undesir-
56
able emphasis. I much prefer the Amendment.
LORD ST. HELENS: I should like very briefly to support my noble friend over this Amendment. I think my noble friend Lord Balfour of Inchrye and also the noble Lord, Lord Robertson, hit the nail on the head. It may seem rather a small matter but I consider that there is an immense difference between "to consider" and "power to consult". What the Amendment does is to return the initiative to the Commissioners. As it stands in the Bill now, making it obligatory to consider, the initiative is taken out of the Commissioners' hands. This I think is a wholly bad thing. I do not know whether my noble friend is going to press this to a Division or not, but if he does I shall be happy to support him.
LORD POPPLEWELL: Listening to the noble Lord, Lord Robertson, and remembering the position he occupied with distinction for such a very long time, one can appreciate the interpretation that might have been put by the trade unions on his agreement to consider representations. But on the other hand, from time to time many things arise in this service on which it is advisable that the trade unions or other associated bodies—not just the trade unions themselves—may desire to make representations. I think it is right that the Commissioners should have to consider those representations.
The terms of the Amendment are so very wide: "shall have power to consult if they think fit". The operative few words are, "If they think fit". If the Amendment were accepted and the Commissioners turned down a representation because they did not think fit to consider it, there would be created a situation which I do not think would be in the best interests of those working closely in association in this service. Undoubtedly, people with the skill of Lord Robertson and others with vast managerial experience can quickly evaluate representations. It is understandable if friendly relations obtain between management and trade unions that a promise by the management to consider a certain factor might be interpreted by the unions as an agreement to concede it. But surely skilled management can quickly remedy any such misapprehension; and will he able to do so without seeming unjust.

57
I think it would be inadvisable to accept this Amendment.
VISCOUNT SIMON: The discussions in Committee may be a little "off beam", because, with great respect to the noble Lord, Lord Nugent, he introduced this Amendment by saying that it refers to circumstances when the Commissioners are granting a licence. In fact, it refers to circumstances when the Commissioners are considering suspending or cancelling a licence. I am not clear how any of these bodies know that the Commissioners are considering that matter. Indeed, until they know that they are considering the matter representations cannot be made. But if, as I assume, there is some notice given that the Commissioners are considering the matter, I should have thought it would be perfectly right that the bodies set out in the Bill should have the right to make representations and that the Commissioners should take those representations into account. With great respect, I do not think the noble Lord, Lord Balfour of Inchrye, was right in suggesting that any aggrieved person could make representations. That is not so.
LORD BALFOUR OF INCHRYE: He fulfils the requirements if he is a director or is running his own business.
VISCOUNT SIMON: I beg his Lord-ship's pardon. I do not think I have made my point correctly. The only people whose representations have to be taken are trade union officials, a chief officer of police or a county council or borough council. Individuals' representations are not to be taken into account. With the greatest respect, I think the point raised by the noble Lord is irrelevant.
LORD BALFOUR OF INCHRYE: Perhaps the noble Viscount would look at subsection (2)(a) on page 54.
VISCOUNT SIMON: Yes; but the only representations which are the subject of this Amendment are representations made under Clause (1)(b)—that is, representations by trade unions, chief officers of police or by a county or borough council; so I do not think that individual representations come into the picture. I certainly feel that there are no good grounds for this Amendment; and that it would be far better to leave the clause
58
as it is, and let the commissioners take into account representations made by these responsible people in cases where they are already considering the cancelling or revoking of a licence.
LORD WINTERBOTTOM: With respect to my noble friend, Lord Mitchison, I think that this is rather larger than a "mouse". We are discussing a quite important animal, but I think that the noble Lord, Lord Nugent of Gutldford, is reading too much into the intention behind Clause 35 as drafted. The noble Lord's Amendment would remove the obligation of the traffic commissioners, when considering whether a person is a fit person to hold a public service licence, to take into account any representations on the subject by the persons described in Clause (1)(b), and would substitute a permissive power for the traffic commissioners to consult these persons if they thought fit. In other words, the persons concerned, the unions, the operators' organisation, the police and the local authorities, would have no right of representation.
We believe that they should have the right of representation. The purpose of the clause is to provide statutorily for this right if the persons concerned wish to exercise it. The persons concerned are under no obligation to make representations, if they have no cause to do so, and the commissioners are under no duty to seek such representations if they are not made. In fact. under present procedures the commissioners always consider complaints from these sources, which are listed in this clause. So the hard fact of the situation is that the actual procedures a -e not being altered by this clause at all. All that is being done is to strengthen the existing procedure. The traffic commissioners, who have of course been consulted, welcome the clause as a whole and see no objection to the proposals made. I think this a very strong point in favour of the clause. As the noble Lord, Lord Nugent of Guildford, pointed out the system works reasonably well.
The noble Lord, Lord Balfour of Inchrye, has been answered in pact by my noble friend Lord Simon. It not individual trade unionists who can make complaints; it must be a trade union, and although an individual may be a

59
member of a trade union and his representative may put the case to the commissioner, it does not necessarily follow that there is a filter.
LORD BALFOUR OF INCHRYE: The point I want to make is that a disgruntled union member could call on his union to make his individual case, and it might be a case of revenge and unjustified.
LORD WINTERBOTTOM: The noble Lord, Lord Balfour of Inchrye, is quite correct; this is the sort of thing that happens in life, and it was pointed out by the noble Lord, Lord Robertson of Oakridge. But most trade union leaders and traffic commissioners are level-headed men, and I do not think that the risk is quite as great as the noble Lord makes out, although I admit that it exists. On balance, we believe that the advantages of the clause outweigh the disadvantages indicated by the Amendment. I hope that noble Lords will accept the explanation I have made and agree to the clause.
LORD NUGENT OF GUILDFORD: I thank the noble Lord, Lord Winterbottom, for answering the debate and dealing with my Amendment so sympathetically, but I am sorry that he does not feel that he should accept it. I am bound to say that I feel very unconvinced when he tells me that he and his noble friends and right honourable friends in the Government believe that this right for these various bodies should exist. I again make the point which I made before, that they did not think so until about a month ago and, Heaven knows!, they have had long enough to brood over this Bill and they have put everything else into it. The case for putting this provision in the clause is really very thin. I thought that the noble Lord, Lord Robertson of Oakridge, made a cogent point. These traffic commissioners act in a semi-judicial capacity, and I should have thought that the less right that various people have to oblige the commissioners to listen to them, the better. Let the commissioners use their own judgment and let them use their own freedom to consult anyone they like, which is what they do now.
The noble Lord said that the traffic commissioners welcomed the clause. It would be very difficult for them to do
60
anything else as they are appointed by the Minister. What else does the noble Lord think they would do? I am not going to suggest to your Lordships that we should divide the Committee on this matter. The noble Lord, Lord Mitchison, who I so often find on my side, said that this was only a "mouse". The smaller the mouse, the more the noble Lord gives me my case, and the noble Lord, Lord Winterbottom, ought to accept the Amendment. But I realise that it is not quite so easy as that from the point of view of the noble Lord, Lord Winterbottom. This is not the kind of issue on which we should divide. I am clearly going to ask leave to withdraw my Amendment, but I would nevertheless again make the point to noble Lords on the Government Front Bench that they have, I think, been unwise. They have a system which is working extremely well, and now they propose to throw in a new element which will probably do more harm than good. I beg leave to withdraw the Amendment.
LORD WINTERBOTTOM: Before the Motion is put, may I say that I will see what I can do to help the noble Lord, Lord Nugent of Guildford, on his way, though I cannot make any promises.
Amendment, by leave, withdrawn.
Clause 35 agreed to.
Clause 36 [Power of local authority to run contract carriage]:
5.27 p.m.
LORD NUGENT OF GUILDFORD LORD NUGENT OF GUILDFORD moved Amendment No. 108:
Page 55, line 20, leave out ("and places outside").
The noble Lord said: This Amendment has rather more substance in it, and I am sorry to see that the noble Lord, Lord Mitchison, is about to leave the Chamber. I had hoped that in respect of this Amendment he would have felt that the "labour of the mountain" was justified and that something more than a mouse would emerge. Seriously, I hope that the noble Lord, Lord Mitchison, will not stay to listen to this debate unless it entirely suits his convenience.
Clause 36 is also a newcomer to the Bill. It arrived, as did Clause 35, about three or four weeks ago, on the Report stage, and therefore in another place they have had a chance to do no more than

61
have a short debate on Report, either to accept or to reject it. Again I feel that this deserves our closest attention. The effect of Clause 36 is to give to local authorities who are running bus services the power to run what is called contract carriers in the trade, which means, to laymen like ourselves, coach trips and contract hire. But it gives this power to these local authorities to run contract carriage either inside or outside their local authority area; that is to say, to any part of the country, and presumably, if they like, to any part of Europe as well.
The effect of our Amendment would be to allow local authorities to run contract carriage within their own areas only, and not outside to the rest of the country. Again, the private sector of the passenger service vehicle industry, that is, the Passenger Vehicle Operators' Association, were asked for their opinion of the clause and they reacted strongly against it. They feel that it carries a serious danger to their livelihood. It is fair to make the point that these people running contract carriage services, these private firms, have had a difficult time. The Government have taken away their investment allowances, which were 30 per cent. grants for all new vehicles. They have put on the selective employment tax. And these people are having a difficult time to get a living out of their businesses. They see the entry of the local authority bus service into this field as a serious blow to their continuing to get their livelihood.
On the whole, experience has shown that private bus companies are more efficient in this field than public corporations who have tried it. Noble Lords opposite, with instinctive loyalty, say, "No", but for the benefit of the noble Lord, Lord Popplewell, who has a warm spot in his heart for London Transport, let me say that London Transport used to run a contract carriage service. They regularly lost money. So, eventually, they decided that the best thing to do, when they had contract carriage work to do, was to employ a private firm and take 10 per cent. That is what they do now, and they are doing better for themselves and everybody else in the process. This is very wise, but unfortunately this does not always happen. Occasionally a municipal bus corporation feel that, because private firms are making profit out of this business, it
62
would be a good thing if they extended their stage carriage service into this field. And having done this, they are making a loss, but will not give up because of the prestige factor.
I am not going to name names, unless your Lordships wish me to do so, but I have examples where this happens. Inevitably what happens is that municipal bus services quote cut rates in order to get contract carriage work, run at a loss to take business away from the private firms, and then the ratepayers have to make up the deficit. This is no good to anybody. It is no good to the ratepayers and no good to private business.
It is against this situation that my Amendment is directed. It really does not make sense to encourage local authorities to go into this field. Again I stress the point that obviously the Minister of Transport did not think it would make sense to do this because he did not put it in the Bill to start with but once again, as a result of cogent representations made to the Minister, it was put in. I urge your Lordships to agree that it is not a good thing to encourage municipal bus corporations to go into this business, and I hope that the Government will accept this Amendment. I beg to move.
LORD MITCHISON: This is not a case of the mountain producing a mouse. This argument itself is as old is the hills. It was produced the first time any municipality wanted to run its own transport service. All it comes down to is that private interests do not always like the competition of a public service. I think we could all agree about that. On this occasion, the elected Chamber has decided on this long-disputed and not unprecedented issue that the public would be better served by allowing municipalities to have contract vehicles even outside their own area. One could argue about this for a long time. I have no intention whatever of doing so, because all the arguments I should adduce, and all the arguments which would-be adduced from the Benches opposite, are bound to have been heard before on other issues.
We have just heard an eloquent plea from noble Lords opposite on behalf of the consumer. Apparently he never

63
had a chance; he was not properly represented on this, that or the other committee. Noble Lords opposite stand for the consumer, and with vigour. What about the consumer in this case? Is it to his advantage or disadvantage, not that there should be this or that service, but that local authorities and others who run public services should be allowed to extend these services by running contract vehicles outside their own areas?
I know perfectly well what a contract vehicle is and why it is run by the private side of the industry: because it pays them to do so. We are asked who would benefit if the ratepayer were called upon to subsidise the municipal service. In the majority of cases it is the other way round. It is the municipal service which assists the ratepayer. But the short answer to noble Lords opposite is that the man who will be benefited in this case is the consumer, whom in other cases the noble Lords were so anxious to protect such a short time ago.
5.36 p.m.
LORD WINTERBOTTOM: My noble friend has stated the doctrinal position on this clause very well. I think that we all agree with him that what the Bill is trying to achieve is a better service for transport users. The argument put forward is that two classes of people will suffer as a result of this clause. First, those who run passenger transport firms will suffer directly because of competition from local authorities running more extensive services; and, secondly, the ratepayer will suffer, if, out of folio de grandeur, the local authority decides to run, in competition with a private company, at a loss. While I accept that competition may well harm someone, if he is not particularly efficient, nevertheless, the powers proposed to be given to local authorities are fairly strictly circumscribed.
The local authorities are required to give the Minister not less than three months' notice of their intention to run contract carriages beyond their district, accompanied by a statement of the extent to which the authority has made, or proposes to make, co-ordination agreements with other operators of bus services within, to and from its district. These other operators might be the National
64
Bus Company, the Scottish Transport Group, a Passenger Transport Executive or any other bus operator, whether private or municipal, according to the circumstances. I always thought that the circumstances in which local authorities would in fact exercise the powers given them under this clause would be limited, particularly by the rather protracted procedure necessary for them to get the permissions required. If they made a case to the Minister, probably it would be a good thing and in the public interest that this power should be given to them.
The area of operation provided in the clause follows the definitions of the operating area for P.T.E's under Clauses 10(1)(i) and (iii)(a). There are no restrictions upon operations within the district or to and from the district. Operation wholly outside the district is limited to cases where it is connected with the authority's main activities. The hard fact is that few municipal operators have succeeded in getting general contract carriage powers in local legislation, and the general legislation—the Road Traffic Act 1930—expressly does not confer such powers. Many local authorities have powers to "run and service" vehicles within their district. The interpretation of this power as enabling them to run contract carriages was questioned in the Commons on Report, but to my knowledge it has never been challenged in the courts. Few local authorities have powers to go outside, even on a restricted basis. I think it is best left, within the controls which will be exercised by the Minister of Transport, to the local authorities to follow the provisions of this clause as they think fit.
LORD NUGENT OF GUILDFORD: The noble Lord made the best he could of a very bad job, and a very bad job it is. As this time he used the de minimis argument to me, I think he should have been supported by the noble Lord, Lord Mitchison. The "mouse" was coming from the Government Benches this time. If the noble Lord goes too far in that direction it will not give much comfort to his honourable friends in another place who are anxious to see this clause on the Statute Book.
Of course, there are powerful safeguards put into this Clause 36. The Minister knew jolly well that it ought not to be there at all. That is why it was not put into the Bill to start with. Of course,

65
the Minister has done the best he can to make sure that local authority bus services do not apply for contract carriage if he can possibly avoid it, because he knows that they ought not to. But he has done it, it is already provided for, and now we are being asked to make it the law of the land by this Bill. I most urgently advise your Lordships not to do so. It is quite wrong, both in terms of the ratepayers' interests and in terms of the private firms. The general experience is that private firms operate better than public corporations in this field.
Let me say this to the noble Lord, Lord Mitchison. Certainly the private firms make a profit out of this. If they did not, they would go out of business. But it is not all that easy to make a profit out of contract carriage. This has been the general experience of the municipalities, including the London Transport Service, who have gone into it. It requires very good management and flexible operation, and much closer management than municipal corporations can usually manage.
LORD MITCHISON: Could I just ask the noble Lord one question? Suppose the facts were that it was to the advantage of the private firms, but to the disadvan-
tage of the consumer, on which side would the noble Lord be?
LORD NUGENT of GUILDFORD: I should be on the side of the consumer. The noble Lord perhaps has not studied this very closely. What has happened in two cases—and I can give the noble Lord details of them—where municipalities are running a contract carriage service, believed to be operating at a loss, is that they have often drawn off their drivers to run contract carriage work, and the result is that their stage carriage service suffers. So the consumer's interest does not necessarily benefit from this, and may very well suffer in quality, apart from the fact that the ratepayer has then to make up the deficit as well. This is not a case where the consumer's interest is at stake. It is a case where we have a field that is very much better left to private firms. It is for that reason, without taking any more time, that I would ask noble Lords to support my Amendment, and to prevent this clause in this very distorted form going on the Statute Book.
5.43 p.m.
On Question, Whether the said Amendment (No. 108) shall be agreed to?
Their Lordships divided: Contents 105; Not-Contents, 54.

CONTENTS

Aberdeen and Temair, M.

Craigmyle, L.

McCorquodale of Newton, L.

Abinger, L.

Cromartie, E.

Margadale, L.

Ailwyn, L.

Daventry, V.

Massereene and Ferrard, V.

Airedale, L.

De La Warr, E.

Merrivale, L.

Albemarle, E.

Denham, L. [Teller.

Milverton, L.

Aldington, L.

Dilhorne, V.

Monckton of Brenchley, V.

Amory, V.

Drumalbyn, L.

Monk Bretton, L.

Amulree, L.

Elliot of Harwood, Bs.

Morrison, L.

Arran, E.

Emmet of Amberley, Bs.

Mottistone, L.

Atholl, D.

Falkland, V.

Mowbray and Stourton, L.

Auckland, L.

Falmouth, V.

Newton, L.

Audley, Bs.

Ferrier, L.

Nugent of Guildford, L.

Balfour of Inchrye, L.

Foot, L.

Oakshott, L.

Barnard, L.

Forster of Harraby, L.

Ogmore, L.

Beauchamp, E.

Fortescue, E.

Penrhyn, L.

Beaumont of Whitley, L.

Glentanar, L.

Powis, E.

Belstead, L.

Goschen, V. [Teller.]

Rankeillour, L.

Blackford, L.

Greenway, L.

Rathcavan, L.

Bledisloe, V.

Grenfell, L.

Redesdale, L.

Boston, L.

Grimston of Westbury, L.

Redmayne, L.

Brentford, V.

Hawke, L.

Robertson of Oakridge, L.

Bridgeman, V.

Horsbrugh, Bs.

Rockley, L.

Brooke of Ystradfellte, Bs.

Howe, E.

St. Aldwyn, E.

Burnham, L.

Ilford, L.

St. Helens, L.

Burton, L.

Jellicoe, E.

St. Oswald, L.

Carrington, L.

Jessel, L.

Sandford, L.

Clwyd, L.

Kilmany, L.

Savile, L.

Colgrain, L.

Kinnoull, E.

Selkirk, E.

Cork and Orrery, E.

Latymer, L.

Sempill, Ly.

Cottesloe, L.

Lothian, M.

Somers, L.

Craigavon, V.

Lucas of Chilworth, L.

Strange of Knokin, Bs.

Strathclyde, L.

Thurlow, L.

Wakefield of Kendal, L.

Swinton, E.

Trefgarne, L.

Windlesham, L.

Templemore, L.

Tweedsmuir, L.

Wolverton, L.

Teviot, L.

Vivian, L.

Wrottesley, L.

NOT-CONTENTS

Addison, V.

Hall, V.

Raglan, L.

Balogh, L.

Hankey, L.

Rowley, L.

Beswick, L.

Henderson, L.

St. Davids, V.

Bowles, L.

Hill of Wivenhoe, L.

Samuel, V.

Brockway, L.

Hilton of Upton, L. [Teller.]

Serota, Bs.

Burden, L.

Hughes, L.

Shackleton, L.

Campbell of Eskan, L.

Kennet, L.

Shepherd, L.

Carron, L.

Kilbracken, L.

Simon, V.

Champion, L.

Latham, L.

Snow, L.

Collison, L.

Lindgren, L.

Stocks, Bs.

Crook, L.

McLeavy, L.

Stonham, L.

Douglass of Cleveland, L.

Maelor, L.

Strabolgi, L.

Faringdon, L.

Mitchison, L.

Summerskill, Bs.

Fiske, L.

Moyle, L.

Taylor of Mansfield, L.

Gaitskell, Bs.

Phillips, Bs. [Teller.]

Wells-Pestell, L.

Gardiner, L. (L. Chancellor.)

Plummer, Bs.

Williamson, L.

Geddes of Epsom, L.

Popplewell, L.

Winterbottom, L.

Granville of Eye, L.

Wootton of Abinger, Bs.

On Question, Amendment agreed to.

Resolved in the affirmative, and Amendment agreed to accordingly.
LORD NUGENT OF GUILDFORD: This is a consequential Amendment. I beg to move.
Amendment moved—
Page 55, line 24, leave out from ("within") to ("their") in line 25.—(Lord Nugent of Guildford.)
LORD NUGENT OF GUILDFORD: This is a consequential Amendment. I beg to move.
Amendment moved—
Page 55, line 30, leave out ("cease") and insert ("continue").—(Lord Nugent of Guildford.)
LORD NUGENT OF GUILDFORD: This is a consequential Amendment. I beg to move.
Amendment moved—
Page 55, line 30, at end insert ("except insofar as they are affected by section 31 of this Act").—(Lord Nugent of Guilford.)
LORD NUGENT OF GUILDFORD: This is a consequential Amendment. I beg to move.
Amendment moved—
Page 55, line 41, leave out ("to and from"). —(Lord Nugent of Guildford.)
LORD NUGENT OF GUILDFORD: This also is a consequential Amendment. I beg to move.
Amendment moved—
Page 56, line 9, leave out ("to and from"). —(Lord Nugent of Guildford.)
Clause 36, as amended, agreed to.
Clause 37 agreed to.
LORD FOOT LORD FOOT moved Amendment No. 113: After Clause 37, to insert the following new clause:
Motor Vehicle Safety of Manufacture Council
".—(1) The Minister shall establish a Motor Vehicle Safety of Manufacture Council (hereafter in this part of the Act referred to as the 'Motor Safety Council') to regulate and control the quality and safety of all road vehicles manufactured (or produced from imported components) within Great Britain.
(2) The Motor Safety Council shall be comprised of not less than twenty persons each of whom shall be qualified engineers—

(a) five to be appointed by the Minister;

(b) five to be appointed by the President of the Board of Trade;

(c) five to be appointed by the motor manufacturing trade;

(d) five to be appointed by recognised consumer and motoring organisations.

(3) The function of the motor Safety Council shall be to—

(a) examine for safety and quality of construction all classes of vehicles manufactured after the appointed day;

69

(b) appoint inspectors one of whom shall be seconded to all corporate bodies, companies, partnerships or individuals trading as manufacturers or producers of motor vehicles of all descriptions;

(c) require all manufacturers of motor vehicles to submit to the Motor Safety Council full details and specifications of all vehicles manufactured or proposed to be manufactured by the said manufacturer on and after the appointed day.

(4) The Motor Safety Council shall be empowered to—

(a) require any manufacturer of a motor vehicle to satisfy the Motor Safety Council that the said vehicle is constructed and manufactured in such a manner that it is safe in all respects for use on public roads and highways and does not create any abnormal hazards by reason of its method of construction and/or production;

(b) require any motor vehicle to undergo any form of road test that may in the opinion of the Motor Council be necessary to establish that the said vehicle complies with the conditions of subsection (4)(a) of this section;

(c) its appointed inspectors to be given access to all factories, workshops, drawing offices of any motor vehicle manufacturer and access to all plans drawings specification stores containing spare parts or any other documents or places which in the opinion of the Motor Safety Council may be necessary to establish that all motor vehicles manufactured in Great Britain are manufactured to standards of maximum safety and quality.

(5) The Motor Safety Council shall be empowered with the consent of the Minister to—

(a) require any manufacturer of any motor vehicle to cease manufacturing that vehicle if it does not in the opinion of the Motor Safety Council comply with the standards of safety and quality required by the Motor Safety Council;

(b) require any manufacturer to re-possess any motor vehicle and to compensate the purchaser in full if such a vehicle does not in the opinion of the Motor Safety Council comply with the standards of safety and quality required by the Motor Safety Council;

(c) require any manufacturer of any motor vehicle to install in the said motor vehicle any approved safety device which in the opinion of the Motor Safety Council improves the standard or safety or quality of said vehicle.

(6) All motor vehicles manufactured in Great Britain as defined in subsection 3(a) of this section shall be sold with a safety certificate in a form to be prescribed by the Road Safety Council and all such vehicles shall have a metal plate attached to the vehicle stating that such a certificate has been issued.
(7) Any manufacturer failing to comply with the conditions of this section shall be subject on summary conviction to a fine not exceedinr, £20,000 or upon conviction on indictment to a term of imprisonment not exceeding five years.
(8) For the purposes of this section the Minister shall with the consent of the Treasury make available the sum of £1 million for the establishment of the Motor Safety Council and such annual payment to the Motor Safety Council as he may determine to be necessary for the proper discharge of their responsibilities as defined in this section."
The noble Lord said: This Amendment was tabled by the spokesman of my Party in another place, but I understand that it was not reached. It deals with the matter of safety in the manufacture and design of motor vehicles. I had thought at one time that this Amendment might be reached when we were dealing with the Bill last week. As it has turned out I am glad it was not reached then, because I had an experience on Thursday last which enables me to commend this clause to your Lordships with perhaps more fervour and enthusiasm than I might have done last week.
I was travelling in the outer lane of the M.4 at a speed not far short of the limit of 70 m.p.h. when I had the experience, which I hope has not befallen many of your Lordships, of having my windscreen shatter in front of my eyes. It is literally and in both senses a shattering experience. What happened in my case was that without any warning whatever or any knowledge of what caused it, the windscreen suddenly disintegrated although it did not collapse. The result of this happening is that in an instant you are confronted with an entirely opaque and impenetrable windscreen and can see nothing. I survived on this occasion on two accounts: first, because there was a high wind blowing and a small quantity of the crystals into which the windscreen disintegrated fell in, with the result that I had a peephole through which I could see. The second reason is that when you have belonged to my Party as long as I have you develop an acute sense of self-preservation. Anyway, I survived.
I took my car for another windscreen to be put in, and I was advised by the people who are expert in these matters that I could have put back either a windscreen similar to the one which had been destroyed, or I could pay a lot more money for a windscreen which would be less liable to that sort of accident. I was told that if I decided to have a windscreen of the original type put in no guarantee could be given to me at all. That enables me to commend this clause

71
to your Lordships with some personal feeling.
The purpose of the clause is quite clearly set out in subsection (1), which states:
"The Minister shall establish a Motor Vehicle Safety of Manufacture Council … to regulate and control the quality and safety of all road vehicles manufactured (or produced from imported components) within Great Britain."
I need not trouble your Lordships with the rest of the clause in any detail because it merely sets out the composition of the Safety Council, its function and the powers which are to be given to it.
Of course, since the earliest Road Traffic Acts there has been a great mass of Statutes and regulations dealing with the maintenance of safety of vehicles on the roads. There are the very comprehensive Construction and Use Regulations under the Road Traffic Act dealing with this matter of maintaining standards of safety of vehicles on the roads, and in more recent years we have created a procedure for the inspection of vehicles and for their testing, and also for the prohibition of vehicles on the roads if they do not fulfill certain safety standards. But all those regulations are directed to the maintenance of the safety standards of a vehicle once it has been put on the road. It is a curious gap, it seems to me—I think I am right in saying that there is this gap—that there are no corresponding regulations or enactments dealing with the establishment of minimum standards of safety in the original design and manufacture of road vehicles.
The whole object of this clause is to set up an independent body which will lay down certain minimum standards in the manufacture and design of motor vehicles to be observed by all manufacturers of motor vehicles in this country.
The Clause goes on to require that motor manufacturers shall comply with those standards. I suggest that this very simply proposal has three advantages. The first is that an independent body will establish clear minimal standards which every manufacturer will be required to observe. Your Lordships may know that this question of what are the necessary safety factors in the manufacture of a vehicle has been the subject
72
of great technological controversy, particularly in the United States of America. I suggest it is most important that we should establish clear standards so that every manufacturers knows what is required of him.
The second advantage from the motor manufacturer's point of view is that if everybody engaged in the manufacture of cars is required to comply with certain minimum standards it means that the less scrupulous manufacturer who at the present moment may not be paying so much attention to the safety of his products will no longer be able to steal a march on the more scrupulous manufacturer. The third advantage, I suggest, is that from the point of view of the consumer, the purchaser of the vehicle, he has really no standards by which to judge between one vehicle or another or to know whether one will be safer in operation than another. There is no possibility of making the test for himself. If he can be assured that every vehicle which goes on to the road from a British manufacturer complies with certain minimal basic safety standards, then the choice he has to make will be made very much easier.
I do not pretend to be an expert upon this matter: indeed I am not. It may well be that the Government will be able to tell me that there are provisions, whether by way of voluntary agreement or not, which cope with the situation. I hope the Government will be able to satisfy your Lordships that this is the case, but if that is the argument may we be told what the present provisions are which ensure that certain minimum safety standards are observed by all manufacturers in the manufacture of vehicles?
The second argument which I understand may be addressed to your Lordships is this: that it is desirable in these matters to try to reach international understanding on an agreed international standard. That may well be so, and that would be a cogent and powerful argument for not accepting this Amendment at this stage. But if that is the argument which is to be addressed to us, I would ask the Government to tell us how far these present negotiations have progressed towards the achievement of an international standard, and when we may expect to be in a position to put legislation on the Statute Book for this country which will meet the

73
matters to which I have been referring. I beg to move.
LORD BALFOUR OF INCHRYE: I cannot resist detaining your Lordships for a few minutes on this, because while sympathising with Lord Foot's experience with his windscreen, if one reviews these two pages they seem to me, to use Mr. Quintin Hogg's words, "the biggest load of codswallop" that has even been put to your Lordships. What is to happen? Is this great industry to be put in a bureaucratic straitjacket? Not only public service vehicles, but all our cars are apparently to be subjected to this very curious process before they are delivered to us.
Incidentally, £1 million of your Lordships' money, and of my own, is to be spent on financing inspectors in every factory, who are not only to see that the processes of manufacture are kept up to but are apparently to vet every future design. One can well imagine how popular it would be with manufacturers who are bringing out new models on the secret list, in a highly competitive world, to have to submit their designs for the approval of the Minister. I think that if anything like this had been done in the early days of the development of aircraft, when the success of the aircraft industry was based on what was known as "a private venture", we should not have had any aircraft at the beginning of World War II. Really, the idea that we should have to submit every design of the future for the approval of the Safety Council, and that inspectors should lurk about in every factory, seems to me the height of absurdity. If this is an example of Liberal policy, I can, with respect, well understand their dismal failures at the polls.
LORD SOMERS: I sincerely hope the Government will not accept this Amendment, and I should like to explain why. I am as anxious as anybody in this Committee to see a higher standard of road safety and a reduction of road casualties, but I should like to quote the Director of Tests of the Institute of Advanced Motorists, who once said, "The safety of any car on the road is as great as that of the driver behind the wheel: no more, no less". That is very true. Regulations such as these have been introduced in the United States, but I have not heard
74
so far that, as a result, there has been any startling reduction in road casualties in that country. I agree with my noble friend Lord Balfour that it is a great pity to put the design of cats under bureaucratic control. Incidentally, the noble Lord, Lord Foot, mentioned cars manufactured in Britain, but what about all the cars we import from other countries? Are they to be subjected to the same regulations? Apparently not, so far as I can see, according to the Amendment. It is manifestly absurd, and I sincerely hope the Government will reject it.
LORD WAKEFIELD OF KENDAL: For some 25 years I was chairman of the company which made, arid still makes, London's buses. I was also a director of the A.C.V. Group which recently amalgamated with the Leyland Group to form the largest heavy vehicle organisation in the world. I am no longer connected with that industry, but it is quite clear that the noble Lord who moved this Amendment just has no idea of the immense care and trouble which is taken by the motor manufacturing industry to ensure the safety of vehicles.
When a new design is made and the prototype is put on the road, first of all the various component parts are tested very thoroughly indeed over a long period of time, probably in the works of the manufacturer making the component part, and then the vehicle as a whole goes through a very trying and thorough testing time at the industry's research establishment. Every conceivable effort is made to ensure that vehicles made in this country are as safe as it is humanly possible 4o make them. Of course, improvements can and will be made, and research and effort is continually going forward to that end.
I must say that I just cannot see what possible help this provision is going to be to this great industry in our country, which not only makes such a wonderful contribution to the happiness and enjoyment and usefulness of our citizens, but helps our export trade. I cannot set that this further piece of legislation, costing taxpayers money, can add one iota of assistance, help or information in making vehicles any safer than they now are.
VISCOUNT BRENTFORD: I wonder if I might add a word to this argument.

75
I think there are two things that really stand out. The first is the exceedingly deep sense of responsibility which is felt by the motor manufacturers themselves. They really do go out of their way to try to ensure that the vehicles which they produce, if properly used, are as reasonably safe as they can be. The second thing is that, from our experience in the motoring organisation of which I am Chairman, we have found that this matter of providing and putting safety into motor cars is a continuous process. We have given considerable support, both financial and by practical means, to the research body attached to the Birmingham Accident Hospital, which has arrived at quite a considerable number of conclusions through an examination of the many, many accidents, as regards both the personnel who come to the hospital and the vehicles involved. As a result, they have on a number of occasions been able to advise the motor manufacturing industry as to improvements which can be built into motor cars when they are being manufactured. In almost every case where it has been practical to do so, that advice has been accepted by the motor manufacturers and an increased degree of safety is produced in their cars.
I mention that to illustrate that it is most improbable that a committee of twenty people composed in the manner proposed in this Amendment would be able to be anything except an irritant to the motor manufacturing industry. I cannot believe that they could constructively assist the motor manufacturing industry in the production of safety at all, even if they ever get going. I was really intrigued by subsection (2)(d) of this Amendment. It deals with the composition of the Motor Safety Council. Paragraph (a) says that five members are to be appointed by the Minister. That is fair enough, and the Minister can go round, and, if he can, find five people with some degree of qualification or other who are prepared to sit on this Council. The President of the Board of Trade does the same. Exactly what he is seeking by way of qualifications in the members whom he is going to appoint I do not know.
Then five members are to be appointed by the "motor manufacturing trade". I am not certain what that trade is, or how on earth they are going to get together
76
in order to select those five members whom they are to appoint. Finally, five members are to be appointed by "recognised consumer and motoring organisations". First of all, who is going to decide what consumer or motoring organisation is "recognised"; and secondly how on earth are those recognised organisations going to get together in order to select their five representatives? It really seems to me to be such a preposterous proposition that I trust your Lordships will not accept it.
6.14 p.m.
LORD CARRON: I do not think there is anyone here who would do other than agree with the noble Lord, Lord Foot, in his anxiety to establish greater safety on the roads; in fact, to eliminate dangers and hazards altogether. If I thought the Amendment would serve that purpose I would give it whole-hearted support. Having some little knowledge of the industry of car manufacture and design, quite frankly I must agree with the noble Lords who have said they could not see the value or the impact upon increasing road safety which would follow a proposition of this kind.
I would sympathise with the noble Lord, Lord Foot, on the point about the shattered windscreen, because, having had this experience myself, I know how frightening and dangerous in certain circumstances it can be. At the present time no method has been found of obviating this situation, although I can say that every effort is being made in order to try to ensure the technological processes which would prevent it. The windscreen is only one of the hundreds of components in motor cars, manufactured by component manufacturers as well as motor manufacturers, and in each case, because of some flaw which cannot be detected, they could have failure on the roads. Nevertheless, I want to say this. Not only the motor manufacturers themselves are concerned. I do not want to be unkind to them, but self-interest alone demands that they should manufacture as safely as possible because otherwise their cars will not be saleable. The fact that a particular motor car is dangerous is easily spread abroad and would act adversely to the interests of the manufacturer himself.
We also have certain research associations who are spending a lot of time and

77
money, subscribed to by the manufacturers, trade unions and the Government, in order that all possible steps can be taken to ensure greater safety. I am sure noble Lords who know these research associations will join me in paying tribute to their work, and to the fact that manufacturers take very seriously the recommendations and reports from these bodies. Finally, I would refer to the point made by the noble Lord who spoke previously about the organisations that it is suggested would be appointed. May I suggest that in the manufacture of motor vehicles and in connection with the safety of the vehicles, even after the design is approved, after the manufacturers agree to all possible steps, the trade unions engaged on the manufacture can play some part in turning them out safely. I notice with some regret that the noble Lord did not see fit to include representatives of trade unions on a body of this kind.
LORD WINTERBOTTOM: Various arguments have been expressed against this Amendment from various parts of the Committee. The main objection is that the proposed new clause cuts right across existing Government policy in this field which is trying to achieve the same objective. The noble Lord may or may not have studied the Road Safety Act 1967. If he has not, I should like to point out that the proposals made in this draft clause are a straight alternative to the system of type approval for goods vehicles that have been brought in under that particular Act.
The position is that under the system of type approval for goods vehicles the responsibility for laying down vehicle standards and enforcing them will remain with the Minister. Before production is started on any type of goods vehicle manufacturers will submit specifications to Ministry engineers. A prototype will then be inspected again by Ministry engineers to ensure that it complies with the regulations. When an approval certificate is issued manufacturers will also be told what variations may be made to the "type approved vehicle" without further inspection. Quality control will be exercised by subsequent inspections of vehicles taken from the production line. So the sort of objective intended by the new clause is, so far as goods vehicles are
78
concerned, covered by recent Government legislation.
Then we turn to public service vehicles. Powers for the Minister to type approve these vehicles already exist in the Road Traffic Act 1960, but are not used at present because public service vehicles are subject instead to individual inspection before being given a certificate of fitness—an even tighter regulation. This, of course, leaves only private cars, not really the subject of this Bill. Nevertheless, the Government are considering whether some form of approval along the lines of the type-testing of goods vehicles should be instituted, but they have not yet made up their minds. Such points as the meticulous care taken by munufacturers in testing vehicles and the danger to a company of getting a reputation of bad design, are factors which make the private motor car a surprisingly safe vehicle—as one noble Lord pointed out, safer than the driver in it.
This reason, coupled with the fact that the idea is really quite bureaucratic, coming from a Party which I believe is somewhat anti-bureaucratic in its philosophy and with the fact that it cuts across an already developing line of Government policy, makes me suggest to your Lordships that this clause should not be accepted.
LORD FOOT: Some sixth sense tells me that the Committee are not entirely with me upon this proposition, and I think I shall pursue what was my original intention, to withdraw the Amendment. But before I do so, I should like to thank the noble Lord for having given this matter of road safety serious consideration. I am glad to hear what he says about the steps that are already being taken with regard to goods vehicles and public service vehicles, and to know that the Government are actively considering similar precautions in regard to private cars. I am greatly obliged to the noble Lord for his reply, and beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 38 [Composition of Railways Board and removal of requirement for regional boards]:
6.22 p.m.
LORD WOLVERTON LORD WOLVERTON moved Amendment No. 114:
Page 58, line 24, leave out subsection (4).
The noble Lord said: We have now reached the railway side of this Transport Bill. My object in moving this Amendment is this. On Second Reading I developed at quite considerable length an argument as to why it was unnecessary to take powers in this Bill to do away with the regional railway boards, and I had no answer at all. I asked Her Majesty's Government if they would tell the House why they proposed to take powers to do away with these, in my opinion, useful regional railway boards, and, as I said, I had no answer. Therefore, I put down this Amendment to delete this subsection so that we can have a proper debate on this matter, which I think is one of vital importance to this country. It is vitally important that we should have not only good management at the centre, in London, but that as far as possible we de-centralise railways into proper regional boards.
In the Act of 1962, as I reminded your Lordships, when the Conservative Government decided to do away with the Transport Commission and the Railway Executive and to set up in their place the Railways Board and these regional railways boards, we thought we were doing a good job to try to give some measure of decentralisation in a nationalized industry. In view of the important developments that have taken place recently in nationalism in Wales and in Scotland, and in other parts of the country—for instance, the north-east and the north-west want to run more of their own affairs—I think that before passing this clause the Committee should pay particular attention to whether we should do away with this regional organisation. It may not be perfect. I have heard of there being rows between the regional railway boards and the headquarters Board in London. But I think it has helped enormously to give some quicker answers to the points that have been raised, especially in Scotland and the north-east, which I think is run from York, rather than having everything channelled through London which is going to take much longer.
I have tried to do my homework and I have read Railway Policy (Command 3439). Certain clauses come down in favour of recommending the discontinuation of these regional railway boards, and
80
that in their place there should be a manager or a general manager, but no regional board. The creation of a general manager with limited day-to-day powers, is not a situation which is going to work at all well. All big organisations and companies, of which I can think of a good number, have in recent years formed subsidiary companies for their main holding company, and have created operating companies in the eastern area, the western area, in Scotland and so on. So far as possible, they try to de-centralise their managements, and to see whether in those areas their organisation is paying or not.
Therefore, I am keen to try to keep some regional organisation. I hope that We shall get some explanation from Her Majesty's Government as to why they are going to take these powers. Presumably, if they take these powers they are going to use them. For these reasons, I beg to move the Amendment standing in my name, and would like to hear the Government's explanation.
THE DUKE OF ATHOLL: I should like to make one or two points in support of my noble friend Lord Wolverton. For the purposes of this argument I should like your Lordships to assume that British Railways are running normally at the moment. About four years ago the sleeping car service to Oban was removed, and British Railways have now made it impossible, even under the best of conditions, for anyone to arrive at Oban by railway before round about 12 noon. When this happened there were of course a number of complaints in the district. These were addressed to the Scottish Railway Board in Glasgow. A nice letter came back from Glasgow explaining why they had done this, and that in some way there were advantages in it. I find this entirely unconvincing but, still, we will leave that aside. But at least the people who live in and near Oban, and in Argyll, knew that they were being replied to from a Scottish person who had Scottish interests at heart.
At the moment I consider that this is most important, and I feel that it would be a great pity to do away with the Scottish Railways Board. I have no doubt that the same argument would apply to the appropriate Railways Board in Wales, the name of which I do not know. Further, I think that, on the whole, the Scottish Railways Board has done a good

81
public relations job for British Rail in Scotland. We in the North fully realise that the railways are unlikely to be economic in the Highlands, and therefore we cannot expect such a good service as is provided on the inter-city lines in England and in the central belt of Scotland. But the Scottish Railways Board by its publicity seems to me to have made the best of a rather bad job. The trains are considerably faster than they were five years ago, and I think it is fair to say that they are considerably more punctual. I know that the noble Lord, Lord Hughes, who I imagine will reply, will say that this had nothing to do with the Scottish Board at all. This may well be true, but in Scotland they think that it has something to do with it, because they have a Scottish Board fighting for their interests against the great leviathan that lives in London.
There really is this feeling that if the Scottish Railways Board is done away with we shall he completely forgotten and neglected in Scotland; that we shall be given the oldest rolling stock that British Rail possesses—and let me assure you that that is very ancient in case some of your Lordships have not been in it recently—and that we shall be given diesel engines rejected by every other region as being not powerful enough for their other commuters travelling between London and Newcastle. So I hope the Scottish Board at any rate will be allowed to stay in existence.
When this clause is brought into effect by order of the Minister, I would ask the noble Lord whether it would be possible to bring into effect only part of subsection (4), that part which does away with the Railways Boards in England but keeps those in Wales and in Scotland. I understand that in the interests of efficiency there is probably a great deal to be said for getting rid of the Boards in England, but I think that in the interests, not of Scottish Nationalism but Scottish feeling, it would be desirable to keep at any rate the Scottish Railways Board.
6.32 p.m.
LORD ROBERTSON OF OAKRIDGE: I should like to remind your Lordships of the history of this matter. The railways were originally grouped into four groups and they corresponded roughly to a regional organisation, although there was no Scottish group. Then the rail-
82
ways were nationalised, and the organisation was extremely centralised—there was not even a general manager in charge of each region—and instructions were sent from headquarters in London right down the line by engineer to engineer, by signalman to signalman. It was a very centralised organisation which proved to be quite catastrophic.
Then a new Act was passed in, r. think it was, 1952, in which there was mention of regional boards, but a certain amount of discretion was given to the new Board of the Commission as to what they should do about it. In fact, we set up regional boards, and they were staffed by what one might call "part-time" and "outside" members, by manufactures, by people who were interested in motoring organisations, in travel agency businesses, and so forth. I thought, at all events, that they did a certain amount of good, particularly in the way in which they represented the railways to the customer to a quite large extent. But then as the years passed by they became rather unpopular and a new Act was passed, I think it was 1961, in which it was laid down that the general manager of the region should be on the Board. In fact, it gradually came about that the general manager was made the chairman and the part-time members were thinned out and to-day they hardly exist.
I believe it is most important that this matter should be settled. The most important thing, if I may say sc with respect, is that the politicians should come out of this argument, because it has been bandied backwards and forwards between the Parties, and made, as it were, a Party political issue, and it should not be that. I think that the Bill, as drafted, is probably the best arrangement, in that, as I see it, the regional boards are to he exonerated from a share of joint responsibility in the success of the whole system. That does not seem to me to be unreasonable; that wording, I think, is about right.
What we have to achieve in the railways organisation is a central bod! that will keep its hand firmly on finances, design, equipment, research, development, and various other things, and that the operation of the railways should be decentralised down to the regions who should have a clear boss to whom people can go when they are disgruntled and to

83
whom the noble Duke can go if he does not get the sleeper he feels he should have had. That is very important, but it is not necessary, for that purpose, to have a regional board partly responsible for the finances of the whole system.
LORD POPPLEWELL: I echo very much what the noble Lord, Lord Robertson of Oakridge, has had to say about these Regional Boards. There is very often a misconception as to the powers and duties which these Regional Boards really have. As the noble Lord, Lord Robertson of Oakridge, rightly points out, there has been a change from the original set-up of the Boards. I felt very sorry for many members who were appointed to these Regional Boards. Many of them had a very great interest in railway matters. Many of them served in the past as railway directors; many of them by the nature of their particular business were extremely interested, and they thought that because they were going to be appointed to the Regional Boards they would be able to play a big part in the development of a given region in which they were interested.
As was rightly pointed out by the noble Lord, Lord Robertson of Oakridge, they found that they could not do this, and in the main they were very much concerned with minor matters affecting the social development of the railways and nothing at all to do with the running of railways. In fact, the managers of the various regions, acting down from the centralised structure, were the people who were running the railways. It became very time-wasting to them when they had to prepare schemes for what they wanted in their respective regions, when, from a courtesy point of view, because that is all it turned out to be, they had to submit them to the Board, and the Board in effect could do little else but dot the i's and cross the t's. It was very rare indeed that they objected to anything, because it was an administrative matter and they knew nothing at all that the general manager put up to them. But this was extremely time-wasting from the point of view of a general manager and his top officials so far as running the railways was concerned.
Then the change took place and we now have the Regional Boards operating
84
more as the regional centre of the operation and administrative structure. I think it goes without saying that we must have this type of structure in operation. Subsection (4) leaves, as it were, the description of the function of the Regional Boards more or less on the lines of the experience of operational management structure, and I think that is the right thing. It is as well to do away completely with the old idea of the Regional Boards getting people to come in on a part-time basis, because they were interested in railway matters and thought they were going to do a reasonably good job of work, but found in the main that their work was a complete waste of time. I think this is a good idea, and I echo what the noble Lord, Lord Robertson of Oakridge, has had to say about this. This matter has been knocked about for quite a long time, and it is as well to get it entirely outside the political sphere as regards the structure of the Railways Board's organisation.
LORD WINDLESHAM: From these Benches we should like to pay a tribute to the useful and diligent work which has been done over the years by the part-time and full-time members of the Regional Boards. The five Regional Boards are to go, but the regional managements remain. It was reported only a couple of weeks ago that the British Railways Board have begun their review of the organisation of the management structure of British Railways. They have brought in the McKinsey Company of management consultants to advise. It seems that the concept will be to have non-functional members of the main board, and then very powerful general managers in the regions who will have the responsibility for seeing that regional interests are properly considered.
I should like to add one final thought before the Minister replies. There is considerable substance in what the noble Duke has said, and none will be more susceptible to it than the noble Lord, Lord Hughes. I wonder if, without departing from the general trend of policy, which seems to me to be the right one for the Railways Board, there might be a case for looking at whether this new main Board, which will be quite small, might have one member with a special responsibility for Scotland and one member with a special responsibility for

85
Wales. They would be members of the Board in their own right. This might go some way to meet the points made by the noble Duke and others.
LORD BURTON: Earlier this afternoon we had a good deal of support for the consumer and the customer. On this Amendment we have heard rather more about the management. Although this may well be aimed at the improvement of the management, I feel that what my noble friend the Duke of Atholl has said about how Scotland will feel is correct. Far be it from me to advise the Government on political strategy, but this is the sort of legislation which undoubtedly is encouraging Scottish nationalism. It would be a pity if something could not be done to keep some sort of body to look after the interests of Scotland, since undoubtedly they feel that British Railways is a colossus and that if one does away with their regional management it will become more unapproachable than ever.
LORD HUGHES: When the noble Lord, Lord Wolverton, spoke to his Amendment he pointed out, quite properly, that on Second Reading he had made a useful contribution to the debate on this point—he did not in fact say that in his own speech, but these are my comments on what he said. He was equally correct when he said that in my reply to the debate I made no reference to the point to which he had particularly directed your Lordships' attention. In my own defence let me say that it was not because of any lack of sympathy, as noble Lords opposite have surmised, that I did not refer to it, but that in a wide-ranging debate there must be some casualties and his point happened to be one of those which did not get a reply. However, I indicated on that occasion that some of the items to which he drew attention were ones which could more usefully be explored in succeeding stages of the debate on this Bill. The Amendment which the noble Lord, Lord Wolverton, has put forward to-day has amply justified itself in the discussion which we have had.
Sometimes when I know that the noble Duke is particularly interested in a subject and is going to speak on the matter, I tell him in advance what I am going to say. He therefore comes into the House able to make a fairly accurate
86
prediction of the Government reply, as he has sometimes done. On this occasion I did not know he was ping to speak so I did not tell him whet I was going to say. On this occasion his prediction of the Government reply is totally wrong. I think he will be happy about it because I do not think he will find my reply unsatisfactory. l think that it will very much meet the point made by the noble Lord, Lord Roberts an. who said that it was time that the politicians took a back seat in this matter.
My right honourable friend the Minister of Transport has discussed this particular Amendment with the Chairman of British Railways Board, Sir Henry Johnson. Sir Henry has told the Minister that he attaches considerable importance to the recommendation made by the Joint Steering Group which Clause 38(4) is designed to meet, as he is anxious to have as much flexibility as possible when the Board come to propose a new scheme of organisation under Ch use 45. The Board are at present employing management consultants to assist them in reviewing the top structure of the Board, and Sir Henry would not wish to be tied to the continuation of statutory regional boards. This does not mean, however, that there will be any immediate change.
Sir Henry is convinced that, While the regions remain in more or less their present shape, it is of very real ad vantage to the Board to appoint a few top commercial or industrial people to assist them in the running of the region. For the time being at least Sir Henry would certainly intend to continue with the Regional Boards on a non-statutory basis; but, as the Joint Steering Group made clear in their report, there is obviously going to be need for increased centralisation in the planning of railway operations. Sir Henry would not wish to be tied to the indefinite continuation of the regions as they now stand. Changing circumstances may well make this structure less appropriate in the future. He has therefore told the Minister that in his view it is important, looking to the future, to have this flexibility and that the statutory requirements to appoint regional railway boards should be repealed.
Having regard to this desire for flexibility, I have no doubt that Sir Henry and my right honourable friend would be

87
interested in the suggestion made by the noble Lord, Lord Windlesham, about the membership of the board. I certainly undertake to draw it to my right honourable friend's attention. I hope that the noble Lord will feel that his Amendment has served a very useful purpose and that he will now find it possible to withdraw it.
LORD HAWKE: I have listened with great interest to the arguments put forward, and to the Minister's reply, and I imagine that my noble friend probably was quite pleased with the reply. But whether one has local boards or an executive committee—one must have one of the two—it is most important to have some degree of financial devolution. The noble Lord, Lord Robertson, in his intervention gave the impression that finance must be firmly in the grip of the centre. Of course they must have a very good grip upon it; but what makes for complete frustration over the whole limbs of a great organisation is to have the grip at the centre so fast on finance that they cannot do anything without putting up schemes to the centre, which sometimes take a long time to get through. I feel certain that the organisation which a new general manager is likely to create will take into account matters of that nature. He may well realise that it would be valuable to have somebody with outside experience to assist and advise the regional general managers.
6.49 p.m.
LORD FERRIER: Before the noble Lord decides what to do about the Amendment, I should like to contribute my thoughts. If I had been a Scottish Nationalist—which I am not—I should not have been satisfied by the reply given by the noble Lord, Lord Hughes. Not being a Scottish Nationalist I am prepared to take it. and I am satisfied that the matter will be "chewed over". But I feel that it would he wrong for this debate to be studied without its being fully recognised that there is a feeling—not only in Scotland—among people like myself who have to deal with the railways fairly constantly, and who are in the neighbourhood of the Carlisle—Edinburgh line the fate of which is in the balance, that they would like to know that in the future there will be some body
88
in Scotland with real power, a body to which the users can refer and which can be respected by them as being capable of dealing with the main Board so far away in London.
LORD BOOTHBY: I had not intended to intervene, and do so for only two minutes to support very strongly the remarks just made by my noble friend Lord Ferrier. I feel that the case of Scotland is of particular importance. I agree with my noble friend about Scottish Nationalism. I am not a Scottish Nationalist myself, although I am gradually in the process of becoming one—
SEVERAL NOBLE LORDS: Oh!
LORD BOOTHBY: —but only on a very limited scale. I think there should be a board or body of some kind in Scotland, with real power to exercise a very substantial measure of control over the administration and running of Scottish railways as such. My noble friend Lord Ferrier has just raised the question of the Carlisle-Edinburgh railroad, which I believe to be of vital importance for the whole of the Border country. It seems to me intolerable that the future of this line should be decided by a lot of Englishmen sitting in London. It has nothing to do with them, and they should delegate this matter to a responsible Scottish organisation with responsible Scottish power. Why my noble friend Lord Hughes does not agree with this I cannot imagine, because I know of no better Scotsman in the world than he is
LORD KILMANY: Mention of the Edinburgh—Galashiels—Carlisle railway line causes me to rise to my feet for just a minute, and I cannot do other than agree with both my noble friend Lord Boothby and my noble friend Lord Ferrier. I am not a Scottish Nationalist, but I have been convinced that it is almost impossible to command attention from an English audience when one is trying to argue the case for preserving that particular railway line. I appreciate that the noble Lord, Lord Hughes, has the interests of Scotland very much at heart, and I suppose he is himself satisfied that the assurance which has been given is worth having. But what is the assurance? How long is "for the time being at least" going to be? Afterwards, as I heard his words, I thought there was the implicit threat that the Regional

89
Boards would be faded out. The only Regional Board I am interested in is the Scottish one; and the noble Duke argued the case in his opening speech.
With the greatest respect, I am not at all convinced by the arguments of the noble Lord, Lord Robertson of Oak-ridge, with all his experience, because I cast my mind back to a day more than ten years ago when I was Chairman of the Scottish Members in another place and we dealt with particular Scottish points. There was a Chairman of a Scottish Board in those days—I think he was Sir Ian Bolton. We thought fit to invite the Chairman of the Scottish Board to come and meet the Scottish Unionist Members of the other place, purely on the subject of Scottish railway transport. But what happened? The noble Lord, Lord Robertson, would not devolute his powers sufficiently to allow Sir Ian Bolton to come and meet us. He said, "No, I am not going to have regionalisation. If those Scottish Unionist M.P.s want to put their suggestions forward, it is no good doing it on a regional basis. It must all go through myself." It turned out, as your Lordships can readily imagine, that our meeting was a great success. The noble Lord, Lord Robertson, was entirely charming and had complete command of the subject, and I, for my part, could not be other than satisfied. But I urge the noble Lord, Lord Hughes, to look again at the assurance which he is giving us. Is it really cast iron?
LORD ROBERTSON OF OAKRIDGE: Perhaps it is not for nothing that I am called "Robertson".
LORD POPPLEWELL: Is it not correct that under this new structure there is to be a separate and distinct Scottish region? Under the old private-enterprise railways it was found that the most efficient method was for the railways to run the length and breadth of both countries. The old London and North-Eastern used to include part of the Scottish region, as also did the L.M.S., in a joint structure. If there is to be a separate Scottish region, that is something which even private enterprise did not think was necessary, so much of what we are talking about is really out of date.
LORD MITCHISON: I wonder whether I may ask my noble friend two questions. I am well aware that this is
90
the point where the Sassenach gets his head bitten off, but under what he is now suggesting, what change will there be, if any, in the functions proposed for the Scottish Group? They seem to me to have very extensive powers—but perhaps I have misread the Bill. Secondly, what about the proviso in this subsection which, in effect, allows the schemes under Clause 7, the clause which provides specially for the relations between the Freight Corporation and, among other bodies, the Scottish Group, and for the transfer of property, rights and liabilities and so on between those two bodies?
With great respect, I should have thought there were provisions in the Bill which distinctly recognised the peculiar character of the Scottish transport problem. I speak with real diffidence, but I look at Scotland as 100 miles from the nearest railway station. That is the kind of thing that happens. I realise that one must be very careful, in a country which, very rightly, feels strongly differences of this kind, not to get them just swept into British legislation or British administration without due consideration of their particular means and functions.
So my two questions relate, first of all, to the Scottish Group and its powers; and, secondly, to the reservation with respect to a subsequent clause of the Bill which allows schemes to be made under Clause 7 as between the Freight Corporation and the Scottish Group, as Nell as other bodies. If I am asking questions that are too stupid for words, then I hope that my noble friend will not answer them at all. If they are not too stupid for words but are a trifle complicated, I hope that he will be able to let me have an answer later.
LORD BURTON: The noble Lord, Lord Mitchison, appears to imply that the Scottish Group have something to do with railways. They seem to have a great deal of other powers, including the right to carry on as travel agent; but have they anything to do with railways? I thought not.
LORD MITCHISON: If they have not, I shall be very glad to be told. I am usually a mass of humility, but when we find transfers of property and so on between the Scottish Group and the Freight Corporation, I have the idea that some freight is carried by rail and I

91
thought they might have something to do with it. Then, again, Clause 7 seems to be fairly wide. That is what I am asking about. And I really am asking with diffidence.
LORD WOLVERTON: I am very much indebted to the Minister for his reply, and to all those noble Lords who have spoken. I should have thought it was quite clear that if powers are taken under subsection (4) to wind up the part-time Regional Boards, which are responsible for the management, there will be no part-time Regional Boards running railways, even in Scotland, unless the Chairman of the Railways Board in London decides not to use the powers. We have been told to-night that temporarily he is possibly not going to use them, but that he wants them in the Bill because ultimately, when he has ended his researches, he will probably take them. Then there will be left only a general manager. I am sure that he will be extremely good and do what he can for Scotland, Wales, the North East and so on. But that will not be the same as having the part-time Regional Boards. I do not wish to press the matter further to-night, but I hope the Minister will bear this very much in mind. We should have some form of regional organisation. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 38 agreed to.
LORD BOWLES: This might be a convenient time to move that the House do now resume.
House resumed.

SALE OF VENISON (SCOTLAND) (No. 2) BILL
7.1 p.m.
Read 3a, and passed.

GAS AND ELECTRICITY BILL
Read 3a, and passed.
FAMILY ALLOWANCES AND NATIONAL INSURANCE (No. 2) BILL
Read 3a, and passed.

TRANSPORT BILL
7.4 p.m.
House again in Committee.
Clause 39 [Grants for unremunerative passenger services]:
THE EARL OF KINNOULL: Earlier this afternoon I had a discussion with the noble Lord, Lord Bowles, who advised me that he had not been in a position to acquaint himself with a considered reply to Amendment No. 114A and Amendment No. 116A. I do not wish either to embarrass him or to waste the time of the Committee, and therefore I shall not move the Amendments. But I should say that I was a member of a delegation on May 9, some six weeks ago, which met Mr. Carmichael, Joint Parliamentary Secretary to the Ministry of Transport, at the Ministry, and left with him all the Amendments which are now in my name on the Order Paper. We received no reply until I rang the Ministry last Friday. They were good enough to return my Amendments, which I took to the Public Bills Office so that they were put down on the Order Paper. Therefore I find it a little surprising, and a little discourteous, that no brief is apparently available to the noble Lord, Lord Bowles.
LORD BOWLES: May I ask the noble Earl to move the Amendment, and then I shall have a chance to say something. That would be more convenient.
THE EARL OF KINNOULL: I am sorry. I thought that the noble Lord said earlier that he had no reply.
LORD BOWLES: I cannot reply to what the noble Lord has just said unless he moves the Amendment.
THE EARL OF KINNOULL THE EARL OF KINNOULL moved Amendment No. 114A:
Page 59, line 8, at end insert—
("Provided that if any station, line or section of line has previously been considered under the provisions of section 56 of the Act of 1962 (or any prior enactment) following a

93
proposal by the Board for its closure or withdrawal of service, the Minister may, if he is satisfied that the station, line or section of line is still unrernunerative and that the provisions of subsection (1)(b) would appear to be relevant in the circumstances, and subject to the consent of the Treasury as specified above, direct that the provisions of this section shall apply to the station, line or section of line and undertake to make a grant in respect of such station, line or section of line.")
The noble Earl said: Very briefly, the purpose of this Amendment is to add to subsection (1) of the clause, which concerns grants made by the Ministry for unremunerative passenger services—
LORD BOWLES: May I interrupt the noble Lord? He made a fairly quiet accusation against my honourable friend the Joint Parliamentary Secretary, Mr. Carmichael. The noble Lord said that he was not going to move his Amendment. I asked him to do so just to enable me to tell him and the Committee what I have heard about the matter. Now that lie has moved it, I apologise to him, if apology is due. I made some inquiries about the matter, and I understand that there were conversations between the noble Lord and Mr. Carmichael. I understand that no Ministry officials can begin to draft notes for a reply to an Amendment unless it is on the Order Paper. I shall look into the matter for the noble Lord and let him know to-morrow, if I possibly can, the result of my inquiries.
THE EARL OF KINNOULL: I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD BOWLES LORD BOWLES moved Amendment No. 115:
Page 60, line 19, at end add ("and
(c) in the case of each undertaking for the time being in force under subsection (1) and each service in respect of which grant is for the time being payable under subsection (4) of this section, the amount falling to be paid in respect of that year in pursuance of that undertaking or by way of such grant.")
The noble Lord said: The effect of this Amendment is to require the Railways Board to include in its Annual Reports a breakdown of the total amount of grants payable under this clause in the year in question. Paragraph (b) of subsection (5) of this clause already requires the Board to show in its Annual Reports the total amount of grants. In effect, therefore, the requirement on the Board under the proposed new paragraph (c)
94
will be to break down the total figure it is required to provide under the existing paragraph (b).
This Amendment has been tabled in accordance with an undertaking given by the Minister of State in the course of discussion during Report in the House of Commons of Amendment No. 149, which sought to require the Railways Board to provide information at out the amount of grant paid in respect of each service which had been grant-aided for the first time during the year under review. The Minister of State pointed out that he had already given an undertaking in Standing Committee in the House of Commons that the amount of grant in each case would be announced at the time that grants were approved. He added that in any case it would probably be more sensible to give a breakdown of grants on a continuing basis in respect of every service and not only in respect of those grant-aided for the first time. But he undertook to consider the position further and on this undertaking that Amendment was negatived.
Although, therefore, as I have already explained, no additional information would be made public in consequence of this Amendment, there will be no difficulty about including such a breakdown in the Board's Annual Reports and this may in fact prove a convenience in some respects, in that information published item by item on different occasions will be available in one place. In these circumstances the Amendment has been tabled as a concession to the views expressed in the Commons stages of the Bill.
The drafting of this Amendment: might appear unnecessarily complicated at first sight. The effect, however, is simply to require the Railways Board to break down the information under paragraph (b) of subsection (5). The complexity is due to the need to be consistent with the concept of "undertakings" introduced in subsection (1) of the clause, and to embrace also the transitional grants in closure cases covered by subsection (4), which are not the subject of undertakings. There is also the need to make it clear that the figures to be given will be those of grant due to the Board in respect of a particular period, rather than of the actual cash which passed in that period. I beg to move.
LORD WINDLESHAM: This is the clause which concerns grants for unremunerative rail services which are kept open for social or economic reasons. We on this side of your Lordships' Committee accept the principle of grants for unremunerative lines, but we believe it is in the interests of the Railways Board and of the taxpayer that they should be very carefully scrutinised and kept down to the minimum. A sum of £55 million is envisaged for the first year, and at a later stage—on Report stage, perhaps—it would be interesting to have some information from the Government as to how this figure of £55 million for unremunerative lines has been arrived at, and also how it relates to the varying figures which are contained in the Report of the Joint Steering Group. I do not press those points now because I think that the noble Lord will want to look at them.
As the noble Lord, Lord Bowles, has said, this is a concession by the Government arising out of the Committee and Report stages in the House of Commons, and undertakings which were then given. It shows the value of the detailed discussions in another place on those clauses which were discussed before the guillotine came down. We welcome the new subsection, which will now mean that the amount of subsidy for each unremunerative service will be individually shown. We regard this as an improvement. It was one which was introduced by one of my friends in another place, and we welcome it.
On Question, Whether Clause 39, as amended, shall stand part of the Bill?
THE EARL OF KINNOULL: I wonder whether I may ask one question on Clause 39. It relates to these unremunerative lines. Before the list of lines is published, will there in fact be a public inquiry to allow passengers to request that their particular line should be put on this list? I am afraid I have not given the noble Lord notice of this question, but if he could look into it I should be very much obliged.
LORD BOWLES: I will look into the matter and write to the noble Earl.
Clause 39, as amended, agreed to.
Clause 40 [Grants pending elimination of surplus track and signalling equipment]:
LORD BOWLES: This Amendment is a concession. It implements an undertaking given by my right honourable friend the Parliamentary Secretary in another place. We accept that the Railways Board should indicate in their annual report the amount they receive in any year under this clause of the Bill as a matter of proper public interest, and the present Amendment ensures this. I beg to move.
Amendment moved—
Page 60, line 40, at end insert—
("(5) The report of the Railways Board under section 27(8) of the Act of 1962 for any year in respect of which a grant is made to the Board under this section shall include a statement of the amount of that grant.")—(Lord Bowles.)
LORD WINDLESHAM: Here again, this is a concession, and one which we welcome. We regard it as desirable that there should be as much publicity, as much information made available, as possible, and the fact that the reports of the British Railways Board will show this information in the future is, we think, an improvement. So here again we welcome this Amendment by the Government.
LORD BEAUMONT OF WHITLEY: We, too, welcome this concession. There are a number of similar concessions in the course of the Bill whereby the Government have agreed to offer more information on this kind of matter, and in order not to waste the time of your Lordships' Committee later I should like to say that we welcome this wherever it has happened. I think this and other Amendments like it provide notable improvements to the Bill.
Clause 40, as amended, agreed to.
Clause 41 [Financial provisions as to Boards and new authorities]:
7.16 p.m.
LORD WINDLESHAM LORD WINDLESHAM moved Amendment No. 117:
Page 61, line 7, leave out ("combined").
The noble Lord said: This group of Amendments falls into three sections, as we see it; Nos. 117 to 123, No. 124A on its own and No. 125A on its own. So,

97
with the permission of your Lordships' Committee, perhaps it might be convenient if I spoke to Nos. 117 to 123.
Clause 41 concerns the financial duty of the existing Boards under the 1962 Act and the new authorities which are set up under this Bill—the National Freight Corporation, the National Bus Company and the Scottish Group. In subsection (2) of Clause 41 an obligation is placed on these Boards and Authorities to ensure that their revenue accounts at least break even. In this first set of Amendments, Nos. 117 to 123, we propose that this obligation should apply to each separate business of the Boards or the new authorities and to each separate subsidiary company. The aim of our Amendments is to ensure that individual activities are not involved in undesirable cross-subsidisation of a type which has been condemned by the Government in their own White Paper, The Nationalised Industries: A Review of Economic and Financial Objectives. The White Paper pointed out the risk of this sort of cross-subsidisation. and warned against the misallocation of resources that could result. We must remember that these Boards and authorities are going to have very considerable powers to engage in a wide range of activities.
I do not think we want to anticipate now the debate on Clause 48, but there is a need to identify the leads of various activities and to make information on these available for public scrutiny. We do not believe that subsidiaries should be developed by the Board or the authorities unless they can be profitably run. Otherwise there is a risk of wasting public funds; and secondly, and perhaps more likely, there is the question of dilution of management effort. If the small number of skilled managers who are available to work in senior positions in the Boards and authorities were concerned with the supervision of subsidiaries and separate businesses, we think that that would not be the best use of their time. Amendment No. 123 is more specifically on that point. I beg to move Amendment No. 117.
LORD BEAUMONT OF WHITLEY: We, too, regard this as an extremely important clause, and I think that on this matter we are at one with noble Lords on the Conservative Benches. We take this as having a considerable bearing on
98
Clause 48, and we hope that there will be considerable concessions on this clause. The noble Lord, Lord Windlesham, has already mentioned the matter of paragraph 18 of the White Paper on the financing of nationalised industries, and its desire that there should not be cross-subsidisation and misallocation of resources. The Government may object, as indeed they did in another place, that it is a matter of great difficulty to, isolate individual businesses, and than these Amendments are too vague to implement. I do not think this is so. Any really efficient private company, no mater how big, so organises its financial affairs that it can tell whether it is making a profit or loss, not only on any particular subsidiary but on any particular s lop or business in that subsidiary. It may he that companies do not publish this in their accounts—I think that probably they should—but, even so, there is a much greater obligation on any kind of nationalised or public industry, whose shareholders are compulsory shareholders and have not chosen to take shares in it, to lead the way in making it quite clear what is paying and what is not.
There is one last point. I should like to ask the noble Lord, Lord Windlesham, a question on his Amendment No. 123. In another place, when his friends put this down, Mr. Heseltine said that he did not wish to pursue it and that it w as put down in error. He apologised to the Committee, and said it was not necessary because the provisions it seeks are already embodied in legislation. Has the noble Lord changed his mind about that or was Mr. Heseltine in error?
LORD WINDLESHAM: I do not think we should have moved that Amendment on its own. But since I have spoken to all of them generally I suggest that the general set of arguments apply to the full range of Amendments. I would not want to pursue that particular Amendment.
LORD BEAUMONT OF WHITLEY: If I may say so, the noble Lord's friend did exactly the same thing. He spoke to all of them and said he did not want to pursue this one because he thought it was already embodied in legislation.
LORD WINDLESHAM: It is possible, then, to proceed with the debate on the general principles.
LORD HUGHES: Having regard to the reception which the Liberal Amendment No. 113 received from the Conservative Benches and, for that matter from the Government Benches, the noble Lord, Lord Beaumont, shows commendable Christian virtue in turning the other cheek; although I am not quite certain that all the arguments that he advanced will commend themselves to noble Lords opposite.
As the noble Lord, Lord Windlesham, said, Amendments Nos. 117 to 123 are linked in seeking to achieve one purpose. The subsection in its present form imposes on each authority a duty to secure that, overall, their own revenues, combined with those of their subsidiaries, are not less than sufficient to meet all proper charges to revenue, taking one year with another. The Amendments would substitute for this a duty to secure that the revenue of "each separate business" of the authority and of each of its subsidiaries is not less than sufficient to meet the charges properly chargeable to revenue on each of these separate businesses, taking one year with another. Some degree of flexibility would, however, be imported by the addition of the provision in the last of the proposed Amendments in that the authority may direct that profits obtained in one business shall be used to offset losses made in another business. This, in fact, would seem to imply that the principle of cross-subsidisation should be permitted to continue in certain circumstances.
I must resist these Amendments for a variety of reasons. First, as the noble Lord, Lord Beaumont, predicted I might, I do so because the proposed duty is imprecise. It is not clear what "separate business" is intended to mean. In the case of B.R.B., for example, this could be interpreted as a requirement simply to distinguish between the railway activity as a whole, and the ancillary activities such as shipping, hotels, et cetera. Or it could be taken as implying that the Board are to distinguish rail passenger and freight services as separate businesses; or to go down to a fine degree of detail involving a separate financial duty in respect of activities such as the operation of car parks, where again there might be a distinction between parking and petrol
100
sales under the new powers provided by Clause 48. The determination is bound to be a subjective view on whether or not the Board were complying with their duty.
The second reason that I cannot recommend these Amendments to the Committee is that the proposed duty would imply an unrealistic degree of precision in accounting. There would be no practical difficulty in giving an authority a separate financial duty in respect of each subsidiary. The ability to organise in this way implies a clearly distinguishable activity or set of activities, and the ability to produce precise meaningful and separate accounts. But where an authority itself engages in a number of activities of distinguishable classes or a subsidiary does likewise there is a problem about the allocation of joint costs, which the Amendments ignore. The allocation of joint costs to identifiable activities or "businesses" is to a large extent a matter of judgment rather than fact.
It is more than a matter of quantifying the respective use made of a joint asset (though this basis is difficult enough when one considers the fluctuations which may occur); regard must be had also to the differing ability of the various uses to contribute to the total cost. No enlightened commercial undertaking would dispute this. Account is taken of considerations of this kind by Section 17 of the Companies Act 1967 under which companies conducting business of two or more classes have to give information in the Director's report, but not the accounts, on the division of turnover and an option only on the approximate extent to which each class of business contributed to the profit or loss of the company. This is, in effect, a recognition that there is nothing absolute about such determinations. If the financial duty proposed is to be meaningful it must be related to something which is precise and ascertainable.
The proposed duty would be far too detailed and inflexible. This is another reason why I do not find them acceptable. There is probably little doubt that the movers of the Amendments do intend the duty to cause the authorities to go down to a very fine degree of detail in distinguishing activities as separate

101
businesses; for example petrol sales at car parks. This is their way of trying to ensure that activities are engaged in only where they are remunerative, and that a basis is laid for fair competition. I must say that I subscribe to the objectives of fair competition and efficient operation, since there is no doubt that long-term cross-subsidisation is economically wasteful, and financially undesirable. But it is really going too far to suggest that large corporations such as these are must invariably adopt a narrow, compartmentalised approach to their business as these amendments imply. As in major commercial and industrial groups in the private sector, the broad and the long view must be taken. This should not be carried to the extent of ignoring the above criteria, but there must be some degree of flexibility.
To sum up, this series of amendments would seem to me to be an attempt to secure some further statutory assurance that the new manufacturing and trading powers will be conducted on strictly commercial lines and on a basis of "fair competition".
It would be fair to say that in Committee in the other place the Opposition said they wanted two things: first, information; they wanted to be able to see what was going on and they wanted that information to be published from time to time in a form that would make it possible for anyone concerned and, of course, Parliament, to examine all the activities of these organisations. The purpose of the Amendments then, in another place, was to ensure that the accounts when produced would be quite understandable and comprehensive. Secondly, I think the Opposition wanted to ensure that the individual activities referred to were not involved in—and I think the words used were—
"some hocus-pocus method of cross-subsidisation which is not discoverable by anyone contemplating an examination into those activities as covered by the accounts…"
The Minister was then my right honourable friend, Mrs. Castle. She gave an assurance which I most definitely repeat, that the new manufacturing powers will be operated on a commercial basis. Provision is already made in Clause 48(4) for the Minister's approval of proposals made by the undertakings for the exercise of these powers to be subject to any
102
conditions which the Minister sees fit to impose, and for a direction to be given at any time that any of the activities concerned are to be discontinued. For these reasons the Amendments are, in the view of the Government, quite unworkable.
LORD BALFOUR OF INCHRYE: The arguments of the noble Lord, Lord Hughes, against long-term cross-subsidisation would be more convincing to me if the Government were not every year doing exactly what he says that we should not do by means of this Amendment. Every year a Service Minister brings forward what is known as "Monk's Resolution" which is viremont, which means that the surpluses of one Vote can be devoted to the deficiencies of another; that is to say the surplus on the Vote for works and buildings, the building of barracks or furniture, we will say for the Royal Air Force, may be used to meet deficiencies in the Pay Vote. Really the arguments of the noble Lord, Lord Hughes, fall to the ground when the Government themselves are equally guilty.
LORD HUGHES: My Lords, I think this is very much beside the point. We are talking about the commercial activities of British Railways and the transport undertakings generally. I am not at all certain that anyone on either side of the Committee would argue that the Defence Forces were run on a commercial basis.
LORD WINDLESHAM: The noble Lord, Lord Hughes, has talked about the difficulties of achieving precision in accounting, and we accept that. But accounts should show something of the nature of the business. If at all possible, they should give an indication of the progress of the different aspects of the business. I do not want to press this Amendment—I think that we should move on—but I feel with the noble Lord, Lord Beaumont of Whitley, that this is an extremely important matter 'which deserved to be aired again. It cannot be said too often that the accounts of the Railways Board must be scrutinised by the public at all times. Having said that, I beg leave to withdrawn the Amendment.
Amendment, by leave, withdrawn.
7.33 p.m.
LORD WINDLESHAM LORD WINDLESHAM moved Amendment No. 124A:
Page 61, line 10, at end insert—
("Provided that in the exercise of the powers given to it by sections 6, 13(1) and (2) and 14(1)(d) of the Act of 1962 and sections 45, 46 and 47 of this Act a Board or a new authority shall be under a duty to ensure so far as practicable that these businesses are conducted on a commercial basis.")
The noble Lord said: This Amendment follows on the previous Amendment. Clause 41(2) places on obligation on the Boards and the new authorities to break even. We believe that that is not enough and that it would be unwise just to settle for such a low target, bearing in mind the Government's stated aim that the railways should be run as a commercial organisation. In Amendment No. 124, which has now been removed from the Marshalled List, a figure of 10 per cent. profitability was stated. We have altered that because it may be that stating a figure is too rigid. It is extremely difficult to define what capital is employed, what are the capital assets in the railways, even now, let alone after the write off. Therefore the percentage return on capital could be a fairly meaningless concept and it may be that a figure of 10 per cent. or something of that sort would be too high at first. The wording of this Amendment seeks to make the same point in a more general way.
LORD HUGHES: I think it is correct to say that this Amendment has been put down in place of another which was withdrawn and which laid down that the undertaking should make a profit of not less than 10 per cent. I think it has been redrafted, probably in the light of discussions which took place in Committee on June 25 on a comparable Amendment to Clause 11 of the Bill. The Opposition then said that it was necessary to require the ancillary activities of Passenger Transport Executives to be conducted in fair competition with similar private enterprise activities and that the Boards should therefore have a higher profit target than was represented by the basic financial duty to break even.
My noble friend Lord Stonham pointed out that it was quite unacceptable to impose any statutory duty to earn any set level of return. This would have led to great difficulties in defining what was
104
meant by profit or capital and would also have been unfair to the Boards and to the public in preventing useful services, such as left-luggage facilities, from being provided. It would also have made it impracticable for the Boards to develop new lines of business. I think the Opposition have clearly appreciated the force of these arguments and they now suggest a form of Amendment which to the Government is less objectionable and which, on the face of it, seems in principle to be a reasonable requirement to lay on the nationalised transport bodies. It is not, however, one which the Government can accept as it stands—the last three words are good, are they not, my Lords?
There are defects in the Amendment. In the first place, it is technically defective the homework has not been as well done as usual because it refers to Sections 45, 46 and 47 which would have been correct in the Bill some time ago, but it should now read Sections 48, 49 and 50. Secondly, it is defective in that it quotes a section which will be repealed by the Bill, Section 6 of the Transport Act 1962, dealing with hotel powers. I do not say this in criticism of the Opposition, because in the past I have been subjected to the same difficulty. These are merely points showing how difficult it is to single out a particular activity to which a separate financial duty would apply. The fact is that Clause 41 deals with the actual overall financial duty of each of the nationalised Boards in a most general way. The clause states that it is the duty of each Board to secure that its revenues, taken together with the revenues of the subsidiaries, "are not less than sufficient", and so on.
This general financial expression of duty of the Boards does not preclude them from earning any particular rate of return on the capital employed in their various activities or from behaving in a commercial way, in all cases where the ancilliary activities are of a kind which enable direct profits to be made, and the Government will expect the Boards to behave commercially in the sense intended by the Opposition. But the inclusion of a provision on the lines of the Amendment as a qualification of the general financial duties of the Board is unacceptable, since it would be an unnecessary refinement as

105
regards the ancilliary activities and indeed would threw doubt on the proposition that the Boards in any case are generally expected to act on a commercial basis in the conduct of their main business.
The whole point of having a financial duty is to set a minimum below which a Board must not go, hearing in mind that all its capital is normally provided on a fixed interest basis, so that the charges on the capital have to be met before it can be said to be breaking even. In the private sector, however, dividends can be passed on equity capital without a company falling down on legal obligations. Moreover, as the Committee well knows, successive Governments have set higher levels of performance for the Boards through the requirement to meet financial objectives settled in accordance with the doctrines laid down in the White Papers dealing with the economic and financial objectives and obligations of the nationalised industries.
It is true that the Railways Board and Waterways Board have made losses in the past, but the provisions of the Bill will give them a new deal and at the same time take away the Government's power to pay them deficit grants. Thus they will have a new discipline forced on them and an added incentive to behave commercially. Nevertheless, the three words to which I directed attention earlier apply. The Government recognise the strength of feeling that there should be some statutory declaration about the need for the Boards to behave commercially in the conduct of their ancilliary activities, especially when they are in direct competition with private enterprise.
I would therefore say that, having regard to the views that have again been expressed, we are prepared to consider tabling a further Amendment to the Bill to meet the point underlying the present Amendment. This might be on the lines of amending the existing declaration in Clause 48(7) that the Boards should act as though they were engaged in a commercial enterprise in carrying out activities under that clause by extending it to cover all the new powers given by Clauses 48, 49 and 50 of the Bill. I must say frankly that we want a little more time to consider exactly what the form of the Amendment should be, and I hope that when it is tabled the Opposition will find
106
that we have at least gone some way to meet the points which have been expressed in this Amendment.
LORD WINDLESHAM: When the noble Lord began to criticise the drafting with such care, I began to hope that he was going to make a concession on this point; and he has done so. I thank him for that encouraging reply, which we will study. It sounds to us a useful and worthwhile concession, and therefore I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
7.40 p.m.
LORD WINDLESHAM LORD WINDLESHAM moved Amendment No. 125A:
Page 61, line 15, at end insert—
("() Each of the authorities to whom this section applies shall ensure that its annual report includes a statement on the affairs of each separate business of the authority and of each of its subsidiaries.")
The noble Lord said: This is the last of our Amendments to Clause 41. Its aim is to place a duty on the Boards and the new authorities to include in their annual reports a statement of the state of affairs of the main subsidiaries and the separate businesses. The Government have said that it is their intention that the authorities should be run on commercial lines. This Amendment would result in what is, after all, normal business practice. It is usual to refer to the state of affairs of subsidiaries. Therefore, I hope that this provision may be included in the Bill. As with our previous Amendment, we have, I hope, learned and profited from the discussions in Committee last week. The noble Lord will have noticed that we have withdrawn the previous wording of Amendment No. 125 and inserted the wording which now appears in the Marshalled list. I beg to move.
LORD HUGHES: We do not think that this Amendment is necessary. The reports and accounts of nationalised bodies are always published together, and the Minister will make it clear to the Boards that he will require their reports to include appropriate information unless the accounts themselves do so. I want to repeat as a firm assurance that it is the intention to secure that the reports and accounts of nationalised undertakings are in line with good commercial practice and give comparable information to that

107
normally published by large undertakings in the private sector. There is no intention on the part of my right honourable friend the Minister to hide what the authorities, or their subsidiaries, are doing. It is only because we consider that the Amendment is unnecessary that we do not accept it. We accept the reason behind the Amendment, and that is why I repeat, in definite terms, this assurance as to the way in which these undertakings must operate in these matters.
LORD WINDLESHAM: We accept that assurance, and I thank the noble Lord for stating it so clearly and definitely. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 41 shall stand part of the Bill?
LORD NUGENT OF GUILDFORD: I would like to say a word on subsection (6) which, rather surprisingly, has got slipped into the Bill. It provides an extra £30 million for London Transport. The Bill, which does almost everything, does not mention London Transport anywhere else. Suddenly, on Report stage in another place, subsection (6) appeared and there has been very little explanation why it is required and why it has suddenly been pushed into the Bill. The Government's explanation was that they had just discovered that the Minister's power to lend to London Transport Board might run out before the transfer to the Greater London Council had been finally settled. But only two months previously, the Minister had asked Parliament to increase the borrowing powers of London Transport to £270 million which he said would last until the middle of 1969.
Two comments I feel should be made about this method of managing our financial affairs. The first is that it is objectionable for the general taxpayer to be made to subsidise London Transport's current trading losses. It is impossible to justify asking the citizens of Manchester and other cities in the Kingdom to pay out of their taxes extra money in order to make Londoners' bus fares cheaper. May I say in passing that by this method of introducing this extra £30 million there are limited opportunities of finding out what the money is
108
going to be used for and just how much is going to be used for current subsidy.
The second point I feel that should be made before we let the Government have this Clause is that, as an insight into the Government's financial management, it really is alarming. To them £30 million may not seem very much, but it seems a large sum to the taxpayers who have to pay. It is really astonishing that the Government should be unable to tell, to the tune of £30 million, what their financial position is. Anyway this subsection has been inserted into this vast Bill, which makes no reference at all to London Transport. When I read it last month, it reminded me of a local water undertaking's Bill at the end of the century into which the town clerk put the words:
"…and the marriage of the Town Clerk is hereby dissolved".
It is alleged that this slipped through Parliament without being spotted. Maybe the story is apocryphal.
In any event, this time the irrelevancy has been spotted. I think that the Government should be called to account for the two points I have made: how much is going on capital expenditure, which Government grants are supposed to cover, and how much on current subsidy? And what is the explanation for this extraordinary method of dealing with a very large sum of the nation's money?
LORD HUGHES: It is not a new thing for deficits of the London Transport Board to be financed in this way. I am not at all certain that when the noble Lord referred to the dissolution of the Town Clerk's marriage, he was not thinking that the Government might have attempted to slip in the dissolution of the Greater London Council! I do not think that that would have occurred to us, but if it had, we should probably not have managed to be as successful as the Town Clerk was alleged to have been.
There is nothing foolish or sinister about this. Negotiations for the transfer of an undertaking like this cannot be accomplished overnight. I have no doubt that the noble Lord is well aware that there was considerable hard bargaining and that in the passage of time losses mount up. It is as simple as that. We believe that the amount of money here

109
provided is sufficient to enable the transfer to the G.L.C. of the undertaking to take place in a satisfactory fashion. Of course, if the noble Lord wishes to suggest that he should go to his friends on the G.L.C. and suggest to them that in the interest of the taxpayer they should settle on a basis more favourable to the Government, I have no doubt that we will look sympathetically at an Amendment of that kind, provided he can assure us that the transfer will still take place.
I am sorry that without notice I am unable to give a breakdown as between capital and revenue. But I hope that the noble Lord will accept that the insertion of this figure at the time when it was inserted was merely a recognition of the changes which had taken place in the interval.
LORD NUGENT OF GUILDFORD: I must congratulate the noble Lord, Lord Hughes, on making one of his usual first-class speeches, despite the obvious difficulty he must have had for material. I do make the point that there is obviously a substantial element of subsidy here. It is really unique. We do not do this for any other city in the country. This is why, and quite rightly, the Government have been making this settlement with the G.L.C. in order to transfer London Transport to them. Then it is up to them to decide how to do it, and whether the ratepayers should pay more or less to keep the service going. But I would remind the noble Lord that in combing through the proceedings in another place I discovered that the Government promised that there would be a statement on this by the end of last month. We really ought to have had it by today, and in that event I should not have had to ask the noble Lord these questions.
Clause 41 agreed to.
Clause 42 [Additional financial provisions as to Railways Board]:
7.52 p.m.
LORD NUGENT OF GUILDFORD LORD NUGENT OF GUILDFORD moved Amendment No. 126:
Page 62, line 9, at end insert—
("() Not later than 1st January 1970 the Board shall draw up and agree with the railway trades unions a new labour productivity agreement with appropriate provision for redundancy.")
The noble Lord said: I beg to move Amendment No. 126 on the Marshalled List, in the names of my noble friends and myself. I think this Amendment is self-explanatory. It is founded on responsible thought in this connection, and we move it in all seriousness. The effect of Clause 42, among other things, is to reduce the capital debt of British Railways to £300 million. This involves, if my arithemetic is correct, writing off a sum of no less than £1,317 million. This is a huge sum of money, probably something approximating the capital expenditure which the nation has provided for modernisation over the last dozen years.
I am not opposing this writing down of the capital. Indeed, we wrote down a substantial amount of capital in 1962, and I think this is the right way to deal with the structure of the railways. I cannot say, of course, whether £300 million is the right figure; it may well be. But certainly in industry capital is worth at the end of the day (I am sure all noble Lords agree with this) what it can earn. So I am entirely in favour of setting this at a realistic figure. But do not let us comfort ourselves with the thought that we are being asked to write off 19th century assets. We are not. We have done all that. Substantially, this is post-war capital that we are writing off. So it must be seen for what it is—a very large sacrifice which the British nation must make in order to put British Railways on a viable basis and give them a fresh start.
Our Amendment requires that British Railways should match this massive contribution from the nation by putting their own house in order with an effective manpower-productivity agreement. Put in simple terms, I want the British Railways Board to do a deal with the railway unions, the N.U.R., A.S.L.E.F. and T.S.S.A.: I want them to buy the rule book. And perhaps this present time is a significant moment to say this. Let me say, in passing, that I entirely support the Government's position in the present dispute. This is something which the Board must settle. I am sure that the Government are right to keep out of it, and I am sure that the noble Lord, Lord Robertson, who is here, would endorse that sentiment. I know that the Board have been trying for some time to negotiate a new labour-productivity agreement

111
with the unions and the present work-to-rule action is of course the union's riposte to the Board's refusal to make a flat-rate increase. In my view, as I say, the Board are right to refuse a further increase without a new and more realistic productivity agreement. Past experience, unfortunately, confirms that they will never get the productivity agreement unless they insist on agreement before giving the rise.
The average railway wages grade is £21 10s. a week. So it is nearly £1 above the average of all industries and services. Therefore the hardship claim, which used to exist, is no longer there. This does without doubt bring us back to the fact that increases of wages there, as anywhere else, should be matched by increased productivity. The need in British Railways is very great. Wages amount to no less than 64 per cent. of total costs in the railways. This is an enormously high figure. Let me say that wages and salaries together amounted to £342 million, against the total revenue earned of £438 million, in 1967. These figures dramatically illustrate the urgency of a radical new deal to make labour more productive on our railways. One can illustrate the point. If wages were to rise another 10 per cent., and revenues were to fall another 10 per cent., the total revenues would hardly be enough to pay the total salaries and wages bill.
This excellent White Paper on Railway Policy was very guarded on the prospect of improvements in labour productivity. I would refer noble Lords to page 17, paragraphs (d) and (e), where they say in paragraph (d):
"Postulated improvements in locomotive and crew utilisation and in wagon working might prove slower and more difficult to realise."
Then, further, they say:
"It will prove difficult, even with special help, to reduce manpower at the rate implied in the forecast."
Yet it is evidently vital for the future of rail solvency, even on a reconstructed basis, to achieve just this. I presume that the consultants whom the Government employed were asked to investigate this problem, and have given advice on it. It would be most interesting to know what the advice was. I wonder whether noble Lords opposite will be able to
112
tell us what is the present measure of railway manning; what can be done to improve the situation.
We are all familiar with the things that we see—the double manning in the loco cab, and so on—but we realise that this is only a small part of the picture. I make the point that when the nation is being asked to agree to write off this huge sum of £1,317 million we are entitled to ask on behalf of the shareholders —that is to say, the nation—what is happening about this; what is the measure of the problem of overmanning, and what is being done to cope with it. I expect I shall be given the answer that appears in the Railways Report of last year: that there had been a rundown since 1961 of 180,000 men, and 20,000 in 1967. Well that is good as far as it goes. But that is obviously only a beginning, and goes only part of the way.
I come now to the second part of my Amendment; that is, the provision for redundancy. In this connection I was interested to see the new clause proposed by the noble Lord, Lord Lindgren, which appears on the Marshalled List of Amendments with regard to redundancy. In my view, the British Railways Board cannot make a worth while new deal with the unions unless the Government give them a little elbow room to negotiate. I do not mean now at this minute: I set this over a period of 18 months to two years. You cannot expect to buy the rule book for nothing—nobody has ever done so. This time, I want to see British Railways make a deal which really clears away restrictive practices. But that cannot be done just on a straight wage negotiation; it must be something much bigger. This really would affect our railways for the 20th century role we want them to have.
There is, I would suggest, a reasonable precedent for this. In the Coal Industry Act 1967 there was provided a sum of £130 million in order to ease the rapid rundown of manpower in the mines over the following four years. I do not know what would be needed in regard to British Railways, but Clause 42 provides the large sum of £700 million for future borrowing. So they obviously have plenty in hand there. I know that it would be worth a considerable sum to the nation to get the railway manpower

113
situation on a fully efficient level, and it would be a wonderful thing for them. It must be thoroughly bad for everybody to have the kind of overmanning that I believe exists at present. I do not know what reduction would be involved, but I am sure the Ministers must know. I do not want to embarrass them by pressing them to give an answer—indeed, I am sure that they will not give an answer.
I am not asking that this should be done now; the present wage dispute must be settled and the men must get back to work. But, looking ahead over the next 18 months, this is something that must be done. At the present time we just go on limping from one wage dispute to another. I wish that the noble Lord, Lord Robertson of Oakridge, were here. I do not know whether he would feel inclined to talk about it—possibly he could not. We all like the people on the railways, whether they are in the salaries or wages grades, and when we are modernising the capital structure I want to see the manpower structure modernised at the same time, and it is in that spirit I move this Amendment. I beg to move.
LORD CARRON: This is an interesting Amendment, and I agree with most of what the noble Lord, Lord Nugent, has just said; but I question whether this Amendment is the right way to do it. Productivity agreements, if they are bona fide, and if they fulfil the purpose for which they are intended, can produce the substantial results which have been referred to. I have experienced some which have produced results, to both management and work people, of a first-class order and in the process have improved efficiency out of all recognition.
The Amendment calls upon the Board by not later than January 1, 1970, to draw up an agreement with the railway trade unions. Having some small experience of negotiations I have learned that it takes two to make a bargain. If the Railways Board are conditioned by legislation to agree with the unions by January 1, 1970, I suggest that if I were the chief negotiator I would say "This is a superb encouragement to me", but I should not be quite sure that the results in efficiency, and the return to the Railways Board, would be what the noble Lord has in mind. In my opinion the people arranging these matters must be
114
left with freedom of discussion and liberty to negotiate. I hope, with the noble Lord—and I assume everyone—that arrangements of this kind could be brought into being. Vast improvements could be made in British Railways, and in other undertakings in the United Kingdom, both public and private, if substantial productivity agreements were entered into. But it is the easiest thing in the world to enter into this Kind of agreement in which there is little to produce efficiency, and it can produce entirely the reverse result. I have seen this occur on many occasions.
While not disagreeing with the desire to bring into being a sensible and workable productivity agreement which would benefit the Railways Board, the work-people and the nation, I do not think that laying it down in those terms would necessarily achieve the object.
With regard to the latter part of the Amendment, I would fully agree that adequate and proper provision should be made for redundancy if such an agreement could be brought into being. If people are to be displaced I think it is our bounden responsibility that they should be provided for in the event of redundancy.
LORD BOWLES: I am grateful to my noble friend Lord Carron for his helpful speech. There is not much more I wish to say about this, except to point o at that the effect of the Amendment would be to require the Railways Board to draw up and agree with the railway unions a new labour productivity agreement by January 1, 1970.
I must resist this proposal because it is clearly unrealistic to impose a statutory requirement on two parties to reach an agreement by a particular date. What would happen if they could not reach agreement by that date? A statutory obligation on the British Railways Board would greatly weaken their negotiating position.
The second reason for resisting this proposal which I should like to put before this Committee is that British Railways already have an effective redundancy agreement with the unions and have achieved considerable increases in productivity in recent years. For example, as I am sure the noble Lord will know, the number of "traffic units", which means

115
passenger miles combined with freight net ton miles, per employee, has risen by 28 per cent. during the period 1963 to 1967.
Far-reaching negotiations on pay and efficiency have followed the Prime Minister's meeting with the Railways Board and the unions in March, 1966. These talks have led to proposals from the British Railways Board for pay increases in return for greater productivity.
The effect of the financial re-structuring in the Bill is to remove the safety net of deficit financing with effect from January 1, 1969. The British Railways Board will be standing on their own feet, and will be faced with a tough financial remit. This gives them the strongest possible incentive to adopt an effective manpower policy, since, as the noble Lord said, about two-thirds of their total costs are related to manpower.
With regard to the question raised by the noble Lord about the Joint Steering Group, it was rather difficult on the spur of the moment to get all the information I wanted, but the Government do not want to become involved in any discussion about what the Joint Steering Group meant when they used the phrase "special help" in relation to redundancy costs. The Joint Steering Group did not look at this point in any detail and made no specific recommendation.
I take personal responsibility for suggesting that tonight we should not discuss in much detail this most unhappy rail situation. I had notes that I have ruled out and I am not using tonight, in the hope that no hard feelings might be raised by any unfortunate remark that might be made in this Committee.
I invite the Committee to resist this Amendment.
LORD NUGENT OF GUILDFORD: I thank the noble Lord, Lord Bowles, for his reply. Of course this is not the kind of Amendment that I intended to press in any event, but I thought in view of the importance of Clause 42 this was an occasion when a comment of this kind was apposite. In a moment I shall withdraw the Amendment.
The noble Lord, Lord Bowles, claimed that a good deal had already been done, but my comment would be that it is nothing like enough, and I believe we all
116
know that. I think I have said enough to express my view, which I am sure would find a great deal of support throughout the country quite independently of any political view which we may hold. The railways belong to all of us; we want to see them succeeding and giving a good service. It is terribly demoralising to be constantly "in the red", and of course it is terrible to have a waste of manpower. I feel most strongly on this and I do not feel it in any sense of antagonism towards the railwaymen. I was fortunate in having something to do with them when I was in the Ministry of Transport and I like them very much, but I feel this is something which will need help from the Government. The Board alone will not be able to do it, and while I certainly take the point made by the noble Lord, Lord Carron, that one should not put a date on it, I put a date in my Amendment because I think the present state of affairs should not be allowed to go on for ever. Somebody has to try to do this one day, and I hope the Government may feel that in inviting us to write off this huge capital sum they have an obligation to try to crack this problem over the next year or two. It really is a major problem which desperately needs cracking. It is in that sense that I moved the Amendment and now ask leave to withdraw it.
Amendment, by leave, withdrawn.
On Question, Whether Clause 42 shall stand part of the Bill?
VISCOUNT SIMON: Before we agree that the clause stand part of the Bill, I would ask the noble Lord, Lord Bowles, two questions for elucidation. Unfortunately, I was unable to be in the House for the Second Reading of the Bill, but I read the OFFICIAL REPORT and I do not think these matters were dealt with in quite the manner in which I hoped. The noble Lord, Lord Nugent, has spoken of the very serious situation arising from the need to write off this enormous amount of capital. I want to ask the noble Lord whether he would agree that if £300 million is now assessed to be the realistic capital of the railways on which they can be expected to pay interest, does that not in fact mean that about two-thirds of the expenditure of the last 10 years has been an unsatisfactory investment, because the expenditure in that time has been something of the order of £1,000 million.

117
My second question is this. I think I am right in saying that the Minister in another place, in the course of the discussions on this Bill, said that there would be no continuing subsidy to the Railways Board. But is it not a fact that in so far as the interest which has to be paid on the outstanding Transport Stock exceeds the interest which the Exchequer will receive on this £300 million, there is in fact a continuing subsidy to the railways?
LORD BOWLES: I am grateful to the noble Viscount, Lord Simon, for raising these two points. They are to me very technical indeed, and I wonder whether he would allow me to send him the answers in writing? The noble Viscount indicates his assent, and I am much obliged.
Loup HAWKE: I should like to make one point on this clause, which I have constantly made before in this House, and that is that if the nation writes off enormous sums of capital from the railways, on the other side of the book the railways should hand over surplus lands to the nation. They have a tremendous amount of surplus lands, and they are still not doing very much with them.
Clause 42 agreed to.
Clauses 43 and 44 agreed to.
Clause 45 [Duty of Freight Corporation and Railways Board to review organisation]:
8.15 p.m.
LORD WINDLESHAM LORD WINDLESHAM moved Amendment No. 127:
Page 66, line 4, after ("require") insert ("but at least once every three years").
The noble Lord said: Under Clause 45 the British Railways Board and the National Freight Corporation have a duty to review their organisation and report to the Minister. They must make their first report within a year, and subsequent reports as and when they are felt to be necessary or if they are called for by the Minister; and copies are to be laid before Parliament. All this is praiseworthy, so far as it goes, but we feel that a review of the organisation not less than once every three years would introduce some systematic regularity and would give continuity to what
118
could otherwise become rather a dead letter.
Obviously, the first review of the organisation will be carried out, as it must be, but the future practice which is envisaged, that further reviews will be made only when they seem to be necessary or when the Minister specifically calls for them—which will probably be because something had gone wrong—is, we feel, leaving it rather too open. Therefore, the three-years period is suggested only in order to introduce some period of time. If it were felt that the period should be five years or ten years, we should welcome it. It is for those reasons that we have tabled the words on the Order Paper and I beg to move Amendment No. 127.
LORD HUGHES: This Amendment is identical to one which was negatived in another place last March, and I am afraid the way in which the noble Lord has moved it now indicates that he is suffering some of the same misapprehensions that Opposition Members felt in another place on that date about the purpose of these reviews. The reviews are intended to determine whether the direction of the Board's and the Corporation's activities is organised in the most efficient manner. The reviews are not intended to cover the efficiency of individual services, nor the internal management of individual units.
Subsection (1) gives the Board and the Corporation the duty of requiring them to carry out further reviews, as the noble Lord has said; and, as he also said, it gives the Minister the duty of requiring them to be carried out whenever this appears necessary. This might be in less than three years if a particular form of organisation proved unsatisfactory. We must bear in mind the diversion of effort which is involved particularly in the time of senior officers in undertaking a major review, and that a particular scheme of organisation will often take time to prove itself. So the reasonable thing—a thing which reasonable men would want to do —would be to give a promising form of organisation an undisturbed period of time to work itself out, and that might not be possible within a period of three years. The provision of this Bill is similar to that in respect of the British Steel Corporation in Section 4 of the

119
Iron and Steel Act 1967, and no such limitation as this was made in that Act. I would go further and say that no such limitation as this was even suggested in relation to the activities of the British Steel Corporation. We feel that it is not sensible to fix a maximum interval for these reviews but that it is right they should take place either when the judgment of the Board or that of the Minister dictates that circumstances warrant a further study.
This does not mean that people do not need to know what is happening inside the railways, to some extent at any rate, because, after all, the annual reports of the Corporation and the Board are to be available and they will give a great deal of information—information similar to that which appeared to be sought in the debate in the Commons Standing Committee—and of course the information given in these annual reports can be debated. I would point out that the 1967 Report of the Railways Board was published on May 13, and that of the Transport Holding Company on June 11.
I invite the noble Lord, Lord Windlesham, to withdraw his Amendment, because the reviews which he seeks to have at such fixed intervals are not necessary for the purpose of seeking the sort of information which was debated in another place and which will be available, by and large, in the annual reports. It is desirable that so major an operation as a review of the kind contemplated in the clause should take place as and when required, whether it is at an interval of less than three years or of more than three years.
LORD WINDLESHAM: I did not use the argument that a regular review was needed every three years in order to produce information because I do not believe that is the point here. I think that what we were discussing earlier about the contents of the Annual Reports is much more relevant. I too had taken the point, although I may not have made it clear, that I do appreciate these are reviews of organisation and not just inquiries into some aspect of the operations of one of the Boards or the Authorities. But we come back really to what the noble Lord, Lord Nugent, was saying so persuasively on the last Amendment, that huge sums
120
of public money, over £1,000 million, are being written off.
The noble Lord, Lord Robertson, told us that there had been too much chopping and changing and politicians should leave some of these things alone to try to get a really good organisation; and we wholeheartedly support that point of view. But why is this clause here at all? One can see the need for the initial review of the organisation, but why is the power put in the Bill? If this is just going to be used as and when it is thought necessary by the Board, they do not need this power. If a public authority wants to conduct an investigation to review the way in which it is organised it is perfectly free to do so. It does not need to take a special power.
I do think this is perhaps something that the noble Lord might look at, because he has introduced a number of arguments in reply which I had not actually raised. Leave out the three-year period; let us say a period of years, perhaps five, perhaps seven. Leave out the point about seeking further information, because I do not think that is really what lies behind this. It is just this: are the public going to be convinced that the Railways Board and the other authorities have their organisation set up in such a way that the public are going to get value for money? If the noble Lord can give us any sort of assurance on that, we will withdraw the Amendment. If not, I do not think we want to press it at the moment but we might want to come back to it at Report stage.
LORD HUGHES: It may well be that in looking at the merits or otherwise of the Amendments we have tended to concentrate too much on the period of three years. I do not know whether, if we substituted five, seven or ten years, it would necessarily make the Amendment any more acceptable. Certainly I would like to be certain in my own mind that I was not looking at the particular tree labelled "three years" and forgetting the rest of the wood. I will certainly undertake to have a look at this, and perhaps I could have a word with the noble Lord, Lord Windlesham, before the next stage.
LORD WINDLESHAM: I thank the noble Lord for that reply and beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD WINDLESHAM LORD WINDLESHAM moved Amendment No. 128:
Page 66, line 12, at end insert ("and also representatives of the users of the services provided by the Board and the Corporation.")
The noble Lord said: It has already been pointed out that there is very little reference in the Bill to the interests of users or consumers. In the debate on Amendment No 101 moved by the noble Lord, Lord Donaldson of Kingsbridge, he explained his desire to see consumers represented, not just in a consultative capacity, which he felt was ineffective, but in some instances by representatives of consumers going on to the boards of the new Authorities. I do not know if there are any fine distinctions. It has been said there are great difficulties in defining consumers. I do not see any distinction between consumers and users; to me they are the same people. And I think that although Lord Donaldson represents organised consumer interests, and we are talking about people who use the services, we are fundamentally talking about the same people. The two noble Baronesses, Lady Elliot and Lady Horsbrugh, added their very knowledgeable and authoritative voices against the proposition that it is just too difficult to pin down and decide who is a consumer or who is not. They, together with the noble Lord, Lord Donaldson, have been concerned with representing consumer interests and explaining exactly who are the sort of people to represent those interests. I believe that if the people who recommend appointments to the boards were to sit down and think about the sort of person they should appoint, if they needed to have a representative of users, they would be able to do so.
When the noble Lord, Lord Winter-bottom, replied to the earlier debate on Amendment No. 101 he was able to hint, although rather guardedly, that the Government might be sympathetic to what might be called the consumer or user line of reasoning. The object of this Amendment is a rather narrower one. It is to ensure that before reaching conclusions in consequence of a review of organisation the Railways Board and the Freight Corporation should consult. In the Bill as it was originally drafted I think the clause ended there. But as a result of discussions in Standing Com
122
mittee in another place the additional line was tacked on saying that there should be consultation with staff and trade union representatives. We believe if there is to be consultation, which seems worthwhile, with trade union representatives, there should also be consultation at the same time with representatives of the users. It is for these reasons we have tabled this Amendment. I beg to move.
LORD HAWKE: I think this is a very important Amendment. I do not regard it as a sort of balancing act, that if you consult trade unions on the one side you must consult somebody else on the other. But anybody who has had anything to do with railways will know that they tend to segregate themselves into a sort of dream world of their own and their object becomes to run trains with the utmost of perfection. In fact, I know two general managers whose spare-time hobby when they came home in the evening was to play with toy trains. The result is that the golden mean of a real railwayman tends to be to achieve the greatest perfection in the running of the trains quite regardless of whether he is providing the type of transport his customers really want. I think this calling in of the customers on this review is a very important operation in order to give the railways some light on what people think of them.
LORD HANKEY: I would like to add my word to what the noble Lord, Lord Hawke, has said. I believe it is extremely important that the transport service should be in touch with the people they have to serve and that the people they serve must be able to give very valuable opinions on the services when these periodical reviews take place. I earnestly hope, therefore, that the Government will see their way to accepting this Amendment.
LORD BEAUMONT OF WHITIEY: Unlike the noble Lord, Lord Hawke, I do think there is some point in even a balancing act. More and more we should get to the stage where, as often as possible, employer and consumer and employee should consult over a great number of things. In principle, I am entire y in favour of this Amendment. I wonder, however, as it has been said that this is about the first time we are really getting the consumer into this Bill, whether he should come in at this particular

123
moment on what appears to be a very high level, a very technical internal review, or whether we ought not to concentrate more on seeing that he is consulted in some of the more general and consumer-oriented facets before we tackle this particular one.
LORD HUGHES: I hope that the last thing I would succeed in doing would be to persuade any of your Lordships that I was not concerned about looking after the interests of consumers, whether of railway services or anything else. As the noble Lord, Lord Beaumont, has suspected, this is not the place at which this should be done. I must say in advance to the noble Lord, Lord Windlesham, that having regard to the most friendly and conciliatory way he is putting all of his Amendments, I regret that I cannot be at all helpful on this one, simply because I think that the Amendment embodies totally the wrong thing to do. This would be the equivalent of inviting the customers of a large public company to be consulted as to how many directors there should be on the board, or how many divisions and what divisions should be directly responsible to the board, because the purpose of this review and the purpose of the consultation is, as the words imply, "so far as regards the direction thereof".
There is a reason for distinguishing between the consumer and the trade unionist in this case, because the trade unionist has a quite direct interest in the way in which the industry from which he is getting his livelihood is organised. It is because of the acceptance of the modern concept that more and more the workman should at least know, or have some idea of, what is going on in the organisation or reorganisation of the business in which he is employed, that this is imported into this particular clause.
Users as a class have the protection of the duty which the National Freight Corporation and the British Railways Board have imposed upon them to have due regard to efficiency, economy and safety in the provision of their services. Moreover, as has been said time and time again, the boards are under the financial duty of at least breaking even, and it must be obvious that unless they can satisfy their customers they will not be able to meet either their statutory finan-
124
cial duty or their financial target. Detailed complaints by the user about either passenger or freight services will be able to be referred to the T.U.C.C.s, and Clause 45(4) provides for all reports under subsection (1) to be laid before Parliament. Thus, there is reasonably adequate safeguard of user interests in a more practical way than by arranging for the boards to consult them about organisational reviews.
After all, at the end of the day, what the customer is interested in is in the service or lack of service that he is getting from the railways, not who are the directors, nor who are on the Board, nor what their responsibilities are, nor who is responsible for looking after this division or that division. It is the results which come from these boards.
In the Bill the necessary opportunity is given for the consumer to be represented and to be in a position to make known his point of view in these matters. I most sincerely suggest to your Lordships that, to seek to give the consumer an interest in the way in which the board of directors is constituted, or how it purports to carry out its job, is a mistaken concept.
LORD WINDLESHAM: I think the noble Lord, Lord Hughes, following on what the noble Lord, Lord Beaumont, said, has a point in saying that perhaps this is not the best moment at which to pursue our argument on the safeguarding of user interests. Nevertheless, we feel that this is a matter which has been worth again drawing to the attention of the Government. It was discussed extensively in Committee in another place, and I think one of the reasons why it has continued to run is that the Minister, who was a junior Minister, speaking for the Government at that time is thought to have given some encouragement in a reply. I think, therefore, that some members of the Committee on subsequent stages thought that there might be a softening of attitude here. The noble Lord, Lord Hughes, has been extremely clear and frank in his reply. I do not think that this is the time to press the interests that we have of consumer and user, and I therefore beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 45 agreed to.
Clauses 46 and 47 agreed to.
Clause 48 [Manufacture, repair and supply]:
8.33 p.m.
LORD BESWICK: Before we move on, I wonder whether we might consider the situation so far as time is concerned. As I understand it, the convenience of the Committee would best be suited if we took the whole of the Amendments on Clause 48 together. At the beginning of to-day's Sitting, I said that in view of the transport situation outside it would not be convenient to go beyond 10 o'clock. I wonder whether the noble Lord, Lord Nugent, and other noble Lords opposite, can give some indication as to whether in their judgment we shall be able to complete the debate on Clause 48 in the time within which I undertook that we should do?
LORD NUGENT OF GUILDFORD: Parliamentary time is always unpredictable, but I should have thought that the answer was, Yes. Our Amendments are all linked together on a single point which really goes to the heart of the clause itself, and does in fact give the basis for a debate on the Question, That the clause stand part. I believe that a debate of that kind would suit noble Lords on the Liberal Benches as well. No doubt the Liberal Benches will make plain their view, but the view we took was that this clause was debated at great length in another place on a whole series of Amendments in regard to all kinds of industries that were interested. But in view of the limited time we have here, we felt the right thing to do was not to go into a long series of Amendments but simply to have one debate on the principle of the clause and to be satisfied with that. We felt that this would be for the convenience of the House. So we are quite willing to co-operate.
LORD BESWICK: I am obliged to the noble Lord. I hope that we can have the understanding that if, for reasons not immediately apparent, the debate appears to be going on much longer, nevertheless we should accept that 10 o'clock should be the time at which the House be resumed.
THE DEPUTY CHAIRMAN OF COMMITTEES: My difficulty is that I have to put Amendments Nos. 131 to
126
139A inclusive, unless I am told that they will not be moved. Is it the case that the Amendments of the noble Lord will not be moved?
LORD NUGENT OF GUILDFORD: If I may, my Lord Chairman, I will move Amendment No. 131 and at the same time discuss all the other Amendments in the names of my noble friends and myself. Then, when that has been done, if the Government accept them all, of course we shall be delighted; but if they do not, then we may perhaps not pursue them and move to leave out the clause as a whole, which will be the correct procedure.
LORD BEAUMONT OF WHITLEY: We shall be quite happy to have a general debate on Amendment No. 131 and then, after the general debate, to decide whether or not we should seek to remove the clause.
8.38 p.m.
LORD NUGENT OF GUILDFORD LORD NUGENT OF GUILDFORD moved Amendment No. 131:
Page 68, line 24, after ("power") insert ("subject to the Minister's approval").
The noble Lord said: In the circumstances, I beg to move Amendment No. 131. I hope that it is convenient for your Lordships that we should proceed in the way suggested. I shall not spend much time in describing exactly what our Amendments do, but they would have the effect of requiring that an authority or a board mentioned in this Bill which was contemplating engaging in manufacturing or selling under Clause 48 would first have to establish that there is a lack of such capacity in private industry.
As I say, this really goes to the heart of the clause. This clause (it was Clause 45 in the original Bill and is now Clause 48) has aroused, as noble Lords opposite know, universal opposition throughout both industry and trade, because it allows these boards and authorities to go into manufacture or trade in almost anything they like. The qualifications of subsection (2)(a) are almost unlimited. This is in line with the words spoken by the Minister of Transport last autumn, in promising a major extension of public ownership. Clause 48 provides the power to do just that. I must make it quite plain to the noble Lord, Lord Shepherd,

127
and his noble friends that we on these Benches are completely opposed to this.
First, we consider that it is unnecessary for these authorities in carrying out their main business of transport; and, secondly, we consider that for the national economy as a whole a further extension of state trading is dangerously weakening. At the present time, with the vulnerability of our economy, and when we are desperately concerned to pay our way, anything dangerously weakening is something we simply cannot afford to do.
Let me deal first with the trading needs of the boards and authorities. The present position rests on the 1962 Act, Section 13. This allows all boards and authorities to manufacture anything they like either for their own requirements or for any other board or subsidiary, but not to manufacture for sale to outside customers. I should be the first to recognise that there are marginal problems that arise, and in the interests of authorities and boards I should be willing to consider a carefully and very limited power to meet them. The sort of problems I have in mind are that there may be seasonable troughs of demand within an industry when there is spare capacity which could be sold outside; but I would make the caveat that this could be linked to faulty demand projection or faulty management.
But before power was taken to meet either of these problems, the most stringent inquiry would be needed to ensure that the spare capacity had not arisen simply through faulty management. After all, in private business if there is faulty management, and therefore surplus capacity, this suffers the penalty that it must be declared at a loss or carried unproductively. But there might be a small residual problem remaining to be catered for here in very circumscribed circumstances.
The third possibility is that spare capacity may arise of a chronic large-scale nature—for instance, as it is in the railways now—which can be dealt with only by a specific investigation to consider whether resources should be switched into some new development. That kind of investigation should be done with the authority of Parliament and, if there is to be such a switch, with the specific approval of Parliament. Here I think it
128
is worth making a point which has been made before: that diversification confers no automatic salvation, and development into unfamiliar fields does not necessarily mean that profits will be made comparable with what the experts there are already making. You have only to look at the experiences in a field like Shorts, of Belfast, with their unhappy results, to see what may happen when diversification is wrongly made. There is a great tendency for everyone to think that the further fields look greener. There is a further point which has been made before here by the noble Lord, Lord Robertson of Oakridge: that British Railways, for instance, would be very reluctant to open up some new line of trade, in competition with their customers, for their main business of providing rail transport. The obvious result would be the maximum loss of good will.
However, I would make the general point to the noble Lord, Lord Shepherd, that if the Government were willing to remove Clause 48 and come back to a clause of a strictly limited nature, with effective safeguards to deal with the kind of marginal problems I have mentioned, I should be prepared to advise my noble friends to give such a clause a fair consideration on its merits. I acknowledge that the Government have made a small concession in subsection (7), but it falls very far short of the kind of provision I am thinking of. But our general position on these Benches is that, having accepted the existence of the previous nationalised industries, and indeed lived with them and helped them to develop over our thirteen years of Government, we want them to have every chance of trading success and to make the maximum contribution to the national economy.
This brings me to my second point. We consider that a further extension of state trading is weakening to the national economy. The post-war record of nationalised industries gives ground for this anxiety. The total investment by taxpayers is of the order of £12,000 million, and the record over these twenty odd years of written-off capital and revenue deficits amounts to over £3,000 million, against interest paid to the Exchequer of about £2,100 million, so that the accumulated net loss over the twenty years on this huge capital sum of £12,000 million

129
of the taxpayers' money is £900 million. This is the reverse of a good investment for our people, and no-one would say that people generally feel that they have a service which is at a particularly low price or at a particularly high efficiency.
This is really not a record which justifies a further plunge in the same direction which the Government now imply or take the power for in Clause 48. A few months ago we debated the general problems of running the nationalised industries. In a very interesting and, I think, objective debate—and I certainly do not propose to traverse that broad and fascinating subject to-night—we observed the inherent difficulty of devising a financial discipline which would take the place of the consequence of making a loss and ultimate insolvency which is the spur for every private business. As every private business lives with the trading risk of the market and successfully trades at a profit or goes under, so each private business is bearing its share of the nation's trading risk. This is the basis of a healthy economy, but neither at the national level nor at industry level can anyone for long go on spending more than he earns. Sooner or later we are all bound to suffer, and indeed as a nation we are now going through this painful process following our default of last year.
The weakness of the nationalised industry sector in this context is that it is shielded from these ultimate disciplines by the Government of the day, whether it is the Party of noble Lords opposite or the Party to which I belong who are in Government. The Government of the day cannot let the industry go, they must make the taxpayer pay the losses as well as providing annual capital. Do not let us forget that we pay between us some £800 or £900 million a year in providing capital for the nationalised industries. We pay that out of our taxes and it amounts to just about the equivalent of the whole of the capital formation of private industry of the whole country. It is a very heavy burden for the economy to carry.
Here is a sector of the economy which, however good the performance of some of its members—and they are good—is continuously in danger of being a passenger in the national economy, carried on the back of the private sector. Whichever side of this Chamber we sit on, we have to face that we have not yet found
130
effective safeguards against this danger. The record of the last 20 years shows I this. There may be cogent political, social or economic reasons for maintaining certain nationalised industries, cogent both to noble Lords opposite and to ourselves. But it really is self-evident that there are overwhelmingly cogent reasons for keeping the nationalised sector within strictly limited bounds, and in my opinion this Government has already been most unwise in the major nationalisation measures it has followed.
The private sector is the sector which makes our exports and bears the risks of the markets of the world. I am not one to plead for individual industrial interests. I am concerned here with the national economy. I am convinced that the private sector is the goose which lays the golden eggs on which the nation lives. It is in the interests of all that this should not be further diminished by a further increase in nationalised trading by Government action, and it is in that spirit that I beg to move the Amendment.
8.50 p.m.
LORD BEAUMONT OF WHITLEY: This is another clause on which we in our Party would appeal to the Committee very strongly, since it opens the way to a large degree of creeping, petty nationalisation. We are not opposed to nationalisation as such—we probably started it. But we think it should be applied only to very special situations and under very tight control. In dealing with controls, I associate myself with the remarks of the noble Lord, Lord Nugent. If the Government had given way rather more on Clause 41, we should be feeling a little happier about this. We feel that it is the questions of under-cutting, loss-making, cross-subsidisation and not very clear accounting that are the real dangers.
Unless anybody should suspect that this is just a bogy thought up on the Conservative and Liberal Benches, let me raise briefly a case which I have already quoted in your Lordships' House. This involved tree transplanting by the National Coal Board. I complained that the National Coal Board had transplanted trees for local authorities at what they called cost price, which ignored overheads and was in danger of putting out of business a great many private firms that had put a great deal of capital into this

131
socially valuable business. The noble Lord, Lord Beswick, replying to the debate said—and I quote from Hansard of January 31, 1968, Volume 288, column 854:
"As another example of unfair competition, the noble Lord made complaint of the National Coal Board's tree-transplanting unit. I am sorry he raised this matter, because I must say that I thought this was an example of public-spiritedness on the part of the National Coal Board, and certainly what they have done has, I understand, met with the approval of the Civic Trust, who have encouraged local authorities to plant more trees. They are able to plant more because they are able to plant them more cheaply by using this machine which the National Coal Board has at its disposal; and as this means that the machine is being used more fully, the N.C.B. is able to spread its charges."
This was said in the middle of replying to a lengthy debate. I am not saying anything personal about Lord Beswick's reply, but I think that the reply is symptomatic of the kind of attitude which can apply to nationalised industries. Of course it is a good thing to transplant trees; of course it is a good thing, if people want it, to sell harmoniums on the banks of canals. And of course the National Coal Board can do the first more cheaply if they disregard the overheads; and of course the Waterways can do the second more cheaply if they disregard the overheads. Noble Lords on the Benches opposite want to see that this does not happen, but it is one of the things which tend to happen in this kind of situation.
I do not see any reason why a great number of these powers should not be let out to private enterprise. There are enormous advantages which public enterprise has, even if the tightest financial controls are applied, particularly when it is a question of garages, newspaper kiosks or sweet shops, or whatever it may happen to be, at places where passengers get on the trains or the boats, which are owned by the public. I do not see why the boards and authorities should have this particular advantage. As the noble Lord, Lord Nugent, said earlier in the debates on this Bill, it is simply committing further money and resources in a field where the financial disciplines which operate on private enterprise do not exist. We believe that this is sheer empire-building on behalf of the nationalised industries. We think that it ought to be resisted. We very much hope that the Government will give considerable con-
132
cessions on this point, and we very much hope that they will do as Lord Nugent has suggested; that is, to take this clause away and come back with one on the rather narrower lines which he outlined.
LORD BALFOUR OF INCHRYE: My noble friend Lord Nugent of Guildford has deployed clearly and powerfully the viewpoint which we on this side of the Committee hold. He has made an offer which I hope Her Majesty's Government will consider. There is only one point that I should like to raise. I refer to the danger inherent in the phraseology of subsection (2)(a) which says:
"…to repair for outside persons, anything which the authority consider can advantageously be so manufactured…"
The word "advantageously", if it is not more closely defined, is full of dangers. An advantage can be an economic advantage; it could also be a social advantage.
As I foresee the matter, if a board is carrying out some activity in a difficult area with heavy unemployment, and is under heavy pressure to interpret the word "advantageously" in the social sense and irrespective of the economic results of its operations, it may feel entitled, and indeed obligated, to continue something which is uneconomic in itself and would certainly bring distress to others in the private sector who are engaged in the same type of operation. That is one particular danger I see. Had Her Majesty's Government come forward with other words instead of "advantageous"—for instance, "to commerical advantage"— I should have been somewhat happier in my mind. But I am extremely worried at the looseness of the words as at present put forward in the Bill.
LORD ST. HELENS: In the acceptance or rejection of this particular clause is a basic principle which demonstrates the deep cleavage between the two sides of the Committee. I can speak only for myself, but personally I do not wish to see the extension of the public ownership sector. I think that it is already too big; and already it imposes unfair competition against the private sector of commerce. Already to-day the private enterprise sector is dependent on the State for coal, electricity, gas, steel; and when this Bill becomes law it will be dependent also for its transport. Frankly,

133
I think it is too much. We are, after all, "a nation of shopkeepers." If we wish to survive, we have to make a profit in the world overseas. If the Government are to introduce such a revolutionary innovation as is enshrined in this clause, they should either justify the case on economic grounds or require each undertaking, before branching into a new venture, to demonstrate to the Minister and to the public that it can manufacture more cheaply and to a higher standard than can the private supplier.
I do not believe that we on this side of the Committee are against reasonable powers. For instance, we believe that the railway workshops perform an admirable service to the country. But there is this difficulty. If the railway workshops are allowed to buy a very expensive piece of equipment and to use it for a different purpose, in order to compete with private enterprise, this becomes most unfair competition. Yet that is what the clause which we are debating would allow.
LORD SHEPHERD: Could the noble Lord tell me why it is unfair competition, if it is on a commercial basis?
9.0 p.m.
LORD ST. HELENS: Because the railway workshops use the taxpayers' money, which is yours and mine, to buy a piece of equipment for a specific job and then use it for a different job. That is wholly unfair and I should have thought any fair-minded person would have realised that.
We do not object to the ancillary and reasonable jobs that are done. For instance, the restaurant and catering services of British Railways are obviously necessary, and so are the ancillary and emergency facilities in the road transport sector. It is the trading powers beyond the ancillary and emergency facilities to which we object. If the Minister, as I am sure he will, makes light of this, I shall only say to him that I am not fussed about the immediate future. Indeed, as I said earlier, it is very easy to make light of a piece of legislation by saying, "Of course, the intentions of the Minister are not to use it in a drastic way". But we are legislating for 10 or 15 years ahead, and the present intentions of the Minister do not matter. What we have to worry about is how these powers are going to be used in the future.
134
I suggest that your Lordships go down the High Street and try to pick out which shop will not be affected by the powers given under this clause to the nationalised industries and to their subsidiaries, which are most important because whatever powers are not directly given to the various Boards are given to the subsidiaries. Petrol, oil, spare parts, secondhand cars, all motor accessories, newspapers, books, stationery, whisky, gin, wine, minerals, tobacco, coal and other fuels, electrical appliances, television and wireless are all included within the powers given under this clause.
We do not believe that the present vague proposals in relation to accountancy will allay the fears of the private sector of industry. We want to know—and we are not going to be told—how much capital at current value is employed in each separate undertaking, and how much of the nation's resources is going to be employed in these nationalised industries, particularly under Clause 48. We also want to know the basis on which the capital value of land, property and other assets is going to be employed, because there is no indication of this in the Bill. Yet all this is desperately important, because until we have this knowledge it is quite impossible to make a judgment as to what is unfair and what is fair competition against private industry.
We want to have a vastly greater amount of information. We want to know the detailed accounts of the direct labour forces. This has hardly been mentioned at all and yet there are large direct labour forces employed. We want to know how these forces fit into the accounts of the nationalised industries. It is only through knowing these factors, particularly about the direct labour forces, that we and the country will be able to assess whether or not in any particular sphere there is wasteful competition.
In short, we believe that the railways should concentrate on running the railways. Goodness knows, they have enough on their plate at the moment. We believe that they should provide the necessary facilities for passenger and freight transport. It seems to me that we come down to an argument in which each side is saying, "Anything you can do, we can do better". We say, "Fair

135
enough, but we believe this is not the moment to decide this most important issue". What we are saying to the Government is, "Prove it, or put it to the vote".
LORD POPPLEWELL: I agree wholeheartedly with the opening remarks of the last speaker, the noble Lord, Lord St. Helens, when he said that this clause represents the cleavage of opinions on both sides of the House. The rest of his speech indicated the difference between us. I was extremely interested to hear the noble Lord, Lord Nugent of Guildford, say, "We have lived with and helped to develop the nationalised transport industry". I think the noble Lord, Lord St. Helens, gave a complete answer to that, by the number of items which he, with his very vivid imagination, felt this clause would enable the Railways Board and the transport undertakings to produce. If that is the type of help and development that has been given to the nationalised transport undertakings in the past, one can understand the deficit of £12,000 million referred to by the noble Lord, Lord Nugent of Guildford.
That is the type of help that the Tory Party gave during the whole time they were in office. They changed what was a profitable undertaking paying all interest charges, meeting all working costs, and showing a profit up to 1953. I think the House will be getting a little tired of my repeating these figures, but I do not think I can repeat them too often because that type of help and development has turned a profit into the huge deficit to which the noble Lord, Lord Nugent, referred.
I was very impressed when at this late stage, after opposing all development of the nationalised transport industry, the noble Lord asked—is it really death-bed repentance?—for the clause to be taken back, and for a limited clause giving the Board and the Authorities some right to produce. Is this action sincere? Why did they not do this in the past? When the Opposition were in power for so long, why did they deliberately curtail the powers of the transport industry to develop? They closed down railway workshops galore and at the same time put railway work out to private enterprise, making railwaymen, who were pro
136
ducing these goods at a fair economic price, redundant in the interests of private enterprise. This is the type of development that Lord Nugent referred to as taking place in these 13 years.
I was very interested, too, in the suggestion (I think from Lord Nugent and also Lord St. Helens) that there probably is a case for utilising the spare capacity in railway workshops. That does not quite tie up with what has been happening. Indeed, it does not tie up at all with what has been happening because, as I have said previously, railway workshops have been closed down. Those railway workshops which have been allowed to remain have seen spare capacity arise in their workshops and the work that they were doing has gone outside. Is this the type of development that we have to pay any attention to? It was suggested, I think it was by the noble Lord, Lord Balfour, that there was objection to the "advantageous" terms in this particular clause, and the noble Lord wanted to introduce the phrase "commercially advantageous". In the past, the railway workshops have been able to produce everything on a commercial basis, but have not been allowed so to do.
The noble Lord, Lord Balfour, of course, envisaged that in a time of difficulty it would be possible for railway workshops to be utilised with a view to helping towards the solution of the problem of unemployment that might arise in a given area. In other words, he thought that this nationalised undertaking should accept some social obligation. Here again, of course, this represents a complete difference between both Parties on this particular point. We look to private enterprise to accept some social obligation, but one knows very well the type of people involved and what has happened in times gone by. They are hard-headed businessmen, and when they embark upon any particular project the economic scrutiny that takes place with regard to feasibility goes very deep indeed and is very searching.
One knows the type of development that there was under the Tory Party. One remembers that they refused to allow the railways to produce their own diesel motive power unit, and the electric motive power unit is produced by outside firms. In the past the railways have always produced their own motive power unit—the

137
steam locomotive. The railways provided the jigs, they carried out the experiments and they provided the prototype of the diesel locomotive, and then, under the auspices of the Conservative Party, that was handed out to private enterprise. It was the railways themselves which had conducted the research in these particular directions. It was the railways themselves which had produced the prototype for the electric locomotive. Yes, the railways themselves produced the prototype of the electric locomotive; and the old British Transport Commission, before it was changed, authorised development for electric traction, but that was delayed for many years. The prototype was in their workshops in the first instance, and then that again was handed out to private enterprise. This is the type of encouragement and development that we hear the noble Lord, Lord Nugent, talk about.
VISCOUNT BRIDGEMAN: May I interrupt the noble Lord for a moment? Is he suggesting that the electric equipment was designed in British Railways workshops?
LORD POPPLEWELL: What I am suggesting is that the prototype of the type of motive power unit required was largely developed there. "Fully developed" is not quite the right way of putting it; I accept the correction. The research—I think that is a better word—took place there. I stand corrected. The research that took place was done by the railways people. The development was handed over to private enterprise—and that is the whole background story of what took place.
The need for some strict financial discipline in publicly-owned undertakings was referred to particularly by Lord St. Helens and also by Lord Nugent. This is most interesting. The so-called strict financial discipline imposed by the Tory Party in their years of office led to the Railways Board having to go on the open market to borrow money at 6⅞ per cent. to pay interest on money already borrowed at 3½ per cent. This was the financial discipline of the Tory Party. These are not fairy tales; these are facts. All this talk of so-called financial discipline when it comes to publicly-owned undertakings is merely to cloak attempts to work the publicly-owned undertakings competitively and then to hand over any
138
opportunity of making a profit to private enterprise. Here again we come back to where we started. This is the heart of the difference.
When the old British Transport Commission wanted to go into electrification to produce their own power, either through coal-fired or other generating stations, the influence of the Conservative Party was used to stop or to hold up for years any such development. In the interests of what? In the interests of oil—oil from the Far East; oil that put us to the double trouble, consequent on the blockade of Suez, first, of having to be transported the long way home and, second, of pinning our economy—as far as railways traction was concerned—on a material that we had to import. Common sense commercial prudence would have dictated that the Board be given the green light to use electric traction, to utilise their own resources and so to save the nation many millions of pounds on our balance of payments. This is the story. I sincerely hope that when my noble friend replies, he will not be beguiled into promising the noble Lord, Lord Nugent, to corn e back with a much more limited clause— although, as I have said, it indicates some sort of death-bed repentance on the other side that they are prepared at least to envisage some type of commercial viability in the limited number of railway shops that are now available. They do not envisage giving them full scope; but they now are prepared to go part of the way. Can we really put trust in this in view of what has been said? I think one must take the lessons of past history. History has taught us just how much reliance we can place in this direction.
One Amendment says that before any development should take place the consent of the Minister must be obtained. If this is put into the Bill we are back to where we were. I think that, generally one must leave it to the Board, and allow them to utilise their own commercial judgment instead of being subjected to the political control. This has been exercised in the past to the degree I have indicated. Now I think it should be left entirely to those who are appointed to run our transport industry. Of course these may be directives that require political judgments at the highest level, for example, in connection with economic circumstances. But these are the only kind of political directives that

139
I should like to see imposed on the Board.
VISCOUNT MASSEREENE AND FERRARD: Is the noble Lord, Lord Popplewell, telling the Committee that the Swindon railway workshops could have made diesel traction engines cheaper than private enterprise? The Swindon workshops were not tooled up for that. There were shops in the country that were tooled up. If British Railways were going to make them themselves they would have had to have new factories.
LORD POPPLEWELL: I did not refer to the Swindon railway workshops. The Derby workshops provided the diesel prototype. I did not complete my story when I was referring to dieselisation and electrification and to pinning our transport economy on oil. The cost of a diesel motive power unit in 1963, according to the then Dr. Beeching, was £24,000 more than an electric locomotive of a similar horsepower. If we consider the capital needed for overhead lines and think of saving £24,000 on each motive power unit, that would have gone a long way to paying for the overhead lines.
VISCOUNT MASSEREENE AND FERRARD: We have written off £1,200 million of capital on the railways, and my opinion is that if they had made their own engines it would have been more like £2,000 million. To get back to the Amendment, which I strongly support, there are two great objections to Clause 48. The first is that this is the largest extension of nationalisation that this country has seen. It is an extension through many diverse activities and it is being brought in through this Bill in a rather underhanded way. Subsection (2)(a) gives authority to manufacture anything. Paragraph (b) gives authority to enter into the retail trade. It would even be possible to set up a hairdresser's shop and sell Brylcreem.
The authority appears to be unlimited. We all know that a large part of the present financial difficulties of the economy is due to Government expenditure. If the Government propose to embark on this extension of nationalisation, people abroad who have lent us £3,000 million, are not going to be very happy. It seems to me to be madness in the present state of the British
140
economy. The Government appear to have a fetish about public ownership at any cost, irrespective of whether it may completely ruin the economy and destroy the standard of living of the people. As I have often said before in your Lordships' Chamber, I object to the Government's entering into the various aspects of private industry and doing so at the expense of the taxpayer.
What on earth is the point? I have said ad nauseam that the Government get the major part of the profit of private industry by taxation, without taking any risk—road taxation is an example. Why should they go into the garage business, the petrol business, the machine shop business or any other such form of activity? The noble Lord, Lord Balfour of Inchrye, referred to the word in subsection (2)(a), that the authority could do anything which might be done "advantageously". Why "advantageously"? The point is profitability. It may be advantageously no doubt to the authority, but the word I should like to see is "profitably"—with profit and efficiency. I cannot condemn this clause too strongly, because it is unfair competition. If nationalisation is to be extended so largely, it ought to be by a special Bill. I do not believe the public really understand what is happening about this clause. With these words I will sit down, but I must say that I deplore the whole procedure regarding this clause.
LORD SHEPHERD: I wonder whether I could intervene for a moment? Perhaps I may help to put the Committee out of their misery. I am not sure how far the last speech helped the case of the noble Lord, Lord Nugent of Guildford, who made a cogent and in some ways philosophical speech. I am bound to say that some of the other speeches have tended to take us into cloud cuckoo-land. Certainly the noble Viscount seems to have nationalisation as a permanent midnight dream—if the noble Viscount dreams.
In view of the lateness of the hour, I should like to bring the Committee back to a sense of reality. I do not think that there is any dispute, at least between the two Front Benches, about the fact that we have a mixed economy. I would agree with the noble Lord, Lord Nugent of Guildford, when he said that

141
private industry is the key to our industrial future. However, I am sure he would agree that private industry depends and must continue to depend on the nationalised industries. It might well be that some of the nationalised industries have not done so well in terms of profit and loss account as some of us would have expected, but it is true that the major nationalised industries took over industries which were in a very bad way, and in a bad way throughout the world. But they are essential to our economy.
I am sure that the noble Lord, Lord Nugent of Guildford, would agree, having taken the greatest interest in the railways, that the railways can show a higher increase in productivity than perhaps any other industry in this country. It has seen a remarkable reduction in manpower, yet carries about the same amount of freight. I agree with the noble Lord that we need to see a greater increase in productivity but that takes time as we are dealing with human nature. I decry the noble Lord's "snide" remarks about the nationalised industries in general. I think he should consider what has been done in the coal industry, where we have seen a major change. Only a nationalised industry could have done this. I am sure that the Committee would commend all those who have been in command of the coal industry on what has been done in recent years.
I think that the noble Lord, Lord St. Helens, was right. This clause shows a fundamental cleavage between the two Parties. We fought about it in 1964, and I am prepared to read what we said in our 1964 Manifesto. I am prepared, also, to read the 1966 Manifesto, when we said we should seek to find a greater diversification among the nationalised industries so that they should have a greater share in the national activity. But could we no' now consider the situation that arose from Section 13 of the 1962 Act? That allows the authorities to manufacture for their own business or for that of any other nationalised transport undertaking; but they may not manufacture for outside customers. Just consider what I can only call the stupidity which arises because of that limitation. First of all, the Boards are unable to do many things that they are equipped to do and which it would be perfectly sen-
142
sible to allow them to do. For example, they cannot manufacture replacement parts for equipment which they have previously disposed of. In other words, if they have. surplus equipment and they sell it—and nobody has said that they should not sell it—even though they manufacture the replacement part, they are not permitted to sell it to the person who bought the equipment front them. Surely, that is the height of stupidity.
They cannot refuel, wash or provide any services for any outside vehicle which calls at one of their establishments on business. That is not particularly efficient. They cannot supply food which they have processed in their own canteens to any other person's business. The Railways Board cannot enter new or expanding outside markets for containers. And we know that the British Railways Board is one of the leading manufacturers, one of the major developers, in this new exciting method of transport. At the moment, they can manufacture for themselves, but all that they know and all that they can do is not to be available for the nation as a whole. That is the present position.
Arising out of the Act which the noble Viscount, Lord Mills, took through this House, we have spent some £16 million in the British Railway workshops on extensive facilities for the production of a wide range of castings, stampings, pressings and machine components. I suggest that it would be unrealistic, having invested that large sum of money, that we should not use those assets to the maximum. Surely, this is the issue: that if we have invested public money (and I do not see any difference between public money that has arisen through the collection of taxes or by savings and the personal savings put into what is called the private sector; it is all capital; it is all savings that have arisen from the national activity) we should utilise it to the maximum. If we have these assets is it not right and sensible that we should use them to the full?
I would say the reverse. Would it not be utterly scandalous if we had assets standing by completely idle for weeks and months, with men who are skilled in a particular operation being put into the unemployment queue, merely because we have a statutory provision on State capital and the method in which that

143
State capital can be used? I suspect that there are many more businessmen sitting on the Benches opposite than on this side, but I cannot believe that any noble Lords who are in business would accept the philosophy of what is being put to us this evening: that you have assets and do not use those assets to the full. I do not believe that that case stands up.
But I do accept the matter that exercises many noble Lords and the Conservative Party directly: that these assets of these very large organisations could be used to the detriment of some small private company. I do not deny that certain provisions in this Bill may have an effect on some small private organisation. But in terms of the national wellbeing and national development this happens from time to time. It was noble Lords opposite—and they take a great pride in this—who brought the Resale Price Maintenance Bill through your Lordships' House and through another place. It caused great difficulty within the political Party opposite. In fact, I believe that on one occasion in the Committee stage they had a majority of one, but here was an effort to bring about greater competition in the country and anyone who has any knowledge (shall we say?) of the small shop that sells confectionery and cigarettes knows the effect of the competitive strength of the bigger stores and the chain stores upon the small shopkeeper, which is most marked. But in terms of increased efficiency, is it to be said that noble Lords opposite were wrong to bring in resale price maintenance? I think noble Lords opposite were quite right in what they did; my only objection was that they did not do it many years earlier.
I accept that there must be some safeguards in this matter, and I would commend to the noble Viscount, Lord Massereene and Ferrard—I do not know whether he has read anything other than Clause 48 of the Bill—to read subsection (3), which says that an authority shall not engage in new activities unless they are satisfied that they can do so without detriment to their main duties. In other words, the authority cannot undertake any form of activity that is to the detriment of their main duties. Subsection (4) requires the authorities to submit to the Minister for approval from time to time proposals as to the manner in which
144
activities are to be carried out under existing manufacturing powers authorised by Section 13 of the 1962 Act or under the new powers of Clause 48(2), for manufacture, repair and sale to outside customers.
Subsection (5) says that the Minister shall approve proposals, subject to modifications and conditions. In giving his approval the Minister may make modifications or conditions, and he may direct a discontinuance of activities. Subsection (5) also requires the Minister to publish proposals approved by him and to send these to the Confederation of British Industry and to the Trades Union Congress. In other words, proposals that have been approved will be made available to the C.B.I. and the T.U.C. and any other interested party, and if there is any suspicion of unfair trading, action can be taken. Subsection (7) requires that the authorities shall act as if they were a company engaged in a commercial enterprise when carrying on activities under the new powers of subsection (2). All those activities of the Boards in their new field, whatever it may be, must be carried on as commercial enterprises.
The main development on the passage of this Bill into an Act will be the railway workshops. Here that part of the Railways Board is to be set up as a separate company with separate accounts. It will be treated as any other public company, and therefore there will be no question of this company's being able to operate unfairly. Subsection (8) empowers the Minister to direct disclosure of information in annual reports. I think the noble Lord, Lord Nugent, and also the noble Lord, Lord Windlesham, would agree that the report and accounts of the public bodies make infinitely greater disclosures than the type of reports that I see in the financial Press or any of the accounts which I receive from those companies in which I am lucky enough to have some shares. A great deal of information is contained in these reports, and in the case of the railway workshops I have not the slightest shadow of doubt that the same amount of information will be made available.
Therefore, I hope the Committee will accept that we are not embarking here on a major nationalisation Act, because that is not so. We believe that the State organisations have assets, which from

145
time to time are not fully used. We believe also that there are assets which could be developed. The organisations have new skills available. I think it would be wrong to deny this opportunity to any company that has knowledge, skills, and something to exploit from some development and research that it has done. This country can advance only if we develop these skills. Clearly the noble Lords opposite will say, "The private sector can do it"—but can we really afford to say that, if the State sector has something to offer, some skill or some new knowledge from research, it should not play its part, not only in terms of our industrial development but also particularly in the field of exports?
There is a balance. We want to see the development of the whole of our industry, a greater use of our assets, whether private or public. You cannot get this by putting some statutory and rigid curb either upon one sector or upon the other. On the other hand, we have sought to meet, and I believe we have met, most of the, fears that were expressed in the other place—at least the fears that could be met by the various provisions which are in the Bill and which ensure that the State industries should not have an unfair advantage and that they should operate commercially. I say to the noble Lord, Lord Nugent, that of all the Amendments before us there is one—Amendment 137, which was discussed in another place—where we certainly can meet the principle that lies behind it. This Amendment certainly would reduce some of the fears of the noble Lord, Lord Nugent, but it would need to be redrafted in terms of the clause as a whole. All the Amendments we have here, except Amendment 137, are too restrictive; they all seek an end which ultimately cannot help the national well being or the development of our State industries. I hope this House, for once, will cease to regard the State industries as being beyond the Pale. They are an essential part of our economy, and I wish to heaven we could get some support and some encouragement from noble Lords opposite.
VISCOUNT DE L'ISLE: Listening to the noble Lord I had the sense that I was back in the House twenty years ago and I woke up and found Lord Shepherd still speaking. By first of all Providence
146
and, secondly, heredity, he is the second Lord Shepherd, and he speaks with the same facility as his revered father. 'There are some differences in the arguments he advances. I think there is less primitive faith in the power of nationalisation per se and perhaps a greater understanding of the problems facing the nationalised industries. But surely, trying to divorce it from too partisan a view on either side, this is to a certain extent a matter of accounting. We are not adopting in our arguments the same methods of accounting. I have had some experience of private industry.
It is always a bore to talk about one's experience. Perhaps in this House one is allowed to do so if one is not too long, and I see the noble Lord looking at the clock. There is always a tendency in industrial endeavours of all kinds to build up empires. It takes place in private enterprise and it takes place in nationalised industry.
In private industry, the profit and loss account, or a percipient manager, looks through the whole organisation and sees upon which part there is not a profit yield. Sometimes there are a great many concealed losses in these organisations. They are concealed because departmental managers, the chairmen of subsidiary companies, use exactly the same arguments the noble Lord has employed—we have got the assets and we must use them. It ignores how we got the assets, whether they were properly acquired, whether they might be sold with advantage. Sometimes, rather than use the asset it is better to sell it because that means that the rest of the assets can be more economically employed.
I have not the capacity, knowledge, or memory to quote, as the noble Lord, Lord Popplewell, did so fluently, the losses and gains of the nationalised industries. I think it is a matter of common knowledge among all Parties that they have not been singularly successful. I would advance one reason for that, and that is that the assets which they own have not been properly exploited. Before nationalised industries have a right to claim on the national finances. I think they should certainly prove that they would use what they have got more profitably.
I would join issue with the noble Lord on one point. There is a very great difference between capital subscribed

147
individually and voluntarily to an enterprise, and capital provided by the State from the taxpayer. The reason is that those who get the compulsory capital are not usually those who have to find a profit on it, and the discipline, as the noble Lord, Lord Nugent has so amply pointed out, is not the same. I am afraid the subsections which the noble Lord has quoted in order to reassure us that all the people of good will and knowledge, from the Minister downwards, will see that the compulsorily levied capital will be properly and fully employed, do not reassure me. Without wishing to be partisan, I will support Lord Nugent in his Amendment, because I believe that in the national interest all our national assets should be used to the maximum, and I do not think this clause will produce that effect.
LORD NUGENT OF GUILDFORD: May I thank the noble Lord, Lord Shepherd, for answering the debate from his side of the Committee. I think this is his maiden speech on the Committee stage and he seems to be making a habit of coming in for Second Reading. We enjoyed his speech, and as my noble friend has just said, it must have been reminiscent of many in the past. May I say this to the noble Lord, Lord Shepherd, who, had a "crack" at my noble friends behind me, saying that they seemed to be in Cloud Cuckoo-land. I rather wondered whether he had heard his noble friend Lord Popplewell. If he did not, I suggest he reads his speech to-morrow and he will find it is a fairyland few other people live in.
The noble Lord in answering the debate dealt effectively with the problem of marginal production. There is a point there, and the 1962 Act probably did not completely solve it. But this Clause 48 goes miles beyond that and it is completely unacceptable. I would be willing to look at something on the lines I indicated to start with, but that is the absolute maximum, and the safeguards the noble Lord mentioned really are not effective. They are all in the hands of the Minister and their implementation depends on who the Minister is. If it is a Minister who wants a big extension of public ownership, as the previous Minister did, no doubt we shall get it.
148
We feel this should not be done unless there is some very special reason.
The noble Lord referred to the Tory's belief in competition and R.P.M. This does not work both ways. Speaking of the rail workshops, this is what happens: there has not been an order to the one remaining firm of coach and loco builders, Metropolitan Cammell, Laird, since 1961. They have tendered regularly for both locos and for carriages, but in the whole of that time they have not had one single order from British Railways. This simply is not competition, and when noble Lords say that there ought to be free competition with the spare resources of the nationalised industries' subsidiaries in the outside world, it is not the competition that they themselves allow when private industry tries to compete back. The noble Lord is not on good ground there.
But to come to the final point with which my noble friend Lord De L'Isle dealt, I thought, so effectively, the question of financial discipline, this is the major problem of the nationalised industries. It is a problem for noble Lords opposite when they are governing and a problem for noble Lords on this side when they are governing. This is the particular problem for which we simply have no answer. But the answer that we have for the time being is, for heaven's sake! do not have any more nationalised industries until we do know the answer. We simply cannot afford to expand further in this respect. The noble Lord has really failed to answer that point. I gather from the noble Lord that he is not willing to accept our whole range of Amendments, which hang together, though I am glad to hear that there was one little bit that he liked. In the circumstances, I think the simplest thing to do is, by leave of the Committee, to withdraw my Amendments and then to move that we leave out Clause 48.
LORD BEAUMONT OF WHITLEY: To suit the convenience of the Committee we have put all our Amendments together in this debate. My noble friends and I have some Amendments. What I wish to say is that we also are not satisfied with the reply of the Government. We were pleased that they were prepared to accept Amendment No. 137, which I think I am right in saying was a Liberal

149
Amendment in another place. But it does not go far enough, and we also intend not to persist in our Amendments on this clause and to vote with the Conservative Party.
Amendment, by leave, withdrawn.
Resolved in the negative, and Clause 48 disagreed to accordingly.
House resumed.
9.54 p.m.
On Question, Whether Clause 48 shall stand part of the Bill?
Their Lordships divided: Contents, 44; Not-Contents, 135.

CONTENTS

Addison, V.

Hankey, L.

Raglan, L.

Beswick, L.

Henderson, L.

Ritchie-Calder, L.

Blyton, L.

Hill of Wivenhoe, L.

Rowley, L.

Bowles, L.

Hilton of Upton, L. [Teller.]

St. Davids, V.

Brockway, L.

Hirshfield, L.

Samuel, V.

Caradon, L.

Hughes, L.

Serota, Bs.

Carron, L.

Iddesleigh, E.

Shackleton, L.

Chalfont, L.

Kennet, L.

Shepherd, L.

Champion, L.

Longford, E.

Sorensen, L.

Collison, L.

Maelor, L.

Strabolgi, L.

Crook, L.

Milner of Leeds, L.

Taylor of Mansfield, L.

Gardiner, L. (L. Chancellor.)

Peddie, L.

Walston, L.

Garnsworthy, L.

Phillips, Bs. [Teller.]

Wells-Pestell, L.

Hall, V.

Plummer, Bs.

Winterbottom, L.

Popplewell, L.

Wootton of Abinger, Bs.

NOT-CONTENTS

Aberdare, L.

Denham, L.

Mountevans, L.

Aberdeen and Temair, M.

Dilhorne, V.

Mowbray and Stourton, L.

Abinger, L.

Drumalbyn, L.

Newton, L.

Ailwyn, L.

Eccles, V.

Nugent of Guildford, L.

Albemarle, E.

Ellenborough, L.

Oakshott, L.

Alport, L.

Erroll of Hale, L.

Penrhyn, L.

Amherst of Hackney, L.

Falkland, V.

Poole, L.

Amory, V.

Falmouth, V.

Powis, E.

Atholl, D.

Ferrers, E.

Rankeillour, L.

Auckland, L.

Ferrier, L.

Rathcavan, L.

Audley, Bs.

Fisher, L.

Redesdale, L.

Balfour of Inchrye, L.

Foley, L.

Redmayne, L.

Barnard, L.

Fraser of Lonsdale, L.

Rockley, L.

Barnby, L.

Glentanar, L.

Rootes, L.

Beauchamp, E.

Goschen, V. [Teller.]

St. Aldwyn, E.

Beaumont of Whilley, L. [Teller.]

Gray, L.

St. Helens, L.

Greenway, L.

St. Oswald, L.

Belstead, L.

Grenfell, L.

Salisbury, M.

Bethell, L.

Grimston of Westbury, L.

Sandford, L.

Bledisloe, V.

Hanworth, V.

Sandys, L.

Bolton, L.

Hawke, L.

Savile, L.

Boston, L.

Horsbrugh, Bs.

Sempill, Ly.

Boyd of Merton, V.

Howe, E.

Simon, V.

Bradford, E.

Ilford, L.

Sinclair of Cleeve, L.

Bridgeman, V.

Inglewood, L.

Somerleyton, L.

Brooke of Cumnor, L.

Jessel, L.

Somers, L.

Brooke of Ystradfellte, Bs.

Killearn, L.

Stamp, L.

Buckton, L.

Kilmany, L.

Strange of Knokin, Bs.

Burnham, L.

Kinnoull, E.

Strathclyde, L.

Burton, L.

Latymer, L.

Stuart of Findhorn, V.

Carrington, L.

Lindsey and Abingdon, E.

Swinton, E.

Chelmer, L.

Lloyd, L.

Templemore, L.

Coleraine, L.

Lothian, M.

Terrington, L.

Colgrain, L.

Lucas of Chilworth, L.

Teviot, L.

Conesford, L.

McCorquodale of Newton, L.

Teynham, L.

Cork and Orrery, E.

Margadale, L.

Thurlow, L.

Cottesloe, L.

Massereene and Ferrard, V.

Trefgarne, L.

Craigavon, V.

Merrivale, L.

Verulam, E.

Craigmyle, L.

Mersey, V.

Vestey, L.

Cranbrook, E.

Mills, V.

Vivian, L.

Cromartie, E.

Milverton, L.

Wade, L.

Cullen of Ashbourne, L.

Molson, L.

Wakefield of Kendal, L.

Daventry, V.

Monckton of Brenchley, V.

Ward of Witley, V.

De La Warr, E.

Monk Bretton, L.

Watkinson, V.

De L'Isle, V.

Mottistone, L.

Windlesham, L.

Wolverton, L.

  REBUILDING OF SWISS EMBASSY
  REBUILDING OF SWISS EMBASSY