Sitting of 3 July 1968

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

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

1. Customs Duties (Dumping and Subsidies) Amendment Act, 1968.

2. Agriculture (Miscellaneous Provisions) Act, 1968.

3. Water Resources Act, 1968.

4. Maintenance Orders Act, 1968.

5. Education (No. 2) Act, 1968.

6. Sale of Venison (Scotland) Act, 1968.

7. Gas and Electricity Act, 1968.

8. Family Allowances and National Insurance Act, 1968.

9. Countryside Act, 1968.

10. Thames Valley Water Act, 1968.

11. Saint George, Botolph Lane, Churchyard Act, 1968.

12. Birmingham Corporation Act, 1968.

13. University of Wales Institute of Science and Technology Act, 1968.

14. London Transport Act, 1968.

15. Felixstowe Dock and Railway Act, 1968.

16. Durban Navigation Collieries Act, 1968.

17. Saint James and Saint Paul, Plumstead Act, 1968.

PRIVATE BUSINESS
SOUTH AFRICAN BREWERIES BILL [Lords]
As amended, to be considered Tomorrow.

ORAL ANSWERS TO QUESTIONS
  SCOTLAND

    Teachers (Promotion Procedure)
    Mr. Nobleasked the Secretary of State for Scotland what representations he has received about the factors affecting the promotion of school teachers in certain local authority areas in Scotland; what action he is taking; and if he will make a statement.
    The Under-Secretary of State for Scotland (Mr. Bruce Millan): My right hon. Friend is seeking comments from education authorities on recent representations by the Educational Institute of Scotland to the effect that very few authorities were following the recommendations about promotion procedure contained in the Report "Relations between Education Authorities and Teachers" published in 1962.
    Mr. Noble: Will the Under-Secretary make clear to the House and to local authorities that the aspect of the Report which said that in certain local authorities promotion went only to people with the correct political background is against the policy which we would all wish for education in Scotland?
    Mr. Millan: I am not sure that the Report said that, but it laid down that there should be certain promotion procedures. The complaint is that the procedures are not always carried out and, as I say, we are already in touch with the education authorities about this.

    Royal Commission on Local Government
    Mr. Nobleasked the Secretary of State for Scotland when he expects to receive the report of the Royal Commission on Local Government in Scotland; and when he expects it to be published.
    The Minister of State, Scottish Office (Dr. J. Dickson Mabon): My right hon. Friend hopes to receive the report by the end of the year, and intends to publish it as soon as possible thereafter.
    Mr. Noble: While thanking the Minister of State for his reply, may I ask

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    him to bear in mind—I am sure he will —that the report will be of great interest to everybody in Scotland, and that there should be the minimum delay before hon. Members and others see it.
    Dr. Mabon: Yes, I quite accept that. The Government's view is that this will help us in our thinking about the efficient delegation of further powers to local authorities. We are all searching for the kind of devolution that will encourage the fullest participation of the public in local government so that we have authorities with teeth and strength.
    Mr. Hector Hughes: Since important educational and industrial developments have taken place since the Commission was appointed, will the Minister take such steps as are available to him to see that the report when it comes out is up to date?
    Dr. Mabon: Yes, Sir. I am certain that the Royal Commission will be aware of all the changes there have been since 1966.

    Nurses and Midwives (Pay)
    Mr. William Hamiltonasked the Secretary of State for Scotland what representations he has received criticising the salary proposals contained in Report Number 60 of the National Board for Prices and Incomes on the Pay of Nurses and Midwives in the National Health Service; and what steps he plans to take to remedy the anomalies contained within the Report's recommendations.
    Mr. Millan: I would refer to the reply which my right hon. Friend gave to my hon. Friend the Member for Coatbridge and Airdrie (Mr. Dempsey) on 27th June.—[Vol. 767, c. 122–123.]
    Mr. Hamilton: Will my hon. Friend bring his Answer, whatever it was, up to date, and will he say whether he has had representations from organisations representing nurses on the career structure and certain anomalies in relation to nursing tutors, as there is a good deal of concern among nurses, both individually and collectively?
    Mr. Millan: The matter was brought up to date by the debate on Monday of this week, and I have nothing to add to
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    what my right hon. Friend the Minister of Health said then. This matter has been exhaustively considered.

    Aluminium Smelter
    Mr. William Hamiltonasked the Secretary of State for Scotland what is the estimated date on which the aluminium smelter is expected to be in full operation; whether he is satisfied that sufficient skilled labour will be available to man the project; and if he will make a statement.
    Dr. Dickson Mabon: Discussions with the British Aluminium Company are still proceeding. I have no reason to think that the supply of skilled labour would prove difficult.
    Mr. Hamilton: Will my hon. Friend say what precisely the delays are now and how soon they will be resolved. One recognises the difficulties, but however difficult it may be, it is time we had a decision one way or the other. Will he say how many jobs would be involved in the event of a smelter being sited in Scotland and how the number would compare with the number of jobs created by Rio Tinto and the others?
    Dr. Mabon: I agree that these matters are quite complex. The discussions have been going on in strict confidence, and it would not be possible for the Government to break that confidence. Therefore, I cannot answer the first part of the question. In reply to the second part of the question, the figure given by the British Aluminium Company is 600; in respect of Rio Tinto-Zinc the figure is 700 and in respect of Alcan the figure is 550, possibly rising to a higher figure later.
    Mr. G. Campbell: Can the Minister of State even give an estimate of the date on which a firm announcement can be made about this? Did not the Government underestimate all the factors involved, including the reactions of E.F.T.A., and has not the Government's bungling caused a great deal of unnecessary anxiety in the areas concerned?
    Dr. Mabon: I do not accept that a large project involving £70 million of investment and operating to virtually the end of the century is a simple matter which can be answered swiftly. I do not

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    accept the last two points which the hon. Gentleman has made. As for the first part of his supplementary question, the answer is, no, Sir.
    Mr. Brewis: Has the Minister of State yet resolved the E.F.T.A. difficulties, and would it not have been better if the Government had not changed their investment grant system, which is the only reason why E.F.T.A. is objecting?
    Dr. Mabon: I should prefer to await the statement which is to be made shortly.
    Mr. Alasdair Mackenzieasked the Secretary of State for Scotland if he will now make a statement on the siting of an aluminium smelter at Invergordon.
    Mr. Monroasked the Secretary of State for Scotland if he will now make a statement on the siting of an aluminium smelter in Scotland.
    Dr. Dickson Mabon: I am unable at present to add to the reply I gave to the hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor) on 17th June.—[Vol. 766, c. 102.]
    Mr. Mackenzie: Is the Minister aware that the delay in announcing the project is causing very serious doubts about the sincerity of the Government's intentions towards it? Will he assure the House now that he will make a definite decision about the Invergordon project before the beginning of the Summer Recess?
    Dr. Mabon: I know that this is causing concern, but I do not accept that it casts doubts on the Government's sincerity, as I hope will become clear when the matter is explained fully to the House at a later stage. I hope that that will be before the end of the Session.
    Mr. Monro: As the Alcan site could be decided in May, why has it taken so much longer to come to a final decision about the British Aluminium site? Is it a question of the electricity supply, or is another site being considered?
    Dr. Mabon: The hon. Gentleman knows that I cannot answer that question.
    Mr. Steele: Is my hon. Friend aware of the dangers to agriculture because of the fall-out of dust from such an installation? May we have assurances that
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    before planning permission is given any company which succeeds in going ahead with the project will give all the assurances necessary to ensure that there will be no nuisance of that kind?
    Dr. Mabon: I would direct my hon. Friend's attention to the public inquiry into the amendment to the Ross and Cromarty development plan. He should read it, and I am sure that he will find the assurances he seeks in it.
    Mr. Manuel: Does my hon. Friend recognise that it is now time hon. Members were told the position and why the delay is so great? Is it because of difficulties with our E.F.T.A. partners? If so, we should be told bluntly and told what the obstacles are, thus relieving many people of the need to give wrong reasons for the delay.
    Dr. Mabon: I sympathise with my hon. Friend, and I should love to tell the House everything that is going on, but I could do so only at risk to the project and, therefore, I must not yield to that temptation.
    Mr. Grimond: Can the Minister give us the latest statistics available to the Scottish Office about the saving in monetary terms of imports which will result from the setting up of the smelter?
    Dr. Mabon: No, Sir, not without notice. I should have to go into that a little more deeply.

    Seed Testing Work, East Craigs
    Mr. Stodartasked the Secretary of State for Scotland what plans he has made for the continuation of the seed testing work done at East Craigs, Corstorphine, in the light of the approval which he has given to the recommendation that the land at East Craigs should be developed for building.
    The Under-Secretary of State for Scotland (Mr. Norman Buchan): The buildings at East Craigs will continue to fulfil their present functions including those of seed testing. Field work will be carried out on other state-owned land which will more amply meet the needs of the station.
    Mr. Stodart: Can the hon. Gentleman give us indication where that is to take place? Can he say how he managed to

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    ignore the statement made in the report that East Craigs is of great scientific importance to the nation and should not be disturbed under any circumstances?
    Mr. Buchan: The alternative place is only 2½ miles away. It is attached to Gogarburn Hospital. The existing land was too small for their needs and, to expand, we have moved to a large area, where there are 200 acres instead of 90 acres, which again fulfils the needs put forward in the report.

    Farms (Net Incomes)
    Mr. Stodartasked the Secretary of State for Scotland whether the figures given in Appendix IV of Command Paper No. 3558, showing net incomes on dairy and cropping farms in England and Wales and Scotland, respectively, are calculated on a precisely similar basis.
    Mr. Buchan: The accounting procedures are precisely similar, but the systems of farming designated as dairy and cropping differ to some extent because of differing natural conditions in the two countries.
    Mr. Stodart: In view of the fact that Scottish farmers are recognised to be the most efficient not only in this island but in the world, can the hon. Gentleman say why the net income of a Scottish cropping farm has been only £7 per acre compared with £13 in England? Are the climatic differences to which he refers the differences in the political climate which have caused the income to drop to one-half since 1964?
    Mr. Buchan: With his own wide knowledge of farming, the hon. Gentleman should know the problems involved. Climatic, soil and other conditions are involved here, but certainly not political ones. As it happens, the relative positions of incomes from farming as between England and Scotland are improving in our favour.

    Prescription Charges
    Mr. Dewarasked the Secretary of State for Scotland what he estimates the cost to be of exempting from the payment of prescription charges those women be-between the age of 60 and 65 years who are in receipt of a retirement pension; and how many persons would be affected.
    Mr. Millan: It is not possible to provide an estimate of the cost of exempting this section of the population. The latest available figure for the number of women in Scotland between the ages of 60 and 65 and in receipt of retirement pension is 68,300.
    Mr. Dewar: Would my hon. Friend not accept that if a woman does not decide at 60 to opt to retire on pension, she may be in the same financial position as a man or woman over 65 and may be in the same health position, and that if he is not prepared to reconsider the matter, we are creating an underprivileged section of old age pensioners?
    Mr. Millan: I do not think so. If my hon. Friend applies the test of income, there are separate grounds for exemption on the basis of income. Comparing men and women between 60 and 65 is rather a different matter. As has been pointed out on more than one occasion, there is no evidence that, in that age group, the number of prescriptions required by women is greater than that required by men. Indeed, the evidence rather points in the opposite direction.
    Mr. MacArthur: Will the hon. Gentleman consider the difficulties faced by elderly people in remote areas in following the procedures required of them now? Will he bear in mind that there is a need for flexibility to meet the requirements of people living some way away from a chemist in the local town?
    Mr. Millan: I am not sure what these difficulties are which are peculiar to people living in remoter areas. If the hon. Gentleman likes to send me details, I shall look at them.

    Approved School Places
    Mr. Dewarasked the Secretary of State for Scotland what is the number of approved school places presently available in Scotland; and what percentage increase he expects in the next three years.
    Mr. Millan: There are 1,820 places available at present and an increase of 158 places or 8·7 per cent. is expected in the next three years.
    Mr. Dewar: While accepting those figures, will not my hon. Friend accept

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    the public's willingness to support the Government's very right emphasis on the proper treatment of offenders as the answer to the real crime problem is being seriously undermined by constant reports from the courts about the unavailability of residential accommodation places for young offenders, and, if this position is not soon put right, we will be in real difficulties?
    Mr. Millan: The matter is slightly more complicated than that. It is important that we have the right kind of residential accommodation required, but we have also to take into account whether in every circumstance children being sent to residential accommodation really need the kind of approved school provision that we have. A rather disturbing feature about Scotland is the emphasis on approved school accommodation that we have which is rather greater than they have south of the border. This factor requires examination as well as the provision of more places. But on the later point, we are providing additional places now.

    Fauldhead Colliery, Kirkconnel
    Mr. Monroasked the Secretary of State for Scotland what consultations he has had with the National Coal Board concerning the retention of Fauldhead Colliery, Kirkconnel
    Dr. Dickson Mabon: In accordance with the arrangements set out in paragraph 114 of the White Paper on Fuel Policy, my Department maintains continuing liaison with the National Coal Board in Scotland about colliery closures. These arrangements have naturally covered Fauldhead Colliery which the Board now intends to close on 19th July.
    Mr. Monro: As 600 men will be displaced by this closure, may I ask whether the Secretary of State recommended that the colliery should be kept open under Clause 5 until industry had been attracted to the advance factory at Sanquhar?
    Dr. Mabon: The hon. Gentleman received a letter from the Minister of Power which is, I think, dated 14th June, in advance of the actual decision being made known to the local people, which explains the reason why the Government have taken this view. Essentially, it is in the
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    long-term interests of the men concerned —and he and I met them as recently as last February—that they take advantage of the redeployment in mines nearby and of the developments at Cumnock and, I hope, at Sanquhar later.
    Mr. Emrys Hughes: Is my hon. Friend aware that miners in the area are grateful for the work being done at the advance factory in the Cumnock area? If that could be expanded, work could be found for the miners displaced at Fauldhead. Will the Minister examine those facts?
    Dr. Mabon: Yes, Sir. I know for a fact that at Cumnock developments are quite good, and I hope that they will become better. I recognise the seriousness of the position locally, and I share the disappointment over Sanquhar, but I hope that the advance factory there will be filled and perhaps another one built later.

    Imported Raw Materials
    Sir C. Osborneasked the Secretary of State for Scotland what estimate he has made of the proportion of the raw materials consumed in Scotland by industrial processes, distribution and personal consumption which is produced in Scotland; and what is the estimated cost of the imported materials.
    Dr. Dickson Mabon: I regret that no reliable estimates can be made.
    Sir C. Osborne: I regret that, too. Could the Minister say, roughly, since Scotland possesses only some low-grade and dearly-got coal, how much the standard of living of the Scottish people would have to be reduced under complete independence if they had to pay for their own imports?
    Dr. Mabon: I would not accept that premise entirely, although I quite see the point that the hon. Gentleman is trying to make. The reason why we are unable to give the information for which he asks is that we would have to calculate the value of cross-border movement because of our common market with England, Wales, Northern Ireland and perhaps even Southern Ireland. It would be a big imposition on the Government to have to undertake such a survey to prove the point.
    Mr. Hugh D. Brown: While it is not clear whether the hon. Member for Louth

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    (Sir C. Osborne) is for or against the hon. Member for Hamilton (Mrs. Ewing), surely it is time that the Government took steps to undertake a complete economic analysis to substantiate the claim which many of us make that economic separation would be disastrous?
    Dr. Mabon: I agree, but I cannot give the hon. Gentleman the information that he is asking for. I would if I could, because I think that it would substantiate his point.

    School Meals, Lanarkshire
    Mr. James Hamiltonasked the Secretary of State for Scotland how many children in Lanarkshire received school meals free in the month preceding the increased charges; how many received them in the month following the increase; and if he will make a statement.
    Mr. Millan: During the periods referred to, which include the Easter holiday, the average daily numbers of pupils receiving school meals free were 8,610 and 18,269, respectively.
    Mr. Hamilton: Is my hon. Friend aware that since the increase in the price of school meals many children requiring them do not take them? Is he aware that the increase is in children whose parents can afford to pay and are prepared to pay? Will he give the matter serious consideration?
    Mr. Millan: There has been some reduction in uptake in Lanarkshire. It is a little difficult at this early stage to know what the final results will be. That reduction has been about 10 per cent. The figures I gave in my Answer demonstrate that the new arrangements provide free meals for a very much larger percentage of the children taking meals. It is now 37 per cent. compared with 16 per cent. previously, and therefore I cannot accept my hon. Friend's criticism.

    Storm-Damaged Houses, Glasgow
    Mr. Edward M. Taylorasked the Secretary of State for Scotland when he estimates that all homes suffering from storm damage in Glasgow will be wind and watertight.
    Dr. Dickson Mabon: Glasgow Corporation aims to have all roofs adequately
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    repaired by the end of September, and we are giving it all possible help.
    Mr. Taylor: Is the Minister aware that there was a serious storm, approaching a monsoon, in Glasgow yesterday which did a great deal of damage? Can he give any indication of the amount of damage done and the extent to which it will set back the repair work?
    Dr. Mabon: No, Sir. I do not have sufficient details at present. As the hon. Gentleman knows, I am in active touch —[Interruption.]—it is impossible for me to look after everything all at once. I am waiting for the report from Glasgow. The monsoon did not affect only Glasgow. I wish that the hon. Gentleman realised that Scotland consists of more than Glasgow. We must get all the reports in before my right hon. Friend can decide whether a statement should be made to the House. I shall not answer questions off the cuff. Repair workers are having to go on to the roofs many times in the city and elsewhere to deal with such temporary setbacks. I shall know the full measure of the problem when we have our next meeting. I have been having regular meetings with the Corporation almost every week since the beginning of January.
    Mr. Galbraith: Is the Minister aware that if the estimate of having all houses finished by September turns out to be optimistic, and so houses are not wind-and water-proof by the beginning of the winter, feeling in Glasgow will be very high? In the coming months, will he apply himself to the progress made in repairs?
    Dr. Mabon: I shall continue to do what I have been doing for the past six months—trying as hard as I can to deal with the damage, not only in Glasgow but in the rest of Scotland. Of public sector houses damaged, 85 per cent. have been repaired, and 50 per cent. of private sector houses damaged have been repaired. If the hon. Gentleman is tempted to make a party point of this, he should consider the activities of some landlords.
    Mr. James Hamilton: Is my hon. Friend aware that much of the damage was the result of bad landlords in the past? Is he aware that in my constituency of Bothwell, all the houses have

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    been made wind- and water-proof, and my constituents are very grateful to the Government for their efforts?
    Dr. Mabon: I am much obliged to my hon. Friend. Hon. Members should pay attention to the fact that many landlords are trying to get repairs carried out by the Government or the local authority which should have been done before the storm.
    Mr. Noble: Does not the Minister agree that if there has been a very serious storm in Glasgow last night, while we do not expect him to give us full details, we do not accept that he should not say something off the cuff? If there is a serious situation, will he make a statement tomorrow?
    Dr. Mabon: If the situation is such as to merit a statement tomorrow, my right hon. Friend will consider it. We are in daily touch with the Corporation, and so far have not had an adverse report on this.
    Mr. Hannan: Will my hon. Friend confirm that these houses have been letting in rain and storms for a long time, long before the storm, and that it is most fortuitous that at least a storm yesterday gave hon. Members opposite reasons to ask supplementary questions?
    Dr. Mabon: If we finish repairing properties in Glasgow by the end of September, the stock of houses in Glasgow will be in better repair than they have been in for the past 40 years.

    Police
    Mr. Edward M. Taylorasked the Secretary of State for Scotland how many police officers were recruited to Scottish forces in the first six months of 1968; how many men were lost to the forces in the same period; and what was the main reason given by those who left the forces voluntarily during that period.
    Mr. Buchan: During the first six months of 1968 a total of 458 police officers—418 men and 40 women—were recruited to Scottish forces: in the same period 358 officers left—313 men and 45 women. Voluntary resignations accounted for 186 officers—151 men and 35 women: information about the reasons given for resignation is not available for this period.
    Mr. Taylor: Does the hon. Gentleman agree that the numbers of long-serving police officers leaving at present give cause for concern when we have an increase in violent crime? In view of the reasons for leaving the force given by those who left last year, can the Minister give an assurance that the greatly increased productivity, as a result of unit beat policing and other factors will be taken fully into account in the September pay review?
    Mr. Buchan: All factors will be taken fully into account. It is a cause for certain satisfaction, although I do not want to make too much of it, that the total number of police officers has increased enormously—105 of these were men—and that of those who left there has been a larger proportion because of retirement rather than resignations. Both those facts are cause for congratulations to the Government and the police authority.
    Mr. Lawson: Will my hon. Friend explain why there is so much talk about the shortage of police constables when we know that over the past 10 years the number in Glasgow alone has increased by nearly a quarter?
    Mr. Buchan: That is true. The ratio of police to population has increased enormously, as my hon. Friend said. I take it that one of the reasons for the continued anxiety about numbers is the crime situation. I am determined to push up the numbers in order to deal with that situation.
    Mr. MacArthur: Does the Minister agree that one of the best aids to the recruitment which we so much need would be for the Government to show greater understanding of the problems confronting the police in their fight against crime? Does he agree that a good start would be made if the police were given powers to search where the possession of an offensive weapon is suspected?
    Mr. Buchan: I sometimes think that I should provide the hon. Gentleman not only with that, but with a gramophone needle. We have gone over this many times in the past six months. We must try to restore confidence, which some hon. Members opposite have sapped in the City of Glasgow by the continual reference to the inadequacy of police

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    powers. There is no inadequacy of police powers. That is what we should be emphasising if we are concerned about dealing with crime rather than making political points.

    Juvenile Offenders (Remand Accommodation)
    Mr. Hannanasked the Secretary of State for Scotland what plans he has for dealing with the inadequate accommodation available for juvenile offenders remanded by the courts pending further reports.
    Mr. Millan: I would refer to the reply which my right hon. Friend gave to the hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor) on 26th June.— [Vol. 767, c. 85–86.]
    Mr. Hannan: In view of the continuing difficulties of the courts in remanding young people to appropriate accommodation before they are tried, would not my hon. Friend now consider what some of us have thought for a long time, that, except for the serious cases, many of these young people should be restored to their homes for their parents to look after them until such time as the case arises in court?
    Mr. Millan: I certainly do not think that children should be remanded in custody unless it is essential. We are increasing the provision, as my hon. Friend will see if he looks at the previous Answer, and with the provisions of the new Social Work (Scotland) Bill coming into operation for dealing with young people, there will also be a change in emphasis in the methods of dealing with them.

    Cullingworth Report
    Mr. Hannanasked the Secretary of State for Scotland if he will now announce his decisions in respect of the recommendations of the Cullingworth Report.
    Dr. Dickson Mabon: My right hon. Friend regrets that he cannot yet announce decisions.
    Mr. Hannan: While I appreciate the complexities of the contents of the Report, which are now aggravated by recent storms, may I ask my hon. Friend to give an assurance at least that the White
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    Paper will be published before we rise for the Summer Recess?
    Dr. Mabon: I appreciate my hon. Friend's concern and his point about storm damage. I know that he understands the difference between the Dennington Report, on which there has been a White Paper, and the Cullingworth Report. I cannot give an assurance, but I hope that we shall publish a White Paper before we rise for the Summer Recess.
    Mr. G. Campbell: Does the hon. Gentleman realise that, since a White Paper for England and Wales was published in April, it is very necessary to produce one soon for Scotland? Is he giving special consideration to recommendations 23 and 25 on the need for reasonable rents or for grants for repairs?
    Dr. Mabon: We are giving consideration to all the recommendations, including those mentioned by the hon. Member. However, I should not think that these were the principal recommendations of the Report as distinct from those in the Dennington Report. I should have thought that the replacement of houses was much more important. I hope that we shall be able to issue a White Paper soon.

    Local Authority Houses (Allocation)
    Mr. G. Campbellasked the Secretary of State for Scotland what action he is taking on the Kay Committee's Report on the allocation of local authority houses.
    Dr. Mabon: The Scottish Housing Advisory Committee has recently considered strong local authority objections to detailed Government control of allocation schemes, and has recommended my right hon. Friend to proceed by issuing advice to local authorities about the policy they should adopt in future. He has accepted this recommendation, and a circular wil go out as soon as possible.
    Mr. Campbell: I am glad to hear that the Government have accepted the recommendation that there should not be tight central control over this matter. As it is a subject which is of great concern to many people in Scotland, will the Secretary of State for Scotland soon give

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    an indication of the Government's views on the Committee's recommendations?
    Dr. Mabon: When the circular is published it will be seen that we have covered virtually all the 28 conclusions in the Report in one way or another. We hope that local authorities will observe the circular in the spirit in which it is issued.
    Mr. Younger: I welcome what the Minister has said about the Report, but will he bear in mind that there is perhaps no single aspect of local authority administration, in spite of the best efforts of officials, which gives more heartburn to people on housing lists? Will he ensure that when they are published his arrangements make allowances for people who have to change their homes on redeployment but cannot change their authorities at the same time?
    Dr. Mabon: As a Member of Parliament who has represented an industrial town for 13 years, I endorse the hon. Gentleman's first remark. I am only sorry that it has taken past Governments as well as the present Government so long to get there, but now that we have got there, let us hope that these two points will be met.

    Food (Production and Imports)
    Sir C. Osborneasked the Secretary of State for Scotland what proportion of the food consumed in Scotland is produced in Scotland; and what is the estimated cost of the imported food.
    Mr. Buchan: I regret that this information is not available.
    Sir C. Osborne: Why it is that the Scottish Office is so incompetent that it does not know what is happening in Scotland? This is the second Answer in which the Minister has said that he does not know what is happening. If we English Members of Parliament are to understand the validity of the demand for home rule for Scotland we are surely entitled to know whether Scotland can feed itself and earn enough money to pay for its raw materials. Why cannot we have the information?
    Mr. Buchan: One simple reason is that I am more concerned about making two blades of grass grow where one did
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    before instead of having two unproductive bureaucrats where there was one before. The Question requires statistical information, and this would involve not only the Scottish Office but other Departments. The real answer is to make sure that the Scottish resources are used to produce the required agricultural and other commodities. We are broadly self-sufficient in beef, lamb, potatoes and milk, but we have to import certain other commodities, such as cereals and butter.
    Dr. Miller: While I appreciate that my hon. Friend cannot give the figures, will he confirm that the rumour that haggis is being imported from Japan is completely without foundation?
    Mr. Buchan: I can confirm that absolutely.
    Mr. Stodart: Is not the hon. Gentleman doing his right hon. Friend less than justice? When the production figures are available from his Department together with the figures of consumption per head from the Ministry of Labour, what is the difficulty about matching the two and giving an answer of this kind?
    Mr. Buchan: The hon. Gentleman, of all hon. Members, should know the answer. We have been guided to some extent by a very fine article that he wrote in the last few months. One of the reasons is that there is no control within the United Kingdom by means of customs barriers and so on, and I hope that there never will be this kind of control. Also, there is not a direct proportional intake of various food imports into Britain as a whole. There are good reasons why it is difficult to get the figures analysed without creating an army of bureaucrats to do it.
    Mr. Willis: Is it not true that Scottish industry has better records in exports than English industry has? If so, why does the hon. Member for Louth (Sir C. Osborne) need to worry about imports of food and raw materials into Scotland? We do more than our share in paying for them.
    Mr. Buchan: I am not responsible for the worries of the hon. Member for Louth (Sir C. Osborne). It is true that in certain commodities we have a good export record—including, by the way, to England.

    Land Commission
    Mr. G. Campbellasked the Secretary of State for Scotland how much land in Scotland has been acquired by the Land Commission.
    Dr. Dickson Mabon: None as yet, but the Commission has concluded a bargain for the purchase of a site of 12 acres, and has published a draft compulsory purchase order for another site of 52 acres. Agreement has also been reached with Renfrew County Council that the Commission will acquire on its behalf about 600 acres at Erskine.
    Mr. Campbell: As the Land Commission is doing so little in Scotland, what is the point of its undertaking any operations there?
    Dr. Mabon: I am surprised that the hon. Gentleman, in view of the Answer that I have given, should have asked that. He obviously prepared his supplementary question beforehand. The first appointed day under the Act was 6th April, 1967. I have given the hon. Gentleman the facts as they are up to date. Considering that the Land Commission has had to gather together the information about the land situation in consultation with local authorities, builders and developers, I think it has done reasonably well.
    Mr. W. Baxter: Can my hon. Friend tell the House how the Land Commission is proposing to dispose of the land that it is acquiring? Will it dispose of it by highest offer, auction or gifts to builders?
    Dr. Mabon: I appreciate the point that my hon. Friend is trying to make in reference to the recent circular. I suggest that he should put down a Question about this—and then I will give more details—or write to me. The 12-acre site is for industrial development. The 52-acre site at Killearn, Stirlingshire, is primarily for private housing. The 600-acre site is for mixed private and public development, mainly private, in the new town.

    Publicly-Appointed Committees (Women Members)
    Mr. Rankinasked the Secretary of State for Scotland what representations he has received about the lack of female representation on the various ad hoc com-
    1488
    mittees appointed by him to serve in Scotland; and if he will make a statement indicating his policy on the matter.
    Dr. Dickson Mabon: I would refer my hon. Friend to the replies given to the hon. Members for North Angus and Mearns (Mr. Buchanan-Smith) and Edinburgh, South (Mr. Clark Hutchison) on 11th June, to my hon. and learned Friend the Member for Aberdeen, North (Mr. Hector Hughes) on 12th June, and to the hon. Member for Aberdeenshire, East (Mr. Wolrige-Gordon) on 26th June. —[Vol. 766, c. 32; Vol. 766 c. 238–9; Vol. 767, c. 82–3.]
    Mr. Rankin: Is it true that the number of women appointed to Ministerial posts in this Government has been greater than in any previous Parliament? Is that also true of the posts which lie in the preference of the Secretary of State for Scotland? Is my hon. Friend aware that many women's organisations in Scotland believe that the tendency which has been shown in Government appointments is not recognised in appointments made by the Secretary of State to ad hoc committees?
    Dr. Mabon: I believe that what my hon. Friend suggests about Government appointments is true, although I could not be certain. I should have to look it up. I take this opportunity, as I have done on previous occasions and in letters to individual hon. Members, to say that there is no discrimination against women in appointments referred to by my hon. Friend. We accept suggestions for appointments on the basis of equality of the sexes and without discrimination. But I take the point that some women's organisations feel that there is discrimination and I should like to do all I can to relieve them of that misunderstanding.
    Mr. Noble: Will the Minister of State make it clear that he does not accept the imputation in the supplementary question of the hon. Member for Glasgow, Govan (Mr. Rankin) that the disaster of this Government is due to the number of women members of it?
    Dr. Mabon: I deeply resent that suggestion.
    Mr. Russell Johnston: While accepting that there is probably need to evaluate female representation better, may I ask

    1489
    the hon. Gentleman whether he will assure us that he cannot accept the suggestion of a fixed proportion of female representation on ad hoc committees and that appointments will be purely on merit?
    Dr. Mabon: Exactly. There is no question of fixed proportions. People are judged on their merits. That is the real meaning of true equality of the sexes.

    Prisons, Borstals and Approved Schools
    Mr. Buchananasked the Secretary of State for Scotland what are his plans for increasing the number of places available in Her Majesty's Prisons, borstals and approved schools in Scotland.
    Mr. Buchan: This year my right hon. Friend hopes to provide 430 additional places in Scottish penal establishments, 270 in new buildings and 160 by reallocation within existing accommodation. The use of hutted camps, now under consideration, may add up to 450 places. Further plans include three new establishments, with 1,000 places, to be completed in the early 1970s.
    Two new approved schools for boys are to be provided and two others enlarged: some decline in places for girls is likely. Altogether some 158 additional places are planned in that sector for the period up to 1970.
    Mr. Buchanan: We know that my hon. Friend, because of previous inactivity, has a tremendous backlog to overtake. Are the plans being pushed forward fast enough to overtake the position before it is too late, because conditions in prisons, borstals and approved schools are getting to a dangerous stage of overcrowding?
    Mr. Buchan: I am glad my hon. Friend appreciates the position in which I find myself. The long wasted years in the 1950s have left me with a very difficult position. I feel that very strongly, as those who have visited some of our prisons will know. We are pushing ahead as fast as possible. We are awaiting the report of the public inquiry into the most publicised project, at Bishop-briggs.
    Mr. Wolrige-Gordon: Is the hon. Gentleman, aware that I regret very much the need for expansion of the number of
    1490
    places for people of this kind? What effect will this increase have on the overcrowding in many of our prisons?
    Mr. Buchan: This will depend on what happens in relation to intake. It would be difficult to predict in that connection. I hope, as we all do, that conditions will improve as a result.
    Mr. Buchananasked the Secretary of State for Scotland what proposals he has for making the conditions of service of employees in Her Majesty's Prisons, borstals and approved schools in Scotland sufficiently good to attract sufficient staff of the necessary qualifications and calibre.
    Mr. Buchan: A satisfactory level of recruitment to the prison service and approved school staffs has been maintained in recent years. The career structure of the prison service is being improved by the introduction of the grade of senior officer following the Mountbatten Report.
    Mr. Buchanan: I thank my hon. Friend for that reply and appreciate the fact that our minds are as one about the urgency of recruiting to get the type of staff required for this work.
    Mr. Buchan: Yes, Sir.

    Drug Addicts
    Mr. Brewisasked the Secretary of State for Scotland what is the present number of drug addicts known to his Department.
    Mr. Millan: The number of addicts in Scotland who have been notified to date under the Dangerous Drugs (Notification of Addicts) Regulations is 16.
    Mr. Brewis: While being very pleased that the number is so small, may I ask whether the hon. Gentleman is taking action to bring to the notice of the schools the great danger of drugs?
    Mr. Millan: This matter is under active consideration but I am glad to say that, so far, the problem is still a very minor one in Scotland. All our efforts are bent towards maintaining that position.
    Mr. Hugh D. Brown: While agreeing with the Minister of State's statement

    1491
    earlier that Glasgow is not the whole of Scotland—we accept that with our natural modesty—in all this furore and examination being made into crimes of violence, would the Scottish Office at least put the other side of the coin in the sense that drug taking is not a problem there, unlike the case in most other major cities?
    Mr. Millan: That is quite right. I hope that this point will be noted by all those concerned about the position in other directions in Scotland. At least we have managed to contain this problem.

    Police Crime Squad (Commander)
    Mr. Brewisasked the Secretary of State for Scotland when he expects that a chief officer for the Scottish police crime squad will be appointed.
    Mr. Buchan: The commander of the Scottish Crime Squad cannot be appointed until the agreement establishing the squad has been acceded to by all the parties concerned. Under the agreement the appointment will be made by a committee of chief constables subject to the approval of a committee of police authority representatives and my right hon. Friend.
    Mr. Brewis: In view of the extreme seriousness of the crime problem, will the hon. Gentleman do his best to expedite the agreement to get the squad going?
    Mr. Buchan: Yes, Sir. I take this opportunity once more of inviting those authorities which have not yet acceded to give the matter most urgent attention so that we can set up the squad as soon as possible.

    Selective Employment Tax
    Mr. Buchanan-Smithasked the Secretary of State for Scotland what further representations have been made to him regarding the refund of Selective Employment Tax to employers in hotels in certain parts of Scotland; and what reply he has made.
    Mr. Bruce-Gardyneasked the Secretary of State for Scotland what is the total number of representations which he has received to date regarding the proposed refund of Selective Employment
    1492
    Tax to employers in hotels in parts of Scotland; and how many of these representations have favoured and opposed this proposal, respectively.
    Dr. Dickson Mabon: My right hon. Friend has received 49 representations about this matter, all suggesting the inclusion of further areas in Schedule 17 of the Finance Bill. The replies sent indicated that the matter would be further considered, and the hon. Gentlemen will be aware of the Amendments to the Bill put down by my right hon. Friend the Chancellor of the Exchequer, which would include all these areas.
    Mr. Buchanan-Smith: Whilst welcoming the Government's admission of error and their attempt to rectify the anomalies in the Finance Bill since bowing to representations made from this side of the House and by hoteliers throughout Scotland, may I ask the hon. Gentleman to see whether he cannot extend the refund of the S.E.T. to restaurants as well as hotels, which would be of interest to the tourist industry?
    Dr. Mabon: The Government are open to representations on many subjects and are willing more readily to accede to them than were the previous Government. I would not agree that this change has been due to the intensity of the Opposition. Rather it has been due to the generosity of the Government. We have considered this carefully in view of the representations made and look forward to the debate we shall have later.
    Mr. Bruce-Gardyne: Pleased as we are with these belated concessions, is the hon. Gentleman aware that they only create further anomalies? Is it not outrageous that the House should be given no opportunity to discuss the way these concessions have been granted at any time during the Budget debates?
    Dr. Mabon: I am sorry that the hon. Gentleman was not able to be present to discuss the matter when it arose. No doubt he will make that clear to his constituents at the appropriate time. We have carefully considered this matter and have made substantial concessions, for which I know the hon. Gentleman has expressed gratitude.
    Mr. Steele: While welcoming my hon. Friend's remark that the Government

    1493
    are open to representations, may I ask him to note that Loch Lomond is still outwith the concessions? Can he arrange for my right hon. Friend the Secretary of State to add his name to my Amendment to the Finance Bill?
    Dr. Mabon: That point has been noted, but I do not think that my hon. Friend's suggestion can be acceded to.
    Sir F. Maclean: Can the hon. Gentleman explain the continued omission from the list of exemptions of hotels in areas served by the labour exchanges of Ardrossan, Largs and Stevenstone?
    Dr. Mabon: This is because the refunds are not being made in areas catering primarily for day trippers.
    Mr. Stodart: Is the hon. Gentleman aware that justice will not have been done until the greatest tourist city in Scotland has been included—Edinburgh?
    Dr. Mabon: I did not quite catch the name of the city.
    Mr. Bruce-Gardyne: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the reply, I beg to give notice that I shall seek to raise the matter on the Adjournment at the earliest opportunity.

    British Standard Time
    Mr. Buchanan-Smithasked the Secretary of State for Scotland what further representations he has had regarding the introduction of British Standard Time; and what reply he has sent.
    Mr. MacArthurasked the Secretary of State for Scotland what further representations he has received about the proposal to introduce British Standard Time; and what reply he has sent.
    Mr. Buchan: Since my right hon. Friend's Answer to the hon. Member for South Angus (Mr. Bruce-Gardyne) on 25th June he has received three representations against British Standard Time from the Association of County Councils, Inverkeithing Town Council and the Scottish Division of the Headmasters' Conference.
    All these representations have been acknowledged but no other reply has been sent except where information was specifically requested.—[Vol. 767, c. 66–7.]
    Mr. Buchanan-Smith: In view of the massive opposition in Scotland to the introduction of British Standard Time, even though the Bill has been steamrollered through Committee, will the Minister, even at this stage, go back to his right hon. Friend and get him to tell the Cabinet that for the sake of Scotland this proposal must be dropped now?
    Mr. Buchan: Far from being steamrollered through Committee, a substantial development has taken place in the Bill. That is to say, it has been decided that it would be better to see what are the effects in practice. It has been decided to institute a three-year experimental system. I advise the hon. Gentleman to wait to see how it works out.
    Mr. MacArthur: Is not the hon. Gentleman aware that the alleged benefit of this new system is highly questionable and that in Scotland the proposal is contrary to the wishes of the people and also totally contrary to commonsense? Will he not recognise that the only proper course left to the Government is to remove the proposal altogether and at last have some respect for the wishes of the Scottish people?
    Mr. Buchan: It depends on what is meant by the Scottish people. If the hon. Gentleman had consulted his friends in the Scottish Confederation of British Industry, he would have discovered that it was one of the bodies which approved the system, as were the Scottish T.U.C. and the Scottish Council for Development in Industry. It is not so simple as the hon. Gentleman suggests. A number of county councils in the initial stages were not opposed to the scheme. I think that it is correct to have a three-year experiment and see the result. There are certain advantages to Britain as a whole and certainly to Scotland as an exporting country, and at least we should try the system as an experiment.
    Mr. Heffer: Is my hon. Friend aware that there is concern not merely in Scotland, but in other parts of the British Isles? Is he aware that there is deep concern in the building industry among both employers and operatives? Can he make representations to his right hon. Friends to have the experimental period reduced from three years to one year, as I suggested on Second Reading.
    Mr. Buchan: I recognise that this is a problem which is not confined to North of the Border. The voice of Liverpool has now been expressed and I am glad to hear that there is this broadening out of what is sometimes a parochial dispute. However, a one-year period would not give us the opportunity to decide the merits or otherwise of the scheme. I know the North. I was brought up in the Orkneys and I went to school in the dark and came home in the dark—[HON. MEMBERS: "He is still in the dark."]—for many months of the winter. [Interruption.] My hon. Friend has stolen my punchline. I was about to say that they have not yet seen the light down here.
    Mr. Adam Hunter: Is my hon. Friend aware that Fife County Council protested some months ago against the introduction of British standard Time, but has now waived its protest and is prepared to give the experiment a one-year trial before taking any further action?
    Mr. Buchan: I am glad to have that point brought forward. People are beginning to consider this seriously and the next move will be when we have seen it working in practice.

    Educational Development Programme
    Mr. MacArthurasked the Secretary of State for Scotland if he will make an early statement setting out the details of the educational development programme necessary to meet the requirements of 1972 when the school leaving age is to be raised.
    Mr. Milton: The detailed preparations for the raising of the school leaving age are matters for education authorities and vary from area to area. So far as the Government's policy is concerned I would refer the hon. Gentleman to the reply given to my hon. Friend the Member for Glasgow, Govan (Mr. Rankin) on 6th March.—[Vol. 760, c. 86–7.]
    Mr. MacArthur: Will not the hon. Gentleman recognise, however, that there is urgent need for a clear statement from the Government? Will he give an undertaking that such a statement will be made before the end of this year in order to remove the confusion and lack of confidence created by the Govern-
    1496
    ment's incessant and contradictory changes in education policy? Does he not consider that the raising of the school leaving age will be jeopardised yet again unless a definite and clear long-term plan is announced and adhered to?
    Mr. Speaker: Long questions and long answers mean fewer questions and fewer answers.
    Mr. Millan: That question was not only long, but highly inaccurate and extremely unspecific. We have made our position on school building, on the curriculum and on the supply of teachers clear on many occasions and we shall continue to reaffirm those points as occasion requires.
    Mr. Maclennan: Can my hon. Friend say whether the Sutherland education authority's proposal for the downgrading of Dornoch Academy, which his right hon. Friend recently approved, took into consideration the expansion of places necessary in 1972, and is he aware of the great concern felt in the area about this move?
    Mr. Millan: I am aware of the controversy which there has been about this proposal, but as I understand the position it will certainly be possible to provide the places which are required in good time in the schools in the area both at Dornoch and Golspie.
    Mr. MacArthur: On a point of order. In view of the unsatisfactory nature of that reply, I beg to give notice that I shall raise the matter on the Adjournment at the earliest opportunity.

    North-East Scotland
    Mr. W. H. K. Bakerasked the Secretary of State for Scotland when he now expects to receive the report of Professor Gaskin on the North-East of Scotland.
    Dr. Dickson Mabon: In the late autumn. Publication will be arranged thereafter.
    Mr. Baker: Is the Minister of State aware that there have been alarming reports of continuing depopulation in the area Can he say what, if any, plans the Scottish Development Department has made for infrastructure working in the area in future?
    Dr. Mabon: There have been alarming reports for the last 15 years, if not longer. The study is specifically aimed at arresting depopulation and trying to achieve regeneration of the North-East and we hope that Professor Gaskin's plan will provide us with suitable indications of how we should proceed.
    Mr. James Davidson: Will the Minister of State consider setting up a North-East development authority to implement the recommendations of Professor Gaskin's report when it comes out in the autumn, which is when it is due and when, I am assured, it will be on schedule? This suggestion has been pressed for a long time. Will the hon. Gentleman give an assurance that he will reconsider it?
    Dr. Mabon: That may help, but I should like to see the report first. I agree with the Aberdeen Press and Journal that Aberdeenshire is ripe for development.
    Mr. Dewar: Will my hon. Friend give an assurance that this report will deal with the problems which will arise from Aberdeen's exclusion from Schedule 17 of the Finance Bill, a decision greeted with dismay in my constituency and which, in view of the city's heavy dependence on the tourist trade—a far heavier dependence than that of other Scottish cities—seems difficult to justify?
    Dr. Mabon: I sympathise with my hon. Friend's concern, but by no stretch of the imagination could Aberdeen be called a rural area. However, I assure my hon. Friend that Professor Gaskin must take into account these and other factors relevant to the needs of the area.
    Mr. Wolrige-Gordonasked the Secretary of State for Scotland what further plans he has to assist the development of local economy in the North-East of Scotland; and if he will make a statement.
    Dr. Dickson Mabon: The whole of the North-East is a development area, with all the benefits for economic expansion which that status attracts. Professor Gaskin's study should show how best the region can exploit these benefits.
    Mr. Wolrige-Gordon: Is the hon. Gentleman aware that the practical developments in the economy of the area in the last few years have been the fruit of the
    1498
    work done before the present Government took office, and that making the whole of the country a development area was a retrograde step for local development in this kind of district? Will the Government reconsider their policy in this respect?
    Dr. Mabon: I do not accept the first part of the question for one moment. In the years 1965 and 1966 1,100 new jobs were potentially provided by 705,000 sq. ft. of new factory space, which is not a bad improvement on past record. I agree that that is not enough and Professor Gaskin's study must help us on the way to even more.
    Mr. Hector Hughes: In the context of this Question, what does "local economy" mean? Does it include franchise, finance and education and what else?
    Dr. Mabon: That is a question which should be addressed to the hon. Member for Aberdeenshire, East (Mr. Wolrige-Gordon), but to answer on his behalf, "Yes".

    Local Government (Scotland) Act, 1966
    Mr. W. H. K. Bakerasked the Secretary of State for Scotland what proposals he has for amending the Local Government (Scotland) Act, 1966.
    Dr. Dickson Mabon: If the hon. Member has in mind the formula for distributing the rate support grants, this is at present under consideration by a working party which includes local authority representatives. Any alterations would be effected by the next Rate Support Grant (Scotland) Order later this year.
    Mr. Baker: May I inform the hon. Gentleman that the hon. Member for Banff did not have that point in mind? Is he aware that the Scottish Development Department has sent a circular to local authorities advising them not to rate unoccupied properties because the owners are pulling them down? Would he not have been better advised to listen to the Opposition's Amendment to exclude unoccupied properties from the rating proposals of the new legislation?
    Dr. Mabon: The hon. Gentleman is confusing the issue. He ought to put down

    1499
    a separate Question, or write to me about it, and I shall be happy to give him a considered reply.

EXPORT ORDER TO GREECE
Sir K. Josephasked the President of the Board of Trade whether he will make a statement on the loss of an export order to Greece.
The President of the Board of Trade (Mr. Anthony Crosland): I have had no confirmation of the loss of any export order to Greece. It would be in the interests of neither country to allow political differences or misunderstandings to affect our trade. Indeed, I have just heard that the Director-General of the Press Ministry in Greece has today denied that the Greek Government had decided to cancel Government contracts with the British firms as a result of recent remarks made about the Athens régime.
Sir K. Joseph: Is it not a fact that the representatives of one firm have been informed that an order that was due to be signed this week has been cancelled as a result of the comment by the Prime Minister in the House last week? Will the Government do all they can to rescue this and any other order?
Does the right hon. Gentleman agree that condemnation by the Prime Minister of this or any other Government in the context in which it was used last week is most unlikely to do any good to anyone and is most likely to endanger British jobs and trade?
Mr. Crosland: On the facts of the case, what appears to have happened was that an official in the Greek Ministry of Co-ordination spoke on the telephone to the Greek agent of the firm concerned, and informed him that this might happen—that is the action to which the right hon. Gentleman has referred. There has been no confirmation of this at all, either to the British Embassy in Athens, to whom I have just spoken, or to the firm concerned in this country, to whom I have also just spoken.
I have now heard that the Director-General of the Press Ministry in Greece has denied that any cancellation of contracts is in progress.
1500
As to the latter part of the right hon. Gentleman's question, it is quite wrong to suppose that people in this country who feel strongly about political régimes, whether in Greece or in Communist countries, will not say so, or to suppose that they should not say so. What is important is that all countries who have political differences with each other should strive hard not to let those differences affect mutual trade.
Mr. S. C. Silkin: Can my right hon. Friend confirm that the Government will not be deterred by any threat of economic sanctions from saying what is right about the actions of dictators and dictatorships, whether of the Left or Right? Furthermore, will he confirm that, if threats of economic sanctions of that kind are made, the Government will not hesitate to use economic sanctions in return?
Mr. Crosland: The Government will continue to make known their political views on régimes, whether in Greece, Communist China, Cuba, or South Africa—
Dame Irene Ward: Or Russia?
Mr. Crosland: They will make them known perfectly freely. But we still take the view, as do other countries concerned, that, although we have acute political differences with each other, nevertheless, it is not in the interest of either country to restrict mutual trade.
Sir F. Bennett: In view of the Minister's apparent impartiality on this question, can he remind the House when the Prime Minister last described one of these Left-wing dictatorships, such as those in China, Cuba, or Russia, as "bestial"? Would he care to give to the House some form of criteria on which we can judge whether we should or should not do our best to sabotage Britain's export drive?
Mr. Crosland: I understand that when my right hon. Friend the Prime Minister, on a previous occasion, in December of last year, referred to the régime in Greece he referred to"the barbarous methods in use in Greece today." My right hon. Friend the Prime Minister has told me that in answering a supplementary question on Tuesday of last week he had intended to repeat his earlier phrase. If it is of any satisfaction to the hon. Member I am perfectly happy, and so would

1501
any member of the Government be, to use the same word, "barbarous", to apply to what is happening now in a number of Communist countries throughout the world.
Mr. John Fraser: Would my right hon. Friend confirm that it never has been, and never will be, the policy of the Government to trim and mince their words to appease dictators who are in breach of fundamental human rights? Would he also agree that the concern of the Opposition for commercial considerations, above human rights, makes them worthy competitors of Judas Iscariot?
Mr. Crosland: I can confirm what my hon. Friend said in the first part of his supplementary. As to the second and more theological part of his supplementary, I would only say that one would deduce from the Opposition's attitude today—but I imagine incorrectly, as the Leader of the Opposition, from his own experience at the Board of Trade would confirm—that because they as a party, just as we as a party, hold strong views about the internal régime of Communist countries, they would not take steps to increase trade with those countries. If that is their view, it is not one which we share.
Mr. Tapsell: Does the right hon. Gentleman understand that the House is very ready to accept the Prime Minister's apology for his incompetence?
Mr. Whitaker: Would it not be a black day for the House of Commons if commercial blackmail were suggested by any hon. Member as a reason for anyone in the House not denouncing injustice in any country, especially in the country concerned, where it has been attested by the Council of Europe?
Mr. Crosland: It should remain, I would have thought, the view of both parties, certainly of this party, that we ought to continue to make our views absolutely clear about the nature of régimes with whom we disagree, but that, nevertheless, we should continue trading with them.
Sir G. Nabarro: Earlier, the right hon. Gentleman referred to "a firm". Is he aware, for example, that among Press reports this morning the Daily Express, in its righthand column on the front page, referred to both Rolls-Royce and
1502
Metro-Cammell? Has the right hon Gentleman consulted both firms individually and obtained their assurance, individually, that no order which they have had on their books has been cancelled as a result of the Prime Minister's speech?
Mr. Crosland: I am sure that the hon. Gentleman will be aware that Rolls-Royce and Metro-Cammell are jointly concerned with this contract. We have checked with the joint organisation of the two firms concerned.
Mr. Hooley: Does the Minister agree that it would be most unwise for the Greek régime to compound the folly of political behaviour by this kind of commercial folly, should it pursue the line suggested?
Mr. Crosland: It would be most unwise of the Greek régime, but, as I said in my Answer, there is no evidence that it has any such intention. Were it to carry out such an intention, it would be unwise, because it would undoubtedly start other countries pursuing their trade relations in accordance with their political views. That would be a very foolish thing for any Government to do.
Sir K. Joseph: Would the right hon. Gentleman accept that on this side of the House we think that he has made a very good job in making the best of the ill-judged remark by the Prime Minister? Will he also accept that we entirely agree with freedom of trade and freedom of expression, but still think that it was very ill-judged of the Prime Minister, unnecessarily and ineffectively, to make that sort of comment?
Mr. Crosland: As the right hon. Gentleman is in favour of freedom of expression, I hope that he is in favour of this in Greece, as well as in Britain. Subject to that, I make it clear again that what Her Majesty's Government want, despite our political differences, is an increase in our mutual trade with many countries of the world with whom we have profound differences.
Mr. Heffer: Is my right hon. Friend aware that the Council of Europe sent a delegation to Greece and that the evidence that it came back with made it clear that there are bestial practices in Greece? Is he also aware that the Conservatives, at the meeting of the Council

1503
of Europe, did everything possible, by their manoeuvring, to keep this matter quiet? It is amazing how the Opposition always defend Fascist and reactionary organisations and régimes.
Mr. Crosland: I am aware that this matter is currently being considered by the European Commission of Human Rights. There are Questions down to the Foreign Secretary on Monday of next week on the wider political considerations. I cannot comment on how Conservatives behaved at Strasbourg, because I regret to say that I was not there.
I must make it clear to my hon. Friend that, whatever view he and I may take of this régime, it would be wrong for either Government to regard that view as a reason for inhibiting proper trade between us.
Sir C. Osborne: Is the right hon. Gentleman aware that both sides of the House agree that political differences should not be allowed to impede trade? Would he not also agree, however, that it was rather unfortunate for the Prime Minister to use such extravagant terms? —[HON. MEMBERS: "They were not extravagant."] Would the right hon. Gentleman like to tell the House the definition in the dictionary of the word which was used? Is it not a most offensive word? If we insult everybody with whom we do not agree, will not our trade go down to nothing?
Mr. Crosland: As I know very well, the hon. Gentleman is not behindhand in occasionally using quite strong language about people or bodies he happens to dislike. He is rightly, very closely concerned with the development of Anglo-Soviet trade, despite the political views which he no doubt holds about that country. I have already answered a question about the precise language used by the Prime Minister.
rose—
Mr. Speaker: Order.

ORDERS OF THE DAY

  FINANCE BILL
  As amended (in the Standing Committee), further considered.
  [3RD ALLOTTED DAY]
  3.42 p.m.
  Mr. Speaker: I have posted up the amended list of selected Amendments. It contains one or two additions. The first new Clause which we are to discuss is new Clause 36, with which we shall take new Clause 42, "Old age relief and relief for blind persons", new Clause 113, "Tax allowance for blind persons", and Amendment No. 93.
  Sir Gerald Nabarro: On a point of order. So that there is no misunderstanding later in the debate, may we conclude that, if necessary, separate Divisions may be called on each or any of the new Clauses and the Amendment, for they are diverse in character, though loosely associated one with the other. One proposal deals with allowances for the blind only and not with allowances for other forms of disablement. May we therefore claim that any or all of the proposals may be divided upon?
  Mr. Speaker: The hon. Gentleman can claim nothing. He may ask Mr. Speaker whether he is aware of the differences between the various Clauses and Amendments and whether he would be prepared to allow a Division on some of them. I have not yet been asked.
  Sir G. Nabarro: I hereby ask you, Mr. Speaker, whether any or all of these proposals may be divided upon. I am so sorry that inadvertently I used the word "claim" instead of "beg".
  Mr. Speaker: There is no need for the word "beg", either. I will consider the hon. Gentleman's request and let the House know later.
  Sir G. Nabarro: Further to that point of order. You have ruled on many occasions, Mr. Speaker, that these requests should be made at the outset of the debate. You have just ruled that you will give a decision later in the debate. May I ask at what stage in the debate your decision will be given?
  Mr. Speaker: I am sorry; the Chair will not be cross-examined by the hon. Gentleman. He has made a request at the beginning of the debate and Mr. Speaker has informed him that he will consider it and let the House know his decision in due course.

  FINANCE BILL

    New Clause
    TAX RELIEF FOR DISABLED PERSONS
    In section 9 of the Finance Act 1962, as amended by section 10 of the Finance Act 1965, for the references to £100 and £200 respectively there shall be substituted references to £130 and £260 and these sections shall also apply to any other seriously disabled person, which means a person who is deaf, dumb or otherwise handicapped by loss of physical or mental faculty which is substantial and likely to be permanent.—[Mr. Worsley.]
    Brought up, and read the First time.
    Mr. Marcus Worsley: I beg to move, That the Clause be read a Second time.
    The House will be grateful to you, Mr. Speaker, for allowing us to debate the new Clauses together because they all cover points relating to disability. The Minister of State seems to be in that situation; I hope that it is nothing serious.
    This is the only chance which we shall have during the passage of the Bill to do something constructive to ease the burden on the mentally and physically disabled, with whom we all have sympathy. Clearly, there will not be debate across the Floor of the House about that sympathy; the debate will be about how to help them. In times of economic crisis, like the present, that in itself is no reason to exclude from our consideration subjects like the one dealt with by the new Clause. These people still deserve our sympathy and help through the Bill.
    The new Clause has a double purpose. Some of the other Clauses which we are discussing relate to only one of these two purposes. We are proposing that, first, the existing blind person's relief should be brought up to date, and, secondly, the relief which is paid only to the blind should be expanded to a general relief for disabled people.
    I wish to start by discussing the first of those two aspects, to which new Clause No. 113 is related. The figures
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    are simple. This relief was introduced in 1962 by the Conservative Government. Taking the base of 100 in January of that year, the cost-of-living index, which must be the indicator which we use in these matters, had risen in May this year to 124·9— 125 in round terms. The House will know how much of this increase has been the result of Labour Government and that the steps taken by this Government during the current year and earlier years have deliberately increased the cost of living.
    We propose to increase the relief to £130, because we have no confidence whatever that the rise in the cost of living is likely to stop in the immediate future. Indeed, all the policies of the Governent make it absolutely certain that it will continue. To be precise, we should increase the relief to £125, but we have proposed the figure of £130.
    When the Royal Commission on Taxation of Profits and Income recommended such a disability relief in 1954, it advocated that it should be not less than £100. As far back as 1954 it was thought that £100 was the absolute minimum. Here we are in 1968 and the £ is very much less valuable. Of course, if the Minister says now that he is quite happy to accept £125, I think it likely that my hon. and right hon. Friends will accept that with pleasure, but the point is that the relief introduced in 1962 has lost an appreciable part of its value. It is, after all, a relief not of very wide application, a relief confined to people who need it, and it is a relief, I must remind the House, which helps a category of people who are not currently helped through the National Insurance scheme—and that I shall return to in a minute.
    There is an overwhelming case at least for preserving the real value of this relief for people who are, by definition, in need of help. So the case we make on this Clause is that, whatever else is done, it is only a matter of elementary justice that the relief should be increased to keep pace with the falling value of the £. Of course, I appreciate that these reliefs cannot be valid in successive Budgets; we cannot have a sort of sliding scale; but I do think, and I invite the Minister to agree with me about this, that when the figure has moved as far as this and the cost-of-living index has

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    risen 25 points there is an absolutely overwhelming case for a change.
    The second object, to which, if the House will permit me, I should like to devote rather more time, of the Clause is to widen the application of relief. We feel that the time has come to build on the foundation laid by the Conservative Government in 1962, and to move at least some of the way towards a proper overall disability relief. I suppose that different forms of disability excite different amounts of sympathy in different people, but can anyone really argue that a blind person has any greater need of tax relief than, for instance, someone who suffers from multiple sclerosis?
    One can enumerate the hard cases easily enough, but surely the fact is that blind people have been selected not because they are in greater need of this relief, but because they are easier to identify. I believe that if there is a case —and I believe there is a case, and certainly both sides of the House have accepted this for some years now—for blind relief, then there must also be a case for relief for other major disabilities.
    I should like to quote from the Royal Commission to which I have already referred. It had this to say in 1954 on this matter, that
    "there are many kinds of disability … so severe that they modify the whole conditions of a person's life and impose upon him a constant levy of extra expense that may fairly be said to affect the taxable capacity of his income. … Our general conclusion is that grave disability ought to be the subject of allowance. It presents itself to us as a personal circumstance that sets apart those who suffer from it and directly affects their relative capacity to pay."
    This, of course, is the criterion on which one must judge a tax relief. There is nothing in that about singling out the blind for special treatment. The Report makes a clear and overall case for a disability allowance across the board.
    The Minister will, of course, realise that although we are discussing the question of tax relief, all these tax reliefs, or many of them, have, as it were, their mini-images in National Insurance. I refer, but only briefly, to the fact that many of us on this side of the House who have been pressing for some time for corresponding disability benefit have
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    made just the same criticisms about the present National Insurance scheme, that it helps certain limited forms of disability only; we have made of that scheme criticisms similar to those we are making this afternoon of the tax structure. I mention this because the same problem arises, and I should like to say a word about it.
    There is, to begin with, of course, the problem of definition. I would certainly not wish to suggest to the House that this problem of definition is one which can be easily solved. Nevertheless, I should like to make one further quotation —and the House will be relieved to hear it is my last—from the Royal Commission's Report, because in paragraph 203 the Commissioners dealt with this point:
    '"The difficulty reinforces the need to begin cautiously "—
    as, of course, was done in 1962, though in a different way—
    "and to confine qualification to 100 per cent. disablement. But we feel at the same time that the difficulty is not insuperable and ought to be faced. Machinery of the kind that we have in mind does in fact exist, though created for the purpose of war pension administration; and some of the qualifications, e.g., blindness, do, as it were, prove themselves."
    In other words, the Royal Commission, in considering this matter, thought that machinery should be established, and that there were precedents for the machinery, for making the kind of distinctions which we have in mind.
    In our Amendment we have used the wording, as the Minister will recognise, of the industrial injuries scheme, and my hon. Friends, in the related new Clause 42, have used the industrial injuries scheme, and also the war pensions scheme, as the machinery for making this sort of decision. We feel that the time has come to move on this matter, that these words, which are well-established now, which have been in use and been in operation for 20 years, could be used as the machinery for making this distinction.
    The Minister will, of course, know that the Government are currently carrying out a considerable survey into the whole question of disability. This we very warmly welcome. Such a survey is overdue, and must be valuable, but I hope that the Minister will not use this survey as an excuse for inaction on this matter. The survey will take a long time to complete;

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    it will take a long time to digest when completed. I do not believe that we can wait till the survey is fully completed. I believe that we have reached a stage for a real attack on this problem.
    It is, after all, as I said earlier, the only way we can help those in work, and what can be more important in this field than to help those persons who can still keep in work? Naturally enough, many of these people find it difficult to earn high remuneration; others, of course, cannot succeed in finding work at all, but where there is a possibility of work surely that should be encouraged. So we do not believe that the kind of cash benefit that we have in mind for disability is an alternative to a tax relief of the character we are mentioning. On the other hand, we feel that it is something that will run together with it very well.
    4.0 p.m.
    I also hope that the Government will not use the classic argument for doing nothing, namely, to start talking about borderline cases. It is always easy to make a nonsense of almost any improvement by saying that there is a case on the borderline which produces hardship. There are always borderline cases which are difficult, but if we use this argument across the board we would have hardly any benefits and hardly any tax reliefs at all.
    Surely the important thing is to tackle the substance of the problem and if, in the working of the scheme, there are found to be difficulties on the borderline, perhaps we can put them right later. However, this should not be an argument against any improvement in the scheme. If the Government can come forward with a better definition than we have succeeded in doing either in this new Clause or in any other new Clauses on the Notice Paper, we shall be only too delighted to accept it.
    We are trying to establish two principles in this Clause. The first principle is that when a tax relief of this character has been allowed and, largely through Government policy, has become eroded, then it is time that the Government took action and accepted a variation in the rate of tax relief.
    Secondly, the story which I have tried to unfold of the initial recommendation of the Royal Commission's Report for a disability tax relief, followed by the
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    introduction of a partial scheme in 1962, all adds up surely to an unanswerable case to widen this provision so that it covers the whole, or at least the greater part, of the disability sphere. This is what we urge the Government to do. This is why we have put down this Clause.
    Mr. Speaker: I should like to announce that I have given consideration to the request of the hon. Member for Worcestershire, South (Sir G. Nabarro) that I might be prepared to allow a Division on some of these other grouped Amendments. I have given some thought to this and I am prepared to allow a Division on new Clause 42 when we come to it, if requested by the Opposition.
    Mr. Julian Ridsdale: I welcome moving new Clause 42 standing in my name in conjunction—
    Mr. Speaker: Order. The hon. Member may not move new Clause 42. He is speaking on the present Motion, but he may, however, talk about new Clause 42 as much as he likes.
    Mr. Ridsdale: I welcome talking on new Clause 42 in conjunction with new Clause 36. If the Government are not able to agree and help on new Clause 36, I hope that at least they will realise that this Clause, to help the blind, is not so costly and will, therefore, go some way towards helping this very needy section of the community. The objective of new Clause 42 is to help a very small section of the community who are extremely hard hit by devaluation and inflation and, alas, cannot do anything to help themselves. This was brought home to me very much because of one special case with which I had to deal in my constituency. The cost is extremely small, but it would mean an extra £10 to £12 per year for those who are over 70 and those who are blind and whose income would be from about £700 to a maximum of £765 a year.
    First, I will establish the facts, especially in view of the verbal gymnastics of the Financial Secretary to the Treasury when he replied to a Question of mine in the House in April. I asked:
    "Is it not a fact that the blind allowance is taken away on reaching the age of 70? "

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    The Financial Secretary replied,
    "That is not so."—[OFFICIAL REPORT, 2nd April, 1968, Vol. 762, c. 156.]
    Yet, on 5th April, when I endeavoured to establish the facts and asked whether
    "he will seek to enable blind persons over the age of 70 years to be allowed both the blind allowance of £100 and age exemption relief against income tax",
    the hon. Gentleman replied:
    "I do not think that it would be right to increase the income limits for age exemption to reflect particular allowances due to the individual concerned."—[OFFICIAL REPORT, 5th April, 1968; Vol. 762, c. 150.]
    The facts are clear. At 70 age allowance comes into effect for everyone. The blind cannot have both age and blind allowance. The blind allowance ends at 70 years of age. After 70, the blind are still without the £100 concession. This then is the first question that I ask the Minister: why, when a person who has been receiving blind allowance, should it be taken away, especially when he needs it now far more than ever?
    My hon. Friend the Member for Chelsea (Mr. Worsley) has spoken about the severe rise in the cost of living. This is a class in the community which cannot help itself. Surely help should go to those who need it most. Is not this equivalent, at a time of inflation, rising prices and devaluation, to a severe cut in pay? I hope that the House will show its humanity to this most needy section. I am sure it would be the wish of everyone in the country that something should be done for these people.
    What would be the cost of this concession? I hope that the Minister will tell us. Does the Minister realise that I am not talking about rich men, but those hardest hit by inflation—people like General Post Office pensioners, railway super-annuitants, public service pensioners and anyone whose income adds up to between £700 and £750 a year, or under £1,000 a year, and whose misfortune it is to become blind. These are the people that I want to help. I hope that the Minister will not use the argument that help would go to a few rich blind people as well, because I am certain, if that was the case, that those people would be only too willing to forgo any of the advantages that they may gain.
    The people I am talking about and whom I want to help have a National
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    Insurance pension of £385 and some other form of pension of about £300, plus possibly a little capital bringing in an additional £50 a year. They receive £665 a year free of tax. For the rest, nine-twentieths has to go to pay tax. On £700 a year I know that that £10, especially to the constituent whose case I have mentioned, will mean a great deal.
    Therefore, I hope that the Minister will be able to give this concession.
    I am grateful to you, Mr. Speaker, for saying that we might have a Division on this Clause. I know how much in human terms this means to this very needy section. I do not want to stress too much the rise in the cost of living and how much these people are affected, but in some constituencies the average income is anything between £500 and £i,000. These people, who are the hardest hit, should be helped as much as possible. I would like the Government to give every concession they can so that we can do it across the board. This may be too costly, but let the Minister realise that a concession is given until people reach the age of 70. To take it away then is inhuman. I therefore hope that the Minister will be able to give this help to those who are being hit hardest by inflation, and who cannot help themselves.
    Dame Irene Ward: I am glad that these Clauses, which deal with a wide range of disabled people, are being discussed this afternoon. One of my regrets under the new method of dealing with Finance Bills is that discussions of this kind, which used to take place frequently under the old system, seem to have been almost entirely eliminated. I am, therefore, very grateful to my hon. Friends the Members for Chelsea (Mr. Worsley) and Harwich (Mr. Ridsdale) that we are able to discuss this problem in depth, because it is essential that it should be so discussed.
    My hon. Friends have deployed the case admirably over the whole range of the problems involved, but I want to concentrate my remarks on one aspect only. If a person does not have the full use of his limbs, or suffers from ill-health, or is blind, or is unable to use his brain to the full extent, the problem of heating becomes one of the most important considerations in his life. If a blind person

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    makes every effort to fend for himself— and we all agree that the disabled have a splendid record of trying to help themselves—but finds that he is unable to move about and has great difficulties in coping with the rigours of our weather, he must have adequate heating to keep himself in reasonable comfort. When disabled people return home after having done a day's work, probably under difficult circumstances, they need the benefits of additional heating.
    If it is proposed to increase the cost of gas, electricity, or coal, the proposal may be submitted to the Prices and Incomes Board, which, in its wisdom, may decide that the additional costs facing the nationalised industries justify the increases. In my part of the country we have an above-average number of retired people which includes an above-average number of disabled people. Most people cannot afford coal anyway, but disabled people find it extremely difficult to deal with it, particularly if they live in rather restricted conditions in flats. Violent increases in the price of gas and electricity have imposed enormous burdens on the disabled and the blind, and it is imperative that they should be helped by some form of tax relief.
    4.15 p.m.
    In this great country of ours we can take credit for many technological achievements. It is childish to say that we cannot establish an administrative machine to identify those who would be entiled to take advantage of the provisions of these Clauses. After all, the Government must know the number of disabled people being employed in any firm. They have to be identified by the employer to make sure that the firm is operating within the law. I have always felt that the answer about the difficulty of creating the necessary administrative machine was rather facile. The public will no longer accept that answer.
    We have done a great deal to stimulate interest in the disabled and in the blind. A number of committees have been formed in the various regions, and blind people are well aware of the many pledges which have been given that extra money would be provided to help them. The right hon. Lady the Secretary of State for Employment and Productivity has promised to examine the question of equal
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    pay for equal work. If the proposal is implemented, the cost will be £600 million a year. What we are asking for will not amount to anything like that sum. What attitude can the disabled and the blind adopt if the Government say that they are prepared to consider a proposal which would cost £600 million a year, but are not prepared to consider a cause which is dear to our hearts? What attitude can they adopt if the Government cannot even say that they will examine the possibility of creating the necessary administrative machine? It will be much easier to do that than it will be for the right hon. Lady to negotiate with employers and trade unions on the question of the rate for the job.
    Whenever I rise to support new Clauses or Amendments of this kind to Finance Bills I feel that we shall win, but somehow or other we never do, and this is most depressing. I have spent a great deal of my political life arguing with my party, and when we win the next General Election the first thing that I shall expect from my party is action. The Socialists can put that in their pipes and smoke it. We will smoke better pipes than the Socialist Party.
    Mr. Speaker: Order. The only action that the hon. Lady can ask for at the moment is on the new Clauses.
    Dame Irene Ward: What I want now is the acceptance of the Clauses. Hope springs eternal, and I have a feeling that perhaps the Minister will say that he will accept the Clauses with pleasure. I am certain that they cannot cost much money. The other day the right hon. Lady who runs the Ministry of Social Security announced that she would give £44 million to a section of the community which, she said, required additional benefit. I am not arguing about that; I have no doubt that that section deserves it. But many people deserve support from the Government in present circumstances, and if help can be given to one needy section of the community there is no reason why help cannot be given to this section, because if any section deserves our support it is this one.
    I cannot think what I can do to persuade the hon. Member. As my hon. Friend the Member for Chelsea said, I hope that the Minister will not give us

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    all the old answers. If I were to sing, "Tell me the old, old story" it would be a shock to the House—
    Mr. Speaker: It would be delightful, and it would be in order.
    Dame Irene Ward: Thank you, Mr. Speaker.
    I have lots of friends who tell me, "I should be delighted to have you come and stay with me, provided that you do not sing". Here I am staying, and I am not singing. I am warning the Minister, however, that unless we have a satisfactory answer today there will be such a wave of additional nausea against the Government that I hope it will blow him out of the seat that he is now occupying.
    I am grateful to my hon. Friends for putting down these new Clauses. A great deal of self-restraint has been exercised by people who have worked so hard for this good cause over the years, because they have had so little opportunity, under the Bill, to discuss the needs of people who really need our support and help.
    I give my support to the Clauses. I cannot believe that any Minister could be so lacking in humanity as not to accept them. Never mind what the Treasury says. I am sick of the Treasury. If some people from the Treasury would like to go round the country and speak to those who are interested in the disablement income groups and the blind, we should be happy to take parties of them round.
    We are now to re-educate civil servants, and I suggest that the first group that we should deal with—which would be the easiest to re-educate—are the Treasury officials. Let them speak to the people who have been helping to sustain our economy under difficult circumstances. They will see that these people need and deserve our help. If the Minister would like any help with the Treasury officials he can count me in. I shall be delighted to take one in each hand and show them some of the problems of these people.
    I hope that the Minister will not delay very long before saying "Well done". It would be wonderful for his side of the House. His party is split from top to toe. It would be a good thing for hon. Members opposite to be able to close their ranks on something which ought to unite both sides of the House.
    Mr. John Pardoe: It is always a delight to listen to the speeches of the hon. Member for Tyne-mouth (Dame Irene Ward), even if it is difficult to follow them. She said that the first thing she would expect her party to do when returned to power would be to take action on this matter. I am sure that that could be the last thing she would get, but I shall be here to help her remind her party. [Interruption.] If I am not here nobody in the Conservative Party, apart from the hon. Lady, will remind it of this matter.
    Dame Irene Ward: Oh, yes, they will.
    Mr. Pardoe: Two issues are involved in these new Clauses. The first is an increase in the level of tax relief for blind persons. On the basis of the inflation that has taken place since the level was last fixed, only a few years ago, there is an unanswerable case for such an increase. I do not see how the Minister can refute that. I do not like to think of the problem that lies before him in trying to do so. Bearing in mind all the facts about the cost of living we known that the case is unanswerable, and I hope that the hon. Gentleman will accept it.
    I am wholeheartedly in support of widening relief for the disabled generally, but I am not so wholeheartedly committed to increased tax relief for one section only. I should prefer to see the relief given right across the board rather than to a group. I hope that this idea is something that we shall move towards, partly because of the activities of certain groups and partly as a result of the investigation which the Government are undertaking.
    It would appear that a principle has been established that where there is a case for tax relief for some group or other—whether it be a small or a large minority—there is also a case for a national income provision, within Ministry of Social Security terms, for the same group. We should accept that principle. If it is true that it costs a disabled standard rate taxpayer more than an able-bodied standard rate taxpayer to live, and, therefore, there is a case for lax relief, so, also, is it true that it costs a disabled non-standard rate taxpayer more than it costs an able-bodied non-standard rate taxpayer. We should,

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    therefore, try to bring these two low income groups within the National Insurance provisions.
    In our attitude to tax relief and National Insurance provisions we should realise that income maintenance is the basic principle at stake. What we are trying to do through tax relief—whether it be in respect of families with children, elderly people, or expectant mothers, under the National Insurance scheme, or in whatever way it may be—is to ensure that people do not find their standard of living falling because of circumstances beyond their control—because they retire, or fall out of employment, or become sick, or, as in this case, become disabled or blind.
    I know that the Minister will suggest that many difficulties and problems will arise on the borderline. How do we define the borderline? It has been suggested that this matter would obsess the Minister. If the Minister is to argue on these lines, however, he must face the fact that the way in which we now decide whether people shall receive reliefs of one sort or another in respect of their incomes, or through the Ministry of Social Security, or through grants for running a car or the allocation of an invalid carriage, needs to be changed.
    We should change the whole basis of assessment of eligibility. For instance, it has been shown to be wrong to base eligibility for relief in respect of a lung complaint upon X-rays. The only way in which it can be done in such a case is on the basis of clinical observation. We know of many cases where pneumoconiosis has been shown to be present at death although X-ray photographs did not show it to be present during life. If the Minister is to argue about all the problems that arise he must agree to take a wider and more clinical approach, rather than to rely on the X-ray approach, which I am sure his civil servants will suggest that he adopts.
    I wholeheartedly support the Clause and those which relate only to disablement or blindness, and I hope that the Minister will accept that, eventually, we should go further—and the sooner the better.
    4.30 p.m.
    Mr. Raymond Gower: I suggest to the hon. Member for Cornwall,
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    North (Mr. Pardoe) that this matter is too urgent to await any alteration of the National Insurance arrangements or the present survey into disability. This is a grave matter for those affected. It is all very well for us, in the calm and perhaps unreal atmosphere of this Chamber, to discuss these matters objectively, but seldom, if ever, since the war have so many of the people who are living in these conditions been faced with such a savage diminution of their living standards. Therefore, the case for these Clauses is comprehensive and fair.
    Nothing that we can do today will really compensate these people for their loss of faculty or blindness or other disability, but at least in the present economic difficulties—whatever the reasons: we can argue that another time —with devaluation, rises in the prices of gas, electricity and food and all the things which particularly affect the living standards of many of these people, the case for the Clauses, and particularly for the provision to bring the present amount more realistically into line with present costs, is—I agree with the hon. Member for Cornwall, North—unanswerable.
    Treasury Ministers are sometimes wrongly accused of being hard-hearted. It is easy to make this claim, but if the hon. and learned Gentleman rejects the principle that the benefit should merely be altered to compensate for changes in the cost of living, and so on, he could then be legitimately accused of some hardness of heart.
    As to the extension to the other categories, does he feel that the line can be held on this wholly artificial distinction between blindness and other disabilities? This probably came into being, as my hon. Friend the Member for Chelsea (Mr. Worsley) suggested, merely because blindness was easier to identify. But this should not be beyond the ingenuity of Ministers and their advisers. If the Government have the will to give some modest relief to people in these categories, they can do it. What we want to know is whether they have the will. We certainly do not want to hear what my hon. Friend the Member for Tynemouth (Dame Irene Ward) called the "old, old story" of excuses and arguments about difficulty. All we want to know is that they have the will—if so, they could find the solution.

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    This matter is urgent. The position of many of these people has been so prejudiced by inflation, devaluation and changes in the cost of the things they need that action should be taken now, and this is the most convenient vehicle —perhaps the only one—which we can use, certainly before the Summer Recess, and perhaps for a long time ahead. We cannot wait for surveys or National Insurance changes. The position of these people must be ameliorated now. I hope that the hon. and learned Gentleman will not refuse to accept the Clauses.
    Mr. Tim Fortescue: In a brief intervention in the corresponding debate in Committee on the Finance Bill last year, which, happily, was taken on the Floor of the House, I suggested, in a debate on a new Clause providing for tax allowances for the disabled, that the Treasury would turn it down on one of three grounds.
    The first was that it was the wrong moment for giving any money to anyone. I said that it was never the right moment. The second was that it was administratively impossible, on which I quoted from a speech of the present Home Secretary when in opposition on 30th May, 1962, moving almost exactly a similar Clause:
    "… I would make the reforms irrespective of administrative complications and tell the Inland Revenue to get on with them. I have seen this happen in the past in connection with P.A.Y.E."—[OFFICIAL REPORT, 30th May, 1962; Vol. 660, c. 1448–9.]
    Since, last year, when we made this suggestion, that right hon. Gentleman was head of the Treasury team, it was difficult for the Government to make that excuse.
    The third ground on which I suggested that they would turn down the Clause was that Income Tax relief in these cases was the wrong method. The Chief Secretary then chose the third of those alternatives. He did not say that it was the wrong moment—it is never the right moment—or that it was administratively impossible, which would have been difficult, in view of the quotation which I have just given from his right hon. Friend. He chose the third. He expressed sympathy and said that the blind and disabled should be helped much more, but added that this was not
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    the right way to do it and that it should be the responsibility of the Ministry of Social Security. He made a long and eloquent speech in that sense, and the Clause was turned down.
    This year, it will be more difficult for his hon. and learned Friend. Unless he says that this is the wrong moment —it always is, so that is no excuse— this year, we have drafted the Clause differently, so that the reasons which he gave last year for this being the wrong method are no longer valid. His argument was that it would be absurd to give Income Tax relief to the disabled while doing nothing for those disabled who do not pay Income Tax, and that one could not possibly do that in ethics, morals or social rectitude, since the better-off would be helped and the worse-off would not.
    Therefore, this year, we have worded it differently, and if the Minister of State accepts new Clause 36 the disabled will have the same choice as the blind now have—that is, they will be able either to have a tax allowance or to have a tax free cash benefit. So we believe, incon-trovertibly and unanswerably, that we have spiked this gun, which I suspect the hon. and learned Gentleman would have sought to shoot. Out of the three alternatives which I gave last year, there is none left, so he will have to think of something different. It will be interesting to see how he gets himself out of this dilemma, because there seems to us to be no reason for not accepting the Clause. I understand that his instructions almost certainly are not to accept it, but his logic will be carefully examined on this side and I strongly fear that it will be unacceptable.
    On another point, I ask the Minister seriously to look at the present claim form for Income Tax relief, to see whether something could not be done to make that part containing the entry for the Income Tax relief for the blind more easily identifiable and simple to complete. At the moment, it is difficult to find it at all, but I imagine that there are many elderly people involved in trying to find it. Even when one finds it, it is not simple to fill it in. It could be easily simplified. Could this very minor help to the blind be considered?
    Sir G. Nabarro: Mr. Deputy-Speaker, I am grateful to Mr. Speaker for stating

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    a few moments ago that we could have separate Divisions on new Clauses 36 and 42. I mention that at the outset so that there shall be no possible basis for future misunderstanding.
    The four Motions grouped together, of which three are new Clauses and one is an Amendment, are somewhat diverse in character, though, loosely, they hang together. They all have a common objective of trying to do something for the chronically disabled. I was most impressed by what was said earlier by my hon. Friend the Member for Tynemouth (Dame Irene Ward), for her voice has been heard loud, clear and continually, over all the years I have been in the House, demanding a better deal for men and women living, sadly, on small fixed incomes, a phrase which she coined in Parliamentary parlance, and notably my hon. Friend's pleading year after year for those who are disabled.
    I rise to make only two or three points briefly in support of her argument. My name is a attached to new Clause 36, directly after the name of my hon. Friend the Member for Chelsea (Mr. Worsley), who moved the new Clause so cogently and with a good deal of support from economic facts and figures.
    The first point to which I address myself is a simple economic and financial fact of life, which is that inflation in our community is more rampant than it has been at any time since 1951. Sterling was devalued on 19th November, 1967. The Treasury announced, in answer to a Parliamentary Question in February, 1968, that the value of the £ had dropped to 19s. 8d. in the period of 10 weeks following devaluation. The Treasury announced in May, 1968—three months later—that the value of the £ since devaluation had dropped to 19s. 3d. It may easily be calculated that that rate of inflation equals about 10 per cent. per annum.
    But the effects of devaluation have not yet worked through our economic system. In my judgment, the most virulent period is yet to come. I believe that the most virulent period will be in the second half of 1968; that will be the period when the greatest hardship is brought to bear on disabled men and women.
    What should be the measure of immediate advance in their allowances for
    1522
    tax purposes or cash grants or any other system decided upon is arguable and is a matter for debate. The figures mentioned in new Clause 36, I think, are approximately correct. Possibly the figure should not be exactly 30 per cent; the figure may be 25 per cent., or 35 per cent. I do not know. But these people should have a generous advance to offset the chronic influences of inflation following the devaluation of sterling last November.
    4.45 p.m.
    My second point concerns the proclamations which always accompany statements of economic and financial hardship when Socialist Ministers make them. The famous pronunciamento of the Prime Minister on 20th July in the year before last, the equally famous one on 16th January this year, and the others were followed by Ministerial statements saying, "We will protect the weakest members of the community from the hardships which may arise from our policies". No greater hardship can arise than the rampant inflation burning large holes in the threadbare pockets of the disabled. They suffer greater hardship than anybody else. If the Ministerial proclamations about helping the weakest members of the community mean anything at all, we should interpret them this afternoon as meaning that the disabled will have additional allowances or cash grants, whichever is the system chosen.
    The third point which I make, shortly, is party political in character—and it ought to be. Four Motions are grouped together. The third is new Clause 113. I am surprised to see that is in the name of a Socialist Member—the hon. Member for Aberdeen, South (Mr. Dunbar), who had a majority of 1,799 votes on 31st March, 1966. His is a highly marginal seat. I wonder why he is not here to lend his voice in support of his Clause, selected by Mr. Speaker and being debated with two other new Clauses and one Amendment set down by Tory Members. Where is the hon. Member for Aberdeen, South? Has he been bludgeoned by the Treasury Ministers to stay away? Did I gather that the hon. Member for Woolwich, West (Mr. Hamling) said that he was under the couch?
    Mr. William Hamling: He is not in the House.
    Sir G. Nabarro: He is not in sight. He is not here to support his own new Clause. What a disgraceful episode! I hope that it will not go unnoticed in Aberdeen, where voters count. I see that Socialist Members are entering the Chamber fast. There may be an opportunity yet for the hon. Member to appear. Had he been here, I hoped to persuade him to join me in asking Mr. Speaker for a separate Division on his new Clause so that all my Tory right hon. and hon. Friends could go into the Lobby with his Socialist adherences—if any, for only his name appears on the Motion.
    It is a muted voice. It calls for an increase in allowances for the blind. New Clause 113 asks for increased allowances only for the blind and not for other disabled men and women. But he is a generous chap is the hon. Member for Aberdeen, South. He wants an allowance of £50 more for every blind person —an increase from £100 a year to £150 a year, a very generous sentiment indeed. He put that on the Notice Paper of the House, but he has not come here to speak for his own Motion. I castigate him accordingly.
    With those few words, I support new Clause 36 and I support new Clause 42. Were there a separate Division, I should support the hon. Member for Aberdeen, South, Socialist though he is, for his sentiments are noble. I hope that the Treasury Ministers will give us a crumb of comfort in their replies, in the form of advanced allowances for all disabled men and women, or, as an alternative, cash grants in the form recommended by my hon. Friend.
    Lord Balniel: The purpose of this group of Clauses is to help the disabled. They have been moved powerfully and persuasively by my hon. Friend the Member for Chelsea (Mr. Worsley) and supported by the absolutely conclusive arguments of all my hon. Friends and even by the representative of the Liberal Party.
    The purpose of the Clauses falls into two parts. On the one hand, there is the intention to restore the value of the allowances available to the blind to the original level at which they were fixed in 1962. There is the other and wider purpose to extend the narrow category of disability from blindness alone so as to
    1524
    cover all forms of disability which are deserving not only of our compassion, but also of our help.
    It is right that we should remember that it was in 1962, as the result of a long and arduous campaign waged by my hon. Friend the Member for Plymouth, Devonport (Dame Joan Vickers), that for the first time an allowance for the blind was included in a Finance Bill. We have though this time to consider the Clauses in the context of a Budget which will harm the standard of life of the community as a whole. In such a context we must go out of our way particularly to help those sections of the community who are not able to help themselves. We must implement the undertaking which was so freely given by the Prime Minister to protect the most vulnerable sections of the community from the full impact of devaluation and the rising cost of living.
    We are asking in one Clause that the allowance for the blind should be restored to the purchasing power at which it was originally fixed and which, since then, has been eroded by about 25 per cent. The debate is taking place in the context of an absolute deluge of price increases. As my hon. Friends the Member for Harwich (Mr. Ridsdale) and the Member for Tynemouth (Dame Irene Ward) said, the deluge of price increases has as its central core the disturbing fact that the emphasis of the increases is on those prices which cause the greatest hardship to the housebound and the disabled. Gas, electricity and other fuel prices: these are the prices which have a greater impact on the disabled and the elderly than on any other section of the community.
    I should have thought that the argument simply to restore the allowances to a value which they held in 1962 was so absolutely conclusive that I cannot see what kind of argument the Minister will advance against it. I can only assume that he will be prepared to meet our request when he rises to address the House.
    There is the wider aspect on some of the Clauses, and it is on this that I wish to develop the argument in slightly greater detail. The Clause, as in former years, is designed to extend the category of disability so as to cover all forms of disability. I intend to argue the case on

    1525
    its merits rather than to refer to the speeches and the promises which were made by the Ministers when they were in Opposition. In a purely political context, I do not deny that it is tempting and totally relevant that I should refer to the promises which were made by hon. Gentlemen opposite when they were in opposition, but this is a sterile form of debate, and not in the best interests of the handicapped and the disabled. The arguments of merit are the arguments which matter.
    When a somewhat similar Clause was debated during the passage of the last Finance Bill, the Government spokesmen primarily devoted their arguments to problems of definition and problems of administration. I intend to refer to these, since so far the Government have not made their case that the problems are insuperable. Before I do so though, I intend to echo the words of my hon. Friend the Member for Chelsea, that we feel that there is a better way of helping the disabled.
    The Clause is drafted as it is because it is the only way which is open to us within the existing machinery to bring help to the disabled, and help must be brought urgently and now. Because of rising prices, there is an urgent need to bring help, even although the help which we suggest in the Clause is not the absolute ideal which we would like to achieve.
    I have for a long time been interested in the problems of the disabled as have those of my hon. Friends who have spoken in the debate. It is in the experience of all of us as Members of Parliament that, at the heart of many of the problems of daily life for the disabled, lies the question of income deficiency. The disabled have a dual problem to face over and above their physical or mental disability.
    On one side, it is difficult for them to find employment and, even having found employment, they find it difficult to earn the wages and salaries which persons in good health are able to obtain. Their problems in finding employment have been accentuated and increased by the introduction of the Selective Employment Tax, and they will be redoubled when the Selective Employment Tax is increased.
    The Minister of State, Treasury (Mr. Dick Taverne): To avoid dealing with this point specifically, may I interrupt the hon. Gentleman to say that he is no doubt aware of the special exemption which is made for the disabled, exempting them from the Selective Employment Tax increase.
    Lord Balniel: If the Minister will look at the Selective Employment Payments Act, 1966, Section 6(2), he will find that it is a very limited class who are exempted. The general impression gained by hon. Members in their constituencies is that the problems of the disabled have been made greater by the impact of the Selective Employment Tax. So on the one side, their problems of earning are greater, and, on the other, their expenditure is greater. Their expenditure on clothing is greater. Many of them have artificial limbs; many can only move with the support of crutches, and it is common knowledge that because of this the clothing expenditure of the disabled is greater than (hat of persons in good health.
    The same applies to expenditure on transport. They cannot use the Underground or the buses, and very often they cannot use the railway service. They have to use taxis or other more expensive forms of transport. They have to undertake the adaptation of their houses to meet their special needs and this also involves them in considerable expenditure. They are unable to decorate their houses themselves as would be done by persons in good health. They must employ decorators to do it for them. They have to ask friends to undertake their shopping for them, and are not able to shop around for the best bargains.
    5.0 p.m.
    As Chairman of the National Association for Mental Health, I am interested in the problems of the mentally handicapped, be it through mental illness or subnormality. Yesterday, I was addressing the International Conference on the Rehabilitation of the Disabled. In a few days' time I shall be speaking at the big rally in London of the Disablement Income Group. All of us who have this background knowledge and who are interested in the problems of the disabled are aware of the anomalies which exist. Some disabilities, because they are

    1527
    caused by industrial injury or accident, receive benefit, but long-term incapacity caused, for instance, by multiple sclerosis, poliomyelitis, muscular dystrophy, or deafness receive no benefit.
    Our aim as a country must be to see that we accept the principle that all forms of disability should be treated alike, whether the cause is an industrial injury or accident or whether it is some other cause such as disease. There is much strength in the argument that we should move towards the payment of a cash allowance, which is the point made by my hon. Friends the Members for Liverpool, Garston (Mr. Fortescue) and Barry (Mr. Gower). In this way one could bring help to the disabled housewife as readily as it is provided for the person suffering from an industrial injury. The wording of the new Clause is a step in that direction, because it is designed to treat all disability the same, whatever its cause.
    However, no cash allowance exists at the moment, and my hon. Friend the Member for Chelsea has drafted the Clause so as to use the existing machinery of the tax system, which is the only means available to us under the Finance Bill. The Government argue that it is difficult to define "disability" and that the Clause is difficult to administer. The definition that we have used is, however, that used in the industrial injuries scheme.
    If the Government cannot go the whole way, surely they can make some move in this direction. Certain diseases are prescribed under the industrial injuries scheme, and I cannot see why it is not possible to attempt to prescribe other diseases for the purposes of the Clause. Why, for example, cannot the Minister prescribe multiple sclerosis, poliomyelitis, deafness, of muscular dystrophy? I cannot see why he should not attempt to move in this direction.
    The Clause also highlights the lack of statistical information about the extent of chronic disability. We all know the number of persons who are disabled and in receipt of war disablement pensions, the number in receipt of industrial injury pensions, the number in receipt of sickness benefits for over six months, and the number in receipt of supplementary benefits because of disablement. We do not, however, have statistical information
    1528
    about the number of chronically disabled people who are not in employment, and we do not know the number of disabled housewives.
    If the Government accept the Clause, the Minister will be forced to draw up a complete disablement register. It has been expected for a long time. Because of the delays which have occurred in the past, we believe that the time has come when we should force the Government to draw up such a disablement register so that at least we know the extent and degree of disability in the country.
    The review of social security has proceeded for so long that the Government must now be in a position to announce whether it is their intention to introduce an allowance for the disabled. I hope that the Minister of State will announce that that is his intention. Every day which passes, price increases grow greater and the hardship for the disabled grows greater. The disillusion is the greater because the Government promised so much when they were in opposition, and they have fulfilled so little in practice.
    In default of an announcement today of the Government's intention to introduce some form of disability allowance, I believe that we are right to press for the inclusion of this Clause in the Finance Bill, accepting that it is not completely ideal. It will not bring help to all the disabled, but it will bring substantial help to many who are suffering great hardship at present.
    Mr. Taverne: Perhaps I might deal, first, with the wider question which has been discussed in this debate, which is that of the disabled in general and not just that of the blind.
    The arguments which have been put forward very forcefully and in many cases very eloquently are not dissimilar to those advanced last year and in something like 10 out of the last 14 Finance Bills. The House is aware of this, and if the hon. Member for Hertford (Lord Balniel) taunts the former Opposition with what they said in those debates, I hope that some restraint will be exercised, because it is also true that the majority of his colleagues, with the exception of the hon. Member for Tynemouth (Dame Irene Ward), were sufficiently persuaded by the arguments advanced from the Treasury

    1529
    Bench against a similar type of proposal in 1962 that they voted against the introduction of a special disablement allowance. We must see the position against the background of previous debates.
    We had much the same debate last year, when a similar new Clause was before the House. As far as I can see, the only difference between the wording of the present Clause and the one last year is that on this occasion the words
    "which is substantial and likely to be permanent"
    are used instead of
    "which is likely to be permanent."
    We are concerned with very much the same issue.
    In the past, when these issues have been before the House, Treasury Ministers have expressed sympathy, but, except for one occasion in one direction, they have not found it possible to agree to the proposals. That one occasion was in 1962, when the special allowance for the blind was introduced. I must make it quite clear that, when it was introduced, it was not intended as a first step, as a number of hon. Gentlemen have suggested today. The Chief Secretary at that time explained that it was felt by the Government that, with the blind being an easily identifiable group because they could be identified through being on local authority registers, it was possible to treat them exceptionally, but quite impossible to extend the benefit wider or implement the recommendations of the Royal Commission.
    This is not because there is some kind of callousness which enters into the souls of those who become Treasury Ministers. In all these debates, they face the dilemma that, if they show an understanding of the problems involved, they are called hypocritical, and if they say that the real difficulties must be looked at, they are described as callous. But that it is not callousness was shown last year when my hon. Friend the Member for Plymouth, Sutton (Dr. David Owen), speaking not as a Treasury Minister and not on behalf of the Disablement Income Group, but certainly as a Vice-Chairman of that Group, reluctantly had to come to the conclusion that this was not the way in which relief should be given.
    I know that this will not make what I have to say more palatable to hon.
    1530
    Members opposite, but I, too, have been in correspondence with the Disablement Income Group and I know the problems. I hope that we can approach the question on merit, as the hon. Member for Hertford said, and will not argue that one side has a monopoly of compassion and that callousness on the part of the Treasury makes it indifferent to the sufferings of the disabled.
    The main argument last year, as it is now, was that of fairness. The hon. Member for Liverpool, Garston (Mr. Fortescue) said that he would anticipate the arguments advanced, and hoped that they would not be the same as those used on a previous occasion. It is very easy to say that one may answer the arguments now put forward, but may not use the main argument on which it has been necessary to rely on the 10 occasions when the question has been raised in the past 14 years.
    The main objection to the relief embodied in the Clause is based on fairness and the difficulties of avoiding unfairness. A Government must be concerned with social policy as a whole, and consider it both from the point of view of social welfare and taxation policy. They must weigh up the needs to raise revenue and the way in which relief can fairly and best be given through allowances, and the way in which other means, such as cash payments, can be used to deal with particular problems. They must use for the maximum benefit whatever funds they have or raise.
    The means of granting relief provided for in the Clause is the least effective for those in the greatest need and suffering the greatest hardship, such as those to whom the noble Lord referred, who find it impossible through their disability to obtain employment. It will help those who are in comparatively less need. It will help those who are better off more, and do nothing to help those for whom the hardship is greatest. This cannot be denied. The only real solution must lie in the direction which the hon. Member for Cornwall, North (Mr. Pardoe) mentioned, and to which a number of other hon. Members referred, through long-term disability payments.
    Mr. Fortescue: I said that under our new Clause this year it was not true that

    1531
    the better off would be helped more, because the blind person's allowance can also be taken in the form of tax-free cash benefit, and that we propose that that choice should be extended to the permanently and substantially disabled. Last year's argument was valid then, but it is no longer valid.
    Mr. Taverne: Exactly the same question applies as before. Under the Clause, a benefit will go to those who pay tax. None will go to those who do not pay tax. Those who do not come within the taxable range get no benefit from the relief, and they are those who suffer the greatest hardship and face the greatest difficulties.
    A further aspect of the fairness or unfairness in the Clause arises from the administrative complications. If the relief is given as the Clause suggests there will be cases where the sense of unfairness will be increased. I am aware that the Royal Commission on the Taxation of Profits and Income suggested that this allowance should be given, but all Governments who have examined it and tried to implement the recommendation have encountered insuperable administrative difficulties, or at any rate difficulties of a kind which would increase the sense of unfairness in particular cases. The found it impossible to take into account all the varieties of personal circumstances in granting tax relief.
    If the Clause were adopted there would be endless argument about what is a substantial loss of physical or mental faculty, and in numerous cases where the argument was lost compared with others where it succeeded there would be an increased sense of unfairness. I think that it was the hon. Member for Chelsea who said that we should not worry about the resentment caused in borderline cases. That is not the argument that we are used to meeting when we are debating the Selective Employment Tax, when, time after time, hon. Members opposite say that what is inherently objectionable about it is that it leads to borderline disputes which create such a sense af unfairness that the tax as a whole becomes monstrous and unjust. When we come to questions like the concessions to hotels in rural areas the point is often made that it would be
    1532
    better not to give the concession because of the unfairness as between those who get it and those who do not.
    5.15 p.m.
    Sir G. Nabarro: Does not the Minister agree that the disabled are easily identifiable? There is no administrative problem with disabled men and women because if they are registered disabled they carry cards.
    Mr. Taverne: But the Clause does not suggest that only registered disabled should receive that benefit. If the Clause were adopted it would be necessary to decide whether particular individuals had suffered a substantial loss of physical or mental faculty, whether they were deaf, dumb or otherwise handicapped by loss of physical or mental faculties. We should have to deal with cases of the chronic sick and people who became handicapped through increasing age. We should deal with a number of cases where it is very difficult to decide who comes within the description and who does not. There is no existing system of medical assessment except in the cases of war disablement and industrial injuries. In these cases, the taxpayers involved would in any event be in receipt of tax-free disability payments and, therefore, under the Royal Commission recommendation, they would probably not get the benefit from the tax concessions.
    The degree of disability resulting from injury can largely be determined by a set of rules, but when one comes to chronic illnesses or some of the other disabilities, the assessment is bound to be much more subjective, and it is bound to be much more difficult to be consistent. In such cases, the great sense of resentment between those who came on one side of the line and those who came on the other would be enormous, quite apart from the large number of appeals, objections and applications which would be involved.
    The Royal Commission said that one should start cautiously, but it did not suggest that one should start with anything less than 100 per cent. disability. Even if one took the "substantial" rule under the 1946 Act, which meant 20 per cent., it would be very difficult to determine what is a 20 per cent. disability. Therefore, there would undoubtedly be an increased sense of unfairness under

    1533
    the Clause over the way in which some would get the allowance and some would not. It would be most difficult to administer, and it would not deal with those cases where the hardship was greatest.
    Mr. Gower: The Minister says that it would not deal with those cases where the need was greatest. I see his point. But he deems that a fatal objection to the Clause. Surely it would be an equally fatal objection to the similar concession already made to the blind?
    Mr. Taverne: That is true to some extent, but there are more blind people receiving outside payments than, for example, the chronic sick, the deaf, or many of the other categories which would be involved. To some extent I take the hon. Gentleman's point. Indeed, it is one which can be made against the increase in the allowance to the blind which is being sought. In any event, he is right in this respect, that it has always been a very small percentage of the total in receipt of the allowance. Less than one person in four is in a position to claim the allowance in any event.
    The hon. Member for Harwich (Mr. Ridsdale) said that one can make one concession to the blind and say that their allowance should be additional to the old-age allowance which exists. But there is a snag. The blind allowance is an additional allowance to the other allowances which exist and one cannot regard the blind allowance in that sense separately from other personal allowances. If there were special additions to the ordinary age exemption limits for blind people there would be no answer to a claim that there should be special additions in all other cases where the elderly person was entitled to some tax allowance over and above the basic single or married person's allowance— for example, the dependent relative allowance.
    One cannot treat the different allowances separately. While one can recognise the case in equity for doing so, it has never been the case that the personal allowances in various Finance Bills have been raised in accordance with the rise in the cost of living.
    Dame Irene Ward: There is no reason why we should not start.
    Mr. Taverne: The hon. Lady, on the ground that she voted against her party, is entitled to make that objection, but the fact remains that that kind of remark is always made by a party in opposition, and this was not done when the Conservative Party was in power. Certainly, the hon. Member for Worcestershire, South (Sir G. Nabarro), in 1962, recorded his vote against a very similar clause.
    Sir G. Nabarro: I do not want to get myself out of order by answering the hon. and learned Gentleman, who was not in the House in 1962 anyway and does not remember the circumstances and the continuous increase in Income Tax allowances granted by the Tory Party. But I want to follow up the interjection by my hon. Friend the Member for Tyne-mouth. "There is no reason why we should not start now", she said with characteristic candour and bluntness. I would add that there is a perfect analogy from the chapter of administration by the Labour Government, who brought in the wage-related benefits. A wage-related benefit is precisely the same as what we are pleading for in principle.
    Mr. Taverne: The hon. Member has a point in saying that the kind of problem with which we are concerned here is not dissimilar from other forms of social benefits, like a wage-related unemployment benefit, which was introduced by the Labour Government. The way that I should like to see this difficulty solved —I think that it is the right way in which the problem should be approached— would be through a social service benefit, which could be dealt with possibly—this is a matter which is being considered— by some wage-related contributions. So the hon. Member for Worcestershire, South, in his interruption, has very much reinforced the argument I was making at the beginning.
    I was saying that one cannot treat this allowance as separate. After all, the cost of living increase affects all forms of allowances. These are problems which one should consider together. On this problem, as the hon. Member for Garston will no doubt note, one must have regard to the overall economic circumstances of the time.
    For these reasons, with the greatest regret—I know that hon. Members will not readily accept this, but I think it is something which anyone who deals with

    1535
    the problem must feel—I cannot ask the House to accept the Clause.
    Lord Balniel: The hon. and learned Gentleman has concentrated his argument overwhelmingly on the proposal to extend the categories so as to cover all the disabled. We are in that respect disappointed with the argument which he has developed against the Clause. What he has not done is to explain to the House why he is not prepared to accept the specific proposal to restore the value of the allowance to the blind, which has been eroded now by 25 per cent.
    Mr. Taverne: I have done so. There are two answers. The first is the general answer, which, admittedly, I introduced by way of reply to an interjection from the hon. Member for Barry (Mr. Gower). That is that in this case a factor which one has to consider is whether one should use the money available in the best possible way by increasing tax allowances or whether one should seek to meet the problem by a general approach of social security. In the case of the increased tax allowance to the blind, once again the benefit of the concession would go not to those who are worse off, but to those who are comparatively better off.
    As to the second answer to the problem, I explained that the blind allowance was an additional allowance to other personal allowances, and that the kind of considerations about increases in the cost of living which apply to the blind allowance apply equally to other personal allowances. It is impossible to say that in the case of one particular allowance the cost-of-living index should operate and that in the case of other allowances it should not.
    Mr. Ridsdale: I have listened to what the Minister has had to say, and I think that he has been most callous towards a very needy section of the community. He has made promises about social service relief. I remind him that sympathy without relief is like mustard without beef.
    My hon. Friend the Member for Tyne-mouth (Dame Irene Ward) is right when she asks why we should not start helping people now. For this reason, I ask my hon. Friends to support me in the Division Lobby.
    Question put, That the Clause be read a Second time: —
    The House divided: Ayes 167, Noes 204.

    Division No. 262.]

    AYES

    [5.27 p.m.

    Alison, Michael (Barkston Ash)

    d'Avigdor-Goldsmid, Sir Henry

    Hordern, Peter

    Allason James (Hemel Hempstead)

    Dean, Paul (Somerset, N.)

    Hunt, John

    Astor, John

    Dodds-Parker, Douglas

    Iremonger, T. L.

    Awdry, Daniel

    Eden, Sir John

    Jenkin, Patrick (Woodford)

    Baker, Kenneth (Acton)

    Elliot, Capt. Walter (Carshalton)

    Johnson Smith, G. (E. Grinstead)

    Baker, W. H. K. (Banff)

    Emery, Peter

    Jopling, Michael

    Balniel, Lord

    Errington, Sir Eric

    Kirk, Peter

    Beamish, Col Sir Tufton

    Eyre, Reginald

    Knight, Mrs. Jill

    Bennett, Sir Frederic (Torquay)

    Farr, John

    Lane, David

    Bennett, Dr. Reginald (Gos. & Fhm)

    Fisher, Nigel

    Langford-Holt, Sir John

    Biggs-Davison, John

    Fletcher-Cooke, Charles

    Legge-Bourke, Sir Harry

    Birch, Rt. Hn. Nigel

    Fortescue, Tim

    Lewis, Kenneth (Rutland)

    Black, Sir Cyril

    Galbraith, Hn. T. G.

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

    Blaker, Peter

    Gibson-Watt, David

    Loveys, w. H.

    Boardman, Tom (Leicester, S.W.)

    Glover, Sir Douglas

    Lubbock, Eric

    Boyle, Rt. Hn. Sir Edward

    Glyn, Sir Richard

    McAdden, Sir Stephen

    Braine, Bernard

    Godber, Rt. Hn. J. B.

    MacArthur, Ian

    Brewis, John

    Gower, Raymond

    Mackenzie,Alasdair(Ross&Crom'ty)

    Bromley-Davenport,Lt.-Col.SirWalter

    Grant, Anthony

    Maclean, Sir Fitzroy

    Brown, Sir Edward (Bath)

    Griffiths, Eldon (Bury St. Edmunds)

    Macleod, Rt. Hn. Iain

    Bruce-Gardyne, J.

    Grimond, Rt. Hn. J.

    McMaster, Stanley

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

    Gurden, Harold

    Maddan, Martin

    Buck, Anthony (Colchester)

    Hall, John (Wycombe)

    Maginnis, John E.

    Campbell, B. (Oldham, West)

    Harris, Frederic (Croydon, N.W.)

    Marten, Neil

    Campbell, Gordon (Moray & Nairn)

    Harrison, Brian (Maldon)

    Maude, Angus

    Carr, Rt. Hn, Robert

    Harvey, Sir Arthur Vere

    Mawby, Ray

    Channon, H. P. G.

    Harvie Anderson, Miss

    Maxwell-Hyslop, R. J.

    Chichester-Clark, R.

    Hawkins, Paul

    Mills, Peter (Torrington)

    Clegg, Walter

    Heald, Rt. Hn. Sir Lionel

    Miscampbell, Norman

    Cooke, Robert

    Heath, Rt. Hn. Edward

    Monro, Hector

    Corfield, F. V.

    Higgins, Terence L.

    Montgomery, Fergus

    Costain, A. P.

    Hill, J. E. B.

    More, Jasper

    Craddock, Sir Beresford (Spelthorne)

    Hirst, Geoffrey

    Morgan, Geraint (Denbigh)

    Cunningham, Sir Knox

    Hogg, Rt. Hn. Quintin

    Munro-Lucas-Tooth, Sir Hugh

    Dance, James

    Holland, Philip

    Murton, Oscar

    Davidson, James (Aberd'nshire, W.)

    Hooson, Emlyn

    Nabarro, Sir Gerald

    Nicholls, Sir Harmar

    Royle, Anthony

    Waddington, D.

    Noble, Rt. Hn. Michael

    Russell, Sir Ronald

    Wainwright, Richard (Colne Valley)

    Nott, John

    Scott, Nicholas

    Walker, Peter (Worcester)

    Onslow, Cranley

    Scott-Hopkins, James

    Walker-Smith, Rt. Hn. Sir Derek

    Orr-Ewing, Sir Ian

    Sharples, Richard

    Walters, Dennis

    Osborn, John (Hallam)

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

    Ward, Dame Irene

    Osborne, Sir Cyril (Louth)

    Sinclair, Sir George

    Weatherill, Bernard

    Page, Graham (Crosby)

    Smith, John (London & W'minster)

    Wells, John (Maidstone)

    Page, John (Harrow, W.)

    Speed, Keith

    Whitelaw, Rt. Hn. William

    Pardoe, John

    Stainton, Keith

    Williams, Donald (Dudley)

    Pearson, Sir Frank (Clitheroe)

    Summers, Sir Spencer

    Wills, Sir Gerald (Bridgwater)

    Peel, John

    Tapsell, Peter

    Wilson, Geoffrey (Truro)

    Percival, Ian

    Taylor, Sir Charles (Eastbourne)

    Winstanley, Dr. M. P.

    Pike, Miss Mervyn

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

    Wolrige-Gordon, Patrick

    Powell, Rt. Hn. J. Enoch

    Taylor, Frank (Moss Side)

    Worsley, Marcus

    Prior, J. M. L.

    Temple, John M.

    Wylie, N. R.

    Pym, Francis

    Thatcher, Mrs. Margaret

    Younger, Hn. George

    Ramsden, Rt. Hn. James

    Turton, Rt. Hn. R. H.

    Rhys Williams, Sir Brandon

    van Straubenzee, W. R.

    TELLERS FOR THE AYES:

    Ridsdale, Julian

    Vaughan-Morgan, Rt. Hn. Sir John

    Mr. R. W. Elliott and

    Rossi, Hugh (Hornsey)

    Vickers, Dame Joan

    Mr. Timothy Kitson.

    NOES

    Albu, Austen

    Fletcher, Ted (Darlington)

    Mahon, Simon (Bootle)

    Allaun, Frank (Salford, E.)

    Foot, Michael (Ebbw Vale)

    Mallalieu, E. L. (Brigg)

    Allen, Scholefield

    Forrester, John

    Manuel, Archie

    Anderson, Donald

    Fraser, John (Norwood)

    Marquand, David

    Archer, Peter

    Freeson, Reginald

    Mason, Rt. Hn. Roy

    Armstrong, Ernest

    Galpern, Sir Myer

    Mayhew, Christopher

    Atkins, Ronald (Preston, N.)

    Garrett, W. E.

    Mendelson, J. J.

    Atkinson, Norman (Tottenham)

    Gourlay, Harry

    Millan, Bruce

    Barnes, Michael

    Gray, Dr. Hugh (Yarmouth)

    Miller, Dr. M. S.

    Barnett, Joel

    Greenwood, Rt. Hn. Anthony

    Milne, Edward (Blyth)

    Baxter, William

    Griffiths, Eddie (Brightside)

    Molloy, William

    Beaney, Alan

    Griffiths, Rt. Hn. James (Llanelly)

    Moonman, Eric

    Bence, Cyril

    Griffiths, Will (Exchange)

    Morgan, Elystan (Cardiganshire)

    Bennett, James (G'gow, Bridgeton)

    Hamilton, James (Bothwell)

    Morris, Charles R. (Openshaw)

    Bishop, E. S.

    Hamilton, William (Fife, W.)

    Moyle, Roland

    Blenkinsop, Arthur

    Hamling, William

    Neal, Harold

    Boston, Terence

    Hannan, William

    Newens, Stan

    Bottomley, Rt. Hn. Arthur

    Harper, Joseph

    Norwood, Christopher

    Braddock, Mrs. E. M.

    Harrison, Walter (Wakefield)

    Oakes, Gordon

    Bradley, Tom

    Heffer, Eric S.

    Ogden, Eric

    Bray, Dr. Jeremy

    Henig, Stanley

    O'Malley, Brian

    Brooks, Edwin

    Herbison, Rt. Hn. Margaret

    Oram, Albert E.

    Brown, Rt. Hn. George (Belper)

    Hooley, Frank

    Orme, Stanley

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

    Homer, John

    Oswald, Thomas

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

    Houghton, Rt. Hn. Douglas

    Owen, Will (Morpett)

    Buchan, Norman

    Howarth, Harry (Wellingborough)

    Page, Derek (King's Lynn)

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

    Hoy, James

    Palmer, Arthur

    Cant, R. B.

    Huckfield, Leslie

    Pannell, Rt. Hn. Charles

    Carmichael, Neil

    Hughes, Emrys (Ayrshire, S.)

    Parkyn, Brian (Bedford)

    Carter-Jones, Lewis

    Hughes, Hector (Aberdeen, N.)

    Pavitt, Laurence

    Chapman, Donald

    Hughes, Roy (Newport)

    Pearson, Arthur (Pontypridd)

    coe, Denis

    Hunter, Adam

    Peart, Rt. Hn. Fred

    Coleman, Donald

    Irvine, Sir Arthur (Edge Hill)

    Pentland, Norman

    Conlan, Bernard

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

    Perry, Ernest G. (Battersea, S.)

    Cronin, John

    Jenkins, Hugh (Putney)

    Perry, Ceorge H. (Nottingham, S.)

    Cullen, Mrs. Alice

    Jenkins, Rt. Hn. Roy (Stechford)

    Prentice, Rt. Hn. R. E.

    Dalyell, Tam

    Johnson, Carol (Lewisham, S.)

    Price, Thomas (Westhoughton)

    Darling, Rt. Hn. George

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

    Probert, Arthur

    Davidson, Arthur (Accrington)

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

    Rankin, John

    Davies, Ednyfed Hudson (Conway)

    Jones, J. Idwal (Wrexham)

    Rees, Merlyn

    Davies, Harold (Leek)

    Judd, Frank

    Richard, Ivor

    Davies, Ifor (Gower)

    Kelley, Richard

    Robertson, John (Paisley)

    Dell, Edmund

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

    Rodgers, William (Stockton)

    Dempsey, James

    Kerr, Russell (Feltham)

    Rogers, George (Kensington, N.)

    Dewar, Donald

    Lawson, George

    Rose, Paul

    Diamond, Rt. Hn. John

    Ledger, Ron

    Rowlands, E. (Cardiff, N.)

    Dickens, James

    Lever, Harold (Cheetham)

    Sheldon, Robert

    Doig, Peter

    Lewis, Arthur (W. Ham, N.)

    Shore, Rt. Hn. Peter (Stepney)

    Dunnett, Jack

    Lomas, Kenneth

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

    Dunwoody, Mrs. Gwyneth (Exeter)

    Loughlin, Charles

    Silkin, Rt. Hn. John (Deptford)

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

    Mabon, Dr. J. Dickson

    Silkin, Hn. S. C. (Dulwich)

    Edwards, Robert (Bilston)

    McBride, Neil

    Silverman, Julius

    Edwards, William (Merioneth)

    MacColl, James

    Slater, Joseph

    Ellis, John

    Macdonald, A. H.

    Small, William

    English, Michael

    McGuire, Michael

    Snow, Julian

    Ensor, David

    Mackenzie, Cregor (Rutherglen)

    Spriggs, Leslie

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

    Mackintosh, John P.

    Steele, Thomas (Dunbartonshire, W.)

    Faulds, Andrew

    Maclennan, Robert

    Stewart, Rt. Hn. Michael

    Fernyhough, E.

    McNamara, J. Kevin

    Strauss, Rt. Hn. G. R.

    Fletcher, Raymond (Ilkeslon)

    Mahon, Peter (Preston, S.)

    Swingler, Stephen

    1538

    1539

    Taverne, Dick

    Watkins, Tudor (Brecon & Radnor)

    Williams, W. T. (Warrington)

    Thornton, Ernest

    Wellbeloved, James

    Willis, Rt. Hn. George

    Tinn, James

    Whitaker, Ben

    Wilson, Rt. Hn. Harold (Huyton)

    Tuck, Raphael

    White, Mrs. Eirene

    Winnick, David

    Urwin, T. W.

    Whitlock, William

    Woof, Robert

    Varley, Eric G.

    Wilkins, W. A.

    Yates, Victor

    Walker, Harold (Doncaster)

    Williams, Alan (Swansea, W.)

    Wallace, George

    Williams, Alan Lee (Hornchurch)

    TELLERS FOR THE NOES:

    Watkins, David (Consett)

    Williams, Mrs. Shirley (Hitchin)

    Mr. Alan Fitch and

    Mr. John McCann.

    New Clause 42
    OLD AGE RELIEF AND RELIEF FOR BLIND PERSONS
    Notwithstanding anything in the Income Tax Acts to the contrary, the rule that old age relief shall be in substitution for and not in addition to relief for blind persons shall cease to have effect.—[Mr. Ridsdale.]
    Brought up, and read the First time.
    Motion made, and Question put, That the Clause be read a Second time.
    The House divided: Ayes 167, Noes 215.

    Division No. 263.]

    AYES

    5.37 P. M.

    Alison, Micheal (Barkston Ash)

    Griffths, Eldon (Bury St. Edmunds)

    Page, Graham (Crosby)

    Allson,James (Hemel Hemphstead)

    Grimond, Rt. Hn. J.

    Page, John (Harrow, W.)

    Astor, John

    Gurden, Harold

    Pardoe, John

    Hall, John (Wycombe)

    Pearson, Arthur (Clitheroe)

    Awdry, Daniel

    Harris, Frederic (Croydon, N.W.)

    Peel, John

    Baker, Kenneth (Acton)

    Harrison, Brian (Maldon)

    Percival, Ian

    Baker, W. H. K. (Banff)

    Harvey, Sir Arthur Vere

    Pike, Miss Mervyn

    Balniel, Lord

    Harvie Anderson, Miss

    Pounder, Rafton

    Beamish, Col. Sir Tufton

    Hawkins, Paul

    Powell, Rt, Hn. J. Enoch

    Bennett, Dr. Reginald (Gos. & Fhm)

    Heald, Rt. Hn. Sir Lionel

    Prior, J. M. L.

    Biggs-Davison, John

    Heath, Rt. Hn. Edward

    Pym, Francis

    Birch, Rt. Hn. Nigel

    Higgins, Terence L.

    Ramsden Rt. Hn James

    Black, Sir Cyril

    Hill, J. E. B.

    Rhys Williams, Sir Brandon

    Blaker, Peter

    Hirst, Geoffrey

    Ridsdale, Julian

    Boardman, Tom (Leicester, S.W.)

    Holland, Philip

    Rossi, Hugh (Hornsey)

    Bossom, Sir Clive

    Hooson, Emlyn

    Royle, Anthony

    Boyle, Rt. Hn. Sir Edward

    Hordern, Peter

    Russell, Sir Ronald

    Braine, Bernard

    Hunt, John

    Scott, Nicholas

    Brewis, John

    Iremonger, T. L.

    Scott-Hopkins, James

    Bromley-Davenport, Lt,-Col. Sir Walter

    Jenkin, Patrick (Woodford)

    Sharples, Richard

    Brown, Sir Edward (Bath)

    Johnson Smith, G. (E. Grinstead)

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

    Bruce-Gardyne, J.

    Jopling, Micheal

    Sinclair, Sir George

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

    Kirk, Peter

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

    Buck, Anthony (Colchester)

    Knight, Mrs. Jill

    Smith, John (Londen & W'minster)

    Camphell, B. (Oldham, West)

    Campbell, Gordon (Moray & Nairn)

    Lane, David

    Speed, Keith

    Carr, Rt. Hn. Robert

    Langford-Holt, Sir John

    Stainton, Keith

    Channon, H. P. G.

    Legge-Bourke, Sir Harry

    Summers, Sir Spencer

    Chisester-Clark, R.

    Lewis, Kenneth (Ruthland)

    Tapsell, Peter

    Clegg, Walter

    Lloyd, Rt. Hn. Geofferoy n(Sut'nC'dfield)

    Taylor, Sir Charles (Eastbourne)

    Cooke, Robert

    Loveys, W. H.

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

    Corfield, F. V.

    Lubbock, Eric

    Taylor, Frank (Moss Side)

    Costain, A. P

    McAdden, Sir Stephen

    Temple, John M.

    Craddock, Sir Beresford (Spelthrone)

    MacArthur, lan

    Thatcher, Mrs. Margarett

    Cunningham, Sir Knox

    Mackenzie, Alasdair (Ross&Crom'ty)

    Turton, Rt. Hn. R. H.

    Dance, James

    Maclean, Sir Fitzroy

    Van Straubenzee, W. R.

    Davidson, James (Aberdeenshire W.)

    Macleod, Rt. Hn. lain

    Vaughan-Morgon, Rt. Hn. Sir John

    d'Avigdor-Goldsmid, Sir Hendry

    McMaster, Stanley

    Vickers, Dame Joan

    Dean, Paul (Somerset, N.)

    Madden, Martin

    Waddington, D.

    Dodds-Parker, Douglas

    Marten, Neil

    Wainwright, Richard (Colne Valley)

    Eden, Sir John

    Maude, Argus

    Walker-Smith, Rt. Hn. Sir Derek

    Elliot, Capt. Walter (Carshalton)

    Mawby, Ray

    Walters, Dennis

    Emry, Peter

    Maxwell-Hyslop, R. J.

    Ward, Dame Irene

    Errington, Sir Eric

    Mills, Peter (Torrington)

    Weatherill, Bernard

    Eyre, Reginald

    Mischamphell, Norman

    Wells, John (Maidstone)

    Farr, John

    Monro, Hector

    Whitelaw, Rt. Hn. William

    Fisher, Nigel

    Montegomery, Fernus

    Williams, Donald (Dudley)

    Fletcher-Cooke, Charles

    More Jasper

    Wills, Sir Gerald (Bridgewater)

    Fortescue, Tim

    Morgan, Geraint (Denbigh)

    Wilson, Geoffery (Truro)

    Galbraith, Hn. T. G.

    Munro-Lucas-Tooth, Sir Hugh

    Winstanley, Dr. M. P.

    Gibson-Watt, David

    Murton, Oscar

    Wolridge-Gorden, Patrick

    Glover, Sir Douglas

    Nabarro, Sir Gerald

    Worsley, Marcus

    Glyn, Sir Richard

    Nicholls, Sir Harmer

    Wylie, N. R.

    Godber, Rt. Hn. J. B.

    Nott, John

    Younger, Hn. George

    Goodhart, Philip

    Onslow, Cranley

    Goodhew, Victor

    Orr-Ewing, Sir Ian

    TELLERS FOR THE AYES:

    Gower, Raymond

    Osborn, John (Hallam)

    Mr. R. W. Elliott and

    Grant, Anthony

    Osborne, Sir Cyrill (Louth)

    Mr. Timothy Kitson

    NOES

    Albu, Austen

    Greenwood, Rt. Hn. Anthony

    Oakes, Gordon

    Allaun, Frank (Salford, E.)

    Gregory, Arnold

    Ogden, Eric

    Alldritt, Walter

    Griffiths, Eddie (Brigntside)

    O'Malley, Brian

    Allen, Scholefield

    Griffiths, Rt. Hn. James (Llanelly)

    Oram, Albert E.

    Anderson, Donald

    Griffiths, Will (Exchange)

    Orme, Stanley

    Archer, Peter

    Hamilton, James (Bothwell)

    Oswald, Thomas

    Armstrong, Ernest

    Hamilton, William (Fife, W.)

    Owen, Will (Morpeth)

    Atkins, Ronald (Preston, N.)

    Hamling, William

    Page, Derek (King's Lynn)

    Atkinson, Norman (Tottenham)

    Hannan, William

    Paget, R. T.

    Barnes, Michael

    Harrison, Walter (Wakefield)

    Palmer, Arthur

    Barnett, Joel

    Haseldine, Norman

    Pannell, Rt. Hn. Charles

    Baxter, William

    Heffer, Eric S.

    Parkyn, Brian (Bedford)

    Beaney, Alan

    Henig, Stanley

    Pavitt, Laurence

    Bence, Cyril

    Herbison, Rt. Hn. Margaret

    Pearson, Arthur (Pontypridd)

    Bennett, James (G'gow, Bridgeton)

    Hooley, Frank

    Peart, Rt. Hn. Fred

    Bishop, E. S.

    Horner, John

    Pentland, Norman

    Blackburn, F.

    Houghton, Rt. Hn. Douglas

    Perry, Ernest G. (Battersea, S.)

    Blenkinsop, Arthur

    Howarth, Harry (Wellingborough)

    Perry, George H. (Nottingham, S.)

    Boardman, H. (Leigh)

    Hoy, James

    Prentice, Rt. Hn. R. E.

    Boston, Terence

    Huckfield, Leslie

    Price, Thomas (Westhoughton)

    Bottomley, Rt. Hn. Arthur

    Hughes, Emrys (Ayrshire, S.)

    Price, William (Rugby)

    Braddock, Mrs. E. M.

    Hughes, Hector (Aberdeen, N.)

    Probert, Arthur

    Bradley, Tom

    Hughes, Roy (Newport)

    Rankin, John

    Bray, Dr. Jeremy

    Hunter, Adam

    Rees, Merlyn

    Brooks, Edwin

    Irvine, Sir Arthur (Edge Hill)

    Richard, Ivor

    Brown, Rt. Hn. George (Belper)

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

    Roberts, Albert (Normanton)

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

    Jenkins, Hugh (Putney)

    Robertson, John (Paisley)

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

    Jenkins, Rt. Hn. Roy (Stechford)

    Rodgers, William (Stockton)

    Buchan, Norman

    Johnson, Carol (Lewisham, S.)

    Rogers, George (Kensington, N.)

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

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

    Rose, Paul

    Cant, R. B.

    Jones, Dan (Burnley)

    Rowlands, E. (Cardiff, N.)

    Carmichael, Neil

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

    Sheldon, Robert

    Carter-Jones Lewis

    Jones, J. Idwal (Wrexham)

    Shore, Rt. Hn. Peter (Stepney)

    Chapman, Donald

    Judd, Frank

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

    Coe, Denis

    Kelley, Richard

    Silkin, Rt. Hn. John (Deptford)

    Coleman, Donald

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

    Silkin, Hn. S. C. (Dulwich)

    Conlan, Bernard

    Ledger, Ron

    Silverman, Julius

    Cronin, John

    Lever, Harold (Cheetham)

    Slater, Joseph

    Cullen, Mrs. Alice

    Lewis, Arthur (W. Ham, N.)

    Small, William

    Dalyell, Tam

    Lewis, Ron (Carlisle)

    Snow, Julian

    Darling, Rt. Hn. George

    Lipton, Marcus

    Spriggs, Leslie

    Davidson, Arthur (Accrington)

    Lomas, Kenneth

    Steele, Thomas (Dunbartonshire, W.)

    Davies, Ednyfed Hudson (Conway)

    Loughlin, Charles

    Strauss, Rt. Hn. G. R.

    Davies, Harold (Leek)

    Lyons, Edward (Bradford, E.)

    Swingler, Stephen

    Davies, Ifor (Gower)

    Mabon, Dr. J. Dickson

    Symonds, J. B.

    Dell, Edmund

    McBride, Neil

    Taverne, Dick

    Dempsey, James

    McCann, John

    Thornton, Ernest

    Dewar, Donald

    MacColl, James

    Tinn, James

    Diamond, Rt. Hn. John

    Macdonald, A. H.

    Tuck, Raphael

    Dickens, James

    McGuire, Michael

    Urwin, T. W.

    Doig, Peter

    Mackenzie, Gregor (Rutherglen)

    Varley, Eric G.

    Dunn, James A.

    Mackintosh, John P.

    Walker, Harold (Doncaster)

    Dunnett, Jack

    Maclennan, Robert

    Wallace, George

    Dunwoody, Mrs. Gwyneth (Exeter)

    McNamara, J. Kevin

    Watkins, David (Consett)

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

    Mahon, Peter (Preston, S.)

    Watkins, Tudor (Brecon & Radnor)

    Edwards, Robert (Bilston)

    Mahon, Simon (Bootle)

    Wellbeloved, James

    Edwards, William (Merioneth)

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

    Whitaker, Ben

    Ellis, John

    Manuel, Archie

    White, Mrs. Eirene

    English, Michael

    Marquand, David

    Whitlock, William

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

    Mason, Rt. Hn. Roy

    Wilkins, W. A.

    Faulds, Andrew

    Mayhew, Christopher

    Williams, Alan (Swansea, W.)

    Fernyhough, E.

    Mendelson, J. J.

    Williams, Alan Lee (Hornchurch)

    Fletcher, Raymond (Ilkeston)

    Millan, Bruce

    Williams, Mrs. Shirley (Hitchin)

    Fletcher, Ted (Darlington)

    Miller, Dr. M. S.

    Williams, W. T. (Warrington)

    Foot, Michael (Ebbw Vale)

    Milne, Edward (Blyth)

    Willis, Rt. Hn. George

    Ford, Ben

    Molloy, William

    Wilson, Rt. Hn. Harold (Huyton)

    Forrester, John

    Moonman, Eric

    Winnick, David

    Fraser, John (Norwood)

    Morgan, Elystan (Cardiganshire)

    Woof, Robert

    Freeson, Reginald

    Morris, Charles R. (Openshaw)

    Yates, Victor

    Galpern, Sir Myer

    Moyle, Roland

    Garrett, W. E.

    Neal, Harold

    TELLERS FOR THE NOES:

    Gourlay,Harry

    Newens, Stan

    Mr. Alan Fitch and

    Gray, Dr. Hugh (Yarmouth)

    Norwood, Christopher

    Mr. Joseph Harper.

    New Clause 51
    AMENDMENTS TO SCHEDULE 17 TO THE FINANCE ACT, 1965
    In sub-paragraph (3) of paragraph 4 of Schedule 17 to the Finance Act 1965 the words ' company and that other company' shall be substituted for the words ' three companies' in both places where they occur.— [Mr. Patrick Jenkin.]
    Mr. Patrick Jenkin: I beg to move, That the Clause be read a Second time.
    Mr. Deputy Speaker (Sir Eric Fletcher): I suggest that at the same time we take the Government Amendment to the new Clause.
    Mr. Jenkin: The appearance of the Chancellor's Amendment to the Clause encourages me to move it extremely briefly. It is concerned to make a very minor amendment to the rules about dividend stripping, and I shall resist the temptation to describe at length to the House how those rules operate. Suffice it to say that they prescribe special treatment for dealings between associated companies, and the full rigours of Section 65 of the 1965 Act do not apply if certain conditions are satisfied.
    Schedule 17 of the 1965 Act sets out some of the detailed rules and paragraph 4(3) of that Schedule deals with dealings between associated companies. However, the Schedule is rather strangely worded in that it is not only the selling and the buying company which must be associated, but also the company in whose shares the dealings are being made. It has been suggested to us that this is an unnecessary refinement and that the relaxation of the normal rules could equally well be applied if it were a company which was in no way associated with the transferor and transferee company, and the new Clause makes this very small but desirable change.
    Perhaps I should indicate that the Amendment seems to us to be a reasonable improvement and we shall have no difficulty about accepting it. In the hope that with the Amendment the Government may be able to accept the Clause, I have pleasure in commending it to the House.
    Question put and agreed to.
    Clause read a Second time.
    The Chief Secretary to the Treasury (Mr. John Diamond): I beg to move, as an Amendment to the proposed Clause, at end insert:
    (2) This section applies to a distribution made after 10th April, 1968.
    The hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin) was as accurate as ever in describing the condition which the new Clause seeks to remove. It is a condition which at one time we thought necessary for the protection of the revenue where there was this group relief in connection with dividend stripping. We are prepared to believe that it is no longer necessary and in those circumstances I was happy silently to accept the hon. Gentleman's proposal. I have risen only to thank him for the way in which he has moved the Clause.
    The Amendment, which he has indicated would be acceptable to him, is one providing for a starting date for the relaxation. Without a starting date, the matter would be open to some doubt. The date is the appropriate one, the same as has been taken for Capital Gains Tax changes in Schedule 12, which already in-includes one relaxation of the same dividend-stripping rules.
    Amendment agreed to.
    Clause, as amended, added to the Bill.

    New Clause 77
    VICTIMS OF NATIONAL SOCIALIST PERSECUTION
    In the case of pensions or annuities payable to victims of National Socialist persecution by the Austrian Federal Republic, by any part of that Republic, or under Austrian social insurance legislation that part of the pension or annuity which corresponds to the ratio that the period credited to the victim free of contribution bears to the total period taken into account for the purpose of computation of the pension or annuity, shall not be regarded as income for any income tax purposes.—[Sir H. d'Avigdor-Goldsmid.]
    Brought up, and read the First time.
    Sir Henry d'Avigdor-Goldsmid: I beg to move, That the Clause be read a Second time.
    I should perhaps begin by expressing my sincere gratitude to Mr. Speaker for selecting this small new Clause, and also to hon. Gentlemen on both sides of the

    1545
    House for their patience in devoting themselves to a matter which involves only a small number of people. It is an honourable tradition that these matters are given the consideration of the House, even though the number of people affected is small.
    The short object of this Clause is to bring the fiscal treatment of refugees from Nazi oppression who come from Austria into line: with that afforded to those who have come from Germany. The fiscal treatment of the former German refugees has been before this House on a number of occasions. My hon. and learned Friend the Member for Northwich (Sir J. Foster) moved a new Clause, seeking relief for them in 1957 which was negatived. In 1960 my hon. Friend the Member for Hendon, South (Sir H. Lucas-Tooth) moved a new Clause, very ingeniously phrased with a similar purpose, which was withdrawn.
    It is clear that what was said on that occasion sunk in, because my right hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd) introduced into his Finance Bill of 1961 a Clause which became Section 22 of the Act, and which performed the tasks for which permission of the House had been previously sought. Section 22(1) of the Finance Act, 1961, reads:
    "Annuities payable under the law of the Federal German Republic relating to the compensation of victims of National-Socialist persecution, being annuities which under any such law relating to the taxation of such compensation are specifically exempted from tax of a character similar to that of income tax, shall not be regarded as income for any income tax purposes."
    Hon. Members may ask why this is not applicable to Austria. The reason is that the Austrian Government have not created annuities in such similar terms. It is not for me to inquire into the reasons governing the Austrian Government in this matter, but instead of agreeing to make these annual payments to the victims of Nazism the have preferred to make generous provision for them under their own State social insurance scheme.
    They have deemed as fully paid the contributions which the victim would have paid, assuming normal conditions, had it not been for the war. The period for which the Austrian Government has made these contributions runs from 1933
    1546
    to the fixed date of 1st April, 1959. Thus, a man who emigrated in, say, 1939, at the age of 30, and is now in receipt of a pension, finds himself receiving a pension based on 40 annual contributions, for some of which he may have paid before leaving Austria, some of which he may have paid subsequent to 1959, but 20 of which will have been credited to his account by the Austrian Government, without any contribution on his part.
    This Clause seeks to ensure that the proportion of his pension which is covered by the Austrian Government's uncovenanted contribution is recognised by the Government as a form of indemnification for injustice inflicted on the beneficiary by the Nazis. On that basis, it is suggested that it should likewise be freed from British taxation. I would remind hon. Members that before 1961 it was agreed by the Revenue that indemnification payments made by the German Government to Nazi victims should escape British taxation. This refers to payments made by the German Government in respect of physical injury or damage to the health of the person concerned.
    The view which the Clause seeks to put forward is that the unconvenanted proportion of this pension is a form of indemnification payment. It is recognised as such by the Austrian Government, and I hope that our Government will see it in this light, and agree that it should escape British Income Tax. I can tell the Minister of State that if he accepts this Clause, the number of former Austrian citizens living here who can expect to benefit is in the neighbourhood of 4,000. I also understand that the Austrian Government are prepared to furnish to the Revenue the relevant information about those individuals, so that correct assessments can be prepared.
    During the 1960 debate my right hon. Friend the Member for Birmingham, Handsworth (Sir E. Boyle), replying on behalf of the Government, said:
    "This is matter which causes the Committee some disquiet. It is always a difficult position when, on the one hand, you may be creating an anomaly and a sense of injustice between one individual and another according to the tax code of our country, but, on the other, I recognise that Nazi persecution is something very different fortunately, from most things which the modern world has ever known."— [OFFICIAL REPORT, 22nd June, 1960; Vol. 625, c. 636.]

    1547
    It was on the strength of that admission by my right hon. Friend, then replying on behalf of the Government, that my right hon. and learned Friend the Member for Wirral brought in the provision in the 1961 Finance Act.
    6.0 p.m.
    Mr. Taverne: The hon. Member for Walsall, South (Sir H. d'Avigdor-Goldsmid) has raised a very difficult matter which I am sure has the sympathy of the whole House. He has drawn a parallel with exemption tax on payments made by the Federal German Government which, on the face of it, is a parallel calling for action, although I am not sure whether on closer examination it is a real parallel.
    We start with a general principle of tax law which is of some importance, namely, that receipts of an income nature are taxable, whatever their source. If one starts looking at the general question, it becomes extremely difficult to differentiate between different sources of income which often may be payments arising from the most distressing circumstances and to say that in certain cases the origin of the payments can be a ground for exemption and in other cases not.
    On the face of it, there was an exemption in 1961 for certain victims of Nazi persecution which would seem to give rise, in principle, reason and logic, apart from grounds of sympathy, to the argument that exactly the same test should be applied to other victims of Nazi persecution. But the reason why this special provision was made in 1961 was not only out of sympathy for the victims of Nazi persecution, victims of perhaps the greatest crime this century has known, but also because of the special circumstances in which the annuity in which they were paid became payable.
    The background to the matter is this. The Federal German Government made specific provision for exempting those to whom they paid compensation from their tax law. They said that there was a limited amount which they felt they could afford to pay, and, to increase the amount which they felt able to pay to the victims of Nazi persecution, they exempted the payments from their general tax laws and said that they should not bear tax. They then requested all foreign Governments in the countries in which other vic-
    1548
    tims of Nazi persecution who received these payments resided to make similar exemptions in their tax law in respect of them.
    The reason it was felt possible to depart from the general rule that one should not look at the source from which taxable payments come in deciding whether they should be exempt from tax was that in this case the amount was calculated on the basis that the payments should be exempt from tax and it was, therefore, agreed that they should also be exempted from tax in the United Kingdom. No such special circumstances existed for pensions or social security payments made by the Federal German Government payable to other people who happened to be victims of Nazi persecution.
    In this case, the position is rather different. As the hon. Member for Walsall, South said, the Austrian Government have said that persons whose pensions would otherwise be greater but for the fact that they had not paid contributions at the time of Nazi persecution should be paid their pensions in full. But, as I understand the position, these pension payments in Austria are subject to the general Austrian tax law and there is no provision that they should be exempt from Austrian tax law. In that sense, they are in a different position from the special category of payments covered by Section 22 of the 1961 Act.
    I understood that the number of cases involved was very small. I now gather from the hon. Member for Walsall, South that about 4,000 people are affected. In the past, the Revenue came across Austrians who had been compensated under Section 22. Although they were not former German subjects, the Revenue found that the cases were very few and the payments were very small, and any tax which might have been due was given up on the grounds that the case was not worth pursuing.
    I shall look at that question again, but, on the general principle, there is a distinction between the 1961 case and this case. This is not an annuity paid in the same way which is exempt from tax. This is an ordinary pension made up to those who could not pay their full contributions. In that special case, there would not seem to be special grounds for changing the general principle when so often one gets circumstances in which,

    1549
    under the law, the pension becomes payable but, nevertheless, the source for payment of an Income Tax nature cannot be looked at by the Revenue.
    Sir H. d'Avigdor Goldsmid: Since I took part in the debates which I mentioned earlier, I am not surprised by the Minister of State's reply. We have heard before the arguments which he used. However, I am happy to hear that he is prepared to keep his eye on this matter. I cheer myself by looking at what my right hon. Friend the Member for Hands-worth (Sir E. Boyle), said when replying to a similar debate in 1960:
    "I can certainly give the hon. Gentleman the assurance that in all our future studies of this problem we will gain as much help as we can by considering the position of other countries …".—[OFFICIAL REPORT, 22nd June, 1960; Vol. 625, c. 637.]
    My right hon. Friend did not give a pledge, but said that the problem would be studied. Because I regard the Minister of State's reply as not wholly negative, I beg to ask leave to withdraw the Motion.
    Motion and Clause, by leave, withdrawn.

    Clause 5
    PURCHASE TAX
    Mr. Taverne: I beg to move Amendment No. 185, in page 5, line 13, at end insert:
    'and
    (c) as from 1st July, 1968, with the amendment of group 24 by the addition after paragraph (4) of the exemptions of the following paragraph: —
    "(5) The following projectors namely—

    (i) cinematograph projectors suitable only for film of 16 mm. width;

    (ii) projectors suitable only for filmstrip;

    (iii) cassette loaded loop projectors,

    and parts and accessories suitable only for use with a projector of any of those descriptions"'.

    I am somewhat embarrassed by not having before me the Amendment which one of my colleagues was to move. I move the Amendment formally, and my right hon. Friend the Chief Secretary can explain the reasons for it.
    Mr. Diamond: I apologise for the fact that I was momentarily discussing
    1550
    another matter when the Amendment was so ably and accurately moved by my hon. and learned Friend the Minister of State. There was only one thing which he did not make absolutely clear, and perhaps you, Mr. Deputy Speaker, could supply us with the information, namely, the precise number of the Amendment.
    Mr. Deputy Speaker: It might help the House if I were to indicate that Mr. Speaker has suggested that with Amendment No. 185 we discuss Amendment No. 24 to Schedule 6, in page 55, leave out line 44.
    Amendment No. 183, page 57, line 5, leave out 'and filmstrip'.
    Amendment No. 180, page 57, line 7, at end insert:
    (3) Automatic motorised film-editing machines for 16 mm. film, and with separate sound track.
    Amendment No. 181, page 57, line 7, at end insert:
    (3) 16 mm. cinematograph projectors.
    Amendment No. 182, page 57, line 9, after 'width', insert 'filmstrip projectors'.
    Mr. Diamond: I am obliged, Mr. Deputy Speaker, particularly because what you have said makes clear that my hon. and learned Friend was over-modest in withdrawing from the Dispatch Box rather than speaking to his own Amendment.
    Mr. Taverne: I apologise—
    Sir Stephen McAdden: On a point of order. May I ask whether the hon. and learned Gentleman has exhausted his right to speak?
    Mr. Deputy Speaker: The Minister has the right to reply to any Amendment in his name. He is also in the privileged position of being able to speak more than once on Report. It would be right to ask the Minister of State to continue his speech.
    Mr. Terence L. Higgins: Further to that point of order. May we know whether the Chief Secretary or the Minister of State is moving the Amendment? It is confusing if they bob up and down alternately.
    Mr. Deputy Speaker: The Amendment has been moved by the Minister of State.

    1551
    The Chief Secretary has spoken briefly and the Minister of State is making a second speech.
    Mr. Taverne: I must apologise for an error which arose from Amendment No. 53, which I understood had considerable support but which was not moved.
    The purpose of this Amendment is to exempt certain projectors specified in the Amendment. In Committee, I undertook to look at the question of certain projectors, particularly 16 mm. cine projectors and film strip projectors, which, it was argued, are largely used for educational purposes. We have found that outside the educational and industrial field the 16 mm. cine projector is used, for the most part, only by the advanced amateur who wants improved performance and by film-making societies. It is, therefore, clear that in the vast majority of cases the 16 mm. projector is used either in education or in industry for training purposes. It is, therefore, proposed to exempt them as a class.
    The same is equally true of film strip projectors. Many of these slide projectors can be adapted to take film strip by an interchangeable carrier. It will, therefore, be necessary to confine the exemption to the projectors suitable only for film strip.
    This is to some extent a matter which arises out of the other Amendments to be taken at the same time, but the nature of Purchase Tax is such that one cannot look at a particular purpose for which an object may or may not be used. At the time tax is imposed one does not necessarily know for what particular purpose the object will be used. One cannot say that, because in certain cases an object may be used for educational purposes, or has been used for educational purposes, but in other cases not, therefore it should be exempt from Purchase Tax and others should not be exempt.
    Further representations were received in respect of the loop projectors which are widely used for training and educational purposes. These projectors are specialised for use with a distinctive type of cassette which enables a short run of film to be shown over and over again in a continuous loop, and can be regarded as a satisfactorily definable class for the purpose of exemption; because, of
    1552
    course, if a class is definable as a class which, by its very nature, is likely to be used mainly for educational or industrial purposes, then it is possible to grant exemption.
    During our proceedings the hon. Member for Worthing (Mr. Higgins) raised the question of overhead projectors, because, he said, these were also identifiable in the same way. I think that he described them as a kind of projector used by schools and institutions. I then said that I would make inquiries about what these overhead projectors showed and how far they would be covered by any exemptions we might be able to make. I should tell the hon. Member for Worthing that overhead projectors which show neither film nor conventional slides are not regarded as within the scope of the present charge on cinematographic film strip slide projectors, and, therefore, it is not necessary to provide any exemption in their case.
    Mr. Higgins: It is unfortunate that there was some confusion at the beginning of the Ministerial statements on this point, because I am not entirely clear from what has been said whether, in discussing Amendment No. 185, 24, 183, 180, 181 and 182 together, if the House decides it will accept the first, the Government are proposing also to accept the other Amendments, which are being linked with it. That was not entirely clear from what the hon. and learned Gentleman said, because this area raises some appalling anomalies of the kind my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) so frequently draws attention to. We should be quite clear what the position is about the other Amendments.
    As to the overhead projectors, the hon. and learned Gentleman said that these will not fall within the scope of this tax. I think it would be helpful to those who have to delve through the complexities and anomalies of Purchase Tax if he would make it clear under which other heading he feels these items come. It certainly was not clear in Committee that these items were not included in the list of cinematographic and other equipment to which the 50 per cent. Purchase Tax rate was intended to apply. Therefore, if he is going to make a statement from that Box that these items are not included in this tax category we want to

    1553
    know in which category they are placed. We also want to know whether they will or will not be charged any particular tax so far as sales are concerned.
    Having picked up those two points which arose from what the Minister himself said just now, I think there are one or two more specific points on which we also require clarification. It is perfectly true, as the Minister says, that the 16 mm. projectors are very largely used by other than private individuals. In Committee I quoted figures—educational establishments, 70 per cent.; churches 3 per cent.; industry; 10 per cent.; hospitals, 7 per cent.; other institutions, schools, private individuals, only 10 per cent. We can therefore see that there is here good reason for the Government accepting the Amendment proposed in Committee and moving this Amendment this afternoon. We certainly welcome the fact that this change is to be made.
    6.15 p.m.
    It is, of course, the case that the tax increase which was imposed on the group of items was something like 80 per cent. I would again ask the hon. and learned Gentleman to clarify the position. Am I right in thinking that these items will not now incur any tax at all because they are in the list of exempted items in the reformed category 24 in the Purchase Tax Act as it will now be amended —that is to say, this particular group of items mentioned in the Government Amendment will carry no Purchase Tax at all? This is not unreasonable, because it is, generally speaking, the case that items which are used for educational purchases do not bear Purchase Tax.
    There is another point. In Committee we probed the reason why, in another Amendment, I think relating to calendars, the Government had inserted a date from which the Amendment should be operative. I think that is now incorporated in the Bill. The date applied was 20th March. We then got a subsequent Amendment, from 30th April.
    Now this further Amendment is from 1st July, which, presumably, was the earliest date on which the Government's change of mind became apparent. Is this not rather unfair on those educational establishments and schools which, having heard that the Government had put up Purchase Tax on these items, but
    1554
    perhaps deciding that, none the less, it was necessary to buy them, bought them and paid the 50 per cent. Purchase Tax on them, and now find, as the result of the Government changing their mind, on a case which we on this side have thought obvious in the first place, that if they had delayed their purchases they would have avoided the 50 per cent. Purchase Tax? What do the Government propose to do about anyone of whom it can be shown that he purchased these items between the date when the increase was originally announced and the date when now, it is suggested, the increase should no longer take place?
    I want to pursue one or two other points, because this whole area is engulfed in confusion, and I think it is helpful if speeches made in this House can do something to clarify the position. The first question is about the 8 mm. projectors which the hon. and learned Gentleman mentioned. He rightly pointed out that most of these are used in connection with cassettes which are used by educational establishments. I think I would be right in saying, though I am not very expert in the technology of this, that there are some 8 mm. projectors which do not use cassettes. What is the position about Purchase Tax on those items?
    Another point which arises here is the question of editing machinery covered by Amendment No. 180 in the names of my hon. Friends and my own name—automatic motorised film-editing machines for 16 mm. film with separate sound track. As I understand it, these are major items costing about £500 apiece. I would have thought they could scarcely be described as "accessories" within the terms of the Government Amendment. What is the position with regard to them? Are they to be exempt from Purchase Tax, or to incur the 50 per cent. rate?
    There is another point which seems to create a very considerable anomaly. When we discussed this whole matter in Committee we tended to base our attack on the need to encourage audio-visual aids for educational purposes, and stressed the folly of the Government themselves in imposing 50 per cent. Purchase Tax on items of this kind which, anyway, are largely bought by education authorities and so on.

    1555
    What is the position now? If the Government's Amendment is accepted, I understand that these items will not carry Purchase Tax at all. We are glad about that. But what is the position concerning related audio equipment which may form part of the same general complex used in the same general educational establishment?
    There are a number of points here which need to be brought out. There was the point raised in Committee by my hon. Friend the Member for Petersfield (Miss Quennell), who has again tabled an Amendment concerned with the bulbs used in projectors. There seems to be a clear anomaly here. The Government were not going to tax magic lanterns, but would tax more advanced electrical projectors. My hon. Friend rightly queried what the position was. Are we to understand from what has been said this afternoon by the Minister that this anomaly is to be eliminated and my hon. Friend's Amendment accepted?
    I make two final points. First, what is the position concerning rear projection screens? I am sure that the Minister will agree that it is unlikely that anyone using an ordinary film projection unit in his home would use a rear projection screen. These are typically used only in educational establishments. But again we are by no means clear whether they fall within the scope of the Amendment, so what is the position there?
    Secondly, what is the position about 16 mm. films? It seems that the Government are now exempting all 16 mm. film projectors, but they are not, so far as I can establish, intending to alter the Purchase Tax rate on 16 mm. films which fall under paragraph 4(1) of the Schedule as now amended. It is somewhat difficult jumping back and forth from Clause to Schedule and then back to the parent Act and so on, but I understand the exemptions will not include 16 mm. films, whereas they will include 16 mm. film projectors. The films of standard width are exempt specifically in the Finance Bill on page 57, line 12,
    "cinematograph film of standard width."
    Sould that now be amended to include 16 mm. films within the definition?
    I apologise for wearying the House on what may seem to be a number of detailed
    1556
    and trivial points. We do not believe that they are trivial. We believe that one of the main objections to Purchase Tax, as my hon. Friend the Member for Worcestershire, South consistently points out, is that the Government are in a morass of anomalies and contradictory definitions and the purpose of the Tax is becoming clouded. For that reason we are increasingly coming to the view that this is not a satisfactory Tax. At any rate, on this occasion I hope that the Minister will speak again and will be able to clarify the numerous points which I feel should be raised.
    Mr. John Smith (Cities of London and Westminister): I welcome this Government Amendment, and so will my constituents, Mr. J. Wallace Heaton and Mr. Anthony Negretti, who are both proprietors of good firms which have rendered good service to this country; and who, being vigilant, have both written to me about it. But they and I will, nevertheless, remain disappointed that, even if we accept the Amendment, there is still in this Finance Bill a considerable measure of discrimination against the photographic and cinematograph industry.
    But, if we are to have these Amendments introduced at a late stage, however desirable, to the Purchase Tax Regulations, it is extremely important that the Customs and Excise should be efficient. Traders have to make up their catalogues and are moreover liable to penalties for failure to charge Purchase Tax. Therefore, they must know as quickly as possible what Purchase Tax is due on what.
    I have had several complaints about delays by the Customs and Excise in pronouncing on these matters over the particular types of equipment which are the subject of this Amendment. I select one out of several, which relates to bib recording tape splicers. This manufacturer says:
    "As a result of this year's budget, we received details from H.M. Customs and Excise that purchase tax had been introduced on tape splicers. This was re-confirmed by our local Customs and Excise office.
    Following this, we published new price lists and altered advertisements. We then discovered that other makes of tape splicers were being sold without purchase tax, and immediately took the matter up with Customs and Excise Headquarters in London.

    1557
    After some delay, they have now advised us that purchase tax is not applicable to our tape splicers."
    I have another example here with which I will not weary the House. All this reinforces the point which I made in Committee, I fear out of order then, as it is now, that the lethargic and dilatory attention which is paid by the Customs and Excise to these important matters is no service to traders who could otherwise be helping the economy.
    Therefore, I welcome the Amendment, but I urge the Government, if they are to amend the Purchase Tax Regulations, to see to it that traders know early exactly where they stand.
    Sir G. Nabarro: Any reduction in taxation, even at this late stage in the Finance Bill, is a cause for joy in the hearts of all who complain continuously about the onerous burden of taxes in this country. But the fashion in which the Government are today dealing with Purchase Tax is really preposterous. This Schedule is now reduced to incomprehensible gibberish. I do not understand it; traders do not understand it; none outside the Customs and Excise understand it.
    It is futile for my hon. Friend the Member for the Cities of London and Westminster (Mr. John Smith) to ask for explanations to be sent to traders. The more explanations sent to traders, in my experience of Purchase Tax, the greater the dubiety created because of the language employed in the explanations from the Customs and Excise and the greater the number of queries and interrogations directed against the Customs and Excise, with the result that Customs and Excise take advantage of every situation and place the Tax at the highest possible level on its own interpretation. If the trader disagrees he is entitled to take the matter to the courts. He rarely does, because of the expense and trouble entailed.
    This Schedule, dealing with photographic equipment, has now become so highly technical in character that none, other than experts in photography, could possibly begin to understand it. I claim on those grounds that we shall need in the forthcoming months new publications from the Customs and Excise. I suggest a complete new glossary of all Purchase Tax setting out the rates, the articles to
    1558
    which they are applied, and in terms that are easily understood by the trades involved in payment of Purchase Tax.
    My hon. Friend the Member for Worthing (Mr. Higgins) has this afternoon asked a number of very difficult questions about photography which I could not follow. I do not know what the position is. The Government having presented this Schedule, then amended it, and no doubt in future they will amend it again by Order, tremendous dubiety now exists about the rate of tax applicable to any particular article of photographic equipment. We have now created, in one more great volume of manufactured goods, a state of affairs similar to that which has existed for several years relating to Purchase Tax on furniture, children's clothes, and many other articles where it is almost impossible to define the rate applicable to a particular article. Because children's clothes—and I mention this only in passing—are exempt from Purchase Tax, and because many women wear small sizes—
    6.30 p.m.
    Mr. Speaker: Order. We cannot discuss those anomalies. It is these anomalies about which we are talking.
    Sir G. Nabarro: There is endless confusion in definition. Exactly the same will be the case with photographic equipment. In many instances it is impossible to define what is a piece of furniture, and what is a desk for educational purposes. It is equally impossible to define what is an ashtray, and what is a bowl.
    Mr. Speaker: Order. I know the hon. Member's interest in all questions of Purchase Tax, but we are talking about only one limited aspect of it.
    Sir G. Nabarro: This is all en passant to underline the difficulties which the Amendment will cause us all, good intentioned though it may be.
    The only solution is the total reform of indirect taxation, and the substitution of a value-added tax for Purchase Tax and similiar forms of taxation.
    Mr. Taverne: With the leave of the House, I hope that I might be allowed to reply to some of the points which have been raised.
    The hon. Member for Worcestershire, South (Sir G. Nabarro) has pursued his

    1559
    familiar theme. The value-added tax was not advocated with the same enthusiasm when his party was in power, but we realise that he objects to the many anomalies which arise in the application of Purchase Tax.
    Sir G. Nabarro: My party consistently, over the years, made progress towards a single and uniform rate of tax, thereby preventing the kind of complexities which the Government are now heaping upon us.
    Mr. Speaker: Order. We must come back to the Amendment.
    Mr. Taverne: The most glaring anomalies to which the hon. Gentleman drew attention were left by the Conservative Government when they went out of office.
    Sir G. Nabarro: Quite untrue.
    Mr. Taverne: The hon. Member for Worthing (Mr. Higgins) asked whether overhead projectors were covered by a particular item. The answer is "No". On further inquiry they have been found to be outside the scope of the tax schedule. There is no item in the tax schedule on which Purchase Tax is levied which covers these overhead projectors, and they are exempt from Purchase Tax.
    The hon. Gentleman also asked what effect the Amendment would have on the items listed therein. I think that that is reasonably clear. In group 24 there are three paragraphs of items which are exempt from tax. There is now added a fourth paragraph which includes the items which are the subject matter of the Amendment; and these are therefore exempt from tax.
    The hon. Gentleman asked whether an 8 mm. projector which was not cassette loaded was covered by the Amendment. The answer is "No". It is the cassette loaded loop projector which is exempted. Other forms of loop projectors do not come within the exemption. The reason is that loop projectors are used with a distinctive type of cassette. These are in a clearly definable class, and are used mainly for educational purposes.
    The hon. Gentleman then asked what the effect was of the other Amendments which are being discussed with this one. As regards the Amendment in the name of the hon. Member for Petersfield (Miss
    1560
    Quennell), I undertook in Committee to make sure that the drafting was right. I am satisfied that it is, and that the various epidiascopes and parts and accessories about which she was concerned are exempt. There are specific exemptions for certain projectors and epidiascopes in 24 (i), (ii) and (iii) including parts and accessories suitable only for use therewith, and it is therefore quite clear that lamps which are suitable only for epidiascopes and projectors will still be exempt.
    Amendments Nos. 180, 181, 182 and 183 are now covered by the Government Amendment, and I hope that the hon. Members who tabled them will be satisfied with what we have done.
    I was asked about rear projector screens. Previously no representations were made to us either by the trade or by the Department of Education and Science that the dividing line was wrongly or inequitably drawn, and that rear projector screens were unfairly penalised. We are not aware that these screens are used mainly for educational purposes, which is what the Amendment is about. If it should turn out, perhaps as a result of some knowledge which the hon. Gentleman has, and of representations which he can make, that we should look at the position again, we shall do so, but we are not aware that rear projector screens are for the most part used for educational purposes. They therefore do not come within the scope of the Amendments.
    The same is true of 16 mm. films. They are not exempted because the educational case, which is what the Amendment is about, refers essentially to projectors. Films can be purchased in large quantities by amateur photographers.
    Lastly, I was asked why we had chosen the date of 1st July, and why this had not been made retrospective. It has always been accepted that we could not make Purchase Tax concessions retrospective. The 1948 experience was most unfortunate. The difficulty is to make sure that the tax rebate is passed on not only to the retailer, but, where the goods have been sold, to the final purchaser. In the past this has been found to be a formidable difficulty, and it still exists. Customers fail to understand that in certain cases tax is not paid on stocks on the retailer's premises at the time of the

    1561
    Budget. They are convinced that they are entitled to repayment of the tax which has been remitted. Apart from the problem of identifying a particular purchase as falling inside or outside the retailer's pre-Budget stocks, there will always be room for argument, in the former category, about whether the prices have been adjusted on account of the tax. It has been found impossible to trace the tax back into the hands of those who may or may not have paid it. For those reasons it has been found impossible to make any of these Purchase Tax concessions retrospective to the Budget date.
    Amendment agreed to.
    Mr. David Lane: I beg to move Amendment No. 98, in page 5, line 13, at end insert:
    (c) as from 30th April 1968 with the amendment of Group 19 by the insertion after the words 'gramophone records' of the words' except gramophone records used for educational purposes' and the insertion at the end of paragraph (b) of the words 'gramophone records used for educational purposes'.
    As this is the first time that I have ventured into the jungle of Purchase Tax in these debates on the Finance Bill, I hope that the House will bear with me if I stray off the track at any point.
    I was not a member of the Standing Committee, but I understand there was a general feeling that the position about gramophone records was unsatisfactory, and on reflection I believe that we have a chance to improve the Bill in a small but important respect. As I understand it, the effect of the Clause is that the rate of tax on gramophones, radiograms, and some other instruments is to be raised from 27½ per cent. to 33⅓ per cent., but the tax on all gramophone records is to be raised from 27½ per cent. to 50 per cent. The purpose of the Amendment is to bring back into the lower category—the 33⅓ per cent. category—gramophone records used for educational purposes.
    In the light of what was said by hon. Members on both sides in Committee we want to find a common-sense dividing line which would lessen the burden on all sorts of records which none of us wishes to see penalised to the full extent of the 50 per cent. level which is now to apply. We have tried to draw this distinction according to end-use—that is, use for
    1562
    educational purposes. It seems the simplest way to take out of the higher penal range records that most would agree should bear a lower rate of tax.
    I put forward this case on two grounds. First, without going into the argument of a high luxury level of tax being imposed on any gramophone records—which is not the purpose of this debate—it is absurd to apply this high luxury rate to records used in schools and universities, and for many other purposes that we can all describe—and know what we mean by describing—as being for educational purposes.
    There is an increasing use of teaching by gramophone records at all levels. Further, many libraries—both public libraries and libraries of educational institutions—contain gramophone records, and unless we do something to remove this very high level of tax from records in these categories it will have a discouraging effect not only on the main business of education but on all that is being done to develop wider leisure opportunities for many members of the population.
    The second argument is a more general one. Under this Government the education system has suffered one blow after another in the last three years. Surely the Government can take this opportunity to give at least a small pat of encouragement to the education world.
    Mr. Kenneth Baker: Without the Amendment the Clause puts all gramophone records, including educational records, into the luxury class of items for Purchase Tax purposes—the same class as jewellery, furs, and so on. The rate of tax upon educational records is four times that payable on the Savile Row suit made for the hon. Member for Worcestershire, South (Sir G. Nabarro).
    Sir G. Nabarro: Your hon. Friend.
    Mr. Baker: My hon. Friend. It is absurd to tax educational records, or records used for educational purposes, at this high rate, and the Amendment would reduce the rate.
    When we discussed this matter more generally in Committee the Treasury Ministers said that they could not distinguish between different categories of record, and that it was impossible to distinguish educational records. Whole

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    catalogues of educational records exist. They are generally, although not in all cases, prepared with the home student in mind—somebody who wants to learn a foreign language or a commercial skill.
    The catalogue which I have here caters for several commercial skills which I could recommend to Treasury Ministers. There is elementary book-keeping, budgetary control and, finally, a course in liquidation and receiving. These records are being sold and used much more frequently today by students studying not only at home but at college, and it is most unfair to discriminate against them. This extra tax will put these educational records beyond the purses of some students, and we should not on any occasion place any hindrance in the way of a person who is seeking knowledge.
    The previous Government Amendment gave special treatment to film strip projectors used for educational purposes, and I ask the Government to use the same standards in discussing this Amendment.
    Furthermore, the company that produces these records also exports them. I need not rehearse the arguments which have been put forward to the effect that in order to have a good export trade there must be a sound home market. That is an additional reason why we should give special treatment to this category of gramophone records. In brief, they can be identified, and they are directed particularly to those who want to learn something. We should not put anything in the way of such people.
    6.45 p.m.
    Mr. Stanley Henig: I have some sympathy for the aims of the Amendment but I cannot support it, for a number of reasons. It is true that certain companies exist to make educational records, in the narrowest sense of the term, and no doubt learning a course in liquidating and receiving would fit easily into such a category. But it is not so easy to draw the line in respect of records which are made of literary works, such as plays by Shakespeare. One of the best and most enterprising of our record companies specialises in producing records of this nature, and it would be logical to suggest that that company should also be exempted from the extra Purchase Tax.
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    Many people listen to such records for pleasure, and much the same argument can be applied to any gramophone record. The vast bulk of gramophone records could be conceived of as having an educational purpose, and if this argument were accepted it would mean that the Amendment, in logic, would provide that the extra tax should be removed from all gramophone records.
    Mr. Joel Baroett: Hear, hear.
    Mr. Henig: Many people—apparently including some of my hon. Friends— would welcome such an action, and in another year I' might join my hon. Friends in pressing this course upon my hon. and learned Friend. But it seems to me that a time when we are trying to raise taxation in a variety of ways is hardly the moment to go in for special pleading.
    One point is relevant to the Amendment and to the debate on this subject. People talk about the record industry and records in general as if they were part of some great monolith, and as if there were a standard price for all records, which was being increased by 22½ per cent.—
    Mr. Speaker: Order. In discussing this Amendment we cannot raise the question whether the increase in Purchase Tax should be applied to gramophone records in general.
    Mr. Henig: The increase of 22½ per cent. does not apply to the full sum charged for the record, in the sense that in the record industry the margins made by the retailers are very high, so that the actual increase works out at much less than 22½ per cent. of the total price of the record. In recent years a differential structure has grown up in the price of gramophone records—
    Mr. Speaker: Order. The hon. Member cannot discuss the question of Purchase Tax on gramophone records in general. That has been discussed elsewhere. It is not selected for discussion now. The question is whether we exempt from the increase in Purchase Tax educational gramophone records.
    Mr. Henig: I understand that, Mr. Speaker, but if we accept the argument

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    which I am putting forward that a gramophone record of Beethoven's Fifth Symphony is educational if it is played to schoolchildren, to people at university and even to older people, we must, in logic, look at the effect of this increase—
    Mr. John Smith: Surely what the hon. Gentleman is saying is that something is not educational if one enjoys it—it is as simple as that.
    Mr. Henig: I have not put forward that argument. I am saying that the definition of "educational purposes" put forward by hon. Gentlemen opposite means people learning or taking a course and listening in schools. I have been trying to widen the argument by suggesting that this exemption cannot be made because the demarcation between educational and non-educational purposes is— as the hon. Member for the Cities of London and Westminster (Mr. John Smith) more or less implied—virtually non-existent. The deleterious effect on education of this increase in the tax on all gramophone records will not happen because of the differential price structure in the industry which results in whole categories of records going from one price tier to a lower one. There are three distinct tiers.
    In discussing educational records, we should remember that the companies are most anxious, as far as possible, to increase their sales for the optimum profit. This is one reason that they have introduced lower price tiers. But that, in effect, means that they are lowering the average price for all records. In other words, it is not so much culture or education which is taxed as, very often, some of the bigger record companies themselves.
    That leads me to the final argument put by the hon. Member for Cambridge (Mr. Lane), that, if one taxes heavily companies producing educational records, it somehow damages their export prospects. Only in the last few weeks, the Financial Times and some of the recording magazines have reported that, during the last six months, British exports of all kinds of recording material, including educational records, have risen strongly. I am not sure how my right hon. Friend will react to this, but it also appears to be the case that, since this
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    increase in Purchase Tax, there has been little sign either of the home demand for any records slackening.
    Thus, as well as the Amendment being unworkable in fact, because one cannot differentiate between educational and other purposes, it does not matter in practice, because the kind of effects which hon. Gentlemen suggest on people's desire and need for culture have not occurred and there is not much sign that they ever will. I am sure that my right hon. Friend will regret that, in some ways, but it is a fact of the situation.
    Mr. Peter Kirk: I hope that the Minister of State will produce a slightly more convincing argument than that of his hon. Friend the Member for Lancaster (Mr. Henig), who did not seem to be able to define in his own mind what is education, and rejected the helpful suggestion of my hon. Friend the Member for the Cities of London and Westminster (Mr. John Smith).
    It is clear that, if one approaches this matter in the way that my hon. Friend the Member for Cambridge (Mr. Lane) did and regards this as the end use of the product and not the product itself, it should be possible for the Customs and Excise to work out a reasonable system. I hope that the Government will be able to accept the Amendment, which is small in scope and carries out a very much-needed reform of the Bill.
    My hon. Friend the Member for Acton (Mr. Kenneth Baker) said that education had taken a good beating from this Government already. Educational appliances have taken a good beating in this Budget. I have sent to the Chancellor details of other matters, like mobile sound guides for use in museums and country houses, which have had a 50 per cent. Purchase Tax slapped on, and which previously paid none at all. It seems right that the Government should make some amends on this.
    I have had many representations about this, particularly from university students in my constituency, who find that, contrary to the experience of the hon. Member for Lancaster, this places an additional burden on them in their studies. It is true of other matters as well. I had a representation from a blind person who is learning languages by means of a radiogram—almost the only way, she

    1567
    says, that she can do it—and the additional burden on her may not be very much in the terms of the hon. Member for Lancaster but it means a good deal to her, and may mean that she will not be able to continue the course.
    I do not know how much this modest Amendment would cost the Chancellor. I cannot believe that, in a year when an additional £900 million is to be raised, it will be so excessive as to wreck the whole deflationary approach of the Budget. For that reason, I join my hon. Friends in pressing on the Minister that this matter should be considered again. It has caused a great deal of alarm. There has been considerable correspondence in the Press and to Members of Parliament and it is a small piece of virtue which the Government could store up for themselves against the bad times which lie ahead for them.
    Sir Harmar Nicholls: I agree with my right hon. Friend the Member for Saffron Walden (Mr. Kirk): of course this can be done if the Treasury Bench wish it. Of course it can be identified and put in acceptable terms in the Bill. I hope that the Minister of State will consider the Amendment with sympathy. I thought that the speech of the hon. Member for Lancaster (Mr. Henig) was the best example I have seen to date of why the ex-Minister of Power resigned. That is the sort of argument and narrow approach which seems completely to disregard practicalities. I should be completely opposed to what appeared to be the hon. Member's interpretation.
    When the Amendment is being interpreted, after the Minister has accepted it—as I hope that he will—I hope that the interpretation of "educational purposes" will cover some of the points which the hon. Member said should not be included, for all sorts of reasons which I could not understand. Certain gramophone records can be clearly identified as educational. A good example was that which my hon. Friend gave, of a blind person wanting to learn languages. It must be interpreted rather wider than the sheer, easily recognised "educational purposes". Otherwise, we shall be illogical.
    The Minister of State, Department of Education and Science, who has responsibility for the arts, is getting a great deal
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    of kudos—in many cases rightly—for the encouragement which she has given to ballet, operatic music and Shakespeare. We are giving great subsidies—I am not one of those who grumble at it—for all these works to be performed on the stage and at ballet schools, and it is money well spent. But the only taxpayers who can enjoy the result of those subsidies are those who can travel to the theatre. If we want to extend culture and the whole idea of spending money on the arts so that they can be embraced and enjoyed by a large proportion of the population, we should face the fact that, in this day and age, it is part of the educational distribution to have them on gramophone records—
    Mr. Henig: Would the hon. Gentleman then make it clear that, by "educational purposes", he means every gramophone record except the "Top of the Pops"? If this is what he is saying, will he say it loud enough for everyone to hear?
    Sir Harmar Nicholls: I was about to say how I think the interpretation should be based, and I will come a little more quickly to that suggestion.
    I suggest that, when we are trying to interpret the Amendment, we should say that any work, whether music or words, which carries with it in its normal usage a Government subsidy, whether it is operatic music, ballet music, or the works of Shakespeare in the theatres, the National Theatre and the ballet schools, should qualify under the definition of "educational purposes". Otherwise, on the one hand we would be saying that we give these vast subsidies to encourage people to enjoy and use these works, and on the other would be making it more difficult, because more expensive, for them to do it in their own homes. I rather enjoy the "Top of the Pops", too, but I am not arguing in this instance—I should, in any event, be out of order to do so—that there is a good case, for export and other reasons, for not putting the extra tax on those records. For the purpose of the Amendment, we have to accept that any music or any work which does not attract the subsidy which makes it desirable in the eyes of the Government, ought not to be exempted.
    7.0 p.m.
    The Amendment ought to be accepted, perhaps not in its present words, which

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    might not do what I am asking or what the Government would like to do, but certajnly in spirit, with the promise that appropriate words will be introduced later to exempt educational records and any records which represent work which normally carries a subsidy from the Government. For example, any works which the Minister responsible for the arts helps to keep alive by means of a subsidy should be exempt if they are translated on to a record. They should have the same sort of encouragement as that given by the subsidy.
    I support the Amendment, hoping that its spirit will be accepted now and that a promise will be given to introduce later words which will give an interpretation of "educational". If the Government will do that, they will avoid being illogical in encouraging with the one hand and discouraging with the other.
    Mr. James Dickens: I am sorry that I missed the early speeches in the debate, but I am familiar with the argument because the point was debated in Committee.
    I rise to give my general support to Amendment No. 98 and to its purpose, which is to make some differentiation between gramophone records for educational purposes and gramophone records in general terms. It is, of course, difficult to make a precise differentiation which would exclude, for example, records of classical music or other records of various theatrical performances from the general run of records produced for entertainment purposes. We could not accept the definition offered by the hon. Member for the Cities of London and Westminster (Mr. John Smith).
    But we can differentiate in two importants respects. For example, we can clearly distinguish those records which are produced for a course of study, as with language records, which have an increasing use both in exports and elsewhere. That applies to the spoken word, too. There are certain courses of instruction which can be distinguished. For example, there is a course of records on early English, dealing with Chaucer and including "The Canterbury Tales" in early English, with text books issued as part of the course.
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    I can see no difficulty whatever in the Board of Inland Revenue clearly differentiating those records from the general body of recordings in this country and agreeing that records produced for those purposes, with text books, should be exempt from Purchase Tax. Consequently, I support the general drift of the Amendment on the Floor of the House, as I did in the debate in Committee.
    Sir G. Nabarro: This subject was debated in Committee, but I was not a member of the Committee. I intervene for only a few minutes to draw attention once again to the preposterous state of affairs which exists today with the Purchase Tax Schedules. The Government propose to tax gramophone records at 50 per cent. They tax musical instruments at 33⅓ per cent. Why is a gramophone record 50 per cent. more luxurious than an oboe or a harp or a pianola?
    Mr. Speaker: Order. The hon. Member cannot debate on the Amendment whether gramophone records should be subject to increased Purchase Tax. We are discussing an Amendment which seeks to exempt educational records.
    Sir G. Nabarro: I was coming to educational records, Mr. Speaker. The records taxed at 50 per cent. will include educational records, which makes the anomaly even worse.
    But the true analogy is between a gramophone record of an educational character and a book. These are the two essential media for educative processes which ought to be compared, the one with the other. I notice that the hon. Member for Lancaster (Mr. Henig) is laughing. One of my hon. Friends suggests that he took a course in it. But the course has not had any very obvious results. Educational gramophone records and books are exactly comparable. We do not tax books at all. We are to tax educational gramophone records at 50 per cent. It ought to be possible, on the lines generally laid down by my hon. Friend the Member for Peterborough (Sir Harmar Nicholls), to extract from the generality of gramophone records those which are generally applied for educational purposes, in universities, colleges, schools and educational establishments of all kinds, making one large group.

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    There is another large group of educational gramophone records used for teaching languages in the home. There are—I have never employed one, because I am so bad at languages—special institutions in London which specialise in the teaching of languages through the medium of educational language records. I am informed that they are very good. Clearly they would be subject to a special Purchase Tax rate or, for preference, no Purchase Tax at all. There are ways and means of doing this, and, while it is not a method which I like very much, because it is taking us further and further into the realms of discrimination in Purchase Tax, which I think is wholly bad, if we are to have foisted on us by a Socialist majority a 50 per cent. rate of tax on all gramophone records—which is a step never taken by the Tories—I would seek to make it a little better by taking educational records out of that general rate of tax applicable to all records.
    When he winds up the debate, I hope that my right hon. Friend the Member for Birmingham, Handsworth (Sir E. Boyle), the Shadow Minister of Education, will make it clear that we feel strongly about this matter. Fiscal niceties apart, we feel strongly about that in an educational sense. I hope that he will invite us all to join him in the Lobby in voting in support of the Amendment, if we obtain no satisfaction from the Treasury Minister.
    Mr. Taverne: There is a fundamental difficulty about this whole matter. In the earlier Amendment moved by the Government we took special categories of photographic equipment which, by their very nature, were suitable only for educational use or were used largely for educational purposes. This Amendment seeks to exempt gramophone records used for educational purposes.
    Purchase Tax is imposed when the objects are in the hands of the wholesaler or retailer, and at that stage neither Customs and Excise nor the retailer know the purpose for which a particular object will be bought. A retailer cannot say whether a record will be sold to a teacher or to a pupil. Indeed, when he has stocks of records, in most cases he does not know whether they are records which will be used for educational purposes. It is impossible for Purchase Tax to be
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    imposed or to be exempted depending on the actual use to which particular items may later be put. That is a fundamental objection to the Amendment.
    Mr. Frederick Silvester: The hon. Gentleman will be aware that Customs and Excise already make an exception for the import of U.N.E.S.C.O. material for educational purposes. The order provides that exemption from import duty will be granted provided that they are satisfied that the goods so produced are of an educational, scientific or cultural character. Why cannot this case be dealt with in a similar way?
    Mr. Taverne: The hon. Member will find that such exemption from import duty is given where U.N.E.S.C.O. certify that these are records which are produced by U.N.E.S.C.O. for a particular purpose. They can be clearly identified as having been produced for a particular purpose. One cannot say whether or not a classical or any other kind of record will be used for educational purposes. One cannot say whether it will be sold to a school or enjoyed at home. I am not denying that many records have educational value, but this is not what the Amendment has in mind. The Amendment has in mind records to be used in schools, universities or similar institutions.
    Mr. J. E. B. Hill: On the Minister's own showing, it should be possible to distinguish the sale of records to schools, since the record industry, as far as I am aware, has no wholesaling arrangements. Most orders have to be sent to the recording company. Surely, educational institutions could make sales direct so that it would be possible to identify the records as sold for educational purposes through educational institutions only.
    Mr. Taverne: This is not a matter of administration. Records are taxed at a stage when it is not necessarily known for what purpose they are to be used. It would mean that where in a large concern stocks are held or particular records are sold those records would have to be left out altogether since at that stage the destination of the records would not be known.
    The hon. Member for Peterborough (Sir Harmar Nicholls) chided my hon. Friend the Member for Lancaster (Mr. Henig) for being unpractical, but his

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    approach was eminently practical and was concerned with the practical difficulties. It has been said that there are lists of educational records, but the records which are the subject of such lists are equally records which can be used for non-educational purposes. There are also many records not on the lists which could be used for educational purposes.
    Mr. Kirk: Will the Minister say how he would use a language teaching record for non-educational purposes?
    Mr. Taverne: There are certain records which perhaps could be said to be educational only, but the vast majority of records are not in that position. One could give many examples of almost any kind of record which could be used for educational purposes. Records can be used in schools for illustration; classical records can be used for educational purposes; one can illustrate in teaching music different kinds of music making; such records can all be used for educational purposes.
    The hon. Member for Saffron Walden (Mr. Kirk) asked me what would be the cost of this concession. It is impossible to say what the cost would be, since almost any record could come within this definition. The only way in which this problem could be approached would be if one could exempt records which were suitable only for educational use. That is not what the Amendment does.
    I said in Committee that I would look at the problem. I said that there would be difficulties in the anomalies that would be created, but nevertheless, if it were possible to isolate records which by their nature were suitable only for educational use, and if this did not lead to unacceptable anomalies, then we would examine the possibility of exemption.
    The hon. Member for Worthing (Mr. Higgins), in Committee, referred specifically to language records, and asked us to consider as educational records those involving speech. One could perhaps say that language teaching records would be for educational purposes only. The concession had it been made would have had to be confined to records designed to form part of a course of instruction in language. There would have been considerable difficulties about this, but I cannot argue that it would have been administratively impossible. However,
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    this would have been a concession which would have been strongly resented when other types of records also used for educational purposes would not come within that special category.
    This was suggested by the hon. Member for Worthing when he put it more widely and referred to records involving speech. It is understandable that he should put it in that form, since records involving speech would be the way in which many people would want to approach it. That would include anything from a Shakespeare play to a music-hall turn. It would be impossible, without creating tremendous anomalies, to confine a concession to, say, language records or to records suitable only for educational use.
    7.15 p.m.
    Mr. Robert Cooke: Is the Minister able to give an example of a music-hall turn involving speech only which has been issued as a gramophone record?
    Mr. Taverne: One would then have to say it should be speech without music. I can tell the hon. Member of records similar to music-hall turns which have been made by some of our eminent satirists involving speech only. It requires no great effort of imagination and very limited research to find long lists of records which involve speech only and which are in the nature of music-hall turns. However, the Amendment as it stands is not concerned with records suitable only for educational purposes. The Amendment would, therefore, be quite unworkable in practice and for that reason I must ask the House to reject it.
    Sir Edward Boyle: I am sure that the House is grateful to my hon. Friends who put down the Amendment, and in particular, to my hon. Friend the Member for Cambridge (Mr. Lane), who proposed it. I realise on listening to the debate that many hon. Members very pardonably wished we could have had a wider debate on Report covering the whole subject of Purchase Tax on gramophone records. I was not a member of the Standing Committee, and I am glad we have had this opportunity of attention to this more limited aspect. It is right that we should be considering this matter. As my hon. Friend the Member for Saffron

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    Walden (Mr. Kirk) said, educational appliances have taken a beating from the Government.
    My hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) was right to draw a contrast between the treatment of gramophone records for educational purposes and the treatment of books. It is also worth remembering that one must look at the problem faced by schools in the context of the Government's policy as a whole. Not only is there a steep increase in Purchase Tax, but the Government's policy on the rate support grant must mean that the local authorities and indivdual schools are in considerable difficulties when purchasing gramaphone records which are so important in an educational context.
    I have listened carefully to the debate. I understand the view of the Minister of State when he says that records have to be taxed at a moment when their end use is not necessarily known. I recognise that there are difficulties about those gramophone records which can be used either for educational or for entertainment purposes. None the less, I agree with the view of the hon. Member for Lewisham, West (Mr. Dickens) that there is scope for differentiation. I agree with my hon. Friend the Member for Saffron Walden that surely we can work out a viable approach to the problem.
    Constantly I have heard Finance Bill debates in the House, and I have even taken port in them, where the Government begin by saying that there is no solution to an administrative difficulty, but by the time there has been sufficient pressure from the House and outside it has very often happened that the administrative difficulty has been avoided, at any rate to a certain extent.
    I felt disappointed by the Minister's reply. I believe that there are categories of records, some of which have been mentioned, which can clearly be identified as records for educational purposes and for no other purpose. I will mention three examples. The first is records concerned with the teaching of languages. My hon. Friend the Member for Saffron Walden, who is a much better linguist than I am, pointed out that one does not have these records for entertainment purposes.
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    Then, as the hon. Member for Lewisham, West pointed out, there are those records produced in connection with definite courses of study. I would add another feature which overlaps that category. It is not only those records which are designed with a course of study, but those which are—[Interruption.] Does my hon. Friend wish to intervene?
    Sir G. Nabarro: No.
    Sir E. Boyle: Though it is some time since I have taken part in a debate on the Finance Bill from the Front Bench, there were years when I got used to interjections from my hon. Friend in his earlier incarnation.
    There are considerable numbers of records issued by companies to illustrate books produced for educational purposes, where a two-volume or three-volume manual of poetry is associated with gramophone records so that children can not only read and learn the poems but hear them performed. I believe that it would be possible to identify a considerable number of recordings as recordings purely for educational purposes.
    I think that the Minister of State gave the real reason for the Government's refusal to move on this subject when he said that, although he agreed that there were records which could be identified in this way, he was afraid that this might be the thin end of the wedge. That is often the least persuasive type of argument to use with the House. In an administrative decision, there will be marginal cases, but I am convinced that there are a number of types of recordings, some of which have been referred to in the debate, which can be clearly identified as educational recordings.
    The House has a good deal of business before it. We may not wish to devote more time to this matter now, but I feel sufficiently disappointed with the Minister's reply to advise my hon. Friends to divide on the Amendment.
    Mr. Silvester: I am sorry to pursue this matter further, but the Minister's reply does not satisfy me. He said that the criterion was to be records which can only be used for educational purposes. I would remind him that his

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    criterion was somewhat different in regard to cinematograph projectors, in connection with which the Government produced Amendment No. 185. A projector did not have to be used only for the purposes denned, but it did in the majority of cases.
    We are not suggesting that one can define perfectly records which will be used for educational purposes, and only for those purposes. We are saying that for most normal, sensible people there are categories of records which the vast majority of us are sure will be used on most occasions for educational purposes. Although the Treasury may lose a small amount of money on those which happen not to be put to educational uses, it could well afford it because the sum is so small.
    May I take the Minister back to another point about the U.N.E.S.C.O. Order? He is quite right in saying that the paragraph which concerns records refers to records produced by U.N.E.S.C.O. and is, therefore, defined. But there follows a paragraph concerning films. As I read it, that is not limited to U.N.E.S.C.O. but is concerned with an internal Ministry. It says:
    "Import duty shall not be charged on any film, with or without soundtrack, which is certified by or on behalf of the Minister of Education to be of an educational character."
    It seems to me that there is a specific instance where the Government already accept that the Department of Customs and Excise, using the agency of the Minister of Education, can define a film in educational terms, and I cannot see why it is beyond the wit of the Minister to devise a similar system whereby records sold in this country cannot be similarly defined.
    I do not suggest that it will be perfect, and no doubt many hon. Members, newspapers and others outside this House will be able to find anomalies and make fun of it. But at least we will get at the great bulk of educational records, which is what we are seeking to do. I would ask the Minister to think again. I know from what was said in Committee that the Government do not disagree with the principle. They say that it is beyond their understanding to devise an administrative system. But it is their duty to do so to give effect to the wishes of the House. I urge them to get on and do it.
    Mr. J. E. B. Hill: Having heard the arguments put forward by my right hon. Friend the Member for Birmingham, Handsworth (Sir E. Boyle), I hope that the Government will think again. I am quite sure that, if there is a will here, a means can be found, whichever way one looks at it. If it is purely a question of identifying categories of records, surely the spoken word can be equated with the printed word, as my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) has urged.
    Will it really be a great loss to the Revenue and a national disaster if a number of people who are not schoolboys or students buy records of Shakespeare? If that should happen, surely it would not be all that bad for the Treasury and the nation. I think that the recorded word can be put on the same footing as the printed word.
    Then, as regards music, if a satisfactory definition were put forward by the Government, though admittedly it is difficult, it would be possible for recording companies wishing to fulfil the demands of education authorities for cheaper records so to make records in future that they came within the definition. It would be possible to record pieces of classical music for the public in general to enjoy and to re-record them for schools with a commentary attached. Such a record would be acceptable to a student, whereas it would be quite intolerable to listen to it in one's home. Nothing is done like that now, because there is no call for it, but I would ask the Government to think in terms of developments within the industry which might come forward to meet such a concession.
    The whole argument put forward by my right hon. Friend about the burdens on education must be taken seriously by the Government. It is obvious that, with the financial pressures at work on education, nearly all the cuts will come at the margin, and some of the more pleasant parts will be omitted. The records and visual aids which are used form part of the capitation allowance, and they will be cut out. It follows, too, that if language and other educational records become more expensive to students and schools, some of the classical records which could be used for non-educational purposes will not be bought

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    by schools and, therefore, the damage is cumulative.
    In view of all the criticism in favour of trying to make it easy for schools to use gramophone records as a means of education, I hope, therefore, that the Government will think again. When they think again—and I prefer to say "when" and not "if"—would they consider the whole range of educational recordings? If the Minister is to think about the need to bring in educational gramophone records with a satisfactory definition, would he also think of educational recorded tapes, because they go together?
    7.30 p.m.
    Mr. Kenneth Lewis: I was a little concerned that the Minister should suggest that a very serious speech that might be made by my hon. Friend the Member for Worcestershire, South (Sir G. Nabarro) should be put in the same category as a comic turn, and that the tax on a record of his speeoh should be the same as that on a record of someone entertaining the public.
    I thought that the Minister accepted our case. He accepted that there was a reason for differentiation between the tax on a record made for entertainment and that on an educational record. He accepted the case, but said that nothing could be done about it because there was likely to be an administrative difficulty. I understand that the Chancellor said in his Budget speech that he believes that over a number of Budgets it is desirable that we should get away from increasing Income Tax and go over to increasing Purchase Tax and sales taxes. We on this side of the House have clearly said that we believe that there should be reductions of taxes on income and increases in taxes on spending. If Governments are to do that, the Treasury must find an administrative means by which categories of purchases by individuals, societies, industry or anyone else are exempt or have a lesser tax.
    If the Government do not accept that, and taxes increase by 50, 70 or 80 or even 100 per cent. not only will articles bought for entertainment or popular use not concerned with education rise to a very high price but so will records and other objects which the public buy for their
    1580
    edification and education. If Purchase Tax increased right across the board people would be dissuaded from buying educational objects, whether records or anything else, which it was clearly in the public interest that they should buy. Language records, records of Shakespeare, records of poetry readings, which are now becoming more popular, records of our best orchestras and the like would not be sold because they would be clobbered with high taxation, which Governments did not intend to impose on them but really intended to impose on popular articles which they wanted to dissuade the public from buying. The Treasury must find an administrative means of securing such exemptions.
    It is also necessary for it to do that because many societies are now making money through selling records. The Government and local authorities are frequently asked to subsidise orchestras. The Bournemouth Symphony Orchestra has been subsidised for many years, and so has the Halle Orchestra in Manchester. No one would wish them to go out of business. They depend very largely on selling their records and they have a limited public. The records are educational, though it is true that there are a few people who enjoy listening to them.
    A Government with a "Minister of Arts", who receives an allocation from the Treasury, should aim to encourage the sale of those records. We may not yet have reached the position, though we are very near it with a high Purchase Tax. of 50 per cent., where people who want such records will not buy them. But it will be a very difficult decision for them, if Purchase Tax goes up across the board, as to whether they can afford to buy a record or to buy something else.
    If such records and other items in future Budgets have imposed on them another considerable increase in Purchase Tax we shall reach the position where the public will not choose to buy that which will educate it and that which the "Minister of Arts" is trying to encourage people to buy. This will have on effect on orchestras and societies which at present are having a difficult time, because the revenue from their record sales greatly assists them at present. That revenue also assists the Government because if the orchestras and societies secured more revenue from the sale of

    1581
    records they would find it less necessary to ask for an increased subsidy. Therefore, it will pay the Government to encourage the sale of such records.
    I am sure that over the next few years there will be a greatly increased demand for gramophone records, tapes and other things for learning languages. My hon. Friend the Member for Worcestershire, South said that he was not very good at languages. I do not think that many of our generation are, because we were taught at school from the book. School children now are taught from records, and young men and women leaving school are encouraged to take part in further education or to buy records and learn languages at home. It is important that they should do so, because we have an increase in foreign travel today. They are going abroad and it is an advantage to them if they can speak foreign languages. Language records should not be caught by a high Purchase Tax rate, which is bound to determine the public's attitude to their purchase and reduce their sales. I hope that the Minister will have another think about this matter.
    Miss Harvie Anderson: I was very disappointed by the Minister's reply, because it seems to me that he was working on the assumption that people throughout a great part of the country could obtain access to many things provided by records. I wish to make a plea for the remote parts of the country. There are many places where it is not possible to go to a concert to hear live music, and in such places records are perhaps appreciated most. This applies to a vast range of schools in Scotland which are far beyond any possible means of communication with a centre that will provide the live interest that we should all like.
    The Minister made a very definite point about the difficulty of identification, which has been emphasised by many other hon. Members. But there should be no great need for close identification. If he lived in a very remote area in Wales, Cornwall or the North of Scotland and had never been to a concert, would he think it very unreasonable to expect a village school to put on a concert of records, and that those records should be bought for educational purposes? Would
    1582
    it be so very shameful if some of the great music of this land and other lands were heard for the first time by the whole community rather than just the children at school? Surely this is the purpose of education as we see it today—as the present Government, unfortunately, do not see it, but as the next Government certainly will. Education now embraces the whole community and no longer the very small range of people from the age of five to 15. We are expected to accommodate and provide for all who are prepared to take an intelligent interest in the best things of life, even if those things come to them a little late.
    So the question of identification should not be too closely followed and certainly should not be used as a Treasury argument for exempting these records. There must be some point in the fact that if there were exemption for these records it would mean wider sales. So this would be advantageous to the Treasury. I should have thought that a benign Treasury would be able to reduce the Tax and thus allow more sales of the commodity, because in this way it would act in a commercial fashion towards an industry which provides much for the country and a considerable amount of exports. It is constantly put to us by those who make these records that if they had greater encouragement and greater sales they could increase their export potential. Not long ago when Conservative Members were sitting on the Government side we had the strongest representations along these lines from some of our most distinguished musicians.
    Mr. James Dempsey: I am interested in the hon. Lady's argument about the need to exempt certain types of record used in Scottish schools. Would she include in her sample, for example, the records used for providing music for country dancing in schools throughout Scotland? Would they be part of the educational element in records that she feels should be exempted?
    Miss Harvie Anderson: Certainly. As I understand it, country dancing classes are provided by further education authorities, and, therefore, are subsidised by the State. I see no distinction between subsidising the teaching of classes and the subsidising of music which is used.

    1583
    The Treasury is very good when it seeks sources from which to extract finance. It is a constant source of wonder to me that it fails so utterly when asked to identify some worthy object to exempt from tax. I urge the Minister to take these considerations most seriously and perhaps belatedly revise what he has said.
    Mr. Robert Cooke: I am glad to catch your eye, Mr. Speaker. You will notice that I have moved from the popular to the educational benches in order to make a brief intervention in the debate.
    I was disappointed with the Minister's reply to an intervention from me. The only difficulty that he seemed to visualise was that certain satirical records might be purchased by the public at too low a rate of Purchase Tax. That might not be too bad a thing. To help him, I would say that he could easily have got the key to the problem by exempting these records of a large and expensive nature. These on the whole are the ones of an educational nature. I am sure that the Chancellor is worried lest exemptions should apply to the millions of pop records, which must bring in a good deal of revenue to the Exchequer. But this is not our point. We want to help the edu-
    cational side. It should be easy to identify records of an expensive nature and those sold in sets.
    We should do nothing, surely, to take away from the instruction and enjoyment which school children and other students can get from these records. Most schools are on a fairly tight budget when it comes to educational material, even schools financed by the State—I speak from personal experience, having served on management committees. Private schools, in which I was at one time a teacher, find themselves with little money for this sort of thing. If the budget has been fixed, a tax change means that less educational material will be available to the children.
    I know that the Chancellor is not the hard-hearted person that some people might suggest. I notice a pleasant smile spreading across his face. So I sit down in the hope that he and his great Department will use their ingenuity to put this matter right, if not on this occasion, perhaps in the future.
    Question put, That the Amendment be made:—
    The House divided: Ayes 145, Noes 192.

    Division No. 264.]

    AYES

    [7.46 p.m.

    Alison, Michael (Barkston Ash)

    Emery, Peter

    McAdden, Sir Stephen

    Allason, James (Hemel Hempstead)

    Errington, Sir Eric

    MacArthur, Ian

    Astor, John

    Eyre, Reginald

    Mackenzie, Alasdair (Ross&Crom'ty)

    Awdry, Daniel

    Farr, John

    Maclean, Sir Fitzroy

    Baker, W. H. K. (Banff)

    Fletcher-Cooke, Charles

    Macleod, Rt. Hn. Iain

    Balniel, Lord

    Fortescue, Tim

    McMaster, Stanley

    Beamish, Col. Sir Tufton

    Gibson-Watt, David

    Maddan, Martin

    Bennett, Dr. Reginald (Cos. & Fhm)

    Gilmour, Ian (Norfolk, C.)

    Maude, Angus

    Biggs-Davison, John

    Glover, Sir Douglas

    Maxwell-Hyslop, R. J.

    Black, Sir Cyril

    Godber, Rt. Hn. J. B.

    Mills, Peter (Torrington)

    Blaker, Peter

    Goodhart, Philip

    Mills, Stratton (Belfast, N.)

    Bossom, Sir Clive

    Coodhew, Victor

    Miscampbell, Norman

    Braine, Bernard

    Gower, Raymond

    Monro, Hector

    Brewis, John

    Grant, Anthony

    Montgomery, Fergus

    Brown, Sir Edward (Bath)

    Gurden, Harold

    More, Jasper

    Bruce-Cardyne, J.

    Hall, John (Wycombe)

    Morgan, Geraint (Denbigh)

    Bryan, Paul

    Harrison, Col. Sir Harwood (Eye)

    Mott-Radclyffe, Sir Charles

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

    Harvie Anderson, Miss

    Murton, Oscar

    Buck, Antony (Colchester)

    Hawkins, Paul

    Nabarro, Sir Gerald

    Campbell, B. (Oldham, W.)

    Heald, Rt. Hn. Sir Lionel

    Onslow, Cranley

    Campbell, Gordon (Moray & Nairn)

    Heath, Rt. Hn. Edward

    Osborn, John (Hallam)

    Carr, Rt. Hn. Robert

    Higgins, Terence L.

    Osborne, Sir Cyril (Louth)

    Channon, H. P. G.

    Hill, J. E. B.

    Page, Graham (Crosby)

    Chichester-Clark, R.

    Holland, Philip

    Page, John (Harrow, W.)

    Clegg, Walter

    Hooson, Emlyn

    Pearson, Sir Frank (Clitheroe)

    Cooke, Robert

    Hordern, Peter

    Peel, John

    Costain, A. P.

    Hornby, Richard

    Percival, Ian

    Craddock, Sir Beresford (Spelthorne)

    Hunt, John

    Pike, Miss Mervyn

    Crowder, F. P.

    Iremonger, T. L.

    Pounder, Rafton

    Cunningham, Sir Knox

    Jenkin, Patrick (Woodford)

    Powell, Rt. Hn. J. Enoch

    Dance, James

    Kirk, Peter

    Prior, J. M. L.

    Davidson, James (Aberdeenshire,W.)

    Lane, David

    Pym, Francis

    d'Avigdor-Goldsmid, Sir Henry

    Langford-Holt, Sir John

    Ramsden, Rt. Hn. James

    Dean, Paul (Somerset, N.)

    Legge-Bourke, Sir Harry

    Rees-Davies, W. R.

    Dodds-Parker, Douglas

    Lewis, Kenneth (Rutland)

    Rhys Williams, Sir Brandon

    Eden, Sir John

    Loveys, W. H.

    Rossi, Hugh (Hornsey)

    Elliot, Capt. Walter (Carshalton)

    Lubbock, Eric

    Russell, Sir Ronald

    Scott, Nicholas

    Thatcher, Mrs. Margaret

    Williams, Donald (Dudley)

    Scott-Hopkins, James

    Thorpe, Rt. Hn. Jeremy

    Wills, Sir Gerald (Bridgwater)

    Sharples, Richard

    Turton, Rt. Hn. R. H.

    Wilson, Geoffrey (Truro)

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

    van Straubenzee, W. R.

    Winstanley, Dr. M. P.

    Silvester, Frederick

    Vaughan-Morgan, Rt. Hn. Sir John

    Wolrige-Gordon, Patrick

    Sinclair, Sir George

    Wadding ton, D.

    Woodnutt, Mark

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

    Wainwright, Richard (Colne Valley)

    Wylie, N. R.

    Smith, John (London & W'minster)

    Walker, Peter (Worcester)

    Younger, Hn. George

    Stainton, Keith

    Walker-Smith, Rt. Hn. Sir Derek

    Summers, Sir Spencer

    Ward, Dame Irene

    TELLERS FOR THE AYES:

    Tapsell, Peter

    Weatherill, Bernard

    Mr. R. W. Elliott and

    Taylor, Sir Charles (Eastbourne)

    Wells, John (Maidstone)

    Mr. Timothy Kitson.

    Temple, John M.

    Whitelaw, Rt. Hn. William

    NOES

    Alldritt, Walter

    Griffiths, Will (Exchange)

    Norwood, Christopher

    Allen, Scholefield

    Hamilton, James (Bothwell)

    Oakes, Gordon

    Archer, Peter

    Hamilton, William (Fife, W.)

    Ogden, Eric

    Atkins, Ronald (Preston, N.)

    Hamling, William

    O'Malley, Brian

    Atkinson, Norman (Tottenham)

    Hannan, William

    Orme, Stanley

    Bacon, Rt. Hn. Alice

    Harper, Joseph

    Oswald, Thomas

    Barnett, Joel

    Harrison, Walter (Wakefield)

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

    Baxter, William

    Haseldine, Norman

    Owen, Will (Morpeth)

    Beaney, Alan

    Heffer, Eric S.

    Page, Derek (King's Lynn)

    Bence, Cyril

    Henig, Stanley

    Palmer, Arthur

    Benn, Rt. Hn. Anthony Wedgwood

    Herbison, Rt. Hn. Margaret

    Pannell, Rt. Hn. Charles

    Bennett, James (G'gow, Bridgeton)

    Hooley, Frank

    Parker, John (Dagenham)

    Blackburn, F.

    Houghton, Rt. Hn. Douglas

    Parkyn, Brian (Bedford)

    Blenkinsop, Arthur

    Howarth, Herry (Wellingborough)

    Pavitt, Laurence

    Boardman, H. (Leigh)

    Howie, W.

    Pearson, Arthur (Pontypridd)

    Booth, Albert

    Hoy, James

    Peart, Rt. Hn. Fred

    Bottomley, Rt. Hn, Arthur

    Hughes, Emrys (Ayrshire, S.)

    Pentland, Norman

    Braddock, Mrs. E. M.

    Hughes, Roy (Newport)

    Perry, Ernest G. (Battersea, S.)

    Brooks, Edwin

    Hunter, Adam

    Perry, George H. (Nottingham, S.)

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

    Irvine, Sir Arthur (Edge Hill)

    Prentice, Rt. Hn. R. E.

    Buchan, Norman

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

    Price, Thomas (Westhoughton)

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

    Jenkins, Rt. Hn. Roy (Stechford)

    Price, William (Rugby)

    Callaghan, Rt. Hn. James

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

    Probert, Arthur

    Cant, R. B.

    Jones, Dan (Burnley)

    Rankin, John

    Carmichael, Neil

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

    Rees, Merlyn

    Coe, Denis

    Jones, J. Idwal (Wrexham)

    Richard, Ivor

    Coleman, Donald

    Kelley, Richard

    Robertson, John (Paisley)

    Cullen, Mrs. Alice

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

    Rose, Paul

    Dalyell, Tam

    Kerr, Russell (Feltham)

    Sheldon, Robert

    Davidson, Arthur (Accrington)

    Lawson, George

    Shore, Rt. Hn. Peter (Stepney)

    Davies, Ednyfed Hudson (Conway)

    Leadbitter, Ted

    Short, Mrs. Renée(W'hampton,N.E.)

    Davies, Harold (Leek)

    Ledger, Ron

    Silkin, Rt. Hn. John (Deptford)

    Davies, Ifor (Gower)

    Lestor, Miss Joan

    Silkin, Hn. S. C. (Dulwich)

    Dell, Edmund

    Lever, Harold (Cheetham)

    Slater, Joseph

    Dempsey, James

    Lewis, Arthur (West Ham, N.)

    Small, William

    Dewar, Donald

    Lewis, Ron (Carlisle)

    Snow, Julian

    Diamond, Rt. Hn. John

    Lomas, Kenneth

    Spriggs, Leslie

    Doig, Peter

    Loughlin, Charles

    Steele, Thomas (Dunbartonshire, W.)

    Dunn, James A.

    Lyons, Edward (Bradford, E.)

    Swingler, Stephen

    Dunwoody, Mrs. Gwyneth (Exeter)

    Mabon, Dr. J. Dickson

    Symonds, J. B.

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

    McBride, Neil

    Taverne, Dick

    Edwards, Robert (Bilston)

    McCann, John

    Thomson, Rt. Hn. George

    Edwards, William (Merioneth)

    MacColl, James

    Thornton, Ernest

    Ellis, John

    Macdonald, A. H.

    Tinn, James

    English, Michael

    McGuire, Michael

    Tuck, Raphael

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

    Mackenzie, Gregor (Rutherglen)

    Urwin, T. W.

    Faulds, Andrew

    Mackintosh, John P.

    Varley, Eric G.

    Fernyhough, E.

    Maclennan, Robert

    Walker, Harold (Doncaster)

    Fitch, Alan (Wigan)

    McNamara, J. Kevin

    Wallace, George

    Fletcher, Raymond (Ilkeston)

    Mahon, Peter (Preston, S.)

    Watkins, David (Consett)

    Fletcher, Ted (Darlington)

    Mahon, Simon (Bootle)

    Watkins, Tudor (Brecon & Radnor)

    Foley, Maurice

    Mallalieu, E. L. (Brigg)

    Wellbeloved, James

    Foot, Michael (Ebbw Vale)

    Manuel, Archie

    Whitaker, Ben

    Ford, Ben

    Marquand, David

    Whitlock, William

    Forrester, John

    Mason, Rt. Hn. Roy

    Wilkins, W. A.

    Fowler, Gerry

    Mellish, Rt Hn. Robert

    Williams, Alan (Swansea, W.)

    Fraser, John (Norwood)

    Millan, Bruce

    William, Alan Lee (Hornchurch)

    Freeson, Reginald

    Miller, Dr. M. S.

    Williams, Mrs. Shirley (Hitchin)

    Galpern, Sir Myer

    Milne, Edward (Blyth)

    Williams, W. T. (Warrington)

    Gardner, Tony

    Moonman, Eric

    Winnick, David

    Gray, Dr. Hugh (Yarmouth)

    Morgan, Elystan (Cardiganshire)

    Woof, Robert

    Greenwood, Rt. Hn. Anthony

    Morris, Alfred (Wythenshawe)

    Yates, Victor

    Gregory, Arnold

    Neal, Harold

    Griffiths, Eddie (Brightside)

    Newens, Stan

    TELLERS FOR THE NOES:

    Griffiths, Rt. Hn. James (Llanelly)

    Noel-Baker,Rt.Hn.Philip(Derby,S.)

    Mr. Harry Gourlay and

    Mr. Ernest Armstrong.

    Clause 14
    ALTERATIONS IN PERSONAL RELIEFS
    Amendment proposed: No. 270, in page 9, line 24, at end insert:—
    (2A) A man who becomes married during a year of assessment may by notice in writing to the inspector elect that his marriage be disregarded for the purposes of any claim for that year under section 214 or 215 of the Income Tax Act, 1952 or section 17 of the Finance Act, 1960 (housekeeper etc. relief), and, in that case, the marriage shall also be disregarded for the purposes of any claim for that year under section 10 of the said Act of 1952 (married and single relief).—[Mr. Harold Lever.]
    Mr. Deputy Speaker: With this Amendment it will be convenient to discuss Amendment No. 268, standing in the name of the hon. and learned Member for Darwen (Mr. Fletcher-Cooke) and the names of other hon. Members, in page 9, line 24, at end insert:
    (3) Where a man to whom subsection (2) hereof applies satisfies the conditions set out in section 214(1) of the Income Tax Act, 1952, as regards part of the year in which his marriage takes place, he shall be entitled to relief under the said section as if the sum specified in subsection (1) thereof were reduced by one-twelfth for each month of the year ending after the date of the marriage.
    (4) For the year 1968–69 and subsequent years section 214 of the Income Tax Act, 1952 shall be amended by substituting for the reference to £75 a reference to £120.
    Mr. J. E. B. Hill: I am sorry that the Financial Secretary has not explained the purpose of Amendment No. 270, but I apprehend that it was put down to meet a point I had raised with the Chancellor of the Exchequer in correspondence. It seemed that Clause 14(2) in its present form was about to create an anomaly— indeed, an injustice—which arose from the fact that the Treasury had overlooked the case of a widower with a housekeeper allowance marrying and having his allowances apportioned by the operation of Clause 14(2)
    It was decided in the courts some time ago that a taxpayer cannot claim a housekeeper allowance and a married allowance in the same tax year—the allowances are mutually exclusive. Before this year it was no great hardship for a widower remarrying in a tax year to forgo the housekeeper allowance of £75 in favour of the married allowance of £120,
    1588
    but the Clause as it stands would reduce the married allowance to a widower remarrying in the latter part of the year and at the same time deprive him of his housekeeper allowance. Therefore, if he married in the last six months of the year he would be worse off.
    The Chancellor has sought to meet this point by Amendment No. 270, and in so far as he fills the gap I am grateful. But he has filled it in the meanest possible way. He is saying that the taxpayer would have the option in his year of remarriage of sticking to his housekeeper allowance of £75 and having no part of the married allowance. I think that I am right in saying that it would pay the taxpayer to opt for his housekeeper allowance if he married in the last seven months of the year but that in the first five months of the year he should abandon the housekeeper and stick to the apportioned wife's allowance. It may take a bereaved or remarrying accountant to appreciate the niceties of the allowances, but an anomaly has been created and Amendment No. 268 would meet the difficulty in a manner both more logical and more generous.
    The first part of Amendment No. 268 says that if we are to apportion at all then we should apportion both allowances and—for that part of the year when the widower has a housekeeper he should have months allowed at the rate of £75 a year and in the subsequent months after marriage at the rate of the married allowance, £120 a year.
    8.0 p.m.
    We go further. In the second part of our Amendment we suggest that the housekeeper allowance should be raised from £75 to £120. We say that because it is common experience that it is more expensive to find and pay for a housekeeper if one is a widower with young children than for a wife. It is a fact of economic life that housekeepers are dearer than wives. I therefore hope that the Chancellor will accept our point of view, because it has the merit not only of being generous, which may not particularly commend itself to the Treasury, but of restoring the position of 1920, when the allowance for the housekeeper was the same as that for a wife, although admittedly at a rather different level from that now obtaining.

    1589
    I should like to know how much it would cast to be generous. A balancing item would be that there would be some administrative saving, because the remarrying widower with a housekeeper allowance would not need to have an apportionment if the allowances were the same.
    Miss Harvie Anderson: I should like to support my hon. Friend the Member for Norfolk, South (Mr. J. E. B. Hill) and say how glad I am that the Government have put right this anomaly to some extent. At the same time, I emphasise that I am sorry that they did not see fit to go as far as our Amendment suggests, because this seems to me a rather mean response to a very deserving case. While I am grateful for small mercies, I am not satisfied that they could lot have been a little more generous.
    This is a sore subject for many people, because, while Amendment No. 270 makes a small concession, there is a far wider range of consideration which would be out of order on this Amendment. Many categories of people for whom there is no housekeeper allowance are as badly in need of such an allowance as the category with which we are dealing. I should like to take the opportunity to tell Treasury Ministers that they continue to convey the impression that homes run themselves.
    These two Amendments are concerned with the ability of people to run their homes. A series of disasters might occur which would put any home absolutely out of action overnight. The fundamental consideration with which both Amendments deal, and the much wider range of interests beyond, is whether it is to be made possible for a home to continue as such. That is why I criticise the limitations of the concessions, because when it becomes impossible to maintain a home the burden which falls on the Treasury is often greatly in excess of any tax concession which has been seriously considered by any Government.
    We women who run our homes wish that we could get across to Treasury Ministers, successive Treasury Ministers, the fact that we do quite a job and that those of us who are standing here when
    1590
    we should be cooking dinner have someone else to cook the dinner. This may be an opportune moment to remind hon. Members of that. If that single point can be got across to Treasury Ministers, a whole range of married women's tax concessions will be changed very quickly.
    I am glad that some thought has been given to the position of a very small category of people who find themselves dependent on a housekeeper or on a wife, but, while I welcome the improvement which the Government Amendment brings about, I commend to the attention of the Government the vast range of tax improvement and reform needed in this whole respect.
    Mr. Michael Shaw: I support Amendment No. 268. Obviously, we must be grateful to the Chancellor for his Amendment, but I fully concur that it does not go far enough. What is astonishing is that we have this flash of logic from the Treasury Bench about how illogical it is that a marriage allowance is given for a whole year, although the recipient may be married for only a month or two in that year, and about how, in this day and age, it is time to put that right.
    But, that having been put right, a series of anomalies arises from having put it right. To correct those anomalies, the Government do not take the logical step, but proceed to work on what might be called the good old time-honoured system of taking what is administratively the most convenient way out, and that is exactly what has happened in this instance.
    If it is argued, as it was argued in Committee and at other times, that subsection (2) makes the law of marriage allowance more logical, if it is found that the alteration affects other allowances, those allowances should be altered in exactly the same way and on exactly the same principle as marriage allowance is altered. That has not happened. The newly-married person has to choose whether to claim marriage allowance, or housekeeper allowance, or the allowance for looking after children if he is a widower. The Treasury has accepted that conflict of principle and we have not had any explanation of why the principle adopted in subsection (2) has not been

    1591
    adopted in the Amendment for the allowances under Sections 214 and 215.
    It must be remembered that these allowances are given for a purpose. They are given because it is thought right that they should be given and because they are needed by the people receiving them. If a housekeeper allowance is needed for nine months a year before a person is married, the fact that he gets married at the end of that nine months does not mean that his need for the allowance during that nine months is any way alleviated.
    That need remains the same. Having got married at the end of the nine months, he is allowed marriage allowance for three months, presumably because the Treasury thinks it right and because it thinks that he needs that allowance for three months. But he has to meet a need before he is married and a need afterwards. He now has to choose which allowance to have. The only logical answer is clearly that he should have the apppropriate proportion of both allowances for the year in which he gets married.
    I suggest that we accept the Government Amendment and that they accept the second part of our Amendment, so that the whole House would be satisfied and, what is more important, justice would be done.
    The Financial Secretary to the Treasury (Mr. Harold Lever): I deferred commenting on this Amendment because I thought that the hon. Member for Norfolk, South (Mr. J. E. B. Hill) should have the opportunity not only of explaining it but of criticising it, being grateful where gratitude was appropriate and disappointed where some disappointment was not altogether without possibility of anticipation. We owe the Amendment to the hon. Gentleman's raising this point, originally by letter. He drew attention to an anomaly which had escaped the attention of everyone, and we are grateful to him for enabling us to put it right, although not to his most ebullient satisfaction, this year.
    At any rate, we will not get the singularly unattractive situation of a man losing the benefit of his housekeeper allowance later in the year because he gets married. I see the force in some of the arguments that have been made, if one were able
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    satisfactorily to achieve the meticulous justice which hon. Members seek in this matter. I share their attitude, but unhappily our system of allowances is almost always upon an annual basis. It is true that hon. Members may point out that we changed the bowling, so to speak, by making marriage allowances apportioned. This was a year in which we had to exact a very formidable sum of new taxation from the community.
    Given that decision, we looked for the areas where we could most reasonably seek to exact some taxation. One of the most obvious ones was that a man should not get a year's marriage allowance if he had been married for only a day in that year. From this, we got the concept of apportioning the marriage allowance. [Interruption.] I see that the right hon. and learned Member for Hexham (Mr. Rippon) thinks it is—
    Mr. Geoffrey Rippon: Outrageous.
    Mr. Lever:—outrageous. He thinks that we should pay a year's marriage allowance, even in a difficult year like the present one, to a man who has been married for a day. It seemed to us, and I think most hon. Members will feel the same way, that if one has to exact so much extra taxation, here was a source of many millions which could be tapped, when people were receiving marriage allowances for a full year, although they had been married for only a fraction of part of that year. This seemed reasonable on the face of it, but it gave rise to this anomaly. We tried to put it right as fully as we could without imposing a new set of administrative splittings in annual allowances, and that is why the concession made is not as generous as many hon. Members would like. I am afraid that it has to be accepted for the present, and I would recommend the House to accept this Amendment, which goes a good deal towards meeting what the hon. Gentleman had in mind.
    I am not at all without sympathy for the difficulties of people in this situation. I have been put into the position of having to lose—I am not at all disappointed at the consequences—my housekeeper allowance in order to achieve a marriage allowance. I must say that at that time I was at once an immediate gainer because I got the marriage allowance for the whole year.
    Dr. Reginald Bennett: Shutting the stable door after the horse has bolted.
    Mr. Lever: One horse has bolted. I feel a good deal of sympathy for people in this position. None the less, I must ask the House to accept that, this year at any rate, it would not have been possible to introduce yet another split for the sake of what would be marginal sums of money. I will not go into competitive computations with the hon. Gentleman about at which point of time how much monye would have been involved. I hope that he will accept our gratitude for drawing this anomaly to our attention and that, although disappointed, he will support the Amendment, which represents a real attempt to meet the complaint as reasonably as we can.
    As to any other concessions on the housekeeper allowance, I take the points made, as I say, with personal understanding and sympathy of the position. Alas, this is not a year in which the Chancellor is likely to give rein to my normally sympathetic inclinations. I must ask hon. Members to make their appeals in a subsequent year, when we are under no such strict exigencies as we are this year. For these reasons I ask the House to accept the Amendment, which is intended to meet in a broad way, the difficulties raised by the hon. Member. We cannot accept any other concession at the present moment.
    Mr. Charles Fletcher-Cooke: I am not sure that the appeals for gratitude which the Financial Secretary has addressed to us have fallen on very receptive ears. These two Amendments went on the Order Paper simultaneously. This in itself is perhaps a coincidence, perhaps not. The Government's Amendment is the barest justice, much meaner than the Amendment in the names of myself and my hon. Friends. The amount of difference in money to the Exchequer, even in what the Financial Secretary calls "this difficult year" must be trivial. I do not know why he cannot accept what my hon. Friend the Member for Norfolk, South (Mr. J. E. B. Hill) put forward in a most reasonable manner.
    I cannot believe that there is much money in the difference. It strikes me that this is cheeseparing. On the other
    1594
    hand, better half a loaf than no bread at all. We ought not to take any more time over this. There was an obvious injustice in the Government's first proposal, and we are grateful at least that they have seen the light, even at this late stage.
    Amendment agreed to.

    Clause 14
    ALTERATIONS IN PERSONAL RELIEFS
    8.15 p.m.
    Mr. Fletcher-Cooke: I beg to move Amendment No. 239, in page 10, line 26, at end insert:
    (6) Any individual, who by virtue of the said subsection (3) suffers a reduction in the said deductions from tax, being an individual who has given an option notice under the provisions of Part II of the Housing Subsidies Act, 1967 (Assistance for House Purchase and Improvement), may rescind that option notice by a notice of his desire so to do (hereafter in this subsection referred to as a 'withdrawal notice') given in writing to the lender at any time before 6th April, 1969 by him or his personal representative, and a withdrawal notice shall have the effect of rescinding the option notice as if that option notice had not been given; to the extent that such option notice may have take effect in connection with subsidy or taxation prior to its rescission, the appropriate financial adjustments shall be made.
    This Amendment deals with option mortgages—that famous implementation of the large pledge given by the right hon. Member for Belper (Mr. George Brown) and others in the election campaign. In this implementation a great number of people in very humble circumstances have been led into a trap, quite recently and quite directly, by the Government. In Committee the Financial Secretary, in his charming and engaging way—I do not say that he admitted this, but he expressed buckets of sympathy for them when he said:
    "Nevertheless, I see that the hon. and learned Member has a point which one would like to meet if it were at all possible. I do not want to show absolute lack of sympathy with the people concerned … simply a question of possibilities of administering the scheme … not without sympathy for the purposes of the hon. and learned Gentleman … I am not committing myself to a belief that some Amendment of the law would be possible."—[OFFICIAL REPORT, Standing Committee A, 15th May, 1968; c. 837.]
    From a Treasury Minister, those are encouraging words. We had hoped that

    1595
    by this stage the Financial Secretary, with the great resources of Government Departments behind him, all racking their brains, might have done something to alleviate what is no less than a scandal. Nothing has happened, not a single chink of light from a Government Amendment. Since the Committee I and a number of hon. Members have received many letters from the deluded people who were taken in by the Government's promises, and who opted for the Government mortgage scheme.
    In Committee, I held up the booklet issued by the Ministry of Housing and Local Government which was a guide to the scheme and which said:
    "Read this booklet. You may gain by it."
    It stated—and at that time it was right— that, broadly speaking, if one did not pay the standard rate of Income Tax of 8s. 3d. in the £ on any of one's tax, one would be better off opting for the Government scheme. In other words, one should change one's ordinary commercial mortgage for the Government scheme and one would profit by it; if one were taking out a new mortgage, one should take out the option mortgage rather than an ordinary mortgage if one were not paying the standard rate on any slice of income.
    Then there was a warning note in the booklet to the effect that a person should consider whether he would always be paying the same rate of taxation, because his circumstances might change. For example, if he ceased to be entitled to children's allowances, or something of that sort, he might find that his top slice went up into the standard rate, or, alternatively, if he was paying the standard rate and his income was reduced he might go below the standard rate, and he had to take into account the changes in his domestic circumstances and to make up his mind, because he had to opt finally by the end of December, 1967, in the case of an existing mortgage or, in the case of a new mortgage, when he took it out.
    But there was no suggestion made to these relatively uninstructed people to whom the booklet was directed that they should also take into account possible changes in the structure of tax. That was never mentioned. They were not put on warning that the Government might, so soon after the introduction of the
    1596
    option mortgage scheme, change the rules, which is what they have done by Clause 14. They have brought many families into the standard rate of tax in respect of their higher income because they have —I will not use the word "fiddled" because that is an emotive word—rearranged the system of family allowances, for the best of motives, in such a way that many people, previously earning exactly the same amount of money, have, in the current financial year, been brought into the standard rate of Income Tax. As a result, those who opted for the scheme in good faith, bearing in mind the considerations which the Government told them to bear in mind but not those which the Government did not tell them to bear in mind, are now much worse off than if they had never opted for it.
    I must refer to the letter which I read in Committee. It is one of many which I have received, but it is still the best. It concerns a man buying a house on a long-term mortgage and supporting a wife and four small children. His total income last year was £1,426 and the total tax which he paid was £12 5s. If things had remained as they were, he would have saved about 15s. a week by going over to the Government's option mortgage scheme; and, of course, he did so. But, having gone over to it, as a result of the rearrangement of children's allowances and the consequent upping of the top slice of his income, far from being 15s. a week better off, he is 10s. a week worse off than if he had paid no attention to the booklet and had not listened to the siren songs of the right hon. Member for Belper or of the Minister of Housing and Local Government, or anybody else. He would have been far better off if he had kept to his ordinary mortgage. Now he is 10s. a week worse off. This represents a swing of 25s. a week, which is very serious for a man in those circumstances.
    The first argument put forward by the Financial Secretary is that people have to take tax changes on the chin, and that we cannot expect taxation rearrangements to be tempered to the shorn lamb, because otherwise there is no end to the matter. The second argument is that acceptance of our Amendment, which would mean reopening the option, is administratively impossible, not only for the Government, but for the building societies. I say

    1597
    nothing on the second point, except that if the Financial Secretary and the Treasury wanted to do something about these people they could always make a compensating tax reduction. It may be impossible to reopen the option, but it is not impossible for the Treasury to say that people who have suffered, whether it be to the extent of 5s., 10s. or 15s. a week, should have a compensating amount deducted from their tax. What is wrong with that in practice or in principle?
    As for the quality of retrospection, I would merely say that there are endless philosophical, almost theological, arguments about the degree to which a Government may impose retrospective disadvantage—I put it no higher—upon the subject. But I have never heard of any principe which permits a Government who have tempted and trapped people into this situation so recently as six months beforehand and who have encouraged them to rely on the law as it then stood so to alter the arrangements that they are not merely no better off but positively worse off than if they had closed their ears to these temptations. That is disgraceful.
    One can understand people taking, or seeking to take, advantage of the tax law as it stands subsequently finding that they do not obtain that advantage because the Treasury has been sharp and has taken it away. We do not like that, but we understand it. However, when people take advantage of the law as it stands and rearrange their affairs and then find that, as a result of subsequent legislation, they are not merely no better off but positively worse off than if they had relied on the law, that is retrospection with a vengeance and should never be done.
    Here it has been done, not to tax evaders and avoiders, but to hundreds of people whose votes were sought and won. It is a scandal, and, by one means or another, if not by the means which we suggest, the Government owe it to their honour to put it right.
    8.30 p.m.
    Mr. Barnett: I am a little surprised to find that the Financial Secretary is to reply, because I thought that he did not reply to hopeless cases. This seems to me to be an indefensible position which the Government have to defend. I am
    1598
    unhappy about the working of the option mortgage scheme as it stands. The idea is basically a first-class one, the idea of helping those to buy a house who would not otherwise be able to buy a house and of helping existing mortgage payers at the lowest end of the scale. I hope that nobody here would object to that idea. I should have thought that, in principle, this is something all of us could support.
    The Government, however, seem to be frightened of giving the scheme a real chance to work, and I suspect that the Building Societies Association has been persuading the Government almost to play it down, because the publicity of it, and the way it has been started and the way it has been working, are such as to give the impression that the Government have a sort of half-hearted approach to the whole idea of the option mortgage scheme.
    The Joint Parliamentary Secretary to the Ministry of Housing and Local Government said on 7th May that about 4 per cent. of the existing borrowers who had to make a decision by 31st December, 1967, changed to option mortgages. So about 4 per cent. had opted for the lower interest rate, but I think that it would be agreed, as has been said by the Minister himself, that it is up to 20 per cent. of mortgage payers who could benefit by the scheme. Because of this rigid limitation they have not been able to benefit. Surely it is shameful that the Government should have adopted this sort of niggardly approach which cuts out so many people from the benefits of the scheme. I find it difficult to understand why the Government have adopted this sort of attitude, the major argument which we have had for it being the administrative difficulties of the building societies in dealing with it.
    I would have hoped that the Government could have gone much further than this Amendment. I would have hoped that they would have made it possible for people who did not do so by 31st December, 1967, to opt in, as well as making it possible for people to opt out as the Amendment would allow, because there are changed circumstances. As has been explained by the hon. and learned Gentleman the Member for Darwen (Mr. Fletcher-Cooke), for the man who exercises his option it is now costing more.

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    I do not believe that one can argue that this is anything like the same situation as applies in the case of those who evolve complicated tax avoidance schemes, or even not so very complicated tax avoidance schemes, such as buying life assurance policies to save tax. I do not believe that it is anything remotely like it. It cannot be compared in any way with that sort of thing, because here the Government said that the mortgage payer could benefit under the scheme and then the Government changed the circumstances.
    In the normal way of things, even with a quite legitimate tax avoidance scheme, the person taking part in it can expect that the circumstances may be changed. Indeed, he is invariably advised—he should be advised, and usually is—that things may change. Even the two-fifths life assurance premium allowance can be changed up or down. All these things can happen in a simpler scheme. Certainly they can happen, and have in the past happened in the more complicated ones.
    This, however, is a totally different situation, and the Minister's reason for not allowing a change in opting in as well as opting out because of the administrative considerations seems to me to be wholly insupportable. I do not think that that answer is anything like good enough. As to the way the scheme works at present, it is not quite as the hon. and learned Gentleman said. He said that if a mortgage payer is a standard rate taxpayer he has nothing to gain. That is not strictly true, because if he is paying at 6s. and a little at the standard rate he could still benefit from the mortgage option scheme. The question whether he should opt in is often a very fine calculation. The sort of person we are talking about does not have advice; he does not get advice from an accountant; he has probably nobody to advise him. Even if he has someone to advise him, circumstances change so much as to make his decision one of very fine calculation. He may be near retiring age and, though he is now paying tax at the standard rate, in a few years' time he will not be paying at the standard rate; he may have a child aged 13 who, in a couple of years' time, will leave school, and though he is not now paying at the standard rate he will be then. There is an
    1600
    infinite variety of circumstances in which people decide whether or not to opt in.
    Of course, the Government have made it that much more difficult by Clause 14(3), because of the reduction of the child allowance. It was difficult enough for a person to make the right choice before, but given this Clause the position has been made impossible. It seems to me that the Government are under an obligation, if they do not concede a change in the scheme, to concede (his point. There is a strong case for changing the scheme fundamentally to make it easier for building societies to allow all interest payments as a reduction and not allowable for tax in such a way that the standard rate taxpayer does not gain anything by it, but neither does he lose; that those at the lower rates of tax gain something; and those those paying no tax gain the whole of the reduction in the interest rate.
    In other words, something like the family allowance scheme and reduction of tax, taking the two things together, so that the standard rate taxpayer does not gain, the lower paid taxpayer gains a little, and the non-taxpayer gains the whole family allowance. If something like that could be done with a mortgage option scheme, it would make it administratively much simpler and it would not cost a great deal. If it were limited to a mortgage up to a certain level, even for a standard rate taxpayer with a £2,000 mortgage, it would not cost the Government very much if they made the situation such that that standard rate taxpayer did not gain anything but neither did he lose. I should like to see the whole scheme changed more extensively to make it not only simpler for administration, but to help a much wider range of people.
    It is a great shame that, of the 20 per cent. of people who could benefit, only 4 per cent. do. There must be something wrong with the scheme if it is so complicated that the person we want to see benefit cannot clearly see that he is able to benefit. A much simpler scheme along the lines that I have suggested might cost something more, but we could start off by limiting the level of mortgage to which it would be applicable. It would be simpler to administer and affect many more people at a more moderate cost.

    1601
    Meanwhile, I feel that the Government are obliged to accept this Amendment because it would at least put right the position for those who accepted the option under the instructions of the Bill and of the booklet issued by the Government. People who made their decision based on that should now have their circumstances changed so that they do not suffer any further.
    Mr. Walter Clegg: For once I am pleased to be able to follow the hon. Member for Heywood and Royton (Mr. Barnett) in supporting this Opposition Amendment.
    I congratulate my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke) on the way in which he clearly put the dilemma which has resulted from this Government option mortgage scheme.
    I will refer to the pamphlet, which has been quoted, to show how the choice of people was directed by the Government Department concerned. The pamphlet— and this part is in larger print than the rest—states, on page 4:
    "But if you qualify for tax relief on your interest at only 6s. or 4s. in the £ or get no tax relief at all, you will normally be better off with in option mortgage and the Government subsidy."
    When the pamphlet goes on to discuss what happens if one's circumstances change, that is in small print. Therefore, the Government are faced with people who have acted not only on what they make of the scheme, but who have acted directly on the pamphlet which the Government have issued for their help in reaching a decision.
    Possibly one criticism which can be made of the scheme from the beginning is that it: is very complex. As the hon. Member for Heywood and Royton very properly said, the people exercising this mortgage option scheme normally do not go to accountants or even solicitors for advice. I contend that if someone looked at the pamphlet as a whole, and in particular at the tables given in it, his eyes would be drawn—as the pamphlet intends—to the big print which says that if someone is paying tax at below the standard rate, on balance this would be the best thing to do.
    1602
    I have sent the Financial Secretary a copy of a letter I received from one of my constituents, and perhaps I might quote from it:
    "Thus, by accepting two socially-intended benefits, not only do I not gain at all, although I have seven children under age 14 and a mortgage of some £2,400—I actually incur a net loss of £3."
    That is, of course, a net loss of £3 per month. I can give the hon. Gentleman the figures in that case because they have been worked out by the tax collector.
    I cannot imagine that the Government wanted that to happen, but if we put forward cases such as that to Treasury Ministers, or to Ministers in the Ministry of Housing and Local Government, we are inevitably told, not that there is no justice in what we are asking for, but that it is administratively impossible to do it. It is no use telling people that they must suffer injustice because it is administratively impossible to put it right. People do not appreciate that argument.
    The writer of the letter went on to say:
    "I am at present in the extraordinary situation where it would be to my financial advantage to pay £2 a month for the privilege of not receiving either benefit."
    I cannot conceive that even this Government want that state of affairs to exist, and I hope that the hon. Gentleman will take careful note of the arguments put forward today. I am sure that he will.
    It is very difficult for the change to be made vis-à-vis the building societies, to reopen the option mortgage scheme, but the suggestion put forward by the writer of the letter is that if the family allowance itself were not reduced as it is in the Act by £36, at the standard rate, it should be deducted at the higher rate paid by the taxpayer before the new allowance came in. I do not know whether that would meet the situation, but perhaps the Minister will comment on it.
    The Financial Secretary comes from a part of the world in which many people who are buying houses qualify under the scheme. I am thinking of mill workers, factory workers, and so on, who buy houses worth between £800 and £2,500. They accepted the Government's word

    1603
    as given in the pamphlet, and although they were warned that their circumstances might change, this was not the sort of change envisaged when they opted for the mortgage. I hope that the Minister will give us what we are asking for.
    Mr. G. Campbell: I, too, support my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke) who has so lucidly explained the injustice which could be done to certain people who have taken decisions under the Housing Subsidies Act, 1967. Under that Act a prospective house purchaser was given a choice. He could decide to take the option mortgage and pay a special rate subsidised by the Government, or he could continue to have a normal mortgage, and, if he paid a considerable amount of tax, get relief on that. His decision depended on the amount of tax for which he was likely to be liable in future years.
    As the hon. Member for Heywood and Royton (Mr. Barnett) said, this was never an easy decision. I was a member of the Committee which considered the Housing Subsidies Bill, and I then used much the same words as those used by the hon. Member for Heywood and Royton today. If he looks up the OFFICIAL REPORT of the Committee he will see that on several occasions I referred to the difficult decisions which had to be taken under the Act. There were different circumstances for different members of the public. Prospective house purchasers had, somehow, not only to foresee their own likely rate of income in the future but also the liability to taxation of that income, and whether or not there would be any significant raising or lowering of taxes. This was very difficult for them.
    8.45 p.m.
    Now, within a year of that Measure becoming law—in May last year—the Government have put forward a proposal which completely changes the liability to Income Tax of many persons who had to decide whether or not to take part in the opition mortgage scheme. This change will have upset the simplest calculations of a person who gave an option notice before the end of last year, and it is reasonable that he should now be given an opportunity to rescind that decision.
    1604
    I realise that the Government will say that they cannot go on for ever allowing those who have taken decisions under the option mortgage scheme to change their minds. I will understand it if the Minister puts forward that argument tonight. But this is a very special situation, because up to December, 1967, people who already had mortgages were given the opportunity to take such a decision. They were given a deadline. Many of those who opted for the scheme find themselves in completely changed circumstances, and some may be considerably worse off. In this situation the Government can take special action this year without committing themselves to having to make other changes later just because there is another change in taxation.
    I can understand the Government's saying that this is not deliberate. I agree that it is not their intention to mislead prospective house purchasers, but many people have been misled and let down by the Government. They have taken a very important decision, and the circumstances have now been radically altered.
    I was not in the Committee which dealt with the 1967 Act and I am therefore glad to be able to speak on Report on this Finance Bill. I am glad that the Guillotine has not yet come down. I understand that in Committee the Government said that it was administratively too difficult to make this change but, as my hon. and learned Friend the Member for Darwen said, some recompense can be made by the Government to the people who have been caught by their actions.
    The Government know that in Committee and in the House last year we supported the concept of an option mortgage scheme. Like the hon. Member for Heywood and Royton, I was in favour of the idea. My hon. Friends and I assisted the Government by improving the Bill that they produced and attempting to improve it further still. We would have proposed somewhat different provisions in this respect.
    We were not altogether happy with their proposed procedure. But we would not have let that Bill become an Act if we had thought that the Government would, in this Finance Bill, make changes in the personal reliefs and thereby alter individual allowances and upset entirely

    1605
    decisions taken in good faith before the Budget.
    I therefore appeal to the Financial Secretary, who is a reasonable man, to see that justice is done in this matter.
    Mr. Harold Lever: This has been an interesting and sincere and, even though critical, moderately expressed debate, and I wish that this Amendment had made it possible for me to remain in order and discuss what might have been, in other respects, the best drafting of an option mortgage scheme, and matters of that kind. Unhappily, I am concerned only with the narrower point of what we do about people who opted into the mortgage scheme and who, as a result, find that, instead of gaining as they intended and as, I think hon. Members will accept, we in good faith intended, they lost.
    In Committee, I expressed my wish to try to help these people if it were possible to do so. I did not say and I do not concede now, for reasons which I will give, that they were the victims of an injustice. That does not mean that I do not feel real sympathy for them, and, if I readily could, I would have helped them. I spent a good deal of time between Committee and now trying to evolve some means of satisfactorily dealing with the problem, and I have not been able to find any.
    It has been said that this is retrospective and unjust. First of all, there is nothing retrospective whatever in this legislation. I thought that a good deal of the discussion on this was away from reality. When people were invited to exercise this option, it was pointed out to them that whether they gained or lost would depend upon their circumstances and that this gain or loss might change as their circumstances changed. The kind of circumstances upon which the gain or loss depends include tax rates, interest rates—[An HON. MEMBER: "It was not said."] It might not have been said, but I am not free to go into that.
    If the hon. Gentleman is complaining that the; Minister responsible for the scheme did not sufficiently adumbrate and detail the circumstances of change, that may be another matter which would be very well dealt with by the Minister responsible for issuing the pamphlet. I can say only that we are satisfied that everybody was warned that changed
    1606
    circumstances would affect his position and people were warned that circumstances could change which would affect their position to a point at which, instead of gaining, they would lose.
    I do not think that it would be in order for me to read through every detail of the pamphlet and then invite the House to judge whether I have fairly stated this matter. This is a matter which hon. Members are free to press, perhaps in criticism of the type of scheme, the structure of the scheme, and the like, but I am obliged to tell the House that, although I think that this can be a hardship, the extent of which I will discuss in a moment, and a hardship with which I fully sympathise and which I should like to avoid, the fact remains that people who opted under the scheme opted in the knowledge that their circumstances could change in a way which would make their option unrewarding as opposed to rewarding and that they would suffer actual loss.
    Secondly, they were warned that, when they opted, that option would be irrevocable—
    Mr. Dempsey: Would my hon. Friend make it clear at what stage these people were warned that a change in circumstances could negative the option which they had expressed?
    Mr. Lever: At the stage before they opted for the mortgage scheme. In other words, before they opted they were informed that an option could turn out unfavourably if their circumstances changed.
    I am not prepared to turn this into a debate—nor is it possible to do so— in which we examine the whole of the pamphlet put out by the Ministry to see whether the warning was adequate. That is another matter. I gather that the right hon. and learned Member for Hexham (Mr. Rippon) thinks that it is not another matter. I, for my part, will assert that the warning given was a reasonable warning, both as to irrevocability and as to change of circumstances.
    None the less, I will not pretend that I do not regret that it has affected, and so soon, people who have opted.
    Dr. Bennett: They trusted the Government.
    Mr. Lever: It is not a question of trusting the Government. The Government did not enact their tax legislation with a view to nullifying the effect, or. still worse, affecting the situation adversely for these optants.
    May I point out to the hon. Member for Moray and Nairn (Mr. G. Campbell) that no one in the Committee claimed, as far as I know, that he foresaw the kind of difficulty which this would bring about, namely, that a change in tax rates could be complained of as a retrospective action under the option mortgage scheme. If one were to say that because a taxation change has this effect on the option mortgage scheme, it is retrospective, because the man is locked in, then one must also make that complaint of any change in allowances or in the standard rate of tax or matters of that kind.
    Did the public, did hon. Members who voted for that Act, believe that we were indicating that at no point would we change our standard rate of tax or change our tax allowances for the next 20 or 30 years in such a way as—
    Mr. G. Campbell: I made it clear in my statement that we realised that there would be changes in taxation, but that we did not visualise that those who had to take a decision by a deadline last December would find the ground completely cut from beneath their feet by something announced in March.
    Mr. Lever: It does not matter whether it was announced in March, 1968, or in March, 1978. Hon. Members have accused the Government of retrospection because the tax rates have been changed to the detriment of someone locked in the option mortgage scheme. Those people knew that they were locking themselves in and they knew that a change in their circumstances might result in that being to their detriment.
    If hon. Members say that the situation is unfortunate, I join them. It is unfortunate that somebody so soon should suffer in such a way. But without a misuse of language, hon. Members cannot talk of this as retrospection or as though the Government implied, when they brought in the Bill, that they would never change the tax rates or allowances in such a manner as might affect these people to their detriment. Clearly, that
    1608
    would have been an impossible commitment for any Government to undertake, and the present Government certainly did not undertake it.
    I therefore say sharply—or, rather, I say that we must sharply make a division between sympathy for the people who are affected and that kind of accusation. I rarely speak sharply, and I meant to say that the distinction must be sharp. We must make a sharp division between a claim which merits sympathy for consideration and a claim which commands an imperative right to be corrected by the Government to the extent of legislation being enacted, the Government having retrospectively legislated to the detriment of people in an improper way. I agree with the first part of the claim, but I reject the second part completely.
    I must make one or two comments on the problem of dealing with opting out. If options out are allowed on these grounds it is difficult to see how one could draft one's option opting outright so as to limit it to these cases and no others. There must be other cases of people whose circumstances have changed, by a change of interest rates, a change of earnings, a change in the number in the family and matters of that kind, whom we might wish to opt out. We would, therefore, have to allow the opting out this year to the whole class of people concerned, and we would, in addition, have a very dubious ground on which to stand if we did not give the same right to people similarly affected in the second or third year.
    It is not possible to single out one person who has been adversely affected and not deal with people who have at least as good if not a stronger claim, and this would be necessary before I could recommend a Clause that did reasonable justice to all the people concerned.
    9.0 p.m.
    The further problem is that the administration of the scheme is sufficiently difficult as it is, not merely for the Inland Revenue. I could look into the matter to consider whether we could by some heroic exercise yet again try to meet the problem, but I am completely unable to help on the aspect that the scheme depends for its operation on the co-operation of the building societies. The building societies have said in the plainest

    1609
    terms that they cannot operate the scheme except on the basis of an irrevocable decision taken by the people concerned. I am not, therefore, in a position to give the relief in a form that would enable opting out to take place, since I cannot commit the building societies, and I have every reason to believe that it will be impossible to get them to change their view upon the matter. Therefore, I could not do what is asked in the Amendment or what was asked in Committee.
    Hon. Members have quoted cases of the significant changes that have occurred. The hon. and learned Member for Darwen (Mr. Fletcher-Cooke) mentioned a case in which he calculates that a man, instead of being 15s. a week better off, will be 10s. a week worse off. I have applied the skilled computers of the Inland Revenue to the facts so far as they have been revealed, and, on any reasonable assumption that we can make about the facts which were not revealed, we worked out that the man in question, however genuine in his conviction, has in fact moved from a position of 5s. to 6s. a week gain to a loss of about 1s. a week.
    I want hon. Members to keep this in proportion. I do not say that 1s. a week must be ridiculed. For example, it may mean that the loss is coupled with the disappointment of losing the gain that had been expected. I do not think that it will be easy for the hon. and learned Gentleman to find cases where there are losses of either £3 a month or even of the 10s. a week that he has mentioned.
    Mr. Fletcher-Cooke: I am surprised that at this late hour the details which I gave in Committee three or four weeks ago, and which I repeated tonight, have only now been challenged. I should have thought, either when we were upstairs, or a day or so later, the Financial Secretary might have written to me asking for further details of the case, and, if he challenged it, letting me know how he challenged it.
    Mr. Lever: In Committee, we did not give this computation to the Committee. It has been alleged that there are cases of a loss of as much as £3 a month. I should be very interested to have details from the hon. and learned Gentleman, not at this moment but at some convenient time. I will certainly have it
    1610
    looked into. Hon. Members have now put forward the suggestion that we ought to look at the other possibilities of dealing with the matter.
    Mr. Cranley Onslow: The Financial Secretary may recall that I sent particulars to him of a loss which was about £2 a month, if not more. I am sorry to say that I have not yet had any full reply. The delays that have occurred in answering correspondence on this point have been disappointing.
    Mr. Lever: I am sorry if the hon. Gentleman has not had a prompt reply. I deeply regret it. There is a pressure of work upon the Department at this season which is the only mitigating plea that I can make. I do not say that that excuses it. I very much apologise to the hon. Member for any delay, and I shall have the matter looked into immediately.
    Mr. Barnett: On 7th May the Parliamentary Secretary to the Ministry of Housing and Local Government said that while he could not allow opting in or out after 31st December, 1967, he was looking at cases of special hardship. Is the Financial Secretary now saying that it is possible to look at cases of special hardship that might arise out of this or any other matter?
    Mr. Lever: I was going on to say that the discussions which we have had today, coupled with the fact that I have never disguised my sympathy with those who are affected, make me feel that this matter ought to be looked at very carefully, not necessarily from the Revenue angle, which was the rather narrow approach we had here, but in more general terms, to see what is the extent of the difficulty and what are the possibilities other than a mere opting in and out for revenue purposes, which is impossible administratively both for the Revenue and for the building societies.
    I think that hon. Members have made a very considerable case which should be looked at to see what considerations can be given to people affected in this way. I am particularly grateful to my hon. Friend the Member for Heywood and Royton (Mr. Barnett), who sits in the seat that I used to occupy with some satisfaction in previous years, and I am

    1611
    glad that he brings the same dispassionate objectivity to bear on these matters.
    I am not retreating behind the narrow plea of the Revenue. There is a case to be looked at. But, within the framework of our discussions in Committee and again today, I cannot help. That does not mean that that sheds the whole Government obligation. My hon. Friend the Parliamentary Secretary to the Ministry of Housing and Local Government pledged himself to look into it, and that pledge ought to be followed up. I will add my words in support of the comments made today that the matter should be given the most urgent examination. All that I regret is that, within the framework of the Amendment and the administration of tax, I cannot put this difficulty to rights.
    I hope that hon. Members will not think that I have failed in my duty which was, after the Committee stage, to see what could be done within this framework to solve the problem. On the other hand, I am unable to help, but that does not mean that the matter must not be looked at urgently elsewhere.
    Mr. Rippon: None of the people who who have been so seriously misled by the Government will be impressed by the crocodile tears that the Financial Secretary has shed. I thought that it was a thoroughly hypocritical and unsatisfactory reply—
    Mr. Harold Lever: The right hon. and learned Gentleman apparently likes to indulge in polysyllabic adjectives. Does he mean that I was insincere in my assertions of sympathy, or does he consider that some other meaning should be attached to it?
    Mr. Rippon: I thought that my words were clear and censorious in their tone, and deliberately so. I cannot understand how the Financial Secretary can challenge the facts laid before his Department by many hon. Members on both sides of the House not only in correspondence but in Committee and in Parliamentary Questions put to the responsible Ministers in the Ministry of Housing and Local Government. It is not good enough to say, "We are very sympathetic. We think there is a case which ought to be looked into." It should have been looked into by now.
    1612
    The Financial Secretary began by saying that he had real sympathy for people who have suffered hardship as a result of the decision that they have taken in the light of guidance which they received from the Government. He said that they had been unfortunate. But who other than the Government can put that right? He has conceded already that something has gone seriously wrong, but then he says, "There is nothing that we can do about it".
    Mr. Harold Lever: I did not say that there is nothing that we can do about it. I said that there is nothing that we can do about it within the framework of the Amendment.
    Mr. Rippon: The Government have all the resources to frame an Amendment in a form which remedies an injustice, even if it means making an ex gratia payment to those who have suffered as a result of their action. It is not good enough for the hon. Gentleman to say that the document which misled the public was the responsibility of the Minister of Housing and Local Government. It is the Government's collective responsibility, and the Treasury shares it as much as anybody else. The Government were aware of the document that was sent out and of the guidance given to people that those paying less than £80 per annum in tax were likely to benefit from an option mortgage. Many of them have been misled and as a result have suffered financially. Surely the Government can do something about such cases?
    In our discussions on the Housing Subsidies Act we on this side of the House pressed unsuccessfully for a second option to be permitted to mortgagors. That is a matter which perhaps raises considerations for wider amendment of the Act in due course. We pointed out the inflexibility of the Government's provisions and warned of the dangers that might arise. We were then discussing the difficulty that faced a man entering into a mortgage in making the decision, perhaps very early in his life, as to whether or not he was likely to go on paying, say, 6s. in £, for a very long period or was likely to improve his prospects. It was understood that people would have to make the decision in the light of their assessment of their circumstances, such as

    1613
    whether they were in the sort of occupation that had reasonable prospects of promotion and advancement.
    For the person buying a house under an existing mortgage, it was rather easier to make the decision whether he was likely to benefit by the new provisions. That is why a higher proportion of existing mortgagors have exercised the option as compared with new mortgagors.
    In the light of what the Minister said today, the Government should warn people in pretty strong terms that they should take advice from sources other than the pamphlet before they exercise an option. Last month's building society magazine, Building Society Affairs, illustrated some of the difficulties now arising under the Act. As it says,
    "The Scheme was devised at a time when most societies were charging 7⅛ per cent. to borrowers but now that the mortgage rate has risen to 7⅝ cent., tax reliefs have increased whereas the subsidy has remained static so that the advantage of opting has diminished…. It is now particularly difficult for a person in the 6s. tax band to make up his mind whether or not to opt because, for every £1,000 borrowed, he will, at the end of 25 years, be only £85 better off through opting. After 10 years (the average life of a mortgage) the advantage, taking into account the balance of debt outstanding, would be only £32 for every £1,000 borrowed."
    That is part of the general anxiety which arises at present to which the hon. Gentleman referred. It is a disappointing scheme, and it is not fulfilling in any way the expectations of those who promoted it or those on this side of the House who supported it, believing that it would bring some benefit to those in the lower income ranges.
    We are not really seeking, however, to raise tonight the general issue as to
    whether or not in ordinary circumstances a man should exercise the option. We accept that people must make a judgment as to whether their conditions will change or whether the standard rate may change, because one assumes that as the standard rate changed so the whole range of reliefs would be spread generally over the whole community. The effect on the option of the subsection about family allowances is in a sense a comparatively minor adjustment which nobody might have foreseen. It is because it is a limited point, and because the hardship can be so clearly identified, that we think that the Government should do their duty and compensate those who have been misled.
    9.15 p.m.
    At the very least we ought to have an undertaking in much firmer terms than we have had so far that this extremely misleading document sent out in the Government's name—"Your guide to the option mortgage scheme"—will be amended and reissued. Also, the Government, who spent a good deal of money on an advertising campaign telling people of the advantages of joining the option mortgage scheme, should now issue a further series of advertisements explaining how they have falsified the hopes on which so many people were induced to act, and in those advertisements they ought to state the steps which they are taking to enable those who have suffered hardship as a direct result of the Government's action to be compensated.
    Question put, That the Amendment be made:—
    The House divided: Ayes 139, Noes 194.

    Division No. 265.]

    AYES

    [9.16 p.m.

    Allson, Michael (Barkston Ash)

    Campbell, B. (Oldham, W.)

    Farr, John

    Allason, James (Hemel Hempstead)

    Campbell, Gordon (Moray & Nairn)

    Fletcher-Cooke, Charles

    Astor, John

    Carr, Rt. Hn. Robert

    Fortescue, Tim

    Awdry, Daniel

    Chichester-Clark, R.

    Gibson-Watt, David

    Baker, W. H. K. (Banff)

    Clegg, Walter

    Gilmour, Ian (Norfolk, C.)

    Balniel, Lord

    Cooke, Robert

    Glover, Sir Douglas

    Beamish, Col. Sir Tufton

    Craddock, Sir Beresford (Spelthorne)

    Godber, Rt. Hn. J. B.

    Bennett, Dr. Reginald (Gos. & Fhm)

    Crowder, F. P.

    Goodhart, Philip

    Biggs-Davison, John

    Cunningham, Sir Knox

    Goodhew, Victor

    Black, Sir Cyril

    Dance, James

    Gower, Raymond

    Blaker, Peter

    Davidson, James (Aberdeenshire,W.)

    Gurden, Harold

    Bossom, Sir Clive

    d'Avigdor-Goldsmid, Sir Henry

    Hall, John (Wycombe)

    Braine, Bernard

    Dean, Paul (Somerset, N.)

    Harrison, Col. Sir Harwood (Eye)

    Brewis, John

    Dodds-Parker, Douglas

    Harvie Anderson, Miss

    Brown, Sir Edward (Bath)

    Eden, Sir John

    Hawkins, Paul

    Bruce-Gardyne, J.

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

    Heald, Rt. Hn. Sir Lionel

    Bryan, Paul

    Emery, Peter

    Heath, Rt. Hn. Edward

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

    Errington, Sir Eric

    Higgins, Terence L.

    Buck, Antony (Colchester)

    Eyre, Reginald

    Hill, J. E. B.

    Hooson, Emlyn

    Onslow, Cranley

    Taylor, Sir Charles (Eastbourne)

    Hordern, Peter

    Osborn, John (Hallam)

    Taylor, Frank (Moss Side)

    Hornby, Richard

    Osborne, Sir Cyril (Louth)

    Temple, John M.

    Hunt, John

    Page, Graham (Crosby)

    Thatcher, Mrs. Margaret

    Iremonger, T. L.

    Page, John (Harrow, W.)

    Turton, Rt. Hn. R. H.

    Jenkin, Patrick (Woodford)

    Pardoe, John

    van Straubenzee, W R.

    Kirk, Peter

    Pearson, Sir Frank (Clitheroe)

    Vaughan-Morgan, Rt. Hn. Sir John

    Kitson, Timothy

    Peel, John

    Waddington, D.

    Lane, David

    Percival, lan

    Wainwright, Richard (Colne Valley)

    Langford-Holt, Sir John

    Pounder, Rafton

    Walker, Peter (Worcester)

    Legge-Bourke, Sir Harry

    Powell, Rt. Hn. J. Enoch

    Walker-Smith, Rt. Hn. Sir Derek

    Lewis, Kenneth (Rutland)

    Prior, J. M. L.

    Ward, Dame Irene

    Lubbock, Eric

    Pym, Francis

    Weatherill, Bernard

    MacArthur, lan

    Ramsden, Rt. Hn. James

    Wells, John (Maidstone)

    Mackenzie, Alasdair (Ross & Crom'ty)

    Rees-Davies, W. R.

    Whitelaw, Rt. Hn. William

    Macleod, Rt. Hn. lain

    Rhys Williams, Sir Brandon

    Williams, Donald (Dudley)

    McMaster, Stanley

    Rossi, Hugh (Hornsey)

    Wills, Sir Gerald (Bridgwater)

    Maddan, Martin

    Russell, Sir Ronald

    Wilson, Geoffrey (Truro)

    Maginnis, John E.

    Scott, Nicholas

    Winstanley, Dr. M. P.

    Maude, Angus

    Scott-Hopkins, James

    Wolrige-Gordon, Patrick

    Mawby, Ray

    Sharples, Richard

    Wood, Rt. Hn. Richard

    Maxwell-Hyslop, R. J.

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

    Woodnutt, Mark

    Mills, Peter (Torrington)

    Silvester, Frederick

    Wylie, N. R.

    Miscampbell, Norman

    Sinclair, Sir George

    Younger, Hn. George

    More, Jasper

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

    Mott-Radclyffe, Sir Charles

    Smith, John (London & W'minster)

    TELLERS FOR THE AYES:

    Murton, Oscar

    Stainton, Keith

    Mr. Anthony Grant and

    Nabarro, Sir Gerald

    Summers, Sir Spencer

    Mr. Hector Monro.

    Nott, John

    Tapsell, Peter

    NOES

    Albu, Austen

    Fitch, Alan (Wigan)

    Lomas, Kenneth

    Alldritt, Walter

    Fletcher, Raymond (llkeston)

    Loughlin, Charles

    Allen, Scholefield

    Fletcher, Ted (Darlington)

    Lyons, Edward (Bradford, E.)

    Archer, Peter

    Foley, Maurice

    Mabon, Dr. J. Dickson

    Atkins, Ronald (Preston, N.)

    Foot, Michael (Ebbw Vale)

    McBride, Neil

    Atkinson, Norman (Tottenham)

    Ford, Ben

    McCann, John

    Baxter, William

    Forrester, John

    MacColl, James

    Beaney, Alan

    Fowler, Gerry

    Macdonald, A. H.

    Bence, Cyril

    Fraser, John (Norwood)

    McGuire, Michael

    Benn, Rt. Hn. Anthony Wedgwood

    Freeson, Reginald

    Mackenzie, Gregor (Rutherglen)

    Bennett, James (G'gow, Bridgeton)

    Galpern, Sir Myer

    Mackintosh, John P.

    Bishop, E. S.

    Gardner, Tony

    Maclennan, Robert

    Blackburn, F.

    Ginsburg, David

    McNamara, J. Kevin

    Blenkinsop, Arthur

    Gourlay, Harry

    Mahon, Peter (Preston, S.)

    Boardman, H. (Leigh)

    Gray, Dr. Hugh (Yarmouth)

    Mahon, Simon (Bootle)

    Booth, Albert

    Greenwood, Rt. Hn. Anthony

    Mallalieu, E. L. (Brigg)

    Bottomley, Rt. Hn. Arthur

    Gregory, Arnold

    Manuel, Archie

    Braddock, Mrs. E. M.

    Griffiths, Eddie (Brightside)

    Marks, Kenneth

    Bradley, Tom

    Griffiths, Will (Exchange)

    Marquand, David

    Brooks, Edwin

    Hamilton, James (Bothwell)

    Mason, Rt. Hn. Roy

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

    Hamilton, William (Fife, W.)

    Mellish, Rt. Hn. Robert

    Bucnan, Norman

    Hamling, William

    Mendelson, J.J.

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

    Hannan, William

    Millan, Bruce

    Callaghan, Rt. Hn. James

    Harper, Joseph

    Miller, Dr. M. S.

    Cant, R. B.

    Harrison, Walter (Wakefield)

    Milne, Edward (Blyth)

    Carmichael, Neil

    Haseldine, Norman

    Moonman, Eric

    Coe, Denis

    Heffer, Eric S.

    Morgan, Elystan (Cardiganshire)

    Coleman, Donald

    Henig, Stanley

    Neal, Harold

    Crawshaw, Richard

    Herbison, Rt. Hn. Margaret

    Newens, Stan

    Cullen, Mrs. Alice

    Hooley, Frank

    Noel-Baker, Rt. Hn. Philip (Derby, S.)

    Dalyell, Tam

    Horner, John

    Oakes, Gordon

    Davidson, Arthur (Accrington)

    Houghton, Rt. Hn. Douglas

    Ogden, Eric

    Davies, Ednyfed Hudson (Conway)

    Howarth, Harry (Wellingborough)

    O'Malley, Brian

    Davies, Harold (Leek)

    Howie, W.

    Orme, Stanley

    Davies, lfor (Gower)

    Hoy James

    Oswald, Thomas

    Dell, Edmund

    Huckfield, Leslie

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

    Dempsey, James

    Hughes, Roy (Newport)

    Page, Derek (King's Lynn)

    Dewar, Donald

    Hunter, Adam

    Palmer, Arthur

    Diamond, Rt. Hn. John

    Irvine, Sir Arthur (Edge Hill)

    Pannell, Rt. Hn. Charles

    Dickens, James

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

    Parker, John (Dagenham)

    Doig, Peter

    Jenkins, Rt. Hn. Roy (Stechford)

    Parkyn, Brian (Bedford)

    Dunn, James A.

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

    Pavitt, Laurence

    Dunwoody, Mrs. Gwyneth (Exeter)

    Jones, Dan (Burnley)

    Pearson, Arthur (Pontypridd)

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

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

    Peart, Rt. Hn. Fred

    Edwards, Robert (Bilston)

    Jones, J. Idwal (Wrexham)

    Pentland, Norman

    Edwards, William (Merioneth)

    Kelley, Richard

    Perry, George H. (Nottingham, S.)

    Ellis, John

    Lawson, George

    Prentice, Rt. Hn. R. E.

    English, Michael

    Ledger, Ron

    Price, Thomas (Westhoughton)

    Ensor, David

    Lestor, Miss Joan

    Price, William (Rugby)

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

    Lever, Harold (Cheetham)

    Probert, Arthur

    Faulds, Andrew

    Lewis, Arthur (W. Ham, N.)

    Rankin, John

    Fernyhough, E.

    Lewis, Ron

    Rees, Merlyn

    1616

    1617

    Richard, Ivor

    Steele, Thomas (Dunbartonshire, W.)

    Wellbeloved, James

    Robertson, John (Paisley)

    Swingler, Stephen

    Whitaker, Ben

    Rodgers, William (Stockton)

    Symonds, J. B.

    Whitlock, William

    Rose, Paul

    Taverne, Dick

    Wilkins, W. A.

    Sheldon, Robert

    Thomson, Rt. Hn. George

    Williams, Alan Lee (Hornchurch)

    Shore, Rt. Hn. Peter (Stepney)

    Thornton, Ernest

    Williams, Mrs. Shirley (Hitchin)

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

    Tinn, James

    Williams, W. T. (Warrington)

    Silkin, Rt. Hn. John (Deptford)

    Tuck, Raphael

    Winnick, David

    Silkin, Hn. S.C. (Dulwich)

    Urwin, T. W.

    Woof, Robert

    Silverman, Julius

    Varley, Eric G.

    Yates, Victor

    Slater, Joseph

    Walter, Harold (Doncaster)

    Small, William

    Wallace, George

    TELLERS FOR THE NOES:

    Snow, Julian

    Watkins, David (Consett)

    Mr. Ernest Armstrong and

    Spriggs, Leslie

    Watkins, Tudor (Brecon & Radnor)

    Mr. Ernest G. Perry.

    Clause 15
    AGGREGATION WITH INCOME OF PARENTS OF INVESTMENT, ETC. INCOME OF UNMARRIED INFANTS NOT REGULARLY WORKING
    Mr. Diamond: I beg to move Amendment No. 153, in page 10, line 35, leave out from beginning to ' so ' in line 36 and insert:
    'Subject to the following provisions of this section, an infant's income'.
    Mr. Deputy Speaker (Mr. Sydney Irving): It may be convenient with this Amendment to discuss Government Amendments No. 154, No. 155 and No. 156.
    Mr. Diamond: I am grateful to you for that suggestion, Mr. Deputy Speaker, because the four Amendments go together. All told, they achieve two purposes. The first is to implement my undertaking to take out of aggregation a child's income arising from sums awarded for personal injury to the child. The second is to retain in a somewhat generalised form the de minimis exception for a child's income not exceeding £5 arising from parent-child settlements.
    Of course I will explain as much detail as the House wishes, but I think that the Amendments broadly speak for themselves. The details of the personal injury exclusion are set out in paragraph (b) of the new subsection (2) and the definition reproduces that of personal injuries inserted in Section 31 of the Limitation Act, 1939, by the appropriate Section of the Law Reform Act, 1954, so that we are relying on words which have precedent and which should be capable of easy interpretation.
    We covered this matter fairly fully in Committee. I have explained my understanding of the view of the Opposition, which is that the matter ought to go further, but I have made it clear that,
    1618
    however sympathetic I am to that point of view, I am totally unable to find a method of further distinguishing income which is to be exempt from aggregation from still further proposals which would immediately be put forward. I have therefore brought forward the proposal which I undertook to introduce and I have recognised that it is limited in the way which I suggested.
    The issue of the £5 limit was raised in Committee by the hon. Member for Bournemouth, West (Sir J. Eden), and I made it clear that I thought that it would be very unfortunate if anybody thought that the removal of the £5 exemption meant that the Government no longer regarded savings as being of the same importance as previously, or the need to encourage savings as being as important as previously. We do, and to make it absolutely clear that we do we are re-introducing, in a somewhat generalised form, the £5 exemption. Income within this figure will continue to rank as that of the child for tax purposes, and will not therefore be aggregated. This deals with the first two Amendments. The other two are broadly consequential.
    9.30 p.m.
    Mr. Iain Macleod: I have two comments to make, which I will relate to Amendment No. 154. I want to express gratitude to the Chief Secretary. In our discussions in Committee this became known as the thalidomide case. The effect of this Amendment, although it is not limited to thalidomide cases, but this was the one most in people's minds, is that the sums awarded in compensation because of injury to the infant shall not be aggregated with that of their parents.
    In a sense it has always seemed extraordinary that we had ever to press such an obvious point before the Government conceded it. It would have been disgraceful if such an aggregation had been made. The point has been made, pressed

    1619
    and recognised, and we are grateful for that. I suppose that it is inevitable that the Treasury had, even in the case of these deprived children, such as a thalidomide babe, to draw this concession so as to make is at small and mean as possible.
    For the child compensation directly related to the claim for damages in respect of personal injury to the infant or any disease or impairment to the physical or mental condition is allowed. However, unless I read this wrongly, the Treasury still aggregates with the income of the parents any investment income which might be left to the child by a grandparent or any other relative, or in any other way, whether the thought of compensation was in the grandparents' mind or not. I think that I am right in saying that what is put before us now is strictly limited to the satisfaction of the claim for damages.
    I would have thought that, in considering a matter as sensitive as this, the Treasury could have relaxed a little further and said that children who suffered this appalling misfortune should not have any income which may be left to them aggregated as well. I am bound to record that note of disappointment at the narrowness of the Treasury interpretation of the undertaking given upstairs, but the undertaking has been honoured and as far as it goes it is extremely welcome.
    Mr. Michael Shaw: I should like to support my right hon. Friend's arguments. The Treasury could have gone that bit further. One has only to look at some simple examples to illustrate the case that has been made. Let us look at a child who has been injured in a motor car accident. It so happens that the accident was the fault of someone who was not insured, and who had no private funds. Under those circumstances, there is clearly a case for personal damage. If it goes to court, and the claim is quantified, it will never be met, because the person concerned did not have an insurance policy covering him or any private funds. Had he been insured, there would have been a claim which would have been met and the money from it would have gone into a fund, the income from which would have gone each year to the child and would not have been aggregated with that of the parent.
    1620
    In the case in which there was no insurance and the person concerned was a man of straw, although the claim could be quantified, and although a grandparent might be willing to pay a similar sum of money into a fund, the proceeds each year would be regarded as the income, not of the child, but of the parent and would be aggregated for tax purposes.
    The essence of this matter should have been to consider the character of the capital sum involved and the reason for the existence of the trust rather than the source from which it came. While we must be grateful for the Amendment, the logic of the situation, if logic there be— I believe that humanity guided the Chief Secretary rather than logic—should have allowed him to go that bit further and include all trust funds which arise, by whatever means, because of the illness or mental or physical condition of the child.
    Mr. Fletcher-Cooke: I am troubled by the word "damages", which implies to me damages awarded in or out of court. It implies an adverse action—that is to say, a mishap due to the negligence or perhaps even the active wrong of another person, perhaps a driver, doctor, or drug firm in the case of a thalidomide baby.
    Is it apt to cover cases in which no one is at fault, in which there is no adverse action, and in which the mishap is a pure accident and the compensation is paid purely from insurance?
    Suppose that a child is insured against personal injury by its parents and, through nobody's fault, it falls out of a window or into the fire, or its nightdress catches fire. There is no negligence, but the compensation is paid on account of the child's insurance. I do not regard that as damages in law. My concept of damages is something which results from a claim against someone who has been negligent. I am concerned to ensure that the matter is not limited to damages in the sense in which I understand the word, but includes the sort of insurance compensation which I have mentioned.
    Mr. R. J. Maxwell-Hyslop: I propose to mention the points to which my hon. and learned Friend the Member for Darwen (Mr. Fletcher-Cooke) has alluded. I am glad that he has done so,

    1621
    because he is legally trained and I am not.
    There are a couple of other aspects of the same general problem on which I should like the Chief Secretary's advice. What about ex gratia payments in cases in which no claim has been formulated? It is not unknown for ex gratia payments to be made. They may be made without prejudice or by a wealthier person or body to a less well off person who has suffered an accident and has no cause in law to plead in court. So there is no question of damages there.
    What happens, for instance, with children in this case, who are injured in an air crash? As the Chief Secretary may possibly be aware, under the Carriage by Air Act there are automatic damages— this is the ratification of the Warsaw Convention, is it not?—and the limit has been doubled. There is no question there of having to prove negligence. All one has to show is that one suffered damage in an aircraft which met with an accident. One doss not have to show that the airline or pilot vicariously or individually were responsible for it. Indeed, if one can show that the pilot was guilty of wilful negligence then, of course, the limiting provisions of the Act or the Warsaw Convention do not apply. So I think that my hon Friend has raised a point of very real substance here, because I doubt very much whether it was the intention of the Government to exclude cases of that kind.
    There is another point on which I seek information. Were I a lawyer I should know the answer, but I have a very distinct impression that damages given in court are very often quite unpredictable. There is not a table laid down which says, so much for a leg, so much for an eye, so much for a lung. That is why, so often, people are advised to settle out of court. One has the distinct impression that factors which are not directly related to the legal rights and wrongs come into the assessment of damages. For instance, if a child has been left £5,000 by its grandmother, can we be sure that this will not influence the judge in the award which he makes of damages?
    One suspects, very often, that what the judge says is, "What amount of money will this child need when it reaches
    1622
    mature years to ensure as reasonable a life as it is within the power of the court to endow him with?" If that child is the beneficiary of a trust fund, that process working in the judge's mind is likely, to put it mildly, to reduce the damages slightly, or, at any rate, reduce the sympathy, and even judges are human, with which the court regards the case when quantifying damages. If such a trust fund is to be grossed up rather than be subject to the relaxing provisions of Amendment No. 154, I think it will result in quite extraordinarily complex situations.
    So I would certainly endorse what my hon. Friends have pressed, namely, that this Amendment certainly could be accepted but that it should be redrawn very much more widely, or that there should be another Amendment in addition to it so that the benefits, if we can use such a term in a situation which is inherently disastrous for the person concerned, are not so unnecessarily restricted as they will be by the drafting of the Amendment.
    Mr. John Smith: I should like to say a brief word about Amendment No. 156, which has been selected with the other Amendments but which deals with Capital Gains Tax. The Chief Secretary did not, I think, mention this Amendment when he spoke. In Committee, I urged that if the income of children and parents were to be taxed together, as the income of husband and wife is already taxed together, then the transactions between children and parents should not be subject to Capital Gains Tax, in exactly the same way as transactions between husband and wife already are not subject to Capital Gains Tax.
    I think that the Chief Secretary, if he thinks for a moment, will realise that this Clause is bound to give rise to an increased number of such transactions. This is a very material point. The analogy is exact with husband and wife. Does this Amendment effect what I urged the Chief Secretary to effect in Committee, or, if it does not, as I fear, will the right hon. Gentleman undertake to deal with this point later?
    9.45 p.m.
    Mr. Diamond: Whenever anyone raises a new legal point, I think that it deserves careful consideration and not

    1623
    off-the-cuff answers given by a non-lawyer. Even if given by a lawyer, I still think that they should not be off-the-cuff answers. We are in the fortunate position that the legislation here, although we are on Report stage, is not required until next year. I could give off-hand indications, but it would be more sensible for me to take careful note of what has been said.
    I am not advised that I can give a clear answer immediately to the point that has been raised. It is clear that we all want to see that the exemption from aggregation is not limited by the sheer coincidence or happening that there was no pressure, there was no court case, or there were no proceedings before the money arrived; that one form of pressure for the money resulted in exemption from aggregation, because it was damages in the ordinary accepted sense, and another form of pressure did not so result. I am sure that is not what we want. We want to achieve what I have indicated.
    Equally, I am sure that we want to see that there is some relationship between the payment and the damage suffered by the child in the non-legal sense. Therefore, I think it would be far more sensible that I should undertake to give careful thought to everything that has been said, particularly on this new point and on the wording of the Amendment, as we have a full year in which to consider all that. I hope that what I have said indicates the way in which the Government are thinking about this matter.
    On the other hand, I think that I can deal straight away with what was said by the hon. Member for the Cities of London and Westminster (Mr. John Smith) about Amendment No. 156. The effect of that Amendment is that, for the purpose of calculating Capital Gains Tax under the alternative rate, about which the hon. Gentleman was concerned, aggregation under this Clause will be disregarded and any sum which would otherwise be caught by Section 397 but is regarded as the child's income by virtue of the amended £5 exemption will also be treated as his income for the alternative rate Capital Gains Tax computation. I think that that meets the point put to me by the hon. Member
    1624
    for the Cities of London and Westminster.
    I hope that the House will not believe that the Government have been unsympathetic or lacking in compassion in dealing with this matter. We are dealing with aggregation, nothing further than that. I illustrated in Committee that it has previously been the practice of all Governments, when dealing with aggregation of income for tax purposes—I have in mind particularly covenanted income of the children which, by law, belongs to the children, but which, for tax purposes, is treated as the income of the parent or covenanter and is, therefore, aggregated with that—wholly to disregard any compassionate circumstances affecting the parties concerned.
    I recognise that it was our duty to respond to the points made to us, particularly about the thalidomide children, and I think that we have carried that out—I agree with the hon. Member for Scarborough and Whitby (Mr. Michael Shaw)—with a mixture of logic and compassion.
    Amendment agreed to.
    Mr. Iain Macleod: I beg to move Amendment No. 67, in page 10, line 36, after 'infant', insert:
    'who has not passed the upper limit of the compulsory school age as defined in section 35 of the Education Act, 1944 or any statutory re-enactment or modification thereof'.
    We welcome the concession which has just been made and we are also grateful for the undertaking that in the coming year the Chief Secretary will consider the points which have been made.
    The Amendment provides us with the last opportunity that we shall have of discussing the Clause. I have made no secret from the beginning that I detest this Clause more than any other part of the Bill. It offends me more than the special charge, more even than the infringement of the Married Women's Property Act, and more even than the massive increases in taxation which have taken place.
    I made it clear in Committee, and I do so again now, that, subject to the right of a Chancellor to move against tax evasion, we shall have nothing to do with the Clause, and that we shall repeal it at the earliest possible opportunity.

    1625
    We have this one last chance of putting a particular point to the Chief Secretary, and this is concerned with the aggregation of the income of infants from the compulsory school age until they reach their majority if they are being educated. The injustices done by the Clause are manifest. Only one of them, the small concession which we have just discussed, has been put right.
    Thousands of people are affected by the Clause, and we tried in Committee to put forward an Amendment which, on reflection, I agree was too wide, that the Clause should not apply to children being educated. The Chief Secretary said, perfectly fairly, that that was, in effect, a wrecking Amendment, because it would mean that only children under 5 with investment incomes would be affected by the Clause, and clearly that would deprive the revenue of £25 million which the Treasury hoped to obtain.
    I am not particularly moved by the fact that it was a wrecking Amendment. I intend in due course to wreck the Clause, but one must keep within the limits of debate, and it was a valid point. We have, therefore, limited the Amendment to add the words
    "who has not passed the upper limit of the compulsory school age"
    as defined appropriately.
    It is common ground between all political parties, and, in particular, between all Secretaries of State for Education and Science of those parties, that it is desirable that children should stay at school for as long as they can benefit from schooling. That is not only desirable educationally. It is a vital part of the present and future economic strength of our country. There is no argument about this. The parties agree with it, and many people found it very sad that one of the consequences of the January economy cuts was that the raising of the school-leaving age was further postponed.
    I need not argue that the Amendment is educationally, economically and socially desirable; that is manifest. It is part of the policy of all three parties in the State. But the Clause says something quite different; it says that in circumstances in which an infant has investment income of its own, from whatever source—perhaps left by a grandparent, or derived in some other way—that income shall be aggregated with the income
    1626
    of the parent or parents unless the child is wholly employed in conditions defined in the Clause.
    There is a direct inducement to the parents of children who may happen to have a little investment money of their own to take their children away from school and put them to work at the earliest opportunity. That proposition is more appropriate to the Victorian warehouse than to the modern educational system. I need not argue the point; it is self-evident. It is extraordinary that in due course the Chief Secretary will rise at the Dispatch Box and, with his usual courtesy and skill, attempt to refute something that is simply irrefutable.
    There are two propositions on which I rest my case. First, it is common ground between all parties that all children who can benefit from schooling should stay at school certainly for the key years of their education. Secondly, it is common ground between us that it is undesirable that such children should be taken away from full-time schooling and pushed into full-time work. It is to put right this anomaly that the Amendment is moved.
    In Committee, I referred to what I called the philosophy and policies of envy which are enshrined in the Clause. I have always detested this approach. Some grandparents may think it a suitable use of the money that they have earned as a result of their labour in life to help their grandchildren. For the life of me I cannot see what is wrong with that. Those who took part in the detailed debate upstairs know that the Clause is full of absurdities and cruelties; indeed, it was the result of the opposition from my hon. Friends to this Clause that brought down the guillotine in the end—an event unprecedented in more or less modern times.
    I sum up by saying that the Amendment simply cannot be challenged on educational, economic or social grounds. We know the harm that the Clause will do. It will bring a great deal of distress to many women—especially divorced women. It will throw an unnecessary burden on to some children—especially children who are already deprived.
    So, as one last try to make a little more sense of a thoroughly bad Clause, we put this proposal before the House. It simply says that the Treasury should

    1627
    recognise what is recognised by all the political parties, namely, that no obstacle should be put in the way of children remaining in full-time education and benefiting from that education.
    10.0 p.m.
    Mr. Michael Shaw: I wholeheartedly support my right hon. Friend in this Amendment and in saying that we object to the whole Clause and are simply trying to improve a thoroughly bad Clause. On Second Reading, I spoke about this Clause, and said:
    "Some things about the Clause are particularly obnoxious. One implication is that when a child leaves school and has to make a choice between going into industry and going on to further education, his need for further education for further vocational training may not be the paramount consideration in working out his future career."—[OFFICIAL REPORT, 24th April, 1968; Vol. 763, c. 368–9.]
    I went on to give an example which should, I hope, be near the heart of the Chief Secretary, namely, the alternatives facing a father whose son might choose the career of accountancy.
    In making that choice, the son could first go to university and then take articles, or could go straight into a firm, taking articles immediately. If that child had an investment income and went to university, that income would continue to rank for tax purposes as his father's. If, on the other hand, we went straight into articles with a firm and earned a salary, that investment income would no longer be regarded as his father's—[HON. MEMBERS: "It is crazy."] This seems absurd, "crazy", as my hon. Friends say.
    These alternative arrangements, when they are thought out in the family circle must include in their consideration the thought about the tax liability of the parent who is helping to decide what shall be done. The child's educational requirements are not the only considerations in circumstances like this. Surely it is essential that we should try as far as possible to see that, when a child's career is being planned in the home, the only factors which shall be considered are the future of the child and the best education or preparation which he can have for his future career. Such considerations as the tax burden on the parent should not have to come into the matter.
    1628
    Therefore, as I said on Second Reading, if we must have a Clause like this, it should be limited to the compulsory school leaving age limit, which is 15. In our rough and ready way, my hon. Friend the Member for Ormskirk (Sir. D. Glover) and I put down an Amendment to that effect in Committee. Alas, it was not called. I am grateful to my right hon. Friend not only for having put it forward in more sophisticated form, but also for having been successful in having it called.
    This gets at the nub of the Clause. If we have to have it, so be it—let us have aggregation, as long as the child has no alternative than to stay at school. But once alternatives come in and a choice of careers is available to the child, once it is possible to go one way and relieve the tax burden of the parent, or to go another way to continue that burden for several more years, we are getting on to very dangerous ground and are influencing decisions which may be against the true interests and future of that child.
    As long as we have this Clause—and I hope that it will not be for long—I believe that the Amendment ought to be incorporated.
    Mr. Richard Wainwright: The concept which the Government thought out to try to rationalise their aggregation Clause is, to use the Government's own words, that of the "common spending unit". As I made clear in Standing Committee, Liberals have never accepted that, even if there is a common spending unit, it should necessarily involve those people in being an aggregated taxable unit.
    But insofar as they stick to the idea that the common spending unit should, therefore, be a common tax unit, the Government ought to welcome the Amendment, because if there is any water at all to be held inside the idea of a common spending unit, it certainly drops out the moment the school leaving age is passed. That is a matter of common observation which must be apparent to hon Members on all sides of the House. The moment a young person passes the school leaving age, whether he or she continues in full-time education or takes a job, in the ordinary habit of contemporary life he or she drops out of the common spending unit of childhood.

    1629
    I particularly resent the way in which this part of the Clause tries to drive a wholly artificial wedge between young people who are continuing their education and those who are gainfully employed. I draw attention to the words "working regularly" and "full-time occupation". In the ordinary use of language, those words manifestly apply to the young person who stays on at school to try to get good A levels. Few young people are working more regularly or are more fully occupied than those who are trying to get good A level results.
    But, as is so often the case in our tax Statutes, the English language has to be distorted to make "working regularly" and "full-time occupation" mean, for this purpose, something quite different from what is the common understanding of those terms. The Government are introducing an entirely artificial concept, one which I am sure will be rejected by the vast majority of young people of the ages affected, quite apart from their tax-paying parents. If only to rescue their own concept of a common spending unit, I hope that the Government will accept the Amendment.
    Mr. John Smith: This is a very good Amendment because it mitigates the most decadent aspect of all of the Finance Bill—the suggestion that we should live off our children.
    Indeed, far from extending to children the barbarous custom of treating a wife as the property of her husband for tax purposes, we should be freeing wives and giving them independence and equality with men. We on this side of the House certainly believe in the sanctity of the individual and believe that each should be treated separately. It is typical of Socialist Governments that they should seek to chain us together in gangs—to chain families into common spending units. It is an insult to deny children, these human beings, a separate identity.
    The Government have used the analogy of something bad—the barbarous custom which I mentioned of taxing a husband and wife together—in order to enact something worse. We ought at least to accord the dignity of a separate identity to human beings who have grown up and left school. The Amendment gets us
    1630
    away from one of the great difficulties of interpretation in the Clause, the difficulty of defining when a child is working "full time" at a job and
    "intends to be regularly engaged in it."
    How is an intention to be measured? Many hon. Gentlemen opposite intend to be "regularly engaged" here. What happens if a child loses his job, as some hon. Members opposite will? His intention and their intention was to remain in it. What happens if a child goes on strike, as most of mine do practically all the time?
    Mr. Speaker: The hon. Gentleman will not be out of order if he comes to the Amendment.
    Mr. Smith: I willingly admit that I am practically always out of order, but I am here describing the series of ill effects and difficulties of interpretation which arise if the Amendment is not accepted. If children lose their jobs, after they leave school, or go on strike, suddenly their parents are liable to pay their tax, and that places in their hands a dangerous weapon.
    The intention mentioned in the Clause is also related to a minimum period of 15 months between two periods of education. That would vanish if the Amendment were accepted. When a child takes a job, how is it known whether the period will or will not exceed 15 months? Are the tax returns for everybody to be held up for 15 months until we see what happens? Furthermore, 15 months can cover three tax years. Is income to be apportioned for parts of years? Presumably the phrase "regularly engaged" means that one is allowed to break it off. If it were not so, there would be no point in mentioning a minimum period of 15 months.
    Mr. Diamond: If the hon. Gentleman would be good enough to read the HANSARD record of the debates, he will find not only what he has said but what he is going to say and my full replies to all those arguments.
    Mr. Smith: I do not see why I should not quote myself. I often do, and it lends spice to my conversation.
    Mr. Speaker: The hon. Gentleman must not intervene in his own speech.
    Mr. Smith: I was glad to see that this habit of quoting oneself has spread from Enfield to Whitby. Unless we accept the Amendment, we must also interpret what is a full-time occupation, and I warmly endorse the admirable point which was made by the hon. Member for Colne Valley (Mr. Richard Wainwright).
    There are many difficulties here. Is a boy at a choir school paid for by way of scholarship in a full-time occupation? Is there a definition of "full time"? What about people who are paid to attend a course? What about members of the Services who are at university? Is that an occupation, or is it education? A distinction will have to be drawn because of the minimum period of 15 months. Who decides all these matters? Who decides all these important matters of interpretation—
    Mr. Speaker: Order. With respect, I enjoy the hon. Gentleman's speeches. He is speaking at the moment about subsection (3) which we are not debating. He must come to the Amendment which he is seeking to support.
    Mr. Smith: Mr. Speaker, there are these difficulties, which I think that I have sufficiently indicated, and there are the difficulties about stepchildren, which I went into in some detail in Committee. All of them will vanish if the amendment is accepted because they all occur after a child leaves school.
    In the short period of office remaining to them, if the Government must enact this decadent measure and take a bite out of our children, then I hope that they will at least reduce the bite in the way suggested in the Amendment.
    10.15 p.m.
    Mr. George Lawson: My heart is wrung when I hear these statements about our children and what is likely to happen to them under this Clause. I am struck by the effort to so change the Clause that it shall not apply after the age of 15.
    However, it seems to me that it would not matter. Probably two-thirds of our children normally leave school at the age of 15, and in my part of Scotland substantially more than two-thirds of them leave before they are 15. We hear all these heart-rending sobs about the youngster who will go on to become an
    1632
    accountant, or who will go to a university, but what about the youngster who leaves school at 15?
    What has been uncovered and what is being dealt with in the Clause as it stands is the widespread practice of tax avoidance which has grown up. I understand from an earlier statement that the savings in tax avoidance will amount to about £25 million. That does not sound much like a grandparent here and there, as one would gather from what right hon. and hon. Gentleman opopsite have said.
    The right hon. Member for Enfield, West (Mr. Iain Macleod) referred to the grandparent who puts aside a little money for his grandchild. It is apparent that a very large number of grandparents have been engaging in this practice, and if it is one which has become sufficiently widespread for the introduction of this method of beating tax avoidance to mean a saving of £25 million, it would appear that very many of the people whom I represent have been paying more tax than they should have been.
    Mr. Michael Shaw: Does the hon. Gentleman realise that it was disclosed in Committee from his side that if children's incomes of under £115 a year were excluded from aggregation, which is a figure well within the possibilities of savings at Christmas, and so on, half the benefit in tax would disappear?
    Mr. Lawson: I have looked into this point. If the people whose youngsters customarily leave school at 15 properly understood the tax system in this respect, there would be a revolution next week. A youngster leaving school at 15 and beginning to make a contribution at home is considered to be keeping himself and is no longer someone for whom his parent can obtain tax remission. But if he continues at school and goes on to university, his parent claims the tax remission. He may get a grant of as much as £370, and he can earn up to £115 without it coming into the purview of the taxation law.
    The youngster who starts to work at the earliest age possible is treated quite differently, and what right hon. and hon. Gentlemen opposite seek to do by this Amendment is still further to extend this kind of protection. It is a device that has grown up to benefit people with youngsters who want to go on and on at school,

    1633
    and then to obtain degrees and so on enabling them to earn so much more subsequently. Hon. Members opposite want them to make the money as easily as possible and want as much as possible to be paid for by tax avoidance.
    The hon. Member for Cities of London and Westminster (Mr. John Smith) does not know what some youngsters are like and the conditions in which they grow up. He talked about living on our children. What does he know about living on children? This is the kind of thing that has gone on too long. I could describe the circumstances in which many of our youngsters still grow up. Hers is a device whereby taxation payments will be remitted to the better off, or not paid by them, but it must in some way be added to the burden carried by the poorer people. If the House wants to do something to help the youngsters, it should help the poorer youngsters.
    Mr. John Smith: If the hon. Gentleman wishes to continue to abuse me, I hope that my intervention rather early in his speech will not prevent him from doing so. I think that he imagines that most of the income which children may or may not have comes from gifts. But the great majority comes from money which has been left to them. Does he think that death is a form of tax avoidance?
    Mr. Lawson: That intervention does not help. Do the youngsters begin to earn? Not so very long ago I knew youngsters who were beginning to make a contribution to the family income at the age of 9 or 10. It would be different if we were talking about youngsters who earned some money, but are our hearts to bleed because we hear that a youngster has a personal income from money left to him and that income is to be aggregated with his parents'? Why should not the income of such a child who has been left some money by grandparents, wealthy uncles or somebody else be aggregated with his parents' income? That is fair, is it not?
    1634
    Hon. Members opposite show very well where their interests lie. They are interested always in guarding privilege or developing another form of it. No sooner are little holes stopped up. or sometimes very big holes, than another is created by the brains of hon. Members opposite. The right hon. Member for Enfield, West looks at me as if he does not believe me, but he knows this very well.
    I just came in to hear the debate, and I am very happy to have been able to put in a word for the youngsters that I represent, who matter so very much. They leave school at 15, and in many ways we shall find that it is they who get the raw deal, not the youngsters whose total income amounts to so much that by the provision we are discussing £25 million more in taxation will be obtained. That is a lot of money, which does not involve very much hardship. I am delighted at this, and I shall listen with great care and attention to my right hon. Friend's case. I am absolutely with him, as are my hon. Friends.
    Mrs. Jill Knight: I did not have the benefit of serving on the Standing Committee, but I am fascinated by the Amendment and wish to put one small point. I understand that shortly the age of majority will be 18 and not 21. I believe that the Government have accepted this. What happens to the Clause then? We are already discussing the charming thought of infants who are unmarried and not working. I have a couple of infants who are unmarried, and it will not be very long before the eldest reaches the new age of majority.
    It seems to me that it is extraordinary that we apparently are now discussing the possibility of an infant reaching the age of majority at 18 and yet still having his income lumped in with that of his parents. When the right hon. Gentleman answers this excellent Amendment, will he please cover this point?
    Sir Douglas Glover: I do not propose to follow the hon. Member for Motherwell (Mr. Lawson) into the wild ideas which he has tried to stir up in what had up to then been a very sensible debate.
    Our argument is very much on the lines of trying to achieve what the hon. Member was talking about—improved education for all children. It is the wish of every education authority to persuade as many parents as possible to leave their children at school after the minimum leaving age of 15, and we are proud and happy that over the country as a whole already at least 30 per cent. are staying on. We are seeking in the Amendment to take away any incentive for parents to take their children away from school at an age earlier than they otherwise would have done if the Amendment were rejected.
    In these debates it is always generally assumed that every parent is a most desirable one. This does not necessarily follow. When we talk about children who have inherited some wealth, it may be that the grandparent left money to the grandchildren because he was by no means certain about the judgment or generosity or in some cases the love of the parents for the children. So the grandparent may have left out one generation and bequeathed his money to his grandchild deliberately and with a very definite purpose.
    Out of a population of 50 million there must be a considerable number of parents whose marriage is under strain and where there is tension in the household. This may be why the grandparents have left money directly to their grandchildren. The hon. Member for Motherwell and the Chief Secretary must realise that, with aggregation, there is enormous pressure in such a household to take the children away from school at 15 and put them into earning employment so that their income will not be aggregated with that of their parents. Here is a direct incentive for such parents to take their children away from school and so reduce the standard of their education.
    At a time when we are trying to get the school leaving age raised right across the board and to get children to stay at school until a later age, it is not in the national interest for anything to be
    1636
    done which provides an incentive, however small, to parents to take their children away from full-time education because it is in their selfish financial interest to do so. By aggregation the Government are making it in the direct selfish interest of such parents to take their children away from full-time education at an earlier date than they would otherwise do if the Government had not brought in this class-conscious, vicious Clause, based on jealousy. This is what is behind it, and it is unworthy of the right hon. Gentleman. I hope that in view of the argument that he has heard tonight he will, even now, accept my right hon. Friend's limited Amendment, which I believe goes the minimum distance to deal with a problem which should be dealt with in this year's Finance Bill.
    10.30 p.m.
    Mr. Diamond: We had many debates on this topic upstairs and out of them it became clear that there is a fundamental and sincere difference of view between the two sides on the principle of aggregation of children's income. We therefore must recognise in this debate that there are sincerely held utterly opposing views. The debate has brought out once more that those views are totally opposed and we must recognise— and no one could have been more straightforward than the right hon. Member for Enfield, West (Mr. Iain Macleod)—that the purpose of the Opposition is to destroy the functioning of this principle and this central Clause or, so far as they cannot destroy it, to reduce its effectiveness.
    It is not easy to deal with an Amendment without putting it into context. I hope that I may do so without going wider than the speeches which have been made and to which these remarks form the major reply. I want to take hon. Members with me through the different stages of what a grandfather might wish to do in order to help the growing family of his son or daughter. Many of us must be in this position. The son is newly married or starting to have a family, expenditure is great and the salary small. The grandfather may be able to help and is anxious to do so. He may wish to provide an income either in the form of a covenant or through settling capital in one form or another. He can do this in one of several ways.

    1637
    He can say to his son, for example, "You need help and I propose to settle some money on you". Secondly, he can settle the money on his daughter, if she is the child in question. Thirdly, if there is one grandchild, he can settle the money on that child. Fourthly, if there are two grandchildren, he can spread the money between the two.
    If he picks the first course—and in all four cases the income available for the married couple with their children is identical—there is a certain amount of tax payable by the parent because it is the income of the father. If he takes the second course, there is the same amount of tax payable by the parent because it is the income of the mother, and aggregation between mother and father has been accepted and carried out in practice by all Governments for very many years. [An HON. MEMBER: "It should be stopped."] When the hon. Gentleman is leading a party with the full support of the country in order to carry out his ideas as opposed to those of the Conservative: Party, no doubt it will be stopped, but meantime, if we are to deal with the world of reality, aggregation of the mother's and father's income is the policy and has been since every hon. Member has been alive. So, if the money is given to the mother, who happens to be the daughter of the well disposed grandparent, the same tax is payable as if it were left to the father.
    But it it is left to the child, more particularly if the same given amount, to be most advantageous for tax purposes can be divided between two children, a totally different amount of tax is payable by that family. The same income is available and it comes from the same source and it is available for the spending of a family of identical size. We will assume that that family needs it, and I have postulated that the family needs to spend it and is spending it. It is spending the same amount, but a totally different tax is available. Why? The reason is because we have previously not extended the principle of aggregating income as between wife and husband to the whole of the family. All the members live together as a family; they are a family unit; they are a single family unit; they are a single spending unit. It
    1638
    is sensible and right that the same tax principles should follow that.
    What is happening, however, is that an artificial series of arrangements has been made as a result of which, instead of the grandfather in question helping either his son or his daughter, being the mother or the father, he has been giving money to his grandchildren. Grandfather has said after Sunday lunch, "Let me go up the nursery and see how the babies are doing". He has gone up to one of the babies and said, "You are doing fine; here is £500 for you to spend yourself". That is what the hon. Member for the Cities of London and Westminster (Mr. John Smith) is talking about.
    Mr. John Smith rose—
    Mr. Diamond: I give way with pleasure.
    Mr. Speaker: Before the right hon. Gentleman gives way, he has so far been discussing the Clause. I hope that he will now come to the Amendment.
    Mr. Diamond: You are, of course, absolutely right, Mr. Speaker. I prefaced my remarks by saying that I would seek to put the Amendment in context, but I have clearly gone too far and I offer you my unreserved apologies, and I come at once to saying that the Clause, which seeks to withdraw the benefits obtained by these largely artificial transactions, will save the Revenue, the taxpayer generally, as my hon. Friend the Member for Motherwell (Mr. Law-son) correctly said, the general body of taxpayers, including the poorer, £25 million, is now sought to be amended in respect of children above the maximum school leaving age—
    "an infant who has not passed the upper limit of the compulsory school age as defined in section 35 …"
    The age which we can take for this purpose is 15, and it is suggested that beyond this age aggregation should cease.
    The only argument advanced in support of the Amendment has been that aggregation would encourage parents to take their children from school at the age of 15. It is seriously suggested that parents with children in the fortunate position of having an income of their own of a size sufficient to be relevant

    1639
    for Income Tax purposes will take their children from school in order to save themselves a slight further embarrassment of further taxation when, without aggregation, they would otherwise press them to remain at school.
    The right hon. Gentleman put this forward. I have never heard him say anything in which he did not believe, and I do not understand how he believes in it. It is inconceivable. Of course the principle behind this is one that I accept. Of course we should encourage children to stay at school. I am aware of this. I served for years as a member of the board of governors of an East End grammar school and I know of the pressures put upon scholarship children from poor families to get them away from school before the compulsory leaving age, in order to enable the family to keep on living. They were regarded as an earning unit, earning nothing at school.
    There was no question of these children having an income of £115 a year. Think of what capital is involved when a child has such an income. I deny absolutely that there is a single parent alive who, in the circumstances postulated by the right hon. Gentleman, would dream of taking his child away from school. This has nothing to do with education, it has to do with the fact that the right hon. Gentleman and the Tory Party dislike this artificial method of tax avoidance being brought to an end, and this is the difference between us.
    Mr. Richard Waiwright: Before the Chief Secretary sits down—
    Hon. Members: He has sat down.
    Mr. Speaker: Order. We have too many Speakers at the moment.
    Mr. Wainwright: Will the Chief Secretary deal with the separate argument that where the child remains at school, accepting for the time being the point that he has made, there is a distinct unfairness in the treatment of the child still at school, within the family? There is this unfairness, quite apart from the deprivation of education. There is an obvious unfairness between the treatment of the child working hard for A levels and a child who is gainfully employed.
    Mr. Diamond: I did not attempt to deal with all the points raised, because we are dealing here with a matter of fundamental principle, and most of the points raised were not related closely to the Amendment. I did not deal with the point raised by the hon. Member for Birmingham, Edgbaston (Mrs. Knight), who asked me about the Latey Report and its effect. This legislation will not come into effect for one year, so that inquiries can be made. It is possible that in the course of a year circumstances will alter and there will be new education provisions. This is fully recognised, and the hon. Lady will find that the matter was fully debated in Committee.
    As to the point raised by the hon. Member for Colne Valley (Mr. Richard Wainwright) about the unfairness between the boy working hard for A levels and the apprentice, working hard, I must return to the principle to answer this. The principle here is that the family spending unit becomes two units when one of the children is, as it were, on his own, earning income. That is the only definition that fits the principle. [Interruption.] There is every good reason for taking the Bill in Standing Committee upstairs where we have sensible, sober discussion.
    Mr. Speaker: Order. I want the right hon. Gentleman to keep within the bounds of order.
    Mr. Diamond: As the hon. Gentleman who was most assiduous in his attention in Committee will, of course, know, that is the reason why we distinguish between earned income and unearned income for this purpose.
    Mr. Fletcher-Cooke: In this Amendment we are dealing with children from 15 to 21, if men and women of 20 can be described as children. The advantage of this Amendment is that almost all the difficulties in the actual operation of the Clause, irrespective of its merits, would fall away like scales if it were accepted. All the problems about when somebody is working full time, all the problems of when they are living away and not in control—all of those disappear if the age is reduced from 21 to the minimum school leaving age.
    Very briefly, because we have been through this matter many times, I want

    1641
    to give two examples of the enormous anomalies which will result, and the unfairness which will result, if the age of the children is to go up to 21. The first one is in the case of the poor child of rich parents, and the second is in the case of the rich child of poor parents. They are not, I think, extreme cases, but they are unusual.
    Let us take, first, the poor child of rich parents—say, of a mill owner, who wants his son to go into the mill, as he did, when he is 16 or 17. That is not an uncommon situation. The father is rich, and the son does not want to. The son is, say, a musician, or something of that sort, and wants to pursue his studies, and has got a place, say, at the Royal College of Music, and wishes to see if he can make out there. The father dislikes this and says, "I cannot stop you, but you will not get a penny from me, if you will not go in the mill." [An HON. MEMBER:"Must be a Tory."] Maybe a Tory, maybe a Liberal, maybe Labour, but, at any rate, that is the position, and the son looks round and manages to get, say, an old aunt or a well-wisher to pay him £10 a week so that he can make out as a student and take up his place in further education—as I suggest, at the Royal College of Music.
    That is unearned income and, therefore, will be aggregated with the rich father's income, and whereas today the son could pursue those studies, because he could probably live on £10 a week, it will be reduced to about £3 if his father is rich enough, and so the son will have to go sadly back to the mill, where the irony is so great, because the irony is that it will then be earned income, and although he is living at home in luxury, but genuinely in the common spending unit, as the Chief Secretary would say, his income will not be aggregated with that of the mill owner. What is the fairness in that? I hope that is not a situation of which the Chief Secretary is proud.
    The second example is almost worse. It concerns parents earning, say, £1,500 or £2,000 a year when their son is left a lot of money directly by a remote relation in Australia—[Interruption.] I see nothing wrong with that example. It has happened more than once, but not to me—[Interruption.]
    Mr. Speaker: Order. With respect, the temptation in this debate has been to debate the Clause. The hon. and learned Member will not be out of order if he comes to the Amendment.
    Mr. Fletcher-Cooke: The Amendment deals with children from 15 to 21. My contention was that if the Amendment is accepted all these anomalies and difficulties will fall away like scales. That was the purpose of these examples.
    The second example is where a boy of 18 or 19 is left directly an unexpected small fortune and he decides to leave the home and goes up to London to live it up with wine, women and song.— [HON. MEMBERS: "Shame."] I agree that is very bad. But what happens then—[Laughter.]
    Mr. Speaker: Order. May I remind the hon. and learned Member that the Amendment we are discussing speaks about infants who have not passed the upper limit of the compulsory school-leaving age.
    Mr. Fletcher-Cooke: The example that I have taken is of someone above the school-leaving age, though below the age prescribed in the Clause.
    What happens immediately is that the father is irretrievably ruined, because the income of the son, over which he has no control, is aggregated with the father's and probably the tax that he has to pay is greater than his whole income for the year. It is no good the Chief Secretary saying, as I am sure he would, that he can get it back from the son in due course, because it will have gone—dissipated by his profligate behaviour.
    I could give more examples of the anomalies, injustices and general bad management that will result from the Clause as it stands. If the Amendment is accepted, the Clause will at least be workable. It will be understandable, even if it is wrong, and at least it will not be an offence on the Statute Book. For this reason, with the House in its full mood, as it is, and with the debate having gone on not merely tonight, but over the last four weeks, when I think we may safely say that if he have not won in the Lobbies we have won in the arguments, I suggest that we come to a decision by recording, once again, our fundamental opposition to any idea of

    1643
    a common spending unit among people of 18, 19 and 20, most of whom probably left home years ago.
    Lieut.-Colonel Sir Walter Bromley-Davenport: Little did I think as I wended my way to the Chamber that I would be fortunate enough to catch your eye, Mr. Speaker. I had not intended to intervene in the debate. I have not, I regret to say, attended the debate for the last hour and a half. Therefore, I have missed all the tripe that has been talked about.
    Let me put this whole matter into a nutshell. [Laughter.] This is a hate tax. The object is twofold, and hon. Gentlemen opposite have had letters from their constituents saying what I am going to say to them. The first object of the exercise is to destroy the fee-paying schools. The next is to prevent those who can afford to give their children a better education from doing so.
    Mr. Speaker: Order. The third object is to keep in order in the debate.
    Sir W. Bromley-Davenport: I have prepared a long speech which now appears to be rather out of order. It is with regret that I shall resume my seat.
    Mr. Iain Macleod: I hope that the House will forgive me if I say that I regard this as a matter of the utmost seriousness. It is appalling that as we have gone through the Clause and the Schedule hour after hour the only trifling concession that we have wrung from the Chief Secretary is in relation to thalidomide children. What right hon. and hon. Gentlemen opposite can find funny in this passes my comprehension. It is disgraceful. We have heard from the Chief Secretary and from the hon. Member for Motherwell (Mr. Lawson) the authentic voice of Stone Age Socialism. It comforts me at least that soon doctrines of this sort will be rejected by the people, just as we reject the Clause.
    Question put, That the Amendment be made: —
    The House divided: Ayes 138, Noes 192.

    Division No. 266.]

    AYES

    [10.58 p.m.

    Alison, Michael (Barkston Ash)

    Gibson-Watt, David

    Miscampbell, Norman

    Allason, James (Hemel Hempstead)

    Gilmour, Ian (Norfolk. C.)

    Monro, Hector

    Astor, John

    Glover, Sir Douglas

    Montgomery, Fergus

    Awdry, Daniel

    Godber, Rt. Hn. J. B.

    More, Jasper

    Baker, Kenneth (Acton)

    Goodhart, Philip

    Mott-Radclyffe, Sir Charles

    Baker, W. H. K. (Banff)

    Goodhew, Victor

    Murton, Oscar

    Beamish, Col. Sir Tufton

    Cower, Raymond

    Nabarro, Sir Gerald

    Bennett, Dr. Reginald (Gos. & Fhm)

    Gurden, Harold

    Nott, John

    Biggs-Davison, John

    Hall, John (Wycombe)

    Onslow, Cranley

    Black, Sir Cyril

    Harrison, Col. Sir Harwood (Eye)

    Osborn, John (Hallam)

    Blaker, Peter

    Harvie Anderson, Miss

    Page, Graham (Crosby)

    Boardman, Tom (Leicester, S.W.)

    Hawkins, Paul

    Page, John (Harrow, W.)

    Bossom, Sir Clive

    Heald, Rt. Hn. Sir Lionel

    Pardoe, John

    Braine, Bernard

    Higgins, Terence L.

    Peel, John

    Brewis, John

    Hill, J. E. B.

    Percival, Ian

    Bromley-Davenport, Lt.-Col. Sir Waiter

    Holland, Philip

    Pike, Miss Mervyn

    Brown, Sir Edward (Bath)

    Hooson, Emlyn

    Pounder, Rafton

    Bruce-Gardyne, J.

    Hordern, Peter

    Powell, Rt. Hn. J. Enoch

    Bryan, Paul

    Hornby, Richard

    Pym, Francis

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

    Hunt, John

    Ramsden, Rt. Hn. James

    Buck, Antony (Colchester)

    Iremonger, T. L.

    Rees-Davies, W. R.

    Campbell, B. (Oldham, W.)

    Jenkin, Patrick (Woodford)

    Rhys Williams, Sir Brandon

    Carr, Rt. Hn. Robert

    Kershaw, Anthony

    Rossi, Hugh (Hornsey)

    Chichester-Clark, R.

    Kirk, Peter

    Russell, Sir Ronald

    Clegg, Walter

    Kitson, Timothy

    Scott, Nicholas

    Cooke, Robert

    Knight, Mrs. Jill

    Scott-Hopkins, James

    Crowder, F. P.

    Lane, David

    Sharpies, Richard

    Cunningham, Sir Knox

    Langford-Holt, Sir John

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

    Dance, James

    Lewis, Kenneth (Rutland)

    Silvester, Frederick

    Davidson, James (Aberdeenshire, W.)

    Lubbock, Eric

    Sinclair, Sir George

    d'Avigdor-Goldsmid, Sir Henry

    MacArthur, Ian

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

    Dean, Paul (Somerset. N.)

    Mackenzie, Alasdair (Ross&Crom'ty)

    Smith, John (London & W'minster)

    Dodds-Parker, Douglas

    Maclean, Sir Fitzroy

    Stainton, Keith

    Eden, Sir John

    Macleod, Rt. Hn. lain

    Summers, Sir Spencer

    Emery, Peter

    Maddan, Martin

    Taylor, Frank (Moss Side)

    Errington, Sir Eric

    Maginnis, John E.

    Temple, John M.

    Eyre, Reginald

    Maude, Angus

    Thatcher, Mrs. Margaret

    Farr, John

    Maxwell-Hyslop, R. J.

    Thorpe, Rt. Hn. Jeremy

    Fletcher-Cooke, Charles

    Mills, Peter (Torrington)

    Turton, Rt. Hn. R. H.

    Fortescue, Tim

    Mills, Stratton, (Belfast, N.)

    van Straubenzee, W. R.

    Vaughan-Morgan, Rt. Hn. Sir John

    Wells, John (Maidstone)

    Wood, Rt. Hn. Richard

    Waddington, D.

    Whitelaw, Rt. Hn. William

    Woodnutt, Mark

    Wainwright, Richard (Colne Valley)

    Williams, Donald (Dudley)

    Wylie, N. R.

    Walker, Peter (Worcester)

    Wills, Sir Gerald (Bridgwater)

    Younger, Hn. George

    Walker-Smith, Rt. Hn. Sir Derek

    Wilson, Geoffrey (Truro)

    Ward, Dame Irene

    Winstanley, Dr. M. P.

    TELLERS FOR THE AYES:

    Weatherill, Bernard

    Wolrige-Gordon, Patrick

    Mr. R. W. Elliott and

    Mr. Anthony Grant

    NOES

    Albu, Austen

    Gardner, Tony

    Morris, Charles R. (Openshaw)

    Alldritt, Walter

    Ginsburg, David

    Moyle, Roland

    Allen, Scholefield

    Gourlay, Harry

    Neal, Harold

    Anderson, Donald

    Gray, Dr. Hugh (Yarmouth)

    Newens, Stan

    Archer, Peter

    Greenwood, Rt. Hn. Anthony

    Noel-Baker, Rt. Hn. Philip (Derby, S.)

    Armstrong, Ernest

    Gregory, Arnold

    Oakes, Gordon

    Atkins, Ronald (Preston, N.)

    Griffiths, Eddie (Brightside)

    Ogden, Eric

    Atkinson, Norman (Tottenham)

    Griffiths, Will (Exchange)

    O'Malley, Brian

    Barnett, Joel

    Hamilton, James (Bothwell)

    Orme, Stanley

    Baxter, William

    Hamling, William

    Oswald, Thomas

    Beaney, Alan

    Hannan, William

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

    Bence. Cyril

    Harper, Joseph

    Page, Derek (King's Lynn)

    Benn, Rt. Hn. Anthony Wedgwood

    Harrison, Walter (Wakefield)

    Palmer, Arthur

    Bennett, James (G'gow, Bridgeton)

    Haseldine, Norman

    Pannell, Rt. Hn. Charles

    Bishop, E. S.

    Heffer, Eric S.

    Parker, John (Dagenham)

    Blackburn, F.

    Henig, Stanley

    Parkyn, Brian (Bedford)

    Blenkinsop, Arthur

    Herbison, Rt. Hn. Margaret

    Pavitt, Laurence

    Boardman, H. (Leigh)

    Hooley, Frank

    Pearson, Arthur (Pontypridd)

    Booth, Albert

    Horner, John

    Peart, Rt. Hn. Fred

    Bottomley. Rt. Hn. Arthur

    Houghton, Rt. Hn. Douglas

    Pentland, Norman

    Braddock, Mrs. E. M.

    Howie, W.

    Perry, Ernest G. (Battersea, S.)

    Bradley, Tom

    Hoy, James

    Perry, George H. (Nottingham, S.)

    Bray, Dr. Jeremy

    Huckfield, Leslie

    Prentice, Rt. Hn. R. E.

    Brooks, Edwin

    Hughes, Roy (Newport)

    Price, Thomas (Westhoughton)

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

    Hunter, Adam

    Price, William (Rugby)

    Buchan, Norman

    Irvine, Sir Arthur (Edge Hill)

    Probert, Arthur

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

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

    Rees, Merlyn

    Callaghan, Rt. Hn. James

    Jenkins, Rt. Hn. Roy (Stechford)

    Richard, Ivor

    Cant, R. B.

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

    Robertson, John (Paisley)

    Carmichael, Neil

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

    Rodgers, William (Stockton)

    Coe, Denis

    Jones, J. Idwal (Wrexham)

    Rose, Paul

    Coleman, Donald

    Kelley, Richard

    Rowlands, E. (Cardiff, N.)

    Crawshaw, Richard

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

    Sheldon, Robert

    Cullen, Mrs. Alice

    Kerr, Russell (Feltham)

    Shore, Rt. Hn. Peter (Stepney)

    Dalyell, Tarn

    Lawson, George

    Short, Mrs. Renée (Whampton, N. E.)

    Davidson, Arthur (Accrington)

    Lestor, Miss Joan

    Silkin, Rt. Hn. John (Deptford)

    Davies, Ednyfed Hudson (Conway)

    Lever, Harold (Cheetham)

    Silkin, Hn. S. C. (Dulwich)

    Davies, Harold (Leek)

    Lewis, Arthur (W. Ham, N.)

    Silverman, Julius

    Davies, Ifor (Cower)

    Lewis, Ron (Carlisle)

    Small, William

    Dell, Edmund

    Lomas, Kenneth

    Snow, Julian

    Dempsey, James

    Loughlin, Charles

    Spriggs, Leslie

    Dewar, Donald

    Lyons, Edward (Bradford, E.)

    Steele, Thomas (Dunbartonshire, W.)

    Diamond, Rt. Hn. John

    Mabon, Dr. J. Dickson

    Swingler, Stephen

    Dickens, James

    McCann, John

    Taverne, Dick

    Doig, Peter

    MacColl, James

    Thomson, Rt. Hn. George

    Dunn, James A.

    Macdonald, A. H.

    Tinn, James

    Dunnett, Jack

    McGuire, Michael

    Urwin, T. W.

    Dunwoody, Mrs. Gwyneth (Exeter)

    Mackenzie, Cregor (Rutherglen)

    Varley, Eric G.

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

    Mackintosh, John P.

    Walker, Harold (Doncaster)

    Edwards, William (Merioneth)

    Maclennan, Robert

    Wallace, George

    Ellis, John

    McNamara, J. Kevin

    Watkins, David (Consett)

    English, Michael

    Mahon, Peter (Preston, S.)

    Watkins, Tudor (Brecon & Radnor)

    Ensor, David

    Mahon, Simon (Bootle)

    Wellbeloved, James

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

    Mallalieu, E. L. (Brigg)

    Whitaker, Ben

    Faulds, Andrew

    Manuel, Archie

    Whitlock, William

    Fernyhough, E.

    Marks, Kenneth

    Wilkins, W. A.

    Fletcher, Raymond (Ilkeston)

    Marquand, David

    Williams, Alan Lee (Hornchurch)

    Fletcher, Ted (Darlington)

    Mellish, Rt. Hn. Robert

    Williams, Mrs. Shirley (Hitchin)

    Foley, Maurice

    Mendelson, J. J.

    Williams, W. T. (Warrington)

    Ford, Ben

    Millan, Bruce

    Winnick, David

    Forrester, John

    Miller, Dr. M. S.

    Woof, Robert

    Fowler, Gerry

    Milne, Edward (Blyth)

    Yates, Victor

    Fraser, John (Norwood)

    Molloy, William

    Freeson, Reginald

    Moonman, Eric

    TELLERS FOR THE NOES:

    Galpern, Sir Myer

    Morgan, Elystan (Cardiganshire)

    Mr. Alan Fitch and

    Mr. Neil McBride.

    Amendments made: No. 154, in page 11, leave out lines 1 to 9 and insert:
    (2) Subjection (1) above does not apply to—

    (a) earned income, or

    1646

    (b) income derived from any sum, or from assets representing any sum, paid by way of, or in satisfaction of a claim for, damages in respect of personal injury to the infant (including any disease, and any impairment of his or her physical or mental condition),

    1647
    but, subject to those exclusions and to subsection (2A) below, the said subsection applies to all such amounts as would fall to be included in computing the infant's total income apart therefrom, and so applies notwithstanding anything in any other enactment (including, except so far as the contrary is expressly provided, any enactment passed after this Act) requiring any amount not to be treated as income of anyone other than the infant.

    (2A) Section 397(3) of the Income Tax Act 1952 (settlements on children: income not exceeding £5 not to be treated as income of settlor by virtue of section 397(1) of that Act) shall cease to have effect, but neither the said section 397(1) nor subsection (1) above shall have effect in relation to an infant for any year of assessment for which his aggregate income, so far as it would fall within one or other of those provisions but for this exception, does not exceed £5.
    No. 155, in page 11, leave out lines 18 to 20.
    No. 156, in line 28, leave out from 'except' to end of line and insert:
    'so far as it affects the operation of section 397(1) of the Income Tax Act 1952'.—[Mr. Diamond.]

  Schedule 8
  AGGREGATION OF INFANTS' INVESTMENT, ETC., INCOME
  Mr. Diamond: I beg to move Amendment No. 157, in page 62, line 9, leave out from beginning to 'made'.
  Mr. Deputy-Speaker (Sir Eric Fletcher): I suggest that we take with this Amendment, Amendment Nos. 158, 159, 160, 161, 162, and 163.
  Mr. Diamond: The first four of these Amendments are relieving Amendments dealing with paragraph 5 of this Schedule. There is at the moment a provision that annual interest and life assurance premiums can be made by a child and set off against the child's income. It is intended that it should be allowable where a child's income is aggregated with the parents' income. That is not absolutely clear in the Bill and this provision makes it clear.
  The remaining three Amendments are purely drafting. As was stated by the hon. Member for the Cities of London and Westminster (Mr. John Smith) in standing Committee, it is necessary to make absolutely clear what is the position with regard to the extra tax which a parent may have to find where there is trust income. It is necessary to make
  1648
  it clear that he is not required to find the tax twice over.
  Amendment agreed to.
  Further Amendments made: No. 158, in page 62, line 12, after 'computing', insert ' for that period.'
  No. 159, in page 62, line 14, after ' payments ', insert ' in that period'.
  No. 160, in page 62, line 20 leave out ' and in respect of.'—[Mr. Diamond.]
  Amendment proposed: No. 161, in page 62, line 34, leave out from ' tax' to 'if' in line 36 and insert:
  'chargeable on and payable by him or her for the year exceeds that which would have been so chargeable and payable'—[Mr. Diamond.]
  Mr. Deputy Speaker: I think that it would be convenient if we were to take with this Amendment, Amendments Nos. 162 and 163.
  Mr. John Smith: I would like, very briefly, to say something on Amendment No. 163. This relates to the recovery of children's tax by parents from trustees, and there are two points here. I think that it must be cleared up whether the child's income is to be treated as the top slice of the parents' income or as an average of the parents' total income. This is obviously a very important point, and it will arise immediately this enactment comes into force.
  The second point is that we still do not know how foreign trustees are to be dealt with. Will they accept the certificate mentioned in this part of the Schedule, and how are parents to enforce this against foreign trustees? How does a parent recover tax from foreign trustees? As the Chief Secretary knows, I have actual cases in mind. Indeed, it may well be that the foreign trustee has an actual duty not to pay this money to the parent. It seems to me that there is a difficulty here and I would be grateful if it could be cleared up.
  Mr. Diamond: I am not quite clear what difficulty the hon. Gentleman still has in mind. If there is a foreign trustee who has remitted income to a resident child, the first question is whether that remittance is taxable income or not. One would have to find out all the circumstances, such as whether it is at present

  1649
  income of the child taxable in this country or not. But generally, the Revenue would not propose to pursue this matter with any unnecessary vigour.
  The parent would be required to make a return of the child's income, and the income would be aggregated with the parent's. If the income is known then it is aggregated, and if the tax is payable, the parent has a right of recovery as against the trustee. It cannot be the case that the trustee is unable to provide the tax. It is part of the income which the trustee would pay to the children.
  It may be that to that extent in future years the income of the child would be reduced, but there would be no particular difficulty there. This is a normal circumstance so far as trusts are concerned; when income is diverted for one purpose it is not available for another purpose.
  If the hon. Gentleman is anxious about the attitude of the Revenue, I repeat that it will not pursue this with undue vigour, but will try to carry out the law, as Parliament places a duty upon it to do.
  Amendment agreed to.
  Further Amendments made: No. 162, in page 62, leave out lines 37 to 43 and insert:
  Provided that, so far as the excess is attributable to trust income which has not been distributed, the right conferred by this paragraph shall be exercisable against that income instead of against the infant.
  No. 163, in line 46, leave out 'sub-paragraph (2) above' and insert 'this paragraph from trustees'.—[Mr. Diamond.]
  Mr. Diamond: I beg to move Amendment No. 164, in page 63, line 7, at end insert:
  Loss relief
  7A.—(1) A claim for relief under section 341 of the Income Tax Act 1952 (set off of trade etc. losses against general income) may require that the relief be given without any reference to income treated by virtue of this Schedule as income of the person sustaining the loss or of that person's spouse.
  (2) Where income so treated is not excluded by virtue of sub-paragraph (1) above, it shall be treated for the purposes of section 15 (1) of the Finance Act 1953 (relief to be given by treating loss as reducing claimant's income first, and then income of claimant's spouse) as distinct from that of the claimant,
  1650
  and as if referred to therein after that of the spouse.
  This Amendment meets a point which was raised with the Revenue by the Accountants Joint Parliamentary Committee and it prescribes the order in which trading losses are to be allowed against income where the option under sub-paragraph (1) of the Amendment is not exercised.
  At present, as the House is aware, there is an option which the taxpayer has that where a trading loss has been incurred it can be set against the taxpayer's income only and not be set against the spouse's income if the taxpayer does not wish that.
  In that case, any unsatisfied loss can be carried forward. It was requested that a similar option should be given with regard to aggregated income, and this subsection provides for that. It provides that the loss is to be set against the child's income only after it has been used against the claimaint's income first.
  Amendment agreed to.
  11.15 p.m.
  Mr. Diamond: I beg to move, That further consideration of the Bill, as amended, be adjourned.
  We have completed what is on the Amendment Paper concerning Clause 15 and Schedule 8. I think that perhaps this would be a convenient time to adjourn our consideration of the Bill.
  Mr. Patrick Jenkin rose—
  Mr. Deputy Speaker: I am obliged to put the Question immediately without debate.
  Mr. Jenkin: I believe that, under the Standing Orders, one Opposition spokesman is allowed to make a brief reply.
  Mr. Deputy Speaker: No. If the hon. Gentleman rose to a point of order, the answer to it is that I am obliged by the Resolutions of the House to put the Motion without debate.
  Mr. Jenkin: Further to that point of of order. We are in some difficulty. As the Chief Secretary knows, we on this side of the House indicated that we were prepared to go on and deal with the wholly uncontentious matters dealt with in Clause 16 and Schedule 9 because we are on the last lap of the Bill before the

  1651
  Guillotine. This is the second time we have offered to do this late at night or in the small hours of the morning.
  Mr. Deputy Speaker: I appreciate the hon. Gentleman's difficulty. I am also in a difficulty that I am governed by the Resolutions of the House which require me to put the Motion forthwith without debate. Therefore, I have no alternative but to put the Motion forthwith.
  Question put and agreed to.
  Bill, as amended (in the Standing Committee), to be further considered Tomorrow.

  ANIMAL FEEDINGSTUFFS, NORTHERN IRELAND (COST)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Harper.]
  11.17 p.m.
  Mr. Henry Clark: The subject which I wish to raise is not new. The Minister is well aware that most of the costs of agricultural production are higher in Northern Ireland that in other parts of the United Kingdom and that farmers' incomes in Northern Ireland are correspondingly lower. Some of the high costs which we experience in Northern Ireland are the result of our geographical position and climate, and we cannot expect the Minister to do much about that. But the high prices we are paying for animal feedingstuffs result, at least in part, from decisions taken by the Ministry and changes in the pattern of production and marketing. These the Government can adjust for the benefit of the whole of the United Kingdom and the survival of farmers in Northern Ireland.
  Northern Ireland is a country of small farms, as I have frequently told the Minister. There are 40,000 small farms. Climatically, we are a country of grass rather than grain production. To bring the incomes of farmers in Northern Ireland even on to an approximate level with those which industrial workers enjoy, they have to concentrate very much on livestock production. Backed by our Minister of Agriculture in Northern Ireland and by the enlightened policy of our marketing boards, the production of
  1652
  bacon, beef, milk and eggs has been built up to a level of efficiency comparable with the very best in the world. One can say that, particularly in bacon, our best units are probably larger and more efficient than their equivalent in Denmark and Scotland, or anywhere else.
  Our beef and milk are largely produced from grass, but we must depend on imported grain for pigs and poultry. Brought-in feedingstuffs account for about half the total farm purchases in Northern Ireland. Today, we grow about 200,000 tons of our own barley, import another 150,000 tons and buy in 200,000 tons of imported maize for dollars. We also have to import feeding wheat and a considerable quantity of the wheat offals needed to make up feed rations.
  Grain production today in Northern Ireland is approaching a maximum. It cannot be extended unless the price paid justifies ploughing up even more marginal land than we are using at present. Inevitably, therefore, we in Northern Ireland are more dependent on livestock production that the average farmer in the rest of the United Kingdom.
  Bacon pig production alone produces 25 per cent. of farm revenue, and there are 22,000 bacon producing units among our 40,000 and more farms in Northern Ireland. The 1950s and early 1960s were the period of expansion and consolidation of our pig and poultry industry. In that period, when Great Britain was still importing barley, we could compete on an almost level footing with producers on this side of the Irish Sea. The barley which we bought on the world market cost no more than that used to make up rations in England and Scotland.
  But when, after 1962, Great Britain first became self-sufficient in barley and then in surplus the cost factors started to turn against us. Today, the price of barley to the English and Scottish food compounder is £3 to £4 a ton lower than it is to the compounder in Northern Ireland. Today's price of barley quoted to me by telephone this morning was £19-£21 per ton in Great Britain, £19 in the cheapest markets and £21 in the dearest. Ex-silo at Belfast harbour the price was £24 10s.
  This price differential must be reflected in the cost of pig rations. If one accepts

  1653
  an overall average of three bacon pigs per ton of food, it is costing even the most efficient producers in Ulster very nearly £1 extra to fatten each pig. This cuts the gross profit margin on pig production by about half.
  One of the best farmers I know told me on Monday that he had just completed the costing of fattening his last batch of weaners from 45 lbs. to bacon weight. He reckoned that he had made at most 7s. a pig. Another farmer told me that on Small Farmers' Scheme costings he made 33s. a pig in 1966, but that this had fallen to 24s. in 1967. He doubts whether he will break 10s. on the same calculations in the current year.
  For poultry, the necessity of importing feeding wheat and wheat offals from Britain raises the cost of feedingstuffs by £2-£3 a ton. Prices quoted today for wheat are £20 to £21 a ton in Great Britain and £23 to £24 in Belfast. The differential adds as much as 1½d. to the cost of producing a dozen eggs.
  Two factors have tended to increase the differential. During recent years the minimum import prices for grain, while not have an immediately obvious effect on the costing, have prevented the Ulster millers from taking advantage of any short-term fall in world grain prices. When the Conservative Government introduced this scheme they said that they would always keep in mind the problem of feedingstuff costs in Northern Ireland. I hope that the Minister will ante up on that. More recently, devaluation has directly raised the price of our imported feedingstuffs, while it has not been fully reflected in the cost of home-grown barley in England. It must be emphasised that the flexible feed formula, actually damages us in Northern Ireland, because it is based on a balanced sample from all over the United Kingdom, and reflects the low price of barley in England rather than the high price in Belfast.
  What I have been saying is not simply "hard cheese" for the Ulster farmer. It is economic nonsense for the United Kingdom, in view of its present balance of payments struggle. Bacon is one area where there is wide scope for replacing imports. So far, in the United Kingdom we have failed to come up to our 36·9 per cent. quota of bacon consumption. We have a shortfall of 3·2 per cent. which
  1654
  is being made up by additional imports. Though bacon production is increasing in England, it is increasing only very slowly in Northern Ireland, and the Northern Ireland percentage of the United Kingdom market has fallen from a steady 14 per cent. between 1962 and 1966 to a bare 11 per cent. now.
  Part of the 2,000 tons of maize we buy abroad for dollars, even more nonsensically, could be replaced by English barley if the price differential could be overcome.
  The Minister may complacently tell me that the Ulster pig herd is at last on the increase. The March figures are higher than they have been for some time, although the true reason for this is not the profitability of pigs but the complete lack of profitability of eggs, and mixed farmers looking anywhere for a profit have moved back into pig production. Unfortunately, they will find little enough profit in pigs. Many of them may decide to realise their capital, let their land for grazing and increase the present quota of milk, which will be a considerable embarrassment to the Ministry at the end of this year.
  The Minister, I know, recognises the problem, and I ask him tonight to investigate it very carefully, and at once. I ask when he has completed his investigation that he will take action which will put a decent yield into pig and poultry production in Northern Ireland, and I ask him to take action which will assist the solution of our balance of payments problem and allow agriculture to play the part in national recovery that all British agriculture is anxious to play.
  11.27 p.m.
  Lord Hamilton: I congratulate my hon. Friend the Member for Antrim, North (Mr. Henry Clark) on so cogently initiating this extremely important debate. During the last financial year the Northern Ireland agricultural industry has been faced with an alarming price escalation in agricultural costs, resulting in a serious and obvious effect on farm income. Apart from increases in Bank Rate, wages, electricity and farm machinery, the heaviest increase in the cost is due to the fact that we have no home-grown barley market, resulting in the necessity to import at least 50 per

  1655
  cent. of all feedingstuffs consumed in Northern Ireland.
  Obviously, devaluation has aggravated this situation yet further, for on 13th March the then Minister of Agriculture, in reply to a Question tabled my myself, said:
  "Assuming a price increase of one-sixth, the landed cost of animal feed imported into Northern Ireland would be increased by about £4¼ million …".—[OFFICIAL REPORT, 13th March, 1968; Vol. 760, c. 321.]
  In fact, the Northern Ireland farmer has to pay between £3 and £3 10s. per ton more for compounds than his counterpart in Yorkshire.
  Unfortunately, the disparity of costs is aggravated further by the fact that the majority of our production has to be imported to the main consumption area, that is to say England. Approximately £89 million is exported per annum. So, once again, the Northern Ireland farmer is forced to bear the cost of transporting the processed product across the Irish Sea. For, unlike other industries, agriculture is unable to recoup this additional burden through higher prices.
  The total cost price differential is approximately £7·9 million per annum, or a parity income ratio of only 78 per cent. This is, of course, an alarming and extremely serious situation, which is constantly deteriorating through inflation.
  I ask the Minister to give an assurance that the remoteness grant will be reviewed without delay, since the figures quoted during the debate have proved, beyond doubt, the urgent need for reassessment of this extremely important grant.
  I also ask the Minister to give the Government's acknowledgment of the seriousness of the current situation, for it must be appreciated that the industry, through the present lack of incentive, cannot be expected to continue expansion of production, thus saving the nation's import bill, unless this differentiation in farm income is drastically reduced.
  Furthermore, it should be remembered that, to encourage agriculture to expand and prosper in remote areas, the incentive of additional grants for agriculture are just as important as those for other industries. Again, a policy like minimum import prices, while benefiting the majority of the United Kingdom, is in no
  1656
  way beneficial to Northern Ireland. I hope that the Minister will investigate this matter.
  Recently, a research economist predicted that, due to devaluation and the resultant rise in the price of imported feedingstuffs, the pig breeding herd would decline by one-sixth. That is a most serious forecast which will defeat the Government's expansion plans unless immediate action is taken.
  Finally, it must be recognised that Northern Ireland is a country of small farmers and, therefore, the small farmer is particularly dependent on imported feedingstuffs, since, owing to the small size of farm holdings, he is forced into intensive production of either eggs or pigs, both of which require a high concentration of imported feeding stuffs, resulting in his having to pay £1 per pig and l½d. per dozen eggs more on feed than his counterpart in England.
  11.31 p.m.
  The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. James Hoy): Let me begin by expressing my thanks to the hon. Member for Antrim, North (Mr. Henry Clark) for initiating this debate and to the hon. Member for Fermanagh and South Tyrone (Lord Hamilton), who supported him.
  The Government have always recognised that farmers in Northern Ireland face problems which may not be present in the same degree in other areas of the United Kingdom, and it is for that reason that I express my gratitude to the hon. Gentlemen for having drawn attention to this issue tonight.
  The hon. Member for Antrim, North, and some of his colleagues met my right hon. Friend in April to discuss the general question of the difficulties of Northern Ireland's farmers. They made a number of points and left some figures bearing on them. I believe that I am right in saying that the hon. Gentleman regarded it as a very useful meeting.
  My right hon. Friend and the Minister of Agriculture for Northern Ireland had already agreed together that their two Departments should look jointly into the question of farm costs in the two countries.

  1657
  The House will appreciate that it is not sufficient for an examination of this nature to study merely one particular cost item, since differences in other farm costs such as fertilisers and labour may affect the overall balance of advantage between different parts of the United Kingdom.
  The examination which was set in train is not yet complete, and any action by the Government, naturally, must be based upon its results. However, I will give the House a preliminary indication of what it is likely to show, and I will also set out the main factors which must be taken into account in considering the problems of Northern Ireland agriculture. I hope that this will help to put the whole matter in perspective, without disguising the genuine nature of the problems in Northern Ireland.
  It has been pointed out already that, on average, farms in Northern Ireland are considerably smaller than in the rest of the United Kingdom. Natural conditions tend to be difficult, and market prices are usually lower. For all these reasons, the average level of farm incomes is lower than in the United Kingdom as a whole. Nevertheless, the total picture is by no means wholly black.
  Until four years ago, the trend in net farm incomes broadly followed the trend for the United Kingdom as a whole. At the same time, the special assistance grant helped and still helps to offset the effect of lower market prices. At the 1966 Annual Review, the Government raised the grant to its present level of £1¾ million a year. I think that it is agreed that that was a very helpful step in the right direction, and I note what both hon. Gentlemen said about it again tonight.
  Furthermore, a number of the Government's grants designed to help less favoured sectors of the industry have been of particular value in Northern Ireland. The Small Farmers' Scheme, for example, has been widely used, for which we are grateful, and the Farm Improvement Scheme has had an excellent response.
  The grants to encourage farm amalgamation and thereby create more economically viable holdings should be of special interest in view of Northern Ireland's farm structure. But, as hon. Gentlemen know, this has to be done voluntarily.
  1658
  Over the last four years, however, the trend in farm incomes in Northern Ireland has been lagging compared with farm incomes in Great Britain as a whole, and other remote areas experienced a fairly similar trend in incomes. To some extent this may be only temporary.
  There was, as the House will remember, a general decline in pig production from 1965 onwards, and there were difficulties on the livestock side generally. As the hon. Gentleman has said, and I agree, since Northern Ireland agriculture is based largely on livestock farming, the effects were naturally more marked in the overall results for Northern Ireland than in those for Great Britain.
  We set out to deal with these problems in the livestock sector at Annual Reviews which have taken place since. As the increases in guaranteed prices for livestock take effect, we would hope to see an improvement in farm incomes. Nevertheless, the examination that we are now carrying out appears to substantiate the view that in the last few years trends in farm costs have been moving to the relative disadvantage of Northern Ireland farms. There certainly appears to have been a widening of the differential between Northern Ireland and average Great Britain feed prices.
  The main reason for this is that the increase in home production has made available to farmers in Great Britain with ready access to it a supply of feed grain at prices below those ruling on the world market, where prices have tended to be kept up by the absence of the surpluses which had pressed on the market before 1962. This is exactly what the hon. Member for Antrim, North was saying. Northern Ireland farmers have, therefore, had to import feed grains at the relatively higher world prices because of the cost of transporting grain from Great Britain to Northern Ireland.
  I should add, while explaining the difference in feed costs, that, contrary to some things that have been said, devaluation has not been one of the causes, since, although it has resulted in some increase in the cost of cereal imports, the effect has been no greater in Northern Ireland than in Great Britain. The minimum import prices for cereals likewise have not affected the difference in feed costs. Naturally, in future years they might influence the prices of imported feed grains,

  1659
  but their object is to do no more than set a reasonable floor in our market and not to make imported feed expensive. I give the hon. Gentleman that assurance.
  To establish what the facts are must be the first need. The hon. Member and his noble Friend have given us information which we have found very useful in this connection. We have wasted no time in starting our examination. As I have already mentioned, some broad conclusions are already emerging.
  We are grateful to the hon. Member for raising the issue tonight, but I cannot, however, say whether, and if so what, action is called for. There are a number of considerations that have a bearing on this quite apart from the structural and other rather special features of Northern Ireland's agriculture. In Northern Ireland, there are social and regional problems, not least the problem of employment, and all aspects need to be taken into account. In my own country, we have similar problems so I am able to appreciate those in Northern Ireland.
  These are not points to go into now, but I should like to refer to two further particular problems. The first is that the evidence examined and taken into account at each Annual Review includes figures showing the financial position of the different types of fanning—livestock, arable, and so on—as well as the overall position in the different countries of the United Kingdom. Consequently, the determinations at past Annual Reviews reflect the situation and needs of livestock farms, including those in Northern Ireland. They do not, it is true, affect the cost differentials between one part of the United Kingdom and another but they do take account of the income position in Northern Ireland.
  Secondly, the differential between Northern Ireland and Great Britain as a whole is not a sufficient basis for Government action since the figure for Great
  1660
  Britain reflects the costs of a very wide range of types and sizes of farms, some of them in very favourable circumstances and some in circumstances very similar to those in Northern Ireland. There are remote farms in difficult conditions in the other three countries.
  It is thus not simply a problem of comparing figures based on straight averages across the board, since these could obviously be misleading and could allow unbalanced and possible invalid comparisons to be drawn. What may be more realistic is to try to compare as closely as possible like with like in the two countries. We shall have to study these points and take them into account in our final decisions.
  We have made a note of all the points which hon. Members have brought away from their visit and we have been in touch with the Minister in Northern Ireland. I assure hon. Members that all the points they have raised will be fully taken into account when we come to make the decisions, which I hope will prove helpful. But until we have made this complete study with the Minister in Northern Ireland, I do not think hon. Members would expect me to go further tonight.
  Mr. R. Chichester-Clark: Can the hon. Member say—within weeks—when this joint comparative study of conditions is likely to be completed?
  Mr. Hoy: I am sorry, but I cannot. If one is doing such a study oneself, one can give an indication as to completion but the hon. Gentleman, who has himself been in touch with the Minister in Northern Ireland and is not unacquainted with him, will know that we have to do it jointly. But I assure him that no time will be lost.
  Question put and agreed to.
  Adjourned accordingly at sixteen minutes to Twelve o'clock.

SCOTLAND
  International Trading Arrangements
  International Trading Arrangements
  Canada
  Canada
  Glasshouses (Oil Heating Costs)
  Glasshouses (Oil Heating Costs)
  Great Western Road, Glasgow (Scheme)
  Great Western Road, Glasgow (Scheme)
  Rent-Restricted Houses
  Rent-Restricted Houses
  House Purchase Transactions
  House Purchase Transactions
  Tayside Study Group
  Tayside Study Group
  Water Undertakings (Transfer of Assets)
  Water Undertakings (Transfer of Assets)
  Prescription Charges
  Prescription Charges
  CS Gas (Police Forces)
  CS Gas (Police Forces)
  Diseased Salmon
  Diseased Salmon
  Meat and Meat Products (Imports)
  Meat and Meat Products (Imports)
  Local Authorities (Rent Income)
  Local Authorities (Rent Income)
  Road Works (Expenditure)
  Road Works (Expenditure)
  Educational Building
  Educational Building
  Certificated Teachers (Registration)
  Certificated Teachers (Registration)
  Employment (South-West Economic Planning Consultative Group)
  Employment (South-West Economic Planning Consultative Group)
  Police Crime Squad (Commander)
  Police Crime Squad (Commander)
  Population Decrease
  Population Decrease
  Raspberry-Growing Industry
  Raspberry-Growing Industry
  Land Commission (Cost)
  Land Commission (Cost)
  Hnnterston "A" Nuclear Power Station (Capital Cost)
  Hnnterston "A" Nuclear Power Station (Capital Cost)
AVIATION
  Airport Requirements, Southern Hampshire
  Airport Requirements, Southern Hampshire
  Aircraft Noise, Southampton Area
  Aircraft Noise, Southampton Area
  Aircraft Noise, Birmingham
  Aircraft Noise, Birmingham
  Autair Services, Carlisle and District
  Autair Services, Carlisle and District
BOARD OF TRADE
  Bradford Colliery, Manchester (Closure)
  Bradford Colliery, Manchester (Closure)
  Yorkshire (Redeployment of Industry)
  Yorkshire (Redeployment of Industry)
  Hillington Estate (Vacant Factory Premises)
  Hillington Estate (Vacant Factory Premises)
  M.V. "Blenheim" (Inquiry)
  M.V. "Blenheim" (Inquiry)
  Aluminium Fabricating Capacity (Siting)
  Aluminium Fabricating Capacity (Siting)
  Census of Production, 1963
  Census of Production, 1963
  Trade Descriptions Act (Explanatory Leaflet)
  Trade Descriptions Act (Explanatory Leaflet)
  East European Trade Council and Agricultural Export Council (Aid)
  East European Trade Council and Agricultural Export Council (Aid)
  Russell Papers (Export)
  Russell Papers (Export)
  East European Trade Council
  East European Trade Council
  Import Controls
  Import Controls
  Roumania (Trade Agreement)
  Roumania (Trade Agreement)
  Industrial Development Certificates
  Industrial Development Certificates
  Raspberry Pulp Imports
  Raspberry Pulp Imports
  Board of Trade Factories and Extensions, Wales
  Board of Trade Factories and Extensions, Wales
MINISTRY OF DEFENCE
  4th (Leicestershire) Battalion Royal Anglian Regiment (Married Quarters)
  4th (Leicestershire) Battalion Royal Anglian Regiment (Married Quarters)
  Low Flying Training, Harrogate
  Low Flying Training, Harrogate
  Scottish Regiments
  Scottish Regiments
PORTS
  Blyth Harbour, Northumberland
  Blyth Harbour, Northumberland
ROADS
  M62 (Works)
  M62 (Works)
  Whitton Avenue-Greenford Road Junction, Ealing (Pedestrian Facilities)
  Whitton Avenue-Greenford Road Junction, Ealing (Pedestrian Facilities)
  Street Name Plates
  Street Name Plates
  Lancashire-Yorkshire Motorway (Outlane-Calder Section)
  Lancashire-Yorkshire Motorway (Outlane-Calder Section)
EMPLOYMENT AND PRODUCTIVITY
  Agricultural Training Board
  Agricultural Training Board
  Employment, Aberdeen Area (Standard Industrial Classification)
  Employment, Aberdeen Area (Standard Industrial Classification)
  Unemployment Statistics
  Unemployment Statistics
  Factory Inspectors
  Factory Inspectors
  Lost Man Hours
  Lost Man Hours
  Industrial Safety
  Industrial Safety
  Travel-to-Work Areas
  Travel-to-Work Areas
  Proposed Price Increases (Early Warning)
  Proposed Price Increases (Early Warning)
AGRICULTURE, FISHERIES AND FOOD
  Veterinary Investigation Facilities, Wales
  Veterinary Investigation Facilities, Wales
EDUCATION AND SCIENCE
  Musically-Gifted Children (Training)
  Musically-Gifted Children (Training)
  Unrecognised Independent Schools (Inspection)
  Unrecognised Independent Schools (Inspection)
  Victoria and Albert Museum (Architectural Metalwork)
  Victoria and Albert Museum (Architectural Metalwork)
  Scottish Students in England (Accommodation Charges)
  Scottish Students in England (Accommodation Charges)
  Non-Vocational Courses in Further Education (Increased Fees)
  Non-Vocational Courses in Further Education (Increased Fees)
  Colleges of Art
  Colleges of Art
NATIONAL FINANCE
  Gold
  Gold
  Prices
  Prices
  Scotland (Taxation, Grants and Subsidies)
  Scotland (Taxation, Grants and Subsidies)
  YUGOSLAV RASPBERRY PULP (IMPORTS)
  YUGOSLAV RASPBERRY PULP (IMPORTS)
MINISTRY OF HEALTH
  Doctors (Registration)
  Doctors (Registration)
HOSPITALS
  Red Cross Lane, Cambridge
  Red Cross Lane, Cambridge
HOME DEPARTMENT
  Methedrine (Advisory Committee Study)
  Methedrine (Advisory Committee Study)
PUBLIC BUILDING AND WORKS
  Bonawe Furnace, Argyll (Preservation)
  Bonawe Furnace, Argyll (Preservation)
SOCIAL SECURITY
  Supplementary Benefit Recipients
  Supplementary Benefit Recipients
  Family Allowances (Cost)
  Family Allowances (Cost)
TECHNOLOGY
  Atomic Energy Reactor, Chapelcross (Breakdown)
  Atomic Energy Reactor, Chapelcross (Breakdown)
WALES
  Low Bridges (Warning Signs)
  Low Bridges (Warning Signs)

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.
The Lord Hylton—Sat first in Parliament after the death of his father.

ROYAL ASSENT
2.36 p.m.
THE LORD CHANCELLOR (LORD GARDINER): My Lords, I have to notify the House, in accordance with the Royal Assent Act 1967, that the Queen has signified Her Royal Assent to the following Acts:

Customs Duties (Dumping and Subsidies) Amendment Act,

Agriculture (Miscellaneous Provisions) Act,

Water Resources Act,

Maintenance Orders Act,

Education (No. 2) Act,

Sale of Venison (Scotland) Act,

Gas and Electricity Act,

Family Allowances and National Insurance Act,

Countryside Act,

Thames Valley Water Act,

Saint George, Botolph Lane, Churchyard Act,

Birmingham Corporation Act,

University of Wales Institute of Science and Technology Act,

London Transport Act,

Felixstowe Dock and Railway Act,

Durban Navigation Collieries Act,

Saint James and Saint Paul, Plum-stead Act.

RAILWAY "GO-SLOW" AND FARES REFUND
2.37 p.m.
LORD VIVIAN: 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 is the position regarding a refund from British Railways to those people who were made to pay extra on their day return tickets when, through no fault of their own and due to the railway "Go-Slow", they had to make their return journey on the day following that on which the ticket was issued.]
THE PARLIAMENTARY SECRETARY, MINISTRY OF PUBLIC BUILDING AND WORKS (LORD WINTERBOTTOM): My Lords, this is a matter for the discretion of the Railways Board. I am sure they would consider sympathetically any claim for refund from passengers who have been unavoidably put to additional expense in this way.
LORD VIVIAN: My Lords, while thanking the noble Lord for his Answer, may I ask him whether he is aware that this has not happened in all cases? In order not to take up the valuable time of your Lordships, may I ask whether the noble Lord will allow me to present some instances to him, personally, at his convenience?
LORD WINTERBOTTOM: Yes, my Lords.

DIVORCE BILL TIMETABLE
LORD BEAUMONT OF WHITLEY: 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 time will be found for the Divorce Bill during the remainder of this Session.]
THE PAYMASTER GENERAL (LORD SHACKLETON): My Lords, I understand that the Divorce Reform Bill is awaiting its Report stage in another place. I cannot answer for another place in

317
respect of the progress of the Bill there, and until, and if, it reaches this House, it would be unprofitable for me to speculate on its progress here.
LORD BEAUMONT OF WHITLEY: My Lords, while thanking the noble Lord for his Answer, may I ask whether he is aware that if the Bill does come to this place many noble Lords would regard it as an important piece of legislation for which they would be prepared to give up more of their time; and that possibly this is a Bill which might go upstairs or across the road, or wherever it is.
LORD SHACKLETON: My Lords, I still think that this is rather hypothetical. Having had experience with the previous Divorce Bill in this House, I should be very surprised if the House as a whole did not wish to consider this Bill, and consider it in a good deal of detail. I really cannot make any more helpful remarks to the noble Lord.
BARONESS SUMMERSKILL: My Lords, is my noble friend aware that the women's organisations in this country, who have opposed this Bill because of certain inequitable provisions, will be very pleased to learn that the Government are not prepared to give it more time in order that it may reach the Statute Book?
LORD SHACKLETON: My Lords, the Government are always in a rather equivocal position on a Bill of this kind. Perhaps, I should merely note what the noble Baroness has said, and comment neither favourably nor unfavourably, nor even agreeably.

NUCLEAR POWER: FUTURE PLANS
2.40 p.m.
THE EARL OF BESSBOROUGH: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government when they expect to reach a decision on the future of the nuclear power industry and, in particular, whether there should be one or two boiler companies in this country.]
LORD WINTERBOTTOM: My Lords, discussions on the future of the nuclear power industry are well advanced, and my right honourable friend the Minister of Technology hopes to make a Statement on the Government's decisions before the Recess.
THE EARL OF BESSBOROUGH: My Lords, while thanking the noble Lord for that very short Answer, which he provided at very short notice and for which I am most grateful, may I ask whether he does not agree that there is some urgency in this matter, in view of the fact that it is two months since our debate on this subject on the Motion of the noble Lord, Lord Sherfield, when it was generally agreed that this was a matter of urgency?
LORD WINTERBOTTOM: My Lords, it is being treated as such, and a Statement will be made soon.

BUSINESS
LORD BESWICK: My Lords, dinner will be available this evening between 7 and 8.30 p.m. I hope it will also be convenient if I propose that we sit again on the Transport Bill until around 10 o'clock this evening.
EARL ST. ALDWYN: My Lords, I wonder whether the noble Lord could enlighten the House a little more about next week's Business. In particular, I think that people are a little vague about what is to happen on Monday.
LORD BESWICK: My Lords, on the basis of information which reaches me through the usual channels, I understand that we are unlikely to spend much time on the Report stage and Third Reading of the Prices and Incomes Bill. Then if, as I understand, the completion of the Committee stage of the Town and Country Planning Bill occupies only about an hour and a half, I hope that subsequently we can have another go at the Transport Bill on Monday. I intend, if this is agreeable, definitely to put the Transport Bill on the Order Paper for Monday, but possibly we could agree that we take it on the understanding that we should start it at a reasonable hour. Subsequently, we shall have further Sittings on the Transport Bill on Tuesday the 9th and Thursday the 11th.
EARL ST. ALDWYN: I am wondering whether, for the convenience of the House, it would not be better to take the Prices and Incomes Bill first on Monday; then to take the Transport Bill until, say, 6.30 or 7; and then thereafter finish off the Town and Country Planning Bill.
LORD BESWICK: Of course, I am always open to discuss this matter, but accepting that we take the Prices and Incomes Bill, which is a first priority in our planning for that day, I should have thought that it would be for the more efficient use of our time if we got the Town and Country Planning Bill out of the way. It is the more finite Bill. We can hope to complete it in, I should have thought, an hour or an hour and a half, and then we should have the rest of the time for the Transport Bill. Otherwise, accepting the other suggestion, it would mean that we should have only an artificial limitation, as it were, on the time devoted to the Transport Bill —something like an hour and a half, I think the noble Earl suggested. But certainly I should be glad to discuss it.
EARL ST. ALDWYN: My Lords, I think the noble Lord's estimate of an hour and a half for the Town and Country Planning Bill is probably a little on the short side. It will probably take somewhat longer than that—perhaps between 2 and 2½ hours, or something like that. The House has worked very hard on the Transport Bill, and it might be more convenient if that Bill were taken immediately after the Prices and Incomes Bill until, say, half past six or seven, and we then gently finished off the proceedings on the other Bill.
LORD BESWICK: My Lords, I am quite happy, as I say, to discuss this matter further. I simply make this point: that if I switch these round I shall please the noble Earl—and nothing would delight me more—but almost certainly I shall be displeasing other noble Lords. I shall have to take a balance of displeasures, possibly. Perhaps we could discuss later the question of the order in which the two Bills should be taken.
LORD SHACKLETON: My Lords, I hope noble Lords share my own interest in watching the "usual channels" operating in public.

TRANSPORT BILL
2.45 p.m.
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR SCOTLAND (LORD HUGHES): 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 Hughes.)
On Question, Motion agreed to.
House in Committee accordingly.
[The EARL OF LISTOWEL in the Chair.]
Clause 62 [Applications for operators' licences]:
LORD ST. OSWALD LORD ST. OSWALD moved Amendment No. 151:
Page 89, line 10, leave out paragraph (b).
The noble Lord said: Subsection (4) of Clause 62 deals with and describes the information which an applicant for an operator's licence must give to the licensing authority. Over most of the requirements we have no dispute whatever, and I would say at the beginning of my few words that I see, or I think I see, the Government's object in including subsection (4)(b) which we are endeavouring to delete. This paragraph requires the applicant to furnish particulars of the demand which he expects for the business he is running or entering.
The Minister opposite may say, and with some reason, that one of the existing problems of the licensing authority has been the number of small, would-be hauliers who have applied for licences with no substantial resources or expectations, some of whom have, in the event, gone out of business without contributing anything very much to the industry or to satisfying the needs of producers or customers. If the Minister says this I shall not contradict him. But our agreement is that, even so, the requirements is unfair to the great majority: it is unfair to expect the bona fide potential operator to measure in advance the custom he is going to attract. He may be fairly shrewdly aware of the demand in his district; he may even have come to agreement in advance with some prospective

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customers and some firms; and yet it may be difficult for him to be accurate in setting down the demand with any certainty. Nor would he wish to reveal confidential information to do with business already arranged or expected.
Apart from these objections the requirement seems to us misplaced in this Part of the Bill. Part V deals with quality licensing. This is a quantity licensing proviso. The Minister of State said in another place:
"This is not a system of quantity licensing. It is a system of quality licensing. Therefore, the judgment which the licensing authority is called upon to make is about the quality". [OFFICIAL REPORT, Commons, Standing Committee F, 28/3/68, col. 2280.]
That was in Standing Committee debating the previous Clause 61, then in fact Clause 57; but as a touchstone, of course, it is also applicable to this clause. I suggest that this is a reasonable change to make, in harmony rather than in conflict with the Government's own objectives and guidelines. I beg to move.
LORD HUGHES: I suggest to the Committee that this paragraph is quite properly placed here. It has a bearing on quality licensing, and we could not accept this Amendment as it stands. The effect of it would be to deprive the licensing authorities of an important means of assessing the likely financial stability of an applicant's business, which in turn is obviously important in relation to the continued proper maintenance of his fleet. It is this aspect—the ability to continue to operate a properly maintained fleet—which is important from the quality licensing point of view.
However, the Government are quite willing to accept that the drafting of the Bill could be improved to make it clear that this is the sole reason for requiring particulars of future demand, and I am prepared to accept that paragraph (b) could be deleted if at the same time there were an Amendment made to paragraph (g). The Amendment which we would propose to make to paragraph (g) is that that paragraph should read:
"particulars of the financial resources which are or are likely to be available to the applicant".
The words which are new are: "which are or are likely to be". This addition, with the deletion of paragraph (b), will
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certainly get rid of any lingering impression that there is an element of quantity significance in quality licensing, and we are anxious that any impression of that kind should be removed. On the other hand, the clause as it then would be will enable the licensing authority to take into account the future prospects of an applicant, should he apply for a licence without having enough money to show that he has the means to look after his vehicles properly. But, deletion of paragraph (b) without such an Amendment to paragraph (g) would not achieve this objective, and could act to the detriment of the applicant for licence.
I am happy to proceed in either of two ways. We could accept the deletion of paragraph (b) if we have an assurance from noble Lords opposite that they would accept in due course the Amendment to paragraph (g); or, alternatively, if they accept that this Amendment should now be withdrawn and be re-tabled at the next stage when the Government Amendment is tabled and the two could then go through together. I must make it clear that the deletion of paragraph (b) without alteration to paragraph (g) would not be acceptable to the Government, as we think it would be neither in the interests of quality control nor in the interests of the potential applicant.
LORD HAWKE: When the Government by co-operating with the Opposition Front Bench start to redraft this matter, will they bear in mind that the noble Lord in his explanation has spoken as if the only vehicles which are concerned are those under Clause 60(1)(a)—those operated "for hire or reward". The Government should remember that the vast majority of the vehicles cove -ed by this Bill are going to be operated under Clause 60(1)(b),
"for or in connection with any trade or business carried on by him".
Therefore, I think it is entirely irrelevant that the person who has a large fleet of vehicles to operate his own business should be asked to give particulars of his financial resources to some licensing authority before he is allowed to carry on his ordinary business. Will that be borne in mind? It is an important point.
LORD NUGENT OF GUILDFORD: I thank the noble Lord, Lord Hughes, for

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explaining the Government view on Amendment No. 151. As my noble friend Lord St. Oswald said, we attach some importance to the point because we think that paragraph (b) imports quite a significant element of quantity licensing into a scheme which is, basically, quality licensing. While we welcome the willingness to agree to leaving out paragraph (b), I am bound to say that the noble Lord's alternative of an addition to paragraph (g) on the following page is really almost as objectionable to us as was paragraph (b) in the first place. My noble friend Lord Hawke made a relevant point here. Why is it necessary to inquire into the future financial prospects of an industry which runs some lorries for itself? Why is it necessary to do this in order to determine whether there should be a quality licence for that particular fleet? It is going very far and wide. This is primarily the quality licensing Part of the Bill, to ensure that the operator is a responsible and competent person who will operate his fleet in a responsible, competent way. It is a matter of judgment how much information it is necessary to ask for. While I would accept paragraph (g), which requires particulars of the financial resources of the applicant to make sure that he has the necessary means to operate a satisfactory fleet, it seems to me to be quite another matter to ask him what finance he is going to have in the future. Where is this going to end?
I would urge the noble Lord to think again before he puts down such an Amendment. If he agrees to take out paragraph (b) now then we certainly could not commit ourselves to accepting the addition to paragraph (g). We will certainly look at it and study it. I have had some indication that something of this kind was coming; my noble friends had not. I think we ought to study it a little more. If the noble Lord would like to take it on that basis, to accept this Amendment without any commitment from us as to what will be done on the Report stage, we shall be happy to look at it on its merits and discuss it when we reach it. We could not accept it on the face of it.
LORD HUGHES: What I would do is to invite the noble Lord to withdraw this Amendment. If I take the paragraph out
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without any commitment that the other half is going to come into operation, he is asking me to buy a pig in a poke. I think the transaction ought to be done in one. I appreciate that noble Lords on the Front Bench opposite may not be in a position to give an undertaking at this stage; but, after all, if they withdraw the Amendment they are completely free to put it down again, whether or not they are going to support the second one. So the Opposition have nothing to lose by re-tabling it at the next stage, whereas the Government may have something to lose.
I would say in reply to the point made by the noble Lord, Lord Hawke, that it will be for the licensing authority to ask for such information as they may consider necessary. There may be many cases in which they will not ask for any information of this kind. They will not ask questions to which they are certain that they already have the answer. I think this is as much as I can say on that point.
LORD NUGENT OF GUILDFORD: Probably the right thing to do is to cooperate with the noble Lord and to give him what he wants so that the whole Committee can see the two Amendments on the Marshalled List together. Like the noble Lord, I have some idea of what his words mean; other noble Lords here have not.
LORD STONHAM: Oh!
LORD NUGENT OF GUILDFORD: The noble Lord, Lord Stonham laughs. Other noble Lords have heard of the noble Lord's ideas for the first time a few seconds ago. They are not on the Marshalled List. The right thing to do is to put down the Amendment that the noble Lord, Lord Hughes, wants. We are willing to leave in paragraph (b) so that the issue can be debated as one at Report stage. I would add that our apprehension is that we should not find the Amendment to paragraph (g) acceptable. I beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
2.58 p.m.
LORD BELSTEAD LORD BELSTEAD moved Amendment No. 152:
Page 90, line 18, after ("may") insert ("reasonably").
The noble Lord said: I beg to move Amendment No. 152. This is a small

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point but one of principle. The effect of this Amendment would be to provide that the licensing authority must act reasonably in specifying the form in which it requires information when application is made for an operator's or transport manager's licence. Noble Lords may have observed that the word "reasonably" is used in Clause 62(4) when relating to information which a licensing authority may request. The word is again used in Clause 68(2) when referring to information required for the variation of a licence. It is used again in Schedule 9 when it refers to information that a licensing authority would need for a transport manager's licence.
At the Report stage in another place the Government spokesman said that these were not parallel to being reasonable when specifying a form and that such an Amendment was totally unnecessary. I am sure that the noble Lord, Lord Hughes, will agree that every care should always be taken to see that the general public are never antagonised by unnecessary form filling. I feel sure that no licensing authority would take it amiss if this Amendment were accepted.
LORD HUGHES: When this same Amendment was being considered in Standing Committee in another place, my honourable friend the Minister of State undertook to consider the point further. As the noble Lord, Lord Belstead, has indicated, on reconsideration the Government came to the conclusion that the parallel drawn in the case of the use of the word "reasonably" in subsection (4), at least, where it relates to seeking for information was not a good one in this case. The noble Lord quoted three cases where the Government have used that word. I think this is a clear indication that where it is appropriate to do so the Government have no objection to the word being used. This is important when we are asking people to provide information, because cases can vary enormously. What may be reasonable to ask in one case may be totally unreasonable in another, so the proper thing to do is to put in the word "reasonably" in these cases.
When it comes to putting a statutory requirement on a licensing authority to be reasonable in specifying the manner
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in which the information is submitted, we think that is going too far and would be quite out of line with current practice in other legislation. It was, after all, only yesterday when it was suggested that so far as possible forms should be standard and used in the same way up and down the country. It seems to me that in this case the opposite is being asked. It may well be that the form used should everywhere be the same, or it may be that it should be different in one place from another. I do not know. I should have thought it more likely that the same sort of form would be used, but this amounts to saying to a very responsible body like the licensing authorities that they have to take care that the forms are of the right size, the printing is the right size, that the wording is right and so on. That is what it boils down to when you consider what is meant by saying that they should be reasonable in relation to the forms. If we cannot depend on the authority to put out a reasonable sort of form, we are entrusting very heavy responsibility to the wrong people altogether.
LORD ST. OSWALD: As always the noble Lord, Lord Hughes, is thoughtful in his reply. I have listened to him and to my noble friend, and I do not see why it should be inappropriate or unreasonable to be reasonable in the design of a form or in the selecting of the questions the applicant is required to answer, or the information he is required to give.
LORD TREFGARNE: I should like to support my noble friends and say that I find the arguments of the noble Lord, Lord Hughes, in this matter quite unconvincing. It seems to me that de same sort of argument applies in this case as to the previous Amendment, and I must confess that I was somewhat disappointed that that Amendment was withdrawn, because I thought that the assurances of the noble Lord, Lord Hughes, were somewhat vague. Surely the point with regard to both Amendments is how much power these licensing authorities are to be given in the inquiring into the financial status or operating ability of a potential applicant.
I would urge my noble friends to stand firm on this Amendment, because I feel that this sort of body may tend to become over-inquiring into matters that are really commercial matters which should be left

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to the commercial judgment of the potential applicant and should not become the concern of the licensing authority.
LORD HUGHES: I should have been more impressed by the criticism from the noble Lord, Lord Trefgarne, of my remarks had he not associated his criticism with what he called the unsatisfactory assurance which I gave on the previous Amendment. I do not think that my assurance on the previous Amendment, Amendment No. 151, could possibly have gone further. I was willing to accept it provided I got the acceptance in return of the other Amendment I mentioned which the Government were to put down on the next stage. I was as specific as it was possible to be. If he thinks that I have done as much regarding this Amendment the noble Lord has nothing to complain about.
LORD MITCHISON: It is obvious that this Amendment raises a deep question of principle in the minds of some people. I think it just as well to see what would be the effect of it. It would make no difference whatever to the information to be provided. It would simply be the form in which the information was provided and therefore that form would have to be reasonable. It is very hard to imagine a wholly unreasonable form, but I believe that sometimes some Government Departments can get quite near to producing one. Equally, a perfectly reasonable form is a little difficult to produce, but how these somewhat metaphysical considerations affect the working of the subsection I quite fail to understand. I am afraid that some noble Lords may be chasing a principle and that they will find, when they catch it, that it is a bit of a March Hare.
LORD BELSTEAD: I wish to thank the noble Lord, Lord Hughes, for his most courteous and full reply to this Amendment. I think it fair to point out that the Amendment refers to the way in which statements and information would be put into a form and that it has nothing to do with the size of the form—at any rate, that is not mentioned in the Bill. The noble Lord referred to standard forms. I should have thought, with respect, that this added to the strength
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of the Amendment. The noble Lord pointed out that the word "reasonably", having been used in certain places which I submitted to the House was, presumably, used in the correct places. I have the greatest respect for noble Lords on the Government Benches, but I do not think that I could take that as being necessarily a sequitur. In common with many other people in this country I was recently asked to give my height when applying for a gun licence and therefore I cannot honestly say that I have the same confidence in form-filling which the noble Lord, Lord Hughes, has. However, I do not think that a great matter of principle is involved, and I ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 62 agreed to.
Clause 63 [Objections to grant of operators' licences]:
LORD NUGENT OF GUILDFORD LORD NUGENT OF GUILDFORD moved Amendment No. 153:
Page 90, leave out line 30 and insert—
("The licensing authority in considering an application for an operator's licence may, if he thinks fit, consult—").
The noble Lord said: I beg to move Amendment No. 153 in the name of my noble friends and myself. Clause 63 sets out the basis of certain statutory objections which may be made to the granting of an operator's licence by the licensing authority. I am moving this Amendment because in relation to this aspect of an operator's licence I, and I dare say many other noble Lords, would like to understand more clearly what the Government have in mind. On the first Amendment we covered some of the points regarding the operator's licence and the fact that it is primarily a quality licence; in point of fact it is entirely a quality licence. Perhaps I may briefly recapitulate what is happening with this very big change in the law which the Government are here proposing.
The existing system of licensing is divided into four categories—"A", "B" "C" and "F". The "A" and "B" licences are the professional hauliers' licences and they are very tightly controlled by the traffic commissioners. The "C" licence, for the vehicle belonging to the industrialist or trader and used entirely for his own

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goods, is at present without any control except for such vehicle regulations as exist. Thus any industrialist or trader who wishes to have a goods vehicle operating for himself has only to pay the appropriate licence fee and get his vehicle licensed to operate wherever he likes all over the country. This system has developed tremendously in the last 20 years, generally to the great benefit of industry and trade. In this context, the operator's licence can be seen for what it is, a licence to ensure that an operator is a reliable and reasonable person capable of operating the fleet of vehicles in his charge, compared with the present system where there is a professional haulier's licence, tightly controlled, and the "C" licence, virtually without control.
Perhaps I should mention how the existing "A" and "B" licence system works. Any proposal to vary an existing licence, to extend it, or to add another vehicle or get a new one, is usually heavily opposed by all the existing interests—the railways, the existing hauliers and anyone who thinks his haulage interests will thereby be affected. The existing hauliers are very much concerned with the objections of self-interested objectors and, as any noble Lord who has ever sat in a traffic court will know, it is a pretty cumbersome business. I should think that one consideration that weighed in the minds of the Committee, which my noble friend Lord Geddes so ably chaired and which recommended that the present system should come to an end, was the cumbersomeness of a system which leads to this privilege of class of hauliers whose licence is of great value.
This is the background to what the Government are now proposing in this Bill, to get rid of all "A", "B" and "C" licences—I leave out for the moment the question of quantity licences. In future, all who wish to do so will be able to obtain a licence for a goods vehicle, provided that they satisfy the conditions in the clauses we have just been looking at. The broad theme is that an operator should be a responsible and competent person, with sufficient resources to operate the fleet he has under his control.
There are imported into Clause 63 certain classes of people who can have a statutory right of objection to the grant-
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ing of a licence by the traffic commissioners. I very much question whether this is a wise move. It is going to be extremely difficult to decide by what criteria the traffic commissioners would be guided and what would be the proper basis on which an objection could be made. In another place, the arguments on this became political and difficult to handle, but I hope that here, in our more dispassionate atmosphere we can discuss this problem in an objective way and consider all the pros and cons of introducing a system of statutory objection.
The effect of our Amendment would be to substitute a single process of consultation by the traffic commissioners with anybody they wish. This is much the same system as that which is operated with regard to passenger service vehicles and which, I may say, operates very satisfactorily. I greatly doubt whether the bodies mentioned in subsection (3) would wish to make a statutory objection. These bodies are a prescribed trade union or trade association, persons holding an operator's licence or carrier's licence and the employees of any such persons, a chief officer of police or a local authority.
Let us consider what would happen if one of these bodies wanted to make a statutory objection, and for the sake of the more vivid illustration let us take the most difficult one—a trade union. This is a heavy responsibility, and I should think that the executive council of a trade union would lay down in its rules that if a district branch wished to promote an objection this would have to be referred to headquarters, so that they could decide whether or not such an objection should be carried forward. Supposing the traffic commissioners decided to refuse the application for an operator's licence, almost certainly the applicant would appeal to the Transport Tribunal. The traffic commissioners would naturally call the trade union as one of the supporting witnesses. The union would have to send a senior official to give evidence on such an important issue, and I should think they would have to brief counsel in order to assist their official in giving his evidence and possibly in cross-examination. All this would be expensive and troublesome for them.
That is not the end of it. Meantime, no doubt, the applicant would call on his trade association to support him and to

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provide counsel. The point is that, whichever way the appeal went, the whole affair would be troublesome, costly and unpleasant—and unpleasant for the trade union as well. At the end of it an unhappy atmosphere would be left between the trade association, on the employers' side, and the trade union, on the employees' side—exactly the reverse of what noble Lords, and indeed every other sensible person in the country, are trying to achieve. I suggest that the public image of a trade union or trade association or local authority who decided to take such action would be damaged by them appearing in the role of a "snooper". I am bound to say that if I were responsible for the actions of any of these bodies, I should be most reluctant to see them involved in a case of this kind.
When we consider the criteria that are set out here and in the subsequent clauses for the grant of a licence we see how difficult it is to find grounds for objection which would not be invidious when trotted out in open court. Of course, where the operator has police convictions against him for traffic offences, that is something specific that everybody knows about and there is no difficulty about handling it, but in other matters it seems to me invidious for any of these bodies to have a right of statutory objection I should have thought that, in practice, they would rarely use it On the whole, I should think that the principle of statutory objections was a mistake in the whole concept of the operator's licence
I put this Amendment forward, to a large extent, on a note of inquiry: how do the Government see this working? Are they sure that this is going to assist the general operation of the licensing system? Are they sure that it is going to promote the general improvement in this field that they want to see? I shall be interested to hear what the noble Lord opposite can say in answer to this. I beg to move.
LORD BEAUMONT OF WHITLEY: I share the same doubts and ask the same questions as the noble Lord, Lord Nugent of Guildford, but I have another one, as well. It seems to me that in order not to complicate further this already complicated Bill (and I congratulate the Government on that) the Government
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have actually lumped in on one side four different classes of people and on the other, if you count sub-divisions, six classes of objections and made them all, so to speak, a cross-permutation. But if they are going to do this, there should be much more selectivity. Even more difficult than the question of the trade unions would be the question of the associations of persons holding operators' licences or carriers' licences, because they would be in the position of potential competitors to the person applying for the licence, and that they should be able to make statutory objection on such matters as insufficient finance and previous convictions seems to me to be most distasteful. I hope that the Government will think about this subject again.
LORD PARGITER: I have looked carefully at the proposed Amendment, and the regard which the noble Lord has expressed for the trade unions is touching indeed. It almost brought tears to my eyes to find that there is so much concern about the trouble a trade union might get involved in, the possibility of having to brief counsel, and all sorts of things that might happen. But let us look at what the Clause would do if it were changed in the way suggested. The licensing authority may consult "any of the following persons". That, then, would be a matter for the licensing authority. The licensing authority, deciding to play safe, decide that they will specifically consult all the people who are named instead of leaving it to those people to lodge an objection. The best way that I know of inviting objection is to ask anybody if there is anything to which they object. The majority of people will be looking to see if they can find anything to which to object.
But if the notice is published, it is there in the standard form for them to see: if they do not see it, that is just too bad; and if they do, and do not think much about it, they certainly will not give it very much thought. But if they get a letter from the licensing authority: "We have an application here from Mr. so and so for vehicles. Have you any objection?", they may go into the matter very thoroughly and probably find objections. What would result would be the opposite of what the noble Lord seeks to achieve, and it would be far better to leave it as it is, with a statutory

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right to object on the publication of the notice, rather than to invite objection through the licensing authority. What are the licensing authority to do? By and large, in operating this provision they are bound to play safe. They are much more likely to consult far more people as a result of the fact that they are given leave not to consult them, than they would if the clause were left in the form in which it is. I suggest that the noble Lord should look carefully at what he is proposing, because it looks to me as if it will invite far more objections than otherwise would occur.
LORD MITOHISON: I entirely agree with what my noble friend has just said. A remarkable doctrine is being put forward by noble Lords opposite. I should have thought that the police, who are one of the specified classes, in certain respect local authorities, and surely a trade union's employees, have a duty in these cases, and a duty that they ought not to be prevented from performing, and that this is something that ought not to be left to the licensing authority. Let us see what the grounds are in the following clause. One is that the vehicle should be fit to carry what is proposed to be carried, and should be kept fit, and that the fleet of vehicles, if the man has a fleet, should be kept fit, too. Are we to put it on the licensing authority, who I should have thought in these cases were in a semi-judicial position, to pick and choose what should happen about this? Are we to say that it is not the duty of the trade union, on behalf of its members who may have to drive the vehicles, to see that those vehicles are safe to drive? And are we to say, if someone is starting a harum-scarum racket of some kind or another for which he cannot possibly find the necessary finance, that the local authority, whose constituents will have to use these vehicles, should not see that there is instead a proper provision.
I should have thought that there was nothing very much to alarm noble Lords opposite. I must say that I am rather surprised. I often hear objections to bureaucracy, but I never thought before that so much ought to be taken away from the police, in whom I hope we have some confidence, and so much taken away from trade unions, about whom we heard moving words from the noble Lord who moved the Amendment, and
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so much, too, from local authorities, and handed over to the licensing authority. Surely, it is their duty to decide, and there ought to be a provision that those who have a public duty, broadly speaking, if only on matters of safety, should be the people to object in performance of that public duty.
I would call the attention of your Lordships particularly to the fact that a later subsection in this clause provides that the burden of proof is to be on the objector. That seems to me to be a right and proper condition in the cases that I have in mind and the cases which would, I think, form the vast majority of instances of action under this clause. I venture to think that here is a question of principle and that there is confusion between the judge and the responsible public authority, a confusion as to the functions of the licensing authority. For something that is really likely to work pretty ill, this Amendment, if I may use the phrase, takes the cake.
LORD HILTON OF UPTON: Despite the usual impressive way in which the noble Lord, Lord Nugent of Guildford, moved this Amendment, I have to inform him at the beginning of my remarks that I have to resist it. I do not think he will be surprised to hear that. So far as I understand it, we are taking together Amendments Nos. 153 and 154, the latter being consequential on the first. These Amendments would remove the right of objection to the grant of an operator's licence from the persons described in subsection (3) (a), (b) and (c), and substitute a right of a licensing authority to consult or refer to such persons if he thought that the applicant could not match up to the requirements set out in Clause 64(2) for the grant of an operator's licence.
Your Lordships will know that similar Amendments with the same purpose were debated in Committee in the Commons (cols. 2345 to 2352) on April 3, and on a Division these were negatived. In advising the Committee to reject the Amendments, my honourable friend the Joint Parliamentary Secretary pointed out that the objection procedure is an important part of quality licensing. Unlike the present carriers' licensing system, where a new applicant for a licence does not have to undergo investigation of his fitness to be an operator, quality licensing

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lays particular stress on the need—I think this is the most important part of all—for preventing people who are unlikely to run vehicles safely from ever getting a goods vehicle on the road. The statutory rights of objection will be more effective in getting the facts about an applicant before a licensing authority than a system which leaves the full burden on him to make his own inquiries. I use the same argument in resisting these Amendments.
May I also stress that giving a right of objection to a particular body does not impress upon that body a duty to object to every single application. Indeed, one would expect an objection only where the objector happened to have relevant knowledge about a particular application. There was some misapprehension on this point in the Commons, where one Member seemed to imply that every local authority would need new staff and officers to carry out its "duty" of objection. There may also be some concern that objectors may in some cases be trivial and even vindictive. But I feel sure that the licensing authorities can be relied on to deal with such cases in the way they deserve. I should like to thank my two noble friends behind me, particularly Lord Mitchison, for coming to my aid in replying to this Amendment. He made many of the points which I should otherwise make. But, having said that, I hope that the noble Lord will agree not to press his Amendment further.
3.32 p.m.
LORD HAWKE: My noble friend made a very important speech on the subject of trying to get information from the Government as to how the size of the lorry fleets of the country would be limited in future. He gave the licensing procedure at the moment, under which there is built in a self-limiting procedure by the competitors' being able to object to a new person coming in. I could find nothing of that sort in this Bill, and it does not seem to me that the particular persons who have the right of objection—the trade union, or the chief officer of police or the local authority—will have any interest whatsoever to see that there is not an undue extension of lorry capacity on the roads. My noble friend put his Amendment down to explore and discover what the Government's position
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on this is; how they visualise that this system will work. I am afraid that the noble Lord, Lord Hilton of Upton, did not reply to that at all, and my ears were agog to hear what he was going to say.
LORD HILTON OF UPTON: I think the Committee would be surprised if I could give that information on the spur of the moment. This is, I agree, a very particular but none the less a very important point, and I promise that as soon as it is possible I will convey the information to the noble Lord, but I just cannot give it to him now.
LORD HAWKE: It is not the noble Lord who wants it; it is the Committee who want it. It is really a very important point. It is the core of licensing of lorries in this country.
LORD HILTON OF UPTON: May I then substitute "the Committee" for "the noble Lord"?
LORD NUGENT OF GUILDFORD: I feel rather of the same mind as my noble friend Lord Hawke. Although the noble Lord, Lord Hilton, gave us, in his usual agreeable way, a very pleasant answer he did not throw a very great deal of light on the philosophy behind the Government's mind on quality licensing. I had understood that quality licensing was concerned simply to ensure that the quality of the operator and his capacity, and the quality of the vehicle, judged by construction-and-use standards, were such as to make them safe and competent for the road (I am leaving out for the moment quantity licensing for the big vehicle) and that only economic factors would determine what the ultimate size of the fleet was. I can only make this comment to my noble friend Lord Hawke, because there is no clue as to anything else.
However, to return to the specific point here, I am bound to say that, despite the interesting speeches from noble Lords on the other side, I do not feel convinced that this procedure of statutory objection would be better than a system of consultation. After all, the system of consultation works, and has worked for many years, extremely efficiently for the passenger service vehicle. The traffic commissioners have a right to consult anyone they like, and to do as they wish. I am

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sure that noble Lords would agree with me that nothing could be more important than the competence and reliability of the operator of the passenger service vehicle which is going to carry large numbers of the public; and the consultative system works perfectly well.
I just do riot understand why the Government want to have this cumbrous system, as I see it—I repeat, cumbrous system—of a statutory right of objection to certain people here. I am 100 per cent. with the noble Lord, Lord Hilton—and I am sure that all my noble friends are—in the wish that the quality licensing should be directed to preventing unsuitable people from putting unsafe vehicles on the road. There are not many bad actors in this connection, but there are some, and I am as interested as he is to deal with them. I am just not convinced that this rather cumbrous machinery is going to do it. When the noble Lord, Lord Mitchison, was making his customary entertaining speech, and referred to the need to judge whether the applicant was a fit person, I wondered whether he was going to suggest that the National Health Service should provide a medical certificate, or possibly, on the financial resources, that the bankers should have a right of statutory objection, too.
LORD MITCHISON: That is too much. If I may say one thing further, I was only suggesting that the police, for instance, on matters of safety ought to have a right of statutory objection; that the trade union, on behalf of its employees, and the local authorities in perhaps slightly different cases, ought to have the same. It is a great pity to try to shift the burden of what is right in these cases on to the licensing authority, who are the judges and ought not to be the advocates.
LORD NUGENT OF GUILDFORD: Of course, I quite agree with the noble Lord. The traffic commissioner sits in a semi-judicial capacity and he is ultimately the judge who will decide on the merits of the case. But the noble Lord referred to the fact that subsection (5) provides that the onus of proof for the objection shall lie on the objector. One thing I am quite sure of is that the police will never make an objection unless it is founded on fact; and facts of convictions in the past. The police, of course, know many things about all of us—in
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fact, they probably know everything about all of us—but they certainly would not stand up and give information about it unless it was information that could be proved in a court.
I suppose it does not matter very much if we leave this provision in, because I do not think it will be operated very often. As the noble Lord, Lord Hilton, said, there will occasionally be trivial or vindictive objections. This is inevitable if we give a right like this. But in the main these bodies, being responsible bodies, will not make statutory objections because of all the difficulties that are involved. I suppose that what will happen in practice is that the traffic commissioner will proceed very much as he has done in the past with passenger service vehicles: he will consult anybody who he thinks will help him in any particular case and make up his mind in the light of all the facts, and we shall very seldon hear of statutory objections being made.
It seems to me to be a pity to rut this provision into a Bill which is starting with what I believe is a good idea, of getting rid of all the cumbrous machinery as recommended by the Geddes Committee, but this is the responsibility of the Government, and if they really, wish to do it, although to my mind it detracts somewhat from the Bill it is certainly not a matter on which I would invite my noble friends to divide the Committee. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 63 agreed to.
Clause 64 [Decision on applications for operators' licences]:
3.41 p.m.
LORD ILFORD LORD ILFORD moved Amendment No. 154A:
Page 91, line 38, at end insert ("and for their garaging or parking off the highway").
The noble Lord said: This is not an Amendment which calls for any elaborate explanation, because your Lordships are all familiar with the nuisance and annoyance which is caused by the garaging of vehicles on the roads. When large commercial vehicles are left by the kerbside in residential streets the annoyance is still greater. Clause 64(2) enumerate a number of what: are called "requirements"

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which the licensing authority have to take into consideration in awarding a licence to an operator. These requirements cover a wide field. The operator must be a fit person to hold an operator's licence; there are arrangements for securing that Part VI, which deals with a driver's licence, must be complied with, and so on. At the end of subsection (2)(d) it provides that there shall be satisfactory facilities and arrangements for maintaining the authorised vehicles in a fit and serviceable condition, and this Amendment seeks to add the words:
"and for their garaging or parking off the highway".
When this matter was being discussed in another place the Minister said that it was considered that the combined effect of Clause 64 and of Clause 122(1)(b) (which extends the power to refuse licences in cases where the granting of a licence is likely to affect the amenities of the area) would be sufficient to protect the residents in those streets where vehicles are left in this way, without the need for any further provision. That is all very well, but what the Minister is saying is that there would have to be a prosecution under the combined effects of Clause 64 and Clause 122. But one does not want to multiply the number of prosecutions. If it is possible to deal with a matter of this sort without exposing the drivers and owners to additional grounds for prosecution I should have thought your Lordships would wish to take that course.
This Amendment proposes that there should be a discouragement at an earlier stage, rather than prosecution. It proposes that when the licence is granted the operator should appreciate that it is granted upon terms that his vehicle is not parked out in the street, either during the daytime or during the night-time, when long-distance vehicles are much more commonly parked. One knows what happens; the drivers have a run into central London from some provincial town, they perhaps go to the docks and off load and then, instead of putting the vehicle into a garage during the night the vehicle is taken to the nearest residential street and left on the kerb. When the unfortunate people who live in that street wake up in the morning they find themselves confronted by a large pantech-
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nicon, or a lorry, or a lorry and trailer, or even a concrete mixing machine. That gives rise to a great deal of annoyance and nuisance. The purpose of this Amendment is to try to minimise that nuisance.
It would be a much more effective and satisfactory way to do that, to encourage the owner of the vehicle or the driver not to leave the vehicle in the road, by making it a condition of the grant of his licence that the vehicle shall be properly garaged or that proper accommodation shall be found for it. That would not necessarily involve a prosecution, but it would mean that the operator would appreciate that if he did not make adequate provision for the garaging of the vehicle he might well lose his operator's licence when the time came to renew it. That seems to be the most satisfactory way of dealing with the matter. I hope your Lordships will agree and that the modest Amendment which I am proposing will be accepted. I beg to move.
LORD PARGITER: I am a little concerned at what the noble Lord has said as to the extent to which this particular clause should go. I thought the Amendment was designed to ensure that the owner of the vehicle would show that he had sufficient parking space at his place of business to keep the vehicle off the highway. However, in his speech the noble Lord spoke about a long-distance lorry driver coming into London to go to the docks, and I am not sure just how far one can require an operator to say that under all conditions he would have adequate parking space for a vehicle, possibly in places and under conditions which he could not envisage. It would seem to place an impossible burden upon him. If the noble Lord, Lord Ilford, said that the operator shall have at his place of business or at the address from which he operates his vehicles adequate parking space off the highway, that would seem to be entirely reasonable, but I do not think one could require any operator to show that in all circumstances he will have adequate garage space available at any particular point.
LORD HILTON OF UPTON: We would all agree with the noble Lord, Lord Ilford, about the problem of the parking and garaging of lorries, sometimes for long periods. We know that this applies to a large extent in areas of

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London and in most of the other big towns and cities. But I hope I can prove to the noble Lord that we do not regard this Amendment as the way to solve this problem. We regard his Amendment as unsatisfactory on at least three grounds. The first is this. It would not deal with the problem of lorries operating away from their home base—the point my noble friend Lord Pargiter was just making. In an undertaking whose lorries are reasonably fully employed, the vehicles probably spend at least as much time away from their home base as they spend at home. It would manifestly be unfair and impossible to require an operator to show that he could provide adequate off-street parking at all the multitude of places to which his lorries might run. The Amendment would thus be ineffective in dealing with an important potential source of parking nuisance.
Secondly, it would not deal with the driver who takes his lorry home at night and parks it on the street. There are a number of reasons why a driver might do this. His home might lie on the route he would have to follow the next day from the depot to his destination, so he would be helped on the way by taking his lorry home at night. Or he might want to start early in the morning, to get clear of a large city before traffic builds up and before transport would be available to take him to his depot. Or using the vehicle for home to depot journeys might simply be one of the "perks" of his job.
The third reason is this: street parking of lorries does not always cause a nuisance. It would be onerous to require the provision of offstreet parking in cases where the leaving of lorries in the street outside premises could not, by any stretch of the imagination, be said to cause a nuisance to residents or a danger to traffic—for example, where the premises are in a back street in a nonresidential area. The provisions of Clause 69(4)(g), on the other hand, deal with all these problems by making an operator's licence liable to revocation, suspension or curtailment if his lorries persistently break the law by parking improperly, wherever this may be. It is thus a far more effective way of dealing with the situation; and I hope, therefore, that the noble Lord will agree that his Amendment is unnecessary.
LORD FERRIER: I feel much inclined to support the Amendment the noble Lord, Lord Ilford, has moved, because I am a little unhappy at the terms of the noble Lord's reply from the Government Bench, which seemed to me to show some measure of acceptance of the condition that lorries may be parked, and parked overnight, on public highways. As one deeply interested in the matter of research into road accidents, I feels certain that when the forthcoming Report of the Road Research Laboratory is on the Table it will be seen that the stationary vehicle problem is a real killer in terms of accidents. I should be much happier, if the noble Lord is to withdraw his Amendment, if from the Government Benches one heard words which were firmer than the last few words of what the noble Lord said in condemnation of this very dangerous practice. Not only is it dangerous, but any sort of acceptance of the fact that an individual owner, whoever he may be, is entitled to leave his vehicle overnight in a public highway is wrong.
LORD PARGITER: May I draw attention to the fact that there are sufficient penalties available under the Highways Acts to deal with ordinary parking? Here you are placing a responsibility on the operator to provide that in all circumstances the vehicle will be garaged, and I think that is quite impossible. I suggest that the usual provisions of other Acts to prevent unauthorised parking on the highway where the vehicle creates an obstruction are adequate but are not sufficiently used.
LORD FERRIER: With due respect, this says "garaging or parking off the highway". I do not think there is any suggestion in Lord Ilford's Amendment that the vehicle must be garaged.
LORD SOMERS: Before the noble Lord withdraws his Amendment, may I say how much I agree with the noble Lord, Lord Ferrier, about the danger of parked lorries, very largely because it is far more difficult to see past them than past the ordinary parked private car. I understand the difficulty about providing parking or garaging in rather distant towns. I wonder whether her it would be possible at a future stage of the Bill to make some regulation that lorries must always be garaged or parked off the street where

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off-street parking is available, and to put in another regulation saying that local councils must provide, where possible, off-street parking for commercial vehicles only.
3.55 p.m.
LORD BALFOUR OF INCHRYE: I wonder whether the Government would reconsider this matter at a later stage. Accepting everything the Minister said from the Front Bench about the difficulties of lorries away from their base, I would point out that this Amendment in fact refers to the base, the home town, the home garage of the organisation, and it seems to me not unreasonable that one should ask that an operator should have proper garaging at his home base. After all, to-day local authorities and planning authorities will not give permission for a private residence in many parts of London or office accommodation in the centre of London unless there is also running with that accommodation a reasonable proportion, laid down by regulations, of garage accommodation for private and for commercial vehicles. If that is mandatory for new buildings, private and commercial, surely it is not unreasonable that it should also be mandatory for an operator in respect of his base. I hope the Government will be reasonable and think again on this matter before we come to a later stage.
LORD NUGENT OF GUILDFORD: May I, before the Minister replies, add one word in support of Lord Ilford's Amendment? There are two aspects of the parking of goods vehicles on the highway: one relating to parking on the traffic route and the other to parking on the residential street. On the traffic route, normal traffic regulations will take care of this; parking will be prohibited, and the vehicle will be cleared away if it is parked there. But in the case of parking in the residential street there are no such regulations and no such considerations. But there is a consideration, as my noble friend Lord Ilford so well brought out, from the amenity point of view. To have a very large van or lorry or cement-mixer, or something like that, standing outside your house is not particularly agreeable to the people there; and to have several of these vehicles in a residential street is really very hard on the occupants. I think this is a point which
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is not really covered by any of our existing arrangements, but it certainly does arise out of my noble friend's point.
My noble friend is concerned with the vehicle away from its base, as it very often will be. We all know what happens. If there is a convenient parking place, no doubt the lorry driver will use it, but if the parking place is some way off he probably will not but will leave his vehicle in the nearest residential street. This is offensive. It is a growing practice and it is bound to get worse. It is much worse having a vehicle of that kind left outside a house than having an ordinary private car, which is relatively small. This point may not fit in particularly well here, but I hope that, since it has been raised, the noble Lord will undertake that the Minister of Transport will have a look at it.
LORD ILFORD: In view of the support which this Amendment has received from different quarters of the Committee, I hope the noble Lord will be able to modify to some extent the answer which he gave me a few moments ago. This Amendment, of course, deals with the case where a lorry is parked in a street at its base town, as well as the case which I was putting, where it is parked in the street at the end of the run and will return to its base the following day.
Of course there is no excuse for an operator's acquiring a commercial vehicle and not having any place to put it. There is no excuse for that at all, and I should not have thought that that aspect of the case called for much emphasis. So far as the lorry is concerned, it is parked at the end of its run after being sent from some provincial town into London, perhaps to the docks, where it off-loads its load. It is then parked overnight until it returns to its place in the morning.
The real reason why those vehicles are parked in the street is that the operator is not prepared to pay for garage accommodation for them. All over London garage accommodation is available for these vehicles, but in a great many instances it has to be paid for. It is because the operator is not prepared to pay for the garage accommodation that the vehicle is left in the street, for which he has to pay nothing. I hope that in the light of this discussion the noble

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Lord will hold out some prospect that the Government will consider this matter, and at a later stage, so far as it is necessary, extend the powers of local authorities to prevent this nuisance.
THE EARL OF SWINTON: May I support this Amendment? Outside the block of flats where I live, in Prince's Gate, the Metropolitan Police found that this practice of parking large lorries was so dangerous that they have forbidden any large lorry to stop, even temporarily, outside the flats. This is because there have been so many accidents to people coming out and being unable to see round the lorry. If that has been done by the Metropolitan Police in a residential district of London, why should not the Government do it elsewhere?
LORD HILTON OF UPTON: I think the noble Lord, Lord Ilford, should be satisfied that he has initiated such an interesting debate. When I spoke originally, I said that we all agreed that this is a problem, and the number of speakers who have taken part in this interesting debate has proved that point.
What I tried to do on the Amendment was to reply to it as it stood. The speeches which have followed from a number of noble Lords, including the noble Lord, Lord Balfour of Inchrye, have suggested that we might have further regulations. I believe all noble Lords who have spoken are greatly experienced in this sort of situation and they know that at this stage I cannot do anything about it. All I can do—and I do promise this—is to draw the attention of my right honourable friend to this debate, and to the concern that this particular point is causing. I cannot possibly do anything more; but that I promise to do. With those remarks I hope that the noble Lord will withdraw his Amendment.
LORD ILFORD: I am much obliged to the noble Lord He concedes that this is a problem. Unfortunately, it is a problem at present without a solution. It is the solution of the problem which I am endeavouring to pursue. In view of what the noble Lord has said, of course I cannot go on with my Amendment, and I will withdraw it in the hope that we shall in the end find a solution to this most disagreeable and annoying problem.
Amendment, by leave, withdrawn.
4.6 p.m.
LORD BELSTEAD LORD BELSTEAD moved Amendment No. 155:
Page 92, line 5, at end insert—
("The licensing authority's decision shall be given within one month of the date of application and shall be published")
The noble Lord said: I beg to move Amendment No. 155. Clause 64 increases the number of people who may object—it still is a matter of objection as a result of an Amendment a little time ago—to a haulage operator's application. As the Bill does not lay down any period of time for objections it would seem not unreasonable to stipulate a length of time (and in this Amendment we suggest one month) within which a licensing authority's decision should be reached. The former Parliamentary Secretary, Mr. Morris, in Committee, in another place said that discussions would be held with interested organisations about the appropriate time limit for objections. Perhaps the noble Lord, Lord Hilton, could tell us whether these discussions have yet been held, and whether they have a bearing on a time limit for the licensing authority's decision.
This Amendment also calls for a licensing authority's decision to be published. Noble Lords may recall that in another place the Government resisted an Amendment to Clause 59 which asked for quarterly published reports to the Minister from the licensing authorities. I think I am right in saying that the Government gave as their reason that there already exists a fortnightly issue for each licensing authority of a document which is called Application and Decisions. None the less, it would assist applicants if the Government would accept the whole of this Amendment.
Publication will give applicants for these entirely new forms of licence, operators and transport managers, some idea of the basis for decisions which the licensing authorities reach. In common justice, where a licensing authority refuses an application I suggest that reasons should be given. May I remind your Lordships that there are the six requirements in subsection (2) of this clause to which the noble Lord, Lord Beaumont, referred a little while ago. Quite obviously, an applicant and all sorts of other people are going to want to know which of the six requirements

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a certain applicant has not been able to fulfil. I would therefore ask the noble Lord, Lord Hilton, when he replies, whether he would confirm that reasons will in fact be given. I beg to move.
LORD HILTON OF UPTON: The effect of this Amendment would be to require the licensing authority either to grant or refuse a quality licence within one month of the date of application and to publish his decision. Although in many cases it will be possible for the licensing authority to issue a licence within a month of the application, none the less where objections are made to applications and hearings have to be arranged it may not be possible always to keep within this limit. After receipt the application has to be published, and this is customarily done at present in respect of applications for carriers' licences in a publication known as Applications and Decisions which appears in each traffic area every fortnight. It is contemplated that this practice will continue.
Under Clause 63(4) regulations will be made prescribing the time which must be allowed for objections to be made after publication of the application. At present, in the case of public haulage licences, the interval is 14 days. If no objections are received, the licensing authority can then give his decision forthwith. If an objection is received, the licensing authority may consider it necessary to hold a hearing under Clause 87(1). Time will be needed to arrange the hearing, and even after the hearing the licensing authority may need additional time to consider his decision in the light of the evidence presented. He will then have to convey his decision to the applicant. All these stages could, in particular cases, take well over a month.
Nevertheless, the applicant will not be prejudiced. Special provision has been made in Clause 67(5) enabling the licensing authority, immediately an application for a quality licence is made, to issue a provisional licence, if the applicant so desires, which will last until the decision to grant or refuse a substantive licence is made. This will provide full protection for the applicant who needs a licence urgently. It is contemplated that the present practice of publishing decisions will continue. It is not necessary to
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specify this in the Bill, but it will be specified in the procedural regulations following the practice adopted under the 1960 Road Traffic Act, which is also silent on the question of publication of decisions. A similar Amendment was tabled in the Commons but was not moved.
On the other point made by the noble Lord, Lord Belstead, a promise by my honourable friend, the then Joint Parliamentary Secretary, Mr. Morris, in another place, that discussions would be held, I am afraid that I cannot tell him at the moment if those discussions have taken place. But I will find out and let him know as soon as possible.
LORD BELSTEAD: I thank the noble Lord for his courteous reply. Could he say a word about the timing for objections? Perhaps this question is not quite in order, because this matter is not part of the Amendment, but I tried to point out at the beginning of the words I submitted to noble Lords that the whole point of the first part of this Amendment is the time that will be taken for objections. I quite take the noble Lord's point that after the objections have been made the licensing authority must go through certain procedures which the noble Lord, Lord Nugent of Guildford, outlined a little while ago on a previous Amendment, but before I decide whether to proceed or withdraw the Amendment could the noble Lord say a word about the time limit for objection?
LORD HILTON OF UPTON: I cannot give an actual timetable. If I did this on the spur of the moment I should probably mislead the noble Lord, and I would rather not do that.
LORD BELSTEAD: I thank the noble Lord for all that he has said. I was glad to hear him repeat the period of 30 days as being a probable time. Although I would not in any way wish to misinterpret him, he then carefully added that 30 days may be exceeded in some cases. I should be most grateful if he would be so good as to do as he said and would let me know about the discussions; and I think that noble Lords on this side of the Committee will be very pleased to hear it repeated in this House that publication of the document Applications and Decisions will be continued. I think this

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is a most important point. With your Lordships' permission I will withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 64 agreed to.
4.12 p.m.
Clause 65 [Conditions as to transport managers]:
LORD ST. OSWALD LORD ST. OSWALD moved Amendment No. 156A:
Page 92, line 26, leave out from ("In") to ("on") in line 2.7 and insert ("every licence granted to an operator who at any time has three or more goods vehicles for use for carriage of goods under section 60 of this Act").
The noble Lord said: Here we move into the realm of transport managers and, in a sense, it is unfortunate that these Amendments come up for debate before the series of Amendments put down in the name of the noble Lord, Lord Shepherd, which immediately follow—that is, the Government Amendments referring to the introduction of classes of transport managers, and we are not at all clear in advance of what these classes consist or may entail. I will simply say that we on this side accept the concept of transport managers as we accept the concept of operators' licences. We have reservations on part of what has been explained and a good deal on what has not been explained, and because I believe that several of my noble friends behind me, and perhaps in other parts of the Committee, wish to argue these particular Amendments strongly and in some detail, I shall not be lengthy in my opening presentation, but I hope that they will use their persuasiveness in commending what I put forward.
A group of similar Amendments in another place fell under the guillotine after two and a half minutes of debate, but the issue was raised again on Report and discussed more fully, although without much clarity being introduced by the Government. So far as the appointment of a transport manager contributes to road safety through the proper maintenance of vehicles and the keeping of regulations we commend it, but we think it is an appointment appropriate to a fleet of transport vehicles. Stretching flattery about about as far as it can sensibly be stretched, one might regard the owner
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of six vehicles as having a fleet and, therefore, requiring a transport manager to accept responsibility and to accept blame and suffer the penalties for serious breeches of regulations. Under that number it can be reasonably argued that the owner should be able to keep alert eye himself on the vehicles and 10 know his individual drivers and their reliability.
But, as noble Lords will notice, we are not seeking such a dispensation; we are asking that the owner of half a fleet by this calculation—that is, the owner of one, two or three vehicles only—should be freed from the requirement to appoint and pay a transport manager. Clearly he still has to obtain an operator's licence, and to obtain that he has to satisfy the authorities, providing the strict particulars which we discussed in Clause 62. We consider that, in all conscience, this should be enough to achieve the objectives of the Bill, or this Part of the Bill, without going through all the procedure connected with the appointment and licensing of a transport manager. If, as we consider, the operator himself is perfectly capable of exercising proper supervision over the running of three vehicles, then he can accept also responsibility for infringements. Prosecutions can be brought against him. There has been no difficulty that I have ever heard of in the past in bringing the owner to book in cases of violation. We can see no advantage in this new obligation, and great disadvantages for the small operator placed under an unfair and needless burden.
Noble Lords, including Ministers, will be aware that this has caused considerable anxiety among farmers. There are cases, for instance, where the farm is worked by the family itself. I: seems slightly crazy that one of the family has to be appointed transport manager in order that he, or she, shall be responsible for the vehicles which they all drive, and responsible for any misdeed which any of them may commit on the highway. We do not yet know what the test or examination for a transport manager will contain, or how sophisticated it may be. We believe that in particular cases cited here the obligation will be burdensome and unnecessary. As the: Committee will see, we provide a safeguard in Amendment 158A. I should have explained that, for the convenience of the

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Committee, I am moving Nos. 156A and 158A together.
In No. 158A we provide a safeguard to satisfy the licensing authority as to the standard and competence of the maintenance of these vehicles. We recognise that badly maintained vehicles cause death and injury on the roads. Therefore we propose that an operator relieved by Amendment 156A from appointing a transport manager shall be given the obligation to inform the authority of the place or places where the maintenance of his vehicles will be carried out in accordance with subsection (2)(d) of Clause 64. This will have to be declared in the application for an operator's licence and will have to satisfy the authority in the first place. I hope it may also satisfy the Government. I beg to move.
LORD BEAUMONT OF WHITLEY: I think it would be for the convenience of the Committee that along with these two Amendments we should also consider Amendments 163 and 163A, since they are, to a certain extent, alternatives to the present Amendments. I understand that this is acceptable to the noble Lord, Lord St. Oswald, and also to the noble Duke, the Duke of Atholl, who is moving Amendment 163A. We on these Benches should like to associate ourselves with the arguments put forward by the noble Lord, Lord St. Oswald, and we will not waste the Committee's time by repeating them. We would just say that when we originally put down our Amendment we thought that there was a case for saying that three vehicles should be the limit of exemption for ordinary small firms, but that for farmers and horticulturists, and I am sure, for forestry too, five would be better. There is a special case for small farmers and small horticulturists, who often have up to five or six vehicles. It is difficult to draw the line, but we thought that this would be a more reasonable line; and on balance we still prefer it.
We like the Conservative Amendment No. 158A, with its provisions for safety, which must remove a good deal of the Government's objection to-day. Ideally we should like to see a combination of Amendment No. 158A with its safety requirements, and Amendment No. 163 with its slightly greater latitude for
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farmers and horticulturists. But we accept that, if we follow the Conservatives and compromise on four vehicles, we shall avoid a large number of difficulties which will arise from a definition of classes in Amendment No. 163. We do not necessarily accept that these difficulties would be insuperable, but as this series of Amendments is down we feel that it is probably best to accept them. For those reasons, we very much hope that the Government will accept Amendment No. 156A and the consequential Conservative Amendment.
THE DUKE OF ATHOLL: I should like to add my support for these Amendments. It is important that owners of three or less vehicles should be exempted from the conditions of having to employ a transport manager. There is a very good case for large companies having to nominate such a man who can be held responsible for the safety of the company's vehicles. I understand the Government's desire to be able to pin the responsibility for roadworthiness of lorries on a particular individual in a particular organisation. But most of these small transport people who own only one, two or three vehicles operate under their own names. This applies particularly to farmers, foresters and, I have no doubt, horticulturists, and I should not have thought that there was any difficulty about knowing who would be responsible for the roadworthiness of vehicles in those cases. Therefore, I hope that the Government will be able to accept Amendments Nos. 156A and 158A; or, if they cannot do that, that they will introduce some form of exemption for people who operate their vehicles in their own name and not in the name of a company.
LORD BELSTEAD: I should like to follow the noble Lord, Lord St. Oswald, in saying that in the view of many people on this side of the Committee the concept of transport managers is admirable in respect of large haulage fleets, but seems to be nonsense in respect of the very small operator. May I try to make rather more colloquially a point which was made by Lord St. Oswald in a more general way? Let us say that a man with two lorries successfully applies for an operator's licence. Under the terms of the Bill he must then appoint a transport manager who will probably be himself. The Minister on the Report stage in another place,

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referring to the transport manager, said at column 1675:
"He does not have to be an additionally employed person. To suggest that would be an absurdity."—[OFFICIAL REPORT, Commons, 28/5/68.]
This process will not make the operations of the small operator any safer. The transport manager's licence in such a case will be a bogus qualification. This case is somewhat strengthened by the fact that very often these small operators are people who run vans which will be caught by quality licensing because they are just over the 30 cwt. and are more or less light vans.
The White Paper The Transport of Freight (Cmnd. 3470) made it clear that in future a test will be instituted for transport managers. What form will this take for the small farmer, the jobbing builder, or possibly the small shop? In another place the Minister suggested that the small operator could overcome this problem simply by nominating a local garage as his transport manager. It was pointed out that this would obviously be unworkable, as a garage will prepare a vehicle for the road but will not be answerable at law for the management of vehicles and the conduct of drivers.
Mindful of the prime importance of maintenance, safety and quality licensing, we have tabled Amendments Nos. 156A and 158A. These Amendments in no way seek to remove the responsibility for small fleets. The small operator with one, two or three authorised vehicles will have to hold an operator's licence. He will be subjected to the requirements of Clause 64(2) which the licensing authority must consider in respect of an operator's licence, and he will be subject to the revocation, suspension and curtailment procedure in Clause 69, particularly subsections (1) and (4). Therefore, this is a desperately important Amendment. We on this side are most eager for the transport manager's licence to work. We feel that this Amendment will remove the danger of a bogus qualification, and it will make a decision in regard to a transport manager's test easier to reach. Taken with our second Amendment, No. 158A, we believe that we make rather better provision for safety. It leaves responsibility where it should lie in small fleets, with the operator himself, and will
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give the real transport manager the status which his responsibilities will command.
LORD BURTON: May I ask for a little clarification? Last night we removed vehicles under agricultural licences. Does this mean that these vehicles will now no longer require a transport manager?
4.27 p.m.
LORD HUGHES: I would not wish to speculate about the effects of the inclusion of an Amendment about which the Government are not very enthusiastic. In moving these Amendments, the noble Lord, Lord St. Oswald, made one statement with which I must disagree. He referred to the possibility that a transport manager would be responsible for any misdemeanour which may be committed on the highway. This is not so. His responsibilities are mainly to sec that vehicles are properly maintained and that drivers' hours are observed. His manager's licence may be revoked only if he commits an offence or is responsible for the revocation, suspension or curtailment of the operator's licence with which he is connected. I should like to clear up that point at the beginning.
LORD BELSTEAD: Could the noble Lord say where that is contained?
LORD HUGHES: In a note which has been passed to me from the Box.
LORD ST. OSWALD: But it is not in the Bill.
LORD HUGHES: Before I conclude, another note will probably be passed to me which no doubt will make noble Lords opposite equally happy. I should have thought that they would be happy to have the information whether it is in the Bill or not, and if we do find that it is in the Bill they will be even happier.
May I go on with the rest of what I want to say? I agree that Amendments Nos. 156A and 158A are linked and are perhaps also influenced by the series of Amendments which I shall be moving, beginning with Amendment No. 157 in relation to classes of licence. I hope noble Lords will not think I am just using a usual form of words when I say that our main objection to the Amendments is that they are unnecessary. Even if the Minister decided to do exactly what the Amendments seek to achieve, the Bill

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already has adequate powers to enable him to do so. Indeed, Clause 65(7) gives the Minister wide powers to introduce changes into the transport managers' licensing scheme, if any seem desirable in the light of consultations with the industry or of experience of the scheme in practice. These powers, plus the possibility afforded by Clause 156(2)—which deals with the commencement of the Bill's provisions—of introducing managers' licences by stages, give great flexibility. I emphasise as firmly as I can that the Minister's mind is quite open on these matters, but it would be wrong at this stage, before any detailed discussion within the industry has got very far, to contemplate any radical amendments to the outline system.
There are a number of points which I think I ought to emphasise. First of all, although the system of transport managers' licences will ultimately form an integral part of quality licensing, the appointed day for its introduction—that is, for the introduction of Clause 65 (managers' licences)—need not be the same as the appointed day for the introduction of Clause 60 (operators' licences). The Minister's intention is that operators' licences will be required from a date in the latter part of 1969; licensed managers, however, will not be required until later. This will allow time for a satisfactory scheme to be worked out fully. Then there will be a transitional period for qualifications. During an initial period, no formal qualifications will be required of the holder of a manager's licence; paragraph 1(4) of Schedule 9 provides for this. During this period, the licence holder will have to show that he is a fit person to hold a licence and that he holds a position of responsibility.
We now come to what will happen when qualifications are introduced. When they are introduced, there is no intention that everyone should reach the same standard, regardless of the size of the fleet he manages. The Amendments which I shall be moving—No. 157 to Clause 65, No. 164 to Schedule 9, and the related ones—will make it clear that licences of different classes will be available to accord with different needs. The qualifications of a transport manager will not necessarily be technical. The impor-
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tant requirement will be that he knows how to organise and administer a programme of maintenance, rather than how to carry out the actual repairs himself. Thus a small operator of the sort we have been talking about, or a farmer, might get a licence simply by showing, for example, that he knows how often his vehicle needs to be sent to the local garage and what he should require to be done to it.
The transport manager need not be full-time on the job. He does not necessarily have to be exclusively, or even mainly, engaged in managing vehicles. In a small fleet this may be only a subsidiary duty, taking up a small part of the time of someone engaged mainly in a quite different task—even, perhaps, that of being a driver or a farm hand. I wish to emphasise that, before any scheme of managers' licences is introduced, there will be the fullest possible consultations with the industry.
THE DUKE OF ATHOLL: I am sorry to interrupt the noble Lord, but could he say which industries? I fully understand that he will probably have full consultations with the Road Haulage Association, but the people about whom I, and I think my noble friends, are worried are not, on the whole, members of the Road Haulage Association. They are members of the N.F.U., the Scottish Woodland Owners' Association and such organisations. Will those organisations be consulted? If they are, I can tell the noble Lord here and now exactly what they will say.
LORD HUGHES: If the noble Duke would care to put that question in writing, it might save a lot of time later. I have said that there will be the fullest possible consultation, and I should have thought that meant consultation with anybody who had a reasonable claim to be consulted. That will, in fact, take place. I should be very surprised if, in consultations of this kind, my right honourable friend managed to avoid involving himself either with the N.F.U. or the Scottish N.F.U., or even some of the other organisations. But if the noble Duke is saying in advance that consultations with them are going to be a waste of time, he is not giving very much encouragement to my right honourable friend to embark on such efforts. However, I think he would

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probably prefer to rest on what he thinks is likely to take place, rather than on what the noble Duke threw off a moment or two ago.
There is little doubt that the pressures for the exemption of the small fleet operators arise, at the moment, mainly from agricultural interests, and that at least some of them arise from the fear that something technical and expensive is going to be imposed on them. I hope I have made it clear that that is not the case. We believe that the Amendments which I shall be moving about different classes of licence, and the fact that this system will not be introduced without the very fullest consultation with all the interests involved, will satisfy the legitimate fears that people may have. The answer to the question which I was asked, after I read from my first piece of transmitted information, has reached me during the course of these last few minutes. The information for which the noble Lord, Lord St. Oswald, asked is that Clause 65(1) and Amendment No. 162 give the managers' responsibilities, and paragraph 3 of Schedule 9 gives the grounds for revoking or suspending a manager's licence.
LORD ST. OSWALD: I realise that the noble Lord is trying to satisfy me, and perhaps I can explain what still puzzles me. I am looking at Clause 69, "Revocation, suspension and curtailment of operators' licences"—but I may be confusing operators with transport managers here. This gives me anxiety. However, I shall study what the noble Lord has said.
LORD HUGHES: It is difficult to sort out these matters in a few moments across the Floor. In case the noble Lord has not had an opportunity to take a note, may I repeat the references? If the noble Lord is still in doubt later, perhaps we can talk about the matter. The references were Clause 65(1) and Amendment No. 162, which give the managers' responsibilities, and paragraph 3 of Schedule 9, which gives the grounds for revoking or suspending a manager's licence.
I conclude by inviting the noble Lord, Lord St. Oswald, to withdraw Amendments Nos. 156A and 158A on the grounds I have stated: that the powers already in the Bill make it possible to
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do all that is wanted, and the Amendments which I shall be moving, from No. 157 onwards, will in themselves, I think, remove the grounds for fear which so many small operators appear still to have.
LORD NUGENT OF GUILDFORD: I thank the noble Lord, Lord Hughes, for giving us such a long and patient explanation—and, indeed, exposition—on this difficult subject. But I know he will not be surprised to hear that we wish to press the matter further. Transport managers, after all, are a completely new concept—as, indeed, is the operator's licence—and in another place had no debate at all on the Committee stage. The guillotine fell, so that this extremely important matter had no detailed discussion at all in Committee, aril only one brief discussion on Report stage. Yet it has far-reaching implications for all industry, farming and trade, and I am sure the noble Lord will accept that it is our duty to probe very carefully into these implications.
LORD HUGHES: May I interrupt the noble Lord, very briefly? I think he is not quite correct in saying that these matters had only a very brief discussion at Report stage. The information I have is that they were discussed at length on May 28; and this, I think, is borne out by the fact that the reference covers columns 1667 to 1692 of the OFFICIAL REPORT of another place. I hardly think that could be called a brief discussion. It was in fact a wide-ranging discussion.
LORD NUGENT OF GUILDFORD: I thank the noble Lord. I furnished myself with the Report stage Hansards, and I have them here. It was quite a brief discussion. I shall refer to it in detail in a minute, and in particular to the Minister's suggestion on how this particular problem could be dealt with—and I think this will add weight to the point I am going to make: that the Government have not yet fully thought out how the transport manager's licence is going to work, especially for the small fleets. My noble friend Lord St. Oswald, ably supported by my noble friend Lord Belstead, very well brought home to the Committee, I think, some of the problems which are involved here; and make the point advisedly that the noble Lord will find that the length of discussion

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on Report was very brief indeed for a subject of such great importance. This is something which requires detailed consideration, and it is clearly our job to give it that consideration here.
The noble Lord referred to the conditions in Schedule 9, paragraph 3, which deals with the revocation and suspension of a transport manager's licence. Here again we are in the field of speculation. We simply do not know. In paragraph 3(1)(a) of Schedule 9 we are told that a transport manager's licence may be revoked or suspended if he has been convicted of an offence specified in regulations which are to be made. We do not know what they are. We are in the field of the unknown, as indeed we are when we come to the prescribed classes, to which the noble Lord, Lord Hughes, referred, which the Minister is now considering and on which the noble Lord will later be moving Amendments. Here is an immensely wide field, as yet completely unknown. Nobody knows at present how these things are going to work, and we on this side are particularly concerned about the position of the small operator.
There is no doubt that the big operator already has a fully qualified transport manager. That is exactly what he should have, and any man with a large fleet who has not got a competent manager would certainly deserve to be pressed by this Bill. We are entirely in favour of the principle; but there is no doubt that the position of the small operator, the man with two or three vehicles, is completely unknown, and our personal knowledge of his problems—whether he is a small farmer, a small builder or any other small trader—leads us to believe that he may be in very severe trouble.
I should like to refer again, if I may, to this brief debate—and I emphasise again that it was a brief debate—which took place on the Report stage in another place. The Minister of Transport was very heavily pressed about this. He was asked how this was going to work, and, as my noble friend Lord Belstead has said, the Minister's reply was that the small operator could appoint his own garage, that which does his maintenance, as transport manager. I suppose this would be either the proprietor of the garage himself or, perhaps, if it was a larger garage,
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the works foreman. But let us consider for a minute how that would work. First of all, can we be sure that a small farmer or a small builder will always be able to find a garage which will take this on? After all, the person who becomes the transport manager is not only responsible for the maintenance of the vehicles: he is also responsible for the drivers' hours, and can be prosecuted if the provisions governing them are broken. Is this the sort of job that any garage is going to take on? Of course it is not. I should think that in most cases it would be quite impossible to find a local garage which would take on that duty.
But let us suppose that the small farmer was lucky, and did find an enterprising works foreman who said: "I don't mind taking a chance; I will take it on. Appoint me transport manager for your two vehicles. I shall want a suitable fee for it, of course, but I am quite willing to do that if the vehicles come in for maintenance". It may be that he finds it quite a good thing, and perhaps he takes on a number of other farmers as well. But suppose one of them commits an offence, and this man is prosecuted and his licence is taken away. If that happens, all the others have lost their transport manager, too.
Viscount SIMON: If the noble Lord will forgive my interrupting him, perhaps I may ask: has he observed that subsection (3) provides that nobody can be a transport manager for more than one person?
LORD NUGENT OF GUILDFORD: In subsection (3) of which clause?
VISCOUNT SIMON: Of Clause 65. It says that one person cannot be a transport manager for two people at the same time.
LORD NUGENT OF GUILDFORD: In that case, that part of my argument falls to the ground; but the first part of my argument is completely valid, unless Lord Simon feels inclined to challenge that, too. And if he can suggest how a small farmer would normally be able to find a garage which would take on a liability so severe as to involve his being responsible for the hours of the drivers of his vehicles he will torpedo the other part of my argument, too. But perhaps he cannot. I think there is no doubt that the Minister's suggestion in another

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place does not hold water, and the fact that it was seriously put forward by the Minister shows quite clearly, I think, that this whole problem of transport managers has not been thought out yet —and this, of course, is borne out by the fact that further on the Order Paper has on it a large number of Amendments from the noble Lord opposite making changes in the Schedule which would enable the Minister to bring in prescribed classes. We will discuss those in a minute. These matters, of course, are still literally under consultation with the transport industry concerned.
I come back to the point with which we are concerned. We feel that when the small farmer or small builder, the man with two or three vehicles, is faced by an establishment of prescribed classes of transport manager and is required to take the minimum test, he is being placed in an unfair position. Many of these people will not be in any way expert. They will rely entirely on their garages to do their maintenance. They simply know how to drive and operate their vehicles. Is it really logical, in the terms of the White Paper and the conditions which the Minister is considering laying down, to include these very small fleets? I would seriously suggest that this concept is fully applicable, and wisely applicable, to the large and medium-sized fleets, but not to the small fleet; and if the Minister tries to stretch the qualification to include the very least informed small farmer or small builder he will only make a complete nonsense of any qualification at all for the transport manager. This is our point. We think the Minister would do very much better to say that this is really rather de minimis, and that so long as the maintenance of the vehicle is properly done—as would be secured by our second Amendment—the safety factor is assured, and therefore these fleets (if one can call them such) of one, two or three vehicles should be completely excluded from the Bill. This is what we are putting to the noble Lord.
It may be that this is too large a concept for him to say, "Yes" or "No" to to-day, but. I would urge him not to say "No", but to say, "All right, we will take it back". The noble Lord knows that this is still entirely formative in the Ministry. I shall have something to say later about the consultations that
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are going on; but it is still entirely formative. From what the Minister said in another place and from what the noble Lord and I know about the consultations, this matter is still fluid and it is a matter of importance for tens of thousands or perhaps hundreds of thousands of people. We should make sure that there is sufficient flexibility in the Bill to avoid committing either a nonsense or an injustice to large numbers of people. I hope that by the time this debate concludes the noble Lord will say that he is willing to consider it further and to come back to it, if necessary, on Report.
LORD ST. HELENS: I wish most strongly to support the proposition so cogently argued by my noble friends. The Minister, as always, was extremely reasonable, sweetly reasonable. One might have thought that the millennium had moved in. He referred to the Minister's powers. The Minister spoke with great ability; but he is not the Minister in charge of this Department—with that the noble Lord will readily agree. He spoke about the Minister's power of modification; he spoke about the Minister's intentions; he spoke about the scheme being worked out later on and about the fullest consultations with the industry—consultations, but not agreement. What he did not mention is that this is the last time that this matter comes before Parliament. Of course, we have the Report stage and Third Reading; but we have had no change so far on this. This is the last occasion—and I am speaking of the Bill and not of the stage of the Bill —on which this Bill comes before Parliament.
Some of us are mildly suspicious, because we know quite well that this Bill is being introduced to penalise road transport and to drive traffic from the roads on to the rail. Therefore we feel that it is not always going to be the case that even the little man will get the fullest consideration from the Minister. We are worried that this is the last occasion on which we shall have the opportunity to protest before the Bill becomes law and the Minister is virtually empowered to do what he wants. For that reason, we feel strongly about this Amendment, and I hope the Minister will be able to give some forthcoming assurances.
LORD BEAUMONT OF WHITLEY: There is one other thing that the Minister did not mention, and that was any positive reason why these Amendments should not be accepted except that of the convenience of the Bill and the arrangements that had been worked out. In fact, he went a long way towards saying—and the noble Lord will correct me if I am wrong—that the objects of these Amendments are entirely acceptable. If they are entirely acceptable, if nothing awful is going to happen if these people are excluded from the safety regulations included in Clause 158(a), surely it is much easier, much less bureaucratic, much better and, as the noble Lord, Lord St. Helens, said, much safer, if we pass the Amendments now and cut out any risk of doubt. I do not believe there is any positive reason why these Amendments should not be accepted.
THE DUKE OF ATHOLL: May I add one more plea? The Minister said, rightly, that subsection (7) enables his right honourable friend the Minister of Transport to do all that we want. But, meanwhile, some small people are worried about the provisions of this Bill and particularly of this clause. They will be much happier and will appreciate the work we have done if the Minister would be prepared to accept these Amendments or to say that, at least, the principle behind them is acceptable and that the Minister will exempt all these small fleet owners.
Further, on a completely different point, I must admit that I read subsection (3) in a different way from the noble Viscount, Lord Simon. I read it to mean that the same person could not be transport manager to the same operator if that operator had his fleet scattered in different places. He could be transport manager to the operator only in one place; there is nothing to stop him from being transport manager to different operators in the same place. Could the Minister confirm what subsection (3) means?
LORD HAWKE: There was one matter I should like the Government to take into account, because this particular clause, to my mind, gives great point to what Mr. Gunter told us on television last night: that this Government is being
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run by a bunch of academics not very skilled in trade and commerce. Subsection (3) is going to be very difficult to work by the people who have large fleets of vehicles scattered in small depots all over the country. I am on the board of a group which will shortly have 2,000 vehicles on the road. They will be in various little depots of from two vehicles to 20 or 30 vehicles. The transport manager is going to have two functions. First of all, he will have to deal with the hours of the drivers, and then with the maintenance. The drivers' hours are obviously the responsibility of the man in charge of the local depot; he will require no technical mechanical knowledge. On the other hand, maintenance requires technical knowledge and the transport manager appears to have to pass some sort of examination in maintenance.
In the particular case I am thinking of the maintenance will all be done from several central depots. The vehicles will go to those central depots to be maintained. It will be quite ridiculous if the local manager, who has two or three vehicles in his charge, has to qualify mechanically when his vehicles will be maintained by a totally different person at a central mechanical depot elsewhere. This is only one group of many in this country who are operating in precisely similar conditions—not road hauliers, but just carrying on their own business. The Government must give this sort of consideration full weight. This is a highly academic clause which has been drawn up without any knowledge of how trade and industry in this country carries on.
LORD NUGENT OF GUILDFORD: Before the noble Lord, Lord Hughes, replies, may I put two small technical points to him on Clause 65(3) on the subject that the noble Viscount, Lord Simon, raised. As I read this subsection—
LORD HUGHES: Could I shorten the discussion? I shall be disagreeing with the noble Viscount, Lord Simon.
LORD NUGENT OF GUILDFORD: I thought that that would be so. The fact is that it is within the discretion of the Traffic Commission and therefore that clears up that point. May I inform the noble Lord, Lord Hughes, that I have checked the length of the Report stage on this particular item. It occupied about

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one hour and ten minutes which, I think he will agree, is a very short time for this important subject. That was the total amount of time that the other place spent on traffic managers.
LORD BELSTEAD: May I ask two quick questions? The first question is something which I think will come up again; perhaps it will save time to ask it now. Would the noble Lord agree that transport managers are under the Bill going to be subject to Clauses 65, 66 and 69, and that their licences are going to be at risk under these clauses? If the noble Lord does not agree, could he explain the words in Schedule 9 which give me reason to believe that that is so? Secondly—and I hope that my own Front Bench will jump on me if I am wrong—does the noble Lord realise that all we are talking about in this Amendment is a paper qualification which we consider to be unnecessary? This is without prejudice to all sorts of things that are going to come up within the next half an hour or hour. There is really very little—unless I am told I am wrong—between both sides of the Committee on this subject. Would the noble Lord, in the light of what my noble friend Lord St. Oswald said at the beginning, agree that we are not trying to shift the onus of responsibility; we are trying to cut out the name "transport manager" from a fleet of fewer than four vehicles?
LORD TREFGARNE: Before the noble Lord, Lord Hughes, sums up, I wish to support my noble friend Lord St. Helens, because this is the last time that this matter will be considered in Parliament. If we could possibly pass an Amendment it would at least give another place time to reconsider the matter and perhaps even send back reasons for disagreeing with our Amendment. I urge my noble friends to stand by the Amendment and, if necessary, seek a Division.
5.0 p.m.
LORD HUGHES: I am amazed at the passion of the noble Lord, Lord Trefgarne, for Divisions and his constant urging of his Front Bench to stand firm. I do not understand it, but possibly if I did I should he sitting beside him. First, I ought to make clear that what was said by the noble Viscount, Lord Simon, was not correct. The restriction is that the
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manager, as was said by the noble Duke, can be responsible only for one centre. Therefore, the noble Lord, Lord Nugent of Guildford, did not need to withdraw the second part of his case. I must admit, frankly, that there is no need for him to withdraw the first part either.
I do not wish, and I do not think that my right honourable friend the Minister would wish, to argue very strongly that the answer to the small man's problems is to be found in the garage. I do not think it was intended to be other than a case, or a possibility, which might arise. I agree with the noble Lord, Lord Nugent of Guildford, that the number of responsible garage proprietors who would he willing to shoulder these responsibilities might well prove to be a minority rather than a majority.
I think that the most effective answer I can give to the various points which have been raised is to take noble Lords back to what I said in my opening remarks: that my right honourable friend's mind is quite open on this matter. Noble Lords have taken this open-mindedness as a basis for criticising the Government, but in fact the Government have no specific detailed proposals to lay before Parliament at this stage. My right honourable friend having made a sincere point of the fact that this system of quality licensing will be introduced only after the fullest consultation with everybody concerned, it would make a farce of such an undertaking if in advance he said in detail what he wanted to do. In fact, we are going on to a series of Amendments which, as I say, will prescribe classes that will show the difference between what would be required for a small operator and what would be required for the operator of a large fleet.
It seems to me that the difference between the Opposition and the Government on this matter has narrowed down to the point which I feel the noble Lord, Lord Nugent of Guildford, put very well when he said that the Government may be faced with a choice between having no manager for the small fleet or having a manager with qualifications so tenuous that they really amount to having no manager at all. As the noble Lord anticipated, I cannot give any assurance on these points. I cannot go further than ask my right honourable friend to look particularly at the arguments which have been advanced

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on these Amendments and to consider whether the right way is to prescribe minimum qualifications for a transport manager of a very small fleet or to exempt small fleets altogether from this requirement. I do not know what the answer to that will be. It is not for me to make a decision on this matter. All I can do is to say that I will certainly urge that this be looked at from this point of view. I think that is all the difference there is between us.
I do not know whether on that point the noble Lords will wish to withdraw the Amendments and re-table them at a later stage. I do not want to have a build-up of Amendments at the next stage of the Bill to any greater extent than is necessary, but I think this is a case where there must be further consideration of the points which have been raised, particularly in view of the fact that the noble Lord has said that not everything that Members wanted to say on this point was said during the discussion in another place. We can argue about whether it was a brief discussion: it depends on how many people spoke in an hour and a quarter and on how much was said. You might have a discussion in your Lordships' Chamber for an hour and a quarter during which nothing very much might be said. On the other hand, you could have a discussion for half-an-hour in which everything might be said. Certainly, as this was one of the points inadequately discussed in another place, one cannot lightly dismiss the points made by noble Lords opposite.
Regarding the remarks of the noble Lord, Lord St. Helens, with, I think, the association of the noble Duke, the Duke of Atholl, I should like to say that this is not the last time that Parliament will have to deal with the question of transport managers. I have pointed out that this system will be introduced only after very considerable consultation. The regulations then made will be laid before both Houses of Parliament. So there will be a very effective opportunity for Parliament to discuss this item later. That was why I was shaking my head when the noble Lord, Lord St. Helens, said that this was the last time Parliament would have the opportunity to discuss the matter. One of the complaints made to-day is that we are discussing it almost in a vacuum. When we come to the regula-
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tions we shall discuss them in very broad detail, and it may well be that it will turn out then that there is no or little disagreement about them. However, that is to anticipate the future.
The noble Lord, Lord Hawke, referred to what Mr. Gunter said on television. Probably I left this House later than the noble Lord, Lord Hawke, so that I neither saw nor heard Mr. Gunter, but I have a suspicion that whatever Mr. Gunter said on television he was not talking about Parliamentary draftsmen; and much of the difficulty the noble Lord, Lord Hawke, is finding in this matter comes from the intricacies of draftsmanship rather than from difficulties of Government.
LORD HAWKE: This is the first time I have ever heard that policy is laid down by Parliamentary draftsmen.
LORD HUGHES: I was going to say "if the noble Lord, Lord Hawke, does not do me the courtesy of listening to what I say"—but that is obvious from some of the remarks which he made, and which I ignored, because this has been a very pleasant debate and there is no reason why I should fall out with the noble Lord, Lord Hawke, at this point. But I did not say anything about draftsmen working out policy. I said the things which appear to be giving the noble Lord difficulty arose from the intricacies of draftsmanship. He may disagree with that but I think that if he will look at some of them, he will find that the difficulty lies in the form of words in which the principles are expressed rather than the principles themselves.
I am reluctant to ask noble Lords to withdraw Amendments and to give assurances about consideration before the next stage, but I think this is an exceptional occasion and that it would be wrong for me to ask them to withdraw without giving an assurance that before the next stage we will consider the whole range of this debate on this comparatively narrow point of difference.
LORD ST. OSWALD: Despite the reluctance which the noble Lord has expressed, he has been very reasonable and I think that it would be quite unreasonable for us to press this Amendment now. He has undertaken to look at it again. We ourselves are at a disadvantage in not knowing what the next

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series of Amendments regarding classes of transport managers will bring. But in the light of noble Lord's undertaking, I gladly beg leave to withdraw this Amendment.
Amendment, by leave, withdrawn.
5.10 p.m.
LORD HUGHES LORD HUGHES moved Amendment No. 157:
Page 92, line 37, after ("licence") insert ("of the prescribed class.").
The noble Lord said: With this Amendment are associated Nos. 160, 161, 164, 166, 167, 168, 175, 176, 177 and 185. The main Amendment is No. 164 to Schedule 9.
These Amendments make explicit provision in Clause 65 and Schedule 9 for the granting of transport managers' licences of different classes. This was the situation envisaged by my right honourable friend the Minister at the Commons Report stage, when he said:
"How are we to define these qualifications? They will vary according to the extent of the applicant's responsibilities."—[OFPIc!AL REPORT (Commons). 28/5/65, col. 1675.1
This has all along been the Government's intention. It would clearly be absurd to expect the manager in charge of a fleet of two or three vehicles, who may well have other quite different duties as well, to have the same qualifications as the man in charge of 500 vehicles, whose whole job is transport management. The aim of the manager licensing policy is to ensure that the manager has a qualification sufficient, but not over-sufficient, for the responsibility he has to undertake. Clearly this implies a range of qualifications from the very simplest, possibly acquired, for example, on the basis of knowledge of the law's requirements about goods vehicles and a basic understanding of the maintenance needs of vehicles, to those requiring extended training and study.
The details of all this must be worked out in the closest consultation with the industry. What is important now is to provide powers in the Bill for "grades" to be introduced if necessary when a scheme has been agreed, and that is what the Amendments do. With extensive consultations to take place, it is not possible to speak in detail now about what kind of scheme may be evolved, simply because we want the consulta-
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tions to be the fullest and freest, without preconceived ideas of what the particular classes might be. As I said to the noble Lord, Lord St. Helens, any regulations to implement a scheme will have to be laid before both Houses, so there will be ample opportunity for discussion.
LORD TREFGARNE: Is it not the case that when these regulations are introduced, neither House will have any power to amend them but only to approve or disapprove of them?
LORD HUGHES: The noble Lord could not see what I was looking at and could not know that I had another three lines in my brief. The last three, lines are these, and perhaps they will answer the noble Lord. Naturally, any ideas and suggestions from the House will be carefully examined in the course of working out the scheme of qualifications. As the noble Lord has said, once the regulations are before Parliament the usual procedure will apply. The regulations can be only accepted or rejected. But in the period of consultation it would be wrong to think that suggestions put forward in this or in the other House are the only things which the Minister would not take into consideration when working out a final scheme. I beg to move.
LORD NUGENT OF GUILDFORD: I thank the noble Lord, Lord Hughes, for explaining to us what this innovation means. Of course, there is difficulty in a matter which has appeared on the Marshalled List within the last few days. It is a little unfortunate that in a Bill already heavily overloaded there should be such an important innovation at this stage. The other place has not seen it at all. We are getting an opportunity to debate it now and I think that we should be careful to try to explore every angle of it. The noble Lord was good enough to acknowledge that the debate in another place on the whole subject of transport managers was very short. It was not taken in Committee at all. So when we get a new feature appearing for the first time in this House, I feel that we have some ground for protesting that this further loading up of this already overloaded Bill is a churlish way to treat Parliament.
I understand that consultations with the industry are currently under way and that as late as Friday afternoon the Minister saw the leaders of transport interests, the

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Transport Consultative Council, to have a further talk with them about this very point—about whether there should be a statutory prescription of classes. I understand that the transport interests have been asked about this before, and the view they have given to the Minister is that they accepted that the Minister would wish to prescribe a minimum qualification but that, over that, it would be better if the industry developed its own scheme of classification. They thought that in the light of their experience as it built up they could more flexibly and better do this themselves.
The Minister is a very persuasive person, and when he saw them on Friday afternoon he persuaded them. As no doubt the noble Lord will be able to say, they have consented to the Minister's taking these powers of statutory prescription of classes. But I think it is right to put on record that their preference would have been a prescription of a minimum qualification and thereafter a flexible classification by the industry. I am bound to say that that would have been my preference, too, and I think that on the whole it would have been better.
Nobody knows what this is going to bring. The noble Lord, Lord Trefgarne, rightly made the point that regulations will have to come before both Houses of Parliament before they can be put into effect. We shall then have a chance of debating them. But we cannot amend them; all we can do is either to accept or reject them. Normally it is not the practice of this noble House to reject statutory Orders.
LORD SHEPHERD: Oh!
LORD NUGENT OF GUILDFORD: The noble Lord, Lord Shepherd, I know, is in a great state of anxiety about this; but he need not be; he has some good prospect in the future. But this is the fact, as noble Lords will know and, therefore, it is important in considering a matter of this kind to recognise that, if we agree now to put into the Bill—which is what the noble Lord, Lord Hughes, is asking us to do—a statutory scheme of classification, in due course regulations will come along defining that scheme and we shall have to say Aye or No to it; and almost certainly we here will say Aye. The Minister has managed to get
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the industry to say that they will accept it, and therefore I feel I am not in a position to argue for my preference, that is, that it would have been better had they been allowed to develop their own scheme over and above his minimum classification.
Amendment No. 164A, to which the noble Lord referred would be an Amendment to the Amendment which the noble Lord, Lord Hughes, is moving. Lord Hughes' Amendments to the Schedule start at No. 164, and the effect of that Amendment would be to say:
"There shall be such classes of transport managers' licences as may be prescribed".
My Amendment would follow and would add to the Amendment:
"but no scheme of classification shall he introduced without prior consultation with representatives of the industries affected".
This kind of provision is very common in many Acts of Parliament, and I should have thought was the absolute bare minimum that your Lordships' Committee should insist on here. We are here moving into a completely unknown field, where the noble Lord, Lord Hughes, has been gracious enough to say that the Minister's mind as yet is quite unformed. Industry is clearly not completely with him on it, although they are doing their best to co-operate, and they accept the general concept. So for the Minister to commit himself firmly in the Bill to do what he would do in practice—I accept that—I feel is the minimum that he should do in all the circumstances.
The Amendment is entirely constructive, and I very much hope that the noble Lord, Lord Hughes, will be able to accept it. I have had to interpose these remarks in the middle of the noble Lord moving his Amendments. The right moment for me to move my Amendment has not yet arrived, but it is so germane to the whole of this debate that I have argued it in that way.
LORD WOLVERTON: I should like to add one word. I do not like delegated legislation. My noble friend Lord Trefgarne was quite right when he said that we can throw out the Order if we do not like it, but we cannot amend it. Yet we do not know what the scheme is going to be. Neither House of Parliament likes delegated legislation carried out by Order. I do not think it is very satisfactory, although I see the difficulty. The scheme

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has not yet been agreed with industry. We are asked in Parliament to agree to this clause, which is a form of delegated legislation. We shall have great difficulty if we do not like it and we throw it out, as we did the other day on the Rhodesia Order. I wish to make that protest, because I think we are doing something in the dark.
LORD BEAUMONT OF WHITLEY: We on these Benches welcome this Amendment and the Amendments that follow, though we think that if this was always the intention of the Minister it has been rather well disguised for quite a long period of time. We think that in this scheme of different qualifications for different types of transport managers the good ones, of course, would be quite acceptable if the industry itself had such a scheme; but we do not think it is at all unreasonable that the Government should want to organise it themselves. We hope that, following on the last debate, there will be considerable exemptions at the bottom end which will mean that the absolute minimum qualifications for transport manager will not be needed, because this would seem to debase the whole idea of a transport manager.
May I say in parenthesis what I have not had time to say before: that we very much welcome the assurance we received from the Minister on the last debate, and we shall not be moving our Amendment No. 163. We think that this is a good idea. The regulations will come before us. If we had got into the habit of, or even started, throwing out Orders, it might have been better to throw out Orders by Ministers on internal affairs rather than Orders following a mandate of the Security Council of the United Nations. But that is another matter. We welcome this Amendment; it is what we want.
LORD HUGHES: I do not want to follow the noble Lord, Lord Beaumont, on the question of throwing out Orders. It does not seem to me that we should be allowed to make it a habit of long duration.
LORD HAWKE: Before the noble Lord leaves that point, may I make the suggestion that it is perfectly possible to lay Orders in draft form so that Parliament can debate them, and in the light of that debate the final form can be made.
LORD HUGHES: The noble Lord is quite right but I do not know that it is very often done. This might well be the case, and I should not like to venture an opinion on it. It would be idle for me to pretend that I have much disagreement with Amendment No. 164A. The simplest thing would be to say that we accept it; it could not do much harm. But this would be wrong, because one of the complaints which has been made against this Bill is that it is far too long already, and all we should be doing in accepting this Amendment is putting in something which is there already. Clause 90(8) imposes a general requirement on the Minister, before making any regulations under Part V or Schedule 9, including regulations under Amendment No. 164 and others, if they are accepted, to consult with such representative organisations as he thinks fit. Therefore, the Amendment is really asking us to put in in one place something which is already in the Bill in another place. Parliament, and this House in particular (and if may mention him in his absence, the noble Lord, Lord Drumalbyn, in very special particular) is always keen that we ought not to say twice what we want to do if once will suffice. I suggest that, in view of the wording in Clause 90, it is unnecessary to put this in as an Amendment in due course to my Amendment No. 164.
On the question about consultations with industry, to which the noble Lord, Lord Nugent of Guildford, referred, the interesting thing is that the main initiative at the moment is coming from the industry. This is entirely as the Government would wish it. Secondly, the ideas that are produced by industry will be carefully examined and then discussed with them. Thirdly, the agreed scheme, as I have said, will then be embodied in the regulations. In the longer term, I think it is right to say that the Minister would hope to hand over the running of the scheme progressively to industry. But I think it would not necessarily be satisfactory in the initial stage, at any rate, to depend only on a minimum standard and leave the rest to industry.
But I do not want to go further on this. The more I say on this matter the greater is the danger that I shall create the wrong impression about the particular direction in which we wish to proceed. What I am at pains to make

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quite clear is that the field is wide open in these discussions, and the field is equally wide open so far as Members of your Lordships' House are concerned. Proposals which are put forward will he considered. It was because of the fact that the field was so wide open that I felt I could not properly refuse to consider the purport of the previous Amendment, which seemed to me to fall properly within consideration of a scheme of this kind.
I appreciate the difficulty in which the noble Lord, Lord Nugent, finds himself and that he would have perhaps preferred at this stage not to commit himself to a scheme of prescribed classes but, because the industry has accepted, or has been persuaded (whichever way it is), that this is a workable proposition, he is presented with a certain amount of difficulty. However, I think it is a difficulty that he will be able to live with, particularly if, in the end, industry and the Government manage to agree on a workable scheme as a result of introducing this scheme of classification. I am quite certain that, although it comes in at a late stage, the noble Lord must accept that a scheme providing for wide variations is obviously preferable to one which would make variation impossible —or, at least, possible only to a limited extent. But the scheme we propose makes it very much clearer that variation is likely. I hope therefore that your Lordships will be able to accept Amendment NO. 157.
LORD NUGENT OF GUILDFORD: I again thank the noble Lord, Lord Hughes, for answering the debate, and in particular for dealing with my Amendment No. 164A. I have to acknowledge that his detailed knowledge of the Bill far exceeds mine. Although I am fairly familiar with most of its 268 pages, I am bound to say that I am not familiar with all of it, and perhaps even he requires a little professional assistance now and again.
LORD HUGHES: The noble Lord does me too much credit. I have, perhaps, more advisers than he has.
LORD NUGENT OF GUILDFORD: I acknowledge that Clause 90(8) meets my point. My Amendment has nevertheless given us a peg on which to hang
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a quite useful debate on this point, and indeed for the noble Lord, Lord Hughes, to give us a glimpse into the Government's thinking on how the classification of transport managers might proceed. I think this is most interesting, not only to all noble Lords but also to people outside. Industry is extremely interested in this concept. Most industrialists welcome it, as the noble Lord says. They think it a sensible thing to do. But there are still many anxieties, and it is very helpful to have a general debate such as this and to elucidate a little more the Government's thinking on the matter.
Everyone will welcome the Minister's assurance that he expects, and indeed welcomes, initiative from the industry in this connection. He said that in the main the ideas will come from industry as to how the classification might he built up. That seems to me entirely right. After all, they are the people who do it, and therefore they know. The Ministry can only speculate about it in theory. So this seems a very sensible approach, and I certainly welcome it. I have to accept that the Minister's handling of my Amendment was, as he said, in the spirit of his willingness to look again at our previous discussion on whether the very small fleet should be exempted in order to make better sense of the minimum prescription. And I thought how gracefully the noble Lord handled this aspect, where he turned even defeat into victory. But this is what we have come to expect. For myself, I shall be very willing to agree to these Amendments when they are moved and, when the time comes, not to move my own.
On Question, Amendment agreed to.
5.35 p.m.
LORD ST. OSWALD LORD ST. OSWALD moved Amendment No. 159A:
Page 93, line 15, at end insert—
("() For the purposes of subsections (2) and (3) of this section the licensing authority shall be required to have regard to representations made to him by the applicant.")
The noble Lord said: This Amendment introduces a rather more recondite aspect of the transport industry, and as neither the noble Lord opposite nor I have lived or worked in that industry I hope we can be patient with each other. My noble friend Lord Hawke may be impatient with both of us, having virtually moved my Amendment three

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Amendments ago. This, however, does not discourage me from saying that there are two subsections affected here, subsections (3) and (4) of Clause 65. They allow discretion to the licensing authority, but the intention of this Amendment is to give guidance to the authority for which it may be grateful. The provision states (I hope I am not over-simplifying) that a transport manager may not have responsibility or exercise responsibility in more than one operating centre or depot. Indeed, we now know this to be the case from a previous explanation.
The purpose of this Amendment is yet again to avoid unnecessary administrative complication for the industry. In a given business the internal organisation may well entail a more appropriate plan of control than is visualised in these subsections. It may be that an operator (and this no longer concerns small operators, about whom we have been speaking) has found it convenient to split the supervision of the two sides of the business—the mechanical performance, the dependability of the vehicles, and the operating of the fleet; that is, dealing with the drivers themselves. It may even be that one form of control and supervision is, and ought to be, in the territory of one licensing authority, while the other is, for instance, in a separate county.
This Amendment directs the licensing authority to take into account any sensible representations made along these lines by an applicant and to apply a degree of flexibility if the authority thinks fit, which is not foreseen in the Bill as it stands. I have said that this does not apply to the small operators, but nor does it severely affect the very large companies—for instance, the very large oil companies. It will be possible for them to have two transport managers in each depot responsible for the respective sides of the business. But in the case of a smaller company with, say, 40 or 50 vehicles it may be over-demanding to have two transport managers in depots of 10 or 12 vehicles. They will then be obliged to have a manager in one depot, qualified in man-management but responsible for both sides, while at a depot a few miles away he may have a colleague, with great experience on the operating side, unable to accept responsibility. This would
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make not for greater but for less efficiency. It would not further the objects of the Bill; it would, I think, inhibit them. I therefore hope that the Government will forgive my no doubt untechnical explanation of the Amendment, but look kindly on its purpose. I beg to move.
LORD HUGHES: I should have been surprised if an Amendment along these lines had not appeared on the Order Paper, because during a debate on a similar Amendment on Report stage in another place my honourable friend the Minister of State gave an undertaking that he would consider whether such an Amendment would be helpful. The noble Lord, Lord St. Oswald, will be rather disappointed when I say that the Government, having given consideration to this, have come to the conclusion that the Amendment is unnecessary. As the noble Lord has said, its primary purpose is to ensure that in considering the numbers of licensed transport managers a particular operator will be required to have, and in considering which particular persons in the organisation are to be licensed as managers, the licensing authority is
"to have regard to representations nude to him by the applicant".
When my honourable friend the Minister of State was speaking about this, he explained that Clause 62(3) already requires every applicant to state in his application for an operator's licence the names of the person or persons aid the other maters which he proposes should be specified in his licence for meeting the requirements about transport managers; there is nothing to prevent his including such supporting matter as he may deem desirable. Indeed, the licensing authority could not possibly exercise his functions under subsections (3) and (4) adequately unless he had information from the applicant about the way in which his business was organised and about the names and positions of the persons proposed as licensed managers.
In another place, the Opposition accepted that position. What they did not appear to accept was that, having received this information (or "representations", whichever you like to call it), the licensing authority would have regard" to it. It seems to me tat to suggest this line of argument is carrying a mistrust both of the Bill and of the

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ability and good sense of the licensing authorities to quite unnecessary extremes. The only way in which a licensing authority could sensibly exercise his discretion in, for example, deciding whether a particular operator could be allowed to have the same transport manager specified for two or more operating centres under subsection (3) would be by having regard to what the applicant had told him, under Clause 62(3), about, for example, the way in which his business was organised and how maintenance arrangements were controlled. Any other way of reaching a decision would rightly be regarded as perverse, and would certainly be open to appeal.
I would remind your Lordships that there is a right of appeal in this matter so the licensing authority will obviously, so far as humanly possible, operate in such a way that his decisions will not be overturned on appeal. Obviously he will try to arrive at decisions which are more likely than not to be sustained on appeal. In short, the whole basis of the licensing authority's decision will be the information given by the applicant under Clause 62(3); without regard to that information no sensible decision could be made. In view of this, all that we are being asked to do is to add some superfluous wording to the Bill. There may be two points of view as to whether or not the Bill is the right length at the present time. I think there cannot be two points of view on the point that we ought not unnecessarily to make it longer than it is.
LORD HAWKE: I do not know whether my noble friend is satisfied with that explanation, but it goes some way to satisfy me. When I made some remarks about the academic qualifications of Her Majesty's Government I hope they were not taken to apply to Her Majesty's Ministers in this House, because in fact I think they are the exceptions. Indeed, if the Labour Party like to reconstruct the Cabinet I think that many of us would agree with: Shackleton, Prime Minister; Rowley, Foreign Minister and Shepherd, Chancellor of the Exchequer.
LORD BEAUMONT OF WHITLEY: We feel that this is a most sensible Amendment—not surprisingly since we put it forward in another place: sensible enough for it to have been taken over
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by the Conservative Party, and sensible enough for it to have been considered by the Government. However, I think the explanation we have had shows that it should not be forced to a Division, and I hope the noble Lord, Lord St. Oswald, will accept what the Minister has said.
LORD ST. OSWALD: I quite agree with the noble Lord, Lord Beaumont. The Minister's explanation was perfectly satisfactory, and I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD HUGHES: I beg to move Amendment No. 160.
Amendment moved—
Page 93, line 26, at end insert ("of the prescribed class ")—(Lord Hughes.)
On Question, Amendment agreed to.
LORD HUGHES: I beg to move Amendment No. 161.
Amendment moved—
Page 93, line 40, after ("licence") insert ("of the prescribed class")—(Lord Hughes.)
On Question, Amendment agreed to.
5.45 p.m.
TIIE DUKE OF ATHOLL TIIE DUKE OF ATHOLL moved Amendment No. 161A:
Page 94, line 19, leave out ("from an operating centre of his").
The noble Duke said: The only reason I have put down this Amendment is because I had great difficulty in understanding subsection (8) of this clause, and I thought that if I put down an Amendment we might get an explanation from the Minister as to exactly what it means. The first half of subsection (8) says:
"Subject to subsection (6) of this section, any person who uses an authorised vehicle from an operating centre of his for a purpose for which it cannot lawfully be used without the authority of an operator's licence.…"
I should have thought that any person who used an authorised vehicle from any centre for a purpose for which it could not lawfully be used was committing an offence, and that to say "from an operating centre of his" was introducing a dangerous concept.
What I should like to know is whether, if a transport manager transgresses in one operator's centre and is disqualified, it will affect the operator in his other transport centres, if he has a whole lot of them,

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or whether these words are included for some other purpose which I cannot quite understand. I beg to move.
LORD HAWKE: I think this conception springs from the idea that this Bill deals only with "A" and "B" licence matters. There must be flexibility for the people who own their own fleets, and from what the noble Lord, Lord Hughes, has said I believe there will be fresh thought on that subject. Possibly such fresh thought will throw light on the Amendment which my noble friend has just moved.
LORD HUGHES: If the noble Duke had difficulty in understanding the significance of these words I can assure him that he presented us with equal difficulty. We generally know what is behind an Amendment, but my advisers have given me two guesses at what the noble Duke might intend. They are what I might call a priority No. 1 reply and a priority No. 2 reply, arid then they went on to envisage the possibility that they had in fact not guessed right in either case and suggested a "waffling" line for me to take in those circumstances. I am happy to say that my advisers were on top of their form: their priority No. 1 is right.
May I say this? One might come to the conclusion reading the first four lines of subsection (8) in isolation, that the phrase is unnecessary, on the ground that it is impossible for an operator to use an authorised vehicle in a way requiring the authority of an operator's licence unless it be used from an operating centre of his. But in fact the purpose of the phrase is to prepare the way for the words,
"in relation to that operating centre"
which appear in paragraphs (a) and (b) of this subsection. The inclusion of the words it is sought to omit ensures that where an operator has more than one operating centre specified in his operator's licence it is an offence to use a vehicle only-from any of those centres which does not have the necessary licensed transport manager in post. If the Amendment were made, together with the consequential removal of the later words "in relation to that operating centre", it would he an offence to use a vehicle from any operating centre specified in a licence, even if a licensed manager was in post, whenever any other centre in that licence did not have the necessary manager. Such a
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result would be clearly undesirable. Before I resume my seat and say to the noble Duke that I hope he has the information he wanted and therefore realises that the Amendment is unnecessary, may I say that I was very interested in Lord Hawke's recasting of the Cabinet. I do not want him to prolong this in the debate, but perhaps in the Library afterwards he might indicate where he was placing me. I hope it was not on the Back Benches.
LORD HAWKE: It was Under-Secretary at the Foreign Office in charge of Scottish Affairs.
THE DUKE OF ATHOLL: Before withdrawing the Amendment, I should like to point out we have now been engaged on this Committee stage for 1 hour and 40 minutes, which is approximately 50 per cent. longer than the other House had for the consideration of the whole of Clause 65 and Schedule 9, so I think it is fair comment to say that we are giving more efficient and better consideration to these provisions than the other place were able to do, through no fault of their own. I was, of course, entirely satisfied by the explanation of the noble Lord, Lord Hughes. His advisers were very clever in anticipating what train of thought I was pursuing in putting down this Amendment, and I fully appreciate that there were consequential Amendments which had to be moved if this Amendment was to hold water. As I did not put down the consequential Amendments, I thought it would console the noble Lord to know that I was not intending to press this Amendment in any circumstances whatsoever even before we started the debate. Once again thanking the noble Lord for his explanation, which I found entirely satisfactory, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD HUGHES LORD HUGHES moved Amendment No. 162:
Page 94, line 32, at end insert—
("() In this section references to responsibility for the operation of any vehicles include (without prejudice to the generality of that expression) references to responsibility for securing that the drivers of the vehicles are properly licensed and comply with Part VI of this Act or, so long as those sections remain in force, sections 73 and 186 of the Act of 1960.")
The noble Lord said: Amendment No. 162 and the Amendment in Schedule 9, No. 169, are related. These are drafting Amendments designed to clarify and make more specific the responsibilities of the licensed transport manager. The need for them arises because the present phrase in Clause 65(1) and Schedule 9 describing these duties is,
"Ȧthe operation and maintenance of the authorised vehiclesȦ"
It is not entirely clear that this phrase would sufficiently clearly include the matters dealt with in the Amendments; namely, the licensing of drivers and the observance of the legal hours restrictions by drivers, which might be held to be not strictly connected with vehicles. There is no question of imposing additional duties upon transport managers; it was always intended that these matters should come within their field of responsibility. I beg to move.
On Question, Amendment agreed to.
Clause 65, as amended, agreed to.
Schedule 9 [Transport Managers' Licences]:
Loan HILTON OF UPTON: I beg to move Amendment No. 164.
Amendment moved—
Page 224, line 29, at end insert—
("Classes of licences
1. There shall be such classes of transport manager's licences as may be prescribed")—(Lord Hilton of Upton.)
On Question, Amendment agreed to.
LORD HUGHES LORD HUGHES moved Amendment No. 165:
Page 225, line 6, at end insert—
("() that he is a fit person to hold a transport manager's licence; ")
The noble Lord said: This Amendment corrects an error in Schedule 9. One of the requirements for getting a transport manager's licence will be that the applicant should be a fit person to hold that licence. But as the Bill stands, that requirement will apply only until formal qualifications for managers are introduced, since paragraph 1(4) of the Schedule deals only with the requirements to be met by applicants until such time as a test is prescribed.
Paragraph 1(3) deals with the requirements after the test is introduced; it does
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not, however, at the moment include a "fit person" requirement. This is clearly illogical, since the passing of a test and the gaining of a qualification is no guarantee of itself that a person is "fit" in the broader sense to hold a licence—for example, if he has a record free of relevant convictions, or has not had a manager's licence revoked or suspended previously. The wider requirement of "fitness" will also enable professional standards to be upheld amongst managers by the exclusion of those few persons who, though qualified, might have poor records in the industry. I beg to move.
On Question, Amendment agreed to.
LORD HILTON OF UPTON: I beg to move Amendment No. 166.
Amendment moved—
Page 225, line 8, after ("prescribed") insert ("in relation to the class of licence applied for").—(Lord Hilton of Upton.)
On Question, Amendment agreed to.
LORD HILTON OF UPTON: I beg to move Amendment No. 167.
Amendment moved—
Page 225, line 11, leave out from third ("the") to end of line 12 and insert ("test prescribed in relation to that class of licence or held a transport manager's licence of that class;"1—(Lord Hilton of Upton.)
On Question, Amendment agreed to.
LORD HILTON OF UPTON: I beg to move Amendment No. 168.
Amendment moved—
Page 225, line 16, leave out from ("regulations") to ("and") in line 21 and insert ("in relation to any class of licence for the test mentioned in paragraph (b) of the last foregoing sub-paragraph—
(a) that sub-paragraph shall have effect in relation to any application for a licence of that class as if the said paragraph (b) were omitted;")—(Lord Hilton of Upton.)
On Question, Amendment agreed to.
LORD HILTON OF UPTON: I beg to move Amendment No. 169.
Amendment moved—
Page 225, line 25, at end insert—
("() In this paragraph references to responsibility for the operation of any vehicles include (without prejudice to the generality of that expression) references to responsibility for securing that the drivers of the vehicles are properly licensed and comply with Part VI of this Act or, so long as those sections remain

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in force, sections 73 and 186 of the Act of 1960.")—(Lord Hilton of Upton.)
On Question, Amendment agreed to.
5.57 p.m.
LORD ST. OSWALD LORD ST. OSWALD moved Amendment No. 170:
Page 225, line 30, at end insert—
("The licensing authority shall be empowered to specify that the Transport Manager's Licence shall continue in force during the life-time of the holder, or for such shorter period as the Minister may by Regulation prescribe; differing periods may be specified to cover differing circumstances.")
The noble Lord said: I hope that the brevity with which I intend to present this Amendment will not deceive the Government as to the importance we give it. It involves the whole concept of the new profession of transport manager. As intended at present, this licence will last five years and come up for renewal at the end of every five years. Other professions once qualified do not have to present themselves again. Take the case of lawyers, for instance. In some periods of five years the law changes drastically; yet neither barristers nor solicitors are expected to prove their understanding of it anew. The same applies to medicine and various other professions. The transport industry will be changed a great deal by this Bill, it is true, but thereafter it is unlikely to change a great deal except in quite unforeseen circumstances.
Within the industry the basic skills of engineering and man-management do not alter a great deal. It is not as if this will enable a transport manager after five-year periods to be judged on his record, because if his record is bad to the extent of having violated any of the professional standards listed in Clause 69, which we are coming to, then his licence will be suspended or curtailed. It seems to me that this new profession, which requires men to undertake considerable responsibility and risk very heavy penalties will not attract the right holders unless it is to be given a certain status. This status seems to be undermined, to say the least, by the requirement to renew the licence every five years. What we are suggesting is that the normal transport manager's licence should be granted for life, but noble Lords will notice that differing periods may be specified to cover different circumstances. As I have said before, we
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do not yet know what sort of examination, what sort of qualification, h to be involved when tests are introduced. If the Minister wished to regard the automatic granting of licences up to the introduction of the test as being a special circumstance this Amendment would enable him to do so, making these initial licences subject to five years or even shorter duration. But for the licence proper taken after the test we believe this should be granted for life, and that is the paint of the Amendment. I beg to move.
6.0 p.m.
LORD HUGHES: This Amendment is identical to one which was tailed in another place but was not discussed because of the guillotine procedure. The noble Lord has stated fully and briefly the purposes that lie behind the Amendment. I can say quite definitely flat the principle is one with which I fully sympathise. The noble Lord will immediately know from my having said that that I cannot go much further. Once the tests envisaged in paragraph 1(3) have been introduced as the criteria for obtaining the manager's licence, there is to real reason for maintaining that the licence needs to be reissued every five years or so. But equally, we feel that it is not necessary to amend the Bill in the way suggested. The Minister has full power under paragraph 2(1) of Schedule 9 to prescribe any period other than five years for the duration of a licence. I want to make it quite clear that once qualifications have been introduced it could be appropriate for licences to be current for more than five years. It could e yen be quite appropriate for licences to be current for the lifetime of the holder.
This is a matter about which tin views of the industry will be welcomed. I should not like to say that the Minister will in due course make regulations saying that the licence will be held for the lifetime of the applicant, but there is at least a strong possibility that that could be so. I must say that I am impressed by the analogy which the noble Lord has drawn with the professional qualifications of other people: how, once they have attained a status as a result of adherence to particular standards or through tests that are laid down, that status is not subsequently withdrawn, no matter how much change may have taken place in the interval; and therefore although there

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is much change taking place in the transport industry there is no occasion for making an exception here.
I should like to discuss the way in which this Amendment has been moved, in view of the fact that because of the guillotine procedure my right honourable friend has not had an opportunity of listening to the arguments that have been put forward; and in inviting the noble Lord to withdraw the Amendment I will in due course and as speedily as possible, let him know what the result of the discussion is. The basic case is that what is proposed can in fact be done without its going into the Bill. What the noble Lord is much more interested in, in the alternative way, is whether it is likely to be done. This I would hope to be able to give him some information about.
LORD IIAWKE: As the Minister is going to listen to the argument sympathetically and carefully, may I suggest to him one analogy which I believe is more appropriate; namely, the analogy of the master's ticket? I believe that once a man is a master mariner he is always a master mariner. He has charge of a ship. If he is past his work, he does not get employment. If the transport manager is past his work no transport operator will risk employing him. I think it is quite safe to give him his ticket for life.
LORD HUGHES: That is a fair point. I should like to emphasise that one thing which will be most definitely in the Minister's mind is the way in which the licence is to be issued. That is something with which the industry will be much concerned; and in fact the Minister is almost leaning over backwards to make certain that he is not going to put anything in which prejudges this matter. But I should like just to re-emphasise the fact that we should regard as important the views expressed by the industry on that point. I will let the noble Lord, Lord St. Oswald, have the reactions of my right honourable friend to these suggestions.
LORD ST. HELENS: May I put one brief question? When the final decision on this matter of the duration of the licence has been made, will it come before Parliament in the same way as the qualifications of the transport manager?
LORD HUGHES: Yes; it would be in regulations.
LORD ST. HELENS: May I say just one thing that occurs to me? Quite apart from the merits of the Amendment, which have been so eloquently expressed from our own Front Bench, it is presumably greatly in the interests of any Government to have as long a period as possible, because that would reduce the bureaucratic staff which is necessary for "churning out" the licences.
LORD FARINGDON: I hope that my noble friend will not feel inclined to accept this Amendment. The analogy that has been suggested in regard to doctors and lawyers is a false one, because it is frequently suggested that refresher courses are desirable, and indeed necessary, just as I have maintained in your Lordships' House that at some stage some of us, including myself, will reach a certain age and ought to undergo tests in regard to driving vehicles. I hope that this particular Amendment will not receive favourable treatment from my noble friend.
LORD MERRIVALE: Will the Minister consider carefully what my noble friend Lord Hawke has said, because if he reads my remarks on Second Reading he will see that that suggestion was put forward at a meeting attended by various representative bodies, such as the Road Hauliers' Association, T.R.T.A., and others? I would urge on him that this question has been considered by the various bodies representing industry, and they have recommended the suggestion put forward by my noble friend Lord Hawke as being appropriate.
LORD ST. OSWALD: Those assurances coming from the noble Lord, Lord Hughes, are perfectly good enough for me. I have no intention of pressing this Amendment, even though my decision was almost sabotaged by the noble Lord, Lord Faringdon. The noble Lord, Lord Faringdon, has no better idea than I have of what are going to be the qualifications of a transport manager. In any case, I rest perfectly happily on the assurances of the noble Lord, Lord Hughes, and I beg to withdraw my Amendment.
Amendment, by leave, withdrawn.
6.8 p.m.
LORD NUGENT OF GUILDFORD LORD NUGENT OF GUILDFORD moved Amendment No. 172:
Page 225, line 44, at end insert ("has been responsible for serious mismanagement and")
The noble Lord said: I beg to move Amendment No. 172, and by leave of the Committee I should like to discuss with it Amendment No. 174. Both of these Amendments to Schedule 9 deal with transport managers' licences. What I am proposing is that at line 44 we should add the words:
"has been responsible for serious mismanagement and"
as a requirement before a transport manager loses his licence or has it suspended. The Schedule as now drafted reads thus:
"Subject to the provisions of this paragraph, any licensing authority may direct that a transport manager's licence be revoked or suspended on the ground that the holder of the licence—

(a) has been convicted of an offence specified in regulations,"

and so on. My Amendment would require that, apart from being "convicted of an offence specified in regulations" the transport manager should have been responsible for serious mismanagement as well as having been convicted of the technical offence.
Moving into this field of transport managers, I feel that we should he most careful to see that we do not make these punishments too draconian. We do not know what is going to be in the regulations. Therefore, of course, we do not know on what grounds the poor chap may lose his licence. What we do know is that if the transport manager loses his licence, or probably indeed if it is only suspended. he will lose his job so that the penalty for him is a pretty serious one. I should think that in the circumstances the traffic commissioners—who are very reasonable men—would interpret these regulations as reasonably as possible. I suggest that it is our duty, when we are responsible for putting a new Bill on the Statute Book, to see that the law is fair to start with, and not rely on the discretion of particular individuals who are to administer it.
Nor do I feel that it is enough—and I hope that the noble Lord does not have a brief which says that it is—that a transport manager can go to appeal. If the transport manager had his licence sus-
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pended or revoked and he felt he had been unfairly treated and went to appeal, I do not know how long this would take. It would probably be a month or two before his appeal was heard, during which time of course he would presumably be suspended. But what a harrying, worrying time for the wretched man while he is waiting to hear whether or no he is going to lose his job.
I am somewhat fortified in pressing this case on the noble Lord, Lord Hughes, because his White Paper at paragraph 49, which talks about the qualifications and the operation of the transport manager's licence, in discussing how the system will work in its disciplinary powers, says:
"In serious cases of mismanagement the position of the holder of the transport manager's licence in the organisation would be called in question; his own licence would be at risk unless he could show that he was not responsible."
The words I rely on are the words: "In serious cases of mismanagement". These are the words, it will be noted, that I have put into my Amendment. I think these are very reasonable words. I am sure that in practice nobody would consider taking away a transport manager's licence simply on a technical offence, and unless there was such a background as this I am sure his licence should not be taken away. I beg to move.
Loan HUGHES: The noble Lord, Lord Nugent of Guildford, has correctly quoted from paragraph 49 of the White Paper, The Transport of Freight, and I wish to confirm that it is still the Minister's policy that these powers of taking away, suspending, or revoking a licence would only be exercised in circumstances which would warrant this very serious step—I cannot quarrel with the way the noble Lord has put it—with the result of either temporarily or permanently taking away a manager's livelihood. The difficulty is that the addition of these words would not materially help the licensing authority to decide whether to take action in particular cases, and, secondly, in some cases the Amendment could cause practical difficulty.
If I could deal with the first point about not being a material help, it should be noted that paragraph 3 of Schedule 9 already limits the occasions on which a licensing authority can revoke

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or suspend a manager's licence to instances where the manager has been convicted of offences to be specified in regulations, or has been at least partially responsible for an order under Clause 69 revoking, suspending, or curtailing his employer's operator's licence. These conditions are themselves a safeguard against any licensing authority deciding to take action on a manager's licence without at least some prima facie reason for doing so. To try to circumscribe the authority's powers any further would be undesirable. What constitutes "serious mismanagement" must always be decided in the circumstances of individual cases. Licensing authorities, as responsible and experienced people, would only consider taking drastic action against a manager's licence where they thought the circumstances of a particular case were serious enough to warrant it; it is clear from the Minister's public statements hitherto that the Government would not expect such action to be taken except in serious cases.
I must say, although the noble Lord begged me not to, that there is the further safeguard that by paragraph 4 of the Schedule any manager whose licence is suspended or revoked has an appeal to the Transport Tribunal. I am told that under paragraph 3(5) of Schedule 9 the licensing authority can suspend the operation of his order revoking a transport manager's licence pending the outcome of such an appeal.
However, it is when we come to the second stage that the real objections, or the more important objections to the Amendment arise, and this is where it might, in fact, cause difficulty. I think the noble Lord, Lord Nugent of Guildford, would agree that the White Paper did not provide disciplinary action only in cases of serious mismanagement. It is quite possible that occasions will arise where the licensing authority would, quite properly, wish to revoke or suspend a manager's licence on grounds having nothing to do with the manager's conduct since the licence was granted. One situation would be where the licence-holder had made a false statement to obtain his licence with the intention, for example, of concealing past convictions which might have caused the licensing authority to doubt his fitness to hold a
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licence. A conviction for making such a false statement would undoubtedly be prescribed under paragraph 3(1)(a) of Schedule 9 as one of the offences for which a manager's licence could be revoked or suspended; in such a case, "serious mismanagement" would hardly be an appropriate matter for the licensing authority to consider.
Having said that, I wish to assure the House, however, that the Government are in complete sympathy with the motives lying behind the Amendment; namely, that this is an exceedingly serious step to be taken against a transport manager and should, in fact, be reserved only for serious offences, and it would be quite wrong for the licensing authority to do otherwise. I hope I have made it clear that by circumscribing them in this way we could prevent them from revoking a licence in circumstances where perhaps it ought never to have been granted, although nothing that had happened during the currency of the licence could possibly come under the description of "serious mismanagement".
LORD MITCHISON: It must be a very trying job to be a transport manager, and I hope that the Bill provides somewhere for what happens if he goes mad during the currency of his licence.
THE EARL OF SWINTON: That is provided for. The Minister has been so sympathetic and understanding about this that I wonder, as an old President of the Board of Trade, whether I might make the suggestion to him of the parallel of the master mariner, which he himself took and said was one of the cases which he would wish to follow. As one of my noble friends pointed out, quite rightly, once a master mariner has his master's certificate that certificate lasts his lifetime and is very much valued, although when he attains the age of Lord Mitchison or myself he would no doubt not be employed in that capacity by the wise shipowner. But the certificate lasts his lifetime, and I think I am right in saying that the terms—and of course it is not the President of the Board of Trade as in my days; it is the Minister of Transport who administers this—of the Statute laid down very clearly what were the grounds on which a master's certificate could be taken away. I hope that the Minister will consider looking at this

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matter to see whether, if that parallel is correct, it would not be wise to put into the Bill some provisions of the same sort in regard to a responsibility which is equal to that of the President of the Board of Trade and the Minister of Transport in regard to a master mariner's licence.
LORD BELSTEAD: When Amendment No. 162 was being explained by the noble Lord, Lord Hughes, I thought that the transport manager's responsibility, as set out in Schedule 9, had in some way been revoked or changed and that I had not listened closely enough, but it is apparent from what the noble Lord, Lord Hughes, has said that this is not so, that the wording is clear, and that Clause 69 operates in the case of the transport manager. That is what worries many of us in this Committee and many people in the country at large. My noble friend Lord Nugent has dealt fully with the fact that "serious cases of mismanagement" are the words which are used in the White Paper, and these words have now moved a long way to become a responsibility under Clause 69; and there is also a responsibility under Clauses 65 and 66.
When one looks at the variety of matters listed in subsection (4) of Clause 69 and finds that they include convictions in respect of vehicle maintenance, drivers' speeding and drivers' hours, and loading and licensing offences, it is surely not unreasonable to say that many people, inside and outside Parliament, will say to themselves, "Will the transport manager's licence be at risk in every case?" This is the sort of matter which was in the mind of the noble Earl, Lord Swinton, when he spoke a moment or two ago. Many people connected with road haulage in this country believe that if the operator were the only person to lose his licence in the way that Clause 69 lays down, it would be necessary to ensure that operators did their utmost to see that the transport managers were properly provided for, whereas in the Bill as at present drafted a bad operator may hide behind the responsibility of the transport manager.
This Amendment does not follow that line of thought, nor does it seek to alter the main purpose of this part of Schedule 9: that the onus of responsibility shall be squarely on the transport manager.
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I hope the Committee will forgive the repetition, but the Government seem to have changed their mind considerably between the publication of the White Paper and the drafting of the Bill. They have thereby created a dilemma, in that a transport manager's licence will be at risk for offences over which he may have no control, such as speeding, or the loading of a back-load when he is not there to see it. I hope that the noble Lord will agree with the addition of these words. The noble Lord, Lord Hughes, has already said they are not acceptable, but perhaps he would agree that it would be worth while looking at these words once again before the Government throw them out of the window.
LORD NUGENT OF GUILDFORD: The discussion is going fairly strongly against the noble Lord, despite the best arguments that he could put up. I should have thought that the case put by my noble friend Lord Swinton is the best way out. The master mariner position may well provide a precedent which would be helpful in seeing how to deal with the position of the transport manager. My noble friend Lord Belstead put the matter admirably when said that the Bill as drafted without any doubt makes the transport manager liable; either to lose his licence or to revocation or suspension on a technical offence—a technical offence specified either in Clause 69(4) or in the Regulations which we have not yet seen.
The White Paper is quite specific on this matter. It does not speak about other offences. It says that:
"In serious cases of mismanagement the position of the transport manager's licence in the organisation would be called in question. His own licence would be at risk unless he could show that he was not responsible."
That is stated quite specifically. Although I would not suggest that my words are correct—they seldom are, if they come from the Opposition!—I believe that words of this kind ought to appear in the Schedule. This point was not discussed in the other place at all, and it is very important to get it right. It is not good enough to say, "We will leave it to the discretion of the traffic commissioners." Excellent officials though they ale, that is not enough when we are laying down something as important as this. The noble Lord has been very accommodating up

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to date. I hope that he will say that he will take this matter back and discuss it with his right honourable friends, since we feel that it is essential to have this safeguard in the Bill.
LORD HUGHES: I do not think the noble Lord, Lord Nugent, is disputing the fact that his words would leave a possible loophole. I suggest that he is not disagreeing with the case which I put forward where a licence-holder gave false information or concealed information which would have resulted in his not getting a licence. That could not possibly be covered under the heading of "serious mismanagement". He may have managed the organisation during the period perfectly well, and yet if this Amendment were accepted the fact that he had got his licence under false pretences could not be dealt with. Obviously that is a situation which should be capable of being dealt with. I have dealt with the suitability of the Amendment. The Amendment is not acceptable for the reason that it would create difficulties under which it might not be possible to take away a licence from a man who ought not to have one. I am certain that is not the noble Lord's intention.
Having said that his Amendment cannot be accepted because of these defects, I am willing to look at the situation as to whether or not anything else can or ought to be put in. The noble Lord will appreciate that I am not in a position to give any undertaking about the inclusion of any words, but I shall be very happy to look at this matter, particularly when one bears in mind that what is at stake here is what ultimately will be a man's professional career. This ought to be safeguarded as fully as possible. It does not necessarily follow that, because the words of the Amendment are defective, it is impossible or unnecessary to make Amendments in another way. That is what I am prepared to look at.
LORD NUGENT OF GUILDFORD: I thank the noble Lord for the concession he has made. I acknowledge his point that a false statement by the transport manager in his application for a licence is a point outside the particular qualification which I wish to include. This is in Clause 69(1)(c). It is the only point which stands outside and on which the
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transport manager should be in danger if there is no qualification. But if the noble Lord is prepared to look at the general position to see how this general safeguard—which I think is the wish of noble Lords on all sides—can be put into the Schedule, on that undertaking I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD HILTON OF UPTON: I beg to move Amendment No. 175.
Amendment moved—
Page 226, line 13, after ("the") insert ("appropriate").—(Lord Hilton of Upton.)
On Question, Amendment agreed to.
LORD HILTON OF UPTON: I beg to move Amendment No. 176.
Amendment moved—
Page 226, line 14, leave out ("a") and insert ("any, or any specified class of").—(Lord Hilton of Upton.)
On Question, Amendment agreed to.
LORD HILTON OF UPTON: I beg to move Amendment No. 177.
Amendment moved—
Page 226, line 17, after ("licence") insert ("or, as the case may be, no such licence of the specified class").—(Lord Hilton of Upton.)
On Question, Amendment agreed to.
6.30 p.m.
LORD HUGHES LORD HUGHES moved Amendment No. 178:
Page 226, line 26, leave out ("public") and insert ("an").
The noble Lord said: Amendments Nos. 178, 179. 194 and 195 are all linked Amendments, and I think the Committee will find them acceptable. The effect of these Amendments will be to permit any party interested in an application for either an operator's licence or a special authorisition to request a hearing in camera before a licensing authority, or, on appeal, before the Transport Tribunal. It would, however, remain in the discretion of the licensing authorities or the Tribunal, as the case may be, to determine in the light of the particular circumstances whether it would be right to grant the request.
The Amendments are designed to give effect to undertakings given by the Government in another place. Both the Opposition and the spokesman for the Liberal Party had represented that, in

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particular, Clause 62(4), in relation to operator's licences, and Clause 74(5), in relation to special authorisations, might require firms, particularly those wishing to carry goods in their own vehicles, to disclose financial and commercial information which might be of value to their competitors. The Government recognise the force of this argument; and that is why these Amendments are now being proposed.
Amendments 178 and 194, with which are also linked Amendments 206, 210 and 220, remove the requirement that all inquiries shall be held in public; Amendments 179, 195 and 211 are merely consequential drafting improvements. The first new subsection of Amendment 221, prescribes that, except where the regulations governing the conduct of cases before licensing authorities provide otherwise, inquiries shall be held in public. It will therefore be possible to make regulations permitting licensing authorities to hold hearings in camera if they consider it appropriate. The Transport Tribunal will he able to make a similar provision by amending their Rules of Procedure. The advice of the Council on Tribunals and the Lord Chancellor's Office, was that it would be preferable to provide for hearings in camera by regulations or procedural rules, rather than by a substantive provision in the Bill itself.
Finally, the second new subsection of Amendment 221 strengthens the policy still further by making it an offence, under certain circumstances, to disclose information provided by a firm during a hearing in camera, notably if the firm has not given its express permission for this. I beg to move.
LORD NUGENT OF GUILDFORD: I thank the noble Lord for explaining the purport of this string of Amendments. I acknowledge that they meet the undertakings given in another place, in particular with regard to whether or not certain types of application should be heard in public. The structure that he has here devised entirely fulfils the undertakings given, and I thank the noble Lord for putting this into the Bill.
On Question, Amendment agreed to.
LORD HUGHES: I beg to move Amendment 179.
Amendment moved—
Page 226, line 27, leave out ("hold such an inquiry") and insert ("do so").—(Lord Hughes.)
On Question, Amendment agreed to.
Loan HUGHES Loan HUGHES moved Amendment No. 180:
Page 226, line 32, leave out ("Minister") and insert ("Transport Tribunal").
The noble Lord said: This Amendment is the first of a very long series of 25. They are interrelated and are all necessary to implement the undertaking given by my honourable friend the Minister of State during the Commons Report stage, that Amendments would be tabled in your Lordships' House to direct all appeals connected with both quality and quantity licensing to the Transport Tribunal. This arrangement replaces that at present in the Bill under which appeals concerning operators' and transport managers' licences would be decided by the Minister, along with disciplinary appeals connected with special authorisations, while other appeals corcerning special authorisations would lie to the Transport Tribunal.
The somewhat forbidding nature of this list of Amendments is unavcidable; such a change has consequences for many clauses and Schedules. Indeed, my honourable friend the Minister of Stale, in explaining why the Government could accept the principle but not the substance of the Opposition's Amendments in the Commons, said:
"I know that the honourable Gentleman will appreciate that many consequential Amendments, which naturally he has not been able to devise, will be required if this is accepted." —[OFFICIAL REPORT, Commons, 29/5/68, col. 1747.]
Many of the Amendments, however, involve no more than a straightforward substitution of "Transport Tribunal" for "Minister" in the appropriate places. I beg to move.
LORD NUGENT OF GUILDFORD: Again, I should like to thank the noble Lord, Lord Hughes, for introducing this set of Amendments. The quite doughty arguments in another place, both from our Benches and from Liberal Benches, that the Transport Tribunal would be a very much better court of appeal than the Minister, have prevailed and I am

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duly grateful to the noble Lord for this Amendment to the Bill.
On Question, Amendment agreed to.
LORD HUGHES: I beg to move Amendment No. 181.
Amendment moved—
Page 226, line 36, leave out first ("Minister") and insert ("tribunal").—(Lord Hughes.)
On Question, Amendment agreed to.
LORD HUGHES: I beg to move Amendment No. 182.
Amendment moved—
Page 226, line 36, leave out ("Minister shall give his") and insert ("tribunal shall give its").—(Lord Hughes.)
On Question, Amendment agreed to.
LORD HUGHES: I beg to move Amendment No. 183.
Amendment moved—
Page 226, line 45, leave out ("Minister") and insert ("Transport Tribunal").—(Lord Hughes.)
On Question, Amendment agreed to.
LORD HUGHES: I beg to move Amendment No. 184.
Amendment moved—
Page 226, line 46, leave out sub-paragraph (2).—(Lord Hughes.)
On Question, Amendment agreed to.
LORD HILTON OF UPTON: I beg to move Amendment No. 185.
Amendment moved—
Page 227, line 29, after ("licence") insert ("of the same class").—(Lord Hilton of Upton.)
On Question, Amendment agreed to.
Schedule 9, as amended, agreed to.
Clause 66 agreed to.
Clause 67 [Duration of operators' licences and grant of interim licences]:
6.37 p.m.
LORD ST. OSWALD LORD ST. OSWALD moved Amendment No. 186.
Page 95, line 15, leave out ("shorter") and insert ("longer").
The noble Lord said: The chiefly offending words which we seek to correct and replace in these Amendments (and I am discussing Nos. 186, 187 and 188, if that is for the convenience of the Committee) are to be found in subsection
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(3)(c) of Clause 67 which I shall read, and I hope that to-day is the last that we or anyone else will see of them. The passage relates to the duration of an operator's licence, and directs that the period of that licence may be shortened—and I now quote the words which certainly should never have been put in:
"if the licensing authority is of opinion that such a course is desirable in order to arrange a suitable and convenient programme of work for the licensing authority."
We quite appreciate that at certain times, and in particular initially, the licensing authority may be overloaded with work, through no fault of its own, but equally, not through the fault of the applicants for licences or for renewal. It really is intolerable, in our view, that to suit the convenience of the authority the operator's licence may be shortened, probably to his own great inconvenience. The operator is a man who has put money —perhaps a good deal of money —and experience—perhaps a lifetime of experience—into his business. Here is yet another case reminiscent of my stricture on Clause 61, in my Amendment No. 149, of extra work being created by the central Government and being shifted by officialdom on to the private citizen rather than being borne by Government servants.
In this instance, the convenience of the licensing authority would be just as well served by lengthening the period of the licence as by shortening it, and that is what we propose in this small but important group of Amendments. By accepting them the Government will render relations between licensing authorities and applicants in the industry far easier and more harmonious. I hope that they will see us, also, as doing them a good turn. I beg to move.
LORD BELSTEAD: Perhaps I might add a word to what the noble Lord, Lord St. Oswald, has said, on a slightly different point. We on this side of the Committee realise of course that the circumstances of an operator may change over the years, may be for the worse, but I would submit that Clause 66 can take care of this. By Clause 66(1)(c), the licensing authority can require to be notified of just about everything under the sun, so far as I can make out. I should not have thought there was any enormous point of principle involved

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here. With the numerous safeguards which will ensure that an operator not only obtains but continues to hold a licence, I should have thought that this was a reasonable Amendment.
6.41 p.m.
LORD HUGHES: The noble Lord, Lord Belstead. supports Amendments from the other side in such a pleasing and convincing way that I wish he could lend his support to an Amendment which I could accept. Up to the present he has not yet done so. I almost feel guilty in saying "No" to Amendments which he is supporting. I very much sympathise with the point of view which is expressed. But that is not to say that I am putting this forward unwillingly. I am fully in agreement with what is in my brief on this matter when I say that we consider it is not desirable that a licence should last for longer than five years. It is necessary to ensure that an operator's standards are kept up, and to do this the licensing authority needs an opportunity to review his whole performance at regular intervals. The renewal of his licence presents this opportunity, and my right honourable friend the Minister is quite firmly of the opinion that five years is the maximum time that can be contemplated if such a review is to have any meaning at all.
The operator whose standards are reasonable has nothing to fear from the need to renew his licence, whether it is every five years or every five months. The time and trouble involved will be minimal—certainly less than the difficulties and delays which could be caused if the licensing authority were unable to spread its workload evenly by the use of this power. Apart from the transitional period at the start of the new licensing system, it is unlikely that the power will be used often—if, indeed, it is used at all. It is in arty case similar to a provision in respect of the existing carriers' licensing system, in Regulation 25 of the Goods Vehicles (Licences and Prohibitions) Regulations 1960, which has not given rise in the past to any difficulties or complaints. Being able, as I am, to stand on what noble Lords opposite, at least, must accept as a respectable precedent—something done in 1960—I hope they will not find it necessary to press these Amendments, because I can assure
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them that we are firmly wedded to the opinion that five years is the maximum period that should go by without a review taking place.
LORD BEAUMONT OF WHITLEY: I think it is a pity that the harmonious atmosphere which has existed so far, with much cooing of doves, should come to an end at this particular moment. We on these Benches, at any rate, cannot be expected necessarily to approve of what was done in 1960; but whether it was done in 1960 or not, we maintain that what is proposed in the Bill is bad. I agree that it almost certainly will not happen very often after the original period, but why should it happen during the original period? I think this should be done in this particular way to suit the convenience of the operators rather than that of the licensing authorities. In most cases, presumably, it would not mean an extension of more than one or two years. I cannot see why five years is such a sacred period, and I hope that this Amendment will be pressed.
LORD HAWKE: I think this is another case where the Bill has clearly mixed up two totally different classes of vehicles and tried to treat them in the same way. I think that the noble Lord, in his reply, and in much of what has been said, was thinking he was dealing with the "A" and "B" licences of road hauliers who ply for hire; but, as I pointed out earlier, the greater number of vehicles to be regulated under this Bill are the ones which are at the present moment operated under "C" licences—vehicles which are the property of the firms and are used for their own deliveries. The service industries, without which, in spite of the opinion of some of the Government's economic advisers, this country cannot exist, would be very hard hit if they had to come forward to ask for operators' licences at frequent intervals when their very existence depends on getting them. Many of them are public cornpanies. What sort of support are they going to receive for their stocks and shares if it is realised that every five years they can be put out of action completely because somebody says they are not to have another operator's licence?
The analogy which the noble Lord drew of 1960, I think it was, concerned vehicle licensing. The service industry

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could perfectly well exist if some of its vehicles were refused licences, but if it were refused an operator's licence it would have to close down its entire organisation. I think that this clause needs reconsideration from that point of view. It is quite impossible to apply the same set of rules to two totally different types of vehicle.
LORD MITCHISON: I should have thought this was a case where a bit of practice was worth a great deal of theory, and if a similar provision was introduced in 1960 and has caused no serious inconvenience since then I should personally require a good deal of convincing that there was much wrong with it. I do not, of course, rely on the fact that it was introduced by a Tory Government: that does not necessarily make it any better. On the other hand, I feel that noble Lords opposite ought not to be zealous to prove that something introduced by their Government could not possibly work. Is this not the point? Surely the provision for a five-year period and, in certain cases, a shorter period, stipulated at the time when the licence is granted, is not unreasonable. It is suggested that the shorter period ought not to be provided for if that is not desirable for the proper working of the licensing authority. Does that not come to this: that if the licensing authority cannot meet the requirements of its programme (that is the word used in the subsection) then it is being overworked. Looking at Clause 59, I notice that it is perfectly possible to have more than one licensing authority in the area. It seems to me, therefore, that what noble Lords opposite are asking for, as an alternative to this provision, is an increase in bureaucracy, the numbers of which they occasionally criticise.
LORD WAKEFIELD OF KENDAL: I should like to say a word or two in amplification of what my noble friend Lord Hawke has just said. Surely consideration must be given to investment in any business, and if there has to be a renewal of equipment, and things of that kind, then, with a licence coming to an end and possibly not being renewed, surely there must be grave anxiety as to whether that equipment ought to be renewed or not, even though it may be desirable, in the interests of efficiency, to renew it. Again, is this not another ex-
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ample of the Government's saying that there ought to be an increase in productivity yet introducing something which is most restrictive to that very end—where, although new equipment ought to be introduced and modernisation should take place, because of the refusal of an application for the renewal of a licence, that modernisation may not take place? That must be less efficient, less productive—which is again contrary to what the Government are always urging upon industry. I hope that the Government will take another look at this and give support to this Amendment.
LORD LINDGREN: It appears that we are going off at a tangent. My noble friend Lord Hughes said that the good operator had nothing to fear. Surely that is so. The operator's licence is likely to be revoked only if there has been bad maintenance of vehicles, if there have been convictions against him in respect of evasion of the regulations on drivers' working hours or because of some other breach of the law in regard to the operation of his vehicles. Therefore, so long as the operator is operating properly, any licence that he holds will be continued. Are noble Lords opposite arguing that the bad operators—and there are some— whose vehicles are below standard: who, when attention is called to them, do not even take notice of certificates that are issued against their vehicles; who connive with their drivers to work excessive hours and who are a danger to the public, should not have their licences revoked? All we are talking about are the cases where there is reason for revoking a licence.
LORD HAWKE: The noble Lord is confusing the question of a licence to carry on a business at all with that of a licence for a vehicle. It is right that the kind of vehicles he mentioned should be run off the road—in which case the firm would have to buy a new fleet. That is fair. But to say that a man is not entitled to run a business at all because he may have slipped up in the operation of his fleet is, in my view, not fair.
LORD HUGHES: No one is going to suggest that that should be done. It is ridiculous to import arguments like that into the matter. I referred to what took place in 1960. My noble friend Lord Lindgren did not think that this was

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necessarily a good thing. I said that it ought to commend itself, at least to noble Lords opposite—in fact, it also commends itself to me. I have never worked on the basis that everything that happened before October, 1964, was wrong. There was a lot, that I did not like during those 13 years; but I have never suggested that everything was wrong. May I point out the situation that this seeks to deal with? On the appointed day for Clause 60—that is, the day on which quality licensing will come into force— all existing operators will have to be issued with operators' licences, which will be dealt with under the special transitional provisions of Clause 93(1). If the powers of the paragraph which is now being discussed were not available, all those licences would have a currency period of five years and would therefore be due for renewal in a mass five years from the appointed day. This situation would result in the licensing authorities having to deal with some 175,000 licence applications once every five years and with very few in the intervening period. This would be a nonsense.
What we are doing is to make it possible for the initial issue of operators' licences to be spread as evenly as possible by granting licences for three, four or five years. Licence holders cannot with justification complain that this arrangement will be particularly hard on those who get licences for only three years or four years in comparison with those who get the full five-year term, since all operators' licences issued under transitional arrangements will be largely a paper transaction which will put the operators concerned to little if any trouble at all. This seems to me to be
such an obvious administrative arrangement that I cannot see that if noble Lords opposite had the job of implementing this system they would put themselves and the licensing authorities to the bother of working in such a way that everything had to be done once every five years. After all, there have been many other changes made in connection with renewals of the driver's licence, the licensing of cars and so on, all with the purpose of attempting to spread the work load as evenly as possible over a period. This is so as to avoid a situation in which people are "worked to death" for a few weeks of one year in every five, with little or nothing to do in the interval. That does not seem to me to make sense.
LORD ST. OSWALD: I am sorry that what seems obvious to the noble Lord, Lord Hughes, is the opposite of what seems obvious to us. Neither he nor the noble Lord, Lord Mitchison, seem to have hoisted in our point that the licensing authority may be equally well relieved by an extended licence as by a shortened licence. That is what we think. The noble Lord, Lord Lindgren, was arguing a completely different point and I will not join issue with him. Without breaching the harmony which exists, and which was described by the noble Lord, Lord Beaumont, I must press this Amendment.
7.1 p.m.
On Question; Whether the said Amendment (No. 186) shall be agreed to?
Their Lordships divided: Contents, 100; Not-Contents, 43.

CONTENTS

Abinger, L.

Bolton, L.

Drumalbyn, L.

Ailwyn, L.

Boston, L.

Effingham, E.

Airedale, L.

Brooke of Cumnor, L.

Falkland, V.

Albemarle, E.

Brooke of Ystradfellte, Bs.

Ferrier, L.

Allerton, L.

Burton, L.

Fisher, L.

Alport, L.

Carrington, L.

Foot, L.

Amherst of Hackney, L.

Coleraine, L.

Gage, V.

Arran, E.

Colgrain, L.

Gladwyn, L.

Ashbourne, L.

Conesford, L.

Goschen, V. [Teller.]

Audley, Bs.

Cottesloe, L.

Greenway, L.

Balerno, L.

Craigavon, V.

Gridley, L.

Barnby, L.

Craigmyle, L.

Hawke, L.

Barrington, V.

Cranbrook, E.

Headfort, M.

Beaumont of Whitley, L.

Crathorne, L.

Horsbrugh, Bs.

Belstead, L.

Cullen of Ashbourne, L.

Ilford, L.

Berkeley, Bs.

Daventry, V.

Inglewood, L.

Bledisloe, V.

Denham, L. [Teller.]

Jellicoe, E.

Jessel, L.

Mottistone, L.

Salisbury, M.

Kilmany, L.

Mowbray and Stourton, L.

Sandford, L.

Kilmarnock, L.

Newton, L.

Savile, L.

Lambert, V.

Nugent of Guildford L.

Sempill, Ly.

Lansdowne, M.

Nunburnholme, L.

Sinclaire of Cleeve, L.

Latymer, L.

Oakshott, L.

Somers, L.

Lindsey and Abingdon, E.

Powis, E.

Strange of Knokin, Bs.

Lothian, M.

Rankeillour, L.

Swinton, E.

MacAndrew, L.

Rathcavan, L.

Teviot, L.

Macpherson of Drumochter, L.

Rochdale, V.

Thurlow, L.

Massereene and Ferrard V.

Rockley, L.

Vivian, L.

Merrivale, L.

Sackville, L.

Wakefield of Kendal, L

Mersey, V.

St. Aldwyn, E.

Windlesham, L.

Mills, V.

St. Helens, L.

Wolverton, L.

Milverton, L.

St. Just, L.

Wrottesley, L.

Molson, L.

St. Oswald, L.

Wynford, L.

Monckton of Brenchley, V.

NOT-CONTENTS

Archibald, L.

Hilton of Upton, L. [Teller.]

Phillips, Bs.

Arwyn, L.

Hughes, L.

Plummer, Bs.

Beswick, L.

Iddesleigh, E.

Raglan, L.

Blyton, L.

Kennet, L.

Rhodes, I.

Bowles, L. [Teller.]

Kilbracken, L.

Ritchie-Calder, L.

Burden, L.

Kirkwood, L.

Rowley, L.

Champion, L.

Leatherland, L.

Serota, Bs.

Collison, L.

Lindgren, L.

Shepherd, L.

Crook, L.

Llewelyn-Davies of Hastoe, Bs.

Sorensen, L.

Gaitskell, Bs.

Lloyd of Hampstead, L.

Stonham, L.

Gardiner, L. (L. Chancellor)

Longford, E.

Strabolgi, L.

Geddes of Epsom, L.

McLeavy, L.

Walston, L.

Granville of Eye, L.

Mitchison, L.

Wells-Pestell, L.

Henderson, L.

Peddie, L.

Winterbottom, L.

Hill of Wivenhoe, L.

On Question. Amendments agreed to.

Resolved in the affirmative, and Amendment agreed to accordingly.
LORD ST. OSWALD: Amendment No. 187 is consequential. I beg to move.
Amendment moved—
Page 95, line 25, leave out from ("made") to end of line 29.—[Lord St. Oswald.]
LORD NUGENT OF GUILDFORD LORD NUGENT OF GUILDFORD moved Amendment No. 188:
Page 95, line 29, at end insert—
("() If in the opinion of the licensing authority it will assist his administration he may extend the duration of the licence.").
The noble Lord said: This Amendment is consequential. I beg to move.
Clause 67, as amended, agreed to.
Clause 68 [Variation of operators' licences]:
7.10 p.m.
LORD NUGENT OF GUILDFORD LORD NUGENT OF GUILDFORD moved Amendment No. 188A:
Page 97, line 13, at end insert—
(" () If an applicant under this section so requests, the licensing authority may, pending
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the determination of the application, given an interim direction under this section, that is to say, a direction expressed to continue in force only until the application, and any appeal arising out of it, have been disposed of; and a request for such a direction shall not for the purposes of subsection (4) of this section be treated as an application under this section.")
The noble Lord said: This is a small textual Amendment to Clause 68, which provides for the variation of operators' licences. The position with regard to issuing a quality licence under Clause 66(5) is that the licensing authority can issue a temporary licence to tide an applicant over until the application is determined and any appeal disposed of. This is obviously a sensible, practical arrangement. It helps the applicant who might otherwise have some time to wait, and so long as the licensing authority are satisfied that they are almost certain to give a licence, they should not have any objection to granting a temporary one.
But here in the machinery for the variation of licences there is no such flexibility. The traffic commissioner has no power under Clause 68 to give a temporary variation which would tide over the applicant until the matter can be determined. Clearly it is most desirable that

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the flexibility which is granted already for a new licence should be similarly provided for an applicant for variation. This somewhat long paragraph does this. It will make a small but material improvement to the Bill. I beg to move.
LORD HUGHES: In respect of the last Amendment the noble Lord, Lord Beaumont of Whitley, said it was a pity that the period of billing and cooing had come to an end. Apparently he assumed that we had reached the end of that period when we arrived at the time for a Division, as if our joint labours were to be considered complete and as if we were henceforth embarking on a stage of complete disagreement. That is not so. I can find nothing wrong with this Amendment and therefore I am prepared to accept it.
Clause 68, as amended, agreed to.
Clause 69 [Revocation, suspension and curtailment of operators' licence]:
7.16 p.m.
LORD NUGENT OF GUILDFORD LORD NUGENT OF GUILDFORD moved Amendment No. 189A:
Page 97, line 32, at end insert—
(" (iii) but in relation to paragraphs (a), (f), (g) and (h) of subsection (4) of this section a licensing authority shall not suspend, revoke or curtail an operator's licence unless his overall record is such as to give rise to serious public danger.")
The noble Lord said: I beg to move this Amendment, which is of rather greater weight than the last, and I can but hope that the noble Lord will be equally receptive to it. Clause 69 is primarily concerned with the revocation, suspension and curtailment of operators' licences and therefore is of great importance to all operators. As the clause is drafted, a licence can be revoked or suspended rather easily in my judgment. The clause sets out a number of offences, conviction on any of which can result in a licence being revoked or suspended. Some of them are substantial, but under subsection (4)(a) to (h) are listed such things as exceeding the speed limit, overloading vehicles and other technical offences. In the management of a haulage business obviously technical errors can and will occur. They are inevitable because of the carelessness of employees. While a persistent occurrence would probably be due to weak or bad management,
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the odd case probably would not. The noble Lord kindly reminded us earlier that there are 175,000 industrialists and traders up and down the country who would be operators and who make up the trading life of a country. Clearly it could. not be the Government's intention that there should be a stream of suspensions and revocations going on, because obviously that would hold up the whole trading life of the country.
What is wanted here by the Government, I imagine, and certainly what we want, is a new system that will make it possible to catch out the persistent bad operator who either as a matter of cheap trading policy or just through plain carelessness exceeds speed limits and the like in order to get an advantage over his competitors in other words a man whose overall record is such as to give rise to serious danger. This is the effect of the Amendment that my noble friends and I have put on the Marshalled Li3t: that the licence shall not be revoked, suspended or curtailed in connection with any of the offences set out in subsection (4) —these are the technical offences set out in paragraphs (a) to (f), and (h)—and that in addition his overall record must be such as to give rise to serious public danger.
I cannot get as much help out of the White Paper for this Amendment as I could last time, hut I can get some. Paragraph 49 of the White Paper, The Transport of Freight says this with regard to the operator's licence:
"The new system will provide strong disciplinary powers against a defaulting operator. First, whenever there has been a breach of the law relating to vehicle operation, the licensing authority will be required to consider suspending or removing from the quality licence one or more of the operator's lorries, or suspending or revoking the licence altogether."
Here is a sentence which I think has some cogency in this particular context:
"In considering this question the licensing authority will also take into account any previous breaches of the law relating to vehicle operation committed by the operator."
This seems to me clearly to imply that the traffic commissioner is not going to suspend or revoke the licence on the first breach of any of these regulations. He will look at the record to see how this operator has been doing, and if he has been a persistently careless operator then, clearly, the traffic commissioner will, and

411
should, consider suspending or revoking the licence. The words that my noble friends and I are advocating putting in the Bill would make sure that the traffic commissioner would take into account the overall position in considering any one of these single offences. I beg to move.
7.24 p.m.
LORD HUGHES: A similar Amendment to this was discussed, though not at length, in another place on May 29, and I hope that noble Lords opposite will follow the example of their friends in another place, because there the Amendment was withdrawn after debate. When my honourable friend the Minister of State asked the other place not to accept the Amendment he said this:
"If this qualification were inserted, it would be interpreted as more or less the repetition of the present law, and we know that disqualification under present law has been little used in spite of the considerable increase in the numbers of defective vehicles on the road.
"For these reasons—because we want to get a serious strengthening of the law in this respect, because we trust the licensing authorities to use their power justly, because there is a system of appeals against any penalty handed out by a licensing authority—I ask the House to resist the Amendment."— [OFFICIAL REPORT, Commons, 29 / 5 / 68, col. 1740.]
That is the essence of the case against the Amendment. It is an essential feature of quality licensing that the power of a licensing authority to deprive an operator temporarily or permanently of his licence, or in less serious cases of the temporary use of some of his vehicles, is the most effective practicable means of raising standards of goods vehicle operation. The present Act is defective in this respect. The licensing authority has, it is true, power to revoke, suspend or curtail licences, but this power is hedged around with restrictions. For instance, he cannot direct that a carrier's licence be revoked if the operator is convicted of failing to maintain his vehicles properly or if he had been prohibited from using one or more vehicles found to be defective unless—to quote Section 178 of the Act:
"he is satisfied that owing to the frequency of convictions or prohibitions, or the wilfulness of the act or omission leading to the conviction or prohibition in question or the danger to the public involved in that act or omission",
412
he should give the direction. Yet roadside checks have found one goods vehicle in ten to be so unsafe as to merit an immediate prohibition on its further use. The reason 10 per cent. of vehicles on the road are in that condition is that the present law is so defective that they cannot be got off the roads. This is the situation that we want to bring to an end. In another place it was accepted that although these were wide powers it was essential that they should be there.
Clause 69 of the Bill gives the licensing authorities much wider powers. For example, in subsection (3) it requires licensing authorities to consider whether to give a direction revoking, suspending or curtailing a licence whenever a conviction or prohibition under subsection (4) is brought to their notice. The Amendment would, if carried, mean that the licensing authority could give a direction in respect of certain convictions and prohibitions only if the operator's record gave rise to "serious public danger". In effect, the licensing authority would be virtually unable to suspend even one vehicle from an operator's licence unless there was evidence of repeated and persistent misdemeanours over a period of years. The Amendment could in fact go a long way to perpetuating the inadequacies of the present Act, with deplorably dangerous results on the roads. I cannot believe for one moment that the noble Lord, Lord Nugent of Guildford, intends to make it easy for even one of these 10 per cent. of dangerous vehicles to be allowed on the road for one moment longer than is necessary.
LORD BELSTEAD: I should like to say—and I know my noble friend Lord Nugent would be the first to say this—that we on this side do not want in any way to be interpreted as supporting the use of dangerous vehicles on the roads. While not wishing to give the impression that I am going bald-headed against what the noble Lord, Lord Hughes, has said, I think it is fair to point out that the 1960 Act says that the licence could be removed if the convictions were of such frequency or of such a wilful nature, or such danger to the public (these were alternatives), that the licensing authority felt bound to take action.

413
In this Amendment we are not seeking to put these very wide alternatives; we are simply referring to the public danger. As my noble friend Lord Nugent pointed out, we have just criticised three subsections which we felt were minor ones. The only other thing I want to add—and I say it with some timidity because one is so liable to be misinterpreted—is that I have a figure from an earlier year of 38.9 per cent. of defective vehicles in spot checks. These are desperately worrying figures. The point put in another place--and I do not think we should disregard it—is that in these spot checks the vehicles stopped are very often those vehicles which the authorities think are defective. We do not want people to believe that we in Parliament think that people who use the roads are criminals—we do not. At the same time, I am very anxious that no one should be able to misinterpret what has been said from the Benches behind my noble friend Lord Nugent and think that we are in favour of danger on the road.
LORD HUGHES: It was because of the fact that I could not possibly believe that that was the intention of Lord Nugent, or of any noble Lords on the opposite Bench, that I went out of my way to draw the attention of your Lordships to the fact that in another place, after discussion, the Amendment was withdrawn. As regards the figures, I do not think it is right, through use of them, to attempt to create any false impressions. But there cannot be any false impression about these figures. From the years 1962-63 to 1966-67 615,834 vehicles were examined; 59,128 of these were in so bad a condition that they were immediately prohibited from remaining on the roads; and a further 197,673 were the subject of delayed prohibitions. In a situation where 256,000 out of 615,000 vehicles were found to be defective in one way or another, and 59,000 faults were of such a major nature, it is obvious that the law as it stands is not enough.
It is therefore very fitting that in this matter there should be no doubt at all about the unanimity of the Committee in seeking to take, I think I am almost justified in saying, the severest possible steps to remedy the situation, in the knowledge that the wide range of power
414
which is given to the licensing authority enables them to make the punishment fit the crime. It is not the case that they are going to deprive everybody of his licence and put all their vehicles off the road. It does not follow that they will put any vehicles off the road; some of them may not. But it is important that in a case where either a temporary or a permanent removal of vehicles from the road is necessary there should be no doubt at all about the licensing authority's power.
It is not that we want vehicles put off the road. We want as speedily as possible—and I am certain that noble Lords opposite will be with me in this--at the earliest opportunity people to be made so conscious of their responsibilities that if spot checks are undertaken they will reveal a completely different situation. We do not want to have people put off the road; we want to make certain that people are so maintaining their vehicles that their vehicles are safe and in no danger of having any preventive action taken.
LORD BEAUMONT OF WHITLEY: I approached this Amendment thinking that I should be able to support the noble Lord, Lord Nugent of Guildford. I still think that the minimum level of reasons why a person's licence can be taken away is too low and that there should be better safeguards, but I am largely persuaded by the noble Lord, Lord Hughes, that if we passed this Amendment it would make the very necessary discipline for safety far too weak. I am fortified in not supporting this Amendment by the fact that it is now to be a transport tribunal which will be judging the appeals. I hope the Government will look to see whether there is no other way in which they car. phrase this provision, so as to make it less likely for a person to be deprived of a licence for a technical offence. I trust that the noble Lord, Lord Nugent of Guildford, will not seek to press this Amendment.
LORD NUGENT OF GUILDFORD: I always know when the noble Lord, Lord Hughes, thinks that he is on a better case by the tone with which he addresses himself to his reply. I agree that he has a much better case this time than he had on the transport managers,

415
and he quite rightly says that this Amendment was withdrawn in another place. But let me remind him that it had the briefest discussion there. It had only about 15 minutes consideration on Report and, so far as I know, none at all on Committee. So, considering its great importance, it had the minimum discussion it could possibly have. However, I have to accept—and all of us who are familiar with the position do—that the 1960 Act has not proved as effective as we should wish it to be. The Amendment that my noble friends and I have proposed does not go anything like as wide as subsections (3) and (4) of Section 178 of the 1960 Act, and it is related to only three out of eight of the paragraphs of subsection (4) of Clause 69 of this Bill; so we really have confined to a pretty narrow scope this qualification which we feel should be inserted. We have left all the offences referred to in subsection (1) of Clause 69, and five of the offences in subsection (4).
We recognise that the law needs strengthening and that the traffic commissioner should have greater powers than he has in order to deal with the bad operators. I am entirely with the noble Lord. I can well remember the position when I was in the Ministry of Transport. It was thoroughly unsatisfactory and we were clearly getting ready for a strengthening of the law then. But I think we have a point here. Maybe our Amendment goes too far, but, as my noble friend Lord Belstead and the noble Lord, Lord Beaumont, said, in our desire, which joins with the Government's, to make sure that the traffic commissioner has enough power we may be giving him more than is necessary. There may not be quite sufficient safeguard here for the interests of the operator.
I wonder whether the noble Lord would be prepared to look at this matter again. I myself should like to look at it again to see whether this safeguard could be drawn a little narrower. We want to get the balance right. I have to concede the noble Lord's case, that the law must be a lot stronger for the traffic commissioner to have enough power. Having given this question another airing, I am persuaded that we should not press the noble Lord to accept the Amendment as it stands now. I should like to give a
416
little more thought to it before the Report stage, and perhaps the noble Lord and his advisers will do so as well. The Bill is pretty tough as it is now drafted, and it could be too tough, and this at the end of the day would not be good for anybody. So I hope I can leave that thought with the noble Lord, Lord Hughes, and with those words I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
7.38 p.m.
LORD ST. OSWALD LORD ST. OSWALD moved Amendment No. 190:
Page 97, line 36, leave out ("whether").
The noble Lord said: I think the Committee would wish me to move this Amendment together with Amendment No. 191 since they go together. These two Amendments, which delete only three words from the Bill, can transform injustice to justice and spell the difference between indignation and acceptance in the eventual implementing of these measures They also have to deal with the important matter of revocation, suspension and curtailment of an operator's licence, as did my noble friend's last Amendment. Subsection (1)(b)(ii) rules that a licence can be revoked, suspended or curtailed if it is discovered that in his original application the operator told an untruth. That is fair enough, but our objection is based against the proposal to penalise him whether or not he knew he was making a false statement.
I should not care to say which of us in this Committee could say that we had never unintentionally given misinformation, even from a Government Dispatch Box. All that a Minister has to do is to appear at the Dispatch Box, express regret that he has unintentionally misled the House, and the House or Committee is quick to grant absolution. We do not demand his resignation. Therefore let me ask the Minister, taking into account the fallibility of each one of us, not to insist that all transport operators should be mentally as well as morally immaculate in filling up their application forms. I beg to move.
LORD BELSTEAD: Before the noble Lord, Lord Hughes, replies, I should like to support my noble friend Lord St. Oswald on this Amendment. I feel sure that the noble Lord, Lord Hughes, will

417
refer us to Section 178 of the Road Traffic Act 1960 in which the words "whether to his knowledge or not" are used, but I should like to put a suggestion to the noble Lord. As the 1960 Act was passed by a Conservative Government would it not be a good idea, as the present legislation is being passed by a Labour Government, to change things round: to accept the advice of my noble friend, and his Amendment?
LORD HUGHES: I think the noble Lord, Lord Belstead, must look seriously at the advice which he is now giving. He is striking at the very roots of Conservative thought, because he is now advocating that change is in itself a good thing, and I do not believe that that is in keeping with Conservative thought.
LORD ST. OSWALD: A change—and so say all of us! What about a General Election?
LORD HUGHES: I am afraid it does not figure in my own thoughts either. I have never thought that change for the sake of change could be justified. However, the noble Lord was right in saying that it had not escaped my notice that these words appear in the 1960 Act, so I will say no more than to confirm the accuracy of his prediction.
We cannot agree to this proposal, simple as it might appear. If we did, it would mean that if an applicant, in good faith, made a false statement when applying for a licence the licensing authority would be unable to revoke, suspend or curtail the licence if it were subsequently discovered that the statement had been untrue.
The power in the Bill, as in the 1960 Act, to revoke, suspend or curtail a licence is discretionary, and obviously it would not be used in respect of any errors of fact made in an applicant's statement when he originally applied for a licence if those errors were not material to the question of whether a licence should or should not be granted. If the operator considered that this power had been misused by the licensing authority he would have a right of appeal. But there are occasions when a mis-statement of fact can be made in good faith, and yet be material, For instance, an applicant might say that certain maintenance facilities were available to him, because
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he thought they were—not because he was deliberately telling a lie—whereas in fact they were not, although he might have been misled into thinking that they were.
The provision of those facilities might have been a highly material factor to be taken into account by the licensing authority in deciding whether to grant a licence. Therefore it would be quite wrong if the licence were to persist after information had become available that in fact this material circumstance did not exist at all; that the grounds for granting the licence were not there. In those circumstances, it does not really matter whether the man made the statement believing it to be a lie or believing it to be true. If we were to tale these words out of the clause we should continue to penalise the liar but should be giving a bonus to the man who, because he genuinely made a mistake, received his licence, whereas if he had been careful enough to check his statements he would have been deprived of it. I cannot accept that this would be a reasonable thing to do.
LORD ST. OSWALD: I quite agree; the noble Lord has explained the position perfectly. I took it that the penalty would fall on the operator for the actual act of making the statement, not knowing that it was a false statement. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
7.47 p.m.
LORD MERRIVALE LORD MERRIVALE moved Amendment No. 193:
Page 99, line 17, at end insert ("provided that the offence relates wholly or in part to the period 10 p.m. to 6 a.m.").
The noble Lord said: Subsection (4)(g) of this clause enables a licensing authority to consider the revocation of an operator's licence for a series of offences against road traffic regulation orders, such as waiting, parking, loading, and so forth, in a prohibited place. I am urging your Lordships to consider whether, for what one might call minor offences, this extensive power which would permit the revocation of an operator's licence should be given. I should have thought that such minor offences were not sufficiently serious as to jeopardise an operator's licence.
I understand that in another place the provision was justified on the comparatively narrow issue of the nuisance caused by lorries parked at night in residential areas. Therefore this Amendment seeks to limit the subsection accordingly; in other words, that the licensing authority will be able to consider the revocation of a licence only for those minor offences that occur between the hours of 10 o'clock at night and 6 o'clock in the morning. The Minister may reply that licensing authorities would be most reticent to use this power for what one may term in effect "trivial parking offences". If he cannot accept my Amendment I hope that he will give some guidance regarding the implementation of this new power by the licensing authorities. I beg to move.
LORD HUGHES: Paragraph (g) of subsection (4) was inserted into the Bill at the Committee stage in the Commons on an Amendment moved by a Government Back-Bencher with Government support. It was clear from the tenor of the debate on that occasion, on April 3, that the Committee had specially in mind the amenity problems arising from the indiscriminate overnight parking of lorries in residential streets, as the noble Lord, Lord Merrivale has said.
In any event, the Amendment is not acceptable to the Government because it is far too limiting. Although the Commons had especially in mind overnight parking, this was clearly not the only factor which influenced the Committee to accept it. For instance, another Member mentioned, among other dangers from indiscriminate long parking, that children playing might be endangered, or that emergency services might be unable to reach houses. Amenity can be damaged by parking by day as well as by night. Indeed, other road users are likely to be much more seriously affected by daytime offences which might create congestion or safety hazards.
I would remind noble Lords that there are various safeguards already in the Bill against the abuse of the power. First of all, the power is not mandatory, it is discretionary, and clearly the licensing authority will take account of the circumstances of an individual cases before invoking the power. Secondly, by sub-
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section (1)(b)(ii) of Clause 69 parking convictions must be "sufficiently numerous" to justify the giving of a direction before the licensing authority can act under subsection (4)(g). And, thirdly, of course, by Clause 70(1)(b) there is a right of appeal, and as one noble Lord—I think the noble Lord, Lord Beaumont, on the last Amendment—mentioned, the right of appeal has more attractions in certain directions, if not in all directions, by virtue of the fact that it will be to the Transport Tribunal and not to the Minister.
I think it is right that there should be this discretionary power. I would certainly not be enthusiastic about supporting it if it were mandatory rather than discretionary. And I think it is equally right that, as in the reference that I have quoted in Clause 69, convictions should be sufficiently numerous to justify it. When we do that, and add to it the fact that even with these provisos the person against whom the action is taken still has a right of appeal to the impartial Transport Tribunal, I think it is wise that the clause should remain unchanged. I hope, therefore, the noble Lord, Lord Merrivale, will feel that he has done sufficient by once again airing the matter and does not find it necessary to take it further.
LORD MERRIVALE: I thank the noble Lord for his reply. I am sorry that he cannot accept my Amendment because it contains a discretionary power, although I understand that if it had been a mandatory power he would have accepted it. I fail to understand why he cannot accept my Amendment, considering that it was said in another place that this subsection was inserted in the Bill mainly to deal with the problem of overnight parking. I should have thought that my Amendment covered the point of overnight parking.
LORD HUGHES: I think the noble Lord has, quite unintentionally, misquoted me. I did not say that it was mainly to deal with overnight parking; I said it was clear that in another place they had overnight parking especially in mind, but other considerations were mentioned, too.
LORD MERRIVALE: I think we are splitting hairs. I feel the Minister will

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not go any further this evening, and I therefore beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD HUGHES: Amendments Nos. 194 to 198 are all consequential upon previous Amendments, and with the permission of the Committee I would move them en bloc. I beg to move.
Amendments moved—
Page 100, line 30, leave out ("a public") and insert ("an")
Page 100, line 31, leave out ("hold such an inquiry") and insert ("do so")
Page 100, line 36, leave out ("Minister") and insert ("Transport Tribunal")
Page 100, line 42. leave out ("Minister") and insert ("tribunal")
Page 100, line 43, leave out ("Minister shall give his") and insert ("tribunal shall give its") —(Lord Hughes).
Clause 69, a amended, agreed to.
Clause 70 [Appeals in connection with operators' licences]:
LORD HUGHES: This is a drafting correction. The phrase to be inserted was omitted in error from Clause 70(1)(b), and I regret to say that without it the paragraph would not make any sense. I beg to move.
Amendment moved—
Page 101, line 14, after ("Act") to insert ("is aggrieved by that direction or order").—Lord Hughes.)
LORD HUGHES: With permission I would move Amendments Nos. 200 and 201 together. They are consequential upon previous Amendments. I beg to move.
Amendments moved—
Page 101, line 18, leave out ("Minister") and insert ("Transport Tribunal")
Page 101, line 23, leave out subsections (3) to (8).—(Lord Hughes.)
Clause 70, as amended, agreed to.
Clause 71 [Control of the use of large goods vehicles]:
7.55 p.m.
LORD ST. OSWALD LORD ST. OSWALD moved Amendment No. 202:
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Page 102, line 11, after ("section") insert ("which shall not be before 31st December, 1971").
The noble Lord said: We cane now in Clause 71 to the Slough of Despond created by the present Government in the path of British industry. As noble Lords will observe, this sub-division of Part V of the Bill is bureaucratically and euphemistically entitled, "Special authorisations for use of large goods vehicles". Authorisations, forsooth! Factually it should be entitled "Circumscription of large goods vehicles", because that is what it is. The Government are pretty fortunate that the anodyne name of "quantity licensing" has caught on and become current, and we shall no doubt be using it throughout this debate. But let us be conscious of what "quantity licensing" means or is meant to mean by its inventors.
My noble friend Lord St. Helens said earlier this afternoon, and we all know in this House, and by now several million poeple outside are also aware, that the purpose of quantity licensing is to force the carriage of goods, or an important volume and several important classes of goods, out of road haulage, which at present in a free market is the method adopted and preferred by industry, on to the railways, which at present and in an unbiased, unrestricted market, cannot obtain the custom.
To put a more pleasing gloss on this intention Ministers concerned have explained, and continue to protest, that this will really be very good for industry even if industry does not appreciate it now. Here we see and here we listen to the eternal Socialist nanny persuading her sceptical victim to swallow a tablespoon of syrup of figs—and what a week this happens to be to try to persuade anybody to swallow this particular medicine! It is somewhat ironic to recollect that at the time of the Second Reading of this Bill in another place, the Government had just scraped by in avoiding a rail go-slow. To-day, when it befalls that we debate this particular and objectionable element of the Bill, the country is in its second week of a go-slow on the railways, which the Government did not scrape through, and the headlines this morning were "Go-slow goes on", and "Unions refuse peace offer".
My Lords, it is naturally difficult to obtain anything like a precise idea of what the country has lost in the past eleven days by the disruption caused, let alone what it will lose if the dispute continues. The Press has been full, understandably enough, of the sufferings of rail passengers, and anyone driving into or out of London or even circulating within London must be aware of the exasperating effects of the present impasse and receive an impression of the costly delay it has caused and is causing. That is one aspect of the fallibility of the railways. We have heard very little of the delay to goods in rail transit, and it is virtually impossible to quantify. I made an inquiry this morning through British Rail as to the ton-miles lost since the dispute began. They were unable to help very much, though I must pay tribute to the efforts they made. The figures will not be available, I gather, until next week, possibly Monday, but I think it behoves us to weave some estimate, however rough, into the present argument to-day.
Trying from another direction, I sought some indication as to the amount of freight which had been transferred to road haulage during this dispute. For what it is worth—and I do not want to exaggerate this or claim it to be in any sense definitive—I obtained some specimen figures. A small rapid survey of twenty hauliers based in the principal cities showed increased carryings varying from 5 to 10 per cent. These goods appear to have been transferred from rail to road, and the figures are restricted to consignments of over 100 miles in vehicles of over 16 tons; that is to say, the traffic which would be circumscribed under the provisions of this Part of the Bill since in an emergency they would require special authorisations to assist at all. Even the figure of 5 to 10 per cent. is fairly impressive when translated into ton-miles, but I think it is fair to suppose that a far higher proportion of goods are still being held back in the hope of an end to the dispute, and if they can wait no longer they also will have to go by road. I might usefully mention one specific instance of the way in which one large manufacturer has been able to meet the situation. The Ford Motor Company, finding itself unable to entrust any of its products—that is, cars and spare parts—to the railways which nor-
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mally it sends by that method, has had to hire over 200 road vehicles to carry out the work in the present emergency. That is separate from and independent of the small survey I mentioned earlier.
What stands out in the knowledge of everyone is that in the past the difficulties of trade and industry in distributing goods, whether for internal consumption or for export, in the face of a railway strike or go-slow, have always been met by the road haulage industry. They are being met and satisfied in that way to-day. But if this Part of the Bill were to pass on to the Statute Book and be implemented, if large vehicles, the long distance and so-called "abnormal loads" vehicles, were to be handicapped and thereby reduced in number, if the requirement for special authorisations were imposed upon their operators, then no such rescue operation could be carried out in future.
In their secret hearts the Government must be saying to-day, "God bless the hauliers who are saving our bacon and the British economy! Keep those wagons rolling, and heaven protect them from punctures!" In the face of all this, may I be permitted to say that my heart bleeds for noble Lords opposite who have to defend the policy and the system we are debating. I have noticed—who has not?—that the heart of the noble Lord, Lord Shackleton, of whom we are all so rightly fond, bleeds for his opponents with such oratorical frequency that I sometimes wonder why he is not as anæmic as the remainder of his Cabinet colleagues—I mean those who remain. My heart is responding, in the same sympathetic fashion to-day, though not perhaps as copiously or as wastefully as that of the noble Lord the Leader of the House. It is to the noble Lord, Lord Winterbottom, that we have to extend our personal sympathy to-day.
To be scrupulously fair, by way of outlining the provisions about quantity licensing I am going to quote Lord Shepherd in his factual description, wherever it is factual and undisputed, as presented in the Second Reading debate. But first I should remind noble Lords opposite that in the same speech he said:
"Those who regard this Bill as being no more than doctrinaire socialism will no doubt point to the provisions of Part V, for the

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so-called quantity licensing of road goods transport." [OFFICIAL REPORT, col. 16; 11/6/68.]
The noble Lord is most sensitive and he is often right, or half right, as he was on that occasion. He was wrong in supposing that we who attack this Part of the Bill over which he revealed a latent guilty conscience, are attacking the whole Bill on political grounds. We have given our blessing to quality licensing. We have approved the concept of the operator's licence, and of the transport manager. We have been able, during yesterday and to-day, to improve those provisions. Our attack on quantity licensing is not mainly political. We attack it as bad, unrealistic transport policy. I read again yesterday with great care Lord Shepherd's descriptive passages in columns 16 to 18 of Hansard of June 11. It was succinct and admirable when he stuck to pure description; but when it came to the context and the consequences, he was nothing if not disingenous and more than somewhat political in his rendering.
It seems essential, in an opening speech upon an issue of this importance, to describe the actual measures to which we are objecting, and I would do so by, as I have said, quoting directly from what the noble Lord, Lord Shepherd, himself said as recorded in Hansard. He said:
"What we are proposing in the Bill is the eventual scrapping of the existing system of carriers' licensing—the 'A','B' and 'C' licences, of which 'A' and 'B' licences are in themselves a form of quantity control, restricting competition even within the private sector—and its replacement, in so far as it represents a system of controlling the capacity of the road haulage fleet, by a system of special authorisation for heavy long distance vehicles. It will apply to lorries of 16 tons maximum laden weight going on journeys of longer than 100 miles, or on shorter journeys down to five miles if they are carrying a few specified heavy goods, such as coal, certain ores or steel. The control will apply to not more than 100,000 vehicles out of a total goods fleet of some 1½ million, all of which are at the moment subject to carriers' licensing. Thus we propose sweeping away a great deal of the existing control."
I do not think I can be fairer in describing the Bill than to use the words of the Deputy Leader of the House in his Second Reading speech. This passage ended with the words:
"we propose sweeping away a great deal of the existing control."
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But if he or I, or the noble Lord, Lord Winterbottom, were to ask anyone in the transport or transport users' world whether he considered that the general effect of quantity licensing would be a sweeping away of existing controls, then he or I would receive a pretty mirthless laugh in reply to our question. what the provisions are doing is to impose an immense new bureaucracy, for no good reason that anyone can see.
This is the way we regard the proposals, and this is why we are opposing them to-day. If the system works fairly it will put through the general transport net, a delaying net, all tonnage going beyond 100 miles and all bulk traffic. The end product, in terms of net gain of traffic to rail, will be very small. A vast number of companies will have been involved in expenditure of staff time, involved procedures and uncertainty, with the minimum result so far as the physical carriage of goods is concerned. They will also exchange rigidity for the present flexibility. This is the best that can happen if the system is worked fairly, as I have no doubt that Ministers intend. If, on the other hand, there is to be a significant benefit to rail —that is, to realise the Government's objectives in presenting this cumbersome and contentious legislation—then I submit it cannot be as a result of working fairly. It is going to have to be biased in favour of rail.
The main difference between the Government and ourselves, assuming, as we do, that the Minister of Transport is sincere, though misguided, is that the Government genuinely believe that there is a large section of trade and industry which does not know what it is doing. Trade and industry, under this theory, are taking wrong decisions and not looking carefully enough at freightliners; and therefore, in their interests as well as the interests of the country, a system which would divert some goods from road to rail is desirable. This is the theory of the Government. But they halve never provided any evidence whatever to support this sweeping and dubious generalisation. It is said to be based upon a survey, a Ministry of Transport survey, which will not be published until after this Bill is law. I am not saying that this is a false prospectus, but it is certainly a hidden prospectus, and therefore

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a meaningless and suspect prospectus. Even at this stage of the Bill, the Ministry have not produced any, even partial, interim evidence.
It is believed by the traders and customers who have most to lose or to gain by this that the Government have been "led up the creek" by their advisers. It is true that there may be a small minority, companies controlling small traffic flows, a minute proportion of the whole, who do not bother sufficiently about their transport costs. But it is no more than a minute proportion. And here we are, busily erecting this immense and restrictive edifice to deal with a very small problem.
We learn that the Minister believes that a large proportion of traffic won over to rail will come from the break-even point. That is, where on investigation the licensing authority finds that road and rail are more or less equally matched, then, as we see, the licensing authority is under a direction to see that the traffic goes by rail. The criteria for obtaining a special authorisation are that road shall be superior to rail. In the case where they seem to be equal, the authority is entitled not to grant a special authorisation to the haulier himself. That is in Clause 74(3). I understand that the latest figures, as estimated by the Government, for the proportion of traffic which they think would be diverted is 10 million tons.
I have to point out that the Government appear to be fairly inconsistent in their approach. Mr. Neil Carmichael, the Joint Parliamentary Secretary for Transport, in a speech given to the Management of Transport Workers' Conference on June 20 on quantity licensing, said, in this immediate context:
"It is, of course, at this point that those who accept that this is what the Bill intends are riled by the implicit suggestion that firms do not know and choose the mode of transport that is most profitable to them. I don't think that anyone disputes that in the vast majority of cases firms are efficient in their transport choices, but in a small but important number of cases the railways do dispute that firms know their own best interests."
A minute or two later in the same speech he said:
"Meanwhile, there is evidence that in very many cases transport managers do not consider the railway alternative or indeed even know the cost of modes other than those they use."
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Here, in the same speech, is a clear conflict which could be very significant. Either it is a "very small number" or it is "very many cases". As a result of this sort of confusion what we expect is that a very small proportion of the 10 million tons will be accounted for advantageously to the user; the remainder will come from the pro-rail bias written into Clause 74.
At this point I feel I should refer to one more passage in the speech of the noble Lord, Lord Shepherd, on June 11, and also to an intervention by him in the speech of my noble friend Lord Nugent of Guildford which has caused some surprise, blended with incredulity, among those most close to the problem. The passage is recorded in column 17 and reads:
"It also follows that if road haulage can move goods more cheaply and quickly than rail, they will go by road."—[OFFICIAL REPORT, 11/6/68, col. 17.]
In practice, this is bound to conflict with Clause 74(3) even if it does not in theory. The railways have the benefit of the doubt, and who is going to assess the doubtful quality of the railways? The criteria are to be speed, reliability and cost. We have all heard harrowing stories of those who on occasion, entrusting their goods to rail, have suffered grievously. I was told last week of an example of a firm which had sent a cargo of steel for export by British railways on the first stage of its journey. The cargo was lost by British Railways for a month, and the firm had to pay a penalty of £20,000. But it is too much to expect that examples of this sort would be taken into account in disposing of the marginal break-even traffic. The railways' yardstick will be a railway timetable, on paper.
I would also refer to the intervention of the noble Lord, Lord Shepherd, when he sought to correct a statement by my noble friend Lord Nugent that all journeys over 100 miles for heavy lorries would in future be at the discretion of the railways and the National Freight Corporation. Lord Shepherd intervened to say:
"My Lords, I think that the noble Lord would like to be corrected on this. This will happen only within freightliner areas. Where there is no freightliner service the licences will be free."—[OFFICIAL REPORT, 11/6/68, col. 25–26.]
My noble friend was quick to point out that this itself covered a very large area. But, as I say, it has astonished those who have been in touch with Ministry spokesmen and I think the noble Lord may have been in error—unintentionally, it goes without saying. Naturally, I will not ask the noble Lord opposite to reply now, but I should like him to take note of the fact that the trade very much doubt whether that can be true, because it is at variance with what they have been told in the Ministry.
The main practical disadvantages which these measures spell for all concerned are twofold. They inhibit both longterm planning and flexibility. The burden of bureaucracy will be multiplied many fold if the railways take a tough line. Ministers have made light of this and no doubt the Ministers opposite will be no exception. But the road hauliers' experience of the railways' attitude at present in fighting applications for "A" and "B" licences does not encourage them, does not make them sanguine as to the use which will be made of the new and more powerful influence they are offered under these provisions, or the restraint which will be observed. My noble friend, Lord Nugent of Guildford, referred to this when he proposed our earlier Amendment 153.
The anxiety in the trade is that the railways will set up a considerable machine to contest these licences. Some noble Lords opposite may choose to shrug this off by saying, "What does it matter if, at the end of the day, a deserving man gets his licence?" It matters because, in the meantime, he will have spent days or more probably weeks in preparing his case before the licensing court, engaging accountants and lawyers for the whole process. Perhaps more important is the fact that during that time he and his clients or customers will be in a state of uncertainty as to the outcome, and this uncertainty will permeate and bedevil the whole of industry.
The Government can be under no illusion as to our intention in seeking to add these few simple words to the Bill at this point, but they may find it slightly harder to acknowledge that it would have that effect. They know that Mr. Edward Heath has said that a Con-
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servative Government would abolish quantity licensing. We take it that by December 31, 1971, a Conservative Government will have the power as well as the will to do that. The more vigorously they seek to defeat this Amendment—if that is their intention—the more they will reveal their despair as to their electoral prospects. It is not as if they are in any great hurry over this. Ministers have continually said that there is no intention to bring in quantity licensing until the freightliners have proved their worth. The noble Lord, Lord Shepherd, repeated that in his speech. Nobody expects that to be for some time—I doubt whether anyone would put it before 1971. What we are doing in this Amendment is to build a bridge aver the Slough of Despond—a bridge which will either be reinforced by a Tory Government, reinforced and made permanent, before the date mentioned, or totally demolished by a future Labour Government, if such a disaster should occur.
We are entitled to ask, in fact we are bound to ask, the Government, "Who wants quantity licensing?", Who favours it or deems it in any sense necessary or helpful? Industry abominates it, agriculture even more violently so; manufacturers in the motor industry (a powerful contributor to our export performance) are convinced it will harm them, and unanimously condemn it. Traders and customers have expressed their detestation because it robs them of choice, it limits or prohibits competition among those who carry their goods, and it must put up costs—and when costs go up in a period of high taxation, unprecedented taxation, such as this, they feel doubly deprived.
Dislike is expressed, in no uncertain form, from another quarter. The drivers have demonstrated in every part of the country. Those demonstrations did not, I can assure noble Lords opposite, require any elaborate or expensive organising or propaganda. They were not rallies of Tories. They were spontaneous and very angry. I went, more as an onlooker than a participant by intention, to a demonstration in Roundhay park, Leeds, and found myself talking some drivers out of strike action. They wanted to strike against Socialist measures by which they felt their livelihood was threatened.
Ministers and Labour spokesmen have sought to make almost a virtue out of all this. They have patted themselves and each other on the back, declaring how brave they were to continue with these measures despite the opposition from so many quarters. But these were mostly well informed quarters. To take pride in ignoring this indignation is a queer form, a queer interpretation, of democratic government. This is government of the people in spite of the people and to hell with the people! It is the sort of thing which cost King Charles his head. I hope that it will not cost the noble Lord, Lord Shepherd, his political head, but even if it does we can be certain that he will still be walking and talking well beyond half-an-hour afterwards so that we shall continue to have the comfort of his company.
Earlier in this speech I said that the architects of the Bill were no doubt honest in their endeavours and their motives. But they are negative endeavours and motives. They are based on a supposition—we say an illusion—that the road haulage industry of this country is inefficient, or less efficient than rail, and that the traders and manufacturers of the country do not know what is good for them, that they have a kind of childlike preference for the roads when they would be far better off dispatching a lot of their goods by rail. I have said, and I suppose it will be said again in the debate which follows, that we can feel sympathy with those who try, this week, to win the House of Lords into a belief that this fairy tale is not a fairy tale. It is a fact. This is a bad week to mesmerise your Lordships into any such weird fantasy.
But we do not argue simply from the position of this week. Any week is a bad week for trying to tell us that hardheaded British businessmen and industrialists do not know their business, or an important part of it; that they are in reality soft-headed and deluded. The provisions in Clause 71 and in the clauses which follow are misconceived and negative. In my faraway youth there was, one year, a popular song, to which I supposed I danced, with a notable lack of grace. It was called "Accentuate the positive—eliminate the negative". With this Amendment we are asking the
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Committee to accentuate the positive, eliminate the negative.
Earlier in this speech I quoted extensively from the speech of the noble Lord, Lord Shepherd, opening the Second Reading debate. I will end by quoting briefly from the winding up speech of my noble friend Lord Windlesham in that debate. He said:
"The Bill cannot leave this House in the form in which it has arrived."—[OFFICIAL REPORT, 11/6/68, col. 120.]
His words have already been proven prophetic. We must reiterate, extend the truth of his prophecy later to-night by, I hope, carrying this Amendment. In doing so we shall be most usefully and emphatically serving the interests of the British economy. I beg to move.
8.23 p.m.
LORD WINTERBOTTOM: My Lords, I am certain that the Committee are grateful to the noble Lord for his rousing Party political speech. It will help to keep us awake during the remaining hours of a long debate. I have of course come to the Dispatch Box to present your Lordships with a reasoned case as to why the Government believe that the proposals for quantity licensing are in the best interests of the country as a whole. But I feel that reason will not penetrate the noble Lord's mind. It needs something more forcible. The noble Lord's mind is made up; he is biased; he says that he can see no good in our proposal. But perhaps there are others in this Committee who are still open to reason.
The main tenor of the noble Lord's attack was the terrible state of the railways, that they cannot be trusted, and that no one in his right mind would conceivably use them.
LORD ST. OSWALD: No, I did not say that.
LORD WINTERBOTTOM: He was saying "Thank God that the wheels are there to roll".
LORD ST. OSWALD: I said, "this week".
LORD WINTERBOTTOM: The wheels have got to roll on road and rail for many years to come. I should have thought that the present troubles on the railways, which will pass, prove the essential nature of the rail services of this

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country. We all know that we cannot do without a railway system. The problem we are facing is that we have a railway system which was geared to provide the whole of the major transport of this country in the last century. The system has been weakened and damaged by a long war, and has been overtaken by new forms of transport. But for the foreseeable future, until the turn of the century at least, we have to have a railway system.
Your Lordships would all agree that the railways must not be a parasite upon the economy as a whole. They must earn their keep and provide a return on their capital similar to that earned by other forms of transport. But because they have had to recast their whole method of working, we have had to take a series of measures which will enable them to compete on an equal footing with the free-booting road system. The alternative facing us was to run the railways at a deficit of over £100 million a year, year after year. This is something we could not tolerate, and therefore something had to be done. This Government are going to do it. That is the idea which lies behind the system of quantity licensing.
I cannot see that the vast scrapping of licensing which is going to take place for a very large number of vehicles will lead to greater bureaucracy. Admittedly, the controls on a certain number of goods vehicles are to be tighter, and perhaps more onerous. But many thousands of vehicles will be freed altogether. Indeed, I suggest that one of the reasons why the transport industry is not very fond of this particular measure is that a substantial measure of competition will be introduced into the road haulage industry which does not exist at the moment. Whenever I hear people preaching free enterprise, it usually means that they are finding some way of avoiding it. I believe that it will be much easier for a man who wishes to start a new haulage business now to get into business than it was in the past, when any of his existing and established competitors were able to make opposition to his proposals and perhaps block his entry to the industry.
I ask the Committee to consider what we are trying to do. We are attempting to move a proportion of the larger quantity of the goods traffic which at the moment is going by road from the road
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to the railways. If our estimates are correct (and I believe them to he correct; the Government are no trying to kid themselves by the survey which the noble Lord has mentioned), we should like to see approximately 10 per cent. of the total road freight moved from roads to the railway system. This, for a growing road haulage industry, will not be an intolerable burden, but it does represent roughly a 30 per cent. increase in the total rail movement of general merchandise. This must have an important effect on the profitability of the railways. Is this wrong? We are certainly not asking British industry to send goods by a transport system which is slower, more expensive, or less efficient than the road system. All we ask is that, if it can be proved, by a clear-cut and simple procedure, that it is cheaper, quicker, and more efficient to send goods by rail rather than by road, then they should go by the rail.
The noble Lord made much of the fact that we know better than the individual customer; that the individual does not know what is best for him. I do not know how noble Lords run their lives, but I am afraid that I myself often do stupid things and do them for many years out of sheer mental laziness. Every time I come up from my home by train to London, I travel from Kettering. It would be much simpler for me to travel from Wellingborough, which is 5s. cheaper and ten minutes quicker. But I got into the habit of travelling from Kettering when I first arrived in my part of the world, and I have continued to do so. There is an element of inertia in everything we do. If a system is working well, we continue to use it even if it is not necessarily the best way of doing what we want.
LORD ST. OSWALD: The noble Lord is not competitive in his journey to London. He is saying that the industry is not merely idle, but is criminally idle, in that it does not know how it can put up a better performance than its competitors.
LORD WINTERBOTTOM: I deny what the noble Lord said. We are human beings and industry is run by human beings. In many cases the forces of inertia will cause individual firms, and

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individuals themselves, to carry on with practices which are less efficient than the alternatives open to them. This problem faces the whole of industry, and not only in this country; it is part of human nature.
While in the long run we would accept the fact that if the new goods-handling system now adopted by the railways is more efficient, it will anyway attract the business that we believe should go to the railways, we cannot afford to wait very long. We are losing well over £100 million a year on the railways, and anything we can do to speed up the reduction of that loss must be done. That is one of the main points of the argument. Although we admit quite clearly that this interferes with the freedom of individual choice, nevertheless, as a Government, we have to take into consideration the interests of the country as a whole; and the railways form an integral part of the interests of the nation.
All that the noble Lord is doing is, first, to preach a certain doctrinaire dislike of Government interference in any activity of industry; and, secondly, to argue strongly the case for the road haulage industry, which I should have thought was doing sufficiently well to accept the competition that we are proposing to bring to bear upon it. I offer those reasons, and I hope that your Lordships will reject the Amendment moved by the noble Lord.
8.33 p.m.
LORD BEAUMONT OF WHITLEY: There can be only three possible reasons for the Government's putting forward these arrangements in this clause of the Bill. The first is that they think transport users are knaves; the second is that they think that transport users are fools; and the third is that they want to push from road over to rail some transport which should not go over. I do not think any of those reasons would reflect any great credit on the Government. They say that the reason is because they regard the transport users as fools, and seldom has this House heard that contention put forward by a Minister declaring his own foolishness as support for such an argument.
I do not think we can help feeling that there may be an element of both of the other reasons in their thoughts. For in-
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stance, it was most noticeable that the Minister referred to the "freebooting road users". I always thought "freebooting" was a term applied to pirates and people who were against the law. I cannot help feeling that at the back of the Government's mind is some slight feeling in that direction, as well as a desire to make the railways pay, even at the cost of pushing over to rail some transport which should not go over.
What will be the effect of this Bill? In amplification of what the noble Lord, Lord St. Oswald, said, I should like to enumerate one or two other points. First of all, there is the most tremendous burden that will be put on road users. This Bill seems to revel in an increase of officialdom and complication, and long applications and form filling. An application must be made by the operator, either someone operating on his own account or a professional haulier, for all traffic to be carried by a large vehicle over 100 miles. It is impossible at this stage to forecast what will be required in an application for a special authorisation by the licensing authority. The description might be in wide or in narrow terms; the types of vehicle might or might not be limited, and so on. However, it is clear that because special authorisation will not be transferred from one operator to another, a separate authorisation will be needed by each haulier whom a transport user may need to use from time to time.
Each application will mean supplying information, and being ready, in case of objection, to support a haulier with detailed evidence on the comparative benefits of the road and rail alternatives. Where a number of hauliers are used, as they sometimes are, this work will be very considerable. Whether or not an application by a haulier on his own account, or by an operator, is objected to, he will always have to have the case prepared and ready to argue in case there is an objection. Whenever unforeseen circumstances arise, such as diverted traffic, rail or haulage strikes, the need to switch from a customary haulier and so on, users will have to obtain and expedite a grant in a very great hurry, which may be very difficult to do at night or at weekends. This immense amount of bureaucracy which is being caused just is not warranted.

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In addition, there is the hardship to remoter areas, where a distance of 100 miles means very little, and to development areas. This applies particularly in Scotland, Cornwall or Devon, where a radius of 100 miles will extend in certain directions out to sea or to a long peninsula. That is why in another place my Party sought exemption for those areas. Indeed on the Committee stage they gained exemption for some of these areas. but it was withdrawn on Report stage by the Government. To increase the burdens in those areas is a complete reversal of Government policy, and will not help to allay anxieties in those parts of the country, particularly as the Government have encouraged firms to move there.
In addition, we shall get added congestion in town centres, particularly if the facilities for dealing with the increased rail traffic prove inadequate, as they easily may. Many firms are taking their goods on the motorways to other factories on the outskirts of cities, and so relieving the congestion. But if goods are forced on to the railways there will be increased congestion in the cities. There are difficulties with specific goods. Many representations have been made from particular industries for exemptions. To give some examples, sending fish by rail from Cornwall means an enormous increase in handling and requires a much more expensive form of packing.
LORD SHEPHERD: The noble Lord must surely agree that if it is more expensive and mere handling is required, the goods can go by road. The noble Lord must not exaggerate the case he is making.
LORD BEAUMONT OF WHITLEY: I accept to a certain extent the correction of the Minister, but I was not exaggerating.
LORD SHEPHERD: The noble Lord must not just accept it "to a certain extent". What I said was a fact and I hope the noble Lord will accept it.
LORD BEAUMONT OF WHITLEY: It is not entirely so, and I do not entirely acknowledge it, because in borderline cases a balance of doubt will always come down in favour of rail. But where the balance may lead to a difference of 5 per cent. each way, this can be a very
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considerable expense. I do not accept that I am exaggerating.
LORD SHEPHERD: If the noble Lord will read the Bill carefully, he will see that if it is cheaper to move goods by road there is no question of its being forced by this Bill to go on to rail. If it is more expensive or takes longer by rail, or if the reliability facto- comes into it, then the goods will still be carried by road. The noble Lord must not exaggerate or distort the truth.
LORD BEAUMONT OF WHITLEY: if the balance is regarded to be equal it will come down in favour of rail, and the balance may easily be regarded as equal within minor degrees of tolerances of several per cent. Surely the Minister is not saying that the licensing authority will be able to judge between 1 or 2 per cent. in balancing cost, speed and facility. It just is not true.
LORD SHEPHERD: If the noble Lord will read the Bill, he will see that it is quite clear.
LORD BEAUMONT OF WHITLEY: I have read the Bill, and I think the Minister is exaggerating his case now. Anyway, I shall pass on. We have put down from these Benches Amendments to delete Clauses 71 to 80, but since the Conservative Party have put down this Amendment to postpone the operation of the Bill we think it is a very good thing that this Chamber, which is, after all, a reviewing Chamber, should give the Government plenty of time to think again.
It does not much matter to us, I may say, whether what the Conservatives say is true and they are in power and form the next Government. It would give a good thinking time, and we are prepared to support it. We cannot possibly agree to a system whereby the Government say that objection will be made to the granting of licences to hauliers only if it can be proved that the job can be done better and more cheaply by the railways, yet the Government insist on the right to make that decision, or on the right of an outside body to make it.
This is a question where it seems that undoubtedly the judgment of the individual entrepreneur should take precedence; and there is nothing to make us believe that it is worth going to all this "fiddle-faddle" in order that someone

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should make up his mind for the entrepreneur. The Government are saying, as I said before, that the entrepreneurs are either knaves or fools. I do not believe that they are either. They are perfectly capable of making up their own minds on what is the best form of transport. They are not going to go to great lengths to "do down" British Railways. They are quite capable of working out for themselves which method of transport is the cheaper. In fact, if this Bill is any evidence they have considerably more knowledge of the economics of their affairs than the Government seem to have. They are certainly just as profit-conscious, and in many cases far more so. This part of the Bill is a thoroughly illogical piece of legislation. It is the acme of paternalism and the denial of the right of the individual to make up his own mind, and I sincerely hope that we shall pass this Amendment.
8.43 p.m.
LORD POPPLEWELL: I should like to join in the congratulations which were given to the noble Lord, Lord St. Oswald, when he resumed his seat—but my congratulations are from a different point of view. I thought he read his brief—prepared, I strongly suspect, by the Road Haulage Association or some other such body— very well. I would not quite class it as a speech, but I think that as a demonstration of brief reading it was very good indeed. But there are many weaknesses attaching to that brief, and I should like—
LORD ST. OSWALD: I must interrupt the noble Lord and inform him that his suspicion is quite unfounded. It was my speech. I wrote every word of it, and I meant every word of it.
LORD POPPLEWELL: I do not dispute that the noble Lord wrote every word of it and I do not dispute that he meant every word of it. I merely suggest that it was prepared from rather different sources. That is all I am suggesting, and I do not think the noble Lord would contradict that. Personally, I think the noble Lord, Lord St. Oswald, enjoyed himself very much at the expense of the dispute that exists in the railway industry to-day. I think that every one of your Lordships deplores the dispute, and one can only hope for a settlement at the
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earliest possible time; but to take the opportunity of a discussion of this description to use the words which the noble Lord used, as though railwaymen were the only people who were subject to industrial disputes, is, I think, a little unfair. There are road haulage disputes and disputes in many other industries which certainly play a part in damaging the economy of the country, and we all deplore these things when they arise.
But I want to deal with some of the points mentioned by Lord St. Oswald and also by Lord Beaumont. The noble Lord, Lord St. Oswald, laid down the criteria of speed, reliability and cost.
LORD ST. OSWALD: It was not I who laid down the criteria.
LORD POPPLEWELL: If the noble Lord will contain himself he will find that I was going to add that this is laid down in the Bill. What objection is there to the case being put to the licensing authority, the licensing authority having the remit contained in the Bill, that they must make an assessment as to who will carry these goods based upon the criteria of speed, reliability and cost? Surely this is the very essence of that competition which noble Lords opposite like so very much, and I cannot for the life of me understand why they should object to these criteria instructing the licensing authority as to how they should deal with any given application. Is it not rather labouring the point to say that an application to a licensing authority will involve a lot of costs, and such like? Is it not the present position that these heavy goods vehicles, and also a large number of other goods vehicles, already have to apply for a licence before they can run? Therefore, where are the additional costs and inconvenience which are going to be caused to them by their having to submit this application to carry goods over 100 miles? I suggest to noble Lords opposite that they are really overstating the case in this particular direction.
I think it may have been fairer, too, if they had mentioned in passing that this Bill will remove the necessity for applications for a licence by a very large number of the hauliers who to-day have to apply for a licence—900,000 of them. I know this is not under special long-distance, that this deals with the "C" licence, but I think that in balancing the

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Bill these things must certainly be borne in mind. The object of the Bill is to ensure an efficient service. Is there anything wrong in that? That is the very spirit, surely, of that competition which noble Lords opposite like so much. Therefore, instead of taking sectional interests, which I suggest many of them are doing in this direction, they might look at the best interests of the nation as a whole to see whether it is not possible to challenge the railways to give an efficient service, based on the criteria embraced in the Bill, in order to take some of these heavy lorries off the roads—roads which are already over-congested—and be brought into the system that is laid down and which is admirably suited to deal with them if they show that commercial judgment necessary to get themselves into the required state of efficiency.
There is another point that noble Lords opposite might have made when they were talking about the difficulty of licensing. One would almost think, according to the things they were saying, that these people would have to make an application for each load they had to carry. We must remember that these licences, once granted under Clause 77 of the Bill, operate for five years. That is a very important point indeed. These are some of the factors that should weigh in the minds of noble Lords before they carry this Amendment to a Division and leave it to the other House to correct once again.
VISCOUNT MASSEREENE AND FERRARD: The noble Lord, Lord Popplewell, will be interested to know that I do not have a brief; that I am not one of those fortunate people who get handed briefs. Whatever the noble Lord says, there is no doubt that if this clause goes through as drafted, it will increase the cost of freight transportation. Freight transportation accounts for 8 to 10 per cent. of the total national expenditure.
Actually I am pro-railways; I am all for the railways carrying the heavy freight if they can carry it efficiently, but I can give your Lordships plenty of examples to the contrary. However in deference to the noble Lord, Lord Winter-bottom, I will quote a very mild example of the difference between road transport and rail transport. Recently, on the Ministry of Transport's insistence, a large load was sent by rail from Stockton-
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on-Tees to East Greenwich. I took 13 days. The time taken by road would have been two to three days. The cost of the rail transport was £440; the cost of transport by road would have been £195. I have many worse examples than that. I will not give them. I do not wish to rub too much salt into the wound. The noble Lord, Lord Winter-bottom, spoke about "freebooters". I thought that freebooters were people who took liquor over the frontier and sold it. I would point out to him that, so far as I am aware, the money extracted from the owners of commercial vehicles through road tax and the tax on petrol and oil more than pays for the roads. I do not think the railways can claim that achievement for their permanent way.
I have a great many objections to Clause 71 and it would bore your Lordships if I were to state them all; but another of its effects will be to increase congestion because the hauliers, in order to escape quantitative licensing, are bound to buy smaller vehicles and will therefore have two lorries doing the work of one. Apart from increasing the congestion on the roads, this wall obviously increase the cost of freight transport on the roads; for I am told that if you use two lorries to do the work of one the cost is increased by about 27 per cent. In any case, if you have all these heavy loads going by rail, you must take them from the terminals in the urban areas by lorry, and therefore you are going to increase the cost and also increase the congestion in the urban areas. I frequently send produce by lorry and train. I am prepared to send it by rail alone if the rail is as cheap and as efficient.
The noble Lord, Lord Popplewell, when speaking on the subject of speed, reliability and cost, complained that private enterprise was objecting to the competition to be provided by the National Freight Corporation. As far as I am aware (and perhaps I shall be corrected) the licensing authority have not the power to inquire into the rates quoted by the N.F.C. for the carrying of freight. I find it difficult to understand how a nationalised industry work! out its costs; but, having no experience of nationalised industries, that is quite understandable. But there is another objection. The N.F.C. who, after all, have State support and have the taxpayers'

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money behind them, are going to be able to undercut private business. Presumably they will eventually be able to buy up the private haulier and will in that way increase the scope of nationalised transport by rather devious means.
There are many other points I should like to mention, but one important one is the question of our export trade. The manufacturers of heavy vehicles in 1966 exported £5 million worth of vehicles over 16 tons. They now reckon that, through this Bill, sales this year will be 50 per cent. down. If you do not have a strong home market you cannot have a strong export market. That is a well-known economic fact.
Before I end I should like to ask the noble Lord whether he can produce any evidence that British Rail can transport heavy goods more efficiently than the road hauliers. So far, I have not heard any evidence that they can, although they may be able to do so in three or four years' time. There is one other question that is very worrying: the question of railway strikes. It has been mentioned in this debate that if the road hauliers are to be put in pawn to the N.F.C., what is to happen in the event of a railway strike? It is possible that the whole transport system of this country could be crippled; and if the transport system were crippled, the economy would be crippled. Could the noble Lord tell us what will happen in the event of a railway strike?
The whole position of quantitative licensing—meaning, as it does, more bureaucratic control, really means more Government expenditure, more time wasting and a restriction of the country's economy. I should have thought it was preferable at this time to subsidise the railways for social reasons rather than to try to force freight on to the railway and by so doing to increase the general transportation costs of the nation.
9.0 p.m.
THE MARQUESS OF LOTHIAN: I should like briefly to support my noble friends in their Amendment to-night, and particularly because the very lucid and reasoned arguments of my noble friend Lord St. Oswald apply with particular reference to Scotland. Your Lordships will have noticed that there are on the Marshalled List two Amendments or at any rate one Amendment that refers par-
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ticularly to Scotland. I think that the next Amendment on the Marshalled List in the name of my noble friend Lord Selkirk relates basically to Scotland.
We must all appreciate that, apart from the central industrial belt, the main centres of industry and population in Scotland are spaced very far apart and frequently at distances far more than the 100-mile limit proposed in the Bill. Added to this, transport costs in Scotland, by reason of geography and the difficulties of the terrain, tend to he rather higher than in England. Consequently, they play a larger part in the calculations of Scottish industrialists than in those of industrialists in other parts of the United Kingdom. At a time when Scotland is striving hard and, I may say, with a good deal of success, to attract new industries and new populations particularly to the remoter parts of the country, it is foolish to put further difficulties in the way of industrialists and to increase their costs. I think my noble friends have proved conclusively that whatever else this clause does, it will tend to increase the costs of the road haulage industry.
So far as I can see, hauliers and manufacturers will have to do one of three things: they will have to go through a time-wasting process of making their applications and waiting for approval or objections; they will have to carry their goods in smaller vehicles, which will undoubtedly entail greater overheads; or they will have to adopt the highly complicated and in some ways rather ludicrous procedure of transporting their goods in heavy vehicles for distances of under 100 miles and then transferring the loads to other vehicles to continue the journey. This is not so fanciful as it may sound—I have heard of firms who are actually planning this operation. It seems to me foolish to ask sensible, commercial undertakings to adopt such a course.
We in Scotland are grateful for some of the concessions which have been won from the Government in another place. For example, it is excellent that the 100-mile limit is to be calculated as the crow flies and not in road miles. This will make a great deal of difference in the Highlands where deviations on roads are so formidable that 100 miles is really nothing at all. We are also glad to know that the Islands are to be exempt

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from the provisions in this clause, as is the transport of livestock. I feel strongly that this exemption should extend to the fishing industry. There we have a commodity which must be moved in the quickest and cheapest way possible in order to preserve quality and quantity. I see that my noble friend Lord Selkirk has an Amendment down which is designed to extend the exemption to home-produced agricultural and horticultural produce.
There is a great deal that one could say about this clause but I do not wish to take up the time of the Committee. I believe that in principle it is not a good clause. It ignores the very special position of Scotland and its transport system. It is another example of the centralised approach of Whitehall which will not pass entirely unnoticed by Scotsmen North of the Border. No one will quarrel with the desire of the Government to get more traffic on to the railways, but surely this should be done by the railways becoming more competitive and efficient rather than by penalising the road transport industry and interfering with the commericial judgment of those who in my view are best qualified to choose.
In some parts of Scotland there are no railways, and therefore this argument will not apply. In others, including my part of the country (and here I know that my noble friend Lady Elliot of Harwood will agree with me), we do not know whether we are to have a railway or not. The subject has been mentioned several times during the debates in this Committee, but I feel it is very disheartening for the industrialists who are operating in the Border country, in view of the fact that we now have very far-reaching development plans for the area. Any prospective industrialist should be able to know whether or not there are to be railway facilities. I do not wish to say any more, except at this very late stage to urge the Government to think again about this clause and particularly to review the matters relating to Scotland, some of which I have mentioned.
9.8 p.m.
LORD ST. HELENS: I should like to support my noble friend Lord St. Oswald who moved the Amendment in a vigorous and most convincing way. I should also like to say that throughout the Committee
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stage the noble Lord, Lord Winterbottom, has treated us with the utmost courtesy and with painstaking charm, and I felt extremely sorry for him this afternoon when he had to defend an indefensible case. This Bill, and in particular this clause, is designed to force goods off the roads and on to the railways. As my noble friend the Marquess of Lothian made very clear, the method of doing this is not by increasing the efficiency of the railways but by penalising road transport. That is something we deplore. Incidentally the noble Lord, Lord Winter-bottom said that reasons will not penetrate the Benches opposite him. May I reply that knowledge comes, but wisdom lingers.
The criteria mentioned in this Bill several times are speed, reliability and cost, but if we analyse these words we see that they are in the nature of "gimmick", like the "snap, crackle and pop" taken from a breakfast food packet, because it is impossible to equate fair competition as between public transport as it is at present organised and private transport. Under this clause the consumer is to be deprived of his freedom of choice and of exercising hip commercial judgment on the cheapest and most efficient method by which goods should he carried. What is more many firms will have to switch from 32-ton to 16-ton vehicles, and this will cause appalling congestion on the roads, which is precisely what the Government wish to avoid; and where road vehicles are driven off the roads, this will cause increased congestion at the rail termini in the big cities, which we also wish to avoid.
When this clause was being debated in another place one or two questions were raised which were not satisfactorily answered and I wonder whether the Minister, if he cannot answer them now, can let me have an answer in due course. The first point is this. The economic use of trade vehicles depends on their maximum use when fully laden. This means that the planning of back-loads, of laving full loads on return journeys, is of cardinal importance to the economy of a firm. The debate on this clause in Committee F in another place was peppered by examples given by Members of firms in their own constituencies who would no longer be able to ensure return loads because many of these arrangements are

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ad hoc, and, so far as I can see, it will not be possible to make that sort of arrangement under the Bill.
Over and above this, Members put forward from their first-hand experience pleas for many special cases, giving examples of the damage that would be done to various firms and their activities in their areas where they were undertaking tasks of a special nature. To begin with there was a rather long debate on the question of coastal shipping which depends largely upon loads carried to the ports, mostly over 100 miles, by heavy vehicles. It would appear that these loads are to be penalised under the terms of this clause. One of the cases mentioned by honourable Members in another place who come from the South-West was that of china clay, which I understand is one of the main loads carried by coastal shipping. It was said that this trade would be badly hit by this clause. And this was certainly not refuted by the Minister in his reply.
Another case quoted was that of fish, and it applies equally to Scotland and to the South of England. As your Lordships know, this question really does not arise in the case of the deep-sea fleets, because they carry with them their own icing equipment and so forth, and as the catch is taken in it is cleaned and packed in boxes with ice. But it is a very different question for the inshore fleet. The inshore fleet does not carry this equipment, and is dependent upon delivering its fish fresh to market. The inshore fleet arrives at all sorts of odd times. Any of your Lordships who have seen the inshore fleet arriving will know that the boats arrive at irregular intervals, one after the other. The fish is transhipped immediately on to vehicles and immediately goes to the market. If the boat is a little late it cannot afford to wait for the next train which comes in or leaves six or twelve hours later. They are entirely dependent on transporting the goods immediately into refrigerating vehicles which take them straight to market. Often there is only one handling off the ship on to the vehicle, and the fish is sold in the market from the vehicle. This Bill is going to penalise these people, and it is unlikely that they will be able to make their proof on costs.
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Then there is the question of horticultural and perishable goods. I am not going into details but, as your Lordships know, horticultural and perishable goods have to be transported to the market immediately they have been picked, and the less handling they suffer, the better. Here again these goods will not be able to wait for a train. Take the question of fruit-picking. Fruit-picking depends entirely on the weather. And when the fruit has been picked it has to be taken straight to the market. And, again, this is a trade which must go on a vehicle.
The question was raised in the other place about the delivery of milk. The delivery and collection of milk, as your Lordships know, is a trade which goes from farm to farm, and then often to the individual market and to the individual. Twenty-five per cent. of the vehicles which are to-day carrying milk are of over 16 tons weight. Are they to be penalised, or are the vehicles to sit and rot and rust in the garage? The National Association of Millers have stated recently that no method exists for sending flour efficiently by rail. Who is to judge the question of that efficiency?
There is also the question of wine merchants. In their case speed, cost and efficiency do not enter into the matter. The wine merchants of this country, the brewers, send their merchandise by lorry because if they send it in their own lorries with their own drivers, there is something like 50 per cent. less chance of pilfering. This does not come into the question of speed, cost and reliability. Nobody suggests that the railways are pilfered, but if consignments of wines are left on station platforms, or even in locked rooms, they are much more liable to be pilfered than if they were sitting in a lorry owned by the firm and driven by one of the firm's drivers. The wine merchants and brewers go further: they say that if they send their own wine, beer or spirits in their own vehicles there is far less chance of breakages, particularly when the cases are handled by their own employees. They say, also, that what is extremely important to the trade is that they should have a quick return on the "empties". Again forgetting speed, cost and reliability, they have a much better chance of a quick return on their "empties" if they send these goods in their own vehicles, serviced by their own staff.

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Finally, there is the question of seasonal demand. Everybody who is in any form of trade knows perfectly well that there are seasonal demands for their goods. Without wearying your Lordships with examples, I would just point out that the most obvious seasonal demand is the demand related to the season of Christmas, when the trains are overloaded, rush orders are called for, and the only way they can be dealt with is by sending the goods in the firm's own vehicles by road, from door to door, to the person who buys.
These pleas were made in the other place, but they fell on deaf ears, and were not answered. I think that we are entitled to have an answer to-night if the Minister expects us to take this clause seriously. It is not the short-term effect that I personally worry about, but the long-term effect, when vehicles are diverted from the roads, not because they are more efficient, but simply because they are penalised, and lie rusting up in the garages. And, what is worse, these measures are not designed to make the railways more efficient. If these measures were designed to make the railways more efficient I should accept them happily. But they are not. They are designed to penalise the roads, and it is for that reason that I thoroughly object to the clause.
9.20 p.m.
LORD NUNBURNHOLME: I did not intend to intervene in this debate, but I should like to bring out three points. The first is that I oppose the Government on Clause 71 because I think they are going over to the Conservatives on a question of protection, and I did not believe that the Socialists believed in protection—protection for the railways against free enterprise. My Party has always been a believer in free enterprise, and I feel it is a sad blow if—
LORD SHEPHERD: I think that in fairness to the noble Lord we should show him the courtesy of letting him speak in silence. This is a courtesy that has been given to other noble Lords. I know it is late, but I think the noble Lord should be heard in silence.
LORD NUNBURNHOLME: I have made my point about free trade and free enterprise.
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The second point is about the inconvenience and delay in action of bureaucracy. I believe that the noble Lord, Lord Popplewell, said that the licences were issued only once a year. But, as I read the clause, to carry over 16 tons laden weight over 100 miles one has to get a licence for each journey. Therefore, I think that this is a very damaging clause to the transport industry.
LORD POPPLEWELL: I wonder whether I may correct the noble Lord, because I feel there is a certain misunderstanding between us on this point. What I said, in so far as these particular licences under Clause 77 are concerned, is that when these licences are granted they are for a five-year period, not for the period of a year.
LORD NUNBURNHOLME: The point I was trying to make was that for over 100 miles one has to get an individual licence. That is all I have to say on the matter.
LORD ARWYN: On the whole I support the Bill as a progressive measure, but in considering the provisions of this particular clause dealing with the control of large goods vehicles I wish to draw special attention to its effect on the china clay industry (I think this has been mentioned before by noble Lords), which is confined entirely to Cornwall and South-West Devon and has a world export market of the greatest national importance. The opencast pits producing china clay from the decomposed granite mass are in rural areas. The stated policy of British Rail is to establish central loading depots in urban areas, and in the greater majority of cases in my part of the country—I am Welsh but I live in Cornwall—at some considerable distance from our production units. The existing rural feeder roads are already inadequate, and with the proposed increases plus the increased output planned over the next few years we can expect only a gradual chokage which might be very serious. The freightliner system with door-to-door road/rail service again presents difficulties, unfortunately, in this case. The severe time schedule, if demurrage charges are to be avoided, will involve suppliers and customers in increased cost by way of additional equipment and labour. Over the course of many years the china clay industry has evolved a

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system of handling with suitably equipped and specially constructed vehicles which will make for ease of loading and convenient off-loading by tipping at the precise point required by the customer. The whole operation can be precisely programmed, with guaranteed times of delivery.
The expression "china clay" is a misnomer. The "clay" in fact is the result of the "deterioration" of the felspar in a granite mass. It is called "china clay" as it was first used to make china in the 18th century. In fact it is the anhydrous silicate of alumina, and its correct geological designation is "kaolin" It is a basic raw material used in the production of paper, ceramics, paints, rubber and plastics, textiles, pharmaceuticals and many other commodities too numerous to mention. The industry produces a wide range of clays, many of which are often required at short notice to meet special circumstances. There is a need for flexible road transport services, and these now exist. The drivers are experienced, much like milk roundsmen, and the vehicles are not only suitably designed for the delivery of china clay but are easily adaptable for the return journey carrying loads of fuel and other essential supplies to the industry.
The industry exports large proportions of its clay and products, and needs a readily available service to supply loads to the ports in the South of Cornwall. Flexibility is once again a most important factor. A number of commodities, including china clay, have been named in a tentative list published by the Minister, to be scheduled as "prescribed goods", requiring special authorisations under the Bill for all journeys. In these cases, therefore, such authorisations will be needed continually by those operators to maintain their services which feed the ports from which the material is exported.
The provisions requiring special authorisations for the conveyance of loads of over 11 tons would create hardship. The industry is unique and confined to the far South-West. Most of its inland customers are situated in the main industrial centres, anything from 100 to 300 miles away. At the maximum it might mean changing three times. If the industry is to be scheduled under
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the regulation which may be made by the Minister under the heading of "prescribed goods", it will mean applications for special authorisations continually for inland deliveries as well as for exports.
Furthermore, while applications for special authorisations may only be objected to by the Railways Board and/or the Freight Corporation on the prescribed criteria of cost, reliability and speed, the licensing authority will, under the Bill be required to,
"act in accordance with any directions contained in regulations made by the Minister"
and this, in the absence of any knowledge of the nature of the regulations to be made, could appear to place a restriction on the licensing authority's independent assessment of any application made to him.
The ability of British Rail to meet the criteria expressed in the Bill can, from time to time, be undermined by periodical unrests, such as we have now. If the proposals contained in the Bill are carried to their logical conclusion the alternatives now readily available by way of the specialised system of road transport, to which I have referred, will no longer exist. No one would dream of saying that these unrests will never be repeated, or would guess at the length of the period. The fleets of specialised vehicles built over the course of the years to meet all needs would have to be written off, which means a very considerable sum of money on vehicles, apart from special equipment. The cost will have to be recovered, and also that of the capital which will be needed to provide for specialised storage by the inland customer. All this will affect trading opportunities at home and overseas, where markets exist for the final product, for example, ceramics.
To conclude, I must emphasise my concern as a member of the China Clay Council appointed to promote the development of the china clay industry. The limitations which are proposed and might be imposed on the industry's own road transport will have a very serious effect indeed. I would ask my noble friend Lord Winterbottom for an assurance that the Minister will be prepared to consider making regulations under the provisions of subsection (5) of this clause to exclude the china clay industry from requiring to seek special authorisations

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for the conveyance by road of its clays and associated products because of its unique geographical position, its outstanding export achievements, and its importance to the country as the source of a basic raw material the use of which is expanding every year because of its competitive price. Any serious escalation of costs would result in the margin becoming precarious.
LORD NUGENT OF GUILDFORD: We have all listened to the noble Lord, Lord Arwyn, with great interest making out a very cogent case, if I may say so, for china clay. But as noble Lords will know, an equally cogent case can be made out for many other industries, too, and this is the problem that confronts us. Moving towards the end of this very interesting debate, which was opened so ably by my noble friend Lord St. Oswald, I should like to say one word about the answer which was given by the noble Lord, Lord Winterbottom, who had the invidious task of trying to justify quantity licensing. He did so, I thought, in a very straightforward way by telling us that the Government's intention was that there should be a switch of haulage of freight from road haulage to rail of the order of 10 per cent., which in the Government's view would go a long way to wipe out the rail deficit. He added that he thought that some sections of industry needed to have good done to them by being compelled to use rail services more often. As my noble friend Lord St. Oswald observed earlier, this is not a very good week in which to make that case out.
Noble Lords should not overlook the fact that these periodic unrests, to which Lord Arwyn rightly referred, are unhappily a matter of fact, and they influence industrialists in making their decisions, as they are bound to, because so very often freights, unless they arrive on time, will lose their market altogether.
I should like to address myself in the few minutes of my contribution to the debate to what this policy might cost the nation. The noble Lord told us that he thought this switch would benefit the rail services, but he dealt in no way with what the cost would be to the national economy of the resulting delay and dislocation and hi,-,,her costs. I have five points to which I should like to refer. The first point is as to the position of
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the "C" licence vehicle. We al understand that. Industry and trade throughout the country run their own transport fleets in order to carry their own goods, and in this particular category of 16 to 32-tonners there are something like 60,000 "C" licence vehicles. These vehicles are operated by industry for their own goods, and in the main they carry components, spares and materials from one factory to another.
The modern trend, as noble Lords will know, is specialised factories east making components for the final product; for instance, the motor car industry, which then brings together all the components from different factories and assembles the ultimate motor car. The "C" licence vehicle has developed over these post-war years into becoming literally an extended factory conveyor belt. What is ving to happen? At the present time, the links spread all over England from factories in the South to the development areas in the North and in Scotland. The whole of this system is going to be in a state of uncertainty. For all these movements transport managers have to get special authorisations before they can use these big vehicles. British Rail or the National Freight Corporation will be allowed to resist if they wish to; and there will be more than a danger that the industries concerned will fail to get a licence. Inevitably, quantity licensing would oblige industry at least to carry greatly increased stocks in order to cover the resulting uncertainties. It really is difficult to imagine a measure which would more completely disrupt the existing transport system in this particular respect.
The first point I ask noble Lords opposite—I hope somebody is going to answer this—is, what would be the extra cost on this account? The second point I should like to put to the Government is the point referred to by my noble friend Lord St. Oswald concerning the long-term planning of transport. The fact that this elaborate, bureaucratic machinery has to be negotiated in order to get permission to make normal commercial journeys about the country, eve a from one factory to another, makes an element of uncertainty which would completely destroy the flexible transport planning which modern transport engages in.
I hope that noble Lords on the Front Bench would at any rate agree with this

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(I am sure that the noble Lord, Lord Arwyn, would agree) that it is normal to-day for large scale industry to plan its transport arrangements for five years ahead, in terms of vehicles, personnel, maintenance depots and so on, all of which is geared into the general development plan of the industry. Under quantity licensing this kind of comprehensive transport planning becomes completely impossible. All heavy-vehicle use over 100 miles would be dependent on the decision of Government civil servants, the traffic commissioner, plus British Railways and the National Freight Corporation. Again I ask, what would this cost to operate? What additional cost would come out of this for our industry as a whole?
At the same time as disrupting long-term planning of transport in industry it would also disrupt the short-term transport management, which at present is so effective in speed and flexibility in meeting existing needs. This enables the transport manager to react immediately to any sudden need or crisis as soon as it arises. Quantity licensing would necessitate an application to the traffic commissioner, with all the rigmarole involved in the Bill; and reference to British Railways and to the National Freight Corporation. Weeks would go by before the transport manager would know whether or not he could send his vehicle, by which time the emergency would have become a disaster or some other solution would have been found. And the special expediting machinery does not get over this. It still takes time, and the uncertainty is always there, whether you get permission or not. Again what would this cost the economy?
A further point which was made by my noble friend Lord Massereene and Ferrard and it is my fourth point, relates to the switch from the 32-tonner to the 16-tonner. This is bound to happen. Quantity licensing is certain to influence the use of fleets of smaller vehicles of 16-ton capacity, in order to avoid the hazards and uncertainties of the licensing system of the 32-tonner. There are two direct disadvantages to the economy as a result of that. First of all, there is the obvious loss of transport efficiency, with higher transport costs from using smaller vehicles; and secondly, there is the handicap to British heavy vehicle manufacture,
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with the loss of part of the domestic market and therefore the handicap in the export market. Again, what is going to be the cost of this to the national economy?
My fifth and last point is the return load. All connected with the transport world fully understand that all road freight prices are calculated on the basis of about a 75 per cent. pick-up on the return' load. Almost invariably, this is arranged at the last moment, usually through the transport clearing houses. It is impossible to predict what will be offered, but they can pick up these return loads. It is impossible to forecast in advance what they will be, or where they will go; they switch about all over the place. If return loads cannot be picked up, if each time a special authorisation has to be asked for, once again it is going to raise the cost of transport throughout the country. Again the expedited machinery in Clause 75 just could not begin to meet this need. What is the cost of this to the national economy? I have referred briefly to five major aspects in which this system will inevitably and substantially raise transport costs. Have the Government quantitified any one of them? The answer is no, not one; and yet here they come to Parliament to force this system on the industry of the country for the benefit of British Railways without any idea of what the ultimate cost will be to the economy as a whole.
I said on Second Reading that this is easily the worst feature in this Bill. I am very critical of some other things in the Bill too, but this is easily the worst, and I say again what I said on Second Reading: instead of running the railways to serve the country this is a policy of running the country to serve the railways. Our people at the end of the day judge a Party by its capacity to put national interests first, and when they get the chance the nation's judgment on this measure will be an unqualified condemnation, and so will ours to-night.
LORD SHEPHERD: Would the noble Lord not agree, in view of his last remarks, that much of the case that has been made consistently throughout this Bill has been made on evidence and support, financial support, of the Road Haulage Association?
A NOBLE LORD: No answer.
LORD WINTERBOTTOM: We have had a very wide ranging debate that has covered a number of clauses dealing with the proposals for the quantity licensing procedures. Before I reply to the various criticisms, may I thank not only noble Lords who have so courteously offered me their condolences but the noble Lord who has said such agreeable things about me. I hope that the noble Lord weeps for me. I have enjoyed this debate and I shall enjoy answering it. I should like to start with one of the points made by the noble Lord, Lord Nugent of Guildford—it has also been a thread running through the whole debate—and that is the fear that railway strikes and unrest will be such a permanent feature of our economy that no one, unless put under pressure by the licensing authorities, will willingly send their goods by rail for fear that they will be unable to carry on their production because goods are frozen in transit on the railways. That is always a possibility. But I hope noble Lords do not believe that strikes never take place in the road transport industry. I can remember periods when the motor industries of this country were tied up completely for a long time by the strike of the delivery drivers who were not taking the cars away from the factories. As a result, the factories had to stop production because they had nowhere to store the motor cars which they were turning out. The risk exists on the roads as well as on the railways.
I should like to make a point which I think your Lordships, in fairness, will consider worth making. We are trying to create a healthy railway system. Part of the malaise on the railways at the moment is the fact that they are not in a healthy condition. The railwaymen—and I know this from many old friendships—are a group of men who, in the main, are proud of their industry and would like to see it restored, if not to its former greatness at least to the position of playing an important role in the economy of this country. I believe that a great deal of this malaise and unrest will disappear if we can restore the railway system to a healthy economic position. Negotiations, whether on basic wages or on productivity, are always bedevilled by a situtation where the organisation is making heavy losses. I believe that if we restore health to the railway system, we shall have a more
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stable system and many of the fears which have been expressed this. evening will come to nothing.
I turn now to the points made by the noble Lord, Lord Nugent, on the question of cost to the nation. This is a subject which we could argue almost to the end of time. I have come with some figures which have been prepared for me, but I believe that they are entirely hypothetical. I will not argue them; I will simply state them. The Multiple Shops Federation suggest that the Bill will add 3d. in the pound to every purchase made by the public. I have a set of elaborate calculations, which at this hour of night I will not read to your Lordships, but which indicate that the increase will be, at the most, a farthing in the pound. Nobody this evening has quantified or put in the balance the fact that the railways are most certainly losing money in very quantifiable terms, and that society as a whole is suffering substantial losses through the operation of sub-standard vehicles.
Earlier in my speech I referred to freebooting. I do not repent of that remark. My noble friend Lord Hughes, when winding up the debate on the quality licensing of vehicles, indicated the very large number of sub-standard vehicles which are on the roads at the moment and which will be in danger of removal under the quality licensing procedure. Nobody has quantified the cost to society if these vehicles remain on the roads in a dangerous condition. This is a great deal of money, but the actual total is difficult to quantify. The question of cost is something that cannot be calculated with precision at this stage and it would be a waste of lime to attempt it. Some things will cost more money, but without doubt railway losses will be reduced; and let us hope that the cost of accidents, also will be reduced. So we all hope, at the end of the day, the total social cost of the transport industry will improve as a result of these measures and not be made worse.
Before I go on to deal with some of the points made by noble Lords, may I just read one subsection of the Bill which I believe underlines everything else? There have been many arguments about imposing extra costs on certain industries. The noble Lord, Lord St. Helens,

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in a reasoned speech which interested me very much, indicated certain areas where increased costs might be expected as a result of an incorrect application of the intentions of this Bill. Subsection (5) of Clause 74 says:
"The factors relevant for making the comparison mentioned … shall be speed, reliability and cost and the licensing authority shall assess their relative importance by reference to the needs of the person for whom the goods in question are to be carried and to the nature of those goods."
In this case the customer will be right and the customer's interest will be preserved by the licensing authorities. If this Bill means anything, it means that the customer will always be right. Admittedly we are asking the licensing authorities to do a difficult job, but we believe in their impartiality. I believe that over a very wide range of goods the decision will be comparatively easy.
The noble Lord, Lord St. Helens mentioned a number of substances. Let us take flour. If flour can be effectively carried only in road vehicles of specialised design, then subsection (5) of Clause 74 clearly will not force flour on to the railways. The same is true of fish, and, I imagine, of wine—and pilfering increases the cost of transporting from one place to another—and, finally, the same is true of china clay. My noble friend Lord Arwyn expressed concern that, in spite of the fact that specialised vehicles have been developed in order to carry china clay efficiently from the point of excavation to the port, just out of sheer doctrinaire desire to help the railways the licensing authorities will force the china clay industry to use other means.
LORD ST. HELENS: How are the comparative costs going to be worked out if it is admitted that the figures being produced are largely hypothetical?
LORD WINTER BOTTOM: I should have thought that in the case of china clay the figures would be known with great precision. The china clay industry should, because it is a very efficient industry, know precisely what it costs per ton to move china clay to the ports of despatch, and it is that figure which will have to be met by the Railways Board if it is a simple matter of cost. But as I understood the noble Lord, it is not a simple question of cost; there are other
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factors as well, and they will be borne in mind by the licensing authorities.
I believe that this legislation will be sensibly applied. Nobody wants to create mayhem just for the sake of creating it. So I am in no way worried that this attempt to help the railways to minimise their losses is one that we should regard merely as a bureaucratic attempt to limit the liberty of choice of the individual. Unfortunately, in a complex society the choice of the individual is always being limited. I think all of us, on both sides, want to control that limitation of the individual's choice by the State. But from time to time the choice has to be limited in the national interest.
May I say this, as a sort of "side-kick" to the noble Lord, Lord Beaumont of Whitley. Someone has forecast a Conservative victory at the next General Election. It is conceivable that there may be a Liberal victory—who am I to know? The noble Lord preached the doctrine of Manchester Liberalism—Adam Smith would have been proud of him—and accused us of creating an enormous bureaucracy. But would he, as one of the leaders of the Liberal Party, after a victory at the next Election sweep away all licensing procedures? Under this Bill we are sweeping away a very large proportion of existing licensing procedures. Would he sweep away the lot? Would he return to straightforward free trade and competition between individual companies and firms?
LORD BEAUMONT OF WHITLEY: The noble Lord knows very well that the answer to that is, No, and that we believe as he does, and as noble Lords on the Conservative Benches do, in a mixed economy. But if this particular part went through we should certainly sweep that away.
LORD WINTERBOTTOM: Now we know. I do not know whether I have convinced your Lordships. But I know that the hour is late and, because of transport difficulties, we are unable to sit later to-night. But if I have not been able to convince your Lordships, I hope that at least I have caused you to believe that our case is stronger than many noble Lords opposite have made out.
9.58 p.m.
On Question, Whether the said Amendment (No. 202) shall be agreed to?
Their Lordships divided: Contents, 110; Not-Contents, 34.

CONTENTS

Ailwyn, L.

Denham, L. [Teller.]

Milverton, L.

Albemarle, E.

Drumalbyn, L.

Molson, L.

Allerton, L.

Effingham, E.

Monckton of Brenchley, V.

Alport, L.

Elliot of Harwood, Bs.

Mottistone, L.

Amherst of Hackney, L.

Erroll of Hale, L.

Mowbray and Stourton, L.

Amulree, L.

Ferrier, L.

Newton, L.

Ashbourne, L.

Fisher, L.

Nugent of Guildford, L.

Auckland, L.

Fraser of Lonsdale, L.

Nunburnholme, L.

Audley, Bs.

Gage, V.

Oakshott, L.

Balerno, L.

Gisborough, L.

Powis, E.

Bannerman of Kildonan, L.

Goschen, V.

Rankeillour, L.

Barnby, L.

Greenway, L.

Redmayne, L.

Barrington, V.

Gridley, L.

Rochdale, V.

Beaumont of Whitley, L.

Grimston of Westbury, L.

Rockley, L.

Belstead, L.

Harcourt, V.

Sackville, L.

Berkeley, Bs.

Hawke, L.

St. Aldwyn, E. [Teller]

Bledisloe, V.

Headfort, M.

St. Helens, L.

Bolton, L.

Henley, L.

St. Just, L.

Boston, L.

Hindlip, L.

St. Oswald, L.

Boyd of Merton, V.

Horsbrugh, Bs.

Salisbury, M.

Brooke of Cumnor, L.

Howe, E.

Sandford, L.

Brooke of Ystradfellte, Bs.

Iddesleigh, E.

Savile, L.

Buckton, L.

Ilford, L.

Sempill, Ly

Burnham, L.

Jellicoe, E.

Somers, L.

Burton, L.

Kilmany, L.

Strange of Knokin, Bs.

Carrington, L.

Lansdowne, M.

Swinton, E.

Clitheroe, L.

Latymer, L.

Templemore, L.

Colgrain, L.

Lindsey and Abingdon, E

Teviot, L.

Conesford, L.

Long, V.

Thurlow, L.

Cork and Orrery, E.

Lothian, M.

Vivian, L.

Cottesloe, L.

Lucan, E.

Wade, L.

Craigavon, V.

MacAndrew, L.

Ward of Witley, V.

Craigmyle, L.

Macpherson of Drumochter, L.

Windlesham, L.

Cranbrooke, E.

Massereene and Ferrard, V.

Worverton, L

Crathorne, L.

Merrivale, L.

Wrottesley, L.

Cullen of Ashbourne, L.

Mersey, V.

Wynford, L.

Daventry, V.

Mills, V.

NOT-CONTENTS

Archibald, L.

Hill of Wivenhoe, L.

Raglan, L.

Arwyn, L.

Hilton of Upton, L. [Teller.]

Rhodes, L.

Beswick, L.

Hughes, L.

Ritchie-Calder, L.

Bowles, L. [Teller.]

Lindgren, L.

Rowley, L.

Brockway, L.

Llewelyn-Davies, L.

Serota, Bs.

Carron, L.

Llewelyn-Davies of Hastoe, Bs.

Shackleton, L.

Champion, L.

Maelor, L.

Shepherd, L.

Collison, L.

Peddie, L.

Sorensen, L.

Crook, L.

Phillips, Bs.

Stonham, L.

Gaitskell, Bs.

Plummer, Bs.

Strabolgi, L.

Gardiner, L. (L. Chancellor.)

Popplewell, L.

Winterbottom, L.

Henderson, L.

Resolved in the affirmative, and Amendment agreed to accordingly.
LORD WINTERBOTTOM: I beg to move that the House do now resume.
Moved accordingly, and on Question, Motion agreed to.
House resumed.

DURHAM COUNTY COUNCIL BILL
The CHAIRMAN OF COMMITTEES informed the House that the opposition to the Bill was withdrawn: the Order made on June 9 last discharged, Bill committed to the Committee on Unopposed Bills.
House adjourned at six minutes past ten o'clock.