Sitting of 12 July 1968

Preamble
The House met at Eleven o'clock
PRAYERS
[Mr. SPEAKER in the Chair]

SOCIAL SECURITY (SUPPLEMENTARY BENEFIT)
11.4 a.m.
The Joint Parliamentary Secretary to the Ministry of Social Security (Mr. Norman Pentland): I beg to move,
That the Supplementary Benefit (Determination of Requirements) Regulations 1968, a draft of which was laid before this House on 18th June, be approved.
The draft regulations provide for increases in the rates of supplementary benefit in accordance with the pledge given by my right hon. Friend the Prime Minister on 16th January last that the most vulnerable classes of the community would be protected against hardship resulting from those price increases which must result from the effects of devaluation on import costs. The increases are timed to come into effect on 7th October in the same week as the increases in family allowances which have already been approved by the House.
This will be the fourth increase in non-contributory benefits since the Government took office and represents the latest step in the Government's work of improving benefits for those who cannot support themselves and whose income would otherwise fall below a reasonable standard. They show that, even in times of economic difficulty, we are determined to hold on to what has been achieved since 1964 and where possible to make further improvements.
The main proposals are for an increase of 5s. in the single householder rate and of 8s. in the married couple rate, resulting in new rates of £4 11s. and £7 9s. a week respectively, to which, of course, is. added provision for rent. For adult non-householders, there is proposed an increase of 3s. on the scale rate plus an increase of 1s. on the fixed rent addition, making a total increase of 4s.
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Increases are also proposed in the rates for children and for blind people.
The Government have not confined themselves simply to making compensatory proposals for increases in benefit rates, but have considered whether there were other parts of the supplementary benefit scheme where improvements would be particularly helpful. As a result, we are proposing two other changes.
First, it is proposed that the standard long-term addition, introduced when the supplementary benefits scheme started in November, 1966, should be increased from 9s. to 10s. a week. This addition is designed to provide a margin to meet special expenses commonly found in long-term cases and is payable to those over pension age and to others, excluding the unemployed, of course, who have received benefit for at least two years. I might add that 80 per cent. of those on supplementary benefit receive the long-term addition. For them, the basic rates for a single householder and a married couple will be £5 1s. and £7 19s. respectively compared with £3 3s. 6d. and £5 4s. 6d. when we came to office. The total rate, including the rent addition, for a non-householder with long-term addition will rise by 5s. to £4 15s.
Secondly, it is proposed that the age band covering children aged 11 to 15 should be replaced by two bands covering children aged 11 to 12 and 13 to 15 years by giving a proportionately higher increase in benefit on this occasion for children aged 13 to 15 years.
This change has been made to take account of the increase in requirements at adolescence and arises both from outside studies which have been made of children's development and of experience gained in the supplementary benefits scheme itself. Perhaps I can put the case for it more simply and directly by saying that the change is being proposed in recognition of the fact that the needs of a child aged 13 to 15 are clearly, and perhaps increasingly as the years go by, different from those of a child of 11.
These new supplementary benefit rates will go to about 2½ million people of whom about 1¾ million will be old people. For most of them the amount of the increase will be straightforward,

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but there will be some people who, because of the interaction of the proposed regulations with other social security benefits, or with certain specific provisions in the Ministry of Social Security Act, will receive differing amounts. These-people will, of course, be told individually how they will be affected, but it may be for the convenience of the House if I briefly refer to some of the main groups involved.
First, there are families receiving family allowances. When family allowances go up and this increase is not cancelled out by a parallel reduction in the National Insurance dependency benefit, the increases will have to be set against the increased supplementary benefits. As supplementary benefits are designed to bring a claimant's resources up to the appropriate level, family allowances, like National Insurance benefits, have to be taken into account in working out the benefit payable. But, as on this occasion it is proposed that supplementary benefits should be increased at the same time, in almost all cases by more than the amount of the family allowance increase, the effect will be, in general, that the total income of the family will be increased by the full amount of the supplementary benefit increase.
The exception to this will be those families which are wage-stopped, that is, those whose benefit is restricted to the amount which the breadwinner could be expected to earn if he were in work. Where the wage-stop applies, then under the Act supplementary benefit will not be increased, but these families will receive the full benefit of the increased family allowances, because these are payable whether or not the recipient is in work and are therefore ignored in calculating the wage-stop level.
Secondly, there are people receiving more than the ordinary rate under the Supplementary Benefit Commission's exceptional circumstances powers because they have special expenses; for example, for extra food or domestic help which they cannot meet or wholly meet from any long-term addition. As I have explained, the long-term addition is meant to cover special expenses up to 9s., which is to become 10s. as a consequence of the Regulations, but it is in no sense a
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maximum figure and more can be paid when it is individually warranted. Because these people are already getting more than the long-term addition, they will not in general benefit from the increase in it. What will happen is that the amounts for their special expenses will remain the same on 7th October, but 10s. instead of 9s. will be covered by the long-term additional.
This reflects the fact that for the most part any increase in the cost of special expenses is met as and when it is found to occur without the need to wait for a general increase in benefits. For example, if the cost of domestic assistance goes up, the Supplementary Benefits Commission can help to pay for the extra cost at once. The exception to this is where a fixed sum is laid down for the cost of a special diet, where the Commission, on medical advice, has laid down standard figures for special expenses. The Commission has decided that, on the basis of the proposals in the Regulations, these figures should be increased by 1s., so that for these cases the 1s. increase in the long-term addition will in the ordinary case not be offset by a reduction in any exceptional circumstances addition which is needed.
Finally, there is the claimant who pays an inclusive charge for board and lodging. His requirements are not based on the rates in which changes are now proposed, but, under the Ministry of Social Security Act, are determined by the Supplementary Benefits Commission. Currently, his requirements are taken as the amount he pays for his board and lodging plus £1 7s. 6d. for personal expenses. The Commission has decided that this allowance for personal expenses should be increased in line with the other changes by 2s. for a single person to £1 9s. 6d. and by 4s. for a married couple to £2 10s.
The proposals which I have outlined would increase the cost of supplementary benefits in a full year by about £44 million on existing cases. This compares with the estimated net cost of supplementary benefit in the present financial year of £394 million. The draft Regulations affect the lives of about 2½ million families. The task of putting into effect the higher scales of requirements by 7th October will fall on the staff working on

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supplementary benefits in the Ministry and it is, of course, because of the size of this task that we are asking the House this morning to approve the draft Regulations at this time, so that the increases proposed can be brought into operation well before the winter. I therefore confidently ask the House to agree to the Motion.
11.18 a.m.
Mr. Marcus Worsley: The Joint Parliamentary Secretary has treated the House to a very clear exposition of these draft Regulations and we are grateful for them. He mentioned the figure of £44 million and qualified it by saying that it was based on existing cases. I appreciate his difficulty about giving the cost, but the House would be interested to know the sort of estimate which the Ministry has made of the actual cost, because we are dealing with a lot of public money. Obviously, an increase in supplementary benefit scales of this sort brings more people within the scope and therefore expenditure will be rather higher than the £44 million, and I shall be interested to know, perhaps based on precedent, what sort of figure the Government have in mind.
These Regulations are necessary—and we will support them—because of the sharply falling value of the £ under a Socialist Government. As always in these recent years, and even more in this year, Socialism and inflation go hand in hand. As always, the people have to pay for Socialism.
Mr. Speaker: Order. The hon. Gentleman must not widen the debate, or the points he is making will have to be answered.
Mr. Worsley: With great respect, Mr. Speaker, the Parliamentary Secretary advocated these Regulations on the ground that they were fulfilling a Government pledge to protect the weakest in society. But I accept your Ruling and will not pursue this. The point is clearly enough taken.
I want to discuss the actual rise proposed. Supplementary benefit was last raised on 31st October last. At this stage we cannot judge accurately the extent to which prices will rise before next October. Even now there is a whole quarter to go, and heaven knows what
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may happen under this Government. The last cost-of-living index figure that we have to work on was for May. I am told that not until the end of next week will we get the June figure. To use a former Prime Minister's words, we are working somewhat on last year's Bradshaw.
Let us look at the figures and consider whether these Regulations represent an improvement or merely show the Government running to stay in the same place. On the main figure, the Index of Retail Prices had risen 4·3 per cent. since last October. This present increase is 6 per cent., and the likelihood is that by October that figure will have been reached comfortably, and that by the end of this year the value of supplementary benefits will once more be less in real terms than was its value in October last.
The Government have prophesied a 5 per cent. rise in prices this year, of which 3 per cent. will be due to devaluation and 2 per cent. to the Budget and rises in costs of nationalised industries. In other words, there will be a 5 per cent. rise in prices due to things under Government control, or as a result of Government action. We can be absolutely confident that, whatever the rise turns out to be by the time these Regulations come into force, it will be at least 6 per cent., probably more. The right hon. Lady will know that the figure of 7 per cent. has been widely canvassed as the likely rise in prices during the current year.
Much of this rise has been the result of deliberate Government policy, from S.E.T. onwards. By these Regulations the Government are just, but only just, putting the record straight for those on supplementary benefit. For all those on National Insurance benefits, industrial injury benefits, war pensions, service and occupational pensions—all those on small fixed incomes—there will be no help at all, unless perchance they are brought within the supplementary benefits scale. This is the gravamen of the charge against the Government—that rising prices have corroded benefits, corroded the value of savings and hence the living standards of those living on fixed incomes. These Regulations are an appalling confession of the Government's failure to maintain any control on prices. So much for the boast of the Prime Minister, that the £ in one's pocket would not be devalued.

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The figures that I have quoted are from the ordinary cost-of-living index, which has been accepted as the criterion for all these matters. The Minister will be aware that on Wednesday her right hon. Friend the Secretary of State for Employment and Productivity received a Report from the Cost of Living Advisory Committee, which, the House would agree, is of the highest importance. I am aware that the right hon. Lady is not Ministerially responsible for this Report, or directly responsible for its implementation. She will appreciate its extreme importance for her Department, and I hope that without trespassing, she will be able to make some comments upon it. This is the first time that the House has had a chance to debate the Report's conclusions.
The Report advocates a separate index for pensioners. Pensioners form the overwhelming majority of those on supplementary benefit. In advocating this, it is shown that prices which affect pensioners have risen since 1962 considerably faster than the index as a whole. Taking January, 1962, as 100 per cent., the ordinary index in January of this year was 121·9 per cent. The pensioners' household index is assessed in this Report at 126 per cent. The reason was that various items within the budget of the pensioners were quite different from those of the ordinary average householder.
If housing was excluded from the index, then the ordinary index was 120 per cent. and the pensioners' 122 per cent. In other words, on the most favourable showing, the difference was 2 per cent. and on the least favourable, 4 per cent. I think that we must take housing into account in considering these matters. The position is worse for pensioners than the usually accepted figures show, and this is very important. I understand that the Secretary of State for Employment and Productivity has accepted the need for this new index. I hope that the right hon. Lady will be able to say when it will be introduced, and above all, whether she intends to make use of it in the calculations made by her own Department.
These benefits have to be based on a careful assessment of need in the households to which the payments are to be made. Average figures were bandied
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around, but they can hide a lot of hardship. I am reminded of an old chestnut of a story, about the lift attendant in the United States who, asked by a visiting Englishman what was the average tip, replied "half a dollar". The Englishman gave him the half dollar, and the comment of the liftman was "Man, that is the first time that I have ever been given the average tip."
I would like to know on what firm evidence these figures are based. If the index of retail prices is shown to be misleading in the effect of changing prices upon pensioners, which assumptions are correct? Is the relationship between married and single rates still correct? This has been sacrosanct since Beveridge. Has there been a careful study of need in all the circumstances, as commodities have obviously risen enormously in price? I have wearied the House before on this matter. It seems that the difference in need between a single household and a household with two people cannot be as wide as the gap between these two figures suggests. My own experience suggests that one probably has more hardship in single households, for many matters are so critically important. Paragraph 47 of the Report shows how true this is. As an example, one needs no less fuel, perhaps marginally more, in a single household.
These items play a bigger part in the pensioner household than in households as a whole. I wish to be assured that careful consideration has been given to the relationship between these two figures. I should like to be proved wrong, but my feeling is that I am not.
Are there no regional variations in need between the pensioner in Aberdeen and the pensioner in Torquay, or between pensioners in London and in a country village? The Report advocates a feasibility study to see whether another index to measure this aspect could be created. Do the Government accept this? Will it be pressed ahead and will it be taken into account when the scales which we are debating are considered? Do the present rates make sense for the different categories of people who draw supplementary benefit?
In spite of some changes over the years, particularly the 9s., now the 10s., supplement to which the hon. Gentleman

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referred, and the changes for older children in the Regulations, which we welcome—they are a step forward—it is still basically true that this is a flat-rate system. Yet the supplementary pension for a retired person is different from the supplementary allowance for, say, an able-bodied man who is out of work. Need they be so closely linked?
Taking the period since 1948, under all Governments, National Assistance, now supplementary benefit, has risen more sharply than prices and earnings. In round terms, average earnings trebled up to January this year. Assistance or supplementary benefit rates have risen by about 3½ times. I have indicated how much can be hidden in an average figure. My impression is that the rates of pay for the lowest wage earner have risen less relatively than the rates of pay for the higher wage earner. The result is that more and more people find that it pays them better to draw supplementary benefit than to do a job.
That is reflected in growing public irritation, often anger, at abuse of this fact by some people. I do not believe that the numbers concerned are very large, but a few cases can cause a lot of concern and can be very discouraging to the thrifty majority. They can throw the whole system into disrepute. The great majority would prefer to work; of that I have no doubt. Certainly, the great majority of wives want their husbands out of the house; of that I have no doubt, either. But it puts a strain on integrity when a low-wage earner with a large family can get much more if he does not work.
Mr. Pentland: The hon. Gentleman refers to the abuse of supplementary benefits. Has he not just quoted what my right hon. Friend the Minister has already said?
Mr. Worsley: Not consciously. I realise that the right hon. Lady, at by-elections, made remarks on those lines, and I hope very much that she will have something more to say to the House today and that it was not just a question of by-election blues. If her eloquence and mine march side by side in this matter, that is to my pleasure rather than my disadvantage.
The improvements in the wage-stop rules, particularly the rule which reduces
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its operation from six to three months and the rule which introduces, as it were, a national labourer's wage—
Mr. Speaker: Order. We are debating increases in supplementary benefits.
Mr. Worsley: I am grateful, Mr. Speaker.
The improvements to which I have just referred are not dealt with in the Regulations. On the other hand, it seemed to me that they were relevant to the consideration—
Mr. Speaker: Order. We are not debating social security in general and all its problems. We are increasing certain supplementary benefits. That is what we must talk about.
Mr. Worsley: Thank you, Mr. Speaker. I accept your Ruling that to go further into this matter would involve discussion of family allowances, a minimum wage, the rules for unemployment benefit, and so on.
I realise that we cannot pursue that matter in detail. Nevertheless, it would be misleading the House and the country if we did not refer to the concern which there is in the public mind on this subject. Unless the whole system is to be discredited, the public must be reassured that this change of ratio and this increase in the number of people who can be better off by not working, there will be increasing contempt and worry about certain aspects of the social services which would be thoroughly undesirable. I hope that the Government review will include this matter.
I conclude with a general question to the Government. The Regulations increase supplemenetary benefit, but within the framework of what has been done in the past. Can the Minister tell us what are the Government's intentions about supplementary benefits? In 1964, the Prime Minister promised a minimum income guarantee scheme and said that it would be introduced without delay. Have the Government dropped the idea? The right hon. Lady will agree that the renaming of National Assistance as supplementary benefit, which was all that happened, although, I admit, it had greater success than I imagined it would in inducing more people to take it, it did not turn it into an income guarantee system of the sort which the Labour Party proposed when it came to power.

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Do the Government envisage the present system continuing indefinitely? Does the Minister envisage that when changes are made in the National Insurance scheme a system equivalent to or the same as this will continue? In considering the rises which are proposed, it is clearly important for us to know whether this is one of a series of rises and the system is likely to continue in the same way, or whether when the great review comes at last before the public's gaze, four or more years after it was announced as a matter of urgency, this type of supplementary benefit is to be ended?
11.39 a.m.
Mr. George Wallace: I, too, welcome the increases, although I have a rather uneasy feeling that they will prove to be insufficient. I do not intend to imitate the general political knocking in the middle of the speech of the hon. Member for Chelsea (Mr. Worsley), but it is to the Government's undying credit that sweeping changes have taken place in social security. A great degree of humanity is being shown today that did not exist not so many years ago. Since 1964, there has been a tremendous social revolution. Many thousands are now being taken care of that previously were in dire need and nobody except the few charitable persons even knew or cared. The more fortunate are taking care of the less fortunate, and this is as it should be. It is pure Socialism as we on this side of the House understand it.
I am concerned about the tendency in all sections of society to denigrate the great changes taking place in social security by applying generalised descriptions to those who receive benefits, such as "spongers", "layabouts", and "work-shy". On both sides of the House we have said from time to time that we expect the Ministry's officials to act with great care, humanity, understanding, discretion and tact. There is not the slightest doubt that they do so. In my constituency and in all others the officials are doing their best to be human and to deal with people with great care, particularly old people. I pay my tribute to them.
But it is true that human nature being what it is and always will be there must
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be some offenders. Action is being taken, and must be taken. But the House must remember that even when we deal with these people they must live. Let us not exaggerate the position. They are an extremely small minority.
There is a great danger of the whole scheme being undermined by foolish exaggeration. Statements like those made in the Daily Mail on 10th July serve only to cloud the public mind and increase suspicion. Such statements, many of them without proof, are frequently made by all sections of the community. Constituents of mine, working people, have talked to me about those on what they still call National Assistance as though they were a separate section of the community being fed and nurtured by the average working man. People in other sections of the community, who can easily look after themselves, often tend to tell others how hard they should be working, when they themselves are living comfortably without doing much work. These statements are made, and the implications need to be refuted.
In answer to a Question of mine on 5th July, my hon. Friend the Joint Parliamentary Secretary told me who are the people that receive supplementary benefits in the area covered by the Norwich office of the Ministry. We want to know and the public should know who are the people that benefit. In May, 1968, in that area there were 10,100 retired pensioners, 250 widows over 60 and 1,200 other persons over pension age. That is 11,550 out of the 15,300 receiving supplementary benefits. The others were the sick, disabled, and so on, including 1,100 unemployed. The number of people who can be described as taking advantage of the scheme and bleeding the taxpayer white is tiny. That list printed in HANSARD is an indication of the wide scale over which the scheme operates, giving dignity to a great number of people.
Complaints have been made. There was one in my local newspaper by a constituent who complained of the people being taxed, retaxed and taxed again so as to give recipients of supplementary benefits an easy living. It is the responsibility of us all to see that these people, particularly the old-age pensioners, do get an easy living. One should reply to

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such charges with the simple quotation that we should bear one another's burdens, and, indeed, do so.
Provided that the nation realises its responsibilities, and the facts are given of the benefits of the scheme and the people covered, there is no danger of society's being undermined. I think that the great majority of people accept their responsibilities. The statement in the Daily Mail that living off the state is a national disease is a gross distortion of the great social changes that have taken place, and a reflection on the people now benefiting, particularly the old-age pensioners, honest, decent people who have served their country and who deserve all the assistance we can give.
11.46 a.m.
Mr. Tim Fortescue: While I agree with every word my hon. Friend the Member for Chelsea (Mr. Worsley) said, I had intended to keep right away from political matters and make an entirely non-political speech. But I must chide gently the hon. Member for Norwich, North (Mr. Wallace).
Mr. Speaker: Order. It will help the reporters if the hon. Gentleman will speak up.
Mr. Fortescue: I must childe gently the hon. Member for Norwich, North for claiming as the unique prerogative of Socialism the system whereby the more fortunate look after the less fortunate.
In this country one can trace that attitude back at least to Queen Elizabeth I, with the Poor Law. In more recent times, during the famous 13 years of Conservatism, there was a good deal of the more fortunate looking after the less fortunate. It is not simply Socialism that has done this, and the Socialist Party should not take it to itself uniquely.
To some of us, if not all, there is something distasteful, almost abhorrent, in a group of well-paid, comfortably-off people having to calculate whether the least fortunate in the land should have another 1s. 6d. a week. There is no alternative and I do not in the slightest degree wish to denigrate the efforts of dedicated civil servants who have to do it. I myself should not like to have to try to work out whether the poorest need another 1s. 6d. to bring them up to
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a just tolerable level of income and comfort. It must be a task for heroes, and I bow to those who must do it, including the Ministers and Members.
I should like to think of other ways in which the people who draw supplementary benefit can be helped, quite apart from the financial way which we are discussing. I think that my remarks will be strictly in order. The Minister may know, and if she does not I am delighted to tell her, that in the City of Liverpool a way has been found to give such assistance.
In the huge housing estate of Speke, in my constituency, and in other housing estates in Liverpool, the city's Welfare Department has set aside houses and flats where what are known as problem families are looked after for up to six months. This was a brave thing to do, because there is a great housing shortage in Liverpool. In most cases the families are looked after by a devoted woman, a house mother, as it were, who teaches them how best to spend the money they have. She teaches them household budgeting, how to keep the place clean, how to feed the children, and how best to live on the very exiguous income that the family has either by the breadwinner's own efforts or through benefits.
After a few months the family is sent out into the world again; another is taken into the same premises, and the whole process starts again. It is a most valuable side of our welfare services which should be encouraged in every possible way.
Can the right hon. Lady see any way of encouraging such care for the poor, so that a part of the huge sums of money which we are now spending on supplementary benefits—£394 million at present rates, as we have heard this morning— could perhaps be diverted to teaching people how to spend their own incomes better, rather than giving them additional money and letting them get on with it?
Mr. Speaker: We cannot now talk about diverting the sum of £394 million. We are talking about a £40 million increase in supplementary benefits. The rest of what the hon. Member said was in order.
Mr. Fortescue: I had concluded my remarks, Mr. Speaker.
11.50 a.m.
Mr. Kenneth Baker: When I first read the details of these Regulations in HANSARD on 17th June I had the impression first of all that there was going to be a real improvement in the actual level of benefits, but having done my sums subsequently I found that these increases we are discussing this morning are not collectively an act of progress but an act of restoration, for they are restoring to supplementary benefits the level of purchasing power which the supplementary benefits had in October of last year. That is the purpose of these Regulations.
The reason why my hon. Friend the Member for Chelsea (Mr. Worsley) touched upon the matter of the cost of living is that it is fundamental to what we are discussing, because the cost of living, as everybody well knows—I am not making a party point now at all— has gone up substantially this year. The Retail Prices Index has gone up 4·3 per cent. between last October and May. What is more important is the increase in food prices, and this is the more important because recipients of supplementary benefits spend a very high proportion of their supplementary benefits on food. The increase in food prices since October, 1967, has been about 5·6 per cent. Later this year, the Government have predicted, prices will go up by at least another 1½ per cent. to 2 per cent. This is one of the very few economic predictions they are prepared to make with any degree of certainty. So the increases we are talking about this morning barely take those increases into account.
The increase for the single householder is 5·8 per cent. and that for a married couple 5·6 per cent. So these Regulations are a very expensive way of marking time—a very expensive way, £44 million we are to approve this morning, and yet, as a result, nobody who draws these benefits will be any better off in real and absolute terms than he was in October, 1967.
The declaration which the Prime Minister gave in November last year on devaluation, and again on 16th January, 1968, is an undertaking we would all welcome, that of protecting the poorest people in our society. But how shabby and inadequate that declaration is. We should commit ourselves, as indeed both
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parties, as indeed all politicians, in this country do, to definite improvement in the position of the poorest people of this country, and it is most regrettable that, after this enormous expenditure of £44 million, the position of the very poorest people is not going to be any better than it was in October, 1967.
Mr. David Winnick: What about October, 1964?
Mr. Baker: The other point I am coming on to is that there are some people who are going to be very much worse off who are not covered by these supplementary benefits. I have in mind—
Mr. Speaker: Order. It is those who are not covered by the supplementary benefits of whom we cannot talk today.
Mr. Baker: I take your point, Mr. Speaker. I am trying to elaborate the point that there are many people not covered by the Regulations who are some of the most under-privileged and desperately poor people in our community today. Take, for example, the widow who has a pension of £4 10s.—by October, 1967, standards. The purchasing power of her widow's pension today, if she does not receive any supplementary benefit, is £4 5s. 6d. So these people who are on fixed pensions of this sort, war disability pensions—
Mr. Speaker: Order. I am sorry to interrupt the hon. Member, but a debate on Regulations is confined to what is in the Regulations. The hon. Member can argue about those who are getting supplementary benefits, he cannot argue about those who are not getting supplementary benefits. Not in this debate. He must find some other debate.
Mr. Baker: Thank you for your Ruling, Mr. Speaker.
I will move on to the actual details of the Regulations and to where I think there is a considerable inconsistency. The point I was making very simply was that these Regulations are essentially a process of marking time. Nobody will take a step forward as a result of them, and in fact some people will take a step back. Coming to the details of the Regulations, and I am one of the few speakers who has come to the details of the Regulations, I should like to ask the Minister

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a specific question about those relating to blind persons.
Mr. William Molloy: I should not like that remark to go on the record without correction. The first thing which the hon. Member for Chelsea (Mr. Worsley), speaking from the Opposition Front Bench, said was to compliment my hon. Friend on his exposition of the Regulations.
Mr. Baker: I thank the hon. Member for his intervention and I thank the Joint Parliamentary Secretary for reading out the Regulations very carefully and not missing a comma.
The question I should like particularly to ask the Minister is about the supplementary benefit increases for blind persons. The increase for a single person who is not blind is 5s. a week, or, percentage-wise, 5·8 per cent.; for a married couple who are not blind, it is 8s. a week or 5·6 per cent. Coming to the blind persons we find that for these people, who, of course, suffer a high degree of disability, the increase, for a couple living together of whom one is blind, is only 4·9 per cent., namely, 8s., and for a couple living together who are both blind, an extreme degree of affliction, the increase is only 4·4 per cent.
I should like to know why there is a difference here, why the rate of increase applicable to those not blind is higher while those who are blind get a lower rate of increase, when the increase for the blind should be not 8s. but 10s. 6d. by the standard which is applied to the non-blind. My hon. Friend the Member for Liverpool, Garston (Mr. Fortescue) referred to heroes who did the calculations. I can only assume that they have not been very heroic in this matter because they have not got their sums wrong, and I can only assume that there must be a reason for this differential increase, and, if there is a reason. I should like to know why the blind do not get a bigger increase instead of a smaller increase.
We are talking about an expenditure of some £44 million, a very large sum of money, and I think it is a cause of deep regret to many people in this House and on both sides of it that as a result of this expenditure many people are not really going to be any better off, and I believe that if this process, of increasing
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the benefits but not taking into account inflation and purchasing power, is to go on, then obviously they will have our sympathy and that of both sides of the House. This is a very expensive process, because we are having to run very fast and spend a great deal of money to stand still.
There are many groups, particularly the elderly, who are not going to get the right sort of benefit under this scheme. I have in mind particularly the sort of cases I seem to get frequently in my constituency, the case of the elderly widow or spinster, the woman living alone, who probably draws a fixed pension of some sort and can draw supplementary benefit. Both these sorts of people have a particularly raw deal under our social security system, a particularly raw deal, and this, alas, is beginning to be shown in books, such as, for example, that by Professor Townsend, and the Ministry of Health's study of the aged. They are beginning to identify a particular need.
I believe that the £44 million would have been much better spread if it had been spread on selective and identifiable need. I hope that hon. Members opposite will become more committed to this thought, since this is an enormous amount of money from which there will be little real improvement. When we next come to discuss increases in supplementary benefits, I hope that particular attention will be paid to the remarks made by my hon. Friend the Member for Garston that we must identify need, such as chiropody need, home help need, "meals on wheels", and so on, so that increases are made also in care benefits. This is the only way to mitigate poverty and to move towards its abolition.
12.1 p.m.
Mr. William Molloy: I rise in the briefest of interventions to say that I believe my right hon. Friend should be congratulated on introducing the Regulations in an effort to maintain what was commenced by the Government, namely, the greatest improvement in our social services that the country has ever known. The hon. Gentleman the Member for Acton (Mr. Kenneth Baker) said that the result is to catch up with the position as it was in 1967. If the Regulations were to try to catch up with the position in 1957, £400 million

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would not be enough. The probability is that it is not generally understood that my right hon. Friend must take cognisance of the Supplementary Benefits Commission.
I am grateful that this has been done with reasonable speed so that the fallback which has affected those who are in receipt of benefit has now been made good. Many hon. Members would like to see an improvement on this figure for the reason that originally it should have been a larger figure. But this does not detract from the argument that the Regulations maintain a standard which was set by the Government in 1964-65, the like of which we have never before seen. I believe that many hon. Gentlemen opposite are sincere in their study of the problem, and they should agree that the Regulations operate for the benefit of the mass of ordinary people. They ought not to dig up the odd one or two people who exploit the social services. The House cannot legislate on the existence of a minority of cheaters.
It takes me back to the days when many of us lived in grinding poverty, and those were not the days of Queen Elizabeth 1. We had to suffer the humiliation of liars, in the House and elsewhere, who told us that we would keep coal in baths we did not have. This attitude is still extant among sections of the party opposite. I hope, therefore, that my right hon. Friend will not be deterred by the jealous criticisms of hon. Members opposite who are jealous of the fact that they did not do what they ought to have done and jealous of the fact that we have done it. I congratulate my right hon. Friend on introducing the Regulations. I hope, if the need arises, that she will not hesitate to bring further Regulations to the House.
Mr. Speaker: Order. I am in difficulties. I am not blaming the hon. and noble Gentleman, but hon. Members who seek to catch my eye and then change their minds. It is a rather temperamental morning.
12.5 p.m.
Mr. Peter Tapsell: We all recognise the need which the Regulations are intended to meet; we are glad to see
916
them brought forward and happy to support them.
I have three points I wish to make. My first point is that the mere necessity for the Regulations indicates the alarming rate at which prices are rising as a result of devaluation.
Secondly, the Regulations will help only one-quarter of the retirement pensioners and one-fifth of the widows, while many others in both those categories and other people living on small fixed incomes are suffering increasing hardship from rising prices.
My third point is the most important one. Perhaps I could have the Minister's attention for a moment, because I have a Parliamentary Question down to her on Monday on this point. She referred in her speech at a recent borough election to the growth in the number of lead-swingers who were drawing supplementary benefit to which they were not entitled. During ten years since I first entered the House I have noticed that an increasing number of my constituents complain to me about abuse of the social services and particularly of supplementary benefits. I must admit that when I press them they nearly always refuse to give me specific chapter and verse. The fact remains that the number of criticisms of this kind which reach me—and which I assume reach the right hon. Lady otherwise she would not have made the remark she did—is growing.
Since I believe that the existence of supplementary benefits and the concept of them as being an inherent part of our social services and a form of benefit to which people are just as entitled as they are to any other, it has been a healthy development. The stigma which used to be attached to it, and which still is by older people, is less felt by younger people. That is desirable. We all want to see our affairs run in a humane and Christian way. Where there is real need the Supplementary Benefits Commission has a vital part to play and we all support it in doing so.
As my hon. Friend said in his opening remarks, the success of the policy depends upon continued public confidence in it. If there has been a growth in the extent of abuse, and if there are people who draw supplementary benefit to which they are not entitled, I hope

917
that we shall hear from the right hon. Lady what steps she intends to take to try to stop this.
12.9 p.m.
Mr. David Winnick: I believe that there are very few people who abuse the social security system, and those few are people whom I would describe as having personality difficulties. If, for example, the two hon. Gentlemen opposite were to see the people who abuse our social security system they would find no one from their old school because old Etonians who do not wish to work, and there may be one or two, can do so without going on supplementary benefit.
Mr. Speaker: Old Etonians are not dealt with under the Regulations.
The Minister of Social Security (Mrs. Judith Hart): Would I be in order, Mr. Speaker, in telling my hon. Friend that in fact some, a very few, of the people who are abusing the scheme are from public schools.
Mr. Winnick: The supplementary benefits scheme as it applies to retired people is a great advance on what has existed before. The supplementary scheme as it applies to retired people who have to live on State pensions is a right, it is not a charity. The failure of the old system was that so many retired people refused to draw National Assistance when they were entitled to it for the reason that they looked upon it as a charity. To a large extent, I believe that the Ministry has been far more successful in convincing a great many retired people that they can get supplementary benefit as of right, and that is a considerable advance on the old system.
The hon. Member for Chelsea (Mr. Worsley) asked how long the supplementary benefits scheme will remain in existence. I do not know what the Minister will say in reply but, as I understand the position, the supplementary benefits scheme will remain in existence for a long time to come, simply because there is no other alternative. Unless the existing old age pension is increased substantially, it is only right and proper that we have a supplementary scheme to ensure that people receiving the old age pension can, if necessary, claim a little
918
more to give them a decent standard of life.
I have been told that the value of the old age pension now is 20 per cent. higher than it was before we came to office. That is a tremendous achievement—
Mr. Speaker: Order. On these Regulations, we cannot discuss the old age pension. The hon. Gentleman knows that they are about supplementary benefits, which are being increased under them, so he must talk about supplementary benefits.
Mr. Winnick: I am grateful, Mr. Speaker.
It is necessary to have supplementary benefits, but it is also necessary to increase them from time to time. Although I am pleased with what is being done, I am sure that my right hon. Friend would be the first to agree that there are still many retired people who have a job to make ends meet, and no one can be complacent about their difficulties.
Can the Minister look at the position of retired people who are council tenants and who normally receive a rent rebate? If they receive supplementary benefits, that rebate is taken away by the council. I have been informed about a number of council tenants in receipt of supplementary benefit who no longer receive rent rebates from the local authority and seem to be in a worse position than before. It is perfectly true that the amount of rent is paid by the Ministry of Social Security, but I am told by some of my constituents that they are in a worse position than if they were receiving the rebate. Perhaps my right hon. Friend will look into that problem.
My final point relates to heating arrangements. I believe that my hon. Friend the Parliamentary Secretary said that heating arrangements are allowed, and we know that quite a number of retired people receive such arrangements. But could more be done? It seems that many retired people receiving the old age pension and supplementary benefits still find it difficult in winter months to warm their rooms sufficiently. Suggestions have been put forward for heating arrangements, and I hope that my right hon. Friend will look at them.
12.12 p.m.
Lord Balniel: These Regulations are designed to protect those living on supplementary benefit from the full impact of rising prices which are consequential partially on devaluation and the rising cost of imports, partially upon the normal inflationary process in our society, and partially on the Budget itself
The arguments on behalf of the Opposition has been put forward comprehensively by my hon. Friend the Member for Chelsea (Mr. Worsley). I only want to speak on one or two broad issues. However, shortly before the debate began. I thought that I ought to look at the debate which took place on 24th July, 1967, when the Government last introduced proposals to increase supplementary benefits—on 30th October, 1967. It so happens that the volume of HANSARD fell open at a speech by the Chancellor of the Exchequer on the same day.
In the course of his remarks, he said:
"Let there be no dodging about this. Those who advocate devaluation are calling for a reduction in the wage levels and the real wage standards of every member of the working class in this country. They are doing this and the economists know it."
He went on:
"I just do not want either to devalue our own word or to bring down the standard of life of our own people."
Then some bright spark, an anonymous hon. Member, cried out:
"Well done Jim!"—[OFFICIAL REPORT, 24th July, 1967; Vol. 751, c. 99–102.]
Today, almost a year later and after devaluation has taken place, we find ourselves debating similar Regulations designed to improve the supplementary benefits, or national assistance benefits as they are still widely known in the country—designed to come into effect on 7th October of this year. This time, the proposals have to be debated in the context of a Budget which has been very severe, in the context of a statutory wage freeze, and in the context of pretty sharply rising prices.
The Prime Minister said that it was his purpose and one which was shared by the whole House to protect the most vulnerable sections of the community. The Minister of Social Security has said quite rightly that these Regulations are part of the Government's effort to protect the most vulnerable sections of the
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community, namely, those living on supplementary benefit, from the full impact of rising prices.
However, this step will cost the taxpayer at least an additional £44 million, and it is right to point out in this debate that the taxpayer's money is being used not to achieve an improvement in the living standards of those living on supplementary benefit but merely to keep pace with the rising cost of living. To adopt the words used by my hon. Friend the Member for Acton (Mr. Kenneth Baker) this additional expenditure of £44 million is merely marking time for those who are in receipt of supplementary benefits.
The cost on the total economy of the country is very substantial. The Parliamentary Secretary said that, according to the last Civil Estimates, the total cost of the supplementary benefits scheme was £394 million. These Regulations increase that burden by a minimum of £44 million. Even with this increase it is probable that, by the end of the year when the increases have been implemented, the purchasing power of the supplementary benefits will be less than it was in October, 1967.
I will not repeat the detailed figures advanced by the Parliamentary Secretary or those given by my hon. Friend the Member for Chelsea. In broad terms, the proposals are to increase the benefit for a single person by 5s. a week and for a married couple by 8s. a week. According to our calculations, they represent an increase of 5·8 per cent.
Unfortunately, I have not had a great deal of time to check the figures required for this debate. Yesterday, I was ploughing my way through the floods in the West Country trying to return to the House. However, I believe I can confirm the figures given by my hon. Friend the Member for Acton that between October of last year, when the rates of benefit were last increased and May of this year, the Index of Retail Prices has risen by 4·3 per cent. Food prices lie at the very heart of the daily budget of families of the lowest income scales, and they have risen by 5·6 per cent between October, 1967, and May of this year.
The Government have told us that during the present calendar year they expect, as a consequence of devaluation

921
and the Budget, that prices will increase by 5 per cent.
Mr. Roy Roebuck: I sympathise with the noble Lord on recently emerging from the Flood, but his argument seems rather antediluvian. I do not: understand this part of the hon. Gentleman's argument when he talks about rising prices. Is the hon. Gentleman saying that the proposed increases are not high enough? Are the Opposition advocating higher increases? If that is so, can the hon. Gentleman relate that to his argument about marking time? My recollection of the period when the Conservative Party was in office is that there was not even any marking time. The standard of living of the pensioner went clown and down, and all we got was the insulting observation of the right hon. Member for Kinross and West Perthshire (Sir Alec Douglas-Home).
Mr. Speaker: Order. This is a very long intervention and it is rather too wide.
Lord Balniel: The hon. Member for Harrow, East (Mr. Roebuck) says that my argument is antediluvian. The hon. Gentleman's interruption is premature, because this is one of the points to which I shall be referring in my speech. Not only was the hon. Gentleman's interruption lengthy and premature; it was factually mistaken.
During the post-war period average earnings have risen by about three times and supplementary benefits have risen by about three and a half times. I can assure the hon. Gentleman, if it will satisfy him, that this was one of the arguments to which I was going to refer in my remarks.
I now turn to one or two broad aspects concerning these Regulations. As we so rarely have this opportunity in the House, I think it is right that we should pay a tribute to the excellent work which is done by the officers of the Supplementary Benefits Commission. My hon. Friend the Member for Liverpool, Gars-ton (Mr. Fortescue) said that their task was heroic. Few of us would like to undertake the extremely difficult task they fulfil of assessing whether a person is making a real effort to find employment; whether he has merely temporarily found that life has become too much for
922
him; whether he has some kind of personality weakness, or is just work shy. I think that one must also say that the change in people's attitude to the old National Assistance Board and to the present Supplementary Benefits Commission is due infinitely more to the way in which the officers of the Commission conduct their business, inquiries, interviews and visits than to the legislation which we in this House try to pass.
None the less, when we look at the legislation on this subject which has been passed by this House it is imbued with a humanity of purpose which I find very impressive. There has been a fine impulse in all Governments, of whatever political complexion, to try to raise the living standards of the poorest in the community. In the long trend of postwar efforts to try to help the poorest in our community, the level of supplementary benefits, as I pointed out to the hon. Member for Harrow, East, has risen faster than the rise in earnings and the rise in prices. Although I cannot prove it statistically, I think, as my hon. Friend the Member for Chelsea said, the level of supplementary benefits has in particular risen substantially faster than the rise in the earnings of the lowest wage earners.
The very generosity of purpose of this House has highlighted a problem concerning the lowest wage earners with several children. During a time of statutory wage freeze, combined with rising prices and rising supplementary benefits under these and previous regulations, this problem will be seen to be becoming increasingly acute. Despite the increase in the amount of family allowances, there are about 200,000 or 250,000 children living in families where the bread winner's income is below supplementary benefit levels because of low wages. When the supplementary benefit goes up on 7th October this year the number of families in employment living below the minimum level laid down by Parliament as compatible with a civilised society will increase.
I do not want to ask the right hon. Lady a large number of questions at the end of the debate, but I wonder whether she will find it possible to tell us how many children she expects will be living below supplementary benefit level when the new benefits come into operation in

923
October as against the figure of 200,000 or 250,000 today.
The overall result of this generous impulse to try to help the poorest sections in our community is surely twofold. First, there is the undeniable fact that there are a number of families living below this minimum standard which we regard as acceptable. Secondly, for those who are on the lower and, indeed, the lowest wage levels, there is in financial terms a decreasing incentive to work. If they become unemployed they will get the same amount of money from the Supplementary Benefits Commission. Because of the wage stop of course they cannot get more than they were earning when in employment.
Overwhelmingly—and this is why I resented some of the interjections in the debate—the beneficiaries of the Supplementary Benefits are the chronic sick, the elderly, and the pensioners. But there is increasing resentment by those who are working on low incomes that they do not get as much as some persons who are out of work. Indeed, with my rather large family, especially since the right hon. Member for Sowerby (Mr. Houghton) has spoken, I am almost beginning to feel like a social delinquent because I receive very substantial benefits. But the Government are faced with the really difficult twofold problem of eliminating family poverty and at the same time providing some incentive to work for those at the lowest income levels. The amount of abuse is small as a proportion of the total benefits—but it is real. Incidentally, I think the abuse lies primarily in the sphere of earnings related unemployment benefit and the redundancy payment scheme rather more than in the Supplementary Benefits Commission.
I would be out of order in repeating the argument which I have so frequently advanced for reconstructing the family allowances scheme, but I want to make four brief points. First, I think that there should be a really thorough study of the many and different means tests which are now operating in the country as a whole. I am not suggesting that one form of means test is applicable for all different types of problem, but I have seen it suggested by a most eminent professor in this sphere, Professor Titmus,
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that about 1,000 means tests are operating at the moment. There seems to be a strong argument for simplification. Indeed it is long overdue. I hope that the right hon. Lady will find it possible to achieve something along these lines.
Perhaps I might ask the Minister in passing whether it will be possible to give any progress report about her so-called entitlement campaign, whereby she was encouraging people to take the fullest advantages of the welfare benefits available to them. The right hon. Lady said in her letter of June that she would that month be sending out more than 14 million leaflets to call people's attention to the benefits to which they were entitled. I think that it would be interesting to hear what progress has been made. It has served one useful purpose for me personally as I have discovered that some of my children are entitled to free school meals.
Secondly I think that there should be a tightening up of the administration of the Supplementary Benefits Commission to ensure that nobody can continuously turn down jobs on the ground that he would not be working in his normal occupation. On the whole I feel that a tightening up of administration is preferable to the kind of suggestion made in the Report of the National Insurance Advisory Committee on Conditions of Unemployment Benefit for Occupational Pensioners, but this is a matter which we shall have to debate in the future.
Thirdly, I believe that the redundancy payments scheme should be thoroughly examined. There is a widespread feeling that there is a small amount of abuse by both employers and employees, and I should have thought that this was something which could perhaps be referred to the Public Accounts Committee for examination.
Mr. Speaker: Order. The hon. Member must come back to the debate.
Lord Balniel: In deference to your Ruling, Mr. Speaker, I shall immediately do so.
Mr. Molloy: On a point of order. Mr. Speaker, your Ruling makes it difficult for some of us, because the hon. Member for Hertford (Lord Balniel) has made a point which I dispute, and if I tried to refute his argument you would naturally rule me out of order.
Mr. Speaker: That is a classic statement of the reason why nobody should get out of order.
Lord Balniel: It only remains for me to apologise if I have strayed and caused you, Sir, any embarrassment.
Fourthly, the Report of the National Advisory Committee on the Wage Stop, in so far as it referred to supplementary benefits;, suggested that there should be a special review of the position of the disabled. Can the right hon. Lady say whether it is possible for her to initiate such a special review to secure for the disabled the fullest benefit of the supplementary payments which are available?
This Order is a reflection of the rising prices in society. At a cost to the taxpayer of £44 million, it will merely ensure that those in receipt of supplementary benefits are kept at the same standard of life as they were in October, 1967, and in so far as it brings help in that respect, of course we support the Order.
Mr. Roebuck: The noble Lord said that he would tell the House whether he thought that the amounts in the Order were adequate, or whether the Opposition thought they ought to be higher. Perhaps he will tell us that now.
Lord Balniel: I thought my last remarks made it clear that we supported the Order. We think that this sum of money is necessary to compensate for the erosion in the purchasing power of the supplementary benefits which were put up only last year.
12.33 p.m.
The Minister of Social Security (Mrs. Judith Hart): As often happens with a short debate, this has been a good one. We have had a number of short but very much to the point speeches in which the attention of the House has been directed to the relevant points which hon. Members have put forward. I have been asked a number of questions, and perhaps I might deal with one or two of the odd questions which have been asked before I go on to my more general remarks.
The hon. Member for Hertford (Lord Balniel) asked about the review of the position of the disabled in terms of the wage slop. The position is that one
926
by one discussions will go on between my Ministry and the Department of Employment and Productivity because we have to keep in close step on any new measures which are taken concerning the disabled worker. Progress is being made, and I hope that within a matter of two, three, or four months it will have been possible to have reviewed every case of the disabled in terms of the wage-stop. This is obviously bound to take a good deal of time, and must depend on the pressures on a local office, because it means doing individual work for each case.
I have a Question down to me on Monday about the entitlement campaign, and perhaps I should not anticipate what is to be said then.
On means tests, I think that I have on several public occasions drawn attention to the work that was done—probably the noble Lord was referring to the same piece of work—by Michael Reddin, at the London School of Economics. He produced a paper some months ago which has been published as a Fabian Society pamphlet. He investigated the multiplicity of means tests, and the variation between them in terms of various local authority benefits. In drawing attention to the work which has been done, I have been indicating that it seems to me that it would be an extremely good thing if we could work towards something a little more multipurpose, a little more uniform, by way of testing the entitlement of people to all these various benefits, most of which are administered by local authorities and of which obviously they must retain control since it is their money and their schemes, and some of which are administered by Government Departments.
Clearly this is one of the new areas of problems which have recently been identified, and I agree with, the hon. Gentleman that it is useful to draw the attention of the House to the fact that here is a problem which is not incapable of solution, but on which clearly a great deal of complex work will be needed to arrive at a solution.
I turn, now, to some of the more general points which were made, and I propose to deal first with the question of the pensioners' index which was mentioned by the hon. Member for Chelsea

927
(Mr. Worsley). I think that the hon. Gentleman knows—and I cannot today add to what was said—that my right hon. Friend the First Secretary, in accepting the Cost of Living Advisory Committee's Report, said the other day:
"The Government accept the Committee's recommendations and steps will be taken to implement them as soon as this can be done. The detailed study of the technical problems of compiling reliable price indices for regions is beginning immediately."—[OFFICIAL REPORT, 10th July, 1968; Vol. 768, c. 109.]
That answers one of the hon. Gentleman's points about the cost-of-living index for pensioners. As soon as this can be done it will be carried out.
This bears closely on the work of my Department. It bears closely on my need to take full account of the particular problems of pensioners as distinct from those of the population in general. In so far as this is relevant to the debate, I think I should point out that the particular difference which was noted by the Cost-of-Living Advisory Committee between the cost-of-living for the population as a whole and the cost-of-living for pensioners was the bearing which housing costs had in this respect. The important point to note is that the pensioner index minus the element of housing diverged only half as much from the general index as did the pensioners' costs including housing.
The relevance of that to this debate is that where supplementary benefit rates are concerned this index figure minus housing is appropriate because rent and other housing costs are allowed for separately in the assessment of supplementary benefit. Therefore, a pensioner who is on supplementary benefit has account taken of this major element which seems to differentiate a pensioner's index from the index relating to the population as a whole. Therefore, we need not worry that, in terms of supplementary benefit, we are not already taking pretty good account of most of the points which emerged from the survey conducted by the Cost-of-Living Advisory Committee. This is not necessarily the case for those who are not receiving supplementary pensions or benefits.
I turn, now, to the cost of the proposals. I was asked by the hon. Member
928
for Chelsea whether I could give some estimate of the additional costs which would arise as a result of new claims to benefit following the increase in the level of benefit. It is not possible to answer that question. We cannot say exactly how many will be brought within the scope of the scheme as a result of the increases nor the proportion of those who will make a claim. All that one can say is that since the amounts to which they will be entitled will be small, the additional cost as a result of extra claims cannot be expected to be substantial.
I was asked by an hon. Member opposite what cost this represents to the nation. In terms of public expenditure, this uprating in supplementary benefit does not involve an increase in public expenditure as it is measured because of the constant price element which is involved in public expenditure. The supplementary benefit uprating next autumn is being made solely to compensate for rising prices.
Therefore, although in money terms the cost is about £44 million, since all this sum is to enable the rates to keep in line with prices none of it counts as an increase in public expenditure at constant prices. I know that that point is apt to be somewhat confusing to those who are less familiar with the intricacies of the financing of social security.
The relationship with price increases has been one of the main themes of the debate. As my hon. Friend the Joint Parliamentary Secretary said, the main increases which are proposed represent increases of just under 6 per cent., as the noble Lord also said. In saying that, however, one does not convey the full extent of the increase because of the special needs of which account is being taken outside the basic increase in rates. The main factor here is the increase in the long-term addition from 9s. to 10s. In the majority of cases, this will produce an increase of 6s. for the single householder, or about 6·3 per cent. more than the existing rate of benefit, including the long-term addition. For most, therefore, the increase will be 6 per cent. or above.
As to the relationship between the increase and the increase in prices between October of last year and May of this year —the noble Lord was quite right in the

929
figures he quoted—the index of retail prices increased by about 4·6 per cent., not including housing; but housing is taken account of separately in supplementary benefit.
The most recent detailed statement on the kind of price changes that we can expect was made by my right hon. Friend the First Secretary, in May, when she said that during the coming year we face a 3 per cent. increase in prices due to devaluation and a 2 per cent. increase due to the increase in nationalised industry prices and in Budget taxes. Some of those increases have already taken place and we need not necessarily expect the rate of growth in costs to be as high between now and October, when the new rates come into operation, as during the last two or three months.
For example, the increase between the April and May figures in the index of retail prices was only one-tenth of one point, so that the rate of increases in prices is not necessarily an even one, and we have borne a considerable part of the load of the post-devaluation price increases as imports have begun to work their way through into the shops.
We can fairly say that the increase in rates which we are now putting before the House will truly allow the most vulnerable among those who are entitled to supplementary benefit to have their standard of living kept up to the level of October, or soon after October, of last year. As some of my hon. Friends have pointed out, that level—and I know that hon. Members opposite welcome this just as much as we do—represented an increase in the real value of supplementary benefit, as well as other pensions and allowances, including some of those which it would be out of order for me to discuss but which an hon. Member opposite mentioned.
All National Insurance and supplementary benefits rose in real value by 20 per cent. between October, 1964 and October, 1967. We therefore rest on a firm footing of having substantially increased in real terms the standard of living of those whom we now seek to protect.
The hon. Member for Acton (Mr. Kenneth Baker) referred to rates for the blind. There is, of course, a long history of a difference between rates for
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the blind and those for other beneficiaries. At various points in that long history, sincere attempts have been made to express the compassion of the nation for the particular groups of blind people whom we try to help. One ought, however, to point out that at this stage, in relation to the present increase, there are factors which should be taken into account and set against the fact that there is no special increase in the rates for the blind on this occasion.
The majority of blind people who receive supplementary benefit are over pension age. Together with other long-term recipients, they qualify for the long-term addition of 9s. a week, now to become 10s. That addition is to meet special expenses. The current rate of difference of 24s. 6d. is itself for special expenses arising from blindness. Therefore, the great majority of blind people at present have a substantial margin— now standing at 33s. 6d., and to be increased by the Is. increase in the special long-term addition to 34s. 6d.—above the basic scale to meet their special needs.
The blind have one additional preference. If blind householders have, for example, an adult working son living with them, the rent allowance which is added to their basic needs is not reduced by the non-dependant's share of the rent. This is a special privilege which the blind have.
Mr. Kenneth Baker: I was not arguing for a special extra increase for the blind. I was asking that they should receive the same rate of increase as the non-blind under the Regulations. The non-blind get an increase of about 5·8 per cent., whereas the blind get only about 4·4 per cent. This seems to me to be an unfair anomaly.
Mrs. Hart: In all these matters I take account of the detailed thought that is given by the Supplementary Benefits Commission to the special problems of particular groups. Any decision about making an increase in the rates of supplementary benefit is a matter for me as Minister, but the Supplementary Benefits Commission has full responsibility to advise me on how effect should be given to increases in the rates. The Commission and I have, of course, taken into account the special preferences

931
which I have indicated. As, in the past, there have been a number of occasions on which special attention has been given to the blind, we do not on this occasion propose the kind of increases for the blind that the hon. Member suggests.
The noble Lord asked whether I could estimate how many children were likely still to be living below the level of supplementary benefit when the rates of both supplementary benefit and family allowances are increased in October. The House will note that on this occasion family allowances and supplementary benefits are being increased at exactly the same time. We can, therefore, hope on this occasion to minimise the awkwardnesses which arise when one rate goes up and account of that has to be taken in some other benefit.
I cannot give the noble Lord the figure that he asked for. I have explained in the past why all I could do is to quote the figure as we knew it from the Family Circumstances Survey. I hope that some of the further research that we are planning will enable us to have more up-to-date information, but at the moment I could only quote the figure in that survey, which is now two years old, and say that the factors affecting numbers are so variable that one cannot possibly make an estimate that takes all of them simultaneously into account.
As a man's wage rises, he gets out of the poverty group. On the other hand, if his rent is increased he is pushed down again. There are so many different factors that reliable estimates are not possible. This means that it is always a little dangerous to make assumptions about numbers. So if one cannot reliably estimate it is probably wiser not to make assumptions. I prefer to refer back to the survey and say that I cannot tell hon. Members more than that, but that all these things will have had an effect.
I turn to one of the basic themes that have arisen in the debate—the question of the minority who are abusing social security. I agree with the emphasis which has throughout the debate been placed on the fact that when we talk about abuse of the social security system we are talking about an extremely tiny
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minority. Indeed, I think that hon. Members on both sides of the House are so much aware of the problem that there is a real understanding of their nature. However, one of the difficulties is that our understanding in the House is not shared sufficiently by people outside. One of our tasks on both sides in protecting the social security system, of which both sides have a right to feel proud, is to extend to people outside the House our own knowledge of the nature of the problem and of the right-ness of what has been done in increasing the standard of living of the poorest in our society. One would particularly wish that the Press, which avidly focuses attention on any single case that it hears about, would a little more responsibly carry out the task of informing people about the nature of the problem.
As I say, this concerns a tiny minority. It is a minority generally to be found more among the 20 to 45-year-olds than among the 45-year-olds and over. It is to be found more among people who have never experienced the kind of hardship that older people knew. It is found among a group of people who, because they have not participated in the fight for better social security conditions so fully, are less inclined to have a pride in them. It is often found, as I said in an intervention to my hon. Friend the Member for Croydon, South (Mr. Win-nick), among middle-class youngsters who ought to know better, youngsters who have public school education, youngsters who sometimes have part or whole university education. This very small element of the problem is confined mainly to London.
Outside London the problem arises largely among the unskilled rather than the skilled. To this extent, I would quarrel a little with what the noble Lord said about the rôle of earnings-related supplements in this, because the people who benefit from such supplements tend to be the more skilled workers. The low earner derives comparatively little benefit from the supplement, and the unskilled man tends to be a low earner. Therefore, I dispute that this is one of the main elements in the problem of the workshy.
Lord Balniel: Would the right hon. Lady explain one thing? With regard to

933
the higher income groups in receipt of earnings related unemployment benefit, can she explain to the House the logic —I am sure that there is a logic in it, but I do not understand it—of taxing a widow's pension or a retirement pension, but not taxing the earnings related unemployment benefit, which can reach very high levels for periods of six months?
Mrs. Hart: The logic is to be found in the general context of the splendid logic of our whole taxation system. But it is the unskilled worker who is mainly finding a disincentive to work as a result of the increase in the levels of supplementary benefits which are paid. This raises two questions. It raises a question to which my answer, and I think the answer of the whole House, is clear. Have we been right to raise out of poverty many people who up to three or four years ago were living in poverty? Have we been right to improve the standard that we regard as being the minimum for a family where a man is sick or where a man and his wife are old? Have we been wrong to seek to increase that standard of living?
Mr. Molloy: I should like to make a point before my right hon. Friend leaves the subject that she is now talking about. There is this range of people—they are a tiny minority—who are cheats. But this defect in personal make-up is at the other end of the scale, as well. I remind her that one of her colleagues had to introduce legislation to deal with those who cheat with their Income Tax returns. It was no mean figure. It was so large that it would have paid for what we are discussing under these Regulations.
Mrs. Hart: My hon. Friend is quite right. But one of the suggestions that seems to emerge from many of the Press discussions of the problem is that we may have been wrong in raising the minimum levels that the State is prepared to guarantee to those who are old, sick or unemployed through no fault of their own and the vast majority of those who rely upon the State in adversity for the protection of their standard of living. I am sure that the whole House would totally reject the concept that it is anything but completely right to seek to do this and that as the standard of living of the rest of us advances we should seek to carry with us
934
the standard of living of those who need our protection.
I think that in nearly every debate that we have had about social security, whether about family allowances or supplementary benefits, I have emphasised that the real trouble goes back in the end to the fact that there are still some people, a small group, who earn lower wages than the level of supplementary benefit that is paid. This is our problem of child poverty. It means that one must identify the groups in poverty —the disabled, the partly disabled, the man who cannot hold down a steady job at a high enough wage because of a chronic ulcer or a weak heart, the genuinely socially maladjusted, the people with some real mental or psychiatric difficulty which means that we have to extend to them sympathy, help and consideration.
We have to look at the incomes policy. In its income policy, the Government have made it clear that we have to give special consideration to the needs of lower-paid workers. Every time a wage agreement is negotiated between a trade union and an employer which gives a marginally extra increase, a higher proportionate increase, to the lowest paid than to the better paid, to that extent a real contribution is being made to solving the problem of poverty and the problem of abuse.
Of course, it is correct that the field in which we can try to check this tiny minority of abuse is in administration, and I want to make a very important point here. The hon. Member for Hertford paid tribute to the work of the staff of the Ministry. He is right in saying how crucial, in persuading people to take advantage of the supplementary benefits and other benefits available to them, has been the rôle of the staff in terms of their ability to create a good and sympathetic relationship with those who come to them for help.
I am sure that the hon. Gentleman also knows what a tremendous task the staff of the Ministry has carried out over the last two or three years in introducing the new measures which have enabled the Government to assist those in our society who need our help. Of course, if one is to track down and do something about the odd case where it is thought that someone is committing abuse, this

935
demands the individual attention of an individual member of my staff because that is what using administrative methods means.
I hope soon to indicate one or two respects in which the administrative measures we use may be slightly changed in order to allow my staff to be able to deal more effectively with the cases they know about and have identified, but in terms of the numbers they represent it is a very delicate balance that we have to achieve here. The House is aware of it and I wish that the country were as much aware of it.
One single case of abuse in a whole housing scheme can be known to everybody in that scheme, talked over many times, go round in circles and come back with changes in the story. One knows that in people's minds there is doubt about our whole system. This is why the Ministry tries extremely hard to get to grips with those it can identify as abusing it. But it is equally true that, when a man is seen walking down the street having just claimed supplementary benefit, and looking fit and healthy, someone says, "There is a man who should be at work." They may not know his medical history, that perhaps he has only recently ended treatment in a psychiatric hospital. They cannot make judgments merely by what they see.
One of the outstanding qualities of the staff—and it is one which never ceases to amaze me—is the way in which they are able unerringly to distinguish between the man to whom sympathy and help and understanding should be extended and the one who is trying to get away with something. But it is important to emphasise that many who seem to be workshy may merit our sympathy instead. I refer now to the Daily Mail article earlier this week because it represents an interesting example of the perfectly genuine misunderstandings which can sometimes arise.
The article was, to begin with, as far as I can gather, a collection of cases which were mainly drawn from previous Press reports. They were not cases suddenly discovered. They were old Press cuttings dug out of the file. We have been able to track down the origin of a few of them. For example,
936
there is the case of Mr. X, as the article referred to him. The article said of him:
"Consultant Mr. X sold his £10,000 house and moved into a luxury flat. He organises management advice for fees. His wife has her part-time job. Mr. X also draws Social Security supplementary benefits. In other words, he is on National Assistance."
I may point out, in passing, that, of course, Mr. X is not on National Assistance. He is receiving supplementary benefit.
My officers who have seen him say that he is a very sick man, suffering from coronary thrombosis, that his business showed no trading activity for the year to which the report refers and that it was totally stagnant mainly because of his health and partly because the business had not been doing very well. The house was certainly sold for £10,000, but the proceeds were used to clear the outstanding mortgage and to buy his present smaller flat, on which the outgoings are not allowed in full in the payments he gets from supplementary benefit. This presents a rather different pattern.
In case No. 1 in the Daily Mail article, the facts are that he has been receiving supplementary benefit only since January this year. He retired in 1961 and from then until January, 1968 was living on his savings. He has now exhausted most of his savings and is on supplementary benefit. That, again, is a somewhat different picture from that presented by the Daily Mail. There are others. Case No. 4 is the one where, according to the Daily Mail, a former cinema worker, unemployed for eight years, draws more than £14 a week from the State. The article said:
"When it was suggested he should turn in his rented TV to help pay his debts, he said: 'I can't do that the doctor said I should have TV to relax my mind'."
Supplementary benefit is not now in payment to this man, despite what the article implies, because, since the report was published, he has died. The article did not bring out the fact that he was unable to work because he was very sick and that sickness benefit was in payment. The suggestion about the T.V. set was made by a judge when the man was brought before the court for non-payment of a debt. These are different pictures from those presented by the Daily Mail.

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Case No. 5 was that of a Greek born man who drew £8 a week for five years. The article said:
"He said he was paying 50s. a week rent, had no assets or income and was in dire need. In fact he owned two houses and a restaurant —and was guarantor for a £4,000 bank loan to his daughter. He was jailed for three years."
This, of course, was an elaborate and deliberate fraud. The man represented that he had no source of income. But the point is that the fraud was detected, the man was convicted and he went to prison for three years.
Indeed, during the last three years, as a result of deliberate efforts the Ministry takes to prosecute fraud cases, 451 men were prosecuted for remaining deliberately without a job when they could have got one. We have about 60 officers throughout the country who specialise in dealing with this kind of abuse. I believe that a very effective job in many areas is already being done.
I have tried to get the balance right. It is a difficult one to achieve. I am worried about the tiny minority who are cheaters. I am equally concerned that the public should know that there are many whom they think to be cheaters who deserve their sympathy instead. It is important that this very delicate balance should be kept in the task of looking after those who merit our sympathy and in chasing up the cheaters who do not merit it. On the latter point, I believe that it is important that the Ministry should, through administrative action, take all steps it can to further the effectiveness of the measures which already exist. That
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is the right balance. Having emphasised the need to get the balance right, I am prepared to believe that many Press reports which appear will not get the balance right.
We all find it extremely difficult to discuss this issue in terms which are clearly understandable and simple to the general public. I come back to the essential basic problem of low wages. To the extent that we can end the low wage problem, we end the temptation and incentive to cheat in social security. But in asking the House to approve these Regulations, I am grateful for the highly intelligent and informed comment throughout the debate. Somewhat academic as we may have been, we have been talking about the extent to which we can extend compassion to those in our society who demand it of us.
We are talking about old people in front of their firesides this winter; we are talking about people who are trying to bring up families when the husband is a chronically sick man; we are talking about wives who have been deserted; we are talking about unmarried mothers; we are talking about all those groups who, through no fault of their own, are in adversity and whom the House has always sought to help and whom again it is seeking to help today.
Question put and agreed to.
Resolved,
That the Supplementary Benefit (Determination of Requirements) Regulations 1968, a draft of which was laid before this House on 18th June, be approved.

BRITISH STEEL CORPORATION (BORROWING POWERS)
1.11 p.m.
The Parliamentary Secretary to the Ministry of Power (Mr. Reginald Freeson): I beg to move,
That section 19(4) of the Iron and Steel Act 1967 shall have effect with the substitution for the reference therein to £300,000,000 of a reference to £400,000,000.
I must first give the apologies of my right hon. Friend the Minister for not being able to be present at the opening of the debate. I trust that hon. Members will understand the reason for his not being here. He will be here as soon as he can return to the Chamber.
Although the Motion is purely financial, it is customary and right for the Minister who is asking Parliament to authorise a nationalised industry to increase its borrowings to give a general review of its progress and prospects. Since the last general debate on steel, in January, last year, we have seen the establishment of the British Steel Corporation, the act of vesting, the publication of the Corporation's first report on organisation and the first months of this new nationalised industry. Commendable progress has been made in difficult conditions, and I should like to pay tribute personally and on behalf of my right hon. Friend to all who have made it possible. Notably, I should like to emphasise the part played by the Chairman, the noble Lord, Lord Melchett, now happily recovered from his recent illness and again leading the industry forward, and his Deputy Chairman, Mr. Michael Milne-Watson, and their colleagues.
In moving the Third Reading of the Iron and Steel Bill, my right hon. Friend who is now the Minister of Transport gave a warning that the world surplus of capacity created deep difficulties for the steel industry not only in this country, but throughout the world. This warning has been amply justified by the events which have followed since. In the United Kingdom last year, output and capacity utilisation fell while imports rose. Financial results were correspondingly depressed. In the year ending September, 1967, the companies forming the Corporation made a loss after deprecia-
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tion of £10 million and achieved a return on capital of under 2½ per cent.
Mr. Deputy Speaker (Mr. Sydney Irving): The hon. Gentleman is getting very wide of the Order. He ought to confine his remarks to the £100 million with which the Order is concerned.
Mr. Patrick Jenkin: On a point of order. I believe that it has been accepted for many years that an Order increasing the borrowing limits of nationalised industry should provide the House with an opportunity to examine the results of the policy of the industry. I hope, Mr. Deputy Speaker, that in your Ruling to the Parliamentary Secretary you were not seeking to impose any unreasonable restrictions on our right to discuss matters of general interest affecting the British Steel Corporation.
Mr. Deputy Speaker: It is true that on coal there has been a widening of the rule about discussion of the industry, wider than that concerned with the Order itself, but the precedent is not clearly established and it would be better if the Minister and other hon. Members endeavoured to relate their remarks to the Motion. With a little skill hon. Members ought to be able to say most of the things they want to say by relating them to the Order.
Mr. Freeson: Thank you for that helpful advice, Mr. Deputy Speaker. I have one or two more general background observations to make by way of introduction and I hope that you will agree that, however wide ranging the rest of my remarks may be, they will be put in such a way as to explain the background to the Order.
I was about to say that there are now signs, fortunately, of improvement. Steel production this year should be much higher than in 1967, and capacity utilisation has risen sharply. As the House knows, output is now at a near record level, about 8 per cent. up on last year. In the six months ending 31st March, 1968, the Corporation approximately broke even after interest on borrowings and depreciation, but before interest on commencing capital debt, on which I shall have something to say later.
The Corporation faced an immensely difficult task. It is well known that the

941
merging of even two companies is a formidable operation. The Corporation has had to bring about a merger of 14 large companies with some 200 subsidiaries at home and abroad, creating one of the largest industrial concerns in the world. It has had to create from scratch a headquarters organisation to manage this large concern, and it has had to do all this against a tremendously difficult background.
There has been rapid progress in organisation. The first stage was to prepare for vesting and this took place only four months after Royal Assent, the shortest period for any major nationalised industry. The second stage was the submission of the Corporation's first report on organisation. This was required within a year of vesting; in fact, it was submitted within three days, and has since started to be implemented progressively.
The building up of the necessary headquarters staff has gone ahead and new offices and specialised planning staff are included in the headquarters organisation. The full-time directors of the group boards were appointed by the Corporation at the end of September last year, and the part-time members in April, this year. It is of noteworthy interest that the latter appointments include the employee directors, an imaginative experiment initiated by the Corporation itself which we will all watch with interest, including industrial management and the trade unions. I am very glad to see my hon. Friend the Member for Sheffield, Brightside (Mr. Eddie Griffiths), who was an employee director, in his place here today.
The British Iron and Steel Federation was dissolved on 31st October, so quietly that its passing went almost unnoticed, and the central trading companies were transferred to the Corporation. The speedy success of these complicated negotiations is a tribute to the good sense of the leaders of the Federation in realising that nationalisation had now come to stay, and, above all, to the skill and drive of the Corporation's negotiating team.
This is a record of solid achievement, but the success of nationalisation will depend not just on organisational changes, but rather on the Corporation's
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success in evolving policies necessary to meet the problems of the 1970s.
There is no easy way out of the difficulties facing the Corporation. World steel prices remain low and the world surplus of capacity will remain large for a long time. Steel industries overseas are continuing to reorganise themselves so as to cope more effectively with these conditions. For example, within the last few weeks there has been a proposal for the merger of the two largest Japanese companies, which would create a new giant as big as the Corporation.
All this emphasises the need for the reorganisation of our industry, so that it can face the tasks ahead. This is the task on which the Corporation is now starting and I would like to review the position briefly under three main heads.
First, planning. The Corporation expects to have by the end of this year a second report on organisation, which will be concerned among other things with the question whether the companies should be retained or abolished; and with the further arrangements which should be made to ensure that the resources of the Corporation as a whole are utilised to the best advantage. Successful long term planning will be one of the keys to the success of nationalisation. The Corporation will therefore also be working continuously on planning the future development of the industry, on which it will keep in close touch with the interests involved including consumer industries, trade unions, regional authorities, and of course the Government, who will keep Parliament informed. We hope that the Corporation will have a broad brush picture of the future development of the industry within about a year from now.
If the industry is to be lean and efficient—as it must eventually be to compete in today's international steel market—a substantial reduction in manpower is inevitable. But that reduction must be carried through humanely— and the Corporation intends to have full regard for the social consequences, and to act in full consultation with the unions and with the Government who are of course concerned with the overall regional implications.
Last summer the Corporation put proposals to the unions for changes in the

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industry's negotiating and joint consultative machinery and in May it put proposals for a national agreement on wages and productivity which would clear the way for local bargains to increase productivity and secure a substantial share of the benefit for the workers. This is a difficult area and we must expect some tough negotiations. But with goodwill on both sides I am sure that any difficulties can be overcome and a big increase in productivity obtained.
A correct price policy is fundamental to the Corporation's success and to the health of the national economy. This is an area where a basic review is of prime importance. That review is now taking place. It is not just concerned with levels of prices, or the detailed structure of the steel industry's complex price schedules, but with the most fundamental questions. The Corporation hopes that the result of this wide-ranging review will be available for discussion with the Government by the end of this year.
There are short-term improvements, because the Corporation is, of course, not concentrating on long-term policy at the expense of short-term policies which can improve its efficiency, and financial position. It has, for example, made arrangements for central financial control which will result in valuable savings—control of capital expenditure, banking and credit arrangements and investment in working capital.
Detailed technical and cost comparisons are now being organised between the different works in the nationalised industry, and will help to bring all to the standard of the best, with large prospective cost savings. Competition in export markets between the nationalised companies—the only result of which was to reduce the prices the British industry earned—is being controlled and in some cases eliminated. Weak points in the industry's management structure are being strengthened.
I turn now to the case for increasing the borrowing powers of the Corporation from £300 million to £400 million as proposed in the Motion.
At the end of March the Corporation had already borrowed £252 million. My right hon. Friend has given authority for further bank borrowings of £45 million.
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It has now effectively reached the £300 million limit.
As one of the largest commercial organisations in the world, the Corporation necessarily has a large requirement for temporary finance, and in order to provide adequate short-term finance and to enable it to meet its obligations to repay certain outstanding loans about a further £70 million is now needed. The Corporation has already negotiated, with my right hon. Friend's permission, a further short-term facility of £30 million with the Banks. The extension of the borrowing powers will enable it to take up facilities such as these.
I should emphasise that on current estimates the Corporation is generating the funds it needs for the operation of the industry, except for the repayment of borrowings and any interest on the commencing capital debt.
The House will wish to know why the present limit of £300 million has been reached so quickly after vesting date when the Government had stated earlier in Committee that it should last for about three years. It was of course made clear at the time that this could be no more than a rough estimate on account of uncertainties both as to the future trading situation of the steel industry and as to the timing of vesting. This was a point particularly made by my predecessor, the present Joint Parliamentary Secretary to the Ministry of Technology.
Mr. Patrick Jenkin: Can the hon. Gentleman refer the House to the passage where the Joint Parliamentary Secretary said that this was merely a rough estimate?
Mr. Freeson: I am not sure if I have a margin note of the column number. It was 6th December, 1966. Perhaps the hon. Member could look up the column.
Mr. Jenkin: Perhaps it would help if I indicated that what the Parliamentary Secretary said on 6th December at c. 1927 was:
"First of all, the total borrowing powers relate to a five-year period and the lower sum of £300 million would, we hope, be adequate for a three-year period."—[OFFICIAL REPORT, Standing Committee D 6th December, 1966; c. 1927.]
Mr. Freeson: Without having the actual text in front of me, I think that

945
the hon. Gentleman will find that if he reads the passage more fully it is in the context of the words "a rough estimate" which I have used a little earlier.
The main elements of this extra £100 million are:

(a) Funding of companies' bank overdrafts, trade bills and acceptance credits—£94 million extra; and

(b) The fact that the companies made a net loss in 1966–67 and could not, therefore, finance the terminal dividends of £33 million; offset by

(c) a saving of £23 million by which we had over-estimated the amount of Finance Corporation for Industry loans outstanding at vesting date.

The House will therefore see that the bulk of the additional commitments represents the funding of the companies' existing debts, which of course does not represent a new capital inflow, but only a change in the method of financing the existing debt of the industry, which is an inheritance from the privately-owned companies.
I want now to say a word about the terms of the commencing capital debt. As I have said, the Corporation took over the industry at a time of falling demand and of weakness in the international steel market. It was known that the early period of the Corporation would be a difficult one financially, and this was confirmed by the results for the publicly-owned companies for the year ended September, 1967, representing largely the position which the Corporation inherited. Ten months of that year represents ten months of pre-nationalisation.
Because of these factors, the Corporation is not at present earning the revenue needed to pay the normal interest charges on the commencing capital debt and my right hon. Friend has therefore had to consider how he should discharge his responsibilities under Section 18(2) of the Iron and Steel Act, 1967, which requires him to determine, with the approval of the Treasury, the rate of interest and other conditions which should attach to the debt.
The House will probably recall that the Corporation has announced its intention to put forward proposals for a substantial part of its capital to be con-
946
verted into equity in the form of public dividend capital. Anything on these lines would, of course, involve specific legislation, but, so that my right hon. Friend may consider its proposals, he has asked the Corporation, entirely without commitment, to present him with a statement of its long term plans and a forecast of its revenues. In these circumstances, it seems to him only sensible to await the Corporation's long term plans and revenue forecast before proceeding to a determination of the terms of its debt.
The Corporation, at his request, is pressing forward with its plans and submissions and it is his intention to make his determination as soon as possible after they are received, but this can hardly be before the beginning of 1969. Meantime, as the House knows, the Corporation has paid £20 million generally on account.
Inevitably, this has been something of an interim report. Great progress has been made, but a great deal more remains to be done. But one thing I think is clear beyond all reasonable argument: The British steel industry now has an organisation with the potential to face and overcome the problems of the 1970s, and to compete successfully in this tough international market. It is in the knowledge that this is so that I confidently ask the House to pass the Motion.
1.31 p.m.
Mr. David Lane: In the normal Parliamentary sense I have no interest to declare, because it is some years since I ceased to work for the British Iron and Steel Federation. In another sense, I have a continuing interest in the industry, because anyone who has ever worked in it in any capacity must remain sympathetically concerned with the fortunes of the industry and of the men who work in it.
In addition to the tribute which the Parliamentary Secretary rightly paid to the leaders of the Corporation for all they have done in the last few months, I think that it is right that we should pay tribute to the men at all levels in the industry who, for the past 20 years, have never been free from political controversy and have managed to stick to their job and, in my view, have achieved

947
something of an economic miracle in what the industry has done since the war.
In effect, we are considering an amendment to Section 19 of the 1967 Act. I still believe that it is a thousand pities that the Government were determined on a second nationalisation and the abandonment of the previous structure under the 1953 Act.
It seems that we have no alternative but to agree with the increase which the Government are proposing, although, as the Parliamentary Secretary admitted, the information on which we are asked to do so is necessarily thin. The advances have been used up much more quickly than forecast and, to my mind, that simply means that we must decide, or others must decide, even more quickly than was the case the major questions which need decision before the Corporation is properly on course. That is what we are debating, and I wish to touch on some of the fields in which these major decisions lie.
It makes me very sad to read in comments of steel being included with other older-established industries—for example, coal and the railways—as industries due for contraction. On the contrary, this is an industry with a future of growth and, I hope, of prosperity if its problems are tackled properly. I remain sceptical about whether they can be tackled properly under nationalisation. I am glad that we are committed as a party to reorganise the industry as may be necessary in the light of experience and that we are also remaining open-minded about the precise form of that reorganisation. For the time being, we must suspend judgment.
But, in the immediate future, major adjustments will have to be made by the industry, and surely the objective must be to reduce to the minimum any obstacles which will make this adjustment harder, whether they be in the form of delays in reaching decisions or of Government policies in various fields directly effecting the industry.
Turning to the fields in which problems lie, I deal first with the financial problem. I am sure that we all welcome the clear statement of the Corporation's basic objective in paragraph 47 of its Report on Organisation last year:
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"The Corporation regards its basic objective as being the achievement of the maximum long-term return on its capital investment consistent"
with various important considerations which must be borne in mind. According to the latest results announced, the return on capital is, if anything, negative if we take account of the interest which should be paid on the commencing capital debt. I am glad that the Parliamentary Secretary said that some decision should be reached by the beginning of 1969 about this capital debt, because I do not think that any problem facing the industry is more important.
I would not necessarily oppose some measure of equity in the capital structure, because I hope that every hon. Member would agree that it would be very helpful to the industry to avoid the great millstone of fixed interest debt which has plagued other industries in the past. But this will be a Government decision, and I hope an urgently taken Government decision, so that the industry can be clear about the capital structure and its financial objectives.
Turning to the question of manpower, morale and productivity, this is an industry with a proud record of labour relations. It is unfortunate that we should be having this debate in the shadow of the dispute between the Corporation and two of the white collar unions. One can only hope that it will soon be settled in consequence of the court of inquiry which has been set up. There is a brighter side—the recent announcement about an important productivity bargain at Port Talbot, which I hope will be the forerunner of other such bargains in this industry and other industries.
If there is to be, as I am sure there must be, some streamlining of the labour force in the works, it is imperative to prevent the growth of bureaucracy at the centre. There are a few disturbing indications of the growth or size of the central body, and this is something which should be watched very carefully because we all know the bad effects on morale of growth at the centre while there is pressure for contraction in numbers of men on the job. I hope that we shall hear more about this in the next report of the Corporation.
I should like to say a few words about market prospects on which the Parliamentary Secretary touched. The current

949
world surplus is estimated at about three times the annual capacity of the British steel industry. I am sorry that we have not heard more about this problem; perhaps the Minister will say something about it. The Government can help in two important ways: first, in the promptness of the anti-dumping measures which may be necessary, and, secondly, in trying to get more progress in the very crucial international discussions which have been going on for far too long with far too little result. Plainly, if there can be negotiated internationally some soil of self-denying ordinance for the world's steel markets, this will make the task of the British industry's adjustment very much easier. I was sorry that only on Tuesday the Parliamentary Secretary, at Question Time, was still not able to announce any progress in these international talks.
Meanwhile, on the price structure in the home market, as we have been told, a review is in progress, and I am glad to hear that the results of it may be available by the end of the year. I hope that in making the review the Corporation will bear in mind the need to reassure the private sector of the fairness of the future price arrangements in the public sector, because although the private sector represents only about 10 per cent. of the volume of output, it accounts for nearly 30 per cent. of the value. I hope that the Corporation will also bear in mind the need for whatever new price arrangements are made to be as nearly as possible consistent with arrangements in the Common Market, in the hope that eventually this country will join the Common Market. I am sorry that, as it seems, two or three years ago an opportunity to move in this direction was lost. I trust that this new opportunity will be taken.
In turning to modernisation, costs and efficiency, I will deal first with capital investment and capital cost. The Times this morning has a bold front-page headline,
"Steel industry to be rebuilt".
That is fine, but one is bound to look at this with a certain amount of caution in view of some of the figures given in the article. The mention of 20 million tons of new capacity by 1975, which I calculate to be an average of 2½ million tons capacity each year until then, repre-
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sents an enormous figure in terms of finance.
I hope that the experience of other nationalised industries will be remembered when they have embarked on enormous capital-expensive programmes and have sometimes found that these have turned into too big a burden of capital cost in the light of later market experience, quite apart from the major problem of finding the money against the competing claims of other industries.
Mr. Frank Hooley (Sheffield Healey): Would not the hon. Member agree that the key consideration is to provide this country with a capacity that will meet all its needs and that that must be the overriding factor?
Mr. Lane: I agree, but we are in a dilemma when to do that ideally on paper involves astronomical sums of money. I only hope that the country can afford it. Let the Corporation bear in mind, as I am sure it will, the admirable sentiment expressed in paragraph 52(d) of its Report that one of the long-term objectives is
"To move towards the development of larger production units but with full recognition of the part that efficient small works can play and of all the social implications of any changes."
I hope that we do not go so fast with these vast investments that insufficient use is made of the highly efficient smaller plants which may still be able to play an important part.
My next point concerns the speed of exploiting new developments. According to The Times this morning, the Corporation has been very impressed by the speed with which new developments have been brought into production in Japan. In comparison with that, I have been somewhat disappointed from recent reports about how many years it will yet be before the spray steelmaking process, for example, can be brought into use in this country. I hope that the Minister may be able to say something about this as an example of a new technical process.
On the subject of operating costs, nothing is more important to the steel industry than fuel costs, which represent more than one-fifth of the average cost of steelmaking, leaving aside capital costs. I hope that the Government will

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stick to their guns of a cheap fuel policy. In comparison with its competitors, the British steel industry carries heavy burdens—for example, its inability to import cheap coal and the tax on fuel oil—but these things are within the Government's power to put right as soon as may be.
There is scope, too, for more use of natural gas. I hope that in the Government's enthusiasm for a new aluminium smelting industry the steelmakers will not find themselves at an unfair disadvantage in terms of electricity costs as against their competitors in aluminium.
The last field of problems with which I propose to deal concerns what I call the shape of the Corporation and the balance of power within it. I hope that in the next Report we shall hear more about the non-steel activities in which the Corporation engages. Serious thought should be given to the disposal of at least some of these activities, when they are not inherent in the main stream of steelmaking, to enable the Corporation the better to concentrate on its main task and, in some way at least, to ease the big problem of financing future development.
As to the four groups into which the Corporation has organised the industry, I am sure that we all welcome the statement in paragraph 64 of its Report that
"The spur of competition, other than in price, between the Groups and between the units below them is in our view highly desirable."
That is fine, but how is this competition to be made a reality? What financial tests will the Corporation apply?
That brings us to the whole question of centralisation versus decentralisation. I believe that in this industry overcentralisation, particularly in selling, would be disastrous. Steel is an industry in which producer-customer relations must be close and, as far as possible, works-orientated. If the Corporation is in doubt, let it err on the side of decentralisation and remember its excellent words in the final paragraph—paragraph 101—of its Report last year:
"By means of these systems"—
that is, systems of control—
"under which it will encourage initiative at ail levels, the Corporation believes that the
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total management effort of its organisation can be harnessed to achieve the objectives set out earlier in this report."
It is the words:
"encourage initiative at all levels"
which, I hope, will be particularly remembered.
We all acknowledge that the Corporation has got off to a good start and I trust that the momentum will be maintained. I hope that we shall see the next Report, as the Minister also hoped, at latest by about the end of this year. The right hon. Gentleman the Minister can help greatly in getting these problems quickly resolved and the decisions made. He has brought to his new office a briskness of manner, and I hope that we will also have a briskness of decision-making. In other sectors of the Ministry's activities, I have been somewhat disappointed at slowness of decision-making in some recent cases. The steel industry must make important adjustments to the situation which faces it, and to do this it will need the maximum help and encouragement from the Government.
If major decisions are unduly delayed, there is a risk of the industry sliding into the state of depression which is too often characteristic of nationalised industry. The men in steel deserve better than that, and I hope that the Government will do all in their power to help them to achieve the sort of growth and prosperity which we all wish for them.
1.47 p.m.
Mr. Eddie Griffiths: I would like to crave the indulgence of the House for this my maiden speech. For the past three weeks I have been inundated with well-meaning advice about when I should make my maiden speech and how I should deliver it. Some advised me to leave it until after the Recess and others told me to get it done before then. Having listened to all that advice, however, I thought it only fitting that I should pay my humble tribute to the greatest steel city in the world— namely, Sheffield—and also to the works of John Summers and Sons, near Chester, where I spent 16 very happy years. I decided that as a tribute to those two, I would make my modest contribution on the important subject of steel, which I love very much.
One of the things which I have been trying to do in the last few days is to

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take stock and wondering how I came to be in the House of Commons. I believe that no man is self-made and that we are all subject to the influences of our colleagues, the way of our upbringing and the localities in which we have been brought up. One of the greatest assets which I have had was to be blessed with a fine Socialist father. He was one of the few truly practising Socialists that it has been my privilege to meet.
When he passed away 12 years ago, I spent the following 12 months trying to examine his life and his philosophy. I realised that he was one of the happiest men I had ever known. The reason for this was that he believed that the philosophy and purpose of life were to give whatever talents we have in the service of our fellow men. That is the main reason why I stood for election and have come to this House, to give whatever talents and abilities I have in the service of my constituency and of my fellow men.
I can do no better than to quote from the Bible a very famous verse which, I would suggest, every Member of Parliament should use as his yardstick to measure the motive of his contribution to any topic:
"Though I speak with the tongues of men and of angels, and though I have the gift of prophecy, so that I could remove mountains, and have not love, I am become as sounding brass, or a tinkling cymbal."
I believe that if our actions and our observations are based on respect and love for our fellow men our contributions will be worth while.
I am probably one of the luckiest Members of Parliament in having a constituency known as Brightside. I found this a great comfort to me; for when we have our political ups and downs, and as we talk of swings against or for us, I can always say, "I look on the Brightside". I think that this name typifies the people of the constituency. One of the things I found when I was going round during my election campaign was that the elder people not only saw the difficulties and the problems but they appreciated that, in any human balance sheet there are blessings and advantages.
One of the things I appreciate about this Sheffield constituency is the great warmth of character of the people. In-
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deed, I should like as a Welshman to pay tribute to them. I am sorry that there are no Welsh Members now in the Chamber. I think that there is a lesson to be learned here. As a Welshman, I know I have been taken to the heart of the people of Brightside. My experience of life is that people in Brightside, in Caerphilly, in Scotland, are basically the same under the skin: they have the same hopes and fears wherever they may be throughout the length and breadth of this country.
I would like to pay tribute to my predecessor, Dick Winterbottom, who passed away rather prematurely at the age of 68. Dick Winterbottom, I found during my campaign, was a name that was known very well on every doorstep in Brightside. He represented the constituency for 18 years. He moved his home from Oldham and went to live right in the middle of the constituency and he shared the joys and sorrows of his constituents. His door was always open to them so that they could take their problems to him. I was very touched at the great tokens of affection which were shown to him whenever people talked about him. Indeed, more than one said to me, "If you are half the man Dick Winterbottom was you will do all right". I hope to prove more than half the man in due course, but I should like to pay that tribute. Also, when I came here and talked to my hon. Friends I found that they spoke with great affection of him and of his contribution to the work of this Chamber.
I should like to touch on the position in the steel industry prior to nationalisation. The hon. Member for Cambridge (Mr. Lane) suggested that there had been a very high degree of success in private enterprise in the steel industry. I would remind the House that, in those years when the steel bosses were taking considerable profits out of the industry, if one stuck a stamp on anything and called it steel one could sell it—up to about five years ago. I believe the hon. Member is misleading the House and misleading himself in feeling that private enterprise in the steel industry could cope with the present situation in the world market. Indeed, if we look at the position from the middle 1950s to date, we shall find that because of the negligence of the private steel companies the

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price advantage which we had over our European competitors in the middle 1950s has disappeared. If we look at the production per man at work we shall find that we have been outpaced and outstripped by Japan and also our European competitors.
It was highly significant that, just prior to nationalisation, the Steel Board instigated a report, known as the Benson Report, which is basically what the British Steel Corporation is advocating for the 1970s. I am convinced that if its views had been implemented much sooner the position of the steel industry in this country would not be as bad as it is today. Therefore, when the Steel Corporation took over some 12 months ago it did so in a period of great difficulty, and also, as my hon. Friend says, in the wake of a difficult political conception. But I am glad to say that the offspring, the British Steel Corporation, 12 months later is a really thriving, bouncing organisation. I would endorse what has been said about the welcome to Lord Melchett, who is back in harness, and I sincerely trust that he will soon be fully recovered. I believe that the British Steel Corporation has laid the foundations for a highly efficient, a highly profitable, a highly productive and a highly remunerative industry and that in the next few years we shall see the fruits of this initial careful planning.
I should like to mention one or two points to which I believe the Government and the British Steel Corporation should address their minds. We have heard that production in the first half of this year is 5 per cent. up on what it was in the first half of last year, and indeed, in the second quarter it is up by 8·7 per cent.
I believe that the conservative attitude of the private companies to the export market is one of the reasons why our export performance is not anything like as good as our import performance has been. In ten years the export increase has been something like 30 per cent. whereas our import performance alas has been something like 63 per cent., which is not a good reflection on the private industry. I believe we must use all the machinery available to us now and that we must be ruthless in our attitude to,
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selling abroad. One of the attitudes of the private companies was, "To remain profitable, to give our shareholders the dividends they want, we can only afford to carry 10, 15, 20 per cent. in the export market." I believe that this philosophy should go now, and that the British Steel Corporation should use every means within its power to push its export performance to its full potential.
On the question of long-term planning, I believe there is a great acceptance now in the steel industry, in the British Steel Corporation and the trade union movement, that if we are to remain competitive it is absolutely essential that we have low-cost production units and that we produce not less steel but more steel, and I believe that the plan which will be announced in the next nine months or so, when implemented, will give us the production growth we so badly need.
However, unfortunately, due to technological change and reorganisation, one thing we must be prepared for is a reduction in manpower. The British Steel Corporation must be made responsible for the people whom it will not require in the main steel production units, and should not be satisfied on giving a redundancy payment and saying, "There is the dole queue". The Government and the British Steel Corporation must accept responsibility for the deployment of manpower not required in the technological steel industry. To this end I suggest.that the British Steel Corporation should diversify its activities and consider going into the manufacture of durable consumer goods. If they do this, as contractions in a particular locality occur, then they can with Government help implement suitable alternative industries for those workers who will be made redundant.
I would mention worker participation in the industry. I was privileged to be one of the twelve part-time directors appointed to the British Steel Corporation. Reluctantly, as I was looking forward to this new challenge, I had to resign, even before I sat on my first board meeting. I have great faith in this experiment in the steel industry, which I am sure will gather momentum and become established in all nationalised industries and, I hope, in private industry. I am greatly impressed by the 11 people who have been appointed; they have a

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wonderful contribution to make. I am glad to say that the more established directors in the British Steel Corporation have been very patient and kind to the worker directors. The worker directors have received five weeks' training in economics and allied subjects, and I have every faith that this will prove a successful experiment.
With dynamic and imaginative management; with the co-operation of the quarter of a million workers, one of whom it was my privilege to be for 16 years: with the moral, verbal support and economic understanding of the Government and of this House, then I believe that the Steel Corporation and the steel industry have a bright future.
I take this opportunity of wishing the British Steel Corporation as it comes to celebrate its first birthday many happy returns, and I know that its future will be prosperous. Those sentiments will I am sure be endorsed by the House.
2.2 p.m.
Mr. Nicholas Ridley: It is always a great privilege: to follow a maiden speaker in this House. The right hon. Gentleman the Member for Sowerby (Mr. Houghton) first congratulated me after my maiden speech and for that reason I have always had an affection for the right hon. Gentleman, an affection which transcends his strictures of large families, since I feel that mine is perhaps on the large side. On one occasion I had to congratulate no fewer than three maiden speakers who followed each other and whom I followed, and this gave me the difficulty of maintaining three such relationships at one time.
However, I will have no difficulty whatever, I hope, in maintaining a respect and admiration for the hon. Gentleman who has just made his maiden speech. It was, as I think all hon. Members will agree, a speech of great knowledge, great interest and great authority. A new Socialist Member of Parliament is a rare bird these days, so it is to the credit of the electors of Brightside that they have chosen to represent them someone possessing the high premium which is placed upon new Socialist Members of the House.
The hon. Gentleman referred to the famous passage from the Bible:
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"as sounding brass or a tinkling cymbal."
We, I am sure, regard his speech as sounding brass rather than tinkling cymbal. He will be very welcome to steel debates and other matters and the whole House will look forward to hearing from him again on many important occasions.
I echo his tribute to his predecessor, Mr. Winterbottom, who was much loved by hon. Members both on these benches and on the opposite benches. We remember how he sat through the long nights of the Steel Bill in Committee, always with a smile and bearing with fortitude the trials of that Committee. I hope that the physical strain which the act of nationalisation brought upon him did not in any way contribute to his illness and much-regretted demise.
One matter on the hon. Gentleman's speech which I would like to take up is that we have to have a nationalised industry to combat the competitive pressures faced by the steel industry. One is a little rueful when one considers that the American, Japanese and the vast bulk of the European industries are still in private enterprise hands. The argument that we cannot do this through private enterprise is one that we could not accept.
I would like to address myself particularly to the financing of the Steel Corporation. There is a little confusion about this. We are told that the Corporation drew £252 million worth of capital last year. We are now told that another £45 million has been incurred and another £30 million is immediately needed, so that there is £330 million immediately required for new capital.
The last Minister, the right hon. Gentleman the Member for Southwark (Mr. Gunter), whose departure we regret, told us at Question Time on 23rd April that £57 million of this was to pay off old dividends, and that £195 million was to pay off loans and overdrafts already incurred. This meant that the anticipated total was exceeded last year by £175 million. It is a little odd to be told that the estimates were £175 million out, when the main operation that was carried out was refinancing. If there were such loans, overdrafts and borrowings of various types, the refinancing of which the Government were to support, we would expect

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to have been warned about it and for this amount to have been provided in the estimates. Will the Parliamentary Secretary give an explanation as to how it has come about that as much as £195 million of loans and overdrafts, which nobody expected, and of which no one had notice, has been refinanced? It could have been foreseen.
It is a little cavalier to bring forward after one year the date of the extension of the borrowing powers to £400 million without explaining where the money has gone and why it was not anticipated. I do not entirely accept what the Parliamentary Secretary said, that this is a pure book-keeping transaction which will have no effect on matters of substance. By substituting State borrowing for private loans and private overdrafts we increase the indebtedness of the State, and the State has either to tax us more or obtain more money from some other source, and the process is one which the people have had to pay for through taxation. There is no doubt that, of the £900 million of extra taxation raised, some part at least is attributable to having to find this extra £195 million, so it is not quite as simple as the hon. Gentleman seems to suggest.
Not only do we need more information about the spending of the vast sum of capital of £330 million in the past, but we also need it about the intentions for the future. The Opposition bitterly opposed the nationalisation of steel and have the strongest reservations about the wisdom of this action. Nevertheless, they have been extremely tolerant and reticent about pressing the Government or the British Steel Corporation for information about the future. However, the time is coming when we must have the plans. I would remind the Government that this is now a public industry. The plans have to be made public, and public accountability to the full must be followed. In no other sense can public control be exercised.
My hon. Friend the Member for Cambridge (Mr. Lane) referred to the article in The Times this morning. I thought that there was a requirement of 10 million tons more capacity, but it may have been 20 million tons read equivocally. Whatever it is, if there is to be a vast amount of new building, we want to know about
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it, to know what the plans are, and what the future holds. I want to discuss it, because I believe that this is the right time to make a few observations about the whole problem of modernisation before anything is decided in relation to the capital aspects of the borrowing powers Order.
On what basis is the steel industry to be rebuilt? Quite clearly, new machinery and plant is invented every year which is better than the previous year's machinery and plant. If capital were worthless and cost nothing, it would pay us to pull down all our factories and plant every year and rebuild with the latest equipment. At the other end of the scale, obviously after a certain period of time, new machinery has to be installed because old machinery becomes so out of date and inefficient that it can no longer be competitive. Somewhere between the two extremes comes the right moment at which to replace plant and equipment.
The difficulty with nationalisation is that there is no market test to determine when it should be done. In many public industries, we are getting a situation which can only be called public affluence and amid private squalor, and the degree of investment in State industries is giving great concern to many on this side of the House and others outside it.
What we have to do is to invent a system whereby we can tell more accurately whether the replacement of assets is being done at the right rate and at the right time. The present rules of the Treasury are a great improvement. New investment in plant must pass a discounted cash flow rate test which has been put at 8 per cent. I want to know whether the projected rebuilding of the steel industry has passed that test. It is so hedged about with qualifications and difficulties that it is clearly impossible to get a straight answer to that question, but the answering of the question will depend on the level of taxation which is attributable to steel financing in the future.
It is not good enough to say that we must write down the capital of the British Steel Corporation from something over £1,000 million to something much less and then perhaps invest another £1,000 million or more in new plant. It is something which is peculiarly and unfortunately very difficult to do in nationalised industry.

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The reason why writing off capital is difficult and why making new investment is difficult is that the money has to come from the taxpayer. The idea that it is in some way borrowed has ceased to be true, and both the write-off of old capital and the provision of new capital is now almost in full measure borne out of taxes. We who have to go to the poor, the widows, the pensioners and others who complain even about paying small sums of taxation must justify the putting of further loads on them for writing-off steel plants and building more steel plants.
The difficulty is that one of the joys of ownership in industry, for which hon. Gentlemen opposite have clamoured, is that one; is faced with enormous bills for the replacement of assets and there does not seem to be any way of inventing a reasonable and reliable discipline to know at what rate and at what time the assets should be replaced. The Treasury replies on a D.C.F. rate of 8 per cent., and now it is moving to marginal cost pricing. I would emphasise that an element in the costs within marginal cost pricing must be depreciation, and depreciation at replacement cost. There should be no loss in the process. There should never be any need to write off dead capital if the capital has been depreciated at the correct price.
Mr. J. J. Mendelson: The hon. Gentleman has referred to those hon. Members on this side who have clamoured for public ownership, and then he made the point about writing-off certain capital. Surely he would agree that the write-offs in the coal industry were the result of keeping down the price of coal over a period of 12 years and thereby partly financing our export efforts. It was not simply to make coal cheaper that it would have been otherwise. It was a national debt in the truest sense of the term.
Mr. Ridley: I do not deny that. But the wisdom of keeping the price of coal down at that time was questionable. It might have been better to have made coal achieve what it could raise financially in order to finance its own decline. There is a great deal of nonsense talked about the need to hold down prices. In many cases, it is preferable to keep prices up so that a greater amount of self-financing can be generated.
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Originally, there was a discipline, and there should be a discipline in the raising of nationalised industry capital for investing in steel by means of the Government having to borrow what they invest. That is what we all think happens, but it does not. I have some figures before me which show that, during the last eight years, public investment has totalled £7,453 million, against which the Government have borrowed net from all sources £870 million. That means that 85 per cent. of public investment has either come from taxation or from the printing presses.
In those circumstances, the D.C.F. rate does not change, and what we have to do is to find a way whereby the increasing pressure on resources is reflected in increasing difficulty in raising money for public industry.
I suggest that the Government should return to financing all public investment by means of borrowing on the market. That would force the Government to pay the going rate for capital, and that, in turn, would force them to pass on to institutions like the British Steel Corporation the cost rate of the capital that they borrowed and force the D.C.F. rate to a level at which it reflected the real cost of borrowing the money that was invested.
I have never understood why there should be a difference between the D.C.F. rate and the interest rate at which the Government lend money to the Corporation. It is in that context that I view the present application by the British Steel Corporation for Exchequer dividend capital. If, as I have said, the right speed of write-off has been adopted, if the commencing capital debt is correct, if all the correct policies are adopted, and if the correct investments are made, there should not be any need to dodge a dividend and have flexible capital in the structure of the Corporation's capital debt. We know that Exchequer dividend capital is a pseudonym for not having to pay interest on what is admittedly a very heavy capital commencing debt.
If we think that the assets represented by the nationalised Corporation are not worth what they are said to be worth, it would probably be preferable to start off with a realistic assessment of the worth of the assets and force the Corporation to

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pay a proper going rate of interest on that amount. Otherwise, we lose, in a mist of obscurity, the veracity of what we are trying to do.
I say to the hon. Gentleman who expressed such passionate conviction in nationalisation that these huge debts which are piling up, perhaps in respect of the over-valuation of the assets of steel at the time of nationalisation and the unworthily quick writing down of existing assets and the terrifying inability to determine what is the right rate of expansion, will fall on the taxpayer. Whatever the outcome may be, the resulting increases in taxation are the ultimate reason why the Conservative Party believe that nationalisation was a severe mistake in this context.
Be that as it may, we must have proper accountability. We must be told about the plans in the same sort of detail as we had for gas. We must be told what the issues are, because these are not purely commercial matters. We will have to go to our constituents and justify these increases in tax. That is never done in a private company. A private company raises its money on the market and ordinary people are not concerned one way or another about the future in the matter. But, once the taxpayers and their representatives become the owners of an industry, they have to be told what the plans are. Therefore, I hope that, long before the time this borrowing provision runs out, we will be given a complete and accurate statement about the plans of the Corporation, the new capital structure, the way of financing it, and all the matters upon which I have touched.
2.23 p.m.
Sir Geoffrey de Freitas: My hon. Friend the Member for Sheffield, Brightside (Mr. Eddie Griffiths), in his interesting maiden speech, referred to the consequences of the technical improvements in the manufacture of steel. One of the consequences of the technical improvements in the manufacture in steel in my constituency is not redundancy, but the failure of the industry to need more men. Corby is a new town which has been built at public expense with the infrastructure to support a population of 80,000—a swimming bath, a civic centre, a theatre, roads and services—but
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the population, as a result of technical developments in this industry, shows no sign of getting anywhere near that figure. Therefore, public money is in danger of being wasted. We are in danger of wasting these public buildings and services because employment in steel is not expanding and new industries are not coming, principally because it is not a development area.
I do not expect my hon. Friend to deal with this point at great length, but, as a member of the Government, I ask him to note this unexpected consequence of technical improvements in the manufacture of steel when he and his colleagues discuss allocation of industry.
Like my hon. Friend the Member for Brightside, I support the Motion and I wish the Steel Corporation well on its first birthday.
2.25 p.m.
Mr. Patrick Jenkin: I am sure that the House would wish me to echo the words of welcome of my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) on the quite admirable maiden speech which we had from the hon. Member for Sheffield, Brightside (Mr. Eddie Griffiths). The hon. Gentleman started by claiming the indulgence of the House, in which we on this side, albeit under some provocation, felt it right to acquiesce.
Although the hon. Gentleman ventured into controversy, my view is that this is entirely proper in a maiden speech. I have always felt that the convention which seems to have grown up that maiden speeches should be uncontroversial is a mistaken one. Those who, in their maiden speeches, venture too far down the paths of controversy may suddenly find their heads being bitten off in full stream, and they would have no right to complain.
But I think that the hon. Gentleman's speech, which was delivered with great confidence and obviously with great experience of the industry pleased the House. I hope, as my hon. Friend the Member for Cirencester and Tewkesbury said, that we shall have the benefit of the hon. Gentleman's words in future debates on this and on other subjects.
We remember the hon. Gentleman's predecessor with great affection, both

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as a man and as a politician. If I may end this introduction to my speech with one mild word of advice to the hon. Gentleman, it is that if he gets an embarrassing letter from a Minister he should not publish it in the Sheffield Telegraph. The hon. Gentleman's predecessor, Mr. Dick Winterbottom, delighted this side of the House, at any rate, and gave us much ammunition for what proved to be one of the most controversial passages of the Iron and Steel Bill.
A debate on a Borrowing Powers Order —and I bear in mind what you, Mr. Deputy Speaker, said at the beginning of the debate—has tended to become the opportunity which the House has—in many cases the only opportunity—to examine from time to time the workings of the industry under review. As a general rule, we do not debate the annual reports of the nationalised industries. The Select Committee on Nationalised Industries can examine an individual industry perhaps only once in every six or seven years. Therefore, we tend to rely or: Borrowing Powers Order debates as a means of appraising the activities of the industry as well as looking to the future and to the investment for which the money to be borrowed is needed.
I appreciate and understand the reason why the Parliamentary Secretary and not his right hon. Friend moved the Motion. I make no complaint about that. However, the information which he gave to the House as a justification for this increase in the borrowing powers of the British Steel Corporation can rarely have been so thin. I believe, therefore, that we have every right to probe and to question the case which the hon. Gentleman made and the plans for the industry for which the money is needed.
I recognise the limitations and difficulties in doing this. It is less than a year since vesting day, less than a year since the members of the Corporation have been able to grapple with the problems facing them, and there has been the added difficulty, with which we all have the utmost sympathy, of the illness suffered by the noble Lord, Lord Melchett, and the recurrent illness which again took him from his office and the great tasks facing him. We are delighted
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to see his return. We hope that he has fully recovered. A man who holds the great responsibility of that high office requires a tough constitution, and I hope very much that the noble Lord is now fully recovered and will be able to take up his duties again.
The background to this debate is somewhat disturbing. I think it right to emphasise that we are here dealing with an industry, a single entity, which has net assets, excluding its long-term borrowing, of more than £1,000 million. This is a huge sum by any test. In the first two months of its operations it made a loss of about £319,000, before charging any interest on its long-term capital, and though it may be doing better, it is no more than breaking even in the first six months, without making any deduction for interest on its long-term capital, that is to say, on its commencing capital debt.
As the hon. Gentleman said, since vesting day the Corporation has borrowed £252 million, with a further £45,000 authorised since March, 1968. One has to look at this against the estimate of the figure which appeared in the Financial Statement last year at the time of the Budget, when provision was made for £75 million to be borrowed by the Corporation. It is true that the relevant paragraph of the Financial Statement said that that was subject to a "wide margin of error", but when one finds that the figure up to March this year is £252 million, against an estimate of only £75 milion, one is bound to ask how wide is a wide margin of error? This represents a massive miscalculation. We are told in the White Paper Cmnd. 3565 that the estimated requirement for 1968–1969 is £175 million. We hope that this will not be subject to the same massive error.
The error was not only in the Budget. It went back further than that, to the time when the Bill was being considered in Committee. The hon. Member for Penistone (Mr. Mendelson) is the only Member on the benches opposite at the moment who was a member of that famous Standing Committee.
Mr. Ridley: I think that the figure in Command 3565 is £100 million for the coming year. It was £175 million last year.
Mr. Jenkin: I am grateful to be corrected.

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It is true that the net amount to be borrowed from the Government is £100 million, but the total amount of borrowing—and the borrowing power covers the total amount of borrowing—is, as I understand, and no doubt the hon. Gentleman will correct me if I am wrong, £175 million.
I return to what was said in Committee when the Clause which we are now discussing was under debate. The Parliamentary Secretary referred to the debate which took place on 6th December, 1966, and quoted his predecessor the present Parliamentary Secretary to the Ministry of Technology and indicated that what was said then was "a rough estimate." Those words appear at column 1930. I am glad that the Minister of Transport is here, because I am sure that he remembers those debates with nostalgia.
I think it right to say that those words referred to a point which had been raised by my hon. Friend the Member for Cirencester and Tewkesbury about the extent of self-financing which could be used for capital expenditure. The question arose of the 65–35 per cent. split being right, and that was what the hon. Gentleman referred to as a rough estimate.
When the hon. Gentleman talked about the total borrowing requirements and the time scale for which the Clause would operate, he did not qualify his words with anything like that sort of language. I have already quoted what he said, and I have no hesitation in quoting it again. He told the Committee:
"First of all, the total borrowing powers relate to a five-year period and the lower sum of £300 million would, we hope, be adequate for a three-year period."—[OFFICIAL REPORT, Standing Committee D; 6th December, 1966. c. 1927.]
The hon. Gentleman referred again to the three-year requirement for borrowing. That was said firmly and qualified only by the words "we hope". It is not three years, it is one year, and instead of coming back after two and a half years just before the period ran out, he has come back after about eleven and a half months. By any standards that forecast must be regarded as deplorable, and particularly is it so when we are told that this is not due
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to sudden, unforeseen capital expenditure.
This is a question of funding debts which were owed by the companies taken over at vesting day. Surely to goodness this could have been foreseen! Why was the then Parliamentary Secretary able to make an estimate which proved to be so wildly out? This was not a random figure. The constituent figures which gave this requirement of £300 million over three years were spelled out in the debate. Why has the then Parliamentary Secretary been proved so wrong? This was no wild guess, and yet it has turned out to be wholly denied by events.
The impression created during the debate on 6th December was that the details were all to be spelled out in the first report of the Corporation to the Minister under Clause 4. As we know, the Report was issued in August of last year, and I am sure the Parliamentary Secretary will concede that it contains no financial information at all. All it deals with are the organisation of the Corporation and the structure of the management.
Subsequently, we saw the 1967 accounts of the 14 major companies, and it was made clear that we were not to regard this document as in any sense an annual report. The Press handout which accompanied the issuing of that document said:
"The accounts should in no sense be regarded as the first annual report of the Corporation. This will be published in the early months of 1969 …"
Apart from the gross mis-estimate by the hon. Gentleman's predecessor during the passage of the Steel Bill, and by the Chancellor of the Exchequer, or presumably by the then Minister of Power, we have had virtually no information about what this money has been required for, or why the estimates have been so wildly inaccurate. What we have been told is what the Corporation hopes may happen to its finances in future. This we have had to learn almost entirely from the Press, until the Parliamentary Secretary gave us a little information this afternoon.
We are told that the Corporation is hoping to write down its assets by £150 million. This is a very big sum indeed. We are also told that it hopes to put part of its capital into Exchequer dividend capital. No doubt the Parliamentary Secretary will be able to confirm that both

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those steps will require further legislation. Can he say when that further legislation is likely to be presented to Parliament? Will it be done next year? In other words, is the reconstruction of the Corporation's finances regarded by this Ministry as a matter of great urgency?
We now have the extra £100 million borrowing which, if the Motion is accepted, will tide the Corporation over. For how long will it do so? We were given no indication by the Parliamentary Secretary of how long this sum of £100 million was intended to last. We were told that £30 million of it is already earmarked for facilities which have been negotiated and which the Corporation will be empowered to accept if the Motion is approved. How long will it go on for? When will legislation be introduced further to increase the Corporation's borrowing powers? We have had no information about this.
We have been presented with the most woefully scanty information, on the basis of which we are being asked to approve the Motion. Until the hon. Gentleman spoke, all we had to rely on were gleanings from the Press, which has clearly been talking, perfectly properly, with officials of the Corporation. I must protest. I do not believe that a request for increased borrowing powers can ever have been brought before the House with the Government having done so little to provide the necessary information to enable a proper decision to be made.
When my hon. Friend the Member for Barkston Ash (Mr. Alison) opened the first debate on the Clause that is now Section 19, he referred to borrowing as "the lifeblood of the industry". So it is. It is where the money comes from. Apart from internal financing, it is the only source of investment and expansion. It is a basic element in the whole philosophy of right hon. and hon. Gentlemen opposite when they push through nationalisation Measures that it is intended that the industry should become answerable to, and responsive to control by, the democratic assembly of the nation. Here we have the very first Borrowing Powers Motion with virtually no information on which to base our decision. We are almost wholly in the dark as to what the money is required
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for, or why it should be required so much sooner than was originally thought.
My hon. Friend the Member for Cambridge (Mr. Lane) referred to the article in The Times this morning. I cannot believe that it was intended to be a prospectus for today's debate. From such inquiries as I have been able to make it appears that it was wholly fortuitous that it appeared today, and it is doubtful whether the science correspondent of The Times was even aware that this debate was taking place today. The sort of sums of money which the article indicates will be spent between now and 1975, if we are to have a 20 million-ton replacement in the capacity of the industry are staggering. One is talking in terms of £700 million or £800 million of new investment. Can the hon. Gentleman give us more information about future legislation for further increases in the borrowing powers?
Parliament has every right to expect that before the Government ask for more borrowing we should have, what is badly needed, a sober, realistic, factual report on where the money has gone and what any further money is required for. That would be in marked distinction to the trickle of Press articles we have had, flying kites as to the various forms of rationalisation investment which the Corporation might wish to undertake. We must have a sober, factual report, because it is only on that that we can be expected to judge these matters.
The recent articles in the Press seem to me to have evinced a heady optimism which appears to run the risk of ignoring some of the hard, uncomfortable commercial facts which the Corporation is likely to face not only now but for some years ahead. As they are all we have to go on at present I hope that I shall not be blamed for placing some reliance on these articles. If we are to judge from them, all the signs seem to be that the Corporation is running the danger, run by a number of major science-based industries, of being too production-orientated, with a management and business philosophy guided too much by the objectives of those concerned with production, development and research and not enough by those concerned with the commercial side, notably sales, marketing and finance.
Mr. Mendelson: The hon. Gentleman, who also served on the Standing Committee, will recall that the need for a large amount of new capital expenditure, both for expansion and replacement, was common ground among both sides of the Committee. Therefore, I find it very strange that he should now express surprise that replacement and expansion will require a considerable amount of new financial investment.
Mr. Jenkin: Of course it was common ground. But the sums we now expect to be asked to contemplate in any further borrowing powers bear no relation to the figures that were common ground then. We were relying on the tables in the Benson Report, which gave the sort of investment figures which the Benson Committee felt would be required to carry out the measures of rationalisation which it proposed in Stage 1 of the Report.
It said there that up to 1970 the total borrowing from outside sources would be only £125 million. But here we are up to £300 million borrowing from the Exchequer by 1968, and a further £100 million is now required. The hon. Gentleman is failing to take the point that we have here, two years earlier than we were told in Committee, a requirement for increased borrowing powers which goes beyond anything which was common ground between the two sides in Committee.
Mr. Mendelson: The hon. Gentleman must not quote the Benson Report as Holy Writ. He knows that both on the stocking of steel and the future of the industry many of us maintain that it is not at all reliable. We said that the expansion of the industry was suffering because of the reluctance of private owners, for whom the Report was speaking, to spend properly. The Government were charged with doing that. They will have to explain their policy, and will do it successfully.
Mr. Jenkin: The hon. Gentleman may well make his contribution later, if he catches the eye of the Chair. Perhaps I should not follow him too far down that road, or I should be in danger of being out of order.
If the Press articles to which I have referred are to be taken as in any way
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an accurate guide, there are signs that the Corporation is in danger of becoming too production-orientated and simply hoping that turnover, sales and the return on the capital will follow automatically with an increased investment in productive capacity. These apprehensions are bound to be increased in the case of a State industry where the normal checks, the normal financial disciplines of the market, do not exist, and the only barrier between financial extravagance and the industry are the Ministers responsible for the industry. If they fail in their duty rigorously to scrutinise the industry's capital requirements, even that last check is removed.
The Motion is not a happy augury, because the Minister seemed to feel that all that is necessary is that the Government should give us an anodyne speech as to their hopes for the future, and that they form sufficient argument on which we should base our decision to approve the Motion. I believe that the Parliamentary Secretary has admitted that there was a gross miscalculation resulting in a much earlier demand on the Exchequer for money. The House and the country can reasonably expect that the right hon. Gentleman should accept his new responsibilities seriously and should aim swiftly to get a grip on the finances of this great new Corporation and inject that measure of financial discipline without which all the aims, hopes and aspirations which hon. Members on both sides have expressed will be as but dust.
I should like to put one or two detailed questions to the Parliamentary Secretary arising out of the debate and the points that he made.
There is the question of the reconstruction of the capital debt. I ask the Parliamentary Secretary to bear one point firmly in mind. Unlike almost every other nationalised industry, this industry is in direct competition with producers in the private sector. Will he be prepared now to give an undertaking that any reconstruction of the capital debt of the Corporation will not be such as to enable it by a mere device to have an unfair advantage over the private sector?
The private sector has built into the Act for its benefit many safeguards. No

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doubt under Section 30 it would be entitled to go to the Minister and make its complaints if it felt that as a result of the reconstruction of the capital debt the pricing policy of the Corporation was unduly weighted to its disadvantage. If the Parliamentary Secretary can give an undertaking that that is a factor that he will bear closely in mind, it will go far to reassure those who are already expressing anxiety because of what has appeared in the Press.
Secondly, there is the question of rationalisation. I endorse what was said on page 11 of the first Report of the Corporation:
"there is everything to be said for avoiding delay in starting the rationalisation widely agreed to be necessary ".
There is, as the Parliamentary Secretary is aware, considerable uncertainty in many fields in the industry. This is especially so in cases of complaint which are generally known to be, for whatever reason, in what are now uneconomic locations, such as Consett, Workington, Ebbw Vale and the Shotton Works of John Summers. I know that anxieties are being expressed, certainly to the Corporation, and, I believe, also to the Minister, from people in these areas.
To take one example, I have been privileged to visit the Ebbw Vale plant. The Parliamentary Secretary will know that there has been heavy investment in Ebbw Vale over the last decade with the full support and consent of the Conservative and subsequent Governments. Yet the continued talking about the need for rationalisation, the need to write off capital debt which is not represented by income-producing assets and the need to concentrate production in favourable locations is bound to call into question the continuance of operations on a site such as Ebbw Vale. The same can be said of Consett and similar plants.
All I ask—one cannot ask for more—is that the decisions on these matters should be taken with the greatest speed. It is of the utmost importance that uncertainty should be removed at the earliest opportunity.
This problem was faced in the Benson Report. It was recognised that the answer for many sites is that, although basic steelmaking probably will eventually cease to be carried on there, many of
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the finishing processes, processes down the line, can with advantage continue to be carried on at these sites which have all the social capital—that is a phrase which occurs in the Benson Report again and again—available as well as all the skilled manpower to enable this to be done. If this is to happen, the decisions must be announced as soon as possible.
It simply does not lie in the mouths of those who demanded nationalisation, who argued that the main reason for it was the need to rationalise the industry and who are now calling for the writing off of uneconomic capital to refuse to say what the consequences of this will be. This is if I may say so particularly important for those who represent the constituencies that are likely to be affected.
I now want to say a word about centralised marketing. My hon. Friend the Member for Cambridge referred to this. This is a matter which has caused considerable anxiety, particularly among consumers of steel. In paragraph 64 on page 25 of the first Report the Corporation stated:
"The spur of competition, other than in price, between the Groups and between the units below is in our view highly desirable."
Elsewhere in the Report there are references to "strong technical rivalry", and so on. I believe this to be as absolutely the right approach. However, what are we seeing at the moment?
When Lord Melchett and some of his colleagues visited America it was reported that they came back very much impressed by the arguments for much greater centralisation of marketing and selling. I believe that they have been misled by this and would do well to have regard to what they said in then-first Report published after vesting day.
I have already mentioned consumers. Any centralisation of marketing and allocation of orders between different producing centres is bound to limit choice; this will have an effect on quality, which is already affected by the loyalty rebate; any centralisation will be damaging to consumers.
I ask the Parliamentary Secretary to bear in mind that one of the factors on which one has to concentrate in any reorganisation of this sort is the problem of the injection into the management of the most effective stimulus to greater

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efficiency and greater enterprise. If the managements of the constituent groups and the constituent units in the British Steel Corporation cease to be responsible for the winning of orders and the satisfying of their customers as to quality and merely take the orders that are farmed out to them from a central authority, a great deal of that stimulus will be removed.
There must be the spur of achievement in earning the return on capital ensuring the growth of the business and securing the results which the management seeks to achieve. That must be a vital factor in any management structure. I should be very much afraid, if there was too great centralisation of selling and marketing, that much of the stimulus would be removed. It would gravely impair the incentives which must operate on management.
The American example is not a wholly relevant one. Although the individual steel companies—Bethlehem, United States Steel and so on—operate centralised organisations, they do so in competition with each other and there is a wide measure of competition. Here, the British Steel Corporation, with 90 per cent. of the trade, would be the only major producer, and I believe that centralisation would eliminate a great deal of valuable competition which can exist even without there being price competition.
Finally, in the international sphere, my hon. Friend the Member for Cambridge expressed disappointment, as I felt, that the Parliamentary Secretary was unable the other day in reply to a supplementary question from myself to indicate that there had been any progress in the talks with a view to bringing order to an industry where what is going on is widespread mutual dumping. We can do something here by swift imposition of anti-dumping duties if dumping is proved. But the problem is much wider than that. There is great over-capacity in the world, and countries are now dumping on each other on an almost unprecedented scale. This results, inevitably, in very low returns on capital and, of course, in grave difficulties for individual nationalised industries.
What is the Government's attitude? Do they regard international action as being
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an answer? If so, why do they not do more to press this ahead? Or is it thought that this would result in some form of undesirable international cartel and that they see the remedy in some other way? If so, I believe that the hon. Gentleman owes it to the House to explain the Government's attitude.
I agree that the Corporation will need more money, and not only this £100 million, when we have further extension of the borrowing powers. But could not part of it be found by hiving off those activities of the Corporation which are only indirectly, if at all, related to the basic production of iron and steel? We had long arguments in Committee about the wide diversification powers of the Corporation and the many non-steel activities which were being swept into the maw of the Corporation by the Act.
Does it help to concentrate the management's attention on the basic problems of achieving rationalisation in iron and steel production if it is, at the same time, also responsible for operating brick works and is engaging in the construction industry, engineering and many other forms of subsidiary activity? Could not more of the capital needed be found by selling off these activities to the public? I believe that this would do a great deal to concentrate the attention of the management on the vital problems facing the industry.
We do not propose to divide against the Motion. We are bitterly disappointed that the information given to enable us to consider it has been so inadequate and that the Motion should have been brought forward so much earlier than originally envisaged, but we recognise that the Corporation must have resources with which to carry out its task and the fact that the Government made such a miscalculation of this requirement 18 months ago should not prejudice the Corporation in its efforts to deal with the problems facing it.
We hope that the Corporation will succeed in achieving some of the objectives which the Government saw as the primary object of the Act. If we have our doubts, we shall continue to keep them for the time being muted. The most important thing is that the management of this great enterprise should be encouraged to give of its best with the

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minimum of interference from the politicians. I hope that the contribution the House has made to that end today may have gone some way to helping the industry to face the problems with the confidence and determination which I am sure it wishes to have.
Mr. Speaker: I might have allowed the debate to proceed on narrow rules of order, but I broadened it. However, I am in some difficulty. If it were not for the strict rule of the House which necessitates a vote when an hon. Member calls attention to the presence of strangers, I would have informed the House that, in the Strangers' Gallery, listening to the debate, there is a very distinguished British citizen who has brought honour to his country—Sir Alec Rose.
Hon. Members: Hear, hear.
3.3 p.m.
Mr. Freeson: I warmly welcome your intervention in the debate, Mr. Speaker, to give the welcome of the House to our distinguished visitor.
Before I deal with some of the points raised in the debate, I would like to add my congratulations to my hon. Friend the Member for Sheffield, Brightside (Mr. Eddie Griffiths). I am sure that, despite the implied remarks to the contrary by at least one hon. Member opposite, his arrival precedes the arrival of many more Socialist Members in due course. For the time being, I confine myself to congratulating him on the thoughtfulness of his speech, on the inside information and knowledge he brought with it, and to expressing the view that we welcome the kind of experience that he brings and look forward to hearing it in future debates and studies of the problems of the steel industry.
My hon. Friend raised several points about the industry which I am sure will be noted by the Corporation, as they will be by the Ministry itself. It may be that, to some extent, I will refer to them directly or indirectly in my remarks but I want to single out one of them for a brief comment now, although I commented on it in opening the debate. It concerns the question of worker directors. Before he came here my hon. Friend was one of the 12 workers in the industry chosen to become a worker-
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director. I met the remaining 11 some two or three weeks ago in a most interesting series of exchanges and discussions in the House during the course of studies on which they embarked under the auspices of the Steel Corporation and the T.U.C. I found it a stimulating and interesting experience.
Most of the issues which were raised in the debate were covered again more extensively by the hon. Member for Wan-stead and Woodford (Mr. Patrick Jenkin). I shall deal with as many as I can and if I overlook any matters of substance, we shall study the OFFICIAL REPORT and do our best to answer in detail. The hon. Member for Wanstead and Woodford referred to dumping, a subject which was mentioned at Question time the other day, and asked what was our position and whether we expected any progress in the international discussions now going on, and what the Government's attitude would be if the present state of affairs continued.
It is not possible for me today to say what progress, if any, there has been in these international discussions. I do not have the details of times and dates, but I understand that we have made it clear that we would be prepared to take antidumping action if it were necessary. But we have not had representations from the B.S.C. on dumping to date, although there has been at least one case in which the Government have taken action, that of Canadian galvanised sheet steel some little time ago.
It must be remembered that the main issue of competition is primarily a matter for the B.S.C., and I am sure that it, as is the private sector, is quite capable of presenting a case to us if it is necessary for action to be taken. In the meantime, international studies of the world situation are taking place, with our full participation in O.E.C.D. and in the Council of Association of the E.C.S.C., and we must await their outcome. It is at least indicative evidence that a consequence of devaluation has been a drop in the rate of imports—more correctly, a check in the rising trend of imports— and I have figures which show that they are now about 2¾ million tons per annum, which is about 11 per cent. of demand. The Corporation expects that steel exports this year will be twice as large as imports. This is a subject on

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which we await further information from the industry if it is necessary, but it is not a matter which we treat lightly. This is a serious situation which is being closely watched by the Department as well as by the industry.
The hon. Member for Wanstead and Woodford raised the issue of the company structure, as did the hon. Member for Cambridge (Mr. Lane). As I shall have to say on a number of issues, in this respect we will have to await the report, which we are expecting to have by the end of the year, about the future position of the Corporation and its organisation.
As to the structure of the industry, I can assure Members that the Minister has asked the B.S.C., when preparing this report, to make a very thorough evaluation of the case for or against the reshaping of its organisation. It is impossible for me to indicate the outcome of the report, but we have shown that we are interested in this and I am confident the B.S.C. will deal with this thoroughly.
Mr. Patrick Jenkin: Will the hon. Gentleman deal with an important point I raised about the impact that this would have upon fair competiton with the private sector? Will this factor be very much in his mind?
Mr. Freeson: I can give the assurance that in so far as there is any change it will not be a device to introduce an element of unfair competition with the private sector. If there are conclusions leading to the reshaping of the company structure, they will be based upon internal needs as the B.S.C. sees them, and will not be devices for unfair competition. There is adequate machinery for making submissions to the Minister about unfair trading practices.
The hon. Member for Wanstead and Woodford spoke about rationalisation, and urged that decisions be taken as quickly as possible to relieve anxieties felt in plants and among staffs in different parts of the country. This too will have to await the report, but the B.S.C. is well aware of the need for speed in getting the industry organised properly.
Another point that was stressed, perhaps a little unduly and repetitiously, was the reason for the early return of the Government to the House seeking leave for an extension for borrowing powers. It
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was said that I had been remiss in providing so little information in my opening remarks. Another question was: How could there be such a serious underestimate of the requirements of the industry so soon after vesting date? The first point to remember is that the B.S.C. did not underestimate. No criticism can be levelled against it. Remarks of hon. Gentlemen implied that this was another way in which nationalised industries did not do their job properly.
Mr. Patrick Jenkin: I never said that. I would not wish to make any criticism of the Corporation. This is a responsibility and failure resting squarely upon right hon. Gentlemen opposite.
Mr. Freeson: Upon reading the OFFICIAL REPORT hon. Members will agree that the content and manner of the remarks gave the impression that this was a criticsm of the new set-up in the industry. If there is any responsibility it rests with this House and members of the Government.
I am advised that in Committee—I was not present; I was not then in this office—my predecessor made it clear that the estimates which could be made for internal financing could be only rough estimates. But we cannot separate the possible level of internal financing from the need for further borrowing powers. One is linked with the other. If one has miscalculated on the amount of internal financing, clearly one has to draw capital from elsewhere; one will require extended borrowing powers. My predecessor said that these were rough estimates. I will give further information about precisely where they went wrong.
Mr. Ridley: The hon. Gentleman is addressing himself to the wrong point. The point is this: why did not the Government know that £195 million worth of obligations, debts and overdrafts would have to be refinanced when they put the estimate in last year's Budget? This is nothing to do with self-financing. It is question of financing the existing debts and obligations of the companies. Why did not the Government know about them and tell the House about them?
Mr. Freeson: I do not know why the hon. Gentleman should assume that I

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am dodging the question. I was coming to the point. It is nonsense to suggest that one can separate the level of internal financing from the need for borrowing.
It has been suggested that we should have known what the full extent would be. It would have been very difficult, in advance of vesting day for the Government or any other authority acting in this matter to have known fully the liabilities with which they would have to deal. The Corporation, in taking on its responsibilities, subsequent to the Measure becoming law, found that instead of an estimated bank overdraft fundable of £32 million, £79 million in liabilities of the companies which it inherited had to be funded. It found in connection with trade bills and acceptance credits in respect of the companies which it took over that a nil estimate turned out to be £47 million.
I could quote a number of other items. We are prepared—[An HON. MEMBER: "Astonishing."] There is nothing astonishing about it. I think that it is true to say that the people operating the Corporation are reasonably competent and to suggest that it is astonishing that they should have discovered this is a criticism of them and not of the House.
Mr. Ridley: I must press the hon. Gentleman on this matter. He is now saying that the Government proceeded to nationalise steel without realising that the industry was worth £195 million less than they expected. How could an Administration be so crassly incompetent as the one of which he is a member?
Mr. Freeson: The hon. Gentleman should not insist on making little dramatic speeches in interventions. If he has a point to make, we will seek to answer it. Never mind the dramatic interventions. If he is eager to learn of the state of the industry prior to vesting day, I suggest that he awaits the report that we shall get in due course from the industry. I am sure that it will give all the information required by hon. Members on both sides of the House.
I have sought to deal with the matters on which I was asked for information and with the question of the additional finance required which has given rise to our earlier return to the House for the
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money necessary to enable the Corporation to fulfil its obligation. I should deal briefly with the question of the capital reconstruction which was referred to at great length by the hon. Member for Wanstead and Woodford and other hon. Members. Clearly, hon. Members opposite are being rather precipitate. I indicated in my opening speech that this must await the report that we shall get from the industry. It will involve our consideration of how the starting capital debt is to be treated. Similarly, we must await that report, and the requirements and recommendations which it indicates, before we can know whether there will be a need for legislation, let alone the timing of the legislation.
It will depend upon the kind of financial recommendations that are put to the Government and are finally approved. Then, it will be decided whether legislation is necessary. This afternoon, therefore, I cannot indicate a date or whether there will be need to bring forward legislation.
A number of points were put concerning the future running of the industry. These points arise under the general heading of the structure of the industry, for which, again, we must await the report.
I regret that by the nature of the situation, it being an interim point in time, one cannot go into detail beyond giving the kind of broad outline and summary progress report that I sought to do in my opening remarks. I can, however, assure the House that clearly it will not be long before the Corporation is able to submit a full report to the Government. There will be ample opportunity for Parliament to consider any submissions which are made and any legislative proposals that need to follow. Full information will be available to hon. Members about the proposals of the industry and of the Corporation for the future and the extent to which they are accepted by the Government and acted upon in conjunction with the Corporation.
It is unfortunate from a Parliamentary point of view that one must discuss the situation on such an outline basis instead of full information, but that is part of the facts of the situation. It is not the result of trying to hold back information or views which hon. Members want to

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hear and discuss. There will be ample opportunity for this and we intend to keep in close touch with Parliament when we have received the recommendations of the Corporation and have any conclusions of our own to put forward on the future of the industry.
Question put and agreed to.
Resolved,
That section 19(4) of the Iron and Steel Act, 1967, shall have effect with the substitution for the reference therein to £300,000,000 of a reference to £400,000,000.

INDEX OF RETAIL PRICES
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Ernest G. Perry.]
3.24 p.m.
Mr. Norman Atkinson: In welcoming the Report of the Cost-of-Living Advisory Committee, which was published last Wednesday, I should like to make one or two comments in the hope that my hon. Friend from the Department will be here to hear some of my comments about the conclusions which have been reached.
First, we should put on record that the Consumer Council is extremely gratified and grateful for some of the recommendations which have been made by the Advisory Committee. Indeed, most of the criticisms made by the Consumer Council and published by it last April are now incorporated in the recommendations which have been put before the House.
I welcome particularly the recommendations which have suggested that pensioners, where there are one or two members of a family, should have an index of their own. This is something for which on this side of the House we have argued for a long time, and we are grateful that it is now recommended to the Government. There are a number of other features about it which are also acceptable, and I hope that the Government will, before very long, incorporate the proposals made for the new structure.
Personally—and this is the view of other hon. Members on this side—I hope that they will very shortly go much further and start to reconstruct the whole of
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the index in a different way and base the new index on the cost of living rather than on prices. A point which strikes me about this is the fact that the Advisory Committee itself has recommended that the name be changed from that of the Cost-of-Living Advisory Committee to the Index of Retail Prices Advisory Committee. I hope that the Government will not pay attention to that recommendation because, like many other hon. Members, I hope that this will ultimately become a cost-of-living index and not, as it is at present, a prices index. There is a very great difference between the tables of the one kind and the other. The index of retail prices does not represent the cost of living.
I mention this because I believe this to be one of the most explosive issues in politics. Certainly, the Labour movement has suffered during the last three years from public criticism of the Government that the index does not represent truly the increases in the cost of living It is argued, and it is certainly borne out by our by-election experience, that the Government are seen to restrain wages while, at the same time, trying to encourage price increases. People can see prices increasing, the cost of services going up, and so on, and yet they feel restraint upon their incomes. This has led to tremendous criticism of the Government and, as has been seen at by-elections and on other occasions, the Government have suffered criticism for what, to be fair, is not altogether their responsibility, as I hope to prove in a moment or two.
None the less, people do not accept that the Index of Retail Prices has represented the true increases in the cost of living over the years past. They believe that this is a sort of brain-washing process. In general terms, it is referred to on the doorstep as "baloney". That is the sort of attitude that people have towards these figures. They have no confidence in them. If the Labour Government are to re-establish confidence in the work they are now trying to do they have somehow or another to re-establish confidence and understanding, and to present the figures in a way which people will believe to be a true reflection of what was going on.
For instance, if the Press were to undertake an opinion poll and were to put the

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question to people, "Do you believe that the Index of Retail Prices is true or false?" the overwhelming reply would be "It is false." This is borne out by many of the comments in letters to the Press which we so regularly see.
Now that my hon. Friend has arrived, I am about, as he will recognise, to get to some of the meat of the argument.
The Under-Secretary of State for Employment and Productivity (Mr. Roy Hattersley): I beg my hon. Friend's pardon and I am grateful to him.
Mr. Atkinson: We must ask why people do not believe in the figures and why they have no confidence in them. I wish to show how people see the rises in the cost of living and how those rises affect their living standards.
An item which has frequently been put to me in correspondence is the cost of motoring. The weight given in the index to motoring is almost the same as that given to housing; there is just a one point difference, a one-thousandth difference. Almost half the people are motorists and are concerned about the effects of the Budget upon motoring costs. I take the example of the motorist who uses his car for travelling to and from work and occasionally for pleasure, using four gallons of petrol a week. Prior to the Budget the annual cost of doing so was about £75, taking the combined cost of road tax and petrol and excluding depreciation costs, and so on. As a result of the Budget, those costs have increased by 12 per cent., from £75 to £84 5s. per year.
This is shown in the index under "Transport" as a 4 per cent. increase for the reason that as all the inhabitants of the country are not motorists the figure is divisible. In the official index of the cost of living it appears as an increase of such an infinitesimal amount that it has almost disappeared. The motorist suffers a 12 per cent. increase in the cost of his motoring and sees nothing to show for it in the index, and, therefore, he says that the tables are "baloney", they are wrong, and do not reflect the rise in his cost of living.
An almost equivalent weight is given to housing in the index. Council tenants and private tenants in the London area, because of the new regulated rents which
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are being established, have suffered over the years on average a 20 per cent. increase in rent. The rising costs of building and the increase in the cost of money have affected local authorities by about a 20 per cent. increase. There is little to show in the index for these tremendously increased costs. People in London are suffering enormous rent increases, in some cases as much as £2 or £3 per week; in one case an increase of £5 10s. per week has been suffered as a result of a registered rent. Such increases represent an enormous percentage of people's incomes, yet there is little in the index to show that increases of this sort have taken place.
Those are two reasons why people reject the index as being representative of the increased costs which they are suffering in their everyday lives. It is why they believe that they are being conned with these figures, which have been so important in the consideration of wage negotiations until recently, and which have a tremendous bearing on internal costs.
I want to go back over a period of 30 years, to 1938. It is only by doing that that one can judge the accuracy of the tables and decide whether the conclusions to be drawn from the index in terms of the cost of living are correct. As a result of my own and other people's researches, there are some remarkable figures which disprove the accuracy of the index. Today, the £ is worth 5s. 6d. in purchasing power compared with 1938. Over the same period of 30 years, the wages of manual workers have gone up nearly 600 per cent., which would suggest that our living standards should have increased enormously over that time. However, the facts do not support that.
There have been tremendous advances in technology and medicine, and the quality of our life has improved over those 30 years. But, in hard economic terms, manual workers have had nothing like the increase in their standard of living that the index would suggest, and I want to give some brief examples to show that.
I have four which I think are representative, and I present them in this way because I oppose the economists who argue that the cost of living and living standards over the years can be measured

987
by indices of this sort. That is grossly misleading, and I want to put an alternative point of view which also answers those who charge manual wage earners with being responsible for many of our economic problems. It is a charge which is not substantiated, and, although it is part of the prices and incomes policy as a whole, it is important that the point should be made on behalf of our manual workers.
The only way in which one can measure the living standards of people is by asking how long it takes a worker to earn enough to buy the product that he is making. There are some very good examples which indicate what has happened over the last 30 years.
I take, first, the case of a coal miner. In 1938, it took him exactly 1¼ hours to earn sufficient to buy 1 cwt of coal. According to information provided by the Coal Board, in 1968 it takes a miner exactly 1 hour and 20 minutes to earn enough to buy a bag of coal. His living standards have gone down relative to the commodity that he is producing.
Then I take a cabinet maker—and I am not speaking about my right hon. Friend the Prime Minister—but about a cabinet maker producing timber products. In 1938, it took a cabinet maker exactly a week to earn enough to purchase a kitchen cabinet. From photographs and specifications, I have been able to select a kitchen cabinet of almost identical construction which is produced today. It contains the same weight of timber and almost the same amount of work goes into it. Today, it takes a cabinet maker exactly a week to earn enough to purchase that kitchen cabinet. Therefore, the living standards of the coal miner and the cabinet maker are the same.
There is a revealing situation concerning the skilled building worker. In 1938, on average earnings, the skilled building worker had to work 100 weeks to earn sufficient to buy his own product—the average little semi-detached that we knew well all over the country in 1938. A skilled building worker today, who is doing well and having a good year, needs to work 150 weeks to earn sufficient to buy his own product. That is a remarkable situation when one measures living standards in this way.
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I could go through a whole list of skilled trades, including engineers. One finds that it takes the same, or in some cases more, hours for the worker to earn sufficient to buy his own product. That is the only way in which we can measure the living standards of manual workers. It is not true, as the index suggests, that we have never had it so good. In that sense there is a tremendous difference.
Of all the skilled trades that I have examined, only one shows benefit to the worker through productivity. I refer to the electricity supply worker. His earnings per hour in 1938 enabled him to purchase 22 units of electricity. In 1968. based on an average consumption of 400 units per quarter, which is a very small amount but it illustrates the point, he is able to earn per hour the equivalent of 32 units of electricity. That is the only example, with new techniques and methods within a more sophisticated industry and society, where the worker is shown to be able, with one hour's work, to purchase more of that which he produces than in 1938. I think that the examples I have quoted condemn the accuracy of the index as we see it at the moment.
I now move on to the claim that the index should be based upon a regional pattern. Why is this so important to trade unionists? Why is it so revealing? The Advisory Committee has said that it may be that costs will ultimately prevent it from designing a regionally based index and prevent it establishing a cost of living index as distinct from the Index of Retail Prices. But I hope that the Government will have another look at that, because it is important that we get this right regarding manual workers. It has a distorting effect upon earnings in this country and it is changing the pattern. Although I represent a London constituency, it is fair to point out that London workers particularly have suffered as a result of this type of index which has influenced base rates throughout heavy engineering and other industries.
Why should it be on a regional basis? I have discovered some astounding facts which are not recognised. I have tried to take a representative sample of manual workers in industry and the kind of earnings that they get. I am sure

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that I will shatter a few illusions in presenting these facts.
The United Kingdom is divided into 10 economic regions. In all publications it is done in this way for obvious reasons. It has long been assumed that London industrial workers have always headed the list. They did so in 1938. But, because of the kind of retail indices that we use, the influence has always been against the interests of London workers.
What do I mean by that? If we take skilled time workers, including overtime but excluding piece workers, the hourly rates are somewhat revealing. The West Midlands are at the top of the table, with earnings at 11s. 6d. per hour. No. 2 is Wales—and no doubt this is a shattering thought for some of my Welsh hon. Friends—with earnings at 11s. an hour. Next comes the North of England, including the North-East, which more or less shares that position with London and the South-East, at 10s. 9d. Fifth is Scotland, at 10s. 7d. At the bottom, there is Yorkshire, where the figure is 9s. 4d. That table of earnings is similar to the earnings of manual workers in other industries.
It is time that we told the country that the streets of London are no longer paved with gold. We must tell the workers in Wales, in the North of England and in Scotland that there are no fortunes to be made in London. We must tell them that, on the basis of the figures which I have quoted, if they travel to London to find work they are in danger of their living standard going down. Workers throughout the country should know that before they drift towards the London area in search of higher earnings.
Those are remarkable figures, and they are quite astonishing when one realises that two so-called distressed areas, Wales and the North of England, are marginally higher than London. I am not suggesting that London is a distressed area. It is not. It has gained a lot from the masses of professional workers and office staff who have gained as a result of the tables, and whose living standards have increased proportionately more than those of manual workers.
It is suggested that the increased cost of housing, rents, purchases, transport,
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and so on, all fundamental factors in the cost of living, add up on average to about 1s. 6d. per hour. If we deduct this figure from the hourly earnings which I have mentioned, London is at the bottom of the table. Therefore, to get rid of this illusion about earnings, and particularly in London, it is necessary to have a different kind of index altogether and get away from the Index of Retail Prices as we know it.
I hope that the Government will take note of that, and that the Chancellor of the Exchequer will note it, too, because not only my right hon. Friend, but previous Chancellors, including those from the party opposite, have claimed that there is a need to disperse industry away from London to take the heat out of wages. If one includes the extra cost of housing, transport and so on, in the London area, one sees that earnings in London are at the bottom of the table in engineering time rates. The policy of dispersing industry from London is based on a false premise, and much of the responsibility for that lies with the type of index we use at the moment. It is necessary to look at this again, and to base it on regional earning standards. as recommended not only by the Consumer Council but by the trade unions.
We welcome the recommendations in the Report published on Wednesday. We congratulate the Committee on recommending a separate index for pensioners. I think that it can do well in influencing the level of pensions and giving us a much truer picture of the struggle which pensioners are facing. We congratulate the Committee, too, on its acceptance of some of the proposals made by the Consumer Council. Incidentally, there is a strong case for having on the Committee a member nominatetd by the Consumer Council.
I hope that my hon. Friend the Undersecretary will consider the possibility of having a direct representative and of strengthening the trade union representation. I understand that Mr. Sidney Greene, of the N.U.R., is the only trade union representative on the Committee. I hope, therefore, that there will be stronger trade union representation.
I hope, as a result, that the Government, having gone with the Committee so far in making the changes which have

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been proposed, will start to go in another direction and consider the possibility of a regional index based upon prices, taking greater note of the family the cost of living and not on retail survey and what has been done in that way, to get a different set of tables giving a much more accurate picture of what is happening to the cost of living throughout the country.
The time has come when we must stop kidding the people about the cost of living and what is happening to it. It is utterly wrong to go on repeating these stories which we know to be false. I believe, therefore, that the future of my party and of my Government rests in establishing confidence in these indices in such a way that people can see clearly that the figures presented represent an understanding of how the cost of living has increased over the last 30 years.
3.51 p.m.
Mr. William Molloy: I rise to make only a brief contribution to the debate which has been so ably initiated by my hon. Friend the Member for Tottenham (Mr. Atkinson). The House will agree that he has done an amazing amount of realistic research into an important subject. Although "Index of Retail Prices" is not a particularly attractive title, it nevertheless plays an extraordinarily important part in the lives of ordinary people.
The gravamen of the case so ably submitted by my hon. Friend concerning the important part played by such an index is that it is imperative that it should be accurate and true and should forecast as nearly as possible the true position. It must, therefore, follow that if the converse applies and it does not do that, a serious situation exists. The case made by my hon. Friend is well worthy of examination. I am sure that my hon. Friend the Under-Secretary is aware of the apprehension which is felt, particularly on this side of the House, about the whole question of the index.
Whilst naturally, I have an interest in the country where I was born, I am, like my hon. Friend the Member for Tottenham, a London Member. I always suffer from the fact that I am a Welshman with an Irish name representing an English constituency. The argument put by my hon. Friend has more effect in
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Greater London than anywhere else in the country. It is working-class Londoners who suffer most because of some of the errors in the Index of Retail Prices.
It might be difficult immediately to initiate a regional assessment of the index, because it must follow that to pursue it the whole way through would be a complicated business. Let me explain what I mean. This morning we were debating an important matter—the Supplementary Benefit (Determination of Requirements) Regulations, 1968. My right hon. Friend the Minister of Social Security sought leave to introduce provisions to increase those benefits. It is not unreasonable to assume that the Commission involved in that assessment had taken cognisance of the index.
It follows that if the index is true in some parts of the country, it is grievously in error for other parts of the country. To follow that argument to its logical conclusion, my right hon. Friend the Minister of Social Security should have advocated different increases for different parts of the country. I readily understand that many problems would be created in trying to erase what I believe to be a serious error.
I also understand that the Committee which examines the Index of Retail Prices is comprised of a number of people representing all walks of life. Sometimes when we on this side raise this point we are told that the workers are well represented on the board by the trade unions. This may be so in theory, but I think that there may be just as big an error in the theory of trade union representation as there is in the index itself. The probability is that decisions are made on a majority basis. I believe that when one is talking about the cost of living and the index workers should be in the majority to express their views, and I doubt whether that is the case in this instance.
I hope that the Under-Secretary will give full weight to what my hon. Friend has said. In essence we are talking about an instrument that exists and decides all sorts of things. It decides the basic pay in some industries in which the basic wage is determined by a wages council, and when it is arriving at its conclusion no doubt the wages council takes into account the index. I should also have

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thought that when some other Ministers are arriving at decisions they must take account of the index. Therefore, if the index is in error it must be put right.
I can understand the problem if it means putting the index on a regional basis. But if, for economic planning purposes, we divided Great Britain into 10 regions, that must be carried through every other aspect of economic life, including the index. Otherwise, one is not being fair.
My hon. Friend has submitted an able case, and I hope that the Under-Secretary will give sympathetic consideration to it and ensure that an examination is initiated so that we get a reflection of the true position in the index. The agony of the situation is that the degree of error that may exist hits more painfully and brutally the more one goes down the scale. It hurts those who are receiving least. Because of this, I ask the Under-Secretary to examine the proposals so ably outlined by my hon. Friend.
3.58 p.m.
The Under-Secretary of State for Employment and Productivity (Mr. Roy Hattersley): I thank my hon. Friend the Member for Tottenham (Mr. Atkinson) for raising this vitally important matter and giving the Government an opportunity to comment on his criticisms which result from his examination of the Index of Retail Prices. I also thank him for his courtesies to me during the first two or three minutes of his speech and particularly for his conclusion that, although he does not believe that the streets of London are paved with gold, the streets of the West Midlands may be. In four hours' time when I return to the bosom of my Birmingham constituents I shall quote his conclusion to them, but I can give him no assurance that they will believe either him or me.
I must say at the outset about my hon. Friend's analysis that I cannot agree with the main criteria that he used to judge the validity of our price estimation or with his comparison of what a man's weekly or hourly earnings would buy in terms of his own product five, 10 or 20 years ago and now. I have no doubt that my hon. Friend is right in saying that only in the electricity supply industry can the worker be sure that he can buy for
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his weekly wage more of his output now than he could 30 years ago.
I am equally sure that my hon. Friend would agree that, throughout industry, most working men can anticipate that their Thursday or Friday or end of the month pay packet will enable them to buy more of other people's output than they could 20 or 30 years ago. I am sure that he would not argue about that basic conclusion and would conclude that the analysis he made in these rather limited terms is not the most appropriate for deciding whether the indices are accurate or not.
Mr. Atkinson: But whatever the analysis—
It being Four o'clock, the Motion for the Adjournment of the House lapsed, without Question put.
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Pentland.]
Mr. Atkinson Mr. Atkinson rose—
Mr. Speaker: Order. The hon. Gentleman had a long innings and I hope that he will allow the Undersecretary of State to speak.
Mr. Atkinson: I only intervene because this is a very important point, Mr. Speaker. It is no illusion that dependence of the standard of living in this country to a large extent revolves around the number of wives who are working. My hon. Friend must surely take into account the fact that workers can buy so much more than they could 20 or 30 years ago because of the extra income brought in by their wives in so many cases.
Mr. Hattersley: I will take that into account in the main part of my speech in which I shall ask my hon. Friend, and anyone else listening or who will read the debate, to draw a distinction between a Cost of Living Index and the Retail Price Index. This is the nub of the argument.
Having exemplified these areas of disagreement between us, I go on to accept at least one of the main points my hon. Friend made about the Retail Prices Index as it stands. There is no doubt that the accuracy of the index is widely doubted. In my view, that doubt stems

995
from a misunderstanding of the job the Index is intended to do and from the necessarily complicated fashion in which that job is done. It would be wrong to pretend, however, that this scepticism— unwarranted in my view—about its validity is not to be found both inside and outside the House. If for no other reason I welcome this opportunity of trying to dispel some of that scepticism.
The April edition of Focus, the journal of the Consumer Council, crystallised much of the doubt and scepticism and because of the criticism and scepticism expressed there, my right hon. Friend the then Minister of Labour asked the Cost of Living Advisory Committee to examine the specific points the article made. Section VIII of the Report of the Committee deals with the criticism and it is important to establish the general status of the Index before we talk about the adaptation and extensions that my hon. Friends have urged on the Government.
The Index of Retail Prices is not a cost of living index. My hon. Friend the Member for Tottenham talked as if it was and then he went on to wish that it were. I remind him that it is not, and that it is not claimed to be so. There are many complications in compiling a cost of living index rather than an index of retail prices. Not the least is that a retail price index can be an objective and precise thing, the accuracy and validity of which can be demonstrated beyond question.
The criteria which go into the compilation of a cost of living index are, by nature, in part subjective and it is difficult to imagine the calculation of such an index which would not lead to all sorts of suggestions and criticisms that the very principles on which it was based, the very conclusions on which the statistics were calculated, were unjust, inaccurate and the result of a wrong subjective judgment.
The Index of Retail Prices seeks to be no more than its title suggests. It does not measure changes in total expenditure —the total amount spent in order to live or the effects of direct taxation, and so on. All it claims to measure is changes in retail prices of goods and services.
The goods and services included in its survey are generally representative. Great
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trouble is taken during the Family Expenditure Survey to ensure that this is so. The items are both representative of consumer spending and indicative of price movements in other related goods, and every effort is made to allow for changes in quality of goods within the index. It is a difficult calculation, but one which must be made if the index is to have real validity.
All these things make the index a complicated calculation and it is in part the complications which raise doubts about its accuracy and give rise to perhaps natural feelings that a system which is so involved must ipso facto be open to doubt. Yet it is these complications, the selection of goods, the weighting of items, the special calculation of housing costs, which make it as accurate an index as it is, and I emphasise again that, within the terms which it sets itself, the calculation of movements in a selected and representative list of goods, it is a very accurate index.
Indeed, the Report of the Advisory Committee, published on Wednesday, includes a considered and unequivocal judgment about the validity of the index. The Committee's judgment was that
"in its present form the index is working well and can be accepted with confidence as a satisfactory measure of changes in the average level of the retail prices of goods and services bought by a large majority of households and persons in this country."
But that, of course, is not to say that the index is incapable of adaptation and extension. My hon. Friend will know that some of the adaptations and extensions which he has urged on the House are acceptable to that Committee and to my right hon. Friend. The Fourth Report of the Estimates Committee was sure that some extension was necessary and that the index would be made more useful if it were supplemented by periodical indications of changes in the cost of living for a number of groups.
In its report the Cost of Living Advisory Committee made judgments on exactly this matter, and the House will know that my right hon. Friend has accepted all these recommendations. In paragraph 48 the Report says that movements in the expenditure of pensioners are not necessarily different from the general movement of households simply because the consumption patterns of the

997
two groups differ. However, in paragraph 50 it concluded that evidence supplied by my Department:
"lends colour to the view that the retail price index may not be a reliable measure of changes in the prices affecting the expenditure of pensioner households."
As a result, the Committee recommends that special indices of retail prices should be compiled and published quarterly for one-person and two-person pensioner households. It also recommends that, after some experience has been gained of this type of limited group index, further consideration should be given to compiling indices for low income households with children.
The second group index to which the Committee referred and to which my hon. Friend referred also deserves examination. It is that point which he rightly made when he asked the House to consider the abnormally high costs of housing in London as compared with the rest of the country. It is that sort of point which the Committee examined when it considered the propriety and possibility of regional indices. The Committee concluded that the desirability of compiling and publishing retail price indices for regions and sub-regions could not be accurately assessed before we knew more about the technical problems involved.
I emphasise again that the technical problems of a calculation of this sort have paramount importance. I know very well the scepticism which always greets Ministers who say that they find an idea attractive, but that substantial technical problems are involved. However, my hon. Friend the Member for Ealing, North (Mr. Molloy) put the point admirably and exactly when he talked about the necessity of creating an index which could be trusted and believed. If we are to produce an index which can be trusted and believed, it is essential that the technical problems be overcome, and if the technical solutions are not right, the index is not right, and if the index is not right, it neither justifies nor warrants belief, and the entire operation is, at best, useless and, at worst, dangerous.
If the technical problems cannot be overcome the index is meaningless. It is not enough to say that we need regional indices. We have to be sure that meaningful regional indices can be calculated.
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They would need to be, and I am sure that this is what my hon. Friend wants, regional price indices which do not show so much the movement of prices within any one region, but the relationship between the prices in any two, three or five regions.
It is important to know that from, say base year 1968, the cost of living in London or Birmingham or Sheffield has gone up by 5 per cent. over a three-year period. It is much more important to know how the cost of living fared in London as compared with Sheffield, Birmingham, Newcastle or Cardiff. The Advisory Committee agreed that statistics showing regional differences in family incomes do not reliably indicate differences of levels in prosperity unless allowance can be made for inter-regional price differences.
The Committee went on to emphasise the problem facing a worker about to change his job, yet unable to calculate what his real income might be in his new place of employment since he had no idea of what changes in retail prices he would face. The creation of reliable inter-regional indices to meet these needs poses formidable technical problems, set out in great detail in paragraphs 30 to 39 of the Report. To provide such figures would mean that a lower level of precision and more infrequent publication would have to be accepted for these special calculations.
This is not necessarily to say that such indices should not be calculated, but it emphasises the need to examine how accurate and valuable they would be. The report recommends that the technical difficulties should be examined immediately, and I am happy to tell the House that my Department, on the instruction of my right hon. Friend has already begun this examination of the possibility of regional indices.
In short, we recognise the force of my hon. Friend's argument that regional indices are desirable. On the other hand, the practical difficulties may mean that a calculation of such indices would at best be meaningless, and at worst inaccurate and misleading. We are anxious to provide whatever extra information we can. We will only provide it if we can underwrite its validity.

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All informed observers, the latest and most important of which is the Cost of Living Advisory Committee itself, agreed that the general Index of Retail Prices is a reliable indication of the movement it seeks to measure. We are naturally anxious to emphasise and reaffirm that accuracy, remind the House and country that an objective Committee has examined its accuracy and underwritten it. We are equally anxious to make sure that any extension of the Index, any new indices based on the Index of Retail
1000
Prices should be similarly free from public criticism.
We should be able, as I can this afternoon, to reaffirm that whatever measurements of prices are given to the House and country, they can be underwritten by the Government as being totally accurate, totally meaningful analyses of the sort of movement they seek to measure.
Question put and agreed to.
Adjourned accordingly at thirteen minutes past Four o'clock.

AGRICULTURE, FISHERIES AND FOOD
  Seal Culls
  Seal Culls
  Horticultural Research (Expenditure)
  Horticultural Research (Expenditure)
EDUCATION AND SCIENCE
  Schools and Surrounding Communities (Shared Facilities)
  Schools and Surrounding Communities (Shared Facilities)
EMPLOYMENT AND PRODUCTIVITY
  Redundant Miners, Wales (Retraining)
  Redundant Miners, Wales (Retraining)
  Redundancy Payments
  Redundancy Payments
  Distributive and Food, Drink and Tobacco Industries (Training Boards)
  Distributive and Food, Drink and Tobacco Industries (Training Boards)
  Commonwealth Immigrants (Voucher Applications)
  Commonwealth Immigrants (Voucher Applications)
  MIDDLE EAST
  MIDDLE EAST
  WESTERN EUROPEAN UNION (FOREIGN MINISTER'S MEETING)
  WESTERN EUROPEAN UNION (FOREIGN MINISTER'S MEETING)
MINISTRY OF HEALTH
  Disabled Drivers (Car Badges)
  Disabled Drivers (Car Badges)
HOME DEPARTMENT
  Vagrancy Act, 1824
  Vagrancy Act, 1824
HOUSING
  Rent Act, 1965 (Complaints and Prosecutions)
  Rent Act, 1965 (Complaints and Prosecutions)
  Rents (Statistics)
  Rents (Statistics)
LOCAL GOVERNMENT
  Compulsory Purchase Order (Burwash, Sussex)
  Compulsory Purchase Order (Burwash, Sussex)
  Local Authorities' Land (Disposal)
  Local Authorities' Land (Disposal)
  PALACE OF WESTMINSTER (BUILDING)
  PALACE OF WESTMINSTER (BUILDING)
POST OFFICE
  Redirected Letters
  Redirected Letters
  INPUT-OUTPUT TABLES
  INPUT-OUTPUT TABLES
BOARD OF TRADE
  Light Electrical Goods, Hong Kong (Imports)
  Light Electrical Goods, Hong Kong (Imports)
SCOTLAND
  Arts and Cultural Activities (Expenditure)
  Arts and Cultural Activities (Expenditure)
  Industrial Development (Grants)
  Industrial Development (Grants)
  Roskill Commission
  Roskill Commission
TECHNOLOGY
  Electronics and Telecommunications Industry, Wales
  Electronics and Telecommunications Industry, Wales
TRANSPORT
  Disabled Drivers (Parking Facilities)
  Disabled Drivers (Parking Facilities)
  Littlehampton Swing-Bridge (Replacement)
  Littlehampton Swing-Bridge (Replacement)
ROADS
  Dracaena Avenue, Falmouth (Speed Limit)
  Dracaena Avenue, Falmouth (Speed Limit)
  A.12 Road (Saxmundham By-pass)
  A.12 Road (Saxmundham By-pass)
NATIONAL FINANCE
  Valuers
  Valuers
  Government Expenditure
  Government Expenditure
  Members of Parliament (Car Mileage Allowances)
  Members of Parliament (Car Mileage Allowances)
  Members of Parliament (Salaries)
  Members of Parliament (Salaries)
  P.A.Y.E. Income Tax System
  P.A.Y.E. Income Tax System

Preamble
The House met at eleven of the clock: The BARONESS WOOTTON OF ABINGER on the Woolsack.
Prayers—Read by the Lord Bishop of Southwark.

GIBRALTAR
11.6 a.m.
LORD MERRIVALE: 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, of the "five vital points" put forward by the elected members and the I.W.B.P. in Gibraltar (namely,

1. An unbreakable relationship between Gibraltar and Great Britain;

2. Gibraltar should cease to be a Colony and its new political status defined afresh;

3. Exemption from the provisions of the Commonwealth Immigrants Act, 1962;

4. The transfer of Gibraltar's affairs to the Home Office;

5. An affirmation that nothing should be clone by Britain, in respect of the option clause in the Treaty of Utrecht, without the consent of the people of Gibraltar expressed through a two-thirds majority in a referendum)

which have been accepted and which remain to be discussed during the constitutional talks due to start in Gibraltar on the 16th July.]
THE MINISTER OF STATE FOR COMMONWEALTH AFFAIRS (LORD SHEPHERD): My Lords, I am leaving for Gibraltar to-morrow for those discussions and I do not think it would be either helpful or courteous for me to go into details publicly on the eve of my departure.
LORD MERRIVALE: My Lords, I am delighted that the noble Lord is leav-
1214
ing to-morrow for Gibraltar. I can only hope that he does better there than he has done to-day in this Chamber. I think we are—
SEVERAL NOBLE LORDS: Withdraw!
LORD MERRIVALE: Is the noble Lord aware that—
SEVERAL NOBLE LORDS: Withdraw!
LORD MERRIVALE: My Lords, what is the matter with saying, "Is the noble Lord aware"? It is a question. Would the noble Lord not agree that it would have been courteous to your Lordships to have answered this Question, because these discussions have been going on for a number of months and either progress has been made or it has not been made? Would the noble Lord answer that point?
LORD SHEPHERD: My Lords, it is true that discussions have been going on, and discussions will continue. I do not think I have been discourteous to this House. As I am having discussions in Gibraltar shortly it would be wrong for me to say anything on this matter to-day.
Loup RHODES: My Lords, is the Minister aware that we rather resent the reflection made upon him? Of all the Ministers in this House there is no question about it, he is the most sincere.
LORD ABERDARE: My Lords, is the noble Lord, Lord Shepherd, aware that many of us on this side of the House agree, and find the noble Lord extremely courteous? We wish him the best of success in his discussions.
LORD SHEPHERD: My Lords, I am most grateful to the noble Lord, Lord Aberdare, and to my noble friend Lord Rhodes, but I think he may put in; in some difficulty in saying that I am more sincere than my colleagues.
LORD RHODES: My Lords, may I say that the noble Lord is equally sincere?
LORD IRONSIDE: My Lords, would not the noble Lord agree at least that the points mentioned in the Question are of extreme importance?
LORD SHEPHERD: Certainly, my Lords.
LORD MERRIVALE: My Lords, may I then ask two supplementary questions? First, will a communiqué be issued at the end of the talks in Gibraltar? Secondly, will the proposals which are agreed upon in Gibraltar be incorporated in an Act of Parliament, as it is the wish of the great majority of the people of Gibraltar that this should be done?
LORD SHEPHERD: My Lords, I certainly do not intend to be led by the noble Lord's second supplementary question. In regard to the question of a communiqué, surely that is a decision for the Conference.

BUSINESS
LORD BESWICK LORD BESWICK My Lords, may I say that it is proposed to adjourn for lunch to-day at around one o'clock, largely to meet the convenience of those who serve us.

SAINT MARY, HORNSEY BILL
11.14 a.m.
THE CHAIRMAN OF COMMITTEES (THE EARL OF LISTOWEL): My Lords, I beg to move that this Bill be now read a Second time.
Moved, That the Bill be now read 2ª.—(The Earl of Listowel.)
On Question, Bill read 2ª.
House adjourned during pleasure, and resumed by the Lord Chancellor.
LORD MOLSON LORD MOLSON moved, that it be an Instruction to the Committee to consider whether:—

(a) the powers proposed by the Bill are in excess of those required to implement the existing proposals for the development of the land described in the Schedule to the Bill; and

(b) the provision made in the Bill is adequate in relation to the existing burial ground and memorial garden on that land, or, alternatively, for the setting aside of parts of that land as open to access by the public equivalent in all respects to the land now so available; and

(c) the requirements of Clause 8 of the Bill with regard to the removal and reinterment of human remains are either necessary or desirable:

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That the Committee have power to hear evidence other than that tendered by the Promoters.
The noble Lords said: My Lords I am speaking for the Commons and Open Spaces Preservation Society, of which I am treasurer, and we have the general support in this matter of the National Playing Fields Association, the Metropolitan Gardens Association and the London Society. When we first saw this Bill it appeared to us that the intention was for the Church to acquire power to dispose of the whole of this burial ground and churchyard as a piece of dealing in real property. It is a useful open space about 2½ acres in extent, situated at the corner of Church Lane and High Street in the London Borough of Haringey. The need for provision regarding the maintenance of part of the site for a memorial garden and for access by the public is particularly important in a neighbourhood of this kind. It may well be said that the London Borough of Haringey as a whole has a certain amount of open space, but the new London boroughs are very large and it is of the utmost importance that in a somewhat congested area like Haringey there should be no unnecessary diminution in the amount of open spaces.
When we met the Church authorities we found that, so far from it being their intention to sell this open space for commercial purposes, they had a perfectly excellent scheme for redevelopment. The Victorian church there is in danger of collapsing as a result of subsidence. They propose therefore to demolish this dangerous old Victorian church, to build a new, modern church, close to the old medieval church tower, part of a long-since destroyed earlier church, which is now free-standing as a campanile, to have something in the nature of a small meeting place attached to the church, a garden of rest, and on most of the site where the present church stands, to build a church school. It is their intention to preserve the memorial garden and, if funds make it possible, they may build a small rectory in the corner.
When we came to know what the Church authorities had in mind we regarded it as a model piece of redevelopment. But we then asked why the Bill was drafted in its present very wide terms. The explanation was that the Bill

1217
was drafted before the Church had decided how to redevelop this site. Standard clauses were used which would cover almost any kind of purpose which was intended. It was in fact one of these great omnibus Bills giving very wide powers which are greatly in excess of what the Church authorities intend should be done. They also say—and I shall come to this point again at a later stage—that they want room for negotiation when they are dealing with the Education Committee of the London Borough of Hornsey, who will buy this land, build the school and then lease the school back as a church school to the Church authorities.
For 37 years now I have had experience of Governments and Promoters of Bills drafting their Bills so widely as to include almost all eventualities, and then when legislators say, "But really these powers go too wide", those responsible for the Bill, whether they are private individuals promoting a Private Bill or Governments of all three political Parties, say, "Well, we only want the power to do this and we give an assurance that in fact we will not use it". And the answer that Parliament gives on every occasion, or should give on every occasion and frequently gives, is, "Show what it is that you want to do, justify the powers you are asking for and we will give you those powers".
Less than 72 hours ago, while walking along a corridor upstairs, I had something in the nature of an informal offer of a compromise under which the part of the scheduled land which is going to be retained for Church purposes would be excluded from the Bill. It is quite impossible at this stage to attempt in 72 hours, when my advisers, and indeed the advisers of the Church authorities, are deeply engaged upon other Private Bills, to come to a final conclusion as to exactly what the meaning of this compromise may be. But the very fact that this compromise has, informally and without prejudice, been offered means that there is justification for the Instruction which I am now moving. This may be a satisfactory settlement, but it should certainly be looked at by a Committee of this House in order to understand exactly what is involved.
I come to the second point, that is, what effect the clauses of this Bill freeing
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the land from all restrictions will have upon the purchase price of the land. Any of your Lordships who have read Section 17 of the Land Compensation Act 1961 will realise that something in the nature of art education in metaphysics is necessary to understand that section of the Act. In simple layman's words it provides that in cases where a local authority proposes compulsorily to acquire land for a purpose which has no marketable value, then the price of that land shall be deemed to be the price that would have been paid if it had not been used for that purpose but for some other suitable purpose. I am not saying that there is anything wrong with that section of the Compensation Act. It may be just and it may be inevitable that the compensation or purchase price should be calculated in that way. But I am sure your Lordships will agree that there can be differences of opinion as to what the price in fact will be as a result of that method of valuation.
I must say that certainly my technical advisers are in disagreement with the view of the experts of the Ministry of Housing and Local Government upon this point, and I am strongly of the impression that the ecclesiastical authorities are advised in much the same way as I am and differently from the way in which the Government have been advised. This is a difficult matter, and I am sure that it is desirable that it should be looked into further in order to ascertain exactly what the facts are and what the valuation is likely to be. It is a matter of very great importance.
In the case of the churchyards of St. Mary, Aldermanbury, and St. Dunstan's in the East the compensation that was paid by the Corporation of the City of London was nearly three-quarters of a million pounds. Therefore, this matter of compensation, the basis on which it is made and the effect upon the valuation clauses of this Bill, is certainly a matter which I trust your Lordships will agree should be investigated further by a Committee of this House.
I have said that it is the intention of the Church authorities, which I entirely accept, to preserve the memorial garden which was provided at public expense, is maintained at public expense as a war memorial, and is of great value and

1219
amenity to the local inhabitants. If your Lordships will turn to Clause 4(3)(f) you will find that it reads:
"The provision (if necessary) of a replacement for the existing garden of remembrance, on the scheduled land."
It is clearly wrong that the Bill should be so drafted as to include the words "if necessary", and I hope and believe that that is one of the numerous Amendments to this Bill upon which we can have complete agreement between the Promoters of the Bill and ourselves. Again, it is a matter of redrafting the Bill in order to give effect to what I say again is the admirable scheme of redevelopment which the Church authorities have in mind.
I come to paragraph 3 of my Instruction, which deals with the exhumation and reinterment of bodies. I referred to this matter when we debated the Pastoral Measure, and I am glad now to have from the Home Office confirmation of the reasonableness and accuracy of some of the things that I then said. I have had two letters from the Home Office. The first one gave as the reason for these provisions public health. That reason has been dropped in the second letter; and rightly so, because in this case the burial ground has been closed since 1872. Therefore there can be no question of public health involved.
I have, however, had a useful and helpful letter from the noble Lord, Lord Stonham, giving the Home Office view about this matter, and I read what he wrote:
"The Home Office used to require the removal of all bodies from a disused burial ground, regardless of whether they are likely to be disturbed or not. This was often excessively expensive, as you pointed out with reference to St. James's, Hampstead Hill."
Speaking from memory, I think I gave the figure of £45,000 as the cost of reinterring the bodies.
"This expense was taken into account when we formulated our present practice of requiring removal only of those bodies which are likely to be disturbed in the course of redevelopment. This present requirement is not an administrative whim. It simply seeks to avoid the Common Law misdemeanour of disturbing interred human remains which may otherwise be circumvented only by a faculty from a Bishop or a licence from the Secretary of State under Section 25 of the Burial Act 1857. Our present view is that the provisions made in Private Acts since that of St. George's,
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Hanover Square 1964, and in the Pastoral Measure have struck the right balance."
It was not, I think, generally realised that there had been a substantial change in the requirements of the Home Office in this matter as a result of the Act dealing with St. George's, Hanover Square in 1964. That Bill was most carefully examined as a result of an Instruction not dissimilar from, though not identical with, that which I am moving to-day. It is obviously desirable that in a matter of this difficulty and complexity the position should be made clear. As I say, it was unknown to me that Bishops had power of dispensation in these cases, and certainly in most cases the power is exercised by the Home Secretary. It is therefore extremely important that we should know, that everyone concerned should know, what will be the way in which the Home Secretary will exercise his discretion in this matter. If this is to be done, it is vital that it should be done now.
Under the Pastoral Measure the power to close churchyards and to deal with all these matters passes for good and all from Parliament to the Church Assembly. I feel confident that the Church Assembly would not want to depart from what has been the accepted practice of Parliament, and I believe that there is a great likelihood that in this year a more liberal and a less restrictive attitude will be taken. A Burial Bill is now in course of being prepared in the Ministry of Housing and Local Government, and it is extremely desirable that the Government should have some indication of public opinion upon this matter.
I should like also to mention a curious anomaly in the London Burial Act 1884. If an existing place of worship is going to be extended there is no obligation to exhume and reinter any bodies which are under that extension. If, as in the case of this Bill, a new church is going to be built just nearby but cannot be described as an enlargement of the church because this church is being demolished and replaced, then this onerous obligation of disinterring and reinterring arises under the Act of 1884. I cannot believe that that is logical and I cannot believe that it is reasonable. If, as a result of the third part of my Instruction, the Church is spared what I regard as unnecessary expense and this redevelopment

1221
is made more advantageous to them, then I shall regard that as an additional benefit which I am glad that we should confer upon the Church.
My Lords, we have no desire to delay the passing of this Bill when once it has been amended. Provision has been made for this Church school in the programme of 1968/69 and it is of the utmost importance that this Bill shall be on the Statute Book in order that the Church may take advantage of the opportunity that it has of building this church. I have had the most friendly discussions on this matter with the Church authorities. I believe that many of the Amendments which I have said are necessary can be agreed between us, and I hope that your Lordships will accept this Instruction. I hope that a Committee will look at it and amend the Bill, and I hope that the Bill in its amended form will be even more satisfactory to the Church than the present one. I beg to move.
Moved, That it be an Instruction to the Committee to consider whether:—

(a) the powers proposed by the Bill are in excess of those required to implement the existing proposals for the development of the land described in the Schedule to the Bill; and

(b) the provision made in the Bill is adequate in relation to the existing burial ground and memorial garden on that land, or, alternatively, for the setting aside of parts of that land as open to access by the public equivalent in all respects to the land now so available; and

(c) the requirements of Clause 8 of the Bill with regard to the removal and reinterment of human remains are either necessary or desirable:

That the Committee have power to hear evidence other thin that tendered by the Promoters.—(Lord Molson.)
11.31 a.m.
THE LORD BISHOP OF LONDON: My Lords, speaking from the side of the diocese, we are very appreciative of the way in which the noble Lord, Lord Molson, has discussed these various points with our advisers from time to time, and I welcome especially his concluding remarks about the necessity for speed in order that opportunities may
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not be lost. May I, before dealing with his particular points, make a general point which I believe has application to the Bill which your Lordships will be considering shortly in respect of St. Saviour's Paddington? As Bishop of the diocese, I regard it as my primary purpose to see that the best possible provision is made for the pastoral care and life of the parish concerned. To that overriding pastoral requirement, in my own judgment, aesthetic and architectural points, however important, must be regarded as secondary.
The spiritual work of any parish is certainly not helped when the parochial authorities have the responsibility of maintaining a church which is over large for modern conditions and which may need very considerable sums to repair and restore it, and far too much time and energy goes into raising such vast sums of money for these purposes. Our ancestors, in their zeal for church building sometimes erected churches which were too large even for the needs of their own day—in fact they frequently found that they had made a mistake. There is a case in the City of London where a chapel of ease for St. Bartolph's Without, Aldgate, was built in 1860 to meet the needs of an overflowing congregation, and which was closed and demolished, I believe, within twenty years because the congregation WAS no longer over-flowing and, indeed, not present at all.
The Church of St. Mary, Hornsey, is perhaps one of these witnesses to the faith of our Victorian predecessors. There is, indeed, a local legend that it was built in a cathedral manner because there was a hope that there might be a separate diocese of North London, and Hornsey was staking out its claim to be the cathedral area. However that may be, in 1889 it was a dignified but excessively large building, the maintenance of which today, had there not been problems of restoration, would have been a very serious matter for the people of Hornsey now that the whole character of the neighbourhood has changed. But with the virtual collapse of the structure of the 1889 church, clearly something has to be done. At the moment the inside of the church is held up only by scaffolding round five or six piers, and I am told that a considerable sum of money has to

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be spent each month in paying for the scaffolding, and the parochial church council is naturally anxious to be spared that expense as soon as possible.
So far, the noble Lord, Lord Molson, and I are, I think, speaking with one voice, and I was glad to have his reassurance that in his opinion the scheme put forward by the Church authorities for the use of this site was (I think his phrase was) "an excellent one". It is one which has commended itself to the incumbent and to the parish, as well as to the diocesan authorities. We believe it is the right way forward, and I am glad to know that the noble Lord agrees with us. I hope, however, that I may be allowed to say that I trust that the reference to a Select Committee may not unduly delay some of these decisions. The noble Lord has referred to the necessity for speed, particularly with regard to that part of the scheme which involves the erection of a new school—because it is provisionally in a building programme—and we have some reason to fear what may happen to a school that is not ready to be in a building programme to which it has been allotted. Speed, therefore, is important to us for many reasons. We doubt also whether it is necessary to labour some of the points because we accept the substance of what the noble Lord has suggested as Amendments.
Under his first Instruction which, as he remarked, followed traditional form, the purpose basically was to gain powers to release the land from the consequences and disabilities arising from consecration. Instruction (a) was drawn in the form which was, when the Bill was prepared, the current form, and we have no intention whatsoever of resisting anything which would make it clear what we are intending to do.
On the noble Lord's second Instruction, (b), perhaps there are two points that should be made. We had believed that the planning procedures gave adequate safeguards for all that was needed to preserve the open character, and with regard to the garden of remembrance the Promoters have in mind an Amendment to delete those words to which the noble Lord, Lord Molson, took exception, and which would make it an obligation to provide a replacement for the existing garden of remembrance. The Church
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authorities are as anxious as the local people to preserve this open space of the Garden of Remembrance.
With regard to the noble Lord's third Instruction, (c), speaking more personally I have every sympathy with his words to simplify the procedures with regard to the reinterment of human remains. We know how expensive it has been for the Church in a number of previous cases, and we are very grateful indeed to the noble Lord for the interest which he has shown in this particular point. But again with speed in mind, and because there is no difference of opinion between us on this point, the Promoters have in mind that, if necessary, there should be Amendments both to meet the points raised by the Attorney General and also to make it clear, if it is not already clear, that the human remains to be removed would be limited to those involved in work connected with the excavations for the intended new church and the erection of any building other than the church. That is virtually what the noble Lord, Lord Molson, was saying should be the procedure. Again, as I say, that is an Amendment which the Promoters have in mind to suggest to your Lordships.
Since we believe that we are, in effect, of one mind with the noble Lord on the principles involved, we hope that the House will find the means to enable us to go forward with the maximum of speed and the minimum of cost.
11.42 a.m.
THE PARLIAMENTARY SECRETARY, MINISTRY OF HOUSING AND LOCAL GOVERNMENT (LORD KENNET): My Lords, I think that there is little for me to say on this Bill and on the proposed Instruction. Perhaps it would be helpful to the House if I were to clarify as authoritatively as I can what we understand to be the position about planning law in the case of Hornsey. The Bill before the House includes the usual saving clause for town and country planning, so that there is nothing in it which overrides that. No other development proposals are included in the Bill, other than the proposals for which the owners of the site already have planning permission from the London borough. The question of compensation was raised by the noble Lord, Lord Molson. I am afraid that I am not in a position to tell

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him how it was that the City Council ran into a compensation liability in respect of those two City graveyards. I am finding out, and I will let the noble Lord know.
To turn now to the case of Hornsey, the liability of a planning authority to pay compensation on refusal of planning permission to do anything depends on the use for which the land in question is zoned. The owners of this site, the Church authorities, want to use it for the church and school purposes about which the House has been hearing. They have applied for planning permission, and they have got it. And that, for the moment, is that. The question in the minds of certain noble Lords may be: might not the provisions in the Bill which free the site from all its ecclesiastical disabilities change the position for the future, so that many years hence the owners would be able to ask planning permission to build on the site something extremely profitable, and, if refused permission, to claim compensation from the borough council? The answer to this is, "No", because the land in question is zoned for planning purposes as open space and cemetery. So long as that zoning remains unchanged, it will not be open to anybody to claim compensation because permission to use it in some other way has been refused.
The only other point I will take up is the question of burials. I confirm that there is in preparation at the moment general consolidation legislation. This is an enormous subject, and I cannot say when it will be introduced. We hope that it will be fairly soon, but it is not very near the top of the queue for impending legislation. It may have been in Lord Molson's mind that discussions in the Select Committee to which your Lordships may refer this Bill would act as a sort of preliminary sounding board for informed opinion on the general question of what burial law ought to be. This is a matter for the Lord Chairman, and quite possibly he will refer to it. Your Lordships will no doubt pay attention to the question of whether or not it is right to have a discussion of principles for future general legislation arising out of the proposed Instruction to the Committee on one particular local Bill referring to one graveyard. I express no opinion on the matter, but merely lay it before your Lordships.
11.46 a.m.
THE EARL OF LISTOWEL: My Lords, I should like to say a few words about some of the procedural aspects of the Motion for an Instruction which is before the House. I would say first that if the Instruction is agreed to by your Lordships I will, acting under the provisions of Private Business Standing Order 92, report to the House that in my opinion this Bill, which is unopposed, should nevertheless be proceeded with as an opposed Bill and referred to a Select Committee. That was the request made by the noble Lord, Lord Molson, in his opening speech. My reason is that there can be little doubt that the three points raised by Lord Molson in his Instruction are more suitable for consideration by a Select Committee than by the Committee on Unopposed Bills.
In reply to the right reverend Prelate the Bishop of London, who emphasised the need to avoid any unnecessary delay, may I say that the Committee will be appointed as soon as possible; and I see no reason why it should not start its work very soon after we resume after the Recess. I have no doubt that members of the Committee will bear carefully in mind the wish of the right reverend Prelate that the matter should be dealt with expeditiously. I hope that, with the co-operation of your Lordships, the Bill may be passed into law before the end of the year. I would also expect that, as is usually the case when an Instruction to a Select Committee has been passed by the House, the Select Committee would make a Special Report on the Bill to the House and deal in particular with the matters which have been raised in the Instruction.
The House will note that it is also being asked in the noble Lord's Motion to agree that the Committee to which the Bill is referred should have power to hear evidence other than that tendered by the Promoters. I suggest that the House should agree to this part of the Motion, as otherwise the Select Committee may not be in a position to comply adequately with the terms of the Instruction it receives from the House. Your Lordships will appreciate that as there is no Petition against the Bill, the Committee would be limited to hearing witnesses called by the Promoters. They might, however, wish to hear evidence

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from someone who is not concerned with the promotion of the Bill, evidence which they regard as relevant to the Instruction given by the House to the Committee. I might remind your Lordships that the House gave similar authority to the Select Committee to which the Brighton Marina Bill was recently referred, and in that case that Committee heard two witnesses in addition to those of the Promoters.
Finally, I should like to make one more observation on the procedure to be followed in the Select Committee. In the proceedings on the Brighton Marina Bill certain of your Lordships proposed that in cases where a Bill, though unopposed, is referred to a Select Committee, the Committee should be able to instruct counsel to assist them in eliciting evidence from witnesses appearing before the Committee. As I said at that time, I regarded this as an interesting and certainly far-reaching proposal. I can see difficulties arising both from a point of view of expense and also to the extent to which the proposal is entirely novel. I think I am right in saying that nowhere else in Parliament at present do Committees instruct counsel to assist them. But I am prepared to undertake that the implications of this proposal will be carefully examined. It might well prove the sort of question that would be suitable for reference to the Procedure Committee.
Meanwhile, I would propose that in the present case the noble Lord, Lord Molson, or any other interested Peer, should avail himself of the provisions of Standing Order 58, which would mean that he would be able to attend the Committee and speak, but not to vote. As a member of the Committee a Peer concerned would be able to ask questions, through the Chair, both of the counsel or agents appearing for the Promoters and of any witnesses appearing before the Committee. If the House agrees to the Instruction, I suggest that the procedure I have outlined would be the most appropriate.
11.50 a.m.
LORD MOLSON: My Lords, I think I have a right of reply, but, if not, I ask your Lordships' permission to say one or two words. I should like to express
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my deep appreciation of the reasonable and co-operative way in which the right reverend Prelate has accepted my proposals. Also, I think that the procedure which the Lord Chairman of Committees has proposed would be extremely satisfactory. In accordance with the general spirit of friendly co-operation between the interests that I represent and the Church authorities, we should not propose to employ counsel. We think that this matter can perfectly well be worked out under Standing Order 58. It would be possible for me to sit with the Committee and, of course, the right reverend Prelate could also do so if he wished. We are most anxious to keep the expenditure upon this matter to a minimum, and I believe that entirely satisfactory results can be obtained by the procedure which the Lord Chairman of Committees has proposed. I hope, therefore, that this Instruction may go through with general acceptance and good will.
On Question, Motion agreed to.

SAINT SAVIOUR, PADDINGTON BILL
11.52 a.m.
THE EARL OF LISTOWEL: My Lords, I beg to move that this Bill be now read a second time.
Moved, That the Bill be now read 2ª.—(The Earl of Listowel.)
On Question, Bill read 2ª.
LORD FARINGDON LORD FARINGDON moved, that it be an Instruction to the Committee to which the Bill is referred to consider whether there should be provision for the preservation of the tower, having regard to its outstanding group value, and such part of the structure and features of the church as would preserve the present view of the building from the liturgical "West"; and that the Committee have power to hear evidence other than that tendered by the Promoters. The noble Lord said: My Lords, the Instruction which I rise to propose is similar in appearance to, but is basically very much smaller and less wide than, the one to which we have just listened, which was so very eloquently described by the noble Lord, Lord Molson. My Instruction is of a simpler nature. It raises no basic or fundamental principles, and I hope that

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your Lordships may be prepared to accept it.
I think I am right in saying that nearly all the Members of your Lordships' House have from time to time been caused anxiety by the way in which Bills of this kind have gone through your Lordships' House. That is because any protestant—though not necessarily anybody as emphatic as a Petitioner, because he always has his rights—who is unable to finance a Petition but who, none the less, has an objection, finds himself in a difficult position. To start with, such people are discouraged, not to put it more strongly, from raising points of this kind at Second Reading, and once the Bill has gone to the Unopposed Bills Committee it is again beyond the functioning of the Parliamentary system—at any rate, it is always very much discouraged in your Lordships' House—for people to raise points on the Report stage or Third Reading of a Bill of this type. When they raise points, they are told, as meets the case, that proper consideration has been given to the Bill in Committee and that, therefore, it should be accepted. That is not always by any means a satisfactory procedure.
I suggest that in Bills of this kind there are three criteria by which we might properly be influenced against a Bill. First, it may be that the church itself is of outstanding architectural and artistic importance; and the right reverend Prelate made some reference to that in which I do not wholly go along with him. But that does not arise in this case. Nor does there arise the case of graveyards which, though very small, are, owing to their situation in a thickly-populated area, of exceptional value as open space and should not, I submit, be built upon. The final criterion is the case where the church has a form and a siting which is exceptional and which is, indeed, essential to the whole appearance and amenity of an area. That is where my present anxieties arise, because St. Saviour's, Paddington, although not a church of great importance, is a church in an extremely important position.
The proposals of the ecclesiastical authorities make for the removal of the church, the building of another church and the destruction of the lay-out in the
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neighbourhood owing to the change of character of the church which, from presenting a big, handsome tower enclosing an important vista, will become a spindly little object off-centre, in a case where central siting seems to be essential.
I should like to say here how extremely helpful and co-operative I found the agents for the Promoters. They all but persuaded me—and, indeed, my experience is one of which I suggest the Chairman of the Unopposed Bills Committee might well take note—because after I had heard the case put by the Promoters I was three-quarters won over. It is only subsequently that I have discovered how wrong I should have been to be influenced by this persuasion—and not only persuasion, but perfectly rational explanation as well. Since then I have seen other experts who have put up, at any rate to my mind, a proposition which completely meets the case of the Promoters; that is to say, a development on which they are relying for the financing of the building and maintenance of a new church; and a parish hall and other conveniences will still be retained. The central tower, which is the main feature of the layout, would be preserved, and I am assured that its present poor condition could be repaired for the money which would be needed for the new proposed tower—a tower which to my mind, at any rate, offends against all the principles which ought to guide the construction of a tower on this particular site. It is off-axis; it is a small spindly affair—elegant enough, no doubt, in other circumstances, but quite unsuited to this large space and this rather magnificent layout.
I am suggesting that the Unopposed Bills Committee should call witnesses in order to assure your Lordships that what we want we cannot have; that it is not feasible to maintain the tower and to build a modern church. I have been persuaded that it is possible, and I want the Committee to hear that evidence. I believe that if they do, and if my informants are right, the Committee will find that it is possible to retain the tower and to build on to it an admirable little church as well as the other buildings wanted by the ecclesiastical authorities. For those reasons, I hope that your Lordships' House will be pleased to give this

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Instruction to the Unopposed Bills Committee, and that in this way we shall be able to decide whether in fact it is possible to maintain the amenity layout which I and many others, and in particular, of course, those who live in the neighbourhood, feel to be so important, so essential. My Lords, I beg to move.
Moved, That it be an Instruction to the Committee to which the Bill is referred to consider whether there should be provision for the preservation of the tower, having regard to its outstanding group value, and such part of the structure and features of the church as would preserve the present view of the building from the liturgical "West"; and that the Committee have power to hear evidence other than that tendered by the Promoters.—(Lord Faringdon.)
12.3 p.m.
VISCOUNT NORWICH: My Lords, I think I should begin by declaring my interest. I have been a resident of "Little Venice" for seven years, and I also have the honour to be president of the local residents' association, which feels very strongly about the proposal which we are discussing this morning. That proposal, as the noble Lord, Lord Faringdon, has explained, is to remove the present church and to replace it by a much smaller one, and to put behind the smaller one a block of flats which will bring some much-needed revenue to the church, as well as saving it from the very large outgoings on structural repairs that are at present necessary and from the need to maintain what has become, with a seating capacity of something like 1,700, very much of a white elephant.
I and those of my friends and colleagues who feel the way I do agree entirely that something must be done; that the church is a white elephant and cannot be allowed to remain as such. But we feel extremely strongly about the tower. This tower is situated at one of the most crucially important points, architecturally, in the whole Paddington area. Most of your Lordships probably know it by sight, but any who do not know it I should be delighted to take round and show what I mean. The tower is situated at the convergence of five important roads, one of which, Warwick Avenue, broadening out from the canal
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more and more as it approaches the church, ends up in front of the church as what I believe I am right in saying is the broadest thoroughfare in the whole of London. It is broader than The Mall; broader than Waterloo Place. It is a magnificent sight, and at this point some broad, major, strong, vertical feature is vitally needed to close the vista and become, as it were, a focus for the whole of the "Little Venice" area. The present church, St. Saviour's, is not, we know, a work of immense architectural splendour (nobody pretends that it is) but it does serve this particular purpose extremely well; or, rather, the tower and the West Front do, and it is those that we should like to see preserved.
The Promoters of the Bill agree with us—at least, I understand so; I shall be corrected if I am wrong—that, all things being equal, it would be very nice to do this. They have been very sympathetic (and we are very grateful to them for their sympathy) to our views, but they have suggested that there are two important objections—so important, indeed, that if either of them was valid, it would be insuperable. The first of these objections is the structure of the tower, which they believe to be in such a bad state of repair that to restore it as it must be restored, and to keep it in a good state of maintenance, would be prohibitively expensive. The second objection is that in keeping the tower they would lose so much of the vital space at their disposal that if they were also to produce a smaller church behind it there would not be enough room to build a large enough block of fiats to provide the income which they need.
If either of these objections was found, on closer examination, to be justified, our case would fall completely to the ground, almost as quickly as St. Saviour's would. There would be nothing we could do, and I think I am right in saying that we should all withdraw gracefully from the discussion. But it is our view, based on such technical examination as we have been able to carry out, that in fact neither of these objections is valid. We accept the fact that the church is structurally in a very bad state of repair, but we are also advised by our architects, who with the consent of the Promoters have been

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allowed to examine the tower, that the tower is in fact in very much better condition than the rest of the church. It is in relatively good condition—only relatively, but still in relatively good condition—and could be repaired at far less cost than would be necessary to build any other vertical feature such as the Promoters themselves agree would be necessary.
The case against the second objection follows logically on from this. We believe that if the existing tower could be preserved, not only would it be considerably cheaper to the Promoters than building another one, but it would also enable them to build a block of flats behind and the new church, more or less on the lines which they have proposed, and would still enable them, by following certain proposals which we should be able to put forward, to make just as much money, possibly even more. In other words, they would in no way be financially the losers.
My Lords, this is not just a "crack-brained" idea by a lot of over-sensitive, agnostic aesthetes, saying, without having any of our collective feet on the ground, how lovely it would be if this beautiful thing could be maintained. This view is agreed to by three independent firms of architects, each of whom has special knowledge of various aspects of the problems involved. One of them is an architect with a life-time's experience of church building behind him; another has been involved with town planning, and in particular the Civic Trust since its inception; and the third is the architect to the Historic Buildings Sub-Committee of the Greater London Council. All of them agree that we are probably—and I say only probably—right. If I may quote the Historic Buildings Council's statement on this proposal, it says:
"In the short time which has been available, sketch plans have been prepared which show prima facie that the fears of the Promoters could well be unfounded, and that whilst retaining the tower a new church of adequate size to meet the present parochial needs could be built without restricting in any way the part of the site now intended by the Promoters for beneficial development".
LORD KENNET: My Lords, the noble Viscount said that that was a quotation from the Historic Buildings Council. Would he just confirm whether that is right or not?
VISCOUNT NORWICH: My Lords, I am sorry. I correct myself. This is a statement made by the Greater London Council, on the advice, I understand, of the Historic Buildings Sub-Committee. I apologise for that inaccuracy.
My Lords, as I say, this is only provisional. We do not yet know for certain, we cannot know for certain, until a great deal mare carefully detailed plans and costings can be made. It looks on the present evidence as if it would be possible, and we should like to have the opportunity to prove that it would be. Our confidence that we can do this is increased by the fact that we have been allowed by the Promoters (and once again we are grateful to them for this) to examine their plans and costings. From these it appears that the scheme, although architecturally it will leave a great deal to be desired, will nevertheless mean that the average rent of each of the individual 45 flats which it is proposed to build will still be somewhere in the region of £1,200 a year, in order to cover the costs. I fully expect that I shall he told that this figure is inaccurate, but I think we can substantiate it.
My Lords, it is only natural in this situation, when we come into the, discussion at such a late stage, that the Promoters should wish to go ahead with the plans as they have drawn them up, and it is only natural that their architect should wish to be allowed to produce a proper plan based on beginning again on a completely clean sheet. Naturally, it cramps their style if they have to make allowance for part of an existing structure which will be of a totally different style and period from that which they have planned. We have every sympathy with this feeling. Also the site is of such importance in itself that it presents a marvellous challenge to any architect; and any architect would long to make the best use of this challenge. But it is because it is such an important site that we cannot afford to take chances if we do not think that they are justified.
If all the drawings had been completed and paid for, if there were nothing to stop the work from going ahead, we should find it difficult to ask the Promoters to stop now. But, fortunately, this is not so. We have a breathing

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space; because at present no-one—neither the Promoters nor ourselves, nor the Greater London Council—knows exactly what will be the extent of the site upon which this building can be erected. There are problems involving traffic control, which I understand are at present under consideration by the Westminster City Council; and until those problems have been solved it will be impossible for any of us, the Promoters, ourselves or for anyone else, to draw up the final detailed plans. We have a breathing space; we have an opportunity to think again. This is an opportunity that t hope very much we shall be allowed to seize.
Finally, I should like to echo the words of the noble Lord, Lord Faringdon, and say how grateful we are to the Promoters of this scheme for their sympathy to us, for the way in which they have allowed us to examine the structure, to see their plans, and to discuss their costings. They have gone out of their way to help us and I am very conscious that we have been an enormous irritant to them. For that I am sorry. But I hope that now, after the Bill has had a Second Reading, as I hope it will, and after Lord Faringdon's Instruction has been accepted, as I trust it will be, we shall be able to pay them back in some way by being able to work with them not only in such a way as to be able to see that they are not financially the losers, but also so that we shall be able to maintain the tower and the amenities, the beauties and the character of which must still make this one of the loveliest and most character-full parts of London.
12.14 p.m.
LORD KINROSS: My Lords, in rising to address your Lordships for the first time, I ask for your customary indulgence; but I hasten to give the assurance that my intervention will be reasonably brief. My reasons for speaking on this Motion are two-fold. I speak first—declaring an interest, as the noble Viscount has done—as an inhabitant for the past thirty years of this neighbourhood of the Regent's Canal which is now generally known as "Little Venice", a name deriving, I believe, from a chance remark by Lord Byron while on a country walk in those parts. I speak, secondly, as one who values very deeply what remains
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of London's heritage, not only in good architecture but in good civic planning.
For many years past, my fellow residents and others have been fighting battles for the preservation and improvement of this unique corner of London. The first major engagement I recall was in 1950. In that year, the former Paddington Borough Council came out with a plan to build a large block of council flats right at the very centre of Little Venice, down by the banks of what is known as Browning's Pool. This would have effectively blocked, once and for all, its development as an open space and a centre of rest and recreation for the people of London. Fortunately, however, the L.C.C., and finally the Minister of Town and Country Planning of that period, decided against the scheme. The result is the tranquil public gardens which the neighbourhood enjoys to-day.
Since then, we have had to contend at intervals with a series of further threats. There was a hideous project to cover up a long stretch of the Canal with blocks of flats built over it. There was another project, equally hideous, to drain away its waters and convert it into a highway for hovercraft. Only a few months ago we were threatened with a scheme for a Marina with a concourse of buildings encroaching on the Pool itself. These first two schemes, I am glad to say, were successively dropped; and it now looks as though the third may be dropped as well, or at least very drastically modified.
All this has happened in response, partly to local and general pressure, partly to the wiser second thoughts of those concerned in the various schemes. But it is due largely, I think, to a growing awareness on the part of the local authorities and the other public bodies of the immense amenity value of this neighbourhood, so unique in the harmony of its compounding elements of water and trees and good architecture right in the centre of London.
There are signs of this awarenesss on every hand and in every direction. To-day, the Ministry of Transport, the Greater London Council and the British Waterways Board are envisaging this Paddington Pool and its surroundings as a focal point in plans for the development of the canals as a whole for public recreation.Lately, views of the Regent's

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Canal have been opened up by the substitution of railings for walls and the opening of stretches of towpath to visitors. Above all, I am happy to say that the Westminster City Council has declared this to be a conservation area within the framework of a system laid down by the Civic Trust. Finally, the Church Commissioners, the ground landlords of most of this area, have shown throughout a keen sense of its architectural and aesthetic amenities. This is evident in their development and restoration and improvement of the properties in the avenues and streets which they own.
But now, my Lords, there comes—ironically enough from another arm of the Church, the London Diocesan Fund—a new threat to this area, in its own way as serious as any that has gone before. This time it is an architectural threat, compromising the entire civic plan of the neighbourhood. I refer to the threat to demolish the tower of St. Saviour's Church. As the Pool and the public gardens form the hub of Little Venice, in terms of recreation and amenity, so does, this tower form its pivot in terms of town planning and architecture.
Built in the Gothic style, the tower of St. Saviour is the commanding architectural feature of a radial layout of streets built in a contrasting classical style. It commands, in particular, the great, broad sweep of Warwick Avenue itself, which, as the noble Viscount has remarked, is one of the broadest streets in London. It is certainly broader than The Mall fringed by Carlton House Terrace (because I have paced both of them in order to check the fact) and it just about the same breadth as the foot of Waterloo Place which culminates in the commanding feature of the Duke of York's column.
St. Saviour's Church was designed rather more than a century ago as the axial point of a townscape planned and built on Church property—a kind of Victorian offshoot of the Regency plans of Nash. Remove the pivot of its tower and the whole neighbourhood falls to pieces as a coherent and unified design. Yet the Promoters of this Bill now seek the permission of this House to remove it. No one seriously contests that the church itself, behind the tower, or at least a great part of it, will have to go on account of its precarious structural
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condition, but the tower, although in need of perennial repairs to its stonework, is in no such precarious condition as the Promoters at first seemed to fear. An independent architectural survey has recently shown, as the noble Viscount has indicated, that it is structurally sound.
There are those who argue that this tower could be better replace by a vertical feature of similar height and scale. In theory, so it probably could; in practice, I think this unlikely. An architect of the London diocese has produced a preliminary plan, to which the noble Lord, Lord Faringdon, referred, with this in view. Unfortunately it shows all too little awareness of what this neighbourhood really requires. It incorporates, as he told us, an insubstantial, tapering spire, like a spindle, and this is placed not in the centre of the access but at the side of it, while a blank wall of the church occupies the central position. It thus totally defeats the object of any such vertical feature, which must not only be centralised but must be substantial enough to hold its own and assert its focal position on the skyline in relation to the height and scale of the streets which radiate before and around it.
It is, I repeat, perfectly possible that an adequate modern tower on this scale could still be designed, but the cost, I suggest, would be prohibitive to any development scheme in which the question of cost must be uppermost, as it is in this case. For these reasons, I strongly urge the retention of the present tower of St. Saviour's Church as an integral element in any such development scheme, and the construction of a smaller church attached to and behind it. That this can be done is evident from the various independent plans with which we have been furnished aid to which the noble Viscount has referred.
One of these architects, who is highly experienced in church work, has drawn up a plan for the retention of part of the old church behind the tower instead of the construction of a new one. All these more modest plans than the plan produced by the Promoters make full allowance for the space required for the erection of a large block of flats on the site. There is every indication that when

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worked out in detail they will prove less costly than the plan which the Promoters of the Bill have in mind. We are thus asking the Committee to hear evidence concerning them and provide for the tower's retention. That is surely not too much to ask of the London Diocesan Fund.
It so happens, as the noble Viscount has indicated, that the exact extent of the site available is still in doubt for various reasons, and this means that the Promoters will be obliged in any case to draw up new plans for the development of the site. In so doing they should, in my submision, allow for the contingency of preserving the church tower and developing the site in this sense. The Church authorities, my Lords, have always shown themselves responsible to civic interests, especially where the Arts are concerned. In London, in particular, they have shown themselves not only enlightened but adept in the restoration of old churches and the incorporation of parts of old churches into new, always, of course, without prejudice to their overriding pastoral duties.
In this case they have an added interest and responsibility of their own since they are the owners of most of the neighbouring property and, as such, have some responsibility for the original civic layout of the area during the first half of the 19th century. I therefore devoutly hope that they will think again in this case of St. Saviour's, as other Promoters of schemes for Little Venice have thought again before them in the course of the long, slow fight which has been waged over the years for its preservation and embellishment. Speaking, my Lords, as a tenant of 30 years' standing, I can vouch for the fact that the Church are good landlords. I like to hope that in the case of St. Saviour's they will prove also to be good neighbours.
12.26 p.m.
LORD KENNET: My Lords, I must first congratulate my old acquaintance and fellow journalist, Lord Kinross—and how pleasant it is to do so—on his maiden speech. I hope that his sphere of interest will radiate gradually, like ripples from a pebble in Little Venice, to larger metropolitan, national and international spheres, and that he will
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often speak to us again. There is little that I should say from the point of view of the Government about this Bill, either. It is a preservation question—at least it is a conflict between preservation and pastoral interests. The Church of St. Saviour, Paddington, is not a listed building but it is to be included in the revised list for the City of Westminster; that is, it is to be included in the next revision as a building of special architectural interest, mainly, of course, because of its setting rather than because of its intrinsic merit. It is to be put on this list because of its prominent position, harmonising with its surroundings, and the fact that its tower provides a focal point in an area which is of itself of special interest.
LORD BEAUMONT OF WHITLEY: My Lords, would the noble Lord tell us whether the surroundings are also to be put on this list?
LORD KENNET: My Lords, I speak subject to correction, but I should think that most of them are already on it. This is a preservation area designated in draft by the City of Westminster. It may be of interest to the House to be reminded that the Minister of Housing and Local Government is advised by a committee of the Historic Buildings Council on these matters of listing and on the attitude he should adopt to particular cases of a preservation nature; and also to be informed that this Committee, which sits under the chairmanship of the noble Lord, Lord Holford, was consulted about the proposals in the Bill before the House. Their advice was that if it was at all possible, the church tower should be retained. The Minister accordingly reported to Parliament on this Bill to the effect that he would have wished the tower to be retained, but after discussion with the Promoters he understood that they could not do it on grounds of costs.
Provided the Committee—that is, the Committee of your Lordships' House—was satisfied on this point, the Minister would not wish to object to the demolition of the tower (indeed he has no power to do so, since planning controls do not extend to churches, to places of worship in actual use as such, which this church is) this having for fifty years now been the desire of the Church of England authorities.

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My Lords, if I may, I will for a moment cease speaking for the Government and speak personally. If the Bill is left to the Committee, they will have to face the familiar conflict between preserving the building or its complete demolition. Every Londoner knows Warwick Avenue, and so do many other people. It is a famous and beautiful and well-planned area, and this church tower is the focal point of the whole layout. Nobody should say that the 20th century is less good than the mid-19th century, and the very reasonable solution which has commended itself to many people, and might also to the Committee, is that the whole church should be pulled down and another of a similar bulk and height built on the same place in the 20th century idiom, which I think would go as well with the classic buildings around it as the present Gothic structure. But that is going to be expensive, perhaps more expensive than the London Diocesan Fund can at present afford. That is one of the questions which will have to be examined in Committee.
12.31 p.m.
LORD BEAUMONT OF WHITLEY: My Lords, I should like to join in congratulating the noble Lord, Lord Kinross, on his maiden speech. Your Lordships have had to wait 29 years for it, and I sincerely hope that you will have to wait far less time for the next speech of the noble Lord.
This Bill deals with the proposed demolition of the existing church and tower of St. Saviour, Paddington. This church is very large and can seat 1,700 people, although at the moment the congregation is not usually in excess of 100. The most striking feature of the church is the tower. The church and tower are not of great aesthetic significance, it is generally agreed, except in so far as they fit in with the fine piece of town planning to which they contribute. So far as the parish is concerned, the church presents a very real problem in terms of upkeep and repair. The repairs which should be applied without delay would come to some £15,000, and the cost of keeping up repair and maintaining the heating and cleaning of this large white elephant would be progressively greater as time went on. Such expense by the parochial church council would
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not be justified on the ground of its pastoral usefulness to the neighbourhood.
The parochial church council urgently require a smaller church, the upkeep of which they could support. They have therefore devised a plan whereby the church would be demolished and a smaller church built, the cost of these two projects being paid for by the development of flats on the same site. Noble Lords who have spoken today have paid tribute to the parochial church council for having been sensitive to the feelings and wishes of local residents on this matter. During the whole time this project has been under discussion they have been open to suggestions from anyone who could produce a solution which would preserve the tower and at the same time enable them to pay for its upkeep, for building a new church and for demolishing the rest of the old. For reasons of population density and for aesthetic reasons, this solution has been impossible to find. Indeed, the pro-motors are still convinced that it is impossible to find such a solution. Any plan which could show how the cost could be met would be diligently studied by the council, who have been looking for one for years. Unfortunately, until yesterday nobody had come forward with a plan, and certainly at no stage has anyone come forward with the offer of a grant which would allow this to be done.
I cannot accept some of the remarks which have been made today about the expense of keeping the tower. Of course, we cannot argue in detail, and I may be entirely wrong, but I believe that it can be preserved without a considerable expenditure. The question of the demolition of the tower was referred to the Minister of Housing and Local Government, who reported to parliament. That report has already been quoted. I agree that if the tower could be maintained it would be a good thing. The Historic Buildings Sub-Committee of the Greater London Council was brought into this in October and the present scheme which has been put forward by them arrived only yesterday. In the meantime, a dangerous structure order was served on the tower and repairs were done at a cost of £600; and I think that more in the same way might have to be done in the near future. The slower

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we go on, the more the cost and the less likely will be the finding of a reasonable solution.
I am a little at a loss at the reply of the noble Lord, Lord Kennet, to my intervention, because I understood that when this matter came up in another place a representative of the Minister said that there were no plans for preserving the surrounding area, and it is to fit in with this area that we wish to keep the tower.
LORD KENNET: My Lords, perhaps I could clarify the situation. If no plans for keeping the surrounding classical buildings have been made and they are not on the statutory list, that is doubtless because it is only now that the Victorian buildings throughout London are being surveyed for the first time. That does not mean that this will not be altered in a year or two's time when the survey has been completed. One noble Lord has told us that this part of London is among those under consideration by the Westminster City Council for designation as a conservation area.
LORD BEAUMONT OF WHITLEY: My Lords, I am delighted to hear that, because it would be ironic if we managed to save the tower and the surrounding area fell. Plans have been drawn up for a small church with a verticle feature rising to the same height as the present tower. This has come in for a certain amount of criticism in your Lordships' House and elsewhere. I do not think that this criticism is all well founded, but I should like to emphasise that any proposed church would be subject to the normal planning formalities and that the present church is not going to be demolished until approval has been given for the new one.
As regards the alternative plan which has only just been mooted, the Promoters' experts have loked at it and think that it is open to a number of objections. They do not think it would be as financially viable as the people who prepared it think. It has an unacceptable density of flat development in the area, and they think it is open to aesthetic objection from every point of view except from the view looking down Warwick Avenue. But the parochial church council is willing to look at this.
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The Promoters have no objection to the present Instruction which has been moved in your Lordships' House; nor have I. If any solution to this problem can be found, everyone is willing to consider it, but the fact remains that up to yesterday no method had been found of showing how the tower can be preserved. The church is left with the alternative of proceeding with the plan put forward in this Bill, or of letting the church fall down. I am delighted that the alternative is to be looked at again in Committee. I hope that it will be an Unopposed Committee, because this does not seem to me to be a very complex matter. I understand that in an unopposed Committee noble Lords can go in and speak on the matter.
I have one last point (I do not know whether it comes into the area of the noble Lord, Lord Kennet), which is that if we find some way of keeping the tower, perhaps some way could be found of making London Transport put the extremely ugly flue, which spoils the whole view at the moment, inside the tower. That is one possible way of dealing with what I think is an eyesore in a fine piece of town planning, and I hope that this may be done.
12.41 p.m.
THE EARL OF IDDESLEIGH: My Lords, I join in the congratulations offered to the noble Lord, Lord Kinross, on his maiden speech. It was not an uncontroversial speech but it was an exceedingly well-argued speech, and one could disagree with a great deal of what the noble Lord said. But I have never accepted the convention that every maiden speech must be non-controversial. My own maiden speech, made a great many years ago now, was exceedingly controversial, and I have never regretted it. I am not sure whether a noble Lord who delivers a controversial maiden speech is really entitled to ask for indulgence, but I am sure that the noble Lord neither needs nor desires any indulgence at all.
But it is not my purpose to controvert what has been said on either side in this controversy. The day before yesterday, I paid my second visit to Warwick Avenue. I stood on the bridge over Regent's Park Canal, and I thought that if I were an inhabitant of Little Venice,

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if I were a little Venetian (if that is the right term to be used; or should we follow Disraeli, and speak of "the Venetian oligarchy"?) I should very much object to the destruction of this beautiful tower. On the other hand, the aesthetic arguments are not all on the side of the preservationists. To my mind, it is always most unfortunate when there is a lack of proportion between a church and a tower which is attached to it. I take it that the right proportion between church and tower is about one-to-two. It looks well if that proportion is observed; it looks ill if the tower is either too short or too tall.
When the Diocese of London rebuilds this church they will certainly build a much lower church than that which at present exists. And how right they will be! How often I have sat and shivered in a great Victorian Gothic church, with the pointed arches soaring up to Heaven, and all the heat soaring up to Heaven with the arches and passing out of the clerestory windows: and I have wondered why the contributions which I make to the heating fund go so largely to heating the Angels in Heaven and not myself. I hope, therefore—and I think we may take it for granted—that the new Anglican church will be much lower than the present church, as well as smaller; and in that event we must face a grievous lack of proportion if the tower is preserved. This wail not affect the inhabitants of Little Venice, who will not see the church—or will barely see it, unless they go to the extreme length of attending it. But it will affect the inhabitants of Warwick Gardens, who live very close to the church. They will be offended by this lack of proportion every time they look out of their windows to the North.
I do not want to argue the case. I merely ask your Lordships to believe that on esthetic grounds there are two cases, one to be weighed against the other. No doubt, as things are, both will be considered, along with the financial questions, on which there is so much uncertainty, by the Select Committee of your Lordships' House. But I venture to refer to a very powerful and well-argued speech delivered by the right reverend Prelate the Bishop of Southwark on a previous occasion when we discussed one of these ecclesiastical Bills. I am very doubtful
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of the arrangement under which any proposals to alter the boundaries of an Anglican parish, any proposals to deal with an Anglican collar consecrated church, must come before Parliament, though the Church authorities can do as they like if the church is not consecrated but merely dedicated. But all these proposals have to come before both Houses. That is the law, and we must submit to it. But I hope very much that the law may be phased, and that the Anglican Order may be saved the great expense of promoting a Private Bill every time they wish, in the exercise of their pastoral responsibilities, to make some changes to their own buildings.
I suppose I shall be told that this is a part of the Establishment, and that it is wholly wrong for me, who am not an Anglican, to interfere with the matter of the Establishment. I can only reply that there are in this United Kingdom two Established Churches. The Established Church of Scotland, I presume, occasionally may want to change their parishes, pull down their churches, and make all the arrangements which changing conditions necessitate. But they do not have to come to Parliament; they do not have to promote Parliamentary Bills when they wish to effect some changes. I belong to a Church which is not Established, and I am not bound by these stringent laws which require the Anglican Church to obtain Parliamentary approval for its ordinary day-to-day administrative actions.
I beg that this matter may be taken into consideration. Your Lordships' House is heavily occupied at the present time. We have devoted enough to the consideration of these matters. Your Lordships' Committees are hard worked. There is not much more time for them to go really fully into this difficult question. I hope that some change in the arrangement may be considered early next Session, and that more appropriate machinery may be set up.
12.50 p.m.
THE EARL OF LISTOWEL: My Lord, I should like to join other noble Lords in the congratulations they have offered to the noble Lord, Lord Kinross, on his maiden speech. I am not surprised that he, as an old Balliol man, like myself, is appearing in your Lordships' House as a champion of aesthetic

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values. I hope we shall hear him again on a subject which is obviously close to his heart and one that always has a sympathetic audience in your Lordships' House.
I will, if I may, again say a few words on the procedural aspects of this Motion for an Instruction on the Bill. If the Instruction is agreed to, I will undertake to study with the utmost care what has been said by noble Lords on both sides of the House in the course of this afternoon, and in the light of that study I will decide whether or not I should report to the House that the Bill, though unopposed, should be dealt with as an opposed Bill and referred to a Select Committee, or, alternatively, should be dealt with by the Unopposed Bills Committee. I should like to assure your Lordships that in either case, to whichever of these Committees the Bill is referred, any noble Lord can avail himself of the procedure under Standing Order 58 which would enable him to attend the Committee and to speak. This procedure may be particularly useful in a case of this kind, in which many noble Lords, by the speeches they have made this afternoon, have shown a very keen interest. I entirely agree with Lord Beaumont of Whitley's interpretation of procedure about the Unopposed Bills Committee. The Motion also asks for power for the Committee to hear evidence other than that tendered by the Promoters, and again, for the same reasons as I gave on the last Instruction, which I will not repeat, I would advise your Lordships to accept this proposal.
On Question, Motion agreed to.
Bill committed to the Committee on Unopposed Bills.

HIGHLANDS AND ISLANDS DEVELOPMENT (SCOTLAND) BILL
12.52 p.m.
LORD MITCHISON: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Mitchison.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD MERTHYR in the Chair.]
Clause 1 [Power of Board to acquire shares in certain companies]:
LORD MITCHISON LORD MITCHISON moved, in subsection (1), after "power", to insert:
"(a) to form or promote, or join with any other person in forming or promoting a company;".
The noble Lord said: I beg to move Amendment No. 1. I believe that a general word or two might save the time of the Committee. This Bill received its Second Reading on June 27, and I made it quite clear at the time that what I was then speaking to was the Bill as it would be if these Amendments were accepted. They have therefore, in that limited sense, been before the House already. During that debate the noble Earl, Lord Dundee, said some words with which I entirely agree. He did not think that there ought to be any difficulty in agreeing to the Bill. Indeed, I think it would have been agreed to three years ago if it had not been for those drafting errors which I have mentioned. This is an attempt to correct—I would hardly call them drafting errors, but drafting ambiguities, and to make a slight enlargement of the powers in Sections 6 and 8 of the 1965 Act, which constitutes the Development Board. Section 6 deals with carrying on a business or undertaking; and the other one, Section 8, deals with grants and loans.
There is one other fact I should refer to, and that is that the procedure in another place had a rather unfortunate result in connection with this Bill. A Long Title was spoken to under the Ten-Minute Rule, and once leave has been given under that Rule it becomes impossible to alter the Long Title there. Accordingly, what proved to be too narrow a Long Title resulted in some respects in too narrow a Bill, and that error, which I think everybody perfectly well understood and which could not be met in another place is proposed to be met by these Amendments.
The Amendment I am moving is of the first character; that is to say, it arises out of the powers under the 1965 Bill being not wholly fair and not wholly sufficient. The object of it is to enable the Board not only to form or promote a company, which power they may or may not have had under the existing language of the 1965 Bill, but also to

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join with any other person in forming or promoting a company. I happened to mention on Second Reading one particular case of a small enterprise—and this is rather a small enterprise Bill—and it may well be that there will be cases where the Board would wish to have this power. I want to add this, if I may. Everything proposed to be done under this Bill is going to be a matter of agreement between the personal company concerned and the Board, and everything to be done under this Bill has to have the consent not only of the Treasury but of the Scottish Office. Therefore I do not think we shall be oppressing anybody. I beg to move.
Amendment moved—
Page 1, line 6, at end insert the said paragraph.—(Lord Mitchison.)
THE EARL OF KINNOULL: I should not wish to be destructive at all, but may I raise a doubt which is in my mind on a procedural point on the Amendment which the noble Lord has asked the Committee to consider. It is a question whether in fact this Amendment comes within the scope and relevance of the Bill. As I understand it, what the noble Lord is trying in this Amendment to do to the Bill is to extend the Highlands and Islands Development Board's powers, not only to acquiring an interest or equity share in an existing company trading in the Highlands and Islands but also to forming and promoting an entirely new company on their own. That may be very desirable, but as a procedural point I would ask the Committee whether it comes within the present Title of the Bill. In fact, I think the noble Lord, Lord Mitchison, will agree that it does not come within the present Title of the Bill.
Also, the noble Lord mentioned earlier that this matter arose because of the Ten-Minute Rule in another place. I am not sure that we should necessarily accept that. The noble Lord, I know, is a master of procedural points, and he knows as well as we do that the decision on a procedural point is entirely left to the Committee of this House. There are, of course, certain guide-lines, and these were spelt out during the Committee stage of the Administration of Justice Bill last February. At that time we were told that there were two guide-
1250
lines if we wanted to consider a point of procedure. In the first place, there was the Minute of January, 1931, by Counsel to the Chairman of Committees. There it is said:
"There is no Standing Order regulating the admissibility of Amendments in the House of Lords. The House is master of its own procedure and, unlike the House of Commons, is not subject to rulings on points of Order. The test usually applied in practice to the admissibility of an Amendment is whether or not it is relevant to the subject matter of the Bill. But the decision upon this House and the action taken upon that decision can only be made by the House itself"—
in other words, can only be made by the Committee.
Then we look to Erskine May, page 500 of the 17th Edition. There it is stated:
"The Amendments must be relevant to the subject matter of the Bill and of the clause to which they are proposed, and they must not be inconsistent with a previous decision of the Committee on the same question. The admissibility of an Amendment, however, can only be decided by the House, there being no authority which can in advance rule an Amendment out of Order. The Officers of the House would draw attention to the Amendment which appears to contravene the accepted principles of admissibility and the matter will be discussed in the Committee".
As I have mentioned, there was a precedent for this in the proceedings on the Administration of Justice Bill when, on February 6 this year, the noble Lord, Lord Goodman, withdrew an Amendment on these very grounds.
There is one other Amendment on which I think a procedural point may occur, and that is Amendment No. 12. Here (although this is perhaps not quite so strong as Amendment No. 1) I would suggest to the Committee that there is a suggestion that the Board could take an interest in a company based not in Scotland but in London, Burmuda or anywhere else, so long as that company's business contributed in some way to the Highlands and Islands. I would ask the noble Lord and the Committee to consider these points.
LORD MITCHISON: This Bill had its Second Reading, and nothing was said about this matter, although I explained quite clearly what the Amendments were going to be. I can only say to the noble Earl that I should have thought both sides of the House were interested in seeing that the Highlands and Islands Development Board, of which his own

1251
Front-Bench Member spoke so highly on Second Reading, as did everyone else, should be allowed to have these powers. I do not think I am doing anything out of order. We propose to amend the Bill later, but if the noble Earl thinks we ought to block the Highlands and Islands Development Board in getting this minor clarification of their powers because we are bound by some rule to do so, I simply invite him to divide the Committee.
THE EARL OF KINNOULL: I have no intention of dividing the Committee. I was simply drawing the attention of the Committee to the fact that there was a procedural point. We are not at all against this Bill; indeed, I entirely support what my noble friend Lord Dundee said about it on Second Reading.
LORD MITCHISON: I am glad to hear that. May we now take it that this is not pressed, and that accordingly we can proceed to this Amendment on its merits?
On Question, Amendment agreed to.
LORD MITCHISON: This Amendment is consequential on the first. I beg to move.
Amendment moved—
Page 1, line 15, leave out ("and (b)") and insert (",(b) and (c)")—(Lord Mitchison.)
On Question, Amendment agreed to.
LORD MITCHISON LORD MITCHISON This Amendment also is consequential upon Amendment No. 1. I beg to move.
Amendment moved—
Page 1, line 17, after ("which") insert ("is formed to carry on or").—(Lord Mitchison.)
On Question, Amendment agreed to.
LORD MITCHISON LORD MITCHISON moved, in subsection (2), to leave out "in the Highlands and Islands." The noble Lord said: This is the second type of Amendment to which I have referred. The 1965 Act, which we are seeking to amend, did not itself provide that the business to be helped under either of these two clauses must necessarily be in the Highlands and Islands. It had to be a business for the benefit of the Highlands and Islands, and because the Long Title of the Bill in the other place included the words "in the Highlands and Islands" they had to be put in here. It was solely for that pro-
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cedural reason; so far as I know, no-one else wants them in. I beg to move.
Amendment moved—
Page 1, line 18, leave out ("in the Highlands and Islands").—(Lord Mitchison.)
On Question, Amendment agreed to.
Clause 1, as amended, agreed to.
Clause 2 [Further powers of Board relating to loans and other financial assistance to certain companies]:
LORD MITCHISON: This Amendment is consequential on the last one. I beg to move.
Amendment moved—
Page 1, line 23, leave out from ("company") to ("may") in line 25.—(Lord Mitchison.)
On Question, Amendment agreed to.
LORD MITCHISON: This also is consequential on the last of the Amendments to Clause 1. I beg to move.
Amendment moved—
Page 2, line 2, leave out from ("company") to ("may") in line 4.—(Lord Mitchison.)
On Question, Amendment agreed to.
LORD MITCHISON LORD MITCHISON moved, in subsection (3), at the beginning to insert:
"In accordance with any such arrangements as are mentioned in the said section 8, the Board may hold or dispose of".
The noble Lord said: This Amendment raises a rather minor point. We have agreed that the Board shall have power to help to promote a company, and the Bill provides for helping a company. The intention here is that the arrangements for repayment of a grant or a loan should provide for the Board to have some shares on repayment. If I may say so, I feel there is no difference in principle between that and what has already been agreed. I beg to move.
Amendment moved—
Page 2, line 8, at beginning insert the said words.—(Lord Mitchison.)
On Question, Amendment agreed to.
LORD MITCHISON: This Amendment is consequential on the last Amendment. I beg to move.
Amendment moved—
Page 2, line 9, after ("above") insert (",but any shares or stock so acquired").(Lord Mitchison.)
On Question, Amendment agreed to.
LORD MITCHISON: This Amendment is consequential on Amendment No. 7. I beg to move.
Amendment moved—
Page 2, line 10, leave out ("in the Highlands and Islands").—(Lord Mitchison.)
On Question, Amendment agreed to.
Clause 2, as amended, agreed to.
Clause 3 [Interpretation]:
1.8 p.m.
LORD MITCH1SON LORD MITCH1SON moved to leave out subsection (2). The noble Lord said: This Amendment raises a small point. It concerns preference capital. If help is to be given to a small company, formed, or existing, for the purpose, as the Bill is at present drafted in accordance with the Long Title it can be only by equity shareholders; that is to say, ordinary shares and not preference shares. There would of course be power under the Bill as it is at present drafted for the Board to take some ordinary shares, and also to take some form of charge under arrangements, which have to be approved both by the Treasury and by the Scottish Office. But I am sure your Lordships will see that the Board might want—as indeed they confirm—not to burden a small business with a charge or a loan but to take some preference shares instead. I should have thought it was very much a matter of practice for the Board, and although I do not think that it would be done very often I suggest that they should have the power. I beg to move.
Amendment moved—
Page 2, line 20, leave out subsection (2).—(Lord Mitchison.)
On Question, Amendment agreed to.
Clause 3, as amended, agreed to.
Remaining clause agreed to.
LORD MITCHISON: This and the following Amendment are to make the Title conform to what we have already put into the Bill. I repeat, that as it stands we have the wrong Title to the Bill. It is no doubt somebody's fault, but one does not know whose. We had the wrong Title in another place; it could not be amended, because of the procedural matter I have mentioned,
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and it has to be done now. I beg to move.
Amendment moved—
In the Title, line 2, leave out ("acquire equity") and insert ("form and promote, and to acquire").—(Lord Mitchison)
On Question, Amendment agreed to.
LORD MITCHISON: This is a similar Amendment. May I, in moving it, take the opportunity of thanking noble Lords very much and saying how I apologise, first of all for not being a Scot—I have spent my life doing that—and secondly for moving some Scottish Amendments on a day which I know is inconvenient to a good many Scots, one of whom said to me, "I hope it will not be a precedent". I cannot make any precedents; I am only a private Member. I beg to move.
Amendment moved—
In the Title, line 3, leave out ("business in") and insert ("or proposing to carry on business or other activities contributing to the economic or social development of").—(Lord Mitchison.)
On Question, Amendment agreed to.
Title, as amended, agreed to.
House resumed: Bill reported, with the Amendments.
[The Sitting was suspended at 1.12 p.m. and resumed at 1.45 p.m.]

SUPPLEMENTARY BENEFIT (DETERMINATION OF REQUIREMENTS) REGULATIONS 1968
1.45 p.m.
BARONESS PHILLIPS: My Lords, on behalf of my noble friend Lord Bowles, I should like to move the approval of these Regulations. These Regulations provide for increases and changes in the rates of supplementary benefit to take effect from October 7. The increases form part of the Government's programme for protecting the most vulnerable sections of the community from hardship arising from price increases which must result from the Government's measures to restore the economy of the country—in particular from devaluation and increases in taxation. The main proposals are for an increase of 5s. in the

1255
single householder rate and 8s. for a married couple. This results in new rates of £4 11s. and £7 9s. to which provision for rent is added. For adult non-householders an increase of 3s. on the scale rate and of 1s. on the fixed rent addition is proposed. Increases for children and for the blind are also proposed.
My Lords, beside the increases in the scale rates two other changes are proposed in order to take account of the special needs of special groups. First, the long-term addition which is payable to supplementary pensioners and to all others (excluding the unemployed) who have been getting benefit for two years, is to be raised from 9s. to 10s. a week. Secondly, to help parents with adolescent children, the age-band for children aged 11 to 15 is being replaced by two bands, covering children aged 11 to 12 and 13 to 15, and a proportionately higher increase is being given on this occasion to the latter. This is being done to make some increased allowance for the higher expenditure which is generally incurred at adolescence.
As I have explained to your Lordships, the increases are to compensate for rises in prices. The price changes which have taken place since last October, when supplementary benefit rates were last raised, would call for an increase of about 3s. 11d. in the single householder rate. The basic increase of 5s. now proposed will thus compensate for the rise in prices which has taken place following devaluation and the Budget, and give some margin. And then, of course, there is on top of this increase, the increase in the long-term addition, payable to 80 per cent. of all claimants.
My Lords, the beneficiaries will include the old, the widowed, the sick and the unemployed and their families—people who are unable to support themselves and who need special protection against price rises. All these people will be helped by the supplementary benefit increases at the same time as the lower paid family man will be helped by the higher family allowances—due to come into effect on October 8.
It may be helpful to your Lordships if I say a word about what will happen
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where a family on supplementary benefit receives an increase in the family allowance. As supplementary benefit is designed to bring a claimant's resources up to the guaranteed levels, family allowances and National Insurance benefits have to be taken into account in working out the supplementary benefit payable. But as supplementary benefit rates are going up, the total increase which the family will receive from all the benefits taken together will normally be an amount equivalent to the increases in the supplementary benefit rates.
I should like to say something also about those families whose supplementary benefit is restricted under the "wage-stop" provisions to the amount which the father could have earned had he been in work. They cannot benefit directly from the increase in the supplementary benefit levels, because the changes proposed do not affect the father's potential level of earnings. They will, however, benefit in full from the higher family allowances because family allowance which is payable whether a man is in work or not is ignored in calculating the level of the wage-stop. It is one of the advantages of increasing family allowances as well as supplementary benefits, that wage-stopped cases on supplementary benefit can be helped too.
In addition to wage-stopped families there are a few small groups of people who will receive amounts differing from those laid down in the Regulations. For example, there are people receiving, under powers exercised by the Supplementary Benefits Commission, an exceptional circumstances addition to cover special expenses over and above their long-term addition which is meant to cover expenses up to 9s. Because they are already getting more than the long-term addition they will not in general benefit from the 1s. increase in it. The amount for these special expenses will remain the same, but 10s. instead of 9s. will be covered by the long-term addition. This is because any increase in the cost of special expenses does not have to wait for any amendment of the Regulations, but can, for the most part, be met as it is found to occur. For example, an addition for extra laundry goes up if laundry charges rise. The only case where this is not true is where a person is receiving an

1257
addition for a special diet at a fixed rate laid down by the Supplementary Benefits Commission on medical advice. In these cases the Supplementary Benefits Commission propose to increase the amount by 1s. so that in these cases there will be an increase of 1s. in the total payable, over and above the increase in the basic scale rate.
Then there is the group of claimants paying an inclusive charge for board and lodging. The requirements of such a claimant are not laid down in the Regulations, but are determined by the Supplementary Benefits Commission. Currently, his requirements are taken as the amount he pays for his board and lodging (which of course will rise automatically as costs rise), plus £1 7s. 6d. for personal expenses. This latter amount is now being increased to £1 9s. 6d.
Finally, I should tell your Lordships that the cost of these proposals will be some £44 million on existing cases in a full year. This compares with the estimated net cost of supplementary benefit in the present financial year of some £394 million. My Lords, I beg to move that these Draft Regulations be approved.
Moved, That the Draft Supplementary Benefit (Determination of Requirements) Regulations 1968 laid before the House on the 18th of June last be approved.—(Baroness Phillips.)
1.53 p.m.
LORD ILFORD: My Lords, I do not intend to detain your Lordships for very long this afternoon. I desire to put only one or two points to the noble Baroness. I do not suppose the noble Baroness would claim that these scale rates do very much more than make good the loss in purchasing power attributable to the increase in the index of retail prices. When I was chairman of the Board, we always found it a convenient course when altering the scale rates to give ourselves a margin over and above what was required to make good the loss of purchasing power. That enabled us, if the index figure caught up on us, to be satisfied that all our applicants were still receiving the scale rate which Parliament had intended they should.
I have been endeavouring to ascertain from such statistics as are available what margin the Government are retaining in these scale rates. According to my cal-
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culation the Government have given themselves a margin of something like 5 per cent. Now, my Lords, is a margin of 5 per cent. sufficient or will the Government have to come back again for a higher scale before very long? Five per cent. is not really very much. The index figure rose by nearly five points between October, 1967, and last May. A rise of that magnitude could mean that the Government would have 10 come back for new scale rates before very long. Of course, there is no reason why the Government should not come back and ask for what is required to maintain the standards, but I would remind your Lordships that the alteration of the scale rates is a very considerable administrative operation. These new scale rates involve many hours of overtime work. It will be done by a very devoted staff, because the staff of that department have always shown themselves very conscious of the special public service which they perform. Nevertheless, it will mean that many hours of overtime will have to be worked. That will mean that the expenditure will also be very considerable.
I should not like to make an estimate of what the cost of this alteration of the scale rates would be—my recollection of these matters is fading—but it is a very considerable sum. It is really better, in the interest of economy, that when the scale rates are altered an adequate margin should be provided which will cover the increase in the index figure for as long a time as can be foreseen. I am afraid it reflects no great credit on the economic policy of the Government that the index figure should have risen as much as it has. But there it is, five points is a pretty good rise for the period since last October.
I have one or two matters that I should like to put to the noble Baroness before she replies. I wonder whether she can tell us if there is any real evidence that progress has been made with the problem which confronted me when I was chairman and has confronted the Board even since—that is, the problem of the individual who is entitled to assistance but steadfastly refuses to apply for it. That was a very intractable problem. We set to work in different ways. We sent out a circular letter, and I believe that the Supplementary Benefit Commission has followed that example.

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We invoked the assistance of the clergy, the doctors, the district nurses and other persons whose daily calling brought them into close contact with the population.
The Supplementary Benefit Commission has gone a stage further. It has done something which was often pressed upon me, but which I never did—it has altered the name. It was felt that the name "National Assistance" had a disagreeable connotation, and that if it was changed a good deal of the objection to claiming National Assistance would disappear. My Lords, I never believed that that was so. I can look back on a good many changes of name. "Outdoor relief" in 1929, on the break-up of the old Poor Law, was thought to have unpleasant associations, and so it turned itself into "public assistance". "Public assistance" lasted until 1948, when again, and for the same reasons, it was transformed into "National Assistance". I do not know whether the noble Baroness is able to tell us if the change to "supplementary benefit" has produced any tangible results. It is extremely difficult to ascertain whether these new measures which have been taken, changing the name and the additional visit—and the additional visit is not always welcome—have produced any tangible results. There are, of course, many more pensioners now than there were five or ten years ago, and it may be that that is some indication that the reluctance of these old people is being overcome. But there are other perhaps more powerful reasons why the number of pensioners should increase. It is difficult to say whether this problem has been finally overcome.
The magnitude of the problem has been very much overstated. One commonly hears it said that there are 700,000 old people entitled to National Assistance who will not ask for it and who are living below National Assistance standards. That figure is based on a complete misunderstanding of the survey of pensioners which was carried out by the National Assistance Board. That survey found that 700,000 households were apparently entitled to National Assistance but had refrained from asking for it. That represented about 850,000 pensioners. But of the 700,000 households,
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400,000 households were in possession of resources which for one reason or another were disregarded by the Board,
Many more lived with relatives who paid the rent or the household expenses or maintained their aged relatives. When all those households were taken into account there remained about 300,000 households. Of those 300,000 it was found that two-thirds had resources of some description. The actual number of persons who had no resources but the retirement pension and were living below assistance standards, but who would have been entitled to assistance had they asked for it, was only 85,000. A figure of 85,000 is considerable and it is a major problem but it is nothing like 700,000. One must get this problem in its right perspective. I hope that the noble Baroness will be able to tell us whether it is possible to say that this problem has now been overcome.
One of the other major problems which used to confront the Board when I was Chairman was the problem of what is called the wage stop, the man with low earning capacity. We had to treat him on the basis of his assumed earnings when he was in work. If we had not done that, the scale rates would have given him more than he was able to earn when he was working. There was much comment from the newspapers that we were paying men more on National Assistance than they were able to get when they were working. That was not so. We scaled the man down and he was paid by the Board the wage which we found in all the circumstances of the case was that which he could command when in work.
The Government have attempted to tackle this problem by the use of family allowances. I must not speak disparagingly of family allowances, because probably they are the right solution. Family allowances are taken into account in assessing National Assistance allowance. I notice that the noble Baroness safeguarded herself against all the disagreeable letters she is going to receive from recipients of family allowances who find that the amount of their National Assistance goes down by the amount that their family allowance goes up. I used to have this problem every time the insurance scale rates were

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altered. I received a number of disagreeable letters from people who were disappointed that they did not get the new insurance benefit rates which they expected, from reading their newspapers, to get. But one cannot avoid that sort of thing; it is one of the difficulties of the whole system.
As for the wage stop the family allowance is not set off against that. The man receives what he would get if working, not an assistance allowance. In addition, he gets family allowances, and this was the only way the problem could be tackled. Whether or not it is proving adequate I do not know, and no doubt the noble Baroness will be able to tell us.
I was hoping that the noble Baroness would have told us a little about the work of the Supplementary Benefits Commission. I naturally regret the passing of the old National Assistance Board. I think that there were great administrative advantages in a body which enjoyed a substantial measure of independence from other departments, and indeed, from the Government themselves, a body which was devoted solely to the identification of poverty and to its relief. There were great advantages in that system which are not present in the current system. However, I must be careful to say nothing which reflects on the Supplementary Benefits Commission. It is a most ingenious administrative device. And my information is that it is working well. I am delighted to know that that is so. I know something of the people who have to work it, and I am sure that if a success can be made of it, it will be made.
The Supplementary Benefits Commission, which has inherited the legacy of the National Assistance Board, was produced to get over the difficulty in which the Labour Party found themselves when they came into office, that they had committed themselves to many things which, when confronted with the administrative task of carrying them out, proved to be impracticable. The Commission was designed primarily to get over that difficulty. I hope and believe that it has got over that difficulty quite satisfactorily, and nothing that I say to-day is intended to reflect on the work which the Commission is doing. I hope that it will continue to carry on with the great task
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with which it has been entrusted and that its work will prove as successful as I hope the old Assistance Board was.
I have put a number of questions to the noble Baroness, of some of which I have given notice and of others I fear that I have not; but I am quite sure that, from her knowledge of the walking of the system, she will be well able to answer.
2.10 p.m.
BARONESS PHILLIPS: I should first like to express my appreciation to the noble Lord, Lord Ilford, for his courtesy in mentioning the two points that he proposed to raise to-day. I am afraid that at this juncture I am not able to give him an outline of the work of the Supplementary Benefits Commission, though I should have liked to do so. But I should like to thank him for his words: coming from him of all people, they are greatly appreciated. We all know of his own distinguished work in this field, and quite recently I met somebody who referred to him with great affection, remembering him from the period when he laid down so many of the types of benefit which we carry on to-day.
On the question of those entitled to benefit but not yet getting it, we are dealing here with a generation to whom I am only too delighted to pay tribute. I know that the noble Lord will agree with me, that we often pay tribute to youth, but we pay far too little tribute to the people of this other generation, who of course, were taught that independence was the great virtue. I ant sure that we should be the last to deplore that, but it still inhibits many of them from taking something which is rightly theirs, and which they perhaps feel they would rather not claim.
As the noble Lord will know, it is difficult to get precise figures, but between November, 1966, and September, 1967, the number of retired people receiving supplementary benefit went up by about half a million, and since the inquiry into the financial and other circumstances of retirement pensioners, to which the noble Lord, Lord Ilford, referred, well over 800,000 retired people have claimed rate rebates. So there is some indication that some of this group are coming forward. Nevertheless, Her Majesty's Government are only too well aware that there are

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still a number of people entitled to supplementary benefit who have not yet claimed it. The Ministry feel that considerable progress has been made over the past three years in getting the news over to these people, following on some of the plans which the noble Lord himself originally laid down and carried out. There is, of course, the use of posters, and the fact that letters are sent and invitations are given, even to the newly widowed, to say whether they wish to claim. So we can only hope that as time goes on the number of people who claim will increase, though it is always very difficult to assess figures.
The noble Lord mentioned the increase in the scale rates in relation to the cost-of-living index. I believe that the precise figure is 4·6 per cent., which is perhaps a little different from 5 per cent. But the increase in the scale rates which we are dealing with to-day will be just under 6 per cent. on the basic scales, and rather more than 6 per cent. in many cases where the long-term addition is payable. It is felt that since many of the increases which were forecast, such as in electricity and so on, are already known, this 6 per cent. will well cover the increases when the final introduction comes in October—though, as the noble Lord himself has so truly said, Her Majesty's Government are always watching this point.
LORD ILFORD: Is the figure of 4·6 per cent. the margin which has been allowed in the scale rate?
BARONESS PHILLIPS: No, my Lords. It is not the margin; it is the increase in prices. This is, of course, relevant, as the noble Lord said. So at this point of time it is felt that the 6 per cent. increase in the benefit rates is adequate, though no Minister would be foolish enough to make a very long-term forecast of this changing situation. But the Government will watch this continuously.
The noble Lord asked me about the wage stop. I think I made the point that the family allowances would have been increased whether the man had been working or not. I am well aware of the type of communication which a Minister would receive under the circumstances, but one can only point out that it would be unfair if one section of the com-
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munity were to make what one might call a profit, while others did not. One attempts only to keep pace with existing price changes. I hope I have covered the points raised by the noble Lord, and I thank him for welcoming this Order.
On Question, Motion agreed to.

CLEAN AIR BILL
2.15 p.m.
LORD MOYLE: My Lords, on behalf of my noble friend Lord Raglan, who is unavoidably absent, I beg to move that the Report be now received.
Moved, That the Report be now received.—(Lord Moyle.)
LORD KENNET: My Lords, on the Committee stage of this Bill, the noble Lord, Lord Brooke of Cumnor, put down an Amendment to Clause 3 which was designed to clarify the situation about the liability of large mobile furnaces to the controls proposed in the Bill. I said at that time that if he would withdraw it I would make a statement about this on Report. I see that he has not put the Amendment down again, but I shall, all the same, make the statement.
The Minister will be considering in due course, if the Bill is passed, what exemptions he will be making under Clause 4(1), and will invite submissions from interested parties and consult with them as necessary. Clause 3 will not be brought into operation until the appropriate regulations under Clause 4(1) have been made. Among the classes of things into the exemption of which he will be inquiring with interested parties are mobile furnaces.
On Question, Motion agreed to.
Clause 6 [Height of chimneys]:
LORD MOYLE: My Lords, it may be for the convenience of noble Lords if I suggest that the Amendments on the Paper in the name of the noble Lord, Lord Raglan, be taken en bloc, because they are complementary. The Amendment of substance is No. 3 and the remainder are consequential upon it. I hope that the noble and learned Lord the Lord Chancellor may agree—
THE LORD CHANCELLOR (LORD GARDINER): My Lords the Amendments

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will have to be put separately, but the noble Lord can certainly speak to all our at the same time.
LORD MOYLE: My Lords, the Amendments have been designed to meet some of the points made by noble Lords during the Committee stage, and to give greater clarity to the purpose of Clause 6. The effect of these Amendments is to provide that the word "capacity", which is somewhat vague and nebulous, is replaced by the phrase "combustion space". Secondly, in the case of any new furnace replacing an existing furnace, which involves a bigger combustion capacity and some alteration to the structure of the, chimney, both alterations will have to receive the approval of the local authority before they are allowed to become operative. I beg to move.
Amendment moved—
Page 5, line 33, leave out from ("therein") to ("to") in line 35 and insert ("to which this section applies").—(Lord Moyle.)
On Question, Amendment agreed to.
LORD MOYLE: My Lords, I formally beg to move Amendment No. 2.
Amendment moved—
Page 5, line 45, leave out from ("thereof") to ("to") in line 2 on page 6, and insert ("to which this section applies").—(Lord Moyle.)
On Question, Amendment agreed to.
LORD MOYLE: My Lords, I beg to move Amendment No. 3:
Amendment moved—
Page 7, line 21, leave out ("shall not apply to") and insert ("applies to the following furnaces:—

(a) any furnace served by a chimney other than a chimney the construction of which was begun or the plans for which were passed before the commencement of this section;

(b) any furnace tic combustion space of which has been increased since the commencement of this section; and

(c) any furnace the installation of which was begun after the commencement of this section and which replaces a furnace which had a smaller combustion space;

not being a furnace forming part of").—(Lord Moyle.)
On Question, Amendment agreed to.
LORD MOYLE: My Lords. I beg to move the last Amendment.
Amendment moved—
Page 7, leave out lines 28 to 31.—(Lord, Moyle.)
On Question, Amendment agreed to.

CARAVAN SITES BILL
2.21 p.m.
LORD WADE: 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 Wade.)
On Question, Motion agreed to.
House in Committee accordingly.
[The EARL OF LISTOWEL in the Chair.]
Clause 9 agreed to.
Clause 10 [Prohibition of unauthorised camping in designated areas]:
LORD WILLIS LORD WILLIS moved, in subsection (1), to leave out "being a gipsy". The noble Lord said: It may be for the convenience of the Committee if I speak to Amendments Nos. 19 and 20 together. I wilt be very brief, because I understand that we have to finish by 4 o'clock, and there is the danger that we may lose this Bill. A number of suggestions have been made about various Amendments in a document which I and am sure other noble Lords received this morning. It is a pity that this came a little late, because I think some of the points are pertinent.
To come to these two Amendments, we have already discussed the principle behind them very thoroughly on Second Reading. There was much objection on both sides of the House to the phrase "being a gipsy", which we all felt smacked of some sort of discrimination against a certain section of people. We were assured by the Government spokesman that this was not intended and that it was merely a convenient judicial term. The point was raised that it was not convenient or right that ordinary travelers who were going on holiday towing caravans behind their cars, or who for one reason or another felt it necessary to stop on the roadside for an overnight stop, should be under the same heading

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and treated in the same way. These Amendments ought to be taken together, because I think they take account of that, the point being that one recognises that it may be necessary for somebody on holiday or touring round to stop for a short period overnight for one reason or another on a journey between one point and another.
My Amendments, which I. hope your Lordships will find acceptable, equalise the situation as between the travelling people and the ordinary traveller who normally, for 50 weeks of the year, lives in a house and for the other two weeks goes off camping or with a caravan. They provide that both are equal in the sight of the law; that both can stay for 24 hours or for a night, which is in effect what I mean, on the side of the road or on a convenient parking place, and then move on. I cannot conceive of many circumstances in which the ordinary person, the ordinary citizen leaving his home and going on holiday with his family, will want to stay more than one night on the side of a road. He is usually on the move. Therefore the second Amendment takes care of him.
So far as the gipsies are concerned, if the problem is that they stay by the road for longer than 24 hours—which, as I understand it, is the problem now—then this Amendment takes care of that problem as well, because they are forbidden to do it for more than one night. Therefore it helps the travelling people in this sense: that if the sites which are going to be provided for them under this Bill are too far apart and they have to spend a night on the road between one site and another, this Amendment legalises that and allows them to do it.
For all these reasons I think the Amendments are reasonable Amendments. They get rid of this unfortunate phrase "being a gipsy", and they equalise the positions of the ordinary travellers and the travelling people. They get rid of the problem of travelling people camping for longer than 24 hours and overstaying their welcome, and at the same time they allow the ordinary citizen the right to stay for a short period on the side of the road when he is on holiday. I beg to move my first Amendment.
Amendment moved—
Page 7, line 36, leave out ("being a gipsy").—(Lord Willis.)
VISCOUNT MASSEREENE AND FERRARD: I am in rather a quandary here, because I should like very much to support the noble Lord on his first Amendment but I am not too happy about his other one. On Second Reading I brought out my objection to the phrase "being a gipsy". It is surely a departure from our established legal principles. I have always imagined that it is the act which constitutes the crime and not the type of person who does it. In this Bill a gipsy is described as a person embarking on a nomadic way of life. It seems to me, somehow, to be bad law. I cannot see why the words "being a gipsy" cannot be omitted. I quite admit that a great many gipsies are very untidy people. They are far more untidy, for instance, than the average businessman going on holiday with a caravan. But, after all, if they are very untidy on a site they can be prosecuted under the Anti-Litter Act. I do not really see that this makes a difference. We are rather dissociating gipsies from the other members of the community and I do not like it myself. I have no doubt we shall be told that there are very good reasons for it, but I still do not like it.
As regards the noble Lord's other Amendment, the one concerning 24 hours, I am rather frightened that you might get gipsies or ordinary members of the public who, true enough, stay only 24 hours by the highway but who may then move on another 100 yards and stay another 24 hours. There could be a sort of general slow procession every 100 yards, and they might be able to put in a great number of hours on the highway in that manner. So while supporting the noble Lord very strongly on his first Amendment, I am not quite happy about his second Amendment, though I appreciate the reasons behind it.
LORD LEATHERLAND: When the noble Viscount, Lord Massereene and Ferrard, and I find ourselves in agreement, what we are talking about on that occasion is probably right. There are two questions involved here with regard to the inclusion of the words "being a gipsy" in the Bill. One of them, as

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my noble friend Lord Willis has mentioned, is the question of discrimination. It is surely wrong, if a person is brought before a court, to condemn him in advance by saying that he is a gipsy. The question is not whether he is gipsy: the question, in the eyes of the court, is whether he is guilty or not guilty of a precise offence. But there is another aspect of his matter, and that is that it seems to savour somewhat of guilt by association—you classify a man as being associated with a certain class and therefore he is prejudiced when-ever he comes before a court.
I like the idea (which the noble Viscount does not) behind the "longer than 24 hours" Amendment which comes next. I think it puts the gipsies on the same basis as the ordinary suburban dweller who takes his motor caravan and puts it in a field or on the roadside. Both should be judged on the same basis—not differently, because one of them is Joe Jones, gipsy, and the other is Joseph Jones. Esq. Although we are, strictly discussing the first Amendment, I hope that the second Amendment will also be carried.
The first Amendment which deals with a man being condemned or prejudged because he is a gipsy, raises the question: what is a gipsy? There are various dictionary definitions. Perhaps there is some legalistic definition. Some definitions say that he is descended from the Hindu and that the Romany language is largely based on the Hindu tongue. There were some in the 16th Century who said that he is associated with the Egyptians. But is rather difficult for a court when adjudicating upon a case to take into account considerations of that kind. Gipsies are citizens of this country, and in my view should have rights equivalent to those of other citizens. If they are guilty, punish them; if they are not, let them off. Do not condemn them because they happen to belong to what we are pleased to call a gipsy tribe.
LORD MOTTISTONE: I intervene because it seems to me that, although I support strongly both these Amendments, if we carry them we must also leave out Clause 10(1)(c). Otherwise, people will be able to park on occupied pieces of land for 24 hours without the permission of the owner. This is surely much too
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wide. I support these two Amendments. I believe that it is possible, with the permission of the Committee, to move an Amendment without prior notice. If this is so, I should like to move in due course to leave out paragraph (c).
LORD WADE: I have a great deal of sympathy with the views expressed. I will try to point to some of the practical problems. First, I appreciate the interest in this subject shown by the noble Lord, Lord Willis, and others and also, if I may say so, the distinction Lord Willis made on Second Reading between the true Romanies and others—although I think this distinction is lessened through inter-marriage. It is a fascinating subject. I am inclined to the view that the true Romany descended from the people who migrated from Northern India between the 10th and 12th Centuries and first reached Britain in the 15th Century. In the following century, to be precise in 1563, Queen Elizabeth I ordered them all to leave Britain within three months. The penalty for failing to do so was death. In spite of that, they remained, and, on the whole, they appear to have been treated with toleration in Britain.
But with the kind of society in which we live to-day, those of a nomadic way of life present some problems. The proposal which I think is basic to this Bill, and to which a great deal of thought has been given, is that sites should be provided by local authorities specifically for those of the nomadic way of life—not that they should always remain on the same site but that, at considerable expense, sites should be provided. The counterpart to that is that those who benefit in that way should suffer certain penalties for remaining more than very temporarily on unauthorised sites. I see the dilemma; but there it is. If you accept that view, then you must face the situation.
The effect of the first Amendment moved by the noble Lord, Lord Willis, would be to extend the proposed penalty provisions in the Bill to all classes of caravanners. If there are penalties then, under the Amendment, they would have to be applied to everyone. But there are distinctions between those who live a nomadic way of life, take their possessions with them and carry on activities such as dealing in scrap metal and those who

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occasionally tour with a holiday caravan and do not take their possessions with them. I am bound to say that I think we must make a distinction, once we decide to undertake the considerable expense involved in providing these local authority sites for those of the nomadic way of life.
I have read the memorandum of the National Council of Civil Liberties. I always read with very great care and interest what they say; but again I think there are practical difficulties. I hope that the new sites will provide the solution. Perhaps it would be helpful if the noble Lord, Lord Kennet, were to intervene and to give the view of the Ministry on this subject.
2.36 p.m.
LORD KENNET: In the course of this discussion on this Amendment I think that all speakers, with the exception of Lord Wade, have lost sight of the dual nature of the provisions in the Bill about gipsies. By "dual nature" I mean that with one hand we lay a duty on the local authorities to provide a number of camping sites sufficient for the number of gipsies in their area; and, with the other hand, when that is done—and only when that is done; not before—we provide the same local authorities with the power to move on gipsies when they camp on the verge or on unoccupied land or on any other land without the permission of the owner. Of course they can still get the owner's permission. We should not forget that.
My noble friend Lord Leatherland raised the bugbear of a court which might have to decide whether, in defining a gipsy they should adopt the 16th Century belief about India or the 17th Century belief about Egypt, or whatever it was. If my noble friend had taken the trouble to read the Bill he would have seen that a gipsy in law is a person of a nomadic way of life with no regard to his ethnic or national origin. A gipsy is simply a person of a nomadic way of life.
LORD LEATHERLAND: Will my noble friend allow me to interrupt?—I am sorry to do so. But that definition would also cover didekais, tinkers and all those travelling people, apart from the real gipsies.
LORD KENNET: Yes, it would. That being so, you are a gipsy if, in the opinion of the court which is trying your case—if you ever happen to be prosecuted; which is unlikely, and we hope it will not happen—you fit that definition. You may rest your defence on the fact that you are not a person of a nomadic way of life. That will be a question of fact for the court to determine. These provisions are objected to, as we know, by the National Council of Civil Liberties. I think we all received the sheet that they sent round the other day. I think this is a change of position on their part. Earlier they welcomed the Bill in principle, although they hoped to improve it in detail. Now their attitude has hardened against it, for what reason I do not know.
But this dual approach has been accepted by the Gipsy Council. One does not wish to place too much emphasis on this; for if ever there was a class of people which could be said to be not truly represented by any organisation it is the gipsy as legally defined. But there is a Gipsy Council which has their interests very much at heart and which represents those interests with considerable vigour and skill. This Council does not object to the giving of the power to the local authorities once the sites are set up.
The words in the Bill "being a gipsy", bearing in mind all that I have told the Committee, mean no more and no less than being a person for whom the local authorities are bound to provide sites. If we apply the clause to other people—
LORD WILLIS: If the noble Lord will forgive me, this is not so. He has said himself that it applies to people who follow the nomadic way of life.
LORD KENNET: A person who follows a nomadic way of life is a person for whom the local authority is bound to provide sites. Being a gipsy means being a person for whom under this Bill the local authority is bound to provide sites; therefore the local authority is justified in moving him on once the sites are set up, but not before. If we apply that to everybody, persons not being gipsies, we are giving the local authorities the right to move on persons for whom they have no duty to provide sites.

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That is absolutely open-ended and would I think, be unacceptable.
LORD WILLIS: Like the noble Lord, Leatherland, I hate to interrupt the noble Lord, Lord Kennet. But there is a provision later—I know that we are not now discussing that Amendment—that they cannot be moved on until they have been 24 hours in your district, which seems to me a perfectly reasonable space of time for anybody on holiday.
LORD KENNET: In point of fact, I think that everybody has 24 hours because of the emergency provisions—if you are ill or have a breakdown and cannot move on. In practice it would be an odd gipsy, and I think it would be an odd holidaymaker, who was not able to find some illness or breakdown to justify an overnight stop. That is really the situation.
In conclusion, I feel bound to say—one should not be too confident about this—that if we take these powers from the local authorities they simply will not provide the sites. Why should they? The local authority interest, the county interest and the borough interest is to reach a sensible conclusion. At the moment, the gipsies are all over the place and give rise to a lot of inconvenience to other people. This is a problem for the county councils. At the moment, there are no sites for them, and this is a problem for the gipsies.
I would remind the Committee once again that we are trying, for the first time, to reach a reconciliation between the nomadic people and the settled people. That has become necessary because there is no longer enough land to enable nomadic people to lead a decent life without annoying other people. They have been living under the present system, harassed to a greater or lesser degree by Queen Elizabeth I and the squire, for about 400 years. The pressure on land is now such that we have to get a new system. The new system, which has been agreed by the local authorities, by the Gipsy Council, by the House of Commons and now, I hope, by this House, is this dual system. The local authorities must provide sites, and the Minister has power to make them if they do not—and he will. On the other hand, the local authorities have power to move the gipsies on if they camp round the place
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without permission. All that being so, I hope that my noble friend may agree to withdraw his Amendment.
LORD WILLIS: I am still not happy about the phrase "being a gipsy". Nor am I quite happy that everybody would be quite as diabolically cunning as my noble friend the Minister and plead a breakdown when they want to stay an extra 24 hours. But in view of the pressure on our time, and in view of the explanation which has been made (I hope that the Government will issue a leaflet when this Bill is passed explaining to everybody how they can plead a breakdown) I ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
THE DEPUTY CHAIRMAN OF COMMITTEES: (LORD MERTHYR): The noble Lord, Lord Mottistone, has asked advice whether he can table an Amendment to this clause to leave out paragraph (c).
LORD MOTTISTONE: The last two Amendments having been withdrawn, my Amendment is now unnecessary.
LORD MILVERTON LORD MILVERTON moved, in subsection (3), after "stationed" to insert "temporarily". The noble Lord said: This is a simple Amendment, aimed at clarifying the extent of the defence, referred to in subsection (2). Without an Amendment of this kind a cart and horses could be driven through the early part of the clause which prohibits unauthorised camping. Every caravanner would be able to allege that he could not move his van because of illness or because there was something wrong with the vehicle; or say that he intended to remove it as soon as was practicable. Hence this suggested Amendment. I beg to move.
Amendment moved—
Page 8, line 3, after ("stationed") insert ("temporarily").—(Lord Milverton.)
LORD WADE: I take the view that it is not necessary to insert the Word "temporarily". If I may refer to Clause 10 and read subsection (2) on page 8 of the Bill it states:
"In proceedings against any person for an offence under this section it shall be a defence to prove that the caravan was stationed on the land in consequence of illness, mechanical

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breakdown or other immediate emergency and then he removed it (or intended to remove it) as soon as reasonably practicable."
The noble Lord has referred to that subsection, and I should have thought that was the fairest way to deal with the matter. It seems to me unnecessary to require a gipsy to prove that he stationed the caravan temporarily on the land since this clause, as drafted, requires him to prove that he removed it, or intended to remove it "as soon as reasonably practicable." Moreover, I think the whole nature of the defence
"illness, mechanical breakdown or other immediate emergency"
implies a temporary situation.
There is one other point which arose under the second of the Amendments in the name of the noble Lord, Lord Willis, which was not moved. Those of a nomadic way of life do not as a rule have any particular mark on their caravans like the number plate of a car. An ordinary person on holiday with a car and caravan has a distinguishing mark, and it is easy to prove whether they were in a certain place for a long time, or a night, or whatever it may be. In the case of those we call "gipsies" for the purposes of this Bill, that is not so. It would seem to me that the clause as it appears in the Bill is the fairest version for both sides, and the most practicable. I hope that explanation will be regarded as satisfactory, but again I am always willing to hear what the noble Lord, Lord Kennet, has to say.
LORD SOMERS: I should like to support my noble friend Lord Milverton because, as he says, the wording as it is at present depends on whether a person says that the caravan is there temporarily because of illness or some mechanical failure or for some other reason. Who is to prove this? Unfortunately, it is only too easy to say that one intends to remove one's caravan within a short space of time, but very often that intention is not carried out. Who is to prove that there is definitely a mechanical failure or illness? One would have to probe very deeply into the private affairs of the caravanner to prove that, and I do not think that is a thing one should have to do. It is much simpler to say that they may remain for a short space of time and then they must go.
LORD LEATHERLAND: May I, in three sentences, try to get to the heart of this matter? The Bill, as now drafted, says that it would be a valid defence if the caravan occupier could prove that he was unable to move because of illness or a breakdown. Surely, that excuse will apply only so long as he, or some member of his family, is ill, or so long as the caravan is broken down and cannot be moved.
I think that the clause as drawn is adequate to deal with any possibility that might arise. The bench, if the matter ultimately goes before them, will have to decide whether a case is made out by the prosecuting local authority, or whether the caravan owner can prove that at the time he was reported a member of his family was ill or his wife was expecting a baby, or whatever it might have been, or that mechanically it was impossible to move the caravan. And at the time of reporting, the police will no doubt do the probing that the noble Lord, Lord Somers, has mentioned. I think that the Bill is reasonable in its original form, that the insertion of the word "temporary" will only confuse and that it is quite unnecessary.
LORD KENNET: I have little to add to what my noble friend Lord Leatherland has said. The Amendment presupposes who was able to prove that he intended to remove his caravan as soon as reasonably practicable but unable to prove that he was only temporarily on the land—a situation which I think is unlikely to arise.
LORD BROCKWAY: I had asked for an intimation when we were discussing this Bill and I must apologise for being late. On Monday we shall be discussing the Race Relations Bill and what worries me in this clause is that it singles out gipsies—
LORD KENNET: May I advise my noble friend that we had a half-hour debate on this point on the last two Amendments.
LORD BROCKWAY: I apologise, and regret that I was not informed that we had reached that point.
LORD MILVERTON: I am disappointed that the Committee should apparently, on the whole, be in favour of leaving this clause as it is, but if the

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Committee are satisfied that it means temporarily without necessarily stating so, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 10 agreed to.
Clause 11 [Removal of unlawful encampments]
2.53 p.m.
LORD MILVERTON LORD MILVERTON moved, after subsection (3), to insert:
" () The Court may also order the repayment to the local authority by the defendant of the reasonable expenses incurred in executing the said order".
The noble Lord said: This also is a simple Amendment. Its purpose is to enable a local authority to recover the expenses they incur in removing caravans from land other than land owned by the local authority. It seems reasonable for them to ask for such a power of recovery. I beg to move.
Page 8, line 38, at end insert the said subsection.—(Lord Milverton.)
LORD WILLIS: On the surface this Amendment seems reasonable, but it strikes me that the majority of people likely to be so dealt with by a local authority would be poor people, who would not be on that piece of land if they were not ire rather desperate circumstances. We have already been told—and I would emphasise this—that many of the provisions of this Bill will not come into operation for some time. There is likely to be terrible hardship for many travelling people this coming winter, and they may have, in desperation, to take refuge on land which is forbidden to them. It seems to me highly unfair if a local authority has power to expel them from that piece of land and, in addition, has power to heap these costs on to their heads. If a good network of these sites were in operation, I should not feel quite the same way, but in view of the coming winter hardship I oppose this Amendment.
LORD WADE: I am obliged to the noble Lord, Lord Willis, for the view he has expressed. May I approach this matter from a different angle? At first sight this would seem to be a reasonable Amendment, but I am advised that the
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power of local authorities to recover the expenses of evicting gipsies was intentionally omitted on the ground that in practice is would prove to be somewhat embarrassing to the local authority. In principle, it might be right that a gipsy who parked on land without authority and refused to leave when asked to do so should meet the costs incurred in evicting him. But I am told that once he is put on the road, it would be for the police to see that he goes on and causes no obstruction.
I am advised that if the local authority seek to recover costs against a gipsy it will have to try to discover where he has gone to serve notice of proceedings on him. This clearly raises a number of practical difficulties and may involve wasted effort and expenditure. Again, if a local authority had power to recover expenses in connection with eviction, those who have to deal with the matter would feel that they were under some obligation to do so, and I am advised that, strange as it may seem, on balance those concerned with these matters do not wish to have the power, and would prefer that they should be under no obligation to attempt to recover costs. It is for that reason that I ask your Lordships not to accept this Amendment.
LORD KENNET: I have nothing to add to what my noble friend Lord Willis has said, but I should like to tell your Lordships that I have no evidence at all that any more terrible hardships face gipsies this winter than in any of the recent winters; and there is no reason to suppose that the coming winter will be an exceptionally bad one for them in any way. I would also say that local authorities will have no more power in regard to gipsies this winter than they had last winter.
LORD MILVERTON: I am sorry that this Amendment also has not received the approval of the Committee. It seems to me that it would be better to leave discretion in the hands of the local authority and not always indulge in this habit of placing the expenses of executing the law upon the taxpayer. However, since the views of the Committee are against me, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
LORD MILVERTON LORD MILVERTON moved, after subsection (3), to insert:
" () No action taken by a local authority under this section shall render them liable in any way under any other enactment, or at common law, for obstruction of the highway".
The noble Lord said: This is another Amendment which concerns local authorities. We are bound to consider what in some circumstances might be the result of action by a local authority under this clause. For instance, what happens as the result of an order for the removal of caravans if a local authority places them on the highway? I understand that under Common Law the highway is for the purpose of passing and repassing, coupled with a reasonable right of stopping. Penalties are contained in certain Statutes for obstructing the highway. Will a local authority be guilty of obstructing the highway if it removes a caravan under this clause? For that reason, I beg to move this Amendment.
Amendment moved—
Page 8, line 38, at end insert the said subsection.—(Lord Milverton.)
LORD LEATHERLAND: Although I should have been opposed to Lord Milverton's previous Amendment, I heartily support this one. The noble Lord has envisaged a hypothetical case in which a local authority might be prosecuted for having caused obstruction on the highway by moving some gipsies or nomads from a field on to the road or the roadside. I was informed quite recently, in my county council capacity, that one of the county councils of this country had actually been prosecuted for this particular offence. That county council had caused gipsies to move on from some open land on to a highway, and the police authorities had launched proceedings against that county council for causing an obstruction. I think this most unfair.
Many local authorities, in pursuance of their duties, and following their lawful occasions, have to cause obstructions on the highway from time to time. They dig holes; they fill them up; and they dig holes again. They grapple with affrays that take place on highways; they evict householders and place their furniture out on the public footpath, and sometimes on the street; and they obstruct the highways by their drain-cleaning operations. But we do not prosecute
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a local authority for indulging in any of these socially worthy activities. I think it would be very hard on a county council, county borough, or London borough (and these are the authorities involved under this Bill) if they were liable to prosecution because, in pursuance of their action in turning gipsies out of a field on to the road, they temporarily caused some obstruction of that road.
We know that these operations are not always easy to undertake, and sometimes complications technically occur. I think that if we do not protect the local authorities in the manner suggested in this Amendment, it will deter many of these local authorities from undertaking the worthy duties which we seek to place upon them under this Bill. I sincerely hope, therefore, that this Amendment will be accepted.
LORD WADE: I have endeavoured to obtain the best advice I can on this matter and having looked carefully into the point whether a local authority would be committing an offence, such as obstructing a highway, when it evicts caravans from private lands, I am advised that there would be no liability on the local authority. The advice I have been given is that the local authority would have no further responsibility for towing the caravan from the private land. This does happen, and the police take steps to ensure that the caravanners move along and do not cause obstruction. The local authority will be acting under an order of the court, and I must say it is difficult to see that they will in any way be wilfully obstructing the passage along the highway merely by virtue of the fact that they have carried out an order of the court in moving the caravan on to the highway. I should have thought that this was the caravanners' responsibility. It is not that I have any desire to make things difficult for local authorities, but I can only inform your Lordships of the advice I have received. I am afraid I cannot take it any further.
LORD LEATHERLAND: Perhaps I may intervene once again. The noble Lord, Lord Wade, and I are very sensible men. But a fortnight ago I was personally informed by the clerk of a county council that his county council

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had been prosecuted for just such an incident as this. In order to prevent such foolish prosecutions being launched in future, I want to see no obstacle placed in the way of county councils when they seek to carry out their duty under this Bill. I think the Amendment is necessary if only to warn those people who institute prosecutions that they have not a chance of succeeding when they try to prosecute a county council under this clause.
Loan WADE: Perhaps it would be helpful if I had conversations with the noble Lords, Lord Leatherland and Lord Milverton, and any others interested in this point. Clearly, I am acting on the advice given to me. This is rather a technical point. That is as far as I can take the matter to-day.
On Question, Amendment negatived.
LORD WILLIS LORD WILLIS moved to add to the clause:
"() in any area to which section 10 of this Act applies, the local authority shall make an annual return to the Minister of the number of cases in which proceedings have been taken under Part II of this Act."
The noble Lord said: This is quite a simple Amendment that speaks for itself. It really asks for an account from local authorities of what is done in this particular field. Again, I think this is a matter where one wants to keep tabs on what is happening and try to get some kind of picture. My noble friend Lord Kennet seems to have taken up rather a contradictory position in the matter, for example (and it relates slightly to what I am now talking about), of this coming winter. He indicated that he agreed that there would be some hardship in the coming winter, and he sent me a number of circulars that had been sent out by the Ministry of Housing and Local Government urging that some help should be given. I was therefore surprised to-day to discover that my noble friend feels that the problems will not be any harder this winter than in any other winter.
In a debate earlier to-day he said that land was shrinking and the problem was becoming sharper: and I think we are all agreed about this. There is going to be g cat hardship this winter. I regret that there is no provision in this Bill necessitating local authorities to set up temporary sites, even if they have not
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all the amenities that we are asking for. But that is another matter. I am asking in this Amendment that an annual return shall be sent in by the local authority of what evictions, actions and proceedings are taken by them against the travelling people and against what are wrongly called in this Bill "gipsies". I hope that the Amendment will commend itself to your Lordships. I beg to move.
Amendment moved.
Page 8, line 44, at end insert the said subsection.—(Lord Willis.)
VISCOUNT MASSEREENE AND FERRARD: I should like very briefly to support this Amendment. Of course, it is true, as the noble Lord said, that if the local authority do not send in this information through an annual return to the Minister, how can the Minister know that enough sites have been made available in the district for the gipsies? It is just as simple as that, and I can see no objection to the Amendment at all.
LORD KENNET: There is absolutely no objection to the purpose of the Amendment, but it is not really necessary to write it into the Bill because we can get this information in any event from the court returns, and shall do so. On the general question, I think there may still be some confusion in some of your Lordships' minds about this matter. These powers do not come into effect this winter. I think, to be perfectly frank, that it is unlikely they will come into effect next winter, either, because the sites will not be set up by then. I do not want to name periods, but they do not come into effect until sites are set up.
As to increased hardship this winter, hardship for travelling people has been increasing certainly for the last twenty-five years, and I should think probably the noble Lord would agree for the last fifty. It has now reached a point where it has become necessary to act. In the Government's view the widest action is contained in the Bill. There is no quantum jump in hardship expected or reasonably foreseeable this winter. Nothing will be different this winter from what it was last winter, except for the fact that we are one year further on, and when the Bill comes into effect things will be much better.
LORD WILLIS: May I say something else before the noble Lord sits down? I do not want to quarrel with him about this matter, because I think our sympathies are both engaged on the same side. But it seems to me contradictory to agree that this Bill is necessary because of great hardship and then to admit that the Bill, or a clause in the Bill, will not come into effect this winter, or even the succeeding winter, and therefore not to see that it is essential, in order to prevent the hardship that existed last winter and the winter before, to encourage or find some way of persuading local authorities to set aside temporary sites, without all the equipment and facilities that we are asking for under this Bill, so that that hardship can be ameliorated this winter. That is really what I am saying. I do not misunderstand the Bill at all. I am merely pleading that hardship could be ameliorated this winter by some action.
LORD KENNET: I think I have sent the noble Lord copies of the two circulars in which the Minister has asked local authorities to do precisely that.
On Question, Amendment negatived.
Clause 11 agreed to.
Clause 12 [Designation of areas]:
LORD MILVERTON LORD MILVERTON moved, in subsection (1), after the second "borough" to insert "or county district council". The noble Lord said: Under this clause the Minister may, by order made on the application of a county council, county borough council or London borough council, designate the area of that authority as one where unauthorised camping by a stationing of caravans is prohibited. If a county district council—that is, a non-county borough or urban or rural district—can show that sites are not and cannot be made available in their area, that authority should surely be empowered to apply to the Minister for their area so to be designated. Unless such a power is given the county district councils, the prohibition of gipsy encampments will depend on the county council providing an adequate number of sites throughout the county, which may not be done, and this may bring particular trouble in built-up areas. Hence this Amendment. I beg to move.
Amendment moved—
Page 9, line 3, after second ("borough") insert ("or county district council")—(Lord Milverton.)
LORD LEATHERLAND: May I ask the noble Lord, Lord Milverton, what this Amendment really means? On reading it I thought it meant that a district council could voluntarily, of its own volition, say to the Minister, "We should like to be designated as an area in which gipsy encampments can be established" but I rather gathered from the noble Lord's words that he wanted the district council to be able to say to the Minister, "We are an area where a gipsy encampment should not be established" Now which is it?—because my view will be somewhat determined by the reply.
LORD MILVERTON: I think the first is the answer which I would return to the noble Lord.
LORD LEATHERLAND: I am not particularly opposed to the idea that a district council should be able to make representations that its district should be designated as a place where a gipsy encampment can be established, but my experience on a county council is that the district councils are diametrically opposed to any attempt by the county council to establish a gipsy encampment in their locality. As I said on Second Reading, my county council have made Four unsuccessful attempts to establish gipsy encampments in various parts of the county, and in almost every one of those cases the local council, the district council, raised very serious objections indeed. And, of course, one can understand why the district council should raise objections. The district council is more closely associated with its inhabitants than is the county council, and no district councillor will get up and say, "What a good idea it would be if we were to have a gipsy encampment in our area", because probably that district councillor lives along the edge of the field next to the area which is to be designated. I do not think this proposal will be successful, whichever way we care to look at it.
This question of establishing gipsy encampments will be unpopular—it is the old story of Stansted all over again; we all want a third London Airport but we do not want it in our village. We all

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want gipsy encampments so that these people may live a semi-civilised life, but we do not want those encampments near where, we live. Therefore I think the broader view is the proper one to adopt here.
LORD WADE: I think the effect of this Amendment would be to enable the district council to obtain a designation order. Whether they would do so I do not know, but if they were to do so there is the danger that it would lead to patchwork development, and I am inclined to the view that it would be better if it were dealt with by the county council.
LORD KENNET: The problem would be that the poor gipsy would not know whether he was in a place where he could camp on the verge without being pushed on, or not, and this might be a little hard on him.
On Question, Amendment negatived.
Clause 12 agreed to.
Clause 13 [Multi-unit caravans]:
3.16 p.m.
LORD WAKEFIELD OF KENDAL LORD WAKEFIELD OF KENDAL moved, in subsection (1)(a), after "of" to insert "not more than two". The noble Lord said: The National Caravan Council held a conference last autumn which was attended by all local authorities and all the local authority associations, as well as some Government representatives, to consider what action could appropriately be taken to correct a defect in the definition of a "caravan" in the Caravan Sites and Control of Development Act 1960. The definition affected those caravans that are made in two parts for ease of transportation and are assembled into one unit of living accommodation when sited on a caravan park. That conference agreed unanimously that such units should be restricted to two parts. This clause is a direct result of that conference.
Unfortunately, the correction proposed to be made will not now apply to Scotland. The definition is embodied in an entirely new form of wording that was introduced at short notice in the Committee stage in another place. In this new form of wording the restriction of the parts to two was dropped, although it had appeared when the Bill was first
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published. The effect of this new definition as it is now contained in the Bill is that any prefabricated hut or structure, made in no matter how many parts, could be deemed to be a caravan. I am sure that that is not intended, and therefore I submit this Amendment, Which I understand has the support of the Government and of the noble Lord, Lord Wade, and I hope your Lordships will approve it. I beg to move.
Amendment moved—
Page 9, line 26, after ("of") insert ("not more than two").—(Lord Wakefield of Kendal.)
LORD WADE: In replying to this Amendment, may I interpolate a personal note? From time to time I have introduced or helped to sponsor Private Members' Bills but I have never seen such Bills reach the Statute Book. I hope this will be the exception. That being so, I am very pleased to be able to help it along, because this is one occasion where I can recommend your Lordships to accept the Amendment. This is a very technical point. We are anxious that the definition should be as accurate as possible, and I think, if I may say so, the noble Lord, Lord Wakefield of Kendal has made out his case. I would recommend to your Lordships that this Amendment be accepted.
On Question, Amendment agreed to.
On Question, Whether Clause 13, as amended, shall stand part of the Bill?
LORD WAKEFIELD OF KENDAL: I should like to rise for one moment to ask for a point of clarification. I do not expect the point to be answered now, but I hope that if I can make it now it may be possible for the Minister on Report stage to give an assurance on what I am seeking. Under an early planning appeal on twin-unit caravans in 1964 a point was raised as to whether or not the assembling of the part, by inserting bolts, clamps, and so on, amounted to "development" under the Planning Act; and it was held to be so. This Bill, of course, cannot be widened to cover amendment of the Planning Act, but I think I am right in saving that both industry and the local authorities would welcome an assurance from the Government that in deciding planning appeals involving this point the Minister will not consider the assembling of the

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parts of twin-unit caravans to be development. As I say, I do not expect an answer at this moment, but if we could be told something on Report stage which would help to give an assurance on this point I am sure that it would be very well received both by industry and by local authorities.
LORD KENNET: Would the noble Lord be content if we pursued it by correspondence, in order to save the time of the House?
LORD WAKEFIELD OF KENDAL: Certainly, if that would be for the convenience of the Government. It is only a point of clarification, but I know that it would be in the public interest and advantage if it could be done in that way.
Clause 13, as amended, agreed to.
Clause 14 [Offences.]:
3.22 p.m.
LORD WAKEFIELD OF KENDAL LORD WAKEFIELD OF KENDAL moved, in subsection (2), after "under" to insert "Part II of". The noble Lord said: I beg to move this Amendment in the names of my noble friends and myself. Part I of this Bill depends upon a contract between two parties, the owner of the caravan park and the occupier of the caravan, both of whom are quite free to take action on their own behalf if they wish to do so. The Caravan Council and the National Federation of Site Operators, who have throughout this Bill (and not only on this clause) co-operated very closely together, see no justification for legislating that the local authority should be empowered to intervene in such a contract, any more than in any other contract freely entered into by individual parties. If either party has a grievance there is nothing whatsoever to prevent its being adjudicated upon through the normal process of the law courts without the intervention of any local authority. Surely there is no need for local authority intervention. Surely it is far better, where there is a contract between two parties, if there is any dispute, to let those two parties, without any third party intervening, go to the court and have it settled freely. I beg to move.
Amendment moved—
Page 10, line 25, after ("under") insert ("Part II of").—(Lord Wakefield of Kendal.)
LORD LEATHERLAND: So far as Part I of the Bill is concerned, where the noble Lord, Lord Wakefield of Kendal, says there are contractual obligations between a landlord of a field or site and the caravan occupier on that site there may be a great deal to be said for the Amendment he has moved. But I shall listen to my noble friend Lord Kennet before making up my mind on that. With regard to Part II, which deals with gipsies, it is suggested in the Amendment that any local authority should be able to take proceedings. But Part II does not give authority to any local authority: the only local authorities that are given authority under this Part of the Bill are county councils, county boroughs and London boroughs. I wonder whether a county council would feel pleased if, because of some alleged contravention by gipsies in its area, legal proceedings were taken, not by the county council but by an urban or rural district council within the county. I will listen to my noble friend Lord Kennet upon this point, but it seems to me that it would be rather anomalous if, having given one authority power, you allow a subordinate authority to attempt to enforce that power in the courts.
LORD WADE: I think the noble Lord, Lord Wakefield, may be under a slight misapprehension. May I read subsection (2)? It reads as follows:
"Proceedings for an offence under this Act may be instituted by any local authority".
I am not dealing with the point of "any"; I am just dealing with the effect of this subsection. I think that means that proceedings can be instituted for an offence under Part I or Part II; and I think that was the point that was made. This has nothing to do with intervening in a contract. Part I deals with harassment and illegal eviction, which in certain circumstances may be offences, and it is just a question as to who should prosecute if there is an offence. If this Amendment were accepted, I think the effect would be to cast doubt on the power of a local authority to prosecute for offences—that is to say, harassment and illegal eviction—under Part I of the Bill.
Someone has to prosecute, whether it be an individual or the police or a local authority. Local authorities are

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empowered by Section 108 of the Rent Act 1968 (which replaces previous provisions for the prosecution of Rent Act offences) to prosecute for the corresponding offences under Section 30 of the Rent Act 1965. I understand that in practice it is normally the local authorities and not the police who investigate and prosecute in regard to these offences; and it is thought probable that local authorities will undertake the same functions in respect of offences under this Bill when it becomes an Act. That is to say, if there is harassment or illegal eviction, then probably the local authority, rather than the police, will prosecute. But the effect of this subsection is merely to make it clear that a local authority could.
As to whether this is any particular significance in the word "any", I should like to hear what the noble Lord, Lord Kennet, has to say. The point I want to make is that, so far as prosecution is concerned, there must be a case for prosecution and in practice it is really a question of whether it should be undertaken by the police or by the local authority. I cannot see any fundamental point of principle there. It may be more convenient that the local authority rather than the police should prosecute, if there is a case for prosecution.
3.29 p.m.
LORD MOTTISTONE: I should like to raise a point of clarification here. Clause 3(3) of the Bill refers to "civil proceedings". The noble and learned Lord the Lord Chancellor, when we last met in Committee on this Bill, went to some trouble to explain to us that under Part I of this Bill all the proceedings will be civil proceedings. This was his main argument, it being a county court affair rather than a magistrates' court affair. I may be ignorant on this point, but if it is a matter of evil proceedings it does not seem to me to be right to talk about prosecutions and the police. Surely it is more a question of the harassed occupants suing the site owners rather than a question of prosecution. I think we are crossing our threads here. Why on earth should the local authority set themselves up as a sort of super policeman on rather dictatorial lines, to supplement this process?
LORD WADE: I do not want to intervene too many times before the noble
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Lord, Lord Kennet, replies, but may I just read an earlier subsection. Subsection (3) of Clause 3 says:
"A person guilty of an offence under this section shall, without prejudice to any liability or remedy to which he may be subject in civil proceedings, be liable on summary conviction…"
There is nothing in that subsection that I can see to suggest that the local authority will be concerned in any way with this liability or remedy to which a person may be subject in civil proceedings. It is only in regard to an offence that subsection (2) of Clause 14 applies proceedings. I think the answer is that that applies to the offences in Part I and not to the "liability or remedy" which was referred to as a "liability or remedy to which he may be subject in civil proceedings". I hope I have mace my point clear.
LORD KENNET: If I may deal first with the point of my noble friend Lord Leatherland, I should like to be sure that I have understood it aright. The question was what would a county council say if in a designated area they had set up the camp for gipsies and the district councils then started prosecuting the gipsies and moving them on. I take the point, and if your Lordships will allow me I will look into it and have something to say to my noble friend either privately or at a later stage.
On the other point about criminal and civil proceedings, I have nothing to add to the explanation which was given by the noble Lord, Lord Wade (which I think was as lucid as could possibly be devised in a situation of such extreme complexity), and simply confirm that the effect of the Amendment we are now discussing would impinge only on Part I of the Bill.
LORD AIREDALE: I suspect that the answer to Lord Leatherland's point is to be found in the interpretation clause which gives "local authority" a very limited meaning indeed. It has the same meaning as in Section 24 of the Caravan Sites and Control of Development Act 1960.
LORD WAKEFIELD OF KENDAL: In view of what has been said—and I think we have had a very useful discussion on this point—I should like to consider this with my noble friends, as I am

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not sure that I appreciate fully all the implications. In the circumstances, I ask leave to withdraw the Amendment, and we can come back to it at a later stage if need be.
Amendment, by leave, withdrawn.
Clause 14 agreed to.
Clause 15 agreed to.
Clause 16 [Interpretation]:
On Question, Whether Clause 16 shall stand part of the Bill?
LORD WAKEFIELD OF KENDAL: There is a small point which I found rather confusing. In the first three words of Clause 16 we find "In the Act…" It clearly does not mean the Caravan Sites and Control of Development Act, 1960, and it would not appear to be this Act, because Clause 17, we see, refers to "This Act". This Bill has been through all its stages in another place, so I cannot think that this is a misprint but that this particular wording "In the Act" is deliberate here. I think your Lordships should be told exactly why those words are inserted in this way. What is the Act to which reference here has been made, because I am afraid I just do not understand? It seems as if, having gone through all its stages in another place, it could not be a misprint, there must be some purpose behind it, and perhaps there is an explanation.
LORD KENNET: It is a misprint.
LORD WADE: May I congratulate the noble Lord on finding a misprint? If that were his only objection to the Bill, I should be delighted.
LORD LEATHERLAND: There having been one satisfied customer in the House, may another satisfied customer rise? My noble friend and I disagreed on an earlier stage over the matter of interpretation. With regard to
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the paragraph at the bottom of page 10 which attempts to explain what the word "gipsies" means, I wonder whether the interpretation now given in the Bill is sufficiently comprehensive:
"persons of nomadic habit of life, whatever their race or origin…"
In my younger days one used to have a lot of people coming to this country who were referred to as Irish navvies. To-day, they would be referred to as constructional and civil engineering workers from the Republic of Ireland. But those people have a nomadic way of life. They come and work on trench digging or reservoir digging in a particular place, they live in huts for a month or so, then they move on to another part of the pipeline and live in some temporary accommodation there. Would they be included in the term "nomadic habit of life"? Is this definition of "gipsy" too comprehensive, too widely inclusive for what my noble friend has in mind?
LORD KENNET: I can only say to my noble friend that it must be for the courts to decide. I could not even start to suggest what proportion of the year spent in a hut as opposed to a caravan would constitute "denomadisation" under the Bill; but if he is worried about the matter, perhaps he could approach the sponsors of the Bill about the possibility of a change of wording. I cannot myself think of anything better.
LORD LEATHERLAND: I thank my noble friend for that. As an old newspaperman, I certainly would not permit "denomadisation" to be printed in any paper for which I was responsible.
Clause 16 agreed to.
Remaining clause agreed to.
House resumed: Bill reported, with the Amendment.
House adjourned at twenty-two minutes before four o'clock.