Sitting of 21 March 1968

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRAYERS
  PRIVATE BUSINESS
    BRIGHTON MARINA BILL (By Order)
    Consideration of Lords Amendment deferred till Tuesday next.
ORAL ANSWERS TO QUESTIONS
  EDUCATION AND SCIENCE

    National Theatre
    Dr. David Kerrasked the Secretary of State for Education and Science when he expects the building of the National Theatre to begin.
    Mr. Straussasked the Secretary of State for Education and Science whether he has now reached agreement on the financial contribution he and the Greater London Council are prepared to make towards the building of the National Theatre; and whether he will make a statement.
    Miss Harvie Andersonasked the Secretary of State for Education and Science on what date he estimates building operations will begin on the site of the National Theatre.
    The Minister of State, Department of Education and Science (Miss Jennie Lee): The Greater London Council has decided to make available up to £3¾ million, but no more, towards the total final cost of building the theatre. The Government have informed the South Bank Theatre Board that they will provide a sum equal to that provided by the G.L.C. The South Bank Theatre Board has also available a sum of £100,000 in Trust Funds which it proposes to use to help in building the theatre. The board has instructed the
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    architect to prepare working drawings within the total expenditure limit of £7.6 million thus available. This process should be completed within the year after which tenders will be asked for.
    Dr. Kerr: I am sure that my right hon. Friend will recognise the welcome which we give to this sign of progress. Will the sum which is now to be available involve any material alteration in the designs presented by Mr. Denys Lasdun? Would my right hon. Friend accept that her continuing campaign to get this matter moving is widely regarded as a most valuable contribution to our living in London and in Britain?
    Miss Lee: My information is that certain changes are to be made by the architect to keep within the expenditure limit, but they do not involve a fundamental alternation in his scheme.
    Mr. Strauss: Is not the offer of the G.L.C. worse than that which was made by the L.C.C., which offered to pay half of whatever the final cost might be, an offer which is now limited? What will happen if, in view of rising costs for building the theatre, the final expenditure is more than is anticipated?
    Miss Lee: On the last part of that question, I think that, with £7½ million and an additional £100,000, if we cannot build a splendid theatre, we all ought to jump in the Thames. I am quite satisfied that we can get ahead. It is true that the G.L.C.'s predecessors had an understanding with me—it was not a written contract—that they would be prepared to pay £3¾ million at point of tender, and the Government the same. But we need not quibble about past arguments; the important thing now is that we have a splendid board which wants to go ahead with the building of the theatre. Most of us would like to see the beginning by next year.
    Miss Harvie Anderson: While welcoming the right hon. Lady's first reply, may I ask whether it would be possible to have visible signs of this theatre rather earlier than that reply suggested?
    Miss Lee: I am conditioned in this by the builders and the architects. I am just thankful that we have overcome a rather defeatist attitude on the part of some people and I do not see why we

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    should not now go ahead without any further loss of time.
    Mr. Channon: Is the right hon. Lady aware that we recognise that this project will not require much expenditure at the moment, that it is widely welcomed in the House and that, rather than quibble about who should pay how much, we are all anxious that they should get on with some work?
    Miss Lee indicated assent.

    Handicapped Pupils (Caning)
    Mr. Winnickasked the Secretary of State for Education and Science if he will now state what has been the result of his consultations to discontinue caning for handicapped pupils.
    The Secretary of State for Education and Science (Mr. Patrick Gordon Walker): These consultations are not yet completed.
    Mr. Winnick: When is a full statement on this matter likely? Is my right hon. Friend aware that, despite the rather silly resolution passed by the Tory majority on the Liverpool Education Committee, I have in no way changed my view—and I hope that he has not changed his—that the caning of handicapped children is wrong and barbaric.
    Mr. Gordon Walker: I made my views on this clear in the House a little while ago. I hope that these consultations, which are now proceeding, and which will continue, indeed, this afternoon, will not now take very long.
    Mr. Fortescue: Disregarding the petty insults of the hon. Member for Croydon, South (Mr. Winnick) about Liverpool City Council, will the right hon. Gentleman, in considering this matter, draw a clear distinction between mentally handicapped children and educationally subnormal children.
    Mr. Gordon Walker: I think it is very difficult to draw that kind of line, but I am in the middle of consultations and I had better not speculate on the merits of the matter.

    Teacher Training and Supply (Advisory Body)
    Mr. Laneasked the Secretary of State for Education and Science when he intends to set up a new advisory body on the training and supply of teachers.
    Mr. Gordon Walker: I am giving close attention to ways in which I can obtain such advice. But I am not yet ready to make a statement.
    Mr. Lane: In the present rather depressing financial climate surrounding the educational system, does not the right hon. Gentleman think that an early and positive decision would have a useful psychological effect?
    Mr. Gordon Walker: An early decision is important, but many bodies are concerned, and I am in the middle of consultations. Nearly all of them have given me their views and I will make up my mind on the best way to proceed.
    Mr. Judd: Has my right hon. Friend considered ways in which responsible student leaders can be drawn into consultations on expenditure on the whole range of higher education and not just about grants?
    Mr. Gordon Walker: The Question is about the training of teachers. My hon. Friend's supplementary question goes a great deal wider than that.

    Students (Grants)
    Mr. Laneasked the Secretary of State for Education and Science if he will undertake a special review of student grants within the next 12 months.
    Captain W. Elliotasked the Secretary of State for Education and Science when he expects the Government's period of restraint of students' grants to end.
    Mr. Gordon Walker: The timing of the next review of student grants will depend on the economic situation.
    Mr. Lane: In view of the responsible attitude of the students' leaders to this issue, will the right hon. Gentleman keep in mind the obvious dangers of a totally negative posture by the Government and the desirability of acting as favourably and sympathetically as possible to the reasonable suggestions made by the students?
    Mr. Gordon Walker: I gladly agree that the student leaders of the N.U.S. have been extremely responsible about this. Indeed, I am still seeing them about the matters which they have put to me. As for the suggestions that have been

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    made to me, as long as the ceiling is preserved, I shall consider them very favourably and carefully.
    Captain W. Elliot: Will the right hon. Gentleman give an assurance that students will not be treated any less favourably than any other section of the community?
    Mr. Cordon Walker indicated assent.
    Dr. Ernest A. Davies: Is my right hon. Friend aware that students in, for example, science faculties must study during the holidays on field courses and that this involves them not only in the added expense of hotel bills but prevents them from earning a living? Will he give careful consideration to this group caught between two forces?
    Mr. Gordon Walker: Yes, Sir. This is, of course, a matter which we must consider. I am aware of the problem, but I think that it would be better if the House were to await the time when I can announce the full policy—that is, when we publish the revised rates of grant.
    Sir E. Boyle: Is not this a reasonable Question, bearing in mind the prospective increases in halls of residence and refectory charges and also the prospective increases in the cost of books? Is the right hon. Gentleman aware that, if he could give a slightly more encouraging answer, it would be of enormous help to the most responsible elements in the student leadership?
    Mr. Gordon Walker: I agree that it is a reasonable Question. On the other hand, I must consider the general economic position. It would be irresponsible of me to say at this stage that within 12 months the Government will look again at these grants. This is a serious and reasonable request and I assure the House that I will go as far as I can to meet it; but I must bear in mind the economic situation.
    Mr. Biffenasked the Secretary of State for Education and Science what is the expected level of student grants for 1968–69; and what percentage increase this represents over similar expenditure in 1963–64.
    Mr. Gordon Walker: I expect to announce the rates of grant to take effect
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    next September when the report of the Brown Advisory Panel is published, which I hope will be in May.
    Mr. Biffen: In the meantime, is the right hon. Gentleman totally unable to give an idea of the likely percentage increase that will be shown? Will it not, in fact, be a very substantial increase and does not this underline the validity of the argument that at least some of the financing of student grants should be transferred to a system of student loans?
    Mr. Gordon Walker: I do not think that that arises on this Question. In any event, it is a much bigger question which needs a great deal of thought. I think that I would be wise to announce my conclusions at the same time that I publish the report of the Brown Panel, which I shall be publishing at the earliest possible moment.
    Mr. Henig: Would my right hon. Friend agree that as important as the question of the overall level of student grants is the question of ironing out some of the anomalies that exist, in particular, the need for some proposals to ensure that in future parents pay their full share of the amount at which they are assessed by the local education authorities?
    Mr. Gordon Walker: I am considering a number of changes and amendments. If I decide to make them I will announce them when I publish the panel's report. The difficulty about trying to compel parents to pay the parental contribution is that one would have to devise sanctions to use if they refused to do so.
    Sir G. Nabarro: Send them to the salt mines.

    Older Pupils
    Mr. Brooksasked the Secretary of State for Education and Science what plans he has to assist the voluntary extension of schooling beyond the statutory minimum leaving age, particularly in those areas where the proportion leaving at 15 years of age is notably above the national average.
    The Minister of State, Department of Education and Science (Miss Alice Bacon): I refer my hon. Friend to the Answer which I gave on 8th February in reply to a Question by the hon. Member for Maidstone (Mr. John Wells).—[Vol. 758; c. 638–9.]
    Mr. Brooks: Is my right hon. Friend yet in a position to indicate whether she can help matters by introducing a single school-leaving date? Will she also consider as a matter of urgency the possibility of introducing pre-apprenticeship vocational courses in the senior forms of secondary modern schools?
    Mr. Speaker: Order. The hon. Member should not anticipate Questions on the Order Paper.
    Miss Bacon: A later Question is down to my right hon. Friend about a single school-leaving date. We will certainly look into the matter raised in the second part of my hon. Friend's supplementary question.

    Advanced Level Mathematics
    Mr. Brooksasked the Secretary of State for Education and Science what steps he will take, in liaison with the appropriate educational bodies, to encourage the teaching of advanced level mathematics to the student of the social sciences or the humanities.
    The Minister of State, Department of Education and Science (Mrs. Shirley Williams): This is a matter relevant to the second recommendation of the recently published Report of the inquiry under the chairmanship of Dr. Dainton into the flow of candidates in science and technology into higher education. My right hon. Friend told my hon. Friend the Member for Stretford (Dr. Ernest A. Davies) on 29th February [Vol. 759, c. 400–1]—that he has invited the bodies concerned to let him have their views on the Recommendations in the Report.
    Mr. Brooks: I thank my hon. Friend for that reply. Would she consider, in view of the obvious shortage of teachers of mathematics, making specific grants to the television authorities concerned with educational programmes for the teaching of mathematics to Q- and A-level students?
    Mrs. Williams: We will consider that suggestion. At present we are also looking into the question of in-service courses for science and mathematics teachers. We are also awaiting the results of the Schools Council's consideration of a possible new approach to sixth form mathematics in relation to changes in the curriculum.

    Part-time Teachers
    Mr. van Straubenzeeasked the Secretary of State for Education and Science what is his policy regarding the employment of part-time teachers in the light of the reduction from 6 per cent. to 31 per cent. per annum in the rate of growth of educational expenditure.
    Mr. Arnold Shawasked the Secretary of State for Education and Science what evidence he has of local authorities cutting their requirements for part-time and full-time teachers for the coming financial year; which authorities are involved; and if he will make a statement.
    Mr. Gordon Walker: I am aware that the Reading Education Authority has announced that it will not take its full quota of qualified teachers and that Hertfordshire, Surrey and the West Riding propose to employ fewer part-time teachers than they would otherwise have done. It is for local authorities to decide how they should spend the money available to them. I have made it plain that I should like them to preserve the training and recruitment of teachers at the expense, if necessary, of other parts of the service.
    Mr. van Straubenzee: Dealing with part-time teachers, to which my Question refers, does not the Secretary of State feel that it is a most unhappy development that several authorities, as he has outlined, are proposing to reduce quotas for part-timers in view of their importance in specialised subjects and with immigrants?
    Mr. Gordon Walker: Part-time teachers are off-quota teachers, but I agree that it is a great pity that a small number of authorities have acted in this way. The changes which they make will have only a marginal effect, but the importance of the recruitment of teachers should remain a top priority.
    Sir E. Boyle: Is not this very disturbing news that the right hon. Gentleman has given, since any fall-off in recruitment could so easily affect the quality of entry into colleges of education? Will he do everything possible to publicise the advice that he has just given to the House?
    Mr. Gordon Walker: Yes, Sir. I am happy to have this opportunity to publicise it again. I have told all local

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    education authorities my views in this matter. If it were to spread it would indeed be serious, but I do not think that we have yet reached that stage. I am glad of this opportunity to reiterate my view that the recruitment of teachers should be a top priority.

    Science Students (Dainton Report)
    Mr. Hornbyasked the Secretary of State for Education and Science what action he will take on the recommendations of the Dainton Report on the supply of science students.
    Mr. Gordon Walker: I refer the hon. Member to my Answers on 29th February to my hon. Friend the Member for Stretford (Dr. Ernest A. Davies) and on 14th March to my hon. Friend the Member for Birmingham, Perry Barr (Mr. Christopher Price).—[Vol. 759, c. 400–1; Vol. 760, c. 1601–2.]
    Mr. Hornby: Does the right hon. Gentleman agree that the shortage of science-trained people is very serious? Does he also agree that it is urgent to resolve the conflicting views which in many respects have been put forward by the Dainton Report and the Schools Council? Will he make it his personal

    EXPENDITURE ON EDUCATION (INCLUDING SCHOOL MEALS AND MILK) IN GREAT BRITAIN AS A PERCENTAGE OF TOTAL PUBLIC EXPENDITURE (EXCLUDING THE NATIONALISED INDUSTRIES ETC., DEBT INTEREST INVESTMENT GRANTS, SELECTIVE EMPLOYMENT TAX, ADDITIONAL PAYMENTS AND REGIONAL EMPLOYMENT PREMIUMS)

    1964–65

    1965–66

    1966–67

    1967–68

    1968–69

    1969–70

    14·6

    14·7

    15·2

    14·2

    14·2

    14·6

    Notes:
    1. Comparable figures for current expenditure alone are not readily available.
    2. The figure for 1966–67 is provisional and those for 1967–68 and later years are estimated.
    3. The Government have not yet taken decisions on expenditure in 1970–71 and 1971–72.
    Captain W. Elliotasked the Secretary of State for Education and Science what is his estimate of the annual rate of growth of public expenditure on education required to maintain present educational standards.
    Mr. Gordon Walker: I expect public expenditure on education in Great Britain to increase by about 7½ per cent. between 1967–68 and 1969–70. This should be sufficient to maintain present standards and, in some cases, to improve them.
    Captain Elliot: As I understand it, that does not answer the Question. I asked by what amount expenditure on
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    responsibility to resolve, and pronounce upon, these conflicting views at the earliest opportunity?
    Mr. Gordon Walker: I agree that the relative decline in science students is a serious one. I think that the publication of the Dainton Report and the general agreement in the whole education sphere that this problem must be tackled will enable it to be solved. I do not think that it is for me to plunge into disputes of this kind and try to resolve them, but I know that the Schools Council, the vice-chancellors and others are looking at this matter all over again; and I hope that a generally agreed solution will emerge.

    Education (Expenditure)
    Mr. Hornbyasked the Secretary of State for Education and Science what share of total public current expenditure in Great Britain has been taken by education in each of the last four years; and what is the Government's estimate for the next four years.
    Mr. Gordon Walker: The Answer contains a number of figures and I will, with permission, circulate a table in the OFFICIAL REPORT.
    Following is the table:
    education must be raised to take account of rising prices.
    Mr. Gordon Walker: That was not the Question. It was, "to maintain present educational standards", and I answered that Question.
    Sir E. Boyle: But, with regard to the initial Answer, does not the right hon. Gentleman's answer to my hon. Friend the Member for Wokingham (Mr. van Straubenzee) this afternon show the real risk to educational standards implicit in the Government's policy on the rate support grant?
    Mr. Gordon Walker: Of course, when we must make savings of this kind—and I take it that the right hon. Gentleman agrees that we must make savings to make devaluation work—there are some unfortunate consequences, though I do not think that they are nearly as grave as he and one or two others suggest.

    Sadler's Wells Opera Company
    Mr. Channonasked the Secretary of State for Education and Science, what consultations he has had with the Arts Council about the rehousing of the Sadler's Wells Opera Company.
    Miss Jennie Lee: I have been keeping in close touch with the negotiations for a possible move to the Coliseum which have been going on between the Arts Council, the Greater London Council, Sadler's Wells and the owners of the Coliseum. Discussions are now in progress between the owners and the present tenants; I very much hope that the outcome will be satisfactory.
    Mr. Channon: Is the hon. Lady aware that everyone hopes that the outcome will be satisfacory? Will she be good enough to keep us informed about progress?
    Miss Lee: Yes, Sir.
    Mr. Henig: Will my hon. Friend bear in mind the fact that the major concern of some people is the amount of touring that the Sadler's Wells Company is able to do? Will she bear this in mind in future negotiations?
    Miss Lee: Certainly. The Scottish director of Sadler's Wells paid a special visit to London because he is so eager that we should get this larger theatre which would have particular importance particularly from the point of view of touring.

    Public Lending Right (Arts Council Report)
    Mr. Channonasked the Secretary of State for Education and Science what action he will take on the Arts Council's Report on Public Lending Right.
    Miss Jennie Lee: The Arts Council Report is being carefully studied but a number of complex points have still to be clarified.
    Mr. Channon: Is the right hon. Lady aware that the Report has been out for a year now? Will she please try to come to some conclusion about it in the reasonably near future, and inform the House when she has done so?
    Miss Lee: I am most anxious to come to a conclusion that would meet the legitimate claims of authors but the problem is complex because authors, publishers, the Library Association, the public and the Chancellor—all these various interests—have to be reconciled.

    Regional Arts Associations (Finance)
    Mr. Allasonasked the Secretary of State for Education and Science what financial help the Arts Council gives towards the administrative costs of regional arts associations.
    Miss Jennie Lee: In 1967–68 the South Western Arts Association have received £5,000, and the Midlands Arts Association £3,000 for their administrative costs. Arts Council grants to the other regional arts association are related to the overall programme of the association and do not contain an identifiable element for administration.
    Mr. Allason: What happens if a fresh regional arts association wants to get started? Can it apply to the Arts Council for a grant? Should it go to the local authority? How does it get started?
    Miss Lee: The best advice I could give is to go to the Arts Council, because circumstances and activities vary from one part of the country to another. The Arts Council gives every possible help and advice.
    Mr. Blenkinsop: I welcome very much what my right hon. Friend has done in this field, but could she still encourage the Arts Council to give special attention to the problem of development areas? Will she give help where new areas are taken into the regional council field?
    Miss Lee: Yes. We want to give the maximum independence and opportunity at regional level, but we cannot invent creative persons in these fields. A great deal depends on having a good receiving end.

    Arts Administrators (Training Course)
    Mr. Allasonasked the Secretary of State for Education and Science what help he is giving to finance the secondment of trainee arts administrators to regional arts associations for practical experience and training.
    Miss Jennie Lee: The Arts Council is contributing to the costs of the first course for arts administrators which started in September last year at the Polytechnic, Regent Street. It is likely that the students will be attached for a few weeks at the end of the course to regional organisations, including arts associations, to gain practical experience, but details are not yet settled.
    Mr. Allason: Is the right hon. Lady satisfied that a few weeks is adequate? Should not these arts administrators receive much longer training? Should they not have months or even a year in the field in order to learn the job, and be supported during that time?
    Miss Lee: I agree with the hon. Member. That is also the view of the Arts Council, but this is a new development which is in the experimental stage. I am anxious to see that they are adequately trained both in the theory and in administration.

    Nottingham Theatre Board
    Dame Irene Wardasked the Secretary of State for Education and Science what consultations he has with the Arts Council about the Nottingham Theatre Board; and if he will make a statement.
    Miss Jennie Lee: I have received letters about the Nottingham Playhouse controversy and have discussed these with the Chairman of the Arts Council. The Council does not seek to interfere with local autonomy. It is, however, considering whether it would be helpful to issue some general guidance about the composition of theatre boards and their relationship with other bodies.
    Dame Irene Ward: In view of the fact that the Arts Council spoke with two voices over Nottingham Playhouse, resulting I am afraid in the departure of Mr. Neville which was greatly regretted, may I have an assurance from the right
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    hon. Lady that the views of those concerned with the Nottingham Playhouse will be properly and adequately considered, and that proper guidance, advice and help will be given?
    Miss Lee: All I can answer is that the Chairman of the Arts Council was good enough to speak to me when this controversy was beginning. We were delighted at that point to know that Mr. John Neville had been asked to withdraw his resignation. It would have been quite improper for the Arts Council, and still more for me, to intervene directly, but once the invitation to withdraw was made we were certainly extremely pleased about it. I am very sorry that afterwards the situation developed so badly.
    Mr. Gardner: Is my right hon. Friend aware that her Answer to the hon. Lady for Tynemouth (Dame Irene Ward) is very welcome indeed? When discussing these matters with the Arts Council, will she consider whether some advice can be given on the question of whether or not playgoers should have some say in the administration of the theatre?
    Miss Lee: The amount of public interest—and proper interest—in this subject means that the Arts Council is trying to do a very hard job. It is trying to refrain from intervening in areas of local autonomy while at the same time seeing that the interests of playgoers and everyone concerned are properly looked after.
    Mr. Channon: Is the right hon. Lady aware that there has been much public concern about this very sad controversy? Is she also aware that it would be very much in the interests of everyone if the Arts Council could give some general guidance about theatre hoards? Although everyone agrees that they must not interfere with local autonomy, we are sure that they can find some way to pursue this difficult path.
    Miss Lee: I am sure that they will pay attention to that.

    Educational Building Work (Statistics)
    Mr. van Straubenzeeasked the Secretary of State for Education and Science why his Department figures of £35·8 million, £35·3 million and £42·2 million for the value of educational building work completed in England and

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    Wales in each of the first three quarters of 1967 differ from those contained in the Monthly Digest of Statistics issued by the Central Statistical Office.
    Miss Bacon: The figures in the Digest of Statistics give the value of those projects which were completed in the periods in question while the answers to the questions of the hon. Member gave the value of work carried out on all projects, whether or not they were finished during these periods.
    Mr. van Straubenzee: In that case, can the right hon. Lady kindly explain why in every preceding year, certainly for the last five years, the two sets of figures to which I have drawn her attention have coincided?
    Miss Bacon: I could not answer that question without notice. I should, however, like to thank the hon. Member for one thing and I feel that I should explain this to him The fact that he asked this Question meant that we looked more closely at the figures in the January Digest of Statistics. We found that they were not complete because they did not include minor works and Youth Service projects, which meant that we had done more work than the January figures suggested.

    New Schools (Dining Accommodation)
    Mr. Marksasked the Secretary of State for Education and Science to what extent is an estimate made of the proportion of children staying at school for dinner in planning the design of new schools.
    Miss Bacon: In all new school projects the local education authority is required to forecast the number of children staying for dinner, and to provide accommodation accordingly.
    Mr. Marks: Is my right hon. Friend aware that there is concern that this figure may be under-estimated in certain districts? Does she accept that there are difficulties in new primary schools caused by the use of teaching space for school meals? Will she examine this aspect?
    Miss Bacon: The normal cost limits for schools are intended to allow for kitchen and dining accommodation for up to 80 per cent. of the pupils. If we
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    think there will be a need for anything further than the 80 per cent., we try wherever possible to allow for this.

    Single School-leaving Date
    Mr. Marksasked the Secretary of State for Education and Science what discussions he has had with the appropriate educational organisations on the question of the single school-leaving date; and whether he will make a statement.
    Mr. Longdenasked the Secretary of State for Education and Science when he will introduce legislation to ensure that, as from the next convenient date, all pupils in maintained secondary schools leave at the end of the summer term whatever the date of their birth, thus ensuring that all have at least four years in a secondary school.
    Mr. Gordon Walker: As I said in reply to a Question by my hon. Friend the Member for Southampton, Test (Mr. R. C. Mitchell), on 7th February, I am considering this. I am not yet in a position to make any statement.—[Vol. 758, c. 172–3.]
    Mr. Marks: I am grateful to my right hon. Friend for that reply. Could he say whether any educational or industrial organisations have expressed objections to this?
    Mr. Gordon Walker: I do not think so. I think I am right in saying that education authorities which so far have given me their views are in favour and I do not think I have had any representations from industrial organisations.
    Mr. Longden: Would it be a better arrangement that pupils should leave at the end of the summer term which followed their 15th birthday?
    Mr. Gordon Walker: That is a possibility, but it is very difficult to have different ages, because employers have to be careful not to break the law. They must not employ people who should be at school. Although I shall look at this possibility, it is difficult to work out.
    Mr. Arnold Shaw: May I press my right hon. Friend on the question of the single school-leaving date? Would he not agree that this in some way would mitigate the postponing of the raising of the school-leaving age?
    Mr. Gordon Walker: That may well be so. The main thing is to consider it in terms of the educational advantages, which are very considerable.
    Sir E. Boyle: With regard to the first supplementary answer, surely it is not expecting too much of the right hon. Gentleman that he should know the views of the educational and industrial organisations which he has consulted? He really should know. Is not the time soon approaching when he should make up his mind on this matter, for which there has been pressure in the educational world since the end of last year?
    Mr. Gordon Walker: The right hon. Gentleman has got it wrong. I have not yet consulted those organisations; some of them have volunteered views. There are a number of Departmental considerations which must be reconciled in the matter before we can embark on consultations. I have not started consultations, and that is why I am not fully aware of the position.

    Works of Art (Export Licences)
    Mr. A. Royleasked the Secretary of State for Education and Science if, in view of the fact that by the terms of the Government's order raising the export licence value limit hundreds of national treasures ceased overnight to be national treasures because they are not expensive enough, he will lower the value limit for export licences for works of art from £2,000 to £1,000; and if he will make a statement.
    Miss Jennie Lee: The present arrangements are working as satisfactorily as anything can be expected to in this imperfect world. The hon. Member may be reassured to know that in 1965–66 only three objections were raised by the expert advisers to the export of works of art or objects worth less than £2,000.
    Mr. Royle: Will the right hon. Lady look at this again? Is she aware that the policies of the present Government have already caused a major brain drain from this country and that unless she reconsiders her present ill-advised policy regarding works of art there will inevitably be a major drain of national treasures from this country over the next few years?
    Miss Lee: To answer the Question on the Order Paper, changes in the value of money mean that we are not endangering more works of art than before. We all regret it when anything of value leaves the country, but a Government must keep in mind that while we want to retain our own treasures London is also a very great international art centre.
    Mr. Strauss: Will my right hon. Friend press my right hon. Friend the President of the Board of Trade to accept the request of the Museums Association that rare archaeological treasures which may not have much commercial value should be preserved in this country?
    Miss Lee: I think that there is no dispute about any of those matters. We very much want those things to happen, but we cannot have 100 per cent. results and still have London the centre it is.
    Mr. Royce: On a point of order. In view of the unsatisfactory nature of the reply, I beg to give notice that I will raise the matter on the Adjournment at the earliest possible opportunity.

    School Buildings, Wales
    Mr. Gwynfor Evansasked the Secretary of State for Education and Science (1) what plans he has to bring school buildings in Wales up to the standards obtaining in England;
    (2) in view of the fact that only 40 per cent. of the pupils in the schools of Wales are educated in buildings built since 1945 as compared with 60 per cent. in England, what steps he now intends to take to bring the Welsh proportion up to the English level.
    Miss Bacon: It is our intention that all school premises, in Wales as in England, should be brought up to the standards laid down by the Department as quickly as the resources available for school building allow.
    Mr. Evans: Is the right hon. Lady aware that only 17 per cent. of the pupils in Welsh-medium and bilingual schools are educated in buildings built since the war, as compared with the 60 per cent. of pupils in England in new buildings? Will she end this discrimination against Wales and, as a start, stop the proposed cuts in building in Wales?
    Miss Bacon: As the hon. Gentleman probably knows, ever since the war successive Governments have had to give priority to those areas where children would have had no schools to go to, where there are new populations, rather than to replacements, so that replacements have not gone ahead as quickly as we should like. Nevertheless, the total allocations for Wales were increased from £3 million annually in 1961–62 to £7 million in 1967–68.
    Mr. Ronald Atkins: Is my right hon. Friend aware that the figures for Wales are very similar to those for substandard schools in the older industrial areas of England?
    Miss Bacon: I am well aware of that, and that is why I stressed that we should have to look at some of the schools in England and in Wales, because I know that there are substandard schools in all parts of the country.

    Secondary School Children (Nutrition Courses)
    Dr. David Kerrasked the Secretary of State for Education and Science whether he will take steps to encourage courses in nutrition for all children of secondary school age.
    The Under-Secretary of State for Education and Science (Mr. Denis Howell): This is a matter for the local education authorities and the schools, but the study of nutrition normally forms part of courses in biology and is the basis of the syllabus for all home economics courses in secondary schools. The Department's pamphlets "Health in Education" and "Health Education" both contain suggestions on teaching the subject as part of the pupil's normal course. Nutrition also features in the Department's short courses for teachers on health in education.
    Dr. Kerr: Does not my hon. Friend conceive that perhaps something should be done to offset the damage to children's attitudes towards nutrition caused by the Government's cancellation of the secondary schools free milk service? Has he considered whether the cost of providing the nutritional course would exceed or be less than the fiddling amount saved by the Government's policy?
    Mr. Howell: I do not think that the amount saved by cuts in secondary school milk can be described in the terms my hon. Friend suggested. That was not the view of its critics. We much prefer the great and vigorous campaign my right hon. Friend has conducted to get a take-up of free school meals by children living in poverty. I am happy to tell the House that in the past 12 months we have found 180,000 children who now have free school meals as a result of that campaign.

    University Places, Scotland
    Mr. Edward M. Taylorasked the Secretary of State for Education and Science how many additional university places will be provided in Scotland over the next five years; and what percentage increase this represents.
    Mrs. Shirley Williams: The block grant for Scottish universities for the quinquennium for 1967–68 to 1971–72 assumes that student numbers will rise by about 6,500. This is an increase of nearly 22 per cent. on numbers in 1966–67.
    Mr. Taylor: Is the hon. Lady aware that at present many young people with the full basic qualification cannot obtain university entrance? Does she feel that the 22 per cent. increase will be enough to cope with the demand? Has she closed her mind entirely to the possibility of a further new university in Scotland?
    Mrs. Williams: The rate of expansion is still being maintained at a very high level. I would point out to the hon. Gentleman, who I know feels very strongly about these things, that after taking into account all movements of students to and fro across the Border the position is that 8·8 per cent. of Scottish 18-year-olds go to university compared with 5·7 per cent. in England and Wales.
    Mr. Speaker: Dr. Miller.
    Mrs. Ewing rose—
    Mr. Speaker: Order. No one has a prescriptive right to address the House. Dr. Miller.
    Dr. Miller: Will my hon. Friend push for a position in which every person in Scotland as well as in England with the

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    necessary qualifications for entry to a university receives a university place?
    Mrs. Williams: That is very nearly the position for science and technology, and due to the University Grants Committee's policy of increasing the expansion of places for arts and social science students we shall approach rather more closely to that ideal.
    Mrs. Ewing rose—
    Sir G. Nabarro: Speak for England, Winnie!
    Mrs. Ewing: Will the hon. Lady take into account in all her decision-making that prospective students in Scotland feel that they are in a rat race for places, and that they have about five months of total uncertainty during which they feel that a place will not be provided for them and that they might miss out in the race?
    Mrs. Williams: This is not unique to Scottish students, as the hon. Lady will know. It would be helpful if all universities were full members of the U.C.C.A.—the Admissions Council. There are one or two which still need to belong.

    National Youth Theatre
    Dame Irene Wardasked the Secretary of State for Education and Science if he will make a further statement following the discussions with the Arts Council concerning the future of the National Youth Theatre.
    Miss Jennie Lee: At the end of November a deputation from the National Youth Theatre visited the Arts Council. The idea of a permanent centre at Camden was discussed, and the Chairman of the Arts Council undertook to write to the Borough Authority commending the National Youth Theatre to it on the grounds of the social importance of its work. He could not however offer to help the Theatre with its proposal to add a professional company to the work it is already doing.
    Dame Irene Ward: I thank the right hon. Lady. Will she bear in mind that it is very important for youth to have realistic objectives? Will she therefore continue to press the Arts Council to give consideration to this matter?
    Miss Lee: I entirely agree with the end which the hon. Lady wishes to achieve. I hope that our youth centres—and they receive £5,500 from the Youth Service side of the Department—will encourage drama groups, but it is not the specific job of the Arts Council as such to do this. I hope that the local authorities, hon. Members and everyone else will give them every possible encouragement. The Chairman of the Arts Council has stressed the great importance of this work.
    Mr. Longden: Does not the right hon. Lady agree that it is a pity that the National Theatre, the National Youth Theatre and Sadlers Wells should all be in London? Would it not be a good thing to send them to Edinburgh?
    Miss Lee: As a Scot, I want Edinburgh to have its own opera house, national theatre and youth theatre but I do not think that we should play "beggar-my-neighbour".

    Climatic Exposure (Research)
    Mr. Peter Millsasked the Secretary of State for Education and Science what steps he is taking to encourage research on the problem of climatic exposure, in view of recent tragedies at sea and elsewhere.
    Mrs. Shirley Williams: A considerable amount of research in this field is already being undertaken by the Medical Research Council and other bodies. Those concerned are very conscious of the importance of this work. I do not think that further encouragement is necessary.
    Mr. Mills: In view of the disturbing lack of knowledge on this subject and the methods which are frequently wrong when there is trouble, will the hon. Lady look again at this and see that money is spent on this very important subject if she really is interested in saving life at sea and on Dartmoor and other places?
    Mrs. Williams: The hon. Gentleman is right to be so concerned. But the Environmental Physiology Research Unit is doing work on the reaction of human physiology to extreme climatic conditions and the British Standards Institution and the Royal Naval Personnel Research Committee are both working

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    on the question of protective clothing. But all the scientific research in the world is beside the point if advantage is not taken fully of the discoveries made.

    Research Fellows, Europe (C.S.T. Fund)
    Sir A. V. Harveyasked the Secretary of State for Education and Science if he is aware of the problem confronting research fellows studying on the continent of Europe who find they cannot live on their existing stipends due to devaluation; and what increases will be allowed to these individuals to meet the situation.
    Mrs. Shirley Williams: Yes, Sir, I am aware of the problem. The fellows have already received increases of up to 11 per cent., depending on the country in which they are studying.
    Sir A. V. Harvey: Is the hon. Lady aware that the Trustees—I speak as one—of the Fellowship are confronted with the problem of putting each application for exchange control individually? These men, who will bring back knowledge to Britain, are living on narrow limits on the Continent, where their costs have risen by 16 per cent. Will she be more reasonable in meeting the problem?
    Mrs. Williams: The increases have varied because the impact of devaluation has had different consequences in different countries. For example, Denmark has partially devalued. I will certainly look at the first point raised by the hon. Gentleman.

    Cancer Research
    Dr. Millerasked the Secretary of State for Education and Science how much money was spent on cancer research in the United Kingdom in the last three years; and if he will make a statement on the latest position on the possibility of a break-through in the disease with reference to aetiology, early diagnosis and treatment.
    Mrs. Shirley Williams: Estimated direct expenditure by the Medical Research Council was £1·178 million in 1965–66, £1270 million in 1966–67 and will be £1·433 million in the current year. No estimate can be provided of expenditure in universities, medical schools and hospitals, or from private funds through
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    voluntary bodies. Nor do the figures include anything for basic research, much of which may prove to have an important bearing on the problems of cancer.
    Steady progress continues to be made on a wide front and twenty M.R.C. research establishments are doing work in this field. But it would be misleading to speak of a "break-through" and impracticable to attempt a summary of the present position of which account is given in the medical and scientific journals.
    Dr. Miller: I thank my hon. Friend. Is she aware that this disease is one of the two groups which might be called the scourge of the twentieth century? While not wishing to decry such operations as heart transplants, may I ask my hon. Friend to give encouragement to any experiment likely to lead to a breakthrough in this research?
    Mrs. Williams: My hon. Friend's interest in this is well known and I assure him that the range of studies is very wide indeed, as a list of the Research Council's establishments involved would suggest.
    Mr. Speaker: Mr. Gardner—Question No. 38.
    Mr. Arnold Shaw: On a point of order, Mr. Speaker. I understand that my Question No. 37 was taken with Question No. 11. The only similarity I see is the mention of part-time teachers. I am wondering why those Questions were taken together.
    Mr. Speaker: That is a matter for the Minister. The hon. Gentleman had his opportunity to ask a supplementary question.

    Pre-School Play Groups
    Mr. Gardnerasked the Secretary of State for Education and Science if he will issue a circular giving further advice to local education authorities on assistance to pre-school play groups.
    Miss Bacon: No, Sir. It is within the discretion of local education authorities to decide how far they can offer practical help to pre-school play groups.
    Mr. Gardner: Is my right hon. Friend aware that most local authorities refuse

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    to give assistance to play group organisations? In providing for a national plan for the training of voluntary helpers, will my right hon. Friend accept that, for little money, a great deal could be done to help these voluntary workers? Will she try and ginger local authorities up a bit?
    Miss Bacon: I hope local authorities will take action on this. For a limited period my Department has agreed to pay grants to the Pre-School Play Groups Association and the Save-the-Children Fund towards their headquarters expenses in this respect.

  INDUSTRIAL PRODUCTION
  Mr. John Fraserasked the Prime Minister if, in view of his decision to be concerned directly in the work of the Department of Economic Affairs, he will publicise and encourage showcase plants, firms and industries which will illustrate to employees and the nation the advantages to be gained from increased productivity, investment, exporting, price competitiveness, use of science and other factors beneficial to the economic prosperity of the country.
  The Prime Minister (Mr. Harold Wilson): Yes, Sir. This is already being done by the Departments concerned and by the British Productivity Council.
  Mr. Fraser: I thank my right hon. Friend. Does not he agree that it is important to present opportunities for prosperity in present circumstances in terms which the ordinary man-in-the-street understands and that example is as good as precept?
  The Prime Minister: Yes, Sir. During the period since last August the index of industrial production has started to rise quite sharply, particularly in manufacturing, while the number of unemployed has fallen sharply, particularly in development area regions.
  Mr. Ian Lloyd: How does the Prime Minister reconcile his proposals to meet his hon. Friend's request with the Budget, which directly and perceivably gives no encouragement to any of the factors mentioned in the Question on the Order Paper?
  The Prime Minister: The hon. Gentleman is quite wrong, although I would not wish to prejudge anything he may wish to say in the Budget debate. Industrial production rose by 2·9 per cent. in manufacturing in the last quarter compared with the previous quarter, and there has been a sharp fall in unemployment. That is part at least of the answer to the hon. Gentleman.
  Mr. Heath: The Question on the Order Paper refers to price competitiveness. What does the Prime Minister now calculate to be the rise in the index of retail prices for the rest of the year, including the effects of devaluation, the Budget and the increases in fuel prices, telephone charges and so on?
  The Prime Minister: I cannot now give that estimate. We might have a better idea of it when the discussions with the C.B.I. and the T.U.C. about the prices and incomes policy are complete. The right hon. Gentleman will be aware of the estimates in respect of the additional impact on the cost of living of the Budget and also of the figures already published in respect of increases following the Prices and Incomes Board's Reports.
  Mr. Heath: Leaving aside any question of increases due to wages still to come, the Prime Minister must know what the increase is to be for the rest of the year as a result of devaluation, the increases in prices by public bodies and the Budget tax increases.
  The Prime Minister: Varying estimates have been made—for example, 1·9 per cent. and 0·4 per cent.—of the results of devaluation and other measures. I would prefer to be surer of these figures following those consultations.

  RHODESIA
  Mr. Bellengerasked the Prime Minister if he will make a further statement on the situation in Rhodesia.
  The Prime Minister: I have, as yet, nothing to add to the Answers I gave to Questions on this subject on 14th March.—[Vol. 760, c. 1617–31.]
  Mr. Bellenger: Can my right hon. Friend say whether there has been a substantial attempt to invade Rhodesia by military force?
  The Prime Minister: Our information on this is necessarily limited but there is no doubt that there has been considerable infiltration from the north by expatriate organisations amongst the Rhodesian African population, and my right hon. Friend will have seen the fairly full accounts of the fighting which has been going on.
  Mr. Thorpe: Can the Prime Minister say whether a report can be made on the meeting of the Commonwealth Sub-Committee on Sanctions?
  The Prime Minister: I understand that talks are going on through the usual channels with a view to an early debate on Rhodesia. It would be possible then for my right hon. Friends to make a fuller statement about all these questions, including not only the Commonwealth Sanctions Committee, which met last Friday, but the pressing and rapidly changing situation in the Security Council.
  Mr. Roebuck: Is it not a fact that "sanction-busting" is still continuing at a tremendous rate, particularly by France, Portugal and Japan? Can we have some effective action to ensure that these people play the game?
  The Prime Minister: There is certainly no evidence that the Governments of France and Japan or Portugal, have been directly associated with this. The extent to which this has been happening has been highly exaggerated but there have been some cases. This must be a matter for the debates now going on in the Security Council.
  Sir C. Osborne: Would the Prime Minister do whatever lies in his power to prevent Rhodesia from being turned into a second Congo?
  The Prime Minister: Yes, that is what we have been trying to do since 11th November, 1965.
  Mr. Whitaker: As violence on an increasing scale is inevitable if democratic evolution in Rhodesia is denied, would not a United Nations peace-keeping force preserve peace and order in Rhodesia?
  The Prime Minister: The whole House deplores the recourse to violence in any form in Rhodesia, including the violence which is occasioned by a direct flouting of the rule of law by those supposed to
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  be in authority there. That still does not make any of us any happier about the extremely serious fighting and death that goes on in consequence. With regard to a peace-keeping force by the United Nations, my hon. Friend will be aware of the various answers given in the past and the difficulties raised, not least in the United Nations, about getting such a force.
  Mr. Maudling: Can the Prime Minister say how much importance he attaches to the initiatives of the Soviet Union, reported recently, and what reaction the Government intend to make to this?
  The Prime Minister: This will obviously give the House a very good impression of the line that the Soviet Union is likely to take at the Security Council. The right hon. Gentleman will be aware that a very considerable proportion of the nations represented at the Security Council take the problem of Rhodesia, and not least the provocation caused by the flouting of the rule of law and the illegal hangings, extremely seriously indeed, and regard it as something which this House cannot ignore.
  Dr. Gray: Has my right hon. Friend made representations to the Government of Algeria on supplies of oil to French companies?
  The Prime Minister: This is an extremely complicated issue because the oil in question comes through Lourenco Marques and a large proportion of it gets to Rhodesia on a little trip round parts of South Africa. The authorities in Mozambique deny any responsibility for supplying to Rhodesia. These are questions that will inevitably come up in the debate at the Security Council.
  Mr. Speaker: Mr. Page—Question No. Q3.
  Mr. Biggs-Davison: On a point of order. Would it not have been in accordance with the normal practice of the House for the Prime Minister to have taken Question No. 14 with Question No. 2? It is on all fours with Question No. 2. What is he afraid of?
  Mr. Speaker: The right hon. Gentleman did not do so.
  The Prime Minister: Further to that point of order. I have been repeatedly

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  criticised from the other side of the House for answering with earlier Questions, Questions which were later on the Order Paper. It must be a matter of judgment in each case of what is to the greatest convenience to the House. I was also aware that we would be debating Rhodesia in the near future.

  UNEMPLOYMENT
  Mr. Derek Pageasked the Prime Minister if he is satisfied with the coordination of the Ministerial Departments concerned in dealing with the problem of unemployment; and if he will make a statement.
  The Prime Minister: Yes, Sir. My hon. Friend will have noticed that since August last the numbers of wholly unemployed in the United Kingdom, on a seasonally adjusted basis, have fallen by 57,000, two-thirds of this in development area regions.
  Mr. Page: Does my right hon. Friend consider that it is socially just to take taxes and to divert industry from the abysmally low-earning areas of East Anglia in order to send help to the development areas? Is it not time that we rethought our priorities with regard to regional development?
  The Prime Minister: My hon. Friend will be aware that despite the anxieties and problems of a number of grey areas, and parts of East Anglia are very much involved here, the primary problem we have to solve in distributing industry is the still threateningly high unemployment rate in the development areas. In these circumstances, I hope that my hon. Friend will feel that it is right to concentrate on those first. We shall have the report of the Hunt Committee later in the year. As to East Anglia, my hon. Friend will be aware that our policy is to be as helpful as we can in the matter of i.d.c.s for industrial development there.
  Mr. Prior: Is the Prime Minister aware of the very serious problem of the shipyards in East Anglia, which lie outside development districts? Will he have a special look at that problem, as they feel themselves to be at a great disadvantage compared with the rest of industry lying within the development districts?
  The Prime Minister: I am aware of the problem. It arises perhaps more than anything in respect of the regional employment premium, and there are one or two other shipyards in other parts of the country also outside development areas. We are aware of the problem, but we must wait for the report of the Hunt Committee before we can see whether there is a special way of dealing with it.
  Dr. John Dunwoody: While I welcome the reduction in the unemployment figures announced this afternoon, may I ask whether my right hon. Friend would not agree that there is still a very real and difficult problem in certain more isolated parts of the development areas? Would he do all that he can to coordinate Ministerial activities in solving this problem?
  The Prime Minister: Yes, Sir. As for the South-West, which is a relatively new development area, I am particularly alive to the special problems there. With regard to the first part of my hon. Friend's question, he will be very glad to hear that the authoritative forecasts for the peak of unemployment this winter reaching 750,000 or 1 million—and the right hon. Gentlemen opposite said with total confidence that it would reach 750,000—have not materialised, and that this afternoon's figures show that the March figure—usually one of the peak figures—was below 600,000.
  Earl of Dalkeith: Could the Prime Minister say what plans he is making for his own unemployment, bearing in mind that certain members of the Cabinet seem to be becoming rather browned off?

  OVERSPILL
  Mr. Derek Pageasked the Prime Minister if he is satisfied with the coordination of Ministerial Departments concerned with problems of overspill; and if he will make a statement.
  The Prime Minister: Yes, Sir.
  Mr. Page: Is my right hon Friend aware that there is constant difficulty in co-ordinating the industrial build-up with housing construction in our overspill towns? Will he take steps to see that the flow of industry to towns such as

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  King's Lynn is adequate for the building programme?
  The Prime Minister: I am aware that this problem faces a number of areas. The point was raised not long ago by the hon. Member for Sudbury and Woodbridge (Mr. Stainton) in a different context, in areas which have an overspill, particularly from London, and where housing developments have been running ahead of factory developments. I referred to the position about i.d.c.s, but my hon. Friend will be aware that during the 18 months following the measures of July, 1967, the amount of new industrial development has been somewhat restricted. It is now picking up very fast.
  Sir D. Renton: Is the Prime Minister aware that at Huntingdon, where there has been large-scale development under the Town Development Act, the health and educational services have not kept pace with the growing increase in the population through town development? Is he aware that it is essential that these services should keep pace? Will he do something to ensure that they do?
  The Prime Minister: I am aware of the right hon. and learned Gentleman's interest in this, and, speaking as a Member for an overspill area, coping with very big movements out of Liverpool, I know of some of the problems taking place with health, education and other services. This is certainly one of the matters requiring a very high priority in interdepartmental considerations.
  Mr. John Fraser: Will my right hon. Friend recognise, on the other side of the coin, that those in conurbations like London, who have the greatest need to find housing in new towns, also have employments which make it difficult for them to move to such areas? Would he look at this?
  The Prime Minister: While recognising the problem affecting development in new towns, in overspill towns as well as in the development areas, it is extremely difficult to maintain a proper balance here between this and new industrial development. I hope that my hon. Friend will feel that it is right to put our main weight so far into development areas. I do not for one moment underrate the importance of what he has said.
  Mr. Peyton: Is the Prime Minister aware that if all Departments, including No. 10 Downing Street, were to overspill their present tenants—[Interruption.]—this would be a source of great pleasure, delight and relief to the entire nation?

  NORTH ATLANTIC FREE TRADE AREA (FEASIBILITY STUDY)
  Mr. Martenasked the Prime Minister if he will discuss with the United States President the question of a joint feasibility study of the North Atlantic Free Trade Area proposal, in view of the similar study now being undertaken by the United States of America.
  Mr. Turtonasked the Prime Minister if he will set up a feasibility study on the proposals for an industrial free trade area between the United Kingdom, European Free Trade Association, Australia, New Zealand, Canada and the United States of America.
  The Prime Minister: No, Sir. As the House knows, there is no evidence that a North Atlantic Free Trade Area is a realistic present alternative to membership of the European Economic Community which remains, of course, Her Majesty's Government's prime aim. In these circumstances the diversion of resources to a major feasibility study could not be justified.
  Mr. Marten: Is the Prime Minister aware that the Americans, under Ambassador Roth, are making a study of all the various trading possibilities for American overseas policy? Would he not reconsider this? Does he not think that the Government should make a study of this proposal and publish it in relation to other opportunities which might exist for this country?
  The Prime Minister: My own recent discussions in the United States confirm that there is no reason to think that the United States Government have any ideas or suggestions to make in this direction. Mr. Roth's remarks in his statement to the Congressional Committee on 19th February were in the general context of a very long-term study of future American trade policy as a whole. As far as Her Majesty's Government are concerned,

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  we studied this intensively before announcing our decision to apply for entry into E.E.C. on 2nd May, and all our considerations resulting from that study were presented to the House in the three-day debate which followed.
  Mr. Jay: In view of the bleak atmosphere which prevails in Paris and is likely to prevail for some time, will the British Government now show an initiative and be at least as active as the United States in exploring these ideas?
  The Prime Minister: My right hon. Friend knows that we anticipated the United States in exploring these ideas, hence what I have said about the statements made in the House in the debate last May. I think that a situation of what my right hon. Friend not inappropriately calls bleakness in this context should not of itself be a reason for being driven or panicked into changes which would affect this country's trading relationships for the next hundred years, because that would be the position if we were now pushed into saying that we are not going forward with our application but are looking elsewhere.
  Sir D. Walker-Smith: Was not the Prime Minister taught in earlier years the unwisdom of putting all one's eggs into one basket, particularly when experience shows it to be such a fragile and elusive basket? Cannot the Government, even in this instance only, take the initiative and make a full inquiry into the possibilities of this challenging concept?
  The Prime Minister: I have referred to the inquiries made into this challenging concept which were made when we finally took our decision. Having been well instructed in the subject referred to by the right hon. and learned Gentleman, something else which would be extremely wrong would be, at the first whiff of disappointment, to start rapidly transferring all the eggs from one basket into another basket which was even more fragile.
  Mr. Heffer: Is my right hon. Friend aware that this proposition will be a complete waste of public money, especially in view of the fact that the United States Government are so heavily committed in the Vietnam War, which is very dangerous not only to the economy of that country but to everyone else's?
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  Therefore, are not the Government quite right in rejecting such an unnecessary proposition?
  The Prime Minister: The inquiries and the full study that we made a year ago did not involve a waste of public expenditure. It was right that the Government and the House should be in a position to choose as a long-term proposition where our best interests lay. When I say "long-term" I mean past any period of bleakness in one capital or the duration of the war to which my hon. Friend has referred.
  Mr. Bessell: In view of the statement issued following the important conference held in New York last month attended by representatives of all political parties from Canada, the United States and the United Kingdom, where it was made clear that this concept was not in conflict with the E.E.C., would the Prime Minister not look at the matter again?
  The Prime Minister: I have seen reports of this conference, which was attended by a number of distinguished representatives of this House. However, distinguished though they were, I do not think that they necessarily or in any sense purport to represent the majority view of this House, to judge from the voting on this proposition last May. It is the desire and the intention not only of ourselves but of our friends in Europe so to build up the strength of Europe that we can play a much more significant part both politically and economically in the much wider world structure which I am sure the hon. Gentleman and his friends who went to America have in mind.
  Mr. Shinwell: What possible harm could a feasibility study of this character do? is the Government's reluctance to undertake a study of this kind in any way due to the fear of offending General de Gaulle? After all, is it not very desirable that we should offend the General in this matter?
  The Prime Minister: I am not sure whether my right hon. Friend is putting that forward because of his well-known conviction that he wants us to get into the Common Market and that offending President de Gaulle is the best way to do it. So far as the study for which he asks is concerned, I have said once or

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  twice today that the Government conducted a very thorough inquiry at top Ministerial level, and the results of it were reported to the House. I was not clear in the three-day debate which followed that any very convincing arguments were put from any part of the House to suggest that the conclusions of our study were wrongly conceived.
  Several Hon Members rose—
  Mr. Speaker: Order. Mr. Heath. Business Question.

BUSINESS OF THE HOUSE
Mr. Heath: May I ask the Leader of the House to state the business for next week?
The Lord President of the Council and Leader of the House of Commons (Mr. Richard Crossman): Yes, Sir. The business for next week will be as follows:
MONDAY, 25TH MARCH—Conclusion of the debate on the Budget Resolutions.
Motions on the Rate Support Grant (Increase) (Scotland) Order, on the Bootle (Extension) Order and on the Market Development Scheme (Extension of Period) Order.
Second Reading of the New Towns (Scotland) Bill [Lords], which is a Consolidation Measure.
TUESDAY, 26TH MARCH—Second Reading of the Consolidated Fund (No. 2) Bill.
WEDNESDAY, 27TH MARCH—Remaining stages of the Consolidated Fund (No. 2) Bill, which under Standing Order No. 89 will be formal.
A debate on Rhodesia, which will arise on a Motion for the Adjournment of the House.
Motion on the Teesside (Amendment) Order.
THURSDAY, 28TH MARCH—Motions On the Civil Defence (Revocation) and (Fire Services) Regulations, which it is hoped to dispose of by 8 o'clock.
Second Reading of the Commonwealth Telecommunications Bill [Lords].
Remaining stages of the Consular Relations Bill [Lords] and of the New Towns (Scotland) Bill [Lords].
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FRIDAY, 29TH MARCH—Private Members' Bills.
MONDAY, 1ST APRIL—The business proposed is the remaining stages of the Health Services and Public Health Bill.
At 7 o'clock the Chairman of Ways and Means has set down Opposed Private Business for consideration.
Motion on the Lancaster Port Commission Revision Order.
Mr. Heath: Last week, the Prime Minister undertook to give us the fullest possible information that he could about the Rhodesian situation before the debate, including, if possible, the transcripts of the judgments in the courts. Could the right hon. Gentleman tell us when that White Paper will be available? Secondly, could he ensure that his right hon. Friend the Secretary of State for Commonwealth Affairs makes a statement next week about the position over the Falkland Islands, which is causing great anxiety? Thirdly, could the Prime Minister make a statement about the amalgamation of the Foreign Office and the Commonwealth Affairs Office, which we understand is to take place but about which he has given no information to the House?
Mr. Crossman: With regard to the third point, I will communicate the right hon. Gentleman's request to my right hon. Friend the Prime Minister. As regards the Falkland Islands, I will ask my right hon. Friend the Secretary of State to consider the desirability of a statement. On the right hon. Gentleman's first point, I do not think that it is the intention of the Prime Minister to publish a White Paper on the subject, but I will make sure that what information is available will be published in time for the debate.
Mr. Molloy: In view of the dangerous and far-reaching effects of the war in Vietnam, does not my right hon. Friend think that this House ought now to debate the situation?
Mr. Crossman: Yes. I am aware of the desire on both sides of the House to debate the Vietnam situation, but I cannot see any possibility of doing so in Government time next week. In the course of Tuesday evening and early Wednesday morning, there is, of course, an opportunity for back-bench hon. Members to debate it in their own time.
Mr. Monro: Could the right hon. Gentleman ask his right hon. Friend the Secretary of State for Scotland to make a progress report next week on the repairs following the damage caused by the gales in Scotland?
Mr. Crossman: Certainly I will communicate the hon. Gentleman's desire to my right hon. Friend, but I cannot guarantee that a statement will be forthcoming next week.
Dr. John Dunwoody: In view of today's serious news from the Middle East and in view of Britain's legitimate and considerable interests in the region, could my right hon. Friend assure us that if there is a deterioration in the situation in the Middle East there will be an opportunity for an early debate?
Mr. Crossman: I must be careful about Government time next week. I do not see an opportunity in Government time, but, if there is a dramatic change in the situation, there are other opportunities now in our Standing Orders for making time available.
Mr. Bryan: Now that the Prices and Incomes Board has reported, will the Leader of the House tell us when the Postmaster-General will be announcing the rise in postal charges?
Mr. Crossman: I will put that request to the Postmaster-General, but I cannot give any answer today about it being next week.
Mr. Alexander W. Lyon: Can the Leader of the House say when it will be possible to arrange a debate on aid possibly linked to the U.N.C.T.A.D. Conference which is apparently likely to break down?
Mr. Crossman: There will be opportunities on Tuesday evening for hon. Members to raise issues of this kind on the debate on the Consolidated Fund Bill, which is a regular time for that purpose. I cannot guarantee that we shall have Government time for that in the near future.
Sir F. Bennett: The right hon. Gentleman will have seen reports of the breakdown of the Anglo-Spanish talks on Gibraltar. May we expect a fairly early statement from the Foreign Office confirming or otherwise, with particular re
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ference to what this entails for Gibraltar's immediate constitutional development?
Mr. Crossman: I would not have thought that confirmation of that fact were needed, but I will ask the Foreign Secretary whether he has any information that he wishes to give the House about the circumstances of the breakdown.
Mr. Whitaker: Will my right hon. Friend consider the possibility of a debate on the first Annual Report of the Parliamentary Commissioner?
Mr. Crossman: This is a matter we might well consider. I should like to discuss through the usual channels whether such a debate is desired. We had half a day on the Special Report of the Parliamentary Commissioner, but that would not exclude a debate on the full Annual Report.
Dame Irene Ward: Concerning the Falkland Islands, will the Leader of the House give an assurance that the Government are not considering giving away Scotland and Wales at the behest of the United Nations?
Mr. Crossman: I think, without stretching myself unduly, I can give that assurance.
Mr. Hugh Jenkins: Will my right hon. Friend think again about the question of Government time for a debate on Vietnam? Does he not realise that there is widespread feeling on this side of the House that the Government should reconsider their policy on Vietnam?
Mr. Crossman: Yes. I am very much aware that there is keen desire for a debate on Vietnam. All I said was that I did not see any possibility of having a debate next week.
Sir T. Beamish: Regarding the Falkland Islands, surely it is not good enough for the Leader of the House to say he has considered the desirability of a statement next week. Is he aware that he said this last week and that there are a great many rumours flying around which are very worrying indeed? Can we be promised a statement next week?
Mr. Crossman: I am not sure about a statement. If the hon. and gallant Gentleman will look at the Order Paper he will find that there are Questions down

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to the Foreign Secretary on this subject on Monday, 1st April.
Mr. Moonman: Will the Leader of the House confirm that, because of increasing agitation about the Wilson Report on the Bristol Siddeley inquiry, we will have a debate before Easter?
Mr. Crossman: I have every hope that we shall have time for a debate. I have not yet heard from the Chairman how the Select Committee is getting on, but we have an understanding that it will accelerate its business. I hope that it will complete its researches in time for a debate before Easter.
Mr. Pardoe: Will the Leader of the House promise to arrange for a debate before Easter on the Government's refusal of the recommendations of the South-West Economic Planning Council.
Mr. Crossman: I think that I can give a categoric denial to that suggestion.
Mr. Gardner: In view of the disgraceful attacks on the noble Lord, Lord Caradon, by certain sections of the Conservative Press, will my right hon. Friend undertake to publish, before next Wednesday, the Government's instructions on Rhodesia to our delegation at the United Nations?
Mr. Crossman: I will certainly bear that suggestion in mind.
I should like to add to the answer that I gave to the Leader of the Opposition. I gather that transcripts of the judgments have been conveyed today to the Opposition for transmission to the Leader of the Opposition.
Mr. Biggs-Davison: Is the right hon. Gentleman aware that the desire for a full-dress debate on Vietnam is not confined to one side of the House? Does it not appear that from Thursday to Thursday he is brushing aside these requests? First, he says that it is not suitable for Government time, and then he says that it is not suitable for next week. May we have an early debate in Government time?
Mr. Crossman: I made it clear from the start that I recognised there was a demand from both sides. Members of the Opposition have their own time, and they could provide it if they wished. I
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think that there is a case for a debate in Government time before the Easter Recess, and I am still hopeful of it. But we have a large number of obligations to fulfil in Government time and I cannot give an absolute assurance.
Sir D. Walker-Smith: Concerning the Rhodesian transcripts, did the right hon. Gentleman mean that he was making copies available only to my right hon. Friend the Leader of the Opposition? Is he not aware that other right hon. and hon. Members wish to study these judgments and, if the debate is to be on Wednesday, it is necessary that they have them before the weekend?
Mr. Crossman: That is a wholly reasonable suggestion. I have in fact made arrangements for their transmission to the Opposition Front Bench, but I will try to arrange for copies to be placed in the Library in good time so that all right hon. and hon. Members can profit by them before the debate.
Mr. David Howell: Will the Leader of the House give particularly urgent attention to the point raised by my right hon. Friend the Member for Bexley (Mr. Heath) about the amalgamation of the Foreign Office and the Commonwealth Affairs Office? Is it not extraordinary that such a major change in the Administration should be made without a word of explanation in the House?
Mr. Crossman: I thought that the question I was asked was when it would take place. I will certainly communicate to my right hon. Friend the interests which his announcement has created and the suggestion that it needs to be discussed.
Mr. James Johnson: Coming nearer home, can we be given any indication where in the Government's time-table my right hon. Friend has placed a debate on the future of the fishing industry?
Mr. Crossman: To be candid, I must admit that at present it is not slotted in for the immediate future.
Mr. Gibson-Watt: Will the right hon. Gentleman tell the House when it is the Government's intention to have a debate on the Gittins Report on Primary Education in Wales?
Mr. Crossman: I am aware of the interest of the hon. Gentleman and the importance of the Report. It is one of

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those matters for which time is available for Welsh Members. However, I will consider the possibility of a debate on this in Government time, but I think not before the Easter Recess.
Mr. Gibson-Watt: On a point of order. Might I point out to the Leader of the House that the next meeting of the Welsh Grand Committee will be taken up with agriculture and we shall not have a chance for at least four months to discuss the matter?
Mr. Speaker: Order. One Member, one question.
Sir Ian Orr-Ewing: Does the Leader of the House recall that the Select Committee on Science and Technology reported on nuclear power stations more than six months ago and we were promised an early debate? This report was hastened forward in response to a Government request and no debate has been forthcoming. Will he give some assurance that time will be found?
Mr. Crossman: I am aware of this. This is one of the difficulties about the experimental phase of Specialist Committees. I have been consulting the Minister of Technology, because he has proposals to put before the House. The question was whether we should debate both simultaneously. I should like to consult the Chairman of the Committee, because I am aware that it has been a long time. I still want a debate with the maximum effect. That means at the right time for the Government to say what their policy is as well as for us to hear the Committee's views. If I could discuss that with the Chairman I would be obliged.
Mr. Henry Clark: In view of the Chancellor's rather vague remarks about cigarette coupons in his Budget speech, could we be told when the Government will bring in legislation to abolish cigarette coupons, as the Minister of Health promised? An announcement would help the tobacco industry to plan its policy, even if it does not improve the nation's health.
Mr. Crossman: I can give the assurance that it will not be introduced in next week's Business.
Mr. Roebuck: In view of the great changes which have taken place in public
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opinion and opinion in this House since we last debated the Common Market in May, will my right hon. Friend find time for an early debate on the Common Market?
Mr. Crossman: I will put this down in the list of foreign policy priorities which the House wants. If we are to put down Vietnam, the Common Market and the Middle East—three important subjects—the House will see my difficulty in finding time for everything.
Mr. Onslow: If, as is threatened, London sees a repetition this weekend of last week's disgraceful and riotous demonstration, may we have an early statement and full debate so that we may know next week what the Home Secretary's plans are to maintain order and peace in the streets?
Mr. Crossman: We had better wait and see what happens at the weekend. Meanwhile, I would again remind hon. Gentlemen that there are many hours next Tuesday in which such subjects can suitably be raised.
Mr. Shinwell: Do the Government regard the proposed merger of the Commonwealth Affairs Department and the Foreign Office as a matter entirely within their own discretion without the need to consult the House? Is it not a matter upon which the House should express an opinion?
Mr. Crossman: I shall communicate to my right hon. Friend the Prime Minister the views of my right hon. Friend about the desirability of a debate on this subject.
Mr. Hugh Fraser: As the right hon. Gentleman cannot find time for a debate on the Common Market, may I ask whether the Prime Minister will make a statement before the House adjourns for the Easter Recess on progress recently achieved?
Mr. Crossman: I shall put that suggestion to the Prime Minister.
Mr. Heath: Is the right hon. Gentleman aware that it has long been the tradition that any change in the departmental structure of Whitehall is formally announced to the House of Commons before it is made? What has happened at the moment is that, with the departure

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of the last Foreign Secretary late one night, the Prime Minister apparently told the Press that the two Departments were to be amalgamated, without anybody else having been told. What we are asking is for the Prime Minister to carry out his proper function and tell the House of Commons about the proposed change.
Mr. Crossman: That point of view has been expressed from both sides of the House. I shall communicate it carefully to the Prime Minister, and no doubt he will make a statement if he thinks fit.
Several Hon. Members rose—
Mr. Speaker: Order.

COMPUTER INDUSTRY
The Minister of Technology (Mr. Anthony Wedgwood Benn): With permission, I should like to make a statement about the computer industry.
I am pleased to be able to inform the House that, with the backing of the Government, the commercial and scientific computer businesses of I.C.T. and English Electric Computers are to be brought together into one company to be called International Computers Limited. I.C.L. will be by far the largest company outside the United States of America specialising in commercial and scientific computers. Plessey, a major manufacturer of telecommunications equipment, will participate in the new group, and will also form a joint development company with I.C.L. to study and develop the convergence between computers and communications.
In pursuing our objective of a strong independent British computer industry, and recognising I.C.L.'s need for heavy expenditure on research and development and for securing a strong financial position, the Government propose, subject to the approval of Parliament, to participate in the financing of the new Company's operations to the extent of £17 million over a period of five years.
Of this total amount, the Ministry of Technology has agreed to provide £13½ million over the next four years as grant towards I.C.L.'s research and development expenditure. The remaming£3½
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million is to be subscribed for ordinary shares of £1 each, which will be issued to the Government at par; 2s. per share will be payable on issue, and the balance in 1972. The current market value of these shares substantially exceeds the amount to be subscribed for them. These terms have been designed to make a high proportion of the Government's contribution available as support for the research and development programme chargeable against revenue, while giving the Government a substantial participation in the future prosperity of the Company which this programme is designed to achieve. I have in mind making use of the powers for which the Industrial Expansion Bill makes provision, subject to the enactment of the Bill, and the necessary affirmative Resolution.
As a result of these arrangements the Government will hold initially 10·5 per cent. of the ordinary shares, and the other shares will be held: 53·5 per cent. by the former I.C.T. shareholders, 18 per cent. by English Electric, 18 per cent. by Plessey.
It will be the policy of I.C.L. to continue to manufacture, market and service the present I.C.T. 1900 and English Electric System 4 ranges of computers, with enhancements. It will also sell and service the Elliott 4100 range. The know-how and experience of I.C.T. and of English Electric Computers will be pooled to develop for the 1970s a new range of computer systems, as competitive as any available in the world markets at that time. The new range will be designed to enable both 1900 Series and System 4 users to transfer their work to it without difficulty.
In the light of the Government's intention to place orders for large computer systems, I.C.L.'s research and development programme will include the development of such a system to meet the expected demand at home and overseas.
The Government will have a director on the board of the new company, but do not intend to intervene in the day-to-day management. To safeguard the public interest, the Government and the company will enter into an agreement the text of which, when completed, I will make available to the House. There will be a revision of the existing arrangement between the N.R.D.C. and I.C.T.,

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which will bring forward the repayment of the money advanced by the N.R.D.C.
My right hon. Friend the President of the Board of Trade has indicated that he does not intend to refer the proposed arrangement to the Monopolies Commission. Neither English Electric nor Plessey will enjoy a preferential postion in the supply of components to I.C.L. which will seek its supplies from the most competitive sources.
Mr. David Price: Is the right hon. Gentleman aware that the House will need some time to study his detailed statement before commenting on it and that we would like to have a fairly early opportunity of debating it? I do not think that in his statement he told the House what would be the total capital available to the company. He referred only to the extra working capital to be added.
Mr. Benn: On the latter point, I think it would be better if the hon. Gentleman were to await the publication of the figures, which are very complicated; but they will be made available by the companies later this afternoon.
As to the question of a debate, there will be opportunities for a debate on the affirmative Order which it will be necessary to bring forward under the Industrial Expansion Bill procedure, and there will be opportunities during the later stages of the Bill for the House to discuss it.
Mr. Heath: Is the right hon. Gentleman saying that he has committed the Government and the country to the expenditure of this money on the basis of a Bill which has not passed through Parliament?
Mr. Benn: No. I am not. As my statement made clear, this is subject to the approval of Parliament both for the enactment of the Bill and for the passage of the necessary affirmative Resolution.
Mr. J. T. Price: I believe that many of us on this side welcome the announcement of this new consortium arrangement, in which the Government are a participating partier, in one of the industries of the future, but will my right hon. Friend enlighten me on the status of the original £25 million placed at the disposal of his predecessor in the Ministry of Technology for encouraging the development of the
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computer industry which was administered by his Department? Is this £17 million of public money in addition to the £25 million originally placed at the disposal of our late lamented friend, my right hon. Friend's predecessor, or is it supplementary to it?
Mr. Benn: I think that my hon. Friend may be misunderstanding the £25 million. The N.R.D.C. made available £5 million to I.C.T., of which about £4 million has been taken up and the repayment of which, with interest, will be accelerated under the arrangements which have been concluded tentatively with the three companies. As regards other support for the computer industry, there has been the establishment of the National Computer Centre, the Advanced Computer Techniques Project, the support for university computers, the computer-aided design facilities at Cambridge, and a number of different projects, but they do not add up to £25 million which my hon. Friend mentioned.
Sir G. Nabarro: With regard to the 10½ per cent. equity which the Government propose to hold, a small minority equity, what possible justification can there be for this heavy public expenditure when the whole of this money could have been raised without undue difficulty by 1972 through normal channels on the London Stock Market?
Mr. Benn: The hon. Gentleman is wrong in supposing that this is simply a financial deal. It is not. The discussions between I.C.T. and English Electric have been going on for about three years, and these arrangements were made possible only after some detailed technical discussions in which my Department played a full part last year, and which proved that it was possible to bring I.C.T. and English Electric together in a technical convergence for a new system in 1970. If the hon. Gentleman looks at the statement again, he will see that the heart of it, in the short run, is research and development money which is not available from the City, and this is why my Department is involved.
Mr. Dalyell: I congratulate my right hon. Friend on his action, which will save the computer industry for this side of the Atlantic. Who is to be the Government director, and what part did the I.R.C. play in this operation?
Mr. Benn: I am grateful to my hon. Friend for what he has said, because the credit for this goes to those in my Department and outside who worked very hard to bring it about.
No decision has been made about the Government director. The I.R.C. was kept fully informed, but, for the reason which I gave the hon. Member for Worcestershire, South (Sir G. Nabarro), it was not an appropriate matter for the I.R.C. This was research and development money in effect being converted into an equity.
Mr. Lubbock: Ls the right hon. Gentleman aware that his statement will be widely welcomed as putting the computer industry on a stronger basis to compete with the Americans? Could I ask about the large computer system to be developed by I.C.L. and whether, as has been reported, it will be substantially more powerful than anything the Americans have on offer at present; and whether the Government will place orders for equipment as well as development, and what proportion of the new company's investment programme will be on softwear associated with the new system? Further, is he aware that the Post Office have not yet even begun to understand the need for data transmission facilities associated with present generation computers, and will the new company be able to make the strongest representations to the Post Office on the matter?
Mr. Benn: This is really a matter for my right hon. Friend the Postmaster-General, but the data transmission services of the Post Office have been developed, and I have no doubt will be developed, on a scale adequate to cope with the new requirements. So far as the Government need for computers is concerned, over the last seven years the computer power available to Government has been doubling every 15 months; and this is an enormous amount of growth which provides a sound market foundation on which the new company expects to develop itself.
As far as the new system is concerned in the 1970s, this will be brought about by the convergence of the two systems now used and sold by the companies, which will continue to be used and sold. As far as the large computer project is concerned, there have been a number of discussions with I.C.T., but now that the
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merger is to take place I think it is right that they should take advantage of what will become available through the addition of English Electric. This will be part of the same process.
Mr. John Smith: Why are the Government to have partly paid shares and not fully paid shares?
Mr. Benn: The reason for these arrangements, which are extremely complicated, is that it was necessary to provide substantial sums of money for research and development purposes during the period when the new company will be developing its new computer system and by the arrangements which have been reached after long and detailed negotiations in which we have had access to independent expert advice. The arrangements suggested under which 2s. will be paid in the first instance and the remaining 18s. will be paid later, were thought to be the right way of proceeding. In addition, I should add that there will not be dividends accruing to the Government shares for the first two years and, even after that, there will not be a full divident payment until the full payment has been made for shares at par.
Mr. Maudling: Could the right hon. Gentleman say to what extent the new organisation will represent a monopoly in the normally accepted meaning of that word?
Mr. Benn: It will be a concentration of the business and scientific computers in this country, but, of course, with I.B.M. at 100 the new corporation will be only five. It is still very small as compared with the large international computer companies. In fact, I.B.M., Univac, Honeywell and Control Data are still bigger. Then we shall have I.C.L., but it is significant that the new I.C.L. will have a bigger computer capability than the Radio Corporation of America, American General Electric, Burroughs or National Cash Register. We have now succeeded—and this is a product of work done over many years—in ensuring that this country remains in the computer industry.
Sir J. Langford Holt: Has the right hon. Gentleman's attention been drawn to the fact that there was a considerable and exceptional rise in the value of I.C.T. shares on the Stock Exchange this morning, which would seem to indicate that at

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least somebody was aware of what was taking place before the House of Commons?
Mr. Benn: The problem of security has caused a great deal of anxiety to myself and those negotiating on the part of the Ministry of Technology and the Government. I only signed this on Tuesday last and two days had to be allowed for the printing of certain documents; so that Thursday was the first day on which it could be announced. The security arrangements today have been extremely close on our side because of the amount of money the Government are putting into this particular operation. But it is also true that there has been a lot of speculation in the Press about this, much of it totally inaccurate, but mostly necessarily following from the fact that discussions on the matter have gone on for such a long time.
Several Hon. Members rose—
Mr. Speaker: I must protect the Budget.

CONSOLIDATED FUND (No. 2) BILL (DEBATES)
Mr. Speaker: Perhaps it will help hon. Members if I remind them that for the debate on Tuesday next on the Second Reading of the Consolidated Fund Bill
614
they may hand into my office their names and the topics they would wish to raise by 10 o'clock on Monday morning. The ballot will be, as last time, for name plus topic—not just name—and any hon. Member may hand in only his own name and his own topic. I will put out the result of the ballot later on Monday.

CONSOLIDATED FUND (No. 2) BILL (DEBATES)
  BILL PRESENTED
    SALE OF VENISON (SCOTLAND) (No. 2)
    Bill to make provision for the registration of dealers in venison, for the keeping of records by such dealers; and for matters in connection therewith, presented by Mr. Gordon Campbell; supported by Mr. Alasdair Mackenzie, Mr. Robert Maclennan, and Mr. Ian MacArthur: read the First time; to be read a Second time upon Friday, 29th March and to be printed. [Bill 113.]

    WELSH AFFAIRS
    Motion made, and Question,
    That the matter of Agriculture in Wales and Monmouthshire, being a matter relating exclusively to Wales and Monmouthshire, be referred to the Welsh Grand Committee for their consideration.—[Mr. Ernest Perry]:—
    put forthwith, pursuant to Order [18th March].and agreed to.

ORDERS OF THE DAY
  WAYS AND MEANS
  Order read for resuming adjourned debate on Question [19th March],
  WAYS AND MEANS

    AMENDMENT OF THE LAW
    That it is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance, so, however, that, without prejudice to any authorisation by virtue of any Resolution relating to purchase tax or selective employment tax, this Resolution does not extend to the making of amendments of the enactments relating to either of those taxes so as to give relief from tax.
    Question again proposed.

  BUDGET RESOLUTIONS AND ECONOMIC SITUATION
  Mr. Speaker: Before I call the opener of the debate, may I remind the House that I am deeply aware of the intense desire of hon. Members on both sides to speak in this debate. I was able to call, I believe, 13 back benchers yesterday because hon. Members made reasonably brief speeches.
  4.8 p.m.
  The Secretary of State for Economic Affairs (Mr. Peter Shore): Before I proceed to explain the Government's intentions in the field of prices and incomes policy, I want to spend a little time describing the economic background in order that our policy in prices and incomes may be seen in the right context. Our starting point this year is that for reasons well known to the House absolute priority must be given to the balance of payments. There was an overall deficit last year of £540 million and a large part of this deterioration was in the fourth quarter. Added to this, the provisional trade figures for January and February suggest a visible trade deficit of about £100 million for the two months taken together. Although the figures were still distorted by the effects of the dock strike and the closure of the Suez Canal, a massive turn-round is clearly required to achieve surpluses of the order necessary to put our balance of payments right. This objective must take priority over all else. The special task of prices and incomes policy will be to safeguard the
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  competitive advantage that devaluation has provided us and ensure a lasting benefit to our balance of payments. The first object of our policy is to see that sufficient resources are switched to the balance of payments over the next 18 months. The forecasts included in the Financial Statement show that more than half of the expected increase in resources will be needed for this purpose. But we must also allow for an increase in stocks, work in progress and productive investment, for without it we run the risk of jeopardising our future productive potential. Also, some allowance must be made for a slight increase in public consumption despite the drastic restrictions which have been announced. As has been explained, it is neither practicable nor economic to seek to cut all increases in public expenditure programmes overnight.
  These demands will more than absorb the extra resources that we believe we can safely get from increased production. Therefore, it follows that personal consumption will need to fall; but in this situation we must give, and we are giving, help to some poorer sections of the community and particularly those with large families. It is clear, therefore, that the better-off sections of the community will have to accept a fall in their standard of living which is rather more than the average fall of 1 per cent. The proportion which personal consumption bears to the total national expenditure is expected to fall by 2 per cent. Despite this reduction, we will not compare unfavourably with our main competitors. At present, personal consumption absorbs a higher proportion of the total in Britain than in many other countries. This has been one of our troubles for many years. We have been consuming this higher proportion of our output only at the expense of too little investment and of quite inadequate balance of payments. It has involved us running into massive debt. This has got to change. The task before us is to see that the change is brought about as effectively as possible and with the least damage to our competitive position.
  Inevitably, the question is being asked whether we need face such stark alternatives. Can we not envisage a rate of growth in gross domestic product rather more than 3 per cent. and which would,

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  in principle, enable us both to conquer the balance of payments and, at the same time, to provide the resources required for a rise in the standard of living? Could we, as our friends in the T.U.C. have urged, achieve a 6 per cent. increase in 1968–69? These are serious questions and I entirely accept that this must be established.
  We have, of course, looked very carefully at this. I am not a masochist, nor are my right hon. Friends. If in our judgment a higher rate of growth would provide a solution, our whole instinct would be to accept it. There are, however, powerful reasons why we cannot accept such a high rate of growth. First, in the whole of the past decade there has been only one calendar year in which the gross domestic product has risen by 6 per cent. compared with the previous year. That was in 1964, when the growth was accompanied by the worst balance of payments deficit in the post-war period. [HON. MEMBERS: "Until last year."]
  Secondly, while we have the physical capacity to achieve—
  Mr. Nicholas Ridley rose—
  Mr. Shore: I think I know what is in the hon. Member's mind. I was referring to the balance of payment figure and not to the trade gap.
  Secondly, while we have the physical capacity to achieve such an increase in production, it would not be to export markets, but to domestic consumption, that production would be routed. Thirdly, such a rate of expansion could not be sustained beyond a single year because it greatly exceeds the long-term rate of growth of productivity of the British economy. The result, therefore, of such a hectic pace of advance would be an increase in the pressure of demand.
  Mr. J. J. Mendelson: It is not hectic.
  Mr. Shore: It is certainly hectic, my hon. Friend will find, by comparison with what has previously been achieved over a long period of years in the British economy. If we were to accept such a rate of growth, the outlook for the following year would be one of rapidly mounting costs, leading to all the old stop-go problems.
  Mr. Mendelson: It must not be allowed to go unchallenged that the figure of 6 per cent. is described as hectic by a responsible Minister. That was the figure suggested by my right hon. Friend the Prime Minister the day after devaluation as being the right level at which to aim.
  Mr. Shore: The hon. Member may be confusing figures for the increase in manufacturing industry output and the figure which I am using for the increase in gross domestic product.
  Mr. Ridley: I am grateful to the right hon. Gentleman for giving way, although we have rather passed the point at which I wanted to intervene. May I bring to his attention the fact that the balance of trade, both private and Government, was £112 million worse last year than in 1964? Therefore, how can he ever again bring 1964 in aid in any argument?
  Mr. Shore: I anticipated that point and I dealt with it at the time. I said that I was referring to the balance of payments and not to the trade deficit.
  After a year or two, the advantages of devaluation, so painfully gained, would have been lost. Exports would be frustrated, imports would rise too rapidly and our costs position would worsen. That is something which we cannot at present contemplate.
  Of course, forecasts in this area are far from infallible. A rather higher rate of increase might be possible if exports rise faster than we have assumed, but this would not materially affect the resources available for personal consumption. We certainly cannot assume such an increase in exports in advance of actual performance.
  We must, therefore, conclude that an optimistic growth rate does not provide the answer and that there is no alternative to a reduction in personal incomes. This was the Budget judgment. Once this is accepted, the next question is the right relationship between fiscal and incomes policy.
  A number of courses have been suggested. The first is a total freeze on incomes on the model of July, 1966. This, as I said in the devaluation debate in November, I would not accept; first because, in a period of inevitably rising prices, a freeze would bear much too

  619
  harshly on the lower paid and, secondly, a rigid policy of that kind would militate against the increases in productivity which we seek to encourage. It must, therefore, be ruled out.
  Secondly, we could have a free-for-all. Prices could be free to rise not merely in response to genuine increases in costs, but totally without restraint and to whatever level the domestic market could accept. Incomes would then chase after them but with no chance of catching them up.
  The objections to such a policy are overwhelming. First, it would disproportionately favour those in a strong bargaining position and disproportionately affect those whose bargaining position was weak. Outside earned incomes, those who depended on the social wage would be most cruelly affected. Secondly, such a course of uninhibited cost-push inflation would disastrously affect the cost advantage that devaluation has given us.
  Thirdly, if such effects on costs were judged to be unacceptable then the only remaining alternative would have been to present so deflationary a Budget as to negate the bargaining position of organised labour. This we were not prepared to do. Not only would such a Budget have had to include such massive tax increases as seriously to affect incentives to greater work and increased productivity, but the misery and waste of resources involved in achieving a level of unemployment which such a course would demand would be quite unacceptable. This, too, however attractive to some hon. Members opposite, we ruled out.
  In the circumstances, the Government have chosen the only sensible course. The Budget is tough and provides the necessary framework. It cannot succeed by itself, however, unless we develop alongside it a means of securing a just but firm restraint on prices and incomes. Neither fiscal policy nor prices and incomes policy can work alone, but in the current context prices and incomes policy should be able to play a vitally important part in securing our objective. Moreover, a successful prices and incomes policy is the only way of ensuring that the competitive advantage afforded by devaluation is not eroded by too rapidly rising costs.
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  It is against that background of economic circumstances and alternative courses that I remain convinced that a firm and successful incomes policy is vital.
  Before I describe the main features of the new policy, I would like to describe briefly the four main considerations which I have had in mind. First, the policy must encourage rather than hinder productivity. Secondly, we must have real concern for the needs of the lower-paid section of the community. Thirdly, the policy must do all that is possible to stop unjustifiable price increases. Fourthly, there must be restraint not only on incomes from work, but on incomes from property.
  I now turn to the new policy, which is now in operation. Its distinctive feature is the ceiling of 3½ per cent. on wage and salary increases. It is in sharp contrast to the pre-standstill norm of 3 per cent. to 3½ per cent. which in practice became the starting point for wage and salary bargaining rather than the culmination or outcome of negotiations.
  Since 1st July last year, the incomes policy has operated on the basis that there is no automatic entitlement to a pay increase and all increases have had to be justified against the criteria which were agreed with management and unions in April, 1965. This has not been a weak policy but experience in recent months has shown that it has the disadvantage of not providing a yardstick against which the reasonableness of individual settlements can be judged.
  In a period of rising economic activity and a substantial increase in the level of prices, the danger is that the average outcome of wage and salary settlements would rise far beyond the level which the country can afford.
  The Government have, therefore, decided to give firm guidance on the maximum wage or salary increase which will be permissible from now until the end of 1969. All increases, whether settled at national, local, firm or plant level, must continue to be justified against the criteria, but now they must also be contained within a ceiling of 3½ per cent.
  Mr. Arthur Lewis: Will that apply to lawyers' briefs and lawyers' fees?
  Mr. Shore: A large part of the pay of solicitors is separately controlled by

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  statutory powers. If my hon. Friend reads the report of the National Board for Prices and Incomes, he will see that they do not recommend an overall increase in solicitor's rewards.
  Mr. Lewis: That is solicitors. What about barristers?
  Mr. Shore: I may be asked, why 3½ per cent.? Because 3½ per cent. is the maximum figure for settlements which in our view is consistent with fully maintaining the competitive advantage of devaluation. This is not the same thing as saying that the overall growth of earnings can be contained rigidly within the 3½ per cent. ceiling. It would be impracticable and would make economic nonsense to seek to put a ceiling on increases in earnings directly related to the amount of work done. It is the increases in rates or scales of pay underlying increases in earnings to which the ceiling will apply.
  Below the ceiling, the existing criteria will continue to operate. Twelve months must be regarded as the minimum period between successive improvements. Where more than twelve months have elapsed since the previous increase and the criteria point to a further increase, the ceiling can be applied at an annual rate. As is provided in the current White Paper, large increases may have to be achieved by stages.
  It must be stressed that there is no justification under the criteria for income increases simply due to a rise in the cost of living. Not only would that be self-defeating, since it would result in further increases in the cost of living, but it could set off a wage-price spiral which would quickly erode our competitive position.
  Mr. Robert Carr: Would the right hon. Gentleman make it clear for the benefit of the House what he means by large increases having to be made effective in stages? Suppose there were a large increase which could be proved to be a genuine productivity increase. Would that have to be implemented in stages?
  Mr. Shore: I ask the right hon. Gentleman to be patient. That point will be dealt with in a few moments. Frankly, I was referring mainly to public sector pay and to the gap which may have
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  elapsed—and there often is a long gap—between the previous settlement and the latest settlement.
  It is, moreover, a necessary condition of the economic adjustment which we have to make that incomes should rise more slowly than the cost of living over the next year. As I said the policy must encourage rather than hinder productivity. Here I take up the point made by the right hon. Gentleman. For this reason there will be an exception—it is the only exception to the ceiling—for genuine productivity agreements and major reorganisations of wage and salary structure which can be justified on grounds of economic efficiency and increased productivity. This exception reflects our concern to do everything possible to encourage the rapid increase in productivity which is so vital in the interests of exports and import saving. But exceptions to the ceiling will have to be genuine productivity agreements and must conform to the guide lines laid down by the National Board for Prices and Incomes.
  Mr. Stanley Orme: Will that affect plant bargaining? Will the normal negotiations which go on daily in engineering, with rate fixers, to improve rates and piecework earnings, be covered by that agreement?
  Mr. Shore: The ceiling will apply to all agreements whether concluded at plant level or at any other level. If the agreement results in a pay award which is above the ceiling, then it will have to be justified—
  Mr. John Biffen: Are we to understand that agreements reached by rate fixers on pay in a factory at Salford, for example, must be referred to the Ministry of Labour, must be examined by the Ministry of Labour and must be confirmed by the Ministry of Labour, and that confirmation must be reported back to the factory floor in Salford, before they are accepted?
  Mr. Shore: I do not want to be misunderstood. I said that increases in piece rate earnings, in so far as they are related to increases in output, are not affected—
  Mr. Norman Atkinson rose—
  Mr. Shore: I have a substantial speech to deliver.
  Mr. Atkinson rose—
  Mr. Speaker: Order. The right hon. Gentleman has obviously not given way. Mr. Shore.
  Mr. Shore: I have a substantial speech to deliver which covers a very wide area. I know that my hon. Friends and other hon. Members will have many detailed questions to put, and I will try to deal with them later. But I must try to establish the main shape of the policy now.
  Mr. R. Carr rose—
  Mr. Shore: I am sorry. I must get on.
  We have given most careful thought to the difficult problem of the low paid. The T.U.C. have drawn attention to the difficulties in their Economic Review, which states:
  "Faced with recommendations by the Incomes Policy Committee that they should seek to secure greater improvements for their members on or near basic rates and relatively little for members whose earnings are comparatively high, unions have, often after considerable efforts to establish a viable basis on which this can be done, either tacitly decided that it is not practicable—at least in the short run—or have explicitly said that it would not be possible because of the marked effect on differentials".
  The low paid can be helped by the policy in two ways. First, one of the criteria for settlements up to the ceiling specifically covers their case. Secondly, it is always up to a group within which there are low-paid workers to negotiate above-ceiling increases for these workers within an overall settlement which does not exceed the ceiling. Nor should it be overlooked that many low-paid workers will benefit from increased overtime and piecework earnings as industrial activity picks up, and will have an opportunity to obtain above-ceiling pay increases arising from genuine productivity increases at factory and plant level.
  But I have never believed that the problem of the lower paid can be dealt with simply through collective bargaining. How can we establish a satisfactory measuring-stick for the lower paid irrespective of family circumstances and commitments? It is for this reason that we have made this year—and it is the first increase for 11 years—provision for increased family allowances. We have concentrated our
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  help on those low-paid workers with family commitments. Our proposals for increasing family allowances, together with pay increases of up to 3½ per cent., will give substantial protection to low-paid workers with families with two or more children. For example, a man with two children who is earning £14 a week could receive a pay increase of up to 3½ per cent., plus a family allowance increase in gross terms of 10s., which would be equivalent to a pay increase of 3½ per cent., or, if he has three children, a gross increase of £1, equivalent to a pay increase of 7 per cent.
  Now, I turn to prices—
  Mr. R. Carr: Would the right hon. Gentleman give way?
  Mr. Shore: No.
  Hon. Members: Give way.
  Mr. Shore: I come now to prices, and a large part of this—
  Mr. Carr: On a point of order. Since there is to be no wind up from the Government side this evening, unless some major questions are answered at this stage the House will not have a reply and cannot debate this matter successfully.
  Mr. Shore rose—
  Mr. Speaker: Order. This is a point for the Minister and not for the Chair.
  Mr. Shore rose—
  Mr. Carr: Will the right hon. Gentleman give way, then?
  Mr. Shore: No.
  Hon. Members: Disgraceful.
  Mr. Shore: On prices, nothing would give me more pleasure than to be able to announce to the House this afternoon a total freeze. I can think of no better way to win friends, influence people—and ruin the economy. Such a course is clearly impossible. First, many prices must legitimately rise as a consequence of devaluation. As the House knows, this will vary, but the overall effect will be to increase prices by about 3 per cent.
  Second, there are price increases of 1½ per cent. which will flow from the tax measures announced in the Budget. Those who accept the case for devaluation and those who genuinely support the Budget will understand and accept that these

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  price increases are inevitable and that it does no good for us to complain about them—[Laughter.]—but beyond this, there are other price movements—
  Mr. Arthur Lewis: On £5 a week it does; it is ridiculous.
  Mr. Shore:—and it is here that the prices policy must be set to work—[Interruption.]
  Mr. Speaker: Order. We have had a placid Budget debate so far; I hope that we can keep it so.
  Mr. Shore: The objective is not to secure a freeze but to see to it that price increases do not take place unless they are fully justified. We have now brought into the net of administrative examination and potential reference to the Board the major part of manufacturing industry and virtually the whole of the public sector. This means a genuine scrutiny and, of course, we have the power to defer price increases which cannot be justified. But it is a fact that increased prices may, in the event, be justified by rising costs.
  At the retail end, where there is an infinite variety of goods and a vast number of outlets, provision is more difficult, although we do maintain our "constant watch" arrangements over food prices and some other consumer prices, and we are, of course, prepared to use our powers of reference to the National Board. But there is an important additional point to be made here. Seventeen years ago, almost the last White Paper issued by the post-war Labour Government concluded that resale price maintenance, whether collectively or individually enforced, should be abolished. It took right hon. Gentlemen opposite a rather long time to implement this policy, but today it is a fact that resale price maintenance has been virtually abolished. In other words, in an important sector of the economy, and one which affects the consumer most directly, private price control has been abolished.
  There are those who deride the effects of our prices policy and those who convince themselves that prices have outstripped incomes throughout the period that we have been in power. This is manifestly untrue. The plain facts are that, since we came to office in 1964, prices have risen by about 11 per cent., while average earnings have risen by over
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  18 per cent. Even during 1967, when, for the first six months, we had the period of severe restraint on incomes, the retail price index rose by only 2·5 per cent., which is less than the average annual rate in the period between 1960 and 1966, compared with an increase of 6 per cent. in wage rates.
  This does not suggest to me or to anyone who is prepared to look at the facts that our prices policy has operated with the laxity which has so often been suggested. Our prices policy has been working, and to good effect. But there are two ways in which we have decided to strengthen the powers available to us. First, we propose to seek new powers which will enable us to require a reduction in existing prices if the Prices and Incomes Board so recommends. This will be an important deterrent to the maintenance of price levels which are unjustified. Second, we propose to take powers in relation to rents.
  As rents are a major part of the average household budget, we are sure that we must avoid rent increases which are too steep, and this includes increases in the rents of certain private rented houses as well as local authority houses. In the private field, controlled rents are already, in effect, frozen. Regulated rents determined under the 1965 Rent Act can rise or fall. A new regulated rent, even though it excludes scarcity value, can occasionally involve a sharp increase in the previous rent. We intend that the legislation on prices and incomes should include powers to prescribe a scheme for phasing big increases in regulated rents. What we have in mind is that, where the fixing of a new rent would lead to an increase above a stipulated amount, the increase might be staged over a period not exceeding three years—
  Mr. Arthur Lewis: Oh, dear.
  Mr. Shore: We have no intention of interfering with the rent fixing machinery, which, in our judgment, is working well. The rents will be determined in the same way and by applying the same criteria as now, but we shall be able to restrain the sudden sharp increases, against which there have been many complaints.
  On local authority rents, the Government have always made it clear that some increases are fully justified and,

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  indeed, unavoidable because of increased costs, and that rent rebate schemes which help the poorer tenants who need help may have to be met in part by increasing the general level of a council's rents. Rent increases bear much more heavily on lower-income families than on the better-off tenant, and one way of moderating their effect is by having an effective rent rebate scheme.
  The Government have consistently urged local authorities to adopt and improve such schemes, and there has been an encouraging increase in the number of such schemes over the past year. Of course, if the subsidies are used mainly to help the poorer tenants, then the better-off tenant is likely to have to pay a rather higher rent. But the effect of this can easily be exaggerated, and sometimes the introduction of a modest rent rebate scheme is blamed for severe rent increases, when in fact those increases are mainly due to other factors. It is perfectly possible, as many authorities have shown, to have a sensible rebate scheme without imposing big rent increases or stirring up bitter controversy.
  Most local authorities have kept rent increases to a moderate level, but some have made increases which are far larger than is needed for meeting current expenditure or for introducing a rent rebate scheme. In the present, critical, phase, such increases are not compatible with the Government's prices and incomes policy. Nor would it be fair to the vast majority of authorities who have acted reasonably and moderately if an unresponsive minority pursued quite different policies.
  The Government have decided, therefore, that, in addition to the new powers over private rents, power should be taken, first, to secure early warning of local authorities' rent increases, and, second, to enable the Housing Ministers to intervene, in exceptional cases, so as to moderate or phase increases which they regard as unduly high. The Government are also awaiting the report of the Prices and Incomes Board on certain local authority rent increases, and this will be taken into account—
  Mr. Albert Murray: Will there be any retrospection with regard to local authorities which have made blatant increases before this announcement?
  Mr. Shore: I ask my hon. Friend to await a more detailed amplification of this small but important point of the policy.
  Hon. Members: When?
  Mr. Edward Heath: On this question of rents, are the Government going to take any action to help those local authorities which are bound to put the additional money on the rates? Will he also say, in regard to incomes policy, exactly what additional powers the Government propose to take or what powers they intend to use to carry out the policy that the hon. Gentleman has described?
  Mr. Shore: This is the reason why I have tried to resist the attempts of hon. Members to intervene and question me—[HON. MEMBERS: "Oh."]—simply because I am coming to these powers, and I hope to reach that part of my speech as quickly as possible.
  Hon. Members: What about the rates?
  Mr. Shore: It is wrong to assume—and this is part of what I was saying—that the only choice is a straight one between increasing rates and increasing rents. We will have more information on this when the National Board reports, and I therefore ask hon. Members to await that report.
  Not only are we extending this policy to cover rents, but I believe that it would be quite wrong for our policy on incomes to be confined simply to earned incomes. As I said at the beginning, it must also embrace property incomes. It is for this reason that we are insisting that the 3½ per cent. ceiling should apply to dividend payments. The statutory powers which we are to seek will cover dividend payments in order to prevent breaches of the policy in this respect. The details of the scheme have been set out in the announcement made by the Treasury following the Budget statement, and it will also be described in the forthcoming White Paper. The essence of the scheme is that companies will be required to limit any essential increase in their dividend payments to not more than 3½ per cent. of the dividend for the preceding account year, and we are asking them to make no increase at all without good reason.

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  In addition to the measure to curb dividend payments and bring them within the ceiling, we have, of course, thought it right that the wealthy should make a substantial extra contribution in the context of our national problems. I refer, of course, to the special charge upon investment income announced in the Budget speech, which will yield £100 million.
  I come to our intention to take further statutory powers in support of the policy which I have been describing. We have, of course, considered carefully the possibilities of a purely voluntary system and, in particular, the immensely important developments that have recently taken place in the T.U.C. But in considering this alternative, we must form a view on these questions: first, how far could the T.U.C. expect at this early stage to win and hold the support of member unions; secondly, how in practice could such a policy reach down from national bargains to agreements at the firm and plant level; thirdly, how would we deal with wage and salary claims by those outside the T.U.C., and how would we deal with prices; and fourthly, how, with the best will in the world, could a purely voluntary policy stand up to the exceptional restraints that our present economic situation demands?
  Our conclusion was that we could not allow our present powers to expire on 11th August and, indeed, that they would need to be strengthened. This certainly does not mean that we regard statutory powers as an alternative to a wide measure of voluntary co-operation. Such co-operation is, and will remain, of crucial importance. The statutory powers which we propose to take will be a buttress and not a substitute for this support.
  The package of powers which I will briefly describe covers the essential elements for a firm and effective policy. We are not proposing to have arbitrary powers exercisable at our own hand. The powers will be exercised only in the context of reference to the National Board for Prices and Incomes which is an independent statutory body. The Board has been strengthened to enable it to deal with more cases and it will be further strengthened if this should prove necessary.
  It is not our intention to place the present early warning arrangements on a
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  statutory basis. Under the existing early warning arrangements, the Government receive information about claims and proposals to increase pay from the T.U.C. and C.B.I., from organisations which are not members of either of these two bodies and directly from firms and employers' organisations in the case of local and company negotiations. We expect these arrangements and the related arrangements for price notification to continue on a voluntary basis and we hope to extend them.
  We shall not use our powers to require statutory notification unless the voluntary system is not working satisfactorily. The main existing statutory powers expire on 11th August. They enable the Government to delay pay and price increases for up to seven months on the recommendation of the National Board for Prices and Incomes. The Government now propose to introduce legislation to extend the maximum delay from seven to 12 months, although the power will still be exercised only on the recommendation of the Board. The Government consider that these extended powers should run for 18 months in the first place, with provision for renewal or modification thereafter.
  The same power of delay will apply to price increases, and, as I have indicated, the Government propose to seek a new power to require a reduction in existing prices if the Board so recommends. The Government are not proposing a power to bar retrospective payment of pay increases held up under the policy, but it must be made clear that attempts to secure such retrospection would be against the purpose of the policy. We propose that employers, as at present, should be protected against breach of contract where increases are witheld in strict accordance with the requirements of the policy. The important extension to 12 months of the period of delay and the retention of statutory powers for at least 18 months should mean, however, that employers will be less likely to commit themselves to inflated settlements which would permanently raise the level of their costs, particularly as they will have to justify any increases in prices which they may subsequently propose.
  I have begun consultations with both the C.B.I. and the T.U.C. on the terms of a White Paper to provide guidance on

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  the new policy for prices and incomes. It is obviously important that detailed guidance should be available as soon as possible for all concerned i the determination of prices and incon s. We hope that the White Paper will be published very shortly.
  In conclusion, I come to the question of whether, whatever the justification for the policy, it cannot work, as some would allege, and that we are asking too much.
  Mr. Heath: Before the right hon. Gentleman concludes. The Government are not taking any powers for retrospective action. Is it clear, therefore, that they will have power to delay for 12 months but that at the end of that 12 months the claimants can be paid everything that they claimed dating back 12 months and that the Government will have no power to stop it?
  Mr. Shore: The Government are not taking powers other than to defer for a period of up to 12 months. We have made the point that employers would have a defence in law, as they have under the existing Act, against such claims for retrospective payments.
  Mr. Heath: So what I said was right?
  Mr. Shore: Yes, but I was elaborating for the right hon. Gentleman's benefit. I am glad that he does not need it.
  I do not underestimate what we are asking and the strains that it will impose, above all the strains that it will place on the trade union movement. But I believe that their response—and that of management and of the British people as a whole—will in the end be decided by the answer to two questions: is the policy necessary and is it fair?
  There are those—and I see many in front of me—who have never understood the British trade union movement or the millions of people whom it represents. They believe, and it is part of the contempt they hold for the ordinary British citizen, that they can never take other than a short-term and selfish view; that, in short, we are a nation not of citizens but of greedy consumers. They are wrong. The distinctive feature of the British trade union movement is that, in addition to its rightful concern for secure
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  ing the welfare and rewards of its members, it is also concerned with the total development of our society. It is equally concerned with social welfare, with economic growth, with full employment, and with the achievement of a better and more just society. In short, the British trade union movement has always had, and still retains, its Socialist commitments.
  The quality of that leadership and their understanding has already been revealed in the initial response of the General Council to devaluation—a response that put to shame the petulant, pessimistic and damaging comments from many other quarters. The response by the British people will, I believe, show a much clearer grasp of the national interest at this time than hon. Members opposite suppose. I think the verdict of the nation, like that of this House, will be that the policy is both necessary and fair.
  4.50 p.m.
  Mr. Robert Carr: I think there is one point on which the whole House can be unanimous, and that is that we can add one to the list of those who have never understood the British trade union movement. We have been given a disgracefully superficial account, as well as a boring and supercilious account, of what is claimed to be one of the major problems facing this country. The failure of the right hon. Gentleman to know the answer to the question—which I believe in the first place came from one of his hon. Friends who does know the trade union movement—what is to happen about piece-work negotiations on the factory floor? shows once more that this policy has been cooked up in an ivory tower by theoretical schoolmasters who know not the first thing about the working and problems of British industry.
  For that reason alone this policy will fail, just as its predecessors have failed. The House has listened to that speech with the levity and scorn which it deserved. It is not a policy but a non-policy.
  Mr. John Peyton: I wonder if my right hon. Friend would issue a serious invitation to the Chancellor of the Duchy of Lancaster to wind up this debate after all and to make all things clear to us.
  Mr. Carr: Opinions may differ about how much the right hon. Gentleman the Chancellor of the Duchy makes things clear to us, but if he were to wind up this debate we would at least have some views from someone who has worked in this field and who knows something about it in practice. That might do some good to the debate.
  I could not help having some reflections of a wider kind as I listened to the right hon. Gentleman's lecture. I wonder, do the Ministers of this Government ever have any sense of guilt or even some uncomfortable self-consciousness when they turn previous policies upside-down and deny and dishonour apparently solemn pledges? To hear the right hon. Gentleman claiming now that this Government refuse to base their policy on forecasts of optimistic growth rates makes me ask: did he clear that with the Prime Minister, who won the election on such optimistic forecasts?
  Does he not remember when he comes to the House with this claptrap about a statutory incomes policy that the Prime Minister said—accurately for once—in the middle of the 1966 election that we cannot legislate for wage increases? Does he not remember when he makes proposals for compulsory powers with a further 18 months provision for renewing them, and renewing them, and renewing them, the promises made when these powers were first introduced, that they would be for one year and when that was over they would be for a maximum of another year?
  Does he not remember that the present Home Secretary, when still Chancellor of the Exchequer—after devaluation, not before—told this House that the Government do not believe that additional legislation would yield us the benefits we need? That was on 20th November after devaluation. It was said by the then Chancellor of the Exchequer, but now we have this today. Do Ministers, not once but over and over again, fool themselves, or are they deceiving us and the country? One wonders, is it worse to be governed by knaves or to be governed by fools?
  We on this side of the House remain unalterably opposed to an incomes policy enforced by law. I want to explain seriously our reasons for that opposition
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  and to expound seriously our alternative. In order to do so, I must briefly set this discussion about incomes policy in the context of this Budget and its purposes.
  The Budget has two principal objectives, first, to free resources for diversion into exports and import substitution, and secondly, to preserve the competitive advantage which we have gained by devaluation. There are at least five main ways of achieving these purposes. First, we can cut private purchasing power by extra taxation. The Government have certainly done that all right—£923 million worth of it. Secondly, one can stimulate personal saving. The Government have unfortunately neglected that almost entirely. Their proposals are pettifogging in that field. Thirdly, one can cut Government as well as private purchasing power. That, of course, the Government have failed to do altogether. I am sure it may be a coincidence, but one could not help noticing when one looked at the blue Financial Statement we have by tradition on every Budget Day that the difference between the Budget estimates of expenditure given to us on Budget Day last year and the estimates as they were before the Budget this year showed an increase of £922 million. By a strange coincidence we had to have £923 million extra taxation.
  The fourth way would be to take positive action to stimulate efficient growth in the total resources at our disposal. That is another way of providing for extra exports and import substitution. On that we have no action at all. The fifth main way of achieving these purposes is to restrain personal incomes, that is to say by incomes policy. All these five main ways are legitimate and proper ways of achieving the legitimate and proper purposes of this Budget, but the Government have put almost the entire weight on the first and the fifth—on cutting private purchasing power by extra taxes and on the incomes policy. That is our fundamental quarrel with them.
  I make quite clear that we are not opposed to an incomes policy as such. We are not condemning an incomes policy as a concept, but this particular kind of incomes policy. We operated an incomes policy when we were in office, and we would do so again. A Government in a modern economy must have

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  a strong view about movements in incomes and try to influence them. What we oppose is the excessive weight which this Government have placed on incomes policy. We also oppose the method of incomes policy which involves statutory power and legal compulsion. Those two errors by the Government have led to short-term failure and long-term damage.
  Mr. Joel Barnett rose—
  Mr. Carr: I am afraid I cannot give way. I want to get on with my argument.
  Mr. Barnett: I had understood—perhaps the right hon. Gentleman will correct me—that it was the view of the Opposition, or at least 50 per cent. of the Opposition, that an incomes policy was a nonsense and a dangerous nonsense. Is this now not so?
  Mr. Carr: It never was so. Perhaps the hon. Member's intervention is of some use because it gives me a further opportunity to make that plain. The Conservative Government when in power operated an incomes policy, but without statutory power, and when we are next in Government we shall do exactly the same.
  Mr. Russell Kerr: Will the right hon. Gentleman allow me?
  Mr. Carr: I am afraid not. I want to get on with my speech, and the Minister refused to give way to us on this side in any reasonable way at all.
  I hope that the House, or those Members interested in this subject, took account, when it was published, of the O.E.C.D. Observer of April, 1966, because, in reporting on various O.E.C.D. enquiries, it showed that unit labour costs in manufacturing industry in Britain rose by 2 per cent. only between 1958 and 1964 when we were in power and operating an incomes policy without statutory control, and by only 1 per cent. between 1961 and 1963. That was as good as or better than other major industrial countries analysed by the O.E.C.D., with the exception of the United States and Canada. But in the first 15 months of the statutory incomes policy under this Government, between July, 1966, and October, 1967, average industrial earnings
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  rose by 5·3 per cent. while manufacturing production failed to rise at all. That is the stark measure of the failure, and that failure of the Government's statutory incomes policy is clearly continued both in absolute terms and by comparison with what we achieved when we were in power with no legal compulsion.
  As my right hon. Friend the Member for Enfield, West (Mr. Iain Macleod) pointed out yesterday, weekly wage rates since 1st July, 1966, have gone up by 8 per cent. and monthly rates by 8·45 per cent., with all the paraphernalia of control and compulsion and the damage caused by it. In the same months of 1961 and 1963, the comparable period, the respective increases were 5·7 per cent. and 6·5 per cent.—smaller increases with no statutory control. And let the final verdict be pronounced by the National Institute of Economic and Social Research in their report of February this year—and I quote from page 26:
  "Over the whole period from just before the freeze to the latest available figures (for October 1967) average earnings rose about 5½ per cent. This—given the relatively high rate of unemployment and the comparatively high rise in prices—is roughly what one might expect from natural forces. Or, to make a rather rougher type of comparison, it is if anything fractionally higher than the rise during previous roughly comparable periods…"
  That is no prejudiced, theoretical, Tory view; it is the verdict and judgment of the National Institute.
  Mr. Shore: Would the right hon. Gentleman now go on to tell the House what conclusion the authors of that report reached about the future prices and incomes policy?
  Mr. Carr: When I come to discuss what the future policy should be, I will give our own policy. At the moment I am dealing with the present policy. I am about to comment on the future policy and I am going to tell the House what a Conservative Government would do.
  Hon. Members: Answer.
  Mr. Shore rose—
  Hon. Members: Sit down.
  Mr. Carr: I wish to put forward serious arguments as to why the present Government's policies will not work and what the alternative should be and to contain my remarks within a reasonable

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  space of time. This is a lengthy, serious and difficult subject. It is the Minister who is wasting time, not me.
  Mr. Mendelson: Give the answer. The right hon. Gentleman has only read part of the report.
  Mr. Carr: I could quote from this article in extenso: I have it with me and I can assure the House that I have read it, although I do not necessarily agree with all it says. I am giving its conclusion at the moment on the historical record of whether a statutory policy has worked. So far, the statutory incomes policy has not worked any better than one with no statutory backing behind it. We said it would not, and it has not. Unfortunately, the other half of our forecast has come true as well, and that was that lasting and serious damage would be done to industrial relations and to the development of responsible free collective bargaining, and all for no economic advantage even in the short run. I shall return to the question of that damage later on.
  First, however, I want to consider whether the new powers announced by the right hon. Gentleman today supplementing what the Chancellor said on Tuesday are any more likely to work than the old ones. We are sure they will not, and if they appear to do so to any extent in the next 18 months that is far more likely to be the result of the Chancellor's savage taxation and deflationary measures than of any statutory compulsion. Yet the compulsion, which will have no effect, will continue to exacerbate the damage already done. Last year we warned that the Government's incomes policy would not work and would be unstable, and we said that they would have to go back to freedom or go on to still stronger compulsion. We had no doubt that this Labour Government would choose the latter alternative, and today we see that that is exactly what they are doing. We forecast a Prices and Incomes (No. 3) Bill in 1968, with extra powers, and here it is. The Government are running true to form. We say now that these new powers also will fail and will do further damage in the process.
  There are two main reasons for which, in our opinion, these new powers will fail. First, if one believes—as we do
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  not, of course—in the efficacy of statutory powers, these new powers are clearly inadequate. The pressure behind wage claims is increasing to a greater extent than the powers designed to dam them. Compared with the earlier period of statutory control, unemployment, at least in the next few months, will be falling rather than rising. Prices, too, will be rising faster, partly because of devaluation and partly as a result of the deliberate policies of the Government in the Budget, and we agree with the T.U.C. that the increase in prices is almost certain to be significantly greater than that at present forecast by the Government. But, above all, it is clearly absurd, if you are going to depend on powers, to take your powers but to leave out the power to prevent back-dating. If you are going to depend on powers, it is an absurdity not to take that particular power.
  The second and far more fundamental reason for which this will not work is that the statutory control of wage increases is an inherently unworkable proposition in itself. As the Prime Minister told the country in March, 1966—accurately for once—you cannot legislate for wage increases; and here we must make a distinction, as I did in moving the opposition to the 1967 Prices and Incomes Bill last year, between a real freeze and a policy of allowing controlled increases. I should like to quote just two or three sentences from my speech on 13th June last year:
  "It is possible, and it may even be necessary, however unpleasant, for a Government, at a moment of national emergency and for a short period, to clamp a complete standstill on all incomes. It is brutal, but there is a rough justice about it which most people will accept if they can be convinced that it is temporary and that the emergency requires it."—[OFFICIAL REPORT, 13th June, 1967; Vol. 748, c. 346.]
  People on the whole accepted the rough justice and the necessity during that six month period, and in the last part of 1966 earnings rose by less than 0·1 per cent.
  A freeze, however objectionable, will work for a limited period. The utter unworkability enters in when one moves from a complete freeze to legislated and State-administered increases.
  Consider what must be done to try to make the sort of policies described by

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  the right hon. Gentleman this afternoon effective. First, the proposed settlement must be notified, in the case of incomes, to the Ministry of Labour. Each must be assessed by Ministry of Labour officials. In the case of straight increases unrelated to productivity it might seem relatively easy to decide whether they meet the criteria laid down in the White Paper and whether their effect would be to increase earnings by not more than a 3½ per cent. maximum, which we have been told is the essential feature of the new policy. In practice, the true assessment, even of these simple proposed settlements, is far less easy than it appears.
  The real difficulty arises in vetting the proposed settlements which claim to be genuine productivity agreements and, therefore, to justify an increase greater than the 3½ per cent. How does one spot the fake? That requires tremendous economic and financial expertise and considerable experience, not just of industry as a whole but of the industry or even the particular company concerned. That expertise does not exist in either sufficient quality or quantity within the Government machine, nor can it be acquired in a reasonable period.
  Only on Tuesday of this week the Joint Parliamentary Secretary to the Ministry of Labour informed me in answer to a Question that 20 Ministry of Labour staff are engaged full-time on vetting proposed wage settlements, and that a larger but unspecified number spend part of their time on it. How many proposed settlements will they have to vet? In answer to another Question of mine on Tuesday, the Joint Parliamentary Secretary said that in 1967 they had to vet 98 major settlements involving more than 10,000 wage earners. He said that he could not give me any information about the number of smaller settlements which had been notified. But, of course, the number of those smaller settlements must be vastly greater than the number of major ones. The number of smaller settlements is also bound to escalate. That is inevitable, because the tendency, which is to be welcomed from almost every other point of view, is that far more settlements will be negotiated at company rather than national level. Therefore, the number of really significant wage bargains will be and should be rapidly
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  multiplying. What can 20 full-time staff in the Ministry of Labour, and an unspecified number of part-timers, do to cope with the flood? Are more staff to be taken on? The Joint Parliamentary Secretary told me that he was not in a position to forecast what changes, if any, there would be in staff during the current year. Will the right hon. Gentleman tell us?
  Mr. Arthur Lewis rose—
  Mr. Carr: I am asking the right hon. Gentleman, because I presume that he is in charge of Government policy on this. If the proposals are all to be strictly vetted according to the criteria laid down in Report No. 36 of the Prices and Incomes Board, as the Chancellor told us on Tuesday, what staff is the Ministry of Labour to take on to deal with them? Instead of the 20, will there be 100, 200 or 500? It is nonsense, it is a charade, it is pie in the sky to say that all these things will be stringently applied if there is a staff of only 20 full-time people trying to examine these matters.
  Mr. Shore: The right hon. Gentleman leaves one major factor out of account. I fully accept that a policy of this kind can work only given a substantial degree of co-operation by management, and a good deal of what one might call the probing and testing of productivity agreements must be done by management itself.
  Mr. Carr: Does the right hon. Gentleman mean like the agreement with the Birmingham car delivery drivers? We are still waiting to hear the outcome of that. We had a Prayer on the matter, I forget how many months ago, and we still do not know any result. That was presumably probed and tested by management, but the Government still found it necessary to lay an Order about it. The policy is an absolute charade and pie in the sky. It will not work on that basis.
  Mr. Biffen: Is it also the intention of the Secretary of State that management should do its own testing of price increases?
  Mr. Carr: Would the right hon. Gentleman like to answer that question?
  Mr. Shore: I have always thought that it was better, and obviously more sensible, for price increases to be checked

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  by the appropriate Government Department and, where right, referred to the National Board for Prices and Incomes.
  Mr. Carr: Then how many economists and trained accountants are to be taken on by the various Government Departments, the Board of Trade and so on, that must vet all the price increases? The problem of vetting proposed wage settlements is as nothing compared with that of vetting the many, many times greater number of price adjustments which take place in the economy every year.
  Mr. Peyton: Does my right hon. Friend agree that the final crown of absurdity on a ludicrous policy would be to allow the trade unions to vet price increases?
  Mr. Carr: My hon. Friend's intervention serves to point out the fundamental lunacy and unreality of the whole policy. It is a serious matter when this country, in its present crisis, has put before it solemnly by the Government a policy which any untrained observer could expose as a practical nonsense.
  The initial and vital vetting procedure—because that is the starting point of the policy once the claims have been notified—is almost certain to be hopelessly inadequate and either arbitrary or unfair in its operation, or alternatively, and perhaps both, very slow. Long delay is in itself inefficient and leads to much bitterness and unrest in industrial relations. Every hon. Member could quote examples. A file of correspondence came into my hands only last week. The firm concerned has been corresponding for six months with the Ministry of Labour about a settlement affecting 15 draughtsmen. That was six months for 15 men. How many million workers are there in this country, and how many firms?
  The policy will not work. The unworkability does not end with the vetting process within the Ministry of Labour, because if that is adverse the case must go to the Prices and Incomes Board. As the right hon. Gentleman said, even this Government are not daring to take decree powers on themselves to put into force the verdict of their own vetting. They acquire further powers of delay beyond one month only if and when they refer the mater to the Prices and Incomes Board.
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  How many inquiries can the Board make in a year, even if it is strengthened? Can the right hon. Gentleman give us any indication of what degree of strengthening of the Board is contemplated, and what capacity for inquiry is contemplated? Is it proposed that it should be able to make 100 inquiries a year, 200 or 300? I cannot believe that that is so, but unless the Board can do that how can the policy be made credible? This question is crucial because, as I said, anything more than one month's delay can be imposed only after reference to the Board. Therefore, what will inevitably happen in practice is that the Board will be able to inquire into only a tiny fraction of the proposed settlements purporting to be genuine productivity agreements. The stringency of testing on which the Chancellor laid such stress on Tuesday cannot exist. He is fooling himself, let alone the country, if he believes it can.
  That is why we must look for an alternative, because the inevitable result of what we are embarked on is that many agreements will have to be let through even though they patently fail to meet the criteria. Hence we shall have exemplary justice in a few arbitrarily selected cases, which will lead to unfairness as well as failure in economic effects. All the arguments applying to incomes apply with even greater force to the prices side of the policy. We are to have rents as well now. The machinery and the Board will have to cope with them as well. What the right hon. Gentleman said is either deceiving the rent-payer or the ratepayers will have to be pasted with a tremendous extra burden.
  We are, therefore, faced no longer just with the objections of principle and theoretical argument, but with the proven fact that a statutory incomes policy has not worked so far. We are convinced that these new and stronger powers will equally fail to work in future. The policy is an economic red herring, but unfortunately the herring is also poisonous. It has already done much damage to industrial relations, and that damage will multiply the longer it goes on.
  Even advocates of this type of policy today admit that it must be riddled with anomalies and cause much unfairness. It encourages dishonesty and irresponsibility, because small groups who choose

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  to disregard the policy can drive a coach and horses through the restrictions if they have no sense of responsibility. Employers who try to observe the policy responsibly and voluntarily suffer increasing ill will in their industrial relations and face disruption when key members of their staff, determined to get rises, avoid the policy by leaving and taking new jobs elsewhere.
  The damage to the whole structure and development of good and responsible industrial relations is even greater and more lasting because attempts to apply the statutory policy use up precious good will desperately needed for bringing about other more effective and constructive changes. The only effect of statutory control of collective bargaining can be to make it less rather than more responsible in future. So the authority of responsible trade union leaders will continue to be weakened, which will have two consequences.
  In the first place, power will increasingly pass to irresponsible and, at the moment, largely unofficial leaders. In the longer run, the tendency will be for such people to get elected to high union office. In this situation the Government may well find it not only necessary to continue the present statutory powers on a permanent basis, but to increase progressively the degree of compulsion. I hope that hon. Members opposite will above all bear in mind that it will lead to the destruction of free collective bargaining in any real sense of the term, which would be a most dangerous development, because collective bargaining by independent trade unions and employers, free of State control, is one of the hall marks of liberty in any industrial society. So this dangerous chain reaction must be broken, and it can only be done by positive and entirely different new measures to make collective bargaining more responsible and more constructive. That leads me in conclusion to the Conservative alternative.
  When we have argued our proposals before, it has often been objected that they are long-term in effect, whereas the need is short-term. But that argument no longer cuts any ice, even if it ever did. Look at the time now wasted on this statutory nonsense. Had our fundamen
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  tal proposals been put into effect immediately after the General Election two years ago, the position today would have been entirely different. So we say to the Government and to the country, "Let us waste no more time."
  Having got themselves into the crisis of July, 1966, the proper course for the Government would have been to have used the breathing space provided by the complete freeze to get basic new policies into operation, and even today I believe that the trade unions and the people as a whole might prefer to suffer a limited period of freeze, rather than the extended, unknown period of dreary misery which is being meted out to them, if only they could feel certain—and this is the key—that that limited period would be used to introduce new policies and a new structure of industrial relations which would allow a return to responsible freedom and provide the hope of new economic progress.
  Mr. Shore: The right hon. Gentleman should clear up this important point. Does he say that it is the Opposition's policy that there should be a statutory freeze on incomes at the present time? If so, for how long should it be operated?
  Mr. Carr: I am very kind to the right hon. Gentleman, compared with his intolerance of interventions, in allowing him to try to make a misrepresentative intervention. I did not say that. I said that even now, as an alternative to what the Government are doing, the trade unions and the country might have preferred it. I am now going on to say what a Conservative Government will do.
  The very term "incomes policy" has become abused and adulterated. I must explain what it means, therefore. It really means balancing the equation between earnings and production, and that equation will never be balanced by operating on one side of it alone. It is too easily forgotten, not only by the Government but by many of the most prominent commentators, that Britain's failure relative to other industrial countries has not been a failure to hold down earnings. That has been pointed out by my right hon. Friends and by hon. Members opposite. In most other major industrial countries, earnings have risen

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  in recent years faster than in Britain. Where we have failed relative to them is in matching increased earnings by increased production and higher efficiency.
  There will never be a successful incomes policy in any sort of free society unless it is part and parcel of a comprehensive set of economic industrial proposals radically different from those now operated by the Government. This is true in the short term just as much as in the long term, and there are seven major requirements.
  First, there must be a proper overall balance between supply and demand, and particularly a closer balance than has usually been the case in the past in each main industrial area between the number of jobs vacant and the number of people available to fill them. This is not only a question of broad economic management. It also involves far more radical schemes for improving the mobility of labour, including a new concept of retraining of adult workers. My right hon. Friend the Leader of the Opposition has been repeatedly speaking about this during the last year, and we are actively considering radical new schemes. We only wish that there were some sign of the Government doing likewise.
  Secondly, there must be a reduction in the proportion of the gross national product absorbed by Government expenditure for non-productive purposes. This is essential. Until the Government have done it, no further progress will be possible.
  Thirdly, there must be radical new measures to stimulate personal savings—a scheme of "save as you earn" as well as "Pay As You Earn", as my hon. Friends have said. Fourthly, we must make use of the elbow-room obtained by lower Government spending and higher personal savings to give more incentives by cutting direct taxation.
  Fifthly, the Government must set a firm example in their own field as employers and in the related field of nationalised industries. They must be stringent in their criteria there.
  Sixthly, we would reconstitute the present Prices and Incomes Board into a new productivity board. Some of the work of the Board has had valuable results in promoting sensible productive bargaining, for example. The trouble is
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  that it has been used by the Government too often for the wrong purposes, and far too often in any case. That is why a new start has to be made.
  Our proposed Productivity Board would have two main purposes. The first would be to inquire into and report on important collective negotiations prior to the stage when settlement has been reached. The purpose would thus be to influence settlements rather than to upset them. Thus, while we reject outright the concept of statutory control and the use made by this Government of the Prices and Incomes Board, we see a valuable rôle for an independent investigating agency, operating through the influence of inquiry and report.
  The second function of our new Board, and one closely related to the encouragement of genuine productivity bargaining, would be to act, again through the process of inquiry and report, as an investigating agency into restrictive practices in the use of manpower, something which we are convinced is urgently needed.
  The seventh and last of the main headings of policy is a new Industrial Relations Act, to create a radical, new and comprehensive framework of law, governing not just the trade unions, but the conduct of industrial relations as a whole. These proposals will no doubt arouse controversy, not least among hon. Members opposite, who share most strongly our opposition to statutory powers. That is why I hope they will consider what I have to say very carefully.
  The arguments are inevitably complex and detailed, and I will not try to list them in headline form at the end of a speech like this. Were I to do so, I would be in danger of adding to the controversy without increasing understanding. We have already spoken about and published our proposals in this House and outside it. We intend soon, and I mean soon, to publish these proposals in detail with full supporting argument and analysis in a report which will be available to the public and, of course, hon. and right hon. Gentlemen opposite.
  Mr. Mendelson rose—
  Mr. Carr: We—
  Mr. Mendelson: On a point of order. My right hon. Friend, in accordance with tradition, gave way 11 times. The right

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  hon. Gentleman has refused to give way even twice or three times. It ought to be put on the record. He is frightened to reveal his policy.
  Mr. Deputy Speaker (Sir Eric Fletcher): The hon. Member knows that that is not a point of order.
  Mr. Carr: I am sure that when HANSARD comes to be looked at tomorrow I shall be found to have given way at least as often, I suspect more often, than the right hon. Gentleman. We are not afraid to disclose our policy we will be publishing it in detail.
  These proposals are the outcome of very deep study, lasting over the past three years. That study has been carried out not only by Members of Parliament, not even only by those who call themselves Conservatives, but also with the help of people with deep knowledge of the practice of industrial relations, from the trade union as well as the employer side of the picture. In such a complicated matter, these studies will continue and we shall naturally want to take account of what the Royal Commission has to say. Our proposals, as they will be published, represent a deeply considered set of proposals which will be the basis for action by the next Conservative Government.
  To those in this House and outside who, by instinct and emotion bred in the past, may automatically be inclined to oppose our proposals, I would say this—and I hope that hon. Gentlemen will listen carefully, because they must consider where trade unionism is going in this country. The life force of independent trade unions is free collective bargaining, and this is being strangled by legally enforced incomes policies. No one knows that truth better than hon. Gentlemen opposite. What will stop that process? We have heard today that the legal compulsion, which was to be for one year and then two, is now to be continued for a further 18 months, with powers for renewal. That is how it will go on. Who can have faith that it will not continue permanently on this basis?
  The break has to be made, and we have to return to freedom. There has to be a freedom which works more responsibly than before. The new legal framework, providing greater authority and freedom for responsible trade
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  unionism, is the only long-term alternative to a continuation of statutory control which, while it may vary in intensity from year to year, will inevitably tend to become more authoritarian and comprehensive. The sort of new law which we are proposing is comparable to that existing in every other major industrial country except Britain.
  It has been found by trade unions in other countries to strengthen, not to weaken, the influence and authority of constitutionally appointed union leaders and to increase, not decrease, their ability to serve the interests of their members as well as the interests of the nation as a whole. Is there not a direct connection between the fact that Britain is the only large industrial country in which wages are now held down by law and the other fact, that Britain is also the only large industrial country which does not have comprehensive industrial legislation of the kind that we are proposing?
  We do not imagine for one moment that the new law can, on its own, solve all the problems of human relations in industry. We do not suggest that these problems can be overcome by bringing large numbers of people into court, least of all by holding over them any threat of imprisonment, but the Government's policy does just that. We believe that the present law, largely antiquated, incomplete and often unjust in its effects, is handicapping voluntary action by both sides of industry. We believe that a new, fair and comprehensive law can provide a new environment in which responsible voluntary action within industry would have more opportunity and provide more incentive to succeed.
  Here then are seven interlocking proposals, which form a comprehensive, constructive alternative to the misguided and failing policies to which this Government are committed. The last Conservative Government succeeded, as I have shown, in having a more effective incomes policy than this Government without statutory control. Those are facts which cannot be denied. We are convinced that our previous methods, supplemented by the new policies which we have indicated this afternoon, would be even more successful.
  We are also absolutely convinced, not on the basis of dogma or theory, but practical effect, that the Government's

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  strengthened statutory policy outlined by the right hon. Gentleman will fail, just as badly as their previous attempts have failed, and that, in their failure, will cause further and perhaps irreparable damage to freedom and responsibility, as well as to economic efficiency. We are convinced that the 1968 Prices and Incomes Act, when it is introduced, like its predecessors, will be a vain hope, bred by desperation out of failure, and we shall oppose it, as we have opposed the previous Measures.
  5.38 p.m.
  Mr. David Marquand: I do not think that I have ever heard a more certain recipe for social dislocation and perhaps even class war than that propounded by the right hon. Member for Mitcham (Mr. R. Carr). The House ought to remember exactly what he said about the economic strategy propounded by the Government. He said that he accepted that the total amount which my right hon. Friend wants to take out of the economy is correct. Then he said that in his view the Government should cut direct taxation in order to provide more incentives. Finally he said that the Government should cut public expenditure.
  We all know that the Conservative Party stands for increasing defence expenditure. What this means, therefore, and it can only mean this, is that the right hon. Gentleman stands for increasing indirect taxation and drastically reducing social expenditure. In other words, the policy which is being propounded from the benches opposite is that the sacrifices, which the whole House agrees the community will have to bear in order to make devaluation work, shall be borne by the poorer sections of the community. That is the policy of the party opposite; there is no escape from that logic.
  I do not want to spend much of my time debating with hon. Members opposite. Since I have come into this House the most interesting debates on economic affairs which have taken place in the House have been between members of my own party rather than across the Floor. The debate this week is no exception. I want, therefore, to concentrate on the arguments which have been advanced by some of my hon. Friends from below the Gangway. Before I do
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  this, however, I would pay very warm tribute to my right hon. Friend the Chancellor of the Exchequer on one aspect of his Budget speech which I think will be quite uncontroversial and which I do not think has yet been mentioned in the debate; that is, the decision to publish for the first time the Treasury's official forecast. This is a very important step forward.
  I take this opportunity to urge the Government to go one step further and set up a Select Committee of this House on finance and economic affairs, so that we can examine these and other official forecasts in a good deal more detail and, above all, so that we can examine the decisions which are based upon them.
  The whole procedure of this House needs to be radically reformed, in order to enable elected Members to control the central, strategic, economic and social decisions which determine the way in which the economy and society develop over the years. The first step towards this is to set up the kind of select committee which I have in mind. I would urge the Government to consider this very seriously indeed.
  In the debate yesterday we had a very interesting and important speech from my hon. Friend the Member for Tottenham (Mr. Atkinson), who, perhaps without realising it, challenged the central premise on which the Labour Party is based. He said:
  "Labour Governments exist in a hostile economic environment. Whatever their policy, the economic environment is hostile to their political concept. Therefore, the Government must either concede political and economic principles to their opponents and work in a concensus arrangement or, if they reject that, start to pursue a Socialist policy which must inevitably be hostile to those sources in the economy whose confidence they attempt to gain."—[OFFICIAL REPORT, 20th March, 1968; Vol. 761, c. 488.]
  In effect, I think my hon. Friend was saying that democratic Socialism cannot work in a mixed economy; that a democratic, Socialist Government in a mixed economy is confronted by such hostility from the existing holders of social and political power that it has either to abandon its Socialism or its tenure of office. That seems to be the essence of the argument put forward by my hon. Friend. I am glad to see that others of my hon. Friends agree with me that this is what he meant. This is an argument

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  which the Labour Party ought to take very seriously. It cannot be dismissed.
  The Government's record from October, 1964, to November, 1967, undoubtedly gives a good deal of force to the argument of my hon. Friend the Member for Tottenham. In spite of many very important social advances, the Government did fail on the central issue of economic policy. The National Plan, which all of us saw as a very valuable experiment in planning by consent, was torn up.
  Mr. Biffen: The hon. Gentleman should speak for himself.
  Mr. Marquand: The concept that the centrepiece of the Government's economic strategy would be a high rate of growth was abandoned and, when the Government faced the choice between sticking to the old parity of sterling and abandoning planning and growth, they stuck to the old parity of sterling. This is a very severe charge which can, and must, be levied against them; there is no question about it. What I would say to my hon. Friends below the Gangway, however, is this: this does not prove that a gradualist, democratic, Socialist policy does not work; it merely proves that from October, 1964, to November, 1967, it was not tried.
  The situation is now different. Thanks to devaluation, we do now have the possibility of going back to the policy of high growth; we do now have the possibility, for the first time since 1950, of combining a balance of payments surplus with a high and continuous rate of growth. Indeed, in his Budget my right hon. Friend the Chancellor of the Exchequer has had to make strenuous efforts to bring the rate of growth down from the excessively high level, which it might otherwise have reached in the short term, to a level of 3 per cent.—which, of course, is a good deal higher than the rate of growth we have had in the past few years. In other words, the situation that faces us at the moment is not one where we have to fear excessively low growth, but one in which, if nothing is done to stop it, the economy may grow too rapidly.
  In fact, devaluation has transformed the situation. I would beg my hon. Friends below the Gangway to realise this. We are no longer arguing in a pre-devaluation
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  situation; we are now arguing in a situation where high and sustained growth is well within our grasp, provided we have the self-discipline and courage to accept a couple of years of rather severe hardship.
  There are, as I see it, three main criticisms which are advanced from within the Labour movement against this Budget. In the first place, the charge is made that this Budget cuts the living standards of working-class people in this country. There is no question about it—it does. We all agree on this. This is the harsh, inescapable fact. But any policy which is aimed at transferring resources from domestic consumption to exports and to import substitution must, to that extent, reduce the living standards of the people of this country. One cannot have it both ways. One cannot use the same resources both to improve one's balance of payments and to improve one's home consumption. There can be no escape from this dilemma. It is not the case that devaluation has made it necessary to cut living standards. Any successful policy aimed at transferring resources would do this. The difference between devaluation and the alternatives is simply that devaluation does the job very much more quickly, in a short, sharp blow, instead of drawing it out over a longer period.
  The second charge which is made against this Budget is that it is, as it has been termed, a bankers' budget.
  Mr. Russell Kerr: By The Guardian.
  Mr. Marquand: The Guardian has changed a great deal since I wrote leading articles for it. I no longer accept any responsibility for the editorials in The Guardian.
  I am not clear what is meant by the term "bankers' Budget". If it is supposed to mean the Budget has been drawn up and dictated by the I.M.F., then the idea is nonsense. This is not how the I.M.F. works. If it means that in his Budget judgment my right hon. Friend had to take into account not only all the objective, economic considerations, but also subjective, psychological, confidence factors, then, of course, it is true. In that sense, it could be called a bankers' budget.
  Mr. Orme: Is that not the central theme of the earlier argument that my hon. Friend used when my hon. Friend

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  the Member for Tottenham (Mr. Atkinson) talked about pressures, particularly outside pressures from speculators, which make it so difficult for the Government to cary out its policy of growth?
  Mr. Marquand: No one disputes that it is difficult for a Socialist Government in a mixed economy and in a capitalist world to carry out these policies. But my hon. Friends must agree that, with the world monetary system in its present fragile state—as we know it almost collapsed last weekend—it would be suicidal for any British Chancellor of the Exchequer to ignore confidence factors. Of course my right hon. Friend had to take confidence factors into account.
  The third criticism, which is perhaps the most serious one, is made not only from this side of the House, but was also hinted at by the hon. Member for South Angus (Mr. Bruce-Gardyne) in his very interesting speech yesterday. It is the criticism that this has been an "overkill" Budget, that it will deflate home demand excessively, that it may induce other countries to do the same, and that we may face a recession in world trade as a result of beggar-my-neighbour policies like those adopted in the 'thirties.
  That danger undoubtedly exists, and the Government should admit it openly. There is a danger that the world could go back to the policies of the 'thirties. We saw just how great this danger is during the gold crisis last week.
  But the underlying cause of the gold crisis had nothing to do with this country. It was caused by the deficit on the United States balance of payments—
  Mr. Orme: And the Vietnam war.
  Mr. Marquand:—and the chronic surpluses being run by the E.E.C. countries. It is not possible to achieve a steady and stable expansion of world trade unless the E.E.C. countries are prepared to run down their surpluses. It is not just a matter of the deficit countries getting themselves into surplus. It is also a matter of the surplus countries being prepared to operate responsible policies. I cannot see that for Britain to perpetuate its existing deficit will help the situation in any way. In fact, it can only make it worse.
  In that situation, I do not believe that my right hon. Friend had any alternative
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  other than to go for a large balance of payments surplus as rapidly as possible. Only if we do that shall we have the remotest hope of being able to persuade the E.E.C. countries to behave in a sensible fashion.
  Mr. J. Bruce-Gardyne: I agree with the hon. Gentleman that, having got themeslves to 19th March, the Government had no choice but to have a degree of over-kill this time. However, if they had acted more promptly and, above all, tackled the problem of public expenditure, they could have reduced the risk of over-kill.
  Mr. Marquand: That brings me to my next point, which is the question of public expenditure. This is the crucial philosophical difference between the two sides of the House. The recipe advanced by right hon. and hon. Gentlemen opposite is that we should cut public expenditure. However, since most of them are in favour of increasing defence expenditure, that must mean cutting social expenditure.
  The essence of what the Labour Party stands for in a mixed economy in the second half of the twentieth century is the steady shift of resources from the private sector to the public sector. That is what it is all about. In fact, the total economic strategy of my right hon. Friend does that to a very marked degree. The Treasury forecast to which I referred earlier reveals that public expenditure is likely to increase by 2 to 2½ per cent. At the same time, my right hon. Friend is asking for a reduction in private consumption for the first time in seventeen years. I do not believe that any member of the Labour Party could ask for more. It is a really heroic shift of resources to public expenditure at a time of very severe economic stringency. That is why the party opposite do not like it and why I believe it deserves the fullest support from this side of the House.
  Mr. David Howell: I hesitate to interrupt the seminar on elementary economics which we are hearing from the other side of the House, but is the implication of the hon. Gentleman's argument that there should be a steady shift of resources from private consumption to public consumption within a growing G.N.P., that under this regimé

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  in the second half of the twentieth century there will be a steady and continuous increase in taxation under a Labour Government?
  Mr. Marquand: Yes.
  5.55 p.m.
  Mr. John Boyd-Carpenter: No doubt the sudden and unhappily unexpected resumption of his seat by the hon. Member for Ashfield (Mr. Marquand) results from his sudden reflection that, to use transatlantic phraseology, he has said a mouthful. He has admitted what so many of my right hon. and hon. Friends have often suspected but which his more cagey right hon. Friends have always been concerned to deny.
  He said that the purpose of his speech was to engage in a private war with some of his hon. Friends. I would not, therefore, wish to be so tactless as to intrude upon it. I hope that I shall not do the hon. Gentleman any undue harm if I say that I thought that he made an infinitely better defence of the Government's policies than was even attempted by the Secretary of State for Economic Affairs when he opened the debate. If I may say so, that is what those of us who know the hon. Gentleman's very distinguished father would expect.
  The speech of the Secretary of State was a shambles. I leave aside his complete ignoring of the conventions of this House and in particular the convention that a Minister speaking from the Dispatch Box, unless he is right up against the time of 10 o'clock, gives way to the right hon. Gentleman sitting opposite. That is a convention which the right hon. Gentleman plainly flouted, and that useful convention could never have been more useful than on this occasion, because, if I understand it aright, we are to have no reply tonight from the Government.
  I am not the right hon. Gentleman's most sedulous admirer, but not even his Parliamentary Private Secretary could pretend that he left a position of clarity about the Government's intentions. What he did was to tell us that the Government will intervene and take statutory powers of a far-reaching nature concerned with prices, wages, salaries and rents. Having done that, he left the matter without giving any practical answers to any of the
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  questions which have been put or, as I understand it, will be put in the course of this debate.
  That is not merely a matter of treating the House of Commons badly, though it is so. Much more important, it is treating the country badly, because, although the right hon. Gentleman in his ivory tower may not appreciate it, ordinary people on both sides of industry have to get on with their jobs during the next few days. All over the country, sometimes between one or two individuals, sometimes at plant level and sometimes at national level, agreements have to be made. They cannot just be put aside simply because the Secretary of State for Economic Affairs is a Parliamentary incompetent. People have to proceed and, as a result of his shambles of a speech, we are left with all sorts of questions unanswered which, inevitably, will remain unanswered for some days. It is clear that, in the language of mariners, the Department of Economic Affairs is on a lee shore, but I did not realise that it had drifted so far.
  Let me put one practical question to the Government which at least the Parliamentary Secretary to the Ministry of Labour will understand. Will an agreement made in the next few days in good faith between a trade union and an employer be one that can be carried out? Or will the Department, if it goes beyond the 3½ per cent., or whatever other criterion the Department wishes to bring forward, intervene to stop it? What is the position of agreements already made? For example, what is the position of an agreement made lawfully and in good faith last week for a 4 or 5 per cent. increase? Can the employer pay it?
  The position is made worse by the fact that the Secretary of State—I took down his words—said that this policy is now in operation. It is all the more lamentable and unpardonable that a policy now in operation is apparently not to be explained to the House of Commons or to the country. People are supposed to conduct their affairs in accordance with the policy now in operation, but no one in any quarter of the House can believe that the guidance given a few moments ago by the Secretary of State will be of the slightest help. This is an intolerable' position. I must press the Parliamentary Secretary, who understands these matters, that some guidance be given today in

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  some way or other to those in industry who have negotiated or are negotiating agreements. This is essential.
  I should like now to make a criticism which seems to emerge from what I understood the right hon. Gentleman to say about the treatment of rents under this new policy. First, local authority rents. It is well known to the House that many of the new majority parties that have taken over in a great many local authorities, as the result of recent local government elections, have inherited very large and growing deficits on their housing accounts. They have sought, therefore, both responsibly and in accordance with, I think, paragraph 41 of the White Paper issued by the Ministry of Housing and Local Government, to adjust that situation. What are they to do now? Are they to halt those increases because they will be threatened with some form of phasing resulting in the reduction of rents already being paid?
  If the Government intervene, with the inevitable consequence, where there is a growing deficit on a housing account, of throwing a substantial additional burden on the rates, will they come to the rescue of those local authorities with an additional rate support grant? Otherwise the Government are pursuing their own policy at the expense of ratepayers who, as a matter of definition, have at recent elections decided in exactly the opposite sense. These are questions which must be answered.
  Turning to the sphere of private rents, I must formally declare an interest. As I think the House knows, I am a director of a property company. We have a system of regulation of rents and the assessment of fair rents. I understand that the process will be that all that will go on and, when a fair rent has been determined, someone from the Department of Economic Affairs will decide over and above that how, when and by what stages that is to come into operation. I suggest that will cause the greatest confusion in this sphere. The Government's existing system for fixing rents is now to be interfered with in its operation by further governmental action.
  The House will recall that many of the people to whom these rents are paid are not property companies. There are a vast number of people with one or two
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  houses—they are the majority of landlords—who depend for their living upon their rents. Many are widows. We are now told that when a rent officer or Rent Assessment Committee, set up to apply the Government's own criteria in the Rent Act, has assessed what is said to be a fair rent, the landlord, dependent on that rent for his livelihood, is to be told, "You cannot have it, or most of it, for quite a time." This is to be done regardless of the relative means of the tenant and the landlord. This kind of clumsy policy, which would be bad enough if it had been properly and clearly explained, puts everybody again in an intolerable position when we have it dealt with in the way in which the Secretary of State saw fit to deal with it.
  Therefore, since we are to be told nothing by the Government, since we have had no explanation and are to have no answer, I turn to the Budget. Whatever complaints one may have about it, no one could conceivably complain about the clarity, the force or the grace of the Chancellor's very long exposition of his financial proposals on Tuesday. These at least we can debate and argue about with a full knowledge.
  The Secretary of State for Economic Affairs made one extraordinary reference to public expenditure. He said there would be a slight increase in public expenditure. As, on Monday night, the Chief Secretary to the Treasury told the House that the Estimates for 1968–69, after certain adjustments to make them comparable, were going to be up 10 per cent. compared with 1967–68, the use of the word "slight" by the Secretary of State bears a rather odd connotation. I wonder whether someone could tell me what the Secretary of State would regard as a moderate or, indeed, a substantial increase in public expenditure if 10 per cent. is slight?
  On this point of the Budget judgment I should like to make a comment. I take first, what the Chancellor said on Tuesday:
  "For this purpose we must check the growth of public expenditure and private consumption which were the main expansionary forces last year, and release the resources necessary to sustain as large an increase in exports and industrial investment as possible."—[OFFICIAL REPORT, 19th March, 1968; Vol. 761, c. 259.]
  I ask the House to note that the right hon. Gentleman bracketed together, as

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  matters which should be restrained, public expenditure and private consumption. He has told us—and I have no reason to doubt his figures—that the effect of his measures on private consumption will be to reduce it by 1 per cent. below the present level or by 2 per cent. below the level it would otherwise have attained. On the other hand, we have heard from the Chief Secretary that the other matter which the Chancellor bracketed with private consumption—public expenditure—is estimated to rise by no less than 10 per cent. in money or 61 per cent. in real terms. It is a curious bracketing of two matters to allow one to rise by 10 per cent. and to reduce the other overall by 2 per cent.
  This leads to the criticism I make about the whole basis of the Budget. We know, because the figure has been repeated over and over again, that the Chancellor seeks to take out of consumption in a full year £923 million. The Chief Secretary's figures on Monday night on the other hand, showed that estimated expenditure on estimates would rise by £1,017 million. The figures are of the same order of magnitude. But the increase in the Estimates is somewhat the larger.
  Those figures must surely mean that the great increases in taxation now being imposed on our fellow citizens would not have had to be imposed in anything like so sharp a degree if the Government had exercised even a reasonable measure of restraint on public expenditure. It must be clear that if the Chancellor had been faced with an increase in public expenditure of half that with which he was faced, he would not have found it necessary to introduce increases in taxation of the order of those which he has put forward.
  Therefore, it is important that the House and people outside should realise that these heavy imposts are not necessitated solely by an economic crisis, by whoever caused, and they are not the inevitable result of world economic disturbances or a flurry in the gold market; they are in substantial measure the bill which has to be paid for the Government's failure to restrain their own expenditure. It is important that this should be realised, and that we should not pass too easily into talking about whether the Chancellor has indulged in an overkill or not, without
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  at the same time having in mind that the whole basis of the figures on which the Chancellor had to operate involved taking into account, as the Chancellor undoubtedly did, the large increase in public expenditure which has resulted from the Government's policy.
  The public will take these increases the more sourly because they are so contrary to what we were promised. I shall not weary the House by repeating the oft-quoted statement of the Prime Minister about no general increase in the levels of taxation, but I remind the House of what the Chancellor said in his book "Labour's Case" a few years ago in Chapter VIII:
  "The commitments of the Labour Party's policy,"—
  and I ask the hon. Member for Ashton-under-Lyne (Mr. Sheldon) to listen to this—
  "provided they are not all pushed through in the first year, which nobody has ever suggested—can be carried out comfortably without any question of an increase in the tax burden. On the contrary, they should leave room for substantial tax reductions."
  That is the published statement of a leader of the party opposite, and therefore the public have the right to resent it intensely when the largest increase in taxation in time of peace, and the rise of the Estimates to the highest level they have ever known in time of peace, takes place under a Labour Government, under a Government who made promises and gave assurances of that kind. Even assuming that increases of this sort, or of some sort, had to be made, I think that they have been made with extraordinary ineptitude.
  Perhaps I might now deal with the collection of imposts which will increase transport costs—on petrol, vehicle licences, and by way of Purchase Tax, all operate on the most sensitive part of the cost structure of industry, all operate to increase the cost of moving components to the final assembly line and the final assembled article to the ports for export. What is the use of the Secretary of State for Economic Affairs saying that he will control prices, that if prices rise too high he will use the power of the law to bring them down, when it is the Government themselves, through these tax increases, who are deliberately inflating the costs of British industry, and taking away at any

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  rate some part of the competitive advantage which was the one gain from devaluation. It is extraordinarily inept to operate in a way which produces so substantial an increase in transport costs.
  I come, now, to discuss the effect on invisible exports of the swingeing increase in the S.E.T. Yesterday the President of the Board of Trade praised, and rightly so, these activities which produced £3,000 million of invisible exports. He said that invisible exports, unlike visible ones, turned out last year with a balance on the right side. These activities include banking, insurance, shipbroking, and merchanting, and every one of these activities is caught by the full blast of S.E.T., at a rate of 37s. 6d. for a man. What use is it appealing to these activities to be competitive when the Government want only add to their costs by this large increase in this crazy tax? It is of the nature of the tax that it discriminates, and does so strongly, against those activities which earn us these invisible exports which the President of the Board of Trade went out of his way to praise.
  I have one or two questions to ask about the proposal to aggregate the income of children under 21 with that of their parents. How far is this to go? Is it, for example, to cover a child who is living away from his parents, though he is under 21? Is it to apply to a child under 21 who is married? If it is, will it apply also on the ordinary principle of taxation to bring in the earnings of the child's wife? I hope that I shall receive answers to those questions. One reason why minors under 21 sometimes have substantial investment incomes is that they have received awards from the courts in respect of serious, and sometimes terrible, injuries. The classic case at the moment is that of the thalidomide babies who, as a result of a recent settlement, have received, I think, about £40,000, which, curiously enough, invested at present would produce about £3,000 a year income. Is income from such damages, properly invested, to be aggregated with the parents' income? If a child receives heavy damages because of personal injury, will this mean that his parents Income Tax will be increased?
  Mr. James Dickens: That is a Committee point.
  Mr. Boyd-Carpenter: The Chancellor has announced this to the country, and people outside who are concerned want to know the answer. It is not my fault if the Government do not know the answer to this question, or to any others that are put to them.
  The Financial Secretary said last night that no one had criticised the surcharge on Surtax on investment income. I think that he spoke a little too soon. I think that a rate of 28s. 3d., which is the top rate of combined tax, on any income is intolerable, and I regard it as economic madness. The Chancellor said that we could not continue with this because it would encourage people to invest their money in unremunerative ways. The fact that the larger their income at that level, the greater the amount of taxation at more than 20s. in the £ must mean that people are given an interest to diminish their income. To do this shows an ignorance of the whole way in which the capitalist system works. Apart from the fact that investments derive from many sources, including savings from a lifetime's work, it seems peculiarly crazy to take such a step.
  The Chancellor told us that the object of his restrictions on overseas investment was to secure that these remained selective. This sounds very reasonable, but he told us a few moments later that he was continuing to impose the special discriminatory restriction on investments in Australia, New Zealand, South Africa, and the Irish Republic. I can understand a selective restriction, in our present circumstances, on investments aimed at securing right across the sterling area a good return on the money invested, but what seems wholly irrational is to impose on top of that a special negative discrimination against investment in precisely those areas where investment is likely to be most remunerative and therefore most in the interests of this country.
  The first result of this is that we are losing the opportunity to take part in the surging progress of Australia. I was there last autumn, and I saw the opportunities that we were throwing away. I saw, too, the reaction of Australians to what they regarded as wholly irrational discrimination against investment in their country. It is no good the Chancellor saying blandly that he wants to make investment more selective, if at the same

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  time he selects out, if one may so put it, investment in the areas in which investment makes most sense. How can it be in the economic interests of this country to permit investment virtually unchecked in Tanzania and Gambia, and restrict it in Australia and New Zealand? I hope that someone will explain what the Chancellor meant by selection of that kind.
  The most damning indictment of the whole Budget comes from the Government. The fact that they have thought it necessary to reinforce this unprecedented increase in taxation by compulsory control of wages, prices, rents, and the rest of it, is the most vivid indication that they have no confidence that the Budget, unaided, will do the trick. They are not themselves convinced of the adequacy of their measures and on this point they are right.
  Every unbiased commentator knows that what is needed is something which will persuade boys and girls to stop at home and to train themselves, and not to join the "brain drain", and something that will make the rest of us work harder and save more. Yet I challenge any Minister who takes part in this debate to point to one single aspect of this Budget which will keep a single bright young person in this country or cause any of the rest of us to save an extra penny or to work even half an hour more; and that, after all, is the ultimate test of the Budget. By that test it fails and that failure will bring down a good deal more than the Budget. It will certainly bring down the Government and it will do this country much harm.
  6.20 p.m.
  Mr. W. Howie: I found two points of interest in the speech of the right hon. Gentleman the Member for Kingston-upon-Thames (Mr. Boyd-Carpenter), the whole of it delivered with his customary eloquence and grace. He pointed to one particular aspect of Government policy which interests me, namely, the proposals to interfere, as he saw it, with the rent arrangements which now prevail. It is a very severe Budget and with the severity and restraint which many people are going to feel in the coming years the psychological effect of an apparently arbitrary increase in rent should not be over
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  looked. I feel that the right hon. Gentleman rather under-estimated the pain and anxiety which ordinary working people feel when their rent is increased by, let us say, 10s. or more in what appears to them a sudden and unreasonable way. I am sure that the right hon. Gentleman, with his experience of property matters, knows this but he did not quite bring it out. It was a pity that once again he dragged in the widows. No doubt there are widows who own houses and are landlords but we have for many years had rather much of widows and orphans.
  I want to touch on the incomes policy aspect of the Budget, the other point in the speech of the right hon. Gentleman which particularly caught my interest. He thought that the existence of the incomes policy suggested that the Government believed that the other aspect of the Budget would not work. I can quite see his point as a serious criticism of the whole, but I would invert the argument and look at it the other way.
  I would feel that the size of the general tax burden—and it is very large indeed—really suggests that my right hon. Friend the Chancellor of the Exchequer has had rather less of a total success from the prices and incomes policy; and, in so far as the word "over-kill" can be used, the Chancellor is really carrying into effect a warning he gave some time ago that if the voluntary incomes policy did not work—and I would think that virtually every person on this side of the House would prefer a voluntary policy to any other kind—he would have to apply taxation. I feel that that is what he has done and in a way he has given himself plenty of elbow room so that if the voluntary incomes policy does work he may be able, at a later date, to relax some of the taxes he has imposed. I am reinforced in this belief by the comment made by my right hon. Friend the Chancellor of the Exchequer in presenting his Budget statement on Tuesday last when he said:
  "A firm and effective incomes policy is not a substitute for fiscal action as an instrument of demand management."—[OFFICIAL REPORT, 19th March, 1968; Vol. 761, c. 263.]
  I feel that the right hon. Gentleman the Member for Kingston-upon-Thames had a point but unfortunately that he had it upside down, though it is none the less interesting for that.

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  Touching more generally on prices and incomes, I feel that it is important to write that policy in, not as the central part of the Government's economic policy but as an important peripheral part of it. Although I have supported the Government, and continue to do so, on its prices and incomes policy, I feel that overmuch emotion has been expended on it and certainly overmuch has been expended in opposing it. What strikes me about the present situation is that in his Budget statement the Chancellor has promised some kind of action of a statutory nature, particularly on prices and dividends and, of course, the action on rents of which the right hon. Member for Kingston-upon-Thames so strongly disapproves.
  These are items of statutory policy which many of my hon. Friends, particularly those who are active in trade unions, have been asking of the Government for a very considerable period. To some extent they have won their point, in that the statutory limitations on wages, which are the things which so strongly concern them, are being reinforced by statutory limitations on other forms of income and on rent.
  We might argue about the efficacy of these statutory measures in relation to prices, wages and rent, but the general point has been conceded to my hon. Friends. Since trade unionists have been asking for these concessions from the Government for a considerable time, as they undoubtedly have, it will prove interesting to me as an unbiased observer to see how they react to this substantial move in their direction by the Government. Unfortunately, in this respect, if I may be mildly critical for a moment, Mr. Scanlon's appearance on television on the evening of Budget day was not very promising. I realise that he was elected in a certain context so that this was not unexpected, but it seemed to me that in his approach—and he made the same approach in a debate at Croydon a week or two ago—he saw the trade union movement as the working man's end of the capitalist system.
  This is an old comment which was first made long ago. In our mixed economy there is a good deal of force in looking at the trade union movement from that standpoint. That must be admitted straight away. But what strikes me as being rather wanting in that
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  approach nowadays is the fact that we do not have quite the laissez-faire capitalist system we had when the trade union movement was originally conceived; and it is a little disheartening to find that the one corner of the economic activity where people on the Left of politics are advocating a free market is in wages. This is not the best way to run the wages and incomes side of the economy.
  One thing in my right hon. Friend's approach that has interested me is that although a ceiling of 3½ per cent. has been suggested recently for wage increases he has made an allowance for higher increases in terms of productivity. That approach is entirely right, and justified, mainly because it is from increases in productivity that the increased wealth for which we are looking will come rather from people working harder in the old-fashioned way.
  That being so, I should like to see the Government encouraging a great increase in local as opposed to national bargaining. Nationally bargained productivity increases must be very general, but a productivity bargain struck at the local plant can be specific and result in real as against illusory productivity increases. To me, the logic of the productivity part of the prices and incomes policy must lead to more rather than less local bargaining.
  It seems to me to lead to something else. A productivity bargain within the criteria laid down by those in authority, having been obtained at local level, it seems logical to believe that the local trade union officials would not then end their interest in the bargaining. Once productivity bargaining became usual at the local level, I think that the union would interest itself in seeing that the productivity actually came about; and that, in a sense, the trade union would begin to take over part, at any rate, of the prerogative of management. Obviously, this will not be a very easy change to make, but it seems to me to be a natural and very worth while change.
  On the incomes side, I want to refer to a minor irritant, and I will no doubt at some time receive an answer. Comment has already been made today about the problem of receiving answers, but I am patient, and I can wait until Monday or even longer for a reply. The minor

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  irritant in this wage bargaining is the treatment in respect of the first three days of sickness. I do not, at first sight, see the point of that particular Draconian measure, if it is one. Is it the idea that the temporary loss will be made up by the firms themselves—as, in some cases, it is—or that will be made up by some avenue available to the Ministry of Social Security? This is a minor matter in terms of the economy, but it is very far from being minor in the eyes of a man who might not be chronically sick but could easily be off work for a day or two on, perhaps, three or four occasions in the year.
  Since my constituency is heavily engaged in the manufacture of motor vehicles I have looked at those aspects of the Budget that are of interest to the industry. In my constituency there are two very large motor car manufacturers, both of them American. I am pleased that my right hon. Friend has resisted a temptation that has not always been resisted in the past to strike the motor car industry rather hard.
  This is a very important industry, and it is sometimes very sensitive to economic change. It sometimes seems as though it were assuming the same importance in our economy as does the cocoa bean in that of Uganda. It has not yet got to that stage, but I am particularly glad that the Chancellor of the Exchequer has resisted the tempetation to increase hire-purchase charges and make changes in hire-purchase arrangements, because that is the economic change which most suddenly and startlingly hits the industry.
  The comment of the motor manufacturers in my constituency is of interest, and is in contrast to the rather hysterical outburst of Sir Donald Stokes. They believe that the effect of the Budget on motorists will permit the firms to meet the level of home market demand. Their problem until recently has been that the level of home market demand for their cars—which, incidentally, are very good cars—has inhibited their export effort. They feel that the slight reduction in home demand will permit them more and more to increase their export effort. That local statement justifies my right hon. Friend's present attitude to the motor car industry.
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  I might at this point add that the proposed changes to the Transport Bill will be welcomed by the industry. They will be welcomed by me for quite different reasons. Obviously, I do not regard myself as a spokesman of the motor car industry, but I spent a considerable part of my life before coming to the House as a builder of bridges and roads. I am therefore familiar with the wear and tear on roads caused by heavy traffic, and with the bridge design problems caused by abnormal loads. Nevertheless when the wear and tear and abnormal load charges were first proposed, I thought that they might have been more readily justified by publication of the data on which they were based. It is quite conceivable that the information is appropriate to the charges, but I should like to know.
  The right hon. Gentleman the Member for Kingston-upon-Thames referred to the heavy increase in the Selective Employment Tax. I have always supported this tax because it is cheap to collect and seems to me to be infinitely flexible. There seems to be no reason why any Chancellor of the Exchequer should not at any given time adjust the different sections into which the tax is divided to suit his specific purposes. But I think that the present division of the tax into three main groups is slightly crude, and I should like to see it further subdivided.
  Since in the Budget some relief is being given to some part of the hotel trade, for example, the idea of flexibility must be in my right hon. Friend's mind, and I should like him to take a very shrewd look at the position of the consulting engineering world. It is, in a sense, a service industry, but in a sense it is a manufacturing industry as well. We all know that if a drawing office is added to a plant it is manufacturing; if it is along Victoria Street as a consulting engineer's office, it is not. However, this is itself a very important exporting industry. Whether its exports are visible or invisible I would not care to say, but the export of design is important to Britain and important to our technological reputation. In addition, the fact that a job is being done through a British consulting engineer very often has a direct result in orders for British machinery and plant of various kinds, and those orders are important to us. The consulting engineering world suffers under the weight of

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  S.E.T. I would very much like that to be looked at if the Chancellor could see fit to do so at some time.
  This was a necessary Budget. Its severity is undoubted, but I think it is a just Budget. I do not think there are any sections of the community who can cry out that they have been unfairly treated. It seems to me to be a brave Budget in political terms, and a clever Budget, and one which was brilliantly introduced by my right hon. Friend. It is a Budget which deserves to succeed. I strongly support it.
  6.41 p.m.
  Mr. David Howell: I listened with interest to the speech of the hon. Member for Luton (Mr. Howie) without agreeing with all of his points, but I certainly found myself agreeing with what I understood him to imply about the whole of the incomes policy, that in some ways it was a bit of a sideshow. I believe the same label applies not only to the incomes policy but to the Department of Economic Affairs and to the Secretary of State for Economic Affairs as well.
  We have been presented with a Budget in which, we are told, there are three constituent elements, three supports on which the strategy for restraining demand rests, so that room can be made for exports. I should like to comment on all these things together, because however skilfully the Chancellor may have presented his taxation increase proposals on Tuesday, they are only one support out of the three. No matter how urbanely and in however balanced a fashion these things may have been put over, if the other supports of the strategy have feet of clay then the whole thing collapses.
  Before I do that, however, I should like to add to the bouquets which have been thrown to the Chancellor by hon. Members on both sides, and, indeed, to the Financial Secretary to the Treasury as well, for their decision to publish 18-month forecasts of likely economic performance. This is a really valuable and excellent advance, and I agree with the hon. Member for Ashfield (Mr. Marquand) who said it was important now that the Government should go further.
  Now that we have got the figures let us for goodness' sake have a forum in
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  which we can have a civilised debate about these things; let us know the views of those officials and the arguments which led up to the publication of the figures; let us question them, and let us have a genuine public debate about the evolution of public expenditure. I think that is important. It is the message which the Lord President of the Council should carry in his head, if he has the time to turn from other things, for I think it an important advance in the country's economic policy.
  Having said that I should like to turn to the three elements. First of all, the taxation element, of which we heard on Tuesday; second the control of public spending element, of which we have heard a great deal from hon. Members on both sides; and thirdly, the incomes policy element about which we have heard a great deal today.
  Let me start with public spending. We should make no bones about it. The size of the taxation bill announced on Tuesday is, of course, a direct reflection of the fact that public spending is out of control. About that I should have thought there could be little doubt. Indeed, it is something which the Government had themselves indicated. It is not as though the Government have not at any rate attempted to cut public spending. As hon. Members opposite will remember, the history of the last two years is littered with attempts by the Labour Government to cut public spending. Time and again notional cuts of various size have been announced. On 8th February, 1966, there was talk of £200 million which, we were told, must be taken off; on 20th July last year another £250 million was to come off; on 18th November, 1967, devaluation time, another £400 million was to come off; on 16th January this year there was another £300 million to come off this year and £416 million next year. So that somewhere in the Government machine there is agreement that there should at least be an attempt made to try to bring public spending under control.
  Yet at the end of all that, what do we have? Figures indicating that by 1970 public spending will actually be running at a higher level than that projected in the now discarded National Plan which was related to a wildly ambitious idea of a steady 3·8 per cent. a year growth in resources. That is the picture at the end

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  of the attempts by the Government to have some sort of control of public spending. That is the picture, and it is one of failure. How that squares with what the Chief Secretary said the other night, that public spending is under control and on target, heaven only knows.
  Mr. Russell Kerr: Would the hon. Member not agree that as a matter of practical politics the only area in which saving can be made is in defence?
  Mr. Howell: No. I would not. I want to come on to a number of other areas, but I noticed earlier that the hon. Member for Ashfield seemed to think the choice was between defence and social spending. I did not interrupt then, but that is a quaint view of the structure of public spending, which involves many other areas as well, on which I will touch in a moment, if the hon. Member will allow me.
  It seems that there are really two approaches to the whole business of Government and public spending. There is what one may call the heartrending approach, and there is the good management approach. Of the heartrending approach we have seen an example. It involves the Government shutting themselves up in the Cabinet Room for a day or two allowing a few leaks to the Press about the agonies they have gone through. Then they emerge after a few days and saying they have decided to reverse, rather arbitrarily, a range of policies which previously, perhaps only a few weeks previously, they were solemnly asserting, both to their supporters and to the outside world, as something they would not reverse. That is the heartrending approach, which led to the decision on 16th January, and it did not work. I think many of us at the time suggested that in a year or two, when we had a look at the Budget outturn, the savings would not have materialised. I do not think many of us realised that it was not to be a year or two but a month or two before, looking at the figures, we found that the proposed economies had been swept aside like sand castles before the rising tide of administrative expenditure and other expenditure proposals. That is the outcome of the heart-rending approach, and I think it is a rather sad and sorry commentary on the managerial
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  competence of those who are supposed to be governing the nation.
  The other approach is the good management approach. This has two prongs to it. The first prong is the more obvious one, and this is where the question arises of whether the cuts should be on defence or in social policies. The more obvious aspect of controlling the growth of Government spending is to avoid policies which will lead to the proliferation of Government spending. My hon. and right hon. Friends have suggested a whole range of items which are neither defence nor social policy items of spending and where there could be curbs on the proliferation of public spending. They have talked about the Transport Bill, the Industrial Expansion Act—one more in the costly range of agencies involved in Government intervention in industry—they have talked about research spending by Government which could do with close examination; they have talked about the costly mechanism of investment grants, and the need for a greater use of private enterprise to do jobs now done by civil servants, use of on the lines of those of the Federal Government in America. They have talked about abolishing the Land Commission and S.E.T. These are the obvious ways in which Government spending could be cut.
  But if we are serious about bringing public expenditure under control, there are two more fundamental points. The first lies in taking steps—these involve administrative changes inside the Government—to spread individual responsibility for the carrying out of projects and ensuring that they are carried out in a cost-conscious way by individuals in the Government, who at present hide under the broad cloak of Ministerial responsibility. The second way in which public spending can be brought under control is by adopting modern and up-to-date methods of Government accounting.
  The first point, about spreading responsibility, has profound implications for the whole doctrine of Ministerial responsibility. We should not be afraid of these. This doctrine is a dangerous and misleading fiction. It is a device for ensuring, not that the Administration will seek ways to cut costs, but that it will find ways of not having to explain why

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  costs have risen. If the Government are serious about cutting expenditure, which I doubt, they will have to devise ways in which decisions can be made and routines followed by civil servants which lead to cost cutting. Responsibility must be delegated to particular civil servants and high officials who will have to justify—with their reputations to improve or tarnish—their handling of specific projects and be publicly judged on the success or failure of them.
  That cannot be dismissed as an ideal. It cannot be pushed aside as something which the Labour Government used to think about in the heady days before 1964 when they had ideas. It must be a direct aim of policy if the Government wish to bring public spending under control.
  'The Joint Under-Secretary of State for Economic Affairs (Mr. Alan Williams): We all agree with the idea of better accounting and improvements in financial matters, but the Hawker Siddeley and Ferranti cases happened while the hon. Gentleman's party was in office.
  Mr. Howell: That is an observation, but I do not see that it has much to do with the desperately serious problem of a system of public expediture which is out of date and a public spending bill which is out of control, which has led to the present difficulties.
  I come to the second point, the question of modern accounting. The traditional system of accounting used by the Treasury is probably very good. It is, though, a traditional system of checking figures after expenditure has been made. We shall have to find ways of establishing proper management accounting, of ensuring that there is proper control of expenditure patterns as they unfold and of devising ways in which management accounting in the commercial sense can apply to government. Unless that is done, we shall remain saddled with a system in which the Chancellor of the Exchequer is powerless to control the growth of public spending.
  The real job for the politicians is to reorganise the business of government. This point is brought out extremely sharply by the saga of this Budget and the size of the taxation burden. If anything is shown by the figures of recent
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  weeks, and by the financial statement, it is that the business of organising the Government and the methods for controlling their expenditure are in a shambles. If we are to reduce the dominance of overcentralised government in this country and get on top of the public expenditure problem, which we are not doing at the moment, these changes must be made. It is not good enough for the Government to say that these are ideals in which we all believe but that at the moment they are too busy with day-to-day things. As long as they say that, there will be chaos in our public finances.
  I come to the third leg of the Chancellor of the Exchequer's strategy, namely, incomes policy. It is right that we should put this matter at the end of what we have to say, because, as the hon. Member for Luton said, it is not directly central to our problems. I think that it is the least important of all aspects of the Chancellor's strategy. I agree with the hon. Gentleman that the Chancellor thinks the same. Therefore, we may be wondering why the other limbs of the Government should be asked to wave in this ludicrous way and why the rest of the Labour Party should be asked to go through the contortions which it will have to go through on incomes policy legislation.
  I welcome the view, the more robust view, of my party about a statutory incomes policy. I believe that we must reject this whole idea, because it does not work. I say that, not for narrow ideological reasons, but for down-to-earth reasons. As my right hon. Friend the Member for Mitcham (Mr. R. Carr) has clearly shown, all the evidence is that when it has been applied wage rates have risen, not more slowly, but certainly at the same speed and probably faster. When we look at the relationship between earnings, costs and exports—and the ultimate aim of this policy is to increase exports—there is no connection at all. The attempts to impose wages legislation have achieved nothing in cutting costs and increasing exports. All that has happened is that legislation and the House have been brought into disrepute.
  That is why this is a vitally important stand which the Conservative Party takes in rejecting the incomes policy idea and the mumbo-jumbo which goes with it as a sensible and credible support for

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  an economic policy. It is not a policy. Luckily, it is not significant in the Budget arithmetic. It is an escape from reality. The reality is that no economy will grow and costs will not be kept down unless there are incentives to save. The reality is that productivity is far too low and that costs are too high.
  Yesterday, the President of the Board of Trade told us about the wonderful export boom which was to come. He said—and this is the orthodox view of the Government at the moment—that devaluation will bear fruits in due course but that there would be difficulties to start with. I have heard many comments from people who think that this may not be so and who argue that perhaps the fruits of devaluation could have been gleaned only in the first few weeks after devaluation. This is the argument of many businessmen—that unless advantage of devaluation is taken in the first few weeks other countries will not take matters lying down. Hon. Members must not imagine that the Japanese have sat back and said, "Let British exporters have this great advantage", which is not as great as it was originally but is still considerable. On the contrary, there are many signs that costs are being cut sharply in other rival exporting countries, either directly or by improved credit terms.
  While I should be happy to think that the President of the Board of Trade was right, I warn him and other members of the Government not to assume that the fruits of devaluation will fall into their hands automatically at the end of next year. That may not be so.
  Above all, there is the reality of the need for administrative reform of the public sector. That does not imply that the Civil Service is to blame. That is not so. It is the politicians who run the system who are to blame. It is their job to put the public sector house in order. The buck cannot be passed. This is the central contribution which the Government can make to national efficiency and to cutting costs. If there is any vitality left in this bunch, that is where their energies should be directed.
  6.58 p.m.
  Mr. Eric S. Heffer: The Budget has been described by
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  The Guardian, by the newspaper which used to be known as the Daily Worker and a number of my hon. Friends and leading speakers on the benches opposite as a bankers' Budget. I do not entirely agree. It is a bit of an exaggeration to say that this is a bankers' Budget. What is right, however, is that the Budget has been greatly, although not drastically, influenced by the bankers.
  It is interesting to note that, on the very weekend that the Chancellor was putting the finishing touches to the Budget, aeroplanes from all over the world were going to Washington bearing men who were to discuss the world monetary problems. It was not the Prime Minister or the Chancellor who went from England, but the Financial Secretary, because, according to one newspaper, he was going because he knew about these things. The important person, of course, was Sir Leslie O'Brien. It was the heads of the central banks and not the heads of world Governments who met, basically to discuss the future economic and monetary problems of the capitalistic world. Therefore, although the bankers did not lay down the Budget in detail, they undoubtedly seriously influenced it.
  Nevertheless, it would be wrong to suggest that there is no progressive side to this picture. The faces of hon. Gentlemen opposite on Budget day showed this. They did not cheer and wave Order Papers—nor did I, but that was because there were one or two aspects which I did not like, and they were not the same aspects which hon. Gentlemen opposite did not like. They did not like the modified form of wealth tax which I understand is supposed to be a sop to the Left-wing of the Labour Party. I should have thought it much more a sop to the T.U.C. Up to now, the Left-wing has not appeared to have much effect on the Government—regrettable though that may be—but I hope that we will have more effect on them in future.
  Hon. Gentlemen opposite were not entirely happy with the Budget. I read the next day that one representative of the City said that it was not too bad but was a bitter Socialist assault on him personally, so he did not think that it was particularly a bankers' Budget.
  I agree that we had to take a great deal out of the economy after devaluation. This is regrettable, because it should

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  never have happened—[HON. MEMBERS: Hear, hear."] For three years, we pursued a completely wrong economic policy—[HON. MEMBERS: "Hear, hear."] We put the £ before the people's interests—[HON. MEMBERS: "Hear, hear."] Hon. Gentlemen opposite should not say, "Hear, hear," when they always wanted to put the £ before the people's interests.
  I have listened to the usual claptrap from hon. Members opposite. We had it from the right hon. Member for Enfield, West (Mr. Iain Macleod) yesterday and from the hon. Member for Guildford (Mr. David Howell), from whom I expected a better contribution, today. They said that we must cut public expenditure. What do they mean? One hon. Member yesterday said that we should cut the amount of paper in the House of Commons and another that we should lower the heating level, but what they really mean is cutting back on the social services.
  When they talk about the growth in public expenditure, they are talking about the fact that we have given redundancy payments and increased sickness and unemployment benefits, all of which benefit ordinary working people. That is what they mean by public expenditure. In the debate on defence, for example, they said that, if they ever got back, they would send all the troops back east of Suez and renew the bases. So they would cut public expenditure and increase defence expenditure at the same time. This can only come from one source—the social services.
  Mr. John Page: The hon. Gentleman heard my hon. Friend the Member for Guildford (Mr. David Howell) give six or seven exact ways in which Government expenditure could be saved without touching any of the social services. It is extremely discourteous of him not to have taken notice of that, even though I see that they are set on an extension of Socialism and increase of public control in so many parts of our community life.
  Mr. Heffer: I heard the hon. Gentleman, and was sorry that his speech was not up to his usual standard. His seven points added up to very little and I did not take them seriously, because they were largely irrelevant.
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  I turn now to the question of direct as against indirect taxation. I would not say that the speech of the right hon. Member for Enfield, West was not up to his standard, because their standards seem to be declining every day, and it was not a bad speech. He said that we should broaden the base of taxation, by which he meant much the same as the C.B.I. pamphlet, "The Budget 1968", which said:
  "As a means of shifting the burden of taxation from direct to indirect, we prefer a broadening of the base of indirect taxation to an increase in the rates of the existing purchase tax and excise duties."
  That means, across-the-board taxation on everything. That is what they want and that is how they would cut public expenditure. Therefore, I hope that we shall have no more hypocrisy from hon. Gentlemen opposite trying to give the impression in the country that they want to lower Income Tax and concern themselves with savings.
  Although an irrelevancy, what has unfortunately been made a central issue of the Budget is the question of prices and incomes policy. I listened to my right hon. Friend's speech today, thinking that perhaps we would at least get some words of wisdom about an incomes policy. We did not get any words of wisdom, and despite my efforts on this occasion to bend over backwards to support the Government, I fear that, as a result of that speech, those efforts have been thwarted once again. It seems that the prices and incomes policy is to be with us for a long time.
  When the Secretary of State said that something would be done about rents, I thought that his remarks were somewhat vague. The other day I asked for an immediate rent freeze to be introduced while the Government worked out a policy for giving national finance by some means or other to help local authorities like Liverpool which require help to overcome the enormous problems which they face. I did not hear much about that from the Minister, although I did hear quite a lot about the way in which incomes would be treated. We are told that 3½ per cent. is not the amount that one can expect annually. It is a percentage for which one must strive. On the other hand, the criteria laid

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  down in Cmnd. 3235 in June, 1967, stated:
  "There can be no justification at present for returning to the norm of 3–3½ per cent. per annum which prevailed up to July 1966 and which in practice tended to be regarded as the minimum increase which everyone expected to receive".
  It means that we are back to where we started. We must begin with nothing and all concerned must strive to get 3½ per cent. I can imagine the welcome that workers would have given to a policy for increased wages of 3½ per cent. annually. In this connection, the right hon. Member for Enfield, West boasted by saying, in effect "We did better than you because we did it without having an incomes policy." He was right. It did not need the Government to keep wages down. They could rely on the employers.
  When I heard the Minister this afternoon talking about massive wage increases I wondered to whom they had been given. I spent my life in industry before coming to this House. I cannot remember an employer ever saying, "Listen here lads. I am giving you all a hefty increase in your wages." I can only remember employers saying, "Nothing." It was after we had been told that we were to get nothing that we began to build up our case, argue, possibly threaten to go on strike and then, at the end of the day, receiving perhaps 2½d. an hour extra instead of the 6d. for which we had asked.
  That is the sort of thing that goes on in industry. The Government must accept the reality of the situation. I have never found employers being willing to help workers to improve their lot. They have had to give higher wages from time to time, but basically all that they are interested in is making profits. The Minister did not seem to understand this. The Government seem to have been living in a different world from mine. It is regrettable that this position should have arisen.
  Then we heard the story about productivity bargaining and we were told that, at plant level, 3½ per cent. would apply, but not for piece rates. I do not know what that means and so far nobody has been able to clarify it. My hon. Friend the Member for Salford, West (Mr. Orme) spent half his life as an engineering shop steward negotiating
  680
  questions of this sort. So did I. I recall going to various building jobs and shipyards to negotiate agreements. Does the latest policy mean that every agreement that is negotiated must go to an enlarged Prices and Incomes Board? What an absurdity. It is all completely irrelevant and I appeal to the Government to reconsider this matter.
  Mr. Orme: It is too late.
  Mr. Heffer: It always seems to be too late when we are discussing this question.
  I am not opposed to an incomes policy and I have always accepted the argument that certain workers at the point of production are not in as strong a position as others. For example, it is not easy for firemen to get increased wages, because over the years they have given a firm pledge not to go on strike but always to be available in case of emergency. That does not apply in other countries. Firemen abroad do go on strike, but because our firemen do not use their industrial strength they often find themselves left at the bottom of the wages queue.
  The same can be said of nurses and others working in the hospital service. These people go on strike in, for example, New York, although they do not here. Many workers have no real industrial strength to use. Today 3,500 Liverpool busmen are on strike. That inconveniences the local populace, but one cannot say that those busmen have any real industrial strength in the true sense of the word. These are the sort of people who get left behind.
  My hon. Friends may be interested to know the reason for the Liverpool bus strike. Originally the busmen were offered 23s. An agreement was reached in November and was put to the Prices and Incomes Board on 1st March. After that, they did not get their money. Thank goodness an Order was not imposed. If it had been half of these busmen might now be in gaol. They went on strike because they felt that an agreement had been reached and a bargain had not been kept. In addition to the Liverpool busmen, Liverpool lorry drivers and Tate and Lyle workers, in addition to about a quarter of the docks, are on strike. I could go on and list others. It is rumoured that the people of Liverpool are not

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  getting their milk now and a serious situation is arising.
  I mention these facts to show that this could he the pattern with the continuation or reintroduction of this type of incomes policy. Although the workers and trade unions reluctantly accepted the position, it takes about 18 months before anger percolates through. I suggest that it is now beginning to percolate through and that what is happening in Liverpool today could happen in practically every other city. I warn the Government that this could be the outcome of such a policy if it is pushed to the nth degree.
  As I said, I believe in an incomes policy. The T.U.C. has bent over backwards to try to reach agreement with the Government. That was explained in the economic document which was approved by a majority of the T.U.C. executives when they met in Croydon last month. The Minister asked, "How can we be sure that the trade unions will carry this out?" I have always known the trade unions to be democratic. For example, although the T. & G.W.U., along with other unions, opposed the system, they have consistently sent their wage claims to the vetting machinery. Indeed, I am told that the T. & G.W.U. is still doing that. I believe that they would have accepted it, but that we are destroying the chance of that happening. Resentment is being built up and anger is being caused unnecessarily to the trade union movement.
  I am much in favour of many of the proposals in the Budget. Those which I do not like I am prepared to accept in the main, except for the niggardly business of the three days pay being stopped for a worker who is sick or unemployed. That is absolutely niggardly and detestable and need never have been introduced in the Budget. In the main I can support this Budget, but I cannot at the same time support a further introduction of incomes policy. This is irrelevant, unnecessary and will not help in our economic problems but will have the reverse effect. What little saving we could get in relation to that policy could be utterly destroyed by an industrial upheaval the like of which we have never seen.
  7.21 p.m.
  Mr. R. Chichester-Clark: After the Secretary of State's
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  speech one can understand why the hon. Member for Liverpool, Walton (Mr. Heffer) began his remarks with what appeared to be almost a rehearsal of his hustings speech, but when he turned to prices and incomes policy, if words could win battles he routed the Secretary of State completely. In fact the Secretary of State had fled the field before he began.
  Perhaps at this point, at the risk of giving a respite to the Government, it would be a good thing if there were a lull in this battle. I do not want to talk particularly about prices and incomes. If he catches your eye, Mr. Speaker, no doubt that will be pursued by my hon. Friend the Member for Oswestry (Mr. Biffen). I turn to a matter which was approached by the hon. Member for Luton (Mr. Howie) when he spoke of the position of consulting engineers and those in similar occupations. I want to speak particularly of the building industry. Incidentally, I congratulate the hon. Member for Luton on what I believe was his first speech since, he managed to escape from the Whips Office. I have a great deal of sympathy for him because at one time I held exactly the same office in that establishment, although circumstances never dictated that I should take the same constructive step as he recently did.
  I want to talk about the impact of the Selective Employment Tax and its relationship to the construction industry in particular. I do not want to dwell on the yield of the tax, because that is well known. At 25s. a head it is costing the industry £80 million a year and adds from £70 to £150 to the cost of a house, depending upon whether one is talking about Parker Morris standards. The further increase which the Chancellor announced means that another £40 million or so is to be taken from the industry and that is likely to add a further £35 to the price of the average house. We must take this very seriously, because by the time we have totted up all the other increases due to devaluation, increased transport costs as a result of the Budget and the new drivers' hours proposals in the Transport Bill, and so on, the £5,000 limit set by the Ministry of Housing and Local Government for people to get 100 per cent. mortgages will look like a bad joke.

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  In his statement the Chancellor said
  "…figures published recently indicate that it may have had a substantial and beneficial effect on productivity in the service trades—notably distribution—and perhaps also in the construction industry."—[OFFICIAL REPORT, 19th March, 1968; Vol. 761, c. 284.]
  If by that preposterous statement he meant that the industry's labour force has dropped by 4 per cent. in those years, it was a nonsensical remark. Many factors have contributed to that drop, but the Chancellor knows that the Ministry of Public Building and Works statistics show that in the first quarter of 1967 there was an increasing trend towards self-employment. This is something which hon. Members opposite, particularly the hon. Member for Walton, should be concerned about. There is a significant rise in the number of one-man concerns. There is a trend which hon. Members on both sides of the House find undesirable and it is certainly not welcomed by any part of industry. After the increase in this Budget it may be that the trend will turn to a flood. That is something we must worry about.
  If the Chancellor by his extraordinary statement on Tuesday meant that manufacturing industry had benefited pro rata from S.E.T., he was misleading the House, because only on 19th November the Parliamentary Secretary to the Ministry of Labour, in answer to my hon. Friend the Member for Harwich (Mr. Ridsdale), said that the number of employees in manufacturing industries had decreased by about 5 per cent., by 395,000, between September, 1966, and January, 1968, which shows clearly that the mobility of labour had not been assisted. S.E.T. is raising money from the construction industry—too much—and it is pushing up building costs adding substantially to the difficulties of buying a home and increasing "the lump" and in particular the type of disreputable operator who evades taxes and insurance responsibilities. That is the measure of the present Home Secretary's achievement and now the Chancellor has made confusion worse confounded. I hope that we shall hear something from hon. Members opposite about this because it is a matter of concern, as it should be, to all of us.
  It is typical of this Government that they could not even speak with one voice
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  on this subject. I want to say something about the horrifying series of announcements by Ministers on Selective Employment Tax which have only served to mystify the industry and to make Government statements a laughing stock. On 23rd June, 1966, the former Chancellor introduced the Selective Employment Payments Bill. At that time it is fairly apparent that it was intended that firms producing factory-built houses should get a premium while traditional builders would be taxed in full. That is not what actually was achieved, in fact right to the last disputes were going on about who was entitled to premium and who was not. On the Second Reading of the Selective Employment Payments Bill the Chancellor said:
  "There will be a great incentive to industrial building…This will have a very valuable effect in altering the shape of the construction industry by speeding up industrial building. I welcome it as a great improvement."—[OFFICIAL REPORT, 23rd June, 1966; Vol. 730, c. 1045.]
  We wanted to debate the construction industry on the Finance Bill, but it was guillotined. I had only 10 or 11 minutes in which to tell the House about the building industry's problems and there was no reply from any Minister and no time for any of my hon. Friends to give their support. That is a procedure which brings the House into disrepute.
  The Bill was passed and the tax had to be paid. Once it was announced the National Federation of Building Trade Employers computed that it would cost the industry £80 million. At some point I want to hear from the Government whether that was their estimate then and what their estimate is of what the additional increase will be. That £80 million was a public figure which, so far as I know, has never been questioned in this House.
  On 17th November last year, the day before devaluation, my hon. Friend the Member for Poole (Mr. Murton) asked the Chancellor what was the yield of S.E.T. from the building and civil engineering industries to which the Chief Secretary replied:
  "I regret that it is not possible to provide figures of the actual yield from particular industries."—[OFFICIAL REPORT, 17th November, 1967; Vol. 754, c. 222.]
  The House will note that a public figure had been quoted often in the House and

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  has never been denied, yet 18 months later the Chief Secretary still did not know the yield of the tax. One may be forgiven for asking, if he did not know the yield, how he knew that he was collecting the right sum. The industry knew what the tax was costing all along and so did hon. Members. The Minister of Public Building and Works knew, because not so long ago, at Question time on 11th March, he said:
  "The annual S.E.T. payable by the construction industry as a whole is about £80 million."—[OFFICIAL REPORT, 11th March, 1968; Vol. 760, c. 945.]
  So there was not much cohesion in the Government about this, and I still think we ought to get it cleared up.
  I come now to the question of the premium. I referred a moment ago to this premium being paid to some firms manufacturing industralised building systems in off-site factories. The Chancellor told us that this was going to be "a great improvement" and was to have "a very valuable effect", and so on. But on the same day, when my hon. Friend the Member for Poole exposed the Chief Secretary's ignorance about the actual yield of the tax, he also asked how much premium was paid to the industry—obviously in respect of industrialised building. The reply was almost unbelievable, even from this Government, because it was not that the Chief Secretary did not know: he replied flatly that the building and civil engineering industries
  "…are not eligible for premium."—[OFFICIAL REPORT, 17th Nov., 1967; Vol. 754, c. 222.]
  This was the premium that was going to alter the shape of the construction industry. No wonder the economy gets blown off course, when we have captains like that in charge.
  Then devaluation came along and with it the removal of the premium, except of course in development areas. The great improvement which was to have "a very valuable effect" was to disappear. It is typical of this Government that no apology was offered. The President of the N.F.B.T.E., Mr. Laing, wrote to the Minister of Housing—and this was public correspondence—that the
  "Premium was due to many firms engaged in industrialised building, and its cancellation will therefore lead to some increase in the cost of public housing and other types of building work carried out by industrialised methods",
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  and he added
  "the advantages predicted by the Chancellor [in June, 1966,] no longer exist."
  He wrote in similar terms—and this is important—to the Minister of Works, and all these letters were made public in Press notices.
  The Minister of Housing's reply was in what some people would call really Orwellian double-think style, because he then said:
  "The withdrawal of premiums certainly reduces an element of discrimination in favour of industrialised building which I believe other sectors of the construction industry have regarded with misgivings and resentment."
  So the "great improvement" of the Chancellor of the Exchequer has suddenly become "an element of discrimination", which we now learn from the Minister was received with "misgivings and resentment".
  Incidentally, the Minister of Public Building and Works entirely disregarded this point when he replied to Mr. Laing, yet on 11th March he told the House with considerable effrontery that they had not brought forward to him the question of the withdrawal of the premium, and that they had made no representations about it. Those were both completely inaccurate statements, as he must have known, and they have never been withdrawn. I think some action should be taken in this matter.
  I am bound to say that he must take a great deal of the blame for what has happened in the building industry, and in particular the increase in the employment Tax. He failed to correct the answer given by the Chief Secretary, which he must have known was wrong. He misled the House about the very recent formal representations he had received from the builders about the premium. He also told the House bluntly on 11th March that he had
  "received no recent formal representations from the builders"
  about S.E.T. itself, which is another inaccurate statement about which he has remained, as far as I know, totally publicly silent. He knows the industry loathes the tax. He must have seen their Budget memorandum, details of which appeared in the Press in February, in which they bitterly attacked that tax again.
  The ignorance of the Chief Secretary on this subject was not pardonable or

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  even funny, and we have had this doublethink from the Minister of Housing, with the sort of drivel which brings public life into contempt. The industry has been badly treated in this matter and I hope something will be done to restore its confidence, if in this Government that is possible.
  I do not know whether the Treasury pays any attention any longer to the Minister of Public Building and Works. I do not know whether, when the Chancellor receives memoranda from great industries such as the construction industry, he sends them on to the Ministry of Public Building and Works and takes its advice. I do not know whether they bother now to send on letters of this kind. I can only say that the Ministry of Public Building and Works used to be—and I hope still is—a Department…
  Mr. Russell Kerr: On a point of order. Is it in order for the hon. Member to remind the House of material which would be more appropriate to a parish or regional council meeting?
  Mr. Speaker: If the hon. Gentleman is out of order, the Chair will call him to order.
  Mr. Chichester-Clark: I do not suppose that the hon. Member is interested in the building industry or in those who are employed in it. If he does not like what I am saying he can always go away as the Secretary of State did during earlier speeches.
  What I was saying was that the Ministry of Public Building and Works was once a Department of crucial importance. It is responsible, after all, for the second largest employer of labour in this country. Can it pretend today that, despite the abilities of its Civil Service, despite the growing importance which that industry represents in the economy of this country, it is holding its own in an over-expanded Government and against the depredations of other empire-building Departments? Indeed, there is every sign that, unless the present Minister can succeed in defence of his Department where his immediate predecessors have failed, its representations will be increasingly disregarded in the Government, and its advice will no longer be sought.
  The Ministry of Public Building and Works is a Department which used to be
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  known as the Office of Works. Unless the present Minister asserts himself a bit more strongly to Office of Works it will return.
  7.38 p.m.
  Mr. Arthur Lewis: I am now approaching my twenty-third year as a Member of Parliament. I think it is true to say that I have sat through almost every Budget debate we have had during those 23 years, and this is only the second time that I have taken part in the debate. During those 23 years we have had 13 years of the Tories in power and 10 years of Labour but I would say that in that time, during which we have had about 27 Budgets, we have had, in fact, 27 Treasury Budgets.
  My hon. Friend the Member for Liverpool, Walton (Mr. Heffer) asked whether this was or was not a bankers' Budget. All I will say is: that prior to the Budget the Press were clamouring, at the behest of the bankers, for a certain type of Budget. Strangely enough, the type of Budget they were clamouring for came along, and the bankers were very happy with it. Over the years I have seen this repeating itself ad nauseam. It reminds me very much of the child who has a little touch of diarrhoea and whose mother tries to solve the problem by giving it a small dose of castor oil. When she finds that the castor oil does not cure the complaint, she gives it a bigger dose of castor oil; and so she goes on, never curing the trouble.
  This is what has been happening year after year. Irrespective of what party has been in power, and irrespective of what Chancellor has been in office, that has happened. Going back to any year, any time, from 1945 onwards, that has been my experience. First, the Treasury has published its figures and its economic surveys. Then, after 12 months, the Treasury has told everyone that it has got the figures and the estimates wrong, and so it is going to put the screw on by imposing taxation, by slowing up, by going faster or by coming to a halt—whichever it may be. As I say, this has happened each year, and after 12 or 18 months or two years we hit an economic crisis. We gradually get out of the crisis, but then we return to crisis.
  With all the remedies it is invariably the poorer members of the population

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  who suffer most. It is all very well for Ministers, whether in the present Government or any other, to say that rents are going up but that it is only by a few shillings; rates are going up, but it is only a few shillings; that school milk is being taken away, but only a few shillings are invoved; that school dinners are going up, but that it is only a few shillings. I could go on for hours like that.
  We also have Ministers saying that the workers must have the screw put on them because they are spending too much, that they are taking liberties with the country, that these people on £10, £12, £14 or £15 a week are really shocking. This is said by people who are getting £120 to £200 a week. Ministers receiving £200 a week say, "You on £10, £12, £14 and £15 should be more careful. You should cut down."
  Only last week a dear old lady told me, "I nursed a bed-ridden sick husband for 25 years. I could have stayed at home and gone on National Assistance, but I went out to work to get some money. Now that he has died I get £5 7s. 6d. a week, from which I must pay rent and pay for heating, lighting and so on. I went to what used to be the National Assistance Board and I get 3s. 6d. a week supplementary benefit." Is it fair, right or reasonable for the present Government or any other to say to this woman, "Your rent, rates, gas, electricity and fares are going up, as well as a lot of other things", and then add, "You should be careful, because the country is getting into economic difficulty".
  I am disgusted with the way all Governments over the years, particularly of most recent years, show preference to those who have as against those who do not. I am fortunately one of those who have, but I say this because it is a bit immoral. The newspapers write things—the Daily Mirror is an example. A journalist who writes an article perhaps once a week receives for that one article more than the average worker gets for a whole week's work at the pit or wherever it may be. He tells the workers that they should cut down, and he tells the Chancellor that we should have a restrictive Budget.
  We find the Daily Mirror, led by Mr. Cecil King, saying that it is all in favour
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  of the incomes policy and that the paper supports the Government. Well, does it? It supported incomes policy, but not when it affected the Daily Mirror. It wanted to increase its price and of course it did so. It alleged that that was because of devaluation, but devaluation did not affect the cost of the newsprint until some time this month. It put its price up in January, even though the Prices and Incomes Board said that it should not do it. That is the paper that pays exorbitant sums to journalists to tell the workers, "You should cut down on your standard of living".
  Another one is the Sunday Times. I am told that it has signed an agreement for the political memoirs of some Government Ministers for £100,000. I am also told that it has paid £5,000 for one article. Then this paper puts up its price because it says that it cannot manage. What about the Government doing something about that? What about their saying that this is inflationary and should be dealt with?
  I have been campaigning for years to try to alter the disgusting procedure whereby lawyers received the last year of their earnings tax-free. I was very pleased to see that at long last this is to end, but will it? It will cease only up to a point. They will still keep 5 per cent., I think it is, of their last year's earnings tax-free. If the lawyers can do it, why not the engineers, bricklayers, carpenters and so on? This is another case of one law for one and another for the other.
  I asked my right hon. and learned Friend the Attorney-General whether he would refer to the Prices and Incomes Board the report in all the newspapers that in the recent Emile Littler libel case, which lasted for 17 days, the legal fraternity drew between £75,000 and £100,000 in fees. I should have thought that he would reply, "Yes. We shall hurry that to the Board because it is against the Government's policy." But, no. It was not referred. But it would have been if it was the ordinary worker asking for a couple of bob a week more. We see this happening all the time. The Government can always do something to stop wages, and they do it. But I believe that there is just one price rise that they have stopped during the past

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  twelve months. I think it concerned some laundry charges. They cannot do anything about prices.
  Another broken promise was that we were originally told that these powers would be retained for only 12 months. Then it was for two years, and now we are to have them for 18 months. We do not know. I believe that it is not the present Government or previous Governments but the Treasury that has got its sums and its promises wrong all the time. I believe the Government genuinely meant it when they said that the powers would be used for only 12 months, and again when they extended them by 12 months. But what happens is that in the course of time they find that what they said would occur does not. They now say, "Leave it to us. We have now got it right. We shall now be successful. We shall get out of these continual economic crises because we have the answer. We have devaluation, and this will succeed." Sir Stafford Cripps tried it and we still had the crises.
  The trouble with the present Government and all Governments is that we allow the Treasury to dictate terms and policy. It may well be that there is a little bit of manoeuvring within it as to whether one puts the tax on this or on that, but basically the overall amount, whether £900 million is taken out of the economy or £900 million put in, is decided by the Treasury, and the Treasury starts working out how it shall be done.
  We are told that the increased tax on petrol and so on will affect the cost of living by only a few points. It is always only a few points or only a half point, and it is all only temporary—we are told that it will be for only a short while. That happened with the whisky tax and the surcharge on petrol. I do not know how long the whisky tax has been on, but it is a temporary tax.
  What amazes me is the increase in the Road Fund licence.
  Mr. Orme: My hon. Friend has a point of view on this.
  Mr. Lewis: I have, because 4 per cent. of the motoring population is not now paying its £17 10s., and very many firms with heavy lorries and trucks are not paying their tax, which I think is £150, on the heavy four-tonners.
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  The Minister of Transport, the Home Secretary and the Chancellor of the Exchequer have done nothing about enforcing the existing tax of £17 10s. Four per cent. or 5 per cent. of motorists have learned the dodge—that it cannot be enforced. I remind my right hon. Friend that, for four years, I have been trying to get the Government to accept their responsibilities in this. If 96 per cent. of drivers are paying the tax, the Government should see that 100 per cent. pay it. If they cannot and will not—and they have not—then I say that we should let everyone join in. "If you can't beat 'em join 'em."
  I am going to tell those who have cars, "Do not pay your road tax because there is no means of enforcing it." There is no means of seeing that it is paid at the moment. I have told Ministers how it could be done and, indeed, it could be done simply. They refuse to do it. That is why, whenever I get the opportunity, I shall advise motorists not to pay the tax until the Government get down to the job of seeing that everyone pays it.
  Lastly, even at this stage, I hope that my right hon. Friend will have another chat with some of our trade union comrades and have explained to him how shop stewards work on the shop floor. Let them explain to him such terms as low-wage rates, middle-wage rates and piece work productivity
  In the main, the lower paid worker is the one who cannot increase productivity because he is not in that sort of job. He is low paid because there is no productivity that he can give. We cannot ask a mortician working in a hospital mortuary to produce more bodies. He might like to but, of course, it is difficult for him to get paid by results. It is hard for the toilet attendants at gentlemen's conveniences. [Laughter.] We may laugh, but these are, after all, among the lower paid workers, who also include the road sweepers and the dustmen—all very essential to our economy. We all know that these sort of people do a very useful job but cannot get on to a productivity payment.
  Are we going to suggest that they shall not get increases? If so, why? Are the nurses, the firemen and others to be excluded from increases? Surely

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  not. But I warn the Government that, if that is their attitude, they will head for trouble.
  Even at this late stage my right hon. Friend should go back to Mr. Woodcock and discuss with him whether, even now, a scheme cannot be worked out which would be acceptable to the trade union movement, because I warn my right hon. Friend that, if the Government, who have made many mistakes, go ahead with this plan, not only will they lose the next election but they will ruin in all probability the trade union movement and the Labour movement and will ensure that neither he nor I are here again during the rest of our lives.
  7.55 p.m.
  Mr. Ian Lloyd: Unlike the hon. Member for West Ham, North (Mr. Arthur Lewis), I have not had the great privilege of listening to 27 Budget speeches but I respect the passion and sincerity of his speech. I have merely had the privilege of listening to four Budget speeches as a Member of Parliament, although many years ago I heard the late Hugh Gaitskell present his Budget. I was sitting in a place somewhat higher in the building. I shall always remember the sincerity and skill with which he did it, even though perhaps I was as much in disagreement with his policies as I am with those of his successors.
  We all know that, in another part of the Palace of Westminster, the death watch beetle has got into the great oaks and we are doing our best to eliminate it. But another type of animal has emerged. I call it the "death waffle beetle" and it is prevalent in this Chamber. We have heard a great deal of it today and by no means only today. It is an animal with a strange origin. It is by syllogism out of tautology and survives on a diet of false premises. It can only survive within the artificial cocoon of Socialist ideology and it is just as dangerous an animal as the death watch beetle because it pervades the whole fabric of our society.
  I want to take up points made by the hon. Member for West Ham, North and the hon. Member for Liverpool, Walton (Mr. Heffer). First, there is the question of workers taking too much out of the total national pay packet. This seems
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  on the face of it a plausible and convincing argument. But we perhaps ignore a fundamental distinction which we should carefully consider. No one in this House can ever object to what we all understand by the term "real worker"—the really productive contributing individual. We all know who he is. In any organisation he can always be found and defined. He carries the weight and burden of the day, produces the goods, achieves the increase in productivity and earns every penny he is paid and more.
  Unfortunately there are many other workers—so-called workers—whom I would call "workers by definition"—by statistical definition. We all know them too. They co-exist with the real workers, in the same factories and offices. They, too, make demands on total output of society and it is the demands of both bodies which lie at the heart of our deep inflationary problems.
  One of the problems we have not faced up to completely is that of so defining the distinction between these two groups in legislation, national life and the system of rewards, so that society could give rewards properly where rewards were due and not give them improperly where they were not due.
  I am not a barrister but in some ways I wish I had been. I set out to be one but the war intervened. So I can at least speak impartially about this great profession. They have been attacked on all sides. It has been said that some earn £100,000 a year and that it is monstrous and inequitable that, in their final year in what I understand to be almost the most arduous profession in the country, they should have such a privilege and that they should be denied it. [Interruption.] I have many barrister friends. They work a jolly sight harder than many hon. Members.
  We are always using the term "gross" income. The Government set a bad example. Every time they publish an advertisement, every time a Minister refers to a salary the Government propose to pay, the gross figure is given. What does £100,000 mean in real terms? The Treasury gets £92,000 and the barrister £8,000.
  Mr. Arthur Lewis: The hon. Gentleman is wrong because in the barrister's

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  last year of earnings he gets the £100,000 tax-free. If it is good enough for him to get that, let the miner who is probably on £1,000 or, if he is lucky, £2,000, get that tax-free. Let the hon. Member, let everyone be treated alike.
  Mr. Lloyd: I have not misunderstood the hon. Member on this point. I was coming to the question of the final year. This is another matter altogether. The argument that there should be consistent treatment for all people is one which can be extended, but there is no contributory pension scheme for barristers. They are self-employed. [Interruption.] Hon. Members may laugh, but might I ask whether they saw the analysis of barristers' earnings published in The Times six years ago, showing that a very small minority in this profession earned anything like this sum of money? It was something like 2 per cent. Those are the facts, and it is quite silly for the Government to introduce this type of narrow, pettifogging tax for a very narrow section of the community, simply to attempt to achieve this result.
  The hon. Member for Walton used an interesting phrase deserving analysis. He said that Governments occasionally put the £ before the interests of the people. This is an extraordinary phrase. Can we analyse what it means? If we were to ask the ordinary people in any of the Western societies of which we have some intimate knowledge since the war what they would have liked most to have seen their Governments achieve, without exception there would be the solid response, "To sustain the value of our currency." This is what all Governments, almost without exception, have consistently failed to do. To suggest that there is any real divergence of interest between a Government maintaining the value of their currency and following all measures necessary to do that, and then in some way deserting or not considering the interests of the people, seems a most astonishing statement to make because it cannot be sustained. On the most narrow social grounds, those who suffer most from inflation and from Governments which decide to put the interests of the people before the value of their currency, which allow the currency to go to pot, are the poor, those on fixed incomes and the retired—the sections of the com
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  munity most completely incapable of defending themselves.
  Let us have no more of this nonsense about putting the £ before the interests of the people. The value of the £ is identical with the interests of the people. What the people want is a Government which will rediscover and re-establish that identity in rather more successful terms.
  Mr. Arthur Lewis: Over the last 20 years Governments have taken all these measures, yet the £ has now reached the position where it is worth only a few shillings compared with its former value.
  Mr. Lloyd: I take the hon. Member's point. Governments are singularly unsuccessful in this. The fact that they are not successful does not damage the argument. They may have to try different remedies, and these are certainly available to us.
  I have a number of detailed points of criticism about the Budget. The first I direct specifically to the Chancellor and it concerns the imprecision of his magnitudes. This is an important point and he referred to it in at least eight places. He said:
  "…retail prices rose by 2½ per cent.…"
  and real wages rose by 3 per cent. That is a magnitude. Again he said:
  "Public investment and public consumption are expected to each increase at a rate of little more than 2 per cent. per year up to mid-1969."
  Later he said:
  "…the gross domestic product in real terms…"
  will increase—
  "…at least 3 per cent. a year over the whole 18-month period…"
  And so on. It is well known to those who profess to have some knowledge of these matters that the statistical limits of error inherent in all these types of figure is of the order of magnitude of something between 5 per cent. and 10 per cent.
  Yet, over and over again, the Chancellor refers to these types of magnitude with the most spurious precision. He goes right down to the last £1 million and implies that these things are measure-able to one-tenth of 1 per cent, in some cases. He bases his judgments of the movements of the economy, and his operation of the regulators of the economy, on

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  the fact that these types of measurement can be made.
  I dispute most strongly that they can. I would go further and say that any Chancellor or any Minister representing the Treasury who comes to this House and presents it with this type of spurious precision deserves to be attacked strongly. If his professional advisers advise him properly he will know that he cannot do it. I hope that the Chancellor in replying to the debate will meet this point. If he can convince the House—and the House has the right to demand conviction on this point—that he can measure these magnitudes in the economy to the order of plus or minus 1 per cent. this will represent an achievement in statistical economics on which the country can be rightly proud and we should know all about how it is done and how he justifies it.
  We heard a great deal about using new, advanced scientific methods of government and one would have hoped that they would have been used in the presentation of the Budget. Here again, some of the Chancellor's figures given at a later stage in his speech will illustrate my point. He says, in estimating his yields from taxation, that:
  "The total yield of the Purchase Tax changes will bring in £163 million…"
  Not plus or minus £163 million but precisely £163 million. A little further, talking about tax changes and other indirect taxes he says:
  "This brings the score to £440 million for a full year and £397 million in 1968–69."—[OFFICIAL REPORT, 19th March, 1968; Vol. 761, c. 259–84.]
  All these estimates have a spurious precision. I ask the Chancellor quite simply when he is presenting this type of estimate to indicate what he knows to be the facts, what the Treasury knows to be the facts—that these are the summations of the whole series of probability estimates of revenue. Will he indicate what these probability estimates are, because he and others who understand this type of calculation know perfectly well that it is quite fatuous to present a figure of this kind.
  There is a probability that certain types of revenue will appear to be exactly 100 per cent. of the estimate, but
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  there is a whole range of probabilities which suggest that others will not. The House is entitled to know exactly what the Chancellor's probability estimates are beneath the figures which he presents to us. Everyone would know a little more about the solidity of his Budget and whether, at the end of the day, we are likely to achieve figures of this kind, or anything near them. We can make our own judgments of his estimates of probability where revenue and expenditure are concerned. Expenditure is more easy to define, but revenue is most certainly subject to analysis of this kind.
  On a more general point it seems that this Budget can be most strongly criticised on the grounds that I implied in a question to the Prime Minister this afternoon, namely that it fails to produce or harness the strongest motivations in the prosecution of the whole economic system and the improvement of our state of affairs. I want to put it in terms of a simple analogy, because these are always the most convincing.
  Suppose that tomorrow there was, somewhere in the North, a bright inventor who was to discover the 1968 equivalent of the Model T Ford, which was a most tremendous success as a technological invention. Imagine that he was to come to the Prime Minister at No. 10, showing him convincing proof, from his folder of drawings and estimates and market research, that he had the 1968 equivalent of the Model T Ford, and saying that to put it into production would increase our exports by £300 million, because it would sell all over the world. The bright inventor says that he could do this because he has the capital and the backing, and could lay all this convincingly before the Prime Minister.
  If he was then to say to the Prime Minister "I ask one condition only before I put this into operation. I ask that I might keep £1 million as a result of the total operation". This House knows what the answer would be. The answer would be "I am sorry we cannot do it here; go away." Then what would happen? He would go to some other country where, if he could not keep £1 million, he could keep possibly a substantially higher proportion than the fiscal system in this country allows him to keep.

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  This is a far-fetched analogy, but, on a smaller scale, this is the type of entrepreneur we need to produce in Britain today, on a sufficient and substantial scale. Where are they? When they arrive, what do we do to them? With what encouragement do we provide them? How do we bring them effectively into our system? We do precisely the contrary.
  The Left is proud of the fact that some 92,000 people are going to have to pay a very substantial impost on their wealth. Let us examine for a moment who these 92,000 people are with an investment income of more than £3,000 a year. I would not pretend that all the people in this class were exactly the type of person I hope to define, but does it not include precisely the type of entrepreneur, the man with wealth, the man with judgment, the man with skill, the type of man we need to put this country on its feet again and get it moving? What incentive is there for this type of man to come here to stay or to bring to Britain the fruits of his invention and genius? The answer is—precisely none.
  This Government simply do not believe in this type of activity, yet they want the fruit of such activity. Their blatant inconsistence is something which I am quite unable to understand.
  There has been no emphasis in this Budget on what one might call the total effectiveness of national investment policy. May I quote, in this instance, a series of remarks by the Confederation of British Industry which are relevant to our problems. It has been said that Governments do not listen to the representations made to them by industry but the Economic Secretary will have to listen to this, if he is with me thus far. The Confederation of British Industry has said this:
  "The final decision to invest or not to invest is still one of judgment. With all the help afforded by expert advisors and new techniques, the last link in the chain is one forged by boards and managements acting confidently in the knowledge that conditions will not vary so widely from those anticipated as to vitiate the basis of their assessments. It is unhappily in this respect that the ups and downs of recent years have most profoundly shaken industry's faith in the future".
  This is not a statement which any Government can ignore. The Confederation of British Industry may represent merely
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  one sector of British society, but no one can dispute that it is a vast and important sector. If this is the type of judgment that is made, we have no alternative but to consider it with all the seriousness that it deserves.
  In this Budget there has been too little emphasis on management. The Confederation of British Industry, in the same document to which I referred, has pointed out that, on the administration of prices and incomes policy, the main burden will fall on management. There will be a much greater burden on management doing pettifogging administration which is not essentially productive in character, and this Government are proposing to add new burdens on the managerial classes—if one may use that rather unpleasant term.
  I need hardly speak of the utter futility of treating scrip issues as income. This is the sort of pandering to ignorance which one has now come to expect of the Government, but it remains pandering to ignorance, none the less.
  The core of this problem is that the growth which we may have anticipated, and the people of this country have every right to expect, over the last three years has simply not taken place. I wonder if on the hustings, whenever they reach them, there will be one Member opposite who would dare again to use the phrase "Thirteen wasted years". I doubt it. Because, during those 13 wasted years, from 1957 to 1963 the gross national product of this country increased by £4,590 million; if one takes the calculation to the year 1964, as we have a right to do, at least until October, that figure becomes £6,188 million. In the three years this Government have been in power what is the equivalent figure? It is a paltry £1,067 million. This is the essence of the problem. This is why there are no resources to meet the legitimate social ambitions of hon. Members opposite, and to meet what they might describe as the illegitimate imperialistic ambitions of hon. Members on this side who dislike our pullin gout from east of Suez rather more rapidly than we feel is appropriate.
  The main criticism of the Government is that such a gross national product has been driven underground; it has not emerged. Devaluation, the consequences of this Budget, and everything else which

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  has flown from this Government's maladministration, can be related directly to the absence of wealth. Because that wealth is not here we cannot achieve our legitimate aspirations and ambitions.
  I have with me a national income blue book. This is an interesting document. It becomes, with every month that passes, a more depressing document. I suggest seriously to the Government that it should be published with a black edge, because the country is now in mourning for its own economic performance. If this Government stays in power there will be little point in publishing at all, because the 1967 issue will always be up to date.
  I know the hon. Members are most interested in what I have to say because they are economic armchair strategists. I know them well and I know their thinking. They criticise the armchair strategists of real war; we all know generals are supposed to fight the last war but one. My impression is that the economic armchair strategists, particularly on the other side of the House, fight the last economic war but three.
  If the people of this country look at the situation now they would say that on the home front we are fighting our Passchendaele. When we are in that type of situation, as indeed in a military sense we were at Passchendaele, there is only one solution—we must change the general staff.
  8.20 p.m.
  Mr. Robert Sheldon: The right hon. Gentleman the Member for Mitcham (Mr. R. Carr) suggested a number of alternatives to the present prices and incomes policy. I waited eagerly to hear something that was new and relevant. Although I am strongly against such a policy, I thought he might advocate something that might be worthy of attention. We have heard, as we know, the same old policies, not even bearing different labels. Amongst those policies, there was one new one, which I will examine a little more carefully: this was the new productivity board which was suggested the Opposition would like to see set up.
  Productivity has often been called our greatest problem. Those who advocate a productivity board would reason something like this: that as productivity increased, prices would be
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  lowered, goods would become more competitive, sales would increase, exports would rise and the economic miracle would be with us. This is a completely wrong approach to productivity. I do not believe that one can ever have productivity in a vacuum. What is needed is something to trigger it off. The trigger is never going to be Government exhortation, nor productivity conferences, nor boards such as those the right hon. Gentleman suggested.
  The only thing likely to trigger off productivity is demand itself. Given a high and rising level of demand I believe that necessity is still a main parent of invention. Given the pressure from sales and from production, I believe that the goods will eventually be produced.
  If I may quote from my personal experience, I was once in charge of a medium-sized machine shop. One of our great problems at that time was that the number of compressors that we manufactured could not be increased above 20 in any one day. There was only one machine operating a vital production process, and we reached a position where the entire production of the factory depended on the number of compressors made. That is a situation which is familiar to many people in industry.
  Not surprisingly, once the position was reached where the bottleneck was this one machine, an enormous amount of attention and thought was given to easing the bottleneck. The foreman, the managing director, the works manager and everyone else concerned gathered round and gave it the benefit of their massive experience. Ideas were suggested. Not surprisingly, once some of them were put into practice, production increased by 50 per cent. So 30 compressors a day became possible, and not only was this massive increase in production achieved, but the process was very much cheaper, with the result that we got a very high increase in productivity.
  That is what happens in these cases. That is what productivity means. That is what it is all about. When one has the level of demand pushing on production, a change in working methods results, but someone has to do the pushing first. It will not come about because someone exhorts the factory manager to increase his productivity. Someone has to say to him, "We must have this, or we are in

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  trouble", and the only people who can do that are those who are selling more of the product and bringing pressure to bear on the factory manager.
  There are those gloomy prophets who see 3 per cent. a year as the sort of productivity increase that we can get, and they compare that with Japan's 10 per cent. or so. They relate our 3 per cent. to the 10 per cents. of other countries and consider that we have a lack of basic inventiveness, that somehow we have gone soft, that we have not the pace of modernisation of other countries, that somehow this has become a national characteristic, and, therefore, that we are in decline.
  The blame must be put squarely on past Governments, who have never allowed the people to show what they can do. But it has not always been like that. Occasionally, we have had a glimmer of what is possible once the economy has operated properly and our inventive processes have been allowed to develop. We saw it in 1955, 1959 and again in 1964, when there were four and five point rises in productivity. The reason was that those were Tory election years, when they took off the brakes to achieve their electoral boom.
  However, the underlying reason is still true that, once the brakes came off and the pressure of demand went on to the factories, we got those massive increases in productivity. The pressures were there. There were reasons why they could not be maintained. Among them were our balance of payments problems. But they had nothing to do with the basic inventiveness of the people, which is still there ready to be tapped, once we get the economic situation right. It is that pressure from sales and demand which is now required.
  As a result of balance of payments difficulties in 1955, and in particular in 1964, Governments have had to apply the tourniquet, and so we have strangled our own economic miracles when they were in the making. Other countries have been able to ride through them and have achieved increases in productivity year after year. The fact remains that the one lesson which we must learn is that productivity increases are there for the asking. What we need to do is to apply the goad. The machine shop manager
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  will not be driven when all he sees from the result of his work is an increase in stocks and unsold goods.
  If one gets a high level of demand, the situation is arrived at in times of prosperity when the trade unions cooperate, because they, too, are anxious to produce the goods which can be sold and anxious to get the advantages which they themselves can share. But there will be no trade union co-operation if all that they see is a stagnant level of production, when the main fears dominant throughout the factory are suspicions of redundancy. It is at times of growth and prosperity that the unions are adaptable, managements are progressive, inventiveness flourishes, and productivity rises. Given those conditions, and only then, the other matters with which the Ministry of Technology is concerned can help most usefully.
  The one important and relevant feature about devaluation is that it helps to maintain growth by removing the spectre of balance of payments difficulties in the future. For those firms engaged in export markets, very large growth is possible because they have large markets where their prices are right and where they can increase production as much as the very large demand makes possible. It is here that inventiveness counts. It is here that we can get the benefit of the ideas of people in our factories.
  This Budget has come before us in the shadow of the Washington conference. I believe that the rôle of the speculator has always been misunderstood in this country. We have underestimated him because we have been largely unaware of the way in which certain markets operate. The crucial matter which has brought about the speculation in gold has been that, if one assumes a 50 per cent. increase in the price of gold, any person who puts £100 into gold stands a chance of making a profit of £50. If he is wrong, he loses the interest on his £100 for a period of about six months, and that would be subject to Income Tax, Surtax and so on.
  The betting for him is that, if he wins, he makes £50. If he loses, he drops £2 or £3. Given odds of 20 to one or thereabouts, large sums of money came from many parts of the world. However, no one could say that the odds

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  were 20 to one against the Americans revaluing the price of gold. That is why the weight of money went into the purchase of gold. The odds were very high and, whatever view one may hold about transactions of this kind, the pressure to buy can be enormous. I believe that, if the two-tier system falls under suspicion—and there are signs of it already—this very suspicion may leave room for speculators to operate in this sort of way, so that even the United States may be unable to withstand these kinds of pressures. Because of this, I feel that the small central banks may be leaking larger amounts of gold away which it will not be easy for the United States Government to check.
  There is a hydraulic analogy. One has a two-price system for gold, one at the lower price and one at the higher price, with a dam in between. The greater the difference between those two prices, the greater the pressure on the dam until finally it may burst. The important thing from our point of view is to make sure that, if fie dam bursts, it does so without any harmful consequences to ourselves.
  I believe that the two-tier system will be unworkable. The great problem that we have to face is a win by de Gaulle in this unpleasing contest, whereby South Africa and Russia will be two of the ma in beneficiaries. Even though this is extremely distasteful, both because of the opportunities that it gives de Gaulle to continue his policies and the lack of opportunities which will face us in reforming international monetary matters properly, I am strongly against revaluing the price of gold. But better that than see the international monetary system collapse. I believe that the two-tier system is unworkable, first, because of the leakage by the smaller central banks selling gold at the higher price; secondly, because eventually the other central banks, if faced with a large difference between the official and the market price, will become disinclined to support the policy; and, thirdly, because deflation in the United States, which is the positive solution, is extremely unlikely this year, both because of the situation in Vietnam, where the spending looks like being more rather than less, and because of the difficulty of introducing austerity in an election year.
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  Therefore, all that we have is a short breathing space, and it is important that we use it in the right way. The most important thing that we should do in this breathing space, in the eventuality of a general revaluation against gold, is to make sure that the existing parities are preserved. The cardinal principle of British economic policy today, if there is a general revaluation against gold, should be to ensure that the relationships between all other currencies are preserved in our own interests.
  I have always had very strong reservations about the prices and incomes policy. Recently I have been particularly afraid that the undue emphasis placed on the prices and incomes policy might inhibit the Chancellor from acting in the way that he did. I felt that if excessive reliance was placed upon the prices and incomes policy it might be thought that this very largely would cure our problems. I am pleased that my right hon. Friend has not fallen for that. That, at any rate, is one fear that has now been removed.
  The second fear that I had was that the advantages of devaluation might be dissipated by the industrial unrest referred to by my hon. Friend the Member for Liverpool, Walton (Mr. Heffer). This real fear is still with us.
  I am generally in favour of a prices and incomes policy. Governments are now expected to control the economy in order to improve living standards. It is expected by the people and right hon. and hon. Members. When the economy is going badly, criticism is directed against the Government, but the Government cannot take responsibility without having some powers. The Government cannot be neutral about many aspects of the economy, and they must have some view on prices and incomes. The danger is that they may over-estimate their own powers and the powers they try to create. If they over-estimate their powers they can take some wrong and dangerous decisions. In the long run, I am sure that the incomes policy will turn out to be the keystone of the economic policy of the future whereby these things are settled in a fair way between people. But that time is not now. Our task now is to prepare and build for it. An incomes policy is a long-term solution. To attempt to make a

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  short-term solution out of it is to risk both the present reality and the future hopes of it.
  I have said that the prices and incomes policy is a bonus. I believe it is a bonus, because if exports were not to rise, as a result of present Budget policy, the deflation in the Budget would prevent wages being increased. If exports were to rise some wage increase would be acceptable. So, either way, the prices and incomes policy is a bonus. I repeat, if exports do not rise the deflation inherent in the Budget would prevent any wage claims being met. If exports were to rise, I think that some wage increase would be acceptable The prices and incomes policy ought not to be the kernel of our economic policy. It can help, but it must be used with care.
  I join with other hon. Members in congratulating the Chancellor on a splendid decision to free the statistical forecasts for our use and benefit. When one thinks of some of the things they show, it must have been tempting to conceal them once again. With growth prospects a little less optimistic than we had hoped, there must have been a strong temptation to conceal them. The fact that as a new Chancellor my right hon. Friend has had the courage to do this should be recognised. We can now make comparisons and have much more informed discussions of the way the economy is going in preparing people for the kind of decisions which the Government are going to take. The most important thing of all is that the Treasury knowledge is now open for us all to see. The basis of the oracle is now revealed to us all. Its assumptions are open to us.
  We have had a Budget which is in tune with reality. For all its harshness, it is probably the only kind of Budget which could have been acceptable to us. As a result, we now have the right exchange rate, the right kind of world rôle, and the right kind of economic policy. There is not a great deal more that the Government can do to assist industry with effect over the next two or three years. It is now up to industry to make use of the advantages which have been given to it, and I hope that it will prove equal to our expectations.
  8.36 p.m.
  Mr. John Biffen: The hon. Member for Ashton-under-Lyne (Mr. Sheldon) referred to the shadows which quite clearly overhung the Chancellor during the weekend before he presented his Budget, with the whole of the international payments situation in some dislocation. Like the hon. Gentleman, I do not believe that there is any likelihood of the two-tier system enduring. I think that it was monumental optimism on the part of the Chancellor to suggest that it would endure. If someone takes a decision in the 1930s to fix the price of a commodity, it is hardly surprising to find, 30 years later, that there has developed a shortage and a black market.
  That is what has happened to gold, and I retain sufficient scepticism of Govment paper, be it the paper of the British Government or any other, to believe that there will be no long-term solution along the lines of the special drawing rights, and that we will inevitably be driven to a revaluation of the price of gold. I am only sorry that it will not be proceeded with in an orderly fashion, rather than having ourselves pushed and manoeuvred into this decision probably at some period after the American Presidential elections. I do not lay the blame for that particularly at the door of the British Govern-because quite clearly this is very much more the concern of the Americans.
  The debate having been opened by the Secretary of State for Economic Affairs, it has naturally concerned itself primarily with prices and incomes policy, and inasmuch as it has had supporters at all, they have tended to be of that apocalyptic nature in which the hon. Member for Ashton-under-Lyne gave it a somewhat temperate endorsement. I suggest that a good starting point for the consideration of these further stages of the Government's prices and incomes legislation—because what we are talking about is not some abstract metaphysical consideration of policy, but legislation—could well be the Question tabled by my right hon. Friend the Member for Thirsk and Malton (Mr. Turton), and answered on 27th February, which indicated that over the last three years the total money supply was increased at an average rate of about 7 per cent., and the gross national product at constant prices had increased by about 2

  709
  per cent. It is the gap between those two figures which lies at the heart of so much of the unhappy inflation which has characterised recent years.
  The conclusion which I draw from that is that it is not the recklessness of trade union leaders, or the ineptitude of industrial managements, but the irresponsibility of Government monetary management which is on trial, and there is no doubt that this was in the minds of the I.M.F. when its members were at the the Chancellor's elbow when he drew up his Budget. It is of great significance that we have had a Chancellor calculating the Budget arithmetic taking additional taxation of the order of well upwards of £800 million, with the emphasis on indirect taxation. I think that he is right. I may quarrel with various aspects of the package, but, broadly speaking, I am certain that he was right to be aiming at figures of £800 million plus, given the high level of public expenditure. Given the fact that for each £1 spent by the Government in 1964 today we spend 26s.—given those circumstances the amount of additional taxation at which he had to aim was unhappily of this order of magnitude and this has a real bearing upon the net borrowing requirement, or the uncovered borrowing requirement as I would prefer to term it.
  In these circumstances, we must ask ourselves why, then, do we have yet another chapter in the whole question of incomes legislation?—because I cannot believe that anyone who heard the right hon. Gentleman the Secretary of State for Economic Affairs this afternoon felt there was some compulsive inner logic about this policy which would commend itself to the House. Whatever scepticism I might have had about the policy, and I believe my scepticism was shared by some hon. Members opposite, was fully underlined by the Secretary of State this afternoon; for it seems to me that the prices and incomes legislation, as it has been seen to work over the last two or three years, is a blend of farce, self-deception and random tyranny. I will detain the House for only a few moments because I believe there may be some hon. Members opposite who may want an opportunity to follow these three points.
  First of all, there is the element of farce. Before we go too far I feel that the House should be alerted to the danger
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  of trying to engage in some kind of Parliamentary bloodsport, of harrying the Secretary of State for Economic Affairs; because many of the assertions made by the right hon. Gentleman the Chancellor of the Exchequer himself from that Box on Tuesday last were of just as great a magnitude of stupidity—no, that is a harsh word—of strain on our credulity as anything that was said by the Secretary of State for Economic Affairs this afternoon. I should like to quote from the speech of the Chancellor of the Exchequer. He was talking about the 31 per cent. increase to be permitted to incomes. He said:
  "There will be an exception to the ceiling for productivity agreements"—
  and I come now to the real key words:
  "stringently tested—which raise productivity sufficiently to justify a pay increase above 3½ per cent."
  As my right hon. Friend the Member for Mitcham (Mr. R. Carr) asked, "Who is going to do the stringent tests?" The 20 stout fellows at the Ministry of Labour, we are told, are employed full time on examining productivity agreements. But of course the situation does not end there. As we are constantly reminded, it is a policy which applies not merely to income but to prices, and the Chancellor of the Exchequer had this to say:
  "But we must see that prices do not rise by more than is strictly justifiable, and we shall be seeking an extended power to enable us to defer or suspend increases which cannot be strictly justified."—[OFFICIAL REPORT, 19th March, 1968; Vol. 761, c. 264.]
  I love this concept of a strict and careful assessment of price increases. The First Secretary of State, in answer to the question raised by my right hon. Friend the Member for Mitcham and myself, was anxious to explain that it was not going to be left to employers to act as a screen on behalf of the Government, that the Government would do this job themselves, with the help of the Prices and Incomes Board. I reflected on a little exchange I had a few weeks ago with the Ministry of Building and Public Works.
  Mr. Charles Pannell rose—
  Mr. Biffen: As I am trying to speak briefly I will not give way. The Ministry of Building and Public Works is a very important Ministry. I say that quite

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  genuinely in the presence of a very distinguished former holder of that office. Under the early warning system, the Ministry is given the responsibility for examining bricks, roofing felt, asbestos cement products, pitch fibre pipes, plasterboard, glass, glazed floor tiles, ceramic sanitary ware, building blocks, sand and gravel, clay pipes and ready mixed concrete. One may wonder how many people are examining this vast range of highly important and sensitive products on behalf of the Government's prices and incomes policy. The answer given to me by the Minister at Question Time was that three officials are employed part time. This is the measure of the farce of this policy.
  I turn now to the element of self-deception. One of the fascinating aspects of the debate is the repeated assertions that the policy is working. "You sceptics," the argument goes, "are being disowned by the course of events." This is not simply an argument of months ago, followed by a suddent pre-Budget silence. Only on Monday, the Joint Parliamentary Secretary to the Ministry of Labour, when I asked him also about the number of officials vetting productivity agreements, said:
  "Before devaluation it"—
  the prices and incomes policy—
  "was working successfully with the number of civil servants that we then had. Since devaluation it has been working successfully with the same number of civil servants."—[OFFICIAL REPORT, 18th March, 1968; Vol. 761, c. 31.]
  The policy which was working successfully, according to the Parliamentary Secretary on Monday, the following day was described by the Chancellor in these terms:
  "In the course of 1967, as I have said, average earnings per head rose by about 6 per cent.…—[OFFICIAL REPORT, 19th March, 1968; Vol. 761, c. 263.]
  Of course it is not working, notwithstanding the heroic assertions of the Parliamentary Secretary.
  My third charge is the random tyranny of the policy. There seems to be a "Nelson's Law" in the Government's approach. They blunder around in practically universal blindness, relieved only occasionally by the startling revelation of sight. Not long ago, 15 draughtsmen employed by Beckman Instruments were
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  selected for the full majesty of a directive. I can do little better than quote what the management said on that occasion, as reported in the Financial Times:
  "Now, five-and-a-half months after we first reported the agreement, a direction has been imposed on us suspending payment of the increases which the draughtsmen have been receiving for the past 12 weeks."
  Well, hard luck. That would seem a little arbitrary, if those draughtsmen have followed the intricacies of prices and incomes policy as I have sought to do.
  One example takes me into Scotland, which is usually thought to be without the responsibility of English Members. The Secretary of State for Scotland told me recently the increases as a result of settlement for officers working on the Scottish fisheries protection vessels. I do not begrudge a penny of it, and I am sure that they fully deserve it, and we should remember that 2¼ years had elapsed since the previous increase had taken effect. Second engineers were earning £26–£30 a week, which, as a result of the award, rose to £34–38 a week. No question of the lower paid here, and that is an increase of between 21 and 28 per cent. It is these examples which begin to make one doubt the sense of social justice of this policy.
  There is an anxiety on the part of hon. Members to say that the prices and incomes policy is getting less and less relevant. That was the view of the hon. Member for Luton (Mr. Howie), and my hon. Friend the Member for Guildford (Mr. David Howell) said that he thought that it was becoming a sideshow. I can see the force of their argument, but the fact remains that the legislation which we were asked to consider in 1966 provided for a four months' delay, that the legislation which we were asked to consider in 1967 provided for a seven months' delay and that now we are being asked to consider legislation which provides for a 12 months' delay.
  This is not a policy which is getting less and less significant in its statutory implications. It is not a statutory bridge across which we must travel to get to the voluntary system which, we were told, lays at the heart of the desire of hon. Gentlemen opposite. I cannot help feeling that Government-planned incomes, prices and investment is the hallmark of

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  managerial Socialism. What we are seeing—and what we saw particularly from the Secretary of State today—is a dessicated and foredoomed search for efficiency replacing the compassion which was the original inspiration of the Labour Party. The legislation that has been outlined today merits the sustained opposition which I am confident it will receive.
  8.51 p.m.
  Mr. Roy Hughes: In the 1959 General Election I was assisting my right hon. Friend the Leader of the House in his campaign in the Coventry, East constituency. His opponent on that occasion was the hon. Gentleman who is now the Member for Oswestry (Mr. Biffen). I am sure that he will forgive me if I say that he was aware that he had no chance of winning Coventry, East and that he was merely being a decoy for his party to attract my party's workers away from the more marginal and key seats of Coventry, North and Coventry, South. Having listened to the hon. Gentleman tonight—to his resentment of Government interference in industry and his adherence to laissez-faire principles—I feel that he is still being a decoy for his party, but this time a decoy on behalf of his right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell).
  It is reasonable to suggest that on Tuesday we all listened—at least all of my hon. Friends did—with great admiration to my right hon. Friend the Chancellor as he faced up to his formidable task. The severity of the measures he introduced left no one in doubt about his determination to conquer Britain's balance of payments problem. For me, The Guardian summed up the situation in a leading article yesterday, which said:
  "If Zurich, Paris and other centres of gnomedom are not satisfied by the measures announced yesterday, then nothing will ever satisfy them."
  In response to this one could say that it was disproved long ago that what is good for General Motors is necessarily good for America, and likewise one could say here that what is good for the bankers is not necessarily good for the working people of this country.
  In general terms, I welcome the new taxes on the more wealthy sections of the population. Some of these measures are long overdue. On the other hand, I dislike the emphasis on indirect taxation.
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  We must face the fact that the Budget could lead to unemployment. The severity of its cut-back on home demand could lead to short-time working and unemployment in firms making consumer durables like washing machines, television sets and so on. We must also remember that many of these factories are based in the development areas, where unemployment is already quite high.
  My main criticism of the Government is that in the three-and-half years they have been in office they have seemed to lack a tactical approach. There are a number of examples one could cite, but I mention only two. Whatever one's views may be on the Common Market, whether one is in favour of Britain's entry or not, it was fairly apparent from the start that Britain's attempt to get in would be abortive. It struck me that the Cabinet had been intoxicated by the enthusiasm of my right hon. Friend the Member for Belper (Mr. George Brown).
  Secondly, there was the issue of prescription charges. It has been said many times that that is a great emotive issue among hon. Members generally and in this party. The amount the charges will yield will be puny. It compares with the amount which will accrue from the new payment of Income Tax on children's investment income. As The Guardian said, the bankers have been satisfied that the new measures will raise over £900 million in a full year. The basic question is, why then the need for new incomes legislation?
  This is where my charge of lack of tactical approach comes. I do not agree with the Secretary of State for Economic Affairs who appeared to believe that one of the reasons for our exports being uncompetitive is the wages situation. Our wage levels no longer compare favourably with those paid in countries which are our principal competitors. Wage increases granted in this country from 1960 up to the present do not compare favourably with those granted in those countries.
  My third accusation is that this incomes restraint leads to inefficiency in industry. There is no incentive to forward-looking people, no incentive to manufacturers to invest in new plant and machinery. That item alone could give more power to their elbow and could increase productivity in industry. It seems that at present the Government, above all else, need friends. Where will they get those friends? Will it be in the C.B.I.? Right up to the time

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  of the Budget the C.B.I. called for more profits and was trying to maintain price stability. Its co-operation with the Government has been most limited. By comparison the demands of the trade unions have been most modest. They have bent over backwards to co-operate with the Government.
  One of the most famous figures in the Labour movement in this country in this century was Ernest Bevin. I believe that at the 1935 conference of the Labour Party he said that the party was the child of the trade union movement. One would not get that impression today. I am given the impression that some of my hon. Friends think that the only reason for the existence of the trade unions is for them to go to them with a begging bowl for financial support for their election campaigns.
  If the Government do not show a better spirit of co-operation with the trade unions, catastrophic defeats will continue in local elections and in by-elections. Then, as a result of this incomes legislation, all the Government's plans could go up in the air because of a major strike. The Government certainly have a vested interest in getting some real co-operation with the trade unions, so I would say to them, "Withdraw this proposed legislation while there is still time."
  "Roy's the Boy: millions on shares" said the headline in the Evening News yesterday. This may be very gratifying, but when the euphoria dies down, as die down it will, the Chancellor and the Government will need to remember that bankers have never been recognised as friends of the working people of this country or of the British Labour movement.
  9.1 p.m.
  Mr. Terence L. Higgins: This has been an interesting and a controversial debate. Concentrating as it has on incomes policy, the controversy has raged not only across the Floor of this House but of course, as one might have expected, between the Government Front Bench and those on the other side of the House below the Gangway, and particularly in the third row, such as the hon. Member for Liverpool, Walton (Mr. Heffer). It has been very significant that the degree of support which they have
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  had could be described, at the most optimistic, as minimal and the number of questions which have been asked has been very large indeed. The hon. Gentleman the Member for Walton certainly asked some very cogent questions, as did the hon. Member for Luton (Mr. Howie), and my right hon. Friend, in opening, also asked a number of questions.
  Therefore it is quite extraordinary that we are not, I understand to have a Minister replying to this debate this evening, because clearly it will not be possible for the Minister, speaking on Monday, to deal adequately with all the points that have been raised on this particular question of incomes policy. Therefore we are forced to the conclusion that as far as incomes policy is concerned the Government simply are not prepared to face up to the questions. Indeed, they have lost their nerve on the whole matter. There is total confusion behind the scenes, between the Labour Party and the Prime Minister, the Government themselves and the trade unions and the Government and the C.B.I. It was abundantly clear from the speech made by the First Secretary that the Government themselves do not know the answers to a great many very cogent questions of the kind put in earlier interventions.
  Mr. Mendelson: As far as the right hon. Gentleman the Member for Mitcham (Mr. R. Carr) is concerned, there is no need to reply to that string of platitudes and evasions. From that point of view there is no obligation on my right hon. Friends to waste their time on it.
  Mr. Higgins: The hon. Gentleman usually makes a much better intervention than that. He is referring to his own position, which is entirely against the Government point of view.
  The First Secretary's speech generated a great deal of heat, it was singularly ill-mannered and threw very little light on what the Government propose to do. I understand that the hon. Member for Heywood and Royton (Mr. Barnett) is likely to catch your eye, Mr. Deputy Speaker, but the sad thing is that, while I always listen to his speeches with the greatest interest, he is not in a position to commit the Government in answering the cogent questions put this afternoon.
  The fact is that there has been very little consultation such as there was back

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  in the golden days of the right hon. Gentleman the Member for Belper (Mr. George Brown) and his declaration of intent, with the trade union movement or the C.B.I., and the extraordinary answer apparently given in discussing this was that the Chancellor could not anticipate his Budget.
  Many people in the House believe that there is a strong case for having a more detailed examination of proposed changes in the principle of taxation before Budgets. To suggest that there could not have been prior consultation on the incomes policy before the Budget is most arrant nonsense. Even after reading the hon. Gentleman's speech tomorrow, it will not be possible for the industrialists and trade unionists really to know what the Government's policy will be on this. We must wait day after day for a White Paper which apparently has not yet been formulated. In view of the negotiations which are clearly going on behind the scenes it would he interesting to know whether it has been printed and whether the negotiations will have any effect on the policy. It was clear after the T.U.C. meeting at Croydon that whatever it agreed in the way of a voluntary policy it would be clobbered by legislation.
  In any case, the incomes policy should be placed in the general economic context. I want to spend a short time in going into that in some detail because we have had what was undoubtedly the toughest Budget this country has ever had to face. As my hon. Friend the Member for Guildford (Mr. David Howell) pointed out, there are a number of very obvious reasons. The first and most overwhelming is that Government spending is out of control. In his television broadcast on Tuesday, the Chancellor said, "Last January we cut Government expenditure". That is simply not true, and he knows it. All that the Government did then was to reduce the rate in plans for Government expenditure, which is totally different.
  The second main reason has been mistiming, which has been the hallmark of the present Government time and time again. From October, 1964, the Government, and particularly the Chancellor of the day, have deferred taking action until too late. As a result, we have gone from crisis to crisis. That is so even now, when
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  the Chancellor failed to take adequate action on the day of devaluation, which even a first-year economic text book would tell him he should have done. Perhaps the hon. Member for Heywood and Royton can enlighten us on this.
  We are told in an article in The Guardian today that the timing was defended. It said:
  "As for the charge that he should have acted sooner, Mr. Jenkins pointed out that his carefully calculated proposals achieved a redistribution of income from rich to poor of about 1¼ per cent. This could not have been done by careful use of the regulator last January, he said."
  Surely he could have put on the regulator at that time, carried out the reforms in the Budget and take off the regulator then. Therefore, that argument falls to the ground with a sickening thud. The article continued:
  "Nor would it have been timed correctly from the point of view of exports."
  It is abundantly clear that the spending spree resulting from the Chancellor's failure to take action—not in January, as the report said—but in November, resulted in a great loss of opportunities. In January exports of motor vehicles from this country fell by 14 per cent. and imports rose by 75 per cent., clearly as a result of the Chancellor's not taking action earlier. Therefore, the timing problem continues right along the line.
  We have also the division of responsibility over the years between the D.E.A. and the Chancellor, and the fact that too much weight has been placed by the Government on incomes policy. If nothing else, we should be grateful that the Chancellor suggested in his Budget Statement that the incomes policy had been moved from the central position it had previously taken to something which my hon. Friend the Member for Guildford described as a sideshow. We certainly regard this as a healthy development.
  I want to make one other point before turning to the incomes policy in rather more detail. We do not accept and have not accepted that the reason for the present Government's troubles is in any way the situation which existed in October, 1964, for reasons which my right hon. and hon. Friends have spelt out many times. In any case, it is right and proper that we should look at this year's Budget in

  719
  the light of the statements made at the time of last year's. That dispels once and for all the alibi that our present troubles were in some way due to 1964 or the underlying difficulties in the economy.
  I am glad to see the Chancellor of the Exchequer here. He stressed the other day that we had to go into devaluation and have to take these measures because of underlying structural changes. How can the Government reconcile that statement with the kind of speech being made by the Home Secretary a year ago, when he was Chancellor of the Exchequer? On 3rd June, 1967, at the Co-operative Education Centre, the present Home Secretary said—and it is worth quoting this at some length—
  "The message I want to leave with you this afternoon is that the period of standstill in the economy is finished. We are now beginning on a period of controlled growth and expansion.
  It will not be wild and irresponsible as it was during the last days of the Tory Administration when they ran up debts amounting to several hundreds of millions of pounds."
  That, of course, is quite different from the debts recently incurred. The right hon. Gentleman went on:
  "This time our controlled rate of expansion will be combined with a surplus in the balance of payments."
  How can that be reconciled with the Chancellor's statement on Tuesday? The Home Secretary continued:
  "The Government estimate is that we can increase our real resources by getting on for £1,000 million every year.
  Some of the critics and pessimists are expressing their doubts about whether we can do it. One newspaper yesterday had the heading: 'Economists knock Callaghan's output predictions.' This kind of comment misunderstands the Government's policy…We aim at a 3 per cent. growth rate confident in the knowledge that that can be combined with a balance of payments surplus."
  How can the Chancellor possibly reconcile that statement, made only nine months ago, with the statement he made on Tuesday saying that there was a structural difference in the economy, that we had to take this kind of measure and that devaluation was necessary and so on? Still less, how can any right hon. Member opposite, in the light of that statement, say that the present situation is due to something which happened in 1964?
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  The fact is that the present crisis is due, as we have consistently asserted this week, to gross mismanagement of the economy over the last year, and the reason why we cannot look forward, as the Home Secretary claimed we could only nine months ago, to a situation in which the standard of living of every family would steadily rise, and the reason why the Chancellor has had to introduce a Budget which deliberately cuts the standard of living, is that the Government have mismanaged the economy.
  If we look at the kind of point we have been discussing on the speech made such a short time ago—only last June—and compare it with the Chancellor's Budget speech, it is abundantly clear who is responsible for getting the country into the mess we are in. I had hoped at this point to say a few kind words to right hon. Members opposite because, for three year, particularly in debates on the economic regulator and on Finance Acts, I pressed the Home Secretary to publish the economic forecasts of the economy. We got unsympathetic replies from him. On 16th June, 1966, refusing to publish the forecast, the Home Secretary said:
  "As everyone knows, I am neither an economist nor a statistician. I do not have a trained mind. I merely dance to an old Hungarian tune."—[OFFICIAL REPORT, 16th June, 1966; Vol. 729, c. 1854.]
  He explained then why he could not publish the forecasts. That extract well serves as the epitaph to his Chancellorship.
  I was glad to hear the Chancellor say on Tuesday that the Government would publish the economic forecasts. If that were so, it would be a very great step forward and I do not doubt that, if the Economist comes out tomorrow, it would say so and what a good thing it was. I had hoped to say, "Hear, hear" and I am sorry, therefore, to have had to put down a Question to the Chancellor asking for figures for real disposable personal incomes corresponding to the figures for consumers' expenditure on page 38 of the Financial Statement. The Financial Secretary's Answer today was:
  "No. The scope of the information in Part III of the Financial Statement has been very carefully considered, and represents a great advance on the practice of all Governments since the war."
  This is perfectly true but we are now in the situation in which the Chancellor

  721
  will not give us the figures that we have asked for. We have now reached the position when he says, "I will give a column of eight figures and provide six answers but you will tell me if the remainder are correct". Then he says, "I will give you the seventh figure". That is a great advance, but when we ask for the eighth figure, so that we can see whether we are right, he turns round and says that giving the seventh figure was a great advance upon anything that we have had before.
  The right hon. Gentleman is sensible about this, and we are grateful to him for giving us what he has, but we cannot tell whether the figures are correct unless we have the figures for real disposable incomes and personal disposable incomes. I should not like him to think that he has given us everything. I hope that in asking for more, like Oliver Twist, I will succeed in getting the missing figures, without which we cannot reconcile those figures that he has given us.
  The crucial point to be made about incomes policy is that made by my right hon. Friend the Member for Mitcham (Mr. R. Carr) in his opening remarks. It is that an incomes policy can mean a great many things. This was cogently put in an article in the District Bank Review by the editor and assistant editor of the National Institute Review, who wrote as follows:
  "Sometimes 'incomes policy' is discussed as if it were a single thing—an attribute which an economy either has or does not have, in much the same way as a human body either has or does not have chicken pox. In fact 'incomes policy' can be all sorts of devices."
  There is a vast different between the kind of incomes policy which we on this side believe that we ought to have and the kind of compulsory policy which H and right hon. Gentlemen opposite have been pursuing. It is relevant to ask whether we need an incomes policy at all. Is compulsion necessary? Is the compulsory policy effective, and finally are the costs and damage done by that policy worth the results?
  I address myself particularly to the Minister of Labour, who I am glad to see is here. The point that needs to be made is that, when we were in office, we accepted the view that any measure which would help to keep increases in incomes in line with increases in pro
  722
  ductivity was likely to be beneficial. For that reason my right hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd) adopted an incomes policy which was voluntary over the mass of the country. In the public sector, over which the Government have responsibility, then the Government ought to set an example and adopt the kind of criteria which they feel should be adopted by other businessmen in the national interest.
  There are many areas where the Government can set an example, not least in the gas and electricity industries and on the railways. That was the crux of my right hon. Friend's policy, operated on the basis of exhortation. The extraordinary thing is that if one looks at the statistical analyses which have been carried out it is shown to have had remarkable effects. The National Institute Review shows that the percentage rises for weekly wage rates from April, 1961, to October, 1962, were 5·4 per cent. From April, 1966, to October, 1967, the period of freeze and severe restraint, the equivalent figure was 6·2 per cent., significantly higher. The voluntary policy of my right hon. Friend, in terms of actual results, was more effective than the compulsory policy of the Government.
  In describing the policy of the Government of freeze and severe restraint the District Bank Review says:
  "During the short period of freeze itself, there is no doubt that there was an effect. Both the wage-rate index and the average earnings index levelled off for about six months. The question to decide here is whether or not there was any permanent effect or whether the freeze simply postponed the increases."
  It goes on:
  "It seems probable that there was simply a postponement. From July 1966 to October 1967—that is, from just before the freeze to the latest available figures—average earnings rose just over 5½ per cent. This, given the relatively high level of unemployment and the comparatively slow rise in prices, is reflected as roughly what one might expect from natural forces."
  All the trouble, therefore, we took with that first Prices and Incomes Act and the second Prices and Incomes Act, all the trouble which has gone on in the Left-wing of the Labour Party, in an estimate of the editor and deputy editor of the National Institute Review produced no significant effect other than that which would have been likely to be produced

  723
  by natural forces. It is for that reason there has been all this trouble.
  I would say a word or two about the next stage and, in particular, I wish to examine the signs we have so far as to what the Government actually intend. It seems clear that the Government propose to extend the powers from seven months to twelve months. As was pointed out, this means that it will be possible, thereafter, for trade unions to put in claims retrospectively for the amounts which they might otherwise have obtained. It will not be possible for them to pursue the matter in court. That was, I think, the effect of the reply given to my right hon. Friend.
  Then we come to the question of the maximum figure and what it means. I was somewhat disappointed regarding the precision of the Chancellor of the Exchequer in his Budget Statement. He said:
  "On the income side its main feature will be a ceiling of 3½ per cent. on increases in all the main forms of remuneration, but excluding increases directly related to the amount of work done." [OFFICIAL REPORT, 19th March, 1968; Vol. 761, c. 264.]
  I should have thought it more convenient and precise if he had expressed it in terms of wage rates or earnings, or some other more precise terminology.
  At all events, we are told this figure is to be a maximum figure. Perhaps we might have from the Chancellor of the Exchequer on Monday, an answer to the point made by the hon. Gentleman the Member for Walton who asked whether it is true that the provisions of Cmnd. Papers 3225 do apply now. That is to say, does the nil norm apply except in cases where the criteria are met? There is a clear question here and I hope we shall get a clear answer on Monday. If that is so, the ceiling appears to be very stringent indeed. Are we to understand that in the Government's view there shall be nothing whatever above the 3½ per cent. whatever in the case of productivity agreements? There is still some doubt about that point.
  What is the position with regard to overtime? Does it come within the phrase used by the Chancellor in his Budget speech, or is it to be considered as something over and above that?
  It is extraordinary that the Government, the Prime Minister at Question
  724
  Time some weeks ago, the Chancellor in his speech, and the First Secretary today, have failed to spell out in detail exactly what is meant by this figure.
  Mr. Shore: I would not now attempt to answer all the points raised by the hon. Gentleman the Member for Worthing (Mr. Higgins). There are two points to be made clear. First, overtime is not included in the calculation. Secondly, productivity agreements expressly, providing that they are genuine productivity agreements, can be above the ceiling.
  Mr. Higgins: It is extraordinary that the right hon. Gentleman the Secretary of State for Economic Affairs agrees he cannot give an answer to all these points. Clearly no one knows the answer to them. He has not given answers to many of the other questions; he would answer two only. The first answer is still ambiguous, but I have not time to go into it in detail now. I will return to the second answer in a few moments.
  I would ask the Chancellor of the Exchequer, since he says he is not putting the incomes policy in a central position, exactly what quantitative effect he expects to get from the incomes policy. In other words, how much more does he think he would have to increase taxation if he has not got an incomes policy? This is very relevant.
  I want to raise a second broader point on what the policy means. The argument all the way through the Government's policy so far has been that the objective must be to keep increases in incomes—that is to say, earnings—in line with increases in production. That has been the clear statement all along the line. But that is not what was said by the Secretary of State for Economic Affairs today. Perhaps the hon. Member for Walton might like to consider this. Previously, it has been said that earnings must be kept in line with production. We are now told that earnings must not rise faster than the cost of living. This is a totally different concept. They have rung the changes.
  If that is the objective, the policy is doomed to failure, because it assumes that incomes will be rising faster than production. So not only are we asked to make sacrifices for an incomes policy. We are now asked to accept a policy

  725
  which will not succeed in the objective which all previous Prices and Incomes Acts have declared as their objective. Again, one hopes for some clarification in the course of the Chancellor's speech on Monday.
  Finally, I want to say a word or two about the costs of the policy and the criteria. As regards the costs of the policy, it has been pointed out time and time again when debating prices and incomes orders that the policy of the Government strikes at the very roots of collective bargaining. It discriminates against small groups. We do not know what criteria are used in deciding whether or not to impose an order and whether they are imposed on the weakest or on those who are being most awkward. It is grossly unfair as far as "Nelson's Law" is concerned. It appears to depend on whether a particular increase catches the Government's eyes and gets itself referred to the Board.
  It is not surprising that the whole concept is totally ineffective. It is a bucket with hundreds and thousands of holes, and, therefore, the result is the kind of result which has been pointed out in the National Institute Review and the District Bank article to which I have referred.
  We have been told that the same criteria apply and that the first is that of productivity. We have been told that productivity agreements are to be exempted. But the only case about productivity debated in this House has been that of the Birmingham car delivery drivers, and that faded into oblivion. The question of whether return loads comprised productivity agreements arose. The Guardian had this to say about it on 28th July, 1967:
  "Mr. Hattersley said that the information which had been produced was inadequate to judge whether the agreements fell within the productivity criteria, but since they had already undergone substantial deferment, the Government did not believe there should be a further delay."
  The resources of the Minister of Labour's Department working on this single case still cannot decide whether they are productivity agreements, yet we are told that there will be hundreds and thousands of such agreements examined by these 20-odd people in the Ministry of Labour, who will decide whether they justify an increase over the norm. As regards lower paid workers, we have had no definition
  726
  to provide a workable basis for the House to consider.
  As we progress with the Finance Bill upstairs and the legislation comes before the House, we shall make progress in elucidating these mysteries to which, alas, we are to have no answer tonight but on some of which we hope to get answers from the Chancellor on Monday.
  It is abundantly clear that the Government's economic policy has failed utterly. It is for that reason that we are given the kind of Budget that we have had this year. What is even clearer is that the Government's prices and incomes policy, in contrast with the kind of prices and incomes policy advocated by my right hon. Friend the Member for Mitcham, is doomed to failure. It has not proved effective. Statistics prove that. There is no reason to suppose that the further measures of compulsion and discrimination which the Government propose to introduce will make any difference in the future or be any more successful than their two foolish Acts of 1966 and 1967 have been over the last period.
  9.30 p.m.
  Mr. Joel Barnett: I am sure that it will be clear, Mr. Speaker, that the fact that you have been good enough to call me to wind up on this side does not mean that I am speaking for the Government. If it is not clear now, it will become clearer later. Meanwhile I hope that my hon. Friends will forgive me if I do not reply in detail to the excellent points which they raised. I will leave that to the Chancellor on Monday.
  The attitude of the Opposition today, and indeed throughout the debate on the Budget, has been patently dishonest, and the seven so-called alternatives put forward by the right hon. Gentleman the Member for Mitcham (Mr. R. Carr) were not alternatives at all. The only way in which the proposals of the Opposition would be worthy of any consideration would be if one of three particular circumstances applied. First, if the handling of the economy in the past had left us with a sound economic base; secondly, if they had taken fundamentally different measures since 1964; and, thirdly, if, in the situation that we have today, they had put forward other and concrete proposals.

  727
  On the first proposition, it is patently obvious from what we found in October 1964. that, whatever else there may have been, there was no sound economic base.
  Secondly, the only substantial difference between what the Opposition have proposed and what the Government have done in the past three and a half years—apart from devaluation, which they say they would not have carried out, which would have made the situation much worse—is that they would have cut public expenditure whilst at the same time increasing it in other spheres, particularly defence, where they would have increased it enormously. The increases that they would have made are real, but their cuts are anything but real. The only cuts that we heard about from the hon. Member for Guildford (Mr. David Howell) were tiny and would have no real bearing on the situation facing us.
  The other cuts which we hear about from time to time from the right hon. Gentleman the Member for Enfield, West (Mr. Iain Macleod) and other Opposition Front Bench spokesmen are cuts in the social services which, if one accepted them, are not cuts in public expenditure, but cuts in private consumption. Therefore, the proposals put forward by the Opposition are no answer to the problems facing us.
  The third proposition, if one could listen to it seriously, is the same as the second—a re-hash of their old proposals.
  Mr. Higgins: The hon. Gentleman will be aware that in the speeches on the Government's proposed cuts we listed a great many cuts, not least on the Transport Bill, the Industrial Development Bill, the Regional Employment Premium and the S.E.T. premium, amounting to about £350 million or £400 million.
  Mr. Barnett: The hon. Gentleman knows that the cuts he is talking about are not cuts in the real sense. It will be clear to any serious observer of what the Opposition have been doing in the past three and a half years that they do not deserve to be taken seriously in their criticism of what the Government have done. One can, therefore, agree with what my hon. Friend the Member for Ashfield (Mr. Marquand) said—that the argument is between those of us on this
  728
  side, and we can tend to ignore the Opposition in serious economic debates.
  I turn to the real attempts which have been made in the Budget to deal with our economic problems. My hon. Friend the Member for Newport (Mr. Roy Hughes) and other hon. Friends have referred to this as a bankers' Budget. They are right in one sense. It is a bankers' Budget in the sense that we are, and have been, using bankers' money, and it is therefore not surprising that we have to take measures which will eventually enable us to make some effort to repay it. Whether we call it a bankers' Budget, or anything else, we will have to take measures which will enable us to repay the money that we have had to borrow. If we did not want this sort of Budget, we should have taken different economic meaures in the past and we would then not have needed to borrow money.
  The Budget was a good presentation, but it was more than just that. It did rather more than make the best of a bad job. In most difficult circumstances, in almost impossible circumstances, it was reasonably fair, although inevitably those with no capital, and on fixed incomes, whether they be £10, or £100 a week, are those who will really suffer. But they will suffer from any increases in taxation, however they are made, whether direct or indirect. This is one of the unfortunate facts of life.
  Despite the distress that we have seen from those in the high income brackets about their standards of living being affected by the increased taxation provided for in this Budget, the fact is that these people will not have their standards of living affected at all. It is a great shame that we cannot do something about that, because it is always those at the lower end of the scale who suffer.
  Above all, the Budget faced the problems confronting us, even if all the answers with which it came up did not appear wholly satisfactory, and it is with these problems which I should now like to deal. The key to it all, as ever, is the balance of payments problem. It is now clearer than ever that this is not dependent on ourselves alone. The recent gold crisis showed that no matter how sound our own basic balance of payments situation, if there is a panic rush out of currencies into gold we go with it.

  729
  On Tuesday when my right hon. Friend the Chancellor of the Exchequer was referring to this aspect of the problem he rather qualified the position as he saw it. He said:
  "…on present prospects for world trade and given the restoration of stability to the International monetary situation I certainly hope and expect that we shall be in surplus in the second half."—[OFFICIAL REPORT, 19th March, 1968; Vol. 761, c. 258.]
  That is in the second half of this year. He was right to qualify it, and in that sense we are still dependent on the world monetary system giving us the stability that we need.
  This is the great worry, because we have now taken measures which mean that we are dependent, not on sterling, but on the dollar, and it was utterly disgraceful that the right hon. Gentleman the Leader of the Opposition, when he spoke immediately after the Chancellor on Tuesday, as usual played politics with the world monetary system. The right hon. Gentleman knows, or should know, what would be the consequences of a disorderly collapse of the system.
  I hope that the two-tier system so laboriously worked out in Washington last weekend will work for a long time. Unfortunately, I do not feel altogether happy about it, although I think that my hon. Friend the Member for Ashton-under-Lyne rather overdid the case against it. I believe that with further action it can be made to work for long enough to give us an opportunity, but, unfortunately, I do not like living in hope that it will work.
  It would be unrealistic and dangerous not to recognise, and for the world bankers and the members of the I.M.F. not to recognise, the situation that exists. The United States will almost certainly be in deficit at the end of 1968, whatever financial measures they take this year. Whatever measures they take in the fiscal field will be more than counterbalanced by the fiscal escalation of the Vietnam war. This is one reason why one hopes to see the United States pursue a new policy in South-East Asia. It would have two good results, but it does not mean that international financial disaster is inevitable. It means that we must not sit and wait for another crisis to be upon us.
  There is a temptation to seek a way out by unilateral action. Like everyone else,
  730
  I do not like to depend on others but it is impossible to opt out of the international monetary system, certainly for a country like Britain. Equally, we must recognise that the ideal way out, by way of something like the Triffin Plan and other arrangements whereby we can have a new world currency unit, is not going to be available to us for a considerable time. Even the very tiny step of Special Drawing Rights will not be ready quickly enough if we do not take other drastic action—and I hope we will—through the Group of Ten and the I.M.F. so that we do not get a repeat of last week's panic.
  The talk of 1931 last week was absolute rubbish. We all know that there is a much greater degree of international co-operation today than there ever was, and one should be able to control the situation very much better than it has been controlled in the past. But the position is still serious enough to cause a great deal of trouble, so it is vital that as quickly as possible we should have talks that are realistic. It does not help to pretend to the word that there will not be a deficit in the United States this year, but pending bigger changes, the two-tier system can be made to work long enough to enable use to have, eventually, a new system in the world to enable world trade to continue to expand. It will not be easy, and I suggest to the Chancellor of the Exchequer that we need a very much greater sense of urgency.
  There are too many people who think, when the international monetary system is mentioned, that it is a technicality which does not really mater. It matters a great deal to the standard of living of people all over the world, and particularly to people in this country, so I hope we will show a much greater sense of urgency, first of all, to make the two-tier system work long enough to enable us to get a rather more stable system away from the nonsense of relying on a piece of metal; but, in the end, we in the United Kingdom can plan only on the assumption of comparative world stability.
  On those assumptions, the Budget strategy cannot be faulted. No one on the Opposition side of the House has been able to fault its strategy. The reason hon. Gentlemen opposite have not done so is that they fear it will be too

  731
  successful, and that before very long we are going to be in a much improved situation. The strategy is based on the economic forecasts we have been given in the White Paper. Like many hon. Gentlemen, I am glad that the Chancellor of the Exchequer has decided to let us have these forecasts although one must confess that there is no real reason why we should be happy about seeing Treasury forecasts. The way in which the Treasury has handled forecasts in the past has not been such as to make us feel terribly happy about the present ones being likely to be any more accurate. But both the Chancellor of the Exchequer and the shadow Chancellor so qualified the forecasts we now have—and quite rightly—that I do not quite know how much they will mean. No doubt we shall know in due course.
  Arising out of these forecasts I should like to be able to be as optimistic as the T.U.C. and those of my hon. Friends who would have liked to have seen us go for the 6 per cent. growth rate recommended by the T.U.C., but unfortunately one cannot blind one's self to what has happened in the past 20 years, or the past three and a half years. I confess I prefer the margin of safety of going for 3 or 4 per cent. at this time, but I sincerely hope that, once we have got this sound basis, we may be able to go for a much larger rate of growth than anything we have seen in the past. I am not content with the statement that 3 per cent. is three times as much as last year.
  So one comes to the amount which the Budget takes out. The right hon. Member for Enfield, West (Mr. Iain Macleod) and others said that there is an element of "overkill" in the Budget. In view of the amount of money collected—the total, not just the extra—and in the context of the total G.N.P., I do not know how people can say that there might be an "overkill" to the tune of £100 million. They are as likely to be right as they are wrong, and might therefore be 50 per cent. right, but I think that my right hon. Friend was right to err on the side of taking too much, as all the evidence suggests that he has done. If it is slightly too much and things are slightly wrong in the autumn, this will not be too difficult to remedy.
  732
  However, I cannot give so much agreement to the size of the surplus and the length of time for which he is aiming to have it. I know that he has to make the right noises, but what is the basis for deciding that we need exactly £500 million? My right hon. Friend said:
  "For the future we need, as I have said, to achieve a continuing balance of payments surplus of the order of £500 million a year as soon as we can and to sustain it for as far ahead as we can see…".—[OFFICIAL REPORT, 19th March, 1968; Vol. 761, c. 258.]
  I do not believe that we need £500 million for our sakes or for the sake of world trade, and it could be positively harmful if we tried to maintain such a surplus for as far ahead as we can see. Therefore, how was this figure decided upon?
  Then one comes to the method of extraction of this total. Again, the Leader of the Opposition cannot really be as foolish as he made himself sound yesterday—
  The Chief Secretary to the Treasury (Mr. John Diamond): Why not?
  Mr. Barnett: I suppose that my right hon. Friend is right: he could be.
  All the right hon. Gentleman's complaints were ludicrous. He complained that there were no incentives. Does he really suggest that, in a year like this, we should reduce Surtax or even the standard rate of tax? As to the Budget's impact on industrial costs, what magical way does he know of increasing indirect taxation without such an impact? If he has it, he should enlighten the House. As to savings, I too would like to see some scheme like that suggested by the right hon. Member for Enfield, West, "Save as you earn", which might attract the small savers rather than the rich, but one thing we need is not the hope of increase saving but the certainty that we will get something out of demand.
  Therefore, although we can hope for something in savings, to suggest that there is some easy way of getting it while avoiding extra taxation is a refusal to face the facts. We should pay tribute to the ingenuity of past Chancellors. When one thinks of ways of helping the small saver, one realises how much they have done. There are small bonds easily available in the Post Offices and many points of supply for the small wage

  733
  earner. Many forms of savings have been thought of in the past. There is no gimmicky way to get a massive increase in real savings, as opposed to switching, which would obviate the need for increased taxation.
  My right hon. Friend has clearly chosen the instrument of indirect taxation rather than direct taxation, as he made clear in his Budget speech. While many of us would normally consider this to be a regressive method, any reasonable person must concede that while indirect taxation does not generally benefit the lowest income groups, this time the selective method by which it has been done, together with increased family allowances, rebates and increased supplementary benefits, should go some way to mitigate the worst effects.
  At the same time, my right hon. Friend has taken this opportunity, through a special charge which at its highest level is a wealth tax, to bring forward another fair method of extraction. This new method of wealth tax might administratively be a better method of raising this sort of revenue than through an actual wealth tax. The Chancellor said that it will apply for only this year, but I remind the House that Income Tax was going to be temporary, too. There may be some other method of applying a similar tax—but I emphasise that I am not speaking for the Government. Nevertheless, I recommend my right hon. Friend to give great thought to this matter because this might prove a more simple administrative method of collecting a wealth tax.
  In the long-term, the only way to get a simpler and better tax system is to have a negative Income Tax system whereby relief could be given to those who are not earning enough to pay any tax at all. I understand, however, that computers are not yet available at the Inland Revenue to make this possible. I trust that my right hon. Friend will give a greater degree of urgency to the need for computers to change the tax system in this way.
  In the meantime, my right hon. Friend should have taken this opportunity to have introduced a small re-structuring of the Income Tax system. Without cost, we could have removed the earned income relief and had rates of tax of 6s. 8d. and 5s. By that means workers would
  734
  know that at the highest rate they would be paying one-third of their income while at the lowest rate they would be paying one-quarter of it. This would have had a considerable psychological effect particularly on people who tend to say, "I will not work overtime because I will pay it all away in tax." Hon. Gentlemen opposite may be delighted to know that by 1970 we may yet have a standard rate of 6s. 8d. or even less. I accept that this year it might have been administratively difficult to make this change, and I also concede that the other taxation changes which I would have liked to have seen would have been equally difficult to introduce.
  I come now to a serious reservation about the Budget, certainly about its underlying strategy. The Chancellor, when speaking about prices and incomes, made this comment which disturbed me:
  "A firm and effective incomes policy is not a substitute for fiscal action as an instrument of demand management. I have not formulated my proposals on the basis that it could be, though they allow for its effects."—[OFFICIAL REPORT, 19th March, 1968; Vol. 761, c. 263.]
  I do not know what my right hon. Friend means by that, but if he is allowing for its effects it is a serious matter. Is he saying that he would have taken more in taxation if there was not a prices and incomes policy? I say that because the little that one can get from prices and incomes legislation—the ability to hold down incomes by perhaps only 1 per cent.—does not seem worth the disruption which would be caused.
  When the Secretary of State referred today to plant bargaining I thought that his remarks were put in their right perspective by my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) who questioned how this would work in practice. In this context, my hon. Friend speaks with great knowledge of how the system really works on the factory floor and at plant level. He showed clearly what could happen and what is likely to happen as a result of this sort of policy.
  Of course it is argued, "If you don't agree, what is the alternative?" I do not know why one needs to put forward an alternative for a policy which in any case will be unsuccessful. My answer is that the alternative to 1 per cent. restraint, plus industrial disruption is a voluntary system with the extra 1 per

  735
  cent. which we might lose. That would be a better alternative taken together with the saving in industrial unrest and the provision of a better atmosphere to get the increased productivity of the kind about which my right hon. Friend spoke.
  Mr. Higgins: I am interested in this 1 per cent., but of course it is the hon. Member's figure. What we want to know from the Chancellor on Monday is his expectation, because all the evidence, on the figures analysed so far, suggests that it has not been worth anything at all to cause this disruption.
  Mr. Barnett: At this stage it is no good asking me that. I should have thought that after the traumatic experiences of the last three-and-a-half years we could have stopped pretending to ourselves, to the public and to foreign bankers that wages legislation can be really effective. With these tax increases and devaluation I cannot see the need for psychological measures, especially when by going for prices and income legislation we shall get the worst of all possible worlds because we all know that in practice we cannot stop price increases. No wonder the C.B.I. has at least seen
  736
  sense and accepted a prices policy. Of course it can accept a prices policy when it knows that it will not work.
  As for dividend legislation, not only is this psyhologically not necessary but we are reversing everything we have said. We should know that Capital Gains Tax and Corporation Tax make dividend legislation unnecessary. We do not need to tell our hon. Friends or the public that dividend legislation is needed, because Capital Gains Tax and Corporation Tax do the trick very well indeed. I hope that for these reasons the Government might reconsider the need for wages legislation. The very marginal economic benefit we are likely to get is simply not worth the industrial, economic and political upheaval.
  With the opportunities we have now given the economy, it would be a real tragedy to be deflected from the course we have chosen, because without wages policy the Budget, plus devaluation, provides an opportunity for the next 12 months to move forward on a sounder economic basis than ever before.
  Debate adjourned.—[Mr. Gourlay.]
  Debate to be resumed Tomorrow.

  THAMES VALLEY POLICE (AMALGAMATION)
  Order read for resuming adjourned debate on Question [18th March]:
  That the Thames Valley Police (Amalgamation) Order 1968, a draft of which was laid before this House on 14th February, be not made.
  Question again proposed.
  Mr. Speaker: I understand that at the moment of interruption the right hon. and learned Member for Huntingdon (Sir I). Renton) was making a protest. I propose to call him later in the debate. He will have to ask formally for leave of the House.
  9.58 p.m.
  Mr. W. R. van Straubenzee: I am sure that I express the appreciation of all those interested in this Order for the Ruling which you gave, Mr. Speaker, that our debate should be adjourned and resumed this night. I realise that we must not trespass on your good nature in the Ruling you have given, but I wish to say to the Under-Secretary that I am indeed grateful to him for the letter which he courteously wrote to me on 18th March on the subject of terminal compensation and on a detailed point as it relates to the Borough of Reading, a point which was argued earlier on Monday between the hon. and learned Gentleman and the hon. Member for Reading (Mr. John Lee). It will come as no surprise to the hon. and learned Gentleman to know that I do not find his letter satisfactory, but this is not the occasion to carry the argument further and I shall be corresponding with him.
  The point to which I am grateful to have the opportunity of reverting is the question of the interim arrangements which, if I may say so, were so lucidly explained for the benefit of the House by my hon. Friend the Member for Henley (Mr. Hay), to whom we are all very much indebted. I want quite directly to pick up an inference that was present in two of the speeches made on that occasion. The inference was contained first in the admittedly impressive speech of my hon. Friend the Member for Wycombe (Mr. John Hall) when he implied that, at any rate, that there had
  738
  been delay before this matter was eventually referred to Mr. Mars-Jones. Perhaps more importantly, the Under-Secretary himself, while saying that he had sympathy with the authorities concerned, went on to say
  "but it was late in the day we saw that no agreement was being reached about the transitional arrangements and that the allegation of the inspector being misled was raised."—[OFFICIAL REPORT, 18th March, 1968; Vol. 761, c. 203.]
  "It was late in the day" said the hon. and learned Gentleman. The facts of the matter are, first, that Buckinghamshire wrote to the Home Office on 17th November. That is a public matter of which we are all aware, and it would be fair for the Under-Secretary to say that there was an inference in that letter that possibly agreement could be reached with the authorities concerned.
  I appreciate that it is not usual for private correspondence at official level to be released, but I have had consultations subsequently with the Town Clerk of the Borough of Reading, part of which I have the honour to represent in this House, and he has authorised me to say that, at treasurer level, it was on 22nd November that the Borough Treasurer of the Borough of Reading made it quite clear that the proposals set out in Buckinghamshire's letter were unacceptable to Reading. Therefore, I make it clear to the Under-Secretary that the only possible "delay" of which Reading at any rate could be accused of being guilty was between 17th and 22nd November. By 22nd November the matter was clear: there could be no agreement.
  Therefore, one is led to speculate—and here we are in the realms of pure speculation—why it was for so long a period as that between 22nd November and the date of the reference to Mr. Mars-Jones that nothing whatever happened. One can only speculate that the Home Office was still resisting the reference to Mr. Mars-Jones, and the Under-Secretary really must allow me to say that, subsequent to so doing and to receiving his reply, they have really proceeded with a haste which has verged on the indecent.
  We all understand that the hon. and learned Gentleman did not for one moment intend to mislead, but in his

  739
  speech on Monday he gave the impression that Berkshire was perfectly happy about the position we have now reached. My hon. Friend the Member for Newbury (Mr. Astor) and I, who have the honour to represent part of that county in the House, have therefore made it our business to make quite certain of the position which we were both sure of on Monday night. We are both authorised to say—and I say it on behalf of my hon. Friend tonight—that, although its financial outlook is different from that of the Borough of Reading, Berkshire takes the strongest exception to what I will loosely call the second Mars-Jones procedure. If anything, it stands to benefit, but it regards the method by which the Home Office achieved this object as very reprehensible.
  The Under-Secretary must understand that, possibly inadvertently, the coming into being of this important police force has started in a most unhappy atmosphere. My hon. Friend the Member for Henley most specifically did not ask, and I equally most specifically do not ask, that the coming into force of the Order should be delayed. That cannot be. It is common ground between all hon. Members and the Under-Secretary that all arrangements are now made. The force must clearly start on 1st April. All we are asking is that the hon. and learned Gentleman will give an undertaking that Mr. Mars-Jones or if he prefers, or if Mr. Mars-Jones prefers, another Inspector, shall be asked to consider this detailed matter and hear all parties and not merely one. There is ample precedent for this, as my hon. Friend reminded the House, in the Southampton scheme, where there is in existence a letter outside the actual scheme signed by all parties.
  Although he has had a busy week, the hon. and learned Gentleman has now had a few hours to consider the representations made to him on Monday. I profoundly hope that he will feel persuaded by them and see that the quite small concession asked of him could be the way by which the coming into force of the Order could occur in an entirely new and improved atmosphere.
  10.8 p.m.
  Mr. Evan Lnard: I add my appreciation to you, Mr. Speaker, and others responsible for our having this
  740
  opportunity of resuming the debate. It is important that representatives of all those very closely affected by the decision should have the opportunity of being heard, as well as representatives of the official opposition. I do not intend to detain the House for very long, because I have very little to add on the facts to the extremely lucid and persuasive presentation of the case by the hon. Member for Henley (Mr. Hay) on Monday.
  I should like first to describe exactly the condition of my own authority over the matter and particularly to emphasise an essential point of principle involved in the Home Office's action in agreeing to an essential element of the financial provisions for the new authority by private correspondence with the Inspector concerned, without adequate consultation with the authorities, which had been represented in the early inquiry but had no adequate opportunity for expressing their views on this point.
  Oxford City has no objection at all to the long-term financial arrangements for the new authority. There is a very good reason. The provisions are based on a very simple principle, that contributions should be according to the capacity to pay, according to the principle of the adjusted rate product, which now that we have a national basis for assessment, is roughly proportionate to capacity to pay.
  Because that is a just principle, it is the principle that we believe should be applied throughout the life of this authority from its earliest years. That, apparently, was the view of the Inspector when he made his report. But the proposal before us is that it should not be applied and that for the first three years, a special arrangement should be made. Let us make no bones about it. It is a special arrangement designed entirely to appease Buckinghamshire—possibly even designed to induce Buckinghamshire to be rather more compliant to the idea of the new authority as a whole and, therefore, to abate its initial opposition.
  The financial effects on Oxford will be that, in the first year of the new authority, its citizens will have to pay about £28,000 more for the new authority than otherwise they would have had to do; in the second year they will have to pay about £21,000 more and in the third year about £14,000. The total over the three-year period will be about £65,000. This money

  741
  will be transferred out of the pockets of the people of Oxford into the pockets of the people of Buckinghamshire who, as the hon. Member for Henley pointed out, are by no means indigent. Buckinghamshire is not a poor authority.
  It is not easy for me to explain to my constituents why they should have to pay extra to the people of Buckinghamshire because Buckinghamshire has taken an extremely obstinate and stubborn line about the creation of this new authority.
  I want now to consider the basic points of the principle involved. One really has to consider three separate stages during this rather unhappy story—the first stage, during the inquiry itself; the stage after the inquiry, when second thoughts were beginning to be had; and the stage after that, when it was the duty of the Home Secretary to consider the first and second thoughts of Mr. Mars-Jones.
  The most remarkable thing about this story is the way in which these second thoughts were reached and a recommendation was made in private correspondence with the Secretary of State without any adequate opportunity for the other authorities affected—incidentally, the majority of the authorities concerned—to put their views on these proposals.
  The most significant point about the correspondence is the emphasis on the fact that something which the Home Office counsel had said had been misleading and had therefore induced Mr. Mars-Jones to make a different recommendation from what he would otherwise have done or to omit to make a recommendation which he would otherwise have made. The most obvious and significant point about this is that, if that statement did mislead him, it is hardly surprising that it misled others present at the inquiry and that, therefore, it did not enter their heads that there was any serious possibility of an interim arrangement.
  It is true that, as my hon. and learned Friend said on Monday, this reference by the Home Office counsel came towards the end of the proceedings, but that is not particularly relevant. In an inquiry of this kind, if there were to be any question of an interim arrangement, one would have expected the Home Office counsel specifically to have raised the point and thus given an opportunity to all the local authorities concerned to state
  742
  their attitudes. One might have expected the Inspector himself to say something about it. This omission was made the more serious, because, I understand, one of the Home Office representatives, Mr. Goringe, a financial expert, even went so far as to say that it was the custom of the Home Office not to recommend financial arrangements of this kind which had not been agreed. This made it all the more unlikely that any of the authorities would suspect that it was likely that the Home Office would agree with the Inspector, or that he would recommend, any scheme which had not been fully discussed with their representatives.
  So much for the events of the inquiry. It is quite clear that either the representatives were misled by the Home Office official into thinking that this question of interim arrangements would not arise, or it never entered their heads that there was such a possibility. These arrangements are extremely rare. Of all the amalgamations that have taken place, there have been only three or four where such a thing has been proposed. If this is the case, it would not be surprising if representatives did not think it necessary to say anything about this. They feel, inevitably, extremely aggrieved about this point, raised at the last moment and without adequate discussion at the inquiry.
  After the inquiry we had this process of going back to the Inspector. Something must be said about the whole procedure here, and I hope that hon. Members will not be offended if I say that some of us feel there is something slightly reprehensible about the somewhat sly behaviour of Buckinghamshire in making private approaches to the Home Secretary, in moaning in a rather pathetic way about the disastrous effect of this proposed arrangement on its finances. This is a county which is by no means poor. It was suggesting therefore, that it would be a good idea to nut some of the burden on to other unfortunates in other authorities, and that perhaps the Inspector really intended to recommend something quite different from what he had recommended.
  The Home Office agreed to look at this and to put it to the Inspector, without any word to any of the other authorities concerned. I assume that all this

  743
  has taken place and Buckinghamshire has made the approach, and the Home Office has felt that perhaps its representative said something misleading. Then, one would have expected one of two things to happen. The Home Office could either have written to the other authorities and said that Buckinghamshire had made this point, and said that it thought something misleading was said at the inquiry and the financial arrangements should be modified to help it a little. It could have said that it was thinking of putting this to Mr. Mars-Jones to see if there was anything in it and could have asked for comments.
  The second alternative was to go straight to Mr. Mars-Jones and to put the point that had been raised by Buckinghamshire, asking if it was a fact that he had been misled, and if so would he like to make further recommendations, to be discussed with the authorities affected. The Home Office did neither of these things. It wrote to Mr. Mars-Jones and put some words into his mouth, which he willingly and immediately accepted. He made his own recommendation, but he accepted the idea that there should be an interim scheme, and it was virtually adopted without giving any meaningful opportunities to the other authorities to say anything in opposition to the scheme.
  This was not the end of the process and this point has not been sufficiently stressed. Even the second report, as it has been described, of Mr. Mars-Jones still comprised recommendations to the Home Secretary. There was nothing to oblige him to adopt these. We have to consider what would have been a just scheme to implement at this stage.
  Mr. Speaker: Order. With all the goodwill in the world, I must ask the hon. Gentleman to speak for or against the Order. He cannot suggest an alternative, he cannot amend it.
  Mr. Luard: I am not suggesting any alternative. I am speaking against the Order, and I hope that will be clear in a moment or two. I would like to pursue my argument about the action of the Home Office at successive stages of this procedure. After a second recommendation by Mr. Mars-Jones had been
  744
  received, there was no obligation on the Home Office to accept this recommendation. It was the obligation of the Home Secretary to consider what was a just financial scheme. It is said that the interim arrangement was designed to soften the blow for Berkshire. When one is thinking of an interim scheme of this kind, there are other considerations that have to be taken into account.
  Several of us in the Chamber at the moment have recently had experience of another Thames Valley authority—the Thames Valley Water Board—where very similar considerations were involved. Here too a number of authorities were joining together and a number of them were contributing in different ways in the form of their previous resources. Here again, a special financial arrangement was made, which was by no means acceptable to all those affected. The principle that was accepted was, to my mind, a more rational and just one. Those authorities which had contributed most in the way of resources by their previous investment were to pay least. They had a specially favourable financial arrangement. This was very beneficial to Oxford; I do not deny it. Oxford had been extremely public-spirited.
  Mr. Speaker: Order. We cannot discuss the Thames Valley Water Board arrangements on this police Order.
  Mr. Luard: I proceed from that to the matter of contributions for a police authority. Here again, Oxford had probably been the most public-spirited regarding its previous investment in its police force. It is for this reason that this scheme will involve some reduction in the rate to be paid for police by Oxford. Berkshire is going to have to increase its rate, because it had previously neglected its police force. It had not been paying so much as other authorities and, therefore, it is now going to be obliged to pay that much more.
  If one is going to make an interim arrangement it would be possible to argue that Oxford should have benefited because Oxford police are men who were serving only in Oxford and they are now to be serving in other parts of the authority's area.

  745
  At each of these three stages it is arguable that an injustice of one kind or another has been done. The real point the House has to consider at the moment is not only whether there has been an injustice, but whether a decision has been reached in a right and reasonable way.
  Like other Members, I am not suggesting that the Order itself should not be proceeded with, or that the amalgamation of the police forces should not take place. It is vitally important that the question of the interim financial arrangement, which was arrived at in such an unusual and unsatisfactory way, should be reconsidered. It is for this reason that I support the Prayer of the hon. Member for Henley (Mr. Hay) and I very much hope that my hon. and learned Friend the Under-Secretary will agree to go to the Home Secretary and ask him to re-examine this aspect of the Order and to have detailed consultations with all those authorities which are to be affected so crucially by it.
  10.25 p.m.
  Mr. Ronald Bell: I do not often have the privilege of listening to and reading so many arguments which have been so wholly devoid of merit as the arguments which have been advanced in this debate against this Order.
  I suppose a sceptic might say that I say that because I represent a constituency in Buckinghamshire and that the Order, in so far as it is being prayed against now, is to the financial advantage of Buckinghamshire. It may be so. It may be that one's judgment is clouded. But I hope that I shall succeed in persuading the House that there is no substance in the arguments advanced in favour of the Prayer.
  My hon. Friend the Member for Henley (Mr. Hay), with whose judgment I so often agree on other points, said that this was not a matter where the financial advantage of Oxfordshire was a compelling force, but that he felt that there was a strong issue of principle here. However, it is the experience of us all that principles and economics get mixed up from time to time, and it is something of a coincidence that all hon. Members who support the Prayer represent the interests of authorities which would have
  746
  a financial gain if it were to succeed. Equally, it may be said that those of us who are against it are in the opposite position.
  May I correct the broad picture which the hon. Member for Oxford (Mr. Luard) put forward? He used some attractive phrases about money being taken out of the pockets of the ratepayers of Oxford and put into the pockets of the people of Buckinghamshire by these arrangements. However, Buckinghamshire itself does not want the amalgamation. The people of Buckinghamshire do not want the Order, and they do not want the financial arrangements. All of them are against their wishes.
  We in Buckinghamshire were very happy with our police force, and the financial arrangements, whether those originally formulated or those formulated in the Order, are greatly to the disadvantage of Buckinghamshire and, in some degree, to that of Berkshire. Not a mere £30,000 or £65,000, but hundreds of thousands of £s will be taken out of the pockets of the people of Buckinghamshire and transferred to the pockets of the people of Oxford, Reading and other such places.
  Mr. Luard: Will the hon. and learned Gentleman accept that, when I made that remark, I was talking about the effect of the interim arrangement on the people of Oxford, and not the scheme as a whole?
  Mr. Bell: That was a correction that I made, because the hon. Gentleman said that the effect of these arrangements was that. The only effect of the change in the scheme which is being prayed against is to reduce the profit being made by the City of Oxford, the County of Oxford and the Borough of Reading. They will still be left with a handsome profit, but I think that they are annoyed because, just as they were about to share out the swag, along came this Order and suddenly they find that there is not quite as much booty to share out among themselves as they had hoped.
  Mr. John Hay: Would my hon. and learned Friend bear in mind that, when he talks about swag, the County of Buckinghamshire will obtain a very much larger police force than it

  747
  has at present, as well as having a much higher rateable value per head of the population than any of the other authorities involved?
  Mr. Bell: Let me point out to my hon. Friend that the higher rateable value of Buckinghamshire is something which goes on quite independently of this Order. It is because the people of Buckinghamshire are more industrious and successful than those of Oxfordshire.
  Mr. Hay: Really!
  Mr. Bell: I have been sorely tempted to say what I think and have thought for years about the administration of the Oxfordshire police, but I will not be tempted.
  Everyone agrees about the broad shape of this scheme. It is a fairly predatory operation against the people of Buckinghamshire, but they say, "Be it so; the procedure is wrong". So we come to procedure and, here again, the broad picture can be outlined easily. There was an inquiry, which lasted six days. I use the word "inquiry" advisedly because it was an administrative inquiry. The Secretary of State would be advised by means of a report, and then he would make the Order. But it would be his Order, not the Order of the inquiry. This was not a tribunal; it was an inquiry. We are always having committees of inquiry these days. This was a one-man inquiry.
  During the course of the inquiry the two matters canvassed were, first, whether there should be the amalgamation and, secondly, the financial arrangements. Buckinghamshire was against the amalgamation and was contending for a population basis for the financing of the scheme. The Inspector found against Buckinghamshire on both those matters. He advised in favour of amalgamation and a rateable value basis for the contributions.
  In the progress of the proceedings the question of transitional arrangements was raised both in evidence and in argument. Attempts have been made to minimise that, but it was because the transitional arrangements were raised that Mr. Mars-Jones asked, in effect: What is the procedure here; will there be an appeal on the transitional arrangements; how does
  748
  it work? He addressed this question to counsel appearing for the Home Office who, at that time, did not know the answer, but said he would try to find out. As is known, on the last day of the inquiry he gave an answer to the effect that the Inspector need not bother about this matter, because it was something arranged afterwards by the Home Secretary. He said that the Home Secretary would not advise on the transitional scheme unless all the parties were agreed on it. The Inspector, having asked and been told that this was dealt with subsequently and otherwise, did not report on it.
  When the report came out and went to the Secretary of State, he, in the execution of his duty, drew up a draft scheme. The hon. Gentleman the Member for Oxford has referred to the sly conduct of the Buckinghamshire County Council in making private representations to the Secretary of State. I suggest that that is misconceived, because, when the draft scheme was sent to all the authorities concerned, they were asked to submit their observations on it. They were asked for their comments, so the County of Buckingham—and, I dare say, the others, too—sent a letter to the Home Secretary containing the comments for which it had been asked. There is nothing sly about that. It is the proper procedure. I do not see what else Buckinghamshire could have done, but say, as it did: "We do not like this bit of the scheme which deals with the financial arrangements, because there is no transitional period".
  The Home Office replied, be it remembered, "We are sorry, but we are not going to change that, because this matter was raised before the Inspector and he has not recommended a transitional scheme". In other words, the Home Office said, "We brush aside this objection of yours, because the Inspector considered it and did not recommend this".
  Buckinghamshire then said, "But this is quite wrong, because he was told by counsel for the Home Office in effect not to recommend on this point. We have, therefore, been greatly damaged if you will not consider our representations on a transitional scheme on the ground that the Inspector had evidence and argument about it before him and did not make a recommendation".

  749
  Buckinghamshire said that the Inspector was misled on this point by the answer that was given to him on the last day. I do not think there is any dispute about that, but the hon. Member for Oxford says, "What of it? If the Inspector was misled, may not everyone at the inquiry have been misled so that they lost the opportunity of making representations", but that is not so, because the answer by counsel for the Home Office was given at the end of the inquiry. The inquiry, with its examination and cross-examination, had taken place. The only person who was materially misled was Mr. Mars-Jones.
  On being told this, the Home Office did the only thing it could. It wrote to the Inspector and said, "Bucks says that in effect you were told by counsel for the Home Office not to recommend on this point because it was dealt with by another procedure". Mr. Mars-Jones replied, "That is true. I understood that I should not recommend on this, but, had I known that I could recommend, or should recommend, this is what I would have recommended", and then he set out the arrangement in the Order being prayed against.
  I can see no shadow of improprietory here. I ask myself where this illusion has come from, and I think I probably know the answer. It appears in a phrase in the speech of my hon. Friend the Member for Henley when he said:
  "…one is bound to say that although these were not judicial proceedings, the attitude shown by the Inspector was not exactly a judicial attitude."—[OFFICIAL REPORT, 18th March, 1968; Vol. 761, c. 190.]
  The reference is to the Inspector's reply to the Home Office letter. I invite the House to consider those words a little carefully:
  "One is bound to say that although these were not judicial proceedings, the attitude shown by the Inspector was not exactly a judicial attitude."
  There is an implication that although the proceedings were not judicial, nevertheless the principles and procedure governing them should have been judicial. Indeed, my hon. Friend took that view, because he went on to say that he knew what sort of reply he would have got if he had written to a High Court judge after an action in which he was not satisfied with the outcome, if he got any answer at all. That is right, because one
  750
  does not write to a High Court judge saying that one is not pleased with the result of an action, or to ask what he meant by this or that, because they were judicial proceedings. But these are not judicial proceedings, and I am glad to have the opportunity of speaking in this debate because I can say something that I have wanted to say for a long time, and that is that while I am happy to be a member of the legal profession, I think that lawyers talk a lot of humbug about this matter of administrative proceedings, usually prefaced by the word "quasi" or "semi". They are not quasi-judicial. They are not semi-judicial. They are not judicial at all.
  There are two kinds of tribunal. The first is an administrative tribunal which decides something. The classic example of this is the Lands Tribunal. This is not the High Court of Justice, nor any part of it, but a tribunal, and it decides something. The other kind of body is best not called a tribunal. It is an inquiry. The purpose of it is to report, and the responsibility rests fairly and squarely on a political officer of State who decides, acts, and proposed to Parliament, as here, and in the end Parliament decides.
  The frequent implications from some of my hon. and learned Friends that those proceedings should be described as quasi-judicial, that the Council on Tribunals, of all things, should go broody over them, is ridiculous. The whole purpose of the inquiry is to advise the Secretary of State by a report, because he cannot go down and snuffle around himself. He decides after someone reports. Then it is suggested that there is an impropriety in the Secretary of State writing to his man, who is paid to advise him, to ask whether he had thought about any additional point! This is the greatest humbug.
  My profession, of which I am very proud, has the fault that it always tries to interpret away discretions. Show them a discretion and they will establish rules for exercising it. If there is one good logical rule about discretions, it is that, if they are exercised according to rules. they do not exist.
  I am sorry about these general words, but I was provoked by my hon. Friend's remark:
  "…although these were not judicial proceedings, the attitude shown by the Inspector

  751
  was not exactly a judicial attitude."—[OFFICIAL REPORT, 18th March, 1968; Vol. 761, c. 190.]
  That is quite a gem in its way, because it puts in a nutshell that mental attitude—
  Mr. Hay: Would my hon. and learned Friend not agree that, whether it is right or wrong, the ordinary man in the street, seeing an inquiry held by a Queen's Counsel, with a number of other Queen's Counsel arrayed before him, with witnesses called to give detailed evidence and being subject to cross-examination, with lengthy and no doubt well-paid speeches by counsel at the end, would be tempted to think that these were quasi-judicial proceedings?
  Mr. Bell: Yes, which is why I welcomed the opportunity to say what I did. These illusions are quickly implanted. Whereas I forgive the man in the street for thinking that, I do not forgive my honourable colleagues at the Bar for the same mistake. We must take a firm line if every kind of inquiry is not to be "judicialised"—if I may coin a horrible word—so that their whole point disappears.
  My hon. Friend knows that the same thing can be said about licensing proceedings, which actually take place in a court, under an apparently judicial procedure, but are administrative: not only can the justices ignore the evidence completely, but they are often right to do so. It is important that we should keep our minds clear on this point. I say that on general principle, because in this particular case it is very simple. Bearing in mind that the material date was 1st April and that the Inspector had made up his mind anyway about transitional arrangements and that he would have recommended transitional arrangements of this kind if he had been asked to recommend, I cannot see what all the fuss and bother is about. I hope that the Under-Secretary will stand firm in a good cause, and not be put off by all the wool and splutter which has been put forward in this bad case.
  10.44 p.m.
  Mr. John Astor: I support my hon. Friend the Member for Henley (Mr. Hay). My hon. and learned Friend the Member for Buckinghamshire, South (Mr. Ronald Bell) was not quite right
  752
  that those supporting the Prayer were only those who represented the constituencies which would stand to lose by the present transitional arrangements. Berkshire, for example, would stand to gain. On Monday, the Under-Secretary relied a good deal on the evidence presented at the inquiry by the Berkshire representatives about the transitional arrangements. He sought to make out the case that this dispute was not between the Home Office and any of the local authorities by saying:
  "This is…a dispute between Buckinghamshire, and, possibly, Berkshire, on the one hand and the other constituent authorities on the Other."—[OFFICIAL REPORT, 18th March, 1968; Vol 761, c. 199.]
  I wish to make it clear that Berkshire accepted the original findings of the inquiry and, as far as I know, has never sought to protest about this or to be associated in any way with the representations which have been made by Buckinghamshire, which some hon. Members have suggested took place behind the scenes. There is certainly in this instance no question of a dispute between Berkshire and its neighbouring authorities.
  I support the hon. Member for Reading (Mr. John Lee) who referred particularly to the way in which the question of the police office there has been handled. The Home Office demanded that there should be 100 per cent. terminal compensation, which seems a big demand since less than one-quarter of the cost of purchasing and adapting the police station was borne by the Exchequer, and the police authority contributed nothing whatever towards it. I understand that the police are now proposing to use this station for an interim period rent-free, which seems to be adding insult to injury and I hope that the Home Office will reconsider this point, the circumstances of which were carefully and fully set out by the hon. Member for Reading earlier this week.
  A small point to which I must refer is the way in which the Home Office has handled the position concerning the Newbury police station and court house. On 21st December the Home Office submitted what it claimed was the final draft. This would have had the effect of transferring the police station to the police authority and leaving the court house in the possession of the county council. It is interesting to note that in the letter

  753
  accompanying the draft scheme, it was written:
  "I hope that no changes will be necessary since the draft reflects the various comments made at earlier stages and the points made in recent correspondence about property."
  Obviously, therefore, this decision had been taken after taking into account all the representations which had been made, and this decision was acceptable to the Berkshire County Council.
  Not much later, on 1st February, a letter was received from the Home Office informing the county council that the Department had changed its mind and that the police station and court house were to be transferred to the ownership of the police authority. At no stage was there any consultation with the county council concerning this change of policy. The county council then wrote several times objecting—on 7th and 16th February and again on 1st March—and while a reply was not received until 14th March, the implication of that reply was that the change of mind had occurred because the local authorities could not agree among themselves, a suggestion entirely without foundation.
  I refer to this matter only because it seems to reflect the way in which the Home Office has handled this whole affair. I am sure that the answer is that the Department has tried to rush through this amalgamation much too speedily and against the advice of the local authorities concerned. Having accepted the inquiry, the local authorities are anxious to make a success of the new amalgamated police authority, but unfortunately the attitude of the Home Office has rather militated against this. I trust, therefore, that the Minister will go some way towards meeting the points which have been made.
  10.50 p.m.
  Sir David Renton: I hope that I may have leave of the House to speak again, bearing in mind that I had spoken for only 30 seconds when Mr. Speaker was good enough to adjourn the debate on Monday night.
  I am reluctant to intervene in a dispute which even divides some of my hon. Friends, but no one is more jealous than I am of the good name of the Home Office and I feel that, for reasons
  754
  which had been given at some length in this debate, there is a question of principle at stake as to the handling of this matter. I refer to the procedure—or rather, lack of procedure—which occurred after the inquiry had been held. I think that what was done was quite contrary to the spirit of the Tribunals and Inquiries Act, which all parties supported, and contrary to the practice which has grown up as a result of it.
  I do not propose to argue the merits of the scheme. I am not concerned or interested in them, but I am interested in seeing that police amalgamations take place in a way which gives satisfaction to all concerned and do not give rise to feelings of injustice. My hon. Friend the Member for Wokingham (Mr. van Straubenzee) said that this scheme, which I want to see come into existence as soon as possible, will have an unhappy start. Whether that is so or not, I think we should be sufficiently alerted by what has happened on this occasion to make sure that it is put right if possible so that those who enter into negotiation on future schemes will not have their confidence destroyed.
  The only point on which there has been an attack against this Order is on the transitional relief which will go to Buckinghamshire. Having studied the matter, there was in my opinion obviously a misunderstanding at the Mars-Jones inquiry. Although he was invited at the inquiry to do so, Mr. Mars-Jones made no recommendation about transitional relief in his Report. The Home Office, quite rightly in my opinion, tried to clear up that misunderstanding, but it did so in the wrong way.
  I assure my hon. and learned Friend the Member for Buckinghamshire, South (Mr. Ronald Bell) that in my opinion the Buckinghamshire authority was absolutely right and entitled to raise the matter, but once they had raised it, I think that the Home Office should have consulted all the authorities and asked Mr. Mars-Jones to reconsider the transitional relief afresh by reopening the inquiry on that point, and should not have referred the further representations made only by Buckinghamshire to Mr. Mars-Jones without the knowledge of the others. He having made a further recommendation to the Home Office, again without the knowledge of the others, the

  755
  Home Office then accepted that recommendation without any further consultation with the other authorities whose ratepayers were concerned to a very considerable financial extent.
  It is true that on 17th January a letter was sent to the other authorities by the Home Office telling them of the Home Office decision on the further recommendation and asking for their replies by 1st February. As my hon. Friend the Member for Henley (Mr. Hay) pointed out, this was the first that the other authorities knew of the matter. They were at that time finalising their estimates for the coming financial year and doing so on the basis of Mr. Mars-Jones's original recommendations which they had been led by the Home Office to believe had been accepted. Naturally, they could not and did not, reply as quickly as they were asked, on 1st February. They replied about 10 days later. It is rather interesting that the very day after Oxfordshire replied to the Home Office protesting, the Home Office replied saying, "objection overruled". I did not know that the Home Office could act so quickly!
  That was not consultation with all concerned; it was an imposition of a decision made in favour of one authority behind the backs of the others who were given no chance of making representations to the person by whom the decision was made. That is the wrong procedure. My hon. Friend the Member for Wycombe (Mr. John Hall), who made a spirited defence of Buckinghamshire, which, as I said, is not to blame, said in effect that justice was done, judging by the figures. Even on the figures, I do not know whether that was right. I am not that inspector and I do not intend to usurp his functions. But to those authorities in Oxfordshire. Oxford City and Reading, and possibly at first sight in Berkshire even, although my hon. Friend the Member for Newbury (Mr. Astor) has very fairly put that matter right, it cannot have appeared that justice was done.
  Hon. Members on both sides of the House have suggested a reasonable and sensible way out of the difficulty. If I were in the hon. and learned Gentleman's position I should jump at it, instead of leaving the matter in its present unsatisfactory state. Let him ask for
  756
  the leave of the House to speak again, which I am sure would be as freely granted to him as it has been to me, and tell us that if the Prayer is withdrawn, or even if it is not, he will cause an inquiry to be reopened on the narrow point of transitional relief, and that the Order meanwhile should take effect. That is a good way out of the obvious difficulty. In that way he will show himself to be open-minded, which I believe he wants to be. The honour of the Home Office will be upheld, and justice can both be done and appear to be done. If he does not do that one wonders what the Council on Tribunals may have to say on the matter.
  Other amalgamations are to take place, and it is essential that the authorities concerned should feel confident that there will be fair and open dealing. For that reason above all others, and quite apart from the circumstances surrounding the Order, I hope that the hon. and learned Gentleman will respond to the suggestion made.
  10.58 p.m.
  The Under-Secretary of State for the Home Department (Mr. Dick Taverne): With the leave of the House, perhaps I could comment on some of the points made.
  First, on the merits of the transitional provisions, it is quite clear that those who are adversely affected by them think that they are bad and that those who are favourably affected think that they are good. I explained earlier that the Home Office is neutral in this. Whether or not it was right to soften the blow to Buckinghamshire was not a matter on which we should have wanted to hold any strong opinions either way. It was eminently a matter on which it was sensible to take the Inspector's advice. He said that it was right to soften the blow, and we are happy to accept his advice.
  The main dispute, therefore, is not really on the merits but on the procedure. My hon. Friend the Member for Oxford (Mr. Luard) has once again raised matters already put forward. He said that other authorities had no opportunities of expressing their view and that the Home Office counsel might have misled others. He said that if the possibility had been raised that an interim order might be made one would have

  757
  expected the others to comment. That is the whole case made against the Home Office letter to Mr. Mars-Jones and acceptance of his recommendation. It all depends, as do the remarks of the right hon. and learned Member for Huntingdonshire (Sir D. Renton), on the suggestion that an opportunity should have been given to others to comment. But they had had their opportunity to do so. The hon. and learned Member for Buckinghamshire, South (Mr. Ronald Bell) is absolutely right. The matter had been raised. They had not used their opportunity to comment, and the only person who was misled was the only person who still came into it at that stage—the Inspector.
  It was said by my hon. Friend the Member for Oxford that the Home Office witness himself had stated that it would not normally recommend transitional provisions of this kind. If one looks at the evidence given by this witness when he was cross-examined by counsel for Berkshire after referring to the benefit which would accrue to Oxford County Council and Oxfordshire—and, after all, the effect of the transitional provisions is not that they do not give benefit to Oxfordshire but that they give it more slowly—one reads that he was asked specifically if it was felt that by adopting this method it would be unfair to Buckinghamshire.
  "Q. It would be possible to safeguard people, would it not, by transitional arrangements over two or three years?
  A. That would be possible, yes."
  There was a further question:
  "Q. For example, by doing it on a 50 per cent. adjusted rate product and 50 per cent. of the 1966 to 1967 expenditure?
  A. That would be possible. Any combination within reason is possible."
  So again and again all the arguments against this Order fall down in this respect—that the matter was argued out, that it was considered closed, that the argument was ended, and that the only person misled and affected by the misleading advice was the Inspector himself.
  Mr. Luard: Is it not a fact that either the same witness or another also said that financial arrangements of this kind were normally made by agreement between the parties?
  Mr. Taverne: It was particularly in relation to the capital arrangements that reference to agreement was made. There was argument to some extent. The point is that the whole thing was argued out and it was eminently a question for the Inspector as to whether he thought it right and fair that such transitional arrangements should be made.
  Mr. Hay: The hon. and learned Gentleman has referred to the evidence of Mr. Goringe, the Home Office financial witness. He should look at page 44 of the transcript. Mr. Goringe was asked:
  "…would you anticipate that if the learned Inspector recommended to the Home Secretary to make this order and he did, such provisions would be inserted in the final order—the transitional financial provisions?".
  Mr. Goringe replied:
  "They would certainly be put into the final Order if there were agreement of all the partis, but if all the parties did not agree then one of them might want to implement the provisions of the 1964 Act as to appeal."
  That was the Home Office witness, not counsel.
  Mr. Taverne: A number of provisions—the Schedule 4 provisions—were referred to. I do not think that one can quote a particular argument of that kind. In the course of the cross-examination of the Home Office witness, a number of different points were put to him. But no one can argue that the question of transitional arrangements was not raised. It was clearly raised. It was raised in the final speech and if hon. Members are to say that something raised in the final speech by one of the parties and that one of the specific recommendations asked for has not been discussed, they are living in cloud-cuckoo-land.
  Mr. John Lee rose—
  Mr. Taverne: My hon. Friend has had his say. I want to come to the arrangements. It is suggested that Mr. Mars-Jones should be asked to hear all the parties—not merely one of them—or that someone else should be asked to hear them. In the first place, Mr. Mars-Jones has already heard all the parties. In the second place, my right hon. Friend has no power to set up an arbitrator to arbitrate further on the issue of transitional relief. An arbitration without a statutory basis could only be established if all

  759
  the parties requested that it should be. And it is clear that, in this case, Buckinghamshire would not join in a request for a voluntary arbitration.
  There is no point in asking Mr. Mars-Jones to reopen the inquiry to hear further evidence and make a fresh recommendation. He has already heard the evidence and we have no power to arrange a rehearing. If another arbitrator were to be established and if this were done on the basis of a compulsory inquiry, he would clearly be embarrassed at having to rehear something already heard by Mr. Mars-Jones.
  Sir D. Renton: If the hon. and learned Gentleman says that Mr. Mars-Jones has no power to reopen the inquiry now, as has been suggested, will he describe how he had power to consider the matter further at the request of the Home Office and to make a further recommendation?
  Mr. Taverne: That is quite simple. The question at issue before was not whether we were going to have a new inquiry with new witnesses and new arguments but whether, having heard the witnesses and the arguments, he was misled by the Home Office. That would not be the subject matter of a new inquiry. A new inquiry would be non-statutory. The only issue at stake before was whether the proper statutory inquiry was one in which he was misled. There is no question of a new inquiry.
  The right hon. and learned Gentleman the Member for Huntingdonshire is, I know, keen to uphold the honour of the Home Office. There is no question about the honour of the Home Office. He has said that this would be something for the Council on Tribunals. I should be happy if they were to look at it if they felt that it was within their jurisdiction. But as to the justice of the inquiry and the recommendation and asking Mr. Mars-Jones whether he had been misled I have no regrets of any kind. It seems, as the hon. and learned Member for Buckinghamshire, South said, the procedure followed was perfectly proper.
  11.7 p.m.
  Mr. John Hay: I am not only grievously disappointed by the reply of the Under-Secretary, but I am frankly astonished. I should have thought that
  760
  after a debate which has gone on much longer than is normal on a Prayer and has extended over two days with a number of speeches, all fairly argued and reasoned, the hon. and learned Member would have said that this was a case for the Secretary of State to look at again. If the hon. and learned Member and his Department are as neutral as he says I would have thought that he would have seen whether there was some way in which he could remove the sense of grievance that these responsible authorities clearly feel over what has been done in his name.
  I am astonished because I cannot see how the hon. and learned Member can continue to cling to the fiction—it is nothing more than a fiction—that what was done was legitimate, reasonable and honourable. I have never in all the time I have been in the House—which is not five minutes—known a case where a Government Department has behaved in quite the way the Home Office has here.
  I regret it because it is a Department of State which has an enormous amount of respect from the people. If this is done, as I said when I opened the debate on Monday night, in what may seem to be a wrangle between local authorities over money, the authority of the Department and its standing in the eyes of the people will fall.
  The hon. and learned Member should look at this again. There were a number of occasions when it would have been open to the Home Office to say to the local authorities that they were consulting Mr. Mars-Jones. I was told today by a representative of Oxfordshire County Council who attended several conferences of the authorities involved that, during the conferences between the time Mr. Mars-Jones' report was published and the time it was suddenly announced that Mr. Mars-Jones had been consulted, not one word was said about the question of transitional relief being considered.
  As has been said, the sensible thing to do now would be to allow the local authorities to get together to see if they can agree a scheme that has some element of transitional relief in it. What is wrong is for the Home Office to claim that it is too late in the day and that nothing whatever can be done to correct this manifest injustice.

  761
  It is true that the time when the Order comes into force is only a couple of days away, some time next week. It is true that it would be a complication of life, but a change even at this late stage in the transitional arrangements would not be impossible. The Order would come into force as it stands. The Secretary of State has power, under the Police Acts, to make an amending Order if he so wishes. He could easily convene a conference of local authorities, under his aegis or the aegis of the hon. and learned Gentleman, or a senior official and the thing could be hammered out and a fresh scheme for transitional relief could be decided upon.
  That could be incorporated in a new Order. That is a course which seems too simple to the hon. and learned Gentleman, because, he says, we are short of time, the whole thing has happened too late in the day and we have not got the opportunity of debating this. That will not do. We gave a certain undertaking to Mr. Speaker about how we would close the debate and for that reason I will not ask my hon. and right hon. Friends to divide the House. I ask the leave of the House to withdraw the Motion, but I must say that it leaves a very bad taste in the mouth.
  Motion, by leave, withdrawn.

  ROYAL ORDNANCE FACTORIES (WAGES)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Ernest G. Perry.]
  11.12 p.m.
  Mr. George H. Perry: I wish to refer to the wage situation in the Royal Ordnance Factories, with special reference to the wage situation in the Nottingham and Chilwell area. It may he the view of hon. Members that it is hardly the time to raise the vexed question of wages and rates of pay, but I am certain that my constituents employed in the Government factories in the Nottingham area will not concur with that view—very much the reverse, in view of the Chancellor's Budget Statement two days ago, which will mean that the purchasing power of the content of the wage packets of the men concerned, which are already well below the national
  762
  average, will be adversely affected to a considerable degree.
  In order to provide proof of this and to substantiate my case I have a bundle of wage packets from the Chilwell workshops which have been in my possession only a few hours. I propose to quote from eight pay packets of skilled craftsmen or engineering inspectors. In the first the take-home pay of a chief engineering inspector is £11 12s. 2d., after stoppages. The second is that of a fitter, £13 17s. 5d, another on 11th March, £13 14s. 9d. A fitter with 29 years service received, last November, £12 17s. 6d. Another fitter in November last year had a take-home pay of £14 13s. 6d, A mechanical examiner took home £14 13s. ld. last July. An electrical examiner took home £14 2s. 11d. this January. Another fitter had a net pay packet of £13 16s. 10d. in March.
  My hon. Friends will be aware that there are 13 Ordnance factories, of which only eight are engineering factories. The Nottingham factory is mainly concerned with the production of guns, Leeds with tanks, Enfield with small arms, Blackburn with fuses, Birtley and R ad-way Green with ammunition. Patricroft with shells. Cardiff comes under the Ministry of Technology. The rest are concerned with explosive or fillings.
  The industrial strength of the Nottingham R.O.F. consists of 400 skilled crafts- men, 200 semi-skilled and 300 labourers.
  Wages at the R.O.F. can be said to compare favourably with the smaller type of engineering factory in the Nottingham district, but are well below the wages of men with similar skills at Raleigh's, Ericssons, Bentleys, Trent Motors, Metal Box and Rolls-Royce, to name but a few of the larger firms in the Nottingham and East Midlands area. One of the main reasons for this anomaly is the wages structure which arises from the Fair Wages Resolution of October, 1946, which was a reaffirmation of another Resolution of 1910. This was further reported in Report No. 18 of the National Board for Prices and Incomes entitled "Pay of Industrial Civil Servants", presented to Parliament in June, 1966, Cmnd. 3034.
  The fair wages resolution calls for their pay to be in line with pay for similar industries in the district. The

  763
  men complain that this wage structure was forced upon them against their will, and that they fought against its acceptance all the way along the line. The main reason for their objection was that the skilled pieceworkers, although on a full rate of £16 10s., did not receive any increase in their pay packets when the new structure was introduced, and that under this system they will never again receive any increase unless the scheme is altered, which means that their wages are completely frozen and outside the concessionary 3½ per cent. which the Government seems prepared to set as a ceiling for wage increases during the coming year, and untouched by the 5 per cent. demanded by the T.U.C.
  All of this, added up, places these men in an industrial no-man's land or occupational vacuum so far as wages are concerned. The complaint of the men employed at Chilwell is that, whereas their hourly rate for carrying out complete overhauls to modern tanks is only 8s. 3d., the rate at R.O.F. Leeds is between £25 and £30 a week. Skilled craftsmen employed in the manufacture of these tanks at Alvis Ltd., Coventry, are paid as much as 18s. 6d. per hour, and at Daimlers and Coventry Gears the rate is 14s. 10d. an hour. It is my view that the disparity between these rates and those of the Nottingham men is far too great.
  My hon. Friend will no doubt be aware that the 508 skilled men at Chilwell have been in dispute with the management since 6th March this year over the anomalies which exist, and have placed before the management a six-point declaration, or ultimatum, consisting to a great degree of non-co-operation unless proper remuneration is forthcoming in the near future.
  So it is fairly obvious that these men who are employed on armament work are not prepared to accept, in the words of the immortal bard, that they should suffer
  "The slings and arrows of outrageous fortune,"
  but have decided that they should
  "take arms against a sea of troubles, And by opposing end them."
  764
  At a meeting held 10 days ago at the Chilwell workshops between the management, district union officials and shop stewards, the reference to a productivity agreement was welcomed, but the trade union side expressed their misgivings regarding information they had received from national level to the effect that some considerable time would elapse before such an agreement would affect, conversely, the take-home pay of their members.
  Mr. Deputy Speaker, it almost goes without saying that the skilled craftsmen and many others employed at the factories and workshops referred to are up in arms at the fact that their take-home pay can be as low as £13 10s. for a 40-hour week in the face of the present cost of living, which is unlikely to remain stable in the coming 12 months. It is obvious that morale in this section is very low indeed despite the fact that Major-General Shields, Commandant of the Technical Group of the R.E.M.E., told them on 8th February this year that theirs was the finest workshop of its kind in Britain, and second to none in Europe.
  Therefore, I implore my hon. Friend to act with the greatest possible speed to ensure that these men enjoy the full fruits of their labours, and do not languish in a mire of industrial discontent, which has been the situation in the Nottingham factories for far too long.
  11.20 p.m.
  The Under-Secretary of State for Defence for the Army (Mr. James Boyden): I am grateful to my hon. Friend the Member for Nottingham, South (Mr. George H. Perry) for raising the question of the wages position in the Royal Ordnance Factories and R.E.M.E. Workshops because it gives me an opportunity to say something about the new pay structure which has recently been introduced not only in the Army Department but throughout the Industrial Civil Service. It is no exaggeration to describe the recent changes as a new departure in the field of pay, and for this reason I welcome this chance to discuss them.
  I have visited Chilwell, the Royal Ordnance Factory, Nottingham, and the Royal Ordnance Factory, Leeds, and I should like to take this opportunity to say how impressed I was with the intelligent and enthusiastic management of all

  765
  three establishments and with the loyalty and industry of the workers. I met the trade union representatives at each place, and I discussed with them fully the matters that they raised with me. Their attitude was a highly responsible one, and their relations with the managements of the establishments seemed to me to be very good.
  We do all that we can to foster good relations between the managements and the workers throughout the Army Department. There are well established arrangements in the Royal Ordnance Factories and in our other establishments where the official and trade union sides can get together for consultation and negotiation. In the Royal Ordnance Factories this is done at factory level through joint factory committees and joint production committees on which local workers and managements meet regularly. In other Army Department establishments consultation takes place in industrial Whitley committees. At national level the Department regularly meets the headquarters representatives of the trade unions at the Engineering Trades Joint Council and at the Army Department Industrial Council, which I chair. I can say from my own experience that these arrangements have worked extremely well over the years, and I have no doubt that they will continue to provide management and workers with the right kind of forum for discussing points of mutual concern.
  As my hon. Friend said, in October, 1965, the Government asked the National Board for Prices and Incomes to look into the system of determining rates of wages in the Industrial Civil Service in order to establish whether the existing arrangements could be regarded as being in line with the White Paper on Prices and Incomes of April, 1965, and to report accordingly. As the Board pointed out when it eventually issued its Report No. 18 in June, 1966, this was the first occasion on which the Industrial Civil Service had been examined in this way by an independent body.
  Its Report contained some fairly far reaching proposals, and I think that it would be helpful if I outlined briefly its three main recommendations and conclusions as they affected pay. First, it concluded that the Government service is not one homogeneous industry but a
  766
  number of different and often diverse industries and that, therefore, the old arrangement of a unified pay system with common rates of pay for each grade, irrespective of the establishments in which they were employed, should be replaced by separate pay structures for each group of establishments in the same "industry". Second, it recommended that the traditional six-monthly pay reviews should be discontinued, and that future pay negotiations should take place not more frequently than annually. Finally, the Board proposed that the Government should consider the desirability of allowing local management, within the limits of the financial budget, local discretion to decide numbers and grades, and that any gains arising from the better use of labour should be appropriately shared between workers and the Government as the employers.
  As my hon. Friend knows, the Government accepted the Board's Report and are now in the process of implementing it. In particular, we entered into negotiations with the trade unions concerned on the proposals for a new group pay structure. I am glad to say that we were able to reach agreement with them, and the new structure was introduced throughout the Government service in July, 1967. Let me say at once that from the point of view of the Industrial Civil Service as a whole this was a good pay agreement and meant that most people got a bigger pay packet. For the Industrial Civil Service as a whole it cost the Government £11 million.
  Now I want to go into a little detail on the structure of the new pay system, for this is fundamental to the situation which my hon. Friend has been describing. The new structure consists of ten different pay groups covering both craftsmen and non-craftsmen. For craftsmen there is a two-tier structure comprising Craftsmen Grade I and Craftsmen Grade II, and both grades are paid at flat rates. For non-craft grades there is a pay banding system with up to 20 five-shilling bands in each pay group.
  The effect of these new arrangements is that both craft and non-craft grades in each group or, as it were, industry receive rates of pay related to those found in the corresponding commercial undertakings outside the Government service.

  767
  For example Group "A" is the Engineering Production, Repair and Maintenance group, and this covers Engineering and Filling Royal Ordnance Factories and the larger R.E.M.E. workshops. An industrial civil servant employed at one of these establishments receives the rate of pay for the group. His colleague who works in Group "H", which is the Store Holding Group and covers most of the industrial employees in our storage establishments like the Central Ordnance Depot at Chilwell for example, will get a different rate of pay. Equally the man, whether he is skilled or unskilled, working in Group "E", which is the Research and Development Group, will get a different rate of pay again.
  I can best illustrate the new structure by quoting some actual examples of time-work rates of pay for certain grades for a 40-hour week. A Craftsman Grade I, for example, gets £18 14s. a week in Group "A". In Group "H" he gets £18 8s. a week and in Group "E" he gets £19 19s. The rate for a craftsman Grade II in Group "A" is £16 10s. a week, in Group "H" £16 8s. a week and in Group "E" £17 8s. An unskilled labourer in Band 0 of the 20 five-shilling bands for non-craftsmen gets £12 a week in both Groups "A" and "H". In Group "E" he gets £12 7s.
  I have quoted these examples in some detail because they illustrate very clearly that the new pay structure recognises not only that individual workers achieve differing levels of skill and performance of their work but that in the commercial world different industries have different wage structures. This, then, is the general picture of the industrial pay situation in the Army Department and in the Civil Service as a whole.
  I now turn specifically to the R.E.M.E. workshop at Chilwell and the Royal Ordnance Factory at Nottingham. Both establishments are in Group "A"—the Engineering Production, Repair and Maintenance Group—and for this reason timeworkers on comparable work all receive the same rate of pay. But the calculation of this rate was based on the average of the rates payable in a wide range of engineering production undertakings up and down the country. It took into account as well the differing con
  768
  ditions of service like annual leave, sick leave and pension arrangements. I am sure my hon. Friend will see that in the light of this broadly-based method of calculating rates of pay for Group "A" there is little to be gained by making local comparisons with particular firms or, indeed, with average rates of pay in a particular region. This is true even where the outside concerns are doing work which is more or less similar to what is being done in the local Army Department Establishments. Before my hon. Friend tells me that equal work should receive equal pay, let me remind him that our new rates of pay were introduced only after detailed negotiations and agreement with the trade unions concerned.
  However, I accept—and I am sure the unions would agree—that the conversion from the old arrangements to the new pay structure has given rise to anomalies and some of these have still to be resolved in consultation with the unions. But I think it is unlikely they would have any fault to find in the rates themselves since they and we negotiated them so recently.
  So far I have been talking about the time workers at the Royal Ordnance Factory at Nottingham and the R.E.M.E. workshops at Chilwell. It is, however, the Army Department's policy to introduce in the Engineering and Filling Royal Ordnance Factories payment by results schemes wherever practicable. This is, of course, subject to certain conditions. For example, output must be capable of being increased by additional effort, and the effort must, in turn, be capable of being measured in terms of output. Again, for piecework there must be sufficient repetitive work to provide the data for establishing piecework rates. These conditions are reasonable and sensible and do not inhibit the widespread use of payment by results schemes. In the nine Royal Ordnance Factories in Group "A" the proportion of our industrial staff employed on one form or another of payment by results is as high as 70 per cent. At Nottingham the proportion is even higher: there it is 75 per cent. At the Royal Ordnance factory at Leeds, another engineering factory, it is 68 per cent.
  These payment by results schemes, which are, of course, agreed with the unions, produce good rates of weekly

  769
  earnings and are popular with our employees. The average weekly earnings of a skilled pieceworker at the Royal Ordnance Factory, Nottingham, for example, are £22 12s. a week, and at Leeds they are as high as £26 8s. We have no difficulty in recruiting people at these two factories.
  The position at the R.E.M.E. workshops at Chilwell is, however, rather different, and I think this is the nub of my hon. Friend's difficulty. The work done there is not straightforward production work which can easily be measured, as it can at Nottingham, and this has meant that we have not been able to devise a suitable payment by results scheme. As a result, workers at Chilwell, apart from earning overtime, have not been able to supplement their basic timework earnings; and since there is no need for a great deal of overtime at the moment, average earnings at the workshops are not much higher than the flat rates for craftsmen and non-craftsmen in Group A establishments. However, we have recently made a special study to see whether we might not be able to improve the output of the workshops by means of a productivity agreement which would conform to the criteria and conditions laid down by the Prices and Incomes Board in its Report No. 36.
  This study is now complete and we are examining the working party's report. We expect to be able to start discussions between the management and the unions very soon. We have been fairly smart with this. I have been reminded that a similar scheme introduced at Fawley took two and a half years to arrive at fruition, so we have not done badly. It is, however, important to bear in mind that we are breaking new ground and have no previous experience of productivity agreements in the Service Departments. Much will depend on the good will of the management, trades unions and the workers themselves during the next few months of negotiations if we are to get the scheme off the ground as soon as possible and achieve its main objective of improving productivity. I hope that my hon. Friend will assist us in trying to do this. It will be for the benefit of the workpeople and the Government and, I hope, for the benefit of my hon. Friend.
  770
  The financial benefits of the productivity agreement will, of course, be shared between the management and the workers, and I am sure that everybody will join me in hoping that the agreement will not only increase earnings at the workshops but go a long way towards maintaining good industrial relations there. I shall be watching with particular interest how the discussions between the management and the unions progress, because their success or failure will not only affect Chilwell but could have wider significance for the introduction of productivity agreements elsewhere in the Department.
  I come now to the question of differentials. Differentials between skilled and non-skilled grades in the Government service have, as a whole, widened under the new arrangements and not narrowed. For example, before July, 1967, a craftsman Grade II in Group "A" on basic rates of pay—that is, without any supplements—got 34s. a week more than a driver in band 4, and 52s. more than an unskilled labourer. Since last July these differentials have increased to 61s. and 90s. Other groups would provide similar evidence of widening differentials.
  It is, however, true that within the craft field differentials have narrowed following the introduction of the two flat rates of pay to replace the old craft supplement scheme with its complicated system of rewards. But insistence on two flat rates for craftsmen was one of the main conditions of the trade unions' acceptance of the new structure.
  The pay arrangements for the Industrial Civil Service are fairly complex, but I have done my best to set them out as clearly as possible. I believe that the new structure is a great improvement on the old arrangements and offers considerable benefits to management and employees alike. We are now in the process of taking the opportunities presented by this new departure in the pay field to further the interests of all who are involved in establishments like the Royal Ordnance factory at Nottingham and the R.E.M.E. workshops at Chilwell; and, given the continuation of the good relations which now exist between the management and the workers and their representatives, I believe we shall succeed in making the most of these opportunities.

  771
  I hope that tonight's brief debate has given the opportunity of clearing the air with regard to Chilwell in particular, and that we shall be able to look forward fairly shortly to good negotiations with
  772
  the trade unions and satisfactory arrangements for the workers.
  Question put and agreed to.
  Adjourned accordingly at twenty-five minutes to Twelve o'clock.

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  Demonstrations (Metropolitan Area)
  Demonstrations (Metropolitan Area)
  London and Counties Tenants' Federation (Immigration Report)
  London and Counties Tenants' Federation (Immigration Report)
  Cruelty to Children
  Cruelty to Children
  Prison Earnings
  Prison Earnings
  Prison Workshops (Government Contracts)
  Prison Workshops (Government Contracts)
TELEPHONE SERVICE
  Equipment
  Equipment
  Telephone Directories, Bristol
  Telephone Directories, Bristol
POST OFFICE
  Postal Deliveries
  Postal Deliveries
  10 Downing Street (Code Address)
  10 Downing Street (Code Address)
WALES
  Bridgend Road Junction (Traffic Signals)
  Bridgend Road Junction (Traffic Signals)
  Economic Plan
  Economic Plan
  BRITISH EMBASSIES (EXPENDITURE)
  BRITISH EMBASSIES (EXPENDITURE)
  FOREIGN GOVERNMENTS (RECOGNITION)
  FOREIGN GOVERNMENTS (RECOGNITION)
MINISTRY OF DEFENCE
  Royal United Services Institute
  Royal United Services Institute
  Meteorological Office (Salaries)
  Meteorological Office (Salaries)
AGRICULTURE, FISHERIES AND FOOD
  Foot-and-Mouth Disease
  Foot-and-Mouth Disease
  GROSVENOR SQUARE (DEMONSTRATION)
  GROSVENOR SQUARE (DEMONSTRATION)
  SOUTH AFRICA
  SOUTH AFRICA
  EUROPEAN SECURITY CONFERENCE
  EUROPEAN SECURITY CONFERENCE
  RAILWAY STATIONS (HIGH DENSITY BUILDING)
  RAILWAY STATIONS (HIGH DENSITY BUILDING)
  MERGERS (REDUNDANCY)
  MERGERS (REDUNDANCY)
  RHODESIA
  RHODESIA
  EUROPEAN ECONOMIC COMMUNITY
  EUROPEAN ECONOMIC COMMUNITY
  ROYAL COMMISSIONS
  ROYAL COMMISSIONS
MINISTRY OF HEALTH
  Prescription Charges
  Prescription Charges
  Disabled (Social Survey)
  Disabled (Social Survey)
HOUSING
  Council Houses, Somerset (Sale)
  Council Houses, Somerset (Sale)
SCOTLAND
  Housing (Completions)
  Housing (Completions)
  Teacher Training (Places)
  Teacher Training (Places)
  Roads (Expenditure)
  Roads (Expenditure)
TECHNOLOGY
  Marine Science and Technology (Wales)
  Marine Science and Technology (Wales)
BOARD OF TRADE
  Airport Policy (Severnside)
  Airport Policy (Severnside)
  Company Law Reform (Jenkins Committee)
  Company Law Reform (Jenkins Committee)
ROADS
  Accidents (Durham and Gateshead)
  Accidents (Durham and Gateshead)
  A38 (Taunton-Wellington)
  A38 (Taunton-Wellington)
  Road Maintenance (Somerset)
  Road Maintenance (Somerset)
NATIONAL FINANCE
  Income Tax (Returns to Agents)
  Income Tax (Returns to Agents)
  Government Contracts (Distribution)
  Government Contracts (Distribution)
  Disposable Personal Incomes
  Disposable Personal Incomes

Preamble
The House met at three of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Bristol.

ARGENTINE/UNITED KINGDOM TRADE
VISCOUNT STONEHAVEN: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they can state the balance of trade figures between the United Kingdom and the Argentine for the last five years for which figures are available.]
THE MINISTER OF STATE, BOARD OF TRADE (LORD BROWN): My Lords, the value of imports c.i.f. from, and exports and re-exports f.o.b. to, the Argentine Republic are given in Volume 1 of the Annual Statements of Trade of the United Kingdom for the years 1963 to 1966 and, for 1967, in Table IV of the December Overseas Trade Accounts. The difference between these figures is not, however, a good measure of the visible trade balance because, for instance, of the differences in the basis of valuation.
VISCOUNT STONEHAVEN: My Lords, the reason for asking this Question was the hope that I should get an authoritative Answer from Her Majesty's Government, because of the very difficulty which the noble Lord has just pointed out—the difficulty of interpreting these figures. I do not know whether the noble Lord can give any further help.
LORD BROWN: My Lords, I can help the noble Lord a little further, I think. Over the five years to the end of 1967 the average United Kingdom balance of trade deficit with the Argentine was £50 million per annum, although the figure in 1967 was approximately £47 million, but
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if what I might call the f.o.b.-c.i.f. factor, which I hope is understood, is introduced, it will reduce that balance by approximately £10 million per annum; this is a rather approximate figure. The invisibles, however, have also to be taken into account. Here I am in difficulties because the calculation is highly involved and not necessarily very accurate, and in addition it is built up on the basis of some figures which are supplied to the Board of Trade on a confidential basis. All I can say is that the figure would make a substantial further adjustment to that figure of £50 million.
VISCOUNT STONEHAVEN: My Lords, I thank the noble Lord for his answer, which of course is very involved and a difficult one on which to make a snap decision. Should I be right in assuming that there is certainly no substantial balance at the end of it in our favour? I would not go further than that, but ask whether the noble Lord would agree it is the case that there is no substantial balance in our favour.
LORD BROWN: My Lords, I think the fact of the matter is that there is a balance certainly in favour of the Argentine. Whether one would apply the adjective "substantial" or not depends on what one means by the word, but it is considerable.
VISCOUNT STONEHAVEN: My Lords, I thank the noble Lord for that. That being the case, I wonder whether he would agree with me that if one takes the somewhat imponderable answer, which I shall have to fathom out later, and then considers the compensation which we have paid for foot-and-mouth disease—£26 million or whatever it is—and also the fatstock guarantee payments, the idea that we are getting cheap meat from the Argentine is a bit of a myth?
LORD BROWN: My Lords, that question goes rather beyond the ambit of the original Question and I should prefer that a further Question were put down, in which case no doubt my noble friend the Minister of Agriculture would be able to answer it.
VISCOUNT STONEHAVEN: I thank the noble Lord.

GREY JUNGLE FOWL PLUMAGE
3.10 p.m.
LORD HURCOMB: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they are now prepared to prohibit entirely the importation of the plumage of the grey jungle fowl, of which the Government of India has prohibited the export in view of the rarity of this bird in its only natural habitat.]
LORD BROWN: My Lords, I understand that the export of plumage of the grey jungle fowl from India is subject to an export control order of 1962 which allows exports on merits, though recent applications for export licences have all been rejected. Imports into the United Kingdom, which are used in the manufacture of fishing flies, are strictly controlled by quota, and in 1967 licences were issued for only 3,600 skins, compared with 4,250 skins in 1966. No licences have so far been issued for 1968. Her Majesty's Government have received no request from the Government of India to prohibit imports entirely, but such a request has been made by the British and Indian National Sections of the International Council for Bird Preservation, and the interested Departments of Her Majesty's Government are considering the implications of a prohibition.
LORD HURCOMB: My Lords, may I, in thanking the noble Lord for his Answer, ask him whether Her Majesty's Government do not accept as a matter of principle that where a foreign country tries to protect its rare fauna by prohibiting export it is incumbent on this country to back up those efforts by prohibiting the import and not undermine its effort by allowing what is an illegal import?
LORD BROWN: My Lords, the attitude of the Board of Trade on this matter is, first, that they should not ban imports into this country if by doing so they succeed merely in re-routing those exports to other countries and so put our manufacturers at a disadvantage. Secondly, it is not clear as yet—inquiries are going on—whether statements to the effect that this bird reproduces itself only
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in India are correct. Thirdly, statements are alleged to have been made that the birds are plentiful and freely shot of for food in India. Investigations are proceeding to discover the truth or otherwise of these various statements, and until we are satisfied we are not prepared to take action.
LORD MITCHISON: My Lords, after what happened to the dodo do not the Government consider that there is a case for preserving rare birds which are found only in small quantities in peculiar places?
LORD BROWN: My Lords, if we, were satisfied that this bird is in the same category as the dodo we should no doubt be prepared to take the action requested of us; but we are not as yet so satisfied.
LORD HURCOMB: My Lords, may I ask the noble Lord this question? Granted that the bird is not in imminent danger of extinction, it has become so rare in India that the Indian authorities and the Indian Government are not allowing its export. In those circumstances does he not agree that we should back up their efforts and prohibit its import? Further, may I ask him on what ornithological or scientific advice his Department is proceeding in regard to this continued assumption that the bird is not rare and that it extends beyond peninsular India? May I suggest to him that there are ample authorities in London, in the Zoological Gardens, the Natural History Museum and elsewhere, to give him authoritative information on that point?
Finally, may I suggest that if these feathers are required to make salmon flies he might ask his honourable friend in the Board of Trade to dispense with this luxurious and quite unnecessary import, and persuade some of our own poultry rearers to breed the birds in this country?
LORD BROWN: My Lords, with respect to the noble Lord, the questions he has asked are based on the assumption that the statements he has made are undeniably the facts of the case. We have to make sure that this is so. The fact is that India has prohibited the export of these birds, and statements have been made that India is the only source of these birds. It is therefore the concern of the Government, if we are importing

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these birds, to know where they come from if India is the only source. The answer to the noble Lord's second question is that the Board of Trade is normally advised on matters of this kind by the British section of the International Council for Bird Preservation; but in this particular matter we are in an unfortunate position because the applicants for this order are the International Council for Bird Preservation. We, therefore, in justice have to turn to other sources for advice which we are investigating now.
LORD DERWENT: My Lords, I do not want to prolong the matter, but did I understand the noble Lord to say that when this bird was on the same footing as the dodo the Government would take steps to prevent its import?
LORD BROWN: My Lords, I stand corrected. When the bird is in the same situation as the dodo no doubt was about 1850, then we will take these steps.
BARONESS SUMMERSKILL: My Lords, can my noble friend say how salmon were caught in this country before the discovery of the grey jungle fowl in Southern India?
LORD HURCOMB: My Lords, without pressing the matter too far, may I ask the noble Lord whether he or his Department are under the impression that the bird is not limited in its range to peninsular India? If he is under that impression, why, may I ask, does he not go to the authoritative sources of scientific information in this country which are so easily available to him?
LORD BROWN: My Lords, we are desperately trying to establish the facts in this matter, and we shall continue to do so. When we are sure of the facts we will consider the action to be taken.
LORD HURCOMB: My Lords, I shall take up no more of your Lordships' time, but there are many ornithologists in this country who have authoritative knowledge on the point.
THE MINISTER OF STATE FOR COMMONWEALTH AFFAIRS (LORD SHEPHERD): My Lords, I am sure that birds are a subject in which your Lordships have a great deal of interest. The noble Lord has asked a fair number of
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supplementaries. I am conscious that we have a great deal of business in front of us. Perhaps we could deal with this interesting subject on another occasion.
LORD STRANGE: My Lords, arising out of the replies of the noble Lord, may I say that the guinea fowl—
SEVERAL NOBLE LORDS: Order, order!
LORD SHEPHERD: My Lords, the purpose of Question Time is to seek information, not to suggest or to give points of view.

"COMMONWEALTH TODAY" MAGAZINE
3.17 p.m.
THE EARL OF SELKIRK: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government whether they have any proposals for continuing the publication, Commonwealth Today.]
LORD SHEPHERD: My Lords, Her Majesty's Government have decided to discontinue publication of the magazine Commonwealth Today. In reaching this decision they have been guided by two considerations. First, the Plowden Report on Overseas Representational Services recommended a withdrawal from information work of a generalised character, and a picture magazine about the Commonwealth clearly falls within this category. Secondly, while concerned to promote the idea of the Commonwealth, Her Majesty's Government have been increasingly aware that it was becoming inappropriate that the British Government should continue to assume a responsibility for such promotion in other countries of the Commonwealth. They are therefore discussing with the Commonwealth Secretary-General the desirability of the kind of information work about the Commonwealth as represented by Commonwealth Today being continued as a collective Commonwealth responsibility.
THE EARL OF SELKIRK: My Lords, may I thank the noble Lord and ask him whether Her Majesty's Government are prepared to make funds available

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to the Secretary-General in order to provide him with some form of publicity department?
LORD SHEPHERD: My Lords, that is a matter which we shall consider once the Secretary-General has carried out consultations and an approach to the Commonwealth countries—a joint effort. If there is general support, then naturally we would consider this matter with the greatest of sympathy.
THE EARL OF SELKIRK: My Lords, I thank the noble Lord.

VIETNAM: U THANT'S PEACE PROPOSALS
3.19 p.m.
LORD ROWLEY: 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 to what extent they support the United Nations Secretary-General in his proposal that there should be a cessation of United States bombing in North Vietnam to be followed by a peace conference in Geneva.]
THE MINISTER OF STATE FOR FOREIGN AFFAIRS (LORD CHALFONT): My Lords, the Government has made quite clear its belief that President Johnson's offer at San Antonio provides a fair and reasonable basis for the cessation of the bombing of North Vietnam: and that preliminary talks should be followed, at the right time, by a peace conference.
LORD ROWLEY: My Lords, is it not a fact that in March of last year the United Nations Secretary-General proposed that there should be a cease-fire, and that this proposal was accepted by the United States of America and rejected by the Government of North Vietnam? May I take it that Her Majesty's Government will co-operate fully with the endeavours of the Secretary-General to achieve a general cease-fire as a prelude to a settlement by negotiation of this terrible conflict?
LORD CHALFONT: Yes, my Lords. It is, of course, true, as my noble friend knows, that the Secretary-General made
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this proposal last March for a total military standstill in Vietnam as a first step towards negotiating a peaceful settlement. We welcomed those proposals at the time—regrettably, they were rejected by Hanoi—and I can assure my noble friend that we shall naturally welcome any suggestion that will bring about a total cease fire. Hanoi have it in their power to advance this by accepting the San Antonio proposals. In this way a cessation of the bombing would be brought about; and if they proposed any further reduction in military activity, if they proposed a total cease-fire, then I am sure the United States would respond. We all know that if Hanoi showed the slightest sign through some unquestionable channels that they were prepared to come to the conference table, the bombing would cease. Hanoi knows this perfectly well.
THE EARL OF DUNDEE: My Lords, is it not the case, as I think the noble Lord, Lord Rowley, implied in his supplementary question, that the United States has always accepted every proposal for peace discussions and that they have always been unfortunately rejected by the Communists?
LORD CHALFONT: Yes, my Lords, that is substantially true. It is true, also, that the Secretary-General of the United Nations believes that an unconditional cessation of the bombing would lead to peace talks. Unfortunately, at the moment we have no evidence, other then U Thant's obviously sincere convictions on this point. But if Hanoi is sincere in wanting talks, it should not be difficult for them to convey this clearly and directly to the Americans. So far they have not done so.
LORD SEGAL: My Lords, is my noble friend absolutely convinced that Hanoi is a completely free agent in being able to open these negotiations? If not, is not the continued bombing in North Vietnam not only morally wrong but utterly inexcusable?
LORD CHALFONT: My Lords, in the case of the Vietnam war I am not completely convinced about anything. But if the Government in Hanoi was really sincere in a wish to have talks with a view to bringing this war to an end, I am sure that, whatever may be their

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freedom of action, there is no reason why they should not be able to convey their wishes and their feelings about this to the United States Government. One thing I am convinced about is that the moment this feeling was conveyed the bombing would stop, and we should be on the road to negotiation.
LORD SEGAL: My Lords, while thanking my noble friend for that answer—and I do not wish unduly to press the point—is he absolutely convinced that if Hanoi were prepared to open negotiations they would receive the support, not the opposition, both of China and of Soviet Russia?
LORD CHALFONT: No, my Lords, I am not convinced of that, and it would be wrong of me to say that I was convinced of it. But those who ask the United States to take action in this affair, either by stopping the bombing or by other unilateral military action, should. I think, be prepared to accept that the United States are most reluctant to do this without some sign from Hanoi, with or without the agreement of whoever they may have to agree with, that negotiations towards a legitimate and effective settlement in the area would follow. I think this is a reasonable attitude by the United States Government.
LORD BROCKWAY: My Lords, may I ask my noble friend whether it is not the case that the United Nations Secretary-General has stated that if the bombing of the North were stopped, then, in his view, Hanoi would be prepared to enter into negotiations, not within weeks but even within days? Is not the difficulty that the United States are asking that any infiltration from the North to the South should cease, and could not this be solved by the proposal that at such talks following the cessation of bombing of the North the proposal for a total cease-fire should be placed first upon the agenda?
LORD CHALFONT: My Lords, as I said earlier, it is true that the Secretary-General of the United Nations believes that if there were to be an unconditional halt to the bombing there would rapidly—within perhaps a matter of weeks—be peace talks. I repeat that there is no evidence other than that. The United States has made many a proposal and
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many an initiative on this subject, the most notable of which is the San Antonio formula which would include the cessation of bombing and a halt in the intensification of military effort in the South. There has been no response to this by the Hanoi Government. I do not think it unreasonable that the Government of the United States should expect a response from the Government concerned, whatever may be the sincere convictions of the Secretary-General of the United Nations.
LORD GLADWYN: My Lords, is it not true that support for the Secretary-General's proposal is rapidly gaining ground in the United States?
LORD CHALFONT: My Lords, it may be that the views of the Secretary-General are gaining support in some quarters in the United States. I do not have any clear or incontrovertible evidence of this. But it seems to me that the real answer here is that if the Government of Hanoi are really prepared to come to the negotiating table upon the cessation of bombing, they have only to say so. They have clear lines of communication which will get through to the United States Government in a matter of hours. They know this. They have only to make the sign and we all know, and they know, that the bombing will stop at once.
LORD POPPLEWELL: My Lords, is it not a fact that each time the United States has stopped bombing Hanoi has used the interlude to build up forces? At the same time, could my noble friend say on what grounds U Thant is building up this hope? Surely he is a very responsible official and will not just be "playing a hunch" in regard to this matter. Therefore, could my noble friend assure us that Her Majesty's Government are prepared to do everything possible to cause America to listen to U Thant's proposal, naturally assuming that U Thant will give some information about the basis for his opinion.
LORD CHALFONT: My Lords, it is of course true that in the past unilateral action by the United States has been followed by a period in which the buildup in the South has continued, and it is this that makes the United States, I think, somewhat cynical about the undoubted convictions of the Secretary-General of the United Nations. I can,

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however, assure my noble friend that we shall do all we can to help the Secretary-General of the United Nations in his efforts to bring about a peaceful settlement in Vietnam. As my noble friend will know, we did put him in touch with the North Vietnamese representative in Paris when he was last here in an attempt to advance his cause. We shall continue to co-operate with him to the best of our ability and hope that he will be able to help in bringing about an effective and just settlement in Vietnam.
LORD ROWLEY: My Lords, would my noble friend make it clear that the policy of the United States Government is not confined merely to an offer to cease bombing with a view to a conference, but that they are quite ready to agree to a general cease-fire as a prelude to a conference?
LORD CHALFONT: Yes, my Lords. This is the position of the United States Government and, as I say, all we need now in order to push this forward is some kind of clear response by Hanoi to this very unequivocal American offer.

TECHNOLOGY
LORD BESWICK: My Lords, at a convenient moment after 3.30 p.m. my noble friend the Leader of the House will be making a Statement on Technology.

CIVIL EVIDENCE BILL [H.L.]
3.29 p.m.
THE LORD CHANCELLOR (LORD GARDINER): My Lords, I beg to move that this Bill be now read a third time. If your Lordships give this Bill a Third Reading, I shall then have to propose certain Amendments, but I should like to make one or two observations about the Bill at this stage. I have already thanked the Law Reform Committee for their work in the production of this Bill, and I should like, in particular, to thank the noble and learned Lord, Lord Pearson, the Chairman of the Committee, for the help which he has given the House during the different stages of this Bill.
If he will not think it an impertinence on my part I should also like to thank the noble Viscount, Lord Colville of Culross, who has, I know, done an enor-
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mous amount of work on this Bill which has led to a number of improvements in it, and particularly on those clauses of the Bill dealing with computer evidence. In that context, I should like to thank, too, I.C.T., Limited, a computer company, and the 3M Company, who are large users of computers, for the technical assistance which they have freely given to my Department to enable us to make sure that proper provision for computer evidence was being made in the Bill. On the Report stage we had an interesting discussion on Clauses 2 and 4, and I have written to the noble Viscount to explain to him why, on full consideration, the Government are unable to accept the Amendments which were then proposed.
Finally, I refer to a point which was raised both by the noble and learned Lord, Lord Pearson, and by the noble Viscount as to whether the discretion given to the court in Clauses 2 and 4 could not be, exercised by a master inter-locutorily by rules providing for that. I have looked into that point. The -e are at least two cases in which the Court of Appeal, in relation to a similar discretion exercisable now under the Evidence Act, have said that in their view in most cases it is far more preferable that the decision should be made at an interlocutory stage so that before the trial both parties will know whether a particular statement is going to be admitted in evidence or not. There seems to be no reason why rules should not make that possible in relation to this Bill. My Lords, I beg to move.
Moved, That the Bill be now read 3a. —(The Lord Chancellor.)
VISCOUNT COLVILLE OF CULROSS: My Lords, I am grateful to the noble and learned Lord the Lord Chancellor both for his kind remarks about myself and also for the general remarks that he has made. I, too, am aware that I have been greatly helped by advisers outside this House. Indeed, I do not see how one can deal with such a subject without that sort of advice, and those who help in this way are doing a very valuable service, I think, not only to the House but to those who are going to have to operate the Act later.
I want to make only one point on what the noble and learned Lord has said. In relation to Clauses 2 and 4 he did indeed

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write to me most helpfully. In those cases, perhaps the rare sort, that I was talking about, and perhaps in others which are less rare, too, where it is essential that the parties should know what sort of evidence they are going to be allowed to introduce in court, the question whether or not this can be dealt with by the master is really of great importance. The noble and learned Lord, Lord Pearson, agreed about this when he spoke on Report stage. It will now be a matter for experiment, and, I hope, for the courage and daring of the masters to take this particular matter into their hands and make some solid decisions upon it. The whole of this Bill is experimental, and it will work only with a great deal of flexibility in the Rules Committee, with the proper exercise of the judges' discretion and the proper exercise of the masters' discretion. But the sort of thing the noble and learned Lord has just said about what the masters may do under existing decisions will, I think, be of immense value in getting matters straight before the case ever comes on for hearing at all.
On Question, Bill read 3a.
Clause 9 [Admissibility of certain hearsay evidence formerly admissible at common law]:
THE LORD CHANCELLOR THE LORD CHANCELLOR moved to leave out subsection (3) and to insert instead:
"(3) In any civil proceedings a statement which tends to establish reputation or family tradition with respect to any matter and which, if this Act had not been passed, would have been admissible in evidence by virtue of any rule of law mentioned in subsection (4) below—

(a) shall be admissible in evidence by virtue of this paragraph in so far as it is not capable of being rendered admissible under section 2 or 4 of this Act; and

(b) if given in evidence under this Part of this Act (whether by virtue of paragraph (a) above or otherwise) shall by virtue of this paragraph be admissible as evidence of the matter reputed or handed down;

and, without prejudice to paragraph (b) above, reputation shall for the purposes of this Part of this Act be treated as a fact and not as a statement or multiplicity of statements dealing with the matter reputed."
The noble and learned Lord said: My Lords. I hope that it may be convenient to the House to discuss Amendments Nos. 2, 3 and 4 together with Amendment No.
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1, for they are consequential upon it. These linked Amendments meet to some extent the criticisms of Clause 9 made on Report stage by the noble Viscount, Lord Colville of Culross, by providing that, first, "reputation" is for the purposes of Part I of the Bill to be treated as fact and not as hearsay; and, secondly, that any out-of-court statement as to the existence of reputation or family tradition, which is made admissible under Part I, is to be admissible as evidence of the fact reputed or handed down.
The new subsection (3), substituted by the first Amendment, preserves the principle embodied in Clause 9(3) as drafted; namely, that a distinction is to be drawn between such out-of-court statements which fall within Clauses 2 or 4 as being "first-hand hearsay" or "records" and those which, being "second-hand hearsay", would not qualify under those provisions but would, apart from the Bill, be admissible at Common Law under one or other of the "Clause 9(4) Rules" and are made admissible under paragraph (a) of the new subsection (3). Paragraph (b) provides that, whether admitted under paragraph (a) or under any other provision in Part I, such statements are admissible as evidence of the facts reputed or handed down.
The concluding part of the new subsection (3) provides that reputation is to be treated for the purpose of Part I as fact, not hearsay. There is a conflict among the authorities as to whether reputation, where admissible at all, is admitted under an exception to the hearsay rule or is original evidence. This conflict is considered by Cross on Evidence, Third Edition, page 457, whose conclusion is that where reputation is admitted as evidence of a reputed fact it is so admitted as an exception to the hearsay rule. The noble Viscount drew attention to this conflict on Report stage and observed that it could lead to uncertainty as to the applicability of Part I, and therefore of the procedural safeguards, to evidence of reputation, whether given directly from the witness box or by proving an out-of-court statement. Such uncertainty is undesirable. Accordingly, the new subsection (3) resolves the conflict by providing that, for the purposes of Part I, reputation is fact and not a statement or statements of the matters reputed.
Clause 9(3), as proposed to be amended, does not, and is not intended to, alter the law as to the circumstances in which reputation or family tradition, once proved, may be used to establish a reputed or traditional fact. It does, however, alter the law governing the way in which the existence of the reputation or tradition may be proved. I could expand on that with a substantial number of examples, but I do not think I need trouble your Lordships with them, at least at this stage.
The Amendments do not adopt the noble Viscount's suggestion, embodied in the Amendments he moved on Report, that the existing Common Law rules should be preserved as they stand in parallel with the Bill. He argued that these rules had worked well and that the distinctions introduced by Clause 9(3) would complicate the law unnecessarily. For the reasons which I then ventured to give in reply, the noble Viscount's proposal would have made the law even more complicated, while the Bill simplifies it considerably. Under the Bill, the party seeking to prove an out-of-court statement in a pedigree case, and so on—the others are mainly public rights cases—has only to ask himself these questions: first, "Am I putting my witness in the box to prove an out-of-court statement of a relevant fact (including reputation) made by X of X's own knowledge?". If so, the evidence is admissible subject to notice. And secondly, "Am I putting my witness in the box to prove an out-of-court statement about reputation, family tradition, etc., made by X otherwise than of X's own knowledge?". If so, the evidence is admissible only if it would have been admissible at Common Law, but no notice is required. My Lords, as I have said, the second, third and fourth Amendments are consequential. I beg to move.
Amendment moved—
Page 10, line 14, leave out subsection (3) and insert the said new subsection.—(The Lord Chancellor.)
VISCOUNT COLVILLE OF CULROSS: My Lords, I hope the House will accept these four Amendments, because I, for one, consider that they make a great improvement to the Bill. It is quite true that they do not meet the point I
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made on Report—at any rate, the first point I made—but they do pick up something that I said, I think in reply to the noble and learned Lord the Lord Chancellor, and it is plain that that particular matter, which has never had to be clarified before, certainly ought to be made plain for the purposes of this Bill, because otherwise it would, I think, have caused some confusion until it was settled.
I do not think that the questions that the advocate is going to have to ask are really quite as simple as the ones the noble and learned Lord put, because, although that is the beginning of it, he has still to go back to the Common Law, and the Common Law is difficult enough, in all conscience. I am quite prepared to believe the noble and learned Lord when he says that what I was suggesting would have been more complicated than what is now in the Bill. On the basis that the whole of this measure is really an experiment to see whether we have it right—with, perhaps, the possibility that the noble and learned Lord suggested, that in due course we shall have no rules of evidence at all—I would certainly recommend the House to accept these Amendments to Clause 9.
On Question, Amendment agreed to.
THE LORD CHANCELLOR: My Lords, this Amendment is consequential upon Amendment No. 1. I beg to move.
Amendment moved—
Page 10, line 28, after ("reputation") insert ("or family tradition").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: My Lords, the same observations apply here as to the last Amendment. I beg to move.
Amendment moved—
Page 10, line 31, at end insert ("or family tradition").—(The Lord Chancellor.)
On Question, Amendment agreed to.
TILE LORD CHANCELLOR: My Lords, in the case of this Amendment also the same observations apply. I beg to move.
Amendment moved—
Page 10, line 37, leave out (" (3) ") and insert ("(3)(a)").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 10 [Interpretation of Part I, and application to arbitrations, etc.]:
THE LORD CHANCELLOR: My Lords, this Amendment amends the definition of "document" in Clause 10(1) by substituting in paragraph (c) "other data (not being visual images)" for "other non-visual data" The Amendment thus meets the point made by the noble Viscount, Lord Colville, in Committee that Clause 10(1) as drafted might fail to cover a microfilm on which were embodied visible symbols which require further interpretation before becoming intelligible.
The noble Viscount based his proposals on the technique of electron beam recording, which, he said, produced on the microfilm a series of symbols which could not be described as images. I have been informed by experts on computers that this technique does in fact produce readable letters and figures directly on to a microfilm and that therefore it is covered by Clause 10(1), since the microfilm would fall within paragraph (d). Nevertheless, Lord Colville's criticism of Clause 10(1) is well-founded, because it is by no means clear that "non-visual data" would cover data which are visible though unintelligible as they stand—such as the marks on a punched card. This could be the form of a print-out (which I think is the correct expression) which is nothing but a card with a large number of holes by which information is coded.
Moreover, the technique of microfilm recording is unlikely to stand still. Accordingly, the Amendment changes the wording of paragraph (c) so that it covers
"any disc, tape, sound track or other device in which sounds or other data (not being visual images) are embodied so as to be capable of being reproduced therefrom".
Visual images will still be covered by paragraph (d). I beg to move.
Amendment moved—
Page 11, line 7, leave out ("non-visual data") and insert ("data (not being visual images)").—(The Lord Chancellor.)
VISCOUNT COLVILLE OF CULROSS: My Lords, again I am extremely grateful to the noble and learned Lord for meeting this point. I do not think that I was ever so rash as to say what I thought an electron beam recording did; I sug-
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gested what I thought it might do. The fact that I personally was wrong does not matter in the least. The noble and learned Lord has taken the point, and also the fact that there may be other devices now or in the future which would need to be covered. I am sure that his Amendment does this and I am grateful for it.
On Question, Amendment agreed to.
THE LORD CHANCELLOR: My Lords, this Amendment and Nos. 7, 8, 9 and 10 can, I think, be discussed together. They are linked drafting Amendments and are intended to make Clause 10(1) more readily intelligible and to improve its structure. Their effect is to divide subsection (1) into two separate subsections: the first will include the definitions of "document", "film", and "statement"; the second will consist solely of provisions construing references to a copy of a document. I beg to move.
Amendment moved—
Page 11, line 14, at end insert—
("Film' includes a microfilm;
'statement' includes any representation of fact, whether made in words or otherwise.").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: My Lords, I have already spoken to this Amendment. I beg to move.
Amendment moved—
Page 11, line 15, leave out ("and") and insert ("( ) In this Part of this Act").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: My Lords, the same observations apply to this Amendment as to the preceding. I beg to move.
Amendment moved—
Page 11, line 17, leave out ("this definition") and insert ("the definition of 'document' in the foregoing subsection").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: My Lord, to this Amendment also similar observations apply. I beg to move.
Amendment moved—
Page 11, line 20, leave out ("this") and insert ("that").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: My Lords, I beg to move Amendment No. 10 to which, again, the same observations apply.
Amendment moved —
Page 11, leave out lines 31 to 33.—(The Lord Chancellor.)
On Question, Amendment agreed to.
Bill passed, and sent to the Commons.

AGRICULTURE (MISCELLANEOUS PROVISIONS) BILL [H.L.]
3.47 p.m.
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR SCOTLAND (LORD HUGHES): My Lords, I beg to move that the House do now resolve itself again into Committee on this Bill.
Moved, That the House do now resolve itself again into Committee.—(Lord Hughes.)
On Question, Motion agreed to.
House in Committee, accordingly.
[The EARL OF LISTOWEL in the Chair.]
Clause 11 [Provisions supplementary to s. 9 in Scotland.]:
LORD HUGHES: Amendments Nos. 10, 11, 12, 13, 14, 15 and 19 are incidental to the new Schedule in Amendment No. 39. Perhaps the Committee will agree that these Amendments may be taken formally, as was the case with similar Amendments relating to England.
THE CHAIRMAN OF COMMITTEES: May I ask the noble Lord whether he would care to move Amendments Nos. 10 to 15 of Clause 11 en bloc?
LORD HUGHES: With the permission of the Committee I should be delighted to do so. I beg to move Amendments Nos. 10 to 15 en bloc.
Amendments moved—
Page 9, line 3, leave out ("states") and insert ("contains a statement")
Page 9, line 15, leave out ("states") and insert ("contains a statement")
Page 10, line 43, leave out ("it is stated in the notice") and insert ("the notice contains a statement")
Page 11, line 9, at end insert—
("( ) The provisions of Schedule (Transitional provisions relating to payments a under s. 9 in Scotland) to this Act (which contains transitional provisions for certain cases) shall have effect for the purposes of this section in its application to Scotland".)
Page 11, line 17, at end insert ("and")
Page 11, line 22, leave out paragraph (d). —(Lord Hughes.)
On Question, Amendments agreed to.
Clause 11, as amended, agreed to.
THE CHAIRMAN OF COMMITTEES: Clauses 12 to 17 have already been agreed to, and I shall therefore call Amendment No. 17A, to Clause 18.
Clause 18:
Termination in case of near relatives of deceased tenant. 1958 c. 71
18.—(1) Section 6(3) of the Agriculture Act 1958 shall not apply to a notice to qui given to a tenant who has acquired right to the lease of an agricultural holding—

(a) by virtue of section 16 of thy: Succession (Scotland) Act 1964, or

(b) as a legatee by virtue of section 20 of the principal Scottish Act.

where he is a near relative of the deceased tenant from whom he has acquired right to that lease; and accordingly section 25(1) of the principal Scottish Act shall, subject to the provisions of this section, apply to such a notice.
(2) Notwithstanding section 26(1) of the principal Scottish Act (which provides for the Scottish Land Court consenting to the operation of a notice to quit in certain circumstances), where the said section 6(3) would apart from the provisions of this section apply to the notice, the Scottish Land Court shall consent under the said section 25(1) to the operation of a notice to quit given to such a near relative as is mentioned in the foregoing subsection—
(a) if they are satisfied that the near relative has neither sufficient training in agriculture nor sufficient experience in the farming of land to enable him to farm the holding to which the notice relates with reasonable efficiency, and if it is stated in the notice that it is given by reason of the matter aforesaid, or
(7) In this section, "near relative" in relation to a deceased tenant of an agricultural holding means a surviving spouse, son or daughter, or adopted son or daughter, of that tenant.
(8) In the last foregoing subsection, the reference to an adopted son or daughter of a deceased tenant shall be construed as a reference to a son or daughter adopted by him (whether alone or jointly with any other person) in pursuance of an adoption order within the meaning of section 23(5) of the Succession (Scotland) Act 1964.
THE DUKE OF ATHOLL THE DUKE OF ATHOLL moved, in subsection (2), to leave out paragraph (a) and to insert instead:
"(a) if the near relative can not satisfy them that he has sufficient training in agriculture, sufficient experience in the type of farming suitable for the holding to which the notice relates and adequate financial resources for the efficient farming of the said holding and if it is stated in the notice that it is given by reason of any of the matters aforesaid, or ".
The noble Duke said: As I think we are only too well aware, Part III of this Bill was inserted in another place in the Committee stage, and the particular provision which I seek to alter, paragraph (a) of Clause 18(2), was inserted on Report stage in another place. I think it is fair to say that the position since 1958 up to now has been that when a tenant has died, at the end of the lease the Landlord could serve on his successor an incontestable notice to quit, which had to be upheld by the Land Court.
The object of Clauses 18, 19 and 20 is to allow a near relative to succeed to the tenancy, even if a landlord wishes to serve such a notice to quit, unless of course a tenant cannot fulfil one of the two provisions in Clause 18(2). My Amendment is designed to turn the first of these provisions around. Under Clause 18(2)(a) a landlord, if he wishes to serve a notice successfully on a tenant, has to show that the tenant has not had sufficient experience in agriculture or has not had sufficient training. The object of my Amendment is to make it necessary for the tenant to show that he has had sufficient training and experience.
One improvement my Amendment makes is that the tenant has to have sufficient experience in the right type of agriculture. I think this a very important point. I should not be happy, for instance, if I had a tenant whose sole experience in agriculture had been in connection with asparagus—farming in Norfolk. I cannot see that this would give a man the sort of training he would need for marginal upland farming. Therefore I think the type of farming as well as the actual experience should be taken into consideration.
The third thing this Amendment does is to provide that the tenant must have
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Sufficient financial resources to be able to farm the holding properly. I think this extremely important. We all know the way death duties can decimate an estate, particularly a fairly small estate where all the capital may probalbly be already in the farm. With the amount of death duties that the successor has to find, the farm may well not be farmed as efficiently and properly as one would like. In the interests of sound farming I think it essential that some financial limit should be put into this subsection, because I am sure that many heirs will try to continue farming the farms of their parents or relatives without having sufficient capital to do so, and that would be disastrous for the standard of farming in Scotland. After all it is an advantage to be able to inherit a tenancy and we want to make sure that, although it is possible for them to have this advantage, it is used in the best possible way.
I think that my Amendment has three advantages. First, it is easier to prove a positive than a negative, and it is easier for the tenant to show that he has had sufficent experience and training in farming than for the landlord to show that he has not. I might add that this seems to me only fair, since the tenant is gaining a great deal from this clause. Secondly, I think that the type of farming of which he has had experience should bear some relation to the sort of farming he is going to pursue on the holding he has inherited. Thirdly, it is a good thing that he should show he is financially able to start farming such a holding. I beg to move.
Amendment moved—
Page 16, line 23, leave out paragraph (a) and insert the said new paragraph.—(The Duke of Atholl.)
LORD HUGHES: I bee to move that the House do now resume for the purpose of hearing a Statement from the Leader of the House.
Moved, That the House do now resume.—(Lord Hughes.)
On Question, Motion agreed to, and House resumed accordingly.

THE COMPUTER INDUSTRY
3.55 p.m.
THE LORD PRIVY SEAL (LORD SHACKLETON): My Lords, with permission, I should like to make a Statement on the computer industry which is being made in another place by my right honourable friend the Minister of Technology. The Statement is as follows:
"I am pleased to be able to inform the House that with the backing of the Government the commercial and scientific computer businesses of I.C.T. and English Electric Computers are to be brought together into one company to be called International Computers Limited—'I.C.L.'. I.C.L. will be by far the largest company outside the United States of America specialising in commercial and scientific computers. Plessey, a major manufacturer of telecommunications equipment, will participate in the new group and will also form a joint development company with I.C.L. to study and develop the convergence between computers and communications.
"In pursuing our objective of a strong, independent British computer industry, and recognising I.C.L.'s need for heavy expenditure on research and development and for securing a strong financial position, the Government propose, subject to the approval of Parliament, to participate in the financing of the new company's operations to the extent of £17 million over a period of five years. Of this total amount the Ministry of Technology have agreed to provide £13½ million over the next four years as a grant towards I.C.L.'s research and development expenditure. The remaining £3½million is to be subscribed for ordinary shares of £1 each which will be issued to the Government at par. Two shillings per share will be payable on issue and the balance in 1972.
"The current market value of these shares substantially exceeds the amount to be subscribed for them. These terms have been designed to make a high proportion of the Government's contribution available as support of the research and development programme chargeable against revenue, while giving the Government a substantial participation in the future pros—
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perity of the company which this programme is designed to achieve.
"I have in mind making use of the powers for which the Industrial Expansion Bill makes provision subject to the enactment of the Bill and the necessary Affirmative Resolution. As the result of these arrangements the Government will hold initially 10·5 per cent. of the ordinary shares and the other shares will be held 53·5 per cent. by the former I.C.T. shareholders, 18 per cent. by English Electric, 18 per cent. by Plessey. It will be the policy of I.C.L. to continue to manufacture, market and service the present I.C.T. 1900 and the English Electric System 4 ranges of computers with enhancements. It will also sell and service the Elliott 4100 range.
"The know—how and experience of I.C.T. and English Electric computers will be pooled to develop for the 1970s a new range of computer systems as competitive as any available in the world markets at that time. The new range will be designed to enable both the 1900 series and System 4 users to transfer their work to it without difficulty. In the light of the Government's intention to place orders for large computer systems, I.C.L.s research and development programme will include the development of such a system to meet the expected demand at home and overseas.
"The Government will have a director on the board of the new company, but do not intend to intervene in the day-to-day management. To safeguard the public interest, the Government and the company will enter into an agreement, the text of which, when completed, I will make available to the House. There will be a revision of the existing arrangements between the National Research Development Corporation and I.C.T. which will bring forward the repayment of the money advanced by the National Research Development Corporation.
"My right honourable friend the President of the Board of Trade has indicated that he does not intend to refer the proposed arrangements to the Monopolies Commission. Neither English Electric nor Plessey will enjoy a preferential position in the supply

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of components to International Computers Limited, which will seek its supplies from the most competitive sources."
THE EARL OF DUNDEE: My Lords, I am sure we shall all be delighted to hear that at long last the Government are stirring on this matter. This is one of the subjects on which we were told three and a half years ago that the Government were all poised for dynamic action, but the fuse has taken quite a long time to reach the dynamite. I think it was about two years ago when the noble Lord, Lord Byers, moved a Resolution on this subject and all noble Lords who took part in the debate pressed the Government for more speedy action.
As the Statement has been in my hands for only a short time, I do not think I ought to say anything about the arrangements which the noble Lord the Leader of the House has described for shareholding in the new computer company, International Computers Limited, part of which is to be held by the Government under the Industrial Expansion Act (and I merely put in the proviso) if and when the Act reaches the Statute Book. I am sure that if, having reflected on this subject and examined the Statement, any of your Lordships wants to discuss these matters, it would be easy to arrange a debate on an Unstarred Question or in some other way. Meanwhile, I hope that the noble Lord will assure the House, as I am sure he can, that no undue pressure was used in bringing about this merger of the companies concerned.
In the final part of his Statement, the noble Lord said:
"The new company will seek its supplies from the most competitive sources."
I am sure that none of us would take exception to that, but I seem to remember that in the debate which I have mentioned the Government indicated that some special action might be taken to encourage the production of computers in the development areas. I recognise, of course, that there must be limits to that, but I wonder whether the noble Lord could say if any Government decision has been taken about it.
LORD GLADWYN: My Lords, on behalf of my noble friends on these
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Benches, and notably on behalf of my noble Leader Lord Byers, who unfortunately could not be present at the moment to hear the Statement, I would say that we greatly welcome this development, which will help this country to compete in the production of what has been called rightly "the goods of the future." I would ask, if I may, three questions. First, has the Industrial Reorganisation Corporation played any part in the merger? Secondly, will the resources now made available to the new corporation for research and development compare in any way with the resources which we know are available to such enormous bodies as the International Business Machines of America? Thirdly, will the shareholders be consulted?
LORD SHACKLETON: My Lords, I can only say that I do not know where the noble Earl, Lord Dundee, has been during the last 3½ years, because if there were only one thing that one could say of this Government, it would be that it has brought enormous pressure and support behind the computer industry. If the noble Earl wants to hear the various things that have been done, I may say they have all been announced in your Lordships' House. When the Government proceed by free negotiation to persuade a number of private enterprise firms to come together, I think it is a little unfair to suggest that the Government ought to have used more forceful methods. This is something which has been freely entered into by the firms concerned with the support of the Government. It is a new and exciting development, and I should have thought that the Government should be congratulated on the rapidity with which they have brought about this merger, which largely reverses the situation in regard to large computers. The noble Earl may remember that when we debated the Plowden Report the recommendation then was that large computers should be imported from America. The Government have taken hold of that and we are now going to make our own. This is a good example of joint association between private enterprise and Government.
I did not quite understand the reference to I.B.M. in this matter. I.B.M. are still the largest, and a remarkably efficient and highly competitive, computer firm,

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which covers, I believe, something like three-quarters of world production. The American firms will continue to compute—I beg your Lordships' pardon to compete, and compute—in this country. I understand that the I.R.C. were interested in this matter, but I cannot say how far their good offices specifically contributed towards the result. Certainly they knew all about it and no doubt approved it. The shareholders have to be consulted. The normal letter will go out to shareholders to-day. The Boards are recommending to the shareholders participation in the merger.
LORD CONESFORD: My Lords, can the noble Lord help me in the matter of this new noun "know-how"? Is this baby language for "knowledge" or does it mean something different?
LORD SHACKLETON: My Lords, it does mean something different. Like all jargon which is used properly, it has a specific meaning, tailored (if the noble Lord will allow me to use that word) to a particular use. It contains a more specific meaning than knowledge alone. I am surprised at the noble Lord's question because, when I was going through the Statement, I picked out two other words of which I said I must have the exact meaning as the noble Lord, Lord Conesford, would be bound to refer to them.
I am sorry that I am unable to answer the noble Earl's question on development areas, but clearly what he suggests would be consistent with the Government's policy generally. I am afraid that I do not know where these factories will be, but I rather think that at least one of them is in a development area.
LORD IRONSIDE: My Lords, is the noble Lord able to say that the money the Government will put up for research and development will be distributed across the board, on software as well as on hardware? Will the noble Lord also give some indication of whether the obsolescence of certain computers in Government service which have already been supplied by the companies concerned will be hastened?
LORD SHACKLETON: My Lords, the first question is relevant to the Statement, but I am not sure about the second. They are both important points. As I
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understand it, research and development will be across the board. There is a great deal of research going on at universities on particular aspects of computers. There is one, I believe, on peripherals generally. But money will be available to cover the whole field and there will be a properly worked out research programme. Software is an important aspect of it.
LORD REA: My Lords, I believe that this company is to be a British concern. If that is so, could the noble Lord explain why the title includes the word "International"?
LORD SHACKLETON: My Lords, there are quite a number of international companies which are British owned. It is a suitable title to indicate what I hope will be the world-wide ramifications of this new British industrial giant.

AGRICULTURE (MISCELLANEOUS PROVISIONS)BILL [H.L.]
4.10 p.m.
House again in Committee.
LORD BURTON: I should like to support my noble friend the Duke of Atholl on this Amendment, as I feel that it would make the operation of this Bill very much easier. Most of us knew the length of time it takes to get anything through the Land Court, and anything which can be done to speed up this process must be an advantage. Until such time as the new tenant has been agreed, there may well be no satisfactory person occupying the farm. It will be in the hands of trustees, executors or some such person or persons. As the law stands at the moment, there are already difficulties in this respect—and I speak from personal experience—so that any step which can be devised to speed up the process should be adopted for the good of everyone, whether he be a farmworker, tenant, landlord, or even the Department of Agriculture, who have to get their forms completed by the officer.
LORD HUGHES: The noble Duke has explained why he considers that his Amendment is desirable. I hope to persuade your Lordships that it is in part unnecessary, and otherwise undesirable, because it would put on the successor the

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onus of proving to the Land Court that he had sufficient training in agriculture and sufficient experience in a type of farming suitable for the unit. Secondly, it would add to the provisions in Clause 18(2) as it stands at present the additional requirement of adequate financial resources.
On the first point, the noble Duke appears to think that the clause, as drafted, puts the onus on the landlord to prove that the successor had neither adequate training nor experience. The first move must, of course, be made by the landlord. This is because he alone can set the ball rolling by giving a notice to quit and stating that he will seek the consent of the Land Court on the grounds of the tenant's lack of training or experience. But once he has done this, the Bill, as drafted, would mean that the Court would be required to judge on the basis of facts put before them by both the landlord and the tenant, and taking account of any other relevant information available to them whether they were satisfied that the tenant had neither sufficient training nor experience. The clause, as drafted, is, moreover, in accordance with normal practice, both in the Agricultural Holdings Acts and elsewhere. The Court have to reach their conclusion on the material available to them.
There is a further objection to this aspect of his Amendment as it stands. We have provided that a successor should be liable to be dispossessed only where he has neither sufficient training nor sufficient experience to farm the holding. The Amendment would require the tenant to have both sufficient training in agriculture and sufficient experience in farming to enable him to farm the holding reasonably efficiently. I think that noble Lords will agree that this would demand an unduly high standard for the average holding. The requirement of adequate experience is related to the particular holding, and in the sort of example which the noble Duke cited of someone he would not wish to accept as a suitable tenant, namely, a man whose only experience was of asparagus farming in Norfolk, obviously if this were the case the Land Court would be bound to hold that this was not experience related to the farming of a particular holding,
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Unless—and this seems to be unlikely—the noble Duke was proposing to lay a farm for the growing of asparagus, in which case it would perhaps be accepted as being at least an analogous experience.
If a tenant has sufficient experience to enable him to run the holding efficiently it would seem wrong to demand that he should have had some formal training as well. We did have in mind, however, that in some cases a young man might have undertaken some fairly extensive course in agriculture, say at an agricultural college, which would fit him to run the holding to which he had succeeded, although he might not have had time to gain experience on a farm, and we thought that in such a case it would not be right for him to be dispossessed. Insistence on both training and experience might lead to the dispossession of successors who would be well-fitted to run the particular farm concerned.
I turn now to the proposal that the tenant should be required to prove also that he has sufficient financial resources to farm the holding efficiently. On the face of it, the noble Duke's proposal is a reasonable one; but, as so often when I have said that about the noble Duke's proposals, I go on to say that I see in it considerable objections. First, the amount of capital a tenant needs to farm properly is very much a matter of judgment. If the holding was in a very run-down condition, the tenant would need more capital than if he had acquired it from a tenant who had farmed the land well and maintained all the equipment in good order. Further, the tenant's creditworthiness is as important as his actual cash resources. If he is known to be an able farmer and a good business man, he will have little difficulty in getting sufficient capital from financial sources to see him through any initial difficulties. In the clause, as drafted, we have tried to ensure that the successor will be adequately qualified to manage the holding efficiently. And we should hope, therefore, that he would be able to manage the financial side of his affairs competently. There are, of course, safeguards under existing legislation. If the landlord considers that the successor has insufficient capital to run the holding efficiently, he may object to the successor under the provisions of the 1949 Act, and if the

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Land Court are satisfied that his objections are reasonable, the successor may be dispossessed. We know that the lack of capital has been accepted by the Land Court as a reasonable ground of objection.
As I have said, there are, therefore, a number of objections to this Amendment—I hope I have persuaded your Lordships that I have said it with reason—and, in the circumstances, I must ask the noble Duke to withdraw the Amendment.
THE DUKE OF ATHOLL: I was rather dismayed when I heard the noble Lord, Lord Hughes, say that he thought this would demand an unnecessarily high standard for tenant farmers in Scotland. I should have thought that our entire object ought to be to get the highest standard of farming that is possible. We know that our balance-of-payments situation is very unhealthy at the moment, and one of the ways in which it can be helped is by efficient farming. Therefore, I should have thought that this was no argument for rejecting my Amendment. If the noble Lord thinks that it will give rise to a higher standard than the Government already have in the Bill, I can only say that I should have thought this was an excellent thing.
Secondly, the noble Lord said that in so far as run-down is concerned, the tenant might need more capital in order to farm with efficiency—at least, I think he said that. I should be inclined to disagree with this, because if the farm is run down it is surely up to the landlord to bring it up to a high standard, so far as buildings are concerned. Normally this is what the landlord does; and I think most modern, progressive landlords are only too prepared to do this if they are satisfied that the farm will be well farmed afterwards. A really modern farm, with modern buildings, needs far more stock in order to farm it efficiently than one of these old-fashioned places which have not been improved, and therefore the tenant needs more capital, as well as the landlord having to, put more capital into the farm. This is probably a right and desirable thing.
Thirdly, although under the 1949 Act it is possible to dispossess a tenant owing to lack of financial resources, he has to be very nearly in the bankruptcy court
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before it is possible to start taking proceedings, and by the time the Lana Court have come to their decision, which necessarily takes a long time (all decisions of the Land Court, for reasons of which we are only too well aware, take a long time), he is almost certainly in the bankruptcy court, and therefore will go in any case. I should have thought it was essential to have some financial provisions in this clause. However, I notice that this point is covered by an Amendment in the name of my noble friend Lord Burton to the particular subsection which the Government fancy for this, so perhaps we can discuss it further then.
The only thing that impressed me about the noble Lord's argument was the fact that there might be a son who had just been through a college of agriculture, or something like that, and who, through no fault of his own, purely because he was too young, did not have very much practical experience of farming. This, I think, is a point in his favour, because, on the whole, young tenants are good and desirable, and I do not think we want to do anything to discourage landlords from giving farms to young tenant farmers. Therefore, this is a point in my Amendment which I think it would be worth looking at. Otherwise, I remain entirely unconvinced by the noble Lord's argument, and absolutely convinced that my line of approach is preferable to that of the Government. I will, however, withdraw my Amendment on this occasion and try to re-word it so that someone who had had sufficient training, not necessarily sufficient experience, in agriculture would be allowed to continue to keep the farm, regardless of whether the landlord wanted it or not. For this reason, and for this reason only, I beg to withdraw the Amendment.
Amendment, by leave, withdrawn.
4.21 p.m.
LORD BURTON LORD BURTON moved in subsection (2)(a), after "has" to insert "(i)". The noble Lord said: This Amendment has, of course, been spoken to already, and as my noble friend the Duke of Atholl said, this particular part is very important. The noble Lord, Lord Hughes, in replying, said that the amount of capital was very much a matter of judgment. What, therefore, better than to put it to the Land Court to settle whether or not a

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prospective tenant has sufficient capital? Any competent landlord would automatically ensure that a prospective tenant had sufficient capital before he allowed him into a farm. Why, therefore, the Government should resist this Amendment I really cannot see.
As regards creditworthiness, which Lord Hughes also mentioned, I may say that tenant farmers are fairly fortunate, in some ways, in getting credit. I have had particular experience of this in two different cases. In one, I may say, when I got rid of the tenant I was delighted to find the bank had supported him, and continued to support him, although he had lost £6,000. Such people can continue because banks and certain merchants are frightened that if they are not good friends of the farmer it may lose them some of their other farming clients. I feel that this Amendment is an important one, and it is one which I hope might well be pressed. I beg to move.
Amendment moved—
Page 16, line 23, after ("has") insert ("(i)").—(Lord Burton.)
LORD HUGHES: When I invited the noble Duke to withdraw the Amendment I did not say that I hoped to convince him. For me to attempt that, I am afraid, in this sort of subject would perhaps be to attempt the impossible. What I sought to do, with success, was to persuade him to withdraw his Amendment. This is as far as I would wish to go in relation to these two Amendments, Nos. 17B and 17C, in the name of Lord Burton; because 17B is merely incidental to 17C, if I have read them correctly. As the noble Lord, Lord Burton, has remarked, I have really spoken to his Amendment in advance because it was similar to part of the Amendment moved by the noble Duke. The remarks which the noble Lord has made about the ability of suitable farmers to get credit have of course strengthened the case which I made. In suitable cases a good farmer will have no difficulty in getting the necessary financial support to enable him to carry on. In fact, the noble Lord, Lord Burton, has strengthened my case by giving evidence that, even in a case where a man was not an efficient farmer, he appeared to have succeeded in getting credit to the extent of £6,000 before
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things went irretrievably wrong. In these circumstances, I think he has helped me in my case that the efficient man will not be in difficulties. The purpose of the Amendment is not to dispossess the efficient man who may be able to lay his hands on financial resources; it is to dispossess the man who will not have adequate financial support to enable him to carry on. As I have indicated, the existing legislation makes provision for dispossession in these circumstances, and I cannot accept what the noble Duke said: that the processes of the Land Court are such that one can get a man out only if he is on the verge of bankruptcy, and that the time taken is such that he will inevitably be bankrupt before it is completed. The information I have is that the Court has in fact dispossessed a tenant on grounds of financial instability or insufficiency before things reached that stage. I think it would be unreasonable in this connection to place this additional requirement in this type of agricultural legislation when facilities for the Land Court to consider the matter already exist elsewhere. I therefore hope that in this case also the Amendment may be withdrawn.
LORD BURTON: I feel that the information which the noble Lord has is not quite correct. The noble Duke was perfectly correct in stating that the tenant had to be practically bankrupt before one could get him out under existing legislation. Therefore, it would be most unfortunate if we got new tenants put in farms when they were on the verge of bankruptcy. I think this is extraordinary. I am sure the noble Lord has inaccurate information on this matter, and I hope he will look at it again.
LORD HUGHES: I would certainly wish to look at the implications of what the noble Lord, Lord Burton, has said. It certainly seems that if a man was on the verge of bankruptcy it would he rather difficult for the Land Court, considering all the facts which had been placed before them, to regard him as being an efficient farmer. But this is a different thing from putting down specifically that one of the grounds on which he may be dispossessed is that he is possessed of insufficient financial resources to enable him to be an efficient farmer. I will, obviously, look at all the

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information we have as to how the Land Court have disposed of matters of this kind in the past, to find out just what is meant by "practically bankrupt". We all know what "bankrupt" means, but perhaps we do not all put exactly the same interpretation on what is "practically bankrupt". The man who has been accustomed to work in hundreds of thousands of pounds might regard the possession of £10,000 as being practical bankruptcy. On the other hand, the man who has been in the habit of working with a few pounds at a time might regard £10,000 as the arrival of the millennium.
VISCOUNT STONEHAVEN: I should like to raise another point, from a different angle. The reason why I would support something of this sort is that I do not wish to see a very worthy tenant, perhaps a young lad, getting a millstone hung around his neck. I have seen this happen. The profit margin on some of these difficult hill farms must be remembered. Two men may farm them, but they are still small farms, worked under very difficult conditions, and it requires a great deal of capital to run these farms.
There are three main sources of capital open to a tenant farmer. One is the mart, the second is the seed and corn merchants, and the other is the bank. But if one examines the rates of interest charged by any of the three it will be seen that one is very lucky to get an overdraft at an interest rate of under 8 per cent.—indeed, you will not get it at that. If one looks at the mart's rate of interest—because they always do it on a short-term basis—one will find it is probably something like 20 to 30 per cent.; and the same thing applies to a seed merchant. Therefore, I think that something of this sort should be put in the Bill to protect a very worthy and very decent tenant of the kind I want to encourage. But if he is going to be far better off earning £15 or £16 a week as a farm labourer, I think he would be well advised to do that. Therefore, I would support something in the nature of these two Amendments.
THE DUKE OF ATHOLL: I should like to ask the noble Lord one further question, because Clause 18(2)(a) says:
"if they are satisfied that the near relative has neither sufficient training in agriculture nor
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sufficient experience in the farming of land to enable him to farm the holding to which the notice relates with reasonable efficiency … "
There is absolutely no mention there of acquiring sufficient capital. The Land Court are bound to take into account the case where a man has no capital at all, but I am thinking of the case where a new tenant farmer, the heir to the tenancy, would need, say, £50 000 to stock the farm properly, when he has about £5,000 available and, possibly, may have inherited a certain amount of stock. In this case I feel the Land Court would be bound to come to the conclusion, as this clause stands, that he would be able to farm that particular farm with reasonable efficiency, provided he had had the training and experience.
However, I think he would always find difficulty in farming it in the most up-to-date and modern way with the best methods that are available nowadays, because he simply would not have the capital to buy the necessary machinery and would not be able to obtain loans in view of his rather inadequate financial status. Of course he would be able to farm it, and probably to make some sort of a living, but he would not farm it in the way in which we ought to consider desirable in the latter half of the 20th century. This is an extremely important point, in my view, and I shall be grateful if the noble Lord will consider this aspect of it.
LORD HUGHES: There seems to be a certain amount of confusion about this matter, which was possibly precipitated by the references to bankruptcies. There is a right under the Agricultural Holdings Acts to dispossess any tenant at any time if he is bankrupt. The Land Court would take capital into account in considering whether it was reasonable to object to a successor. We know that the proceedings of the Land Court are not as formal as those in other courts of law, and if, in the course of evidence which the owner was putting forward to dispossess the successor, he could show that the man was obviously not possessed of the capital to enable him to farm the place efficiently, that is bound to have some influence on the considerations of the Land Court, particularly when they are aware of the fact that they are the body to which an application or this specific ground can be made under existing legislation.

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We are afraid that if we accept the Amendment in the terms stated it would be regarded as a sort of "third leg" on which the tenant—the successor—had to prove his case conclusively. There must always be some sort of balance of judgment in these matters, and in my view the Land Court are well qualified to exercise that balance of judgment. But to a certain extent, as I have already said, I must look at the information which is available, to find out what sort of precedents there are for the dispossession of tenants on the grounds that they do not have the necessary capital to farm the holding efficiently. If I can get the information sufficiently quickly I shall be happy to communicate it to the noble Duke and to the noble Lord in time for them to reconsider the matter before the next stage of the Bill, so that if they do not feel satisfied with the information they may table another Amendment at the appropriate time.
LORD MOLSON: When the Minister gives the consideration to this that he has promised, will he bear this further point in mind?—that, quite clearly, the Land Court will turn to this Bill and to this clause for guidance as to how they are to exercise their discretion. Would he consider whether it would not be desirable that some reference should be made to the financial position of the tenant who desires to hold over? It is not wholly a reply to this point to say that under other legislation if a tenant is in extreme financial difficulty he may be dispossessed. I should have thought it was quite clear that where the special procedure was being devised it should be possible for the court to look at a single clause in order to obtain guidance.
LORD HUGHES: That might be so if the position were as the noble Lord described it, but the reference under the existing legislation is not confined to being dispossessed where the tenant is in extreme financial difficulty. This is placing much too great a stress on the position as it exists at present. It is that he may be dispossessed if he does not have sufficient financial resources to farm the unit properly. However, I have already undertaken to look at the position as it exists, and I think beyond that the Committee would not expect me to go.
LORD BURTON: On this occasion I think the noble Lord has answered my point by saying that the Land Court can look at this. Therefore I feel it should be written into the Bill, because if they are going to look at it, it might just as well be in the Bill. However, in view of the assurance given by the noble Lord I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
4.38 p.m.
THE DUKE OF ATHOLL THE DUKE OF ATHOLL moved, in subsection (2), after paragraph (a), to insert:
"( ) if the landlord nominates as a prospective tenant of the holding to which the notice relates a person who is willing to become the tenant thereof and the Scottish Land Court are satisfied that such person has greater technical skill than and would be able to farm the holding with greater efficiency than the near relative and if it is stated in the notice that it is given by reason of the matter aforesaid, or".
The noble Duke said: I must truthfully admit that this is also an Amendment which I am not particularly hopeful that the Government will accept, but I feel it might lead to more efficient farming because the object of the Amendment is that if the landlord can produce to the Land Court as a potential tenant a man who is so obviously superior, both in his farming ability and his financial status and in every other way, that he is obviously more desirable as a tenant than the near relative who would get the farm under Clause 18 as it stands at the moment, the Land Court should be able to say to the landlord that he may accept this new tenant and that he can serve an incontestable notice to quit on the heir to the old tenant when the lease ends.
This would have the great advantage that it must inevitably lead to more efficient farming. I keep emphasising this point, because in my view it is essential that we should increase our agricultural production. The only way in which we scan do this is by farming more efficiently, and this proposal would lead to that end. The Land Court would obviously have to be convinced that the new potential tenant would be far superior to the person who had inherited the lease of the farm and who was going to be dispossessed. It would therefore be a certain measure of protection for him, although not quite as great a measure as the Bill gives him at the moment.
I believe something of this sort is working quite well in Denmark, and I also believe it would not be used often, mainly because it would be great trouble, both for the landlord to find someone who is likely to qualify under this particular Amendment and also because that person would then have to hold himself available while the Land Court took their time to decide whether he should or should not be allowed to succeed to the tenancy. I do not think there are likely to be many people who would be prepared to stand idly by, waiting to see whether they could get this tenancy, unless they are very keen. I beg to move.
Amendment moved—
Page 16, line 28, at end insert the said paragraph.—(The Duke of Atholl.)
VISCOUNT MASSEREENE AND FERRARD: I should like to support the noble Duke in this Amendment because it will go some way towards preventing farming from becoming a "closed shop". Heaven knows; we have plenty of "closed shops" in this country as it is, and we do not want farming to become one of them. It will also, as my noble friend said, give young men who want to acquire a farm a chance. We have young men pouring from the agricultural colleges with agricultural degrees wanting farms. How they are going to get them if this Bill becomes law, I do not know. It is essential to maintain the efficiency of our agriculture, and we cannot maintain it if the Government intend to turn farming into what I can only describe as a small oligarchy of tenant farmers.
The landlord must be able to obtain the most efficient tenant. We do not want farming to become, for instance, like the printers' union. I understand in the union you cannot become a printer unless you are the son of a printer; I am told that it is in practice as bad as that. I really cannot understand the reactionary attitude of Her Majesty's Government in creating what I can only describe as this new hereditary class to hold sway over hundreds of thousands of acres of our agricultural land. The noble Lord, Lord Hughes, smiles, but it is true. It is completely contrary to Fabian doctrine. It is really creating a class that will hold the land ad infinitum for the purpose of agriculture. They will not have to pay any death duties
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because by law they do not own the land, but in practice they will own the land. The farm tenants in Scotland under this legislation, if it goes through Parliament, will be in the enviable position of having all the power and none of the responsibility. I support my noble friend's Amendment most strongly.
LORD HUGHES: I think it would be wrong if I were to pretend for one moment that this is an Amendment for which I have much sympathy, because it goes completely against the fundamental objects of the Bill. When the noble Duke is supported by the noble Viscount in the terms that he has stated it certainly does nothing to persuade me that my first ideas were wrong. It seems to me to be extraordinary that those who are in possession of land very largely through the hereditary system should find it so objectionable that in a second generation the tenant should be able to carry on the farm. What passed through my mind was that if the sort of restrictions on multiple ownership, for example, which are being proposed in this connection had been in operation some two or three hundred years ago, many noble Lords opposite would not be in possession of the acres they have at the present time. But that has very little to do with what we are discussing. What we are seeking to do is to protect the rights of people who could properly be successors to their near relatives.
The noble Duke has stated that, if a landowner can produce a tenant who is better qualified to farm the land than the near relative, it is reasonable that this should be a ground for dispossessing him. If we were to accept that principle we should in fact be accepting by implication the argument that, any farm which is tenanted ought to be capable of being made available to someone else of whom it could be said that he could be a better farmer. Why confine it to the relative? Why not dispossess the sitting tenant on the same ground at the end of his lease instead of having it go on year bi year? What the Government are seeking to do in this provision is to ensure that where a near relative succeeds he will be an efficient farmer.
We think it unreasonable that he should have to prove he is the most efficient farmer who can be found for this particular farm. That is going much too far.

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It is reasonable that the man should be able to persuade the Land Court, if a notice to quit has been served upon him, that he will be able to farm the holding efficiently, and I think it is completely beside the point whether someone else could be produced who could farm it even more efficiently. If he meets the test of being an efficient farmer that is as much as can reasonably be expected in a case of this kind.
I have been accused for the second time of seeking to create a new hereditary set-up in Scotland. I countered this at the last stage by saying one might have a strong desire to protect a family without being accused of wishing to perpetuate the hereditary system. The hereditary system of family succession has of course an hereditary basis. We are not suggesting in this case that once a farm proceeds on death to a near relative we are in fact tying it to the relatives then for generations ahead. Every time there was a death the same procedure would have to be gone through, every man has to prove his right to hold the tenancy. If this were being accompanied by another Amendment that when the hereditary landowner was succeeded by his heir his heir would have to prove that by experience, qualifications, training, holding of capital and all the rest, he was a fit and proper person to succeed, I must admit that I might feel that a much stronger case was being made.
VISCOUNT MASSEREENE AND FERRARD: The hereditary landowner has to pay the taxes, does he not?—which is a very different matter. He has to pay the death duties, and the man who pays the piper should choose at least some of the tune.
LORD HUGHES: I was not aware that it was part of the case which the National Farmers' Union put up each year at the Price Review that farmers were exempt from the payment of taxes.
THE DUKE OF ATHOLL: I think the noble Lord, Lord Hughes, has made an unnecessarily offensive speech on this. The difference between a landlord and tenant, which he is apparently not aware of, is that the landlord owns the land; the tenant enters into a contract to tenant the land for so many years. Owing to wartime emergencies this was extended, in my opinion quite rightly, so that these
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contractual tenancies did not hold good, and since the war no Government, and so far as I know no person in a position of responsibility, has suggested that sitting tenants who farm adequately should be dispossessed. This is certainly not what my Amendment suggests, and I should be rather surprised if it was what my noble friend Lord Massereene and Ferrard was suggesting. I certainly did not gather that from his speech. But the noble Lord, Lord Hughes, appeared to answer as though we were suggesting that.
There are many other points. The tenants at the moment expect—or did expect until this Bill was introduced—that when they sign tenancies they will have them for their lifetime, provided they were reasonably good tenants. But they did not expect until this Bill was introduced that their sons, daughters, adopted sons and adopted daughters and widows should be able to succeed to their tenancies. I cannot therefore see that we are taking anything away from them if we insert this Amendment. As I said before, we are just likely to improve farming in Scotland.
There is a further point. The Government keep saying that they want to protect the family unit. I agree that this is most important. They have inserted these clauses at the end in relation to amalgamations, which probably are a good thing. If it does not give full employment to the individual occupier and one other man the Land Court will be able to uphold the notice to quit if it is for the purpose of amalgamation. It is these people who are going to be worse off when they are dispossessed of their farms. They are going to tend to be the people who have not got so much capital because they are on smaller farms in the first place. They may not have enough capital even to buy a decent house, let alone a farm. These are not the people who are going to be caught under Clause 18(2)(a), or even my suggested Amendment. There will be exceptions, but on the whole it will be the people who are reasonably well off. I had every intention of withdrawing this Amendment because I realise that it went against the Government's ideas on this subject and therefore there was no point in pursuing it until the noble Lord, Lord Hughes, made his speech. However, as a result of what has been said I would much rather not withdraw it.
LORD HUGHES: In this instance I made it perfectly clear that I regarded the Amendment as being against the fundamental objects of the Bill. It would therefore be quite wrong of me to pretend to have any sympathy with it. The noble Lord has said that I made a needlessly offensive speech. I hope that the word "offensive" is not truly to be applied to my speech. I think the word "needlessly" need not be put in at all because if the speech was offensive then obviously it was needless, because it was never my intention to offend anyone.
I must admit, quite frankly, that if the matter had rested at what the noble Duke had written and what he had put in his Amendment and had read, my remarks would probably have been different. Unfortunately, I have to reply to the debate as it emerges. The noble Duke had the benefit of the supporting remarks of the noble Viscount, and it was largely the remarks which the noble Viscount made which prompted me to express some of the things which I thought, and which seemed to me to be perfectly appropriate to the thoughts put forward by the noble Viscount. It would be my last intention to go out of my way to offend the noble Duke, who so frequently puts forward proposals which I find completely unacceptable, in the most acceptable way. I have enough difficulty in trying to persuade him that I am being reasonable when I ask him to withdraw, and I would not make my case more difficult by having him take the view that I am going out of my way to offend him. I wish to show him that that was not my intention. But he will now appreciate that at least on some of these matters of land he and I will not necessarily always think in exactly identical terms.
THE DUKE OF ATHOLL: After what the noble Lord has said I suppose that, as there is no hope of ever obtaining this Amendment, I should beg leave to withdraw it. But I also beg leave to say to the noble Lord that if he takes exception to the words "needlessly offensive" I will certainly withdraw the word "needlessly" if that would please him. I should be delighted to do anything to please the noble Lord if it will keep him in a good mood to the extent that he may accept some other Amendment.
THE EARL OF PERTH: Before the noble Duke withdraws his Amendment
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perhaps I may say a few words on something which causes me some anxiety, and perhaps this is the best time to raise it. I am not taking any particular part in this debate because of my position as Crown Estates Commissioner; I do not think it would be appropriate. But the thought which comes to me, on which I should like the noble Lord to help me, is this. As some other noble Lord said, there are coming from the agricultural colleges various well qualified farmers who may subsequently get a good deal of experience on farms which they do not own. With the law of Scotland being different from that of England, I am somewhat worried that these farmers will naturally seek to come to England to get the benefit of an English farm, which they may do more easily than in Scotland, and therefore to take advantage of what they have done in the way of work in the colleges.
I recall that in the Second Reading debate the noble Lord said he thought that the number of cases involved was small. This may or may not be right, in the light of how things develop But what I would ask the noble Lord is whether he would be good enough over the years to come to keep a check on this, and to see whether in fact these well qualified farmers are having opportunities, or whether they have come to England, to the detriment of Scottish agriculture.
LORD HUGHES: I shall be delighted to do that, particularly in view of the confidence which the noble Earl has expressed that I am going to be concerned in these matters for a number of years to come.
Amendment, by leave, withdrawn.
LORD HUGHES: This is another paving Amendment to the new Schedule in Amendment No. 39. I beg to move.
Amendment moved—
Page 16, line 42, leave out ("has stated") and insert ("contains a statement").—(Lord Hughes.)
On Question, Amendment agreed to.
4.58 p.m.
THE EARL OF DUNDEE THE EARL OF DUNDEE moved, after subsection (6), to insert:
"( ) In the case of any lease of an agricultural holding entered into after the passing of this Act where a landlord and a tenant have

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agreed that the lease shall be terminable after such term of years as may be specified therein this section shall not apply to any notice to quit given at the termination thereof and accordingly at the termination thereof the landlord shall have power to serve an incontestable notice to quit."
The noble Earl said: This Amendment does not cover quite the same point as my new clause, Amendment No. 26, and whether your Lordships accept this Amendment or not, I should still like to move Amendment No. 26 which deals with rather different circumstances from those covered by this Amendment, No. 19A. The purpose of this Amendment is to try to focus your Lordships' attention on what many of us believe is the most serious piece of damage which Part III of this Bill will inflict on the future farming of Scotland, and the Amendment seeks to repair, or at least to mitigate, this damage.
I was sorry that I could not be here at the beginning of the debate on Second Reading, and particularly sorry that I was not here at the beginning of the speech of the noble Lord, Lord Hughes, on Part III. I therefore did not take part in the Second Reading debate. But when I came into the House the noble Lord, Lord Hughes, was in the middle of his speech; and the first thing I heard him say was that a speech which had been made by the noble Lord, Lord Henley, had very nearly driven him into applying for membership of the Scottish Nationalist Party, and that he was just about to do so when he reflected that he was allowing himself to be driven by illiberalism into insanity. I do not think that everybody who belongs to the Scottish Nationalist Party is insane. I think there are some who are not. But since the noble Lord, Lord Hughes, is in my view one of the most eminently sane people in the world I was curious to find out what had provoked him into going so near the brink.
When I looked at Hansard next day, I found that the speech of the noble Lord, Lord Henley, was a very reasonable explanation of the arguments which the English National Farmers' Union had put forward against doing in England what Part III of this Bill does in Scotland. The argument which they put forward was that it would cause a "closed shop" to grow up in farming, and would keep a large number, or a considerable number,
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of new, energetic young men out of farming. With respect to the noble Lord and to the Scottish Nationalist Party, and to everybody else who ought to be treated with respect, wherever he is, there are a great many farmers in Scotland who hold these views and who say so quite openly in conversation, in spite of the attitude which has been taken up by the N.F.U. Executive. This is what many of us feel is the really damaging consequence likely to result from Part III of this Bill.
I read with great care the noble Lord's speech on Second Reading. There was an earlier part, before I came in, in which he dealt with the possible effect of Clause 18 on the future letting of farms. He said:
"I would not deny that it may reduce the number to a small extent, but we ought not to exaggerate its effect. At present, many landlords allow a tenant's son or other relative to succeed to a holding, and the fact that this Bill may become an Act is not going to alter the attitude which these landowners would have taken in any event."—[OFFICIAL REPORT, 5/3/68, col. 1278.]
That is perfectly true and correct. Most landlords want most sons and most tenants to succeed to the lease. In fact, the reason why I—and I am speaking only for myself—prefer to try to deal with this by Amendment and not by rejecting the whole of Part III, although I think the whole of Part III is made up of thoroughly bad clauses, is that it might give the impression, quite contrary to the facts, as everybody who lives in the Scottish countryside knows, that landowners in Scotland do not want the sons of tenants to succeed their fathers as farmers, whereas the fact is that they normally do. It is quite true, therefore, that the provisions of this Bill may not result in very many people who would not have done so, anyhow, going on with a lease after their fathers.
But then the noble Lord spoke of the farms which do become available. He said:
"We do not know exactly how many farms become available, but it would seem that the number becoming available for letting in a year is somewhere between 35 and 60".—(col. 1278.)
I have tried to get exact figures about this for months, but I have been no more successful than the noble Lord. I think he is probably right in suggesting that the usual number of sizeable farms to be re-let in Scotland in the course of

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a year is not less than 35 and not more than 60.
Then the noble Lord continued:
"… it seems unlikely that a high proportion of these are cases in which the landlord has given a successor an incontestable notice to quit."—(col. 1278.)
That, I think, is absolutely right. I would say that those 35 to 60 annual cases of new farms to let are practically all cases where the farmer has retired or died, and either he has no son or his son does not want to go on farming and does not want to succeed to the lease. In that case the farm comes on to the market to let, and that is the important class of farms which I want your Lordships to consider now—not the very few farms which might be re-let if the landlord were allowed to eject the farmer's son, but those 35 to 60 farms a year which come on to the market, anyhow, whether we make this provision or not.
Between 1948, when the war-time emergency regulations were statutorily confirmed with the effect, which I do not think was foreseen by Parliament at the time, of giving farmers in Scotland the right to bequeath their lease in all perpetuity to anybody they liked, and 1958, when that situation was brought to an end, very few farms of this type which became vacant were let to new farming tenants. Except in the case of, perhaps, some very large estates which might have 70 or 100 or 120 farms of some size, where the owner could not take on any more farms himself and did not want to sell any farms and was not disposed to any plan for a partnership or anything of that kind, hardly any farms were let during those ten years. Again, although we have no exact figures, everybody who is familiar with country life in Scotland is aware that since 1958 a great many more farms have been let to new tenants than was the case in those earlier ten years. It is here that, as some of us see it, the chief damage of this new Part of the Bill will be done.
What will happen is that instead of being let, except in the few cases which I have mentioned, the farm will either be sold with vacant possession—and I need not remind your Lordships of the distortion of agricultural values which is caused by this kind of legislation which we are now intensifying—or taken over by the owner, or resort will be had to
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some new device, some kind of partnership. Although an owner thinks and hopes when he lets a farm to a new tenant, that he and his heirs will want to keep the new farmer and his Heirs in that farm for many generations, yet the imponderable uncertainties of the future would prevent most prudent owners of land from virtually giving away the farm to a new farming family, for that is really what it amounts to.
Now 35 to 60 farms a year may not sound very much, but if we take the lower estimate over twenty years that comes to a total of 700 farms, and if we take the higher estimate over twenty years it comes to 1,200 farms. That is quite enough to have a considerable influence on the course of agriculture, if the new tenants who come in are young men or middle-aged men with new ideas and new experience. Not only they themselves but all the older farmers will benefit from their experience and example. They are like a new eleven coming into the farming industry. That is the reason why the English farmers do net want this system in England, and that is the reason why we are so afraid that in Scotland we shall suffer ill-effects from it.
Of course, it will not happen very quickly. Very gradually, the number of let farms will diminish; but in perhaps another two or three generations they will become comparatively few, and confined to old farming families. These we all like to see, but we like to see other kinds of families, too. It will mean, of course, that there will be a great increase in multiple farming. In many cases that may be a good thing, but not in all cases. There will also be an increase in the number of owner-occupiers, which is certainly a very good thing—we all want to see more owner-occupiers all the time—but nowadays it is expensive to become an owner-occupier, and it is not all the good and energetic applicants for a farm who have enough money both to own and equip a farm. There will be a much better chance for new blood to come into the industry if it is made easier for people to get farms to let.
My Amendment does not have the slighest effect on or do the slightest harm to any farming family which is there now. They are not deprived of their

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right of hereditary succession. It provides only that if a new lease is made in future, after the passing of this Bill, the owner and the tenant ab initio will be free to make whatever bargain they choose. Both will do it with their eyes open. It could be for any number of years or it could be for the lifetime of the tenant. I am glad to make that clear, if anybody thinks it is not clear: that it could be for the lifetime of the tenant or for any specified number of years. Each party would be acting with perfect freedom; and this would be in the best interests of farming.
I hope I have made it clear—very clear—that nearly all landowners want nearly all farms to go on in the same farming families. What we are concerned about is lest this balance, these 35 or 60 farms a year which come into the market, should all be used for multiple farming or by owner-occupiers, and none used to provide a let farm to new blood which wants to come into the industry and which can help it. I beg to move.
Amendment moved—
Page 17, line 31, at end insert the said subsection.—(The Earl of Dundee.)
LORD HUGHES: The noble Earl Lord Dundee, in his desire to be fair on this matter, covered a lot of the ground which had already been spoken to on Second Reading; and I must hasten to point out that I did not in any way suggest that the views which the noble Lord, Lord Henley, expressed in relation to farming in England were in any way wrong. The exception which I took was when he said that, the English N.F.U. having considered the matter and decided in a particular way, he thought it was wrong—I must admit that I am paraphrasing him now, and the noble Lord will forgive me if it narrows the thing too much, but I do not think it does; this is certainly the impression created—that the Scottish N.F.U. should have arrived at a different conclusion. The fact is that the Scottish N.F.U. did arrive at a different conclusion. If the noble Earl had read on a little further, he would have noticed that I also took to task the noble Duke, who expressed a similar point of view—that the decision of the English farmers was to be preferred to that of the Scottish farmers.
LORD HENLEY: I must protest. On Second Reading the noble Lord made a most offensive speech to me. To-day, the noble Duke has just pointed out that he has made a needlessly offensive speech to him, and I agree; it was offensive and it was needlessly offensive. The noble Lord, Lord Hughes, made an offensive speech to me on Second Reading—rather unpleasantly so, I thought. What I did was to make a disclaimer (a perfectly proper disclaimer, I thought) saying that I knew nothing about Scottish agriculture and I knew nothing about Scottish law, but that what I thought was wrong in principle with the matter of agriculture in England I suspected must be wrong with regard to Scotland as well. I thought I said this in terms which were polite and perfectly reasonable, but it seemed to have raised a storm of violence in the noble Lord, Lord Hughes, which really surprised me so much that I was unable to get up and say anything after it.
LORD HUGHES: That is probably just as well, because I was succeeded by the noble Lord's fellow Peer, Lord Bannerman of Kildonan, who also made it perfectly clear that he did not agree with what the noble Lord, Lord Henley, had said. So what I demonstrated was that not only did Scottish farmers and English farmers have different views on this matter but that Scottish Liberals and English Liberals have different views on it. I pointed out, when the noble Lord, Lord Bannerman, drew attention to this in his remarks, that in Scotland it would be what Lord Henley had said which was most likely to be quoted against the Liberal Party rather than what the noble Lord, Lord Bannerman, had said in favour of it.
However, this is irrelevant to what we are discussing at the present time; but in view of the fact that the noble Lord, Lord Henley, had not come back on the matter—and he now explains why he did not come back on it—and the noble Earl, Lord Dundee, having referred to it, it seemed to me that it would be improper that I should ignore the reference that had been made to his quotation from my previous remarks. I am quite surprised that twice in one afternoon I should be accused of making offensive remarks. It certainly was not my intention to be offensive, but I must accept it as quite reasonable that, while

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one person thinks that what he says is inoffensive, somebody else to whom it is directed may form an entirely different impression of it.
It certainly was my intention to disagree strongly with the point of view expressed by the noble Lord, Lord Henley, that what had been arrived at, quite properly, as a decision in England must, by the same token, be an acceptable decision in Scotland. The circumstances are different. It is because the circumstances are different that we are legislating in a United Kingdom Bill in one way for Scotland and in another way for England. As a Scot, I must insist, on any occasion when it is put over in your Lordships' House that what is good enough for England must be accepted by Scotland, that, if it ever was taken by Scots to be sound law, it is certainly not accepted to-day—and I am not going to be the one who is going to give that one away in your Lordships' House. If that is offensive, then I will plead guilty. I am a Scot, despite my name, and I will make it perfectly clear. One does not have to be a member of the Scottish National Party to stick up for Scotland on occasions like that.
Having been as irrelevant as the noble Earl was at the beginning, I will, like him, at long last turn to the Amendment. I cannot accept this Amendment, and I do not think that the noble Earl really expected me to do so, because it makes a fundamental change in the law of the tenancy of agricultural holdings. As he and most of your Lordships are aware, the present position is that at the end of a lease the tenancy is continued from year to year. What the noble Earl has argued is that it should be possible for a willing tenant and a willing landlord to enter into an agreement for a lease for a period of years; that there should be no compulsion on a tenant to do so, but that if he did willingly enter into such an agreement the landowner should be able to give him an incontestable notice to quit at the end of the period of the lease.
It seems to me that if we were to make this change in the law, one of the inevitable effects of it would be that it would be undoubtedly tempting to a landlord to try, in almost any case where he had a farm to let, to make a bargain of this
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kind, because, as I have said, it would completely change the law of tenure. The situation could arise that it would be virtually the price of getting a farm to let that a tenant would enter into an agreement of this kind. If a tenant is really willing to do this sort of thing, there is nothing to hinder him from undertaking it at the present time. If he is willing to take on a tenancy for a period of years then, when the lease expires, he can go at the present time; he is not compelled to carry it on from year to year. So the position in which we should be placing ourselves is that a tenant who would wish to take advantage of the law as it stands by continuing his tenancy from year to year after the lease had expired should, in fact, accept one where he was deprived of this opportunity of going on from year to year. It would only be in a willing case, a case where the man would do so under the law as it stands. If he would not do it under the laws as it now stands, then it follows that he would be accepting a tenancy of this kind only as an alternative to getting no tenancy at all.
I suggest that if Parliament ever thought of making so fundamental a change in the law of agricultural holdings it should not be in a comparatively minor measure of this kind, but after due consideration of the matter and when it was the intention completely to alter the basis of agricultural holdings in this way. I know that the noble Earl has no intention of wishing to make a fundamental change. By this Amendment, he is seeking to deal with the consequences of the changes which we are making. But I have felt bound to point out that this, in fact, would be the effect of what he is doing. If this sort of Amendment is put in there are many people who would expect to take a farm and hold it as the noble Lord has said, for the whole of their lives, when in fact they might find that all they were getting was a comparatively short-term tenancy. In these circumstances, and for reasons which I hope the noble Lord will accept, it is impossible for me to accept this Amendment.
THE EARL OF DUNDEE: I must first apologise for having stirred up such a hornet's nest by making reference to the Second Reading debate on this Bill.

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Everybody seems to have got slightly irked by everybody else for reasons which I had not been fully aware of. It seems to me to be slightly unnecessary, and I hope everybody will forget that anybody has ever been thought to be offensive. As to my reference being irrelevant. I had tried to show, and I hoped I had shown, that the arguments to which I referred in the Second Reading debate were peculiarly relevant to this Amendment which I am seeking to get accepted.
The noble Lord said that this was not an appropriate Bill in which to make a fundamental change of this kind in the law of tenancy. But is that not exactly what the Government are doing? They are making a fundamental change in the law of succession to tenancies. I am trying to prevent what seems to me to be the most adverse consequences to agriculture of this change which the Government are making. Does the noble Lord wish to intervene?
LORD HUGHES: I want merely to say that it is true that this is making a change in the law of tenure, of succession to tenancy, but it is making it in a limited field. What the noble Lord would do would have the effect of changing the law of tenancy in Scotland over the whole field of tenancies, whether the farmers continued to live or whether they died. This is a very much wider matter.
THE EARL OF DUNDEE: I do not think it would affect the law affecting the tenancies of any existing tenancies, because the Amendment is specifically restricted to new leases which are entered into ab initio after the passing of this Bill. That would not in the least affect the rights of any farmer who is now a tenant; nor would it affect the right of his son to succeed in thirty years, if this Bill were passed, or of his son's son to succeed in another thirty years in the year 2010. It would only give an option to new leases, after this Bill has been passed, to be restricted to a period of years.
If the noble Lord, or if the Committee, would prefer it, I should be quite willing to substitute the lifetime of the new tenant instead of a period of years. But I think the term "period of time" does obviously include the ability to make it
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a life lease. But if the Committee would prefer that it should have to be a life lease and no less, I should be willing to do it because my object is simply to enable farms to be let which will otherwise not be let at all. I think it a bad thing that they will not be let.
The noble Lord, Lord Hughes, said that if this change in the law were made then, when a farm came up to let, it would give a tremendous advantage to the man who was willing to restrict his tenancy to a number of years. That is his belief. My belief is that that will hardly ever arise, because if this is not done there will not be any more farms to let. That is the whole purpose of my Amendment. If the farms were going to be put up for letting anyhow, then I agree that the man who is willing to restrict his rights would have an advantage over the man who was not. But my belief is—and I seriously think that this is justified—that, with very few exceptions, if Part III of this Bill is agreed in its present form, then there will be virtually no farms to let in Scotland. All the farms which fall in will either be taken over for farming by the owner, increasing multiple farming, or will be sold, increasing owner-occupiership, or some new devices, some kind of partnership, will be set up. I think it a pity that even 35 to 50 or 60 potential new farmers a year should be prevented from having a chance of getting a farm. I think some change on the principle of this Amendment is the only way that you can get that.
There are many of my noble friends and others who have very strongly pressed us to divide against Clause 18, and, indeed, on Part III as a whole, because we believe it is a bad piece of legislation. My own view—I may be wrong—is that it is much more appropriate and sensible to take a Division on a point like this which tries to focus your Lordships' attention on the principal piece of damage which I believe Part III of the Bill will inflict on agriculture and which puts its finger, if I may be allowed to make this claim, on the nub of the question. If passed it would, in spite of Part III, enable some farms to come into the market for letting, which I think most noble Lords would agree would be a good thing. If that were done, our main objection to Part III would be removed.

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I think therefore that this is a much more sensible issue on which to ask your Lordships to express an opinion than to ask the Committee to vote against Part III of the Bill.
5.30 p.m.
LORD HUGHES: I hope that the noble Earl is not pressing the Committee to take this matter to a Division. It is of course his right to do so if he wishes, but I would say with complete certainty, from my knowledge of the discussions which have taken place, that if the Bill were so amended we should certainly have the strongest representations made almost immediately by the Scottish National Farmers' Union against such a proposal. For it would inevitably, in the years ahead, over a long period, deprive farmers of the security of tenure in the farms which they have at the present time.
The noble Earl said that it does not affect anybody with a tenancy at the present time, and that of course is true, because the Amendment relates to any tenancy entered into after the passing of this measure. The point which I have made, and which I wish to re-emphasise, is that if this were done, and if a landlord wished to protect himself against the possibility that a near relative might succeed to the tenancy, it would be virtually impossible for anyone ever to get a tenancy other than for a fixed term of years. That is not a position which has existed in this country for many years.
The noble Earl pointed out that the previous position existed from 1948 to 1958. The Conservative Government came to power in 1951, so that nobody would suggest that in legislating seven years later they had rushed into a change. It could be argued that they had waited a considerable time before they were persuaded that the thing was so wrong that it had to be changed. Similarly, the present Government had representations made to them, as I said on Second Reading, within weeks after coming to power, and we have allowed some three and a half years to elapse before seeking to make a change.
In this clause we have not attempted to put the law back to where it was in 1948. We have taken half the time that the previous Government took to make
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a change, which is perhaps reasonable because we have put the position only halfway back. We are accepting that in 1948 the position had swung too far against the landowner, and therefore we are not putting the position back to what it was in 1948. But I must emphasise that I am quite convinced, from all the discussions (noble Lords will recollect that in my first experience at the Scottish Office agriculture was one of my responsibilities) with the Scottish National Farmers' Union, that if an Amendment of this kind were put into the Bill it would certainly not be acceptable to the Scottish farmers as represented by their farming union. I would not deny that there would be some Scottish farmers who would be in favour of it, but it certainly would not be favoured by the Scottish N.F.U.
THE EARL OF DUNDEE: I assure the noble Lord that my only object is to ensure that there will be some farms to let, and this seems to me the fundamental difference between us. The noble Lord thinks that under the Bill as it stands there will be some new farms to let. There may be two or three, but there will not be 35 to 60; there will be virtually none. Therefore it seems to me that the only way to try to ensure that some new tenants will get a chance of finding a farm to let—which is the basis of my own objection, and the objections of my noble friends, to Part III of the Bill—is to have an Amendment of this kind. If your Lordships are in favour of the Amendment, and I am sorry that the Government are adamant against it, I shall be very willing to consider modifying it at a later stage. If it were not modified, at least we should have done our best to get removed what we believe to be this great potential injury to agriculture. It certainly will not be if nothing on the lines of the Amendment is done.
I am not trying to be unreasonable about this matter. I will gladly consider any modification which might remove or reduce the apprehensions of any farmers in Scotland. But, as I intend the Amendment—and I think this is what it means—no existing tenant farmer in Scotland, or his descendants, will be in any way adversely affected. I would much rather have an expression of

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opinion on this than seek to move that Part III of the Bill be left out, which I think would be the only alternative.
LORD HUGHES: It seems to me that there is one fact which is disregarded. When talking about the 35 to 60 farms which would become available now, the noble Earl speaks as if what the Government were doing would result in these farms ceasing to be let. Every one of these farms will continue to be tenanted farms. The fact that the tenancy is continued to a near relative does not make it cease to be a tenanted farm.
The point which the noble Earl is making is that they will not cease to be tenancies, but will not be available to completely new tenants, to people who are not in the farm at the present time. The noble Earl has given me, as it were, an opportunity of getting off the hook in this matter by promising to consider another form of words. Much as I would wish to persuade the Committee that it would be not only wrong but indeed a foolish thing to seek to amend the law of tenancy in this matter, it would be dishonest were I to attempt to pretend for one moment that anything of this kind would be acceptable. There is no form of words, no change in the period limiting the new tenancies, which would be acceptable to Her Majesty's Government; and while I am anxious that the clause should go through as it stands, I am not prepared to be dishonest in order to get the noble Earl to have another go at it at the next stage.
THE EARL OF DUNDEE: I am glad that the noble Lord, Lord Hughes, has made that additional intervention, because he has now made plain to me that he has not understood the type of farms of which we are thinking. He has not understood what the Amendment is about. He thinks that it will apply to farms where there is an heir, a successor to the lease—
LORD HUGHES: No, I do not think that at all. I know perfectly well that the Amendment of the noble Earl is to apply only to farms which will be let after this legislation comes into operation.
THE EARL OF DUNDEE: And to which there is no heir.
LORD HUGHES: Yes. What I am pointing out is that when the noble Earl talks about 35 to 60 farms he is implying, or it could be taken that he is implying, that the 35 to 60 farms were ceasing to be tenancies. They are not.
LORD DRUMALBYN: But they will.
LORD HUGHES: They are not ceasing to be tenancies. They will continue to be tenanted farms with the tenancy of the successor. They will be tenanted by the near relative. It does not cease to be a tenancy in those circumstances.
THE EARL OF DUNDEE: I must get this clear. The whole point is that in the case of these farms there is no near relative, and that is why they are let. I pointed out in my original remarks that the noble Lord had said—this was the relevance of his Second Reading speech—that there were very few cases in which a landowner did refuse to renew a lease to the son, and therefore these 35 or 60 farms must be very nearly all farms to which there was no heir, farms in which the tenant had either retired or died—
LORD DRUMALBYN: Or near relatives.
THE EARL OF DUNDEE: Or near relatives—not leaving any son or near relative who wished to continue in the farm. That is the whole point. I am suggesting that, instead of asking your Lordships to disagree with the whole of Part III of the Bill, for which there would be a very good case, we should leave the right of existing heirs as the Government propose. If a tenant dies or retires, and has a son to whom he has bequeathed the lease, or a near relative, the near relative should, under this Bill, have the statutory right to succeed and that is what we are proposing. All we are asking is that when there is no heir or near relative—no one who wishes to succeed—there should be freedom to make a new lease, either for the lifetime of the new tenant or for a fixed term of years. My whole argument is that if this is not done, there will not be any farms to let at all.
LORD HUGHES: I think that this discussion could on ad infinitum. I would suggest to the noble Earl that if he feels so strongly about this Amendment that he wishes to press it to a Division, it would perhaps be more appropriate to do

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so on the next stage and to take the opportunity between now and Report stage to have some discussions with the N.F.U., to see how they would react to an Amendment of this kind and find out which of us in this matter is more correctly interpreting the wishes of farmers in Scotland. It would not deprive him of his opportunity, but it might prevent him from dividing without full knowledge of what farmers wish.
THE EARL OF DUNDEE: I have the greatest respect for the N.F.U. and for what farmers wish, but I really must state my belief that in pressing this demand on the Government the N.F.U. Executive are making a mistake which is against the interests of Scottish agriculture. That must be absolutely plain. I know that the Government will not accept my Amendment. If your Lordships think that the Amendment should be inserted, I would certainly consult any farmers whom anybody likes to nominate or who wants to consult me to see if it could be improved. The whole thing I want your Lordships to decide upon is that we should give a chance for more new blood to come into the industry and that more farms, if only a small number, should be available for letting in future.
VISCOUNT STONEHAVEN: The normal procedure of the N.F.U. is that headquarters circularise branches and get their replies before they make up their minds. It is quite impossible to do so on this matter within a week. I know that the suggestion was made in the greatest good faith, but it is entirely impracticable.
THE DUKE OF ATHOLL: May I further say that our branch of the N.F.U. have sent in a resolution that they are against the whole of Part III of the Bill. The way the noble Lord trots out the N.F.U., Scotland, at frequent intervals! Their view is by no means universal. I have heard of two or three branches who also disagree with Part III. While I appreciate the concern of my noble friend Lord Dundee about young men trying to get in as tenant farmers—and this is
one of the main reasons I have against Part III—I think that this Amendment has some danger and I should find myself extremely loth to vote in favour of it.
One thing that has improved farming since the war is that a tenant farmer knows he has security of tenure for life. Except in rare cases, when he knows that he is going to live only so many years, the farmer does not start to run down his farm. If he has a tenancy only for a certain period of years and knows that he will have to go in, say, 1971, there is a real danger that during the last three years of his tenancy he will run the farm not in a way which would do the most long-term good but in a way which would make the most short-term profits. If my noble friend is going to press an Amendment of this sort, I should have preferred that, instead of saying "for a period of years", it said "for the lifetime of the existing tenant".
THE EARL OF DUNDEE: I am quite willing to do that.
THE DUKE OF ATHOLL: I think that that would be more satisfactory and I should find it easier to support an Amendment like that.
LORD BELHAVEN AND STENTON: I agree with my noble friend the Duke of Atholl. I cannot quite understand what the noble Earl, Lord Dundee, means by this Amendment. I am absolutely against Part III of the Bill, but I have looked down the other end of the barrel, as an applicant for a tenancy, and it seems to me that if this Amendment became law any sort of agreement could be forced on a prospective tenant, with regard to rent, upkeep and so on, and immense burdens could be placed upon him.
5.44 p.m.
On Question, Whether the said Amendment (No. 19A) shall be agreed to?
Their Lordships divided: Contents 44, Not-Contents 34.

CONTENTS

Aberdare, L.

Audley, Bs.

Conesford, L.

Aberdeen and Temair, M.

Brooke of Cumnor, L.

Cork and Orrery, E.

Arbuthnott, V.

Carrington, L.

Daventry, V.

Auckland, L.

Colville of Culross, V.

Denham, L. [Teller.]

Derwent, L.

Grimston of Westbury, L.

Mowbray and Stourton, L. [Teller.]

Dilhorne, V.

Haddington, E.

Drumalbyn, L.

Hawke, L.

Nugent of Guildford, L.

Dundee, E.

Horsbrugh, Bs.

Rowallan, L.

Elliot of Harwood, Bs.

Jellicoe, E.

St. Helens, L.

Emmet of Amberley, Bs.

Kinnoull, E.

Sandford, L.

Erroll of Hale, L.

Lambert, V.

Strange, L.

Ferrier, L.

Lothian, M.

Strange of Knokin, Bs.

Fraser of North Cape, L.

Massereene and Ferrard, V.

Teynham, L.

Grenfell, L.

Milverton, L.

Vivian, L.

Gridley, L.

Molson, L.

Woolton, E.

NOT-CONTENTS

Beswick, L.

Hilton of Upton, L. [Teller.]

Royle, L.

Bowles, L.

Hughes, L.

Serota, Bs.

Brockway, L.

Latham, L.

Shackleton, L. (L. Privy Seal.)

Burden, L.

Longford, E.

Shepherd, L.

Champion, L.

McLeavy, L.

Sorensen, L. [Teller.]

Chorley, L.

Mar, E.

Summerskill, Bs.

Donaldson of Kingsbridge, L.

Mitchison, L.

Wells-Pestell, L.

Douglass of Cleveland, L.

Moyle, L.

Willis, L.

Fiske, L.

Phillips, Bs.

Wootton of Abinger, Bs.

Gardiner, L. (L. Chancellor.)

Raglan, L.

Wright of Ashton under Lyne, L.

Garnsworthy, L.

Rhodes, L.

Hall, V.

Rowley, L.

On Question, Amendment agreed to.

Resolved in the affirmative, and Amendment agreed to accordingly.
5.53 p.m.
THE EARL OF DUNDEE THE EARL OF DUNDEE moved, after subsection (6), to insert:
"( ) Notwithstanding anything in this section, where a bequest of a lease fails as a consequence of—

(a) the failure of the legatee to accept the bequest, or

(b) an order by the Land Court terminating the interest of the legatee in the lease under section 20 of the Agricultural Holdings (Scotland) Act 1949,

then the right to succeed shall not fall into intestacy in accordance with the Succession (Scotland) Act 1964, but the interest therein of any member of the family of the deceased tenant shall cease and determine, and any interest in the said lease shall revert to the landlord subject to the executors nominate of the deceased tenant having the right to claim any compensation in terms of the said lease, the Agricultural Holdings (Scotland) Act 1949 or otherwise."
The noble Earl said: As there seemed to be some last minute confusion on the last Amendment, on which your Lordships voted, I should like to say that I certainly intend to put forward on Report an Amendment which will change the character of the Amendment we have just carried, in the sense that I indicated I would do on several occasions during the debate. There was not time to compose a Manuscript Amendment to that effect.
Amendment No. 20 is a legal Amendment whose only purpose is to save time.
It provides that if a legatee fails to accept the bequest of a lease or sale, or if the Land Court terminates the interest of the legatee under Section 20 of the Agricultural Holdings (Scotland) Act 1949, then the interest in the lease should not fall into intestacy. At present the successor is entitled, in spite of any restriction to transfer the interest in the lease to any of the persons entitled. to succeed to the intestate property of the deceased, and that would mean that on the failure of the bequest, or if the Land Court made an order terminating the interest of the legatee, the landlord would have to make a second application to the Land Court to terminate the interest of the member of the tenant's family who had been nominated. I think it desirable not to have this unnecessary repetition of legal business, and I hope that the Government will take that view. I beg to move.
Amendment moved—
Page 17, line 31, at end insert the said subsection.—(The Earl of Dundee.)
LORD HUGHES: Once again the noble Earl, Lord Dundee, has moved an Amendment which I find it quite impossible to accept. Having succeeded in his previous Amendment in completely altering the law of tenancy, he now wishes to alter the law of succession. It was long a provision of that law that on the failure of a bequest a lease should go to the

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"heir-at-law". This was somewhat modified in 1964 in accordance with the general changes being made in the Scottish law of succession; and the position is now that it is for the executor to dispose of the lease by selecting one of the persons entitled to a share of the estate and transferring the lease to him. The practical effect of the Amendment would, therefore, be to deprive the estate of an asset. The basic objection to the proposed Amendment is, therefore, that it would impinge on the general rules of succession which were looked at as recently as 1964. It would, in our view, be wrong to make such changes in the general law of succession in this clause of the Bill, which is aimed at giving greater security of tenure to a limited class of successors.
There is a further objection to the proposal in the effect it would have in connection with holdings on fixed-term leases. That is rather interesting in view of the last Amendment. This would affect particularly those successors to tenancies who are not near relatives as defined in Clause 18 of the Bill. They are still subject to incontestable notices to quit under Section 6(3) of the Act of 1958, but where they are on a fixed-term lease, they are not liable to such notice until the expiry of the lease. The effect of the Amendment would be that any person who might have succeeded on intestacy following failure of a bequest and enjoyed it for the remainder of the period of the lease would not now be entitled to succeed to the lease at all. These seem to me to be two perfectly sound reasons why your Lordships should not accept this Amendment.
THE EARL OF DUNDEE: I had supposed that the only effect of this Amendment would be to avoid redundancy of procedure, but since the noble Lord assures me that this is not so, and that it would make a substantive change in the law, and since my main purpose was to avoid unnecessary legal procedure, I beg beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
6.0 p.m.
THE EARL OF DUNDEE THE EARL OF DUNDEE moved, after subsection (6), to insert:
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"( ) (a) Where on the death of a tenant of an agricultural holding he has failed to dispose of his interest in the lease by will, the provisions of section 16 of the Succession (Scotland) Act 1964 shall not apply to the said lease, and any interest therein of any member of the family of the tenant shall be deemed to cease and determine at the next ensuing term at which it is competent to terminate the said lease tinder section 24 of the Agricultural Holdings (Scotland) Act 1949, and the interest in the said lease shall revert at its termination to the landlord subject to the executor dative of the deceased tenant having the right to claim any compensation in terms of the said lease, the Agricultural Holdings (Scotland) Act 1949 or otherwise;
(b) until such date as the said lease is terminated in accordance with the foregoing subsection, the executor dative of the tenant shall hold the interest in the said lease."
The noble Earl said: This Amendment provides that if a tenant does not make a will the lease should not fall into intestacy but should be dealt with in accordance with Section 16 of the Succession (Scotland) Act 1964. When the National Farmers' Union issued their circular in response to which this part of the Bill was introduced, all they were asking for was that a competent son to whom the lease was bequeathed should have the right to succeed, and with the provisions of the Agricultural Holdings (Scotland) Act and the Succession (Scotland) Act as they stand on intestacy, in my view the lease will devolve far beyond the competent son with whose interests the N.F.U. are primarily concerned.
I await what the noble Lord has to say about this, but my information is that awkward conditions might arise under the law of intestacy in Scotland if this provision was not made. All that the sub-section is intended to do is to cover the position where the lease still has a period of years to run. I beg to move.
Amendment moved—
Page 17, line 31, at end insert the said subsection.—(The Earl of Dundee.)
LORD HUGHES: Once again the noble Earl has moved an Amendment which would alter the law of succession in Scotland as enacted as recently as 1964. He has pointed out that when the National Farmers' Union made their representations for restriction of the landlord's right to serve an incontestable notice to quit under Section 6(3) of the Agriculture Act 1958, they asked only that the right should not apply where the deceased tenant has bequeathed the interest in the

735
holding to his son, and they did not ask that the protection should extend to cases where the successor inherited, following intestacy.
It would be difficult to draw a distinction between a case where a son or other relative has inherited on bequest and one where he has inherited following intestacy. This might introduce an unfair discrimination between two equally competent successors, in one case where the father had made a will, and in the other case where the father had not. We know perfectly well that there are many cases where grave consequences arise simply because someone who ought to have made a will has not done so. We might take the case of two sons with a right to succeed, possibly on farms that were near each other: in one case where the father had made a will the son would succeed to the farm, and in the other case, where the father had perhaps even been run over on his way to the lawyers to make a will, the son would have no right to succeed. But we must go further, and remember that although the lease may, following intestacy, devolve on one of a number of members of the family, the protection to be afforded by this part of the Bill will only apply to the near relatives of a deceased tenant. The landlord will not lose his right to give an incontestable notice to quit to any other successor to a holding.
The Amendment seems to propose that where a lease has a period to run, it would not immediately revert to the landlord (on the lines proposed in the previous Amendment) but would be held by the executor until the period of the lease expired. This seems to us to be objectionable on the grounds that the executor's duty is merely to administer the estate of the deceased person until it is distributed, not to carry on the lease of a farm for the remainder of its term. In any case this is likely to be a task for which the executor may have no skill at all. Our main objection, however, is on the more general ground that the normal law of intestate succession as enacted by Parliament in 1964 should apply to these leases as to other assets of the deceased tenant—and we must remember that under the law as it stands the lease is an asset of the deceased's estate—and it would be quite wrong to amend the gen-
736
eral law on succession by such an Amendment to this clause. Once again I must say as strongly as I can that this is an Amendment which Her Majesty's Government find quite unacceptable.
THE EARL OF DUNDEE: I cannot quite agree with the noble Lord's explanation of this. I understood that under the 1964 Act a lease was not inheritable under intestacy, and I am not convinced that there would be anything objectionable in the executors having to carry on, which I thought would be necessary. It is not a thing I was advocating, but I thought it would be a necessary effect of the law. I had not intended this Amendment to be a contentious one, and since I have no doubt the noble Lord has obtained the advice of the Law Officers I will not press it.
THE DUKE OF ATHOLL: Before my noble friend withdraws this Amendment, I should like to say that I am slightly worried that there could be cases of intestacy where a tenant farm would then be run down because there would be no certainty as to the identity of the heir. I frankly admit that I do not know or understand the Succession (Scotland) Act 1964, but could the noble Lord, Lord Hughes, explain to us—if not now, before the next stage of the Bill—exactly how it will work when a lease falls into intestacy and where it is contested between the relatives who should inherit the lease? Obviously if the farmer has made a will he will presumably have left the farm to one or other of his children, but, as I understand the position, if he has not made a will the law of primogeniture is not now in force in Scotland and all his children will have equal rights in his estate. This seems to me to be wholly undesirable where farm leases are concerned, and even farm stock and implements. In the case of farm leases I should have thought it was also highly impracticable unless the children agreed to farm in partnership, but then in many cases they might not get on very well and the last thing they would want to do would be to farm in partnership. I think possibly some Amendment could be introduced at a future stage of this Bill.
LORD BURTON: While agreeing with most of what my noble friend has just said, I believe the lease does in fact pass

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to one of the children but all the rest of the property would be divided between them. The financial implications could be severe, and particularly in view of the fact that the noble Lord, Lord Hughes, would not accept my previous Amendment I think it is important that this Amendment should be looked at again.
LORD HUGHES: The last thing I would pretend to be is knowledgeable on the law of succession in Scotland, but I do know that if there are a number of children with equal rights—the noble Duke is right when he says the law of primogeniture no longer applies and that all children have equal rights in the farm; there is no question of argument about it, and in those circumstances the executor has to choose one of the people with equal rights who will carry on the farm. That is the position, but I think it would be better if the noble Duke and the noble Lord, Lord Burton, and the noble Earl, Lord Dundee, received from me before the next stage an explanation which was vetted by the legal officers as to just exactly how this works. If then they, or any of them, felt it was necessary to pursue the matter in the light of that information, they could do so. I would certainly undertake to ensure that such a letter was in their hands in time for them to table an Amendment for the next stage.
THE DUKE OF ATHOLL: May I put one further point, so that the noble Lord can cover this, too, in his letter? It is this. The executor can appoint one of the children to inherit the lease, but can he appoint the same child (it seems only logical that he could, but we know that the law is not necessarily always logical) to inherit the live and dead stock; and if so what compensation does that child have to give to the others who are definitely losing something—and probably quite a lot—by not being able to inherit their share? Is it not unfair, if we accept the principles of Part III of this Bill, that because a father has left no lease the son (there may be only one son interested in farming) who would like to continue with the farm should be put in an extremely difficult position?—because presumably he would have to make financial compensation to the brothers and sisters. He might not be able to do that, and that fact might
738
make him unacceptable to the Land Court if it had to take into consideration the financial circumstances.
LORD HUGHES: This is a somewhat difficult subject, and the one thing I am certain about is that the other children are not deprived of their share of the estate. It follows that there has to be an arrangement: if one gets the farm, the others must get compensation. This might create circumstances in which none of the family is able to go on because one cannot buy out the others. I am giving off the cuff my impression of what I was told a very long time ago, and it may well be that it is not completely accurate; so it would be better if this were taken to be my view of what the law is, rather than what I know the law is. But I will write to the noble Lords concerned giving them a proper statement of what the lawyers know the law to be.
THE EARL OF DUNDEE: I am very grateful to the noble Lord for saying what he has said, because I am certainly not satisfied that this clause as it stands would not result in various inconveniences and anomalies which we all with to avoid. I am grateful to the noble Lord for saying that he will look into it and let us know the result. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
6.14 p.m.
TILE EARL OF DUNDEE TILE EARL OF DUNDEE moved, after subsection (6), to insert:
"( ) Where the successor to the lease of an agricultural holding, being a relative of the deceased tenant of the holding, is the owner or occupier of another holding which in the opinion of the Court is an agricultural unit which is capable of providing full-time employment for an individual occupying it and for at least one other man, the provisions of subsection (1) of this section shall not apply and such successor shall for the purposes of this section be deemed not to be a near relative of the deceased tenant and accordingly the provisions of the said subsection (1) and of section 19 of this Act shall not apply to a notice to quit served on such successor."
The noble Earl said: I am glad to say that this Amendment, so far as I know, does not involve any legal complications, and I think it is concerned with a very simple point: whether the right of statutory hereditary succession to a lease should apply to multiple farmers as well as to farmers who have a tenancy

739
of a single farm. I think it would be unfair if a farming family were given the right to inherit multiple tenancies. An Amendment to this effect was moved in another place, but it contained no definition of the size of the holding owned or occupied by the successor to the lease of another farm that would disqualify him from having a statutory right to succeed to both. My Amendment—and I shall be glad to alter it if the principle is accepted, and there are objections to the wording—provides that before an incontestable notice to quit could be served on the successor to the lease who already owned or occupied another farm, this farm would have to be above the test for amalgamation laid down in the Agriculture Act and repeated again in this Act; that is to say, his farm would have to be large enough to employ more than one man and would have to be considered to be a viable holding. I hope that the Government will favourably consider the principle of this Amendment. I beg to move.
Amendment moved—
Page 17, line 31, at end insert the said subsection.—(The Earl of Dundee.)
LORD HUGHES: I have listened to what the noble Earl, Lord Dundee, has said in favour of his Amendment, and I must admit that there is an argument. But I am afraid that the Amendment as it stands is not acceptable. In the first place, as drafted the Amendment would apply to someone who owned another farm even if he did not occupy it and was unlikely to be able to obtain possession of it. There is a further possible difficulty where someone succeeded on the death of a tenant to more than one farm at the same time. These farms might be owned by different landlords. I think these would have to be excluded. Otherwise, the Land Court would be put in the difficult position of deciding which farm the successor was to be allowed to keep. I agree that there is merit in the proposal put forward by the noble Earl, and if he will withdraw the Amendment I am prepared to put down a further Amendment on similar lines to this but in terms which the Government find acceptable. I will consult the noble Earl before actually tabling the Amendment to see whether we are equally agreed on its acceptability. I am afraid that I am not going to be
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able to go through the whole of the Amendments without being willing to concede something.
THE EARL OF DUNDEE: I had suspected that my draft might not perhaps have reached that flawless degree of perfection which we all desire to attain, but I am very grateful to the noble Lord for saying he will re-write it in a form which would avoid the difficulties he has mentioned.
LORD HUGHES: I will not re-write it, but I will have it re-written.
THE EARL OF DUNDEE: I am sure the noble Lord would do it very well. But on that assurance, I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
6.18 p.m.
THE DUKE OF ATHOLL THE DUKE OF ATHOLL moved, in subsection (7), to leave out "surviving spouse". The noble Duke said: For the moment, for the purposes of this argument I should like the noble Lord, Lord Hughes, to imagine that I am prepared to accept the principle of Part III of this Bill. But what I find more difficult to accept is the fact that the surviving spouse is included among those near relatives, because in many cases the widow of the farmer is probably a very bad farmer. My experience of tenant farmers is that on the whole their wives take no interest in the farm at all. There are, of course, many exceptions, but wives usually take no interest in the farm at all; therefore, under Clause 18(2)(a), they would not be a fit person in the opinion of the Land Court to inherit the tenancy of the lease.
This would have the effect that the landlord could get them turned out and serve an incontestable notice to quit when the lease ended. The widow might have a son or daughter who would be a perfectly adequate and good tenant but unfortunately did not inherit his father's tenancy because the father left the lease to his widow and not to the son or daughter. That would be a great pity, because we are all agreed, I think, that wherever possible it is desirable that the child should succeed to the lease: but I do not think any landlord is going to risk having the farm badly farmed by a widow for many years when the

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son or daughter may not get on particularly well with his or her mother. Therefore landlords are bound to try to get an incontestable notice to quit to the widow. I should have thought, therefore, that in the interests of fairness the surviving spouse ought to have been excluded from the term "near relation", in order to make sure that the children of the marriage have their fair chance.
There is a second point: that if the widow or the surviving spouse inherits there is a real danger that double death duties will have to be paid; and for both tenant and landlord that would make (farming more difficult, because it is taking more capital out of the farm. I can assure your Lordships that nowadays it is extremely hard to save much money from farming. certainly in the Highlands and more marginal areas of Scotland; and to have to pay two lots of death duties before the son or daughter succeeds to the tenancy would almost certainly mean that the children would not be able to continue with the farm.
There is, of course, the danger that the father may leave his lease to his wife because he is frightened that if he does not do so she might be turned out of the family home, and to leave the livestock and deadstock, on which death duties would obviously hit much harder, to the children. I fully appreciate that my Amendment is probably deficient here. I feel that the widow ought to be given some rights in the family home; but I am not sure that this is not already covered, because I seem to remember that, not so long ago a Bill went through which enabled widows of tenants to live on in a house for the duration of their lifetime. I am not sure about that, and perhaps the noble Lord opposite could confirm or deny whether it applies to agricultural tenancies or farmhouses or only to houses in urban areas and houses that were not let with any land.
For all these reasons I should be much happier if the surviving spouse were excluded from the list of near relations. I should have thought it was only fair to the children of the family that the surviving spouse should be excluded. I also think that the N.F.U. of Scotland, if they have any feelings about this matter, would probably be on my side and not that of the Government as the
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Bill is drafted at the moment. I beg to move.
Amendment moved—
Page 17, line 33, leave out ("surviving spouse").—(The Duke of Atholl.)
BARONESS EMMET OF AMBERLEY: I must add a word of protest at the speech just made by the noble Duke. I was left a widow and the farm, and I think I was a perfectly successful farmer. What is more, it would. not at that stage have been any good leaving it to the children because they were too young to take it. That is exactly why I was left the farm. There are many spouses of farmers who know a great deal about farming and are left the land by their husbands because their husbands trust them to be good farmers and to preserve the farm for the children when they are old enough. I think the speech of the noble Duke is based on a total misapprehension of the testamentary will of the person involved, who would surely not leave his property to his spouse unless he had perfect confidence n her being able to carry on.
THE DUKE OF ATHOLL: Surely, if the lease or the farm, in the case of my noble friend, had been left to her children, she would have been able to farm it as their trustee. This would be much more satisfactory. It would save a lot of death duties; and in the event of my noble friend and her children not getting on later in life the children would have the farm.
BARONESS EMMET OF AMBERLEY: May I reply to that. There is no reason to suppose that the mother and her children do not get on. In this case as soon as my son was old enough to take over the farm I handed it over to him. The whole process is perfectly simple. I think you should not put yourself in the position of a farmer who makes a will in favour of his wife and say that he is making a bad judgment.
LORD BOOTHBY: I would say only one word: that I am deeply shocked and dismayed, and almost stunned, by the suggestion of the noble Duke that the spouses of husbands who are dead cannot farm. To add a grist to the mill, the noble Duke said that farmers' widows do not get on with their children anyway. I have no reason to suppose that either

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of those suggestions is true at all. I know many widows, including the noble Baroness who is sitting not far away from me, who are extremely good farmers and perform their job in a first-class fashion. And I see no reason to believe that Scottish parents and children necessarily dislike each other. Therefore I hope that the Government will pay no attention to this Amendment.
VISCOUNT MASSEREENE AND FERRARD: I do not quite hold with the noble Duke in this Amendment, but I have some sympathy for it; and I should feel far happier in regard to the surviving spouse if there were some such arrangement as arises in Amendment No. 27, that the landlord would agree to let to the widow her farmhouse for a certain period or for her life. I quite agree with the noble Baroness behind me that some women are excellent farmers and know a great deal about farming. I feel that it would be wrong if when the farmer died his wife could just be turned out. That never happens, anyway, under an hereditary landlord, who is usually most kind to wives and often finds them alternative accommodation if they cannot stay on the farm. I really think that this Amendment is rather unnecessary.
LORD BURTON: I am a little drawn on this because I think there is a real risk of a widow staying on in the house for the sake of keeping the house, rather than wanting to farm the farm.
LORD HUGHES: I am tempted to say that I am prepared to let the matter rest on what has already been said against this Amendment by those who normally support the noble Duke. In this case it is perhaps the bachelor who is speaking rather than the knowledgeable landowner or farmer. I have noticed that when the noble Duke is speaking he keeps his eye firmly fixed on me during the whole of his remarks. This is normally a quite admirable trait. In this case, it was a perfectly satisfactory defensive mechanism, because if he had allowed his eyes to wander momentarily either to the left or to the right I think he might have faltered somewhat in his remarks, looking at either of the two noble Baronesses. It must have been
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a great relief to him that, looking straight at me, he did not have my noble friend Baroness Summerskill behind me, for I am quite certain we should have had her intervening, possibly for the first time in history, on a Scottish agricultural subject. I think this is not an Amendment which has merit, but I must answer the question which the noble Duke put about the position of the widow. Incidentally, we must remember that in strict terms of the law "the widow" also includes a widower. There may even be cases where the efficient farmer is a woman, and leaves as her surviving spouse a husband who would be an inefficient farmer. However, under Section 8 of the 1964 Succession (Scotland) Act the widow has a prior right in the dwelling house on intestacy, but this does not apply to a house forming part of tenanted subjects. In that case she gets an equivalent in cash of the value.
There is another point about death duties, but I do not think this is a serious issue in this particular case and I will not take up your Lordships' time on it. But we think this is a case where the widow or widower should be an exactly the same basis as the children. She or he may not be a satisfactory farmer, but if they are not, there is provision under the law as it stands to seek to serve an incontestable notice to quit. I do not think it would be right to proceed to alter the law on an assumption which, as I think has already been proved this evening, is ill-founded.
THE DUKE OF ATHOLL: I should just like to point out that I had no intention of implying—in fact, I am sure I did not suggest it in my original speech—that no widow or widower was capable of farming when their spouse was the original tenant. Nor did I intend to imply that Scottish children and their parents never got on together. I do not think that is true at all. In the majority of cases they probably get on extremely well. I still believe that the Bill as drafted may lead to trouble in a minority of cases, but since I am hopelessly outvoted I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
6.31 p.m.
VISCOUNT MASSERENE AND FERRARD VISCOUNT MASSERENE AND FERRARD moved to add to subsection (8):
"made when the son or daughter was under the age of six."
The noble Viscount said: In putting down this Amendment I am merely seeking to prevent a malpractice which might occur with regard to the adoption of a son or daughter by a childless tenant. After all, we have enough malpractices to-day without trying to create any more. As the Bill is drafted, there is really nothing to prevent a tenant from accepting a sum of money from an adult provided that he adopts him so that the adult can then succeed to the tenancy. We must remember that what Her Majesty's Government are doing in this Bill is creating freeholds for tenants. We have heard that farms are going to be in very short supply and many people may become desperate to obtain a farm. When some people get desperate—not all people, I am glad to say—they will certainly stoop to some rather sharp practice. For instance, a tenant might even adopt his mistress—it may sound very far-fetched but it could happen under this Bill—so that she could succeed to the tenancy.
I have every admiration for genuine adoption, and anything I say on this question casts no aspersion on genuine adoption. I have chosen the age of under six for adoption because the majority of children are adopted under the age of six. True enough, we are told that the age of reason is seven, but I much doubt that myself. Certainly, it was not my age of reason. I am not adamant about the age, but I should like Her Majesty's Government to try to ensure that under this Bill a tenant cannot adopt an adult for monetary gain. I should also like to reiterate that I have every sympathy for childless couples who want to adopt children and have children around the house. But I really hope that Her Majesty's Government can put something into this Bill to the effect that a tenant cannot adopt an adult, or even his mistress, for what I can only describe as a nefarious purpose from the point of view of the person he is adopting. I beg to move.
Amendment moved—
Page 17, line 40, at end insert ("made when the son or daughter was under the age of six.").—(Viscount Masserene and Ferrard.)
LORD STRATHCLYDE: I should like to support the noble Viscount in this Amendment. The law being as it is, I do not think anyone could take exception to a child who had been adopted within a few years of birth succeeding to the tenancy because, after all, that child would consequently have been brought up as a member of the family and would have known no other family all its life. But, as the noble Viscount has suggested, there might well be a fear that for monetary gain someone might adopt the son of, perhaps, a friend or someone of that nature. I can well realise that some old farmer, not having anyone to succeed him, might for a consideration which would leave him in better circumstances in his old age adopt a son of a friend to succeed him in the tenancy. Therefore, I hope that the noble Lord, Lord Hughes, may feel inclined to look further into the matter.
VISCOUNT STONEHAVEN: I support the main part of the Amendment, but I just want to remark that it would probably be far simpler, and would certainly be far more moral, to marry your mistress and let her become a widow.
LORD HUGHES: The last comment of the noble Viscount, Lord Stonehaven, is certainly good advice, because if a man wants his mistress to get the farm he certainly cannot go ahead and adopt her, because the law will not allow him to do that. A male cannot adopt a female except in very special circumstances, and I doubt whether it could be argued that a mistress was a special case. In these Scottish debates we seem to get into the most fanciful situations. I remember that on a previous occasion the suggestion was made that certain Scottish Peers would be so anxious to prevent their nephews or 42nd cousins from succeeding to a title that they would look around for an attractive, or otherwise, widow who had a son who would then succeed to the title, the Peer claiming that it was really his son and that he wished at long last to right a wrong. Now we have the suggestion that the farmers are to join the Scottish Peers in going around Scotland doing the most nefarious things, in this case not to spite a relative but to spite a landowner. Really, I do not think that the Scottish farmers are any worse in this respect than the Scottish Peers, and I do not think that is a likely circumstance at all.

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What I must point out is that under the law in Scotland an adopted child has to be treated in every way exactly as another child and as a natural child—a child born of the parents. It has the same rights. In that case, therefore, an adopted son or daughter may succeed to the tenancy of an agricultural holding. If the Amendment were carried it would provide that the adopted child would not have the protection of Clause 18 if the adoption order had been made when the child was six or over. As the law stands, a child may be adopted up to the age of 21, and the Amendment would have the effect that children who were not adopted before they were six would not be classed as near relatives for the purposes of this Part of the Bill, and so would not be protected from dispossession. The Amendment is therefore quite contrary to the tenor of the present law.
I would point out that there are two safeguards. In the unlikely event of somebody wishing to do these extraordinary things the landlord may seek the consent of the Land Court to dispossess him, either on grounds of general unsuitability—he may do this under the Agricultural Holdings (Scotland) Act 1949—or under the specific provisions we have made in this Bill if the tenant has neither adequate training nor experience.
If I may go back to this unlikely event, this mythical farmer who is so determined to spite the landowner that he will search round for somebody to adopt, I must admit that the much more possible likelihood is that he does it not to spite the landlord, which was the suggestion made by the noble Lord, Lord Strathclyde, but perhaps because he sees a nice way of making a bit of money by selling his right of tenancy to someone. I must admit that that is perhaps not quite so unlikely as the other aspect. But there is a safeguard here. The implication in this is that it is much more likely to be an older person who is being adopted in these circumstances, although not necessarily so. But we must remember that before an adoption order is made the sheriff or the Court of Session have to be satisfied that it will be for the welfare of the adopted child, and we are quite certain that in a case of this kind such an obviously bad reason would be very diffi-
748
cult to suppress from the knowledge of the court.
We think, therefore, that the law as it stands provides all the protection that is necessary against the hypothetical cases that we have been asked to consider, and I suggest to your Lordships that there is no reason why in this case we should alter the legal position of adopted children, as suggested by this Amendment.
THE EARL OF DUNDEE: If an adopted son or daughter has the same legal rights as a natural son or daughter, is it necessary to specify adopted children at all in legislation of this kind?
LORD HUGHES: I must admit that that was the first thought that I had: that if they all had the same rights and we just said "a child" it would cover it. I should like to go further into that, because that thought occurred to me only at the last minute and I have not had an opportunity of finding out about it. But I think I should be unwilling to take out the words now, because we have this difficulty. If the Bill starts off with the provision regarding an adopted child in it and that is subsequently taken out, it might not be perfectly obvious that it had not been taken out for the reasons that the description "child" included an adopted child. I think the fact that it is now in is probably as good a reason as any for its remaining in. What we are quite certain about is that we are not prepared to accept a position where in this case, and in this case alone, an adopted child is not going to have the same rights as any other child. But I will, for the noble Earl's satisfaction, make inquiries as to why it was found necessary to include these words in this particular Bill, and I will certainly write and let him know the reasons that the draftsman found for putting these words in.
LORD BURTON: There is quite a considerable market already in the assignment of crofts, and I think it would be a great pity if, by this clause, there was a market in adoption added to this.
LORD HUGHES: There was a great deal of worry about the inability of all these young men who had acquired agricultural degrees not being able to get a tenancy. This might provide an opening for some of them.
THE DUKE OF ATHOLL: One of the reasons the noble Lord gave for being satisfied that this would not be abused was that the sheriff had to be satisfied that the adopted child would benefit (I think that was the implication) by being adopted by the parents who wished to adopt him. Surely it is going to be very difficult for a sheriff, when this great benefit is pointed out to him—that he will then succeed to the tenancy of a farm which he would certainly have very little hope of getting in any other way when Part III of this Bill comes into force—not to find that it would be of benefit to him to be adopted by these particular parents. I do not think Her Majesty's Government want children or near-adults to be adopted all over the place just so that they can succeed to farm tenancies.
LORD HUGHES: But the noble Duke will remember that on previous Amendments he pointed out the great hardship it would be for someone who did not have farming knowledge to succeed to a farm which might well be just a mill-stone round his neck. So the man who wished to do this would have to be very careful in the person he proposed to adopt. He would have to adopt somebody who was likely to make an efficient farmer, and that might not always be so easy when he had to find somebody who was under the age of 21.
THE DUKE OF ATHOLL: I am being serious about this, because I think it is a danger. Surely the person under the age of 21 would come to him and say, "I am 20; I have a sound knowledge of farming, having been to an agricultural college; I see little hope of getting a farm in any other way; you have no children; would you please adopt me?". I do not think this is beyond the bounds of possibility, and I cannot see why it would hurt to put in my noble friend's suggestion, or something equivalent to it, other than the fact that it would be depriving adopted children of a right which, were this not in, they would have had. But I am sure it is a right that no one would consider was reasonable.
LORD HUGHES: Let us look at the position which might exist. I do not know how many farmers there are at present who have adopted children. I know still
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less how many there are who adopted a child after it had attained the age, of 6. But let us assume for one moment that there is a farmer who, many years ago, adopted a child at the age of 8. That child is no longer a child; it is grown up. He is taking exactly the same part in a family as if he had been the true son of his adoptive father. If the Amendment is accepted, that man is going to be told, "It does not matter how efficient you are; it does not matter how reasonable a successor you may be; you have no rights in the matter because you were over the age of 6 when you were adopted". And it does not matter what age you substitute for the age of 6; this is still going to apply.
Now if the clause is altered and this is going to be the position only afterwards instead of the position at de present time, you merely substitute one injustice for another. Why, in the future, should it be wrong for somebody who was adopted at the age of 8 to be deprived of rights which he has under the general law and which he would have had if he had been adopted at the age of 4? I must admit that I have no knowledge at all about the statistics of adoption, and perhaps the one point which is in favour of the Amendment of the noble Viscount, Lord Massereene and Ferrard, is that probably the great majority of adoptions are adoptions of infants. So it might well be that his age of 6 would cover most of the adoptions. I think I must be fair and concede that that is the likely position. But I do not know. If that is the case, then obviously I will make it much more difficult to persuade a sheriff that the sudden adoption of a 20-year-old man who has acquired an agricultural degree and who has not previously had any connection at all with the farmer is the sort of adoption order which he ought to make. We mug deal with probabilities, and not with fanciful possibilities.
What your Lordships are being invited to do is to alter a law which has been specifically placed on the Statute Book to make quite certain that an adopted child and a naturally-born child of a marriage are exactly on a par. In this Amendment we are seeking, once again, to differentiate between them. This is planning for something which might not arise. I cannot accept this contention.
VISCOUNT MASSEREENE AND FERRARD: When I moved the Amendment I dealt with the question of the age and said that I was not adamant about the age of 6. I do feel, however, that there should be some age limit. As the noble Duke has pointed out, a young man of 21 could be involved. I am sure that this will lead to malpractice. This legislation will make farms rarer than gold in Scotland. They will be the most sought after articles in the country. When one gets that, one is bound to get what I can only describe as "hokey-pokey" financial goings-on. I feel very worried about this, and I hope that the Government can produce something on Report to quell our fears. The noble Lord, Lord Hughes, appears to have a very angelic idea of human nature. I have been brought up in a hard school, and do not have such an angelic frame of mind. Having said that, I beg to ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
6.52 p.m.
On Question, Whether Clause 18, as amended, shall stand part of the Bill?
THE DUKE OF BUCCLEUCH AND QUEENSBERRY: Many weaknesses in Clause 18 and Part III have been dealt with. It has been fully demonstrated that they go further than is wise. As a landowner I declare an interest, and I also have an interest to have good farmers as tenants. I am a member and supporter of the National Farmers' Union of Scotland and I want to avoid and reduce controversy between farmers and landowners. This clause implies that a much worse situation exists than is true. It implies a situation between tenants and owners which is contrary to the rule. With that sort of background it could be thought that landowners want to change their tenants and families in their farms. This is not so. Between the majority of tenant farmers and owners there is, and always should be, a mutual confidence and co-operation. The Secretary of State would be very wise to modify this Bill and to keep it within the request from the Scottish Farmers' Union.
I have probably a longer experience than most of this problem, both in Parliament and during my period of responsibility for a number of let farms. In matters of succession and security of
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tenure I have always considered that legislating in Parliament with complete fairness for both sides is not really possible. There is another interest involved in obtaining the most competent farmer, and that is the national interest. That should perhaps be the principal factor. This is what is foremost in the minds of landowners in Britain when letting farms. It is always hoped that sons or daughters will have the same qualities as their parents and, with experience, will become even better and able to take over the farms in their turn. It is recognized—I emphasise this—that it is only very exceptionally that a deserving successor in the same family is turned away. Like many other landowners, we are proud and fortunate to have families who have been on their farms for 200 years or more. This is a tradition which landowners like to achieve.
I was very pleased to note that incoming tenant farmers who may be short of cash would be helped. This is a tribute to landowners and bankers for the way in which they have always tried to help good farmers. As these clauses stand, although they seek to promote social justice, they will really do more harm than good, and that is why I hope the noble Lord will persuade the Secretary of State to modify them. I find amendment very difficult, and the debate has shown how difficult it is to amend a Bill of this sort in which there is one principle and that is a principle which can be better looked after between landowners and tenant farmers.
The noble Lord, Lord Hughes, said that if landowners were not satisfied with successors to leases they could go to the Land Court. He would agree that there is a reluctance on the part of landowners to have to denounce in a court of law as not being competent to run the farm the son or daughter of one of their tenant farmers. Whichever side is favoured by the law, tenant and landowner will have to get on with the job together. This, I hope, is what will happen. Although the trend must be in the direction stated by noble Lords to-day, I hope that it will not be too bad. In conclusion, let me say that the farmers for whom we should feel sorry are those with too little cash and land to make a living and who are working very hard on an uphill economic struggle.
THE EARL OF DUNDEE: I am grateful to the noble Duke for his observations on this clause. I do not propose to add anything, because I have already said in moving an earlier Amendment what I would have said now. I am glad that the noble Duke has made it clear, as I tried to do, that normal Scottish landowners desire and welcome hereditary succession in farm leases, over 200 years as he said, or for many generations.
I also hope that the Government will take note of what he has said about the undesirability of making too much use of the Land Court. No one wants to be continually going to court over matters which ought to be decided outside court. To be realistic about the Scottish Land Court, although it now has the most admirable and excellent chairman, it will take some time for it to recover public esteem, in view of the history of the last ten years when the late Lord Gibson was chairman. I wish his memory well, I was very fond of him in the House of Commons, but when he was chairman the court became rather a sad joke. Lord Gibson was publicly and officially rebuked by the Lord President of the Court of Session for unjudicial conduct, and he reacted to this by publishing a message in the newspapers addressed to all tenant farmers, telling them that they must not lose heart, because in spite of his official rebuke he would carry on and look after their interests as he had always done. Then one felt that comic opera had really and truly entered our judicial system in Scotland. It takes a very long time for a court of justice to recover its esteem and, what is equally important, the confidence of those who may have appeals to submit to it. I hope, therefore, that everything will be done to minimise the need for litigation and appeals to the Land Court in connection with the Bill.
7.0 p.m.
LORD STRATHCLYDE: I really cannot find any justification for this change in the law. It certainly is not a measure which will in any way help to improve the efficiency or the productivity of agriculture. It may, however, tend to disrupt the partnership of landowner and tenant to which the noble Duke has referred and which has proved itself over so many generations as serving agriculture and the
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country very well indeed. The noble Lord, Lord Hughes, when concluding his speech on Second Reading, said (here I paraphrase) that he was certain that good will on both sides would be forthcoming. The interest of landowner and tenant are one and the same. The partnership into which they enter, they enter of their own free will. Consequently, much good will and co-operation is created between them.
Forced marriages, I have heard, lack much of the warmth, consideration and depth of understanding which is to be found in a natural union. Seldom are they happy. I can find no reason why such a marriage should be forced on this great industry, and I sincerely hope that the noble Lord and his right honourable friend may yet reconsider this part of the Bill.
LORD HUGHES: The noble Lord, Lord Strathclyde, did not indicate when he had stopped quoting me, and I became alarmed because I thought that my memory was completely going. I could not remember some of the things that he was saying. I then realised that the noble Lord was going on to his own thoughts. I appreciate very much what the noble Duke, the Duke of Buccleuch, has said on this matter. I cannot dissent in any way from the opinions which he has expressed about the great majority of landlords and the great majority of tenants, because what he has said is undoubtedly true. The Government however, have been asked to act in this matter because not all landlords are, if I may quote the noble Viscount, Lord Massereene and Ferrard, of the angelic disposition which he thought that I had attained. Incidentally, I must say how grateful I am that one angelic may be considered to cancel out two offensives. The fact is that not all landlords and not all tenants are necessarily as good as they might be. Even though we concede that the overwhelming majority are entirely satisfactory, that does not absolve the Government from resonsibility to act in cases in which it has been demonstrated that injustice has been perpetrated, by reason of the law as it stands.
I remind your Lordships of the law which we are seeking to alter. At the present time, under the 1958 Act, a landowner can give an incontestable notice to quit and is under no obligation to specify any reason for giving it. This

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is where the difficulty arises. If a landlord has a good reason for giving notice to quit, he would be very likely to succeed in it in the Land Court. After all, in cases where a landlord has an exceedingly good reason for giving a notice to quit, he would probably state it. Where he does not have a good reason for giving such a notice, however, he would not state it. That is exactly the sort of case in which the Land Court would not allow a notice to be given.
LORD STRATHCLYDE: Can the noble Lord tell us why a landlord should serve a notice to quit when he has only a bad reason? I cannot think what a bad reason would be.
LORD HUGHES: It would, perhaps, be wrong of me at this stage in the proceedings to quote the sort of cases, to which reference was made in another place, which caused at least one Member of Parliament to seek to have the law altered because of a notice to quit which had been issued in a certain case. If the noble Lord, Lord Strathclyde, is not aware of it, I will be quite happy that he and I should use our own time privately for me to let him know it rather than that I should use the time of your Lordships' House. Such cases, however, exist.
LORD STRATHCLYDE: I thank the noble Lord.
LORD HUGHES: It is because of recent cases that pressure on the Government was intensified. We think that it is reasonable that the law should be altered in such a way as to protect a tenant from improper behaviour by a landlord and, at the same time, to place alongside that protection such conditions as enable a landlord who has a good reason for giving a notice to quit to be able to succeed. We have spent a long time in working out exactly where the line should be drawn. I must admit that this is the sort of subject upon which we will never be able to produce anything that will receive the agreement of all landowners and all tenants. I doubt very much whether we should even be able to produce something which could at the same time receive the support of a majority of landowners and the support of a majority of tenants. There are
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circumstances when the views can be so extremely different that reconciliation of them is impossible. In the clause, therefore, the Government have tried to draw the line in a reasonable way.
One of the difficulties of this matter is that those landowners who have always acted in a completely reasonable fashion—and I hope that I do not embarrass the noble Duke by saying that he is an obvious example of that kind—find it difficult to comprehend why anything of this nature should be necessary, because the sort of case which has given rise to this legislation or has made the necessity for it urgent is the sort of action which it would never for one moment occur to him to undertake. The probability is that many more landowners are in exactly the same position. They would never understand why anybody wanted to do that sort of thing. The fact remains, however, that under the existing law, it can be done. Unless we alter the law, we do not know how often it may be done in the future.
The obvious thing for the Government to do is so to alter the law that reasonable landowners are protected against unreasonable tenants and reasonable tenants are protected against unreasonable landowners. That is what we think we have done in the Bill. With such a difficult subject, however, it is impossible for anybody to give a guarantee that if a line is drawn at a certain point, that must inevitably be the only right place at which it can be drawn. We have done it in the way we propose in the Bill. In the one case in which I have so far seen merit in an Amendment, I have accepted it. That is as far as we can go.
I am well aware that what the noble Duke has said is undoubtedly applicable to the vast majority of landowners in Scotland. If he had been able to say, and I had been able to accept, that there was no case in Scotland where a landowner would do the sort of things against which we are seeking protection, the Bill would not have been here. It is because that is not the fact that the Bill is here.
LORD BURTON: May I answer the noble Lord? I believe that the case in mind is not many miles from where I live, in Inverness-shire. It is quite obvious that he has been misled. Perhaps I

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might point out that the landlord was not at all unreasonable. There were very much two sides to the story. One side was canvassed, and obviously canvassed extensively. If all this legislation has been brought about by this one case then it is time the clause was dropped.
LORD HUGHES: I think I ought to make it quite clear that the legislation was not brought about because of this case. As I said, legislation was being urgently pressed upon us because of two cases. I do not know the details of the cases. Agriculture is no longer a direct responsibility of mine and I have neither the need nor, in fact, the interest to inquire into the details of these cases. We are not founding on these two cases; we are founding on the representations which were made three and a half years ago to alter the law in some respects. I said that the case for alteration had been given urgency by reason of the pressure being made on two cases, one of which was being canvassed in another place.
LORD BURTON: I think the pressure was put on for one only, and that this has gone very much further.
Clause 18, as amended, agreed to.
Clause 19 agreed to.
7.13 p.m.
THE EARL OF DUNDEE: The noble Lord was kind enough to accept the principle of my last Amendment, No. 22. Amendment No. 25 is a variant of it. It gives power to an owner to enter into a contractual lease in certain circumstances; namely, if the owner of an agricultural holding of which he is also the occupier or the tenant of an agricultural holding rents an additional holding the statutory fixity of tenure should not apply. The principle behind the Amendment is simply to try to provide for a little more turn-over in the tenancy of farms which the provisions of Part III may clog up. I beg to move.
Amendment moved—
After Clause 19, insert the following new clause:
Termination of lease where tenant occupies more than one holding
". Notwithstanding the provisions of section 18 of this Act if any person being either the owner of an agricultural holding of which he is also the occupier or the
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tenant of an agricultural holding enters into a lease by which he becomes the tenant of another agricultural holding then at the termination of such lease it shall be competent for the landlord of the holding in respect of which the lease has been granted, at such date on which it is competent to serve a notice to quit, to serve an incontestable notice to quit in respect of the said agricultural holding."—(The Earl of Dundee.)
LORD HUGHES: Although I was able to accept the principle of the other Amendment I am sorry that I cannot do so in this case. The Amendment as drafted is expressed as being "notwithstanding the provisions of Section 18". We are a little puzzled about that, because Clause 18 of this Bill is not being cut across by this Amendment. What it is cutting across are the security of tenure provisions in the Agricultural Holdings (Scotland) Act 1949. Under that Act, when a lease expires, it is continued on a year-to-year basis and the tenant cannot be dispossessed except for his own default, or in certain special circumstances—as where the land is required for development, or where the Land Court consents to dispossession, for example, on grounds of sound estate management. The proposed Amendment would introduce a quite new set of circumstances in which it would be possible to give an incontestable notice to quit during the lifetime of the tenant.
The noble Earl has argued that if the landlord is not to be able to regain possession of land when a tenant dies we ought to make the provision he is suggesting, to enable the landlord to regain possession of a holding in circumstances where, as he suggests, there would not be hardship to the tenant because he occupied another farm. We do not know, however, what all the circumstances might be. The tenant's first holding might be a small, almost non-viable, holding, and he may have taken the second lease because of this. On its merits, therefore, I do not think this is a very good Amendment. Further, it would be a radical change in the basic security of tenure provisions of the Agricultural Holdings Act which, as I have already indicated, I cannot accept. It is for these reasons that I resisted the Amendment which the noble Earl pressed to a Division and carried. In this case I find myself no more able to accept the proposal than in that other case. I hope that the noble Earl will find it possible to withdraw this Amendment.
THE EARL OF DUNDEE: I am sorry that the noble Lord cannot accept this Amendment, because it seems to me to be right and equitable that a man who is a holder of an agricultural holding for which he has fixity of tenure should be enabled to enter into a contractual lease which is protected by this Bill. But, as the noble Lord has pointed out, there are certain legal differences between this and the previous Amendment which he accepted. I have no wish to press this Amendment against the Government, and in those circumstances I beg leave to withdraw it.
Amendment, by leave, withdrawn.
THE EARL OF DUNDEE THE EARL OF DUNDEE moved, after Clause 19, to insert the following new clause:
Provision in leases for termination in certain circumstances
". Notwithstanding the provisions of section 18 of this Act the owner of an agricultural holding shall have power to enter into a lease of the said holding for such period as may be mutually agreed between him and the person to whom the lease is granted and at the termination thereof to serve an incontestable notice to quit:
Provided that the power conferred by this section shall not be exercisable unless the tenant of the holding is also owner of another agricultural holding of which he is also the occupier or the tenant of another agricultural holding."
The noble Earl said: This new clause is one which I hope the Government may see their way to accept, although I am afraid that it has some similarities to the Amendment which the noble Lord could not accept on which the Committee divided. But I think it is reasonable that an owner and a prospective tenant, when the tenant is already farming, should be entitled to enter into an enforceable contractual bargain. The tenant would enter into such a bargain with his eyes open and would be farming land of which he was either the tenant or holder. There is no compulsion on him to rent the additional land. It may be a temporary convenience to have a bit more land for a certain period of time.
In this Amendment I have not inserted the man-hour tests for which provision was made in the Amendment which the Government accepted earlier because the prospective tenant is a willing offerer. There are likely to be cases where the owner would let land for a specific period
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of years —it may not be a complete holding; it may be a piece of land without buildings which it would be convenient for the prospective tenant to have for a certain time. There are likely to be cases where this might be let to an established farmer if the owner could resume possession at the termination of the controlled lease. I hope, therefore, that the noble Lord will consider this new clause in a favourable light because I think it would help to do something to ameliorate the rigidity of Part III as it now stands. I beg to move.
Amendment moved—
After Clause 19, insert the said new clause. —(The Earl of Dundee.)
LORD HUGHES: I am afraid that my objection to this Amendment is as strong as it was to the previous one. This Amendment is subject to the same fundamental objection: that it cuts across the security of tenure provisions of the Agricultural Holdings (Scotland) Act 1949. This section of the Bill deals with the security of tenure of a successor to a holding following the death of the tenant. What the Amendment is doing has nothing to do with the succession to a holding. It seeks to alter the present law in relation to the leases as they stand; it tampers with the position of a tenancy during the tenant's lifetime. I am certain, notwithstanding the arguments the noble Earl has put forward, that it would be wrong to make such a variation in the basic principles of the 1949 Act.
I can see other difficulties. For example, a tenant's circumstances might change, particularly if he were tenant, not the owner-occupier, of another holding. I agree that if he enters into a bargain voluntarily he would not have a real complaint, but I do not think that we can blind ourselves to the fact that if we give a landlord the right to serve an incontestable notice to quit in those circumstances he might regard it as more attractive to let his holding under this provision to a tenant who already occupied another farm than to someone who might have greater need to secure the tenancy of the vacant holding. There is that possibility. I am willing to concede that it may be just as fanciful as some of the other possibilities that we have had to look at this afternoon, but it would cut across the main object of the noble Earl, which is to provide as many farms as possible

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for new tenants. Undoubtedly it would expose some landowners to the temptation to go in for multiple tenancies or holdings rather than single ones.
Finally the Agricultural Holdings (Scotland) Act provides firmly against any provision for contracting out of it, and what we are being invited to do is to enable people to contract out of the 1949 Act by putting a new clause into this Bill. It is a principle upon which I cannot possibly give way.
7.21 p.m.
VISCOUNT MASSEREENE AND FERRARD: I thought the great excuse for this Bill from the Government side was the question of social justice, though I agree that they have stretched those words a great deal. Here we have a tenant who already has a holding, and if a landlord gives him notice to quit after the due term he will still have another holding and will not be deprived of the land. We hear a lot about social justice, but there appears to be social justice for only one party in this Bill. There appears to be no social justice for the owner of any land. I support the Amendment.
LORD HUGHES: All I would say is that I have endeavoured to make quite clear that we have tried to be fair to both sides. I have indicated that we could not satisfy everybody and the noble Viscount is merely emphasising that it would be even more difficult to satisfy him.
THE DUKE OF ATHOLL: I agree that this Bill may not be too unreasonable for the landlord of a sitting tenant, but the noble Lord, Lord Hughes, and the Government have completely forgotten the tenant who wishes to get a farm and has no relatives who are farmers, and who therefore is not likely to succeed to a tenancy, and has not enough capital to be able to become an owner-occupier. This is where the argument advanced by the noble Lord and the Government falls down the whole time. The National Farmers' Union of Scotland are so blind that they will consider only their present members and will not consider potential members who would come in as a result of being able to get leases of farms which between 1958 and now have apparently come on the market at the rate of 35 to 60 a year. After this Bill becomes law I should think the number of these farms
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will dry up almost completely and we shall have either existing tenants or owner-occupiers throughout farming in Scotland.
The noble Lord, Lord Hughes, keeps saying that he is trying to be fair to both sides, but he has not once mentioned these poor people, and there are many of them whom I know personally. I may say that I cannot remember dispossessing one of the near relations covered in this Bill between 1958 and 1968, but whenever one has a farm which one wishes to let, one always gets 50 or 60 applicants. Most of them are not in farming, or are, farm managers working for someone; or they are farming very small, uneconomic farms elsewhere and wish to move on to better things. The number of these people will dry up completely. This is what we appear to be unable to get over to the Government and the National Farmers' Union of Scotland. These are the people who will suffer, not the landlords. The noble Lord thinks that the landlords are going to suffer, but they will not. Their rents will be exactly the same. Although there might be a difference in efficiency among the farmers concerned, it would be very marginal. It is the people who are looking for farms and who will have; to go elsewhere who will suffer, and the noble Lord has not said one word of comfort to them throughout these proceedings.
LORD HUGHES: I think that the noble Duke is rather unfair to me. After all, I have just pointed out to the noble Earl, Lord Dundee, that one of the effects of the Amendment, if it were accepted, would be to cut down the opportunities available to some of these people because there would be at least a temptation in some cases to let a second farm to someone already in possession of a farm. So it would be another way of excluding at least some of the people for whom the noble Duke has spoken.
I think it wrong to say that the Government are not looking to the interests of these other people. We accept the fact that in existing circumstances not everybody who wants to obtain the tenancy of a farm can get one. I cannot see anything that is likely to happen in any change of the law which will alter that position. There will always be more applicants than there are farms available for them. We think that the effect of this

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may well be to have a marginal reduction in the number of such farms available for letting to new farmers. We think it is wrong that, in order to increase the opportunities for letting to these desirable new tenants, an injustice should be done to near relatives in certain circumstances—to near relatives to whom now a second noble Duke has made perfectly clear that he would not be doing any injustice.
This is not a Bill aimed at the tenants of noble Dukes, it is a Bill relating to tenancies in Scotland as a whole. If the noble Duke, the Duke of Atholl, were in a position to give me an undertaking which he could enforce that in no circumstances would a deserving near relative be dispossessed, we might be tempted to do something about it. But I am pretty certain that the noble Duke will not give me any such assurance, or any proof that he could implement it.
THE DUKE OF ATHOLL: Fortunately, the Scottish Landowners' Federation is not run on such tight lines as trade unions, so it would be physically impossible for any of my noble friends to give such an assurance, as the noble Lord well knows.
VISCOUNT MASSEREENE AND FERRARD: Perhaps I might point out that, had it not been for the most appalling taxation levied by Socialist Governments, all the landowners would be like the noble Duke, the Duke of Atholl, and would be very kind landowners. There would never be any question of any tenant being dispossessed. It happens only because you now have people owning land who have not the same feeling for the land or the tenants as the noble Duke has.
THE EARL OF DUNDEE: I do not accept the explanation—although I am grateful to him for giving it—which the noble Lord, Lord Hughes, has given for not accepting this Amendment. Nor do I agree that we ought not to alter the present law of tenancy in Scotland if we think that such an alteration would be an improvement. It is not noble Lords on this side of the Committee who started making alterations in the law of tenancy in Scotland; it was the Government who, late in the Committee stage of the Bill, suddenly produced this measure which
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radically does so and alters the Act of 1958. I do not see why we should not alter the Act of 1948 if we think it will improve matters and make for better farming. I hope we shall not be too ready to accept that kind of reasoning, but I do not think this is an Amendment which your Lordships would wish me to press any further. We have already got to consider on Report one or two points which I have alluded to, and I think that in the present circumstances your Lordships would probably wish me to withdraw the Amendment. I beg leave to do so.
Amendment, by leave, withdrawn.
7.30 p.m.
THE EARL OF DUNDEE THE EARL OF DUNDEE moved, after Clause 19, to insert the following new clause:
Bequest to widow or daughter
".—(1) Notwithstanding the provisions of section 18 of this Act in any case in which there is a bequest of the lease of an agricultural holding to the widow or daughter of the tenant the landlord shall be entitled to serve on the said widow or daughter, as the case may be, an incontestable notice to quit.
(2) In any case in which a landlord serves notice to quit in pursuance of the foregoing subsection the widow or daughter shall have the right to require the landlord to grant her a lease of the farmhouse for her life or for such shorter period as may be agreed upon at such rent as shall, failing agreement, be fixed by the Scottish Land Court.
(3) The provisions of the Rent Act 1965 shall not apply to a lease granted under this section."
The noble Earl said: I should like to make perfectly plain in view of the previous Amendment discussed some little time ago, that I think a woman may be just as good a farmer, or indeed a better one, than a great many men, and the fact that she is not able to do all the more strenuous kinds of physical labour that a farmer has sometimes to do does not mean that she is not a good manager of those who do it on a farm. The point of this Amendment is not quite that. There may be some widows who have considerable knowledge of farming, enough to satisfy the Land Court, if the matter came to them, that she ought not to be displaced but ought to receive the tenancy of the farm, though she may not particularly want to do much farming but to have a home. She might think it difficult to get another suitable place in which to live. It may be that

765
if she were assured of the occupancy of the farmhouse for the remainder of her life, that would be all she required to have. But she might feel bound to demand her legal rights of tenancy in order to secure that, unless it were otherwise provided, as my Amendment tries to do.
There are many cases where widows are left in occupancy of the farmhouse and the new tenant finds equally good accommodation on the farm, in the grieve's house or some other dwelling, and everybody is satisfied. The National Farmers' Union did not ask for anything more than that a competent son to whom a lease had been bequeathed should have a statutory right to inherit it, and did not ask that a widow or daughter should have this right. My Amendment provides that they should have statutory occupation of the farmhouse. It would then be a matter for discussion between the widow or daughter and the owner as to whether or not it would be convenient for both of them that the widow should also do the work of running the farm. I beg to move.
Amendment moved—
After Clause 19, insert the said new clause.—(The Earl of Dundee.)
LORD HUGHES: The noble Earl wishes to exclude widows and daughters from the category of near relatives protected from dispossession by this clause. It is perfectly true that the proposal as first put to us by the N.F.U. sought to give this protection against dispossession only to a competent son. We have given this subject a good deal of thought. It was tempting to limit the provision in the way first asked for by the N.F.U. but we came to the conclusion that we could not logically do this, because the law has been changed and accepts the principle of equal rights of succession for sons and daughters. It seems to the Government that in a matter of this kind we have no right to reintroduce a discrimination which the law has sought to eliminate.
The noble Earl has founded his case largely on the fact that what a widow or daughter may want is to have her home continued, and his Amendment provides that where an incontestable notice to quit is issued the tenancy of the farmhouse for life or for such shorter
766
period as may be agreed upon should be offered. But if the widow or daughter is interested only in having the tenancy of the farmhouse, she does not need to take on the farm in order to have it at the present time. The landowner would have no difficulty in entering into an agreement to let the farmhouse to the widow for the rest of her lifetime and obtain possession of the farm. If he can do that at the present time merely by ascertaining that this is what the widow wants, we come to the position that we are seeking to alter the law to take away the right of succession to a farm from the widow who does not want it by taking this right away from the widow who does want it. That seems to me to be wrong. The law as it stands will not prohibit an owner for gaining possession of a farm when all the widow wants is a home. We are not prepared to alter this clause so that the widow who wishes to continue farming and who is competent to do farming can be dispossessed. She should have exactly the same rights as her son and daughter.
THE EARL OF DUNDEE: I am sorry that the noble Lord cannot see his way to accepting this Amendment, which I think would be an improvement to the Bill; but, in view of what he has said, this is not an Amendment which I should wish to press, and I ask leave to withdraw it.
Amendment, by leave, withdrawn.
7.37 p.m.
THE DUKE OF ATHOLL THE DUKE OF ATHOLL moved, after Clause 19, to insert the following new Clause:
Landlord's power in certain cases to require tenant to purchase holding
". In any case in which, in pursuance of the foregoing provisions of this Part of this Act, a landlord is precluded from giving an incontestable notice to quit to a tenant who has acquired right to the lease of an agricultural holding, the landlord may give notice to the tenant requiring him to purchase the holding and in any such case the tenant shall purchase the holding at such price as may be agreed between the parties or, in the case of dispute, as may be fixed by the Scottish Land Court who shall fix the said price on the basis of what price the holding would realise if offered for sale in the open market with vacant possession."
The noble Duke said: We now come to the last Amendment to Part III, a Part of this Bill which I think should have

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been in separate legislation. The fact that the Committee stage has lasted so long shows this. I still think that we have not thoroughly covered all the points, and we have been entirely unable to put across to the noble Lord, Lord Hughes, that it is the person seeking a farm whom we are all worried about. None of the provisions he has made has given any comfort on this question at all. The whole of this Part of the Bill seems to be based on the theory that there are two or three bad cases where the landlord serves incontestable notice to quit and therefore anyone in Scotland seeking a farm as tenant who has not a near relation farming should be penalised simply because of this. It seems to me grossly unfair and I should have thought that any Government would have been ashamed to bring in such legislation.
This final Amendment, which I regard as being extremely important, is an attempt to mitigate this situation. It could be of great help where a landlord is nervous about letting a farm which falls vacant because he feels that on his death his estate will have to pay substantial death duties and the value which he would obtain for his land would be much reduced by the fact that there was a sitting tenant on some or all of that land.
This Amendment requires that a tenant who succeeds to a farm through this Part of the Act shall purchase that farm if required to do so by the landlord at the price that in the opinion of the Land Court that farm would be worth had it got vacant possession. This is all the Amendment does. It was suggested on Second Reading by the noble Lord, Lord Bannerman, who cannot be considered to be in favour of the landlord, that it was only fair that some such provision as this should be inserted in the Bill. I think it would be useful to the landlord if he were faced with finding money at an awkward moment, and even more useful from the point of view that it might—I only say "might"—make people slightly less reluctant to let farms to suitable tenants when they fall vacant. At the moment, I am sure that the effect of the Bill will be that they will either sell land then and there or farm it themselves, and that the supply of tenant farms being let to tenants will dry up quite appreciably. That will be a result
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of this Bill. I do not think that this clause will have a great effect on it, but I think in one or two cases it might just sway the landlord to be in favour of letting, and I cannot see that it can do any harm at all. I beg to move.
Amendment moved—
After Clause 19, insert the said new clause.—(The Duke of Atholl.)
LORD HUGHES: A few moments ago the noble Duke taxed me with completely ignoring the fact that what he and his noble friends were seeking to do was to protect the interests of the would be tenant who could not purchase a farm, and whose opportunities of getting the tenancy of a farm were limited. By no stretch of the imagination can it be suggested that this Amendment would in any way further the interests of that class of would be farmer, because giving the landowner the right to require it to be purchased, if that right were exercised, would take the farm away just as effectively as if it continued in tenancy.
THE DUKE OF ATHOLL: I am sorry to interrupt the noble Lord, but he has quite misunderstood me. All I am saying is that the landlord might be encouraged to let the farm, because he knows that when he dies and the money is needed to pay off death duties, when that particular tenant dies, his heirs and successors will be able to sell the farm at the vacant possession price and not be saddled for ever with the hereditary tenancy which this Bill creates.
LORD HUGHES: I think we have been at this much too long for me to attempt to follow the noble Duke in that reasoning. All I say is that I do not think he is right. Perhaps if we pursue this on the Report stage we can go further into why I do not think he is right.
The noble Duke must know that acceptance of this Amendment would make serious inroads in the security which the Bill would afford to near relatives of a deceased tenant. It may well be that the successor will have sufficient capital to take over the farm and manage it satisfactorily, but he might be without the resources to purchase it. I know that there would be reasonable prospects that he could borrow the money with which to acquire the farm; and it would probably be easier to borrow money to

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acquire land than to borrow money to buy implements. But the one thing that is quite certain is that it would be virtually impossible for him to borrow all the money necessary to acquire the farm. He would have to put up some part or the money himself, and there must be some cases, at least, where he would need to provide even 5 per cent. or 10 per cent. of the purchase price of the farm, in addition to the capital necessary to farm as a tenant, and this would put it effectively beyond the ability of a good near relative to carry on in the operation.
For that reason, I cannot accept the Amendment, because it is a method by which the principle that we are seeking to defend, of the right of a near relative to succeed, could in some instances be effectively frustrated.
VISCOUNT MASSEREENE AND FERRARD: The noble Lord has really given himself away, if he will forgive me for saying so. What he is saying is that it is quite uneconomic for a tenant to own his own farm. In other words, what the noble Lord is saying is that agricultural tenants in Scotland really exist off the landlord, and do not pay economic rents.
LORD HUGHES: I have not said any such thing.
LORD BALERNO: I should like to support the noble Duke. I think this is a most reasonable proposition. Why should a landlord be saddled for ever with a farm from which he can virtually get no profit whatever? It is entirely reasonable that the tenant should, if he is insisting on his hereditary right, pay for it. I cannot appreciate why the noble Lord, Lord Hughes, has said that such a tenant will be unable to raise the money for the purchase. There are several different ways of raising money. In this case he will not be asked to raise the market value of the farm, because I cannot imagine that the Land Court, on appeal, would fix a value of the farm that was greater than three-quarters of the true market value of the farm. Therefore, it ought to be quite easy for him to raise even the whole of the money for the purchase of the farm.
LORD HUGHES: I am afraid the noble Lord, Lord Balerno, is overlooking the last words of the Amendment:
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"or, in the case of dispute, as may be fixed by the Scottish Land Court who shall fix the said price on the basis of what price the holding would realise if offered for sale in the open market with vacant possession."
LORD BALERNO: If the noble Duke would alter the final sentence, then I would agree with the Amendment.
LORD DRUMALBYN: I am not quite certain that I should agree with my noble friend in suggesting that the last sentence should be altered. One of the main difficulties about this is that there is an element of confiscation in this legislation. It is transferring a value from the landlord to the tenant. I remember very well that some ten years ago or more there was a great difference between the prices of farms which were offered for sale with vacant possession and the prices where there was a sitting tenant. It came to the point where the price where there was a sitting tenant was about half—or only just a little more; I think the actual relativities were seventeen to thirty-two or something like that at that time. This represents a large element of confiscation in this Bill.
VISCOUNT MASSEREENE AND FERRARD: Disgraceful!
LORD DRUMALBYN: Taken together with the other elements in the Bill, I should have thought that this would be an element of fairness. On the one hand, the Bill is going to give almost perpetuity of tenancy—which stems to be a contradiction in terms, anyway—so long as you have a successor who is trained in the art of agriculture to follow you. For that reason, it gives a kind of perpetuity in tenancy. But why should that be accompanied by a penalty on the landlord, so far as the price at which he is able to dispose of the farm is concerned, should be have to do so?
I do not think that this Amendment goes far enough. I should have thought that in any case where the landlord had to dispose of the farm, and at any time when he had to dispose of it some arrangement should be made by which it should be disposed of in the sane way as if it were being sold on the open market. That is the ideal; but this Amendment would at any rate bring it nearer. I should have thought that there was a great deal to be said for this.

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I hope that the noble Lord will look at this again, because clearly there is a sharp element of confiscation and injustice involved in this case. I hope he is not going to say that this, of course, was the situation before ten years ago, the period 1949 to 1958. It was quite a different thing during the period of the war. I well remember that this was a circumstance which arose quite accidentally because of the difference in law between Scotland and England; and this situation was perpetuated by the 1949 Act. It had given rise to so much injustice, and the injustice was so patent after seven or eight years that it simply had to be changed. The same thing will happen again, and we are bound to have changing legislation every eight or ten years if this is done.
7.50 p.m.
LORD HUGHES: I am surprised at the intervention in this vein of the noble Lord, Lord Drumalbyn. The whole argument that has been put forward this afternoon as justification for this is that there will be the opportunity for the landowner to regain possession of the farm so that he may let it to another tenant. It may well be that the selling value of a farm with vacant possession is very much greater than the selling value of a farm which is tenanted. I think that is undoubtedly still the case; it has not altered with the passing of the years. But the argument which has been advanced up to the present is that the landlord should be able to get out of the tenancy not so that he may be able to recover that part of the capital which has been laid aside all the time the farm is tenanted, but so that he may have the opportunity to let the farm to somebody else, in which case the laying aside of that capital continues. If the argument is now being advanced that the landlord should have the opportunity of dispossessing the tenant in order to sell, I can understand that; but the argument put forward by the noble Lord, Lord Drumalbyn, has value only if the intention is to give notice to quit. If that is not the intention, the position remains as it is: that the owner still has a farm, the market value of which is lower because it has another tenant. It does not become higher because one tenant is replaced by another.
LORD DRUMALBYN: I do not think the noble Lord has quite understood the point, which is that if the object of this Bill is to ensure that a person who has the tenancy of a farm will be able to go on farming that farm for his life, and then his son, or whoever it may be, shall go on afterwards, does it really matter whether he does so as tenant or as owner? What is reasonable is that, if the farm has to be realised, a fair price should be obtained in spite of this change in the law. Ideally I am sure we would agree that if it is at all possible this objective should be achieved, and I would ask the noble Lord to bend his mind to the achievement of that objective.
LORD HENLEY: I agreed with my noble friends that I would not speak about Part III of this Bill which concerns Scotland and where there is a certain measure of disagreement. I think it was felt that here a measure of social justice was involved. My noble friend Lord Bannerman of Kildonan accepts this point, and that where there is an agreement to allow a relative of the tenant to stay on there must always be a measure of social justice: he should be willing to offer to buy. It seems to me this is an aspect of social justice which ought to be met, and I hope the Government will consider it, because it seems to defeat their arguments about social justice if they will not accept this perfectly reasonable point raised by the noble Duke.
LORD HUGHES: This is the last point I propose to make because this debate has gone on interminably. The Government have laid down certain conditions with which a near relative must comply if he is going to be able to fight an incontestable notice to quit. He may fulfil all these conditions and yet not be able to find the capital to run the farm efficiently, or to acquire his share of a farm at the price at which it would be sold on the open market with vacant possession. When I drew the attention of the noble Lord, Lord Balerno, to that he immediately saw the dangers of acquisition for a tenant farmer. I invite the noble Lord, Lord Henley, who has correctly quoted his noble friend Lord Bannerman of Kildonan, to consult with him as to whether the noble Lord, Lord Bannerman, would be any happier about accepting the Amendment with this last

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phrase in it than would be the noble Lord, Lord Balerno. I am quite satisfied from the conversations that I have had with the noble Lord, Lord Bannerman, that he sees merit in requiring a near relative to purchase the farm, but I very much doubt whether he would wish to go as far as this.
LORD HENLEY: I certainly will consult with my noble friend Lord Bannerman because it is possible that I have misunderstood him with regard to this last sentence, but I must challenge the noble Lord, Lord Hughes, on the question of raising capital. Earlier in this afternoon's debate the noble Lord made the point as to how easy it was in fact, if a man was competent and efficient to take on the tenancy, for him to raise the capital. I do not altogether accept this. I think it is extremely difficult to raise a large sum of money, if it is a big farm. Be that as it may, so far as buying a farm is concerned a great part of that capital can be raised on mortgage. Although I will consult my noble friend, I hold the view that if the Government feel that as a measure of social justice the inheritance of tenancies should be an option that can be taken up, there must also be the other option.
I accept the matter of the difference in prices according to whether there is a sitting tenant or vacant possession, and it may be larger than the Government want to accept, but can they not accept the fact that the option should be open to the landlord to require the tenant to buy, not necessarily at vacant possession price but at a price settled by arbitration?
LORD HUGHES: I will undertake to consult my right honourable friend as to whether there are any circumstances in which a purchase might be considered as an alternative to a continuation of tenancy to a near relative. I do not offer any great hope of success in the matter, but I have been sufficiently impressed by what has been said to think it reasonable that we should at least have another look and convince ourselves, if nothing else, that we were right.
VISCOUNT MASSEREENE AND FERRARD: Why cannot the Government copy the Irish Land Act whereby the British Government gave the farmers' tenants the money with which to buy their farms at very low rates of interest?
THE DUKE OF ATHOLL: I thought the noble Lord was going to reply to my noble friend, although I think the point about the Irish Land Act is rather a "fast one". I honestly do not feel that the noble Lord, Lord Hughes, has made out any sort of a case at all. My noble friend Lord Bannerman could possibly have changed his mind since March 5, 1968, but he then said:
"The fact that the heir is secured to follow on is a good thing, but if it affects the selling price which the farmer may hope to get from a farm, then I think there is hardship, so far as the landlord is concerned, and this Bill should contain some provision to get rid of this hardship."—[OFFICIAL REPORT; 5/3/68, col. 1273.]
We are all agreed that it affects the price which the landlord would expect to get for the farm, and so far as I can see this Amendment just gets rid of that hardship—no more and no less. I think the noble Lord has not disputed this at ail, but because he is going to lock at it again and to see whether his right honourable friend will do anything about it, I feel, very reluctantly, that I must withdraw the Amendment at this stage. But I warn the noble Lord that if his right honourable friend does not see his way to do something about this I shall undoubtedly press this Amendment at the next stage of the Bill. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
THE CHAIRMAN OF COMMITTEES: Clauses 21 and 22 having already been agreed to, it is my duty to put the Question, That Clause 23 stand part.
Clause 23 [Amount of special drainage charge]:
LORD HILTON OF UPTON: Just before we adjourned on Tuesday last the noble Lord, Lord Inglewood, fired a number of questions at me. I said that I could not then answer them "off the cuff", but I promised to give him answers at to-day's Sitting. The noble Lord thought at one time to-day that he would be unable to be with w at this juncture, so we discussed his questions and I told him my answers to them. The noble Lord then told me that he was perfectly satisfied with the answers I had given him, and I think if the House will accept that explanation it will save a good deal of time.
Clause 23 agreed to.
Clauses 24 to 27 agreed to.
Clause 28 [Transitional provisions for general drainage charges]:
LORD BESWICK: This Amendment will extend the transitional provision for drainage charges to include the financial year 1968–69 as well as 1969–70 and 1970–71. The Amendment is required to meet a local problem in the Gwynedd River Authority area in North-West Wales. The amount of the general drainage charge there is very much higher than in any other river authority area. If the Gwynedd River Authority were able, as they would like, to use this method of calculation for 1968–69, the charge would be reduced from 1s. 6½d. to 11½d. in the pound. This really would be most welcome, and I hope noble Lords will accept the Amendment. I beg to move.
Amendment moved—
Page 24, line 8, leave out from ("for") to ("and") in line 12 and insert ("any of the years ending with 31st March 1969, 31st March 1970 and 31st March 1971 in respect of which the authority have not already made a determination under this subsection,").—(Lord Beswick.)
Clause 28, as amended, agreed to.
Clause 29 [Interpretation etc.—drainage charges]:
8.3 p.m.
LORD NUNBURNHOLME LORD NUNBURNHOLME moved to add to the definition of "chargeable land":
"and also excluding land over 1,000 feet above sea level".
The noble Lord said: I have put down this Amendment because I consider the drainage charge per acre is unfair. In the 1961 Act the drainage authorities were given leave to put a drainage charge on all land outside the internal drainage boards, and that was on the Schedule A assessment. Schedule A assessment per acre on land up to 250 feet is very different from Schedule A assessment per acre for land over 500 feet, and that is why I say this charge is unfair. Initially, I tried to put down an Amendment by which land up to 250 feet should pay the full charge, land between 250 and 500 feat should pay two-thirds, land between 500 feet and 1,000 feet one-third,
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and land over 1,000 feet nil. However, having consulted the Ministry of Agriculture's drainage department, the National Farmers' Union and the Country Landowners' Association—who all put their heads together and decided upon this universal charge as the only possible method—I came to the conclusion I was going to be outvoted on this matter.
One of the ways of "getting at me" adopted by the drainage authorities was by informing me that there were no maps of the individual farms throughout the country showing each field and the height of fields. I think it is rather disgraceful that the Ministry of Agriculture should not know what farms they are looking after. I do not think this is the case everywhere. Where a tile drainage scheme has been entered into the Ministry do have this information, and I think that over a period of two years every farm in the country should be mapped, without increasing the staff of the Ministry of Agriculture and its advisory service. To raise the river authority's precepts, the June Agriculture Return would have to be consulted. Rough grazing is deducted from the total area and the rate per acre to raise the precept is fixed. The exemption of all land over 1,000 feet is workable provided the Government classify this land as rough grazing, which the majority already is. The proposed acreage charge may show an increase in rough grazing of land up to 1,000 feet in the June Return, but it seems only fair to exclude all charges on land over 1,000 feet. I beg to move.
Amendment moved—
Page 25, line 13, at end insert the said words.—(Lord Nunburnholme.)
LORD BESWICK: I have a good deal of sympathy with the Amendment the noble Lord proposes, and undoubtedly there are imperfections and indeed unfairnesses in having this flat rate charge. But I think it is also true that at the present time it is impossible to identify all the land that is over 1,000 feet; one could do it; it would take time; but, as the noble Lord says, it would be possible. It would also cost money, and the amount of money proposed to be raised by these charges is quite moderate, ranging from about 4d. to 1s. an acre. If it was necessary to have this sort of survey first, the cost of collection would be almost

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as much as the charge. It would therefore be too expensive to raise it in that way. The fact is that the National Farmers' Union, who do understand the view of the noble Lord, realise that there are imperfections in this flat rate; nevertheless they accept that this method, imperfect as it is, is better than the one it supersedes. I hope, therefore, that the noble Lord will be able to withdraw his Amendment.
LORD NUNBURNHOLME: I should like to mention one point, and that is that if the noble Lord will agree to classify all land, or has no objection to the farmers classifying all their land, over 1,000 feet as rough grazing, I shall be pleased to withdraw my Amendment.
LORD BESWICK: That is quite impossible; but it is a fact that a good deal of land over 1,000 feet would be rough grazing and therefore would not attract the charge. What is not rough grazing is probably good pasturage, and should make a contribution.
LORD NUNBURNHOLME: I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 29 agreed to.
Clauses 30 to 35 agreed to.
Clause 36 [Supplemental provisions—drainage rates]:
LORD BESWICK: This modest little Amendment is to correct a typographical error. I hope it will be acceptable. I beg to move.
Amendment moved—
Page 31, line 22, leave out ("32") and insert ("33").—(Lord Beswick.)
Clause 36, as amended, agreed to.
Clauses 37 to 41 agreed to.
Clause 42:
Amendments of Plant Varieties and Seeds Act 1964
42.—(1) In Part I of the Plant Varieties and Seeds Act 1964, after section 5, there shall be inserted the following section:—
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Requirements to use registered names on Sale of reproductive material.
5A.—(1) Where a name is registered under section 5 of this Act for any plant variety, it shall be unlawful for any person to use, in selling or offering for sale material, of that variety being—

(a) reproductive material; or

(b) material to which plant breeders' rights are extended under paragraph 1 of Schedule 3 to this Act,

any name which serves or is intended by him to serve to distinguish that material from material of other plant varieties within the same class but is not the name so registered.
8.10 p.m.
LORD CAWLEY LORD CAWLEY moved, in subsection (1) of the proposed new Section 5A after "offering for sale" to insert "other than for export from the United Kingdom". The noble Lord said: May I say a few general things on this entirely different subject before I move my Amendment? It is a most difficult—
LORD BESWICK: Would the noble Lord excuse me? For the convenience of the Committee and in order to save time, would the noble Lord agree that we discuss together the Amendment which he is about to move, No. 32, and Amendments Nos. 33, 34 and 35?
LORD CAWLEY: Yes; that would be quite acceptable. This is an extremely difficult matter, and I much regret that I have not given the noble Lori in advance any information on the arguments which I am going to raise. I shall not expect him to answer everything I say this evening, but I hope that his advisers will take a careful look at the matter.
The explanatory note on this clause says:
"Subsection (1) clarifies certain obligations to be assumed by Her Majesty's Government in regard to the naming of plant varieties under the International Convention for the Protection of New Varieties of Plants in 1965."
That is quite preposterously misleading. What this subsection does can be paraphrased in this way:
"Subsection (1) creates a new criminal offence punishable by imprisonment, the offence being the commission of an act which is specifically permitted in the terms of the Convention which this country signed in 1962."
Article 13(a) of the Convention, when literally translated from the French reads:
"for the same product it is permitted to add a trade mark to the varietal name."

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This clause puts a completely strained interpretation on that Article. It asserts that some trade marks are excluded, whereas others may be used: that is to say, you may use a house name in association with a varietal name for a plant, such a name as Sutton's or Carter's, or one that you do not intend to use in respect of one plant only, but you are forbidden on pain of imprisonment from using a second fancy name if the first fancy name has been registered under the Act.
The defence put up in another place by the Minister to this rather extraordinary state of affairs is, I think, illustrated by something that the Joint Parliamentary Secretary said in a letter to the Member of Parliament for Knutsford. He said:
"The High Court has ruled that a fancy name cannot be registered under the Trade Marks Act in this country because it applies to a variety as such and does not distinguish the goods of any particular person or firm, which is the function of a trade mark or name."
The High Court has ruled nothing of the sort. There is only one case in which the names of plants have been considered in the High Court, and that is Wheatcroft's Application, which is reported in 71 Reports of Patent Cases, in 1953. This, of course, was before the Plant Varieties Act was passed. As your Lordships may know, the report of a case is authoritative only in the judgment of the learned Judge; it is not authoritative in the head-note.
The report in this case has a headnote which is most definitely wrong. The reason why was that the Editor's faculties were declining at that period owing to his age. There is no doubt that if you read the headnote to that report you can get the view the Minister holds. But if you read the body of the judgment you find something quite different. This does not indicate that a fancy name may not be registered. I can point to the passage in the learned Judge's judgment. It is a short one, and he makes it quite clear that this is so. I should point out that the reason why these trade marks were refused was because Mr. Wheatcroft had registered all the names first as varietal names with the National Rose Society. He then attempted to get a
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monopoly as a trade mark of the identical names.
The learned Judge said this:
"Once the respondents …"—
Mr. Wheatcroft and the others—
"decided to invite the Society"—
that is the National Rose Society—
"to accept any particular name as an identification of the variety to which it was applied, they put it out of their power to intend the name only to identify such instances of the variety as they themselves raised."
That is perfectly true. But that case did not say that fancy names for roses could not be registered. They can. Indeed, in the drug field this point is quite obvious. A drug may have a scientific name. It has a second name, which is called a short name and which is on a register kept by the Ministry of Health, and that corresponds with the varietal name registered under the Plant Varieties Act. But the producer of the drug may also have a trade mark registered at the Trade Marks Registry. So there are three names. The producer of the drug may use the short name and call it such-and-such a thing, and the trade mark is such-and-such a brand.
I will give your Lordships an example. There is a substance called 3:5-dioxopyrazolidine. That is the scientific name for a drug. The Minister has given it a short name, phenylbutazone. But it has a perfectly good trade name registered for it, Butazolidine. Butazolidine as a trade mark can be used only in relation to phenylbutazone; it is a fancy name. So that, at any rate in the drug field, a drug can have a varietal name and a fancy trade mark registered.
So it is obvious that this excuse for getting round the Convention does not really hold any water. This is the sort of thing that makes this country a little distrusted when we try to get round our obligations. But we must leave that now, because in my view we never ought to have entered into this obligation. I am very much against these double namings, except in the case on which my Amendment is based; that is, for export. But I believe that we ought not to hide the fact that we are going straight against the Convention under a mass of excuses. We are, and I think that, if it is for this country's good, it is right. I do not agree with the rose growers at all.

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Having described what I think of the subsection generally, I go on to my Amendment. I ask the noble Lord to forget about roses. This Act will continue for a number of years. Schemes will be brought in to cover other flowering plants. It is no good talking about Europe, because these plants are exported all over the world. I take for my example orchids. At present, orchids have not got a scheme, and certain varieties of orchid, such as Cymbidium, certainly merit a scheme. Our exports from this country are very considerable. We are the finest orchid breeders in the world. We export them to the rich of Singapore, the Philippines Islands, and to all sorts of places in the tropics. If we have a scheme for orchids and a breeder in this country registers with the controller of plant varieties a name which is wholly indefensible in some foreign country, then he may be in the very awkward position that he cannot sell his orchids to that country because he cannot use the name.
This is not so very far-fetched. A splendid orchid was registered during the war with the organisation which corresponds with the National Rose Society, and it was called "Stalin". That would be almost unexportable under that name to Russia at the present moment. Other anomalies may occur. Your Lordships may remember that when the Allies landed in Southern Europe they set up an organisation for running military government which they called AMGOT—Allied Military Government in Occupied Territories. They discovered very shortly afterwards that that was a very rude word in some Eastern European language and they had to alter it very quickly. If a breeder of orchids had registered "Amgot" here, when he was trying to sell his orchids to some country where that was an objectionable word, he would not be allowed to add another name to the varietal name, the name which could be used in this country, under penalty of imprisonment. This is an important point. This Amendment gets rid of objections to two names, because it protects the grower. I still think that two names are quite indefensible in this country, even though they may be permitted by convention, but I think that protection is needed for export and I trust that the Government will accept this Amendment. I beg to move.
Amendment moved—
Page 36, line 39, at end insert ("other than for export from the United Kingdom ")—(Lord Cawley.)
LORD BALERNO: I rise to support my noble friend Lord Cawley. At the same time, I should like to speak on behalf of the noble Lord, Lord Nugent of Guildford, who is unable to be present. Both he and I put down our Amendments, Nos. 34 and 35, independently of each other and independently of my noble friend Lord Cawley. Neither he nor I are as expert in this complicated field as is my noble friend Lord Cawley, and those of us who heard him speak on the original Act in 1964 were impressed then by his extensive and deep knowledge of this most complicated subject. Accordingly, both the noble Lord, Lord Nugent of Guildford, and I, having had explained to us the line and the argument which Lord Cawley has now put before your Lordships, are quite convinced that this is the right way to proceed. We are also equally convinced that it is vital for the plant breeders in this country that the Amendment put forward by the noble Lord should be adopted by the Committee.
LORD BESWICK: The noble Lord, Lord Cawley, invited us to forget roses. I am bound to say, after heating the background to some of these Amendments and some of the discussion that has been going on, that I wish I could forget roses. I have always looked upon roses as something beautiful and restful, and I had absolutely no idea until I came across this problem just what sort of politics there were in the rose breeding world. As I understand it the noble Lord, Lord Balerno, is prepared to withdraw his Amendment which would have the effect of deferring this clause of the Bill. I also understand from him that the noble Lord, Lord Nugent of Guildford, accepts the argument which has teen put by the noble Lord, Lord Cawley.
The noble Lord, Lord Cawley, pointed out one imperfection of this clause; namely, that it penalises, to some extent, the exporter of roses. I am impressed by what he said. I see the force of his argument and I am prepared to accept in principle the Amendment which he has moved. But I think the actual wording is probably not absolutely in order, and, if he will allow me to come forward at

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the Report stage with another wording embodying the principle which he has expressed, then I hope on that understanding he will be able to withdraw his Amendment.
LORD CAWLEY: I am most grateful to the noble Lord and I willingly beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
8.25 p.m.
LORD BALERNO LORD BALERNO moved, in subsection (1) of the proposed new Section 5A, to leave out all words from "name" to the end of the subsection and to insert "other than the registered name". The noble Lord said: It is with considerable diffidence that I move this Amendment, because my understanding of Parliamentary draftsmanship is extremely limited. But in reading this clause it seemed to me that what it conveyed could be re-phrased in much simpler language, and that I have attempted to do. In my Amendment I have assumed that the sentence in paragraph (a), where the words "reproductive material" appear, implies that it is reproductive material for the purpose of reproduction. If it does not imply that, then it must surely be a piece of extremely bad draftsmanship, because, for example, every potato sold to the consumer is reproductive material. In the part of Scotland from which I come, some potatoes are sold as "Dunbar Reds". That is a description not of the variety but of the locality in which they are grown, and has nothing to do with the varietal name.
While plant breeders who create new varieties of plants must be extremely intelligent people, and are doubtless able to elucidate this sentence as it stands, nevertheless, as the reproductive material gets further out into commerce it passes through the hands of people who are less intellectually able to comprehend a difficult combination of words such as appears in the first four lines on page 37. My whole object is to make this part of the clause more understandable to the average man in commerce selling new registered varieties of plants. I beg to move.
Amendment moved—
Page 37, line 1, leave out from ("name") to end of line 4 and insert ("other than the registered name")—(Lord Balerno.)
LORD BESWICK: I am all in favour of simplifying legislation, and if one can make two words do the work of three then the noble Lord can count on me to support him. However, much as I should like to accept his Amendment, especially as he was so reasonable about the other, and also as I could not accept the one he moved on Part II of the Bill, what he is seeking to do will not be achieved by his Amendment. He is likely to create more trouble in the courts if he endeavours to simplify the wording here. What we seek to do in subsection (1) is to use the same wording as that already included in Sections 20 and 21 of the Act relating to the index of names of plant varieties. It may seem "gobbledegook", but it is framed to show what is meant by a "variety name". This is a name used to identify the variety; that is to say, to distinguish it from other plant varieties. The name goes with the variety, no matter who produces it or sells it.
If the noble Lord's Amendment were accepted, I am advised that it would make it a criminal offence to sell seed of a protected variety, for instance, under a type name as "winter wheat", "spring barley", and so on; or, in other words, coming back to the roses which we have been urged to forget, it would make it a criminal offence to sell varieties in a bundle at the end of the season as floribundas. I am sure that is not what the noble Lord is after. Much as I should like to have fewer words in the Bill, and much as I should have liked to accept an Amendment from the noble Lord, if he accepts the advice of my professional advisers I think he will see that it will be better to leave the wording as it is.
LORD BALERNO: No. Much as I should like to accept the advice of the noble Lord, Lord Beswick, when he refers to "winter wheat" or "spring barley", or anything like that, that is surely a generic name. We are talking about specific or varietal names, names which are registered; not about a name which is a general description of the plant. It seems to me that that all makes nonsense. I just cannot follow that line of argument in the very least. My Amendment is that you must use the registered name. Any further description about whether it is "spring barley" or "winter

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wheat" is only a general description it is not a varietal name. It is not using another varietal name. The whole purpose of this clause is to see that only one varietal name is used. You can use a lot of other names and adjectives about plants, especially if they do not germinate.
LORD BESWICK: That is right, but the question is: what is the definition of a varietal name? The noble Lord's Amendment would have the effect of creating some confusion as to what is a varietal name. May I just say this? I am sure our interests are the same here, and if the noble Lord can prove to me elsewhere, when we can sit down and look at this, that his interpretation is right and that the advice of my professional advisers is wrong, I would be very glad to look at this again on Report stage.
LORD BALERNO: At this late hour I certainly do not want to press on with this matter. I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 42 agreed to.
Clause 43 agreed to.
8.33 p.m.
LORD BESWICK LORD BESWICK moved, after Clause 43, to insert the following new clause:
Modification of Restrictive Trade Practices Act 1956 in relation to agricultural marketing boards
".—(1) For the purposes of the Restrictive Trade Practices Act 1956, the definition of "trade association" in section 6(8) of that Act shall not include, and shall be deemed never to have included, a board within the meaning of this section.
(2) Where a board enter into an agreement on or after the commencement date in the exercise only of such powers as are mentioned in subsection (1) of section 20 of the Agricultural Marketing Act 1958 (which section provides. among other things, that certain of a board's powers with respect to products must be exercised in accordance with any directions given by the Minister for the purpose of safeguarding the public interest) or of such powers as are mentioned in section 36 of that Act (under which a board are empowered, subject to the directions of the Minister, to provide artificial insemination services), Part I of the said Act of 1956 shall not apply to the agreement if—

(a) the board have served notice of the terms of the agreement on the Minister not less than twenty-eight days before entering into it; and

(b) either the period of twenty-eight days beginning with the date of service of the
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Board's notice on the Minister has expired and the Minister has not during that period served notice on the board that he objects to those terms for the purposes of this subsection or the Minister has served on the board during that period notice that he does not so object; and

(c) the board have furnished a copy of the agreement to the Minister within the period of twenty-eight days beginning with the date on which they entered it to it or within such longer period as the Minister may allow in any particular case.

(3) Where a board have entered into an agreement before the commencement date wholly or partly in the exercise of any of the powers mentioned in subsection (2) of this section and either the board served on the Minister, before they entered into the agreement, notice of its terms in pursuance of a requirement to do so contained in a scheme administered by them or the board furnish a copy of the agreement to the Minister within the period of three months beginning with the commencement date, Part I of the said Act of 1956 shall not apply to the agreement—

(a) subject to paragraph (c) below, as respects the period of fifteen months beginning with the commencement date;

(b) if during the said period of fifteen months or that period as previously extended under this paragraph the Minister serves notice on the board extending or further extending that period in relation to the agreement, then, subject to paragraph (c) below, as respects the extended period;

(c) if during the said period or extended period the Minister series notice on the board that he objects to the agreement for the purposes of this subsection, only as respects the period beginning with the commencement date and ending with the date of service of the notice;

(d) if during the said period or extended period the Minister serves notice on the board that he does not so object as respects any period after the commencement date;

and the said Part I shall, as respects any period before the commencement date, be deemed not to have applied to an agreement to which it does not apply by virtue of this subsection as respects a subsequent period.
(4) Subsections (2) and (3) of this section shall have effect in relation to a Northern Ireland board as if for any reference to the powers mentioned in subsection (2) of this section there were substituted a reference to the powers mentioned in subsection (1) of section 14 of the Agricultural Marketing Act (Northern Ireland) 1964 (which section corresponds to the said section 20).
(5) Nothing in this section shall be construed as derogating from the powers of the Minister to give directions at any time under the provisions of the said Acts of 1958 and 1964 which are mentioned in subsections (2) and (4) of this section.
(6) In this section—
"agreement" means an agreement within the meaning of Part I of the Restrictive

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Trade Practices Act 1956 to which apart from this section, the said Part I applies;
"board" means a board constituted by a scheme made or having effect as if made under the Agricultural Marketing Act 1958 and includes a Northern Ireland board;
"the commencement date" means the date of the passing of this Act;
"the Minister", except in relation to a Northern Ireland board, has the same meaning as in the said Act of 1958 and, in relation to a Northern Ireland board, has the same meaning as in the Agricultural Marketing Act (Northern Ireland) 1964; and
"Northern Ireland board" means a board constituted by a scheme made or having effect as if made under the said Act of 1964;
and for the purposes of subsection (2) of this section an agreement shall be treated as entered into by a board in the exercise only of the powers mentioned in that subsection, or that subsection as modified by subsection (4) of this section, notwithstanding that the agreement contains provisions entered into by the hoard in the exercise of other powers if the Minister is of opinion that those provisions are incidental provisions only."
The noble Lord said: This Amendment appears to be a long and complicated one, but its purpose is not so complicated. It is to clarify the position of Agricultural Marketing Boards in relation to the Restrictive Trade Practices Act 1956. The situation at the moment is this. Section 8(1) of the Restrictive Trade Practices Act provides that any agreement which is "expressly authorised" by Statute shall be exempt from that Act. Marketing Boards have of course been set up under schemes approved by Parliament and provided with certain powers, including powers to make agreements, and it had therefore been thought that they were very largely exempt from the operation of the Act. But it appears that there may be some ambiguity here, that there may be some narrow interpretation, and this Amendment, providing for a new clause, seeks to set the position beyond doubt. I beg to move.
Amendment moved—
After Clause 43, insert the said new clause.—(Lord Beswick.)
Clauses 44 to 47 agreed to.
Clause 48 [Interpretation, etc.—general]:
LORD BESWICK: This Amendment, affecting the definition of "the Minister"
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arises consequentially from the new clause which has just been accepted by the Committee. I beg to move.
Amendment moved—
Page 40, line 12, at beginning insert ("Subject to subsection (6) of section (Modification of Restrictive Trade Practices Act 1956 in relation to agricultural marketing boards of this Act.").—(Lord Beswick.)
Clause 48, as amended, agreed to.
Remaining clauses agreed to.
LORD BESWICK LORD BESWICK moved, before Schedule 1, to insert the following new Schedule:
"TRANSITIONAL PROVISIONS RELATING TO PAY MENTS UNDER S. 9 IN ENGLAND AND WALES
1. Where the relevant notice is served on the tenant after the initial date but not later than the commencement date and does not contain such a statement as is mentioned in section 24(2)(a) or (b) of the principal Act or section 10(1)(b) or (c) of this Act, then—

(a) if an application for consent in respect of the relevant notice is made in pursuance of section 24(1) of the principal Act not later than the commencement date, any such statement as is mentioned in the said section 10(1)(b) which is included in the application shall be treated for the purposes of section 10 of this Act as included also in the relevant notice; and

(b) if, in a case not falling within subparagraph (a) above, the landlord serves on the tenant, before or after the commencement date but before the expiration of the period of two months beginning with that date, a notice containing such a statement as is mentioned in the said section 10(1)(b) or (c) and indicating that the relevant notice is to be treated as having always included that statement, the relevant notice shall be so treated for the purposes of the said section 10.

2. Where either—

(a) the relevant notice is served on the tenant not later than the commencement date and contains such a statement as is mentioned in the said section 10(1)(b) or (c); or

(b) a notice is served on the tenant under paragraph 1(b) of this Schedule,

and in either case no counter-notice in respect of the relevant notice in question has been served in pursuance of section 24(1) of the principal Act and the period during which such a counter-notice may be served has expired, the tenant may, within the period of two months beginning with the commencement date or, where the notice under paragraph 1(b) of this Schedule is served on a later date, beginning with the later date, make an application to the tribunal for a determination that the tribunal are satisfied that the

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relevant notice was given in order that the land in question may be used otherwise than for agriculture.
3. Where the tribunal have, on or before the commencement date, given a decision consenting tinder section 24(1) of the principal Act to the operation of the relevant notice and either—

(a) the reason given by the tribunal for their decision is that they are satisfied as to the matter mentioned in section 25(1)(b) of that Act; or

(b) the reasons so given include that reason but not the reason that they are satisfied as to the matter mentioned in section 25(1)(e) of that Act,

the tenant may, at any time before the expiration of the period of two months beginning with the commencement date, make an application to the tribunal for a determination that the reasons for their decision would have included the reason that they were satisfied as to the matter mentioned in the said section 25(1)(e) if that matter had been specified in the application for consent.
4. Where the tribunal make a determination under paragraph 2 or paragraph 3 of this Schedule, section 10(1) of this Act shall not apply in relation to the relevant notice in question.
5. In this Schedule—
"the commencement date" means the date of the passing of this Act; and
"the relevant notice" and "the tribunal" have the same meanings as in section 10 of this Act."
The noble Lord said: We have already agreed to the paving Amendments to this new Schedule. The Schedule itself seeks to set right a problem which arose in another place, and the Minister there agreed to meet the point that had been raised. It has been pointed out to him that a landlord who serves notice to quit soon after the introduction of the Bill might well have failed to appreciate the effect of these clauses—I think the noble Lord, Lord Henley, raised a similar point here—and might serve what is known as a plain notice to quit, not realising what he was letting himself in for. This Schedule will enable him to take advantage of a transitional period, and I hope it will be accepted. I beg to move.
Amendment moved—
Before Schedule 1, insert the said new Schedule.—(Lord Beswick.)
LORD BESWICK LORD BESWICK moved, before Schedule 1, to insert the following new Schedule:
"TRANSITIONAL PROVISIONS RELATING TO PAYMENTS UNDER S. 9 IN SCOTLAND
1. Where the relevant notice (not being a notice given in pursuaice of section 6(3) of the Agriculture Act 1958) is served on the tenant after the initial date but not later than the commencement date and does not contain such a statement as is mentioned in section 25(2)(c) of the principal Scottish Act or section 11(1)(a) or (b) of this Act, then—

(a) if an application for consent in respect of the relevant notice is made in pursuance of section 25(1) of the principal Scottish Act not later than the commencement date, any such statement as is mentioned in the said section 11(1)(a) which is included in the application shall be treated for the purposes of section 11 of this Act as included also in the relevant notice; and

(b) if, in a case not falling within subparagraph (a) above, the landlord selves on the tenant, before or after the commencement date but before the expiration of the period of two months beginning with that date, a notice containing such a statement as is mentioned in the said section 11(1)(a) or (b) and indicating that the relevant notice is to be treated as having always included that statement, the relevant notice shall be so treated for the purposes of the said section 11.

2. Where the relevant notice is given in pursuance of section 6(3) of the Agriculture Act 1958, is served on the tenant after the initial date but not later than the commencement date and does not contain such a statement as is mentioned in section 11(7)(b) of this Act, then, if the landlord serves on the tenant, before or after the commencement date but before the expiration of the period of two months beginning with that date, a notice containing such a statement is mention in the said section 11(7)(b) and indicating that the relevant notice is to be treated as having always included that statement, the relevant notice shall be so treated for the purposes of section 11 of this Act:
Provided that this paragraph shall not have effect where the relevant notice is a notice to which, apart from the provisions of section 19 of this Act, the said section 6(3) would apply.
3. Where the relevant notice is a notice to which, apart from the provisions of the said section 19, the said section 6(3) would apply, and the landlord in a notification to the tenant under section 19(2) of this Act specifies a matter set out in section 26(1) of the principal Scottish Act, then—

(a) in the case of a matter set out in paragraph (a), (b) or (c) of the said section 26(1), the relevant notice shall be treated for the purposes of section 11(1)(a) of this Act as if it had always contained a statement of that matter as a ground on which the carrying out of the purposes for which the landlord proposes to terminate the tenancy is desirable;

(b) in the case of the matter set out in paragraph (d) of the said section 26(1),

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the relevant notice shall be treated for the purposes of section 11(1)(b) of this Act as if it had always contained a statement that the landlord would suffer hardship unless the notice had effect.

4. Where either—

(a) the relevant notice is served on the tenant not later than the commencement date and contains such a statement as is mentioned in the said section 11(1)(a) or (b); or

(b) a notice is served on the tenant under paragraph 1(b) of this Schedule,

and in either case no counter-notice in respect of the relevant notice in question has been served in pursuance of section 25(1) of the principal Scottish Act and the period during which such a counter-notice may be served has expired, the tenant may, within the period of two months beginning with the commencement date or, where the notice under paragraph 1(b) of this Schedule is served on a later date, beginning with the later date, make an application to the court for a determination that the court are satisfied that the relevant notice was given in order that the land in question may be used otherwise than for agriculture.
5. Where the court have, on or before the commencement date, given a decision consenting under section 25(1) of the principal Scottish Act to the operation of the relevant notice and either—

(a) the reason given by the court for their decision is that they are satisfied as to the matter mentioned in section 26(1)(b) of that Act; or

(b) the reasons so given include that reason but not the reason that they are satisfied as to the matter mentioned in section 26(1)(e) of that Act,

the tenant may, at any time before the expiration of the period of two months beginning with the commencement date, make an application to the court for a determination that the reasons for their decision would have included the reason that they were satisfied as to the matter mentioned in the said section 26(1)(e) if that matter had been specified in the application for consent.
6. Where the court make a determination under paragraph 4 or paragraph 5 of this Schedule, section 11(1) of this Act shall not apply in relation to the relevant notice in question.
7. In this Schedule—
"the commencement date" means the date of the passing of this Act; and
"the court" and "the relevant notice" have the same meanings as in section 11 of this Act."
The noble Lord said: This is a similar Schedule to the one we have just accepted, and is applicable to Scotland. I beg to move.
Amendment moved—
Before Schedule 1, insert the said new Schedule.—(Lord Beswick.)
Remaining Schedules agreed to.
LORD BESWICK: This Amendment to the Title is consequential on the new clause, Clause 43, in Amendment No. 36 which we accepted just now. I beg to move.
Amendment moved—
In the Title, line 18, after ("1949") insert ("the Restrictive Trade Practices Act 1956 in its application to agricultural marketing boards").—(Lord Beswick.)
Title, as amended, agreed to.
House resumed: Bill reported, with Amendments.

SOCIAL WORK (SCOTLAND) BILL [H.L.]
8.40 p.m.
LORD HUGHES: My Lords, in rising to move the Second Reading of this Bill
"to make further provision for promoting social welfare in Scotland",
I feel more certain than on the previous Bill that your Lordships will share my pleasure in discussing it. It is a challenging and exciting Bill, but, despite that, it will not be without its controversies.
The Bill is designed to implement the policies which were proposed in the White Paper, Social Work and the Community, which in turn were partly based on the recommendations of the Committee on Children and Young Persons, Scotland—the Kilbrandon Committee. It is fitting that I mention again the debt which we owe to Lord Kilbrandon and his Committee for their analysis of the problems of juvenile delinquency. I am aware that Lord Kilbrandon has been waiting for a very long time to hear us discuss the Second Reading of the Bill which has arisen from the deliberations of his Committee. I must commend him for his fortitude in remaining so long to hear it. I hope that at the end of the debate he will feel that the long wait has been worth while.
After the Report had been discussed, my right honourable friend announced in

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another place, in June, 1965, that he proposed to act on the recommendation that a system of juvenile panels should be set up to replace the existing juvenile courts in Scotland. In August the same year, he announced that the Government also accepted the recommendation that the public services concerned with the welfare of children should be reorganised, for the reasons which the Kilbrandon Committee explained, but that before deciding on the form which that reorganisation should take he proposed to have a further study made of it. In that study of the reorganisation of children's services, the field was widened to include all the welfare services of local authorities and the Probation Service, because they are all closely related. The Bill is the result.
It seeks to do two broad things. One is to integrate all the existing services of local authorities which are concerned with the social support of individuals and of families. This is to be achieved by bringing together the existing welfare and child-care services and by giving the new organisation powers which are more general and a little wider than those which they possess under existing legislation. The new organisation will also include the probation service. The other main effect of the Bill will be to set up a new kind of body to deal, under some measure of compulsion, with children who, because they are delinquent or for some other reason, are in need of care and protection. This body is closely based upon the recommendations of the Kilbrandon Committee, although we have decided to call it a children's panel rather than a juvenile panel as the Kilbrandon Committee recommended.
As I have said, the duties and powers of local authorities will be in more general terms than in current legislation. That legislation has been built up over the years mainly by identifying from time to time various groups of people who were in need of a particular form of help. For this reason the legislation was couched in terms of categories of situation or categories of people. It has been very valuable, but our experience shows that to try to cover the field by defining people who need help implies frequent legislation to extend the powers of local authorities as new kinds of need are recognised. To realise this makes clear
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the need to legislate for welfare purposes in a rather different way. Our great need now is to create an effective organisation and to give it a wide power to help where it is needed and to develop services as new needs are recognised. Naturally, this approach does not mean that we expect that an Act of Parliament can create a service which will at once he able to meet every demand that is placed upon it. Resources will never be unlimited, and it would be foolish to ignore this fact; but a single organisation will be able to apply its resources in a most effective way.
Part I of the Bill sets up the administrative machinery for that purpose. It requires every local authority to appoint a social work committee and a new chief officer who, with his assistant staff, will form the social work department presaged in the White Paper. This department of the local authority will discharge the local authority's new powers under the Bill and also the authority's existing functions in relation to child care generally, the support in the community of people who are physically or mentally ill and the welfare of the elderly and handicapped. It will no longer be necessary for someone seeking advice or help to decide in the first instance which department of the local authority he must approach. Advice for all such people will be available from or through the social work department.
This Part of the Bill provides also for the Secretary of State to give general guidance to local authorities in the provision of those services. It sets up a new Advisory Council concerned with the whole field of social welfare and gives both to the Secretary of State and to local authorities rather wider powers than they now have to grant-aid voluntary organisations. It gives to the Secretary of State powers to stimulate and grant-aid training over the whole field of social work, powers which he presently has only in relation to child care.
The last provision in this Part which I wish to mention specifically is that provided in Clause 1, that the functions of local authorities under the Bill will be laid on county councils—which include, of course, the councils of the four cities, and the councils of large burghs. The White Paper made clear that the factors relating to the size of administrative

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units did not all point in the same direction, and its suggestion that a comprehensive social work service should be based on counties and cities was made only "on balance". The comments made on the White Paper, and changes in the general situation since its publication, have been considered very carefully. We have to recognise that the existing welfare functions which will form a large part of the duties of the new social work department are at present functions of the large burghs. It has been made clear from their comments on the White Paper that the large burghs want to retain those functions.
The further thought which has been given to these considerations has led to the conclusion that the balance of advantage lies now in allowing the large burghs, as well as the counties and cities, to retain welfare functions, and this is what is provided in Part I of the Bill. This provision does not, of course, prejudge any recommendations which the Royal Commission may make on local authority structure or on the best place for social work within that structure. My Lords, I have dealt with this point in some detail because I am aware that it is one on which your Lordships will not be all of the same mind.
It may be convenient if I turn next to another matter which is likely to be the other main point of controversy about local authority services. This is the provision in Clause 26 of Part II, that in Scotland the local authority will be responsible in future for the Probation and After-care Service, as part of the duty of their social work department. On this point again the arguments were set out in some detail in the White Paper, which concluded that "on balance" it would be best if all the present functions of the Probation Service were undertaken by the local authority social work department. Since then, the views of the Probation Service have been expressed very fully and clearly and have been very carefully considered with those of other bodies. On this point we have concluded that the balance of advantage as assessed in the White Paper remains sound, and is, if anything, clearer now than it was then. The main purpose of Part II of the Bill is to create a really comprehensive social work service. This cannot
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be achieved if probation and after-care, which are agreed to be rather specialised branches of social work, are kept separate.
Clause 26 provides that each local authority must consult the courts in the area and thereafter submit a scheme for the provision of probation services. This is designed to ensure that the courts will continue to be able to influence the development of these services, which are, of course, provided mainly to enable the courts to deal properly with offenders. Members of the Probation Service in Scotland are no less likely than other staffs to secure, within the new structure, posts which will offer both professional scope and material conditions at least as good as they now enjoy.
Having rather turned aside to deal with these topics, I should like to revert now to the provisions of Part II, which sets out the duties and powers which the Bill gives to local authorities. Clause 12 gives the local authority a general duty to promote social welfare. This phrase is the hub around which the whole Bill turns. I have no doubt that the promotion of social welfare includes, by general consent, a number of concepts such as the prevention of crime and delinquency, neglect and deprivation. It would have been possible in drafting Clause 12 to make use of all these concepts and to formulate the local authority's duty in that way. It is high time, however, that we stopped concentrating on the prevention of this, that and the other kind of social inconvenience, and started to think positively and constructively about encouragement of whatever is good in each community. This, of course, is not a new idea. I think it was Beatrice Webb who said a long time ago that it was not good enough to pull people out of swamps: we ought at the same time to set about draining the swamps. This is what we now hope to do. That is what the promotion of social welfare means.
Clause 12 goes on to provide that in carrying out their duty to promote social welfare, the local authority must do two main things. They must make available advice, guidance and assistance as may be appropriate in their area. This means in practice the setting up of a comprehensive social work service by each local authority, and making that

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service available to the community. The other main thing which the local authority are required to do is to provide a range of facilities including residential homes and centres and day centres.
This general duty of the local authority is set out in the first subsection of Clause 12. The remaining subsections empower the local authority in certain circumstances to exercise their general duty by giving assistance in kind or in cash. This power exists, so far as children are concerned, in Section 1 of the Children and Young Persons Act 1963; Clause 12 continues this power and extends it to cover situations in which children are not involved but in which the power to provide even a comparatively small amount of material help may avoid a social breakdown. I think it is important to stress that the intention here is not that the local authority should become a prime agency for giving financial assistance or should disburse large sums of money but that they should be able, in exceptional circumstances and in emergency conditions, to provide enough help to contain a situation until other arrangements can be made. The very recent disaster in Scotland that was consequent upon the hurricane was an example of where the local authorities had to go ahead and do what was the common-sense thing, without worrying too much, if I may reveal it, whether in fact they had legal power to do some of the things which obviously had to be done and which, if they had not been done by the local authority, would not have been done by anybody. We want to make certain over the field of social welfare that these things can be done in cases of emergency without worrying whether it is legal or not to do so.
Clause 13 imposes a duty on the local authority to provide domestic help for households where it is required either for social reasons or for health reasons. The local authority's existing function is a power to provide such help where it is necessary for reasons of health. This power is changed to a duty by the provisions of the Health Services and Public Health Bill which is now before Parliament. The effect of Clause 13 is to extend this duty to cover situations where the immediate problem is social. Clauses 14 to 25 of the Bill re-enact for Scotland the
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main provisions of the Children Act 1948, without substantial alteration.
I now turn to the provisions of Part III of the Bill, which deal with the setting up of children's panels and the ways in which these panels will carry out their functions. In detail these provisions follow very closely on the recommendations of the Kilbrandon Committee. This fact is probably the most sincere tribute which can be paid to the value of that Committee's work. I do not propose to go into the detail of these provisions. I should like, however, to bring out one or two of their most significant effects.
A child may be brought before the children's panel for the first time only if he has not attained the age of 16. The grounds on which he may be brought before the children's panel are very much those on which he may at present be brought before a juvenile court, so that the Bill does not propose any substantial widening of the present basis on which compulsory measures may be imposed on a child. The children's panel, or rather the children's hearing through which the panel will conduct its business, will have no power to decide any facts which may be in dispute. That power will rest entirely with the sheriff, to whom the children's hearing will have to refer any disputes on fact before it can deal with any child. Where the facts are not in dispute, or after they have been determined by the sheriff, the children's hearing is given a wide discretion to decide on the measures of treatment or control which are most appropriate in the circumstances of the child, and the decision of the children's hearing will be binding on the child with the force of law. It could be argued that there are risks in investing a lay body with this wide range of compulsory powers over a child. But there will be safeguards in the careful selection of people to serve on these panels (the method of selection is provided for in Schedule 2 of the Bill), in the rules of procedure which will be made for their guidance and in the full rights of appeal to the courts as provided in Part III.
Once a child comes under the control of a children's hearing the hearing is required by the provisions of the Bill to keep his case under review and to withdraw compulsory measures as soon as the child no longer needs them. The

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child may be kept under the control of the hearing up till his 18th birthday if this is necessary, but after his 18th birthday the children's hearing will no longer have any power over him.
Part IV of the Bill is concerned with the provision and regulation of the residential and other establishments which the local authority are given a duty to provide by Clause 12 of the Bill. Part IV makes no statutory distinction between different kinds of establishment, and it applies in exactly the same way to homes and day centres for children at one end of the scale and homes and centres for elderly people at the other. It applies to all establishments where they are provided and managed by the local authority themselves, by voluntary organisations or by private bodies or individuals, whether on a commercial basis or not. Any establishment carried on mainly to provide for people who could be assisted by the local authority under this Bill is required by Clause 62 to be registered with the local authority, who are given the powers of entry and inspection which will be necessary to ensure that the registration is effectively carried out. Part IV provides also for appeals against the refusal of a local authority to register any establishment.
One effect of the Bill is that the present approved schools will become part of the whole range of establishments available to children's hearings for the care and treatment of children who come under their control. Children will no longer be sent to these establishments by courts, and the length of time which any child will remain in these establishments will be decided by the appropriate children's hearing, who will of course, be guided in reaching such decisions by the advice of the managers and staff of the establishment concerned. The name "approved school" is abolished, because it will no longer be appropriate. There is, however, no intention of making any dramatic or quick change in the ways in which the present approved schools are provided and administered. The precise ways in which the present approved schools will grow into the new system must be worked out in practice over the next few years by the managers themselves, in consultation with the local authorities and my right honourable friend.
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My Lords the effects of Parts V, VI and VII of the Bill are sufficiently clear without anything being said by me. My final point is that although the formation of a local authority social work department under the Bill will provide an integrated service able to tackle any social work problem, this does not mean that the new department can or should become a self-contained group within the local authority. It will be able to do its job properly only if it develops good working arrangements with schools, hospitals, general practitioners, the local health authority services, the courts and the police, as well as with planning and housing authorities, with the Ministry of Social Security and with voluntary bodies of many kinds.
As the Bill is concerned with local authority services it says very little about voluntary work, in which some of your Lordships are very interested. In so far as it extends the functions of local authorities, the Bill might be interpreted as reducing the scope for voluntary work. I wish to reject this suggestion very firmly. It is true that the work of some voluntary organisations will become a duty of the local authority, and these organisations may want to take a fresh look at their work in the new circumstances. They are well able to do that, and the advisory services of my Department are fully available to help in this if they are asked. There is plenty of scope, too, for consultation between voluntary organisations and local authorities about the future development of their respective services. It would be quite inappropriate for the Bill to define or even indicate how voluntary organisations should develop their work. But the local authorities' ability to employ voluntary organisations as agents is fully preserved, and the powers of both the Secretary of State and local authorities to give grants to voluntary organisations are in fact extended. Moreover, the setting up of children's panels opens up to voluntary effort a whole new field of great opportunity and challenge. I have no hesitation in saying that although the forms and perhaps the emphasis of voluntary work may change, the scope and value of voluntary work is likely to be greater in the future, rather than less.
My Lords, the thought and intention underlying this Scottish Bill, and its progress in this House and in another place,

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are matters of interest well beyond Scotland—even beyond the United Kingdom. The quality of any society may depend largely on the stature and calibre of the people who shape it, but in the last resort it will be judged by the humanity it shows towards those who are shaped by it. I believe that this Bill offers us the means to extend that humanity in accord with our social conscience, and I commend it to your Lordships. I beg to move that this Bill be now read a second time.
Moved, That the Bill be now read 2a.—(Lord Hughes.)
9.5 p.m.
THE MARQUESS OF LOTHIAN: My Lords, I should like to begin by thanking the noble Lord, Lord Hughes, for the most clear and expeditious way in which he has explained this Bill to your Lordships. I think we are all sorry that this very important Bill has had to come on so late at night in your Lordships' House. I realise that it is not the fault of the noble Lord, Lord Hughes, who has indeed had a marathon already this afternoon, but I hope that when we have Bills of this importance which are started in your Lordships' House it will in future he possible to arrange the business so that they come on at a more convenient hour.
LORD HUGHES: My Lords, I wonder whether I might interrupt the noble Marquess? I think that in fairness to the Chief Whip I should point out that this was to have been the sole major business for to-day; but in order to meet the convenience of certain Scottish Peers who could not attend the agriculture business on Tuesday, that business was deferred until to-day, and when we deferred it we had no indication that it was going to take anything like the time which it actually took. So the Chief Whip cannot be blamed for the fact that we are starting on this Bill at this very late hour.
THE MARQUESS OF LOTHIAN: My Lords, I of course accept that from the noble Lord. Perhaps in future some of your Lordships will not be so loquacious. Nevertheless, I hope that it will be possible for these Bills to come on at an earlier hour in future.
I should like to extend a general welcome to this Bill because I am convinced,
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as I am sure are all noble Lords, of its great importance. We consider it favourably and at the same time we believe that it may be improved in several respects. I should like to assure the noble Lord that any criticisms and suggestions which are offered by my colleagues and me are offered in an entirely constructive spirit. I am sure that this will be matched by the noble Lord, Lord Hughes. I should also like to say that I hope it will not be felt necessary to rush this Bill too quickly. lf, for instance, on Committee stage we find that we need more than one day, perhaps it may be accorded to us.
As the noble Lord, Lord Hughes, has said, this Bill introduces radical changes in the system whereby local authorities in Scotland administer their social and welfare services. It is based on the Report of the Kilbrandon Committee and the White Paper, and I should like to echo the noble Lord's tribute to the noble Lord, Lord Kilbrandon, and his Committee for their excellent Report, which is almost a milestone in Scottish social affairs.
The Bill has two fundamental purposes. First, it brings together all the various local authority social services into a single social work department and under a director of social work. Secondly, it abolishes juvenile courts and sets up instead children's panels composed of lay persons of experience, whose decisions, if disputed, can always be subject to appeal to the sheriff. I have no quarrel at all with either of these two aims—indeed, I support them. But I ant worried about the timing of the Bill. I am not referring to the fact that it is ten past nine at night. I think it is common knowledge that we are expecting the report of the Royal Commission, on Local Government in Scotland, under the chairmanship of the noble Lord, Lord Wheatley, some time in the autumn. No doubt this report will recommend pretty radical changes in the number and shape and size of local authorities. Yet this Bill as it stands will set up something like 56 social work departments based on the present local authority areas, including the large burghs. Many of these areas, I suspect, will become superfluous and disappear in any proposed local authority reorganisation.
I feel that it will be demoralising, to say the least of it, to a new department

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when it is faced with the imminent threat of redundancy or at any rate complete reorganisation. I realise that the Government cannot withdraw this Bill, but I would ask the noble Lord most earnestly to consider delaying the date of the Bill's coming into operation, at any rate until six months from the date of publication of the Wheatley Report, because this would give valuable guidance to local authorities who may be planning amalgamation schemes. I feel that it is essential to have this time if a certain amount of chaos and demoralisation is to be avoided. I hope that the Government will consider this point.
Then we come to the question of the large burghs. The noble Lord has told us about their inclusion but I am still not quite clear exactly how and why they have crept into the Bill. I do not think that they were included in this context either in the Kilbrandon Report or in the White Paper. I am sure that no one suggests that some few of the large burghs in Scotland are not perfectly well equipped to sustain a viable social work department, but I feel that many of the so-called large burghs are in practice not really large enough to run such a department properly. I feel that financially they may not be able to attract good and sufficient staff. Career prospects, therefore, will be pretty bleak and the department's efficiency and—what is most important—the welfare of the community are bound to suffer.
I hope that the Government will think again about the proposal to include the large burghs, because a great many of my colleagues and I, and many bodies up and down Scotland, feel that their inclusion is going to weaken what is in general a very wise and sensible scheme. What I think is important is that any social work department should be large enough to offer good financial inducements for good staff, and by their competence and prestige should be able to command the respect of the community which they are going to serve. To this end, of course, much is going to depend on the personality and calibre of the new directors of social work, and I should have liked to know a little more about the sort of qualifications that the Secretary of State has in mind for applicants for this post. For instance, will they require legal qualifications? Will women be eligible (I
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should hope so), or employees of local authorities? Is there any special training or qualifications that the new directors of social work will be required to have? Questions like this, I feel, want answering a little more before we can make up our minds.
In this connection, I have a small matter to raise on Part I of the Bill, concerning Clause 2(3), where it lays down that at least half the members of the new social work committees or subcommittees must be members of the authority: in other words, that half of them can be co-opted. Personally, I think that the ratio should be something different, and that the local authority members ought to be in the region of two-thirds. Otherwise, there might be occasions when, through illness or some other difficulty, the co-opted members would be in a majority over the elected members; and I think this is something which is probably undesirable in local government.
While I am on the point of co-opted members, I should like to endorse what the noble Lord has said about the continuing need and importance of enlisting aid and experience of voluntary organisations and societies working in the social field. I regard this as of the utmost importance, because, as the noble Lord has said, there is such a fund of wisdom and experience there to draw on.
The noble Lord has told us pretty fully the Government's point of view regarding the role of the Probation Service in the light of this Bill. I think we all know that many members of that Service are not at all happy about the proposed change of status of the Service, and want its independence to be preserved. I know that several of my noble friends are going to pursue this matter, and therefore I do not propose to discuss Clause 26. But I welcome the general proposal to remove from juveniles under 16 the whole paraphernalia and atmosphere of the courts.
This brings me to Part III of the Bill. I know that there are those who believe that the apparatus of the law and the majesty of the courts are invaluable elements in the treatment of young offenders, in that they create a healthy respect (so it is said), if not fear of authority. My own feeling is that this holds true for only a small minority of cases, and that

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the proposed new children's panels, with their more relaxed, informal and sympathetic atmosphere, will be much better suited, in the majority of cases, to sorting out juvenile problems. It is, I think, important that the panels should operate by parental consent, and I am glad to note that in the case of dispute there is the right of appeal to the sheriff against the decision.
I should like to make one or two brief observations regarding the children's panels and their duties. In the first place, I think there should be a limit on the length of time that a person may serve on a panel before his appointment is reviewed, for it is most unlikely, even with the best will in the world, that all members of panels will be equally effective. I feel certain that from time to time there may be a few "duds" among them, and I do not think the panels should be saddled indefinitely with these people. I believe, too, that there should be an upper and a lower age limit for membership of the panels. I would suggest something in the region of, say, between 25 and 65. I believe that it is going to be important to have younger members of both sexes serving on the panels—housewives, and people like that, who have experience of children and of families from the practical point of view.
I was also glad to see that local authorities are to have power to arrange training for panel members. But I do not think that, under the Bill as it stands there is any obligation to accept training. I think this should be made obligatory, because, in a sense, much is going to be lost with this Bill if professionals, experts, are to be replaced by amateurs on these panels. I think this is something that the local authorities should be encouraged to avoid at all costs. Also, there does not appear to be any provision whatever—perhaps there need not be—for a member of the panel to withdraw from a case if he finds he is confronted by somebody in whom he has a personal interest or with whom he has a personal connection. It is a small point, but perhaps the noble Lord will look into it.
I am glad to see that the hearings of these panels are to be in private, although I imagine that the procedure will be flexible enough to enable panel members who are undergoing training to be able to attend hearings. Under the Bill a
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hearing consists of three members of a panel—a chairman and two others, one of whom, I believe, must be a woman. I am wondering whether this number is perhaps too small. I can think of cases where there might be a powerful and overriding personality dominating the other two, and I think that, at any rate to begin with, there should be rather more flexibility here: perhaps panels should consist of anything from between three and five members. This is one of those cases where we shall probably find out through hindsight what is the best answer, but I feel that it would be wise not to restrict the panels to three members at the moment.
Turning briefly to the question of the reporter, I do not think this is a very happy title for this office. I have not thought of a better one, but perhaps I shall do so before the Committee stage. This gentleman will obviously be a key figure in the whole set-up, and here again I think it would help the House to have a little clearer idea of what qualifications are required for this office. It would seem almost essential that he should have, for example, some form of legal training. And should there not also be a time limit to the appointment of a reporter? One problem has been brought to my attention in my own part of the world, which is a scattered rural area; namely, that it is unlikely that there will be enough work for a full-time reporter, and I am wondering whether there is any provision for this to be a part-time appointment.
Several noble Lords are to speak tonight, and therefore I do not intend to comment on the provisions governing the working of these panels, the provisions for accommodation, appeals, and so on. I have tried to concentrate on some of the broader issues because I believe that this is a most important Bill for Scotland, and one that will affect the lives of many of our people, particularly our young people and their parents. It will make a great difference as to whether or not these youngsters grow up into useful and valuable citizens.
Nevertheless, I think we must remember that in this Bill, in some ways, we are sailing into somewhat uncharted seas, and therefore it is doubly important that the ship should be in the best possible trim. That is why we on this side of the House shall want to scrutinise the Bill

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with some care, and in a helpful spirit. I hope that the noble Lord will feel able, when it comes to the next stage, to treat on their merit any Amendments we may put down and not as something rather inconvenient to the timetable which may have to be resisted for reasons of timing. We have had examples of this in the past, and I know that the noble Lord would not wish it to happen in connection with this Bill, because I am sure we all want to do our best to make it work as well as possible. I trust that your Lordships will give it a Second Reading to-night.
9.25 p.m.
LORD AMULREE: My Lords, before I start to make my few comments I should like to associate myself with what the noble Marquess said about the rather unfortunate timing of the Bill. At the same time, I would associate myself with the thanks given by the noble Marquess to the noble Lord, Lord Hughes, for his explanation. I just hope that this kind of thing will not occur again.
When the Report of the Kilbrandon Commitee first came out, and again when the White Paper, Command 3065, was first published in 1966, I did not pay any particular attention to them, because although the subject of young people is a very important one my main interests lie in a different part of life. Then my attention was drawn to the White Paper by various colleagues of mine in Scotland engaged in geriatric work and I did read the White Paper fairly carefully, and there I saw that whereas the bulk of the White Paper dealt with the various problems of children, which I do not want to go into, there were two paragraphs, paragraphs 32 and 33, which suddenly, for no apparent reason at all, were headed "Welfare of Old People"; and that was about all that was said. When I read those paragraphs in conjunction with the rest of the Paper I became much more interested. I thought there was a bad idea coming from Scotland and I wished to do what I could to stop it from crossing the Border, which is why I think for the first time in my life I am speaking on a Scottish Bill; I generally am very careful not to do that.
The reason for my worry was quite simple. In the first place, I think a
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local authority with a welfare department with a single door has a good deal to be said for it, provided the door is not kept tightly or rigidly shut but can be pushed to and fro simply. But I am not quite sure that a door of that sort is appropriate for old people, because they pose a large number of problems. One must realise that it is not old age in itself which causes the problem, but when there is some breakdown in the physical or mental health of the old person which means that they begin to need some kind of care and assistance. That means, too, that one cannot really divide the problems of old people neatly and tidily into two compartments, one medical and one social. One of the things which I found in Scotland by making inquiries up there is that there has been a great improvement in the efficiency of the services for the elderly during the past decade by the unification of the health and welfare services in—I think I have the figure right—26 of the major local authorities in Scotland. I would therefore ask the noble Lord whether when the new social welfare department is in being this present alliance between the health and welfare services will continue, or will the welfare services be taken away from the health service and put into the new social welfare department?
May I give an example of what I am talking about? Under the Bill, so far as I can see, admission to an old people's home will be the responsibility of the new social welfare department, but I feel that admission to a home should be based entirely on incapacity rather than social need. I think you must have expert opinion covering admission to these homes, because otherwise—and indeed one has seen this occur in this country quite frequently—services which are not very plentiful, which are limited, are wasted on people who do not require them. Therefore I feel there is a need for quite a powerful medical opinion to be given before a person is admitted to such a home.
The example which comes to my mind at once is this. I once went to a big home in London where there was a comparatively young, fit looking woman. I asked her why she was there. She said she had been there for 15 years, having come there when her husband died. She

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felt lonely, and people began to talk—I never knew what about—and she was admitted to the welfare home where she lived comfortably for 15 years. That is a good thing to happen if you have a really prosperous community in which you can afford these luxuries, but when you have to look carefully at the way money is spent you must have a good medical reason for such admissions. That is why I rather doubt whether a social welfare department by itself, separate from the health department, is really right.
The same thing applies to some of the domiciliary services, particularly the home-help service. I think I am right in saying that the majority of people applying for this service are the elderly people. There, once more, I think some kind of medical background is needed for the service. I should like to ask the noble Lord whether he can give some kind of reply to these two questions, because I am rather worried about the increasing role of the social worker as opposed to the medical worker in the field. I always feel that the change started with the somewhat unfortunate Younghusband Report which was implemented by the Government some years ago. One of the effects of that, among other, legislation has been that it becomes extraordinarily difficult for the Hospital Service to obtain the services of medical and social workers, and psychiatric social workers, because they all get taken up by the local authorities. If you are going to have a social welfare department, I feel even more of them will be taken up by local authorities.
If elderly persons need some kind of umbrella under which to shelter from the storms which assail them when they grow old, one should have some kind of medical umbrella, working under the health department of the local authority, which runs clinics, gives talks and lectures and that kind of thing, rather than a purely social umbrella, which it looks to me as if we may be creating here. This is something which I have said more than once in your Lordships' House; I have said it unashamedly three, four or five times, and I shall go on saying it so long as I am a Member of your Lordships' House. In regard to its other aspects the Bill seems to have a lot of good points. We may have to consider it again in Commit-
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tee, but I trust that your Lordships will give it a Second Reading.
9.34 p.m.
THE EARL OF MAR: My Lords, this is my first speech in your Lordships' House and I am certain that you will be patient. I speak on the case for delaying this Bill. It is obvious from the historical background in the evidence to the Royal Commission on Local Government in Scotland of the Association of County Councils for Scotland that the allocation of social work functions has been a controversial issue for a long time. Therefore, the decision of the Secretary of State to alter existing administrative pattern must cause serious embarrassment to the Royal Commission which is reaching the end of its deliberations.
At the meeting of the Association of County Councils for Scotland on January 26, 1968, the Secretary of State indicated that a date in May, 1969, would probably be the date to establish the new social work department. But as your Lordships know, the Royal Commission's Report is due at the end of this year, or early in 1969. Thus when that Report is published local authorities will already be establishing work departments in a manner which is contrary to all informed opinion in recent times, and also contrary to Government White Papers.
For example, counties with small populations such as East Lothian, of which I have the honour of being a county councillor, and which has a population of about 90,000, have recognised that they lack adequate resources for the elective administration of their functions, and thus have integrated with their neighbours. We in East Lothian, for the purpose of child care, have integrated with Midlothian and Peebles. But for the purpose of probation we have joined Midlothian, Peebles and also Edinburgh.
If this proposed legislation is passed it will be necessary for us and other counties with small populations to consider whether we should establish separate social work departments, or integrate for the purpose of social work as we cannot afford to compete for staff, which is in short supply anyway. If county councils should decide to combine, with which authorities should they do so? Is it fair to suggest to us that we should come out of our present relationships and start

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again, when there is a possibility or even a probability that in a few months' time the Royal Commission may give a different answer?
The proposals can also be considered unfair to the staff. Inevitably there will be a large number of small units with no career prospects for those working in them, and no certainty that the department will be able to settle down before further disruption takes place by local government reorganisation. It was the original intention that reorganisation of social services would enable Scotland to attract a higher proportion of qualified staff for appointments as directors of social work. There is now no prospect of this high ideal being achieved, because if the department is small the salary will be small, and in any event the staff are sufficiently knowledgeable to know that in smaller departments their prospects are very dim in view of the impending reorganisation of local government.
Again, at the meeting on January 26, 1968, the Secretary of State said that he intended that the Bill should permit combinations of local authorities, and indeed he would encourage combinations. This is why I consider it would be entirely wrong to make new arrangements in advance of the report of the Royal Commission.
9.39 p.m.
BARONESS HORSBRUGH: My Lords, I am so glad that I have the opportunity of congratulating the noble Earl on his maiden speech. He told me that he was not a fluent speaker, but I think we would all agree that he put the case before us clearly and told us what his opinion was, and if that is not a good speech I do not know what is. Speaking now at this late hour one has to consider which points to draw to the attention of your Lordships. All I will say on timing, which has already been mentioned by several noble Lords, is this. When I read in the White Paper that the immediate practical problem in this review is how best to fit the new department into the existing local authority structure, I thought the proposal was completely mad, because it will not be working in the existing local authority structure.
I would ask the noble Lord, Lord Hughes, whether he could not even now point out to his right honourable friend
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that the Royal Commission is about to report, or will do so by the end of the year, and we should at least wait till then. We should consider the problem, as I am going to consider it to-night, in a vacuum, so to speak, and then, having considered what we want to do, we should wait until we find what the structure is and see how we can fit what we want to do into the new structure that may be recommended by the Royal Commission.
This is a Bill of 94 clauses and seven Schedules, and so one has to be very firm with oneself and say, "What shall I select to speak about?" I am very interested in this Bill, and I always have been interested in the particular things that it touches. I would say, first, that it provides for a new grouping of our social services. Whatever grouping you have, you are bound to get a certain element of overlap. A little time ago—I say "a little time ago", but on looking it up I find it is now twenty years ago—we grouped the children's department and the children's officer separately, and then we grouped the recipients of the help that we were able to give. We now turn that round in this experiment—and the whole Bill, it seems to me, is an experiment. I am entirely in favour of such experiments. We can only advance by trial and error, and we can amend or change it later. But the arrangement now is that we should group by the help given and not by the recipients who are going to receive that help.
I looked at the grouping under this new social welfare department, under the new director of social welfare that we are to have. I was interested in this enthusiastic White Paper—enthusiastic, at any rate, in the first few pages—which pointed out that there was one door to which those in need of help could apply for that help, whatever it was, and that they could apply in confidence because they would be sure to get it. My Lords, I can picture the sort of title above this door: "You want help—We give it". I quite agree with that as long as it is made perfectly clear, as it is in the White Paper, that some of the help they can give is advice and guidance; because it is quite clear that there are all forms and types of help that can be given to people, and it cannot all be got under one single department. For instance, under social security you have pensions

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and allowances and the other very varied help that people can get. Then we have the National Health Service and all those who are working in the health department. Then there is the education authority. When we come to read this White Paper we see—and I am not objecting to it; it is bound to be—that there is a certain overlap between all those services. You cannot draw a line and say, "All this is social welfare provided by the local authority, and everything is contained within that limit".
After all, there is the overlap in the case of the health authority. There is bound to be. The social welfare department is to look after people who have been ill, or are ill, and their difficulties. So is the health visitor. He also is going into the house and helping. There must be arrangements so that people from the different departments can work together without friction.
I come next to education. I see that the school attendance officer is to be under the education authority, and the school welfare service is to be under the social welfare department of the local authority. The education department deals with schools for handicapped children and all the rest of it. We might describe these as welfare services, but, again, the line must be drawn somewhere.
I would much rather have seen the children's panels, which are later called the children's hearings—there are so many fancy names in the scheme; it does not matter whether anyone ever calls these things by those names—under the education authorities. They are dealing with school children. They have to supply the reports and so on. It would have been much better if the children's hearings had been kept under the education authority, as was suggested by the Kilbrandon Report.
There is, however, one class of person included in the group whom I would exclude, and that is the officer who deals with ex-prisoners, the officer who works in connection with prisons, the officer who does work with the after-care of prisoners. I do not think that he should be included. I had some points that I should have liked to make about this, but as I see that the noble Lord, Lord Wells-Pestell, is to speak and he is an expert, I will leave it to him.
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Having dealt with this group which we are to have—I have nothing against it except to register my view that there must be borderline cases—the next question I would ask is, what about staff? We can have a lovely plan on paper, any of us could write out a magnificent scheme, but the difficulty is to make it work. As we all know, the greatest difficulty is to get sufficient staff. There is not sufficient staff now for the services. I know that it is said that in this grouping arrangement there will be more efficient use of staff and more interchange of staff, but, even with all this, there is a great deal left to be done. I see that the Department of the Director of Social Welfare is to cost £300,000. I shall not deal with the cost, but that shows what an adequate staff will cost. How do we get the adequate staff? The adequate staff will be difficult to get.
There is one small sector with which we can make a comparison. Local authorities are empowered to supply domestic home helps. In future, they will not only be empowered, but it will be their duty, to supply home helps, and there are also to be laundry facilities. The reason why a great many local authorities are not supplying home helps is that they cannot get them. Whether we make it a duty or not, the first consideration is whether we shall get the staff to fulfil what we want. I am entirely in favour of it, but that is the difficulty.
Over and over again, both in the Kilbrandon Report and in the White Paper, we are urged to set up more residential establishments. They may be called approved schools, remand homes or anything else, but they will be residential establishments. I do not care what name is used, but I say again that we must consider how they are to be staffed. If we are to have a school or a home for difficult boys and girls, your Lordships would, I think, agree with me that it is worse than useless unless we have a first-class person in charge of it. How are we to get these people? I hope that we may be able to do so. It must, however, be remembered that we are absolutely dependent on getting more skilled and unskilled staff for this ambitious scheme, of which I am entirely in favour. I am trying to see whether we can do it.

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Part III of the Bill deals with children's panels and children's hearings. These are awful words which will never be used, but that does not very much matter. The first thing I would ask the noble Lord, Lord Hughes, is this. Can he tell us—and those who composed the White Paper were unable to do so—whether it has yet been decided who is to appoint the members of the children's panels? This is an important point. In the Kilbrandon Report it is recommended that those appointments should be made by the sheriff; in the White Paper it says that the Government have not yet made up their mind.
There are going to be children's panels and from the children's panels there are to be the children's hearings—which, naturally, we shall call courts; so we need not bother about the name—and the children, when they are in need of care and protection or have committed an offence, will come before the three members of the children's panel. When I first heard of the scheme and first read in the newspapers that it had been recommended by Lord Kilbrandon's Committee that the juvenile courts were to be given up, I thought I should not be in favour of another scheme. But when I read the Report I see that it is going to be under the supervision of the sheriff the whole time. What happens? An official who is to be called the "reporter" and who is also to have an adequate staff—and with that I agree—is to bring the child before the hearing and to have all the information about his background.
If there is what is called an agreement, an agreement on the facts, between the three panel members and the child or the child's parents, then they can decide what is to be called the treatment or training that is to be given to him. In other words, if the child who committed the offence pleads guilty, then straight away the panel can lay down what particular training and supervision he is to have. If he does not plead guilty, if there is not what they call "co-operation", then the matter must go to the sheriff and there must be a court of law determination of the facts as to whether the child is guilty or not guilty. That leaves that decision with the sheriff; and I am sure that is good. The matter will then go back to the panel and
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the panel can arrange such things for the child as supervision in his home or in what is called a residential establishment. If, again, parents and child do not co-operate there can be an appeal to the sheriff over the length of supervision. I wonder whether any of us would think there is very much difference between detaining the child as a punishment or not as a punishment. It seems to me a little strange to find in the Bill that detention, as a punishment, is abolished. It is to be called a compulsory measure of care; but what difference will be apparent to the child or the parent I do not know.
Now, my Lords, I reach a part of the Bill with which I am in entire disagreement. I hope that the noble Lord will consult his right honourable friend so that at a later stage we can discuss it fully. I refer to the provision to allow the three panel members to issue a warrant, a warrant which when issued by a children's hearing shall have the same effect as a warrant for apprehension issued by a sheriff. I do not like that. I do not think that power should be given. Think what it is. Noble Lords who look at the Bill will find this referred to in clause after clause. These hearings can issue warrants for what is called an officer of the law to take the child away from his home and put him in a place of safety or a residential establishment. If the reporter thinks that the child may not turn up for the hearing, again he can take him from his home and put him where it would be known that he could be found. If he does not turn up there can be a warrant to apprehend him at his home. If he goes to the establishment and runs away again, there can be a warrant from the same people to apprehend him and bring him back. This is taking a very large power by those who have comprised the children's hearing, the three persons, to remove a child from his home. If the parents do not turn up at the hearing a warrant to bring them must be issued by the sheriff. I urge that we should have a change and that any of these warrants to deal with the child, to remove him from his home or to apprehend him, should come from the sheriff who has already been brought in in respect of an appeal and so on.
I do not wish to continue speaking, although there are other things that I

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should like to say. I wish the scheme well. It is an experiment, and I am entirely in favour of experiments. I think that we can make it better even now before we begin to work it. Above all, we must be clear that without extra, and trained, staff, it will be impossible to make this a good scheme. I should have thought that it would be mad to try to fit it into the existing structure of local authority. We should get the scheme ready and wait until we know what is to be the future structure of local authority, and try to fit it into that.
9.57 p.m.
BARONESS ELLIOT OF HARWOOD: My Lords, I must apologise to noble Lords because, due to the lateness of the hour, and the fact that I have to catch a train, I cannot stay until the end of the debate. Nevertheless, I am most anxious to take part because I speak as one who since 1948 has been chairman of a children's committee, with the exception of three years when I was chairman of an education committee. I am chairman of a probation committee which covers three counties, and for nine years I was Chairman of the Advisory Council on Child Care for Scotland. During the whole time I have been deeply involved in child care and social work in Scotland, and therefore I am extremely interested in this Bill, and I was very interested also when Lord Kilbrandon's Report came out.
Looking back on the nine years during which I was Chairman of the Advisory Council, when we were, as it were, working up for the White Paper and the Kilbrandon Report, I recall that there were three or four things about which we were conscious in the sense of not having aids to the work that we were trying to do. First, there was the acute shortage of trained social workers, particularly children's officers and child care officers. There were only a very few children's officers in Scotland who had had what I call real social work training. When vacancies occurred it was impossible to fill them with trained workers. Secondly, there was the lack of facilities for the training of social workers. In those days, with great care and a considerable amount of pressure, we got Edinburgh and Glasgow Universities to start generic training courses for social workers. These have
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been increased to some extent and there are training courses to-day at Jordanhill and Moray House. Nevertheless, even with all these courses we are desperately short of trained social workers.
Thirdly, we knew of the need to have much larger areas combining together for social work in order to be able to employ adequate staff for child care. Some counties and county burghs are still carrying on with part-time officers who have had no training in child care and are experienced only in such matters as public assistance and relief work which, I am sure noble Lords will agree, is different from the kind of case work and approach that we need in our social work officers.
Fourthly, still in reference to the past, there is a great shortage of trained treatment centres for maladjusted, handicapped and delinquent children, as well as a great shortage of approved schools and remand homes. With all these needs in mind, I personally welcomed the Kilbrandon Report and White Paper as setting out the principles on which our social work was to be based. In all the years that I have been chairman of a children's committee, I have felt frustrated by the fact that children are treated until the age of 5 by the medical services, from 5 to 15 by the educational services and at about 15 by other services; and if then they fall into trouble they are dealt with by probation and child care officers. We all know that children are not divided into neat little age packages, to be separately dealt with by local government departments: they are living human beings, struggling to grow up in a difficult world; and they want help, not on an administratively differentiated basis but on a basis of social care which covers the whole field of their lives and their families.
Now we come to what is happening at the present time. I believe that we have to start at the bottom and get things right fundamentally before we start to build a large administrative machine. It takes three years to train professional social workers. There are not nearly enough of them to-day, and a great many more will be needed if this Bill goes through. At present, they are simply not there. It is useless to set up a great administrative machine if we have not the trained people to put into it. Had I been

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responsible, the first thing I would have done would have been to provide more facilities for training social workers. Then, as my noble friend Lady Horsbrugh has said, we have to find the key person in these new departments, someone who needs to know about social work but who will also need some knowledge of the law and of local authority administration. It is difficult to find people who combine knowledge of all these subjects.
My noble friends Lord Lothian and Lord Mar spoke about the areas of these new social work departments. I feel strongly about this aspect. At the present time, county burghs are not the authorities for dealing with social work. To bring them in at this moment, seems to me to be a most retrograde step. As I have said, it is difficult to find trained workers now. We have 35 administrative groups which we have to staff. How on earth anybody thinks we are going to be able to staff 56 administrative groups, I do not know. It seems to me that this is "pie in the sky," whatever the pious hopes of training departments may be. If and when local government in Scotland is reorganised, the number of administrative centres is almost certain to be smaller. Yet all the people who have been heads of the social work department will not like to be brought into much larger areas, where they will be demoted from chief officers down to whatever grade is required for those bigger areas, at lower salaries. Any of us in local government know how impossible it is to suggest to people whose salaries have been on a particular grade that they are now going to have a salary on a lower grade. I do not think they will take at all kindly to having to be fitted into an area where their grade will be much lower.
I know that in my area, the Border area, where we have three counties in one probation area and two in the medical and sanitary area, far from breaking up this grouping, I would recommend the social welfare department to combine all three counties for the child care and welfare service. This would give an area where one could afford to pay proper salaries. I think it may well be larger under the Royal Commission, although, of course, I do not know what the Royal Commission Report will be. But it would
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certainly mean pay being larger rather than smaller, because the number of children you are dealing with is not so great, and you would be able to pay proper salaries to the people working in the department.
I should now like to turn for a moment to the problem of treatment, and the treatment centres which we want to see for the children with whom we are dealing. The treatment of problem families and of children, whether they are maladjusted, delinquent, mentally retarded, physically handicapped or with any other problems, is still—and this dates back a long way—lamentably difficult. Here, to me, is the nub of the difficulty. There are far too few psychiatric clinics. The work of such men and women, of genius, I may say, as Dr. Stone in Glasgow, Dr. Rodgers at Crichton Royal and Dr. Methven in Edinburgh, is beyond praise. But they can only deal with a small number of these disturbed children. Far more places are needed. Problem families, as most social workers know, are at the bottom of much juvenile delinquency: broken homes, mothers unable to cope and needing training in how to manage household and family care. The Mother-craft Centre in Dundee, set up in the first instance by a grant from the Carnegie United Kingdom Trust, is the only place of its kind to help these inadequate families. It does a fine job. But here is only one treatment centre. Where are the others?
Help is needed for young people of adolescent age: residential accommodation, hostel accommodation for boys and girls to be able to live in a community, with some supervision, in order to be able to go out to work. We know that in the Bill approved schools are going to be dealt with in name; but there will have to be some kind of educational establishment of the kind that we now call approved schools which will be able to deal with difficult children. When it comes to trying to get accommodation for seriously mentally handicapped children, whose I.Q. is very low, and who will never be able to live on their own, the mental hospitals cannot take them, or can do so for only short periods. Where do they go?
This is where the real social problem of dealing with children and young

821
people really lies. You may well do away with criminal charges, have family courts or panels, but at the end of the day, if there is no treatment available, you are no further forward. Long before I spent large sums of money on new administration, I should have spent money on the provision of diverse numbers of treatment centres. I remember when I was chairman of the Advisory Council it set up a Committee under Professor Ellis to recommend action on remand centres. The remand centres in Scotland were terrible. There was only one in Glasgow which had been specially built, and I know some steps are being taken to build new centres and to modernise old ones. I should like to hear from the Minister what the situation is now; whether these remand homes and such places are available, because we may set up the machinery but we can do nothing unless there are more places to which children can go for treatment. It is far more urgent to do something about that problem than it is to build 56 administrative centres when half that number would do.
I have not dealt with the position with regard to probation. My own view is that to include the Probation Service in the social work department up to the age of 16 is a good plan. Beyond the age of 16, when the offender will appear before the sheriff and not before the panel, is a matter to be further considered. In my county the sheriff feels strongly that he should be the person dealing with the young offender as well as with the adult, and I am bound to put his views before the House as I respect his skill and understanding in dealing with young offenders. It is also fair to state that the number of juveniles dealt with by the sheriff in those three counties in the last seven years has never been more than eighty-five. It seems a small number of cases for which to set up new machinery. In fact, there is no question that in the Border area there is only a part-time job for a reporter. A reporter could deal with a much larger area, but as things stand the three counties appear to be a large grouping compared with what is contemplated elsewhere. What is the reporter going to do for the rest of his time? He cannot be employed by the County Council. This is forbidden by the Bill.
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These are the questions which really require consideration and answering. My noble friend Lady Horsbrugh has also put some questions about the panels and about the children coming before the panels, and the rights of the panels to call back the children in particular cases under warrant. I have not had sufficient experience to have very strong views about this. The sheriffs are concerned that the boy or girl brought before the panel shall have no less protection against punishment than he or she would have under the criminal law. With that I am in entire agreement. As we know, the criminal law has strict rules of procedure. A heavy burden of responsibility is put on the prosecution to prove guilt, and the child is innocent unless the proof of guilt is absolutely clear. I hope the panels will be as scrupulous, but they will have to make their own rules of procedure, and this is what the sheriffs are anxious about. I do not think we should lightly reject their views.
These matters are of vital importance to us, and this Bill is of the greatest possible importance. I hope we may have sufficient time allocated to us in this House to deal with it in Committee and on Report, and that we shall be able to improve it—as I think we can do—because most of us here are anxious to sec it become a good and useful Act of Parliament.
10.15 p.m.
THE EARL OF CROMARTIE: My Lords, I should first like to congratulate the noble Earl, Lord Mar, on his maiden speech. I thought he had disappeared, but I was glad to see him come back again to allow me to do this. I think I can claim to represent the views of my own Highland county council and, like other noble Lords who have spoken, also some of the opinions of all the Scottish county councils. While the contents of the Bill are, with certain reservations, welcomed, the timing of it is not. I fully realise that the Government are anxious to get this Bill on to the Statute Book, but I repeat that there is a Commission which is shortly to publish its findings on reform of local government, which will radically alter existing county boundaries. Even if the Government are unwilling to await the final implementation of the Commission's recommendations, could they not

823
delay this Bill until six months after the Commission's findings were published? This would give a fair indication of likely events, such as whether all our crofter counties are to be made into a single unit or whether certain counties are to be allowed to amalgamate. Whatever happens, if this Bill is rushed through we shall have to start all over again when we know the new pattern of local government.
In view of this, I, in conjunction with other of my noble friends, find it necessary to give notice of an Amendment at the Committee stage of this Bill that it be not passed until at least six months after the recommendation of the Commission on Local Government is published. Other noble Lords have gone fully into objections to certain clauses of the Bill.
LORD DRUMALBYN: My Lords, I think my noble friend said he would like this Bill not to be passed. Did he not mean brought into operation?
THE EARL OF CROMARTIE: I beg your Lordships' pardon; I meant brought into operation until six months after publication of the Commission's findings. I should, however, like a clear statement from the Minister as to whether or not the relevant clause means that the local authority health services are included, and also some clarification of the relationship between the social and medical aspect as far as it affects local authority services. Whether or not the single door is an acceptable answer, it should be pointed out that while in large authorities the desirable personal contact between various departments in the social field is not always possible, such contacts do exist in the Highland authority areas.
The question whether the Probation Service should be included has already been discussed and I understand will be discussed by a great expert very shortly. But it would appear that the establishment of attendance centres, such as exist in England and Wales, would be an advantage for the training of the young offender. The local authority, I think, should appoint their own director of social work without the help of an advisory committee. It must not be forgotten that all these proposals will increase the work and expenditure of
824
local authorities so that additional and heavy financial aid will have to be found by the Government, and this, I think the Minister will admit, is particularly the case in the northern counties. The question of children's panels raises some important points, and there is no doubt in my mind that local authorities should have a say in the appointment of the members, while the appointment of the chairman should be left to the panel itself. As, so far as I understand it, the panels will have no legal power, would it not be wise that in special cases delinquent children between 12 and 16 could be brought before the sheriff? Alternatively the panel might be given powers to fine the parents.
Finally, Clause 5 of this Bill indicates some Government interference with voluntary organisations. I feel that this should be resisted. Apart from anything else, this could result in the withdrawal by many people of financial and other aid to these invaluable organisations. Having said that, I am not in any way denigrating the Bill. I think it is a valuable Bill. I think that the timing is not very good, and that there are one or two matters which, as your Lordships have said in this House, need a good deal more attention.
10.21 p.m.
LORD WELLS-PESTELL: My Lords, I feel it incumbent upon me to apologise to noble Lords from Scotland for intervening in this debate, which is essentially a Scottish matter. I also feel that, having regard to what I want to say to your Lordships this evening, I ought to declare a certain interest—not a financial interest, but an interest in so far as I was for something like fourteen years a member of the London Probation Service and have for some years been a member of the Inner London Probation Service; and, if I may say so with the greatest respect, have some knowledge of the Probation Service throughout the whole of the United Kingdom. Furthermore, my noble friend Lord Hamilton, who does not sit on these Benches and who cannot be here to-day, who is President of the National Association of Probation Officers, would, I think (although I have not been in touch with him, nor have I discussed with him this matter), be making some of the observations that I want to make to-night.

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As your Lordships have gathered, this Bill is to bring various forms of social work under the sole control of the local authority. As the Explanatory Memorandum says, it means the creation of
"a local authority social work department with comprehensive powers covering this whole field and a duty to promote social welfare and to give advice and help to people who need it."
On the face of it, one would say that this seems to be most desirable, for it would appear to be a step in the right direction. And I would not deny that there is a real need, not only, if I may say so, in Scotland but also in England, for this kind of general organisation which is envisaged in the Bill. Having said this, I want to make it perfectly clear that I find that a number of the intentions of the Bill cause me some disquiet and some concern.
Frankly, I can see no valid reason, no good reason at all, for the abolition of juvenile courts. I understand that there are but few areas in Scotland where they have juvenile courts, and I am aware that where they have not juvenile courts the juvenile offenders are brought before the sheriff courts. Nor can I feel that the setting up of children's panels is a better alternative—or even desirable. My chief anxiety is the proposed treatment of the Probation Service which, under this Bill, will cease to exist in its present form. I think this is a grave mistake. As I say, this seriously concerns me, and it also concerns the National Association of Probation Officers.
I have no time to deal adequately with the intention to abolish the present method of dealing with juvenile delinquents, or the rigmarole surrounding the scope and function of the proposed children's panel. Your Lordships will recall the debate in this House in 1966 on the White Paper, The Child, the Family and the Young Offender, which suggested the setting up of what were called in that White Paper family councils to replace juvenile courts in England and Wales, and many of your Lordships were not impressed then by the proposed changes. If I have understood the Bill correctly, it appears that in a large number of cases the appropriate action for dealing with a young offender will be decided by direct agreement between the social worker and the parents. If this aspect of the work of probation officers
826
is to be taken away, bearing in mind that the probation officers have been specially trained to deal with, and to advise on, delinquency, what competence, if any, will the local authority social workers have to advise on behaviour problems? I think that the machinery suggested is open to abuse, and I believe that it holds dangers both for the worker and for the child.
Sweden has pioneered this very suggestion, and I think I am right in saying that Sweden is anxious to stop it, to alter it, because it has been found that the children's panels just do not work, that the members of the children's panels tend to reflect (and I say this because I think it affects both sides of your Lordships' House) the political view that they hold in the area in which they are appointed. Goodness only knows! we have had considerable difficulty in the United Kingdom, particularly in England and Wales, in finding a sufficient lumber of really competent people to sit as magistrates in juvenile courts. Yet these children's panels will be far more plentiful, and I do not know where the people are to come from.
I should like to remind your Lordships of an opinion expressed by the Ingleby Committee on the question of dealing with delinquents. The Committee said this:
"Specific and definable matters must be alleged, and there should be no power to intervene until these allegations have been adequately proved."
In my submission, it is desirable that young offenders, if they are offenders, should not be dealt with without the protection afforded by court proceedings. I feel very strongly about this. I cannot spend more time on this aspect of the Bill at this hour, because I want to deal with the implications and effects which the Bill will have on the Probation Service.
The Probation Service in Scotland came in for a certain amount of criticism by the Morison Committee in 1962, and I want to mention this particular criticism. The Committee remarked that:
"A principal cause of failure of the probation service to develop in Scotland as it should have done is that it has been regarded not as a court service, but as a relatively minor local authority service."

827
The Morison Committee held that this was a retarding feature so far as the Probation Service was concerned. Since then, largely as a result of that comment, the Scottish Probation Service has progressed, under the guidance of the Scottish Home Department, and is now a well-developed and efficient service comparable to that in England and Wales. Its officers are carefully selected, they are rigorously trained and are subject to oversight and inspection by inspectors of the Scottish Home Department. In other words, the probation system in Scotland is on precisely the same lines and level of competence and ability as in England and in Wales.
Probation committees in Scotland, although they include local authority representatives, are ad hoc committees, and are not committees of the local authority. The measure of success which these probation committees have achieved, helped by the process—and I want to repeat this again—of central selection and training, contrasts with the development of the social services of the Scottish local authorities. I hope my Scottish friends will forgive my o saying this, but it has already been said by the noble Baroness, Lady Elliot of Harwood. Not only do the social services in Scotland, in general, compare unfavourably with the similar services in England and Wales, but I think we have to face the fact that social work generally in Scotland is inadequately staffed and is largely untrained—and I do not say that in any sense to give offence. I think there are strong arguments for retraining an independent Probation and After-care Service. In my view, there must be central selection and training if the high standards in the Probation Service are to be maintained. Local authority selection and training must of necessity give rise to varying standards of suitability of the individual and varying standards of competence. This must follow.
I believe that the Probation Service must remain a separate service for several reasons. In the first place, it must be independent, free from any local authority department, and must remain part of the court service, responsible solely to the court. Secondly, probation officers must be seen to be independent. If a probation officer is a servant of the local authority, he may find himself ex-
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pressing a view or suggesting a course of action contrary to the policies or to the approval of his local authority department. As a probation officer, I have many times found it necessary, when a boy or a girl has absconded from a local authority home, to be critical in one's report of the local authority home. Can a probation officer do this if he is a member of a local authority? In my view, he must remain independent.
I also believe that the efficiency of the Probation Service within a local authority department could well depend on the local authority's view of crime and the cost to the rates in providing the various treatment measures which may be necessary. The present structure protects the probation officer and the Probation Service from such possibilities. It makes him an officer of the court, and responsible to the court and to the magistrate. I also feel it is important that the offender should see the probation officer as an officer of the court, and that the offender should be responsible to the court through the probation officer. I think it would not help the relationship between the delinquent and the probation officer if the delinquent felt that the probation officer was a local authority employee. I believe this is essential as part of the treatment.
The use of probation as a method of treatment and the confidence in probation which has been built up over the years has arisen because it represents the authority of the court operated by skilled, specialist workers. The new and growing responsibilities of the probation officer—and may I remind your Lordships what they are the supervision and aftercare of those who have been to borstal, detention centres and young offender institutions and, from April 1 next, those released on parole, in addition to those who have been subject to the normal probation officers—require skilled and specialist help. I feel that owing to the enormity of the task, the Probation Service should remain separate and independent and not become just another responsibility of an already overburdened local authority.
I am the first to realise that some of the skills of the probation officer are, in some ways, similar to the skills of other social workers, but this surely does not mean

829
that merging is essential. Surely, it indicates that there must be co-operation. I believe that this is happening in Scotland at the present moment between the Probation Service and other social services. They are meeting, they are getting together and they are pooling their ideas and their experiences, but this can be done without making the Probation Service part of what I believe to be in some measure an untrained and already overburdened local authority.
I think that many of us feel that local authorities are already getting too large, and I do not feel that they can undertake effectively at the right level of personal relationship all that is required of them. To add the responsibility of the Probation Service would be to add to those difficulties.
We have to face the fact that delinquents present problems of anti-social behaviour which can have more far-reaching effects than the ordinary problems dealt with by social workers in a local authority. The Morison Committee, which was a Departmental Committee on the Probation Service in 1962—not many years ago—stressed the desirability of preserving the employer-employee relationship between magistrates and probation officers. If I may quote from its Report, the Morison Committee said:
"…we have no doubt that this relationship has been of prime importance in the growth of the probation sysem. It has fostered the courts' interest in probation and it has encouraged probation officers in their work by the assurance that their employers are people who are in daily touch with their practical problems."
I find it very difficult that the Probation Service in Scotland should be included in the Bill with a view to putting it under the control of the local authority. I am informed that when this suggestion was made known, the Association of Scottish County Councils were against it. They may, I understand, have changed their opinion a wee bit, because I understand that when they made representations they were given to understand that nothing could be done. The whole of the Association of Scottish County Councils were, however, opposed to the inclusion of the Probation Service in the local authorities. The Sheriffs-Substitute Association are against it without qualification. The Medical Officers of Health Association
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are against it without qualification. The National Association of Probation Officers are against it, although I am the first to admit that there are some members of that Association who are willing to go in under local authorities. I am, however, saying that the Association as a whole and the majority of its members are against it.
I view the intention of the Bill as far as it relates to the Probation Service with suspicion, and I hope that my noble friend the Minister will come to the conclusion that references to the Probation Service should be excluded from the Bill. I do not think that I have ever had any great powers of persuasion, but, if I have any at all, I only hope that when we reach the Committee stage there will be an Amendment in the name of my noble friend the Minister to provide that Clause 26 should be deleted from the Bill.
10.40 p.m.
LORD BALERNO: My Lords, like others, in principle I definitely welcome this Bill. I think Lord Kilbrandon has for the second time put all Scot and in debt to him. It has taken a long time for his Report, his work, to reach Parliament. His Committee took 2½ years to report, which they did in January, 1964; another 2½ years and the Secretary of State presented to Parliament a White Paper (Command 3065) in October, 1966; and another 2½ years has been taken in drafting the Bill. It is a pity that so long a time has elapsed. It makes one think that surely the Government can spare another year until they get the Report of the Royal Commission. The result of these delays has been that some of the best of the recommendations of the Kilbrandon Committee seem to have got "lost in the wash" or have got watered down over the years.
To my mind, the most interesting points of the Report are those on the juvenile panels and the abolition of the juvenile courts. The Report stresses the importance of the local nature of the panels which are to deal not on y with delinquency but also with refractory children who are beyond parental control and with truency. Hence, so far as children's hearings are concerned, I agree with the extension of the scheme to the large burghs in order that the children's hearings can be on an entirely local basis.

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But in this connection I regret the omission from the Bill of what is, certainly in this respect, the strongest recommendation of all in the Kilbrandon Report: that of the establishment in each area of a locally-based agency, publicly charged with specific responsibility for the prevention and reduction of juvenile delinquency. There is no mention of this in the White Paper or in the Bill as a major duty of the panel or of the hearing. As it is now constituted, the Bill sets up the panels to consider the children only and to have no wider responsibility for the general aspect of juvenile or children's delinquency in that part of the country. I hope that this will be put right and that it will be brought to the attention of these panels, when they are set up, that they have not only a responsibility to the children but also a responsibility to the community in which these children and they themselves live.
The second point which seems to have got lost is that concerning the constitution of the juvenile or children's panels. I think it a great pity that these are not to be appointed by the sheriff. After all, the sheriff is closely connected with juvenile delinquency, and the suggestion in the Report of a list of names submitted by the education committee to the sheriff sounds to me a wholly admirable one—infinitely better than the rather cumbersome method of establishing a Children's Panel Advisory Committee as is to be found in Schedule 2 of the Bill. This Children's Panel Advisory Committee will make recommendations to the Secretary of State who will then make the appointments. I submit that the sheriff who operates in the county is a better judge of these kinds of things.
My Lords, another point where the Government have not seen fit to follow the recommendations of the Kilbrandon Report has been referred to by several speakers, and by no one more strongly than by the noble Lord, Lord Wells-Pestell. I will not go over all he said, but I should like to add one point to his list. The next step for probation officers in Scotland is that they are to be appointed as welfare officers in the prisons, as has already happened, I understand, in England. That gives them one more job far removed from the work
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of the juvenile courts or the local authorities.
The probation service attached to the sheriff court cannot be decently broken down to 56 or so authorities, as is contemplated in Clause 1. In Scotland at present there are some 29 probation areas, and six counties employ only part-time officers. I should like to quote from the Kilbrandon Report on this point. On page 43 it says:
"Probation has evolved in the closest association with the criminal courts. As such, it will of course continue but can have no place under the arrangements for juvenile panels."
On page 93 the Report states:
"Probation has always been linked to the courts. As one method applied by the criminal courts it will continue. I recommend it not to have anything to do with the children's panels."
Those are pretty definite words, my Lords, and I think the Government have to justify any departure from these recommendations by the Kilbrandon Committee.
After attacking the Government on these points I should like to conclude by referring to the voluntary bodies and to welcome the statement of the noble Lord, Lord Hughes, on this point. I regard the function of the voluntary bodies primarily to pioneer and to do forward-looking jobs which are necessary if we are to adjust these treatments to the changes in society and ways of life. The voluntary bodies have far more pioneering vision than local government or Central Government bodies. For that reason they should be encouraged. They should be given every possible help, including financial help. I entirely agree that where a voluntary body is not showing a pioneering spirit, or has settled down to antiquated methods, it should no longer be encouraged to exist. Lord Kilbrandon's First Report gave a tremendous help to the voluntary youth service, and I am glad to feel that his recommendations regarding the welfare service and the local authorities will also continue to be followed.
10.49 p.m.
LORD FERRIER: My Lords, I should like to begin by protesting at the conditions under which this debate is taking place—not out of spleen or in order to waste your Lordships' time, but because I think it absolutely necessary that it should go on record that this debate is

833
taking place under these conditions. At least one noble Lord has had to leave the Chamber early, and I am certain that every noble Lord who has spoken has had to curtail his remarks and been prevented from deploying his full contribution. As it is clear that a good deal of water will still have to flow under the bridge before the Bill leaves this House, I think this must go on record, so that on future occasions no one can say that we are talking too much.
Turning to the Bill, I accept that a measure of this nature is needed. It stems naturally from the Kilbrandon Report and the White Paper, and all noble Lords who have spoken have paid proper tribute to the noble Lord, Lord Kilbrandon, for his contribution to the welfare of young people in Scotland. But I cannot bring myself to support the Bill, because of its defects and because of its timing. With due respect, I differ from the noble Marquess and some other noble Lords who have said that they think something can be made of the Bill. I do not think that any amount of amendment of the Bill on Committee stage will put it into proper shape.
To me, even its Title is wrong. "Social work" covers so very much that this Title is the wrong one for a Bill referring almost exclusively to children and young persons. The debate in your Lordships' House yesterday struck me as making it abundantly clear that much more attention requires to be paid to the problems of old people in Scotland, in providing residential accommodation, domestic help and the like. Clause 13 makes a passing reference to this, but nothing like speakers yesterday envisaged as being necessary for the proper care of old people. I would support the suggestion of the noble Baroness, Lady Summerskill, that there is need for what she called a "good neighbour" service. To add to my point about the curious structure of the Bill, I suppose that Clause 27, which gives local authorities power to bury or cremate, presumably refers to old people and not to children.
LORD HUGHES: It refers to dead people.
LORD FERRIER: The reference, of course, is to local authorities and their powers over the dead. Again, Clause 28, which refers to visiting, surely refers
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more to elderly people. The whole needs of old people should be brought into the Bill if its Title is to remain, Social Work (Scotland) Bill.
The main purpose of the Bill is obviously to deal with children and young persons, and the Bill is so full of defects that it would be much better to start again. The noble Earl, Lord Mar, in his maiden speech, which we welcomed so much, said that there would be plenty of time. The noble Lord, Lord Balerno, said that we had waited two and a half years for this Bill, and we could wait another year before we go any farther. There would be plenty of time for reconsideration and cogitation while we await the Report of the Royal Commission on Local Government.
Please believe, my Lords, that I am sure the whole outline of the service in the Bill could be improved. This is without question. But it does not make sense to me to propose that this can be done by merging the Probation, Prison, After-care and Child Welfare Services, and then splitting the whole thing up among a mass of local authorities. I live in Lanarkshire, where there is a good-going probation service, covering the whole county. Under these proposals this service would be split up into seven different parts. To me, the proposal is ludicrous, more especially when such changes will have to be altered again when the boundaries are redrawn by the Royal Commission. In any case, what did the White Paper say? The White Paper says in paragraph 6, on page 2:
"One of the main reasons for reorganising the services is to enable them to make a more rational and more effective deployment of staff."
When you come to say that, what about the position in Lanarkshire? Let us take the three sheriff courts, the Lanarkshire Court in Glasgow, the Lanarkshire Court in Airdrie and the Lanarkshire Court in Hamilton. Under the proposals of the Bill there will be three probation officers going to Glasgow, three to Airdrie and four to Hamilton. So the three probation officers now required for these courts will be turned into seven. I do not call that an economic use of staff. Admittedly, prison after-care and probation services should be closely associated, but the probation officer must be an officer of the court.

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Speaking as a Scotsman, I greatly welcome the contribution made by the noble Lord, Lord Wells-Pestell, who, speaking from his vast experience, appealed to his noble friend to think again over this matter, and even suggested that he himself might draft the necessary Amendment to the Bill in Committee. It is quite wrong, as the noble Lord, Lord Wells-Pestell, pointed out, for the probation officer to have divided loyalties by being a servant of a local authority. This is not only the view of the great majority of the probation officers in Scotland, as the noble Lord has said, but it is the view of the sheriffs, as he also said.
I make no apology for taking your Lordships' time. My noble friend Lord Stonehaven asked me when he had to go to apologise to your Lordships, and to express his disappointment at having to go; and he put into my hand a telegram which he asked me to read to your Lordships on his behalf. It is addressed to my noble friend and it says:
"Here you are speaking on Social Work (Scotland) Bill. Scottish Sheriffs-Substitute Association most anxious to avoid abolition of probation service and note with anxiety that it is proposed to change the criminal law of Scotland both on adult probation and on juvenile delinquents by means of Bill on local authority welfare."
That is signed by the Sheriffs-Substitute Association. In reading that, I have not only done my duty to my noble friend Lord Stonehaven, but I have re-emphasised a point which I feel strongly, and which I, having taken the opportunity over the past few weeks to sound them, know is felt strongly by a number of authorities.
The Bill provides for panels, as recommended by the Kilbrandon Report. But that Report recommended that they should be appointed by the sheriff. This point has been made by my noble friend Baroness Elliot of Harwood, and by others. I would point out that the White Paper concurred with this. I believe that my noble friend Lady Horsbrugh suggested that the White Paper hinted that the Government were in doubt. I cannot see that, because on page 17, paragraph 63, the White Paper says:
"A children's panel will be set up on the area of each county and city on the lines recommended by the Kilbrandon Committee."
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That Report set out clearly that the panels should be appointed by the sheriff. I believe that local authority councillors are not fitted to select such panels. That point was touched on by the noble Lord, Lord Wells-Pestell. The difficulty is to get people with the right qualifications, and local authorities are not the people to do it, and they are still less fit to select a specialised staff.
I will not go so far as the Medical Officers of Health Association, when they contend that all that is claimed for the proposed social work services can be achieved within the existing structure. They believe that
"all that is claimed for this Bill can be achieved within the existing structure".
I do not go all the way with that, but anxious as I am, and as every noble Lord is, to see that we get on with improving conditions for the young people and children in Scotland, if there is to be an interregnum between now and the time when a Bill which is workable and acceptable can be placed upon the Statute Book, can we not get on with spending even a fraction of the proposed £800,000 in developing the existing services?
I would go a long way with what the noble Baroness, Lady Elliot of Harwood said, that perhaps the right thing to do is to get right ahead with spending adequate sums in training people so that they are ready when a Bill like this can be put into operation, because there are not enough of them and there are not enough establishments to which young people can be referred. I believe that time could be well spent between now and publication of the Report of the Royal Commission. Also let us face the fact that the economy of the country is not in the best state (shall we say?) at the present moment, and we must be careful just how deep we put our hands in our pockets, no matter how important the service is, because there are many important services.
This brings me to the question of cost. Roughing out in my mind what the Bill in its present form means, I rather feel that £300,000 and £500,000 will not be enough to cover the total cost, especially when there will be a multiplicity of panels, and under the Schedules it is to be left to the Secretary of State to decide what they shall be paid in terms of expenses and the like. Whichever way I

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look at it, this Bill is so half-baked that I believe no amount of gas, no matter how much we turn it on in Committee, is likely to cook it properly.
In conclusion, I make no apology for returning to the question of parental responsibilities. I should like to know what is being done to bring home to parents the fact that in so many cases young people become a charge upon the community because of their parents' neglect. In his Report Lord Kilbrandon gives a number of paragraphs to this question of parental responsibility and how it can be brought home to them. But I want to make the point I made when we debated the Motion on Sport, moved by the noble Lord, Lord Willis, to which the noble Baroness, Lady Phillips, replied. I do not believe that enough is being done by the Departments of Government to use their publicity machinery to bring home to parents' this important fact that they are responsible. We have to face the fact that the "goggle-box" and Bingo are the reasons why so many children are turned out into the street, or go back to dark, cold and empty homes when they return from school. I should like to see the Press and the broadcasting authorities never cease to emphasise this. They do something but they should do more. And as I have said, let us use what powers we have in our own hands, in the hands of the Government, to impress upon parents the fact that their failure to meet their responsibilities involves the whole community in cost and, which is more important, involves young people in backwardness, distress and wrongdoing.
In the view I am taking of this whole Bill—my train is just leaving Euston—I am heartened by what has been said by the noble Earl, Lord Mar, and by the noble Baronesses, Lady Horsbrugh and Lady Elliot, and by others, because there is so much to complain about in this Bill, so much that can be improved in it, that I feel it is right for me to repeat my objections to the Bill; to its unacceptable proposals, its omissions, its timing and its very Title. For those reasons, I would vote against it on the Second Reading if things had gone otherwise. I would not have divided the House, but if anyone else had done so I would have voted against it. As we must now proceed with the Committee stage, we shall see whether any sense
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can be made out of it. If not, I am quite prepared to divide against it at a later stage, and it is for that reason that I prefaced my speech by the protest at the conditions which have led us to this situation. If noble Lords will forgive me, I must apologise to my noble friend Lord Drumalbyn and the noble Lord, Lord Hughes, whose stamina and patience has met with all our admiration, because the only other train I can catch will compel me to leave before they have finished speaking.
LORD HUGHES: My Lords, may I say that my train left at 10.15.
11.7 p.m.
LORD DRUMALBYN: My Lords, we are now coming to the end of a very important debate, and I think it has been a debate on a very high level. We were very grateful indeed to the noble Lord, whose vocal powers sufficed to deliver a really spendid speech to us outlining the Bill. We have had the maiden speech from the noble Earl, Lord Mar, to whom we were very grateful. He gave a very forthright speech and expressed his point of view in a manner which was quite exemplary and quite that of an old hand, and we hope to hear him again. We have had a collection of experts, particularly my noble friends Lady Elliot and Lady Horsbrugh, the noble Lord, Lord Wells-Pestell—whom we are most glad to welcome in our debate; we thank him very much indeed for participating and for his advice—and my noble friend Lord Balerno, finishing up with a characteristically vigorous speech from my noble friend Lord Ferrier.
The characteristic of this Bill, I think, is that it has two main aspects. First of all, there is the aspect of the unification of the social welfare services, which I think has been welcomed by everybody, although with certain reservations by the noble Lord, Lord Ferrier. And the establishment of the children's panels, which has had a rather more mixed reception, as indeed one might have expected. Involved with the establishment of children's panels is the whole question of the Probation Service, about which I shall say something in a moment or two. The main point of criticism has been not so much on the content as on the timing. I am not going to put a lot Of questions to the noble Lord because he has been sorely strained to-day, though I am bound to

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say it is his own fault; he should not have had Part III of the Agriculture (Miscellaneous Provisions) Bill in the Bill at all. I am not going to put a strain on him, and I would not expect him to pick up all the questions that have been asked to-day, but there is one matter about which we should be most grateful if he could give us an opinion, because so much of the criticism has been on the question of timing.
I understand well that this Bill creates a legislative framework. The cladding can, and will, be put on over decades. What we are more concerned about at the moment is the structure. It seems odd that one should determine a structure of this far-reaching character just at the moment when we have sitting a Royal Commission on Local Government—the general organisation of local government. What I should like to know from the noble Lord is this. This Bill deals with accommodation; it deals with staff and with the general legislative framework. These really are separate aspects. But until you fix the framework you cannot do much. How long does the noble Lord reckon that it will take to establish the framework, in the sense of recruiting your directors of social work, getting their staffs mustered, setting up the children's panels, recruiting their members and training them? How long is all this going to take? I hope, with my noble friend Lady Elliot of Harwood, that once you have fixed this new pattern you will be able to recruit much more staff because you will have more obvious career prospects. You will, we hope at any rate, have larger units, and there will be the possibility of using the new directors of social work to train their staffs and to train the new intake that is coming into them.
All this is to the good. But it is difficult for us to judge of the merits of this proposal of the structure unless we know what this element of time is going to be. I personally feel that it is going to need a great deal of justification on the part of the noble Lord. I am not going to ask him to do it to-night, because obviously we shall have to discuss this subject at great length on the Committee stage. This departure from the proposals, which admittedly were on balance in the White Paper, is going to require a
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great deal of justification. Of course, that is not the only point at which it seems that there has been a departure from the White Paper; but I am not clear about that.
There are one or two short points that I should like to ask the noble Lord about. First of all, I would ask him whether the Government have changed their mind on the proposal in paragraph 30 of the White Paper, where it says:
"It is therefore proposed that these services of social support in the care and after-care of the ill, mentally disordered and handicapped should be undertaken by the new department."
I appreciate that in a structural Bill like this, with this broad legislative framework, you cannot mention all the valuable services. But am I right in thinking that the health visitors are not included under this broad umbrella? If that is so, then of course there is a departure from the White Paper.
The next point in the White Paper about which I should like to ask is in paragraphs 32 and 33, which conclude by saying:
"It is therefore proposed that the new department should be responsible for the provision of support and assistance to old people, including the provision of old people's homes and day centres."
There I understood that there was no departure. I hope I am right in that, and that they are covered, despite the strictures of the noble Lord, Lord Amulree. For my own part I would not agree with him, because, quite obviously, not only is there going to be a problem of co-ordination here, but there is going to be great activity of co-operation, because the various expert services will have to be called in from time to time. The point he seemed to miss was that so much of this is going to depend on the advice of the individual's own general practitioner, not on the medical officer of health of the local authority.
The third point is that I should like to know whether the provision of temporary accommodation, as well as the social rehabilitation of the homeless families, will be covered by the Bill. I imagine that this is so, but I should like to know how this fits in with the National Assistance Bill. Is there an overlap here; and who is going to determine who provides

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what? Then, again, is there any legislative provision required for the amalgamation of the Scottish Office's inspectorates for approved schools, child care, probation and the health departments' welfare officers? I am sure this is intended, but I could not find the provision in the Bill.
As I said, a great deal of the criticism on this subject was in regard to the treatment of the probation officers. I should like to refer to the Report of the noble Lord, Lord Kilbrandon, but first I should like to join very sincerely in the gratitude that has been expressed to him not only for the tremendous work that he put in on this matter, but for his very great interest in social work as a whole. He said in paragraph 140:
"One necessary consequence of our proposals is that the present distinction between supervision under the 1937 Act and probation as methods of treatment for juveniles would cease to exist."
If that distinction ceases to exist, and if what probation officers are going to be required to do is to supervise along with the social workers in the social work department, then of course one has to look and see what the consequences will be.
Surely the overriding consideration must be the welfare of those in need of care, and not the administrative convenience. The administration has to be adapted to the needs of communities and individuals, and not vice versa. I suggest that with children who are out of parental control the important thing is that there should be one individual to whom the child can look for guidance and support; one individual who can both educate the parents in the exercise of their responsibilities and lead the child back to the love and respect of his parents and the acceptance of parental discipline. For a boy where there is no father, it seems to me important that that individual should be a man, especially when the boy is approaching puberty. There is a positive benefit in integrating the probation service with the other social welfare services, at least so far as child care is concerned. There is then the problem of youth and later the probation service for adults and the after-care of offenders.
Yesterday we were talking about the difficulties of families where the father is in prison, and the same difficulties are
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apt to continue when the offender comes out of prison. It seems to me that there will be considerable advantages in having the same person involved. I was a little surprised that it was taken as an argument against the co-ordination of the Probation Service that they were now going to be visiting prisons as well. If they are going to visit prisons and the families of the prisoners at the same time, I should have thought that that might be a valuable co-ordination. These are matters that we can discuss at considerable length on Committee, and I am sure that we shall, but I wanted to express my own feelings about this, which are not entirely in line with some of the views that have been expressed this evening.
It seems to me, so far as I can see at the moment, that the balance of advantage for the family as a whole points to the integration of the Probation Service with the other social welfare services, while retaining its separate, specialist identity. I take the point of the noble Lord, Lord Wells-Pestell, about the need for the probation officer to be independent. It so happens that I have had a little experience in what is now the Ministry of Social Security, and there, of course, they have independent insurance officers within the framework, officers who give their independent advice. I have no doubt that from time to time they criticise what is done by others, but they are independent people.
LORD WELLS-PESTELL: My Lords, if the noble Lord will be good enough to give way—he has done so—perhaps I may say that I think the real objection is that if the Probation Service becomes part of the local authority the probation officer must of necessity be under the director, and must therefore be controlled by the policy of the director and by the policy of the department. Therefore, he cannot be independent because he is responsible to the director and is controlled by the policy of the department. This is my point; and I am sorry I did not make it more clear.
LORD DRUMALBYN: With respect, the noble Lord made his point abundantly clear, and I fully understood it. I quite see that there are times when he may want to criticise the department itself. I quite understand that. What I

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was saying was that there are precedents for having an independent officer within such a framework. I cannot pursue the point further to-night, but I thought it was worth while making it.
It seems to me that at least it might be worth while giving this a trial. But I would say that, in my view, it will work only if the probation officers are given an equal chance of promotion on merit—and this was a point to which the noble Lord, Lord Hughes, referred. I see no reason why probation officers should not become directors of social work. Indeed, I can remember one or two who, by their personality, by their authority and by their experience, would be very well qualified indeed to become directors.
I appreciate that the Bill implements the White Paper in so far as the statutory position of the probation officer is abolished, but I also note that the White Paper, if I understood it correctly, intended the training course for probation officers to be retained. It is the White Paper to which I am referring. If this is so then the probation officers are going to be identifiable within the system still. What I should like to see at the moment—because I think this is an experiment—is the integration, if it takes place, carried out in such a way that it is not irrevocable. If it works, it will be justified: if it does not, it can be changed. It occurred to me only during the course of this debate that one answer might be to make the probation officers the servants of the reporter instead of the servants of the social work department. There would then be very much less difficulty because they could be the servants of the reporter for the children and continue to be the servants of the courts for the adults.
The other thing about which there has been a great deal of discussion has been children's panels, on which I should like to say one or two words. Everybody recognises that the success of these panels will depend upon the quality of people recruited to them and on the skill of the reporter. We shall have to examine Schedule 2 very carefully, particularly the composition of the advisory committees. In my view, there is a good deal to be said for making the sheriffs the chairmen
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of the committees. Lord Kilbrandon's Committee recommended that the sheriffs should determine the number and location and appoint the members and deputy-chairmen of the panels. The Bill provides for the Secretary of State to do all this. This again, however, is a Committee point.
A good deal of reference has been made to the reporter. In paragraph 98 of their Report, the Kilbrandon Committee recommended that the reporter should be:
"an officer combining a legal qualification with a period of administrative experience relating to child welfare and educational services".
They are pretty rare birds, my Lords. That will not be easy to achieve. Therefore, in Clause 35, the Secretary of State retains control of the list of applicants from whom reporters are to be chosen. This is in marked contrast with the choosing of the directors of social work in Clause 3, where, once the Secretary of State has prescribed the qualifications, the choice is left to the local authorities. With the reporters, however, the Secretary of State keeps control of the panels. I hope that he will stimulate recruitment and training of people with these qualifications.
The only other point that I should like to make is that it is important that cases should be referred sparingly to the reporter. I hope that the recommendation of the Kilbrandon Committee, that the system of police warning and police juvenile liaison officers should be encouraged, will be followed. It seems to me that this is the right way to deal with the isolated caper—for example, the boy who takes a piece of wood painted with his football team's colours to a football match. We Scots believe that that could not happen in Scotland. I do not mean that the boy could not take it, but I do not think that the same results would follow. As the Kilbrandon Report says,
"the exercise of a measure of discretion has for long been an inherent—and in our view commendable—feature of the Scottish system of public prosecution".
It is one of the ways in which the system is superior to that below the Border. I hope that that system will be continued under the new arrangements for children's panels, both for its own intrinsic advantages and so as not to overload the panels.

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It is idle to pretend that there will be no humiliation, either for the child or for his parents, in being summoned before the children's panels; and that is in itself a wholesome deterrent. The fact that it is not to be a public humiliation is very much to be welcomed, but the humiliation should not be inflicted lightly. The success of the system will, in my view, depend on the reporter's exercise of his discretion under Clause 38 to refer the matter to the local authority. It is not clear from the Bill that the local authority will have power under Clause 37 to refer the case back to the reporter if the child and the parents are recalcitrant. I suggest that in Committee this might be made clear.
Those are all the points that I wanted to make on the Bill. I express a welcome to both Parts of the Bill, both to the unification under the director of social welfare services and also the setting up of the children's panels. There are occasions when Scotland can pilot schemes and show the way. From what was said in the debate yesterday, it looks as if the rest of the country will look very carefully to see how this works. The mere fact that it may not be working too well in Sweden is a factor which has to be taken into consideration, but we may be able to profit by that experience and not make the mistakes which have led to the comparative failure in Sweden. For my part, I should give a general welcome to the Bill, but I must warn the noble Lord the Minister that he may have trouble with Clause 1.
11.30 p.m.
LORD HUGHES: My Lords, as noble Lords are aware, it is my custom when replying to a debate to try to pick up as many points as possible. With that in view I gave instructions that I wished to be kept as well primed as possible with material—and your Lordships can see the result. But when I made that arrangement I expected to be replying to the debate at about 9.30 p.m. and not at 11.30 p.m. In view of the strictures which were repeated by the noble Lord, Lord Ferrier, I will repeat, since he does not seem to have taken it in, that the responsibility for the Bill's coming on at this late hour is not that of the Government. The intention was to finish the Committee stage of the Agriculture (Miscellaneous Provisions)
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Bill on Tuesday, and at the express request of certain Scottish peers—a request, I may say, that I thought perfectly reasonable—we went to a great deal of trouble to get Parts of the Bill left over for consideration to-day.
I must say—not in criticism of those noble Lords but in defence of the arrangers of Government business—that they were aware of the fact that there was a Second Reading of a major Bill on this day. We had no indication at all that they intended to discuss the Agriculture (Miscellaneous Provisions) Bill—and in particular Part III of it—at such extraordinary length. If I had had any intimation of that kind I should have been willing to help accommodate noble Lords in having a day other than Tuesday to consider their points—but it would not have been to-day. I think I am entitled to make that point.
It is impossible for me at this hour—and, in any event, with so many noble Lords who have asked for information having had to leave in order to catch the train or plane that they had originally intended to catch, or the one after it—to reply adequately. It does not seem to me it would serve any useful purpose that they should look through Hansard to see if I had answered their points and, if so, how I had answered them. What I will undertake to do is this. All substantial points raised in the course of this debate will be answered in correspondence in such a way as will help noble Lords concerned to make up their minds what Amendment; they would wish to table.
The second point I wish to make is this. Although we have discussed this Bill later than we should have liked, although some noble Lords haw compressed their speeches—an example which I assure the House I intend to follow—I do not think the debate in any way suffered because of it. We have had a demonstration that short speeches can be just as effective, if not more so, than long speeches. I say, without hesitation, that the debate impressed me infinitely more than the previous one—and not because this debate has been lacking in criticism of Government proposals
I do not regard it as part of my task in replying to this debate to attempt to rebut any of the points of criticism made,

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except one. I regard it as my job, in dealing with a Bill of this kind which makes such fundamental changes, to give the fullest possible consideration to every suggestion that has been made. The exception is a point made by the noble Lord, Lord Ferrier, who said that he did not like the Bill at all; that he considered it incapable of improvement and would have voted against the Second Reading if there had been somebody else of the same mind. With that exception, I regard every proposal and every criticism made as one that we must look at from this point of view: Is it likely to make the Bill a better one than it is as printed?
I wish to assure your Lordships that there will be adequate time on Committee. We are not committed to rushing this Bill through the Committee stage in one day. If it requires a second day, a second day will be made available. There will be a reasonable time between Committee stage and Report stage.
LORD DRUMALBYN: My Lords, I wonder whether I might make a point to the noble Lord. I think he may have difficulty in judging, merely from the Amendments put down, the length of time required for this Bill. I think this is the sort of Bill that one would want to discuss clause by clause.
LORD HUGHES: My Lords, I give a firm assurance that we shall not rush the Committee stage any faster than is necessary. I accept that it is a prime requirement that the Bill should be discussed adequately. By that, I do not mean that I am giving an open invitation to noble Lords and noble Baronesses to talk as frequently and as long as their stamina will permit, but I do encourage them to put forward any proposal which they think will improve the Bill.
The one point on which I wish to say something is the question of timing, because so many of your Lordships have referred to this. The introduction of the legislation has not been rushed. After all, it was in 1961 that the Report stressed the urgency of something being done in relation to delinquent children, and here we are, seven years later; so there is need to get legislation. The options open to the Government were to introduce legislation now, with the Wheatley Commission Report still ahead of us, or to wait not merely until the
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Wheatley Commission had reported but until all the deliberations that must follow that Report had taken place and the necessary legislation had been implemented. The likelihood, my Lords, is that if we had done so, we should not have been acting for another five years. This, I think, would have been intolerable.
The alternative was the one which the Government chose, to introduce a Bill now. But I would remind your Lordships that the Secretary of State will have power to fix different appointed days for bringing into operation different sections of the Bill and different purposes. It would be foolish in the extreme if the Government, having got the Bill on to the Statute Book, were so to attempt to operate it as to frustrate its objects. There have been some terrible misconceptions about the likelihood of 56 probation services being set up. The noble Lord, Lord Ferrier, foresaw the number of three in Lanarkshire being increased to seven. I wonder how many of those who worry about the probation service are aware of the fact that at the present time the service is legally based on the burghs, and the fact that there are so few is due to the success which has attended the voluntary getting together of authorities.
A reference was made by the noble Earl, Lord Mar, in his excellent maiden speech—and I hope, like everyone else, that, now he has found that the water is not so cold as he feared it would be, he will venture in much more frequently. It will be our delight, and I hope that he will enjoy it so that it will also be his delight. The noble Earl pointed out the combinations that have taken place with local authorities for other purposes. I assure you, my Lords, that it will be a great disappointment to my right honourable friend if this process of a voluntary getting together, in anticipation of the compulsory get-together after Wheatley has reported, does not take place. We will certainly give every encouragement to the maximum amount of voluntary co-operation between authorities.
Given that co-operation, the important thing was to get legislation on the books and then implement it in the best possible way. We believe that we took the right decision to do this now, instead of waiting for another four or five years. The

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trouble in this country is that so often we find it easy to make excuses for not doing something at the present time and find it so much more desirable to do it next year, or the year after. This was a temptation that we put behind us. I am certain that the consideration which this Bill will receive in your Lordships' House in its succeeding stages, and the attention that it will get in another place, when it goes there, will give us a piece of social legislation of which Scotland will be proud and to which we may expect other countries to look when in due course they seek to carry out their own legislation on social work.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

THEFT BILL [H.L.]
LORD BESWICK: My Lords, I think that it will be for the convenience of the House if the Committee stage of the Theft Bill be taken, instead of this evening, on Monday next, when it is proposed that the House shall meet at five o'clock.
MILL LANE KIRK ELLA BURIAL GROUND BILL
Brought from the Commons; read 1a and referred to the Examiners.
  LANSDOWN STATION, CHELTENHAM
  LANSDOWN STATION, CHELTENHAM