Sitting of 6 November 1968

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  ROYAL BANK OF SCOTLAND ORDER CONFIRMATION BILL
  Considered; to be read the Third time tomorrow.

  SELECTION
  Order read for resuming adjourned debate on Question [5th November], That Mr. Hugh Delargy, Mr. Harold Finch, Mr. Harold Gurden, Mr. Clifford Kenyon, Mr. Kenneth Lewis, Mr. Francis Pym, Mr. Harry Randall, Mr. George Rogers, Mr. Thomas Steele, Mr. John M. Temple and Mr. Wilkins be Members of the Committee of Selection.
  Question again proposed:—
  Debate resumed;—
  Question put and agreed to.

ORAL ANSWERS TO QUESTIONS
  BOARD OF TRADE

    Directory Entries (Pro Forma Selling)
    Mr. Arthur Davidsonasked the President of the Board of Trade if he is aware of the system of pro forma selling by which certain firms send out invoices offering discounts for entries in forthcoming directories, such entries never having been ordered; if he is satisfied that the public is sufficiently protected from such practices; and if he will make a statement.
    The Parliamentary Secretary to the Board of Trade (Mrs. Gwyneth Dunwoody): I am aware of the regrettable practice to which my hon. Friend refers, but I think it is for the recipients to protect themselves by checking before
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    payment that they have not contracted for any such directory entries.
    Mr. Davidson: Does not my hon. Friend agree that this practice is nothing more than a squalid confidence trick? Does she not agree also that there is something wrong when apparently a firm can imply that an order has been placed when it has not been placed, when it can raise thousands of £s by this implication, and when it can also imply that a directory is to be published when it is not? Does not she think that the law needs to be strengthened?
    Mrs. Dunwoody: I am in complete agreement with my hon. Friend that it is very reprehensible to send out pro forma invoices that look so like genuine bills that people are sometimes misled. I hope that any firm that receives any form like this will take the opportunity to complain and that people will not be taken in by this practice, which seems to me, although it is not illegal, to be thoroughly wrong.

    Cotton Textile Industry
    Mr. Arthur Davidsonasked the President of the Board of Trade if he will make a statement about the cotton textile industry, and in particular the economic and trade prospects for the industry in Lancashire in the coming year.
    The President of the Board of Trade (Mr. Anthony Crosland): Production of yarn and cloth has risen by 7½ per cent. and 5½ per cent., respectively, compared with the third quarter of last year. Order books have also lengthened considerably, to an average of 23 weeks production in the case of spinners and 17 weeks in the case of weavers. While it is dangerous to prophesy in a trade which is subject to cyclical fluctuation, nevertheless, given the state of order books and the improved competitiveness of the industry as a result of devaluation, the outlook looks encouraging.
    Mr. Davidson: My right hon. Friend's words are very encouraging, particularly in view of the gloomy forecasts which were made in many quarters, but does he not agree that he could give further encouragement to Lancashire by considering the import quotas again?
    Mr. Crosland: I certainly think that the general position is a great deal more

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    encouraging than it was this time last year, for example, when many very gloomy forecasts were being made. As to any further Government action or further Government policy decisions, I have said again and again, and I must stick to this, that I do not propose to take any new policy decisions affecting the industry until I have had the result of the productivity study, which I still hope to have by the end of the year.
    Mr. Fletcher-Cooke: When will the Textile Council report on its productivity study, because the absence of this report has been a reason for postponing decisions for a long time? Does the President of the Board of Trade realise that time is beginning to run out in the matter of quota arrangements for imports? When does he propose to start renegotiating these quotas, because he will be up against the buffers of time quite soon?
    Mr. Crosland: I am well aware of the timetable as regards quotas. We have not run out of time yet, but it is right that we should watch the timetable very carefully. I shall not take any decision on that until the Textile Council Productivity Study has been completed; and that, I hope, will be by the end of the year.
    Mr. Blackburn: Does my right hon. Friend realise that we have been holding up decisions for a long time because we have been waiting for these reports? Can he give us an indication of when we shall get both the Hunt Report and the Textile Council's Report, and then perhaps some decision will be taken?
    Mr. Crosland: I hope to have the Textile Council's Report by the end of the year. I believe that we are expecting the Hunt Report in the very early part of next year.
    Mr. Mapp: Does not my right hon. Friend agree that mergers are inevitable in face of whatever kind of report he gets? In these circumstances, will he encourage the Industrial Reorganisation Corporation to look into some of the possibilities: in Lancashire, without the aid of its Chairman, for reasons which both sides of the House will know, namely, that he has a major interest in the textile industry? That should not
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    neutralise the efforts of the I.R.C. to look into the possibilities there are.
    Mr. Crosland: The Chairman of the I.R.C. has made a considerable contribution to mergers in the textile industry, as my hon. Friend knows. On the more general question of the I.R.C., I agree with my hon. Friend that we certainly have not seen the last of mergers in this industry. We shall see more of them, but I would not like to call in the aid of the I.R.C. until I see what the productivity study says, although it is one of of a number of possible courses of action after we have that study.

    Railways (Private Operators)
    Earl of Dalkeithasked the President of the Board of Trade what grants and allowances for plant, machinery and equipment he will make available to the private enterprise operator of a railway line used for the transport of passengers and freight following its abandonment by British Railways within a development district.
    Mrs. Gwyneth Dunwoody: No financial assistance would be available from the Board of Trade under either the Industrial Development Act or the Local Employment Acts.
    Earl of Dalkeith: I understand the difficulty of giving a better Answer to my Question, but will the hon. Lady say whether her Department has made an assessment of the value of the Waverley line to the future development of trade and industry in the Borders of Scotland, and, if so, what advice it has given to the Minister of Transport?
    Mrs. Dunwoody: The Board of Trade has an active interest in the development of industry in the Borders. Obviously, we take into account the effect which factors such as railway closures would have. There has been a decline in the usage of the line, although I do not underestimate the difficulties, sometimes psychological, which people feel they will face if railway lines close. However, we believe that what will give real help to industrialists in this area will be alternative forms of transport and, in many instances, improvement of roads.
    Mr. Speaker: Order. Questions and Answers are becoming longer.

    Imports and Exports
    Mr. Joplingasked the President of the Board of Trade to what extent it is his policy to give preference to industries which contribute to exports rather than those which make a similar contribution to import saving.
    Mr. Crosland: The Government's policy is to encourage and assist all industries to make the best contribution they can both in export markets and in competition with imports at home.
    Mr. Jopling: Is the right hon. Gentleman aware that on 12th June one of his senior officials came to the Select Committee on Agriculture and, in reply to Question No. 918, said specifically that his Department's policy was to give preference to industries involved in exporting rather than those involved in import saving? Is that not an extraordinary statement of policy?
    Mr. Crosland: I confess that I was not aware of the answer to Question No. 918 on that occasion. However, whatever he said, my view is that in the short run we should give encouragement to both export promotion and import saving. But I agree with whoever gave the answer to which the hon. Gentleman referred, that, taking the longer view, export promotion is the more valuable, partly because the world market is larger than the domestic market, partly because world trade in manufactures is growing faster than the British national income is growing, and partly because the exporting industries are typically industries with a considerable reserve of productivity increase whose expansion can significantly affect the rate of growth.
    Mr. Maxwell: As balance of payments considerations are of highest importance at least for the next three years, does not my right hon. Friend agree that import savings could make an immediate and much faster contribution than exports since we have to give such long credit terms?
    Mr. Crosland: I said that, in the immediate outlook, we ought to support both equally. As regards import saving, the Government have been extremely active, for example, in relation to the aluminium smelters, the agricultural expansion programme, the encourage-864
    ment. of North Sea gas production and in many other ways.
    Mr. Jopling: In view of the unsatisfactory nature of the replies, I beg to give notice that I shall raise the matter on the Adjournment at the earliest opportunity.
    Sir G. Nabarroasked the President of the Board of Trade whether he will state the estimated deficit in the United Kingdom overseas trade during 12 months ended 31st October, 1968; what proposals he now has to make for improving the terms of trade by increasing exports and by diminishing imports by home production to substitute for imports, respectively; and whether he will make a statement.
    Mr. Crosland: Figures of the United Kingdom's trade up to 31st October are not yet available. The Government are pursuing, and will continue to pursue, a wide range of measures designed to improve the trade balance.
    Sir G. Nabarro: Is the right hon. Gentleman aware that yesterday the Chancellor of the Exchequer, while endorsing the view that exports have performed creditably since devaluation, express renewed anxiety about the level of imports; and is not this largely due to the total failure of the Government's policy of import substitution in the context of British agriculture?
    Mr. Crosland: I listened with pleasure to the speech of my right hon. Friend the Chancellor yesterday. I profoundly regret that I missed the hon. Gentleman's speech, but I heard the moving tribute paid to it by the Leader of the House, and I am sure that it was very good. On the point of substance about imports, as we have made clear again and again imports are running at a higher level than we should like. There are a variety of reasons for this. As regards the point which the hon. Gentleman made about the agricultural expansion programme, my right hon. Friend the Minister of Agriculture hopes to make a statement to the House on the subject in the very near future.
    Mr. Speaker: Order. We have many Questions on the Order Paper.
    Mr. Patrick Jenkin: How does the President of the Board of Trade reconcile

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    the bullish tone of the Chancellor yesterday with his own much more cautious assessment when he spoke to the International Chamber of Commerce?
    Mr. Crosland: No doubt there are differences of temperament here, as there are, I imagine, everywhere else. On the substance of the matter, as I recollect my right hon. Friend's speech and my own speech, we were in complete harmony.
    Mr. Blakerasked the President of the Board of Trade (1) if he will give the percentage increase in the volume of imports and exports, respectively, between the third quarter of 1968 and the average for the second and third quarters of last year before devaluation;
    (2) if he will give the percentage increase in the value of imports and exports, respectively, between the third quarter of 1968 and the average for the second and third quarters of last year before devalution.
    Mr. Crosland: On a seasonally adjusted basis, the volume of United Kingdom imports increased by 11 per cent. and of exports by 14 per cent.; the increases in value were 26 and 25 per cent., respectively.
    Mr. Blaker: Is not the significant fact revealed by those figures that the value of imports has risen in the periods concerned even faster than the value of exports, and does not that give rise to concern?
    Mr. Crosland: It was always clear that devaluation would have the effect—and this was the intention—of raising import prices by more than export prices, and so there was bound to be the trend to which the hon. Gentleman draws attention. But what is important as regards the outlook now is not the figures for the whole nine months of this year but the trend of the trade balance, and all those hon. Members who have been following that trend will have noted a very marked improvement in the past two months.
    Mr. Roy Hughes: Has my right hon. Friend's attention been drawn to the imports of foreign steel into South Wales and to the fact that those imports doubled in the period up to 20th October this year as compared with the corresponding period last year? Will he give an undertaking to watch that unfavourable trend very closely?
    Mr. Crosland: My hon. Friend draws attention to a fact of which he is well aware, that there is a surplus of steel at present, which leads to great balance of payment problems not only for this country but for others. I shall continue to give very close attention to the point my hon. Friend mentioned.
    Sir K. Joseph: Since imports have risen in both value and volume either at just about the same rate as exports, or a bit more, since devaluation, what reason has the right hon. Gentleman for thinking that exports can pull ahead in the future without pulling up imports after them?
    Mr. Crosland: Just to make sure that we are in agreement about the facts, exports have increased significantly faster than imports by volume—14 per cent. as compared with 11 per cent. On value, they are almost identical—26 per cent. and 25 per cent.
    Mr. Bessellasked the President of the Board of Trade if he will arange to publish with the import-export figures each month sufficient detail to enable industry to identify those markets where imports are rising.
    The Minister of State, Board of Trade (Mr. Edmund Dell): Extensive information is published in the Overseas Trade Accounts and more detailed monthly statistics are available to industry from the Bill of Entry Section of Customs and Excise.
    Mr. Bessell: Is the Minister aware that these figures arrive much later, and do not enable British manufacturers to identify the imports quickly enough, and that it is important that these figures should be available at the earliest opportunity to prevent panic reactions to the Board of Trade figures?
    Mr. Dell: It is important that people should have these figures, but figures are available to manufacturers—both exporters and import-savers—in very large quantity from a number of sources, such as the Overseas Trade Accounts, which give commodities by main countries, H.M. Customs and Excise Bill of Entry Service, and the facilities available under Section 3 of the 1967 Finance Act. There is a limit to what one can usefully and economically provide, but we are providing a very good service in this respect.

    News of the World (Take-over Bid)
    Mr. Sheldonasked the President of the Board of Trade what action he proposes to take in the News of the World take-over bid.
    Mr. Barnettasked the President of the Board of Trade what plans he has to use his powers under the Monopolies and Mergers Act in connection with the takeover bid for the News of the World; and if he will make a statement.
    Mr. Crosland: On the information at present available, I have decided not to make a reference to the Monopolies Commission.
    Mr. Sheldon: Does my right hon. Friend accept that the Take-over Panel has been completely discredited by the events of the past few days? Can he say why the panel allowed Hambros to purchase shares at 50s. when previously Hambros had thought that 28s. was the maximum price it could pay? Since my right hon. Friend has responsibility for the High Street market, why cannot he take responsibility for the stock market also?
    Mr. Crosland: I do regard myself as being responsible in the last resort for protecting the interests of shareholders, particularly the growing number of small shareholders who do not have merchant banks or others to advise them. I accept that this must ultimately be my responsibility. My hon. Friend is right to say that recent events have given rise to acute anxiety and disquiet. I have discussed them with the Governor of the Bank of England. At present the City authorities and the Board of Trade are jointly considering the future of the panel and the take-over code, and any penalities under the code. Until those discussions are complete, I should not like to make any more definite statement.
    Mr. Barnett: Will my right hon. Friend at least take the opportunity of ensuring that the small shareholder has a fair opportunity to decide between the two relevant bids? Will he tell the House what representations he has received from the Opposition, who are extremely interested, as we all are, in ensuring maximum savings, which need the good will of shareholders investing in equities?
    Mr. Crosland: I am not conscious of having received any representations from the Opposition on this matter. I do not propose to intervene in the situation which my hon. Friend has in mind. On the more general question, if a voluntary system can be made to work it has obvious advantages for everyone, but if a voluntary system, even if reformed in the way that a number of people would like to see it reformed, fails to work again the Government must accept their responsibility, as I would. I would not hesitate then to take statutory powers.
    Sir A. V. Harvey: Why is the right hon. Gentleman shelving his responsibilities? Surely the events of recent months have shown that he should have taken action, rather than look at the matter now when it is closed?
    Mr. Crosland: I am interested that it is the Opposition who are pressing to take legislative action in the matter, and I am very interested in the hon. Gentleman's attitude. Since the Government and the City are now working on a new code, and possibly a revised panel, it is right to await the outcome of those discussions before deciding whether Government action is necessary.
    Sir A. V. Harvey: On a point of order. May I have your protection, Mr. Speaker. I asked a supplementary question, and the right hon. Gentleman deliberately misconstrued what I said.
    Mr. Speaker: Order. How a Minister answers questions is not a matter for the Chair.

    Man-Made Fibres
    Sir K. Josephasked the President of the Board of Trade when he will announce his decision on the Report of the Monopolies Commission on the supply of man-made cellulosic fibres.
    Mr. Dell: We expect to have the result of the tariff review by the end of the year; my right hon. Friend will then be able to take a decision on the Commission's recommendations.
    Sir K. Joseph: But the President of the Board of Trade himself said in July that he hoped to have the result of the tariff review in two months. Are we now to understand that it is to take six months in all?
    Mr. Dell: I am afraid that the tariff review is taking longer than was previously expected, because it was decided that it was desirable to seek further views both from certain other producers like Lansil and other selected consumers as to the effect of a tariff reduction.
    Sir K. Joseph: Have the Government decided still not to act on the individual recommendations but to wait and act on the Report as a whole?
    Mr. Dell: We still wish to take a decision on the Report as a whole rather than a series of piecemeal decisions.
    Mr. Mapp: Will my hon. Friend bear in mind that there are firms in the spinning industry in Lancashire dependent on the one supplier for their raw material, which are engaged, and want to be further engaged, in the home and export trade in direct competition with that largely monopolistic supplier? Will my hon. Friend bear in mind that expansion might be held back because of the situation shown to him in the report?
    Mr. Dell: We shall take full account of the point of view which my hon. Friend has just expressed.

    Argentine Meat
    Dr. John Dunwoodyasked the President of the Board of Trade what effects have the banning and the resumption of meat imports from Argentina had on British exports to that country.
    Mr. Dell: I can give no precise estimate, but there is no doubt that some important contracts were lost. Since the restrictions on carcase meat were raised our export trade has made good progress.
    Dr. Dunwoody: Does my hon. Friend agree that over the past 18 months there has been steady, if slow, progress in our exports to Argentina, and that some of the exaggerated and gloomy forecasts when we had to ban meat coming to this country have not been proved true?
    Mr. Dell: There was undoubtedly during the period of the ban a falling off in the rate of expansion we were looking for. The situation has improved subsequently, and I hope that it continues to improve and that our whole trade with Argentina gets into a better balance than it has recently been in.

    Development Areas
    Dr. John Dunwoodyasked the President of the Board of Trade what further measures he intends to take to provide employment in those development areas especially subject to seasonal unemployment.
    Mr. Dell: I have no further measures in mind. But a wide range of assistance is already available.
    Dr. Dunwoody: Does my hon. Friend agree that last winter additional assistance went into the South-West development area at between two and three times the rate to any other areas, and that as unemployment is higher than it was last year, both absolutely and in comparison with those other areas, it is illogical and unfair that the South-West has been completely left out of the £10 million programme for winter works this winter?
    Mr. Dell: The Government have had to take account of the high figures of unemployment in other development areas. Nevertheless, considerable assistance is available to the South-West, among which are the new measures for tourism of which my hon. Friend is aware.
    Mr. Waddington: Is the hon. Gentleman aware that there is very considerable concern that a great deal too much money, particularly in the way of Regional Employment Premium, is already being spent in the development areas and that the money does nothing whatsoever to bring new industry into the areas or reduce the level of unemployment?
    Mr. Dell: I am afraid that I disagree with the hon. Gentleman's interpretation of the situation. In my judgment, the Regional Employment Premium assists both by encouraging new firms to come into the development areas and by making those which are already there more competitive and thus more capable of providing employment.

    Overseas Investments
    Mr. Higginsasked the President of the Board of Trade what forecasts he has made of the direct investment in the overseas sterling area and the non-sterling area, respectively, in 1968; and whether they confirm a trend towards a lower

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    proportion of investment in the overseas sterling area.
    Mr. Dell: I cannot give exact figures which are liable to fluctuate from year to year, but I expect the proportion in the Overseas Sterling Area to be about 50 per cent., as compared with about 60 per cent. prior to 1966.
    Mr. Higgins: Does not the hon. Gentleman agree that, if we are to appraise the trend correctly, we need a true estimate of the rate of return on overseas investment? Would he agree that the Reddaway basis, which takes no account of capital gains in overseas investment, is inadequate, and will he ensure that capital gains are taken into account in future estimates?
    Mr. Dell: As the hon. Gentleman is aware, Professor Reddaway's final report is shortly to be published, and no doubt we shall all have an opportunity of discussing it then, particularly in the light of everything that both the hon. Gentleman and I said on this subject in 1965. I think that so far Professor Reddaway confirms my view of the subject rather than the hon. Gentleman's.

    Mergers
    Mr. Higginsasked the President of the Board of Trade whether it is his intention to define more precisely the rôle of the Industrial Reorganisation Corporation vis-à-vis the Monopolies Commission; and if he will make a statement.
    Mr. Crosland: No, Sir. It is already well understood that the rôle of the I.R.C. is to promote and facilitate the desirable re-structuring of industry, and that of the Monopolies Commission is to investigate mergers which are referred to it by the Board of Trade; these two functions are wholly compatible.
    Mr. Higgins: Is not the crucial word "desirable"? Would not the right hon. Gentleman agree that at the moment the Monopolies Commission does not have the staff to enable it to look at mergers at short notice? Will he do something rapidly to remedy this and ensure that mergers recommended by the Industrial Reorganisation Corporation are submitted to independent scrutiny?
    Mr. Crosland: I should not think it would make sense to refer all mergers or all mergers recommended by the Industrial Reorganisation Corporation to the Monopolies Commission. I think it is better to have prior consultation, as now exists, between the I.R.C. and the Board of Trade. On the hon. Gentleman's earlier point, I am considering how we can strengthen the Monopolies Commission. In my view, the stronger the merger movement is, the greater is the need for the Monopolies Commission to prevent abuse of market power.
    Mr. Heffer: Is it not clear that my right hon. Friend's example of strengthening, on the one hand, the Monopolies Commission and, on the other hand, looking at the problem was not carried out in relation to the G.E.C.—G.E.C.-General Electric merger? Was it not unfortunate that that merger was not referred to the Monopolies Commission, and was not my right hon. Friend's statement afterwards totally unsatisfactory in this case?
    Mr. Crosland: I am sorry if my hon. Friend did not agree with the statement, which is a different thing from saying that it was totally unsatisfactory. The reasons why we did not refer that merger were explained clearly in my statement, and they are fairly generally known to the House. We decided that, on balance, it was a desirable merger and, therefore, did not want to hold it up for a number of months by referring it to the Monopolies Commission.
    Sir K. Joseph: Will the right hon Gentleman take the opportunity to deny newspaper stories that the Prices and Incomes Board will be allowed anything to do with these matters?
    Mr. Crosland: I am not aware exactly what those newspaper stories are. I cannot spend the whole of my time reading newspaper stories. There are many better things in life to do than that. Therefore, I regret that I can neither confirm nor deny the reports that the right hon. Gentleman mentions.
    Mr. George Brown: Would my right hon. Friend please reassure me that, since the I.R.C. was established to re-structure industry, he will not re-establish the Monopolies Commission to frustrate it?
    Mr. Crosland: I should never dream of frustrating any child of my right hon. Friend. I can certainly give him the assurance: that all of us give the strongest possible support to the work of the I.R.C., a body which has been successfully carrying out, I think, the objectives that he had in mind when he set it up

    Kennedy Round
    Mr. Laneasked the President of the Board of Trade what is the present position regarding his proposals to accelerate the Kennedy Round tariff cuts; and if he will make a statement.
    Mr. Dell: Our proposals, which my right hon. Friend announced in the House on 14th March, remain on the table. Progress depends on the ability of the principal countries concerned to meet the conditions attached to the offer.—[Vol. 760, c. 1638–43.]
    Mr. Lane: Would the Government consider taking a fresh initiative with the new American Administration as soon as it is established in order to try to get more progress in the direction that we all want?
    Mr. Dell: The question will, of course, arise whether the offer should remain open after 1st January, 1969. At a time when the new Administration is coming into office, I see no reason why our offer should be withdrawn, though, of course, this is a matter on which we have to act together with other countries whose views will be important in this respect.

    Investment Grants
    Mr. Laneasked the President of the Board of Trade what representations he has received regarding the continuation of the temporary increase in investment grants after the end of the current year; and what reply he has sent.
    Mr. John Biffenasked the President of the Board of Trade what proposals he has to change the existing rates of investment grants.
    Mr. Crosland: I have received a number of representations from the C.B.I, and other bodies asking that the temporary increase in the rates of investment grant should be continued beyond the end of 1968. I have, however, stated on a number of occasions, most recently
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    in reply to my hon. Friend the Member for Glasgow, Springburn (Mr. Buchanan) on 23rd October, that the rates will revert to 40 per cent. and 20 per cent. on 1st January, 1969.—[Vol. 770, c. 292.]
    Mr. Lane: While I agree with that decision, may I ask whether the right hon. Gentleman has considered the very healthy prospective increase in investment next year in the service and distributive trades, quite apart from manufacturing industry, and does not this cast some doubt on the value of investment grants as a stimulus to manufacturing investment?
    Mr. Crosland: I am obliged to the hon. Gentleman for his opening remark. As to the prospects for 1969, which are encouraging generally in both sectors—manufacturing and service and distribution—I should not like to draw any conclusions from the surveys of investment intentions which the Board of Trade carries out because, while I think they are an invaluable general guide to the trend of investment, the particular figures cannot be relied upon as a totally accurate indication of what will occur.
    Mr. Biffen: Will not the right hon. Gentleman reflect a little more sympathetically on the point made by my hon. Friend the Member for Cambridge (Mr. Lane) and accept that investment grants are an area of public expenditure which could well be capable of very severe reduction as part of the strategy of tax reduction?
    Mr. Crosland: No, Sir; I would certainly not accept that. On the contrary, I think that investment grants were one of the major reasons why investment held up very much better in the last year or two in a period of relatively low demand than it has held up in any similar period since the end of the war.
    Mr. Cronin: Is it not the case that a substantial proportion of these investment grants are used for importing plant and machinery from abroad, and, bearing in mind the extent to which imports are bedevilling our balance of payments situation, is it not undesirable that the Government should subsidise them to this extent?
    Mr. Crosland: No, Sir. It is not a question of subsidy. The fact is that

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    investment grants apply to all eligible machinery, whether bought at home or abroad. This must be true of any system of grants like this. We could not under any of our international obligations have a system of grants which differentiated between home production and imports.

    Trade Figures (Publication)
    Mrs. Renée Shortasked the President of the Board of Trade if he will cease the practice of publishing the trade figures every month.
    Mr. Dell: No, Sir. The monthly figures provide essential information.
    Mrs. Short: Would not my hon. Friend agree that some of the difficulties the pound has run into of late can be traced to this neurotic preoccupation with the monthly trade figures? Is it not the case that no other country publishes trade information in the form we make ours available to friend and foe alike? Does not my hon. Friend think we should publish the trade figures less frequently?
    Mr. Dell: I think that we must publish the figures monthly. Our major trading competitors publish theirs monthly. I believe that people increasingly understand that one should not rely on a single month's figures for trade and that they will understand this even more when they observe the continuing favourable trend in our balance of payments.
    Mr. Stratton Mills: Would not the proposal put by the hon. Member for Wolverhampton, North-East (Mrs. Short) have the effect of stopping the Prime Minister talking of economic miracles?
    Mr. Dell: It is perhaps disturbing to the hon. Member for Belfast, North (Mr. Stratton Mills), who no doubt will find many opportunities for such remarks, that our trading position is greatly improving. I am sure that it is the wish of the House in general that it should continue to do so.

    Africa
    Mr. Juddasked the President of the Board of Trade whether he will make a statement on the present rate of British exports to, and investments in, South Africa, the Portuguese territories of Africa and the rest of the continent of Africa.
    Mr. Crosland: Comparing the first nine months of this year with the same period last year, United Kingdom exports fell by 3 per cent. to South Africa, and rose by 34 per cent. to the Portuguese Territories and 9 per cent. to the rest of Africa. There has, however, been a marked increase in exports in recent months, and in the third quarter exports to South Africa were 11½ per cent. higher and to the rest of Africa 24 per cent. higher than in the same period last year. The latest figures for private direct investment relate to the year 1966 when, compared with 1965, investment fell by 22 per cent. in South Africa, 33 per cent. in the Portuguese Territories and 35 per cent. in the rest of Africa.
    Mr. Judd: Does not my right hon. Friend agree that we must continue to lock closely at our economic relations with Africa, thinking, first, in terms of principle and of our rejection of economic and racialist exploitation and, secondly, in terms of enlightened economic self-interest, and that we should therefore take opportunities in the main part of Africa which at present are being seized by so many of our industrial competitors?
    Mr. Crosland: The figures I quoted of exports to the rest of Africa will, I hope, reassure my hon. Friend that a considerable effort is going into increasing them. We must bear in mind what he said in the earlier part of his supplementary question, but if I took the view that we should not trade with any country of whose Government I politically disapproved we should have very few trading partners in the world.
    Sir Ian Orr-Ewing: Can the hon. Gentleman explain why the figures are so much out of date? Was it not one of the Budget measures to encourage investment in under-developed countries and discourage it in developed countries? If we are always two years behind in cur figures, is it not difficult to measure the success or failure of such Budget undertakings?
    Mr. Crosland: These figures come from another Department and I should like to look into the point put by the hon. Gentleman and write to him.

    Balance of Payments (American Aircraft Imports)
    Mr. Wingfield Digbyasked the President of the Board of Trade whether in future, he will include in the monthly import figures the purchase of American military aircraft or missiles, so as to give a more accurate picture of the real balance of payments.
    Mr. Dell: The import figures published monthly are shown both including and excluding arrivals of American military aircraft and associated equipment.
    Mr. Digby: Does not this practice of excluding them look too much like an exercise by the Government in wishful thinking with regard to imports? If the real test is to be date of payment and not delivery, should not the same principle, in fairness, be applied to exports, which would make these figures look rather different?
    Mr. Dell: The figures are shown in those published including American military equipment. They are treated separately because these imports are large, special and completely documented items. The reason for their exclusion from the visible trade balance figures is the effect they would have on the presentation of the balance of payments figures because, in this respect—and this is the main problem of the balance of payments as against the balance of trade—there are compensating credit entries.
    Mr. Corfield: But the same could apply to a large number of other items which are not pieces of defence equipment. This differentiation makes nonsense of the figures. For example, what about the proposed purchase by B.O.A.C, with dollars, of American aircraft? Surely this is exactly the same principle but it is treated differently.
    Mr. Dell: The problem is not as great as the hon. Gentleman suggests because all the figures are presented. If the hon. Gentleman wanted, for example, to look at payments and drawings, he would find them in the quarterly estimates given in "Economic Trends". All the information is available and to segregate it in this way actually increases the amount of information available to those who study
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    both our balance of payments and our balance of trade.

    Advance Factories (Scotland)
    Mr. Dalyellasked the President of the Board of Trade how many advance factories in Scotland were unoccupied at the last convenient date; and what is the square footage.
    Mr. Gordon Campbellasked the President of the Board of Trade how many advance factories in Scotland are completed but empty; how many are under construction; and how many of these have not yet been assigned to prospective tenants.
    Mrs. Gwyneth Dunwoody: At 31st October, 1968, 15 advance factories in Scotland, with a total area of approximately 335,000 square feet, were complete but unoccupied. Applications for two of these are under consideration. A further three are under construction and two of these have already been allocated.
    Mr. Dalyell: Is priority still being given to the construction of advance factories in areas where collieries are closing down?
    Mrs. Dunwoody: Obviously, we have a rolling programme which concerns special development areas. It is certainly true that we give them special consideration.
    Mr. Campbell: Does the hon. Lady agree that an empty factory helps no one? Is she satisfied with the present position in Scotland?
    Mrs. Dunwoody: I am sure that the hon. Gentleman would agree that it is very encouraging that 12 factories have been allocated during 1968, which is more than double the rate achieved in 1967. In the last four months, eight have been allocated. Although I am not pretending that I shall ever be satisfied while there is an empty advance factory, I am highly delighted that we seem to be letting them far faster than they have ever been let before.
    Mr. Lawson: Will my hon. Friend accept the compliments of this side of the House on her continued pursuit of this policy, bearing in mind that if these empty factories had not existed, the industries concerned would not have been there now?
    Mrs. Dunwoody: I am grateful to my hon. Friend. We shall not be content until the development areas, which still have too high an unemployment rate, are providing employment at the rate which we think necessary, and the programme of advance factories is one very practical way of achieving that end.
    Mr. Bruce-Gardyne: What is the longest that one of the 15 factories now vacant has been vacant?
    Mrs. Dunwoody: One factory has been standing empty since September, 1966. I do not pretend that I am happy about that, but I hope that we shall continue to let them as fast as we have let them in the last months.

    Kingshill Colliery (Redundant Miners)
    Miss Herbisonasked the President of the Board of Trade what action he is taking to ensure that alternative employment is provided for the men who have become redundant as a result of the closure of Kingshill Colliery Number one.
    Mrs. Gwyneth Dunwoody: The locality is in a Special Development Area and I hope that the additional assistance available to industry in these areas will encourage further development. The Harthill No. I advance factory has recently been allocated and the firm is now recruiting staff. Additional land is being bought, and as soon as this is acquired a start will be made on building a further advance factory.
    Miss Herbison: I thank my hon. Friend for that reply. Is she aware that when this colliery closed about a fortnight ago, 91 men became redundant and that only four of them have found alternative work, which means that in an area where there was already more than 5 per cent. unemployment 87 more are unemployed? Will she realise how important it is that a second advance factory is built? Will she pay no attention to the arguments of Scottish hon. Members opposite?
    Mrs. Dunwoody: I am well aware of the enormous amount of work which my right hon. Friend has done herself on behalf of her constituency and I assure her that we shall do everything we can to facilitate the rapid building of this advance factory.

    South Africa
    Mr. Biffenasked the President of the Board of Trade what is the value of British exports to South Africa for the year to date, and what percentage change this represents over the corresponding period in 1967 and 1966, respectively.
    Mr. Crosland: £196 million to the end of September, which is 3 per cent. less than in the corresponding period of 1967 and 14 per cent. more than in the corresponding period of 1966.
    Mr. Biffen: Does not the very magnitude of these figures indicate the rich and beneficial opportunities which there are for Britain in the southern half of Africa, and ought that not to be a major factor in the negotiations now being concluded with Mr. Ian Smith?
    Mr. Crosland: No, Sir. The Rhodesian question is altogether a different question which is not for me to answer. The hon. Gentleman must know by now that I have made it clear that I support the highest possible level of civilian trade with South Africa.
    Mr. Orme: Does not my right hon. Friend agree that there has been a comparable drain of sterling into South Africa in recent years which in itself has adversely affected our balance of payments?
    Mr. Crosland: No, Sir. I gave the figures for our direct private investment in South Africa in answer to a previous Question a few minutes ago. The facts do not seem to support my hon. Friend's conclusion.
    Mr. Boyd-Carpenter: Can the right hon. Gentleman complete those figures by giving the value of the exports which South Africa was prepared to buy from this country and which the Government refused to allow British exporters to supply, such as Nimrod aircraft?
    Mr. Crosland: It was not simply a matter of the British Government refusing to allow these exports to South Africa. The British Government acted under the terms of the United Nations Security Council resolution. However, to get the record straight I will say that, with one or two possible exceptions, all other

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    major industrial countries are adopting the same policy as we are.
    Mrs. Anne Kerr: Will my right hon. Friend reaffirm that in no circumstances whatever will military weapons be sent to South Africa?
    Mr. Crosland: Yes, Sir. I can reaffirm the Government's policy which has been made absolutely clear on more than one occasion.

    Art Auctions (Ring)
    Mr. Crouchasked the President of the Board of Trade whether he will make changes whereby his Department will improve its liaison with the National Gallery with the object of enabling its purchases of works of art to be made at fair prices and at a reasonable profit to the seller.
    Sir J. Vaughan-Morganasked the President of the Board of Trade why his official inquiries into the allegations concerning the sale at Aldwick Court in March took from May until October.
    Mr. A. Royleasked the President of the Board of Trade what steps he took to inform the National Gallery of the investigation he has been carrying out into the activities of Mr. Julius Weitzner and other dealers after the sale of the Duccio painting at Aldwick Court, Somerset.
    Mr. Channonasked the President of the Board of Trade what is the nature of the inquiry officials of his Department are carrying out into the recent purchase by the National Gallery of the Madonna and Child by Duccio.
    Mr. A. Royleasked the President of the Board of Trade why he has referred the matter of the Duccio sale to the Director of Public Prosecutions since it is impossible to bring a case under the Auction (Bidding Agreements) Act, 1927, as the Magistrates Courts Act, 1952, provides a six months' limit which expired on 26th September, 1968; and what explanation he has for failing to act in time, in view of the information he was given earlier in the year.
    Mr. Crosland: With permission, I will answer these Questions after Question Time.

    Waste Paper
    Mr. Lubbockasked the President of the Board of Trade what steps he is taking to increase the quantity of waste paper collected, in view of the contribution which can be made thereby towards the reduction of pulp imports.
    Mr. Dell: The contribution which the re-use of waste paper can make is well recognised. The practical problem is to gear recovery to the demands of the mills, which are not constant. What is most needed is long-term contracts for the purchase of waste paper from local authorities, and co-operation between mills, local authorities and merchants in watching trends and forecasting demand.
    Mr. Lubbock: Is the hon. Gentleman aware of the great anxiety about the present situation in the waste paper industry and the possibility that one mill will have to import £50,000 of mixed waste because supplies are not available in this country? Will he at least reconsider the industry's demand that S.E.T. on it should be abolished?
    Mr. Dell: S.E.T. is a matter for my right hon. Friend the Secretary of State for Employment. However, if the hon. Gentleman is referring to investment grants, which come within the remit of my Department, I must emphasise that the Industrial Development Act limits investment grants to manufacturing activities. The figures of the use of waste paper this year show a marked rise over the figures of last year. However, the important thing in order to avoid problems of the sort mentioned by the hon. Gentleman is the recommendations of the Paper and Board E.D.C., to which I have referred in the last sentence of my Answer related to the organisation of demand so that people have a guaranteed outlet for their collection.
    Mrs. Anne Kerr: On a point of order. In this quarter of the Chamber, Mr. Speaker, it is impossible to hear what is being said. Will those behind the scenes turn up the apparatus?
    Mr. Speaker: I am seized of the point of order. I shall have it looked into. I hope, however, that points of order will not be raised until the end of Question Time unless they are very important.

  AVIATION

    Offshore Airports
    Mr. Gwilym Robertsasked the President of the Board of Trade whether he will seek powers to make a financial grant towards the development and construction of major off-shore airports near the East Coast to serve London and the East Midlands.
    The Minister of State, Board of Trade (Mr. William Rodgers): Adequate powers are already available, should the need arise.
    Mr. Roberts: Does not my hon. Friend agree that, in a thickly populated island like ours, the only sensible location for major airports must be on platforms offshore, and will he agree also that any consideration of other types of site by commissions or committees now sitting is a complete waste of time?
    Mr. Rodgers: I do not agree with my hon. Friend's second proposition. I agree, however, with his first, that there is an interesting prospect here in the establishment of major airports offshore. Chicago, for example, has in mind, I understand, a new airport in Lake Michigan. This is, however, principally a technological matter upon which I could not usefully comment further.
    Mr. Corfield: Will the Minister bear in mind that there is a fairly large number of passengers to whom proximity to a major centre of population is not of first importance and that, in the circumstances, a lot of the noise and inconvenience which is caused by flying could be saved by adopting his hon. Friend's suggestion?
    Mr. Rodgers: Yes; a balance has to be struck, and that is a point to be borne in mind.

    Sheffield Airport
    Mr. J. H. Osbornasked the President of the Board of Trade what consideration he has given to the construction of an airport at Todwick to serve Sheffield; and if he will make a statement.
    Mr. William Rodgers: The construction of an airport to serve Sheffield would in the first instance, be a matter for the
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    city council, and I understand that it has a project under consideration.
    Mr. Osborn: Has a study been made of feeder line services in the United States? Is not the hon. Gentleman aware that South Yorkshire needs international business, and Sheffield is the largest city without a major airport? Will he offer positive encouragement rather than passive reception of information coming from the city council?
    Mr. Rodgers: I should certainly offer positive encouragement to those who see an essential need and seek to satisfy it. I know the hon. Gentleman's long interest in the particular needs of Sheffield, and I hope that they will be pursued, bearing in mind the full nature of the problem and regional as well as local requirements.
    Mr. Hooley: Will my hon. Friend confirm that positive and careful consideration is being given to the construction of a major airport in the Yorkshire-Humber-side areas?
    Hon. Members: Nothing to do with it.
    Mr. Rodgers: There seems to be a difference of opinion about what is needed, which emphasises the need for very careful consideration. We shall bear in mind and take the closest interest in all proposals made to us.
    Mr. Corfield: Is not one of the major obstacles to a really successful regional development policy the lack of international air services to and from many of our provincial centres?
    Mr. Rodgers: That goes rather wider than the Question. We have to keep a sense of proportion here. We want the full development of domestic and international services, but we must make sure that our investment in civil aviation and airports is acceptable in terms of total national priorities.

    Civil Aviation Act 1968 (Consultation Procedure)
    Mr. Onslowasked the President of the Board of Trade what proposals he has to apply the airport consultation procedure provided under the Civil Aviation Act, 1968.
    Mr. William Rodgers: We have started consultations with associations representative of aerodrome owners and, in the

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    light of these, intend to designate aerodromes where there is evidence of public need and demand. A few requests for designation have already been received.
    Mr. Onslow: Should not the procedure be advertised, since aerodrome owners are less likely than the public to want to see it introduced? Will the hon. Gentleman do his utmost to see that the Act is made use of?
    Mr. Rodgers: I will see that the provisions of the Act are known as widely as possible. I shall also bear in mind what the hon. Gentleman himself said during our debates on the Bill—that these provisions should be operated in a reasonable and sensible way.
    Dr. John Dunwoody: Would not the profitability of British civil airline operators be increased if they were more adventurous in opening up new routes in Britain?
    Mr. Rodgers: I do not think that that would necessarily follow.

    Civil Airline Operations
    Mr. Onslowasked the President of the Board of Trade what action he is taking to restore the profitability of British civil airline operations.
    Mr. William Rodgers: I am aware of certain current problems but the recession in airline operations is not confined to British operators. We must await the report of the Edwards Committee to guide us on the longer term.
    Mr. Onslow: That is a complacent reply. The current problems can be described as conditions of extreme difficulty in an industry which is a major foreign exchange earner. Is the hon. Gentleman aware that we therefore cannot afford to wait for the Edwards Report?
    Mr. Rodgers: There are problems. As long as the present system exists, it would be wrong to change it before the Edwards Report is made. It is up to the operators to make applications to the Air Transport Licensing Board and for the Board to decide on those applications. There is a danger of airline operators suffering a loss in traffic which would not be offset by the increase in rates.
    Mr. Rankin: In view of the importance of the issue, when may we expect the Edwards Report?
    Mr. Rodgers: By Easter, 1969, I hope.
    Sir A. V. Harvey: Will the hon. Gentleman treat this with great urgency? Not only the independent but the nationalised airlines are operating under extreme difficulties. Unless some action is taken to alleviate their financial problems, British airlines will be in serious trouble within months.
    Mr. Rodgers: I am aware of the difficulties, and it is proper that we should discuss them in this way today. But we must bear in mind that any major change which may be required should be made with all the facts before us. Reluctant as I am to have to await the Edwards Report, it would be nonsensical to make a decision before receiving it.

    Commercial Air Flights
    Mr. Rankinasked the President of the Board of Trade if he will define the official terms "short haul" and "medium haul" in so far as commercial air flights are concerned.
    Mr. William Rodgers: There is no official definition of the terms "short haul" and "medium haul" but the former generally means a flight of under 1,000 miles and the latter a flight of 1,000 to 2,000 miles.
    Mr. Rankin: As there is no official definition of these terms and as they are never applied to ships of the sea, why should they be applied to ships of the air, particularly in view of the enormous development which aircraft engines have undergone in the last few years?
    Mr. Rodgers: There is no international definition, but it is useful to have a "shorthand" method of defining aircraft of this type and it serves a purpose.

    Airports (Classification)
    Mr. Rankinasked the President of the Board of Trade if he will reconsider the use and application of the terms "municipal" and "international" in so far as the official classification of airports is concerned.
    Mr. William Rodgers: We do not classify United Kingdom airports in this way. The International Civil Aviation

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    Organisation classifies certain aerodromes as international but the term "municipal airport" is not used.
    Mr. Rankin: I am very glad to hear that statement and I take it that Glasgow Airport will no longer in any circumstances whatever be referred to as a municipal airport.
    Mr. Rodgers: I am sure that the future of Glasgow Airport will turn on something rather more significant than the way in which it is described and I know the active championship of Glasgow which my hon. Friend has pursued. Here again, however, "shorthand" is useful. I remind my hon. Friend of the statement made by my right hon. Friend on 22nd February when he endorsed the previous agreement between—[HON. MEMBERS: "Too long."]—are hon. Members opposite dissatisfied with this reply? I was saying that my right hon. Friend endorsed the previous agreement between the British Airports Authority and the Glasgow Corporation. This matter was also pursued at length the other night on the Adjournment and I hope that on reflection my hon. Friend and hon. Members opposite will be satisfied.
    Mr. Rankin: On a point of order. In view of the continued interruptions of hon. Members opposite and the difficulty of hearing what my hon. Friend has just said, may I be assured that he said nothing just now to qualify his main Answer?
    Mr. Speaker: I must leave that to the hon. Gentleman to determine for himself.
    I point out that today we have had fewer Questions and Answers than usual and that for every hon. Member who puts down a Question which is not reached it is to him a very important Question which is not reached. The trouble today has been both long supplementary questions and long answers. Mrs. Kerr—point of order.
    Mrs. Anne Kerr: I would not wish to detain the House. I thought that I had made my point of order, which was that I could not hear in this part of the House. I think that our friend has turned up the sound equipment.
    Mr. Speaker: The hon. Lady made this point last night, also. I did not wish to appear discourteous just now,
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    but it helps if these points of order are raised after Question Time. We will look into the difficulty that the hon. Lady is complaining about. I am not sure that the acoustics of the place are perfect. At any rate, hon. Members can help by always speaking up.

  SHIPPING

    Ships (Imports)
    Mr. Ridleyasked the President of the Board of Trade if he will set up a study of the consequences for the balance of payments of the import of ships from abroad as a result of investment grants and free depreciation.
    Mr. Dell: The purpose of these incentives is to encourage investment in new ships by British owners. The British shipping industry makes a valuable contribution to the balance of payments.
    Mr. Ridley: If the Japanese, for instance, charge a 15 per cent. tariff on new ships, why should we subsidise them to the extent of 25 per cent.? Is the hon. Gentleman aware that this has already cost the taxpayers £66 million? Will he not at least set up an impartial inquiry into this drain on taxpayers' money across the exchanges for no apparent benefit?
    Mr. Dell: I think the hon. Gentleman will find that under the Kennedy Round the tariff to which he has referred has been reduced and will be reduced further. As to an inquiry, we are, of course, aware of, and study, the consequences for the balance of payments of our various actions in this field. I think the hon. Gentleman will find that a British-owned ship, even if bought abroad, if given a reasonable rate of profitability, is likely to make a positive contribution to our balance of payments, which, reading the Question, seems to be what the hon. Gentleman is interested in.
    Mr. Small: Will my hon. Friend consider having a review of subsidising shipping in this country in respect of ships that are built abroad, which is actively under consideration by many people who are interested in shipping matters?
    Mr. Dell: As my hon. Friend knows, we are in frequent negotiation with our

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    competitors abroad on the subject of subsidies for shipbuilding. We hope to eliminate subsidies for shipbuilding. We do not regard investment grants for shipping—which are involved in this case—as constituting a subsidy. We regard them as an incentive to the British shipping industry, which makes a valuable contribution to our balance of payments.

    Merchant Shipping (Cape Route)
    Mr. Wingfield Digbyasked the President of the Board of Trade what tonnage of British merchant shipping is now using the Cape route; and what was the figure in 1965.
    Mr. William Rodgers: I regret that this information is not readily available.
    Mr. Digby: But this is the kind of information which the Department should be able to provide. Is it not clear already that the Suez Canal is not likely to be as important again? Will the hon. Gentleman consult the Government with regard to safeguarding the Cape route?
    Mr. Rodgers: It is necessary to have a sense of proportion about the collection of information. I agree that the Cape route is important and it is likely to remain particularly so as long as the Suez Canal is closed.

ART AUCTIONS (RING)
The President of the Board of Trade (Mr. Anthony Crosland): With your permission, Mr. Speaker, I will now answer Question Nos. 31, 60, 61, 62 and 73.
On 29th May last the right hon. Member for Reigate (Sir J. Vaughan-Morgan) and the hon. Member for Richmond, Surrey (Mr. A. Royle) came to see me to tell me that in their view a "ring" was operating illegally at art auctions. The Board of Trade made inquiries, but found no support for the general allegations that had been made.
Following a further meeting with the two hon. Members, the Board made additional inquiries, in the course of which it wrote to the Society of London Art Dealers on 6th August. The Society replied that it might be prepared to give some information but could not do so before the end of September. When it did so, on 30th September, a specific
890
allegation was made, for the first time, about the sale at Aldwick Court. It did not substantiate the allegation by any evidence and did not name anyone who might provide evidence. No names of possible witnesses were mentioned until 24th October when Mr. Tomalin, of the Sunday Times, gave information to my officials. I then referred the papers to the Director of Public Prosecutions.
I am now advised that, as the auction took place on 26th March, an offence against the Auctions (Bidding Agreements) Act, 1927 is out of time for prosecution and, moreover, was already out of time on 30th September, when a specific allegation was made to my Department.
I am further advised that it would not be possible to institute a prosecution for any other offence based solely on the circumstances of the Aldwick Court sale.
As regards the price paid by the National Gallery for the Duccio painting, this was determined by the price which an overseas buyer was prepared to pay for it. I regret that those with knowledge of the activities of the dealers at Aldwick Court did not come forward, either to the Board of Trade or to the police, much earlier, when action could have been taken.
I am, however, not content to leave the matter as it now stands and I am considering urgently by what means inquiries can best be pursued into this particular case and into the general question of the operation of auction rings.
Mr. Crouch: I am glad that the President of the Board of Trade has told us that he is not content with the present situation. Is he aware of the concern felt in the House and throughout the country at the casualness of his Department in dealing with this whole matter, which is, after all, a commercial one? It was extraordinary casualness by his Department in not advising the National Gallery about the position of this painting, which was sold for £2,700 and was subsequently to be bought by the National Gallery for £140,000. We are much concerned at such casualness.
Mr. Crosland: As to the price paid by the National Gallery, I think that the hon. Gentleman has not understood the position. That price would have been unaffected by any warning given to the

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National Gallery, because it was set by the price which the Cleveland Museum of Art was willing to pay for the picture. That simply does not come into the matter.
As to the question of casualness, I cannot accept what the hon. Gentleman has said. No doubt there can be mutual criticism here. I am not certain that we have not got lessons to learn from this. I think that we have and I propose to learn them myself. Nevertheless, if the hon. Gentleman is saying that we should have been more subtle, or more diligent, I can only say that we would have been greatly helped in our inquiries if we had not met a wall of silence, amounting almost to a conspiracy of silence, on the part of many people who, it now emerges, have for some months past known not only about the Aldwick Court case, but about the activities of this "ring" in particular.
Sir J. Vaughan-Morgan: First of all, if no prosecution is possible, will the right hon. Gentleman consider setting up, under his own powers, an independent inquiry, under a Queen's Counsel, to look into the whole circumstances of this particular matter? Secondly, may I point out to him that in blaming, in my view quite unjustly, certain people, whose names we drew to his attention, for not giving this evidence, they could have found themselves in the very difficult circumstances of a libel action if names were given and mentioned?
Mr. Crosland: This surely raises the acute problem of anyone making inquiries in this matter. What I was pointing out—and I am not trying to pretend that we have been blameless—was that our activities were certainly not eased by the fact that it proved so extraordinarily difficult to get anyone, however privately, to come forward and give us the information, which we now know many of them had.
As to the point about the inquiry—may I say, in passing, that I am most grateful to the right hon. Gentleman and his hon. Friend the Member for Richmond, Surrey (Mr. A. Royle) for the help which they have given us in opening this matter up—this is a possible form of inquiry. I would not like to commit myself, but it is one of the forms that I am now considering.
Mr. A. Royle: Is the right hon. Gentleman aware that my right hon. Friend and myself gave him specific allegations at our meeting with him in May this year, and that as a result of the incompetence of his Department in not moving at an earlier date, the D.P.P. cannot now prosecute? Will he therefore take steps to consult with his right hon. Friend the Home Secretary with a view to taking out a deportation order against Mr. Weitzner, who, quite clearly, has abused the hospitality of this country?
Mr. Crosland: The question of a deportation order against any citizen is a matter for my right hon. Friend the Home Secretary, and in any event I would not be willing, in question and answer, to find someone guilty until he is proved so. We must leave that question open.
As to the matter of what information was given me, there clearly is, as the hon. Gentleman knows, a conflict of memory here. He and his right hon. Friend were good enough to see me in May, and neither I nor my official who accompanied me can recall any mention being made at that meeting of either the Duccio painting or the Aldwick Court sale generally, nor does the note of the meeting carry any reference to these things.
I am quite prepared to say that this may be an error of memory on my part. I cannot, of course, guarantee that it was not mentioned. If it was mentioned, the matter simply escaped the attention of both the official and myself and was not in the record of the meeting. I must point out that when, in July, I wrote to the hon. Member and his right hon. Friend a letter which they found unsatisfactory, their reply was still in purely general terms and made no reference at all to the Duccio or the Aldwick Court auction.
Mr. Channon: Does not the right hon. Gentleman agree that this is far too serious a matter to be left without a definite conclusion and that, in the interests of the trade and of people who have been mentioned outside and inside the House, it is absolutely essential that there should be a public inquiry so that we can know the facts and action can be taken in future to make sure that these distressing events do not recur?
Mr. Crosland: This is a matter of public concern. As I said, I do not want to leave it where it stands if only because unjustifiable aspersions are cast in consequence of this on the British art market as a whole, the great majority of whose dealers have standards of irreproachable integrity. I am very anxious that this matter should be cleared up. I repeat what I said in my original reply, that I am considering urgently by what means inquiries can best be pursued both into this case and into the more general problem of auction rings.
Mr. Strauss: Is not one of the basic problems that my right hon. Friend is now out of time in prosecuting because the action took place six months ago? Is not this obviously a ridiculous situation? Will he consider urgently an early amendment of the governing Act?
Mr. Crosland: My right hon. Friend has a very important point. In this extremely difficult world, where information is very hard to come by, it is not always possible to find out the facts of the case within six months. The time limit, or whatever the legal phrase is, and the penalties, are matters which rate looking into very urgently.
Mr. Alexander W. Lyon: Would my right hon. Friend confirm that, if there has been any fraud, and it has occasioned loss, it was loss to the trustees of the estate, and that they have their civil remedy in the civil courts if they wish to avail themselves of it?
Mr. Crosland: I hesitate very much to make any remarks about legal matters, not being a lawyer and knowing nothing about the law. However, as I understand, the position is as stated by my hon. Friend—that it is a matter for the estate. I have seen, as I think the right hon. Member for Reigate and the hon. Member for Richmond, Surrey, have, a letter from the solicitors acting for the estate, suggesting that there is certain action which they can take. But this is so subtle a legal point that I shall not even read the bit of my brief concerning what they might do.
Mr. Whitaker: Is it not unsatisfactory that, once again, a newspaper, and particularly the Sunday Times, has investigated and exposed frauds which apparently the police and my right hon. Friend's Department were unaware of?
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Therefore, as the last prosecution under the Section was brought 40 years ago, will my right hon. Friend strengthen his investigation department and/or amend the Act and increase the maximum penalty?
Mr. Crosland: I have already given an answer concerning the question of penalties and amendment of the Act. That is something that we must look into.
On the other point, it is not just a question of our investigation department not being strong enough. This is a world from which it is extremely hard, for reasons which one can understand, to elicit any definite information about this kind of malpractice.
As I have said, perhaps we should have been more diligent or subtle, but when we started we came up against the wall of silence which I have described. We now know that a large number of people had the information which we all have now and did not choose to make it available to us, for whatever good reasons—fearing libel, or whatever it may be.
Mr. Lubbock: When the right hon. Gentleman came up against the wall of silence to which he refers, did he make a report to the police about the allegation made by hon. Members? If so, on what date did that occur?
Mr. Crosland: No. When they came to see me, the hon. Gentlemen did not have the information about the witnesses who would come forward which first appeared at the end of October and which was the crucial point at which it was posible to refer the matter to the Director of Public Prosecutions. The names of those possible witnesses did not come forward to me or to anybody else until 24th October, and until we had them the matter could not be referred to the Director of Public Prosecutions or to the police.
Mr. Ellis: Is my right hon. Friend aware that he has revealed that quite a lot of people knew exactly what was going on? Therefore, would he look into the position whereby people who knew what was going on have a duty? It is possible to pursue these people for conspiring to keep silence when they knew that a conspiracy existed. Would my right hon. Friend look at the matter from that angle?
Mr. Crosland: I do not think that we have evidence of conspiracy in the legal sense of the term, so that I would not make any comment on that matter. My remarks on this subject will, I think and hope, be noted in the art world. It would be of great help to my Department, which has limited powers in this matter, if we had more co-operation from that world when it comes to an alleged scandal such as this auction "ring".
Sir J. Vaughan-Morgan: Arising out of the question on the law put by the right hon. Member for Vauxhall (Mr. Strauss), I wonder whether the President of the Board of Trade could say what has happened to the conversations between the Home Office and the Board of Trade concerning a survey into the auction law promised in the House by the Under-Secretary of State for the Home Department on 23rd December, 1964, as appears from column 1259 of HANSARD for that date?
Mr. Crosland: This was before I came to the Board of Trade, but, naturally, I have made inquiries. As I understand the position, an inter-Departmental investigation was made which concluded that the basic trouble—and this is a strong point—is not the letter of the law but the difficulty of discovering evidence. Therefore, it was concluded, rightly or wrongly, that the case for altering the law was not sufficiently made out, particularly since, after the famous scandal of two years or so ago, we had understood that matters had somewhat improved. However, in the light of this situation, I propose to look at the whole argument again and may not necessarily agree with what was decided two years ago.

BUILDING AND CIVIL ENGINEERING INDUSTRIES (WAGE SETTLEMENT)
Mr. R. Carr (by Private Notice)asked the Minister of Public Building and Works whether he will make a statement regarding the decision to block the wage settlement recently agreed between the employers and trade unions in the building and civil engineering industries after it had already come into force.
The Minister of Public Building and Works (Mr. Robert Mellish): In answering this Question, I have to inform the
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House with regret that my right hon. Friend the First Secretary of State is indisposed.
On 14th October the building industry's Wage Negotiating Committee decided to recommend to the National Joint Council for the Building Industry an interim increase to take effect from 4th November. The National Joint Council was to consider the recommendation at a special meeting on 24th October. This development was notified to the Department of Employment and Productivity on 17th October, and at a meeting on 23rd October was discussed by officials with the two rides.
At this meeting it was pointed out that the industry's calculation of the interim increases as representing slightly over 3½ per cent. could not be accepted as it disregarded a cost of living increase paid in March, 1968. This represented an increase of per cent., thus bringing the total increase to just under 5 per cent., which is well above the 3½ per cent. ceiling.
No conditions were attached to the increase which was justified only by a reference to rising output in the industry. In these circumstances, the parties were asked to defer the proposed increase pending receipt of a report from the National Board for Prices and Incomes which had been examining pay and conditions in the industry.
The National Joint Council for the Building Industry ratified the recommendations of its Wage Negotiating Committee the following day and informed the Government of the action taken.
After careful consideration of all the circumstances, the Government decided to refer the settlement to the National Board for Prices and Incomes as the increases were above the ceiling and without acceptable incomes policy justification and as a report from the Board on pay and conditions in the building industry was expected before the end of November.
A similar settlement in the civil engineering industry was made on 22nd October, although a request had been made by the Department of Employment and Productivity to defer action pending the discussion with representatives of the building industry on the following day.
Mr. Carr: We understand and regret the reason for the absence of the First Secretary of State. We realise that Ministerial responsibility for this action rests with her and not with the right hon. Gentleman. May I put three points to him?
First, is he aware that employers and unions in this industry gave the Government a whole 12 months' notice of their need and desire to make a proper long-term settlement and that the only reason why they have had to come forward at this juncture with an interim settlement is the delay and dithering caused by the Government's action, notably waiting six of the 12 months' notice before putting the matter to the Prices and Incomes (Board? Secondly, is the right hon. Gentleman aware that there is evidence of a 5 per cent. rate of growth in output per man hour in the industry?
Thirdly, is he aware that in these circumstances and at this stage, after the agreement has come into operation, this action is calculated to cause industrial strife and disputes, is a slap in the face for responsible trade union/employers' leadership and is a disgrace to the Government?
Mr. Mellish: The right hon. Gentleman must understand that the action taken by the Government is in line with the policy already explained in the House, and which has received the consent of the House. It is, therefore, Government policy. There were discussions between both sides of the industry, as the right hon. Gentleman knows, and they were informed as long ago as March that it was the Government's intention to refer the claim to which the right hon. Gentleman has referred to the Prices and Incomes Board.
It is true that there was a delay in referring this matter until May, but there can be no doubt that they were aware of the intention of the Government on this matter. Indeed, there were long discussions in which I was very much involved.
The policy of the Government is quite clear. In our view, it would have been an abrogation of Government policy had this interim award been made in spite of the fact that they only had to wait, as they were asked to do, until the end of November for the report from the
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Prices and Incomes Board, upon which there could then have been a discussion and, perhaps, final settlement of the problem. What the Government have said is fair and proper. It is in accord with Government policy.
Mr. Heffer: Is my right hon. Friend aware that the decision of the Government is unjust, stupid and a threat to industrial peace in the building and civil engineering industry? Is he also aware that building and civil engineering workers work in rotten, lousy conditions, that the so-called cost of living rise in March amounted to 1d. per hour and that these negotiations have taken 12 months? May I now ask the Minister to withdraw this reference immediately, before further damage is done to the industry and to the economy of the country?
Mr. Mellish: My hon. Friend's views about the Government's prices and incomes policy are well known in this House. He has every right to his point of view, and so have the Government to theirs. The fact is that they are implementing a policy which has been endorsed by the House. My hon. Friend cannot talk to me about his personal regard for those in the industry. No one has done more as a Minister than I have done to try to help them.
I must, however, make it clear that the industry was aware that the matter was before the Prices and Incomes Board and that it had to wait until the end of November for a report. In spite of that, the two sides decided, against advice, to implement the interim award. That in itself was a challenge to the Government. I hope that a great deal of good will is still left, because the final decision about any standstill will not be made until Monday. Discussions are going on with both sides of industry and I hope that good sense will prevail.
Mr. Biffen: Is not the position at least this much clear: that employees want more money, the employers are prepared to pay more money and the Government now intervene in this industry, of all industries? Is not one way for the industry itself to resolve this dilemma an increase in self-employment in the form of labour-only contracting? Was not this one of the consequences which faced the right hon. Gentleman when he considered Government action?
Mr. Mellish: The hon. Member has broadened the argument, and is talking about the Phelps-Brown Report, which has still to be discussed on the Floor of the House and on which we shall be glad to hear from him. Let us keep the argument as it is.
This is a case in which both sides of industry were negotiating a wage increase. Both sides of industry knew that the Prices and Incomes Board was considering the whole impact on the industry, and the original claim dated from last October. The hon. Member is perfectly right to complain about delay—I do not deny that—but the fact is that both sides of the industry knew that this matter was going before the Prices and Incomes Board. All that we are asking for at Government level is that they should wait for the P.I.B. report before coming to any decision.
Mr. Tomney: Would not my right hon. Friend realise that he is allowing events to run ahead of him and out of control? Here was a chance to achieve a long-term settlement with the building industry. In view of the adverse vote at the T.U.C. and at the Labour Party conference on the Government's incomes policy, and his own position as a former trade union negotiator, does not my right hon. Friend now think that it would have been better at this stage to have made a settlement?
Mr. Mellish: I am one of those who happen to believe in collective Government responsibility. I believe, also, that the Government's policy on prices and incomes is right and courageous.
Mr. Costain: I have a good deal of sympathy with the Minister in having to answer concerning this hot chestnut, but will he appreciate—as, I know, he does—the good relations between unions and employers in the building and civil engineering industry? Does he realise that what has happened will inhibit those good relations? Will he make it quite clear that the employers feel that they have a moral obligation to pay this money? What action will the Government take against those who have decided to pay it without the Government imposing a freeze? Will the Minister make the position clear?
Mr. Mellish: The hon Member should know the Act as well as I do. If the
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Government introduce a standstill, there are dangers associated with such an implementation by any individual employer. In my view, the National Federation of Building Trades Employers are very responsible people and I am sure that they will see that the Government's wishes are observed. I hope that this action does not in any way damage the relationship between the unions and employers. I agree with the hon. Member that they are first-rate and I hope that they remain so.
Mr. Lawson: Will my right hon. Friend also bear in mind that the public interest, too, should be protected and that since there has been an extraordinary, steep and rapid rise in the cost of building, something might be done to put a ceiling or a stop to this rise in the cost of building?
Mr. Mellish: The Prices and Incomes Board is looking at the whole question of the building and civil engineering industry. Its report is expected at the end of this month, in a matter of a few weeks. I hope very much that both sides of industry will see the common sense of themselves applying a voluntary standstill order on this interim increase. I assure my hon. Friends and others of my hon. Friends that a great deal of good will exists, but I hope very much that they will exercise this restraint.
Mr. Edward M. Taylor: Is the Minister aware that many substantial wage settlements have been concluded recently after threats of trouble or disruption? In view of this attitude to a responsible claim by an industry with a splendid record of productivity, does not the Minister appreciate that this kind of decision will help to persuade the unions that the only way to get more money is to cause trouble and disruption?
Mr. Mellish: That is one of the arguments. On the hon. Member's argument, whichever way it goes, the Government cannot win. When they try to do what is right in industry and make all industry conform, they are accused of interfering. If they did nothing at all, that would be the negation of government.
Mr. Orme: Following what my hon. Friend has just said, to the effect that the Government cannot win, does he not agree that the disaster and the odium

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of the policy on which they have embarked will now fall upon the Government because of their direct interference in the oasis of free collective bargaining, and that the sooner we get back to that the better? The Government would be well advised, at this late hour, to drop the reference to the Prices and Incomes Board and, perhaps, prevent disaster in one of our major industries.
Mr. Mellish: I know that my hon. Friend will not agree with what I am about to say, but let me point out to him and to others of my hon. Friends who say that the collective bargaining principle is sacrosanct that we have had a collective bargaining principle in this country for many years and that there are hundreds of thousands of our people who are almost at the other end on the poverty line because they do not have the power to get a good economic wage.
Mr. Ridley: Is the Minister aware that if there is a strike it will be entirely the fault of the Government? As, therefore, large numbers of people on both sides in the industry will lose large sums of money, including building employers and those commissioning buildings, will the Government be prepared to compensate people, since it will be they who have started the strike?
Mr. Mellish: I do not think that there will be a strike. I repeat that discussions are at present going on between both sides of the industry and my right hon. Friend's Department, and my own, until a final decision is made on Monday, 11th November. I hope very much that we can arrive at a settlement which will be helpful to the industry as a whole. I know that there is a great deal of good will. It is a question of harnessing it.
Mr. Barnett: How many of the very large number of small firms in the industry are now paying this increase and, indeed, paying rather more than the increase? Is not this another meaningless exercise which can only result in causing further agonies of industrial unrest for a very modest increase and a very marginal increase in the total increases in wage costs?
Mr. Mellish: I know a fair amount about the building and civil engineering
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industry, but I do not know enough to answer these questions.
Mr. Carr: May I renew the appeal which has come to the Minister from both sides of the House to reconsider this action? May I ask him to do so on this ground above all others? Does he not agree that one of the chief needs in industry today, particularly, perhaps, in this industry, is to strengthen the hand of the responsible, constitutional union leadership, and that to take this action, after an agreement has come into force, is the best thing he could do to discourage the responsible elements and to encourage the irresponsible?
Mr. Mellish: The leaders of the N.F.B.T.E. and the N.F.B.T.O. are known to me personally. I think that the relationship between them and the Government has been extremely cordial, but I can only say to them, in answer to the right hon. Gentleman's question, that I find it rather sad, since they knew that the P.I.B. report was coming at the end of November—I know about the story of delays—that this interim award was made, with all the difficulties about which they were told in October.
I would just say this to the right hon. Gentleman, that I hope very much that, between now and 11th November, the discussions which are now taking place will result in the sort of agreement to which we are all looking forward.

RONAN POINT FLATS (REPORT)
The Minister of Housing and Local Government (Mr. Anthony Greenwood): The House will recollect that on 17th May I appointed Mr. Hugh Griffiths, Q.C., Professor Sir Alfred Pugsley and Professor Sir Owen Saunders, to hold a public inquiry into the collapse on 16th May of part of a block of flats, known as Ronan Point, in the London Borough of Newham. I have today published their Report, and copies are available in the Vote Office.
I would like to pay tribute to Mr. Griffiths and his colleagues for the careful investigation they have made and for the clear way in which they have set out their findings and recommendations. Her Majesty's Government fully accept the

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findings as to the causes of the accident, and are in broad agreement with the recommendations for action.
Ronan Point is a 22-storey block of flats, built of large prefabricated concrete panels to form load-bearing walls and floors. The Report establishes that the immediate cause of the accident was an explosion following a gas leak in an 18th floor flat. The explosion blew out panels forming part of the load-bearing flank wall. This led to the failure of other structural components which in turn caused the whole south-east corner of the block above and below the seat of the explosion to collapse. The Tribunal describes this type of cumulative failure as "progressive collapse".
The Tribunal finds that this behaviour of the building was inherent in its design and was not due to faulty workmanship. It states that progressive collapse after such an accident can be avoided by the introduction of sufficient steel reinforcement to provide effective ties at the joints between the structural components, and by so arranging the components that loads can be carried in alternative ways if a failure occurs.
The Report also examines the possible effects of high winds on buildings of this kind. This is the subject of continuing study, the results of which are not fully reflected in the Report. We shall take account of the latest appraisals in considering this part of the Report.
The Tribunal recommends that existing blocks in large panel construction over six storeys in height should be structually appraised and where necessary strengthened. It recommends that the gas supply should be cut off in any blocks judged susceptible to progressive collapse until they have been strengthened. Provided the danger of progressive collapse is removed, there is no reason, in the Tribunal's view, to prohibit the use of gas in high buildings, and no reason why forms of construction using large pre-cast concrete panels should be discontinued.
It further recommends that the Building Regulations, and the codes of practice incorporated in them, should be revised to deal with these risks.
The House will recollect that, following the receipt of a letter from the chair-
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man, we advised local authorities in August to cut off the gas supply from blocks where there appeared to be a risk of progressive collapse. This removed the principal risk of accidental explosion. After consultation with the building industry and the local authority associations we shall shortly give local authorities advice about the urgent appraisal and, where necessary, strengthening of existing blocks, and about the design of new blocks, to secure them against the risks to which the Report has drawn attention. In this work we have had and shall continue to have the valuable help of the National Building Agency.
We are putting in hand an urgent revision of the Building Regulations. The British Standards Institution has agreed to undertake urgently the examination and revision of codes of practice as recommended in the report. We intend to incorporate the results in the Building regulations as they become available. This work will be supported by expert advice from the Building Regulations Advisory Committee, the Building Research Station, the National Physical Laboratory, and the Joint Fire Research Organisation, and by whatever further experimental work may be found necessary. The Government accept responsibility for ensuring that the regulations and codes of practice are kept up to date.
We are considering urgently a number of subsidiary recommendations.
Large panel construction of high blocks has been used in this country since 1958. But it is clear that the dangers to which this occurrence has drawn attention were not appreciated by the designers of these buildings, by those, including Government Departments—my own among them—responsible for laying down or advising on standards of construction, and by the many professional bodies consulted in the formulation of those standards. As however, the Report makes particular reference to the National Building Agency, I would like to say that the work the Agency has done on housing in recent years has followed an order of priority agreed with the Ministry.
Finally, in expressing the Government's resolve to put matters right swiftly, I hope that I may be excused for reminding right hon. and hon. Members, first, that the Tribunal has found nothing

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wrong with construction systems using load-bearing panels that cannot be put right; and, secondly, that although certain restrictions may have to be applied or continued, they do not amount to a prohibition of the use of gas in blocks of this kind. We have done and we will do all that is humanly possible to avoid a repetition of this rare but tragic occurrence.
Mr. Chichester-Clark: Is the Minister aware that we shall want to study the Report very carefully and may later wish to debate it?
While joining in the thanks which he has made to those who took part in the inquiry, may I ask him: is it not now essential to allay anxiety which there may be among residents in tall blocks of flats, and to assure them that anything which needs to be done to strengthen any blocks of this kind of panel construction will be done as a matter of urgency?
Is it not a fact that high-rise flats have been built and used all over Europe for many years now with complete success? Will the Minister take this assurance from us, that in so far as the Building Regulations need to be amended in any way necessary, we will help in any way we can?
Mr. Greenwood: I am much obliged to the hon. Gentleman. Certainly, after we have had an opportunity of considering the Report it may well be useful to have a debate, if that can be arranged through the usual channels.
I am grateful to the hon. Gentleman for what he has said, because this is an extremely complex problem. I think that, if we were to get into technicalities today, there would be a genuine risk of doing injustice to some of the bodies and persons mentioned in the Report.
I absolutely agree with the hon. Gentleman about the need to allay anxiety. I hope that this statement in the House today, and also, I hope, the Press coverage later, will go some way towards doing this.
It has certainly been a matter of urgency. I received the Report from the Tribunal on 14th October and published it the first day it was possible to complete the printing. As soon as I got the Report, I set up a technical work-
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ing party to consider criteria which should be applied in appraising these high blocks of flats, and today we are approaching the building industry and the local authority associations with these criteria. After discussion of them, we hope to issue them to all local authorities, within two or three weeks.
The hon. Gentleman was quite right in saying that this is a system of building which has been used with great success in other parts of the Continent of Europe. So far as I know, this disaster is unique with this kind of building.
I have very much in mind the importance of reviewing the Building Regulations, and we have already started work upon this, through the British Standards Institution's working party, on information provided by the Building Research Station. We hope, after consideration by (he Building Regulations Advisory Committee, that it will be possible in the fairly near future to issue a revised building regulation.
Mr. Arthur Lewis: On behalf of my right hon. and learned Friend the Attorney-General, in whose constituency this tragic event took place, may I ask that his name be associated with the thanks which have been expressed to all those concerned in the inquiry and to the local authority, which was most helpful. I, too, would like to join in that.
May I ask the Minister to give an assurance that the council concerned will not be expected to meet out of the local rates the costs involved in the strengthening of flats with steel joists? Will help be given?
May I also ask whether or not consideration has been given to compensation to the people concerned both for the tragic loss of life and for the loss of possessions? Will compensation also be given to those people who since the accident have had to convert from gas to electricity? If the Minister is not yet in a position to give a detailed reply, will he give favourable consideration to the matter as soon as possible?
Mr. Greenwood: I am much obliged to my hon. Friend for the way in which he has put his question. I am grateful to him, and I know that Mr. Griffiths and his colleagues will be grateful to him, for

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the expression of thanks for the work that they have done in preparing the Report.
It is a little difficult, until we have had the appraisal of these high blocks of flats which is shortly to be started, to say what the cost will be. We had better wait until we know a little more about this before we consider the financial implications. My hon. Friend will remember that my hon. and learned Friend the then Minister of State said on a previous occasion, when considering the interim action taken in August, that it would be quite wrong for undue expense to fall upon individuals affected by this occurrence.
Mr. Costain: As my hon. Friend has said, until the Report has been studied in detail it is impossible to make comment. Does the Minister appreciate that people living in tall blocks of flats and councils who are considering building tall blocks of flats feel a great deal of apprehension? Is it possible for the Minister to issue a clearance order, since the matters are concerned with load-bearing panels and are very technical? This would reassure residents of high blocks built to different systems, possibly not affected by the Report.
Mr. Greenwood: This is a tragic occurrence by reason not only of the loss of life and suffering involved, but also of the anxiety which has been caused to people who feel, with however little justification, that they may be living in perilous conditions.
The question put by the hon. Gentleman is, I think, covered by what I have said about the technical criteria which we have already worked out. We are treating this as a matter of great urgency, and within the next two to three weeks, after we have had the necessary discussions with the industry and the local authority associations, we shall be in a position to define more accurately than we can now the buildings which need appraisal.
Mr. Frank Allaun: Is it true that the drawings remained in the National Building Agency offices for three years without appraisal? Is not the Agency paid £½ million a year precisely to avoid this kind of disaster? Why was the responsibility for vetting passed from the
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Agency to the local authorities, who cannot be expected to cope with a technical job of this difficulty?
Mr. Greenwood: I cannot for the life of me understand how my hon. Friend got this idea that the drawings for these buildings remained for three years in the offices of the National Building Agency. The Agency, with the full support of the Ministry of Housing, concentrated in its work on industrialised building on appraising the large number of low-rise industrial systems which were constituting the major part of industrialised building in the local authority sphere.
This was something upon which local authorities needed urgent advice; whereas the larger systems, the more important and higher systems of building, which were involved on this occasion had been well tried on the Continent, and there was no reason to believe that they were not satisfactory. There was certainly no question of responsibility being passed by the Agency to the local authorities.
As is normal on these occasions, the local authority supplied to the Ministry a certificate that they were complying with the by-laws in operation at that time, but, in the light of experience, we now find that the requirements which then operated were not satisfactory. But this, of course, is the product of hindsight and not failure on the part of anybody concerned at the time.
Mr. Dudley Smith: Will the Minister say approximately how many blocks of flats in different parts of the country are affected by this sub-standard condition and will need attention?
Mr. Greenwood: It is not a question of "sub-standard". I hope that the hon. Gentleman will withdraw that remark. I do not say this reproachfully, but this is the kind of careless remark which can cause a good deal of anxiety. This was not sub-standard work; it was a failure in design. The Report shows quite clearly that there are jointing difficulties in some systems of industrialised high building, and that is what we have to establish.
When we took urgent interim action in August there were about 50 blocks of flats where there were prima facie grounds for supposing that there might be this weakness in the jointing. In the light

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of what the Tribunal has said, we anticipate that we shall be appraising perhaps as many as 200 blocks of flats, in many of which no doubt the situation will be shown to be satisfactory.
Mr. Richard: May I press my right hon. Friend a little further on this, since my borough is one which was inspected in July? May we take it that there are not likely to be a significantly greater number of blocks of flats which will now have to be altered than were contained in the interim information issued in July? If so, what are the different criteria which are now to apply?
Secondly, will my right hon. Friend confirm that his reappraisal will be completed within approximately two to three weeks so that by the end of the month everyone in England ought to know where they are?
Mr. Greenwood: The situation has changed. When we took urgent action in August it was in respect of the dangers from gas, but it has now been shown by the Tribunal that there may well be dangers either from fire or windload in buildings of this kind. Therefore, we are casting our net more widely. I do not think that there is any likelihood of all the buildings having been appraised within the next two or three weeks, but within this period we shall be able to give to local authorities the technical guidance to enable them to do this work.
We hope that local authorities who are not themselves staffed to undertake important work of this kind will employ engineering consultants to give them the benefit of their experience.
Mr. Lubbock: Although the Minister is unable to commit himself precisely until he knows the total cost of these structural alterations, will he accept the principle that there should be direct assistance from the Ministry of Housing and Local Government to the local authorities affected?
Secondly, what arrangements will be made for the tenants who will have their gas cut off pending structural alterations, particularly where it is used for central heating?
Mr. Greenwood: I am sure that the hon. Gentleman will not expect me to follow him in the tempting line of discussion which he raised in the first part of his
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question. As I have said, until we know more about it, it is difficult to talk usefully on the subject, but I do not think that there is any reason to suppose that there will be difficulties in respect of the point he raised in the second part of his question. Many local authorities dealt with this problem in August, and have dealt with it satisfactorily and with proper consideration for the people for whose care they are responsible.
Mrs. Renée Short: In the action that my right hon. Friend intends to take following this Report, will he bear in mind firmly that, not only must he maintain the confidence of occupiers of this type of building, but that of architects, engineers and construction firms? As, by all accounts, the Report is likely to be rather controversial in these circles, will he proceed with caution in the directions that he issues to local authorities and firms and, in addition, do everything that he can to make sure that we get an opportunity of debating the matter in this House before any irrevocable decisions are taken about it?
Mr. Greenwood: I am sure that my hon. Friend appreciates that the use of Parliamentary time is beyond my control. However, I think that she has made a very valid point. This is a matter where, if possible, we must avoid recriminations. The Tribunal has been extremely fair. It has criticised individuals, the professions, and the Ministry of Housing and Local Government. Accordingly, I hope that the professions and the building industry will take the criticism in the same good part as I hope that I take it on behalf of the Government.

GUYANA (PARLIAMENTARY GIFTS)
4.21 p.m.
Mr. E. S. Bishop: Mr. Speaker, there is an established and pleasant tradition of this House whereby we send a gift to the Legislature of a Commonwealth country following its attainment of independence within the Commonwealth.
On 16th July last, the House agreed to make a gift to the Parliament of Guyana comprising a Clerk's table, three Clerics' chairs and a chair for the Serjeant at Arms. Subsequently, the House gave

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leave of absence to four hon. Members to go to Guyana and make the presentation on its behalf. Today, I have the pleasant duty of reporting to the House that the mission has been accomplished.
On Tuesday, 22nd October, there was a special sitting of the Parliament of Guyana, held in Georgetown, and the four hon. Members appointed for the task carried out their responsibility. The delegation was composed of the right hon. and learned Member for Huntingdonshire (Sir D. Renton), the hon. Member for Gravesend (Mr. Murray), the hon. Member for Paddington, South (Mr. Scott) and myself, and we were accompanied by Mr. Kenneth Mackenzie, a Principal Clerk of this House and Clerk of Public Bills, to whom we are grateful for his assistance.
The Speaker of the Assembly, Mr. Rahman Gajraj, asked us to convey to you his good wishes on receipt of the letter of goodwill which you asked us to convey to him. The Assembly approved with acclamation a Resolution expressing its sincere thanks and good wishes and appreciation of the gesture of this House, and this is recorded in the Resolution which I shall hand you, Mr. Speaker, and which, in accordance with precedent, I trust you will order to be recorded in the Journal of this House.
I am sure that my colleagues would wish me to express our sincere appreciation of the very generous hospitality afforded to us by the Government of Guyana, whose guests we were, to the Speaker, the Clerk of the House, the Prime Minister, members of all parties and all concerned, who gave us not only generous hospitality but a great deal of their valuable time so that we could see the country, meet the people, and understand some of their problems.
We return much better informed of the problems and possibilities of Guyana,
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convinced that, with the proper development of its latent resources, with better trading, investment, and other facilities, coupled with continuing stable government, the people of that country can be assured of a prosperous future.
My colleagues would also wish me to thank the House for the honour accorded to us on this occasion and for the opportunity of taking the good wishes and good will of this assembly to the people of Guyana.
Mr. Speaker: I am pleased, on behalf of the House of Commons, to thank the hon. Member for Newark (Mr. Bishop) and his colleagues for the satisfactory way in which they carried out the mission which we gave to them.
I am grateful to the hon. Gentleman for bringing me a personal message from the Speaker of the House of Representatives, and I will see that the Resolution which the hon. Gentleman is to bring to the Chair is entered in the Journal of the House.

BILL PRESENTED
  REPRESENTATION OF THE PEOPLE
  Bill to amend the law about the qualification of electors at elections to the Parliament of the United Kingdom or at local government elections in Great Britain, and the qualification to and membership of local authorities in England and Wales, about the conduct of and manner of voting at those elections and about candidates' election expenses thereat, and otherwise to make provision about matters incidental to those elections, and for purposes connected therewith; presented by Mr. Callaghan; supported by Mr. Fred Peart, Mr. Ross, Mr. Anthony Greenwood, Mr. Thomas, the Attorney-General, and Mr. Merlyn Rees; read the First time; to be read a Second time Tomorrow, and to be printed.
ORDERS OF THE DAY

  SEA FISHERIES BILL
  Order for Second Reading read.
  The Minister of Agriculture, Fisheries and Food (Mr. Cledwyn Hughes)I beg to move, That the Bill be now read a Second time.
  On 8th July, Mr. Speaker, I announced to the House the outcome of the Government's review of future policy for the deep-sea fishing industry. I undertook then that legislation would be introduced early in the following Session to give effect to our proposals. I am now redeeming that promise at the earliest opportunity. I am very glad to commend the Bill as our first legislative business in the new Session.
  The fishing industry is important to our economy. It is important for the contribution which it makes to our food supplies and for the imports which it saves; and it is very important in certain areas for the employment which it provides.
  As the House will know, the industry has been going through a period of great difficulty. The hopes of the Fleck Committee which found expression in the Sea Fish Industry Act, 1962 have not been wholly realised.
  This has led us to review our policy. As a result, we are working towards a new and coherent strategy for the fishing industry. In doing this, we have made it clear that we shall not let the industry down.
  The first element of our strategy is an assurance of continued support on a new basis. We are satisfied that the industry can make an increasing contribution to import saving, if it has the assurance of adequate support, and if it can show a continuing improvement in efficiency.
  We have now given the deep-sea industry an assurance of support for a minimum period of five years. For the first three years—from August, 1968 to July, 1971—the total subsidy will be calculated according to the formula which I have already announced. This relates each year's subsidy to the actual profitability of the industry. For the fourth and fifth years, the method of sup-
  914
  port will be reviewed. But the objective will be the same. We shall seek to achieve a level of return to the industry corresponding to that of the first three years.
  The second element of our strategy is to seek improved efficiency in the industry. We intend not only to give the industry the confidence which stems from assured support. We intend also to use the subsidy itself as an instrument for encouraging efficiency. At present, all vessels in a given length class receive the same basic daily rate of subsidy, irrespective of their efficiency. In future, the subsidies paid will be related to the efficiency of each individual vessel.
  Mr. J. B. Godber: I would like to get one aspect of this clear, because it is very important. What the right hon. Gentleman is telling us is not in the Bill, but in the scheme which will be laid before us. Will he consider letting us have drafts of the scheme as soon as possible before the Bill becomes law? Without them, it will be difficult to follow the very complicated Measure about which he is talking?
  Mr. Hughes: I shall be deploying this in rather more detail as I go on.
  In the interests of efficiency, we also wish to see an expansion of the valuable work of the White Fish Authority, particularly in relation to research and development.
  The third element of our strategy is that we wish to see an improvement in the structure of our industry. The Industrial Reorganisation Corporation is now actively engaged in discussions to this end. This is of great importance, but it would be premature for me to say more at this point. The Corporation has not yet completed its discussions or reached final conclusions.
  I must also refer to the effect of imports upon the fishing industry. The House has been concerned about the pressure exerted on our market by the growth in imports of frozen fish fillets from E.F.T. A. countries. These imports have been exceeding the level of 24,000 tons a year, the maximum envisaged when the E.F.T.A. agreement was negotiated in 1959. We have had lengthy discussions of this problem with our Scandinavian partners in E.F.T.A. But I regret to say

  915
  that it is now clear that they cannot give us any assurance that this increase will not continue.
  In these circumstances, the Government have decided to reimpose a 10 per cent. tariff on imports of frozen fish fillets from E.F.T.A. countries. My right hon. Friend the President of the Board of Trade will put the necessary arrangements into operation as soon as possible.
  I should like now to explain how the Bill will contribute to the achievement of this strategy. The new subsidy arrangements entail, in the first place, the repeal of certain provisions of the Sea Fish Industry Act of 1962. That Act provided for the automatic reduction each year of the basic rates of subsidy first fixed in 1962. The reduction will no longer be made. This is achieved by Clause I of the Bill. I am talking here of the deep sea section of the industry, not of the inshore fleet. It is right that I should stress this lest there be any misunderstanding in the debate on this account.
  Hon. Members will notice that Clause I does not provide in terms for the new arrangements which will take the place of those that are repealed. It does not set out the formula for the calculation of the total subsidy sum or for its distribution on the basis of efficiency. These matters will be dealt with in the scheme which we shall lay before the House for approval by affirmative Resolution. I think that is the point on which the right hon. Gentleman wanted an assurance.
  Mr. Godber: I am sorry if I interrupted the Minister too soon, but I think that he will recognise that that was not quite the point. They must come into the scheme, but my concern is that when we discuss the matter in more detail in Committee we should have the draft scheme before us, because it will affect the arguments adduced in Committee.
  Mr. Hughes: I will try to tell the House a little more as I develop the subject. I appreciate the importance of having as much detail as possible at this stage. I can give the right hon. Gentleman the assurance that we shall lay the scheme before the House as soon as possible after the Bill is passed. It will be difficult to lay the scheme before the House during the Committee stage,
  916
  but when the scheme is put before the House hon. Members will have an opportunity to discuss the detail at that stage. But I will, if I may, to assist the House, say a few words about the way in which we propose to distribute the subsidy so as to provide an incentive to efficiency.
  The main factor we are thinking of taking into account is the "added value" attributable to each vessel. Perhaps the simplest way to illustrate what is meant by "added value" is to think of a balance sheet for each vessel separately. On the debit side of the balance sheet are such things as the cost of its fuel, the cost of repairs and maintenance, and dock and harbour dues. On the credit side are the returns which it gets from the sale of its catch. The difference between these two figures represents the sum which is shared between the crew and the owners as wages and profits.
  This is what the economists mean by added value. It represents the net contribution which their combined efforts have made to the economy after meeting the costs of the goods and services which they have used in the process. Of course, there are questions about the weight to be given to particular factors and how the calculations are to be made. On these matters my right hon. Friend the Secretary of State for Scotland and I will give the fullest weight to the views of the industry. These are matters we are discussing with the industry and with the trade unions.
  One final word before I turn from the subsidy. The total available for distribution has, of course, to be calculated on the operating profits of the deep sea fleet as a whole in a past period. We are anxious to begin payments on the new basis as soon as possible. We are proposing, therefore, to do the initial calculations for a half year. If the industry can supply the necessary figures for the six months ended 30th September, 1968, we should be able to make the first payment very early in the new year. The industry will, I think, regard this as very helpful. This is on the assumption that this Bill and the subsequent scheme have both been approved by that date.
  The House will, therefore, appreciate the importance of getting the Bill through. I am grateful to the right hon. Gentleman the Member for Grantham (Mr. Godber) and to the Opposition for their

  917
  assurance that hon. Members opposite will assist in its speedy passage.
  I have already spoken of the importance of research and development in improving the technical efficiency of the industry. I should like to pay tribute to the excellent work already being done, particularly by the Industrial Development Unit of the White Fish Authority.
  The House will readily agree that research and development work is vital if the industry's efficiency in catching and marketing its fish is to be increased. Here, the White Fish Authority has the important responsibility of carrying out commercial development work. The importance of this cannot be overstressed. The arrangements are the same as those which apply in many other industries for Government-assisted research. Half of expenditure on commercial development is financed from public funds, while the other half comes from the proceeds of a levy on industry. The White Fish Authority's general levy, from the proceeds of which this money for research has to come, is already at its statutory maximum.
  The Authority has a wide range of other functions besides research and development. But it is especially in this field that we should all like to see its activities expanded. This the Authority can only do if its financial resources are adequate. This is the purpose of Clause 4.
  This Clause will make it possible for any future levy regulations to work within a higher maximum. It will also broaden the basis on which the general levy is collected, if this should seem desirable. At present, there is a maximum of 1d. a stone. This was fixed in 1951 and is worth only about half of what that figure then represented. We are, therefore, revising it. At present, the rate is applied to all landings within the present definition of white fish, irrespective of type or utilisation. But it is not applied to any product outside that definition. We are, therefore, taking the opportunity to make these powers more flexible and to bring the levy arrangements of the White Fish Authority and the Herring Industry Board more closely into line.
  I should emphasise that, once again, the House is dealing with an enabling power. No change can be made in either
  918
  the white fish or the herring levy unless subordinate legislation is subsequently approved. Any regulation by the White Fish Authority can take effect only if it is confirmed by Order of the Fisheries Ministers. Such an Order may be prayed against. There, again, the House can, if necessary, initiate a debate. Moreover, before the Order can be submitted for confirmation it has to be made available in draft to those affected. Their objections, if any, have to be transmitted to the Ministers for consideration when deciding whether or not to confirm the Order.
  To summarise, Clauses I to 4 are the main financial provisions of the Bill. Before I leave them, I should briefly explain Clauses 2 and 3. Clause 2 is designed to ensure that we can make subsidy schemes which treat fish products in the same way as fish. We can also pay subsidy to a vessel if a catch is sold to a foreign buyer without actually being landed on the quay and reloaded. Clause 3 merely extends to fish subsidy schemes the kind of provisions we have all along had for agricultural subsidies. This, I think, will be appreciated by hon. Members on both sides of the House. With payments on the new basis, one man's subsidy will depend on the performance of the industry as a whole and of his competitors. It is essential, therefore, that we should have information which is both accurate and complete.
  I now wish to deal with the Clauses concerned with conservation and policing. They are Clauses 5 to 14, and form the rest of the Bill. Their purpose is to provide the statutory framework needed to enable us to play our full part in international fisheries conventions to which we belong. This, too, will be welcome to our industry. It has long recognised the importance of international rules governing fishing operations, whether relating to conservation or to conduct on the fishing grounds.
  The first purpose is to enable us to ratify and implement the policing convention—or, to give it its full title, the Convention on the Conduct of Fishing Operations in the North Atlantic—which was presented to Parliament as a White Paper (Cmnd. 3645) last June. Hon. Members may recall that, to pave the way for the extension of our fishery limits to 12 miles in 1964, we had to denounce the North Sea Convention of 1882.

  919
  That Convention not only established a fisheries highway code among ourselves and five other countries fishing the North Sea, but also provided the basis for our former three-mile fishery limit. At the conference which led to the European Fisheries Convention of 1964 we were invited to call a further conference for the purpose of establishing an up-to-date set of rules. We did this, and as a result the new Convention was agreed. It has been signed by 18 countries which fish the whole of the North Atlantic. This marks an important step forward in international co-operative effort.
  Like its predecessor, the new Convention's aim is to reduce the risk of damage to fishing vessels and gear—and of injury to fishermen—by establishing a code for the fishing grounds. I will say a few words about the rules. It lays down rules for such things as the identification and marking of fishing vessels and gear, special light signals for vessels engaged in fishing, and conduct on the fishing grounds. It also provides for an international system of enforcement. Under this, authorised officers of a member country may inspect the operations of, and, if necessary, board, vessels of another member country on the high seas to see if the provisions of the convention are being complied with. If they find any contraventions, they will report them to the vessel's flag State, which alone will be responsible for any court or other action.
  These arrangements reflect closely the provisions of the old 1882 Convention, which were carried into our existing fisheries legislation by the Sea Fisheries Act, 1883. There are, of course, modifications of detail in the new convention. But if hon. Members study these Clauses, they will see that they involve no new principles. Nevertheless, hon. Members will readily appreciate that its acceptance by all the main countries fishing the North Atlantic represents a real achievement. This country played the leading part in bringing the Convention into being. I am sure that the House will agree with me that it is important that we should be in a position to ratify it with as little delay as possible. The main purpose of Clauses 5 to 14 is to enable us to do this.
  920
  The House will have inferred from what I have said that many of these powers are already on the Statute Book in the 1883 Sea Fisheries Act. It was not surprising that when we looked into it we found that this Act which was drawn up in the age of sailing ships, was out of date in many of its details. It did not provide a satisfactory framework for today. We have decided, therefore, to repeal it. In the Bill we re-enact provisions which are still relevant, and we make suitable modifications.
  Hon. Members will find, when we come to examine the 10 or so clauses in detail, that in almost every case they raise no new issues. They will prove, I believe, to be relatively straightforward. In brief, these Clauses empower Ministers to make orders applying to the United Kingdom internationally agreed rules on conduct. They prescribe the powers of British inspecting officers—sea-fishery officers—in relation to our own vessels and those of foreigners. They provide for authorised foreign officers to inspect our vessels outside our limits. They lay down penalties for contraventions.
  This Part of the Bill will also enable us to participate in schemes for the international enforcement of conservation measures agreed by the international fisheries commissions. Again largely on a United Kingdom initiative, the North-East Atlantic Fisheries Commission has recently recommended a joint enforcement scheme which will do for conservation what the policing Convention will do for conduct. The Commission for the North-West Atlantic is also considering the possibility of a similar scheme. The Bill allows us to play our part in such schemes. Our industry rightly recognises these as essential in order to curb the over-fishing of stocks which are of vital importance to the British fishing industry.
  The Sea Fisheries Act, 1883, provides, with the Fishery Limits Act, 1964, the basis for enforcing our fishery limits regime. In repealing the 1883 Act, the Bill therefore restates the rules governing the operations of foreign fishing vessels within our limits, with suitable modifications to take account of a 12-mile fishery limit. We have taken the opportunity to strengthen provisions against poaching and to stipulate that foreign vessels must stow their fishing gear while in our limits

  921
  except where they are legally entitled to use the gear. In addition, by Clause 16, we are amending the Sea Fish (Conservation) Act, 1967. This will enable foreign fishing vessels within our limits to be put on the same footing as British vessels. Henceforth, it will be an offence for foreign vessels to carry undersized fish on board within our limits.
  These measures represent an important step forward in international fisheries arrangements. They will help our industry and will, I believe, commend themselves to the House.
  I emphasise the valuable part which the Bill can play in achieving our strategy for the fishing industry. It prepares the way for our continuing support to the industry. It will contribute to the continuing efficiency of the industry. It will enable us to give effect to an important international convention which is of vital importance to our fishermen. It will promote the conservation of fish stocks. In all these ways it is a move forward and I commend it to the House.
  Our fishermen deserve well of us. It is right that we should give them a fair deal.
  4.47 p.m.
  Mr. Patrick Wall: I wish to thank the Minister for introducing the Bill with his usual courtesy and for giving us a little more information than we normally get from the Government Front Bench.
  This Bill arises out of the review of the industry started way back in 1964 and it implements the undertaking which the right hon. Gentleman gave in this House on 8th July this year. I do not think there is any disagreement on either side of the House that during the four years since 1964 the state of the deep sea sections of the industry has considerably deteriorated. We all agree that something must be done and now the Government have decided to step up the subsidies from about £1·4 million to a maximum of £4 million. The Minister stressed that he will also seek reorganisation of the industry through the I.R.C.
  We recognise that action is overdue and therefore we support the intentions of the Bill. We have, however, two major criticisms to make. First, the Bill in itself does little to indicate how the additional assistance is to be operated. The
  922
  only financial information in the Bill—which is a great contrast to the previous one—is found in the introductory paragraphs of the Explanatory and Financial Memorandum. Clearly the Bill will mean little until it is accompanied by the Order to which the Minister referred.
  The Minister has today given further information. I hope that he will consider the suggestion put forward by my right hon. Friend the Member for Grantham (Mr. Godber) that he should try to make available a draft Order before the actual Order is made. He will recognise that it is difficult to have a debate on the technical provisions arising from this Bill until we know the details of the Government's proposals.
  Our second criticism is that we believe that, even after four years in gestation, the Bill is, broadly speaking, a stop-gap rather than a cure. It increases the subsidy but does little to tackle the core of the industry's problem. I think that the Minister will agree with me that the core of the problem is that we cannot land British fish in European ports but the European countries can land their fish in our ports, and apparently quite often this fish is landed at prices well below the cost of production. We have heard a little more about this today, and later I will ask some questions about the 10 per cent. levy which the Minister mentioned.
  We recognise that the Bill affects only the deep sea fleet—that is, the distant water, middle and near water vessels—and that the herring and inshore vessels continue to be assisted as before. I believe that the House recognises that there is a need in Britain for a deep sea fleet. Indeed, the Minister emphasised this in his opening remarks. It is clear that, if the fleet were allowed to disappear, it would affect our balance of payments by at least £40 million, probably more, and it would allow foreign catchers to more or less set their own price for fish.
  The deep sea fleet has been greatly assisted by the last Sea Fisheries Act—that of 1962, which was introduced by the then Conservative Government and which started operating subsidies for distant water vessels. Since then the conditions under which these vessels operate has deteriorated. The obvious reasons, and ones well outside the control of our own industry are—traditional fishing grounds

  923
  have been lost; foreign subsidies have been greatly increased; and imports, especially those of frozen fillets, have greatly accelerated. At the same time, the cost of replacing the older vessels in the fleet has risen and the fishermen, rightly, have demanded better conditions and, quite often, better pay.
  The Under-Secretary of State for Scotland said this in winding up our last debate:
  "First there are subsidies, secondly E.F.T.A. and imports, thirdly the I.R.C. and fourthly the human aspect…".—[OFFICIAL REPORT, 24th July, 1968; Vol. 768, c. 538.]
  I want to consider those four headings separately.
  First, subsidies. Both sides of the House recognise that the need for subsidies is caused by factors largely outside the control of our own industry. I stress that the need is now demonstrated very clearly by the fact that not one port or one section of the deep water fleet made a surplus last year after allowing for depreciation. This is obviously a very serious fact. I am informed that the fleet as a whole showed a loss averaging £18·6 per vessel per day. Landings, it is true, were up, but grossings were down—down by 9 per cent. in Hull and by 6·3 per cent. in Grimsby. Average prices per kit of fish fell from 86s. in 1967 to 78s. this year.
  What is even more worrying is that the fish unsold and sent to fishmeal factories increased by just under 200 per cent. in Hull and by just over 500 per cent. in Grimsby. These are startling figures.
  In 1966, the distant water fleet operating from B.T.F. ports consisted of 189 vessels. A year later it consisted of 173 vessels. The figure is now 163, which includes five laid up. I suggest that the problem is made even more serious by the fact that of the present operating B.T.F. fleet of 96 conventional wet fish trawlers 55 were built in 1951 or earlier. This means that 50 or 60 will have to be replaced within the next 10 years. New stern fishers cost about £500,000. The House does not have to be very good at mental arithmetic to calculate the total sum involved. It justifies the need, which the Minister has stressed, for both building and for increased operating subsidies.
  924
  I had intended to deal at some length with the question of how the subsidies are to be applied, because, as I have said before, there is very little information in the Bill. The Minister has now told us a little more. He has said that the basis for the assessment of efficiency and profitability, on which the whole scheme stands or falls, will be that of added value. I understand that means all profits, less depreciation and crews' wages. Has this formula, which obviously will have to be studied but which at first sight seems to be a reasonable one, been agreed first by the British Trawler Federation and, secondly, by the Scottish Trawler Federation?
  Mr. Cledwyn Hughes: These matters are now being discussed, as I indicated in my speech, with the Federation and the union. I hope that there will be agreement on an added value formula very quickly. This is one of the difficulties of introducing details of the scheme in time for the Committee stage, but we will do our best on that.
  Mr. Wall: I am grateful to the Minister for the amount of information he gave us today, because he will appreciate that Clause I contains very little information, as do the first four Clauses, which are the core of the Bill.
  May I ask the Minister a question which arises out of this and which was asked in our last debate. He said that payments are to be made in arrears. How will this be applied to crew payments? They will obviously have to receive a bonus. Can this be paid in arrears, when the crew might have been dispersed? I admit that this is really a problem for the industry itself, but it is one which I hope that the Minister will bear in mind when he has these discussions.
  The whole question of profitability and efficiency and the definition thereof is of very great importance to everyone in the industry. I stress that there has been a four-year review. I imagine that all these points have been thoroughly investigated and I hope that they will be agreed so that, as the Minister prophesied, payments will be able to be made early in the new year.
  May I now—fairly briefly, I hope-turn to the question of imports. Surely there must be some relation between the

  925
  greatly increased foreign subsidies, particularly in Norway, where they rose by 57 per cent. last year and I understand have increased again this year, particularly in the case of dried fish, and in Denmark in respect of Greenland, and the increased volume of foreign landings in British ports. The value of all fish imports landed in the first eight months of this year is, I understand, £2 million more than that for the corresponding eight months of last year.
  I admit that this is a difficult problem, because we must consider our partners in E.F.T.A. Some time ago the Minister told us that we were to have talks. He has told us today that those talks have failed. He has said that there will therefore be a 10 per cent. import surcharge on all imported fish, or is it only on the additional imported fish above the amount authorised under the Stockholm Agreement?
  Mr. Cledwyn Hughes: All.
  Mr. Wall: All landings from all countries?
  Mr. Cledwyn Hughes: We are referring to frozen fish fillets.
  Mr. Wall: I am sorry, but I want to get this absolutely clear because it was announced only a few minutes ago. Is I there to be a 10 per cent. import levy or duty on all landings of frozen fish or on frozen fillets?
  Mr. Cledwyn Hughes: Fillets.
  Mr. Wall: So it applies to the Annexe to the Stockholm Agreement. It applies to that Agreement, in which we recognised that frozen fillets would be included in industrial products. It applies to all landings, not just those in excess of the 24,000 tons which were authorised?
  Mr. Cledwyn Hughes: Yes.
  Mr. Wall: I am grateful to the Minister for clearing up that point. I think that he will agree that imports of processed fish this year increased by 55 per cent. in the first quarter, so obviously this is a matter which he has to consider very carefully indeed. Obviously we have to consider the statement made today and see to what extent this will redress the balance.
  926
  Speaking very much off the cuff, I do not think that this will cure the major difficulty faced by the industry, which is that of virtually unrestricted imports. Once again I ask the Minister—I have mentioned this in a previous speech—to bear in mind the Recommendation which the Select Committee made in paragraph 30(5) of its Report:
  "Quotas, levies and minimum import prices to protect the British industry should be seriously considered and the matter pursued energetically with the E.F.T.A. countries."
  Today, we know that the Government have pursued the matter with the E.F.T.A. countries, they have not reached a satisfactory conclusion, and they have, therefore, had to impose unilaterally a 10 per cent. levy.
  However, the suggestion of the Select Committee, as I understand it, related to long-term policy and the need to consider the whole future of the fishing industry on this basis. I say again that we are the only unrestricted market in Europe for imported foreign fish. Failure to act will have consequences for the taxpayer. The taxpayer will now have to pay up to £4 million on operating subsidies. The more imports we receive, the more the taxpayer will have to pay.
  Will the Minister tell us whether, in his investigations and discussions with E.F.T.A., there was evidence to establish that dumping had taken place? There are methods of dealing with this problem, but I gather that definition is difficult. Perhaps the Minister who winds up the debate will say whether the question was gone into and what evidence was produced on either side.
  May we be told also—I put this to the Minister in a previous speech—whether consideration has been given, in the context of the long-term problem of imports, to the policy now being put forward by the Common Market? In this connection, I quote three short passages from the Common Market document dated June this year. The first tells us that the Common Market policy
  "establishes a common system governing fishing in maritime waters.… The Member States ensure equal conditions of access and exploitation of the fishing grounds situated in maritime waters under their sovereignty or jurisdiction".
  Next:
  "These measures have in view the reorganisation of fishing fleets, the investigation

  927
  of new fishing grounds, the provision of stocking and deep-freezing plants, qualifications, vocational retraining and stability of employment."
  The Minister has many of those matters in mind himself. My final quotation is on pricing:
  "The price system lays down guide, intervention, reserve, reference and floor prices."
  If our European neighbours are developing a long-term import policy on those lines, we ought at least to take cognisance of it. We believe that the subsidy bill of the future could be cut if some long-term control over imports were established, including, perhaps, a variable import levy. We should very much like to know what the Government have in mind for curing the long-term problem as opposed to the short-term matters with which the Minister dealt today.
  Now, the reorganisation of the industry. Reorganisation is needed not only because of the financial difficulties of the industry but because, as I said, 50 or 60 conventional trawlers will have to be replaced in the next 10 years. I understand that the Industrial Reorganisation Corporation is proposing an amalgamation of the 189 ships of Associated Fisheries, Boston and the Ross Group, which together land about 66 per cent. of British landings. This is open knowledge now as it has been referred to in public speeches by the chairman of the I.R.C.
  What makes us wonder about such an amalgamation is that in 1966 the Monopolies Commission prohibited an amalgamation of Ross and Associated Fisheries. I understand that the basic ground for that prohibition was an objection to joint marketing proposals. But, surely, this is just what is now needed. There is a general desire to move away where possible from auctions. What is now proposed? If the I.R.C. is considering that amalgamation, how will it get by the difficulties already put forward by the Monopolies Commission?
  Mr. Cledwyn Hughes: The proposals have not been finalised, and they have not been submitted to me. As I said, it would not be appropriate for me to comment at this stage.
  Mr. Wall: I appreciate that difficulty, but the right hon. Gentleman will recognise that the matter is public knowledge and has been referred to by the chairman of the I.R.C. in public speeches. In the circumstances, it is right that the Opposition should probe the question. I hope that the Minister will soon make a clear statement about it. It seems to me that there are considerable difficulties attendant upon any such proposal. Perhaps, when he makes a statement, the right hon. Gentleman will assure us also that the small owner and small merchant will not be squeezed out by the formation of any new consortium.
  In the same connection, there is the whole question of the relationship of the I.R.C. with the White Fish Authority. I understand that the I.R.C. would remain involved and that there would probably be Government directors appointed to the new company, if it matures. Thus, we should have two semi-State boards involved in one industry, which could lead to complications.
  I come now to Clauses 2 and 4 of the Bill. We presume that Clause 2 is preparatory for the landing of boxed fish from factory ships and that Clause 4 might be the prelude to a statutory minimum price scheme. Will the Minister tell us what is proposed? The question has been before the House on many occasions, and we should like to know whether there is likely to be a statutory minimum price scheme with a Government financial contribution. Is it still being considered by the industry and the Government?
  The industry operates its own voluntary minimum price scheme. That scheme was referred to the Restrictive Practices Court and was found to be in the public interest. I have here a letter from the Treasury Solicitor, acting on behalf of the Registrar, which reads:
  "I confirm my telephone conversation to say that in view of the findings of the Court in the Distant Water Vessels Development Scheme, in relation both to distant water vessels and to near and middle water vessels, the Registrar does not propose on the basis of the agreement at present registered to contest this case further."
  Now, two years later, I understand that the Registrar is considering reversing his decision. Will the Minister look into this matter? Considerable difficulty and expense could be put on the industry's

  929
  shoulders; it went through a good deal last time, and one hopes that it will not have to face the same loss of time and money once again.
  There are many important matters covered by the Bill which I have no time to discuss now, but I must touch briefly on the human aspect. Problems of safety at sea have been emphasised recently by the findings of the inquiry into the sinking of the three Hull trawlers earlier this year. There have been recommendations regarding weather reports, communications and stability. I am sure that the Holland Martin Committee will consider all those matters.
  Here again, the basic problem is that of rapid replacement of the conventional trawler which is now becoming obsolete by modern stern fishers with better amenities. I commend to the Minister Recommendation 2 of the Select Committee:
  "There should be encouragement of research and development into the mother ship system…"
  Such a system might well be of help in improving safety at sea, and I hope that something is being done about it. Good safety and good working conditions go together and are of great importance. I understand that grants of 40 per cent. are available now for improving safety or safety devices. Both sides of the House agree that efficient ships are safe ships. As the Bill is based on the aim of promoting efficient ships, it will be of assistance from the point of view of safety.
  The Minister dealt with a most important section of the Bill, that dealing with conservation, but I have no time to go into that now. I say only that we on this side recognise the problem as fundamental, not only for our generation but for future generations. We support the Clauses designed to promote some form of international policing system agreed by all nations and to bring into operation the agreement reached in 1967 for a Convention of Conduct in the North Atlantic. The right hon. Gentleman told us that 18 countries had already signed the Convention. I take it that they are already introducing legislation, as we are, in order to allow the Convention to be ratified? We shall do all we can to assist in that matter.
  930
  I sum up in this way. We believe the Bill to be sound, though it is basically a short-term measure. We note that the position will be reviewed in 1970 before the provisions of the Bill are continued into the 1971–72 period. We note that it does not deal with the inshore and herring fleets and, therefore, we shall have to have an annual debate on inshore and herring operations when the Order is tabled. We hope that this does not mean that we shall no longer have our annual debate covering all sections of the fishing industry. Back-bench Members on both sides regard such a debate as essential.
  I have asked a number of questions, and I hope that the Minister will realise that we consider them important. A fundamental point is that we need more information on the proposed draft Order before we can give full consideration to the proposals in the Bill. Another is that we hope that the Government will let us know their thinking on the long-term problem of imports. The Minister will agree that his announcement today on the 10 per cent. levy is only an interim arrangement.
  Hon. Members: Very welcome.
  Mr. Wall: I do not deny that for a moment. This is an important Bill, which I hope will be of great benefit to the industry. But the Minister said that the Government were looking at the long term. The Bill has been in gestation for four years, and we hope that we shall eventually pass legislation that will last the industry for a long time. We do not believe that that is possible unless the long-term problem of foreign imports is fully tackled.
  5.11 p.m.
  Mr. James Johnson: I found the speech of my right hon. Friend the Minister very stimulating, and, as a Member for a fishing port with the biggest deep sea fleet in Western Europe, I also found it very encouraging. Unlike the hon. Member for Haltemprice (Mr. Wall), who damned the Bill with somewhat faint praise, I think that we are set fair for at least four years. The Bill gives the industry a chance to revive and build itself up, and I hope that a long-term policy will evolve long before the end of that period.

  931
  I have listened to fishermen in Hull for some years, and they have told me of the vicissitudes of the past, of the good times and the bad. For some years there has been pessimism in the fish dock among merchants, fishermen, owners and the like. Under the old conditions of laissez-faire capitalism, followed by the non-selective subsidy after the Fleck Report, we did not get along very well. In 1962 the present Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food, my hon. Friend the Member for Edinburgh, Leith (Mr. Hoy) criticised the old set-up, and I believe that history will be on his side. That is why we are here today with this Bill.
  The new policy has been warmly welcomed on all sides, despite the hon. Gentleman's description of it as "short-term". Spokesmen of all sections of industry in all the fishing ports have warmly welcomed it. For the first time, the Government have taken a good, hard look at the industry and given us a chance to get up off our knees, where some people thought we had been for some time. It gives hope to the fishing community.
  It is pleasant, however, to note the attitude of the Opposition. In the debate on 24th July, the hon. Member for Haltemprice said:
  "…we on this side of the House will support the Order and Scheme."—[OFFICIAL REPORT, 8th July, 1968; Vol. 769, c. 504.]
  No one says that fishing matters are non-political, but at least let them be non-party. Let us all work together for the good of our port constituents.
  I was glad to hear the Minister's decision about a 10 per cent. levy upon imports of frozen fillets. Apart from being an economic factor, this is a very emotional factor in the lives of our people in the ports. I raised this matter with the E.F.T.A. Parliamentarians and again on the Floor of the Council of Europe, and it is very important that we consider the question of excessive landings. Perhaps it is not quite my right hon. Friend's pigeon, but he might press his right hon. Friend the President of the Board of Trade on the question of bilateral agreements and multilateral agreements, and heavy landings of foreign vessels on the Humber.
  932
  The Bill is mainly for the purpose of authorising new finance, and there are continuing discussions with owners and the unions about the future. Since the cash will be distributed on the basis of efficiency of the vessels, the question is which vessels are efficient and profitable. I hope that the "big squeeze" will now be on. Certainly I expect early elimination of the steam trawlers, many of which are in the 50 and 60 segment of the fleet that the hon. Member for Haltemprice spoke about. They must go, because of their age and the weaknesses of their design.
  The next priority is to dispose of side trawlers, with all their hazards. This should be comparatively easy with the distant and middle water fleets, where stern trawlers have shown their superiority over the past year. I am thankful that in Hull, Mr. Mark Hellyer, the owner of the lost "Kingston Peridot", has scrapped her sister trawler, the "Kingston Sardius", which was fishing at the same time in the same waters as the "Peridot" went down some months ago.
  My right hon. Friend said on 8th July that the best way of improving fishermen's conditions and wages was by making the industry prosperous and efficient—hence the legislation on which we are now embarked. In Hull we have a guaranteed fall-back pay of about £20 7s. But this wages question is one for employers and unions. I understand that the Transport and General Workers' Union will be meeting the Minister later this week on the matter. I was very glad to hear him tell us that the wage factor would not be used in estimating the "added value" in the catch. Am I correct?
  Mr. Cledwyn Hughes: The wage is not calculated as part of the operational cost.
  Mr. Johnson: Decasualisation is taxing our minds on the Hull Dock. The industry is clearly moving towards decasualisation, and we have port registration schemes. From my knowledge of the Hull companies, ship's articles are now quite anachronistic. We are moving towards decasualisation in the companies, and later I hope that we shall move towards it over the whole field, know from my local union leaders that they are worried about the quality of the intake of men. That is why the Bill is so important. If the industry becomes

  933
  prosperous we shall have better wages and conditions and thus get a better intake of men, as happened in the coal pits after nationalisation. I gather that Lowestoft had somewhat of a shock with its advertising scheme in Birmingham, and that the quality of labour there is not all it should be.
  Besides its financial measures, the Bill enables the White Fish Authority to seek regulations for the charging of the penny which is now imposed per stone, and its increase up to 2d. per stone of fish landed. I understand that the Authority needs more money, and we looked at its difficulties in the Select Committee. It is in debt at present. My view is that if we proceed with 2d. per stone there will be a big battle inside the industry, because the vessel owners and merchants that I meet do not think that they are getting value for money. We came to the conclusion in our Committee that we should abolish the White Fish Authority, or, if it could justify itself, give it more money to do its job properly. I find that Clause 4 speaks about this. I can only understand from this that the Minister's intention is to expand the White Fish Authority, for otherwise why include it in the Bill? Why have paving for anything if one does not intend people to walk on the pavement and be given solid support? However, we shall no doubt discuss this in detail in Committee.
  What ever we may have said about the failure of the White Fish Authority to advertise, and increase the present static consumption of 19 lbs. per head per annum, and also to improve the marketing of fish; no one can deny the value of its effort in the field of research and development. I believe that it is doing wonderful work in that way, but find that skippers and men do not always use it to the best advantage.
  Mr. Wall: Would the hon. Gentleman not agree that we have now, as well as the White Fish Authority, the added complication of the I.R.C.? I am not saying that the I.R.C. is not necessary, but it is more complication.
  Mr. Johnson: If the hon. Gentleman will allow me to make my own speech, I shall come to the I.R.C. in four or five minutes.
  934
  I welcome the remaining Clauses, 5–14, dealing with safeguards for fishing operations, inspection of foreign vessels and so on. I believe that this represents a big step forward. I hope I do not sound chauvinistic, but welcome the facts that we are asserting ourselves more internationally. This is an important step, and will please our fishermen, who have in the past complained about the depredations by alien vessels within the 12 mile limit and indeed outside it. Our fishery protection officers are now given power to board alien vessels.
  I know that size of mesh and size of fish are Committee points, but I wish to say at this stage that there are some blatant offenders in the North Sea waters and well beyond. We need not go into the subject of industrial fishing, but the Communist States and France in particular are, in my opinion, guilty in this context. I am told that the French love to have small fish in their soups—bouillabaisse and so on. But this does not justify the extent of their activities in our waters. Conservation of stocks is so very important. The small fish become bigger fish, and one does not catch big fish, unless the smaller ones are allowed to become big.
  I have been out, with the hon. Member for Haltemprice, on fishery protection vessels in the North Sea, H.M.S. "Letterston" and others, and I know what a good job these ships have done. I wish the Minister could coax his fellow Minister of Defence to provide a few more such vessels, to guard our waters from the entry of anti-social types from the Continent.
  The Bill will shape for good or ill the future destiny of our fishing fleet, with all that this means for the welfare of tens of thousands of people in Fleetwood, Hull and elsewhere. It is extremely important that we should have it before us today.
  I have touched on wages and industrial relations. What about the size, shape and structure of the catching fleet? As to the financial measures in the Bill, why has the I.R.C. been called in, as American efficiency experts have to the City of London? I believe that the vessel owners need advice. Whether the City of London does I do not know. However, I offer all credit to the B.TA. for the welcome

  935
  that it has given to this proposal by accepting this stimulant.
  The I.R.C. must be more than a catalyst. I accept that view of my hon. Friend the Member for Goole (Mr. George Jeger) who a few days ago told the Minister that if one is to use taxpayers' money for footing the bill for the fishing industry or at least part of it, for modernising vessels and improving the conditions of the workers, there should be more public ownership.
  For a long time—I note my colleague in Kingston upon Hull, North (Mr. McNamara) is with me in this—I have believed in a State Fishing Board. I want an efficient fleet with modern stern fishing vessels. One would expect their performance to be a yardstick to which others could measure up. Why do I want this? I have watched how in the coalmining industry with public ownership, public accountability and public servants we then achieved standards in safety and many other fields. I have in mind safe vessel design, working and living conditions on a par with the Eastern Communist fleets, such as those of the Poles, who sleep many fewer fishermen in a cabin than we often do; day-by-day terms of service; wage agreements; and so on.
  I think that the Minister, as a Welshman, will agree that we never got adequate safety measures in the pits until we had the National Coal Board. So I want to see a State Fishing Board. This year's disasters dog us today in all our ports, although the vessels sailed out of West Hull. It is my belief that we shall never get daily contact between the vessels and the home base, and full manning, until we pass legislation insisting that we have qualified radio operators on the vessels and until we have a State Fishing Board with its vessels setting the pace in this way.
  As a personal note, I have in my constituency a family which lost a boy of 15 years in those disasters early this year. It was less than six months after he had left his secondary school. In passing, I would point out—I hope that the Minister and all others who are concerned are listening—that when any young male under 18 is lost his family gets no compensation. This is why we
  936
  are so concerned and become emotional about safeguarding the lives of our constituents.
  Mr. Kevin McNamara: Would my hon. Friend not also agree that it becomes particularly heartbreaking when the person of 18 years or under is the only wage earner in a family and the widowed mother gets nothing?
  Mr. Johnson: I could not agree more. My hon. Friend the Member for Kingston upon Hull, North and I are well acquainted with the homes of these people. This is why I emphasise the need for sufficient safety measure.
  The subject of design is vital. It is not merely stern fishing techniques. We want side fishing as well, but it involves danger. We need more comfort for the men in all fields of this hazardous calling.
  Stability of vessels is also extremely important. I am deeply grateful to Mr. Naisbett, Q.C., for what he said about this subject at the inquiry in Hull. We must eliminate the danger of trawlers being top heavy in Arctic waters because of the accumulation of ice. The hon. Member who represents the port of Fleet-wood is present. I visited the B.A.C. works at Weybridge some months ago to see a wonderful experiment in the test chamber there with de-icing equipment made by a firm in his constituency. It consists of putting a rubber sheathing on the superstructure. By this means, using compressed air, the ice can be fractured and dislodged. It is a very important development. I also commend the work of the National Physical Laboratory at Teddington on vessel stability.
  The Bill is warmly welcomed by the industry. I again emphasise that there is continuing support for four years. As I see it, if the fleet is having a bad time we increase the global subsidy. The greater the efficiency of any vessel within the fleet, the larger its share will be, I imagine, of the global subsidy. This will weed out the weaker vessels in these days of ruthless competition.
  We all know that the trawler industry needs a massive face lift. Only the Government can carry out this surgical operation. Traditionally the industry has been made up of individual units, and it still is. There are many family firms just as there were in coal mining or the

  937
  steel industry before nationalisation. No one doubts that lack of sufficient capital has been an important factor in the past. Without capital these units cannot move and plan ahead on equal terms with the subsidised fleets of Eastern Europe and Scandinavia. But I do not subscribe to some of the careless strictures of the B.B.C. in its documentary, "The Great Fish Muddle".
  My constituents on the fish docks and at sea are hard-headed. They do not accept all the superficial comments of a programme like that. It is easy to use words like "archaic" and "quaint". What is the alternative to wet fish landings and auctions? I have never heard of one. With more deep freezers and more fish coming back in deep frozen condition, therefore, there will be fewer merchants but I cannot but see that the auctions will continue—perhaps with better quality fish—permanently for wet fish landings.
  There is urgent need for vertical and horizontal integration—in other words, a merger. The merger must be large enough to have adequate managerial structure and to produce economies of scale. It must be large enough to organise expeditions to the South Atlantic—to new fishing banks. However, that is not as simple as the Poles and others make out. We shall get some unusual factors, not least sociological.
  I cannot see many Hull wives being happy about their husbands leaving their families behind for six months on end as the Communist fishing fleets do. This is not a simple matter, although I accept that, if we are over-fishing the North Atlantic, we must go further afield.
  I am told that discussions are taking place between the I.R.C. and the three largest deep water fishing companies—Associated Fisheries, the Ross Group and Boston Deep Sea. I believe that this would involve 180 vessels. But some of the firms have interests in poultry and frozen food. I take it that it is hoped to amalgamate the boats into one large fleet and I assume that amalgamation would also cover the frozen food side.
  Expansion of the fleet into a size of this nature is clearly necessary. I am convinced that there must be more aggressive marketing methods from the quayside to the shop counter. We shall
  938
  see a much better fishing industry. Given that, and given decent working conditions for the men, I have no doubt that fishing will still, as in the past, be a job for men of courage and endurance, and no men have more courage and endurance than the fishermen. They have played a vital part in our island history. They are fine men with guts and they deserve the best we can give them. The very existence of our trawling fleet is at stake and I do not believe that the Government will let us down.
  5.34 p.m.
  Mr. Walter Clegg: It is always a great pleasure to speak in a debate after the hon. Member for Kingston upon Hull, West (Mr. James Johnson). He has a great knowledge of the fishing industry which extends over many years, and his views are, therefore, to be listened to with respect. He started by making a plea that we should discuss this matter in a non-partisan spirit but then suggested that we should nationalise the fishing fleet. He cannot expect us to follow him in that partisan view. I hope to reply to some of the points he raised.
  I must declare an interest. As a solicitor practising in a fishing port, I act for people from all parts of the industry—trawler owners, fishermen and merchants. In particular, I have acted from time to time for one trawler-owning firm which I shall mention later.
  As the Minister said, the Bill is a paving measure for a scheme which will give us the details and is part of an overall strategy. If we on this side criticise some parts of the strategy, it is not because we do not want the Bill—we do—but because both within and outside the industry there are different emphases on the best measures to be taken.
  I appreciate that the Parliamentary draftsmen have produced a precise way in the Bill of achieving what the right hon. Gentleman wants and I am sympathetic to that point of view. On the other hand, to someone who is not an expert at reading Parliamentary shorthand—because that is virtually what the first four Clauses are written in—it is difficult to understand those Clauses because they must be read in conjunction with a Schedule. That is not easy and I suggest that there should be added a Schedule to relate in full the consequences of the

  939
  amendments to present legislation so that the ordinary person can understand the full effect of this Bill.
  I want to deal not so much with the need for a subsidy—a case which has already been made out—but with the effects which the subsidy will have. The Minister said that, in itself, the subsidy would not solve the problems of the fishing fleet and he detailed the remaining part of his strategy, including some control of imports. Whether the 10 per cent. will be enough is a matter of judgment. Only time will tell whether it will have a sufficient effect. We must give the measures a chance and I welcome this Bill.
  The question of reconstruction is still wrapped in mystery so I do not propose to pursue it. But I do want to discuss the question of a national minimum price scheme. The great difference here is between the English and Scottish attitudes. If it were left to the English major fishing ports there would not be much trouble in getting agreement. I can see my hon. Friend the Member for Edinburgh, West (Mr. Stodart) looking at me but what I have said represents the feeling in England.
  Many parts of the industry feel that the future of the English industry at any rate cannot be viable unless a satisfactory minimum price scheme is introduced. This is something which the White Fish Authority, if it is going to be able to get more money from the industry, could pursue and which the Minister ought not to reject in full at this stage. It is well worth pursuing.
  I come now to some of the practical effects the Bill could have. Safety is of great concern to all of us. I should say that there have been more attacks on the industry in relation to safety and other aspects during the past year than in any other year in its history. Some criticism has been valid. Some has been interesting in leading to improvements in safety. But some has been far from constructive, has not helped and has, indeed, created great resentment in the industry.
  The subsidy will help safety because we shall not get safety in anything but a viable fleet and it is necessary to replace many of our trawlers with more modern vessels as soon as possible. How-
  940
  ever, something could be done more quickly with our existing trawlers, and I am anxious that it should be done this winter. The hon. Member for Kingston upon Hull, West said that if the fleet were nationalised, we might have better safety measures, but I am sure that he appreciates that private industry has great care and concern in these matters.
  Mr. James Johnson: I was not casting any aspersions on any companies or individuals in the industry. I was saying that it has been our experience, in coal mining, for example, which I know well, that when there is a public sector with public accountability, there is much more invigilation and much more care, with more safety officers to look after this very important aspect of the work.
  Mr. Clegg: I pay credit to the National Coal Board for what it has done about safety, but even the Coal Board can make miscalculations which lead to disaster. Many industries have a good safety record, including private industries.
  The question is what can be done to make the ships safe, if possible, during the coming winter. The hon. Gentleman has already mentioned de-icing procedures. The hon. Member for Kingston-upon-Hull, North (Mr. McNamara) and I attended an exhibition of de-icing and what we saw there shows what can be done and done quickly. During the recent inquiry in Hull, it was reported that one of the Board of Trade surveyors said that de-icing was a very complicated and expensive business. I am not so certain that that is right.
  Mr. McNamara: The hon. Gentleman said that it was a Board of Trade surveyor, but that is not my recollection. Unless he is certain, he ought to say that it was a witness.
  Mr. Clegg: That was my recollection, but if I am wrong, I willingly withdraw. Certainly a witness said this at the inquiry
  Within a week of the disasters of last winter, a firm, B.T.R. Limited, which is close to but not in my constituency and which manufactures de-icing equipment for aircraft, suggested to Boston Deep Sea Fisheries Ltd., which operates from Fleetwood, that it had a device which might help with de-icing. Within another week that equipment had been fitted and

  941
  a trawler with it had left for the fishing grounds. Since then and with the full cooperation of the Boston company, which the other companies concerned readily acknowledge, and with the co-operation of I.C.I. and the British Aircraft Corporation, which provided research facilities, this type of de-icing has been extended not only to the masts, but to the bridge superstructure by using rubber panels.
  In addition, I.C.I. has now produced a non-stretch rope to replace steel ropes which will prevent the formation of ice, or make it easy to get rid of ice in severe icing conditions, because it needs only a slight vibration. The object of this, as with all de-icing equipment, is to bring the ice to deck where it can be dealt with. The estimated cost of this device is about £3,500 for the average trawler with another £250 or so for the standing rigging, and, in the context of operating costs and with the Government grants which would be available, this is a very limited amount.
  The "Boston Phantom" under its skipper Mr. Rawcliffe has received permission to operate in Icelandic waters and it is hoped that as soon as the icing conditions are appropriate final field experiments will be carried out. I hope that the Board of Trade will keep in the closest touch with these developments, for it is on the cards that our ships could be fitted with this device during this winter and before the weather gets too bad. The hon. Gentleman and I were told that the material was available to do a very quick job on equipping the whole fleet.
  One of the criticisms of the industry concerns its marketing. With frozen fish being landed in cartons and coming ashore more and more as other cargoes, there is a new dimension to the whole marketing problem and large units may be needed to handle this side of the operation. There has also been much criticism of the smaller merchants and the smaller firms. I have a feeling that, so complicated is the industry and so varied the demand in parts of the country, there will always be a place for the small men, but only if they combine with each other to make themselves more efficient. This can and has been done. Not long ago, under the "Beeching Axe", British Railways did
  942
  away with its fish train service at Fleet-wood and the merchants had to provide themselves with methods of getting fish fresh from Fleetwood to other parts of the country. Without any outside help, they built up their own fleet of modern refrigerated transport which now takes Fleetwood fish to various areas throughout the country. This is an example of private enterprise tackling the problem and of small people combining to overcome it. The difficulties in their way are not of their own making but result rather from Government legislation controlling transport, and we do not yet know what will be the effect of the new Transport Act.
  I welcome the Bill and look forward to seeing it in Committee and particularly to hearing about the details of the scheme. I am worried about how efficiency is to be defined. Two trawlers, each efficiently equipped and with a good crew, could go to sea and one could land its catch in a good market while the other, just as efficient, could land its catch in a bad market, making a bad price. What would be the test of efficiency then? It would be the difference in the markets rather than the crews or vessels which produced the difference. The only solution which I can see is for the trawler firms to manage to have their ships come in at the right time, and there will then be even more communication between shore and sea to ensure that they do so.
  I hope that the Bill is a step in the right direction, but I am not entirely convinced that without an upsurge in world markets this and the other suggested measures will be enough. I hope that they will be, because we all want the fishing industry to be a viable proposition as soon as possible.
  5.50 p.m.
  Mr. Donald Dewar: It is very pleasant to find ourselves again considering the fishing industry and indeed an important piece of fishing legislation. It is right that it should have come first on the day's Parliamentary menu, even though our start was rather delayed.
  The fishing industry is extremely important nationally and extremely important to the constituencies involved in it. It is an industry apt to be unusually dominant in those towns dependent upon it.

  943
  The Bill is something of a mixed bag but basically it falls into two parts. I do not intend to deal with Clauses 5 to 14 at any length, because in a sense they are uncontroversial and will be accepted by both sides of the House. I would just say in passing that there are points of substance and a large number of details to be ironed out, not only in terms of the operation of fleets, foreign boats in our waters, but also fishing limits. This was brought home in North-East Scotland recently by one comparatively small, but not unimportant incident, which took place in waters off the Isle of Man.
  I do not want to labour the point at any great length, but the House will be aware that two boats from Peterhead were arrested for pair trawling, an activity carried out in a way which would have been perfectly acceptable and legal off every other stretch of the British coast. The two vessels were run in, if I may use that phrase, by British boats and heavily fined. In correspondence with the Under-Secretary of State for Scotland I have made it clear that I find this a somewhat Ruritanian and ludicrous situation.
  I am interested in Clause 21 to see that there is provision for Orders in Council relating to fishing limits off the Isle of Man. I recognise that this may be a fit matter for discussion by the Constitutional Commission, mentioned in the Gracious Speech. Some of us however are not prepared to wait four or five years while this Commission comes to a conclusion. I hope that the Ministry will be prepared to be more flexible than it has so far indicated in its attitude.
  I know that the Under-Secretary told me in a letter that he did not consider it a major factor in the future activities of these boats. That is what he suggested. Certainly the local skippers to whom I have talked take a more serious view. They have not been happy with the view that it is not practical to open negotiations with the Isle of Man authorities.
  The Herring Industry Board has said that there is a possibility that this will be a considerable difficulty in future years, and that boats can be expected to be fishing in Isle of Man waters from the beginning of August, when the herring shoals are still within the three-mile limit. I gather that the Herring Board
  944
  is approaching the Manx authorities with a view to having the 1965 Act, which was enforced by the Ministry's fishing protection vessels, changed. If it is possible for the Herring Board to consider this it is right that the British Government should also consider this matter. It may not be a large issue, but it is important to the skippers and crews concerned. I accept that in the context of this debate it is a small issue.
  Mr. Patrick Wolrige-Gordon: I would like to take the chance of reinforcing, especially from the point of view of the future, the remarks of the hon. Gentleman about the very serious nature of this issue for the work of the Scottish fleet. I hope that the Government will take this up.
  Mr. Dewar: The hon. Member and myself are entirely at one on the importance that a number of local groups attach to this, and I hope that we will have some action when the Government have time to consider it further.
  This is to some extent an aside. The main section of the Bill deals with the new subsidy scheme. It is sweeping away the outdated and very restrictive machinery set up by the 1962 Act, and obviously in future our debates on the fishing industry will no longer be bedevilled by the sadly impractical vision of a fleet that was to be viable by 1972. It is quite clear from the wide-ranging nature of the speeches that the subsidy system is not necessarily the only factor affecting the future of the near, middle and far distant fleet. We have heard a great deal in previous debates and this afternoon about imports of white fish. There is enormous room for import saving here. Most of us have welcomed the announcements we heard from the Despatch Box of the 10 per cent. surcharge.
  There is also the matter of the minimum price scheme. I saw in the Press on 1st November a speech by the Chairman of the White Fish Authority in which he stated again his conviction, and presumably the conviction of the Authority, that a medium price scheme, properly organised, was an essential basis for the future prosperity of the industry. I accept that, and as far as I know everyone in my port is prepared to go along with it. One point which is always

  945
  raised, and I accept it, is that there was opposition 18 months ago from a certain section of the industry and indeed there still is opposition. I am not convinced that this cannot be removed by the right Government action and Government acceptance of the need for some sort of financial support for a scheme.
  I notice that the Chairman of the White Fish Authority said that it was waiting for a decision by the Government in this matter before it could go on to make up its mind. If there is a case of waiting for a decision I hope that it will not be postponed indefinitely. I have gained the impression, perhaps unfortunately, from what has been said in the past that the Government are waiting for the W.F.A. to make up its mind, while apparently the W.F.A. is waiting for the Government. At some time we have to get this resolved and I would like to see some action soon.
  There is also the important matter of the rather mysterious activities, so far undefined, of the Industrial Reorganisation Corporation. No one would deny that there is an enormously important area for the I.R.C. here. The fishing industry needs restructuring, and there is enormous scope for increased efficiency. I am glad to hear that the I.R.C. has been twice seen in Aberdeen, and has had a number of sessions with individual firms. I hope that when the reports and recommendations finally appear there will not be overdue stress on the unique problems of Hull, Grimsby and the deep sea fleet, but that it will be remembered that there are other ports, with important industries, which are not deep-sea ports, but which are still very much in need of encouragement and reform.
  The essential theme of the Bill is the new subsidy scheme. What we are told is what we already knew—we have the global sum and the important question is how that sum is to be divided. The announcement about the subsidy, when it was made in July got a good response from the industry, and it deserved to. Rapture has been qualified since in some quarters, understandably. No Government ever gives enough, and I appreciate exactly why some people have reservations about arrangements that have been made. Obviously if the industry is compared with the situation in agriculture,
  946
  with that in some other countries, Norway for example, we are not being treated in a particularly princely way.
  One or two ingenious people have sent me calculations to suggest that if over the last three or four years we applied inshore subsidy rates to the hundredweights landed by the Scottish trawler fleet, it can be seen that the fleet would have come out rather better than was the case. This is now behind us, and we accept the global sum as a starting point. The argument left is how we apply this principle which we welcome and accept, of efficiency. It is of particular importance, not only because the fishing fleet will get better returns, which will mean lower prices for the customer and greater viability, but it will also mean greater safety, something in all our minds after the recent disasters.
  Efficiency is an extremely difficult concept to measure. I have a great deal of sympathy with what was said a few minutes ago by the hon. Member for North Fylde (Mr. Clegg) about bad markets. This is a hunting industry and there are all sorts of variables and difficulties. Obviously there must to some extent be an element of lottery here. The Minister gave us some basic, skeleton information, which was welcome, as to how the added value was to be calculated for an individual vessel.
  As I understand it, it was to be a matter of taking a vessel's earnings and deducting from this the costs. This was to give the added value to which the size of the subsidy for the vessel was to be geared. That raises the question of how one defines costs. Here again the Minister was helpful and he made it specifically clear that costs were to exclude the wages bill. There is doubtless a case for this but it is causing some concern in certain quarters. If we are going for efficiency, obviously use of manpower is one factor in the efficiency quotient. It may be a point that if we exclude wages and say, in effect, that the subsidy bears no relation to the crew ratios and the manning of the vessel, we are possibly excluding an incentive for increased mechanisation and more efficient methods of handling fish and catching on the grounds. Although I recognise that there are arguments on the other side, I am not entirely happy about the exclusion of wages as such.

  947
  I recognise that it is possible to say that if we include wages we are saying to the owners, "If you keep your wages down your subsidy will go up", and that there is already a strong natural tendency for any owner to want to keep his wage bill down, which will be increased. We accept that the wage structure is, in many respects, too low and that if we are to get over manning difficulties and to give men a proper return for the tremendous efforts which they put in to the industry we do not want to discourage a proper share for them. I accept that if we give a built-in incentive to hold down crews we may be striking at the safety factors.
  But I am not convinced that these are conclusive arguments, for a number of reasons. I hope that the industry would not be averse to higher wages if they were geared to greater productivity in the labour force. This is very much a matter for the unions and the employers to negotiate. I am not sure that the added twist of allowing wages to be included so that the wage bill has some relation to the subsidy is such an enormously important factor as to outweigh the general argument that wages, which are an important element of any added value figure, should be included as an incentive to modernisation.
  Although I know—and this point can be fairly made—that labour relations in my port and many other ports have not been of the best—I still meet antedeluvian, positively nineteenth century attitudes to labour relations and a very paternalistic attitude to the men and the industry among many owners—there are signs of improvement, and I should like to hope that we are moving towards a much more flexible era. If the I.R.C. gets in among the industry and brings about the kind of rationalisation which we want, presumably the situation could greatly improve. Manning ratios are laid down by agreement between the unions and the owners. I do not see why we should not leave it to the unions to ensure, as they are perfectly capable of ensuring, that before they drop the minimum manning from ten, eleven or twelve men per boat, depending on where it fishes, the safety factors have been properly considered and that there have been improvements made in the catching equipment,
  948
  and so on, to justify it. On balance, I am less than happy with the suggestion that wages should be excluded.
  Turning to the question of finance, I unashamedly represent a sectional interest. This is a point which will come specifically from the Scottish Trawlers Federation. I am worried about the way in which it looks as though the new formula will work out for the Scottish trawling fleet. Take the results from the Scottish fleet in the years 1964, 1965 and 1966 and the percentage of total subsidy which went to that fleet and compare this with the proposed scheme of which the Government are thinking. During those years, the subsidy as a percentage of the total which would have been paid applying the proposed scheme would be less than it was under the old scheme. This is obviously an unsatisfactory situation because it suggests that over those three years—and this may not be representative; I am willing to listen to arguments about this matter—if the proposed arrangements had been operating the Scottish fleet would have done worse than it did under what everyone recognises as an ungenerous scheme which is now being abolished with the blowing of trumpets and great shouts of a new deal for the industry.
  Taking the years from 1964 to 1967, if the proposed scheme had been applied in terms of proportion of total subsidy the Scottish trawling fleet would have received less than the percentage share of operating profits which it contributed. I do not say that these figures cannot be misleading and I should certainly not like to have to fight the case on 1967, when the Scottish fleet did not feel the same squeeze and did not have the same profits dip which the British fleet as a whole suffered. I should not expect a section of the fleet which represents only about one-sixth of the whole to get the proportion of the subsidy which exactly corresponds with the profit which it turned in in such a freak year. If we did, we would be claiming about 50 per cent. of the total subsidy available, which we all realise is hardly practicable.
  But there is a serious case for saying that with the proposals, as they appear to be emerging from Government thinking, over the last few years the Scottish fleet would come badly out of the calculations. This is not a situation which

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  gives much cause for comfort in my part of the world. It is fair to point out that on the figures on which I am working—I do not think that they are widly inaccurate; they have been repeated in the Press—the Scottish fleet would have received just under £650,000 if the new subsidy scheme had applied last year. In 1962, it received £644,000. In other words, we would have been getting just about the same figure as in 1962.
  Taking what seems to be the balanced and disputable argument put forward for the exclusion of wages and looking at what I tentatively suggest seem to be the indications of the financial results, I think that the Minister will accept that there is a case for considering again the results for the Scottish fleet. We shall all be looking very carefully at the scheme when it emerges, but there is certainly a need for reassurance on the points I have been discussing.
  6.8 p.m.
  Sir John Gilmour: The part of Scotland from which I come is not connected with the deep or middle water fishing parts of the industry, but I think that all those who have the interests of fishing at heart see the industry as a whole and do not particularly want to take a narrow view one way or the other, although they are naturally interested, as the hon. Member for Aberdeen, South (Mr. Dewar) was, in the particular problems which face the fleet fishing out of Aberdeen.
  I was interested in the arguments which have been adduced about how the subsidy can be developed on an efficiency basis. Obviously, we do not want to use money to keep in being trawlers which are out of date in their fishing methods. But when it comes to such questions as how much bigger reward one boat out of two equal boats should receive, how does one judge efficiency? One thing which affects the industry so much is climatic conditions. Two equally efficient boats may go to sea and one may be fortunate in the weather which it strikes and the other unfortunate. One thing which governs how long boats have to remain at sea is to ensure a proper return, and sometimes perhaps the subsidy should be used to enable them to return rather than remain at sea. I am sure that the Minister will agree
  950
  that the weather is taken into account when agricultural subsidy payments are fixed. I do not know whether that can be done for fishing.
  Something which is of particular interest to my part of the world is the fact that the Bill, in Clause 4, I think, makes provision for increasing the payments which are to be made to the White Fish Authority. Presumably these will apply equally to the inshore fleet as they do elsewhere. Therefore, the whole industry will bear these extra payments. This question is tied up with whether enough money is being spent on research and development.
  According to the last report of the White Fish Authority for the year to 31st March, 1968, the general levy raised was £487,000. Out of that, the White Fish Authority paid £212,000 and the Exchequer £225,000 for research and development. The total that went into research and development during the year, excluding special items which occurred, was just under £440,000. On the face of it, it does not seem to me that this can possibly be enough to deal with the problems of developing an industry which has an important rôle in the import-saving context, to which the Minister referred.
  One could equally say that unless the people who pay the White Fish Authority levy feel that they are getting value for money, there will at once be an outcry. I therefore wonder whether a sufficient amount of money can be raised in this way for the necessary research in the fishing industry, especially when one considers the many problems which have to be solved and the many new methods which are bound to come into use in future.
  We get fishing legislation so rarely that unless one takes the opportunity when legislation is presented to cover all the possibilities, it is extremely difficult to make the alterations which, possibly, the Minister in charge at the time would like to make. That is why I am particularly interested in the provisions following Clause 4 of the Bill which deal with conservation and on which we must look to the future.
  What one has read in some of the technical journals of the fishing industry,

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  and what has been said of the fears expressed recently at a conference in North America of what was termed the vacuum-cleaning fleets of Eastern Europe and the effect that they would have on fishing stocks, makes it all the more necessary that in the provisions of the Bill we cover the maximum number of points.
  Perhaps I am ingenuous, but it seems odd to me that we can pass legislation allowing us to extend our jursidiction over what is known as the Continental Shelf in the North Sea so that we can conduct exploration and extract oil, and yet we appear to be unable to control fishing over the same area. I do not, of course, claim that simply because fishing has taken place in these areas by every nation from time immemorial, whereas exploration for gas is quite new, we have the right to say that we can extend each country's limits over the whole of its Continental Shelf area.
  There must, however, be a need to see whether, by international agreement, something cannot be done to ensure that fishing is carried out in the interests of the countries which abut the ocean. The Minister appears to be shaking his head, but there is to my mind a certain aspect of piracy by people who are prepared willy nilly to scoop up all fish irrespective of where they come from. I feel that there is real need to try to reach international agreements to control and improve the prospects for fishing.
  As to the work that needs to be done for research in inshore fishing, I am sure that there are many things that the White Fish Authority could do to extend the types of fishing that are used. It was only about eight or ten years ago when fishing for prawns around Scotland was considered to be of no economic value. The situation has changed and I suppose that that has now become one of the more valuable parts of the inshore fishing industry, and one has been pleased to see large catches landed recently in certain ports.
  Other types of fishing are likely to be developed only if research and development is devoted to them. I am interested to see that experiments have been carried out in the West of Scotland in growing mussels on ropes. I was interested to read that the Japanese are carrying out
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  a breeding programme with a shellfish of which I have never heard but which is called an abalone, which, I believe, is known in the Channel Islands and can be extremely valuable.
  Unless the White Fish Authority can help inshore fishing in the expansion of technical effort to improve the new types of fishing, we will not be likely to keep abreast of future development, in which there may be a change from what has amounted to fish hunting by boats going out to hunt the seas back to an attempt to farm the seas, so that by the planting and feeding of fish in certain areas we can reap a much richer harvest from the seas. I therefore give the Bill every welcome and I hope that it reaches the Statute Book at the earliest possible moment.
  6.16 p.m.
  Mr. Kevin McNamara: If I may deal briefly with the point made by my hon. Friend the Member for Aberdeen, South (Mr. Dewar) concerning wages and the new proposed formula, I think that this is a matter which might be decided between the unions and the employers. This is an agreement which is concerned essentially with industrial relations.
  I suggest, however, that some of the points made by my hon. Friend were based on doubtful propositions. My hon. Friend mentioned the question of manning scales, for example, but not the long hours—16 or 18 hours—which fishermen work. Therefore, before we introduce more efficient methods, we are entitled to ask what hours the fishermen work.
  One could go through a whole number of factors to argue that while the point made by my hon. Friend may be of interest in Scotland the matter is one which should be left to the employers and the unions. The unions are most concerned in questions of manning and safety to work out what is best for the men.
  I listened to the point made by the hon. Member for North Fylde (Mr. Clegg) concerning a minimum price scheme. It appears to me the whole object of the exercise of the formula as announced today is to lead to a minimum price scheme if we are to get a proper realisation of what should be the profit or return at the end of the day. Unless it can be based on a minimum price scheme, no matter

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  what tariff we have for E.F.T.A., we will be left almost completely to the vagaries of the market. It is important to have a sound basis on which to make our calculations.
  When we last debated the fishing industry at the end of the last Session, I said that the time-scale problem of the industry covered four main points; first of all, the immediate subsidy to help the industry in the difficulties which it has faced. Secondly, I dealt with the question of reorganisation. I mentioned negotiations with E.F.T.A., the general social conditions under the Merchant Shipping Acts and the Holland-Martin Report. I am proud that it is the Government of the party to which I belong which has this year introduced a degree of security and social reform to the industry. That is shown by the announcement in the Gracious Speech that the Merchant Shipping Act is at last to be brought up to date and the fact that we have had the first part of the Holland-Martin Report.
  Having said all that, however, I still think that we are, in a sense, debating Hamlet without mentioning the Prince. Until we have information on two main points—what is to be the effect of the 10 per cent. tariff on E.F.T.A. imports of frozen fillets and, secondly, what shape the industry is to take as a result of the Industrial Reorganisation Corporation—we are no surer about what our industry is to be like. I welcome very much the introduction of the I.R.C. into this industry, and I have been somewhat disappointed to hear the sceptical comments made about it this afternoon. I think that the I.R.C. deserves the faith and credit which the Government had in it when they introduced it. However, I wonder whether, because of the rumours we have heard, because of the statements we have had, what is to happen to those three large firms. We should have an early statement. Is it true that they are not really interested in the marketing side? We really need a statement about the intentions of the I.R.C. in the industry. It is absolutely fundamental.
  We have had today the basic outlines of how this scheme will work, and I know that negotiations are still going on with the unions and the employers about the scheme. These, I hope, will come to a speedy and suc-
  954
  cessful conclusion because it will be very important in trying to work out what the scheme will mean for the industry as a whole, in wages for crews, in particular, by which we shall judge the success and intentions of the Bill.
  As it stands at the moment, I think both sides of the House are agreed that it is a follow-up to the morale booster which the Government gave to the industry when last July they announced their generous intention to increase grant. This has resulted in improvement in the morale of the industry, and has given it a greater sense of security, but the spur has now gone, and we want to see from the details of the scheme exactly where we are going and to make sure we are looking forward to a very prosperous future.
  I have for a long time felt that the crisis which exists in the fishing industry has been 50 per cent. human and 50 per pent, economic but that the solution to it is 100 per cent. economic. I should like, therefore, to put a number of points to my hon. Friend the Joint Parliamentary Secretary to answer, if he will be so good, when he replies to the debate.
  There is, first, the suspicion, voiced in particular by my union, the Transport and General Workers Union, that the operation of the new subsidy structure might to some extent have an effect the reverse of that intended, namely, that the subsidy, being based on profitability and efficiency, may encourage the retention of older trawlers, which are mainly conventional, and have less safe working conditions, but are landing wet fish and, therefore, are more profitable than the more modern freezer trawler which is not so profitable because of foreign competition.
  We know that we have within the industry a two-tier structure—the modern vessels, and a part of the fleet which is very old. Figures have been mentioned today. What I am afraid of, and what my union is afraid of, is that, because of the way the new subsidy will work, it being based on fishing efficiency, we may have the retention of the older vessels for longer than we want to see bearing in mind our history over the year of landing wet fish. Therefore, I should like to know whether, under the new scheme, there may be a tailing off

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  of the way the subsidy is operated so as to encourage a more rapid replacement of the older vessels.
  We have two main grounds for the subsidy. We have first the operating subsidy, and secondly the building subsidy. Both are very important, but we seem not to have the degree of flexibility in the subsidy structure one would like to see. We have only to look at the O.E.C.D. report on the various types of subsidies given in other countries, ranging from Canada with subsidies for new techniques, to Germany with loan interest reductions, to see how the different countries have different manners of applying their subsidy structures. I wonder if we ought not to look at the question of subsidy being applied both to improve efficiency immediately and also to provide for long-term developments which may take place.
  One of the most important and most welcome things that the Government did when they broke fresh ground two years ago was, for the first time, to give allowances for the introduction of safety equipment in the building of ships, and a grant towards the improvement of ships from the safety point of view. Could not there be under this new subsidy on the operating side more incentive to include provision for safety?
  I would like to think, because of the way the account had been worked out, on both the debit and credit side, that a tremendous contribution could be made to the social welfare of the crews, if part of the subsidy were paid not only for the time a ship is operating but also for the length of time it is in dock to give the crew a reasonable time at home in port.
  Obviously, many of these suggestions will be tied up with the recommendations which the Holland-Martin Committee will be suggesting considering when looking at all the different facets of the industry, but these things are so interlocked that it is impossible to talk about the subsidy and not talk about working conditions, marketing, organisation of the industry, and so on. It is inevitable, but perhaps I cannot expect to get today all the answers I want. However, they ought to be borne in mind when looking at this problem.
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  There has always in the past been a suspicion that the Government subsidy has been used in part to diversify the interests of the trawling firms, apart from helping the industry. I would like to think that we shall have precise, accurate and greater control of the use of the subsidy to make sure that this suspicion is not substantiated.
  Turning to the Bill itself, I have a couple of things I should like my hon. Friend to reply to if possible. In Clause 2 we have for the first time in a Bill a specific mention of fishmeal and other products, If the subsidy is used in the flexible and imaginative way it can be used both for the development of factory ships and for a tremendous amount of import saving. Thus this aspect of Clause 2 is particularly welcome. It is important that we try to cut down on imports of fishmeal. It has often surprised me that the Government have not done this sufficiently in the past, to encourage our own protection of fishmeal, when we hear so often of fish being thrown overboard because it is not edible or saleable on the English market and now when there has been development of cold storage. If we had adequate fishmeal factories at sea, then, when there are gluts of fish, the fish could be put into cold storage to be consumed later.
  Clause 4, and I am a great believer in Clause 4, deals with the extra levy which the White Fish Authority is given power to impose. This is most important when one considers the future of the White Fish Authority and Herring Industry Board. For the life of me I cannot understand why it is necessary to have two Boards when they might be amalgamated. Each is complementary to the other. There could be savings in salaries and administration costs and also research could be undertaken jointly.
  Leaving that as an aside, when the Select Committee considered the White Fish Authority it came to the conclusion that it could be either strengthened or scrapped. The Government have decided that it should be strengthened and have given it money for that purpose.
  I should like to quote from the evidence which was given by the Transport and General Workers Union to the Holland-Martin Committee, and concerning the White Fish Authority. On page 8 of its evidence the union made this point,

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  which is important because it underlines the basic weakness which has always existed in the White Fish Authority:
  "Another cause for concern arises from evidence that where commercial, design and safety advances have resulted from research, often by the W.F.A., owners have been reluctant to co-operate in experiments and to implement successful projects. In correspondence with Sir Frederick Brundett of the W.F.A., we learned that an offer to experiment with transferring at sea, boxing and superchillmg has not been received very well by owners on Humberside. The offer from the W.F.A. was on favourable financial terms for experiments involving four or five vessels. We quote Sir Frederick's letter on other research projects:
  'The above is not the only case where the results of the Authority's Research and Development Programme have not been implemented as fully or as rapidly as they could be; we believe for instance, and have some reason for doing so, that more general use of warp tension meters would help skippers to improve their performance. We agree, however, that it would help if there were better arrangements to instruct skippers in the use of instruments and techniques already developed. This would be more effective in the short-term than acceleration of the development of the simulator-trainer: in that project we have first to develop the tool and then find out if it is successful. We believe that a comparison of the performance of individuals and of company fleets shows that better training of skippers is one of the most immediate practical steps the industry could take.'"
  The White Fish Authority can do a tremendous amount of good, as it has done, in its research, but it has never had the power to see that its findings are adopted. This has been its major weakness, and is one reason why it has been regarded with such suspicion. I would like the White Fish Authority to be strengthened for the purpose of research, and the subsidy to be geared in part to the acceptance of recommendations on the fully carried out experiments of the White Fish Authority. Their recommendations should be listened to, to find out what advances can be made, and then the subsidy should be granted.
  I agree with my hon. Friend the Member for Kingston upon Hull, West (Mr. James Johnson) that we should have a publicly owned fishing industry, or that at least part of the industry should be publicly owned. This would act as a pace setter for the rest of the industry. I made this point in the debate last July. It could work not only to develop the techniques which emerge from the White
  958
  Fish Authority and others but also to find new grounds and new methods. If the experimental side were separated from the commercial side and if the White Fish Authority were paid for the experimental side and the rest of the company existed on a commercial basis, then this would provide a pace setter for the industry and a way of finding out what improvements could be made.
  Clause 5 deals with the adequate marking of fishing boats and their gear. Paragraph 26 of the Report of the Court of inquiry on the loss of the St. Romanus states:
  "In December, 1964, in the Formal Investigation into the loss of the SAREVA the Court recommended that consideration should be given to the question as to whether there should not be some better method of identifying liferafts. As a result of this recommendation various methods of identification had been discussed between the Board of Trade and representatives of trawler owners, but no satisfactory solution had been agreed, and as far as could be ascertained the matter had been dropped. In the opinion of the Court there is really no excuse for such delay. Since the loss of the ST. ROMANUS the Hull Mutual Insurance Society have put into operation an arrangement whereby each liferaft when serviced in addition to its number should bear the words 'Hull, England'. In this case once the correct number of the liferaft was known in Hull it was only a matter of minutes before it was identified as coming from the ST. ROMANUS. It is appreciated that the marking on the liferaft must be on the liferaft itself and not on the outer casing…The Court still feels that further consideration should be given to this matter, but the method adopted above is a good interim solution."
  Will Clause 5 lead to the implementation of this recommendation of the Court? The Bill was, of course, drafted before the finding of the Court was published last week, but this is one thing which has come out of the tragedies which could be implemented very quickly in the Bill.
  Reference is made in the penal Clauses to the confiscation of the catch and to penalties incurred in breaking the regulations. I realise that this is an international agreement and is traditional, but very often the wages of the offshore fishermen or ordinary fishermen are related to the size of the catch, and he will therefore lose a share of his wages. This would be acceptable if that person bore full responsibilities for selecting the area where the vessel fished or the type of gear used, but on many vessels this is

  959
  the responsibility of the captain. This could have particularly unfortunate results. I know that this is the traditional method, and it is sometimes argued that these people can make their point of view felt. Although this is probably more a Committee point, I felt I should mention it here because it is something which I shall seek to raise in Committee.
  Recently Hull has given a general welcome to the Holland-Martin Interim Report, the proposal for the mother ship, the weather report and so on, but there are two points on this which are important. The Court of Inquiry into the St. Romanus recommended that wherever possible a ship should go to sea with a qualified radio operator. This is something which we all would like to see. I hope that the Board of Trade, which has generally accepted the interim report, will ensure that when a ship goes to sea without a fully qualified radio operator there is on board a person, other than the skipper, with a radio telephone certificate. This is an important interim matter which could be introduced quickly. Many men who sail as mates while holding a skipper's ticket hold that qualification, and this would be an added safeguard. The other point concerns the stowing of life rafts forward when members of the crew live in the fo'c's'le.
  Much could be said on the subject of training, pay and recruitment of crews but perhaps we should wait for the full report of the Holland-Martin Committee.
  I have in the past been critical of the owners. Therefore, I welcome the widely reported decision of Associated Fisheries to stop their skippers fishing north of Iceland from 1st December to 31st March, whilst stability tests are being carried out at the Admiralty yard at Yarrow. This is a most important decision, and a right decision, which is welcomed. It will put a financial strain on the firm and it is right that we should recognise this. I hope, this decision having been made by Associated Fisheries, that other firms in the industry will follow suit.
  Mention was made in the Court Report on the Ross Cleveland of co-operation between all sides of industry on safety matters. Paragraph 28 of the Report states:
  "It is clear from the evidence adduced in these three inquiries, namely the St. Romanus,
  960
  the Ross Cleveland, and the Kingston Peridot, that it is of the utmost importance that the owners and builders of trawlers should cooperate wholeheartedly with the Board of Trade on questions affecting the safety of trawlers and that no one should delay or sit back when any question affecting the safety of trawlers and their crews at sea is raised and rely upon someone else to take the initiative. There was evidence of some such co-operation in the past, but there was also evidence that it had not always taken place. Furthermore, in the opinion of the Court it has been demonstrated that there is need for all parties in the fishing industry, owners and builders of trawlers and of skippers and crews, to play their part in making what must be a hazardous occupation as safe as possible."
  I am sure that hon. Members on all sides of the House would agree that we need this type of co-operation extended and improved upon so that what is undoubtedly a hazardous occupation may become as safe as man can make it.
  That brings me to what the hon. Member for North Fylde (Mr. Clegg) said about the de-icing experiments which are being conducted, at a cost of about £3,000 a vessel for the superstructure and bridge, and, for rigging, £40,000 for the whole fleet. We hope that there will be an early decision about it so that we may have the degree of safety in our fleet that we should all like to see. It has immediate effect and, in terms of the cost of replacement of vessels, entails expenditure of a very small amount.
  The Bill is an important one for the people of my city. It is one which we welcome and which makes us very proud of our Government.
  6.41 p.m.
  Mr. John Nott: I am conscious of the fact that this Bill is mainly but not entirely concerned with the deep-water fleets. There are Clauses in it, however, which can apply to the inshore and middle-water fleets, and I want to mention one or two aspects of the Bill which relate to the type of fishing carried on from my constituency. The aspects of the Bill which are relevant are, first, the White Fish Authority Levy and the increase which is anticipated; second, Clause 5 and the regulation of fishing operations; third, Clause 15 and the shellfish regulations; and, finally, Clause 16 and conservation.
  We in Cornwall, with our fleet concerned predominantly with inshore fishing, recognise that the problems of the

  961
  deep-sea fleet are considerably greater than ours at the present time and that the Bill is needed badly for trawlers operating from Hull, Aberdeen and elsewhere. We recognise that yields have declined with intensive international competition and that deep-water trawlers have been shut out of many of their traditional fishing grounds as a result of the extensions of the fishing limits. We recognise, too, that imports have created a considerable problem for the deep-water fleets although, to some extent, they have done the same for the inshore boats. For example, the import of canned goods has had a serious effect on pilchard fishing, and we need some system of variable levies, on a long-term basis, to protect our fishing industry from imports of this kind. These items, and the substantial subsidies granted to our competitors, who are also our trading allies, have put our deep-water fleets in a serious position, with the result that the trawlers have been making little or no profit over many years.
  For that reason, I welcome the Bill. It seeks to assist one of our greatest, most risky, most adventurous and at the same time most unrewarding industries—the fishing industry.
  As I have said, compared with the problems of the deep-water fleet, those of the inshore and medium-water fleets are not so serious at the present time. Nevertheless, I suggest that the experience of the inshore boats has been uneven, and there are parts of the inshore fishing industry which are going through great difficulties.
  I come then, to Clause 4 and the White Fish Levy. I am sure that the Minister is aware that the introduction of minimum prices would be most unpopular in the South-West. I know that the Parliamentary Secretary is well aware of it. If the Levy is to be increased by a penny a stone, there will be tremendous opposition from fishermen in Newlyn and Brixham to any minimum price scheme affecting them. I can understand their fears. They fear that the tendency would be for market prices of fish to come down towards the minimum price; this would be catastrophic for the South-West. If there is any move towards a minimum price scheme, I hope that the South-West will be excluded from it.
  In a way, I wish that the Secretary of State for Economic Affairs were present
  962
  because we recognise that the problems of the inshore and medium-water fleets are often social ones, while in purely financial terms they are small besides the problems of Kingston upon Hull. Nevertheless, the prosperity of inshore fishing is vitally important to communities and whole areas of the South-West and Scotland. For that reason, I would not like to think that the increased subsidies which are to go to the deep-water fleets will in any way reduce the amounts available for inshore boats. I realise that the inshore subsidies are calculated on a basis entirely different from those in this Bill. I hope that they will continue to be reviewed annually in the light of the widest economic criteria and that, as is the case now, the subsidy will not be subject to automatic reduction as the years go by.
  In this connection, I am concerned primarily about any increase in the subsidy to deep-water trawlers having an effect on the total allocation to the fishing industry generally. I have no doubt that the Minister has great good will to the inshore fleets as well as to the deep-water fleets, but I am concerned lest the Treasury and other Government Departments might not at some time in the future lake away from the inshore fleets some of the increased allocation now to go to the deep-water fleets. The Minister will be aware of the widespread anger and concern recently when the inshore subsidy was cut. It arose in the changeover from stonage rates to daily rates, and I know of several inshore boats which suffered cuts of up to 50 per cent. in their subsidies as a result.
  Although the inshore fleets have the great advantage of landing fresh fish and, in that sense, are not so concerned with imports as the deep-water fleets, nevertheless they have great problems which offset their advantages. First, their transport costs are higher, and they have been increased substantially by taxes on commercial vehicles and now by the terms of the Transport Act. Second, there is little scope for freight rebates, because inshore ports have not the same bulk as Aberdeen and Kingston upon Hull and, therefore, cannot get the same concessions on the railways as deep-water ports are able to obtain. Third, the small amount of capital possessed by most inshore fishermen and the narrow

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  margins on which they operate make them very vulnerable to misfortune, whether it be damage to their boats or their gear.
  I do not need to stress to the Parliamentary Secretary the vast importance in the west country of our shell fisheries. They stretch in my constituency along a coastline of up to 100 miles. It is due to the shellfish industry that a great number of communities are able to survive and to maintain an adequate living until the summer months come round, when many hon. Members and other visitors descend on Cadgwith, the Lizard and other coves and villages. The livelihood of these places is, to some extent, kept going during the year by the shellfishing industry.
  The Parliamentary Secretary knows that, over many years, we have had a very great controversy over free diving for shellfish; and that this activity still continues. I have never been one of those who wished to see regulations introduced prohibiting underwater fishing for sport and recreation, and I know that my hon. Friend the Member for Haltemprice (Mr. Wall) agrees with me on that point. What I should like to see is a limit, but not a ban, put on professional skin-diving for crayfish.
  A good diver can take between £200 or £300 a week diving for crayfish in the season. I do not grudge him that return, because his is a tough and dangerous occupation, but I, and everyone connected with the industry down there, believe that one cannot have fishing on this scale without there being repercussions on the stocks. No one would claim that stocks of shellfish are being completely depleted, but one can claim that, although the stocks are not being extinguished altogether, the effect is to reduce below an adequate level the standard of living of the many communities which depend on shellfishing for their livelihood. This is a serious problem, and I wish that the Ministry would recognise it. This controversy has gone on for many years without progress being made.
  Mr. Wall: Does my hon. Friend appreciate that the main club dealing with skin-diving—the British Sub-Aqua Club—supports the view that there should be a limitation, but no banning?
  Mr. Nott: I am aware that the British Sub-Aqua Club support the need for some regulation in this connection.
  I mention this matter because, although the Minister could have dealt with it in another Bill, there are Clauses in this Bill dealing with conservation, and I think that he could have taken power to make regulations for lobster, crab and crayfish fishing. That power would have come logically within this Bill. In addition, the Measure contains no power to regulate the size of shellfish that may be taken from the fishery limits in the British Isles.
  I asked the Ministry this morning whether, in Clause 16, the description "seafish" could be so defined as to include shellfish. I am sure that the Minister is aware that the area around Cornwall and Devon is a very prolific shellfishing ground for the French, and it would have been quite logical to broaden the definition in Clause 16 so as to include shellfish as well as seafish. In my part of the world, the crayfish is often quite a large fish, but there are also some very small crayfish caught which are the breeding stocks of the future. These crayfish are mainly consumed in France—they are hardly eaten here at all; 90 per cent. of them are exported to France which takes them from Newlyn and other harbours. I believe that the definition should be widened to include these shellfish.
  I appeal also for the inclusion of shellfish in the white fish subsidy. A crab or a lobster is now no more of a luxury than a turbot or a sole, which now receives a subsidy, and in social terms the importance of the shellfish industry to this area is immense. How much evidence, and what kind of evidence, does the Minister require us to provide to enable him to consider the point again?
  I believe that, in logic, the Bill should have given some formal powers to local sea fisheries committees, which are trying to regulate fishing on the spot. These bodies include representatives of practising fishermen, who know their business. The committees could do a great deal to assist the Minister and the Ministry in helping to regulate some of the matters set out in the Bill. I wonder whether Whitehall is, perhaps, a little over-jealous of its powers, some of which could well

  965
  be delegated to local sea fisheries committees which are able to implement regulations and help the sea fisheries officers in their task.
  The local position of these committees could be regularised by the granting to them of the status of corporate bodies which, for legal reasons, would be enormously helpful. Again, it would be a great help if these committees were empowered to establish reserve funds for capital expenditure and for repairs and renewals. The present position is that they are financed by a precept on local authorities but are not permitted to set aside any part of the precept to reserves for the purchase of office accommodation or capital equipment.
  The sea fisheries committees could be empowered to contribute to local lights, fog signals and other navigational aids for the benefit of inshore fishermen, and also for the benefit of medium water fishermen of other nations. Further, why cannot these committees spend money on removing obstructions from inshore fishing grounds? That point must come within the context of such a Bill as this, because what to us are inshore fishing grounds are deep water fishing grounds to other nations and there would be some reciprocity in this respect.
  I believe that the local fisheries committees should have powers to institute licensing systems to control the taking of shellfish, just as I have suggested that the Minister should include such powers for himself in this Bill.
  Why does not this Bill increase the statutory maximum penalties for infringement of local sea fisheries committees' byelaws? The present maximum penalty is £50 for a first offence or £100 for any subsequent offence, except where a vessel is wrongly used, when a second offence may involve a fine of £150. It would be reasonable to empower these committees, which help the policing of our waters, to impose a fine of substance upon a foreign vessel caught infringing our rights, rather than having these purely nominal fines of £50, £100 and £150.
  Finally may I ask the Minister would the subsidy given in Clause 2 to fish products be available also for the establishment of a fish meal plant which would be used by inshore fishing boats? I know that this Bill is predominantly meant for
  966
  the deep water fleet, but presumably the powers to grant subsidies for fish products could also be used for the establishment of a meal plant in Cornwall for the inshore boats. The pilchard fisheries were once vitally important to Cornwall's economy, but they are now going through very difficult times and, although there are still plenty of pilchards there, the market for them is dwindling. It is taken up with imports from other countries. There is an ever-increasing need for a processing plant to can and cure pilchards in the South-West and also to take all the surplus fish and offal for reduction to oil and meal. I admit that Clause 2 is mainly related to deep-water fisheries, but could it not be used to provide a subsidy for such a processing plant?
  This Bill is primarily concerned with the deep-water fleet, and we welcome it in the South-West, but here the Minister has an opportunity to take some powers which we have been pressing him to take for months and sometimes years. They could easily be slipped into this legislation as it goes through the House and I trust that he will do this for our benefit.
  7.0 p.m.
  Mr. Alick Buchanan-Smith: One thing which characterises our debates on fishing is the problem of distinguishing between short-and long-term improvements in Government policy towards the fishing industry. The kinds of aid which can be given to the industry we discuss on the one hand in the context of short-term policy to get the industry through a difficult period and out of its present problems, and on the other hand, with a view to helping its long-term economic position.
  It was hoped that when the previous scheme was accepted the industry would be able to stand on its own feet. Now, by this Bill, the Minister is setting up a scheme whereby we hope that the industry will reach the stage at which it can stand on its own feet. Unfortunately, over the last few years with these schemes we do not seem to have got much further forward in putting the industry on a sound footing. I am sure that it is the aim of all of us who have the interests of the industry at heart to see that it can stand on its own without the need for schemes and subsidies of this sort. We

  967
  should like to see an economic climate in which the industry can prosper with its own resources. One may use the comparison with the agricultural industry. Most farmers would like their industry to be able to stand on its own feet and to get a proper return on capital to cover operating costs without the constant need to go to the Government for a major part of its income.
  That is why it is so important to view this Bill, not only in the narrow context of the fishing industry itself, but in the whole context of the Government's food policy. The Minister is discussing in the Department and with the Government the whole question of Government policy in relation to agriculture, whether there should be greater dependence on import control and the possibility, I understand, of going on to a levy system which would have the effect of raising the price of food. That would have immediate repercussions on the fishing industry. If the price of food were raised, which is a critical matter in discussion of a levy system on imports in relation to agriculture, automatically the price of fish would rise with the rise in the price of meat.
  For this reason it is important that when we are discussing the fishing industry we should know more of what is in the mind of the Government and of the Minister about food policy generally. If there were a change in agriculture policy we could create prices for fish which would help to extinguish the subsidies which we are now discussing. This would be one way in which the industry might be able to earn from the market sufficient to cover operating costs and to give a reasonable profit and a reasonable return on capital. I do not know whether the Minister intends to give us an inkling of his thinking on this tonight, but we know that he is considering the report of the "Little Neddy" which has important implications for this subject.
  We look forward to hearing the Minister's thoughts on this subject before the Bill has passed through Committee. Then we shall be much better able to assess the future of the fishing industry, with reference to the return it can hope to earn from the fish sold in British markets. This is important not only with reference to the long-term thinking of the
  968
  Government, but, as the Minister admitted this afternoon, we have to face the question of a levy to combat dumping by other countries. The Minister referred to a 10 per cent. subsidy with reference to fish fillets. We have to live with this problem in relation to fish and agricultural products. Therefore, we should like to know about the Minister's thinking in terms of import control and whether he intends to put a higher duty on some of the foodstuffs brought into the country.
  I hope that—perhaps not this afternoon, but certainly in Committee—we shall hear more about the Minister's long-term thinking on food policy.
  Mr. Speaker: Order. This debate is not on food policy, but on fish food.
  Mr. Buchanan-Smith: With every respect, Mr. Speaker, I am relating this to the Bill which is before us. If we could know what the Minister's policy is for food that could have a big bearing on the question of the kind and size of subsidy which the fish industry will need. It would also have a considerable bearing on whether we think the proposals put before us can help the industry in the long term to be put on a more secure footing. I hope that we shall be given some indication of where the Government stand in relation to this problem.
  Taking the narrow view of the industry itself, everything in this Bill in relation to the subsidies the Minister proposes follows on the question of the value-added formula. This factor is absolutely critical. The Minister, quite rightly, is trying to encourage the efficiency of the industry. That is in its long-term interests. I apologise if I did not follow him absolutely. I was not sure precisely where depreciation costs come into the value-added formula. Are they taken as part of the operating costs and therefore taken into account before value-added is considered, or are they taken into account in the residual part with wages and profits to management and so on?
  This is important because, if depreciation is taken into account in the operating costs, that will lower the value-added for more modern boats. They have a higher depreciation and this will increase their operating costs and reduce the value-added and reduce their qualification for subsidy. I am sure that it is in our

  969
  interest to encourage the efficiency of the industry and we must be absolutely clear on which side of the equation depreciation charges come. Only in that way can we be certain that modernisation, which we all want to help, gives the encouragement to the industry which we all want to see. We shall not get modernisation in the fishing fleet unless it has a good return on capital and unless we ensure that those sections which are forward-looking and prepared to experiment and to put money into new techniques are not penalised in any way.
  On a slightly more general point, I should be interested to hear from the Under-Secretary exactly what discussions the Government have had with the Scottish Trawlers' Federation on the working out of the formula. I should like to know also when the Government hope to get agreement about it. The Minister said earlier that he was not sure when agreement would be reached and when he would be able to give us a better indication of the details of the scheme. Scottish Members on both sides have pressed strongly for an absolute assurance that Scottish interests have been consulted. The hon. Member for Aberdeen, South (Mr. Dewar) went into this in detail. I support his strongly expressed hope that the Scottish fleet will not suffer either in relation to the United Kingdom fleet or in relation to the situation it enjoyed previously.
  There are two specific questions to which I would like answers. First, we know now that the subsidy is to be paid on the basis of returns of individual boats. I can understand that this will involve much paper work and administration in calculating exactly what the returns are. The Explanatory and Financial Memorandum, under the heading "Financial effects of the Bill", states:
  "No additional administrative expenditure is expected in paying subsidies under the new scheme for the deep-sea fleet."
  I should like that to be expanded upon. Basing the subsidy on individual boats could make more administrative work. Why do the Government think that no additional administrative work will be involved?
  My second question arises on Clause 13. which deals with the compensation which a court can order a convicted
  970
  person to pay to an injured party. The limit of compensation has been fixed at £400. Why has this sum been selected? The kind of offence that could be committed, involving gear and other things, could result in damage or injury to a much greater extent than £400.
  Finally, I had intended to say something about the inshore fishing industry and also about the shellfish industry. All the points I had intended to mention have already been made by my hon. Friend the Member for St. Ives (Mr. Nott). I support everything my hon. Friend said. I hope that in the passage of the Bill we do not forget the interests of the inshore industry, which is very important in Scotland as it is in the South-West of England, as indeed is the shellfish industry—the fastest growing section of the industry in Scotland.
  7.13 p.m.
  Mr. Anthony Stodart: We have had a debate which I think in Scotland we would describe as "douce" on an industry which, though not very large, is an extremely important one. It is not only important economically as a potential saver of imports. Goodness knows that is important today. It is important as a supplier of protein and as a very substantial instrument of employment in many areas. It is an industry which contains some of the staunchest spirits in Britain. It would need to have had these spirits in view of some of the slings and arrows which it has had to endure. One has only to recall the state of things in Hull and Grimsby on a visit which hon. Members on both sides of the House paid last year to know that.
  What interests me is the similarity of the situation tonight to that which existed on 14th November, 1961, almost precisely seven years ago. At that time the industry was in very severe difficulties and facing a very grave situation. I can well recall the hon. Member for Edinburgh, Leith (Mr. Hoy) emphasising the considerable losses which had been made then by the middle water fleet.
  Developing this argument of similarity, I remind the House that last year the Scottish trawling fleet, if allowance was made for depreciation even at the wholly unrealistic rate of 6⅔ per cent., made a loss of over £100,000, a loss which

  971
  was turned into profit only by the injection of £206,000 of subsidy. Not one port from which trawlers operate in Great Britain, not even a single section of the fleet using any one of those ports, was able to show a profit in 1967 after it had deducted that modest and artificial 6⅔ per cent. As my hon. Friend the Member for Haltemprice (Mr. Wall) told the House, averaged over the whole fleet the loss on every vessel was over £18 a day.
  The second similarity is that seven years ago the House decided on an extremely radical change of policy from what had existed up to that date. Precisely the same holds good tonight. It is both frustrating and fruitless to go into the reasons for having to make the change. Hon. Members opposite have claimed, and they claimed at the time, that the Fleck policy, as it has become known, was wrong and never could work. One cannot in all fairness bring a charge against right hon. and hon. Members opposite of being wise after the event, because the misgivings then were expressed in the debate on that night by the hon. Member for Leith and by the present Leader of the House.
  Let it not be forgotten that that policy was based on a considerable amount of thought and consideration to very difficult problems, given by the late Lord Fleck and his Committee, and that those considerations received the approval of what one might call the experts—the British Trawlers' Federation. Would Lord Fleck have made those recommendations, would the B.T.F. have agreed with them, if they could have seen ahead to the invasion of this country by the frozen fillet and other imports, to the steep rise that has taken place in interest rates, to an increase of £900 per vessel in insurance premiums, and to the surcharge on fuel not many years ago which had the effect of virtually wiping out the profit made by a vessel? It is impossible to say for certain what they would have done, but I should have thought that it was unlikely.
  In reply to my hon. Friend the Member for Haltemprice, the Minister said that the details of the new scheme were still being discussed. Will he confirm that the principles have been broadly accepted—
  972
  I could not put it wider than that—principles, incidentally, which are not described in the Bill but which were outlined to the House by the right hon. Gentleman before we rose in July and explained in more detail today? Have they been broadly accepted by both the Trawler Federations? I take it that discussions have been held separately with each body.
  Mr. Cledwyn Hughes: The principle of a subsidy geared to efficiency has been accepted by the industry and welcomed by it. It is the detail which has to be worked out now.
  Mr. Stodart: I am obliged to the right hon. Gentleman for that assurance.
  The other similarity between tonight and that night seven years ago is the voicing of misgivings by Opposition spokesmen. At that time, misgivings were expressed by the hon. Member for Leith and by the present Leader of the House. Tonight, it is only right that we on this side should put on record the reservations which we have.
  It seems to me that just about the only difference between the background to this debate and that of seven years ago, apart from the basing of proposals then on all the thought and consideration which had been given to the problem by the Fleck Committee, is that the details of the policy then appeared in the Bill whereas on this occasion we are at a disadvantage in that, until the scheme is published, we cannot constructively give approval or otherwise to what the Minister has in mind.
  I am sure that much thought has been devoted to the new principle of giving the most subsidy to those who do best. But none of the details appear in the Bill, whereas at the time of our debates on the 1962 Act the correspondence between the Government and the industry was put in the Library for all to see, setting out the manner by which aid was to be given. The starting rates of subsidy on the different vessels were all agreed and given to the House, the percentage reduction rates were set out in the Bill, and we knew precisely what we were talking about. We are given nothing tonight except references to the scheme which the Bill enables the Minister to make.
  I have a fairly long experience of subsidies, and my views on subsidy are by

  973
  no means universally shared in farming circles. In my view, it is good in principle to link Government aid to productivity. Therefore, if subsidies are to be given to the fishing industry, and if this is the way in which it is proposed to carry the industry along, I do not quarrel with the principle of the Government's plans. But I am by no means convinced that this is the right way, and I am certain that the Government's plans would not work as they want them to work if imports, most of them heavily subsidised, were allowed to carry on flooding in.
  Unless the Government can steel themselves to control imports effectively, the same will happen with the fishing subsidies as has happened with some farming subsidies: the amount paid in subsidy may rise but the incomes of those for whom the subsidy is intended will fall.
  Neither the old system of subsidies nor the new one can possibly achieve its objective so long as the amount of fish sent for making into meal rockets upwards as it has done this year—a fourfold increase at Hull and tenfold at Grimsby. There is no hope for the right hon. Gentleman's new ideas so long as imports are allowed to rise as they have—18 per cent. in the first quarter of this year compared with the same period a year ago.
  The right hon. Gentleman will remind me, no doubt—I am surprised that he has not done so already, and I congratulate him on his tolerance—of the 10 per cent. duty on frozen fillets which he announced today. My hon. Friend the Member for North Fylde (Mr. Clegg) thinks that this is a move in the right direction. Broadly, I agree, but I am by no means convinced that it is adequate. For instance, what is to stop a country which is at present sending imports to us merely subsidising further by 10 per cent., paying the 10 per cent. duty, and coming back precisely to where we are now?
  I must say that the right hon. Gentleman chose a slightly unusual method for announcing an important step of this kind. I mean no discourtesy to him, but one would expect an announcement about an import duty to be made by the President of the Board of Trade. Second, will he tell us whether the action which
  974
  he has taken is unilateral, or has it been taken within the framework of the E.F.T.A.? Is he satisfied that the action which he has announced is not in breach of our E.F.T.A. agreements? We ought to have that matter squarely on the record.
  Both hon. Gentlemen opposite who come from Hull have said that the prospect of a change in the subsidy system has acted as a tonic to the industry—either a tonic or a spur, which comes to much the same. I beg leave to doubt that it has done that. What is still lacking in the industry is confidence. Until we see the scheme, trawler owners do not know what they will receive, and they are extremely hesitant to invest because they have not the faintest idea of what is likely to come to them.
  Mr. McNamara: The hon. Gentleman seems to think that confidence can only be expressed by the owners. The workers in the industry have an important place in our considerations, and the unions have warmly welcomed the Government's proposals.
  Mr. Stodart: The giving of a welcome does not necessarily mean that confidence is there as well. All I am quarrelling with is the suggestion that the industry is bursting with confidence. I am a little doubtful about it.
  We now know a little of the detail of how the subsidy is to be calculated, but it is a complicated subject and it would be absurd for me to try to comment on it or criticise it now before we see the scheme in black and white.
  Mr. James Johnson: Has not Mr. Austen Laing, the spokesman for the B.T.F., warmly welcomed the proposal and said that it is a step forward? If that is not an expression of some confidence—giving a welcome and recognising it as a step forward in the industry—I do not know what confidence is.
  Mr. Stodart: I have a suspicion that Mr. Austen Laing's confidence would probably depend on the absolute certainty that, in addition to the scheme, imports would be firmly controlled. We are by no means certain of this, even with a 10 per cent. duty, for the reasons I have given.
  A point made by my hon. Friend the Member for North Fylde rang a bell

  975
  in my ear. He spoke about the uncertainties of markets, of fish landing on a good market and then landing on a bad market. Knowing the uncertainty of selling fatstock, when one makes shillings per cwt. more if one is number five in the draw as compared with being number 15, I can understand his feelings.
  The hon. Member for Aberdeen, South (Mr. Dewar) and my hon. Friend the Member for North Angus and Mearns (Mr. Buchanan-Smith) raised the question, which I wish to emphasise, of our being satisfied that the trawler fleet in Scotland will receive a proportion of the new subsidy equivalent to its share in the profits made by the British fleet. It is of the utmost importance that it should, because, although I fully appreciate the importance of a profitable fishing industry to Hull, Grimsby and other English ports, there would be a catastrophic effect on Aberdeen or Granton if the industry there went into a severe decline. This was a point which the right hon. Gentleman made early in his speech.
  I should like to say something about the position of the inshore fleet. No debate on fishing would be complete without a mention of pilchards, and normally we get it. I could understand the anxiety expressed by my hon. Friend the Member for St. Ives (Mr. Nott). I have refreshed my memory on what the Minister said on 8th July, when he pointed out that the inshore fleet had done much better than the trawler fleet, but that to encourage expansion subsidies would be maintained during the coming year. He added:
  "There is no question of cutting subsidies for the inshore fleet."—[OFFICIAL REPORT, 8th July. 1968; Vol. 768, c. 58.]
  The right hon. Gentleman should leave no ambiguity on that point. I presume that he meant that there was no intention of cutting them in the coming year, because that was the context of the previous sentence. He knows very well that there was no timetable similar to that laid down for trawlers suggested by the Fleck Committee or included in the 1962 Act. But percentage cuts in operating subsidies have been made, and there have been very severe ones since 1964. If they were to continue, the inshore fleet
  976
  would quickly find itself at a considerable disadvantage as compared with the trawlers.
  I have said that if the Government introduce legislation to help the fishing industry out of its difficulties we should do nothing to delay its progress. I believe that my right hon. Friend the Member for Grantham (Mr. Godber) has also said that, and it is an assurance that I willingly repeat. If the Ministers will help us in Committee, for example, by letting us have a foolscap draft of what they have in mind, and if they realise that we are genuinely anxious to help the industry and that our questions and Amendments have that object in view, I am sure that we shall make progress. I presume that the Committee would probably start a week on Tuesday. If the right hon. Gentleman found it difficult to let us have a draft next week, I give an assurance that if the Committee were put off for a week we should try to make up time, as a reward for his consideration in letting us have the scheme, which is, after all, the basis of the Bill.
  I realise that in what I have said about being anxious to be of assistance I may well incur the displeasure of the hon. Member for Kingston upon Hull, North (Mr. McNamara), because I recall his saying that he was not a bit happy when a bipartisan approach was made, even to fishing problems. But I rather think, judging from what he said today, that the hon. Member for Kingston upon Hull, West (Mr. James Johnson) would support my qualified welcome to the Bill and sincerely hopes that it will work. I have put fairly and squarely on the record my misgivings, which are largely confined to whether the control of imports announced by the Minister today is adequate. But we certainly hope that the Government's action will be for the benefit of an industry whose interests all hon. Members have at heart.
  7.36 p.m.
  The Under-Secretary of State for Scot-Sand (Mr. Norman Buchan): Never before have I heard a qualified welcome given in such sour tones. Some of the speech of the hon. Member for Edinburgh, West (Mr. Stodart) was a little at variance with the general welcome given to the Bill from both sides of the House. If my hon. Friend the Member for Kingston upon Hull, North (Mr. McNamara)

  977
  complains about bipartisanship, he is usually helped by the hon. Gentleman, who ensures that it does not occur.
  The hon. Gentleman said that the main difference between the Bill and the Fleck policy was that we were placing the Opposition at a disadvantage, because we did not have the full details in the Bill. I believe that the main difference between this and the 1962 Bill is that though the then Government had the details in the Bill what it contained was progressive reductions, while we are concerned with strengthening the position of the fishing industry over the next five years by giving a guarantee of a subsidy related to earnings. The reason that the scheme is not in the Bill is that it is important that we discuss as fully as possible what form it should finally take, against the background of the necessity for speed. I should have thought that hon. Members opposite would accept that. We want to introduce the scheme as quickly as possible, and the simplest way is to get the Bill through.
  The hon. Gentleman is being a little disingenuous when he suggests that he does not have some notion of the nature of the discussions going on with the trawler-men, because examples have been published. There was a headline in The Times of 31st October saying, "Trawler-men welcome Government backing". I do not know what hon. Members opposite mean when they say that though something has been welcomed, that does not necessarily mean that there is confidence. The report underneath that heading says:
  "The new Bill to give continued support to the deep sea fishing industry referred to in the Queen's Speech yesterday, was warmly welcomed by the British Trawlers' Federation last night. Austen Laing, director of the Federation, said the continuing subsidy and the general approach to the problems of the industry were appreciated and would probably contribute to re-structuring."
  The report outlined some of the points the Federation seems to think we have been discussing. In view of that and the statements by my right hon. Friend outlining the basic approach, based on efficiency and the concept of added value, the hon. Gentleman is disingenuous to say that there is no inkling of what the scheme may eventually contain.
  There has been a general acceptance by both the British Trawler Federation and the Scottish Trawler Federation that the
  978
  new subsidy proposal should be linked to efficiency. I was surprised that someone thought that Aberdeen might have missed out. Aberdeen trawler-men and the Scottish Trawler Federation made quite sure that their points of view were made known by meeting me in Edinburgh.
  Mr. Stodart: It is not disingenuousness on my part. I returned to this country only on Monday. I could not get The Times and its report of the Queen's Speech abroad. I wish to ask the hon. Gentleman whether the welcome to which he referred has not been conditioned by the control of imports, to which he did not refer.
  Mr. Buchan: Not in The Times. I am sorry, but I cannot keep up with the hon. Gentleman's perambulations in various parts. I would, however, refer him to that issue of The Times, which was dated 31st October.
  One of the great pleasures about fishing debates is that, no matter what Order or Bill is before us, we generally have a very thorough investigation of the whole industry. I may have to stray a little out of the context of the Bill in order to deal with some of the points raised. This is what gives such a debate its own peculiar pleasure and salty flavour.
  Mr. Speaker: Order. Mr. Speaker loves the fishing industry, but he has noted the warning.
  Mr. Buchan: That was a self-imposed order. I will do my best, Mr. Speaker, to remain in order. As to whether or not we give an additional outline of the draft scheme in advance, I am advised that we cannot bring the scheme forward until the Bill has received the Royal Assent. We cannot put it before Parliament for an affirmative Resolution until then. But this is not a consideration that prevents us from saying that we will go into the scheme. We are considering a whole number of details with the industry, and when they are settled we will consider the possibility of making an announcement to meet the point raised by the hon. Member for Edinburgh, West and others.
  Subjects raised in the discussion were the basic formula and the global sum, and I have been asked about the effect of the new level of subsidy on crews' earnings. Subsidy earnings are at present

  979
  taken into account by means of a formula agreed between the parties in the industry for calculating the earnings of the voyage which qualify for poundage. Under the new arrangement subsidy earnings will not be related directly to particular voyages. It will be a matter for negotiation within the industry as to the proportion that the subsidy will bear to gross earnings. When the subsidy earnings will be paid is again a matter for negotiation between the parties.
  The point was raised as to the effects of this on the Scottish trawler position. My hon. Friend the Member for Aberdeen, South, in his usual extremely skilful fashion, has put a careful slide-rule over the figures for the past. He suggests that if the formula had been in use over the years 1964 to 1966 the Scottish deep sea fleet would have had less aid than in historical fact it had under the 1962 Act. This is marginally true. However, it is based on certain assumptions and we do not accept the assumptions. One is that the history of 1964 to 1966 would be repeated exactly. The distribution formula will have the effect suggested only if the Scottish deep sea fleet is in future and in general less successful in producing the value added that we have been talking about, and, incidentally if it is more profitable. One of the bases of the argument is that it will be more efficient. If it is more efficient it will benefit and not lose by this scheme. So it does not seem that my hon. Friend need have anxiety on that score. The more efficient the fleet is the better it will do.
  Mr. Dewar: On the basis of figures that I have, in 1967, which was by far the most successful year in comparative terms, the Scottish trawler fleet produced 49 per cent. of the total profit of the British fleet, but the gap between what it got as a proportion of the subsidy and what it contributed as a proportion of operating profit widened. So I am not happy when my hon. Friend says that the better it does the more it will receive.
  Mr. Buchan: I know the point, and I know that my hon. Friend is not happy about it, but it is based on the conditions as they existed then and other factors which have been taken into consideration. I think that the comparative profit shown by that section of the fleet
  980
  will be continued in the future and that it will benefit from the new basis.
  That having been said, the Federation has its own ideas, and very powerfully puts them forward, as to how the money should be distributed. We shall be giving full consideration to the views of the industry, including those of the Scottish Trawler Federation, before deciding what should be put in the statutory scheme. I do not think that hon. Members or the industry will want to interfere with this concept of full discussion and careful attention to the views expressed.
  Mr. Stodart: The hon. Gentleman has said that the proposals have been welcomed by the British Trawler Federation. Have they been welcomed by the Scottish Trawler Federation?
  Mr. Buchan: The Scottish Trawler Federation is very happy that the scheme should be based upon efficiency because it believes, correctly, that it is very efficient. That is not to say that it has not put forward in detail bases on which the formula should be calculated slightly different from those put forward by other sections of the industry and the Government in discussion. That is true, but by and large it accepts that the scheme should be based on efficiency. What it is questioning are some of the points that might be suggested by others for a criterion of efficiency.
  Some of my hon. Friends have wondered whether the wage aspect would be affected by the criterion. We can see the reason for the exclusion of a criterion because of its effect on safety factors or because we do not want to have a written-in squeeze upon wages. If there is an increase in wage costs, it will decrease the operating profits by the amount of that increase. So the two will balance, and the value-added sum which draws the subsidy will be the same. It will not affect the entitlement of an individual vessel. The division of subsidy as between profits retained by the company and crew earnings is a matter for negotiation between the two parties.
  Reference was made to the inshore fleet. It is not of itself covered by this scheme, but I repeat the assurance that the new subsidy arrangements will not affect the inshore and herring fleets. We announced on 15th May that the operating subsidies for the fleets which

  981
  are not subject to automatic reduction would continue to be reviewed annually in the light of their profitability. In the review the rates of subsidy were left unchanged.
  The subject of the White Fish Authority was raised both for praise and for question. This is why we have introduced an allowance for levy increase in the Bill.
  The hon. Member for Fife, East (Sir J. Gilmour) raised the question of research expenditure. This is one reason why we want to allow the White Fish Authority to raise more money in this way. The Authority has built up a substantial research and development programme the cost of which is at present shared about 50-50 between the Authority and the Treasury. It is clear that there is still a rôle for the White Fish Authority to play in this respect.
  I am aware of the references that were made to the White Fish Authority in the report of the Fisheries Sub-Committee of the Select Committee. The Sub-Committee was completely concerned with the English and Welsh side, and suggested that there should be a further inquiry.
  We are ready to consider any further proposal by the Select Committee. I do not want to prejudge such an inquiry but I am satisfied that the Authority has a useful function to perform. That function is shared, both in costs and research, by the Government. We sometimes forget how much additional money the Government put into research expenditure. In this case, it is about £1½ million a year. We have research stations at Torry and elsewhere. A fishery research vessel was launched this year and another is under construction—in a Scottish yard, I am pleased to say—for the Ministry of Agriculture.
  Few of the questions raised in debate seem to have been related to the Bill and, as I tried to explain to Mr. Speaker, I am in some difficulty in answering them while trying to stick closely to the Bill. I agree that there is no mention of the minimum price scheme in the Bill but perhaps that is an accident of drafting. It has certainly been very much discussed today.
  It will fall to my right hon. Friends to consider any scheme submitted by the
  982
  Authority and also any objections. It would be wrong for me to comment further now, but if the Authority wishes us to consider such a scheme, we will do so. However, it is worth remembering that it is not the unanimous view in the industry that such a scheme would be correct or viable. There is still opposition to it, and not only on the financial implication.
  Then there is the question of frozen fillet import duties. I thought that this was raised with a little touch of sourness. My right hon. Friend makes a welcome announcement. We have been hammered on the subject for several months. The last time I spoke about fishing in this House I was hammered because I could not announce an import duty. I have been asked why it was announced in this way today in the House. It was because we wanted to tell the House and the nation the decision when it was taken and surely the House of Commons is the proper place for that.
  I was also asked why it should have been made by my right hon. Friend the Minister of Agriculture, Fisheries and Food instead of by my right hon. Friend the President of the Board of Trade but, frankly, I do not think that that is a very important matter. The issue is, after all, of importance mainly to the fishing industry and it will surely have been brought more sharply to the attention of those concerned by the fact that it was announced by my right hon. Friend the Minister of Agriculture, Fisheries and Food.
  I have been asked whether the 10 per cent. duty is to be on all fish or on frozen fillets or on imports in excess of 24,000 tons. The duty is to be on frozen fillets. In effect, we shall be going back to the position as it was before these fillets were bracketed with industrial imports in the original E.F.T.A. Agreement under Article 59.
  Dame Irene Ward: There has been much detail about these frozen fillets. For the knowledge of the general public, can the hon. Gentleman tell us how much increase per fillet will accrue from the 10 per cent. import duty?
  Mr. Buchan: Does the hon. Lady mean per individual fillet?
  Dame Irene Ward: Yes.
  Mr. Buchan: Presumably it would be 10 per cent. of the retail cost, the price of the fillet would be arrived at by dividing by the number of fillets the total cost of selling these fillets.
  Dame Irene Ward: But it must have been properly worked out to see whether it will really protect our fishing industry. I do not know whether it will protect it unless I know what the additional cost on the foreign individual frozen fillet is going to be.
  Mr. Buchan: The price is, of course, 10 per cent. or 2s. in the £. Perhaps that helps the hon. Lady. The point here centres on the figure of 24,000 tons, and whether the landings from abroad go over that figure.
  Dame Irene Ward: It is a muddle.
  Mr. Buchan: It is not really a muddle. It is part of our relationship with E.F.T.A. and was fully discussed within the E.F.T.A. machinery.
  It is difficult to predict the effect which the tariff will have in reducing imports. Naturally, the imports fluctuate from month to month and a large proportion are contracted for in advance. It will take some time before the effects of the new tariff are fully apparent and we shall keep the position under continuous review to see whether further action is needed.
  Several hon. Members asked about longer-term measures to control unfair imports. We are very conscious of this whole general problem. As a trading nation, we do not move lightly into this kind of decision and we certainly did not do so in the case of frozen fillets. We must continually review this within the context of international trade.
  Hon. Members have raised the case of the two Scottish skippers who were convicted of illegal fishing within the Isle of Man three mile fishery limit. The Isle of Man byelaw of 1965 prohibits fishing by vessels over 50 ft. within the three mile limit. There is little difference in principle between this byelaw and those we operate for waters off the Scottish coast. The Isle of Man authorities have not rigidly enforced the byelaw until recently but this does not mean that they were not entitled to do so. They gave ample warning that it would be enforced. I do not want to go into this matter more
  984
  deeply but I can give the welcome news that, despite the convictions, the two boats concerned have had a very successful season—in Isle of Man waters.
  The question of trawler safety was an essential part of the debate. Hon. Members will have seen the decision announced by one large company, Associated Fisheries, to instruct skippers not to fish off the North of Iceland in the winter months. I understand that other companies are considering similar instructions.
  Mr. Wall: Was this a blanket decision that they would not fish or that they would not fish until they had had stability tests?
  Mr. Buchan: I need notice of that question, which raises an important point, and I will look into it. But this decision reflects the management's concern for the: safety of the crews. It has been taken as a result of the Court of Inquiry into the tragic loss of three trawlers last winter. My right hon. Friend the President of the Board of Trade has already announced that we accept the interim Report of the Court of Inquiry into trawler safety, in which it recommended that a weather advisory ship should be provided off the North of Iceland on an experimental basis. Arangements are in hand to carry out that recommendation.
  In the circumstances, it will be necessary for my right hon. Friend to consider whether any change in the arrangements needs to be made and this he is doing urgently. It is not possible for me to say more now about these more recent developments, except that I will take note of the points put forward by the hon. Member for North Fylde (Mr. Clegg) and others about technical developments and their possible cost, and I shall ensure that these points are brought to the attention of the President of the Board of Trade.
  I was asked whether the new scheme will enable older vessels to be more profitable. There will be no discrimination between classes of vessels but, of course, older vessels are in general less profitable. The more modern a boat and the better equipped it is, the better its landings and the higher its profits are likely to be compared with the older vessels.

  985
  The hon. Member for St. Ives (Mr. Nott) has apologised because he cannot remain for the rest of the debate, since he has another engagement, and I thank him for his courtesy in explaining that. As I have pointed out, this scheme does not mean that the inshore subsidy will be reduced. He asked why there was no mention in Clause 15 of Crustacea such as lobsters, crabs and crayfish. The short answer is that, for Crustacea, unlike molluscs, there is no known way of rearing them within the limits of an area suitable for an order of this kind.
  We understand the concern of the Association of Sea Fisheries Committees about the effect of skin-diving for shellfish on their conservation, but it would not really help to try to apply to Crustacea these provisions which are appropriate only for oysters and other molluscs capable of being reared within a delimited area.
  The hon. Gentleman was not so much concerned about holiday visitors but about professional skin divers. Sea Fishery Committee representatives concerned with the problem off the south and west coasts of England and Wales discussed the matter very fully with the Ministry of Agriculture, Fisheries and Food and undertook to think further about it in the light of that discussion. A suitable byelaw was one possibility which was mentioned, but I cannot take that thought any further tonight, for it will be for my right hon. Friend to consider any byelaw proposal on its merits and in the light of any objections.
  We discussed this matter closely with the Sea Fishery Committee which works closely with the Ministry and I do not think that some of the implied suggestions of its not always working closely with us were altogether fair. However, I welcomed the close analysis by the hon. Member for St. Ives of its possible role. I do not think that we could accept his request to use the Bill as a means for getting a subsidy for processing plants. That would be a matter for the President of the Board of Trade and the paraphernalia of investment grants and so on which are under his control. We already have power to regulate the size of shellfish which may be landed.
  I think that covers most of the questions. The hon. Member for North Angus and Mearns made one or two
  986
  points of theory, as did the hon. Member for Edinburgh, West, going so far as to suggest that if we pushed up food prices, we could solve the problem of fish prices. We ought to look at that kind of proposal with a great deal of care.
  I was asked about the administrative cost of the Bill. The Departments have already examined this aspect and have considered profit and loss returns. They have to do this in respect of individual vessels anyway and under the present system they make many payments for individual vessels in the course of a year, so that a great deal of the work is already done and will be undertaken under the same umbrella. Nevertheless, I assure hon. Members that I look for some savings in administrative costs which will be an added contribution to the industry.
  Mr. Deputy Speaker, you have been very patient with a speech which necessarily has had to go far beyond the remit enclosed by the Bill itself.
  Mr. McNamara: I realise that the debate has been very wide-ranging, but my hon. Friend has not answered one specific question which I asked and which was about the Bill, although that may have been an oversight on my part. It arises from the recent Court of Inquiry and the report and the recommendation about the marking of life-saving equipment. I asked whether Clause 5 specifically covered that.
  Mr. Buchan: I should like to have a look at that question.
  I particularly welcome the fact that this is the first Bill to be brought before the House in this Session. That is not only a tribute to the fishermen, to whom tribute has been paid this evening, but a recognition of the importance the Government give to this industry. In general, the Bill has had a warm welcome. I am confident, as the Chairman of the British Trawler Federation seems confident, that it marks at any rate the possibility of a new era for our fishing industry so that it can play its full rôle in the national recovery which is now taking place.
  Question put and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Committee of the whole House.—[Mr. Harper.]
  Committee Tomorrow.

  SEA FISHERIES [MONEY]
  Queen's Recommendation having been signified—
  Resolved,
  That, for the purposes of any Act of the present Session to make further provision with respect to the subsidies payable to, and the levies which may be imposed on, the white fish and herring industries, it is expedient to authorise the payment out of moneys provided by Parliament of any increase in the sums so payable under any other enactment which is attributable to provisions of that Act relating to subsidies in respect of white fish and herring.—[Mr. Hoy.]

  EXPIRING LAWS CONTINUANCE BILL
  Read a Second time.
  Bill committed to a Committee of the whole House.—[Mr. Harper.]
  Committee Tomorrow.

  EXPIRING LAWS CONTINUANCE [MONEY]
  Queen's Recommendation having been signified—
  Resolved,
  That, for the purposes of any Act of the present Session to continue certain expiring laws, it is expedient to authorise the payment out of moneys provided by Parliament of such expenses as may be occasioned by the continuance of section 3 of the Emergency Laws (Repeal) Act, 1959 and Part I of, and Schedule to, the Commonwealth Immigrants Act, 1962 till the end of December, 1969, and of Part VII of the Licensing Act, 1964 till the end of March, 1970, being expenses which under any Act are to be paid out of moneys so provided.—[Mr. Taverne.]

  PRIVILEGES
  Committee of Privileges to consist of Fifteen Members:
  The Attorney General, Mr. Nigel Birch, Mr. Boyd-Carpenter, Mr. Patrick Gordon Walker, Mr. James Griffiths, Mr. Edward Heath, Mr. Selwyn Lloyd, Mr. Charles Pannell, Mr. Fred Peart, Mr. Duncan Sandys, Mr. Shinwell, Mr. George Strauss, Mr. Jeremy Thorpe, Mr. Turton, and Mr. Arthur Woodburn:
  Power to send for persons, papers and records:
  Six to be the Quorum.—[Mr. Harper.]

  SCOTLAND (REGISTERED TEACHERS)
  8.6 p.m.
  Mr. Ian MacArthur: I beg to move,
  That the Schools (Scotland) Code (Amendment No. 1) Regulations, 1968 (S.I., 1968, No. 1055), dated 2nd July, 1968, a copy of which was laid before this House on 12th July, in the last Session of Parliament, be withdrawn.
  My hon. Friends and I hoped to move a Prayer on this subject before the Summer Recess. The regulations were laid on 12th July and within a few days thereafter we sought to move a Prayer. I very much regret that the Government did not find time for us to debate these regulations in July before we rose for the Summer Recess. A debate at that time, before the regulations came into operation on 1st August, would have been helpful to the thousands of teachers affected by them and might well have avoided difficulties which some of them still face.
  Our purpose in moving the Prayer is to probe further into the effects of the regulations and to put certain specific questions. I am sure that the Undersecretary will welcome the opportunity to explain the regulations more fully, although he will recognise as I do that some of the ground was covered in an Adjournment debate a few days ago initiated by my hon. Friend the Member for Glasgow, Cathcart (Mr. Edward M. Taylor). Indeed, some of our questions arise from the brief reply to that short but very useful debate.
  The purpose of the regulations is clearly stated in an Explanatory Note which I will read because it puts them into a nutshell:
  "This amendment to the Schools (Scotland) Code 1956 restricts from 1st August 1968 teaching employment in primary schools (other than special schools) to teachers who are either registered or conditionally registered by the General Teaching Council. This restriction applies also in secondary schools and special schools except that, for a period not exceeding five years, authorities are permitted, where the services of a registered or conditionally registered teacher cannot be obtained, to employ some other person on a temporary basis. Such an appointment must however be reported to a reference panel constituted by the Secretary of State; and where it is disapproved by the panel, the employment of the teacher must be

  989
  terminated. In any event the appointment cannot exceed one year without further review by the panel."
  In addition Circular 680 from the Scottish Education Department set out the background to the regulations, pointing out that they arose from the recommendations of the Working Party on Uncertificated Teachers which was appointed by the General Teaching Council. The Working Party's main recommendation was that a category of conditionally registered teachers, should be established whereby uncertificated teachers would have the opportunity of joining the register conditionally, provided that they have fulfilled certain conditions, for example, had served three full terms and had been recommended by their head teacher with the support of the local director of education.
  During the short period of conditional registration, the teacher's qualifications and experience would be reviewed and a decision reached about any further training that should be taken in order to secure full registration. Similar provisions were to apply to future entrants to the profession whose qualifications were found to be only marginally short of the requirements. This is a sensible proposal, tackling the long-standing problem of the uncertificated teacher, with which we have lived for long enough.
  Some uncertificated teachers are good teachers. I say that because there are some certificated teachers who would have pressed for sterner action than is being taken to solve the problem of the uncertificated teacher. I want to emphasise this point. The only failure of some uncertificated teachers is that their professional, paper-type qualifications, are below, perhaps marginally below, the required level. It would be harsh to dismiss them and it would be unwise to require their dismissal when we are short of teachers.
  In his reply to the Adjournment debate to which I referred, the Minister said that 227 uncertificated teachers were regarded as eligible for exceptional admission to the register right away and that a further 857 teachers had been granted conditional registration with the opportunity of acquiring the necessary qualifications for registration. Those teachers would be the last to be admitted to
  990
  the profession in the absence of some conditional provision of this kind.
  I now turn to another effect of these regulations. It is from this that my major questions arise. The Wheatley Committee's Report said, and this was quoted by the Minister the other night:
  "We therefore recommend that registration with the Council be obligatory on all teachers who wish to claim entitlement to the benefits conferred by certificated status."
  As the Explanatory Note, to which I have already referred, makes clear, teaching employment in primary schools is now restricted to teachers who are either registered or conditionally registered. This same restriction applies to secondary schools, and special schools except that for up to five years temporary appointments of non-registered teachers may be made, subject to the agreement of a reference panel. As the House knows, some teachers have not registered with the General Teaching Council. I made it clear in my speech in the recent Adjournment debate that I regarded registration as being in the best interests of the profession and of the individual teacher.
  Further, the registration system is essential for the proper working of the General Teaching. Council, which I am sure all of us support. A number of fully-qualified teachers have not registered with the Council. Their reasons for not registering may not command the support of the Government, or many of my hon. Friends, but I suggest that the problem requires sympathetic handling. Some teachers, perhaps many, have not registered for a variety of reasons. Some, perhaps most, of the qualified but non-registered teachers belong to the Scottish Schoolmasters' Association.
  I do not know whether the Minister has seen the Association's latest letter, but one was sent to Scottish Members of Parliament dated 4th November. That letter opposes the principle of compulsory registration, a point of view which I do not accept. I believe that the principle is right. It is the manner of carrying it out which I question. The Association also sets out various objections to the composition and powers of the General Teaching Council. I suspect that this may be outside the permissible scope of this debate. If the Minister

  991
  can properly make any comment about these objections it would be very helpful. Clarification at this stage might remove some of them. If it is not possible to do this tonight for procedural reasons perhaps the Minister will find another opportunity.
  One of the points raised by the Association relates directly to the regulations. This concerns the vagueness in the sentence:
  "As soon as practicable the Authority shall report the appointment to the reference panel."
  The letter claims that these words "as soon as practicable" are vague and open to abuse. They are certainly vague and as the hon. Gentleman knows I am always suspicious of any imprecise wording in legislation. The law, and that includes regulations of this kind, must be precise. In this instance, the regulations are far from precise. I hops that the Minister will explain what is in his mind in using these words.
  I note that Circular 680 dated 6th May, invited representations or observations on the draft of these regulations. Perhaps the Minister can tell us what representations he received from the Scottish Schoolmasters' Association in reply to that invitation and what discussion he subsequently had with the Association in an attempt to deal with its doubts and objections.
  Some teachers have no doubt refrained from registering for reasons other than those set out by the Scottish Schoolmasters' Association. Some may have moral objections to the principle of registration, reasons which we can respect, even if we happen to disagree with them. Perhaps this debate will give the Minister an opportunity to try and persuade them that it is in the interests of education that the General Teaching Council should be clearly established as a professional body representing all the teaching profession. It might be argued that there is a moral issue in that too.
  One of the most important questions I want to ask is, can the Minister yet tell us how many fully qualified teachers have not registered with the Council? It has been claimed, and it is claimed by the Scottish Schoolmasters' Association this week that the number may be as high as
  992
  between 3,000 and 4,000. I doubt whether the figure is as high as that. The Minister said in reply to the Adjournment debate that the number was "very small indeed". He did not really know, because he made it clear to the House that it was impossible at that stage to get the information.
  It is right that we should insist tonight that the Minister should discover the actual figure. I presume that he could do this by consulting with the Council on the one hand, and local education authorities on the other. It will be astounding if he cannot give us more information tonight. If the figure is small, that is no reason for not trying to persuade his teachers to register. Perhaps the most effective persuasion would be to listen sympathetically to their objections and answer the points they raise. Surely that is a wiser course than appearing to ignore them.
  If, on the other hand, the figure is large, I suggest that the Minister is placing an impossible requirement on local education authorities. He is requiring them to dismiss qualified but unregistered teachers who are subject to dismissal not because of any falling short in their qualifications, but because they happen not to have registered with the Council. I suggest that this requirement cannot be met at a time of teacher shortage if the number involved is really substantial.
  If the Minister's intention is simply to let matters lie and not press the regulations he will turn the regulations into a dead letter, and make a nonsense of future regulations. It is because of that fundamental point, and not because of any objection to the principle behind these regulations, that I move the withdrawal. I trust that the Minister in his reply will be able to put my fears at rest and answer my questions, because if he can do that he will at the same time, reassure those teachers who have not registered that it is in the interests of education that they should do so.
  8.20 p.m.
  Mr. George Lawson: I find it difficult to understand why the Opposition have tabled this Motion. I cannot see them pushing it to a Division in any conceivable circumstances. They have already said that they support the

  993
  Measure from which the regulations stem and that they are much in favour of the General Teaching Council. In fact, they are in favour of registration. They are not quite in favour of the way in which it is done. I listened with care to the hon. Member for Perth and East Perthshire (Mr. MacArthur), but I am not sure that I understand the objection. What is the objection to the way in which this is done? Teachers are now required to register instead of to obtain, as formerly, certification.
  We have all had the matter of certification thrown at us for years. The demand from the teaching profession has been for the abolition of the right of anyone other than a certificated person to be employed in the teaching profession. That is what is being done in the Regulations. It is not to be done at one fell stroke, and I think that the hon. Gentleman agrees that, in fairness, it should not be done in one fell stroke. It is to be done within a stipulated period, and the hon. Gentleman said that this was reasonable.
  As far as I can gather, the objection of the hon. Member for Perth and East Perthshire is to the words "as soon as practicable" in the proposed paragraph (4)(a) in Regulation 3(2) which states that:
  "as soon as practicable the authority shall report the appointment to the reference panel".
  He said that we must always oppose vagueness in legislation. The proposed paragraph (4)(b) of the Regulation 3(2) provides that
  "the authority"—
  that is, the education authority making the appointment—
  "shall forthwith discontinue the appointment if the reference panel"
  to which the conditionally appointed teacher is referred for scrutiny as to his fitness to teach, although not a registered or certificated teacher,
  "having regard to all the relevant circumstances, determine that it shall not be approved".
  The matter is referred to the panel "as soon as practicable". The proposed paragraph (4)(c) provides that
  "if the appointment is not disapproved as aforesaid, the authority may continue it at their discretion for a period of not more than twelve months from the date on which it was made…"
  994
  My understanding of those words is that as from the date when the person was appointed there is a fixed period of one year within which the matter must be settled and, if it is not settled in this time, that person shall cease to be considered fit to continue in his post.
  I cannot understand the cry that there is no time limit. There is a limit of a year. There is a further limitation in the regulations, namely, that even in the secondary school a person who we would now consider to be a non-certificated teacher shall be eliminated over a period of five years. He is being given an opportunity to qualify in the sense of being certificated.
  We have always said that if and when the process of getting rid of non-certificated teachers were adopted, it should be done in such a way as would cause least injury to people who may have devoted many years of their lives to teaching and to the schools relying on such teachers. There are some teachers who are gravely unfit to teach. If they could not measure up to the standards laid down by the General Teaching Council, they should go. However, they should be given the opportunity to see whether they can measure up to those standards. This is what the Regulation does, in a way which places specific limitations on the period within which it shall be carried out.
  We have all been subjected over a considerable time to a bombardment of criticism and worse than criticism of the General Teaching Council. I am sure that nobody in the House would agree with the main criticisms which have been levelled at the Council. For example, who among us would say that the Council should be dominated by teachers and that what might be called non-teaching interests should not have a powerful voice in the Council? The interests of the children must be represented, and I am all for teachers having a strong voice in this matter. They have 25 members out of 44 on the Council. In addition, many of the members of the Council are from the teaching profession. This is one of the objections which give rise to the difficulties with which we are confronted. The difficulty concerning the 3,000 or 4,000 qualified teachers would not arise if it were not for the criticism levelled at the Council.
  Mr. J. Bruce-Gardyne: The hon. Gentleman should not give the impression that all those who are fully qualified and who have declined to register have declined to register simply because of the composition of the General Teaching Council.
  Mr. Lawson: I should be prepared to say that what the hon. Gentleman says is true. Perhaps a lot of people—I do not know whether there are a lot; I doubt whether there are as many as the 3,000 to 4,000 mentioned—do not know why they have not registered. Even such highly educated people as the hon. Gentleman sometimes talks about can be carried away with prejudices and mistaken ideas and blinded to a reasonable examination of what they object to. Anyone in the teaching profession, looking at the matter reasonably, cannot but say that in Scotland the teaching profession has been given what it does not have elsewhere—a large measure of control over its own profession.
  I would like to turn the question round to another side of it. The hon. Member for Perth and East Perthshire said that if at a time when there is a great scarcity of teachers there are 3,000 or 4,000 qualified teachers who have not registered, we cannot turn them out of the profession. Very well. There are times when one must apply the law with a measure of reasonableness and one must think of the consequences.
  On the other side of the picture, however, there may be education authorities who are reluctant at this stage to apply the Regulations with the full force with which they might be applied. There may be education authorities who are hanging on to their non-certificated teachers who, perhaps, could not measure up if they were to go before the reference panel.
  I put it to the hon. Member, and to my hon. Friend the Under-Secretary, that we cannot agree that qualified teachers, who refuse to register, should be treated differently from the non-qualified who are, as it were, covered up by the education authority concerned. In other words, if the position persists whereby a substantial number of qualified teachers refuse to register, they make it impossible reasonably to take action against those teachers who still continue in the
  996
  teaching profession, although they could not measure up to the qualifications. We cannot apply the Regulations both ways. We cannot protect the qualified teachers and say that we cannot turn them out because we need them, and then tell the others that they must get out because the Regulations say so. That would be to defeat our own purpose.
  If the purpose of the teachers, the guides or the leaders of the teaching profession is to achieve a wholly registered profession equivalent to what they used to speak of as certificated teachers, they are standing in the way of their own objective as long as they refuse to be registered.
  Mr. Esmond Wright: Surely, the hon. Member realises that we are imposing an obligation on the local authority to dismiss certificated teachers, who might have 20 or 25 years' experience. It is this threat which is at the centre of our concern.
  Mr. Lawson: I agree. I am saying that the obligation is on the local authority to dismiss teachers who have not registered. Hon. Members are arguing that we cannot—must not—dismiss those qualified teachers who refuse to register because they are so badly needed. We cannot, and we ought not to, expect a local authority not to dismiss them and, at the same time, to dismiss the others.
  If the education authority is expected to apply the Regulations, it must apply them all round. I am sure that the hon. Member for Glasgow, Pollok (Mr. Wright) agrees with me. One would simply be putting the education authority in a position where, much as it might like to, it cannot deal with the one set of teachers because it is stymied with the other. It is absurd for this learned profession of people who shape the thinking of our children to put themselves in this position. The sooner they get themselves out of this position and recognise that they have in the General Teaching Council what they have asked for, years, the better. If some of them do not have 100 per cent. of what they might have asked for, they have got by far the most of it. They have an excellent Teaching Council.
  My advice to the Opposition is to withdraw the Motion and to advise teachers all round to become registered.

  997
  On that basis alone, if they are themselves registered, will they have any legitimate claim to grouse at protection regarding the people who are not yet properly qualified.
  8.33 p.m.
  Mr. John Brewis: The hon. Member for Motherwell (Mr. Lawson) begin his speech by saying that he could not understand why we had put down the Motion. He proceeded to answer that by a number of points which he raised, many of which interested us. I only hope that it will not be thought outside this House that, because we put down the Motion to withdraw the Regulations, which is a procedural device to discuss them, we are against the General Teaching Council or the general principle of registration which evolves from that Council.
  It was this side of the House, when in Government, which set up the Wheatley Committee. I think I am right in saying that, after it reported in 1963, a Bill was on the stocks which was produced by the present Government when they came into power in 1964. There might have been some differences in the Bill, but it was the intention of both sides to produce a Bill establishing a General Teaching Council. Indeed, when it went through the House its principle had support from all quarters.
  There are two important points in these Regulations, first, the question of the uncertificated teachers, of whom we have a considerable number in Scotland at the moment, and secondly the point, which has been made, about the highly qualified teachers who have refused to register.
  I think we have probably paid too little attention, in our previous discussions, particularly in the Adjournment debate, to the question of uncertificated teachers. Some of us who have been educated in independent schools tend to think that the uncertificated teacher is somebody who should be considered quite a good chap. I think our view is coloured by the sort of staff one gets in an independent school, people who probably get university degrees and are highly educated men though they have not been through a teacher training college.
  However, this is not the correct picture at all of the uncertificated teachers in Scottish schools—with, of course, hon-
  998
  ourable exceptions. Most of them are totally unqualified, totally uninterested in what they are doing, and are either leaving teaching as soon as they possibly can or are unable to leave teaching because they cannot get another job. Few of them can keep discipline in the form, and the effect on the morale and patience of the qualified teachers is very, very bad indeed. All in all, though it is a great evil, part-time education is probably better than being taught by the average unqualified teacher.
  These Regulations have already had a dramatic effect on the number of uncertificated teachers in Scottish schools. There were 2,579 in service, but already 1,020 will have to leave the educational service. In this respect the teaching profession has got something to be very thankful for in the General Teaching Council and these Regulations.
  What is also important is the position of the highly qualified, experienced teacher who refuses to register under these Regulations. The first point is, what is the extent of this problem of teachers who have not registered? This we do not know, and this we really want to have the answer to from the Undersecretary of State, because without this answer we are really debating this question in a vacuum.
  As far as I can see from the Digest of Scottish Statistics which came out last month, there were in Scottish public schools and grant-aided schools 39·7 thousand certificated teachers, and we know from the answer which the Undersecretary of State gave to the Adjournment debate that 48·5 thousand have applied for registration. There are a number of certificated teachers in Scotland who are not in service. There are many thousands of married women, retired teachers, teachers who are teaching overseas and for whom registration is really not necessary to continue in their professional career.
  Even making allowance for those who are laggards there seem to be a lot of enthusiasts for registration, and who are registering although they do not appear to need to register at all. It therefore seems to me that the point which is made, for example, by the S.S.A., that the cost of registration, which is £1, is exorbitant and a deterrent, is absolute nonsense. There seem to be a large

  999
  number of people who registered just to get their professional qualification on the register and therefore have the opportunities of the entire system.
  My second point about registration is that for a certificated teacher registration is as of right, it is automatic and qualifications are not considered.
  My third point is whether registration is a limitation on the individual freedom of the teacher. This is a philosophical question which has been answered many times over the last 100 years. Registration secures professional status and professional standards and protects the public from the unqualified. Many professions have adopted registration over the years; for example, doctors, solicitors, dentists, nurses, architects, land agents and engineers. I am sure that it is their professional status and their wish to be numbered among these professions which are important in the minds of the teachers.
  There are objections to registration. It may be too great an interference with the liberty of the individual to take on any trade he wishes. There was, for example, a borderline case two or three years ago involving house agents.
  The public should realise that there is a real danger in children being educated by unqualified teachers which may be equal to the danger, in a different sense, of being treated by an unregistered dentist. Who wastes sympathy on a solicitor who chooses to throw up his livelihood by not paying the fee to renew his practice certificate? Who sympathises with the lorry driver who refuses on conscientious grounds to renew his driving licence?
  Mr. Bruce-Gardyne: I apologise for interrupting my hon. Friend, but there is an important distinction between teachers on the one hand and solicitors and dentists on the other, in that solicitors and dentists are, or may be to a substantial extent, by the nature of their employment self-employed, whereas the teacher is not. Does this not represent a considerable distinction?
  Mr. Brewis: There are a number of professions, for example, engineers and land agents, in which people are not necessarily self-employed. I would think
  1000
  that there are few highly qualified and experienced teachers who are not registered, and in any case, under these Regulations, they have five years in which they can continue to teach in secondary schools, so that they plenty of time in which to make up their minds whether to register or not.
  Mr. Bruce-Gardyne: Primary schools.
  Mr. Brewis: I can assure my hon. Friend who mentions primary schools that a certificated teacher in a primary school who wants a job in a secondary school will not have much difficulty at the present time in getting one. Therefore, we should accept these Regulations, as I am sure we shall, as being to the advantage of the teaching profession and of the public.
  8.44 p.m.
  Mr. William Hannan: I listened with interest to what the hon. Member for Galloway (Mr. Brewis) said. Although I agree with much of what he had to say, I question in my own mind whether, if it were membership of a trade union which was being discussed in the same context, the hon. Gentleman would advance the same argument which he has advanced tonight. It is indicative of a difference in emphasis in the approach of the hon. Member for Galloway and that of the hon. Member for Perth and East Perthshire (Mr. MacArthur). Coming through the speech of the hon. Member for Perth and East Perthshire were the views which have been put forward for some months by the Scottish Schoolmasters' Association. However, even from his speech, I fail to recognise the urgency or justification for putting down a Motion to withdraw the regulations.
  Mr. MacArthur: The hon. Gentleman will appreciate that we tried to get a Prayer debated in July, immediately after the draft Regulations were laid before the House. It is not our fault that so much time has passed. If a debate had been held when we wanted it, a great many of our objections to the Regulations would never have arisen.
  Mr. Hannan: That is as it may be. But the same views came through the speeches of hon. Gentlemen opposite in our debates upstairs about the General Teaching Council.

  1001
  There is a grave misconception among hon. Gentlemen opposite when they make reference to the 1965 Act. Their objections do not arise out of that Act but out of the Training Regulations of 1967. It was in the 1965 Act that responsibility for the certification of teachers was taken from the Secretary of State and placed statutorily on the newly created General Teaching Council. We cannot have two systems of certification, and the responsibility has rested on the General Teaching Council since 1st August of this year under these Regulations.
  In 1961, a number of hon. Gentlemen opposite were at loggerheads with the teaching profession, so much so that, for the first time, the profession became united and held a one-day strike in Glasgow In those days, of course, right hon. and hon. Gentlemen opposite were in office, and they had succeeded in persuading the teaching profession to accept a reduced standard, namely, the entry and acceptance of men teachers for a three-year diploma course on the same basis as that which had prevailed for women.
  Following that, we had the Report of the Wheatley Committee, and part of the answer to the problem referred to by the hon. Member for Glasgow, Pollock (Mr. Wright) is enunciated by that Committee in its Report. It said, first:
  "We think it desirable, therefore, to stress that all existing certificated teachers will have to register with the council, from a date to be determined by it, if they wish to continue to be entitled to the advantages of certification."
  That is what is happening. Later, the Committee said:
  "Our recommendations would lose much of their force if registered teachers did not have the same rights as certificated teachers and unregistered teachers did not have the same disabilities as uncertificated teachers."
  That point has, I think, been largely accepted.
  There is no reason for this Motion at all. The fact is that the Official Opposition have been rather pressurised into this present action because of an Adjournment debate the other night—
  Mr. Mac Arthur: I apologise for interrupting the hon. Gentleman again, but he has grasped the wrong ends of so many sticks that I must do so. The Regulations were laid on 12th July, and we asked to debate a Prayer on 16th July.
  1002
  There was then time for the Government to have allowed that Prayer to be debated before the Summer Recess. The Adjournment debate to which the hon. Gentleman refers had nothing to do with it at all, though it allowed us to cover some of the ground a few days ago. That is the difference between us.
  Mr. Hannan: It is a question of a difference of view. I believe that this Motion would not have been tabled at all but for the Adjournment debate because, in the interval, explanations have become clearer—even to some hon. Members opposite.
  The big problem for some of us is the running sore which has existed over so many years in Scottish education—the employment of uncertificated teachers. Like my hon. Friend the Member for Motherwell (Mr. Lawson), I am more interested in the quality of the teaching than in the status of those who teach. When many professions, such as physiotherapy, radiotherapy, the law, and even the universities, are demanding ever higher qualifications for entry, it is high time to increase the standards in the schools, which provide the most important source of supply of the human material for those various professions. For that reason, the Regulations should be put into effect. To do so is not only in each child's interests but in the interests of the community. This is particularly true of the primary schools and I am glad that the Regulations require that, at least in the primary schools, all teachers must have this certification.
  I will be interested to hear my hon. Friend's reply to some of the figures that have been bandied about, and the talk of thousands of teachers still not registered. It is only a few days since my hon. Friend, replying to the same Adjournment debate said that 45,406 teachers were registered at that time while a further 3,000 applications had been received but not yet processed. One sees from the Scottish Education Department's Report for 1967 that there were 2,579 uncertificated teachers. It is therefore clear that although there have been 1,500 applications for conditional registration, some 1,000 uncertificated teachers have not taken the trouble to apply. This will be held in some quarters to increase the overall problem of teacher supply, and perhaps my hon. Friend can indicate what

  1003
  the increased supply of teachers coming from the training colleges is likely to be in the near future.
  Much more could be said, but one wants to be careful. I want to underline most of what my hon. Friend the Member for Motherwell said. In these matters the community, the consuming public, is far too often neglected. Although the improvement of the status of teachers or members of other professions is desirable in itself, in this case, it is not the most important thing.
  The important thing we have to safeguard is the standard of the teachers in the schools. Among dentists and other specialists we want the best and that is also true of the teaching profession. I hope that the Opposition will withdraw this Motion and allow the Regulations to proceed.
  8.57 p.m.
  Mr. Hector Monro: I am surprised that two such experienced Parliamentarians as the hon. Member for Motherwell (Mr. Lawson) and the hon. Member for Glasgow, Maryhill (Mr. Hannan) should object to our putting down this Motion on this important subject. They know the procedure of the House and they know that the only way to raise an important topic of this kind is to pray against an Order. The fact that tonight we have rather longer time than usual to discuss this Motion should gratify us all. The fact that so many wish to speak is a justification for our putting down the Motion, and the fact that the two hon. Members I have mentioned are keen to hear the Minister's answer shows how valuable this debate is.
  I appreciate that, as the hon. Member for Maryhill said, this matter arises from the training regulations, but it must be discussed in relation to the Order. We discussed the subject at length during the passage of the Bill. My hon. Friends the hon. Hember for Perth and East Perthshire (Mr. MacArthur) and the hon. Member for Galloway (Mr. Brewis) have explained it in great detail. I am told that in my area 100 per cent. of the primary school teachers, and a high proportion of secondary school teachers, have registered. We should support the G.T.C. and see that any reasonable re-
  1004
  gulations are implemented. That is why it is right tonight to discuss these Regulations and to give the Council support. I believe it is correct.
  Tonight we are asking for a progress report in order to allay some of the fears which have been raised over recent months and to give the Minister an opportunity to reply to many points which have been raised in Scotland since the regulations were made. As the hon. Member for Motherwell said, we are most concerned about the children, of whatever age. We are concerned to know that they will not suffer through a reduced standard of education because of fewer teachers, as a result of some having failed to register. As the Minister said in his reply to the Adjournment debate, the number is very small indeed, and it will not have a major detrimental effect on education in Scotland.
  I felt, certainly during the passage of the Bill, very sympathetic towards the uncertificated teachers who over the years, especially in country areas, have done a very good job. I think we have moved only marginally too fast towards asking them to register. I think that skilled and experienced uncertificated teachers will, without difficulty, obtain certification and, through conditional registration, will have no difficulty in carrying on their profession.
  We are not concerned tonight so much with this type of teacher as, perhaps, with those who have disagreed with the principle of compulsory registration. My hon. Friend the Member for Galloway put this point very clearly. I could not put it better. The Regulations must be generally acceptable to the majority. Like my hon. Friend the Member for Galloway, I am certain that the Teaching Council is an advantage to the profession. I am sure that the Regulations will be administered with sympathy.
  On the administration side, I hope that the Council is proceeding to set up the committees and panels which will have to look at this matter in more detail in the future. This is certainly a difficult period for the Council, for teachers, and for local authorities. It is up to us to try to smooth over these difficulties. This debate gives the Minister an opportunity to give those members of the profession who have not registered a lead in the

  1005
  right direction. We should do all that is possible to smooth the path and to ensure that the happiest possible relationships ensue between local authorities, teachers, the Council, and children, in Scotland.
  9.2 p.m.
  Mr. Richard Buchanan: When this Motion was tabled on 15th July, I thought that we would have a hard-hitting debate. I believe that hon. Members opposite are relieved at the passage of time between the tabling of the Motion and this debate. Their views have tempered greatly. I can disagree with hardly anything that has been said by them tonight. I agree with almost everything that the hon. Member for Dumfries (Mr. Monro) said.
  I am stimulated to support my right hon. Friend the Secretary of State because of the circular which has been received from the Scottish Schoolmasters Association. There is nothing unusual about receiving circulars from the Association. Whenever the Government introduce any educational matter, there is a deluge of protest from the Association. It seems to have a permanent drip at the end of its nose. It is time that it got a handkerchief to keep its nose clean. The Association seems determined to promote unrest within the profession in Scotland, unrest which will manifest itself in dissatisfaction with the Government. I believe that this is the only reason why hon. Members opposite propose that the Regulations be withdrawn.
  The circular asks that the Regulations be withdrawn. It accuses the Secretary of State of diluting the profession, of giving teaching status to the unqualified. It says that there is no control over entry into the profession. This is complete nonsense. The Council is democratic. Every teacher has a vote for the Council. The rights of minorities are preserved—primary teaching, secondary teaching, further education. It may be that there are too many headmasters on the Council, but that is a matter of degree and not of principle. The profession is not being diluted. The very essence of these regulations is that there is now control over that which hitherto was uncontrollable.
  The hon. Member for Perth and East Perthshire (Mr. MacArthur) commented that the expression
  "as soon as practicable"
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  is ambiguous. I suppose that it is, but in answer to a Question last week my right hon. Friend said that there was only one local authority out of 35 which had abused the Regulations, and the very existence of the Regulations had given one association of teachers the opportunity to challenge that abuse in the courts.
  In my view, the Regulations are entirely necessary. The Teaching Council (Scotland) Act, 1965, created the General Teaching Council, the first of its kind in the world. Being the first, it will inevitably have teething troubles if it is to have teeth at all. As my hon. Friend the Member for Maryhill (Mr. Hannan) said, the Council was charged with keeping a register of fully qualified teachers, and registration with the Council replaces certification.
  I cannot emphasise too much the point made by my hon. Friend the Member for Maryhill that by any attempt to amend the Regulations we should simply go back to the situation before August, 1968. Between April and August, 1968, there were no barriers put in the way of authorities which wished to employ the most unsuitable persons in schools, and many of them did. No qualifications of any kind were specified, and unregistered teachers or persons whose own education was sadly deficient, who were a menace to the educational future of the pupils under their care, were in many instances employed in our schools in the guise of teachers.
  It is a sad fact that everyone imagines that he or she can teach. This is one of the causes of the exploitation of the profession and one reason why the status of teachers is much lower that it should be. The most influential and responsible part of the profession was just not prepared to accept such an unsatisfactory state of affairs, and it is that state of affairs which is being rectified by the first amending Regulation. The Regulations severely curtail the freedom of educational authorities to employ any Tom, Dick or Harry in the guise of teacher.
  Again, as my hon. Friend the Member for Maryhill said, the Regulations ensure to a great extent that the parents of

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  Scotland would not be deluded into thinking that their children were being educated when, in fact, they were simply in the care of child minders.
  Hon. Members opposite have asked questions about the reference panels. We can see that the reference panels are working and the General Teaching Council is working. The reference panels, each with a representative of the authority, a representative of the teachers and an independent chairman, have the job of scrutinising qualifications for registration or conditional registration and of disapproving the employment of anyone who has nothing to contribute to the educational needs of our children. In the primary schools we are well on the way to having a fully qualified profession. The Regulations go even further. If people do not have qualifications for full registration, they must have them for conditional registration.
  Those who do not understand the Regulations, or do not wish to understand them, have represented that conditional registration constitutes a monstrous dilution of the profession. But what are the facts? Before the advent of registration, an unqualified teacher could carry on teaching year after year without any pressure being brought to bear on him or her to become a full member of the profession. Now, provided such a teacher overcomes the first hurdle of obtaining a satisfactory report from the head teacher and director of education, he or she will be given all possible assistance and a reasonable, if necessarily limited, time to obtain the full qualifications, or be compelled to seek employment outwith a profession of which he or she has no intention of becoming a full and qualified member. Could anything be more reasonable? I do not think that more reasonable Regulations could be put forward.
  Therefore, instead of having a so-called profession which employing authorities can dilute at will, without reference to members of the profession, the teachers of Scotland, thanks to the Regulations being decried by some hon. Members opposite and by the Scottish Schoolmasters Association, are well on the way to having a real profession of the fully qualified. In the interim period, they can exercise a close scrutiny and
  1008
  control over the employment of those who have not fully qualified, through their representatives on the General Teaching Council and reference panels, and through the head teachers, who are called on to give reports on those who apply for conditional registration.
  If the Regulations are withdrawn—and I think that hon. Members opposite are terrified lest that should happen—we shall return to the pre-August position, in which teachers had no control over the unqualified or the dilutee, and education authorities could and did employ anyone, no matter how unsuitable, as a teacher. Therefore, those who would have the Regulations withdrawn are ignorant of the import of these and associated regulations.
  Perhaps I am being too kind to the opponents of the Regulations. Perhaps they realise that their annulment would restore the pre-August position, except that teachers would then have the expense and disciplinary burden of registration without the corresponding benefit of being members of a fully qualified, and therefore respected, profession of standing in the community. The vast majority of reasonable and responsible members of the Scottish teaching profession are behind the Government in the Regulations. The tiny, disruptive minority, distorting and distrusting everything that is done, are doing the profession no good.
  9.13 p.m.
  Mr. J. Bruce-Gardyne: I listened with interest to what the hon. Member for Glasgow, Springburn (Mr. Buchanan) and Glasgow, Maryhill (Mr. Hannan) said about the timing of the Prayer, and I was a little astonished, because a Prayer was put down against the Regulations at the first possible opportunity, as soon as they were tabled. They are Regulations of no moderate significance.
  Mr. Buchanan: I said that hon. Members put the Prayer down on 15th July, but that they are very grateful for the interlude to modify their views.
  Mr. Bruce-Gardyne: I apologise to the hon. Gentleman. I recognise that what he said was that we were glad that there was a long delay, but that is totally untrue as far as I and, I believe, all my hon. Friends are concerned. The reverse

  1009
  is true; we find it outrageous that the Government have not provided time for the discussion of this most important subject. Since the purpose and import of the Regulations, as set out very clearly in the Explanatory Note, is to require local authorities in some instances to dismiss fully qualified, experienced, highly trained and certificated teachers, one would have thought that the Government could have had the courtesy to provide an opportunity to discuss the Prayer before now. The House has been treated disgracefully.
  The discussion so far seems to have had something a little academic about it. Perhaps that is no bad thing of a basically academic subject. However, I am concerned with the situation as I find it in my constituency and also, because of an overlapping domicile, the constituency of my hon. Friend the Member for North Angus and Mearns (Mr. Buchanan-Smith), and with the situation that actually faces us as a result of the passing of the Regulations.
  My hon. Friend the Member for Galloway (Mr. Brewis) said he felt that rather too much attention in our discussion today and the Adjournment debate had been paid to the position of the certificated, qualified teachers who declined to register, as opposed to that of the uncertificated teachers. On the whole I disagree with him. To my mind there has been a conscious attempt, on the part of the Government at any rate, to disregard the position of the highly-qualified certificated teacher under these Regulations, and it is to this exclusively that I shall address my remarks.
  As we have been reminded, during the Adjournment debate the other night the Under-Secretary said very airily that he could:
  "say, with a good deal of confidence, that the number of certificated teachers actually in service in the schools who have not registered must be very small indeed…"—[OFFICIAL REPORT, 22nd Oct.,1968; Vol. 770. c. 1246.]
  We are all concerned about the difficulty that we face of not knowing what the number is. I understand how the difficulty arises. As my hon. Friend the Member for Galloway pointed out, a great many teachers not presently teaching are entitled to register and have registered. The problem is that we have,
  1010
  in effect, an open-ended equation. So we do not have a clear idea of how many highly qualified, properly trained and experienced certificated teachers have declined to register.
  The figure of 3,000–4,000 in the memorandum from the Scottish Schoolmasters' Association seems a wild exaggeration and must include a very large number of teachers who are not currently in teaching. Nevertheless, to my mind the Under-Secretary's comment in the Adjournment debate was wildly at variance with the facts as I see them in my area. From my own experience and the representations made to me, I can say with some confidence that more than a score of fully-qualified, highly experienced, certificated teachers in the County of Angus alone, excluding Dundee, have declined to register. One does not know the exact number, of course, but I give the figure from the representations made to me by the individuals concerned.
  Mr. James Hamilton: Will the hon. Gentleman tell the House the reasons why they have not registered and whether they are members of any teachers' associations?
  Mr. Bruce-Gardyue: If the hon. Gentleman will give me a chance, I shall come to that point. Before doing so I should also make clear that of this score or more known to me, a substantial number—at least a dozen; perhaps more—are currently employed in primary schools. They should, therefore, already have been sacked under the provisions of the regulations by the Angus Education Authority.
  Mr. James Hamilton Mr. James Hamilton rose—
  Mr. Bruce-Gardyne: The hon. Gentleman must allow me to answer his question. What are their reasons? I must say that, from representations they have made to me, I have not found it easy to understand what their objections to registering are. This I freely concede. In many cases I get the impression that it is not so much the nature of the composition of the Teaching Council to which they object, but the fact, to put it more simply, that since they are qualified and are certificated, they do not see the purpose of registering. I accept that this is not a good argument but it is the situation we face.

  1011
  It seems to me that there is a considerable element of bluff about the regulations. I asked my local education authority what he intended to do. I pointed out that, to my knowledge, perhaps 20 or 30 or more teachers in the area have declined to register, for good or bad reasons. The answer, in effect, was, "After you, Claud", as the old phrase had it. In other words the local education authority is waiting to see what others are going to do and it is my impression that that is the attitude of all local education authorities in this situation.
  One is also led to understand that it is the intention of the Scottish Schoolmasters' Association—and I hold no brief for that organisation—to challenge in the courts the first local authority that applies the Regulations against a fully qualified certificated teacher and sacks him. I am further told—I do not know how good the authority is—that it is likely that the Association would win the case. If that were to happen, the Regulations would collapse.
  Mr. Lawson: Is the hon. Gentleman supporting these 20 or more teachers in his area or condemning their action?
  Mr. Bruce-Gardyne: I am trying to set out the facts and to find out how the Government will deal with them. I am not concerned with condemnation or support. But a significant number of teachers in Angus have not registered, although they are fully qualified, and I want to know what is going to happen to them.
  Mr. James Hamilton Mr. James Hamilton rose—
  Mr. Bruce-Gardyne: I hope that the hon. Gentleman will let me get on.
  Mr. James Hamilton: But you have not answered part of my question. You have mentioned 20 teachers and have told us that 12 are primary teachers.
  Mr. Speaker: Order. I have not told the House anything.
  Mr. James Hamilton: I apologise, Mr. Speaker. The hon. Gentleman has told us that 20 teachers or more in his constituency, to his knowledge, have not registered and that 12 are primary teachers. If I understand him correctly,
  1012
  he does not understand why they have not registered. On that basis, I assume that he is opposed to their not registering. Will he tell us whether they are members of a teachers' organisation?
  Mr. Bruce-Gardyne: I apologise to the hon. Gentleman. He did put two questions to me and I forgot to answer the second one. It is an important question. It was put to me by the local members of the Educational Institute whom I saw about the matter. As far as I can tell, the teachers concerned are more or less equally divided between the three major organisations, with one-third being in the Educational Institute of Scotland, one-third in the S.T.A., and one-third in the S.S.A.
  I get the impression that the Government are hoping that the stragglers will gradually come into line, or that, if they do not, they will somehow not be noticed. I can assure the Under-Secretary that, if he thinks that, he is quite wrong. They will not come into line and, from what I have been able to learn, I am sure that they would be noticed.
  I did not agree with my hon. Friend the Member for Galloway when he said that there was a great deal of enthusiasm for registration. That may be true in his area, but I am bound to tell him that it is not in mine. I can tell him from my experience that in Angus there is a marked lack of enthusiasm for registration and, if it is found that there are stragglers who have not registered and who have continued not to register, I have no doubt that there will be many more when the time comes to renew the fee next year.
  In other words, these Regulations may be proved invalid by law or not enforced. If they were not enforced, to judge from our experience in Angus it would mean dismissing teachers with many years of experienced work behind them, teachers with excellent qualifications and records, at a time when there is a serious shortage of teachers.
  There is a possible answer to the Government's dilemma. I suggest that the Under-Secretary takes away these regulations and brings in others with two purposes. One would be to require all teachers entering the profession to register with the General Teaching Council. The second would be to deny to qualified

  1013
  teachers—and I am talking specifically about those qualified teachers to whom I have been devoting my remarks—who refuse to register not their right to teach, but their right to enjoy the results of future wage awards negotiated by the G.T.C.
  Mr. Speaker: On these Regulations, the hon. Gentleman may not discuss the regulations which he wishes the Minister to bring in but which are not before us.
  Mr. Bruce-Gardyne: I apologise, Mr. Speaker. In any case, thanks to your indulgence, I have been able to make the point. If we have to think purely in terms of these Regulations, as opposed to what I have suggested as a possible alternative, we shall land ourselves in an impossible dilemma of enforcement or disregard and, for that reason, I cannot agree that we should proceed very wisely if we approve these Regulations tonight.
  9.28 p.m.
  Miss Margaret Herbison: I do not agree with the criticism made of hon. Members opposite by my hon. Friends for bringing forward this Prayer, because, if nothing else, the debate on this matter of such importance to education, particularly to the future of our children, will show those who are completely opposed to the General Teaching Council what little basis there is in the case against it. For that reason, if for no other, we should thank hon. Members opposite for moving the Prayer.
  I listened with great interest to the hon. Member for South Angus (Mr. Bruce-Gardyne). I waited throughout his interventions in other speeches and during his own to find just where he, as an individual, stood on this issue. I want to find out, if the hon. Member for South Angus opposes these Regulations, what he would put in their place?
  Mr. Bruce-Gardyne: I have told the right hon. Lady.
  Miss Herbison: I am coming to that. It was a good thing for the hon. Member that Mr. Speaker intervened, because if we have this tiny minority among the Scottish teachers who are opposed to these Regulations saying that we are interfering with their freedom now, I can tell him, knowing the teaching profession, having been a member of it for 15 years,
  1014
  that the feeling against these regulations from these people would be as nothing, chicken-feed, compared with the feeling against the kind of Regulations which he suggests we might put in their place.
  Mr. Bruce-Gardyne: All I can say is that to my mind what I was suggesting would be logical, fair and enforceable, whereas the other is not.
  Mr. Speaker: Order. I was kind to the hon. Gentleman just now. He must leave that.
  Miss Herbison: These Regulations are logical and fair and I hope that they will be enforceable. The hon. Member kept asking the Under-Secretary of State what would the Government do if these 20 people in his constituency—
  Mr. Bruce-Gardyne: Or more.
  Miss Herbison: —and the others, and we do not know the numbers, did not register. Incidentally I hope that my hon. Friend can give us the numbers of those who refused to register. It is not the Secretary of State who has to do anything, it is the General Teaching Council. It is of the greatest importance that hon. Members and every teacher in Scotland should now realise that the Secretary of State has nothing to do with certification, that Scotland is the only country in the world where teachers now have real power in their own hands. I am glad that the vast majority of Scottish teachers are proud to have this power. I know that in many other countries they would give almost anything to have it.
  It is for that reason, particularly, that I support these regulations. When the hon. Member was asked a question by one of my hon. Friends, he said that he was not concerned with support or condemnation of those who were taking a line against these Regulations. I had always thought that one of the important functions of Members of Parliament was to try to give leadership and that a Member ought on such vital matters not to sit on the fence.
  If a Member of Parliament feels that this is a good thing, not just for the teaching profession in Scotland, but for the education of our children, then he ought to say to those teachers in his constituency that that is what he believes, and he ought by persuasion to be doing

  1015
  everything he possibly can to get them to register with the General Teaching Council.
  Mr. Bruce-Gardyne: I apologise for interrupting the right hon. Lady again, but I ought to assure her that when these teachers came to see me I did urge them to register.
  Miss Herbison: I am very glad to hear that, but one would never have got that from the "not concerned with condemnation" attitude. I am delighted to hear that the hon. Member has really tried to persuade these teachers to register.
  At present there is one matter of very great importance for the education of children in my constituency.
  It has been said that only one education authority in Scotland had brought no names before the reference panel. But that education authority is the second biggest in Scotland, and it is responsible for the education of many thousands of children. I am sorry to say that it is my own education authority of the County of Lanark.
  I stress a point which my hon. Friend the Member for Motherwell (Mr. Lawson) made. If we support the Scottish Schoolmasters Association or anyone else opposed to registration, we cannot say to any education authority in Scotland, "We shall enforce these Regulations and you will have to bring before a reference panel the names of uncertificated teachers".
  I have been seriously worried for years about the question of uncertificated teachers in our schools. As far as I am aware, the Lanark education authority has had the greatest number of uncertificated teachers. I know that it objected to these Regulations. I expect that, like myself, every Lanarkshire Member had a letter from the Director of Education. I wrote back to him saying that I supported the Regulations completely and could not support the argument against sending to reference panels the names of uncertificated teachers. I hope that the under-Secretary of State will be able to give some information about whether any further decision has been made by the Lanarkshire Education Authority. If not, I should like him to
  1016
  tell us what measures he will take against Lanark education authority to enforce the Regulations.
  I am not only concerned about the status of the teaching profession, which is important. I am one of those who believe that one cannot separate the status of the teaching profession from the provision of the best education facilities for children. They are closely linked. These Regulations give a better status to the teaching profession, and I hope that they will be a source of attraction for some of our best young people to come in to the teaching profession.
  I am glad that we have debated this Prayer. I hope that the Under-Secretary of State will be able to show clearly to the parents and to the teaching profession in Scotland that we are concerned about the education of our children. I believe that the Regulations will greatly help to provide the kind of teaching profession that all of us who are interested in the well-being of our children wish to see.
  9.40 p.m.
  Mr. Alick Buchanan-Smith: I agree with almost everything that the right hon. Lady the Member for Lanarkshire, North (Miss Herbison) said. Despite what the hon. Members for Motherwell (Mr. Lawson) and Glasgow, Maryhill (Mr. Hannan) said, the value of the debate is that it has made clear to people outside where hon. Members stand. One thing which has been made plain is that we all stand behind the General Teaching Council and what it is trying to achieve. The right hon. Lady said that hon. Members must give leadership to their constituents. But we have another function to perform, and that is to represent in the House the views of those constituents who make their views known to hon. Members, whether they agree with them or not. That was why my hon. Friend the Member for South Angus (Mr. Bruce-Gardyne) was entirely right to put forward those views, because that is one of the reasons why we are here.
  At this stage of the debate, there is very little else that can be said and, therefore, I shall be brief. I would, however, like to follow my hon. Friend the Member for South Angus in putting

  1017
  forward views which have been put to me with a certain amount of sincerity by a number of constituents.
  What concerns me is that in the present atmosphere, which I condemn, outside this House among certain sections in relation to the General Teaching Council, the work of the Council and all that we want it to achieve will not be accomplished if things continue as they are at the moment. Therefore, the value of this debate is that it has given us the chance to bring home to the Under-Secretary, as, I am sure, he knows, that one must be aware of what is happening and must accept it; and accepting what is happening, one must seek to overcome the problem in the most constructive possible manner.
  It is an utter mistake to think that those who have spoken to me and who oppose the Council and who refuse to register, and who, therefore, are coming under threat from the Regulations, oppose it because they belong to a certain teachers' association. I hope that this answers the point made by the hon. Member for Bothwell (Mr. James Hamilton). One of the things that I have tried to discover from them is whether they oppose the Council because they belong to one particular teachers' organisation or another.
  I certainly regret and deplore the kind of quarrel and constant bickering that goes on between teachers' organisations in Scotland which is totally against the best interests of education in Scotland. I could not say that too strongly. For the good of education in Scotland, I wish that it would stop and that people would get together in a constructive spirit.
  Many of those who have expressed to me their opposition of the Regulations have done so as a matter of principle. Whether we agree with them or not, let us at least accept that for some of them it is a matter of principle. It is difficult to understand, but one of the main reasons that has been put to me, particularly among older, well-qualified teachers, is that they are having to comply with conditions which did not exist when they first qualified. Whether it is pique to their professional pride I do not know, but let us be quite clear that these views are genuinely held by a number of people.
  1018
  The second thing concerning the teachers' organisations to which the people who object belong—I have found this in my constituency in the County of Angus and in Kincardine, and it is also true in approaches which I have had from teachers in the City of Aberdeen—is that while certain people have not registered, there are also those who have registered but who have done so, as they say, under protest.
  I discovered in Montrose Academy, in my constituency, that in a protest which was made by teachers against registration, although some of them registered only four who protested were members of the S.S.A. I understand that in Aberdeen Academy there was a similar "round robin" and that out of 29 E.I.S. members, 25—or 85 per cent.—signed the protest, whereas of the S.S.A. and S.S.T.A. members together, 38 out of 64—a lower percentage—signed the protest.
  It is extremely important for us to remember that this protest is, first of all, carried forward by people who oppose the Council as a matter of principle, however misguided we consider them to be. Secondly, there are others who are either not registering or are protesting, not because of pressure from a teachers' organisation, but because of their own feelings in the matter. These are important matters which have been put to me genuinely by constituents. They are important facts which, I hope, the Under-Secretary of State will take into account. What I wish is to see this resolved.
  The criticism which I have heard of the General Teaching Council and the whole problem of registration is that there has been a lack of communication between the Council and the profession. I have heard what seems to me a very fair criticism, that there has been lack of communication between the teachers and their organisations themselves. I think this is true, and in other professional organisations, outside the teaching profession, there is lack of communication between the members of the organisations and those leading them. That is another view which has been put to me, and it is, perhaps, one of the reasons why we have this problem, and I hope that this factor may be taken into account.
  9.45 p.m.
  Mr. Esmond Wright: The subject has been so thoroughly canvassed that there is very little to add, but when the Minister replies I would like him to address himself to two questions.
  Before I put those two questions, may I attempt to clarify this issue which my hon. Friend the Member for South Angus (Mr. Bruce-Gardyne) has described as a matter of principle? I am sure that the right hon. Lady the Member for Lanarkshire, North (Miss Herbison) will share my views, because I, too, am or have been a teacher in a slightly different area. I believe that this is a matter not only of principle but, as my hon. Friend the Member for Perth and East Perthshire (Mr. MacArthur) described it, of morality. If we are trying to establish a General Teaching Council which is a truly professional body, then we must expect that there will be some people who do not want, under decree or by order, to have to register with that Council as part of their own professional integrity. This, I believe, is the core of the problem. I do not think it is adequate for the hon. Member for Glasgow, Spring-burn (Mr. Buchanan) to describe this simply as teething troubles. Of course, they are teething troubles, and it may be that there are few teeth that are sore because of the passage of time, but I believe that there remains the question of morality involved in this, and that it is more than a question of principle only.
  Mr. Tam Dalyell: Where is there coercion in this case that is not present with doctors or dentists, or any other professional body?
  Mr. Wright: Because in terms of the Act teachers are required to register with the General Teaching Council. A doctor takes an oath to a cause, which is not merely a profession, but of which that professional body is the voice. I suspect that we are missing this issue here, and a number of the people who have come to me, as they have come to my hon. Friend the Member for South Angus and my hon. Friend the Member for North Angus and Mearns (Mr. Buchanan-Smith), and who have spent thirty years in the profession, do not want to be ordered to take high professional standards. This is part of the very integrity which teachers, I would think, respect.
  Mr. Alex Eadie: What is the difference between them and, for example, a miner who is compelled to wear a hard hat before he goes underground but does not want to and says, "I am not going to wear a hard hat"? If he does not, he does not get underground. What is the difference?
  Mr. Wright: We are now beginning to debate the whole question of what is a profession. What I am trying to suggest is that once we give order we are beginning to deny professional integrity. We could talk in these general terms for a very long time, but let us come to the questions I want to put.
  I should like to hear the Minister's views on this. Will he allow local authorities to dismiss, as, indeed, under the Act they are required to dismiss, qualified teachers simply because they have refused to register? This is where the question of morality comes in, and it is a matter not merely of law, or of this House, but of the fundamental purpose of setting up the General Teaching Council.
  My second question—and I want to shift my ground a little—is, will the Minister protect the public from some of the risks of giving total independence to the General Teaching Council, lest we get into a situation whereby it restricts membership of the teaching profession to those it believes are adequately prepared and trained—for example, products of Scottish schools and Scottish universities—and ban from entry into the Scottish teaching profession those who get their qualifications in, say, England, or in, say, New Zealand, to cite a recent case? Perhaps I am beginning to trespass on to a wider subject, but we must not allow the General Teaching Council, in sheltering its professionalism, to abuse that professionalism. We desperately need in the schools more and better-qualified teachers.
  I do not want to take up the issue of improving or dismissing the uncertificated teacher. Of course, we want to improve standards, but I am frightened of erecting a system whereby we discourage people from entering the profession in Scotland, whether they are educated in Scotland or outside, by the imposition of rigid and provincial standards of entry. In this sense there is a risk in setting up the General Teaching Council, but I believe that enough has been said here tonight

  1021
  to show that from both sides we wish to protect the interests of the teaching profession and see the General Teaching Council as the best way of doing so.
  9.51 p.m.
  Mr. Tam Dalyell: The hon. Member for Glasgow, Pollok (Mr. Wright) has delivered a fascinating speech, In a sense, he has let the cat out of the bag. If it is true that the teachers' real worry is, as I understood him to say, that they were being ordered to do things against their will by some decree, surely it is a reflection of a certain almost petty irritation on the part of teachers who take that attitude. All of us in our working lives have to accept some kind of order.
  Mr. Wright Mr. Wright rose—
  Mr. Dalyell: If the hon. Member wishes me to give way, of course I will. I may have misunderstood him.
  Mr. Wright: I do not know whether you misunderstood me, but I am trying to establish the point that a teacher with a sense of professional integrity who has honoured that by teaching for 30 or 35 years may well, quite legitimately, feel that he does not then by order or by law have to become a member of the General Teaching Council. He is honouring his cause and has done so throughout his life. I am simply saying that many such people have come to me and registered concern.
  Mr. Dalyell: Some of us who have been members of the profession have tried for a long time to get precisely this kind of public recognition, and if it involves some kind of order from outside, this must be accepted, as it is by those who work in universities and in all spheres. I cannot see what the complaint is, other than an insinuation about teachers that I would not for one moment accept.
  Mr. Wright: I do not want to continue this argument, but the parallel with the university makes my case. In order to teach in a university, it is not necessary to become a member of any professional body. It is assumed that one is equipped, trained and has certain standards. It is because, in the past, this has not obtained in the schools that the General Teaching Council was set up.
  Mr. Dalyell: This does not hold at all. There is entry qualification, as the hon. Member for Glasgow, Pollok (Mr. Wright) well knows, and certain rigorous standards must be fulfilled before one can be accepted.
  My hon. Friend has many points to answer, and I would simply like to say that surely, in England, there is the opportunity for a teacher to improve himself, and the last part of the hon. Gentleman's argument seemed to me to be purely fallacious.
  9.55 p.m.
  The Under-Secretary of State for Scotland (Mr. Bruce Millan): I very much welcome the opportunity of debating these regulations tonight. I hope that does not put me in too bad an odour with some of my hon. Friends. A fortnight ago we had an opportunity of discussing these regulations, at least indirectly, in a short Adjournment debate, but I welcome the opportunity of expanding a little on what I said on that occasion. I am also very happy to note that all hon. Members who have spoken support the principle of the Regulations, though I appreciate some of the points of anxiety that have been put to me and will do my best to answer them.
  I think that it would be convenient to remind the House again of the background to the Regulations. Even tonight, despite what was said a fortnight ago, there were misunderstandings about the effect of them.
  Prior to the establishment of the General Teaching Council, the responsibility for establishing requirements for entry to the profession rested entirely with the Secretary of State. It was his responsibility to take care of matters of recognition, probation and discipline, and his control in these matters was exercised through the system of certification.
  However, it was a central feature of the recommendations of the Wheatley Committee that this system should be replaced by one of registration with the Council, and that the Secretary of State should surrender his powers of certification. Thus, effective control over the profession would pass from a Minister of the Crown to a professional body constituted on the same lines as councils in other professions, such as medicine, dentistry, nursing, and the like, subject always to the point, as the Wheatley Committee put it,

  1023
  which I am sure the House will agree we must maintain,
  "…that the ultimate responsibility for the schooling of the nation's children is and must remain that of the Secretary of State."
  The Teaching Council (Scotland) Act, 1965, followed from the recommendations of the Wheatley Committee. It was clear that, if the Council was effectively to take over the responsibilities of the Secretary of State, registration must replace certification as a requirement for employment in primary and secondary schools. The Wheatley Committee recognised that and recommended that registration should be obligatory on all teachers who wished to claim entitlement to the benefits conferred by certificated status.
  It is of crucial importance that we understand the issue clearly, because the long sequence of events initiated by the Wheatley Report has brought us inevitably to the position that, if a teacher wishes to be regarded as qualified in all respects to teach in primary or secondary schools and have the attendant benefits of being so qualified, he must register with the General Teaching Council. Objection to registering because he may dislike some aspect or other of the Council is no more open to him than it would be open to a lawyer to object to taking out a practice certificate from the Law Society of Scotland, or to a doctor to object to registering with the General Medical Council.
  The Regulations preceding the current ones, the Teachers (Education, Training and Registration) (Scotland) Regulations, 1967, which came into operation on 1st April of this year, therefore, prescribed the qualifications required for registration with the Council and took account of the substitution of registration for certification by making an important Amendment to the Schools (Scotland) Code. Prior to 1st April, the Code stipulated that a person appointed to a teaching post in an education authority school should be a certificated teacher; that is, a teacher holding the Secretary of State's certificate of competence to teach.
  The Amendment substituted registration for certification as the normal requirement for such an appointment, and that brought certain disabilities to the certificated teacher, as from 1st April,
  1024
  who did not register. According to the Code, he could no longer retain a permanent appointment. His prospects of promotion, and so on, were restricted by the Regulations which came into operation on 1st April.
  I want to make that clear because it should be understood that, even if the regulations were not accepted—and I see no prospect of it happening—these disabilities to the certificated teacher who has not registered would still remain, because they follow from the previous Regulations and not from those which we are debating tonight.
  The Schools (Scotland) Code (Amendment No. 1) Regulations make a further change as from 1st August. This Amendment prohibits entirely the appointment of unregistered teachers—in other words, those who are neither fully nor conditionally registered—in primary schools and imposes restrictions on their appointment in secondary schools—
  It being Ten o'clock, the debate stood adjourned.
  Ordered,
  That the Proceedings on the Motion relating to Education (Scotland) may be entered upon and proceeded with at this day's Sitting at any hour, though opposed.—[Mr. Concannon.]
  Question again proposed.
  Mr. Millan: As I was saying, the amendment we are now making prohibits entirely the appointment of unregistered teachers in primary schools, and imposes restrictions on their appointment in secondary schools and special schools. While it permits an education authority to continue to make such appointments on a temporary basis in secondary schools, the authority is required by the regulations to submit each appointment to a reference panel set up by the Secretary of State. If the reference panel disapproves the appointment, the authority is required to terminate it forthwith.
  Two additional points are of importance. First of all, as my hon. Friend the Member for Motherwell (Mr. Lawson) pointed out, an appointment cannot be approved for longer than a year in the first instance. Secondly, the whole reference panel system is to extend for no more than five years from 1st August,

  1025
  which means that at the end of that time the position of secondary schools will be the same as the position we have at the present time in the primary schools.
  Mr. Bruce-Gardyne: The Minister is talking about the appointment of teachers, but the Explanatory Note to the Regulations makes it absolutely clear that it does not merely apply to the appointment—it restricts continuing employment. That is the point.
  Mr. Millan: The hon. Gentleman did not listen to my explanation the other evening, and it seems obvious that he does not intend to listen again this evening. However, if he will wait, he will get an explanation of these points, and may conceivably even understand the explanation, though I rather doubt that in view of what he said on a previous occasion.
  What I should like to emphasise is that these regulations—that is to say, the regulations that came into operation on 1st August—made no change at all in the Regulations of 1st April in relation to the permanent appointment of qualified teachers. The Regulations with which we are now dealing are concerned only with the temporary appointments that sometimes have to be made when no properly qualified teachers are available. I therefore hope that it will be clear to the House that the code amendment which came into operation on 1st August did not affect in principle the position of certificated teachers; that is to say, qualified teachers who had obtained their qualifications before the Secretary of State's certificate was replaced by registration with the General Teaching Council.
  By the amendments that came into operation on 1st April, such teachers were required to change over to the new system of registering with the Council in order to retain or secure permanent teaching appointments. That, for them, was the really significant change in the situation. The amendments we are now considering, on the other hand, are directed at quite a different group of people; namely, the unqualified persons, who in no circumstances can be given permanent appointments because they are neither registered nor conditionally registered. This takes us to the problem of what
  1026
  used to be called the uncertificated teacher but who must now more accurately be described as the unqualified teacher—a problem that we have had with us ever since the end of the war, and a problem, also, which has been growing steadily and getting more difficult of solution the longer we have had it.
  In the last session we had about 2,500 uncertificated and unqualified teachers in post—I think that that was the figure quoted by my hon. Friend the Member for Glasgow, Maryhill (Mr. Hannan)—but the General Teaching Council, by introducing a concept of conditional registration, has provided a means whereby the qualification and performance of these teachers can be scrutinised. Those who on the basis of head teachers' reports are regarded as giving satisfactory service and with a certain minimum length of service to their credit are being given the chance to secure full registration. Those who are not in that position, are of course being eliminated from the schools.
  I gave some figures when I spoke about this on 22nd October. I said then that there were 1,599 teachers who had applied for conditional registration and had not withdrawn their application. Of these 227 were regarded as eligible for exceptional admission to the register right away, 857 had been granted conditional registration for a limited period to obtain the necessary qualifications, and 475 were given conditional registration only for an initial period. Therefore the process of eliminating from the schools through the process of conditional registration those whose qualifications to teach are absolutely minimal whether in terms of experience or professional or academic qualification, is going ahead, I think, very satisfactorily.
  So far as those neither registered nor conditionally registered are concerned, we are now dealing with them by the reference panel procedure laid down by the Regulations which we are discussing tonight. One advantage of discussing these Regulations rather late in the day is that I am able to give the House some information about the operation of the reference panels. Perhaps therefore I should bring up to date the information which I gave a fortnight ago. The total number of references to the reference panels constituted under these Regulations by 5th

  1027
  November was 704 and 572 of these have already been dealt with and 132 are still under consideration. If one considers the total number of uncertificated teachers we had in the service last Session and takes account of the process of conditional registration, I think one can see right away that already the vast bulk of the unqualified teachers who are neither registered conditionally nor fully have already been submitted to the reference panels.
  My right hon. Friend the Member for Lanarkshire, North (Miss Herbison) made the point that one authority had not submitted any names to reference panels. There are in fact three authorities in that situation, but the other two are small authorities and I think we can take it that they have no unqualified persons to submit. The other authority is Lanarkshire and we know there must be considerable numbers of unqualified persons there affected by the reference panel procedures laid down in these Regulations. As I understand the Lanarkshire position the appropriate sub-committee of the education committee has taken the decision that these names should be put forward to the reference panel, but that decision, unless it was ratified today, has not yet been ratified by the full education committee.
  If the education authority in Lanarkshire does not submit these names to the reference panels, it will be in default of the Regulations we are discussing. It will be my intention to see that that default does not continue for any longer than is absolutely necessary. I give the undertaking to my right hon. Friend that I shall certainly see that the position in Lanarkshire is taken care of. If the authority does not submit the names, I repeat, it will be in default of the reference panel procedure, and therefore in default of the law.
  I hope I have made clear that when we are talking about these regulations we are talking essentially about the problem of unqualified teachers. I hope, too, I have made clear that any suggestion that we should have in any way avoided or delayed submitting these Regulations, even if that had been possible in face of the obligations under the 1965 Act, would have meant that we would not have been able to deal with this problem of unqualified teachers. My hon. Friend
  1028
  the Member for Glasgow, Springburn (Mr. Buchanan) put this very clearly indeed. Without these Regulations we have no effective way of dealing with the problem of unqualified teachers.
  I come to the second important aspect of this debate. Having said all that, I agree immediately that these regulations now bring out more sharply the position of the certificated teachers who have not registered with the Council. This is a matter which has excited some interest this evening.
  Mr. MacArthur: I am glad that the Under-Secretary intends to deal with this question. I thought for one moment that he did not intend to do so. If there has been any misunderstanding about the scope of these Regulations, I think that he will accept that this arises very largely from the explanatory note at the foot of the Regulations and from paragraph 5 of his own circular, which relate these Regulations directly to the continuing employment of certain teachers. The hon. Gentleman will appreciate that our central concern is with the position of the qualified teacher who is not registered. I am very glad that he is now coming to this question. I do not think that it is irrelevant to these Regulations.
  Mr. Millan: I am not complaining about the fact that there has been a certain confusion about the effect of these Regulations, because it is a rather complicated operation. That was why I thought it was useful as a preliminary to discussing these Regulations to remind hon. Members briefly of the background, because the two sets of Regulations must be read together when we are considering the question which I shall now deal with, namely, the question of the certificated teacher who has not yet registered with the Council.
  As I have already said, from 1st August under the present Regulations the disabilities of having no longer an entitlement to a permanent appointment apply. They have applied under the previous Regulations from 1st April.
  Since we are prohibiting the employment of teachers not registered or conditionally registered in primary schools altogether, and in secondary schools except through the reference panel procedure—this is indispensable to what we are doing with unqualified teachers—we

  1029
  are by these Regulations, therefore, read together with the previous ones, prohibiting the employment of certificated but unregistered teachers altogether in our schools.
  I do not know why hon. Members seem to have taken the attitude that this is some kind of confession or admission. This is absolutely inherent in these regulations. This means, in effect, that when the Regulations go through, local authorities will be under an obligation no longer to employ certificated teachers who are not registered with the Council. Incidentally, even for these teachers the reference panel procedure, which they obviously would not accept, will not be appropriate, because that is not dealing with teachers in this category. So certificated teachers who are not also registered with the Council are no longer eligible 10 be employed in our schools.
  Therefore, there will be an obligation—I say this quite openly; this is what it means, this is what the Government intend it to mean, and this is what the local authorities know it to mean—on local authorities to discontinue the employment of these teachers in their schools.
  This is the logical consequence of the Teaching Council (Scotland) Act, 1965. This was a point which was made by my hon. Friend the Member for Mary-hill and others. We cannot have a General Teaching Council in operation in Scotland unless it insists on 100 per cent. registration. There cannot be two systems operating side by side simultaneously—a system of registration with the Council, on the one hand, and some special privileges still adhering to previously certificated teachers which enable them to carry on without registration with the Council, on the other. This was inherent in the 1965 Act, which had support from all quarters of the House, and every hon. Member who supported the Act must have realised that it was the inevitable consequence.
  The second main point I make in this connection—this is directed to the teachers concerned, the small number who are certificated but not registered—is that the remedy for their position lies within their own hands. All they have to do—it is a formality in their case—is to register, and then the various disabilities which we have discussed disappear en-
  1030
  tirely. Anyone who finds himself in that position has a simple remedy to remove himself from it, namely, to register with the General Teaching Council.
  I recognise that there are some teachers who dislike the General Teaching Council as at present constituted. I should have been surprised if a radical change of this nature had gone through with 100 per cent. acceptance. Inevitably, there will be different views about a Council of this sort. We have not heard detailed complaints tonight about the present Council, although there have been incidental references to its composition, and so on. I need not go into those questions now; they are not covered by these Regulations.
  All I need say is that criticisms of the Council of the kind one has had, for example, from the Scottish Schoolmasters' Association are very familiar; they have been dealt with in correspondence and other ways many times in the past year or so. No new argument against the Council has been produced for a long time. Time and again, we find we are going over ground which was all debated exhaustively at the time when the Act was passed.
  In considering the extent of the opposition, I have to have some regard to the number of teachers registered with the Council. I was asked to give further information to bring up to date the figures which I gave a fortnight ago. There has been a further improvement since then. The latest figures I have, up to today, show that 48,769 teachers have applied for registration and 45,973 of these have completed the process by paying the registration fee of £1. In addition, there are the 1,500 teachers conditionally registered to whom I have already referred.
  At the last count in December, 1967, there were no more than 42,000 teachers in service, of whom 3,500 were teaching in further education colleges and colleges of education, and there is no compulsory registration at present in their case. One looks, therefore, at the total number of teachers and compares It with the number of applications and full registrations which we now have. I repeat again that reference to the figures leads to the conclusion that an overwhelming majority of teachers in primary and secondary schools have now registered, and the

  1031
  number of those who have not registered must be very small.
  I was asked whether I could be more precise than that. I am sorry that I cannot give more precise information this evening, since the first responsibility here lies with the local education authorities. It is easy enough to ascertain the total number of teachers who have registered, but it is not quite so easy a job—and it has to be done by individual education authorities at their own level, by analysing their present teaching force—to be sure of the number of certificated teachers who are not registered with the General Teaching Council. But I repeat—there can be no doubt about it—that the number must be very small, and figures of the kind mentioned in the S.S.A. circular of 4th November are completely inaccurate and cannot possibly represent anything like the present position. I think that it was the hon. Member for Galloway (Mr. Brewis) who brought out the interesting point that large numbers of teachers who did not require to be registered have registered with the General Teaching Council. We must keep that in mind when trying to judge the attitude of teachers generally towards registration with the Council.
  I have been told that some of the teachers who have registered have done so under duress. But there is a good deal of contrary evidence, particularly when one considers the decisions taken at the E.I.S. annual congress and the annual general meeting of the S.S.T.A. recently to recommend their members to register with the General Teaching Council, that a substantial majority in the teaching profession are in support of the General Teaching Council. I have to take account of the attitude of those organisations as well as that of any minority that may wish to recommend to teachers that they should not register with the Council. But ultimately the question of the continuation of the Council and its success will, and must, depend on the willingness of teachers to support it, register with it and take part in its activities. The teachers should realise this. The Council cannot be sustained except with the encouragement and sustenance of the teachers. It cannot be sustained simply by the Secretary of State or even by official teachers' organisations.
  1032
  The hon. Member for Perth and East Perthshire (Mr. MacArthur) made a point about the general attitude towards the Council at present. I am aware of the vigorous campaign of opposition to the G.T.C. that has been carried on over the past year. I think that the figures of registration show how ineffective that campaign has been. I certainly take the position that the opposition to the Council would not justify the Government in seeking to alter at this stage the arrangements approved by Parliament little more than three years ago. However, I should make it clear that change is not out of the question for all time. No piece of law is immutable, and every Act of Parliament can be amended by subsequent legislation should Parliament so decide.
  Moreover, the Teaching Council (Scotland) Act, 1965 includes at paragraph 6 of Schedule I provision for amendment by order of the paragraphs of the Schedule that prescribe the constitution of the General Teaching Council and the arrangements for making appointments to it. Our minds are therefore by no means closed to change, if a clear need for it is established, such need can be established through constitutional means. To seek to proceed otherwise could well lead to disaster for the whole conception of a Teaching Council, which even the opponents of the present Council say that they support in principle.
  Therefore, I hope very much that those teachers who are certificated but have not registered with the Council will pay full account to the speeches from both sides of the House tonight, the message of which I believe is that they should register now with the General Teaching Council. That is also the message that I would give them. It is perfectly open to them, as registered teachers, to put forward any views they may have about the composition of the Council and any changes they might wish to see in it. The existing Council completes its four-year period of office early in 1970, and elections of teacher-members of the next Council will be held at the end of 1969. If, as it is claimed, there is a substantial groundswell of discontent in the profestion, this will be reflected in the electoral results. As a consequence, the Council could be moved to press for reform of

  1033
  its composition. In any event, the Government would give most careful consideration to any expression of teacher opinion as it emerges in the year ahead, particularly from the elections, and would, if need be, take such steps as appeared appropriate to consider adjustments to the functioning of the Council.
  The General Teaching Council has been the subject of intense and sometimes bitter controversy in the profession. It is a controversy—here I agree very much with what the hon. Member for North Angus and Mearns (Mr. Buchanan-Smith) said about it—which if continued can in the end do nothing but harm to the teaching profession and the education service in Scotland.
  I said a moment ago that there are ways in which discussion and argument about the General Teaching Council can take place within a constitutional framework. I appeal to certificated teachers who have not yet registered to take that into account and register now so that we can approach the future of the General Teaching Council in a constructive spirit.
  As has been pointed out by more than one of my hon. Friends this evening, the Council represents the most advanced
  1034
  state of self-government achieved by the teaching profession in any country in the world. That applies, incidentally, to England and Wales, if I might just make that comment. We have, therefore, had a pioneering operation in Scotland supported by the good will and with the encouragement of all quarters of the House. I think it is evident from the debate that that encouragement and good will towards the General Teaching Council still exist and have been enhanced rather than discouraged by the controversy that we have had about the Council over the last year or so.
  I hope very much, therefore, that the House will accept these Regulations. I hope it will do so knowing that they are inevitable and inherent in the General Teaching Council Act, 1965. I hope it will accept them realising the full implications of these Regulations. I also hope that the teachers will recognise that what we are doing here is an essential part of giving this large measure of self-government to the profession, which was the purpose of the 1965 Act.
  Mr. MacArthur: I beg to ask leave to withdraw the Motion.
  Motion, by leave, withdrawn.

  SELBY TOLL BRIDGE
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Concannon.]
  10.27 p.m.
  Mr. Michael Alison: It is very agreeable and helpful for me to be able in a short debate to draw the attention of the House and the Joint Parliamentary Secretary to the Ministry of Transport to a most serious accident that occurred in the town of Selby, in the West Riding of Yorkshire, in my constituency, at the beginning of August.
  Damage was caused to the Selby Toll Bridge when a vessel sailing upstream on the Ouse tried to navigate through the gap left when the toll bridge swung open, and struck one of the timber baulks of which the bridge is built and by which it is supported in the river. As a result of the damage the bridge had to be closed to road vehicle traffic for three weeks.
  The House will appreciate the seriousness of what this meant both to the bridge and to Selby when I remind it that the toll bridge carries the A 63 trunk road which links not only the town of Selby to the town of Barlby adjacent across the river but also the whole of the West Riding of Yorkshire to the East Riding, and is also the principal trunk link between the West Riding industrial complex—Leeds, Bradford, Wakefield, Huddersfield and the rest—and the Port of Hull in the East Riding, one of the principal East Coast ports in the British Isles to which much of the West Riding industrial production goes.
  I digress here to point out that the Selby Toll Bridge has very few alternatives. If the bridge is closed there remain only the bridge over Wharfe at Tadcaster, the Cawood Bridge, a small light bridge unsuitable for industrial traffic, and the Booth ferry bridge.
  The disruption caused by the closure of the Selby Toll Bridge for three weeks was unimaginable. I challenge the Joint Parliamentary Secretary to recall any occasion when a major trunk road of this importance linking one of the largest concentrations of industrial population and industrial production in the British Isles
  1036
  —namely, the West Riding—to perhaps the third or fourth greatest port in the British Isles, Hull, has been closed to vehicle traffic for three weeks. I believe that it is without precedent in the history of trunk roads since motorised traffic came into being. A major trunk road may have been closed for three hours, or three days, or even a week, but never, I believe, for three weeks.
  I need hardly point out the fantastic difficulties this entailed for the local population in the first place. If one lives just to the west of Selby and has a job five miles to the east, this means, normally, crossing the bridge. During the three-week closure, people in such circumstances had to make a detour of about 35 miles to cross an alternative bridge.
  Many local firms were affected. They include British Oil and Cake Mills, Rank's Flour Mills, Fletcher's Sauce and the Danish Bacon Corporation. The latter, which is on the west side, has Danish sources for its supplies and carries on much of its trade through Hull, on the east side of the river. For three weeks, all these firms and others were unable to use the bridge for normal commercial purposes. The large Cochrane shipyard is also on the west side and Fletcher's Sauce is on the east.
  The financial loss to Selby traders and firms was probably incalculable and I have two testimonials to that effect. The National Federation of Business and Professional Women's Clubs wrote that traders' turnover was cut to less than half, perishable goods were delayed or diverted and carried at a loss, and that it could only surmise as to the cost to industry. Obviously, if perishable goods were involved, very substantial financial losses were entailed and this even applied to such goods as machinery in having to make a huge detour of 30 miles or so.
  The Selby Chamber of Trade wrote:
  "The closing of Selby Toll Bridge…has, and still is, causing severe hardship to the local business and trades people in the Town, through a drastic drop in trade. Further…the cost of deliveries, time and wear and tear of vehicles, has soared to incredible degrees."
  One of the larger firms in the town normally pays over £7,000 a year in tolls to cross the bridge. At the height of the summer activity, the bridge was closed, entailing additional financial cost

  1037
  The hon. Gentleman should also visualise what happened to the local services. The Selby Fire Brigade is on the west side of the river but the town of Barlby, which is across the river, is really an integral part of Selby and shares the services not only of the fire brigade but of the ambulances. A hazardous situation arose for Barlby because fire engines could not get across from the west side of the river to attend to fires there. This meant that appliances had to be brought in from Bubwith in the East Riding many miles further away, and there was that additional hazard.
  There were pictures of these things in the papers, for it frequently happened that patients had to be carried by stretcher from one ambulance to another across the toll bridge in order to be taken from the West Riding side of the town to York hospital, or possibly to Hull, and sometimes in the other direction, for one of the features of this rural area has been the tendency to concentrate hospital services, so that more travel is involved. For three weeks the disruption on the major trunk route, was unimaginable. I need not dwell on the repercussions further afield. The principal cities of Leeds, Bradford and Wake-field were effectively cut off from the Port of Hull for three whole weeks. That it can happen makes the imagination boggle, and I do not think that anything of the kind has ever happened before.
  I do not believe that the Parliamentary Secretary or his Department can allow the risk of this ever happening again, but the risk is still there. It lies in the fact that Selby Toll Bridge is an antiquated, 18th century, wooden swing bridge which is quite inadequate not only to carry modern vehicular traffic across it, but to deal with the volume of river traffic now seeking to go under it, a growing form of traffic in the East and West Ridings. Perhaps I may draw the Parliamentary Secretary's attention to a letter which I have received from a correspondent with whom I keep in touch in Selby, someone whom I may describe as a boat spotter. He is a young man, Mr. John Adamson, who is kind enough to furnish me with regular details about the movement of shipping. In January, of this year, he wrote:
  1038
  "I am confident that the volume of shipping using Selby will continue to increase during 1968.
  Twenty-seven ships have already visited the town this year, and I was informed today by one wharfinger that a ship carrying 1,100 tons of cargo is due to arrive at his wharf next week. This may well be a record cargo for Selby.
  Another firm of wharfingers have informed me that they are to load two shipments of molasses during February and others may follow. These shipments will be the first of their kind in recent years, and the tankers, which are to be chartered from a London firm, will be large vessels by Selby's standards".
  The risk of this further damage to the toll bridge at Selby is obviously increasing and that makes the bridge even more inadequate to modern needs.
  I must draw attention to the fact that if the Selby Toll Bridge is closed, the alternative routes are themselves extremely vulnerable. It so happens that Cawood bridge, which is one of them, by a stroke of fate sustained an accident in the very same week that the Selby bridge was closed and was therefore also closed. At the same time, the Booth ferry bridge is a somewhat unreliable swing bridge and is frequently closed. If Selby and Cawood and Booth ferry bridges were all closed simultaneously, which is by no means beyond the stretch of imagination, the whole of the West Riding industrial traffic and traffic from over the Pennines to the Port of Hull would be affected. Hon. Members will appreciate the difficulties for this traffic which would have to be routed by the A 64 through Tadcaster, which is already an intolerable bottleneck.
  Mr. Kevin McNamara: There was a time during the closing of the Selby Bridge when the Booth ferry bridge was also closed.
  Mr. Alison: I can readily understand that.
  We now look to the Government to act in the present situation. Action can no longer be delayed. The risks and the damage liable to be caused not just to a town but to the whole of West Riding industry and the Port of Hull are too serious to brook any further delay. First, the Government must assume responsibility for the supervision and the conduct of the Selby Bridge. Secondly, they must make early plans for at least replacing, but preferably duplicating, the bridge across the Ouse at Selby.

  1039
  Thirdly, the Government must honour their pledge, given by the Minister's Department in 1954, to free the Selby Toll Bridge, with fair compensation to the owners, as a first priority, and as the first toll bridge with a trunk road to be freed.
  First, the action with regard to responsibility. It must be the Department's responsibility to take over as soon as damage is caused to the Selby Toll Bridge. It is its trunk road and vehicular traffic is its responsibility. If the bridge is damaged and closed, it must assume responsibility immediately. It must be brought into the question of the scale of expenditure, repairs and the type of contractors involved. It cannot be left to private individuals.
  As to the replacing or duplication of the bridge, I must ask the Minister to refresh his memory about a meeting which took place in Selby, on 30th August this year, between representatives of the East and West Riding County Councils, the Selby Urban District Council and the Ministry of Transport. They discussed the possibility of an alternative route, a by-pass of the town of Selby, and reached a unanimous agreement about a new route. I quote from the minutes of that meeting:
  "The Meeting accordingly resolved that the Minister of Transport be urged to take immediate action to abandon the Southern By-Pass Order"—
  that was the Order prevailing up to the time of the meeting—
  "and to authorise the preparation of the necessary plans for the new route"—
  that is the northern route—
  "with a view to its securing an early place in the road programme."
  We want the Minister to comment on this. This was a representative meeting which reached agreement that there must be a new by-pass, the northern route, and the abandonment of the old southern line. The new route was to be up Scott Road, Flaxley Road and eastwards across the river, north of the oil and cake mills. We want a date for that inclusion of this new route, and an associated bridge in a published road programme.
  Let me draw the Minister's attention to some comments made by my predecessor, Colonel Sir Leonard Ropner, in
  1040
  an Adjournment debate on 20th July, 1960. He said:
  "…the Minister gave me the pledge…that of all the toll bridges in the country the Selby Toll Bridge would be placed at the top of the list of all the bridges to be cleared."
  At that point the then Joint Parliamentary Secretary to the Ministry of Transport, my hon. Friend the Member for Henley (Mr. Hay) interrupted and said:
  "Toll bridges on trunk roads."—[OFFICIAL REPORT, 20th July, 1960; Vol. 627, c. 688.]
  With that qualification the pledge given in February, 1954, was that of all the toll bridges in the country, the Selby Toll Bridge would be placed at the top of the list of such bridges to be cleared. I want the Parliamentary Secretary to reiterate that pledge and associate the Government with it.
  Secondly, I want him to confirm that his Department will, at an early date, confirm the new line, the northern by-pass route agreed by representatives of his Department, the East and West Ridings and Selby U.D.C. Thirdly, I want a firm undertaking that there will be a date for the inclusion of a Selby by-pass and a new bridge in a published road programme. This is the least that the town of Selby and the East and West Ridings can reasonably expect.
  An antiquated 18th century toll bridge is totally inadequate for the needs of the locality and the country, and it is intolerable that it should be possible for a trunk road to be closed to traffic for as long as three weeks. Can the Parliamentary Secretary give us some encouragement and hope for the future in this important local matter.
  10.44 p.m.
  Mr. Kevin McNamara: I am grateful to my hon. Friend the Parliamentary Secretary for allowing me a minute in which to support many of the arguments made by the hon. Member for Barkston Ash (Mr. Alison). I had the opportunity earlier this year of raising this matter. It is of prime importance to the future of the whole of the East Riding, and concerns our connections with the industrial West Riding and the Midlands. We depend upon this most inadequate bridge. It is shocking that a small accident, with a barge ramming one of its piers, can put the bridge

  1041
  out of commission for such a long time, with such a tremendous increase in costs for people transporting goods. It causes great inconvenience and expense for people concerned in the vital export industry.
  10.45 p.m.
  The Joint Parliamentary Secretary to the Ministry of Transport (Mr. Neil Carmichael): The hon. Member for Barkston Ash (Mr. Alison) has performed most assiduously his duties as a Member on the issue of the Selby Toll Bridge. On 8th August this year, he sent a telegram to my right hon. Friend the Minister of Transport when the bridge was damaged, and he was most energetic in ensuring that he was kept in close touch with the progress of repairs. Likewise, my hon. Friend the Member for Kingston upon Hull, North (Mr. McNamara) has also pursued this matter with great vigour and raised the question of communications, of which the Selby Bridge is a part, in the whole of the East Riding of Yorkshire.
  The hon. Member for Barkston Ash has this evening vividly described the serious difficulties caused for traffic by the unfortunate damage to Selby Bridge which necessitated its closure for three weeks during August. As we know, and as has been described by both hon. Members, crossings over the Ouse are widely spaced and any incident of this kind inevitably involves long detours and throws an additional strain on routes which may already be inadequate to cope even with the traffic that normally uses them.
  I do not want the House and people who use Selby Bridge to think that we are turning a blind eye to the problems. The Government have long been aware of the inadequacy of the general communications over the Ouse. We know of the particular difficulties experienced at Selby, even when the bridge there is functioning normally, let alone on the exceptional occasion when it has to be closed to traffic.
  Following the publication of Ministry proposals in September, 1965, for a new network of trunk roads in the Humber-side area, some of the local authorities concerned suggested an alternative network. This would have included a new route on an alignment close to the exist-
  1042
  ing A63, thus providing an effective bypass of Selby and ending the dependence of east-west through traffic on the Selby Bridge.
  But there were many other considerations involved in the choice between the two alternative networks. My right hon. Friend, now the Secretary of State for Employment and Productivity, considered all the factors with the utmost care and heard the views of all the local authorities concerned, including the Selby Urban District Council, before finally she decided to adhere to the proposals originally published by the Ministry.
  These proposals, as the hon. Member will know, consist of a new east-west route between Ferrybridge on the Al and Gilberdyke on the A63 west of Hull and a new route running north-eastwards from Doncaster and joining the first at East Cowick. Both these routes, which were included in the first instalment of the trunk road preparation pool announced in February, 1967, will be constructed as motorways and will form extensions to the M62 and Ml8 motorways, respectively. They will include a new high-level crossing of the Ouse at Hook. This bridge will be able to carry all the through traffic between Hull and the west, south-west and south and will to that extent relieve Selby considerably. By increasing the facilities available for communication across the Ouse, it will at the same time ensure that the consequences of any future occurrence similar to that to which the hon. Member has drawn attention would be much less serious than they are in the condition of today.
  It is, of course, true that it will be several years before this new network can be completed. This is inevitable because of the enormous amount of survey and design work involved and the need to carry out the appropriate statutory procedures for establishing the route and the side-road modifications and for authorising the acquisition of the necessary land. We are, however, pressing on with this work with all possible speed.
  We realise, of course, in the Department, that the construction of the new motorway network will not provide a complete answer to the difficulties caused by Selby Bridge. The hon. Member has been at pains to make this point. This

  1043
  was indeed expressly recognised by my right hon. Friend when she met objectors to her original proposals for the Humber-side network in June, 1966.
  She then said that if she confirmed the network as proposed it would still leave the problem of Selby and in that case she would investigate separately what improvements might be made there. Since the confirmation of the proposed Humberside network, discussions have accordingly been proceeding with the local authorities concerned to explore the possibility of carrying out a scheme to deal with the traffic problems that can be expected to remain when the motorway network has been completed.
  The most promising solution appears to be a line to the north of Selby which would involve a new bridge across the Ouse about a mile to the north of the existing toll bridge. Now that this preliminary conclusion has been reached we are considering the inclusion of the bypass in the next list of schemes to be announced for inclusion in the trunk road preparation pool. The hon. Member has pressed hard for a firm date to be set for construction of this road, and I am sorry that I cannot be as explicit as he would like.
  If this were the only scheme in the country requiring to be undertaken, life would be easy. I should be able to promise it on the spot to the hon. Member and other hon. Members for the area who have been pressing the matter over the months and years. But we have to establish priorities in drawing up our list of road schemes to be included in the preparation pool. This particular scheme will have to compete for a place with many other urgent schemes throughout the country, and I cannot at this moment anticipate what my right hon. Friend's decision will be and when it will be announced. But I can promise that, provided the scheme does secure a place, we will ensure that it is developed without delay to the point at which it can be considered for firm programming for a specific year. This is not the answer which the hon. Member hoped for, but I assure him—and my hon. Friend—that if we are able to give them brighter news at some time about its inclusion in the preparation
  1044
  pool, we shall push ahead as fast as we can, and let him and the local authorities know we can go ahead.
  Again, we recognise that even if we can some day promise this new bridge, it will not provide an immediate answer to the Selby problem. The hon. Member has stressed how intolerable conditions would be if the existing bridge were out of commission again for any length of time. He has shown that existing traffic still has to be coped with in the normal situation and will encounter a most awkward problem in the event of a further closure. We have looked seriously at one constructive suggestion which hon. Members have been asking for, and this was the idea of a temporary bridge, but there are great problems here, because there would have to be road works on both sides of the bridge, which would mean demolishing a quite large amount of property. Also, the bridge would either need to be a high level bridge or it would need to be a mechanical bridge. It would be extremely expensive, particularly since it would be for only a limited period, till the new by-pass and bridge were built. So this was really not a feasible solution.
  There remains the possibility of improving the existing toll bridge. The hon. Member is very rightly concerned lest the bridge is at any future time out of action again, and I understand that the bridge owners are anxious as well that this should not happen again. That is why they are thinking about improvements to the bridge. I must make it very clear at this point that the toll bridge is privately owned, although it connects trunk routes, and the Ministry has no locus at all in the question of the actual bridge. So it is not open to my right hon. Friend the Minister to decide to carry out any improvements. He has no power to do so. This is a matter entirely in the hands of those who own the bridge. But as I have already indicated, it so happens that the bridge proprietors do intend to reconstruct the bridge in a way which would result in substantial improvement. We shall, of course, be pleased to co-operate with the bridge proprietors in any way which may be necessary to ensure proper co-ordination of their proposals with considerations affecting trunk

  1045
  road traffic, and we hope that their proposals for action will lead to an alleviation of the situation during the period before the longer-term trunk road proposals can come into operation.
  I am sorry that, for want of time, I am rather rushed now, but I can say, on the question of the promises made at one period by other Ministers, that I myself have been in great detail into the whole question of tolls and bridges. The position of the Department on the cost of buying out tolls, of compensation, is that, since bridges would need to be replaced in any event, it is better to go ahead and use the money to build new bridges, instead of using the existing bridge and spending perhaps a great deal of money in trying to bring it up to a satisfactory standard.
  1046
  To sum up, therefore, we have already announced and will implement as quickly as we can an extensive and costly motorway network that will considerably reduce the importance of the route through Selby for through traffic. We are considering the inclusion of a Selby by-pass in the trunk road preparation pool, and some relief is to be hoped for from the reconstruction of the existing bridge, towards which we shall be happy to offer our co-operation. I trust the hon. Member and my hon. Friend will accept this as evidence of our real concern to do all in our power to remedy the deficiencies to which he has so vividly drawn attention.
  Question put and agreed to.
  Adjourned accordingly at four minutes to Eleven o'clock.

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  Motor Vehicles (New Registrations)
RAILWAYS
  Level Crossing (Marrel, Helmsdale)
  Level Crossing (Marrel, Helmsdale)
LOCAL GOVERNMENT
  Industrial Development, Sunderland
  Industrial Development, Sunderland
HOUSING
  Local Authority Costs
  Local Authority Costs
POST OFFICE
  Telegram Service
  Telegram Service
  Postal Address (City of London)
  Postal Address (City of London)
  Traffic Grades
  Traffic Grades
  Two-Tier Postal System
  Two-Tier Postal System
WIRELESS AND TELEVISION
  B.B.C.2 Reception (Marker Harborough)
  B.B.C.2 Reception (Marker Harborough)
  CIVIL SERVICE MANPOWER
  CIVIL SERVICE MANPOWER
CIVIL SERVICE
  (Fulton Committee's Report)
  (Fulton Committee's Report)
EDUCATION AND SCIENCE
  Professional Training Courses (Graduates)
  Professional Training Courses (Graduates)
  Arts Council (Regional Aid)
  Arts Council (Regional Aid)
  University Teachers (Pay)
  University Teachers (Pay)
EMPLOYMENT AND PRODUCTIVITY
  Forces Resettlement (Adviser)
  Forces Resettlement (Adviser)
  Industrial Instruments (Safety)
  Industrial Instruments (Safety)
  Departmental Name (Signwriting Cost)
  Departmental Name (Signwriting Cost)
NATIONAL FINANCE
  Australia (United Kingdom Portfolio Investment)
  Australia (United Kingdom Portfolio Investment)
  International Monetary Fund Loans (Repayment)
  International Monetary Fund Loans (Repayment)
  Balance of Payments
  Balance of Payments
  Employment and Personal Consumption
  Employment and Personal Consumption
MINISTRY OF POWER
  Colliery Tips, Aberfan
  Colliery Tips, Aberfan
  Safety Equipment (Testing)
  Safety Equipment (Testing)
  Steel Production (Spray Process)
  Steel Production (Spray Process)
HOSPITALS
  Gynaecological Operations
  Gynaecological Operations
  St. Mary's Maternity Hospital, Harborough Magna
  St. Mary's Maternity Hospital, Harborough Magna
  St. Cross Hospital, Rugby
  St. Cross Hospital, Rugby
SOCIAL SERVICES
  Local Offices
  Local Offices
  Fishing Industry (Suspension Rule)
  Fishing Industry (Suspension Rule)
  Illegitimate Births
  Illegitimate Births
  Leukaemia (Deaths)
  Leukaemia (Deaths)
WALES
  Road Signs (Place Names)
  Road Signs (Place Names)
HOME DEPARTMENT
  Constitution (Commission)
  Constitution (Commission)
  Gaming Board (Membership)
  Gaming Board (Membership)

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of St. Albans.
The Viscount Portman—Sat first in Parliament after the death of his kinsman.

POST OFFICE PILLAR BOXES
LORD SORENSEN: 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 it is the intention of the Postmaster General to substitute square pillar boxes for the traditional cylindrical type; what is the advantage of this replacement, and what is the estimated period before the whole operation is completed.]
LORD BESWICK: My Lords, the Post Office is experimenting with 200 rectangular boxes which have been designed so that they are more easily emptied and maintained. If they are a success my right honourable friend will consider replacing the present design by boxes of the new shape as and when the old ones wear out. As the traditional type lasts for fifty years or more it would be many years before replacement could be completed.
LORD SORENSEN: I thank the noble Lord for that reply. May I ask whether he is aware that some of these cylindrical boxes have been in existence for at least a hundred years and still have the monogram "V.R." on the side? In those circumstances may I ask him what is the approximate total cost of the change and whether we can take it that this is merely an experiment?
LORD BESWICK: My Lords, if I were to give my noble friend the total cost it would be necessary to spread it over the hundred years or so to which he referred, and I do not feel that I am
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able to give him that figure. But I appreciate what he says about the interest of these pieces of Victorian equipment, and no doubt some sale could be found for them in other directions.
BARONESS HORSBRUGH: My Lords, can the noble Lord give us any reason for making the change?
LORD BESWICK: My Lords, I thought that was in my original Answer.
LORD HAWKE: My Lords, will Her Majesty's Government confirm that these boxes will be painted a pillar box red?
LORD BESWICK: Yes, my Lords.
LORD GRIMSTON OF WESTBURY: My Lords, how will it be decided that these square boxes are a success as against the old round ones?
LORD BESWICK: My Lords, I have no doubt that there will be an O. and M. investigation.

NIGERIA: FRENCH AID TO BIAFRA
LORD AMULREE: 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 information as to the extent of the assistance, if any, which is being given by the French Government to Biafra, and if so, through what channels this assistance is passing.]
THE MINISTER OF STATE, FOREIGN AND COMMONWEALTH OFFICE (LORD SHEPHERD): My Lords, the French Government have said that with the French Red Cross, and in co-operation with the Government of Gabon, they are flying in food and medical supplies to the area under Colonel Ojukwu's control; and that they have established hospitals in Gabon to which a number of children from this area have been evacuated.
LORD AMULREE: My Lords, I should like to thank the noble Lord for his reply. May I ask, as a supplementary question, whether it is not true that arms are being flown into Biafra from Abidjan and Libreville?
LORD SHEPHERD: My Lords, there is clear evidence that there has been a major increase in supplies of arms into the Biafran territory. Dr. Dike, who is a leading Biafran, is reported on October 31 as ascribing the improved Biafran situation to the reorganisation of the Biafran army. He goes on, "and the increased flow of arms". On the latter point, he said that some arms were of Chinese manufacture and were probably coming from Tanzania, but the bulk were being purchased openly in Europe for the account of the Governments of the Ivory Coast and Gabon.
LORD AMULREE: My Lords, I thank the noble Lord for that very full reply.

STANSTED AIRPORT
2.40 p.m.
Loan BRAYE: 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, as reported in the Press, it is intended to increase and expand air traffic at Stansted Airfield far beyond its present limits; and what instructions have been given to the British Airports Authority in this respect, in view of the Foulness project for London's Third Airport.]
LORD BESWICK: My Lords, no such increase is intended or expected. Pending the outcome of the Inquiry by the Roskill Commission, Stansted will continue to be used in its present role, taking a share of London's increasing traffic but used mainly for training. No question of instructions to the British Airports Authority therefore arises.
LORD BRAYE: My Lords, as a subsidiary question may I ask why night flying has now started at Stansted?
LORD BESWICK: Because, my Lords, it is a convenient place in which to have training flights. It has been used for a considerable period and it is intended that it shall continue to be used for this purpose.
LORD TREFGARNE: My Lords, is it not the case that all public licensed airfields are required to accept all users
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under the same terms and conditions? Is it not therefore the case that the Airports Authority have no power to direct aircraft to one or other of their airfields?
LORD BESWICK: My Lords, I would say that, except in time of emergency, what the noble Lord has said is broadly correct. But I would take the opportunity of saying that I think there is a good deal of quite unwarranted misapprehension about this matter. There is absolutely no question of deliberately stimulating the use of Stansted Airport. The intention is that it shall be there as an available airport until such time as a decision is taken about the third London Airport.
LORD CARRINGTON: My Lords, can the noble Lord tell the House whether, under the provisions of the Town and Country Planning Order now laid before your Lordships, it would be possible for the British Airports Authority to build at Stansted Airport without waiting for the Report of the Roskill Commission?
Loan BESWICK: No, my Lords; it would not. There are various safeguards, which I will go into if the noble Lord wishes, but I give him a categorical assurance that it would not be possible.

GUYANA: VENEZUELAN CLAIMS
2.43 p.m.
LORD CLIFFORD OF CHUDLEIGH: 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 consider themselves bound by the 1966 Geneva Agreement to defend, if necessary, the boundary of Guyana against the claims of Venezuela.]
LORD SHEPHERD: My Lords, the Geneva Agreement is essentially an instrument providing for a peaceful resolution by Guyana and Venezuela of their territorial problem. It deals solely with the mechanisms to achieve this and therefore does not contain any obligation in the sense envisaged by the noble Lord.
LORD CLIFFORD OF CHUDLEIGH: My Lords, I thank the noble Lord for that reply. Would he not agree that it is somewhat dishonourable to boast, as many of us do, that we lead all these countries to independence, and then to permit other and more powerful countries to endanger or negative that achievement? Would he not agree that, even if we are not legally bound, we are morally bound to protect the integrity of the boundaries that we gave to Guyana by the mere fact of our signature not only to the Geneva Agreement but to Article 1 of the Instrument of the Constitution? Finally, in view of our moral commitments to Guyana vis-à-vis Venezuela, to British Honduras vis-à-vis Guatemala, to the Falkland islands vis-à-vis the Argentine, and to Gibraltar vis-à-vis Spain, and so on, quite apart from what was mentioned in the debate yesterday how can Her Majesty's Government justify the recent decimation of our forces and reserves?
LORD SHEPHERD: My Lords, I think that is one of the most sweeping supplementary questions I have ever had the misfortune to be asked. I would only say to the noble Lord that we have expresed our concern to the Venezuelan Government, and they have said they have no intention of resorting to force in the settlement of this dispute. We have welcomed that statement, and as a result of it we have no reason to believe that Guyana is threatened.
LORD SORENSEN: My Lords, may I ask whether the Guyana Government have consulted Her Majesty's Government on this matter?
LORD SHEPHERD: My Lords, we are in continuous communication with the Government of Guyana; but that, of course, is confidential.
LORD BLYTON: My Lords, surely my noble friend must agree that if independent British Guiana—now called Guyana—a member of the British Commonwealth, is attacked, we must go to her help?
LORD SHEPHERD: My Lords, it must always depend on the circumstances. We have already expressed our concern about this matter, but we have no reason to believe that Guyana is threatened with military invasion by Venezuela.
LORD HAWKE: My Lords, is it not a fact that Venezuela is claiming a large proportion of the territory of Guyana, whereas Guyana is willing to negotiate about whether the frontier runs on one side of a river or the other? Therefore, as between a large country and a small one, do not the negotiations sound particularly ominous?
LORD SHEPHERD: My Lords, Guyana put her signature to the Geneva Agreement and as an independent country is now negotiating with Venezuela. The meetings are continuing and although there has not been much progress so far the matter is being discussed, as it should be discussed, by two independent countries.

RONAN POINT FLATS
LORD BESWICK: My Lords, at a convenient moment after 3.30 o'clock my noble friend Lord Kennet will be making a statement on Ronan Point.

BUSINESS OF THE HOUSE
THE LORD PRIVY SEAL (LORD SHACKLETON): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That leave be given to the Baroness Elliot of Harwood to advance her Unstarred Question from Thursday November 28 to Thursday November 14.—(Lord Shackleton.)
On Question, Motion agreed to.

CONSOLIDATION BILLS
THE LORD CHANCELLOR (LORD GARDINER): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That it is desirable that in the present Session the following classes of Bills shall hi:, referred to a Joint Committee of both Houses of Parliament:

(1) All Consolidation Bills, whether public or private;

(2) Statute Law Revision Bills;

(3) Bills prepared pursuant to the Consolidation of Enactments (Procedure) Act 1949, together with any

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memoranda laid pursuant to that Act and any representations made with respect thereto;

(4) Bills to consolidate any enactments with amendments to give effect to recommendations made by one or both of the Law Commissions, together with any Report containing such recommendations.—(The Lord Chancellor.)

On Question, Motion agreed to.
Ordered, That a Message be sent to the Commons to communicate this Resolution, and to desire their concurrence.

ADDRESS IN REPLY TO HER MAJESTY'S MOST GRACIOUS SPEECH
2.46 p.m.
Debate resumed on the Motion moved on Wednesday last by Lord DelacourtSmith—namely, That an humble Address be presented to Her Majesty as follows:
"Most Gracious Sovereign—We, Your Majesty's most dutiful and loyal subjects, the Lords Spiritual and Temporal, in Parliament assembled, beg leave to thank Your Majesty for the most gracious Speech which Your Majesty has addressed to both Houses of Parliament."
EARL JELLICOE: My Lords, I suspect that a number of your Lordships may have read that interesting publication, the Government's White Paper on House of Lords Reform. Those of you who have will know that on August 1, 1968, this House had 1,062 Members. That means that on any given issue, including, I suspect, the reform of your Lordships' House, there are likely to be no fewer than 1,062 differing opinions—probably more, because I believe it to be the case that some of your Lordships, like myself, sometimes have more than one contradictory opinion on an issue at one and the same time.
Nevertheless, I believe that there is unanimity—and certainly what I heard of yesterday's debate, though unfortunately I could not hear all of it, confirmed that belief—in our genuine desire that this country should continue to play a proud and worthy part in the affairs of this planet. I suspect that there is also
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unanimity on our inability to play that part unless, somehow, we can contrive to manage our economic affairs rather better than we have been able to manage them for the last fifty or sixty years. Let us not delude ourselves. We are not to-day concerned only with the last four wasted years of Labour mismanagement. We are not just jogging back to the 13 years of Conservative management. What we have to face up to, what we have to grapple with, is that in important respects the British economy in the last half century and more has been quite seriously out of joint.
I do not wish to be unduly depressing. We have a great deal to be proud of. I think that events abroad in this rather tragic and eventful year have only served to emphasise this pleasant truism. I doubt whether our transatlantic cousins will have a particularly attentive ear cocked for our debate this afternoon. Greatly daring, therefore, I venture to suggest that perhaps we handle the problems of poverty in this country—admittedly inadequately—certainly a great deal better than they do in the United States. Equally, I think we can claim to order things rather better in some respects, certainly so far as sweet political reasonableness and toleration are concerned, than some of our nearer neighbours across the Channel.
But, my Lords,—and it is a big "but"—there are great areas of our society crying out for urgent and rather expensive treatment. Vast tracts of our physical environment, especially the environment of our dark and sometimes dank Northern cities, is shoddy beyond belief. Much of our housing, although by no means poor by West European standards, is poor by any standard of human decency. Much of our communication system—our Victorian docks and railways, our Edwardian roads—is archaic. And, of course, we are reminded from time to time that our postal system has certain more modern defects. But in our irritation over that two-tier system, let us not forget the even more important fact, that our telephone system is to-day a national scandal and one which we must put right without delay if we as a nation intend to keep up with the economic hunt.
Let us not forget the more human factors. There are the not insignificant and

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all too intractable pockets of poverty in our country. There are undermanned and under-resourced social services—under-manned and under-resourced, of course, partly as a result of (if I may so term it) the self-inflicted wound of the promiscuous lack of selectivity. There are the glaring gaps in the structure of our education—the poor primary schools, the cuts in our university programme, and the tragic cut in the further year of education over which, to his great credit, the noble Earl, Lord Longford, took issue at the start of this year. Then there are all those enrichments—those not inexpensive dishes of culture and quality—which the noble Lord, Lord Goodman, serves up to the nation from time to time.
My Lords, I shall close this overlong catalogue with a bang, because all I really wish to do is to emphasise that our success as a nation, be it in the conduct of our external relations, or be it in the attainment of more quality in our domestic life, depends on consistent economic growth. And apart from that, there is, I believe here, an important psychological factor. We often say that growth by itself is unimportant; that the importance lies in the ends which that growth serves, and not in the means. With one exception, I accept that. The exception, my Lords, is that I believe that one of the factors which has served to depress our national morale in the last decade and a half is to find that in the race among the more advanced industrial nations we are the tortoise, and the others—be they "Yanks" or "Nips" or "Wops" or Huns "or" Frogs "—are the hares.
It is against this background, judged by these criteria, that I find the record of this Labour Administration these last few years so deplorable. It is deplorable that through bad management, and some bad luck, we as a nation stand to forfeit some £10,000 million in the gross national product as a result, if the Labour Administration runs its term, of the six or seven years of Labour rule. Last year when we discussed these matters it all seemed something of a bad dream. We were then confronted with a horrid and simultaneous conjunction of high unemployment, stagnant production, poor export performance and a sick pound. Above all, we were faced, as we had been faced in the previous three years of
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Labour rule—we were then, of course, getting fairly used to it—by the lack of any clear, consistent and coherent economic strategy.
Nothing made me sadder (I hope he will not mind my saying this in his absence; I gave him a good mark just now) than when our Good Fairy, the then Leader of the House, came before us and drew comfort from the fact that, in this really critical economic situation of twelve months ago, when the country was on the very fringe of devaluation, there were some signs of an incipient consumer-led boomlet. It was that sort of blithe optimism—optimism which should have been contradicted by every single economic indicator, and of which the then Chancellor, together with the present Prime Minister, were among the main purveyors—which brought us to the humiliation of a forced devaluation. I repeat, my Lords, "the humiliation of devaluation". But, of course, that devaluation, as I think we ail insisted from every part of your Lordships' House last November, was also an opportunity.
Since then a year has passed under a new economic stewardship, and this therefore affords a good opportunity of seeing where we now stand. 1 wish to be as fair as possible—and that is perhaps a political luxury which we can more easily afford than our neighbours in another place. So I should straightaway confess that I have at present mixed feelings about our mixed economy. In certain respects I think there are grounds for tempered optimism. I personally believe that our present economic steward has a better grip on the economy and on the economic facts of life than honest, but rather luckless, Jim. We can, and f think we should, take comfort from our buoyant export performance; and I hope that the noble Lord, Lord Brown, who we know has special responsibilities in that field and therefore deserves special congratulations—along with the directors and managers, the backroom boys and the workers on the shop floor, all of whom have responded so well to the stick and the carrot of devaluation—will he able to tell us more when he comes to speak about the export prospects.
But that said, my Lords, there are signs—and I think there are accumulating signs—that in important respects the Government's post-devaluation strategy may be

231
going seriously awry. In the first place, consumer expenditure has gone on its way rejoicing, and in so doing it has made a monkey of the Chancellor's calculations. According to his Budget forecast, consumer expenditure was designed to fall by 2 per cent. in the first half of this year compared with the last half year of 1967. I think that is the precise position, but no doubt the noble Lord, Lord Brown, will correct me if my calculation is wrong. In any event, the forecasters now predict that consumer expenditure in the last half of this year, 1968, will be at least at the same level as in the last half of 1967; that is to say, no fall at all.
Secondly (I assume that the noble Lord will confirm this), the improvement in our balance of payments, on which so much —indeed, nearly everything—is staked, seems to have come through a good deal less rapidly than expected. True, our exports now seem to be pretty well on target, or even a little above target—and let us all rejoice that this is the position. But they seem to have climbed to that target a lot more slowly than the Government anticipated and led us to believe. It would seem—and I hope the noble Lord, Lord Brown, will be giving us his assessment of this—that the greater part of the improvement in the balance of payments in the first half of this year may have come from a rebound of exports following the docks strike, and that the real improvement, due to devaluation, is only now really beginning to emerge. Be that as it may, the main gap between fact and forecast seems to be that imports have levelled off at a disturbingly high level, and a great deal higher than anticipated.
The third difference between promise and performance is that the investment revival appears to have come more slowly than anticipated, although at long last it is now beginning to pick up. All this means that the gross domestic product, which was due to grow steadily at some 3 per cent. per annum, slumped in the early summer and has now rebounded. I would hazard a guess that it may now have accelerated to something of the order of 5 to 6 per cent. per annum. As I see it, this rising pressure of demand has clearly put the Chancellor's strategy at risk. In any event, it confronts the Government with severe problems of econo-
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mic management. We must remember, for example, that the present statutory prices and incomes policy is due to lapse next year, and that at the moment when there is mounting pressure for wage increases. Some of your Lordships may have read the careful and dispassionate survey of our economic prospects which was recently published under the aegis of the Brookings Institute. I shall quote just one short sentence from that survey. It reads:
"No evidence has emerged"—
it is speaking of the United Kingdom—
"that incomes policy grows in effectiveness the longer it is maintained in force".
I do not know whether those words have caught Mrs. Castle's eye. In any event, I suggest that together she and Mr. Scanlon have managed to throw a pretty large spanner in the works of the incomes policy.
That is one flank on which the Chancellor's strategy, already undermined by the surge in consumer expenditure, is exposed. Another is the dangerous dependence of our export drive on the American market. I would hesitate, certainly in the presence of the noble Lord, Lord Brown, to be dogmatic here. Those who predicted an early American recession have been proved wrong. However, some of the more sensitive American indicators, such as, for example, the level of housing "starts", are not too bullish at present. But above all there is the disturbing and stubborn proclivity of the British economy to suck in imports. Here again I hesitate to dogmatise, but I wonder whether we are past the peak on this open flank. So far, most of the increase in stock-building which we have witnessed seems to have concentrated on finished goods. It has been the mirror of the surge in consumers' expenditure, the spending spree. To judge by the precedent of 1963-64, we have yet to witness the increase in the stock-building of raw materials—the true mirror of the rise in output which is now taking place. I fear, therefore—and perhaps I can he persuaded that I am being unduly pessimistic —that the import element in the balance of payments may still have some rather nasty shocks in store for us.
Given these future factors, given the way in which the Chancellor's forecasts have gone awry, given above all the continuance of the spending spree, I was not

233
surprised that the Government decided once again to wield the weapon of hire-purchase controls. I must say (and it is all that I shall say on this score) I do not think that the way some of our Ministers went about this did them much credit. Be that as it may, the need for these new restrictions shows what a delicate plant the British economy is after four years of Labour Government. Even when the brakes are still on, it still shows a disturbing tendency to over-heat.
However, that is not all that I find disturbing about these new measures. In the first place, they coincide with heavy unemployment. I shall not lacerate noble Lords opposite with the figures, although, God knows! they would have lacerated us had they occurred under a Conservative Administration. But I would remind your Lordships that historically the level of unemployment is running at the present time, and has been running for many months, higher than it has been since 1940. Moreover, although they are tending to fall, these figures still remain obstinately high in the less affluent regions of this country. I should therefore like to put to noble Lords opposite the question posed by Mr. Macleod in another place yesterday: Should not the Government consider the injection into these regions of some emergency dose of labour-intensive projects?
Secondly—and here I must declare an interest, as a director of a firm in the motor components industry—there is the sad fact that some 50 per cent. of the weight of the new restrictions falls on the motor industry itself—the industry which accounts for no less than 17 per cent. of British exports. The noble Lord, Lord Brown, has I am certain studied closely the "little Neddy" Report on the industry. He may feel that it contains an element of special pleading. Perhaps it does. But would he not agree that the maintenance of "a large and stable home market" is essential if this capital-intensive industry, faced with the keenest possible international competition, is to bring home the export bacon? And would he not therefore agree with the words of the Report that alternative methods of short-term economic management should therefore be considered, which do not involve the selective use of the motor
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industry as a regulator for the economy as a whole?
Thirdly, these restrictions disturb me for the light which they have shed on the Government's economic husbandry, on their continuing habit of putting off the evil day in the hope that something will turn up. For, my Lords, it is now 10 months since we from these Benches were urging the Government, as part of their January package, to apply a salutary touch of the regulator. What response did we get? The noble Lord, Lord Shackleton, told us last November that Mr. Jenkins proposed to pursue (I am paraphrasing his words) a policy of masterly "wait and see", and in one of his less sensible statements that usually sensible man the Leader of the House told us that his personal information suggested a falling off in the Christmas spending spree. Now, of course, the Chancellor takes a more sophisticated line. He suggested in another place yesterday that the continuance of the spree was rather an act of masterly calculation on his part, designed to hold the slack in the economy until exports took over. His explanation would have been more convincing if we had not known from his own lips, as it were, that he was budgeting for a 2 per cent. fall in consumer expenditure, and got a rise instead. So much for that justification.
More seriously, I believe that the Government's toleration of this consumer spree has had two most serious effects. First, consumer expenditure is import-intensive; it begets imports. This heavy consumer expenditure has had, in my view, a lot to do with that obstinate import figure. Secondly, spending is habit forming, as I think most of your Lordships probably know. Quite seriously, I put it to noble Lords opposite that the continued tolerance of this spending spree, at a time when this nation has been literally fighting for its economic life. may have done a great deal to undermine the habits of thrift and of saving on which so much depends.
As I have said before, I only hope that we shall succeed in bringing our imports more into line. Perhaps we shall. In any event, I suggest that the Government would be wise to have a second line of defence ready to fall back on, if they need to fall back. I am not saying they will need to do so; I am only saying

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that another devaluation as a result of the balance of payments getting hopelessly out of balance would be a real disaster for this country. The second line of defence, I suggest, is the credit weapon of prior deposits. Clearly, this weapon should be used only if it is really needed. I hope, however, that the noble Lord can confirm that the Government have already examined, or are prepared to examine, its possible use. It has many advantages: it is flexible; it is, so far as I know, perfectly compatible with our international obligations. The Italians, by their use of this weapon in their balance-of-payments difficulties some years ago, have proved that it is successful. So much, my Lords, for the past and for the shorter-term future.
We are now somewhere near mid-term between Mr. Jenkin's first and second Budgets. I would suppose that a benevolent school teacher would report on "Young Jenkins" much as follows:
"Roy is a bright lad and shows promise, especially at English grammar. But he is rather weak at arithmetic. And the girls in his class tend to upset him rather easily".
But, my Lords, it is not only the short-term with which we are concerned; it is the longer haul ahead; it is remedying the basic weaknesses of our economic structure, and here in this crucial area the Queen's Speech, which is pretty thin gruel in any event, has little on which we can bite. We learn that the Government look forward to the early consummation of the special drawing rights scheme, and we welcome its potential and much needed contribution to international liquidity.
We learn, too, that the Government will continue to promote the development of agriculture. I suppose every gracious Speech under whatever Governmental auspices has included words to that effect, but here I should like to put a question to the noble Lords opposite who will be replying. They are doubtless familiar with the Report on agriculture's import-saving role, produced recently by the agricultural "little Neddy". As some of your Lordships doubtless know, the programme of expansion for British agriculture elaborated in this extremely comprehensive and careful Report is designed to effect a net import saving of well over £200 million a year; and that important contribution
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to our balance of payments can, in the view of the authors, be brought about through a quite modest injection of fresh capital, and an equally modest expenditure on running investment. We heard a great deal about import saving in those first "dynamic far-off days. We hear rather less now. Can the noble Lord tell us what the views of the Government are on this important Report, and whether similar investigations are going on in other areas of the economy?
We have read in the gracious Speech that the Government will be laying before us proposals for action on the Report of the Royal Commission on Trade Unions and Employers' Associations. My noble friend Lord Erroll of Hale touched on the question of industrial relations in his speech last week, and therefore all I shall say is this: I personally found the Donovan Report a deeply disappointing document, and I do not think I am alone in that opinion. I wonder what the very guarded reference in the gracious Speech means, when it refers to laying before us "proposals for action". It looks to me as though the Government propose to play this long: that they propose to wander around in the foothills of Donovan and not even grasp those few nettles with which the Donovan Report managed to grapple. But this is one of the vital areas in our industrial life. The Conservative Party have put forward concrete proposals, and when we are returned to power we propose to carry out those proposals. I see no such determination on the part of our present rulers.
My Lords, there are 16 speakers and therefore, in conclusion, I shall be brief. We can at least be thankful for one omission from the gracious Speech. It does not include a commitment, so strongly pressed by the Left Wing of the Labour Party, to nationalise the docks. I can think of no more direct blow that the Government could aim at our export prospects than such a proposal. I can only express the earnest hope that it has now been permanently pigeon-holed.
I am less happy, however, about another omission. Nowhere in the gracious Speech is there even a passing reference to savings. And nowhere in the gracious Speech nor in the Chancellor's Speech in another place yesterday, was there any reference to the need to lift the burden

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of direct taxation from our people. I am an optimist at times, and therefore I hope that the Chancellor will, in this period of run-up to the Budget, give real attention to the whole question of incentives right through our society. I hope that he will reflect on the advantages of a decisive shift in the incidence of taxation from the direct to the indirect, and, along with this, will seriously examine the great merits of an added-value tax.
But, my Lords, I think I am also a realist. This Chancellor may, I suspect, manage to make some small dent in the ideological armour of some of his colleagues, but I do not think he will get very far with them. It is only when a Conservative Administration under Mr. Edward Heath is returned to power that we shall witness a really radical attack upon the roots of our economic difficulties. It is only then that we shall see the introduction of economic policies designed to liberate the great latent energies and skills of the British people.
3.15 p.m.
LORD BYERS: My Lords, I welcome the statement by the noble Earl, Lord Jellicoe, that the Conservative Party has now become radical. This will be something worth watching over the next few years. It may be argued that the gracious Speech is not the proper place for a detailed statement of economic policies. Nevertheless, I must follow the noble Earl and echo his disappointment at the thinness of the Speech and the lack of any careful plan put forward by the Government which would have kept us fully informed as to what exactly is happening on the economic front. I hope the noble Lord, Lord Brown, or the noble Lord, Lord Beswick, will put the view of the Government on this matter clearly before the House in the course of this debate.
At least the ill-fated National Plan had the merit that one could see some coherence in it. At least there were targets to be aimed at, even if they might not be achieved. But what is the plan to-day? May we be told what has to be achieved to get the balance of payments right? Mr. Edward Heath, speaking in another place last week, said that the country needed a surplus of trade of £40 million a month for at least 40 months if we are to meet our debt repayments by the due dates. I would ask the Government whether this is or is not
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true, and what further steps are envisaged to achieve a regular surplus on the balance of payments? What are the targets, and by how much are we failing to achieve them? I believe they would be easier to achieve if people were kept fully informed of what is required.
It seems to me that during the past year since devaluation the Government have been particularly lacking in a plan. If their policy is to mop up domestic consumer demand in order to drive goods on to the export market, is this in fact the right way to go about the problem? I was one of those who drew attention to the consumer boom which occurred in the last quarter of last year. I did it by way of a Question in this House. I was then told that the consumer boom did not exist. What was meant was that the boom had not shown up in the statistics. But everyone around us could see it happening. In fact, we now know that the consumer expenditure in the last quarter of 1967 was something like £400 million up on the last quarter of 1966. Then came the Budget, with the heaviest taxation ever and still the consumer boom went on. Now an attempt is being made to reduce it slightly by the old-fashioned remedy of monkeying around with the hire-purchase regulator.
If we accept that there is a case for mopping up excess consumer purchasing power, are the Government tackling it in the right way? The way they are tackling it is with this old-fashioned blunt instrument. In the first place, the use of this regulator must surely make planning in the motor car and other industries quite impossible. Secondly, it breeds a lack of confidence in many other industries which may be contemplating expansion, when a Government can suddenly remove over £100 million or more from the economy at a stroke of the pen. This confidence is further eroded when we know that all Governments have been pretty far out in their forecasts and their judgments in the past. The present effort is meant to affect consumer spending by about 1.5 per cent. How can we hope to be as accurate as that with an instrument as blunt as this?
Thirdly, there is no guarantee that while expenditure on hire-purchase items may go down, expenditure on other things will not go up. This is particularly true in the two months before Christmas. Two of the major items in

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the statistics of consumer expenditure are on what are called "other goods" and "other services". So far as I can see, these account for nearly one-third of the total expenditure. They include such things as betting shops and gambling, entertainment, travel and household goods. In fact, these will still go on, and in the second quarter of this year expenditure on them went up to some £300 million. Yet we are hoping through this regulator to get something like £100 million out of the economy in the next few months.
I believe we are tackling this question, trying to mop up excess purchasing power, from the wrong end. Instead of making it more difficult to buy goods, in my view we should be making it more attractive to save money than to spend it, and our policy should surely be to tackle this in a really dramatic way so that people are given genuine incentives to save money. The big snag which has to be overcome is the lack of confidence that people have in the ability of any Government to prevent constant inflation, but I believe this could be overcome if we tackled it in a radical enough way. The noble Earl, Lord Jellicoe, mentioned savings. I believe this is the time to take a fresh look at National Savings. If one looks at the statistics on National Savings, one finds that there appear to be quite identifiable increases at certain intervals of time. I do not not know why this happens; perhaps the Government do. These increases appear to have occurred in 1952, 1956, 1960 and 1961. The level of savings does not appear to fall back after this quite appreciable jump occurs. I think the time has come for another attempt to force the level up.
The National Savings Movement has a very difficult job indeed and I have nothing but praise for those who work away at it, many of them volunteers. But if a dramatic move forward in National Savings is to be achieved the Government will have to do something to make the savings more attractive. I wonder whether it is not possible to conceive something which would deal with inflation, by including in the National Savings Certificate some provision for an anti-inflation bonus geared to an index, so that people would know that by going in for National Savings they would not
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just break even, which is what it looks like at the moment, but would have the incentive of getting some slight growth in the capital.
But National Savings are by no means the only method of saving. I believe we must change our whole attitude to savings in general. Above all, we must make so-called "unearned income" respectable. It seems to me crazy that we should be exhorting people to save for the future and then, when they get the income from their savings, we call this unearned income and tax it at an even higher rate than earned income. I am sure this is one of the radical approaches which must be examined very deeply indeed.
Another method of mopping up purchasing power through savings is to encourage people to put aside money from their weekly or monthly earnings to purchase shares, either in their own company or in a broadly based unit trust. In many countries to-day not only is this encouraged but the company matches the amount saved by the individual on a dollar-for-dollar or pound-for-pound basis, or some other ratio. Why should not such a contribution rank for tax relief by the company, to give them an incentive to go ahead with the plan? Why could not something similar be done for the Civil Service, and those working in other fields, like education? Why could we not have a broadly-based unit trust movement into which savings could automatically go, preferably with a contribution from the employer, whether it be the Civil Service, a private employer or anyone else? If something dramatic like this were announced I believe it would catch on and not only mop up savings but provide a higher standard for people when they retire. So much for the consumer boom. What I am saying is this: we must find a better way of encouraging non-spending than the twice-yearly attack on the motor trade and the furniture industry.
My Lords, what is being done, not merely to boost exports and get our balance of payments rectified? What is being done to encourage the economic growth of the country? I believe that we are beginning to see the results of the emphasis we have all placed on the need for greater productivity. This is a tremendous gain, and I must say I think some of the debates we have had in this

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House in the last two or three years have helped in some small way to enlighten the country on the need for productivity. The trade unions and the employers are to be congratulated on what has been achieved so far. We are getting genuine productivity agreements. There may be a few "phoney" ones still, but I think that where we do get genuine productivity agreements it is largely because they are negotiated at plant level, where productivity can really be measured.
Having said that, may I also say that in my experience there is in this field in industry to-day a lot of difficulty, on two scores. One is in the case of the company where productivity is already high and therefore there is not a great deal to give away; and the second is the leapfrogging effect of dealing with more than one union—usually a matter of dealing with l5 or 20 or more in one factory. Surely in the first case, where a company is relatively efficient, a move in the direction of co-ownership and profit sharing has a stimulating part to play. As I have said before, I should like to see the Government place at industry's disposal a team capable of helping industry to devise schemes suitable to the different circumstances of different firms.
So far as the multi-union problem, which is quite an important one, is concerned I would ask the Government how far they propose to go with the Donovan recommendations and how closely they intend to keep to the proposals. I agree with the noble. Earl, Lord Jellicoe; I think Donovan is certainly not as strong a Report as I should have wished to see. Are the Government prepared to go further than Donovan? I believe that if we can get much better industrial relations it will substantially improve our economic growth. This is where an imaginative industrial relations policy will be of tremendous use in the future for the economic growth of the country.
We on these Benches have said, and we firmly believe, that the problems of trade unions should be seen in the context of the whole framework of industrial affairs and industrial relations. The fact is that the machinery for collective bargaining is years out of date. There is much talk about making collective agreements into legal contracts, but there is totally inadequate machinery
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for arriving at agreements which could be regarded as legal contracts. The first task, surely, is to produce this machinery, rather than for us to be diverted into thinking that what we need is legal enforcement of contracts. We need machinery that will produce the contract which then can, or cannot, be enforced. In our view, this means putting the emphasis once again on bargaining at plant level rather than on a structure which negotiates agreements nationally. This means plant level bargaining on basic rates, which would be something fairly new, I should think; but if it is to be effective it must have as its focal point a formal works council on which the different unions are represented.
We have in this House a wealth of talent on this matter from the trade unions and industry generally, and I hope that we may go into these problems in more detail before we get the legislation. The improvement of industrial relations could do a great deal to improve the economic growth of this country and help to reduce the deficit on the balance of payments. I believe that what is needed now to solve our balance of payments is not a series of unrelated policies but a coherent and inter-related plan which the people of this country can understand.
3.30 p.m.
Tun MINISTER OF STATE, BOARD OF TRADE (LORD BROWN): My Lords, I am grateful to the noble Earl and to the noble Lord for two speeches which I thought were most to the point and dealt with serious issues, and, thank goodness! avoided industrial polemics. I shall not be able to answer the very large number of questions raised in these speeches but I shall deal with some of them, and my noble friend Lord Beswick will deal with others in his reply.
Since I was privileged last July to take part in the annual debate on the Finance Bill I am pleased to say that no untoward events have occurred on our economic scene to cast doubt on the economic strategy which the Government are following. Indeed, the economic indications in recent months, and particularly the trade figures, have given some vindication of this strategy. On the international scene, too, the outlook is brighter than it appeared in June, although this is not to say that there are no clouds on the horizon.

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I propose, as my contribution to this debate, to review some of the more important features of the economic scene. First of all, I should like to deal with consumer expenditure. At the time of the Budget it was expected that the level of consumer spending in the second half of this year would be lower than in the second half of last year. I did not rise when the noble Lord was on his feet, because I thought it would be better not to interrupt him; but, speaking subject to correction, I think that the Government's statement was that it would be 2 per cent. lower in the second half of this year rather than the first half, as he stated. I do not think it interfered in fact with his argument. The recent indications, however, were that the level would not be very different. Because it is so important that consumer spending be kept within limits which do not endanger the transfer of resources from production for home consumption into production for export the Government decided to take further measures to restrict home consumption.
The changes in the control of hire-purchase and rental contracts announced by my right honourable friend the President of the Board of Trade in another place on November 1 have aroused some controversy which, however, I regard as unjustified. For many years we have seen one Government after another take economic action which results in what the engineer calls "hunting". This is a phenomenon brought about by too infrequent application of control, each application being too great in its effect. The result is a tendency to swing from one side of the planned course to the other. In my view, Governments have to learn how to apply a lighter touch to the helm at more frequent intervals and to have the courage to do this at the early stages of a development of a trend. I am very pleased indeed that we have applied this touch.
The noble Earl has commented to the effect that we have selected the motor industry for our attentions. This is not true. It is calculated that something like 50 per cent. of the effects of this measure will apply to the motor trade: the rest will apply to other industries manufacturing consumer durables. There is also another facet to be remembered
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when considering the motor industry itself. First, there have been (and in saying this I do not want to denigrate an industry which is, in fact, doing extremely well in the export trade at the moment) some severe difficulties in meeting on time the demands of export markets in the export of vehicles; and I think we are all aware of this. The second point I would make is that the new registration of increased numbers of motor vehicles leads not only to expenditure on the cost of their manufacture but also, as we all know, to continuing expenditure of a high volume in fuels, lubricating oils, tyres, and the services which have to be provided to support facets of motoring. So it is a key industry from the point of view of consumption.
Let me now turn to another facet which has come in for a great deal of comment. Imports have certainly been higher than was expected. But a part of this reflects, in my opinion, a once-and-for-all boom in consumer spending which I think, particularly in view of the most recent measures, has now been checked. Of course it is difficult to be absolutely certain of these matters, but that is our view; and it is based on a reasonable investigation of the figures. Despite an increase in industrial stocks associated with the recovery in industrial output the level of imports in recent months has eased back perceptibly. Taking the four months, June to September, which tends to reduce distortions in the figures caused by transient factors, and comparing the monthly average with that of the previous four months, imports have eased back to £643 million, compared with £650 million per month. It is not a big movement, but it is a movement in the right direction.
We are not complacent about imports, however. There are no doubt many goods which we could produce here if we set our minds to it, and these could be fully competitive with those at present imported. The Government are therefore actively encouraging import saving in production where this is practicable not only through the measures taken by the Government to improve the general efficiency of British industry but also through consultations in the Economic Development Councils and direct with industry. I could have given noble

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Lords a much more detailed account of the various measures being taken within Departments of the Government and in E.D.Cs., but, after due consideration, I felt that it would not convey very much because they are intensely detailed. To cover the whole spectrum would occupy a very long time, so I am not going into detail on this subject. I can assure your Lordships, however, that this is not just paying lip service to an objective. These discussions are going on extremely seriously, and I am familiar with those which are being conducted inside the Board of Trade.
There have been many Job's comforters about who have said that the answer to our import problem lies in import control, but may I remind those in our midst who press for such controls of the effects of the U.S.A. swing to protectionism in the 1930s? I was given these figures some time ago when I visited America, and I think they are worth quoting, although they are now very ancient figures. This swing to protectionism, coupled with other adverse factors, produced the result that between 1929 and 1932 American imports fell from 4·4 billion to 1·6 billion dollars, but in the same period American exports fell still more sharply from 5·2 billion to 1·6 billion dollars. The experience of other countries was not dissimilar. I believe that it is valuable to quote these figures to-day, because it would be so easy to start a landslide of protectionism which could develop into something as horrible as that which occurred in the 'thirties. The danger exists that the United States Administration might be forced to bow to the protectionist pressures which are being exerted on it by sections of American industry. It is therefore vitally important that we take no action which might start a landslide into international protectionism. This is one of the reasons why the Government have turned their back on import controls.
The noble Earl raised the issue of restrictions on credit for imports, and I think I will give him my reply to this now, rather than wait for it to come from the words of my noble friend Lord Beswick. The noble Earl referred to the Italian scheme, which has been commonly referred to as an import deposit scheme, but in fact what it required was that payment he made for imports within a certain period
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of importation. There was a shall, fall in Italian imports in 1964, but this was almost certainly due much more to the general measures taken at the same time to deflate internal demand than to the import credit regulations. This is clear, for example, from the fact that three-quarters of the drop in the value of imports (I am talking about the Italian imports) in the latter part of 1964 was accounted for by goods which were not covered by the import credit regulations in that year. During 1964 only a limited range of goods were covered.
The regulations were extended in January, 1965, to cover all goods, the period within which payment was required being extended at the same time from 30 to 90 days. This wider but later scheme remained in operation until March, 1965, and we doubt whether, in the absence of an intensification of the present credit squeeze—which would, of course, have effects far beyond imports—a scheme of this sort would in present circumstances have a substantial effect on the level of imports. Furthermore, whatever the effect on the level of imports, the immediate effect would be an accelerated payment for imports and thus in the short run an actual worsening in the balance of payments. I have gone into this matter in detail because I know that the arguments for such measures can look extremely persuasive, but they have been under consideration in the past and it is worth while setting out fully the arguments against them.
Fundamental improvement of out economy must be based on improved productivity, but for a long time now public attention has tended to focus on the negative side of the policy for productivity prices and income. That is not surprising, since the periods of standstill, severe restraint and then moderation have each had a direct and painful impact upon the community. It is therefore encouraging to examine the positive results of the policy. Since January, 1967, the Department of Employment and Productivity has approved over 1,700 proposals for productivity agreements covering nearly 1,500,000 employees. It would be an exaggeration to suggest that all of these agreements came about as a direct result of requirements of the Government's policy for productivity prices and incomes. Nevertheless, there can be little

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doubt that the priority given by the Government to productivity criteria coupled with the policy of price restraint has been an important instrument in requiring employers and trade unions to have regard to the effect of wage negotiations on the community, and of relating increases in pay to increases in productivity. Recent evidence points to an encouraging increase in productivity. New indices of output per head show that over the economy as a whole output per person employed has risen by 5 per cent. over the last year and stands at 21 per cent. above the level in 1960.
There is little doubt that if we could solve the unsatisfactory management/employee relations to which the noble Lord, Lord Byers, referred and which exist in some industries, though not in all, and the resultant strikes and loss of output, then national productivity would rise still further. The Government believe that one of the most important causes of these unsatisfactory relations is a desire by employees for increased participation. There is, however, a need to clarify the meaning of the word "participation". Some would maintain that it implies an active sharing by employees in the executive decisions of managers. But there are strong reasons for considering that this is not the most suitable starting point for extending participation. Chapter XV of the Donovan Report has some interesting things to say on the question of participation. Like the rest of the Report, this chapter is now the subject of consultation with the C.B.I, T.U.C. and nationalised industries, but there will surely be widespread agreement with the view that the reform and strengthening of our systems for the joint agreement of work policies is the first priority in industrial relations.
What is required is a fuller realisation that the management of an industrial concern should be carried out by managerial decisions taken within a framework of agreements on pay, productivity and other conditions of work which have been the subject of discussion and negotiation between management and the representatives of employees. The Government believe, moreover, that worker representation and participation are best ensured through trade union organisation. There is another facet to this question.
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The current state of industrial relations is in some industries depriving the decisions of many managers of that degree of authority which is the prerequisite of efficient production. We believe that it is possible to strengthen the collective negotiating system in a way which will ensure that managerial decisions, taken within the framework of procedure and substantive agreements with employees and their trade unions, will gain a degree of acceptance which is not otherwise obtainable.
Though there are encouraging signs that our economy is moving in the right direction, the fact remains that the current level of unemployment is distressing. May I briefly set out the position? During the first seven months of 1968 the total register of unemployed fell continuously at an average rate of 19,000 per month, from 631,000 in January to 515,000 in July. By the latest count, however, in October it had increased again to 549,000, some 12,000 lower than a year ago but still 113,000 higher than in October, 1966. This figure included some 7,000 school-leavers who had yet to take up their first jobs, but your Lordships will all be glad to note that in most areas this year's summer school-leavers seem to have found jobs without undue difficulty. By eliminating from the figures 11,000 temporarily stopped work and 7,000 school-leavers, the remaining figures can be seasonally adjusted and so give an indication of the underlying level of unemployment. On the basis of these seasonally adjusted figures, unemployment this year rose from 2·2 per cent. in February to 2·4 per cent. in October. This is the highest seasonally-adjusted October figure—I stress that it is for October—since the series started in 1950 and is definitely too high. However, the trend now appears to be turning downwards again and the seasonally-adjusted figures of unfilled vacancies for adults give cause for some optimism. Since June of this year adult vacancies have risen on average by 4,000 per month and now stand at 195,000, the highest figure since December, 1966.
The burden of unemployment falls heavily on our development areas, and a short résumé of the Government assistance in those areas would seem appropriate. The offers of assistance under the local employment Acts are continuing to run

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at a high rate and have averaged £46 million in the four years to March 31, 1968, as compared with £30 million in the previous four years. By the end of this financial year the total additional employment estimated to arise from all the projects which have been offered assistance will be 500,000 jobs. The development areas, with rather less than a quarter of the population, received over a third of industrial building as measured by the issue of industrial development certificates in the six months April to September, 1968; and in the quarter from July to September, 1968, the proportion was 40 per cent. I think it is well worth publicising the fact that within its 60 million square feet or so of factory space in development areas, the Board of Trade always has a certain amount of available empty space, mainly resulting from tenancy changes. In addition there are now about 24 new advance factories immediately available totalling about 600,000 square feet. This means that as our export drive advances the management of a company which finds itself in urgent need of additional production facilities can, by setting these up in a development area, obtain both additional factory premises and employees with a minimum of delay.
There is, however, one snag about that comment, and I refer of course to the shortage of trained labour in these areas, and indeed elsewhere. To help solve this problem we are, however, witnessing today an expansion of industrial training both in quantity and quality which has not been paralleled before in this country. In October, 1964, there were 25 Government training centres with nearly 4,000 training places. There are now 40 with over 8,600 places, capable of training over 15,000 people per year. By the end of the year there will be 42 Government training centres. In 1969 a further six training centres will be opened, and seven more will be opened in 1970. By the end of that year there will be 13,000 training places, and 22,000 people per year will be trained in these training centres—a more than threefold increase since October, 1964.
Perhaps even more important, however, is the effect of the Industrial Training Act introduced by the previous Government, and I should like to make full acknowledgment of the foresightedness
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of that legislation. Since that Act a network of 25 industrial training boards, covering some 16 million workers and spending something like £120 million per year on increasing the supply of trained employees, has been brought into being. As a result of that Act the pernicious situation whereby some forward-looking companies spent large sums on training, only to lose their trained employees to other companies who spent little or nothing, is being corrected. Now those who carry their training responsibilities properly recoup all or a major part of the cost from a central fund, and those who fail to do so simply pay a levy without recovery. This situation has resulted in a large number of companies properly turning much more attention to this vital subject.
I must now turn to the subject of exports. Comparing the third quarter of 1968 with the average of the second and third quarters of 1967, before the dock strikes and devaluation had affected exports, they were 25 per cent. higher by value. The noble Earl suggested that the major increase in exports had occurred in the third quarter of this year. He is quite right in one sense; the most dramatic part of the increase has come about in that third quarter. Vv e had some fear in the first quarter, or even in the early part of the second quarter, that although we were looking at an increase of exports which, measured by pre-devaluation standards was large, it was, in fact, the result of an overhang from the dock strike. But a look at the total figures month by month since January will indicate that the effect in the early months of the hangover from the dock strike was nothing like so great as was feared at the time, because the line of increase has been steadily upwards since January. Eight per cent. of the 25 per cent. increase in value is accounted for by a rise in sterling prices since last October, but there appears to have been an increase of over 14 per cent. in the volume of exports, and industry is to be heartily congratulated on this result.
The noble Earl asked me whether I can give any assurances about the future of exports in the months to come. I think he is asking me to be a prophet. I know as well as he knows that the efforts of the Government are complementary to the efforts of industry, and that in great

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measure we are in the hands of our exporters and their employees in regard to the growth of figures in the future. Devaluation has helped them and given them an edge on prices; and, incidentally, this should help both with profits and with future investment which will generate more exports in the years to come.
I was most interested to see a recent Report by the Mechanical Engineering Economic Development Council which noted, on the basis of an extensive survey, that the larger the proportion of its output which a firm exports the more nearly its export profit margins approximate to its home profit margins. This is indeed an important statement, coming from an industry which exports about £1,600 million-worth of goods each year. Our own researches in the Board of Trade indicate that this applies to other sectors as well as to the engineering sector of industry. Industry and commerce have done well this year, but the pace of international competition is intense and, if we are to beat the balance-of-payments problem by an increase in earnings overseas, rather than by a decrease in expenditure on imports, then we must look for a rate of exports next year in the region of £7,000 million per annum. That is what we must hope for. I do not care to prophesy that we will get it.
Since I have been in my present job at the Board of Trade, I have noted that many companies laid the export marketing plans on which they are now operating several years ago, but the nature of overseas business is that initial efforts often take years to come to full fruition. For this reason, I believe that there is a great deal of momentum in the export drive. I believe that when you see exports go up in one year, you are usually looking at the efforts made two or three years, or more, earlier, and that because of this and the effects of devaluation the higher total which we need will be reached, but one must add—barring an international down-turn of trade.
Finally, let me say this. We are told—and by no less a body than the C.B.I.—that there is an active assumption among many of the smaller companies and businesses in the country, that the Government are hostile to them. This is not so. We are well aware that big
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businesses started as little ones. We must have go-ahead people with ideas who can start businesses and make successes of them. We must also help to ensure that small companies are efficient. To this end, we launched in Glasgow and Bristol a pilot scheme to give them 50 per cent. grants to employ consultants of all types. So far, over 150 small firms have obtained grants worth over £250,000. We are now examining the possibility of extending the scheme nation-wide, although I would stress that it will be some time before this could begin to operate. We are aware that some vital small companies which ought to grow have difficulties in finding capital. We know that they are faced with administrative burdens with which larger companies, with their bigger and more flexible organisation, can more easily cope. We have discussed these problems in the National Economic Development Council in October, and since then separately with the C.B.I. We are now considering the possibility of setting up some inquiry to discover how best these small firms can fulfil their proper role in the economy.
We are beginning to emerge from grave economic trouble and are aware that, to continue current encouraging trends, we must harness the efforts of every section of our society. I hope that my comments have helped noble Lords to a clearer understanding of some of the economic policies being pursued by Government.
3.58 p.m.
LORD BOOTHBY: My Lords, I propose to begin the remarks which I shall address to your Lordships, following the example of the noble Earl, Lord Jellicoe, with a glance at the record. It is a long story of continuous mismanagement by successive Governments, both Labour and Conservative. The noble Earl said that it was management by the Conservatives and mismanagement by Labour. I am afraid that that is not the case. It was mismanagement all round, and for forty-five years.
We returned to the gold standard, at the pre-war parity of exchange, in 1925. I opposed that. This led, inevitably, to a General Strike, a prolonged Coal Strike and massive unemployment for ten years. In 1931 we ran ourselves into the worst economic crisis the world had ever

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known. Lord Snowden's remedy for this was an Emergency Budget and an Economy Bill, described at the time by Keynes as "replete with folly and injustice". I opposed them both. Then President Roosevelt raised the dollar price of gold. Recovery at once began. The pound floated within margins held by the Exchange Equalisation Fund; and the international monetary system worked reasonably well for a few years until the war came.
After the war, what did we get? One might have hoped that the economists he d learnt a lesson. Not a bit of it! We got Bretton Woods, and the American Loan Agreement. I am proud to say that I moved the rejection of them both in another place. Why, my Lords?— because the theoretical price for fixed exchanges at Bretton Woods was adequate liquid reserves for the Free World, and they were not provided; and because, under these conditions, sterling convertibility was an impossibility, as in 1947 it proved to be. So much for Bretton Woods and the American loan.
Since then, my Lords, what have we seen? What have we had to undergo? We have been buoyant under Lord Dalton; we have been austere under Sir Stafford Cripps; we have been rigorously controlled by Sir Stafford; we have been devalued by Sir Stafford; we have watched the Prime Minister's "bonfire" of controls when he was at the Board of Trade; we have seen the disastrous results of the premature removal of building controls; we have "dashed for freedom" with Lord Butler; we have "gone "with Mr. Macmillan and with Mr. Maudlin; we have "stopped" with Lord Thorneycroft and Mr. Selwyn Lloyd; we have both "gone" and "stopped" with Mr. Jenkins, and now we have been devalued by him once again. My Lords, even the Hungarian Rhapsody, about which some of us held such high hopes, has now ended on a rather discordant note. It is small wonder that all of us, whatever Party we may belong to, are feeling a bit dizzy.
Is this a good record? My Lords, it is a lousy record—I can use no other word—and it reflects on all Governments for the last half century. What one can truthfully say is that those who have most consistently opposed the Treasury policies during the past 45 years have been
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most consistently right; and I am very pleased to say that I am nearly at the top of this list. I think it was Mr. Lloyd George who described the bankers of the City and the economists of the Treasury as penguins. It is not an inapt description. There they sit with their searched collars and their white fronts waddling from time to time in the wrong direction.
My Lords, I come now to the gracious Speech itself. I read with amazement:
"My Government will work closely with other Governments to maintain the smooth working of the international monetary system".
In so far as we have an international monetary system at all, it is certainly not working smoothly. I do not always, or indeed often, agree with Enoch Powell; but when he remarked the other day that all the bankers had succeeded in doing at Basle was to force this country into much heavier debt to foreign interests in order to defend an international monetary system which did not exist, he was not far off the target. We are not by any means through with all this Basle business, and the borrowing that we have been forced to make in order to defend what I regard, and shall always regard, as an almost indefensible system; and the reserve figures published the day before yesterday prove it. Certainly it is no time for the back-slapping in which the international bankers have seen fit to indulge during the last few week. They have nothing about which to slap each other on the back. All they have to do is to hang their heads in shame for past failures.
Then we read in Her Majesty's gracious Speech:
"They"—
that is the Government—
"look forward to the early entry into force of the Special Drawing Rights Scheme".
My Lords, this Scheme cannot be effective unless convertibility into gold is assured; and at present it is not assured. This brings me to the monetary policy, if any, of Her Majesty's Government. In Washington, the Chancellor was reported to have given full support to Mr. Henry Fowler in his efforts to bring about a fall in the price of gold. As Mr. Fowler's ultimate intention is the demonetisation of gold and its replacement as the basic unit of the world's liquid reserves by the dollar, this in itself

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was pretty sinister. That is at present the avowed intention of the U.S. Treasury—to bring about the demonetisation of gold and replace it by the dollar. But a few days later, after the Chancellor returned from Washington, we find the Governor of the Bank of England saying at the Mansion House:
"For my part, I find the tendency to attack the role of gold in the monetary system somewhat ironic, when it is not gold that is the root cause of the present uneasiness, but doubts about the alternative reserve assets. While admitting all the imperfections of gold as a monetary asset, the enthusiasm for getting rid of it owes much to the fact that in this inflationary age currencies cannot stand comparison with it".
That is true enough. There is no reserve currency unit which, in the eyes of the world, is comparable to that of gold; and well might the City Editor of the Daily Express refer the other day to:
"this topsy-turvy world of paper money".
But where do we stand now? That is what I really want to ask the Government. I think it was summed up very well by Sir Ralph Hawtrey, in a letter which he wrote this week to the Daily Telegraph:
"The policy of 'stop and go', of lighthearted expansion, alternating with brief spasms of contraction, was repudiated by the Labour Party in October, 1964, and again in March, 1966, but thereafter put confusedly into practice. In the past year it has been parodied: devaluation, an exaggerated form of expansion, has been followed by a crashing Budget, and the country is waiting for some-thing to happen next year".
That is Sir Ralph Hawtrey's verdict; and anybody who has any knowledge or experience of Sir Ralph Hawtrey will not lightly disregard his views.
Looking back, my Lords, saddled as they were with the atrocious legacy bequeathed to them by the Tory Government (and I am perfectly prepared to hand that to Ministers, because I am strictly non-controversial in all the remarks I ever make, and I try to maintain an impartial view on every subject, particularly between the great Parties in the State), the Government, in retrospect, ought to have devalued at once and imposed, not a surcharge on imports, which was against the rules of GATT, but a control of imports, which was not. And why, being a so-called Socialist Government, they flinched from this I shall
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never be able to understand. Socialism surely stands for control over the national economy—dirigisme, as the French call it—but they ran from it like hares. I have said to your Lordships before that, judging from the language of Mr. Anthony Crosland, the President of the Board of Trade, you might think his name was Richard Cobden or John Bright. He is living about a century after his time. But the Government did not then impose, and still have not imposed, import controls, although I think that in the end they will have to impose some control on imports.
They did not devalue until it was a little too late and it was not so easy for them as it would have been had they devalued at once. They could then have made the splendid excuse that the Tory Party had handed them such a mess that they could not fail to do it—and if they had done so it would have been accepted by the country—instead of saying that they would never devalue and then doing it. That was bad politics. As I am quite sure the noble Lord, Lord Beswick, as a Whip, will realise, you cannot put this sort of thing over, at any rate not easily, in the modern political world.
My Lords, you will never get a balance of payments by successive and violent intensifications of the credit squeeze, or by an over-high bank rate which bears heavily on the national economy, and costs the Treasury and productive industry generally a great deal of money. Nor should it be assumed that cheapening the cost of money necessarily increases the supply of it—I am now referring to bank rate. The two things should not be confused. The supply of money, as has been said in this debate this afternoon, can be controlled by credit regulation through banking control; and by the restriction of consumer spending through indirect taxation and a tightening of hire-purchase facilities. I do not quarrel with the Chancellor over his latest curbs on hire-purchase. I do not even quarrel with Mrs. Castle, for that matter. But the curbs announced are not enough to close the gap, which is now running at £500 million ahead of Treasury forecasts. Imports for the first three-quarters of 1968, this year, were over 10 per cent. higher than for the equivalent period last year. That will not do. And that fact is not only primarily but solely responsible for our

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adverse balance of payments. It is therefore, to my mind, essential to have some kind of a ceiling on imports unless and until the balance of payments is rectified.
My Lords, your Lordships will be relieved to hear that I am drawing to a conclusion. But, looking forward for a moment, I still believe what I have said again and again to your Lordships and in another place: that fixed exchanges, unco-ordinated national monetary policies, non-discriminatory multilateral trade and free convertibility with a fixed price for gold simply cannot be made to mix. That is what Bretton Woods tried to do, and that is why it has failed. I have frequently referred—and have done so in this House on at least two occasions—to the Genoa currency resolutions of 1922 which advocated a monetary convention based on a bullion standard and a gold exchange standard, and the regulation of credit with a view to preventing undue fluctuations in the purchasing power of gold.
Sir Ralph Hawtrey, in a letter to the Daily Telegraph—the same one—says that the position of gold as the basic unit of the world's liquid reserves requires the free interchangeability of money and gold at a fixed parity, and that it is inconsistent with flexible exchanges. With profound respect, I disagree with Sir Ralph on this. By "flexible exchanges" I do not mean completely free exchange rates; I mean wider margins than those imposed at Bretton Woods. At present and this affects everyone—all economic pressures, and particularly those relating to the balance of payments, which might otherwise be corrected by minor variations in the exchange rate have to be met either by difficult methods, such as drastic curbs on wage increases which the Government are now imposing; or, as in 1926, by impossible methods (as we found out) involving all-round reductions of wages right across the field. We cannot do that. The Government are having sufficient difficulty in curbing wage increases.
This is the dilemma they are in, and it is because they do not possess the reserves necessary to fulfil the role they are trying to play. We resolved it for a few years between 1933 and the outbreak of the war by the method I have already mentioned; and I believe we could so resolve it again. The workers should
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not be expected to take upon their shoulders all the strain of an adverse balance of payments by accepting curbs and restrictions on wage increases or, in some cases, wage reductions. I prefer, as the noble Lord, Lord Brown, said, to avoid "hunting", and to achieve results by lighter and more frequent touches on the tiller, which a rather more flexible exchange rate could do. It is not so very much. We did it with the help of the Exchange Equalisation Fund before the war. Why should we not do it again?
Therefore, my Lords, I come, in conclusion, to the "Boothby remedies" for world economic problems. They can be summed up under five headings First of all, a rise in the price of gold. If this is applied to all currencies it could by no stretch of the imagination be described as devaluation of one currency. Second, the regulation of the flow of money by means of credit policy. This was advocated at Genoa and advocated on and off ever since; but never yet applied. Third, the remodelling of the International Monetary Fund into what I might call a "central bank for central banks", with similar powers of credit creation and contraction. You would thus have to use a popular phrase of the moment, a two-tier check on inflation, a fivepenny and a fourpenny. The fourpenny would be the national regulation of credit; the fivepenny, the international regulation of credit combined with every incentive for increased production and productivity.
Fourth, I would recommend a series of substantial gold loans to the under-developed countries of the world. This can be done only if the price of gold is raised. Personally I should like to double it—with strict controls against inflation. These controls could be imposed by the international monetary authorities, which are the Fund and the Bank in Washington. My Lords, we are gradually closing—nobody denies it—the gap between the "haves" and the "have-nots" within the prosperous Western World, the industrial Western world. But the gap between the prosperous countries of the Western world and the developing countries of Asia and Africa is widening every day. The position is getting worse. Looking ten years ahead, it is the most urgent world problem confronting us. Unless we are in a position to make adequate loans

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to these under-developed countries (which we could if we were brave and courageous enough to raise the price of gold generally) that gap will become steadily worse. And it is a gap that should be haunting all of us at the present time—especially those who have visited Asia or Africa within recent years.
Make no mistake, my Lords, we are not at the end of the argument about gold—not by a long chalk. The price simply must be raised if the economy and monetary system of the Free World are to survive for any length of time. As Sir Frederick Leith-Ross said nearly ten years ago, the dollar of 1960 was not then the dollar of 1934; and by maintaining an artificial price for gold you reduced by a colossal amount the volume of international liquidity. Still less is the dollar of 1968 the dollar of 1934.
As my last point, I say, that in my view, until we get our balance of payments right, import controls are absolutely essential. Do we really need a thousand cheeses? We have Stilton, we have Cheddar, we have Cheshire, we have Double Gloucester; they are all quite good. But go into the shops, go to Fortnum and Mason, look around and see what is on show. It is really bewildering—a lot of luxury nonsense. It is due to this incredible Cobden and Bright attitude on the part of the Board of Trade. If we were to impose some restrictions on unnecessary manufactured goods and on unnecessary luxury goods, we should not be going against GATT. We were when we imposed a surcharge; but we are not when we impose import controls when in balance-of-payments difficulties. I do not believe that we should have any retaliation at all. The French have had very little. As I have said, excessive imports are entirely responsible for our adverse balance of payments. Let the Government show some sense. Let the Chancellor show some sense and behave like a prudent housewife—
LORD BROWN: My Lords, may I interrupt the noble Lord? I have listened to an extremely interesting speech, but I think that the noble Lord is now, at the end of it, commenting in a way that puzzles me. We have these luxury goods coming into this country, I agree; but what is he to do about
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all the luxury goods we are exporting to other countries? If other countries retaliate against what they regard as luxuries from the United Kingdom, then, on balance, we should be no better off.
LORD BOOTHBY: My Lords, all I am saying is that when a prudent housewife finds that she is spending too much in the shops, she spends less. By some means or other I think Her Majesty's Government will have to find a method—if it is not import controls I cannot think of one; but they may find another—of spending less on manufactured goods which we can equally well make for ourselves, and on luxury goods imported from abroad, until our balance of payments is rectified. For that is what is doing the damage at the present time. I am quite sure that my noble friend would agree with that. It is excessive imports that are at the root of the trouble at this moment.
My Lords, there is Europe as well. We have sometimes to think of that. They will never accept the dollar, and, with it, American economic domination, as an alternative to gold. If we persist in abject subservience to the United States Treasury just because we are so heavily in debt to them, we may as well "chuck" altogether our application to join the Common Market.
My Lords, before I sit down I must apologise for having kept your Lordships for so long, but I have not spoken for a long time; and I will not speak again for years. I should just like to say that I read with some amusement the passage in the gracious Speech which says that:
"Legislation will be introduced to help the development of tourism in Great Britain".
I do not know what legislation can be introduced to help the development of tourism, but I can suggest one small clause or two in the Finance Bill when the Chancellor comes to introduce his next Budget. It would provide for the remission of the selective employment tax, which is doing more damage to our tourist industry at the moment than any other single thing. I am not asking for the complete repeal of the tax; that would be too much. It was the brainchild of some of the most brilliant economists of the Treasury, and one could not ask them to accept the fact that it has been a failure. That would be asking

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too much. But I think it is a child that should be modified. Some children ought to be modified; and some more often than others. I beg the noble Lord who is going to reply to give us some assurance that between now and the Budget the Chancellor will have a pretty hard look at S.E.T. and see what measures should be taken to benefit certain sections of industry; and certainly the hotel industry is one upon which it presses very heavily.
My Lords, if I may make one final suggestion in connection with tourism it is on the question of trains. It may sound odd, but many foreign visitors have commented on this point to me. I think that we have the filthiest trains in Europe. I am not talking about the smart inter-city expresses; I am talking about the ordinary humdrum trains which we all have to take from time to time, and particularly the suburban trains. My Lords, you have only to take the Underground Railway—and that in itself is not a very pleasing sight—and move in either direction, to Victoria on the one hand or to Liverpool Street on the other, and look at the suburban trains standing in either of those two stations. You will see that they have not been touched with a cloth or a brush for about 22 years. I suggest, quite humbly, that if Her Majesty's Government are really out to boost the tourist trade they might drop a cautious hint to the Railways Board that perhaps somebody might, just once a fortnight, put a washer on the windows of those trains and clean the carriages, because at the present time one flinches before one gets into them.

RONAN POINT FLATS INQUIRY REPORT
4.22 p.m.
THE PARLIAMENTARY SECRETARY, MINISTRY OF HOUSING AND LOCAL GOVERNMENT (LORD KENNET): My Lords, I think that this may be a convenient moment for me to repeat a Statement which is being made in the House of Commons by my right honourable friend the Minister of Housing about Ronan Point. The Statement is as follows:
"The House will recollect that on 17th May I appointed Mr. Hugh Griffiths, Q.C., Professor Sir Alfred
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Pugsley and Professor Sir Owen Saunders, to hold a public inquiry into the collapse on 16th May of pan of a block of flats, known as Ronan Point, in the London Borough of Newham. I have today published their Report, and copies are available in the Vote Office.
"I should like to pay tribute to Mr. Griffiths and his colleagues for the careful investigation they have made and for the clear way in which they have set out their findings and recommendations. Her Majesty's Government fully accept the findings as to the causes of the accident, and are in broad agreement with the recommendations for action.
"Ronan Point is a 22-storey block of flats, built of large prefabricated concrete panels to form load-bearing walls and floors. The Report establishes that the immediate cause of the accident was an explosion following a gas leak in an 18th floor flat. The explosion blew out panels forming part of the load bearing flank wall. This led to the failure of other structural components which in turn caused the whole South-East corner of the block above and below the seat of the explosion to collapse. The Tribunal describe this type of cumulative failure as 'progressive collapse'.
"The Tribunal find that this behaviour of the building was inherent in its design and was not due to faulty workmanship. They state that progressive collapse after such an accident can be avoided by the introduction of sufficient steel reinforcement to provide effective ties at the joints between the structural components, and by so arranging the components that loads can be carried in alternative ways if a failure occurs.
"The Report also examines the possible effects of high winds on building of this kind. This is the subject of continuing study, the results of which are not fully reflected in the Report. We shall take account of the latest appraisals in considering this part of the report.
"The Tribunal recommend that existing blocks in large panel construction over 6-storeys in height should be structurally appraised and where necessary strengthened. They

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recommend that the gas supply should be cut off in any blocks judged susceptible to progressive collapse until they have been strengthened. Provided the danger of progressive collapse is removed, there is no reason, in the Tribunal's view, to prohibit the use of gas in high buildings, and no reason why forms of construction using large pre-cast concrete panels should be discontinued.
"They further recommend that the building regulations, and the codes of practice incorporated in them, should be revised to deal with these risks.
"The House will recollect that, following the receipt of a letter from the Chairman, we advised local authorities in August to cut off the gas supply from blocks where there appeared to be a risk of progressive collapse. This removed the principal risk of accidental explosion. After consultation with the building industry and the local authority associations we shall shortly give local authorities advice about the urgent appraisal and, where necessary, strengthening of existing blocks, and about the design of new blocks, to secure them against the risks to which the Report has drawn attention. In this work we have had and shall continue to have the valuable help of the National Building Agency.
"We are putting in hand an urgent revision of the Building Regulations. The British Standards Institution have agreed to undertake urgently the examination and revision of codes of practice as recommended in the Report. We intend to incorporate the results in the Building Regulations as they become available. This work will be supported by expert advice from the Building Regulations Advisory Committee, the Building Research Station, the National Physical Laboratory, and the Joint Fire Research Organisation, and by whatever further experimental work may be found necessary. The Government accept responsibility for ensuring that the regulations and codes of practice are kept up to date.
"We are considering urgently a number of subsidiary recommendations.
"Large panel construction of high blocks has been used in this country
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since 1958. But it is clear that the dangers to which this occurrence has drawn attention were not appreciated by the designers of these buildings, by those, including Government Departments, my own among them, responsible for laying down or advising on standards of construction, and by the many professional bodies consulted in the formulation of those standards. As, however, the Report makes particular reference to the National Building Agency, I should like to say that the work the Agency have done on housing in recent years has followed an order of priority agreed with the Ministry.
"Finally, in expressing the Government's resolve to put matters right swiftly, I hope I may be excused for reminding right honourable and honourable Members, first, that the Tribunal have found nothing wrong with construction systems using load bearing panels that cannot be put right; and, secondly, that although certain restrictions may have to be applied or continued, they do not amount to a prohibition of the use of gas in blocks of this kind. We have done and will do all that is humanly possible to avoid a repetition of this rare but tragic occurrence."
LORD NEWTON: My Lords, I am sure that the House will be grateful to the noble Lord for repeating the Minister's Statement. By any standard it is a grave statement about a tragic occurrence, but I think that in the circumstances—although, of course, I have not yet had the opportunity to read the Tribunal's Report—it may be regarded as a reasonably satisfactory statement.
My Lords, the Minister has said that the Government fully accept the findings as to the causes of the accident and are in broad agreement with the recommendations for action. But the really serious thing about this Statement seems to be that the Tribunal found that the behaviour of this building was inherent in its design and was not due to faulty workmanship. Furthermore, your Lordships will recall that towards the end of the Statement the noble Lord said:
"But it is clear that the dangers to which this occurrence has drawn attention were not appreciated by the designer of these buildings, by those, including Government Departments, my own among them, responsible for laying

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down or advising on standards of construction, and by the many professional bodies consulted in the formulation of those standards."
My Lords, I regard that as being an alarming state of affairs. I will not linger upon the implications, because your Lordships will see the implications for yourselves. I do not want to take the Government to task too much about this, because this Statement is probably as humble an apology as any Minister or Government Department is ever likely to make. Certainly I think it is in effect the humblest apology that I have ever heard the Minister of a Government Department make. Quite obviously the building regulations must be revised very quickly and also the codes of practice in the trade. I think that the encouraging thing about this Report is that the Government realise that.
4.30 p.m.
LORD WADE: My Lords, may I join in thanking the Minister for repeating this Statement and in paying tribute to Mr. Griffiths and his colleagues. This is a serious Statement. May I ask whether compensation was paid to the tenants of Ronan Point flats who suffered from the collapse. And who will bear the cost of this urgent re-appraisal—the Exchequer or the local authority? I know that a study is being made of the effect of high winds on these flats. I recollect the remarkable case a number of years ago of the collapse of cooling towers as a result of wind pressure and I am glad to hear that this question of flats is being studied. But how long will this re-appraisal of structures and study of wind pressures take? In the meantime, may I urge that everything possible is done to assure the tenants of these block of flats that their safety is not in danger.
4.32 p.m.
LORD KENNET: My Lords, I am grateful to noble Lords for their questions and for their understanding words about this matter. The noble Lord, Lord Newton, spoke of a humble apology from the Government and I would not wish to disassociate myself in any way from those words. But it is in the nature of things that it is the Government who have to come forward and make Statements after disasters have arisen. When the noble Lord comes to
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read the Report he will be able to form his own view about how the blame for this most regrettable incident should be distributed among all those concerned in it.
On the question of the speed of the revision of building regulations and codes of practice, this has already begun. As a matter of fact, the question of a unified code for concrete building was already under revision at the time of the accident. Naturally, that revision has been speeded up and changed in direction since the accident.
At the moment I am not in a position to say who will bear the cost of reappraisals because I am not in a position to say how much re-appraising has to be done. It all depends how far we have to go into the history and structure of each building. When the Government see the extent of the re-appraisal work necessary, then they will be able to come to some conclusion about the costs. On the question off compensation to the dwellers in Ronan Point, I am sorry that I am not in a position to inform the House about that without notice, but I will do so later if I may.
On the question of winds, I am advised by the Ministry's departmental Working Party, which has now been set up to co-ordinate these appraisals, that the risk from wind is of a much lower order than the risk from accidental explosion. The Griffiths Committee rightly draw attention to the need to review the present standards of protection from wind. The British Standards Institution have been working on this for some time, and a revised code of practice will be published for comment early in 1969. Meantime, the Building Research Station has just published a digest on wind characteristics and will publish a further digest on wind loads in January. All this work takes account of the most up-to-date research and information, some of it later than that referred to in the Griffiths Report. We shall take it all into account in giving advice to the local authorities.
LORD WOLVERTON: My Lords, while thanking the Minister for the important Statement he made, may I ask him whether it would be possible to strengthen these buildings without evacuating the tenants? If the tenants have to be evacuated, what arrangements

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will be made? It is important that they should be temporarily housed while work goes on to make the flats safe.
LORD KENNET: My Lords, the question of evacuation must depend on the measures taken for strengthening, and these must depend on the appraisals which are only starting now.
BARONESS HYLTON-FOSTER: My Lords, may I ask whether the gas used in this block of fiats was the kind that smells or that which is sometimes called odourless?
LORD KENNET: My Lords, as my noble friend will see when she reads the Report, it was the ordinary smelly gas, and it was smelling that night.

ADDRESS IN REPLY TO HER MAJESTY'S MOST GRACIOUS SPEECH
4.35 p.m.
Debate resumed.
LORD JACQUES: My Lords, the gracious Speech indicated that the Government have maintained their application for entry into the European Communities. This could give rise to substantial alterations in our fiscal system, and I want to refer to one aspect, that of indirect taxation. There is considerable merit in the United Kingdom purchase tax. First of all, it is levied at one level only—the wholesale level, where goods are sold in bulk; and it is therefore cheap to collect. In addition, there is very little evasion. But, above all, it is flexible and progressive. Food, solid fuel, certain household goods and children's wear, are entirely free of tax, and those goods which are charged to tax are charged at four different rates.
There was a strong case for extending the tax. At the present time, it deals only with goods. There was a strong case for extending it to services, which are at least as much a luxury as some goods that are taxed; but, instead, the Government preferred selective employment tax. This, although a tax upon labour, involves a tax on the consumer, and approximately 90 per cent of S.E.T. is actually paid by the consumer. It is paid not on a relatively few luxuries but
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over the whole field of consumer purchases. It is a retrogressive tax, with only one advantage: that it is cheap to collect. A mistaken use of the standard industrial classification has made S.E.T. perhaps the piece of fiscal legislation with more anomalies than any other. Furthermore, in some trades, S.E.T. is very easily evaded. If the worker is paid piece rates, and a suitable contract is entered into, the worker can be made self-employed and totally exempt; and this happens in many trades, particularly the building trade.
Presumably, both of these taxes would be absorbed in an added-value tax, either in preparation for membership of the Common Market or after entry into the Common Market. An added-value tax differs from purchase tax, in the first place, because it is collected not at one level but at every level, but only on the added value. That is to say, every business pays to the Revenue the tax that it has collected from its customers, less the tax which it has paid on the goods and services it has bought. The added-value tax has one merit—a theoretical merit, but nevertheless a merit: it is, in effect, a tax upon costs plus profit, and because it is a tax upon costs plus profit it could be an incentive to keep down costs. But it is extremely doubtful whether any tax which can be passed on to the customer can be an incentive to keep down anything.
If an added-value tax were substituted for purchase tax and S.E.T., and were carried right down to the retail level, it would have very serious disadvantages. First of all, the added-value tax carried right down to the retail level would have ten times as many collecting points as the present purchase tax. It would therefore be costly to collect; and, in addition, evasion would be more likely. But, worse than anything else, it would be likely to be a regressive tax. An added-value tax that is carried right down to the retail level is usually at a single rate because it is not practicable to analyse goods at the retail level so that some can be free of tax and others can be charged at several different rates. For that reason there is often a single rate of tax, and it is a regressive tax over the whole field of consumer expenditure. This, however, can be avoided by the simple expedient of charging the

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retailer of goods a higher rate on the cost than he would have been charged on the selling. For example, if the rate were 10 per cent., then he could be charged 12 per cent. on the cost, instead of 10 per cent. on the selling. That would mean that the retailer would be brought within the tax, but outside the administration of the tax.
This, my Lords, would have three fundamental advantages. First of all, the number of collecting points would be drastically reduced; secondly, there would be less evasion; and thirdly, and above all, there would be flexibility and progression if we wanted it. Because the tax finished at the wholesaler's invoice, it would mean that it would be possible, as it is now, to have a large range of goods, like food, solid fuel and children's wear, free of tax; and for those goods and services which were taxed, it would be possible to have a variety of rates.
It has been suggested that an added-value tax should absorb some of our corporation tax. In point of fact, there is not a very strong case for this. There has been a dramatic fall in company taxes in the last twenty years, and especially in the last ten years. In 1946, company taxes were 44 per cent. of trading profits. In 1956 they had fallen to 29 per cent., and by 1966 to 17 per cent. largely because of investment allowances. It would be unreasonable to reduce corporation taxes further by passing them on to the consumer in an added-value tax or in any other such tax.
In conclusion, my Lords, I would say two things. First of all, if we have to change to an added-value tax it is possible to have a progressive and flexible tax in accordance with the best traditions of British fiscal policy if we want it. Secondly, if in this brief maiden speech I have been too controversial for any part of the House, I apologise.
4.44 p.m.
LORD FRASER OF LONSDALE: My Lords, for my part, I found the speech of the noble Lord, Lord Jacques, on taxation and various forms of taxation fascinating, and I should like, if I may, personally, and I am sure on behalf of noble Lords on all sides of the House, to congratulate the noble Lord upon an admirable maiden speech. I, for one, remember
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with pleasure, in another place and in this House, the right honourable gentleman A.V. Alexander, later the noble Earl, Lord Alexander of Hillsborough. I thought that the co-operative societies were extraordinarily fortunate to have him to speak for them when necessary, and to bring his wisdom to both Houses. Now we welcome the noble Lord, Lord Jacques, who has spent most of his life in the Co-operative Movement. He was a brilliant youngster in that Movement, attaining high office at an early age, and ending up in its highest offices as chairman and president. It is a great advantage to the House that the noble Lord should have joined it, and I hope that we may have the pleasure of hearing him again as frequently as he feels that he can speak.
My Lords, I am going to advocate something similar, but slightly different, to the pleas made by my noble friend Lord Boothby. I am going to advocate a floating rate for the pound and, indeed, for the exchanges, and a floating price for gold. Before I deal with the merits of this matter, which I shall do as briefly as I can, I should like to say one or two things that touch upon the subject. First of all, I would say that I have many friends in South Africa, including Members of the Government, and I have interests there which I have often declared. But what I am about to say does not arise out of any contact with them. I have neither the right, nor even the wish, to represent either the view of South Africa or of the South African Government. If what I say is agreeable to some who live in South Africa, so much the better, but what I say is entirely ray own view.
There is one other general point. It is said that if you raise the price of gold you will benefit South Africa particularly, because 75 to 80 per cent. of all the gold in the free world comes out of South Africa; and it is said that you will benefit Russia, where a great deal of gold is mined, although nobody knows quite how much. Then it is said that it would be wrong to benefit these two countries because of their systems of government. Some dislike one, and some the other, and some dislike both.
I venture to think, my Lords, that political thought—I would almost call it an hysterical thought—is not something to

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which we should pay any attention. It is like admitting the doctrine that it is a good thing to cut off your nose to spite your face. Though there may be some noble Lords on the opposite side of the House, or even on this side, who believe that, I have not met them. On the economic side, I would argue that anything which can benefit the trade of the whole world, even if it particularly benefits one or two countries that you do not happen to like, must be acceptable because the trade of the world is, or at any rate should be, indivisible.
My Lords, I will now try to show that freeing the price of gold and freeing the exchanges will benefit the whole world. Before I do that, I should like to make one comment on a line that I read in The Times last Thursday (it is almost unbelievable) where we were told that UNO had again resolved that South Africa and Portugal should be boycotted—and this in spite of the wise advice given by the noble Lord, Lord Caradon, who said that you cannot boycott South Africa or Portugal unless you are able to mount a first-class universal war; and UNO cannot do that. This, therefore, is another example of the emotional attitude taken in regard to anything to do with South Africa, and in some quarters anything to do with Russia. I want to beg anyone who listens to me, or who reads what I say, to set aside these emotional considerations and to try to see the world as it really is.
Now it is said that if you do not have a fixed price for gold, and if you do not have a fixed rate of exchange between the various currencies, there is always instability. I argue exactly the opposite. It is when you have these fixed points that you must inevitably get instability because they are certain fixed points in economics in which all points are not fixed. If all points were fixed in a theoretically perfect Communist world, possibly even a Socialist one, you could imagine their sticking fast, and if they were well adjusted and well fixed they might stay there. But wages are not fixed. Even Mrs. Barbara Castle cannot fix them. Other items in our living expenditure are not fixed. Many aspects of our lives and our international trade are not fixed. Therefore, you cannot have a fixed price for exchanges or for gold without getting
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into a state of disequilibrium; and that is what has happened. It is what has happened to the world for very many years—as Lord Boothby told us, for 50 years. There I sympathise with him. I think we have all been more or less wrong for the last 45 or 50 years in this matter.
I would remind noble Lords that the idea of freedom among the exchanges and freedom for the price of gold is no invention of mine; it is no invention of the noble Lord, Lord Boothby. In the last hundred years, more than half of that century was spent under a free system of the price of gold and the exchange rates, and it is only in the last 40 or 45 years, when, as Lord Boothby told us, everything has gone wrong, that we have had these fixed points. Perhaps the most dramatic way to realise it is to call to mind that it was in 1934 that President Roosevelt fixed the price of gold at 35 dollars per ounce. That is 34 years ago. During the intervening time almost every other price in the world has risen three times, whether it is the price of labour, the price of metals, the price of manufactures or of agricultural products. How, then, can we expect there to be equilibrium if a part of the monetary system, and that part most trusted by the world generally, is held in this suspended condition in which its value is not realistic?
Why is gold so important? Why must we resist the American view, or the view of some Americans, that you can write gold off or demonetise it or use it only for jewellery and for filling teeth? My Lords, because gold has for centuries been regarded by mankind as a stable element which can be trusted—and men's minds do not change quickly; even over the centuries they do not change. Not only has it been trusted, but it still is, whereas paper money is not. It is difficult enough to trust your own Treasury.
LORD BOOTHBY: Impossible!
LORD FRASER OF LONSDALE: It is much more difficult to trust the Treasury of some other nation. Lord Boothby called attention to the paragraph in the gracious Speech, of which I too have a note, which ended up with the words that we hope to make these Special Drawing Rights work. That is what the Government hope to do. Well, if they do it in a decennium, I shall be surprised. If they do it ever, I shall be

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surprised. They certainly cannot do it in time to cure the ills of to-day. They are at the heels of the Americans, I am afraid, and we must use more influence in New York or Washington, or else go on our own and not be so afraid of ourselves.
My Lords, why does Britain, and why does the United States, refuse to let the price of gold rise or to let it go free? Why? I think Britain does it simply because it is following the United States, and also because it has followed a wrong monetary and currency policy for so long that it has become used to it. I think the United States does it because of its pride in the dollar: "the dollar is the dollar is the dollar", and any idea that anything else could be more important would hardly be acceptable to the ordinary American. But they will have to learn.
How, then, do the Americans try, hard as they are trying now, to maintain this false position?—and I think it is a false position. They do it by all kinds of expedients: by borrowing here, by borrowing there; by swopping here and swopping there; and even, I fear, by "cooking" the books and fiddling the figures, and by changing the loans from one form to another to make them look better to the voters. This system is not under the control of the voters; it is not even under the control of Congress, any more than the behaviour of our Treasury here is under the control of our Parliament. Clever men in the Treasuries, whom one must trust and who do their very best, have far too much power. In my opinion, it would be very much better if they were linked to gold at a free price, which would be a brake upon their freedom.
How would it be done? I hope in concert with the United States; but if not, then in concert with nobody, but on our own initiative. We would tell the Bank of England to buy or to sell as much gold as is forthcoming at the market price. The price would settle itself from day to day and the variation might be a cent here or a cent there, up or down, or a penny up or down, and we should not get this build-up of pressures leading to financial crisis. What are the two advantages? The advantage I have just described is one. I call it self-adjustment. The price would be
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self-adjusting. The other is that probably the price would rise, almost certainly it would rise soon; and that is not surprising in view of how very far it is behind.
I have very little else to say, my Lords, except that I am convinced that the financial and monetary crisis will arise again. I agree with the noble. Lord, Lord Boothby, that we cannot look to the future, not even to the next few years, perhaps not even the next year, without meeting another financial crisis. It will then have to be met by one or other of these expedients: borrowing, "freezing", "fiddling". How much better to face the fact that it is coming, and to give gold, which still plays a very important part in world liquidity, a chance of using itself more freely! If you doubled the price of gold you would double the effectiveness of all the gold in all the banks, as well as encourage the mining of more gold. This is not merely a traditional view, but a view which I urge upon the Government and, indeed, upon your Lordships. Ten years ago, when Lord Boothby and I, and one or two others, started talking about this, we were voices crying in the wilderness. Nobody listened. There almost seemed to be a conspiracy of silence in the financial papers and among the financial writers about mentioning gold or the price of gold. Now it is being discussed almost every day in the financial columns and in the weekly financial papers, both here and in the United States. This shows that this view is not a partial one, not a foolish one, and no longer, I think, a minority view. I can only hope that the Governments in Washington and here will learn in time that it is possible to avoid crises by organising to meet them.
5.0 p.m.
LORD FRANCIS-WILLIAMS: My Lords, it gives me very great pleasure to be the first Member of your Lordships' House on these Benches to congratulate my noble friend Lord Jacques on his maiden speech. It was, I thought, pertinent, factual, well-considered and short—all attributes to endear any speechmaker to your Lordships' House. I hope we shall hear him often, and I am convinced that we shall always gain from doing so.
Like the noble Lord, Lord Boothby, and the noble Lord, Lord Fraser of

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Lonsdale, I too wish to touch on monetary questions, which rank only a small, rather insignificant paragraph in the gracious Speech though they are among the most important subjects facing us in the world to-day. But I shall not do so in the swashbuckling style of the noble Lord, Lord Boothby, which I cannot hope to emulate, much as I admire it; nor shall I claim to have been right on quite so many occasions as he did—
LORD BOOTHBY: My Lords, I have always been right.
LORD FRANCIS-WILLIAMS: —though I like to think that from time to time we have been right together.
In the main, I want information. I hope very much that the noble Lord, Lord Beswick, when winding up, will be able to inform us when the Special Drawing Rights Scheme is likely to come into effect. I must say that I share some of the doubts of the noble Lord, Lord Boothby, and the noble Lord, Lord Fraser of Lonsdale, about this Scheme. But we have embarked upon it, and therefore it would be nice to know whether it is in fact proceeding according to plan or whether there have been any hitches; and, if it is proceeding according to plan, when we may expect to see it coming into effect.
I should also like to know, and very much more in a way, whether anything is now happening in regard to long-term discussions on the role of sterling as a reserve currency and of a method to replace it by some international system. Let me say at once that I do not share the faith in gold of either the noble Lord, Lord Boothby, or the noble Lord, Lord Fraser of Lonsdale. I really think it is about time we got rid of that particular totem pole.
LORD BOOTHBY: My Lords, would the noble Lord forgive me for a moment if I venture to suggest that it is not only a matter of my faith in gold, or of that of the noble Lord, Lord Fraser of Lonsdale; a lot of other people have faith in gold.
LORD FRANCIS-WILLIAMS: My Lords, there have always been a lot of people ready to believe in a lot of silly things in the world. I believe and hope that it is possible, at this stage in human development, to devise an international
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exchange scheme which will be more directly based on the real trading needs of the world and on our powers of production, and on our desires, if I may say so, of consumption.
Many such schemes have been proposed, but I see that although many held the view, when the 2,000 million international dollar credit arrangement was announced in September, that we were moving and making a first step in the direction of a more intelligent and viable international exchange system (indeed, The Times rightly called the arrangement for this dollar credit "epoch-making", simply for this reason), the White Paper, The Basle Facility and the Sterling Area, says that although there has been discussion on schemes for taking over some of the functions of sterling as a reserve currency no practical possibilities of this exist for the time being. The Paper calls the discussions "academic". This is a word the Treasury always uses to express its distaste for anything which might in any way shake it out of its complacency, although there are no "academics", in the worst sense of the word, worse than those who exist within the Treasury walls.
Of course, for the time being the 2,000 million dollar credit has strengthened sterling as a reserve currency, and I do not disagree with that. It is obvious that if we are going to see some new mode of international exchange we should try to do so from a position of strength; that we should, so far as possible, do so in a planned way and not simply because the existing international exchange units have gone down in collapse. I wish to know—and I hope that the noble Lord, Lord Beswick, will be able to throw some light on this—whether this 2,000 million dollar credit is regarded as providing a temporary means of strengthening the exchange function of sterling or whether we are thinking of it as bolstering up sterling until we can return again to a position in which we accept sterling as being, with the dollar, one of the two main exchange units in the world, subject—as we have seen over nearly the past half century—to the constant pressures upon our economy and upon our standards of living that arise from it.
I take the view which I saw expressed in the Financial Times in January, when the American dollar was under pressure

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and the American Government was forced to take various measures, including that of trying to stop the people of the richest country in the world from ever going abroad for their holidays—that is, that one cannot escape the thought that there is something extraordinary about a world system in which freedom of investment and freedom of trade have invariably to be sacrificed to the gods of currency stability, even at the expense of instability in everything else. I know very well that my noble friend Lord Beswick shares at least some of my views on this matter personally, because I well remember travelling on the "Queen Elizabeth" some twenty years ago and finding him a fellow passenger. We spent many happy hours drinking the excellent and cheap champagne cocktails and discussing this question of the need for a new form of international exchange, and I hope that he will be able to tell us whether not only history but Government and Treasury policy have shown, or are showing, any real practical signs of at last catching up with us.
All that I want to say beyond this is to express a certain feeling of apprehension and dislike for the latest hire purchase cutback. I know this is called "fine tuning" and is supposed to be one of those economic mechanisms which you operate when what is called a "touch on the tiller" is necessary. But it is a touch on the tiller which particularly affects certain groups of people, and especially the young people recently married knowing, more perhaps than ever these days, that they have an expectation of a reasonable regular income, of building up their houses and homes and having a car to go out a little at the weekend. When you employ this particular kind of regulator you hit them. You do not hit the group of people who can go out and buy a car or anything else they require out of the money in their pocket or in their bank, which group I suppose would include a great many in your Lordships' House who, either because we are older and have had a longer time to earn money or have been fortunate enough to inherit it, do not need to lean on hire purchase when we want to buy something. I always feel a little self-conscious when I applaud the value of measures which are unlikely to touch me.
There seems to be a growing feeling that to spend money for anything is
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somehow wrong. I noted particularly that the noble Earl, Lord Jellicoe, remarked, with rather a grimace of horror, that spending is habit forming, rather as if it were one of the hard drugs. And we are told that the Government decided upon these present measures of hire purchase because they suddenly realised that there was a danger of a spree in the High Street at Christmas time. Good heavens, how remote are they from ordinary life if they did not always expect that to take place! To spend money at Christmas is as natural as to fall in love in spring, and we ought to think in economic terms which take some account of human nature.
I remember that, with my wife, I was recently in the United States, and my wife, who is in that line of business, went to call upon a distinguished research psychologist, who explained to her at considerable length and with many illustrations a number of new intelligence and aptitude tests he had devised for children; and after listening she said to him, "How have you found that actual children get along with these?" He said, "Good God! don't talk to me about kids; I don't know anything about them". I sometimes feel that if one could penetrate into the recesses of the Treasury and ask the persons there what they thought some of their measures would mean to ordinary people, they, too, would reply, "Good God! sir, don't talk to us about people; we don't know anything about them".
There are occasions, and I think we have been through one, when it is necessary, in some measure, to adopt the methods of that old mythical bandit Procrustes who, as you know, used to lie those who fell into his power on a bed and if they spread over it in any direction cut them down to size. There seems to be developing in the Treasury and, to some extent, I am sorry to say, in the Government a sort of psychology that believes that whenever a toe twitches the thing to do is to cut it off. Let us, by all means, work hard and save what we can. But let us remember that it is natural and right that people should spend money as well as earn it, and that they always have done so. And let this Government, at least, refuse to allow Procrustes's bed to become a permanent piece of the furniture of the Treasury bedchamber.
5.15 p.m.
LORD GRANTCHESTER: My Lords, I find it difficult to separate entirely economic issues from political issues when Governments or governmental decisions are so often involved. So I hope I may be forgiven for referring briefly to a few issues arising out of the gracious Speech which I believe are of importance where both good political and good economic decisions are necessary to effect any worthwhile results. In order to be as brief as possible, I will confine myself to a few observations which raise questions, rather than engage in argument.
The first observation on reading in the gracious Speech of the setting up of a constitutional committee and of proposals for changes in the composition of your Lordships' House would be that, however interesting what is intended might be in other circumstances, they are red herrings at the present time to distract from the most pressing constitutional issue which we should be facing, namely, the rapidly increasing trend towards what I must call "absolutism" in government and the urgent need to consider a separation of the powers of the Executive from those of the Legislature. Parliamentary government was developed to provide the necessary checks upon the absolute power of the Executive. To-day the Executive has assumed virtually absolute power without any effective checks. The pressing need is to re-establish effective checks on the misuse of virtually absolute power with the corrupting influence which such power brings in public life.
If the noble Lord who seconded the reply to the gracious Speech really believes that all that is wrong in Government to-day is a failure to explain its policies, a breakdown of communications, I believe he should think again. I believe, and I find this feeling in many parts of the world I have visited recently, that people are really perturbed, often perhaps not able to define what is worrying them, but I believe this feeling originates from the current trend towards the absolutism to which I have referred, as a result of which the individual finds himself ignored and powerless. Faced to-day with proposals for wider groupings for economic benefit, the individual can only invoke a narrow nationalism in an attempt to avoid being further engulfed in what he feels will reduce his influence as an individual to even greater helpless-
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ness. If democracy is to survive, what is needed is an urgent study of the checks and the balances which are needed to limit the misuse of power at all levels of government so that the individual really counts for something.
To illustrate the point I am trying to make, may I mention a few examples? The noble Lord, Lord Francis-Williams, and others have referred to the international monetary system. No doubt it is true, as the noble Lord said, that it should be possible to devise a system more accurate, more perfect, than a system based on gold. But the point is that the economists who say this have not produced such a plan, or any plan which would command respect or confidence in the people who have to use it. I should like to quote again those words to which the noble Lord, Lord Boothby, referred, of the Governor of the Bank of England at the Lord Mayor's Banquet after his return from the annual general meeting in Washington of the International Monetary Fund. He referred to the recent onslaught—and I can only call it an onslaught—upon gold, launched and led by the Government of the United States. What is to be noted is that there was no such attack on gold until approximately two-thirds of the gold which had been accumulated during the war and dug down in Fort Knox had left the United States. The Governor referred also to the fact that he felt that this attack on gold had been overdone, and he gave the reason, as the noble Lord, Lord Boothby said, very frankly. The enthusiasm for getting rid of gold owes much to the fact that, in this inflationary age, currencies cannot stand comparison with gold or, for that matter, with any standard.
My Lords, I ask the question, was there ever a more significant charge of dishonesty against Governments—and this against the Governments of peoples who claim to be among the most instructed and enlightened? Does our own Chancellor of the Exchequer take a stand in opposition to the Washington view? His attitude was described by one report I read as
"loyally following a few paces behind the American Secretary of the Treasury".
As your Lordships know, Bretton Woods recommended that, as a temporary measure, two currencies, the

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dollar and the pound, should be considered acceptable to supplement reserves which otherwise would have been held only in gold, subject to the maintenance of certain conditions as to their convertibility. The United States and, to a lesser extent, this country have played fast and loose with these convertibility conditions. I need only quote the arrangements with the Germans to hold half their reserves in dollars and not ask for it to be converted, and the arrangement made that practically all the reserves of the countries in the Far East are held in virtually inconvertible dollars. I wonder whether it is not the fear of losing face in the Far East on this question that is weighing very much with the authorities in Washington. It should not be forgotten that much of this money has been on deposit in New York for a long period and has earned interest which gold would not have earned. These reserves have been very much increased in dollar terms by the interest which has been paid. This has increased the deficit of the United States on their balance of payments. The same is true of our own payments of interest on pounds deposited in London, whereas no interest is paid on gold. In my view, one of the advantages of gold as a reserve currency is that it does not earn interest, because payment in gold is a final settlement of an international debt. unlike a payment in the debtor's currency.
Our present Government has now apparently abandoned the role of sterling as a reserve currency, or perhaps I should say, accepted the inevitable, for if people do not want to hold a particular currency as part of their reserves, it ceases to be a reserve currency. But this leaves the dollar in a unique role while among people everywhere there spreads an increasing distrust of all paper money issued by Governments which are unwilling to have it tested by any standard.
I know that the noble Lord who is to reply to this debate will say perhaps that he is looking for a rational system, and I know that he does not consider gold as an entirely rational system. But the world is not entirely rational, and the decisions of men are not entirely rational. If he is going to wait until he gets a completely rational system, I am afraid we shall never get an honest currency or any international monetary
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policy which the peoples will trust. We have only to think what would happen if this dishonesty were extended to the standard yard or to the shopkeeper's scales. Why should anyone be expected to maintain a fixed unit of measurement if the Government refuse to do so? Why should not the scale give a little less for a pound of goods every year, and a yard contract 5 or 6 per cent. every year, and so keep in line with Government policy in letting the value of its paper money slip 5 or 6 per cent. each year, not to mention two devaluations?
I suggest also to the noble Lord who seconded the Motion for the humble Address that what is disturbing people everywhere is not the breakdown of communications, but the fact that some glimmer of the truth is beginning to break through, thus threatening to hound Governments out of their complacency and attempts to confuse the issue. As a direct result of the failure of Governments to maintain reliable and honest currencies we have seen exchange controls imposed all round. When one examines this matter, one sees that it is nothing but a return to a form of serfdom, tying men and women to their places of domicile and ensuring that, on revolt, they can be deprived by their masters of their travel documents. Indeed, when they are allowed to travel they are subject to limits which advertise the bankruptcy of this country while the Government, in the gracious Speech, would have us believe that all is going well.
We are each month given balance-of-payments figures, but Government expenditure on certain armaments is excluded from those figures and we know that it is Government expenditure, rather than the failure of industry to export, which is the greater cause of our difficulties in our balance of payments. The gracious Speech says nothing about this. No mention is made of the vast sums which have been borrowed, and we should remember what some of us used to be taught that, "He who goes a-borrowing goes a-sorrowing". No reference is made to the fact that, even while the gracious Speech was being written, brokers on behalf of our creditors were engaged in urgent discussions with the Treasury as a result of which new curbs on spending and wage increases are being imposed.

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No word is said about the Basle agreement. Perhaps the Government are not very proud of this agreement, but we know nothing about how much has been taken up under this facility. Some indication of the position of the country might have been given if the Government wished to show themselves a little frank with the people. I have no objection to Ministers changing their mind when they find their policies are mistaken, provided that they are frank with the people whom they have deceived. I should like to see reinstated the practice of donning sackcloth and ashes while apologies are proffered for mistakes. Mistakes would earn more respect if they could make that sort of confession.
Lastly, I am concerned about the way in which our policy East of Suez is being presented. At the time the papers in the Far East were carrying reports of Her Majesty's Government's intention to withdraw by 1971 there appeared in the same newspapers assurances, official or semi-official, that, if needed, the forces being withdrawn could reappear within 36 hours. In my view, under the prevailing conditions and in the light of the arrangements which Her Majesty's Government have at their disposal at the moment, all this talk is completely misleading. It is, in fact, double-talk.
This double-talk persists even in the gracious Speech. The continuing withdrawal to be completed by 1971 is referred to in one sentence, and then the gracious Speech continues:
"Furthermore"—
the word "Furthermore" seems to me to be rather inappropriate to introduce the next sentence—
"my Ministers will maintain their efforts to promote conditions favourable to peace and security in the areas concerned."
Surely, in order to avoid creating a void Ministers should first have tried to ensure conditions favourable to peace and security in the areas concerned, if they believe this to be possible. There never was a time when it was less possible to predict the conditions which will prevail even in one year's time from now. Who knows what will be the consequences of the new attitude of the American Administration in Vietnam? Who can be sure of continuing stability in
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Indonesia, or even in the Federation of Malaysia, of which there is some criticism in Sabah and Sarawak, or for that matter in regard to the future of Singapore?—although the people of Singapore are making a great attempt to cope with the situation in which we are leaving them.
Of course Britain cannot play the role she did, but if ever sound counsel was needed it is at this moment. With American prestige tattered and torn, the task is immensely more difficult, but I would venture to suggest that stability in this area of the Far East—which must be potentially one of the richest in the world, where the French have left a valuable cultural and linguistic heritage, and where we have a considerable private investment which has raised the standard of living of people in the area—depends upon Britain's being able to bring together the Government of Australia, in the South, and the Government of Japan, in the North, in co-operation with the much weaker States which lie between these two great Powers.
We contributed to this area a most impressive capital investment, before such institutions as the World Bank or the Asian Development Bank were established, and I still believe in the Liberal doctrine, that the less Governments are involved in these matters of trade and commerce the better, for the reason that every time a firm gets involved in a quarrel it is a matter of national prestige if the Government are involved; and if it is a difference between two firms in different countries it soon becomes almost a reason for war. All this has to be watched in looking at the work which the World Bank and the Asian Development Bank are doing.
I think the Asian Development Bank, in particular, is being careful and understands that it is necessary for the money that they lend to get to the people who are doing the job, which has not happened with a great deal of the money that has been spent in the past. But so far none of these inter-governmental institutions have been able to rival the work that was done by the British and, to some extent, by the French in private investment.
It would be a disaster indeed if, because of the difficulties arising out of political differences, the peoples of this

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area are denied the benefit of the great prosperity which could be theirs.
I suggest, my Lords, that in the circumstances in which we are placed we must try some new methods. This is not a question of armies and navies, but of meetings. I should like to see a series of meetings designed to promote friendship, to bring together countries which have contributed something of value to the area in the past and the Governments now established in the area—Australia, Indonesia, Singapore, Malaysia, Brunei, the Philippines, Japan and, perhaps at a later date, Vietnam, Cambodia and Thailand—to work out, under the chairmanship of Britain or, if you like, of Britain and France, greater security for the individuals in the area.
I do not pretend that this is an easy task. I know that deep suspicions of neighbours exist in this area. I have tried a little, unofficially, to get a number of people to talk together about their problems. But surely this is the best way by which we can contribute something to this area at the present time. It is what the individual and the family feel and enjoy that matters. If this is to become a credible policy, honesty is a prime requisite for trust. Greater security in the area, for which we must work, can come about only through friendship between the peoples. This has to be built up. It is the only firm basis of security for the future. My Lords, I suggest that to this task we should immediately set our minds.
5.45 p.m.
LORD BALOGH: My Lords, as a recent and somewhat unlikely maiden I should like, if I may, to add my congratulations to the noble Lord, Lord Jacques, for what was an exceptional performance in rather intimidating conditions. Turning to the debate, the noble Earl, Lord Jellicoe, opened it with a statesmanlike reference to the longstanding nature of Britain's problems. He then gave a most interesting list of admirable fields, especially for public spending. Unfortunately, immediately afterwards he turned his criticism to the problems of short-term management and averred the need for severe cuts in all sorts of expenditure, both public and private. I wondered which was the authentic voice. In the debate on the
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Finance Bill, the first debate in which I had the great privilege and honour of participating, I do not remember criticisms of the Budget for its particular leniency. But perhaps others as well as Ministers can also change their minds.
EARL JELLICOE: My Lords, I am sorry to interrupt the noble Lord so early in his speech, but I should like to point out to him that although I was not able to participate in the debate in this House on the Budget proposals, way back last January I was calling for some reining back on consumer expenditure. So there is no inconsistency at least on my part.
LORD BALOGH: My Lords, but between then and July, there was a Budget which could not have been called very lenient. It would be as untrue as it would be foolish not to admit that the development of the British economy since devaluation has not been up to the best hopes. A great deal has been accomplished, not least the agreements about sterling balances which have lifted a great deal of the burden of anxiety from our shoulders. But as the Prime Minister said, we have yet to regain the freedom of action which is needed to implement the tasks which the Government have set themselves.
The reasons for this are not difficult to find. Until July exports did not rise sufficiently to give the economy the much needed boost. It is not always realised that our share in world exports declined by some 10 per cent. in the first half of the year. Since then there has been some gain, but still not sufficient to meet the needs of imports and other burdens and to leave a surplus. From this point of view, it was certainly not helpful in the period immediately after devaluation, that some of the most powerful representatives of British management asserted, contrary to all reason and experience, that it was a hindrance to exports rather than a help. Consequently, the productive and sales effort did not immediately increase, and, also, the opportunity was missed to arrange for the increased shipping space which was bound to be required.
The second, and perhaps even more disturbing, feature is the steady increase in imports of manufactures—rather than of

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foodstuffs and cheeses—even after devaluation. This seems to be due to a shortage of adequate productive capacity. This can be clearly perceived in the chemical industry, and also in regard to machinery of all kinds.
Finally, it must be said that the export of capital, at a time when Britain can least afford it nationally, has attained a quite disturbing magnitude. The relief from a cut of Government commitments has yet to materialise. Altogether, the pattern of experiences of the past year was not dissimilar to that which lies at the bottom of our difficulties. Yet, in purely economic terms the quantitative problem of the balance of payments facing Britain seems relatively minor and manageable. It demands no more than the reallocation of a small fraction of the resources available (perhaps 2 per cent.) to exports and imports substitution. In addition, we would have to increase our domestic investments. This, again, would not absorb much more. The way would then be open to an accelerated expansion of our productive capacity, and with it the ebbing of the present need for restraint on incomes and consumption.
The reason why this adjustment has not been accomplished is because of the reluctance to face the need for radical changes in institutions and attitudes. This reluctance has expressed itself in simple theories which explain deep-seated and complex socio-economic problems by reference to impersonal, quantifiable and easily manageable factors. Recently, for instance, some pundits (or should we call them "sub-gurus"?) re-discovered the more primitive forms of the theory which explains large movements in the balance of payments and in the national income by reference to the quantity of money.
The noble Lord, Lord Boothby, made a characteristically brilliant speech. I was delighted to hear that I have been promoted from a mere "goulash" to a "rhapsody". But perhaps the noble Lord overestimated the power of British Government to do mischief. They may not have reacted rightly, but the change came from the inevitable march of events in the wake of two wars. I also wonder whether he and the noble Lord, Lord Fraser of Lonsdale have considered the consequences of a downward fluctuating
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pound. So long as it fluctuates up and down, it is all right. Basically, however, this is not a case for monetary manipulation, but only for the productive effort which will restore British industry to its previous place. There are no easy options. We need a complex of policies which deal with the complex of problems which are really the accumulation of half a century of harsh change in Britain's international position in the world.
The crisis also orginates in the shift of domestic political power. This shift inevitably imposes constraint on the choice of policy weapons. Unemployment can no longer be used by any Government as a conscious tool to reach equilibrium. Nor can the helpless position of the worker serve to enforce discipline and low wages and so maintain competitive standards without excellence in management. Thus, strangely, the pleasanter and more humane society gets, the more difficult it seems to maintain its expansive momentum. It is the failure to invest, the failure to make the best and quickest use of innovation and to build up new industries, on the one hand, and the failure to postpone consumption until an increase in competitiveness permits us to do so, on the other, together with onerous international commitments, which is at the root of the country's difficulties. They are not of yesterday's making—not even of the 13 years' making.
The one signal hope is the unexpectedly sharp resilience in our productive effort and in productivity in a period of high unemployment. This may augur for better things to come. To emerge from this morass of well nigh half a century we must restore British industry to its freedom of competition, and thus obtain the means for domestic reform. The Conservative Party hoped and hopes to achieve this by increased incentives to "abrasive" competition. The result was an interesting deficit each time employment rose and a shrinking surplus as domestic conditions worsened. It is against this ground-swell of history that the policy which the present Government have pursued since their inception must be judged. This was to achieve the readjustment in Britain's industrial position through a combination of industrial restructuring and a restraint on incomes. While much was achieved, it was insufficient, as we know, to stave off

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devaluation. Devaluation, as it has become clear, it not an easy option, but it is far preferable to unemployment and stagnation. It does mean, if it is to work, a restraint on real income, though not necessarily an actual cut. And special measures are needed if social justice is to be safeguarded.
What is essential to recognise is that the broad economic strategy of the Government, aimed at avoiding devaluation, is the right and proper policy to make it work. It consisted, first of all, of direct measures to improve the balance of payments. In the second place—and, in the long run, far more positive and important—were the indirect measures aiming at increased productivity through increased investment. The third task the Government set themselves was to bring the increase in incomes in line with productivity, thus avoiding a spiral of wages and prices. This was and is an essential condition of Britain's industrial survival if a continuous weakness of the pound is to be avoided. Finally, there was the protection of the weak through social measures, including redundancy payments, earnings-related unemployment benefit, pensions, family allowances and so on. Here, again, the record is unmatched.
If Britain had ample time for manœuvre, the policy measures initiated after devaluation would give us ground for firm hope that the immediate crisis, which has been with us since at least the beginning of 1964, would be overcome. But we are not in that happy position. A greater sense of urgency is therefore needed in all directions if we are to succeed in time. Much the most immediate reinforcement must come in the field of incomes and prices policy—not, indeed, because it has social priority. No; it is urgent because it is the only way in which the cost advantage gained by devaluation can be preserved and time gained for the positive policy to work. No amount of tinkering with taxes, interest rates or credit controls can preserve Britain's competitive power. Taxes and credit manipulations can free resources needed for export and import substitution—and they are indispensable—once the export drive or import substitution has succeeded. But the success of export and import substitution will depend on prices and incomes; that is,
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on costs being kept in line with those abroad.
Modern social and political change has destroyed the self-balancing character of the economic system, and it is not easy to see how this will ever change back. The reason for this is that each wage increase justifies itself by providing the reason for the next price increase. This in turn gives the impulse for further wage increases. A prices and incomes policy is therefore not a temporary need to deal with an emergency; it is a permanent, structural need. No one with a sense of social justice can fail to sympathise with the leaders of the trade unions in their present position. They are under pressure to obtain greater equality in income distribution. Yet it is clear that present-day wage bargaining can lead only to a temporary gain of one group of workers against others, while imperilling the stability of the system. Moreover, if industrial action disrupted stability, if it imperilled recovery, in my humble opinion the whole future of the Labour movement would also be imperilled.
Clearly, we must look to the positive part of the policy package. As the noble Lord, Lord Brown, has emphasised, the more successful we are in increasing productivity, the less there is need to restrain incomes. There is no doubt—and his exposition was convincing—that this Government have done more to accelerate technical progress and change in British industry than any other. But the weight of the past is still with us. The lost export markets and the disproportionate growth of imports of sophisticated manufactures testifies that the adaptation of Britain from being a pioneer in industry producing textiles and standard machines, to supplying modern requirements, has not yet been accomplished. American enterprise in the advanced sectors of British industry is uncomfortably large. The profitability of American business at home and abroad outpaces that of the British in almost every industry where they compete. Basically, it has been the sluggish response of the private sector to new opportunities offered by technical progress and by the economic measures of the Government which is at the base of our difficulties. Again, a lack of professional labour management has aggravated the restiveness and the feeling of alienation of a large mass of workers.

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I know that a number of your Lordships hope to achieve a transformation of attitudes all round, Hey presto!, by a cut in direct taxation. I have already pointed out the contradiction between the assumption of onerous obligations and the promise of reductions in taxation. Alternatively, if the idea is, as the more moderate pundits suggest, the substitution of a value-added tax, a monetary policy for direct taxation, let me add here only that the effects of an increase in the price level roughly three times as that caused by devaluation do not seem to have bothered the learned gentlemen who advocate this. In the same way, both the noble Earl and the noble Lord, Lord Byers, have extolled savings. But, surely, if we are to call in savings as a substitute for taxation, we ought to make a difference between savings earned, savings acquired and savings inherited. I have yet to see the machinery devised for the purpose.
My Lords, I come finally to the role of Government in restoring a basically sound, long-range industrial dynamism. Some say that the one decisive role the Government should play is that they should keep out. Historical experience does not support this view. Neither in the inter-war period nor in the post-war period was the do-nothing policy a success. Although in terms of the acceleration in the increase of productivity in the midst of very critical circumstances the record of the Labour Government is impressive, I believe that urgent reconsideration is needed of the methods by which the Executive has been accustomed to deal with industrial matters. This machinery is based on what are called sponsoring Departments. These have a double role. On the one hand, they are supposed to be the channel transmitting signals from the Government to industry; on the other, they receive representations from the industry under their wing. As Bismarck once remarked about his Ambassadors:
"When they are in one place for any length of time they become the other Governments' representatives in the Wilhelmstrasse rather than my representatives abroad."
This is obviously one of the grave dangers.
When it comes to reform, self-policing is hardly ever effective. We have seen
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that recently in the City, which has above all always held that there is nothing that gentlemen could not settle among themselves. We have seen it in a different context in the failure of the chemical industry to implement vigorously the recommendations of its own E.D.C. to achieve increased import-substitution to the tune of at least £30 million per annum. In fact, imports are running at an annual rate of nearly £100 million above last year.
There is then the curious overhang of the Suez surcharge burdening the balance of payments by millions when the oil companies were never more prosperous. There is, to give a final example, the problem of the price for North Sea gas which is extracted by large-scale companies. This discovery was indeed a unique opportunity. Have we fully exploited it? Have the advantages of the discovery been secured to this country—either to the consumer or to the Exchequer? The law governing the discovery is far less effective in exacting royalties and participation in profits (and it is not a law that was passed by a Labour Government) than those not only of Canada but even of the smallest Sheikhdoms in the Persian Gulf. Nor has any provision been made to control the rate of profit on investment in exploration or exploitation such as governs the gas fields of the United States.
In the United States—not given to socialist experiments easily—there are established independent quasi-judicial bodies in all fields where abuse was experienced. Stock Exchange security issues, banking, power, oil, takeovers, natural gas, railways, mass communications, food standards and many other fields are subject to continuous supervision. We could do with a suitably adapted version of this system. Particularly, we need a continuous supervision in those fields of industry where tacit agreement exists not to disturb high-cost producers or where the largest firms studiously refrain from competing with smaller fry for fear of being denounced as monopolists. Official philosophy on monopolies needs radical overhaul and modification. Problems which can be solved by once-for-all structural change; "bust-trusts" are no longer the most important. We need a different approach

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when large-scale firms enjoy monopoly power because it is the inevitable consequence of productive efficiency. It is also urgently desirable to consider whether the formulation of industrial policy should be entrusted to a Department which has no specific industries to sponsor.
My Lords, I conclude. The country has been given an opportunity to escape from its age-old basic economic malaise. Negatively, it is essential to keep costs and prices steady; positively, a concentration of a widened investment capacity and reorganisation are essential on accelerated domestic rationalisation and reorganisation of industry. If this cannot be accomplished quickly enough through conventional policies, it would be wise to keep an open mind about changes. Success can be achieved; and in my opinion it can be achieved without sacrificing any of those great political and social accomplishments which make Britain by far the most agreeable country to live in. It will depend on its excellence in its sense of individual and group responsibility and moderation, whether Britain can regain its lead not now in the crude power game but in the subtle accomplishments of a mature community.
6.7 p.m.
VISCOUNT RIDLEY: My Lords, I should like first to add my humble congratulations to the noble Lord, Lord Jacques, on his maiden speech this afternoon. I possess very few qualifications which entitle me to address your Lordships on the matter of economics, but perhaps one of the smaller ones which I do possess is that many years ago for a short period I learned this subject under the noble Lord, Lord Balogh, at Oxford. I am sure that he does not remember me and I hope he will not think that I blame him if there are gaps in my economic knowledge. Nor do I hope that he will think that I agree with all that he said then or says now. But I am sure your Lordships will agree that we have just listened to a most distinguished speech from a great expert.
I should like tonight to concentrate on a rather narrow point in the gracious Speech where it uses the words:
"My Government will develop policies … to make fuller use of resources in the Regions."
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I should like to draw the attention of your Lordships very briefly to the economic troubles of one of these regions, the North of England. I define the North of England as in the Regional Economic Plan it is so defined, as, roughly speaking, the counties of Northumberland, Durham, Cumberland, Westmorland, and the North Riding of Yorkshire. I have no doubt that your Lordships will think that this part of the country has for far too long been a problem to this nation and has far too often complained about its economic situation over the years to the extent of becoming almost a bore about the subject, but I think the fact of the very persistence of the economic depression in the North of England demands the attention of this House. Indeed, I do not believe that the situation is vastly different from what it was when my father addressed your Lordships' House on the same subject in the same debate in 1937.
In this part of the world where I live, it is true to say that we are completely obsessed with unemployment. People still talk about the Jarrow march, and whole generations of people are affected in their thinking by this very unpleasant spectre hanging over them. I believe there is a danger of a form of regional paranoia, if I may use the word, which does no good to the region or the country. I do not wish to take up very much of your Lordships' time, but I should like to explain how and why I feel that we must do the best we can to tackle this criminal waste of human skill and effort and should refuse, if we can, to continue to live under this perpetual cloud. I do not need to expand on the tragedy which it means to those who are directly and personally involved. The figure of wholly unemployed men in the Northern Region in October, 1964, when this Government took office, was 28,850, or 3·4 per cent. At this moment the figure is 52,450 or 6·2 per cent. This means that the figure has nearly doubled in four years. I think it is true to add that we in the North can now say that we "know how Labour Government works". The noble Earl, Lord Jellicoe, said he did not wish to lacerate the Government with figures, but it is against the background of those two figures that I should like to speak briefly.

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I would repeat at once that the situation we now face goes back a long time before 1964, as other speakers have said to-day. I hope it is clear that I do not wholly blame the Government for the creation of this situation, but I would ask whether they have done what they should have done to attempt to cure it. In this connection I think we should ask two questions: why the North is so vulnerable to this disease and, secondly, whether the measures which are in force are going to work. It is, I think, an accepted fact that the decline in the older basic industries, such as coal, steel and shipbuilding, which the 19th century brought to the North is responsible for our troubles. Though they do not lack problems, it could, I think, be said that some industries, such as shipbuilding, may have turned the corner by now. But in the coal industry, which has for so long been the backbone of the North, there have been very drastic changes which have not by any means finished yet. I am convinced that there has not been a proper appreciation in Government circles of the scale of the problem caused by the closure of collieries as the coal industry declines.
In the Northern Region to-day there are about 65,000 men wholly employed in coal mining in one way or another. In December, 1965, this figure was 87,000, so that over 22,000 have gone. The noble Lord, Lord Robens, has quoted the figure as being down to 6,500 men by 1980. This, of course, is a very rapid and tremendous rundown and I think these are the figures with which we are compelled to deal. It might be quite logical, and perhaps it is logical and correct in the context of our national fuel policy, that this should happen. I am not sure that I agree that it is, but it is not a subject about which I wish to argue tonight. What I am sure is that the nation has not yet faced the social consequences of this policy.
There is colossal cost, as your Lordships know, in inefficiency, in human misery and unemployment. There is also migration to the more prosperous parts of the country, and a steady stream of people are leaving the North at the present time. Again, that may be inevitable and even necessary, but I do not believe that any real attempt has ever
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been made to assess the cost of providing for the resultant congestion in the South-East or the Midlands. I suggest that we need a real study of these matters going beyond the sum of the plans made by the Regional Economic Planning Councils; because if you add these plans together, you find that they are all assuming a total growth far beyond the nation's capacity. Nor do I think that enough public credit has been given to the Coal Board for the way they have, so far, handled this tremendous rundown in their industry. But, as I have said, I believe that they face far greater problems in the future than they have tackled in the past.
The problem of what should be done remains as intractable as ever. The Government have been deeply concerned for many years with the problems; there has been much thought, and very much public money has been spent. I think we should examine whether this money is adequate and whether there are better methods of spending it. The unemployment situation became a national matter, I think, in about 1962 or 1963, and the noble Viscount, Lord Hailsham, as he then was, was despatched to the North-East to investigate the situation. He produced what I believe to have been a clever and a brilliant report which, in brief, concentrated Government assistance into what was called "growth zones". After 1964, when this Government took office, there was for some vital period no such dynamic leadership and no such concern in Whitehall over these particular matters. Now we have the Chancellor of the Duchy of Lancaster, who has done his best for us, as the Minister responsible for the North. I agree that he has done what he could, but we have had a lot of legislation as well which, in fact, merely boils down to replacing the growth zones with development areas and special development areas—what were known as "ad hoc regions"—and we have lost a great deal of time.
The core of the problem is the attraction of new industry to the development and depressed areas. New industry does not grow on trees; it has almost to be bribed to come to the North. There have been many successes and much new industry is coming, but the advent of new industries and the expansion of existing firms is just not

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keeping pace with the decline in the older ones; and though, as I have said, much has been done, not enough new jobs are being produced even to begin to compensate for those lost in the coal industry alone.
Are the Government doing everything possible or could the money be spent more wisely? Here we have to distinguish between direct subsidies—for example loans and grants to new firms and large factories—and all the other things which come under the Local Employment Act and other Acts. I believe that these are generous and probably go as far, or further, than it is prudent to go. I would qualify that by saying that there are a few points which could be improved upon. Perhaps they might be applied more selectively in the form of loans and grants, and that the recent decision to exclude help from the smaller service industries employing fewer than 50 persons was a very retrograde step. I think, further, that the extra assistance available in special development areas should be more readily available to those firms which are expanding within the area as well as to those who are newcomers.
In this connection we must realise that the system of a refusal of industrial development certificates in the South or the Midlands is one of the most important weapons at the disposal of the Government, and to abolish or relax this system of control would be totally disastrous. There is a considerable case for removing, so far as we can, certain doubts in the minds of people about the duration of these direct incentives, because I feel that the region will have to enjoy them for a long time to come if they are to be of any use.
On the other hand, we have the indirect subsidies. The major one about which I should like to speak is the Regional Employment Premium, which is now known as the "R.E.P.". At the moment the country is spending some £29 million a year on this in the Northern Region. It is this sum which I question as being wisely spent. I believe that the money could far better be spent on other things. I do not think that this bonus has had more than marginal effects on employers and I doubt wheher it has resulted in any significant increase in the numbers employed. Nor has it, as yet, lowered costs by any significant amount. There
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is indeed evidence that it is inflationary, in that the unions may demand that it should be passed on to some of their members or, as the C.B.I. says, "R.E.P. will leak into wages." However, one must admit that a good deal of it will be recovered in corporation tax in due course.
My Lords, if we are to have the selective employment tax mechanism, I should have thought it would be far simpler and cheaper, and in every way better, to reduce or to remove the selective employment tax completely in development areas. I do not think that we have any idea of the serious harm which this tax has done to the problem which I am discussing. What are the needs for which we could use this sum or an equivalent sum, were it available? I believe that, first, we should put improvement in the retraining facilities for the unemployed. There is still much more to be done and, incredible as this may seem, there are still very many vacancies for skilled men in the Northern Region in many industries. The C.B.I. said recently in their regional study that their members unanimously and constantly say that it is chiefly the shortage of skilled or trainable labour which deters firms from moving into a development area. I believe this to be a terrible indictment of our policy. We must ensure that the unions as well will more readily accept retrained labour after it has been retrained.
I was very interested to hear the noble Lord, Lord Brown, refer to the increase in retraining centres which the Government have provided recently. I would be the first to say that this has been a most effective and valuable contribution. But I believe also that the number of retraining centres may be less important in this connection than the present inadequacy of allowances which are paid to trainees while they are being retrained.
Secondly, referring again to this R.E.P. figure of £29 million, it is my opinion that this sort of money would be far better spent in providing new and improved roads, airports, ports, water supplies, et cetera. Again, I readily admit that a great deal is being done. The point here is that we must have much more public investment in capital improvements to what is fashionably called the "infrastructure" in order to

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make the Northern Region and any other development area more competitive, because until it is competitive, we shall never get a situation whereby industrial prosperity can become self-generating, as it must ultimately become. All this cannot be done until we have improved these facilities. I am certain that all firms who are considering expansion look most carefully at what the facilities are and often decide not to come to an area because the facilities are not yet good enough. It further means that, as a matter of policy, we must not give this aid indiscriminately, because obviously we cannot afford to do this. In practice, this means refusing this aid to some areas and having the courage to say so at the time.
I also do not think that it would be of any use making this extra capital investment available to local authorities, in the usual Whitehall way, as a percentage grant. Local authorities already bear a far higher proportion of these costs than they can manage at the moment, and in my opinion these major improvements must be a Central Government responsibility. It is no accident that the local rates are higher in the development areas than in any other part of the country. I suggest that even one year's ration of £29 million in R.E.P.s for the North would go a long way to break the back of this problem.
Thirdly, perhaps more generally, we ought to consider the type of incentive to new industry, which in all this has tended to be forgotten and which is based on the simple and inescapable fact that industry expands in order to increase its profits or to improve its return on investment. I believe that in our present policy we are in a little danger of forgetting this, and we can use our tax structure to bring this powerful motive more to the front. We used to have free depreciation. Unfortunately, this has been swept away. But I believe that we could harness much more effectively this incentive and at the same time reward the efficient firm more than the inefficient—a distinction which is one of the conspicuous lacks or failures of the R.E.P. system.
My Lords, I apologise for speaking so long on this particular and rather
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narrow point. I do so because I do not believe that we have really tackled the basic causes of this illness. In spite of expenditure, of one sort or another, of over £300 million per annum in the development areas by this Government and by previous Governments, unemployment rates persist, and even increase. I do not think that there is any room for complacency, which we see at once in Government circles at the slightest improvement in the statistics. If the national economy demands that the North must decline relative to other areas, then I think it is the duty of the Government to say so and to make other plans. But if we want to see the area prosper, then we must consider the cost and take more realistic and more urgent steps towards that end.
6.25 p.m.
LORD WYNNE-JONES: My Lords, after listening to the brilliant economic survey of my noble friend Lord Balogh, I am glad that I am not an economist, because I should hate to be addressing your Lordships' House in competition with him. Fortunately, I am in no sense an economist and the only reason I wish to take part in this debate is that there is one aspect of our economic life which I think is vital and to which sufficient attention is not always paid; namely, education. We have a somewhat ambivalent attitude towards education. Often we regard expenditure on education as ranking with consumption, as one of the frivolities of life, as something like buying another "fridge." But most education is really a form of capital investment and probably the most important form of capital investment which a nation can make.
As I am not an economist, I can only observe what others have done in examining this matter. In the United States, a considerable survey has been made of the economic side of education. There is a clear relation between the lower wages and lower standards of the Negro relative to the white worker and the amount of money spent on Negro education relative to the amount of money spent on white education. If one goes further, there is little doubt that this is going to be one of the greatest sources of trouble in places like South Africa and Rhodesia. If they do not spend enough money on the education of the negro, there is no doubt at

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all that the wages of the negro will always remain enormously depressed below those of the white worker. So that education is almost certainly the most profitable field of investment.
Because of that, it is essential that we in this country should treat education as a first priority, not simply, although this is important, because it improves the quality of the individual, but also because it increases his economic value to the community. Education is vital from this point of view. It is probable that every pound invested in education will earn at least as much as every pound put into buying new plant. Therefore I would urge the Government to do what I know they have always wanted to do; namely, to give first priority to education.
In his speech, my noble friend Lord Brown referred to unemployment in the development areas and mentioned, as has the noble Viscount, Lord Ridley, the training centres that have been set up. These are very important. They are a part of education. Another factor that we are overlooking is the raising of the school leaving age. Especially in the development areas, the raising of the school leaving age would contribute more towards solving the problem of unemployment than possibly any other single measure, and it would also be a capital investment for the future. Although this does not apply to Tyneside as a whole, Sunderland has over 7 per cent. unemployment at the moment, and there is considerable unemployment among school leavers. It is a tragedy that school leavers, for whom we are not providing facilities to stay on in school, have to go out and are then unemployed. I would urge my noble friend on the Front Bench to look carefully at this matter to see how quickly we can raise the school leaving age as a matter of social importance and of industrial importance in order to put our capital investment right.
When we go beyond the schools and come to higher education—again I am not blaming the Government for not doing more, because I think they have done quite well—I would urge the Government to look carefully at the position and see whether the programme which is now being followed is really a sensible investment programme. If you treat this as a consumption programme, you can set any figure you like, and you do not
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mind cutting it back. But as an investment programme, I think there is a logic that has to be followed. I believe that the logic of higher education over many years to come demands that there should be at least a 5 per cent. per annum increase of the numbers in higher education. To do this would probably mean an increase of expenditure on the places where you are providing higher education of something in the order of 10 or 12 per cent. per annum. At the present time this is not being done, and in consequence, in my opinion, we are not going ahead fast enough. In other words, we are cutting back on capital investment, and this is the last thing that we ought to do if there is any sort of crisis.
It is, of course, a difficult thing to decide exactly what is the requirement in higher education; that is to say, what is our manpower need. The normal way of doing it, which has been followed by Governments for many years past, is every now and again to say to industry: "Will you tell us what will be your requirement for chemists, physicists, engineers, or whatever it may be, over the next three years?" They then all get down to the guessing book, and they make an answer which depends entirely on their mood at the time. If they are feeling optimistic, and feel that trade is going to improve, they will say they need 20 per cent. more; but if they think things are going badly, they say they need no increase at all. My Lords, you cannot plan manpower requirements in that way. Therefore, the first and most important thing to do is to improve our census returns, and include much more in the way of educational requirements in those census returns in order to have the facts which, to a certain extent, they have in the United States, but which we in this country do not. We have not the proper facts to work on.
It is interesting that in 1955 the University Grants Committee, at the suggestion of the Government, told the universities that they should provide two-thirds of all their new places for students in science and technology. This figure of two-thirds was, I believe, arrived at from looking at the numbers who had been taking the science subjects in the G.C.E. at A level over the previous few years. But, unless you know what you are

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about, the situation changes as you examine it and the two-thirds figure which was fixed in 1955 was already out of date by 1959, because the trend had reversed by 1959 and fewer scientists were coming forward. The result is that we have the position to-day that throughout higher education there are vacant places in science and technology, which were planned by deliberate Government policy, and which are there because there was no means of assessing what was going to happen.
It is this sort of thing which is so serious when one is dealing with capital investment, which I am sure is so in education. It is highly important that better investigation be made of this. Incidentally—I have mentioned this before in your Lordships' House—I think it is an absolute scandal that in the training colleges of this country, where practically all our primary school teachers are trained, only 10 per cent. of them receive any science instruction. It is not very surprising that we end up with too few scientists and technologists at the university level if the school teachers in the primary schools know nothing at all of science. That is the present position. In other words, our planning has to go further back than it does at the present time.
My Lords, I should like to make one final comment, because I do not want to keep your Lordships any longer at this late hour. I would say that one of the most important things that education can do is to raise human capacities, and these capacities are the capacities to do work that puts ever-increasing demands upon man's needs. In other words, it is only education that will give us the driving force throughout our industry—and I am not referring to management only, but throughout our industry—to create and solve the problems of to-morrow.
6.36 p.m.
LORD HANKEY: My Lords, we have had an interesting and, I think, constructive debate. I agree warmly with very much of what was said on the subject of education by the noble Lord who has just sat down. There is no doubt that education adds enormously to the productivity of the economy. Unfortunately, it has to be paid for. Much has been said in our debate about the
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need to control demand and public consumption and to produce a more acceptable level of imports. But there must be a balance between demand and supply, and all of us, individually and collectively—and this goes for the Government, also—have shown a tendency, unfortunately, to spend and consume more than we in the United Kingdom are producing and earning.
The weakness of the supply side of our economy has really become a grave embarrassment. I believe that, by comparison, too much attention is being paid to demand at the present time, and that much more attention needs to be paid to the supply side of our economy, because it is obvious that we are failing to take advantage of the opportunities offered by devaluation. I agree entirely with what the noble Lord, Lord Balogh, said about that. We have had some success, but we have not had enough, and we are not making the grade quickly enough. The noble Lord, Lord Byers, and the noble Earl, Lord Jellicoe, made similar points.
My Lords, why is this? In the nine months to last September, according to an Answer given in another place on October 21, we lost 3,874,000 working days through industrial stoppages. This was nearly twice the figure for the whole of 1966, and well over twice the figure for the whole of 1967, both years marred by a large number of strikes. No wonder our exports are slow to expand! So long as this continues, the Government will clearly continue to have to impose unpopular incomes policies, a high bank rate and more taxation, with consequent higher prices. But these measures feed the very discontent which I have mentioned, and make the strike situation worse. So that we are in a vicious circle.
We must not underestimate the seriousness of the situation. We fail in our export delivery dates. According to the newspapers, we have recently had to send two ships away to be finished in Norway. We offend our foreign customers by inexcusable delays in deliveries. Our sterling area depositors are so concerned that we have had to get extra backing from our European creditors. I do not see anything to be pleased about in this. It is really due to the failure of the supply side of our economy. We have had to renounce or give up many desirable and necessary items of public

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expenditure, including a good deal on the education front, to which the noble Lord, Lord Wynne-Jones, referred, principally because we have failed to keep up with the times and we have not allowed the great genius of our industrialists and working people to assert itself. At the present time, any selfish small local group of workers can stop or hamper a whole great integrated industry. Such groups do so constantly, one after another, in different sectors. It really makes no sense.
This has a great effect also upon the capital movements side, because I am sure that our boards of directors hesitate to introduce new machines, new processes and new working methods when they are sure that they will not be able to control the resulting chaos; and it may lose them contracts which by sticking to old methods, out-of-date methods, they would still have been able to secure. So our factories, our shipping, our railways and our docks have been subjected to a form of unlicensed economic and social warfare, almost always in the form of unofficial strikes, "go-slows", working to rule, restrictive practices and so on, without any regard to the carrying out of works agreements and contracts, or to the interests of the industry, or to the interests of the other workers in industry; and, of course, still less to the public interest.
Personally, I think that our devalution last year would have been totally unnecessary if this situation had been tackled in time. But I quite understand that we had to wait for the Report of the Royal Commission on Trade Unions and Employers' Associations before anything could be done. We have paid a very high price for the delay in getting that Report out of the Royal Commission. So I make no excuse now for devoting myself to the Donovan Report. There is no other point, I believe, at which we can break into the vicious circle which I have mentioned, in which the Government's own measures to control demand are magnifying industrial discontent. We must radically improve the efficiency of our industry by reforming our archaic system, or lack of system, of industrial relations. I think that the Donovan Report shows up this situation very clearly in the opening chapters.
I wish to urge that our present troubles are due not to the fact that our trade
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unions are too strong, but, quite on the contrary, to the fact that they are, with a few exceptions, too weak, much too numerous and do not carry their proper responsibilities. This sounds a strong statement for a former member of the Diplomatic Service to make, but I have had ample opportunity, and, may I say, expert assistance, to study the trade union system in Sweden and other countries; and I was for years, at my own request, a Member of the Trade Union Liaison Committee of O.E.C.D. in Paris. I have been proud to know many leading British and foreign trade unionists and also industrialists, so I hope your Lordships will accept my entry into this field.
An employer can establish relations of cordiality and confidence with two or three trade unions, as I think is shown in many cases in this country and also abroad. But he cannot do so with 30 trade unions, as for instance in shipbuilding. The Confederation of Shipbuilding Unions unfortunately has no adequate status or power. I believe the situation is worse in the motor-car industry. There is a structural problem here, which the Royal Commission hope vaguely may slowly remedy itself over the years, though I personally think something more ought to be done about this. However, I shall not go into details about this to-day. I mention it only because it is an absolutely fundamental point in obtaining better industrial relations.
I am more concerned at the present time about the legal side. Fundamentally and historically our law has seemed to regard a trade union as basically a sort of conspiratorial organisation which must be legalised and excused for breaking the laws that all other citizens have to keep. But it is time that we, as legislators, swept away this idiotic and archaic inheritance from our past. An efficient trade union in each industry is an essential driving band for communication between the workers and the employers. It should work both ways, as driving bands do. It should operate effectively at works level and at industry level. It ought to include most of the workers in the industry. It should be responsible for seeing that collective bargains and agreements are not only acceptable but also carried out. The unions should be properly registered and officially recognised, as the Royal Commission propose,

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and I personally believe that the collective agreements should also be registered.
I cannot see any reason why works agreements, if they are properly made, as they should be, should not be made enforceable. They are enforceable in many countries. The trade unions and the employees do not there have immunity for breach of contract. I do not think anyone should be able to tear up or disregard a contract of employment with impunity: neither the employer nor the employee or the trade union. As Mr. Shonfield points out in his Note of Reservation, the more powerful the unions or, for that matter, the employers' organisations become, the more essential it is that they should be law-abiding. The law should therefore demand good faith by all concerned. I do not see how without good faith the best trade-union leaders in the world, or for that matter the best industrialists, can produce the kind of industrial relations that we really must have: industrial relations which recognise and promote the common interest of all in efficient, modern production and rising standards of living.
If agreements have to be interpreted and carried out, then I think there must be special labour courts, or other comparable institutions, with expert assessors from both sides of industry—because these questions are hideously complicated—to interpret the agreements and contracts. Foreign experience and Commonwealth experience does not indicate that there would in fact be much litigation. I agree with another point in Mr. Shonfield's Reservation: let us try to get the criminal aspect out of it. Until we can distinguish a justifiable strike from an unjustifiable or illegal one we shall never make sense of this situation. We can never abolish strikes, but we can insist that works agreements be valid for stated periods and that during the period, unless the agreements are broken, strikes and lockouts are not justified and are illegal. The right to strike or lock out should thus be canalised, like the right to carry firearms.
I am fully aware that I am urging a totally new law about trade unions. No one can read the Donovan Report, or for that matter Mr. Gerald Abraham's excellent book on Trade Unions and the Law, without seeing that whatever the
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historical merits of the laws of 1871 and 1875, 1906 and so on (and undoubtedly there were merits at the time), they are now totally out of date. We should, I urge, now kill the "sacred cow" and make an altogether better system. The new Act should give to trade unions their proper place in industry and their proper responsibilities. I am not impressed by the argument that this cannot be done because they are voluntary organisations. They have to be made to carry their proper responsibilities now and to ensure that their members do so, too. I believe that nothing will make this more certain than making works agreements, and especially procedure agreements, enforceable. I think this will strengthen the unions and strengthen the hands of their leaders—and I do not think any country in the world has better trade union leaders than we have. It will make everyone more careful. It will greatly encourage proper consultation in industry. I was interested by a remark which the noble Lord, Lord Byers, made in favour of works councils. This system works in Germany, though the Donovan Report expressed some doubts about its real effect. But I believe that further consideration ought to be given to the desirability of encouraging the formation of works councils in a great many more factories than now have them. I know that the system already works well in a few.
The new law, in my opinion, should also make it clear, in a declaratory section which our judges can interpret in framing subsequent Case Law, that our workpeople have a right to work and to produce, and that they should not, so far as possible, be interfered with by irresponsible actions or unjustified stoppages. The public interest in this question ought to be clearly stated.
I have criticised the report of the Royal Commission for not bringing out adequately some fundamental principles which serve many other countries well. I should like now to express my warm admiration of their analysis of our troubles and my agreement with very much that they propose for strengthening collective bargaining and having it done at plant level. I believe that this is essential to raise productivity, on which the Government have already done so much. I also warmly support proposals

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for establishing an Industrial Relations Commission. But on this and other issues I wish to draw attention to the Reservations of the noble Lord, Lord Tangley, and Mr. Andrew Shonfield, because I believe that they are on the right lines. It is most regrettable that their views were not accepted by the other members of the Commission. I believe that illness on the part of some members had a certain amount to do with this. In my view, the Report, taken by itself, is much too weak to be effective.
There is one other essential point that I want to mention. So long as our trade unions are so scattered and divided, it is impossible for them to train branch secretaries and shop stewards to play a modern role in industrial relations. Some of our great unions do this, but it is done on a quite inadequate scale. This is every bit as necessary as the up-to-date training of management. I believe it is essential that we should now recognise the need for this and meet it, as is done in Sweden and some other countries. We can no longer afford ignorance and amateurism in this field. The universities could play a most useful part in this training programme, and I believe they ought to be mobilised to do this. I am afraid we must recognise that only large and strong trade unions can afford to do this training on an adequate scale. I wonder whether, in the future, it will make sense that only 10 million out of 24 million employees in our country are members of trade unions. I should like to see the proportion greatly increased, and I should like to see the unions fewer and larger, for the most part, able to employ adequate numbers of staff and to train them in modern industrial relations. I am glad to see that this need is recognised to some extent in the Report of the Royal Commission.
I am aware that many people, on both sides of industry, dislike the idea of legislation in regard to trade unions and industrial relations. Personally, I find this attitude fantastic. We have masses of legislation, the last Act having been passed only in 1965. All those laws are seen now to be out of date. The result is disgraceful chaos in large and important sectors of our industry which has brought our country into disrepute and has enabled other countries in Europe to overtake us. We have legislation about
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prices and incomes which, when combined with a perpetual squeeze, has made our Government extremely unpopular and is very much more controversial. Of course there must be legislation: it is unavoidable. In any case, it is the duty of the Government and of Parliament to protect the public interest, a duty which we have signally failed to carry out for the last four years. It really should not be put off any longer.
But I wish to say this to the Government, with all earnestness. They should not think they can deal adequately with these difficult and controversial questions by just tinkering with the law, a little bit here or a little bit there. The very minimum is to take the points outlined by Lord Tangley and Mr. Shonfield in their Reservations. I hope that the Government will also undertake the broad reform of the position of trade unions, which is what I believe is really required. If they tackle this in a radical way, I believe that they will succeed and earn public thanks; but a "tinkering" failure would discourage their own supporters, with inevitable political consequences. Such action might even make it much harder for anyone else to do better. This is a difficult problem for the Government, but it will be much better for them, in the end, to handle it firmly and radically. Their duty is to uphold the public interest and not to let it go by default. The voters will not fail to judge them on this.
6.56 p.m.
LORD ARWYN: My Lords, I should like to congratulate the noble Lord, Lord Hankey, on his speech, although it is a difficult speech to follow. I hope he will accept that as a compliment, and I shall look forward to reading it to-morrow.
The gracious Speech includes the following words, which I hope to refer to in relation to the subject matter of my speech. I refer to the statement to the effect that the Government will press forward to strengthen the economy, achieve balance of payment surplus, develop industry and safeguard employment. This debate provides all of us with an opportunity to call attention to any means whereby these objectives can be achieved. Among the Members of your Lordships' House there are experts in various fields with the experience of a lifetime in very specialised subjects, apart

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from politics and economics. It is the duty of each of us who is a specialist in any sphere affecting our future economy to make his contribution. As I happen to be a mining engineer, many of my speeches are devoted to the future of mining, particularly base metals, all of which have been ignored by the Departments concerned.
Following the observations of my noble friend Lord Wynne-Jones on higher education, there is an interesting paragraph in yesterday's The Times Diary. It refers to some alleged provocative comments by my noble friend Lord Bowden in an interview published in New Education. Apparently, one of the complications of his position as Minister overseeing higher education from 1964 to 1966 was that he found himself knowing more about the matters of detail than his civil servants, and telling them things that they should have told him. At the same time, he confessed that he had to ask them elementary questions about the political system which he should have been answering for them. It seems to me that if my noble friend Lord Bowden had been devoid of sufficient experience in the specialised field which was the concern of his Department, he would have had to rely on the advice of top civil servants, who were, to say the least (according to my noble friend's standards), very inadequate.
It is fair to ask how many chartered mining engineers there are in the hierarchy of the Treasury, the Board of Trade and the Department of Economic Affairs. Is there anyone who understands even the plain vocabulary of the mining engineer, let alone the "buzzwords"? We are dependent upon other countries for our base metals, and we have yet to make a thorough survey of our own. I think it is fair to ask another question in view of the seriousness of the position. Has any Department suggested to the Institute of Mining and Metallurgy that they recommend a panel of mining experts be available for consultation before important decisions affecting their industry are made?
Some twenty years ago we had a comprehensive report from the Westwood Committee, of which I was a member, on the need to have a detailed survey made of our mineral sources, especially
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in the West Country. Some seven years ago my right honourable friend the Prime Minister made a thorough analysis of the position, especially regarding tin, and his conclusions re-emphasised the need for an exhaustive survey and appraisal of our base metal resources. He made a speech on the subject in another place during the Committee stage of the Finance Bill on June 21, 1961, which I recommend the Ministers now responsible for strengthening the economy, in the Treasury, the Board of Trade and the D.E.A., to read carefully. The subject was again raised during the Report stage of the Finance Bill on July 3, 1961, in another place when Members on both sides joined in emphasising the need for a tax-free holiday for mining companies when developing new mines in order that they should recoup the costs of shaft sinking and underground development.
It is quite illogical for the Treasury to declare that it is impossible. Australia, Canada, South Africa and Eire have all managed to legislate and encourage this recouping of high risk investment. A mine shaft cannot be taken up to some other part of the country and sold; neither can development levels and exploratory workings. It takes a large sum of money to sink a shaft and pay for specialised machinery and underground development. A metalliferous mine is not a factory whose buildings can be sold for another purpose and the machinery transferred to another factory. If after shaft sinking and development and installing the plant the ore body peters out or is proved unprofitable, then the whole of the initial cost is lost. The Treasury and the other responsible Departments are much concerned with precedents. In this case it is either an inability to face facts or a slavish adherence to departmental philosophy.
My Lords, I feel very lonely in this matter as the one mining engineer in your Lordships' House, but once more I want to warn the Government that our dependence on base metals from overseas could, in view of the geographical position and possible political changes in the Governments of the supplying countries, lead to a crisis in supply with very little warning. Is it not, therefore, utter lunacy to neglect any inducement to develop our own? It is my intention to ask a series of questions in the near future and to

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pursue this matter even more vigorously. Ministers, Chancellors and Governments come and go, but it seems that a rigid departmental philosophy of this kind, framed by a succession of civil servants, is too sacred a cow to be challenged by Chancellors or Ministers.
My Lords, I have been in this fight to develop the minerals in Cornwall and West Devon for over thirty years. In 1937 a committee from the Cornish Institute of Mining Engineers, of which I was President that year, went to present our case to the late Sir Thomas Inskip. We had in mind the experience of the First World War when Cornish tin and tungsten was so essential that the guts had to be pulled out of each of the few remaining mines in order to keep supplies going. The consumption of tin in those days was not very far off what it is now, and the production was about the same, nearly 1,000 tons a year. We wanted a long-term plan developed to open up tin mines closed down when the sources of alluvial tin were ample and cheaper in Malaya and elsewhere. These alluvial sources are now diminishing very rapidly. Nigeria was not a big producer in those days. We were told by Sir Thomas Inskip that we had no need to worry; all our year's output could be supplied in one shipment from Nigeria. It was all too obvious that this advice had been given by the top civil servants in his Department. Only two years before the 1939 war started we were then rearming. Even from 1937 it would have taken five years to sink and develop the mines we needed.
We in the mining industry are entitled to ask how much of this attitude still exists. Each Department will go to much trouble to defend its philosophy and resulting policy. What I want to know is who are the mining engineers who are consulted, and if there is no mining engineer or geologist available, by what standards do we measure the suitability of top civil servants to assess this kind of problem? We are deeply concerned with strengthening the economy, achieving balance of payments by reducing our cost of importing raw materials especially. We want to develop the base metal mining industry in Cornwall and other parts of the country, not only to safeguard employment but to safeguard our economy. We use over
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20,000 tons of tin a year and we produce only one-twentieth. If we produced one-quarter it would save us some £6 million a year on a key metal in industry.
My Lords, I have avoided most of the technical details of my previous speeches in order to emphasise the feeling of disgust in the mining industry, and especially in Cornwall, at the failure of our Treasury pundits to accept that which is part of a fundamental policy in other countries. Mining companies do not want the Government to pay for the shafts, the underground development and the special dressing plant. All they want is a tax holiday to recoup a high risk investment which, in the case of a factory, could not be deemed a high risk. The Treasury are not asked to lose money or invest. Neither is it a valid answer that allowances for tax relief in depressed areas and other allowances are adequate. All these concessions can be changed overnight. All we ask for is to be treated as well as mining organisations in Eire, Canada, Australia and South Africa—no more and no less. We cannot be expected to embark on a long-teem development programme otherwise. Tin is an extremely essential element in the alloys used in industry (I think my noble friend Lord Brown will agree with that, because at one time he was chairman of a big company), and while the target of £6 million additional production after five years of development does not seem a lot in terms of money and the quantity small in proportion to other metals used in manufacturing, this proportion, though small, is most vital. With a thorough geological survey and the co-operation of international mining companies, the initial target of £6 million could be achieved within or near five years and then another target set.
My Lords, I shall leave tin and base metals now, but before I sit down I should like to draw attention to another matter concerned with safeguarding employment, particularly in Cornwall. In the winter works programme for 1967–68 £27 million was allocated for the various development areas; the South-West, of which Cornwall is a part, received £2 million. This year, 1968–69, the total allocation is cut to £10 million, and the South-West has none. From October to May of last year, the winter, the South-West had the worst unemployment

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figures of any development area, and we received the £2 million to which I referred.
The figures so far this year indicate that unemployment will be worse and there is no allocation. The £10 million is divided between three development areas: the Northern area, £4 million; Scotland, £3 million; Wales, £3 million. The only justification claimed by the Government for excluding the South-West is that they must consider the effect of colliery closures. My Lords, pit closure is a long-standing problem, as everyone knows, and I cannot accept that answer as adequate. It seems illogical to use a winter works programme to solve a problem that is not seasonal, and at the same time completely ignore the needs of a development area that has the greatest seasonal variation. No dramatic change has taken place in the area in the last twelve months that justifies this complete omission. If the Treasury had declared a tax holiday for new mines in their Budget, even from 1961 onwards, there would have been great changes by now, and many ancillary industries would have been established in Cornwall and would have developed.
The people of the South-West, especially Cornwall. are geographically isolated, and by the behaviour of successive Governments they have reason to feel so. There is not sufficient sensitivity to the particular needs of isolated areas like Cornwall and the peripheral parts of some of the other development areas. Yet the near future might see important key industries considering moving down to areas like Cornwall where there are leisure amenities readily available to keep highly technical staff contented and happy. The quality of Cornish craftsmanship is far superior to that in some of the traditional industrial areas. I have spent over forty years down there and I should know.
Some real forward thinking is very necessary. For instance, if we are to improve and provide for industrial expansion in the South-West, whether it is in mining or in sophisticated industry, we need better educational facilities, especially in Cornwall where some 80 per cent. of primary schools were built before 1902. Yet in Cornwall capital building for next year has been cut to
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£23,000, which is microscopic—less than one-tenth of the smallest allocation for any other county in the South-West. Is there any wonder why the feeling of being ignored gives rise to deep resentment, and the Celts of Cornwall, like the Scots and the Welsh, are rebelling against the philosophies of Whitehall. My Lords, the wounds are deep and it will take a lot of time and patience and a completely new attitude before they heal.
7.14 p.m.
VISCOUNT MASSEREENE AND FERRARD: My Lords, the noble Lord, Lord Arwyn, need not feel alone if he is, as I understood him to say, the only mining engineer in the House. I quite agree that he is the only mining engineer here this evening because, so far as I can see, hardly anybody is in the House. I can assure him that there are quite a few Members of this House who are, I understand, mining engineers.
LORD ARWYN: My Lords, I apologise for my ignorance of that fact. No one has revealed himself as a mining engineer.
VISCOUNT MASSEREENE AND FERRARD: My Lords, I certainly did not want the noble Lord to apologise, because there is nothing for him to apologise for. Through the noble Lord, Lord Arwyn, I am going to give the Government the only bouquet they will get tonight from me, because I understand that the Government's efforts in the mining areas where there have been pit closures, with more to come in the future, are highly praiseworthy. I am also pleased that in these areas miners over the age of 55 will get 90 per cent. redundancy payment for three years. In my view, that is an excellent provision, because the pits have closed through no fault of the miners. For some middle-aged miners the decision to give them 90 per cent. redundancy pay is a perfectly just one, and I congratulate the Government on that. However, that is the only bouquet they are going to get from me to-night.
May I turn for a moment to the noble Lord, Lord Hankey? I agree completely with everything he said about the unions, for the simple reason that I have been saying it in this House for years. Now that the noble Lord has said it, perhaps somebody will listen. I quite agree that

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it is iniquitous that in the case of a power station a handful of men can turn a few knobs and can throw out of work half-a-million people. They can cut off all the power to the factories; they can even stop the trains. This is what I call the last link in the chain. There is far too much power in those few hands. I hope that we shall follow the example of other countries on the Continent and really put our trade union law in order: at present, it is completely out of date. The noble Lord has completely covered that aspect, so I shall not dwell on it any longer.
May I turn for a moment to the gracious Speech? I have heard it called "thin gruel", a "Woolton pie"; and I think it was also called a "hotch-potch". Personally, I call it a "mess of potage"—and a rather stale potage at that, because it really is an untidy Speech: there is no definite theme running through it. From my point of view, the only good thing about it is that the legislative programme for the coming Session is going to be manageable. The legislative programme that we had last Session was completely unmanageable; it was far too crowded for the length of the Session.
My Lords, may I bore you for a moment with some figures, for I have heard some figures quoted with which I do not quite agree? But first may I say that the only subject that I am going to talk about is the economic aspect of the gracious Speech. We have the same old recipe:
"My Government will press forward their policies for strengthening the economy".
Last year, we had the same thing:
"The principal aim of My Government's policy is the achievement of a strong economy".
Well, the two things are much the same.
If we take the statement in last year's gracious Speech, how has that been achieved? We have had devaluation, and we have had more taxation. I understand that since this Government came into being they have taken £2,000 million in extra taxation. We all know that we have debts of £3,000 million chiefly with the International Monetary Fund, and we tend rather to forget the standby credit of £800 million which the Government arranged when they announced the withdrawal by a certain date of our forces from the Far East and the Persian Gulf.
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They arranged this standby in case of heavy sterling withdrawals. We do not appear to have heard much about that lately.
The really worrying aspect is that this year Government expenditure, although we have not yet got the full figures, will certainly amount to £12,000 million. Since the Government took office in 1965, expenditure has risen from £9,310 million to £11,684 million in 1967. I agree that the rise this year is likely to be a great deal less, but it will probably amount to £400 million. I must not be completely destructive; I do not want to be too unkind to the noble Lord, Lord Beswick, because I realise that it is not his fault. But we must try to create conditions in this country which will enable us to build up this country's wealth. How otherwise can we have a foreign policy? How does Mr. Stewart, the Foreign Secretary, like going round the world with a load of debts on his shoulders amounting to £3,000 million? It must sometimes be very awkward for him. I am very pleased that in the last three months, as we heard from the noble Lord, Lord Brown, productivity has risen by over 6 per cent. as compared with the same period last year, and that over the same period exports have increased by 25 per cent. I think the noble Lord said that the actual increase in volume amounted to 14 per cent. The figure I have is one of 15 per cent., and I can give the noble Lord something there. The noble Lord's figures ought to be right, but I was sure that the figure was 15 per cent.
The noble Lord, Lord Brown, compared the figures with last year, which unfortunately happened to be a very bad year. If you are galloping a racehorse and want to see how good it is, you do not gallop it with one of your worst horses but with one of your best.
Last year the adverse visible balance was £636 million, and a most unfortunate rise in imports has offset any increase in exports for this year. The gross imports for the first nine months of this year have exceeded exports by £1,220 million. This, as noble Lords have said, has completely spoilt the improvement in exports with the aim of getting into surplus on the balance of payments. The noble Lord, Lord Brown, quite rightly pointed out that devaluation has helped exports to the extent of 8½ per cent. in value, but

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he did not point out (I certainly did not hear him say so) that devaluation has at the same time increased the cost of imports by 13 per cent. Unfortunately, that leaves a quite large gap. I am afraid that devalution has not been the boon for which some people were hoping. I agree that in August and September exports have done very well. If one includes invisible exports earned by the City of London in those two months we shall have broken even; but we are already £300 million "in the red" for this year.
My Lords, I am sorry to be such a Jonah, but these are the facts, and one has to look facts in the face. I am trying to find something cheerful to say, but I find it very difficult. The great trouble is that the public can have no idea of the gigantic task which faces this Government, as well as future Governments and the nation. Not only have we to find before 1975 the £3,000 million which is owed, mostly to the I.M.F., but we must also remedy an accumulated deficit of over £1,000 million on current account over the last two years. And if one works this out over six years, it means that we shall have to achieve an increase of nearly £700 million per year. If one takes the Chancellor at his word, as of course one must, he says that he is bargaining for an extra £250 million a year to build up our reserves. If one adds that figure to the £700 million, it means that one then has to find £950 million a year surplus. Is it possible? I very much doubt it. I always adhere to the Conservative policy that, in the long run, if one abandons Socialist dogma over the economy, if one teaches able-bodied people to stand on their own feet, and if one has a free economy, with plenty of incentives for brains and hard work—while at the same time always protecting the sick, the weak, and the unfortunate among us—the economy will get on its feet. There is in this country a great deal of good will.
Of course, it is a question of time, and that is why I do not quite agree with my Party over the prices and incomes policy. I am rather inclined to agree with the prices and incomes policy, provided that it is a temporary expedient. The noble Lord, Lord Balogh, wants it to be permanent, but he likes a closed economy. It is possible to have a closed
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economy in a country like Russia (although it will be a low standard of living), because it is a self-supporting nation, but in a great trading nation which has to trade with the world you cannot have a closed economy.
I quite agree that the Government are "on the spot", and of course the trouble is largely of their own making. The noble Lord, Lord Boothby, said that the Government had the most appalling financial legacy from the Conservative Government; and he rather implied that that fact was the chief cause of their troubles. But, of course, that is complete nonsense. If you deduct the amount of money which was used for stockpiling, the true deficit which the Labour Government inherited from the Conservatives was under £600 million. As I said, last year we had a deficit of £667 million, so the noble Lord, Lord Boothby, was exaggerating to a great extent.
To return to the prices and incomes policy, if it is to work properly wages must not be allowed to rise faster than prices. But wages have risen a lot faster than prices, and it is complete nonsense for the Left Wing of the present Government to talk of the great hardships on the workers of this country due to the prices and incomes policy. That policy has allowed the wages of the average industrial worker to rise by about £4 a week, while prices have not risen to the same extent. But the fact that prices have not risen to the same extent is part of the Government's trouble.
LORD WYNNE-JONES: My Lords, does the noble Viscount mean that real wages should always decrease?
VISCOUNT MASSEREENE AND FERRARD: No. my Lords, of course not. They should increase. But the point is that the object of the prices and incomes policy is that prices and wages should increase in unison. If you have prices soaring ahead, or wages soaring ahead, you will be in trouble. The Government have had to impose hire-purchase restrictions because wages have risen far more than prices, and they have had to take the heat out of the economy: there has been an excess of consumer expenditure because wages have risen more than prices. But hire-purchase restrictions are not a very satisfactory solution, because they affect various trades such as the motor industry.

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I feel that if the prices of non-essential goods had been allowed to rise, a large amount of surplus consumer expenditure would have been taken out of the economy quite naturally. I agree that we do not want prices of essentials to rise, but prices of things like tobacco, beer and all sorts of luxuries could be allowed to rise, and that would take the heat out of the economy. That is an economic fact, and it is quite correct. The noble Lord looks rather mystified, but I can assure him that that is quite correct.
LORD WYNNE-JONES: My Lords, I think I have understood the noble Viscount.
VISCOUNT MASSEREENE AND FERRARD: My Lords, this is an enthralling subject, but I must not speak for too long. I have mentioned savings often in this House, and we have heard them mentioned a lot to-day. Savings are another means of taking the heat out of the economy. Because I thought the situation was desperate, I suggested two or three times in this House that we should have compulsory savings. Perhaps I was a little wrong there, but I am now pleased to see that my Party has suggested tax-free voluntary savings, which is an excellent idea. But for savings to be effective we must ensure that they cannot he withdrawn within too short a period. If they are to help the present position it should not be possible for them to be withdrawn for, say, two or three years, because if they can be withdrawn within three months you will be back where you started.
I should like to agree completely with the noble Lord, Lord Brown, and to disagree with the noble Lord, Lord Boothby, over the question of import controls. We were given some extremely effective figures about import control, and about how it had affected America before the war. But import control is a double-edged weapon, and I quite agree with the noble Lord, Lord Brown.
May I just say a word about tourism, which is mentioned in the gracious Speech and which I think comes under the heading of the economic situation. We have heard about the selective employment tax, and we know that in parts of Scotland the Government have helped certain hotels by relieving them of pay-
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ing the selective employment tax. I think that 30 per cent. of the expenditure of the hotel industry is absorbed by the labour force, and the selective employment tax is therefore a very great burden. So if the Government really want to encourage tourism they ought to do away completely with the selective employment tax in regard to hotels.
The other point which I should like to make in connection with tourism and hotels concerns the Catering Wages Act. That rather operates against small hotels, because they find it very difficult to have a double staff. The average Continental tourist does not like dining at 6.30 in the evening; he is used to dining at eight o'clock, half past eight or nine o'clock. I do not know what can be done about that, but the Catering Wages Act is a definite drawback to small hotels. Bin I am pleased to see that the Highland Development Board are helping with hotels in the Highlands. That is very satisfactory.
May I just turn for three minutes to agriculture, and I will then end. When the Prime Minister made his devaluation speech he promised to give agriculture the opportunity to replace imports. We have not yet had that opportunity. Of course, I realise that we have many trade agreements with other countries which have to be honoured; that they take our manufactured articles and we have to take their primary products. But, my Lords, surely such an event as happened last January is not necessary. Last January all the farmers in my area of the South-East of England were holding their wheat, as the Government encourage them to hold it, when up the Thames came sailing about 250,000 tons, I think it was, of French wheat. Of course, the result was that we could not sell our wheat very easily and we had to take a reduced price.
Surely there ought to be legislation to stop the recurrence of this. I know we have improved the anti-dumping laws, but why allow this French wheat in? It seems completely pointless. It has to be paid for in foreign currency. I have often thought that we take too much American and Canadian wheat, now that we have these very good varieties and can produce perfectly millable wheat in this country. I should like to ask the Government to give agriculture every

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opportunity in the next Price Review to save imports by letting them produce more foodstuffs—and we can produce far more food. We can also help by exporting agricultural produce. For instance, all my barley goes to the Continent; and I think it was last year that we in this country exported almost one million tons of barley to the Continent. This is a great achievement when one remembers that we have various tariff barriers to broach.
My Lords, I shall end on that note: that I hope that, from the point of view of saving imports and helping exports, the Government will give to agriculture in this country an added urge to produce more. But, of course, when all is said and done one of the greatest things that the Government can do to help the economy is to cut down on their own expenditure. I quite agree that they have been trying to do this of late. They have taken some steps in this direction, but I hope they will try to take far greater steps towards this aim. My Lords, I think I have said enough.
7.45 p.m.
LORD GRANVILLE OF EYE: My Lords, I am sorry that the noble Viscount found such difficulty in finding something cheerful to say about the Government's economic policy as outlined in the Queen's Speech, because in what has been a wide-ranging and very interesting debate on our economic affairs I thought that most speakers seemed to agree that there is an improvement in our economic affairs and in the balance of payments, and certainly in productivity, and that we hope there will be a surplus next year. But in all of the speeches, or in most of the speeches, the rider has been added that we still have a very long way to go. One of the problems we have to face is: how do we get that little bit extra, and how do we guard against the setbacks?
My noble friend the Minister of State, Lord Brown, made an interesting reference to the problem of exports as it concerns the smaller firms, and I think this is going to be very important in the future. This is one of the problems we have not yet solved. Some of the smaller firms which want to export feel that export profit margins are smaller
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than the home market margins. Some of these firms do not like co-operating with their rivals, and they are also suspicious of unknown overseas agents; and many of them feel that the main attraction of trying to export, whether it is capital or consumer goods, is, after the squeeze, the bank accommodation which is extended to exporters.
My noble friend also referred, as did the noble Earl who introduced this debate to-day for the Opposition, when dealing with import substitutes, to the importance of agriculture, and the noble Viscount, Lord Massereene and Ferrard, also referred to this. Frankly, I should have thought that this was one of the things about which the Government should make a special effort in order to try to increase the agricultural production in this country and deal with some of the imports that are coming from Scandinavia—and the noble Viscount also referred to Canada and cheap wheat. Manufacturers in this country are showing a great willingness to try to help solve the import problem by using home materials as substitutes, and I think that the Board of Trade should take a very careful look at this subject again.
Some manufacturers complain that they are not getting, or cannot get, the same credit facilities from home suppliers as the importers offer in ordinary trade. Others are complaining that deliveries of the products which they are using in the place of imported materials are uncertain—and to a manufacturer this is a problem. They also complain of the prices in many cases; they are having to pay more. But if, as the noble Lord has said, imports are going to be the crucial issue in the coming months, the problem of these substitutes for imports is going to become even more important than that of exports. I agreed with the noble Lord, Lord Boothby, when he said that there are still too many luxury consumer goods coming into this country. But, as the Minister of State said in his interruption, we are international traders, and if we stop imports from coming here, it may reduce our exports. The best chance we have of increasing our exports at the present juncture is in the buoyancy of world trade and in the rising standard of living abroad, especially in some of the developing countries, as the noble

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Lord suggested in his speech. This problem of dealing with imports and exports and of getting our balance of trade right next year is a marginal one and it has to be dealt with very carefully.
My Lords, I would say one thing to my noble friend. Frankly, I think we must do more thinking about S.E.T. I agree with the noble Earl who initiated this debate that, whoever invented it, it has not been the success that we thought it was going to be. It has been passed on to the consumers and has resulted in fresh wage demands. I hope very much that in the next Budget, if not sooner, the Chancellor of the Exchequer will think again on this subject. We realise the intention behind S.E.T., but the personnel of consumer goods shops and stores, who are the people affected, are quite unlikely to find jobs in export in the development areas.
If I may highlight the one thing that I think is important in giving us the last push to achieve our target of surplus in our balance of payments, it is incentives—incentives for manufacturers, incentives for producers of import substitutes and for those engaged in productivity. I feel that something novel is required here. Let us take the case of the young executives—these are the important people—the young technicians and research and production personnel. Many of these, upon whom we greatly depend to increase our productivity, are finding it difficult to make ends meet. When they set up home, because of the new hire purchase regulations (which were, in my view, unnecessary, to say the least) the furniture, which is a bare necessity, will be dearer. Many of their competitors abroad do not have these restrictions; there is no furniture tax in the United States. The incentives there are better and more clearly defined.
In my view this is one of the causes of the brain drain. I would emphasise that we need these young men—we trained them and brought them un here—in industry in this country. We need them in our own programme of productivity. The young executives, the young researchers and designers, cannot operate without a base for themselves and for their family. They need a home. You can never get good supervisors unless they have good homes to work from. The
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cost of houses and mortgages is soaring. If they move to a development area, to try to comply with Government policy, they often lose in the buying and selling of a house. This Government has many young Ministers. What is needed is a fresh study of the whole question of incentives so that imaginative schemes can be produced and put before industry with, I am sure, beneficial results to productivity, to revenue and to our balance of payments. Our competitors are doing it.
My Lords, I will refer briefly to one other matter. Whatever the content of the gracious Speech, whatever measures—and there are hundreds of them—that the Government of the day may pass to deal with our economy, what we must ask ourselves is this: are these measures, these schemes that the Government are putting over, getting through to the people? This is a problem of communications or what is called "the gap". I believe it is part of the frustration that many in the country feel. In my view, to get these measures over to the people concerned, upon whose co-operation we depend, is almost as important as the measures themselves. Of course, the main methods of communication are television and the Press. I am sure that television and the Press have not yet found the right way—certainly not television—of communicating these policies to the people of the country. I am sure it is not in the slip-shod parade of personalities or in putting up tripwires. That is all right for Private Eye, but it is not right for the most powerful projector in the world. I think that both Government and Opposition have a part to play in this question of a new approach, now that our economic survival is the main, absorbing problem. Perhaps this is showing first in your Lordships' House in these debates on economic affairs which, in the main, are instructive.
My Lords, in conclusion, in taking the gloomy view that the noble Viscount was taking, I do not think we should under-estimate the long-term effects of the new approach to international co-operation and in the world of international credit stability referred to to-day. If this new form of co-operation, as referred to by the noble Lord, Lord Boothby, is successful, it is my view that, internationally and

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nationally, acute financial crises could become things of the past. But, in any event, our credit in this international organisation will depend as always on our ability to earn our way. Also we must not underestimate the likely economic consequences of the result of the elections in the U.S.A. We must not underestimate the powerful part America has played in the economic stability of Europe and of the world. Whether or not we go into the Common Market, we have to hope that under the new President America will continue to play that part in the future. If not, the last Budget and the Queen's Speech may be painfully irrelevant.
7.58 p.m.
LORD VIVIAN: My Lords, I apologise for rising at this late hour to speak in this debate and for the fact that I am doing so without my name appearing on the list of speakers. I promise to keep the House for not more than two minutes in speaking on a subject which I do not believe has been touched upon during this interesting and informative debate. Noble Lords may have noticed that the Press to-day has given publicity to the fact that two supermarkets, numbering some 900 self-service stores, are considering a scheme to introduce credit card shopping to relieve what is termed "the Friday night shopping bulge".
In his well-balanced opening speech in this debate, the noble Earl, Lord Jellicoe, made reference to the necessity to curb the spending spree, and the noble Lord, Lord Boothby, in his brilliant and witty contribution, made reference to the prudent housewife (one of whom I have the good fortune to be married to) who, in so far as it is possible, works on the system of "pay as you go." It is my contention, my Lords, that a system of credit cards for supermarkets may be the cause of overspending in this sphere. When winding up your Lordships' debate perhaps the noble Lord, Lord Beswick, will tell us what are the Government's feelings in this connection. For on the information I have the deputy managing director of one of the groups involved has already been quoted as saying:
"Credit cards could increase impulse buying. I think this is the the great strength of the credit card system; people are inclined to overspend."
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My Lords, I do not mean to imply that all credit cards are dangerous, but I think this system could turn out to be a subtle invitation to an already overspent family to go further into the red.
8.1 p.m.
LORD WINDLESHAM: My Lords, it is just as well that the procedure of your Lordships' House does not limit the boundaries of debate to discussion of those proposals which are actually contained in the gracious Speech. To-day's debate has gone very wide and covered an enormous amount of ground. It has ranged from that notable maiden speech by the noble Lord, Lord Jacques, on taxation, which has already been the subject of well deserved congratulation, to the strictures from the noble Lord, Lord Boothby, on the cleanliness of suburban railway trains. We have listened to speeches on the price of gold; on sterling as a reserve currency; import contols; industrial relations—even a speech on education and the school-leaving age. We have heard, too, of the duty-free champagne which was consumed by the noble Lords, Lord Francis-Williams, and Lord Beswick, as they steamed across the Atlantic twenty years ago.
What struck me about so many of the speeches to-day—more so, I think, than during some previous economic debates—was the consistent sense of vision that lay behind them. There may be some sort of natural order about this, because it is precisely this quality which is so lacking in the Government's own approach, both in the gracious Speech and in the new restrictions on spending announced on Friday by the President of the Board of Trade. The Government have not given much indication of being able to do anything more than respond to events. For an Administration which has talked so much about purposeful action and careful planning it is particularly ironic that there should be so little evidence in the gracious Address of specific proposals for strengthening the economy.
Of course we can all agree in general terms what is the overriding need: it is to build up the health of the economy and to maintain the value of the pound. We may talk in generalities of this kind, but the question which has to be put to the Government at the end of a debate like this is: How is it to be done? The

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collapse of the National Plan was only one recent example of the crucial gap between recognising and stating a problem, and taking action to influence events which may lead towards its solution. I believe that we have had in our debate this afternoon another example to which I shall refer in a few minutes.
What is needed so urgently in the management of our economic affairs is a policy, coherently stated and consistently adhered to, which has as its aim the creation of wealth. The arguments about sharing wealth must surely be secondary to this. Unless more wealth is generated in this country the social reasoning behind egalitarian policies will become increasingly arid, irrelevant and self-defeating. It was the noble Lord, Lord Boothby, who earlier in the debate, mentioned "penguins" in the Treasury. In a more literal sense, my Lords, without more wealth we shall resemble a colony of penguins scrambling for territory on an iceberg as it floats towards the Equator. In this context let us look at the increased restrictions on hire-purchase and rental contracts announced by Mr. Crosland on November 1—two days after the Queen's Speech, and one day after the Bassetlaw by-election.
These deflationary measures, incompetently handled as they were, so far as the motor industry was concerned—based on statistics which were not accepted by the motor industry and which still have not been clarified—were taken because consumer demand is running at a very high level. When he opened the debate this afternoon the noble Lord, Lord Brown, told us that spending in the second half of this year has been comparable with the same period last year; whereas it had been hoped that, following devaluation, there would have been a fall of about 2 per cent., but this did not materialise; and yesterday the Chancellor of the Exchequer, speaking in the Economic Debate in another place, accepted the inaccuracy of the Budget forecast. Yet if the benefits of devaluation are to be achieved and sterling is to become a more competitive and sought after currency, there must be a swing away from spending towards saving. For a few minutes I should like to follow the noble Lord, Lord Byers, and also my noble friend Lord Jellicoe, on a policy for personal savings.
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There is no sign at present of reduced consumption: hence last week's restrictions. I do not believe that anyone who has taken part in this debate has challenged the need for that action to be taken. What has been questioned is the policy which led up to it. There must be a limit to the number of times that traditional measures such as these—restrictions on hire-purchase, and tighter bank credit—may be resorted to without losing their effectiveness. Instead of waiting, passive and apprehensive, until the problems caused by high consumption could not be contained any longer, would it not have been better to have evolved a policy which might have allowed a different course of action over a longer period of time? Was there any alternative to the old favourites? In my view, and in the view of my noble friends, there was an alternative, and there still is. If it is beyond the powers of the Government to devise a scheme to encourage personal saving, I am pleased to tell them that the spadework has been done for them already. One such scheme has been under consideration now for some months by a joint Working Party set up by the Treasury, the C.B.I. and the T.U.C. which is chaired by the Financial Secretary to the Treasury. This scheme was originally published by the C.B.I. in June, and I will say a little more about it later.
Who can doubt, if he gives himself time to think it out, that the moment has come to make a major and determined effort to change ways of reacting? The traditional measures are there and so are the traditional habits of thought; watching trends, trying to decide whether this is the right moment to apply the regulators, whether it should be later, whether action could be avoided altogether. It is not easy to make a major and determined effort to change course and evolve a policy for personal saving.
As things now stand, what incentive is there to the wage-earner to save? He has only to look about him to see how the value of money has declined over the last few years. Who can be surprised that higher wages have resulted in higher spending rather than in greater saving? It is salutary to remember that to-day in this country we save less per head of the population than almost any other developed country in the world; and,

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what is more, the trend is getting worse. No doubt the noble Lord, Lord Beswick, will have some statistics from the Treasury, but according to the figures I have, the savings ratio—that is to say, savings as a percentage of personal disposable income—has fallen consistently over the last three years.
In 1965, it was 8.1 per cent.; in 1966, 7·8 percent.; in 1967, 7·1 per cent., and in the last quarter of 1967, the last period for which statistics are available to me, it was down to 6·5 per cent. I mention these figures to underline the need to reexamine this matter. Several noble Lords speaking in the debate have said there is an urgent need for some measure or other, but these figures indicate that the time has come to treat this subject of personal savings urgently and seriously. It is not only important in that a rise in personal saving would help the economy in this country, but because it would also do much to influence our creditors overseas.
I should like to take up one or two points from the speech of the noble Lord, Lord Balogh, because they illustrate the general proposition I referred to earlier. The noble Lord's speech was so all-embracing that it was difficult to follow everything he said. Clearly, he did not allow himself time to develop all his points (he could not do so on such a wide canvas), and I hope I am not misrepresenting him when I say that he rather dismissed personal savings as an alternative to taxation. He doubted whether any administrative machinery could be devised which would distinguish between savings which were earned, acquired or inherited. Well, my Lords, is this not exactly what professional economists in the Government service should be concerning themselves with?
We heard from the noble Lord an analysis of Britain's economic problems and an extremely interesting and well-informed analysis it was. He said, for example, that the performance of some industries has been "sluggish"—the chemical industry was mentioned—and that in some instances managers were inadequately skilled. This may be so. But what is needed is to move from the position of analysis to the position of action. It is exactly here that the Government are so weak: not in telling us what is wrong in society, or in coming forward with
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proposals which may be interesting and imaginative, but in actually getting these into effect. If the problem is to evolve a workable method of personal saving, let them come forward with schemes to overcome these difficulties. If it is said that it cannot be done, I recall the remarks of Mr. Douglas Houghton, one of the founders of P.A.Y.E., when he pointed out that, though many people had declared the scheme to be unworkable, once it was instituted P.A.Y.E. had worked perfectly satisfactorily and has now been standard practice for many years.
Let us look briefly at some of the alternative proposals for personal savings schemes which have been suggested. Earlier this year the C.B.I. proposed a practical way of saving from earnings. This was based on an improvement in the rates of return and the establishment of administrative machinery to collect and handle funds in the most convenient way possible. The scheme was detailed in a C.B.I. paper on personal savings published in June of this year. This proposal is now being studied by the Working Party already referred to. In our own Party, on this side of the House, we have also published detailed proposals for a system of tax reliefs against blocked savings lodged in a special savings account. By this method a taxpayer on standard rate of income tax could obtain an effective rate of interest up to 14 per cent. per annum. This would be subject to a maximum limit on the amount of annual saving, and to a maximum income limit of £3,000 per annum for a man with three children.
These schemes may turn out to be faulty in some way or other, and it is no doubt for this reason that the Treasury are considering one of them so carefully. But surely there is a real need to concentrate on evolving some method whereby people can be encouraged to save rather than to spend? Apart from anything else this would help to shift the emphasis back to what used to be called thrift. It is rather an out-dated and stuffy word, but it has connotations of independence and initiative which are as topical to-day as they ever were. Every fashion comes round again, and perhaps this particular ideal is due for revival soon. My Lords, I do not want to go on too long about personal savings, because it has already been raised in this debate.

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But I would ask the noble Lord, when he comes to reply, whether he can tell us what progress has been made by Mr. Harold Lever's Committee, what action the Government will take to implement their findings, and whether we can expect to see a scheme not later than the time of the next Budget.
The final matter I should like to touch on before closing is the reference in the gracious Speech to making better use of the resources in the regions. In regional planning the dilemma I have already referred to, between the creation of wealth and the sharing of wealth, comes to a head. The location of industry policy rests on two propositions: that industrial development should be encouraged by means of investment grants, and that unemployment should be relieved by steering new industry towards the less prosperous areas of the country. We heard from my noble friend Lord Ridley in moving terms some of the problems of the Northern Region when he spoke earlier in the debate.
We have here an overlap between economic and social objectives—a theme of the speech of the noble Lord, Lord Balogh. A Committee under Sir Joseph Hunt is examining at present the "grey" areas—that is to say, those areas with serious economic and unemployment problems which do not qualify for the full range of benefits and incentives that are available in the development areas. I would say to noble Lords opposite that this seems to be another area of policy in which there is a need for the Government to initiate fresh action. The present policy of offering financial incentives to companies willing to expand in areas of high unemployment, backed up by the I.D.C. procedure, can continue to be used, although it might have the effect of limiting expansion in the more prosperous areas.
My noble friend Lord Ridley pointed out that this traditional, well-intentioned policy is now costing about £300 million a year. Yet some of the problems have actually grown somewhat worse—the unemployment figures (in the Northern Region), for example. So here again it is timely to re-examine the whole question of regional planning. The policy needs to be looked at in terms of the entire package of controls and incentives, what they are achieving, and measuring
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the cost that is involved. I understood that Mr. Peter Shore, the Secretary of State for Economic Affairs—there still is a Secretary of State for Economic Affairs—was to make a big public speech at the end of last month revealing the Government's thinking on regional planning. If he made it I cannot find any trace of it. So I ask the noble Lord who is to reply whether the Government are making a review of development area policy and, if so, when conclusions are likely to be announced.
My Lords, we have had a long debate and we now want to hear the Minister in reply. In the end, the economy will respond to the environment in which the individual citizen lives and works, pays taxes, spends and perhaps, with a little more initiative, can be encouraged to save. What Ministers say affects this environment. Appeals for greater effort can lose their impact, and are beginning to do so, because in a sense they are only half the solution to half a problem. Increased prosperity, alas!, does not result just because people work harder. It is also the consequence of greater efficiency and greater ingenuity in the way in which they work. All our hopes and expectations of a rising standard of living in the future depend to a large extent on those who have the enterprise to discover and introduce new products, new services and new methods of working. Such enterprise is not the monopoly of the scientist, the big businessman or the inventor; it exists at every level, from shop floor to shop counter. There are many opportunities for enterprise and innovation. The principal objective of economic policy in this broad sense should be to ensure that all these opportunities are taken; that incentives are introduced, and that rewards are seen to be within reach. My Lords, this is the job that is in front of the Government. Let us hope for all our sakes that they recognise it.
8.20 p.m.
LORD BESWICK: My Lords, we have come to the end of our debate on the humble Address. It has ranged widely, from Grosvenor Square on the first day to Chile and China on the second day, and to-day, as the noble Lord, Lord Windlesham, has just said, we have gone over the whole field of our agricultural, financial and economic affairs. I shall not be expected to reply to everything

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that has been said this evening. I hope it can be said, however, that after the three days' debate ideas have been clarified and maybe attitudes modified. Certainly to-day we have had a constructive and informed discussion, and it is exceedingly gratifying to think that we could have discussed all these controversial affairs without one word being uttered about "personal honour".
Like the noble Earl, Lord Jellicoe, and the noble Lord, Lord Windlesham, I refer to recent exchanges between Members in another place only in passing, and I make two brief points. Great as is my love for the other place, in which I had the privilege to serve for nearly 15 years, there are occasions—and yesterday was one of them when I feel that some Members there have a questionable right at all to consider themselves superior to this Assembly. Secondly, it seems to me ironic, to say the least, that allegations should be made that my right honourable friend Mrs. Castle, of all people, should have been afraid to tell the electorate the truth, when we have seen how courageously she has stood up in recent months and faced so many of her friends with the prices and incomes policy.
Having said that, my Lords, about events elsewhere. I immediately come back to this place to congratulate my noble friend Lord Jacques on his maiden speech. I expected from him a constructive, down to earth, well thought out and relevant speech on that part of the economy for which he is so well qualified to speak, and our highest expectations were realised. The noble Lord is chairman of the National Executive of the Co-operative Union. He was himself the chief executive of one of the most successful and progressive constituent societies of that union. He is now the prime mover in the campaign to get the great Co-operative Movement, with its £1,000 million a year annual retail sales, on a more efficient basis. If anybody in this House is qualified to speak on there matters, then it is my noble friend Lord Jacques. What he said to-day about taxation is worth studying carefully, and I shall do my best to see that it gets the study it deserves.
I should like to congratulate also the noble Lord, Lord Vivian, on the brevity with which he put his point. I think it
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may well be that some of us could follow him in the matter of brevity. I would say to him that a Government appointed Committee under the chairmanship of Sir Geoffrey Crowther is at present examining the subject of consumer credit, and no doubt the practices to which the noble Lord referred will be considered by that Committee.
LORD BYERS: He is Lord Crowther now.
LORD BESWICK: I am grateful to the noble Lord. He was Sir Geoffrey when he was appointed to the chairmanship. The noble Earl, Lord Jellicoe, my noble friend Lord Jacques, and other noble Lords, said something about the possibility of a shift in thinking towards indirect taxation. It is true that some of the earlier objections have diminished and attitudes are changing. There is a good deal of thought going on, and that is why I think that what my noble friend said will be of special value.
The noble Lords, Lord Jellicoe, Lord Byers, Lord Massereene and Lord Windlesham, asked about these twin subjects of personal savings and consumption. I agree with them that personal savings are important. Having, like my noble friend Lord Jacques, been actively concerned with one of the greatest savings institutions in the country, the Cooperative Movement, I could not think otherwise. But I have been asked to give figures, and I am glad to give them, because some of the figures given by the noble Lord, Lord Windlesham, were not, I think, quite up to date. It is true that personal savings were low in the first quarter of 1967 and the first quarter of 1968 when consumer expenditure was running at high levels, but subsequently, in the second quarter of this year, when consumer expenditure, on a seasonally-adjusted basis fell substantially, this fall was accompanied by a marked recovery in personal savings to the second highest quarterly figure ever known. This recovery was almost certainly maintained in the third quarter at a slightly lower level.
I know that the National Savings movement have had a great struggle to get their share of these total national savings, and I join with the noble Lord, Lord Byers, in paying tribute to the efforts of those noble people who serve

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the National Savings movement. They have their difficulties in the modern world. As the noble Lord, Lord Windlesham, said—and he seemed to be very well advised of Treasury matters in this regard—there is a Working Party now sitting under the chairmanship of the Financial Secretary considering what incentives can be given towards encouraging savings. There has been one particular scheme, to which the noble Lord made reference, but there are mechanical difficulties and there are certain difficulties about principle and the equity of the scheme. Nevertheless, it is being considered, with others. But I am not able to say anything at the moment as to what recommendations may be made by this Working Party.
My Lords, if one turns to the total money supply or personal consumption, which is the other side of the savings coin, again the figures are not nearly so depressing as the noble Lord, Lord Byers, seemed to suggest. The first six months of the current financial year have shown a significant reduction in the Central Government's borrowing requirement compared with 1966–67, despite the fact that three of the measures introduced in the Budget (the increased rates of S.E.T., the corporation tax and the introduction of the special charge on investment income) will have their effect predominantly in the final quarter of the financial year. The central Government is therefore likely to be in surplus in the second half of the financial year. Taken in conjunction with the restraint on bank advances, this surplus is likely to produce a very effective curb on the growth of the money supply. With that curb, and with the three taxes to which I have referred (the increased rates of S.E.T. and the corporation tax, and the introduction of the special charge on investment income) all biting after Christmas, and with the new hire purchase regulations that have been announced, it is reasonable to believe that effective demand will keep to that narrow path between wasteful deflation, on the one hand, and dangerous reflation, on the other. In other words, the figure suggests that as the result of the measures taken personal saving and personal consumption will be about at the level which the Chancellor is seeking to achieve.
LORD WINDLESHAM: My Lords, I am sorry to interrupt the noble Lord, but if he has come to the end of that point, may 1 say that it may be the level which the Chancellor is seeking to achieve, and it may be that the performance in 1968, for which the noble Lord has more up-to-date figures, is an improvement on the last quarter of 1967, but does he challenge the figures that I gave, that for the last three years, 1965, 1966 and 1967, the savings ratio has fallen from 8·1 to 7·8 to 7·1?
LORD BESWICK: No; I am not challenging those figures at all. In fact, the noble Lord was absolutely accurate, except that he did not project his figures further into this year. The truth is that in the first quarter of 1968 they went lower still. As I have said, in the second quarter the figure went back to 9·3 per cent., which is the highest percentage of personal savings we have known. Also I stated that the trend, appears to be somewhere around that figure.
I was asked by the noble Lord, Lord Granville, and other noble Lords, about incentives; and the noble Viscount, Lord Massereene, and the noble Lord, Lord Granville, asked about what they described as excessive taxation. I am bound to say that a good deal of the psychological frustration which undoubtedly some of these younger executives and others fee] is there, but it is largely self-induced. They work themselves up into a self-pity which really is not justified by the facts. I have taken some trouble to get the comparative figures of taxation in order to see just how our executives compare with those overseas. I am sorry I cannot publish all the figures, because they make interesting reading, but the Chancellor is aware of the necessity for maintaining incentives for this category of people. He was at some trouble not to increase income tax or surtax on that bracket of income. The fact is that no surtax to-day is due, because of reliefs, on earned income until it exceeds £5,000.
Comparing it with other countries, I find that on a gross salary of £1,200 a year, disposable income of £1,059 certainly is lower than in most other industrial countries of the West. We do in fact come ninth out of ten; the Netherlands is lower than ourselves. But the other nations are not all that much better

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off. In the German executive's pocket £1,084 remains; £1,103 in New Zealand, and £1,147 in the United States. When we come to this £5,000 figure, we find that the United Kingdom is sixth in the list of ten. At a salary of £5,000 we have a disposable income remaining of £3,590. We are really not so far behind the United States, second in the list, with a disposable income of £4,112. France, with £4,411, is top of the list. But if we take into account exchange rates, the cost of living there, and indirect taxation, the comparison is by no means as unfavourable to the United Kingdom as certain noble Lords would have us believe.
LORD BYERS: My Lords, is it not a fact that many other benefits are available, for instance, to American executives? With something like fifteen thousand a year, they have far more. They have these savings systems, stock options; they have many things of that kind. I do not think that that was a completely fair comparison.
LORD BESWICK: My Lords, I have no doubt that there are all sorts of other "fringe" benefits one could bring in, and certainly when one gets up to £15,000 or £20,000 a year—
LORD BYERS: Dollars.
LORD BESWICK:—there are other considerations. But the range we were talking about was that of young executives. The figures that I have mentioned—
LORD BYERS: My Lords, may I say to the noble Lord that the range we are talking about in terms of America is 15,000 to 20,000 dollars. This is about the right conversion rate for a £5,000-a-year man here.
LORD BESWICK: My Lords, the noble Lord believes he has a point. I have myself spoken in recent weeks to two American families, both of whom had members needing to have medical attention. Reckon up how much it costs to have medical care in the United States as compared with what one pays in this country. Then, I would ask the noble Lord if he would adjust the prejudice which he has against the situation in this country.
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I was greatly interested in what the noble Lord, Lord Fraser of Lonsdale, and the noble Lord, Lord Boothby, had to say about the price of gold. I must say that Lord Boothby was always rather a hero of mine in monetary matters ever since I heard him say in 1946 (I think it was) that he was going to vote with the Labour Government in favour of the nationalisation of the Bank of England. I thought he was very rational in these matters. But I just cannot understand why he is so enthusiastic about this metal which they dig up in one part of the world in order to bury it in another. Both noble Lords argued forcibly that the best way of increasing international liquidity would be to raise the monetary price of gold. I was glad to have the support of my noble friend Lord Francis-Williams and my noble friend Lord Balogh against their point of view.
It is certainly true that this would be a quick way of increasing total liquidity. But there are disadvantages. It would be most uneven in its effects. The major beneficiaries would be the gold-producing countries and the big gold holders. When I say that, I assure the noble Lord. Lord Fraser of Lonsdale, that I do not say it because of any prejudice against apartheid. That does not enter into it. It would be to the disadvantage of many of the less developed countries, which on the whole have very little gold. It would have inflationary effects in many countries, both because of the sudden very large increases in reserves and because of the amount of "dishoarding" which would take place. It would also have a disruptive effect in the international monetary system. especially since any increase in the official price of gold, to be stable and safe from speculation, would have to be large. It would be a backward step, a retreat from the more rational ways of dealing with the world's liquidity problems.
LORD FRASER OF LONSDALE: My Lords, will the noble Lord forgive me for putting an extremely short question? How could it hurt any country if the world were richer?
LORD BESWICK: If the world is richer? But if that wealth is concentrated in one country as compared with another,

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if the rich countries have a sudden accretion of wealth, it does not help the poorer countries whose wealth is not increased at the same time.
LORD BOOTHBY: My Lords, if the noble Lord will forgive me for interrupting, I said in the course of my remarks that a corollary of raising the price of gold would he substantial loans, gold loans, to the underdeveloped countries.
LORD BESWICK: My Lords, that is quite true. The noble Lord, so far as this one disadvantage is concerned, would meet my point, though of course we have no guarantee that those countries who would benefit to that extent would take this enlightened action. I was saying that in my view, and in the view of Her Majesty's Government, it would be a backward step, a retreat, from the more rational ways of dealing with the problem, ways which include the Special Drawing Rights Scheme. Our view, therefore, is that the main requirement in the interests of general stability in the monetary system is to reaffirm the official position, the official gold price of 35 dollars an ounce. I am only sorry that my personal regard for the noble Lord, Lord Fraser, and the noble Lord, Lord Boothby, does not justify me in being forthcoming on this point.
I was extremely gratified to hear my noble friend Lord Francis-Williams recall our horizon-sweeping talks which we had on the first voyage of the "Queen Elizabeth". It was many years ago and I am glad to think that, although the ship has retired, both he and I contrive to carry on. I agree with him that we have gone some way towards realising some of the early hopes that we expressed on that occasion. The Special Drawing Rights Scheme will be a breakthrough in international monetary arrangements. The Scheme will require amendments to the Articles of Agreement of the I.M.F. which must be accepted by three-fifths of the members having four-fifths of the total voting power before they can come into force.
I was asked what progress had been made. Acceptance is taking longer than we had hoped, although it is still conceivable that the necessary percentage of acceptances to the amendments will be reached by the end of 1968. I state, my Lords, that this new asset will not of
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itself, of course, put right our balance-of-payments situation, but it will help to give us that extra international, stability in which we can continue to put our house in order. For the first time the nations of the world have agreed to take a new international paper money different from national currencies and different from gold. It will take its place as a full supplement to existing reserve assets and we can expect the importance of its world role to grow.
LORD BOOTHBY: It never will.
LORD BESWICK: My Lords, the noble Lord, Lord Windlesham, asked about regional policies and he referred especially to the speech of the noble Viscount, Lord Ridley. The noble Viscount, Lord Ridley, thought that he had possibly been a little overlong in putting his case for the North-East. Let me say at once that I, for one, do not believe that we should be allowed to forget for one moment that there are still too many unemployed in his part of the country. Let me also, if I may, pay a compliment to the noble Lord for the contribution he is making in the North-East, both on the Planning Council and on the county council.
In this context I was also impressed by what my noble friend Lord Wynne-Jones said about the relevance of raising the school-leaving age in these areas. One can see how many people would be taken out of the labour market, and one has a vision of occupying these presently unemployed people for the purpose of giving them extra education. I was greatly moved by what the noble Lord, Lord Wynne-Jones said. Indeed, I was interested in what he said generally about educational policy, and I shall read his remarks with interest to-morrow.
To return to the North-East, as the noble Viscount, Lord Ridley, said, the problem there is bedevilled by the inescapable run-down of the coal-mining industry. I am told that since December, 1965, in the North-East alone there are 27.500 fewer men earning their living at the pits. Nevertheless, I am sure that the noble Lord would wish to be fair, and I am glad he paid a tribute to the National Coal Board for the humane way in which they have tried to handle this contraction in their industry. It is fair to stress

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that there is a world of difference between their attitude and the attitude in the Jarrow days to which he referred. However, the point is what is being done now. The noble Lord emphasised the importance of public investment and what is called the "infrastructure".
Last winter the Government authorised a programme of minor public works to be carried out in order to provide additional employment at a time of year when unemployment is at its height. A similar programme has now been advanced for the winter of 1968–69. The Northern Regional share will be £4 million. In answer to the noble Earl, Lord Jellicoe, the total for this kind of "ambulance" work in all areas will be £10 million. The public investment in the North region on new construction work rose from £83 million in 1965–66 to a provisional £140 million in 1967–68, an increase of nearly 69 per cent., and by far the fastest rate of increase for any region in the United Kingdom. Local authorities are cooperating with the Planning Council in a three-year programme for the reclamation of derelicted land. In a ten-year period (and the three-year programme will be rolled forward) some 15,000 acres will be reclaimed.
Government outlay, calculated to stimulate new industry in the region, and the expansion of existing industry, is now running at the unprecedented level of £100 million a year. Some of these inducements were introduced comparatively recently and need time to make their full impact. Even so, so far this year approvals for new factory space for the Northern Region have already exceeded the figure for the whole of 1967 by almost 3 million square feet. Some 18,200 jobs, including 12,500 for males, are expected to result from this year's I.D.C. approvals. Altogether there are over 37,000 manufacturing jobs in prospect for the region over the next four years.
On top of this, a large number of male jobs will be provided by the construction of the Alcan aluminium smelter at, Lynemouth and the nuclear power station at Seaton Carew. Moreover, hundreds of existing jobs on Tees-side, as the noble Lord himself indicated, have been safeguarded by Government action through the Shipbuilding Industry Board,
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to keep the Furness shipyard open. The county council, of which the noble Lord is a member, has been pressing for help from the Government towards the development of Cramlington New Town, and the Treasury has agreed that some extra assistance should be made available and the necessary discussions are now in train.
Something, therefore, is being done, and despite what the noble Lord, Lord Windlesham, said about the figures still going up, the fact is that unemployment in the Northern region fell slightly—very slightly, admittedly—between September and October. Nevertheless the trend must surely be welcome. The noble Viscount, Lord Ridley, asked whether some of these considerable sums could be spent more wisely. One cannot be dogmatic about this, of course, and the Hunt Committee was commissioned to go into this matter. I cannot say what recommendations that Committee is going to make.
The noble Earl, Lord Jellicoe, and the noble Viscount, Lord Massereene and Ferrard, spoke about the importance of agriculture as an import saver. The Government agree that the selective expansion scheme has yielded real results. No industry has done better than agriculture so far as productivity is concerned. The noble Earl, Lord Jellicoe, asked about the Agricultural "Neddy" Report. My right honourable friend the Minister has had vigorous discussions about this Report, and I anticipate that he will be in a position to make a statement about the intentions of the Government one day next week.
The noble Lord, Lord Hankey, suggested that our problems would be eased if instead of damping down consumption we stepped up production. Of course this is so obvious that there must be a snag in it somewhere. The main snag, surely, is that there need be no limit at all on production if sufficient of the product could be exported. We just cannot afford at the present time to produce too much for home consumption when we cannot pay the cost of the imported raw materials of which the product is made.
There was a good deal of talk in another place yesterday about the superior growth rate in the 13 years of Tory

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rule. Of course the growth rate of production was then higher, but the seriousness of our situation in 1964 stemmed largely from that very fact. We were producing goods at a faster rate, enjoying their consumption at home; we "never had it so good," but we were not earning enough to pay for the import bills. Our policy is certainly to encourage production, but within a strategy which ensures that we can export enough of our products to give our economy a sound basis.
Devaluation did much to give our exports a competitive edge, but increased efficiency in the longer term, as the noble Lord, Lord Balogh, emphasised, will be more important than this initial financial shot in the arm. I have a good many notes indicating the extent to which we had tried to get an efficient restructured industry, but I am sure noble Lords will not want me to go right through them.
LORD BOOTHBY: My Lords, before the noble Lord sits down, can he say whether before the next Budget the Government will look into the effects of S.E.T. on the tourist industry?
Loan HANKEY: My Lords, will the noble Lord also kindly consider whether all these strikes do not in fact affect our exports? That is exactly the point I am trying to make.
LORD BESWICK: My Lords, I regret to tell both noble Lords that I was in fact not sitting down. I was simply saying that I was not going into more detail in regard to the undoubted improvements in industrial efficiency. I was going to answer one or two other questions, including something about the Donovan Report. I was asked about a number of points by the noble Lord, Lord Grantchester. I have a full note of what he said, and I shall read his comments with interest to-morrow. I only say this about the situation in the Far East, and I say it in the context of the debate we have been having. It is difficult to envisage any other single step under the direct control of the Government which could have made a comparable impact on the balance of payments problem which lies close to the heart of this country's economic difficulties.
LORD GRANTCHESTER: My Lords, would not the noble Lord consider our
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investments? They are worth millions to our balance of payments. I think they are worth considering.
LORD BESWICK: My Lords, possibly I misunderstood what the noble Lord said and, as I say, I will read his remarks in the morning. If he was asking us to reconsider our withdrawal from South-East Asia—
LORD GRANCHESTER: My Lords, no, I was not suggesting any such thing. I was asking for meetings under our chairmanship or the chairmanship of Britain and France to bring together the countries from Australia in the South to Japan in the North in greater friendship for co-operative development.
LORD BESWICK: Having just come back from that part of the world and having discussed many of these matters with some of the political leaders there, I agree with the general proposition, but I should like to study in more detail what the noble Lord said.
I was asked by my noble friend Lord Arwyn about the possibility of a tax holiday for mining. It is not the Government's policy to give a tax holiday, although we have shifted investment incentives towards direct cash assistance in the form of investment grants. There again I will take up with my right honourable friend the proposition which the noble Lord has put forward.
The noble Earl, Lord Jellicoe, the noble Lords, Lord Byers and Lord Hankey, and the noble Viscount, Lord Massereene and Ferrard asked about the trade unions and the Donovan Report. There is little of value that I can add to what my noble friend Lord Brown said on the Donovan Report, except that my right honourable friend the First Secretary has now received the comments of the C.B.I. and the T.U.C. Those comments are being studied; there will be further discussion and the Government hope to present a White Paper on their reactions to the Report around the end of the present year.
The noble Lord, Lord Boothby, asked about S.E.T. and so also did the noble Viscount, Lord Massereene and Ferrard, and others. As the noble Lord knows, we have yet another study, under Professor Reddaway, looking at the whole consequences and implications of S.E.T. The question of the value-added tax again is

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a matter which is the subject of very detailed consideration and I am afraid I cannot go beyond that; but what the noble Lord and others said clearly must be a matter for consideration.
My noble friend Lord Balogh, who apologised for the fact that he had to go, made some relevant remarks, I thought, about group responsibility. He said that as we move into a more humane society the more difficult does it become to get social discipline. He might also have said that the more inter-dependent we get one upon the other, or one group upon the other, again the more difficult it is to get unselfish co-ordinated action, although at the same time the more important it is that we get that co-ordinated action. This goes for both sides of society. To the noble Viscount, Lord Massereene and Ferrard, I would say how extraordinary it is that almost all of us—and he, I think, no less than any of us—feel that the solution lies in further sacrifice from the other fellow. This surely is a basic reason why so far since the war we have not solved our problems. All are agreed about the prime objective, but one section or one group or another always oppose any proposal which affects their own consumption. We have seen attacks on the hire-purchase restrictions. I had from the Leader of the Opposition and others the other day bitter complaints about the temporary limit to the foreign travel allowance. There is continual complaint of Government action to restrain the investment of capital overseas. We have seen the reaction of vested interests to the curb on third-party sterling credits, and we have had the dogged resistance from some trade unions to any attempt to plan wage increases on a rational and equitable basis. Nevertheless, it can be said, I hope, that this Government have tried to do what they think is right, despite the unpopularity which has been created in one section after another. It is my own view, although my view possibly carries little weight compared with others, that we have made progress, and given the kind of group responsibility to which my noble friend referred there is no reason why that progress should not be maintained until we do achieve the balance of payments which we all require.
On Question, Motion agreed to, nemine dissentiente: the said Address to
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be presented to Her Majesty by the Lords with White Staves.

SAINT MARY, HORNSEY BILL
Report by the Chairman of Committees, under Standing Order No. 92 That he is of opinion that the Bill should be proceeded with as an opposed Bill: Ordered, that the Bill be committed to a Select Committee the Committee to be proposed by the Committee of Selection.
SAINT SAVIOUR, PADDINGTON BILL
Report by the Chairman of Committees, under Standing Order No. 92 That he is of opinion that the Bill should be proceeded with as an opposed Bill: Order of commitment made yesterday vacated Ordered, that the Bill be committed to a Select Committee, the Committee to be proposed by the Committee of Selection.
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