Sitting of 21 April 1969

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

    London (Underground Motorways)
    Mr. Gwilym Robertsasked the Minister of Transport what study he has made of the feasibility of underground motorways passing underneath London from north to south and east to west with access to the centre of London; and what is the estimated cost of a three-lane each-way motorway scheme of this type.
    The Minister of Transport (Mr. Richard Marsh): A study of proposals put forward in 1966 for a network of underground motorways in London showed this approach to be unrealistic on both technical and economic grounds. The cost of a complete underground network would be several thousands of millions of pounds.
    Mr. Roberts: Would not my right hon. Friend agree that the later part of what he has said is not the answer to what I asked for precisely in my Question? What I have asked for is probably the most simple long-term approach from the point of view of providing links with the future Channel Tunnel, the possibility of an airfield at Foulness, and of bringing thousands of commuters into the city centre? Would not my right hon. Friend agree that this is worthy of a further long-term study?
    Mr. Marsh: No, Sir, I am afraid I would not. The technical problems of constructing, operating, and maintaining a system of 60 ft. diameter highway tunnels is not simple, and the difficulty of finding thousands of millions of pounds for them seems insuperable at the moment.
    Mr. Whitaker: Are not there grounds for considering roads under major amenity areas such as Greenwich Park and Hampstead Heath?
    Mr. Marsh: Roads in such areas will be considered, but it is a very expensive proposition to build a total network of tunnels.

    Road Accidents (Collapsible Telegraph Poles)
    Mr. Gwilym Robertsasked the Minister of Transport what figures are available of the number of accidents resulting from collisions with fixed objects on roadsides; what study he has made

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    of the use of folding collapsible telegraph poles; and what plans he has for promoting the extended use of collapsible poles on roadsides.
    The Joint Parliamentary Secretary to the Ministry of Transport (Mr. Bob Brown): The most recent estimate for a 12-month period ending in March, 1968, gives a total of 900 accidents of this type. A small trial installation of breakaway lighting columns was erected in 1964. The results of this experiment are satisfactory and trial columns of this type will be erected shortly on the A1 in Yorkshire. The question of using folding collapsible telegraph poles is a matter for my right hon. Friend the Postmaster-General.
    Mr. Roberts: Is my hon. Friend aware that many hon. Members will find the results of the original experiment and the suggestion that there will be further developments in this direction very welcome, but will he consider giving some general advice to people constructing motorways and other roads of this kind that they should not introduce more and more rigid obstacles which are likely to cause further accidents?
    Mr. Brown: We are studying this. I have already referred to the breakaway lighting columns, and we have other ideas in train, but we must ensure the proper and economic positioning and prominence of fixed roadside objects.

    Levens Park, Westmorland
    Mr. Dalyellasked the Minister of Transport with which outside bodies he has discussed his proposals for the M6 motorway at Levens Park, Westmorland.
    Mr. Marsh: The usual consultations with local authorities and statutory bodies took place before draft proposals were published.
    I will, with permission circulate a list in the OFFICIAL REPORT.
    Following is the information:
    Local Authorities and Other Bodies
    Consulted about Kendal Link Road
    British Railways Board.

    British Waterways Board.

    Central Electricity Generating Board.

    Forestry Commission.

    General Post Office.

    Lancashire River Authority.

    Lakes and Lune Water Board.

    Ministry of Agriculture, Fisheries and Food.

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    Ministry of Housing and Local Government.

    Ministry of Public Building and Works.

    National Coal Board.

    North Western Electricity Board.

    North Western Gas Board.

    Royal Fine Art Commission.

    South Westmorland Rural District Council.

    Westmorland County Council.

    Mr. Dalyellasked the Minister of Transport if he will make a statement on his official visit to Levens Park, Westmorland.
    Mr. Marsh: I have nothing to add to the answer I gave to the hon. Member for Westmorland (Mr. Jopling) on the 2nd April, 1969.—[Vol. 781, c. 122.]
    Mr. Dalyell: Is my right hon. Friend aware that those of us concerned about Levens Park appreciate his change of heart since this Question was put down?
    Mr. Marsh: I have not changed anything at all, but I am grateful to my hon. Friend for thanking me for it.

    Blackpool and the Fylde
    Mr. Blakerasked the Minister of Transport whether he has now received an interim report arising out of the project feasibility study of alternative routes north and south of Preston designed to resolve the congestion caused to traffic travelling to Blackpool and the Fylde; and if he will make a statement.
    Mr. Bob Brown: The interim report is expected at the end of this month. The final report on which decisions will be taken is due in the autumn.
    Mr. Blaker: Does not the hon. Gentleman agree that, as long ago as 1964, studies showed that, by 1970, a motorway link between the M6 and the Fylde Coast would pay for itself within two years and would save 24 deaths and 740 other casualties a year? Will he give the report urgent consideration when it is received?
    Mr. Brown: I give the hon. Gentleman that assurance.

    Trunk Roads (Hard Shoulders)
    Mr. Berryasked the Minister of Transport what percentage of the total mileage of trunk roads now under construction will have continuous hard shoulders.
    Mr. Bob Brown: None, Sir, except a very small proportion of all-purpose trunk roads which will eventually become motorways. All motorways under construction have hard shoulders.
    Mr. Berry: Is the hon. Gentleman aware that I referred to trunk roads? I am very concerned about those trunk roads of motorway standard which are not actually motorways. They tend to be dangerous because there is no safe area for cars to come off the road when they break down and stop. Could the hon. Gentleman look closely into this, also, in connection with the proposed widening of the M4 on the Slough and Maidenhead by-passes?
    Mr. Brown: We have looked into the question of the all-purpose trunk road and we have put down hard strips, but usually the policy is to provide sufficient lay-bys—about two, each 100 yards long, for every mile—to enable people to get off the road if necessary.

    Road Accidents
    Mr. Edward M. Taylorasked the Minister of Transport how many persons were injured or killed in road accidents in 1968; and if he will make a statement.
    Mr. Bob Brown: In 1968 6,810 people were killed in road accidents, 88,563 were seriously injured and 253,835 were slightly injured. This represents an overall reduction of 7 per cent. on 1967.
    This is the second year running in which deaths and injuries have been reduced, and the total is the lowest since 1962, despite increases in traffic. This shows that a steady rise in accidents is not inevitable. But the total is still far too high for complacency: the provisional figures for January, 1969, suggests that a renewed effort is needed if this favourable trend is to be maintained.
    Mr. Taylor: The whole House will welcome the improvement in 1968 and 1967 and will hope that this can be continued. But was the Parliamentary Secretary not rather concerned at the provisional figures for the beginning of the year, which showed a sharp increase? What steps is he taking to try to identify the causes of this increase? Will he investigate to see whether the introduction of British Standard Time had any relevance?
    Mr. Brown: Clearly, my right hon. Friend is extremely concerned about the increase in the figures for January, but nevertheless we are the only country in Europe which has succeeded in reducing casualties over two successive years. We are determined to try to maintain that improvement by continued publicity and, if need be, by further legislation.
    Mr. William Price: Has my hon. Friend any figures to show in what percentage of cases excessive speed was a factor?
    Mr. Brown: I should need notice of that question.

    Road Programme
    Mr. Edward M. Taylorasked the Minister of Transport by what percentage work on motorway and major roads projects in 1968 fell short of the planned programme; and what were the comparable percentages in each of the previous four years.
    Mr. Marsh: I would refer to the Answer given to the hon. Member on 14th April.—[Vol. 781, c. 207–8.]
    Mr. Taylor: Is it not deplorable that, over the last five years, about £60 million of the planned road programme has disappeared in cuts or administrative slippage? Why did we have an 8·7 per cent. or £21 million reduction in 1968–69? What steps is the right hon. Gentleman taking, as a matter of urgency, to ensure that some of our road programme this year does not disappear in the same way.
    Mr. Marsh: There has been faulty forecasting about the programme, largely because of the availability of new techniques now, and steps are being taken to rectify that. The underlying reason is that the Government have decided to build roads on a scale so much bigger than was ever envisaged by the hon. Gentleman's party that obviously we are coping with a great deal more. The hon. Gentleman mentioned 1968–69, when road building was 9 per cent. up on the year before, and was just over double what his party spent in its last year in office.
    Mr. Raphael Tuck: Can my right hon. Friend explain why, although the Conservative Party continually says that if it comes to power it will cut the social

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    services, every time we have one small cut in the social services right hon. and hon. Members opposite make a large outcry?
    Mr. Marsh: It is the nature of the beast. But the roads are not social services—[Interruption.]—they certainly are not—and it is important that we should have a much higher level of expenditure on them in the future than we have had in the past. That is why I am pleased that the House, through the present Government, is spending six times as much on road building as it did 10 years ago.
    Sir Knox Cunningham: Is it also in the nature of the Socialist beast to increase taxation and enlarge expenditure?
    Mr. Marsh: One of the things the hon. and learned Gentleman will realise eventually is that if one wants to spend more money it has to come from somewhere.

    M1 (Crash Barrier)
    Mr. Dudley Smithasked the Minister of Transport if he will now give instructions for a crash barrier to be erected on the central reservation of the Ml between markers 53 and 55 in the two miles north of the service area at Newport Pagnell.
    Mr. Bob Brown: A working party is investigating the whole question of crash barriers on motorway central reserves, and this section of the M1 will be considered in the light of its report.
    Mr. Smith: Is the Minister aware that this must be the most dangerous section of motorway as regards cross-over accidents? Is he aware that in the past seven years nearly 20 people have been killed in such accidents, and that many have been seriously injured? Will he now pay heed to the representations made to him by the coroner for that area?
    Mr. Brown: I am not aware of the number of accidents to which the hon. Gentleman refers. I am aware that the number of cross-over accidents is rather higher in relation to the volume of traffic than on adjacent lengths where traffic volumes are higher.

    Road Developments (Putney)
    Mr. Hugh Jenkinsasked the Minister of Transport what major road
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    developments are planned which will affect the constituency of the hon. Member for Putney; and to what extent they will involve the destruction of houses or blighting of amenities.
    Mr. Bob Brown: The Greater London Council's plans for London's primary road network include sections of Ring-ways 1 and 2 in this area. It states that these routes are being planned so as to have the minimum effect on property and amenities.
    Mr. Jenkins: Is my hon. Friend aware that changes appear to be taking place all the time in the G.L.C. plans? Has the G.L.C. kept the Ministry of Transport in touch with precisely what its present programme is? Will my hon. Friend encourage the G.L.C. to make up its mind and let everybody know where it stands?
    Mr. Brown: Yes, Sir. The proposals form part of the Greater London Development Plan, which is due to be submitted to my right hon. Friend the Minister of Housing and Local Government by 31st July.
    Mr. Frederic Harris: Has the Minister any idea when Ringway 2 will be built?
    Mr. Brown: Subject to the Greater London Development Plan public inquiry findings, Ringway 2—the "C" ring—is unlikely to start before the mid-1970s.

    A5 (Tamworth)
    Mr. Speedasked the Minister of Transport if he will now announce his decision on the road improvements to the A5 trunk road in the borough of Tam-worth; and when he estimates work will start on them.
    Mr. Bob Brown: No decision can be taken on the need for or the timing of any improvement of this section of A5 until the highway network for the expanded town of Tamworth has been settled, and of course the effects on A5 traffic of that network and of other trunk road works in the area have been studied.
    Mr. Speed: That is a very disappointing reply. Is the Parliamentary Secretary aware that the road problems at Tam-worth, particularly the A5, have been shelved by successive Ministers of Transport over the past 20 years; and that if

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    no action is taken in the near future both the A5 and the borough of Tam-worth will grind to a standstill?
    Mr. Brown: I would not dissent from what the hon. Gentleman has said about some previous Ministers, but I certainly believe that my right hon. Friend is getting on with this job as expeditiously as possible. The hon. Gentleman should understand that this work depends on the completion of the transportation study which has been put in hand by the Staffordshire County Council.

    Road Construction, Cornwall
    Mr. Geoffrey Wilsonasked the Minister of Transport what, in money terms, was the amount of planned road construction in the county of Cornwall in the road programme for 1968; what was achieved in that year; and what lengths of roadway these figures represent.
    Mr. Bob Brown: During the financial year 1968–69 the value of new trunk and principal road improvement work programmed for commitment or grant assistance was £541,200. The value of work actually committed or approved for grant was £542,550, representing work on approximately 3½ miles of new or improved road.
    The amounts of actual expenditure during 1968–69, including work on schemes programmed earlier, are not yet available.
    Mr. Wilson: Is the Parliamentary Secretary aware that Cornwall, being a development area, is particularly dependent on transport? Will he ensure that all possible progress is made for the rapid improvement of transport facilities in that area?
    Mr. Brown: The Government are very well aware of the needs of Cornwall as a development area. That is precisely why the A30 and the A38 have now been given relative priority as the main route to Cornwall. This policy is supported by the South-West Economic Planning Council and by the Joint Committee for the South-West.
    Dr. John Dunwoody: Will not my hon. Friend agree that major road improvements are an integral part of regional policy, and in a peripheral area like Cornwall that work is even more important
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    than in development areas as a whole? Will he continue to look at the special need for main road improvements in this county?
    Mr. Brown: Yes, Sir.
    Mr. Bessell: Is the Minister aware that the figures he has just given are deplorably low? Even though the improvements to the A30 and A38 are to be welcomed, they will not be helpful unless there is similar development of the roads within the county to accommodate traffic.
    Mr. Brown: I do not think that the hon. Gentleman should be quite so pessimistic. In terms of road mileage, it is true that 3½ miles is not much road, but the hon. Gentleman should understand that one can create quite a considerable improvement by spending a fair bit of money simply on junction improvement.

    South-Eastern Region
    Sir R. Russellasked the Minister of Transport what was the estimated cost of the programme for building motorways and other roads in the South-Eastern Region in 1968; and how much was actually spent in that year.
    Mr. Bob Brown: Central Government expenditure on new and improved motorways and other roads in the South-Eastern Economic Planning Region in 1968–69 was estimated at just over £50 million, excluding land costs; about £46 million was actually spent. Data for spending by local authorities in the region is not yet available.
    Sir R. Russell: Can the Minister say why there is a shortfall of £4 million? What steps are being taken to see that the programme is kept up?
    Mr. Brown: The shortfall of £4 million was caused mainly by delay in statutory procedures in connection with the two radial motorways M3 and M23. As to future shortfalls, we shall certainly aim to see that we keep to the programme as forecast but, as I have said, public interest and individual rights come into this.
    Mr. Molloy: Is my hon. Friend aware that if he endeavours to meet the wishes of many hon. Members opposite in building new roads and so on and so forth, he will then be attacked from the Front Bench opposite for incurring public expenditure?
    Mrs. Thatcher: The Parliamentary Secretary referred to the programme "as forecast". Will he say which programme? Is he not aware that his Ministry has recently published a document delaying for periods of up to two years the start of a large number of major projects? To which forecast did he refer?
    Mr. Brown: I should be interested if the hon. Lady could enlighten me as to the document concerned. London highways now come under my general purview in the Ministry, but I am not aware of the document she mentioned.

    Road Safety
    Mr. Rankinasked the Minister of Transport, in view of the difficulties experienced in securing the observance of road safety regulations, if he will introduce further amending regulations with a view to ensuring greater safety on the roads.
    The Joint Parliamentary Secretary to the Ministry of Transport (Mr. Neil Carmichael): I am not clear what particular regulations my hon. Friend has in mind, but we are ready to consider any proposal for amendments if they are really likely to assist road safety.
    Mr. Rankin: In view of the fact that my hon. Friend referred to a speed limit of 70 miles an hour in reply to my previous Question, may I ask whether he is aware that on the motorways that speed limit is regularly abused and disregarded? Is he aware that passing on the left on motorways is quite common? What will he do to enforce the regulations?
    Mr. Carmichael: Enforcement of the regulations is a matter for the police. We believe that enforcement is working well, within the limits of available manpower. I should be anxious to know of any ideas my hon. Friend has for furthering the ability of the police or the Department to enforce the regulations which have already been made.

    A34 Road, Birmingham
    Mr. Christopher Priceasked the Minister of Transport what studies he has made of traffic flow from the M6 along the A34 into Birmingham when the Great Barr interchange is completed; and what steps he is taking to ensure that the A34 can carry the increased load.
    Mr. Bob Brown: The West Midland Transport Study has enabled long-term traffic flows along the A34 between M6 and Birmingham to be estimated. Dual carriageways are under construction on the trunk road part of A34 between the Great Barr interchange and the city boundary, and there are schemes, both in progress and in this year's programme, to provide further dual carriageways on A34 within the city boundary.
    Mr. Price: Will my hon. Friend give a categorical assurance that the full dual-ling of the A34 between Great Barr and Birmingham will be completed before the Motorway actually reaches A34 at Great Barr, and also ensure that when the Gravelly Hill main interchange and the Aston Expressway into Birmingham are constructed, the bulk of south-bound traffic into Birmingham will be channelled along that expressway and not along A34 through the middle of my constituency?
    Mr. Brown: I am sorry that I cannot give my hon. Friend the assurance he seeks. Unfortunately, we do not expect the A34 to be completed by the time the Great Bar interchange is opened. The dualling from Queslett Road to Aldridge Road is expected by the autumn of 1971. Then the dual carriageways will extend from the city boundary to High Street, Aston. Efforts are being made to accelerate this, but it will depend on land acquisition.

    Urban Roads (Green Paper)
    Mr. E. Rowlandsasked the Minister of Transport whether, in view of the concern of citizens of many towns about the proposed destruction of homes to make way for urban motorways, he will prepare and publish a second Green Paper on urban roads; and whether he will establish criteria to ensure that all community costs are incorporated in any cost benefit analysis of an urban road.
    Mr. Marsh: It would not be practicable to publish a Green Paper with proposals for urban roads similar to Road for the Future". Large urban schemes are the responsibility of the local highway authorities and have to be seen in the context of local town plans and policies.

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    Cost benefit criteria are being developed and will become increasingly valuable in the evaluation of major road schemes. It must be for the local communities in the first place to assess the social effects, along with the economic costs and benefits.
    Mr. Rowlands: In view of the fact that in Cardiff, London and other major cities there is a citizens' revolt against such proposals for new urban motorways and deep questioning by planners, does not my right hon. Friend think he should take some account of bringing order into financial and social responsibilities, which does not seem to be shown at the moment by many local authorities concerning such massive urban motorway schemes?
    Mr. Marsh: As I have explained to my hon. Friend, we are at the moment developing cost-benefit criteria to enable us to do this effectively. One of the difficulties is that economic and Parliamentary tools have not existed in the past.
    Sir D. Walker-Smith: In this connection, has the right hon. Gentleman seen a recent report by a Committee of Justice on the effect on people owning land or homes in the vicinity of motorways? Will he give its recommendations sympathetic consideration?
    Mr. Marsh: I have not read the report yet. It is my intention to do so this evening.

  TRANSPORT

    Bus Undertakings (The Wirral)
    Mr. Brooksasked the Minister of Transport what plans he has to rationalise the use of the various bus undertakings throughout Wirral, Cheshire; and if he will make a statement.
    Mr. Bob Brown: This is for the operators themselves. Rationalisation will be facilitated by the establishment of the National Bus Company and the appointment shortly of the Executive for the Merseyside Passenger Transport Authority and these two bodies have a statutory duty to co-operate with each other.
    Mr. Brooks: Is my right hon. Friend aware that the present division of labour
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    between the Corporation and Crosville Bus Services dates from 1930, and now that we are 40 years on and the bus service is getting steadily more afar and asunder, is it not important to have an urgent rationalisation of the system before it is too late?
    Mr. Brown: I appreciate what my hon. Friend says, but rationalisation is a more difficult and complicated exercise, and has more repercussions, than many people seem to realise. It is not the sort of thing to be embarked upon with responsibility about to be transferred to the new P.T.A.
    Mr. Michael Heseltine: Are we to understand from the hon. Gentleman that the difficulties of rationalisation which were pointed out from this side of the House before there was the expenditure of £50 million on the B.E.T. buses have become apparent to hon. Gentlemen opposite?
    Mr. Brown: Not at all. I am not saying that. I am suggesting that the acquisition of the B.E.T. and the establishment of the N.B.C. and the P.T.A. will make rationalisation a better and easier proposition.

    Merseyside Land Use and Transportation Study
    Mr. Brooksasked the Minister of Transport whether he will publish a Green Paper setting out his Department's proposals for implementing the Report of the Merseyside Land Use and Transportation Study.
    Mr. Bob Brown: It is for the local authorities on Merseyside to formulate proposals for implementing the Report, and it would be inappropriate for my right hon. Friend to publish a Green Paper.
    Mr. Brooks: In view of the value of Green Papers so far published by my hon. Friend's Department, among others, does not he agree that it would be a useful innovation for local authorities dealing with major proposals such as those likely to come from this Report similarly to provoke and encourage public participation?
    Mr. Brown: I agree with that suggestion. It is open to local authorities to

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    encourage public participation and I hope that they will.
    Mr. Fortescue: The hon. Gentleman referred to the appointment shortly of an executive for the Merseyside Passenger Transport Authority. Cannot he be more specific? Will it take weeks or months?
    Mr. Brown: This is a matter for the Authority itself. It will need to advertise the suitable people, and so forth. I think that it will take months rather than weeks.
    Mr. Tilney: When considering the Report, will the hon. Gentleman also consider that the mole appears to have broken down on the Wallasey-Liverpool Tunnel and that it might be cheaper to have a bridge from Garston to Easton to unite the two parts of Merseyside?
    Mr. Brown: The study itself will make it easier for Merseyside authorities to determine the priorities for these various projects.

    Transport Users' Consultative Committees
    Mr. Lubbockasked the Minister of Transport what factors he takes into consideration in appointing members of transport users' consultative committees.
    Mr. Marsh: In accordance with Section 56 of the Transport Act, 1962, I appoint the Chairman and two members of each Committee without consultation. My choice is influenced mainly by individual ability and experience. I appoint the other members after consulting organisations which are representative of a variety of transport users. I consider the suitability of their nominees in terms of age and experience, the need to avoid overlarge committees, and the geographical distribution of membership.
    Mr. Lubbock: Is the right hon. Gentleman aware that there is only one season ticket holder in the whole of the membership of the South-Eastern T.U.C.C.? Does not he agree that, among the organisations which should be consulted in deciding who to appoint to these committees, the organisations representing passengers, such as the Orpington District Railway Passengers' Association, should be consulted? Will he ensure that such a provision is written into the Transport
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    (London) Bill when the consultative machinery comes to be discussed?
    Mr. Marsh: A very large number of bodies are consulted. They make their nominations and one of the biggest problems is having to limit the sheer size of such an organisation. I do not know how many of the members hold season tickets but quite obviously a very large proportion probably travel by train.
    Mr. Driberg: Will my right hon. Friend confirm that it is the primary job of these committees to represent the consumer—the passenger—vis-à-vis British Railways and the Ministry, and that it is not primarily their job to take account of costings?
    Mr. Marsh: They are there to represent the transport users. The costs of services are obviously involved. A wide range of organisations are consulted.

    Engine Noise
    Mr. Archerasked the Minister of Transport whether he will take steps to encourage research into the reduction or elimination of noise from internal combustion engines, by producing sounds of a frequency range inaudible to the human ear, or otherwise.
    Mr. Bob Brown: We shall continue to encourage steps towards reducing vehicle noise. Research indicates that sound vibrations inaudible to the human ear can sometimes be more injurious than ordinary noises.
    Mr. Archer: I agree with my hon. Friend's final point, but would not he agree that many remedial measures such as improved mountings can be instituted at comparatively small cost and that, even in purely economic terms, this would be a good investment?
    Mr. Brown: While not wanting to go into details, I would point out that considerable research into engine design is going on, notably at Southampton University. I hope that the engine manufacturers themselves will increase their development effort.
    Mr. Dudley Smith: Is the hon. Gentleman aware that this is a growing problem in urban areas where existing roads are being developed as major roads, and

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    that it is particularly worrying in parts of the Midlands?
    Mr. Brown: I accept that there has been an increase in this worrying problem but I assure the hon. Gentleman that we are taking cognisance of it.
    Mr. E. Rowlands: How much is spent per year on investigation and research into the costs of such noise as opposed to the amount we may spend, for example, on Concorde or other enormous capital investments in transport?
    Mr. Brown: Clearly, my hon. Friend will have to put down a separate Question about that.
    Mr. Archerasked the Minister of Transport whether he will introduce into the periodical testing of motor vehicles a requirement that engine noise at normal speeds shall not exceed a reasonable level
    Mr. Bob Brown: We are considering whether a noise test can be included as part of the annual examination of heavy goods vehicles. It would not be practicable to check noise as part of the annual private car test.
    Mr. Archer: Does my hon. Friend agree that the noise made by some vehicles, particularly commercial vehicles, is wholly unreasonable, and subjects their drivers to quite unwarrantable health risks? Has he no remedy to offer?
    Mr. Brown: The police bring thousands of successful prosecutions each year, and the 1968 Regulations provide a new method of roadside enforcement which will help, but it is very difficult to do anything about a small minority of people who are determined to drive their cars as noisily as possible.
    Mr. Arthur Lewis: Instead of introducing new regulations, will the Minister do something to see that the 20 per cent. who do not now have their vehicles tested for roadworthiness certificates have them tested? It is no good introducing new regulations unless the others are enforced.
    Mr. Brown: This is another question, which has been fairly well ventilated with my hon. Friend in the past.

    National Freight Corporation and National Bus Company (Finance)
    Mr. Michael Heseltineasked the Minister of Transport what additional lending there has been by the joint stock banks to the National Freight Corporation and the National Bus Company since 1st January, 1969.
    Mr. Carmichael: On 10th April, the latest date for which we have information, neither undertaking had an overdraft.
    Mr. Heseltine: Would the hon. Gentleman be prepared to say that, for any future requirements, the various organisations listed—the National Freight Corporation and the National Bus Company—will be compelled to go to the Minister for their money and not have recourse to the joint stock banks, as they were doing late in 1968?
    Mr. Carmichael: They do have borrowing rights under the Transport Act, 1968—the National Bus Company of £3 million and the Transport Holding Company of £15 million. As for their day-to-day work, the National Freight Corporation has loss-making activities like its sundries activities and it must have working capital for these because it is paid a grant by the Minister only every four months. So for their working overdraft they go to the joint stock banks. Otherwise, they have special drawing powers.

    Safety Belts
    Mr. Dudley Smithasked the Minister of Transport what estimate his Department has made of the percentage of drivers now regularly using their safety belts; and what further steps he proposes to encourage the wearing of them.
    Mr. Bob Brown: Nationwide estimates are not available, but a survey in south east England in July, 1968, showed that outside towns 23 per cent. of all drivers were wearing safety belts but in urban areas only between 5 and 9 per cent. did so. The need to wear safety belts on every journey will continue to be the major feature of our road safety publicity campaign.
    Mr. Smith: I thank the Minister for that reply, and support what he has just said. Will his Ministry try to encourage a feeling against the school of thought which seems to be growing in some areas that safety belts are not as efficacious as they were originally thought to be?
    Mr. Brown: We most certainly will. We will continue to try to put right the erroneous idea that the only time one needs to wear safety belts is on highspeed journeys. The facts are that if everyone in a car or van had worn a belt last year about 15,000 serious and fatal casualties might have been avoided.
    Mr. Michael Heseltine: In view of that particularly alarming figure, and as I think that it is accepted that the use of safety belts would have a most dramatic effect on casualty rates in this country, has the Minister any more comprehensive proposals to try to encourage people to wear belts, rather than just relying on publicity techniques?
    Mr. Brown: If the hon. Gentleman has any alternative remedies, he should offer them to us. We are spending about £315,000 on direct publicity to encourage people not only to have the seat belts but to wear them.
    Mr. Hugh Jenkins: Has my hon. Friend considered the possibility of making the use of seat belts obligatory?
    Mr. Brown: We have considered this, by my hon. Friend the Member for West Ham, North (Mr. Arthur Lewis) has just been talking about enforcement on another issue, and clearly there is not a great deal of wisdom in introducing unenforceable legislation.

    Goods Vehicle Testing Station, Montrose
    Mr. Doigasked the Minister of Transport how many vehicles were tested in his Department's heavy goods testing station at Brechin to the nearest convenient date.
    Mr. Carmichael: The goods vehicle testing station between Aberdeen and Perth is located at Montrose. The first tests at Montrose were introduced on 27th January, and 33 vehicles had been tested by 31st March.
    Mr. Doig: Does not my hon. Friend think that in view of the small numbers
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    of vehicles that have justified, in the Ministry's mind, a vehicle testing station at Montrose, the Ministry should reconsider its attitude towards establishing a testing station in Dundee?
    Mr. Carmichael: No, Sir. An extra station was needed primarily for the benefit of those operating half way between Perth and Aberdeen to save them the unreasonably long journey for the test which would otherwise have been necessary. In consultation with the operators' association, we decided that either Brechin or Montrose was the right place, and the Ministry finally settled on Montrose.

    Metric System
    Mr. Henry Clarkasked the Minister of Transport if he will make a statement on the decimalisation of speed limits, road signs, milestones, road maps, and speedometers on motor vehicles; what the cost of the change is estimated to be; and what increase in productivity will be achieved.
    Sir Clive Bossomasked the Minister of Transport what is the Government's policy regarding road signs being expressed in metric terms; and what is the estimated total cost of the changeover.
    Mr. Costainasked the Minister of Transport if, in view of the proposal to change the United Kingdom's method of measurement to kilometres in 1973, he will state the estimated cost of this conversion in transport matters.
    Mr. Onslowasked the Minister of Transport what further consultations he is undertaking in connection with his decision that road speed limits should be expressed in metric terms in 1973.
    Mr. Awdryasked the Minister of Transport whether he has made a study into the cost of altering traffic regulations and administrative procedures that will result from a change to the metric system.
    Mr. Marsh: The Government have accepted 1975 as the target date for the change to the metric system in all sectors of the economy. Conversion in the transport field must be seen in this context.

    21
    I shall soon be consulting those concerned on how best to convert speed limit signs. I have already announced that these signs will be converted in 1973. The actual change-over will have to be made quickly. The preliminary estimate of cost is £1½–2 million. Conversion of other road signs, etc., will be spread over a period of time. I shall be consulting representative organisations on the timing and procedure to be adopted and on how to minimise both administrative and physical costs.
    Mr. Clark: When one adds to that not inconsiderable total cost the bewilderment which drivers must inevitably suffer over a period of years, is it not quite clear that any attempt to carry the metric system into transportation is just a gimmick, and a further attempt by the Government to try to look trendy and "with it" in the computer age—rather unsuccessfully?
    Mr. Marsh: First of all, there is no need for these initial changes to take place over a period of years. Secondly, once the decision to metricate generally by 1975 has been taken, I think that it would be even more bewildering to drivers and to the travelling public to find themselves faced with two systems.
    Mr. Costain: Has the right hon. Gentleman given consideration to the alteration of marine charts? Does he appreciate that, for international reasons, the Pilots Association in this country is generally opposed to such alteration? Would the Minister reconsider this matter in the light of this representation?
    Mr. Marsh: I will look closely at the items to which the hon. Gentleman has referred.
    Mr. Onslow: What makes the Minister think that there is any logical connection between this area and other areas for decimalisation, and whose brain child was this daft idea anyhow?
    Mr. Marsh: It has been round the world for a long time now. As to the general concept, one can have an argument against or an argument for metrication, but to say that we should submit our children to both systems for all eternity would be, I should have thought, most confusing.
    Mr. Shinwell: This fantastic and grotesque conception arises from the frenzy to get into the Common Market. Has it not everything to do with going continental? I thought this thing had been abandoned.
    Mr. Marsh: My right hon. Friend and I have had many discussions in other days on the Common Market, but this is not a question of going into the Common Market. The arguments for metrication generally are well known, and have been dealt with by the House. What the House has to consider is whether it wants to perpetuate two totally different and irreconcilable forms of measurement.

    Transport Drivers (Hours)
    Sir R. Russellasked the Minister of Transport when he proposes, under the Transport Act, 1968, to reduce the hours worked by transport drivers.
    Mr. Carmichael: I have nothing to add at present to the reply given to the hon. Member for Glasgow, Cathcart (Mr. Edward M. Taylor) on 3rd February.—[Vol. 777, c. 18.]
    Sir R. Russell: Can the hon. Gentleman say why there is this delay?
    Mr. Carmichael: My right hon. Friend intends to make an announcement soon, but he still has to complete consultations with organisations of trade unions and employers.

    Goods Vehicles (Height and Speed Limits)
    Mr. Rankinasked the Minister of Transport if he will introduce regulations to institute a statutory limit to the height of fully-loaded commercial vehicles and to impose a speed limit of 50 miles per hour on such vehicles.
    Mr. Carmichael: We see no advantage overall in setting a height limit for loaded goods vehicles. Goods vehicles generally are at present subject to a 40 m.p.h. speed limit on general purpose roads and a 70 m.p.h. limit on motorways. We are now preparing regulations to reduce the limit for heavy goods vehicles on motorways to 60 m.p.h. and raise that for lights vans on other roads to 50 m.p.h.
    Mr. Rankin: Is my hon. Friend aware that in passing under some older bridges

    23
    high vehicles have to go under the middle of the bridge where the camber is greatest, thus blocking both lines of traffic and causing congestion of traffic? Does he not think that a regulation imposing a limit on height is absolutely necessary in these conditions?
    Mr. Carmichael: I think it would be too much to make a general regulation on height. It would be commercially very disadvantageous to the nation if vehicles had to be of a lesser height than some are at present. All new bridges with a height of 16 ft. 6 in, cater for the regulation height of vehicles. We rely on advertising and notices on the roads to notify vehicles when they are coming to older bridges which are lower.

    Disabled Drivers
    Mr. Onslowasked the Minister of Transport whether he will take steps to make available to disabled drivers a special identification disc which will entitle them throughout the United Kingdom to the same exemption from parking restrictions as is normally extended to the drivers of goods vehicles.
    Mr. Bob Brown: Under the National Car Badge Scheme for Disabled Drivers, yellow identification discs are already issued by local welfare authorities to drivers who have considerable difficulty in walking.
    Waiting restriction orders frequently include exemptions to permit drivers to stop to enable people to board or alight or for goods to be loaded or unloaded. These exemptions apply to all drivers; they are not confined to the drivers of goods vehicles.
    Mr. Onslow: Is the hon. Gentleman aware that many disabled drivers are finding difficulty in parking outside in their own localities, often because of the unimaginative way in which traffic wardens carry out their tasks? Would he not agree that there is a case for some disc which confers reasonable privileges throughout the country for disabled drivers?
    Mr. Brown: The question of a national scheme is not an easy proposition, because clearly traffic conditions vary.
    Mr. Onslow indicated dissent.
    Mr. Brown: It is no good the hon. Member shaking his head. If we were trying to lay down a national scheme we would have to lay it down on the worst of traffic conditions, and this would be to the detriment of disabled people.
    Mr. Paget: Would my hon. Friend consider a scheme for allowing invalid tricycles to mount the pavement for parking purposes? Is he aware that this would be a tremendous help and, I think, a marginal disadvantage to pedestrians?
    Mr. Brown: This question is being reviewed, not in terms of parking but in terms of the invalid tricycle type of vehicle, such as the thalidomide babies use, for instance.

  RAILWAYS

    Passengers
    Sir G. Sinclairasked the Minister of Transport how many passengers were carried by British Railways in 1968; and what were the comparable figures for 1967 and 1966, respectively.
    Mr. Carmichael: The approximate figures are: for 1968—831 million; for 1967—837 million; and for 1966—835 million.
    Sir G. Sinclair: No doubt the hon. Gentleman is pleased with this sustained level of travel. What is he doing to restore the slashed investment programme of the railways, especially the reduced investment on the Southern Region, where the service is far less than that to which the passengers are entitled?
    Mr. Carmichael: The subject of railway investment is another question. It would, however, be wrong to say that there has been a slashing of railway investment. A great deal of effort has been put into the design and ordering of new stock for the Southern Region, some of whose stock, as we are well aware, is rather old. On the other hand, the Southern Region presents a tremendous problem because of the vast numbers travelling on it during the peak periods.
    Mr. John Hynd: While the figures appear to indicate a considerable overall reduction between 1967 and 1968, has

    25
    there not been a considerable increase on the electrified lines? In view of this, will my hon. Friend consider expediting the electrification programme in the interests of the viability of the railways as well as of safety and mobility on the roads?
    Mr. Carmichael: I am not sure that my hon. Friend heard the figures clearly. They were 831 million in 1968 and 837 million in 1967. The reduction was, therefore, 0·75 per cent. Of course, we do not like to see any reduction but the figures are reasonably steady, although we naturally hope for an improvement. Where appropriate, electrification can bring not only more passengers but more viable services, and obviously my right hon. Friend looks at any suggestions for improvements very thoroughly and in the most favourable light.
    Mr. Edward M. Taylor: Was not my hon. Friend the Member for Dorking (Sir G. Sinclair) right in emphasising the relevance of investment to passengers carried? The hon. Gentleman says that there has been no reduction in expenditure in the last four years, but is not railway investment down from £120 million to under £90 million? Is not the outlook grim?
    Mr. Carmichael: I did not say that there had been no reduction. I said that investment had not been cut in the catastrophic way suggested. The number of passengers carried shows that the railways, even with this reduction in investment, are doing very well.

    High Wycombe-Marylebone Service
    Mr. Ronald Bellasked the Minister of Transport what consultations he had with users of the railway service or local authorities before recommending the diversion of the High Wycombe-Marylebone service to Paddington.
    Mr. Carmichael: We consulted the South-East Economic Planning Council, whose advice reflects regional considerations. All those concerned will have full opportunity to make their views known before any decision is taken.
    Mr. Bell: Surely the South-East Economic Planning Council's members are not exactly the same sort of people who use the railway service from South
    26
    Buckinghamshire to London. Would it not be better to ask those who use the railway what they would like in service, treating them as customers?
    Mr. Carmichael: People who use the line will have full opportunity to make their views known if the decision is made to publish formal closure proposals. There will be the usual procedure by which they will be able to appear either collectively or individually before the transport users' consultative committee. Of course, the Greater London Council will be formally consulted in accordance with the provisions of the Transport (London) Bill.
    Sir R. Russell: What has been done to advertise the services, particularly from the two Wembley stations into Marylebone? Will any extra services be run next Saturday to cope with the Cup Final crowd, so as to help London Transport?
    Mr. Carmichael: The last question is one for London Transport, who should be aware of the date of the Cup Final. This service is being heavily grant-aided and we believe that my right hon. Friend's proposals could give a better use of the amount of the grant. This question is being discussed—not the number of passengers, but the fact that the service could, apparently, with little inconvenience compared with the money spent, be taken to Paddington instead of Marylebone.
    Mr. Ronald Bellasked the Minister of Transport whether, in the light of representations made to him since November last, he will now withdraw the proposal which he made to the railway authorities that the High Wycombe service should be diverted from Marylebone to Paddington.
    Mr. Carmichael: No, Sir. As explained in Answer to the hon. Member on 28th March, there appear to be major advantages in this proposal which merit full consideration.—[Vol. 780, c. 383–4.]
    Mr. Bell: Surely the hon. Gentleman could not deny—he did not try to—that he must have received overwhelming opposition to this proposal from the travellers. If that is so, are they to be ignored? Are their views about what

    27
    constitutes advantage and disadvantage to be ignored?
    Mr. Carmichael: My right hon. Friend pays great attention to the views of all the local bodies, which have, as I said earlier, the right to appear before the transport users' consultative committee. Many other organisations and departments are consulted, as well as the local authorities. There is a long procedure before a final decision on whether to close a line is taken.
    Mr. Molloy: I am sure that what my hon. Friend has said is right, that his right hon. Friend has studied the representations of the people involved, but does he not think that he should dispense with this proposal, since most local folk are bewildered about it? I believe that he should reconsider.
    Mr. Carmichael: I have every sympathy with my hon. Friend, but my right hon. Friend has great difficulties. This service attracts a grant of over £500,000 and he must, in the public interest, ensure that the best possible use is made of this line and the greatest possible economy made compatible with a reasonable service to the public.

    London (Underground Lines)
    Mr. Berryasked the Minister of Transport what further plans have now been submitted to him for constructing underground lines in London.
    Mr. Marsh: No firm plans, Sir, but London Transport is studying possible extensions to the system and is seeking Parliamentary powers to build the first section of the proposed Fleet Line from Baker Street to Trafalgar Square.
    Mr. Berry: Would the right hon. Gentleman not recall that the Victoria Line, which was opened last month with great praise all around—rightly—particularly from the Minister, was started by the last Conservative Government? Would he not agree that it is important not to waste time and to look into not just the one he mentioned but a general enlargement of underground lines, since they are so important for solving commuter problems in the London area?
    Mr. Marsh: Yes, Sir. Underground lines of this sort can show big incomes,
    28
    but they are only applicable where there are heavy concentrations of passengers. Unless one does the arithmetic properly, it is also possible to waste a great deal of money.
    Mr. Arthur Lewis: Has my right hon. Friend considered the possibility of an outer as well as an inner circle connecting the Greater London lines, which might prove cheaper and easier than having lines through London?
    Mr. Marsh: Not at the moment. A scheme of this sort, of course, would be very expensive. As I said, I have no proposals to have such a thing at the moment.
    Mr. Lubbock: Has the right hon. Gentleman received any proposals for underground tunnels of a sufficient diameter to take main line rolling stock? Would not this be a very good way of integrating the underground service with British Rail?
    Mr. Marsh: I have no such proposals.

    Press Notices
    Mr. Lubbockasked the Minister of Transport if he will give a general direction to British Railways to supply copies of Press notices to any association of passengers which may ask for them.
    Mr. Carmichael: No, Sir. This is a matter of management for the Railways Board.
    Mr. Lubbock: Is the Minister aware that by refusing to give Press notices to organisations representing thousands of passengers, such as the Orpington District Railway Passengers Association, the British Railways Board is causing large volumes of correspondence with the Chairman of British Rail and the General Manager and Divisional Manager of the Southern Region, which would be unnecessary if only those Press releases were given to the Secretary of the Association?
    Mr. Carmichael: I doubt whether sending them the Press notices would noticeably cut down the correspondence. The Press notices are intended for normal newspapers, agencies and magazines for publication. The extension of their circulation to one organisation would mean that thousands of others would ask to be

    29
    involved, and the list would be endless. Information can be obtained from the Railways Board by writing to the appropriate authorities, as can copies of the Press notices.

    British Railways and London Transport (Advertising Policy)
    Mr. Hugh Jenkinsasked the Minister of Transport if he will issue a general direction to British Railways and London Transport to co-ordinate their advertising policy.
    Mr. Carmichael: No, Sir. Advertising is a matter of management for the two bodies concerned.
    Mr. Hugh Jenkins: Is my hon. Friend aware that London Transport refused to display a Campaign for Nuclear Disarmament poster which British Railways displayed, and, indeed, broke a contract in doing so? Is it right that the transport authorities should exercise a political censorship in these matters?
    Mr. Carmichael: I am aware of the incident to which my hon. Friend referred. I understand that the London Transport Board accepted the poster when it knew the wording only, but, when the accompanying picture was ultimately produced the Board decided that the poster had entered into a political field. It is a matter for the judgment of the bodies concerned. British Railways, which accepted the poster, has roughly the same advertising code, but the final decision is a matter of judgment for the two bodies.
    Mr. Speaker: Order. Long answers mean fewer Questions.

    Punctuality Statistics
    Mr. Speedasked the Minister of Transport if he will request the Transport Users' Consultative Committees to publish punctuality statistics supplied to them by British Railways.
    Mr. Marsh: No, Sir. The Central Transport Consultative Committee already draws attention to punctuality trends in its Annual Reports, and I am content to leave to it the question whether any further publication of railway punctuality statistics is appropriate or desirable.
    Mr. Speed: Is the Minister aware that these reports have shown that punctuality has been declining over the past year or so? Does he not think that the travelling public and the taxpayers have a right to be provided with a reasonable breakdown of the punctuality figures so that the bad regions are not lumped together with the good regions?
    Mr. Marsh: If one were to provide punctuality statistics in this way one would also have to provide the reasons for the loss of punctuality. I cannot see the purpose of publishing these, because British Rail is well aware of the need to improve punctuality.
    Mr. Edward M. Taylor: Will the Minister inquire why last year 44 per cent. of all express trains did not arrive at their scheduled time, and why 22·9 per cent. of other trains were also late? In view of these shocking figures, which demonstrate a great deal of inconvenience to the travelling public, has he ascertained what steps have been taken for improvements in the coming year?
    Mr. Marsh: A great many things are being done to produce an improvement, but the problem here is underlined by the hon. Gentleman. He asks what were the reasons for the loss of punctuality, and then describes the position as being shocking in any case. This is the whole problem. If one gave the figures one would have to give the reasons for each individual loss of punctuality, and this is a problem of which British Rail is already well aware.

    Metric System
    Mr. Geoffrey Wilsonasked the Minister of Transport if he will estimate the cost to British Railways of changing to the metric system of measurement.
    Mr. Marsh: This is a matter for the Railways Board. It tells me, however, that at this stage no worth while estimate can be made.
    Mr. Wilson: Is the right hon. Gentleman satisfied that this change will not cost the railways a lot more than might be thought? Is he aware that the 1921 railway amalgamation caused so many alterations of notices that the notices were not all completed by 1928? May he not find that the changes involved will be much more substantial than is now thought?
    Mr. Marsh: This is solely a question for the British Railways Board. The way the Board metricates the railways, if it does, and the cost, are matters for the Board. At this stage, the Board has no estimates but clearly will produce them before it goes ahead.
    Mr. English: As most of our railways are measured in feet and inches, can my right hon. Friend tell me what effect this change will have on British exports of railway equipment?
    Mr. Marsh: Like all the rest of the Government's policies, I think that this policy will assist exports.

    Wickford-Southminster Branch Line
    Mr. Dribergasked the Minister of Transport why he has directed British Rail to refuse to make public a breakdown of costs and earnings on the Wickford-Southminster branch line; and if he will publish the required figures in the OFFICIAL REPORT.
    Mr. Carmichael: My right hon. Friend has not given the Railways Board any such direction. The Board does not publicise the figures it sends us with its grant applications, but there is no secret about them. I will, with permission, circulate the figures for 1969 in the OFFICIAL REPORT.
    Mr. Driberg: I thank my hon. Friend for that reply. Can he say when this decision was taken, since it is only a month since a representative of British Rail, Mr. Dickinson, at a meeting with the local residents, said that it was a Ministry directive that he should not release the figures?
    Mr. Carmichael: I cannot understand the question of this being a "Ministry directive". Certainly the Railways Board regards the figures as confidential to the Minister unless and until the Minister chooses to publicise them.
    Following is the information:

    £

    Movement costs

    51,000

    Terminal costs

    9,000

    Track and signalling costs

    61,000

    Interest and Administration

    20,000

    Total costs

    141,000

    Earnings

    35,000

    Total grant

    106,000

  PORTS

    Foulness
    Mr. Michael Heseltineasked the Minister of Transport what discussions he has had with organisations interested in developing a major port complex at Foulness; and if he will make a statement.
    Mr. Carmichael: The Port of London Authority consulted my right hon. Friend before taking part in a consortium that is carrying out a planning study, but he has had no other discussions. It is too soon to say what this study will produce.
    Mr. Heseltine: Would the hon. Gentleman not agree that the concept of developing Foulness as a transportation centre requires urgent consideration by the Government and that they should not be content to leave it like that? After such consideration, would the Minister agree to publish a Green Paper with the Government's views on this whole problem?
    Mr. Carmichael: I will consult my right hon. Friend about the latter part of that question. As to whether there should be a big transportation study of this area for cargo handling, I can only say that this is what is being done. The Minister has given his approval to the P.L.A. to go ahead and take part in the consortium to study the feasibility of this concept. Only when formal proposals are put to the Government from such a study will he be able to decide whether to go further and investigate the problem even more deeply.

NORTHERN IRELAND
3.32 p.m.
The Secretary of State for the Home Department (Mr. James Callaghan): With your permission, Mr. Speaker, I wish to make a statement.
In the early hours of yesterday morning two serious attacks were made on important public utility installations in Northern Ireland. An electricity pylon was damaged by explosion and trunk water mains were blown up, seriously reducing the supply of water to many thousands of homes. Last evening the Northern Ireland Government requested the assistance of military units stationed

33
in Northern Ireland for the specific purpose of supporting the local police in safeguarding certain key installations essential to the community.
Her Majesty's Government immediately authorised the General Officer Commanding Northern Ireland to give such assistance, and troops are today being posted to safeguard certain installations in remote areas, mainly electricity and water supply installations.
I am sure the House will join with me in condemning these outrages against the life of the community. As the House is aware, it has been intended to resume our discussions with the Prime Minister of Northern Ireland following the recent General Election there. Captain O'Neill today agreed to this, and I expect a meeting to take place at a very early date. I shall, of course, continue to keep the House informed on progress in these matters.
Mr. Maudling: This is a grave and ugly situation. We on this side of the House join the Government in condemning these outrages and support their action in meeting the requests of the Northern Ireland Government. May I ask the Home Secretary, as the position of these troops is of immense importance, could he make as clear as possible the limit of what they are supposed to do and under whose control they come in doing it?
Mr. Callaghan: When the military are employed in aid of the civil power it is the responsibility of the commander of the force to decide what force is necessary to deal with any particular situation and they remain under his control. As to their rôle, it is a passive rôle in the sense that they will be required to safeguard the installations, of which they will be in charge, and to use the minimum amount of force necessary if any attack were made on those installations.
Mr. C. Pannell: Would my right hon. Friend say now what becomes of the argument that on no account should this Government at Westminster intervene in the affairs of Northern Ireland when at five minutes to midnight, presumably, we have to mount a rescue operation of this sort? Would it not be better to bring home to Captain O'Neill the idea that he had better remove the root causes of
34
these troubles rather than place British soldiers in a position of great difficulty, demanding a great deal of tact, and demanding all of our sympathy?
Mr. Callaghan: I remember that on the last occasion this matter was raised tributes were paid from both sides of the House and from all parties to the skill, wisdom and statesmanship that Captain O'Neill had shown. It is true that since last November a substantial programme of reform has been introduced. There is still one major outstanding problem, which I have no doubt will form the subject of the conversations that our Prime Minister will have with Captain O'Neill in the very near future.
Mr. Thorpe: Is the right hon. Gentleman aware that all of us deplore the outbreaks of violence in any quarter, and indeed the Mid-Ulster by-election has shown that there are outlets for democratic expression? May I ask two questions. First, if it is thought that the presence of our force is inadequate, in preference to calling out the Ulster B Specials would he consider the possibility of reinforcements from this country? Secondly, since we are dealing primarily with a question which will only be resolved by political action, will the suggestion be put to Captain O'Neill of the possibility of calling a conference of all political parties in Ulster to see if there cannot be some agreed programme of political reform?
Mr. Callaghan: The question of the use of the police and the size of the force is a matter for the Northern Ireland Government, not for me. British troops are doing what they would be required to do in any part of the United Kingdom, namely, to maintain the security of certain installations under the General Officer Commanding, who is responsible to the appropriate constitutional authorities. As to the second part of the question, the issue that the right hon. Gentleman raises is one that can be discussed with Captain O'Neill when he comes here, as I hope he will very quickly indeed, for further conversations.
Mr. Rose: May I join the Home Secretary in deploring violence from whatever quarter it may come? Does he accept that the use of troops in khaki may well escalate this situation? Would he assure the House that these troops will not, in

35
any event, be used against the civil rights movement? Will he also consider taking police powers from the Government of Ireland and introducing British police rather than the B Specials, who are regarded as a sectarian police force?
Mr. Callaghan: As regards the use of troops, I have made quite clear what are the very stringent limitations which have been placed upon their employment at present. There is no question of their being used actively against any element in Northern Ireland. What they will be required to do will be to repel any criminal or terrorist attack upon installations that are essential to maintain the life of the community in Northern Ireland. As to the second part of my hon. Friend's question, I do not think that it would be possible for me, even if it were appropriate, to take over the control of the police in Northern Ireland, and even less to substitute for them police from this country, without embarking on a much wider-ranging series of policy changes than that simple notion would seem to portend. Her Majesty's Government would then become responsible for a great many other issues as well.
Sir Knox Cunningham: Would the right hon. Gentleman agree that, in whatever part of the United Kingdom a civil authority requests the Armed Forces to aid it, to protect public property or indeed lives, that request is naturally granted? Would he also condemn, as I think he has, terrorism, whether it be from the I.R.A. in England in 1939, or in Ulster in the 1950s and early 1960s, or today when there are terrorist activities destroying—
Hon. Members: Paisley.
Sir Knox Cunningham: —property and, in a very grave situation, endangering lives?
Mr. Callaghan: It is the responsibility of the Armed Forces to respond to a request from the constitutional authorities. In this case, the Northern Ireland Government made such a request to the United Kingdom Government, which immediately responded to it. As to the use of violence, I hope that the hon. and learned Gentleman will use his very great influence to ensure that neither bigotry
36
nor extremism is allowed to tear that country in two.
Mr. George Brown: Would the Home Secretary confirm that he also takes the view that if reforms are denied long enough through all the usual and ordinary channels it is no use we in this House being naïve enough to think that people will not adopt other ways of trying to enforce those reforms? Therefore, should not we desist from criticising at that point?
Secondly, since it was so clear that with Terence O'Neill and Jack Lynch as the Prime Ministers of the two parts of Ireland we were on our way towards the only solution, which is the creation of one Ireland, will my right hon. Friend and the Government ensure that all that they do is directed towards the achievement of that end?
Mr. Callaghan: As regards the prospect of achieving reforms, I remind the House that since last November four special reforms have been introduced which were the subject of very great complaint last autumn. One remains to be done. Let me enumerate the reforms. First, there is the machinery for the investigation of grievances. The Bill to establish a Parliamentary Commissioner has been introduced. Secondly, on local authority housing, the new circular has been issued to place the scheme on a readily understood and published basis. The Londonderry Commission has been set up. A limited reform has been made of the franchise. It is here that the major criticism is made. Finally, the Northern Ireland Government have appointed a commission of inquiry under the chairmanship of Lord Cameron.
It is simply not correct to argue that it is impossible to introduce reforms in Northern Ireland and to ensure that they are carried out. This is why it is imperative that Captain O'Neill and the Prime Minister should continue their conversations to ensure that the policy of reform is continued.
My right hon. Friend is entitled, from his independent and free position, to express his own views on the question of the unity of Ireland, and he will no doubt continue to do so. But Her Majesty's Government have made clear beyond doubt time after time their position on the unity of North and South.
Mr. Chichester-Clark: Would the right hon. Gentleman recognise that there is a very strong possibility that there is a distinction between the attacks on these installations and anything to do with the so-called civil rights movement? Does he agree that in all probability the events to which he has been referring in the main today are merely a repetition of what happened in 1955 and onwards and that they are directed against the constitutional position of the country?
Mr. Callaghan: I accept what the hon. Gentleman says. It is for the police and the other forces to try to establish who are responsible for the outrages which have taken place. The whole House will unite in saying that no constitutional progress can be made against a background of violence. That must apply to all elements in Ireland. It is not for us to preach to them, but I am sure that those in Ireland who wish constitutional progress to be made recognise that it can be made only against a settled and peaceful background.
Mr. Fitt: Would my right hon. Friend agree that, in acceding to the request of the Northern Ireland Government for the use of troops, he has heard only one side of the story in Northern Ireland and that there are many other sides to it? May I say in contradiction to what has been said by one hon. Member that agitation in Northern Ireland is concerned, not with the unity of the country, but with the implementation of social justice and fundamental freedom? Would my right hon. Friend agree, as I am sure every other hon. Member would agree, that the best way to find out from all the parties involved what is happening in Northern Ireland is to have a full debate in this House so that we can know exactly where we are going and do not have to rely on the sometimes perverted versions of the Northern Ireland Government?
Mr. Callaghan: I am ready to believe that there is more than one point of view, or even two points of view, of the events in Northern Ireland. But what we were concerned with yesterday was a deliberate attack on installations which are essential to the life of the community. There could be only one version of that. One either allows these installations to be attacked with impunity or attempts to defend them. The duty of Her Majesty's Government in that matter was clear.
38
The question of a debate is not for me, but, at the end of my statement, I undertake, to keep the House informed on future progress because I regard this as an extremely serious matter for all of us in the United Kingdom, and especially for the people in Northern Ireland.
Mr. St. John-Stevas: Does the Home Secretary realise that he has the support of a wide spectrum of political and religious opinion in his efforts to preserve order in Northern Ireland but that the continuance of this support must depend on the speedy righting of legitimate grievances which have in part given rise to, but in no way justify, the present violence?
Mr. Callaghan: A very general view has been expressed in all quarters of this House about the need for constitutional progress to continue. I am sure that that view is understood in Northern Ireland. It can be, and will be, conveyed again to the Northern Ireland Prime Minister when he pays, as he intends to do, a very early visit to this country.
Mr. Shinwell: Varying views are held about the need for social reforms in the Six Counties. We note what my right hon. Friend says about waiting for Captain O'Neill, the Prime Minister of Northern Ireland. Surely the primary concern of all of us in this House, irrespective of the views which we hold, is that we should avert civil war in the north. Surely the presence of a few British troops guarding installations which affect the life of the community can do no harm and may do a lot of good. Is not that the primary consideration?
Mr. Callaghan: My right hon. Friend has summed up, not for the first time, the situation exactly as it appears to Her Majesty's Government. Clearly, our primary aim is to avert civil war from which no one can benefit. I do not think for a moment that that is a probability. Secondly, having maintained order, parallel with that we must ensure that proper constitutional progress is made, that grievances are settled and reforms are introduced. I agree with my right hon. Friend that, if the guarding by British troops of essential installations to maintain the life of the community will help to this end, I believe that everyone will support it.
Mr. Rose: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a matter of definite, urgent and public importance, namely,
"the events during the weekend in the City of Londonderry and the movement of troops to key installations in Northern Ireland".
There is, in my submission, no doubt that the matter is definite. The violent scenes in Londonderry have no doubt been viewed by hon. Members, if not at first hand then on the television screens, and have been read about in the national Press. In the words of one hon. Lady Member elect, there is a state of near civil war. The Government have now announced their intentions about the movement of troops.
On the second of the prerequisites, the fact that the situation is urgent is, in my submission, reflected in the Cabinet meeting called yesterday in Northern Ireland, and in the statement of my right hon. Friend, and in Captain O'Neill's cancellation of his previous engagements for today. There has been enacted in a part of the United Kingdom over which this Parliament has ultimate control, under Section 75 of the Government of Ireland Act—
Mr. Speaker: The hon. Gentleman must not make the speech which he will make if he is granted an emergency debate.
Mr. Rose: I am trying to stress the second prerequisite, namely, that this matter is urgent. We have had manifest evidence of scenes which would be unbelievable in other parts of the United Kingdom. For this reason, I am seeking
40
a debate on a matter which has not been debated in this House for 18 months.
The third criterion—public importance—is self-evident. That violence, disorder and injury on a scale of this kind should have erupted in a United Kingdom constituency, the hon. Member for which has not sought leave to move the Adjournment of the House, is, in my submission, evidence of this third point, as also is the statement of my right hon. Friend the Home Secretary with regard to the decision on troop movements, which must have important consequences for the United Kingdom as a whole.
For these reasons, Mr. Speaker, I seek your leave under Standing Order No. 9 to move the Adjournment of the House.
Mr. Speaker: Will the hon. Gentleman bring his Motion to me?
The hon. Member asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
"the events during the weekend in the City of Londonderry and the movement of troops to key installations in Northern Ireland."
I am satisfied that the matter raised by the hon. Member is proper to be discussed under Standing Order No. 9. Has the hon. Member the leave of the House?
The leave of the House having been given—
Mr. Speaker: The Motion for the Adjournment of the House will now stand over until the commencement of public business tomorrow, when a debate on the matter will take place for three hours under Standing Order No. 9, subsection (2).

ORDERS OF THE DAY
  WAYS AND MEANS
  Order read for resuming adjourned debate on Question [15th April].
  WAYS AND MEANS

    AMENDMENT OF THE LAW
    That it is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance, so, however, that—

    (a) without prejudice to any authorisation by virtue of any Resolution relating to purchase tax, selective employment tax or selective employment payments, this Resolution does not extend to the making of amendments of the enactments relating to either of those taxes so as to give relief therefrom;

    (b) this Resolution does not extend to making amendments of the provisions of the Customs (Import Deposits) Act 1968 so as to give relief from the import deposits required by those provisions to be paid, other than amendments making the same provision for all goods on which such deposits are so required to be paid.

    Question again proposed.

  BUDGET RESOLUTIONS AND ECONOMIC SITUATION
  Mr. Speaker: Before the debate opens, may I remind the House that we are begining this last day's debate on the Budget late. Twenty-eight right hon. and hon. Members wish to speak, including seven back-bench Privy Councillors and some hon. Members who have sat several days during the debate. I would again urge right hon. and hon. Members to make brief speeches so that I have not to disappoint too many. Mr. Diamond.
  Sir Harmar Nicholls: On a point of order. Since you have specifically mentioned, Mr. Speaker, that seven Privy Councillors have expressed their desire to speak, may I ask whether this means that they are given any special priority?
  Mr. Speaker: As an old Parliamentarian, the hon. Member will know the position of Privy Councillors in the debate.
  3.53 p.m.
  The Chief Secretary to the Treasury (Mr. John Diamond): When we started this debate you were good enough, Mr. Speaker, to explain that there would be a
  42
  number of Resolutions which would have to be put at the end of our debate. It is, of course, the normal practice for a Minister to explain any Resolution before asking the House to decide it.
  Most of the Resolutions have already been referred to by previous Front Bench speakers. Those which have not are rather technical in nature. Unless, therefore, the Opposition wish me to explain in any detail any of the remaining Resolutions, I would not propose to waste the time of the House on them. I gather that, in fact, the Opposition have a fairly clear view about which Resolutions they support and which they do not.
  Therefore, unless the Opposition wish me to give any detailed explanation, I would like to go straight on and answer some of the questions asked by the right hon. Member for Enfield, West (Mr. Iain Macleod) with regard to the new proposals affecting bank interest. These are, in general, wholly in line with the policy of my right hon. Friend the Chancellor of the Exchequer of encouraging people to save part of what they have earned and of discouraging them from spending part of what they have not earned. They represent, rather than a reform, the restoration in this field of a wise and well-established tax principle, namely, that what one spends in making profits is, in general terms, a proper deduction from those profits in calculating the tax payable but that what one spends out of one's taxed income is one's own affair.
  That being the main distinction, it follows that interest incurred by a man, a partnership or a company in carrying on a business, trade or profession will, like any other properly incurred business expense, be deducted from profits before tax is assessed. If money is borrowed to buy an asset which is used both for business and for private purposes, such as a motor car, the interest will be apportioned in the same way as the running expenses are at present.
  While most companies are incorporated for the purpose of carrying on a business, there are some incorporated businesses, such as members' clubs, for which this is not their main purpose. In such cases, we shall follow the usual rule and give relief only for interest which constitutes an expense of any incidental business carried on by the body concerned. The general exception is the one to which

  43
  my right hon. Friend has already referred, namely, interest on money borrowed for the purchase or improvement of land or buildings. This does not, of course, include money borrowed on a building for an entirely different purpose.
  To answer the right hon. Gentleman's question, there are well-established tax rules for deciding what does and what does not belong to a building. For example, the normal central heating installation consisting of a boiler, pipes and radiator fixed to the property would qualify. A portable electric fire would not.
  As to the date of application of the new rules, as most hon. Members are painfully aware it is the practice of most banks to charge interest on overdrafts in June and December. In addition, we think it reasonable that any individual who may have borrowed money for certain purposes in the knowledge that the interest which he was paying would effectively be reduced by a tax allowance, and who might not have done so had that not been the case, should have a reasonable opportunity for adjusting his affairs if he so wishes. For these two reasons, therefore, interest on bank overdrafts will continue to attract tax relief until the end of June.
  In the case of other loans where the payer of the interest is entitled to deduct tax on making the payment, here again a reasonable period of adjustment should, we think, be allowed. For administrative purposes, however, there is no convenient termination date before 5th April next. Accordingly, interest on existing loans other than bank loans will continue to be allowable for tax purposes until 5th April next. There will, of course, be no such allowance on a new loan. There are, no doubt, other details on which the House would like information, but perhaps they could more conveniently be left to our Finance Bill debates.
  Speaking in this debate a year ago, I went into some detail about the methods by which the proposal for dividend restraint was to be carried out. It would, therefore, be appropriate that I should now report shortly on our first year's experience. As part of the general policy of restraint on incomes, dividends
  44
  were not to exceed the level of the previous year by more than 3½ per cent. or, as an alternative, were not to exceed the actual level of some earlier year. There was special provision also affecting wholly-owned subsidiaries, investment and unit trusts and close companies.
  The dividend declarations which have been subject to restraint have not yet worked through into the provisional published figures of payments, but it is significant that total dividend payments in 1968 showed virtually no increase above the average for the preceding three years. Of the dividends declared by quoted companies, some 1,400—I give round figures—have shown increases above the previous year, some 1,300 have shown no change and approximately 470 have shown a decrease. All increases have been subject to individual Treasury authorisation. I am happy to say that in no single case have we authorised an increase which was outside the provisions of the scheme, that I am not aware of any breach of the restraint scheme by a single company, and that the reserve powers which were taken in the 1968 Act have not been activated once.
  That constitutes a record of 100 per cent. co-operation, in dividend restraint between companies and the Government of the day, and I think it is right that, as the responsible Minister, I should acknowledge my gratitude for this wise co-operation and for the restraint which has been achieved in circumstances, I know, which, in many cases, created real difficulties for the boards of the companies concerned; and although it is the practice in this House to take the good work of our civil servants for granted I would, with the permission of the House, on this occasion like to pay a special tribute to the tact and the hard work of the Treasury officials concerned, because the whole volume of this work which I have described has been handled by an organisation consisting of two full-time and two part-time offficals.
  Sir Ian Orr-Ewing: Very speedily, too.
  Mr. Diamond: I am very grateful to the hon. Member for his courtesy: very speedily, too.
  So much for the past year. As for the future, my right hon. Friend the First Secretary said as much as I think can

  45
  usefully be said in her careful speech which she made on Wednesday last week. In the meantime the present arrangements will continue to apply to all dividend declarations made before 31st December this year, and well before that date we shall be consulting the C.B.I. and others about the dividend situation after the end of the year, and a further statement will be made in good time in whatever form seems most appropriate.
  Mr. J. Bruce-Gardyne: Could the right hon. Gentleman clear up what is and has been very far from clear from past practice, and that is, what sort of a calendar year companies are allowed to job backwards in this matter, as there seem to have been no rules explained for this, and there is quite considerable uncertainty about the way in which it is working in individual instances?
  Mr. Diamond: It is not my impression that there has been considerable uncertainty. The thing has worked very smoothly. In the course of the whole year, there has been only one case—one case only—where a company sought to go back to a pre-war dividend. It seemed to me that this indicated an excellent memory and a good accounting record, but it hardly seemed very relevant to our current procedure, so that jobbing back that distance would not be sensible. These matters were left to the discretion of the Treasury and have worked very well indeed.
  I should like to turn now to Selective Employment Tax, which is one of the new taxes this Government have introduced. There have been one or two, of which I have been privileged to be there at the birth. It seems to me that these new taxes have all followed a general pattern of acceptability—[Laughter.]—that the moment the first announcement of them is made they are greeted with considerable interest; then that is followed by a sense of complete bewilderment; next one gets mounting opposition; this leads to a long and bitter campaign against the tax, whatever it is, waged with the help of whatever arguments can be found or created or, if I may say so, concocted; and this in turn yields to a long and, as far as I can see, never-ending period of grumbling acquiescence. Corporation Tax and Capital Gains Tax have now, I think, moved
  46
  into that last, never-ending phase, but I would not yet say the same for Selective Employment Tax, partly because it was introduced later than those others I have referred to, and partly because, as I well recognise, the Government have played their part in the campaign by bombarding the services sector with increased rates in each of the last two years.
  I think it would be helpful if I were to refresh the memory of the House as to the purposes of the tax, to report on its operation, and to discuss possible alternatives. When my right hon. Friend the Home Secretary introduced this tax in 1966 he made clear that this was done for three reasons, and I give them in the order in which he himself gave them, and which I repeated subsequently. The first was to raise revenue. No one denies that it has succeeded in fairly full measure in this respect. The tax at its new rates will raise a total of £610 million in a full year. This is the equivalent of the combined total of Surtax and Death Duties. This is the equivalent, alternatively, of one-halt—indeed, more than one-half—of the whole of Purchase Tax.
  The second purpose was to broaden the base of taxation, which, again, has clearly been achieved. Before Selective Employment Tax was introduced services were hardly subject to any indirect taxation, and even with S.E.T. at its present rate services are taxed much less heavily than manufactured goods. S.E.T. represents about 5 per cent. to 6 per cent. of costs, whereas the rates of Purchase Tax range from 13¾ per cent. to 55 per cent. We must remember that as incomes rise an increasing proportion of personal spending goes on services, and there is, clearly, no reason in principle why tax should not be paid on the consumption of services in the same way as on the consumption of goods. And if I am told that this is not a fair antithesis because the distributive trades, for example, sell goods which are already subject to tax, then I would invite the House, and particularly those Members opposite who are increasingly becoming attracted to a value added tax of the continental type, to regard S.E.T. as simply another way of taxing the value added by distributors. Purchase Tax can be said to tax the value created in the manufacturing process, S.E.T. the value added in the distributive process.

  47
  The third reason—I repeat that it was the third—was to encourage economy in the use of labour in the construction and service industries so as to make more labour available for the expansion of manufacturing industry. I suppose it was the third purpose which gave rise to the legend that the sole object of bringing in S.E.T. was to turn the members of the corps de ballet into lathe operators and foundry workers. That is not true. On the other hand, what is true is that there is gathering evidence, although the tax has been going for a short time only, that it is achieving its third purpose also. Certainly, its introduction has coincided with a reversal of the normal relativity in employment as between services and manufacturing industry, and certainly those services where the impact of S.E.T. has been the greatest have shown the highest increase in efficiency, resulting from labour saving.
  Mr. Nicholas Ridley Mr. Nicholas Ridley (Cirencester and Tewkesbury) rose—
  Mr. Diamond: I will give way, but let me finish this.
  Productivity in retail distribution could have been expected to increase in the last two years by about 4·2 per cent. if the trend set over the previous five years had continued. The fact is that during these two years when S.E.T. applied, productivity increased by more than double that amount. In fact we are now beginning to hear the argument that S.E.T. is a bad tax because it is laboursaving and because labour-saving means doing the same job with smaller employment. If it is seriously argued, as the Luddites did some 150 years ago, that a labour-saving device is on that account a bad one, then I would say that the argument does not apply merely to S.E.T. but to every investment and to every step throughout industry and the services which is directed towards increasing efficiency and towards reducing unit cost of labour.
  As to the method of collecting S.E.T., a method under which we shall collect this year £1,920 million and return £1,314 million to those not called upon to make any net contribution to the tax, I remember with some pleasure that when the method was adumbrated the hon. Lady the Member for Finchley (Mrs. Thatcher) said:
  48
  "If my chief had come to me and put up a cockeyed scheme like that, I should have asked him if he was feeling all right."—[OFFICIAL REPORT, 5th May, 1966; Vol. 727, c. 1893.]
  The hon. Lady, who is not here, but who appeals to us in many ways, was appealing on this occasion to our common sense, and it seemed on the face of it to be an odd way to go about collecting a tax, but the fact is that, while the cost of collecting all our taxes is relatively cheap, the cost of collecting S.E.T. is the cheapest of all. It is about three times as cheap as the others. It is not right for right hon. Gentlemen opposite to shake their heads. I am comparing the cost throughout, and there is no reason to believe that the cost to others than the Government of collecting S.E.T. is in any sense disproportionate to the cost to others of collecting other taxes. The work has not been done, but one's experience leads one to believe that it would be much less. Purchase Tax represents a considerable burden on those from whom it is collected; P.A.Y.E. represents a considerable burden. There were on this account endless arguments in the House when P.A.Y.E. was first introduced. I repeat, as far as is shown by all the statistics which we can collect, S.E.T. is one-third as costly to collect, three times as cheap to collect, as are other taxes.
  Sir Ian Orr-Ewing Sir Ian Orr-Ewing rose—
  Mr. Diamond: As I have said, I will gladly give way at the end of this section—the hon. Gentleman is not the first on the list.
  Why then is S.E.T. somewhat unpopular in some quarters, as I am bound to admit it is? I have already given one reason, namely, the increase in the rates of tax which were fairly substantial and took place fairly quickly. The other comment I would make is that its unpopularity is a reflection of its economic success as a tax. I said this when the tax was first introduced, and I was subject to a certain amount of ridicule; but it was true then and it is true today.
  Purchase Tax, by comparison, is passed on in full to the consumer and, indeed, the consumer accepts that it should be passed on in full. Increases in Purchase Tax, therefore, do not represent anything like the same problem to the distributor

  49
  as S.E.T. which, by virtue of its selectivity in the field in which it operates, often cannot be wholly passed on. Competition does not permit it, nor does public acceptance. The shopkeeper finds himself in the painful position of having a portion of the burden remaining on his own shoulders and, being in pain, he cries out. He finds himself compelled to take steps to absorb part of the tax in additional efficiency and, to do him justice, he has succeeded in doing so.
  Accordingly, the tax has a much smaller effect on the cost of living index than other taxes of this kind, and has contributed greatly this year to my right hon. Friend being able to raise an additional £340 million of Revenue without adding to the retail price index by more than one half of 1 per cent.
  Mr. John Mendelson Mr. John Mendelson (Penistone) rose—
  Mr. Diamond: This tax—
  Mr. Mendelson Mr. Mendelson rose—
  Mr. Speaker: The right hon. Gentleman has not given way.
  Mr. Diamond: This tax has achieved its three purposes, of raising revenue, of broadening the base of taxation and of encouraging efficiency in the use of labour in the construction and service industries. It has done so at one-third of the normal cost of collection, with an impact on the cost of living of one-third of the normal.
  If anyone is still unconvinced as to the merits of this tax, then I pose to him the obvious question: will he please tell me which tax he would prefer which raises £600 million? It is no use criticising the one without suggesting the other. The alternatives available are, broadly, raising the standard rate of Income Tax from 8s. 3d. to 10s. in the £; increasing the whole range of Purchase Tax by over 50 per cent.; or increasing petrol duty not by 2d. but by 3s. a gallon.
  When my right hon. Friend for the second year running raised the rates of S.E.T. he certainly did not expect to receive congratulations for doing so, but he is entitled to receive the careful consideration of everyone who is responsible, as we all are, for looking after the overall
  50
  interests of our people. I am thinking in particular of two groups whose consideration we are entitled to ask for; the Co-operative Retail Societies, who feel that their costs have been unduly burdened by S.E.T. and whose views have been represented to the Government with such clarity and force by several of my hon. Friends; and the builders and contractors, who feel that their function relates more closely to manufacturing than to services, and whose position has been put to us with such care and understanding by my right hon. Friend the Minister of Public Building and Works. I think the hon. Gentleman wished to intervene?
  Mr. Ridley: I am grateful to the right hon. Gentleman for giving way at last. He said that he thought S.E.T. had achieved a shake-out from the distributive industries into manufacturing industries. Whereas it is certainly true that the distributive industries have swollen the ranks of the unemployed to some extent, it not he aware that manufacturing industries have swollen the ranks of the unemployed to an even greater extent? If he claims all these advantages for S.E.T., why does not he apply them to the manufacturing industry too and get a better use of labour there?
  Mr. Diamond: The first answer is that that is not what I said; it is not even like what I said. The hon. Gentleman will be able to read it more carefully in HANSARD; I do not want to delay the House by rereading the notes I have in front of me.
  The second answer is that nobody has ever suggested that there are the same effects of competition in industry as in the services. Nobody has suggested that the same economic laws apply. In manufacturing industry where articles are manufactured everybody puts up the price, and that does not happen in the services. The basis of the argument is totally different.
  Several Hon. Members Several Hon. Members rose—
  Mr. Speaker: Order. The right hon. Gentleman must decide to whom he is giving way.
  Mr. Diamond: I pointed to my hon. Friend behind me.
  Mr. John Mendelson: A little while ago my right hon. Friend gave as his third point of merit for the tax that there were a number of institutions in distribution which were able to make themselves more efficient. If the tax is now to be permanent and to yield so much of the Revenue, will not my right hon. Friend agree that the Government have a duty to look again at institutions which, for instance, look after old people and which do not quite come under the heading of charitable institutions, and where there could not be an increase in efficiency if the number of staff had to be reduced?
  Mr. Diamond: We looked at that matter right at the start and, as my hon. Friend knows, charities are exempt. If my hon. Friend is talking about a kind of charitable institution, then it is fortunate that we have well-established rules for deciding the difficult question of what is and what is not a charity, and anyone who attempted to create other rules would find himself in considerable difficulty. I hope that we will not turn a Budget debate into the Committee stage of a Finance Bill. We are concerned with the Budget debate—
  Sir Ian Orr-Ewing Sir Ian Orr-Ewing rose—
  Mr. Diamond: I have given way several times already.
  Sir Ian On-Ewing: The right hon. Gentleman said that he would give way—
  Mr. Diamond: I said that the hon. Gentleman was not the first in the queue.
  Sir Ian Orr-Ewing: Will the right hon. Gentleman tell us, since he has done some careful calculations, what is the cost of collecting this £1,900 million a year, and how much falls on the taxpayer and how much falls on industry?
  Mr. Diamond: The cost of collecting the tax is approximately 1d. in the £ as compared with 3d. in the £ for our normal taxes.
  Mr. John Hall Mr. John Hall (Wycombe) rose—
  Mr. Diamond: The hon. Gentleman may have an opportunity in Committee on the Finance Bill when we shall be debating details.
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  I referred to the alternative, which no one has taken up, of suggesting some other tax which raised £600 million. It has been said that the answer is instead of raising £600 million in additional tax to reduce Government expenditure by that amount. This year, public expenditure, which is a more accurate and relevant phase than Government expenditure, will amount to over £16,000 million out of a total gross national product of over £36,000 million. It is, therefore, a most important element in our national life and, in absolute terms, is very substantial.
  If I may, therefore, I would like to deal with this and the arguments in some detail. First, let me give the main facts. Public expenditure grew during the last five years of the party opposite at an average rate of 4½ per cent. a year. During our first five years, the average rate of growth is slightly less. By its nature, the rate of growth is uneven. The average that I have given for the party opposite covers percentages varying between 1· and 7½. In our case, the percentages vary between 1 and 7. In the first figures that the Government put before the House, we forecast an increase averaging 4¼ per cent. per annum. We are in line with that target. More specifically, my right hon. Friend the Prime Minister announced in January, 1968, the Government's intention to restrict the rate of growth of public expenditure in 1968–69 to 4¾ per cent.
  Mr. Reginald Maudling: The right hon. Gentleman has been good enough to give us figures for the growth of Government expenditure in two periods. Could he give figures of output in the same periods?
  Mr. Diamond: I am coming to that. I hope that the right hon. Gentleman will allow me to make my own speech. I have the very point for which he asks, and I have figures for a period for which he was largely responsible.
  I return to the statement made by my right hon. Friend the Prime Minister in January 1968 of the Government's intention to restrict the rate of growth of public expenditure in 1968–69 to 4¾ per cent. As usual, performance has outstripped promise. According to the latest information, the increase will be just over 4 per cent. For 1969–70, the target was to be a mere 1 per cent. increase over the estimate for 1968–69. The figure

  53
  which I have given of approximately £16,000 million is within that 1 per cent. target.
  An Hon. Member: Real or money?
  Mr. Diamond: The comparisons which I have been giving are in real terms. The amount that I have just given is in current terms.
  My first point is that under this Government public expenditure is firmly under control. The question is no longer have we achieved our targets in public expenditure but, rather, should they have been maintained. As our national product grew in the earlier years at a slower rate than was at one time thought likely, should not we to the same extent have reduced the growth of public expenditure? To put it another way, did not the resources put at the disposal of the public through this growth of public expenditure result in too great a burden of taxation being put upon the shoulders of the individual? I want to deal with both arguments fully, but first I want to make two preliminary points.
  The theory that public expenditure and the national product should rise year by year in harness at the same rate is based on two erroneous assumptions. The first is that one can determine one year's growth of gross domestic product precisely. One cannot. One can attempt to forecast it. One can endeavour to assist in creating the right background. But some of the most important elements in growth are outside the control of any Government. The plain fact is that growth in G.D.P. is not susceptible to precise annual control.
  Secondly, the planning of public expenditure is essentially a long-term matter. Certainly one can plan it over a five-year period. One can plan it with some success over a three-year period. But for shorter periods one is up against the difficulty that so many of the items depend upon decisions made and plans laid years in advance. One has to think only of schools, hospitals, power stations, the training of teachers and the production of more doctors to see immediately how much future expenditure is determined by decisions long past. Any Government who desire public expenditure to grow broadly in line with expected increases in the national product must
  54
  contemplate doing it over a period of years and certainly not on an annual basis. Nor do any Government attempt that, and I will give only two examples.
  The first, in response to the request of the right hon. Member for Barnet (Mr. Maudling), is taken from the year 1961–62, under a Tory Government, when public expenditure grew about three times as fast as the national product. In the current year, under a Labour Government, public expenditure is likely to grow about one-third as fast as the national product.
  The concept that economic growth should determine the rate of growth of public expenditure can only be given meaning over a period of years. But to apply the concept at all implies the assumption that one is satisfied with the starting point.
  If public and private expenditure are in balance to begin with, there is something in the argument that the two should be kept in balance. But what if that is not the case? What if one believes that public squalor amid private affluence is not a credit to our society? What is to happen if a Government are elected on the basis that that should be changed? In 1964, we found an imbalance which we had to redress; and we could only redress it by diverting resources from the affluent area to the squalid, which meant redistributing income through taxation in favour of the needy, in the form of public expenditure. Our public expenditure has been neither uncontrolled in its growth, nor excessive in its absolute amount. It has provided the community with services which it could not possibly have otherwise obtained, it has introduced greater equality and fairness among our people, it has enabled the increasing school population to be accommodated and the increasing numbers of aged to be provided for.
  Mr. Patrick Jenkin Mr. Patrick Jenkin (Wanstead and Woodford)rose—
  Mr. Diamond: I will give way to the hon. Gentleman when I come to the end of this section of my speech.
  There still remain two arguments. The first is that part of the increase in public expenditure stemming largely, as it did, from the increase in social and welfare services, could have been avoided if we

  55
  had been more selective. Let me start by saying that it is a complete myth that we are unselective. Let us take, for example, family allowances. The family allowance always has, to a limited extent, been tailored to income levels and thereby to need by being treated for tax purposes as part of one's income. But we have gone further. Increases in family allowance are now withdrawn, through the tax system, from all those who, as shown by their income tax returns, cannot be said to need this kind of assistance; and the tapering effect at the lower ranges of tax mean that those whose need is modest receive modest assistance and those whose need is great receive the whole assistance.
  I have been provided with a list of the benefits and services which are available subject to a statutory test of need. It includes such things as supplementary benefits, legal aid, rate rebates, free school meals, higher education awards, dental and optical treatment, residential accommodation for the elderly and the handicapped, residential child care, school maintenance allowances, school uniform, boarding education allowances, and so on. It is a list of over 30 headings in all, administered by a great variety of authorities, and all either brought in by or carried on under a Labour Government.
  Sir Ian Orr-Ewing: How many were brought in by and how many were carried on under the Labour Government?
  Mr. Diamond: If the hon. Gentleman wants to know precisely how many were brought in by this Government, perhaps he will put down a Question on the subject, when I will gladly give him the information. All were either brought in by or carried on under a Labour Government. I do not know what further plans right hon. Gentlemen opposite have for enforcing what they call selectivity. I am told by my Government colleagues that nobody could protect the public purse more fiercely than I do. It is right and proper that I should. It is also right and proper that, in addition to protecting the public purse, I should bear in mind the need to protect the self-respect of the citizen and the dignity of my fellow man.
  Mr. Patrick Jenkin: As the self-confessed protector of the public purse, does
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  the right hon. Gentleman still adhere to the view, which he put from that Dispatch Box a couple of years ago, that most of the things which the citizen requires are best provided by the community?
  Mr. Diamond: Yes, indeed. I repeat what I then said; that in my view most of the things which the individual requires—I said "individual"—are best supplied by the community. I believe that that is still the case.
  I come to the final argument as to whether the level of public expenditure has resulted in an excessive level of taxation in this country.
  Lord Balniel: Before the right hon. Gentleman leaves the social services, may I remind him that in the course of his Budget Statement the Chancellor announced increases in National Insurance pensions? Does the right hon. Gentleman intend to refer to this matter?
  Mr. Diamond: I will come to that later.
  In considering the question of the tax burden it is certainly true that social, welfare and other community services must be paid for and that the money comes from taxation in one form or another. When a man looks at his pay packet or salary cheque he sees the money to pay for that part of his standard of living which he chooses individually. There has already been deducted a sum to pay for that part of his standard of living which he chooses through his representatives in local and national government. There must be a reasonable balance between the two and in a free democratic society such as ours it is right that the individual should retain a large measure of individual choice in the provision of his particular kind of standard of living. Nobody can say that this is not the case.
  The level of direct taxation—that which affects his salary cheque or pay packet—is such that not until the average family man is earning more than £70 a week does he pay more than 5s. in the £ on average in tax; 15s. in the £ is for his individually chosen standard of living and 5s. is for the community-provided standard of living. It is not until his earned income exceeds £250 a week that he pays more than 10s. in the £ in tax on average.

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  Nor can anybody say that, by comparison with other similar countries, the effective rates of tax are out of line. I know that the right hon. Member for Enfield, West now accepts this. He said as much in a recent article. [Interruption.] I think that I heard the right hon. Gentleman say that he has always accepted it. I would not argue with him about his recollection.
  I remind the House that if one takes the most relevant criterion of the proportion of the gross national product at factor cost taken in taxes and contributions, one finds that of ten similar Western European countries, including the United States and Canada, we are broadly in the middle. We are a broadly average case.
  The argument against public expenditure cannot be that the money spent communally is wasted. On the contrary. It produces solid assets and much-needed services at a price which could not possibly be matched by the individual if one considers only the question of the economies of scale.
  Nor can the attack against public expenditure be based on the argument that taxes are levied unfairly because the surprising fact is that when one takes account of all direct and indirect taxes and contributions in their impact on individuals and families—the very high rates paid in tax and Surtax by the very rich and the very high rates of indirect tax on beer and tobacco paid by the very poor—admittedly, one is direct and the other is indirect—one finds that taxes over-all are neither progressive nor regressive, but are, broadly, neutral in their impact.
  Mr. Ridley: Oh, dear.
  Mr. Diamond: Would the hon. Gentleman care to tell me what is wrong with that?
  Mr. Ridley: I am grateful to the right hon. Gentleman for giving me a second place in the queue. Is not he aware that although direct taxation is about equal in all the countries he mentioned, taxes on higher incomes in this country are grossly heavier, which is why he finds such strong resistance to increases in public expenditure in this country?
  Mr. Diamond: The reason why one finds strong resistance to increased public expenditure and why it is objected to by those who pay very high rates of tax and contribute highly to public expenditure is this: it is objected to by those with very high incomes because, having such high incomes, they have a steeply progressive rate of tax to pay. Not until one is broadly in the region of having a £14,000 to £15,000 annual income does one pay a higher rate of tax in this country than one would pay in other countries.
  I repeat, therefore, that when one takes into account the high rates of tax and Surtax paid by the richest and when one takes into account all the other taxes paid by everybody else, the effect of these taxes, direct and indirect, in their impact on families is neutral. The benefits that are paid are progressive. That is the way in which most goes to the neediest. The rich man gets back in services much less than he pays for in taxes. The opposite applies to the least well off. Indeed, a married man with three children and earning up to £25 a week receives more in benefits than he pays in taxes.
  This means that the real crime of the Labour Government is that they have taken away from those who can afford it and have given to those who need it. That is the only argument between the parties. Hon. Gentlemen opposite have made it clear—we are grateful to them for this—that their policies are directed to curbing and reducing this redistributive process. They desire to achieve power so that the rich will pay less and the poor will receive less.
  The overall effect of this Budget is to take that redistributive process a step further. It will have the effect of reducing the inequality of incomes by a further 2½ per cent., and in making that statement I of course include the redistributive effect of pensions. I have, in a general way, taken into account the impact of the increase in pensions and of the increase in contributions. [Interruption.]
  I know that the House would like me to be more specific and to go into more detail about the remaining pension, and consequential increases and the great variety of benefits, but I regret that we

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  are not yet in a position to give that detail. [HON. MEMBERS: "Oh."] If we were, my right hon. Friend the Chancellor would, of course, have given the figures in his Budget statement. It was right that he should allay anxiety by indicating the amount of the increase in the pensions of the two main categories.
  Mr. Iain Macleod Mr. Iain Macleod (Enfield, West) rose—
  Mr. Diamond: I will give way to the right hon. Gentleman in a moment.
  We are now considering more exactly what these will entail in terms of increased contributions as well as the consequent changes in the many subordinate rates of benefit. When we have settled the detail of all this, my right hon. Friend the Secretary of State for the Social Services will make a full statement to the House and answer questions. The major issue was when the old-age pensioner and his wife would get their increase and how much it would be.
  Mr. Iain Macleod: Would the right hon. Gentleman deal with two points? First, the Leader of the House, under strong pressure last Thursday, undertook that a statement would be made before the end of the Budget debate. Is the Chief Secretary now saying that that undertaking is to be fulfilled? Would he comment on that?
  Secondly, does the right hon. Gentleman realise that he is saying that the Chancellor, in his Budget Statement, gave the full details of the increase but was irresponsible enough not to have made the calculations about contribution levels and so on?
  Mr. Diamond: I will gladly deal with both questions. My right hon. Friend the Leader of the House certainly indicated that he would convey to his right hon. Friends the desire of the House that a statement should be made. I have made that statement. [HON. MEMBERS: "Oh."] I have told the right hon. Gentleman and the House the information which we have.
  As to the right hon. Gentleman's second question, of course it was necessary for the Chancellor in making his calculations to have regard to the overall effect. That he has done.
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  The right hon. Gentleman talked about this as if there were only two rates. As he will recollect, there is a host of rates and benefits and a special problem in terms of the imbalance in the fund. All these have to be carefully worked out
  Is the right hon. Gentleman saying that we should not have given this information, information which many people were anxious to receive, until all the detail as to the consequential rates has been gone into? One can never satisfy the Opposition. I remember exactly the same situation arising about taxes. When we gave an indication of what taxes were to be before the date, all that the right hon. Gentleman the Member for Barnet could do was to complain about its causing uncertainty. If you give the information you are criticised; if you do not give it you are still criticised.
  Lord Balniel: The Chief Secretary will recall that the Chancellor gave in specific detail the increased pensions to be paid in November. He also gave in specific detail the increased cost to the National Insurance Fund. He has given no indication at all, nor has the Chief Secretary, about how this is going to be paid for. Does this not epitomise the mishandling of the economic affairs of this country? Is it not the Government's intention, as has been the previous practice, to increase supplementary benefit at the same time, and what will be the cost of that?
  Mr. Diamond: It is the intention of this Government to make a statement when they have carefully considered all the relevant details. I have indicated the kind of detail which has to be considered. When that has been done, the responsible Minister will be glad to make a statement and answer as many questions as the House desires to put to him. It would be irresponsible for me to go into detail of the kind for which the right hon. Gentleman is asking when it is irrelevant to Budget considerations and when the only issue is that of allaying anxiety on the major rates.
  Mr. Joel Barnett: My right hon. Friend said that it was irrelevant to Budget considerations. Surely the impact of the Budget, deflationary or otherwise, must have been, and clearly was, a consideration in the mind of my right hon. Friend. Is he telling us that he did not know how

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  much reflation or lack of it there would be, and in which way the contributions would be decided as between employer and employee?
  Mr. Diamond: My hon. Friend must have misheard me. I said that the detail as to the rate of benefit to a particular person does not affect the overall Budget consideration. The overall Budget consideration is concerned with the totality of the figures, and assumptions had to be made of the kind to which my hon. Friend has referred. For these assumptions we took it for granted that we should go on the previous basis of allocation between the three contributing parties, the employee, the employer and the Exchequer. That is all that is needed for Budget purposes, and I repeat that that has enabled my right hon. Friend to calculate his Budgetary position sufficiently accurately without going into all the detail, which is for a later stage.
  Dame Irene Ward: I hope the right hon. Gentleman will allow me—
  Mr. Diamond: I hope that the House will be good enough to return now to a consideration of—
  Dame Irene Ward: Will he allow me—
  Mr. Deputy Speaker (Mr. Harry Gourlay): If the Minister does not give way the hon. Lady must resume her seat.
  Dame Irene Ward: Could I have another go, please?
  Mr. Deputy Speaker: I have already asked the hon. Lady to resume her seat.
  Dame Irene Ward: On a matter of anxiety—
  Mr. John Boyd-Carpenter: On this point—
  Mr. Diamond: I do not know whether it is your intention, Mr. Deputy Speaker to expect that the debate should proceed in the normal way.
  Mr. Boyd-Carpenter: On this point—
  Mr. Deputy Speaker: I have already indicated that if the Minister is not prepared to give way then the hon. Lady or the right hon. Gentleman must remain in their seats.
  Mr. Boyd-Carpenter Mr. Boyd-Carpenter rose—
  Mr. Diamond: If I may make a few sentences of comment, perhaps I could give way to the right hon. Gentleman shortly. [Interruption.] If I cannot make myself heard, I cannot make a statement. I heard the right hon. Gentleman say fourteen times running "On this point" but he was not good enough to listen to one sentence of mine.
  Mr. Boyd-Carpenter: That is not correct.
  Mr. Diamond: I have made it clear that I have given the House the full information that we had. The detail is irrelevant to the present issue, and I have no further information which I am able to give because I have not got it. It is no use the hon. Lady or anybody else asking me for such detail. I will give way to the right hon. Gentleman.
  Mr. Boyd-Carpenter: In the right hon. Gentleman's speech, to which I have listened most carefully, he said that what was relevant to the Chancellor was the totality of the expenditure. In those circumstances can he tell the House what, in addition to the increase in social security benefits, is the totality of the expenditure on supplementary benefits, industrial injuries and war pensions, which are invariably raised when social security benefits are raised?
  Mr. Diamond: I repeat that they are all part of the consequential figures to which I referred. One can only go on the basis, which has been sufficient for my right hon. Friend's purposes, of assuming the same proportions as previously. That is adequate for the purpose. I am sorry, but there is no point in the right hon. Gentleman asking me any further questions on this matter.
  Sir Frederic Bennett: On a point of order. May I ask for your protection, Mr. Deputy Speaker, to which one is entitled as a Member of this House and may I refer to the procedural undertakings which were given in this House last week? On that occasion we all had the clearest recollection that the Leader of the House said that the House was entitled to a statement and that they would get one before the end of the Budget debate. The Minister today has made no such statement at all. He says

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  he cannot make one and he has pretended that this is in fulfilment of a pledge. I ask what protection there is for backbench Members, as well as other Members of the House, when Ministers mislead the House in this fashion and obtain a hearing which otherwise they would not have got.
  Mr. Deputy Speaker: That is a matter for the Minister.
  Mr. Diamond: Further to that point of order. The hon. Gentleman is always inaccurate, and he has been grossly inaccurate on this occasion, which does not surprise me in the slightest. What my right hon. Friend said—I have HANSARD in front of me—was this. In fact he made two interventions. In the first he said:
  "Yes, I will do my best on this, and I will convey the strong views of many hon. Members on this matter."
  The second was:
  "I have said that I will convey the feelings of hon. Members. I cannot say at this stage, but I think that my right hon. Friend should make a statement."—[OFFICIAL REPORT, 17th April, 1969; Vol. 781, c. 1335.]
  I have made that statement, and I do not think that there is any point in being further examined.
  I have come to the end of my comments on the Budget. I have made it clear that the progressive nature of the Budget takes into account the pension situation and represents one further step towards equality.
  4.50 p.m.
  Mr. Terence L. Higgins: I can only regard the Chief Secretary's speech as one of the most disgraceful, outrageous, and irresponsible statements which it has been my misfortune to listen to from the Labour Government. It is quite extraordinary that the Chief Secretary should come to the House this afternoon and fail completely to give us details not only of the cost of the increases which were announced by the Chancellor in his Budget speech but of the entire extent of the increases which he proposes to make in other benefits.
  For the Chief Secretary to say that all that is necessary to enable us to analyse the economic implications of this proposal is that the Chancellor should give the figures that he gave in his
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  Budget Statement is the most complete and utter nonsense, because even if the expenditure on these increases is fully met by the increase in the contributions the economic impact of them may vary greatly—first, because they will depend on which way the various contributions are levied on the different contributing parties. It is not sufficient for the Chief Secretary to say that all the Chancellor had to do was to make assumptions about this. If the right hon. Gentleman is to formulate any economic judgment on what he ought to do in his Budget, he does not have to make assumptions, he has to make decisions—and we understand that the Chancellor has made no decisions whatsoever on these matters. Is that the case? Will the Chancellor tell us when he winds up the debate whether that is so or not?
  Secondly, one has to know to what extent the increase will be covered by contributions. Pensions increases necessarily redistribute income from people with a high propensity to save to people with a low propensity to save. If that is so, it has a great effect on the total of aggregate demand, which is crucial to the Chancellor in making his Budget judgment, and crucial in deciding whether he should take this or that measure in the Budget.
  This is not a matter of trivialities. The sums involved are larger than the total raised by my right hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd) in his largest increase in taxation. It is this order of magnitude which the Chancellor has to take into account, and we are now told that he has made his entire Budget judgment without having the remotest idea of how wide the increases are to be, or how they are to be raised.
  I am sure that when my right hon. Friend the Member for Barnet (Mr. Maudling) winds up the debate he will return to that, but I repeat that it is completely irresponsible for the Chief Secretary to have made the statement that he made. I am surprised that he allowed himself to be put in to this position. I hate to think what the I.M.F. advisers will think when they find that the Government are run in this way.
  Dame Irene Ward: Will my hon. Friend ask the Chief Secretary how he

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  replies to the anxieties of those on supplementary benefit who do not know what their supplementary benefit will be, and also how he replies to the anxieties of those people who will have to pay increased contributions? There is a totality in anxiety, as well as in the point made by the right hon. Gentleman.
  Mr. Higgins: I agree with my hon. Friend. The Government's proposals will cause grave disquiet amongst many people, and not least in industry, on which we have to reply for an increase to improve our balance of payments.
  The Chancellor has been congratulated on a number of his Budget proposals, but I think it right to say that those on which he has been congratulated have merely sought to rectify a number of aberrations which were perpetuated either by himself or by his predecessor. The change in the law relating to close companies is welcome, but it will not offset the heavy burden which has been placed on such companies since 1964. The change in the scope of betterment levy merely rectifies a situation which ought never to have been created by the Government in the first place.
  Reclassification for S.E.T. is some improvement. We have pressed for this change for some years, but it cannot remove the other anomalies of the tax, and the only real solution to the absurdities of the tax is to abolish it altogether. The Chancellor says that the raising of the threshold for Income Tax will take out one million people from Income Tax, but he overlooks the fact that 2½ million people have come within that net since the present Government came to power in 1964. To say the least, the congratulations offered to the Chancellor on those matters ought to be qualified.
  The right hon. Gentleman received a number of congratulations from his hon. Friends when he sat down after his two-and-a-half hours speech on Tuesday. There is no doubt that he succeeded, or at least his hon. Friends thought at that time that he had succeeded, in introducing the third toughest Budget that we have ever had in this country and still giving a slight impresssion that he might be electioneering. The sad fact is that he achieved this success in political terms at the expense of sound economic management, and I want to show in a few moments why that is so.
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  It is difficult to avoid the impression that the Chancellor started by saying, "I need to take a certain amount out of the economy, say £220 million, to improve the balance of payments". He then sought to do that without incurring any electoral unpopularity, and he was so surprised by his success that he overlooked the fact that the measures which he proposed to take were those which would damage investment, exports, and the balance of payments rather than improve them.
  I had not intended to weary the House by placing this Budget in its historical context. I had not intended to go through the whole question of the 1966 panic measures, or the 1967 "steady as she goes" Budget, but I think that I must take up one point in that context in relation to the Chief Secretary's remarks, because what he said is totally inconsistent with what he affirmed to believe at the time of the 1967 "steady as she goes" Budget, when we were told that there was no difficulty in reining back public expenditure. That is contrary to what he says now. He said then that public expenditure could be reined back at short notice and that there would be no difficulty about that.
  The right hon. Gentleman's explanation about public expenditure is a total reversal of what was said in the National Plan. The National Plan made it abundantly clear that the increase in public expenditure at the levels which were projected was justified only if economic growth proceeded at the rates of economic growth which were projected. It is no good the right hon. Gentleman shaking his head. That is what the National Plan said. The Government failed to achieve the growth, but they increased public expenditure to the projected levels in the National Plan, and the right hon. Gentleman is now seeking to put an entirely different gloss on the whole picture.
  It is important to look back to the date and day of devaluation, because the Budget which we are debating today is crucially determined by the events which took place then. In particular, there was a broadcast by the Prime Minister. The Prime Minister has essentially two speeches in a crisis situation. One is that we must all pull together, backs to the wall, Dunkirk spirit, and all that. The

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  other is, "Do not worry chaps, it is going to be all right. Trust me." If there were one occasion on which the Prime Minister should have called on the nation to make a real effort it was on the night of devaluation, but instead he made that absurd statement about "the £ in your pocket not being devalued", and so on, and to give the impression that what he said was true nothing happened until the Budget in the following April.
  We are now paying the price for that proscrastination. The enormous Budget of last year—taking £954 million—the November measures, totalling £250 million and now this Budget are all attempts to catch up with the ground we then lost. They are all attempts to make devaluation effective. I want to analyse the extent to which the Government have failed, for failed they have.
  On television, of course, the Chancellor made a good show at giving the impression that everything was going quite well, or not too badly, perhaps a bit slower than had been hoped, and so on. He said:
  "The improvement in our trading position was not nearly as fast as it ought to have been. This was primarily because people's expenditure instead of falling a little as I budgeted rose by about one per cent."
  What a tremendously effective throwaway line, but it represents in absolute terms a mistake of about £624 million. In fact it is a total discrediting of last year's Budget, when the right hon. Gentleman based his strategy on the idea that he would cut consumption by 2 per cent. in order to make way for exports. Yet here we have a throw-away line in a television broadcast as though this kind of difference is a triviality.
  In his Budget speech, the Chancellor was again sweet reasonableness. He said:
  "It would therefore be blindly partisan—on either side—to describe 1968 as either a wholly good or a wholly bad year."—[OFFICIAL REPORT, 15th April, 1968; Vol. 781, c. 1000.]
  While that phraseology may be possible to justify if one wants to quibble, the fact is that 1968, as my right hon. Friend the Leader of the Opposition pointed out, was the worst year for the British economy that we have ever had. All the economic indicators—unemployment, inflation, the trade balance, taxation, Bank Rate and our overseas debts—were far
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  worse than we could ever have feared they might be and they are a complete condemnation of the Chancellor of the Exchequer. It may be true that 1968 was not wholly bad in the sense that one could hardly imagine anything worse, but the fact is that not a single economic indicator does not condemn the right hon. Gentleman absolutely.
  I want to say something about economic forecasting, because the right hon. Gentleman sought to give the impression that he wants to stimulate intelligent debate and to make public forecasts and so on. It is true that, for the first time this year, Table 1 of the Financial Statement compares his last year's economic forecasts with the outturn. For that we are grateful, but it does not go nearly far enough to enable any reasonably full debate to take place. Yet the Chancellor says that he hopes that this will contribute to an improvement in forecasting techniques. There is certainly need for the Government to improve their forecasting techniques because their record since 1964 has been much worse in predicting the likely outcome than the views expressed by this side of the House in the regulator debate on the Finance Bill, which has now, by tradition, I am glad to say, become the usual occasion for debating these matters.
  If the right hon. Gentleman wants to improve this situation, I repeat my criticism of the Chancellor's forecasts which I made last year. As I said then, most certainly the right hon. Gentleman must give figures for disposable income and prices and cost changes because otherwise one simply cannot tell whether forecasts are consistent. Secondly, by all means let him publish actual techniques so that they can be subjected to scrutiny, because the techniques so far published clearly depend almost entirely on C+I+G process of iteration instead of tying up the demand side of the equation with the supply side. If the right hon. Gentleman wants informed debate, let him go into this matter in much greater detail. It is no good his sliding away by saying that the savings forecast was not what he expected and was about 0·4 per cent. out. That means £120 million. The right hon. Gentleman's speech last Tuesday made no real attempt to analyse what went wrong in the comparisons between expectation and outcome.

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  The balance of payments is clearly the most crucial and important subject we have to consider. It is not very easy to trace exactly what the Chancellor was saying because his remarks on exports, imports and the balance of payments are spread throughout his speech. But two things he did not say. The right hon. Gentleman did not say, although it is implicit in his statement, that the balance of payments situation on trade account last year—which he admits to be most important—was the worst ever. He did not say either—although, according to the Financial Times, he announced it to a Labour Party meeting upstairs—that his target of £500 million surplus has been abandoned.
  But the right hon. Gentleman did say a number of things spread out through his speech. If hon. Members care to select these passages and tie them together, they will find that he is saying, "Last year was an exceptional year for growth in world trade. If it had not been so, we should have been in a very bad way indeed. It is clear that devaluation had very little effect despite the heavy deflationary measures I took both in the Budget and in November. Indeed, despite devaluation our share of world trade went down."
  The right hon. Gentleman was a little optimistic about next year. He suggests that there has been a backlog on some exports which will be going through later. We trust that that will be so, but it will not disguise the fact that devaluation, not having been very effective in the first instance, will not be so later in terms of long-term production. The right hon. Gentleman said that world trade could not be expected to grow as fast as it did last year. He did not tell us of his assumptions about world trade, although he wants informed debate. I hope that he will tell us tonight, for this matter is crucial to the future. He also said that he expected world trade to go up after the middle of this year, but no explanation was offered. Most commentators agree, however, that because of the United States taking action on inflation, world trade is likely to decline at that stage.
  The conclusion is that the Chancellor's basic strategy following devaluation has not succeeded, for the reasons which I have mentioned. Yet he proposes to
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  introduce measures which will, for example, deter investment, although he himself fears that there will be lack of capacity for exports. These measures will deter exports and he is giving us the same old deflationary package, although this year rather less appropriate in form than last year. The conclusion is, therefore, that whenever the right hon. Gentleman is not sure what to do he puts the leeches on the patient again, trying to get a little more out, and that he does not have any new ideas on how to solve our economic problems.
  The right hon. Gentleman's Budget judgment was given rather exceptional emphasis by the Secretary of State for Economic Affairs. It is important to appreciate that the emphasis placed on the idea of a single figure for economic judgment of £270 million in aggregated demand can be very damaging. Simply taking out some figure like that does not solve our problems automatically. The single figure is meaningless, first, because it has no time dimension and this is the area in which the Government have been most wrong; secondly, because we are very short of data on what the judgment is, and after the Chief Secretary's extraordinary performance today we are even more short of data, and short of more data than we had realised; thirdly, because of the idea which the Chancellor puts forward that the process of his Budget judgment tends to be still target forecasting.
  Although he wants informed public debate, the right hon. Gentleman has not published what his forecast was before the November measures were taken or, indeed, what effect individual measures such as the overdraft proposals will have on aggregate demand. It is not just a question of arriving at some overall figure which can be simply expressed, as the Financial Secretary seemed to imply on Wednesday. It is very important to see what is happening to the specific proposals which make up the net effect of that Budget judgment. The Chancellor says that there has been no change in his basic policy. But there are two areas in which one can detect a change. On incomes policy, it is not true that the Government are giving up their statutory policy; they are merely to have a rather shorter period for the duration of that compulsory policy—four months instead

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  of the previous twelve months. For goodness sake, why? Surely the failure of the Government's prices and incomes policy is abundantly clear. The rise in wages and earnings in 1968 was more than double the 3½ per cent. ceiling in the 1968 White Paper. Prices rose by 6·2 per cent. compared with that ceiling.
  So far as we could gather from the Chief Secretary, the only area in which the Government's policy has been effective is the control of dividends. This shows how absurd and arbitrary the entire policy has been. We wait with interest to hear what new legislation is proposed here. I should be grateful if the Chancellor could say tonight whether he proposes to introduce legislation to cover dividends and so on or whether he believes that it can be done within the existing framework, under Statutory Instrument. I understand that that is not so.
  The second major change in his policy is with regard to monetary policy. Here, of course, the Chancellor is protesting too much. Talk of foreign coats with regard to the quantity theory of money is bandied around, although that theory began in Cambridge. But there has been a big change in his attitude towards the borrowing requirement and, as far as we can gather, towards interest rates as well. If the Chancellor is moving, as many suspect, towards the Chicago school and a more active interest rate policy, those concerned with mortgage rates and other interest rates in this country should be aware of it.
  Despite the fact that I have the greatest personal respect for him, I must say that the Financial Secretary the other night, winding up in a flippant style, underestimated the impact which the increase in mortgage rates is having on the young married couple and those trying to buy a house. My right hon. Friend the Member for Enfield, West asked the Financial Secretary:
  "… why was it that the most convincing policies were given by almost every hon. Member opposite in their Election addresses in 1964, particularly by the Prime Minister, that they would bring the rates down?"
  The Financial Secretary, in a flippant reply, after referring to King Canute, said:
  "I must be absolutely honest here and say that I never study these predictive statements, even those of my most distinguished colleagues
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  or those of right hon. Gentlemen opposite, with the zeal with which some hon. Members study them. Nor do I seek to incorporate them in any addresses that I make to the House. I should require notice of that question …".—[OFFICIAL REPORT, 16th April, 1969; Vol. 781, c. 1271.]
  Yet in the Financial Secretary's own 1964 election address, one finds the following statement:
  "Both rents and mortgage interest will be kept down by the steps a Labour Government will take to ensure favourable interest rates."
  It is not good enough to come out with that kind of flippant statement and disregard election promises. It is not fair on people who are trying to buy houses on mortgage. If one makes the calculations—I will gladly make them available to any right hon. Gentleman opposite—one sees that, as a result of the Government's measures, it seems likely that the number of people who can buy houses on mortgage, because of the restrictions which building societies rightly put on the relationship between the mortgage required and weekly wages, has probably been halved since 1964, as a result of the Labour Government. This is an appalling situation.
  I turn to the effects of these proposals on exports. As I have said, the extraordinary fact is that this Budget discourages investment which may be used for exports and then goes on to discourage exports themselves. The Government's own actions have steadily eroded the advantages of devaluation for exporters. I do not believe in debate by enumeration, but I hope that the House will bear with me if I specify shortly the measures which have discouraged exporters since devaluation. At the very time of devaluation there was the removal of the export rebate, which probably knocked off 2 per cent. of the 14 per cent. advantage. Then there was the removal of the non-regional S.E.T. premium, which also probably knocked off about 2 per cent. Then there was the higher rate on imported raw materials which were used for export, which meant probably another average 2½ per cent. erosion of the devaluation advantage.
  Then, of course, if any profits were to be made by exporting, they were to be charged at another 2½ per cent. higher Corporation Tax. Even at that moment, therefore, it is doubtful whether many people thought that they should go into

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  exporting, although some who were already in it might feel that they should expand it. But we have subsequently had labour cost increases in manufacturing in 1968 of 8·8 per cent. Domestic inputs, judged by the cost of living index, increased by 6·2 per cent. In April, 1968, S.E.T. was increased by 50 per cent., some of this applying to services which would be used in encouraging exports. In November, there was a Purchase Tax impost on some of the inputs which, again, went into exports, and, of course, there was the petrol hydrocarbon oils impost.
  Then we had the higher interest rates which exporters had to bear unless they could tie it to a specific import. Now, S.E.T. is increased again, petrol costs are up again, Corporation Tax is up again. Now we are to have—although we still do not know by how much—further imposts on industry in the autumn because of the Government's proposed increases in pensions. When one goes through this list, it is quite extraordinary that there has been any increase in exports at all. But what is clear is that the advantage of devaluation has been steadily eroded by the Government's own measures. If one tries to appraise the Chancellor's judgment, as far as the prospects for exports go, one must regard it as very optimistic.
  Of course, we have had a dissertation this afternoon from the Chief Secretary about Selective Employment Tax. I will not bother to go through all the well-known arguments against the new point which he put. I was very impressed by the cogent way in which it was done by The Economist in its issue published at the end of last week. I was only sorry that I had not sent them a minute saying that this was something which I had categorically intended to mention some time before they published their article. The S.E.T. is a tremendous burden on this country. We in no way accept the arguments of the Chief Secretary, and I am very glad that my right hon. Friend the Member for Enfield, West has said categorically, once again, that we intend to abolish it as soon as possible.
  We shall no doubt pursue the question of the interest on overdrafts when we discuss the Finance Bill. It is clear that the whole of this—whether it be the division between personal or business expenditure
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  or whether it is on housing improvements—will lead to the same sort of line-drawing arguments as we had in the S.E.T. debates. I sometimes think that the Chancellor must have become obsessed by some earlier Oxford Union debate on the question, "That the line must be drawn somewhere", because he has drawn up tax after tax in which the line is drawn arbitrarily between one group of people and another.
  Contrary to what he said, the Chancellor has not provided us with full information on which a real, serious debate of the issues can take place. The opportunities, which were in many ways forced on the Government at the time of devaluation, have been frittered away by procrastination in backing them up. We do not believe that the measures which the Chancellor now proposes are likely to solve the country's economic problems. That the incoming Conservative Government will inherit a tremendous burden of overseas debts and burden of taxation on our people no one can doubt. But I have not the slightest hesitation in saying that we shall succeed in alleviating that burden. This year's Budget does nothing to alleviate it and has no real prospects of improving our economic situation at this time.
  5.20 p.m.
  Mr. Frederick Willey: When I listened to the hon. Member for Worthing (Mr. Higgins) I clearly remembered the Budget speech of my right hon. Friend the Chancellor, and I assure the hon. Gentleman that I did not think that my right hon. Friend was electioneering. I thought, as most sensible commentators seemed to think, that the Budget was reasonable and fair. My doubts about it are that it is reasonable and fair within conventional orthodox limits, and probably the real question is whether orthodoxy, even a progressive orthodoxy, is enough for the circumstances which we face.
  I want to deal with two questions which would ordinarily be outside a Budget debate. First, I welcome the provisions which the Government are making about the betterment levy. When I last took part in the debate about the hardship cases, I said that it seemed to me that we could bring an awful lot of them within a fairly narrow band and that this seemed the simplest way of dealing with

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  the problem. This is what the Government have done. We can discuss the details when we come to the Finance Bill, but, although I am normally allergic to this, I should like the Government to reconsider making the provisions retrospective.
  The other matter with which I want to deal is that of industrial relations. I do not welcome their being dealt with within the context of the Budget. This is window dressing. It is dangerous and it creates a misleading impression that we can provide a dramatic short-term solution.
  The Government have been amply warned. The penal provisions in the prices and incomes legislation were equally window dressing. There was never any question of their being invoked. They never were invoked, but they have seriously damaged industrial relations. In any case, presented in the context of our economic difficulties, the Government's present proposals do not make sense. Take the repeal of Section 22 of the National Insurance Act, 1965—the removal of the grade and class disqualification for unemployment benefit. Like the Donovan Commission, I welcome that. It is a step that we should take, but at the same time I am realistic enough to know from experience that Section 22 is a real discouragement to unofficial, unconstitutional strikes. I know that men who are put out of work and find that they are not getting benefit exercise real pressure to get their colleagues back to work. It is nonsense putting this in the context of our economic difficulties. It should be done on its own merits.
  The key to the Government's proposals is the conciliation pause, the cooling-off period. There may be a very good case for this. After all, it was urged upon the Donovan Commission by the Society of Conservative Lawyers. I am not so apprehensive about it because the Society was one of Conservatives, but because they were lawyers. Lawyers have never been very felicitous in their intervention in industrial relations. The Society of Conservative Lawyers based its case on American experience. This was examined by the Donovan Commission, which found that unde the Taft-Hartley Act the Americans have a worse record than we have.
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  Undoubtedly, this proposal was seriously considered by the Commission, which reported in paragraph 425 of its Report:
  "… we do not think that the introduction of a procedure such as that proposed by the Society of Conservative Lawyers would be beneficial."
  I have not yet heard any reasons, or at any rate sufficient reasons, why we should set aside the judgment of the Donovan Report. Even more, I do not know why the Government should propose going much wider than the Conservative lawyers proposed. The Conservative lawyers were referring to strikes
  "… creating grave national loss or widespread hindrance to public health or safety."
  But now the Government, I understand, propose generally to cover all unconstitutional strikes where "the effects are likely to be serious". This seems to me to be window dressing.
  Those of us with any experience of unconstitutional strikes know that this procedure will apply only to a very limited number and very limited category of such strikes. It is not applicable to the vast majority of unconstitutional strikes. For this reason again, I think that by presenting it in this way we are prejudicing the effect that such a provision might have.
  But to be fair to my right hon. Friend the Secretary of State for Employment and Productivity, it seems to me that what she is doing is to introduce a new concept. She is saying that the Government are prepared to ignore the fact that unconstitutional strikes are unconstitutional, to intervene, and to do so by restoring the status quo, and then saying that in return the workers should undertake to desist from strike action. In other words, the Government are saying, "We should strike a bargain." This proposition should be seriously considered; there is something in it. What I am afraid of is that we are not affording the time and opportunity for proper consideration of something which is quite novel and which has many implications. I fear that by pushing this legislation through we are prejudicing the serious discussion that there should be about this proposition.
  Worse still, we have the muddle about the attachment of wages. We have a

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  Gilbertian situation. I have every sympathy with the Government. We know what they were trying to do, which was to say that if they had to have a financial penalty, in no circumstances would anyone who refused to pay a penalty go to prison. They were realistic enough to know that if anyone went to prison there might well be a second strike. Then, I am sure, my hon. Friends convinced the Government that if instead of sending someone to prison one called in the bailiffs there would still almost certainly be a second strike. Therefore, we have the proposal about the attachment of wages.
  I think that the Government were convinced at the end of the day that even if a striker were not sent to prison, and even if the bailiffs did not appear in his house, if his wages were attached compulsorily one might very well have a second strike. So they say to the person who has been on strike, "Please help us out of our embarrassment. Please choose to have your wages attached." This does not need legislation—all it needs is exhortation. This is vitally important because it is feasible only if there is co-operation from the trade unions. It must depend on trade union discipline, and it will be an awful pity if we miss the opportunity of establishing that co-operation upon which any improvement of industrial relations must ultimately depend. We should learn from our experience of the prices and incomes policy, where we obstinately clung to the penal provisions for so long that we had the trade unions turning against the policy as a whole. I very much regret this, because it is a policy which I support.
  The proposals in "In Place of Strife" are supported by and large. The whole House agrees that we must improve our industrial relations. It would be a great pity if we prejudiced this by being rigid in the same way. That is why I made the remarks that I did in opening. Equally there is a risk of the Government being too orthodox about their Budgetary measures. There is a risk that they are placing an over-reliance on fiscal monetary measures. The plain fact is that, whatever the reasons may be, the major difference between the post-war Labour Governments and the present Government is that Bank Rate for the whole Labour Government period from
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  1945 to 1951 was 2 per cent.: it is now 8 per cent.
  I am not so much concerned with my hon. Friends below the Gangway as with the Prime Minister. When he spoke from the Opposition Front Bench, no one was more effective and incisive in attacking Bank Rate policy than was the Prime Minister himself. I was delighted to hear him time after time criticising resort to the blunt instrument and reliance on fiscal policy. At that time my right hon. Friend asked:
  "Have we forgotten the devastating analysis of the Radcliffe Report about our reliance on monetary policy?"
  I believe that we are again in danger of placing over-reliance on monetary policy.
  We have had a good deal of criticism about planning, but it seems to me that we should pay more attention to what we ourselves said in Opposition about planning. The issue is not in generalities but in having an effective purposive plan. We are, and this is important and very relevant to our present economic difficulties, in a position in which sectional interests quite clearly are not sufficiently subordinated to the national interest. The argument is not about controls in general but whether controls are effective and serve the purpose for which they were intended. It seems, again, that we have lacked the courage to be specific in our controls. Discrimination has almost become a dirty word, but the Prime Minister, when in opposition, was a powerful advocate of discriminatory measures. He called, not just for discriminatory measures but for "blatant discrimination." He even said:
  "After all, the apotheosis of non-discrimination is death."—[OFFICIAL REPORT, 26th July, 1961; Vol. 645, c. 445–53.]
  I would not put it as high as that, but one of the hindrances to economic recovery at the moment is certainly nondiscrimination. My right hon. Friend the Member for Battersea, North (Mr. Jay) graphically pointed this out in his references to the consequences of the abandonment of import quotas in 1958–59.
  I represent a development area constituency. I welcome the regional employment premium. This has certainly helped the development areas considerably but because it is non-discriminatory within the development areas it results in a real waste of resources. We in the

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  North-East got £1 million of Government money directly to back the Furness shipyard. That did enormous good, and was fully worthwhile. It should encourage the Government to take the sort of decision which is needed to make development area policy more effective.
  Again, the Prime Minister used to argue for "publicly owned competitive State factories". He has a very good opportunity now to put this into practice at Sunderland. We have in Sunderland an advance factory which has been empty for about a couple of years: let the Government have the courage to take the decision to put production into that factory.
  The plain fact is that we slid into devaluation. The Chancellor of the Exchequer is now taking full advantage of devaluation, but within limits. In spite of his achievements, I believe that we must pursue more direct and specific remedies, and I believe that until this is done and we have the courage to face up to the problem, we shall find no real escape from the cycle of recurrent deepening crises.
  5.35 p.m.
  Mr. Selwyn Lloyd: The right hon. Member for Sunderland, North (Mr. Willey), made a most interesting speech. I warmly support his first point about making betterment levy concessions retrospective. The other matters which he mentioned should give his right hon. Friends a little food for thought. Much as I should like to follow him on them, I want to intervene comparatively briefly, I suspect that it would be a popular change in Standing Orders if an ex-Chancellor of the Exchequer had to get the leave of the House before speaking in a Budget debate, for the practical reason that he might seek to emulate the Chancellor of the Exchequer in the length of his speech and also because I am afraid that what some must regard as a process of Satan rebuking sin is not to everyone's taste.
  A Budget speech is a formidable task qualitatively, quantitatively and in the manner of the presentation of the proposals. On the last aspect, I pay my tribute to the Chancellor of the Exchequer without reservation. It certainly did not seem anything like two and a half hours. On the other two aspects, I hope that
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  the right hon. Gentleman will feel that I am not ruder about him than he used to be about me when I say that I thought his proposals stood up better to the test of quantity than to that of quality.
  I hasten to add that there are certain proposals which I wholeheartedly support. I support the idea of a Save-As-You-Earn scheme. I have not had time to work out the details, but the idea is certainly welcome, because I think that savings are a relevant factor to the sound management of the economy. We welcome the reliefs in direct taxation in the lower income range, the mitigations for close companies and the broadening of the basis of indirect taxation—with an important reservation, to which I shall refer later, about the products of the textile industry. We welcome the continuation of the process of exemption of small estates from Estate Duty by the raising of the level to £10,000. This is a good thing. I did something about it, as did my right hon. Friend the Member for Barnet (Mr. Maudling).
  But on the most important issue of all, what is called the "Budget judgment" I am very doubtful. I concede that any Chancellor has a very difficult task. He gets a lot of advice from many competent people—advice not known in its entirety to the rest of us. There are many, many uncertainties, particularly about this next autumn. It is not useful to go into them now in detail, but the Chancellor of the Exchequer must be aware of them. But even allowing for the being on the safe side argument, I have very grave doubts whether he has been right.
  The increase in the Corporation Tax will tend to diminish investment, and to seep through in increased prices to the consumer. Any increase in petrol duty was always scathingly denounced by the party opposite, particularly by the present Prime Minister, as an impost which affected the costs of production and distribution. In other words, it, too, will seep through to the consumer. The S.E.T. increase will obviously increase prices, because it cannot this time be absorbed at all. I suppose it can be said in theory that demand will be damped down; but will this work? Have the inflationary germs become immune to this type of treatment? We have seen quite a lot of inflationary effects of what

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  were meant to be deflationary measures. There has been the desire to get out of money into goods, and the wish to buy now, because things always go up.
  In my view, the Chancellor of the Exchequer would have been wiser this time to forgo these three measures. They will mean the end of the remnants of the incomes policy. They will create very great pressures for increased wages—and we have heard the figures given by my hon. Friend the Member for Worthing (Mr. Higgins) of the increase in earnings and the increase in the cost of living during the past year.
  Did the right hon. Gentleman know this, and is that the reason for the borrowing requirement being minus £800 million? I remember being rebuked on a former occasion by the hon. Member for Stoke-on-Trent, Central (Mr. Cant) when I recommended the curtailment of that requirement. My right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) wrote in the Sunday Express this weekend that when the Chancellor of the Exchequer gave this figure last Tuesday my right hon. Friend seemed to see on either side of him
  "… the malign ghosts of Peter Thorneycroft and Selwyn Lloyd …".
  I hope that that was a printer's slip, and that what my right hon. Friend submitted in his text was "maligned figures." However that may be, this figure, without further explanation, is really orthodoxy with a vengeance. It could be shatteringly deflationary, but paradoxically it might be inflationary. What do the creditors do with the money received if the idea is to pay off the debt? How is the surplus to be used? We need more information about this because it is an important part of the Chancellor's strategy.
  My next point is in regard to stocks. The rôle of Cassandra foretelling woe is not a very attractive one, although, poor girl, she was absolutely right. I admit to another anxiety. One should look at Table 13—an appropriate number—in Command Paper 3983 which relates to physical increases in stocks and work in progress. In 1960 against a current deficit of £258 million, stocks and work in progress increased by £591 million. In 1964, a controversial year from this point of view, against a current account
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  deficit of £399 million, the figure for the increase in stocks and work in progress at 1963 prices was £665 million, a balance of payment's position much sounder than it was made out to be. In 1968, against a current account deficit of £419 million, it was only £191 million at 1963 prices. Is there an explanation for that or any comfort? It is worrying.
  I am all for broadening the base of Purchase Tax as long as it lasts, but bringing in honsehold textiles and cloth at this moment is a mistake. The report of the Textile Council has just been published. Serious decisions have to be taken by the Government and the industry. To make this change at this moment is a psychological error. I shall vote against it. A matter of this sort ought to await the Government's long-term plans for the industry, and this change now is a mistake.
  I was thinking of making a long speech about S.E.T., but that does not now seem necessary. The Chief Secretary's defence this afternoon and what other hon. Members have said suggests that further talk about it is hardly necessary. I recommend the House to read again the speech of the hon. Member for Willesden, West (Mr. Pavitt) last Tuesday, the first day of the debate. He made a very effective and moving speech dealing with the position of the distributive trades. They are the cinderellas where wages are so low that anyone who could get a job in manufacturing industry would already have moved from distributive industry. I agree with what he said.
  It will mean that the increases will be passed on in the costs of the distribution of food. Distribution and marketing are an essential part of a proper industrial and trading system. To make the construction industries still liable to the tax is a nonsense. As for hotels, it will affect investment, modernisation and the growth of the industry, so important for the balance of payments. Those industries are doing well now, but they have to look to the future and that depends on investment and modernisation. The tax is full of anomalies and absurdities. I do not think it possible to draw a clear dividing line between services and manufacturing. If as is suggested this tax has a wonderful effect on productivity, why is it not applied to production everywhere? If this is the right medicine to create more productivity why does not

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  everyone have to take it? The passage in the speech of the Chief Secretary today dealing with this was an absurdity. To invite Professor Reddaway to conduct an examination into the tax, and then to put it up by 50 per cent. last September and again by 28 per cent. now was wrong. The sooner the tax goes the better. It is indefensible.
  On a slightly less controversial note, there is the question of a Select Committee on taxation. My general views about the proliferation of Select Committees have been expressed to the House. The Public Accounts Committee and the Estimates Committee do excellent work. The Select Committee on Nationalised Industries could do more, particularly in examining the accounts of those industries, if it were given the resources to do so. The Select Committee on Science and Technology has done a good job; but I am doubtful about having committees with roving commissions. I would have more of them small in number sitting on top of a particular Governmental discretion—for example, over investment grants. I have spoken about this before. Where a Government Department, like the Board of Trade over investment grants, is operating a discretion, it should have to report regularly to quite a small Select Committee. This would give us some control over the Executive.
  I also think that the case has been made out for a Select Committee on taxation. Two examples appear in this Budget. But first I want to be clear as to the limits that should be set to a committee's work. I am not in favour of a Select Committee to review the whole tax system. I do not think it would be the proper body to do so; the membership would not be right and it would not have the time or the staff to do it. I am not saying that it should be done now but if we are to have a committee or a commission to review the whole system it should be a Royal Commission, not a Select Committee of this House. I have a more limited rôle for such a committee in mind.
  These Budget proposals provide two very good examples of where a Select Committee could have done a good technical job. It must not be a political job. Take the question of interest not
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  being allowable against tax. I do not think the Chancellor has thought out the ramifications of this. It will create many administrative complications just when everyone is asking that the tax system should be simpler and more comprehensible. There will be many exemptions that will have to be made. What borrowings will rank as business expenses? We are told that a house would be an exemption, and I suppose that in some cases a car would be an exemption and equipment may be an exception. How does one prove it all? I suppose that if borrowings for a house were chargeable against tax, that borrowing would never be paid off. An endless series of niggling points will arise.
  Had evidence been taken by a Select Committee from the Treasury and Inland Revenue and the accountants' profession, something much more suitable could have been worked out. If the Government are to do this—and I am against it—there is only one sensible way of doing it, to say that it would be not deductible for Surtax. That would have been a simple thing. I am not in favour of it, but that would be a simple way of doing it; but the Government have chosen a most complicated way. If there had been a Select Committee on taxation the Government's ideas on this matter would have been smoked out beforehand.
  The other example concerns the slicing provisions of Estate Duty. I am told that these slicing provisions have some very considerable technical difficulties about them. That is just the sort of matter that should be gone into by a Select Committee. I do not see why we should not accept this. It is not a political matter but it is time to bring out into the open the kind of argument which goes on in the Treasury. It would be far better if a Select Committee were given that sort of job, to consider the technical implications of tax changes. It would be helpful to the Chancellor and reassuring to public opinion, whereas at present these inquiries go on behind closed doors in the Treasury.
  Mr. J. Grimond: I very much agree with the right hon. and learned Gentleman, but I should like him to clarify one point about his proposals. Does he mean that there should be a Select Committee to examine proposals after they have appeared in

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  the Budget, or that there should be a permanent Select Committee which would select certain areas of taxation to be examined? Who would choose what should be examined by the Committee?
  Mr. Selwyn Lloyd: It would be better if such proposals were examined before they made their appearance in the Budget or a Finance Bill. The kind of case I have in mind is something to which I referred in my first Budget speech, the amalgamation of Surtax and Income Tax into one personal tax. That could be done without harm to anyone.
  It would need a little bit of give and take between the Chancellor and the Treasury and the Select Committee as to what the Committee did and who chose the subjects. These things can be arranged. There are certain matters on which every Chancellor is anxious to get agreement. This might be a more practical way than as we have tried to do it up to now, in secret, confidentially. We might make progress on some of these matters if we could do it publicly.
  That is my view about the idea of a select committee on taxation. Having said all this, my basic criticism of the Budget is that, apart from one or two proposals I have mentioned, it does nothing to promote the creation of wealth. The hon. Member for Lewisham, West (Mr. Dickens) wrote an article the other day, which many of us read, about the distribution of wealth, about the wealth of this country being in too few hands. I entirely agree with his theme, but I completely disagree with his remedy. Any fool can destroy wealth; it is fairly easy to distribute it, to level down, as the hon. Member was suggesting; but it is very difficult to create it and level up.
  There is very little in this Budget to encourage that. There is very little to restore confidence. The whole idea of announcing pension benefits without announcing how they are to be paid for was, psychologically, very bad for the promotion of confidence. This Budget, however attractively, one might say speciously, presented, is irrelevant to the real needs of our time and damaging to our prospects of economic recovery.
  5.50 p.m.
  Mr. Joel Barnett: I must say that since I came into the House in 1964 and got to know
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  the right hon. and learned Member for Wirrall (Mr. Selwyn Lloyd) I have a much more cheerful view of him than I had, before coming here, from his period as Chancellor.
  The point which he made about a Select Committee on Taxation is one which, certainly in general, would be very interesting, and which I should support.
  But when he mentions some of his examples, we begin to see the difficulties involved. For example, I question whether we could be discussing loan interest publicly before the Budget. If it were known before it was actually announced in the Budget, there would be some difficulties. There could also be political difficulties in a Select Committee of that kind such as one does not get in, say, the Public Accounts Committee. However, the amalgamation of Income Tax and Surtax, for example, which I advocated to the Chancellor, is certainly something into which a Select Committee on Taxation could look.
  Another subject could be the recommendation made by my hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) for the abolition of earned income relief and instead having a lower, and the real, rate of tax for earned income. The hon. Member for Worthing (Mr. Higgins), in opening for the Opposition, was a little churlish on the question of the forecasts which the Chancellor has made this year and which are an extension of last year's forecasts. The Chancellor foresaw that he would be criticised for the forecasts. It is not difficult to make criticisms of them, but I hope that he will not be deterred from continuing along these lines.
  It is only too easy to be wrong with forecasts. There is an old joke about economists and what happens if one lays them end to end. We can say the same thing about political and economic journalists. If we laid their forecasts end to end we should not get a clear policy as to how the economy should be run. I hope, therefore, that my right hon. Friend will not be deterred from continuing what he has done in the past, and what he did to an even greater extent this year, in making these economic forecasts, even though he recognises, as any sensible person must, that there will inevitably be many variations when the actual figures are seen.

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  The Opposition are back one again, this year as ever, with their answer to our problems in their proposed cuts in public expenditure. It is really a dishonest playing with words, because the only result is to substitute higher prices for taxation. It should be clearly understood that that is what they are proposing. Nor do the Opposition's proposals deal with the argument which the hon. Member for Worthing went on to make that this Budget was again deflationary. I do not know how a switch from public expenditure—in other words, increasing prices instead of taxation—would have dealt with that aspect. He did not make it clear. We can only conclude that what he really had in mind was to continue the same sort of deflation putting the balance of payments as a first priority.
  I must mention the industrial relations problem which the Chancellor placed so high in his Budget speech. We were told in the past that the policy of the prices and incomes legislation was economically essential, when it was clearly obvious that it was anything but economically essential, and everyone knew that it could have, if anything, only a highly marginal effect upon our current economic situation. We are now told that the Industrial Relations Bill is economically essential. I believe that there is some little value in having a cooling-off period. But we are heading for disaster if we rely on this as a major part of economic policy.
  I hope that no one in the Government is deluding himself into believing that in the 12th months immediately following this Bill we are likely to have an enormous improvement in industrial relations. On the other hand, it is an equal delusion the other way. There have been some astonishing statements over the weekend by some trade unionists. I read of one trade union leader who said that this Bill
  "… was the most vicious and repressive legislation against trade unions."
  I find that statement rather astonishing. I hope and believe that there might be some deterrent effect in the legislation. It could have a limited value. In most cases, however, it simply will not be usable because, as the Donovan Commission pointed out, 95 per cent. of strikes are unofficial, and the average length is
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  2½ days. Clearly the opportunity to use the concilation pause will not apply.
  Where it is used, and it can have some value occasionally, it is possible for the trade unions, after 28 days, to go back and strike again. Then it will be used only against men acting unconstitutionally, against procedures agreed by the trade unions. To describe that as action against the trade unions which is "vicious and repressive" is crazy.
  Sir Douglas Glover: The hon. Member is always so careful in not trying to mislead the House. I think that he may have made a slip when he unwittingly said that the average length of unofficial strikes is 2½ days. In fact, the bulk are in hours and it means that the remainder are more than 2½ days, because the two have to be balanced.
  Mr. Barnett: One can juggle with the statistics, as the hon. Gentleman knows very well. I was referring to the Donovan Commission which specifically made this point, that the average length of unofficial strikes was 2½ days.
  I turn to the tax changes. It would be churlish of me if I did not thank my right hon. Friend the Chancellor for the relief he has given to close companies, something for which I have pressed him and his predecessor ever since April, 1965. He has gone further than many thought he would in relieving altogether directors' remuneration. It is only too little realised how great a concession this is and how useful it is to advisers, who do not have to go to the sort of lengths it has been necessary to go to avoid this particular piece of legislation. If I speak feelingly it is only because. I have been involved in those particular transactions.
  I turn to the question of loan interest. There will be an enormous number of anomalies once some loan interest is allowable and other loan interest is not. The Chancellor has made the further concession in respect of central heating which was announced by my right hon. Friend the Chief Secretary today. A much bigger loophole which will be found and which has already been found is the fact that loan interest is allowed for business purposes. Undoubtedly, some of these anomalies will be unfair in their incidence. I hope that the mind of my

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  right hon. Friend the Chancellor will not be closed in Committee when we discuss cutting out what may well be unfairness.
  I welcome many of the tax changes proposed in the Budget and particularly the move towards greater equity. Some of the tax avoidance schemes which my right hon. Friend has stopped clearly should have been stopped a long time ago. Many people in industry thought that they would have been stopped a long time ago. I have particularly in mind tax loss companies. The words which my right hon. Friend used in his Budget Statement were far from clear. Indeed, they were the reverse of clear. He said that when there was a change of trade and of shareholding the tax loss would not be carried forward. But that situation applies today. Indeed, if there is a change of trade, even if there is not a change of shareholders, the tax loss is not available to be carried forward. I assume that the point will be made much clearer in the Finance Bill.
  The movement towards equity and the proposals to stop loopholes and tax avoidance and to exempt from tax the 1,100,000 people at the lower end of the tax scale are absolutely right and I welcome them. This only shows what can be done by a Chancellor like my right hon. Friend, given growth in real resources.
  In the Budget, the Chancellor proposes to take £270 million out of the economy in increased taxation. It is true that that is not as deflationary as it might have been, particularly as £200 million of that was not as deflationary as increasing Purchase Tax because it has been said by the Chancellor that two-thirds of the Selective Employment Tax is not immediately passed on and that not all of the increase in Corporation Tax will be passed on. Therefore, in that sense, it is not as deflationary as it might have been.
  It is difficult to judge how deflationary this Budget is or what the deflationary effect is likely to be in the next 12 months. This is why I was sorry that the Chief Secretary, made it more difficult by not giving the details about the increase on the insurance stamp, and not referring to the total amount involved in the National Insurance contributions
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  in respect of pensions. Last Tuesday, the Chancellor referred to the £250 million which would be required in a full year. He also said:
  "… but substantial extra provision will have to be made on top of this, to take account … of the existing imbalance between income and expenditure of the main National Insurance Fund …"—[OFFICIAL REPORT, 15th April. 1969; Vol. 781, c. 1014.]
  He might have told us what that additional substantial amount would be because, in judging how much the deflationary effect is, it is important to know what the extra amount involved is and how, broadly, it is to be divided.
  One could understand the Chief Secretary to have said that the total amount was to be divided in precisely the same proportions as in the past between Government, employer and employee. I should be interested to know whether that is what he meant. But the amount of inflation in this Budget cannot be separated from the deflation which was in the Budget, even without any tax increases, with all the tax increases which have gone before and, just as important, with the effect which the Chancellor is hoping to have on the money supply. While it may seem a less painless way of bringing about deflation by using the money supply rather than increasing taxation, it is deflation for all that.
  My right hon. Friend said that, without his measures, he would have expected a 3½ per cent. growth in the economy which, with his measures, he expects to come down to about 2·9 per cent. In that sense, clearly there is deflation in this Budget. Further, as I have said, there is the additional deflation in the sense of all that has gone before and of what might be to come from the pension contribution increases and from what my right hon. Friend proposes to do concerning the money supply.
  Once again, the Chancellor has made his first priority the balance of payments. I am grateful that he has not again told us that he is going for a £500 million surplus this year, next year and for ever. He still says that he is going for a substantial—and again the word "substantial" is used—surplus, but at least I am thankful he did not say that he was aiming for this surplus for more than this year. I have the feeling—and I hope that I am right—that if he gets a little some

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  time, that will be enough. I shall be satisfied if that is his aim. The restriction of growth of real resources comes after years, 1968 apart, of deliberate restriction of growth which has resulted in a reduction in real resources to the extent of thousands of millions of pounds. Therefore, I do not go along with further restrictions.
  The Chancellor indulged in what might be called "name calling" of the alternatives which have been proposed to the strategy which the Government have pursued in recent years. He referred to "a siege economy". I do not know what sort of an economy we have been running over the last 20 years. I suppose that it could alternatively be said that we have had an "open economy", an "ideal economy", a "perfect economy". I should have thought that a better description was "a shackled economy." For the alternative I prefer the description "a growth economy." This is not a panacea, any more than the Chancellor's strategy and the strategy of the "shackled economy" is the deliberate creation of poverty. It is far from it. But the Government's strategy, which Governments have pursued for years, makes it certain that we in the Labour Party are unable to carry out all the policies which we are in politics to carry out—to increase social expenditure and to reduce the inequities in our society.
  I do not believe that a growth economy means that we need, for example, to sell the portfolio. Selling the portfolio does not have any effect on the current account and it does not particularly help in achieving extra growth. But it means that we need to rephase our debts, which is not impossible. I hope that this is what the Chancellor is discussing now and will discuss when he goes to Washington next week. We have about £1,500 million worth of debts due for repayment to the I.M.F. by the end of 1971. Surely it is not impossible to get a re-phasing of that on a more realistic basis. We should stop talking about nightmares of the massive debts around our necks when those debts are exceeded by our assets to the extent of nearly £2,000 million.
  Equally, import quotas are not needed at this time—although many of my hon.
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  Friends disagree with me about this—for a number of reasons. Administratively they are an enormous burden. Their effect on world trade can be seriously underestimated at a time when in many countries, not least in America, there is tremendous pressure for protectionism. This is a very difficult time for a major country, not in any financial sense, but in terms of trade, to clamp on import restrictions.
  In any event, my major reason is that we can keep import quotas for only a short period so one could obtain only a short-term improvement on current account, and we might not even get that, as there could be retaliation. This would be unnecessary, if we were to get, as I hope, a rephasing of the debts; we need not then go for the size of balance of payments that we have been talking about.
  Although I am against import quotas at this time, I found the speech of my right hon. Friend the President of the Board of Trade last week somewhat complacent, to say the least. To say that because other countries are importing more as a proportion of their gross national product than we are and that, therefore, our problem is not imports, but exports, is a difficult argument to follow. One could, I suppose, compare it to a shopkeeper who is buying goods for which he does not have enough money to pay, because his sales are too low, and he tells his creditors not to worry because he is continuing to buy in the hope that his sales will rise. That, I suppose, could be used as a fair analogy. But there comes a time when that shopkeeper has to buy less.
  For the reasons which I have given, I do not believe that for Britain that time is now, but I certainly do not rule it out for all time. If we do not get the requisite increase in exports and if we do not get an improvement over a long period, we certainly would have to consider the possibility of import quotas.
  If we do not need import quotas, we certainly need to stop inflating the deficits by allowing capital outflow in the case of portfolio investments that we have allowed on a massive scale to countries like South Africa and Australia. Of course, we need a current account surplus, but creditors do not mind where the money comes from to repay them. They would not mind too much if we did

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  not invest in Australia and used the money to repay them. It is, therefore, a little foolish, at a time like this, to continue allowing portfolio investment in countries like Australia and South Africa.
  As a first priority, therefore, our need is to get back to our original promises of a growth economy. To get that, I would prefer quotas, floating rate and devaluation. I would prefer anything to continuing a shackled economy of the sort that we have had for so many years. But I do not believe that we need any of those things now.
  For one thing, I believe that there is enough deflation in the economy to give us a surplus in 1969 of, perhaps, £200 million on current account. I am as likely as any of the other economic forecasters to be wrong and it may well turn out to be a deficit of £200 million on current account in 1969. With the size of assets to which I have referred, however, we need not have a neurosis about a further small deficit this year.
  I believe, therefore, that we must get away from the idea that as a first priority we have first, foremost and all the time to build up substantial balance of payments surpluses for years ahead. On one occasion, the Leader of the Opposition referred to a £700 million surplus for many years ahead to repay our debts. I do not believe that we need to have obsessions of that sort.
  Meanwhile, however, it would be a useful boost to our morale if we stopped talking in any way which left an impression of a bankrupt Britain. It is certainly anything but bankrupt when our assets exceed our liabilities by nearly £2,000 million, when our gross national product is in excess of £36,000 million and when our standard of living by comparison with most countries is very high.
  I know that this is difficult with an irresponsible Opposition and a Press which has an insatiable appetite for daily crises, but there is no need for us to feed that appetite. We should press on, and I hope that we will. There is at least an indication that the Chancellor of the Exchequer is getting away from the idea of a shackled economy and I hope that we can move forward to a growth economy which alone will give us the sort of resources that we on this side of the House need to carry out our policies.
  6.16 p.m.
  Mr. J. Enoch Powell: I have a good deal of sympathy with some of the concluding remarks of the hon. Member for Heywood and Royton (Mr. Barnett) about the balance of payments, although my sentiments do not carry me to the same conclusions as his. I also would like presently to take up what the hon. Member said somewhat earlier about economic and budgetary forecasting. But, although I am anxious not to detain the House for long, I must say two things about the extraordinary performance of the Chief Secretary at the end of his speech this afternoon.
  The Leader of the House, whatever may be his other faults, is never suspected of deliberately misleading the House. Last Thursday, there was no doubt about the impression which was left with hon. Members who heard him—that he expected that a statement giving the details of the pension proposals would be made before the close of this debate.
  The Leader of the House has been extremely ill-served by his Treasury colleagues in that they have not done what he then clearly expected they would do and thought that they should do. It was unworthy of the Chief Secretary to pretend that his denial of a statement in one sentence or two was the equivalent of the statement which the House had been expecting.
  My second observation is that it is not good enough to announce large prospective expenditure in a Budget Statement without any of the elements of that expenditure which are bound to fall directly on the Exchequer appearing in the Budget figures. There are at least three elements of Budget expenditure which are bound to follow from the announcement made as regards next November.
  The first element is the Exchequer contribution or quota towards the increased pensions; the second is the impact upon war pensions, which, under the Royal Warrant, invariably keep pace with the alteration in insurance pensions; and the third is supplementary benefits. All these, quite apart from the additional points, which, the hon. Member for Heywood and Royton reminded us, were mentioned by the Chancellor at c. 1014 of his speech, involve additional Exchequer expenditure of a substantial

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  character. To put it mildly, it was somewhat disingenuous, while making the announcement in the Budget speech, to present figures in which that expenditure was not contained.
  Before the Budget, and to a less degree since, but also in the Budget speech itself, there has been considerable emphasis upon savings. The term "savings" is, unhappily, an ambiguous one in a number of ways, but there was no doubt about the sense in which it was used by the Chancellor of the Exchequer in his Budget speech. Wherever the term occurred it clearly meant, whether explicitly or implicitly, savings lent to the Government; for it is only in that sense, as the Chancellor said, that one can say that £1 more in savings—that is, savings lent to the Government—permits £1 less, other things being equal, in taxation.
  It was for that reason, presumably, that the Chancellor of the Exchequer included in his Budget proposals his new scheme for the stimulation of one form of savings lent to the Government; that is, the form which, in rather obsolete fashion, I think, we still today describe as "national savings".
  "National savings", roughly speaking, mean the kind of savings lent to the Government of which the liquidity is extremely high but of which the total, in respect of any given saver, is fixed at a relatively low point. At any rate their prime characteristic, from the point of view of the Government as borrower, is their high degree of liquidity: if they are not available on demand, at any rate they are normally available at very short notice.
  The scheme which the Chancellor of the Exchequer embodied in his speech involves paying, for what he hopes will be additional national savings, an extremely high rate. Indeed, as he himself said, it will be the equivalent for a taxpayer at the standard rate of no less than 12 per cent. interest; and, of course, for contributors whose marginal rate of tax is higher than the standard rate, the rate of interest rises to almost astronomical proportions. Even if inflation at the rate of the last few years is taken into account, there is still an offer of 4 per cent. tax free in this bid for additional national savings. This is a direct cost
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  to the Exchequer. These are not just notional figures. When we say it will mean 12 per cent. interest in the case of a lender who is paying Income Tax at the standard rate, that is the actual cost to the Exchequer of getting this extra money—if it gets it at all.
  I believe that this is unwise, and for two reasons. I believe it is unwise because this is far too high a price wisely to be bid for the last outer margin of savings lent to the Government. The interest offered is far too high; but I would not mind that so much if I thought there to be a chance over the years of the Chancellor of the Exchequer by this means getting and retaining substantial additional savings from the public. However, I do not believe that prospect exists.
  There is in the last Bank of England Quarterly Bulletin a very grim graph of the story of National Savings during the last five years, from which delineation he who runs may read that, taking those five years as a whole, there has been a dis-borrowing by the Government of about £150 million and a corresponding dis-saving by national savers. In other words, after running very hard in the National Savings movement for the last five years, we are further back than we were before.
  I see no reason to suppose that this pattern is not going to be repeated; for the history of the last 15 to 20 years of National Savings goes to show that they are highly sensitive to tax and interest opportunity, that the holdings are switched very rapidly from one form to another, and, what is more, that they are highly sensitive to alternative opportunities of investment. When we talk about National Savings we are not now talking about small savings which are being built up and lent to the Government over long periods of time.
  Occasionally a new form of National Savings does sustain itself for a series of years; but it does so only at the expense of the other forms. From the same Bank of England Quarterly Bulletin one can see that, although the Premium Bond has stayed in surplus and has been pulling in additional money year by year throughout that period, that has been at the expense, if I may so express it, of the other forms of National Savings.
  In short, I do not believe it is wise or worth while for the Government to bid

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  at this exorbitant price for the last margin of savings. We shall only get lending by the public to the Government on a substantial scale again when the whole prospect for the future value of money, when the whole face of the economy itself, has been altered. Before that happens, it is idle to think that by the offer of a few per cent. here or a few per cent. there we can change what is one of the fundamental facts of our situation: that for years past the Government have been, in effect, unable to borrow net from the public.
  So much for savings in the sense of savings lent to the Government, the sense in which savings appeared in the Chancellor's speech. But in contemporary discussion savings frequently appear in a wider sense, and the view is often put forward that savings, or an increase in savings, even if not lent to the Government, may perform a similar function to an increase in savings lent to the Government. I believe that this is a misconception, and, perhaps, a dangerous one.
  Of course, from the point of view of the individual saver an increase in saving is for him an opportunity of consumption forgone; but the purchasing power which he abstains from using he transfers to a borrower or an investor who exerts it instead. Indeed, the only personal saving which results in a net reduction in demand is personal saving not offset by lending or by investment at all, and that is something very rare nowadays. One of the dangerous ambiguities of this word "saving" is that it has entirely different meanings as applied to the individual and to the economy at large. Applied to the individual it means the renunciation of the use of part of his current income. But when we ascend to the level of the economy as a whole, then the distinction between consumption and saving is really a classification of economic activities. We label different parts of the total pattern of activity in the economy as either consumption or saving—that is, investment. So when we ask the question, "Should there be more saving?"—or the even sillier question, "Is not saving a good thing?"—we are really asking whether the total pattern of activity in the economy is right or not.
  Now, there are, broadly, two views about how to ascertain the right pattern
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  of economic activity. They are the two views which, in a sense, are personified by the opposite sides of this House. One view is that the right pattern of economic activity in the community is that which the Government regard as right. The other view, which is held on this side of the House of course, is that the right pattern is the one freely chosen by everybody in the community using the price and market mechanism as freely as possible and with as little distortion as possible, so that if we were to strive for the best possible pattern of activity, for the right balance between saving and consumption, then, from the point of view of this side of the House, the way would not be by destroying but by using the mechanism of price and profit and introducing and encouraging the utmost degree of competition.
  The Chancellor in his Budget statement had a good deal to say about the pattern of activity in the community; and here I come to the remarks of the hon. Member for Heywood and Royton about the Budget forecast. Certainly the right hon. Gentleman the Chancellor of the Exchequer has been frank beyond precedent with the House at Budget time last year and again this year in his estimates of the effect which his Budget would have upon the pattern of the economy. He has been perfectly frank in Table 1 of the Budget Report in saying how wrong he was but I do not think he has drawn the right deductions from that declaration.
  I will not weary the House with all the figures—some of them have been referred to already—but on the key figures, the figures on which the Chancellor's Budget strategy of a year ago was founded, the right hon. Gentleman was not only wrong, but wrong to a large extent and often in the wrong direction. For example, he expected that consumers' expenditure would fall by 1·9 per cent.; it rose by 1·2 per cent. Public authorities' consumption he assumed would rise by 3 per cent.; it fell by 0·4 per cent. Exports, expected to be up by 13 per cent., were up by 18½ per cent. Imports, expected to be up by 0·6 per cent., were up by 7·9 per cent. Only the most blinded faith could imagine that there was any connection between the out-turn and the forecast, or that the decisions taken in the Budget last year

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  had any predictable or quantifiable effect upon the pattern of the economy which the out-turn figures reflect.
  What I am blaming the right hon. Gentleman for is not that he was wrong, not that he failed to do the impossible, but that he is attempting to frame a Budget and to control the economy with methods which simply do not connect, which have no predictable effect upon what actually happens; and there is no reason whatever why, when we see Table 1 next year, we should find any closer correlation than this year—which is none at all—between the Budget forecast and decisions and the out-turn. The right hon. Gentleman aspires to determine by his Budget decisions the pattern of economic activity, and to influence it in a very specific way—down to a few decimal points—by his Budgetary action. But he is not connecting: there is no relation between his intentions and method and the results which follow.
  It would be more understandable if the right hon. Gentleman were doing this in pursuit of his socialist philosophy. If he were seeking to bring about this economic pattern in order to implement the kind of national plan put forward by the right hon. Member for Belper (Mr. George Brown), then at least there would be some reason, some logic, in what he was trying to do. He would say: "The Government have drawn up a plan for the economy better than it would have worked out for itself by the processes of the market, and I will use the Budget amongst other methods to try to realise this pattern".
  But that is not what the right hon. Gentleman is doing. That is not why he is undertaking this absurd operation, this merely magical ceremony, of saying, "I do this and this in the Budget and the following things follow", when they do not follow at all. He is doing it for an even more improbable, even more fantastic, purpose. He is doing it in order to adapt the economy of this country so as precisely to produce a balance of payments in and out at a fixed rate of exchange. That is what he is trying to do. That is the consideration which dominates all his Budget strategy—the balance of payments. Indeed, I have understated the complexity, the absurdity
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  and the impracticability of what the right hon. Gentleman is trying to do. He is trying to manage the economy not even so as just to produce an overall balance at a fixed international price of sterling. He is trying to do it so as to produce an overall balance at a fixed price after certain specific inter-government transactions, which we describe as a surplus or a deficit on the balance of payments—that is, the £500 million surplus which featured last year and the "substantial surplus" which features this year.
  There are various available metaphors about attempting to fire at a moving target, but there is no firing at any moving target which is comparable in its impracticability to what the right hon. Gentleman is trying to do. In the first place, his trigger does not operate his weapon, as we see from Table 1 of the Budget Statement. There is no predictable relationship between what he does in the Budget and what happens in the economy. Much worse than that, there is no predictable relationship between what actually happens in the British economy and the experience of this country on the balance of payments. The economic experience of this country, as measured in these statistical terms, and the movement of the internal purchasing power of the pound sterling are only a couple amongst a whole series of factors all over the world, over none of the rest of which do we have any control, which ultimately produce the out-turn of the balance of payments of the United Kingdom at a fixed price of the pound sterling.
  So the right hon. Gentleman is in the position of a person endeavouring to steer a car the front wheels of which are not operated by his own steering wheel—or not in any predictable way—but are affected by the movement of the steering wheels of all the other cars in the town. That is what he is trying to do when he seeks to use the Budget to hit off an almost inconceivably precise balance between payments in and payments out at a fixed rate.
  I have already argued that we should be prepared to use price as a means of allowing the pattern of our domestic economy to work itself out. This is not a panacea. I too, like the hon. Member for Heywood and Royton, feel rather hurt at the name-calling in which the right hon. Gentleman indulged at the

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  expense of panaceas other than his own. The price system is not a panacea. It is not a panacea here at home: it does not make men good, wise, industrious, far-sighted or enterprising. But that does not mean it is not useful. It does enable them to regulate their affairs amongst themselves in a far more efficient way than the Government can control them. It does enable them to carry on their individual business, and to carry it on as a community, without constant interference and constant defeating of their expectations and intentions by Government. It does do that, even if that is not a panacea.
  Similarly, price is not a panacea when used to gear the economy and the price system of this country with the economy and price system of the outside world. It will not make this country suddenly more competitive. It will not make us more prone to invest or to export. We shall not suddenly become a different kind of nation. Yet it will produce the same benefits for us as at home. It will enable us to regulate our economic relations with the outside world as internally it enables us to regulate our relations with one another, without the constant intervention of the arbitrary power of the State budget by budget—three or four times a year under this Government—and in other aspects of policy almost continuously. That may not be a panacea; but it is rational policy.
  The right hon. Gentleman has disclosed—and it is a service which his candour has performed—how inadequate and inapt his methods are to produce the results which he expects of them. He is not the first to experience that. It is something with which we have been struggling, which has been hammering at national morale, self-confidence and pride, for years too many to be remembered. There are no panaceas; but there is a rational course of action particularly for a commercial and trading nation. It is to be unafraid to use price to regulate our internal affairs and to be unafraid to allow it to regulate our relations with the rest of the world.
  Mr. A. Woodburn: Before the right hon. Gentleman sits down, may I ask him one question? His argument is very interesting, but is this not a system which
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  was practised for nearly 100 years and which only worked to produce a series of booms and slumps, which eventually became almost a permanent slump? Is not the present system an endeavour to prevent that?
  Mr. Powell: The exact opposite is true. The system which we are using at the moment is that which is almost universally blamed, in part at least, for the slump of 1931. It is the much abused system which we applied from 1925 to 1931 and were then forced to abandon, as I hope we shall be again.
  6.42 p.m.
  Mr. Douglas Houghton: The right hon. Member for Wolverhampton, South-West (Mr. Powell) is a politician with whom one must be careful not to agree. I came within hailing distance of him once or twice, but on reflection, as he was speaking, I had to remember that this was only part of his philosophy. This is his economic thinking, and it is linked with his social thinking. I believe that the solution of our economic problems on his terms is not acceptable to right hon. and hon. Members on his side of the House, and it is certainly not acceptable on our side.
  The logical conclusion to which he was coming was a free market economy accompanied by a drastic change in social policy and leading, if need be, to unemployment. I think that we have to beware of his bewitching logic, which is fascinating to listen to but which covers a philosophy which some of us find abhorrent.
  I must acquit my right hon. Friend the Leader of the House of the persistent suggestion that either he misled the House last Thursday or has failed to fulfil a promise. What he said in reply to the Leader of the Opposition was, first:
  "Yes, I will do my best on this, and I will convey the strong views of many hon. Members on this matter."
  Pressed by the Leader of the Opposition to be specific, he went on:
  "I have said that I will convey the feelings of hon. Members. I cannot say at this stage, but I think that my right hon. Friend should make a statement."—[OFFICIAL REPORT, 17th April, 1969; Vol. 781, c. 1335.]
  We all know that the Leader of the House is not in command of statements by his right hon. Friends. He was doing

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  his best to assure the House of his own co-operation in the matter. The fact that my right hon. Friend the Chief Secretary made the statement that he did today is no reflection upon the integrity of the Leader of the House, whatever else one may think about it.
  Mr. Powell: I disclaimed most elaborately any intention of reflecting on the integrity of the Leader of the House. Indeed, I said that he had been ill-used by his Treasury colleagues. I think that he made his intention perfectly clear.
  Mr. Houghton: My right hon. Friend did his best in the circumstances. But the charge was made against him personally. I am not denying that there may be grounds for disappointment that my right hon. Friend the Chief Secretary was not able to give us the figures for contributions. It is an important missing link in our economic thinking.
  Mr. Peter Emery: Hear, hear.
  Mr. Houghton: However, I will leave it there, because I have a number of points to make and I want to delay the House for only a short time.
  I add only a sentence or two to the general congratulations which have been given to my right hon. Friend the Chancellor on the skill, perception and compassion of many of the proposals contained in his Budget Statement. Within the framework of the economic aim which he has set himself, he has done a great deal of which both sides of the House can approve.
  I want to refer to one or two disappointments. First, I am sorry that the Chancellor has not found it possible to go further this year with the scheme that he started last year on the link between family allowances and Income Tax child reliefs. My right hon. Friend the Chief Secretary referred with some satisfaction to what the Chancellor did last year on this matter, and that makes it all the more disappointing that the Chancellor has not been able to carry out the hope that he expressed last year of being able to carry the matter further this year.
  The House will remember what the Chancellor did. Family allowances were increased and, by a reduction in the
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  Income Tax child reliefs, the increase was reduced or entirely eliminated according to the income of the recipient, leaving poorer people with the whole increase and the much better off with no increase. The Chancellor called this "civilised selectivity" and referred to it as being a break-through. He said last year that he hoped to introduce full selectivity for family allowances in such a way that people who were not in real need of them need not draw them. He said in his Budget Statement last week that, for the reasons which he there gave, he felt unable to proceed further with the idea this year.
  One of the reasons was that it would lead to a disproportionate increase in taxation on some families with children compared with some families with fewer children or with no children. That is a matter which should be examined carefully. When I was a member of the Government, I worked on this a great deal. The proposal which I thought was perhaps the most dramatic and the most necessary was to get rid of Income Tax child reliefs altogether and increase the family allowance to 30s., including the first child.
  That would have struck a blow at child poverty the like of which we have not seen for 25 years. I regret the Chancellor's decision, expressed in the House last Tuesday, not to proceed further, because it means that we shall not have another blow struck against child poverty for some time to come. I hope that we may be able to pursue this matter further and look at some of the figures later.
  The second disappointment that I want to express is about married women's taxation. I am sorry that so far in this debate only one reference has been made to this matter, and that by the hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin). Study groups in both the major political parties have come round in favour of separate assessment of married women. I am disappointed that more notice has not been taken of that in the debate, and although I did not expect the Chancellor would be able to embark on that this year, it would have been very welcome if he had given some indication of his adherence to the principle of separate assessment, so that at least we should know where we are going.

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  It is time, since we are all working towards greater equality, that we relieved married women of some of the humiliations and injustices of the taxation system. We must do that in social security and in the taxation of women, who are required, to all intents and purposes by Income Tax law, to make a full disclosure of their assets and incomes to their husbands for inclusion on the husband's tax return. Women, if they are entitled to tax refund, find that it is made not to them but their husbands. If they take out a life assurance they find that the tax relief on the premiums is allowable to the husband. They have their own special personal disincentives to earning, because if their husbands are surtax payers they have to meet his grumbles that their earnings add to the penalties of his surtax. Separated wives find that a husband who has neither the custody of the children nor is supporting them can still claim tax relief for them. It is time to think of this change, to accept the principle and work towards it.
  If the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd) needs additional candidates for study by his suggested Select Committee on taxation there are two there, in addition to the amalgamation of Income Tax and Surtax and possibly the examination of an expenditure tax. Eventually we shall have to abolish Surtax and replace it, with all sorts of economic benefits, by a wealth and expenditure tax.
  I come to a further disappointment, over Purchase Tax. I represent a constituency which is suffering the blight caused by the rundown of the textile industry. It is what is called a grey area. We are looking forward with eager interest to the publication of the Hunt Report on Thursday, and the Government's announcement of action upon it. At this moment an unexpected blow is imposed upon the textile industry by putting bed linen, of all things, into the range of the lower rate of Purchase Tax.
  I would be the last person to suggest that the Chancellor could ever be guilty of sleight of hand, but the way that he told us about it on Budget Day was not fully understood. It was only when we saw the Red Book that we fully understood the full range of the Chancellor's proposed widening of the base of
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  Purchase Tax. I thought that paper serviettes and plastic cups and all sorts of things that did not matter to me were affected, but when it came to bed linen then I really felt very upset indeed. There must be more discussion on this matter.
  I turn now to savings. The right hon. Member for Wolverhampton, South-West has spoken of savings this afternoon, and I read a speech of his a little while ago about this. As to his suggestion that the Chancellor will pay much too high a price for this marginal advantage to his budgetary strategy, I would say that the limit is £10 a month under the scheme. Making a rough calculation, it seems that if all the surtax payers in the country entered this scheme the savings would amount to about £40 million a year, and the Chancellor is looking for a great deal more than that. He will not get it from surtax payers, who on the whole, notwithstanding the high rate of interest, will have something better to do with their money.
  We must welcome the scheme, as far as it goes. It has a repectable parentage. It was born a Liberal, the right hon. Member for Enfield, West (Mr. Iain Macleod) christened it, and the Chancellor has adopted it, and that should give it a good start in life. On many occasions, inside and outside Government, I have been protesting about the shabby way in which all Governments for the last 25 to 30 years have treated the unsophisticated investor. Not only governments but other institutions have been able to attract money from poorer people much more cheaply than they are entitled to, and they have exploited, if I may use that word, the savings habits of working-class folk, who attach primary importance to security and a secondary importance to being able to get their money out when they want it. My goodness, they have paid for those two considerations.
  Another factor which I regret is that many people, especially tax-exempt people recoil from having to claim refund of Income Tax. They want to go for tax-free interest or investments which pay their interest without deduction of tax. It is a pity that they should dislike the Inland Revenue so much, because if only they understood that they can get their refund promptly after receiving the interest, whenever they receive it, even if it is quarterly, they would not

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  be so reluctant to go for the higher yield on their money as they appear to be now.
  In the past the small investor has suffered from a low yield and the erosion of the value of his assets. The Chancellor's scheme will give such a high rate of interest that there is a margin, a narrow one perhaps, for the fall in the value of money, as well as for a modest rate of interest. If the £ keeps its value then the rate of interest will be the higher. If it does not, then to get compensation for the fall in the value of their asset they may suffer a reduction in the rate of interest.
  I am sorry that it has not been possible for the Government to include in the scheme an equity element. I was glad to see that the Financial Secretary, who knows more about money and investments than most people, said in his reply last week that this was not entirely ruled out. I hope further consideration may be given to that.
  The Financial Secretary to the Treasury (Mr. Harold Lever): I did not say that it was not entirely ruled out. I said that it was not permanently ruled out. That is a rather different matter.
  Mr. Houghton: I will tell the hon. Gentleman what he actually did say:
  "We devoted some thought to this, and we have by no means necessarily rejected the idea in perpetuity."
  Is that a promise? He went on:
  "I hope that nobody will infer from that that there is some immediate-choice equity scheme in prospect."—[OFFICIAL REPORT, 16th April, 1969; Vol. 781, c. 1272.]
  No, we had not suspected that.
  I do not give up hope so far as the Financial Secretary is concerned since he knows the subject so well. I succeeded him on the Council for Wider Share Ownership, and I am trying to fulfil there the mission which he went there to undertake. That is why I am pursuing the matter, because I am sure that it is in line with his own thoughts.
  I come finally to a tentative approach to the general strategy of the Budget. If I come between my hon. Friend the Member for Heywood and Royton (Mr. Barnett) and my hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon),
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  I can only say that perhaps I am a little relief from one instalment of financial erudition to another. I may be an economic square, perhaps like the right hon. Member for Wolverhampton, South-West, but I will offer a few brief observations on the matter.
  Taking money out of the economy seems to have become one of the principal means of controlling consumer demand. Yet it never seems to succeed. This is not original thought; it has been expressed more than once in this debate. On paper, the amount taken out of the economy during the last five years has been simply enormous. Yet we still have to go on doing it.
  Last year the Chancellor estimated that he had clobbered consumption enough to reduce it by roughly 2 per cent. but found at the end of the day that it had gone up by 1 per cent. Now consumer spending must take another knock. Or will it? Certainly, people are mystified about this matter. They know that these extra taxes are not needed to finance increased Government expenditure. The Chancellor is taxing not for revenue but to check the rise in personal spending.
  The big question is how far these taxation measures achieve that purpose. If we say that this Budget is painless, we surely are suggesting that it will not succeed. Any measure which is taking money out of the economy with effect must be felt. Chancellors of the Exchequer who are after money will go where the money is. Chancellors of the Exchequer who are after restraint of consumer spending must go where the spending is. I am afraid that that means the great mass of the people.
  What seems to happen—I say this in all innocence—is that when money is taken out of the economy all the forces we know of get to work to put it back again. We have mass advertising stimulating consumer demand in the most seductive form, never known before the television age. We have hire purchase on an unprecedented scale. We have credit schemes, credit cards, discounts—most of them fictitious—all stimulants and aids to demand which work against the Chancellor's economic aims. The now discredited prices and incomes policy is needed more than ever. But at the moment we need it most it is to be partially dismantled. It is far more

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  essential than anything contained in the White paper, "In Place of Strife".
  Do I take too gloomy a view in thinking that what is being taken out of the economy this time will be more than put back by increased incomes, increased beyond the anticipated rate of economic growth? Has this Budget ritual of taking money out of the economy succeeded in the past, and has it to continue year by year?
  The Financial Secretary said the other day that there were noticeable signs of success, but they are not all that obvious. The pity is that the economic measures which are being taken have to go under the name of taxation. People regard taxation as an imposition, as something which they should resent, as something which should be reduced. "Taxation is too high", they say. Look at the idiocy behind the stickers on some cars, "Cut Motor Taxes". This is a resentment against taxation. Yet what the Chancellor is doing is to introduce anti-inflation levies. He is seeking to protect the value of the pound.
  Some of the insinuating phrases with which taxation is introduced only add to people's confusion about their purpose. Take S.E.T.: if this is not intended to increase prices, what is it for? Are not Purchase Tax increases intended to be passed on? We do not reduce personal spending by expecting the shopkeepers to absorb increased taxation.
  We ought to be honest about this. Extra taxation at present is intended to discourage spending; it is intended to hit spending. The way to avoid this kind of taxation is by not spending. In that sense, this kind of taxation is optional. The Chancellor of the Exchequer quite rightly has left the pay packet alone. To take money out of the pay packet is ruthless and arbitrary, leaving no room for manoeuvre.
  I end by saying that some of the speeches which have been made by right hon. and hon. Gentlemen opposite not only are economic nonsense in present circumstances, but have dangerous political implications. I am glad the right hon. Member for Enfield, West is here. I listened to his television broadcast. In the present crisis of Parliament and of our institutions it is reckless for any politician now to make promises
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  which he will not be able to fulfil—[HON. MEMBERS: "Oh."]—or, if he does, at a price to the country which it would be unreasonable to ask them to pay.
  We know that in the present situation it is economic nonsense to reduce taxation to release more consumer spending. If the right hon. Gentleman does not intend to do it that way, he intends to do it the way suggested by my hon. Friend the Member foor Heywood and Royston by removing the support to prices by allowing prices to rise and thereby reducing taxation, on the one hand, and, on the other hand, extending an insidious form of indirect taxation.
  I think that right hon. and hon. Gentlemen opposite should beware of where they may be going, because in certain circumstances, which I hope will never occur—and I should deeply deplore them if they did—the Leader of the Opposition, if he ever becomes Prime Minister, may be the last Prime Minister to preside over Parliament as we understand it today. Dissillusionment with Parliament and with politicians is widespread today, and I think that it is the deep responsibility of both Ministers and the Opposition to do nothing that will add to that feeling throughout the country; otherwise the whole institution of Parliament and Parliamentary democracy may be put in peril.
  7.10 p.m.
  Mr. Michael Noble: Mr. Speaker, you asked us at the beginning of the debate to be as brief as we could, and I shall try to be just that. I shall not follow the right hon. Member for Sowerby (Mr. Houghton), except to remind him of what he said about politicians who made promises. If there is one thing which has brought discredit on the whole House it is the profligate way in which the right hon. Gentleman and his party have made promises which they have been totally unable to keep.
  The main theme of my speech relates to Scotland. I know that the Budget is a very important subject. I am glad that it affects the whole of the United Kingdom, and I hope that it may continue to do so, but in moments of crisis in Britain, particularly when there is a balance of payments problem, Scotland has an extremely important part to play because she has traditionally, and for a long time, exported a great deal more of the goods

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  that she produces than any other part of the United Kingdom. On the other hand, in the modern context it is possible for Scotland to play a very large part in import substitution because she has a great deal of land which can be used, profitably and effectively for producing more agricultural produce, and more timber, and from the seas around her shores more fish.
  But if we are to achieve that the Budget must have some sort of message for us, because what we need, inevitably, is the power to expand so that we can produce more and export more. Because we are an outlying part of the country, we need above all cheap transport, and perhaps the other single thing that we need most is a supply of new houses.
  In this Budget the message has, to say the least, been extremely blurred. The Chancellor paid lip-service to import substitution as an important part of what he is trying to achieve in his balance of payments, but only a week or two before he had obviously played a leading part in denying the necessary support for the farming community to do what it believed could be done and what the "Little Neddy" said it could do in this regard.
  The Chancellor pays lip-service to the need for more exports, but if the extra 2½ per cent. Corporation Tax has done anything it has made certain that the cash flow of companies will be greatly reduced. If, in this regard, it is possible for companies to expand, certainly they must expand more slowly than before.
  I listened with interest and amusement to parts of the speech of the Chief Secretary. He implied, as I understood him at the time, that in some curious way S.E.T. was meant to bring more competitive features into the service industries but that manufacturing industries did not need any more competition amongst them. The whole purpose, surely, of the export drive is that our manufacturing industries should be more competitive, particularly at a time when the first results of devaluation are beginning to work off, as my hon. Friend the Member for Worthing (Mr. Higgins) so clearly said in his excellent speech. There is nothing in this Budget to help manufacturing industry in Scotland, or in any part of the United Kingdom, to expand, to be more
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  competitive, or to achieve anything extra in import substitution. As everybody in the House, I think, realises how fatuous S.E.T. is in this or in any other field, perhaps I can skip quietly away from that.
  When we come to the question of saving money, the Chief Secretary again said how important this was, but perhaps I might quote to the House one small example from my constituency because it obviously ties in with the belief which the right hon. Gentleman holds that the Government do things for people much better and more effectively than anyone else.
  Two systems of transport to the Islands are being discussed and debated at the moment. The one financed by the Government and costing at least an extra £1 million of taxpayers' money is being supported against private enterprise which can provide a perfectly adequate service at much lower cost. The Government favoured the first because it was a nationalised industry. A few months ago the county council turned it down. Last week there was the usual battery of veiled threats from the Scottish Office—the Chief Secretary knows all about this because I have written to him on several occasions about it—and the county council has to reverse its decision, because if it does not, and if it does not waste £1 million of taxpayers' and ratepayers' money, it may have to find some small amount of rates out of its own pocket. The Government are not trying to save money. They are deliberately wasting it as long as the waste goes to some purpose of which they approve.
  Listening to the Chancellor of the Exchequer and to the Chief Secretary I am reminded of an occasion a number of years ago when a rather good-looking young lady was in considerable difficulty at Queen Street Station in Glasgow, She asked me for my help because, she said, she could not understand a word that the porter said to her. Her face dropped a little when I said, "Yes, but, you see, he cannot understand a word that you say, either." I find myself in that position with the Treasury Bench at the moment. I do not understand what they are trying to tell us in this Budget. I do not believe that anybody else in Scotland or in Britain or indeed in the rest

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  of the world understands what they are trying to tell us, either.
  The Chief Secretary said that when a new tax was introduced, first people were stunned, then there followed a period of incomprehension and finally there was grumbling acceptance. In the case of this Budget, as in the case of this Government, the country has got beyond the stage of grumbling acceptance. We grumble perhaps, but we no longer accept or believe.
  7.18 p.m.
  Mr. Robert Sheldon: I feel that I ought to reply to the right hon. Member for Wolverhampton, South-West (Mr. Powell), who introduced very much of his economic philosophy. Although I cannot deal with much of his speech, I feel that I ought to deal with the central point of it.
  The right hon. Gentleman described in glowing terms the rôle of the price mechanism. That the price mechanism has a part to play in Britain today is obvious. In the market square at Ashton-under-Lyne one sees very nearly perfect competition producing a beneficial result, which not only the right hon. Gentleman but I, too, wish to see. The trouble with the right hon. Gentleman is that he does not know where to draw the line, because, although price mechanism is suitable in certain cases, it is not suitable in every case.
  It is obviously not suitable in the shipbuilding industry, as the right hon. Member for Argyll (Mr. Noble), with all the shipbuilding that goes on in Scotland must accept. It is not acceptable in the computer industry, because we should not have a computer industry and we should lose our stake in this industry if the right hon. Gentleman tried to make his philosophy fit the existing situation. What about agriculture, and what about hon. Gentlemen opposite with their agricultural interests? Does the price mechanism fit the agricultural community as a whole? The answer is, "No". One has to draw the line somewhere.
  One has to bear in mind that there are two factors involved, not just the one pure philosophy which the right hon. Gentleman strives to enunciate very ably but very misguidedly. There is a price mechanism and it is important to understand it, but there are also the longer-term
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  interests of many industries which are, by the nature of their existence, largely monopolies or else in need of some sort of assistance in the interests of the State as a whole.
  I liked the small print of the Budget better than the large. I like the smaller measures better than the strategy. I am pleased that my right hon. Friend has finally accepted the view expressed by myself and many others that close company provisions should be improved and, in particular, that the limitation on directors' remuneration should be removed.
  I regret that the hon. Member for Worthing (Mr. Higgins) adopted such a tone today in referring to forecasts by the Chancellor. He and I, among others, pressed for these forecasts. He will recall the great pressure we all put on my right hon. Friend. My right hon. Friend was very brave, considering the risk he was taking, in agreeing to make known his forecasts and thus giving opportunities later on to compare forecast with achievement. It would be foolish if we did not continue to congratulate him on this new step and also on the new kind of Financial Statement that we have. Those of us who take these matters seriously should not allow ourselves to bring this kind of discussion into the party arena because we are fouling our own nests once we start doing that. We should be grateful for the financial forecasts, although I agree that we should try to extend them. I merely remind the hon. Gentleman that my right hon. Friend is the first Chancellor to give this sort of statement.
  I was pleased to see the Estate Duty being changed from slab to slice, and there are other provisions I was pleased to welcome. But it is the strategy behind the Budget with which we should be concerned in this debate. These other matters can be left for discussion on the Finance Bill.
  I am somewhat unhappy about the strategy of the Budget. I think that the change which has come over this country is still not fully understood and that, because of the lack of comprehension of that change, our measures have been inadequate by comparison. I believe that the main problem created for Britain has been fundamentally, economically and politically the loss of our Empire. This

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  has had enormous economic repercussions which we have always under-estimated.
  The Empire was a source of very great wealth to us, and we still do not understand the changes which are necessary following the end of the Empire. I would put the economic decline at round about 1960, when we gave up control of some of our most lucrative colonies. We have not been able to recover the loss of exports to those markets by increases elsewhere. During the inter-war years and in the 1950s we sent over 40 per cent. of our exports to the Commonwealth and last year only 27 per cent. This is a massive change, and we have not yet been able to overcome the disadvantages which came to us with the end of the Empire. Politically, the reasons for the end of the Empire were right but economically the situation has caused us great difficulty.
  At the same time that the advantages of Empire declined so rapidly the cost of maintaining it went up enormously. In the inter-war years Government expenditure overseas was less than £3 million a year and last year it was between £460 million and £470 million. As the benefit of Empire declined sharply, so the cost of maintaining the Empire, in which a very large element of Government expenditure was for defence, rose alarmingly.
  These two factors were of very great importance, and so fundamental changes were required, but despite all the efforts of successive Chancellors of the Exchequer from both parties, those changes have not been adequate. We have thus had the general economic philosophy of the 1960s that deflation succeeds deflation. That has been the catalogue of economic prescription throughout the 1960s. The pattern of the present Budget is the same.
  Given the present strategy, one can even argue that deflation might not be enough, that the Chancellor might be taking a very great risk because he may not have restrained consumption enough and that we might see it rising again and dispelling the forecasts that he has been working on. On the other hand, there is danger of over-deflation. What I object to is that the strategy is limited far too tightly. We should be concerned
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  with looking for other policies in order to get away from the tightrope which Chancellors of the Exchequer have had to tread so warily. In his Budget Statement my right hon. Friend said:
  "It is always attractive to believe that some method which has not been tried will be the panacea. … The hard truth is that there is no painless cure to a stubborn balance of payments deficit. All the other courses urged upon me, apart from their other disadvantages, have one thing in common. They would all be almost certain to worsen our balance of payments over the crucial next six months."—[OFFICIAL REPORT, 15th April, 1969; Vol. 781, c. 1003.]
  My right hon. Friend dismissed the alternatives. That was the same day on which we had very bad trade figures. Although he pointed out that exports were most important, he failed to point out also that no one can control the level of our exports. The measures which the Government have taken for exports, although valuable, have been marginal at best. But we can take direct control over imports. If we imposed import quotas, we could save £400 million in imports. This is something that we can do. For the last seven years, ever since 1962, we have been proceeding on an inadequate economic policy. Import quotas would provide certainty where certainty has been lacking for so long, and that is a very strong argument for them. The injection into the economy of £400 million could produce between 100,000 and 160,000 jobs, greatly reducing the level of unemployment.
  One of the worst features of deflation to me as a Socialist is that it increases inequality. The well-to-do can take care of themselves. They can withdraw their savings and maintain their standard of living that way or they can take an average view over the years ahead reducing the increase in their savings and so maintain existing commitments. They have a cushion. When a Chancellor seeks to cut consumption he really means consumption here and now, and the only people who can give him that cut here and now are those who live from week to week. If one takes away their money in one week, they cannot spend it because they have not got it. So, when we go for the deflation, we are going for those people with the least money.
  The Financial Times 500 share index appreciated between October, 1964, and

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  October, 1968, by 52 per cent. Even after paying Capital Gains Tax at the highest rate of 30 per cent.—for many it will be lower—those concerned will have increased their investment by 37 per cent. Over the same period, average wages rose 28 per cent. and the retirement pension rose 33 per cent. So there is no question but that what we do by constant deflation is increase certain elements of inequality.
  There are advantages in import quotas. This is not a panacea—there is no panacea—but there are choices between unpleasant paths. No one can say that deflation is the solution which we should always pick. The commitment which we have maintained historically towards widening the bounds of trade is magnificent, but we do not occupy the same position as we did in the nineteenth century, when we were the cornerstone of world trade. Our share today is about 7½ per cent. Germany exports £9,000 million a year and we export £5,800 million. Retaliation, which would have been very marked years ago, is likely to be much less marked, because the importance of our rôle has changed, but the Board of Trade has not taken that change into account. Although we imposed the import surcharge, contrary to G.A.T.T., quotas are within the rules of G.A.T.T.
  So we are bounded by various restrictions which have kept our growth to 2·9 per cent. We are restricting our growth every year by deflation. I believe that we get increases in productivity not by cajoling or trying to fool workers but by increasing production, because the faster that that can be done the faster we can increase productivity as well. It is with the new ideas and new machinery for greater production that the productivity increase comes. The new machinery is more efficient and people are more willing to accept changes in their manner of working.
  It is said that this figure of 2·9 per cent., which is supposed to reflect the underlying growth of productivity, represents the underlying changes in goods manufactured and so is the ultimate reality. This means that we are inferior to Germany, Japan and the United States, all of which have much higher rates of growth—and that is something which I do not believe and which none of us should be prepared to believe. It has
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  to be proved well beyond the hilt before we accept that sort of rôle.
  If we believe that we should not accept this, we are forced to look for alternatives. There are no panaceas, but there are alternatives. There are risks in some of them, but, rather than just drearily going on year after year with the tourniquet, until we are throttled, the only medical apparatus which the Treasury seems to understand, I prefer to bring about some changes.
  I turn now to the industrial reform aspect of the Budget. In column 992 the Chancellor said:
  "Our competitive position has been damaged by irresponsible industrial action, and 1968 was a particularly bad year for unofficial strikes."
  That was almost at the beginning of his speech, and, announced in this way, it placed very firmly in the context of the Budget the importance which has been attributed to strikes.
  Yet when one considers the French devaluation, one of the most successful devaluations of any major country in recent years, one sees that in the following year they had a much larger number of strikes than in the year before devaluation or in the succeeding year. We, last year, had a loss of working days of less than 0·1 per cent. I accept that the effect on management of highly organised industries can be very bad and can produce great problems, so that it does not reflect the whole picture, but it reflects an important part.
  What we must find out are the reasons which impel the Government to bring in this measure at this time. One can say that, although the figure is only 0·1 per cent., there are clear advantages in doing what one can once a problem is recognised, but, in the light of the uproar and trouble and potential industrial unrest, what we must do is measure the economic gain against the possible economic loss. Did the Front Bench even consider weighing, in this decision, the economic benefits to be obtained against the economic disadvantages? Also in his Budget speech, my right hon. Friend said, as I have already quoted:
  "All the other courses urged upon me, apart from their other disadvantages, have one thing in common. They would all be almost certain to worsen our balance of payments over the crucial next six months."—[OFFICIAL REPORT, 15th April, 1969; Vol. 781, c. 992, 1003.]

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  Is it thought that industrial legislation will produce good results over the next six months? Of course it will worsen them; yet the performance of any solution over the next six months was my right hon. Friend's main criteria.
  My hon. Friend the Member for Ashfield (Mr. Marquand) made a useful comparison between the incomes policy and industrial legislation. So much hope was placed on a policy from which very little was obtained. In July, 1966, I estimated that the incomes policy might at best give between 0·5 and 1 per cent. I was too optimistic, because in the long term it gave us less. It can be argued that since the incomes policy led to strikes, the strikes led to this legislation, and this may in itself lead to more strikes, it could well have been a negative factor.
  The great problem about the industrial legislation, as with the incomes policy, was that we had a long-term plan. That was first class, but because of our problems we tried to press it into service to serve short-term ends. Used in this way, it cannot deliver the goods, and it is a farce to think that it ever can. A statutory policy was unwisely introduced. It led to strikes, which led to excuses for the trade union legislation, which may yet lead to more strikes.
  Given my right hon. Friend's strategy, one can call this an ingenious, clever Budget. There are some useful measures in it, but I quarrel with its basic strategy. Once again, we have it wrong, as the Tories had it wrong since 1962. There have been profound economic changes, and we have not responded. I am sorry that we have missed yet another opportunity.
  7.39 p.m.
  Mr. Edward du Cann: The hon. Member for Ashton-under-Lyne (Mr. Sheldon) damned the Budget with faint praise. That seems to be the habit on the Government benches—in a Freudian slip I almost called them the Opposition benches. I shall not take up what the hon. Gentleman said about industrial relations. There will be another opportunity to debate that subject.
  I can, however, support at once the hon. Gentleman's comment, which my hon. Friend the Member for Worthing
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  (Mr. Higgins) also made in his excellent opening speech, that there are some matters in the Budget with which we can all agree, and so we do. The hon. Gentleman mentioned some. I shall mention others, and perhaps complement a little what he said.
  First, there is to be an increase in pensions, though how absurd it is that the figures for the increase should be known while the rates of contribution should not, and that we know nothing about war pensions, supplementary benefits and the like. I foresee a storm of protest and irritation from my constituency, and I imagine that other right hon. and hon. Members foresee the same.
  There is a reduction in the number of direct taxpayers by 1·1 million. I remember, as will my hon. Friend the Member for Farnham (Mr. Maurice Macmillan), who succeeded me as Economic Secretary to the Treasury, taking out over one million taxpayers in the Budget of 1963. But he will also remember, as many on this side of the House do, that the number of direct taxpayers is still very much higher than it was in those years. It can well do with further reductions.
  I even welcome the widening of the Purchase Tax net, though not the tactlessness with which it has been done, nor the height of the consolidated rates, something that the right hon. Member for Sowerby (Mr. Houghton) pointed out.
  I welcome, too, the Financial Statement and Budget Report, as did the hon. Member for Ashton-under-Lyne and my right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell). Though he pointed out how bad the Chancellor has been at hitting his targets, I do not think that that is a reason for not publishing economic forecasts.
  There are other matters in the Budget to which one can give a qualified welcome. There are the betterment levy change—but what a curious conceit it is that Ministers take credit for the rectification of their own mistakes—and the Save-As-You-Earn scheme, which I most warmly welcome. I hope that it will lead to a substantial widening of the savings habit, for it is a tragedy, as the right hon. Member for Sowerby with his unrivalled knowledge of social services and the like will be aware, that the number on National Assistance has, I

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  think, more than doubled over the past 10 years. That tendency requires urgently to be reversed. My right hon. Friend the Member for Wolverhampton, South-West pointed out that such a scheme is costly and that there will be some switching. I do not deny that, any more than that National Savings is too often a haven for Surtax payers. But anything which encourages the savings habit must be good.
  However, surely what is wanted is not simply more tax reliefs but rather a rationalisation and simplification of those which already exist in the savings sphere. Perhaps I may mention unit trusts in particular. My connections with the movement, being chairman of a company which I established some years ago, are well enough known. Why the Chancellor cannot accede to the very simple requests which would have the effect of simplifying the tasks of the Inland Revenue, besides making life easier for the investors, I do not know. The need for simplification is great, and it would be easy for the Chancellor to simplify so many matters in relation to savings media.
  But even more do we require a reduction in direct taxation. Promises such as that from the Chancellor are simply not enough. Again taking up what the right hon. Member for Sowerby said, I think that perhaps we have had too many promises already from these discredited Ministers.
  I do not see why the Chancellor should make such a song and dance about the need, as he sees it, to disallow interest charges for tax relief. It is wrong to suggest that all borrowing is wrong. Some borrowing comes very much in the category of saving and is meritorious. I hope that the Chancellor will announce tonight that he will keep an open mind on this subject in Committee on the Finance Bill.
  But it is not, perhaps, these individual matters that we should be discussing so much as the Budget judgment, a phrase which has recurred time and again during today's debate and in the past two or three days. In my view, the Budget judgment on this occasion is blunt and clumsy. Oh, yes—the Budget is clever and ingenious. It is apparently popular, yet it contains a return to financial orthodoxy, as the Budget arithmetic shows. Anyone who had prophesied this five years ago would have been thought to
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  be stark, staring mad, though, as we know, the reward of a prophet is usually either death or exile.
  The Chief Secretary this afternoon accused this side of the House of being interested solely in the reduction of Government expenditure. I assure him—or rather the Minister of State, who is here as his substitute—that that is not so. We are not simply interested in bringing the figures down in absolute terms. What we are becoming interested in, fanatically perhaps, and I believe correctly, is seeing that the taxpayer gets very much better value for money. He certainly does not obtain that at present.
  It may well be that, as the hon. Member for Heywood and Royton (Mr. Barnett) said, we shall now find the re-phasing of the I.M.F. debts much easier, and it may also well be that the repayment of the Central Bank swaps, about which we have heard very much less recently, but which will become a necessity before the year is out, may similarly become easier.
  But to me this year's Budget smacks much too much of expediency. As the right hon. Member for Sunderland, North (Mr. Willey) suggested, and as my right hon. Friend the Member for Stafford and Stone (Mr. Hugh Fraser) said two days ago, it runs too many risks. I wonder whether it will be so popular when prices rise, when they are seen to rise and, more particularly, when they are felt to rise. By how much will they rise this year? They rose by over 6 per cent. last year and I suspect that they will rise by over 5 per cent. this year.
  We run a very grave risk. The right hon. Member for Sowerby talked about the cheating done in the savings field—the playing on the patriotism and good feelings of little, honourable people. How true that is! In the present context of a steadily rising—oh! too bitterly rising—cost of living, we can be on the verge of a flight from money that has most serious implications for us all.
  Or will the Budget be so popular when the realities of the British economic situation are more clearly seen and felt? What is its relevance to them?
  Its effect on the trade figures would seem to me likely to be minimal, in so far as it is given to any of us to foresee the future.

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  My right hon. Friends the Leader of the Opposition, the Member for Enfield, West (Mr. Iain Macleod) and the Member for Leeds, North-East (Sir K. Joseph) and others have all expressed the shock that many of us felt when we saw the trade figures for March. The rolling averages, too, are bad. I shall not weary the House with the detail of the figures, but, as was said by the hon. Member—not for Ashton-under-Lyne, but the other heavenly twin, the hon. Member for Heywood and Royton—the speech of the President of the Board of Trade in this context was almost insufferably conceited. "Of course", he said somewhat pompously, "devaluation takes a bit of time to work through". I wonder how he would get on as manager of a football team that had been badly beaten in, say, the World Cup who then said that he needed more time to get ready.
  The trouble, and the truth, is that we do not have time to get ready. We have no time at all. As succeeding speakers have pointed out, too much time has already been wasted. The export averages show a plateau. The import level shows a slight growth trend. The same is true of the trade deficit. Ever since devaluation the United Kingdom has had substantial and significant advantages. Yet imports rose and continue to rise, in spite of devaluation and in spite of the import deposit scheme. As my right hon. Friend the Member for Argyll (Mr. Noble) pointed out, with the possible minimal exception of increased wine duty, there is nothing in the Budget to encourage import substitution.
  It is true that, again, we had a great catalogue from the President of the Board of Trade of the aluminium smelters, and the like, but how irrelevant to import substitution were some of the things he boasted had been done. What about agriculture? What about tourism? To return to my simple, ordinary analogy; what is the point of the manager of the team in what is bound to be a fierce, difficult, hard and competitive international match deliberately fielding his own side with two men short? There is no sense in it at all.
  Exports are rising insufficiently quickly in spite of devaluation, and in spite of the high level of world trade which, I must remind the Government, has been
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  very much higher than was expected. Exports depend, in the main, on the private sector: this is hardly a pro-private sector Budget, any more than it is an incentive Budget to individuals or managers on the shop floor.
  It is true that corporate profits have risen, although the rise is now tailing off, but this increase in Corporation Tax is bound to damp down investment. How ironic it is to recall the debates when this tax was originally introduced. We were then told that the real reason for the divorce between company tax and personal tax was to encourage greater retentions but, as the scene changes, the arguments change again to suit the doctrine of expediency.
  Added to the rise in Corporation Tax is the increase in the employers' National Insurance contributions. Then add the Selective Employment Tax. In his extraordinary catalogue of the theoretical advantages of S.E.T., the Chief Secretary left out the most important of its disadvantages, which is that, unlike a value-added tax, in relation to exports it is non-refundable. But there is very much more to it than that. What an impertinence it is on the part of the Government to say, as it were, that all manufacturing industry is good and that all other industry is bad. What an absurdity that is in these modern days.
  All these things added together, and other, perhaps, more minor tax increases—increased petrol duty, and the rest—mean that industrial costs must rise by a fair margin in 1969. For of these tax increases two-thirds fall on business and will hit investment and exports every bit as much as they will hit domestic consumption.
  So there it is. There is nothing to encourage import substitution, and nothing to encourage business and industry—the private sector on which the country's prosperity most chiefly depends.
  One cannot readily or easily evaluate the extent, but one can argue without any fear of contradiction that the Budget handicaps British industry in the job it is trying to do, and that is my chief complaint. In addition, at a time when the British share of world markets for manufactured goods is declining further, by volume, as it did in 1968, our competitiveness reduces. It may not reduce by so much as

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  the 7 per cent. price advantage that devaluation gave us, but it is monstrous that any of this reduction in competitiveness should be at the option of and, indeed, be the direct responsibility of Government.
  The domestic economic outlook for 1969–70 is hardly encouraging. As we know, precise targets for balance of payments surplus have been abandoned. It is right to say that no one can control exports, and how particularly true that is now, for there is a great question mark about the extent to which world trade will grow this year and next, if at all.
  Having paid the Treasury a compliment, I have no hesitation in saying that I believe that its assessment is wholly wrong, especially having regard to the restrictive atmosphere now prevailing in the United States and France of which the rise in interest rates throughout the world is a clear symptom. I hope with all my heart that the visit of the Chancellor of the Exchequer to the United States will be infinitely more successful than were his predecessor's discussions with other Finance Ministers in holding down interest rates.
  Nor is that the only question. At the end of this year the import deposit scheme will end, and we know not what the Government's attitude is in relation to that. The end of the scheme is sure to be followed by a spurt in imports, and wage costs are bound to rise substantially in the course of the next 24 months. Having regard to the uncertainties that exist, having regard to the Deutschemark, the franc, and so on, I regret having to say that financial alarms and excursions this year are an absolute certainty.
  There is no easy way; no panacea. We have heard those words, too. The Chancellor of the Exchequer should certaintly know, because it is he who has been responsible, not only for the sale of the dollar portfolio but for the inheritance of the 3,000 million pound debt. That we know about, but there may be others.
  It is possible to find a clear strategy to which the Government should be working, and I sum it up as follows: let the Government open for our people every trading opportunity they can. I do not see this described or defined as being a premier economic objective of the Government, yet it should be. We
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  should go so far as to exploit our undoubtedly substantial buying power.
  Let the Government work harder at providing the facilities for international monetary payments. We hear that the S.D.R.s are likely to come in this year. No one knows to what extent they will, or whether they will, but that is not the whole story. World trade has grown, and we hope that it will continue to grow at a high rate, yet the system set up at Bretton Woods immediately after the war with such high hopes is as out of date as a pair of short trousers designed to fit a boy of 14 would be for a man aged 24.
  Let the Government encourage our traders to move into more sophisticated enterprises, while allowing the simpler manufactures from the developing countries to come in. Let the Government encourage the traders, and make life easier for them. Let the Government get off their backs for a while.
  I should like the Prime Minister to say to his fellow Ministers: "Ask yourself each night as you clear up your desks: 'What have I done this day to help honourable men to earn their living and their country's living?'" The Government should make life cheaper for our people and for our traders, and should back them up, not only with legislation to reform trade union law but with a new company Act.
  Last, but by no means least, let the Government provide some personal incentives for those who labour by hand and labour by brain.
  This ragbag of a Budget will not make much difference to the outcome of events. Not one of us believes, in his heart of hearts, that this "carry-on" strategy of which we have heard is likely to be more especially successful than anything that has gone on before. "Carry-on with failure", alas, seems to be more likely.
  This Budget is tragically irrelevant to the realities of the national and international trading situation. Am I too cynical if I think that it is not so much an attempt to boost the economy as an attempt to boost the personal popularity of the Chancellor of the Exchequer? Be that as it may, it is time, and high time, for new men, new imagination and new measures.
  8.0 p.m.
  Mr. Trevor Park: I trust that the right hon. Member for Taunton (Mr. du Cann) will forgive me if I choose not to follow him in his remarks. The concluding part of them seemed to be a descent on his part to cheap sloganising and fell quite considerably below the standard of some of the other speeches which he has made in the House.
  I want to confine my remarks to two themes. First, I wish to make some general comments on the Budget strategy. Then I should like to say something about the Government's proposals for an Industrial Relations Bill, which my right hon. Friend the First Secretary of State outlined to the House last Wednesday. The Budget has perhaps been more favourably received, certainly on this side of the House and I think in the country, than appeared likely to be the case a week or two ago. It contains a number of proposals which deserve fullest support. The proposed increase in old-age pensions and the higher level of Income Tax allowances are both welcome signs that the Government can still succeed in getting some of their social priorities right.
  While I believe that the increase in Selective Employment Tax may well prove a serious mistake, increases in betting and gaming duties, in the television advertising levy and in Corporation Tax reveal a correct order of priority. In all these measures the Chancellor is taxing sources of revenue which can well afford tax and at the same time, through his other proposals, he is providing help for those members of the community who need help the most.
  If we are to judge this Budget by its details, if we are to determine our attitude towards it through the fine print, the Chancellor deserves to be congratulated, but other hon. Members have said, and it is the view which I hold, that a Budget judgment cannot be determined on the basis of its bits and pieces. The Budget is not simply at hotch-potch of measures. It is part of a general economic strategy. It cannot be divorced from what has gone before it, nor from what is to come after it. From this point of view the conclusions which I reach about the Budget are a great deal less favourable.
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  Ever since July, 1966, the Government have pursued a strategy of deflation. We have had a series of Budgets based on the theory that by taking purchasing power out of the economy and by reducing demand at home we can solve our balance of payments difficulties abroad. This is no new theory; exactly the same inspiration was behind many of the Budgets which the Conservative Party introduced when in power. It was a strategy which did not work for them; it is a strategy which has not worked for us either. In spite of 13 years of intermittent application under Conservative Administrations and in spite of three years consistent application under a Labour Government, we have not got as a result of the deflationary approach the higher productivity we need, nor have we got the industrial modernisation and investment necessary. Above all, we are still without any final solution to the balance of payments problem which every Chancellor of the Exchequer in every Budget states it is his intention to attain.
  Deflation does not produce the results that we require. Indeed, the results which deflation produces are in many ways the opposite of the results which are necessary. Deflation produces not an expanding but a stagnating economy. It brings about higher unemployment. It creates wage freezes and industrial unrest. The only way in which a deflationary policy could ever help to improve the balance of payments position would be for that policy to be pursued to such a ruthless extent that any Government which attempted to do it would be committing political suicide. For deflation to have a direct effect on balance of payments, wages would not have to be stabilised but would have to be reduced. Unemployment would have to be further increased. Taxation of the consumer would have to be more sharply intensified. Social benefits would have to be cut down.
  This is a thoroughly unrealistic, indeed an impossible, programme for the present Government to embark upon. Of course they have never had any intention of undertaking such a disastrous course, but this is the only kind of course which can produce results as long as the deflationary approach is the one which the Government adopt. Since they are not prepared to take that approach to its

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  logical conclusion, since because of political realities they have to confine themselves to a half-hearted deflation which cannot work, it is time that that deflationary strategy was abandoned completely and consigned to the scrap-heap. This is my major criticism of this Budget.
  Once one accepts that a deflationary policy is the best way and agrees that the Chancellor is correct in his objective of taking more money out of circulation, perhaps there is little quarrel with the way which he has chosen to go about it, but if one rejects the entire approach and argues the case for a completely different objective of economic policy, we have a very big quarrel indeed with the policy which the Government have adopted. There is an alternative strategy to that which is being pursued. It has been outlined time and time again both by some of my hon. Friends and by the Trades Union Congress and in Labour Party circles throughout the country.
  That alternative approach is based on the achievement of higher economic growth by the stimulation of a high-wage, high-productivity and full-employment economy. It is based on the protection of our overseas payments position by direct action in the field of import controls, in reduction of defence expenditure and stronger control over the export of capital. It is based on the acquisition and sale of part of the overseas investments which are now in private hands. What we need is not the modification or application of ingenious trimmings to the Government's existing strategy, but the abandonment of that strategy root and branch in favour of a new one.
  I turn to the proposals of the Government for an Industrial Relations Bill. It is not without significance that these were introduced in the course of the Budget debate. They are an essential part of the deflationary strategy which the Government have chosen to adopt. One of the aspects of that strategy is restraint over domestic demand and, particularly, restraint over wages and salaries.
  A statutory incomes policy was the instrument which the Government chose to use from 1966 to the present time. They were warned at the time that the policy was unworkable, and it has not worked. The Government are now being forced to acknowledge its failure, through bitter
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  experience. Now we are confronted with a new remedy, in the shape of a conciliation pause and the imposition of legal shackles on trade union freedom.
  Let me warn the Government now, as I did on their incomes legislation three years ago, that this policy will not succeed either. It will fail, because it is irrelevant and unworkable. I was not one of those who rejected out of hand the whole of the White Paper "In Place of Strife". I took the view that it contained many positive and constructive proposals, which ought to be implemented. Those proposals which were directed to improving the communications pattern within industry, and to establishing new, and improving existing, machineries of negotiation have my full support. The suggestions for making more necessary information available for trade union representatives engaged in negotiations, the proposals for developing systems of worker participation in management, are proposals which I wholeheartedly accepted.
  These proposals sought to reduce industrial unrest by dealing with its causes. There were other ideas put forward in the White Paper, which were at the least irrelevant and at the worst downright dangerous. These were the proposals for strike ballots, conciliation pauses and financial penalties. I say nothing about ballots, because the Government have excluded them from their immediate legislation. I only express the hope that this unworkable idea will never be resurrected.
  I do have something to say about the pause and the financial penalties. I do not believe that the concept of a conciliation pause will be successful in preventing even one major strike. Major strikes do not take place until negotiating procedures have been exhausted, and the pause is deliberately designed to deal not with the situation in which the procedures are exhausted but with that in which they have been abandoned. I do not believe that the pause will succeed in preventing short-lived, lightning unofficial strikes, because such strikes will already be under way long before the process leading to the imposition of the pause has been completed. American experience shows, all too clearly, that the period of the pause will not be used for cooling-off and discussion but for hotting-up and the preparation for the struggle to come.

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  Conciliation pauses will solve no problem; they will be an unworkable irrelevancy.
  Fines will be an irritant, and if we proceed with the proposals for legal and financial penalties outlined by my right hon. Friend last week, then we are in very considerable trouble. The bitterness which the imposition of these penalties will create will only make it harder to settle disputes, and may well precipitate further strikes against the victimisation of the strike leaders which will take place under the legislation.
  To solve industrial conflicts there has to be trust and goodwill, which are qualities that cannot be produced through penal legislation. They are products of conciliation. The only effect of what the Government are now proposing will be to create such an atmosphere of alienation and antagonism between themselves and the trade union movement that the constructive and relevant proposals in the White Paper will prove as impossible to implement as the irrelevant and harmful ones. The possibilities of taking the poison out of the package, of devising a formula acceptable to the Government and the trade unions alike, have been removed by the Government's action in rushing through their legislation with such indecent haste this Session.
  Not for the first time the Government have preferred to accept the advice of their enemies instead of embarking upon consultations with their friends. For months now, when their supporters, in the House, in the trade union movement and the country generally, have urged their views upon the Government, it has been like a dialogue with the deaf; they have listened but have not heard. Now we are participating in a dialogue not with the deaf but with the doomed, because if the Government persist in their disastrous course they will be signing their own death warrant.
  I do not believe that the Government can survive in office if they lose the confidence of their supporters in the trade union movement, in the workshops and on the factory floors of this country. These are the very people who will be most embittered and antagonised by what the Government are now proposing I am not surprised that the Conservative Party have intimated that they will not
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  oppose the Industrial Relations Bill. If the Government are determined to slit their throat then the Conservative Party I am sure will be only too happy to provide the razor.
  It will be the most striking example yet of the operations of bipartisan politics, and of their consequences for the Labour Party. The Prime Minister has said that the passage of the Industrial Relations Bill is essential to the Government's continuance in office. My view is exactly the opposite: the passage of this Bill will be the heaviest burden and the greatest impediment to victory at the next General Election. I tell the Government now that they will not have my support in the Lobby for this Measure. That is true whether or not it is a vote of confidence, whether or not there is party discipline. If the Government propel themselves into a headlong conflict with the trade union movement and the Labour Party in the country, my loyalties will be with the Labour Movement, and the Government can get their support from the Benches opposite.
  8.17 p.m.
  Mr. Joseph Hiley: As I listened to the hon. Member for Derbyshire, South-East (Mr. Park) I was reminded of an occasion at Headingley some years ago when a Yorkshireman and a Lancastrian had a violent argument in the "shilling end", as it used to be in those days. A Cockney was listening and had the temerity on one occasion to join in. At this the Yorkshireman looked at him and said, "Where do you come from?" He replied, "London". The Yorkshireman told him, "Shut up, tha' knows nowt about it." It seems that I ought not to join in this little disagreement between the two sides of the Labour Party.
  I am particularly glad not to have to do that, because I want to raise a specific point in connection with the Budget. I hope that I may be able to help the Chancellor, the country and the trade which I represent. I refer to the Customs and Excise proposals in the Red Paper, with particular reference to paragraphs (a) and (c). There is a proposal to put 13¾ per cent. Purchase Tax on hand-knitting wool and rug wool.
  Before I proceed may I declare an interest in this matter. I have a very strong constituency interest, in so far as

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  there are at least four spinning mills and one dye-house in my constituency devoted exclusively to the production of these two commodities. I have a personal interest in two of them. I also speak tonight as the President of the Hand-knitting Association, which is greatly concerned about the proposal to bring in, for the first time. Purchase Tax on hand-knitting wool and rug wool. The principal organisation in the wool textile trade, the Wool Textile Delegation, takes a similar view and has already protested to the Chancellor about the proposals.
  This is the first time that hand-knitting wool or rug wool has been included in a proposal of this kind. Even in those difficult days 20 years ago when a Socialist Chancellor of the Exchequer scraped the bottom of the barrel, as this one appears to be doing, to find new ways of taxing the people, such a proposal was never considered. Those were the days when a Minister introduced bread rationing a few years after the war had ended. It must have been demonstrated to the Chancellor of the Exchequer of those days that it was wrong to put Purchase Tax on a commodity of this kind. Whatever the reasons were in those days, they apply today, and probably even more strongly.
  These two commodities are semimanufactured goods, which means that they demand rather fewer than half of the services of a fully-manufactured article. If hand-knitting wood or rug wool were woven on a loom, labour and electric power would be involved. If these wools are diverted to mechanical weaving, the hosiery knitting industry, which is fully engaged and short of labour, as are the carpet and rug weavers, who are exporting to a tremendous extent, will be denied the opportunity of continuing their development of the export market.
  The other point which I wish the Chancellor to consider is that hand-knitting wool is used for the production of children's garments. Here we immediately see an anomaly. Ready-made clothing for children is free of Purchase Tax. If the Chancellor's proposal is accepted, home-made jumpers or dresses for young children will be subject to Purchase Tax. Surely that is the opposite to what the Chancellor is trying to do.
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  He is discouraging voluntary production and encouraging the import of children's garments, and particularly the cheaper and thinnest garments, from places such as Hong Kong and Portugal—which often cause hon. Members opposite a great deal of concern.
  These two commodities do not help the balance of payments at all. I hope that the Minister of State will make an effort to convince the Chancellor that I make this point not entirely out of self-interest but in the ultimate interest of the Chancellor and the country. Hand-knitting wool is sold by the producers in very small quantities compared with most other textile products. The administrative costs of Purchase Tax on these small quantities will be very great.
  Work may be a leisure occupation or, as it is sometimes called, occupational therapy. Many people derive a tremendous amount of pleasure from the production of hand-knitted garments and hand-made rugs. They may not have the opportunity of taking part in other forms of relaxation. By producing these articles they are helping themselves as well as the country. Those in the highest-income groups are not good customers of people who produce hand-knitting wool or rug wool. Their customers are usually in the lower-income groups, and we are in a sense denying them one of their pleasures and enjoyment.
  I hope that I shall have the Minister's attention because throughout this debate nobody has made a specific point, as my point is, and I hope that as a result of my plea I shall hear later that the Chancellor has decided to reprieve these two commodities.
  8.27 p.m.
  Mr. W. T. Williams: The Budget, I suppose inevitably, has had a mixed reception. Although in some sense it is less oppressive than former Budgets, it is a dose of the same medicine. It is another straw on the camel's back of the economy.
  I am not, thank goodness, an economist. During all the years that I have been a Member we have been ruled by economists and economic advisers. For all the good that it has done us, we might as well have been ruled or advised by as many witch doctors. We have faced the same crises year after year

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  and have had the same miserable tale of balance of payments problems, whatever party has been in power and whether its advisers have been English or Hungarian. It would appear that the only thing that successive Chancellors can think of is how to solve the elusive problem of the balance of payments, whatever burdens they impose on the unhappy people who have to bear ever-increasing taxes.
  There are some things in the Budget for which the Chancellor has to be praised, and I would not withhold my praise from him except that I have a particular case to make and little time. I ask him to take that praise for granted while I move on immediately to my central criticism of the Budget. My criticism is directed specifically to what I and those of the Co-operative group, of which I am chairman, regard as a particularly iniquitous bit of taxation, namely, the Budget's increase in the Selective Employment Tax.
  There can be no doubt now, if there were any doubt before, that the proposed increase in S.E.T. will certainly lead to a head-on collision between the Government and the Co-operative movement. That is in itself unfortunate, because the Government have hitherto had no more loyal friends or supporters than this movement. Indeed, there is a case to be made for the Co-operative movement alone for special treatment in this field.
  The effects of the increase in S.E.T. upon that movement, and every such increase, are more oppressive than they are on other distributive and service industries, because each increase will add a greater burden on the co-ops than on other traders. The Co-operative movement as a social and non-profit-making organisation carries a heavier burden of unprofitable services than any other retail distributor. That case has been made over and over again to the Chancellor on its own merits.
  The fact must be well known that the co-ops bear the burdens of distribution, of taking milk, meat and groceries into villages and of running small shops for social reasons. The cynical comment that, somehow or other, the carrying of these burdens and finding them heavier than similar organisations makes the
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  co-ops less efficient and less deserving of sympathy is bitterly resented, as is this latest increase, in the light of all the matters which have been laid before the Chancellor so many times.
  I am not tonight, however, seeking specially to make the case of the co-ops. That case has been made, it has merit and it has been disregarded. That, in turn, has given rise to resentment and hostility and this the Chancellor and the Government must face. I level my charge against the Government more widely for their cynical increase of this tax.
  The whole concept and incidence of this tax from the beginning to now is altogether inequitable. The two Chancellors who have been concerned with the tax have offered different reasons to justify its imposition. The present Home Secretary, when he introduced it, talked about it as a convenient instrument for transferring labour from the over-provided distributive and service industries to manufacturing. The present Chancellor has, at least in part, abandoned that pretext if only because it was, and manifestly was, a total failure in that regard.
  The present Chancellor chooses to put his increasing faith in this tax regarding it as an easy and, as he put it, relatively painless form of taxation. That it is an easy imposition is clear. It leaves the distributive and service industries substantially the task of collecting the tax, and it is clear what a temptation such a tax must be for any Chancellor.
  But, however great the temptation, no Government, least of all a Labour Government, should impose taxation which is unfair in its imposition upon different sections of the people, and, more particularly, which puts its heaviest incidence, as it is increased, on the poorer sections of the community. That, at least in part, is precisely what this increase in the tax is doing.
  I have all my life been a member of the Labour and Co-operative movement, as were my father and my grandfather before me. I did not join this Labour movement to play any part in legislation which was designed to assist what the Prime Minister has often called "candy floss" manufactures at the expense of increasing the cost of living of humble people, the greater part of whose

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  earnings is spent in the purchase of necessities. That is precisely what this tax is doing. Every time the Chancellor increases Selective Employment Tax in its present form, the greatest and most painful impact will be upon the distribution of food and necessities.
  There was no reason why, if the Chancellor had been as concerned about priorities as he was about seeking, as he said, to solve the balance of payments, he should not have spent some in trying to refine this tax so that it might become genuinely, truly selective. As it is, the imposition of yet another swingeing increase in this tax will increase the cost of food by about 2½ per cent.
  I do not believe, nor do those who have advised me, that the Chancellor is serving any useful purpose, either politically or economically, or in any way, by concealing this fact, either by generalised statistics suggesting that the overall increase is 1 per cent., or by the pretence that he can go on increasing this tax—until it now stands 92 per cent. over its original incidence—and that these increases can continually be absorbed, especially by the distributive trades, and that the cost will not be passed on through their shopping baskets to ordinary people. When the people realise—and they will realise it—that this is a tax which, by deliberate act of the Government, has so increased the cost of necessities, then I believe that the bitterness of opposition will go far, far beyond the small group of M.Ps. who, on this side of the House, feel so betrayed now.
  The Chancellor talks about not being able to make any refinement of this tax because he is awaiting the results of the Report of the Reddaway Committee. If he had not wanted to wait for the Report of the Reddaway Committee to refine the tax, why was he content to say that, without that Report, the information which was available to him justified him in making this increase of about 28 per cent., on a tax which he had already increased by 50 per cent. only a year ago?
  I want to make it quite plain that we who belong to the Co-operative group of Members of Parliament—and we hope that other members of the Labour Movement will make their opposition as clear—are bitterly opposed to this aspect of Government policy, that we shall oppose
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  it now and that we shall continue to do so until its basic injustice and its political ineptitude are as clear to the Government as they are to us.
  8.40 p.m.
  Mr. Julian Ridsdale: The one optimistic aspect of this Budget debate, to which I have been listening for almost three days, is the appearance of enormous cracks in the ranks of Government supporters. I hope that it will not be long before we see the complete disintegration of the Government and a change of Government. I am convinced that this is the only way in which the economy of the country can be put right.
  My main criticism of the Budget, is that, whilst the Chancellor may have stabilised in the short term the Socialist structure of the economy, by his readiness to increase Corporation Tax and Selective Employment Tax, he has done nothing to solve the long-term problem facing the country of our failure to increase investment in productive manufacturing industry.
  The Chancellor may believe that he has gained the maximum political benefit by increasing retirement pensions, but I believe that he should have been far more selective. Although I know the extreme difficulties which retirement pensioners are facing, I am equally certain that the Government are putting far too heavy a burden on those who are producing the wealth of the country, the young people and those in productive industry. The Government are killing the goose that lays the golden eggs.
  In the last five years of Conservative rule the real value of the retirement pension went up by 16 per cent. In the last five years the real value of the retirement pension, when the increase comes, will have gone up by about 20 per cent., but the insurance contribution will be up by 40 per cent. The Government Front Bench were very quiet today about the increases that will be made in contributions, but I estimate that they will be about 40 per cent., whereas in the last five years of Conservative rule contributions increased by only 18 per cent. The Chancellor is making a serious attack on the productive capacity of manufacturing industry, and he is placing a heavy burden on the young and those working in industry.

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  The long-term problem which the Chancellor must face is that manufacturing investment as a proportion of the gross national product has hardly increased at all in the last ten years. This is the real seriousness of our long-term problem. Although the position did not improve during the last few years of the Conservative Administration, it has worsened under the Socialist Government. Between 1962 and 1966 Germany invested half as much again as we did in manufacturing industry, and Japan invested double that amount. As a consequence, the gross national product of Japan, which in 1961 was two-thirds of ours, will in 1970 be double ours. This is the measure of all our failings, and I am sure that those who ask for a radical solution to our problems and a move away from Socialism to more economic liberalism are right. That is how Germany, Japan and the United States have succeeded.
  What a tragedy it is for the country's long-term prospects that investment in manufacturing industry over the last five years has been almost static. It is all very well for the President of the Board of Trade to say, as he did on Thursday, that we have had a 5 per cent. or a 7 per cent. increase in productive investment in the manufacturing industry. Like many hon. Members on the Government back benches, I thought that the right hon. Gentleman's speech was far too complacent. If we are to measure up to the kind of competition which is coming from Japan and Germany, we should be increasing our investment in manufacturing industry not by 5 per cent. but by 100 per cent. In each of the last ten years Japan has been investing double the amount in manufacturing industry that we have. That is why Japan and Germany are beating us in world trade. It is the long-term problem that the country has failed to face in not adopting the policies that those countries have and in relying too much on Socialism and directing the economy rather than letting market forces work. Until we do that, we shall not find the solution to our problems.
  When one sees what is happening in Japan, in terms of savings, there again is a matter to which we should pay far more attention than we do. How different Japan's personal saving performance is.
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  In 1967–68, post office savings in Japan jumped 36 per cent. and personal savings increased by 27 per cent. In this country, National Savings went up by 1·6 per cent. last year.
  Having heard so many Budget debates and listened to so much advice poured on various Governments, I am certain that we have to turn away from Socialism and not place so much reliance on the all-embracing Welfare State. We must move quickly to an economy based on the market. We must move nearer to price mechanism and capitalism and away from Socialism. Germany, Japan and the United States have succeeded where we have failed. We have to give the right incentives for investment. We have to strive for maximum efficiency. We have to realise that excessive taxation is discouraging both profits and investment in manufacturing industry.
  Every incentive must be made to get genuine savings. We must stop attacking capital, and we must make it worth while to save. A pointer in the right direction is the raising of the limit on Estate Duty from £5,000 to £10,000. However, if it is right to make that kind of move in the lower brackets, surely the Chancellor realises in his conscience that it is right to make a move further up. He must know that one of the reasons why people are spending rather than saving is that the Government of the day have little respect for capital and a good deal less respect than many other Governments, particularly those of Germany, Japan and the United States.
  When is it a virtue to save and when is it a sin? As someone asked recently, when does an honest saver become a bloated capitalist? The Chancellor never answered that question the other day. The only thing I can believe is that the only honest kind of saving, from the Government's point of view is something that goes into National Savings or into Government saving. Otherwise anyone who saves, according to the Socialist philosophy, is committing a sin. We have to encourage the managerial class, we have to encourage our system of capitalism and our price mechanism far more than we have been doing. We have to have bold solutions to our problems, much more along the road of capitalism than the road of Socialism.

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  This is the mistake that we have been making in our economy. We have not been giving the right incentives or encouraging those making the country's wealth. It is because, now, we know in our hearts that unless we have these radical solutions we shall not solve the serious long-term problems which face the country. That the only solution for all the ills is a change of Government.
  8.50 p.m.
  Mr. Nicholas Ridley: I should like to utter a few words of congratulation, of which the Chancellor has been rather short. He has adopted, in the main, money supply considerations. In trying to cope with excessive demands, his profligate predecessor allowed vast sums of money to be pumped into the economy. I am glad that he has at last realised that the total control of demand is the way in which he will eventually bring inflation under control.
  I want to talk about the external side of the account. My right hon. Friend the Member for Wolverhampton, South-West (Mr. Powell) said a great deal which must be reinforced, because it is becoming more and more obvious that these endless doses of deflation, this twisting of the deflation spiral, will not achieve the result of improving our balance of payments. The whole concept of achieving a surplus by means of further deflation has very little meaning.
  After all, what is the commodity of which we are short, what is the ambition which lies behind the Chancellor's Budget strategy of improving the balance of payments? It is to earn more foreign exchange. Having for one moment looked at foreign exchange as if it were a single commodity, the way in which he deals with it emerges as strikingly ridiculous. There is a difficult market in obtaining foreign exchange for buying property abroad or travelling abroad—one is limited to £50. But take something like imports; one can import any goods ad lib. One can import motor cars in any quantity one requires or machinery, or wine or foreign produce of any sort without let or hindrance.
  Then we come to import saving. For some extraordinary reason, the Government are to subsidise the construction of aluminium smelters to the tune of 40 per cent. or perhaps even more. On
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  the other hand, when it comes to the replacement of foreign exchange, the policy is that there appears to be no subsidy at all.
  The dollar premium for portfolio investment abroad has raced up to nearly 60 per cent. The investment of funds directly by British companies overseas is treated in a totally separate way. Companies which have contributed to our fortune and have large overseas earnings are allowed to invest them abroad, whereas new companies, which may wish to make investments overseas, are not allowed to do so without suffering much more penal tax treatment than competitors.
  This total muddle as to what is the value of foreign exchange is compounded in all these different ways. Whether one is exporting, importing, investing, travelling, or buying luxuries, it is treated in a different and arbitrary way. This gives the Government the power to discourage and demoralise the citizens by saying that all their legitimate desires are bad for the balance of payments. If we were to put a single, same price upon foreign exchange, all these subjective judgments whether the purposes for which it is being used were good or bad would cease to exist. The demands for foreign exchange for all these purposes would come into balance.
  In so far as we want to earn more money abroad and to keep up the value of sterling, the way to do it seems to be to make large investments in foreign countries. The idea that one should import everything is changing, to a stage where more and more countries which do not produce are asking that big international companies will set up factories within their territories which will make the goods that they themselves cannot make.
  Over the years one element in our foreign exchange which has been getting stronger, and coming more and more to the rescue, has been the dividends and interest of overseas investments. It is a crying shame that the Government should be spending about £500 million a year on aid and on military adventures overseas and at the same time should be choking off investment in foreign countries by our great international trading companies. This is killing the goose that lays the golden egg.

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  If we want to bring all these difficult problems into line and once more to put the price mechanism into the value of foreign exchange, there is no alternative to allowing the £ to float.
  Mr. Deputy Speaker (Mr. Sydney Irving): Mr. Maudling.
  Mrs. Winifred Ewing: On a point of order, Mr. Deputy Speaker. Is it the position that now that the right hon. Member for Barnet (Mr. Maudling) has been called to sum up I, as the representative of the largest party in Scotland, will not be allowed to participate in this debate?
  Mr. Deputy Speaker: I cannot help the hon. Lady. Mr. Maudling.
  Mrs. Ewing: Further to that point of order—
  Mr. Deputy Speaker: Order. I indicated to the hon. Lady that I could not help her. She cannot speak further to the point of order.
  8.58 p.m.
  Mr. Reginald Maudling: The debate which we are just concluding has been marked by one maiden speech by my hon. Friend the Member for Walthamstow, East (Mr. Michael McNair-Wilson), whom we much welcome and to whom we listened with great attention.
  The debate has not been marked by a large number of speeches from the other benches in strong support of their Chancellor of the Exchequer. The Chancellor must be finding that the first reactions to the Budget are not the last ones. He will be finding that criticism of his Budget rises as people understand it better.
  The Budget was first described as moderate and politically skilful. Well, standards change. But to call £340 million of additional taxation in a full year a moderate Budget is a symptom of the state to which we have been reduced in the last four and a half years.
  As for the politically skilful part, I must say to the Chancellor that his political skill has rested in disguising from the House and the public the true effects of his proposals. We had a good example this afternoon, about which I will question the Chancellor as I go along, in the cost of the National Insurance increases.
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  There are many individual points with which I cannot deal in detail, some good, some bad, and many mixed. We give unqualified support to the Estate Duty relaxation and to the Income Tax relief for small incomes. We welcome the new flexibility for investment trusts, though it is an interesting comment on the credit rating of the Government that the dollar premium jumped to 60 per cent. immediately this was announced. We welcome the close company concessions, but we are not sure that they go far enough. They leave the patchy administration of the short-fall computations which is causing considerable difficulty to many small close companies in different parts of the country.
  Mr. Diamond: Quite wrong.
  Mr. Maudling: I invite the right hon. Gentleman to ask the people who know.
  We welcome in principle the removal of the Capital Gains Tax liability from gilt-edged securities. This will not cost the Treasury much. There has not been many capital gains in gilt-edged, and there is an accrued loss position which the Treasury will now be able to write off. The Treasury will now make a profit out of it.
  The position of local authorities has been very much worsened by the right hon. Gentleman's action. I understand that the capital stock of great local authorities will not enjoy the advantages given to gilt-edged and to nationalised industry stock. These authorities will have to pay very much higher rates of interest to raise their money. I put this to the Chancellor because it is important and affects many people. The ratepayers in the G.L.C. area, in Birmingham, and in Liverpool, will have to pay a lot more in rates to cover the additional cost of borrowing which arises directly from this move by the Chancellor, and I ask the right hon. Gentleman to look seriously at the consequences of this for local authorities and at the possibility of extending to them concessions which the central Government are getting under this provision.
  We welcome in principle the proposal for savings. Indeed, some of my right hon. Friends have advocated a scheme of this character, but once again it is a comment on the present Government's

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  credit that even with interest rates at 12½ per cent. on a Government security for the standard rate taxpaper the Chancellor is not confident of getting any real money in this year. This is extraordinary, and it is worth pausing for a moment to contrast the savings records of Labour and Conservative Administrations. Under the first Labour Administration after the war, though no doubt there were special circumstances, savings were abysmal. In the 13 years of Conservative Government savings increased year after year at an annual average of 17 per cent. Since then the annual increase has been negligible.
  What is the reason for that? It is not a question of the inducements offered to savers, because they are very little different from what were available under Conservative Governments. In fact, they are probably bigger. It is not a question of people not having the money to save, because the Government claim that people now have more money, or, to use the commonly used phrase, they have more disposable income. The fact is that people will not save under this Government. The only answer to this extraordinary discrepancy is that confidence is the only breeding ground for savings, and that under this Government, whatever they do, confidence has evaporated and will never return.
  I turn, now, to the tax increases, which we regard as wholly wrong. We say that there is no case at all for increasing taxation in this Budget. If the Chancellor wished to turn the deflationary screw any more he should have concentrated on reducing Government expenditure. There are many proposals which are designed to increase prices. Purchase Tax, wine duty, the effect on textiles, and the petrol duty will all affect individuals; they will all fall on investment, on enterprise, and on exports. But there are three particular things to which I wish to refer—S.E.T., the disallowance of interest as a charge to Income Tax and Corporation Tax.
  The disallowance of interest is illogical in principle, unworkable in practice, and will not hit the people at whom the Chancellor is aiming. The principle is simple—to aggregate all sources of income for an individual, plus and minus, and charge tax on that. But if I borrow money at
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  5 per cent. and lend it at 6 per cent., my income is 1 per cent. and to tax me on 6 per cent. and not 1 per cent. is wrong. This has been recognised in the case of business, so why not for the individual? As my right hon. Friend the Member for Enfield, West (Mr. Iain Macleod) said, the anomalies and distinctions in the case of private businessmen or professional men or farmers will be extremely difficult to work out.
  How about a member of Lloyds who has a loss in one year and borrows money to meet it? Is that business or private? Or how about the man who borrows in order to buy additional shares in a private business so as to maintain its character? Is that business or private? What about the intolerable position of an executor of a will, who must borrow to cover the situation so that securities can be realised?
  It is said that the cost of borrowing to a rich man is small, and this is true. It is also true that the value of investment income to a rich man is small. It is two sides of the same coin. But it is sophistry of the right hon. Gentleman to argue that in present circumstances the cost of a rich man borrowing falls on the Exchequer. The rich man can either borrow or realise investments, and the consequences in terms of tax to the Exchequer are precisely the same in both cases.
  The people who will be hit by this provision are not the rich but those who are up-and-coming executives and managers of business, people with a substantial earned income but no personal capital, who, we hope, will want to acquire capital and a share in the business they are practising in. They are the ones who will be hit.
  The Chancellor said that it was a pity that he could not reduce Surtax on earned income. The Government have already eliminated effectively the stock option. Now they have levied a further burden on executives and managers. When the Chancellor expresses his regret that he connot reduce Surtax on earned income, he must forgive us if we think his tears have a certain crocodile quality.
  Then there is the Selective Employment Tax, rightly attacked by the hon. and learned Member for Warrington (Mr. W. T. Williams). This is, rightly, the

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  most unpopular tax. It is a sorry thing that a Chancellor as sophisticated as the right hon. Gentleman should not only maintain but increase this most logically absurd of all our taxes. Despite what the Chief Secretary said, the case against the S.E.T. still rests. It is based, first, on anomalies; second, on the fact that it cannot be rebated for exports; and, third, on the fact that there is no buoyancy of revenue in it, and that is one of the things that a modern tax should aim at.
  The anomalies are well known and the principle is absurd. To go back to the fallacy of the physiocrats, to say that it is a good thing to produce but a bad thing to distribute is unworthy of an intelligent Chancellor. To say that it is a good thing to produce boots but a bad thing to engage in the wholesale distribution of boots is foolish. [An HON. MEMBER: "No one has said that."] No one has said it, but that is what the tax means.
  Not only is there no rebate for exporters, as there can be in the case of many indirect taxes, but exporters are penalised, and heavily penalised in many cases, by the S.E.T. I give an example from my experience. A company engaged in insurance broking gets 60 per cent. of its income from overseas in foreign exchange. There cannot be many manufacturing industries that can show a 60 per cent. export record. Yet every person working in that firm is liable to the S.E.T. On the other hand, down the road a man making the candy floss to which the Prime Minister used to refer is favoured more than the invisible exporter.
  We must recall once again the total failure of the Government to appreciate the importance of invisible exports. As Mr. Clark's recent book said, in only seven out of the past 175 years have we balanced our trade internationally by visible earnings alone. In every other year we have needed invisible earnings to do it. Particularly since devaluation, invisible income has risen and risen rapidly, in banking, insurance, shipping, tourism, brokerage—all the manifold services of the British commercial community.
  The President of the Board of Trade (Mr. Anthony Crosland): Hear, hear.
  Mr. Maudling: I must tell the right hon. Gentleman that he did not say much about it in his own speech last week. He talked most about visible exports and said nothing about invisibles. When challenged, he seemed to think it better to leave it to the Treasury spokesman. Sometimes that is wise. The fact is that the invisible income producers, our commercial community, are being penalised again, and heavily penalised, by the increase in the Selective Employment Tax. The Chancellor cannot get away from that, and at least this evening he might try to explain it.
  I come next to Corporation Tax, which, with the Selective Employment Tax, is the biggest item in the new tax increases. What is the Chancellor's intention about this additional £120 million of taxes? Is it to fall on the cash flow of industry—in other words, on investment, or corporate savings—or is it to be passed on in prices? It will be one or the other. If he wants, as he says, to encourage savings and discourage consumption, he should surely be encouraging companies to pass this additional tax on in increased prices, but he will not make it clear.
  In his Budget speech we read this extraordinary statement about the position of companies in 1967 and the beginning of 1968:
  "Liquidity was then very high, and investment low. The evidence is that factors other than the availability of retained profits are crucial to the determination of company investment."—[OFFICIAL REPORT, 15th April, 1969: Vol. 781, c. 1027.]
  Could one have a better condemnation of the Labour Government? The policy at that time was forcing companies to reduce their distributions so that companies were accumulating more and more money, while apparently saying, "Under a Labour Government, we do not have the confidence to go ahead with a large increase in investment which the country requires. The right hon. Gentleman must clear that up.
  The right hon. Gentleman will have seen the article in the Economist about calculations of what percentage of the G.N.P. he is trying to take away in increased taxes. How much of the increase in Corporation Tax and in S.E.T. does he want to see passed on to the consumer? His calculations about reducing consumption by the amount of which he has spoken must depend on the

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  amount by which he thinks prices will be increased. After all, increased prices is his main weapon in this Budget for cutting back imports and trying to improve the balance of payments.
  I come to what has been called the politically skilful aspect of the Budget. What, after all, was the Chancellor facing? The year 1968 was one of truly appalling results throughout our economy. In prices, interest rates, unemployment, the balance of trade, taxes, throughout all this spectrum of our economic affairs, as the House is now well aware, the results were disastrous, almost without precedent. He was faced with the total disappointment in the progress to be made under devaluation, and also with an absence of new ideas, or at any rate of new ideas acceptable to his colleagues. So he found himself forced to rely on the old, tried, and now, I think, discredited methods of higher taxation and a rigid credit squeeze. He has come back once again to this old diagnosis and this old doctrine.
  The right hon. Gentleman was a little scornful about the "Chicago School". I am not sure that I entirely disagree with him, although I hasten to add that I am going to Chicago myself next week as a guest of the Chamber of Commerce and not of Professor Milton Friedman. But whichever way he takes it, this Budget is enormously deflationary by the measure of the overall surplus which I believe is totally unprecedented. I say to those who believe strongly in the money supply theory that if one bangs the gilt-edged market too hard one may be doing a good deal of damage, because a sound gilt-edged market and an ability for industrial companies to borrow at fixed interest on reasonable terms are very important for our economy.
  One of the main criticisms of the right hon. Gentleman is that all the way, having adopted the old medicine, he has tried to hide the facts from the public. There is no better example than the question of pensions and contributions.
  We had not a statement but a speech from the Chief Secretary this afternoon. I think that I am right in saying that the Leader of the House promised us a statement. The Chief Secretary said that he made a statement: he said that he could not say anything. This reminds me of the time before the war when,
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  walking down Fleet Street, I saw a newspaper placard saying, "Conscription—Government Statement". I paid my penny, which it cost then, and bought my newspaper. What was the statement? The Prime Minister told the House that he had nothing to say. I was swindled then, and we were swindled today.
  I cannot understand why the Chancellor has allowed this to happen, unless, as evil rumour has it, the Prime Minister decided that the particular figures of benefit should be included in the Budget speech without the particular figures of cost. The Chancellor said quite categorically that the costs of the increased pensions would be £250 million, but there would be substantial extra provision because of the imbalance in the fund—we do not quite know why there is still an imbalance, after all the Government have done—and the continuing increase in the number of pensioners. In addition, there are the supplementary benefits, the war pensions and all the other things that always go with a pension increase. The Chancellor must know how much money is involved. He said himself that it was substantial; yet his Budget judgment is very finely worked out to £10 million, £20 million or £30 million. He must know his estimate of the cost of these things, and he must tell the House. His hon. Friend the Member for Heywood and Royton (Mr. Barnett) said roughly the same thing.
  How will the cost be divided up? The Chief Secretary hinted that it would be on the traditional basis, although, as my right hon. Friend the Member for Enfield, West said, on that basis it would be 2s. for each man and ls. 9d. for each woman, and 2s. 3d. and 2s. for the employer. Is that the figure, the ratio, the Government are going on? We do not want exact details, but the broad figures. If that is the correct calculation for the £250 million that the Chancellor quoted, what is the correct calculation for the additional sum that he knows but did not quote?
  This is the outstanding example of where the political cleverness of which we read has come into the Budget. But there are others. When the Chancellor came on rather exceptionally in a Budget speech to deal—not with prices and incomes policy, for that is not exceptional—with trade union legislation, one could once again see the political calculation

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  behind this part of his statement. He reckoned that the compulsory incomes policy has now collapsed—except for dividends, as the Chief Secretary pointed out this afternoon. So the Chancellor said, "All right, let us drop it", as we warned the Government that they would have to. But he thought that our creditors overseas would be very frightened by this and would not like it at all; so the Government said, "Let us make the maximum show of boldness in the matter of trade union legislation to console our overseas creditors". I suppose that he hoped also that the trade unions would be so mollified by the dropping of the compulsory incomes policy that they would be prepared to accept the new proposals about trade union legislation.
  This was clearly the political calculation. I doubt whether it has worked out. What is the Chancellor's calculation of the economic effect of dropping that part of the incomes legislation? This, too, affects his Budget judgment. He cannot have made his Budget calculation without taking into account what he reckons would be the effect of dropping this part of the Government's prices and incomes policy. Once again, he must tell the House what he calculates, if we are to understand his processes of thought. When we recall that a 1 per cent. increase in incomes is about £200 million of purchasing power, this is a very large item. If the effect of dropping it will be large, what will it be? He may say, on the other hand, that it will be small. If so, what on earth has been the point of playing about with it for the past 18 months?
  I come to the proposals for legislation to deal with the trade unions, or to change the law relating to them. We on this side of the House welcome the Governments conversion to the need for early legislation here, which we believe to be of great importance, but we are entitled to ask whether the Government, and indeed the unions, really know what the Government are at, and whether the Government really know what effect their new proposals will have.
  We listened to the right hon. Lady last week, at some length. I thought that the most depressing thing from her point of view was that her proposals were received by her own party not with hostility but with derision.
  Mr. Roy Roebuck: Nonsense.
  Mr. Maudling: The hon. Gentleman may have been merely hostile, but the rest were derisive. When the Left wing discovers the power of humour, dangers lie ahead for Ministers.
  What do the Government really intend? The right hon. Lady repeated over the weekend that the Government intend to bring into effect the entire proposals contained in the White Paper. Let us be quite clear—and the Chancellor of the Exchequer brought it into his speech—that the Government have not resiled in any respect at all, I understand, from the proposals in the White Paper.
  Further, what do the Government mean, if they know, about enforcement, which as hon. Members opposite have pointed out is quite crucial? The right hon. Lady spoke of committal at one stage. I do not know quite what she meant, nor, frankly, do I think that she did. But what is the underlying sanction? Surely it is a monetary penalty. How it is to be collected is still obscure, and may have to be left to the Law Officers.
  How is the penalty to be assessed? The right hon. Lady is adamant in saying that it is not a fine of any kind but damages to be paid to other people who suffer as a result of a strike. If the payment is to be assessed on the basis of the damage done, the amount will be very large. If we are to put the whole cost of an unofficial strike in the motor industry on the shoulders of a few unofficial strikers, the financial penalties will be very heavy. We feel that the Government have not thought through in any way at all the consequences of what they are trying to do. Nor am I convinced that the measures they propose would really have had a decisive effect on our economic performance, as the Government are trying to argue.
  As I say, we welcome these moves. They are moves in the right direction, when properly thought out and crystallised, but without reform of the trade union structure, and certainly without a change in the legal enforcement of freely negotiated contracts, we do not believe that a real solution can be found.
  We therefore condemn the Budget because we do not believe that it measures up to the problems. We think that the

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  difficulties that will accrue in the second half of the year will be very serious. At home, unemployment may grow, and investment will certainly be discouraged by the increased Corporation Tax. Under the new dispensation, wages may break away altogether. Abroad, the removal of import deposits and the new difficulties, after the German elections, of the Deutschemark, and the possibility of further deflationary policies in the United States, all throw further doubt on the likelihood of the right hon. Gentleman's achieving his objective.
  The fact is that all the Chancellor of the Exchequer has been able to produce is the old recipe of restriction and higher taxation. I do not feel that he took counsel properly with his right hon. Friend the President of the Board of Trade. The Chancellor of the Exchequer concentrated entirely on cutting down imports by depressing home demand, whereas the President of the Board of Trade rightly pointed out that a great part, possibly the major part, of the problem arises from the inadequacy of our export performance. Although British industry has made great efforts they have not been enough, and the in crease in exports has largely arisen from an increase in the volume of world trade. What single thing is there in the Budget to encourage anyone to export anything more than he is obliged to do? Rather the opposite is the case.
  Time and time again since devaluation the Government have whittled away the advantages of devaluation; by withdrawing the rebate, by letting prices go up, by putting up Selective Employment Tax. Time and again, more handicaps are placed in the way of our exporters. I challenge the Chancellor of the Exchequer, clearly and directly, to tell the House in what way and by what means his Budget proposals will increase our export performance. I have not seen any single reason for thinking that that will happen.
  I sum up our opposition to the Budget. We believe that it is a politically clever Budget designed to hide from the people the real effect on their livelihood and wellbeing of the right hon. Gentleman's measures. We believe that a Budget on this scale, following on Budgets on unprecedented scales in recent years, has
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  shown quite conclusively that a Labour Government are totally incapable of running the country's economy.
  9.25 p.m.
  The Chancellor of the Exchequer (Mr. Roy Jenkins): I begin by agreeing with the right hon. Member for Barnet (Mr. Maudling) in one point—in extending my congratulations to the hon. Member for Walthamstow, East (Mr. Michael McNair-Wilson) on his maiden speech, which I greatly regret to say I did not hear but which I read with close appreciation and attention, as I did—with close attention, at any rate—all the speeches on Tuesday, Wednesday and Thursday of last week which I did not hear.
  I start by dealing with a point with which the right hon. Gentleman dealt towards the end of his speech—the National Insurance contributions. I can assure him that there has certainly been no desire to conceal the extent of the contribution. I made it clear in my Budget speech that it would be very substantial, and in my television broadcast I stressed that pensioners would not be helped without higher payments by those at work—[HON. MEMBERS: "How much?"]—but there are at present special complications associated with the move towards earnings-related pensions and we are in process of working out exactly what is the fairest way for the next autumn contribution increases to fall on those at different income levels.
  I can assure the House that there is no question of employers being made to pay more than their normal share of the contribution nor of the Exchequer, on the one hand, refusing to pay our fair share, nor, on the other hand of failing to maintain the public expenditure targets. [HON. MEMBERS: "How much?"] I come now—[HON. MEMBERS: "How much?"] I have explained the position and my right hon. Friend the Secretary of State for the Social Services will make a statement at the earliest practical moment.
  Hon. Members: When?
  Mr. Speaker: Order. We must listen to each side equally.
  Mr. Jenkins: I now come to the Budget itself. In answering any debate of this sort, my desire is to help the House by singling out the main line of criticism

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  and meeting it head on. This year—[HON. MEMBERS: "How much?"] I am perfectly prepared to wait—[HON. MEMBERS: "How much?"] This year I find this peculiarly difficult—[Laughter.] I am perfectly happy for hon. Member to laugh themselves out.
  Lord Balniel: If the right hon. Gentleman wishes to assist the House and if he is anxious to meet the challenge head on, will he say, simply, what is the contribution?
  Mr. Jenkins: I have explained exactly why we cannot do that. While I have no desire to conceal that it will be substantial, and while there is no proposition to shift the proportion of benefit, my right hon. Friend will make a statement at the earliest possible moment.
  Mr. Noble Mr. Noble rose—
  Hon. Members: Sit down.
  Mr. Jenkins: This year, in dealing with the Budget itself. I find it peculiarly difficult—[HON. MEMBERS: "Hear, hear."]—to single out a main line of criticism because the Opposition are suffering at present from almost total schizophrenia in their approach to our economic problems. Before the Budget, they made it as clear as they possibly could that they were totally opposed to any further squeeze on the economy by Budgetary means. The right hon. Member for Bexley (Mr. Heath), at Scarborough on 22nd March, wanted £400 million off taxation. I will come a little later to his somewhat dubious method of making that possible. What was abundantly clear was that he wanted, even on his own optimistic assumptions, a neutral Budget, and on most other people's assumptions, a strongly reflationary one. The right hon. Member for Barnet, always a little wiser in these matters, did not talk about £400 million but lined himself up firmly behind neutrality, or less, in last week's Sunday Express and again in his speech tonight.
  I did not go for neutrality, I went, on very cautious estimates, for a £200 million to £250 million reduction of the pressure of demand on the economy. I went for that, first, without any allowance for the continuing effect of the Regulator,
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  used less than five months ago and judged to reach its full effect only in the second half of this year; second, without any allowance for the monetary squeeze; and third, without any allowance for the new savings scheme. Nevertheless, some Press commentators, including a few who had spent the previous few weeks urging me not to depress the economy, expressed themselves disappointed that I had not done more. Consumption, which they had said was flagging, they now complain has not been hit hard enough.
  This Press reaction has presented the Opposition with an agonising choice, because they cannot see a band-wagon, however rickety, however slowly it is moving, however firmly it is going in the opposite direction from that in which they said they wanted to go, without that uneasy feeling that they ought to get on it.
  As a result, we have had in the course of the debate a number of speeches in sharp contradiction to the right hon. Gentleman and edging towards that bandwagon. The most significant and I think in many ways the most perceptive speech in the debate from the Front Bench opposite was that by the right hon. Member for Leeds, North-East (Sir K. Joseph). The Budget, he said, was a gambler's Budget. I asked whether he thought that I ought to have done more and he said that he would come to that. Of course he did not come to it. He could not have done so without completely disowning his own leader. The hon. Member for Wan-stead and Woodford (Mr. Patrick Jenkin), the hon.Member for Cities of London and Westminster (Mr. John Smith), the hon. Member for Acton (Mr. Kenneth Baker), the hon. Member for Walsall, South (Sir H. d'Avigdor-Goldsmid) and the hon. Member for Worthing (Mr. Higgins) also moved tentatively in that direction.
  Sir Keith Joseph: The right hon. Gentleman has been kind enough to refer to me. I mentioned the alternative. I said that it was too late for the Labour Government to adopt it, but that the alternative was cutting public expenditure and encouraging business by incentives and competition.
  Mr. Jenkins: The right hon. Gentleman came on to that in one sentence—[Interruption.] He gave no indication—[Interruption.]
  Mr. Speaker: Order. The House has listened to one winding-up speech reasonably. It must listen to the other one reasonably.
  Mr. Jenkins: The right hon. Gentleman came on to that in one sentence. As he knows perfectly well, that is sloganising, not giving a Budget judgment. The right hon. Member for Enfield, West (Mr. Iain Macleod) did not move in any direction at all. He did not give us the benefit of his judgment—it may be for a very good reason. [Interruption.] I have published far more in forecasts and the background to our thinking than was ever done by any Conservative Chancellor of the Exchequer. If the Opposition are so attracted by this, why did they refrain from ever publishing a forecast on which the House could reach a sensible judgment?
  Mr. Anthony Kershaw: How much will the contributions be?
  Mr. Jenkins: I have told the House—
  Mr. Speaker: Order. The hon. Member for Stroud (Mr. Kershaw) must control himself.
  Mr. Jenkins: I have told the House the position so far as I am able to do so. What I can say is that there is no variation in the method of financing which could mean more than a difference in demand of £10 million at an annual rate in the fourth quarter of this financial year. Therefore, this is well within any possible margin of error, and there can be no question of its prejudicing the general Budget judgment.
  Mr. Edward Heath: If the Chancellor of the Exchequer can say that his Budget judgment is not affected by more than £10 million in the last quarter of this year by what he proposes to take out in contributions to the National Insurance scheme, why does he not frankly tell the country what it has to pay for the increase in pensions?
  Mr. Jenkins: Because, as I have told the right hon. Gentleman and the House clearly, and as he can understand quite well if he wishes to do so, we have to work out the details how, in the transition to an earnings-related pension scheme, this can most fairly be placed on different individuals.
  158
  I come back—[HON. MEMBERS: "Get on."] I am sure that the House, which has debated the Budget for four days, wishes to listen to the reply to the various points which have been made. I come back to the right hon. Member for Enfield, West, who, as I say, never tells us his Budget judgment. But there is a certain built-in consistency about his speeches, and that is rather natural because a large part of them consists of quotations from his own speeches. For one happy moment, when he was finishing his speech, which was distinguished, as usual, by the lack of any clear alternative policy, I thought he was reserving the more constructive part of his economic analysis for his television performance. But, unfortunately, I was disappointed. It was totally barren.
  If he will forgive the allusion, the right hon. Gentleman reminded me of the quack doctor in Donizetti's opera "The Elixer of Love" who arrives in the market place, sets up his stall and never bothers us with his diagnosis but tells us that his potions will cure everything. They sound cheap, and he promises us that they will work—to abolish S.E.T., to get rid of Purchase Tax, to ease the burden on the motorist and to reduce direct taxation. The only difference is that instead of the little black bag, we now have his famous computer.
  I must come back, as I said I would, to the Leader of the Opposition. His speech at Scarborough must clearly have been carefully thought out. I take two of his recipes. First he was prepared to score £250 million for a savings scheme and to reduce taxation by that amount in advance. On Tuesday he gave a reasonably warm welcome to my savings scheme, and for that I am grateful, as for some other kind things he then said. Of course, the right hon. Gentleman was then speaking at short notice.
  The right hon. Member for Enfield, West, however, after 24 hours' reflection, also gave the scheme a good reception. He said that:
  "there is so little between us."—[OFFICIAL REPORT, 16th April, 1969; Vol. 781, c. 1164]
  I therefore assumed that while there might certainly have been some differences, right hon. Gentlemen opposite were not pretending that their scheme would have been radically different from my own.

  159
  This is where the radical difference lies. The Leader of the Opposition would have gambled on his scheme to the extent of reducing taxation in advance by £250 million on the basis of it—a gambler's Budget indeed.
  Sir Knox Cunningham: Satan rebuking sin.
  Mr. Jenkins: But then we have the Opposition totally split on this issue, too. The right hon. Member for Wolverhampton, South-West (Mr. Powell), to whose speech we listened with great interest and attention this afternoon, gave us his speech on savings a few days later. First, speaking at Widnes, he said:
  "Savings as such have nothing to do with taxation".
  Then he went on:
  "The total volume of personal saving is irrelevant. It is irrelevant whether personal saving is increasing or diminishing. All that matters is whether more is being lent to the Government".
  The Government themselves will borrow nothing this year. Quite the reverse. They will be a large net repayer of debt.
  I thought that the right hon. Member for Wolverhampton, South-West was being a little ungrateful. There was no need to slap his leaders in the face quite as quickly. After all, the Leader of the Opposition had been doing his best to be a half-pint Enoch.
  The right hon. Member for Wolverhampton, South-West had gone to Morecambe in October and told us that Income Tax could be reduced to 4s. 3d. in the £. So the Leader of the Opposition went to Scarborough in March and told us that £400 million could easily come off taxation. It is a fairly typical pattern, and in the circumstances five months is not an unreasonable delay. The right hon. Member for Wolverhampton, South-West ought to give a little more encouragement to his reluctant but faithful follower.
  I said that I would deal with one of the other recipes of the Leader of the Opposition. He said that Bank Rate should be immediately cut to 6 per cent. He stigmatised the extra 2 per cent. as a premium which a bad borrower had to pay. Let me remind him that the United States discount rate is today 6 per cent.
  160
  and that a Government of which he was a member twice put Bank Rate to 7 per cent., on each occasion—[Interruption.]—using United States discount rate—[Interruption.]
  Mr. Speaker: Order. The Opposition must allow the Chancellor to make his speech.
  Mr. Jenkins: It is, I think, normal for a more self-confident Leader of the Opposition to leave people behind him to do the shouting.
  The Government of which the right hon. Gentleman was a member twice put up Bank Rate to 7 per cent. with the U.S. discount rate on each occasion at 3 per cent.—not 6 per cent. but 3 per cent. If his logic had begun to be right they would have been paying a far higher premium for whatever deficiencies were thought to belong to them.
  But a much more important and serious point is this. If the right hon. Gentleman were to make his unilateral cut he would, apart from other consequences, have made it absolutely clear that he had no intention of pursuing a tight monetary policy at home. He would, therefore, be compounding the recklessness of his tax concessions. Let there be no doubt, therefore, that the official Opposition policy would be to take every possible risk with the balance of payments, to run counter to the experience of every comparable country and the practice which they themselves followed when they had responsibility and not merely an incontinent appetite for votes.
  What is the right hon. Gentleman's long-stop position? It is, of course, the all-purpose remedy. We had it again tonight from the right hon. Member for Barnet. When the Leader of the Opposition was asked by the Financial Times what he would do if his "at best a neutral budget"—that newspaper's phrase, which he did not challenge—damaged the balance of payments, he answered:
  "If the Chancellor wants, as you say, to have something in reserve, then he must do it through Government expenditure. There are many other places"—
  he went on—
  'where he could reduce Government expenditure, where he could hold it back, where he could delay projects."

  161
  Maybe there are, but we do not have them advocated from the benches opposite in this House. All we get is the suggestion of a change in the agricultural price system with its substantially inflationary effect on food prices, and a rag bag of unquantified and largely unspecified administrative savings.
  And what do we get to balance this? Apart from a potentially vast commitment to maintain a presence in the Far East, which would either be very expensive or dangerously derisory, we get from the benches opposite more demands for additional expenditure. The right hon. Gentleman has himself voted for pension increases for special categories in the past few months, and they would hardly cost less than £100 million. A short time before, his right hon. Friend had just voted for another costing up to £60 million. The list goes on almost endlessly—keep Civil Defence, keep the Territorial Army, stay in the E.L.D.O., go ahead with C.E.R.N., support any conceivable aircraft project, spend more on roads, give more generous agricultural price reviews.
  The fact of the matter is that the attitude of the Opposition to public expenditure is a disorganised hypocrisy. It must mean either that they discount the chances of their coming to power or that they discount, and expect the country to discount, the value of their own words.
  So I turn back from the dismal and confused picture opposite to the adequacy of the measures which I have chosen. I believe them to be adequate. No Chancellor can be certain. He has to balance the risks of not doing enough for the balance of payments with those of over-depressing the economy. I have struck what, according to my judgment, is the best balance. If I had thought that more would be right I would have done it.
  I have no doubt a lot of criticisms can be and have been levelled against my actions in the past 17 months, but I should not have thought that I could be seriously accused of failure to impose unpopular taxation when I believed it to be necessary. My measures last week must be considered, both in totality and in their composition, in relation to the use of the Regulator in November, which bore almost exclusively upon individual consumption, and to the tough monetary policy which, fortified by an unprecedented
  162
  overall Government surplus, I am determined to enforce.
  On the composition of the measures, there has been criticism that they bear too heavily on companies. I do not agree. There has certainly been no prejudice on my part; otherwise I would not have done what I did—a good deal more than was expected—for close companies. I want to see companies prosper, but it is no part of my purpose to use a period of necessary stringency both in public expenditure and in general taxation to promote a shift from those who earn to those who own. Companies whose profits have been buoyant must therefore pay their share. Nor can I regard it as illogical that, when the economy has to be squeezed for balance of payments purposes, company liquidity should be subjected to part of the pressure. It is indeed a very extraordinary argument for hon. Gentlemen opposite to advance. If this were so, why did Lord Butler in 1952 introduce the new and cumbersome device of the Excess Profits Levy? Why did Mr. Macmillan in 1956 suspend investment allowances entirely? Why did Lord Amory increase the Profits Tax in 1960, and why did the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd) do it again in 1961?
  Part of the opposition has also treated S.E.T. as essentially a company imposition. That was the view taken by the right hon. Member for Enfield, West, the right hon. Member for Leeds, North-East and by the hon. Members for Wanstead and Woodford and Acton. But here again the Opposition are split down the middle like a filleted herring. The right hon. Member for Kingston-upon-Thames (Mr. Boyd-Carpenter) and the hon. Members for Horsham (Mr. Hordern) and Gillingham (Mr. Burden) took a completely different view. They thought that the tax would be fully passed on, and more than fully. With great respect, both these points of view cannot possibly be true. To the extent that the consumer pays the tax, it is not a squeeze on company profits, and even to the extent that he does not, it is not wholly such a squeeze. In some cases it may reduce margins; in others it may be absorbed without such a reduction by a more efficient use of labour, which is undoubtedly of benefit to our central economic purpose. All the evidence of the past two years suggests that there has been an

  163
  element of all three. There has been some effect on prices—of course there has—but it has been much less than the effect of raising the equivalent amount of revenue by means of traditional indirect taxation. I also believe that the effect of this increase has on the whole been more fairly spread than an equivalent increase in the cost of goods.
  Service trades increase as society gets richer. There is nothing wrong with such an increase. The right hon. Member for Barnet is quite wrong to think that I do not believe that this is a reasonable development. But, because it is a reasonable development, it does not mean that service trades should not pay their fair share of tax as well as goods. It is both a natural and a desirable development, provided that it does not mean, as was the case in the early 1960s, that nearly all our new labour is sucked into service trades and not into our manufacturing base.
  It follows that as a richer society uses more services, so the richer members of society use more than do the poorer ones. It is, therefore, the case that some shift of the balance of taxation between goods and services makes indirect taxation less regressive.
  Moreover, there is no question of the price increases to which Selective Employment Tax may lead not being fully taken into account in the one-half per cent. increase in the retail price index which I gave as the total effect of the Budget.
  In my view, therefore, the Budget is fair and relevant, and the Daily Telegraph Gallup Poll, even if not very prominently printed, shows that view to be shared by a very large section of the public. While
  right hon. Gentlemen opposite do not share that view, which is predictable, they describe it—and this is another cue for them to cheer—as a "fag end" Budget. As that phrase was used by the right hon. Member for Bexley and repeated by the right hon. Member for Enfield, West on Wednesday, many people must have thought that it was an original phrase. But there is one right hon. Member opposite who knew that it was not and in whose mind it must have struck a chord. That is the right hon. Member for Barnet, because the phrase was the headline used in a national daily newspaper about his Budget in 1964"—"A Fag End Budget". The trouble is—
  Mr. Heath Mr. Heath rose—
  Mr. Jenkins: No, I will not give way. I know the right hon. Gentleman's technique of getting up at this time—
  Mr. Heath Mr. Heath rose—
  Mr. Jenkins: No, I will not give way. The trouble with the right hon. Gentleman is that even his best—
  Mr. Heath Mr. Heath rose—
  Hon. Members: Sit down.
  Mr. Jenkins: The trouble with the right hon. Gentleman is that even his best phrases are second-hand—
  Mr. Heath Mr. Heath rose—
  Hon. Members: Sit down.
  Mr. Jenkins: The right hon. Gentleman's argument is predictable, shop-soiled and irresponsible.
  Question put:—
  The House divided: Ayes 322, Noes 253.

  Division No. 160.]

  AYES

  [10.0 p.m.

  Albu, Austen

  Bennett, James (G'gow, Bridgeton)

  Brown, Bob (N'c'tle-upon-Tyne, W.)

  Allaun, Frank (Salford, E.)

  Bidwell, Sydney

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

  Alldritt, Walter

  Binns, John

  Buchan, Norman

  Anderson, Donald

  Bishop, E. S.

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

  Archer, Peter

  Blackburn, F.

  Butler, Herbert (Hackney, C.)

  Ashley, Jack

  Blenkinsop, Arthur

  Butler, Mrs. Joyce (Wood Green)

  Ashton, Joe (Bassetlaw)

  Boardman, H. (Leigh)

  Callaghan, Rt. Hn. James

  Atkins, Ronald (Preston, N.)

  Booth, Albert

  Cant, R. B.

  Atkinson, Norman (Tottenham)

  Boston, Terence

  Carmichael, Neil

  Bacon, Rt. Hn. Alice

  Bottomley, Rt. Hn. Arthur

  Castle, Rt. Hn. Barbara

  Bagier, Gordon A. T.

  Boyden, James

  Chapman, Donald

  Barnes, Michael

  Bradley, Tom

  Coe, Denis

  Barnett, Joel

  Bray, Dr. Jeremy

  Coleman, Donald

  Baxter, William

  Brooks, Edwin

  Concannon, J. D.

  Beaney, Alan

  Broughton, Dr. A. D. D.

  Conlan, Bernard

  Bence, Cyril

  Brown, Rt. Hn. George (Belper)

  Corbet, Mrs. Freda

  Benn, Rt. Hn. Anthony Wedgwood

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

  Craddock, George (Bradford, S.)

  Crawshaw, Richard

  Huckfield, Leslie

  Neal, Harold

  Cronin, John

  Hughes, Rt. Hn. Cledwyn (Anglesey)

  Newens, Stan

  Crosland Rt. Hn. Anthony

  Hughes, Emrys (Ayrshire, S.)

  Oakes, Gordon

  Crossman, Rt. Hn. Richard

  Hughes Hector (Aberdeen, N.)

  Ogden, Eric

  Cullen, Mrs. Alice

  Hughes, Roy (Newport)

  O'Malley, Brian

  Dalyell, Tam

  Hunter, Adam

  Oram, Albert E.

  Darling, Rt. Hn. George

  Hynd, John

  Orbach, Maurice

  Davidson, Arthur (Accrington)

  Irving, Sir Arthur (Edge Hill)

  Oswald, Thomas

  Davies, Ednyfed Hudson (Conway)

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

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

  Davies, Dr. Ernest (Stretford)

  Jackson, Peter M. (High Peak)

  Owen, Will (Morpeth)

  Davies, G. Elfed (Rhondda, E.)

  Janner, Sir Barnett

  Padley, Walter

  Davies, Rt. Hn. Harold (Leek)

  Jay, Rt. Hn. Douglas

  Page, Derek (King's Lynn)

  Davies, Ifor (Gower)

  Jeger, George (Goole)

  Paget, R. T.

  Davies, S. O. (Merthyr)

  Jeger, Mrs. Lena (H'b'n & St. P'cras, S.)

  Palmer, Arthur

  de Freitas, Rt. Hn. Sir Geoffrey

  Jenkins, Hugh (Putney)

  Pannell, Rt. Hn. Charles

  Delargy, Hugh

  Jenkins, Rt. Hn. Roy (Stechford)

  Park, Trevor

  Dell, Edmund

  Johnson, Carol (Lewisham, S.)

  Parker, John (Dagenham)

  Dempsey, James

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

  Parkin, Ben (Paddington, N.)

  Dewar, Donald

  Jones, Dan (Burnley)

  Parkyn, Brian (Bedford)

  Diamond, Rt. Hn. John

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

  Pavitt, Laurence

  Dobson, Ray

  Jones, J. Idwal (Wrexham)

  Pearson, Arthur (Pontypridd)

  Doig, Peter

  Jones, T. Alec (Rhondda, West)

  Peart, Rt. Hn. Fred

  Driberg, Tom

  Judd, Frank

  Pentland, Norman

  Dunn, James A.

  Kelley, Richard

  Perry, Ernest G. (Battersea, S.)

  Dunnett, Jack

  Kenyon, Clifford

  Perry, George H. (Nottingham, S.)

  Dunwoody, Mrs. Gwyneth (Exeter)

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

  Prentice, Rt. Hn. R. E.

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

  Kerr, Dr. David (W'worth, Central)

  Price, Christopher (Perry Barr)

  Eadie, Alex

  Lawson, George

  Price, Thomas (Westhoughton)

  Edelman, Maurice

  Leadbitter, Ted

  Price, William (Rugby)

  Edwards, William (Merioneth)

  Lee, Rt. Hn. Frederick (Newton)

  Probert, Arthur

  Ellis, John

  Lee, Rt. Hn. Jennie (Cannock)

  Pursey, Cmdr. Harry

  English, Michael

  Lee, John (Reading)

  Rankin, John

  Ennals, David

  Lestor, Miss Joan

  Rees, Merlyn

  Ensor, David

  Lever, Harold (Cheetham)

  Reynolds, Rt. Hn. G. W.

  Evans, Albert (Islington, S. W.)

  Lever, L. M. (Ardwick)

  Rhodes, Geoffrey

  Evans, Fred (Caerphilly)

  Lewis, Arthur (W. Ham, N.)

  Richard, Ivor

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

  Lewis, Ron (Carlisle)

  Roberts, Albert (Normanton)

  Fernyhough, E.

  Lipton, Marcus

  Roberts, Rt. Hn. Goronwy

  Finch, Harold

  Lomas, Kenneth

  Roberts, Gwilym (Bedfordshire, S.)

  Fitch, Alan (Wigan)

  Loughlin, Charles

  Robertson, John (Paisley)

  Fletcher Rt. Hn. Sir Eric (Islington, E.)

  Luard, Evan

  Robinson, Rt. Hn. Kenneth (St. P'c'as)

  Fletcher, Raymond (Ilkeston)

  Lyon, Alexander W. (York)

  Rodgers, William (Stockton)

  Fletcher, Ted (Darlington)

  Mabon, Dr. J. Dickson

  Roebuck, Roy

  Foley, Maurice

  McCann, John

  Rogers, George (Kensington, N.)

  Foot, Rt. Hn. Sir Dingle (Ipswich)

  MacColl, James

  Rose, Paul

  Foot, Michael (Ebbw Vale)

  MacDermot, Niall

  Ross, Rt. Hn. William

  Ford, Ben

  Macdonald, A. H.

  Rowlands, E.

  Forrester, John

  McGuire, Michael

  Ryan, John

  Fowler, Gerry

  McKay, Mrs. Margaret

  Shaw, Arnold (Ilford, S.)

  Fraser, John (Norwood)

  Mackenzie, Gregor (Rutherglen)

  Sheldon, Robert

  Freeson, Reginald

  Mackie, John

  Shinwell, Rt. Hn. E.

  Galpern, Sir Myer

  Mackintosh, John P.

  Shore, Rt. Hn. Peter (Stepney)

  Gardner, Tony

  Maclennan, Robert

  Short, Rt. Hn. Edward (N'c'tle-u-Tyne)

  Garrett, W. E.

  MacMillan, Malcolm (Western Isles)

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

  Ginsburg, David

  McMillan, Tom (Glasgow, C.)

  Silkin, Rt. Hn. John (Deptford)

  Gray, Dr. Hugh (Yarmouth)

  McNamara, J. Kevin

  Silverman, Julius

  Greenwood, Rt. Hn. Anthony

  MacPherson, Malcolm

  Skeffington, Arthur

  Gregory, Arnold

  Mahon, Peter (Preston, S.)

  Slater, Joseph

  Griffiths, David (Rother Valley)

  Mahon, Simon (Bootle)

  Small, William

  Griffiths, Eddie (Brightside)

  Mallalieu, E. L. (Brigg)

  Spriggs, Leslie

  Griffiths, Rt. Hn. James (Llanelly)

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

  Steele, Thomas (Dunbartonshire, W.)

  Griffiths, Will (Exchange)

  Manuel, Archie

  Stewart, Rt. Hn. Michael

  Gunter, Rt. Hn. R. J.

  Mapp, Charles

  Stonehouse, Rt. Hn. John

  Hamilton, James (Bothwell)

  Marks, Kenneth

  Strauss, Rt. Hn. G. R.

  Hamilton, William (Fife, W.)

  Marquand, David

  Summerskill, Hn. Dr. Shirley

  Hamling, William

  Marsh, Rt. Hn. Richard

  Swain, Thomas

  Hannan, William

  Mason, Rt. Hn. Roy

  Symonds, J. B.

  Harper, Joseph

  Maxwell, Robert

  Taverne, Dick

  Harrison, Walter (Wakefield)

  Mayhew, Christohper

  Thomas, Rt. Hn. George

  Hart, Rt. Hn. Judith

  Mellish, Rt. Hn. Robert

  Thomson, Rt. Hn. George

  Haseldine, Norman

  Mendelson, John

  Thornton, Ernest

  Hattersley, Roy

  Mikardo, Ian

  Tinn, James

  Hazell, Bert

  Millan, Bruce

  Tomney, Frank

  Healey, Rt. Hn. Denis

  Miller, Dr. M. S.

  Tuck, Raphael

  Henig, Stanley

  Milne, Edward (Blyth)

  Urwin, T. W.

  Herbison, Rt. Hn. Margaret

  Mitchell, R. C. (S'th'pton, Test)

  Varley, Eric G.

  Hilton, W. S.

  Molloy, William

  Walden, Brian (All Saints)

  Hobden Dennis

  Moonman, Eric

  Walker, Harold (Doncaster)

  Hooley, Frank

  Morgan, Elystan (Cardiganshire)

  Wallace, George

  Horner, John

  Morris, Alfred (Wythenshawe)

  Watkins, David (Consett)

  Houghton, Rt. Hn. Douglas

  Morris, Charles R. (Openshaw)

  Watkins, Tudor (Brecon Radnor)

  Howarth, Robert (Bolton, E.)

  Morris John (Aberavon)

  Weitzman, David

  Howell, Denis (Small Heath)

  Moyle, Roland

  Wellbeloved, James

  Howie, W.

  Mulley, Rt. Hn. Frederick

  Wells, William (Walsall, N.)

  Hoy, James

  Murray, Albert

  Whitaker, Ben

  166

  167

  White, Mrs. Eirene

  Williams, Mrs. Shirley (Hitchin)

  Woof, Robert

  Whitlock, William

  Williams, W. T. (Warrington)

  Wyatt, Woodrow

  Wilkins, W. A.

  Willis, Rt. Hn. George

  Willey, Rt. Hn. Frederick

  Wilson, Rt. Hn. Harold (Huyton)

  TELLERS FOR THE AYES:

  Williams, Alan (Swansea, W.)

  Wilson, William (Coventry, S.)

  Mr. Charles Grey and

  Williams, Alan Lee (Hornchurch)

  Winnick, David

  Mr. Neil McBride.

  Williams, Clifford (Abertillery)

  Woodburn, Rt. Hn. A.

  NOES

  Alison, Michael (Barkston Ash)

  Fortescue, Tim

  McNair-Wilson, M. (Walthamstow, E.)

  Allason, James (Hemet Hepstead)

  Foster, Sir John

  McNair-Wilson, Patrick (New Forest)

  Astor, John

  Fraser, Rt. Hn. Hugh (St'fford & Stone)

  Maddan, Martin

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

  Galbraith, Hn. T. G.

  Maginnis, John E.

  Awdry, Daniel

  Gilmour, Ian (Norfolk, C.)

  Marples, Rt. Hn. Ernest

  Baker, Kenneth (Acton)

  Gilmour, Sir John (Fife, E.)

  Marten, Neil

  Baker, W. H. K. (Banff)

  Glover, Sir Douglas

  Maude, Angus

  Balniel, Lord

  Glyn, Sir Richard

  Maudling, Rt. Hn. Reginald

  Barber, Rt. Hn. Anthony

  Godber, Rt. Hn. J. B.

  Mawby, Ray

  Batsford, Brian

  Goodhart, Philip

  Maxwell-Hyslop, R. J.

  Beamish, Col. Sir Tufton

  Goodhew, Victor

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

  Bell, Ronald

  Gower, Raymond

  Mills, Peter (Torrington)

  Bennett, Sir Frederic (Torquay)

  Grant, Anthony

  Mills, Stratton (Belfast, N.)

  Bennett, Dr. Reginald (Gos. & Fhm)

  Grant-Ferris, R.

  Miscampbell, Norman

  Berry, Hn. Anthony

  Gresham Cooke, R.

  Mitchell, David (Basingstoke)

  Bessell, Peter

  Grffiths, Eldon (Bury St. Edmunds)

  Monro, Hector

  Biffen, John

  Grimond, Rt. Hn. J.

  Montgomery, Fergus

  Biggs-Davison, John

  Gurden, Harold

  Morgan, Geraint (Denbigh)

  Birch, Rt. Hn. Nigel

  Hall, John (Wycombe)

  Morgan-Giles, Rear-Adm.

  Black, Sir Cyril

  Hall-Davis, A. C. F.

  Morrison, Charles (Devizes)

  Blaker, Peter

  Hamilton, Lord (Fermanagh)

  Mott-Radclyffe Sir Charles

  Boardman, Tom (Leicester, S. W.)

  Hamilton, Michael (Salisbury)

  Munro-Lucas-Tooth, Sir Hugh

  Body, Richard

  Harris, Frederic (Croydon, N. W.)

  Murton, Oscar

  Boyd-Carpenter, Rt. Hn. John

  Harris, Reader (Heston)

  Nabarro, Sir Gerald

  Boyle, Rt. Hn. Sir Edward

  Harrison, Brian (Maldon)

  Neave, Airey

  Braine, Bernard

  Harrison, Col. Sir Harwood (Eye)

  Nicholls, Sir Harmar

  Brewis, John

  Harvie Anderson, Miss

  Noble, Rt. Hn. Michael

  Brinton, Sir Tatton

  Hastings, Stephen

  Nott, John

  Bromley-Davenport, Lt. -Col. Sir Walter

  Hawkins, Paul

  Onslow, Cranley

  Brown, Sir Edward (Bath)

  Hay, John

  Orr-Ewing, Sir Ian

  Bruce-Gardyne, J.

  Heald, Rt. Hn. Sir Lionel

  Osborn, John (Hallam)

  Bryan, Paul

  Heath, Rt. Hn. Edward

  Osborne, Sir Cyril (Louth)

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

  Heseltine, Michael

  Page, Graham (Crosby)

  Buck, Antony (Colchester)

  Higgins, Terence L.

  Page, John (Harrow, W.)

  Bullus, Sir Eric

  Hiley, Joseph

  Pardoe, John

  Burden, F. A.

  Hill, J. E. B.

  Pearson, Sir Frank (Clitheroe)

  Campbell, B. (Oldham, W.)

  Hirst, Geoffrey

  Peel, John

  Campbell, Gordan (Moray & Nairn)

  Hogg, Rt. Hn. Quintin

  Percival, Ian

  Carlisle, Mark

  Holland, Philip

  Peyton, John

  Carr, Rt. Hn. Robert

  Hooson, Emlyn

  Pike, Miss Mervyn

  Channon, H. P. G.

  Hordern, Peter

  Pink, R. Bonner

  Chichester-Clark, R.

  Hornby, Richard

  Pounder, Rafton

  Clark, Henry

  Howell, David (Guildford)

  Powell, Rt. Hn. J. Enoch

  Clegg, Walter

  Hunt, John

  Price, David (Eastleigh)

  Cooper-Key, Sir Neill

  Hutchison Michael Clark

  Prior, J. M. L.

  Cordle, John

  Iremonger, T. L.

  Pym, Francis

  Costain, A. P.

  Irvine, Bryant Godman (Rye)

  Quennell, Miss J. M.

  Craddock, Sir Beresford (Spelthorne)

  Jenkin, Patrick (Woodford)

  Ramsden, Rt. Hn. James

  Crouch, David

  Johnson Smith, G. (E. Grinstead)

  Rawlinson, Rt. Hn. Sir peter

  Crowder, F. P.

  Johnston, Russell (Inverness)

  Rees-Davies, W. R.

  Cunningham, Sir Knox

  Jones, Arthur (Northants, S.)

  Renton, Rt. Hn. Sir David

  Currie, G. B. H.

  Jopling, Michael

  Rhys Williams, Sir Brandon

  Dalkeith, Earl of

  Joseph, Rt. Hn. Sir Keith

  Ridley, Hn. Nicholas

  Dance, James

  Kaberry, Sir Donald

  Ridsdale, Julian

  Davidson, James (Aberdeenshire, W.)

  Kerby, Capt. Henry

  Rippon, Rt. Hn. Geoffrey

  d'Avigdor-Goldsmid, Sir Henry

  Kershaw, Anthony

  Rodgers, Sir John (Sevenoaks)

  Dean, Paul

  Kimball, Marcus

  Rossi, Hugh (Hornsey)

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

  King, Evelyn (Dorset, S.)

  Royle, Anthony

  Digby, Simon Wingfield

  Kirk, Peter

  Russell, Sir Ronald

  Dodds-Parker, Douglas

  Kitson, Timothy

  St. John-Stevas, Norman

  Donnelly, Desmond

  Lambton, Viscount

  Sandys, Rt. Hn. D.

  Doughty, Charles

  Lancaster, Col. C. G.

  Scott, Nicholas

  Douglas-Home, Rt. Hn. Sir Alec

  Lane, David

  Scott-Hopkins, James

  Drayson, G. B.

  Langford-Holt, Sir John

  Sharples, Richard

  du Cann, Rt. Hn. Edward

  Legge-Bourke, Sir Harry

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

  Eden, Sir John

  Lewis, Kenneth (Rutland)

  Silvester, Frederick

  Elliot, Capt. Walter (Carshalton)

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

  Sinclair, Sir George

  Emery, Peter

  Lloyd, Rt. Hn. Selwyn (Wirral)

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

  Errington, Sir Eric

  Longden, Gilbert

  Smith, John (London & W'minster)

  Evans, Gwynfor (C'marthen)

  Lubbock, Eric

  Speed, Keith

  Ewing, Mrs. Winifred

  MacArthur, Ian

  Stainton, Keith

  Eyre, Reginald

  Macleod, Rt. Hn. Iain

  Steel, David (Roxburgh)

  Farr, John

  McMaster, Stanley

  Stodart, Anthony

  Fisher, Nigel

  Macmillan, Maurice (Farnham)

  Stoddart-Scott, Col. Sir M.

  168

  169

  Summers, Sir Spencer

  Waddington, David

  Wilson, Geoffrey (Truro)

  Tapsell, Peter

  Wainwright, Richard (Colne Valley)

  Winstanley, Dr. M. P.

  Taylor, Sir Charles (Eastbourne)

  Walker, Peter (Worcester)

  Wolrige-Gordon, Patrick

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

  Walker-Smith, Rt. Hn. Sir Derek

  Woodnutt, Mark

  Taylor, Frank (Moss Side)

  Wall, Patrick

  Worsley, Marcus

  Thatcher, Mrs. Margaret

  Walters, Dennis

  Wylie, N. R.

  Thorpe, Rt. Hn. Jeremy

  Ward, Dame Irene

  Younger, Hn. George

  Tilney, John

  Weatherill, Bernard

  Turton, Rt. Hn. R. H.

  Wells, John (Maidstone)

  TELLERS FOR THE NOES:

  van Straubenzee, W. R.

  Whitelaw, Rt. Hn. William

  Mr. R. W. Elliott and

  Vaughan-Morgan, Rt. Hn. Sir John

  Wiggin, A. W.

  Mr. Jasper More.

  Victors, Dame Joan

  Williams, Donald (Dudley)

  Resolved,
  That it is expedient to amend the law with respect to the National Debt and the public revenue and to make further provision in connection with finance, so, however, that—

  (a) without prejudice to any authorisation by virtue of any Resolution relating to purchase tax, selective employment tax or selective employment payments, this Resolution does not extend to the making of amendments of the enactments relating to either of those taxes so as to give relief therefrom;

  (b) this Resolution does not extend to making amendments of the provisions of the Customs (Import Deposits) Act 1968 so as to give relief from the import deposits required by those provisions to be paid, other than amendments making the same provision for all goods on which such deposits are so required to be paid.

  BUSINESS OF THE HOUSE
  Ordered,
  That the Proceedings on the Motions relating to Ways and Means and to Procedure, the Army Reserve Bill and the Customs Duties (Dumping and Subsidies) Bill [Lords] may be entered upon and proceeded with at this day's Sitting at any hour, though opposed.—[Mr. Harper.]

  TABLE: SPIRITS OTHER THAN IMPORTED PERFUMED SPIRITS (RATES OF CUSTOMS AND EXCISE DUTIES)

  Customs rates

  Description of spirits

  Excise rate

  Full

  Commonwealth

  Convention

  £

  s.

  d.

  £

  s.

  d.

  £

  s.

  d.

  £

  s.

  d.

  1 British spirits (per proof gallon)

  18

  17

  0

  —

  —

  —

  2 Imported spirits other than perfumed spirits—

  (a) not comprised below in this paragraph (per proof gallon)

  —

  18

  19

  6

  18

  17

  0

  18

  17

  0

  b) liqueurs, cordials, mixtures and other preparations in bottle, entered in such manner as to indicate that the strength is not to be tested (per gallon)

  —

  25

  12

  0

  25

  8

  6

  25

  8

  6

  each of the above rates of duty being, in the case of spirits not warehoused or warehoused for less than three years, increased by 1s. 6d. per proof gallon or, for spirits within paragraph 2(b) of this Table, by 2s. 0d. per gallon.

  In the Table above "Commonwealth" indicates goods qualifying for Commonwealth preference under section 2 of the Import Duties

  WAYS AND MEANS
  Mr. Speaker: The House must listen carefully. I am now required under Standing Order No. 90(2) to put successively without further debate the Question on each of the three remaining 39 Ways and Means Resolutions, on the three procedure Motions, and on the Motion relating to Finance [Money] on all of which the Finance Bill is to be brought in. Instead of reading out each Motion in extenso, I propose to follow the procedure used last year and the year before; that is to say, I shall first state the title of the Motion, and then put simply the Question, That the Motion be agreed to.
  2. SPIRITS (EXCISE AND CUSTOMS)
  Motion made, and Question,
  That, as from 16th April, 1969, the duties of excise chargeable under section 1 of the Finance Act 1964 on spirits, and the duties of customs chargeable under that section on spirits other than perfumed spirits, shall respectively be at the rates shown in the following Table instead of the rates shown in Table 1 of Schedule 1 to that Act as substituted by section 1(1) of the Finance Act 1968.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
  Act 1958, "Convention" indicates goods of Convention area origin within the meaning of the European Free Trade Association Act

  171
  1960 and "Full" indicates other goods.—[Mr. Roy Jenkins.]
  put forthwith pursuant to Standing Order No. 90(2) (Ways and Means motions), and agreed to.
  3. BEER (EXCISE AND CUSTOMS)
  Motion made, and Question,
  That—
  (a) as from 16th April, 1969, the duties of excise and customs chargeable on beer under section 2 of the Finance Act 1964 shall respectively be at the rates shown

  TABLE: BEER (RATES OF CUSTOMS AND EXCISE DUTIES AND DRAWBACKS)

  Customs rates (per 36 gallons)

  Excise rates (per 36 gallons)

  Full

  Commonwealth

  Convention

  £

  s.

  d.

  £

  s.

  d.

  £

  s.

  d.

  £

  s.

  d.

  1. Duty

  10

  7

  6

  11

  7

  6

  10

  7

  6

  10

  7

  6

  2. Drawback

  10

  7

  6

  11

  7

  6

  10

  7

  6

  10

  7

  6

  each of the above rates of duty and drawback being, in the case of beer of an original gravity exceeding 1030 degrees, increased by 8s. 9·6d. for each addiditional degree.

  As respects beer the worts whereof before fermentation were of a specific gravity of less than 1030 degrees the amount of drawback allowable shall not exceed the amount of the customs or excise duty shown to the satisfaction of the Commissioners of Custom and Excise to have been paid.
  In the Table above "Commonwealth" indicates goods qualifying for Commonwealth preference under section 2 of the Import Duties Act 1958, "Convention" indicates goods of Convention area origin within the meaning of the European Free Trade Association Act 1960 and "Full" indicates other goods.—[Mr. Roy Jenkins.]
  put forthwith pursuant to Standing Order No. 90(2) (Ways and Means motions), and agreed to.
  4. WINE (CUSTOMS)
  Motion made, and Question,
  That the duties of customs chargeable under section 3 of the Finance Act 1964 on wine, including the lees of wine, shall, as from 16th April, 1969, be at the rates shown below instead of the rates shown in Schedule 3 to that Act as substituted by section 1(1) of the Finance Act 1968 and shall—

  (a) in the case of light wine which qualifies for Commonwealth preference, be subject to section 3(3) of the said Act of 1964, or

  (b) in the case of goods of the Republic of Ireland consigned to the United Kingdom from that country, be subject to section 3(1)(b) of the said Act of 1968,

  as in the case of the rates shown in the said Schedule 3.
  below instead of the rates shown in Schedule 2 to that Act as substituted by section 1(2) of the Finance Act 1967;
  (b) as respects beer on which there have been paid duties of excise or customs at the rates shown below drawback shall be allowed in accordance with the said section 2 at the rates shown below instead of the rates shown in the said Schedule 2.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

  TABLE: WINE (RATES OF CUSTOMS DUTIES)

  Rates of duty (per gallo n

  Description of Wine

  Full

  Commonwealth

  £

  s.

  d.

  £

  s.

  d.

  Light wine:—

  Still—

  not in bottle

  1

  12

  3

  1

  10

  3

  in bottle

  1

  14

  9

  1

  11

  9

  Sparkling

  2

  4

  9

  2

  2

  9

  Other wine:—

  Still—

  not in bottle

  2

  14

  3

  2

  4

  3

  in bottle

  2

  16

  9

  2

  5

  9

  Sparkling

  3

  6

  9

  2

  16

  9

  together, in the case of wine exceeding 42 degrees proof spirit, with an addition for each additional degree or fraction of a degree of

  4

  6

  3

  8

  In the Table above "Commonwealth" indicates goods qualifying for Commonwealth preference under section 2 of the Import Duties Act 1958 and "Full" indicates other goods; and "light wine" means wine not exceeding 25 degrees or, in the case of wine qualifying for Commonwealth preference, 27 degrees of proof spirit.—[Mr. Roy Jenkins.]
  put forthwith pursuant to Standing Order No. 90(2) (Ways and Means motions), and agreed to.
  5. BRITISH WINE (EXCISE)
  Motion made, and Question,
  That as from 16th April 1969, the duties of excise chargeable under section 3 of the Finance Act 1964 on British wine shall be at the rates shown below instead of the rates shown in Schedule 4 to that Act as substituted by section 1(1) of the Finance Act 1968.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

  TABLE: BRITISH WINE (RATES OF EXCISE DUTIES)

  Description of British wine

  Rates of duty (per gallon)

  £

  s.

  d.

  Light British wine:—

  Still

  1

  9

  9

  Sparkling

  1

  15

  9

  Other British wine:—

  Still

  1

  14

  9

  Sparkling

  2

  0

  9

  In the Table above, "light British wine" means British wine not exceeding 27 degrees of proof spirit.—[Mr. Roy Jenkins.]

  TABLE: TOBACCO (RATES OF CUSTOMS AND EXCISE DUTIES AND DRAWBACKS)

  TABLE 1

  Rates of duty per pound

  Customs

  Full

  Commonwealth

  Convention

  Republic of Ireland

  £

  s.

  d.

  £

  s.

  d.

  £

  s.

  d.

  £

  s.

  d.

  TOBACCO

  1. Unmanufactured:

  Containing 10 per cent. or more by weight of moisture

  5

  0

  10

  4

  19

  3½

  5

  0

  10

  4

  19

  3½

  Other

  5

  1

  10

  5

  0

  1½

  5

  1

  10

  5

  0

  1½

  2. Manufactured, viz.:

  Cigars

  5

  9

  8½

  5

  6

  9

  5

  6

  9

  5

  6

  9

  Cigarettes

  5

  6

  4

  5

  3

  11½

  5

  1

  11½

  5

  1

  11½

  Cavendish or negrohead:

  Manufactured in bond

  5

  3

  4

  5

  1

  4½

  5

  3

  4

  5

  1

  4½

  Other

  5

  5

  4

  5

  3

  1

  5

  3

  1

  5

  3

  1

  Other

  5

  3

  7

  5

  1

  7½

  5

  0

  10

  5

  0

  10

  3. Snuff and snuff work (including tobacco dust or powder and ground tobacco)

  5

  4

  1

  5

  2

  0½

  5

  1

  10

  5

  1

  10

  put forthwith pursuant to Standing Order No. 90(2) (Ways and Means motions), and agreed to.
  6. TOBACCO (CUSTOMS AND EXCISE)
  Motion made, and Question,
  That—

  (a) as from 16th April 1969 the duties of customs and excise chargeable on tobacco under section 4 of the Finance Act 1964 shall be at the rates shown in Tables 1 and 2 below instead of at the rates shown in Tables 1 and 2 of Schedule 5 to that Act as amended by section 1(2) of the Finance Act 1965 and section 1(2) of the Finance Act 1968;

  (b) as respects tobacco on which there have been paid duties of customs or excise at the rates shown in Tables 1 and 2 below, drawback shall be allowed at the appropriate rate shown in Table 3 below instead of the rates shown in Table 3 in the said Schedule 5.

  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.

  175
  In the Tables above, "Commonwealth" indicates goods qualifying for Commonwealth preference under section 2 of the Import Duties Act 1958, "Convention" indicates goods at Convention area origin within the meaning of the European Free Trade Association Act 1960, "Republic of Ireland" indicates goods of the Republic of Ireland consigned to the United Kingdom from that country and "Full" indicates other goods.—[Mr. Roy Jenkins.]
  put forthwith pursuant to Standing Order No. 90(2) (Ways and Means motions), and agreed to.
  7. HYDROCARBON OILS (CUSTOMS AND EXCISE
  Motion made, and Question,
  That as from six o'clock in the evening of 15th April 1969—
  (a) the duty of customs on hydrocarbon oils and the duty of excise on hydrocarbon
  oils, on petrol substitutes and on spirits used for making power methylated spirits, shall be 4s. 6d. a gallon,
  (b) the rate at which rebate of customs or excise duty on hydrocarbon oils is allowed under section 199 of the Customs and Excise Act 1952 or section 6(4) of the Finance Act 1964 shall be 2·4 pence per gallon less than the rate at which the duty is charged.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.—[Mr. Roy Jenkins.]
  put forthwith pursuant to Standing Order No. 90(2) (Ways and Means motions).
  The House divided: Ayes 320, Noes 254.

  Division No. 161.]

  AYES

  [10.14 p.m.

  Albu, Austen

  Cullen, Mrs. Alice

  Grey, Charles (Durham)

  Allaun, Frank (Salford, E.)

  Dalyell, Tam

  Griffiths, David (Rother Valley)

  Alldritt, Walter

  Darling, Rt. Hn. George

  Griffiths, Eddie (Brightside)

  Anderson, Donald

  Davidson, Arthur (Accrington)

  Griffiths, Rt. Hn. James (Llanelly)

  Archer, Peter

  Davies, Ednyfed Hudson (Conway)

  Gunter, Rt. Hn. R. J.

  Ashley, Jack

  Davies, G. Elfed (Rhondda, E.)

  Hamilton, James (Bothwell)

  Ashton, Joe (Bassetlaw)

  Davies, Dr. Ernest (Stretford)

  Hamilton, William (Fife, W.)

  Atkins, Ronald (Preston, N.)

  Davies, Rt. Hn. Harold (Leek)

  Hamling, William

  Atkinson, Norman (Tottenham)

  Davies, Ifor (Gower)

  Hannan, William

  Bacon, Rt. Hn. Alice

  Davies, S. O. (Merthyr)

  Harper, Joseph

  Bagier, Gordon A. T.

  de Freitas, Rt. Hn. Sir Geoffrey

  Harrison, Walter (Wakefield)

  Barnes, Michael

  Delargy, Hugh

  Hart, Rt. Hn. Judith

  Barnett, Joel

  Dell, Edmund

  Haseldine, Norman

  Baxter, William

  Dempsey, James

  Hattersley, Roy

  Beaney, Alan

  Dewar, Donald

  Hazeil, Bert

  Bence, Cyril

  Diamond, Rt. Hn. John

  Healey, Rt. Hn. Denis

  Benn, Rt. Hn. Anthony Wedgwood

  Dobson, Ray

  Henig, Stanley

  Bennett, James (G'gow, Bridgeton)

  Doig, Peter

  Herbison, Rt. Hn. Margaret

  Bidwell, Sydney

  Driberg, Tom

  Hilton, W. S.

  Binns, John

  Dunn, James A.

  Hobden, Dennis

  Bishop, E. S.

  Dunnett, Jack

  Hooley, Frank

  Blackburn, F.

  Dunwoody, Mrs. Gwyneth (Exeter)

  Horner, John

  Blenkinsop, Arthur

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

  Houghton, Rt. Hn. Douglas

  Boardman, H. (Leigh)

  Eadie, Alex

  Howarth, Robert (Bolton, E.)

  Booth, Albert

  Edelman, Maurice

  Howell, Denis (Small Heath)

  Boston, Terence

  Edwards, William (Merioneth)

  Howie, W.

  Bottomley, Rt. Hn. Arthur

  Ellis, John

  Hoy, James

  Boyden, James

  English, Michael

  Huckfield, Leslie

  Bradley, Tom

  Ennals, David

  Hughes, Rt. Hn. Cledwyn (Anglesey)

  Bray, Dr. Jeremy

  Ensor, David

  Hughes, Emrys (Ayrshire, S.)

  Brooks, Edwin

  Evans, Albert (Islington, S. W.)

  Hughes, Hector (Aberdeen, N.)

  Broughton, Dr. A. D. D.

  Evans, Fred (Caerphilly)

  Hughes, Roy (Newport)

  Brown, Rt. Hn. George (Belper)

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

  Hunter, Adam

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

  Fernyhough, E.

  Hynd, John

  Brown, Bob (N 'c'tle-upon-Tyne, W.)

  Finch, Harold

  Irvine, Sir Arthur (Edge Hill)

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

  Fitch, Alan (Wigan)

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

  Buchan, Norman

  Fletcher, Rt. Hn. Sir Eric (Islington, E.)

  Jackson, Peter M. (High Peak)

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

  Fletcher, Raymond (Ilkeston)

  Janner, Sir Barnett

  Butler, Herbert (Hackney, C.)

  Fletcher, Ted (Darlington)

  Jay, Rt. Hn. Douglas

  Butler, Mrs. Joyce (Wood Green)

  Foley, Maurice

  Jeger, George (Goole)

  Callaghan, Rt. Hn. James

  Foot, Rt. Hn. Sir Dingle (Ipswich)

  Jeger, Mrs. Lena (H'b'n&St. P'cras, S.)

  Cant, R. B.

  Foot, Michael (Ebbw Vale)

  Jenkins, Hugh (Putney)

  Carmichael, Neil

  Ford, Ben

  Jenkins, Rt. Hn. Roy (Stechford)

  Castle, Rt. Hn. Barbara

  Forrester, John

  Johnson, Carol (Lewisham, S.)

  Chapman, Donald

  Fowler, Gerry

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

  Coe, Denis

  Fraser, John (Norwood)

  Jones, Dan (Burnley)

  Coleman, Donald

  Freeson, Reginald

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

  Conlan, Bernard

  Galpern, Sir Myer

  Jones, J. Idwal (Wrexham)

  Corbet, Mrs. Freda

  Gardner, Tony

  Jones, T. Alec (Rhondda, West)

  Craddock, George (Bradford, S.)

  Garrett, W. E.

  Judd, Frank

  Crawshaw, Richard

  Ginsburg, David

  Kelley, Richard

  Cronin, John

  Gray, Dr. Hugh (Yarmouth)

  Kenyon, Clifford

  Crosland, Rt. Hn. Anthony

  Greenwood, Rt. Hn. Anthony

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

  Crossman, Rt. Hn. Richard

  Gregory, Arnold

  Kerr, Dr. David (W'worth, Central)

  Lawson, George

  Mulley, Rt. Hn. Frederick

  Short, Rt. Hn. Edward (N'c'tle-u-Tyne)

  Leadbitter, Ted

  Murray, Albert

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

  Lee, Rt. Hn. Frederick (Newton)

  Neal, Harold

  Silkin, Rt. Hn. John (Deptford)

  Lee, Rt. Hn. Jennie (Cannock)

  Newens, Stan

  Silverman, Julius

  Lee, John (Reading)

  Oakes, Gordon

  Skeffington, Arthur

  Lestor, Miss Joan

  Ogden, Eric

  Slater, Joseph

  Lever, Harold (Cheetham)

  O'Malley, Brian

  Small, William

  Lever, L. M. (Ardwick)

  Oram, Albert E.

  Spriggs, Leslie

  Lewis, Arthur (W. Ham, N.)

  Orbach, Maurice

  Steele, Thomas (Dunbartonshire, W.)

  Lewis, Ron (Carlisle)

  Oswald, Thomas

  Stewart, Rt. Hn. Michael

  Lipton, Marcus

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

  Stonehouse, Rt. Hn. John

  Lomas, Kenneth

  Owen, Will (Morpeth)

  Strauss, Rt. Hn. G. R.

  Loughlin, Charles

  Padley, Walter

  Summerskill, Hn. Dr. Shirley

  Luard, Evan

  Page, Derek (King's Lynn)

  Swain, Thomas

  Lyon, Alexander W. (York)

  Paget, R. T.

  Symonds, J. B.

  Mabon, Dr. J. Dickson

  Palmer, Arthur

  Taverne, Dick

  McBride, Neil

  Pannell, Rt. Hn. Charles

  Thomas, Rt. Hn. George

  MacColl, James

  Park, Trevor

  Thomson, Rt. Hn. George

  MacDermot, Niall

  Parker, John (Dagenham)

  Thornton, Ernest

  Macdonald, A. H.

  Parkin, Ben (Paddington, N.)

  Tinn, James

  McGuire, Michael

  Parkyn, Brian (Bedford)

  Tomney, Frank

  McKay, Mrs. Margaret

  Pavitt, Laurence

  Tuck, Raphael

  Mackenzie, Gregor (Rutherglen)

  Pearson, Arthur (Pontypridd)

  Urwin, T. W.

  Mackle, John

  Peart, Rt. Hn. Fred

  Varley, Eric G.

  Mackintosh, John P.

  Pentland, Norman

  Walden, Brian (All Saints)

  Maclennan, Robert

  Perry, Ernest G. (Battersea, S.)

  Walker, Harold (Doncaster)

  MacMillan, Malcolm (Western Isles)

  Perry, George H. (Nottingham, S.)

  McMillan, Tom (Glasgow, C.)

  Prentice, Rt. Hn. R. E.

  Wallace, George

  McNamara, J. Kevin

  Price, Christopher (Perry Barr)

  Watkins, David (Consett)

  MacPherson, Malcolm

  Price, Thomas (Westhoughton)

  Watkins, Tudor (Brecon & Radnor)

  Mahon, Peter (Preston, S.)

  Price, William (Rugby)

  Weitzman, David

  Mahon, Simon (Bootle)

  Probert, Arthur

  Wellbeloved, James

  Mallalieu, E. L. (Brigg)

  Pursey, Cmdr. Harry

  Wells, William (Walsall, N.)

  Manuel, Archie

  Rankin, John

  Whitaker, Ben

  Mapp, Charles

  Rees, Merlyn

  White, Mrs. Eirene

  Marks, Kenneth

  Reynolds, Rt. Hn. G. W.

  Whitlock, William

  Marquand, David

  Rhodes, Geoffrey

  Wilkins, W. A.

  Marsh, Rt. Hn. Richard

  Richard, Ivor

  Willey, Rt. Hn. Frederick

  Mason, Rt. Hn. Roy

  Roberts, Albert (Normanton)

  Williams, Alan (Swansea, W.)

  Maxwell, Robert

  Roberts, Rt. Hn. Goronwy

  Williams, Alan Lee (Hornchurch)

  Mayhew, Christopher

  Roberts, Gwilym (Bedfordshire, S.)

  Williams, Clifford (Abertillery)

  Mellish, Rt. Hn. Robert

  Robertson, John (Paisley)

  Williams, Mrs. Shirley (Hitchin)

  Mendelson, John

  Robinson, Rt. Hn. Kenneth (St. P'c'as)

  Williams, W. T. (Warrington)

  Mikardo, Ian

  Rodgers, William (Stockton)

  Willis, Rt. Hn. George

  Millan, Bruce

  Roebuck, Roy

  Wilson, Rt. Hn. Harold (Huyton)

  Miller, Dr. M. S.

  Rogers, George (Kensington, N.)

  Wilson, William (Coventry, S.)

  Milne, Edward (Blyth)

  Rose, Paul

  Winnick, David

  Mitchell, R. C. (S'th'pton, Test)

  Ross, Rt. Hn. William

  Woodburn, Rt. Hn. A.

  Molloy, William

  Rowlands, E.

  Woof, Robert

  Moonman, Eric

  Ryan, John

  Wyatt, Woodrow

  Morgan, Elystan (Cardiganshire)

  Shaw, Arnold (Ilford, S.)

  Morris, Alfred (Wythenshawe)

  Sheldon, Robert

  TELLERS FOR THE AYES:

  Morris, Charles R. (Openshaw)

  Shinwell, Rt. Hn. E.

  Mr. John McCann and

  Morris, John (Aberavon)

  Shore, Rt. Hn. Peter (Stepney)

  Mr J. D. Concannon.

  Moyle, Roland

  NOES

  Alison, Michael (Barkston Ash)

  Braine, Bernard

  Cunningham, Sir Knox

  Allason, James (Hemel Hempstead)

  Brewis, John

  Currie, G. B. H.

  Astor, John

  Brinton, Sir Tatton

  Dalkeith, Earl of

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

  Bromley-Davenport, Lt.-Col. Sir Walter

  Dance, James

  Awdry, Daniel

  Brown, Sir Edward (Bath)

  Davidson, James (Aberdeenshire, W.)

  Baker, Kenneth (Acton)

  Bruce-Gardyne, J.

  d'Avigdor-Goldsmid, Sir Henry

  Baker, W. H. K. (Banff)

  Bryan, Paul

  Dean, Paul

  Balniel, Lord

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

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

  Barber, Rt. Hn. Anthony

  Buck, Antony (Colchester)

  Digby, Simon Wingfield

  Batsford, Brian

  Bullus, Sir Eric

  Dodds-Parker, Douglas

  Beamish, Col. Sir Tufton

  Burden, F. A.

  Donnelly, Desmond

  Bell, Ronald

  Campbell, B. (Oldham, W.)

  Doughty, Charles

  Bennett, Sir Frederic (Torquay)

  Campbell, Gordon (Moray & Nairn)

  Douglas-Home, Rt. Hn. Sir Alec

  Bennett, Dr. Reginald (Gos. & Fhm)

  Carlisle, Mark

  Drayson, G. B.

  Berry, Hn. Anthony

  Carr, Rt. Hn. Robert

  du Cann, Rt. Hn. Edward

  Bessell, Peter

  Channon, H. P. G.

  Eden, Sir John

  Biffen, John

  Chichester-Clark, R.

  Elliot, Capt. Walter (Carshalton)

  Biggs-Davison, John

  Clark, Henry

  Emery, Peter

  Birch, Rt. Hn. Nigel

  Clegg, Walter

  Errington, Sir Eric

  Black, Sir Cyril

  Cooper-Key, Sir Neill

  Evans, Gwynfor (C'marthen)

  Blaker, Peter

  Cordle, John

  Ewing, Mrs. Winifred

  Boardman, Tom (Leicester, S. W.)

  Costain, A. P.

  Eyre, Reginald

  Body, Richard

  Craddock, Sir Beresford (Spelthorne)

  Farr, John

  Boyd-Carpenter, Rt. Hn. John

  Crouch, David

  Fisher, Nigel

  Boyle, Rt. Hn. Sir Edward

  Crowder, F. P.

  Fortescue, Tim

  178

  179

  Foster, Sir John

  Langford-Holt, Sir John

  Renton, Rt. Hn. Sir David

  Fraser, Rt. Hn. Hugh (St'fford & Stone)

  Legge-Bourke, Sir Harry

  Rhys Williams Sir Brandon

  Galbraith, Hn. T. G.

  Lewis, Kenneth (Rutland)

  Ridley, Hn. Nicholas

  Gilmour, Ian (Norfolk, C.)

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

  Ridsdale, Julian

  Gilmour, Sir John (Fife, E.)

  Lloyd, Rt. Hn. Selwyn (Wirral)

  Rippon, Rt. Hn. Geoffrey

  Glover, Sir Douglas

  Longden, Gilbert

  Rodgers, Sir John (Sevenoaks)

  Glyn, Sir Richard

  Lubbock, Eric

  Rossi, Hugh (Hornsey)

  Godber, Rt. Hn. J. B.

  MacArthur, Ian

  Royle, Anthony

  Goodthart, Philip

  Macleod, Rt. Hn. Iain

  Russell, Sir Ronald

  Goodhew, Victor

  McMaster, Stanley

  St. John-Stevas, Norman

  Gower, Raymond

  Macmillan, Maurice (Farnham)

  Sandys, Rt. Hn. D.

  Grant, Anthony

  McNair-Wilson, M. (Walthamstow, E.)

  Scott, Nicholas

  Grant-Ferris, R.

  McNair-Wilson, Patrick (New Forest)

  Scott-Hopkins, James

  Gresham Cooke, R.

  Maddan, Martin

  Sharples, Richard

  Griffiths, Eldon (Bury St. Edmunds)

  Maginnis, John E.

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

  Grimond, Rt. Hn. J.

  Marples, Rt. Hn. Ernest

  Silvester, Frederick

  Gurden, Harold

  Marten, Neil

  Sinclair, Sir George

  Hall, John (Wycombe)

  Maude, Angus

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

  Hall-Davis, A. G. F.

  Maudling, Rt. Hn. Reginald

  Smith, John (London & W'minster)

  Hamilton, Lord (Fermanagh)

  Mawby, Ray

  Hamilton, Michael (Salisbury)

  Maxwell-Hyslop R. J.

  Speed, Keith

  Harris, Frederic (Croydon, N. W.)

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

  Stainton, Keith

  Harris, Reader (Heston)

  Mills, Peter (Torrington)

  Steel, David (Roxburgh)

  Harrison, Brian (Maldon)

  Mills, Stratton (Belfast, N.)

  Stodart, Anthony

  Harrison, Col. Sir Harwood (Eye)

  Miscampbell, Norman

  Stoddart-Scott, Col. Sir M.

  Harvie Anderson, Miss

  Mitchell, David (Basingstoke)

  Summers, Sir Spencer

  Hastings, Stephen

  Monro, Hector

  Tapsell, Peter

  Hawkins, Paul

  Montgomery, Fergus

  Taylor, Sir Charles (Eastbourne)

  Hay, John

  Morgan, Geraint (Denbigh)

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

  Heald, Rt. Hn. Sir Lionel

  Morgan-Giles, Rear-Adm.

  Taylor, Frank (Moss Side)

  Heath, Rt. Hn. Edward

  Morrison, Charles (Devizes)

  Thatcher, Mrs. Margaret

  Heseltine, Michael

  Mott-Radclyffe, Sir Charles

  Thorpe, Rt. Hn. Jeremy

  Higgins, Terence L.

  Munro-Lucas-Tooth, Sir Hugh

  Tilney, John

  Hiley, Joseph

  Murton, Oscar

  Turton, Rt. Hn. R. H.

  Hill, J. E. B.

  Nabarro, Sir Gerald

  van Straubenzee, W. R.

  Hirst, Geoffrey

  Neave, Airey

  Vaughan-Morgan, Rt. Hn. Sir John

  Hogg, Rt. Hn. Quintin

  Nicholls, Sir Harmar

  Vickers, Dame Joan

  Holland, Philip

  Noble, Rt. Hn. Michael

  Waddington, David

  Hooson, Emlyn

  Nott, John

  Wainwright, Richard (Colne Valley)

  Hordern, Peter

  Onslow, Cranley

  Walker, Peter (Worcester)

  Hornby, Richard

  Orr-Ewing, Sir Ian

  Walker-Smith, Rt. Hn. Sir Derek

  Howell, David (Guildford)

  Osborn, John (Hallam)

  Wall, Patrick

  Hunt, John

  Osborne, Sir Cyril (Louth)

  Walters, Dennis

  Hutchison, Michael Clark

  Page, Graham (Crosby)

  Ward, Dame Irene

  Iremonger, T. L.

  Page, John (Harrow, W.)

  Weatherill, Bernard

  Irvine, Bryant Godman (Rye)

  Pardoe, John

  Wells, John (Maidstone)

  Jenkin, Patrick (Woodford)

  Pearson, Sir Frank (Clitheroe)

  Whitelaw, Rt. Hn. William

  Johnson Smith, G. (E. Grinstead)

  Peel, John

  Wiggin, A. W.

  Johnston, Russell (Inverness)

  Percival, Ian

  Williams, Donald (Dudley)

  Jones, Arthur (Northants, S.)

  Peyton, John

  Wilson, Geoffrey (Truro)

  Jopling, Michael

  Pike, Miss Mervyn

  Winstanley, Dr. M. P.

  Joseph, Rt. Hn. Sir Keith

  Pink, R. Bonner

  Wolrige-Gordon, Patrick

  Kaberry, Sir Donald

  Pounder, Rafton

  Wood, Rt. Hn. Richard

  Kerby, Capt. Henry

  Powell, Rt. Hn. J. Enoch

  Woodnutt, Mark

  Kershaw, Anthony

  Price, David (Eastleigh)

  Worsley, Marcus

  Kimball, Marcus

  Prior, J. M. L.

  Wylie, N. R.

  King, Evelyn (Dorset, S.)

  Pym, Francis

  Younger, Hn. George

  Kirk, Peter

  Quennell, Miss J. M.

  Kitson, Timothy

  Ramsden, Rt. Hn. James

  TELLERS FOR THE NOES:

  Lambton, viscount

  Rawlinson, Rt. Hn. Sir Peter

  Mr. R. W. Elliott and

  Lancaster, Col. C. G.

  Rees-Davies W. R.

  Mr. Jasper More.

  Lane, David

  8. BINGO (EXCISE DUTY)
  Motion made, and Question.
  That the following duty of excise be charged on the playing of bingo:—

  (a) two-and-a-half per cent. of the total of the money taken in a week as payment by players for their cards, plus

  (b) one thirty-ninth of the amount (if any) by which that total, after deduction of the two-and-a-half per cent. chargeable under paragraph (a), is exceeded by the total value of prizes won in that week's bingo.—[Mr. Roy Jenkins.]

  put forthwith pursuant to Standing Order No. 90(2) (Ways and Means motions), and agreed to.
  9. OFF-COURSE BETTING (EXCISE LICENCE DUTY)
  Motion made, and Question.
  That a duty of excise be charged on a licence in respect of premises (not being premises comprised in a track, within the meaning of the Betting, Gaming and Lotteries Act 1963) authorising the use of the premises by a bookmaker or the Horserace Totalisator Board for the purpose of effecting betting transactions with or through a bookmaker or the Board, being transactions which result in bets chargeable under section 12 of the Finance Act 1966 with the general betting

  181
  duty; and that the amount of the duty charged on such a licence be—

  (a) in the case of premises which for rating purposes constitute or are comprised in a hereditament having a rateable value, three times that value; and

  (b) in any other case, £150.—[Mr. Roy Jenkins.]

  put forthwith pursuant to Standing Order No. 90(2) (Ways and Means motions), and agreed to.
  10. GAMING (EXCISE LICENCE DUTY)
  Motion made, and Question,
  That the amount of the duty under section 13 of the Finance Act 1966 on a gaming licence in respect of any premises (other than a licence for gaming by way of bingo only) taken out so as to expire on a date later than 30th September 1969 shall be determined as if for the Table set out in subsection (2) of that section (as amended by section 4(3) of the Finance Act 1968) there were substituted the following Table:—

  Description of Premises

  Amount of duty

  £

  1. Premises other than—

  750

  (a) premises which for rating purposes constitute or are comprised in a hereditament of a rateable value exceeding £1,000;

  (b) premises consisting of or comprised in a vessel.

  2. Premises—

  7,500

  (a) which for rating purposes constitute or are comprised in a hereditament of a rateable value exceeding £1,000 but not exceeding £1,500; or

  (b) which consist of or are comprised in a vessel.

  3. Premises which for rating purposes constitute or are comprised in a hereditament of a rateable value exceeding £1,500 but not exceeding £2,250.

  20,000

  4. Premises which for rating purposes constitute or are comprised in a hereditament of a rateable value exceeding £2,250 but not exceeding £3,000.

  40,000

  5. Premises which for rating purposes constitute or are comprised in a hereditament of a rateable value exceeding £3,000.

  100,000

  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act I968.—[Mr. Roy Jenkins.]
  put forthwith pursuant to Standing Order No. 90(2) (Ways and Means motions), and agreed to.
  11. GAMING MACHINES (EXCISE LICENCE DUTY)
  Motion made, and Question,
  That a duty of excise, at a rate varying with the circumstances, be charged on a licence authorising the provision on any premises of gaming machines.—[Mr. Roy Jenkins.]
  put forthwith pursuant to Standing Order No. 90(2) (Ways and Means motions), and agreed to.
  12. PURCHASE TAX
  Motion made, and Question,
  That, subject to any new order of the Treasury under section 2 of the Purchase Tax Act 1963, Part I of Schedule 1 to that Act (chargeable and exempt goods and rates of tax) as amended by section 5 of the Finance Act 1968 shall have effect—
  (i) as from 16th April 1969, with the substitution for any reference to 12½% 20%, 33⅓% or 50% of a reference respectively to 13¾%, 22%, 36⅔% or 55%;
  (2) as from 27th May 1969—

  (a) in Group 2, with the omission of pargaraphs (1), (2) and (3) of the exemptions;

  (b) in Group 5, with the insertion after the word "decorations" of the words "paper cups, paper plates and other paper tableware, paper handkerchiefs, paper tissues";

  (c) in Group 6, with the substitution for so much of that Group as precedes the word "Exempt" of the following:—

  "Articles of textile, plastic, paper or similar material of a kind used for soft furnishings, bedding or other domestic purposes";

  13¾%

  (d) in Group 7—

  (i) with the insertion after the words "otherwise treated" of the words "and plastic sheeting in the piece or in cut lengths, being sheeting of a kind suitable for making garments or curtains, tablecloths and similar soft furnishings";

  (ii) with the substitution for the words "Tissues and fabrics not exceeding 12 inches in width" of the words "Articles not comprised below in this Group";

  (iii) with the omission of the words "Not chargeable under this Group" and the words "Tissues and fabrics exceeding 12 inches in width";

  (iv) in paragraph (10) of the exemptions, with the substitution for the words "three inches" of the words "six inches";

  (e) in Group 10, paragraph (a), with the substitution for the word "Wallpaper" of the words "Wallpaper, plastic wall coverings in rolls with or without paper backing, and any of the following made of material of a kind principally used for wall

  183
  or ceiling decoration which is similar to the material of wallpaper or plastic wall covering, namely, panels, borders, friezes and cornerpieces";
  (f) with the addition after Group 35 of the following new Groups:—

  "GROUP 36

  Any of the following when packaged for human consumption without further preparation, namely, potato crisps, potato sticks, potato puffs and similar products made from the potato, or from potato flour, or from potato starch, and savoury food products obtained by the swelling of cereals or cereal products; and salted or roasted nuts.

  22%

  GROUP 37

  Pet foods, canned, packaged or prepared; packaged foods (not being pet foods) for birds other than poultry or game; and biscuits and meal for cats and dogs."

  22%

  And it is hereby declared that it is expedient in the public interest that this Resolution
  should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
  But this Resolution shall not authorise the making of amendments of the enactments relating to purchase tax so as to give relief from tax other than—

  (a) amendments making the same provision for chargeable goods of whatever description or for all goods to which any of the several rates of tax provided for by this Resolution applies; or

  (b) amendments in respect of goods not chargeable to tax immediately before 27th May 1969 but made chargeable to tax by this Resolution providing for those goods to be chargeable to tax at one of the rates of tax provided for by this Resolution other than that so provided for in relation to those goods; or

  (c) amendments exempting from tax any goods not chargeable to tax immediately before 27th May 1969.—[Mr. Roy Jenkins.]

  put forthwith pursuant to Standing Order No. 90(2) (Ways and Means motions),
  The House divided: Ayes 318, Noes 252.

  Division No. 162.]

  AYES

  [10.27 p.m.

  Albu, Austen

  Conlan, Bernard

  Foot, Michael (Ebbw Vale)

  Allaun, Frank (Salford, E.)

  Corbet, Mrs. Freda

  Ford, Ben

  Alldritt, Walter

  Craddock, George (Bradford, S.)

  Forrester, John

  Anderson, Donald

  Crawshaw, Richard

  Fowler, Gerry

  Archer, Peter

  Cronin, John

  Fraser, John (Norwood)

  Ashley, Jack

  Crosland, Rt. Hn. Anthony

  Freeson, Reginald

  Ashton, Joe (Bassetlaw)

  Crossman, Rt. Hn. Richard

  Galpern, Sir Myer

  Atkins, Ronald (Preston, N.)

  Cullen, Mrs. Alice

  Gardner, Tony

  Atkinson, Norman (Tottenham)

  Dalyell, Tam

  Garrett, W. E.

  Bacon, Rt. Hn. Alice

  Darling, Rt. Hn. George

  Ginsburg, David

  Bagier, Cordon A. T.

  Davidson, Arthur (Accrington)

  Gray, Dr. Hugh (Yarmouth)

  Barnes, Michael

  Davies, Ednyfed Hudson (Conway)

  Greenwood, Rt. Hn. Anthony

  Barnett, Joel

  Davies, G. Elfed (Rhondda, E.)

  Gregory, Arnold

  Baxter, William

  Davies, Dr. Ernest (Stretford)

  Grey, Charles (Durham)

  Beaney, Alan

  Davies, Rt. Hn. Harold (Leek)

  Griffiths, David (Rother Valley)

  Bence, Cyril

  Davies, Ifor (Gower)

  Griffiths, Eddie (Brightside)

  Benn, Rt. Hn. Anthony Wedgwood

  de Freitas, Rt. Hn. Sir Geoffrey

  Griffiths, Rt. Hn. James (Llanelly)

  Bennett, James (G'gow, Bridgeton)

  Bidwell, Sydney

  Delargy, Hugh

  Griffiths, Will (Exchange)

  Binns, John

  Dell, Edmund

  Gunter, Rt. Hn. R. J.

  Bishop, E. S.

  Dempsey, James

  Hamilton, James (Bothwell)

  Blackburn, F.

  Dewar, Donald

  Hamilton, William (Fife, W.)

  Blenkinsop, Arthur

  Diamond, Rt. Hn. John

  Hamling, William

  Boardman, H. (Leigh)

  Dobson, Ray

  Hannan, William

  Booth, Albert

  Doig, Peter

  Harper, Joseph

  Boston, Terence

  Driberg, Tom

  Harrison, Walter (Wakefield)

  Bottomley, Rt. Hn. Arthur

  Dunn, James A.

  Hart, Rt. Hn. Judith

  Boyden, James

  Dunnett, Jack

  Haseldine, Norman

  Bradley, Tom

  Dunwoody, Mrs. Gwyneth (Exeter)

  Hattersley, Roy

  Bray, Dr. Jeremy

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

  Hazell, Bert

  Brooks, Edwin

  Eadie, Alex

  Healey, Rt. Hn. Denis

  Broughton, Dr. A. D. D.

  Edelman, Maurice

  Herbison, Rt. Hn. Margaret

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

  Edwards, William (Merioneth)

  Hilton, W. S.

  Brown, Bob (N'c'tle-upon-Tyne, W.)

  Ellis, John

  Hobden, Dennis

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

  English, Michael

  Hooley, Frank

  Buchan, Norman

  Ennals, David

  Horner, John

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

  Ensor, David

  Houghton, Rt. Hn. Douglas

  Butler, Herbert (Hackney, C.)

  Evans, Albert (Islington, S. W.)

  Howarth, Robert (Bolton, E.)

  Butler, Mrs. Joyce (Wood Green)

  Evans, Fred (Caerphilly)

  Howell, Denis (Small Heath)

  Callaghan, Rt. Hn. James

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

  Howie, W.

  Cant, R. B.

  Fernyhough, E.

  Hoy, James

  Carmichael, Neil

  Finch, Harold

  Huckfield, Leslie

  Castle, Rt. Hn. Barbara

  Fletcher, Rt. Hn. Sir Eric (Islington, E.)

  Hughes, Rt. Hn. Cledwyn (Anglesey)

  Chapman, Donald

  Fletcher, Raymond (Ilkeston)

  Hughes, Emrys (Ayrshire, S.)

  Coe, Denis

  Fletcher, Ted (Darlington)

  Hughes, Hector (Aberdeen, N.)

  Coleman, Donald

  Foley, Maurice

  Hughes, Roy (Newport)

  Concannon, J. D.

  Foot, Rt. Hn. Sir Dingle (Ipswich)

  Hunter, Adam

  Hynd, John

  Mayhew, Christopher

  Ross, Rt. Hn. William

  Irvine, Sir Arthur (Edge Hill)

  Mellish, Rt. Hn. Robert

  Rowlands, E.

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

  Mendelson, John

  Ryan, John

  Jackson, Peter M. (High Peak)

  Mikardo, Ian

  Shaw, Arnold (Ilford, S.)

  Janner, Sir Barnett

  Millan, Bruce

  Sheldon, Robert

  Jay, Rt. Hn. Douglas

  Milne, Edward (Blyth)

  Shinwell, Rt. Hn. E.

  Jeger, George (Goole)

  Mitchell, R. C. (S'th'pton, Test)

  Shore, Rt. Hn. Peter (Stepney)

  Jeger, Mrs. Lena (H'b'n&St. P'cras, S.)

  Molloy, William

  Short, Rt. Hn. Edward (N'c'tle-u-Tyne)

  Jenkins, Hugh (Putney)

  Moonman, Eric

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

  Jenkins, Rt. Hn. Roy (Stechford)

  Morgan, Elystan (Cardiganshire)

  Silkin, Rt. Hn. John (Deptford)

  Johnson, Carol (Lewisham, S.)

  Morris, Alfred (Wythenshawe)

  Silverman, Julius

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

  Morris, Charles R. (Openshaw)

  Skeffington, Arthur

  Jones, Dan (Burnley)

  Morris, John (Aberavon)

  Slater, Joseph

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

  Moyle, Roland

  Small, William

  Jones, J. Idwal (Wrexham)

  Mulley, Rt. Hn. Frederick

  Spriggs, Leslie

  Jones, T. Alec (Rhondda, West)

  Murray, Albert

  Steele, Thomas (Dunbartonshire, W.)

  Judd, Frank

  Neal, Harold

  Stewart, Rt. Hn. Michael

  Kelley, Richard

  Newens, Stan

  Stonehouse, Rt. Hn. John

  Kenyon, Clifford

  Oakes, Gordon

  Strauss, Rt. Hn. G. R.

  Kerr, Dr. David (W'worth, Central)

  Ogden, Eric

  Summerskill, Hn. Dr. Shirley

  Lawson, George

  O'Malley, Brian

  Swain, Thomas

  Leadbitter, Ted

  Oram, Albert E.

  Symonds, J. B.

  Lee, Rt, Hn. Frederick (Newton)

  Orbach, Maurice

  Taverne, Dick

  Lee, Rt. Hn. Jennie (Cannock)

  Oswald, Thomas

  Thomas, Rt. Hn. George

  Lee, John (Reading)

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

  Lestor, Miss Joan

  Owen, Will (Morpeth)

  Thomson, Rt. Hn. George

  Lever, Harold (Cheetham)

  Padley, Walter

  Thornton, Ernest

  Lever, L. M. (Ardwick)

  Page, Derek (King's Lynn)

  Tinn, James

  Lewis, Arthur (W. Ham, N.)

  Paget, R. T.

  Tomney, Frank

  Lewis, Ron (Carlisle)

  Palmer, Arthur

  Tuck, Raphael

  Lipton, Marcus

  Panned, Rt. Hn. Charles

  Urwin, T. W.

  Lomas, Kenneth

  Park, Trevor

  Varley, Eric G.

  Loughlin, Charles

  Parker, John (Dagenham)

  Walden, Brian (All Saints)

  Luard, Evan

  Parkin, Ben (Paddington, N.)

  Walker, Harold (Doncaster)

  Lyon, Alexander W. (York)

  Parkyn, Brian (Bedford)

  Wallace, George

  Mabon, Dr. J. Dickson

  Pavitt, Laurence

  Watkins, David (Consett)

  McBride, Neil

  Pearson, Arthur (Pontypridd)

  Watkins, Tudor (Brecon & Radnor)

  McCann, John

  Peart, Rt. Hn. Fred

  Weitzman, David

  MacColl, James

  Pentland, Norman

  Wellbeloved, James

  MacDermot, Niall

  Perry, Ernest G. (Battersea, S.)

  Wells, William (Walsall, N.)

  Macdonald, A. H.

  Perry, George H. (Nottingham, S.)

  Whitaker, Ben

  McGuire, Michael

  Prentice, Rt. Hn. R. E.

  White, Mrs. Eirene

  McKay, Mrs. Margaret

  Price, Christopher (Perry Barr)

  Whitlock, William

  Mackenzie, Gregor (Rutherglen)

  Price, Thomas (Westhoughton)

  Wilkins, W. A.

  Mackie, John

  Price, William (Rugby)

  Willey, Rt. Hn. Frederick

  Mackintosh, John P.

  Probert, Arthur

  Williams, Alan (Swansea, W.)

  Maclennan, Robert

  Pursey, Cmdr. Harry

  Williams, Alan Lee (Hornchurch)

  MacMillan, Malcolm (Western Islet)

  Rankin, John

  Williams, Clifford (Abertillery)

  McMillan, Tom (Glasgow, C.)

  Beet, Merlyn

  Williams, Mrs. Shirley (Hitchin)

  McNamara, J. Kevin

  Reynolds, Rt. Hn. G. W.

  Williams, W. T. (Warrington)

  MacPherson, Malcolm

  Rhodes, Geoffrey

  Willis, Rt. Hn. George

  Mahon, Peter (Preston, S.)

  Richard, Ivor

  Wilson, Rt. Hn. Harold (Huyton)

  Mahon, Simon (Bootle)

  Roberts, Albert (Normanton)

  Wilson, William (Coventry, S.)

  Mallalieu, E. L. (Brigg)

  Roberts, Rt. Hn. Goronwy

  Winnick, David

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

  Roberts, Gwilym (Bedfordshire, S.)

  Woodburn, Rt. Hn. A.

  Manuel, Archie

  Robertson, John (Paisley)

  Woof, Robert

  Marks, Kenneth

  Robinson, Rt. Hn. Kenneth (St. P'c'as)

  Wyatt, Woodrow

  Marquand, David

  Rodgers, William (Stockton)

  Marsh, Rt. Hn. Richard

  Roebuck, Roy

  TELLERS FOR THE AYES:

  Mason, Rt. Hn. Roy

  Rogers, George (Kensington, N.)

  Mr. Alan Fitch and

  Maxwell, Robert

  Rose, Paul

  Dr. M. S. Miller.

  NOES

  Alison, Michael (Barkston Ash)

  Blaker, Peter

  Channon, H. P. G.

  Allason, James (Hemel Hempstead)

  Boardman, Tom (Leicester, S. W.)

  Chichester-Clark, R.

  Astor, John

  Body, Richard

  Clark, Henry

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

  Boyd-Carpenter, Rt. Hn. John

  Clegg, Walter

  Awdry, Daniel

  Boyle, Rt. Hn. Sir Edward

  Cooper-Key, Sir Neill

  Baker, Kenneth (Acton)

  Braine, Bernard

  Cordle, John

  Baker, W. H. K. (Banff)

  Brewis, John

  Costain, A. P.

  Balniel, Lord

  Brinton, Sir Tatton

  Craddock, Sir Beresford (Spelthorne)

  Barber, Rt. Hn. Anthony

  Bromley-Davenport, Lt.-Col. Sir Walter

  Crouch, David

  Batsford, Brian

  Brown, Sir Edward (Bath)

  Crowder, F. P.

  Beamish, Col. Sir Tufton

  Bruce-Gardyne, J.

  Cunningham, Sir Knox

  Bell, Ronald

  Bryan, Paul

  Currie, G. B. H.

  Bennett, Sir Frederic (Torquay)

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

  Dalkeith, Earl of

  Bennett, Dr. Reginald (Gos. & Fhm)

  Buck, Antony (Colchester)

  Dance, James

  Berry, Hn. Anthony

  Bullus, Sir Eric

  Davidson, James (Aberdeenshire, W.)

  Bessell, Peter

  Burden, F. A.

  d'Avigdor-Goldsmid, Sir Henry

  Biffen, John

  Campbell, B. (Oldham, W.)

  Dean, Paul

  Biggs-Davison, John

  Campbell, Gordon (Moray & Nairn)

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

  Birch, Rt. Hn. Nigel

  Carlisle, Mark

  Digby, Simon Wingfield

  Black, Sir Cyril

  Carr, Rt. Hn. Robert

  Dodds-Parker, Douglas

  186

  187

  Donnelly, Desmond

  Joseph, Rt. Hn. Sir Keith

  Pym, Francis

  Doughty, Charles

  Kaberry, sir Donald

  Quennell, Miss J. M.

  Douglas-Home, Rt. Hn, Sir Alec

  Kerby, Capt. Henry

  Rawlinson, Rt. Hn. Sir Peter

  Drayson, G. B.

  Kershaw, Anthony

  Rees-Davies W. R.

  du Cann, Rt. Hn. Edward

  Kimball, Marcus

  Renton, Rt. Hn. Sir David

  Eden, Sir John

  Kirk, Peter

  Rhys Williams Sir Brandon

  Elliot, Capt. Walter (Carshalton)

  Kitson, Timothy

  Ridley, Hn. Nicholas

  Emery, Peter

  Lambton, Viscount

  Ridsdale, Julian

  Errington, Sir Eric

  Lancaster, Col. C. G.

  Rippon, Rt. Hn. Geoffrey

  Evans, Gwynfor (C'marthen)

  Lane, David

  Rodgers, Sir John (Sevenoaks)

  Ewing, Mrs. Winifred

  Langford-Holt, Sir John

  Rossi, Hugh (Hornsey)

  Eyre, Reginald

  Legge-Bourke, Sir Harry

  Royle, Anthony

  Farr, John

  Lewis, Kenneth (Rutland)

  Russell, Sir Ronald

  Fisher, Nigel

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

  St. John-Stevas, Norman

  Fortescue, Tim

  Lloyd, Rt. Hn. Selwyn (Wirral)

  Sandys, Rt. Hn. D.

  Foster, Sir John

  Longden, Gilbert

  Scott, Nicholas

  Fraser, Rt. Hn. Hugh (St'fford & Stone)

  Lubbock, Eric

  Scott-Hopkins, James

  Galbraith, Hn. T. G.

  MacArthur, Ian

  Sharples, Richard

  Gilmour, Ian (Norfolk, C.)

  Macleod, Rt. Hn. Iain

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

  Gilmour, Sir John (Fife, E.)

  McMaster, Stanley

  Silvester, Frederick

  Glover, Sir Douglas

  Macmillan, Maurice (Farnham)

  Sinclair, Sir George

  Glyn, Sir Richard

  McNair-Wilson, M. (Walthamstow, E.)

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

  Godber, Rt. Hn. J. B.

  McNair-Wilson, Patrick (New Forest)

  Smith, John (London & W'minster)

  Goodhart, Philip

  Maddan, Martin

  Speed, Keith

  Goodhew, Victor

  Maginnis, John E.

  Stainton, Keith

  Gower, Raymond

  Marples, Rt. Hn. Ernest

  Steel, David (Roxburgh)

  Grant, Anthony

  Marten, Neil

  Stodart, Anthony

  Grant-Ferris, R.

  Maude, Angus

  Stoddart-Scott, Col. Sir M.

  Gresham Cooke, R.

  Maudling, Rt. Hn. Reginald

  Summers, sir Spencer

  Griffiths, Eldon (Bury St. Edmunds)

  Mawby, Ray

  Tapsell, Peter

  Grimond, Rt. Hn. J.

  Maxwell-Hyslop R. J.

  Taylor, Sir Charles (Eastbourne)

  Gurden, Harold

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

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

  Hall, John (Wycombe)

  Mills, Peter (Torrington)

  Taylor, Frank (Moss Side)

  Hall-Davis, A. G. F.

  Mills, Stratton (Belfast, N.)

  Thatcher, Mrs. Margaret

  Hamilton, Lord (Fermanagh)

  Miscampbell, Norman

  Hamilton, Michael (Salisbury)

  Mitchell, David (Basingstoke)

  Thorpe, Rt. Hn. Jeremy

  Harris, Frederic (Croydon, N. W.)

  Monro, Hector

  Tilney, John

  Harris, Reader (Heston)

  Montgomery, Fergus

  Turton, Rt. Hn. R. H.

  Harrison, Brian (Maldon)

  Morgan, Geraint (Denbigh)

  van straubenzee, W. R.

  Harrison, Col. Sir Harwood (Eye)

  Morgan-Giles, Rear-Adm.

  Vaughan-Morgan, Rt. Hn. Sir John

  Harvie Anderson, Miss

  Morrison, Charles (Devizes)

  Vickers, Dame Joan

  Hastings, Stephen

  Mott-Radclyffe, Sir Charles

  Waddington, David

  Hawkins, Paul

  Munro-Lucas-Tooth, Sir Hugh

  Wainwright, Richard (Colne Valley)

  Hay, John

  Murton, Oscar

  Walker, Peter (Worcester)

  Heald, Rt. Hn. Sir Lionel

  Nabarro, Sir Gerald

  Walker-Smith, Rt. Hn. Sir Derek

  Heath, Rt. Hn. Edward

  Neave, Airey

  Wall, Patrick

  Heseltine, Michael

  Nicholls, Sir Harmar

  Walters, Dennis

  Higgins, Terence L.

  Noble, Rt. Hn. Michael

  Ward, Dame Irene

  Hiley, Joseph

  Nott, John

  Weatherill, Bernard

  Hill, J. E. B.

  Onslow, Cranley

  Wells, John (Maidstone)

  Hirst, Ceoffrey

  Orr-Ewing, Sir Ian

  Whitelaw, Rt. Hn. William

  Hogg, Rt. Hn. Quintin

  Osborn, John (Hallam)

  Wiggin, A. W.

  Holland, Philip

  Osborne, Sir Cyril (Louth)

  Williams, Donald (Dudley)

  Hooson, Emlyn

  Page, Graham (Crosby)

  Wilson, Geoffrey (Truro)

  Hordern, Peter

  Page, John (Harrow, W.)

  Winstanley, Dr. M. P.

  Hornby, Richard

  Pardoe, John

  Wolrige-Gordon, Patrick

  Howell, David (Guildford)

  Pearson, Sir Frank (Ciltheroe)

  Wood, Rt. Hn. Richard

  Hunt, John

  Peel, John

  Woodnutt, Mark

  Hutchison, Michael Clark

  Percival, Ian

  Worsley, Marcus

  Iremonger, T. L.

  Peyton, John

  Wylie, N. R.

  Irvine, Bryant Codman (Rye)

  Pike, Miss Mervyn

  Younger, Hn. George

  Jenkin, Patrick (Woodford)

  Pink, R. Bonner

  Johnson Smith, G. (E. Grinstead)

  Pounder, Rafton

  TELLERS FOR THE NOES:

  Johnston, Russell (Inverness)

  Powell, Rt. Hn. J. Enoch

  Mr. R. W. Elliott and

  Jones, Arthur (Northants, S.)

  Price, David (Eastleigh)

  Mr. Jasper More.

  Jopling, Michael

  Prior, J. M. L.

  13. CUSTOMS AND EXCISE DUTIES AND PURCHASE TAX (TERMINATION OF SURCHARGE)
  Motion made, and Question,
  That as from 16th April 1969 or, in the case of duties of customs or excise chargeable in respect of hyrocarbon oils, petrol substitutes and spirits used for making power methylated spirits, as from six o'clock in the evening of 15th April 1969, no liability to any duty or tax, or right to any drawback, rebate, allowance or other payment, shall be subject
  188
  to any addition under section 9 of the Finance Act 1961 by virtue of any order of the Treasury made before that day or, as the case may be, before that time on that day.
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.—[Mr. Roy Jenkins.]
  put forthwith pursuant to Standing Order No. 90(2) (Ways and Means motions), and agreed to.
  14. SURCHARGES AND REBATES IN RESPECT OF REVENUE DUTIES
  Motion made, and Question,
  That the period after which orders undo section 9 of the Finance Act 1961 may not be made or continue in force shall be ex-tended until the end of August 1970.—[Mr. Roy Jenkins.]
  put forthwith pursuant to Standing Order No. 90(2) (Ways and Means motions), and agreed to.
  15. VEHICLES EXCISE DUTY
  Motion made, and Question,
  That as from 1st January 1970 the Vehicles (Excise) Act 1962 shall be amended so as to authorise the issue, instead of general trade licences and limited trade licences, of a single type of trade licence of a more restricted nature than the general trade licence.—[Mr. Roy Jenkins.]
  put forthwith pursuant to Standing Order No. 90(2) (Ways and Means motions), and agreed to.
  16. INCOME TAX (CHARGE AND RATES FOR 1969–70)
  Motion made, and Question,
  That income tax for the year 1969–70 shall be charged at the standard rate of 41·25 per cent. (which is equivalent to 8s. 3d. in the pound) and, in the case of an individual whose total income exceeds £2,000, at such higher rates in respect of the excess as Parliament may hereafter determine:
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.—[Mr. Roy Jenkins.]
  put forthwith pursuant to Standing Order No. 90(2) (Ways and Means motions), and agreed to.
  17. INCOME TAX (SURTAX RATES FOR 1968–69)
  Motion made, and Question,
  That income tax for the year 1968–69 shall be charged, in the case of an individual whose total income exceeded £2,000, at the same higher rates in respect of the excess as were charged for the year 1967–68:
  And it is hereby declared that it is expedient in the public interest that this Resolulution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.—[Mr. Roy Jenkins.]
  put forthwith pursuant to Standing Order No. 90(2) (Ways and Means motions), and agreed to.
  18. INCOME TAX (ALTERATIONS OF PERSONAL RELIEFS)
  Motion made, and Question,
  That—

  (a) in section 210 of the Income Tax Act 1952 (personal reliefs), as amended by section 10(2) of the Finance Act 1965, in paragraph (a) of subsection (1) (married) for the reference to £340 there shall be substituted a reference to £375, in paragraph (b) of that subsection (single) for the reference to £220 there shall be substituted a reference to £255, and in subsection (2) of the said section 210 (wife's earned income relief) for the reference to £220 there shall be substituted a reference to £255;

  (b) the following Table shall be substituted for the Table set out in section 220(1) of the Income Tax Act 1952 (reduced rate relief):

  TABLE

  Where the relevant amount—

  does not exceed £;260

  a deduction equal to 11·25 per cent. of the relevant amount (which is equivalent to a deduction of 2s, 3d. for each pound of the relevant amount);

  exceeds £260

  the same deduction as if the relevant amount were £260.

  (c) in subsections (2) and (3) of section 211 of the Income Tax Act 1952 (old age relief), as amended by section 12(2) of the Finance Act 1963, for the references to £900 (maximum income qualifying for full relief) there shall be substituted references to I1,000;
  (d) in section 216(1) of the Income Tax Act 1952 (relief for dependent relative), as amended by subsections (2) and (3) of section 16 of the Finance Act 1967, for the reference to £235 (lower income limit of dependent relative) there shall be substituted a reference to £245, for the reference to £310 (the normal higher income limit) there shall be substituted a reference to £320 and for the reference to £345 (the higher income limit where the claimant is a woman other than a married woman living with her husband) there shall be substituted a reference to £355;
  (e) section 13 of the Finance Act 1957 (relief for persons over sixty-five with small incomes), as amended by section 14(1) of the Finance Act 1968, shall be amended by substituting for the references to £415 and £665 (incomes limits for exemption) references to £425 and £680 and for the reference to £230 (the excess over those limits beyond which relief by reduction of tax is excluded) a reference to £265;
  (f) in section 15(2) of the Finance Act 1952 (relief for small incomes), as amended by section 10(5) of the Finance Act 1965, for the reference to £705 (income limit for marginal relief) there shall be substituted a reference to £710;
  (g) in section 17(2) of the Finance Act 1960 (additional relief for widows and others in respect of children) for the reference to £75 there shall be substituted a reference to £100, and the reference to £75 in section 218(4) of the Income Tax Act 1952 (which is applied for the purposes of the said section 17) shall be construed accordingly; and
  (h) the amounts of tax deductible or repayable under section 157 of the Income Tax Act 1952 (pay as you earn) shall until 22nd June 1969 be the same as if the amendments proposed by the preceding provisions of this Resolution had not been made (any necessary correction being made on or after that day by adjusting subsequent deductions or repayments under that section, or, if need be, by an assessment):
  And it is hereby declared that it is expedient in the public interest that this Resoluion should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.—[Mr. Roy Jenkins.]
  put forthwith pursuant to Standing Order No. 90(2) (Ways and Means motions), and agreed to.
  19. INCOME TAX (CHILD RELIEF, SETTLEMENTS, AGGREGATION AND FAMILY ALLOWANCES)
  Motion made, and Question,
  That—
  (a) section 212 of the Income Tax Act 1952 (reliefs in respect of children) shall be amended—
  (i) by substituting, in subsection (1), for the words from "that he has living" to "educational establishment" the words—

  "(a) that there is living at any time within the year of assessment a child of his with respect to whom one of the conditions in subsection (2) of this section is fulfilled, or

  (b) that for the year of assessment he has the custody of and maintains at his own expense a child (other than a child of his) with respect to whom one of those conditions is fulfilled";

  and
  (ii) by substituting for subsection (2) the following subsection—
  (2) The conditions referred to in subsection (1) of this section are—

  (a) that the child is born in, or is under the age of sixteen years at the commencement of, the year of assessment referred to in that subsection; or

  (b) that the child is over the age of sixteen years at the commencement of that year of assessment but is receiving full-time instruction at any university, college, school or other educational establishment;

  (b) for the purposes of section 228 of the Income Tax Act 1952 (relief in respect of income accumulated under trusts) no
  192
  account shall be taken of any tax paid in respect of income for a year of assessment beginning after the year 1968–69 or of any relief to which a person would have been entitled for such a year of assessment in the circumstances mentioned in that section;
  (c) any reference to an infant in Chapter II of Part XVIII of the Income Tax Act 1952 (settlements on children generally) shall be construed as a reference to a person who either has not attained the age of eighteen or has attained that age but has not attained the age of twenty-one and is not working regularly within the meaning of section 15(4) of the Finance Act 1968;
  (d) section 15 of, and Schedule 8 to, the Finance Act 1968 (aggregation for 1969–70 and subsequent years of certain income of unmarried infants with income of their parents) shall have effect and shall be deemed always to have had effect as if any reference therein to an infant were a reference to a person who has not attained the age of eighteen; and
  (e) subsection (4) of section 14 of the Finance Act 1968 (which for 1968–69 provided that an individual's total reliefs should be reduced in respect of each family allowance in respect of which he was assessable to income tax) shall have effect for 1969–70 and subsequent years of assessment with the following amendments—

  (i) for the words "1968–69" there shall be substituted the words "1969–70 or any subsequent year of assessment", and

  (ii) for the words from "tax at the standard rate on £36" to the end of the subsection there shall be substituted the words "tax at the standard rate on £42 or, if the payments in question are payments for a part only of the year, by a proportionate part of that amount",

  and subsections (5) to (7) of that section (which contain ancillary provisions) shall have effect accordingly:
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Faxes Act 1968.—[Mr. Roy Jenkins.]
  put forthwith pursuant to Standing Order No. 90(2) (Ways and Means motions), and agreed to.
  20. REDUCTION IN AGE OF MAJORITY (INCOME TAX, CAPITAL GAINS TAX, CORPORATION TAX AND ESTATE DUTY)
  Motion made, and Question,
  That charges to income tax, capital gains tax, corporation tax, and estate duty may be imposed by provisions reducing the age of majority from twenty-one to eighteen for the purposes of provisions made by or under any enactment and relating to any of those taxes or to that duty.—[Mr. Roy Jenkins.]
  put forthwith pursuant to Standing Order No. 90(2) (Ways and Means motions), and agreed to.
  21. INCOME TAX (EXCLUSION FROM AGGREGATION OF CERTAIN INCOME OF INFANTS)
  Motion made, and Question,
  That charges to income tax may be imposed by provisions amending section 15 of the Finance Act 1968 (aggregation with parents' Income of certain income of infants) and relating to—

  (a) income derived from sums paid in respect of personal injuries by bodies established for charitable purposes only or by the Criminal Injuries Compensation Board or under any enactment of the Parliament of Northern Ireland providing for compensation in respect of criminal injuries, and

  (b)payments made to an unmarried female infant by the putative father of a child of the infant and for the benefit, maintenance or education of that child.—[Mr. Roy Jenkins.]

  put forthwith pursuant to Standing Order No. 90(2) (Ways and Means motions), and agreed to.
  22. FARMING (INCOME TAX and CORPORATION TAX)
  Motion made, and Question,
  That charges to income tax and corporation tax may be imposed by any amendment of the definitions of farm land and farming.—[Mr. Roy Jenkins.]
  put forthwith pursuant to Standing Order No. 90(2) (Ways and Means motions), and agreed to.
  23. DISALLOWANCE OF INTEREST (INCOME TAX AND CORPORATION TAX)
  Motion made, and Question,
  That—
  (1) It is expedient to authorise such provision as Parliament may hereafter determine
  by way of legislation the main object of which is to disallow interest as a deduction for tax, and that the legislation may impose charges to income tax or corporation tax or capital gains tax, including charges for past years of assessment or accounting periods, by any provision about interest or indebtedness, or by any provision treating anything as equivalent to interest or indebtedness or otherwise enacted to prevent the avoidance of the purpose of the legislation.
  (2) Interest on any debt incurred after 15th April 1969, being interest chargeable to tax under Case III of Schedule D, shall notwithstanding anything in the Income Tax Acts be paid without deduction of income tax unless—

  (a) the payer is a company (including an authorised unit trust) as defined in Part IV of the Finance Act 1965, or a local authority as so defined, or

  (b) the recipient's usual place of abode is outside the United Kingdom.

  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the Provisional Collection of Taxes Act 1968.—[Mr. Roy Jenkins.]
  put forthwith pursuant to Standing Order No. 90(2) (Ways and Means motions), and agreed to.
  24. CORPORATION TAX (CHARGE AND RATE FOR FINANCIAL YEAR 1968)
  Motion made, and Question,
  That corporation tax shall be charged for the financial year 1968 at the rate of 45 per cent.—[Mr. Roy Jenkins.]
  put forthwith pursuant to Standing Order No. 90(2) (Ways and Means motions).
  The House divided: Ayes 322, Noes 255.

  Division No. 163.]

  AYES

  [10.40 p.m.

  Albu, Austen

  Boston, Terence

  Craddock, George (Bradford, S.)

  Allaun, Frank (Salford, E.)

  Bottomley, Rt. Hn. Arthur

  Crawshaw, Richard

  Aildritt, Walter

  Boyden, James

  Cronin, John

  Anderson, Donald

  Bradley, Tom

  Crosland, Rt. Hn. Anthony

  Archer, Peter

  Bray, Dr. Jeremy

  Crossman, Rt. Hn. Richard

  Ashley, Jack

  Brooks, Edwin

  Cullen, Mrs. Alice

  Ashton, Joe (Bassetlaw)

  Broughton, Dr. A. D. D.

  Dalyell, Tam

  Atkins, Ronald (Preston, N.)

  Brown, Rt. Hn. George (Belper)

  Darling, Rt. Hn. George

  Atkinson, Norman (Tottenham)

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

  Davidson, Arthur (Accrington)

  Bacon, Rt. Hn. Alice

  Brown, Bob (N'c'tle-upon-Tyne, W.)

  Davies, Ednyfed Hudson (Conway)

  Bagier, Gordon A. T.

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

  Davies, C. Elfed (Rhondda, E.)

  Barnes, Michael

  Buchan, Norman

  Davies, Dr. Ernest (Stretford)

  Barnett, Joel

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

  Davies, Rt. Hn. Harold (Leek)

  Baxter, William

  Butler, Herbert (Hackney, C.)

  Davies, Ifor (Gower)

  Beaney, Alan

  Butler, Mrs. Joyce (Wood Green)

  Davies, S. O. (Merthyr)

  Bence, Cyril

  Callaghan, Rt. Hn. James

  de Freitas, Rt. Hn. Sir Geoffrey

  Benn, Rt. Hn. Anthony Wedgwood

  Cant, R. B.

  Delargy, Hugh

  Bennett, James (G'gow, Bridgeton)

  Carmichael, Neil

  Dell, Edmund

  Bidwell, Sydney

  Castle, Rt. Hn. Barbara

  Dempsey, James

  Binns, John

  Chapman, Donald

  Dewar, Donald

  Bishop, E. S.

  Coe, Denis

  Diamond, Rt. Hn. John

  Blackburn, F.

  Coleman, Donald

  Dobson, Ray

  Blenkinsop, Arthur

  Concannon, J. D.

  Doig, Peter

  Boardman, H. (Leigh)

  Conlan, Bernard

  Driberg, Tom

  Booth, Albert

  Corbet, Mrs. Freda

  Dunn, James A.

  Dunnett, Jack

  Kelley, Richard

  Peart, Rt. Hn. Fred

  Dunwoody, Mrs. Gwyneth (Exeter)

  Kenyon, Clifford

  Pentland, Norman

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

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

  Perry, George H. (Nottingham, S.)

  Eadie, Alex

  Kerr, Dr. David (W'worth, Central)

  Prentice, Rt. Hn. R. E.

  Edelman, Maurice

  Lawson, George

  Price, Christopher (Perry Barr)

  Edwards, William (Merioneth)

  Leadbitter, Ted

  Price, Thomas (Westhoughton)

  Ellis, John

  Lee, Rt. Hn. Frederick (Newton)

  Price, William (Rugby)

  English, Michael

  Lee, Rt. Hn. Jennie (Cannock)

  Probert, Arthur

  Ennals, David

  Lee, John (Reading)

  Pursey, Cmdr. Harry

  Ensor, David

  Lestor, Miss Joan

  Rankin, John

  Evans, Albert (Islington, S. W.)

  Lever, Harold (Cheetham)

  Rees, Merlyn

  Evans, Fred (Caerphilly)

  Lever, L. M. (Ardwick)

  Reynolds, Rt. Hn. G. W.

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

  Lewis, Arthur (W. Ham, N.)

  Rhodes, Geoffrey

  Fernyhough, E.

  Lewis, Ron (Carlisle)

  Richard, Ivor

  Finch, Harold

  Lipton, Marcus

  Roberts, Albert (Normanton)

  Fitch, Alan (Wigan)

  Lomas, Kenneth

  Roberts, Rt. Hn. Coronwy

  Fletcher, Rt. Hn. Sir Eric (Islington, E.)

  Loughlin, Charles

  Roberts, Gwilym (Bedfordshire, S.)

  Fletcher, Raymond (Ilkeston)

  Luard, Evan

  Robertson, John (Paisley)

  Fletcher, Ted (Darlington)

  Lyon, Alexander W. (York)

  Robinson, Rt. Hn. Kenneth (St. P'c'as)

  Foley, Maurice

  Mabon, Dr. J. Dickson

  Rodgers, William (Stockton)

  Foot, Rt. Hn. Sir Dingle (Ipswich)

  McBride, Neil

  Roebuck, Roy

  Foot, Michael (Ebbw Vale)

  McCann, John

  Rogers, George (Kensington, N.)

  Ford, Ben

  MacColl, James

  Rose, Paul

  Forrester, John

  MacDermot, Niall

  Ross, Rt. Hn. William

  Fowler, Gerry

  Macdonald, A. H.

  Rowlands, E.

  Fraser, John (Norwood)

  McGuire, Michael

  Ryan, John

  Freeson, Reginald

  McKay, Mrs. Margaret

  Shaw, Arnold (Ilford, S.)

  Galpern, Sir Myer

  Mackenzie, Gregor (Rutherglen)

  Sheldon, Robert

  Gardner, Tony

  Mackie, John

  Shinwell, Rt. Hn. E.

  Garrett, W. E.

  Mackintosh, John P.

  Shore, Rt. Hn. Peter (Stepney)

  Ginsburg, David

  Maclennan, Robert

  Short, Rt. Hn. Edward (N'c'tle-u-Tyne)

  Gray, Dr. Hugh (Yarmouth)

  MacMillan, Malcolm (Western Isles)

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

  Greenwood, Rt. Hn. Anthony

  McMillan, Tom (Glasgow, c.)

  Silkin, Rt. Hn. John (Deptford)

  Gregory, Arnold

  McNamara, J. Kevin

  Silverman, Julius

  Griffiths, David (Rother Valley)

  MacPherson, Malcolm

  Skeffington, Arthur

  Griffiths, Eddie (Brightside)

  Mahon, Peter (Preston, S.)

  Slater, Joseph

  Griffiths, Rt. Hn. James (Llanelly)

  Mahon, Simon (Bootle)

  Small, William

  Griffiths, Will (Exchange)

  Mallalieu, E. L. (Brigg)

  Spriggs, Leslie

  Gunter, Rt. Hn. R. J.

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

  Steele, Thomas (Dunbartonshire, W.)

  Hamilton, James (Bothwell)

  Manuel, Archie

  Stewart, Rt. Hn. Michael

  Hamilton, William (Fife, W.)

  Mapp, Charles

  Stonehouse, Rt. Hn. John

  Hamling, William

  Marks, Kenneth

  Strauss, Rt. Hn. G. R.

  Hannan, William

  Marquand, David

  Summerskill, Hn. Dr. Shirley

  Harper, Joseph

  Marsh, Rt. Hn. Richard

  Swain, Thomas

  Harrison, Walter (Wakefield)

  Mason, Rt. Hn. Roy

  Symonds, J. B.

  Hart, Rt. Hn. Judith

  Maxwell, Robert

  Taverne, Dick

  Haseldine, Norman

  Mayhew, Christopher

  Thomas, Rt. Hn. George

  Hattersley, Roy

  Mellish, Rt. Hn. Robert

  Thomson, Rt. Hn. George

  Hazell, Bert

  Mendelson, John

  Thornton, Ernest

  Healey, Rt. Hn. Denis

  Mikardo, Ian

  Tinn, James

  Henig, Stanley

  Millan, Bruce

  Tomney, Frank

  Herbison, Rt. Hn. Margaret

  Miller, Dr. M. S.

  Tuck, Raphael

  Hilton, W. S.

  Milne, Edward (Blyth)

  Urwin, T. W.

  Hobden, Dennis

  Mitchell, R. C. (S'th'pton, Test)

  Varley, Eric G.

  Hooley, Frank

  Molloy, William

  Walden, Brian (All Saints)

  Horner, John

  Moonman, Eric

  Walker, Harold (Doncaster)

  Houghton, Rt. Hn. Douglas

  Morgan, Elystan (Cardiganshire)

  Wallace, George

  Howarth, Robert (Bolton, E.)

  Morris, Alfred (Wythenshawe)

  Watkins, David (Consett)

  Howell, Denis (Small Heath)

  Morris, Charles R. (Openshaw)

  Watkins, Tudor (Brecon & Radnor)

  Howie, W.

  Morris, John (Aberavon)

  Weitzman, David

  Hoy, James

  Moyle, Roland

  Wellbeloved, James

  Huckfield, Leslie

  Wells, William (Walsall, N.)

  Hughes, Rt. Hn. Cledwyn (Anglesey

  Mulley, Rt. Hn. Frederick

  Whitaker, Ben

  Hughes, Emrys (Ayrshire, S.)

  Murray, Albert

  White, Mrs. Eirene

  Hughes, Hector (Aberdeen, N.)

  Neal, Harold

  Whitlock, William

  Hughes, Roy (Newport)

  Newens, Stan

  Wilkins, W. A.

  Hunter, Adam

  Oakes, Gordon

  Willey, Rt. Hn. Frederick

  Hynd, John

  Ogden, Eric

  Williams, Alan (Swansea, W.)

  Irvine, Sir Arthur (Edge Hill)

  Oram, Albert E.

  Williams, Alan Lee (Hornchurch)

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

  Orbach, Maurice

  Williams, Clifford (Abertillery)

  Jackson, Peter M. (High Peak)

  Oswald, Thomas

  Williams, Mrs. Shirley (Hitchin)

  Janner, Sir Barnett

  Owen, Dr. David (Plymouth, S'tn

  Jay, Rt. Hn. Douglas

  Owen, Will (Morpeth)

  Williams, W. T. (Warrington)

  Jeger, George (Goole)

  Padley, Walter

  Willis, Rt. Hn. George

  Jeger, Mrs. Lena (H'b'n&St. P'cras, S.

  Page, Derek (King's Lynn)

  Wilson, Rt. Hn. Harold (Huyton)

  Jenkins, Hugh (Putney)

  Paget, R. T.

  Wilson, William (Coventry, S.)

  Jenkins, Rt. Hn. Roy (Stechford)

  Palmer, Arthur

  Winnick, David

  Johnson, carol (Lewisham, S.)

  Pannell, Rt. Hn. Charles

  Woodburn, Rt. Hn. A.

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

  Park, Trevor

  Woof, Robert

  Jones, Dan (Burnley)

  Parker, John (Dagenham)

  Wyatt, Woodrow

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

  Parkin, Ben (Paddington, N.)

  Jones, J. Idwal (Wrexham)

  Parkyn, Brian (Bedford)

  TELLERS FOR THE AYES:

  Jones, T. Alec (Rhondda, West)

  Pavitt, Laurence

  Mr. Charles Gray and

  Judd, Frank

  Pearson, Arthur (Pontypridd)

  Mr. Ernest G. Perry.

  196

  197

  NOES

  Alison, Michael (Barkston Ash)

  Glyn, Sir Richard

  Monro, Hector

  Allason, James (Hemel Hempstead)

  Godber, Rt. Hn. J. B.

  Montgomery, Fergus

  Astor, John

  Goodhart, Philip

  More, Jasper

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

  Goodhew, Victor

  Morgan, Geraint (Denbigh)

  Awdry, Daniel

  Gower, Raymond

  Morgan-Giles, Rear-Adm.

  Baker, Kenneth (Acton)

  Grant-Ferris, R.

  Morrison, Charles (Devizes)

  Baker, W. H. K. (Banff)

  Gresham Cooke, R.

  Mott-Radclyffe, Sir Charles

  Balniel, Lord

  Griffiths, Eldon (Bury St. Edmunds)

  Munro-Lucas-Tooth, Sir Hugh

  Barber, Rt. Hn. Anthony

  Grimond, Rt. Hn. J.

  Murton, Oscar

  Batsford, Brian

  Gurden, Harold

  Nabarro, Sir Gerald

  Beamish, Col. Sir Tufton

  Hall, John (Wycombe)

  Neave, Airey

  Bell, Ronald

  Hall-Davis, A. G. F.

  Nicholls, Sir Harmar

  Bennett, Sir Frederic (Torquay)

  Hamilton, Lord (Fermanagh)

  Noble, Rt. Hn. Michael

  Bennett, Dr. Reginald (Gos. & Fhm)

  Hamilton, Michael (Salisbury)

  Nott, John

  Berry, Hn. Anthony

  Harris, Frederic (Croydon, N. W.)

  Onslow, Cranley

  Bessell, Peter

  Harris, Reader (Heston)

  Orr-Ewing, Sir Ian

  Biffen, John

  Harrison, Brian (Maldon)

  Osborn, John (Hallam)

  Biggs-Davison, John

  Harrison, Col. Sir Harwood (Eye)

  Osborne, Sir Cyril (Louth)

  Birch, Rt. Hn. Nigel

  Harvie Anderson, Miss

  Page, Graham (Crosby)

  Black, Sir Cyril

  Hastings, Stephen

  Page, John (Harrow, W.)

  Blaker, Peter

  Hawkins, Paul

  Pardoe, John

  Boardman, Tom (Leicester, S. W.)

  Hay, John

  Pearson, Sir Frank (Clitheroe)

  Body, Richard

  Heald, Rt. Hn. Sir Lionel

  Peel, John

  Boyd-Carpenter, Rt. Hn. John

  Heath, Rt. Hn. Edward

  Percival, Ian

  Boyle, Rt. Hn. Sir Edward

  Heseltine, Michael

  Peyton, John

  Braine, Bernard

  Higgins, Terence L.

  Pike, Miss Mervyn

  Brewis, John

  Hiley, Joseph

  Pink, R. Bonner

  Brinton, Sir Tatton

  Hill, J. E. B.

  Pounder, Rafton

  Bromley-Davenport, Lt.-Col. Sir Walter

  Hirst, Geoffrey

  Powell, Rt. Hn. J. Enoch

  Brown, Sir Edward (Bath)

  Hogg, Rt. Hn. Quintin

  Price, David (Eastleigh)

  Bruce-Gardyne, J.

  Holland, Philip

  Prior, J. M. L.

  Bryan, Paul

  Hooson, Emlyn

  Pym, Francis

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

  Hordern, Peter

  Quennell, Miss J. M.

  Buck, Antony (Colchester)

  Hornby, Richard

  Ramsden, Rt. Hn. James

  Bullus, Sir Eric

  Howell, David (Guildford)

  Rawlinson, Rt. Hn. Sir Peter

  Burden, F. A.

  Hunt, John

  Rees-Davies, W. R.

  Campbell, B. (Oldham, W.)

  Hutchison, Michael Clark

  Renton, Rt. Hn. Sir David

  Campbell, Gordon (Moray & Nairn)

  Iremonger, T. L.

  Rhys Williams, Sir Brandon

  Carlisle, Mark

  Irvine, Bryant Godman (Rye)

  Ridley, Hn. Nicholas

  Carr, Rt. Hn. Robert

  Jenkin, Patrick (Woodford)

  Ridsdale, Julian

  Channon, H. P. G.

  Johnson Smith, G. (E. Grinstead)

  Rippon, Rt. Hn. Geoffrey

  Chichester-Clark, R.

  Johnston, Russell (Inverness)

  Rodgers, Sir John (Sevenoaks)

  Clark, Henry

  Jones, Arthur (Northants, S.)

  Rossi, Hugh (Hornsey)

  Clegg, Walter

  Jopling, Michael

  Royle, Anthony

  Cooper-Key, Sir Neill

  Joseph, Rt. Hn. Sir Keith

  Russell, Sir Ronald

  Cordle, John

  Kaberry, Sir Donald

  St. John-Stevas, Norman

  Costain, A. P.

  Kerby, Capt. Henry

  Sandys, Rt. Hn. D.

  Craddock, Sir Beresford (Spelthorne)

  Kershaw, Anthony

  Scott, Nicholas

  Crouch, David

  Kimball, Marcus

  Scott-Hopkins, James

  Crowder, F. P.

  King, Evelyn (Dorset, S.)

  Sharples, Richard

  Cunningham, Sir Knox

  Kirk, Peter

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

  Currie, G. B. H.

  Kitson, Timothy

  Silvester, Frederick

  Dalkeith, Earl of

  Lambton, Viscount

  Sinclair, Sir George

  Dance, James

  Lancaster, col. C. G.

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

  Davidson, James (Aberdeenshire, W.)

  Lane, David

  Smith, John (London & W'minster)

  d'Avigdor-Goldsmid, Sir Henry

  Langford-Holt, Sir John

  Speed, Keith

  Dean, Paul

  Legge-Bourke, Sir Harry

  Stainton, Keith

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

  Lewis, Kenneth (Rutland)

  Steel, David (Roxburgh)

  Digby, Simon Wingfield

  Lloyd, Rt. Hn. Geoffrey (Sut'n C'd field)

  Stodart, Anthony

  Dodds-Parker, Douglas

  Lloyd, Rt. Hn. Selwyn (Wirral)

  Stoddart-Scott, col. Sir M.

  Donnelly, Desmond

  Longden, Gilbert

  Summers, Sir Spencer

  Doughty, Charles

  Lubbock, Eric

  Tapsell, Peter

  Douglas-Home, Rt. Hn. Sir Alec

  MacArthur, Ian

  Taylor, Sir Charles (Eastbourne)

  Drayson, G. B.

  Macleod, Rt. Hn. Iain

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

  du Cann, Rt. Hn. Edward

  McMaster, Stanley

  Taylor, Frank (Moss Side)

  Eden, Sir John

  Macmillan, Maurice (Farnham)

  Thatcher, Mrs. Margaret

  Elliot, Capt. Walter (Carshalton)

  McNair-Wilson, M. (Walthamstow, E.)

  Thorpe, Rt. Hn. Jeremy

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

  McNair-Wilson, Patrick (New Forest)

  Tilney, John

  Emery, Peter

  Maddan, Martin

  Turton, Rt. Hn. R. H.

  Errington, Sir Eric

  Maginnis, John E.

  van Straubenzee, W. R.

  Evans, Gwynfor (C'marthen)

  Marples, Rt. Hn. Ernest

  Vaughan-Morgan, Rt. Hn. Sir John

  Ewing, Mrs. Winifred

  Marten, Neil

  Vickers, Dame Joan

  Farr, John

  Maude, Angus

  Waddington, David

  Fisher, Nigel

  Maudling, Rt. Hn. Reginald

  Wainwright, Richard (Colne Valley)

  Fortescue, Tim

  Mawby, Ray

  Walker, Peter (Worcester)

  Foster, Sir John

  Maxwell-Hyslop, R. J.

  Walker-Smith, Rt. Hn. Sir Derek

  Fraser, Rt. Hn. Hugh (St'fford & Stone)

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

  Wall, Patrick

  Galbraith, Hn. T. G.

  Mills, Peter (Torrington)

  Walters, Dennis

  Gilmour, Ian (Norfolk, C.)

  Mills, Stratton (Belfast, N.)

  Ward, Dame Irene

  Gilmour, Sir John (Fife, E.)

  Miscampbell, Norman

  Weatherill, Bernard

  Glover, Sir Douglas

  Mitchell, David (Basingstoke)

  Wells, John (Maidstone)

  198

  199

  Whitelaw, Rt. Hn. William

  Wolrige-Gordon, Patrick

  Younger, Hn. George

  Wiggin, A. W.

  Wood, Rt. Hn. Richard

  Williams, Donald (Dudley)

  Woodnutt, Mark

  TELLERS FOR THE NOES:

  Wilson, Geoffrey (Truro)

  Worsley, Marcus

  Mr. Reginald Eyre and

  Winstanley, Dr. M. P.

  Wylie, N. R.

  Mr. Anthony Grant.

  25. CORPORATION TAX ACTS (INCOME TAX AND CORPORATION TAX)
  Motion made, and Question,
  That charges to income tax and corporation tax, including charges for past years of assessment or accounting periods, may be imposed by amendments about—

  (a) close companies,

  (b) non-resident companies and other companies having their head offices outside the United Kingdom,

  (c) distributions received in connection with the purchase and sale of securities or otherwise materially reducing the value of securities, and

  (d) stocks and bonds exempt from tax on chargeable gains in certain cases.—[Mr. Roy Jenkins.]

  put forthwith pursuant to Standing Order No. 90(2) (Ways and Means motions), and agreed to.
  26. LOSSES (CORPORATION TAX)
  Motion made, and Question,
  That where there is a change in the ownership of a company on or after 15th April 1969, restrictions may be imposed on the relief available in respect of losses, including losses sustained before that date.—[Mr. Roy Jenkins.]
  put forthwith pursuant to Standing Order No. 90(2) (Ways and Means motions), and agreed to.
  27. TAX AVOIDANCE (INCOME TAX AND CORPORATION TAX)
  Motion made, and Question,
  That charges to income tax and corporation tax may be imposed by provisions about transactions, devices and schemes affecting—

  (a) income or receipts from personal activities, or

  (b) land or any property deriving its value directly or indirectly from land.—[Mr. Roy Jenkins.]

  put forthwith pursuant to Standing Order No. 90(2) (Ways and Means motions), and agreed to.
  28. INCOME TAX (TRANSFER OF ASSETS ABROAD)
  Motion made, and Question,
  That further provisions may be made for preventing avoidance of income tax by transactions resulting in the transfer of income to persons abroad, including, for surtax purposes,
  200
  provisions for the year 1968–69 as well as subsequent years of assessment.—[Mr. Roy Jenkins.]
  put forthwith pursuant to Standing Order No. 90(2) (Ways and Means motions), and agreed to.
  29. ESTATE DUTY (AMOUNT)
  Motion made, and Question,
  That in the case of persons dying after 15th April 1969 estate duty on an estate shall no longer be levied and paid at graduated rates on the principal value of the property comprised in the estate but, subject to any enactment providing for the reduction of the amount payable on any particular property comprised in the estate, there shall be levied and paid by way of estate duty on the estate the following amount, namely—

  (a) if the aggregate principal value of all property comprised in the estate does not exceed £10,000, nil;

  (b) in any other case, an amount equal to the aggregate of—

  (i) 25% of any amount by which that aggregate principal value exceeds £10,000 but does not exceed £17,500; and

  (ii) 30% of any amount by which that aggregate principal value exceeds £17,500 but does not exceed £30,000; and

  (iii) 45% of any amount by which that aggregate principal value exceeds £30,000 but does not exceed £40,000; and

  (iv) 60% of any amount by which that aggregate principal value exceeds £40,000 but does not exceed £80,000; and

  (v) 65% of any amount by which that aggregate principal value exceeds £80,000 but does not exceed £150,000; and

  (vi) 70% of any amount by which that aggregate principal value exceeds £150,000 but does not exceed £300,000; and

  (vii) 75% of any amount by which that aggregate principal value exceeds £300,000 but does not exceed £500,000; and

  (viii) 80% of any amount by which that aggregate principal value exceeds £500,000 but does not exceed £750,000; and

  (ix) 85% of any amount by which that aggregate principal value exceeds £750,000,

  but not exceeding an amount equal to 80% of that aggregate principal value;
  and, subject to any such enactment as aforesaid, where duty is payable on the estate the amount of duty payable on any particular property comprised in the estate shall be the amount produced by levying duty on the principal value of that property at the estate rate, that is to say, the rate per cent. representing the proportion which the amount determined in accordance with paragraph (b) of this

  201
  Resolution bears to the aggregate principal value aforesaid.—[Mr. Roy Jenkins.]
  put forthwith pursuant to Standing Order No. 90(2) (Ways and Means motions), and agreed to.
  30. ESTATE DUTY (PROPERTY PASSING ON DEATH)
  Motion made, and Question,
  That it is expedient to authorise any charge to estate duty attributable to any amendment of the provisions of the enactments relating to that duty as to the property to be treated for the purposes of the duty as passing on a death after 15th April 1969 and the aggregation for those purposes of, and the charging of the duty on, that property.—[Mr. Roy Jenkins.]
  put forthwith pursuant to Standing Order No. 90(2) (Ways and Means motions), and agreed to.
  31. ESTATE DUTY (WORKS OF ART)
  Motion made, and Question,
  That as respects persons dying after 15th April, 1969 further provision be made as to the circumstances in which estate duty is to become chargeable on an object which has been exempted from duty under section 40 of the Finance Act 1930 (which exempts objects of national, scientific, historic or artistic interest) and as to the charging of duty and the aggregation of property for that purpose when any such object ceases to be exempted under that section or when an undertaking in pursuance of which an exemption under that section was granted has not been observed.—[Mr. Roy Jenkins.]
  put forthwith pursuant to Standing Order No. 90(2) (Ways and Means motions), and agreed to.
  32. CAPITAL GAINS (CAPITAL GAINS TAX, CORPORATION TAX AND INCOME TAX)
  Motion made, and Question,
  That charges to capital gains tax, corporation tax and income tax (including charges for past years of assessment and acounting periods) may be imposed by provisions about—

  (a) personal representatives, deceased persons and legatees,

  (b) settled property and property held by persons as bare trustees or nominees,

  (c) compensation paid by persons having compulsory powers of acquisition,

  (d) trading stock,

  (e) the transfer of a business or part of a business to a company,

  (f) the replacement of business assets,

  (g) companies which are or have been members of a group of companies, and

  (h) company amalgamations,

  202
  and by amendments of section 33 of the Finance Act 1967 and the other provisions of that Act about the current use value of land.—[Mr. Roy Jenkins.]
  put forthwith pursuant to Standing Order No. 90(2) (Ways and Means motions), and agreed to.
  33. TAX ON CAPITAL GAINS (CONSEQUENTIAL CHARGES)
  Motion made, and Question,
  That it is expedient to authorise any charges to capital gains tax, or any charges to corporation tax in respect of chargeable gains, including a charge for a past year of assessment or accounting period, attributable to any amendment of the Income Tax Acts, or attributable to any amendment of the Corporation Tax Acts as respects tax payable in respect of the income of any company.—[Mr. Roy Jenkins.]
  put forthwith pursuant to Standing Order No. 90(2) (Ways and Means motions), and agreed to.
  34. BETTERMENT LEVY
  Motion made, and Question,
  That charges to betterment levy, and any incidental or consequential charges to any other duty or tax, including charges to betterment levy or any other duty or tax by reference to past acts or events, may be imposed by amendments of Part III of the Land Commission Act 1967 about—

  (a) the development of land, and levy in respect of land on which development has been begun,

  (b) the method of determining the amount of consideration given or to be given for a disposition, and

  (c) groups of companies.—[Mr. Roy Jenkins.]

  put forthwith pursuant to Standing Order No. 90(2) (Ways and Means motions), and agreed to.
  35. SELECTIVE EMPLOYMENT TAX
  Motion made, and Question,
  That in respect of each contribution week within the meaning of Part VI of the Finance Act 1966 beginning on or after 7th July 1969 the amount payable by way of selective employment tax in respect of any person shall be increased—

  (a) if that person is a man over the age of 18, to 48s.;

  (b) if that person is a woman over the age of 18, to 24s.;

  (c) if that person is a boy under the age of 18, to 24s.;

  (d) if that person is a girl under the age of 18, to 16s.

  203
  And it is hereby declared that it is expedient in the public interest that this Resolution should have statutory effect under the provisions of the Provisional Collection of Taxes Act 1968.
  But nothing in this Resolution or in any Resolution relating to selective employment payments shall authorise the making of amendments of the enactments relating to selective employment tax so as—

  (1) to give relief from tax by way of exemption from, or an alteration in the rate of, tax except in respect of all persons of the same descriptions relevant for determining the rate of the employer's flat-rate contribution with which the tax is combined, whether that contribution is under the National Insurance Acts or under the corresponding enactments in Northern Ireland; or

  (2) except by amending the definition of Standard Industrial Classification in section 10(1) of the Selective Employment Payments Act 1966 by substituting for a reference to the 1963 edition of that Classification a reference to the 1968 edition thereof, to give relief from tax by way of providing for payments to employers of an amount equal to the whole or a specified part of the tax paid if the proposed provision—

  (i) is in respect of employers in, or at establishments in, part only of Great
  Britain, unless that part is included in the areas specified as development areas under section 15(2) of the Industrial Development Act 1966; or
  (ii) extends to employers in, or at establishments in, Northern Ireland; or
  (iii) is in respect of all persons in any particular description of employment in all parts of Great Britain, and relief in respect of the whole of the tax paid could be given in respect of that description of employment by an order under section 9(1)(a) of the Selective Employment Payments Act 1966 adding that description of employment to the employments to which section 1 or section 2 of that Act applies; or
  (3) to give relief from tax by—

  (i) adding or removing any employer to or from the employers to whom section 3 of the Selective Employment Payments Act 1966 applies; or

  (ii) amending the provisions of Schedule 1 or Schedule 2 to that Act.—[Mr. Roy Jenkins.]

  put forthwith pursuant to Standing Order No. 90(2) (Ways and Means Motions).
  The House divided: Ayes 283, Noes, 255.

  Division No. 164.]

  AYES

  [10.55 p.m.

  Albu, Austen

  Corbet, Mrs. Freda

  Ford, Ben

  Alldritt, Walter

  Crawshaw, Richard

  Forrester, John

  Anderson, Donald

  Cronin, John

  Fowler, Gerry

  Archer, Peter

  Crosland, Rt. Hn. Anthony

  Fraser, John (Norwood)

  Ashley, Jack

  Grossman, Rt. Hn. Richard

  Freeson, Reginald

  Ashton, Joe (Bassetlaw)

  Cullen, Mrs. Alice

  Galpern, Sir Myer

  Atkins, Ronald (Preston, N.)

  Dalyell, Tam

  Garrett, W. E.

  Atkinson, Norman (Tottenham)

  Davidson, Arthur (Accrington)

  Ginsburg, David

  Bacon, Rt. Hn. Alice

  Davies, G. Elfed (Rhondda, E.)

  Gray, Dr. Hugh (Yarmouth)

  Bagier, Gordon A. T.

  Davies, Dr. Ernest (Stretford)

  Greenwood, Rt. Hn. Anthony

  Barnes, Michael

  Davies, Rt. Hn. Harold (Leek)

  Gregory, Arnold

  Barnett, Joel

  Davies, Ifor (Gower)

  Grey, Charles (Durham)

  Beaney, Alan

  de Freitas, Rt. Hn. Sir Geoffrey

  Griffiths, Eddie (Brightside)

  Bence, Cyril

  Delargy, Hugh

  Griffiths, Rt. Hn. James (Llanelly)

  Benn, Rt. Hn. Anthony Wedgwood

  Dell, Edmund

  Gunter, Rt. Hn. R. J.

  Bennett, James (G'gow, Bridgeton)

  Dempsey, James

  Hamilton, James (Bothwell)

  Bidwell, Sydney

  Dewar, Donald

  Hamilton, William (Fife, W.)

  Binns, John

  Diamond, Rt. Hn. John

  Hannan, William

  Bishop, E. S.

  Dobson, Ray

  Harper, Joseph

  Blackburn, F.

  Doig, Peter

  Harrison, Walter (Wakefield)

  Blenkinsop, Arthur

  Driberg, Tom

  Hart, Rt. Hn. Judith

  Booth, Albert

  Dunn, James A.

  Hattersley, Roy

  Boston, Terence

  Dunnett, Jack

  Hazell, Bert

  Bottomley, Rt. Hn. Arthur

  Dunwoody, Mrs. Gwyneth (Exeter)

  Healey, Rt. Hn. Denis

  Boyden, James

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

  Henig, Stanley

  Bradley, Tom

  Eadie, Alex

  Herbison, Rt. Hn. Margaret

  Bray, Dr. Jeremy

  Edelman, Maurice

  Hooley, Frank

  Brooks, Edwin

  Edwards, William (Merioneth)

  Homer, John

  Broughton, Dr. A. D. D.

  Ellis, John

  Houghton, Rt. Hn. Douglas

  Brown, Rt. Hn. George (Belper)

  English, Michael

  Howarth, Robert (Bolton, E.)

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

  Ennals, David

  Howell, Denis (Small Heath)

  Brown, Bob (N'c'tle-upon-Tyne, W.)

  Ensor, David

  Howie, W.

  Buchan, Norman

  Evans, Albert (Islington, S. W.)

  Hoy, James

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

  Evans, Fred (Caerphilly)

  Huckfield, Leslie

  Butler, Herbert (Hackney, C.)

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

  Hughes, Rt. Hn. Cledwyn (Anglesey)

  Callaghan, Rt. Hn. James

  Fernyhough, E.

  Hughes, Emrys (Ayrshire, S.)

  Cant, R. B.

  Finch, Harold

  Hughes, Hector (Aberdeen, N.)

  Carmichael, Neil

  Fitch, Alan (Wigan)

  Hughes, Roy (Newport)

  Castle, Rt. Hn. Barbara

  Fletcher, Rt. Hn. Sir Eric (Islington, E.)

  Hunter, Adam

  Chapman, Donald

  Fletcher, Raymond (Ilkeston)

  Hynd, John

  Coe, Denis

  Fletcher, Ted (Darlington)

  Irvine, Sir Arthur (Edge Hill)

  Coleman, Donald

  Foley, Maurice

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

  Concannon, J. D.

  Foot, Michael (Ebbw Vale)

  Janner, Sir Barnett

  Jay, Rt. Hn. Douglas

  Mikardo, Ian

  Shore, Rt. Hn. Peter (Stepney)

  Jeger, George (Goole)

  Millan, Bruce

  Short, Rt. Hn. Edward (N'c'tle-u-Tyne)

  Jeger, Mrs. Lena (H'b'n & St. P'cras, S.)

  Miller, Dr. M. S.

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

  Jenkins, Hugh (Putney)

  Mitchell, R. C. (S'th'pton, Test)

  Silkin, Rt. Hn. John (Deptford)

  Jenkins, Rt. Hn. Roy (Stechford)

  Molloy, William

  Silverman, Julius

  Johnson, Carol (Lewisham, S.)

  Moonman, Eric

  Skeffington, Arthur

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

  Morgan, Elystan (Cardiganshire)

  Slater, Joseph

  Jones, Dan (Burnley)

  Morris, Charles R. (Openshaw)

  Small, William

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

  Morris, John (Aberavon)

  Spriggs, Leslie

  Jones, J. Idwal (Wrexham)

  Moyle, Roland

  Steele, Thomas (Dunbartonshire, W.)

  Jones, T. Alec (Rhondda, West)

  Mulley, Rt. Hn. Frederick

  Stewart, Rt. Hn. Michael

  Judd, Frank

  Murray, Albert

  Stonehouse, Rt, Hn. John

  Kelley, Richard

  Neal, Harold

  Strauss, Rt. Hn. G. R.

  Kerr, Dr. David (W'worth, Central)

  Oakes, Gordon

  Summerskill, Hn. Dr. Shirley

  Lawson, George

  Ogden, Eric

  Swain, Thomas

  Leadbitter, Ted

  O'Malley, Brian

  Symonds, J. B.

  Lee, Rt. Hn. Frederick (Newton)

  Oram, Albert E.

  Taverne, Dick

  Lee, Rt. Hn. Jennie (Cannock)

  Orbach, Maurice

  Thomas, Rt. Hn. George

  Lestor, Miss Joan

  Oswald, Thomas

  Thomson, Rt. Hn. George

  Lever, Harold (Cheetham)

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

  Thornton, Ernest

  Lever, L. M. (Ardwick)

  Page, Derek (King's Lynn)

  Tinn, James

  Lewis, Ron (Carlisle)

  Pannell, Rt. Hn. Charles

  Tomney, Frank

  Lipton, Marcus

  Parker, John (Dagenham)

  Tuck, Raphael

  Lomas, Kenneth

  Parkin, Ben (Paddington, N.)

  Urwin, T. w.

  Loughlin, Charles

  Parkyn, Brian (Bedford)

  Varley, Eric G.

  Luard, Evan

  Pearson, Arthur (Pontypridd)

  Walden, Brian (All Saints)

  Lyon, Alexander W. (York)

  Peart, Rt. Hn. Fred

  Walker, Harold (Doncaster)

  Mabon, Dr. J. Dickson

  Pentland, Norman

  McCann, John

  Perry, Ernest G. (Battersea, S.)

  Wallace, George

  Maccoll, James

  Prentice, Rt. Hn. R. E.

  Watkins, David (Consett)

  MacDermot, Niall

  Price, Christopher (Perry Barr)

  Weitzman, David

  Macdonald, A. H.

  Price, William (Rugby)

  Wellbeloved, James

  McGuire, Michael

  Probert, Arthur

  Wells, William (Walsall, N.)

  McKay, Mrs. Margaret

  Pursey, Cmdr. Harry

  Whitaker, Ben

  Mackenzie, Gregor (Rutherglen)

  Rankin, John

  White, Mrs. Eirene

  Mackie, John

  Rees, Merlyn

  Whitlock, William

  Mackintosh, John P.

  Reynolds, Rt. Hn. G. W.

  Wilkins, W. A.

  Maclennan, Robert

  Richard, Ivor

  Willey, Rt. Hn. Frederick

  McMillan, Tom (Glasgow, C.)

  Roberts, Albert (Normanton)

  Williams, Alan (Swansea, W.)

  McNamara, J. Kevin

  Roberts, Rt. Hn. Goronwy

  Williams, Alan Lee (Hornchurch)

  MacPherson, Malcolm

  Roberts, Gwilym (Bedfordshire, S.)

  Williams, Clifford (Abertillery)

  Mahon, Peter (Preston, S.)

  Robertson, John (Paisley)

  Williams, Mrs. Shirley (Hitchin)

  Mahon, Simon (Bootle)

  Robinson, Rt. Hn. Kenneth (St. P'c'as)

  Willis, Rt. Hn. George

  Mallalieu, E. L. (Brigs)

  Rodgers, William (Stockton)

  Wilson, Rt. Hn. Harold (Huyton)

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

  Roebuck, Roy

  Wilson, William (Coventry, S.)

  Manuel, Archie

  Rogers, George (Kensington, N.)

  Winnick, David

  Marks, Kenneth

  Rose, Paul

  Woodburn, Rt. Hn. A.

  Marquand, David

  Ross, Rt. Hn. William

  Woof, Robert

  Marsh, Rt. Hn. Richard

  Rowlands, E.

  Wyatt, Woodrow

  Mason, Rt. Hn. Roy

  Ryan, John

  Maxwell, Robert

  Shaw, Arnold (Ilford, S.)

  TELLERS FOR THE AYES:

  Mellish, Rt. Hn. Robert

  Sheldon, Robert

  Mr. Neil McBride and

  Mendelson, John

  Shinwell, Rt. Hn. E.

  Mr. J. D. Concannon.

  NOES

  Alison, Michael (Barkston Ash)

  Brewis, John

  Dance, James

  Allason, James (Hemel Hempstead)

  Brinton, Sir Tatton

  Davidson, James (Aberdeenshire, W.)

  Astor, John

  Bromley-Davenport, Lt.-Col. Sir Walter

  d'Avigdor-Goldsmid, Sir Henry

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

  Brown, Sir Edward (Bath)

  Dean, Paul

  Awdry, Daniel

  Bruce-Gardyne, J.

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

  Baker, Kenneth (Acton)

  Bryan, Paul

  Digby, Simon Wingfield

  Baker, W. H. K. (Banff)

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

  Dodds-Parker, Douglas

  Balniel, Lord

  Buck, Antony (Colchester)

  Donnelly, Desmond

  Barber, Rt. Hn. Anthony

  Bullus, Sir Eric

  Doughty, Charles

  Batsford, Brian

  Burden, F. A.

  Douglas-Home, Rt. Hn. Sir Alec

  Baxter, William

  Campbell, B. (Oldham, W.)

  Drayson, G. B.

  Beamish, Col. Sir Tufton

  Campbell, Gordon (Moray & Nairn)

  du Cann, Rt. Hn. Edward

  Bell, Ronald

  Carlisle, Mark

  Eden, Sir John

  Bennett, Sir Frederic (Torquay)

  Carr, Rt. Hn. Robert

  Elliot, Capt. Walter (Carshalton)

  Bennett, Dr. Reginald (Gos. & Fhm)

  Channon, H. P. G.

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

  Berry, Hn. Anthony

  Chichester, Clark, R.

  Emery, Peter

  Bessell, Peter

  Clark, Henry

  Errington, Sir Eric

  Biffen, John

  Clegg, Walter

  Evans, Gwynfor (C'marthen)

  Biggs-Davison, John

  Cooper-Key, Sir Neill

  Ewing, Mrs. Winifred

  Birch, Rt. Hn. Nigel

  Cordle, John

  Farr, John

  Black, Sir Cyril

  Costain, A. P.

  Fisher, Nigel

  Blaker, Peter

  Craddock, Sir Beresford (Spelthorne)

  Fortescue, Tim

  Boardman, Tom (Leicester, S. W.)

  Crouch, David

  Foster, Sir John

  Body, Richard

  Crowder, F. P.

  Fraser, Rt. Hn. Hugh (St'fford & Stone)

  Boyd-Carpenter, Rt. Hn. John

  Cunningham, Sir Knox

  Galbraith, Hn. T. G.

  Boyle, Rt. Hn. Sir Edward

  Currie, G. B. H.

  Gilmour, Ian (Norfolk, C.)

  Braine, Bernard

  Dalkeith, Earl of

  Gilmour, Sir John (Fife, E.)

  206

  207

  Glover, Sir Douglas

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

  Rhys Williams Sir Brandon

  Glyn, Sir Richard

  Lloyd, Rt. Hn. Selwyn (Wirral)

  Ridley, Hn. Nicholas

  Godber, Rt. Hn. J. B.

  Longden, Gilbert

  Ridsdale, Julian

  Goodhart, Philip

  Lubbock, Eric

  Rippon, Rt. Hn. Geoffrey

  Goodhew, Victor

  MacArthur, Ian

  Rodgers, Sir John (Sevenoaks)

  Gower, Raymond

  Macleod, Rt. Hn. Iain

  Rossi, Hugh (Hornsey)

  Grant-Ferris, R.

  McMaster, Stanley

  Royle, Anthony

  Gresham Cooke, R.

  Macmillan, Maurice (Farnham)

  Russell, Sir Ronald

  Griffiths, Eldon (Bury St. Edmunds)

  McNair-Witson, M. (Walthamstow, E.)

  St. John-Stevas, Norman

  Grimond, Rt. Hn. J.

  McNair-Wilson, Patrick (New Forest)

  Sandys, Rt. Hn. D.

  Curden, Harold

  Maddan, Martin

  Scott, Nicholas

  Hall, John (Wycombe)

  Maginnis, John E.

  Scott-Hopkins, James

  Hall-Davis, A. G. F.

  Marples, Rt. Hn. Ernest

  Sharples, Richard

  Hamilton, Lord (Fermanagh)

  Marten, Neil

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

  Hamilton, Michael (Salisbury)

  Maude, Angus

  Silvester, Frederick

  Harris, Frederic (Croydon, N. W.)

  Maudling, Rt. Hn. Reginald

  Sinclair, Sir George

  Harris, Reader (Heston)

  Mawby, Ray

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

  Harrison, Brian (Maldon)

  Maxwell-Hyslop R. J.

  Smith, John (London & W'minster)

  Harrison, Col. Sir Harwood (Eye)

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

  Speed, Keith

  Harvie Anderson, Miss

  Mills, Peter (Torrington)

  Stainton, Keith

  Hastings, Stephen

  Mills, Stratton (Belfast, N.)

  Steel, David (Roxburgh)

  Hawkins, Paul

  Miscampbell, Norman

  Stodart, Anthony

  Hay, John

  Mitchell, David (Basingstoke)

  Stoddart-Scott, Col. Sir M.

  Heald, Rt. Hn. Sir Lionel

  Monro, Hector

  Summers, Sir spencer

  Heath, Rt. Hn. Edward

  Montgomery, Fergus

  Tapsell, Peter

  Heseltine, Michael

  More, Jasper

  Taylor, Sir Charles (Eastbourne)

  Higgins, Terence L.

  Morgan, Geraint (Denbigh)

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

  Hiley, Joseph

  Morgan-Giles, Rear-Adm.

  Taylor, Frank (Moss Site)

  Hill, J. E. B.

  Morrison, Charles (Devizes)

  Thatcher, Mrs. Margaret

  Hirst, Geoffrey

  Mott-Radclyffe, Sir Charles

  Thorpe, Rt. Hn. Jeremy

  Hogg, Rt. Hn. Quintin

  Munro-Lucas-Tooth, Sir Hugh

  Tilney, John

  Holland, Philip

  Murton, Oscar

  Turton, Rt. Hn. R. H.

  Hooson, Emlyn

  Nabarro, Sir Gerald

  van Straubenzee, W. R.

  Hordern, Peter

  Neave, Airey

  Vaughan-Morgan, Rt. Hn. Sir John

  Hornby, Richard

  Nicholls, Sir Harmar

  Vickers, Dame Joan

  Howell, David (Cuildford)

  Noble, Rt. Hn. Michael

  Waddington, David

  Hunt, John

  Nott, John

  Wainwright, Richard (Colne Valley)

  Hutchison, Michael Clark

  Onslow, Cranley

  Iremonger, T. L.

  Orr-Ewing, Sir Ian

  Walker, Peter (Worcester)

  Irvine, Bryant Godman (Rye)

  Osborn, John (Hallam)

  Walker-Smith, Rt. Hn. Sir Derek

  Jenkin, Patrick (Woodford)

  Osborne, Sir Cyril (Louth)

  Wall, Patrick

  Johnson Smith, G. (E. Grinstead)

  Page, Graham (Crosby)

  Walters, Dennis

  Johnston, Russell (Inverness)

  Page, John (Harrow, W.)

  Ward, Dame Irene

  Jones, Arthur (Northants, S.)

  Pardoe, John

  Weatherill, Bernard

  Jopling, Michael

  Pearson, Sir Frank (Ciltheroe)

  Wells, John (Maidstone)

  Joseph, Rt. Hn. Sir Keith

  Peel, John

  Whitelaw, Rt. Hn. William

  Kaberry, Sir Donald

  Percival, Ian

  Wiggin, A. W.

  Peyton, John

  Williams, Donald (Dudley)

  Kerby, Capt. Henry

  Pike, Miss Mervyn

  Wilson, Geoffrey (Truro)

  Kershaw, Anthony

  Pink, R. Bonner

  Winstanley, Dr. M. P.

  Kimball, Marcus

  Pounder, Rafton

  Wolrige-Gordon, Patrick

  King, Evelyn (Dorset, S.)

  Powell, Rt. Hn. J. Enoch

  Wood, Rt. Hn. Richard

  Kirk, Peter

  Price, David (Eastleigh)

  Woodnutt, Mark

  Kitson, Timothy

  Prior, J. M. L.

  Worsley, Marcus

  Lambton, Viscount

  Pym, Francis

  Wylie, N. R.

  Lancaster, Col. C. G.

  Quennell, Miss J. M.

  Younger, Hn. George

  Lane, David

  Ramsden, Rt. Hn. James

  Langford-Holt, Sir John

  Rawlinson, Rt. Hn. Sir Peter

  TELLERS FOR THE NOES:

  Legge-Bourke, Sir Harry

  Rees-Davies W. R.

  Mr. Reginald Eyre and

  Lewis, Kenneth (Rutland)

  Renton, Rt. Hn. Sir David

  Mr. Anthony Grant.

  36. SELECTIVE EMPLOYMENT PAYMENTS
  Motion made, and Question,
  That it is expedient to authorise any removal or exclusion of an employment from the employments to which section 1 or 2 of the Selective Employment Payments Act 1966 applies which is attributable to—

  (a) any provision amending the definition of Standard Industrial Classification in section 10(1) of that Act by the substitution for the reference to the 1963 edition of that Classification of a reference to the 1968 edition thereof; or

  (b) any provision subject to which that amendment of that definition is made.—[Mr. Roy Jenkins.]

  put forthwith pursuant to Standing Order No. 90(2) (Ways and Means Motions), and agreed to.
  37. POWER OF TREASURY TO BORROW
  Motion made, and Question,
  That it is expedient to authorise the raising of money through trustee savings banks under section 12 of the National Loans Act 1968.—[Mr. Roy Jenkins.]
  put forthwith pursuant to Standing Order No. 90(2) (Ways and Means Motions), and agreed to.
  38. RELIEF FROM TAX (INCIDENTAL AND CONSEQUENTIAL CHARGES)
  Motion made, and Question,
  That it is expedient to authorise any incidental or consequential charges to any duty or tax (including charges having retrospective

  209
  effect) which may arise from provisions designed in general to afford relief from tax.—[Mr. Roy Jenkins.]
  put forthwith pursuant to Standing Order No. 90(2) (Ways and Means Motions), and agreed to.
  39. CONSOLIDATION AMENDMENTS
  Motion made, and Question,
  That, for the purposes of legislation connected with the consolidation of the Income Tax Acts, the Corporation Tax Acts, and certain enactments relating to capital gains tax, it is expedient to authorise—

  (a) amendments relating to the recovery or tax and interest on overdue tax, and

  (b) declaratory provisions concerning the application for the purposes of corporation tax of certain provisions of the Income Tax Acts, and other matters.—[Mr. Roy Jenkins.]

  put forthwith pursuant to Standing Order No. 90(2) (Ways and Means motions), and agreed to.

  WAYS AND MEANS

    PROCEDURE (FUTURE TAXATION)
    Motion made, and Question,
    That, notwithstanding anything to the contrary in the practice of the House precluding the inclusion in Finance Bills of proposals coming into force in a future year, any Finance Bill of the present Session may contain such provisions being—

    (a) provisions related directly or indirectly to the disallowance of interest as a deduction for tax, or

    (b) provisions connected with the consolidation of the Income Tax Acts, the Corporation Tax Acts and certain enactments relating to capital gains tax.—[Mr. Roy Jenkins.]

    put forthwith pursuant to Standing Order No. 90(2) (Ways and Means motions), and agreed to.

    PROCEDURE (SELECTIVE EMPLOYMENT PAYMENTS)
    Motion made, and Question,
    That, notwithstanding anything to the contrary in the practice of the House relating to the matters which may be included in Finance Bills, provision may be made in any Finance Bill of the present Session for adding to the employments to which section 1 of the Selective Employment Payments Act 1966 applies in respect of which selective employment premium is payable if that provision is made solely by way of amendment of the definition of Standard Industrial Classification in section 10(1) of that Act by substituting for the reference to the 1963 edition of that Classification a reference to the 1968 edition thereof or by way of the amendment of the definition of non-qualifying
    210
    activities in the said section 10(1).—[Mr. Roy Jenkins.]
    put forthwith pursuant to Standing Order No. 90(2) (Ways and Means motions), and agreed to.

    PROCEDURE (LOANS TO GOVERNMENT OF NORTHERN IRELAND)
    Motion made, and Question,
    That, notwithstanding anything to the contrary in the practice of the House relating to the matters which may be included in Finance Bills, provision may be made in any Finance Bill of the present Session for increasing the limit in section 2(1) of the Miscellaneous Financial Provisions Act 1950 on the sums which may be advanced to the Exchequer of Northern Ireland by way of loan under that section.—[Mr. Roy Jenkins.]
    put forthwith pursuant to Standing Order No. 90(2) (Ways and Means motions), and agreed to.

  FINANCE [MONEY]
  Queen's Recommendation having been signified—
  Motion made, and Question,
  That, for the purposes of any Act of the present Session relating to finance, it is expedient to authorise—

  (1) the payment out of moneys provided by Parliament of any increase in the sums so payable under the Selective Employment Payments Act 1966 which is attributable to any provision of that Act of the present Session—

  (a) amending the definition of Standard Industrial Classification in section 10(1) of that Act by substituting for the reference to the 1963 edition of that Classification a reference to the 1968 edition thereof; or

  (b) amending the definition of non-qualifying activities in the said section 10(1); or

  (c) providing for relief from selective employment tax by way of the payment to employers of amounts not exceeding the amount of that tax paid by them; or

  (d) increasing the amount of that tax;

  (2) any increase in the sums to be issued out of the National Loans Fund which is attributable to any provision of that Act of the present Session increasing the limit in section 2(1) of the Miscellaneous Financial Provisions Act 1950 on the sums which may be advanced to the Exchequer of Northern Ireland by way of loan under that section;

  (3) any increase in the sums to be issued out of the National Loans Fund which is attributable to any extension of the power of borrowing under the National Loans Act 1968.—[Mr. Roy Jenkins.]

  put forthwith pursuant to Standing Order No. 90(2) (Ways and Means motions), and agreed to
  Bill ordered to be brought in upon the the Resolutions relating to Ways and Means and Finance [Money] and the Orders relating to Procedure agreed to this day; to be brought in by The Chairman of Ways and Means, the Chancellor of the Exchequer, Mr. John Diamond, Mr. Harold Lever, and Mr. Dick Taverne.

  FINANCE
  Bill to grant certain duties, to alter other duties, and to amend the law relating to the National Debt and the Public Revenue, and to make further provision in connection with Finance, presented accordingly and read the First time; to be read a Second time Tomorrow and to be printed. [Bill 140.]

  ARMY RESERVE BILL
  Not amended (in the Standing Committee), considered.
  Motion made and Question, That the Bill be now read the Third time, put forthwith pursuant to Standing Order No. 55 (Third Reading), and agreed to.
  Bill accordingly read the Third time and passed.

  CUSTOMS DUTIES (DUMPING AND SUBSIDIES) BILL [Lords]
  Order for Second Reading read.
  11.12 p.m.
  The Solicitor-General (Sir Arthur Irvine): I beg to move, That the Bill be now read a Second time.
  This is a useful consolidation Bill which consolidates our statute law on dumping and subsidies. The law on these subjects is at present contained in the Customs Duties (Dumping and Subsidies) Act, 1957, the Import Duties Act, 1958, and the Customs Duties (Dumping and Subsidies) Amendment Act, 1968.
  The Select Committee on the Consolidation of Bills has considered the Bill and has heard evidence upon it. It reports that it considers that the Bill is pure consolidation and represents the existing law. In these circumstances, and having regard to the character of the matter, I recommend the Bill to the House.
  11.14 p.m.
  Mr. Graham Page: As the Solicitor-General said, this is a consolidation Measure which seeks to consolidate three Acts—one of 1957, one of 1958 and one as late as of 1968. Again as the hon. and learned Gentleman said, the Select Committee on the Consolidation of Bills has reported that the Bill is pure consolidation and represents the existing law. Therefore in general the House must accept that what is contained in the Bill is the law and is not debatable in the House.
  But Erskine May tells us at page 553 that certain Amendments may be moved to a consolidation Bill which is pure
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  consolidation or is recommended as such, and one of the Amendments which Erskine May said could be moved to such a Bill is
  "An Amendment which seeks to bring the Bill into conformity with the existing law, if the chairman is satisfied that the Bill, as drafted, would effect an alteration in the law."
  I shall seek in Committee to satisfy the Chairman that in Clause 15 this Bill does effect an alteration in the law. Therefore it is as well that I should indicate that on Second Reading.
  The existing law is that any power of the Board of Trade to make Orders shall be exercisable by Statutory Instrument, but that where an Order imposes an increase in the duty the Statutory Instrument shall be laid before this House after being made and the Order shall cease to have effect at the end of 28 days after that on which it is made unless at some time before the end of those 28 days the Order is approved by Resolution of the House. But where the Order of the Board of Trade has the effect of altering the rate of duty on any goods in such a way that the new rate is not directly comparable with the old, if the Treasury certifies that it has not increased the duty, then it does not have to go through the affirmative procedure but only through the negative procedure in the House.
  Where this Order alters the law is to substitute the certificate of the Board of Trade for the certificate of the Treasury, and evidence given to the Select Committee on the Consolidation of Bills clearly stated—and I am quoting from page 2 of the report of the evidence of the draftsman before that Committee—that:
  "What the subsection says"—
  and he was speaking of the existing law—
  "is that if the Treasury certify that the order imposing an import duty is not basically increasing the level of the duty, then you can treat it as an order, not a charging order, and therefore not subject to an Affirmative Resolution but subject only to a Negative Resolution."
  He goes on a few lines later to say
  "The plain sense of it is that a certificate of the department making the order is required …"
  and he then goes on—
  "… I thought it was justifiable to substitute the reference to the Board of Trade."

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  So he recognises in his evidence before the Select Committee that an alteration in the law was being made here and that the Bill substitutes for the opinion of the Treasury the opinion of the Board of Trade, so that in future the Department which makes the Order, the Board of Trade, shall decide whether or not that Order shall require an affirmative Resolution of the House. If the Order increases the duty, it is right that it should come before the House to receive the affirmation of the House to keep it alive longer than 28 days.
  At present, as the quotation which I have given shows, under the existing law the Treasury decides whether a Board of Trade Order requires that affirmation. But in Clause 15 of the Bill it will be the Board of Trade which will be the judge and jury in its own cause and will be able to certify whether this House shall be permitted to consider the Order in an affirmative Resolution, or whether it should be merely subject to negative procedure.
  The House may well feel that it is the proper thing to do, to deal with it in that way, but at least the House should be made aware of what is being done under the guise of consolidation.
  It is therefore right for me to indicate that I shall seek to take advantage of that passage in Erskine May which permits an Amendment to be put down on the Committee stage.
  Question put and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Committee of the whole House.—[Mr. Ernest G. Perry.]
  Committee Tomorrow.

  FAMILY LAW REFORM [MONEY] (No. 2)
  Queen's Recommendation having been signified—
  Resolved,
  That, for the purposes of any Act of the present Session to amend the law relating to the age of majority, to persons who have not attained that age and to the time when a particular age is attained, it is expedient to authorise any increase in the sums payable out of the Consolidated Fund which is attributable to any provision of that Act amending sections 2 and 4 of the Civil List Act 1952.—[The Attorney-General.]

  BEARSTED MATERNITY HOSPITAL, HAMPTON COURT
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Ernest G. Perry.]
  Mr. R. Gresham Cooke: A very popular, highly respected local maternity hospital, namely the Bearsted Memorial Maternity Hospital at Hampton Court, has been murdered by the action of the North-East Metropolitan Hospital Board and the Department of Health and Social Security.
  This small but well-placed maternity hospital of some 32 beds serves not only my own constituency of Twickenham, which includes Teddington, Hampton, Hampton Wick, but also such surrounding areas as Richmond, Kingston, Molesey, Thames Ditton, Sunbury, Shepperton and Feltham.
  In the second half of September last year, I was informed by the North-East Metropolitan Hospital Board that the Board was proposing to recommend to the Minister of Health that the hospital be closed. It may seem strange that a hospital in the south-west of the London area should be under the North-East Board—and I feel that that odd circumstance may have contributed to its closure—but the hospital was originally an off-shoot of a hospital at Stoke Newington providing a maternity service for Jewish mothers, and since the introduction of the National Health Service it has come under the National Health Service and provides a local service for mothers of all denominations.
  Immediately the Press notice was published by the Board uproar broke out in my constituency. Every section of the community was shocked. I sent a strong letter of protest to the board in which I said:
  "This is the only maternity hospital in my constituency. Considerable sums had been spent on a new operating theatre and modernisation. It is extremely convenient, being served by local buses, and its closing down would be a very real loss to the district."
  In reply the Board stated that no final decision had been made. It said that the matter would be reviewed in the light of any representations before it made a recommendation to the Minister. It recognised the high standard of work at the hospital but considered that other

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  local hospitals could meet the need. But, of course, these other hospitals are six or seven miles away—for instance, at Chiswick, West Middlesex and Ashford, Middlesex.
  To get to these hospitals from Hampton means awkward journeys for expectant mothers and their families. Going by bus means having to change buses. The rail journey means changing trains. Surely this sort of journey is not good for pregnant women going for consultation before childbirth.
  After this statement by the Board, a very large number of representations were received locally from the Richmondupon-Thames Council, the Teddington and Hampton Women Citizens' Association, the Strawberry Hill Residents' Association and other bodies, many doctors and clergymen and public and social workers of all kinds. A public petition was organised by two council members, Alderman Crane and Councillor Kenton, of Hampton, and nearly 8,000 signatures were quickly gathered against the proposed closure. More could readily have been obtained if the petition had not been closed at the beginning of December. In due course I presented the petition to the House.
  On 16th December, a strong delegation of local councillors, a local doctor, the G.L.C. representative, Mr. Toby Jessel, who has been taking a close interest in the matter, went to the Board which was then chaired by Sir Graham Rowlandson. I was also on the delegation, which told the board that the great majority of local doctors were in favour of the retention of the hospital, together with the local clergy, by a majority of 21 to one.
  The whole matter was summed up by one Teddington general practitioner when he said that the hospital
  "… is staffed by first class Consultants in Obstetrics. It is very popular with patients. It is easy of access for those in the Catchment Area. The liaison with the family doctors is excellent. Were it to be closed the local maternity patients would need to be directed to other Hospitals some distance away. This would not be in their interest when attending ante-natal clinics in inclement weather by public transport, and in addition it would make evening visiting more difficult for their husbands after their day's work."
  The Archdeacon of Kingston said:
  "Maternity Hospitals seem to me to be in a rather unique position. The patients are not
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  really ill and what the mothers need most of all is a sense of security, and they find this by being reasonably near home so that they can be regularly visited.
  I would have thought it possible to know which would be acute cases who would then be sent to Hospitals that have specialised services."
  A lady doctor at Twickenham commented:
  "For patients who have been unable to have their babies in their own homes and yet scared to be admitted to a large hospital, it has been a boon."
  The hospital, therefore, is of great psychological value.
  An example of the reputation of the hospital locally is given by the reply to a question put by a local vicar to an expectant mother. He asked her, "Which hospital are you having your baby in?" She replied, "I'm not having it in hospital—I'm having it at Bearsted." A local clergyman said:
  "This seems to me to indicate very forcibly that Bearsted ideally fulfils the needs of any expectant mother—the combination of 'home' conditions together with expert medical treatment.…"
  A Kingston doctor stated:
  "It is the warmth of a friendly staff in intimate surroundings that gives mothers the reassurance they need, and prevents many of the complications which strike terror into the hearts of so many women. This is what makes the Bearsted popular among our patients."
  When this matter was being discussed with the North-East Board, the question of the birthrate was raised and whether it was falling. I should like to point out that in 1947 to 1950 the birthrate reached a peak. This means that there are many young people in their twenties who may well produce an equivalent peak in 1969 and the 1970s. I have a news-cutting which states that
  "The beginning of a baby boom in England and Wales is forecast by the Registrar General",
  who expected an upward trend in births this year. In the south-west area of London there has been a 10 per cent. increase in births.
  Despite all that we said, the board persisted in its view on closure and, on 18th December, evidently put its final recommendation to the Minister. I was not told of this at the time, but I read it in the Press after Christmas, and on 6th January I asked for confirmation from the Board. It was confirmed. I had previously been in correspondence

  219
  with the Secretary of State for Social Services and an interview was arranged for me with the Minister of State, the hon. Member for Dover (Mr. Ennals).
  When we went to see the Minister of State we put a powerful memorandum to him. We had the support not only of local representatives but of Dr. David Brown, Director of the Postgraduate Institute of Obstetrics and Gynaecology at Chelmsford. We also had support from the hon. Member for Feltham (Mr. Russell Kerr). We pointed to the popularity of the hospital, the difficulties of patients going elsewhere, the question of transport to other hospitals, the excellent maternity record and the fact that the hospital was not costly to maintain. As far as I understand, its cost per patient is below that of most maternity hospitals.
  To crown all, however, at the moment the extension to the maternity block at the West Middlesex Hospital, which consisted of 17 beds and two delivery rooms, had to be closed through subsidence of the foundations. I asked the Minister of State whether we could really afford to lose 49 maternity beds in the district all at one time. We pointed out to him that, as one Twickenham doctor said, Bearsted's
  "statistics for maternal and foetal mortalities for the last three years are better than for the larger units."
  As a Hanworth doctor said,
  "In large maternity or surgical hospitals, sepsis is always a problem. Smaller units usually have no trouble, a most important factor in favour of a smaller maternity unit."
  In addition, Mr. David Brown, the Director of the Postgraduate Institute of Obstetrics and Gynaecology at Chelmsford, made a powerful case for a general practitioner maternity unit to be built into Bearsted to maintain the interest and train general practitioners in maternity work, as otherwise that type of work is gradually being swallowed up and will, I think, be gobbled up by the specialist units all over the country.
  That interview took place on 28th January. We were given to expect a decision by the Minister in, perhaps, four or five weeks. I told the Minister of State that I would postpone my application for an Adjournment debate to give him time to go into all the factors and the evidence that we had collected.
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  But now comes what I consider to be the disgraceful train of events. The weeks went by without a decision by the Minister, on whom the onus now rested fairly and squarely. By 23rd March I began to get restive as I had heard rumours that staff were leaving because of the uncertainty of the future of the hospital. I sent a telegram that weekend to the Department of Health pressing for a decision and followed up with an urgent letter to Baroness Serota, the Minister of State, who had now taken over responsibility from the hon. Member for Dover. I asked that a reprieve he given to Bearsted while this matter was being considered. I also made a statement to this effect in my constituency at that time. But on 25th March I heard on the grapevine, through a constituent whose daughter was at Bearsted Hospital, that new patients were being turned away and existing ones were about to be transferred to another hospital. There was no official statement yet by the Government, but then I heard that the Tottenham Group of the North-East Metropolitan Regional Hospital Board had issued a statement that owing to staffing difficulties it was necessary to refuse admission. Indeed, the Tottenham Group, to which I spoke, was very concerned and upset about the position.
  What had happened was that the consultant physician at Bearsted, knowing that the medical registrar was leaving at the end of the month, had made valiant efforts to get a replacement, but who would come to the post without any certain future? The consultant could not even offer a month's employment to a registrar. He became so fed up with the situation that he put in his resignation. All the dilly-dallying and unconscionable delay in making a decision about the future of the hospital led to staff leaving, and the hospital to die from inanition.
  I at once got in touch with the Minister in charge, the Baroness Serota, and put to her the plight of the mothers already there. Owing to her efforts, I believe that two mothers remained, but the rest were moved or discharged. This was a great shock to the mothers who were there, and a great distress to the mothers already booked to go to Bearsted.
  So we come to the death of a gallant little hospital by painful inches and a thousand cuts spread over exactly six

  221
  months, and all made worse by the delay and dithering of the Government since my interview with the Minister of State on 28th January. I indict the North-East Metropolitan Regional Hospital Board and the Government for closing a much-loved maternity hospital; an amenity to the district; one much more convenient to mothers, fathers and families than any of the others several miles away; one that costs no more than any other maternity hospital, and which is cheaper than some; one that may be needed for a rise in births, as I am told that Ashford Hospital is sometimes overcrowded and the extension to the West Middlesex Hospital is still closed; one that has a very good mortality record—better than that of other hospitals in the district; one with a higher than average use of beds; and one that used local staff who might not be able to work elsewhere.
  Altogether, the closing of Bearsted is a tragedy for my constituents which will not soon be forgotten.
  11.33 p.m.
  Mr. Anthony Royle: I intervene briefly to support my hon. Friend the Member for Twickenham (Mr. Gresham Cooke) in his very powerful speech in support of keeping Bearsted Hospital open. He has led a magnificent campaign and has brought to bear all the pressure possible to keep this hospital alive. This debate is very important both to my hon. Friend and to his constituents. I have a link with him on this, in that we are both Members representing parts of the borough of Richmond upon Thames, I on my side of the river and my hon. Friend on the other.
  We are also suffering from the depradations of yet another regional hospital board. The South-West Metropolitan Regional Hospital Board last year, with the inefficiency of the Minister's Department, then the responsibility of his predecessor, got itself into a muddle over the future of the casualty department for the Royal Hospital, Richmond, a very old and well-established hospital. I had two interviews with the chairman of the regional hospital board, who treated both me and members of the Friends of the Royal Hospital with great courtesy, but a firm decision was taken as recently as
  222
  February this year that the Board gave approval in principle to the closure of the Richmond casualty department.
  This has caused great distress in my constituency, just as distress has been caused in my hon. Friend's constituency the other side of the river. It has not yet come to the Secretary of State, and I do not expect him to give a detailed answer to these points, although I have given him notice of them. But would he just assure me that, when the decision on this proposed closure comes before him, he will receive me and a small deputation, so that we can put our very real concern about the closure of a very old and respected hospital, which is highly valued in my constituency?
  11.36 p.m.
  The Secretary of State for Social Services (Mr. Richard Crossman): It would under-rate the hon. Member for Twickenham (Mr. Gresham Cooke), to say that he has fought tenaciously for the Bearsted Hospital, because he has done a very fine job. He has lobbied the chairman of the regional hospital board, has bombarded me personally with letters, and led two deputations to my Ministers before a decision was taken. When he met my noble Friend, the Baroness Serota, I got the impression that when he was informed of my decision to close the annexe he accepted the decision, although he criticised the procedures beforehand. I gather that his case now is not that the closure should not take place but that the Annexe could have a future as a general practitioner maternity unit—
  Mr. Gresham Cooke: I accepted that because the staff had already gone and nothing could be done.
  Mr. Crossman: I will come to the procedures.
  I should get the history right, because it is important for the Bearsted family.
  The Bearsted Memorial Annexe, comprising 35 maternity beds, was improvised during the war in a converted hotel to provide maternity accommodation, additional to that at Stoke Newington, for Jewish patients. This annexe was retained after the war and was taken over, as part of the parent hospital, by the North - East Metropolitan Regional Hospital Board, although physically the unit is in the area of the North-west

  223
  Metropolitan Regional Hospital Board. In fact, for many years the hospital has taken patients from the Twickenham area and has almost ceased to be used by Jewish patients. In 1967 there were 14 Jewish out of 972 patients.
  The Bearsted annexe has become, in fact, a small maternity hospital for the Twickenham area. It is natural that people there have formed an attachment to this hospital and the proposal to close was not acceptable. I can understand the strong emotions roused when the Hospital Board suggested it might be closed. But Boards have a duty to provide the best possible medical service. In the balance between local loyalties and easily accessible points of treatment on the one hand, and, on the other, the most up to date and specialised services the latter must be given more weight.
  It is desirable that a maternity unit should be an integral part of a district general hospital. Then we can be sure that there will be continuous medical cover on the spot with full supporting services. In maternity cases an emergency may arise quickly. Then it is desirable that the obstetrician should have the assistance of a team to provide whatever he requires for the patient such as blood for transfusion, anaesthesia, or the pathological facilities necessary to monitor treatment. The trouble was that, although the Bearsted annexe provided a satisfactory service for normal deliveries, it was dependent on an anaesthetist from the West Middlesex, seven miles away, and for pathology and the supply of blood from the Kingston Hospital. Under favourable conditions it took an hour or more to obtain blood from this source.
  I know that it was argued that without the Bearsted annexe the area was inadequately served by maternity beds. But the latest available figures reveal that there were, on average, forty-four vacant maternity beds in neighbouring hospitals. In the same period, there was an average of twenty-four occupied beds in the Bearsted annexe, leaving 11 unused. This does not take account of the modern maternity facilities now available at Ashford. One has to admit, therefore, that the Bearsted Memorial Annexe beds were surplus to the requirement of the area.
  On staff and patients reallocation, I should point out that of the 42 permanent
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  staff 27 have already found other employment and alternative employment is being negotiated for the others. As for patients' reallocation, I understand that arrangements were made to accommodate all the patients in the annexe before it was closed, and that the two patients who were there when it was closed were moved to other hospital accommodation.
  I want now to turn to a point that particularly concerned me.
  My predecessor in another Administration assured Lord Bearsted in July, 1952, that the Bearsted Hospital would be extended and at the same time the Annexe would be closed. Last year my predecessor discussed with Lord Bearsted the future of the Bearsted Hospital in the greatly changed circumstances of the present hospital service and suggested that, instead of extending the present hospital, it should be rebuilt as a wing of a district general hospital in North-East London. I would like to take this opportunity of publicly reassuring Lord Bearsted and his family. I am not able yet to formulate precise proposals nor to indicate when and at which hospital these new facilities will be provided. But I will ensure that the North-East Metropolitan Regional Hospital Board takes account of this undertaking in its future plans, so that a Bearsted wing is provided with the special facilities desired by the Jewish community. It is important that in these matters commitments entered into by a predecessor should be honoured by his successors.
  I turn to the second problem, raised in the last minute or two by the hon. Member for Richmond (Mr. A. Royle) about the future of the casualty department at the Royal Hospital, Richmond. I think that I can satisfy him in that regard.
  The Board on 28th March this year circulated a statement of its proposals to the hospital management committee concerned, and to local health authorities, executive councils, and local medical committees, and to the public. When the views of these bodies and of the public have been received, the Board will decide whether a firm recommendation should be made to me to close the casualty departments at Richmond and at Surbiton. I give him his assurance, that no action will be taken to effect the closure of these departments until the views of

  225
  all interested parties have been received and have been considered both by the Board, which will then submit to me a final proposal, and by myself. I have as yet, therefore, not given authority for these departments to close, and I will not do so unless and until I am satisfied that the new arrangements proposed by the Board are the best that can be made in
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  the interests of the public and as part of the representations of the service.
  On the question of representations, I shall myself be delighted to receive a delegation headed by the hon. Gentleman.
  Question put and agreed to.
  Adjourned accordingly at eighteen minutes to Twelve o'clock.

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  Agriculture and Fishing (Road Fuel Duty)
  Local Authority Housing (Direct Labour)
  Local Authority Housing (Direct Labour)
  LEGAL EDUCATION (FEES)
  LEGAL EDUCATION (FEES)
AGRICULTURE, FISHERIES AND FOOD
  Horticultural Growers (Costs)
  Horticultural Growers (Costs)
  United States and Canadian Wheat
  United States and Canadian Wheat
  Beef Imports (Argentine and Uruguay)
  Beef Imports (Argentine and Uruguay)
  County Agricultural Executive Committees
  County Agricultural Executive Committees
  Petrol and Oil Costs
  Petrol and Oil Costs
  Salmon Stocks
  Salmon Stocks
  Appointments
  Appointments
ECONOMIC AFFAIRS
  Hunt Committee (Report)
  Hunt Committee (Report)
HOME DEPARTMENT
  Detained Passengers (Ports Welfare and Advisory Service)
  Detained Passengers (Ports Welfare and Advisory Service)
GAS
  North Sea Gas (Power Stations)
  North Sea Gas (Power Stations)
MINISTRY OF POWER
  Appointments
  Appointments
TECHNOLOGY
  Shiprepairing Industries (Subsidies)
  Shiprepairing Industries (Subsidies)
  Computer-Aided Design Committee
  Computer-Aided Design Committee
  Atomic Energy Authority (Research Costs)
  Atomic Energy Authority (Research Costs)
WALES
  Plasnewydd Clearance Order (Cardiff)
  Plasnewydd Clearance Order (Cardiff)

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

PRISON SERVICE: APPOINTMENT OF GOVERNORS
LORD BROOKE OF CUMNOR: 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 propose to alter the established arrangements for the appointment of assistant governors and governors in the Prison Service.]
THE MINISTER OF STATE, HOME OFFFICE (LORD STONIIAM): My Lords, assistant governors are at present recruited through an annual limited competition open only to serving members of the prison officer class, or by promotion from among prison officers who have reached the rank of chief officer; and, to the extent that insufficient recruits are obtained in these two ways, by open competition. Since 1948, it has been the aim of successive Governments that as many governors as possible should be appointed from within the ranks of the Prison Service, but progress has been slow, and in practice the majority of vacancies has been filled from outside the Prison Service by open competition. As my right honourable friend announced recently in another place, it is his aim that promotion from within the Service should be the normal method of filling governor vacancies, and for this purpose he has appointed a Working Party of officials and staff representatives to recommend what changes are necessary to secure that over a period a one-tier system is introduced into the Prison Service in England and Wales and that meanwhile an increasing proportion of the vacancies in the governor class is
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filled from within the Service. It is already the practice to appoint prison governors by promotion from the assistant governor ranks. No change in this procedure is contemplated.
LORD BROOKE OF CUMNOR: My Lords, I thank the noble Lord for that information. While I cordially agree with him about the desirability of its being open to prison officers with the requisite abilities to rise to the highest positions in the Service, may I ask whether, bearing in mind the high quality of assistant governors and governors in the Prison Service generally, he will undertake not to make any substantial change in the existing arrangements for recruiting and appointing them without first publishing the Report of the Working Party which has been set up?
LORD STONHAM: My Lords, I join with the noble Lord in his tribute to the quality of governors and assistant governors generally, and appreciate the importance of the point he has just raised. As he will know, three present governors and one former governor are members of the Working Party. I think that guarantees the quality of the advice that my right honourable friend will receive. I will certainly make representations to my right honourable friend with regard to the point of publication of the Report.

WELSH REGIMENTS AND ESTABLISHMENT SURPLUS
2.38 p.m.
LORD OGMORE: 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, in view of the fact that 97 officers and 551 soldiers now in the South Wales Borderers and the Welch Regiment are surplus to the establishment of the 1st Battalion of the Royal Regiment of Wales, they will on June 11, 1969, form a Second Battalion of the Royal Regiment of Wales.]
THE PARLIAMENTARY UNDERSECRETARY OF STATE FOR
DEFENCE, R.A.F. (LORD WINTER BOTTOM): No, my Lords. Most of the

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officers and soldiers surplus to the establishment of the Royal Regiment of Wales will serve in other regiments within the Prince of Wales's Division or be transferred into other Divisions or Corps.
LORD OGMORE: My Lords, may I ask the Minister whether he is aware that the officers and men mentioned in my Question joined one of the Welsh regiments on the understanding that they would always serve in the Welsh regiments; and is this not a disgraceful breach of faith?
LORD WINTERBOTTOM: My Lords, circumstances impose unpopular decisions upon us, and to what extent a firm commitment was entered into that a Welshman should always serve in a Welsh regiment. I cannot say.
LORD OGMORE: My Lords, may I ask the Minister how he thinks he is going to sustain, or even retain, recruiting in Wales if the Government play these shabby tricks on Welsh officers and soldiers?
LORD WINTER BOTTOM: My Lords, I deny that this is a shabby trick. It is something forced upon us by necessity.
LORD MOLSCN: My Lords, do not the Government think that they ought to make quite certain what undertakings were given? And is it not rather unsatisfactory that the Minister replies that he does not know whether any undertakings were given?
LORD WINTERBOTTOM: My Lords, I will make such an inquiry, but I should imagine that officers and men recruited into Welsh regiments were recruited under exactly the same terms as those recruited into any other regiment in the British Army.
LORD OGMORE: My Lords, may I ask the Minister whether he is aware that that statement is not correct? All officers and soldiers recruited into a Welsh regiment were so recruited on the assumption that they would remain in a Welsh regiment in the Welsh Brigade. But may I ask him, further, whether his attention has been drawn to the Statement on the Defence Estimates, 1959, and the Statement on Recruiting issued by the Minister
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of Defence on March 26, 1969? If his attention has been drawn to these documents, would he not agree that they show a serious falling off in recruiting for the Army?
LORD WINTERBOTTOM: My Lords, I have undertaken to see whether an undertaking was given. There is a great difference between an assumption and an undertaking; but I will look into the matter and let the two noble Lords who have spoken know what the position is.

GOVERNMENT STATEMENT
LORD BESWICK: My Lords, at a convenient moment after half past three my noble friend Lord Stonham will be making a Statement on the use of troops to guard certain key points in Northern Ireland.
FARMER AND COMPANY, LIMITED (TRANSFER OF REGISTRATION) BILL
Read 2a, and committed to the Committee on Unopposed Bills.
LUTON CORPORATION BILL
Read 2a, and committed to the Committee on Unopposed Bills.
BARCLAYS BANK BILL
Read 2a, and committed to the Committee on Unopposed Bills.

PARLIAMENT (No.6) BILL [H.L.]
2.44 p.m.
LORD ALPORT: My Lords, I beg leave to introduce a Bill to amend the law relating to the composition and powers of the House of Lords; to make related provision as to the parliamentary franchise and qualification; and for purposes connected therewith. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read 1a.—(Lord Alport.)
On Question, Whether the Bill shall be now read 1a?
Resolved in the affirmative: Bill read 1a accordingly, and to be printed.

GLASGOW CORPORATION (SUPERANNUATION, ETC.) ORDER CONFIRMATION BILL
Read 3a, and passed.

SUNDAY ENTERTAINMENTS ACT 1932
THE MINISTER OF STATE, DEPARTMENT OF HEALTH AND SOCIAL SECURITY (BARONESS SEROTA): My Lords, this is one of the general Orders which are made under the Sunday Entertainments Act 1932. I understand that no objections were received to the draft Order. I beg to move.
Moved, That the Order made by the Secretary of State for the Home Department for extending Section 1 of the Sun
The Lordships divided: Contents, 54; Not-Contents 43.

CONTENTS

Aberdare, L.

Goschen, V.

Popplewell, L.

Addison, V.

Hacking, L.

Ritchie-Calder, L.

Alport, L. [Teller.]

Hall, V.

St. Aldwyn, E.

Amulree, L.

Hilton of Upton, L.

St. Davids, V.

Auckland, L.

Kennet, L.

Segal, L.

Bessborough, E.

Latham, L.

Serota, Bs.

Beswick, L.

Leatherland, L. [Teller.]

Shackleton, L. (L. Privy Seal.)

Bowles, L.

Lindgren, L.

Shannon, E.

Brooke of Cumnor, L.

Listowel, E.

Shepherd, L.

Brooke of Ystradfellte, Bs.

McLeavy, L.

Snow, L.

Buckinghamshire, E.

Merrivale, L.

Stonham, L.

Byers, L.

Meston, L.

Stow Hill, L.

Carrington, L.

Mitchison, L.

Strabolgi, L.

Champion, L.

Molson, L.

Summerskill, Bs.

Crook, L.

Moyle, L.

Taylor, L.

Crowther, L.

Nugent of Guildford, L.

Taylor of Mansfield, L.

Gaitskell, Bs.

Nunburnholme, L.

Thurlow, L.

Geddes of Epsom, L.

Ogmore, L.

Winterbottom, L.

NOT-CONTENTS

Aberdeen and Temair, M.

Emmet of Amberley, Bs.

Mowbray and Stourton, L.

Ampthill, L.

Grenfell, L.

Plummer, Bs.

Archibald, L.

Grimston of Westbury, L.

Poltimore, L.

Balerno, L.

Guest, L.

Rankeillour, L.

Brockway, L.

Hayter, L.

Sackville, L.

Burden, L.

Henderson, L.

St. Helens, L.

Clwyd, L.

Howard of Glossop, L.

Salisbury, M.

Cork and Orrery, E. [Teller.]

Hylton-Foster, Bs.

Sandford, L.

Cottesloe, L.

Jessel, L.

Sempill, Ly.

Craigavon, V.

Kinnoull, E.

Somers, L. [Teller.]

Daventry, V.

Lambert, V.

Strathclyde, L.

Denham, L.

Loudoun, C.

Teynham, L.

Derby, Bp.

MacAndrew, L.

Trefgarne, L.

Effingham, E.

Milverton, L.

Vivian, L.

Ellenborough, L.

day Entertainments Act 1932 to the Rural District of Derwent be approved.—(Baroness Serota.)
On Question, Motion agreed to.

NURSES BILL [H.L.]
2.53 p.m.
BARONESS SEROTA: My Lords, I beg to move that this Bill be read a second time. The constitution of the two Councils who carry the statutory responsibility for the training of nurses for England and Wales and for Scotland has remained substantially unchanged for twenty years, and the House will be only too well aware that there have been considerable advances in nurse training and in the practice of nursing during this period. In view of the vital part which nurses play in all aspects of the Health Service, I am sure your Lordships will welcome the

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opportunity which this Bill presents to enhance the efficiency of the bodies responsible for their training, especially as it is being introduced at their own request after full consultation with all interested bodies concerned.
The changes now proposed streamline the Council's administrative processes by changing the committee structure by giving representation on the Council to enrolled nurses and increased representation to psychiatric nurses. As the election of nurses to the Council is due next year and the necessary preparations take several months, it is essential that the Bill is enacted this year if the 1970 elections are to take place under the proposed new constitution. Delay would involve the Council in the expense of an additional set of elections, from which I am sure we all wish to save them, or a five-year postponement of these desirable changes until the following elections. I hope, therefore, that this Bill will prove to be an uncontroversial one and will receive a swift passage through your Lordships' House.
The General Nursing Council for England and Wales has 36 members at present—18 are elected and 18 are appointed—and like most bodies of this size its main work is done through committees, two of which are affected by the changes proposed in this Bill. The first is the Mental Nurses Committee, which was established in 1949 when the training of mental nurses was brought wholly under the General Nursing Council, and at present elections to it are separate from those of the Council. This Bill, by giving greater representation to mental nurses on the Council, both enhances their status and enables the Committee to be made a standing committee of the Council, thereby avoiding the expense of separate elections. The second Committee which is affected is the Enrolled Nurses Committee, which was established in 1943 when the new qualification of State enrolled assistant nurse—now the State enrolled nurse—was introduced. I hope your Lordships who are familiar with the Health Service will agree that the enrolled nurse now has an established place in the nursing profession, and again it is felt that there is no need for a separate committee.
Turning now to the detail of the Bill, Clause 1 provides a new part of the register for nurses for the mentally sub
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normal in England and Wales, where there are at present two separate qualification for psychiatric nurses: the registered mental nurse and the registered nurse for the mentally subnormal. Under present legislation nurses for the mentally subnormal are on a section of the mental part of the register. This Bill now gives them a completely separate part of the register, recognising in full the fact that they form a separate branch of the profession. Under the proposed constitution it will be possible for the first time for a registered nurse for the mentally subnormal to be elected to the Council itself, a proposal which I am sure your Lordships will welcome. Some of your Lordships will know that there is already separate registration in Scotland for nurses trained in the nursing of persons suffering from mental defect.Recent events have seemed to highlight the urgent need to increase the number of trained nurses in hospitals for the subnormal, as well as to introduce other improvements in this branch of the Service, and I hope that this change, which recognises the standing of this branch of the nursing profession, will help towards this general end.
At present nurses train for the roll either in general nursing, mental nursing or in nursing for the subnormal, but there is only the one qualification of enrolled nurse. Enrolled nurses who have trained in, say, a hospital for the mentally ill need further training when they move to a hospital for the subnormal, but there is no way in which they can be distinguished by their particular training and experience. Nor can an enrolled nurse acquire a double qualification. Clause 1 provides that in future the roll of nurses of the General Nursing Council for England and Wales will be divided into parts according to the kind of training given, and this will bring it into line with the register. The proposals in this Bill do not, however, divide the Scottish roll as the training arrangements in Scotland are somewhat different from those in England and Wales, and the General Nursing Council for Scotland wish to continue with a single roll.
I would also draw your Lordships' attention to Clause 2, which provides for the increase in the number of members on the General Nursing Council for England and Wales. These follow from the change in the committee structure which I mentioned earlier, and provide

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for the election to the Council of an additional registered mental nurse, a registered nurse for the mentally subnormal and two enrolled nurses—one on the general part of the roll and one on either of the psychiatric parts of the roll. There are also changes in the appointed members which recognise the developments in nurse training, and the increase in the emphasis on community nursing. In addition, it is considered advisable to allow for possible future changes in training patterns, and for the need to add certain kinds of experience among the elected members. This is the reason for providing for four unspecified appointments to be made by the Secretary of State.
Changes in the General Nursing Council for Scotland are dealt with in Clause 3 of the Bill. These are more limited than those for England and Wales, because the Scottish Council is smaller; but here again there is an increase in the number of psychiatric nurses among the elected members to ensure the representation of registered nurses for mental defectives. Also, for the first time, two enrolled nurses will be elected to the Council. The number of members appointed by the Secretary of State for Scotland has in this case been increased by one.
Clause 4 of the Bill changes the status of the Mental Nurses Committee of the two Councils from separate statutory committees to statutory standing committees of the Councils. The functions of these standing committees will be the same as those of the present committees, with the addition in England and Wales of responsibility for pupil and enrolled psychiatric nurses. The greater representation of psychiatric nurses should in our view ensure that there is an adequate width of experience on the committees, and, in addition, provision has been made in respect of both Councils for the Secretary of State to nominate up to four additional members for appointment by the Council to the Committee. They would not, however, become members of the Council.
The purpose of Clause 5 of the Bill is to abolish the Enrolled Nurses Committees, which are at present concerned with the training of pupil nurses and the discipline of enrolled nurses. Now that the importance of enrolled nurses
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is clearly accepted by the provision in Clause 2 for the election of enrolled nurses to the Council, it is felt—and hope your Lordships will agree—that there is no longer any need to make special arrangements to protect their status. The current trend is towards combined training schools, training both student and pupil nurses, and it is felt that the educational function of the Enrolled Nurses Committee can be more effectively fulfilled by the Council's Education Committee and Mental Nurses Committee, both of which will in future include representatives of enrolled nurses. The present disciplinary function of the Enrolled Nurses Committee will pass to the Disciplinary Committee, thus avoiding the possible embarrassment of a double hearing when a case concerns a nurse who has the dual qualification of registered and enrolled nurse.
Opportunity is also being taken in Clauses 6, 7 and 8 of this Bill to deal with other minor matters which I will mention briefly. First, members of nurse-training committees and regional nurse-training committees are entitled to receive payment for loss of earnings or additional expenses. But every time there is a change in the rate of payment the Secretary of State is required to lay a Statutory Instrument. Clause 6 removes this requirement, and allows the Secretary of State, subject to the approval of my noble friend the Leader of the House, the Minister for the Civil Service, to determine any alteration in the rates payable. I hope the House will agree that this is a sensible and practical arrangement, and I can assure your Lordships that it will not lead to any increase in the frequency of change or any increase in expenditure. Clause 7 relates to the cost of recording details of student and pupil nurses in training, which is at present met from the fees for registration and enrolment, and to the cost of inquiries.
Clause 8 will remove from the Councils the duty to publish periodical lists of persons admitted to, removed from or restored to the register, the roll or the list. It is felt that these lists have little value and are wasteful of the Council's time and money. The information will still be readily available when needed, and the requirement that copies of the register, the roll and the list shall be kept at the

305
office of the Council, and shall be open to the inspection of any person without charge, will remain.
My Lords, I would only say in conclusion that this Bill is, I hope, one that deals with matters which are in no way controversial, and it has, I believe, been generally accepted by the nursing profession as meeting both the present and the foreseeable requirements of nurse training. Many of your Lordships may feel that these particular administrative proposals will not greatly affect the nurse at the bedside; but it is, after all, the nurse training schools which set the standards of nursing now and in the future, and they need the backing of an efficient and effective General Nursing Council. That is the object of the Bill, and I hope, therefore, that the House will give its unanimous approval to its Second Reading.
Moved, That the Bill be now read 2a.
—(Baroness Scrota.)
3.3 p.m.
BARONESS BROOKE OF YSTRAD
FELLTE: My Lords, we are grateful to the noble Baroness, Lady Serota, for the pains she has taken to explain this Nurses Bill. I am glad that the Government have introduced it in your Lordships' House, where we have the Minister of State for Health to pilot it through. It is appropriate that it has been presented to Parliament in the Jubilee Year of the General Nursing Council. For 50 years people who have been appointed, and who have worked in a voluntary capacity, have sat on the General Nursing Council for long hours and for many days in order that the general standard of training of nurses shall be improved, and I think it most appropriate that on the Second Reading of the Bill one should pay tribute to those people who have served on the General Nursing Council, either as members or as officers; and this I do with great pleasure and gratitude.
This is a Bill about the constitution of the Council, but I cannot speak on it without reminding your Lordships of all the unhappiness that exists among nurses to-day as a result of the way in which they have been treated over their pay and emoluments. Perhaps this is not the time to go into details, but here is the
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one and only case where the whole nation believes that the members of a profession are underpaid when one takes into account what they have to pay for hospital meals, for which they are now being charged. Although, so far, it is only the "Miss Veals" of the profession who are vociferous, a vast number of nurses all over the country would like to support Miss Veal if they were not embarrassed by her tactics. Perhaps her tactics are right. We have seen how airline pilots can extract big concessions by going on strike regardless of people's convenience or the national interest. Why should the nurses be held down simply because they have higher standards of conduct and duty than the pilots have?
I was in training myself as a nurse once, until I married my noble relative, and therefore became wastage from the profession. But my daughter is a trained nurse, and I know a number of her friends who are members of the nursing profession. It is only too obvious how often those girls—and the men, too—go the extra mile for the sake of their patients and get very little reward for what they do, compared with those working in less honourable and arduous walks of life.
My Lords, I am sure I have digressed, but I believe that the noble Baroness, Lady Serota, had she been in my place, would have seized the opportunity to make, the perhaps not altogether relevant intervention that I have made on this Bill, which has nothing whatsoever to do with the points I have raised. It is unfortunate that the Explanatory Memorandum on the Bill uses words about Clause 4 that are ambiguous, for the Explanatory Memorandum is often all that is seized upon by journalists and reproduced as a reliable précis. In this case, it has misled some people into supposing that elected members of the Council will no longer sit on the Mental Nurses Committee, which of course would be nonsense. There are three points of importance on which I hope the Minister of State will agree to improve the Bill. Clause 2 amends the numbers of persons to be appointed to the Council by the Secretary of State for Social Services and the Secretary of State for Education and Science, and adds to the appointing bodies the Central Midwives Board and the Council for the Training of Health Visitors. Under Clause

307
2(3) the Secretary of State for Social Services is required to consult:
"with persons and bodies having special knowledge and experience of the work "
of each class of persons to be appointed by him before appointing the medical practitioners and registered nurses to the Council. Surely all appointing bodies should be required to have appropriate consultations before making any appointment to the Council. It is also essential that all appointed persons should be actively engaged in their special field at the time of appointment, and should not be retired people or people who have gone off to do something else.
The third point on which I should like to see the Bill improved is connected with the requirement in paragraph 2(2) of the First Schedule to the 1957 Act, that the 15 registered general nurses shall be employed as registered nurses at the time they stand for election. I think that this requirement should be extended to all types of nurses standing for election. Every enrolled nurse candidate should be employed in the capacity of an enrolled nurse at the time of standing for election. This is a matter of principle which I know the profession considers to be of the utmost importance. The State enrolled nurses are particularly anxious that they shall be represented on the Council by enrolled nurses who are working as enrolled nurses and not by enrolled nurses who also hold the qualification of registered nurse.
Could the Minister of State also reconsider the date when the Act is to come into force? Clause 11(1) says that it is to be January 1, 1970. Why not a month after the Bill receives the Royal Assent? That would facilitate the arrangements for next year's elections, I know. I am sure that the general purpose of this Bill is welcomed by the nursing profession. If the Minister of State will help over the points I have mentioned, she can be sure of our help in speeding it through all the stages in your Lordships' House.
3.10 p.m.
LORD AMULREE: My Lords, I should like to join briefly in the general welcome given to this Bill which I think is a useful and valuable measure to come before your Lordships' House. I am sure that anything we can do at the present time to improve the status of the
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nurses taking care of the mentally subnormal is greatly to be praised and encouraged. Therefore that alone makes this Bill worthwhile. At the risk of repeating what was said by the noble Baroness, Lady Brooke, I cannot let the occasion pass without agreeing with her very fully indeed that it is essential that the people on the Council should be people working in the branch of nursing which they are there to represent. I trust that the Minister will be able to give us the assurance not only that they will be in the grade themselves but that they will be actively working in it at the time when they are appointed and shall continue to work in it during their time on the Council.
There are two further points I would briefly mention. I trust that the fact that we now have these different categories of nurses will not mean that it will not be possible for nurses to move quite easily from one category to another if they wish to do so and that the move may be permanent or temporary. An enormous amount of good can be done in that way. I was thinking particularly of the value which I used to find in having nurses with some kind of training in mental sickness working among geriatric patients. Patients of this kind sometimes do things that can be startling to a young girl but not so startling to a nurse from a mental hospital. They may take off all their clothes in the middle of the day and walk about the ward. This could be frightening to some young people. I trust that nurses will still be able to move freely from one branch of the profession to another.
I think this Bill will increase the status and stature of the State-enrolled nurse. I am delighted to see this. When the enrolled nurses first came into being they were looked upon with some degree of suspicion, but now I think we are all agreed that they have become an integral part of the nursing service. I should like to join in any tributes paid to the great work that they have done in their branches of the profession. I am pleased to give what support I can to this Bill at its Second Reading and through its future stages.
3.13 p.m.
BARONESS SUMMERSKILL: My Lords, this is an innocuous little Bill that the House is debating to-day. I

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am quite sure that both Houses will approve it and that my noble friend will be only too happy to get it on the Statute Book as soon as possible. It is concerned simply with the registration and enrolment of mental nurses and nurses for the subnormal, and, of course, could be regarded solely as an administrative measure calculated to improve the status of this category of nurses. But I think that the Bill has a greater significance which calls for some comment, for it is being debate at a time when attention is directed to the over-crowded and under-staffed conditions of the institutions which accommodate the mentally sick of all categories. Simultaneously, the nurses, whose patience is at last exhausted, are protesting against their gross exploitation.
I was pleased when the noble Baroness, Lady Brooke, said that she intended to break away from the Bill in its entirety because she felt incensed. I was glad to see in her these signs of revolution. She has been a nurse. I have watched nurses at close quarters and I feel as deeply as she does that the country takes the services of these wonderful women too lightly. Therefore it is relevant to ask how far this Bill will improve the terms of service and encourage the recruitment of young women for work which is physically and mentally arduous, often uncongenial and calling for qualities of unlimited patience, of kindness and compassion when you are weary and exhausted, beside the accepted qualifications of a nurse. I want to know—and I told my noble friend that I was going to digress—what else the Government intend to do to make this register of real significance, what incentive other than that of representation will be provided in order to attract girls to take up this work.
The Bill has come at a time when it is a question of a protest not merely by a few nurses but also by the Nursing Times, which is a very important organ in their life, and by the nursing authorities, who have felt that a protest should be made on nurses' behalf. The Nursing Times this week warns the country that unless of the wages of the nurses are improved there will soon be very few left. As I have reminded the House, we have at the moment to rely for the stalling of our hospitals in both
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the medical and the nursing professions on men and women who come from countries where their services are desperately needed. The Nursing Times says:
"Adolescent devotion to an ideal of service is being grossly exploited by the nation. It is time that this was realised by everybody."
That seems to be no over-statement of the facts.
Let us take the case of a first year resident nurse—I do not say "student nurse". The word "student", of course, is a euphemism. A student in the world of nursing works as hard as any fully qualified nurse; she works day and night. A student in medicine or a student in any other profession more or less dictates his own pace of life, but a student nurse has no concessions whatever. She must work very hard. Therefore I say that the Nursing Times comment is riot an over-statement. A first year resident nurse under 25 gets £5 15s. 0d. a week, after deductions. A non-resident third year nurse under 25 gets £7 17s. 8d. A recent rise, described by the editor of the Nursing Times as "peanuts", was deducted because most nurses are now expected to pay for their own meals in hospitals. If a nurse has four meals a day in hospital—and I would remind your Lordships that nurses of 18, 19 and 20 years old are still growing—it will cost her £2 6s. 1d. a week. Hot drinks are extra. I hope that my noble friend will tell me that if a girl works all night she can take as many hot drinks as she wishes from the ward kitchen without feeling that she is cheating. I regard this new "pay as you eat" scheme as a. temptation to these girls to economise at the expense of their food. I was shocked to read in a newspaper this week that a nurse of 19 was charged with stealing bread from a supermarket. A girl of 19 does not steal bread unless she is hungry. She might steal stockings that she cannot afford and longs to have; but to steal a loaf of bread indicates hunger.
The Nursing Times said:
"This latest gambit endangers the whole future of nursing recruitment."
It warns that there are now fewer 18-year olds to recruit into nursing, and it goes on:
"These young men and women, mostly in their late teens, who are left in charge of

311
wards and are put on night duty or Sunday duty to meet exigencies of service are surely the most mobile labour force in the whole country. For them to suggest the withdrawal of their service while they are still nursing students is at the moment unthinkable. How long will it remain so? Only the future will show."
It goes on to say:
"This shameful exploitation of them must stop, because if it does not, then there will be no one to staff the hospitals of the future."
My Lords, student nurses are demanding only an extra £1 a week, and the Royal College of Nursing has said that it will press for the rise because there is the gravest concern at the inequitable treatment of student nurses. For years there have been individual nurses or small groups of nurses who have had the moral courage to make a protest—and protests of that kind are not encouraged in the nursing profession. But there has been a persistent failure to recognise the overwhelming justice of their case, and now the unrest has culminated in a collective demand to recognise their grievances.
I believe that the neglect of these kind, unselfish young women, who have a vocation which the nation is quite prepared to exploit, cannot be unrelated to the Government's industrial relations problems. The workers in all fields—the noble Lady opposite touched on this—have come to learn that only strike action, or the threat of it, will compel those in authority to recognise the justice of their claims, and this could be well illustrated by the treatment of the nurses who have allowed themselves to be exploited rather than even contemplate or threaten strike action. I believe that the Government have failed to demonstrate to the workers of the country that hard work and unswerving loyalty in itself will ensure a just reward. Every woman worker, whether in a hospital, shop or factory, provides an example of this willingness by the Government to exploit her underpaid labour. I believe that the Government are running into trouble because the workers have learned that only the strike threat works and that those who never use it are exploited. The case we are talking about to-day is glaringly apparent.
When a noble Lord, or anyone else, goes into hospital as a patient, he lies in bed and is served uncomplainingly, day and night, by physically attractive, ener
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getic and intelligent young women who are prepared to do jobs that a man's wife or near relations would be reluctant to do. When patients come out of hospital they say how wonderful these young women are. But how long does that feeling last? All is forgotten in a few days or a week or two and everything is taken for granted. Every woman worker may be in the same position because she is modest and unassuming and accepts exploitation, and I feel that we must recognise that the attitude of the nurse to her work is reflected throughout the country.
I would say, finally, that the answer to the problems of the Labour Government is not that the Government should run away from them. The Labour Party would be the laughing stock of the world if, with a huge majority, they resigned because they could not handle their labour problems. I believe that the Government should think again, and not only in respect of those who get the headlines, the strongly entrenched trade unions with highly-paid and well-organised members who strike whenever they feel like it. There are also these hundreds of thousands of first-class workers whose conditions are ignored. I believe that the Government should do, and should appear to do, justice to the underpaid, exploited workers, among whom are the toiling nurses. If the Government beat a retreat without having fired a shot to relieve the exploited women workers of the country, they will be responsible for the greatest political landslide in our history.
3.26 p.m.
LORD AUCKLAND: My Lords, the curious thing about this Bill which, with other noble Lords, I warmly welcome is its Title. The limits of the Bill are extremely narrow in relation to the Title which, to the uninitiated, might indicate that the Bill is designed to cover the whole confines of nursing, which the noble Baroness, Lady Summerskill, and my noble friend Lady Brooke touched on in connection with the very important current problem regarding the pay of nurses and the extra charges for meals. This is something which, as has been said, has angered the nation as a whole; and it is not surprising.
I should like to say a few words about the Bill with particular reference to mental nursing. I live in an area where

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there are seven mental hospitals very near to one another. I think that the provisions in Clause 2 will be particularly welcomed by them, if only for the reason that in the past the case of those who nurse in our mental hospitals has been put very inadequately. We have heard of the conditions in Ely Hospital, in Cardiff, and at Ockenden Hospital, in Essex. In the Evening Standard recently there was a picture profile about the fear of the people in the Epsom area because of the exploits of some of the patients in the hospitals there. I know of this fear, my Lords, and it is quite understandable because there are several thousands of patients in these hospitals. Some of the hospitals are overcrowded and some are understaffed. I should like to pay a warm tribute to the staffs of these hospitals. I serve on the house committee of one of them and I meet members of the staff quite regularly. This Bill will, I think, help to put the case of those engaged in this very distressing job of nursing the mentally ill and particularly the mentally subnormal.
Clause 2 of the Bill seems to me to contain an anomaly. In subsection (2)(b) it states that of the elected members of the Council:
"three shall be registered mental nurses elected by persons who, on the prescribed date, are registered mental nurses."
But in Clause 3, which deals with Scotland, there is the provision that at least one shall be a male nurse. I should like to know from the Government why such a provision does not apply to England, because there is a need for more male nurses, particularly in our mental hospitals. Much has been done to give male nurses more representation but, as I see it, there could be some strengthening of it in the Bill.
I hope that as a result of this Bill the enormously good work that is being done in our psychiatric hospitals and the great changes that have been made towards treating the mentally ill will be highlighted, as well as the unfortunate cases of which we have read in places such as Ely, because there is a great need, particularly when we are considering the recruitment of nurses, for the other side of the story to be told.
LORD STRATHCLYDE: My Lords, I am sure that, whether irregular or not, the whole House has welcomed the con
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tributions which have been made by my noble friend Lady Brooke of Ystradfellte and by the noble Baroness, Lady Summerskill, in regard to the financial conditions under which our nurses labour today. Having had some experience of this subject, I should like to support them in all they have said and to express the hope —a hope which I am sure will be justified —that the noble Baroness, Lady Serota, will convey to her right honourable friend the Minister the feelings of the House and of these noble Ladies.
3.32 p.m.
LORD SEGAL: My Lords, I wonder whether it is purely a matter of coincidence that this Bill was issued on the same day as the report on the Ely Hospital in South Wales. Could it conceivably be possible that some of the changes suggested in this Bill, all of which I hope are warmly welcomed on every side of the House, could be consequent upon the revelations made in that report? May I, however, ask my noble friend why nurses trained in the special nursing of fevers in infectious diseases hospitals are no longer to be counted as a separate part of the register? Is it intended in future to include Clause 1(1) as a sort of generic clause, leaving it open to the Minister to add to the register "such other parts as may be prescribed"? If so, what other parts are also to be included in this clause?
Here I would earnestly urge my noble friend to consider whether a special part ought not to be included, either now or in the near future, not only of all nurses trained in the care of persons suffering from severe subnormality but also of nurses specifically trained in the care of severely subnormal children. I know that this matter is bound up with the shortage of training courses for teachers of subnormal children. At present the number of such courses is woefully inadequate. They do exist, I believe, in Queen Mary's Hospital, Carshalton, which is presided over by my noble friend Lord Grenfell, but in very few other areas.
Only recently, however, an exception has been made in the case of Leavesden Hospital, which I believe is the only hospital designated by the General Nursing Council as a training centre for a new type of student nurse. This is in conformity with the Government's

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decision that teachers of mentally handicapped children should be not only qualified nurses, wherever possible, but also specially trained in teaching through the recognised courses of teaching required for dealing with this problem of mentally handicapped children. This course, now uniquely begun in this hospital, will involve two years' work in the hospital and two years of study at the Polytechnic for a diploma of the Central Training Council for Teachers of Mentally Handicapped Children. This requires a course of training of a minimum of four years and surely, after four years' training to obtain this diploma, nurses should be entitled to special inclusion in the new register under their own separate designation.
My plea for a special list of nurses trained in the nursing of severely subnormal children merely recognises that the distinction in the register to-day accepts special qualifications for the training of nurses of sick children. With severely subnormal children, however, extremes of patience, understanding and sympathy are called for. The duties of these nurses are far heavier and far more exacting, because these children cannot respond and co-operate in the way that severely subnormal adults are often able to do. Consequently, the period of training of these nurses has to be much longer and much more specialised, and such nurses ought to receive special recognition.
While on the subject, may I ask my noble friend when the last complete register of nurses and roll of nurses was issued? I believe that I am right in saying that the last register was published as far back as 1947, not less than 22 year ago. Even allowing for "13 years of Tory misrule ", surely in the time that has elapsed since then some effort should have been made to issue a nurses register in its complete form. The provision of publishing four monthly supplements is inadequate. It is a messy, time-wasting procedure. While I know that we cannot have an annual register in the same way as we have an annual medical register (I believe that when the last nurses' register appeared in 1947 it was out of date on the day it was published), I would ask: does the issue of a more up-to-date nurses' register have to be
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ruled out on the ground of cost? If so, what would be the cost of printing a complete register and roll of nurses, not annually, but, say, once in every three, four or five years?
The other point in the Bill to which I should like briefly to refer is the appointment of members of the Council on the nomination of the Secretary of State. I would especially plead for greater representation for what one might call, rather inadequately perhaps, the consumer end of the mental hospitals. There is no lack of representation by professional bodies—doctors, nurses and teachers—but where are the voices of those who represent the parents and relatives of severely subnormal children and adults? It is very much to be hoped that their interests may be directly served in the newly constituted General Nursing Council. This would lead to greater consideration and far greater understanding of their needs in the many difficult cases that are bound to arise.
Finally, my Lords, while we must all recognise that this Bill is, unfortunately, very limited in scope, dealing only with Registration and Rolls and a new composition of the General Nursing Council, may one venture to express the hope that in the not too distant future the Government will introduce a much wider and more comprehensive Nurses Bill? I am thinking particularly of a new Bill dealing with the wider recruitment of nurses; an increase in the numbers of nurses; greatly improved conditions of service, of accommodation, of leisure and of pay; more courses especially for the training of nurses in the care and teaching of mentally handicapped children, and greater provision of facilities for the education and training of the children themselves. Vast new horizons have been opened up in these directions during the last few years. Many more of these children can now be trained in sheltered occupations in industry and agriculture to become self-supporting, to become fully self-respecting citizens, and to take their rightful place in the community.
I know only too painfully that such a Bill is tied up with the question of cost, and how little we can afford in these present days of economic stringency. But such a Bill, when it does come, can be assured of a far warmer welcome than

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that which we must now afford to the rather limited, rather tepid, rather sad little Bill we are discussing in this House to-day, which utterly fails to deal with all those urgent problems now confronting the nursing profession and clamouring aloud for Government action.

VIOLENCE IN NORTHERN IRELAND
3.42 p.m.
LORDS
STONHAM: My Lords, with your Lordships' permission, I should like to repeat a Statement which my right honourable friend the Home Secretary has made in another place about Northern Ireland. The Statement is as follows:
" In the early hours of yesterday morning two serious attacks were made on important public utility installations in Northern Ireland. An electricity pylon was damaged by explosion, and trunk water mains were blown up seriously reducing the supply of water to many thousands of homes. Last evening the Northern Ireland Government requested the assistance of military units stationed in Northern Ireland for the specific purpose of supporting the local police in safeguarding certain key installations essential to the community. Her Majesty's Government immediately authorised the General Officer Commanding Northern Ireland to give such assistance, and troops are today being posted to safeguard certain installations in remote areas, mainly electricity and water supply installations.
"I am sure the House will join with me in condemning these outrages against the life of the community.
" As the House is aware, it has been intended to resume our discussions with the Prime Minister of Northern Ireland following the recent General Election there. Captain O'Neill today agreed to this, and I expect a meeting to take place at a very early date.
" I shall of course continue to keep the House informed on progress in these matters."
LORD BROOKE OF CUMNOR: My Lords, we are all grateful to the noble
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Lord for repeating the Statement on the disgraceful acts that have been perpetrated in Northern Ireland over the weekend. I have no doubt that your Lordships will all join in denouncing as inexcusable and unforgivable plots to blow up public utilities that exist to provide members of the public with the necessities of life. May I express satisfaction that the United Kingdom Government have at once met the request of the Northern Ireland Government for military protection for such installations? I do not quite understand the phrase in the Statement about Captain O'Neill "finalising an appointment". Is it not desirable that contact between him and United Kingdom Ministers should continue regularly? Is it not desirable also that Captain O'Neill should be given every opportunity to prove that policies of reason and firmness can in time defeat bigotry and violence on both wings?
LORD BYERS: My Lords, noble Lords on these Benches would join in condemning these outbreaks of violence and, indeed, these outrages which have taken place, and we should support any measures, such as have been outlined, to guard the key installations. But I take it that the Government will agree that it would be quite wrong if troops were used in any way against demonstrators in Ulster, and I take it that it will be their policy to avoid this. Also. I should like to ask whether Her Majesty's Government will take the opportunity of Captain O'Neill's visit to this country (and perhaps we can be told roughly when this will be) to press on him once again the need to remedy the legitimate grievances of the civil rights supporters.
LORD STONHAM: My Lords, I am grateful to the noble Lord, Lord Brooke of Cumnor, and the noble Lord, Lord Byers, for their support in the prompt action that Her Majesty's Government have taken in this matter. With regard to the point raised by the noble Lord, Lord Brooke of Cumnor, about "finalising an appointment", if he looks in Hansard to-morrow at the Statement that I made he will see that I did not use that phrase. I agree with him that it would have been an unwise phrase to use. As he is well aware from his experience as

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Home Secretary, these consultations are continuous. But it is the case that at the meeting which Captain O'Neill had with the Prime Minister and the Home Secretary on November 4 he then and there agreed to recommend five major reforms (if I may use that expression), all of which have since been implemented. However, one major reform about which Captain O'Neill has so far made no announcement is the question of what is called" one man, one vote", in local authority elections. Doubtless that is one of the matters which will be discussed when the Prime Ministers meet again. I think that answers the point raised by the noble, Lord, Lord Byers, about matters which are of concern to many people, including the civil rights demonstrators.
On the point raised by the noble Lord, Lord Byers, about the use of troops, they are only to be used, as it were, passively, to guard certain installations, which in the main will be water and electricity installations. At this stage, there is no question whatever of troops being used in any other capacity.
THE EARL OF LONGFORD: My Lords, while paying tribute to the great courage of Captain O'Neill, and deploring, I need hardly say, any violence or brutality from any quarter, may I take it that Her Majesty's Government will agree that there can be no real peace in Northern Ireland until longstanding disabilities are removed, and until civic rights are secured as firmly there as they are in this country?
LORD STONHAM: My Lords, I would entirely agree with my noble friend, bearing in mind that Northern Ireland is as much a part of the United Kingdom as any other part, that only the removal of any disabilities of that kind suffered by residents in Northern Ireland can form the basis for the removal of other difficulties. But I would add that it is for everyone to do their utmost in their individual capacities, whatever their religion and whatever their thought, to come together in tolerance, and work together for the formation of peaceful conditions in Northern Ireland.
LORD BROCKWAY: My Lords, is my noble friend aware that all of us, strongly as we feel in these matters, deplore this violence, and take the view that it is a
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disservice to the cause of liberty in Ireland? But does not this trouble arise from the denial of civil liberties, and as a result of religious discrimination in Northern Ireland? Will Her Majesty's Government take great care not to allow the use of troops to be regarded as support for one side in this conflict in Northern Ireland?
LORD STONHAM: My Lords, there can be no question of the use of troops on this occasion as supporting anything but law and order. It is quite unthinkable that Her Majesty's Government should have refused a request of this kind which is aimed at assisting to continue law and order.
With regard to the other part of my noble friend's question, I would say that present difficulties had their origins hundreds of years ago. It is about time that everywhere, including your Lordships' House, we should refrain from saying or doing anything which would exacerbate the position, but we should help all those of any shade of opinion who at least are willing to come together to heal the wounds and sores which are centuries old, and help these very worthy people to live in amity together.
LORD OGMORE: My Lords, while in every way endorsing the hope the noble Lord has just expressed, may I ask him whether he heard an announcement or statement on the" World at One" programme on the B.B.C. to-day by a leading member of the I.R.A., that in certain circumstances now in Northern Ireland the I.R.A. would come into this conflict in a big way for what they consider to be the protection of the interests of their fellow countrymen? Secondly, in view of the use of troops for the purposes the noble Lord has indicated, with which I entirely agree, may I ask him whether he does not regard this as one more indication of the folly of the Government in destroying so many wonderful infantry regiments which are needed constantly by the Government?
LORD RATHCAVAN: My Lords, is the noble Lord aware that before 1921, when Ulster was governed directly from Whitehall, there were occasions during disturbances in Belfast when troops were used to patrol the streets in the city and to keep order?

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LORD STONHAM: Yes, my Lords, I am aware of what the noble Lord has said, though not as well aware as he, because he was there. With regard to the point about the use of troops, I may say that the number of troops now in Northern Ireland is quite adequate for the tasks at present imposed on them. There is no question of sending additional troops. I would also tell the noble Lord that the numbers in the Territorial Army in Northern Ireland are not far short of the numbers of Regular troops, and as a result of the policies of this Government they are far better equipped than they would have been.
LORD OGMORE: My Lords, may I ask the noble Lord whether he is aware that this Government have destroyed the Territorial Army in this country, except (he Reserve? Furthermore, if there are Territorials in Northern Ireland, is it now the policy of Her Majesty's Government to use them in support of the civil power?
LORD STONHAM: My Lords, they will of course be used in accordance with the policy of Her Majesty's Government if they should be required; but I am sure it is the fervent hope of all your Lordships that their use in that capacity will not be needed.
LORD STRANGE: My Lords, would the noble Lord agree that while it is probably necessary to guard with troops water supplies and other important utilities in Ireland, they might be attacked by people who try to blow up those water supplies, as they have already done? In that event, the troops would have to resist them, in which case some damage might be done to the attackers and that might be a match in a powder magazine.
LORD STONHAM: My Lords, if in the circumstances described by the noble Lord the troops are attacked, they will of course defend themselves, and if anyone is hurt in that process it will be most unfortunate.

NURSES BILL [H.L.]
3.54 p.m.
Second Reading debate resumed.
LORD AMPTHILL: My Lords, I rise to give my warm support to the Motion before the House that this small but very useful Bill should be accorded a Second Reading. In doing so, I should, as a prelude, like to declare a threefold interest. In common, I suspect, with many of your Lordships, I owe much to the devoted care and attention that I and mine have received from the members of the highly honourable profession of nurses. Indeed, were it not for this, I could not be standing here to-day, and I certainly could not use my voice, even in the rotten way it sounds just now.
Secondly, I have close relatives and friends who are senior and distinguished ornaments of this profession, who have served it well both in peace and in war, and one at least is a member of the General Nursing Council. Further—although this point may be a little off the main issue it is relevant to my interest in this Bill—it was on July 6, 1908, nearly 61 years ago, that my noble father moved the Second Reading of a Nurses Registration Bill, which passed through all its stages in this House, including two Committee stages. I will not waste your Lordships' time by trying to explain how this House's flexible procedure managed to achieve that. Finally, the Bill, having passed all its stages in this House, was sent to the other place on November 10, 1908, but your Lordships will not be surprised to hear that it was lost there owing to lack of Parliamentary time.
After World War I the subject of nurses' registration came before this House again. In May, 1919, the then Lord Goschen moved the Second Reading of a Nurses' Registration Bill, which my father and his friends did not care for. So my father put to the House a Motion,
"That this Bill be read a second time this day six months",
and I am glad to say that their Lordships of that day accepted that Motion. Then, in December, 1919, the then Lord Sandhurst moved the Second Reading of the Nurses Registration (No. 2) Bill. This was an agreed measure which had Government support, including that of the

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Minister of Health. My father, in speaking briefly immediately after the mover, gave that Bill his full support, and it eventually passed through all its stages in this House; it was sent to another place and subsequently became law.
It is tempting to take some of your Lordships' time—but I am not going to do so—in describing the stiff opposition which my father and his friends met, particularly in 1908, but I think this can be summarised by the views of Miss Florence Nightingale, expressed somewhat earlier in 1880, that she thought that registration would mean" stereotyped mediocrity". I do not think that our present position quite justifies that fear. I, in common with other noble Lords, am grateful to the noble Baroness, Lady Serota, for her explanation of the Bill now before us, from which it is plain that it is hardly controversial in the sense of the 1908 measure. I am very glad of that, because this measure will be of great assistance to this hard-working profession.
My noble friend Lady Brooke of Ystradfellte has mentioned certain matters in the Bill, and I hope that the Minister in reply will give us some hope that these points will be attended to by means of Amendments when we come to the Committee stage. Finally, my noble friend Lady Brooke, and also the noble Baroness, Lady Summerskill, mentioned a matter about which, in common with them and others in this House, I feel very deeply. That is the unsatisfactory state of nurses' remuneration, pay and general conditions. I know from my own personal contact that, quite apart from the humane aspects of these deficiencies (if that is the right expression), this is having a serious effect on recruiting. I am not surprised. I know in my own small circle of two or three girls who have had a feeling of vocation for the nursing profession, but they simply have not been able to go into it in the present conditions because their parents do not like the idea. One at least has tried it but found the going too hard, because these young girls do have to work desperately hard, and I do not think the present conditions of pay and in particular their having to pay for their food, is fair to them. Subject to those remarks, I welcome the Bill and will support the Second Reading.
4.1 p.m.
LORD GRENFELL: My Lords, as chairman of the group of hospitals, I feel that I should say just a few words in welcoming this Bill. I personally look forward to the day when those who nurse the subnormal and also the paediatric nurses will all be on one roll. They will train together and one then will be able to move them or, at their wish, they could move without any further training from one side to the other. In the wonders of medicine to-day the paediatric side is probably diminishing to quite a degree, but as yet we have not found an answer, although we are moving towards it, to the subnormal. Hence we shall need more subnormal nursing.
I should not like it to be thought that as one who works among nurses so much, I do not believe that they are the most wonderful, the most cheerful, the most patient and, if I may say so, the most goodlooking people in this country. They are always beautifully dressed and always charming. With regard to meals, I should not like to give a verdict on that question at this time. We are watching this matter very carefully and I am sure of one thing; namely, that the scheme needs careful administration. If that administration is there, my impression—and it is only an impression because I am having a further look into this—is that in the group of which I have the honour to be the chairman, the nurses find that they appreciate it. But that has to be seen over a longer period, so I will go no further than that.
Lastly, I should like to say that I, among many others, hope sincerely that in a short time a new Bill will come forward, dealing with all the situations which we know are lacking so much in the lives of our nurses, and especially that which we have always wanted and which is becoming more important as the cost of living goes up; namely, more money for these young girls. That is all I wish to say, but I felt that I should just say those few words in welcoming this small Bill, and in the hope that a much larger one will soon be on the way.
4.4 p.m.
BARONESS SEROTA: My Lords, I have listened carefully to this debate on the Second Reading of the Nurses Bill, and although I think that all noble Lords

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have welcomed it, nevertheless at times during the debate they appear to have expressed a sense of disappointment. The noble Baroness, Lady Brooke of Ystradfellte, called it an "innocuous Bill"; the noble Lord, Lord Segal, went further and described it as" limited, tepid and sad". Therefore I was grateful when the noble Lord, Lord Ampthill, reminded us of the early battles that were fought by the pioneers who wished to establish a trained, registered and qualified nursing profession, and of how much we owe to the early work they did in this field.
As I listened to the debate I came to believe that the expressions of disappointment were, apart from one or two points of clarification and detail, directed not at the Bill but at the fact that recent events had served to highlight our awareness of the difficulties under which nurses labour to-day. I would only say at this stage that although I have been a Member of your Lordships' House for some two and a half years now—and I recognise that it is a limited period—I cannot recall a general debate on this subject before. Perhaps it is because we have not directed our attention to these matters that some of the remarks have been made today with such feeling.
I should like to deal first with the particular points that have been made on the Bill. The noble Baroness, Lady Brooke, made three points. On the question of the date of the Bill's coming into law, this is a matter where, if it assists the General Nursing Council, I am sure that my right honourable friend and I will be only too willing to help. The noble Baroness also made two points about consultation between the appropriate bodies and persons, one in relation to Clause 2 and another in relation to a later clause of the Bill; and here again I can assure her that we will look at the particular points she made. The noble Lord, Lord Amulree, joined her in one or two of these remarks.
The noble Lord, Lord Auckland, asked about the omission of the male nurse from the England and Wales part of the Bill. I can only say that I am advised that this was at the request of the General Nursing Council for England and Wales, and that Scotland did not wish to change.
On the point relating to the fever nurses' register, which was raised by my noble friend Lord Segal, here again it
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is felt that in view of the drop in the incidence of fevers in our population there is no longer need to maintain a fever register, and this has been closed. My noble friend raised the important question of the training of nurses who care for the subnormal, particularly the nursing of subnormal children in our mental and subnormality hospitals. He told us of the interesting experimental course that is being run at the Leavesden Hospital, where a combined nurse/teaching course is being evolved. This is something which we are watching with great interest and which may lead us to have further thoughts on the need to develop the training both of nurses and of teachers in their care of mentally subnormal children.
My noble friend Lord Segal also asked about consumer interest. He asked, I believe, whether in fact consumer interest —for example, parent's of subnormal children—should not be members of the General Nursing Council. I was hoping to have a talk with him in the near future about the question of the involvement of parents (who, after all, are representing their children as consumers of these services) in the day-to-day management of our hospitals. If he is agreeable I think we should get down to discussing this in the near future.
I will not weary the House by going in detail through all the other particular points that have been made. I can write to noble Lords, and I hope that we shall have a proper opportunity to explore them during the Committee stage of the Bill, which is due shortly. I would now turn for a few moments to what many noble Lords have stressed to-day; namely, the conditions under which nurses are working in our hospitals, and also in local authority services, and also the recent introduction of pay-as-you-eat for meals. I was grateful to the noble Lord, Lord Grenfell, for his (if' I may say so) practical approach to this question. It is a new scheme, and my right honourable friend the Secretary of State and I will watch it carefully. I am not surprised—in fact I am glad—that noble Lords have raised this matter to-day: it gives me an opportunity to say one or two words in explanation of the present position.
The introduction of the scheme was, as many noble Lords will remember, part of the recommendations of the National

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Board for Prices and Incomes in their Report on Nurses' Pay, 1968. I think that many of us here would agree that in general this is a change that should be welcomed, as it is in line with our general view that a student nurse is an adult person who should be allowed to decide how she spends her own money. I was surprised not to hear from the noble Baroness, Lady Summerskill, today about conditions in which nurses have to live and about some of the petty restrictions that were sometimes imposed on them in the past. But more and more nurses, as they are more adult and mature, are wanting to live their own independent lives, and this pay-as-you-eat scheme was conceived as part of the policy of giving them financial independence. Moreover, all the staff interests concerned were in favour of it. It was therefore introduced as part of the general pay agreement recommended by the Board and I have no doubt that they must have taken into account the financial effects of their recommendations.
Previously, there was a combined charge for board and lodging of £156 a year. The National Board for Prices and Incomes estimated that the cost of meals to the nurse as taken would be about £100, and the Whitley Council agreed to deduct £106 from the combined allowance. They took account of the fact that this sum reflects roughly the cost of the meals agreed by the Whitley Council for ancillary staffs. Under that agreement four meals a day are available at £2 6s. 1d. a week. I would remind your Lordships that at the same time the Board's recommendations for nurses provided for a pay increase of 9 per cent. all round (without a strike, I say to Lady Summerskill) with a higher increase for certain grades, including second and third-year students, and for a reduced lodging charge for first-year students of £25. The Secretary of State and I are very much concerned about the needs of students in training, and particularly the first-year students, and here a special arrangement was made in respect of their allowances.
I do not have to remind noble Lords that the Whitley Council, the staff side of which consists of representatives of the various nursing organisations and unions, concluded an agreement based on
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these recommendations. I do not think any of us would have thought in advance that there was anything inherently unreasonable or oppressive about the agreement. On the contrary, it was intended to improve the lot of the student nurses. According to the information we have received, the scheme appears to beworking quite reasonably in some places, but in others it seems that student nurses are finding that the sort of meals they were getting for the previous fixed charge were worth appreciably more than £106, so that they have either to make do with meals of a lower standard or spend more than would have been thought necessary.
Now, as I understand it, as a result of articles in the Nursing' Times and Press generally, the Royal College of Nursing have indicated their intention to ask for a pay increase of £1 a week for student nurses. My right honourable friend the Secretary of State and I, as I have already indicated, sympathise very much with the needs of student nurses, and we are anxious to see that any defects in the working out of the agreement should be identified and, if possible, removed; and this we will seek to do. But I am sure your Lordships will not expect me to comment on the claim at this stage in advance of its consideration by the Council, who will be meeting very shortly. I am sure they will deal with it as rapidly as they can.
On the particular point raised by my noble friend Lady Summerskill about the cups of tea and coffee, I have made inquiries about this, and I understand that the estimated cost of the meals to the nurses did not cover this item. As all of us who are familiar with hospitals know, cups of tea and coffee arc always on the go in hospitals—and very necessary that is, too. I do not think any of us would want to see a position where a nurse would feel she was acting inappropriately if she made herself a cup of tea from the kettle which, as my noble friend Lady Summerskill said, is always on the boil in the ward kitchen. We will bring this matter before the Whitley Council, and I have no doubt that they will consider the point, especially when they are looking at the staff side claim.
My Lords, I hope that the explanation I have given calms some of the concerns that have been expressed in this debate. I do not think any of us would attempt to deny that the nurses in our hospitals, be

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they student nurses or fully trained nurses, do a splendid job of work. We are all potential patients, and whether we have been patients or not we know very well what burden the nurses carry and what skills they need to develop in this field to assist patients to recovery.
I come back to the Bill itself. I realise that in the present state of public debate it seems, as the noble Baroness, Lady Brooke, said, an innocuous Bill. I am afraid that I cannot accept that analysis of it. This is an administrative measure, I admit, but it is one which I myself, and I think the General Nursing Council, too, regard as absolutely basic to the need to streamline the present arrangements for nurse training. I hope that at the Committee stage of the Bill, we shall have a full discussion of the various points of administrative change, and I hope your Lordships will give it a Second Reading to-day.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

NUCLEAR INSTALLATIONS BILL
4.18 p.m.
LORD STONHAM: My Lords, I beg to move that the Nuclear installations Bill be read a second time. The purpose of this Bill is to make three minor alterations to the Nuclear Installations Act 1965. That Act deals, among other things, with the question of liability for third party damage in the highly unlikely event of a nuclear accident. The liability rules which it lays down are based on International Conventions, and the purpose of this Bill is to bring the Act completely into line with the provisions of those Conventions. The Bill, though a short one, is not in my view readily comprehensible—to put it at its most favourable—because it makes highly technical amendments to an Act which is in itself complex, as I well remember when dealing with it nearly four years ago. To make the Bill comprehensible, I must outline the system of third party liability which is involved, and this necessitates a rather more detailed exposition than is customary in a Second Reading.
Three International Conventions lie behind this legislation. One of them, the
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Vienna Convention, was negotiated within the International Atomic Energy Agency and was signed at Vienna in May 1963. The two others were negotiated within the Organisation for European Co-operation and Development. One, known as the Paris Convention, was signed at Paris in July, 1960 The other was signed at Brussels in January, 1964, and is known—as you might suppose—as the Brussels (Supplementary) Convention. These two Conventions were amended in 1964 to make them compatible with the 'Vienna Convention. Together, the three, Conventions provide a uniform international code for dealing with third party damage which might arise from the peaceful use of atomic energy. This was an important achievement. Unlikely though nuclear accidents are, concern about the meeting of claims could well have hindered both the export of nuclear technology and the international movement of nuclear material. The United Kingdom, which is concerned with both these matters, took a leading part in the negotiation of the Conventions. We have signed and ratified the Paris and Brussels Conventions, though not as yet the Vienna one. The Paris Convention is in force between, so far, the United Kingdom, Belgium, France, Spain, Sweden and Turkey. The other two Conventions are not yet in force.
Our law must clearly, therefore, he consistent with the Conventions, and the Nuclear Installations Act 1965 was designed to set up the Convention system of liability. The principles of this system are fairly straightforward. Liability for nuclear injury and damage caused by a nuclear installation is to fall on the operator of the installation in which the accident occurred (or on whose behalf the nuclear material concerned was in course of shipment). Subject to minor exceptions, liability is to fall on no one else. The liability of the operator is absolute and is not to depend on proof of negligence; he is not, however, to be liable for certain types of damage specified in the Convention. His liability to meet claims is limited to an amount set by his State, but which must not be less than the equivalent of 5 million dollars per accident. He must insure, or make other financial provision, in order that funds up to this limit are always available to meet claims. These funds

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must be used exclusively for meeting Convention claims. The Brussels Convention made supplementary provision for meeting claims arising from large accidents. Under these provisions, if claims exceed the insured provision the excess is met from public funds (partly by international contributions) up to the equivalent of 120 million dollars.
I now turn to the Bill itself. The first amendment which this Bill makes to the principal Act arises from the 1967 devaluation of the pound sterling. The Conventions, in specifying various compensation figures, use dollars or international money units, but in the Act the 1965 sterling equivalents of these sums were used. Devaluation has taken some of these sterling sums below the Convention requirements, and equivalence must be restored. Let me explain what is involved. The main limit set by the principal Act is that for the operator's liability, and this is £5 million sterling. This sum does not need to be changed, for despite devaluation it is still well above the equivalent of the Convention minimum of 5 million dollars. The Act also provides, however, the basis for operating the Brussels system for meeting claims which outrun the operator's liability. For this purpose it provides that claims above £5 million and up to £43 million shall be met from public funds. This figure of £43 million was the equivalent of 120 million dollars, but following devaluation it now needs to be increased to £50 million.
The Act also sets a limit for the liability of operators from other Convention countries. This is relevant, for example, in the case where nuclear matter is being transported inside the United Kingdom on behalf of such an operator. In accordance with the Conventions, this was set at the greater of the limit ruling in that other country, or £1¾ million. This £1¾ million was at the time the equivalent of the Convention figure of 5 million dollars, but it now needs to be corrected to £2,100,000. Again, in accordance with the Conventions, the Act contains a provision which requires a minimum sum to be set aside from the available compensation funds to meet the general run of claims if an accident involving nuclear matter in transit causes damage to the ship or other means of transport used to
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convey the material. This provision is meant to prevent the compensation funds from being swamped by large claims for damage to the means of transport. This minimum was set at £1¾ million. This again was the equivalent of the Convention figure of 5 million dollars, and it, too, needs to be corrected to £2,100,000.
In addition to the effects of devaluation, we have found that in two respects the liability imposed by the Act does not quite match the Conventions. As I have mentioned, the Conventions intend that liability for injury and damage to property caused by a nuclear incident shall arise only within the terms of the Conventions and shall fall exclusively on the responsible operator. It appears, however, that the 1965 Act would permit a liability to be imposed in certain circumstances on a person other than that operator. For example, the operator might be able to make the supplier of a faulty component liable for damage to the reactor itself if negligence on the part of that supplier could be proved. Again property on the site of a nuclear installation, which is used in connection with the operation or the construction of the installation, is excluded by the Conventions from the liability of the operator. In its present form, however, the principal Act would allow the owner of such property to claim against the operator, or the supplier of a component, if negligence could be established. The amendments which the Government propose to make by this Bill would exclude these possibilities.
Secondly, the Conventions intend that so far as possible an operator shall not be liable for damage suffered in a country which is not a party to the Convention. They recognise, however, that in some circumstances a person other than the operator may find himself obliged to pay damages in such a country. For example, the owner of a ship carrying the nuclear material concerned in an accident might find himself obliged to do this. To cover such cases, the Conventions allow such a person to make a corresponding claim against the operator concerned. The right which the 1965 Act confers in this respect is not quite wide enough in the types of accident which it covers, and the Bill would extend it to make it consistent with the Conventions.
Although I have spoken about the arrangements that exist for compensating

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damage caused by nuclear accidents, and have mentioned the formidable sum of £50 million, I would not like your Lordships to see in this any cause for alarm over safety. The chances of an accident on such a scale are exceedingly remote, as indeed are the chances of any nuclear accident of significance. It is highly unlikely that an accident would occur causing damage exceeding even the compulsory £5 million cover of the operator. During what now amounts to a very substantial total experience of the operation of nuclear power stations, no accident whatever has occurred that has had any effect outside the site of any commercial station. The only accident of consequence which has involved compensation claims was that which occurred at the Atomic Energy Authority's plant at Windscale in 1957, some 12 years ago, and which, incidentally, was of a kind which could not occur in a nuclear power station. This resulted in claims totalling less than £100,000.
I hope that in giving what I regard as necessary detail I have not over-wearied your Lordships, but I thought it was necessary in order to introduce the Bill adequately. Stripped of this detail, however, the proposition which I am putting forward is that our ratification of the Conventions relating to nuclear damage means that our domestic law must be consistent with their provisions. At present this is not quite so, and this Bill will remedy the defects. My Lords, I beg to move.
Moved, That the Bill be now read 2a. —(Lord Stonhanz.)
4.30 p.m.
THE EARL OF BESSBOROUGH: My Lords, we are most grateful to the noble Lord, Lord Stonham, for having described the purposes of this Bill so clearly. He is one of the most hard-worked Ministers in the Government. It is another small Bill but it is, as the noble Lord says, rather complicated. The heart of it seems to me to be the" correcting "—I think that was the word used in another place—of the sums which the Nuclear Installations Act requires should be set aside to meet the general run of claims for accidents involving nuclear material. As I understand from what the noble Lord has said, it involves the raising of the amount from £1¾ million to
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£2,100,000 in the case of damage caused while materials are in transit, and from £43 million to £50 million to cover claims which outrun the operator's liability under the Conventions which the noble Lord mentioned.
Although the record has been very good to date, certainly the question of nuclear safety cannot be stressed too highly. But, my Lords, let us mike no bones about it: the reason for this Bill, for having to increase these sums, is due directly to devaluation because the limits are now too low in terms of dollars to enable us to fulfil our obligations under the Convention. I do not propose to tease the noble Lord too much about that this afternoon. His honourable friend the Parliamentary Secretary to the Ministry of Power, certainly had his fill of it during the Second Reading Committee debate in another place. Indeed, my honourable friends had something of a field day and had a kind of pre-Budget economic debate. They asked the Minister one pertinent question in particular; that is, whether every time the Government devalued a new Bill would have to be brought in. It was suggested that if instead of referring to the sums in terms of sterling they were specified in dollars—that is to say, if instead of £50 million sterling the sum of 120 million dollars was used—this would avoid having to amend the Bill again in the event of further devaluation. After all, France devalued nine times before stabilising the franc. I have always wondered how France managed to do this, but France's economy has always been something of a mystery to some of us. But although Labour Governments have devalued only twice, one has the unhappy feeling that if—
LORD STONHAM: My Lords, if I may correct the noble Lord, he said that in the plural and not the singular. This Government have devalued only once.
THE EARL OF BESSBOROUGH: My Lord, Labour Governments, yes. Although they have devalued only twice, I have a slightly unhappy feeling that if they continue in office they may follow in the steps of our French friends. I only hope not. I will not puraie the noble Lord further on this point, but I think it is a valid comment to make.

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Another suggestion which has been made is that in order to amend the sums made available as a result of devaluation, perhaps we should use European Monetary Agreement units of account. One of my honourable friends, moving a new clause on this point, maintained that it might save a lot of trouble in the future if these international units had been used instead of sterling to define the financial limits of the original Act. The Minister admitted that there was a point of a general kind at issue here, and I wondered whether the noble Lord would be so good as to comment further on this.
There are one or two other questions I should like to ask the noble Lord on which I do not think very complete replies were given elsewhere, and I gave the noble Lord warning of them. One concerns the reorganisation of the nuclear power industry. As the noble Lord knows, parts of the Atomic Energy Authority are being moved away from the Authority and into the control of industrial companies. This means that there will be new types of organisation in existence, some publicly and some largely privately owned. Clearly the Bill will have to apply to them. May we have a specific assurance—I think the noble Lord came very near to giving it to me at the beginning, but not per-haps precisely, in connection with the re-organisation of the industry—that this Bill will cover not only the A.E.A. but also the more or less independent industrial companies?
Also, I wonder whether the noble Lord could say something about the damage being caused to marine life by nuclear waste. In another place, the Minister said that he had no evidence of this, but he admitted that certain nuclear tests in the Pacific Ocean had had unfortunate results. I realise that these were not caused by the peaceful uses of atomic energy, but none the less damage was done. It occurred to me that there is effluent from nuclear reactors near the coast, and I should think they must have some effect. Perhaps the noble Lord could say something about that. I was glad to read the Minister's assurances regarding recruitment to the Nuclear Inspectorate and that the Government are fully satisfied about this and about
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the competence of the Inspectors. I think we should all congratulate them on the efficient way in which they go about their work.
The Second Reading Committee in another place was followed by a further debate in Standing Committee D. In parenthesis, and for the benefit of our own Printed Paper Office—and I think probably some noble Lords—I should like to ask the Government whether they could say something about the way the Reports of Committees in another place are now published. Sometimes they seem to appear in Hansard proper, and sometimes they are published separately; and I have just heard of a case where they have not been published at all in regard to a Bill which is on the Order Paper to-morrow. I will say a word about that later on.
I believe a new procedure has been adopted in another place regarding Second Reading Committees, and I am told by our own Printed Paper Office that it has complicated their work. Indeed, when I was looking into this Bill it took some time to get all the papers together, and I might have asked that the Second Reading be postponed, for it is taking place at exceptionally short notice. I think similar difficulties may arise over other Bills. The Bill I have just mentioned—which my noble friend Lord Sandford has drawn to my attention—is the Redundant Churches and other Religious Buildings Bill. Although that is due to be debated to-morrow, the Report of the Committee stage in another place has not yet been printed. This seems to me to be the most amazing muddle, and I wonder whether that Bill can very well be taken to-morrow. It is another example of a somewhat confused conduct of Parliamentary business by the present Government.
I have just one other point to make. During the debate in Standing Committee D there was one point which the Minister did not seem to me to answer, and that was about the accelerator at the Centre for European Nuclear Research at Geneva. Can the noble Lord say whether the sum of £2,100,000 covers the possible contingent liability for a disaster at that nuclear accelerator? The Parliamentary Secretary in another place said he understood that the CERN accelerator was not covered by the Bill because

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it was not classified as a nuclear installation and yet, as my honourable friend Mr. Price said, Section 26, the Interpretation Section, of the 1965 Act says that:
"'nuclear installation' means a nuclear reactor or an installation such as is mentioned in Section 1(b)(ii) of this Act",
which refers to:
"the carrying out of any process which is preparatory or ancillary to the production or use of atomic energy and which involves or is capable of causing the emission of ionising radiations".
As my honourable friend pointed out, if a linear accelerator is not capable of causing the emission of ionising radiations—and I am glad the noble Lord, Lord Ritchie-Calder, is here to-day because he understands this—then he did not really know what it was capable of doing. Those who have had experience of these large and somewhat obscure machines know that there is a substantial radiation hazard, because they produce streams of high-energy ionised particles. While the Parliamentary Secretary said that the CERN accelerator did not come under this Bill, he admitted finally that there was an element of doubt and confessed that in his hurried consultation he did not have a clear answer to the question, but said that he would seek an opportunity to clear it up in the later stages. However, when I read through the Report of the final stages which took place on March 31 I found no further reference to the CERN accelerator. I do not know whether the noble Lord can tell us something about it.
Apart from those points, I assure the noble Lord that I accept the Minister's replies on other matters, and I agree that we must bring our rules up to date and in line with our obligations under previous Conventions. For that reason we support the measure and agree that it should be given a Second Reading, although it seems to us to be a clumsy way of dealing with the issue, particularly in regard to the financial aspects.
4.41 p.m.
LORD STONHAM: My Lords, I am grateful to the noble Earl, Lord Bess-borough, for the general welcome that he has given to the Bill and also for the questions that he has asked, of which he kindly gave me notice though in one or two instances the notice was so extremely short that I am not yet certain whether at the time I sit down I shall
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have obtained authoritative answers. I will not disagree with what the noble Earl said about the main reason for the Bill being devaluation. He said that that was the real reason for it, though there were other points. He asked whether it would be the case that every time the Government devalued a new Bill would have to be brought in. It is true that in a period of some four-and-a-half years we have devalued once, but I am not going to say anything further about that except in regard to the alternative which the noble Earl suggested.
He reminded us that in another place they had what he called a " field day " on this subject, and it was certainly not a noticeably adult debate. But while I would not cast any aspersions in this matter, I remember reading financial articles which indicated, believe is or not, that there might at some stage have been a possibility of some change in the international value of the dollar. Therefore, in such circumstances—indeed, in almost any circumstances—I always have a prejudice, I think a rightful prejudice, in favour of British symbols, financial or otherwise, rather than foreign symbols.
What did Members suggest in another place? During the debate to which the noble Earl referred they actually moved an Amendment which suggested that instead of the £50 million provided for in this Bill we should say " 120 million European Monetary Agreement units of account ". There is sometimes a little doubt to-day about what the pound is worth, but if people were to read in a Bill passed by this Parliament that we were talking about " 120 million European Monetary Agreement units of account " they would rightly be in a position to say, possibly with expletives, that we did not know what we were talking about, because they certainly would not know. So I am quite prepared to run this risk and stick to the British pound as the accepted symbol for stating our monetary problems.
The noble Earl asked me about what I might call semi-private consortia, and whether the compensation provisions applied to them. The answer is: Yes, it is applied to anyone who operates a nuclear installation, and all the activities of the new design and construction companies will be covered. He also asked me whether the CERN accelerator was

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covered. This apparatus, as I think he indicated, is not a nuclear installation within the meaning of either the Act or the underlying international conventions. I do not want to go through the definition of Section 1 of the 1965 Act to explain why, as a matter of law, this apparatus is not covered. I think your Lordships will be more interested in the practical reasons why this should be so.
Both the Act and the Conventions, with their special rules of absolute liability and their requirement for heavy insurance cover, were intended to deal only with the special hazard arising from the application of nuclear power; that is, the risk that there might be an accident involving the release of radioctivity from a reactor, from one of the supporting installations, such as fuel factories, from fuel in transit or from a fuel storage installation. Such an accident could have widespread consequences, not merely from the irradiation of persons at the site of the accident but as the result of the contamination of the site.
But the hazard from an accelerator is not comparable with this in scale; it is much less. Essentially, the apparatus is like an enormous X-ray tube. Atomic particles are speeded up by electric fields and used to bombard a target, and the resultant reactions between the accelerated particles and the atoms of the target are studied. The whole thing is essentially a research operation. The atomic reactions produce ionising radiation which can be of a very penetrating kind, and a certain amount of nuclear energy can be released. This nuclear energy appears, however, in minute quantities from the reactions of relatively few atoms, and the situation in no way compares with the use of energy on the practical scale with which the Act is concerned and which involves continuous nuclear reactions on a large scale.
This does not mean that the accelerators are not subject to control. In so far as such apparatus of this sort is situated in premises subject to the Factories Act, I understand that they are the subject of a code of regulations dealing with a number of kinds of irradiating apparatus and these are the responsibility of the Secretary of State for Employment and
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Productivity. Apparatus of this sort at research and teaching establishments can be dealt with under the provisions of the Radioactive Substances Act 1948, and a code of practice exists which has been drawn up for this purpose. In both cases, claims in respect of damages would be pursued like any other Common Law claim. I hope that that is a fuller explanation than the noble Earl has so far been given, and that it covers the point.
The noble Earl also asked me about the possible effect of an accident on marine life, and I believe that there have been some Russian allegations or suggestions about this. My information is that our methods of waste disposal—the problem arises, of course, from the disposal of waste—are accepted by the majority of countries concerned, and British scientific work published internationally has conclusively demonstrated that no trace of the effluence from Windscale is detectable outside coastal waters. Solid waste is also dumped into the Atlantic deeps in limited quantities and under supervised conditions, including joint disposal operations with several other E.N.E.A. countries, and such waste is dumped under conditions designed to ensure that any activity released will be rendered harmless by dispersal and dilution. The Russian allegations are thus quite unfounded and the proof of this may be derived from measurements reflecting residual fall-out of nuclear weapon testing. I think that is one that will not " run ".
My Lords, athough for some years I have been responsible on behalf of the Government for these subjects in your Lordships' House, I do not pretend to possess any considerable knowledge, and I know the noble Earl is much better informed than I am on them, but my own view is that over this whole field we have taken precautions—wise and incredibly careful precautions—and that they have worked. We must continue to take these major precautions, and they must continue to work. But when we have a discussion of this kind it is fair to acknowledge the success that there has been in this field.
As I had unhappily anticipated when I got up, I have not got the answer to the one important question which the noble

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Earl put to me about the publication of the Reports of Committees in another place when 13ills are being dealt with by the Second Reading Committee procedure. I am not sure if my recollection is right, but I believe that earlier Second Reading Committee procedure Bills have started in your Lordships' House, and that this may be the first time that one has come to us from the other direction. That, perhaps, is why it has not been raised with us before. I noticed that the noble Earl mentioned the Redundant Churches and other Religious Buildings Bill, which comes up for Second Reading here to-morrow, I believe, is one in question. My first reaction was that this is not a Home Office responsibility; and therefore, if there is any blame to be apportioned, I can escape censure. But the noble Earl has raised an important point which must be resolved and I will make it my business to see that it is resolved. Perhaps, since it is important not just to the noble Earl but to the whole House, means can be found to make sure that the information becomes general. I would apologise for not being able to give him an answer now, but he will appreciate that it is not a matter which affects only my Department; it is matter which affects the working of the House.
THE EARL OF BESSBOROUGH: My Lords, it affects another place, above all.
LORD STONHAM: Yes. Did the noble Earl wish to say something more?
THE EARL OF BESSBOROUGH: Before the noble Lord sits down I should like to thank him for giving very much more detailed answers on all the important matters about which I asked than were given in another place. I am extremely grateful to him and I hope I shall get an equally satisfactory reply on this last matter.
LORD STONHAM: My Lords, I am most grateful to the noble Earl. I would assure him that it is not the first time that there have been fuller answers given here. But this last matter is one of business which must be resolved, and I will endeavour to find out the answers. Indeed, let us hope that not merely shall I be able to get the answers but that we shall be able to improve the procedure. With that, I hope your Lordships will give this Bill a Second Reading.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

ANGUILLA AND SMALL BRITISH TERRITORIES: FUTURE POLICY
4.54 p.m.
LORD BROCKWAY LORD BROCKWAY rose to ask Her Majesty's Government whether they will make a new appraisal of their policy towards Associated States and non-self-governing islands, in view of the difficulties which arose in Anguilla. The noble Lord said: My Lords, I beg leave to ask the Unstarred Question which stands on the Order Paper in my name. May I begin by an explanation? On the day when it was announced that British troops were to go to Anguilla, I expressed in this House my great sense of shock at that decision, and on that day I tabled a Question dealing directly with Anguilla, intending to make a very forthright speech. The Minister who would have been responsible for replying indicated to me that he did not expect to be present on that day, and I accordingly co-operated in postponing the discussion. I want to express my appreciation of the co-operation which I had from the Chief Whip in this matter; but the first date on which one could have the opportunity for debate was today.
My Lords, I believe that criticism and protest against the policy of the Government is justified when one can influence the course of events, and I should have had no hesitation on an earlier Occasion in expressing my disapproval of the policy which the Government have pursued. On the other hand, I think that criticism and protest are not justified if the effect is likely to be to prejudice the reaching of agreement on issues of this kind; and in view of the new situation in Anguilla I propose to-day, with some restraint, not to make the criticism of Government policy which I bad previously intended to make. This new atmosphere is a result of Mr. Webster's withdrawal of his proposal for an immediate referendum and his appeal to the population to refrain from demonstrations in order to avoid division and violence. To-morrow, Mr. Webster is

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proceeding to New York, where he will again be meeting Lord Caradon; and, in view of the real possibility that a settlement of this unhappy situation can be secured, I do not propose to renew my criticism of the Government's policy in case that might exacerbate feelings. Therefore, my Lords, in my contribution to-night I shall try to be purely constructive.
First, may I make a series of suggestions regarding Anguilla itself? First of all, I think the time has come when Her Majesty's Government should indicate that they are prepared to withdraw the armed forces from that island, and that if the Royal Engineers are to remain they should be disarmed. I want to pay a tribute to the service which the Royal Engineers have given—their making of roads, their digging of wells and even the carrying out by their medical officers of surgical operations which were not previously possible on the island. Secondly, I want to suggest to the Government that they should co-operate in an early election of an enlarged Council, both to test opinion and to provide a reliable negotiating body regarding the future of the island.
Thirdly, my Lords—and this I want to emphasise—it is very important, if there is to be any settlement of this problem, that the Government should win the cooperation and the participation of the other Governments in the Caribbean. As I understand it, they agreed, in conference, to the retention of the territorial integrity of St. Kitts, Nevis and Anguilla, but they are divided regarding the Government's intervention with troops. They therefore have a balanced view of the situation. I suggest that the Government should at a very early point call a conference of all the Caribbean Governments to discuss this issue. The fourth suggestion which I make to the Government is that they should appoint a Caribbean as Commissioner upon the island. I could make a suggestion for such an appointment, but as it would be to the loss of this House I will not do so.
The fifth suggestion I make is that the police training establishments in the Caribbean territories should be open for the training of an Anguillan force. That police force is now reduced to the number of seven. Sixth, I want to sug-
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gest that at the conference with the Caribbean Governments there should be a proposal for the appointment of a Corn-mission of Caribbean representatives to assist both in negotiating and in administering a settlement.
Seventh (and this arises from the last point) the co-operation of the Caribbean Governments is absolutely essential if we are to find a solution to the problem of the relationship of Anguilla to St. Kitts. The British Government have said:
"It is no part of cur purpose to put them "—
the Anguillans—
"under an administration under which they do not wish to live."
The difficulty is that under the West Indies Act it is not possible for Great Britain to dissolve the union of St. Kitts, Nevis and Anguilla without the consent of its Government; and the influence of Caribbean Governments upon the administration in St. Kitts will be necessary if agreement is to be obtained.
Eighth, the Caribbean Commission (which I have suggested should be appointed by a conference of Caribbean Governments) should be responsible not only for co-operation in negotiation but also for continuing duties. I would suggest that not only should it be made responsible for helping to plan the economic, social, educational and medical development of Anguilla but that this would be an opportunity of making it responsible for development in other Caribbean Islands as well. I suggest that economic co-operation in the case of Anguilla should extend even to islands under the administration of other Powers —islands such as St. Martin, nearby, which is under the control of France and the Netherlands; and the American Virgin Islands, as well as the Leeward and Windward Islands, which are in the British Commonwealth.
Ninth, I would propose that the conference of the Caribbean Governments in the Commonwealth should consider the proposal of confederation. Most of us regretted it when the original sugges-tion of federation of the Caribbean territories was turned down. But the problem of Anguilla and the new issues which now arise indicate the need for a wider association among the Commonwealth Caribbean Governments. It may

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be that the proposal of confederation, that is to say, the association of independent States with those which have not yet reached that stage, would be a solution of these problems.
My Lords, those are the constructive ideas that I submit to the Minister in regard to Anguilla. I turn now to the larger problems raised in my Question, the problems of the remaining colonial territories which are mostly small islands, the feasibility of associated status as a solution; and, particularly, the future of the small islands scattered in the different oceans. Since the end of the war the colonial revolution has been the greatest political transformation in the world. It has meant a reduction in the figure of population under the Colonial Office from 650 million people to 10 million people under the Foreign and Commonwealth Office today. An amazing transformation! The 10 million people who remain within colonial status are confined to 25 territories in all, and of the total of 10 million 8 million are in Rhodesia and Hong Kong. I do not propose to discuss Rhodesia, which is outside the terms of my Question. Except for Gibraltar, Brunei, British Honduras and Hong Kong (which has a hinterland on the mainland of China) these 25 territories are all small islands. They vary from Fiji, with a population of 483,000, to the Falkland Islands, with a population of 2,100—
THE MINISTER OF STATE, FOREIGN AND COMMONWEALTH OFFICE (LORD SHEPHERD): My Lords, if the noble Lord is going to list them, perhaps I can give a little more accurate information. There is Pitcairn, with only 80.
LORD BROCKWAY: My Lords, I always admire the vigilance of the Minister. My next words were to be: "and the Pitcairn Islands, with a population of 88."
I do not propose tonight to suggest any blueprint for the solution of these problems: many of these islands have quite varied problems. I shall be content with making some suggestions for consideration by Her Majesty's Government. I was present some years ago at a weekend conference called at Oxford by the then Secretary of State for Colonial Affairs, Mr. Anthony Greenwood. At
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that conference there were the Governors of the continuing Colonies; there were civil servants, and there were experts and those who had shown an interest in these problems. I do not know whether the Minister has examined the large file of documents which arose from that conference. But I believe that from those documents many indications could he given of the way in which these problems might be tackled. I suggest to the Minister that it might be of value if a seminar of that kind could be repeated. On that occasion it was of great value. Indeed, it might be of help to the Minister if there were a permanent unofficial advisory committee of those who have knowledge of and interest in this question which might keep in contact with his Office.
My Lords, the principle that we have to resolve when we are discussing these problems has been well put by Mr. Colin Legum, to whom all of us who are interested in these issues owe such a great debt. He has put it in these words:
"How to arrange for the future of relatively small groups of people in our post-colonialist world in order to make a reality of the right to self-determination and to promote world order."
I am not sure that it would not be correct to say that this is the main political problem of today: how to harmonise the self-determination of groups of peoples with the wider association which is necessary in a shrinking world. This is particularly true of these small territories which are economically and politically non-viable.
May I make a passing reference to land-linked territories which may be made the subject of associated status? First, there is Hong Kong which, apart from Rhodesia, is the largest remaining Colony, with 3,785,000 population. Hong Kong is dependent upon a hinterland on the mainland of China our right to which is contained in a treaty that comes to an end in 1997. At the moment, Hong Kong is useful both to China and to Great Britain—to China, economically, to Great l3ritain not only economically but strategically as well; and any change of status immediately in Hong Kong might aggravate a conflict between this country and China. It would probably be best to leave the status of Hong Kong as it is, but with extended local govern

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ment, with a tremendous extension of education and a minimum living wage and standard of working conditions to save its population from the appalling circumstances in which the workers now live.
The second land-linked territory which remains within the colonial sphere, and to which associated status has been proposed, is Gibraltar. I believe that we must accept self-determination for Gibraltar and the will of its people not to be joined with Spain. Perhaps it could be established as an Associated State with British collaboration in defence. I acknowledge that I should like in the long run to see all international waterways internationalised, including the control by Gibraltar of the entry to the Mediterranean.
The third territory in this category is Brunei, on the large island of Borneo, separating Sabah and Sarawak. It has declined to enter Malaysia. I hope that in this case there may be a reversion to the idea of a confederation, which was proposed before Malaysia was established and which would include Malaysia, Singapore, the Philippines and Indonesia. The changes which have taken place in Indonesia make that proposal more realistic. Lastly, there is British Honduras, in Central America. I suggest that it might be made an Associated State with some direct contact with the Caribbean Council which I have already proposed.
My Lords, I turn now to the small islands. The majority of the small islands which are still within the British Colonial sphere do not claim independence: they are too small, and they are economically and politically non-viable. There are five which look forward to independence. They are the Bahamas, Bermuda, Fiji, the Solomon Islands and Tonga. Some of these, such as Fiji, have internal problems. I only express the hope that the racial conflict there will be solved by extending an inter-racial franchise to that territory.
But, my Lords, a very grave issue arises over the claim of these small territories to independence. It is their relationship to the United Nations. The populations vary in size from Fiji, with its 483,000, to Bermuda, with its popula
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tion of only 45,900. Are they to have the same voting rights within the General Assembly of the United Nations as the United States and the Union of Socialist Soviet Republics? U Thant has suggested that there should be a distinction between the right to independence and full membership of the United Nations. He raised this issue on the case of the grant of independence to Naura, which is only 8½ square miles in extent and the population of which numbers only 3,000. It is not merely that the small nations becoming independent would reflect an inequality within the General Assembly; membership of the United Nations would be a burden on them financially and in other ways.
U Thant has suggested a survey of the position of what he calls these micro-States by an appropriate organ of the United Nations. He has suggested that membership of the United Nations Special Agencies should be open to them, and the right to have observers at both the United Nations and its Office in Geneva. The Government of the United States has proposed that this problem should be referred to the Committee on the Admission of New Members. I should like to ask—because although I have tried to follow these documents I do not know—whether the British Government have sent a reply to this proposal made by U Thant. I want to make one further suggestion in this respect. It might be possible to establish a Council of the new micro-States, not only from the British Commonwealth but from other areas as well, which would have the right to appoint one of its delegates to the General Assembly.
I turn from the problem of the small islands which are claiming independence to those to which associated status has been extended. This solution arose from the precedent established by New Zealand in the case of the mandated territories of Samoa and Cook Islands. The definition of associated status is internal self-government, with defense and foreign affairs in the hands of the preceding colonial Power, but with the right to declare for independence if desired. I want to suggest to this House that what has happened in Anguilla indicates that we have no right to impose association on a territory which was an administrative unit under colonial rule if such

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integration is opposed by a member of that unit. It is necessary that every part should agree to membership of such a union.
Nevertheless, we should encourage federation, or perhaps confederation, of the small islands which are non-viable, both in the Pacific and in the Caribbean. It might be that confederation—that is, the association of independent States—might prove more acceptable than federation. If wider confederation is established, I suggest that associated status may be with areas wider than just Great Britain. For example, the islands in the Pacific could become Associated States of Australia and New Zealand. In the Atlantic there might be a Caribbean Confederation, as I have suggested. Even in the case of Africa, the Islands of Seychelles might be associated with a confederation of East and Central Africa and Mauritius. The islands of Ascension, St. Helena and Tristan da Cunha, off the West Coast of Africa, might he associated in time with the West African Confederation.
I agree that these are distant prospects, but we should be forward looking in our thoughts. There are two alternatives that I want to mention before I conclude. Most of the proposals I have made have related to States in geographical proximity, to each other, but in the world today distances are of little importance and we can reach any part of the world by air in two days. Therefore, technically, there is no reason why associated status should not be with world-wide centres rather than between neighbouring countries.
There are two possibilities. The first is the Commonwealth itself. If these territories are to become associated with it, the Commonwealth would have to be more closely knit and the Commonwealth Secretariat would have to be strengthened. It would be helpful if a Commonwealth Conference could be called to consider this possibility and also some of the previous suggestions which I have made. The second alternative is the United Nations. The advantage of this would be that it would include small communities from other empires. A modernisation of the functions of the Trusteeship Council would be necessary. The United Nations would have to be responsible for security, which at least would exclude
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these small islands from the strategy of the cold war, and from a possible confrontation in the future with China. But I recognise that the United Nations would have to become a much more efficient instrument.
My Lords, I do not apologise for raising this issue. These 2 million people are human beings, and they are our responsibility. They are very liable to exploitation, to be cheated of their rights to land, to the appropriation of hidden minerals, to the expropriation of their coasts for tourists' hotels or for casinos and gambling, or to their use for strategic purposes and nuclear explosions. Many of the peoples of these islands live without the mechanism and materialism of modern industrial societies. Many of these small islands are the last retreats of nature, of rare and beautiful birds, animals and plants. It may be that we should leave them and the humans of these islands to enjoy their easy sunlit retreats. But we certainly have the duty, in co-operation with them, to contribute to their place and their protection in the world of to-day.
5.28 p.m
LORD WALSTON: My Lords, my noble friend Lord Brockway was very right to raise this important question, and even more right to turn his back on the temptation to make an inquest into what has happened in Anguilla but rather to help us, with his great experience in and thought on these matters, to look forward to a more distant future when we may shape events instead of being the victim of them. I will not attempt to follow him round the world to all our small remaining colonial possessions but will concentrate my remarks on the Caribbean, with which I have more personal connection and of which I have had some experience.
We gave independence to our smaller Colonies because we considered that it was right that they should have it and because they wanted to become independent. Those, I believe, were our main reasons for that action. By giving those former Colonies independence, we relieved ourselves of a large measure of responsibility, but by no means of all responsibility, for what goes on now in those territories. Certainly we no longer have the same sort of responsibility that we used to have in the days when they

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were dependent Colonies of the British Empire.
I would suggest that our responsibilities to these former Colonies, and in particular to those which are now associated territories, fall under three headings. First of all—and I am not ashamed to say this—our responsibility is towards our own people in this country. However we may be affected by what happens in those overseas territories, associated or independent, we are responsible for the safeguarding of our own people here, in the military sense and, in so far as we can, for safeguarding our economic interests. Secondly, we have the responsibility to fulfil such treaty obligations as we have entered into with those territories. Thirdly, we have the overriding moral obligation of helping, so far as we can, those areas of the world which are less fortunate than we are, and, in particular, those areas with which we have been associated as a Colonial Power for a very long time.
My Lords, what we have done in Anguilla (and I am not going to dwell to any extent on the past) fulfils none of those three criteria. Our own interests were in no way threatened in Anguilla. We had had no specific treaty obligations other than those contained in the West Indies Act 1967; and, incidentally, I must say that I think it is straining the interpretation of that Act to have entered Anguilla in the way that we did, on the ground that it was essential to fulfill our obligations for defence of those territories. Thirdly, it was not done primarily in order to help the less fortunate people living there. I mention that not to cast blame or to criticise, but to prevent our embarking on a similar course in the future.
The people in the Caribbean area—and this, as I have said, is the only area that I will concern myself with to-day—have many interests in common. They have largely a common history; they have an economy which is very similar one with the other; they have a similar language and culture. As your Lordships know, when independence for them was first talked about we felt that federation was the right answer: that they were too small to stand on their own feet and that it would be to their benefit if they were granted independence as
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a federation. The attempt was, I believe,
right one, but unfortunately it failed. Whether its implementation was right is not to be discussed here.
But although federation failed, that is no reason why we should not use all our endeavors to bring all the islands of this area closer together, so that in the not too distant future, I should hope, they will accept the fact that their destiny lies one with the other, and will, of their own accord, co-ordinate their efforts and eventually even co-ordinate their systems of government. They have made an admirable start with CARIFTA. Perhaps some of us would like to see it going faster; perhaps some of us have a certain amount of doubt as to how well it is going to work. We know that it will have many teething troubles. But, for all that, it is an important move in the right direction. To this venture we are giving encouragement and help. And I hope that we shall continue to give increasing encouragement to the economic getting together of all the territories in the whole of the Caribbean area
But the problems of Anguilla have brought to light something else; that is to say, not only the economic aspects but the security aspects of the problem. I hope that we can give the strongest possible lead to the independent countries and the associated territories of the Caribbean to set up some form of joint security organisation among themselves. It should be something which is run by them, manned by them and directed by them: but I hope that we shall feel prepared, at any rate in the initial stages, to get it on its feet and give actual physical help in the way of training, manning and resources, and possibly in the way of aircraft, frigates or whatever it may be. I do not think we should provide this help in the way of independent units of the British Army, Navy and police force, but as units seconded to the Caribbean security forces. It is a force of this kind which should be looked on as being the guardian of the peace in the whole of this area, rather than a force coming from some entirely outside Power, whether it be the Canadians, the United States, ourselves, one of the larger countries of Latin America, or elsewhere. That is something we do not want. We want the Caribbean area increasingly responsible for its own security.

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The second point I wish to make is that while we should give as much help as we can in this respect to encourage their own independence, we should not lose sight of the fact that the obligations we have entered into under the West Indies Act 1967 arc two-way obligations. We have undertaken obligations to look after the defence and the foreign affairs of those territories. But Section 10(2) of the Act lays down that:
"Her Majesty may at any time, by Order in Council made in respect of any associated state, terminate the status of association of that state with the United Kingdom as from such date as may be specified in the Order."
In other words (and this was one of the points brought out at the time when the Bill was debated and which recommended itself strongly to me) we were not entering into, as, for instance, in the case of Rhodesia, an obligation from which we could not escape, to represent them in the United Nations and to look after their external affairs while they had complete freedom to run their internal affairs in any way that they wished. We quite rightly reserved the right to say in effect: "If you do something that we do not like, we are perfectly free to leave you to carry on with it. We are not going to help you in the world at large to perpetuate policies that you are embarking on in your own territories of which we do not approve—or not necessarily because we disapprove, but for any other reason." I think that is something that must be borne in mind. If certain actions take place in some of these associated territories of which we disapprove and in respect of which we do not feel it right to use British forces to implement them, then we should have no hesitation in making it very clear that under Section 10 of the West Indies Act we will abrogate our responsibilities in due manner as has been prescribed.
The third point I want to suggest is a purely domestic one, in that it is something solely within the purview of Her Majesty's Government, and specifically of the Foreign and Commonwealth Office. It is extremely important for us here, and for Her Majesty's Government in particular, to have the best possible relations with the associated territories and the whole of the Caribbean area, and also to have the best possible information, not only as to what is hap
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pening in one specific territory but as to what is happening in the area as a whole.
As things are at present arranged, we have the High Commissioner in Barbados, Trinidad and Jamaica, we have a Governor in the Bahama s, and we have a British Government representative in the Windward Islands and the Leeward Islands. I am sure that all these gentlemen are admirable in their own particular ways, and I am not in any way criticising them as individuals. But if each of them reports individually for his own particular area back to the Foreign arid Commonwealth Office, all this information has to be correlated and weighed up there. That is putting a very great strain on the individuals responsible for doing that, because they have not the whole picture; and it depends on the personalities, the timing and all, the rest, how these reports come in and what weight is given to them. It is just as if Her Majesty's Ambassador in Washington were responsible solely for Washington and the District of Columba and reported on that District only, while the Consul General in Chicago and in San Francisco and in New York, and the Consuls in Dallas and other places, wherever they may be, made their reports independently to the Foreign Office. We know that that system does not work and is not a good way of getting the right information and making the right decisions.
I believe that what we need for the Caribbean is to have somebody who might be designated "Commissioner General " or whatever one likes—we have had a Commissioner General in South-East Asia if a precedent is wanted—and the reports of the various British Government representatives, High Commissioners and so on, should all go to him. There would be direct personal contact, because communications there are relatively easy, and the information then would go as a combined Caribbean information to Whitehall, with each different territory, each different island, having the appropriate weight given to its point of view. I believe that it would be very much easier for the people in Whitehall who are responsible for assessing information and for deciding upon the correct policy for the Caribbean if they were able to obtain information

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in that way, rather than in the present way.
What we must do in the Caribbean, my Lords, is to have a policy which is based on complete respect for the independence of these territories; which enables them, encourages them, as much as possible to settle their own disputes between themselves without interference from the former Colonial Power. We should intervene, with all the assistance we are able to give, only when requested by the Caribbean as a whole. At the same time, our policy must of course be aimed at helping them towards a higher standard of living, because without that it will be impossible for them to enjoy the full fruits of their new independence.
5.44 p.m.
THE MINISTER OF STATE, FOREIGN AND COMMONWEALTH OFFICE (LORD SHEPHERD): My Lords,
in an age when great Powers get greater there is a tendency on the part of many to overlook the smaller territories and their problems, until, I suspect, as in the case of Anguilla, something goes wrong. I am therefore very grateful to my noble friend Lord Brockway for having raised this subject, and to have had it raised in the manner in which he spoke and in the way my noble friend Lord Walston spoke—full of constructive thoughts and ideas, to which I will certainly undertake to give most serious consideration after to-day's debate.
The formal Question is whether Her Majesty's Government:
"will make a new appraisal of their policy towards Associated States and non-selfgoverning islands in view of the difficulties which arose in Anguilla".
The short answer is that all these matters are kept under constant review, not only in the West Indies but wherever we have a direct responsibility; and not only in the political field, but in what I believe is in many cases of even greater importance, the economic field, the social and economic developments of those territories. It is often forgotten that scattered all over the world are a large number of small territories. Many are islands. Some are small enclaves carved out of a large country or continent, usually by the previous Colonial Power. Several remain
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Colonies. Others, despite their smallness, and on some occasions despite their economic weakness, are now independent nations. Since the end of the Second World War many of the islands (Mauritius was the most recent) and enclaves—for example, the British High Commission territories in South Africa—have become politically independent. Who would have predicted this in 1945—or ten years later, for that matter? To-day their independence is a fact. Will they be followed by others? What sort of independence can such territories have? How can they defend themselves? How can they survive economically? How can they administer themselves? Can they hope to improve or even maintain their present standard of living? What political forms can they develop?
Over the past twenty to twenty-five years many experts in the Colonial field have given considerable thought to these and similar problems. But, such has been the complexity of many of these problems, and such is human nature, that it has been seldom possible to produce solutions which have satisfied everyone. As the decolonisation of the British Colonial Empire began to gain momentum it seemed possible—even until about ten years ago—that the number of Colonies which could gain full independence was limited to those which could fulfil fairly restricted criteria. Ideally there had to be some political expertise, an adequate administration and, above all. I think, a feeling of national unity to survive beyond the enthusiasms of the first few months after independence, and a reasonable economic framework. Therefore, it seemed that only the larger territories would qualify for independence. But those who thought that way failed to take into account one; important consideration; namely, that the demand for sovereignty or freedom could be as strong among the politically conscious in the smaller territories as in the larger. So we found that from 1959 many of the smaller territories were to achieve full independence: Sierra Leone, Cyprus, Jamaica, Trinidad, Barbados, Guyana, Nyasaland, Malta, The Gambia, Basutoland, Bechuanaland, Mauritius and, last, Swaziland.
Yet while it was generally accepted in Britain that it was not for us to deny self-government and independent status

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for a viable and definable community against the declared wishes of that community, there remained in many minds the question: Where was all this leading to? On how small a community of peoples can be set all the expensive trappings of government? Also, what would be the consequences of a small insecure State if it were created? Would its creation make a security problem for the whole region?
This particular question exercised the mind of my right honourable friend the present Minister of Housing and Local Government, who was then the last but one Colonial Secretary. He began to look for a new status for the smaller territories, with particular reference to the small island territories of the Caribbean whose future was in doubt following the break-up of the proposed Federation of the West Indies. The approach he proposed is, I think, well known to your Lordships. In 1965 he invited a small number of people who had expert knowledge of the smaller territories and the Colonies generally to a weekend conference at Lady Margaret Hall in Oxford. I know that my noble friend Lord Brockway played a significant role in that conference. It included private individuals, as well as officials from the territories and from Government Departments. No report was published, and no recommendations were made about the future of any one territory, and I can assure my noble friend that during the past week-end I went through the formidable number of papers that were prepared for that conference. Shortly afterwards Her Majesty's Government proposed that the islands of the Wind-wards and the Leewards, with the exception of Monserrat, should become States in association with Britain. Each should have control of its internal affairs and the right to amend its own Constitution, including the power to end unilaterally the association with Britain. The British Government, for their part, would accept responsibility for their external relations and defence.
Early in 1967, five of the six islands concerned—Antigua, Dominica, St. Lucia, Granada, and St. Kitts-Nevis-Anguilla— became Associated States. Because of electoral difficulties the sixth, St. Vincent, has not yet followed the others into Statehood, but provision for this remains under the West Indies Act 1967.
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When my noble friend Lord Beswick introduced the Second Reading of the West Indies Bill in your Lordships' House in February 1967, he made three important observations. First, he made it clear that associated Statehood marked the end of the colonial era for these islands. Sometimes when I have heard criticisms of Her Majesty's Government in regard to Anguilla it has seemed that many of them have come from persons who have failed to remember—if they ever knew—that this granting of association was decolonisation and that it removed the responsibility of this country for its internal affairs. Secondly, Lord Beswick confirmed that we should be prepared to continue to provide budgetary aid, where the need for this was established, as well as to provide development capital. Thirdly, he emphasised that in setting these territories on their own feet we were not trying to shift our former responsibilities.
The internal problems, and a consequent implication in the field of defence and foreign relations within St. Kitts-Nevis-Anguilla, have focused attention on the West Indian Associated States. The problems facing these States are formidable. Weak economies not only create internal pressures but also limit the capability of the Government of each State to maintain its own police force at a level where it is able to cope with internal security situations should they arise.
I will certainly look into the suggestion made by my noble friend Lord Walston about a Caribbean regional police force. I think there is something in this. Certainly we shall have to get the co-operation of the Associated States, and I hope that if such a force were to be brought into being other independent Caribbean countries would participate because, as my noble friend knows, Barbados provides much of the manpower for the police forces in this area. However, I will look at this point with great care.
I think it would be wrong to suggest, because of the problems of Anguilla, that the Associated State experiment has failed. I do not think we need to consider the point made by my noble friend Lord Walston as to possible action under Section 10. The States have been in existence only a little more than two years, and in my view it is too soon to

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judge. It will remain our policy to help these States in all possible ways.
I will not say a great deal about Anguilla at the present moment. I thought that my noble friend Lord Brockway put his finger on something that is a problem when we create a State that is made up of two, three or four different islands or peoples. We know from many past experiences that this is one of the great dangers in creating federations. But I think it would be wrong to say that the Government had any reason to believe, until the very last stages of the constitutional procedure, that there would be any difficulty. Anguilla-Nevis-St. Kitts had been an administrative unit for some 85 years, and during all the constitutional conferences in London the elected Member of Parliament for Anguilla attended. On no occasion, to the best of my knowledge, did he raise any question or doubt, or even reservation as to the proposals within the Constitution. It was only at the last moment that there were doubts in Anguilla. When one creates States like this there are naturally risks. I do not think we had any reason to believe that this State could not, with good will on all sides, remain in unity.
We will give most careful consideration to the eight or nine suggestions made by my noble friend Lord Brockway. I will only say to him, so far as the armed forces are concerned—and I am grateful to him for his kind references to the work that the Royal Engineers are now doing in Anguilla—that it is our desire that the armed forces should be withdrawn from Anguilla as soon as possible; but until there has been created a situation of calm, and a willingness to cooperate, clearly the forces must remain there. But I hope they will remain in a constructive role, such as building the road and hospitals and schools which they are now undertaking. It is our desire that the armed forces in a military role shall be withdrawn from Anguilla as soon as possible.
I agree with my noble friend that what we wish to see here is Caribbean consultation and participation. That is what I sought to obtain when I want out in 1967 for the first Barbados conference which was held as a result of the Anguilla dispute. Then I thought that we had achieved Caribbean participation, but, as
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the House will know, in the end it failed to materialise. I believe my noble friend Lord Walston also amplified the need for Caribbean participation.
I agree that we should work towards greater economic co-operation between the States in the Caribbean. I know of one particular case where there are some three islands which have no ports whatsoever. Ail the goods have to be manhandled on to lighters and then out to the ships. Each island by itself is too small to obtain assistance from the major World Bank in New York. In some respects it is too rich to receive special grants from this country. But if these three islands were to come together and produce an agreed scheme, I believe they would then meet the criteria for going to the World Bank for assistance and would stand a good chance of getting that assistance. That is an indication of what can be done with co-operation. But if there is not that co-operation it is clearly going to delay the economic development of the Associated States and the smaller islands.
In regard to dependent territories, as my noble friend has said, we have some 20 to 23 (I think it is), but each has a variety of problems, and many of them are enormous. The largest, both in size and, I think, in challenge, is Hong Kong, with a population of some 4½million, and the smallest is Pitcairn, with a population of 80. I do not know what will be the future of Pitcairn. The indications are that the people are now leaving the island, and we must surely reach a stage clearly when to keep it in any way economically viable is going to be very difficult. Some of these territories consist of plural and multi-racial societies composed of people of different origins, cultures, religions, languages and traditions. That gives rise from time to time to tensions, where certain occupations become the exclusive province of one particular national origin.
With few exceptions their economies are weak. Reliance is on a single product or on a few primary products for export. This makes them particularly vulnerable to fluctuations of the world market. Another feature of their economies is the small internal markets forcing them to rely largely on imports. One sees the effect of the tourist industry in the Caribbean; the failure to meet

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the natural requirements of the tourist industry, the vegetables and other forms of commodities, means that with American tourists coming in more and more has to be imported. Clearly the advantages of the tourist trade are not fully gained because of the inability of the countries to meet the demands.
A considerable part of the national income is eaten up by administrative costs. Often difficult and politically delicate decisions have to be taken over education, whether to stress universal primary education or technical and higher education for a few. Many territories, I fear, which send their best students abroad for further education find great difficulty in inducing them to return. These are just some of the general problems which have to be faced by the remaining dependent territories. I stress this because the problem of dependent territories is not purely one of political development; one needs to see how one can create an administrative machine and also develop the internal economy and welfare of the people.
For many it is far too early to see how their political future will work out. How many will yet achieve independence, either alone or in association with other States, is, I fear, mere conjecture at this stage. As my right honourable friend the Minister without Portfolio, when he was Commonwealth Secretary, said in London at the opening of the Bahamas Constitutional Conference in. September, 1968:
"There still remains a number of British dependent territories around the globe. We do not know what their ultimate constitutional future will be. We have not—and never have had—any detailed blueprint. A few of these territories may wish to proceed with independence. Others may not. It is always difficult to forecast. But whatever the future holds, we in Britain will adhere closely to the cardinal principle to which we have adhered in the past—that the wishes of the people concerned must be the main guide to action. It is not and has never been our desire or intention either to delay independence for those dependencies who want it or to force it upon those who do not."
I expressed those particular words the other day when I visited Montserrat.
We must recognise that people in many of the smaller dependent territories are themselves anxious that there should be no hasty decision about their future; and it is unlikely that developments in future years can be or should be as rapid
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as they have been in the past. But this does not mean that we should not give attention and thought to the problems. As I have said, I will look at the suggestions my noble friend has given us this afternoon. Our concern will be to continue where necessary to deveop their political institutions to the point where they, the people, are in a position to make a genuine and meaningful decision about their own futures.
This is a continuing process, often attracting little or no publicity. Since I joined the Commonwealth Office (and subsequently the Foreign and Commonwealth Office), Mauritius and Swaziland have become independent. The Bahamas and Bermuda have seen significant advances in their constitutions. In addition, we are constantly in touch with the political leaders of the dependent territories by correspondence through the Governors or Administrators, by visits to the territories by British Ministers and officials, or visits to Britain by local political leaders. And two or three times a year, through the Commonwealth Parliamentary Association, we are able to meet Back Bench members of these countries. So there is continued contact and process of discussion between ourselves and the smaller territories.
We shall, as we have in the past, continue to keep the changing circumstances of each territory under review, ready to respond when further constitutional developments are required. Each territory has, as I have said—and I think my noble friend Lord Brockway agreed with this—its own character and its own special needs. There is therefore no one solution, no one blueprint, but each of them from now on will call for its own particular solution.
LORD CLITHEROE: My Lords, be fore the noble Lord sits down, may I ask him whether he would be good enough to let the House have an Answer to the Written Question I put down on March 27 on this subject? It is quite relevant.
LORD SHEPHERD: My Lords, the noble Lord rather shakes me. I do not know why it has not been printed. I well remember signing it, as I was required to do. Therefore an Answer is on the way. I will find out why it has not been printed.

  ANGUILLA WATER SUPPLIES
  ANGUILLA WATER SUPPLIES
  DEFENCE EXPENDITURE BYN N.A.T.O. AND WARSAW PACT COUNTRIES
  DEFENCE EXPENDITURE BYN N.A.T.O. AND WARSAW PACT COUNTRIES