Sitting of 27 February 1969

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PRIVATE BUSINESS
  BRIGHTON CORPORATION BILL (By Order)
  Second Reading deferred till Tuesday next.
  YORK CORPORATION BILL (By Order)
  Second Reading deferred till Tuesday next.
ORAL ANSWERS TO QUESTIONS
  TELEPHONE SERVICE

    Decentralised Offices ("Freefone" Facilities)
    Mr. Costainasked the Postmaster-General if he is aware that some firms are reluctant to move from the Metropolis because of their concern that they will lose business owing to clients' reluctance because of charges to telephone them; and if he will consider establishing a London telephone exchange with private extension lines to decentralised offices.
    The Postmaster-General (Mr. John Stonehouse): Subscribers may have ser vice substantially as proposed by renting lines connected to distant exchanges. Callers may also, without charge to themselves, call "Freefone".
    Mr. Costain: I thank the right hon. Gentleman for that reply. Will he give more publicity to the fact because I am sure he would agree that it would help offices to move out of London, which is one of the good policies of this Government?
    Mr. Stonehouse: I think it a very good arrangement. I shall arrange for more publicity to be given to the "Freefone" facility.

    Charges (Incorrect Accounts)
    Mr. Costainasked the Postmaster-General what steps are taken to protect telephone subscribers against overcharging.
    Mr. Gwilym Robertsasked the Postmaster-General how many complaints he received during 1968 of excessive telephone accounts; how this number of complaints compared with the numbers in 1966 and 1967; what investigations his Department carried out into the possibilities of including in the subscriber's home a meter showing immediately the total units consumed in subscriber trunk dialling calls; what estimates are available of the costs of such a subscriber-meter scheme; and if he will make a statement.
    Mr. Stonehouse: We do not keep a separate record of complaints about in correct accounts. We undertake extensive staff training and regular equipment testing to see that the recording of charges is reliable but human error is always possible. However I am satisfied that the number of mistakes is minute in proportion to the 30 million bills a year.
    Providing all our customers with home meters would increase the cost of the service by approximately £20 million. Rented meters are available for £3 a year but for technical reasons cannot be used on every type of installation.
    Mr. Costain: The Postmaster-General has made no reference to decreasing charges when telephones are out of order. Any other organisation renting equipment which does not work expects a rebate. Why does he not publicise the fact that he can do that if he has power to do it?
    Mr. Stonehouse: Because invariably when phones are reported out of order we put them in order within 24 hours—often on the same day. I think this is a very good result.
    Mr. Roberts: Does my right hon. Friend accept that, whereas I agree that the number of mistakes is small, there are some which are important in the few

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    cases concerned? Would he accept that the degree of uncertainty must be greater for subscribers with S.T.D.? Since the introduction of meters is almost impossible financially, will he give greater publicity to the availability of meters under special arrangements?
    Mr. Stonehouse: We are doing that and the number of complaints we get is comparatively small. This points to the number of acutal mistakes of only about 31,000 a year out of a total number of bills of 30 million, which is only 1 per cent. That is extremely low, but I will look at the suggestion made by my hon. Friend.
    Sir W. Bromley-Davenport: Is the Postmaster-General aware that on long-distance telephone calls the lines are often so bad that, instead of taking three minutes, the calls take six minutes, thus doubling the charge to the customer? How about that one?
    Mr. Stonehouse: I think that is a very foolish one because in my experience, and I think in the experience of most customers, our trunk line service is extremely good and S.T.D. has enabled the charge for long-distance calls to be substantially reduced.
    Sir W. Bromley-Davenport: Ridiculous.

    Members Telephone Calls
    Mr. Ogdenasked the Postmaster-General what has been the annual income to the Post Office for out of London area telephone calls made from the House by Members of Parliament for the years 1965. 1966, 1967 and 1968; and what has been the relevant cost of collecting such payments from Members.
    Mr. Stonehouse: The total income for 1968. including receipts from bills, from coinboxes, and from cash payments to the Attendants was about £6,700. The cost of collection by billing alone was about £4,500. Cost and revenue figures for earlier years are no longer available.
    Mr. Ogden: I thank my right hon. Friend for that reply, which will be given the consideration which it ought to receive. No doubt he will be hearing further on it later.

    Trunk Lines (Newcastle-upon-Tyne—Bristol)
    Mr. David Watkinsasked the Postmaster-General what proposals he has to improve the telephone service between the Newcastle-upon-Tyne and Bristol telephone areas.
    Mr. Ellisasked the Postmaster-General what plans he has to improve the telephone service to the north of England, especially to Newcastle-upon-Tyne.
    Mr. Stonehouse: We are putting in additional trunk lines. These will increase the route capacity between Newcastle-upon-Tyne and Bristol by 30 per cent.
    Mr. Watkins: Is my right hon. Friend aware that this is a continuing process, because there is an ever-growing volume of calls on this trunk line and there are at present long delays, particularly in the cheap rate period? Can he give the House any assurances about that?
    Mr. Stonehouse: We will provide an additional 45 lines. I think that these will be sufficient to deal with the increase in demand on this very important trunk route.
    Mr. Ellis: Could my right hon. Friend supply interested Members with details of what the traffic has been in the past, what the build-up is likely to be, and an analysis? I believe that his officials sometimes provide interested parties with such information. This information would be useful to people who are interested in specific aspects of this question—for instance. Members of the House.
    Mr. Stonehouse: Yes; I will arrange to have this looked at. When I said in answer to my hon. Friend the Member for Consett (Mr. David Watkins) that we were providing an additional 45 lines I should have said an additional 12 lines.
    Mr. Milne: When improvements are being made in the Newcastle-upon-Tyne area and new telephone exchanges are being installed, will my right hon. Friend ensure that difficulties to subscribers in the changeover are reduced to the absolute minimum? Will he make a close investigation of this aspect?
    Mr. Stonehouse: Yes, Sir.

    Coin Boxes (Decimal Currency)
    Mr. Woofasked the Postmaster-General what preparations his department is making for the conversion of public telephone coin boxes to take decimal coins; what denominations the new boxes will take; and whether contracts for new coin boxes have now been placed.
    Sir J. Langford-Holtasked the Postmaster-General what charge he intends to make in a telephone kiosk when sixpenny pieces cease to be minted on the introduclion of decimal currency.
    Mr. Stonehouse: All telephone coin boxes in use in 1971 will be converted to accept coins with the denominations of two and 10 new pence. Contracts have been placed for these changes but a new design of coin box will not be needed.
    It is too soon to decide what charges will then apply.
    Mr. Woof: Can my right hon. Friend confirm or deny that suggestions are being made for the new coin boxes to take only two denominations—the new 5d. piece equivalent to 1s. and the new 10d. piece equivalent to 2s.? If the minimum charge of 1s. for a 'phone call from a public coin box is not to be the case, does this mean that telephone call boxes which at present have 6d. as minimum will be altered to take the new 2d. piece?
    Mr. Stonehouse: As I said in my original Answer, coin boxes are being designed for denominations of two and 10 new pence. We are not designing the coin boxes for five new pence. The minimum coin to be used, therefore, will be two new pence, which is equivalent to 4·8 old pence.
    Sir J. Langford-Holt: Is the Postmaster-General aware that as a result of the Government's defeat this morning he will be spared the necessity of choosing between two coins? In those circumstances, will he leave it as it is? If not, can he assure the House that telephone users will not get a much shorter time for the two new pence which he now proposes?
    Mr. Stonehouse: If there was a temporary defeat, it will soon be put right.
    Mr. Murray: Does not my right hon. Friend think that the discrepancy between
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    4·8 old pence and 2s. is rather large for telephone calls? Has he taken note of the statement this week by the Secretary of the Decimal Currency Board on telephone charges?
    Mr. Stonehouse: Yes, Sir. I think that my hon. Friend is misunderstanding the position. Coin boxes will have a slot for two new pence and a slot for 10 new pence. The minimum coin to be used will be two new pence which is equivalent to 4·8 old pence, which is less than the minimum of 6d. which is now in use.
    Sir Knox Cunningham: What will the cost of the conversion be?
    Mr. Stonehouse: I have not a detailed answer on that, but I will arrange to obtain the information.

    Privately-Owned Equipment
    Mr. Loveysasked the Postmaster-General whether he will make a statement on the discussions he has had with interested parties concerning the connection of privately-owned equipment to the Post Office system.
    Mr. Stonehouse: Discussions are not yet complete.
    Mr. Loveys: I realise that my Question may be somewhat premature. May I ask the Postmaster-General, however, whether the aim of these discussions is to investigate the desirability of allowing a wider range of efficient privately-owned equipment to be connected to the public system?
    Mr. Stonehouse: Before the discussions are concluded it would be a mistake to anticipate the decisions which we will arrive at.

    Retirement Pensioners (Concessionary Rates)
    Mr. Dempseyasked the Postmaster-General if he will introduce a system of concessionary telephone charges for retirement pensioners; and if he will make a statement.
    Mr. Stonehouse: No, Sir. Much as I sympathise with the problems of retirement pensioners and others of limited means concessionary rates by the Post Office are not an appropriate answer to the problem.
    Mr. Dempsey: Is the Postmaster-General aware that many persons on retiring require to give up telephones because their small pension together with their retirement pension renders them ineligible for social security assistance? As telephones are essential, will the right hon. Gentleman reconsider this matter, because a telephone enables old folks to counter the effects of fear and loneliness which unfortunately are the companions of these senior citizens?
    Mr. Stonehouse: I appreciate the importance of this Question and the sincerity with which the supplementary question is put. If we were to arrange a concession on this provision, other Post Office users would have to pay for it. The Supplementary Benefits Commission of the Department of Health and Social Security is prepared to give financial assistance for a phone installation where it is essential.
    Mr. Scott-Hopkins: Will the Postmaster-General enter into discussion with the Department of Health and Social Security to see whether the bills of old-age pensioners up to a certain level could rank for supplementary pension over and above what they are receiving at the moment?
    Mr. Stonehouse: I will discuss this matter with my right hon. Friend the Secretary of State.
    Mr. George Jeger: Is not my right hon. Friend being thoroughly inconsistent about this when he repeatedly says that he is not in favour of concessions being given to one section of the population because other sections would have to pay for them? Is it within my right hon. Friend's recollection that he supported concessionary fares for old-age pensioners?
    Mr. Stonehouse: I do not think that this is exactly the same parallel. The connection charge for a phone is about £150 on average, and it would be extremely expensive if we were to give a carte blanche guarantee that every old age pensioner in the country would have a phone connected. It would be a very great burden on all the other users.

    London-Scotland Lines (Congestion)
    Mr. Edward M. Taylorasked the Postmaster-General what steps he is taking to reduce the congestion of telephone lines between London and Scotland during the normal working day.
    Mr. Stonehouse: Additional equipment is being installed in the trunk exchanges in Edinburgh and Glasgow. The congestion is in these exchanges rather than on telephone lines between London and Scotland.
    Mr. Taylor: Does the Postmaster-General realise that the present congestion is intolerable and is causing serious inconvenience to business? Can he give an estimate of the number of subscribers during one day who are linked to a voice saying, "The lines to Glasgow are engaged. Please try later"?
    Mr. Stonehouse: I cannot say offhand. What I can tell the hon. Gentleman is that the extension at Edinburgh should have been completed in March, 1968, and the one at Glasgow in June, 1968. The contractor was unable to complete his programme by the due date, so unfortunately we have not been able to bring the equipment into use earlier.

    Glasgow
    Mr. Edward M. Taylorasked the Postmaster-General what is the present waiting list for telephones in Glasgow; and what were the comparable figures on the same date in each of the previous three years.
    Mr. Stonehouse: At 31st January, 1969—2,372. On the same date in the three previous years the list was 17, 891 and 604, respectively.
    Mr. Taylor: Can the Postmaster-General give a reason for the increase, bearing in mind the substantial number of people who are having their telephones disconnected because of the increased charges?
    Mr. Stonehouse: The reason for the increase in the waiting list in Glasgow is that under this Administration standards are rising enormously in Scotland and there is, therefore, a growing demand for the telephone, which we are very glad to see. Out of the 2,372 to which

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    I referred, nearly 2,000 will have telephones connected within the next two months. This is a very good result.

    Dial-a-Disc Service
    Mr. Scott-Hopkinsasked the Postmaster-General (1) if he will issue instructions to stop the Dial-a-Disc service in rural areas;
    (2) if he will take steps to stop the Dial-a-Disc service on the Chesterfield Exchange coming from the rural areas served by that exchange, owing to the increasing difficulties experienced by residents in small rural communities in obtaining a line between 6 p.m. and midnight.
    Mr. Stonehouse: No, Sir. Dial-a-Disc service is only provided where I am satisfied that it will not prejudice other telephone calls. It is popular with many telephone users and the additional revenue helps to offset the loss of unremunerative services, such as rural kiosks.
    Mr. Scott-Hopkins: Is the right hon. Gentleman aware that because of the popularity of the service in the country areas many cases have been reported to me of the public not being able to have access to the public telephone—often just a single booth in a rural area—between 4 p.m. and midnight in the warmer months?
    Mr. Stonehouse: This has been brought to my attention by the Derbyshire Association of Parish Councils. I have investigated it, but I do not think that the matter is as serious as has been suggested, However, I shall continue to keep the question under review.

    Winchester
    Rear-Admiral Morgan Gilesasked the Postmaster-General what is the average delay in providing additional telephone connections in the Winchester Exchange; and how this compares with the average throughout the country.
    Mr. Stonehouse: Thirty per cent. of all requests for telephones in Winchester are at present met on demand. For the rest there is an average delay of 7½ months. The comparable national figures are 86 per cent. on demand and an average delay of six months for those on the waiting list.
    Rear-Admiral Morgan Giles: Will the right hon. Gentleman put more effort into providing more telephones promptly and less into advertising to try to persuade the public to use facilities that they cannot obtain?
    Mr. Stonehouse: There are only 611 people on the waiting list in Winchester, and as soon as the extensions to the Winchester Exchange are completed they will have connections. The extensions are being delayed because the industry could not provide the equipment required.

    County Down
    Mr. Currieasked the Postmaster-General how many existing telephone subscribers in County Down are being required to surrender existing telephone lines in order to be put on shared lines.
    Mr. Stonehouse: One hundred and seven.
    Mr. Currie: A month ago I wrote to the right hon. Gentleman about a person in Bangor who had been a subscriber for a number of years and had received a letter threatening that he would be cut off from the telephone service unless he agreed to share a party line. Does not the right thon. Gentleman agree that that is scandalous conduct? What steps will will he take to see that it does not occur again?
    Mr. Stonehouse: I well remember the case, which I considered very carefully. But to ensure that as many of our potential subscribers as possible are linked to the system, we have to insist on shared lines.
    Mr. Currieasked the Postmaster-General how many applications have been made for connection to the telephone system in County Down during the past 12 months.
    Mr. Stonehouse: A total of 6,581.
    Mr. Currie: How many of these applicants have already been connected to the service? What will be the waiting period for those who have not yet been connected?
    Mr. Stonehouse: There are 390 waiting for connection. I hope that they will be cleared very soon.
    Captain Orr: What progress is being made with the technical possibilities of providing shared lines without either subscriber interfering with the other?
    Mr. Stonehouse: Investigations are still continuing.

    Directories (Classified Yellow Pages)
    Mr. Harry Howarthasked the Postmaster-General why his Department advertised the fact that there are yellow pages in a telephone book; how many of the cards with this advertisement have been printed; and at what cost to public funds.
    Mr. Stonehouse: A total of 145,000 leaflets costing £3,500 are being distributed to tell our customers how the new classified yellow pages can help them make the best use of their telephones.
    Mr. Howarth: Is my right hon. Friend aware that people resent having their attention drawn to the fact that there are yellow pages in a telephone book when they can clearly see that there are, and do not particularly want to be advised how to find a Turkish bath or a detective agency, especially when in my constituency, under the heading "Political Organisations" in the yellow pages, there is no reference to the Wellingborough Conservative Association or the Labour Party?
    Mr. Stonehouse: I apologise for that very sad omission and will see that it is put right. But the yellow pages are a very important improvement in the publicity in which we are engaging on the use of the phone. They will ensure that the system's use is improved and thus its efficiency.

  POST OFFICE

    New Housing Projects
    Mr. Ogdenasked the Postmaster-General if he is satisfied with the cooperation between local authorities and his Department in the planning and construction of new housing projects; and if he will make a statement.
    Mr. Stonehouse: Yes, Sir. Co-operation with all types of authorities is good. Through a variety of means we draw
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    attention to the need for early consultation with us on new projects.
    Mr. Ogden: Is not my right hon. Friend aware that on the Cantril Farm Estate in the City of Liverpool subscribers who moved into new homes less than three years ago have been asked to share party lines? This is in new areas, and in certain areas the planning is not as good as it should be or as it might be.
    Mr. Stonehouse: I am aware of the Cantril Farm Estate and that a large number of phone connections have been arranged on that estate. Generally in the interests of providing the widest possible number of connections we have to arrange a shared service.

    Cheltenham (Forms)
    Mr. Dodds-Parkerasked the Postmaster-General whether he will ensure that there are adequate supplies of all Post Office forms in the Cheltenham area, including driving licence application forms and premium bond application forms.
    Mr. Stonehouse: I regret the inconvenience caused by a shortage of supplies of these two forms. Sufficient forms are now available.
    Mr. Dodds-Parker: Will the Postmaster-General ensure that in future when there is a shortage of these forms the public-spirited in Cheltenham will not be penalised?
    Mr. Stonehouse: I will do my best to do that.

    Post Office Workers' Strike (Cost)
    Mr. Stratton Millsasked the Postmaster-General what was the exact cost incurred by the Post Office as a result of the trike by Post Office workers on Thursday, 30th January; and if he will indicate how this figure is arrived at.
    Mr. Stonehouse: The cost of the one-day strike cannot be separately identified.
    Mr. Stratton Mills: Is it not clear that the dispute was badly handled and resulted in a great deal of inconvenience and expense to the public? Will the right hon. Gentleman settle one point? Did he make clear to Lord Shackleton and other Ministers that the Government's original proposals would result in

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    a decrease in the take-home pay of the overseas telegraph operators?
    Mr. Storehouse: That is a wide supplementary question, very much wider than the original Question, and I do not intend to be drawn on it.
    Mr. Arthur Lewis: In the light of my right hon. Friend's first reply, if he now says that the figure cannot be given, can he explain why I was told that it cost £2 million?
    Mr. Stonehouse: My hon. Friend's Question on 13th February asked me to give an exact figure for the all-inclusive cost to the Post Office of the recent strike, not just the one-day strike. I gave him a minimum estimate, not an exact figure, of £2 million, and I adhere to that. It was for the whole dispute, not for the one-day strike.

    Postal Workers (Overtime)
    Mr. Stratton Millsasked the Postmaster-General what was the total overtime worked by postal workers in December, 1968, and January, 1969,- compared with December, 1967, and January, 1968; and how the total volume of mail compares in this period.
    Mr. Stonehouse: Total overtime in December, 1968, and January, 1969, was 10·8 million hours compared to 121 million hours during the same period a year earlier—a reduction of 10·7 per cent. The volume of mail posted during the same period fell by 6·7 per cent.
    Mr. Stratton Mills: The trend of those figures, in line with the Postmaster-General's estimate on 23rd January last, is to be welcomed, but may we have additional information on how the right hon. Gentleman expects the figures to go over the next few months?
    Mr. Stonehouse: I thank the hon. Gentleman for his remark, but I cannot give an exact figure. We are achieving fairly good results in the reduction of excessive hours, and we hope that these will be continued.

    Profitability
    Mr. Kenneth Bakerasked the Postmaster-General what will be the effect of the postal strike and the decline in the use of the postal services on the profita-
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    bility of the General Post Office in the financial year 1968–69.
    Mr. Stonehouse: The strike cost at least £2 million. I estimate the drop in traffic overall against last year at 1 per cent., which means a reduction of net income of at least £3 million on a total postal income of £380 million. The total effect will, therefore, be between £5 million and £6 million.
    Mr. Baker: Does the right hon. Gentleman agree that the Answer he has given shows that the profits of the postal side and the telephone service will come under increasing pressure in 1969 and 1970, and could he give an undertaking, therefore, that profitability will be restored not by increasing charges to the public but by savings in operating costs?
    Mr. Stonehouse: We are doing our best to reduce costs all the time, and efficiency is being improved. For example, we have a new programme of development which will decrease manpower costs. In answer to another Question, I have a statement to make about increased charges in the next financial year.

    Second-class Letter Post
    Mr. Joplingasked the Postmaster-General what progress he is making in improving the efficiency of the second-class letter post.
    Mr. Stonehouse: Ninety-four per cent. of second-class mail is being delivered by two days after posting. This is well above target.
    Mr. Jopling: There is still a large volume of protest in the country at the inefficiency of the system. Is not the Postmaster-General thoroughly dissatisfied about the feeling in the country that the postal service has "gone to the dogs" over the past year?
    Mr. Stonehouse: In this respect, Westmorland is well behind the rest of the country because of the mileages involved, but more and more people are appreciating the efficiency of the postal service, and two-tier in particular, because we are demonstrating that about 94 per cent. of second-class mail—the subject of the Question—can be delivered within two days and many of it on the day after posting. This is a very good result. It

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    is about time that certain hon. Members opposite stopped slamming the postal service, which is the best in the world.
    Mr. Dobson: Is not my right hon. Friend astonished at the attitude of hon. Members opposite on this question? Can he bring them to understand once and for all that the second-class service means delivery on the second day after posting, or even the first day, and not the next day delivery which is the 5d. first-class service?
    Mr. Storehouse: Yes; we have made clear that, if the poster gives priority by putting a first-class stamp on the envelope, we do our best to deliver the next day, and we are achieving that with approximately 95 per cent. of all such mail received into our hands. We give less priority to second-class mail, which means that 94 per cent. of it is delivered by the day following the delivery day of first-class mail. This is an extremely good arrangement which enables the customer to give the priority which he chooses.
    Mr. Bryan: Is the right hon. Gentleman aware that his counterpart in another place said that it is not so much a question of the Post Office improving the system as of the users using it properly? What did his counterpart mean by that?
    Mr. Stonehouse: We are experiencing a very intelligent use of the system. The proportion of first-class mail is working out much as we expected because the public are making intelligent use of the service.

    Special Postmarks (Isle of Sheppey)
    Mr. Bostonasked the Postmaster-General if he will state the periods in which special postmarks have, with his permission, been used with slogans indicating the attractions of the Isle of Sheppey for holiday, residential and industrial purposes.
    Mr. Stonehouse: These postmark slogans were used at Sheerness from August, 1963 to August, 1968, and they are being used at Ilford and Barking throughout 1969.
    Mr. Boston: Will my right hon. Friend accept that his highly satisfactory reply shows how absurd was the claim made in another place by a former chairman
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    of Essex County Council that this slogan was being used as part of the campaign to keep the third London Airport away from the Isle of Sheppey, especially as the slogan was in use for five years before the Commission of Inquiry into the third London Airport was announced?
    Mr. Stonehouse: I am grateful for what my hon. Friend has said, and I congratulate him on his ingenuity in bringing out a lot of other things.
    Mr. Ian Gilmour: Does the right hon. Gentleman think that the last few weeks gave the best moment to have a stamp about the QE2?
    Mr. Stonehouse: Yes, I think that it was. This is another question, but it was important to have the series of ship stamps coming out when they did.

    Report and Accounts
    Mr. Kenneth Bakerasked the Postmaster-General when he expects to lay before the House of Commons the Post Office Report and Accounts for the year 1968–69.
    Mr. Stonehouse: As soon as possible before December, 1969.
    Mr. Baker: If the right hon. Gentleman happens to be responsible for the Post Office when these Accounts are ready, could he table them for discussion in the House? Hon. Members have never discussed them in the history of the Post Office, and this is the only occasion on which the House could discuss the Accounts and accountability of the Post Office.
    Mr. Stonehouse: I will consider that suggestion. I want to bring the Accounts to the House as soon as I can.

    Telegrams
    Mr. Kenneth Lewisasked the Postmaster-General what action he proposes to take to improve the delivery of telegrams.
    Mr. Stonehouse: The delivery of telegrams is generally satisfactory.
    Mr. Lewis: Is the right hon. Gentleman aware that telegrams to patients on the waiting list for beds at some London hospitals are being delayed for 24 hours

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    or more, and are being misdirected? This means that a patient, who may have been on the waiting list for many months—some of them have been waiting for a year or more—does not come in for the bed. It then goes to another patient, so that he misses his place in the queue. This is very serious.
    Mr. Stonehouse: I should like to have examples brought to my attention. My information on the average performance is that telegrams are delivered within the hour if delivered by hand, and within half an hour if delivered by telephone. This is a very good performance. If there are cases where we are falling short, I should very much like to know of them.

    Research and Development
    Mr. Hoosonasked the Postmaster-General what is the total expenditure by his Department on research and development projects within the United Kingdom; and what part of this sum is spent on research and development within Wales.
    Mr. Stonehouse: Current expenditure this year on research and development is about £9 million. Of this, about £100,000 per annum is spent in Wales and Monmouthshire.
    Mr. Hooson: Is the right hon. Gentleman aware that there is great discontent about this proportion in Wales, because the range of jobs open to certain skills in research and development appears not to be available to young people in Wales?
    Mr. Stonehouse: I shall bear that in mind, but the House must remember that the Post Office has a responsibility to conduct its affairs efficiently, and the concentration of research and development is one way to secure that it is done efficiently.

    Special Stamps (Relief Projects)
    Mr. Juddasked the Postmaster-General what representations he has received on the possibility of raising funds for relief projects at home and abroad by the sale of postage stamps; what replies he has sent; and whether he will make a statement.
    Mr. Stonehouse: During 1968 I received 13 such proposals but I have no authority to implement them.
    Mr. Judd: Will my right hon. Friend at least agree to enter into discussions with leading charitable organisations about the possibility of such schemes, which work very well in other European countries?
    Mr. Stonehouse: We shall consider any sensible suggestion put to us, but a new Bill would have to be passed by the House before I had authority to introduce such stamps.
    Mr. Tinn: Is my right hon. Friend aware that such a Bill would receive a warmer welcome from many of us than some that have been introduced?
    Mr. Stonehouse: I thank my hon. Friend for that observation.

    Postage Rates
    Mr. Ian Gilmourasked the Postmaster-General what increases will be required in postage rates during 1969 resulting from the fall in revenue following the introduction of the 2-tier post.
    Mr. Stonehouse: I have none in mind
    Mr. Gilmour: While I welcome that assurance, if it is one—and it will not be forgotten—may I ask the right hon. Gentleman to undertake that no increase in the price will be made as a result of a decline in the standard of service?
    Mr. Stonehouse: I am not proposing in any way to reduce the standard of service, of which we are rightly proud I do not think that the two-tier system has been a financial failure. What happened is that, particularly during the Christmas period, traffic dropped rather more than we expected. I hope that we can make this up before the end of the year.
    Sir A. V. Harvey: Can the right hon. Gentleman given an assurance that there will be no general increase in Post Office charges before the General Election?
    Mr. Stonehouse: What I have been asked and what I have said is that there will be no increase in postage rates during the next financial year.

    Letters (Delivery)
    Mr. Goodhartasked the Postmaster-General how many representations his department has received about the slow delivery of letters with a 4d. stamp; and what reply he has made.
    Mr. Stonehouse: Some thousands over five months, but few in relation to 23 million second-class letters delivered daily—94 per cent. of them within two days of posting. The reply to each complaint depends on our findings.
    Mr. Goodhart: Is the right hon. Gentleman aware that, during the past six months, I have received more complaints about slow delivery of mail than in the previous 10 years?
    Mr. Stonehouse: There has been a lot of publicity about slow delivery but we are achieving extremely good results. I think that the vast majority of people understand and appreciate that our postal service is achieving better results than any other Post Office administration in the world.

  WIRELESS AND TELEVISION

    Colour Television
    Mr. Gwilym Robertsasked the Postmaster-General what time scale he has laid down for the extension of colour television to all television channels and to all parts of Great Britain; for how many hours colour television is to be available on each of the channels in 1970, 1971, and 1972; if, in view of the increasing numbers of shift workers and the tendency for people to keep later hours, he will in the near future allow 24-hour radio and television; and if he will make a statement.
    Mr. Stonehouse: Colour television will be extended to B.B.C.1 and I.T.A. within the next 12 months on 625 lines. It will be available to 50 per cent. of the population initially, rising to 75 per cent. by the end of 1971.
    Mr. Roberts: In view of the increasing nocturnal habits of the population, in both work and play, is not there a need for an urgent move towards something approaching 24-hour radio and television? Does not my right hon. Friend accept that the recent suggestion of
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    some contraction in the radio service is intolerable?
    Mr. Stonehouse: There is another Question on the radio service. On T.V. viewing hours I have expressed the thought that there are very substantial arguments for the extension of hours and the whole question is now under active consideration.
    Mr. Bryan: Does the Postmaster-General recall that this is exactly what he said in Manchester on 16th December and that on that occasion he said that it was cost alone that prevented these extra hours? As I.T.V. is willing to give more hours at no cost to the public and with monetary gain to the Government, can he tell us now what he meant?
    Mr. Stonehouse: The hon. Gentleman is speaking with great experience as a director of Granada. I must tell him, however, that there is no question of there being no cost to the public in commercial T.V. The public has to pay through the cost of the adverts. I ask the hon. Gentleman to bear that in mind. There is a case for considering the extension of viewing hours, and I am now considering it.

    International Sporting Events
    Mr. Dalyellasked the Postmaster-General if he will seek powers to allocate the television rights of international sporting events to the British Broadcasting Corporation and the Independent Television Authority.
    Mr. Stonehouse: No, Sir.
    Mr. Dalyell: What will be the position of the B.B.C. in the televising of the World Cup series? In particular, will it be possible for B.B.C. black-and-white television and colour television to carry this feature?
    Mr. Stonehouse: There is a pretty hot dispute building up about this, and I do not think that I should be drawn into it.
    Sir J. Langford-Holt: Does the Postmaster-General realise that what the British public want is to be able to see the World Cup series on one channel, and it does not help them greatly to know that they can see it on two channels if they have only one set?
    Mr. Stonehouse: There is a great deal in that.

    Arabic, Hebrew and Welsh Broadcasts
    Mr. Gwynfor Evansasked the Postmaster General how many hours weekly the British Broadcasting Corporation broadcasts in Arabic, Hebrew and Welsh.
    Mr. Stonehouse: Arabic, 70 hours in the External Services; Hebrew nil, Welsh 19 hours in the Home Service.
    Mr. Evans: Is the right hon. Gentleman aware that the first duty of the B.B.C. is to use languages spoken in the countries of the United Kingdom? There is great resentment in Wales that the Government spend so much money subsidising services in foreign languages, at a time when the ancient language of the Welsh nation gets such a raw deal on the mass media.
    Mr. Stonehouse: The hon. Gentleman is making a very narrow political point. The External Services are designed for British external relations, and should not be confused with the Home Service. The number of Welsh hours, at 19, is a very fair proportion.
    Mr Henig: Given the object of improving external relations through the B.B.C.'s external services, is not it rather surprising that the Hebrew service, which was most successful, has been closed down? Has the right hon. Gentleman anything to say about that?
    Mr. Stonehouse: I will draw the question to the attention of those concerned.

    Regional Programmes and Radio 3
    Mr. Bostonasked the Postmaster-General if he will make a statement about the British Broadcasting Corporation's plans for reorganising the location of transmitters and, in particular, the effect of this reorganisation on regional programmes and Radio 3.
    Mr. Peter Millsasked the Postmaster-General what proposals he has received from the British Broadcasting Corporation regarding the curtailment of regional broadcasting stations; and if he will decline to give his consent to the closure of such stations, especially those in the south-west region of England.
    Mr. Stonehouse: No such proposals or plans have been made to me. It is a matter for the B.B.C. whether it should review its regional and national programme activities.
    Mr Boston: Does my right hon. Friend appreciate that there is very serious concern about persistent reports that Radio 3, the Third Programme and music programme, is likely to be curtailed or closed down? In view of its immense value to many people throughout the country and its high international reputation, will he confirm that there is no intention to curtail or close the programme?
    Mr. Stonehouse: I cannot say that, because I understand that the B.B.C. is conducting a review of its efficiency and is not yet in a position to make an announcement of the result. I am sure that it will bear in mind the observations made in the House.
    Mr. Gilmour: Would it not be far more sensible if the B.B.C, instead of closing down or curtailing things, such as Radio 3 or regional programmes, were to stop doing things, such as municipal radio, which could be much better done by other people?
    Mr. Stonehouse: The trouble with municipal radio proposals is that municipal authorities promoting them want to pay for them by advertising, and I think that this would introduce a reprehensible feature into broadcasting in this country.
    Dr. John Dunwoody: There is great concern in the regions about the rumours that regional services are to go or to be reduced. At a time when we are trying to decentralise many activities, is it not illogical that such suggestions should be put forward?
    Mr. Stonehouse: I am sure that the B.B.C. will pay close attention to the observations made in the House.

    B.B.C.2 and Colour Television (Devon)
    Mr. Emeryasked the Postmaster-General what steps he has taken to speed up the reception of B.B.C.2 and colour television in Devon.
    Mr. Stonehouse: The extension of these services is primarily a matter for

    1913
    the B.B.C. The overall plan for B.B.C.2, including three main stations to serve Devon, is going ahead as fast as possible.
    Mr. Emery: Does the right hon. Gentleman realise that Devon will be the last large area in the country to receive B.B.C.2 and colour television? Is he aware that most of my constituents object strongly to having to pay the same licence fee for a much depleted service?
    Mr. Stonehouse: I do not agree. The plan is for Caradon Hill to start in spring, 1969, and two more stations are due, one in late 1971 and the other, including Torquay, in 1973.

    Bristol
    Mr. Ellisasked the Postmaster-General if he is satisfied with the efficiency of the telephone service available in Bristol, as compared with other large cities; and if he will make a statement.
    Mr. Stonehouse: The operator service in Bristol compares favourably with that in other large provincial cities but the automatic telephone service showed signs of worsening during the last few months of 1968. When our checks indicated this trend, special measures were initiated and an improvement is already apparent.
    Mr. Ellis: Will my right hon. Friend make the facts and details available? This is in no way a criticism but at least we should like to know how the service compares at any given time in cases like misdialling percentages, the frequency of overloaded lines, and so forth, so that we could make a realistic assessment?
    Mr. Stonehouse: The results achieved so far are good. At the moment, the success rate for local calls is 97 per cent. and it is 89 per cent. for S.T.D. calls. That is a good achievement.

    Communal Aerials (Licences)
    Mr. Leadbitterasked the Postmaster-General what representations he has received regarding separate licences for communal aerials; and what reply he has given.
    Mr. Stonehouse: From the Association of Municipal Corporations and the Rural District Councils' Association. I have undertaken to consult with them.
    Mr. Leadbitter: I thank my right hon. Friend for indicating that he is prepared to consult them, but, before he carries out these consultations, will he bear in mind that there are serious objections in the country? Could he have the cause of the objections worked out in such a way that, when he meets the authorities, he may have some proposals to resolve the extent of the objections which hon. Members have been receiving?
    Mr. Stonehouse: I will consider that very helpful suggestion.

    Television Licence Evasion
    Mr. Arthur Lewisasked the Postmaster-General whether he will make a statement giving particulars of the results of his campaign against television licence evasion, giving figures of prosecutions and increased revenue as a result of this campaign up until the latest convenient stated date.
    Mr. Stonehouse: Since January, 1967, evaders have been reduced by over three-quarters of a million. The increase in revenue from this has been about £8 million during the ensuing two-year period. In the year ending 31st March, 1968, there were 28,790 prosecutions.
    Mr. Lewis: I congratulate my right hon. Friend on these excellent figures. Will he have a word with the Minister of Transport so that he, too, can draw in a few more hundreds of millions of £s by copying his example in cutting down the number of road tax evaders?
    Mr. Stonehouse: I thank my hon. Friend for his observations.

  CHANCELLOR OF THE EXCHEQUER (SPEECH)
  Mr. Ridleyasked the Prime Minister whether the Chancellor of the Exchequer's public speech to the Overseas Bankers Club in London on Government borrowing on 3rd February, 1969, represents Government policy.
  The Prime Minister (Mr. Harold Wilson): Yes, Sir.
  Mr. Ridley: Is the Prime Minister aware that the Chancellor said that there would be no borrowing by the Government either this year or next financial

  1915
  year? Is he satisfied with a position where some £2,000 million of capital expenditure in the public sector is to be placed on taxation instead of being borrowed from the public? Surely this is wrong.
  The Prime Minister: It would not be appropriate for me at this stage, so close to the Budget, to comment on any of the questions raised by the hon. Gentleman.
  Mr. Dickens: What estimate has my right hon. Friend made of the effect on the level of unemployment of today's increase in Bank Rate to 8 per cent.? Bearing in mind that British Bank Rate is on average 2 per cent. higher than the bank rates in other financial centres, should not my right hon. Friend take steps to stop the City of London being used as a centre for attracting short-term capital movements?
  The Prime Minister: My hon. Friend will no doubt be aware of the improvement in the seasonally corrected figures of wholly unemployed since August of between 90,000 and 100,000.
  The statement issued today in relation to Bank Rate is relevant to both parts of my hon. Friend's supplementary question, and I refer him to it. The statement points out that the increase in Bank Rate is not related to foreign exchange questions as such but to the fact that the Chancellor's target of 98 per cent. for bank lending has, as will be seen from the figures now being published, been seriously exceeded, and therefore the increase is necessary for internal purposes.
  My hon. Friend referred to international interest rates. He will recognise that the Euro-dollar three-month rate is 8·1 per cent., while American Treasury bills, having been raised one point, now stand at 61 per cent. Therefore, the British Bank Rate of 7 per cent. was different in relative values from what it was on previous occasions.
  Mr. Heath: Will not the increase in Bank Rate today also put a heavy additinal burden on the Exchequer for the cost of existing Government borrowing at home and overseas? Will the right hon. Gentleman confirm that, under his Administration, Bank Rate has stood at 7 per cent. or above for a longer period than at any time since the Bank of England was set up in 1694? Is the
  1916
  Prime Minister not really saying that the reason for this is, first, the attraction of the Euro-dollar market and its rates, which, under this Goverment, the Bank of England reserves cannot stand, and, secondly, the failure of the Government's economic policy, which is squeezing the private sector into bankruptcy?
  Surely the answer to the situation is to accept that, however the Government do it, there must overall be a further reduction in Government expenditure.
  The Prime Minister: I have not been back to 1694 but I readily concede that, in recent memory, this is the longest period for a 7 per cent. Bank Rate or above. But this, of course, is related very much to international Treasury bill rates. For example, when Bank Rate was 5 per cent. under the right hon. Gentleman in 1964, the United States Treasury bill rate was 3·5 per cent. It is now 6·1 per cent., which of course is the wrong relativity for British Bank Rate. We do not control the United States Treasury bill rate or the Euro-dollar rate.
  The right hon. Gentleman suggests that we are pushing the private sector into bankruptcy. Obviously, he has not been studying the recent figures of profits of the whole of the private sector, which have risen very considerably indeed. I would remind him that many of the companies are so prosperous and profitable that they are able, for whatever reasons seem good to them, to send large donations to his party.
  Mr. Heath: The Prime Minister must be aware that the reason why the clearing banks have not been able to carry out the Chancellor's directions, and reduce to 98 per cent. is that they know that they are bound, in so doing, to drive very large numbers of small firms, many of them important for the exports of this country, into bankruptcy.
  The Prime Minister: The right hon. Gentleman equally well knows that there is no difficulty about finding finance for exports—
  Hon. Members: Oh.
  The Prime Minister:—and that, unlike the period when he was President of the Board of Trade, we have persuaded the banks to offer at long and medium term, for some years ahead, a very favourable

  1917
  rate of interest lending to the export firms. This is no reason why, with present money rates in Britain and all over the world, we should put private borrowers on overdraft, much of that even for speculative purposes on the Stock Exchange and elsewhere—[Interruption.]—rather than out of their private income. The right hon. Gentleman knows that it is possible to borrow money which at present is relatively cheap compared with the situation abroad.
  Mr. Michael Foot: Is my right hon. Friend aware that on this side of the House we are much more concerned about the high level of unemployment than about the nonsense of squeezing the private sector into bankruptcy? [Interruption.] While we certainly welcome the fact that there has been a fall in the unemployment levels over recent months, and that the worst prophecies have not been fulfilled, will my right hon. Friend recognise that the figure from which the fall has taken place was very high indeed? Will he agree that the level of unemployment has been much too high for much too long and will he now, in answer to my hon. Friend the Member for Lewisham, West (Mr. Dickens), say what is the Government's calculation of the effect of these latest measures upon the level of unemployment?
  The Prime Minister: With regard to the first point, what we are concerned about on this side of the House—and, I think, on all sides of the House—is sufficiently to squeeze excessive production consumption in the home market to get a much bigger increase in exports. [Interruption.] The right hon. Gentleman the Leader of the Opposition has found his voice at last—I have been trying to get him up for three weeks—on something other than the Tate Gallery. I know that the right hon. Gentleman is concerned about that. He might take a little time off, after all his gloomy speeches, to say something about the increases in exports brought about by the private lending squeeze. With regard to the estimates of future unemployment, it is not possible to give a figure here—
  Hon. Members: Oh.
  The Prime Minister: The last distinguished figure to make an estimate on future unemployment was the right hon. Gentleman who said it would be, not
  1918
  might be, 750,000 last winter. In fact the February figure was under 600,000.
  Mr. Boyd-Carpenter: Is it not a fact that the clearing bankers warned the Chancellor at the time that the 98 per cent. target was wholly impracticable? Is not the present situation, therefore, the fault of the Government in persisting in trying to operate it this way instead of encouraging the public sector.
  The Prime Minister: We have not yet had from right hon. Gentlemen opposite what are their proposals for reducing—[Interruption.] It is very easy to have slogans about Government expenditure—[Interruption.] If I am asked about public expenditure, it is easy to have these slogans. All we have had from the right hon. Gentleman was a cut in development area expenditure and an increase in food prices. The banks made it clear that it would be difficult; they did not make it clear that it would be impossible. When the right hon. Gentleman sees the figures, and they will be published either today or tomorrow, he will feel that the rise in lending to the private sector has been excessive, even compared with those warnings.
  Mr. Barnett: Is it not clear that this increase in Bank Rate has been caused by the central bankers refusing to comply with the requests of my right hon. Friend the Chancellor? Does it mean that we are to accept that the central bankers can dictate to the Government the economic policy they should pursue or are we now to leave the central bankers at their present bank lending level?
  The Prime Minister: I think, from what my hon. Friend says, that he was referring to the joint stock banks, not the central bankers abroad. It is certainly the case that they have not got down to the 98 per cent. target and there has been an increase. I would refer my hon. Friend on all the points he has raised to the statement made by the Bank of England today about the increase in Bank Rate.
  Mr. Iain Macleod: Does the right hon. Gentleman recall that only yesterday the First Secretary of State, at that Box, was painting the clouds with sunshine and giving us an account of how things were going so well in the economy? Does he not realise that for about the fiftieth time

  1919
  this has been followed by a disastrous announcement on behalf of the Government? Would he please try to coordinate, to get some little consistency between Her Majesty's Economic Ministers on the prospects for this country?
  The Prime Minister: The right hon. Gentleman, who claims to speak with authority on financial matters, will know that it would be impossible for any Government to ignore the movement of overseas international interest rates. The right hon. Gentleman, who likes to blame everything on us, will hardly think that we are responsible for a rate of 61 per cent. in the United States. If, by any mischance, he becomes Chancellor of the Exchequer, he would have to deal with this. With regard to the statements of my right hon. Friend yesterday, all were justified. I remember the right hon. Gentleman, after eight years in office as Minister of Labour, boasting of the fact that unemployment would not rise above 650,000—after eight years in office!
  Mr. Heffer: Would my right hon. Friend agree that every time there is an increase in Bank Rate this has a very serious effect on the employment of building trade workers? Will he further agree that the level of unemployment is still much too high and that the time has come to operate a different interest rate for the building of houses and so on, as we promised in our Labour Party manifesto?
  The Prime Minister: My hon. Friend will be aware that unemployment has fallen very considerably. I certainly agree with him that unemployment has, over a considerable period now, been too high. With regard to mortgage rates, he will be aware of the legislation passed by this House on option mortgage rates. He will also be aware of the sharp fall in unemployment in the development areas—which the Leader of the Opposition's policy would have made impossible, through cutting expenditure on investment grants.
  Mr. Grimond: Will the right hon. Gentleman confirm, contrary to some opinions expressed, that medium and small firms in the private sector give considerable employment, sometimes in areas where it would be difficult to find any alternative? While it may be
  1920
  necessary to impose squeezes, there is no doubt that they fall unduly hardly on these small firms. Would he look into the possibility of varying these methods so as to reduce the burden on these firms?
  The Prime Minister: The right hon. Gentleman will be aware that many studies have been made, suggesting that the effect of interest rates on industrial productivity and employment facilities is not quite so great as has been thought in the past. He will also know that in the kind of areas that he has in mind, the development areas, there has been a very remarkable improvement in the position. He will know that under this Government, we are now spending—and this helps a lot of small firms, many of them exporting firms—in the development areas at the rate of £260 million a year, as against about £18 million a year under the party opposite.
  Sir C. Osborne: The Prime Minister will remember that the Chancellor of the Exchequer said that in 1967–68 the Government had to borrow £1,300 million. For the next year he said that there should be no borrowing and that for the next year there would be a surplus. Does he stand by those two promises?
  The Prime Minister: Yes. I understand that my right hon. Friend still takes the view that the statement which he made in this speech was correct so far as that was concerned, and the hon. Gentleman will have noted the statement of my right hon. Friend a week ago today when he gave the figure of prospective Government expenditure for next year, which is one of the principal determinants of the borrowing figure.

QUESTION TO PRIME MINISTER
Mr. Arthur Lewis: On a point of order. May I draw your attention, Mr. Speaker, to Question No. Q3, to the Prime Minister? This Question has already been answered by an official statement on the B.B.C.'s one o'clock news, when full details were given. [Laughter.] This is no laughing matter. Hon. Members may laugh, but—
Mr. Speaker: Order. I want to hear the point of order.
Mr. Lewis: The right of the hon. Member concerned, my hon. Friend the Member for Gravesend (Mr. Murray), to have the Question answered or postponed, has been circumvented. Is it not a grave discourtesy to my hon. Friend and the House, and a possible breach of privilege, that this official statement should have been given to the B.B.C. by the Prime Minister, or issued from his office, thus depriving an hon. Member of his right?
The Prime Minister (Mr. Harold Wilson): Further to that point of order. No statement has been made either to the B.B.C. or to the Press about the terms of the Answer that is being given. Nothing has been said—
Mr. Arthur Lewis: Where did the B.B.C. get it from?
The Prime Minister: Nothing has been said on this Answer either about my hope to visit Sweden or about the date on which I shall be visiting Sweden. This was speculation. [HON. MEMDERS: "You tell us."] I happen to know the facts—hon. Members may wish to rush into their own version—because my hon. Friend was courteous enough to give me notice of his point of order. I have found that there was some Press interest in this Question—
Mr. Arthur Lewis: Naturally.
The Prime Minister: Naturally.
The Press thought, incorrectly, that this is what is technically known as an arranged Question. My hon. Friend knows that it is not an arranged Question has been made that the Question an arranged Question. I have had to have some speedy discussions with the Swedish Government in order to be able to give an answer to my hon. Friend about the date. But no—[Interruption.]
Mr. Speaker: Order. We must hear the Prime Minister.
The Prime Minister: Since the suggestion has been made that the Question has been anticipated by a statement from my office, I repeat that that is not true. This was the result of speculation about the fact that the Question was on the Order Paper.
Several Hon. Members Several Hon. Members rose—
Mr. Speaker: Order. I cannot call about six hon. Members to a point of order simultaneously. Mr. Thorpe.
Mr. Arthur Lewis: Further to the point of order.
Mr. Speaker: Order. The hon. Member for West Ham, North (Mr. Arthur Lewis) has no prescriptive right to address the House.
Mr. Thorpe Mr. Thorpe rose—
Mr. Arthur Lewis: On a point of order.
Mr. Speaker: Order. I must remind the hon. Gentleman that we are on the point of order which he began.
Mr. Thorpe: Further to the point of order. So that we can fully appreciate the Prime Minister's statement, can he tell us what an arranged Question is?
Mr. Arthur Lewis: May I apologise to the Prime Minister and say that I was not aware that this information did not come from No. 10 Downing Street? But as it was on the B.B.C, it sounded like an official statement. In view of the fact that it sounded like an official statement—and yesterday a Minister made a statement after it had been in the Press—will my right hon. Friend seek to discover how the B.B.C. got it from No. 10?
Mr. Murray Mr. Murray rose—
Sir D. Glover Sir D. Glover rose—
Mr. Speaker: Order. We have a lot of business ahead of us.
Mr. Murray: Further to that point of order.
Sir D. Glover Sir D. Glover rose—
Mr. Wyatt: Further to that point of order.
Mr. Speaker: Order. I must be serious for a moment. I can call only one Member at a time. The House is losing something. It must behave better.
Mr. Murray: Further to that point of order. I should point out that I am grateful for having so many friends at this time. The Question was not arranged. I am glad that my right hon. Friend the Prime Minister dealt with it so speedily when I put it down. It was not inspired, but it was, I hope, inspiring.
Sir D. Glover: Further to the point of order. If the Prime Minister is thinking of sending out an official message, will he make certain that he informs Chancellor Kiesinger and President de Gaulle first?
Mr. Speaker: Order. We are passing from the realms of points of order.
Mr. Wyatt: May I respectfully point out that, whereas the Bank Rate has gone up to 8 per cent., the rate of Answers given by the Prime Minister today has dropped to 5 per cent.?
Mr. Speaker: Order. The Chair judged the first question to be especially important, and therefore allowed a lot of supplementary questions.

PRIME MINISTER AND PRESIDENT NIXON (DISCUSSIONS)
The following Questions stood upon the Order Paper:
Mr. DALYELL: To ask the Prime Minister what replies he has received from President Nixon to his representations on the subject of the marine sciences and development of the ocean environment.
Mr. FRANK ALLAUN: To ask the Prime Minister if he will make a statement on his discussions with President Nixon.
Mr. MARTEN: To ask the Prime Minister if he will make a statement about his talks with President Nixon.
The Prime Minister (Mr. Harold Wilson): With permission, I will now answer Questions Nos. Q8, Q9 and Q10 together.
My discussions with President Nixon covered a broad range of issues, including not only the problems of immediate concern to our two countries both at home and abroad, but also wider world issues.
The object of the visit was not to propose new initiatives or to draw up new agreements. The achievement of the talks has, however, been to establish a close relationship as the basis for the fullest consultation between our two Governments.
I shall be placing in the Library the texts of the speeches made on the
1924
occasion of the President's arrival and departure.
Mr. Dalyell: On the limited issue of marine sciences and development, are not there two issues which deserve consideration at President and Prime Minister level: first, the placing of nuclear weapons, such as nuclear silos, on the North Atlantic ridge, about which the Prime Minister gave a very satisfactory Answer on Tuesday; and, secondly, the whole question of international machinery for the development of the seabed?
The Prime Minister: On the first part of my hon. Friend's supplementary question, the position of both Governments is exactly as I stated it on Tuesday.
On the question of international machinery for developing the seabed, we have made it clear in the United Nations—and my hon. Friend will have also seen the communiqué of the Commonwealth Prime Ministers' Conference—that, in our view, there is an area of the seabed lying beyond the limitation of national jurisdiction where a national régime is not possible. It is our view—and we are concerting discussions to this end—that an international régime governing the exploration and exploitation of that area is the right answer.
Mr. Allaun: Would the Prime Minister say something about his discussions on plans for an East-West peace summit and arms limitation, since these plans would raise the hopes of all mankind for its own survival?
The Prime Minister: We discussed this essential point. We both believe that the strengthening of N.A.T.O., the need for which has been underlined by recent events, must lead to an easement of tension between East and West, whether by multilateral or by a series of bilateral talks with them.
On disarmament, we discussed very fully the Non-Proliferation Treaty to which both Governments have made significant contributions. This is probably the most urgent matter in that sphere.
The third point which arises from my hon. Friend's question is the desire of the United States, with appropriate safeguards, to discuss with the Soviet Government the question of nuclear weapons

1925
control, anti-ballistic systems, and the rest.
Mr. Marten: Did the Prime Minister discuss with the President the French proposition for a wide European free trade area, which would probably be more acceptable to the British people than the Common Market and, incidentally, while we are on that, what are the Prime Minister's views about that proposition?
The Prime Minister: I have answered a number of questions about that. No, Sir, we did not have any serious discussion on the question of the French statement which the House debated the other day. It is the view of Her Majesty's Government that our application to join the Common Market should remain in, and that means having a Common Market to join, not dismantling it first.
Mr. James Griffiths: May I ask my right hon. Friend whether, during his talks with President Nixon, he had an opportunity to discuss the situation in Nigeria, particularly in view of the fact that a number of U.S. Congressmen have returned recently from Nigeria and were urging America to intervene to stop the war?
The Prime Minister: We had a brief discussion on Nigeria, but we have been in continuous touch with the President of the United States about this tragic war over a period of time.
I am certain that, if the President of the United States felt that a mediatory intervention by America would help to bring the war to an end, he would be ready to take the initiative, as we would, as the Commonwealth Prime Ministers would, or anyone who could influence the two sides. This tragic situation is not such that mediation of that kind would be likely to secure early results. This is also the view of the Secretary-General of the United Nations, with whom we have both been in touch.
Mr. Turton: In view of the report that President Nixon has invited the West German Government to bilateral monetary talks, and of the inter-dependence of sterling and dollars in the international monetary system, has the Prime Minister received a similar invitation?
The Prime Minister.The Prime Minister. We had a constructive, brief discussion on the international monetary situation. Both Governments axe in complete agreement. I can best summarise the agreement in terms of the recent statement made to the House by my right hon. Friend the Chancellor of the Exchequer, that we should continue to work bilaterally and through existing institutions for special drawing rights for what improvements can be achieved in the international monetary sphere.
It is certainly the intention—and this was arranged before the President's visit—that my right hon. Friend will be meeting at an appropriate time the Secretary for the Treasury in the United States. The same kind of bilateral meetings will, as I understand, take place between Germany and the United States, but within the general confines of the monetary policy which I have outlined.
Mr. Boston: Does my right hon. Friend agree that the recent statement by President Nixon about encouraging freer trade is very welcome? Will he say whether the President spelt out any specific proposals and what plans he has to follow them up?
The Prime Minister: I agree with my hon. Friend in welcoming what the President said about free trade. We all recognise the great difficulties he faces here, against the strong pressure of protectionism in the United States, and applaud his courage in making this statement at this time.
So far as the next steps on free trade are concerned, the first thing is to get full implementation of the forward steps that were agreed in the Kennedy Round under the auspices of G.A.T.T. They have not, for example, been given effect to in the United States legislature. We had better get this in the bag and firmly operating before there is talk of further initiatives for a Nixon Round or a second round of tariff reducing talks under G.A.T.T.
Mr. Hooson: Did the Prime Minister discuss with the President the strategic and military importance of the seabed as a possible base for missiles, and the urgent necessity for an international treaty to prevent this happening?
The Prime Minister: No, Sir, not in those terms. It was not possible to discuss everything that we would like to have discussed. The President was aware of the interest on this matter shown by the House as a result of the Questions on Tuesday. The answer I gave to my hon. Friend about missiles, and so on—expressing our support for the American initiatives to the 18-nation Disarmament Committee—represented the views of both Governments.
Mr. Barnes: Will the Prime Minister say what was said by official Government sources to the B.B.C. which made them feel it was necessary to make the statement they made about Mr. Dimbleby's reporting? Will not he agree that, if anything was said to make them feel that it was necessary, this perhaps shows an over-sensitivity which is not necessary?
The Prime Minister: Yes, Sir. I heard a number of sedentary remarks from the benches opposite. Now perhaps the House would like to hear the facts.
The approaches made on behalf of Her Majesty's Government to the B.B.C. in the light of these broadcasts were limited to two specific points. One was in view of the reports in the Press, that he had used words highly derogatory of defamatory, or apparently defamatory, of two public servants, not Ministers—it is nothing to do with Governments—two public servants who could not defend themselves.
A request was made for the script so that those words could be examined and any necessary action taken. That request was made through the normal channels of the B.B.C. simply to get the script so that it could be studied.
There was a further matter on which there was a mis-statement of fact and I will say what that is in a moment. Knowing the possibility was that this would be repeated and perhaps broadcast to America, the B.B.C. was given the true facts of the situation so that it could get the facts right on the second occasion.
There was no complaint; there was no protest. The words which the right hon. Gentleman shouted from a sedentary position did not form the subject of any comment between No. 10 or any Government Department and the B.B.C.
1928
With regard to the mis-statement of fact, there was a suggestion that I was unhappy about the President meeting Mr. Macmillan, of all things. In view of the fact that I had taken the initiative in asking the President to meet Conservative Leaders—unlike the veto on my meeting President Kennedy by the then Conservative Prime Minister—it was thought right that the facts should be stated and the B.B.C. left to make its own arrangements for any correction. We did not ask for an apology; it came on the initiative of the B.B.C. which had itself read the words.
Mr. Shinwell: On a point of order Will you, Mr. Speaker, tell the House how far this discussion can range, or is this is a private row in which we can all join?
Mr. Speaker: It seems to me that all are joining in.
Mr. St. John-Stevas: If I may move away from the question of the Prime Minister's amour propre to something more important, may I ask him to tell the House whether he discussed the reunification of Germany with President Nixon, and, if so, whether he can tell the House what conclusions were reached?
The Prime Minister: Since the hon Gentleman's question included the few words that he uttered before he moved away, if he heard my previous answer he would know that my concern with the B.B.C. had nothing to do with anybody's amour propre, but with the proper defence of two civil servants whose professional integrity had been impugned. Any other Government would have asked for the text in order to study it. It was not a question of amour propre, but correcting—[Interruption.]
Mr. Faulds: They do not know anything about amour—they have never had it.
Mr. Speaker: Order. These noisy exchanges do not do Parliament any good.
The Prime Minister: It was not a matter of the feelings of any individual, but to seek to make a correction of the appalling statement that Labour Ministers had behaved to the Conservatives as Conservative Ministers had behaved

1929
to Labour leaders when they were in office. That was properly corrected in relation to Mr. Macmillan.
As for the reunification of Germany, we discussed all aspects of the German problem, but that is a matter of permanent and standing agreement between the two Governments and, to that extent, therefore, it was not necessary to repeat it in our discussions.
Mr. Michael Foot: Returning to the question raised by my right hon. Friend the Member for Llanelly (Mr. James Griffiths) on the subject of Nigeria, bearing in mind that many of us believe that the Government have been right to seek to maintain as best they can their powers of representation with the Government in Nigeria, did my right hon. Friend discuss with President Nixon the possibility of making extremely urgent representations on the latest news that has come from Biafra about increasing evidence of indiscriminate bombing?
We know that Her Majesty's Government are bitterly opposed to this, but cannot this country, together with the United States, make urgent representations to the Government in Lagos on this as a matter of extreme importance?
The Prime Minister: On all these questions, the American Government and ourselves, together and separately, have put on all possible pressure against atrocities of any kind, whether done deliberately, about which we have strongly warned all concerned, or whether done as a result of the kind of warfare which is going on there. I have seen the newspaper reports referred to by my hon. Friend, and they must be taken very seriously.
We are making what inquiries we can, but international observers are not in Biafra to go and study on the ground what may have happened as a result of air raids. If we were to find that it was as the result of deliberate policy—and I do not for one moment believe that—if anything could be done to avoid accidental incidents of the kind reported, we would do everything in our power to bring it home to the persons responsible.
Several Hon. Members Several Hon. Members rose—
Mr. Speaker: Order. Mr. Heath. Business Question.
Mr. Winnick: On a point of order, Mr. Speaker. May I have your guidance? I thought that it was the custom, if an hon. Member had a Question on the Order Paper which was answered with other Questions, or even if it had not been answered but was related to an earlier Question, for Mr. Speaker to allow that hon. Member to put a supplementary Question.
Mr. Speaker: Order. The hon. Gentleman will remember that I have already ruled on late Questions. The Prime Minister answered three Questions. Obviously, I bore in mind the name of the hon. Member for Croydon, South (Mr. Winnick), who had a late Question down but I did not choose it.

BUSINESS OF THE HOUSE
Mr. Heath: May I ask the Leader of the House to state the business of the House for next week?
The Lord President of the Council and Leader of the House of Commons (Mr. Fred Peart): Yes, Sir. The business for next wek will be as follows:
MONDAY, 3RD MARCH —Motion on the White Paper "In Place of Strife", (Command No. 3888).
Remaining stages of the National Theatre Bill.
TUESDAY, 4TH MARCH —Motion on the Statement on Defence (Command No. 3927).
Motions on Town and Country Planning Orders.
WEDNESDAY, 5TH MARCH —Conclusion of the Debate on Defence.
Remaining stages of the Horserace Betting Levy Bill.
Motions on the Income Tax Transitional Relief (Extension of Period) Orders.
THURSDAY, 6TH MARCH —Motion on the White Paper on Proposals for Earnings-Related Social Security (Command No. 3883).
Motion on the International Development Association (Additional Payments) Order.
FRIDAY, 7TH MARCH —Private Members' Motions.
MONDAY, 10TH MARCH —Supply [10th Allotted Day]:
Navy Estimates, 1969–70, Vote A.
Mr. Heath: As to Thursday's business, on social security, can the right hon. Gentleman tell us what form the Government's Motion will take?
I note that Monday week's business is concerned with the Navy Estimates. There is an interval between the Defence debate and that on the Navy Estimates. Can the right hon. Gentleman ensure that the debates on the other Service Estimates are well spread out and do not occur on a series of days?
The right hon. Gentleman will have noted the intense interest of the House during Questions today in the implications of the increase in the Bank Rate. Can he assure us that the Government will provide time for a debate on the implications of this increase at the earliest opportunity, preferably the week after next?
Mr. Peart: On the right hon. Gentleman's first point, about the terms of the Motion for Thursday, I hope to have it tabled this evening. It will be similar to the one on the White Paper "In Place of Strife".
I will bear in mind the right hon. Gentleman's second question on the spacing of the debates on the Defence Votes.
I cannot promise a debate on the Bank Rate increase.
Mr. Heath: I want to press the right hon. Gentleman rather hard on the last point, on which it is apparent that there is intense interest in all quarters of the House. It is obviously a serious matter that, once again, the Bank Rate should be at 8 per cent. There have been discussions between the Prime Minister and the President of the United States about the international financial situation. There is every reason for the Government to provide at the earliest opportunity at least a day so that we can discuss it.
Mr. Peart: I note what the right hon. Gentleman says, but he will appreciate that I am pressed for time.
Several Hon. Members Several Hon. Members rose—
Mr. Speaker: Order. I would remind the House that the time spent on business questions is growing. We have an important debate ahead. I would urge hon. Members to show some voluntary rationing in questions.
Mr. Shinwell: I observe that the Leader of the House is not bringing forward the remaining stages of the Parliament (No. 2) Bill next week. Will he consult with his right hon. Friend the Prime Minister as to whether it would not be desirable, in all the circumstances, not to bring the Bill forward at all? Is he aware that very few hon. Members on either side of the House really want the Bill to proceed?
Mr. Speaker: Order. The right hon. Gentleman is drifting into the merits. He may ask for the Bill to be debated more, or less, or not at all.
Mr. Shinwell: Mr. Speaker, the reason why I asked the question is that I am concerned about another Bill which I regard as being of extreme importance. It is one which was promised by the Government, namely, the Merchant Shipping Bill. I accept your guidance, as always, and I will address my question in another fashion.
Instead of proceeding with the Parliament (No. 2) Bill, which apparently very few hon. Members want, except for the two Front Benches, will the Government proceed with the Merchant Shipping Bill, which is being asked for by a large number of hon. Members and the trade unions concerned?
Mr. Peart: My right hon. Friend will appreciate that, in relation to the Divisions on the Parliament (No. 2) Bill, he represents the minority—[HON. MEMDERS: "No."] I know that he takes that view. But one has only to look at the facts—
Mr. Heffer: What about the number of abstentions?
Mr. Peart: I am not finding time next week. My right hon. Friend suggests that the Bill has not had a great deal of support in the House, but he will remember that it received a Second Reading.
Mr. Hugh Fraser: In view of what the Father of the House has said—[Laughter.]
Mr. Speaker: Order. He is the Deputy Father, I think.
Mr. Fraser: In view of what the Deputy Father of the House has said—
Sir C. Taylor: On a point of order, Mr. Speaker. May I point out to my right hon. Friend that I am the Deputy Father of the House?
Mr. Fraser: In view of the fact that the Father of the House and the two Deputy Fathers are bitterly opposed to the Parliament (No. 2) Bill, along with most hon. Members on the back benches, would the Leader of the House consider the immediate calling of a Speaker's Conference so that both Front Benches can get off this ridiculous hook?
Mr. Peart: That does not come up on next week's business, and in any event, I would answer "No" to the right hon. Gentleman's proposal.
Mr. Heffer: Can my right hon. Friend assure the House that, as soon as possible, we shall have an opportunity to discuss the White Paper concerned with the reorganisation and nationalisation of the ports, which is regarded by many hon. Members on this side of the House as being of more importance and more vital to the interests of the nation than the Parliament (No. 2) Bill, which many hon. Members feel could be dropped altogether with great profit to the House and the nation as a whole?
Mr. Peart: I will bear in mind the possibility of a debate on ports reorganisation.
Sir A. V. Harvey: Bearing in mind the new high Bank Rate, the industrial unrest at Ford's, and possibly in the steel industry, ought not these matters to take precedence over the Parliament (No. 2) Bill and the House be given an opportunity to discuss them, as they affect the living of everyone in the country? Will the Leader of the House take note of these matters, because the country wants them to be discussed?
Mr. Peart: I will take note of them. The right hon. Gentleman the Leader of the Opposition has also pressed the question of a debate on the Bank Rate.
Mr. Luard: May I ask how often, when the Bank Rate was raised under a
1934
Conservative Government, a day was provided to debate the matter?
Mr. Peart: I am sorry. I could not hear my hon. Friend.
Mr. Speaker: Order. The hon. Member for Oxford (Mr. Luard) can ask the Government only something for which the Government are responsible.
Mr. Molloy: Can my right hon. Friend say whether he thinks it might now be possible to have an emergency debate, in view of the serious situation in Europe, on E.F.T.A. and the Common Market, the position of this country, and the fact that many people are concerned? Surely this is now a subject for urgent discussion.
Mr. Peart: We are to have a debate on foreign affairs. I answered a question on this last week. I recognise the importance of the point made by my hon. Friend.
Mr. Lubbock: As there is a desire on both sides of the House for a limitation of the amount of time spent on the Parliament (No. 2) Bill, will the Leader of the House reconsider the suggestion which I made to him last Thursday and the Thursday before, that we should have a timetable Motion?
Mr. Peart: That is another matter.
Sir Dingle Foot: Is my right hon. Friend aware that if he would reconsider his reply to my right hon. Friend the Member for Easington (Mr. Shinwell) and the Government would now drop, or at any rate radically amend, the Parliament (No. 2) Bill, this would be welcomed in the House and throughout the country? Does he agree that many matters, notably the situation in the Middle East, are far more urgent to be debated than the Parliament (No. 2) Bill?
Mr. Peart: My right hon. and learned Friend will appreciate that I have already made the position clear.
Mr. Boyd-Carpenter: Is the Leader of the House aware that the cessation for 10 days of the right hon. Gentleman's and the Government's concern with a Bill which has almost monopolised the House for the last fortnight, at least raises the question that its future is under consideration? Can he give us at least that bit of relief?
Mr. Peart: I could not respond to that invitation.
Mr. Michael Foot: The Leader of the House says that he has already made clear the position about the Parliament (No. 2) Bill—
Mr. Peart: Regarding next week.
Mr. Foot: May I ask whether he could further assist us in trying to make clear the views of the Opposition on the Bill, since we have tried for four days to discover their view? We would like an official statement of their view before there is any resumption of debate on the Bill.
Mr. Speaker: Order. We are not debating the Parliament (No. 2) Bill now.
Mr. Dickens: In view of the serious implications of the 8 per cent. Bank Rate, may I ask my right hon. Friend whether he will take note that the demand for an early debate on the economy is by no means confined to the other side of the House?
Mr. Peart: Yes, I certainly will take note of that.
Sir D. Glover: Knowing the right hon. Gentleman's fondness for the House and getting through the business with expedition, may I ask whether he will consult the Prime Minister? Today, we got through only one Question in a quarter of an hour with the Prime Minister answering. Will the right hon. Gentleman ask the Foreign Secretary to deal with Prime Minister's Questions in future, because the last time he did this we dealt with all the Questions in a quarter of an hour?
Mr. Peart: The matter of Questions, speed and the time allotted for the Prime Minister is for the Chair.
Mr. Sheldon: While congratulating my right hon. Friend on not finding time for the Parliament (No. 2) Bill next week, may I ask whether he accepts that what is most important at this stage, if we are to proceed with it at all, is to have before the House the nature of the bargain entered into by the two Front Benches, which we have been unable to unravel during the course of the debate so far?
Mr. Peart: It is not included in next week's business. I have made my position clear
Mr. Silvester: Will the Leader of the House say whether he intends to issue the Writ for the Walthamstow, East by-election next week?
Mr. Peart: Not next week.
Mr. Pavitt: As there is no longer a senior Minister to answer Questions on Health, will my right hon. Friend consider the dissatisfaction that has occurred on timing and about a way in which this could be dealt with at Question Time on Mondays?
Mr. Peart: I will look into this, but it is a matter for mutual arrangement between both sides.
Mr. Hastings: As for two weeks no one on either side of the House has had anything nice to say about the Parliament (No. 2) Bill, may I ask the Leader of the House, so that we can make plans for the summer, if not for the autumn as well, to let us know how long it will take? Would it not save the Government a great deal of embarrassment if they dropped the Bill altogether?
Mr. Peart: I note the views of the hon. Gentleman. He has made them quite clear.
Mr. Speaker: Order. I remind the House that we have a lot of business ahead.
Mr. Winnick: If the report in The Times is confirmed by the Government, that civilians and hospitals are being deliberately bombed in Biafra, will the Government arrange for a special debate so that the matter can be discussed as soon as possible in view of the continuation of supplies of British arms to Nigeria?
Mr. Peart: I think that the Prime Minister, in answering a Question today, said that he was inquiring into it. But I will bear it in mind.
Mr. Winnick: We want a debate.
Mr. Arthur Lewis: Has my right hon. Friend's attention been drawn to Motion No. 174—
[That this House congratulates the Daily Express and their political and industrial correspondents on being able, days before any Government announcement is made, completely and accurately

1937
to publish details of Government plans and intentions, particulars of the dates when the Government intend officially publishing and announcing such details to the House of Commons, and is of the opinion that to be able to publish such scoops without the help of the Government, Ministers, civil servants and others in authority, and without the assistance of officially inspired leaks is the height of perfection in political journalism.]
As about a fortnight ago the Daily Express published all the details which were confirmed by the Secretary of State for Economic Affairs yesterday, may I ask whether my right hon. Friend will formally get this Motion agreed, because that would easily dispose of it and save time?
Mr. Peart: I cannot find time for it next week, but I note my hon. Friend's views.
Mr. Henig: Has my right hon. Friend seen Motion No. 169—
[That this House, deeply concerned about the continued fighting in the Nigerian civil war, calls upon Her Majesty's Government: To make a fresh approach to other countries sending military equipment to the combatants with a view to securing through international action a complete embargo on the supply of arms to both sides; To use its good offices to try to bring about a meeting between General Gowon and Colonel Ojukuwu to discuss an immediate ceasefire; Substantially to increase the flow of food and other forms of economic aid to alleviate the suffering caused by the war in both Nigeria and Biafra.]—
signed by nearly 100 right hon. and hon. Members from both sides of the House?
May I ask my right hon. Friend to arrange time for a debate on this complex matter and allow, at the end of the debate, a vote on the subject, as there has not yet been a vote on Nigeria? I am certain that the Government would like the advice of hon. Members.
Mr. Peart: I have noted the terms of the Motion, asking for a peace initiative in Nigeria. The Prime Minister has already made a statement on this today.
Several Hon. Members Several Hon. Members rose—
Mr. Speaker: Order. Mr. John Smith.

BANK RATE
Mr. John Smith: I beg to ask leave to move the Adjournment of the House under Standing Order No. 9 to discuss a specific and important matter that should have urgent consideration, namely,
"the unexplained decision to increase Bank Rate to the crisis level of 8 per cent."
That this is a specific and important matter is beyond argument. Raising the Bank Rate to 8 per cent. is an international signal of distress only to be hoisted on the rarest possible occasions. What is urgent is that it should be shown immediately to a puzzled world, before it draws wrong conclusions immensely damaging to sterling and so to all of us, whether this has been done for external or, which seems almost incredible, for internal reasons. This must be done immediately, because foreign exchange is like quicksilver.
Ordinarily, when Bank Rate is raised to such a level the reasons are instantly apparent to the world, but this time, perhaps for the first time, they are not. Various conclusions can be drawn, some most damaging to this country.
The Prime Minister scuffed over this in Questions and the Leader of the House has refused time to debate it. If we hoist this international signal of distress we must make it plain to the world at once whether, this has been done because, which I do not believe, the ship is sinking or—[Interruption.]
Mr. Speaker: Order. Mr. Speaker needs no help. The hon. Member must not drift into the merits of what he wants to do. I am listening to him very carefully.
Mr. Smith: We must make it plain whether it has been done because the ship itself is in danger, or because of a lesser difficulty on board. That can only be done by a debate now in this House—[Interruption.]
Mr. Speaker: Order. May I point out to the House that when an hon. Member is asking leave under Standing Order No. 9 to discuss something which he thinks is important he has a right to be heard.
The hon. Member for the Cities of London and Westminster (Mr. John Smith) asks leave to move the Adjournment of the House under the Standing

1939
Order No. 9 for the purpose of discussing a specific and important matter which he thinks should have urgent consideration, namely,
"the unexplained decision to increase Bank Rate to the crisis level of 8 per cent."
As the House knows, under revised Standing Order No. 9 Mr. Speaker is directed to take into account the several factors set out in the Standing Order, but to give no reasons for his decision.
I have listened very carefully to the hon. Member. I have given careful consideration to the representations that he has made, but I have to rule that the hon. Member's submission does not fall within the provisions of the revised Standing Order, and, therefore, I cannot submit his application to the House.

BILLS PRESENTED
  ARMY RESERVE
  Bill to extend the period during which certain national servicemen or national service volunteers are liable to serve in the army reserve, presented by Mr. Denis Healey; supported by Mr. G. W. Reynolds, and Mr. James Boyden; read the First time; to be read a Second time Tomorrow and to be printed. [Bill 102.]
  British Broadcasting Corporation
  Bill to enable the Postmaster-General to issue directives to the British Broadcasting Corporation to retain sound radio and television programmes of a specified character, presented by Mr. Peter Bessell; read the First time; to be read a Second time upon Friday, 18th April, and to be printed. [Bill 100.]
ORDERS OF THE DAY

  DEVELOPMENT OF TOURISM BILL
  Order for Second Reading read.
  Mr. Speaker: Before we begin the debate I have two announcements to make. First, I have not selected the Amendment in the name of the hon. Member for Tiverton (Mr. Maxwell-Hyslop)—
  That this House declines to give a Second Reading to a Bill which sets up a system of tourist boards reflecting neither the economic nor the geographic balance of the tourist industry within the various parts of the United Kingdom, which, so distorted, implies an irrational allocation of public funds, and which does not lend itself, by reason of its drafting, to rectification by amendment,
  or that in the name of the hon. Member for Honiton (Mr. Emery)
  That this House, whilst recognising that tourism is a major British industry, declines to give a Second Reading to a Bill, the principal objective of which is to provide public funds to newly created statutory boards for allocation on a discretionary basis, and condemns a measure which fails to remove or alleviate the root causes of the tourist industry's difficulties, namely, selective employment tax, inadequate tax allowances, and poor communications to the principal holiday areas
  This will not cramp the debate in any way. All the points made in the two proposed Amendments, and many others, will be made during the course of the debate.
  Secondly, every hon. Member who represents what might be called a tourist constituency is anxious to speak in this debate. I appeal to those who are fortunate enough to be called to make brief speeches, because so many interests are involved in this Bill.
  4.13 p.m.
  The President of the Board of Trade (Mr. Anthony Crosland): Mr. Speaker, I shall try to set a good example in response to your appeal for reasonably brief speeches.
  I beg to move, That the Bill be now read a Second time.
  Tourism, as we can see from the Order Paper, is a subject on which a lot of people have very strong views. It is a matter on which everybody has strong views. To start with, we are all—in some

  1941
  sense—tourists whenever we travel at home or abroad, whether on business or on holiday. Again, tourism covers an enormous range of economic and social activities of great interest to Parliament and the public. It is much more than an industry—one cannot classify it neatly, as one can, say, the motorcar industry or the steel industry. It involves most of the service industries, particularly air and surface transport, and hotels and catering, and a wide range of cultural, social and recreational activities provided by public and private bodies. And, lastly, it affects the constituencies of many hon. Members, some of whom have put down Amendments to this Bill. I take no exception to this fact, as I think we all have the same objectives at heart, and I welcome the fullest possible debate and discussion on the Government's proposals.
  One thing we can all agree on is the importance of tourism to the balance of payments. In 1967 over 4 million people visited this country from overseas, and their spending is estimated at £236 million, without counting in fares paid to British air lines and shipping companies. If we include these fares and other expenditures, such as cars bought while they were here and then exported, the grand total for 1967 was about £335 million.
  For 1968, the corresponding figure is likely to be about £375 million, earned from nearly 5 million visitors. This is an increase of 12 per cent., and there is every reason to expect that our receipts from tourism will continue to grow, particularly as the jumbo-jets come into service. This £375 million from tourism compares very favourably with the export earnings of some of our major exporting industries—£280 million, from cars, £282 million from aircraft and aircraft engines, £299 million from all textiles, £177 million from whisky.
  These are overseas earnings. But, in addition, the British Travel Association estimates that in 1967 our own people spent about 26 million main holidays in Britain, and that "home holiday-makers" spent about £560 million in this country. Holidays at home save holidays abroad, and since about £260 million of foreign currency was spent on holidays abroad
  1942
  in 1967, we have here a considerable import-saving potential. Whichever way one looks at it, tourism is now very big business.
  Almost every country in the world is trying to attract overseas visitors and to increase its tourist earnings. In Britain, as in other countries, success depends on two things. First, tourist promotion to persuade people to visit this country by publicising the various attractions we have to offer. Secondly, tourist development, that is, making sure that people get the facilities and amenities they want so that they enjoy their visits and come back again.
  Successive Governments have recognised the importance of the first of these two jobs by giving financial support to the British Travel Association, which has devoted most of its energies to overseas promotion. The grant-in-aid to the B.T.A. rose from about £600,000 in 1950, when the B.T.A. was reconstituted in its present form, to almost £1½ million in 1963. In the four years since this Government came to power the grant has doubled again, and for the year just ending amounts to almost £3 million, which covers about 80 per cent. of the Association's total expenditure.
  I am sure that the whole House will want to join me in paying the highest tribute to the B.T.A. and to its Chairman, Lord Geddes, for their work. It has been quite outstanding and has earned the admiration of tourist organisations all over the world. And we should not overlook the valuable work which the existing Scottish and Wales Tourist Boards have been doing, or the efforts of regional or area travel associations to promote their own areas. I shall come back to this a little later.
  The second requirement of a tourism policy is tourist development. Promotion by itself is not enough: we also have to provide the facilities and the accommodation which tourists want.
  This is not a job solely for central Government or "the faceless bureaucracy" of Whitehall which I read about in the papers. It needs to be done by all kinds of bodies, both public and private. Spending on airports and roads, on theatres and opera-houses, on sport and entertainment, all contribute to tourist earnings.

  1943
  But the first priority in tourist development, as the B.T.A. has long urged, is to stimulate new investment in hotel accommodation. We must be ready to meet the demands of tourist growth in the 1970s. We must have in mind the "Jumbo" jets, the continuing growth of inclusive tour holidays, and generally the outstanding opportunities for accelerating the growth in British tourist earnings. It was with this in mind that the Government decided—and this is the first aspect of our new tourism policy—to provide direct incentives to the industry to encourage new investment through the Hotel Development Incentives scheme, for which Part II of the Bill provides, and which was described in the White Paper of last May (Command 3633).
  Mr. Speaker: Order. It is not in order for an hon. Member to deal with correspondence in the Chamber.
  Mr. Crosland: I am distressed to hear that I have become so boring so quickly that hon. Members have to deal with their constituency correspondence. In view of the White Paper, and of your appeal, Mr. Speaker, I will not give a lengthy explanation of the provisions of Part II, which are in any event more appropriate for detailed discussion in Committee. But our basic aim is to encourage investment in hotels catering for short-term visitors, particularly investment in the medium and lower-cost categories of hotels. The Hotel and Catering E.D.C., I am glad to see, has welcomed this scheme in its recent report, "The First Two Years, 1966–68", which hon. Members will have read. I quote:
  "The Little Neddy has welcomed the Government's intention to introduce legislation to provide hotel development grants and improved loan facilities, and believes that they will have a substantial effect in stimulating new investment."
  It is sometimes argued, it is argued in one of the Amendments by implication, that tax reliefs should be given instead and in particular relief from S.E.T. The trouble about this proposal to achieve our object by relief from S.E.T. is that it would be extremely expensive and yet would not achieve the end in view which is the development of new tourist facilities. It would cost, if we relieved hotels and catering from S.E.T., some £28 million a year—much more than the
  1944
  Hotel Incentives scheme; and only 10 per cent. of this would effectively relieve foreign visitors, because 90 per cent. of hotel receipts derive from British visitors.
  So it would cost very much more money. In addition, we could not rely on it to fulfil the end in view, which is to provide new accommodation for tourists of the right standard and in the right season. Generally, S.E.T. on hotels is passed on in higher prices. I quote again from the Report of the E.D.C.:
  "It would seem likely to the Little Neddy that many, if not most, firms in the industry will continue to recover the added cost of S.E.T. through higher prices, and that consequently the effects of increases in S.E.T. on hotel and catering services are similar to those of an equivalent increase in purchase tax on manufactured goods."
  Assuming this is right, if we were to exempt the whole of the hotel and catering trade from S.E.T., that might lower the prices of hotel services by perhaps 3 to 4 per cent. Obviously, this would be very agreeable to all of us, but it would have only a negligible effect on the overseas demand, which in any case exceeds the supply of hotel accommodation in the main tourist season. And above all, it would not increase the supply of new hotel accommodation.
  As I have said, the most important factor limiting our overseas tourist earnings, both at present and in the foreseeable future, is the limitation of supply, that is, of the accommodation available. So the appropriate thing to do is surely to encourage hotel development directly and immediately, which is what the incentives scheme does. It is essentially a scheme of payment by results at a fraction of the cost which S.E.T. exemption would involve.
  Mr. R. J. Maxwell-Hyslop: I am most grateful to the right hon. Gentleman for giving way. His argument presupposes that it is more important to attract overseas visitors than to retain British tourists in Britain. Since this is not a proposition embodied in the Bill, would he explain the reason for this assumption he makes which is by no means self-evident?
  Mr. Crosland: I believe both are important. As the hon. Member will remember, I have already referred to the import-savings side as well as to what we may call the export-earning side. But even if we make some allowance for

  1945
  the additional British visitors who might be attracted to British hotels, by far the greater part of the relief as a result of S.E.T. exemption would go to British visitors who are not going there instead of going on holiday abroad. I must insist on this. I can see the superficial attraction of the S.E.T. solution, but I must insist that as a way of getting new investment in hotels, which is the crux of the matter, the Hotel Development Incentives scheme is much less costly and much more effective.
  Mr. James Tinn: Before the hon. Gentleman leaves this question, may I ask him whether he would consider allowing the new Authority, perhaps in consultation with the Department of Employment and Productivity, to assist in drawing boundaries for the Hotel Development Incentives scheme. There are serious anomalies. One aspect is the development area side of it together with the question whether or not it is a rural area and a proper place for this kind of grant.
  Mr. Crosland: I was about to say that although I believe a general S.E.T. exemption is wrong, we have made certain limited concessions for hotels in rural areas to which my hon. Friend was referring. As far as boundaries are concerned, I am not sure, but I will certainly check to see whether this particular dividing line is one being looked at under the Reddaway Report, and I will certainly consider my hon. Friend's point.
  Mr. Keith Stainton: The hon. Gentleman seems to put the argument on S.E.T. in terms of reduced prices of 2 or 3 per cent. rather than an accretion of profits or cash flow; in other words, financing investment in the hotel industry.
  Mr. Crosland: I say so merely because I am taking the argument of the "Little Neddy" on this, which says S.E.T. when it exists is passed on in higher prices, and appears to think that if it were reduced it would be passed on in lower prices.
  The second aspect of the Government's new policy is the power which the Bill provides for selective financial assistance to other tourist developments. Clause 3 empowers the new tourist authority to propose general schemes of financial
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  assistance for a class of project, subject to the approval of both Houses of Parliament through affirmative Resolution.
  Clause 4 provides for financial assistance by way of grant, loan or investment to particular tourist projects or, as a last resort, for a tourist board to undertake such a project itself. At this stage I do not envisage any general Clause 3 scheme being introduced while we are still making large payments under the Hotel Development Incentives scheme; and as to Clause 4, we see this power as providing a supplement to, not a replacement for, projects financed on a normal commercial basis, or by public bodies such as local authorities through their existing powers and resources.
  I will not try to give examples of the kind of project which might receive such selective financial assistance. It will basically be up to the tourist organisations to decide for themselves which developments to encourage, and in what areas; and whether it should support them financially. In general, developments will continue to be financed by private investment or by other public bodies. But occasionally the boards will wish to step in to finance some particular or essential facility, especially one which will affect the balance of payments directly, or generate tourist earnings of major importance to the local economy. We make it a selective power to avoid the "irrational allocation of public funds" to which the hon. Gentleman refers in his reasoned Amendment.
  I turn now to the third new aspect of our proposals, the power to register and classify tourist accommodation. This is aimed at both promotion and development. By providing more comprehensive information to the public and to the travel trades, registration will make promotion more effective, and it will also help tourist development by enabling forward planning to take place more easily, and by contributing to higher standards
  I recognise that there are differences of opinion on this subject and also on whether and how far we should grade hotels by quality as well as providing additional factual information. The British Travel Association has stated publicly that while it has no objection to the enabling powers in Clause 18 it would prefer a voluntary system of improving

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  information about accommodation. It thinks that the Clause 18 provision should be treated only as a reserve power. But on the other hand, the "Little Neddy", the Consumer Council and the Scottish and Wales Tourist Boards have all welcomed the decision to seek powers to register hotels. I believe these powers are right in principle, but I have no predetermined scheme in mind. I certainly welcome public discussion of the subject, and I hope there will be a very full debate on this in Committee. Certainly the Government will welcome that. But at the end of the day it will be for the new tourist authority to advise on the subject, and it must do so only after the fullest possible consultation with consumer and trade interests.
  So far, I have discussed the broad new policies embodied in the Bill, and I turn now to the question of organisation. Here, one thing is quite certain. It would be both wrong and impracticable to centralise in a single Government Department the responsibility for all activities with a bearing on tourism, but we need some effective arrangements both for co-ordinating and for stimulating tourist activities. The Government have reviewed the existing organisational arrangements with this in mind. So far, these arrangements have worked reasonably well, as the balance of payments figures demonstrate. But not only the Government but informed outside opinion has increasingly come to the view that a change is now needed.
  Many people have made many different suggestions. These range from a Ministry of Tourism to proposals for new statutory boards or for giving statutory powers to existing organisations. Two years ago, the B.T.A. itself proposed to the Board of Trade that we should consider giving a "National Tourist Council" statutory powers and making it able to give financial assistance from Government funds; and give it also a strong co-ordinating rôle to ensure that tourist considerations were taken into account by all other relevant bodies, public or private.
  But the Government, after much thought, have decided on the proposals which I announced on 13th November, and which are embodied in the Bill. Their shape is determined not only by the general need to intensify tourist
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  development but in particular by the three new initiatives of the hotel incentives scheme, the power for selective financial assistance and the power to register and classify hotels.
  My first comment is that I am sure that tourist promotional work, whether overseas or at home, should continue to be done outside a Government Department. It requires day-to-day decisions of a commercial nature and should not be subject to either bureaucratic or political pressures.
  There is also a new situation as a result of the three initiatives which I have mentioned. None of these would be appropriate to a membership organisation such as the B.T.A. and the other tourist organisations. They could, of course, be done by a Government Department, but could equally well be done by a statutory organisation. We chose the latter because a statutory organisation, unlike a Government Department, could undertake the promotion part of the job as well. There are strong advantages in combining both the development and the promotion function in one body. Promotion and development are closely related and the expertise and knowledge obtained in one field can be most helpful in the other. Moreover, having one organisation responsible for both promotion and development should make for greater efficiency in the use of professional and specialist staff and so lead to a saving of staff. I will come back later to the question of whether this entire set of proposals will or will not need more staff.
  The statutory tourist organisation which we propose would have a status comparable to that of the other statutory bodies with which it would have to work in close co-operation. We propose the organisation in Clause 1 with the general functions and powers described in Clause 2. I must point out, in view of some comments which have been made, that this is a distinctly less bureaucratic approach than that adopted in most other tourist countries. Out of 86 countries which are known to have Government-sponsored tourist organisations, 63 have Government Departments, 12 have statutory boards, 11 have co-operative organisations similiar to the B.T.A. In Europe, France, Spain and Italy all have Government Departments responsible for tourism.
  I hope that this will quiet some of the fears expressed by hon. Members opposite, one of which I read about in the Daily Telegraph report of a conference attended by one hon. Member who is present, when reference was made to
  ". . the danger of faceless wonders in Whitehall like the White Fish Authority."
  I see little clear resemblance between tourists and white fish and, having known a great deal about the White Fish Authority in my constituency personality, I know that it has many advantages and merits but that no one could talk about it in these terms of incipient tyranny at least.
  I should also add, since these fears have been expressed at that conference, that I received today a telegram saying:
  "The British Resorts Association"—
  it has been quite active in making its views known—
  "and the Association of Resort Publicity Officers, meeting yesterday, support in principle your Development of Tourism Bill due for Second Reading today."
  Under our proposals the British Tourist Authority will undertake all promotion overseas and will be responsible for matters on which a national policy is needed in the country as a whole, such as re search, co-operation with other national organisations, the provision of a national advisory service and a policy on hotel registration and classification—
  Mr. Peter Mills: Has the right hon. Gentleman received any other telegrams, since some of us have seen another telegram from the West Country which says:
  "Please oppose Tourist Bill in its present form…insufficient safeguards for English tourism."?
  Is that the only telegram that he has received?
  Mr. Crosland: I have received, indeed, one or two other telegrams, I thought that, since none of us is every likely to take a parochial or even purely regional view, the significant telegram was the one from the national body.
  I have described the national functions of the British Tourist Authority, and it will in addition have certain functions in respect of England alone—that is, research, promotion and publicity specifi-
  1950
  cally for the benefit of English tourism. Clause 6 provides also for the establishment of an English Advisory Committee appointed by me, which will be under the Chairmanship of a member of the British Authority who will have particular responsibility for that authority's English functions. I intend that this Committee will be widely respresentative and reflect the diversity of English regions and activities.
  I suggest that this is a better solution than either of the other two suggested, having a completely separate English body, which would mean four organisations instead of three—we surely do not want to proliferate these organisations—or, second, of having a statutory board for, let us say, the South-West, which would equally lead to calls for statutory boards for many other parts of the country, and we should end up with probably eight or ten statutory boards, which would make no sense in terms of economy or efficiency.
  Mr. Peter Emery: As the right hon. Gentleman has been dealing particularly with the structure of the new B.T.A. and the Board, how does he envisage that the present British Travel Association will fit into the new organisation? Is it intended that the new one should take over entirely the old B.T.A. and that the staff should be integrated? There has been no announcement on this and many people want to know.
  Mr. Crosland: That is a reasonable question, but I am afraid I cannot answer it, because the future of the present B.T.A. is a matter which only that Association can decide. So it is not for me, speaking for the Government, to lay down whether it should continue with different functions or wind itself up. I understand that it has not yet made that decision.
  Reverting to the new Authority, it will administer in England the Hotel Development Incentives scheme, any selective aid to particular tourist projects and any registration and classification scheme. The separate boards for Scotland and Wales will carry out in those countries all the tasks and functions which the British Authority will perform for England. Their chairmen will be ex officio members of the British Authority and in this way will contribute to

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  the development of national policies on matters affecting Britain as a whole and, of course, on tourist promotion overseas, for which the British Authority will be solely responsible.
  Mr. John Nott (St. Ives)Mr. John Nott (St. Ives) rose—
  Mr. Crosland: I will not give way any more, because Mr. Speaker made an appeal about this and a large number of hon. Members from resort constituencies will all want to speak.
  The three statutory bodies must obviously work in very close consultation with each other on matters of common concern; for example, to achieve consistency in administering the hotel incentives scheme. But there is no question of the British Authority being the overlord of the Boards for Scotland and Wales. I am sure that close co-operation between the three can be left to the good sense of the people concerned.
  Contrary to at least one report I have seen from the famous conference to which I referred, the membership of the new bodies has not been settled. I can positively deny the statement made by one person at the conference, who said:
  ''I have learned the name of at least one M.P. who has been offered one of these positions and whose only qualification happens to be that he has spent a number of holidays abroad."
  If that were a sufficient qualification, we would certainly not be short of candidates. I have not yet got within some way of deciding the membership.
  All three boards are intended to be compact functional boards. They are not intended to be strictly representative of sectional or geographical interests. We will draw their membership from people of experience and ability in tourism, industry, commerce, economics and administration. I hope that they will bring to their work experience in different parts of Great Britain, but the intention is that each board should be a team providing efficient leadership for their staffs, and not advocates of any particular interests.
  That is how we see the new organisational arrangements at national level. But a successful tourist policy depends on success at all levels. Neither the Government nor any national organisation has a monopoly of interest or wisdom
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  in these matters. We already have a number of active regional or area tourist associations, and I am glad to say that they show signs of expansion. They have an essential rôle to play, both in making local tourist activities more effective, and also in making sure that regional and local considerations are not neglected by the national organisations.
  The way in which these associations develop is mainly for people on the spot to settle. It is not for us to decide at the centre. Our proposals provide the essential national framework and within that framework we want to see the greatest possible activity in the regions and localities.
  I come to the cost of the Government's proposals and the fears expressed by hon. Gentlemen opposite, when I made my statement in November, of a "faceless bureaucracy". I expect—I say this categorically—no material increase in Civil Service staff as a result of the Bill. The Board of Trade and the Scottish and Welsh Offices already have some administrative responsibilities in connection with tourism. Our staff will continue to be needed, but I see no reason why it should be increased.
  The new tourist organisations will recruit their own staff. I do not expect them in general to need significantly more than the B.T.A. and the existing voluntary boards in Scotland and Wales already employ; that is about 500. But depending on how things develop, they may require about 70 additional staff for the hotel incentives scheme and, later, for selective financial assistance. This additional staff would have been needed whoever operated the scheme. As to hotel registration, we have no set scheme in mind, and I can therefore make no estimate of manpower or cost. But this will obviously be a major consideration in looking at different proposals that may be made.
  The cost of the new proposals will consist partly of the payment of grants and loans under the incentives scheme, for which Part II of the Bill provides, and partly of the expenses of the new boards in respect of their general work on promotion and development work.
  On the first, I can give no precise figures for total spending on grants and

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  loans, since this will depend on the timing and nature of investment by the industry and, for loans, on the extent to which loan assistance is considered appropriate in particular cases. I am working on the basis that expenditure could rise to about £8 million during the operation of the scheme. This assumes that while the scheme is operating, there could be an increase of 50 per cent. on the recent rate of provision of new hotel bedrooms, which has been some 3,000 rooms or 5,000 beds per year.
  As to the general work and expenses of the tourist organisations, public expenditure considerations, which are constantly being urged on us by hon. Gentlemen opposite, rule out for the present any significant increase in funds, so I do not expect grants for this purpose to the three bodies in their first full year of operation—which is likely to be 1970–71—to exceed about £3½ million, including the administrative expenses of the hotel incentives scheme. Once the new authority is operational, the present grant-in-aid to the British Travel Association will, of course, come to an end.
  At this stage, I cannot give a breakdown of the likely grant between the Board of Trade's Vote and the Vote of the Scottish and Welsh Offices. This will depend on how the British Authority and the Scottish and Wales Boards share out their work in general, and in particular on the arrangements they make for administering the hotel incentive scheme.
  Thus, the total expenditure in prospect under the Bill might reach about £11½ million in a full year. In addition, I hope that the new boards will be able to attract revenue from outside bodies for co-operative promotion work, and from their publications and advertisements.
  This leaves out expenditure under Clause 4. The new organisation's first job will be to implement the hotel incentives scheme and to maintain the promotional and development work of the existing voluntary bodies. I think it unlikely that either the British Authority or the two Boards will be able to put forward proposals under Clause 4 until some time next year. What order of expenditure will prove possible for 1970 or future years in this connection
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  must depend on the public expenditure situation at the time.
  I cannot hope—nobody in my position can—to satisfy all the demands that are made for more funds for tourism promotion and development. The present stringent restrictions on public spending rule that out. But I believe that a limited amount of additional spending on the promotion of tourism and the improvement of tourist facilities will pay a rich dividend in increased earnings of foreign currency. It is a sign of the importance which the Government attach to the tourist industry that the Bill has been introduced at such a time.
  4.48 p.m.
  Mr. Gordon Campbell: The President of the Board of Trade began his speech by pointing out the great service which the tourist industry gives to the United Kingdom economy. However, we have just witnessed what to me was an astonishing spectacle; the right hon. Gentleman introducing the Bill as if the Government were kindly benefactors to the tourist industry. Nothing could be further from the facts of the recent past.
  The right hon. Gentleman spoke of a new tourist policy. I hope that it is new, because during the last four years, while he has been occupied with Education and other Ministries, many of my hon. Friends have been engaged in a stern struggle to protect the tourist industry from successive blows aimed deliberately at it by the Government. The Government's record in this matter is black. It is as black as it could be in its ill-treatment of the tourist industry. The Bill is a belated attempt to offer a partial remedy for this ill-treatment.
  I remind the House of what the Government have done. During their first one-and-a-half years in office they imposed a restrictive building licence procedure which did not apply to industrial buildings, but which did apply to hotels. This caused delays and uncertainty. Then they withdrew investment allowances—except on buildings—the investment allowances on hotel equipment of all kinds. At the same time, they made the hotels and the tourist industry ineligible for the investment grants which they introduced for manufacturing and other industries in place of the allowances.

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  Shortly afterwards there was a severe and unexpected blow. Selective Employment Tax, an ill-conceived and iniquitous impost, was brought in. As if that were not enough, last year they added a 50 per cent. increase to the tax. Some of us on this side of the House have fought against the imposition of S.E.T. on the tourist industry. The Government will say, as the President of the Board of Trade said today, that they have made some concessions in response. There is the exemption for part-time workers, for example, which, of course, was some help to the hotel industry, but we were urging this in the summer of 1966, when the first Bill concerned with S.E.T. was going through the House.
  Last year, there was relief for hotels in certain areas described by the President of the Board of Trade this afternoon as rural. That relief did not apply to restaurants or other elements of the tourist industry. The result has been a substantial net increase in tax paid under S.E.T. after the 50 per cent. increase last year, despite the exemptions in rural areas. A rough estimate given by the "Little Neddy" is that in a full year the industry is now paying about £40 million in S.E.T., whereas before the amount was £30 million.
  As for the arbitrary lines that are drawn, which were referred to in an intervention by the hon. Member for Cleveland (Mr. Tinn), in rural and non-rural areas these are ludicrous. The President of the Board of Trade said that he would look at them, as if he did not know where they were. The most plausible explanation I have heard is that the right hon. Gentleman, or his predecessor, sat down with a map of Britain superimposed on a bingo board and that the Chancellor of the Exchequer called out the numbers at random. [Laughter.] I am glad that right hon. Gentlemen on the Front Bench opposite are amused.
  Playing bingo with a map of Britain may seem casual, but most of the damage done to the tourist industry has been deliberate The Government have behaved like a thug who, having battered someone Co the ground with blows, kicks him in the teeth. The kick was the Selective Employment Tax. Offering the victim some of his teeth back, he kicks him again with the 50 per cent. increase.
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  After perpetrating this violence the Government reappear in the rôle of a Good Samaritan with a stretcher and medicine—the present Bill. But the medicine which is proposed is not the best which could be prescribed.
  Mr. William Edwards: Will the hon. Gentleman give way?
  Mr. Campbell: Before giving way, I challenge any hon. Member opposite to name an industry which the Government have treated worse than the tourist industry.
  Mr. Edwards: In responding to the challenge, I think that the gaming industry has had rather worse treatment. I would rather expect to see the same lobby taking part in the debate to assist hon. Members opposite as it supports them against the proposed statutory boards.
  As to Selective Employment Tax, as a representative of an area which has considerable relief from the tax, I am concerned about the effect of the policies of the party opposite should hon. Members opposite come to power. Could the hon. Gentleman assure us that should the hotel industry have a sales tax imposed on it, which would be far more iniquitous and difficult to administer in areas which now get relief from S.E.T., they get relief from the imposition of a sales tax?
  Mr. Campbell: I am sorry that the hon. Member was not able to respond in a responsible way to my challenge. [HON. MEMDERS: "He did so."] He must have been joking, I hope he knows that the Conservative Party intends to abolish Selective Employment Tax entirely. That would be the best relief that the hotels want. [HON. MEMDERS: "Answer the question."] I shall be dealing later with the other points the hon. Member made. Three years ago—[Interruption.]—wait for it—a letter in The Times caused a great deal of comment. It was headed:
  "Troubles for hotels
  How the industry is hampered ".
  After describing the injurious measures carried out during the Labour Government's first year, there was the following passage:
  "Now there is the culminating blow. We are to lose the one piece of assistance we have

  1957
  had, the Investment Allowances, on the equipment of our hotels (as distinct from the buildings themselves) and we are not to be eligible for the new cash grants."
  Many of my hon. and right hon. Friends will recognise that as an extract from a letter by Sir Geoffrey Crowther, as he then was, now Lord Crowther, who has recently been appointed by the Government as Chairman of their Constitutional Commission. That is a recognition, rightly, of his judgment and ability. The letter went on:
  "Now we must adjust our policies to the new situation. The pace of modernisation will be slowed down or even stopped. Projects which could be marginally justified before will now not pay even in the long run. And we shall have less money to finance those that will pay."
  That letter was written before Selective Employment Tax. By the time Selective Employment Tax was added to the troubles of the hotel industry, the situation was much worse.
  Mr. William Edwards: Will the hon. Member allow me—
  Mr. Campbell: No. I will not give way. The hon. Member made a very long and rather pointless intervention. I gave way to him once, but now I shall continue my speech.
  The Government have continued to clobber the industry ever since. By withdrawal of investment allowances the Government did serious damage to the industry. The hotel industry was placed at a great disadvantage compared with other industries because hotels are not treated as industrial buildings and are not, therefore, eligible for depreciation allowances. It is important to note that the "Little Neddy" recommended that the right solution was to extend to hotels the assistance given to industrial establishments. That recommendation should be considered seriously and carefully by the Government.
  The "Little Neddy" also drew attention to the fact that by 1970 hotels in Britain are unlikely to be able to meet the demands made upon them by visitors from overseas as well as the demand by residents of this country, unless there is a great increase in planned extensions and development. Perhaps this has stimulated the Government to take some positive action now to try to repair the damage they have done and to produce
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  this Bill. Otherwise, Britain would lose a potential increase in foreign currency which would be earned. For the tourist industry is a foreign currency earner. It is also a foreign currency saver. If British people can find the kind of holidays they want within these islands, currency will be saved.
  If proper treatment had been given to the hotel and tourist industry during the last four years, allowing foreign currency to be earned and saved, it would not then have been necessary for the Government to have brought in the egregious £50 foreign currency restriction. More would have been saved than the comparatively small amount saved by that folly.
  Mr. Michael Jopling: Would not my hon. Friend agree that we are hitting our heads against a wall to a certain extent because the President of the Board of Trade last year, in reply to a Question by me, said that he thought it right to give preference to exporting rather than to import saving?
  Mr. Campbell: That is a relevant point which my hon. Friend has made. [Interruption.] I hope that the President of the Board of Trade will treat this matter seriously. Any Government that is capable of the kind of restrictive follies such as the £50 allowance clearly has no awareness of the international nature of tourism or of the factors involved.
  Although the White Paper on the proposals for hotel development appeared in May of last year, the Government seem to have drafted the Bill without any proper consultation with the bodies mainly concerned. For example, I understand that the British Hotels and Restaurants Association was not consulted about the proposals in the Bill and particularly about Part I, because Part II had been described in the White Paper. I understand that an emergency meeting was held with the Minister of State only last Friday because of this and that a further meeting is arranged for Monday. This is a lamentable situation. No wonder the Bill is so clearly in need of amendment, clarification and filling in.
  Clauses 1 and 2 propose new bodies and functions for them, but it is not at all clear how they will operate. My hon. Friend the Member for Hereford (Mr. Gibson-Watt), if he catches your

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  eye, Mr. Deputy Speaker, will deal with Wales. There is already a Tourist Board for Scotland. A separate Tourist Board of Scotland is appropriate, but we wish to examine how it is proposed that it should function, to see whether it will be effective for the purposes required.
  The arrangements for England are strange and seem to leave much to chance. The English Advisory Committee proposed in Clause 6 is to advise on some matters, and the new British Tourist Authority is to be responsible in England for certain other matters. Some of my hon. Friends representing important tourist areas of England will, I am sure, have more to say about the vagueness and defects in the arrangements proposed for England.
  Some explanation is needed of the position of Northern Ireland. Clause 21 provides that the Bill will not apply to Northern Ireland, except for the House of Commons Disqualification Clause. Under Cause 5(3), however, the new Authority is to be able to carry on activities outside the United Kingdom to encourage people to visit Northern Ireland. The Government should explain what their attitude is to the development and promotion of tourism in Northern Ireland.
  The right hon. Gentleman skated over Clauses 3 and 4, which deal with the preparation of general schemes and the execution of particular tourist projects. The right hon. Gentleman rather gave the impression that these Clauses were permissive and that nothing much was contemplated under them. We need to know what is intended. The President of the Board of Trade said that he would not give examples, but examples are necessary. Are these schemes under Clause 3 to be related to feasibility studies or, at the other extreme, is it intended that the bodies should enter into road-making or the building business?
  There is no limit to what they might do under these Clauses. Examples of what the Government have in mind are essential, particularly as all these are subject to Government approval and, therefore, the Government will have to sanction any proposed schemes.
  Mr. Maxwell-Hyslop: Will my hon. Friend comment on the fact that for the specific projects referred to in Clause 4
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  the authority for England is not the English Advisory Committee, but the British Tourist Authority?
  Mr. Campbell: My hon. Friend has underlined the point I made earlier, that in parts of the Bill the responsibility for England lies with the British Tourist Authority and in other parts it lies with the English Advisory Committee. It is left very vague. If I had an English constituency, I should be very worried, as I am sure my hon. Friend is, about this.
  Mr. Emery: Is my hon. Friend in favour of the position that the Scottish Tourist Board will not have any powers for advertising and attracting foreign visitors to Scotland?
  Mr. Campbell: My hon. Friend has anticipated something I shall come to when I say a short piece about Scotland. In general, the position of these boards is left very unclear.
  I come to Part II of the Bill—Financial Assistance for Hotel Development. The Government propose some financial assistance which we must regard as partially offsetting the financial blows of the Selective Employment Tax and the withdrawal of investment allowances. This is not the best way of doing this. We would much prefer a system of investment allowances to this proposed system of grants. The little N.E.D.C. has put forward other proposals, too, as its recommendation on the right solution for the tourist industry, as I mentioned earlier.
  Although Part II may, during the period stipulated, help with new building, expansion and modernisation, we must recognise that there will be little help to established hotels in established resorts. For example, a high standard hotel, up-to-date, already modernised, with no reason or room to expand, providing a very good service, perhaps earning a lot of foreign exchange for the nation, is likely to benefit very little under the Bill. Most of such hotels are in areas where S.E.T. still has to be paid. Therefore, the Government should not delude themselves by thinking that they are lifting the burden generally from the tourist industry as a rule.
  Mr. John Bitten: I am intrigued by my hon. Friend's reference to investment allowances. To what extent

  1961
  was my hon. Friend thinking aloud, or was it a commitment to the policy of investment allowances?
  Mr. Campbell: I am happy to clarify it. I said that we much prefer the system of investment allowances. We have made that clear in relation to other industries. Whether it will be the best system for the future is something that at this stage I cannot say. It is certainly a better system than the investment grant system, where the eligibility has to be decided on a whole lot of arbitrary criteria by officials and is thoroughly unsatisfactory.
  The only clear light ahead for the tourist industry—[HON. MEMDERS: "Hear, hear."]—I am glad to hear hon. Members opposite cheering. The only clear light that the tourist industry can see ahead for itself is the fact that the Conservative Party, when it returns to office, will abolish the Selective Employment Tax.
  Last year, when some Scottish hotels were relieved of Selective Employment Tax, there was also the 50 per cent. increase. The estimate is that, as a result, there was a net increase in SE.T. payments in a full year of about £150,000 in Scotland. That could hardly be regarded as assistance to the Scottish tourist industry.
  In Scotland, during the last 10 years there has been a major and significant development—winter sports, which have provided a second season in the Central and Western Highlands. As this week is Cairngorms Winter Festival Week, it is an appropriate time for me to say a few words about it, particularly as I have been concerned with this development. Many of my constituents helped to start the winter sports and are still chairmen and members of the bodies which are running and expanding the development.
  This has been an excellent example in the Valley of the Spey of self-help within an area, because the first £50,000 was raised by voluntary subscriptions in the area. It was a considerable risk. Nobody knew whether ski-ing would catch on. It did catch on, and it has been expanding ever since. But the anomally here is that, although the hotels in the area have now been relieved of Selective Employment Tax, the other parts of the winter sports development—the ski schools, the
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  chairlift personnel and others—have not. That is an example of the extraordinary anomalies arising under the S.E.T. system.
  I was glad last April to accompany the Leader of the Opposition almost to the top of Cairngorm when he came to see it, and he saw literally hundreds of skiiers out on the slopes.
  Mr. Edward Milne: Why not leave him there?
  Mr. Campbell: The Leader of the Opposition gets around, including Scotland, a great deal, and he will be there again before long.
  There is a sizeable job for the Scottish Tourist Board to do, whether the present Board or the new one proposed, in coordinating all the various kinds of tourist activity. Because we have much wild and magnificent country, moor and mountain, with a very long coastline, because of the narrow sea lochs and other indentations, there is a rapidly expanding caravan and motor car side to tourism in Scotland besides the hotel side. This involves caravan sites, chalets, bed-and-breakfasts arrangements, motels and restaurants. A lot can be done by a Scottish Tourist Board to knit this together, but the composition and funtions of the Scottish Tourist Board need careful consideration, as do their relations with the Highlands and Islands Development Board and the Countryside Commission. They are very vague at present.
  Mr. Robert Maclennan: Before leaving that point, the hon. Gentleman ought at least to draw the attention of the House to the extremely generous aid which has been available to the hotel industry in Scotland from Government sources and paid out by the Highlands and Islands Development Board. Perhaps I may at this point put to the hon. Gentleman the question about finance which I had in mind to raise earlier. Does he regard the Government's global total of £11½ million under Parts I and II of the Bill as right or wrong, in view of his right hon. Friend's attitude to public expenditure?
  Mr. Campbell: Until we know more about how the money is to be spent, I cannot answer that. We want to know a great deal more about the Bill and the Government's intentions before we can possibly make that sort of assessment,

  1963
  as we shall wish to do. I mentioned the Highlands Development Board, which has started to do work in tourism. We are concerned with whether some of the projects which it has started will be successful and flourish. We hope that they will, but that is the question-mark hanging over any such projects. Judgment on what is being done will, no doubt, come later.
  Mr. Crosland: As the hon. Gentleman has turned back for a moment to the question of finance, perhaps I may say a word. I shall not take up his point about the Selective Employment Tax, although I do not regard it as correct, since it is generally passed on, but he made a surprising point about initial allowances. I am not sure what his hon. Friend the Member for Oswestry (Mr. Biffen) had in mind, but, if the hotel industry is as unprofitable as the hon. Gentleman says, investment allowances will do no good because there will be no profits to set them against. It is illogical to say that they are better than investment grants.
  Mr. Campbell: The right hon. Gentleman has made his point. In any comparison between investment grants and tax allowances, the right hon. Gentleman has never misunderstood us on this side in our preference for the tax allowance system. Of course, other factors enter into the question. The tourist industry has been hit by other measures. I shall not mention the S.E.T. again, but all manner of other difficulties have beset the tourist industry. One has only to read Lord Crowther's letter to be reminded of many of them. Hotels may not now find business profitable. But, if the hotel industry had not been battered by the present Government as it has, it would be able to carry on profitable business, and the tax allowances would then be of use to it.
  I was coming to the point made by my hon. Friend the Member for Honiton (Mr. Emery). We note that it is the new British Tourist Authority's function to deal with activities abroad for the whole of the United Kingdom in promoting tourism and attracting visitors to this country, including Scotland and Wales. How will it be done? There will have to be special arrangements—I am sure that my hon. Friends concerned about
  1964
  Wales will agree—to make sure that the tourist attractions of both Scotland and Wales are separately promoted abroad. We cannot afford to neglect this, because Scotland and Wales have special appeals for prospective visitors to this country.
  Next year in Edinburgh there will be the Commonwealth Games, and we expect a large number of visitors there. Also, I expect to see and hear about a lot of visitors in Northern Scotland and other parts of Scotland, coming from Canada, New Zealand and Australia, who will go not only for the Games, but also to visit the birth places of their forebears and to look into family connections—this often happens and is an attraction in Scotland—besides enjoying a good holiday.
  One futher general question on the Bill. When considering Part II, grants and loans, we should have more information about the experimental loan scheme started in 1967. We were told that £5 million was to be available. The latest information known to me, given in answer to a Question, is that loans of up to only £1·7 million had been made by June last. I hope that the Government will give us more information about that. The conditions for the scheme were onerous and arbitrary, but we want to know how it has gone and what the latest position is. It is appropriate to ask that question on a day when Bank Rate has been put up to 8 per cent.
  The Bill is an attempt by the Government at last to do something to help the tourist industry. But it is not clear; it is not using the best methods; and it is plain that there has not been enough consultation. The Government must be prepared for considerable changes in the Bill when it is in Committee.
  Mr. James Wellbeloved: Before the hon. Gentleman sits down, will he—
  Mr. Deputy Speaker (Mr. Harry Gourlay): Order. The hon. Gentleman has resumed his seat.
  Mr. Wellbeloved: On a point of order, Mr. Deputy Speaker. [HON. MEMDERS: "No."] There is only one occupant of the Chair.
  Mr. Deputy Speaker, can you assist me? The hon. Gentleman gave a clear

  1965
  undertaking to the House that later in his speech he would reply to the point which had been put to him—[HON. MEMDERS: "What is the point of order?"] I am coming to the point of order. The hon. Gentleman undertook to reply to the point about a sales tax and his party's policy. He gave a clear undertaking to the House, but he has wriggled off it. Is it not right—
  Mr. Deputy Speaker: Order. The hon. Gentleman has not raised a valid point of order. The Chair is not responsible for the content of an hon. Member's speech.
  5.18 p.m.
  Sir Geoffrey de Freitas: I am sure that the House was much struck by the gracious way in which the Bill was welcomed by the hon. Member for Moray and Nairn (Mr. Gordon Campbell), though I, too, was rather sorry that he did not deal with the tax point on which he was challenged. I am even more concerned, however, by what he said, or, rather, did not say, about Wales. We heard nothing. The hon. Gentleman said that his hon. Friend the Member for Hereford (Mr. Gibson-Watt) would deal with Wales if he caught the eye of the Chair. The Chair will have to be extremely far-sighted if that is to happen, since the hon. Member for Hereford has not been present in the Chamber at all during the debate.
  Sir Keith Joseph: I must defend my hon. Friend. He has had to attend a funeral in Wales this afternoon. He has apologised to his colleagues on this side, but it was not easy for him to do so to hon. Members opposite. There is no discourtesy on his part. He will be here as soon as he can.
  Sir G. de Freitas: I quite understand. I was puzzled because the hon. Member for Moray and Nairn referred to his hon. Friend in that sense at least twice.
  I shall be as brief as I can, because I do not represent a traditional tourist area and I realise that many such hon. Members wish to speak.
  In July, 1967, I raised the problems of the tourist industry on the Adjournment. One of the points I made was on S.E.T. on which I am not convinced by my
  1966
  right hon. Friend's arguments today. But I am convinced about the Bill, and I welcome it very much. It sets up a new Authority which, with Government help, can benefit the industry enormously.
  It is recognised that in 1970 the number of visitors from abroad will probably have risen to about 6 million, and that in the following five years it may be up to 10 million. Where are these travellers to go? We need more hotels in the traditional tourist areas and that case will be argued. But the biggest problem is shortage of hotel accommodation in London. The problem is not only that the number of tourists is increasing, but that the pattern of their travel is changing, with the jumbo-jets to which my right hon. Friend referred. As air travel becomes relatively cheaper, people who are not accustomed to foreign travel will come here, and they will tend to travel in organised groups, particularly in inclusive tours for about 40 people. We have to cater for this.
  For example, a very rich part of the United States consisting of Chicago and its suburbs has a gross national product—if I may so describe it—greater than Sweden's. In view of the enormous increase in the numbers of tourists who have never travelled before, a travel agent in Chicago will find it easier to organise group travel to Continental towns which have adequate hotel accommodation than to chase around London splitting up his party among a number of hotels. I fear that we shall lose to the Continent many of these future travellers unless we provide tens of thousands more beds, especially in Greater London. I am surprised that under the Bill it looks as though we shall provide grants for hotels in Greater London with as few as 25 letting rooms. This figure is too low.
  Our problem will be solved not only by increasing accommodation in London, but also by attracting more visitors from London, not only to Scotland, Wales and Northern Ireland and the tourist parts of England but to other areas that are not so well-known as tourist attractions. I am pleased that the English tourist industry will be looked after by the main British Tourist Authority. At present, tourists are not given enough information about the ordinary English countryside, with its villages, churches, castles and

  1967
  so on, and I hope that the new Authority will cure this.
  For example, my constituency in Northamptonshire, in the heart of England, has some of the loveliest English countryside, with farm land, park land and 69 villages, each more beautiful than the other. But it is not known as a tourist area. There are many other hon. Members representing English county constituencies with many tourist attractions that are not generally known. Furthermore in July, the peak tourist month, tourist accommodation is often available in these areas. Certainly, there is in my constituency, in old modernised coaching inns in Kettering, or in a brand-new hotel in Corby.
  The present B.T.A. has done good work, and I hope that the staff will be able to help the new B.T.A. I have been particularly impressed by what it has done in advertising on the Continent. When chasing the dollar, we must also remember the deutschemark, the franc, and so on.
  I hope that an enabling Order will come on the registration of hotels, so that work can be done on this and on classifying, because here we are far behind many Continental tourist countries. The registration will not only help by giving greater information to travellers, but will also, I hope, raise the standards of accommodation.
  My right hon. Friend referred to the E.D.C. Report on service in hotels. There is much inefficiency in the use of labour in hotels. I trust that hotel keepers will study the report. There is a serious shortage of staff, and, therefore, it is all the more important that there should be no wastage in the use of the staff available. In the report there are some remarkable figures to encourage the planning of that labour.
  We have much to offer the visitor from abroad, but we must offer it at the right time, at the right price and in the right place. Above all, the problem is to have more hotels in London and, at the same time, to attract tourists away from London to Scotland, Wales, Northern Ireland and the ordinary, unknown English countryside.
  5.25 p.m.
  Mr. Jeremy Thorpe: I share the hope of the right hon. Member
  1968
  for Kettering (Sir G. de Freitas) that we can attract more trade to England, but I doubt whether it will be so forcibly attracted by an Authority, which is a strange mixture, being part federal and part national, as far as England is concerned, as opposed to an exclusively English board. The success of Wales and Scotland, and indeed the Republic of Eire, in having separate, distinct national boards is a strong argument for having an English board, and a federal system to co-ordinate all the boards.
  I welcome the recognition of the importance of tourism which is explicit in the Bill and the White Paper that preceded it. I support any Measure that will raise standards in the hotel industry and will inject new capital into it.
  The attitude of the Government, although it is improving, has been somewhat strange over many years. The right hon. Member for Leeds, North-East (Sir K. Joseph) asked the President of the Board of Trade on 13th November last year why there was discrimination against the tourist industry in the investment grants procedure. The right hon. Gentleman replied that the crucial fact was that
  "… manufacturing industry can make a more direct and immediate contribution to our balance of payments than services and distribution."
  He said a little later:
  "… there are sectors of the service and distributive trades—hotels is a supreme example—which can also make a direct contribution, and this is why we have introduced the Hotel Development Incentive Scheme,…"—[OFFICIAL REPORT, 13th November. 1968; Vol. 773, c. 409.]
  The tourist industry as a whole—and it is very difficult to divide it up—makes a supreme contribution to our balance of payments, not only our invisible but our visible earnings. It is one of our most important dollar-earners. Therefore, I rather disagree with the Government when the White Paper says at paragraph 3:
  "Tourism is not one industry. It covers many trades and activities;…"
  Tourism is one industry with many different facets, but it is the industry collectively that is the earner of hard currency and the saver of currency being spent by our nationals abroad.
  Therefore, unless the Bill is used to encourage the development of amenities just as much as for the expansion of

  1969
  hotels, it will have failed in its purpose. I felt that the President of the Board of Trade was giving extremely high priority to the expansion of hotels and rather low priority to the interpretation of Clauses 2, 3 and 4 on the provision of facilities. It is often things like marinas, racecourses and festivals that encourage people to go to certain areas.
  In the South-West our problem is the need to expand our hotels and have more accommodation. But an equally serious problem is to get higher occupancy of the existing hotel accommodation. The British Travel Association has produced a valuable report on tourism in the South-West which says that even during the eight weeks of the high season vacancies are very often to be found. Therefore, we must be very careful not to indulge in over-simplification and to think that increasing the number of hotel bedrooms will in itself solve the problem. Hand in hand with it must go the extension of our amenities.
  Again, before we ask ourselves whether this is manna from heaven, we have to set it against the financial disadvantages which the industry has been facing, and which are considerable. The British National Export Council, referring to the valuable contribution made to our invisible exports by tourism. went on to say:
  "One conclusion emerges—that the Government are not providing sufficient help to enable this country to derive the maximum benefit from its tourist potential."
  The "Little Neddy" for tourism also suggested that the industry should be on the same tax footing as industrial development—for example, as regards building allowances, investment grants, equipment and so forth.
  Even if we accept the figure of £3 million as the sum which may be claimed for improvements by way of grant—and I take the point that the Leader of the Opposition was unreasonable in trying to press for a precise figure on November 13th last, because that turns on the amount of applications made—the money which is to be injected is much less than the incidence of the Selective Employment Tax and the loss of investment allowances which the present Government have brought about. I estimate that the breakdown is £3 million for administration, £5 million for grants and £3 mil-
  1970
  lion for loans, making a total of about £11 million.
  Sir K. Joseph: It is not an injection but a replacement of the existing grant to the B.T.A.
  Mr. Thorpe: That is why I said £3 million for administration, which represents 80 per cent. of the outgoings of the B.T.A., which will now go to the new authority.
  But the Government gave the game away when they refunded S.E.T. for rural hotels in development areas. I was delighted when they did so. Parts of my constituency benefit. But the Government cannot say on the one hand that the refund of S.E.T. will not make a great difference to employment and prosperity in Tourism while on the other hand say, "Look what a tremendous contribution we have made to helping development areas by refunding SET.".
  Mr. William Baxter: It is just for the sake of accuracy that I intervene. It is not true to say that rural areas in development areas get a refund of the SET., for many parts of Scotland which are rural and within development areas—almost the whole of Scotland is inside a development area—do not get refunds. The refund is based on a labour exchange and not a rural area basis, and it is a very inequitable system.
  Mr. Thorpe: That is wholly correct. Perhaps I did not draw the distinction because I am fortunate in the fact that the two coincide in my area. Nevertheless, this is one of the anomalies which I hope will be looked into. I hope that it will be the subject of one of the first recommendations of the new authority.
  Let us set the picture of grants and loans against the fiscal disadvantages placed on the hotel industry. On such a balance sheet, the industry is not much better off. Far more could and should be done by fiscal means if we want to inject capital into the industry and get growth. It is fair to say that the sum total of these grants and loans will go nowhere near to offsetting the recent fiscal disadvantages.
  When the statement was made on 13th November last, the Conservative Opposition were rightly worried about whether

  1971
  we need a statutory Board. [HON. MEMDERS: "Hear, hear."] I am pleased to carry some of their back benchers with me, and I am surprised that the hon. Member for Moray and Nairn did not mention it. On 13th November, the President of the Board of Trade said that a voluntary board is not suitable for administration. Three functions will be discharged—the making of loans and grants, selecting aid projects, and registration. But the present hotel development incentive scheme is operated by an advisory committee of the Board of Trade. Admittedly, that scheme has not been in operation long and has a limited objective, but it did not require the setting up of a statutory board. Likewise, grants to development areas are made by the Board of Trade on the advice of advisory committees. Sometimes I think that these committees could work faster, but the principle is there. If we are to give away public money, there must be control, and my criticism of the Government is that, time and again, public money is dolloped out to Cunard and others with virtually no public control. If we are to safeguard public money, there must be public control, but this does not per se call for the setting up of a statutory board.
  I believe that those advising on priori ties, and certainly the priorities in regard to special projects, should be the regional economic planning councils and boards, which are interested in the economic growth of their areas. The present Government set them up—albeit as appointed and not elected bodies, alas—and their advice should be sought and their views attended to.
  I listened carefully to the right hon. Gentleman's prognosis of the number of officials involved and in my mind I could hear an hon. Member getting up in a year or 18 months' time and saying, "Does the right hon. Gentleman recollect the undertaking he gave on 27th February, 1969, about the number of civil servants employed?" No doubt in the words which the Prime Minister used, the right hon. Gentleman will reply, "There are new responisibilities which the House has placed on us. The House decided that this work should be expanded and I am sure that no one would wish to cut down on the activities of the new authority."
  1972
  The right hon. Gentleman will find that, with the best will in the world, he will find this a promise difficult to keep.
  I come now to the question of registration. Is it necessary to have a statutory board because of that? I welcome the right hon. Gentleman's suggestion for discussion about registration—it is a civilised way of running a democracy—but nevertheless we are being asked to grant great powers without any indication from him of the way his mind is working on the matter. We have not even been given broad guidelines. We are asked to give powers for a penalty of £200, to orders which will require people to provide any information which may be specified, for charging annual or other periodic fees, for registration, for displaying certificates, for inspection of establishments and for exemptions which may be provided for in the Order.
  We are being asked to provide rights involving a considerable degree of intrusion and interference with the liberty of the subject. It may be justified. We want to know more about registration, however. Is it intended that there shall be a massive compendium of about 30,000 or 40,000 establishments which give accommodation? That will not be a handy book for the traveller. Or is it merely to be a technical register so that people who want to invest in various parts of the country will be able to look through the Minister's list? How much is the registration contribution fee going to be? Would we gain so much by the Imperial Hotel, Torquay, making a £200 or £300 contribution to help with the costs of 200 worthy three-bedroomed boarding houses in Clacton? Or is the State to decide standards and make recommendations?
  I recoil from the prospect of the State as the arbiter of comfort and service. It seems that its direct experience of running residential establishments is limited to approved schools and prisons.
  Sir G. de Freitas: What about the Government registers in France, Italy and Spain?
  Mr. Thorpe: The right hon. Gentleman interrogates me sedentarily—I make no complaint. There is the Michelin Guide in France, which is extremely representative, and certainly sells better than anything published by the French

  1973
  Government. All I can say is the Automobile Association, which has some experience in these matters, and which is universally accepted as producing an extremely good guide, estimates that a complete compendium and proper registration would cost something like £2 million. If that be true, it seems that it would be £2 million a year which would either be added to the administrative expenses which are at the moment costed at £3 million, or would be a levy on existing hoteliers, or a combination of both.
  Not only on the grounds of the criminal sanctions, and the right of entry which we are being asked to pass, but also because of the prospective costs, we are entitled to know a little more about registration.
  I want to deal with the creation of Scottish and Welsh Boards and the sort of mixed federal-cum-English authority. I welcome the existence of Scottish and Welsh Boards for two reasons. [Interruption.] I declare an interest, I am only a very small percentage English. I regard myself as a Celt. This is right for two reasons. The first is because Wales and Scotland despite the ribaldry of certain English Members, are nations with their own traditions. It is right that, as in many other things, they should run their own affairs. It is for this same reason that I believe that England should have had the same facilities afforded in this Bill. It is also because Wales and Scotland are distinct holiday areas. I claim that, not on the first count but on the second, there are other areas in the United Kingdom which are equally distinctly holiday areas.
  No one would deny that the Southwest, which has an annual intake of between 8 million and 9 million visitors, with a gross turnover of between £100 million and £120 million a year is a distinct holiday area. For that reason, there is certainly a case for an authority of its own, comparable with other regional authorities which might be set up within England. Speaking for the South-West, we feel that we would be swallowed up by this advisory committee, which is a sort of sub-division of the federal body.
  My criticism of the B.T.A., which in many respects has done a first-class job, is that it does not think, other than in a
  1974
  very centralised manner of advertising places, other than London, Stratford-on-Avon and Windsor. My hon. Friend the Member for Bodmin (Mr. Bessell) went to Paris and New York the other day to check on the sort of publicity which the B.T.A. was putting out.
  There was no publicity at all for the far West, and very little else, apart from what I would call "The Blue Rinse Trail"—which leads from a London hotel to Stratford and the other places which the American ladies like to visit. Since Lord Crowther is mentioned, I hope that he will not take this most extraordinary hotch-potch of Welsh and Scottish Boards and an English Board, somehow blended and submerged in a federal board, as a precedent for any further constitutional innovations.
  I want to raise one particular Scottish matter because the hon. Member for Moray and Nairn (Mr. Gordon Campbell) really did not do himself justice. Although he made many references to ski-ing there was also a good deal of "skating". He raised a significant point on 13th November when he asked:
  "Will the Highlands and Islands Development Board still be responsible for grants and loans to tourism in its area, or will that matter now be taken over by the new tourist board for Scotland?"
  The President of the Board of Trade replied:
  "The answer to the first part of the hon. Gentleman's question is, ' Yes, Sir '"—
  That is to say the grants will continue to the Highlands and Islands Board, and
  "…to the second part ' No, Sir '."—[OFFICIAL REPORT, 13th November, 1968, Vol. 773, c. 411.]
  That is the new Tourist Board will not take it over. If I may, for a moment, discharge the responsibilities of the Conservative "Shadow" Secretary of State for Scotland, I would have thought that there must be hon. Gentlemen, certainly this applies to my Scottish Liberal colleagues, who would be very worried about what the Tourist Board is to do and what its powers will be in relation to the Highlands and Islands Board, which has done an extremely good job of work.
  We run the very great risk of setting up a bureaucracy which will not be subject to any local democratic control. Nor will it necessarily represent the distinctive individual requirements, all of which

  1975
  are competing, of particular holiday areas. The Government are continually getting away from the philosophy of fiscal incentives; loans and grants are very good, they are certainly better than nothing, but more and more the Government will find themselves in a stronger position, and able to say "This tax does not matter", or "That tax does not matter, because we are giving loans and grants."
  The President of the Board of Trade could have been much more helpful towards the B.T.A. He recognised its valuable work and then said that it would be for the Association to decide what it was to do. Since, in a throw-away line at the end of his speech, he said that he was to cut off its 80 per cent. grant because it would be transferred to the new Board, I thought that he had almost made up its mind for it. I hoped that he might have said that there were some very skilful people with great experience of tourism who would be needed in the new set-up.
  If, as I hope, that is in his mind, perhaps the Minister will correct the omission. Anything that can assist tourism, which can inject capital is to be welcomed, but I have very grave reservations about the Bill. Although I do not intend to vote against it, because no one ever votes against money being paid to his constituents or constituency, it has to be considerably amended in Committee, and I hope that it will be.
  5.47 p.m.
  Mr. Ednyfed Hudson Davies: I welcome most of the provisions of this Bill. Two years ago I sat on the Committee which considered the Industrial Development Bill. I regretted then, as did many of my colleagues on that Committee, that no provision was made for any kind of assistance to the tourist industry. The position is now considerably improved. The Government appear to have recognised over the last 12 months the importance of tourism, and this further stage, the presentation of this Bill, means that they are aware that the tourist industry is a proper industry in its own right. It is a very fragmented industry and, as such, needs certain provisions made for it which would not be the case with an industry in which operators are very large.
  1976
  The Bill recognises two basic needs in tourist areas which we have urged upon the Government for a long time. Firstly, if the industry is to thrive, there must be considerable injection of Government funds for capital development. Secondly, statutory Government bodies, financed by the Government, should be responsible for overall planning within the industry, for research and marketing policy, for publicity and promotion, particularly overseas promotion, for the registration of hotels, the maintenance of standards, amenities and service within the industry.
  Much of this is covered in the Bill. However, I have some reservations to which I should like to draw attention, particularly concerning Wales, which is in a curious and somewhat paradoxical tourist position. Our income from tourism in 1967 was £80 million. Wales has one of the highest per capita incomes from tourism in the world. Among European countries, only Switzerland and Austria have a substantially higher per capita income from tourism. However, only £5 million is derived from overseas visitors. Therefore, on that comparison with other countries, Wales comes at the bottom of the list of earners of overseas currency.
  We get a very good share of the domestic market, 13 per cent., which is quite splendid, but only 2 per cent., namely, £5 million out of £235 million, of the sum earned in Britain from overseas visitors. Our great need in Wales therefore is to attract overseas visitors. The domestic market is probably contracting, certainly it is stable at the moment. Therefore, if we are to improve our earnings from tourism, it must be done by increasing our attractiveness to overseas visitors.
  The Wales Tourist Board is most disturbed—and I share its disquiet—that the structure envisaged in the Bill of two Boards, one for Scotland and one for Wales, and a rather different Authority, is exceedingly dangerous. The British Tourist Authority will have specific responsibility for England, together with certain overall responsibilities for Britain as a whole.
  The existing British Travel Association has adequately projected Britain abroad. I am less satisfied that it has adequately projected Wales abroad. I was in Paris fairly recently, and I went to look at the

  1977
  B.T.A.'s showroom. It was evident that it had had a window display illustrating Wales for a very long time—there was a lot of dust on it. There were dolls with Welsh hats and coracles and a large poster with the word "Wales" on it, but there was nothing with which a Frenchman would associate the display with this comer of Britain. From that point of view it was rather wasted.
  We feel in Wales that it is proper that one body should act as the agent for all the tourist interests in this country. Under the Bill, the British Tourist Authority will not act as the agent of the Welsh and Scottish Boards in promoting Wales and Scotland overseas, but will do this in its own right. Those Boards will have no say in the policy of the new B.T.A. As a safeguard, I should like the Secretaries of State for Wales and Scotland to have the right to allocate funds for overseas publicity and promotion of Wales and Scotland over and above what the British Authority will do should they feel it necessary and to supplement the work of the Authority.
  My second reservation—and again I express what I know to be the views of the Wales Tourist Board—is that the fact that the right to prepare and finance schemes for improving tourist amenities should lie solely in the hands of the British Tourist Authority is a great limitation. Such powers should also be vested in the Welsh and Scottish Boards. I have always advocated when tourism has been discussed in the House that we need in Wales a statutory body with the right to prepare and finance what it thinks fit and to improve amenities. Instead of being able to make a direct approach to the Secretary of State or the Board of Trade, the Scottish and Welsh Boards will have to work second-hand through the British Tourist Authority.
  The Bill gives adequate control over what the British Tourist Authority will do in promoting schemes. There is control by the Board of Trade; the Board of Trade will have the right to alter schemes which have already been approved; Treasury permission must be obtained; and any scheme must be put before the House. This is ample control and, within its limits, I should have thought that trust could be placed in the members of the Welsh and Scottish
  1978
  Boards, when they are appointed, to prepare and finance schemes in their own right rather than having to work through the B.T.A.
  When the Secretary of State for Wales is considering the appointment of the members of the Welsh Tourist Board, I trust that he will bear in mind one small matter. Although the bulk of the population of Wales lives in South Wales, and although many parts of South Wales are extremely valuable as tourist areas, most of the tourist industry in Wales is in North Wales. I hope that my right hon. Friend will bear in mind that the coastal counties of Flint, Denbigh, Caernarvon and Anglesey, together with Merioneth, where there is a rather different sort of inland interest in tourism, account for £47 million of the £80 million earned from tourism in Wales. Caernarvonshire, my own county, earns a quarter of the total income from tourism in Wales—£21 million. I hope that this will be reflected in the choice of personnel on the new Wales Tourist Board.
  I wish to say a few words about the grants and incentives proposed in the Bill. They are to be welcomed as the right way to improve and stimulate the tourist industry. However, I should like to make two points. First, I wish that the minimum qualification for assistance had been set lower to bring the smaller hotels within eligibility. We have many good small hotels in Wales which would like to take advantage of the Bill, but they are not big enough to qualify.
  Secondly, Wales has a special problem which has been well illustrated by the comprehensive research project carried out by the Wales Tourist Board. Although there are 400,000 tourist beds in Wales, there are only 1,500 bedrooms with private bathrooms attached. Undoubtedly our great problem in Wales—I am not sure that this applies to the same extent elsewhere—is that we must increase the number of rooms with private bathrooms. There should be flexibility to give the Secretary of State for Wales the right to empower for Wales a special scheme of, say, 50 per cent. cash grants for private bathrooms in hotels which otherwise are suitable for overseas visitors.
  Incidentally, I should like the assurance of my hon. Friend the Minister of State that expenditure qualifying for grant as listed in Clause 9(4) will include

  1979
  expenditure which may result indirectly rather than directly from increasing the number of letting rooms. A completely different central heating system may have to be installed. Dining rooms may have to be extended. Will expenditure on such matters be qualifying expenditure for grant?
  I wish to express my pleasure that the Bill applies to the whole country and does not again commit the nonsense of assuming that hotels in development areas have a greater need than hotels outside development areas. Several references have been made to S.E.T. exemptions applying only within parts of development areas, those areas having been selected on the basis of a low ratio of workers in manufacturing industries. Such a situation exists in my constituency in the town of Llandudno, which is the only corner of my constituency not in the development area. Although the ratio of workers in manufacturing industries is probably lower there than in any other part of my constituency, it gets no advantage from S.E.T. exemption, because it is outside the development area.
  It is a mistake to confuse there two factors. Development areas are areas which would benefit from industrial growth, whereas the weakness of the tourist industry is that it is seasonal. In Llandudno, hotels must employ key hotel staff throughout the winter, for whom they must pay S.E.T., although they trade only for about five months of the year. If hotels are to keep their key staff they must employ them throughout the winter. It is the seasonal nature of the industry which needs to be catered for, and this has nothing to do with the accident of falling either within or outside a development area.
  In selecting areas within development areas for exemption from S.E.T., the reason given was that these were areas with a low concentration of manufacturing jobs. Conway, in my constituency, was included for S.E.T. exemption. Llandudno is adjacent to Conway but, being outside the development area, it was not included. I thought that it would be interesting to get the figures of manufacturing workers in Llandudno and in Conway, but I found that such figures had never been kept. These two labour exchange areas have always been lumped together as one area, so that figures were
  1980
  available only for Llandudno and Conway together. I do not know how on this basis it could be said that Conway qualified for inclusion, but not Llandudno. It makes no sense, since the figures were not available in the Minister's office when the decision was made.
  The Bill makes no distinction between the treatment of those hotels within and those outside a development area, and I welcome this. The Bill recognises that the needs of the tourist industry are special needs, and it goes a long way towards meeting those requirements.
  Mr. W. Baxter: The Bill makes a distinction between hotels within development areas and those outwith development areas. The grant in one case is £1,000 and in the other case it is £1,200. This is dealt with in Clause 12.
  Mr. Davies: My hon. Friend is correct, there is a marginal difference, but it is by no means a difference of principle such as in previous cases of exemptions from S.E.T. It is nothing like as much.
  Mr. Baxter: This is a matter of principle; exactly the same principle applies, a distinction between fish and flesh. This is an important principle; there should be equality of treatment for all, and that is why I have objections to certain parts of the Bill.
  Mr. Davies: If my hon. Friend is on the Standing Committee he will be able to put his case more fully there.
  6.5 p.m.
  Mr. Michael Noble: I wish to raise shortly, one or two points of general interest. In listening to the right hon. Member for Kettering (Sir G. de Freitas) and the hon. Member for Conway (Mr. Ednyfed Hudson Davies) I have envisaged beautiful English villages and the glorious parts of North Wales. There is a vast range of countryside in Britain which is so attractive to the tourist. The tourist industry is enormously important; it is basically one industry, although it has many parts.
  I am sad to have to speak discouragingly on something which the Government intend to be helpful, but my disappointment with the Bill is because it seems to continue the myth which the Government have continually tried to develop that there is something basically

  1981
  better in making things than in being part of the service industries. I wish that the Government would change their mind and get down to the basic principle which the hon. Member for West Stirlingshire (Mr. W. Baxter) was trying to make. The tourist industry is part and parcel of industry, and the whole of industry should be treated in exactly the same way.
  I take issue with what the President of the Board of Trade said, which no person off the Government Front Bench believes. He said that in some curious way S.E.T. postively helps the tourist industry. This has been said from the Scottish Office over and over again, but it is believed by nobody outside that limited corner. The truth of the matter is that extra costs, whether they arise from S.E.T. or an increase in petrol prices, can be passed on to the consumer, but the tourist idustry must be competitive and, if it has to bear all the extra costs distributed by the Government, it will price itself out of the market. Let us not think of tourists being rich people from Chicago or Texas. The vast bulk of them are people who travel on package tours, and they are the people we must think of.
  The Bill does not deal with the restaurant trade, which, in many parts of the country, is just as important to the tourist industry as the hotels. Many people visiting outlying districts stay in bed-and-breakfast establishments and need to eat elsewhere, and I appeal to the President of the Board of Trade to think carefully about this before the Committee stage of the Bill.
  The President of the Board of Trade gave a broad indication of the composition of the boards, but I hope that we shall have a much clearer indication of the people he has in mind. It is difficult to judge the merits of Ministerial thinking without knowing who will be in charge of the boards. I hope that he will stick to professional, functional people and is not led away, and the hon. Member for Conway was advocating, into picking people because they come from a certain area. This would be disastrous.
  I add to the plea made by my hon. Friend the Member for Moray and Nairn (Mr. Gordon Campbell) that we need to know what will be the position with the Highland Development Board. The Board
  1982
  has had a larger amount of money to spend on the promotion of tourism than is envisaged for the Scottish Tourist Board. It is doing a very good job. Perhaps it has made certain serious mistakes in its dealings with tourism, but we accept these as inevitable. We wish it well, and it will be interesting to hear what is to be the relationship between it and the new Scottish Tourist Board.
  I agree with the hon. Member for Conway that it is nonsense to talk about development areas in the same terms when we discuss industry and tourism. They are not the same types of areas or bodies. I hope that we shall have some more intelligent thinking about it by the time we come to the Committee stage.
  It is interesting to see that of the 10 or 12 hotel projects known to be going forward in Scotland during the course of the next year or two, five are in Edinburgh, five are in Glasgow and one is at Abbotsinch, which is Glasgow's airport. Although they may be useful for many business people and some tourists, they do not provide the extra beds which are required over a wide area of the country where many foreign visitors wish to go.
  During the months between now and the General Election I hope that my right hon. and hon. Friends will give serious thought to the future of this industry so that they will be able to produce a policy which treats the tourist industry as part and parcel of all our other industries, and find an equitable and fair method of giving it the help which is so badly needed.
  6.12 p.m.
  Dr. Hugh Gray: I have the honour to represent a constituency in which the tourist industry is of great importance. It contains not only the town of Great Yarmouth, which is famous as a seaside resort providing such varied entertainments as seals on Scobie Sands and a municipally-owned racecourse, but also the Norfolk Broads, on which boating holidays can be enjoyed, and the lonelier parts of Norfolk in which the contemplative pleasures can be engaged in. We are reminded of them in the paintings of Crome and others.
  I hope that the establishment of the Authority is only the first step in an intended federal structure. Like other regions, Norfolk needs its own board

  1983
  preoccupied with its own local problems.
  A previous speaker mentioned amenities. Alas, many of these are fast disappearing. If foreign visitors are to increase in numbers, as I think they will—the trickle of Dutch and French visitors to the area is becoming a stream—attention must be given to this point. Norfolk cider is disappearing. It is becoming impossible outside the houses of one's friends to enjoy free-range turkeys and Norfolk ducklings. In Great Yarmouth, many of the bloaters are not, in fact, Yarmouth bloaters. These are the kinds of problems with which such a board would have to occupy itself.
  In the past, the B.T.A. has suffered from being in London and not having local offices throughout the country. I hope that many of the services that it has provided will not be lost. As one who has worked as a guide and courier, I have in mind the regulation of guides in London that it has introduced. It examines would-be guides and registers them. It ensures that foreign visitors to London receive adequate service from people who are skilled in history, archaeology and a knowledge of modern London. This is the kind of service which should be provided throughout the country and, once again, it seems that it could be provided more easily by regional boards.
  I welcome the grants which will be given to hotels, but I cannot find any definition of "hotel" in the Bill. I hope that we shall be told which hotels will be able to qualify for grants. I also hope that many private hotels and even large boarding houses will be included. As a previous speaker has said, for example, there are not enough bathrooms available and the demand is increasing. I hope that the word "hotel" will be interpreted in an extremely liberal fashion.
  Coming to Part III of the Bill, if regional boards are not to be established I hope that the registration of tourist accommodation will be done through local authorities, possibly through their weights and measures inspectors. In Great Yarmouth, an excellent town guide is produced listing hotels, boarding houses and private hotels which wish to be included. Occasionally, the county
  1984
  borough council refuses an application for inclusion on the list, and very properly.
  I can see no difficulty in providing a list of approved establishments, provided that inspection is carried out. For that purpose, the necessary local inspectorate must be available. It could be done through the local authorities. In that connection, I hope that it is intended not only to provide money and help to the tourist industry, but also to look at the provision of other services which are required.
  Several hon. Members have spoken of the type of advertising which the B.T.A. has engaged in abroad. Some of it has been good. Some of it has not been. It can be argued that it is inclined to be a little too "precious" at times, concentrating too much on guardsmen and Devonshire teas, which are difficult to find. It should present in real terms the pleasures which are available to our visitors, rough, ready and vulgar though they may be, but supremely colourful and part of our local and regional folklore.
  We should present the pleasures of the uncrowded parts of our country. Too often, foreigners are completely unaware of them. But, to back up the pleasures created by man and nature, we must provide foreign visitors with adequate accommodation, good food and drink. In my view, it is up to the Government to provide the framework within which this can be done.
  I welcome the Bill as representing a first step. I hope that we shall be told that it is only the first of several more that are envisaged.
  6.18 p.m.
  Mr. Peter Emery: I rise to do what I can to further the general interests of the tourist industry in the country as a whole. Many of us on this side of the House feel that the Bill does not do that. It is for that reason that more than 50 of my right hon. and hon. Friends tabled an Amendment, which has not been called, but from which it is obvious that some of us feel that the Bill does nothing like far enough in trying to deal with the major problem of the development of tourism.
  We welcome the fact that, due to constant pressure from this House, from many

  1985
  outside organisations and, not least, the B.T.A., tourism is ceasing to be a downtrodden Cinderella. It is not so long ago that people referred scornfully to guest house keepers and travel agents. It might be said that the only point in favour of the Bill is that, at last, it treats tourism as an industry.
  Tourism is assuming its rightful place It is recognised as earning over £236 million of foreign currency, plus another £115 million earned by carriers transporting foreign visitors to this country. Tourism also earns more United States dollars than any other industry.
  Let it be clearly understood by all that we think it is wrong, and perhaps a diabolical liberty, to present the Bill as setting out to deal with the basic problems of tourism. Perhaps it should be termed the "Development of Foreign Tourism Bill". I would go along with that, because that would be a fair description. It should not be duped as dealing with the whole industry or as a Bill to establish special tourist treatment for the minority Celtic fringe. Scotland and Wales emerge as two areas of Great Britain, each to be given their own tourist board, yet each contributing only about 10 per cent. of the tourist trade of the United Kingdom—and jointly less than the contribution made by the Southwest alone.
  I do not wish to be parochial. I believe that there should be one British Tourist Board, and that all areas should be dealt with as suggested by the English Advisory Committee. However, it seems strange that Scotland and Wales should be given a specific statutory creation with powers to act, and the English committee remains in an advisory capacity. If we are to talk sensibly, surely there should be the same treatment for all areas.
  I pay particular credit to the British Travel Association. It has done a first-class job. It has been responsible, more than any other organisation, for the benefit that tourism has brought to this country.
  I believe that the B.T.A. should continue in operation until the Maude Committee has reported. If there are to be varied regional groupings thoughout the country, that would be the time to make up any breakdown in regional advice
  1986
  which could take the place of the authority of the B.T.A.
  I considered that in the opening remarks of my hon. Friend the Member for Moray and Nairn (Mr. Gordon Campbell) we were seeing an alteration in the view of the Conservative Front Bench. This was good, solid stuff, criticising much of what the Government had not done for tourism. I am sorry that the Conservative Party has not been willing to make it clear that many of us believe that this is a measly Bill. We are afraid to vote against it because it gives to some of our constituents a sum of money.
  This is a strange and wrong attitude, particularly when nearly everybody on this side of the House believes that investment grants are the wrong way to give investment encouragement. Although it may be bringing it into equality with industry, if we believe that something is wrong at the start we do not bring any benefit by increasing what is wrong. That is exactly what the Bill does concerning investment grants.
  We have heard from the President of the Board of Trade a great deal of praise for the "Little Neddy" and for the B.T.A., both of which axe financed by his Department. However, both organisations have suggested other means than investment grants as the best methods for encouraging the building of hotels. Therefore, it seems strange that the Minister should subsidise certain authorities, recognised as being the major instruments in the hotel and tourist industry, and not take their advice on the best methods to assist in the building of new hotels and the improvement of bedrooms in existing hotels.
  Much has been said about the abolition of S.E.T. I believe that my right hon. Friend the Member for Argyll (Mr. Noble) is right in pinning down the Government, because they are trying to get off the hook. If they believe that S.E.T. will encourage greater investment in the hotel industry, they know nothing about modern methods of cash flow or the judgments that have to be made on the profitability of a project when the investment has been completed.
  It is all very well the Government saying, "But the industry can carry it." This is true, but the Government must be frank. If S.E.T. were abolished, I do

  1987
  not believe that cost pricing in the industry would fall; it would be used for further investment or profit, both of which would be a direct benefit and encouragement to the industry.
  In the reasoned Amendment we paid particular attention to communications. This has not so far been mentioned. One of the biggest factors with which the tourist industry has to cope is getting people to tourist centres. Here I point my finger in criticism at the Government. The President of the Board of Trade said that they have included this factor. I do not wish to go into the question of the spine road in the West Country, but this would encourage the tourist industry there.
  To be regional, the West Country accounts for 20 to 22 per cent. of all holidays in this country. The Government frequently pay no attention to the import saving factor here. The encouragement which has been given in public spending on furthering the West Country compared with other parts of Great Britain is negligible, unless that money has been found by the South-West Travel Association. The Government are to be criticised for that.
  I should like to pose four questions arising from the Bill. What are the Government's intentions about the level of occupancy? One of the biggest factors with which the ordinary hotelier has to cope is that the season is too short. How are the Government thinking of setting about ensuring that seasons can be extended, whether for conferences or for special projects? This concerns all tourist resorts. If the season can be extended to a 14-, 15- or 16-week period, that will be of major assistance for the profitability of the hotel industry generally.
  Why do the Government wish the new B.T.A. to hold shares? What is the object behind that? I am always a little suspicious when I see another statutory board being given specific powers which are slipped in the Bill rather late just as another matter. If there are genuine reasons, let the Government say what they are so that we know.
  What has been the cost of the previous hotel loans scheme which was to be the saviour of the tourist industry about 24 months ago? The £5 million provided has not been used. What has been the
  1988
  administrative cost of running the scheme?
  Next, I propose to refer to something which is not particularly popular in certain sections of the tourist industry, the modernising and providing of better camping sites. If we want to encourage people to stay here, we must provide good facilities for camping and caravanning. We do not need a statutory board for this purpose. This is something the Government could do themselves. They ought to have put their minds to this problem long before now. What will the Bill do to provide that kind of improvement?
  The Bill will, of course, do something. It will create a costly and unnecessary hotel registration scheme which has been condemned by the Hotels and Restaurants Association, the very body which it is meant to assist. It will provide special and favoured treatment for small minority interests of Wales and Scotland. I believe that all the areas should have similar standing, and that there should be only one statutory board for the whole country. The Bill provides for discretionary grants. The Government are to give away taxpayers' money with no assurance of how, where, or on what criteria the money is granted. We are being asked to approve the Bill without having any of the necessary information before us.
  Nor do we know whether the same criteria will apply to different schemes in different parts of the country. Will the same criteria apply in Exmouth as in Edinburgh, in Sidmouth as in Scotland generally, when it comes to providing financial help for improving hotels or providing new buildings? If the same criteria are not to apply throughout the whole of the tourist industry, the industry will have every reason for criticising the Government.
  I can find little reason for supporting the Bill. This is why a number of my hon. Friends and I are sorry that we cannot express our feelings by voting for the Amendment. Had it been selected, we could have expressed our feelings about what I can only term a very inadequate Measure.
  6.33 p.m.
  Mr. Edward Milne: I am sure that the hon. Member for Honiton (Mr. Emery) will forgive me if I do not follow

  1989
  him too closely. The right hon. Member for Devon, North (Mr. Thorpe) is right when he says that the tourist industry is not a combination of industries, but an industry in its own right. As such, it has had an impact on many other aspects of holiday making, and has played a major rôle in increasing exports and in import saving.
  I agree with the tribute which has been paid to the B.T.A., but I think that if one looks at the opportunities which have been presented during the last decade for the development of the holiday trade one must admit that in many ways it has failed to take full advantage of the situation to expand the industry.
  I hope that the Minister will consider again this question of setting up tourist boards. When my right hon. Friend the President of the Board of Trade made his statement to the House about introducing tourism legislation, he said that all three boards would be compact and functional, indeed, that the Government would welcome a further development of regional and area tourist associations. I am sure that no one would expect me to say that we should have one tourist board for the whole of Britain, but that is precisely what I do want to advocate, because the concept of separate boards for Scotland and Wales does not fit into the tourist needs of the country.
  I consider that there is a case for having a separate tourist area covering the County of Northumberland and the southern part of Scotland, rather than having one for Scotland as a whole. The Highlands and Islands Board has to cope with different and differing problems from those in the south of Scotland, and one could list six or seven areas which have problems of their own. I shall not bring in the regions, because I do not consider that the regions which are necessary for local authority or industrial development purposes are necessarily the same as those which should be set up for the tourist trade and the holiday industry.
  I think that we have been a bit piecemeal in dealing with the question of tourist boards. It would have been far better to have had one board for the whole of Britain, and then to have established tourist areas in various parts of the
  1990
  country, such as the Lake District, and Northumberland. I shall not elaborate the advantages of Northumberland over other areas, but in case anyone challenges that let me add that I am prepared to discuss the matter at some other time. I should like the Government to consider this question of area boards and their functions, because I do not believe that a board which deals with the whole of the country is able to deal with particular parts of areas.
  Different speakers today have dealt with their areas and the opportunities they present for attracting tourists and holiday-makers, and this is what makes the Bill so important. For the first time for many years holiday areas are being given the opportunity to expand and to take advantage of the situation. This being so, I think that we must lay down standards which will not only attract people, but will make them feel that they are getting a good return for their money, and, what is more important, will make them want to come back.
  I do not want to single out particular areas, but some boarding-house and hotel associations have done a first-class job in raising the standards of the hotels and boarding-houses in their areas. Indeed, some have imposed some kind of registration. They have laid down standards below which hotels and boarding-houses in their area must not fall.
  There have been limitations. Some hotels and boarding-houses have got through the mesh of the local grading scheme, but in the main this kind of scheme is being worked throughout the country. If I was drawing up a grading list of the local authorities, seaside resorts and other holiday places that have done this kind of thing, possibly I would put Blackpool and Whitley Bay at the top and Brighton at the bottom. Hon. Members are entitled to relate their own experiences, but that would be my grading after a number of years spent not only on holidays but at conferences as well.
  It has been said that one of the difficulties facing the holiday centres is that the holiday period is telescoped into too short a part of the year. Indoor facilities, extended facilities for holiday resorts and conference halls were mentioned. The question of conference halls, which is possibly the best way of extending

  1991
  the holiday season, ought to be examined by five or six of our major resorts. While not every seaside resort would be happy about having a Conservative Party conference—I may be biased in this matter—they have the choice of the T.U.C., Labour Party and other major conferences that are moving around the country.
  On the question of hotel registration, I hope that my hon. Friend will be able to have a look at the Trade Descriptions Act to see just how far the brochures of some of the hotels in this country, and particularly the London hotels, fit in with the requirements and demands of that particular legislation. I would also hope that we would be able to persuade not only the hotels in this country, but those abroad as well, to have a simpler system of hotel symbols. The kind of symbols we get in brochures, guide books and other material mean little or nothing when one moves from one country to another, so perhaps we could have brochures and guide books available for use abroad, to attract people to Britain, with symbols indicating not only the standard of hotels—I am not thinking of "starring"—but the type of facilities a hotel provides. If that could be done on an international basis, through the different travel and tourist agencies in Europe and the world, it would make for simplification and the attractiveness of our own tourist industry would be enhanced as a result.
  I was a little surprised at the heat generated by some hon. Members on the question of the Selective Employment Tax and then to see the retreat that was staged when it was pointed out that, far from being an imposition on the hotel owners, the tax is actually an imposition on the residents and visitors in hotels, because when I move about the country I realise, on looking at my hotel bill, who is paying the Selective Employment Tax and who is not. In the main, it is certainly not the hotel owners who are doing so.
  Mr. Mark Woodnutt: While it is true to say that this happens in places like Claridge's and other such hotels, is the hon. Gentleman really suggesting that seaside hotels in the Isle of Wight, Hastings and elsewhere on the South Coast, which charge inclusive terms for a week's holiday, automatically put up their rates to cover S.E.T.? If he is suggesting that, he is quite wrong.
  Mr. Milne: I have not stayed at Claridge's, but having stayed at small boarding-houses and hotels in various conference centres since the S.E.T. was introduced, I believe that it would still be fair to say that while it is not levied on the customer in small hotels and boarding-houses to the same extent as it is in larger hotels, nevertheless to a considerable extent the cost of S.E.T., even in establishments of that kind, is being met by the residents and not by the owner.
  Mr. W. Baxter: Does not my hon. Friend recognise that S.E.T. is paid irrespective of whether anybody is staying in the hotel or not? It is based on the number of people who are employed there. This is a tax that has to be paid even if one does not earn it. May I remind him of the simple fact that many small hotels are in grave financial difficulties owing to the imposition of this tax?
  Mr. Milne: That is an entirely different question. My hon. Friend knows full well, as I know from my own experience of Whitley Bay and other places, that, in the case of many of the smaller establishments, if there are no residents in the hotel people are very seldom employed by the owner. But it does come back to the point made by the hon. Member for Honiton, with which I agree, that it is the amount of investment and the cash flow in regard to the imposition of S.E.T. which are factors in this. Nevertheless, a comparatively high proportion of S.E.T. is met by residents, not by owners.
  I was pleased to note the other day an article in a leading newspaper on the abolition of tipping. I say that not because my own town happens to be Aberdeen, but in the interests of the hotel industry. The quicker we get away from tipping and the 10 per cent. surcharge and other such things and charge a flat rate for the services offered to residents, the better it will be for all concerned and the easier it will be for hotels to carry out their administrative work.
  Mr. Kenneth Lewis: I go some way towards agreeing with the hon. Gentleman on the question of tipping, but this question comes up year after year. The difficulty is that

  1993
  people will tip. One cannot stop them tipping. The people who tip the most are our foreign visitors. If we were to abolish tipping many American visitors would still insist upon giving tips.
  Mr. Milne: I would think that the hon. Gentleman, of all people, would have been the first to agree with me on the question of the abolition of tipping. I have mentioned my own origins in this connection and I would have thought that he shared my view.
  I make one final plea to the Minister. If we are serious—and the Government have indicated that they are serious in introducing the Bill—over the development of tourism and the tourist industry, then there is sufficient need for a Minister of Tourism. This should not merely be handled by a Department of the Board of Trade, which is already fairly well loaded with a wide range of numerous responsibilities. I hope that in accepting the Bill and bringing it into legislative effect we will take note of its contents and will appoint a Minister to be responsible for its administration.
  6.50 p.m.
  Mr. R. J. Maxwell-Hyslop: I have three propositions to put to the House. First, although the Bill undoubtedly has some elements which will help the tourist industry, its essential structure is so distorted that it should be rejected and then reintroduced with a structure related more realistically to the geographical pattern and balance of tourism.
  Secondly, after the Bill had its First Reading, and was printed, a reasonable time should have been allowed before Second Reading, so that interested parties—with perfectly legitimate interests—whether local authorities, tourist and travel associations or Members of Parliament, had proper time to study it and consult those with expert knowledge. I cannot believe that any hon. Member in the Chamber—although there are not many here, anyway—is happy that he or she has had adequate time to discuss the Bill with his local authorities. The local authorities themselves have not had time to decide their view. Not only is the structure of the Bill defective, but time for consultation has been inadequate.
  1994
  Thirdly, because of the form in which the Bill is drafted, it cannot be rectified by amendment. The essential distortions are in the Long Title and, because of the way in which the Money Resolution is drawn, this cannot be amended. That is why the Bill should be rejected completely, so that it can be corrected and reintroduced. That is the only way to get a pattern established statutorily with which we would want to live. By the time that the Bill has gone through the House, it is highly unlikely that Parliamentary time will be found for another. This is the time to send it away.
  The Bill is not in a sensible form. At present, 12 per cent. of the tourist capacity—that is, people multiplied by the number of nights that they stay in an area—is provided by Scotland, 12 per cent. by Wales and 76 per cent. by the whole of England—including 22 per cent. by the South-West—yet there is to be no Tourist Board for England, and the specific projects which can be financed under Clause 4 are not to be carried out, as in the case of Scotland and Wales, by a Tourist Board, or in the case of England, by what we have to live with instead, an Advisory Committee, but by the Central Tourist Authority.
  It is worth noting that two of the seven members of the Authority are the chairmen of the Scottish and Welsh Tourist Boards, whereas the chairman of the English Advisory Committee has no locus standi on the Welsh or Scottish Tourist Boards. This is not a criticism of either of those boards, but the Bill's pattern bears no perceptible relation to the economic realities of tourism, and this must be wrong. We can only assume that the Government are motivated by political considerations rather than economic or rational judgments.
  The Bill says that the central body will have two duties—to encourage people to visit Great Britain, and to encourage those living here to take their holidays here. That is admirable. Therefore, it cannot be said that although the South-West provides 22 per cent. of the holidays taken in the United Kingdom, that does not count because only 2 per cent. are overseas visitors. It is immaterial to our balance of payments whether we save expenditure leaving this country, or attract it from abroad.

  1995
  To take another example from the South-West, the region on which I am most closely informed, it has the highest tourist expenditure, both per party of holiday makers, and per head, of any area. It is those with the highest expenditure per head which are most likely to be attracted to holidays abroad. This is an important reason for saying that this is just as valuable a service to our national economy as the attraction of visitors from abroad.
  So we must either accept the Bill with a distorted structure which implies an irrational allocation of public funds, because that will presumably be related to the structure, or reject it. We cannot salve our consciences by saying that we will let the Bill have a Second Reading, and try to knock the nonsense out of it in Committee and on Report, since we know that, because of the drafting, that is not possible.
  Faced with that situation, the choice is obvious. We should save the House wasting time later by rejecting the Bill now, not as totally bad or misconceived, but because it needs so much improvement that it would be a waste of time to take it further. The Bill is ill-considered, and the consultations which would have improved it have not been possible. It completely ignores many of the efficient bodies, the local travel and tourist associations, which receive no direct Government subvention, and it offers them no help. It proposes the employment of another 70 people—whether they are called civil servants or not is immaterial—to do what is already done at no charge to the taxpayer by the regional tourist associations.
  This is not an efficient way of doing what the Government propose. We should have a central board corresponding to the present B.T.A., which is doing an excellent job very economically, and a number of regional authorities designed on a basis of economic reality and not of local political pressures. If they are to take funds from the central Government, as I think they should, those funds should be allocated so as to enable them to budget properly, so that they can predict staff needs, and these funds should be related to the finance which they raise from local authorities and business enterprises within their own areas. Funds
  1996
  made available from the central Government in this way would result in regional and area boards having to provide for themselves by their own efforts, and public money, which is in short supply, would be used to best advantage.
  There is much more that I would like to say on this subject, but as many hon. Members wish to speak I will resume my seat.
  7.0 p.m.
  Mr. George Wallace: Unlike the hon. Member for Tiverton (Mr. Maxwell-Hyslop), I do not want to get rid of the Bill. I welcome it because it represents an important step forward in our economic welfare. I share the concern of the hon. Member for Honiton (Mr. Emery) about the lack of communication and I remind him of the effects of the Beeching axe on holiday resorts. I endorse his remarks about the need for airfields to connect centres and the general lack of facilities for caravanning and camping.
  The popularity of caravanning and camping has grown enormously; it is international in character. The facilities for this type of pastime are totally different from those which obtained when I was a young boy scout and camped amid an atmosphere of smoky tea and burnt porridge. Modern camping equipment has made a big difference to this type of pastime. Campers are, generally speaking, good citizens who are concerned for the welfare and cleanliness of the countryside.
  Britain, as distinct from most other countries, has been slow to recognise the increasing demand by both young and old for camping and caravanning facilities. Some improvement may be expected from the Countryside Act, but its effects will be patchy. I fear that there will continue to be areas of availability and areas of restriction. Camping and caravanning must be "sold" not only abroad but at home, and the various tourist associations must do everything in their power to avoid the mistaken objections that give rise to restrictions.
  The Bill pays much attention to hotels. Indeed, I thought at one stage that hotel keepers had drafted it. I appreciate that assistance for hotels is necessary, but I regret that the Bill does not specifically

  1997
  mention camping and caravanning facilities. A general reference to this past-time appears in Clause 3, but the matter should have been referred to in detail. The need of sites and facilities for camping and caravanning will, I hope, be stressed in Committee.
  I have connections with two ideal tourist centres. I come from the Cotswold country, close to Shakespeare territory. I regret that the hon. Member for Cheltenham (Mr. Dodds-Parker) is not in his place—
  Mr. Bryant Godman Irvine: My hon. Friend has been here throughout the debate and will no doubt be back.
  Mr. Wallace: I was hoping that he would talk about the Cotswolds and leave me to talk about Norfolk. The tourist authorities concerned with the Cotswolds have had little difficulty in popularising the area because it is so closely adjacent to Shakespeare country.
  My hon. Friend the Member for Yarmouth (Dr. Gray) took us on a mini-tour of Norfolk and extolled the beauties of Yarmouth and its wonderful smells. He spoke of the Norfolk Broads and about Norfolk dumplings. But he forgot to mention the "Norwich Canaries" who now play football and Norfolk stew, which is sold in Norwich market and which is not only delightful but is excellent in this cold weather.
  I do not share my hon. Friend's view that there should be separate regional boards, although I agree that the tourist potential of Norfolk and Suffolk has yet to be fully realised. It is a tribute to the boating and yachting organisations—I admit that this has occurred through private enterprise effort—that the Norfolk Broads have been popularised to such a great extent, both at home and abroad. Nevertheless, facilities will have to be expanded to ensure that the waterways are maintained and improved. This must mean greater co-ordination between the various public authorities in the area.
  The potential of this part of the world is not confined to the Broads. The glories of the coastline must be fully realised and in this I know that I have the support of my hon. Friend the Member for Norfolk, North (Mr. Hazell), who will no doubt remind me that I represent not
  1998
  Norfolk but Norwich. This is an indication of the parochial difference; the old difference between county and city which is based on centuries of prejudice and disagreement and which has led to work being carried out independently by the various authorities.
  Norwich has a great cultural attraction for tourists; and I suppose that if I do not extol the virtues of Norwich I will have a local riot on my hands, again because of the parochial approach. I hope that, with the passage of time, this approach will end, because it hampers effort being made on an overall basis for the advantage of the whole area.
  The new organisation envisaged by the Bill should do much to rid us of a lot of local differences and rivalries. It may result in regions as a whole being popularised instead of this work being done on a purely local basis. After all, Torquay may be competing with Eastbourne, but there are both inland and coastal areas which can be popularised together, and I hope that the various authorities will be persuaded to drop their local rivalries.
  Over the years hon. Members who represent Suffolk and Norfolk have been pressing for the economic development of the area. This is another reason to support the Bill. In the main, our thoughts have been of orthodox industrial development, but we must recognise that in areas like Norfolk and other so-called regions of grey development tourism is just as important an economic factor for development as industry. I hope that the Bill will assist us materially to develop areas like Norfolk and Suffolk, which need increased industry and tourism. I therefore strongly support the Bill.
  7.10 p.m.
  Mr. David Gibson-Watt: I apologise for having missed the first speeches in the debate. I had an urgent engagement in my constituency which I wished to keep.
  I make clear that my reason for taking part in the debate is to put before the House my interpretation of what the Welsh side of the tourist industry thinks about the Bill. It is customary to express an interest, and I do so, although I shall not benefit from the Bill because I am not an hotelier.
  In speaking about the attitude of Wales towards the Bill I do not want to overlook

  1999
  the fact that in many constituencies tourism is of inestimable value. Herefordshire, from Symond's Yat and Ross-on-Wye, from the castles and churches of the villages to the hotels and steak bars of the cathedral City of Hereford, is a famous area for the holiday visitor.
  In Wales last year tourism made £80 million. The Welsh Tourist Board played a great part in improving the position. The Chairman, Mr. D. J. Davies, and his staff did excellent work. In Wales as a whole 400,000 beds or bed spaces, which include caravans, are available. Only the Netherlands has a greater density of such accommodation. However, there are only 1,500 hotel beds with bathrooms in the whole of Wales. Cardiff has only 150 and only 10 new hotels have been built during the 'sixties. That is why the average tourist spending is only £16 per head. Last year Wales earned only £5 million from overseas tourists out of a total of £80 million.
  Most overseas tourists want a bedroom with a bathroom. Whatever the effects of the Bill, and there certainly are some, it at least aims at increasing the number of bedrooms and bathrooms. That aim I support and I believe that it is supported in Welsh tourist centres. In this year of the Investiture, which we call Croeso '69, we are made increasingly aware of our shortage of this type of accommodation.
  The harmful effect of S.E.T. has been referred to by a number of my hon. Friends. For a party which says that it is concerned about rural depopulation, it is incredible that the party opposite should have brought in such a tax and kept it for so long. Tourism has to be a big and lavish employer if standards of comfort are to be high. It employs some old people and some who are partially disabled. It is virtually the only industry, except for agriculture, in some areas of Wales. S.E.T. is bitterly resented in the rural areas and small towns.
  Mr. William Edwards: I put the direct question to the hon. Member which I put to his hon. Friend the Member for Moray and Nairn (Mr. Gordon Campbell). If his party got into power, and abolished S.E.T., I understand that it would replace S.E.T. by £. sales tax. Is it the intention of his party to exclude from the operation of sales tax those areas where S.E.T. is now paid by hotels?
  Mr. Gibson-Watt: I do not know from where the hon. Member gets his evidence about sales tax, but I assure him that we intend to get rid of Selective Employment Tax, although his Government do not wish to do so.
  Although I believe that in Wales there should be some form of development areas, I doubt whether the present areas for Wales make much sense for industry, especially for tourism. There cannot be a tenable argument for allowing 25 per cent. grant on a maximum of £1,250 for each new letting bedoom in Aberystwyth and only 20 per cent. on a maximum of £1,000 for each new bedroom in Llandudno, where there are 40 per cent. of the Welsh hotel beds and development is expected and desired.
  Nor does Offa's Dyke—the border between Wales and England—produce a very sensible boundary for a development area. I understand that the extra benefits to which I have referred are to go to Presteigne and Knighton, in Radnorshire, but not to Kington or Leominster, which, by the same drawing of the area, go on paying S.E.T.
  Nor is the position on bank lending of much help in this respect. I should like an assurance that in bringing in the Bill the Government have been shown willingness by the Chancellor of the Exchequer to give tourism top priority for borrowing, or reasonably near it. My hon. Friend the Member for Honiton (Mr. Emery) rightly referred to roads. No question is more important for tourism in Wales than communications. Time and again we have stressed the importance of east-west communications. If these matters could first be put right the necessity for the Bill would be greatly diminished. Because these matters have been wrongly dealt with by the Government the tourist industry in Wales is in the mood at present to welcome the Bill. It is the "lolly" that counts.
  Under the Bill, public money will be spent on promotion. The chairmen and members of the boards will have to be paid if they are to do a good job. There will be a growth in the number of the boards' employees, as was suggested by my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop). There will also be an increase in staff at the Welsh Office to cope with the increased work.

  2001
  By far the largest expenditure will be on the 20 per cent. and 25 per cent. grant for extra bedrooms in new and existing hotels. If full advantage is taken of the Bill the grants will amount to many millions of pounds. How can we be certain that the Government will not fall down on their financial promises, as they did in the Countryside Bill? The hon. and learned Member for Derby, North (Mr. MacDermot) then had the unenviable task in Committee of admitting that for the foreseeable future the Countryside Commission could not properly carry out its new responsibilities because the money was not available. Even Baroness Wootton, Chairman of the Countryside Commission, publicly regretted that this had happened.
  There is nothing worse than raising people's hopes and then dashing them. Will the Minister therefore tell us tonight how much the Chancellor has earmarked for 1969–70? The financial effects of the Bill, as outlined on pages 4 and 5 under Part III are much too vague; so is Clause 20. Unless the Minister can tell us roughly what figure the Treasury has earmarked, the House and the country will be tempted to draw their own conclusions. We know that the party opposite has mortgaged the past. I seek an assurance that by the Bill they will not mortgage the future.
  7.18 p.m.
  Mr. William Baxter: I apologise to the House for not being present when the two opening Front Bench speeches were made. I received a deputation of miners from Scotland and could not be here at that time.
  I declare an interest in hotels as my wife and son run a little hotel with seven bedrooms. Therefore, I claim to have a passing acquaintance with some of the problems of this industry. Over the years under both parties there has been an extension of a political disease. It is a disease which appears to be all too prevalent, and that is interference with the individual and his ability to run his own business and the need to take money from one pocket and to put it into the other. In the process some are losing considerable sums.
  We all agree that the aim and object is to have a viable and expanding tourist industry. We all wish to see good hotels
  2002
  with proper facilities, good bedrooms and bathrooms and as up to date as they can be. We would like there to be a betterment of restaurants throughout the land. This aspect has not received nearly enough attention, but it is of paramount importance to many camping visitors who wish to take all their meals except breakfast in restaurants.
  Another point which can cause no controversy is that there should be considerable emphasis on countryside amenities. Over the years these have been desecrated to a great extent. Shame on the Labour Government and the Conservative Government for allowing this to continue. Whatever else the Bill does, let us hope that it brings encouragement and strength to those who are anxious to preserve that which is good in the nation and to ensure that houses and other buildings are constructed with considerable good taste and a proper regard to their amenities.
  I know that the Tories were just as great sinners as my colleagues in the Labour Government are. Just as the Tories advocated with all sincerity a bed tax in Scotland, in sheer stupidity my colleagues introduced the Selective Employment Tax. This was fundamentally wrong in its conception, particularly for the restaurant and hotel industry. I know that my words will fall on the stony ground of infertility which seems to be prevalent on the Government Front Bench. If this were not so, the Bill would have been a better conception of the requirements of the tourist industry at present.
  This is what I chastise my colleagues for. The concept is befogged and befuddled by the actions of the past. The notion is that, because something was done in the past, it must be continued for the future. It has been argued that if a bad thing like the S.E.T. is neutralised, so to speak, by money being handed back as soft soap, something good is being done. These two bads do not make one good. It is the negation of good administration.
  What does the S.E.T. cost the hotel industry? I heard someone say, sotto voce, £20 million. How much does my right hon. Friend propose to hand back to the industry under this scheme? I hear my informant saying, sotto voce, £13

  2003
  million. What will happen to the £7 million? Does that go to the Exchequer, or does it go to set up these various bodies? It would be far better to leave this money in the pockets of those who are running the industry. They can do without the interference of people who know nothing about it.
  Dr. John Dunwoody: This is a good Conservative speech.
  Mr. Baxter: I claim to be conservative, with a small "c". I conserve that which is good and destroy that which is bad. If that is conservatism, I am pleased to be a conservative. I do not seek to destroy everything. The natural forces of business compel a hotel to be built in one place as against another. There is a danger in enticement by grants or gifts such as under this scheme. This is the octopus which can catch the unwary. People will take a grant and build a hotel in a place or in an area which is not a profitable or good area from a strictly business point of view. People will do this because of the enticement of the grant. This is the octopus of public money being granted without the exercise of sound business judgment as to whether the project is good or bad.
  In the Bill we reach the unfortunate pass that we are seemingly unable to get on without committee upon committee. We must have somebody to tell us how to do this, that or the next thing. This concept is absolutely and fundamentally wrong. A central body should be set up with the broad task of giving general indications of what can be seen in Devon, Cornwall, Scotland, Wales, or wherever it may be. Such a body would whet the appetite of the overseas visitor or the native Briton and make him go and see these places for himself. Without involving myself in any argument about decentralisation or regionalism, areas should be given the power to emphasise the delights of their own attractions. There should not be this monolithic growth of committee upon committee to tell us whether this is good or that is bad.
  If this were being done in a realistic way, this is how I believe it would be done. I have spoken about the setting up of a central body. Secondly, S.E.T must be abolished, because it is an iniquitous tax. Taking my wife's hotel as
  2004
  an illustration, this tax is put upon that small organisation: this 7-bedroom hotel must pay about £1,500 a year in S.E.T. because my wife must provide a service for the casual visitor. Who knows when he or she may arrive? But the organisation must be maintained whether the casual visitors come or not, the tax must be paid. This is the negation of fairness, of good government, and of good administration.
  Mr. William Edwards: As my hon. Friend has declared his personal interest and as this "iniquitous tax" affects his business, may I ask him whether the profitability of his hotel has declined since the tax was introduced? My experience—I thus declare my own interest—is that it has not.
  Mr. Baxter: I can with truth and without fear of contradiction say that the trade in my hotel has declined considerably.
  Mr. Edwards: The profitability?
  Mr. Baxter: There is no doubt but that the profitability of my hotel has declined considerably. I say that with all truth and sincerity. It can be proved. If my hon. Friend will show me his balance sheet, I will show him mine. That is a true Scottish cautionary note! Next, there should be a return to the system of investment allowances. Furthermore, the tax on close companies, which can seriously affect small hotels and small organisations, should be nullified or altered fundamentally. There is no question about that.
  If need be, after the hotels are relieved of the taxes to which I have referred and have been given back their right to investment allowances, if hoteliers or the local authorities find that special grants are required in certain areas, representations can be made to the central authority. I am not very keen on maintaining the business of grant after grant because grants all come from the taxpayer, but, if a grant is required for the common weal—and that should be the only basis on which a grant is paid—it should be paid in a selective manner, in the best interests of the community as a whole.
  I have some notes here, and I have wandered off the mark a little, but those,

  2005
  briefly, are some of the aims and objects which any government should pursue. Let us have no more interference than it is absolutely necessary. [HON. MEMDERS: "Hear, hear."] Grants are not necessary if the natural forces of business are permitted to prevail. [HON. MEMDERS: "Hear, hear."]
  I have heard a few sounds from the benches opposite. The growth of interference, the political disease, as I call it, has affected the Conservative Party as much as the Labour Party. Let that be understood. I am only bringing hon. Members back to a sense of reality, a sense of purpose and a sense of justice, and in doing so I say, "A plague on both your houses".
  7.32 p.m.
  Sir Charles Taylor: We all enjoyed that refreshing, hard-hitting Conservative speech from the hon. Member for West Stirlingshire (Mr. W. Baxter). It was a great delight to me to listen to it. Like the hon. Gentleman, I delare my interest. I have been associated with the hotel industry for a great many years.
  I do not support the Bill. We were promised reasonable time between publication of the Bill and Second Reading, but that has not happened. We have had little opportunity to discuss the matter with our constituents. The biggest industry in my constituency of Eastbourne is the hotel industry, and I should have liked to find out a little more of the views of my constituents and of the many trade associations which are vitally affected by the Bill.
  I regard the Bill as a typical Socialist approach to legislation. If the Government had not mucked up the tourist trade in the first place by imposing the S.E.T.—every speaker has complained about that—by withdrawing investment allowances—most have mentioned that—and by not making planning consents for new ventures easier to obtain, the Bill would have been unnecessary. Incidentally, the main reason why more new hotels have not been built is probably the difficulty of obtaining planning consents.
  The reasons for the Bill all stem from the iniquitous way in which the Government have treated us in the past. I do not refer here to this Government
  2006
  alone. Past Governments have treated the tourist trade badly. But this Government have treated it disgracefully, imposing every sort of hindrance upon it. If, on the other hand, it had been treated as one of the largest dollar industries, as it is, the Bill would have been superfluous.
  Both the British Hotels and Restaurants Association and the Catering Association have said that they regard the Bill as unnecessary and wholly unacceptable in its present form. I heard that Scotland wanted it and that, for some reason or another, Scottish Members must not be upset. I made a few inquiries about whether the Bill was wanted in Scotland. As the President of the Board of Trade read out a telegram, I shall read one, too. Here it is:
  "The Scottish division of the British Hotels and Restaurants Association which represents hotels throughout Scotland wishes to make it known that it is completely opposed to the Development of Tourism Bill in its present form."
  I believe that the Association sent a copy of that telegram to the President of the Board of Trade.
  Almost everyone agrees that the British Travel Association has done a magnificent job in promoting tourism to Britain. Anyone who has visited its offices in New York will be most impressed by what it is doing in the United States. I have heard international hotel keepers, particularly from countries which already suffer from Government tourist agencies, say how much they envy our present virile go-ahead organisation, the British Travel Association.
  The Association is supported by the Government, by local authorities and by private enterprise. Being the main sponsor, the Government are entitled to call most of the tune, but I draw to the attention of hon. Members that £200,000 is collected annually from outside subscribers. The Association enjoys the cooperation and admiration of everyone with a knowledge of the tourist trade. To replace it by a statutory body, by people who will not necessarily be qualified to represent the industry, seems absolute madness.
  The Association is at present governed by a board of experts drawn from businesses connected with tourism—railway transport people, shipping people, hoteliers, travel agents—
  Mr. W. R. Rees-Davies: My hon. Friend will, I am sure, include the absolutely first-class Historic Homes Committee which deals with that side of it.
  Sir C. Taylor: Yes, and, as I say, it is supported by local authorities representing areas where tourism is an important industry.
  These men give their time free. They are not paid, and I do not think that any of them draw expenses. I repeat my question: what can be the point of chucking overboard a highly successful organisation which has publicised and promoted tourism to Britain in a first-class way throughout the world, and put in its place a new Authority appointed by the Board of Trade?
  Will the members of the Authority be paid? Is the new chairman to be paid? Lord Geddes has done the job as a labour of love; he has cost neither the taxpayer nor anyone else anything. What will the pay of the new board be? One hon. Member opposite suggested that a lot of Members of Parliament would be applying for jobs. Perhaps they will if the pay is sufficient.
  The first function of the British Tourist Authority is to replace the highly successful British Travel Association and take on the publicity and promotion of what used to be known as the "Come to Britain" campaign. Its second function, under Part II, will be to administer the grant and loan scheme. A system of grants, to my mind, must necessarily be selective, and it can lead to unfair competition.
  I do not think that many hotel operators in Eastbourne will get grants, because the standard is already very high there. Other parts of the country where the standards are not so high will presumably get the grants, while those who have done their best to look after their businesses will not. That is discrimination.
  If only the industry's earlier advice to the Government had been taken, and the tourist trade had been regarded as an important industry, it would have been placed on an equal footing with other industries engaged in the export trade, and not regarded differently because it supplies services instead of manufactured goods.
  2008
  The former loans scheme was a flop. We have heard that £5 million was set aside, and that less than £2 million has been taken up. Part II of the Bills is more or less an extension of the loans scheme. The Government turned a deaf ear to informed opinion. Instead of doing what I suggested at the beginning of my speech they introduced a grant and loans scheme limited both in amount and duration. The scheme was not something that the industry sought. It is true that it may possibly encourage a few new hotels, and perhaps the addition of a few new bedrooms to existing hotels, but it does nothing to provide the climate in which existing enterprises can operate a viable concern. There is nothing here of a long-term nature that will be much use. All I ask is that the Government create the right climate through suitable tax amendments so that the industry can be placed in a position as favourable as that of manufacturing industries.
  Part III of the Bill deals with registration and classification. Guides are already produced by travel agents, the motoring organisations, the British Travel Association and the British Hotels and Restaurants Association. Local authorities have their own guides dealing with towns and villages in their area.
  Let us make no mistake about it, there is tremendous competition throughout the world to get the tourist trade. It has been suggested that all the countries which are eager to gain more and more of it have trade classification and registration. But that is not true. There is no statutory classification in Germany, Belgium, Denmark, Canada, Holland, the United States, Finland, Norway and Sweden. I am told that that list is far from complete. Spain and Italy publish official classified lists, but the current Italian one weighs 5 lbs. and is very bulky. I have seen it. It is the sort of book one would not wish to try to put in one's hip pocket or even in one's brief case.
  I am told that the British Travel Association set up a working party to examine the possibility of producing a comprehensive guide in Britain, with classification. The working party concluded:
  "…the present voluntary system should be maintained in preference to the adoption of a new system of compulsory registration, classification and grading, where the cost involved would outweigh the benefit achieved."

  2009
  That was after considerable study by people who knew what they were talking about and what they were studying.
  Many people know of, and have used, the Michelin Guide in France, which is not based on statutory powers. The primary question is one of cost. We know from bitter experience that all these boards and bureaucratic organisations are never simple or cheap in operation. The cost of the new set-up is bound to fall on the hotel operators or their clients. The President of the Board of Trade was very vague about what all this will cost. We do not know the total sum that will be given in grants; there is no estimate. It is wrong even for the present Government to issue a blank cheque, which many of us feel would be completely unnecessary if the industry were treated properly.
  If the tourist industry were recognised as really important, if the burden of S.E.T. were removed, if investment allowances were restored, and there were a general easing in the granting of planning consent for new ventures, with only one Government Department instead of about eight to deal with, the industry would go ahead under its own steam, with its own enthusiasm and enterprise.
  For all those reasons, I cannot support the Bill.
  7.48 p.m.
  The Minister of State, Scottish Office (Dr. J. Dickson Mabon): I should like briefly to take up the time of the House. My hon. Friend the Minister of State, Board of Trade, intends to curtail his remarks accordingly, so that the time for back-bench speakers is not diminished.
  I rise for only two reasons—to deal, first, with the comment of the hon. Member for Eastbourne (Sir C. Taylor), and second, with the comments of the hon. Member for Moray and Nairn (Mr. Gordon Campbell) and the right hon. Member for Argyll (Mr. Noble) about the position of the Highlands and Islands Development Board.
  There are so many telegrams flying around that the Post Office must be making a handsome profit from the debate. The hon. Member for Eastbourne spoke about the Scottish section of the British Hotels and Restaurants' Associa-
  2010
  tion. The Scottish Tourist Board, with which I have very close connections and whose members I have met many times not just during the past year but also during the past three years, is wholeheartedly behind the Bill; and the board is representative of the tourist industry in Scotland, including the Scottish section of the B.H.R.A. But it may be a question of mavericks sending the telegrams. I shall pursue the matter, but until the hon. Gentleman spoke we could have said that it was a unanimous view in Scotland that, whatever the detailed defects of the Bill, its general idea was wholeheartedly welcomed by the industry.
  Mr. Nott: Does not the hon. Gentleman agree that it would be rather a peculiar board if it said that it did not want the possibility of money under a new Tourism Bill, and that possibly the Scottish branch of the Scottish Hotels and Restaurants' Association, which is thoroughly against the Bill, is a much more representative body, since it will not get any money from this?
  Dr. Mabon: The hon. Gentleman does not understand the Scottish Tourist Board. It is not a statutory body. It is a voluntary body drawn from distinguished Scotsmen, and the majority, if not all, are in the industry. Once the statutory Scottish Tourist Board is established the present board will cease to exist, and, therefore, the support does not result from self-interest.
  There is popular demand in Scotland that we should treat tourism more seriously than it has been treated by both Governments up to now, and that we should have the statutory board. That may not be the case in parts of England, but it is in Scotland, and I suspect very strongly that it is so in Wales. I gathered from what the hon. Member for Hereford (Mr. Gibson-Watt) said that that was the contrary opinion in Wales. However, I do not intervene to speak of other parts of the United Kingdom.
  I want to refute the suggestion, for the Scottish Office, that a substantial segment of opinion in Scotland has made known its opposition to the Bill. If one partner is opposed, it is news to me, but the majority remain in favour of the Bill.
  We have had experience of the Highlands and Islands Development Board working with the Board of Trade in the

  2011
  operation of various loans and grant schemes, separate from the Local Employment Act. There has been no friction between the two Departments—
  Mr. Crosland Mr. Crosland indicated assent.
  Dr. Mabon: —my right hon. Friend confirms that—and it is true that we have operated the system for some time very successfully. Now, both the new Scottish Tourist Board and the Highlands and Islands Development Board will be under the same Minister. We have had good relations between the two Departments and two separate Ministers and we do not envisage the new system working out differently under a common Minister.
  Mr. Gordon Campbell: The main criticism of the Scottish Tourist Board was that it was not responsible for tourism all over Scotland. I can understand that. It has to be resolved in any future organisation.
  Dr. Mabon: I accept that. The Scottish Tourist Board is substantially in favour of the Bill and is concerned only about the fact that it wants to see the new board responsible for tourism throughout Scotland. But the policy towards tourism in Scotland has been generally considered to be the responsibility of the board. We have yet to work out in detail the functions between the two boards which will be responsible, but there are certain broad principles which we will observe.
  The new Tourist Board will have statutory responsibility for the Hotel Development Incentive Scheme. At the same time, my right hon. Friend the Secretary of State for Scotland intends that the Highlands and Islands Board shall continue its own scheme for grants for hotels in the Highlands where they qualify for one or other supplement. But any applicant will have to opt for one scheme or the other and will not be able to benefit from both.
  My right hon. Friend the Secretary of State is confident that, working in close partnership, the two boards can achieve a great deal for tourism in Scotland and that by these new administrative arrangements, we shall create a good partnership. It is his firm intention to see that that partnership is fostered.
  7.52 p.m.
  Mr. John Nott (St. Ives): I start by asking, what is the tourist industry? It is important to define it before we start. Then we can discuss its problems, how its difficulties have arisen and what is needed to put them right. On these criteria, I want to judge the rather grandly-titled "Development of Tourism Bill" to which the President of the Board of Trade has given his procreative blessing and to which the Opposition Front Bench has given an ambiguous form of muted praise.
  My impression is that the tourist industry is a complex jumble of service activities—travelling, accommodation, catering, transportation and recreation—which, taken together, make up a most important industry. But the complexity of the industry and its dispersal over so many different fields makes it essential, as my hon. Friend the Member for Eastbourne (Sir C. Taylor) said, to try to draw the various strands together into a more coherent whole.
  This vital factor which the Bill neglects needs further discussion and debate. For if those who talk of British tourism are merely referring to the 900,000 beds in boarding house accommodation and the 185,000 hotel beds, such a definition would be too narrow.
  The satisfaction or otherwise of our foreign visitors with the service trades, whether the trains run on time, the facilities at London Airport, whether visitors are treated as aliens on arrival here or as welcome guests—all these intangible items are as important as the question of the dripping taps, worn carpets or insufficient hotel bedrooms here and there.
  The Bill is concerned mainly with foreign tourists, but we must remember that the 4 million foreign visitors each year have to be compared with the 30 million holidays taken by British people in the United Kingdom; and whether 8 million people should continue to decide to go to the South-West or to take their holidays on the coast of Spain, will always be of infinitely greater importance in balance of payments and in economic terms than whether we are able to encourage a few hundred thousand more Americans to visit Stratford-on-Avon, Edinburgh or Wales.

  2013
  Since 1964 the Government have imposed on the general service trades which cater to, or represent directly, the tourist industry a discriminatory tax of £400 million, to which hotels and boarding houses are contributing £30 million. The Government have drastically reduced, if not removed completely, the tax allowances which these establishments have had, it has also imposed an additional £2,000 million in tax on the country as a whole, and it has neglected, on any reasonable view, communications to the holiday areas.
  Each time there has been a crisis in the tourist industry the Government, having first created it, have then responded late with a restrictive remedy. The payments crisis and the growing tourist deficit in 1966 produced the travel allowance, which was damaging to sterling and undignified for every British person travelling abroad. Acute shortages of seasonal hotel accommodation produced the hotel loans scheme with no one to administer it and application forms of such complexity that it became a farce.
  Now the latest move is this pathetic Bill, which will channel an additional £8½ million of new money into the tourist industry as compared with the extra taxation of about £400 million on the service industries through Selective Employment Tax, and probably about £50 million specifically on hotels and restaurants if we use the narrower definition of the "tourist trade". That figure is composed of £30 million for S.E.T. and £20 million, which is about what they have lost in tax allowances since 1964.
  As I understand, the new Authority will receive about the same as the B.T.A.—probably about £3 million. Another £500,000 will be available for the administration of the Scottish and Welsh Boards and this will be in addition to what the Highlands and Islands Development Board is now receiving for the development of hotel accommodation in Scotland and of the Scottish tourist industry.
  I do not greatly mind the Government having their policy dictated to them by the Scottish Nationalists, but I do object to my constituents having to foot the Bill. At present, the South-West Travel Association gets an indirect grant from the Government of about £12,000 a year. And yet it yields in holiday terms nearly
  2014
  as much as the whole of the Scottish and Welsh tourist industries put together. I have no fundamentalist objection to transfer payments being made from my Cornish constituents to Scotland for their regional development, but if the money is for regional development than let it be stated as such. Cornwall has an important holiday trade, yet the aggregate income is lower than in the Scottish Highlands and in Wales. I see no reason, therefore, why my constituents should have to make a transfer payment to pay for Scots hotels. That is wrong. The balance of the Bill, as my hon. Friend the Member for Tiverton (Mr. Maxwell Hyslop) said, is incorrect.
  I come now to some specific objections to the Bill. I want to quote from the British Hotels and Catering Association and the Catering Association of Great Britain. These bodies, the largest in the tourist trade, find these proposals
  "…not only quite unnecessary but quite unacceptable ".
  They express the hope that all Members will oppose them. I am interested to hear that the Scottish branch of these great associations has also objected to the Bill and asked Members of Parliament to vote against it.
  The Associations claim, and rightly, that the abolition of the B.T.A. is wrong. The Minister said that the B.T.A. can continue if it wishes to do so, but since he is removing 80 per cent. of its income and giving it to someone else he is not giving that body much opportunity to continue, and he knows it. The B.T.A. has been a voluntary body, composed of experts drawn from every part of the tourist industry. It has collected voluntary subscriptions. Why does the Minister want to get rid of something which has worked perfectly well without much administrative burden on the public purse and replace it with a statutory board?
  Then there are these special projects. What are they to be? Are they to be ski resorts for the Swiss on Snowdon, or are there to be projects in Aberdeen to encourage Mediterranean males to go there for the sun? Presumably these special projects will not be economic ones, because otherwise the industry would produce the facilities themselves. They are one more example of the false

  2015
  belief that Whitehall, or Welsh or Scottish bureaucrats, appointed by a Minister are better able to judge the needs of an industry than those who practise in that industry, namely, the hundreds and thousands of large and small hoteliers and guest house owners whose livelihood and savings depends upon the making of a correct economic judgment.
  Let me transfer my affection for one moment to my own Front Bench. It is nice to have three speakers from the Front Bench here today and I am delighted with it. I do not mean, in saying that, any disrespect to my right hon. Friend the Member for Leeds, North-East (Sir K. Joseph) or to my other hon. Friends who have spoken. They have shown great interest in this subject and I look forward to hearing what my right hon. Friend has to say.
  If I was a Scot I suppose that I would not want to vote against the Bill, even though the Scottish Branch of the Association I referred to earlier would have asked me so to do. But I think that I would have to examine my conscience, as a Conservative, in arriving at that view because for many months my party has stood out firmly against discretionary industrial grants, the proliferation of Government appointed boards, and the escalation of Government expenditure of a discriminatory kind. Yet now we are proposing to override all these principles in case our vote against the Bill should be misunderstood.
  In my view, all great political parties are in the business of educating the public to their views, not just following conventional opinion, in case they are misunderstood. As for the suspicion that the tourist industry will not understand a vote, this is a typical piece of politician's arrogance, the type of paternalistic view which led the Macmillan Administration to become increasingly interventionist in our industrial life. The tourist industry knows where its interests lie only too well. Most hoteliers know just as much about the Bill as my hon. Friends or myself. They can form their own judgment on it and we should not be frightened of our vote being misunderstood.
  What should the correct policy for my party be? Having been rather critical of the Government, having perhaps made
  2016
  some implied criticism of my party's attitude towards the Bill, I ought to give some answer. Our policy should be crystal clear. First, we should abolish all discrimination in the taxation system, which involves the ending of S.E.T. Secondly, we should recognise that the tourist trade is a great industry and should agree to treat it on a comparable basis with the manufacturing trades.
  Whatever may be our policy on investment grants for industry we should treat the tourist trade in the same way. No more, no less. If manufacturing industry receives no investment subsidies then the tourist trade should not receive them, either. If manufacturing industry receives some kind of help, then my party's policy should be to give the tourist industry the same. Moreover, we should place the tourist trade on a comparable basis with manufacturing industry when it comes to capital allowances, initial allowances and the rest.
  We should treat this as an important industry. We should step up the promotion and publicity of Great Britain overseas and do that through the B.T.A. which is doing very good work already on a voluntary basis. Why get rid of it when this is widely recognised? Then we should channel funds, if the Government have some available for regional publicity, broadly in proportion to the relative contribution which the different parts of the United Kingdom are making to the holiday industry, through the existing voluntary bodies.
  I liked the point of my hon. Friend the Member for Tiverton (Mr. Maxwell-Hyslop), that in channelling funds for publicity through local regional bodies we should not give them a lump sum but should say, "You can have X per cent. of what you raise by voluntary subscription." This will give them an incentive to raise money by subscription from their own hoteliers and from local authorities in the area.
  Lastly, we should insist that the B.T.A. is comprised of members representing, on a fair and impartial basis, the different holiday areas of the United Kingdom and the different industries which go to make up the tourist industry as a whole. Why not give the B.T.A. statutory powers to levy precepts for its work abroad. This would be perfectly reasonable. Give

  2017
  it borrowing powers, too. If it can levy precepts, give it borrowing powers as well. I see no radical objection to such a course.
  I suggest a basis of no discrimination, no discretion, no special projects; but equal treatment for the tourist industry with every other trade, which up to now it has not had.
  8.9 p.m.
  Dr. John Dunwoody: The tourist industry is an important industry, and this is an important debate. I would like to follow the hon. Member for St. Ives (Mr. Nott) who, like me, represents a part of the most attractive and beautiful tourist area in the country, by saying that the tourist industry is more than just the hotel industry. It embraces catering, restaurants, camping and caravanning and the whole question of the general amenities and services in our tourist areas. It is an important industry for our balance of payments, because through it we earn this large sum of foreign currency. It is possible to earn foreign currency more easily by this means than through direct exports of material goods.
  It is also an industry which has a considerable import-saving potential. We are beginning to appreciate this increasingly, and this means that we should be increasingly adopting the same attitude towards this industry as we are adopting towards other industries with a similar potential. Because of the nature of the industry it is one with considerable regional implications.
  We have heard about the industry in Scotland, Wales and the South-West of England. These are parts of the country facing economic and industrial difficulties, often the problems of depopulation and high unemployment. This is an industry which has advantages in these rather difficult parts of the country, despite the fact that it is a seasonal industry. When we talk about it being a seasonal industry, in so far as we can attract foreign visitors it becomes less so, and therefore of more importance from the regional economic point of view than perhaps from the point of view of the domestic holiday-maker.
  I welcome the Bill. It is significant that its name is the Development of Tourism
  2018
  Bill. We are not talking about a hotels Bill. I welcome it from the point of view of the industry, the holidaymaker and the community as a whole who will derive considerable benefit from it.
  I wish to say a few words about promotion. Promotion overseas is difficult. I should not be as critical as some hon. Members on both sides of the House about what has happened in the past, and this inevitably concerns the rôle of the B.T.A. on occasion. I regret that we still sometimes project in our promotional literature overseas what I would call the Beefeater image of Great Britain as a tourist country. We still tend to go too much for the tourists who want see London, Stratford-on-Avon and perhaps Edinburgh and forget the vast areas in, for example, Wales and the South-West which attract very few foreign visitors.
  My hon. Friend the Member for Conway (Mr. Ednyfed Hudson Davies) mentioned the low proportion of tourists from abroad who go to Wales. The figure for the South-West is far lower than the Welsh figure. The South-West, one of the major tourist areas in Europe, probably, and in my view certainly, attracts a smaller percentage of foreign visitors than any other tourist area in Europe. It has enormous potential if we develop adequate promotional activities abroad.
  I should like us to work towards extending the season. One thing which concerns me is that much of the additional investment in tourism, from wherever it comes, will be fully utilised for only a very short time in the year. Should not we do more to extend the holiday season through school holidays, encouraging second holidays and action in industry to encourage people to go to the tourist areas of other parts of the country?
  One thing which has emerged from the debate is that everyone accepts that the Government have a rôle to play. But I regret that so much of the opposition to the Bill seems to be of a completely confused nature. It seems to centre on the problems of the Selective Employment Tax and communications in the regions. I do not say that these are not problems or that I am entirely uncritical of the S.E.T., but I do not share the irrational criticisms which we have heard from both sides of the House. I should like a bit more selectivity and flexibility introduced into this taxation

  2019
  measure. But to imagine that we shall achieve v/hat we want to achieve in the Bill more readily and cheaply by abolishing the S.E.T. is a complete illusion. The figures given by my right hon. Friend the President of the Board of Trade today demonstrate that if we were to do this far greater demands would be made on the taxpayers because the money would have to come from somewhere and the results in terms of modernising hotels, attracting foreign visitors and import saving would be far less beneficial than the benefits of the Bill.
  Communications are vital for the tourist industry, but I do not think that improvements in communications conflict with the desirability of the Bill. They are another problem. To confuse that problem with incentives to improve the industry, with the question of publicity and boards is wrong.
  Mr. Peter Mills: Surely the hon. Gentleman would agree that it is a question of getting our priorities right. The first thing is to get there, and this is where communications are vital in the South-West.
  Dr. Dunwoody: I do not accept that it is a question of either or. These things are not incompatible. We must improve communications, but there is a need for legislation like the Bill to improve hotel accommodation, to provide bathrooms and to attract people to holiday areas. Accommodation must be provided which will attract people and we must get people in and out of the regions.
  Part I of the Bill sets up the various authorities—the British Travel Authority and the Boards for Scotland and Wales. I welcome it in so far as it represents a degree of devolution and a step away from centralisation of control. But there is an element of untidiness. Those representing tourist areas in England are very conscious of it. The figures have been quoted many times today. Far more visitors go to the South-West than to either of the areas for which separate boards are to be set up. I suggest to my right hon. Friend the President of the Board of Trade that the question of the regions warrants further examination in Committee. I was pleased to hear him say that the rôle of the regional associations and boards which we have now is essential. I hope that we shall follow up
  2020
  this matter in Committee and that the findings of the Royal Commission on Local Government will be taken into consideration in so far as they are applicable.
  Part II outlines the means by which financial assistance is to be given, particularly to hotels, along the lines of the recent White Paper. I welcome that it will be discriminatory. We have a duly to the taxpayers to ensure that it is discriminatory. We do not want financial assistance to be wasted. We want assistance to go to those who need it. We are always being told, sometimes rightly, that we do not pay enough regard to the way in which aid and assistance of various sorts is given. In so far as these grants are discriminatory, they are good.
  The concept of discretional loans, although I realise that this may come later, with the boards and the authority having a considerable say about which areas they will help, will be of great use. I hope that they will use these powers, not only in orthodox tourism, but in intiating the projects which commercial interests are not prepared to initiate. I do not agree with the hon. Member opposite who said that this was profitable, because if it was the commercial interests would do it anyway, and if it was not profitable, it should not be done. There are schemes which should be initiated on which private interests are not prepared to embark
  The Government have a duty to stimulate activity. We have seen how successful this can be in other industries. We are always being told that tourism should be regarded as another industry. This is another way in which we are preparing to do that.
  Part III suggests that orders may be made for the registration of hotels. This is desirable. It is admirable that we should attempt to maintain standards and to inform the public. The range of standards in our hotels is very great. They compare with the best in the world. But the bad are truly abysmally bad. A system of classification or grading is long overdue and is in the interests of the industry.
  Camping and caravanning form a part of the tourist industry which is developing very rapidly. Sometimes it is regarded as the Cinderella of the industry and does not perhaps get the attention it deserves. I regret that there was only

  2021
  passing reference to this part of the industry in the Bill and in the White Paper. It is rapidly expanding, but it has considerable significance for our balance of payments. It may be, as the White Paper says, that the builk of foreign visitors to this country tend to stop in hotels for most of the time they are here. One reason for that is the inadequacy of camping and caravanning facilities in many parts of the country.
  The Government have a duty to stimulate development in this part of tourism to attract holidaymakers, younger holidaymakers in particular, from the Continent who travel round Western Europe and stay on first-class camping and caravanning sites. The Government have a duty to attract many more holidaymakers of this sort who will bring in foreign currency. Camping and caravanning have an important-saving rôle as well as a foreign currency earning rôle. I should like greater emphasis to be placed on this element of the industry.
  This is a good and workmanlike Bill. It will warrant close examination and possibly amendment in Committee. It would be quite disastrous for the industry if it were held up at this stage in its progress. This is a Bill not just for the hotel industry or the tourist industry. It is a holidaymakers' Bill which will benefit the whole community by the foreign currency earning and the foreign currency saving which will result from it when it becomes law.
  8.20 p.m.
  Mr. Kenneth Lewis: I want to take a wider but reasonably brief view of the tourist industry. From listening to the debate one would imagine that the tourist industry was concerned simply with those areas of the country to which people go on holiday in the summer. Probably fewer overseas visitors go to Blackpool or the West Country than go to London and up to Stratford, or Scotland. I am being realistic. These are the people who provide us with what this Bill is about. If we were concerning ourselves with British people taking their holidays at Butlins the Bill would not be needed. The Government are not justified in introducing the Bill because they want British people to stay at home for their holidays. No Government have
  2022
  the right to tell British people that they shall have their holidays at home and not abroad. The Government have done their best to this end by the introduction of the £50 currency restriction, but that restriction does not help the country to earn foreign currency. The French have since imposed a similar restriction. This kind of activity is always self-defeating.
  We need to increase our earnings from foreign tourists, and this is now a very large business. I have a certain interest in it, as I have declared on a previous occasion, but I have a wider interest in the tourist business as a whole through the committees on which I sit. I have discussed this matter with many people, and some who sit on committees and boards are inclined to support the Bill. They see the building of an empire which will give them the increased prestige which would follow from the creation of a Government board. I am not saying this about the people who are already sitting on the British Travel Association. Others I have spoken to are against it. On balance, I think that the present system of the British Travel Association promoting this country abroad is the best system. The Association must have increased financial assistance year by year, because it spends its money on promoting this country and is not wasting the money. The British Travel Association is very economically run.
  We are inclined to forget that, quite apart from the British Travel Association, there are a host of other organisations and firms that promote Britain overseas. There are the nationalised airlines, Thomas Cook and Son, which is owned by British Railways, and the shipping companies with offices all over the world. We are setting up a Government board dealing with a very limited sector, and it will be an expensive authority for that limited sector.
  We should strengthen the present B.T.A., perhaps by improving its committee structure and by bringing into it those who represent other interests, the shipping lines, the airlines, even principal exporters who send people abroad to sell our manufactured goods. A reorganisation of the present system and an increase in financial support would be much cheaper than setting up a new board.
  Mr. Rees-Davies: I wonder whether my hon. Friend will face up to the question with which the noble Lord, Lord Geddes, dealt in another place, and that is that this is a company limited by guarantee. There is no precedent in this country for any company limited by guarantee to be able to spend millions of £s of public money, and he advocated that it must turn itself into some other form of statutory authority. If we could retain it in its present form but as a stautory authority, would we not have the best of both worlds?
  Mr. Lewis: I cannot understand the argument. It has done very well up to now and it has increased its budget. Year by year it has been given more money, and the number of visitors to the country has greatly increased. Why should it not continue to do what it has been doing?
  This is an industry that does not need any shoring up. It is a vital, expanding industry that has developed greatly since the war. Are we to put this prosperous industry into the same position as, say, the shipbuilding industry which has been given so many grants, with the result that the shipbuilding industry has had to come back for more money. I am not suggesting that the shipbuilding industry did not need assistance, but that is an industry which was running down whereas this is an expanding industry. Giving it a crutch could result in it becoming a cripple. Despite what the Minister has said, I am convinced that the amount of money that will be spent as a result of the Bill will grow and grow over the years and when we get back into office we will be faced with it.
  What happened with the redundancy fund? The Government said that it would cost £5 million; they had £20 million written into the Bill, and they had to come back for more. The Minister has said that this will cost £11 million, but we shall find that it will cost £20 million or more. The Bill contains a reference to the year 1973 as the final year for the receipt of hotel grants. Once the hotel industry gets used to grants, it is not likely that after 1973 they will be satisfied with having no more grants. If it is thought that the grants will finish in 1973, I warn the Government that there will be an almighty rush to receive these grants and to complete extensions of
  2024
  hotels or the building of new hotels between now and 1973.
  It may be that the amount of the grant that is given—the top figure is £½ million—will create a situation where there will be too many small hotels being built. It would be far better for a hotel company to build two, three or four hotels and to claim the £½ million grant than to build one big hotel.
  There are two dangerous elements in the Bill; first, an increase in bureaucracy, and secondly, more and more subsidy; subsidy for an industry that does not need it. With more bureaucracy and more subsidy, clearly there is less independence. It happens in every industry on which the Government secure a grip.
  Looking through the Bill, one sees that there is an open end to the amount which can be provided, and there is almost an open end to the projects which can be included. No one knows what activities will be subsidised. Will they include grouse shooting, hunting, boating? Where is it to start and where is it to stop? Hon. Members opposite have spoken eloquently in favour of caravanning. There are many aspects of the Bill's powers which run parallel to the powers in the Countryside Act. It will be interesting to see whether the Countryside Commission carries out a certain function or whether the new British Tourist Authority is to carry it out.
  Another interesting feature which is also hidden in the Bill is the fact that the new Authority will have power, through a Government Department, to give technical assistance to overseas countries. It will be able to use money provided for the purpose by the Ministry of Overseas Development. This is quite extraordinary. I hope that those of my right hon. and hon. Friends who represent holiday areas will realise that, if the power is made use of, it will encourage overseas countries which are underdeveloped to increase their facilities for the reception of tourists. That will defeat the main object of the Bill, because the money will be used to encourage British people to go overseas by enabling facilities to be provided for them when we say in the Bill that we do not really want our people to take advantage of such facilities.
  Then there is the extraordinary point about 20 per cent. grants being made to

  2025
  hotels in non-development areas and 25 per cent. grants to those in development areas. I thought that this was a Bill to assist the development of tourism. Why should we give another advantage to the development areas? Either the Government have development areas on their conscience or they must have a phobia about them. After all, very few development areas are tourist areas—[HON. MEMDERS: "Oh."] Some of the grey areas are, I agree, but few of the development areas are.
  Mr. Jopling: Would my hon. Friend care to consider the Lake District, about which we have heard nothing in the debate so far?
  Mr. Lewis: When I speak in terms of development areas, clearly I am thinking of the industrial parts.
  It is obvious that the aim of the Government and of the British Travel Association is the initiation of package tours into Britain. However, do we need a board to do that? The package tour business has boomed since the war and it is still expanding, thanks to the efforts of private enterprise. It has not been done by Thomas Cook. The only nationalised industry in tourism has made no large contribution to the package tourist exit from this country. As for bringing people into the country by package tour, this is not just a matter for the State-owned airlines and Thomas Cook. It is something which can be done by foreign airlines, but they will not take much notice of what a Government-sponsored board says. This is a matter for free enterprise. If the Government want to encourage package tour visitors to this country, they do not need a board to do it.
  Mr. Rees-Davies: If my hon. Friend pursues that line, does he not agree that we need a large amount of new accommodation? The difficulty of the travel agent today is that he is unable to offer would-be tourists the right accommodation at the right place. It does not exist in the right quantity or at the right place. Unless immediate effort is given to providing more hotels, there will not be enough rooms in which to put overseas visitors.
  Mr. Lewis: The situation has improved greatly in the last few years. With most
  2026
  foreign visitors coming to London and then going to the Shakespeare country or to Scotland, more accommodation has been provided to cater for them. As a result, it is possible to go to a London hotel some weekends and barter with the management about the price one will be charged for a night's accommodation.
  The Government are acting as they always do in these matters. They bash an industry on the head, they thump it, they squeeze it and then say, "You need some help". It restricts an industry in every way and then says, "You are in a bad shape. We must support you." They then bring in a Government board, ostensibly to give support, at great expense to the public—because the taxpayer has to pay, not the industry. They put some sweetening on the pill, the industry takes the pill, but at the end of the day finds that it is less sugary than was thought. This is my view of the Bill. I want the Government to take it away and lose it.
  8.35 p.m.
  Mr. William Edwards: As a Welsh Member with an interest in Welsh tourism, and some knowledge of the operation of a few Welsh hotels, I will speak briefly on the Bill.
  I welcome the fact that the Bill deals with the Welsh tourist industry. I can understand the difficulty of the Opposition in this matter. I am sure that there is not a Conservative Member in Wales representing a tourist area who could honestly say that the hoteliers in that area are against the establishment of a Welsh Tourist Board.
  The history of the Welsh Tourist Board has been somewhat mixed. One reason why the board was founded was dissatisfaction with the deal that Wales was getting from the British Tourist Association. This is one of the factors in Wales which has brought about far more interest in the work of a Tourist Board than can be found elsewhere in other tourist associations.
  Although there is interest in its work, the Welsh Tourist Board, year after year, has been short of money. The hotel and tourist industries are run and financed by individualists. Once a voluntary tourist board becomes efficient and starts setting its own standards, often the most efficient highly individualist hotelier

  2027
  begins resenting its powers and influence. This has been happening in Wales. The board has been short of money, and time and again the Government have had to bail it out. We even had the ridiculous situation a few years ago that a chairman had to be appointed to the Welsh Tourist Board partly because he had sufficient money to guarantee its overdraft. This situation could not continue.
  There has been a demand in Wales for a properly financed board with sufficient powers to operate. I make no apology for taking a parochial view of the matter. I shall not criticise the views of hon. Members opposite who are not in favour of statutory boards. However, they must agree that they have found no support from amongst their colleagues representing Welsh constituencies for the views that they have expressed criticising the establishment of a statutory board. It is significant that even the right hon. Member for Flint, West (Mr. Birch), who generally expresses all the Conservative phobias about intervention, is not present to express them today. However, I criticise the way in which the board has been established, because I am not sure that Wales welcomes yet another board to be appointed by the central Government.
  I asked a Question about the number of organisations that we have in mid-Wales trying to promote industrial development. I was staggered to find that there are already five separate organisations, three of which have been established by my Government. The functions of the Countryside Commission, the Rural Development Board, and this statutory board will be in conflict. Personnel will have to be found to staff them and the work that they will do may be in conflict.
  Mr. Rees-Davies: The purpose of the Welsh Tourist Board is that the proliferation of these matters to which the hon. Gentleman refers—the Sports Council, the local planning authority, the Ministry of Agriculture, and the others to which he has referred not only on this occasion, but previously—can be co-ordinated and come under one umbrella. Why not?
  Mr. Edwards: I suggest that the umbrella should be an elected council for Wales. There are so many nominated non-elected boards operating in important areas in Wales that Wales is an ideal
  2028
  candidate for the establishment of the first elected council. If the powers which we are to give to the board were operated by an elected council, there would be far greater acceptance of some of the unpalatable provisions which the board will have to introduce to reorganise the industry.
  I agree wholeheartedly that there is a need for the powers of the board to be far more extensive. The board—and preferably an elected board—should be able to look at planning. Time and time again efforts to develop the tourist industry are frustrated by planning authorities. In rural areas, particularly, local authorities tend to be dominated by farmers, some of whom resent the incursion of the tourist industry into areas which in the past have been dominated by their influence There is a certain amount of resentment against the rapid development of the tourist industry. The development of hotels, motels, and camping sites, is frustrated far more by the decisions of planning authorities than by any shortage of finance.
  Far more needs to be done for the small hotels in my constituency. By its very nature my constituency cannot accommodate large hotels of the kind which the Bill will assist, but many farms there could provide first-class accommodation if they were encouraged to do so. I do not think that they will be sufficiently assisted by a Bill of this kind.
  I propose, now, to deal with the question of taxation of the tourist industry, not the taxation of hotels. The effect of S.E.T. in a tourist area is not limited to hotels, it extends to the whole range of tourist facilities. Although we in Wales claim to have a high tourist income, a great deal of that income comes from day trippers. The highest percentage of catering facilities is provided by people outside the hotels, and a number of things must be done, in association with the hotel industry in Wales, to attract tourists into a new tourist area.
  An interesting development in Wales is the holding, on the Irish pattern, of medieval-style banquets, catering, and entertainments alongside, and associated with, a rather remote country hotel. The hotel gets S.E.T. relief because it is in a rural area, but the catering company which provides the essentials for this

  2029
  profitable and interesting development has to pay S.E.T. for its staff.
  I am concerned—and here I am taking what I hope is a very long-term view—about the proposals of the party opposite for this industry. I was a member of the Committee which considered last year's Finance Bill. Time and again when we discussed abolition of S.E.T. and a reduction of general taxation the right hon. Member for Enfield, West (Mr. Iain Macleod) said that the party opposite would impose a sales tax to do so. If this is a change of view, the assumption of power by the party opposite would not be quite as disastrous to the hotel industry in my constituency as it could be, but a sales tax would be a far bigger burden than S.E.T. on hotels in my constituency.
  I have listened with interest to what was said on the letter to The Times by Lord Crowther. I took the precaution of seeing the trading results of Trust Houses from the date when that letter was published and I noted with interest that the trading profit of Trust Houses from the date of imposition of S.E.T. has increased substantially every year.
  Sir K. Joseph: Would the hon. Gentleman tell us whether this was the same Trust Houses as before that letter was written, or is the Trust Houses that includes acquisitions since?—because, of course, it has acquired several hotels such as, I believe, Grosvenor House.
  Mr. Edwards: I took great care to consider that point and will develop the theme.
  S.E.T. has not affected the trading profits of Trust Houses. What has affected the profits is other taxation. In my own part of Wales the Corporation Tax and the onset of new rules for closed company taxation have had a far more insidious effect on investment in the tourist industry than the charging of S.E.T. on services provided.
  This is, perhaps, a plea to the Chancellor of the Exchequer, but we ought really to give serious thought to the way in which we are taxing closed companies in the tourist industry, because more and more of the investments in hotels, notably small hotels, comes from private individuals. They are not interested in in-
  2030
  vesting money in a partnership. They are always accustomed to having the protection of an investment in a closed company and they will not, in the future, be interested in investing in small hotels if, in order to get tax advantage, they have to trade publicly. This is a serious matter which must be considered.
  Finally, a tax point in connection with this Bill on the question of investment grants: we have been asked to be pragmatic and we must be pragmatic in this industry. Many individuals who are prepared to invest in the hotel industry often have made a lot of money in some other activity. They are then prepared to look round for an investment in their own locality. If one is able to offer them an investment that gives them a tax allowance they are far more interested in a tax allowance at that stage than in investment grants.
  Some people who have made a lot of money have a phobia about paying tax and if they are offered an investment which enables them to have even an illusory avoidance of tax they are more prepared to make the investment. I cannot see why we cannot offer the alternative, in paying these grants, of taking either an investment grant or a tax allowance. These are points which we should take up at Committee stage and I hope to be on the Committee to do so.
  Finally, I hope that the acceptance by the Board of Trade of the importance of this industry shows that there is to be a new attitude by the Government and by all parties, to this very important industry. It is the only indigenous industry in my constituency with growth potential and I hope that the potential of the industry will be recognised not only by the Government, but also by the people in my constituency and that they will see the opportunities that this important industry offers; that they will think in the field of education not only of agriculture, teaching and the professions, but equip themselves for this industry, also. I hope that young people in my area will realise that there is a great deal of potential in the tourist industry and in the hotel and associated industries and that Welshmen will take an interest in this important industry.
  It is significant that, when we are discussing what is possibly Wales's biggest

  2031
  industry, the hon. Member for Carmarthen (Mr. Gwynfor Evans), who reflects the old-fashioned attitude in Wales to many industries, is absent and, apparently, has no interest in it. If we had a financially independent Wales, which heaven forbid, we should be very dependernt on tourism. Yet the Nationalist Member who wants to establish an independent economy has no interest in the one indigenous growth industry in Wales which can be developed by Welshmen.
  8.51 p.m.
  Mr. Peter Blaker: In contrast, apparently, with some of my hon. Friends, I believe that the House should give the Bill a Second Reading, but I want to make two criticisms. First, I am surprised that there is nothing in the Bill about how the co-operation of the tourist industry will be secured. This is a vital point and I am surprised that the President of the Board of Trade did not deal with it.
  Co-operation is important, because this industry is different from most others. It is 5 per cent. of many other industries. The work of hotels, restaurants, car hire, theatres, travel agencies, bus operators and railways, among others, has an important effect on our success or otherwise in tourism. It follows that one of the most important jobs of the Tourist Authority, or whatever body is centrally responsible, is co-ordination and stimulation. Its rôle should be that of the starter motor and not the main engine.
  Its other most important rôle is not the administration of grants or a compulsory registration and grading scheme—I hope that the relevant Clause on that subject will be treated as a reserve power and that it will not be necessary to use it—but marketing, promotion and publicity. That sort of job, like the coordinating job, can be done only with the closest co-operation with all parts of the industry. Regrettably, even before this new body has been set up, the industry is suspicious. This is the Government's fault, partly for failing to consult the industry until Friday of last week. If ever a Government should have bent over backwards to ensure that an industry was consultsd, this is the classic case.
  I condemn the Government on this ground, which may affect the success or otherwise of the Tourist Authority for some years to come. The Government
  2032
  talk about the importance of participation and even have a Minister with responsibilities for it. Was he consulted before the Bill was introduced? There was apparently no opportunity given to the industry to participate at all.
  I wish to refer now to the grants and loans scheme. The right hon. Gentleman effectively demolished, with great skill and grace, the Government's policies on taxation and investment grants. Among other things, he said that the problem is now shortage of beds in hotels. He said that it does not matter if S.E.T. puts up prices—he admitted that it did—but that there was the problem of this shortage. Why is there this problem of a shortage of beds, which has appeared only since this Government came to power? The B.T.A. itself has said that. It is the Government's policies which have been responsible.
  The Government should put the tourist industry on a par for tax purposes with manufacturing industry. The relevant little N.E.D.C. made this recommendation and I want to know why it has not been carried out. This is a competitive industry—competing not only at home, but with other countries—and in this business there are no Queensberry rules. The rules of the General Agreement on Tariffs and Trade do not apply to competition in tourism. Other countries, far from penalising their tourist industries, as Her Majesty's Government have done, foster them with massive programmes of fiscal and other aid. I am not urging the Government to go that far. But they should carry out the "Little N.E.D.C." recommendation and give it parity with manufacturing industry.
  8.56 p.m.
  Mr. Bert Hazell: Like other hon. Members, I welcome the Bill.
  In my capacity as the president of a national trade union, I spend virtually every weekend in a different hotel, not only in my constituency but throughout the country. As a result of doing this for the last three or four years, I have considerable knowledge of hotel conditions generally.
  I pay tribute to the hotel industry for what it has achieved in recent years and for improving its services. Much has been done in recent years. I say that although I am not the chooser of the

  2033
  hotels at which I stay. They are booked for me by my local officer and I have therefore stayed in hotels of all types and sizes.
  During this winter I stayed at one hotel which had no means of heating the bedrooms, not even a gas or electric fire. It was bitterly cold and I was frozen. A hotel like that is a bad advertisement for the tourist industry. There is a minority of these places and the financial provisions of the Bill, enabling grants and loans to be made towards modernisation and for new equipment, will be of considerable assistance and will help these hotels to improve and attract more trade. I trust that it will result in the below-standard hotels being brought into line with the better ones.
  I represent a constituency with some 40 miles of coast-line and incorporating about two-thirds of the Norfolk Broads. The tourist industry is, therefore, vital to my area. The Norfolk coast is bitterly cold for much of the year and the holiday season for the small hotels at places like Sheringham, Cromer and Wells is extremely short. The financial provisions of the Bill will be of assistance to the owners of these hotels and boarding houses, who are already contemplating modernising their establishments.
  I will not be led into discussing the effects of S.E.T. and the impact that this taxation has had on the industry, although I appreciate the reason why my hon. Friend the Member for West Stirlingshire (Mr. W. Baxter) dealt with the subject. However, as this is the time of Budget-making, I urge my right hon. Friend to tell the Chancellor about the effects of S.E.T., particularly on coastal areas where the holiday season is short.
  There is no denying that for restaurants, cafés and small hotels the impact of S.E.T., although the cost is passed on to the customer, has a demoralising effect. The tax retards the possibility of expansion and modernisation. If my right hon. Friends could see their way to mitigate this tax, particularly in areas such as Norfolk where we have twice the national average of unemployment, it would give that boost which is so vital if we are to bring hotels up to the standard needed to attract tourists. I say this with all the seriousness I can command.
  Dr. Gray: Does not my hon. Friend agree that, apart from the impact of Selective Employment Tax, small boarding houses should not be treated as business premises but as private dwellings if they take only a few visitors occasionally?
  Mr. Hazell: My hon. Friend is right about that in the coastal area, particularly in small townships. I hope that my right hon. Friend will take note of this and pass it on to the appropriate Minister.
  Another problem in coastal areas is lack of public transport. I take Norfolk as an example. We have two railway lines left there. One is from Norwich to Great Yarmouth. That seems to be reasonably sure at the moment, but the future of the other, from Norwich to Cromer and Sheringham, is very unsure. It is in the hands of the Ministry of Transport whether that line shall remain open. I draw attention to the serious consequences which will come to the tourist industry in Norfolk, the Broads and the coastal area if that line disappears.
  It would mean that people arriving with children and laden with luggage at Norwich Thorpe Station would have to walk two miles to a bus, which would take nearly two hours to get to Cromer of Sheringham. Can one expect holiday-makers laden with luggage to undertake such a trek? If the railway line disappears this will have a marked impact on the holiday trade throughout the area which so vitally needs the trade as part of its general economy.
  The Norfolk Broads is an area of expansion. We have tens of thousands of holiday makers visiting the area each summer. Because of the expansion of the tourist industry in the Broads a substantial boat-building undertaking has been established. As a consequence there is a considerable export trade in the saling vessels which are built there. This should be encouraged, but there is a tendency for some parts of the Broads to be overcrowded. I hope that the new board, or the Countryside Commission—I do not know which would administer this—will activate the opening of new areas to enable the public to travel about over a wider area of the Norfolk Broads than is possible at present. Extensions of rivers could be opened at very little cost and Broads which are privately-owned could be made open to the public.

  2035
  I hope that steps will be taken by this or some other authority to make the attractive broadland district known and available to a wider tourist trade.
  There is a greater concentration of caravans and campers in North Norfolk than there is any other constituency. Last summer Norfolk had the wettest summer that I can recall. I was sorry for the families who came to those camps, for there is no provision for entertainment. They looked very miserable day after day. If this Authority is to do anything to attract more campers to the area, I hope that it will give attention to the provision of amenities for those who occupy camping sites.
  9.5 p.m.
  Mr. Michael Jopling: I am very glad to have the opportunity to say a few words about the effect of the Bill on the Lake District, which I represent. I should declare an interest. I am interested in a motel development and caravan site.
  It is often said in the House and outside that the House of Commons engages itself in churning out too much legislation. The Bill is a classic example of unnecessary legislation. Everyone in the House wants to encourage tourism and do everything possible to help this great industry, but I think that the Bill in its detail is typical of the Government's approach to problems. In social matters and in industry we have seen the tried motto of the Labour Government, which falls into three parts—set up a board, pour money into it and compile endless statistics. That is exactly what Parts I, II and III consist of.
  First, the British Tourist Authority is to be set up. Hon. Members have asked why it was necesary to do this. What is wrong with the British Travel Association which, as the President of the Board of Trade admitted, has over the years done such a fine job? The proposed functions of the Authority under Clause 2 are almost identical with the job that the British Travel Association has done for years. Apart from giving away money and compiling statistics, the job that the new B.T.A. will do is virtually identical to that which the previous one did. The game is given away by the statement in the Explanatory and Financial Memorandum that no extra staff will be neces-
  2036
  sary, although £½ million will be spent on doing the same job.
  Mr. Rees-Davies: My hon. Friend should be fair about this. Perhaps he will give it some thought. The whole purpose is to transfer the functions of the British Travel Association to the British Tourist Authority, but the Authority is to be given more money to spend. Perhaps my hon. Friend would ask the President of the Board of Trade whether he proposes that the British Travel Association in its new guise shall continue with the same staff that it had hitherto. I greatly hope that the answer will be "Yes", but nobody has yet asked that question.
  Mr. Jopling: I have thought about it a good deal. If my hon. Friend would care to read the Explanatory and Financial Memorandum he would find that the question he has asked is very largely answered. The reason for setting up the Authority is to transfer into the Government's hands the power to do this job. The existing organisation is perfectly able to perform these promotional activities.
  The Government's second intention here is to pour money into the tourist industry. If that be their intention, I am the last to refuse it on behalf of my constituents. Comments have been made—I shall not elaborate them—about the way in which money is being taken from the industry through the S.E.T., which is such an iniquity in most areas, and is then to be returned through grants under the Bill. This is the straight political doctrine of right hon. and hon. Members opposite. Their political philosophy is that money is better in public hands, and their proposals under the Bill are just part of the way in which they are bringing that about.
  One objection I have to the grants proposed is that under a tourism Bill a good deal of the money will go into improving hotels which have nothing whatever to do with tourism. I take the example of a hotel in a small dingy provincial town which never sees a tourist from the beginning of the year to the end, a hotel used almost entirely by commercial travellers and those who have to visit the town for business reasons.
  Another example is an establishment providing "night hawk" facilities for

  2037
  lorry drivers going up and down a main road. I know something about this. [Laughter.] I say that because I have an interest in a business of that kind. If someone wants to put up a new hotel entirely for lorry drivers, he will, as I understand, be able to have grant under the Bill to do it. It seems absolutely fatuous that under a Development of Tourism Bill we should give assistance to a purely commercial affair nothing whatever to do with tourism. It is quite wrong.
  I do not see why it is necessary to set up the new statutory body, the new B.T.A., to pay out the money. The Leader of the Liberal Party was entirely right to point out that the Board of Trade already gives away industrial grants in development areas through its own departmental organisation. This legislation is unnecessary on that score. The Ministry of Agriculture gives large grants to farmers in a similar way to that proposed in the Bill, but it is done by the Ministry's machine. There is no need to set up a great new public authority for the purpose.
  The third intention is to compile a mass of meaningless statistics. My hon. Friend the Member for Eastbourne (Sir C. Taylor) spoke about that, and I shall not elaborate it.
  How will the Bill affect my constituency? My constituents will regard it as just another tier of statutory authority piled upon them. I very much agree with what the hon. Member for Merioneth (Mr. William Edwards) said earlier. The economic planning councils already have a function in tourism. The Northern Planning Council produced a great book with a chapter on tourism. It makes studies and surveys of golf and water sport facilities, all part of the tourism functions of an economic planning council.
  In the North of England now the Rural Development Board is being set up under the Agriculture Act, 1967, and this body, too, has powers to give assistance to tourist facilities. Under the Countryside Act, 1968, the Countryside Commission has power to do all sorts of things for tourism, particularly in the Lake District—grants and loans, country parks to be established, the local planning authorities allowed to create camp-
  2038
  ing sites, picnic sites, car parks and all the facilities going with such amenities.
  In the Lake District, another amenity proposed for tourists is a theatre at Windemere, for instance. The Arts Council will help there. I do not understand why we must have a new authority on top of all the existing ones to help tourism in my constituency. If the need is to help tourism, all the facilities and bodies are there to do everything necessary.
  I shall not vote against the Bill, because if the Government are intent on pouring money on my constituents, who am I to oppose that? But the whole thing is grossly unnecessary. We have tier upon tier of statutory bureaucracy piled upon us. It reminds me of a wedding cake. This is typical of the sort of marzipan and icing sugar society that the Government have created for us. If we get much more, our whole society must topple, and this is the sort of Bill that will finally do it.
  9.15 p.m.
  Mr. John Rankin: The hon. Member for Rutland and Stamford (Mr. Kenneth Lewis) dealt with the problem of communications. People leaving this country or coming to it today seek to use air transport as much as they can. They want as long as possible at their holiday resort, and therefore want to get there as quickly as possible. Air transport has been increasing immensely, and perhaps sooner than we realise the jumbo-jets carrying 300, and later 500, passengers, will be with us. I hope that when that stage has been reached we in Britain shall not still be arguing whether we are to get a jumbo-jet for 250 passengers. I hope that we shall have resolved that problem by then.
  Sooner than we think, massive hoards of tourists will be coming into our airports—London, Manchester, perhaps Newcastle, and so on. What preparations are being made to handle these massive crowds? Those of us who use London Airport know how busy it can become in the holiday season merely handling the ordinary holiday traffic. What will it be like when the tourists are landing in massive numbers? As a regular user of London Airport, I do not see any preparatory steps being taken to deal with those crowds. Moreover, how are we to meet

  2039
  the problem of their transport into London, to which they will first go?
  I did not mention Glasgow Airport because at present that is a contentious issue, but there is no reason why I, as a loyal Scot, should not say that tourists come to Glasgow because it is the finest tourist centre in the United Kingdom. From Glasgow, one can go by bus, sea, rail and air to some of the most beautiful parts of the United Kingdom. I am not selling Glasgow; I want to prevent it being sold. I hope that it will maintain its position, and that my right hon. Friend will see that it does. At present, the tourist comes to Glasgow by B.E.A. from London, having flown to London by B.O.A.C. I want to see that he goes to the other places in Scotland by means of one or other of the routes I have described. In speaking for Glasgow Airport I am not saying anything against any airport in any other part of the country.
  9.20 p.m.
  Mr. W. R. Rees-Davies: I take a different view from most of those who have spoken in the debate. If the Government, at long last, want to do something to help at any rate part of the tourist industry, we should encourage them to do so. I have made a study of this matter for a considerable time, and certainly over the last nine months, and have tried to put down my findings in writing. I shall speak briefly now, but in Committee we shall have an opportunity to develop some of the themes with which we should deal.
  Neither this Government nor their predecessors have ever had a national tourist policy. I have bitterly regretted this for many years and have campaigned, very inadequately, for such a policy. Again, no one has yet defined what tourism means, nor what is a tourist. But these are important considerations. The Bill is a misnomer. It is really a hotel incentives Bill explained as a Bill to promote a new Authority.
  Am I right in assuming that, under Part I, the Government do not mean to replace Mr. Lickorish, the General Manager, Lord Geddes and other members of the staff from carrying on, although of necessity they have now become a statutory Authority? So far, the board has been a company limited
  2040
  by guarantee. I do not ask for an assurance that every individual will be retained. Will, however, the staff in general be retained?
  Secondly, will the Government please retain the existing committees, including the voluntary ones? Merely because one works for a statutory authority one does not have to be paid. Will, for example, the excellent committees which deal with historic homes and consumer interests be retained in substantially the same form?
  Part III of the Bill deals with registration and grading. I believe that registration is necessary but that grading is out of date. The qualitative type of attitude is no longer necessary. I will not say why I believe it to be so, but in Committee I shall explain why I believe that registration is necessary. In any case, the reserve power acts as a single deterrent. If someone does not get in one's book, he cannot get trade. Any travel agency will tell us that.
  Part II deals with the Hotel Incentives Scheme. In the main, what the traders always wanted was to be able to obtain loans on preferential terms rather than grants. The Government may find themselves wanting to go in reverse on this matter. If they do, as a quid pro quo they may wish to go a little further than they are proposing. Would the Government consider some form of hotel bank, an institution concerned with loans rather than grants?
  Will the Government please take a careful look at Clause 8? It is completely out of date to say that one must have an evening meal in a hotel and I am not sure that one must have a lounge in modern hotels, of which I see something. I was late because I was dealing with a planning appeal concerning hotels.
  I want to put an idea to the President of the Board of Trade and his staff. If he is to get effective control of hotel policy, the right hon. Gentleman must persuade the Minister of Housing and Local Government to release to the Board of Trade the decisions as to what are to be the hotels and how. That will involve seconding some staff from the Ministry of Housing and Local Government to the Board of Trade so that they can make the decisions under one umbrella—for example, whether a hotel should be built

  2041
  and under what terms. Such an idea should already have been considered.
  There are many things which need to be done to make the Bill infinitely better. It is not very well drafted—the latter part is an abomination. As to Clause 4—the idea of having specific projects—I disagree profoundly with what other Members have said. It is absolutely essential that we have a national conference centre in London, and quickly; it is absolutely essential that we have a national booking centre for hotels, quickly.
  No one will set these up because they are loss-makers. The G.L.C. will not do it, and has told the Government so, unless it gets a grant. This is a perfect project. Will the Government please tell us what is the sort of thing which they regard as being a suitable Clause 4 project?
  Generally, the debate has been rather poor for two reasons. It has been far too parochial. We have had far too much of Wales, too much of Scotland. The team from the South-West were brilliant, absolutely brilliant. I take my hat off to them. They way they handled their case, the way they hit the ball over the net and knocked the Welsh and the Scots out, was excellent. But this is not a game of tennis with my hon. Friend the Member for Rutland and Stamford (Mr. Kenneth Lewis) as referee. This is more serious. It is an international Bill to deal with tourism and I greatly hope that we will approach it in a far more nonparty spirit in future.
  9.26 p.m.
  Sir Keith Joseph: My hon. Friend the Member for Isle of Thanet (Mr. Rees-Davies) is a student of the tourist industry and managed to pack into seven minutes a great deal of knowledgeable comment on the Bill. He congratulated the hon. Members from the South-West, and they do deserve hearty congratulations. They made scintillating speeches. I do not agree that the ball always went over the net, sometimes the ball landed squarely on my back, but I do not complain of that. It was a fascinating debate with a lot of strong feeling. Now we must try to sum up.
  I may carry some of my hon. Friends with me when I describe the Bill as a very patchy palliative of a Bill. Because it has a palliative element I suggest it
  2042
  should not be opposed. I do not deny that it has very undesirable features. I start with Part II. This is the reason for the urgent presentation of the Bill. It provides for financial assistance for hotel development. In essence it is no more and no less than a rescue operation, intended by the Government to offset a small part of the damage that their previous fiscal, tax and monetary policies, have caused to the tourist industry.
  Like all industries in a developed economy the tourist industry should have its own momentum and balance. Provided the Government create a suitable economic context the industry should be able to look after itself. If demand changes or rises then supply too should change or rise. We now have the expectation that tourist demand, particularly from overseas, is rising, but supply is not. Why is this? What has gone wrong with the market operation of this sensitive, sophisticated, complex industry? On this my hon. Friends and I see eye to eye. What has happened is that the Government have insensitively, probably not realising what they were doing, heaped on the tourist industry burden upon burden which has wrecked its capacity to respond to rising and changing demand. I am not saying that we on this side of the House were exactly the toast of the tourist industry every year of our period in office. But we cannot begin to compete with the Government in what appears to be their positive prejudice against the tourist industry.
  Does the House realise that Lord Crowther's letter, which has been referred to several times, was written before the Selective Employment Tax was invented? I will read a few lines which my hon. Friend the Member for Moray and Nairn (Mr. Gordon Campbell) did not read. Lord Crowther said that he did not think that
  "the Government yet realises"—
  this was in February, 1966—
  "what it has done to one of the country's main earners and savers of foreign currency".
  That was before the S.E.T., before increases in Corporation Tax, and before the screw was turned in a number of ways.
  Now the Government face a loss of foreign currency and they rush to the rescue. This Bill is, above all, as to its timing, a balance of trade operation. It

  2043
  is not concerned with the basic health of the tourist industry. That is why my hon. Friends who have criticised it are abundantly right. It does not attempt to deal with the basic health of the tourist industry. It deals with one specific tourist problem, and that is the question of increasing the supply of hotel rooms, because the supply and demand response has broken down due to Government burdens.
  Because the Bill does not attempt to deal with the basic health of the tourist industry, it is no wonder that the telegrams are pouring in. The telegrams are quite right about the Bill as it is. The tourist industry will have to wait until we return to office for a more understanding approach to it.
  Dr. Gray: If the tourist industry is in such a plight, would the right hon. Gentleman explain why a number of seaside towns last year, including Great Yarmouth, had extremely good seasons—much better seasons than they had when his party was in office?
  Sir K. Joseph: I would need a lot of convincing that that was true, but if it is I am delighted to hear it. It does not accord with the impression I get from reading the newspapers.
  The instrument of help provided in Part II of the Bill is the investment grant. We on this side of the House dislike investment grants intensely. Investment subsidies, like all subsidies, need justifying up to the hilt. But, of investment subsidies, investment allowances seem to us far less of an evil than investment grants for reasons which my hon. Friends have put very well. We therefore dislike the method of Part II. We accept the need for it and, although we deplore the method, I think we all hope that it will be successful in creating more hotel rooms.
  I turn to Part I of the Bill. I echo the tributes of my hon. Friends to the British Travel Association. It has done an absolutely first-class job. Replacing it by a British Tourist Authority could make sense—to allow a statutory body to co-ordinate other statutory bodies and to stimulate the industry and to market and promote for the industry. But, as my hon. Friend the Member for Blackpool, South (Mr. Blaker) said, it can make sense only if there is a working co-
  2044
  operation between the new authority and the industry. I share the surprise of my hon. Friend the Member for Blackpool, South that the President of the Board of Trade did not find time to refer to this essential co-operation. The industry involves a myriad of inter-related parts, each with its own specific interest and each self-motivating. It is idle to think that the proposed British Tourist Authority will be in any way as effective as the British Travel Association unless it wins the co-operation of the industry.
  I hope that the Minister of State will say something about the Government's intentions. How will they recover from the unfortunate birth of this Bill on which consultation was omitted? How will they convince the industry, which is used to working with the British Travel Association, that it will find the British Tourist Authority equally understanding?
  Part I naturally provokes the strong regional feeling expressed by many of my hon. Friends. We must try in Committee, so far as the Long Title enables us, to rectify the defects in this Part of the Bill. It is not only the South-West that will require to know how its interests are to be safeguarded, and it is not only the regions of the country in the normally understood sense; London and the South-East remain the main tourist magnet for overseas and an essential part of many home holidays. We shall need to satisfy ourselves in Committee that more regard can be had to regional requirements and regional feelings.
  What, we ask ourselves, is this new British Tourist Authority intended to do? We recognise the job of promotion, marketing, co-ordination and stimulation; that we all accept. But we find it hard on this side of the House to understand, from the relatively slight time which was given to them by the President, what Clauses 3 and 4 are intended to do, and we shall want to examine these fully in Committee.
  We accept that there may be a case for some triggering operation occasionally in order to start a process for which private enterprise will meet the market demand. But we are not an underdeveloped country; we have a magnificent private enterprise system and a stalwart local authority system, and there should be precious little that Clauses 3

  2045
  and 4 need to do if the tasks are approached in the right way. There may be individual cases, and we shall listen to the explanation in Committee before coming to a conclusion.
  On this part of the Bill I must ask the Minister of State to say a word about Northern Ireland. It has a particular relationship to the British Travel Association. What will be its relationship to the British Tourist Authority?
  I turn, finally, to Part III, on registration. We on this side of the House find that the voluntary system has worked extremely well, that there are a number of guides and that the guides are improving. We find it hard to justify registration, let alone classification, grading or even, perish the thought, inspection. What justification can there be, in the light of the growing and improving voluntary guides, for all the paraphernalia of staff, cost, inspection and penalty? I ask the Minister not to tell us that other comparable countries depend upon statutory guides. They may have statutory guides, but the people who visit and spend holidays in those countries use the voluntary guides.
  We shall try, in Committee, to put the powers of Part III at least into reserve, if not into abeyance. We shall try to make Part I more sensible. We hope that Part II achieves its purpose, but the basic health of the tourist industry as a whole will need far different treatment from that provided by the Bill.
  9.39 p.m.
  The Minister of State, Board of Trade (Mr. William Rodgers): Before today's debate began there were strong rumours of internal oposition difficulties over this Bill. "West M.P.s rebel", one headline ran. "Scots and English Tories split" was another.
  I was prepared to believe that this was an exaggeration of the difficulties within the Opposition, but the reports have been fully reflected in the debate, not least in the opening speech of the hon. Member for Moray and Nairn (Mr. Gordon Campbell), who was not allowed to tread, as he sought to do, softly around his case. Had the Opposition decided officially to vote against aid for hotels and a new organisation for tourist development, as the majority of speakers on that side
  2046
  of the House would have had them do, we would have rejoiced. This would have been self-inflicted damage.
  We shall see at the end of the debate if there are many hon. Members who choose to go on record against a new organisation for tourist promotion and development, new incentives to the hotel industry and provision for support for tourist projects. That is the logic of most of the speeches which we have heard from right hon. and hon. Gentlemen opposite. They do not like the Bill. They do not like any of its provisions. One of them said that its structure is wrong. The logic of all that is to go on record against it.
  For my part, and for all hon. Members on this side of the House, although it is possible to argue about one aspect or another and although there may be Committee points to be dealt with in due course, this Bill is a charter for tourism. It provides a framework for development. It would be very unfortunate for Britain if the House went on record against it.
  The right hon. Member for Leeds, North-East (Sir K. Joseph) made a very reasonable speech. However, all that he said failed to paper over the cracks on the other side. The schizophrenia of hon. Members opposite is painful. They want more boards and less bureaucracy. They want more spent on tourism, and almost everything else, but, of course, less public expenditure. They complain about delays, but consider that consultation did not go far enough.
  Last week, the hon. Member for Eastbourne (Sir C. Taylor) suggested to my right hon. Friend the Leader of the House that this Second Reading was a bit early. The hon. Member for Tiverton (Mr. Maxwell-Hyslop) repeated that today. It may be a bit early for some hon. Members opposite, but, believe me, it is not too early for many of those in the industry who have been urging us—as have a number of hon. Members, including the hon. Member for Blackpool, South (Mr. Blaker)—to produce the Bill and carry it through because of its incentive provisions for the hotel industry.
  Mr. Blaker: My point at the time in question was to ask why the Government were not ready when the previous loan scheme expired nearly a year ago?
  Mr. Rodgers: There has been a bridging operation. We published the White Paper in May. We have been consulting, and we have been eager to get the Bill. If hon. Members opposite do not like it, the remedy is in their hands.
  Mr. Maxwell-Hyslop: The hon. Gentleman has misrepresented the position a little. The complaint is not that the Bill had its first Reading too early, but that there was inadequate time between First and Second Reading for proper consultations. Local authorities have put that view to me.
  Mr. Rodgers: I fully understood that point. The complaint is that we published the Bill and have taken the Second Reading too soon. However, I think that the majority opinion in the industry would be that, having published the Bill, it was our duty to bring it before the House as soon as possible so that we could have our debate today.
  Sir C. Taylor: The point is that we did not have sufficient time between the publication of the Bill and Second Reading to consult the very people whom the Minister is now quoting as supporting it. If we had had more time to enter into consultations, it would have been better for us and for our constituents.
  Mr. Rodgers: I am sorry that there was not sufficient time, but, on occasions like this, most of us find it possible to make representations and, as a number of references today have shown, there has been time enough for others to make representations to us.
  The plain fact is that the Opposition see much merit in the Bill, but resent having to give the Government credit for it. That is a pity. The subject is too big and too important for such pettiness. In fact, the positive prejudice which the right hon. Member for Leeds, North-East mentioned has been shown in the speeches of right hon. and hon. Gentlemen opposite today, with one or two notable exceptions, one of which was the very constructive speech of the hon. Member for Isle of Thanet (Mr. Rees Davies). For the greater part, they have not been concerned with constructive policies, but only with making a thorough nuisance of themselves. They are entitled to do so. But this is
  2048
  an important Bill. It is good for Britain and we want to make progress, or hear constructive comments which will enable it to be further improved later.
  I was struck by the remark of the right hon. Member for Argyll (Mr. Noble), who made a very thoughtful speech. He made an appeal to the Front Bench that he has lately left. He asked that at the next election there should be a Tory policy for tourism. That sums it up. There is no Opposition policy today; only a reflex. They are united only in hostility to S.E.T.
  The more I heard about S.E.T. today, the more I was persuaded that this is not a subject upon which the House is prepared to have a rational discussion. I could repeat what my right hon. Friend said about S.E.T. not necessarily affecting profits or investments. I could point out, as did the hon. Member for Oswestry (Mr. Biffen), the irrelevance, for the most part, of investment allowances. I could indicate that the limited concessions last year on S.E.T. for hotels in rural development areas was justified, because in those areas alternative employment is not so easily available. But I do not believe that, whatever my arguments, I should change opinions today or thereby advance the course of the development of tourism. We must await Reddaway and other occasions for this.
  I want to make one point about aid for the industry and for promotion and development, which ought surely to go on record. During the last four-year period of the previous Conservative Government, the average grant in aid each year to the B.T.A. was in the region of £1,400,000. The average for the four full years of this Government is £2½ million—an increase of 75 per cent. Those who complain about this Government's attitude to tourism, and suggest that the tourist industry is on its knees, do not help the industry; they deny the facts of the growth of tourism and the support which has been given to the B.T.A.
  Doubts have been expressed about the adequacy of consultation. The hon. Member for Moray and Nairn (Mr. Gordon Campbell) and the hon. Member for Blackpool, South mentioned this matter. I do not think that such criticism is justified, but I should like to deal with it, because it is a

  2049
  serious point. Were those doubts justified, I should be sorry. Certainly, considering the constant pressure in this House for action, of which I do not complain, I think that we have consulted very fully. Once again, the Opposition cannot have it both ways.
  My right hon. Friend first declared his intention to introduce a new hotel incentive scheme on 20th March, 1968—nearly a year ago. The White Paper, published in May, which also made clear our intentions on registration, in paragraph 44, states that the Government are considering the possibility of organisational changes. On 13th November last, my right hon. Friend made a full statement to the House, which the Bill closely follows.
  I think that such a lengthy period of preparation, with suitable stages within it, would have provided every interested body with a chance to make its views known to us. Many have done so. Most representations have been in writing. I am not aware that at any time consultations with officials on detailed matters have been denied either concerning the White Paper or the statement of my right hon. Friend on 13th November last.
  As hon. Gentlemen opposite know, there is a difference between consultation and acceptance. We have listened to, and carefully considered every comment and suggestion. We have not always been persuaded, we could not have been, in so far as some representations have inevitably been contradictory. In particular, we have been in close consultation with the B.T.A., and my right hon. Friend has already paid tribute to it for its work. We very much appreciated its constructive advice at all stages.
  As the right hon. Gentleman said, it is important that we should have its continuing good will during the hand-over stages. We are anxious that relations which the Association has built up with the industry should be maintained. We shall play our part, and I am sure that the B.T.A. will continue to be as helpful as it has.
  Mr. Gordon Campbell: Can the hon. Gentleman confirm, or not, that these emergency meetings with the British Hotels and Restaurants' Association have had to take place?
  Mr. Rodgers: I shall come to that in moment.
  Apart from frequent discussions with officials, Ministers have been in close personal contact with Lord Geddes, and I shall be seeing him next week. The B.T.A. has not complained of a lack of consultation. We have been anxious for its advice. We need it still, and we are very ready to listen.
  In formulating proposals we have properly regarded the B.T.A. as the main channel of communication for the industry, while not excluding any other. There is no need for me to list all the organisations represented on the Council of the B.T.A. It is very extensive. Even the much smaller board gives a good spread of interests—hotels, catering generally, breweries, transport, travel agents, local authorities, and so on.
  There has been unanimous praise for the B.T.A. today. Some of our critics outside the House have also named the B.T.A. as their model. Surely it is churlish to argue that its virtues do not extend to being the best vehicle for conveying the distilled wisdom of the industry to the Government? That is why we have relied on it, and if hon. Gentlemen think that we were wrong, they are free to say so.
  I am, however, aware that the British Hotels and Restaurants' Association has felt a sense of grievance in this matter. I have looked carefully into the history of this, and I do not find the complaint justified. I hope that the House will forgive me if I refer to these details, but this is the only way to establish the point, the complaint having once been made. I have found correspondence from the secretary, on 3rd April last, saying how much he appreciated our invitation to let us have comments in advance of the publication of the White Paper, and similarly, on 17th June, acknowledging the invitation to put forward observations on the White Paper. Not until 27th January of this year were Ministers asked to receive a deputation, and this was immediately agreed.
  I must add that the Chairman of the Council of the B.H.R.A. is also a member of the board of the B.T.A. Be that as it may, in so far as the B.H.R.A. has felt a sense of grievance, I am sorry. I said this to its deputation last week,

  2051
  and offered to be personally available for consultations during the progress of the Bill. I shall be seeing them again next week, and Mr. Hugh Wontner has kindly expressed his personal appreciation. In so far as there were hatchets to be buried, they are now several feet under.
  As my right hon. Friend said, it seemed good sense to us, involving the fullest utilisation of brains and manpower, to put the functions of promotion and development together, but we had no preconceived view of how this might best be done. It was only after thought and discussion that we settled upon the form embodied in the Bill. I have listened to the contributions to the debate today, not primarily in order to shoot them down, but to discover whether there is a convincing alternative which we might have overlooked, but none has emerged.
  There are advocates for the solutions which we rejected, but no original proposal. We seriously considered the advantages of a separate English board, but concluded that it would be either wasteful of resources, bureaucratic in the sense that hon. Members opposite so much dislike, or, if it led to the extinction of the British Tourist Authority, would fragment effort and impede overseas promotion.
  More important, a board of seven members was hardly likely to satisfy the intense feelings, the passions, which we have seen today of different parts of England. In that assumption, we have been amply justified. The South-West, it seems, wants a board to itself, but the Lakes, or Northumberland-Durham, spoken for by my hon. Friend the Member for Blyth (Mr. Milne), or the Thames Valley, or Norfolk, for which my hon. Friend the Member for Yarmouth (Dr. Gray) made an eloquent plea, could make the same demand. This would be bureaucracy run mad, especially if we included Rutland as well.
  Even in the South-West—distinct holiday area as the right hon. Member for Devon, North (Mr. Thorpe) called it—there are divisions of opinion. Cornwall is very proud of its identity and traditionally distrustful of Devon. It wants to run its affairs on its own. We all know the problems that there have been in the South-West of getting a united voice speaking for the South-West. Corn-
  2052
  wall wants to be on its own and, in the end, if we followed this path, we would have not two boards or three but 22 or 23. Surely that would be bureaucracy taken beyond the point that anyone could tolerate.
  But, of course, we want to see the new regional organisation well backed by regional interests, both public and private. We want to see the voluntary regional associations grow. We shall seek to encourage them, and we believe that the English Advisory Committee will be able to speak for the different and diverse regions of England. The Bill does not legislate for Northern Ireland, nor for the Isle of Man or the Channel Islands, but we know that the respective Governments welcome the provision in Clause 5(3) by which the British Tourist Authority will be able to help with the promotion overseas of tourism to Northern Ireland and the Islands in consultation and co-operation with their own organisations.
  We do not claim that the Bill will transform the tourist industry. In any case, transformation is not what the occasion requires. It is, however, a charter for tourism. One of Britain's great attractions is the diversity of its countryside, the great contrast between regions each of which has so much to offer. I acknowledge and respect the genuine local patriotism of the kind which has found powerful advocates today, but it would be unfortunate if this diversity led to fragmentation of effort or a less than wholehearted willingness to make the new tourist organisation work.
  In the end, the success of tourism depends upon the individual efforts of many hundreds of thousands of people and, for foreign tourists, the welcome which they get when they arrive from overseas. But the Bill is a step in the right direction which should be supported.
  Mr. Charles Grey (Treasurer of Her Majesty's Household)Mr. Charles Grey (Treasurer of Her Majesty's Household) rose in his place and claimed to move, That the Question be now put, but Mr. SPEAKER withheld his assent and declined then to put that Question.
  Mr. Victor Goodhew: The hon. Gentleman has brushed aside the criticism from this side with the arrogance which we have come to expect from the Government. I was surprised to hear

  2053
  him also discuss the hatchets which are supposed to be so deeply buried so far as the British Hotels and Restaurants' Association is concerned—
  Mr. Grey Mr. Grey rose in his place and claimed to move, That the Question be now put.
  Bill accordingly read a Second time.
  Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

DEVELOPMENT OF TOURISM [MONEY]
Queen's Recommendation having been signified—
Resolved,
That, for the purposes of any Act of the present Session to provide for the establish-
Question, That the Question be now put, put and agreed to.
Question put accordingly, That the Bill be now read a Second time:—
The House divided: Ayes 110, Noes 10.

Division No. 102.]

AYES

[10.0 p.m.

Atkinson, Norman (Tottenham)

Cray, Or. Hugh (Yarmouth)

Milne, Edward (Blyth)

Barnes, Michael

Gregory, Arnold

Morgan, Elystan (Cardiganshire)

Beaney, Alan

Grey, Charles (Durham)

Murray, Albert

Bessell, Peter

Griffiths, Will (Exchange)

Newens, Stan

Bishop, E. S.

Hamilton, James (Bothwell)

Orme, Stanley

Blenkinsop, Arthur

Harper, Joseph

Pannell, Rt. Hn. Charles

Booth, Albert

Hazell, Bert

Parker, John (Dagenham)

Boyden, James

Houghton, Rt. Hn. Douglas

Pavitt, Laurence

Bradley, Tom

Howarth, Harry (Wellingborough)

Peart, Rt. Hn. Fred

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

Howie, W.

Probert, Arthur

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

Hunter, Adam

Rankin, John

Carmichael, Neil

Jeger, George (Goole)

Reynolds, Rt. Hn. G. W.

Concannon, J. D.

Jenkins, Hugh (Putney)

Roberts, Rt. Hn. Goronwy

Crosland, Rt. Hn. Anthony

Johnson, Carol (Lewisham, S.)

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

Crossman, Rt. Hn. Richard

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

Rodgers, William (Stockton)

Davidson,James (Aberdeenshire, W.)

Kelley, Richard

Roebuck, Roy

Davies, Ifor (Gower)

Kenyon, Clifford

Ross, Rt. Hn. William

de Frenas, Rt. Hn. Sir Geoffrey

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

Shaw, Arnold (Ilford, S.)

Dell, Edmund

Lawson, George

Sheldon, Robert

Dempsey, James

Lestor, Miss Joan

Silkin, Rt. Hn. John (Deptford)

Dewar, Donald

Loughlin, Charles

Small, William

Dobson, Ray

Luard, Evan

Spriggs, Leslie

Driberg, Tom

Mabon, Dr. J. Dickson

Steel, David (Roxburgh)

Dunnett, Jack

McBride, Neil

Steele, Thomas (Dunbartonshire, W.)

Dunwoody, Mrs. Gwyneth (Exeter)

MacColl, James

Thorpe, Rt. Hn. Jeremy

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

MacDermot, Niall

Tinn, James

Eadie, Alex

Macdonald, A. H.

Urwin, T. W.

Edelman, Maurice

McKay, Mrs. Margaret

Wainwright, Edwin (Dearne Valley)

Edwards, William (Merioneth)

Mackenzie, Alasdair (Ross&Crom'ty)

Wallace, George

Ellis, John

Mackenzie, Gregor (Rutherglen)

Watkins, David (Consett)

Faulds, Andrew

McNamara, J. Kevin

Wellbeloved, James

Fernyhough, E.

Mahon, Peter (Preston, S.)

Whitaker, Ben

Fitch, Alan (Wigan)

Marks, Kenneth

Wilkins, W. A.

Fletcher, Raymond (Ilkeston)

Marquand, David

Willis, Rt. Hn. George

Fletcher, Ted (Darlington)

Mason, Rt. Hn. Roy

TELLERS FOR THE AYES:

Forrester, John

Mayhew, Christopher

Mr. Ernest G. Perry and

Fraser, John (Norwood)

Mendelson, J. J.

Mr. Ioan L. Evans, J.P.

Freeson, Reginald

Miller, Dr. M. S.

NOES

Biffen, John

Lewis Kenneth (Rutland)

Wilson, Geoffrey (Truro)

Bruce-Gardyne, J.

McAdden, Sir Stephen

Currie, G. B. H.

Maude, Angus

TELLERS FOR THE NOES:

Goodhew, Victor

Powell, Rt. Hn. J. Enoch

Mr. R. J. Maxwell-Hyslop and

Hirst, Geoffrey

Sir Edward Brown.

ment of a British Tourist Authority and Tourist Boards for Scotland and Wales with responsibility for promoting the development of tourism to and within Great Britain, it is expedient to authorise—

(1) the payment out of moneys provided by Parliament of any expenditure attributable to that Act of the Board of Trade, the Secretary of State for Scotland and the Secretary of State for Wales; and

(2) the payment into the Consolidated Fund of any sums required by that Act to be so paid.—[Mr. Crosland.]

POST OFFICE [MONEY] (No. 2)
Queen's Recommendation having been signified—
Resolved,
That, for the purposes of any Act of the present Session to abolish the office of master of the Post Office, distribute the business conducted by the holder thereof amongst authorities constituted for the purpose and make provision consequential on the abolition of that office and the distribution of the business so conducted, it is expedient to authorise—

(a) the charge on, and the issue out of, the Consolidated Fund of such sums as may be necessary to remunerate the corporation that is to be established, by virtue of that Act, by the style of the Post Office for the rendering by it, without charge, in pursuance of the Representation of the People Act, 1949, of postal or telegraphic services; and

(b) the payment, out of moneys provided by Parliament, of any sums required by the Minister of Housing and Local Government for remunerating that corporation for the issue by it, in England or Wales, of dog licences, licences for dealing in game or licences for killing game.—[Mr. K. Robinson.]

REDUNDANT CHURCHES AND OTHER RELIGIOUS BUILDINGS BILL
Order for Second Reading read.
Motion made, and Question put forthwith, pursuant to Standing Order No. 60A (Second Reading Committees), That the Bill be now read a Second time.
Question agreed to.
Bill accordingly read a Second time.
Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

REDUNDANT CHURCHES AND OTHER RELIGIOUS BUILDINGS [MONEY]
Queen's Recommendation having been signified—
Resolved,
That, for the purposes of any Act of the present Session to authorise the making of grants to the Redundant Churches Fund and to exclude section 40 of the Town and Country Planning Act, 1968 in relation to the demolition, in certain cases, of redundant places of public worship, it is expedient to authorise the payment out of moneys provided by Parliament of expenses incurred by the Minister of Housing and Local Government in making to that fund,

(a) in the period beginning with the passing of the said Act of the present Session and expiring with the day preceding the fifth anniversary of the coming into operation of the Pastoral Measure, 1968, grants not exceeding in the aggregate £200,000; and

(b) in any later period specified by order of that Minister, grants not exceeding in the aggregate such sum as may, in relation to that period, be so specified.—[Mr. K. Robinson.]

Sir Gerald Wills discharged from the Committee of Public Accounts; Mr. Keith Speed added.—[Mr. Ernest G. Perry.]

LAND COMMISSION (MRS. LOWE)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Ernest G. Perry.]
10.14 p.m.
Mr. R. W. Elliott: I am grateful to the Minister for Planning and Land, in view of the pressure of work upon him, for coming here to answer this debate personally at this time of night.
I am glad to have this opportunity to raise what I believe to be a case of extreme individual hardship inflicted on a defenceless citizen—I emphasise those words—through the working of the Land Commission Act. A short while ago the Chairman of the Land Commission stated through the medium of a newspaper article that the Land Commission Act was most complex and had
"some loose and rather nasty ends which need tightening up".
Sir Henry Wells continued:
"I am aware of many cases of unfairness. I can only administer the law as it stands."
It is a case of extreme unfairness which I am raising tonight. I have made the Minister fully aware of the details. It is one of many which should persuade the right hon. Gentleman that this Act of Parliament, which will disappear altogether with the advent of a Conservative Government, should nevertheless be amended for the remaining period of this Labour Government.
Mr. Speaker: Order. The hon. Gentleman cannot propose amendment of the law on the Adjournment.
Mr. Elliott: I am obliged, Mr. Speaker. I seek only to point out the effect of the Act as it stands on an individual constituent.
Mrs. Doris Lowe, of Newcastle-upon-Tyne, is a widow whose income is less than £9 a week. She receives £6 15s. 6d. a week from Social Security, and she augments this income with a small part-time job which brings her in just over £2. Mr. Lowe, her husband, died on 4th October, 1966, and was able to leave one item, and one item only, of value to his widow. That was a plot of land in an area known as Darras Hall, Pontleland,
2058
which Mr. Lowe had, in his turn, inherited from his father who had died in 1946.
Father and son had shared a common ambition, to build on this plot of land, which is about half the size of a football pitch, a house for their own occupation. I make that point very firmly because a fundamental factor in this case is that the Lowe family, father and son, can in no conceivable sense be regarded as land speculators.
The story of this plot of land is a sad one because neither father nor son could ever afford to achieve his ambition of building a house upon it. For the younger Mr. Lowe, however, there was hope and he did almost come to the point of beginning negotiation towards the starting of building of his longed-for house, though that hope was sadly dashed by his premature death.
In the interim before he died, Mr. and Mrs. Lowe were so fond of their plot of land that they purchased a caravan and, pending such time as they could, as they hoped, afford to build their house, they spent many happy weekends on what they confidently believed to be the site of their future home.
After the death of her husband, Mrs. Lowe gave up the idea of building, knowing quite well that she could never afford to do so. Her only comfort at the time of her husband's death was the knowledge that the plot of land, which had been cherished for so long by father, son and eventual widow, would give her a certain capital sum with which she could face what would obviously be a lonely future. The land was duly sold for £3,600, and this—I emphasise it—was almost all that Mrs. Lowe had in the world.
Nevertheless, under the cruel terms of the Land Commission Act, this widow, left alone in the world, has been forced by law to hand over no less than £1,253 12s. of the £3,600 as so-called betterment levy. We on this side of the House have regularly called the Land Commission Act possibly the most muddled piece of legislation ever to reach the Statute Book. With considerable justification, we have called it unfair and unjust. I have no hesitation in describing its application to Mrs. Lowe of Newcastle-upon-Tyne as inhuman.

2059
In the course of the 1964 and 1966 General Elections, we were told that a Labour Government would legislate to collect by taxation profits made by land speculators. I do not think that any of us would argue unduly with heavy taxation being placed on those in our community who have made enormous profits through speculation of any kind—short-term profits and short-term gains made through the luck of the draw or the luck of the market. But, I repeat, in what conceivable sense could Mrs. Lowe or her husband have been considered speculators? This land had first been purchased by the late Mr. Lowe's father. It had been in the possession of Mr. Lowe senior and then Mr. Lowe junior since 1917. This was no short-term gain. That piece of land had been purchased and cherished with only one idea in mind, that of building a house for a family. Yet at the point of the premature death of her husband and of a widow being left alone in the world, a cruel Act of Parliament, inflicted by a cruel Government, takes from that defenceless widow a fantastic amount of her very small capital.
It is my hope that by raising this case tonight I shall make the public aware that a massive Act of Parliament is being used to oppress small, defenceless citizens. This is not taxation. It is legalised robbery. It is a public disgrace that this widow has had this amount of money extracted from her by law. This Labour Government should get on their knees in shame at having extracted it.
Mr. Speaker: Order. The hon. Gentleman knows that I chose this subject for debate tonight. He cannot, however, on an Adjournment debate, propose reform of the law. He can criticise the administration of it. That is what he must do.
Mr. Elliott: I accept your Ruling, Mr. Speaker. I shall criticise the administration of it.
Mrs. Lowe knows full well that she will not recover her money. I rather respect her for her view. But what she has said is that she hopes that her case will help to persuade this Government that others may be punished as she believes that she has been punished. I call on the Minister to recognise the harshness
2060
of the infliction of the law on this defenceless citizen, and I hope that he will use his influence to amend the law accordingly.
10.24 p.m.
The Minister for Planning and Land (Mr. Kenneth Robinson): The hon. Member for Newcastle-upon-Tyne, North (Mr. R. W. Elliott) has deployed the case as he sees it on behalf of his constituent, Mrs. Lowe, and has widened his remarks, in so far as the rules of order permitted him to do so, to attack the legislation under which this levy was made. I will do my best to deal with the particular case and also, subject to the rules of order, with one or two of the wider issues.
It used to be said of the Town and Country Planning Act, 1947, that it was the most complicated piece of legislation which had ever reached the Statute Book. More recently, a similar claim has been made for the Land Commission Act. The hon. Gentleman did not use the word "complicated"; he used the word "muddled". Although I would not subscribe to this view, I readily concede that it has its difficult passages. But the paradox is that the principle behind Part III of the Act—the much vilified betterment levy provisions—is one of the utmost simplicity, which I will restate in a few moments.
Whether the Opposition agree with the imposition of betterment levy is a separate matter, but it is wrong to suggest that the whole principle of the levy is impossible to comprehend when the complications are confined to the more unusual cases and circumstances. In the particular case raised by the hon. Gentleman, it will be seen that few of the complicated provisions about which we hear so much have any bearing on it. Let us look again at the simple principle of betterment levy.
Mr. Speaker: Order. I want to help the right hon. Gentleman as I helped the hon. Member for Newcastle-upon-Tyne, North (Mr. R. W. Elliott). We cannot debate the Act. We can debate the administration of it as far as it concerns the hard case which the hon. Gentleman raised.
Mr. Robinson: That is precisely what I hope to do, Mr. Speaker, but I thought that it would perhaps be a good idea—since betterment levy has been criticised as larceny by the solicitors of the hon. Gentleman's constituent—to explain what the principle behind it is, because it is most certainly not larceny. Let us look again then at the simple principle of betterment levy. Land, whether or not it has buildings on it, has the value of the purpose for which it is at present used. I do not think that it is lapsing too far into jargon when I say that that is called the "current use value". It is a perfectly clear expression. We all know that when planning permission is granted to put land to a more valuable use, or where the prospect of planning permission being granted can be clearly seen, the value of the land rises. The difference between these two values, the amount by which the grant, or prospect, of planning permission has increased the value of land, is the development value, and it is on this figure that levy is based.
It would be very convenient if the matter could be left like that, with a few simple sections in the Act to levy all development value, but without further refinement the levy would indeed be arbitrary. The accretions to the simple framework of a levy on all development value—the complications, if one likes—are principally designed to ensure, first, that allowances are given where necessary so that the levy is applied evenly however development value is realised, and, secondly, that where levy has been taken once on any development value it is not taken again. Nor should it be overlooked that a quite sizeable part of the Act is concerned with providing exemption from levy. It is not against these complications in the Act, I imagine, that complaint is made.
These exemptions so far as they concern individuals are mainly of a transitional nature intended to ensure that if land was owned before the issue of the White Paper in September, 1965, and had been bought for the specific purpose of house building, its owner should not be put in worse position when that purpose is carried out. If, for instance, a house builder had bought land with a view to building houses and secured his planning permission, he pays no levy despite the increase in the value of the land. Again,
2062
if a householder builds for an immediate member of his own family there is no levy. But there is no question of an exemption where no development takes place and all that has happened is that the planning position in the neighbourhood has greatly increased the value.
I have dealt briefly with these provisions because in dealing with the case of Mrs. Lowe I must ask myself whether within the philosophy of the Act it could be argued that an exemption should apply to her case, to which I now turn.
The facts have been clearly given by the hon. Member. This lady owned a piece of land which perhaps with foresight the family bought as long ago as 1917 and 1920 when land which is now much sought after in a prosperous and popular small township was cheap and easy to come by. Its current use was for agricultural purposes. She has now sold it for a building plot and has been charged a betterment levy of 40 per cent. of the difference between those two values, which is the gain that planning permission has brought to her.
I think that the aspect of this case which the hon. Member finds most distasteful is that for some time the land has either had planning permission or could have had planning permission for building a house upon it. Indeed, in correspondence he has said that had Mrs. Lowe sold the land at any time between September, 1965, and April, 1967, during the rather protracted passage of the Land Commission Bill through the House she would have escaped liability. That is true. I do not deny that it was known long before April, 1967, possibly as much as 20 years before, that this land could be used for building purposes.
But the Land Commission Act quite deliberately does not assess levy according to April, 1967, values. Not only would this be an impracticable task and result in no levy at all for a great many years but the Government do not accept that development value created before April, 1967, should escape betterment levy when it is realised after that date. We should need entirely fresh legislation to deal with such a concept. I wonder whether that is what the Opposition have in mind when they carry out their threat to abolish the Land Commission and are noticeably silent

2063
about what they propose to do about betterment levy.
Secondly, much play is made with the fact—and the hon. Member made the point again this evening—that Mrs. Lowe is not "a speculator". Of course she is not. But it is a great mistake to think that the Land Commission Act was designed as a selective weapon against that one section of the community. Indeed, one of the Government's main concerns in drafting the Act, and one which leads to many of its complications, was that it should apply evenly to all profits in land which arise from the fortune of planning permission being granted.
Mr. Reginald Eyre: Does not the theory which the Minister has explained mean that exemption is given to a builder or developer in the circumstances which he has described but is denied to a widow?
Mr. Robinson: No. That is not so. These exemptions apply to the period between the publication of the White Paper and the legislation. I emphatically deny that the builder is placed in an advantageous position vis-à-vis the individual owner.
From the figures given by the hon. Member it is clear that a development value of over £3,000 has been realised in this case. Is he arguing that a profit of that magnitude ought not to be taxed?
Finally, the Government are castigated for taking levy from this lady because she is a person of limited means. I regret very much that she is in this position, just as I regret that so many members of the community are in a position in which they cannot afford to do all the things they would like to do. Do the Opposition want a new sort of means test by which a person who makes a fortuitous gain from obtaining planning permission should be called upon to demonstrate by reference to his means how much of that gain he should be entitled to keep? Is that what the Opposition have in mind and is that one of the reforms which they will introduce?
Mr. Elliott: Does the right hon. Gentleman realise that this is a widow who does not understand legislation? When he speaks of an enormous for-
2064
tuitous gain, does he realise that this land was in the possession of her husband and her husband's father from 1917? In what possible sense can she be called a speculator? The legislation was designed to catch speculators.
Mr. Robinson: I specifically rejected the concept that she was a speculator and I said that the Act was not solely designed to deal with speculators. She has made a profit on this land because planning permission was granted for the building of a house, granted by the community. The increase in value was created not by her but by the community and it does not seem to me to be a gross injustice that a proportion of the increase should go back to the community.
I was asking whether the Opposition had in mind that there should be a means test approach. If they have I gather it would involve a still more complicated Act and a very much larger staff to operate it.
Mr. Speaker: Order. The Minister cannot ask the Opposition, on an Adjournment debate, what legislation they would propose.
Mr. Robinson: I accept your observations, Mr. Speaker, and I will try not to stray again from the paths of righteousness. If one argues that a person of limited means should not pay 40 per cent. of his gain to the community then one should go on to argue that a person of substantial means should not be allowed to keep the 60 per cent.
What could Mrs. Lowe have done that she did not do? The Act makes provision for those who object to their assessment, and their rights are clearly set forth on the notice that they receive. Incidentally, I do not expect Mrs. Lowe to understand the Act, but people who sell plots of land for £3,600 normally take professional advice, and I should have thought that her professional adviser would have told her exactly what the situation was.
The Act provides that a counter notice can be served within two months of the service of the notice, and an alternative assessment put forward if the district valuer's assessment is considered excessive. The grounds of the objection have to be stated, and there are various grounds

2065
on which counter notices can be put forward. One of the commonest grounds is perhaps that the levy payer does not agree with the current use value put on the land by the valuer concerned. This is a matter of expert judgment and one that can be the subject of argument. It is, however, a figure which is crucial, because that basis of the levy assessment is this figure subtracted from the market value, which in this case is not subject to argument since it is the price at which the land was sold.
It was open to Mrs. Lowe to take advantage of these provisions. Plenty of people have done so. One case has already been heard by the Lands Tribunal, and others are coming forward. From the fact that she did not do so I can only assume that she was prepared to accept the valuer's figure and saw no grounds for putting forward a higher figure so as to reduce the levy.
Nor am I clear what sort of an exemption the hon. Member wants the Commission to recommend. I have seen in recent Press comments on the Commission a narrow band of cases where it is alleged there is "robbery" or sometimes worse. I only take exception to these comments when they attempt to bring personal ridicule on civil servants who cannot reply on their own behalf—a form of public controversy which I am sure the whole House deplores. I fully accept that the hon. Gentleman has not engaged in this. Unfortunately, one or two newspapers have.
Indeed in one respect, at least, I welcome these comments because they serve to bring home to people who may otherwise be unaware of it that the Act is intended not merely to mulct the speculators but genuinely and in a thoroughgoing manner to restore to the community a proportion of what rightly belongs to it.
I have taken note of a good many of these comments. I find that at one end of the list of the cases with which most of them deal are the old-age pensioners who have sold house and garden and are levied because there is development value in the garden. At the other end are young couples who have been given plots of land and built a bungalow which gives a higher value to the land, on which levy is, therefore, due—levy, let me say
2066
in passing, at 40 per cent., whereas if they had bought land in the open market they would have paid 100 per cent. of net development value.
There have been pleas from hon. Members that I should try to exempt from levy this or that class of case. But no one till tonight has seriously suggested that I should summon a coach and horses and drive right through the basic principles of the Act to provide exemptions for such cases as Mrs. Lowe. I might as well dismantle the whole machinery of the betterment levy, and whatever the intentions of the party opposite in this matter, whatever sympathy I may feel for personal cases where people find it hard to pay the levy, such a measure is, to put it mildly, outside the scope of an Adjournment debate.
10.40 p.m.
Mr. Reginald Eyre: In his opening remarks the Minister almost described the Act as easy to understand. He suggested that it was within his competence. Then he went on to give a theoretical explanation of the working of the Act which I found to be muddled. It must be so, because the Act is based on a muddled theory.
Concerning these exemptions, there is no doubt that developers and builders have an advantage compared with the widow in these circumstances. By cutting the sod and beginning development they exempt themselves from liability, although they were owners of the land at the same time as this unfortunate widow. Therefore, I maintain that my hon. Friend is right in raising this matter and claiming that this widow has been treated with unjustifiable hardship.
The Minister suggested that had the widow or the previous owner—her husband—disposed of the land, they would have been exempt from this charge. But let us look at the date of death. The husband, who hoped to build a small house on this land, did not die until November, 1966. Therefore, there was no chance to dispose of it before this dreadful Act came into operation early in 1967. This poor widow was caught—absolutely trapped—by the circumstances of this case.
The Minister asks why she did not serve a counter notice and have an argument about the valuations. The truth is

2067
that it would not have made a scrap of difference, because the valuations are probably right, based upon the Act. But the Act is wrong and unjust. It is, therefore, the administration of the Act in this case which causes hardship and injustice.
Looking at the amount of levy which has been assessed in this case, there is no doubt that it is an excessive taxation. It cannot be denied that to take this great slice of money out of this small estate is wrong, and it cannot be justified morally. It is an excessive taxation.
Mr. K. Robinson: The hon. Gentleman is now criticising the Act passed by this House. There is no question that the amount of levy that Mrs. Lowe has been called upon to pay is precisely the amount of levy that this House intended
2068
that a person in her circumstances should be called upon to pay.
Mr. Speaker: Order. The right hon. Member can only intervene. He cannot make another speech without leave of the House.
Mr. Eyre: I have no doubt that the assessment, in figures, is correct in accordance with the Act forced through the House by the Government. I am presuming to question the moral basis of this taxation, because the Act is wrong—
The Question having been proposed after Ten o'clock and the debate having continued for half an hour, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at sixteen minutes to Eleven o'clock.

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Preamble
The House met at three of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Birmingham.
The Lord Harvey of Tasburgh—Sat first in Parliament after the death of his father.

DUTY ON IMPORTED MATCHES
VISCOUNT MONCKTON OF BRENCHLEY: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government what is the customs duty on imported matches from Sweden and the United States of America; and what would be the duty on imported matches from Malta.]
LORD BESWICK: My Lords, the rate of customs duty on matches imported from Sweden is 13s. 9d. per short standard of 7,200 matches. The rate on matches imported from the United States is 14s. 5d. per short standard, and that would also be the rate on matches imported from Malta.
VISCOUNT MONCKTON OF BRENCHLEY: My Lords, while thanking the noble Lord for that Answer (and, at the same time, I declare an interest) may I ask whether he thinks it right that a Commonwealth developing country should have to pay the same import duty as foreign countries, and more than those in EFTA? Following on that question, may I ask whether there is any progress in the talks going on in GATT in relation to matches in Europe?
LORD BESWICK: My Lords, so far as the general Commonwealth issue is concerned, we are here talking only about matches; there is a preference for other products. There is a differential here between manufacturers in other countries and those in the EFTA countries, who are on the same basis as United Kingdom manufacturers. It is only 1d for 900
1196
matches, if my arithmetic is correct—one twentieth of a penny per box—which I should not have thought was decisive. The noble Viscount spoke about the developing countries and the O.E.C.D. talks. I understand that yesterday it was suggested that matches might be included on the list of those items for which developing countries may be given a preference without contravening GATT, but this is a matter for further discussion among the other O.E.C.D. members and I cannot say what the outcome will be.
VISCOUNT MONCKTON OF BRENCHLEY: My Lords, I thank the noble Lords for that answer. On the first part of his answer, does he realise that in fact that difference, small though it is in cash, is a difference between profit and loss to a small country which is trying to export to our country which itself has a favourable balance of trade with Malta?
LORD BESWICK: My Lords, I am always greatly interested in Malta and I have tried in other capacities to encourage light industry there. But we shall see what comes out of the O.E.C.D. talks.

TRADE UNIONS AND RECOGNITION DISPUTES
3.7 p.m.
LORD SANDFORD: 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 the light of recent experience in the steel industry, they believe that their proposals in paragraphs 60 and 61 of In Place of Strife (Cmnd. 3888) for the solution of recognition disputes between unions will work in practice.]
THE LORD PRIVY SEAL (LORD SHACKLETON): Yes, my Lords.
LORD SANDFORD: My Lords, I thank the noble Lord for that Answer, but may I nevertheless ask him whether he would not agree that experience so far in this recent dispute (one hopes that it is now at an end, but one fears that it may not be) indicates that it would be not only more democratic but also more decisive to ask the men concerned by

1197
secret ballot, grade by grade and plant by plant, what their view is about the union that should represent them.
LORD SHACKLETON: My Lords, I do not see how the noble Lord can draw a conclusion from the present difficulties into a future situation. The C.I.R. has not been operating. The whole detailed machinery for dealing with industrial problems is not yet functioning. I do not see that a ballot by itself would provide a solution to this particular dispute. I appreciate what the noble Lord is after, but I do not think he is making much progress.
LORD LINDGREN: My Lords, would not the noble Lord agree that in their negotiations most trade union leaders try to get the greatest good for the greatest number? Therefore, is it not essential that clerical, professional and technical workers should be represented in separate negotiations?
LORD SHACKLETON: My Lords, I naturally agree with the first part of my noble friend's question. On the second point, I am not sure that he is not putting his finger on the nub of the particular dispute, on which I think it is better if I do not comment.
LORD SANDFORD: My Lords, while hoping with the noble Lord that the decision of the British Steel Corporation will be the end of this particular matter, is it not true that everyone is now exasperated by the state of our industrial relations? We desperately and urgently need legislation. I submit that the time for consultation and the preparation of legislation has passed. Do we not urgently need legislation before us?
LORD SHACKLETON: My Lords, I must say to the noble Lord that I should rather prepare my legislation before I publish it.
LORD BYERS: My Lords, I would ask the noble Lord to bear in mind that we want as much consultation as possible before we have the legislation.
LORD SHACKLETON: My Lords, I entirely agree. I am not sure whether the noble Lord, Lord Sandford, is trying to be helpful or is trying to extract information, but I think he understands the situation well enough to acknowledge that we are confronted by very difficult problems
1198
in the field of industrial relations. The Government have produced their set of proposals, but I think any attempt to impose the proposals overnight would be very counter-productive.

F.A.O. AND LOCUST CONTROL
3.9 p.m.
LORD BROCKWAY: 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 will propose to the Food and Agriculture Organisation of the United Nations that concerted action should be taken, with financial contributions, technical aid and political co-operation from Governments, to meet the danger of massive destruction of crops in the Middle East and Africa from the extensive plague of locusts already on the move and for aid to the peoples who may suffer front this destruction.]
THE MINISTER OF STATE, FOREIGN AND COMMONWEALTH OFFICE (LORD SHEPHERD): My Lords, the Food and Agriculture Organisation has already acted. The 51st Session of the F.A.O. Council last October requested the Director General to appeal to all potential donors, including Governments, commercial firms and the United Nations Development Programme, for immediate assistance; agreed that locust control work should receive adequate priority in the allocation of the available resources of the F.A.O.; and adopted a resolution for consideration at the next Conference extending the emergency fund previously established for the control of livestock disease to cover also the desert locust. As regards aid to the people involved, the F.A.O. cannot act as a relief agency, but part of the resources of the U.N./F.A.O. World Food Programme are available for the provision of food in relief of emergencies.
LORD BROCKWAY: My Lords, while thanking my noble friend for that characteristically full reply, may I ask him whether there is later information that the grant by the F.A.O. for this purpose has been increased from £80,000? Is not that sum totally inadequate? Is he aware that experts now

1199
indicate that the locust plague may spread from India across the Middle East, across North Africa, down the East to Tanzania and down the West to Nigeria; and that it may cause more deaths by starvation than would a considerable war?
LORD SHEPHERD: My Lords, clearly the threat of locusts is something to which we must pay very great attention, but the fears of the noble Lord are perhaps, and I hope will prove to be, premature. In fact, we have had a period between 1963 and 1967 when the locust pest has been well contained. There is now a threat, but there is yet no real, serious threat. It is basically in anticipation of that threat that certain steps have been taken to deal with it.
LORD BROCKWAY: My Lords, is my noble friend aware that I very much hope that his attitude is more correct than mine? Is it not the case that the field organisation now is utterly inadequate; that the Desert Locust Control Organisation in Africa is limited to a few army tents, with magnificent, heroic service by Jim Tunstell and others, but utterly inadequate for this danger which at least experts say may be more disastrous than it has been for twenty years?
LORD SHEPHERD: My Lords, the policy of the F.A.O. in this matter is that it is very much a question for the countries concerned, although of course it participates in regional groupings and also provides assistance. We ourselves offered aid to the value of some £175,000—this was announced last October—to help the Desert Locust Control Organisation in East Africa, which is located in Ethiopia. We have also increased our own contributions to our own organisation in the field of research in this country, which is one of the most valuable contributions in this field.
LORD INGLEWOOD: My Lords, could the noble Lord either confirm or deny the rather disturbing story that we no longer have an official of the Ministry of Agriculture permanently in Rome combining the duties of Agricultural Attaché and Permanent Representative at F.A.O., such as was appointed a few years ago and I thought was deemed to be a success?
LORD SHEPHERD: My Lords, I am quite sure that that supplementary question has something to do with the original Question, but those who helped me prepare my supplementary answers did not anticipate it.
LORD OGMORE: My Lords, is it not a fact that one of the main areas for locust breeding was, and probably still is, in Southern Arabia? Was it not also the fact that in a previous time the Colonial Office used to be responsible for the control of locust breeding in that area? Furthermore, is it not a fact that the time to kill locusts is when they are hoppers; that is, when they are very young? Since we have gone from Southern Arabia, who has taken over the responsibility for that service which used to be performed by the Colonial Office?
LORD SHEPHERD: My Lords, the noble Lord has really put his thumb on the heart of the problem. Undoubtedly, the war in the Yemen has reacted on the improvements that took place between 1963 and 1967. The responsibility in this field, as I have said, lies with the countries concerned, but the F.A.O. is seeking through the regional committees to co-ordinate steps to be taken in dealing with this pest.
LORD BROCKWAY: My Lords, does not the question which has been put from the other side of the House illustrate that this matter cannot be left either to individual nations or even to regions? Is it not now an international problem? Moreover, is it not a tragedy that men should be killing each other in the Yemen and Southern Arabia instead of uniting against this threat which may mean that more people will be killed by starvation than in their silly war?
LORD SHEPHERD: My Lords, when I said it was the responsibility of individual countries I hope I did not lead my noble friend to believe that they are left to get on with it on their own. In fact, the F.A.O. itself makes sizeable contributions to the various regional groupings; and we ourselves help through our own research. This matter is clearly one of international importance and the F.A.O. has it in mind. The 51st Session of the Council took special note of the position and made certain recommendations.

HIGHLANDS AND ISLANDS DEVELOPMENT BOARD STAFF
THE EARL OF CROMARTIE: 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 the number of civil servants now employed by the Highlands and Islands Development Board, and what has been the increase since the beginning of 1968.]
THE JOINT PARLIAMENTARY UNDER-SECRETARY OF STATE FOR SCOTLAND (LORD HUGHES): My Lords, the Board at present employs a permanent staff of 154 and a temporary and seasonal staff of 14. In January, 1968, it employed a permanent staff of 84 and a temporary staff of 5. Of its present staff 14 members are civil servants seconded by their Departments: this is an increase of 5 since January, 1968.
THE EARL OF CROMARTIE: My Lords, I thank the Minister for his full Answer, which will be of considerable interest to many in the Highlands and Islands. Would he not agree with me that there is a necessity to keep watch on any increases there may be, as there is a danger of the overlapping of functions, especially between the Board and the Scottish Tourist Board?
LORD HUGHES: My Lords, I can assure the House that there is no danger of the Highlands and Islands Development Board or any other of these bodies being able to get funds for staff very readily; but I think from his knowledge of the Highlands the noble Earl will agree that if there is any body which has been created during this century which has accomplished results in the Highlands it is the Highlands and Islands Development Board, and we ought not to put obstacles in its way. With regard to the reference to possible overlapping with the Scottish Tourist Board—and I presume the noble Earl's reference is to the proposed new Scottish Tourist Board—the exact relationship between the two bodies can be finally determined only when the new Tourist Board is appointed. This is a point which is already receiving consideration between my Department and
1202
the Highlands and Islands Development Board, and in due course it will be discussed with the new Tourist Board.
THE EARL OF CROMARTIE: My Lords, I should like to thank the noble Lord for that answer.
THE DUKE OF ATHOLL: My Lords, could the Minister consider publishing a table which would show where the increased staff are, because obviously there is a big difference between having an increase in the number of top staff and an increase in the number of secretaries? I am sure the noble Lord will agree with me that the important thing is not the number of bodies involved. Further, is the increase in numbers due to the fact that other areas bordering on the crofting counties are going to be sufficiently fortuate to be brought within the ambit of the Board?
LORD HUGHES: My Lords, I suggest to the noble Duke that if he will put down a Question on the subject of the increased staff I shall be glad to give him a full Answer.
THE DUKE OF ATHOLL: My Lords, would the noble Lord care to answer my second question?
LORD HUGHES: My Lords, I was so concerned about the first part of the question that I am afraid I did not notice what the second part was. Would the noble Duke care to repeat it?
THE DUKE OF ATHOLL: My Lords, is the increase in numbers perhaps due to the fact that other areas bordering on the crofting counties are going to be sufficiently fortunate to be brought within the ambit of the Board?
LORD HUGHES: My Lords, if the noble Duke likes to put that down as another Question I shall be glad to answer it.

COVENT GARDEN MARKET BILL
3.23 p.m.
Read 3ª, with the Amendments.
THE CHAIRMAN OF COMMITTEES (THE EARL OF LISTOWEL): My Lords, with the permission of the House, I should like to move the Amendments that are proposed to this Bill—namely,

1203
the Amendments to Clauses 3, 6 and 8—en bloc. These Amendments are all either drafting Amendments or are consequential upon Amendments which have already been made to the Bill. Therefore it might save the time of the House to take them en bloc. I beg to move.
Amendments moved—
Clause 3, page 3, lines 7 and 8, leave out "and this Act";
Clause 6, page 7, line 6, leave out "Prohibition" and insert "Penalisation";
Clause 6, page 9, line 1, leave out "the said";
Clause 6, line 2, leave out "the said";
Clause 8, page 10, line 13, leave out "insert" and substitute "there shall be inserted";
Clause 8, page 10, line 35, after "of" insert "the".
—(The Earl of Listowel.)
On Question, Amendments agreed to.
Bill passed, and returned to the Commons.

FOREMEN AND STAFF MUTUAL BENEFIT SOCIETY (APPLICATION OF RULES) ETC., BILL
Read 2ª, and committed to a Select Committee.

SHARING OF CHURCH BUILDINGS BILL [H.L.]
THE LORD BISHOP OF BIRMINGHAM: My Lords, the most reverend Primate, the Archbishop of Canterbury, who introduced this Bill and who has been responsible for it throughout its stages in this House, has asked me to express his apologies for being unable to move the Third Reading. Over a year ago he arranged to visit the Anglican dioceses in the West Indies at this time, and he had to leave to carry out this assignment after the Report stage of the Bill last week. The Archbishop has asked me to say how grateful he has been for the co-operation from all quarters of the House and to those who have spoken on behalf of the various Churches. I therefore move that the Bill be now read a third time.
Moved, That the Bill be now read 3ª.—(The Lord Bishop of Birmingham.)
On Question, Bill read 3ª, and passed, and sent to the Commons.

MINES AND QUARRIES (TIPS) BILL
3.26 p.m.
LORD BESWICK: My Lords, I have it in command from Her Majesty the Queen to acquaint the House that Her Majesty, having been informed of the purport of the Mines and Quarries (Tips) Bill, has consented to place Her interest, so far as it is concerned on behalf of the Crown, at the disposal of Parliament for the purposes of the Bill.
THE MINISTER OF STATE, HOME OFFICE (LORD STONHAM): My Lords, I beg to move that the Bill be now read a third time.
Moved, That the Bill be now read 3ª.—(Lord Stonham.)
On Question, Bill read 3ª, with the Amendments, and passed, and returned to the Commons.

AGRICULTURE (SPRING TRAPS) (SCOTLAND) BILL
3.28 p.m.
LORD HUGHES: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Lord Hughes.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD MERTHYR in the Chair.]
Clause 1 [Use of spring traps other than approved traps no longer to be authorized]:
On Question, Whether Clause 1 shall stand part of the Bill?
THE EARL OF DUNDEE: This clause removes the power which was possessed by the Secretary of State under Section 50 of the 1948 Act, enabling him to give various remissions or exemptions from the prohibition against the use of spring traps. It has been decided in another place to carry this clause in its present form and I do not wish to challenge that decision.
I have been concerned in many ways over the last forty years, perhaps not directly but indirectly, in endeavours which many of us have followed with interest in the hope that some kind of humane trap which would effectively

1205
enable Highland sheep farmers to keep down the number of predatory foxes in their area could be discovered. I am afraid the fact is that up to now all the inventions which have been produced by various people who have had them patented have been judged by those who use them to be more dangerous to the trapper than to the foxes; and while we all continue to hope that some less inhumane instrument will soon be discovered I feel bound to say that I doubt whether this clause is realistic. I do not propose to challenge it, for two reasons: first, I do not think it would be practicable to do so, and, secondly, nearly everyone has the strongest reluctance to say anything which might seem to encourage or approve of the use of these spring traps, which people who think they are necessary all regard as a most regrettable and distasteful necessity. But I feel bound to put it on record that so far as I can see this clause is not wholly realistic.
I think that by the time 1973 comes, which is the appointed day under this Bill, it is probable that either we shall have to reinstate the Secretary of State's power of exemption or we shall have to contemplate a situation in which the Highland sheep farmers in Scotland will be unable to protect their stock. Naturally the farmers are very concerned about this situation, and we all know that when people are concerned about something like this they often overstate their anxiety, but I do think that is probable.
THE DUKE OF ATHOLL: I apologise to the noble Lord that I was unable to be in my place on the Second Reading, but I read what he said with great interest, and I wonder whether this; would be a suitable opportunity for him to tell us the position with regard to otters. I should have thought there was no reason at all why the use of the gin-trap should not be banned on otters as from the passing of this Bill. It is generally thought now in Scotland that otters do little, if any, damage; that they are few in number and probably diminishing, and that the sooner their persecution by the gin-trap is stopped the better. I have one slight fear about this Bill and that is that in Clause 2 it says that it cannot come into operation within two years. Does this
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mean that the Secretary of State will not have the power for the next two years to remove the otter from the list of animals on which the gin-trap can be used?
LORD HUGHES: The noble Earl, Lord Dundee, in talking about Clause 1 and the position that presently exists, of course reiterates what has been in the minds of many people during all these years. It is now 11 years since the Secretary of State made the Order under which the use of the gin-trap was confined to foxes and otters, and I think it is fair to say that during all this time it has been regarded as a temporary use of a detestable device and one which everybody concerned hoped could be brought to an end at the earliest posible moment. I have heard no one suggesting that the gin-trap is a desirable method to use against any animal.
The argument is that we have not been able to get anything to put in its place which will accomplish the result. That is true. But the Government have been persuaded and are firmly of the view that if we do not take action at some time to put an end to the use of this trap, the temporary situation is likely to go on and on and on; because, to put no finer a point on it, those who use the gin-trap have no incentive themselves to take measures to find an alternative. The steps are left to the research organisations, the Agriculture Departments and people of an inventive turn of mind. By placing a definite period of four years on the use of this trap we have increased very considerably by one stroke those who have in fact a vested interest in finding a satisfactory alternative, because every farmer whose stock may be attacked has just as much interest in trying to find a solution to the problem as the man who might collect £2,000 in reward from inventing a satisfactory trap. We think therefore that this is a justification.
In fact the Government, even in your Lordships' House, were under criticism, and the criticism can be justified, for waiting for so long as four years before putting a final end to the use of this trap. We have had to work very hard at balancing the interests of those who wish to put an end to cruelty immediately and those who say that the farmer, faced with this time limit, must be given some reasonable time to do something about it.

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And the Government came to the conclusion that two years was likely to be the very minimum in which this could be accomplished and that four years should be set as the maximum.
When the noble Earl made the remark about the Government of the day in 1973 being faced with the possibility of having to reverse this measure I hope that that is not to be taken as an indication that if there were unfortunately to be a Government of another complexion in Scotland or the United Kingdom at that time it would be the intention of the Conservative Benches to seek to reverse this measure, because I think that would be very regrettable.
THE EARL OF DUNDEE: All I said was that I thought that in 1973 the Government might be faced with the alternative of reinstating the powers of the Secretary of State which are removed by this clause or of dealing with a situation in which the farmers were unable to protect their stock. Of course, I hope they may have invented some other means of doing so, but I think that the alternative is likely to be the case.
LORD HUGHES: Put on a hypothetical basis, I cannot object to it. I wanted to be quite clear that I was not getting an advance warning. On the question of otters, on Second Reading I was rather pleasantly surprised at the reaction, and I undertook that if the noble Earl, Lord Mansfield, or others tabled an Amendment to deal with this situation I would give it careful consideration. No such Amendment has been tabled; so there has been nothing for me to consider. There are great practical difficulties. To answer the noble Duke's question, under the Bill as it stands, if there is no Amendment, it would not be possible for the Secretary of State to stop the use of the gin-trap for otters in less than two years.
THE DUKE OF ATHOLL: Would the noble Lord consider co-operating with me in trying to find some suitable Amendment for the next stage? Although the gin-trap is not used much on otters, I think it would be a very bad blot on this particular piece of legislation if it had the effect of stopping the Secretary of State from putting otters on the list for two years.
LORD LEATHERLAND: I wish to digress from this particular discussion to raise another point, and I suppose to be in order I should say that I support the Motion, That the clause stand part. In one of his answers to the noble Duke, my noble friend said, "If in 1973 there were a Government in Scotland". We have had many leaks of official policy recently, and I was wondering whether it was an accidental slip of the tongue or whether he is formally officially indicating in your Lordships' House that by 1973 Scotland will have Home Rule.
LORD HUGHES: No; it was no inspired leak. I rather thought the noble Earl, Lord Dundee, in talking about what might happen in 1973, was getting into the field of pure hypothesis and I did not see any reason why I should not enter into a similar unlikely field.
LORD BURTON: I thought from what had been said on the Second Reading that it was going to be possible under present legislation to ban the use of the gin-trap on the otter, otherwise I would have put down an Amendment for to-day. Do I take it from what the noble Lord has said that this is not now possible?
THE EARL OF DUNDEE: The case of otters is entirely different from that of foxes. Farmers may be anxious about damage to their flocks from foxes in 1973, but otters do not do any harm to sheep; and surely, in view of the general opinion of naturalists now, it would be reasonable to prohibit the use of spring traps for otters in less than two years?
LORD HUGHES: It is perfectly true, so far as I know, that otters do not do any harm to sheep, but there are a number of people, particularly in fisheries organisations, who suspect that they do a certain amount of harm to salmon. Even the very guarded remarks I made on Second Reading about being willing to consider an Amendment if the noble Earl, Lord Mansfield, put one down, brought an almost immediate reaction from the people concerned that they had agreed, with some reluctance, to what was in the Bill only because a certain amount of time was to elapse before it came into effect, and that if

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any such Amendment either to bring the ban forward or to make it operative immediately were brought in, it would be a grave breach of faith on the part of the Government. So in this matter also there is no unanimity. We are in danger of mixing up two things here. We are seeking to prohibit the use of the gin trap because it is a cruel method of killing animals, and the reaction on Second Reading of at least some noble Lords concerned was really on the question of the desirability of preserving otters, not of finding an alternative way of killing them. Listening to some noble Lords, one would have almost thought that the Bill was for the conservation of otters. That may be a very desirable thing, but it is not one of the functions that we are seeking to cover in this Bill.
LORD BURTON: Surely under the 1948 Act it was possible to abolish the trap for any specific animal or at any specific place, if there was an alternative. If the number of otters is reducing, surely it proves that there are quite adequate methods, because I am sure the gin trap is not used very extensively on otters at the moment. Can you, therefore, not ban it under the 1948 Act?
LORD HUGHES: It is the case at the present time that if a suitable trap can be devised the Secretary of State has power to ban the use of the gin trap, either for otters or for foxes, right away, but he cannot ban it under existing legislation unless he is satisfied that there is a suitable alternative. So what we are seeking to do in this Bill is to give the Secretary of State power as from 1973, or, alternatively, from 1971, but not earlier than that, to ban it, even though a suitable alternative humane trap has not been found.
LORD BURTON: Surely the point is that there is a suitable alternative. It does not say a "suitable alternative trap". There is already a suitable alternative, and therefore I should have thought you would be able to ban it under the existing legislation.
LORD HUGHES: No, it is a suitable alternative humane trap which the Secretary of State is obliged to find.
THE DUKE OF ATHOLL: Could the noble Lord say specifically which organisation it was which felt, with reference
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to the otters, that there should be at least two years before the gin trap was banned? Because I have teen led to understand that modern thinking is that in the fisheries otters do almost as much good as harm by the number of eels and other coarse fish they take, although it must be admitted that they do take some salmon parr, too.
LORD HUGHES: I am very sorry; offhand I could not state the name of the organisation. I could state the name of the lawyer in Aberdeen who is its Secretary, but I do not know that that would be helpful to your Lordships other than to those who know Aberdeen lawyers.
Clause 1 agreed to.
LORD BURTON LORD BURTON moved the following Amendment:
After Clause 1, insert the following new clause:
Use of spring traps under license
".—(1)Notwithstanding anything in section 50 of the Agriculture (Scotland) Act 1948 after the appointed day a licence may be granted to any person by the Secretary of State authorising that person for the purpose of killing or taking animals to use spring trays other than approved traps subject to compliance with any conditions specified in the licence.
(2) A licence granted under this section may be revoked at any time.
(3) Any person who contravenes or fails to comply with any conditions imposed on the grant of a licence under this section shall be guilty of an offence and shall be liable on summary conviction to a fine not exceeding £20."
The noble Lord said: Knowing as I do the intense desire of many of your Lordships to see the end of the gin trap altogether, I have introduced this Amendment only after very much consideration. As things stand at the moment, as the Secretary of State said only a matter of three minutes ago, there would be serious loss if no alternative were found to the gin trap and it was banned completely. The noble Lord said that he wished to do away with cruelty, but, after all, if we are going to have an excess of foxes we are going to have a great deal of cruelty to lambs. I do not know if this point has been considered. You try and do away with cruelty on the one hand, and you will introduce increased cruelty on the other.
There is no reason why the trap should not be banned in a great deal of Scotland. It would be quite reasonable to ban it at

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the present time in any place where it is possible to use a snare, but there are large tracts of Scotland where the snare is not feasible. There are areas where there is no alternative, and serious difficulty will occur in those areas if these traps are banned. I discussed the position during the last fortnight at branch and area meetings of the N.F.U., and they were all unanimous that an Amendment on these lines was essential. I gather that N.F.U. headquarters have also backed it and sent a circular to certain noble Lords.
The Government have expressed their desire for the complete abolition of the trap. If your Lordships approve of my Amendment it still need not result in the trap being used again after 1973, because if the Government really got down to finding an alternative the gin could be banned straight away. Certain noble Lords suggested that the amount of the prize should be increased, and some noble Lords suggested that the universities should be engaged in this work. It is most disappointing this afternoon to hear the noble Lord say that the prize still stays at £2,000.
The Amendment would restrict the traps to very limited areas, even if no alternative is found, and one hopes it will be found by 1973. The Amendment would permit the Secretary of State to stipulate that the trap could be used only for foxes, and, further, he could stipulate exactly how it was to be used. For instance, he would probably stipulate that it could be used only in pools, on what is called the "island set" although I think it is really on a peninsula, where the fox would fall into the water and be drowned. To my mind it would be causing more cruelty by not permitting the use of the trap in this very limited sense unless an alternative is found. Therefore I have much pleasure in moving this Amendment, because I am certain that your Lordships would not wish to involve the Highland sheep farmers and others in a great deal of excessive loss.
LORD HUGHES: I have naturally listened with interest to the arguments advanced by the noble Lord, Lord Burton, in moving this Amendment, but I must tell your Lordships right away that the new clause would be fundamentally at variance with the principle
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on which the Bill is based. That principle is quite simply stated. It is that the gin is too cruel a device to be tolerated beyond the minimum reasonable period of notice to those who at present rely on this means of control. The noble Lord, Lord Burton, said as a sort of balancing factor against the cruelty of the gin trap against the fox that we did not consider the cruelty that would be inflicted on lambs. I do not think there can be any comparison between the two. The lamb which is attacked by a fox meets an instant death.
SEVERAL NOBLE LORDS: No.
LORD HUGHES: Let me put it another way. There is no question, when a lamb is attacked by a fox, of its lying for anything up to four days dying slowly because there is nobody to come to its assistance. If the gin trap could be guaranteed in all circumstances to kill as quickly as the fox generally kills, it would perhaps be an argument for the toleration of its use. But the fact is that a fox may be a long time in dying and spend the whole of that time in the most intolerable agony which nobody could justify if this happened in front of witnesses. Those which may get away from the trap by gnawing off the trapped limb, may then die a slow death because, owing to their physical disability, they will not be able to get their natural food. For these reasons so many people have clamoured over the years for the removal of the trap. There is a definite difference between the two problems.
The noble Lord envisages the issue of licences to use the gin trap in a limited way. My advice is that what would be involved would be the use of the gin, on a considerable scale, in those areas of Scotland where control by other means is difficult. The noble Lord's Amendment does not mean that a few dozen Highland sheep farmers would be allowed to use the gin trap. It means that in practice the gin trap would continue to be permissible as an instrument in large areas of Scotland. Frankly, we consider that the only way to stop this cruelty is to go ahead in the way suggested in the Bill.
Apart from the objection of principle, there are two sound practical reasons why the new clause is not acceptable. I have drawn attention to the hopes which were repeatedly expressed that the four-year

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waiting period before the appointed day will be used by all concerned to make preparations for control by alternative means. Does the noble Lord, Lord Burton, really think that if the new clause were accepted, those at present using gin traps would apply their minds vigorously to the problem of devising alternative measures? Would the fox club with which he himself is closely concerned do this? It may be that they would, but I must express doubts about this being the likely outcome of getting a licence to continue the use of the trap. It is more likely that, if a licensing system were introduced, there would be a general presumption that the majority of those at present using gins, particularly in the Highland area, would be allowed to continue doing so. That is not what the Government want. Our intention is to tell the fanning community clearly that gin traps are on the way out; and that with every encouragement from the Government they must make preparations for control by other means. I am sure your Lordships will agree that after waiting some fifteen years from the passing of the Pests Act 1954, and eleven years after the making of the Order, for a decision on this issue, the time has come for the Government to make a clear and unequivocal decision.
There is, finally, the point that illegal use of the gin is very much more likely if its use is still permissible in some circumstances. We have already evidence of this in the relatively frequent reports of the illegal use of gin traps for the purpose of taking birds and other creatures. Under the Bill as it stands it will from the appointed day be an offence to use, or knowingly permit the use of, a gin trap, or to possess or sell a gin trap with a view to unlawful use. If a gin trap is discovered set by any person so as to take any creature, there will be evidence that an offence has been committed. Moreover, when the appointed day arrives there will he some incentive for those possessing gins to get rid of them; or at least there will be no incentive to keep stocks readily available and in good working order. I ask your Lordships to contrast that situation with the situation which would be created if the new clause were accepted. There would still be a demand for these cruel instruments. Supplies would be readily available; it would be lawful to sell them.
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Enforcement of the law would be difficult, since any licensee using the trap for illegal purposes would be able to claim that this was not his intention. He could say that he had not set it to catch an eagle, but to catch a fox, and that it was unfortunate that the other animal or bird got into the trap.
In all these circumstances, we have come to the conclusion that the only way to put an end to the illegal use is to put an end to the legal use. The one thing which legal use and illegal use have in common is that the gin trap is a despicably cruel instrument which Scotland, through economic circumstances, has permitted to be used for ten years longer than has been the case in England and Wales. I refuse to accept that it is beyond the wit of the Scottish farmer, with another four years' leeway, to accomplish what has been accomplished by those even in the difficult areas of England and Wales. Those areas have managed for ten years to do without the pin trap. What they managed to do in 1959, Scotland should at least manage to do by 1973.
3.56 p.m.
LORD BURTON: The noble Lord, Lord Hughes, has by his speech illustrated some of the fallacies under which the Government are working. He stated that he thought lambs would be killed quickly. I have with me a letter from a shepherd, which was written as a result of our Second Reading debate. He says in his letter that he has had very many lambs still alive after being savaged by foxes. He goes on to say that there is clear evidence of lambs having had their legs chewed off and virtually having been skinned alive; and that it is a pity that photographs of wounded foxes could not have been backed up with pictures of these lambs. He goes on:
"It is perhaps possible to imagine the feelings of a shepherd when he finds a lamb in this state, and the feelings of the shepherd's wife when she has to try to doctor the poor little beast. The principle of reduction of cruelty whenever possible is inescapably right …".
This makes quite clear the position with regard to lambs. Under this Amendment the trap would be used only where it was essential.
In his reply the noble Lord, Lord Hughes, said that this use of the trap under licence would apply in large areas

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of Scotland. At one moment he says, "We are going to ban it", and at the next he says that it is essential. The position is that the Secretary of State would issue a licence only where it was essential to use the gin trap. And the noble Lord says that this would relate to large areas of Scotland. He further said that the trap would have been banned long ago in Scotland had it not been for economic considerations. He now says that the Government are going to cause economic difficulties, not only in the Highlands but in large parts of Scotland.
LORD HUGHES: The noble Lord is entitled to a good deal of licence, but he cannot be allowed to get away with misrepresentation of this kind. I did not say anything of the sort. In the first instance I withdrew the remark that the lamb never had a lingering death. I substituted for that remark that I accepted that this could be the case, but I pointed out that the animal caught in the gin trap always had a cruel death. There is no comparison on that basis.
On the economics of the matter, I said that over the years the Government had accepted that the economic situation required them to continue to allow this dispensation, overlooking the cruelty aspect. The Government have now accepted that the community in Scotland must put itself on the same basis as that in England and Wales. We are giving it four years in which to find a way to deal with the situation. We are giving the people concerned a very strong vested interest in allying themselves with attempts to get a solution. That is a very different thing from saying that we now accept that we are ignoring the economics of the matter.
It is said that at one moment I say this does not involve much, and that I then say there will be large areas of Scotland involved. But the point is that when Governments are dealing with matters like the issue of licences they cannot deal with them on the same basis as an individual might do, where you give someone a licence because you like the look of his face, but do not give a licence to a person whose face you do not like: you have to give licences on the same sort of basis. If the Amendment means anything at all it is that
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those people who, in the absence of a humane trap, could show that in their particular case it was essential that they should be allowed to use a gin, should therefore get a licence for it. We should thereby be removing the encouragement to find an alternative, and almost everybody, over large areas, would be able to make as good a case as the next person. Licences either have to be issued on a wholesale scale, almost repeating the existing position, or should not be issued at all. We prefer that they should not be issued at all, and the straightforward method is to do what is in the Bill; that is, to make them illegal.
4.2 p.m.
LORD FERRIER: I apologise for having been at a meeting and not having heard the noble Lord, Lord Burton, speak. I appreciate that I speak with some risk, but I am an extremely tenderhearted and sensitive animal lover who lives in the country and I cannot forget what the noble Earl, Lord Haddington, said about the fox that had a gin-trap on its leg. I have seen a fox which has been blinded by being shot at at long-range with small shot, which has been wandering about until it was destroyed. Also, of course, snares still have their brutal effects on animals.
What makes it right for me to speak is that as I read the Amendment, I thought the Government would have power to give the most limited number of licences, and only to skilled people who would not do wholesale trapping such as the noble Lord, Lord Hughes, described. I am one of those who agree that any fox caught in a gin-trap must inevitably have an end infinitely worse than being bowled over by a pack of hounds or being "chopped" in cover, but the economic side is a very serious aspect in country where gassing is impossible. I disagree with the noble Lord, Lord Burton, that there are large areas of Scotland concerned.
LORD BURTON: That is what the noble Lord, Lord Hughes, said.
LORD FERRIER: I missed that point owing to not being here earlier. I should have thought the only difficult areas were those with corries and rock dens, where gassing will not work. All sorts of animals have been mentioned, but I am a little surprised that we have not heard

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more about the otter. However, that is another matter. So far as this Amendment is concerned—and I imagine that the noble Lord, Lord Burton, will withdraw it, which will be a pity—I ask the noble Lord, Lord Hughes, to think again. I also ask him to think of another matter which I raised on Second Reading, and that is the point about the reward for an improved trap. It has been said that there will be four years in which to invent another trap, and yet I think the noble Lord told me that he thought a reward would be liable to tax. If he is sincere in his desire for an improved trap—and I am one of those who long for the day when there will be one—and if the amount of the reward has now been cut down from, I think, £5,000 to £2,000, I really believe that what is left should be tax-free in the hands of the recipient. It must be worth while for him to give time and trouble to the purchase of materials and to experimentation; and, as we all know, it is the experiments which fail which are the costly items in any invention. Will the noble Lord give that matter some thought before another stage?
VISCOUNT MASSEREENE AND FERRARD: I certainly cannot support this Amendment, but I will not repeat my Second Reading speech as I spoke at some length on this subject. I should like to take up the observation of my noble friend Lord Burton, who quoted a letter from his shepherd about foxes chewing the legs off lambs. I understood him to imply that those lambs were left alive. But if a fox attacks a lamb he usually kills it outright. The fox is a quick killer and lambs whose legs have been chewed are nearly always stillborn lambs, or are very weak lambs which have died within an hour or two of birth. I cannot believe that a fox—if, in fact, he attacks a strong lamb—will chew its legs off without first killing it.
On the question of otters—and I quite agree that they are not covered by this Amendment—may I ask the noble Lord, Lord Hughes, whether he could use his great ingenuity and that of his Department who are behind him, to try to devise by Report stage an Amendment to enable the otter to be saved from being caught by gin-traps? I have found it impossible to devise such an Amendment, but the noble Lord might be able to think of one.
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If so, I sincerely hope that he will bring it forward on Report stage.
LORD MOWBRAY AND STOURTON: I thought the noble Lord, Lord Hughes, was slightly unfair to my noble friend Lord Burton, when he said that the whole country had to be covered and that there always were cases of cruelty involved. In his Amendment my noble friend took the trouble to include the words:
"subject to compliance with any conditions specified in the licence."
If we do not have an efficient and humane trap by 1973—and after ten years we still do not have one, so it is not beyond the bounds of possibility that we shall not have one in four years—it will surely be possible for the Secretary of State to limit the use of traps to certain counties, such as crofting counties.
As I pointed out on Second Reading, the island set, to which my noble friend Lord Burton referred, accounts for about half of the foxes killed in the crofting counties al the moment, and 99 per cent. of the time the foxes are drowned. So there is no long lingering death. It is a little unfair of the noble Lord, the Minister to say that there is always a long, lingering death, because than is not the case in the crofting counties. Under this Amendment, the Secretary of State would have power to limit the use of traps to one or two counties where the foxes cannot be kept down by other means, and if he wished he could specifically limit the use to the island set.
THE DUKE OF ATHOLL: The noble Lord, Lord Hughes, is basing much of his argument on the respective cruelty which the gin commits to the fox and which the fox commits to the lamb, and saying that the former is much greater than the latter. I hope I am not misquoting him. But he appears to have forgotten that very often the fox commits this cruelty not to one lamb, but to quite an appreciable number of lambs before it is caught. I strongly suspect that if one totted up the amount of cruelty committed to all the lambs by one fox it might easily amount in aggregate to as much as, if not more than, the gin commits to the fox. Therefore, I should have thought that this argument was, to put it mildly, somewhat fallacious.
LORD BURTON: I apologise for rising again, but I had not in fact finished; I merely sat down for an interruption. My noble friend Lord Mowbray has answered the question about all the foxes dying a cruel, lingering death. This is just another example of the mis-thinking of the Government on this matter. This again, I am afraid, is where we in the countryside suffer from urban thinking, as opposed to those of us who live and know what happens in the rural areas. My noble friend Lord Dundee said that it might be necessary to reintroduce the trap in 1973. This, I am sure, is not what any of your Lordships want. If my Amendment is accepted, although it might never have to be used, if it were necessary to use it then it would permit the trap only on a very limited scale, not on the scale which my noble friend suggested.
We keep coming back to the question: Why has it not been missed in England? I thought I answered this question on Second Reading. Practically all the areas in England which are not suitable for the snare are hunted over, and the hunting controls the foxes in England. In the Highlands of Scotland, you cannot go in a short distance from sea level up to 3.000 feet on a horse at a gallop. If you are going to do this, you have to be jolly fit and you have to use a sort of John Peel pattern. It may be that this is what we shall have to come to; but, equally, this may well be something which a good many people who are trying to abolish the gin trap will not like. Also on Second Reading, dealing with cruelty, I mentioned the old fox who was left with only his front teeth and who sucked the blood of the old ewes in killing them. This must be cruel. I am equally anxious, as most of your Lordships are, to see the end of the gin trap; but, equally, I must look at the other side. I must look at the economic position, and I must look at the cruelty which would otherwise take place. On Second Reading I also mentioned mange, which would be a very slow and lingering death for the fox. I am quite sure that your Lordships' Committee ought to accept my Amendment.
LORD HUGHES: I did not actually finish advising your Lordships not to accept the Amendment, although your Lordships may have gathered that I am
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against it. The noble Lord, Lord Mowbray, took up the suggestion made by Lord Massereene and Ferrard that I might be possessed of a certain amount of ingenuity. I can assure the noble Lord that it would be exceedingly difficult so to devise the issuing of licences that the issue could be confined to a comparatively few people, because if the noble Lord does not know it I can inform him that the ingenuity of the Highlander in finding reasons why anything which applies to anybody else can be equally applied to him will beat any Minister any day. So it would be impossible to restrict this. I have at least reached a point where the noble Lord, Lord Burton, agrees with me, if nodding his head means anything.
I am pretty certain that the noble Lord, Lord Burton, is going to withdraw the Amendment, but I am in a position to answer two points which were raised on the Question that Clause 1 stand part, and I think that perhaps it is desirable that your Lordships should have the information. The answer to the first point is that the organisation which wrote on the subject of immediate action against otters was the Salmon Net Fishing Association of Scotland. On the subject of the Secretary of State having power to ban the use of the trap immediately, he has the power to ban it immediately under the existing law if a suitable alternative is devised. That power will remain, because this Bill merely puts an end to the Secretary of State's power to keep on deferring it. It limits it to four years at the outside; and he cannot put an end to it in less than two years unless the existing law is being complied with.
There are two traps being investigated at the present time, and if it should turn out that the Humane Traps Panel decides that one of these is a suitable alternative to the gin, then under the existing law the Secretary of State has power to ban the use of the gin as soon as this other trap can be brought into operation. So there is the possibility that we might be able to deal with the situation before the four years are up. If that were the case, and if there was a satisfactory alternative, then I think everybody would be satisfied. I mention this point as showing the way in which the Government have acted. They are giving the maximum

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possible time to the farmers. At the same time, they are not depriving themselves of the power to act if a suitable alternative should present itself before the end of the four-year period. I hone, therefore, that in all these circumstances—although I have no doubt at all that the noble Lord, Lord Burton, has not been persuaded by what I have said—that he will accept that it would not be reasonable to press his Amendment.
Loan BURTON: I am in some difficulty, because I suspect that I should be heavily defeated here, and I am not sure that when I return North the Highlanders would not slit my throat if I had withdrawn the Amendment. I know they feel very strongly on this matter—and I do not know whether I could show my face at another N.F.U. meeting.
LORD HUGHES: I think the noble Lord could take the risk, although I must say that when he talks about the dangers to Highland lairds of cantering about after foxes at 3,000 feet, there are at least some people in Scotland who would have accepted that the possible death of a few Highland lairds fox-hunting was a reasonable price to pay for eliminating cruelty to the fox.
On Question, Amendment negatived.
Remaining clauses agreed to.
House resumed: Bill reported without amendment.

REPRESENTATION OF THE PEOPLE BILL
4.18 p.m.
Report received.
Clause 6 [Other Amendments as to proxy and postal voting]:
LORD BROOKE OF CUMNOR LORD BROOKE OF CUMNOR moved Amendment No. 1:
Page 5, line 23, at end insert—
("() In section 23(7) of the Representation of the People Act 1949, as amended by paragraph 7(2) of the Seventh Schedule to the Local Government Act 1958, the words 'rural district' shall be omitted.")
The noble Lord said: My Lords, I beg to move Amendment No. 1. Its drafting, I fear, inevitably fails to make crystal clear its real purpose, so I shall endeavour to explain that. The Representation
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of the People Act 1949 gave to invalids and certain other categories of people the right to vote by post at Parliamentary elections, and also at all kinds of local government elections except those for rural district councils and parish coup, ells. That means that people who are entitled under the law to vote by post can do so if they live in an urban district or a borough or a county borough; but if they happen to live in a rural district they cannot vote by post at rural district council elections. That has been the law since 1949. My Amendment suggests quite simply that the time has come to alter it.
Ten years after the 1949 Act was passed, the Local Government Act 1958 created a new form of local authority, called a rural borough, which has a mayor but otherwise only the power of a parish council. That Act excluded rural borough councils also from postal voting. When I first tabled my Amendment I got it wrong. I forgot the 1958 Act, which was silly of me, for I was responsible for putting it on the Statute Book. When I remembered, I revised the wording of my Amendment and I hope that it is right now. My intention is, if your Lordships will accept this Amendment, to legalise postal voting at elections for rural district councils but not at those foe parish councils or for rural borough councils which, as I have said, are mere like parish councils. I appreciate that there may not be the equipment to organise a postal voting system successfully for every parish council throughout the land, but I am sure that all the rural district councils could do it by now.
The precise reason for the exclusion of rural district councils in 1949 is somewhat obscure, if one reads the debates, but it seems as if the Labour Government of that time were doubtful whether the staff of rural district councils could manage the machinery of postal voting. At that time postal voting, even at ordinary Parliamentary elections was a new thing; it was quite untried. But now we have had twenty years' experience of it, and everyone concerned with every sort of election, down to urban district council elections, knows how the postal vote should be worked and administered. I am quite sure that the clerks of rural district councils could deal with it equally well, and therefore

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I am urging that the discrimination between urban district councils and rural district councils should now end.
My Lords, there is an additional reason. Rural districts mostly extend over much larger areas than urban districts, and distances to a polling station can be correspondingly much greater. So it may be that it is that more difficult for elderly people, if they are not too fit, to get to the polling station. Why should they be disfranchised just because they live in a rural district? I gave notice on Second Reading that I should like to see the Bill amended in this important respect. In winding up that debate the noble Lord, Lord Stonham, mentioned various objections to making this change. Honestly, I do not believe that these objections are valid, and I greatly hope that the Government will have second thoughts and will now grant this act of justice to people in rural districts: people who for one lawful reason or another cannot get to the polling station to cast their votes for whichever candidate they want to represent them on the council. I am sure it is of common interest to all your Lordships that the poll at local government elections should be as high as possible. I am calling attention here to certain classes of people for whom at present it is made almost impossible to cast their votes. I think there is an extremely strong case for justice for those people. I beg to move.
THE EARL OF GAINSBOROUGH: My Lords, I should like greatly to support the noble Lord, Lord Brooke, in his Amendment. I know that there are difficulties, rather serious difficulties, and that this argument has gone on for a good many years. But there are many people who think that justice should be done by giving the postal vote to those living in rural districts. I know that there are a number of technical difficulties, which I have no doubt the noble Lord, Lord Stonham, will tell us about in a few minutes' time, but I hope that this matter be given further thought, even if it cannot be dealt with at this particular moment. There is no doubt that conditions have changed in country areas and that the old idea that postal voting was not necessary, because people had every opportunity of voting without postal voting, does not apply to-day—as the noble
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Lord, Lord Brooke, has pointed out. I hope that the Government will be able to give this favourable consideration and that the noble Lord, Lord Stonham, may consider wearing his hat as Vice-President of the R.D.C.A. for a few minutes, even though he may have to take it off again very shortly afterwards.
LORD STONHAM: My Lords, in moving his Amendment the noble Lord, Lord Brooke, said that the drafting failed to make the purpose of his Amendment clear. That may be so, because the Amendment refers to sections of the 1949 Act; but I would assure him at once that, purely as a matter of drafting, it is immaculate. There will be no problems arising therefrom. As the noble Lord said, its object is to provide for postal voting at rural district council elections, which is excluded as the Act stands at present. The noble Lord, Lord Brooke, proposes to achieve his object by removing the elections of rural district councillors from the exceptions named in Section 23(7) of the 1949 Act. But by virtue of Section 23(3) the Amendment would also have the effect of making it possible for qualified civilians to vote by proxy at those elections, quite apart from having a postal vote.
There was no postal voting at any local government elections in this country before 1948. In 1946 the Oliver Committee on Electoral Registration recommended:
"That so far as practicable provision should be made for postal voting at local government elections by all the classes of civilians who are entitled to vote at parliamentary elections, with the exception of persons who no longer reside at the address for which they are registered."
As the noble Lord, Lord Brooke, mentioned, in 1948 the then Government, in deciding to provide votes for electors at local authority elections, decided against providing them at elections for rural district councillors. The noble Lord said that their reasons for so deciding were not very clear: but in fact the decision was taken on practical grounds. It was then considered desirable, on account both of likely administrative difficulties in some areas and of expenses to local authorities, to keep the procedure at these elections as simple as possible. It was thought that postal voting at those elections would add an administrative complication out of all proportion to the needs of the

1225
case and a heavy burden on the staffs of authorities which were in any case, in the main, small authorities with small staffs.
But the Rural District Councils Association, of whom the noble Earl is President, and on whose shoulders most of the work would fall, are now wholly in favour of the introduction of postal voting at rural district council elections. They told us in the Home Office, in a recent letter:
"Since rural and parish elections are conducted together it would seem sensible to extend postal voting to both of them."
But they added:
"On the other hand this Association's principal concern is of course with rural district council elections and if it were for any reason found impracticable to extend voting as widely as to include parish councils it would still he this Association's wish that it should extend to rural district council elections."
The noble Lord, Lord Brooke, made a very valid point about travelling in rural districts where, generally speaking, voters have to travel greater distances to record their votes than people in urban areas do. Therefore, by any computation, people living in rural areas have as much, and probably more, need for the right of the postal vote than people living in urban areas. Since those who do the extra work are also in favour, the Government are convinced that this is an improvement which the electorate will welcome and that we should make it. Therefore, I would advise your Lordships to accept the Amendment.
LORD BROOKE OF CUMNOR: My Lords, I am deeply grateful to the noble Lord, Lord Stonham, for what he has said. I appreciate that he must have had to go into the matter carefully to satisfy himself that the objections, which had seemed to be cogent over the past twenty years, were no longer so pressing as they were. I agree with him that this will be a substantial improvement for a large number of people who for one reason or another would not be able to reach a polling station in person but would be entitled by the general law to cast their votes by post. I express my gratitude to him. I should also like to put on record that here is a case where your Lordships' House, the non-elected Chamber, is able to be instrumental in bring about a material improvement in the system of democratic election for the country.
On Question, Amendment agreed to.
Clause 8 [Limit on, and declaration and publication of, election expenses]:
4.33 p.m.
LORD STONHAM LORD STONHAM moved Amendment No. 2:
Page 7, line 10, leave out ("doubled") and insert ("twice or, if there has been a previous increase under this subsection, three times what it would have been but for any increase under this subsection;").
The noble Lord said: My Lords, I beg to move Amendment No. 2 and with this Amendment, I should like to discuss Amendment No. 3. Clause 8, as amended in Committee, provides for the expenses of the surviving candidates at an election which has been countermanded or abandoned, on the death of a candidate, under Clause 13. The further Amendments are necessary to make it clear that in the event of a second death of a candidate the permitted expenses of the surviving candidates would not again be doubled, so as to entitle them to four times the amount permitted in the case of a poll held in the ordinary way, but would be increased to three times the normal amount, which is the right figure.
Amendment No. 2 operates on subsection (2) of Clause 8, which deals with candidates' expenses. Amendment No. 3 operates on subsection (3). This prescribes the maximum amount of election expenses at ward elections in the City of London and, as amended in Committee, applies to those elections the provision made by subsection (2) for additional expenses for surviving candidates at a further election.
On Question, Amendment agreed to.
LORD STONHAM: My Lords, I beg to move Amendment No. 3.
Amendment moved—
Page 7, line 19, leave out ("doubling") and insert ("increasing").—(Lord Stonham.)
On Question, Amendment agreed to.
Clause 19 [Timing of elections, and of steps at elections]:
LORD STONHAM LORD STONHAM moved Amendment No. 4:
Page 15, line 24, at end insert:—
("() In relation to the period within which any local government election is to EH; held, and in relation to the day of election at any local government election, section 295 of the Local Government Act 1933 shall haw effect as if the days mentioned in section 295(1)

1227
included any day of the Christmas break, the Easter break or a bank holiday break within the meaning of rule 2 of the local elections rules as amended by subsection (3) above; and in section 295(2) (under which, if an election is postponed, the day on which it is held is to be treated as the day of election for all purposes of that Act) the reference to the purposes of that Act shall include the purposes of the Representation of the People Acts.
This subsection shall apply to elections of elective auditors as it applies to local government elections.")
The noble Lord said: My Lords, I beg to move Amendment No. 4. This is a technical Amendment, required to bring Section 295 of the Local Government Act 1933 into line with the Representation of the People Acts 1948 and 1949 as amended by Clause 19 of the Representation of the People Bill. Section 295 of the Act of 1933 deals with computation of time for the purposes of that Act, including local government elections. The provisions of the Representation of the People Acts 1948 and 1949 operated on by Clause 19 of the Bill also deal with computation of time for the purposes of elections, including local government elections. As a result of the amendments made by Clause 19, Section 295 is now in conflict with the relevant provisions of the Representation of the People Acts 1948 and 1949. This Amendment will resolve that conflict.
In view of the earlier discussion we had on gin traps, I should say that the Amendment does not, and need not, apply to Scotland. There is no conflict between the Local Government (Scotland) Act 1947, Section 366, and the Scottish Local Elections Rules, which appear as Schedule 3 to the Representation of the People Act 1949 and which are not affected by Clause 19 of the Bill.
On Question, Amendment agreed to.
Clause 22 [Summary prosecutions of offences at local elections]:
LORD STONHAM LORD STONHAM moved Amendment No. 5:
Page 16, line 14, at beginning insert—
("(1) In section 155 of the Representation of the People Act 1949 (which, in relation to parliamentary elections, makes provision as to the prosecution of offences committed outside the United Kingdom by British subjects or citizens of the Republic of Ireland) in subsection (1) the words 'so far as it relates to parliamentary elections,' shall be omitted.
(2)")
The noble Lord said: My Lords, I beg to move Amendment No. 5. The purpose of this Amendment is to extend to local government elections in the United Kingdom the provisions in Section 155 of the Representation of the People Act 1949 about prosecutions for electoral offences committed outside the United Kingdom. Hitherto the Bill has provided, in paragraph 20 of Schedule 2, for Section 155 to be extended to offences at local government elections in relation only to broadcasts from outside the United Kingdom. Such broadcasts are, by Section 80 of the Representation of the People Act 1949, illegal ill respect of Parliamentary elections, but Clause 9(4) of the Bill extends Section 80 of the 1949 Act so as to make it apply to broadcasts from outside the United Kingdom relating to local government elections. It has been thought advisable to generalise the application of Section 155 of the 1949 Act to all offences at local government elections, rather than make specific mention only of offences against Section 80.
On Question, Amendment agreed to.
Schedule 2 [Consequential and supplementary amendments of Representation of the People Act 1949]:
LORD STONHAM LORD STONHAM moved Amendment No. 6:
Page 27, line 3, at end insert:
("(2) In section 8(2) proviso there shall be omitted paragraphs (a) and (b) (which make provision against a person being registered as a local government elector more than once in any area or being registered as a non-resident if entitled to be registered as a resident).").
The noble Lord said: My Lords, I beg to move Amendment No. 6. This is a largely technical Amendment, the purpose of which is to remove paragraphs (a) and (b) of the proviso to Section 8(2) of the Representation of the people Act 1949. With the abolition of the nonresident franchise and the bringing of the local government franchise (Peers apart) into line with the Parliamentary franchise, these paragraphs are no longer required or, as regards paragraph (a) in particular, workable.
On Question, Amendment agreed to.
LORD STONHAM: My Lords, this Amendment is consequential on Amendment No. 5, which we have just approved. I beg to move.
Amendment moved—
Page 31, leave out lines 28 to 34.—(Lord Stonham.)
On Question, Amendment agreed to.
Schedule 3 [Repeals]:
LORD STONHAM: My Lords, I beg to move Amendment No. 8. This is a purely drafting Amendment, which corrects a clerical error.
Amendment moved—
Page 38, line 23, column 3, leave out ("paragraph 2") and insert ("sub-paragraph (2)").—(Lord Stonham.)
On Question, Amendment agreed to.
LORD STONHAM LORD STONHAM moved Amendment No. 9:
Page 38, line 46, column 3, leave out from ("proviso") to second ("and") in line 48, and insert ("paragraphs (a) and (b)").
The noble Lord said: My Lords, I beg to move Amendment No. 9, and with your Lordships' permission I should like to include in this Amendments Nos. 10 and 11. These three Amendments are additions to the repeals Schedule of the Bill, and they are consequential on the Amendment to page 27, line 3 of Schedule 2. I beg to move.
On Question, Amendment agreed to.
Amendment moved—
Page 39, line 24, column 3, at end insert ("subsection (2)(d),").—(Lord Stonham.)
On Question, Amendment agreed to.
Amendment moved—
Page 39, line 29, column 3, at end insert ("and the following words").—(Lord Stonham.)
On Question, Amendment agreed to.
Schedule 4 [Insertions authorised in Representation of the People Act 1949 in revised edition of Statutes]:
LORD STONHAM LORD STONHAM moved Amendment No. 12:
Page 41, line 49, at end insert ("and, in the Scottish local elections rules, substituting for the word constituency' the words 'electoral area'")
The noble Lord said: My Lords, lines 45 to 49 on page 41 of the Bill provide that, in any revised edition of the Statutes published by authority, Clause 6(5) is to be inserted as Rule 4(1A) in the Scottish Local Elections Rules (Representation of the People Act 1949,
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Schedule 3) with the omission of the words "at parliamentary elections". However, Clause 6(5) also contains the word "constituency", and in inserting the provision of the Statutes it would be necessary for this to read "electoral area". That is the purpose of this Amendment. I beg to move.
On Question, Amendment agreed to.

PENSIONS (INCREASE) BILL
4.43 p.m.
LORD SHACKLETON: My Lords, I rise to move the Second Reading of this Bill. This is another in a series of measures which have been introduced from time to time to relieve the burden on public service pensioners and their dependants from rises in the cost of living. It is the seventh major measure of its kind since the war, and much the most substantial both in terms of cost and of numbers covered. When account is taken of retired members of the Armed Forces, who will receive corresponding increases by Instruments issued under the Royal Prerogative, the total cost will be some £34 million a year. This may be compared with £25 million for the 1965 Act so that, when full allowance has been made for the increase in the Index of Retail Prices since that Act came into effect—a matter of some 13 per cent.—the new Bill still represents a substantial increase in real terms in the cost of public service pensions.
The growing numbers of public service pensioners have meant that there is also a substantial increase in the numbers covered. The 1965 Act affected about 710,000 persons. The present Bill and associated Royal Warrants will bring increases to over 786,000 pensioners, including 260,000 from the Civil Service, 141,000 from local government, 98,000 teachers, 63,000 from the National Health Service, 63,000 from the police and fire services, 26,000 from the former India, Pakistan, Burma and other overseas services, and 6,000 from a large number of other public offices; and, in addition, 130,000 from the Armed Forces. The field covered is much the same as before, with a few minor extensions of which perhaps the most important is the inclusion within the scope of pension supplements provided under Regulations made by the Minister of Overseas Development

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of former overseas service officers who on retiring remained resident in the territory in which they were serving. Until 1965 these pensioners could qualify for supplements only if they were living in the United Kingdom. The 1965 Act extended eligibility to those resident in a third country and we believe that it is now right—and I am sure your Lordships will agree—to take the final logical step of removing the residential qualification altogether.
The main provisions of the Bill are set out in Clause 1 and Schedules 1 and 2. The increases to be provided are set out in full in Part 1V of Schedule 1. Your Lordships will see that they follow a scale descending from 18 per cent. on all pensions which began not later than July 1, 1955, to 2 per cent. on pensions beginning in the year ended July 1, 1967. This follows the pattern of previous Acts, with two important differences. First, the maximum increase has been set at 18 per cent., as compared with 16 per cent. in the 1965 Act, and 12 per cent. with a flat rate addition not exceeding £20 for the over 70s in the 1962 Act. Secondly, the scale, or "escalator" as it is commonly called, falls by 1 per cent. a year from 18 per cent. to 10 per cent. and then by 2 per cent., whereas in previous Acts the annual movement has been 2 per cent., throughout.
The purpose of the new escalator is to enable us to give the largest possible increase to the pensions of longest standing. This was the wish of the pensioners themselves, and while some understandable regret has been expressed that we have not found it possible to give more substantial increases (a point to which I will revert later), the policy of concentrating as much as possible of the available resources on the oldest pensioners has been generally welcomed. The earlier Acts have done much to protect the smaller pensions of longest standing against rises in the cost of living. Nevertheless, while there are inevitably irregularities in the pattern over so wide a field as the public services, and some examples can be found of pensions of long standing that have already overtaken those of more recent date, it remains generally true that the oldest have fared the worst.
Perhaps I may give some examples which show that the Bill will bring substantial
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benefits to these people. A clerical officer who retired at the end of 1948 will have had his pension increased when the Bill takes effect by 123 per cent. as compared with an increase in the cost of living of about 114 per cent. For the postman, the increase will be 139 per cent., as compared with the 114 per cent. Turning to a different field, a male graduate teacher who retired at the end of 1950 will receive an increase of about 104 per cent. in his pension as compared with a rise of 100 per cent. in the cost of living. I must admit, though, that the position is still rather less satisfactory at higher levels. The assistant secretary who retired at the end of 1950 will have had his pension increased by no more than 77 per cent. but the Bill will nevertheless give him an additional £247 a year.
It may be objected that, while the increases for the oldest pensioners are substantial, and rightly so, those who have retired more recently are receiving inadequate compensation for the rise in the cost of living in the last few years. I do not deny that there is something in this point, but I believe that its weight can be over-emphasised. Certainly, if resources were unlimited, the argument that no one should receive less than full compensation for the rise in the cost of living would have few opponents. But the resources are not unlimited and we are compelled to consider carefully what our priorities should be.
This must mean looking at the pensioner's total position. It is fair to have regard to the fact that almost all of those who have retired in recent years also qualify for the National Insurance pension when they reach the prescribed age. With this in mind, let us look at the position of the man who retired at the end of 1964. Here, one might think, is a hard case. He retired a little too late to qualify for any increase under the 1965 Act and he will be eligible for no more than 6 per cent. under the present Bill. And since he retired the cost of living has gone up by 18 per cent. But if he were a clerical officer, his total pension income when the Bill takes effect, taking into account the National Insurance retirement pension at the married rate, will be 76 per cent., over three-quarters, of the current pay for the grade—or 63 per cent. at the single rate of National Insurance pension—and he will

1233
stand to benefit from the review in the National Insurance pension rates which is to take place later this year. The pension income of a man retiring from the Administrative and Professional Grade V in local government service at the end of 1964 will be 63 per cent. of current pay (or 55 per cent. if the single rate of National Insurance pension is assumed), and for the principal in the Civil Service, the figures are 54 per cent. and 50 per cent. respectively. None of these figures takes into account the lump sum payable on retirement. I think we can agree that these are still substantial pensions by any standard, as compared particularly, for the most part, with pensions outside. Of course, many people in fact have no occupational pension at all. While the Bill admittedly falls well short of providing these people with full compensation for increases in the cost of living since they retired, I do not think that it can be said that they are being treated at all harshly.
For similar reasons, we have felt it necessary to retain the concept of a cutoff date before which pensions must have begun if they are to qualify for any increase. Here again, I am well aware, as I am sure other noble Lords are, that the increase of 8 per cent. in the cost of living since the cut-off date of July 1, 1967, is by no means inconsiderable. But the fact remains that those who have retired within the last 18 months or so have pensions that are much closer to current levels than the great majority of the older pensioners and when account is taken of the National Insurance pension their total pension income is in most cases a high fraction of the current pay of the grade from which they retired. It is also fair to point out that by no means all of those who have retired most recently will yet be old enough to qualify for the National Insurance pension. Nevertheless, the general argument remains a valid one and I do not think that it could seriously be suggested that larger increases in this whole context should be provided for those below the National Insurance retirement ages than for their former colleagues of more advanced years.
I have said that the Bill as it stands, together with the corresponding increases for the Armed Forces, will cost £34 million a year. This is a very heavy commitment for the Government and the
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country to shoulder at the present time, and it is the Government's judgment that this is as far as we can responsibly go now. Therefore, this can only mean that to do more for those most recently retired would frustrate our aim of giving really worthwhile increases to their fellows who are both older and less well off. I cannot think that that would be right. For the same reason, we have felt unable to accept proposals that the qualifying age for increases in pensions should be reduced from 60 to 55. This would add another £6 million to the cost. But I should make it clear that if a pensioner retired because of ill-health, or has become unfit for regular full-time work since retirement, increase is paid regardless of age. A widow receives increase from age 40; and a widow or woman pensioner with a dependant receives it regardless of age. A reduction of the general qualifying age from 60 to 55 would benefit many who are gainfully and fully employed and are much better able to maintain their living standards than are the older pensioners whose working days are over and who are wholly dependent on their pensions. Equally, I acknowledge that there are some who may have found it difficult to get employment. Here again we have to choose and make the best effort to get the right priorities, and I think we are justified in asking the younger men not to press their claims at the expense of those of more advanced years.
May I turn now to say a few words about the future. I must apologise to the House for taking up some time on this matter, but we are unlikely Ito have a Committee on the Bill; and it is an important Bill and we need to look also to the future. Your Lordships will have noted in the recent White Paper, National Superannuation and Social Insurance, the proposal that under the new State pension scheme the Government will be bound to review the main rates of pensions and other benefits in payment every two years and to provide increases which will at least compensate for any rise in price levels since the previous increase. We have always said that the development of any new system for increasing public service pensions must await completion of the Government's review of the social security system as a whole. Now that we have the White

1235
Paper, we intend to get down to a study of the whole question of pensions increase to see whether we cannot devise more satisfactory arrangements than the present system of ad hoc legislation. I am sure that your Lordships and others who have been concerned with this matter, either in some of the civilian Departments or, indeed, in the Service Departments, will understand that this is a fairly complicated task.
While I do not think it wise at the moment to attempt to prejudge the study in any way, I think it is widely recognised that there are major obstacles to parity; that is, to a system of automatic adjustment that keeps the pension up to the level of pensions currently being awarded for similar service. The cost, at the moment anyway, would be prohibitive: it would add £75 million to the cost of the Bill. I acknowledge, of course, that some of your Lordships support parity—and I well understand the force of, and am sympathetic to, the argument—but I think they are also aware of the difficulties. Nor do I think there is any simple solution to be found by adopting partial parity, but if your Lordships wish I will deal with that in my winding up speech.
There are also some fairly obvious objections to the straightforward adoption for public service pensions of a system parallel to that proposed in the White Paper; namely, that the new State pension scheme would be directly linked with the cost of living and this would mean that present relativities between public service pensions would be frozen. While much has been done through the escalators in successive Acts to bring the oldest pensions into a closer relationship with those of more recent date, I doubt whether anyone would want to argue that the position now reached is entirely satisfactory; that relativities need no further adjustment and that all that remains to be done is to adjust all pensions in step with the cost of living.
My Lords, I think I have said enough to demonstrate that there is no simple solution to this problem. We have to study it in very great depth indeed, and it would be misleading if I were to suggest that we could reach some conclusions within a short period of time. This is a job which must be done very well
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indeed, and it is more important that it should be done well than that it should be done quickly. We recognise, however, that there is general dissatisfaction with the present situation in which the Government, while keeping the position of these pensioners under continuous review, have accented no commitment to take any action at any specific time. This is again a matter that has been argued about before, and therefore I am glad to be able to repeat the undertaking given by my right honourable friend and my honourable friends in another place during the earlier stages of the Bill, that we shall review the change in the purchasing power of the pensions to which the Bill applies as at April 1, 1971, and if that purchasing power has been reduced by more than 4 per cent. the Government undertake to make a statement indicating the extent of the reduction in the purchasing power of the pensions and what action they propose to take.
I think it is right that we should accept this obligation and I am sure that noble Lords, like the noble Lord, Lord Bourne, who has been so interested and active in this field—and we all recognise the work he has done in relation to officers' pensions—will agree that we must accept the obligation to take the initiative in bringing the matter before Parliament after a reasonable period. We shall be able to take stock of the position if there is a considerable rise in the cost of living. There is no commitment to introduce further legislation in 1971 and I am sure that the Opposition, as they did in another place, will agree that it would be wrong to bind the Government in advance to that extent. But the pensioners now know that Parliament will have an opportunity to consider their position in two years' time without their having to mount the sort of campaign which I know they must have found rather distasteful in the past, and I think it will be generally agreed that this is a useful step forward.
In conclusion, may I say that the people who are covered by this Bill are people who have given long and honourable, and in some cases gallant service to their country during their working lives, who are now dependent on us to see that their standard of living in retirement is not severely eroded by rising prices as the

1237
years go by, and who deserve well of the Government and of Parliament. I do not say that the lot of the pensioners will be entirely satisfactory as from April 1 next, or that if we had unlimited resources at our disposal we should not prefer to go a good deal further. But given the situation as it is, and accepting that it is not just as we should like it to be, I believe that this Bill offers a major improvement in the position of many of our pensioners and, in particular, those who have suffered most from rising prices in the past, and I do not think that at this moment we could have proposed going further in present circumstances. Therefore I commend this Bill confidently to your Lordships. I beg to move.
Moved, That the Bill be now read 2ª.—(Lord Shackleton.)
5.5 p.m.
LORD BROOKE OF CUMNOR: My Lords, this is a subject of almost impenetrable complexity, as I discovered to my cost when it fell to me to carry through another place what became the Pensions (Increase) Act 1956. When I started on the framing of that Bill I began in the same optimistic spirit which I expect has animated all Ministers in all Governments who have thought of preparing a new Pensions (Increase) Bill. One began with the idea that the sensible thing to do would be to cut away all the old jungle of previous Acts and to start afresh. Like all Ministers concerned, before and since, I discovered that was quite impossible, unless one was to create all kinds of anomalies which would be intolerable in practice. That is part of the difficulty here. One not only has to do justice between different classes of people but also between one individual and another, without the creation of new anomalies. In the 1956 Act I was successful in making two new departures which have been accepted in all subsequent Acts; that is to say, in the first place to extend pension increases right up to the highest pensions, and in the second place to get rid entirely of the means test which was a feature of the early post-war Pensions (Increase) Acts.
We are all grateful to the noble Lord the Leader of the House, no doubt in his capacity as Minister of the Civil Service, for taking the trouble to come down to the House and explain the Bill to us this afternoon, and it seems to me that
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his explanation was not a word too long. This is an important Bill for three-quarters of a million people, and it is right that Parliament should take proper cognisance of it. If I may say so, I did not quite understand his argument that because this Bill is going to cost £27 million a year, according to the Financial Memorandum, that proves that it is more than making good the erosion caused by the rise in the cost of living since the last Act. Maybe I have failed to follow the arithmetic; if so, I think he will forgive me, because none of the mathematics of this subject is easy.
The noble Lord also said that this was the seventh Pensions (Increase) Bill since the end of the war. From the figures given in the Explanatory Memorandum, I make it the eighth. There were five Conservative Pensions Increase Bills, and I think he will find that this is the third introduced under a Labour Government. The important fact is that under all Governments it has been customary for the Opposition to help to speed Bills of this nature on to the Statute Book, and I promise him that this will be no exception. This is not certified as a Money Bill but it is all about money. The noble Lord said that there might not be a Committee stage. I would remind him that before now Pensions (Increase) Bills have been amended in your Lordships' House, but of course I accent at once that it would be inappropriate for your Lordships' House to seek to make substantial changes in the financial arrangements. However, if there are minor improvements which should be considered I hope they will be brought forward. The noble Lord also made it clear that this Bill covers only civilian pensions and does not extend to Service pensions. They are dealt with outside the scope of legislation by Royal Warrant, though it is customary that what the Royal Warrant contains shall be in line with the decisions of Parliament on the civilian legislation.
I have a few questions to ask. The increases under the Bill are to be payable on April 1; can we be assured that they will actually reach the pensioners without delay? Are all the necessary preparations being made to get the new and increased pensions in payment from the beginning of April? Most of the pensioners concerned will be waiting eagerly for them, for, as the noble Lord

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indicated, there has been a 13 per cent. rise in the cost of living since the last Pensions (Increase) Act took effect on January 1, 1966. One can see that the Bill quite rightly seeks to give greater help to the older pensioners, and the scale set out in the Schedule runs from 18 per cent. for those who retired 14 years ago and more to 2 per cent. for those who retired two years ago.
One notices that the Government have gone back entirely to the percentage increases, whereas the Conservative Act of 1962 introduced what I thought was a good new idea of granting as well as percentage increase a flat-rate addition of £20 to all the older pensioners; I mean not those who had retired the longest, but those over 70 years of age. Would it not have been a good plan to extend that idea and give special help to the older pensioners by increasing that flat-rate £20 to £30 or £40 to everyone over 70? Why is it that the fiat-rate addition has not been followed up in subsequent Bills?
I, for my part, am not going to advocate parity; that is to say, bringing all pensions up to the pension which the pensioner would receive if he retired now. I suppose I know too much about its complications. My experience is that when one looks into that one finds it impossible to apply, and in so far as it was possible it would create fresh anomalies between one pensioner and another. That is unfortunate, because it is the simple solution which commends itself at first sight as the fair thing to do.
I think the Government should try to do still more for the people who retired many years ago. The noble Lord gave examples of some smaller pensioners who retired 20 years ago and have received relatively good compensation for the erosion of their pensions by the rise in cost of living. But he was very frank and honest with the House, as one would expect, and he admitted that there were others who were not so fortunate. It is the older pensioners who have been hit tragically hard by the rise in cost of living. In addition they can see their successors in similar posts drawing far higher pay now than they ever did and thereby qualifying for much higher pensions when they retire.
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The second class of pensioner I want to mention are some of the most recent. I think the last Pensions (Increase) Act awarded no increase to anyone who retired after April 1, 1964. These pensioners will have received no increase at all in their public service pension, until this new Bill comes into operation and it is increased from April, 1969. Since April, 1964, I think the noble Lord will agree, the cost of living has risen by over 21 per cent., so the pensioners who retired in 1964, at any rate those who retired after April 1, 1964, have already had the purchasing power of their public service pensions eroded to that extent. Yet this Bill offers them at best only an 8 per cent. increase.
Those who retired in July, 1967, have, as the noble Lord frankly admitted, already suffered considerable loss of purchasing power through inflation, and this Bill will do nothing for them at all. An Amendment to ameliorate that by altering the cut-off date from July, 1967, to July, 1968, was moved by the Opposition in another place, but it was rejected on a Division, and as it is a money matter I think it would be useless to reopen it here. I would ask that future Pensions (Increase) Acts will realise the hardships liable to be suffered by those retiring just after the cut-off date, and will therefore bring the cut-off date nearer still to the date of introduction of the new Bill.
I should like to ask why July 1 is taken each time as the critical date. Surely among public service pensioners the month of July is the commonest date for retirement. It must be the commonest date for teachers, who, as the noble Lord said, represent a very substantial percentage of those who stand to benefit. When next a Bill is in preparation—or whatever may take its place under the new thinking—I wonder whether October 1 might be considered as a better time of year than July 1 for what I have called the critical date. That might be a simple way of somewhat lessening the hardship to which I have referred.
I am not proposing to table Amendments for the Committee stage. The Bill was very thoroughly worked over in another place, and I should like to pay tribute to the exemplary manner in which

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Mr. Patrick Jenkin, leading for the Opposition there, did his work. I know the Government spokesmen themselves, for their part, took great trouble to deal with the points raised in Committee. I have read it all, and it seems to me to have been a very thorough examination of the Bill. That being so, it would be inappropriate to repeat the same examination here. One welcomes the Bill for what it does, and yet one cannot help noting how far it falls short of the hopes which the Prime Minister himself raised in the minds of public service pensioners during the 1964 Election campaign as to what a Labour Government would do. He said then in a letter to a public service pensioners' organisation:
"We have also called for public service pensions to he linked to some economic indicator, so that the pensioners are not only compensated for rising prices, but also receive their full and fair share in rising national prosperity."
Not only have they not received their full and fair share of rising national prosperity, if any, but the figures quoted show that the majority will not have been compensated for rising prices, even when this Bill takes effect, the second Increase Bill which the Government have introduced.
I have one other question. Can the Government say whether it is the intention of the nationalised industries to follow up this Bill by producing similar increases in their own pensions? Will the Government encourage them to do that? I ask this with feeling, especially for the railway superannuitants. It so happens that I am one of the few surviving ex-directors of the pre-nationalisation main line railway companies, and therefore I am specially anxious to see the older railwaymen fairly and generously treated in present days.
Finally, let me say how glad I am that the Government, in response to Opposition pressure in another place, have agreed that there should be another review in April, 1971, if the cost of living has risen by 4 per cent. or more by then. That was the pledge to which the noble Lord drew attention at the end of his speech. By April, 1971, there will be a new Government in power, which I am certain will fulfil its predecessor's undertaking, and the Conservative Party has
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indeed pledged itself to carry out further reviews every two years.
Meanwhile the Government, as the noble Lord has said, are pressing forward with a fresh inquiry to see whether these matters can be dealt with in any other and simpler way. I expect he has in mind that there might be some device other than repeating ad hoc legislation that has to be taken through Parliament, to ameliorate the situation for public service pensioners affected by the rising cost of living. As I said, all this up to now has been done by common consent between Governments and Oppositions, and I am sure that if this Government go out of office before that inquiry is completed the work done on it will become available for their successors. I am not altogether hopeful that we can bring about, any of us, a radical simplification here, but I entirely agree that it is well worth making yet another effort to try to reach that desirable end. I believe that there are only two ways to set limits to the hardship suffered by these public service pensioners. One is to bring inflation to a complete stop. The other is to ensure the upward adjustment of public service pensions at closer intervals than has been the case up until now, and that is declared Conservative policy.
5.23 p.m.
LORD BOURNE: My Lords, I will try not to cover the same ground as has already been covered by the noble Lord the Leader of the House and by the noble Lord, Lord Brooke of Cumnor. At the outset I have to declare an interest, in that I am a public service pensioner and also Chairman of the Officers' Pensions Society, which has 33,000 retired members of the Armed Forces, including 4,000 widows.
I will try to bring out two or three points. The first is parity; the second is regular reviews; and the third is cases of real hardship and unfairness. Lastly, I will make some suggestions. I will not re-define "parity" because we all know what it is. The reason it takes care of these awful anomalies which have been mentioned, and which were described in the very thorough debate in the other place (I agree with the noble Lord, Lord Brooke, that the Members of another place devoted great attention, great care and considerable skill to this

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highly complicated subject) is that it is designed to take care of erosion of pensions by rises in prices and to provide also for a rise in living standards as reflected in the pay of the rank and file of the day.
I need not remind your Lordships that the Prime Minister said exactly as he was quoted, but he pointed to these two things before the Labour Party came into power. Consequently, I was very glad, when reading the recently published White Paper, National Superannuation and Social Insurance to see that these two elements were specifically mentioned in paragraph 101. I think perhaps I ought to quote what it says, because it is very much to the point. First:
"The increases, which will always come into operation in the autumn, will compensate for any rise in price levels since the previous increase."
And lower down:
"Pensioners and other beneficiaries will also continue to share in the nation's rising living standards."
My Lords, it could not be better expressed, and I am thankful to see that parity is coming at last in the national earnings-related scheme.
I think it would be unfair on public service pensioners not to mention that seven of our allies—West Germany, France, Italy, Luxembourg, Belgium, Holland and the United States of America—are able to afford parity: not exactly, but for all practical purposes. We are told that we are in a period of economic distress and cannot afford it; that we have to understand that and must put up with these anomalies. I have been told many times, when I have pressed the Government, that when one takes account of National Insurance as well as the public service pension our pensioners are equally well off. It does not happen to be true. What defeats me is why the Government should provide a system of National Insurance based on parity, and something quite different for the public service and the Armed Forces. I have never been able to understand that. I should like to have it explained.
Now I come to regular reviews—and at last, after eleven years, we look as if we are going to get them. Ever since the Grigg Report was adopted and endorsed by Parliament for biennial reviews of serving pay (incidentally the Civil Service,
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I think, have their pay reviewed every year; the Armed Forces every two years), we have asked for similar treatment for retired officers and their widows; but we have not got it. Now, it is to be statutorily obligatory, under the new earnings-related scheme—which will presumably pass into law pretty soon. I will not quote the right honourable lady, the Paymaster General, on this point because she has already been quoted, but I should like to quote what she said a little later on in the debate in the other place. She expressed the hope that
"the work now going on … will ensure that we can avoid having to come to the House from time to time, whichever Party be in power, with a Bill of this kind. We want to replace that system with something much better, with something which guarantees to the public service pensioner regular increases when he ought to have thern."—[OFFICIAT REPORT, Commons, 17/2/69, col. 136.]
I think the noble Lord the Leader of the House mentioned this point, but I give your Lordships exactly what the Paymaster General said in another place because it is very much what we have been waiting for. I sincerely hope that the promised review on April 1, 1971, will develop into regular reviews for retirement pay.
I think at this point I ought to mention the lost three and a half months, which have not been mentioned. Previous Pensions (Increase) Acts have become operative on January 1: this one becomes operative on April 1, and is based on index figures for the middle of December, 1968. If we do not catch up, either now or when the next review takes place, the three and a half months which are not provided for at the moment, we shall have lost this for ever. It will be at least 1·5 per cent.—probably a little more.
The noble Lord the Leader of the House gave some examples of how pensions are, in many cases, keeping pace with the cost-of-living increases. Of course, I accept that. But as the system is highly complicated, and absolutely bristles wih anomalies, may I give a few examples in the opposite direction? Amendment No. 4, which was brought in in another place on Third Reading, was designed to level pensions, and had the following rates of increase—and it will be seen that whereas the rates in the Bill go steadily downwards, in that Amendment they increase: 25 per cent., 18 per cent., 14 per cent., 20 per cent., 10 per cent., 5

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per cent. In other words, there is a jump in the middle to take account of anomalies which unfortunately exist and which, historically, are not our fault.
I should like to give three examples in the opposite direction. The noble Lord, Lord Gridley, is to speak after me so I shall not give examples of overseas pensioners, with whom no doubt he will be dealing. I shall give examples as they affect members of the Armed Forces, and in many cases they are paralleled by civil servants. A major who retired pre-Second World War with a pension of £407 per annum has received an increase of 125 per cent., which brings his pension to £917 per annum. During this time the cost of living has risen by no less than 223 per cent. Unless he has private means, he will therefore have had to lower his standard of living by about 50 per cent. And, incidentally, he would not be entitled to the National Insurance pension. On the other hand, the man who retired twenty years later will receive increases which approximately keep his pension in line with the cost of living. To make matters worse, under this Bill, he will on April 1, 1969, be getting an increase of £4 more than the pensioner whom I have just quoted. What possible justice can there be in this? Why must the Government continue to penalise pre-war pensioners and their widows, most of whom are over 70?
A captain in the Army, a junior officer, under the 1919 Code (which covers some 6,000 pensioners and their widows) after the 1962 Pensions (Increase) Bill was £99 behind an equivalent officer on the 1956 Code. To-day, after the new increase provided for in this Bill he is £130 behind, and so the gap has widened. This unfairness applies to most officers and their widows on the 1919 Code. It relates to people who retired pre-war. In the case of a major-general there is a widening gap of some £29, and he is getting further and further behind. To take a different example, that of a provincial commissioner in Tanganyika, an example which was given in Committee in another place, he is now drawing a pension of £1,740, compared with the man who retired in 1960, some 15 years later, who is drawing £3,354—almost double. I think that I have given enough examples to prove that the anomalies go deep. Although I accept Lord Shackleton's
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contention that many people are keeping pace with the cost of living, the men and women I have mentioned who retired pre-war are not. If they do not catch up now, they never will.
I should like to mention two special categories of widows who are hardly treated. First of all, there are the widows who did not marry until after their husbands retired, and who get nothing. Then there are the widows who were married to serving officers and were widowed, who then married again and were widowed a second time. They get nothing unless they go through a means test. The noble Lord, Lord Brooke of Cumnor, said that the means test had been abolished, so those widows must be in an exceptional category. One is always told that a widow can draw supplementary benefit, but it is hardly fair that the widow of a lieutenant colonel who was killed in World War I has to draw supplementary benefit in order to live.
I suggest that there is only one fair way of treating these older men and women. Although they are very elderly, and, therefore, most of them do not draw National Insurance pensions or get the terminal grant which was introduced much later, they are not dead yet, and we ought to help them by a levelling up based on stages, which will be called partial parity. I know that there are objections to this suggestion, bat the fact remains that a levelling up would remove the anomalies up to 1956, if not afterwards. I suggest that Parliament should remove these unfairnesses. I accept the generous intention of the Government in spending £34 million per annum, of which £7 million goes to the Armed Forces, and that the Government have taken a great deal of trouble over this new Bill. Nevertheless, it still leaves unresolved the unfair matters which I have mentioned.
I suggest that the Government should level up public service pensions to 1956. I believe that they have carefully considered this matter, and they no doubt have good reasons for rejecting it, but the chief consideration has been that of cost. It will cost about £1¼ million, probably more, for the Services, which is not a great deal of money. If it cannot be done because of the expense, then the next best thing is to level up to 1945, thereby removing all anomalies up to that date. Involved in this bracket are about 40,000

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civilians and 55,000 members of the Armed Forces. That would cost only £300,000 for the Armed Forces. It is chiefly the officers who are hard hit.
If these two suggestions are impossible because this is a money Bill and we are not able to make this kind of Amendment, or because the Government are unable to spend money on that scale, I am inclined to agree with the noble Lord, Lord Brooke, that we ought to increase the fiat rate grant by £20 for the older people who are quite defenceless in this matter and deserve our sympathy. It is nearly the last chance to help these elderly people. It is getting late, but we ought to take this chance. I have suggested these figures to relieve the hardship, if the levelling up is impossible.
5.38 p.m.
LORD GRIDLEY: My Lords, as the noble Lord, Lord Bourne, has said, it is customary in your Lordships' House to declare one's interest in any subject of debate. I have an interest to declare as a former Colonial civil servant now drawing pension. I am also a member of the Council of Her Majesty's Overseas Services Pensioners Association, and we come into contact with the problems of pensions on varying matters.
I was interested to hear the tribute paid by the noble Lord the Leader of the House to the people who are affected by this Bill and I shall not repeat what other noble Lords have said. There is great force in what the noble Lord, Lord Bourne, said about the position of pensioners who started drawing their pensions in 1945 and who are not affected by the present proposals. There is no doubt that a great number of persons in that category are suffering very much to-day.
I went into pensionable service in 1928 or 1930, and people who elected to serve in the Colonial Service, in the Armed Forces, in the postal service in England or in the police force, elected to go into service of that kind expecting not to run the risks which they might have to face if they tried to attract a larger salary in industry. As a corollary of that, they accepted a lower wage or salary with the security of a pension. What I am most concerned about in this post-war age is that since 1945 it has been customary to look at the conditions of people in this country, not necessarily those in
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Government service or similar employment, who were never considered for a pension 25 or 30 years ago. I sometimes think that, in spite of the humanitarian ways in which we look at these matters, we overlook the conditions under which people first took up service in this country or abroad.
As the noble Lord the Leader of the House said so kindly just now, there have always been very high conditions of service to be followed. Pensionable status is never automatic. If a person is in the police force, he may be on probation for a certain number of years and in every way has to be worthy of his pension. He has to be recommended for pensionable service and has to satisfy his authority that he is the right type of person to draw a pension. It is that kind of person whom we are considering under this Pensions (Increase) Bill. I welcome what the Government are doing. I agree with the remarks made by the noble Lord, Lord Bourne, and I appreciate the observations of my noble friend Lord Brooke of Cumnor. We accept this Pensions (Increase) Bill, and we are grateful for the assurance that there will be further reviews of the cost of living position in 1971.
5.44 p.m.
LORD SHACKLETON: My Lords, I am much obliged to noble Lords for the reception which they have given to this Bill and for the helpful and constructive remarks that have been made. Running through all the speeches was the feeling that, whatever we may have done for some—and I think we all agree that some are fully compensated—there are others about whom we should feel a good deal easier in our minds if we had done more. I should like to pick up a number of the points that have been made. First of all, I appreciate what the noble Lord, Lord Brooke of Cumnor, had to say about myself and the fact that I have come down to the House to present my own Bill. It is happy that I have this double-hatted role. I also appreciate the tribute which he paid to my right honourable and honourable friends in another place. It was unusual for them to find themselves in the position, with which we are so familiar here, of having to steer somebody else's Bill through the other place, which they did extremely well.

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While I am paying tributes, it would not be wrong, relevant to the remarks of the noble Lord, Lord Brooke, about whether the necessary arrangements will be made, for me to pay a tribute to those who have the responsibility of working out these schemes—a most onerous job. I am very conscious that my own officials who have been involved do a really brilliant job of steering a way through the utmost complexities. Nearly all the arguments which have been advanced to-day require some sort of decision, and this very difficult area of decision and of then applying it as a result of inter-departmental discussion—because everybody is fighting to do the best he can—calls for great skill and perseverance.
As a former Paymaster General, it was interesting to me to visit the Crawley headquarters of the Paymaster General's Department. Much of the burden is thrown on the people there, but how extraordinarily efficiently they cope with it!I have always wanted to pay a tribute, since I saw that rather unusual group of men working with their own computer. When I say "their own computer", I do not suggest that they built it themselves, but they certainly had to learn how to operate it. It is a very skilled task to make all these payments, conscious that it must be done in time and that people must receive them. Generally, the public service, both there and elsewhere, renders a very real service. We are apt to grumble about the fourpenny post and that sort of thing, but here is an area where pensioners and others get paid despite the complexities. The position is very much better now. During the War, when I was promoted my pay stopped altogether, but thing go smoothly now.
LORD BROOKE OF CUMNOR: My Lords, may I, too, be allowed to join in this tribute, because I am also a former Paymaster General?
LORD SHACKLETON: My Lords, I rather thought the noble Lord was. He probably did not, however, have the opportunity to visit the Department in their new home, to which they have recently moved.
There are a number of interesting points and I shall try to answer as many as I can, but if I leave any unanswered I shall, it necessary, reply in writing. First
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of all, I said that this would be the seventh major Act. The noble Lord has made me confused, but I think I said it was the seventh. The Act of 1954 was a very minor amending Bill so, technically, I defend my position. Let me now deal briefly with the question of flat rate additions. This also ties in a little with the position of very old pensioners of long standing. The truth of the matter is that the flat rate additions can produce some very awkward anomalies, and the pensioners themselves did not like the flat rate addition in 1962. Indeed, the Opposition in the Commons argued against special increases to give extra assistance to specified groups of pensioners. One can argue about every system but, on balance, I am convinced that percentage increases are the fairest system.
The noble Lord, Lord Brooke, asked why July 1 should be the date chosen for steps in the escalator. I have some very full reasons which are essentially technical, but if the noble Lord wishes I will provide them. Basically, however, the date is determined by the interval that it is necessary to interpose between the effective date, April 1, and the cut-off date, 21 months earlier. There is also advantage in moving from the April date in the previous Acts, since those who retire just after April will on this occasion fall the right side of the line. When the noble Lord has studied what I have said, and when I have re-studied it, I think we shall understand the reasons for this date.
On the subject of nationalised industries, I appreciate the noble Lord's concern. This is a matter for the Boards themselves, and they have to reach their own decisions. They will no doubt note the increases provided by the Bill. It would be wrong for the Government to issue directions to the Boards in this matter, but the Boards will no doubt have noted what the noble Lord and others have said. The noble Lord referred to the hopes expressed by my right honourable friend the Prime Minister. Let me say two things on that point. Reestablishing a new and comprehensive system of pensions in the national field is a very complex task, and I am sure nobody knows that more than the noble Lord, Lord Brooke. It is necessary to produce a scheme for public service pensions which will be in harmony with

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this; and although one would have liked to see an advance to the comprehensive scheme earlier, I am afraid it is necessary that we first get published the major reorganisation which I mentioned and which is contained in the White Paper issued by my right honourable friend Mr. Crossman, and then work on adapting this particular scheme, like other occupational schemes, to the new system.
I do not think it is quite fair to blame the present Government for not making good all the earlier erosion. I would say just this to the noble Lord, Lord Bourne—and this is not to diminish the force of his arguments. Since October, 1964, the cost of living has gone up by 19 per cent. Since that same date, 1919 Code pensioners had an increase of 16 per cent. in 1965 and will have an 18 per cent. increase under this Bill. Although this does not restore the position—I acknowledge what the noble Lord has said—it improves it relatively.
The noble Lord, Lord Bourne, spoke about parity, and even argued in favour of partial parity. I would only say to the noble Lord that there are powerful arguments against it. I do not believe it would be a simple solution, as I am sure he does not, and I can well understand his trying to find some method. But if we adopted some such date as 1956, we should get an even more absurd pattern as a result. We have already noted the variation in the pattern of pensions that is to be found over the public services as a whole, and there is no one year in the past which offers a logical base line free from anomalies. In fact, the anomalies would become more serious and more acute than at the present.
For example, with the enactment of this Bill and its parallel—I take a civilian example—clerical officers who retired between 1939 and 1948 will already have pensions at about the 1956 level; and even at the executive officer level (which is roughly equivalent to a captain in the Army) the gap is quite small—only a matter of 2 per cent. or so. I am not suggesting that their pensions are the same, because, of course, retirement ages are different, but it is widest at the highest level—and these are the pensions which would stand to gain the most. I do not think that would matter in the context
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of full parity, and I accept the arguments which the noble Lord, Lord Bourne, made on this point. Does the noble Lord wish to interrupt?
LORD BOURNE: In a moment.
LORD SHACKLETON: But so long as resources are restricted, many of the small pensions must still remain some way behind current levels. It seems doubtful whether it would be right to concentrate this proportionately large increase on pensions, many of which are substantial by most standards and very substantial by some of the examples which the noble Lord himself mentioned.
My Lords, I have here a number of figures which I could quote comparing the different rates and showing how some people are better off in relation to the increase in the cost of living. I have particular examples which show that even those who retired on, say, December 31, 1956, are in fact better off than they were in relation to the cost of living. But it would not help any of us very much if I merely tried to show that some people are as well off or are better off, when we know that in fact there are those who are not better off. I would therefore say to noble Lords that we have considered very carefully what is right. We acknowledge the anomalies in the system; and I have noted again the position of overseas pensioners. The noble Lord, Lord Gridley, did not make any particular points beyond stressing the fundamental principle.
I would only say, therefore, to all noble Lords, that we all wish that more could be done. We all hope that the review, which is a very complex one, will be conducted as quickly as possible and that in the future Governments and the public as a whole will recognise their responsibilities in this area. I will not branch off into the field of incomes policy and some of these difficulties, but it is important, of course, not only that Governments should recognise this and do something but that other citizens should not just support it in the abstract but genuinely recognise that they have obligations in this area. But that leads me into a field where we are seeking more social justice—
LORD BOURNE: My Lords, I hope the noble Lord the Leader of the House will forgive me, but he is getting very

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near the end of his speech and I wanted to say something before he finally wound up the debate. May I go ahead?
LORD SHACKLETON: Yes.
LORD BOURNE: The noble Lord the Leader of the House quite rightly mentioned that my suggestion for partial parity, levelling to 1956 or levelling to 1945, which would be a cheap operation, would introduce still more anomalies than we already have—and, of course, that is a disadvantage. It is a matter of opinion whether there are numerous anomalies or not, and I have to accept the Government's ruling on that. But I should like to make the point that this is the last chance to help these people before they are wrapped up and slightly forgotten in the new pensions earnings-related scheme. It does not affect them, and they are very liable to be forgotten. In their interest, I would suggest that it does not matter about introducing quite a number more of anomalies between now and April, 1967. I would put up with the anomalies, because we have been living with them for goodness knows how long and I think that a few more would be very acceptable if it were in their interests. I like the suggestion of a flat-rate increase very much—perhaps another £30.
LORD SHACKLETON: My Lords, we could obviously discuss this matter at very great length, but, basically, if it were possible to do more for them there are other ways in which I think it could be done more effectively. It might well be better to increase or vary the amount of the escalator rather than to do something which further increases the anomalies and disposes of some of the limited resources in directions where it would not be of as much value. I accept the noble Lord's concern for those for whom, as he points out, it may be too late to do anything, and I will certainly consider what the noble Lord has said. He is very active in representing his views to the Government, and I know that the Government listen, and listen sympathetically. People do not just say, "What a nuisance—here he comes round again"; they recognise his concern. I can only say to the noble Lord that I have certainly taken a note of what he has said, and I hope that the proposals which are contained in this Bill will go some way
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towards ameliorating the lot of those whose need is very great.
On Question, Bill read 2ª, and committed to a Committee of the Whole House.

THE LAND COMMISSION AND BETTERMENT LEVY
6.0 p.m.
THE EARL OF KINNOULL THE EARL OF KINNOULL rose to ask Her Majesty's Government whether they are aware that the Land Commission levy in certain cases is proving excessively burdensome and whether they consider the Land Commission itself is now achieving one of its original objectives of making development land cheaper. The noble Earl said: My Lords, I think it may be said of this House that it has something of an advantage over another place when discussing the Land Commission by virtue of the fact that, besides the wisdom of the noble Lord, Lord Silkin, we have also the noble Lord, Lord Kennet, who is in the unique position of being the only Minister who has not deserted the helm since helping to pilot the Land Commission Bill through Parliament in 1967. He therefore has the advantage of being something of a father figure; and, as a father figure on a more personal note, he is of course well qualified.
My Lords, in asking this Unstarred Question on the Land Commission, I hope very much that the noble Lord will be able to give us a more positive and helpful reply than that given by the Government in another place during the debate on February 6. As the House knows the Land Commission have now been in operation for just over two years.
The Commission's original objectives were set out in the White Paper of 1965. They were:

"(1) To secure that the right land is available at the right time for the implementation of national, regional and local plans;

"(2) To secure that a substantial part of the development value created by the community returns to the community and that the burden of the cost of land for essential purposes is reduced."

It is the effect of the second objective, in other words, the betterment levy under Part III of the Act, to which the first part of my Question relates.
As the House knows, and as I am sure the noble Lord, Lord Kennet, is aware, the betterment levy and the way in which it is operated have been the direct cause over the past year of a rapidly growing number of cases of acute and sometimes inequitable hardships falling on individuals. Almost every day one can pick up a newspaper and see a report of yet another case of a young couple, or perhaps an old retired couple, who face a large bill from the Land Commission on an assessment that they did not understand and had not anticipated; an assessment often based on a valuation and calculations meaningless to the recipients, many of whom feel that they cannot afford professional advice. The result of these hardship cases is always the same: the young couple or the old couple are unable to proceed with their plans to improve their homes and to enjoy that little more comfort for which they have saved, perhaps for many years.
It is easy to paint an emotional picture of these cases of hardship, but I do not intend to do that to-night. I am personally aware of over twenty individual cases of hardship caused by the levy, none of which I intend to go into in great detail to-night but all of which I can make available to the noble Lord, Lord Kennet, later if he so wishes. I am sure that he is aware of most of them. All of them have a fundamental point in common. All are cases involving a fairly low levy tax—under £2,000, I think; all are cases affecting people's homes, some under Case "c" of the betterment levy where people have improved their own homes with their own labour. I hardly need add that the reason for this is the development charge under Case "c". Many of the people affected are apparently totally unable to meet this levy tax, even by instalments. It may mean in some cases that they have to sell their house; and many of them feel so strongly about the injustice of their case that they have said that they would rather go to prison than to pay.
My Lords, this unhappy atmosphere has not, I believe, been helped by the indecisive attitude which the Government have so far adopted. In the debate on February 6 last in another place the reply by Mr. MacColl, when he was pressed about hardship cases, was as follows:
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"We must consider such cases to see what we can do to improve their lot and let the Land Commission machinery get into operation. We should not start tinkering with that machinery until we see the best way to tackle it."—[OFFICIAL REPORT, Commons, 6/2/69, col. 707.]
I should have thought that by now the Government had ample evidence of these cases and ample time to get the Land Commission to assess them and to formulate changes in the levy. Perhaps at this point I might ask the noble Lord, Lord Kennet, whether the Land Commission have submitted lists of suggested alterations and exemptions from the levy. As the House knows, the Government have the power, under Section 63 of the Act, to add by statutory order any exemptions of levy. But this power, so far as I am aware, has not yet been used. But unless the Government take action soon I believe that, with the intense feeling of injustice, and often sheer physical worry, that surrounds these cases, there may be a tragedy on the lines of the Pilgrim case.
It is true to say that it is easy to be critical and often more difficult to be constructive; but I should like to put forward to the noble Lord, Lord Kennet three cases which I believe could qualify for exemption from the levy or for delay of payment. The first is that the levy shoud not apply below a minimum figure. I am sure that the noble Lord, Lord Silkin, will support me in this, for he moved such an Amendment during the passage of the Bill. The Government reply at that time was that it would lead to widespread abuses. I am told on good authority that, with careful drafting, the Government fears of widespread abuses could be met. If the noble Lord would so wish it I should be happy to furnish him with such a draft. If this minimum figure were accepted by the Government it would, in my opinion, kill two birds with one stone.
First, it would relieve many cases of hardship (which I am sure the Government are as anxious to relieve as we are), and, secondly, it would save a great deal of time and expense on the part of the Commission in the collection of these small amounts. The Commission stated recently that they anticipated that the costs of collection of levy for last year would exceed £2 million. I think it would be of interest to-night if the Government or the noble Lord could advise us what

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studies, if any, have been made on the cost of collection and what proportion of the collections are of a low figure—say £2,000. The second change that I would advocate has already been pressed in another place. That is the exemption of the owner-occupier. This would fall in line with the legislation on capital gains tax. The third change that I would submit to the noble Lord relates to the Case "c". It is particularly relevant, I believe, to the example that has become known as the "Sweeting case", where a young couple were given a barn by an uncle. With their own hands, they converted the barn into a house. Under Case "c", they were charged a development value levy of £900, a sum which, I am told, amounted to something like 50 per cent. of what they had actually spent on the house itself. If one accepts that Case "c" is justified, would it not be possible to provide that the charge should not become operative until the property was sold? That is when the profit is in fact made.
The last point I would make to the noble Lord concerns professional fees. Here I perhaps should declare an interest. At the present time, under Schedule 6, paragraph 19, the full cost of professional fees is not allowed as a deduction in the assessment of net development value. I have no idea how this restriction arose and perhaps the noble Lord could explain it to us later. Yet for capital gains tax purposes it can he deducted.
May I give a short example of how this operates at present? There was a case some time ago when a gentleman purchased a property, after April 5, 1967, at £2,250 and a year later sold it for £2,400. The net development value on this purchase and sale amounted to £150 and the levy was assessed at £60. The gentleman incurred fees on the initial purchase of the property which amounted to £60 and incurred fees on the sale of the property amounting to £186. Therefore, he made a loss on the whole operation of £36, and as he was charged a further £60 this made a total loss of £96.
I would make one final point. It is no exaggeration to say that this new tax has proved at the lower end of the scale to be a pernicious and cruel tax. It has already caused many terrible cases of hardship, involving quite innocent
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people. These cases multiply monthly. They are no longer one or two exceptions; they may now, I believe, run into three figures. The Land Commission have a very large backlog of cases, all fairly small, and all must be physically uneconomic to collect. In many instances, the Land Commission must be paying more to collect the money than they are receiving. No one seems to benefit. Everyone seems to lose.
The Government so far have said that they are willing to look into every case. Can the noble Lord tell us how many cases they have looked into and what the results are? The Chairman of the Land Commission is reported as saying that he can only work within a framework of legislation. Of course, that is correct. As the noble and learned Lord the Lord Chancellor is present, I could refer to some of his words, when moving the Second Reading of the Land Commission Bill he said:
"For too long the property speculators have bled white those of our people who wanted a home to live in.—[OFFICIAL REPORT, 14/11/68, col. 1088.]
I think that one could now adapt the phrase "bled white" to this tax. I believe it is time that the Government took action. Enough has been seen of the way the tax works in smaller cases.
I turn briefly to the second half of my Question. The House will recall that besides administering the levy tax, the Commission have two other prime duties: to see that the right land is made available at the right time and that the cost of land for essential purposes is reduced. Some of us who have had dealings with the Land Commission realise that they work under difficult conditions and I am afraid that they are going to work under more difficult conditions in the near future. The, live under a cloud of uncertainty—uncertainty as to their role as a land bank, uncertainty as to their relations with the local authorities, uncertainty as to their relationship to planning and uncertainty as to their future in the next Election.
We were told by the Minister of Planning in another place a fortnight ago that there are many myths surrounding the Land Commission. That was one of the few remarks in his long speech with which I found myself to be in complete harmony. One of these myths which I

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hope the noble Lord can clear up tonight is the precise instructions given to the Land Commission as to the jobs they are to perform. Are they, for instance, to tackle city centre redevelopments and the twilight areas? This, I think, must be an urgent priority. Or are they simply to take part in the rapid expansion of new residential development areas which the Minister of Housing has been calling for? If they are to tackle the city centre redevelopment, may I ask what areas they have under consideration at the present time?
Another myth of Land Commission policy, which many people consider almost sinister, is that they have suddenly begun to advertise in the national Press for 100-acre blocks of white land. One immediately asks: what is the purpose of this? Are they implying that they will be able to accelerate the planning consents for development use of land? In other words, are they receiving preferential treatment over individuals? So far as we know, they have no powers of planning and an application of theirs stands or falls alongside any other application. Here the implication seems to fall in this way. The Commission, in their wisdom, are intended to purchase what is known as ripe land. One assumes that that is land ripe for development. Suppose the planning authority turns down the application from the Commission. Of course, the Commission can then appeal, as a normal individual can, but the appeal is to the Minister to whom they are responsible. What happens then? Is political pressure going to interfere with sound town planning? Even if it does not, there is always a suspicion. And I should be grateful to learn from the noble Lord, when he answers, how many acres of white land the Commission have already purchased or are in process of acquiring and whether they have made any planning applications for this white land.
Perhaps the biggest myth of all is about the effect the Commission have been having on building-land prices. There is no doubt about it that at the time legislation was going through this House most of us were under the impression that the Government stated that the Commission would result in a reduction in building-land prices. I am sure that no one in
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this House, not even the noble Lord, Lord Kennet, needs to be told what in fact has happened. Land prices have risen, in some cases by 60 and even by 80 per cent. above 1967 levels. I should like to know what the Government put this down to. Is it, as I suspect, partly due to the levy and partly due to shortage of land available, or is there another reason? The effect of the increases in land prices has been yet one more difficulty for the housing programmes to cope with. The increasing cost of land, the increase in building costs and now an acute shortage of mortgage facilities, are the present ingredients of what must rapidly be becoming a pretty sickly housing programme. It seems to me that the Land Commission are doing precious little to assist. The term "myth" I believe describes the Land Commission very well. They seem at present to have a white mist surrounding their purposes and a black cloud surrounding the tax they impose. I hope that both of those can be cleared up to-night by the noble Lord, Lord Kennet.
6.40 p.m.
LORD SILKIN: My Lords, I should like to congratulate the noble Earl on having asked these important questions and on having dealt with this matter in a relatively moderate manner. When one compares the language he used with the language used in another place, one must be grateful that the noble Earl has put forward the points he has made in a really practical way. I think he has gone a little wider than his Question, which deals with two specific matters. I propose to deal with the two specific points in the Question, and if my noble friend wants to deal with any extraneous matters he can do so.
The first point is that of the excessively burdensome amount of the levy in certain cases. The noble Earl was not suggesting, in any case, that the Commission were going outside the terms of the Act. His complaint was really about the Act itself. He made three points altogether, and I think his major point was that it would be an advantage if there was now a de minimis provision so as to exclude small claims. That, of course, is not a criticism of the administration; it is not even a criticism of the Act. It is something which has emerged as the result of

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two years' experience, and certainly I, for one, should be grateful if the Government were prepared to reconsider some form of a de minimis provision, provided that it could be done within the terms of the Act itself. I believe that the Government have taken powers to modify the levy in certain respects, and if it were possible to do this I should be grateful.
The noble Earl referred to a dozen cases of hardship. There may well be a dozen cases of hardship, and many more; but this does not mean that the levy is wrong. Cases of hardship occur when one receives an income tax demand or any other demand for payment to the Government. There are always these cases of hardship, and particularly when people are just outside the borderline. Cases of hardship will arise even if you have a de minimis provision, because there will always be people who are just outside the provision, and we could then well have the noble Earl coming along and saying that something ought to be done about those people.
The Act contains provision for a great many exemptions, and perhaps I may mention some of them. Housing associations, charities and statutory undertakers are exempt. But particularly, so far as individuals are concerned, any person who owned land before September 23, 1965, on which he proposed to build a single dwelling-house is exempt from the development charge. But it has to be for the owner's own occupation, or for the occupation of a wife or husband, a daughter or a son, including an illegitimate child or an adopted child, or a father or mother of the owner. That is a pretty wide range of exemptions. But you will always find somebody who acquired the land in October, 1965, and who is therefore outside this exemption.
I do not see how the Government can deal with a case of that kind. As I say, there will always be borderline cases which noble Lords can represent as hardship cases which ought to be dealt with. I shall leave my noble friend to deal with the various suggestions which the noble Earl made for dealing with these hardships. However, as I say, I should be willing to support a de minimis provision if that were practicable, mostly on the grounds which the noble Earl put forward: that it would save a great deal
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of effort, and that the small sums are not worth collecting. I think he made that his major point rather than the alleviation of hardship.
As a matter of fact, even today the Land Commission have the opportunity of mitigating hardship by accepting instalments. They can be small instalments, and they can be spread over a long period of time. These matters are entirely within the discretion of the Land Commission, and I understand that they exercise this discretion quite freely. But, of course, they cannot waive a charge: if a charge is payable, they have to enforce it. That is all I wish to say about hardship. Having looked at this matter quite objectively, I feel that there is rather a tendency to exaggerate the hardships. I do not say that hardship does not exist—no doubt there are cases of hardship—but I think it is really much more a matter of hard luck that people happen to fall just outside the limits laid down in the Act; and, as I have said, there will always be hardship so far as those who do not happen to come within the limits are concerned.
The noble Earl dealt also with the question of the cost of land. I quite agree with him that when the Bill was going through the House we all had the belief that somehow it would have the effect of reducing land costs, and that, generally speaking, land costs have risen. I would, however, make the point that the Commission themselves are not liable for the levy. They are able to acquire land at 40 per cent. below the cost that other people would have to pay. They can, and do, exercise that advantage in disposing of land to developers at a cost which is lower than the market price. But one has to face the fact that land to-day is being dealt with at the market price. Like everything else, it conforms to the law of supply and demand, and the demand is much greater than the supply, with the normal results.
One reason for this is that not enough land is being released by the local authorities for development. Local authorities, generally speaking (and I have had a good deal of experience of local authorities, even recently), have an unfortunate tendency to say "No" rather than "Yes" to an application for development. Sometimes they can be forced by persistence

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to give way; but the trend, wherever possible, is to refuse permission to develop. No doubt they have their reasons. I am bound to say that the Minister himself far too often supports the local authorities on appeal; seldom does he go against a local authority, even in cases where one might think that land could quite properly be released. While the Minister is constantly saying that land should be released for development, his actions are quite contrary to this; and when it comes to an appeal against the decision of the local authority, generally his decision is in support of the local authority.
I would submit that if more land could be released and made available for development, this would have the normal effect—and this we find in all cases where the supply is increased to meet the demand—of reducing the cost of land. To-day we know that developers are so eager to get on with development that they are prepared to pay very high prices for land—an action which is not justified—with the inevitable result that dwellings and other buildings are much too costly. Furthermore, the Land Commission have not yet full authority to acquire all the land they would like to acquire. Their powers at the present time, during the first stage of the operation of the Act, are somewhat restricted. When we come to the second stage, which the Minister can declare at any time he thinks right, the Land Commission will have much greater freedom to acquire land. They will be able to acquire land of a category, perhaps in advance of requirement, and have it readily available for developments, and to acquire land on a much bigger scale. That will again have the effect of reducing the tension, making more land available and, consequently, of reducing the cost.
I should like to express my gratitude to the noble Earl for giving us the opportunity to have this preliminary discussion on the workings of the Land Development Act. I should like us to have at some stage during this Session a full-scale debate on the whole question. There have been suggestions that the Land Commission might be abolished. I should like to have this matter freely discussed. I believe that this House is essentially the kind of place where we can have this question debated without prejudice on
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either side, with a view to obtaining what is the wise and correct decision. There are other matters, such as those on which the noble Earl has briefly touched, outside his Question which one would like to discuss at greater length. I hope that that will be possible. Perhaps the noble Earl himself will put down a Motion on this subject for debate on a day when we can have a full day's discussion on it. I am sure that it would be well worth while. In the meantime, I am afraid that my own support for the point of this Question is somewhat limited. I feel that it might be possible to have a de minimis provision, but I doubt whether it would be very helpful for the kind of people he is referring to. Apart from that, I am afraid that I cannot give it very much support.
6.33 p.m.
LORD HENLEY: My Lords, I do not want to say much about the hardship side of this particular question because I think that that has been dealt with fairly completely by the noble Earl, Lord Kinnoull, and by the noble Lord, Lord Silkin. But I should like to say a few words on the second part of the Question, which is the matter of making development land cheaper. I have always belonged to that school of thought which felt that this was a very doubtful proposition in any event. It is possible to make something cheaper by increasing the quantity of it, and thus reducing the cost, but in the prevailing circumstances of land in this country that is not possible. All one can do, as the noble Lord, Lord Silkin, suggested, is to make planning authorities disgorge a little more land. Again, I am not really sure whether this is either necessary or desirable.
The noble Lord, I think, feels that demand is greater than supply. On the other hand, there is a considerable body of evidence—notably from the Chartered Land Societies Joint Committee—to suggest that the demand is no greater than the supply and that the system has in fact been working perfectly adequately. However, that is the only way of increasing the quantity of land: by causing the planning authorities to disgorge more. In this respect the Land Commission have failed. They have tried to make the planning authorities release more land for development, but have not succeeded.

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I strongly deprecate any attempt on the part of a body such as the Land Commission to try to bring pressure of this sort to bear upon planning authorities. It is not the job of the Land Commission to get planning authorities to act in this way. As I say, I do not believe that we can make land of itself cheaper; one can only redistribute the cost. It is possible, as the noble Lord, Lord Silkin, has mentioned, to buy land at an artificially low, compulsory price and to sell it at an even lower price. This is a practice known as, "Robbing Peter to pay Paul". If it is felt that Peter is too rich and Paul is not quite rich enough, this is a perfectly reasonable course to take. But let us not kid ourselves that it is making land itself any cheaper; it is not. It is merely redistributing the cost of that land.
Even if the Land Commission were able to make land cheaper I myself doubt whether that would have very much effect on the cost of houses. I think that Dr. Denman has shown that in fact it has a marginal effect here and indeed that this was the basic fallacy which led to the Land Commission's being set up. But we are not talking about whether cheaper land makes houses cheaper, but about whether the Land Commission have succeeded in making land cheaper. It is clear from their own Report that they do not think they have, and that they also feel they are spending a great deal of money in not making land any cheaper.
There are indications that the Land Commission are going to try another tack. I refer here to the point to which the noble Earl has already drawn our attention: that is, the advertisements which have recently been appearing in the professional papers on behalf of the Land Commission. The Land Commission, as he told us, have been advertising to try to get owners of white land to sell it to the Commission, and they have said that they have a preference for 100-acre blocks. Why do they want land in 100-acre blocks? Why not, on the other hand, in small and scattered blocks; in blocks which have access problems; in blocks where, for reasons of this sort, planning permission might not be readily granted but where planning might be granted for a scheme which was a comprehensive whole and a phased operation? It seems to me that it is not
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the 100-acre blocks where the Land Commission could be useful. They could be useful, on the other hand, in scattered blocks which need to be dealt with as a comprehensive whole and where the Land Commission, by acting as an agent, would be performing some useful service. Similarly, in circumstances of this kind the land owner might feel he was glad to sell to the Land Commission. But I do not quite see why a land owner should want to sell to the Land Commission in 100-acre blocks of white land.
Again, this raises a question which we discussed on the Second Reading of the Bill—and I hope that at this point I have the ear of the noble Lord, Lord Kennet. I think that both the noble Viscount, Lord Gage, and myself asked the noble Lord what the proposals were for the Land Commission to manage those large areas of land which they were going to buy. The noble Lord said that this issue would never arise, because the Land Commission were not going to buy and hold on to white land; they were merely going to turn over land ready for development, and turn it over quick. That is what the noble Lord told me in the Second Reading debate, and it may at the time have been a perfectly sound assessment of what the Land Commission were proposing to do.
But the Land Commission are now proposing to do something else. As they are proposing to do something else I want to know the answers to the questions we put then. Will they manage the land with a staff of their own land agents; will they put the management of this white land out to firms in general practice, or will they lease back the land to the owner? The latter might be an attractive proposition to owners; the Land Commission are obviously anxious to be friends with owners, and they have indicated that they hope to be able to buy and sell land to the advantage of all parties, if they wish to do this we should like to know how they propose to do it and what are the implications to land owners if they accept the invitation of the Commission to sell land.
I think it might help if the Land Commission were themselves to be a little more forthcoming and to say exactly what their reasons for this form of advertisement are. Why do the Commission want to buy land by agreement which

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has no planning consent for development and, on the face of it, is unlikely to receive any consent for some years to come? The noble Earl made a suggestion which I hope is not the reason, and that is that they want to do this as they will find themselves in a better position to exert pressure on planning authorities to give planning permission on white land which at the moment is held in baulk by not having planning permission and for which, if it was owned by the Land Commission, the pressure would be such that the planning authorities might in fact give that permission. I hope that is not true, but it is part of what landowners want to know about what the Commission are aiming at, if they are to know whether the propositions being offered to them by the Land Commission are attractive ones.
For instance, how will the Commission go about deciding what white land to buy and what not to buy? If they do not get blocks of white land voluntarily as a result of their advertisement will they resort to compulsion in order to build up an estate of white land? Will the Commission give publicity to their decision so that neighbouring owners may know what material development may take place, and when, on land acquired by the Land Commission? I am not asking the noble Lord to answer these questions, because I know he cannot do so.
LORD KENNET: My Lords, I can.
LORD HENLEY: My Lords, if he can, I am very surprised indeed, because some of these questions have in fact been put to the Land Commission and they are unwilling to answer any of them. The only question I can think of at this time that the Land Commission have answered specifically is whether they will make public the number of offers they have had and the total acreage and, if not, whether they will also keep that information private from Government Departments. The only answer they gave to that was that they could not give any undertaking, which is a rather negative kind of answer.
The position is that the Land Commission feel that they are falling down on their job—or I suspect that they feel this. They are trying a tack which they
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have not tried before, of persuading landowners to sell white land to them voluntarily. They want to create a state of affairs in which they have a friendly relationship with landowners in order that they may do this, and in order that they may buy and sell land, as they suggest, to the advantage of all parties. But if they are going to do this, if they are going to attract landowners to accept this invitation to sell white land, preferably in blocks of 100 acres, then they will have to answer some of these inquiries a little more readily, otherwise I cannot see landowners selling them the blocks of land which they require.
All that the Commission have said is that in connection with managing their affairs they will adopt normal commercial practices, as would any other prudent investor. In other words, the Land Commission are going into business as ordinary land speculators. I am not sure that I see anything wrong in that. A great many people said on Second Reading that if this was going to work at all it could only work by the Land Commission becoming speculators, buying white land and holding it either until it became ripe for development or until they could persuade the planning authorities to make it so. That is as it may be, but I do not think it will make land any cheaper.
6.45 p.m.
LORD AIREDALE: My Lords, I wish to touch upon only one rather narrow aspect of this subject. The question I wish to ask is what effect will the Land Commission's betterment levy have on the conversion grant scheme on which the Government have shown themselves to be extremely keen? It is a scheme whereby land owners are being urged to convert buildings which are not at present houses into houses, and large grants are to be held out as an inducement to these land owners to do these conversions to provide houses. The Government are clearly in earnest about it. May I just quote two sentences from last year's Housing White Paper. Under the heading "General policy" on page 2, it says:
"Local authorities must take the lead and drive the policy forward in each town and district. Each authority will need to make up its mind to secure results."
So, my Lords, if this policy is pursued people will be offered grants, which I

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think are to be up to £1,000 a time, as inducements to convert buildings which are not at present houses into houses.
I have studied as best I can the booklet put out by the Ministry of Housing and Local Government called Betterment Levy: an Explanatory Memorandum. I would not call it exactly "a child's guide", but from understanding it as best I can it seems that in most of these cases, if not all, where a building which is not at present a house is converted into a house, betterment levy will be chargeable The question I wish to ask is this: at what stage, if any, is the applicant for a conversion grant going to be told that if he accepts it and does his conversion he will be caught for betterment levy? It will not, I think, be a very healthy state of affairs if large numbers of people accept grants of £1,000 and enter into conversion schemes, only to find that they are then caught for perhaps £1,200 a time for betterment levy. I do not know what the exact figures will be, of course, but what I suggest, in order that there will not be widespread disquiet about this matter, is that in every case where a local authority inform a developer that his application for a conversion grant is accepted they shall at the same time furnish him with a certificate which shall state the maximum amount which may be chargeable as betterment levy on that conversion, so that the developer will know exactly, from the outset, what his financial position is going to be as between receiving a generous grant of up to £1,000 on the one hand and being liable for betterment levy of I know not how much on the other hand.
I dare say I may be told by the Government this evening that all this can be discussed when the Housing Bill which is now before another place comes before us, but I hope that perhaps the Government's thoughts about this may be forthcoming this evening. After all, the Government wanted our thoughts about that present Housing Bill—that is why they published a White Paper about it last year—and therefore I hope that this matter will have been considered and that something may be said now, so that we shall be better prepared, when the Housing Bill comes before us, to deal with this rather narrow aspect of the betterment levy. Nevertheless, it is a very important one, in my submission, and one
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which, if it is not dealt with clearly and firmly, may cause a great deal of disquiet and annoyance as the conversion grant scheme develops.
6.50 p.m.
THE PARLIAMENTARY SECRETARY, MINISTRY OF HOUSING AND LOCAL GOVERNMENT (LORD KENNET): My Lords, may I take up as many of the questions as I can—so many questions have been raised, all of them useful, that I cannot be as short as I should wish to be. With regard to the question raised by the noble Earl, Lord Kinnoull, and my noble friend, Lord Silkin, of the de minimis provision, both noble Lords, I think, had forgotten that there is one in the Act. It is the famous 10 per cent. Development levy bites only on the development value. What is the development value? It is that which is not the existing use value. Existing use value is market value plus 10 per cent.
Lord Kinnoull asked about hardship cases and I think he mentioned the possibility of using Section 63 to alleviate individual hardship. The problem is that this power is not a power to give exemption in individual cases but is a general power if it becomes necessary to give exemption in any defined set of circumstances to a class of cases. The levy applies generally where development value is realised, and the Commission have no power, and Parliament gave them no power, to waive it because of the personal circumstances of the levy payer. While the working of the Act is under review it has to be accepted that it is not a personal tax—but a tax on realised development value, whoever realises it. If the operation of the levy reveals any general circumstances suggesting a change, the Government will consider them.
That is what happened over cases where the purchase had taken place in the interim period after the Land Commission White Paper. The Commission recommended changes in those circumstances and the Government have announced two rather far-ranging extra statutory concessions which will be put into legislation as soon as possible. These have dealt with the class of hardship cases arising from the famous absence of last transaction base value in the interim period. But where development value is realised in the ordinary case of a sale of

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land a profit has been made, so there is no question of exempting this profit from its due taxation in the form of this levy because of the personal circumstances of the levy payer. That is hard, but it is not unfamiliar in law.
THE EARL OF KINNOULL: My Lords, under Case "c" the property is not realised and therefore there is no profit in the hands of the vendor. I do not think the noble Lord covered that.
LORD KENNET: I hope and believe I am coming to that point. It is difficult to remember which is Case "c" and which Case "f". On the question of costs, there is an allowance for costs reasonably incurred in making any valuation or apportionment required in the levy calculation. Sales of land are now liable to levy on development value and to capital gains tax on increase in current use value. Conveyancing costs, as opposed to valuation costs, are allowed against capital gains tax. We did not make another allowance for conveyancing costs against land levy because this could have led to the same costs being allowed twice, and, in any case, there is the 10 per cent. upwards on the existing use value which I just mentioned, which not only is intended to be de minimis but also might be regarded as looking after the incidental costs not already allowed against the capital gains tax.
I was asked about the question of white land, and it is true, indeed, that in addition to acquiring land for early development—that is, land for which there is planning permission or for which the Commission can obtain planning permission—the Commission have decided, subject to the scope of their capital investment programme, to acquire for long-term holding areas of white land; that is, land not allocated for any particular use in a development plan. The success of this policy will depend on the Commission's ability to buy the land by agreement, since unless there is a planning permission for development the Commission's compulsory purchase powers are not available to them. I think this answers one of Lord Henley's major points. The Commission are thus seeking only to buy land offered to them or coming on to the market, and the Commission
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will exercise their own judgment as to the development potential in the land in the reasonably long term, say, seven to ten years. The Commission will not receive preferential treatement.
I come to the complaint of my noble friend, Lord Silkin, that the Minister does not uphold developers on appeal. It is absolutely impossible for me to answer that as a general charge. I should have to know what cases he had in mind. With regard to the question raised by Lord Airedale about conversion grants and improvement grants (I hope he will agree to my treating them together), the case he mentioned was of the conversion of something which is not a house into a house. That is a case which in circumstances set out in the Bill will attract levy because there is an increase in the development value and it is right that since that increase has been generated by the planning permission, and not by an act of the owner or developer, 40 per cent. of that increase should go to the community. What Lord Airedale was wrong about was in linking this matter to the Government's drive for conversion and improvement of urban property. I say urban property, but it could be anywhere. This drive is not for the conversion of barns or windmills or warehouses into dwellings; it is for the conversion of one large old Victorian house into two or more flats, and it is for the improvement of existing houses, many millions of which lack basic amenities up to decent modern standards. In those two cases, conversion of a dwelling into more than one dwelling and improvement of a dwelling to modern standards, no liability to levy arises.
LORD AIREDALE: If a developer gets a grant of £1,000 towards a conversion, will he not be told at the time that he will be liable for betterment levy? Will he be given an idea of how much the levy is going to be so that he may balance the £1,000 on the one hand against the levy on the other? He is entitled to know.
LORD KENNET: This is going to be a very small class of cases in the great improvement drive coming up. The conversion of your warehouse or mill is going to be very much a sideline, but I will go into it and write to the noble Lord. This is a welcome opportunity

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to correct a number of misconceptions which seem to be prevalent about this levy. They fall on opposite sides of the fence. One is that it is a tax designed only to tax the profits of the big land speculators with no application to the small man. The other opposite misconception is that it is an all pervasive levy on all transactions. I think I have made it clear that by means of the 10 per cent. de minimis provision it is not the latter. The levy means that anyone going in for land transactions or development of land must in future take into account the question of the levy and in making his calculations consider what his obligations will be just as he does in normal familiar taxation matters. He would in any case be needing professional advice when it is a question of transferring land, and it would be convenient to seek advice on the levy aspect at the same time. This is what people do, and what people should do.
It is of course a principle of the levy that it is not charged twice on the same increase in development value. The Act provides that the price paid for the land on a previous transaction can be used as a deduction in the assessment of levy, the so-called Schedule 5 base. This ensures that in the great majority of cases where a person buys land for the purpose of building a house for himself and pays the full market price for the land, he will have little or no levy to pay. The liability for levy normally arises only if he has paid a low price for the land, or has received it as a gift—as in some of the cases which have recently been given publicity. In these cases, despite appearances and the fact that the levy seems to have come as a surprise, because no money has in fact changed hands on the transfer of the land, and the levy is then asked for as a lump sum, the levy payer has to reflect that he is, in spite of everything, better off than if he had bought the land at the normal price. If he had paid the full market value for the land he would have paid the whole of the net development value in the price, and the vendor would be liable for levy. If he receives the land as a gift, he pays 40 per cent. of the net development value, and nothing else. This is a case which has given rise to a certain amount of Press comment recently.
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I should also say a word about the cases where the land was bought, during the interim period. This was the matter to which I referred earlier. Some of the cases which have been brought to the notice of my right honourable friend are those where the person called on to pay levy has sold his house and garden. In the average case of such a sale any profit made is in current use, and no question of development value, or, therefore, of development levy, arises. It is only if there is land adjoining the house—perhaps part of the garden—and this land possesses development value, that the question of levy arises.
We have heard of poor people and old-age pensioners, and of young couples with families, who thought they had made a good lump sum with which to pay for improvements on their house, or even for another house. I have already mentioned the exemption through the capital gains machinery for such a person to be exempt from tax on any profit on the sale of his house for continued use as a house, but this does not, of course, cover the sale of a garden, or part of a garden, on which planning permission has arisen and which therefore obtains development value and attracts levy. I am afraid that in the case of such a family, whether their means be small or great, there is an accrual of development value which is in no way due to the work or to the enterprise of that person. It is due to a decision by the community in giving planning permission, and it is as right in the case of a small man that he should pay 40 per cent. of the windfall as it is in the case of the large one.
I have spoken in general terms because I think, and I believe the House will agree, that it is undesirable to debate in detail the private financial affairs of individuals, and no noble Lord has sought to do so. To sum up this matter of the levy, I think the long and the short of it is that it surprises people; it hurts people; it gives rise to Press comment, much of it grossly politically slanted and unjustified, but not all of it. This cannot be avoided when Parliament imposes a new tax. It happened when income tax was first imposed; it happened when purchase tax was first imposed. When any new charge is first placed on the people it surprises them until they get used to it. One may have the greatest

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possible sympathy with those who are surprised. The Government must, and do, do all they can to inform people of the way the levy works, but I believe that in time, if this levy continues (and I note that the Opposition have no proposals to withdraw it), people will become as used to it as they have become to income tax, and it will just become part of the surrounding which is accepted as a basic act of social justice.
My Lords, I have not much more to say. I remember that on the Second Reading of the Bill which has become the Land Commission Act your Lordships showed nervousness that the compulsory powers provided in the Act would be irresponsibly used. But I think that any disappointment this House may feel at the extensive purchases by which the Commission can influence the price of land by bringing more on to the market must be tempered by the feeling that the Commission have not taken advantage of their powers by taking land indiscriminately, and I do not believe that they will do so.
More generally, on the price of land, the charge that the Land Commission have themselves caused the price of land to increase is, of course, totally unsustainable and is not supported by any evidence known to me. Because of the variability of land price it is not possible to estimate trends in such a short period as the Land Commission have been in operation, and even if it were possible to estimate trends in general over that short period it would be quite impossible to quantify the effect of the Land Commission's own operations on those trends. They have been small as yet, as the House knows. What can be said is that the average annual increase in the price of private house-building land in England and Wales has been far lower from the end of 1964 to the middle of 1968 than it was in the early '60s. The average price of public sector housing land showed a national increase from 1961 to 1966, since when it was fairly stable until the middle of 1968, the last date up to which it has been possible to assess it.
Of course, there will always be individual cases where a high and increased price is paid for land, and these are
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the ones which hit the Press. But it is quite wrong to base on these cases a general charge that land prices are showing a general substantial increase. In fact, as I have said, it was in the early '60s—when the Party of noble Lords opposite were in power—that land prices rose so substantially. The job of the Land Commission is to make land available for development while working within the planning system, so as to meet the danger that scarcity of land for development will otherwise lead to rises in price. The Opposition have not, that I have heard, any suggestion to offer as to how they can meet this risk better than the Land Commission are doing.
THE EARL OF KINNOULL: My Lords, I wonder whether the noble Lord could answer one question which I asked him. In another place the Minister undertook to look into all these cases of hardship, and the question I asked was: how many has he looked into, and what has been the result?
LORD KENNET: My Lords, I regret that I am not in a position to tell the noble Earl exactly how many cases have been looked into by the Minister, and how many not. It is only the duty, and indeed the natural impulse, of the Land Commission to look into them first, and I should expect the Land Commission to formulate the first recommendations for any changes which may be necessary in procedure and submit them to the Minister. The Minister, of course, keeps a watching brief on all that is going on.

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