Sitting of 6 May 1969

Preamble
The House met at half-past Two o'clock
PRAYERS
[Mr. SPEAKER in the Chair]
PETITION

  S. G. Brown, Ltd., Watford
  Mr. Raphael Tuck: With your permission, Mr. Speaker, and that of the House, I wish to present a Petition signed by employees, many of them highly-skilled technicians at S. G. Brown, Ltd., of Watford, makers of one of the finest gyroscopic compasses in the world, concerning the proposed closure of the S. G. Brown factory at Shakespeare Street, Watford.
  The Petition says that the closure
  . . would constitute a departure from the considerations laid down by Her Majesty's Government in 1959 as conditions precedent to the sale of the company by the Government.
  In 1944, when the company was taken over by the Government, it was worth £55,000 and by 1959, after making profit after profit, it was worth £1¼ million. When the Conservative Government then proposed to denationalise the company, against a storm—
  Mr. Speaker Mr. Speaker: Order. The hon. Gentleman must submit his Petition briefly.
  Mr. Tuck: With respect Mr. Speaker, when the Conservative Government proposed to denationalise the company, they gave an assurance that they would sell only to purchasers who could assure them of their ability to provide continuity employment of the same highly-skilled type.
  Unfortunately, after it was denationalised, it made loss after loss. Now, the parent company of Hawker Siddeley proposes to close the factory at Shakespeare Street, Watford, and transfer the work to Lostock, where there is slack. The Petition says that the closure
  … will cause widespread unemployment and deprive the nation of the valuable technical skills at present available in this industry.
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  It concludes:
  Wherefore your Petitioners pray that the Honourable The Commons of Great Britain and Northern Ireland will use every effort to avert the said proposed closure, by renationalisation, by urging the Industrial Re-organisation Corporation to give aid or by using any other means deemed suitable. And your Petitioners, as in duty bound, will ever pray.
  To lie upon the Table.

PRIVATE BUSINESS
  TEESSIDE CORPORATION BILL
  Lords Amendments considered and agreed to.
  RYDE CORPORATION BILL [Lords]
    SAINT MILDRED, BREAD STREET BILL [Lords]
    As amended, considered; to be read the Third time.
  NORTH EAST LINCOLNSHIRE WATER BILL (By Order)
  Read the Third time and passed.
  KIDDERMINSTER CORPORATION BILL [Lords] (By Order)
  Read a Second time and committed.
  GREATER LONDON COUNCIL (MONEY) BILL (By Order)
  Second Reading deferred till Tuesday next.
ORAL ANSWERS TO QUESTIONS

  ORAL ANSWERS TO QUESTIONS
  Sir G. Nabarro: On a point of order. Before we start Questions—
  Mr. Speaker: Order. I should be grateful if the hon. Gentleman would raise his point of order at the end of Question Time.

  HOUSING

    Mill Lane, Sandy (Planning Appeal)
    Mr. Hastingsasked the Minister of Housing and Local Government why he rejected the recommendation of his inspector on the appeal by Galliford

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    Estates Limited with regard to the density of houses to be permitted on an overspill development at Mill Lane, Sandy.
    The Joint Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. Arthur Skeffington): It is essential to make the best use of building land, and my right hon. Friend was satisfied that an increase in density from six houses to 10 houses an acre would not prevent the establishment of a balanced community. The appeal was rejected because the site merited a high standard of design and the proposed housing layout was not of a quality which my right hon. Friend could endorse.
    Mr. Hastings: Yes, but if the Minister wants to encourage overspill, as he presumably does, why, against his own inspector's advice, will be not pay attention to the considered views of the local authorities, both county and urban authorities, concerned? Is this not the way directly to discourage any other comparable small town from making a contribution of this kind?
    Mr. Skeffington: The hon. Gentleman may not fully understand the planning processes—
    Mr. Hastings: I understand them very well.
    Mr. Skeffington: The original decision here, which was taken by the local authority, was then examined at a public inquiry. Certain recommendations were made by the inspector. It is then my right hon. Friend's duty to evaluate those recommendations and come to his conclusions. That is what he has done in this case.
    Mr. Hastings: On a point of order. In view of the unsatisfactory nature of that reply, I beg to give notice that I will raise the matter on the Adjournment as soon as possible.

    New Houses
    Mr. Maddanasked the Minister of Housing and Local Government what is his latest estimate of the number of new houses on which work will be begun during the course of 1969.
    Mr. Graham Pageasked the Minister of Housing and Local Government
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    how many houses he now expects to be completed in the current year.
    Mr. Costainasked the Minister of Housing and Local Government what is his latest estimate of how the total of completed houses in 1969 will compare with the number of houses completed in 1968.
    Mr. Maddanasked the Minister of Housing and Local Government when he expects to announce a new house building target.
    Mr. Frank Allaunasked the Minister of Housing and Local Government (1) what is his latest estimate of the number of new houses on which work will be begun during the course of 1969;
    (2) how many houses he now expects to be completed in the current year.
    The Minister of Housing and Local Government (Mr. Anthony Greenwood): So far as a possible target is concerned, I have repeatedly made clear that I want to see the largest number of houses completed each year which economic circumstances will permit. The out-turn for 1969 will depend in large part on the success that the building societies have in attracting adequate mortgage finance. The results in the public sector in 1969 should not be very different from those in 1968. Overall, I do not expect any dramatic change in 1969 compared with 1968.
    Mr. Maddan: Will the right hon. Gentleman give his latest estimate of the number of new houses on which work will begin during 1969?
    Mr. Greenwood: No, Sir. The hon. Gentleman will be aware that it is unusual at this stage of the year to give a firm estimate of that kind. [HON. MEMBERS: "Answer."] I have made it perfectly clear that the outcome will be very much the same as last year. It will be about the same in the public sector, although it may be slightly down in the private sector.
    Mr. Page: How can the right hon. Gentleman say that the outcome will be about the same as last year when the number of starts is so very much down compared with last year? Why is he ensuring that there will be so many fewer houses when the demand is growing so

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    greatly? Does not this state of affairs finally dispel any faith one might have had in the promises by which the Labour Party came to power?
    Mr. Greenwood: No, Sir. It is true that the number of starts at the beginning of the year was a little disappointing, but there were a number of reasons for that. It was partly due to the weather, partly because of the effects of Ronan Point and partly because of the bunching of approvals in the last quarter.
    Some local authorities are dragging their feet. If hon. Gentlemen opposite would encourage local authorities to spend less time on trying to sell land and houses and more on increasing their new house building programmes, the situation would be even more satisfactory.
    Mr. Costain: Will not the Minister be frank with the House and admit that completions in the first quarter were 20 per cent. down and that mortgage advances were £70 million down on the same quarter of last year? Do not these figures indicate that we will not reach 400,000 new houses, let alone the 500,000 promised by hon. Gentlemen opposite at the last General Election?
    Mr. Greenwood: I know that the hon. Gentleman, like so many of his hon. Friends, is longing to take a gloomy view of the situation. The statistics do not confirm what they say, although, as I have said, it is too early in the year to be precise. The House will remember the bitter opposition from hon. Gentlemen opposite when building societies increased their interest rate to make more money available for the building of private houses.
    Mr. Allaun: What do the Government intend to do to stop Conservative-controlled councils from cutting down the number of houses being built? As I do not share the optimistic view of my right hon. Friend in this matter, may I ask him to say what additional emergency measures he intends to take in the private sector to ensure that the feared fall in the number of houses being built does not materialise this year and next year?
    Mr. Greenwood: In the private sector everything depends on there being an adequate inflow of money to the building societies. The latest statements from the building societies show that the reaction
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    to the interest rate increase has been rather more encouraging than might at first have seemed. The public sector is a matter which is the direct responsibility of the local authorities concerned; and no doubt my hon. Friends and members of the public will know exactly what action to take in this respect.
    Mr. Blenkinsop: Is my right hon. Friend aware that many thousands of families living in houses thank the Lord that we do not have a Tory Government?
    Mr. Peter Walker: Since the Minister is blaming everybody except the Government for the terrible decline in the house building programme, would not the right hon. Gentleman agree that as the Prime Minister made a firm pledge that the Government would build 500,000 houses a year by 1970 no matter what the circumstances, it would be appropriate for the Prime Minister to explain to the House why that pledge is being broken?
    Mr. Greenwood: Once again, the hon. Gentleman is somewhat out of date. [HON. MEMBERS: "Answer."] Although I enjoy listening to him regurgitating those old speeches, I am sure that he knows that a statement was made in the House in January, 1968, emphasising that the 500,000 target could not be reached because of devaluation. I repeat what I said earlier; that I do not see any drastic change in the situation this year.
    The answer to the supplementary question asked by my hon. Friend the Member for South Shields (Mr. Blenkinsop) is that by the end of this year 2 million houses will have been completed since the Labour Party came to power.
    Mr. Speedasked the Minister of Housing and Local Government what recent evidence he has received from the Federation of Registered Housebuilders regarding the expected state of trade in 1969; and what action he proposes to take in the light of that evidence.
    Mr. Greenwood: On 24th March, the Federation of Registered Housebuilders stated that their February, 1969, State of Trade Inquiry made it seem likely that no more houses would be started or completed in the private sector in 1969 than in 1968. I have regular discussions with the builders, building societies and local authorities about housing prospects, when

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    this and other evidence is brought under review.
    Mr. Speed: Does the right hon. Gentleman expect the number of private house completions this year to exceed the 1964 figure?
    Mr. Greenwood: The hon. Gentleman cannot have been here when we discussed this earlier at Question Time.
    Mr. Speed: I was.
    Mr. Greenwood: The point about the house Federation's inquiry is that it took place before the increase in building society interest rates and the situation has changed since then. This afternoon I am holding talks with the building societies, the builders and the local authorities, when I shall be in a position better to evaluate the results of the survey conducted in February.

    Direct Labour Department (Hammersmith)
    Mr. Costainasked the Minister of Housing and Local Government what report he has received from the District Auditor of the Metropolitan District regarding overspending on housing schemes in 1967–68 by the direct labour department of the London Borough of Hammersmith; and whether he will make a statement.
    The Joint Parliamentary Secretary to the Ministry of Housing and Local Government (Mr. James MacColl): In his interim report to the council on its 1966–67 accounts, the district auditor listed five schemes undertaken by the council's building department which had resulted in overspending during 1967–68. One scheme was for an old people's home; the rest for housing. Of these four schemes, three still showed savings compared with the next lowest tender. The fifth scheme was an ingenious, but untested, high density development which was authorised as a pilot scheme.
    Mr. Costain: Will not the Minister admit that this shows further expenditure totalling about £83,000? Would it not be wise to revise Circular 50/66 in relation to the whole question of instructions governing direct labour for local authorities?
    Mr. MacColl: The former Hammersmith council took immediate steps to
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    obtain advice on how to improve its direct labour department. Unfortunately the present council has not followed that advice and is not taking any steps to improve the department.

    Leasehold Reform Act
    Mr. Barnesasked the Minister of Housing and Local Government whether he is satisfied with the speed at which the machinery set up under the Leasehold Reform Act to enable leaseholders to acquire their freeholds is now working; and if he will make a statement.
    Mr. MacColl: As my hon. Friend will be aware, most cases are settled by agreement, between the parties. If there are delays in the handling of cases before the Lands Tribunal, I will gladly look into them, and if my hon. Friend has evidence of unwarrantable delays, I should be glad to have particulars.
    Mr. Barnes: Is my hon. Friend aware that many leaseholders are being told by their solicitors that it might take years for their cases to come before the Lands Tribunal and when they come before it they will probably gain very little because of the way decisions by the Tribunal appear to be going? Could he say why the Act does not appear to treat leasholders as favourably as it was originally claimed it would?
    Mr. McColl: There have been only two decisions so far. As I have said in answer to my hon. Friend, if he will produce particular cases in which there is delay my right hon. Friend will certainly see what he can do to improve the position.
    Mr. Roy Hughes: Does my hon. Friend appreciate that there is much dissatisfaction with the operation of this Act in Wales and that many leaseholders are reluctant to go to the Lands Tribunal because recent decisions tend to give the impression that the dice is loaded in favour of the freeholder? Therefore, will he take an early opportunity to amend the Act and to introduce proposals to swing the balance back in favour of the leaseholder?
    Mr. McColl: My right hon. Friend is aware of the feeling on this matter. He is looking into it to see if anything, and what, could be done to improve the position.

    New Towns (House Purchase)
    Mr. Allasonasked the Minister of Housing and Local Government what progress has been made towards the goal of 50 per cent. owner-occupation in new towns.
    The Minister for Planning and Land (Mr. Kenneth Robinson): I would refer the hon. Member to the reply I gave him on 24th April. As far as new building is concerned, builders are showing an increasing interest in the opportunities offered in new towns.—[Vol. 782, c. 120–21.]
    Mr. Allason: Does the Minister realise that in London new towns, apart from Bracknell where 100 per cent. of the rented houses are available for sale, only 6 per cent. in the remaining new town are available for sale? How can he achieve 50 per cent. home ownership if only 6 per cent. are available for sale?
    Mr. Robinson: As the hon. Member knows, this is a relatively new policy and London new towns for the most part were first generation new towns. They are anxious to move in the direction that the policy announcement indicates and the question of sale of their houses is under discussion between them and the Department.

    Greater London Council Houses (Rents)
    Mr. Rossiasked the Minister of Housing and Local Government what representations have been made to him by the Greater London Council on the effect on London ratepayers of his decision to reject the council's proposals for altering the structure of council house rents; and what reply he has sent.
    Mr. Greenwood: On 24th April the council sent me a letter, advancing a number of arguments and asking for a meeting to discuss them. I have arranged to meet the council next week.
    Mr. Rossi: I am grateful for that reply. Is the right hon. Gentleman prepared to allow the local authority to proceed according to the mandate it has received from the people who elected it?
    Mr. Greenwood: I have to operate within the terms of the Prices and Incomes Act which give me power to intervene in cases of this kind. I proposed a
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    method of dealing with the situation facing the G.L.C. which I believed would avoid rent increases.
    Mr. Frederic Harris: Is it not grossly unfair to ratepayers in Croydon, who were pushed into London, that they have to pay more rates to the G.L.C. merely because economic rents are not being charged by the G.L.C.?
    Mr. Greenwood: Croydon ratepayers were pushed into London by the Conservative Government. There is no question of an increased burden on the rates. I suggested to the G.L.C. that a greater amount of capital expenditure should be charged to loan. At the moment, the proportion of G.L.C. expenditure which is met from revenue is exceptionally high. I am absolutely convinced that the method which I have proposed to the G.L.C. will avoid both an increase in rents and any burden on the ratepayers.
    Mr. Whitaker: Did not a report yesterday show that for many years Kensington Council has failed to discharge its housing responsibilities for Notting Hill? Therefore, is not central Government initiative essential, and should not a much more comprehensive attack be made on the problems of urban renewal?
    Mr. Greenwood: My hon. Friend will agree that that goes very wide of the Question.
    Mr. Peter Walker: Does the right hon. Gentleman suggest to the G.L.C. that rent increases should be deferred and that loans should be taken at what would be, as a result of Government policy, a penal rate of interest?
    Mr. Greenwood: That is one of the propositions which have been put to the House in the past and which has been approved by the House. In this case, it is open to the council to decide which course to adopt in order to avoid rent increases. If it decides to put up the rates, unnecesarily in my view, that is its decision and not mine.

    Subsidies and Costs
    Sir B. Rhys Williamsasked the Minister of Housing and Local Government (1) what is the subsidy available to a head of household earning £22 a week and buying his house through the option mortgage scheme; and what is

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    the average subsidy provided in respect of an average family with the same income in a newly built council house, expressed in weekly terms;
    (2) what is the annual total outgoing required to service the cost of the average new council house; and what proportions of it are met at current interest rates by, respectively, the Exchequer, the tenant, the contribution from rates and the profit accruing from letting older properties.
    Mr. MacColl: It is impossible to give a valid comparison between the two subsidies in the terms laid out by the hon. Member because the Question starts from an erroneous assumption, that Exchequer subsidy is calculated on the householder's income. For a general assessment of the relative cost, both on average and in total, of housing subsidy and mortgage interest relief, I would refer him to the two replies given by my right hon. Friend the Minister for Planning and Land on 20th December last to my hon. Friend the Member for Manchester, Wythenshawe (Mr. Alfred Morris).—[Vol. 775, c. 510–11.]
    Sir B. Rhys WilliamsWould it not be better to subsidise the families and not the houses? Does this way of spending public money provide a fair basis of competition with private enterprise?
    Mr. MacColl: My right hon. Friend has always encouraged, and continues to encourage, local authorities to use their subsidy by a rebate scheme to help families who need assistance most.

    Land
    Mr. Allasonasked the Minister of Housing and Local Government how many acres of land have been sold for housing by the Land Commission; and what was the average price per acre.
    Mr. K. Robinson: 2·2 acres; £13,423.
    Mr. Allason: Does that include the case at Mudeford, near Christchurch, where 1½ acres were sold for £48,000? Is the Minister satisfied that the Land Commission is providing land for housing at reasonable costs, which was promised as a result of the Land Commission Act?
    Mr. Robinson: According to my list, the site to which the hon. Gentleman
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    referred is not included. I am well satisfied that when the acquisition and sale policy gets into its stride, which I hope will be in the current year, the Land Commission will be able to provide land for housing at reasonable prices.
    Mr. Graham Page: But the Commission has been in operation for just over two years. The great justification for it was that it would bring forward land for housing. It has brought forward only 2·2 acres over two years. Is it not time to abolish it?
    Mr. Robinson: The hon. Gentleman, with his political and professional experience, knows perfectly well that land acquisition is a very long-winded process. Furthermore, the reason why the start has been slower than we hoped has been explained on a number of occasions by me in our many recent debates on the Land Commission.

    Council House Programme, Sevenoaks
    Sir J. Rodgersasked the Minister of Housing and Local Government what were the reasons which led him to curtail the size of the council housing programme of the Sevenoaks Rural District Council.
    Mr. MacColl: The Council was allowed to proceed with its programme after it had fully explained the case for two additional schemes.
    Sir J. Rodgers: Is the hon. Gentleman aware that there is a great shortage of land for building purposes since most of the area available to the local council is in the Metropolitan green belt? Will he use his good offices with the G.L.C., which has 800 houses in the area, to see whether, when any of these houses fall vacant, they cannot be given to people who have grown up on the G.L.C. estate and have then got married instead of these people having to go on the rural district council's housing list?
    Mr. MacColl: I know that there are problems in relation to the overspill, but I am sure that the G.L.C. and the local authority will co-operate. My right hon. Friend will do his best to facilitate such co-operation.

  LOCAL GOVERNMENT

    Planning Policy (South-East)
    Mr. Hastingsasked the Minister of Housing and Local Government whether he will make a statement on future planning policy in the South-East.
    Mr. K. Robinson: This must await completion of the comprehensive planning study of the South-East now being undertaken by a joint central and local government team led by the Ministry's chief planner.
    Mr. Hastings: Is it not discouraging to those who worked so hard to produce the South-East Study to find that there is to be this further delay? Will it now be possible to have a co-ordinated study of the South-East before a decision is made about the siting of a third London Airport either at Foulness or at an inland site?
    Mr. Robinson: The answer to the first part of the hon. Gentleman's supplementary question is that it was generally agreed that this further study was necessary. I hope that it will be completed by the spring of next year.
    The answer to the second part is that all considerations concerning a third London airport will be taken into account by those conducting the study. I do not believe that this problem in any way invalidates their work.
    Mr. Gwilym Roberts: Does my right hon. Friend appreciate the urgency of this matter in view of the complex housing, industrial, airport and other problems which are becoming ever more pressing in this part of the country?
    Mr. Robinson: Yes, Sir. We recognise the urgency of the matter, but it is most important to get the right answers. For this reason a team has been appointed; and it is getting on with the job as fast as possible.

    Rent Reorganisation schemes
    Mr. Murtonasked the Minister of Housing and Local Government if he will list in the OFFICIAL REPORT those local authorities whose proposed rent reorganisation schemes have been rejected by him.
    Mr. K. Robinson: Under the Prices and Incomes Act, 1968, 172 local authorities have submitted 183 proposals for rent increases to which my right hon. Friend has been unable to agree. I will, with permission, circulate a list in the OFFICIAL REPORT.
    Mr. Murton: I am delighted that the right hon. Gentleman intends to publish the list. Would he agree that it will give ratepayers fair warning that the only alternative to reorganised rent schemes is the inevitability of higher rates next year?
    Mr. Robinson: No, Sir. I emphatically reject that suggestion. [Interruption.] Most of the authorities had obvious scope for breaking down balances or, in a few cases, for restricting capital expenditure to revenue. Except in a few cases, we have not expected authorities to increase their rate fund contributions. We have done so only where there was no other way of keeping their rent increases within the limits set by the Prices and Incomes Board.

    Greater London Council

    County Boroughs

    Darwen.

    Bath.

    Devizes.

    Blackburn.

    Dorchester.

    Gateshead.

    Dover.

    Leeds.

    Durham.

    Leicester.

    Eastleigh.

    Liverpool.

    Ellesmere Port

    Manchester.

    Falmouth.

    Norwich.

    Folkestone.

    Southend.

    Gravesend.

    Wallasey.

    Kidderminster.

    Warrington.

    Launceston.

    London Boroughs

    Leamington Spa.

    Bromley.

    Leigh.

    Enfield.

    Macclesfield.

    Haringey.

    Newbury.

    Hillingdon.

    New Sarum.

    Kensington and Chelsea.

    New Windsor.

    Nuneaton.

    Lambeth.

    Penzance.

    Merton.

    Pontefract.

    Westminster.

    Rochester.

    Boroughs

    Stalybridge.

    Andover.

    Spenborough.

    Appleby.

    Stourbridge.

    Barnstaple.

    Thetford.

    Bodmin.

    Wokingham.

    Boston.

    Urban Districts

    Brackley.

    Aldridge-Brown-hills.

    Calne.

    Chichester.

    Audenshaw.

    Chipping Norton.

    Bicester.

    Christchurch.

    Biddulph.

    Colne.

    Bingley.

    Crewe.

    Bourne.

    Crosby.

    Bradford-on-Avon.

    Urban Districts—cont.

    Brixworth.

    Brandon and Byshottles.

    Buckingham.

    Bullingdon.

    Chesham.

    Calne and Chippenham.

    Coalville.

    Dalton-in-Furness.

    Chanctonbury.

    Darton.

    Chesterfield.

    Dawlish.

    Chorley.

    Denton.

    Cockermouth.

    East Grinstead.

    Darlington.

    Formby.

    Daventry.

    Fulwood.

    Docking.

    Gosforth.

    Downham.

    Heanor.

    Elham.

    Hitchin.

    Epping and Ongar.

    Ince-in-Makerfield.

    Erpingham.

    Leighton-Linslade.

    Forehoe and Henstead.

    Leyland.

    Littleborough.

    Fylde.

    Littlehampton.

    Godstons.

    Meltham.

    Guildford.

    Newport Pagnell.

    Kirkbymoorside.

    Norton-Radstock.

    Launceston.

    Otley.

    Ledbury.

    Portslade.

    Leominster and Wigmore.

    Rainford.

    Redditch.

    Lichfield.

    Shoreham-by-Sea.

    Liskeard.

    Spalding.

    Macclesfield.

    Stocksbridge.

    Malling.

    Sutton-in-Ashfield.

    Marlborough and Ramsey.

    Swaffham.

    Teignmouth.

    Mildenhall.

    Thame.

    Nantwich.

    Trowbridge.

    Newark.

    Turton.

    Newbury.

    Ventnor.

    Newton Abbot.

    Wellingborough.

    Norman Cross.

    Wellington (Salop).

    North Cotswold.

    Welwyn Garden City.

    North Kesteven.

    North Shropshire.

    Whickham.

    Pickering.

    Whitstable.

    Romsey and Stockbridge.

    Wimborne Minster.

    Wirral.

    St. Ives (Hunts.).

    Woking.

    Sodbury.

    Rural Districts

    South East Derbyshire.

    Alsfon with Garrigill.

    South Kesteven.

    Axminster.

    Southwell.

    Aysgarth.

    Stokesley.

    Barnstaple.

    Strood.

    Barrow-upon-Soar.

    Tadcaster.

    Battle.

    Torrinston.

    Blackwell.

    Watford.

    Blofield and Flegg.

    Wharfedale.

    Bradfield.

    Winchester.

    Bridgnorth.

    Yeovil.

    Refuse Disposal
    Mr. Gwilym Robertsasked the Minister of Housing and Local Government if he will take steps to set up a National Refuse Corporation aimed at co-ordinating the recovery of household refuse, rubber tyres, scrap, mining tips, and other forms of refuse; and what studies have been made of the uses of various forms of refuse and the economies to be achieved by their recovery.
    Mr. Skeffington: I will send my hon. Friend available information about past studies. The working party on refuse disposal, which my right hon. Friend set up in 1967, is now making a broad study which covers the question of recovery. In the meantime I do not think that the setting up of a centralised body in this field is desirable.
    Mr. Roberts: Would not my hon. Friend agree that the present haphazard method of collecting industrial and household refuse is a national scandal? Is he aware that if waste were collected and retrieved on an organised national scale there would be a saving of many millions of £s to the economy?
    Mr. Skeffington: I am well aware that considerable improvement could and should be made in many parts of the country. For this reason my right hon. Friend has set up a working party.
    Sir Knox Cunningham: Is the hon. Gentleman's right hon. Friend opposed to dustmen selling direct?

    Royal Commission on Local Government in England
    Mr. Lubbockasked the Minister of Housing and Local Government when the Report of the Royal Commission on Local Government in England will be published.
    Mr. Greenwood: I understand that the Commission's Report will be published soon after Whitsun.
    Mr. Lubbock: Is the right hon. Gentleman aware that reports are appearing with great regularity in the Press purporting to describe what is in the Maud Committee's Report? Considering the embarrassment that this must be causing to his Ministry, will he take steps with the Stationery Office to expedite the printing of the Report so that we shall know what is actually in it and not what is alleged to be in it?
    Mr. Greenwood: I share the anxiety of the hon. Member about the reports which may or may not be correct, which I know create an atmosphere of uncertainty. The actual machinery for publication of the Report is under the direction of the Royal Commission itself. We have emphasised to the Stationery Office the

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    need for ensuring that there is no unnecessary delay in publication. I believe that immediately after Whitsuntide is the earliest date when this will be possible.

    Multi-Occupied Houses (Fire Risks)
    Miss Lestorasked the Minister of Housing and Local Government whether he is satisfied that local authorities are fully using the powers given to them by his Regulations to avoid fire risk in houses in multiple occupation; and if he will make a statement.
    Mr. MacColl: I believe that local authorities in general make good use where necessary of their powers to require means of escape in multi-occupied houses. Provisions in the Housing Bill will add to these powers and make it the duty of local authorities to inspect their districts to see whether action is necessary. I will gladly consider carefully any cases of which my hon. Friend may know where it appears that effective use of the powers is not being made.
    Miss Lestor: May I thank my hon. Friend for that reply and say how pleased I am that this matter is being looked into? Does my hon. Friend agree that we cannot afford to be complacent about it? Is not one of the things which need attention, particularly in houses in multiple occupation, the inappropriate means of heating often used that cause some of these fires and the lack of means of escape, as we know by the deaths of children and people who cannot jump to get out of a building? Is this not a matter that needs looking into?
    Mr. MacColl: The Housing Bill deals with means of escape from fire. On the general question of fire protection, my right hon. Friend the Home Secretary has a working party looking into this matter.
    Sir G. Nabarro: Does the hon. Gentleman recall that in 1960 a number of children were burned to death because of faulty oil heaters at Ware in Hertfordshire, and that there was an exact reproduction of that case in Birmingham in the week before last when a number of children were burned to death due to a faulty oil heater? Is not amending legislation required to raise standards of
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    efficiency for all portable and mobile heaters used in multi-occupied houses?
    Mr. Manuel: Any houses.
    Mr. MacColl: I have sympathy with what the hon. Member has said. As to the immediate Housing Bill, which is the responsibility of the Minister, means of escape from fire are being considered to see whether they can be improved, especially in regard to enforcement and inspection.

    Mexborough and Swinton (Swimming Baths)
    Mr. Edwin Wainwrightasked the Minister of Housing and Local Government, in view of the fact that there are no swimming facilities for the children in the Mexborough and Swinton Urban District Council's areas, if he will make a financial grant to both these authorities so that swimming baths can be provided.
    Mr. Skeffington: This type of expenditure attracts rate support grant. My right hon. Friend has no power to make a specific grant.
    Mr. Wainwright: Does not my hon. Friend realise that a great many lives are lost, especially in summertime, because children are not able to swim? Is he aware not only that these two local authorities cannot provide facilities, but that neither can many others? Will he do something to make sure that close to their homes children have facilities to learn to swim?
    Mr. Skeffington: There are a large number of schemes coming forward all the time for the provision of swimming baths, and permission is being given for these as rapidly as possible in accordance with the resources available. If the officials of the two authorities mentioned by my hon. Friend would like to consult my Department, we would be pleased to help in any way we can.

    Valuation Practices
    Mr. Iremongerasked the Minister of Housing and Local Government whether, in view of the obiter dicta in the Court of Appeal in the case of Young versus Greater London Council, he will send a circular to dissuade local authorities which use their own employees for

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    valuing property which they acquire compulsorily from presenting evidence to the courts in such a way as to minimise the compensation payable; and if he will seek powers to control the valuation practices of local authorities.
    Mr. K. Robinson: No, Sir.
    Mr. Iremonger: Has the right hon. Gentleman not read the judgment and seen that this Machiavellian intrigue was described by Lord Justice Russell as having as its sole purpose to ensure that private citizens should secure the minimum compensation possible?
    Mr. Robinson: It is not the first time that the hon. Member has sought under the cloak of Parliamentary privilege to question the professional integrity of the Greater London Council's valuers. I have read the account of the case and it is certainly my view, whatever the hon. Member may say, that it is not at all clear that the court found any fault with the council's actions. The court found in favour of the council.
    Mr. Iremonger: On a point of order. In view of the unsatisfactory nature of the reply, I beg to give notice that I shall raise the matter on the Adjournment.

    Bessacarr Caravan Company (Buildings)
    Mr. Edwin Wainwrightasked the Minister of Housing and Local Government if, in view of the high rate of unemployment in the Mexborough Employment Exchange Area, he will reconsider his decision not to grant planning permission to the Bessacarr Caravans Company to erect additional buildings which are required for the completion and the storage of caravans, which are being built for exports.
    Mr. MacColl: My right hon. Friend has no power to change a decision on an appeal once it is issued.
    Mr. Wainwright: Does my hon. Friend realise that that decision was one of the most foolish I have ever known? Is he aware that this area is an old coal-mine tip and that this company wanted to erect buildings to provide accommodation for its completed caravans, which would not mean any additional area for the company? Will he have another look at the problem, as there is high unemploy-
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    ment in the area and something must be done in a matter of this kind?
    Mr. MacColl: I know that many planning decisions create a feeling of hardship and difficulty for the people concerned, but my right hon. Friend has a duty to consider the findings of the report of his inspector and to come to a decision which he thinks right.

    Betterment Levy
    Mr. Cleggasked the Minister of Housing and Local Government what plans he now has for exercising his powers under the Land Commission Act, 1967, for exempting certain transactions from the betterment levy.
    Mr. Rossiasked the Minister of Housing and Local Government what consultations he has had with the Chairman of the Land Commission about changes in the operation of the betterment levy; and what has been the result of the discussions.
    Mr. Kitsonasked the Minister of Housing and Local Government whether he will take steps to ensure that betterment levy is not payable in cases where no actual profits have been made.
    Mr. Biggs-Davisonasked the Minister of Housing and Local Government whether he will declare a moratorium, by legislation or otherwise, on the payment of betterment levy under the Land Commission Act.
    Mr. K. Robinson: The Government's proposals for modifications to the betterment levy were set out in the White Paper published on 15th April and proposals for legislation are included in the Finance Bill.
    Mr. Clegg: That is not an unexpected reply. Would the Minister note that, unless he makes the concession retrospective, he will leave a legacy of bitterness among those suffering under the Act?
    Mr. Robinson: I dealt with this matter, as far as I was able to make myself heard, in the debate on 28th April.
    Mr. Rossi: Does the right hon. Gentleman agree or disagree with Sir Henry Wells, the Chairman of the Land Commission, that it is possible administratively to pay back to people what has

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    wrongly been taken from them under a totally bad law?
    Mr. Robinson: That is not what Sir Henry Wells said. All that he said was that, as far as the Land Commission was concerned, although there would be administrative difficulties, they would not be insuperable. But it is not the question of administrative difficulties which has led to the Government's decision, nor are the difficulties confined to the Commission. There are even more serious administrative difficulties for the Inland Revenue.
    Mr. Kitson: Is the Minister aware that he has not satisfactorily answered my Question? Is it not absolutely absurd to charge a betterment levy when no profits have been taken?
    Mr. Robinson: No; it would be much more profitable to discuss these matters in detail, as we shall soon have the opportunity of doing, on the Finance Bill.
    Mr. Biggs-Davison: Have not the Government's concessions created new injustices? Therefore, will the Government suspend the levy retrospectively until a Conservative Administration, pledged to its abolition, can clear up the mess?
    Mr. Robinson: No, Sir.
    Mr. Spriggs: Is my right hon. Friend aware that we believe that he should give careful consideration to certain cases, especially when it has taken a long time to obtain planning permission? I am thinking of a case in which planning permission took two years. The betterment levy has been charged since the Act came into force. Would my right hon. Friend have another look at cases like the one I have in mind?
    Mr. Robinson: I have looked at one or two cases like that. Whether I have looked at the one to which my hon. Friend refers, I am not sure. If he would write to me about it, I will consider it.

    Direct Labour Departments (Report)
    Mr. Murtonasked the Minister of Housing and Local Government whether he has yet received the Lloyd Thomas report on financial and management con-
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    trol in local authority direct labour departments; and when he proposes to publish it.
    Mr. Greenwood: I have received the report and a meeting has been arranged with the local authority associations to discuss arrangements for publication.
    I should like to take this opportunity of thanking the members of the working party for their services.
    Mr. Murton: Why did the Minister find it necessary in 1965 to abolish restraints on direct labour and two-and-a-half years later form a working party to try to make direct labour more efficient? Does he recollect that on 18th February he said that the report would be ready within a matter of weeks? Eleven weeks have elapsed and the House is still awaiting it?
    Mr. Greenwood: Eleven weeks is a matter of weeks. I was not Minister of Housing and Local Government in 1965. When a matter is the subject of public debate, it is right that informed opinion should be available so that members of the public can make up their minds. I am a strong believer in direct labour departments, but I believe it essential that they should operate at the maximum pitch of efficiency.
    Dr. Gray: I congratulate my right hon. Friend on criticising the Great Yarmouth County Borough Council for turning down the lowest tender which came from its direct labour department and choosing a private contractor in its place. Will he send instructions to all councils throughout the country to ensure that this kind of thing does not happen and he is not forced to intervene in this way in many other places?
    Mr. Greenwood: My hon. Friend will understand that I have not power to do as he wishes, but I have no doubt that what he has said will be widely noted.

    District Heating Schemes
    Mr. Gwilym Robertsasked the Minister of Housing and Local Government if he will circulate local authorities and new town corporations on the use of district heating schemes to cover whole towns or large sections of towns and advise these authorities on the use of household refuse as a major fuel for such district heating schemes.
    Mr. MacColl: The Departments concerned are currently examining the future possibilities of district heating, including the use of refuse as a fuel particularly in the context of major new developments. At present, therefore, my right hon. Friend is not in a position to issue general guidance on the subject.
    Mr. Roberts: Will my hon. Friend urgently consider what further steps could be taken, in conjunction with the Ministry of Power, to encourage district heating in general and district heating based on refuse in particular? Will he at least ensure that new town authorities introduce district heating schemes based on some type of refuse usage?
    Mr. MacColl: The possibility of using district heating schemes at Milton Keynes and Northampton will be considered by my Department and the corporation.
    Mr. Lubbock: Is the hon. Gentleman aware that a large number of local authorities are introducing provisions to give themselves power for district heating in Private Bills during the present Session and that there will probably be an even bigger queue next year? Will he consider introducing national legislation so that we can have a uniform framework for adequate protection of the rights of the consumer?
    Mr. MacColl: The attitude of the House towards this legislation and the experience under it if it is passed will be valuable assistance in achieving effective national legislation.

    Land Commission
    Mr. Goodhewasked the Minister of Housing and Local Government what representations have been made to him to the latest convenient date about the operation of the Land Commission; and what reply he has sent.
    Mr. K. Robinson: I have had a number of representations from hon. Members and from the general public, to which I have sent appropriate replies. There have been seven debates on the Land Commission this year and a White Paper was issued on 15th April on "Modifications in Betterment Levy".
    Mr. Goodhew: Since the right hon. Gentleman has acknowledged that this is a very unjust business, why is he being
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    so "wet" about it now? Why not be as strong as the Secretary of State for Social Services was yesterday when he faced the facts of the situation and went back on previous policy? Will the right hon. Gentleman not indulge in some retrospective legislation in this case?
    Mr. Robinson: Since I have not acknowledged what the hon. Gentleman has alleged that I have acknowledged, the second part of his supplementary question regarding my humidity does not therefore arise.
    Mr. Hooley: Is my right hon. Friend aware that attempts to abate levies and taxation on totally unearned increments of wealth and property of this kind would be unwelcome to this side of the House?

    Beaches (Removal of Sand)
    Mr. Milneasked the Minister of Housing and Local Government what action he intends taking to assist the Civic Trust, local authorities and other bodies in their efforts to prevent the spoilation of beaches by the removal of sand.
    Mr. Sheffington: The Coast Protection Act enables maritime local authorities to submit for my right hon. Friend's confirmation orders prohibiting the excavation of materials from the seashore to protect the coast against sea erosion. In addition, the removal of sand from a beach without planning permission constitutes an offence. These powers appear adequate and it is not thought that further special action is requires.
    Mr. Milne: Is my hon. Friend aware that the private ownership of some beaches in Northumberland is leading to the removal of an excessive amount of earth and sand? It is no use letting this situation go on at the same time as the Government are paying grants to beautify the area.
    Mr. Skeffington: This is the sort of case where the local authority will have considered a revocation order. If my hon. Friend will get in touch with us about this we shall be glad to give such advice as we can.
    Mr. Thorpe: In view of the consideration raised by the hon. Member for Blyth (Mr. Milne), and other equally vital considerations, is there not a strong case for seeing that all beaches, whether at high

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    or low water mark, are brought into public ownership?
    Mr. Skeffington: There is a case for moving along the lines of the suggestion by the right hon. Member for Devon, North (Mr. Thorpe). In fact, this was part, although only part, of the matters investigated by the Maritime Conference.

  EDUCATION AND SCIENCE (SECRETARY OF STATE'S SPEECH)
  Mr. Evelyn Kingasked the Prime Minister whether the public speech of the Secretary of State for Education and Science on education policies delivered to the National Union of Teachers on Tuesday, 8th April represents the policy of Her Majesty's Government.
  Mr. Christopher Priceasked the Prime Minister whether the public speech of the Secretary of State for Education and Science on education policies to the National Union of Teachers at Douglas on 8th April represents the policy of Her Majesty's Government.
  The Prime Minister (Mr. Harold Wilson): As I have already said in reply to a Question by the hon. Member for Mid-Bedfordshire (Mr. Hastings) on 1st May, "Yes, Sir".—[Vol. 782, c. 274.]
  Mr. King: When the Secretary of State describes the expression of quite moderate opinion by eminent thinkers such as Kingsley Amis and the Warden of All Souls' as the "blackest day in education for 100 years", does not this sound a little unbalanced? Does the Prime Minister think that intellectual argument is assisted by Ministerial hysterics of that kind?
  The Prime Minister: What the hon. Gentleman regards as a moderate statement and what the rest of us regard as moderate are not exactly the same. The paper which was castigated by my right hon. Friend is a document calling into question all the advances in education policy—[Interruption.]
  Mr. Speaker: Order. This is on an educational topic.
  The Prime Minister—carried through right hon. Friend with the support Front Bench opposite, and if the
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  hon. Member for Dorset, South (Mr. King) does not agree with those advances the fault obviously lies in him.
  Mr. Price: Is my right hon. Friend aware that the Opposition are so split and squabbling—[Interruption.]
  Mr. Speaker: Order. Back to education, please.
  Mr. Price: Is my right hon. Friend aware that the split in the Opposition is so serious on this issue that it would be a disaster if they were ever to have responsibility for education again? Is he further aware that so far from these being moderate opinions in the "black paper", they would undo all the solid progress made in education since the war?
  The Prime Minister: I agree. I think that perhaps the reason why the Opposition have not had one or two little local problems such as we have had in the last few days is that they are a one-man band—and he sits on the back benches giving his orders to the Front Bench. I am not clear, in relation to education policy, whether the Front Bench opposite agree with this so called "black paper". If they do, they could take an early Supply Day, give us their views, set them against ours and let us have a confrontation on it.
  Mr. Longden: Why does the Prime Minister describe these as advances in education when every reasonable and balanced person, whether or not they agree with them, knows that they are experiments in education, which have yet to be proved?
  The Prime Minister: Because I totally reject, as my right hon. Friend did in the speech which is the subject of this Question, the attitudes and arguments used in in this so-called "black paper" about the whole liberal progress in education, carried forward for over 20 years now. Incidentally, the right hon. Member for Birmingham, Handsworth (Sir E. Boyle) and the right hon. and learned Member for St. Marylebone (Mr. Hogg) made their contributions to this. I reject totally the reactionary character of this paper which appears to be supported by some back benchers opposite. Whether it is supported by the Front Bench opposite, I suppose we shall never know.
  Mr. Simon Mahon: Is my right hon. Friend aware that speeches of his right hon. Friend in another context in recent days, namely, those relating to voluntary schools and religious education in schools, have been much appreciated in many parts of the country? May we take it from the Prime Minister that this is to be the continuing policy of the Government?
  The Prime Minister: As my right hon. Friend has made clear, there is to be no change in the policy, either as regards the present position, which has been agreed by all parties, of voluntary schools or about the position of religious education in the school system as a whole.
  Mr. Heath: The Prime Minister once declared in a famous phrase on a great occasion that the grammar schools would be abolished over his dead body. Does he realise, amidst his "little local difficulties", that it is the Secretary of State for Education and Science who holds the assassin's dagger?
  The Prime Minister: If there was one thing which was predictable it was that we would get that supplementary question and the right hon. Gentleman has been anticipated by 36 of his brighter back benchers in putting it on the Order Paper. The answer is that, at the time I said that what we shall do—[HON. MEMBERS: "Oh."] The right hon. Gentleman is talking about what I said in 1963. I said that what we shall do is to extend—[Interruption.]—grammar school education—
  Mr. Speaker: Order. Hon Gentlemen must listen to each other.
  The Prime Minister: At that time I said what we shall do is to extend grammar school education to everyone, through the comprehensive system. [HON. MEMBERS: "Oh."] If the right hon. Gentleman's policy is to maintain 11-plus selection, let him get up and say so.
  Mr. Shinwell: Is my right hon. Friend aware that when I listen to the other side I wonder what is the use of education?
  The Prime Minister: My right hon. Friend is entitled to wonder. What we are concerned to do is to get a system of education for everyone, not on the basis of future Cabinets half of whom went to one single school.
  Hon. Members: Cheap.
  Mr. Speaker: Noise wastes valuable Question time.
  Mr. King: On a point of order. In view of the unsatisfactory nature of the Prime Minister's wriggle, I beg to give notice that I shall seek leave to raise this matter on the Adjournment at the earliest opportunity.

  PARIS (VISIT BY PRIME MINISTER)
  Mr. Henigasked the Prime Minister if he will make an official visit to Paris in the near future.
  Mr. Eldon Griffithsasked the Prime Minister what plans he has to pay an official visit to Paris.
  Mr. Edward M. Taylorasked the Prime Minister if he will arrange an early meeting with the President of France to discuss matters of mutual interest and if he will make a statement.
  Mr. Winnickasked the Prime Minister if he will make an official visit to Paris in the near future.
  The Prime Minister: I have no immediate plans to do so, Sir.
  Mr. Henig: Would my right hon. Friend place high on his agenda, some time during July when the new French President will have been elected, a meeting with his opposite number? Will he start afresh? [Interruption.] Does he not think that this is a good moment to reaffirm the fact that the—[Interruption.]
  Mr. Speaker: Order. Last week the Opposition complained of noise during Question Time from the Government. We must be fair to each other and listen to each other.
  Mr. Henig: Does my right hon. Friend not think that this would be a good moment to reaffirm that, in the view of Her Majesty's Government, Britain's political and economic future lies in our rapid entry into the European Economic Community?
  The Prime Minister: Obviously the question of further discussions with the French Government must await the result of the French elections, as my hon. Friend has said. With regard to the second

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  part of the question, I dealt with that at some length in a speech at the Council of Europe celebrations yesterday, which I think was heard by a number of hon. Members. A copy of what I said is being placed in the Library.
  Mr. Eldon Griffiths: While doubting that the change, even of the French President, can dissolve overnight such difficulties as the common agricultural policy and the position of the Commission, would the Prime Minister not agree that the wind may be set fairer for negotiations? Would he therefore say that it remains his policy, as soon as possible, to open up negotiations under Article 237, and in the meantime will he avoid any of those dramatic personal forays which will simply make it more difficult for my hon. and right hon. Friends to lead this country into Europe after the next election?
  The Prime Minister: I agree with the first three-quarters of the hon. Gentleman's supplementary question. He is right to show a certain degree of caution in this matter at this time. After all, there is no reason to suppose—the election is not a matter for us but for the French people—at this time that there is any withdrawal of the embargo or veto which has been so frustrating to so many of us for so long. We must await the situation following the election.
  The hon. Gentleman is also right to stress the fact that as and when negotiations do begin there are still enormous difficulties. He is right in saying, as I indicated last week, that the agricultural policy problem has become more difficult within the Six than it was when the House took its decision in May, 1967. He is right to be cautious about this. He is equally right to suggest, as I did yesterday, that we must make clear that our application remains on the table and that, if there is a fairer wind, we shall take advantage of it.
  Mr. Edward M. Taylor: When in Paris would the Prime Minister take the opportunity of inquiring about the excellent procedure they seem to have there whereby, under the previous President, they took regular opportunities of seeing whether the Government still enjoyed the confidence of the people?
  The Prime Minister: I thought that the basis of the French Constitution was
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  that the Government was elected for a period of seven years at a time. In this country we have a practice that a Government might go the whole of the five years. It has happened only once and that was under right hon. Gentlemen opposite, in 1964.
  Mr. Winnick: Is my right hon. Friend aware that a number of people who are not opposed in principle to joining the Common Market do not wish to see this country humiliated a third time through being refused membership, upon any conditions whatsoever?
  The Prime Minister: What I said about caution, and what was indicated in the Questions of the hon. Member for Bury St. Edmunds (Mr. Eldon Griffiths) and my hon. Friend, suggests that we must take this matter fairly slowly, fairly coolly, until we see what the situation there is. I think that all of us would agree that nothing that has happened in the last month calls for any reversal of Her Majesty's Government's policy. Indeed, what we have done during the very dark days of the veto has been abundantly justified by events, over which we have no control, of the last fortnight.
  Mr. E. L. Mallalieu: Before making an official visit to France, would it not be the path of discretion to await an official invitation?
  The Prime Minister: I always do.

  WOMEN CHARTERED ENGINEERS
  Mr. Lubbockasked the Prime Minister how many women chartered engineers are employed by Government Departments and if he will seek the advice of the Central Advisory Council for Science and Technology on ways of increasing the number of women studying for engineering qualifications.
  The Prime Minister: Of the small number of women chartered engineers, two are known to be employed in Government Departments and a further two are expected to qualify shortly. All the Departments concerned as well as the Central Advisory Council for Science and Technology are aware of the need to increase the number of women studying for engineering qualifications.
  Mr. Lubbock: Are not these figures which the Prime Minister has quoted

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  very depressing, particularly since this is "Women in Engineering Year"? Will the Prime Minister ask his right hon. Friends the Secretary of State for Education and Science and the Minister of Technology to convene a conference to discuss the position of women in engineering and how the numbers might be increased? Will he see that invitations are sent to prominent women engineers in the United States and the Soviet Union, where the number of women qualified in engineering is very much higher than here?
  The Prime Minister: I am obliged to the hon. Gentleman for bringing this point to my attention. I know that he is concerned in general with the question of training, and the number of women engineers who achieve chartered status, rather than with the narrower point of the Civil Service. I have asked the Head of the Civil Service to look into the position, in consultation with the Departments concerned, to see what we can do to increase the number of women chartered engineers in the Civil Service.
  On a wider point, I am asking the Council to which the hon. Gentleman referred to look further into this matter. I cannot express an opinion on whether a conference of the kind he suggests would be helpful, but I will certainly consider it.
  Mrs. Lena Jeger: Will my right hon. Friend bear in mind that the problem is caused partly by the syllabus of teaching at so many girls' schools having no relevance to engineering, and will he consult his right hon. Friend on the possibility of exchange courses at boys' and girls' schools to encourage the interests of girls in engineering?
  The Prime Minister: Without going into all the issues raised by my hon. Friend, this will be looked into as a result of the Central Advisory Council taking this matter on to its agenda, and my right hon. Friend will be involved in that examination.
  Dame Irene Ward: Will the right hon. Gentleman consider whether career advisers who go to schools where there are both girls and boys could explain to the pupils that there are openings in engineering for trained women and men? This would put the possibilities of an engineering career into proper focus. Not
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  enough is done to inform both sexes about the prospects of a career in engineering.
  The Prime Minister: I will bring that proposal to the notice of my right hon. Friend. If more of those who went round to schools giving valuable advice on careers were able to give the sort of advice which the hon. Lady suggests, there would be more willingness in the schools concerned to provide suitable courses.

FINANCE BILL (COPIES)
Mr. Speaker: We come now to the point of order which the hon. Gentleman the Member for Worcestershire, South (Sir G. Nabarro) kindly deferred until Questions were over.
Sir G. Nabarro: On a point of order. Mr. Speaker, I reported to your office at 2.15 p.m. today that no copies of the Finance Bill were available in the Vote Office. As this represents a grave embarrassment to many back-bench hon. Members who cannot possibly memorise scores of pages of abstruse proposed legislation, and as an assurance was given on 29th April, in answer to a Written Question, that copies would be available in good time, I am making an appeal to you to try to make some emergency arrangements before the later stages of the Bill.
It is said, Sir, that the shortage of copies of the Finance Bill is due to an industrial dispute at Her Majesty's Stationery Office, but I remind you that immediately the Second Reading of the Bill is achieved today many hundreds of Amendments will be placed on the Notice Paper none of which back-benchers will be able to assess without ready reference to copies of the Bill which are not available. To facilitate my endeavouring to catch your eye during the debate today, I have borrowed the Librarian's copy of the Bill as being the only copy available.
Could you, Sir, take steps to cause emergency arrangements to be made forthwith for the printing of Amendments to the Finance Bill, if necessary on roneod sheets, or otherwise, but in a form which will assure that hon. Members have the Amendments during the next two days and certainly before the weekend, as we are told that there are to be two days

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in Committee of the Finance Bill on the Floor of the House next week and two days the following week.
Mr. Speaker: May I deal purely with the point of order? Before I do so, may I say that I was informed by the Deliverer of the Vote on 30th April that, owing to an industrial dispute, there might be a shortage of essential papers to the House.
Yesterday, I received a second letter in which the Deliverer of the Vote told me that the Vote Office yesterday had only 30 copies of the Bill left but that every hon. Member who has papers sent to him in the normal way has already received a copy of the Bill, and that in all 970 copies of the Bill have been distributed by the Vote Office.
In the Written Answer to which the hon. Gentleman refers, the Minister said that when the initial stocks had been sold supplies might be restricted due to an industrial dispute in Her Majesty's Stationery Office's distribution warehouse.
These are events beyond our control, but the House would wish me to take the opportunity of saying that the fault does not lie with the Deliverer of the Vote, to whose devoted work the House is indebted day by day.
Mr. Thorpe: Further to that point of order. While I accept the information that 970 copies have been distributed, the fact remains that many right hon. and hon. Members who have asked for copies of the Finance Bill, so that they may know what the House is debating this afternoon, have not been able to obtain copies. We are dealing with a Bill of 53 Clauses, 21 Schedules and 192 pages, and certain hon. Members have been unable to obtain copies.
No blame attaches to any official of the House, but those hon. Members who have been unable to obtain copies—I was unable to obtain a copy from the Vote Office, but have been able to do so from another source—are gravely embarrassed and respectfully seek your guidance and protection on this matter.
Mr. Speaker: I hope that nothing I said led the right hon. Gentleman to think that we were not in a difficulty. I pointed out that there were only 30 copies of the Bill left in the Vote Office
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by yesterday, but the House is not immune from the effect of industrial action. The only question for us now is that we should make the best of a difficult position.
Mr. Heath: With great respect, Mr. Speaker, while we appreciate the difficulties about having printed copies of the Bill, it is possible in a variety of ways to have an alternative presentation of the Bill by photostat or roneod copies. We are asking that steps should be taken during these difficulties to ensure that copies of essential papers are made available.
We ask for your guidance on whether it is the responsibility of the Leader of the House, the Services Committee, or officials of the House to ensure that this is done.
The Lord President of the Council and Leader of the House of Commons (Mr. Fred Peart): It is right that I should intervene. As you rightly said, Mr. Speaker, the dispute has created the inconvenience which has been mentioned. More than 1,000 copies of the Bill have been issued and every hon. Member who asked for papers to be sent to him has received a copy.
I have just been in touch with the Vote Office. I admit that there are 600 copies outstanding, but this is not the fault of the Vote Office or of the House. The hon. Member for Worcestershire, South (Sir G. Nabarro) is right in saying that there may be difficulties about Amendments on Committee. I will do all that I can, in conjunction with Mr. Speaker and the Services Committee, to try to make sure that information is available.
Several Hon. Members rose—
Mr. Speaker: We cannot pursue this much further.
Mr. Robert Cooke: Further to the point of order. I gave you notice, Mr. Speaker, that I wanted to raise with you a passage on page 277 of Erskine May, Chapter XIII, "Machinery of Parliament", line 13 of which reads as follows:
"All parliamentary papers are available to Members on application to the Vote Office …"
This is not so, and the Sale Office, the alternative source of supply in this building, has had no copies of the Finance Bill available since the day of publication.

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We know that the Deliverer of the Vote has done his best to obtain copies of the Finance Bill from the Stationery Office warehouse, and that copies are there now awaiting collection, but the warehouse has refused to release copies to the Deliverer of the Vote because of a political dispute with the Government. No copies are available to hon. Members on demand and no copies are lying on the Table, as is customary when a Bill is to be debated.
The Government knew about this a week ago and have taken no steps to provide hon. Members with copies; yet they insist on putting the Finance Bill down today for Second Reading. I ask for your protection, Mr. Speaker, because we should not be asked to give a Second Reading to an invisible Bill.
Mr. Speaker: Order. The notice which the hon. Gentleman said that he would give me had not reached the Chair until I heard him speak. But all that he has done is to underline the seriousness of the issue. All that I have to decide is whether we go on with the Second Reading of the Bill today, and we shall he doing that.
The Leader of the Opposition was right to call attention to the difficulties we shall be faced with about Amendment Papers. We shall do what we can to meet the wish of the House. It would have been impossible to roneo today this enormous Finance Bill.
Mr. Thorpe: Further to that point of order. With great respect, Mr. Speaker, may we ask your guidance on what is a very important Parliamentary matter? No blame attaches to any official of the House, to those who are responsible for printing, or those who are responsible for the management of Government business. That is accepted. But we are in the difficulty that the House is asked this afternoon to give a Second Reading to a Bill which many hon. and right hon. Gentlemen, of whom I am one, who have applied at the Vote Office for a copy of the Bill, have been told that it is not available.
Is it right that in those circumstances we should be asked to approve a Bill the details of which are not generally available to the House, and when, therefore, we are being asked to vote in the dark?
Hon. Members: Hear, hear.
Mr. Speaker: Order. I must remind the right hon. Gentleman of my original statement. Nine-hundred and seventy copies were made available to Members who are on the usual posting list. The situation is difficult, but I see no reason for not taking the Second Reading.
Several Hon. Members rose—
Mr. Speaker: Order. I can take only one point of order at once. I hope that we can get on.
Mr. Woodburn: Can what is going on just now be described as a sympathetic strike?
Mr. Bessell: On a point of order. On a Finance Bill, with all its implications, and in view of the special importance the House attaches to financial matters, is there any precedent in the history of the House for discussing and voting upon a Bill which is not laid upon the Table, and to which many hon. Members do not have access?
Mr. Speaker: Order. I understand there is a precedent for discussing a Bill of which Members have not had a copy. I imagine that there is no precedent for discussing a Finance Bill of which all Members have not had a copy, but there is also no precedent for the circumstances which have led us to be short of copies of the Finance Bill today.
Several Hon. Members rose—
Mr. Speaker: Order. We have quite a lot of business before us. Points of order will remove from somebody the opportunity of debating.
Mr. Heath: Further to the point of order. You have already recognised, Mr. Speaker, that this is a very serious matter. I understand that those right hon. and lion. Members who asked for all Bills to be sent with their Order Papers have received a copy of the Finance Bill, but that those who rely on collecting from the Vote Office Bills which interest them have in many cases not been able to obtain a copy of the Finance Bill.
If that is a correct statement of the position, does it not make it very difficut to proceed with a debate in which right hon. and hon. Members who have followed their normal procedure have not been able to get copies of the Bill?

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I would ask you to rule, Mr. Speaker, whether or not in those circumstances we can proceed with the debate on the Bill, and would also ask what the justification for so doing is.
Mr. Speaker: Order. I hope that nothing that Mr. Speaker has said has minimised the gravity of the situation. The position is exactly as the right hon. Gentleman has said, that some hon. Members will find it difficult today to debate the Second Reading of the Bill because they followed their usual practice, and by following it did not obtain a copy of the Bill.
The right hon. Gentleman asked me to rule, and I rule that there is no reason why we should not proceed with the Second Reading.
Mr. William Hamilton: To assess the merits of this discussion, Mr. Speaker. could you tell the House how many Members received a copy of the Finance Bill? Presumably the Deliverer of the Vote would know the figures of Members who have the papers delivered. I do, and I suspect that a large majority of hon. Members do.
Mr. Speaker: I am advised that 600 copies were sent. [HON. MEMBERS: "Oh."] Order. Noise does not help us to discuss what is a very serious issue.
Mr. Galbraith: Further to the point of order. If copies of the Finance Bill have been published and are being withheld at the Stationery Office, as my hon. Friend the Member for Bristol, West (Mr. Robert Cooke) said, is not it a breach of the privilege of the House when the copies actually exist and cannot be produced?
Mr. Speaker: Order. If the hon. Gentleman wants to put that point he must not make it in the form of a question, but must submit it to me in the ordinary way, and I will rule on it in due course.
Sir F. Bennett: Further to the point of order. May I seek clarification from you, Mr. Speaker. Are you really saying to the House that we shall have to proceed to the Second Reading of a Bill and listen to a Minister referring to Clause after Clause of a Bill which a number of us do not have before us, and that tonight we shall be expected to vote on a Bill
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that a number of us will not even have seen by then? Is this really the effect of your Ruling and the instruction you are giving to the House?
Mr. Speaker: Order. The hon. Gentleman is merely suggesting that the Ruling is unjust.
Mr. Jopling: The present instance is a special case, because we are debating the Finance Bill. You told us, Mr. Speaker, that 600 hon. Members obtained copies of Bills in the normal way. But many hon. Members pass copies of the Finance Bill when they arrive to professional people outside the House—[HON. MEMBERS: "Oh."] Why not?
Mr. Speaker: Order. The hon. Gentleman is advancing a perfectly serious argument.
Mr. Jopling: Many of us rely on advice from people outside the House. Many of us rely on the advice of our constituents, and many other hon. Members rely, for instance, on advice from trade union organisations—[Interruption.]
Mr. Speaker: Order. It does the House no good if one half of the House treats what is a very serious matter lightly.
Mr. Jopling: Of the 600 Members who received the Bill in the normal way, many will have parted with their copies in the expectation that they could obtain another from the Vote Office.
Mr. Speaker: Order. The hon. Gentleman can assume that Mr. Speaker, as an old Parliamentarian, is aware of that.
Several Hon. Members rose—
Mr. Speaker: Order. I hope that we can get on.
Mr. Howie: Further to the point of order. Could you tell us, Mr. Speaker, how many hon. Members have already put their names down to speak in today's debate? How many do you think have been prevented from preparing their speeches because of this misfortune?
Mr. Speaker: The last thing that one should ask Mr. Speaker to do is to think.
Sir Knox Cunningham: While appreciating your difficult situation, Mr. Speaker, in this matter—
Mr. Rose: One man, one Order Paper.
Sir Knox Cunningham: —and the Ruling which you have given, does it not make a mockery of Parliamentary democracy to debate a Bill which many Members have not seen? Would you accept from the Leader of the House a Motion to adjourn the debate until the Bill is put before hon. Members?
Mr. Speaker: Order. The hon. Gentleman has added nothing new to what is a grave problem. I hope that we can now get on.
Mr. Thorpe: On a point of order. I beg to ask leave to move the Adjournment of the House under Standing Order No. 9 for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"that the House of Commons is being asked to vote for the Second Reading of a Bill the contents of which are not generally available to all Members of the House."
The fact that it is urgent is proved beyond peradventure—
Mr. Speaker: Order. The application under Standing Order No. 9 will take place after the statement by the Minister of Technology.
Mr. Kirk: On a point of order. Even if it is right to deal with the Second Reading of the Bill, on which I have some reservations, there is a Motion in the name of the Chancellor of the Exchequer to follow the Second Reading, a Motion which is absolutely incomprehensible unless copies of the Bill are available to hon. Members. May we have an assurance that that Motion, at any rate, cannot be moved?
Mr. Speaker: Order. We will deal with that when we get to it.
Mr. John Page: Further to that point of order. May we be informed whether the industrial dispute is official or unofficial?
Mr. Speaker: Order. Mr. Speaker is not prepared to comment on industrial disputes at all.
Mr. English: May we have an end to this, Mr. Speaker? One would think that the House had not passed Bills long before the days of printing, including Finance Bills.
Mr. Iain Macleod: Mr. Speaker, you have given a Ruling about today's business. I wonder whether, on a point of order, I might ask you to consider a matter which arises on the question of Amendments to which one or two hon. Members have referred.
As you know, Amendments to the Finance Bill are printed in the order in which they are received. It is, therefore, of some importance to hon. Members, particularly perhaps in view of the suggestion that this year the Bill should effectively be split, that they should be able, as soon as Second Reading is complete, to hand in to the Table the Amendments which can be accepted. Clearly, it conveys an advantage to those who have copies of the Bill, because their Amendments can then be in the proper form.
I am asking whether, in conjunction with the Leader of the House, arrangements can be made for some copies to be available, perhaps in the Table Office, so that hon. Members who, in the course of the day, plan to put in such Amendments immediately after Second Reading, will not be thwarted in their intentions?
Mr. Speaker: The right hon. Gentleman has a very practical suggestion which, obviously, my Department will following up at once.

UPPER CLYDE SHIPBUILDERS
3.55 p.m.
The Minister of Technology (Mr. Anthony Wedgwood Benn): With permission, Mr. Speaker, I should like to make a statement on Upper Clyde Shipbuilders.
The Government have now had an opportunity to consider the request made by Upper Clyde Shipbuilders to the S.I.B. for further support and the recommendation of the S.I.B. on this request.
When the Government accepted the Geddes Committee recommendations for the reorganisation of the shipbuilding industry, and Parliament passed the Shipbuilding Industry Act, it was always intended that the objective was to create viable shipbuilding groups able to compete profitably for orders at home and abroad. The Upper Clyde Shipbuilders were established with the same objective.

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We have always recognised that the inherited difficulties due to bad management, poor industrial relations, absenteeism, low productivity and inadequate capital investment in the past would pose serious problems in establishing U.C.S. on a viable basis. However, we have never accepted and do not now accept that there is a "safety net" under Upper Clyde Shipbuilders or any other shipbuilding group which entitles those working in these groups to expect that the Government will continue to underwrite losses irrespective of the circumstances.
The Government are, therefore, prepared to make a measure of further help available on condition that such help achieves the objectives which I have described.
I am, therefore, going to Glasgow tomorrow to discuss the situation with the management, the unions and those others most concerned.
In the last few days there has been a spate of publicly expressed demand for Government money. This will be an extremely difficult operation upon which the livelihood of so many thousands of people, and the reputation of the shipbuilding industry in Scotland and the community interests of the Clyde depends, and I hope that it can be conducted in reasonable privacy.
After completing these talks I shall be in a better position to inform the House on the situation as it develops.
Mr. Gordon Campbell: The House will be glad that the Minister has been able to make his promised statement so early and to know that he is making an urgent visit to Glasgow tomorrow. Will he agree that a special, concerted effort is needed by all concerned, including all those who work in this industry on the Upper Clyde? Will he also keep the House informed of developments?
Mr. Benn: Yes, I accept what the hon. Gentleman has said. The solution of this problem lies with the Clyde, though the Government may be able to play some part in it. I will, of course, keep the House informed, but I would rather go there myself and have these talks before making a fuller and further statement.
Mr. Small: Does my right hon. Friend recognise that I have come straight from the Clyde having been there all day yesterday, and am grateful for the statement that he will be making a personal visit there? There is tremendous dismay in the yards in the matter of the Upper Clyde Shipbuilding, which has international significance in that contractors abroad also are expressing doubts about the future. I hope that the Minister has a successful day on the Clyde and goes slightly beyond the matter of bridging finance.
Mr. Benn: I am well aware of what my hon. Friend has said. He accompanied me on my last visit. This will be my third visit in three months, and it is an indication of the seriousness with which we ourselves take the position.
Mr. Edward M. Taylor: Will the Minister assure us that, when the discussions are completed and when the objectives on which aid is dependent are laid down, every person in the yard will know clearly what are the objectives and targets which have to be met? Will the Minister also say whether, as well as meeting representatives of the workpeople, he will bring into the discussion the 40,000 men who, through sub-contracts, depend indirectly on shipbuilding for their livelihood?
Mr. Benn: On my last visit I went to each yard and addressed meetings of the workers with the object of explaining to everybody that they have a part to play in the salvation of the Upper Clyde Shipbuilders.
I referred in my statement to other interested parties and I had in mind the component manufacturers and others.
Mr. Rankin: Is my right hon. Friend aware that I accept warmly every part of the statement which he has just made? Does he realise that in Clydeside we do not want safety nets? We have the men, we have the jobs, but our need is that of money. The shipbuilding body which has been set up is less than a year old. It needs help, and I hope that my right hon. Friend will see that help is forthcoming in sufficient quantity to enable it to do the job.
Mr. Benn: The Government recognised, and so did the House when it voted the money for the Shipbuilding

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Industry Board, that some public support was necessary to reorganise the industry into viable groups. But the solution of the problem does not lie merely or even principally in the readiness of my colleagues and I—and the Chancellor of the Exchequer—to release money. It is a problem which has psychological and other overtones that have to be taken into account, and I am anxious to discuss them with the people on the spot who face this very difficult position.
Miss Harvie Anderson: While recognising that it would be unwise to go into this matter much further today, would the Minister accept that, inevitably, there is anxiety about his use of the words "a measure of support"? The important thing for Clydeside is that the measure should produce a viable unit and, by so doing, restore confidence not only in Clyde shipbuilding but in shipbuilding throughout the United Kingdom.
Mr. Benn: I am grateful to the hon. Lady. Confidence in shipbuilding throughout the United Kingdom is high, and our order book now is very nearly the highest on record, if not the highest. A great deal is attributable to the reorganisation carried through by the Government.
I am aware of the anxiety, and it is for that reason that I am to go again to the Upper Clyde myself. But the ultimate success of the operation, including the maintenance of employment, depends upon the Upper Clyde being able to discharge orders profitably and not to be dependent upon Government support.
Mr. Albu: Would my right hon. Friend not agree that this situation, which has been going on for a long time, might have been very much better if, when the previous Conservative Administration promised to place the "Queen Elizabeth" with John Brown, they had insisted on an improvement in the management of that yard?
Mr. Benn: There is much past history. But I do not believe that, when we have a difficult job to do, it would serve much of a purpose to go back over past history, about which inevitably there would be a variety of explanations.
Mr. Wingfield Digby: While recognising the special problems of the Upper Clyde, will the right hon. Gentleman do
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nothing to prejudice S.I.B. help to other British shipbuilders and, in particular, put no pressure on the viable yards of the Lower Clyde to join the less viable yards of the Upper Clyde?
Mr. Benn: No one knows better than the hon. Gentleman the rôle of the S.I.B. in this matter. It is led by a distinguished industrialist, with trade unionists and other industrialists on the Board. My position is that I am called upon statutorily to approve its recommendations. All the considerations raised in the hon. Gentleman's question are very much in the minds of the Board and myself.
Several Hon. Members rose—
Mr. Speaker: Order. A point of order. Mr. Thorpe.

FINANCE BILL (COPIES)
Mr. Thorpe: Mr. Speaker, I beg to ask leave to move the Adjournment of the House, under Standing Order No. 9, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"that the House of Commons is being invited to vote for the Second Reading of a Bill the contents of which are not generally available to all Members of the House."
The fact that this is an urgent matter need not occupy the House for more than a few moments. We know that the subject-matter which I seek to raise is down for debate in public business at the conclusion of this point of order and the Ministerial statement which preceded it. In my submission, there is no doubt that the matter is urgent.
The fact that it is definite has again been generally agreed, namely, that the subject-matter of the debate is not available in legislative form. In my submission, it is of no significance how many copies of the Bill were printed and distributed. The fact remains that hon. Members going to the Vote Office before the debate—and I was one of them—were not able to obtain copies. Therefore, whatever the views of any hon. Member, I hope that it will be generally agreed that the matter is definite and urgent.
The third and final limb on which I would have to succeed in asking you to rule in my favour is whether it is a matter of importance. I submit that a

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Finance Bill which seeks to raise large sums of money from the taxpayer is a matter of great importance.
Having been fortunate in obtaining a copy, not through the Vote Office, but by borrowing a file copy, perhaps I may read the Long Title of the Bill. It is:
"A Bill to grant certain duties, to alter other duties, and to amend the law relating to the National Debt and the Public Revenue, and to make further provision in connection with Finance."
It is historically accepted that one of the major reasons why the House of Commons found itself in conflict with King Charles I—
Mr. Speaker: Order. The right hon. Gentleman must not debate on his application for the S.O.9. He must not make the speech that he would make if he were granted the S.O.9.
Mr. Thorpe: With respect, I have no intention of doing so, Sir; I only seek to urge upon you that, on the basis of past precedents, the matter of public finance and the right of this House with full knowledge to vote these matters is of great constitutional significance.
One of the main reasons why King Charles I was involved in a great controversy with this House and lost his head was that he sought to raise money without reference to this House and by the exercise of the Prerogative. It was for that reason that the whole question of ship money caused Hampden and many other distinguished Parliamentarians to oppose it—
Mr. Speaker: With respect, I cannot question anything that the right hon. Gentleman has said. But he must submit his application for an S.O.9. The points that he is making would be quite in order in his speech if he got an S.O.9.
Mr. Thorpe: Mr. Speaker, I respectfully submit that, on the basis of past precedents, the House has attached very great importance to having the full rights of raising moneys for the public purse and for the public services and taking the opportunities of adequate debate. I will leave the historical precedents by saying that, so great was the importance, that Parliamentarians, in my view rightly, were prepared to engage in a civil war.
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I move, then, to the present position. The Opposition are allowed to select certain matters for debate in the House on Supply days. Those matters are within their discretion on the basis that the House is not prepared to grant moneys without the remedy of grievances. That is why there is a green bag behind your Chair in which petitions may be lodged—
Mr. Speaker: Order. We cannot at this stage have the whole of the constitutional struggles of the House of Commons. versus the Monarch and the apparatus of the House. The right hon. Gentleman is applying for an S.O.9. He must keep to his application.
Mr. Thorpe: I am grateful for your guidance, Mr. Speaker. I can relieve you and the House, for I have now left historical precedents and I come to the present day.
Mr. Speaker, I respectfully adopt what you have said about it being without precedent for the House of Commons to be asked to give a Second Reading to a Finance Bill the contents of which are not generally available to hon. Members of the House of Commons. To use your own words, "It is not on the Table." It is only through the withholding of our vote for moneys that historically we have the right to seek the remedy of grievances of our constituents. This is the whole historical basis of this place.
Bearing in mind all the past precedents and the contemporaneous importance which we attach to the raising of moneys and taxation, we are being asked for the first time in the history of the House to give a Second Reading to a Finance Bill the contents of which are not generally available to hon. Members before the debate.
I repeat that no blame attaches to any of the officials of the House, and certainly no blame attaches to the Treasury Ministers who are responsible for this debate. I acquit them—
Mr. Speaker: Order. The right hon. Member is again drifting into the merits of the matter which he will be able to debate if he is granted an S.O.9.
Mr. Thorpe: I ask you, Mr. Speaker, to say that since it is certainly my view, which I respectfully adopt and endorse from you, that never before has the House been asked to give a Second Reading to

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a Finance Bill without the Bill being generally available, and bearing in mind the historical importance which this House attaches to the vote of moneys, we should have the right to adjourn the House under Standing Order No. 9 to debate these matters, and that, although it is not within my rights procedurally to suggest it, the whole of the debate should be adjourned until the Bill is available to all Members.
Mr. Speaker: The right hon. Member for Devon, North (Mr. Thorpe) asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
"that the House of Commons is being invited to vote for the Second Reading of a Bill the contents of which are not generally available to all Members of the House."
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 Order, but to give no reason for his decision.
I have given careful consideration to the representations made by the right hon. Member in his speech and to all that went before, but I have to rule that his submission does not fall within the provisions of the revised Standing Order. Therefore, I cannot submit his application to the House.
Several Hon. Members rose—
Mr. Galbraith: On a point of order.
Mr. Speaker: Order. I am not prepared to take points of order on my Ruling.

QUESTION OF PRIVILEGE
Mr. Galbraith: This is a further point of order. I am asking, Mr. Speaker, whether this is the right moment—
Mr. Speaker: I apologise to the hon. Member. I had forgotten ant he wanted to raise another matter.
Mr. Galbraith: I merely wanted to ask you whether the situation in which we find ourselves today may not be a breach of privilege. I understand that copies of
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the Finance Bill have been printed and are in existence, but that somebody is preventing Officers of the House from collecting them. If these facts are true, as I believe them to be, it would seem that this constitutes a breach of privilege. I should, therefore, like your guidance on the matter.
Mr. Speaker: Order. The hon. Member is submitting to the Chair that interference by some persons with the delivery of copies of the Finance Bill, thereby preventing all hon. Members of the House from obtaining copies, is a breach of privilege. I shall rule on that matter tomorrow, after my customary 24-hours' consideration.

QUOTATIONS FROM SPEECHES
Mr. Speaker: I should like to mention two minor points of order, one of which may seem rather small but which is important.
I wish to correct an inaccurate Ruling that I made yesterday in answer to the right hon. Member for Wolverhampton, South-West (Mr. Powell), which is recorded in HANSARD at column 50, and to rule that it is in order to quote from something previously said in the House when raising a point of order, as distinct from a supplementary question, if, of course, it is a point of order and not a point of argument.
I am grateful to the right hon. Member for Wolverhampton, South-West for calling attention to the error that I made yesterday.
Later—
Mr. Orme: On a point of order. Concerning the reference that you, Mr. Speaker, made previously to the right hon. Member for Wolverhampton, South-West (Mr. Powell), when he raised a point of order arising out of a point of order that I had raised about quoting what a Minister had previously said, may I ask whether it is possible, in retrospect, to get that quotation on the Order Paper?
Mr. Speaker: Order. I will not pursue that point at the moment, because I also said that my Ruling applied to real points of order and not to supplementary questions disguised as points of order.

TRANSFER OF QUESTIONS
Mr. Speaker: I promised to look into the matter raised by the hon. Member for Penistone (Mr. John Mendelson) who complained that one of his Questions had been transferred and in the process had been changed from being an Oral Question to being a Written Question.
The facts are that the hon. Member handed in his Question addressed to the Foreign Secretary on 28th April. It was transferred to the Ministry of Technology the following day. Notice was published in the normal way on the morning of Wednesday, 30th April. The Question remained dated for 5th May, since it is the well-known practice of the Table Office never to change the date of a Question, except at the hon. Member's request.
If the hon. Member, on 30th April, had chosen to defer his Question to the day three weeks ahead, 21st May, on which the Minister of Technology is at the top of the list, he would have secured a high place among the Questions for Oral Answer.
As the House knows, a Question which has been fully answered cannot be replaced on the Order Paper since each Minister answers for the Government as a whole. It will, therefore, not be possible, in the light of the Written Answer given yesterday, for an identical Question to be resubmitted to the Foreign Secretary.
Mr. John Mendelson: May I briefly submit that the main burden of my complaint does not deal with the portion with which you, Mr. Speaker, have just dealt? The main burden of my complaint is that it was wholly out of order for the Foreign Secretary to transfer this Question to the Ministry of Technology, because the Question that I submitted dealt with the authorisation of the export of military transport aircraft for use in South Vietnam.
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I could not develop this point yesterday because I had not received the Written Answer. I have now received the Written Answer from my hon. Friend the Member for Huddersfield, East (Mr. J. P. W. Mallalieu) and it reads:
"Any proposal by the firm to export military transport aircraft would be considered by Her Majesty's Government in the light of stated policy and of the circumstances at that time. I cannot comment on recent Press speculation."—OFFICIAL REPORT. 5th May, 1969; Vol. 783. c. 29.]
The point that I make—and I believe that it is a serious point of principle—is that it is only the Foreign Secretary who can give authority for the export of military transport aircraft. It can never be given by the Minister of Technology. Therefore, in the light of this reply, it was wholly out of order for the Foreign Secretary to transfer this Question to the Ministry of Technology.
If back benchers are to have no remedy against such procedure, which I submit is wholly out of order, by not being allowed to resubmit the Question to the Foreign Secretary, in future any Minister could transfer a Question to another Department and there would be no remedy. Therefore, I urge upon you, Mr. Speaker, that, quite beyond the importance of the Question, I ought to be allowed to resubmit it to the Foreign Secretary to safeguard the interests of other hon. Members in future.
Mr. Speaker: Order. Yesterday, I ruled quite specifically on the point that the hon. Member has now raised. The matter of transfer from one Minister to another is not a matter for Mr. Speaker or the Table. Hon. Members from time to time find themselves in difficulties because a Question has been so transferred.
If I may try to assist the hon. Member, what he should have done, some time ago now, when he found that his Question had been transferred, was to take the matter up with the Minister concerned.

DATA SURVEILLANCE
Mr. Kenneth Baker: I beg to move.
That leave be given to bring in a Bill to prevent the invasion of privacy through the misuse of computer information.
One of the features of our society is the growing use of computers. There is no doubt that they will revolutionise our society and improve the conditions of man. But they should be our tools, not our masters. Computers should operate within the framework of our society within its customs, rights and laws and not seek to distort and dominate that framework.
I should like to make clear at the outset that this is not a Luddite Measure which seeks to inhibit and prevent the use of computers. On the contrary, this is a forward-looking Measure. I am not leading a campaign to restore the quill pen. My Bill seeks to establish a code of conduct, backed by legal sanctions, for computer operators operating these personal data banks. At the moment these computer operators do not have a code such as doctors and lawyers have, and are often placed in a difficult position in regard to knowing what information is confidential and what information should be passed on, and to whom.
To give a precise example of a dilemma, two months ago the clerk of a rural district council in East Anglia wrote to me saying he had been asked by the clerk of a neighbouring city council to pass information about one of his former council tenants, concerning that tenant's ability to pay rent, his marital status and marital stability and whether he was naturalised. The clerk of the rural district council said it was not his business to pass such information around.
The difficulty that arises from a computer is that when housing records are computerised in this way no specific decision has to be made as to whom information can be passed. This is the essential dilemma of the problem. One has to balance the advantages of administrative efficiency against the rights of individuals.
Bureaucracy, I suspect, is tolerated because it is relatively inefficient, but when it has the opportunity to become highly efficient we have to examine again
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the checks and balances that may be required to operate on these personal data banks. There are many of them around the country. I understand that of the 120 or so Government computers about one-half are concerned with recording personal information. They are the well-known ones—the P.A.Y.E. computer at Kilbride, the Social Security computer at Newcastle, the Giro, Premium Bonds and Savings Bank computers; and now there is the vehicle licensing computer at Swansea.
There are also computers being operated by local councils for housing and welfare records. Information at all these sources is available virtually at the pressure of a finger to an official in Whitehall or in a town hall. Behind those officials could stand the politicians. This is a real danger, because all this apparatus of a computer-based autocracy is coming into existence. I do not want to sound alarmist, but George Orwell's nightmare of 1984 could easily come about by misuse of computers.
My Bill would also cover such things as medical records. One of the developments in the future will be individual medical records; and each of us will be computerised. This has the enormous advantage that when any person falls ill away from home the doctor who is to attend him will be able to dial in and get his medical record. This means that the treatment may be much better but it has the obvious danger that, for example, drug companies, insurance companies, or a man's employer may be able to get that kind of information. This is something on which there is at present no protection at all. My Bill would also cover the private sector and, in particular, credit rafting bureaux.
Specifically, what the Bill would do is, first, provide that a computer holding information specifically about people would have to be registered, together with the purpose for which the information is required. We have suggested that the register should be kept by the Registrar of Restrictive Practices, but this is not essential. It should, however, be kept by a registrar so that there is a judicial framework.
Secondly, when the name of any person appears on any computer that person will receive a print-out, like a bank statement, containing details of the personal information that the computer holds,

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which departments have access to it and what use has been made of information where it has been passed since the last print-out. After the first free print-out, anyone can apply for a subsequent printout for the payment of a fee.
Thirdly, each person will have the right to challenge the accuracy of the information on the statement and the relevance of the purposes for which it is being kept, and the right to claim that the information is out of date through the passage of time and should be expunged.
Fourthly, there will be penalties for owners or operators of data banks who send information to non-qualified recipients. If inaccurate information is sent out and an individual suffers loss as a result there will be a cause for damages.
Finally, there will also be penalties for anyone who attempts to get information for malicious purposes; otherwise, the Bill would be a blackmailer's charter. It is not proposed to extend the provisions of the Bill to the police or counterespionage records.
In conclusion, the principle of the Bill has been accepted by the Government. Clause 65 of the Post Office Bill, which is going through the House at present, lays down that there will be penalties upon Post Office operatives who work computers who misuse the information they come across in the course of their work. The penalties are very heavy—imprisonment and heavy fines. But what is lacking in Clause 65 of the Bill is the procedure for determining that there has been wrongful misuse of the information. This is an omission which my Bill seeks to make good.
I am glad to say that there is all-party support for this Bill. It is supported by
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the Labour Party and the Liberal Party; and many of its proposals emanate from a pamphlet prepared by Conservative lawyers and one prepared by the National Council for Civil Liberties. This wide and growing support shows that there is increasing recognition of the need for some new protection of individual rights and protection against an over-zealous State intruding too much into individual people's privacy. In the changing conditions of contemporary society we need the right to be left alone.
Finally, this is the first time that a Measure such as this has ever been aired in any Parliament. It is thought that the United States Congress and the Canadian Parliament will legislate on these lines, but nothing has been printed so that nothing is yet available. The Bill that we have drawn up is not by any means completely perfect, but I hope that it will be a basis of legislation. Those who have been associated with me in preparing the Bill are very proud of the fact that this is the first time such a Measure comes before any Parliament in the Western world. But it will not be the first time that the British House of Commons has led the way in defending the rights and freedoms of individuals when they have been threatened.
Question put and agreed to.
Bill ordered to be brought in by Mr. Kenneth Baker, Mr. Dobson, Viscount Lambton, Sir Harry Legge-Bourke, Dame Joan Vickers, Mr. Lubbock, Mr. Orme, Mr. Rossi, and Mr. Whitaker.

DATA SURVEILLANCE
  DATA SURVEILLANCE
  Bill to prevent the invasion of privacy through the misuse of computer information, presented accordingly, and read the First time; to be read a Second time upon 13th June and to be printed.

FINANCE BILL
Order for Second Reading read.
Mr. R. J. Maxwell-Hyslop: On a point of order. As copies of the Bill are not available, Mr. Speaker, would you be good enough to read it to the House before we debate it?
Mr. Speaker: We have already dealt with that point. I should be pleased to read the Bill to the hon. Gentleman, but I do not think that the House would be very much obliged.
Mr. Geoffrey Hirst: On a point of order, Mr. Speaker. I quite appreciate that you could hardly read the whole of the Bill, but the whole basis of this debate is to take place under very unsatisfactory conditions. May we be assured at the very outset hat the Chief Secretary will make absolutely clear the precise purpose and extent of the Clauses which he is subsequently to commit to a Committee of the whole House? We must have that absolutely clear at the outset of the debate.
Mr. Speaker: That point will arise after we have taken the Second Reading of the Bill, because a Motion will follow the Second Reading and the right hon. Gentleman in charge will be explaining exactly what is involved. I think that the hon. Gentleman need have no worry.
4.30 p.m.
The Chief Secretary to the Treasury (Mr. John Diamond): I beg to move, That the Bill be now read a Second time.
I was about to say, before the last intervention, that I recognise only too well the difficulty and inconvenience in which some hon. and right hon. Gentlemen are placed and recognise that they will be paying me undue courtesy if they allow me to proceed with a Bill of which not all of them have copies. In other words, I shall try to adjust my comments in such a way as will make the absence of the Bill less inconvenient than might otherwise have been the case. [Interruption.] I think one wants to take the line that there might be hon. Members who have been inconvenienced.
I have the clearest imagination of the point of view that I should be taking and expressing were I still sitting where the hon. Gentleman is sitting. I think, there-
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fore, that I owe it to the House to endeavour, as far as I can within the limits of time, to make clear the points to which I want to draw attention, on the assumption that the Bill is not readily available.
For those who have not had an opportunity of seeing it, it is a longish Bill of nearly 200 pages, but size and controversiality do not necessarily go together. I do not think that it will be found to be too controversial a Bill. Many parts of it will, I think, be acceptable. For example, 30 pages are in preparation for consolidation of the Finance Acts, and I think that it would be everybody's desire that they should be examined, and if appropriate approved.
The intention is to introduce later this year two consolidation Bills, an income and corporation tax Bill containing the main provisions, and a taxes management Bill containing machinery provisions. The main Bill is designed to take effect for income tax for 1970–71, and for corporation tax for accounting periods ending on or after 6th April, 1970. The management Bill will come into force on the same day. I think, therefore, we would all welcome the fact that there are all told 44 pages of consolidation and simplification.
The Bill contains about 30 pages dealing with reliefs and reductions in taxes. They, too, I think, will be welcome. There are 29 pages dealing with anti-avoidance measures, and I think that they too, will be welcome. I think that the House will want to make sure that when it passes legislation, as it has done in past years after great consideration and time spent, and has decided where the burdens of taxation should fall, the burden is falling in that way, and that the will of the House is not being flouted. I therefore think it right that if it is represented to me that tax is being avoided, and the provisions passed by the House are not being effective I should bring the matter before the House, at all events for reconsideration.
That leaves 88 pages on new provisions and variations in the taxes. Of those, a number are pressed upon us by trade associations and others who quite properly wish to have adjustments made to help them and to remove difficulties. Whether those 88 pages will be welcome is, I0 think, largely a matter of taste.

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There is not attached to the Bill an Explanatory Memorandum. There never is in a Finance Bill, but if there were such a Memorandum it would contain a reference to the staff position. As that information is never given in a Finance Bill, I think it right for me to say that the net staff requirement in the current year, taking into account all the provisions of the Bill, will be small and can be accommodated within the terms of the Prime Minister's statement of 26th February. When one looks further ahead, the proposals tend to reduce the staff requirement below what it otherwise would have been.
I turn, now, to some of the major provisions of the Bill. As the House is aware, there is no alteration in the rates of income tax and surtax, but some very helpful reliefs given there, especially at the lower end. There are some increases in indirect taxation, but the weight of taxation all told, including direct and indirect, results in a further small move away from inequality. I am sure that the House appreciates that there is a greater buoyancy of the revenue so far as direct taxes are concerned rather than indirect, and that even if one merely wishes to maintain some balance between direct and indirect taxation it is necessary from time to time to increase indirect taxes, and indirect taxes alone.
The Bill provides for an increase in corporation tax, an increase which I gather from subsequent comments was anticipated. I think that there is every justification for seeking that contribution from the business community, and I want to explain why I say that.
It is true that during the past year more dividends have been restrained. I have paid tribute to those who have co-operated 100 per cent. in achieving that, and that is still the present position, but the restraint on dividends does not mean that profits have not risen. Indeed, they have. In 1968, they were £500 million, or about 11 per cent., above the previous year. In 1969–70, it is expected that profits will be higher still.—[Interruption.] The hon. Gentleman is talking about real terms. I shall compare like with like. Against that increase of £500 million, the increase in corporation tax amounts this year to £75 million, and in a full year to £120 million.
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Another comparison is the total amount of ordinary dividends paid. In 1968, these amounted to £1,670 million. Corporation tax falls on profits, and it means that the additional 2½ per cent., £75 million, or in a full year £120 million, will fall on these total profits which last year were £1,670 million. I do not think it can reasonably be said that profits cannot accommodate or digest the additional burden of corporation tax.
Nor can it be said that the additional burden of corporation tax cannot he borne because of the lack of liquidity of companies. I understand that over the last two years companies have added about £850 million to their financial assets. Thus, when one compares £75 million or £120 million with that, again it is right to say that companies are still able to bear the additional corporation tax.
It will have a useful and beneficial effect on consumption. It will have a useful, though small, beneficial effect on the balance of payments. It will not, I feel sure, have an ill effect on investment, something about which one has to be very careful, because our need to plough back profits and invest more is accepted on both sides. I do not think that it will have an ill effect there. The evidence one has—the most useful piece of evidence being the investment intentions collected by the C.B.I.—is that investment is rising, and, indeed, that those intentions are the best since 1960. I therefore do not think that there is undue cause for anxiety.
Nor will the increase have a damaging effect on costs or our export capacity, because the corporation tax increase will fall on profits. It will not affect costs, nor will it damage our exports, and in any event we still have the situation of about a 7 per cent. differential advantage as a result of devaluation.
Mr. Hirst: This is not the moment to argue the right hon. Gentleman's erroneous economic thinking, but he must appreciate that if increased profits are made by industry they pay increased tax at the same rate of corporation tax. It does not have to be increased. It is monstrous to suggest that it should be, because all tax is a charge on costs.
Mr. Diamond: As the hon. Gentleman rightly says, this is not a suitable medium

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for exchanging views. I hope that he will pay me the courtesy of listening to what I say and I shall look forward to hearing him, even though his views do not entirely coincide with mine.
I should now turn to the provision about loan interest, as this is a major departure and is related to the Chancellor's economic action. In his Budget speech, my right hon. Friend drew attention to the large expansion of credit in the domestic economy, which had resulted in 1968 from the growth in money supply and the balance of payments deficit. He said that the expansion in domestic credit had been a great deal more than we could afford, given the need to switch resources into the balance of payments, and that we could not allow credit to be supplied on anything like the same scale in the coming year.
One element in the credit extended to the domestic economy is, of course, bank credit, and the Chancellor has made this contribution to restraint here by a reversal of the central Government's borrowing requirement, so great that the public sector—not just the central Government—will be reducing rather than increasing its total outstanding debt this year. This should make it possible for the Government substantially to reduce borrowing from the banking system.
As regards bank credit to the private sector, the reduction in the advances of the London clearing banks in April showed that they had made further welcome progress towards bringing their restricted lending within the 98 per cent. ceiling. Indeed, they were left with only about £50 million to go, but getting within the ceiling does not mean that credit restraint can be relaxed. The banks will, I hope. be assisted in the hard and ungrateful task of saying "No" to their customers—no one is better able to sympathise with them in that difficult task than one who, in his professional capacity, must do it day by day—by the provisions in the Bill withdrawing tax relief on interest paid by personal borrowers.
When we are asking the banks to make strenuous efforts to cut back on inessential overdrafts for personal consumption, it is paradoxical that a considerable part of the cost of those overdrafts should be met by the Exchequer—
Mr. Reginald Maudling: The right hon. Gentleman is putting forward
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this change of interest payments as part of the credit squeeze. May we take it that, when the credit squeeze comes to an end, it will be reversed?
Mr. Diamond: The right hon. Gentleman cannot take that. He can always be relied on to interrupt a speech when he has heard the first part of the argument, on the assumption that it cannot be followed through. I hope that he will be a little more patient. He does this every time, without exception.
I hope, therefore, that I may continue to explain that what the Chancellor referred to was the need to discourage private consumption by discouraging both the borrower and the lender. Also—as I shall make clear, if the right hon. Member for Barnet (Mr. Maudling) will allow me, as I explained in my Budget speech—the restoration of the old arrangements for distinguishing between what is business expenditure and what is private expenditure and applying that to bank interest is a sensible and overdue arrangement.
I do not recollect which right hon. or hon. Gentleman said it—I think that it was the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd)—but he said, interestingly enough, that this was a matter which had been reviewed every year by Chancellors when the Opposition were in power. That was surprising to me. Of course, no Minister of the present Government would have any means of knowing whether that is true, and I could only take it from what the right hon. and learned Member said. I should be surprised if it were so, but, if it were, it would merely underline my point that this is due not only on grounds of sensible, fair tax principle, but also, very timely, in relation to our present circumstances. I hope, therefore, that I have fully answered the right hon. Gentleman's intervention.
Mr. Maudling: Since the right hon. Gentleman has said that this was reviewed every time by previous Chancellors, may I tell him, for his own information, that that is quite untrue?
Mr. Diamond: I am grateful for what the right hon. Gentleman says. I will check to see who said it. My recollection—it may be wrong—is that it was

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the right hon. and learned Member for Wirral.
The proposal about the adjustment of the tax provisions concerning the deduction of interest on private borrowing will result in a further tax yield of about £25 million in a full year. I have found that, although this proposal has created a great deal of interest as to the detail, it has won surprisingly general acceptance on the principle. In fact, many people have said to me, "We could never understand why this was not done before." That is interesting, in view of what we have just been talking about.
The objection, of course, is to a change—one is familiar with objections to any change—but before one objects to this change one should examine the present situation. If it were ideal, there is a good argument for not changing it. If—as I shall argue—it is both unfair and irrational, one cannot rely on it as a satisfactory solution of our problems.
It is irrational because not all forms of interest at present attract tax relief. Annual interest does; short interest—that is, on a loan repayable in less than one year—does not. On the other hand, interest payable on an advance from a bank or from a stockbroker, for example, be it short or long, is allowable.
It is unfair because, as has been said, when a man buys on hire purchase in a way in which he cannot buy on credit because he has not the substance to be held credit-worthy, the interest involved is not allowed, and the interest, as anyone knows who has troubled to make the calculation, is very heavy. If he buys on credit, being a person of substance and credit worthy, and pays interest, the interest does attract relief.
So the situation is the familiar one that those who have means pay least because they get tax relief on their interest and those who do not have means pay most, particularly if they are buying on hire purchase. Thus, the present system has very little to recommend it and the new one will be both more logical and more just, in addition to serving our economic needs.
Four arguments were advanced against the new proposals. The first is that, as the interest receivable is taxed as part of the income of the lender, the interest
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payable should be allowed from the taxable income of the borrower. But if one were to accept that basis, what one pays one's solicitor, for example, which is part of his taxable income, or what one pays one's accountant, which is part of his taxable income, should be deducted from one's own tax assessment. That is not so—
Sir Gerald Nabarro: So it should, in some cases.
Mr. Diamond: I pay great respect to what the hon. Member says, but he is familiar with the provisions and practice of the taxing acts, and the tax code and he knows that there is a clearly drawn line between what is spending out of one's income and what is spending to earn one's income. These examples are just the ordinary ones of spending out of one's taxed income, and there are a host of others of the same category. There is no principle in the tax code that what the recipient pays tax on, the payer should get relief on.
The second argument which is put forward is that where a loan has been used to buy income-producing assets the interest on that loan should be treated as a deduction for tax purposes. Again, this would mean restoring the regressive nature of the existing relief. It would mean that anybody who had some capital and borrowed money could claim the interest for tax purposes, whereas anybody who did not have capital would not be able to claim the interest.
I am told—I think that it was the right hon. and learned Member for Wirral who said this—
Mr. Maudling indicated dissent.
Mr. Diamond:—that we would have enormous difficulty in drawing the line between what is a business expense and what is not, a line which must be drawn in deciding whether or not interest is allowable.
However, this is a familiar problem which exists among a host of expenses, in addition to interest matters which form a regular part of the function of the Inland Revenue. This is sorted out with the assistance of accountants and other members of the profession. There are well-established rules and cases which help to decide whether interest is wholly allowable or disallowable or

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whether a portion of it is allowable or disallowable. I do not anticipate any undue trouble on that score. Thus, this argument does not alter the justification which I am putting forward for the new provisions.
The third argument which is put forward—I am certain that this was adduced by the right hon. and learned Member for Wirral—is that one could have saved all these problems if one had merely withdrawn the tax relief applying to surtax payers. I will deal with the practical difficulties of this, and they are many, but meantime suffice to say that the present proposal is estimated to raise £25 million in revenue, apart from its other beneficial effects. To restrict it to surtax only would mean raising additional revenue of £5 million and, therefore, the suggestion is not worth a candle. I note from the twinkle in the eye of the right hon. Member for Barnet that he immediately recognises the point of my argument, which reveals the wide spread that exists.
It will be seen that this arrangement will fit in well with the Chancellor's proposals. One exception that we are making to what I believe is a logical and just scheme is in connection with social policy. We are proposing the continuing encouragement, through tax reliefs, of savings as represented by the purchase and improvement of housing. This exception will apply to money used to buy, for example, a caravan or mobile home on which local rates are paid. Where there is a bridging loan, the interest on both that loan and the loan which replaces it will qualify for relief.
Moreover, where, in general terms, a loan is raised to pay off a qualifying loan, interest on the new loan will equally qualify. Provided that there is a reasonable connection in time and amount between incurring the debt and the relevant expenditure on the property, the appropriate relief will be allowed from the inception of the loan, even if it takes place shortly before the incurring of the expenditure.
Mr. Joel Barnett: Would my right hon. Friend tell us what he considers to be a reasonable period of time?
Mr. Diamond: I do not think that my hon. Friend would expect me to do that.
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[HON. MEMBERS: "Why not?"] In practice, it is not difficult, by the ordinary process of question and answer, to find out whether a transaction was entered into "whole"—that is, whether the money was borrowed for a particular purpose or for another purpose and has been subsequently switched. That can be discovered without too much difficulty.
I am making a simple point. We do not wish to be inflexible about this and, as long as the intention is to enter into one transaction, there will be no difficulty.
Sir G. Nabarro rose—
Mr. Diamond: I will give way to the hon. Gentleman later.
I was saying that there would be no need for the two parts of the transaction to be absolutely contemporaneous. I also wish to make it clear that what matters for this purpose is not the asset on which such a loan might be secured but the purpose to which the money is devoted. For example, a loan secured on a life policy will qualify if the loan is spent on buying or improving a house. On the other hand, a loan secured on a house will not qualify if the money is used for ordinary consumer expenditure.
Perhaps I should add that the relief need not necessarily be limited to the original borrower. Where a successor in title, such as a widow, takes over both a house and the liability to pay the interest, that interest will qualify for relief. Similarly, once a borrower has parted with the property, no further relief will be allowed, although interest may have to be paid if the loan happens to continue. There will no doubt be other details concerning this matter, but we can go into them in Committee.
Sir G. Nabarro: Clause 19(4) contains these curious words:
"If interest is paid at a rate in excess of a reasonable commercial rate …"
In present conditions of extreme stringency of credit, through most orthodox channels interest rates are varying from between 9 per cent., being Bank Rate plus 1 per cent., for a loan from, say, a joint stock bank, to as high as 18 per cent. or even 20 per cent. for a medium-term loan for the same purposes from non-banking institutions. How are we to interpret a "commercial rate"?
Mr. Diamond: The interpretation of a commercial rate is a rate which is payable in commerce.
Sir G. Nabarro: What does it mean?
Mr. Diamond: The hon. Gentleman is asking me to say what is reasonable. Nobody is better equipped than himself to answer that.
Sir Arthur Vere Harvey: The right hon. Gentleman will be aware that industry is today not necessarily going to the banks to raise money to meet the import deposit charges but is going to finance houses, where it is having to pay between 14 and 15 per cent. Would he consider that to be a commercial rate?
Mr. Diamond: The question would not arise if it were a business.
Sir A. V. Harvey: Is 15 per cent. a commercial rate?
Mr. Diamond: There will be no difficulty. [HON. MEMBERS: "Answer."] We can go into the full details of this in Committee, at which stage I will answer the individual questions asked by hon. Members. It would not be helpful for me to attempt to qualify what I have said on this issue at this point.
Sir Charles Mott-Radclyffe: The right hon. Gentleman has an advantage over me in that he has a copy of the Bill and I do not. Can he justify an anomaly by which, in terms of agriculture, the purchase of a new farm or the improvement of an existing one by bank loan will qualify for tax relief whereas the maintenance of existing buildings will not? Does he think that that state of affairs will be in the best interests of the Government's agricultural policy?
Mr. Diamond: I am not sure that I share the hon. Gentleman's views, but I will look carefully into what he has said.
Sir C. Mott-Radclyffe: Will the right hon. Gentleman give me a straight answer?
Mr. Diamond: Certainly. My answer is that I am not sure that I share his views.
Sir C. Mott-Radclyffe: If the right hon. Gentleman will study the Bill he will
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see the point I have in mind and the situation that arises.
Mr. Diamond: I said that I would look into the matter carefully. My first reaction is that I am not sure that I share the hon. Gentleman's views as to the present state of the law. However, I will be glad to look into the matter. The hon. Gentleman would not want a Finance Minister to give an authoritative reply "off the cuff". He would expect me to pay him the courtesy of considering very carefully what he said.
Time is short and I come to the provisions applying to close companies because, here again, I believe that what is provided in the Bill is widely welcomed, although I do not think that we have removed the misconceptions which we wish to remove.
The misconception to which I am particularly referring—I would call it a myth rather than a misconception—is the myth which persists in regard to shortfall assessments. A shortfall assessment is an assessment which arises when a business has not, in the view of the Revenue, declared a dividend which is appropriate in the circumstances of the business. The allegation is made, first, that the needs of the business are not considered when making a shortfall assessment and, secondly, that treatment varies as between one part of the country and another.
I do not think that there is any dispute between the two sides of the House about the need for shortfall assessments based on some criteria. This has always been the case and nobody would deny that it would be a major source of tax avoidance if close companies—one-man companies, family companies, call them what one likes—were allowed to carry on the activity of being money-boxes. What the law tries to do, therefore, is to envisage the situation which would have arisen had the shareholders and directors been at arm's length instead of being, as in the situation of a close company, one and the same person.
That is the test which is applied. The law makes absolutely clear that in considering whether there has been an adequate distribution the requirements of the business are to be taken into account and "requirements" means not only current requirements, but the requirement for maintenance and development of the

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business. If, therefore, a business is able to satisfy an inspector of taxes that the whole of the profits it has made for a particular year are needed within those words, then, of course, it need not, if it does not want to do so, issue a dividend of any kind and no shortfall assessment will ensue.
If, on the other hand, it does not need a penny of the profit which it has made for business purposes, but could distribute the whole lot, 100 per cent., it does not need to declare 100 per cent. If it declares 60 per cent. that satisfies the standard laid down in the Act. The situation is that the full needs of the business, both current and development needs, are fully taken into account. The arrangements, as far as I am aware, are sensible and working well. Certainly, the arrangements are much more lenient than they were in the pre-corporation tax era.—[An HON. MEMBER: "Rubbish."] It does not help the case for an hon. Member to say, "Rubbish". I am referring to the Act which did not provide for a 60 per cent. standard. I am referring to a situation in which the Revenue had no latitude whatever.
If there was a case where 20 per cent. was paid and the Revenue was able to satisfy the appellant tribunal that 40 per cent. should have been paid, 100 per cent. was deemed to be distributed; the Revenue has no latitude whatever. It was the dividend declared or 100 per cent. That is what I mean when I say that it was less lenient under the arrangements of right hon. Gentlemen opposite. The arrangements now are more relevant to business needs and so far as I am aware they work perfectly fairly, but we have not yet been able to extinguish this myth. Unfortunately, the right hon. Member for Barnet gave it voice as recently as 21st April. He said then:
"We welcome the close company concessions, but we are not sure that they go far enough. They leave the patchy administration of the short-fall computations which is causing considerable difficulty to many small close companies in different parts of the country."
HANSARD records that I intervened with rather more brevity than courtesy to say "Quite wrong" and the right hon. Gentleman responded:
"I invite the right hon. Gentleman to ask the people who know."—[OFFICIAL REPORT, 21st April, 1969; Vol. 782, c. 144.]
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That I want to record, because I have been asking about this for two years. It started by the Father of the House, late in 1967, asking a Question relating to this topic. He asked whether I would look into the matter and receive a deputation. I said that I would do so. This was followed by the hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin) asking, in November, 1967, whether I would be willing to consider this matter which was causing difficulty in regard to export houses at that time. I said that I would go further and would be glad to receive a deputation. These deputations have not materialised.
The hon. Member made it clear that there was a misunderstanding and this was not the point which was troubling export houses. That is the point I am trying to make. I am not running away from it; I am trying to make it. The House has heard me many times explain that there is no reason for a company to declare a dividend of any kind if it needs the whole of its profits for business purposes.
I go further. The Financial Secretary has helped me in this. He and I both have the good fortune to attend many trade association dinners and accountants' gatherings. Time and again one or other of us has been told, "These shortfall assessments are difficult and I have heard of cases where there is a problem". In each case my hon. Friend's reply and mine has been precisely the same, "If you have a case, let me have details of it and I will look into it". My hon. Friend the Financial Secretary is gracing our benches at the appropriate moment. Neither he nor I has ever received such a case.
I am referring to two years' experience. The right hon. Member for Barnet has alleged a number of cases of many small close companies in different parts of the country. If he will be good enough to give me those cases I will look into them. If he does not produce the cases—or it transpires that there has been an error, as on a previous occasion on the Opposition Front Bench—I hope that he will support me in explaining that we need small, young growing businesses to go ahead with their business needs and business development.
Mr. Maudling: I agree that, in general, this certainly is so. I know that many

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companies are not forced to distribute, but I have met at chambers of commerce and in other places people who do net understand this. I met a case the other day of someone who did not make an appeal, because his accountant advised him that it was not worth while appealing to the Revenue.
Mr. Diamond: I hope that the House will bear with me on this. The experience of the right hon. Gentleman tallies precisely with mine. We go to chambers of commerce and other gatherings and someone starts talking about these cases. I have always followed it up by saying, "Will you please tell this accountant you know about to get in touch with me and to put a case forward?", but none has arrived. The right hon. Gentleman is saying that at first-hand he has knowledge of cases which are working well. The only complaints he has are at second-or third-hand. He does not know them at first-hand. I am not seeking an argument with him, but I am seeking his co-operation in explaining to the business community that if there is a misunderstanding we both are anxious to have it removed.
Mr. Maudling: Perhaps one should get such a firm to change its accountant?
Mr. Diamond: That is something on which I would not wish to comment.
Mr. Barnett: Before my right hon. Friend leaves the question of close companies, may I interrupt him? As he knows, I entirely agree with all he has said and I am grateful for the relief he has given on remuneration, for which I have been pressing from the beginning. It would be useful to know whether he would be prepared to accept an Amendment, because now apparently this will be done on a time apportionment basis. There are many close companies where the directors draw a weekly or monthly salary throughout the year, then allocate a bonus. If this is allocated after 15th April, it will be assessed on a proportionate basis instead of the whole bonus being allowable as a deduction.
Mr. Diamond: My hon. Friend knows that I will consider carefully and sympathetically any Amendment he wishes to put forward. Sometimes, unfortunately, one has to reject such an Amendment, but
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that is very rare. I shall be glad to consider this problem if he will drop me a note or put down an Amendment—preferably drop me a note in advance.
Finally, I turn to selective employment tax, because I find one or two lingering doubts left in one or two quarters. I would like to remove them, if I can. I shall not delay the House by repeating what I said in the Budget debate. Everybody is familiar with the main salient points. Everybody knows that the tax produces more than £600 million a year. The alternatives would be to put standard rate income tax up to 10s. in the £ or to increase purchase tax by more than 50 per cent. through all the categories. S.E.T. is cheaper to collect than other taxes. Its impact on the cost of living is less than that of other taxes, and evidence is accumulating that it encourages efficiency. The House is very familiar with all that.
I want to move to the next stage. When these matters were last discussed I was asked why it is not applied to manufacturers as well, if it is a successful tax. It was gratifying to think that some hon. Members opposite were prepared to consider that it was such a good tax. It is not a very logical argument, if one is basing one's case on the selectivity of a tax, to say, "If it is such a good selective tax, why not make it unselective?" The reason for not making it universal, as has always been said from the day the tax was introduced, when the Opposition were considering an overall employment tax or payroll tax—I do not know whether they still are—is that such a tax would immediately put up prices all round. An employment or payroll tax would have exactly the same effect as an increase in wages. If it were overall and universal, it would immediately have the effect that prices would go up proportionately.
If what is being asked is whether it would be sensible to have a selective employment tax on manufacturing industry alone, a tax that is selective in that way as opposed to services, and if we are asked why we differentiate between the two, the answer is that the two industries do not function in the same way as regards production and arriving at prices. Putting this in its simplest terms, I remind the House that a manufacturing industry fixes its prices by reference to its prime costs—labour and materials, adding a

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percentage for overheads. [Interruption.] The manufacturer also takes account of whether he can sell his product, as the hon. Gentleman says. Everybody must have a price list. The manufacturer then considers whether it would pay him to reduce the price and sell more; whether he would recover his overheads better in that way.
The point I am making is that if there is an increase in prime costs the manufacturer immediately adjusts his selling price. If there is an increase in overheads, such as rates, which are a form of local tax as opposed to a national tax, he does not increase his price straight away. He may consider whether he would do better to reduce his price, maintain it, or increase it to cover his overheads as a whole, because the more he sells the more profit he will make, since the overheads are fixed.
That is the very simple situation with regard to arriving at the price. In a service industry such as distribution the prime cost is only the article that is bought in the first place. The whole of the labour cost of an employer in a service industry is an overhead. It is not like a manufacturing industry, where the majority of the labour is direct labour. Therefore, the price of the article is fixed by reference to the price paid plus the established mark-up, and if there is a variation in the elements which go to make up his overhead expenses he cannot adjust his mark-up automatically, nor does he try to do so. Both economic theory and accountancy experience march hand in hand here with the experience of the tax. Instead of the distributor's price being adjusted by reference to an increase in an element in his overheads, the increase is not passed on in that way.
Mr. A. P. Costain: Can the right hon. Gentleman explain how he relates what he has just said to the building industry? Does he recall that the then Minister of Public Building and Works said immediately after the Budget that S.E.T. would put £30 on the cost of a house? That does not coincide with what the right hon. Gentleman has just said.
Mr. Diamond: I was making the case in its simplest form. One must sometimes do that so that it will be readily under-
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stood. But I am grateful to the hon. Gentleman. He has been good enough to listen to me and follow the argument, and he distinguishes, as I do, between construction and distribution.
In construction, the hon. Gentleman has direct as well as indirect labour, and, therefore, the effect of the tax on the efficiency of construction is not so marked. But he will know from his experience in the industry that the effect is marked, and that efficiency has grown much more rapidly during the period of selective employment tax than it did before. This does not prove anything conclusively, but it is a happy thought that the imposition of selective employment tax has had that beneficial effect.
The cost to the Government of collecting S.E.T. is one-third that of collecting other taxes. That is a remarkable difference, especially since at first blush one would not expect this to be the case, because it is curious to collect a tax from a large number of people from whom one does not want it and then repay it after a period. When I made that point previously I was challenged on the cost borne by the taxpayer. I thought that that was a reasonable question, and so I considered what that cost was likely to be.
One has some experience in this. For example, one thinks of the substantial cost borne by the taxpayer as a result of the pay-as-you-earn provisions. Every employer has to alter his wages records and so on especially to enable this to be done. Many hon. Members will recall the tremendous fuss and the examinations by the House and Committees of the House when pay-as-you-earn was introduced.
I also invite the House to consider the cost of purchase tax collection, where the wholesaler must keep special records purely for the purpose. I invite the House to consider the cost in regard to income tax, where agreement on the tax payable by a company or an individual of substantial income takes hours of his time and often hours of his accountant's time. [Interruption.] I agree that investment grants also involve a considerable time. I also think of the cost of estate duty and the time of solicitors, counsel and accountants involved.
When one thinks of those things one realises what a large cost falls on a

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number of individuals when paying purchase tax, pay-as-you-earn income tax, Schedule D, estate duty and so on. One then compares that with the likely cost falling on the individual in the collection of S.E.T. All that a manufacturer has to do is to add up at the end of the quarter the amount paid, make one application, and receive it back in about 10 days. If the payer is in the tax-bearing sector, he has to do precisely nothing. There is no other tax where the cost of paying it is nil. No interest is involved as far as the tax bearing sector is concerned.
All the payer has to do is to buy a stamp, which he would in any event buy. It is differently marked and costs a different sum of money. There is no single additional administrative cost or overhead. It must, therefore, be the case, although one cannot assert it too strongly without an opportunity of examining individuals in the private sector, which is denied to me, that the cost of paying the tax is much less for the S.E.T. than for other taxes. I repeat, therefore, that the S.E.T. has these additional advantages to its benefit.
Mr. Norman Haseldine: Although I know that my right hon. Friend does not accept the argument, does not he concede that, if a payroll tax were inaugurated, one would still have an easy method of collection?
Mr. Diamond: A payroll tax would not be anything like as easy or as inexpensive to collect as an employment tax, which is a fixed sum for each employee. A payroll tax has to be calculated by reference to each employee's wages, which may vary from week to week. There are also problems of collection. It would merely result in increased costs and prices.
Sir G. Nabarro: Surely that alleged cheapness of the cost of collection of the S.E.T. is only because the whole of industry is giving a vast tax-free loan to the Government for many months out of every calendar year.
Mr. Diamond: It is giving an interest-free loan. The hon. Member has been good enough to listen to my case and it is interesting to note that he is not disputing that administrative cost is not there. He is complaining about the interest-free loan. I think that he is right.
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I think that most people have that in mind. The essence of and reason for the complaint is the interest-free loan. Of course, it is true that there is an interest-free loan. But this is why the tax is levied at the rate it is. If the Government are in receipt of a benefit arising out of a particular tax at a certain level, then, if they did not have that benefit, the tax would be at a different level. It is as simple as that. It is taken into account in the rates.
Sir G. Nabarro: It is a new doctrine
Mr. Diamond: It may be a new doctrine. I am sorry that the hon. Gentleman has not given it thought. It is a simple doctrine which applies to a number of taxes and I am glad that I have been able to explain to him something new.
Mr. Richard Wainwright: In his Budget Statement the Chancellor announced the exemption from the S.E.T. of certain important waste processing trades, such as metal and paper. In which part of the Bill is this provided for?
Mr. Diamond: Offhand, I do not think that I can help the hon. Gentleman on that. I do not think that it is in the Bill at all. I think that it is done by order by my right hon. Friend the President of the Board of Trade, but I will make sure and let the hon. Gentleman know.
Mr. John M. Temple: What progress has the right hon. Gentleman made in talks with the building societies about their support of the contractual savings scheme?
Mr. Diamond: I have nothing to report on that at this moment, but I take note of what the hon. Gentleman says. I recognise his interest.
I hope that I have been able to say what I have to say, in the context of what may be, in certain cases, an absent Bill, in a way which has enabled right hon. and hon. Members to understand the main issues.
5.25 p.m.
Mr. Patrick Jenkin: While we have many complaints about the Chief Secretary to the Treasury, we must admire the dogged persistence with which he returns to the

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defence of his beloved selective employment tax. He said that a number of people have lingering doubts about it even after the speech he made in the Budget debate. That was the understatement of the year, considering that the increase in the tax produced a catastrophic fall in the Government's majority on the relevant Budget Resolution, in the prompt sacking of the Chief Whip and in his replacement by the right hon. Member for Bermondsey (Mr. Mellish). In view of all that, all I can say to the Chief Secretary is, "Some doubt! We have heard from the hon. Member for Bradford, West (Mr. Haseldine) an indication that many hon. Members, and not only on this side of the House, remain totally unconvinced of the case for the S.E.T.
The right hon. Gentleman dealt with the increase in corporation tax equally unconvincingly. If one increases the rate of corporation tax, either the amount is going to be met out of retained profits and so reduce the amount available for ploughback, or it is going to be passed on in higher prices to the consumer. These are the two alternatives and it is the height of naivety for the right hon. Gentleman to argue that this is not going to have any effect on the propensity of industry to invest.
The survey to which the right hon. Gentleman drew attention was taken well before the Budget and in some cases before the effects of the November measures can possibly have had their result. Every single forecast of investment that the Government have made has turned out to be over-optimistic. We should be delighted if on this occasion the opposite were to happen and we really did get an upsurge of investment. But if it happens it will be the first year since the Government took office in which we shall have had an increase in the ratio of investment to gross national product. It will be welcome if it happens but I shall wait until I see it.
The Second Reading of a Finance Bill tends sometimes to be a bit of a nonevent. It comes halfway between the Budget debate and the Committee stage. It is too soon to review the Chancellor's Budget judgment, and we shall have an opportunity of doing so in the regulator debates in Committee, when we shall have had a few more economic indicators such
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as the unemployment and trade figures. Equally, it is inappropriate that we should look too closely at the details of all the Clauses and Schedules. These are better left to the Committee stage, particularly as on this occasion many hon. Members have not got the Bill in their hands. So, instead, I want to comment on certain general aspects of the tax system and fiscal procedures which do not always get the attention they deserve, but before doing so I wish to deal with two special matters.
First, the right hon. Gentleman did not mention the astonishing statement that we had yesterday from the Secretary of State for Social Services. It was reported on the tape this morning that the Secretary of State, in dealing with the row which has blown up between himself and his supporters, has confessed to maladroit timing. Hon. Members opposite have been fiercely critical of him not because of any national interest which may be involved but because they think that his statement has damaged even further their prospects in local elections this week. That is their problem, however, and I shall not intervene in the love-hate relationship between the Secretary of State and hon. Members opposite. However, I am bound to ask one question which is of wider interest.
I hope the Minister of State will be able to answer this when he winds up the debate. Why was this statement about the health charges not included in the Chancellor's Budget Statement? It was reported credibly by the political correspondent of The Times that this decision was taken months ago. The political correspondent of The Times said this morning:
"I understand that the decision in principle to raise the charges was taken six months ago, and Mr. Crossman himself had not appreciated until yesterday morning that it would emerge from the administrative machine after Question time."
Now, I understand, the situation has been further complicated because the right hon. Gentleman is reported as saying on "The World at One" that he had hoped that the announcement about increased charges for dentures and spectacles would be made in the Budget speech. Why on earth was it not made then? Who vetoed the statement?
Was it the Chancellor or was it the Prime Minister? Why was it that we

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had the announcement about pensions with no figures about contributions, yet here is the Secretary of State saying that he had hoped that his health statement would have been included in the Budget Statement? Was it perhaps because only the day before the Budget the right hon. Gentleman had said in answer to his hon. Friend the Member for Sheffield, Heeley (Mr. Hooley):
"If my hon. Friend is asking me whether I expect further charges to be imposed on the Health Service the answer is 'No'."—[OFFICIAL REPORT, 14th April, 1969; Vol. 781, c. 771.]
This episode has been represented in the Press so far as one of the right hon. Gentleman's outstanding political gaffes. If the information in The Times is correct, and the decision was taken months ago, if the report on "The World at One" is right, that the hon. Gentleman had said that he had hoped that this would be in the Budget Statement, it seems that he has a great deal more to answer for than a political gaffe. In his reply the Minister of State must come clean and tell the House the whole sordid story behind this disgraceful episode. Have Ministers merely been guilty of muddle or is their behaviour a good deal more devious than that?
Sir Cyril Osborne: Why did the Prime Minister not tell that to his captive audience on Sunday?
Mr. Jenkin: It has been suggested that the Prime Minister did not know anything about this, and that would not surprise me.
There is one aspect of the Budget judgment, to which the Chief Secretary referred, upon which we want some further elucidation. So far this has not had the attention it deserves. I refer to the Chancellor's intention that the Government should this year become a net repayer of debt on a massive scale—I think his figure was £807 million. He has said nothing on how this will be effected. The Chief Secretary said in a throw-away phrase that this would be a repayment of debt to the banking sector. The Chancellor assumed that the repayment would inevitably be beneficial to the economy.
Surely this depends on the method. Many people have assumed that this would take the form of a purchase, or
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redemption, of gilt-edged held by the non-banking public. I hope that the Minister of State will be able to enlarge on what the Chief Secretary has said; namely, that the Chancellor is proposing to redeem Treasury bills as they fall due and then not reissue them. If this is the case, what will be the effect on the liquidity of the banking system? Treasury bills, as I have always understood it, have been part of the liquidity ratio which the banks are required to maintain as part of their compliance with Government policy.
If there is to be a massive reduction in the amount of Treasury bills outstanding, is it not the case that that will of itself represent a further harsh twist in the credit squeeze? We are talking about very large figures; £807 million is more than twice as much as the amount by which the Chancellor is increasing taxation in a full year in this Budget. We must have some indication of what the Chancellor's intentions are over this massive repayment.
I turn now to more general matters, with a brief look first at some of our fiscal procedures. The right hon. Member for Devon, North (Mr. Thorpe) in his speech in the Budget debate called for a wide-ranging Select Committee. My right hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd) thought that perhaps a more narrow-ranging Select Committee would be useful. Both were looking for ways of supplementing our existing machinery for promoting tax reforms. I want to look at a slightly different aspect.
My experience has been confined to debating the Finance Bill from this side of the House, and, last year, in Committee. Even in that short time I have become convinced that the way in which we legislate our changes in our tax laws does this House and the system we operate little credit. Like many hon. Members, perhaps more than some, I have regular dealings with those in commerce and industry and in the professions who have to operate the laws which we pass. I find, almost universally, a deepening despair at the mounting complexity of our system; at the appalling complications of the mass of anti-avoidance legislation which comes on to the Statute Book every year; at the sheer unintelligibility of many of the sections

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and schedules which we pass into law. I find a rising concern for the amount of discretionery legislation which is being passed—inspectors being given wide powers, which they may or may not use as they choose; Ministers empowered to impose taxation or to exempt from taxation, simply by departmental fiat.
I find a growing resentment at the increasing tendency of Governments to legislate retrospectively, not merely to cancel out the skilful avoidance devices of the professional tax avoiders—it has always seemed that retrospective legislation may be defensible in those circumstances—
Mr. Hirst: Why?
Mr. Jenkin: Perhaps we will pursue this later. I know that my hon. Friend has long campaigned on this issue. When retrospective legislation is used to upset well-settled, long-sanctioned arrangements, sensibly entered into in good faith and relied upon to give effect to legitimate transactions, then it is totally unacceptable. We have had too much of it.
I find a growing anger at the sheer "hit and miss" quality of some of the Clauses which we enact, Clauses aimed at preventing unacceptable tax avoidance by the wealthy which end up penalising entirely innocent taxpayers with very modest incomes and means. Clauses aimed at taxing transactions of one sort are used to catch transactions of a wholly different sort never contemplated when the Bill was going through Parliament.
Most serious of all, I find that the high standard of tax morality which for so long has held sway in Britain is being threatened by erosion, which is the inevitable result of a system which increasingly displays the characteristics I have described. When people feel that the dice are loaded against them, the temptation to retaliate in kind is very strong.
I do not believe that I am overstating the problem when I say that if we go on as we are there is a real danger that the system will break down with catastrophic results for every citizen. The fault lies partly in the penally high rates which we persist in imposing, resulting in the fact that the rewards for successful avoidance are correspondingly high. Many people engage their energies and ingenuity, and employ top professional
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advice, to try to steer a way through the labyrinth—a totally unproductive labour.
In part it is the fault of an over-sophisticated pursuit of absolute equity. A tax system, it cannot be said too often, can be either simple or fair; it cannot be both. We try to pursue equity to an unacceptable degree. But to a major extent the blame lies in the inappropriate procedures by which we choose to put complicated technical fiscal legislation on the Statute Book.
The Financial Secretary to the Treasury (Mr. Harold Lever)indicated assent.
Mr. Jenkin: I am glad to have the support of the Financial Secretary.
Many features of this have been criticised. In his forthcoming book, Sam Brittan tilts hard at what he calls the cult of excessive Budget secrecy. Selective employment tax is a classic example of that. It burst upon an unsuspecting public on Budget day, passed into law two or three months later and now, most people agree, is so riddled with anomalies and nonsenses that the only remedy is to sweep it away and start again. There is the lack of prior consultation, whether of industry or of the professions, which allows the Revenue to insert Clauses into Finance Bills which can have effects wholly different from those which they may genuinely have contemplated.
There is the limiting effect of Money Resolutions. We shall be debating some later. They cut down even the Amendments which may be tabled to relieve the taxpayer of some of the effects of a Bill so that whole issues are never debated. We have even had the operation of the guillotine on the Selective Employment Payments Bill and the Finance Bill last year.
Mr. J. Bruce-Gardyne: My hon. Friend referred to lack of prior consultation in the context of S.E.T. But would he not agree that our experience, for instance, over R.E.P., which the Government always blazoned abroad as a case in which there was prior consultation, proves the complete inadequacy of this, unless the prior consultation is a reality? They had plenty of advice and took no notice of it.
Mr. Jenkin: If my hon. Friend will wait, I have my own solution to some of these problems.

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But basically there is the sheer inadequacy of the machinery of debate. Let us not delude ourselves: when we think that we are doing rather well on some complicated Finance Bill Clause, plenty of people outside are completely convinced that we have missed many of the main points—and they are probably right. In this context, it can be seen that proposals to take the Bill upstairs, downstairs or in my lady's chamber are a futile and irrelevant tinkering with the system. We must have less secrecy and more consultation; but above all we must have an opportunity for hon. Members to hear at first hand evidence from the real protagonists in much of this legislation—the Revenue on the one side and the professions on the other—as to the issues and the merits of the legislation which we are considering.
Of course, I would exclude budgetary matters from this. The economic management of the country, the rates of taxation, the scope of indirect taxes are clearly matters which must be left to the Chancellor on Budget day. But the management of the tax system, the introduction of new taxes, the changes in the structure of our tax system, complicated anti-avoidance legislation and detailed method of computation—there is no reason why those should not be discussed openly and publicly before they reach the House.
Speaking entirely for myself, I should like a wholly different procedure. I should like these matters to be referred perhaps to a small Select Committee, which would have draft legislation presented to it. It would hear evidence from the Revenue and from representatives of taxpayers, from the professions, from industry and so on, and it would present a Report to the House which would then be available as a Preamble to the Bill. I stress that this must involve draft legislation, because it is only when legislation is in draft that one can appreciate the real complications, anomalies and problems which are likely to arise.
I cannot believe, for instance, that if this procedure had been followed capital gains tax would have reached the Statute Book in its present hideously complicated form. If a Select Committee had been able to comment on that before the
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Government were politically committed to the details, we might have had a much simpler tax.
I have dwelt on this procedural aspect at some length because, while I am not so presumptuous as to believe that it is very original or is a cure-all for our fiscal ills, it is one avenue worthy of exploration through which we might escape from a situation which seems increasingly to embroil us.
This Bill, with its 200 pages, 53 Clauses and 21 Schedules, contains many of the evils of which I have complained. There is the fearful complexity of a whole battery of new anti-avoidance Clauses, about artificial transactions in land, disallowance of trading losses and so on. There is the wiping out of well-settled, long-sanctioned reliefs, so as to defeat existing arrangements. The disallowance of interest on loans falls into this category—loans which have been incurred long before Budget day—and this means that people now face serious problems with their personal affairs.
I should like to mention two difficulties which the Chief Secretary did not mention. Does he realise that by this disallowance of loan interest the Government are kicking away one of the remaining ladders of advancement for the young executive and technologist who is anxious to acquire a share in the enterprise for which he works? In 1967 the Government killed the stock options, and now they are killing loans to buy shares in the firm—arrangements in many cases sanctioned by the Inland Revenue. The Government seem to be driven by a sort of madness to destroy all incentive for rising young managers and technologists, who see no hope of building up savings out of their net income and suffer penal rates of direct taxation.
In the Budget debate, the Chief Secretary claimed as a merit for the Government's policy that it was shifting the burden from owners to earners. This provision and others are calculated to ensure that many earners will never be able to become owners, and that is not a society in which I want to live.
A second point is that this is wiping out a form of tax encouragement to saving through life insurance. The right hon. Gentleman made that clear. Only

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last year we debated for hours in Committee a Clause, which the Financial Secretary introduced, regulating minutely the provisions for life insurance, including the question of tax relief on interest on loans borrowed on the strength of policies, and many thousands of people, I am told, have adjusted their affairs in the light of last year's Act. Now they find that Clause 18 has wholly nullified their arrangements. I beg Ministers to realise the sense of fury and frustration which this sort of legislation causes.
Again, there is the Clause intended to deal with the pop stars' much publicised avoidance device. It seems likely, so widely is it drawn, to hit many perfectly genuine business and professional transactions of men who seek to sell part of their business as a going concern. This has rightly been described as "shotgun legislation"—the indiscriminate peppering of a wide area in the hope of hitting the target aimed for, but without too much concern for its effects on innocent bystanders.
It is this sort of legislation which drives accountants to drink—I hope that my hon. Friend the Member for Scarborough and Whitby (Mr. Michael Shaw) will forgive me. We shall wish to probe these matters in Committee, but they seem to epitomise exactly what is wrong with the sort of fiscal legislation which we pass. It should become a major preoccupation of Treasury Ministers to simplify and render intelligible our tax system so that it can be understood so far as possible by ordinary people. But there is no doubt that the high marginal rates of direct taxation have been a major factor in this, and here the Government's record is disastrous.
Ministers are often fond of pointing out—my right hon. Friend the Member for Enfield, West (Mr. Iain Macleod) has made this point in a number of articles—that the overall weight of taxation in this country is not seriously out of line with that of our major competitors, but they readily admit that at the higher levels of income direct taxes bear a good deal more heavily on taxpayers here than those abroad. But what the Government will not recognise is the comparatively low level of income at which this discrepancy begins to appear.
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For instance, according to a Parliamentary Answer at the end of last year, a married man with two children under 11 earning £2,500 a year—a modest professional or managerial salary—pays 8 per cent. of his income in tax in the United States, 12·6 per cent. in Germany and 22·1 per cent. in the United Kingdom. The figure which I was given for France was just over 5 per cent., which I did not believe, and I have not quoted it, although it may be true.
The Government have made the situation very much worse by a long series of anti-avoidance measures which have had the effect of putting up tax on ordinary incomes—this is something the international comparisons tend to leave out of account—the disallowance of tax relief on covenants, the imposition of fiscal penalties on stock options, the aggregation of minors' income, the 10 per cent. surcharge in surtax which took effect last year and now the disallowance of relief for loan interest. All these weight the system heavily against the United Kingdom taxpayer to an extent which the statistics do not recognise.
Although the standard rate was raised by 6d. in 1965—and that has been the only direct increase in income tax—between 1964 and 1968 the proportion of total personal incomes taken in direct taxation has risen from 10 per cent. to almost 13 per cent., a rise of nearly one-third, and the proportional increase is much higher at the higher levels. This is the effect of inflation on a tax system which is highly progressive. Inflation means that unless rates are reduced or allowances increased year by year the weight of tax presses more and more heavily even though the rates are not put up.
I can illustrate this best by looking at the total tax increases since 1964. The sum of all the increases in rates and new taxes which Labour Budgets have introduced since November, 1964, amounts to £2,620 million; that is to say, that is our estimate of the full-year yield of permanent tax changes introduced by Socialist Chancellors. If the yield of current taxation is compared with the estimated yield of what the 1964 rates would have pro-ducted if applied to the current economy, the result is an increase of more than £3,000 million, and the difference between that figure of £3,020 million and £2,620

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million, the additional £400 million, represents the impact of inflation on a progressive system, and that is £400 million more than has been imposed in every Budget but one since 1964.
Socialist Ministers pretend that people have been brain-washed into an illusion that they are heavily taxed. There is no illusion. In 1964 the total proportion of rates, taxes and contributions represented 33·8 per cent. of the g.d.p. In 1968 that had risen to 42·3 per cent.; in 1969 it will be higher still; and we still await the announcement of what the contributions will have to be to pay for the pensions which the Chancellor invitingly dangled before the people in his Budget statement. This must be one of the most disreputable episodes in budgetary hissory. I assure the Chief Secretary, and any who may share his view, that the increase in the weight of taxation from 33·8 per cent. to 42·3 per cent. is no illusion. It represents a burden which Socialist Ministers, Socialist policies and Socialist failures have laid upon the shoulders of the British people.
The evidence now is that some Ministers are beginning to recognise that they have gone too far, and the Chancellor in his Budget Statement recognised that a reduction in direct taxation of high incomes is a high priority. We welcome this sign of enlightenment. But compare it with what the Chief Secretary has been saying. On the last day of the Budget debate he devoted a large part of his speech to justifying high and rising levels of taxation. He said it was all part of the redistributive process and went on to say that the Budget
"… will have the effect of reducing the inequality of incomes by a further 2½ per cent."—[OFFICIAL REPORT, 21st April, 1969; Vol. 782, c. 58.]
This is yet another manifestation of the Government's schizophrenia. The Chancellor's high income earners are given a promise of reliefs to come, while the Chief Secretary struggles to retain the support of the rebellious benches behind him by boasting about how the Government have made high income earners worse off. The Government cannot have it both ways. The truth is that under Socialism virtually every taxpayer pays more tax and the prospects of relief get more and more remote.
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Under the Tories many taxes were reduced—income tax down, purchase tax down, beer duty down. When increases were made they have been overwhelmed by vastly bigger increases made since 1964.
For instance, in 13 years the car licence went up by £2 10s.; in 4½ years it has gone up by £10. In 13 years petrol duty went up by 10½d.; in 4½ years it has gone up by double that amount, ls. 9d. The Tories got rid of bad taxes such as entertainment duty and Schedule A. The Socialists have introduced bad taxes, such as selective employment tax and betterment levy. The Tories took millions of people out of tax altogether, but even after this Bill becomes law there will be 2 million extra taxpayers over and above those who were within the net in 1964. Socialism and high taxation go together; they have become synonymous in the public mind; and the Labour Party is paying the penalty in every local election and in every by-election which it has to face. This Bill gives yet one more vicious twist to the screw, and that is why we shall divide the House against it tonight.
5.55 p.m.
Mr. Robert Sheldon: The hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin) at the beginning of his speech asked why the announcement of the increased health charges was not made in the Budget speech, and attributed this omission to duplicity on the part of my right hon. Friend the Chancellor of the Exchequer. I find this allegation hard to accept. It would be difficult to find a more politically damaging time than yesterday for announcing the increased charges and therefore no duplicity arises.
The hon. Gentleman has become a recent convert to procedural reform, and I welcome him into the ranks of those who are pressing for the appointment of a Select Committee to examine the aspects of taxation which are amenable to rational discussion and debate without the need for observing secrecy. Two elements in the Finance Bill which might have benefited from examination by a Select Committee are the principle of disallowing loan interest and the principle of selective employment tax, where anomalies exist and where a Select Committee might have reduced the unfairness of operation and the distortion of decision-making by those

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affected by the tax, which is harmful to the economic interests of the country. A Select Committee might look at the minutiae and at the principles, and this might be of value in getting the financial legislation that we need.
One problem on the disallowing of loan interest is the discrepancy between capital gains tax and income tax and surtax. At present high income tax payers and surtax payers obtain interest at favourable rates, and this enables them to make capital gains which are taxed at a lower rate. I want to see the rates of capital gains tax and income tax and surtax approach each other, with income tax and surtax coming down and capital gains tax going up. This would have to be a gradual process over the years. In these early years of capital gains tax progress in this direction is likely to be slow, and needs to be, but such a movement over the years is of importance in creating the kind of legislation which is needed because of the different way in which capital gains tax and income tax are treated. It is the increase in wealth which is important, and this kind of sophistication will be required in the corning years.
Mr. Michael Shaw: Why does the hon. Member consider only the possibility of increasing capital gains tax? Why does he not equally consider the possibility of reducing rates of income tax and surtax?
Mr. Sheldon: It is a pity that the hon. Member did not hear what I said. That is precisely what I was saying, that there should be a reduction of income tax and surtax and an increase in capital gains tax so that the gap between them would narrow by the reduction of the one and the increasing of the other. I look forward to seeing such a process come about, although owing to the complexities of the issues which are involved it will need to be gradual.
The present Finance Bill comes before us in the long-term situation which has existed in this country ever since the early 1960's. My assessment of the situation is that the economic problems started in the early sixties and have formed part of a similar pattern from 1962 onwards. The situation has been affected by the loss of advantages which we once enjoyed from the empire, and the need to adjust to our changed position in a world in which we
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no longer had these investments and markets open to us.
Perhaps the years of Commonwealth economic development were too protracted, since they permitted a distortion of the industrial economy which was once the pride of our country. Had the process lasted any longer, it may well have produced a distortion which it would have been impossible to correct. But in the last couple of years the Government have been seized of the situation and have taken a number of realistic measures, even if they were rather late in coming.
Among these realistic decisions was the decision to withdraw from our world rôle; the decision to devalue, even though it came very much too late and possibly was inadequate in extent; the decision to restructure industry, even though restructuring may not mean all that much more than that the Minister of Technology looks after the car, computer and other industries, the Industrial Expansion Act, the scheme for shipbuilding, and the setting up of the I.R.C. Though these are limited steps, they are valuable and have led us to move into an area in which we must be involved.
I maintain that we took the wrong turning on prices and incomes in that we tried to introduce certain distortions of doubtful value. I suspect that we may be taking the wrong turning on trade union reform. But at least the Government have shown themselves to be aware of some of the important changes which have been taking place. The adjustment process has gone not nearly far enough. We need to adjust very much more than we have done because much of our present thinking is still geared to the past rather than to current considerations.
Even at this late stage there is a tendency to underrate the magnitude of the problem which faces us. We need time to change our industry, time to change our methods, time genuinely to restructure industry. It may last many more years than the Government or Opposition even suspect at present. In dealing with our balance of payments problem, we need to rephase the debt to the I.M.F. on a much longer-term basis or obtain other loans than perhaps even hon. Gentlemen opposite at present suppose.

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The only alternative to this is to live upon doles by the I.M.F., which may prevent our getting the kind of investment which is required. If we are serious about getting real investment in this country, it will produce enormous balance of payments difficulties. Therefore, we need to rephase in a massive way, and the only real way to achieve this aim is to ask for loans on a long-term basis. If loans are not available, then import quotas—not a happy prospect—are one method of reducing the high level of consumption and of producing the increase in investment which will be necessary.
We can take such a step, or we can sink into a pessimistic philosophy that there is something wrong with this country, that we have not the techniques, understanding or attributes of management or of workers, and that we are marked out as somewhat inferior to other European countries. In no circumstances am I prepared to accept that sort of attitude. What we must do is to try other alternatives, however unpleasant they may be for us.
I am worried that the people who have the responsibility to take decisions which may prove unsuccessful may find themselves forced into taking a pessimistic view about what is wrong with our country and may refuse to take the realistic alternatives before us. We need to accelerate the cutting down of our commitments to defend a vanished empire. We need to speed up cuts in Government expenditure overseas—expenditure which last year cost £462 million. How relevant is such expenditure to our present economic problems? The first priority, above all others, is the priority to invest and to expand. We must judge the Government on this basis, and almost solely on this basis.
If the methods which are followed to produce these results are unpleasant and unpalatable, we must be prepared to accept them however unacceptable they may be. We should not accept the attitude that we can go along to the I.M.F. and obtain doles to keep us going at a miserable level of economic performance which prevents a real break-through and which could have the most harmful results to our country's economy.
Sir C. Osborne: Is the hon. Member suggesting to his right hon. Friend that the I.M.F. would do us a great disservice if it were to refuse any more loans and make us work out our own salvation?
Mr. Sheldon: I am not saying that. I am saying that if the repayments of debt become impossible, we should not have just sufficient to pay back the I.M.F. and keep on with measures of austerity and a low-growth economy, but should ask the I.M.F. for something much bigger than it has accepted in the past. If that is not acceptable to the I.M.F., I have suggested other measures which might be taken.
Sir C. Osborne: Oh.
Mr. Sheldon: It is a pity if the hon. Member is surprised. This is the serious situation which we face. It is not sufficient to ask for short-term loans which we know we must repay and, in order to repay them, run our economy at a lower rate than necessary. A low rate of economy means inadequate investment and expansion, and in investment lies our real salvation as a trading country in the world. That is the way we should proceed.
I understand that the Budget and the Finance Bill have been introduced to take account of possible changes which are likely to take place internationally over the next few months. It may be that some means is required to deal with the changing situation arising from the circumstances in Germany and France.
As I see it, the Budget decision is a delaying one whereby one takes a step along a tight-rope—because the balance is a very fine one—and at the same time waits for whatever may happen, whether it be a realignment of currencies or an increase in liquidity, in terms of the international monetary situation.
I have always felt that the realignment of currencies was the most important consideration in international money matters. It is far more important than increases in liquidity, which to a certain extent are not much more than a confidence trick in that one merely increases the amount of money available rather than concentrates on the differences between countries. I say "to a certain extent" because I realise that certain

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plans allow for a considerable amount of money going to under-developed parts of the world. If this were seriously a proposition, I should be more than delighted to see it happen. It is because I think it is unlikely that I say that increases in liquidity are less important than other commentators consider them to be.
What is important is the necessary realignment of currencies. What worries me most is not the German revaluation or the French devaluation but that the revaluation of the Deutschemark will not be enough. Germany has been able to continue to increase her exports at an enormous rate. Most of the developed countries in the Western world are increasing their exports to an extent which even in what we consider to be a good year makes ours look a very sorry performance—
Sir C. Osborne: Why?
Mr. Sheldon: When we congratulate ourselves on our export performance, we must understand that ours has been one of the worst in the Western world—
Sir C. Osborne: Why?
Mr. Sheldon: This is a measure of the difficulties facing Britain today. What worries me is not the Deutschemark revaluation but that it will not be enough. I am sure that Germany could accept 10 per cent. but, bearing in mind the Customs duties which are at present organised to give her a 4 per cent. revaluation, this would be an effective revaluation of 6 per cent. That is totally inadequate. The strength of the German economic competitive machine is such that a revaluation of 20 per cent. would not be out of line. What is so dangerous is that this is quite unrealistic in the context of German thinking today. We shall not get the kind of revaluation that is necessary, and so the problem in the Western world will remain.
Sir C. Osborne: Instead of worrying about the Germans, surely the hon. Gentleman should be considering what is wrong in our country. Of course they are doing better. Why are they doing better? Why is their currency stronger? It is no good trying to legislate for that. The hon. Gentleman should be thinking about our problems.
Mr. Sheldon: The hon. Member for Louth (Sir C. Osborne) has not got the burden of my argument. The whole point is that what we do is done in the context of what is happening in the Western countries. I should have thought that, with his hon. Gentleman's knowledge of international finance, the hon. Gentleman would understand that the exchange rates which are operating are a great barrier to our exports, and the advantages that Germany has are obvious.
What we may see is a possible competitive devaluation, which I do not regard as a realistic possibility; a competitive deflation, which is much more serious and in which we are not likely to be able to ask for some sort of capital inflow; or some method like the imposition of import quotas where we can take direct action ourselves.
The first matter that we need to consider is whether we should put growth as the major unquestionable priority. Certainly I think we should. This Finance Bill makes no great contribution in that direction—[Interruption.] I hope that hon. Members opposite will put forward serious arguments as to why it does not and not make trivial points about small increases in taxation here and there.
The strategy is all important, and it is the strategy which Conservative Governments in the past have got wrong. Unfortunately, Labour Governments also have got it wrong—
Sir A. V. Harvey: The hon. Gentleman complains about the value of the German mark. Perhaps he will cast his mind back to 18 months ago when his Government devalued the £ and promised great things as a result. Britain was the last Power in the Western world to devalue. Would he care to give us his opinion about that?
Mr. Sheldon: It is apparent that the hon. Gentleman still has not got my point. I am arguing in the context of the economies of the Western world and saying that we need to study them in this connection. To make petty party points at a time when we are really concerned with economic survival is a failure to understand the real problems facing Britain today.

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At this stage of the Finance Bill, I find it difficult to criticise in any detail the tactics of it when there is so much with which I disagree about the strategy. That it is deflationary is obvious, but it is not deflationary merely to the extent of the £243 million referred to by the Chancellor. When one considers this year's Budget and compares it with previous Budgets, it is deflationary to the extent of £500 million a year. In other words, it is deflationary to a greater extent than is currently recognised because of the November measure, which in itself introduced a further measure of deflation that has been incorporated in this Finance Bill.
As a result of the deflation, we shall see a loss of production, a loss of investment, and, most important in an industrial context, a loss of the new techniques of manufacture which we need to understand and mobilise in the interests of the country. It is a loss that we shall never restore. We all know the argument that once one loses the machinery which should have been installed one loses not only the productive potential of the machines but also the skills arising from them.
Walking on the tightrope, as the Chancellor intends over the next few months, what is the outcome if consumption runs ahead of what he has planned? We know that he has drawn a very fine line, for reasons which we must congratulate him. He does not wish to deflate more than necessary, yet he knows that there are tremendous uncertainties ahead. He has had to decide how the level of consumption is to be permitted to increase. What will he do if consumption rises more rapidly than he has expected? What remedy will he introduce? Shall we have another rotation of the purchase tax regulator wheel? Shall we have further cuts of one kind or another?
By now, all Chancellors have learned that consumption in this country cannot be cut—
Sir C. Osborne: Why not?
Mr. Sheldon: I will tell the hon. Member for Louth why. There is a level of expectation in the country which compares the situation here with what is going on in other countries. While the people may not insist on the very high
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increases being obtained elsewhere, we regard a steady if small regular increase as our right. That is what our people expect, and I fully support them. After all, it is what we encouraged them to expect, and it is perfectly reasonable. We cannot reduce consumption; so, if the Chancellor's estimates prove to be out of line, he will be faced with the dilemma of deciding what further action he should take. It is no use coming up with anything further in prices and incomes now. It is no use expecting much from industrial reform. None of these methods are going to produce results at this late stage. What may well come, if his estimates are wrong here, is a fundamental rethinking of the strategy which it is a pity was not undertaken a long time ago.
Several Hon. Members rose—
Mr. Speaker: Order. I remind the House that many right hon. and hon. Members wish to speak. Reasonably brief speeches will help.
6.20 p.m.
Mr. J. Grimond: It is appropriate on Second Reading of the Finance Bill to ask what the Chancellor's aim either is or should be. We have been told by the hon. Member for Ashton-under-Lyne (Mr. Sheldon) that his aim should be expansion. If that is his desire, then the Chancellor must be a disappointment to him. I doubt whether that is the Chancellor's aim. His aim in the Budget is to deal to some extent with the balance of payments.
The hon. Member for Ashton-under-Lyne also said that he would not be against further massive borrowings. What he did not seem to stress sufficiently was that we have already undertaken extremely massive borrowings. I do not know how much we owe, but it must be about £3,000 million, much of it guaranteed in gold or at least not payable in further devalued currency. That presents us with a considerable problem and the Chancellor's Budget will not make much contribution to that problem. That is not entirely the Chancellor's fault. It is extremely difficult for a Government which have lost the confidence of this country and the world, at the rate which this Government have, to deal with this problem.

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In the last few days we have seen another example of their extraordinary mismanagement. The performance of the right hon. Member for Coventry, East (Mr. Crossman) has already been mentioned in the debate. It was a most extraordinary affair. He must have given up reading the newspapers. He told us that he was unaware that local elections were about to take place. I understand that he was once in charge of psychological warfare. Against whom he is conducting psychological warfare may be a little obscure. It is difficult to believe that he has inspired a great confidence in our general management by making a statement which he had not realised was to be made at a time—
Mr. Speaker: Order. With respect, we are discussing the Finance Bill, not the statement made by the right hon. Member for Coventry, East (Mr. Crossman).
Mr. Grimond: The Finance Bill cannot be entirely dissociated from the general management of the Government. However, I will pass to another matter.
Last year we were told that devaluation would result in being in balance in that year and having a surplus this year, and that, after two years' hard slog, all would be well. All these forecasts have proved to be wildly wrong.
As the hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin) has said, the effect of a confusion of taxation is profoundly depressing to all who are attempting to run British industry or export. The hon. Gentleman mentioned, quite rightly, that year by year people who are conducting their businesses to the best of their ability and are not aware that they are doing anything wrong suddenly find themselves clobbered out of the blue for no reason. The hon. Gentleman had suggested—and I agree with him, because I have suggested these things myself—that it is high time that this House reformed its own procedures and set up a Committee to investigate our financial management. This was suggested both by my right hon. Friend the Member for Devon, North (Mr. Thorpe) and by the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd). While I am in favour of Select Comittees, I believe that they should be closely geared into the process of government. We are not a research organisation. I agree with the hon.
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Member for Wanstead and Woodford that they should be investigating either draft legislation or matters which may become the subject of draft legislation.
I do not think it is out of order to mention that the Government have produced a Green Paper on public expenditure which seems to forecast that it will be possible for the House to consider priorities in public expenditure, to examine possible alternatives and to set such alternatives against taxation and the national revenue. I think that this would be a valuable step forward and I hope that the Government will proceed with these suggestions.
This brings me to the Government's expenditure, which is at the root of our debate today. The Finance Bill is largely concerned, though not entirely, with regulating the economy and making it possible for a large amount of public expenditure to be carried on without causing acute inflation. It has to make room for large public expenditure by ensuring that the private sector does not create too much demand. Therefore, it is absolutely vital that the Government should control the public sector not only in the sense of limiting the amount of expenditure but in ensuring that they get their priorities right and get value for their money.
That is not the case now. I hope that these new procedures may improve it.
It is important to look at the Bill as mainly an exercise in attempting to keep the economy on a fairly even keel and making room for public expenditure. There are constant arguments—I have heard them ever since I have been in the House of Commons—whether Governments are right in taking £100 million, £150 million or £200 million out of the economy. I have never understood these arguments as having any great relevance, because the estimates are always out by as much as three figures. So whether they take out £50 million this way or £50 million that way seems unimportant. But there is no doubt that if the Budget goes in the wrong direction, we can expect either further inflation or unjustified deflation.
I do not entirely agree with the hon. Member for Ashton-under-Lyne that it is impossible to reduce demand and that consumption is rising. In certain sectors consumption is falling, and I am doubtful

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whether consumption will rise in the near future. In certain trades—for example, the motor trade—home consumption is not rising at all. But I agree with the hon. Member for Ashton-under-Lyne that in the long term we are breeding an inflationary outlook. People are expecting it. This is an extremely serious situation for a debtor country largely dependent on exports.
The Chancellor must be given credit for attempting to bring in savings as a means of reducing demand. We on this bench would criticise his contractual savings scheme as being too narrow. The term "save-as-you-earn" was, I think, invented by my hon. Friend the Member for Colne Valley (Mr. Richard Wainwright). We are pleased to see that the Government are beginning to think in this direction, because savings, although not the complete answer, are certainly a help in combating this inflationary outlook.
Despite the Chancellor's greater reliance upon the monetary weapon—and I agree that it always seemed absurd to flood the economy with credit and money and try to mop it up through taxation—he has increased certain taxes. I want to deal with two of them. If I deal with them partly from the point of view of the area that I know, it is not only because I am interested in it but because it illustrates the effect of taxation on ordinary people.
We could hardly find two taxes more punishing to many of the development areas than the increase in S.E.T. and the increase in petrol tax. Possibly these increases might be justified in the South of England, but it is impossible to justify them in the North of Scotland.
The Chief Secretary gave us his well-known eulogy of the selective employment tax. It is slightly mystifying as to how he thinks the country survived before the discovery of this tax, but the right hon. Gentleman said some curious things about it. First, he totally forgot its effect on the building industry and, second, he appeared to say that it did not put up costs or prices. But if he ever went for a meal in a British Railways hotel immediately after the tax came in, he would have found that an extra 1s. was put on all meals at once. With any organisation
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in a monoply position in the nationalised industries this tax is passed on at once.
In my constituency we suffer not from overheating and high wages but from depopulation and a relatively high rate of unemployment. The expansion of indigenous services, so far from being considered immoral, is highly desirable. This curious view of the Government that service industries are disreputable while good old manufacturing is what we ought to have is, to me, a very strange outlook. It is reckoned that the selective employment tax at the increased rate will take £220,000 a year out of the economy of Orkney alone, which will be an intolerable handicap to a small community and will gravely inhibit expansion. That is, I believe, the same sum as has been invested by the Highlands and Islands Development Board. We have 140 gentlemen in Inverness engaged in trying to put money into various parts of the Highlands, and yet the same amount is taken out of the Orkneys by this Government in one year. In Shetland a man who employed five women and six men now employs six women and three men; and this in an area where there is considerable demand for female labour but a grave need of employment for men. One shopkeeper tells me that the increase in the tax alone will mean that half of the profit on 10 per cent. of his sales will be used simply in paying the tax.
I return to the building trade. I hope that the Government will say something on this. There seems to be some doubt whether builders will be able to reclaim selective employment tax on contracts with local authorities into which they have already entered. One builder I know reckons that he will lose nearly £3,000 if this is not so, while another will lose over £1,000. It is true that the Government provide for payment of the premium to manufacturers. We welcome that, though I very much doubt whether on general economic grounds payment of this premium is justified all over the country.
But it is a complete myth to suppose that this means an instant shift of people from service to manufacturing industries, thereby benefiting the economy. It does not work like that. As far as my own constituency and many others are concerned it is the female

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labour that is wanted and we are not getting the type of change from service to manufacturing industries that the Government claim to want. All this is happening at the same time as a very heavy squeeze which hits small businesses, small farmers and those who neither have internal resources of liquidity of their own nor are able to put up their prices and expand their business and thereby absorb the ever-increasing costs they have to bear.
A very real difficulty in many development areas is that we live in an inflationary atmosphere and that costs are continually rising. Big firms find it possible to absorb these costs, but it is not possible in areas such as those I am speaking of, and there is, therefore, an overwhelming case for some variation in taxation. We accept this in principle in different areas, and we accept variations between individuals. I do not for a moment deny that in some parts of the economy there is a great deal of liquidity. One of the Government's difficulties is that whatever taxes they put on income there are people who are enabled to carry on and keep up their consumption without suffering. That may be true in a certain degree of different types of business but there are other areas and other types of business where this is not at all so.
If it is possible to vary certain forms of grant I do not see why it is impossible to vary taxation and why we cannot have lower social insurance contributions or lower license fees or some remission of either personal or company taxation. Certainly, it is the easiest and cheapest way of relieving the development areas from the blows that are now raining on them not because they have been inflated or are over-heated or suffering from an over demand for labour but because other parts of the country are. But I can say for the Chancellor in this Bill that he is trying to move in the right direction in two respects. First, he is trying to ensure that he does not add to inflation by more Government borrowing. I hope the Minister who winds up will tell us more about the intentions of the Government in relation to repayment of their debt. Certainly, Government borrowing has been a potent force of inflation, and if we are now to seek a change, and if it is to be permanent
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even in an election year, in the long run this may be a good thing.
Second, the Chancellor showed signs of trying to reform the system, although I and my colleagues regret that he has not gone further. Last year he appeared to be hopeful that he would make a start on the simplification of the tax system, and we were promised a report on the selective employment tax. Instead, we have had a Green Paper and we must thank the Lord, or the Chancellor, for small mercies. He is up against formidable obstacles. He inherited an especially difficult position. He is faced with various vested and bureaucratic interests and with a tremendous strain on the Inland Revenue.
I can only hope that this debate and the general tenor of speeches in Parliament, and not only from this side of the House but from behind him, will encourage the Chancellor in trying to straighten out this cat's-cradle of taxation which is in danger of strangling some of the smaller businesses which can hardly compete, and which is doing great harm to initiative within the economy. I am not one of those who think that incentives are everything but I do believe that if the Chancellor's object is to improve the balance of payments and raise exports—and it is notorious that our exports have been sluggish—he has to try to instil into this Government as a whole a sense of purpose and better management and also, in his own sphere, give people the impression that he really believes that he can get into surplus next year or if this is not possible then, that he knows what is his aim.
I hear talk of rephasing and realignment, which has a slightly sinister ring, and as undoubtedly at some point we have to get nearer to surplus than we are now—and it is not always realised that we are still running up deficits—the Chancellor has to find ways of calling out more initiative from the people. In this country there are still a vast number of people willing to give employment and generate economic activity. They are the people to be found in the private, not the public, sector of the economy.
6.35 p.m.
Mr. Joel Barnett: One must have a great deal of sympathy with the right hon. Gentleman when he refers to the need for a simplified

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tax system. I very much want to see some simplification but at the same time it would be foolish not to recognise that to get simplicity while at the same time having equality is extremely difficult. It would be simple, for example, to have one across-the-board purchase tax or sales tax without any income tax at all but it would hardly be equitable by any of our standards. On the selective employment tax the right hon. Gentleman was a little contradictory. He started by showing how it must be passed on in the field of hotels, but went on to say how small businesses in his own area have to absorb it. That proves the point my right hon. Friend was attempting to make, that S.E.T., unlike purchase tax, is not passed on to the same degree. That was all he was claiming for it in the particular context.
For me at any rate and for those on this side of the House, a Finance Bill must be examined to see how far tax changes bring nearer a more socially just and equitable society. We should be thankful that at least we have got away from any idea that a prices and incomes policy can bring us nearer to that kind of society. An hon. Friend, a junior Minister, conceded what everybody had already recognised, that no prices and incomes policy working on a basically unfair wage system could bring about a just and equitable wage structure.
What is needed is a fundamental change, and with the best will in the world the trouble with the Bill is that it does not do that; instead it attempts, in a piecemeal fashion, to deal with a number of tax avoidance measures, which are, of course, worth dealing with in themselves. By looking at two examples, which is what I propose to do, of the attempt to reform the tax system in this piecemeal way, by attempting to cut out particular abuses of patent avoidance, one sees even more clearly how much we need to make fundamental changes in the whole tax system.
I propose to consider first the question of loan interest. Anyone who knows anything about this is aware that there has been a terrible amount of abuse in the use of loan interest. There are, for instance, the "borrow-all" type policies, the borrowing of money by wealthy tax-payers to buy shares and other assets,
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and, indeed, other methods, which will not be excluded by the Bill. I believe that it was right to try to deal with this piece of tax avoidance especially at the higher level.
My right hon. Friend the Chief Secretary said, and quite rightly, that we had an irrational system of loan interest in the way that interest was allowed and not allowed for tax purposes. I said much the same thing when we debated mortgage interest rates recently, but where I totally disagree with my right hon. Friend is when he says that under the Clause we are moving to a more rational system. My right hon. Friend said that we did not have a logical system before, but on looking at the Clause I say that we are moving from one illogical method of taxing or not taxing interest to one that can be seen to be even more illogical and irrational.
I should like to put one or two points to my hon. and learned Friend, and perhaps he will correct me if I am wrong, because I think that it is important to consider the way in which loan interest is dealt with in the Bill because it has some bearing about what has been said about the need for a Select Committee to consider various matters.
As I understand it, it will be all right to borrow to invest in land, but it will not be all right to borrow to invest in land companies. This seems to me to be the crazy way of going about things. Equally, by paying a smaller amount of money one can buy a practice or a company which has an overdraft and the interest on that will be an allowable charge, but if one does not take over the overdraft and one pays a much higher figure for the company, the interest on that will not be allowable.
What will be the position if a company buys a subsidiary company? Presumably that will be allowed. But if it is bought as an associated company, that will not be allowed. If a person expands his own business, that is allowed, but if he buys another it is not. If someone borrows from his own business by creating an overdraft and putting his capital account into debit, presumably that will be allowed.
One of the more difficult anomalies is that of a young practitioner, a solicitor, an accountant, or whoever he may be,

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who say, last year borrowed money to buy part of a practice and is now stuck with a loan for perhaps 20 years, the interest on which is not allowable. It is not like buying shares in a company, because those shares can be sold. The young practitioner to whom I have referred cannot sell part of the practice for it is his living.
I mention those factors in brief because they are Committee points, but I suggest that before we discuss them my right hon. Friend should produce a White Paper setting out his real intentions with regard to loan interest. I am sure that my right hon. Friend should not have it in mind to deal with this matter in the way in which he seems to intend to deal with it under the Bill as it stands.
I appreciate the difficulties once we start having exemptions, particularly when they are exemptions which affect the whole of trade and the purchase of land, whether for owner-occupation or for any other reason, but if the cost of preventing abuses—which I believe could, and should have been prevented—is so heavy in terms of new complicated laws which create new anomalies, I think that it would be better not to bother at all. Incidentally, it is interesting to note that comparative smallness of the abuse at the higher end of the scale. The Chief Secretary said that only £5 million would come from surtax payers. If my right hon. Friend agrees to publish the White Paper which I have suggested, we may be able to find a way of dealing with larger abuses, if necessary leaving some of the loopholes, which will inevitably exist anyway while we have our present tax system.
I come now to the Clause which is said to deal with pop stars. The Chancellor is right in his purpose. A man who earns £10,000 a month, even if it comes down to the "trifling" sum of £15,000 a year—and generally speaking it comes to rather more than that through the judicious use of the present tax system—is in a quite different position from the many people who have net incomes of £10 or less a week. The differential between the two is far too wide. A tax system which allows him on top of that to capitalise is clearly unfair, and I want something to be done about it.
It is interesting to note that the Opposition Front Bench has not criticised the
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Chancellor's purpose in this respect, but the hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin) used a phrase which I repudiate. He said that we pursue equity to an unacceptable degree. From the figures which I have quoted, I do not accept that in terms of real net incomes we are pursuing equity to an unacceptable degree. So I accept the Chancellor's purpose as set out in this Clause, but it seems to me, and apparently it does to the Sunday Times, too, that the Clause as drafted will catch, for example, the sale of good will. I had better declare an interest, because I have a reasonable sized piece of goodwill which I may want to sell some day. It may also catch the sale of a service company. It may be that we should try to tax that kind of thing. It may be that this is the sort of change that we want to make in the tax structure, but it is impossible to make that change without altering the whole national financial structure, and I assume that that is not what my right hon. Friend has in mind in this Bill. Certainly my right hon. Friend's intended purpose of preventing the capitalisation of earnings could not be regarded as an intention to change the whole financial and institutional structure of this country. That is worth considering, but it cannot be done by one Clause in a Finance Bill.
I think that my right hon. Friend is right to try to stop the abuse which perpetuates and adds to the differential in real net incomes, but if this means introducing more complicated tax laws and anomalies, it would be better not to bother unless, as with the question of loan interest, my right hon. Friend is prepared to accept Amendments which will remove the more obvious anomalies.
I have referred to only two major changes. I do not propose to refer to any more, because I believe that the two Clauses to which I have referred show how far we are from a socially just tax system. It puts in a clear perspective how tinkering with the system will not solve the problem of net differentials of income, which are still far too wide.
We on this side must reconsider our aims in taxation. In the case of capital, for example, we allow inherited wealth to a degree which creates a built-in denial of the oft repeated claim that all men are born equal. Under our tax system

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all men are not born equal. This is surely not something which we could support, so we want a tax system geared to dealing with inherited wealth. This is much more fundamental than dealing with the relatively minor matters, important though they are, of tax avoidance.
In the case of income, we talk a good deal about freedom. What sort of freedom allows a tax system and a social structure which results in one man earning as little as £15 a week while another can earn £15,000 a year? It is accepted that we cannot do it through a prices and incomes policy, so we can only achieve an adjustment of differentials through a change in the tax structure. If playing about with small measures distracts us from our major aim, we are in danger of getting the problem out of perspective. We obviously cannot stop considering small aspects of the problem. We cannot ignore the abuses, but we should not lose sight of the fundamental changes, which is the really urgent need.
6.52 p.m.
Mr. Nigel Birch: I hope that the hon. Member for Heywood and Royton (Mr. Barnett) will forgive me if I do not follow him into what he admitted were Committee points. His Committee points showed a very sound capitalist outlook, and he thought that he would put the matter in balance by a good old anti-capitalist peroration.
Were I in possession of the Bill, I could give the number of the Clause with which I want to deal first. It is that which deals with the abolition of capital gains tax on Government and government guaranteed securities—I want to lead on from that to some consideration of Government credit in general. I have some background in this matter. When the present Home Secretary imposed capital gains tax on gilt-edged securities there was a great outcry, in which I took some part. The main argument against that action was that it was fraudulent because many gilt-edged stocks had been sold at prices at which they would not possibly have been sold unless it was confidently expected that the amount of appreciation was not to be taxed.
We have made rather a good agitation about this. I moved an Amendment in
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1965 at that Box to exempt gilt-edged securities and local government securities from capital gains tax. Kaldor, of course, devised all these things originally and, as always, our present Home Secretary was completely under the influence of No. 2 in the Hungarian Mafia, who was sitting in that box at the time. The solution was ludicrous—that some gilt-edged securities should be wholly exempt, some should be wholly subject to capital gains tax, and some should be partially exempt and partially subject.
That did not even meet the moral case, because the nominal price at issue of a Government security has little relevance to the price at which Government securities are actually sold. Masses of stock had been sold at under issue prices and would not have been but for this expectation. The Government, having refused many times to do this, have now come around and exempted Government securities. The injustice is, to some extent, righted, but it again produces a situation, as was produced before, of sudden changes which had been unforeseen. There is a casino atmosphere in a market which should not have that atmosphere. The chaos caused by the Kaldor proposals was such that the market had to be suspended for several hours and many changes between one security and another resulted.
One must not look a gift horse in the mouth, I suppose, even if one suspects that one will find something nasty inside it. This is something which will help the market, but I do not believe that either the question of equity or that of helping the market was the Chancellor's real motive. The Chancellor likes his little deceptions. The House will remember that the first statement which he made, on the Letter of Intent, was entirely at variance with the Letter of Intent which he published the very next day. He succeeded in deceiving the House, the Press and the public for about 18 hours about his tax on blankets, sheets, knitting wool and towels, not to mention things—which are hardly mentionable because they are so horrible—like pensions and teeth and spectacles.
He did not mention his real motive. In some of these Budget documents we heard that this abolition of tax will cost £7 million. In fact, of course, it will save the Government a very large sum.

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They will collect far more tax, because the unfortunate holders of gilt-edged securities have astronomical losses and capital gains tax is a tax on gains less losses, so it was possible for people to realise their losses and put them against their gains. Therefore, the net loss for the Government has been very large, but their motive is not to relieve anyone but to collect more tax.
I wish to turn to the effect on the municipal borrowing. This would help any local authority which can squeeze some money out of the Public Works Loan Board, and it will be of some small help there, but if they cannot do that, or can only get a relatively small proportion from the Board, it will greatly penalise such authorities, because it will make the attractions of local government securities relative to Government securities very much less and increase the difference in yield between the two.
What we have had from the Government is what the Financial Secretary said the other day, "It is all right. All they have to do is borrow abroad." Let us consider this for a moment. The only place where any weight of money can be borrowed is Germany, and we are urging the Germans to revalue their currency. The hon. Member for Ashton-under-Lyne (Mr. Sheldon) wanted them to revalue by 20 per cent., but certainly an upward valuation against sterling, however arrived at, of 10 per cent. is not improbable and is much desired by the Government. But what happens to the unfortunate local authority which borrows for ten years and must repay at 110 per cent. and gets its interest charges "jacked up" by 10 per cent.? It seems to me to be an act of desperation.
One other thing which the Government have done which affects the gilt-edged market is the "save-as-you-earn" scheme. It will do something, but not very much, and it will only do anything if it attracts savings which otherwise would not have been made, and not in gilt-edged securities. Switching from the existing National Savings securities into the new stock would only cost the Treasury money and would make no difference to the economic position.
I do not think that workers have shown much desire to have their wages
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attached, which is how I understand the scheme will work. It is very doubtful whether this is attractive compared with endowment assurance, and it is, of course, expensive. The Chancellor informed us that for someone paying the standard rate of income tax the grossed-up yield is equivalent of 12 per cent. What will it be for a surtax-payer paying tax at the maximum rate? Quickness of apprehension will give the answer as 86·4 per cent., which shows how utterly ludicrous are high rates of tax.
I cannot imagine why the Government do not see how damaging this is to themselves. They are bound these days to pay the rate for the job to top people in the nationalised industries. When there are enormous increases in salary—they are really only nominal because, after tax, they do not amount to much—people become annoyed. If the Government adopted a more rational tax system they would not constantly be coming up against this sort of irrational problem.
In considering the general effects of the Government's action, the first point to note is that the gilt-edged market has been slaughtered and the results of this are considerable. Hon. Gentlemen opposite must sometimes wonder why all the things that they have done have had so little effect in getting our balance of payments right. Indeed, the effect has been less than nil.
When Lord Thorneycroft was Chancellor of the Exchequer and there was a run on the £ the crisis lasted for a matter of weeks. A similar crisis occurred when my right hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd) was Chancellor and when there was a run on the £, but that, too, lasted for only a matter of weeks. Indeed, when it was over he was able to prop up the dollar.
Our present crisis has been going on for four-and-a-half years, and it is now worse than it has even been despite devaluation. Why do we have this state of affairs? The question of money supply has a great deal to do with it. It used to be unfashionable to talk about money supply, and many of our bright financial journalists, having made a few snide remarks about Lord Thorneycroft, did not refer to the matter. But we are now turning back to it, as we are bound

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to do because the brokers' men insist on our doing so.
The enormous increase in the quantity of money stems from three factors. The first is that in most years under Labour there have been very large uncovered deficits resulting from a large borrowing requirement. That has been reversed in this Budget, but only because of massive increases in taxation; and this in present circumstances is inflationary and ultimately self-defeating. The second reason why money supply has gone up so much is, as the Chancellor has at last admitted, because we have been running balance of payments deficits consistently. We are still doing so. The third and perhaps most important reason is that on balance the Government have for years been unable to make net sales of their securities. Indeed, they have been large net buyers, and that is still going on.
In the last quarter of last year the amount of Government securities bought by the Government amounted to £400 million, and I suspect that this year they have been buying more. There are two reasons why the market has collapsed. The first is on the supply side and the second is on the demand side. On the supply side, the amount of industry nationalised is an important factor, because if one is to finance capital expenditure by the nationalised industries without inflation one must get people to buy a sufficient quantity of Government securities to cover that capital expenditure. If that is not done the money must be raised by taxation, by borrowing abroad or by inflation. The Labour Government have done all three.
A classic example of what can happen occurred when steel was nationalised. Compensation totalled about £700 million. The Government knew that they could not sell £700 million worth of long-dated Government securities, so they issued short-term ones; three-year securities. However, they could not even sell those, and I believe that when the history books are written we shall find that about three-quarters of that sum, if not more, was sold back to the Bank of England soon after it was issued.
This means, in effect, that the Government printed money and issued £700 million of it to the holders of steel shares. That money is still knocking around the
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economy. No wonder 1967 was a disastrous year, with an enormous balance of payments deficit and a vast increase in the supply of money. I have not yet heard a Government spokesman answer this question about the burden that nationalisation places on the country, remembering that in present circumstances we must finance all the capital expenditure of these industries out of taxation and that this in itself is inflationary.
On the demand side, the trouble is simply that people have been so badly done down. This fact is often ignored by the financial journalists. They assume that others are sillier than they are, but evidence is not convincing about that. One need only consider what has been happening in recent years. Hon. Members may recall the Radcliffe Report on monetary policy, about which I made an eloquent speech when it was debated in 1958. I described the Report as darkening counsel and said that it was muddleheaded and confused and that it has lowered our status in the eyes of the world.
However, a bland statement in that document said, in effect—the figures are long out of date—that if one got inflation at 2 per cent. per annum one wanted 5 per cent. for one's gilt-edged securities rather than 3 per cent. I pointed out that in terms of 2 per cent. compound inflation one would need, for a 25-year loan, to redeem it at a premium of 64 per cent. to get one's money back in terms of real purchasing power. Those figures are now ludicrous and it would be too terrible to calculate what one would have to have one's bonds redeemed at with inflation running at 7 per cent. Because people have taken such terrible punishment they are not buying, and it will take a lot to get them to buy.
What will happen next? I prophesied last year that there would be an increase in exports. I prophesy that there will be another increase in the coming year. I do not think that we have quite run out of the price advantage of devaluation, although the Americans will no doubt get their inflation under control and if they do, our difficulties will be much increased.
On the other side, it looks as if the prior deposit scheme has made no difference. We must thank goodness that it has not. If it had, our propensity to import would have been more horrifying

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than it is. Oddly enough, the prior deposit scheme may produce some effect just before it is taken off with people saying, "We can afford to wait until it is removed." There might, therefore, be some good trade figures in the middle of the year, but they will not be nearly enough to cope with the enormous debt that we have.
I have no doubt that when that better trend is shown the trumpeters of the Horse Guards will be summoned to Downing Street, the door will be opened and the Prime Minister will appear wearing his Anguilla Star. He will be applauded by his colleagues who, surrounding him, will praise him as he announces the final miracle to end all miracles.
We cannot ignore the fact that the situation remains desperate. Our debts are astronomical. We have done that profoundly immoral thing of borrowing money that we know we cannot repay on the due date. It is a sign of the moral state of the country that articles often appear in the newspapers saying that this is our strength; that we have borrowed so much money that people must prop us up. Hon. Members may recall that it was Giolitti who said of the Sultan of Turkey of his day that he was armed with his debts. That was, up to a point, true. We are not trained in this country to play that sort of hand. I think the Chancellor's vices and abilities are on a far smaller scale than those of Abdul the Damned. I do not think we are going to play that hand very well. All the important things done in this Budget put up costs and prices and increased the hopeless steady continuation of inflation. It was Lenin who said:
"If you want to destroy a country first debauch its currency."
People are reaping where they have not sown and they are not reaping where they have sown. I believe that this can be put right, but we have to have the will and the determination.
When Peter Thorneycroft was Chancellor he said that if wages raced ahead of productivity he would refuse to finance them. This basically is what they have done in Germany, and it has not resulted in unemployment but in the most rapid increase in wellbeing ever known. It is always a question of having the will.
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My peroration is always the same; we can get rid of our troubles which are really at the margin, but hon. Members opposite, particularly this Chancellor, are not going to do it. When the Chancellor was in Bonn for the monetary conference he got very angry with the Germans and started abusing them. It is not a sensible thing to do to abuse the man who pays for your shirt and trousers. The Germans were annoyed and described him as "an incompetent miner". I am sure they did not mean offence to the great mining profession. We can at any rate say in defence of our Chancellor that he is within a tenth of a gnat's eyebrow as refined as Aubrey Jones and, even more incontrovertible, he is the best Chancellor of the Exchequer we have had since the present Home Secretary; but it is not enough.
7.12 p.m.
Mr. Norman Haseldine: The right hon. Member for Flint, West (Mr. Birch) will not expect me to follow him.
Of the six Parts of the Finance Bill comprising 53 Clauses, I find myself in support of five Parts and 51 Clauses. I am sure that my hon. Friends on the Front Bench will not expect that I shall be able to record my support of Part V, which comprises Clauses 43 and 44.
I was able within four days of the Budget announcement to receive the reactions of people in my constituency. I my say in all honesty that I found a generally good reaction to the Budget and that many of the measures announced were acceptable. Measures to allow further increases in allowances to single persons, measures for a contractual savings scheme and measures to stop further tax avoidance, to charge interest on tax arrears—these are broadly accepted. The measure which I found most criticised was not a question of direct tax or tax on individuals, but the one to increase S.E.T. by 28 per cent.
The Chancellor is deluding himself it he believes that this tax is not the concern of the man in the street or the woman in the High Street. However much he may believe that distributors, retailers and the service trades generally get red hot about this tax, my right hon. Friend must not discount the widespread concern about this form of tax. Three times

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now it has featured in Finance Bills. The effect on the cost of living is well understood and feared. The many simple calculations he has made that it would result in only a small percentage of rising costs have consistently shown him to be wrong. Prices have risen very much more than the calculations showed.
In his Budget Statement the Chancellor said:
"The second …"—
the alternative to S.E.T.—
"would be to have gone for a further rise in traditional forms of indirect taxation, or for a further broadening of the Purchase Tax base, which would almost certainly have meant a wide incursion into the food field."
Does the Chancellor believe that he has not made a wide incursion into the food field? Does he realise how far he has made an incursion into the field of essential and necessary foods, hitting hardest those who can least afford it? If the Chancellor had not come for a second time on this horse following the original imposition by his predecessor, he would not have had the misfortune to have listened yet again to many of my hon. Friends and me pointing out the absolute error of his ways. He must surely realise that he has incurred widespread anger on this account.
Should my right hon. Friend be thinking at this moment that yet once again he is having to endure one of those Labour-Co-operative Members, let me tell him that this is no special pleading. Over 80 per cent. of the retail traders of the country, in the retail consortium, have expressed themselves in their recent joint statement. I shall not take the time of the House by reading it, for it is well known. In his Budget Statement my right hon. Friend also said:
"That the effect of this increase upon the retail price index will be about one-third of that of raising an equivalent amount of revenue from Purchase Tax or the other excise duties."—[OFFICIAL REPORT, 15th April, 1969; Vol. 781, c. 1028–9.]
Almost every authority in the retail distributive sector disagrees with this estimate.
The retail consortium estimated that the full effect of the Budget would be that prices charged by efficient retailers would be increased by 2½ per cent. That is five times the Chancellor's estimate.
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[Interruption.] May I ask the hon. Member for Worcestershire, South (Sir G. Nabarro) to cease speaking so loudly, as I am quite disrupted in my endeavours to make my speech?
Mr. Speaker: Order. Hon. Members should listen to each other.
Mr. Haseldine: The National Grocers Federation made a statement recently which follows very closely that of the retail consortium, but its estimate is that prices could rise as much as 4 per cent. The grocers' estimate is that the measures will put up the grocery bill by at least 2 per cent. This is in the whole market of £3,000 million a year, which means that housewives must pay out in the coming year through S.E.T. not less than £60 million to get the same sort of goods and services as they are getting now.
It is interesting to note that the Food Manufacturers Federation has said:
"We have repeatedly pointed to the fact that Government actions have militated against the food industry's attempts to keep prices stable. The surprising increase in S.E.T. will inevitably be reflected in prices at the point where they matter most—in the retail outlets."
A further aspect is that under Clause 44(5) persons engaged in the distribution of milk to consumers are excluded from refund of S.E.T. This is wrong. It is another example which strengthens my case that S.E.T. is a tax on essential foodstuffs. Milk seems to have been singled out for this treatment, and it is impossible to understand why.
The Co-operative movement is not alone in objecting to this. The Milk Distributive Council, which represents the whole of milk distributive trade, both large and small, has asked for the Clause to be withdrawn. This is of tremendous importance as regards the service aspect. If it is not possible to recover the extra distribution charge in milk prices, door-to-door deliveries will obviously have to be stopped. One appreciates that this can bring great hardship to old and immobile people, who rely on them. Not all households in this country are yet equipped with refrigerators. One wonders whether the distribution of milk not only to homes but to schools and hospitals is the sort of service which the Chancellor has in mind when he talks about services in his Budget. He must know that some services since 1966 have made a separate charge

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on bills for S.E.T. This cannot be done in the case of milk. S.E.T. has been allowed in calculating the margins on milk distribution, but what now happens in the case of the additional 28 per cent. S.E.T. charge? It will inevitably increase the pressure for a rise in milk prices.
I turn to another aspect of the Chancellor's decision to increase S.E.T. In the Standing Committee on last year's Finance Bill my hon. Friend the Member for Willesden, West (Mr. Pavitt) and other hon. Members closely questioned the Chancellor on the Reddaway inquiry. He said:
"My reply to that is that it was not possible for me, in the circumstances with which I was confronted this year, to say that I would not deal with the problems confronting me in the way I thought they ought to be dealt with because I had to wait and hear what Mr. Reddaway had to say."—[OFFICIAL REPORT, Standing Committee A, 11th June, 1968; c. 1887.]
How does that match up with his statement ten months later, in this year's Budget speech, when we appear to be no nearer receiving the Reddaway Report? He said:
"I must not anticipate Professor Reddaway, …"-[OFFICIAL REPORT, 15th April, 1969; Vol. 781, c. 1029.]
That makes one feel that this was a red herring.
Many of my hon. Friends believe that we should have anticipated the Report from Professor Reddaway before the Budget Statement, because we hang on the words of my right hon. Friend on 19th March, 1968:
"… the increase I have announced will not prevent for the future any desirable re-casting of the tax in the light of Mr. Reddaway's report and any other available evidence."—[OFFICIAL REPORT, 19th March, 1968; Vol. 761, c. 286.]
I wonder whether my right hon. Friend accepts the advice he received from the "Little Neddies", and the Report issued yesterday by the Economic Development Committee for the Distributive Trades. Ones must take note of the statement in Appendix 4 of the Report, which says:
"All legislation which is based on the principle of selectivity produces anomalies at the fringe. It does however seem that the distortions arising from the current form of S.E.T. are particularly serious."
I must say without further qualifications that the expediency of raising considerable revenue on the basis that it is easy to collect is one of the most dan-
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gerous and unjust methods that I have encountered. I remind my right hon. Friend of his Budget Statement in March, 1968, when he said of S.E.T.:
"It is the only means we have of taxing services"—
I wish that he would not use that word when he means retail distribution, and particularly foodstuffs—
"Which are increasingly used in a relatively prosperous society, particularly by the better-off …".—[OFFICIAL REPORT, 19th March, 1968; Vol. 761, c. 284.]
I emphasise his last words. Is he now suggesting that foodstuffs are within the category of social discrimination? Recent surveys have made it abundantly clear that despite social differences, fortunately, the pattern of our spending on essential foods varies very little. I hope that my right hon. Friend realises that he is on very dangerous ground, especially when a year later he makes such a steep increase in S.E.T., which will hit the elderly and lower-paid people most of all.
My hon. Friends and I will seek to make Amendments to the Bill to try to offset the effects of this increase on foodstuffs and milk distribution. We appreciate that the Chancellor has had a very difficult task, but we do not accept that the difficulties forced him to take such action, which increases the cost of foodstuffs to such an extent as it undoubtedy will. He should know that the Co-operative Party has undertaken a long study recently on "Taxation and the Consumer." We hope that we may be able to acquaint him more fully with the results, but in view of the length of time for which I have already spoken I propose at this juncture merely to say to the Chancellor, through my hon. Friend the Financial Secretary, that we do not want to make our complaints without suggesting some alternatives, and it will be appropriate when we present our Amendments to proceed on those lines.
7.27 p.m.
Sir Arthur Vere Harvey: I agree with most of what the hon. Member for Bradford, West (Mr. Haseldine) said about the increased cost of living, to which I will refer later in my speech.
The Budget took a lot of people in on the day the Chancellor of the Exchequer made his Budget Statement. I can well understand why people did not notice until the following day the Schedule

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tucked away which put a 13 per cent. tax on all textiles. The Chancellor did not refer to that in his speech, nor when he went on television that evening. It was wrong for the Chancellor, who has the privilege of broadcasting to the British public on both channels, to omit any reference to an increase in textile prices through purchase tax. Surely he must have been advised by his Department that if he did not refer to it in his long speech at the Dispatch Box he should have done so in his speech to the electorate. But there was not a word. It was deceitful and very naive of him to omit any reference to that. The Chancellor made it appear that the effect of the new proposals would be minimal on insignificant trifles of household expenditure, and that is why people were taken in. They are only now beginning to realise the full impact of the Budget.
I want now to refer to what could be termed a Committee point, because it cannot be made too often. The increased pensions for old-age pensioners were mentioned in the Budget, quite wrongly. The whole House was delighted that they are to receive an increase in the autumn but nothing was said then about how the increased pensions will be paid for, and we still have not heard. The House has a right to know, and the Chancellor should not have announced the increase like that. We know that he did it because he was currying favour with some of his Left-wing Friends and making a good impression at the time. This has a considerable bearing on the country's finances. Like every other hon. Member, I welcome the increases, but what the Government are giving the old-age pensioners with one hand they will take away with another.
Old-age pensioners cannot afford to replace linen. They stitch and darn and get given bits by relatives or friends. An old lady in my constituency said to me the other day, "Do you realise how much a reel of cotton has gone up in price?" I found that it had doubled in a short space of time. That is how old people measure their expenditure. They have to live. What about the many housewives and others who knit their own garments and buy their own skeins of wool and who must now pay 13 per cent. more? Many old-age pensioners
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also knit. This has been a very wrong decision by the Government.
The increase in selective employment tax will bring in another £130 million, a 28 per cent. rise. As the hon. Member for Bradford, West has said, this can only increase the cost of living. The Government find it an easy way of collecting money but it is a bad tax in every form. It must have an effect on the cost or living. The cost of food will go up, thus taking a proportion of the increase which the old-age pensioners are to get. It may not be very much to begin with but every penny counts with them. I hope that we shall be told tonight how the increase in pensions is to be paid for.
When the Prime Minister made his famous broadcast at the time of devaluation he said:
"Farm production will be stimulated and will be able to do more to replace imported from abroad."
If in the succeeding 18 months the Government had done the right things for agriculture, they could have gone a long way to solving our balance of payments but they have not done so. However, we have had repeated promises. The Minister of Agriculture's statement last autumn about the expansion of industry was encouraging, but while the annual price review could be attractive to certain sectors such as beef rearing, in the main it allows for only a little expansion.
How can the agriculture industry expand when the capital is not available? Not long ago a farmer could take out a mortgage with the Agricultural Mortgage Corporation at 6 per cent. Then it became 8¼ per cent., and now he will have to pay 10¼ per cent. That is expensive money and many farmers cannot afford to borrow at that rate. The selective employment tax also affects farmers. Admittedly, they get the money back but they have to lend it to the Government, in effect, before getting it back.
The Chief Secretary was rather boastful about the various methods in which money is collected and the amount of form filling which has to be carried out by industry. The farmers find precious little time to fill in all the forms they have to fill in in order to get back their selective employment tax, which the right hon. Gentleman says they get back

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within a week. I do not get mine back within a week. It is more like four weeks or more. The least the Government can do is to speed up repayment of the S.E.T., at any rate for the small farmers.
Let us take the case of a farmer going in for a 150-acre farm who has to borrow half the money. It will cost an additional £400 a year in increased rates of interest. Where is the money to come from? It will cost that farmer on the basis of borrowing the money three or four times per acre what tenant farmers are paying.
If the Government went flat out to increase agricultural production we should be some way towards solving our balance of payments problem—and no better food is produced in the world than British food. We have a very efficient industry which could be of great help to the nation's economy. But what has happened? We have massive imports of dairy produce. I read the other day that yoghourt is being imported from France.
Mr. Speaker: Order. We can discuss the financing of agriculture but not other aspects.
Sir A. V. Harvey: I appreciate that, Mr. Speaker. I am trying to convince the Government that agriculture can play a great part in solving the balance of payments problem. We have always been told, "We cannot put duties on imports from Scandinavia, for example, because we shall not be able to sell them our manufactured goods if we do." I do not accept that argument. These countries include those with which we have adverse balances of payments, and eventually the person buying a British car will buy it for quality and delivery. If the quality of our goods is right, we shall sell them.
Why do not the Government review their policy on sales to foreign powers? There were Questions in the House yesterday about the possible deal with Greece, including a nuclear reactor. Frigates could be sold to South Africa. We know that the right hon. Member for Belper (Mr. George Brown) disagreed with the Government about that. An enormous amount could be sold to help the balance of payments if the Government were sensible instead of pandering to the Left wing over these matters.
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Since the Government took office, taxation has increased by £2,640 million, and £1,513 million of that has been imposed in the last two Budgets. These are staggering figures when we are trying to encourage people to work and do more. The Government do not seem to get anywhere at all. A year or two ago I thought that the Government were perhaps accident prone and had had a lot of bad luck, but I have concluded that they are the most incompetent lot I have seen here in the last 24 years. We saw only yesterday how incompetently they run their own affairs. I do not see how they are fit to run the nation's affairs if they cannot look after their own.
Where is the economic miracle that we were told last summer was just around the corner? The Prime Minister said at the General Election:
"Over the period of a Parliament I believe we can carry out our programme without any general increase in taxation."
There were scores of such statements. Hon. Members opposite may wriggle about these things, but the Prime Minister said them. His Government were in power with a majority of four and he was determined to get back at any price. He was prepared to sell himself and his party at any price. Confidence has gone not only at home but overseas as well. I was in America for two days during the week before last, and if anyone talks about exporting being fun then he should do it. He should try a two-day trip with a six-hour time change. It is a killer. Our exporters are up against a tough job. There is no fun in it.
What impressed me in the United States was that, while they still like us, they have practically written us off as an important nation, and with the contraction of trade going on there I cannot see our exports increasing. What are the Government doing to help industry to sell its goods? I have tried to show how difficult it is for these men who travel round the world and have a very tough time of it. Let us consider the scales of payment made to executives in American companies, reflected in a survey carried out over a period of three years.
In marketing, finance, production, research and development, and personnel Britain is bottom of the league. These men have to be paid. They are doing it not for the Labour Party but to better

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themselves and give their families something more than they have previously had. They are not all Old Etonians. They are doing a very difficult job and are surely entitled to some reward for their extra efforts. The executive in Italy is paid double the wage of his British counterpart. This matter must be reviewed if Britain is to get better results. The Government are killing and stifling the nation in every direction, whether it is the man selling textiles in America or the worker on the factory floor doing a few more hours to earn some overtime.
Taxes are far too high and confidence has gone not only here but, sadly abroad. When the Chancellor took over in November, 1967, he started with a lot of goodwill, in spite of the damage that had been done by the present Home Secretary. What happened? Between November and the Budget there was probably the biggest spending spree that we have had in history. Motor cars were being bought, pictures, cases of gin and wine—people were buying up anything they could get their hands on and the Chancellor neglected to deal with this problem. The Government were frightened to bring in measures to curb consumption for fear of increasing the number of unemployed.
That was the damage done, and the country has never really recovered. We have been told that we have almost run out of the benefits that might be obtained from devaluation, and I agree. There is very little mileage left in devaluation. We are now faced with the problem of having to pay considerably more for our imports.
I listened to the speech of the hon. Member for Heywood and Royton (Mr. Barnett) but he did not direct his attention to the problems facing the country. It was a question of levelling everyone down to the lowest point. Yet he is an intelligent professional man. It will not do. At the end of the day the only thing that will save the country is to export more and cut down expenditure wherever possible at home. The Government should give an example here, but I despair that they will ever do so. It is no good the party opposite blaming the Prime Minister for everything that goes wrong. They are doing it, it is being done in the Press, and it has been going on for weeks. Every Minister and every
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member of the party opposite carries responsibility for the state of the country, and the people will remember this in the next General Election and on Thursday.
7.45 p.m.
Mr. A. H. Macdonald: I want to refer to the speech made by the right hon. Member for Flint, West (Mr. Birch). In some ways it was so good, yet in other ways it was wanton and irresponsible. The right hon. Member knows better than most the necessity for creating real savings to finance the nationalised industries. For the sake of making a witty remark he permitted himself to refer to the "save-as-you-earn" scheme as an attachment of earnings. That was a most unfortunate reference. I saw no reason for the reference to the Mafia. It is a great pity that for the sake of a witty remark these wanton and irresponsible things were said.
The hon. Member for Macclesfield (Sir A. V. Harvey) spoke about the level of taxes. About three or four months ago the hon. Member for Lowestoft (Mr. Prior) introduced a Private Member's Bill dealing with the payment of pensions to disabled persons. There was no price tag attached to it, and I understood very well why. I was inclined to think that the principle behind the Bill was good and suggested that it should be given a Second Reading and go into Committee where a price tag could be attached. Hon. Members opposite showed great approval of these remarks. I do not delude myself. I am aware that a great part of that approval sprang from the fact that I had indicated that I would not accept the advice of my own Front Bench.
I had hoped that some of that approval was for a remark I made, saying that if we wanted to make such provisions for these people we had to face the necessity of finding the money to pay for the pensions. It will not do when hon. Members come forward with proposals of that kind yet shrink from the necessity of raising the required tax. I am proud to think that we have carried out our objectives in social security. I do not shrink at all from the fact that we have found it necessary to raise finance to pay for such things.
Every year I make the same plea in this debate. This year I am somewhat heartened to find my hon. Friend the

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Member for Heywood and Royston (Mr. Barnett) expressing similar views. I very much regret the tinkering Amendments that come forward annually to plug loopholes or rectify anomalies—always for the most admirable reasons. However, the cumulative effect cannot but be unsettling.
How pleasant it would be if we could have a bumper Budget once every three or four years, clearing up the mass of anomalies and plugging loopholes and so on. From then on, if there were undesirable features, then we should accept them for the sake of stability. My hon. Friend was quite right when he said that instead of tackling these matters piecemeal we should have a look at the principle underlying the whole concept of taxation and have such a bumper Budget.
I warmly welcome the proposal to revise the basis of taxation on bingo. I cannot understand why a similar step is not being taken in relation to casinos. I endorse the concept of a tax on gambling—in many ways it is the perfect tax—but like other taxes it must appear to be equitable otherwise we run the particular risk of driving gambling underground. I regret that this year the Chancellor has not rectified the basis on which we tax casinos in the same way as he is rectifying the basis upon which we tax bingo.
I also warmly applauded the objective my right hon. Friend set himself when bringing forward the proposals dealing with the disallowance of tax relief upon the interest of certain loans. Upon looking at the Finance Bill, setting out the detailed implementation of these proposals, I begin to wonder whether this may not be quite as easy as was supposed. There is a danger that the proposals will not have the effect of reducing consumer expenditure, but may simply have the effect of altering the way in which we finance it.
The basic concept of these Clauses is to disallow tax relief on interest except, mainly, on the interest of loans for the purchase of property. How do we determine what is the purpose of a loan? It is obviously relatively easy to ask the borrower what the purpose of his borrowing is intended to be, but surely the reply given is an ostensible answer.
It might be a truer test to ask what would have happened had the loan not been granted. If a loan for the purchase
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of property were not granted, and the purchase were not proceeded with, that would show that the purpose of the loan was for the purchase of property. But, the loan not having been made, if the transaction had still gone forward and had been financed in another way, perhaps by making creditors wait longer for their money, it could be argued that the purpose of the loan was not so much to finance the purchase of property as to repay the man's creditors. It is difficult to determine the exact purpose to which it is intended to put a loan.
Is the concept underlying the proposals based on the subjective test of finding out from the borrower what is the purpose of the loan, or is the test to find out exactly how the loan is secured? The subjective test is perhaps open to the objections which I have mentioned. Equally, if the test is to be the nature of the security, I foresee certain difficulties.
A young couple who raise part of the money needed to purchase a property by raising a mortgage would be entitled to tax relief on the interest. If they borrowed the balance, or part of the balance, from, for example, a grandfather, would the interest on that be allowable if the grandfather took a second mortgage on the property, or had it secured only by a bill, or not secured? This is not clear from the Finance Bill. If the test is how the loan is secured, and if it is necessary to take a second or a third mortgage so long as some value in the asset remains unpledged, the result will be that real estate will be pledged right up to the hilt, and I doubt whether this is desirable.
Stretching fancy a little far, I suppose it is conceivable that people wishing to raise money and to get the advantage of tax relief on the interest might enter into unnecessary purchases of property. If they have no mortgage on the property they currently occupy, they might deliberately move, so as to raise a mortgage on a new property on which they will get tax relief, and they might use the money from the sale of their existing property for the purchase they have in mind. If people have to borrow money on mortgage, they will borrow as much as they can. What will be the effect of this upon the resources of the building societies? In recent months there has

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been evidence that the building societies do not have bottomless pockets.
Although I foresee difficulties both in the subjective test and in the test on how the money is secured, I hope that my right hon. Friend will come down on the side of the subjective test, and allow tax relief on the interest on loans, regardless of how they are secured, so long as the borrower is able to demonstrate that he has borrowed money for the purposes permitted in the Bill.
I entirely endorse the underlying strategy of the Bill, the concept of effecting moderation in consumer expenditure, but I wonder how far this will prove effective. For the reasons which I and other hon. Members have indicated, sophisticated borrowers will be able to get round the provisions in the Bill in such a way that they will not be hampered. I doubt whether the proposals will have any effect on unsophisticated borrowers. A substantial amount of borrowing currently goes on at exorbitant interest rates, for which no tax relief is claimed simply because people do not know that they are entitled to it. I attribute this borrowing to the phenomenon mentioned by my hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon), that it is difficult to restrain consumer expenditure. I agree with my right hon. Friend that this is needed, and I regret that my right hon. Friend has not seen fit to introduce measures to restrain borrowing for this purpose. There is a loophole here through which consumer expenditure will rush in ever-increasing amounts, which leads me to doubt the ultimate success of the Measures proposed.
7.56 p.m.
Sir Gerald Nabarro: The Chancellor of the Exchequer came to the House on 19th March, 1968, and raised additional taxes of £923 million in the full year. He returned to the House on 22nd November, 1968, and raised further additional taxes of £250 million in the full year. He came back to the House again on 15th April, 1969, and raised further taxes of £340 million in the full year. His objectives throughout are said to have been to restrain consumption and to make progress towards increased exports, diminished imports and
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the redress of a grievous deficiency in our balance of payments. He failed throughout last year; he will fail throughout this year, for the simple and fundamental reason that his Budget strategy is entirely wrong.
It is futile for the hon. Member for Chislehurst (Mr. Macdonald) to talk about the Government restricting borrowing and restricting consumption. People cock a snook at Her Majesty's Ministers, notably Treasury Ministers. They are the most derided and ridiculed people in our country, and rightly so. Nobody trusts them, every scheme that they have presented to the House for financial solvency during the last five years has failed, and why should repetition of the same policies in 1969 succeed when they have so miserably failed in each of the preceding four years?
The Economist got it exactly right on 12th April when it wrote this in its leading feature contribution under the heading "No, Not Again":
"Experience in both Britain and the United States last year suggested strongly that increases in taxes are now the rather wet noodle among weapons of economic restraint. They proved far less effective in curbing total demand than most supporters of last year's British and American budgets had hoped. This is awkward news for the British Treasury, which for the past five years has courageously believed that by flogging British taxpayers hard enough you must eventually bring the whole economy to rights, especially since such flagellation is well known to be good for the taxpayer's soul. However, the Treasury has a traditional way of handling awkward, new, empirical international, economic evidence that does not accord with its previous prejudices. It generally most resolutely ignores it. A year ago Mr. Jenkins imposed upon the British people a record increase in taxes, which signally failed in its purpose of putting the British economy back on course. Next Tuesday"—
that was 15th April last—
"it is almost universally expected that Mr. Jenkins will announce another dollop of tax increases, which by itself is unlikely to work either."
I read that passage to the House because it entirely endorses my own views. Every successive increase in taxation by Socialist Governments during the last five years has led to two things: first, continuing inflation on an increasing scale and, second, a worsening situation with our balance of payments. I have no doubt that the £340 million in the full year, which is the purpose of the Finance Bill, will have exactly the same effects.

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I pass constructively to what in our contemporary situation and circumstances are the seven Budget requirements. I state them shortly, and I hope that the Chief Secretary will find them impeccable. I am sad to say that the Bill will give effect to none of them. The first is a strong £. I pause to observe that the £ is as weak today as it was during the month following devaluation of sterling in November, 1967. There is no sign of increasing strength in our currency.
The second requirement is, of course, a substantial surplus on our balance of payments in order to endeavour to repay our mountainous debts overseas. Last year's deficiency was of the order of £458 million on visible account. I see no evidence that we are running a surplus at present, or are likely to do so in the coming year.
The third is much greater investment in private industry. There is no evidence of an upsurge of investment in private industry for one simple reason which I give the House as a businessman. There is no confidence in the Socialist Government or in their policies.
The fourth is an acceptable prices and incomes policy. The great majority of the Labour Party which is governing the country today does not believe in the present prices and incomes policy and indeed, is largely in revolt against it. My side of the House does not believe in a statutory prices and incomes policy and certainly not as an effective instrument of budgetary policy.
The fifth is that there should be no increase in today's figure of unemployment, which is of the order of 2¼ per cent. Those who are knowledgeable in these matters say that there is an upward trend of unemployment which will manifest itself steadily throughout this year, and the anticipated level by the year's end is three quarters of a million wholly unemployed.
The sixth is a restriction of voracious public expenditure of the present time. It is all very well for Treasury Ministers to apply squeezes to private individuals, private companies and the private sector of industry and yet allow the most gross extravagance on the part of nationalised industries led by the electricity supply industry, which does little to raise its efficiency factors.
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The seventh, and last, requirement is, of course, that the Chancellor this year should have budgeted only for a sufficient aggregation of revenue to meet his public expenditure requirements plus a modicum of cover for finance below the line, augmented by public savings. He should not have called in aid a surplus of more than £800 million which he says he will use, though I do not believe him, for the redress of public debt. On the contrary, he has much more devious purposes in mind than that He proposes to use that money as a surplus next year, a year which he anticipates will be the last in which he will present a Budget before a General Election, to reduce the taxes and try to claw back some of the millions of votes which have been lost to the Labour Party in recent years. He will, of course, fail in that last endeavour. The Labour Party has passed the point of no return.
Mr. Roy Roebuck: Oh.
Sir G. Nabarro: The hon. Gentleman with a miserable little majority of 300 will not be here in the next Parliament. He will be hoofing it round the Labour-held constituencies hoping that somebody will retire. I will not go into electoral considerations. Did I hear the right hon. Gentleman say, "Why not?".
Mr. Diamond: I apologise for saying anything while sitting down. I was wondering which particular Clause this had reference to or whether the hon. Gentleman had not the Bill in front of him.
Sir G. Nabarro: The right hon. Gentleman came in only two or three minutes ago when I had been speaking for 10 minutes or so. He missed the earlier part of my speech. He is not in touch with matters. If he listens carefully he will no doubt get switched on. I was giving the seven budgetary requirements needed in our present financial circumstances. This Budget fulfils none of them, and that is why the Chancellor's budgetary strategy will fail.
I do not propose to apply myself as did the hon. Member for Heywood and Royton (Mr. Barnett) and the hon. Member for Ashton-under-Lyne (Mr. Sheldon) to a series of Committee points and call

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it a speech. I will deal with those matters during the four days of the Committee stage on the Floor of the House. I wish to say something generally about budgetary morals which I thoroughly dislike in the form of the behaviour of the Chancellor on Budget day. He had a lot to say about purchase tax.
Mr. Roebuck: And the road fund licence.
Sir G. Nabarro: The hon. Member has just come in. He took his seat two minutes ago. If he wants me to deal with the road fund licence I will do so, but at present, in case he did not hear me, I am dealing with purchase tax.
The chancellor made a statement about purchase tax. He said that he was keeping the rates constant, that he proposed to broaden the base of purchase tax and to apply the tax to a number of items of household goods. He then proceeded to mention two or three trifling items such as paper handkerchiefs and plastic wallpaper. He was not man enough to stand up and say "I propose to broaden the base of purchase tax by applying a 13¾ per cent. rate to three major items of household expenditure all of which are essential in character. I propose to tax for the first time bed linen, blankets and towels." He left the trade to stumble across it a few days later. That is very deft, devious, bordering on dishonest behaviour.
The right hon. Member for Gloucester (Mr. Diamond) would not do a thing like that. [An HON. MEMBER: "Oh."] Of course he would not. He would have been the first to talk about towels, bed linen and blankets. He would not like to mislead anybody, nor would I. In fact, the Chancellor of the Exchequer has vastly complicated purchase tax by his proposals in the Budget. Look at the four rates that we have now: 55 per cent. or 11s. in the £; 36⅔ per cent. or 7s. 4d. in the £; 22½ per cent. or 4s. 6d. in the £; 13¾ per cent. or 2s. 9d. in the £.
The Chancellor made some footling excuse that he could not level out these rates this year. He is going back to the old complications of where the previous Labour Government left the purchase tax in 1951 with seven rates, 90
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per cent. at the top and 5 per cent. at the bottom, which the Tories cleaned up to 25 per cent. at the top and 10 per cent. at the bottom. Those who doubt the Tories' capacity to reduce taxation should note the span: 90 per cent. at the top and 5 per cent. at the bottom was where we found the rates in 1951; where we left them in October, 1964, was 25 per cent. at the top and 10 per cent. at the bottom. Now they have gone back to 55 per cent., 36⅔ per cent., 22½ per cent. and 13¾ per cent., all designed to cause the maximum of inconvenience and extra work to wholesale and retail traders.
The imposition of the extra purchase tax, like the imposition of the selective employment tax, is all highly inflationary. I do not wish to go through every measure of increased taxation. I will deal with them all seriatim and I hope penetratingly in Committee. In a Second Reading speech, I content myself by saying—[Interruption.] It is nothing to laugh at. It is a very serious matter. I content myself by saying that £340 million of extra taxation is £340 million added to retail prices, plus the premium of the traders who levy the extra taxes, and that premium raises the addition to prices to a figure which I calculate to be in excess of £400 million.
Last year retail prices rose by 1s. 3d. in the £ and wages by a commensurate sum. During 1969, as a result of the Chancellor's nefarious fiscal habits, there will be an increase in retail prices, in my view, approaching 1s. 6d. in the £. Wages will rise by a similar amount, and we shall be gripped by the same inflationary tendencies as stigmatised all our economic efforts in 1967 and 1968, but with the inevitable result that at the end of 1969 we shall be no nearer our goal of balancing our payments overseas.
I have one last word to say, and it is about Clauses 18 and 19. I think that the hon. Member for Chislehurst had it nearest to right. What he was trying to say in a mixed up and rather verbose fashion was that these two clauses are inoperable as they stand. Even the Chief Secretary talked about the difficulties that the accountants would have. Already a dozen accountants, bank managers and businessmen have been after me to try to interpret what these Clauses mean and whether the interest on personal overdrafts in widely differing circumstances

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will be admitted as a charge or otherwise against calculating liability to income tax and surtax for the individual.
I am not a tax consultant. I cannot even do my own tax papers, so complex are they after five years of Labour Government and the excessive Finance Acts of recent years. I would not attempt to interpret what is written in Clauses 18 and 19, but I know that these provisions are wholly bad and I shall argue against them in detail in Committee. I shall ask my party to be quite explicit in saying that immediately we resume office these provisions will be cancelled for the simple reason that if a working man—and I am the epitome of the working man—
Mr. Roebuck: Alf Garnett.
Sir G. Nabarro: Alf Garnett earns a very large income and pays surtax at the top rate. The aggregation of Alf Garnett's income tax and surtax is at the rate of 18s. 3d. in the £. The hon. Member for Harrow, East (Mr. Roebuck) will never see an income of that magnitude or pay tax on that scale. He is much more likely to be paying income tax at 4s. in the £, denoting the meagre level of his own earned income. I think I am perfectly in order in responding to that irrelevant interjection.
I object to Clauses 18 and 19 for the very good reason that if a working man chooses to diminish the amount of his income by borrowing money from any source whatever, the cost of borrowing that money should, in logic, be set against his income, for the whole of his income is subject to income tax and, if it is of a higher order, to surtax. To say that he can borrow and allow the interest as a charge only for a house or for land or for house improvements is to single out one type of consumer expenditure in preference to another.
That is the sort of discrimination indulged in by a Labour Government—a government of meddlesome Matties, Nosy Parkers and busybodies, prying into the private affairs of individual citizens, which I, as a Tory and a capitalist, denounce as being none of the affairs or the functions of the Government. That is the private business of the individual citizen, and the Government should keep out of it.
I shall urge upon my party the repeal of Clauses 18 and 19, if they reach the
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Statute Book, and certainly I shall vote happily against them as opportunity permits.
The whole Bill is bad. It is as bad as any Finance Bill since 1964 on account of its longevity, on account of its complexity, on account of its inflationary tendencies and on account of £340 million heaped on the backs of long-suffering British taxpayers after they had already shouldered manfully £250 million from 22nd November last and £923 million from 19th March, 1968. It is monstrous that the Labour Government should still remain in office after this gross contravention and travesty of every election promise that they made.
8.20 p.m.
Mr. Ted Fletcher: I must resist the temptation to follow the argument of the hon. Member for Worcestershire, South (Sir G. Nabarro), if indeed one could follow his argument. I want to direct attention to what hon. Members may consider to be a trivial aspect of the Budget compared with the £340 million that the Chancellor is raising through the Finance Bill.
I agree with only one thing that the hon. Member for Worcestershire, South said; namely, that when the Chancellor made his Budget speech there was some doubt and confusion about the increases in purchase tax that arose from the ending of the exemption of those goods in Schedule 1, Group 2, of the Purchase Tax Act, 1963.
I particularly direct attention to the purchase tax, for the first time, on hand knitting wools. I do this for two reasons. First because I have a constituency interest as a large firm in Darlington provides employment for the citizens, and, secondly, on the ground of equity, because this is a tax on the leisure activities of millions of women in this country. Many of them are elderly widows and pensioners who can ill-afford the additional tax of 3d. for every two shillings they spend on an ounce of wool.
Hand knitting is possibly the oldest form of do-it-yourself activity in this country. It seems that we are penalising the most industrious section of our community by imposing a tax on hand knitting wool. It seems a most inequitable tax on an activity that is socially important in this country.

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One of the greater novelties is that, while children's manufactured garments remain free of tax, the mother who knits clothes for her children will now, for the first time, have to pay tax on her raw materials. This is quite inequitable.
This tax will have certain effects on the retailers of wool. It will mean that shops which exclusively sell hand knitting wool will have to face the fact that the tax will mean a reduction in their turnover. This may well lead to increased prices in addition to the 3d. on two shillings per ounce of wool.
Apart from the tax on the retailers, we must also consider the tax on the woollen manufacturers. It is estimated by Patons & Baldwins, a large firm in Darlington, that a ten per cent. reduction in the sales of hand knitting wool will lead to the loss of about 300 jobs—and this in a town in a development area where unemployment is twice the national average. It will certainly have a big impact upon a town which is using all its energies to attract new industry. Therefore, from an employment point of view, it is important that the Chancellor should consider the effect of this tax not only on the people in Darlington, but in other woollen manufacturing towns.
It will also have an effect on production, because the machines used to manufacture knitting wool are special purpose machines which cannot be converted to other jobs. If these machines are idle there will be a big impact on the export trade in wool. I am informed by Patons & Baldwins that 18 per cent. of their turnover now goes for export. Its export prices are maintained to some extent because it has a good home market. If the home market is reduced, this will have an impact on import prices and this will not increase, but possibly decrease the amount of exports.
We have the anomaly of an imposition of purchase tax for the first time which discriminates against what I have described as one of the oldest forms of do-it-yourself activity. The policy of successive Governments has been to encourage leisure pursuits. This tax is penalising millions of women, many of them quite elderly, who take up knitting as a hobby, which adds to our Gross National Product. This inequitable tax will mean that many of these women will knit less.
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We had reference this afternoon to the Health Service charges. I think they are deplorable and I hope that on another occasion I shall be able to say something about them. One thing which can be said about the Health Service charges is that those on supplementary benefits can make application for those charges to be met. But the elderly widow or the pensioner who knits is unable to get an increase in supplementary benefits to help pay for the increased cost of knitting wool. This tax will penalise widows, pensioners and others who take up this leisure time activity, and it will have a great social consequence.
I ask the Chancellor to give very careful consideration to the impact that this tax will have on the industrial activities of woollen manufacturers in my area and on the social activities of millions of women in this country. I realise that this is a Committee point and we have not yet reached the Committee stage, but I ask my right hon. Friend to look very carefully at this imposition and to ask himself whether it is possible, before we reach Committee stage, for the Government to review this imposition and to decide to reduce or abolish purchase tax on hand knitting wools.
I have been advised, in answer to a Question, that the total income from increased purchase tax, not only on hand knitting wools but on yarns and rug yarns, will be about £5 million. This is a small sum of money compared with the £340 million that is being raised through the Bill. It will certainly do a lot of harm to leisure-time activities for millions of women. It will mean that the mother wile knits for her children and who, for the first time, now has to pay purchase tax on her raw materials will possibly purchase manufactured garments. This in turn will mean that there will be an increase in the sale of manufactured garments on the home market, leaving less for exports. This is an anomaly, because the woman who knits for her children is being penalised and she may decide to purchase for her children manufactured goods which are free of tax.
With these considerations in mind, I urge my right hon. Friend to think very carefully about the impact of this tax. I hope that when we reach Committee stage he will be able to assure us that, after consideration, he has decided to

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withdraw purchase tax on hand knitting wools.
8.30 p.m.
Mr. John Nott: I hope the hon. Member for Darlington (Mr. Ted Fletcher) will forgive me if I do not follow him on his particular subject, particularly since we shall have a full opportunity of discussing it during the Committee stage of the Bill. I refrain from following him only because several of my hon. Friends and other hon. Gentlemen may wish to speak.
Since the Second World War the British economy has been characterised by levels of employment and prosperity which were undreamed of in the 1930s; and apart from the present time when four years of incompetent economic management has pushed unemployment in this country to the highest level for decades—and my belief is that this Finance Bill will push unemployment higher still—this country's productive capacity has been more or less fully uitilised. While we have fallen drastically behind in the international race for growth and, more alarming still, in the expansion of our existing productive capacity out of which future growth in visible trade must come, this country still remains today the pleasantest, happiest and most tolerant society in the whole world in which to live. In our discussion of the Finance Bill we should remember that this, after all, is the highest economic return of all.
Yet in spite of this the British people are not satisfied, and I believe quite rightly; for it is only out of a higher growth than we have had in the last three years that better housing, health, and education, and greater leisure too, can really come. We cannot ever more maintain the stability and relative tranquillity of our society unless some dramatic economic break-through is soon obtained. The revolution of rising expectations is at work in this country, and if those expectations are to be frustrated, then eventually the uglier facets of our society will show through.
In the context of this Bill and of the Budget which preceded it I am left gasping that an able man can bring forth a measure which is so utterly lacking in direction and in vision. It seems to me that this particular Budget and this Bill have no strategy at all. At least last year there was a theme—the achieve-
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mentof a massive surplus as a forerunner of better things to come. But in this Bill disillusionment has taken over.
In spite of the inherent danger of the position to which I have referred there are however, two grounds for optimism as we debate this Bill today. The Minister of Technology was right—and that really is an economic miracle—when he talked the other day of the huge reservoir of talent, energy and imagination which exists among the younger middle management in British industry today. This middle management is just bursting to break out if only some day some Chancellor from somewhere will come along and give it the opportunity to do so.
It is a tragic thing that practically every Chancellor of both parties in this country since the war has been completely lacking in the only commercial or industrial experience that really counts; namely, that of having had to work his way up through a competitive-minded firm. This is not the fault of Conservative and successive Labour Chancellors. It is the aftermath of the war and of our particular imperial past which preceded it. Only now is middle management emerging which was not trained and educated in, and did not have, the outlook which was necessary to run an empire and to fight a war. So now at least we have a glimmer of hope, and it needs a Chancellor to bring this talent out.
My second reason for hope is my belief that even more important than the release of talent, the task requires a fixity of purpose, a toughness, even a bloody-mindedness on the part of a Prime Minister and a Chancellor of the Exchequer of this country. I do not believe any Socialist Prime Minister, however genuine he may be, can possibly succeed mainly because it is impossible for him to implement what is necessary with the party which he has behind him. I believe that my right hon. Friends can and will.
I come now to specific comments on certain Clauses of the Bill. Naturally, I start with overdrafts. The whole purpose of the investment mechanism, as I understand it, is to put spare money to the most productive use. What better method could there be than for those seeking a fixed return to pass their savings through the banks and insurance companies to those who wish to take the

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risks? The overdraft against securities, which is what the Chief Secretary is aiming at, the overdraft against an endowment policy of one man, is nothing but the application of the fixed-interest savings of another into the type of risk investment on which the future of this nation depends.
Moreover, the equal evil of this narrow-minded move is completely to remove the last remaining method by which the middle-income groups could at least establish a minimum degree of true financial independence. As the Chief Secretary must know, the best men enter industry to make their fortunes, and there is nothing wrong with that. The motivations of politicians and administrators are entirely different. The best men enter industry to make their fortunes, and we should encourage them to do it. If more young management in particular had the wherewithal, which it cannot have today, to cock a snook at the boss, its independence of judgment, its ability to innovate and its imagination would be much enhanced.
By removing options in the 1966 legislation whereby the capitalist was able voluntarily to share his wealth with the manager, and by removing the life policy against securities in this Bill, the Government have successfully prevented the only means by which a man of no inherited wealth but of some ability was able to achieve some financial independence of his own. It is one of the real ironies of Socialist rule that the rich should be infinitely richer here today than they were four years ago, but that the ordinary man, the young executive, or the middle-aged man working in British industry, on whom the whole future of this country depends, is in a position of not being able to save a single penny. The net result of all this is that the best young men will join the actors and the actresses: they will move abroad, and they will work for United States companies and firms. If that is the Chancellor's objective, it is very strange indeed.
The Chief Secretary has a look of incomprehension on his face. I do not expect him to understand this, but I make the statement just the same. Just as no Socialist appears to understand that it is the pacemakers of a society who make a country rich and strong, so they fail to
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understand the rôle of profits. I do not think that our present Chancellor really understands the distinction between sales and profits, and profits and cash flow, and I am sure that Treasury officials do not understand it either. If the right hon. Gentleman is aware of it, it is difficult to understand how he can allow cash grants for new investment in plant and equipment which cost this country up to £400 million a year and then more than wipe out the whole of that amount by raising corporation tax. The net effect is to make a transfer payment whereby the profitable companies subsidise the capital investment of their unprofitable brethren. This is an achievement which not even the Secretary of State for Social Services in his maddest moments could achieve.
It is, further, clear—and here I must charge the Chief Secretary with something; he understands, but he prefers to forget—that our withholding taxes on British companies, on which the export achievements of this country depend, are now about the highest in the world. On a full distribution of corporate profits they are now at 68 per cent., and on a two-thirds' distribution of corporate profits they are 60 per cent., compared with the 1964 position of 53¾ per cent. It is an utter misconception, and quite wrong for the Chancellor and the Chief Secretary to claim that our tax rates on companies are lower than in most countries abroad. In almost every comparative case, the investor whose funds provide the capital for innovation and the expansion of capacity is worse off now than in almost any other country. I do not want to go into the question of ploughed back profits, but I hope to do so in Committee.
I come now to my major charge against this Government. It is the unique and novel means which they have adopted in the last four years of destroying the confidence of businessmen at home and of countries overseas in the achievements of this nation. They have done so by setting targets so impracticable, so euphoric and unattainable, that when they are not met the British people feel a deep sense of loss and shame.
I now quote some examples: there is their past obsession with the incomes policy, the maddest and most negative policy of all. Now there is their present

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obsession with strikes, which represent about 4 million lost days a year against 280 million lost through sickness.
The problem in this country was never the wage element in costs, it was never strikes. The problem is the gross restrictive practices of management and men, the fact that senior management is blocking the way of younger management who want to get on, and inadequate investment in plant and machinery. Those are our problems, not strikes or the wage element in costs, about which the Government have exerted almost three years of misdirected energy.
On this Bill, the more relevant obsession is their obsession with the trade figures. It is almost unbelievable. Do the Government not know that this country has had a surplus on its current trading balance only in seven years out of the past 175 years? If it is true that a surplus on our current trading balance is that vital, this country would have been bankrupt in 1850 and the Chief Secretary knows it. During the time when this country was incontestably the most powerful nation in the world, we ran a persistent deficit on our current trading balance.
It is the invisibles which have kept this country in surplus year by year for 100 years. It is the service industries and overseas investment which have been our life blood. One has only to consider the figures to see that. Today, invisibles represent approximately 30 per cent. of total world trade. It is a field in which we, together with the United States, dominate the world and one in which growth is far faster than it is in the world trade in manufactured goods. Yet, in a field which has been crucial to this country for 100 years, the Government have put the emphasis of all their taxes. They have levied S.E.T. of £600 million, but, more than that, it is their negative attitude towards invisibles, their incapacity to see this fact, which is the most damaging of all.
Lastly, I turn to the make-up of our invisible receipts. In this connection no long-term thought has been given by the Government to the crucial heading of our investment income in future years. A glance at the capital account will show a declining deficit on capital flows, for which the Government misguidedly lavish
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much praise upon themselves. But our continued investment overseas is the very seed corn from which our invisibles must grow in future years. If the growth in our investment receipts had not been over 200 per cent. between 1952 and 1964, where would we in this country and the Government be now?
I can list the fields for study on the capital transaction side only very briefly, concentrating on those which deserve attention and have had none at all. First is the codification of our exchange control regulations, which are a jungle. Perhaps the Chief Secretary wants his £95 million in stamp duty revenues. Let him have it if he must, but let us simplify our stamp duty laws. Then, he must look at the premium dollar. It is monstrous that British companies are being forced to pay a premium of 60 per cent. to invest overseas. Companies are often unable to set up sales subsidiaries in, say, Japan or Germany without being forced through the premium dollar market at these rates. Why do not we have an urgent review of the requirements governing the remittances of overseas profits to this country? Why are companies forced to remit their profits here when they may be needed overseas for expansion, with the companies concerned then being forced through the premium dollar market at 60 per cent. in a later effort to expand their facilities? These are the narrowest of short-range measures, damaging to this country's future.
We must look at some sort of E.C.G.D. help for investments overseas, just as the Americans provide through A.I.D. Why must we have this paranoia with manufactured goods? There should be E.C.G.D. cover for investment as well as for the movement of goods. This is done in many countries, notably in the United States, with great success. Although suggestions of this type have been made in various reports—these ideas have been well ventilated—we have heard nothing about them from the Government.
We must be an outward-looking nation if we are to survive and we must thrive on cross investments and the free flow of trade. It is not by grandiose technological communities that we will prosper. The exchange control regulations must be simplified so that companies can invest abroad.

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Why are we not giving more help to companies which are trying to borrow in Euro-dollars to finance their expansion overseas? It is often not possible for companies to give the necessary guarantees to borrow in foreign currency. After all, I am merely asking for the same treatment as the Government are giving to local authorities and others. The British people have been deluded by the Labour Party into believing that it lies in the Government's hands to make the people rich, to make the poor happy, to restructure industry and to cause a technological breakthrough. It does not lie in the Government's hands to do those things, and the British people are beginning to realise this. Because so many Labour promises have been broken, the people are disillusioned with politics and with all politicians.
I hope that the Opposition Front Bench and the Conservative Party generally will make no promises. We should say repeatedly that the consumer can be safeguarded from monopoly, that the poor and sick can be protected from misfortune and that individuals can give of their best only in a competitive climate untrammelled by restrictions and, as far as possible, free from subsidies.
We need a society in which incentive and profit are respectable goals and in which the rewards of success are sufficiently high to compensate for the penalties of failure. This may seem a harsh doctrine, but in a world in which national Government increasingly do not have that much control over the destinies of their own countries—the Chief Secretary knows that only too well—it is the only doctrine which can preserve what I earlier described as the tolerance and happiness of our society.
8.49 p.m.
Mr. John M. Temple: I congratulate my lion. Friend the Member for St. Ives (Mr. Nott) on making an absolutely brilliant speech. It was typical of the thinking of the up and coming generation in the Tory Party.
I have had the good fortune to have had a copy of the Finance Bill for a week, unlike my right hon. Friend the Member for Flint, West (Mr. Birch), who also made a brilliant speech, which goes to show the tremendous grasp he has of
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the financial problems which face the country.
Having had this opportunity to study the Bill, I find absolutely zero incentives in it. Having been bemused by all its complications, I was interested to hear the Leader of the House speak about the Committee stage of the Bill. He said that there would be four days on the Floor of the House and that the minutiae would then be dealt with upstairs. There will be about 150 pages of minutiae of fantastic complications dealt with in Committee upstairs.
I have been studying recently the trend of the type of man who gets the chairmanship of a big public company in this country. A generation ago chairmen of big public companies had grown up through their companies and had an intimate knowledge of the trades with which their companies were associated. Today half the chairmen of public companies are chartered accountants. That is because they have to have an intimate knowledge of the tax structure. It is a severe comment on the efforts of all political parties that they have complicated the tax structure to such an extent that today only brilliant chartered accountants can be looked on as the chief administrators of these enormous corporations. I welcome the fact that time and again my right hon. Friend the Member for Enfield, West (Mr. Iain Macleod) has said that one of the main planks in the Tory Party's programme are proposals to simplify the tax structure.
Before referring to some aspects of the Bill and two new taxes which have not been mentioned so far in this debate, I comment on selective employment tax. My hon. Friend the Member for St. Ives pointed out the tremendous contribution which invisible exports make to our balance of payments. The taxation on contributors to those invisible exports has been very serious. The impact of selective employment tax on the insurance industry and all those industries which are making such a contribution is very severe.
Another industry which has been seriously hurt is the tourist industry. I believe that it is cheaper now to have a package holiday on the Costa Brava than in Bournemouth or Blackpool. More serious, and this is what top tourists,

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members of the jet set, find when they come into London, is the lack of personal service. When they go to London, Paris, New York, or Mexico City they require personal service. They do not want to have to get out a do-it-yourself kit to clean their shoes. This tax is severe in its effect on first class personal service for which we have been noted down the years.
I shall pick out of this rag-bag of a Bill a few general comments. My right hon. Friend the Member for Flint, West commented on one matter to which I have given some attention; exemption in future of gilt-edged securities from capital gains tax. The Chancellor has done this at a time when gilt-edged securities are virtually at the bottom. If under 40 is not the bottom for War Loan we can start tearing up all our gilt-edged securities. All those faithful people who have held gilt-edged down the years have been cheated by the fact that in future they will not be able to set off capital losses against other capital profits when they sell them.
My right hon. Friend the Member for West Flint, proposed from the Dispatch Box a few years ago that we should exempt local authority loan stocks from the provisions of capital gains tax. Today the redemption yields of local authority loan stocks with similar dates of redemption to those for gilt-edged are nearly ½per cent. worse. The public should know the great prejudice which the Government have against local authorities. This, I think, may well be because so many are controlled by Conservatives.
I do not know who dreamt up the idea of disallowance for tax purposes of interest on loans. The scheme will be riddled with anomalies. If a person buys a house today and then purchases a washing machine, a washing-up machine and a night storage heater, he cannot borrow money to finance the purchase of those items and set off the tax on that borrowed money against his income. But if, having equipped his house with those items, he sells it complete with them the buyer of the house will be able to borrow money against the total value of the house, including all those fixtures and fittings.
If a prudent farmer had to pay estate duties and also wanted to improve his
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farm, and paid the estate duties out of his own pocket and did the improvements on borrowed money, he could set against his taxable income the interest on the money borrowed for improvements. But if he did this the other way round and financed the improvements himself and borrowed the money to pay the estate duty, he would not be able to set off the interest on the estate duty borrowing against his gross income. That is a glaring example of a different approach to exactly the same problem attracting entirely different rates of tax.
Another new tax which has not been mentioned is the proposal with regard to estate duty on discretionary trusts. I have only a modest knowledge of discretionary trusts, but I know that they are all different. They have only one common factor, which is that the income on them goes to what is called a "class" of beneficiaries, which may be very wide. Within a "class" of beneficiaries who could benefit under a discretionary trust there are probably a number of infants. They may benefit for, say, 1969 or 1970, and may not benefit again throughout the whole of their lives. Who is to keep track of them as they grow up? They may die in Timbuctoo, New York or New Zealand. Are they to send from heaven or wherever else they go a telegram to trustees they have never heard of telling them that they have passed away, and that there will be some estate duty payable by the trust, which perhaps was wound up 50 years before, which is a more than probable state of affairs?
I do not know whether in the future it will be possible to get people to serve as trustees on discretionary trusts, because the trustees will be liable for the estate duty. As I understand discretionary trusts, the trustees usually have power to dissolve the trust and distribute the assets. If so these may well be a charge for estate duties charged on a trustee who has died 50 years before and on a non-existent trust which has been distributed 40 years before that. These are not impossibilities with regard to the legislation proposed on discretionary trusts. I recommend the Chief Secretary to read the advice of the tax correspondent of the Financial Times, which is that going back a number of years should be limited to seven. That would be the realistic thing to do. It is unrealistic to think that trustees can keep

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tabs on beneficiaries who may have benefited to a very limited extent many years before.
Another tax which has not had a mention is the new betting duty. A couple of years ago the Chancellor introduced a general betting duty, last year he doubled it, and earlier this year the Chairman of the Horserace Betting Levy Board, Lord Wigg, was responsible for the doubling of the betting levy. Now we have the Chancellor introducing a tax on bookmakers' premises, which will in effect be equal to a one per cent. tax on turnover. It is extraordinary that time after time a general betting duty or type of betting duty is increased. We have constantly advocated from this side of the House that there should be a differential between on- and off-course betting. The Chancellor claims to have brought this about by increasing the duty on off-course betting. To me, that is very much an Irishman's rise in betting duty. I seriously warn the Chief Secretary and the Government that there may well be a big revulsion by punters against these very high rates of duty, which of course will be paid by them.
We cannot go on increasing betting taxes or once again we shall face the situation where we are driving it underground. That would be exceptionally undesirable. I make the plea that this duty, which will be payable from 1st October and will amount to £7 million, should be capable of being paid by instalments.
The final insult in the Bill, which is so unconstructive, is the swipe it takes by the purchase tax imposed on potato crisps and pet foods. This may seem part of the minutiae of life, but if one fries one's own potato chips no tax is attracted, and if an old-age pensioner is well enough to go out and buy a penny worth of pet food in the local butcher's or fishmonger's no tax is attracted. But if he is infirm and has to rely on tins of pet food, a tax of 22 per cent. is attracted. I estimate that this tax on pet foods will cost an old-age pensioner keeping a cat or dog about one shilling a week extra. Just how mean can one get with pensioners who are not capable of going out and buying a pennyworth of pet food from the normal supplier and has to
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buy food carrying a 22 per cent. purchase tax.
I am more disappointed with this Budget than ever before. It is a rag bag, and I am afraid that the Chancellor has lost his position in the leadership stakes in the Labour Party. I am not surprised. Any Chancellor who could bring in such an unimaginative Budget deserves to lose his position in the hierarchy of his party, and this has happened. But who has taken his place in the stakes? Someone, I am afraid, who failed the country and brought about devaluation. Perhaps it requires a devaluation in order to get him promoted once again to the height of being considered as an alternative leader to the Prime Minister.
I am afraid that what will happen as a result of the Budget is that prices will rise and that the in our pockets will once again be devalued. This is what is worrying our people at home and our friends overseas.
9.3 p.m.
Mr. David Waddington: My hon. Friend the Member for the City of Chester (Mr. Temple) will forgive me if I do not follow in any detail the points he made but I agree with him that those of us who have been fortunate in being able to read the Bill have found it a weary document. I tried it as bedside reading and was not impressed. We are not surprised that the Government have run out of ideas, and, indeed, remembering some of the crackbrained schemes advanced by the Government in 1964 and 1965, we should be rather glad that they have.
The history of the last four years is extraordinary. Every few months the Government come to the House and say, "We are sorry but we must once again impose more and more burdens on the long-suffering British public". Every few months the burden of taxation is increased. No hope of relief is ever advanced. We know what is needed. We want to give our young energetic people, on whom our future depends, some hope for the future. We want to tell them that if they use their initiative and try to achieve something in life there will be a reward for them. What hope is ever offered by the Government? None whatever.

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A very important detail of the Finance Bill for that part of the world from which I come is the new tax on household textiles. I should declare a negative interest here, in the sense that I spend a very small part of my time making cotton handkerchiefs. I suppose that I should be glad that a new tax has been imposed on paper handkerchiefs. The Government are under a great misapprehension if they do not realise that there is great indignation and annoyance throughout Lancashire at the imposition of this new tax. It is not for nothing, as the Government well know, that Governments over the years have always exempted these particular products from purchase tax. I appreciate the argument advanced by the Chancellor for broadening the base of indirect taxation, and I accept it. But this seems to be the oddest of times to make this change. The Government are taxing necessities. The Chancellor is quite deliberately forcing up the cost of living, particularly for those who can least afford to pay.
I refer first of all to young people setting up home for the first time, who have to spend a lot of money on things like sheets and blankets, and, second, to the older people who find at the end of their working life that they very often have to renew these household necessities. In the course of his Budget speech the Chancellor said:
"Household textiles and cloth were exempted from Purchase Tax in 1955 and 1958 in the interests of particular regional industries."—[OFFICIAL REPORT, 15th April, 1969; Vol. 781, c. 1023.]
This is quite right, but what has happened since to suggest that those industries which needed that assistance in 1955 and 1958 do not need it today? What the textile industry lacks is confidence in the future and in this Government.
It is a great pity and a scandal that the first Governmental response to the report of the Textile Council should have been a kick in the teeth. For months at Question Time we have been fobbed off by Ministers with the reply, "Wait until you see the Textile Council Report; then we will tell you what are our plans for the textile industry". What happened? On 30th March the Textile Council produced a report calling upon the Government to give assistance to the textile industry so that it may have some
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confidence in the future. Then the Government, instead of giving the textile industry that support, give it a kick in the teeth in the shape of this new tax.
We must not forget the dislocation of trade attendant upon the bringing of a new line of goods into the purchase tax net. Last night I was speaking to a person concerned in the manufacture of furnishing fabrics. Between now and Whitsuntide he will have sold every single thing he has in stock, and he confidently expects that he will not get another order between Whitsuntide and late autumn. He also tells me that representatives of the Customs and Excise, who had to visit him to negotiate with him about the wholesale value on which the purchase tax should be levied, told him that between now and Whitsuntide representatives of the Customs and Excise are supposed to visit no fewer than 1,000 converters and finishers in Manchester to negotiate the sum on which purchase tax is to be levied. All of this is supposed to happen before the tax comes into force in a month or so. Make no mistake about it, the administrative burden is immense.
I wish that the Chancellor in his Budget speech had pointed the way towards a comprehensive reform of indirect taxation. Instead, he has singled out for special punishment an industry which is already facing special problems.
I hope that future Chancellors of the Exchequer will be more careful than the present Chancellor of the Exchequer was in the choice of words in his Budget speech. It is monstrous that words were used in the Chancellor's speech which had the effect of casting the whole trade into a state of turmoil for the next 48 hours. No one knew what tax changes on textiles the Chancellor had in mind. I hope that in future plainer words will be spoken by the Chancellor on Budget day.
9.11 p.m.
Sir Cyril Osborne: I warn the Treasury that it may have great difficulty in raising the amount of tax which it anticipates will be raised under the Bill. In many industries there is evidence of a slackening of trade. Orders are more difficult to get, profit margins are being squeezed, overheads are increasing, and the balance sheets next year will not be

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as good as in the past year. The Chancellor, and the Treasury who advise him, should bear in mind that the figures may not turn out so well as they anticipate. I am not suggesting that there will be a slump at the end of the year, but trade is difficult, and this will be reflected in the amount of money that is raised by the taxes.
The Finance Bill imposes taxation of £14,464 million, which is by far the highest burden that has ever been put on the shoulders of the British taxpayer. The last Conservative Finance Bill in 1964 imposed taxation of only £7,169 million. It is costing the taxpayer more than twice as much to live under a Labour Government as it did to live under a Tory Government.
Additional taxation on the individual in the last five years may be summarised in this way. The tax on cigarettes in October, 1964, was 3s. 8½d. a packet, today it is 4s. 9½d.; whisky 30s., today 44s.; petrol 2s. 9d., today 4s. 6d.; beer duty, 8d., today 11d.; the road fund licence has gone up from £15 to £25; the radio licence from 20s. to 25s.; the T.V. licence from £4 to £6; income tax has gone up from 7s. 9d. to 8s. 3d., and the national stamp included in the S.E.T. has gone up from 21s. 4d. to 70s. 8d.—a fantastic rise.
As a result of these impositions the Government have achieved a wonderful record. Unemployment went up from 348,000 to 558,000. If the Prime Minister had given these figures to his audience on Sunday night, they would not have cheered him so much.
This Finance Bill adds a further £340 million in extra taxes. The reasonable question to ask is, will it be enough? Last year, in 1968, the Finance Bill imposed additional taxation—the highest amount of extra taxes—of £930 million. Hon. Members opposite were stunned, shocked and disheartened by this extra burden. But it did not prove enough. In November along came the Chancellor and said, "I am sorry, I want more", and in another mini-Finance Bill he imposed an extra £250 million.
My constituents ask me, "Will this additional £340 million taxation imposed by the Chancellor be enough, or will we have to face yet another autumn
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budget?" I should like an answer from the Treasury.
My constituents then put to me the simple question: "What on earth do the Labour Government do with all the money they take from us?" My constituents would like to know. They would more readily bear the additional taxes if they knew that they were getting good value for money. They remember that this Government have imposed an extra £7,000 million taxes upon the country. They read that the Government have borrowed £3,000 million from foreign bankers, are still in debt and want to borrow more.
Local councillors have to try to explain to my constituents that the Government's proposals for better schools, hospitals, roads, sewerage schemes, and all the things which the Labour Party promised, have all had to be cut down, and the local councillors are quite unfairly blamed for it. The central government should provide the money for the things which they have promised. We have had to cut down on the Army, the Navy and the Air Force because we have not the money to pay for them. People naturally ask "Where does all this money go? Does it go down a bottomless rat-hole?".
The Chancellor gives two excuses for his actions. Firstly, he says that the Labour Government are increasing welfare payments to the poorer section of the community. That, of course, is true. He also claims that it is part of their tactics to redistribute the internal income of the nation and to take from the rich to give to the poor. But at the Labour conference in Blackpool last year the Chancellor made this boast:
"Since we came to power public expenditure has risen nearly four times as fast as national income."
What a stupid boast. What a foolish thing to say. It is worthy of the prodigal son, to boast that one is spending four times more rapidly than one's income is providing. Is there any cause to doubt that, internationally, we are in debt and that we have to borrow more and more, knowing full well that we will never be able to repay it. This is what hurts me in what was once a proud and independent nation.
No redistribution of internal income can affect the one problem which bedevils the whole situation, and that is

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the balance of payments. Balance of payments on current account, excluding capital movements, during the period of office of the present Government has been as follows. In 1965 there was a deficit of £91 million. In 1966 there was a surplus of £5 million. In 1967 we went back to a deficit of £399 million. Last year—and this is the figure that matters—the deficit amounted to £419 million. The present Finance Bill does not touch that problem of foreign indebtedness of £419 million. It is to the extent of £419 million that we are, collectively and individually, living beyond our means and spending more than we are earning.
That is the trouble. Individually, we are all smoking, drinking, gambling and spending on sport and amusement more than we are earning and more than we can afford. The Chancellor is trying to build up a Welfare State which in itself is fine but which the people are not prepared to pay for. That is why we are in this horrible mess and are always running to the foreign bankers in order to borrow money.
In his Budget speech, the Chancellor took pride in saying that he promised old-age pensioners a bigger pension. That is a fine idea and we all agree with it, but from where is the money to come? Certainly it will not come from this Finance Bill. It will be necessary to provide £250 million extra. Is it intended to ask the I.M.F. to lend it to us? If it is, we should be ashamed of ourselves for rattling the begging bowl abroad to pay for welfare arrangements of which we boast.
Our task is to increase the national wealth by at least £419 million in order to get out of our current debt. On more than one occasion, the Chancellor has said that we need an extra £500 million a year to repay old debts and build up our sterling balances against a recurrence of these problems. That means that, collectively, we have somehow to produce £1,000 million extra a year without paying ourselves a farthing extra for producing it. That is the grim reality which the Chancellor has failed to put before the public. In turn, it means much harder, much longer and much more productive work from everyone, and no more wildcat strikes.
This Finance Bill will not encourage anyone to work harder or to save. Who
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is likely to exert himself in an extraordinary way to earn more money, be he in management or on the shop floor, if too large a proportion is taken from him in taxation? It is unreasonable to expect it. The way to get men to work is to tax them less and let them keep more of what they earn.
Yesterday, we saw near-hysteria on the benches opposite over 'the proposals about spectacles and false teeth. They infuriated hon. Gentlemen opposite, as I can well understand. But the £3½ million that will be saved is mere chicken-feed when set against the problems facing us. Even to get out of debt we require to produce an extra £419 million, yet there is all this furore about £3½ million. We have to save 130 times more than the proposed saving on false teeth and spectacles. I do not know what hon. Gentlemen opposite will say when they have to face reality and we have to do this.
This Finance Bill is quite irrelevant to the problem facing us. It will not help us a bit. I hope that my respects will be passed to the Chancellor, together with the suggestion that, when he has five minutes to spare, he gives himself the pleasure of reading the fourth chapter of the book of Nehemiah. He will find there the boast of the old Jewish prophet:
"So built we the wall … for the people had a mind to work."
That was a boast worth making. If the Chancellor could bring the English people to have a mind to work—
Mr. Dempsey: What about the Scots?
Sir C. Osborne: If the Chancellor could bring the British people to have a mind to work and could persuade them to cease living on internal or external charity, we should not need Finance Bills like this. That is why I am so disappointed with it and why it is so inadequate to meet the problems that we face.
9.25 p.m.
Mr. Iain Macleod: My hon. Friend the Member for Louth (Sir C. Osborne) was, on the whole, gloomy in his economic analysis. Although I do not necessarily agree with him in detail, I am afraid that I, too, am gloomy about our economic position. I am sure

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that he hopes, as I do, that we will both be proved wrong.
Second Reading of a Finance Bill is often a dull occasion sandwiched between the two major events of the Budget speech and the Budget debate and the Committee stage. Indeed, I have often thought in previous years that it is a day that we might well dispense with. But I think that today has been an excellent day, with speeches from both sides in a low key no doubt, but of real value.
I propose to be brief. This is exempt business, but we are conditioned to voting at about ten o'clock, give or take a few minutes, and I dare say that we can arrange that.
My first point refers to the Chancellor's Budget judgment. The right hon. Gentleman said that I put forward no alternative to the Budget judgment. Perhaps he will allow me to make a small amendment to that. I put forward no alternative to his Budget judgment. I used to join in the game of Budget judgments, for game it is, with the Home Secretary in previous years. But when, as last year, the Chancellor of the Exchequer takes £1,000 million out of the economy with the idea of reducing consumer expenditure and consumer expenditure rises in that same year in money terms by £1,700 million, there is, in my view, little point in arguing whether £340 million, £300 million or £200 million is the precise amount. Touches on the tiller are of little value if there is no rudder on the ship.
Rather than jump about, I should like to concentrate on one subject only, the disallowance of interest, which has played a major part in our discussions.
There is on the Order Paper, if the House is unwise enough to give a Second Reading to the Bill, a Motion in the name of the Chancellor of the Exchequer. Without referring to it, it seems a vast improvement on last year's procedure. It seems an experiment well worth trying, and I hope that the House will agree.
But everything that I have heard today confirms me in the view that the right thing to do with the Clauses about disallowance is to examine them in deep and probing detail upstairs, to find out what give, if any, there be on the part of
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the Government, and then to bring them before the House on Report.
The Chancellor's case is largely based on people with large investment incomes running up to 18s. 3d. taxation in the pound, for whom borrowing becomes extremely cheap. We, on this side of the House, say that rather than alter an established principle of income tax law it is vastly better, if that be the right hon. Gentleman's concern, to reduce the levels of personal direct taxation. We intend to return to this in Committee. But it is a revealing figure, given by the Chief Secretary, that surtax accounts for only £5 million and income tax for £20 million of the £25 million estimated to be saved in a full year.
I invite the House to consider some of the points that we would like to hammer out in Committee, and if the Minister of State wishes to answer any of them now so much the better. First, on the question of goodwill, I will quote from a letter from a chartered accountant:
"In my profession, together with many others, solicitors, estate agents, etc., it is common practice when entering a partnership to pay monies for goodwill; and invariably these monies are either borrowed as a loan or from a bank, and, of course, repaid out of income earned."
I believe the hon. Member for Heywood and Royton (Mr. Barnett) is quite right. The difficulties that will arise on this do merit a White Paper from the Government, as do other points I will mention. I press that particular point upon the Minister of State and the Government, because there can be no question that very many professions in this country—some of the very best people in this country—are going to be adversely affected by this particular measure.
The second point that arises—and again there is much more detail than I can cover—is agriculture, mentioned by my right hon. Friend the Member for Windsor (Sir C. Mott-Radclyffe). As I understand it, the difficulty is that an agricultural estate is not recognised as a business—although properly normally it is one—and the point one wishes to make is that tax relief should be allowed on interest on borrowings used for the running of an agricultural estate. Secondly, it is often the case, surely, that on a death money is borrowed to pay estate duty

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when the only alternative is the fragmentation of the farm or the unit on which estate duty has become liable.
The third case I would like to mention is that of many private companies. We are apt to forget how many private corn-patties there are. There are 9,000 active public companies but 300,000 active unquoted companies; and even if I take those with a sales average exceeding £1 million per annum, there are still 37,500 prominent private companies—four times as many as the number of public companies. I invite a Treasury Minister to go to the very top in this field. Let him go to firms like Pilkington, Sainsbury and others and he will find that the method of personal borrowing they use to finance the future of their great companies is going to be very seriously and adversely affected by this particular proposal; and we will move appropriate Amendments on the Committee stage.
Then there is the question of saving. My hon. Friend the Member for St. Ives (Mr. Nott), in a really excellent speech, said this was—and it is—a blow to the young executives buying a stake in their own company; but it is more than that. There are many, many thousands of people who have borrowed money for excellent purposes through life assurances. They are, after all, borrowing their own money and they are going to be adversely affected by this. I believe this is a betrayal of everything that the Financial Secretary worked out with us on the life assurance Clauses of the Finance Bill a year ago. What the Chancellor has done with this Finance Bill is to introduce one saving scheme and kill 10,000 in the same Bill.
I wish to read extracts from a letter sent to me so that hon. Members opposite can realise that it is not the wealthy they are attacking with this Measure but precisely the kind of people whom they—and for that matter we—need if we wish to form a Government in this country.
The letter says:
"I am writing to ask whether you would consider trying to obtain a Clause in the Income Tax Acts to allow income tax relief for interest paid with life insurance policies where the purpose of the loan is to obtain capital for retirement.
The Chancellor's proposal to disallow income tax relief in respect of loan interest paid will over the 13 years 4 months from 6th April, 1970 cost me £962 13s. 4d. … Like many
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other lower middle class citizens I am incensed by the unfairness of this.
I am not a rich man, my capital has all been obtained from savings from hard earned in come after bringing up five children. My object in joining the Insurance Scheme was to save for retirement. I shall be over 63 years of age when the loan is repaid.
I have been unable to obtain a building society mortgage on my home because it is not of a high enough standard. It is a 1914 stone built cottage …
If the whole of Britain worked hard, lived frugally, and saved like we do there would be no balance of payments problem."—[Interruption.]
Those are the man's own words. He says that he is lower middle class—that is his phrase, not mine—that he is saving for retirement, and that his cottage is of too poor a standard to obtain a mortgage on it. It is the savings of that sort of man that we should encourage, and not oppose as this measure will do.
The Chief Secretary said today—I think he attributed it to my right hon. and learned Friend the Member for Wirral (Mr. Selwyn Lloyd), although it was myself—that previous Chancellors had looked at this proposal, but if I might quote from the right hon. Member for Battersea, North (Mr. Jay), he said:
"I have been recommending every Chancellor of the Exchequer since and including Sir Stafford Cripps to get rid of it."—[OFFICIAL REPORT, 16th April, 1969; Vol. 781, c. 1199.]
Thus every Socialist Chancellor at least has been recommended by the right hon. Gentleman to get rid of this, and they have all refused, until this Chancellor of the Exchequer. We are therefore asked to believe that on the question of Socialist principles, whatever they may be, the present Chancellor is a better guide than Sir Stafford Cripps. We are asked to believe that on the question of equity the present Chancellor is a better guide than Hugh Gaitskell. We are asked to believe that on the political value of those people it will hurt the Chancellor is a better guide than the Home Secretary. We believe that this is not a just but a thoroughly unjust proposal.
I believe that the true criticism of this Finance Bill is the utter lack of consistency between the Chancellor's words and his actions. As my hon. Friend the Member for St. Ives said, there is no strategy at all apparent in this Bill. The Chancellor says that he will press on with the policies of a year ago, but those policies have failed and he dare not carry

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out the logic of his own words by taking many millions of £s out of consumer expenditure.
The Chancellor has made one change, and it is an important one. Up to a point it is the change which we have been urging on him and his predecessor for some time. We have urged that he should drop the prices and incomes legislation and concentrate on trade union reform. The Chancellor has at least accepted some of that advice, although if I read the weekend speeches rightly the Government are running away even from the meagre measure of trade union reform they have put before the House.
The Chancellor says that he intends to safeguard the balance of payments. As the hon. Member for Ashton-under-Lyne (Mr. Sheldon) said, the Finance Bill makes no great contribution in that direction, and that is a masterpiece of understatement.
There is not a Clause, there is not a Schedule, there is not a line in this Finance Bill which in any way strengthens our economy, which in any way makes us more competitive. The verdict of this side of the House, which I give without emphasis or even heat is that this Finance Bill, like the Government which spawned it, is a mess, and we are very happy to oppose it.
9.40 p.m.
The Minister of State, Treasury (Mr. Dick Taverne): The right hon. Member for Enfield, West (Mr. Iain Macleod) was clearly touched by some of the criticisms directed at him for not making any Budget judgment this year or last. Last year he did say that the Chancellor had done too much. Clearly, since this was not borne out by events, he regretted this, and refused to make any Budget judgments in the Budget debate this time. He explained this absence of any such judgment by saying that it was impossible to judge demands accurately or exactly.
He is perfectly right in that the indicators available are not altogether reliable or complete. To make no judgment at all on the best available information is a total abrogation of responsibility. It is a decision which no Chancellor could expect to make; it is something which no Chancellor in the past has been able to do.
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The hon. Member for Wanstead and Woodford (Mr. Patrick Jenkin) raised a general question of management demand. He asked how the Government intended to use this surplus to repay debt. I say to him, quite frankly, that I cannot give as specific an answer as he would wish. The whole of the surplus will be used to repay debt. As regards the position of the debt repayment, there will be a substantial requirement for sterling to finance the expected improvement in the balance of payments and reserves position. For the rest, the authorities remain determined to sell as much Government debt as possible, net, to the non-banking public so as to enable the maximum repayment to the banking sector.
We have to remember that the Government have to re-finance a substantial volume of maturities this year, partly in the non-banking and partly in the banking sector. It is impossible to predict how this will come out in the year as a whole. We must bear two things in mind. The first is that the large surplus, which the hon. Member correctly said is a surplus of £800 million, would put us in a very much stronger position this year than last, and the second is that many holders of maturing stock will want to replace it with other Government stock.
Hon. Members: Oh.
Mr. Taverne: In a most interesting speech the hon. Member devoted a great deal of time to the need for the simplification of the tax system, and for the discussion of tax changes through, perhaps, a Select Committee dealing with tax questions. He was backed in this by my hon. Friend the Member for Heywood and Royton (Mr. Barnett). I understand that the Select Committee on Procedure will be considering whether a Select Committee on Taxation is the right way to discuss this. That is obviously a suitable body to consider this question.
A word now about simplification. Successive Treasury Ministers have found that some of their high hopes for simplification have been disappointed, that the enormous burden which this carries for the Inland Revenue cannot be overestimated. In 1962 the right hon. and learned Member for Wirral (Mr. Selwyn Lloyd), after expressing his hopes for the simplification of the system, confessed that he had on his arrival at the Treasury

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had an "undue optimism about the simpleness of simplification". Further, as the hon. Member will realise, there is some conflict between simplication and equity.
There is another conflict too. The hon. Member said that he had come across many cases of the strongest objections to detailed avoidance provisions. He went on to say that he also found the strongest objections to the discretionary powers left to inspectors. He is riding two horses going in different directions. The one way in which we can avoid detailed anti-avoidance provisions is by having a general anti-avoidance provision, which would place far too wide and general a discretionary power in the hands of Inland Revenue inspectors. I am not, of course, saying that simplification is impossible, and I hope that the hon. Member will welcome the new approach to estate duty contained in the Bill. Here, there is a simplification of a very complex field of the kind which he has demanded. There has been very little criticism of these proposals and I assume that they command general support.
I also hope that my hon. Friend the Member for Heywood and Royton will welcome the issue of a White Paper on the lines for which he asked. I am also glad to know that the right hon. Member for Orkney and Shetland (Mr. Grimond) welcomed the Green Paper on public expenditure, which received an almost ecstatic welcome in The Times Business News. As that paper says, the present Government have done more than any previous Government in the aid of public discussion of matters of public expenditure, economic forecasting and matters in finance and taxation.
I turn to the main criticisms made of the Bill. These related to the selective employment tax and the disallowance of tax relief on personal loans. It is important that these two measures should be judged in the proper context of the Budget strategy. One starts with a judgment about the need to reduce demand and release resources for exports by a certain amount—a judgment which any Chancellor must make. This was discussed in the Budget debate, and this is not the time to judge the total. But, in approaching the way of achieving this aim, it is important for the House to remember the principles which underlie the approach.
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These principles are mainly two—first, that the reduction of demand should be done as fairly as possible and in a way which will re-distribute rather than produce regressive measures and, second, that it should be done with as little impact as possible on the cost of living.
Clearly, in the situation which the Chancellor found, it was impossible to avoid altogether the traditional measures of indirect taxation. It has been suggested that demand cannot be reduced and that these measures are ineffective. My hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) said, I believe, that it was impossible to reduce or restrain demand. The evidence is clearly against him on this. If one looks at what happened in the last financial year—
Mr. Sheldon: What I said was that it is impossible to reduce consumption, and what happened last year proves that.
Mr. Taverne: I am happy to rest on what happened last year, and that shows conclusively that the evidence is against my hon. Friend. Of course, last year the reduction in the increase in consumption or the reduction in consumption was not what had been planned. The explanation for this—this has been stated publicly—was that the increase in wages was greater than had been expected and that this offset the Budget measures to a certain extent, but to say that the Budget measures had no effect on consumption is totally misleading—
Mr. Sheldon: I did not say that.
Mr. Taverne: If I misrepresent my hon. Friend, I withdraw that, but for anyone to suggest that the Budget measures had no effect on consumption and did not have a major effect would be totally misleading. Last year consumption rose by only 1·1 per cent. at a time when the gross domestic product increased by 4 per cent. That is clear evidence that, even if the total effect was not as great as had been anticipated, the traditional measures of indirect taxation had a considerable effect on consumer demand and consumption.
I turn to those traditional measures of indirect taxation and I want to make a short reference to the purchase tax changes. The hon. Member for Nelson and Colne (Mr. Waddington) criticised these on a number of grounds. One or

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two of the grounds on which he and others criticised the Chancellor was the astonishing ground that the Chancellor should have explained that household textiles meant household textiles. That was made quite clear in the Budget announcement.
The hon. Member said that he is not against the idea of broadening the tax base. The Opposition keep telling us that we must broaden the tax base, but of course it cannot be broadened only by being extended to luxuries. The hon. Member must realise that it is quite impossible to broaden the tax base by confining the extension of purchase tax to luxuries. The right hon. Member for Enfield, West will realise that if one broadened the tax base a number of items would be brought in which cannot be described as luxuries. If one is broadening the indirect tax base, quite clearly the fairest way of doing so is to add items to the field covered by purchase tax, the exclusion of which was in many ways anomalous before.
Secondly, I want to say something about fuel tax. It is sometimes suggested that the motorist is in some ways a separate animal, quite unrelated to the rest of the human species, who must be freed from regulations and free from the taxes the rest of the species bear. If one looks at the question of rise of consumption it is quite clear that the fastest growing section of consumption has been in the rise in consumer expenditure on motoring. In the last decade this has increased by more than three times, and this is at constant prices and disregarding any effect of tax rates. It is therefore reasonable that some of the measures restraining consumer demand should apply in this sector. If so, much the fairest way of doing so is through the fuel tax rather than through licence duties, bearing less hardly on the weekend drivers and those with cheaper cars and more closely related to resources spent on the motorist.
However, the traditional indirect tax measures have three disadvantages. First, they tend to be regressive. Second, they tend by putting up the cost of living to increase the pressure behind wage demands. Thirdly, while it is nonsense to talk about a consumer revolution and
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quite clear that in the course of the last year there was no substantial drop in the personal savings ratio, nevertheless there was clearly a danger that a further heavy dose of indirect taxation of the traditional kind would have a diminishing effect. In the context of the Budget strategy therefore one must look at the S.E.T. imposition and at the disallowance of tax relief on overdrafts and personal loans as measures to release resources and restrain consumer spending which do not have the same disadvantages as the traditional indirect tax measures.
The main body of the Opposition attack has, of course, fallen in the past on S.E.T. I shall add a few points to the arguments which were advanced by my right hon. Friend the Chief Secretary. There is no question that as compared with purchase tax the effect of S.E.T. on the cost of living is very much less. This is partly because of the field covered by S.E.T. and partly because some—not all, but some—of S.E.T. has to be absorbed and is not passed on in higher prices.
In addition, the selective employment tax, according to the evidence which is quite clearly available, has a considerable effect on productivity in the tax-bearing sectors. Both in distribution and in construction there has been not only an increase but an acceleration to the trend of rising productivity. There has been a clear reversal of the labour pulls and labour trends in most of the sectors affected by the tax. It is precisely for this cause, precisely because it has less impact on the cost of living because part of it in many sectors has to be absorbed, that there is a sharper outcry about increase in S.E.T. than about any corresponding increase in purchase tax.
Sir Harmar Nicholls: Is not the hon. and learned Gentleman aware that the outcry was because the Government admitted that they had done this not out of merit or fairness but just because it was easy to collect?
Mr. Taverne: The hon. Gentleman is totally unaware of what has been said and what is the fact. It was explained at the start that there were three purposes to S.E.T.—first, the collection of taxes; second, the broadening of the tax

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base and an evening of the tax distribution between manufactures and services; and, third, to produce a new pattern in the distribution of labour. It is precisely because there is a resource—releasing effect about S.E.T. that it is a particularly suitable weapon—[Interruption.]
Mr. Speaker: Order. The debate has been placid so far, and there is no reason why it should not continue so.
Mr. Michael Alison: I am grateful to the Minister of State for giving way. He has stated the glittering qualities of the selective employment tax. Will he now tell us the doubts he has about it which led him to ask Professor Reddaway to look into it?
Mr. Taverne: Professor Reddaway was asked over a year ago to report on S.E.T. Since then evidence has become available which made it quite clear that of the weapons available to the Chancellor at the time when he had to take measures against consumption this was one of the most effective in the armoury of the Treasury.
The second part of the proposals which is uncomfortable to hon. Members opposite is the proposed change in relation to tax relief on borrowing. I must say to my hon. Friend the Member for Heywood and Royton that this is not a minor measure concerned with tax avoidance. It is true that when we launched the proposal we were aware of difficulties which would exist in the form in which it was implemented. We shall no doubt hear more of this in Committee, and these matters will be carefully considered. But there is no doubt that viewed in the overall Budget strategy the tax change in relation to borrowing has considerable advantages compared with other measures of restraining consumer spending.
First, it is clearly a sensible corollary to a savings scheme. If there is tax relief on saving it is logical that there should not be tax relief on borrowing for the purpose of spending.
Second, it is reasonable to expect a considerable effect from the disallowance of the tax on consumer spending. One has only to have regard to the total amount of personal loans—[Interruption.]
Mr. Speaker: Order. It is not fair to any speaker that a considerable portion of the House should engage in conversation.
Mr. Taverne: Hon. Members opposite are reluctant to hear about any suggestions which may hit certain sections of the community with which they are more closely connected, and about any tax measure which does not put the whole burden of consumer restraint on the least well-off sections of the community. The first thing hon. Members opposite must realise is the total amount of personal loans affected by the measure. This is likely to be between £700 million and £800 million. The figures of bank advances to the personal sectors, excluding loans for house purchase or professional purposes, total about £600 million. Deducting a part of this for what may be business loans, but adding the considerable figures of loans for credit sales and loans against life policies, one arrives at a total amount of loans and personal overdrafts outstanding which is in the region of £700 to £800 million.
No one expects that all these loans will be liquidated but a considerable fraction will be. In many cases, it will not pay to carry on the overdraft or continue with the personal loan. Some of the liquidation will be by selling investments, and the demand effect of this will be neutral. But it is reasonable to expect a considerable reduction in borrowing to finance consumer expenditure out of the £700 million to £800 million or so affected by the measure.
So here we have a measure which has a considerable effect on consumer demand and which is not regressive but progressive in its effect. By the two criteria by which a Finance Bill must be judged—whether the restraint on demand has a minimum impact on the cost of living, which in this case applies not at all, or whether this is a progressive or regressive way of dealing with the reduction of demand—the selective employment tax and the abolition of tax relief on overdrafts are tested and found sustainable. But it is precisely these measures, which are most eminently suitable for achieving the strategy of the Budget, with their progressive rather than

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regressive effect, to which the Opposition object.
Mr. Iain Macleod: The hon. and learned Gentleman must know from his postbag, as I know from mine, that there are a host of questions on the disallowance to which people are anxious to have answers. He has been asked whether he will consider producing a White Paper. Will he deal with that now?
Mr. Taverne: These provisions will be considered fully in Committee. They will be debated there and possibly later on Report. All the points which hon. Members raised then will be fully gone into.
Question put:—
The House divided: Ayes 298, Noes 249.

Division No. 195.]

AYES

[10.2 p.m.

Albu, Austen

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

Jenkins, Rt. Hn. Roy (Stechford)

Allaun, Frank (Salford, E.)

Eadie, Alex

Johnson, Carol (Lewisham, S.)

Alldritt, Walter

Edelman, Maurice

Jones, Dan (Burnley)

Anderson, Donald

Edwards, Robert (Bilston)

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

Archer, Peter

Edwards, William (Merioneth)

Jones, J. Idwal (Wrexham)

Ashley, Jack

Ellis, John

Jones, T. Alec (Rhondda, West)

Ashton, Joe (Bassetlaw)

English, Michael

Judd, Frank

Atkins, Ronald (Preston, N.)

Ennals, David

Kelley, Richard

Atkinson, Norman (Tottenham)

Ensor, David

Kenyon, Clifford

Bacon, Rt. Hn. Alice

Evans, Albert (Islington, S. W.)

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

Bagier, Gordon A. T.

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

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

Barnes, Michael

Faulds, Andrew

Kerr, Russell (Feltham)

Barnett, Joel

Fernyhough, E.

Lawson, George

Baxter, William

Finch, Harold

Leadbitter, Ted

Beaney, Alan

Fitch, Alan (Wigan)

Lee, Rt. Hn. Frederick (Newton)

Bence, Cyril

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

Lee, Rt. Hn. Jennie (Cannock)

Benn, Rt. Hn. Anthony Wedgwood

Fletcher, Raymond (Ilkeston)

Lee, John (Reading)

Bidwell, Sydney

Fletcher, Ted (Darlington)

Lestor, Miss Joan

Binns, John

Foley, Maurice

Lever, Harold (Cheetham)

Bishop, E. S.

Foot, Michael (Ebbw Vale)

Lever, L. M. (Ardwick)

Blackburn, F.

Ford, Ben

Lewis, Arthur (W. Ham, N.)

Blenkinsop, Arthur

Forrester, John

Lewis, Ron (Carlisle)

Boardman, H. (Leigh)

Fowler, Gerry

Lipton, Marcus

Booth, Albert

Fraser, John (Norwood)

Lomas, Kenneth

Boston, Terence

Freeson, Reginald

Loughlin, Charles

Bottomley, Rt. Hn. Arthur

Galpern, Sir Myer

Luard, Evan

Boyden, James

Gardner, Tony

Lyon, Alexander W. (York)

Bradley, Tom

Ginsburg, David

Lyons, Edward (Bradford, E.)

Bray, Dr. Jeremy

Gordon Walker, Rt. Hn. P. C.

Mahon, Dr. J. Dickson

Brooks, Edwin

Gray, Dr. Hugh (Yarmouth)

McCann, John

Broughton, Dr. A. D. D.

Greenwood, Rt. Hn. Anthony

MacColl, James

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

Gregory, Arnold

MacDermot, Niall

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

Grey, Charles (Durham)

Macdonald, A. H.

Buchan, Norman

Griffiths, David (Rother Valley)

McGuire, Michael

Butler, Herbert (Hackney, C.)

Griffiths, Eddie (Brightside)

McKay, Mrs. Margaret

Butler, Mrs. Joyce (Wood Green)

Griffiths, Will (Exchange)

Mackenzie, Gregor (Rutherglen)

Callaghan, Rt. Hn. James

Gunter, Rt. Hn. R. J.

Mackie, John

Carmichael, Neil

Hamilton, James (Bothwell)

Mackintosh, John P.

Carter-Jones, Lewis

Hamilton, William (Fife, W.)

Maclennan, Robert

Coe, Denis

Hamling, William

MacMillan, Malcolm (Western Isles)

Coleman, Donald

Harper, Joseph

MacPherson, Malcolm

Conlan, Bernard

Hart, Rt. Hn. Judith

Mahon, Peter (Preston, S.)

Corbet, Mrs. Freda

Haseldine, Norman

Mahon, Simon (Bootle)

Craddock, George (Bradford, S.)

Hazell, Bert

Mallalieu, E. L. (Brigg)

Crawshaw, Richard

Healey, Rt. Hn. Denis

Mallaliue, J. P. W. (Huddusfield, E.)

Crosland, Rt. Hn. Anthony

Heffer, Eric S.

Manuel, Archie

Crossman, Rt. Hn. Richard

Henig, Stanley

Mapp, Charles

Darling, Rt. Hn. George

Herbison, Rt. Hn. Margaret

Marks, Kenneth

Davidson, Arthur (Accrington)

Hilton, W. S.

Marquand, David

Davies, Ednyfed Hudson (Conway)

Hobden, Dennis

Marsh, Rt. Hn. Richard

Davies, G. Elfed (Rhondda, E.)

Hooley, Frank

Mason, Rt. Hn. Roy

Davies, Dr. Ernest (Stretford)

Horner, John

Mayhew, Christopher

Davies, Rt. Hn. Harold (Leek)

Houghton, Rt. Hn. Douglas

Mellish, Rt. Hn. Robert

Davies, Ifor (Gower)

Howell, Denis (Small Heath)

Mendelson, John

Davies, S. O. (Merthyr)

Howie, W.

Mikardo, Ian

Delargy, Hugh

Hoy, James

Millan, Bruce

Dell, Edmund

Huckfield, Leslie

Miller, Dr. M. S.

Dempsey, James

Hughes, Rt. Hn. Cledwyn (Anglesey)

Milne, Edward (Blyth)

Diamond, Rt. Hn. John

Hughes, Hector (Aberdeen, N.)

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

Dickens, James

Hughes, Roy (Newport)

Molloy, William

Dobson, Ray

Hunter, Adam

Morgan, Elystan (Cardiganshire)

Doig, Peter

Hynd, John

Morris, Alfred (Wythenshawe)

Driberg, Tom

Irvine, Sir Arthur (Edge Hill)

Morris, Charles R. (Openshaw)

Dunn, James A.

Jay, Rt. Hn. Douglas

Morris, John (Aberavon)

Dunnett, Jack

Jeger, George (Goole)

Moyle, Roland

Dunwoody, Mrs. Cwyneth (Exeter)

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

Mulley, Rt. Hn. Frederick

Murray, Albert

Reynolds, Rt. Hn. G. W.

Thornton, Ernest

Neal, Harold

Richard, Ivor

Tinn, James

Newens, Stan

Roberts, Albert (Normanton)

Tomney, Frank

Norwood, Christopher

Roberts, Rt. Hn. Goronwy

Tuck, Raphael

Oakes, Gordon

Roberts, Gwilym (Bedfordshire, S.)

Urwin, T. W.

Ogden, Eric

Robertson, John (Paisley)

Varley, Eric G.

O'Malley, Brian

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

Wainwright, Edwin (Dearne Valley)

Oram, Albert E.

Rodgers, William (Stockton)

Walden, Brian (All Saints)

Orbach, Maurice

Roebuck, Roy

Walker, Harold (Doncaster)

Orme, Stanley

Rogers, George (Kensington, N.)

Wallace, George

Oswald, Thomas

Rose, Paul

Watkins, David (Consett)

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

Ross, Rt. Hn. William

Watkins, Tudor (Brecon & Radnor)

Owen, Will (Morpeth)

Rowlands, E,

Weitzman, David

Page, Derek (King's Lynn)

Ryan, John

Wellbeloved, James

Paget, R. T.

Shaw, Arnold (Ilford, S.)

Wells, William (Walsall, N.)

Palmer, Arthur

Sheldon, Robert

Whitaker, Ben

Pannell, Rt. Hn. Charles

Shinwell, Rt. Hn. E.

White, Mrs. Eirene

Park, Trevor

Shore, Rt. Hn. Peter (Stepney)

Whitlock, William

Parker, John (Dagenham)

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

Wilkins, W. A.

Parkin, Ben (Paddington, N.)

Short, Mrs. Renée (W'hampton, N. E.)

Willey, Rt, Hn. Frederick

Parkyn, Brian (Bedford)

Silkin, Rt. Hn. John (Deptford)

Williams, Alan (Swansea, W.)

Pavitt, Laurence

Silkin, Hn. S. C. (Dulwich)

Williams, Alan Leo (Hornchurch)

Pearson, Arthur (Pontypridd)

Silverman, Julius

Williams, Clifford (Abertillery)

Peart, Rt. Hn. Fred

Slater, Joseph

Williams, Mrs. Shirley (Hitchin)

Pentland, Norman

Small, William

Williams, W. T. (Warrington)

Perry, Ernest G. (Battersea, S.)

Spriggs, Leslie

Willis, Rt. Hn. George

Perry, George H. (Nottingham, S.)

Steele, Thomas (Dunbartonshire, W.)

Wilson, William (Coventry, S.)

Prentice, Rt. Hn. R. E.

Stewart, Rt. Hn. Michael

Winnick, David

Price, Christopher (Perry Barr)

Stonehouse, Rt. Hn. John

Woof, Robert

Price, Thomas (Westhoughton)

Strauss, Rt. Hn. G. R.

Wyatt, Woodrow

Price, William (Rugby)

Summerskill, Hn. Dr. Shirley

Probert, Arthur

Symonds, J. B.

TELLERS FOR THE AYES:

Pursey, Cmdr. Harry

Taverne, Dick

Mr. Neil McBride and

Rankin, John

Thomas, Rt. Hn. George

Mr. Walter Harrison.

Rees, Merlyn

NOES

Alison, Michael (Barkston Ash)

Crowder, F. P.

Harris, Frederic (Croydon, N. W.)

Allason, James (Hemel Hempstead)

Cunningham, Sir Knox

Harris, Reader (Heston)

Amery, Rt. Hn. Julian

Currie, G. B. H.

Harrison, Col. Sir Harwood (Eye)

Astor, John

Dalkeith, Earl of

Harvey, Sir Arthur Vere

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

Dance, Jamos

Harvie Anderson, Miss

Awdry, Daniel

Davidson, James (Aberdeenshire, W.)

Hastings, Stephen

Baker, Kenneth (Acton)

d-Avigdor-Goldsmid, Sir Henry

Hawkins, Paul

Baker, W. H. K. (Banff)

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

Hay, John

Balniel, Lord

Digby, Simon Wingfield

Heald, Rt. Hon. Sir Lionel

Barber, Rt. Hn. Anthony

Dodds-Parker, Douglas

Heath, Rt. Hn. Edward

Batsford, Brian

Donnelly, Desmond

Heseltine, Michael

Beamish, Col. Sir Tufton

Doughty, Charles

Higgins, Terence L.

Bell, Ronald

Douglas-Home, Rt. Hn. Sir Alec

Hiley, Joseph

Bennett, Sir Frederic (Torquay)

Drayson, G. B.

Hill, J. E. B.

Bennett, Dr. Reginald (Gos. & Fhm)

du Cann, Rt. Hn. Edward

Hirst, Geoffrey

Berry, Hn. Anthony

Eden, Sir John

Hogg, Rt. Hn. Quintin

Bessell, Peter

Elliot, Capt. Walter (Carshalton)

Holland, Philip

Biggs-Davison, John

Emery, Peter

Hordern, Peter

Birch, Rt. Hn. Nigel

Errington, Sir Eric

Hornby, Richard

Black, Sir Cyril

Evans, Gwynfor (C'marthen)

Howell, David (Guildford)

Blaker, Peter

Eyre, Reginald

Hunt, John

Body, Richard

Farr, John

Hutchison, Michael Clark

Boyd-Carpenter, Rt. Hn. John

Fisher, Nigel

Iremonger, T. L.

Boyle, Rt. Hn. Sir Edward

Foster, Sir John

Irvine, Bryant Godman (Rye)

Braine, Bernard

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

Jenkin, Patrick (Woodford)

Brewis, John

Galbraith, Hn. T. G.

Jennings, J. C. (Burton)

Brinton, Sir Tatton

Gilmour, Ian (Norfolk, C)

Johnson Smith, G. (E. Grinstead)

Bromley-Davenport, Lt.-Col. Sir Walter

Gilmour, Sir John (Fife, E.)

Johnston, Russell (Inverness)

Brown, Sir Edward (Bath)

Glover, Sir Douglas

Jones, Arthur (Northants, S.)

Bruce-Gardyne, J.

Glyn, Sir Richard

Jopling, Michael

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

Godber, Rt. Hn. J. B.

Joseph, Rt. Hn. Sir Keith

Buck, Antony (Colchester)

Goodhart, Philip

Kaberry, Sir Donald

Bullus, Sir Eric

Goodhew, Victor

Kerby, Capt. Henry

Burden, F. A.

Gower, Raymond

Kershaw, Anthony

Campbell, B. (Oldham, W.)

Grant, Anthony

Kimball, Marcus

Campbell, Gordon (Moray & Nairn)

Grant-Ferris, R.

King, Evelyn (Dorset, S.)

Carlisle, Mark

Gresham Cooke, R.

Kirk, Peter

Channon, H. P. G.

Grieve, Percy

Kitson, Timothy

Chichester-Clark, R.

Griffiths, Eldon (Bury St. Edmunds)

Knight, Mrs. Jill

Clark, Henry

Grimond, Rt. Hn, J.

Lambton, Viscount

Clegg, Walter

Gurden, Harold

Lancaster, Col. C. G.

Cooper-Key, Sir Neill

Hall, John (Wycombe)

Lane, David

Costain, A. P.

Hall-Davis, A. G. F.

Langford-Holt, Sir John

Craddock, Sir Beresford (Spelthorne)

Hamilton, Lord (Fermanagh)

Legge-Bourke, Sir Harry

Crouch, David

Hamilton, Michael (Salisbury)

Lewis, Kenneth (Rutland)

402

403

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

Osborn, John (Hallam)

Steel, David (Roxburgh)

Longden, Gilbert

Osborne, Sir Cyril (Louth)

Stodart, Anthony

Lubbock, Eric

Page, Graham (Crosby)

Stoddart-Scott, Col. Sir M.

MacArthur, Ian

Page, John (Harrow, W.)

Summers, Sir Spencer

Mackenzie, Alasdair (Ross & Crom'ty)

Pardoe, John

Tapsell, Peter

Maclean, Sir Fitzroy

Pearson, Sir Frank (Clitheroe)

Taylor, Sir Charles (Eastbourne)

Macleod, Rt. Hn. Iain

Peel, John

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

McMaster, Stanley

Percival, Ian

Temple, John M.

Macmillan, Maurice (Farnham)

Peyton, John

Thatcher, Mrs. Margaret

McNair-Wilson, Michael

Pike, Miss Mervyn

Thorpe, Rt. Hn. Jeremy

Pink, R. Bonner

Tilney, John

McNair-Wilson, Patrick (New Forest)

Pounder, Rafton

Turton, Rt. Hn. R. H.

Maddan, Martin

Powell, Rt, Hn. J. Enoch

van Straubenzee, W. R.

Maginnis, John E.

Price, David (Eastleigh)

Vaughan-Morgan, Rt, Hn. Sir John

Marples, Rt. Hn. Ernest

Prior, J. M. L.

Vickers, Dame Joan

Marten, Neil

Pym, Francis

Waddington, David

Maude, Angus

Quennell, Miss J. M.

Wainwright, Richard (Colne Valley)

Maudling, Rt. Hn. Reginald

Ramsden, Rt. Hn. James

Walker, Peter (Worcester)

Mawby, Ray

Rawlinson, Rt. Hn. Sir Peter

Maxwell-Hyslop, R. J.

Rees-Davies, W. R.

Walker-Smith, Rt. Hn. Sir Derek

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

Renton, Rt. Hn. Sir David

Wall, Patrick

Mills, Peter (Torrington)

Rhys Williams, Sir Brandon

Walters, Dennis

Mills, Stratton (Belfast, N.)

Ridley, Hn. Nicholas

Ward, Dame Irene

Miscampbell, Norman

Ridsdale, Julian

Weatherill, Bernard

Mitchell, David (Basingstoke)

Rippon, Rt. Hn. Geoffrey

Wells, John (Maidstone)

Monro, Hector

Robson Brown, Sir William

Wiggin, A. W.

Morgan, Geraint (Denbigh)

Rodgers, Sir John (Sevenoaks)

Williams, Donald (Dudley)

Morgan-Giles, Rear-Adm.

Rossi, Hugh (Hornsey)

Wilson, Geoffrey (Truro)

Morrison, Charles (Devizes)

Royle, Anthony

Winstanley, Dr. M. P.

Mott-Radclyffe. Sir Charles

Russell, Sir Ronald

Wolrige-Gordon, Patrick

Munro-Lucas-Tooth, Sir Hugh

St. John-Stevas, Norman

Wood, Rt. Hn. Richard

Murton, Oscar

Sandys, Rt. Hn. D.

Woodnutt, Mark

Nabarro, Sir Gerald

Scott, Nicholas

Worsley, Marcus

Neave, Airey

Scott-Hopkins, James

Wright, Esmond

Nicholls, Sir Harmar

Sharples, Richard

Wylie, N. R.

Noble, Rt. Hn. Michael

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

Younger, Hn. George

Nott, John

Silvester, Frederick

Onslow, Cranley

Sinclair, Sir George

TELLERS FOR THE NOES:

Orr, Capt. L. P. S.

Smith, John (London & W'minster)

Mr. R. W. Elliott and

Orr-Ewing, Sir Ian

Stainton, Keith

Mr. Jasper More.

Bill accordingly read a Second time.

FINANCE BILL
Motion made, and Question proposed,
That the following provisions of the Bill, namely, Clauses 7, 8, 36, 38, 43 and 44 and Schedule 6, be committed to a Committee of the whole House; that the remainder of the Bill be committed to a Standing Committee; and that, when the provisions of the Bill considered respectively by the Committee of the whole House and by the Standing Committee have been reported to the House, the Bill be proceeded with as if the Bill had been reported as a whole to the House from the Standing Committee.—[Mr. Diamond.]
10.15 p.m.
Mr. Peter Kirk: On a point of order. I raised with you this afternoon, Mr. Speaker, the question whether it will be in order to proceed with the Motion. In view of the fact that the Motion is incomprehensible to hon. Members unless they have copies of the Bill in front of them, I have inquired at the Vote Office whether copies of the Bill are available. There is one copy in the Library, but it is impossible to bring it into the House. We cannot possibly follow the intricacies of the Motion unless we have copies of the Bill in front of us. I therefore ask you, Mr. Speaker, whether it is possible to proceed with the Motion tonight?
Mr. Speaker: Order. I invited the hon. Gentleman to raise this point at this moment. The fact is that this is a procedural Motion. It cannot be amended. It can be voted on for or against. There can be only a brief speech in support of it and a brief speech against. It should have been possible by now for any hon. Member who wished to decide whether he would vote for or against to see from a copy of the Bill what Clauses were involved.
Mr. John Hay: On a point of order—
Mr. Speaker: Order. We have had a good run of points of order about the non-appearance of the Bill.
Mr. Hay: If I understood what you have said, Mr. Speaker, it is that we are not in order in debating this Motion, except for a brief speech in support of the Motion and a brief speech against, if any hon. Member wishes to speak. I wish to ask a question relating to new
406
Clauses. Am I to take it from your Ruling that we are not allowed to speak to this Motion.
Mr. Speaker: I abide by Standing Order No. 40(3)
"If such a Motion is opposed, Mr. Speaker after permitting, if he thinks fit"—
and he does think fit—
"a brief explanatory statement from the Member who makes and from a Member who opposes the Motion shall, without permitting any further debate, put the question thereon."
I am afraid that the hon. Gentleman cannot ask questions.
Sir Gerald Nabarro: On a point of order—[Interruption.]
Mr. Speaker: Order. Noise must not prevent an hon. Gentleman putting a point of order. Sir Gerald Nabarro.
Sir G. Nabarro: You will recall, Mr. Speaker, that this is the first time a Motion has been allowed before this House for part of the Finance Bill only to be sent upstairs and the remainder to be taken on the Floor of the House. Last year the whole of the Finance Bill was sent upstairs to a Committee, not a part of it. This evening the procedural Motion involves certain Clauses being taken on the Floor of the House—
Mr. Speaker: The hon. Gentleman cannot, by anticipation, debate that procedural Motion. He must come to his point of order.
Sir G. Nabarro: I hope to be brief. I wish to put to you that there are certain Clauses, and in my own case only two Clauses, which I felt—
Mr. Speaker: Order. I am sorry but the hon. Gentleman cannot put that to the Chair.
Mr. John Pardoe rose—
Sir G. Nabarro rose—
Mr. Speaker: Order. I have ruled on the hon. Gentleman's submission.
Sir G. Nabarro rose—
Mr. Speaker: Order.
Sir G. Nabarro: I have not put it yet.
Mr. Speaker: The hon. Gentleman might wish that certain Clauses in the Motion were not in, or that certain Clauses which are not in the Motion were in. He cannot debate that either as a point of order or in any other way at this stage.
Sir G. Nabarro: I wanted to complete my point of order. I merely wished to ask you, Mr. Speaker, how it is possible in these circumstances for a back-bench Member of this House to move that certain Clauses which the Government wish taken upstairs should be taken downstairs. I am asking for your Ruling, for the protection of private Members, who are a minority. I do not wish to submit to the dictatorial methods of the Chancellor of the Exchequer.
Mr. Speaker: Order. I have already answered the hon. Member's point of order. He has no way of varying the procedural Motion. If he does not like it he can vote against it. Mr. Pardoe, to raise a point of order.
Mr. Pardoe: It is not a point of order. I wish to make a short speech against the Motion. Am I in order?
Mr. Speaker: Order. The hon. Member is a little too eager. I have not yet put the Question.
Mr. John Peyton: On a point of order, Mr. Speaker. May I ask for guidance about the future? We are being asked to vote on a procedural Motion which names certain Clauses of a Bill which is not currently before us. This puts the House in a very difficult position indeed. I think that you, Mr. Speaker, are aware of a tendency today for the Executive to humiliate the House of Commons—[Interruption.]
Mr. Speaker: Order. I do not want to hear noise from supporters of the Executive.
Mr. Peyton: In these circumstances, while acknowledging the undoubted difficulty of your position, we find ourselves unable to look anywhere for support and for protection, save to you, Mr. Speaker.
Mr. Speaker: Order. I have already ruled, in answer to a similar point of order from the hon. Member for Worcestershire, South (Sir G. Nabarro), on the point that the hon. Member has raised.
408
If he wants to change the procedure, he can do so only by changing Standing Order No. 40, and he cannot change it tonight.
Mr. Geoffrey Hirst: Further to that point of order. I think that every hon. Member recognises your difficult position, Mr. Speaker. We all respect the fact that we, as back benchers, cannot change a procedural Motion under the Standing Orders of the House. We feel very strongly about this and we are asking for the protection of the Chair in this unusual situation. We cannot change a procedural Motion, but you, Mr. Speaker, have an authority, which is quite separate, to protect back benchers. We are asked to pass a procedural Motion on facts and figures and details, many of which are not complete, Schedules which touch only some of the Clauses, and Clauses which do not touch the Schedules. It is not right and it is not fair to the electorate.
Mr. Speaker: Order. This is not a new procedure. The House may from time to time decide about a Bill that some of its Clauses should be taken upstairs and some on the Floor of the House. When such a Motion is made by the right hon. or hon. Member in charge of a Bill, one brief speech may be made in favour of it and one against, and the House must then decide.
10.24 p.m.
The Chief Secretary to the Treasury (Mr. John Diamond): It is hoped that it will suit the convenience of the House to draw this reasonable compromise or dividing line between having the whole of the Committee stage downstairs, in which case a great deal of the time of this Chamber would be taken up with a mass of detailed and technical points, which many right hon. and hon. Members think would be excessive, and the alternative of sending it all upstairs, in which case many right hon. and hon. Members would be denied the opportunity of making contributions on matters which they regard as important. It is, therefore, proposed that on the Clauses mentioned the Bill should be remitted to a Committee of this Chamber. These are Clauses 7 and 8, in respect of income tax and surtax, Clauses 36 and 38, dealing with betterment levy, Clauses 43 and 44 dealing with selective employment tax and selective employment payments, and Schedule

409
6 dealing with the extension of purchase tax.
I would hope that the Motion would find support all over the House. Those who vote against it will be voting for sending the whole Bill upstairs.
Mr. Pardoe rose—
Mr. John Smith rose—
Mr. Speaker: Order. The hon. Member for Cornwall, North (Mr. Pardoe) must restrain his eagerness.
10.26 p.m.
Mr. John Smith: I oppose the Motion. The Chief Secretary spoke of the convenience of the House, but there are more important things than the convenience of the House. This is the most important Bill of the year, and it affects all the constituents of every hon. Member. On Finance Bills of all Bills, backbenchers often wish to speak, and even vote, differently from their Front Bench spokesmen.
Hon. Members: Oh.
Mr. Speaker: Order. Elementary truisms ought not to cause such a shock.
Mr. Smith: I shall become much more subtle and sophisticated in a moment, Mr. Speaker.
Until the year before last about 175 Members took part in the Committee stage of the Finance Bill, and in the nature of things they were mainly from the Opposition, of whatever party. Suppose about 125 of the Members who took part have been Opposition Members; then if one removes from that number some Opposition Whips, some Opposition Front Bench spokesmen and some Opposition crypto-Front Bench spokesmen, one is reduced to a number of perhaps 120 bona fide card-carrying Conservatives who have habitually taken part in the Committee stage of Finance Bills.
But this year we are to have, I understand, a Committee of 30, of which perhaps 12 will be Opposition Members. They will consist of a Whip, three Front Bench spokesmen and four crypto-Front Bench spokesmen in the shape of the officers of our party finance committee, and we shall be left with not 120 Opposition back benchers but four.
410
What are the reasons advanced for this?
Mr. Speaker: Order. The speech must be a brief one.
Mr. Smith: The first reason was that it would save time. But throughout the Report and the evidence submitted to the Select Committee on Procedure it was stated that splitting the Bill would not save time, and I leave that argument.
The next argument was that specialist Clauses can best be dealt with by specialists upstairs. No division of the Bill could leave simply specialist stuff to go upstairs. A cursory examination of the Bill by those who are lucky enough, like yourself, Mr. Speaker, to have obtained one, will show that many of the Clauses going upstairs are of wide interest, and that some of them are party political matters.
But even if it is only specialist stuff that goes upstairs, as the Chief Secretary to the Treasury submitted in his memorandum to the Select Committee on Procedure in January, 1967:
"Even the most technical 'administrative' provisions can make a substantial difference to the tax liability of individuals."
Moreover, some of the specialist stuff none of us fully understands, whether it is taken upstairs or downstairs. No matter where it is discussed, we shall have the spectacle of two Front Bench spokesmen speaking from briefs while the people who understand it are separated at opposite ends of the Chamber biting their nails with anxiety.
Mr. A. Woodburn: On a point of order—
Mr. Marcus Lipton: Leave him alone.
Mr. Woodburn: So far as I can understand—[Interruption.]
Mr. Speaker: Order. I thought we all believed in the preciousness of Parliament. Noise does not help.
Mr. Woodburn: I gather that the hon. Member is not speaking against sending the Bill upstairs, but is asking that the whole of the Bill should be sent upstairs. The Chief Secretary said that to oppose the Motion meant wishing the whole Bill to go upstairs. May I seek

411
your guidance, Mr. Speaker? Is the effect of voting against the Motion to send the whole Bill upstairs?
Mr. Speaker: That is not a point of order. It is not the duty of Mr. Speaker to guide hon. Members as to what a Motion means. It is their job to find out. Mr. Smith, briefly. I must remind the hon. Member that I have already once asked him to be brief. He must come to a conclusion soon.
Mr. Smith: I will be brief, but most of my speech so far has been made by the House as a form of Soviet and not by me singly.
I was saying that if specialists are to be found, surely they are more likely to be found if they are drawn from a wide circle rather than if they are drawn from a narrow circle.
Now this is my final point. The real reason for splitting the Bill in this way is to suit us, to suit our convenience. The then Leader of the House said on 6th December 1967:
"backbenchers also constantly complain that they want more time for the kind of debates which interest them …".
What about our constituents? Taxation interests them.
The right hon. Gentleman also said—
Mr. Speaker: Order. We cannot have any more quotations. The hon. Member must come to the end of his speech.
Mr. Smith: This is my final point. The right hon. Gentleman also said that
"the good of the other back benchers—the vast majority, after all—who do not attend, can also be achieved by relieving them of the tedium of the Committee stage on the Floor of the House."—[OFFICIAL REPORT, 6th December, 1967; Vol. 755, c. 1450.]
Some back benchers may like to be relieved of the tedium, but the taxpayers, our constituents, also find it tedious to be relieved of their money. I think they like to feel that we take the matter seriously.
Splitting the Bill gives us the worst of all worlds. It turns the parts taken down here into generalised debates. Upstairs it cuts up the natural divisions of taxation, which is into families of taxes it picks the eyes out of each part of the Bill. There is no Re-committal stage, and therefore the Report stage is simply a ritual—a series of Press statements made by back benchers. [Interruption.]
Mr. Speaker: Order. When Mr. Speaker has asked an hon. Member to be brief, it is not in order for hon. Members to encourage an hon. Member to disobey Mr. Speaker. Mr. John Smith.
Sir Knox Cunningham: On a point of order, Mr. Speaker. Would you tell the House what authority you have to silence an hon. Member in respect of the length of his speech when he is on his feet?
Mr. Speaker: Order. Under Standing Order No. 40(3), which says:
"… Mr. Speaker after permitting, if he thinks fit, a brief explanatory statement from the Member who makes and from a Member who opposes the motion shall, without permitting any further debate, put the question thereon."
Mr. Smith: Splitting the Bill does not save time. It does not improve consideration of the Bill. It simply muzzles discussion, in order, at best, to save from tedium, and to pander to, those irresponsible Members of the House who think that all gold is fairy gold and that spending money is a full-time job.
Question put:—
The House divided: Ayes 261, Noes 17.

Division No. 196.]

AYES

[10.40 p.m.

Albu, Austen

Beaney, Alan

Bray, Dr. Jeremy

Allaun, Frank (Salford, E.)

Bence, Cyril

Brooks, Edwin

Alldritt, Walter

Benn, Rt. Hn. Anthony Wedgwood

Broughton, Dr. A. D. D.

Anderson, Donald

Bidwell, Sydney

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

Archer, Peter

Binns, John

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

Ashley, Jack

Bishop, E. S.

Buchan, Norman

Ashton, Joe (Bassetlaw)

Blackburn, F.

Butler, Mrs. Joyce (Wood Green)

Atkins, Ronald (Preston, N.)

Blenkinsop, Arthur

Callaghan, Rt. Hn. James

Atkinson, Norman (Tottenham)

Boardman, H. (Leigh)

Carmichael, Neil

Bagier, Gordon A. T.

Booth, Albert

Carter-Jones, Lewis

Barnes, Michael

Bottomley, Rt. Hn. Arthur

Coe, Denis

Barnett, Joel

Boyden, James

Coleman, Donald

Baxter, William

Bradley, Tom

Conlan, Bernard

Corbet, Mrs. Freda

Irvine, Sir Arthur (Edge Hill)

Pannell, Rt. Hn. Charles

Craddock, George (Bradford, S.)

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

Park, Trevor

Crawshaw, Richard

Jenkin, Patrick (Woodford)

Parker, John (Dagenham)

Crosland, Rt. Hn. Anthony

Jenkins, Rt. Hn. Roy (Stechford)

Parkyn, Brian (Bedford)

Davidson, Arthur (Accrington)

Jones, Dan (Burnley)

Pavitt, Laurence

Davies, Edynfed Hudson (Conway)

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

Pearson, Arthur (Pontypridd)

Davies, G. Elfed (Rhondda, E.)

Jones, J. Idwal (Wrexham)

Peart, Rt. Hn. Fred

Davies, Dr. Ernest (Stretford)

Jones, T. Alec (Rhondda, West)

Pentland, Norman

Davies, Rt. Hn. Harold (Leek)

Judd, Frank

Perry, Ernest G. (Battersea, S.)

Davies, Ifor (Gower)

Kenyon, Clifford

Perry, George H. (Nottingham, S.)

Davies, S. O. (Merthyr)

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

Prentice, Rt. Hn. R. E.

Delargy, Hugh

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

Price, Christopher (Perry Barr)

Dell, Edmund

Kerr, Russell (Feltham)

price, Thomas (Westhoughton)

Diamond, Rt. Hn. John

Lawson, George

Probert, Arthur

Dickens, James

Leadbitter, Ted

Rees, Merlyn

Dobson, Ray

Lee, Rt. Hn. Frederick (Newton)

Richard, Ivor

Doig, Peter

Lee, John (Reading)

Roberts, Albert (Normanton)

Driberg, Tom

Lestor, Miss Joan

Roberts, Rt. Hn. Goronwy

Dunn, James A.

Lever, Harold (Cheetham)

Roberts, Gwilym (Bedfordshire, S.)

Dunnett, Jack

Lever, L. M. (Ardwlck)

Robertson, John (Paisley)

Dunwoody, Mrs. Gwyneth (Exeter)

Lewis, Arthur (W. Ham, N.)

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

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

Lewis, Ron (Carlisle)

Rodgers, William (Stockton)

Eadie, Alex

Lipton, Marcus

Roebuck, Roy

Edelman, Maurice

Lomas, Kenneth

Rose, Paul

Edwards, William (Merioneth)

Loughlin, Charles

Ross, Rt. Hn. William

Ellis, John

Luard, Evan

Rowlands, E.

Ennals, David

Lyon, Alexander W. (York)

Shaw, Arnold (Ilford, S.)

Ensor, David

Lyons, Edward (Bradford, E.)

Sheldon, Robert

Faulds, Andrew

Shore, Rt. Hn. Peter (Stepney)

Fernyhough, E.

Mabon, Dr. J. Dickson

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

Finch, Harold

McBride, Neil

Short, Mrs. Renée (W'hampton, N. E.)

Fitch, Alan (Wigan)

McCann, John

Silkin, Hn. S. C. (Dulwich)

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

MacDermot, Niall

Silverman, Julius

Fletcher, Raymond (Ilkeston)

Macdonald, A. H.

Slater, Joseph

Fletcher, Ted (Darlington)

McGuire, Michael

Small, William

Foot, Michael (Ebbw Vale)

McKay, Mrs. Margaret

Spriggs, Leslie

Ford, Ben

Mackenzie, Gregor (Rutherglen)

Stewart, Rt. Hn. Michael

Forrester, John

Mackie, John

Stonehouse, Rt. Hn. John

Fowler, Gerry

Mackintosh, John P.

Strauss, Rt. Hn. G. R.

Fraser, John (Norwood)

Maclennan, Robert

Summerskill, Hn. Dr. Shirley

Freeson, Reginald

Macleod, Rt. Hn. Iain

Symonds, J. B.

Galpern, Sir Myer

Mahon, Peter (Preston, S.)

Taverne, Dick

Gardner, Tony

Mahon, Simon (Bootle)

Thomas, Rt. Hn. George

Garrett, W. E.

Mallalieu, E. L. (Brigg)

Thornton, Ernest

Gordon Walker, Rt. Hn. P. C.

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

Tinn, James

Gray, Dr. Hugh (Yarmouth)

Manuel, Archie

Urwin, T. W.

Gregory, Arnold

Mapp, Charles

Varley, Eric G.

Grey, Charles (Durham)

Marks, Kenneth

Wainwright, Edwin (Dearne Valley)

Griffiths, Eddie (Brightside)

Marquand, David

Walden, Brian (All Saints)

Griffiths, Will (Exchange)

Mason, Rt. Hn. Roy

Walker, Harold (Doncaster)

Gunter, Rt. Hn. R. J.

Mellish, Rt. Hn. Robert

Wallace, George

Hamilton, James (Bothwell)

Mendelson, John

Watkins, David (Consett)

Hamilton, William (Fife, W.)

Mikardo, Ian

Watkins, Tudor (Brecon & Radnor)

Harper, Joseph

Millan, Bruce

Weitzman, David

Harrison, Walter (Wakefield)

Miller, Dr. M. S.

Wellbeloved, James

Haseldine, Norman

Milne, Edward (Blyth)

Wells, William (Walsall, N.)

Hattersley, Roy

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

Whitaker, Ben

Hazell, Bert

Molloy, William

White, Mrs. Eirene

Healey, Rt. Hn. Denis

Morgan, Elystan (Cardiganshire)

Whitlock, William

Heffer, Eric S.

Morris, Alfred (Wythenshawe)

Willkins, W. A.

Henig, Stanley

Morris, John (Aberavon)

Williams, Alan (Swansea, W.)

Herbison, Rt. Hn. Margaret

Moyle, Roland

Williams, Alan Lee (Hornchurch)

Higgins, Terence L.

Mulley, Rt. Hn. Frederick

Williams, Clifford (Abertillery)

Hobden, Dennis

Murray, Albert

Williams, Mrs. Shirley (Hitchin)

Hooley, Frank

Neal, Harold

Williams, W. T. (Warrington)

Horner, John

Newens, Stan

Willis, Rt. Hn. George

Houghton, Rt. Hn. Douglas

Oakes, Gordon

Wilson, William (Coventry, S.)

Howell, Denis (Small Heath)

Ogden, Eric

Winnick, David

Howie, W.

O'Malley, Brian

Woodburn, Rt. Hn. A.

Hoy, James

Oram, Albert E.

Woof, Robert

Huckfield, Leslie

Orbach, Maurice

Wyatt, Woodrow

Hughes, Rt. Hn. Cledwyn (Anglesey)

Orme, Stanley

Hughes, Hector (Aberdeen, N.)

Oswald, Thomas

TELLERS FOR THE AYES:

Hughes, Roy (Newport)

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

Mr. Charles B. Morris and

Hunter, Adam

Page, Derek (King's Lynn)

Mr. Ioan L. Evans.

Hynd, John

Palmer, Arthur

NOES

Bessell, Peter

Grimond, Rt. Hn. J.

Mackenzie, Alasdair (Ross & Crom'ty)

Bullus, Sir Eric

Hastings, Stephen

Orr, Capt. L. P. S.

Crowder, F. P.

Hirst, Geoffrey

Peyton, John

Davidson, James (Aberdeenshire, W.)

Johnston, Russell (Inverness)

Rees-Davies, W. R.

414

415

Smith, John (London & W'minster)

Wainwright, Richard (Colne Valley)

TELLERS FOR THE NOES

Steel, David (Roxburgh)

Winstanley, Dr. M. P.

Mr. Eric Lubbock and

Thorpe, Rt. Hn. Jeremy

Mr. John Pardoe

Ordered,
That the following provisions of the Bill, namely, Clauses 7, 8, 36, 38, 43 and 44 and Schedule 6, be committed to a Committee of the whole House; that the remainder of the Bill be committed to a Standing Committee; and that, when the provisions of the Bill considered respectively by the Committee of the whole House and by the Standing Committee have been reported to the House, the Bill be proceeded with as if the Bill had been reported as a whole to the House from the Standing Committee.
Committee Tomorrow.

INCOME TAX
10.50 p.m.
The Financial Secretary to the Treasury (Mr. Harold Lever): I beg to move:
That an humble Address be presented to Her Majesty, praying that, on the ratification by Japan of the Convention set out in the Schedule to the Order entitled the Double Taxation Relief (Taxes on Income) (Japan) Order 1969, a draft of which was laid before this House on 15th April, an Order be made in the form of that draft.
We have two double taxation relief Orders to bring before the House, and it may be convenient to discuss them together. These fascinating and interesting double taxation Orders relate to Japan and Norway. I shall be brief in dealing with them because I know that hon. Members have—
Mr. Deputy Speaker (Mr. Harry Gourlay): Order. I presume that it is the wish of the House to discuss the Orders together?
Mr. Patrick Jenkin: That will be agreeable to this side of the House.
Mr. Lever: I know that the House will forgive me for being exceptionally brief because I know that great numbers of hon. Members have an immense and deep passion for such Orders and have studied them closely and a detailed elucidation by me will not be required. The first Order, dealing with Japan, replaces a Convention signed in 1962 by a new Convention which follows the general pattern of recent Conventions. I think the House is familiar with the terms of that pattern.
The new Convention concerned with Norway also follows the pattern of recent
416
Conventions, and again I do not propose to go into a detailed summary of its provisions because the House will have made itself familiar with the considerable details of the Order. I trust that these two Orders will commend themselves to the House.
Question put and agreed to.
Resolved,
That an humble Address be presented to Her Majesty, praying that, on the ratification by Japan of the Convention set out in the Schedule to the Order entitled the Double Taxation Relief (Taxes on Income) (Japan) Order 1969, a draft of which was laid before this House on 15th April, an Order be made in the form of that draft.
To be presented by Privy Councillors or Members of Her Majesty's Household.
Resolved,
That an humble Address be presented to Her Majesty, praying that, on the ratification by the Government of the Kingdom of Norway of the Convention set out in the Schedule to the Order entitled the Double Taxation Relief (Taxes on Income) (Norway) Order 1969, a draft of which was laid before this House on 15th April, an Order may be made in the form of that draft.—[Mr. Harold Lever.]
To be presented by Privy Councillors or Members of Her Majesty's Household.
Mr. Lever: I beg to move,
That the Central Banks (Income Tax Schedule C Exemption) Order 1969, a draft of which was laid before this House on 15th April, be approved.
This Motion has a similar advantage to that of the two former ones. It relates to an Order which I am sure hon. Members will have already studied in great detail. It seeks approval for a draft Order under Section 22 of the 1957 Finance Act. It gives exemption from English taxation to the Bank of Negara, Malaysia, which is the central bank of Malaysia. Now that the bank has been entrusted with the reserves of Malaysia, it qualifies for joining the select band of individuals who enjoy exemption from income tax. I do not think hon. Members will want me to go into great detail, although I am willing to do so if I am asked.
Question put and agreed to.

SUNDAY ENTERTAINMENTS [MONEY]
Queen's Recommendation having been signified—
Motion made, and Question proposed,
That, for the purposes of any Act of the present Session to make, in place of certain statutory provisions relating to Sunday observance and the playing of games, provision, in relation to Sunday, for preventing payments being made in certain circumstances in the case of certain spectacles taking place during certain hours, it is expedient to authorise the payment out of moneys provided by Parliament of any increase in the sums payable out of moneys so provided in respect of rate support grants to local authorities in England and Wales which may arise from the inclusion, in the expenditure relevant to the fixing of the aggregate amount of those grants, of expenses incurred under the said Act of the present Session by a local authority in Wales or Monmouthshire in connection with the holding of a local poll to determine either whether sports and games where payment is made by spectators should be allowed in the area of the authority after a specified time on Sundays or whether public entertainments and dancing where payment is made for admission should be allowed in that area after a specified time on Sundays.—[Mr. Merlyn Rees.]
10.55 p.m.
Sir Cyril Black: I believe I can be entirely uncontroversial in what I say on this Motion. The situation, I understand, is that this Money Resolution would provide for the expenses of a local option poll in Wales to be met in the event of the Sunday Entertainments Bill, which begins in Committee on Thursday, passing into law in its present form.
First, the House is almost exactly equally divided in regard to the Bill. Second, I understand that the Government have made clear that they take an entirely neutral view of the Bill and regard it as one for hon. Members themselves to decide upon. There is an Amendment on the Notice Paper, which will in due course be considered by the Committee, to extend the right of local option poll regarding Sunday entertainments to England in the same way as the Bill would make provision for local option in Wales and Monmouthshire. It is possible that, in its wisdom, the Committee—and, later, the House—will decide that it is right to extend local option in England as well as to Wales and Monmouthshire. My question is this: why
418
is England not covered by the Money Resolution?
10.56 p.m.
The Under-Secretary of State for the Home Department (Mr. Merlyn Rees): The hon. Member for Wimbledon (Sir C. Black) is right to say that the Government are neutral in this matter. We have not yet discussed it, and we are to begin this week. He is right also to direct attention to Clause 5 of the Bill, which, as he knows, since he has been concerned in these matters for a number of years now, is modelled on the provisions of the Licensing Act, 1964.
Polls will be held only at the request of the local government electors. It is impossible to make an accurate assessment of the expenditure which might be involved. If polls were held this year in every county and county borough in Wales and Monmouthshire, the cost could be estimated at between £50,000 and £100,000; but polls held in subsequent years would not necessarily be so costly.
The cost of the polls is included in the general expenditure of local authorities qualifying for rate support grant. I realise that the hon. Gentleman is concerned about England, but I should like to state the general position. The total amount of rate support grant is fixed by order two years in advance of the year in which it is payable, and it cannot be increased save in special circumstances, which would not apply in this case.
There will, therefore, be no increase in overall Government expenditure. What it boils down to is that local authorities which have a poll will have to meet the cost within their present expenditure, except that in Wales they can draw on the resources element because most of Wales has a less than average rate per head. So the first point is that there is no additional expenditure as a result of doing it, and the Bill as it stands at present deals only with Wales in this respect.
As to the precise question which the hon. Gentleman asked, the Financial Resolution must refer to the Bill as it stands. If the Bill is amended at a later stage, the Financial Resolution will itself need amendment later on.
Sir C. Black Sir C. Black: I am much obliged to the Minister.
Question put and agreed to.
Resolved,
That, for the purposes of any Act of the present Session to make, in place of certain statutory provisions relating to Sunday observance and the playing of games, provision, in relation to Sunday, for preventing payments being made in certain circumstances in the case of certain spectacles taking place during certain hours, it is expedient to authorise the payment out of moneys provided by Parliament of any increase in the sums payable out of moneys so provided in respect of rate support grants to local authorities in England and Wales which may arise from the inclusion, in the expenditure relevant to the fixing of the aggregate
420
amount of those grants, of expenses incurred under the said Act of the present Session by a local authority in Wales or Monmouthshire in connection with the holding of a local poll to determine either whether sports and games where payment is made by spectators should be allowed in the area of the authority after a specified time on Sundays or whether public entertainments and dancing where payment is made for admission should be allowed in that area after a specified time on Sundays.

SUNDAY ENTERTAINMENTS [MONEY]

  ADJOURNMENT
  Resolved, That this House do now adjourn.—[Mr. Harper.]
  Adjourned accordingly at one minute to Eleven o'clock.

LOCAL GOVERNMENT
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Preamble
The House met at half past two of the clock (Prayers having been real earlier at the Judicial Sitting by the Lord Bishop of Birmingham):
The LORD CHANCELLOR on the Wool-sack.

BRITISH AIR-BUS PROJECT
THE EARL OF KINNOULL: 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 now make a further statement on their participation in a British air-bus project.]
LORD BESWICK: My Lords, the British Aircraft Corporation are keeping us informed of the progress of their twin-engined 250-seater BAC 3–11 project which has been under evaluation. No firm proposals are vet before the Government. Any project would be judged by the same stringent economic criteria as were applied to the A.300B.
THE EARL OF KINNOULL: My Lords. I should like to thank the noble Lord for that reply. Could he indicate how soon the Government expect to receive the proposals, and whether the Government would insist at that stage on a minimum provisional list of orders from B.A.C.?
LORD BESWICK: My Lords, this is largely in the hands of the B.A.C.; it is their project and I understand that they want to ascertain for themselves the market potential of this aircraft before they come forward with any proposition.
LORD BALFOUR OF INCHRYE: My Lords, could the noble Lord give any indication, once Her Majesty's Government have received the evaluation, how long they will require to make up their minds?
LORD BESWICK: My Lords, that is a theoretical question.
LORD TREFGARNE: My Lords, does the noble Lord's reply mean that the
1026
Government have definitely decided not to offer any asistance to the A.300B project?
LORD BESWICK: My Lords, no. What has been decided about the A.300B at this stage was stated quite clearly by my right honourable friend in answer to a Question in the other place on April 16.
THE EARL OF KINNOULL: My Lords, could the noble Lord say whether any talks have ensued with the Lockheed Company to collaborate with the British project?
LORD BESWICK: My Lords, I understand that there have been talks, and that a most useful opportunity has been opened up. For the time being the talks are in suspense.

EPPING FOREST ROADS: DANGER FROM CATTLE
LORD SORENSEN: My Lords, I beg leave to ask the Question which stands in my name on the Order Paper.
[The Question was as follows:
To ask Her Majesty's Government what progress has been made in respect of new roadways passing through or adjacent to Epping Forest and in view of the continued danger arising from wandering cattle whether cattle grids are to be place on new roadways wherever this is possible and desirable.]
THE PARLIAMENTARY UNDER-SECRETARY OF STATE FOR DEFENCE, R.A.F. (LORD WINTERBOTTOM): My Lords, a contract has been let for the scheme to realign the North Circular Road at Waterworks Corner in Waltham-stow. The new road will be fenced off from Epping Forest and cattle grids will be placed on the approach roads so that cattle will not be able to enter the new traffic route. Draft proposals for the route of M.11 motorway between Red-bridge and Stump Cross were published on December 6, 1968. The motorway is shown passing to the East of Epping Forest at Gernon Bushes. My noble friend may be assured that we would seek to prevent cattle entering on to any new motorways or trunk roads that may be constructed through or adjacent to Epping Forest.
LORD SORENSEN: My Lords, may I ask the noble Lord whether, in view of the ambiguity of the matter, he can say when the new roadways in the forest will be finished—whether they will be finished by, say, a couple of years' time? Can he also say that in the future, when the roads are complete, the forest will not be smaller than it is now?
LORD WINTERBOTTOM: My Lords, I must write to my noble friend on the actual date of the construction of the new roads. With regard to the smaller size of the forest, it depends whether he means that there will be a substantial reduction because of the area taken over for motor roads. I do not believe that that will be the case.
LORD SORENSEN: My Lords, may I take it that there will be compensation for all the portions of the forest taken over for roadways by additional areas put on to the forest at some future date?
LORD WINTERBOTTOM: My Lords, may I write to my noble friend about that point? I can give no undertaking to-day.

GOVERNMENT STATEMENTS
2.34 p.m.
BARONESS SUMMERSKILL: My Lords, could I ask my noble friend the Chief Whip whether he proposes to repeat a Statement made in another place yesterday regarding a rather harsh and stupid decision?
LORD BESWICK: My Lords, without commenting on the latter part of my noble friend's question, the answer to the first part is, No, my Lords.
BARONESS SUMMERSKILL: My Lords, could I ask my noble friend what rule it is that determines what should be repeated in this House?
LORD BESWICK: My Lords, I am not sure about a rule. The custom is that we repeat in this House simultaneously Statements made in another place. That is for the general convenience of your Lordships' House. I understand my noble friend's interest in this matter, and if she wishes to pursue it there are of course other possibilities open to her.

IMMIGRATION APPEALS BILL
2.36 p.m.
THE MINISTER OF STATE, HOME OFFICE (LORD STONHAM): 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 Stonham.)
On Question, Motion agreed to.
House in Committee accordingly.
[The EARL OF LISTOWEL in the Chair.]
Clauses 1 to 6 agreed to.
Clause 7 [Review by Tribunal of determination of adjudicator]:
LORD STONHAM LORD STONHAM moved Amendment No. 1:
Page 5, line 22, after ("but") insert ("(a)").
The noble Lord said: I should like to take with this Amendments Nos. 2 and 3. Nos. 1 and 2 are paving Amendments for No. 3, which is the substantial Amendment. Subsection (2) of Clause 7, as at present drafted, provides that, subject to the exceptions mentioned in paragraphs (a) and (b), the rules of procedure may require a party to appeal proceedings before an adjudicator who wishes to appeal from the adjudicator's decision to the Tribunal to obtain leave to appeal from the adjudicator or from the Tribunal.
The first exception—paragraph (a)—is for cases of refusal of admission where the adjudicator allows the appeal and the Secretary of State certifies that he considers it desirable in the public interest that the case should be decided by the Tribunal. If such a certificate is given, the Home Office is entitled to appeal to the Tribunal without leave, and the Amendments I am proposing do not alter the effect of the clause in this respect.
The second exception—paragraph (b)—is for cases of refusal of admission where the Commonwealth citizen holds an entry certificate but the adjudicator dismisses his appeal. The clause in its present form provides that the holder of an entry certificate is entitled to appeal

1029
to the Tribunal without leave. There could, however, be a dispute in a particular case whether the Commonwealth citizen concerned was the holder of an entry certificate: the Immigration Service might allege that the entry certificate on which he relied was no longer valid, or had been issued to someone else, or was a forgery.
If such a dispute arose, it would be uncertain whether or not the Commonwealth citizen needed to obtain leave to appeal; and if he did not apply to the adjudicator for leave, it would also be uncertain whether he could be removed from the country under paragraph (4) of Schedule 2 before his case came before the Tribunal. To avoid this uncertainty the Amendments alter subsection (2) so that a Commonwealth citizen who claims to hold an entry certificate may nevertheless be required to obtain leave to appeal, but the adjudicator, or the Tribunal, will be bound to grant leave if satisfied that lie is the holder of an entry certificate. In this form the provision corresponds more closely to the Wilson Committee's recommendation on this point. I beg to move.
On Question, Amendment agreed to.
LORD STONHAM: I beg to move Amendment No. 2.
Amendment moved—
Page 5, line 24, leave out ("(a)").—(Lord Stonham.)
On Question, Amendment agreed to.
LORD STONHAM: I beg to move Amendment No. 3.
Amendment moved—
Page 5, leave out lines 29 to 33 and insert—
("and
(b) if leave to appeal under this section is by virtue of the rules required in a case where the adjudicator has dismissed an appeal under the said section 2(1)(a) the authority having power under the rules to grant leave shall grant it if satisfied that the person who was the appellant before the adjudicator held an entry certificate at the time of the refusal which was the subject of the appeal.")—(Lord Stonham.)
On Question, Amendment agreed to.
Clause 7, as amended, agreed to.
Clause 8 [Determination of appeals]:
LORD BROOKE OF CUMNOR LORD BROOKE OF CUMNOR moved Amendment No. 4:
1030
Page 5, line 44, leave out ("should have been exercised differently") and insert ("has been exercised unreasonably").
The noble Lord said: I beg to move Amendment No. 4. I am afraid that I must try your Lordships' patience for a few moments in explaining the problem which underlies this Amendment. Let me say at the outset that I am not asserting that I have found the right solution for it, but I hope to convince your Lordships that there is some change in the Bill as it stands which the Government ought to make.
We are here considering the actions of the appellate authority; that is to say, the adjudicator or the Tribunal. Clause 8 indicates in what circumstances the appellate authority should allow an appeal. There is no difficulty about Clause 8(1)(a)(i): the appeal should be allowed if the appellate authority considers:
"that the decision or action against which the appeal is brought was not in accordance with the law or with any immigration rules applicable to the case."
That, clearly, is a justiciable issue, and if the appellate authority is satisfied that the Secretary of State has reached the decision not in accordance with the law, or not in accordance with the immigration rules which he himself has submitted to Parliament and had approved by Parliament, then clearly the appeal should be allowed.
A much more difficult case arises under Clause 8(1)(a)(ii). This is a case which is not governed by the law or by any immigration rule, but a case:
"where the decision or action involved the exercise of a discretion by the Secretary of State or an officer."
In such a case the clause as drafted says that the appellate authority shall allow the appeal if he considers
"that the discretion should have been exercised differently".
Those words seems to me to be much too wide. I know that cases arise in the courts of law where there is an appeal to the Court of Appeal against a decision by a judge which it was in the judge's discretion to make. I believe I am right in saying that the Rules of the Supreme Court lay down precisely the circumstances in which a decision made by a judge, which it was within his discretion to make, can be overruled and set aside

1031
by the Court of Appeal. But they certainly do not cover a case in which the Court of Appeal decides that the discretion should have been exercised differently. The Court of Appeal is asked to decide, in accordance with these Rules, whether, for example, the judge of first instance had taken into account irrelevant matters, or had failed to take into account something which he should have considered. There would be no chance of a judicial appeal to the Court of Appeal being allowed simply because the Appeal Court formed a different opinion from that of the judge of first instance.
My Amendment would leave out the words, "should have been exercised differently", and insert the words, "has been exercised unreasonably". That would at any rate place on the appellate authority the responsibility of satisfying itself that the Secretary of State had acted reasonably; it would not allow the appeal unless it believed that the Secretary of State had acted unreasonably. I think it will be common ground among all of us that a decision by the Secretary of State responsible to Parliament—a decision which it was in his discretion to reach—should not be set aside lightly by any other body.
I would here mention that neither the adjudicator nor the Tribunal is responsible to Parliament. So in the last resort, if the Amendment is not accepted and the clause goes through unaltered, we shall have the situation that the Secretary of State reaches a decision which it is within his discretion to reach—and for which he is answerable to Parliament, and can be questioned there—but under this clause that decision can be appealed against. The appeal can go to the adjudicator, or it may go to the Tribunal, and the adjudicator or the Tribunal can reach a different decision and can say that the appeal should be allowed simply on a matter of opinion; simply because it thinks that its opinion is better than the Secretary of State's opinion.
What I am submitting is that a decision by a Minister who is responsible to Parliament for that decision should not be so lightly overruled by any appellate authority. What I am asking is that, if the Government cannot accept the words I suggest, they should consider some other
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words which will tighten up the appellate arrangements. So far as I can read the words in the clause, the appellate authority is given no guidance whatever: it is not asked to apply any criteria whatever. It is simply told that it should allow the appeal if it considers that the discretion should have been exercised differently. Perhaps we can take a more specific case so as to illustrate this point.
Let me say at once that I am particularly concerned about the working of this sub-paragraph in relation to deportation cases. There is no question whatever that the Secretary of State has to take a discretionary decision in deportation cases. Supposing a Commonwealth immigrant who is here is found to be a drug addict. It is not a criminal offence to be a drug addict, so there is no question of his coming before the court and being charged and recommended for deportation. Yet I for my part—and I think probably most of your Lordships for your part—consider that this country ought not to be a haven for drug addicts and that it is very desirable that such people, if they are found to be here, should be sent away. But in a case of that kind, if the Home Secretary reaches such a decision there is no reason whatever why the appellate authority should not reach a different decision; why they should not say that this is an interference with personal liberty, and should allow the appeal. And unless any security element is involved—and in my theoretical example no security element is involved—then the Secretary of State will be effectively overruled by the appellate authority.
What I am seeking to secure is that the appellate authority, which as I say is not answerable to Parliament, shall not be in a position to overrule the Secretary of State lightly. I am not challenging the policy that there should be an appeal on discretionary decisions. That is discussed by the Wilson Committee and, although that Committee thought that certain types of discretionary decision should be taken out of the appeal machinery, I am not challenging what the Government are doing here. But because I am not challenging the main principle I feel the more strongly that the appellate authority should in this case be given some criterion or criteria. It does not seem to me to be sound legislation if Parliament says to the Secretary of State,

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"You take your decision; you are answerable to Parliament and you may have to defend your decision in Parliament; but your decision may be set aside by an appellate authority which is given no guidance at all by Parliament as to how it shall reach its decisions, except that it may reach a different decision from the Secretary of State on a matter of opinion".
The Government may say that my wording would not make a sufficiently great difference to the law to achieve my purpose. If so, I look to them to produce another form of words, because I believe most sincerely that the words in the Bill at present are too loose and too vague to achieve what probably all of your Lordships want to achieve in this instance. I beg to move.
2.52 p.m.
LORD STONHAM: On this Amendment, and I am afraid on some other Amendments, I shall have to burden your Lordships with a somewhat detailed argument, but these are matters of great importance to millions of people and it is possible that this may be the last opportunity, on this Bill at least, for a detailed exposition of all the facts. Therefore I hope your Lordships will bear with me. The Amendment proposed by the noble Lord, Lord Brooke of Cumnor, would allow the appellate authorities to overrule a decision involving the exercise of discretion only if they considered that the discretion had been exercised unreasonably, instead of, as the Bill stands, allowing the appellate authorities to overrule a decision if they consider that the discretion should have been exercised differently.
The kind of case to which subparagraph (ii) of subsection (1)(a) will apply is one where the law and the immigration rules leave it open to whoever takes the decision (whether it be the Home Secretary or an immigration officer) to exercise a discretion. There are many examples of this. For instance, in the case of Commonwealth citizens an immigration officer, in dealing with an adult immigrant of working age with a relative here, may have to decide whether he has a strong compassionate case for admission. He may have to decide whether there are strong compassionate reasons for not refusing admission, justifying reference to headquarters,
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in a case where a medical inspector has certified that for medical reasons it is undesirable for the person to be admitted. Again, in dealing with a child who seeks to join only one parent, or a near relative, the immigration officer may have to decide whether there are family or other special considerations which in the opinion of the Secretary of State would make exclusion undesirable; or in dealing with a Commonwealth citizen who has been convicted of an extradition crime, whether there are compassionate grounds for not refusing admission. Again, an entry certificate officer may have to decide whether, in the case of a male fiancé or the husband of a resident in the United Kingdom, there are special circumstances, of a family nature or otherwise, which make exclusion from the United Kingdom undesirable. Again, in deciding whether to make a deportation order under Clause 16 the Secretary of State will be exercising a discretion, since he will not decide to make such an order in every case of breach of conditions, but will take account of the seriousness of the breach and any compassionate or other special circumstances.
There is even greater scope for the exercise of discretion in relation to aliens. As to the admission of aliens, the draft instructions to immigration officers authorise them to refuse leave to land to any alien if there are grounds which render his presence in the United Kingdom undesirable: for example, if his character, conduct or associations make it undesirable to permit him to enter the United Kingdom. As to deportation, the noble Lord, Lord Brooke of Cumnor, may recall that on Second Reading he made reference to the Home Secretary's power under Article 20(2)(b) of the Aliens Order 1953 to deport an alien if he considers it conducive to the public good to make a deportation order, and the noble Lord cited two cases in which he himself had exercised that power.
The proportion of cases of refusal of admission where the decision is based on the exercise of a discretion in a true sense is, and will remain, small. In most cases of refusal (and I believe the noble Lord, Lord Brooke of Cumnor, agrees with this) the dispute will be over the facts of a particular case—for example, the immigrant's intentions, age or relationship—and they will arise under sub paragraph (1) of Clause 8(1)(a). But, although

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relatively few in number, discretionary decisions are important and they are the ones where there is most likely to be a case of great difficulty and sometimes great public concern.
The extent to which the appellate authority should be able to review the discretionary decisions is a question which the Wilson Committee specifically considered and on which they took account of the views of their legal witnesses, some of whom in fact were in favour of restricting the appellate authorities' powers of review. The Committee's conclusion, however, was as follows:
"The view which we have formed is that in the field of immigration control discretionary decisions, although relatively small in number, are those most likely to give rise to controversy, and to a sense of grievance if they are not subject to impartial review. We therefore recommend that where the general rules leave scope for the exercise of discretion by the Home Secretary the same discretion should be open to the appellate authorities. Where however a rule leaves no room for discretion, the appellate authorities should have no power to waive its application in a particular case."
That is what we have done. The Government agree with the Committee that appellants are likely to feel a sense of injustice unless discretionary decisions, as much as other decisions in the field of immigration control, are fully open to review on their merits by the appellate authority. The noble Lord, Lord Brooke, feels, as he said, that this extensive power of review, which he regards as being much too wide, impairs the Home Secretary's responsibility to Parliament. I do not think, however, that he has taken adequate note of the safeguards in the Bill. The Government naturally have the question of responsibility to Parliament very much in mind. We believe that the provisions of the Bill taken as a whole reserve to the Home Secretary sufficient freedom of action to enable him to discharge the responsibilities that Parliament can reasonably require of him when the appeal system is in operation.
Three features of the appeal system provided for in this Bill are of special importance in this regard. First, there is the Home Secretary's power to lay down and to alter from time to time general rules governing admission and control after entry—that is, the immigration rule as defined in Clause 22(2); secondly, the fact that, in security cases
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and, as regards aliens, in political cases also, the decision of the tribunal is not binding on the Home Secretary; thirdly, the Home Secretary's power under Clause 7(2)(a) to secure that, in a case in which admission is refused in pursuance of his decision, that decision can be reversed on appeal only by the Tribunal.
I should like to deal with those three points, which arc not only relevant but of great importance in answering the noble Lord's case in rather more detail. With regard to the power to determine general rules, under the Bill the function of laying down general rules to govern immigration control remains with Parliament, so far as the rules take statutory form, and with the Home Secretary so far as they are to be put in the form of immigration rules. Admittedly, no set of immigration rules could provide a rule to cover every possible set of circumstances that might arise in a particular case; nor could it cover in detail every type of case that may present a problem to the control at any particular time. The best, therefore, that can be done is to lay down broad general rules covering the great majority of cases. The White Papers presented to Parliament in connection with the Bill have deliberately been framed in such a way as to give the appellate authorities sufficient guidance on the general principles governing immigration control while leaving those authorities a fairly wide measure of discretion in the application of those principles to cases which present special features. But if it were later found that the appellate authorities had been left too wide an area of discretion, it could be more closely circumscribed. The Home Secretary has power to alter the immigration rules at any time by presenting a new White Paper, and thus he can if necessary provide the appellate authorities with more specific guidance on any question of policy. For example, if when immigration rules for the admission of aliens come to be published in their final form it is still considered necessary in the public interest to preclude the entry of aliens who wish to study scientology, a specific provision to this effect can be included in the rules.
Where an appeal by a Commonwealth citizen is dealt with under Clause 9 by a special panel of members of the Tribunal, because the decision or action in question was "taken in the interests of

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national security", the effect of subsection (3) of the clause is that the Tribunal's decision on the appeal is not binding on the Home Secretary—and that is important. Similarly, where an appeal by an alien is dealt with by the special panel under Article 7 of the Aliens (Appeals) Order, because the decision or action in question was taken
"wholly or mainly in the interests of national security or of the relations between the United Kingdom and any other country or otherwise on rounds of a political nature",
the Tribunal's decision will not be binding on the Home Secretary. These exceptions to the general principle that the appellate authorities' decisions are binding on the administration have been made because the Government considered that in security and political cases, where the outcome might sometimes vitally affect the national interest, the Home Secretary's responsibility for the final decision should be preserved.
The noble Lord, Lord Brooke, cited the case of a drug addict. He said that he felt that a Commonwealth immigrant who is a drug addict—and drug addiction is not a crime and therefore he cannot be recommended for deportation—ought to be sent away or the Home Secretary ought to have power to send him away. This prompts me to refer to, and I hope clarify, a point arising from the noble Lord's speech on Second Reading. He will recall speaking of the drug addict whom he had had deported; it was Lenny Bruce, although he did not then cite the case. The noble Lord said:
"Under this Bill he could appeal, and…the Tribunal … might take a different view … The Government … would then be powerless to get rid of such a man."—[OFFICIAL REPORT, 27/3/69, col. 1430.]
In winding up and replying to the noble Lord in that debate I said:
"The noble Lord, Lord Brooke of Cumnor … mentioned Rockwell … who was an American Nazi … and a drug addict, whom he did not mention by name … Indeed, either of the two classes of person he mentioned could be deported if the appellate authorities upheld an appeal against deportation, as the noble Lord supposed."—[cols. 1449–50.]
My statement on Second Reading assumed that both cases, if the appeal system had been in force when they arose, would have been dealt with under the normal procedure envisaged in the Aliens (Appeals) Order, and that neither
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would have been the subject of a direction by the Home Secretary under Article 7. There is, however, a possibility that such a direction could have been given in Rockwell's case, on the footing that a decision to exclude a prominent Nazi was a decision taken "on grounds of a political nature".
The issue of a direction under Article 7 (as under Clause 9 of the Bill) is a matter for the judgment of the Home Secretary of the day, and we cannot presume to say what view Lord Brooke would have taken if the question had arisen in Rockwell's case. The phrase "grounds of a political nature" is that used by the Wilson Committee; and it has not been possible to find any more precise form of words to define the wide range of cases concerning aliens which ought to be dealt with under Article 7. As the Government interpret Article 7, if the reason for refusing entry to a prominent Nazi were that his expression of Nazi views here would endanger public order, that would not be a decision taken on grounds of a political nature; but a decision to refuse him entry because of the objectionable nature of Nazi views as such would be a decision taken on political grounds. The dividing line is necessarily a fine one, depending on the precise reasons assigned for the decision, which under Clause 6 will have to be disclosed when the decision is notified.
May I turn to the right of appeal to the Tribunal? Clause 7(2)(a) empowers the Home Secretary, in a case where an adjudicator allows an appeal against refusal of admission, to certify that he considers it desirable in the public interest that the case should be decided by the Tribunal. If such a certificate is given, the Home Office can appeal to the Tribunal against the adjudicator's decision without having to obtain leave either from the adjudicator or from the Tribunal. This power is intended for use in cases where the decision to refuse admission has been taken by the Home Secretary in advance of the arrival of the person concerned. The purpose of giving the Home Office this right of appeal to the Tribunal without leave is precisely to prevent the situation arising in which, as Lord Brooke put it on Second Reading, an adjudicator can override the decision of a Minister of the Crown. The object is to ensure that, where a decision to exclude a person from the country

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has been taken by the Home Secretary as the responsible Minister, that person should not be able to enter the country until the Immigration Appeal Tribunal itself has reached a final decision on the case.
The Wilson Committee regarded the degree of discretion entrusted to the appellate authorities under their recommendations as
"no greater than is normally thought compatible with the exercise of judicial functions."
There is no reason to expect that the adjudicators, still less the central appellate authority, will exercise their discretion arbitrarily or capriciously, or without due regard for the public interest, and I am sure the noble Lord, Lord Brooke, would accept that. The powers reserved to the Home Secretary under the Bill which I have just described are in our view sufficient to preserve his general responsibility for the proper working of immigration control and of the appeals system as a whole, and to discharge the Government's special responsibility for national security.
A further valid reason for opposing the noble Lord's Amendment is that it would leave the appellate authorities with an unnecessarily difficult and complicated task in the discretionary cases. As the Bill stands it will be for each adjudicator, subject to any guidance from the Tribunal as experience of the appeals system is accumulated, to decide for him-self how to settle such a case. This may not always be easy, and there may be some inconsistency of approach in the early stages, but at least each adjudicator will be clear as to the nature of his duty; hat is, to apply his mind to the case and to come to the conclusion that seems to him to be the right one.
Under the noble Lord's Amendment the adjudicator's task is less clearly defined. He has to ask himself first, is the decision against which an appeal is lodged one that no reasonable immigration officer or no reasonable Secretary of State could have reached? Only if he answer is in the affirmative may the adjudicator allow the appeal. It would not be sufficient that he himself would lave come to a different conclusion. But to decide whether a decision was not within the bounds of action of any reasonable immigration officer or Sec
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retary of State would be no easy task; and to substitute this test for that provided under the Bill is, in our view, likely to complicate the task of the appellate authorities and to conduce to greater inconsistencies of decision.
I hope I have convinced the noble Lord that there are sufficient safeguards; and if in the rules and in the advice we find subsequently that he was justified in thinking that the powers are too wide or the safeguards insufficient, then we have a power to alter the situation. But for the reasons I have given, which are reasons both of principle and of practicality, I cannot advise your Lordships to accept the Amendment, and I hope that the noble Lord, Lord Brooke, will feel able to withdraw it.
3.12 p.m.
VISCOUNT DILHORNE: I hope the noble Lord will not withdraw it as yet, because there are certain matters in relation to this Amendment with which I hope the noble Lord, Lord Stonham, will deal in a further speech. There are certain matters of importance which he has not covered in what he has said. First of all, may I say that I am no more wedded to the words of my noble friend's Amendment than he is, and so I need not spend any time in trying to defend that proposition. But I think he has put his finger on what is a most important question. The noble Lord, Lord Stonham, has said that there may be a wide variety of discretion cases and that there will be cases of great importance, albeit relatively few in number. Whatever their number may be, surely we want to get the procedure right, and under the Bill as it stands at the moment I do not think anyone could say that it was.
The argument has been put forward that if someone appeals, having been refused entry in the exercise of the discretion of the Secretary of State, he will feel a sense of injustice if the exercise of that discretion cannot be completely reviewed. I recognise that there is some force in that argument, and of course I recognise that there is force in the views of the Wilson Committee. But I hope the noble Lord will pursue the point a little further, because first of all we find that appeals in certain cases are to be with leave, and in other cases without leave. Provision for that is made by

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the rules, and we do not as yet know in what cases leave will be required and in what cases not. But any person who has lost the first round is apt to feel a certain sense of injustice if he cannot get leave to appeal. Some litigants even feel that sense of injustice, wholly unwarranted, when they are not enabled to come before your Lordships in a judicial capacity in a case which does not merit investigation. So one can get a sense of injustice there.
It is difficult to suppose that you could ever find a rule that an appeal in a case where discretion is required to be exercised required the granting of leave, because under the Bill as it stands there is no guidance as to the principles on which the appellate body, be it adjudicator or Tribunal, should act. Therefore there will be no guidance or criteria to apply to determine whether or not leave should be given, if leave is made a requirement. Therefore I suppose that in any case in which discretion is involved there will be no requirement of leave to appeal. It would seem to me to follow, if that be right, that in every single discretion case you will get an appeal, because if the Secretary of State's decision is based on the exercise of discretion it is perfectly open to an adjudicator to reverse that decision in the exercise of his discretion. There is nothing to lose and all to gain.
Pursuing that point a little further, I do not know how many adjudicators there are going to be. Let us assume that an appeal goes to one adjudicator in one case and he reverses the Secretary of State's exercise of discretion. A similar case, on almost the same facts or it may be indistinguishable facts, may go on appeal to another adjudicator, who exercises his discretion differently. So as between two similar, indistinguishable cases, in one case you have an appeal from the Secretary of State allowed in the exercise of the adjudicator's discretion, and in the other case you have it refused. Will that not give rise to a sense of injustice in itself, a real sense of injustice, a much greater sense of injustice, than by having rules laid down giving guidance to the adjudicators as to the basis on which they can interfere with the exercise of discretion. This may happen in a large number of cases. It seems to me that under the procedure as it now stands in the Bill you are going to get a wide
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disparity of decisions in these discretion cases.
The noble Lord spoke about the Tribunal giving guidance to the adjudicators. I do not quite know what he means by that. I may have misunderstood or misread it, but I thought that the adjudicators were to be independent and impartial, not subject to guidance or control by any other body. But perhaps I have got it wrong. If the Tribunal is to be the master of the adjudicators I should like to know exactly on what basis. That is one matter. I feel that it will not do as it is. It is not good enough to say, "Adjudicators will seek to do their job properly". Of course they will. But the views of individuals differ considerably on question of discretion. Often they are the most difficult matters to decide. Here, a decision of the Secretary of State can be brushed aside by one adjudicator exercising his discretion when another adjudicator would not do so. I think that is going to be unfortunate in its results.
What there ought to be is not an appeal from one man or one body to a whole series of different people who may reach different and conflicting conclusions, but an appeal from a wide number of individuals, if you like, to one central body. This would give some degree of uniformity. In this Bill exactly the reverse process is adopted, so far as adjudicators and appeals from the Secretary of State are concerned.
Why is it that the Government will not consider applying the same principles as are applied in the courts, where an appeal is from the exercise by a judge of his discretion? Is it suggested by the Government that those litigants who appeal to the Court of Appeal feel a sense of injustice because these rules are applied? These rules are designed for fairness. I ask the noble Lord to think again; to think whether in his Bill he cannot provide something which, while it does not fetter the proper exercise of discretion by the adjudicators, at least secures that it will be exercised by them in accordance with the principles laid down and followed by the Court of Appeal when that court is considering whether or not to interfere with the exercise of discretion by a judge. That is what my noble friend Lord Brooke was seeking. That is something which ought to be in this Bill

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and, despite the long explanation which the noble Lord, Lord Stonham, has given, for which I am sure the whole Committee is grateful, he has said nothing to indicate that he really appreciates the weight behind the point made by my noble friend. I only hope that he will think again about this matter.
LORD MITCHISON: I rise just to say that I hope my noble friend Lord Stonham will do nothing of the sort and that he will stick to the language of the Bill. I have been listening impatiently to hear what the suggested alternative was, and the only alternative I have heard is the one in the Amendment itself. It does no harm, after all, to refer to the Amendment we are supposed to be discussing. This is an amendment which is designed to exclude from the exercise of discretion cases where it is thought that the discretion ought to have been "exercised differently" and to substitute the words "exercised unreasonably." Considering the character of the adjudicator and the Tribunal—and one can find that in the Bill—I see no particular reason for doing that. If there really are any such cases, they will form a very small class of cases indeed. With great respect I did not think that the instance the noble Lord, Lord Brooke of Cumnor, gave came within that very narrow class. The real safeguard in this Bill is surely that the discretion to be exercised is not only the discretion of the adjudicator but, if necessary, the discretion of the Tribunal itself. In the law we have to deal occassionally with a hypothetical being known as a "reasonable man". I do not see why we should not do it in this case. I cannot sit down without reminding your Lordships that reason is, and ought to be, the servant of the passions. I have an occasional feeling that the noble Lord, Lord Brooke of Cumnor, is very good on reason but that it is not always in his case sufficiently the servant of the passions.
THE EARL OF MANSFIELD: Would not the noble Lord, Lord Stonham, at least consider taking this question back and considering it before the Report stage? We know how in this country feelings are greatly stirred when, for example, two adjacent benches of magistrates give totally different penalties for quite small motoring offences. This is a
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difficult and contentious Bill, and however administered it is bound to cause a certain amount of hardship and a considerable amount of ill feeling. Having some knowledge of the West Indies in particular, I know what potential immigrants feel about it. Surely it would be a good thing to see whether we could not reduce the number of cases where anomalies might occur to the lowest possible minimum. Would it not be better, therefore, that the adjudicators should be given some slight degree of instruction, or at least advice, as to how they should administer their powers? If the law is kept in its present form, it seems to me, as the noble and learned Viscount has so rightly stressed, that there are going to be very different interpretations put on cases by various adjudicators. The result will be that a quite unnecessary amount of hardship may be inflicted, and an entirely unnecessary amount of ill feeling caused. Therefore I would ask the noble Lord, Lord Stonham, whether he would not be prepared to take this matter back and see if something cannot be done to meet the point which my noble friend Lord Brooke has raised, even if the method of dealing with it is entirely different so far as verbiage is concerned.
LORD WALSTON: With the greatest respect to noble Lords opposite, it seems to me that they are taking far too legalistic a view of this problem. The noble and learned Viscount made a plea for some degree of uniformity in these decisions which have to be made, and he suggested that we should try to apply the same principles as in the courts. In this instance, I do not believe that we should attempt to apply the same principles that we have in courts because we are not dealing with legal matters in the same way that the courts deal with them. What we are dealing with here is the decision of one individual—who is referred to as the "Secretary of State" when in fact we all know that he is an immigration officer—as to whether another individual is or is not speaking the truth. With the number of immigration officers that there are—and I do not know how many there are; perhaps my noble friend could tell us, if it is relevant—it is impossible to get any degree of uniformity because the decision depends purely on their own subjective judgment.

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I do not believe that it is right that the future of one individual, the would-be immigrant, should depend solely on the subjective judgment of one immigration officer, no matter how sound he may be or how experienced he may be—and that is the basis for this whole appeal system. The appeal, therefore, is against an arbitrary decision—and I do not use that word in any derogatory sense—and the man to whom the appeal is made, the "adjudicator", as he is referred to here, surely must be completely unfettered; and if he considers that the immigration officer should have acted differently, should have made a different decision, he must be in a position to say so and to reverse that decision.
For that reason I hope that my noble friend will keep this clause as it stands, with one very small suggestion which I will come to now if I may, and will turn his face against the Amendment proposed by the noble Lord, Lord Brooke of Cumnor. The very small amendment which I would suggest is purely drafting. If one looks at Clause 8(1)(a), it says:
"… shall allow the appeal if he considers—
"(i) that the decision or action".
I think it should read:
"… shall allow the appeal—

"(i) if he considers that the decision or action against which the appeal is brought was not in accordance …or

"(ii) where the decision or action involved …"

I will not press that point, but if my noble friend will read it carefully I think he will see that the (i) should be put in a different place.
LORD ELTON: May I return for a moment to what I took to be the central and simple point underlying the Amendment of the noble Lord, Lord Brooke of Cumnor; that is, the danger of withdrawing what are in fact political decisions from the Secretary of State, who is responsible to Parliament, and entrusting them to an adjudicator or the Tribunal, who are not. The noble Lord, Lord Stonham, met that argument with a series of rebuttals (I think he called some of them "exceptions") which I followed as closely as I could, and perhaps when I have had time to read them in Hansard to-morrow I shall be more convinced than I was. However, I still feel that the point has not wholly been met and that it would be worth your Lordships' while
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to remember that this clause, in so far as the charge of the noble Lord, Lord Brooke of Cumnor, against it is justified, becomes an instance of a very dangerous tendency, a tendency which has nothing whatever to do with immigration, but one which is constitutionally dangerous.
What it appears to do is to remove a decision which should be a political decision from a political officer. Where the decision is a question of fact, whether an immigrant is in fact under 16, or in fact the child of his alleged parent, then it is eminently proper that the ultimate decision should be judicial and that all political arguments and pressures should be kept remote. But where the question at issue is political—is it wise or proper to admit a scientologist, or a drug addict, or a racial agitator?—that is a political decision, and I should have thought that the ultimate decision subject to no review, should rest with the Secretary of State, simply because he represents Parliament and Parliament represents the people. The tendency to delegate and dissipate the responsibilities of Parliament to a number of ad hoc tribunals and other bodies has been very widespread and long-extended, and I think we should bear that aspect in mind in considering the noble Lord's Amendment.
LORD FOOT: I should like to urge the Government to stick to their guns and stand by their wording. I am most grateful to the noble Lord, Lord Stonham, for the exposition which he gave to us at the beginning of this debate, in reply to the noble Lord's Amendment. In particular, I am grateful to him for quoting to us the sort of cases where the exercise of discretion arises. I think it was clear from what the noble Lord said that a great number of them, at any rate, are cases which involve the weight to be given to compassionate considerations. He quoted one of the illustrations given in the Wilson Report; that is, the case of an immigration officer who has to decide whether it will be proper to allow somebody who is over the age of 16, or whatever it may be, or who is still of working age, to come in if there are strong compassionate grounds for doing so.
In cases of that kind, what is the adjudicator doing when he reviews the immigration officer's decision? He is not

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putting himself in the position of the Court of Appeal, deciding upon whether a judge has exercised his discretion in the court below in a proper manner: he is doing something of a different nature. What he is doing, surely, is deciding for himself whether the weight to be given to the compassionate consideration is such as to justify the admission of that person into the country. As the noble Lord, Lord Stonham, said, it would impose an almost impossible obligation upon the adjudicator or the Tribunal, in reviewing an immigration officer's decision in those circumstances, simply to ask itself: was the immigration officer acting reasonably?
It does not seem to me that the question of what weight should be given to this compassionate consideration is susceptible of answer if you pose the question: was the immigration officer or the Secretary of State acting reasonably? Is it not vitally important, from the point of view of fair play, and in order that the immigrant himself can see that justice is being done, that the question of the weight to be given to compassionate considerations should be the decision of an entirely independent person? That seems to me the great virtue of the words which are in the Bill, and the disadvantage of the words which are proposed in the Amendment.
3.34 p.m.
LORD BROOKE OF CUMNOR: I am extremely grateful to my noble and learned friend Lord Dilhorne for the powerful support which he gave to the purpose, though not to the wording, of my Amendment. In reply to the noble Lord, Lord Mitchison, I would simply point out that I made it absolutely clear that what I was asking the Government to do was to find words which were more appropriate than the words at present in the Bill.
My noble and learned friend made an unanswerable case for assimilating the arrangements here, mutatis mutandis, to; those of the courts, and in so far as this is a question of appeal machinery there is an exact parallel. I am also grateful to the noble Lord, Lord Stonham, for the trouble which he took in replying to me at such length. But even at the end of his speech it appeared to me that he still imagined that I was dissatisfied on
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matters of policy, whereas my dissatisfaction is confined to the matter of appeal machinery. It still seems to me that, as my noble and learned friend said, it would be very much wiser to assimilate this machinery as closely as may be to the machinery which, so far as I know, works perfectly satisfactorily in appeal oases in the courts.
The Rules of the Supreme Court state some half a dozen grounds on which the Court of Appeal is prepared to entertain an appeal against an order by a judge which it was within the judge's discretion to make. I understand that those Rules are scrupulously observed, and they give to the appellant some guidance as to what he must prove if he is to succeed in his appeal. But your Lordships will notice that under the Bill as it stands the appellant has no guidance at all. Therefore, whenever a decision is reached by the Secretary of State which might give rise to an appeal under Clause 8(1)(a)(ii) there will invariably be an appeal.
Why not? Since the appellate authority is given no guidance at all as to how it shall reach the decision, why not have another dip? Consequently, every one of these cases will go to an adjudicator, and a number of them will go to the Tribunal. I think that my noble and learned friend's objection, that we might have different decisions reached by different adjudicators, will probably be overcome by the fact that the Secretary of State has an unfettered right of appeal to the Tribunal. So that, in the long run, anomalies of that kind will be sorted out by the Tribunal. But it seems to me that it would be helpful to all concerned, including the appellant, if he was given some indication of the grounds on which his appeal might succeed.
The noble Lord, Lord Stonham, quoted from the Wilson Committee's Report, and gave the House to understand that what the Government were doing was straightforwardly to implement that Report. I entirely agree, as I said, that there should be a right of appeal where the decision is a matter of discretion. But what the Wilson Committee went on to say, in paragraph 141 of their Report—and the noble Lord did not quote this—was:
"… some degree of discretion will be entrusted to the appellate authorities, but no

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greater than is normally thought compatible with the exercise of judicial functions."
That is precisely what my noble and learned friend and I are seeking to secure here: that there should be as close a parallel as possible with the machinery, which so far as I know works perfectly smoothly, in regard to appeals from a judge's discretionary decision to the Court of Appeal.
I must also make reference to paragraph 143 of the Wilson Report, because the Government would be on firmer ground if they accepted all that the Wilson Committee said in paragraph 143. They have accepted, let me say, that where there are security considerations the decision of the Secretary of State, and not that of the appellate authority, shall be final. But the Wilson Committee devoted a special paragraph to political cases and, with your Lordships' permission, I will just read it, because it is very relevant to our discussion. The Committee said:
"Cases arise from time to time in which the Home Secretary feels justified in excluding a person from this country, or requiring him to leave, on grounds that are essentially of a political nature—for example, that his presence here is or would be harmful to international relations or offensive to public opinion. We doubt whether the system of appeals which we are proposing would provide apt machinery for dealing with such cases. We would not therefore think it wrong in principle, or destructive of the general value of the proposed appeal system, to remove such cases from the scope of that system and leave them entirely to the Home Secretary's discretion subject to his responsibility to Parliament."
The Government have not accepted that paragraph in the Wilson Report.
So far as aliens are concerned, they have introduced provisions into the proposed Aliens Order which will secure much the same result, as we shall be discussing later in the Bill. Where an alien is excluded or is liable to be deported on grounds of a political nature, then, though he has a right of appeal under the Government's proposals, it will be the Secretary of State who will reach the final decision. But the Government have not extended that, as it should have been extended, to Commonwealth citizens—and here is the matter upon which I would agree so strongly with the noble Lord, Lord Elton, who was right on the mark.
May I quote again the notorious case of the American Nazi, Rockwell? I
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would have thought that, outstandingly, he was a man of whom it could be said that his presence here would be "offensive to public opinion". He was an avowed and dangerous Nazi, and he came to this country to join up with the British Fascist movement, so called. Under the Government's proposals as set out here, that man, so long as he was an alien, could be turned back at the ports, or subsequently be deported, on the ground that his presence here was not conducive to the public good. But the Government have introduced no safeguard into this Bill against the contingency that such a man might arrive here being a Commonwealth citizen. Rockwell might have been a Canadian: he happened to be an American, but he might have been a Canadian. And the Government seem to treat it comparatively lightly that they are providing no effective means of keeping out or getting rid of such a man if he is a Commonwealth citizen.
I have no doubt at all that such a man should be refused admission. The noble Lord, Lord Walston, says that when we are talking about the Secretary of State we are really talking about an immigration officer. But, with respect to the noble Lord, that is not wholly true; because, as the noble Lord, Lord Stonham, said, the cases arising under this sub-paragraph, though not great in number, are some of the most difficult, and it was just these difficult cases which in my experience came up to a Home Office Minister; and I have little doubt that they still do. Suppose that a Canadian Rockwell were to arrive in this country, and the Home Secretary were to determine that he should be refused admission on the ground (to quote the Wilson Report) that his presence here would be "offensive to public opinion". That Canadian Rockwell could appeal to an adjudicator or to the Tribunal, and the adjudicator or the Tribunal would be entirely free to reverse the Home Secretary's decision—entirely free, despite the fact that the Home Secretary's decision had been taken on what were unquestionably political grounds, which is exactly the kind of matter on which the Home Secretary ought to be answerable to Parliament.
I greatly hope that the Government will give further consideration to this matter, as has been suggested. I sympathise with them in that I do not think

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it is at all an easy problem. It would be easier if these Commonwealth cases of a political character could be dealt with in the same way as alien cases of a political character; but that is not provided for in the Bill at present, and the fact that that is not in the Bill makes it, so it seems to me, urgent that in some way or other the Government should review these words which I have criticised.
3.44 p.m.
LORD STONHAM: I am most grateful to every noble Lord who has spoken in this debate, because we are collectively fulfilling what I regard as our main function, and especially with regard to this subject. I think that at least some noble Lords who have spoken seem to have overlooked the fact that the draft immigration rules on control of entry are merely draft rules. They certainly have not been finalised; and it was our express resolve that there should be no question of finality until after this subject had been debated in this House and in another place, so that we could take account of the views then expressed and expressed to-day, in (as it were) compiling the manual of guidance to the appellate authorities.
I was particularly grateful for the first three speeches. I was grateful for all of them, but particularly for the first three because, first of all, we heard an exposition of the case by the noble Lord, Lord Brooke of Cumnor, a former Home Secretary. Then we had an extremely valuable speech from the noble and learned Viscount, Lord Dilhorne, a former Lord Chancellor, who comforted me by saying that he was not wedded to his noble friend's words; and then we had my noble friend Lord Mitchison saying that he disagreed with both of them. I have the feeling that when we have a former Home Secretary and two distinguished lawyers at variance, there may be a chance for ordinary chaps like myself to come into my own. I was to that extent comforted.
I should like first, if I can, to deal with one or two particular points that have been raised, and then to come to the general issue. But I would remind your Lordships that what we are considering—and it is all that we are considering—
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at the moment is whether we should insert in the Bill, in relation to discretion, that it "has been exercised unreasonably", instead of the words we have in the Bill now, which are that it "should have been exercised differently". That, and that alone, is what we are talking about, and I propose, with your Lordships' agreement, to talk about just that. In his last speech the noble Lord, Lord Brooke, referred to one or two particular cases, and again to the Canadian, Rockwell. I thought he was a United States citizen—I am not sure which; but at any rate he was a Nazi.
LORD BROOKE OF CUMNOR: I said that he was an American, but I was asking the Government what would happen if a Canadian Rockwell were to turn up.
LORD STONHAM: That is much easier, because if there ware a Canadian Rockwell we should be able to exclude him. Of course we should. I would remind the noble Lord, Lord Brooke, that in 1962 his Party put no power in the hands of the Secretary of State to exclude on political grounds, but we are suggesting that we should have it. So I think that is a fairly conclusive answer on that point.
VISCOUNT DILHORNE: Will the noble Lord forgive my interrupting him? Perhaps he would go on to tell us this: if the Home Secretary has power to exclude such a man, would there be an appeal from the Secretary of State's decision to an adjudicator or to the Tribunal; and would they have a power to admit in the exercise of their discretion?
LORD STONHAM: I was just coming on to that point, because that was the point raised by the noble Lord, Lord Elton, who said that political decisions—and this would be a political decision—should be left to a Minister. Under this Bill as we have framed it that will be so, because there are two points here. In political cases of aliens, the appellate authorities will have only an advisory role. The Secretary of State will be able to make a rule keeping out, as I said in my opening speech, alien scientologists, or agitators of different kinds. The second point is that this question does not really arise with Commonwealth citizens, as distinct from aliens, although in this

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respect the Bill concerns only Commonwealth citizens, because with Commonwealth citizens there is no power to refuse them entry on political grounds. So in fact this covers both points. I hope the noble Lord will study what I have said, because I have very carefully thought about what he said.
LORD BROOKE OF CUMNOR: The noble Lord is getting us confused. Within the space of a minute and a half he first of all said that this Government have taken powers to exclude Commonwealth citizens on political grounds, and then a moment later he said that there is no power to exclude Commonwealth citizens on political grounds. It must be one or the other.
LORD STONHAM: I am of course talking about the entitled Commonwealth citizens, whom we are discussing under this Bill. I have not contradicted myself in that. If the noble Lord will study my first speech and what I said just now, I think he will find that there is no contradiction.
VISCOUNT DILHORNE: I am not trying to be tiresome or awkward. I distinctly thought that in this speech the noble Lord contradicted himself on that issue. I may be quite wrong; I may have done him injustice. But I should be grateful if he will state what the position is quite clearly so that there can be no confusion.
LORD STONHAM: Certainly. I shall depart from my general rule and will read tomorrow what I said yesterday.
I should like now to deal with the drug addict case. The noble Lord, Lord Brooke, said that there should be power to deport a drug addict where the Secretary of State thinks this right; that, notwithstanding what the appellate authorities, think, they should not be able to overrule what the Secretary of State says. I put it to the noble Lord that, unless his Amendment (No. 9) is carried, there is no power to deport a Commonwealth citizen unless a court so recommends (and if it does so recommend, the appellate authorities have no function), or unless he is in breach of conditions. So the noble Lord's point does not arise unless his own Amendment is carried. His
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Amendment (No. 9) would insert in Clause 16 of the Bill the words,
"or if he deems it conducive to the public good to make a deportation order against a Commonwealth citizen".
LORD BROOKE OF CUMNOR: I am afraid that I must confess to blameworthiness for confusing your Lordships. I think that I spoke mistakenly about a Commonwealth citizen being a drug addict as an example under this Bill. A fairer example perhaps, is that of an alien who is a drug addict and on whom the Home Secretary makes a deportation order on the ground that his presence here is not conducive to the public good. Such an order, clearly, can be appealed against; and although I should have thought that the decision to exclude drug addicts was a matter of great concern to Parliament (and one on which the Home Secretary should be answerable to Parliament) nevertheless, as I read the Bill the appellate authorities could set aside the Home Secretary's decision in a case like that, allow an appeal and enable the alien drug addict to remain here.
LORD STONHAM: I know the case the noble Lord has in mind as an example: an alien man, now dead. It is not possible for me to assent in a particular case because I should have to look at it in the changed circumstances that we now propose. I am bound to say that so far as an alien, as distinct from a Commonwealth citizen, is concerned, a very important thing would be the conditions under which he was living in the country; because aliens do not come in as of right. Normally they come in first for 12 months. What we could do would entirely depend on the particular alien drug addict.
LORD BROOKE OF CUMNOR: Some come in via Ireland.
LORD STONHAM: Ireland is blamed for so much. I shall not join in that attribution. But may I say, before I leave the matter of drug addicts, that if the Secretary of State decides to deport a drug addict whose deportation after conviction for an offence is recommended by a court his decision then cannot be overruled. If deportation is not so recommended, the Secretary of State has no power to deport. That, as I understand it, is the position. There is one other particular point.
LORD DERWENT: I am sorry to interrupt the noble Lord. I do not understand what he is saying about drug addicts. A drug addict would not appear in front of a court.
LORD STONHAM: I am not clear what the noble Lord means. We are talking about deportation, or possible deportation, and not about whether or not a man has committed a drug offence. The case cited by the noble Lord, Lord Brooke, was of an addict; and the noble Lord himself rightly said addiction is not a criminal offence. We are assuming, therefore, that someone who has not committed a criminal offence is nevertheless, for a different reason, brought before the court.
My noble friend Lord Walston (I will deal later with the main part of his speech) suggested a drafting Amendment. There has been sufficient time for me to consult the draftsmen—with whom I never disagree. I hope, therefore, that he will accept that his proposal that on page 5, line 37, at the bottom of the page should read:
"(a) shall allow the appeal—

(i) if he considers that the decision or action …; or

(ii) where … by the Secretary of State or an officer he considers that …"

and so on. The noble Lord is wrong in his interpretation. The words, "if he considers" must govern sub-paragraph (ii) as well as sub-paragraph (i): if they were inside (i) or (ii) they would not make sense. I must confess that I am accepting what the draftsmen have said. I only hope that when my noble friend reads this it will also make sense to him.
I think the main point made by the noble and learned Viscount, Lord Dilhorne—it is a very important point—was the possibility (as he put it, the "likelihood of inconsistency") of interpretation or decision among adjudicators. The fact is, of course, that every decision by an adjudicator will be open to review by at least one member, a legally qualified member, of the Tribunal on an application for leave to appeal; and the Tribunal will exercise the same degree of control over adjudicators as any appellate court does over a court of first instance.
VISCOUNT DILHORNE: I am sorry to interrupt again but this again comes back to the point that appellate courts work in accordance with certain well-defined rules. Discretion is very difficult.
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It may turn on very small limits. It will be impossible to provide for uniformity by bringing particular cases up to the Tribunal and leaving others down below. I do not see how it is going to work.
LORD STONHAM: That is just the point I was coming to, and it is very important. I say again that the Tribunal will exercise the same degree of control over adjudicators as any appellate court does over a court of first instance through general guidance contained in its judgments and perhaps also through practice directions. Leaving aside the question we are now discussing, we are all aware of the apparent difference between judges on matters of sentencing and of the great lengths to which the Lord Chief Justice and others go to try to reduce those differences. My own view is that if you regard the adjudicators as the court of first instance there is likely to be very much less disparity in their decisions than we find, generally speaking, in the courts. But the fact is, as I said when I began my speech, that we have not yet decided on the immigration rules on control after entry. What is being said in this debate will be carefully studied and will influence what we finally decide to do. The two White Papers (No. 3951, relating to Commonwealth citizens, and No. 3952, relating to aliens) set out in draft form the rules governing variation or revocation of conditions of entry and rules relating to deportation. The rules contained in these White Papers will be immigration rules as defined in Clause 22(2) of the Bill. They will consequently be applied by the appellate authorities, that is, the Immigration Appeal Tribunals and the adjudicators, in deciding whether a decision taken in the Home Office should be upheld or set aside on appeal. The White Papers accordingly contained various references to the appeal system provided for in the Bill which will not be applicable until that system has come into operation. I am talking about the statutory appeal system and not the extra-statutory system which will be introduced in the intervening period.
The two White Papers I have mentioned summarise the current practice of the Home Office in the exercise of the powers of variation or revocation of conditions of entry and deportation as conferred by the Commonwealth Immigrants Act and Aliens Orders. They will, of

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course, have to be republished in their final form with, I expect, amendments which take account of the points which have been made in Parliament and elsewhere. I think that is of very great benefit to our discussions, because the noble and learned Viscount, Lord Dilhorne, the noble Lord, Lord Brooke of Cumnor, and one or two other noble Lords mentioned the absence of guidance, and there will be guidance in these regulations.
The noble Earl, Lord Mansfield, asked me, as it were, to take this away and have another look at it. As the Committee knows, I am always willing to look at things again to see whether we can come closer to agreement. But the point here is whether the words, "should have been exercised differently", with sufficient safeguards, properly convey the Government's intentions. I must come back to what was said by my noble friend Lord Walston and by the noble Lord, Lord Foot, on this subject. Lord Walston described what happens; that it is really the decision of an immigration officer. There are about 800 immigration officers and although, as I said, the number of discretionary cases are important, nevertheless they are small relatively.
The noble Lord, Lord Brooke of Cumnor, will know that most of the cases referred for decision by Ministers are discretionary cases; that they are numerous and can occupy the time of one Minister. There is the possibility of 800 different points of view, subject always to the rules. Immigration officers work within the rules and therefore you do not get very great differences. As was said by my noble friend, and by the noble Lord, Lord Foot, from the immigration officer you go to the adjudicator, the court of first instance, who, we propose, should make an independent judgment on his view of the facts before him and how, in his view, the discretion should have been exercised.
That is what we want to happen; that is what we think is right. That is what I believe the Committee as a whole would think right, subject only to the points which have been raised—not only the judicial points but also the political and other points—to see whether there are sufficient safeguards to ensure that we are not entrusting to an outside body
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matters which ought to be only within the control of Parliament. That is really the crux of the matter. Frankly, I think that the words we have in the Bill express what we want to do very much better than the words proposed by the noble Lord, Lord Brooke of Cumnor. The noble Lord said that he is not wedded to those words. In fact, nobody is wedded to that form of words.
I am prepared to look at these words again—I cannot accept what the noble Lord said—to see whether we can do better, subject only to the proviso that the system which I have described and the exercise of the supervision, as it were, of decisions on discretion should be in the manner we intend and we think right. If the noble Lord feels sufficiently confident (not that I can necessarily meet his point of view; I cannot be committed to that) that I will look at it and do my best, I will leave the matter to him.
LORD BROOKE OF CUMNOR: We have had more than an hour's debate on this Amendment and it would be straining the truth if I said that I was satisfied with the noble Lord's reply. I appreciate the care which he has taken in listening to a debate which has sometimes been confusing, even to its principal participants. I think that between us we have probably put on the Record the main considerations which matter here If I thought that my words were materially better than the words in the Bill, I should be disposed to press this Amendment; but I am not satisfied with my own wording and I think it would be more profitable if we could all look at this further to see whether there is a solution which might prove mutually acceptable.
The truth is that there is not a great deal between us and that it is a comparatively small number of cases with which we are concerned. Noble Lords on both sides of the Committee are anxious to achieve a system that will work satisfactorily and will be seen to work justly. I am not wholly satisfied with the words as they stand and the Government are not wholly satisfied with my alternative. I think that we should all try to see whether, in the light of all that has been said, we can improve the Bill. I am not disposed to press my own Amendment, and I beg leave to withdraw it.
Amendment, by leave, withdrawn.
Clause 8 agreed to.
Clause 9 [Special procedure in cases involving national security]:
4.8 p.m.
LORD STONHAM LORD STONHAM moved Amendment No. 5:
Page 6, line 42, leave out subsection (2).
The noble Lord said: This Amendment, and Amendment No. 6, pave the way for Amendment No. 7, which is the Amendment of substance. The first Amendment deletes the existing subsection (2) of Clause 9 and the second makes a consequential change in the wording of the present subsection (3) which will become subsection (2). The third Amendment, which is Amendment No. 6, adds a new subsection (3) which deals with the circumstances in which the appellate authorities may receive evidence in the absence of the appellant and his representatives. As to security cases which are dealt with under subsection (1) by a special panel of members of the Tribunal, paragraph (a) of the new subsection has the same effect as the present subsection (2): if the Secretary of State certifies that the disclosure to the appellant of any evidence would be contrary to the interests of national security, that evidence must be presented in the absence of the appellant and his representatives. But the new subsection (3) goes beyond the existing subsection (2) which it replaces, because paragraph (b) of the new subsection deals with cases in which it is alleged that a passport, entry certificate or employment voucher has been falsified. In such a case it is proposed that if the appellate authority decide that it would be contrary to the public interest to disclose to the party relying on the document in question the method by which the alleged forgery was detected, evidence about this method is to be given in the absence of the appellant and his representatives.
Noble Lords may ask why it should be in the public interest to conceal from an appellant the method by which it is alleged that a forgery has been detected, which may be an essential element in the case against him. The reason is that the provision of false documents for would-be immigrants is, unfortunately, a highly-organised trade in some Commonwealth countries and the Immigration Service's success in combating the forgers' efforts depends largely on the forgers' being kept in ignorance of defects in their produc
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tions. If these defects had to be specified in evidence given in the presence of appellants, the information would soon be passed back to the organisers of the trade, and it would not be long before the forgers improved their methods. It would not be sufficient to exclude just the Press and the public from the hearing because the appellant himself might often be an agent of the immigrant racketeers. In some instances the detection of a false document or false entry in a genuine document is based not on the presence but on the absence of certain safeguards or recognition signals that have deliberately been incorporated in the design of the authentic version. If the nature of these safeguards had to be disclosed, they would be valueless. There are also ways of detecting that a passport has been altered, usually by the substitution of a photograph, which could be countered if those ways of detection were known to the forgers.
It may be suggested that if the Home Office allege that, for example, an entry certificate is forged, we should apply for an adjournment of the appeal hearing so that we could obtain evidence from the entry certificate office overseas that no certificate had been issued to the appellant as claimed. But the delay involved in obtaining such evidence would obstruct the operation of the appeal system. In the Second Reading debate in another place, an Opposition Member drew attention to this problem and my honourable friend the Parliamentary Under-Secretary, Mr. Rees, said that it would be considered. We have considered it and have reached the conclusion that the only solution is to enable evidence of the kind in question to be received in the absence of the appellant and his representative. The Amendment makes the adoption of this procedure depend on the decision of the appellate authorities. Only if they agree, will they receive evidence in the absence of the appellant and his representative. There will be no question of concealing the fact that the decision under appeal was based on the recognition of a document as forged or falsified. Consequently, the appellant will be put on notice to produce such evidence, if any, of the genuineness of the document as is available to him.
The Government put forward this proposal with reluctance, but we believe

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that it provides the only means of preventing the appeal system from being turned to the advantage of the racketeers, those really dreadful people, who profit at the expense of prospective immigrants into this country. Anyone who goes to London Airport and sees the result of this will know how those of us who are concerned with this problem feel about the racketeers. I beg to move.
LORD BROOKE or CUMNOR: I welcome this group of Amendments. I think it is very desirable to make provision for this type of case, where a document is believed to be forged and it is not desirable to disclose how the forgery has been detected or how it can be proved to be a forgery. I have only one point of criticism and it is really a matter of presentation. Clause 9 is described in the margin as, Special procedure in cases involving national security. That might be taken to indicate that when we get to the new provisions inserted by this group of Amendments, which I think will come out as subsection (3)(b), they apply only in cases of national security, but I doubt whether it is intended that the question of a forged employment voucher should be classified under the heading of "cases of national security". It seems to me that it would be more desirable to insert paragraph (b) as a new clause, quite away from the heading of security. I suggest that this should be considered on Report. If that is not done, I think the side heading of the clause will need some alteration, if it is not to mislead.
LORD GIFFORD: I certainly appreciate the difficulties of the authorities in trying to detect forgery. Obviously they are considerable, and racketeers do exist. But I am inclined to question the desirability of these Amendments. Let us be quite clear about it. Under these Amendments there will be cases where the sole reason given by the immigration officer for refusing entry is that a document—an entry certificate or passport or employment voucher—is forged. In those cases, if the appellate authorities so determine—and on what criteria they declare it is in the public interest I am not sure—the evidence can be given against this man in his absence, without his knowing what it is and without him or his adviser being able to challenge or cross-examine the witnesses who make the claim. The adjudicator will be able
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to say that on evidence he is not going to let the man see that his document is forged. That will be an effective end to the matter. In fact the immigration officer, who has a difficult job, may be right or wrong. Certainly I have known cases where, quite mistakenly, allegations of forged documents have been made and their authenticity has subsequently been explained. I would say that it would often be essential to challenge evidence given as to forgery.
My noble friend says that this, problem is so difficult that we have to make these Amendments, but by doing this we are counteracting a hallowed principle of my profession: that the facts are established by the giving of evidence which is open to challenge and question by the opposing party. It is quite beyond the bounds of those responsible for detecting forgeries to ensure that the. documents which they issue cannot be forged, or, if forgeries are made, that they can be easily detectable? Is it necessary, in order to make it more easy to win the battle against the racketeers, to make an exception to that principle which I have just enunciated and so in certain cases cause injustice to the individual by depriving him of the means of challenging evidence which has been given against him? On these grounds, I feel very reluctant to accept this Amendment without further question.
LORD STONHAM: I can well appreciate my noble friend's reluctance. As he said, this is against a hallowed principle of the legal profession which he adorns. I would say again that the Government take the step with reluctance, and I hope that I have said clearly why we have to do so. In some cases, for instance, the granting of an entry certificate just depends on a document being stamped. Clearly, if we have ways of ascertaining whether or not an entry stamp is genuine, it would be the height of folly, after two or three months' practice, to disclose how we know. We are not in this business to play. I am sure that my noble friend knows as well as I do that there are many thousands of immigrants, particularly from Asia, who are exploited by these racketeers, these criminals, who charge these poor people enormous sums to get them the papers and make the arrangements for them to come to this country.

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Last week I saw a middle-aged Indian woman, with five children, who had been at London Airport with those children for five days. She was alleged to be coming over as the wife of a man already here, and it was said that these were his children. This was one of the cases that I personally inquired into, and it was found that her documents were forged. I am sure that behind that story there is a criminal who has charged a great deal of money for the documents; who has subjected that woman and those children to the journey, with hope in their hearts that they would get away with it, only to be disappointed, because they must go back to their own country, perhaps financially ruined for life.
To one tiny extent, that sort of thing would in my view justify some very tiny infringement (if it is an infringement at all) of the hallowed principle to which my noble friend referred. But I would remind him that there are fair grounds for my saying that we are not infringing the principle at all, because the appellate authorities would receive evidence, in the absence of the appellant or his representative, only if they agreed. That is the judicial authority.
Furthermore, there will be no question of concealing from the appellant the fact that the decision not to admit was based on recognition that the document was forged or falsified. In the unlikely case—and I agree with my noble friend that it could happen—that the document was not forged or falsified, it would be up to the appellant to prove that the document was correct: not to prove that it was not a forgery, but to prove that the facts in the document were true—for instance, in the case of the lady to whom I referred, that she was the wife of someone resident in this country, and that the children who had come for admission were his children. These facts could be proved, and if they were proved, then those applicants would be admitted. So, while appreciating my noble friend's sentiments in this matter, I do not think he has any real cause for concern.
On the point raised by the noble Lord, Lord Brooke of Cumnor (and I thank him for his general welcome to the Amendment), I appreciate what he says, What we are proposing to do is to add to the side note the words, "or forgery of documents". I think that should cover
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the point. I hope your Lordships will accept the Amendment.
On Question, Amendment agreed to.
LORD STONHAM: I beg to move Amendment No. 6.
Amendment moved—
Page 7, line 6, after ("under") insert ("subsection (1) of")—(Lord Stonham.)
On Question, Amendment agreed to.
LORD STONHAM: I beg to move Amendment No. 7.
Amendment moved—
Page 7, line 6, at end insert—
(" ( ) If—

(a) in the case of an appeal which is dealt with in accordance with directions given under subsection (1) of this section, the Secretary of State certifies that the disclosure to the appellant of any matters relevant to the case would be contrary to the interests of national security; or

(b) in the case of any appeal under this Part of this Act in which it is alleged that a passport, entry certificate or employment voucher (or any part thereof or entry therein) on which a party relies is a forgery, the adjudicator or Tribunal hearing the appeal determines that the disclosure to that party of any matters relating to the method of detection would be contrary to the public interest,

those matters shall be presented to the adjudicator or Tribunal without being disclosed as aforesaid; and for the purposes of this subsection any part of the proceedings may take place in the absence of the appellant or that party, as the case may be, and of his representatives.")—(Lord Stonham.)
On Question, Amendment agreed to.
On Question, Whether Clause 9, as amended, shall stand part of the Bill?
4.26 p.m.
LORD BROOKE OF CUMNOR: I have an important question to ask relating to what is now subsection (3) of this clause, which will become subsection (2) when the Amendments have been incorporated in the Bill. If I understand subsection (3) aright, its ultimate effect is that the final decision will be given by the Secretary of State, though the appeal machinery will first have been open to an aggrieved person. That is to say, if national security is involved the Government are accepting the recommendation of the Wilson Committee that there should be appeal machinery available, but are reserving to themselves the final decision and stipulating that they

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will not necessarily be bound by the decision of the appellate authorities. That seems to me to be very wise.
What I want to ask the noble Lord is why the provision in what is now subsection (3) is to extend only to security cases, contrary to the recommendation in this case of the Wilson Committee. I do not want to quote again the whole of paragraph 143 of the Wilson Report, but in that paragraph the Committee drew attention to cases which
"arise from time to time in which the Home Secretary feels justified in excluding a person from this country, or requiring him to leave, on grounds that are essentially of a political nature—for example, that his presence here is or would be harmful to international relations, or offensive to public opinion".
The Wilson Committee recommended that in such cases there should be no appeal; at any rate, they said they would not criticise the Government if they decided that there should be no appeal, because, as they pointed out, these were political questions and should be settled according to the Home Secretary's discretion, subject to his responsibility to Parliament.
What the Government have done is very interesting, though it does not appear clearly on the face of the Bill. The Government are, under the draft Order in Council, conferring rights of appeal on aliens, thus achieving the ultimate result envisaged by the Wilson Committee in the case of aliens. I apologise for having to refer to the draft Order in Council, but I think this is the only point where I can bring in the matter in relation to the Bill and it does directly arise in connection with subsection (3) of this clause. Under paragraph 7 of the draft Order in Council the Government are taking special powers. by a provision closely similar to subsection (3) of Clause 9 of this Bill, to ensure that where an alien is concerned, and the Home Secretary's decision has been taken on grounds of a political nature, that decision will prevail even though the appellate authority may wish to grant the appeal against the Secretary of State's will. The Government are doing that in the case of aliens, but it is quite clear from Clause 9 that they are not extending it to Commonwealth citizens. For Commonwealth citizens, the Amendment that we have just agreed to deals with security cases; it does not in any way deal with political cases.
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This is another aspect of the matter that we were discussing earlier. I maintain that where a decision by the Home Secretary is essentially of a political character—for example, that a person's presence here is or would be harmful to international relations or offensive to public opinion—then the Home Secretary's decision should not be interfered with. By all means go through the appeal procedure; and let the Home Secretary reconsider the matter in the light of the appeal decisions. But he should not be bound to accept them, because these are matters of a political character, subject to the Home Secretary's discretion, and it is essentially true that the Home Secretary is directly answerable to Parliament, and that the final decision should be taken by someone directly answerable to Parliament. The Government are not implementing that part of the Wilson Committee's recommendation in paragraph 143, which relates to Commonwealth citizens, although they are implementing it in a roundabout way so far as aliens are concerned. The question I am asking is, "Why?"
LORD STONHAM: The noble Lord, Lord Brooke of Cumnor, has raised this point on subsection (3) of Clause 9, which relates to subsection (6) of Clause 8. It is a difficult position, because normally when we discuss these matters we refer to the position of aliens, and then go on to relate the position to citizens of the Commonwealth. They are not in the same position. The noble Lord perhaps recall a leading article in The Times of November 20 which asked whether political cases included requests for political asylum, or, indeed, decisions taken on the ground that an alien's character, conduct or associations made it un desirable to permit him to enter the United Kingdom. That is not the Government's interpretation of the phrase, "grounds of a political nature". Where a request for political asylum is rejected, the reason is that it is not borne out by the facts; and it is difficult to imagine circumstances in which a Home Secretary would decide to reject on political grounds a valid claim for asylum.
The kind of case the Wilson Committee had in mind, as an example of one decided on political grounds, not connected with international relations, Was

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that of a person whose presence here would be an offence to public opinion. They gave, for example, a prominent neo-Nazi. Another example might be the case of an alien seeking to work covertly in this country, in the interest of a foreign Power, in a way that was contrary to our national interest, although it could not be said to threaten national security. Such cases will fall within the scope of paragraph 59 of the draft instructions. That paragraph will also apply to a much greater number of cases, where the reason for the decision is a matter such as the alien's criminal record, which will have no political implications whatsoever.
These considerations, applicable to aliens, have little or no practical application in the case of Commonwealth immigrants. In the case of a Commonwealth citizen the effect of Clause 9 is that the special advisory procedure can be invoked only where the decision has been taken on security grounds. I believe that is the noble Lord's understanding. This difference in the treatment of Commonwealth citizens and the treatment of aliens is based on the fact that whereas under the present law the Secretary of State has power to take action under the Aliens Order against an alien on any ground relating to the public interest, the grounds on which he may take action with regard to Commonwealth citizens are much more closely circumscribed.
As to refusal of admission of a Commonwealth citizen, the fact is that certain important categories—returning residents, wives, children under 16 accompanying or joining both parents—can be refused entry only if subject to a deportation order. Most other categories—voucher holders, students, persons able to support themselves and their dependants without working—can be refused admission, subject to a deportation order, or on medical or security grounds, only if their admission would be, in the opinion of the Secretary of State, contrary to the interest of national security, or because of their criminal records. Thus, the position is that there is no power on political grounds—or indeed on grounds of personal unacceptability of any kind—to refuse admission to the great majority of Commonwealth citizens who come here. This is why this particular
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clause of the Bill is devoted to the question of refusal on admission on security grounds.
LORD BROOKE OF CUMNOR: I was not seeking to amend the Bill; I was asking for information. I am grateful to the noble Lord for what he has said. I hope, however, that the Government will open their eyes to the possibility of the same situation arising with individual Commonwealth citizens as we know has arisen over the years with aliens. We should, I think, in general seek to exclude from this country an alien whose purpose in coming here appeared to be to plot to subvert the Constitution of another country. But it is not only aliens who may do that; it is Commonwealth citizens, too. The Commonwealth is not the same unitary body that it was in old days. I can imagine extremely awkward situations arising if a Commonwealth citizen who was known to be travelling around the world seeking help for a plot to subvert the Constitution of another Commonwealth country, presented himself for admission to this country, or indeed was found to be within this country already. I believe that his continued presence here would be offensive to public opinion.
I realise that under the law as it stands there will be no power to deport him unless he has committed a criminal offence here, but the question may arise whether he should be admitted. We might know all about him; we might know exactly the reason why he was coming here, and if he was an alien it would be possible to exclude him. I think the noble Lord is saying if he was a Commonwealth citizen the Government would not wish to exclude him. I think we definitely should have power to exclude such a man, but I certainly would not deprive such a person of the right of appeal. I am only saying that in my view the final decision should be with the Secretary of State. Perhaps the noble Lord will think over what I have said. I am not seeking to make difficulties for him, but only to do what my experience in the Home Office indicated to me was desirable; that is to say, encourage the looking ahead to situations that might arise and for which it is desirable that the law should be suitably moulded. I am certainly not wishing to object to this clause in any way, but simply to raise this further point.
LORD STONHAM: I will certainly look at what. the noble Lord has said. Obviously we must look ahead on these matters, and it would be folly to suggest that in no circumstances would it ever arise that a Commonwealth citizen of the type he described would not be very welcome in this country.
Clause 9, as amended, agreed to.
Clause 10 agreed to.
Clause 11 [Rules of procedure]:
4.40 p.m.
On Question, Whether Clause 11 shall stand part of the Bill?
LORD BROOKE OF CUMNOR: I have one small point to raise on Clause 11 which relates to the making of rules. If I understand the Bill aright, Clause 6(1)(b) provides for the making of regulations which will ensure that a statement of the reasons for the Secretary of State's decision or action shall be given. That is entirely reasonable because it would be difficult for the appellate authority to consider meaningfully an appeal against a decision of the Secretary of State if the Secretary of State had not had to give any reasons for it. I should have thought it was also desirable that both the adjudicator and the Tribunal should be required to give reasons for their decisions. I therefore expected to find that that matter would be listed among the various subjects on which rules may be made under Clause 11. I appreciate that Clause 11 is comprehensively drawn and would not exclude the making of rules of that kind. But perhaps the noble Lord, Lord Stonham, would be good enough to look into this matter to see whether it is made sufficiently clear that the adjudicators and the Tribunal would have to give reasons for their decision. It is of course particularly important in the case of the adjudicators, because if there is an appeal from the adjudicator to the Tribunal the Tribunal will want to know the reasons why the adjudicator decided as he did.
LORD GIFFORD: May I also raise a couple of points on Clause 11? It is clause which appears to require some clarification in that it is very generally drafted. It says in subsection (1) that the Secretary of State may make rules of procedure, and in subsection (2) that the rules may in particular make provision for the various
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matters which are set out. Having read the debate on the passage of the Bill in another place, it is very clear to me that the Government have given a commitment, which I welcome, that the procedures of the adjudicators amid the Tribunal will be brought within the scope of the Tribunals and Inquiries Act 1958. So far as rules of procedure are concerned, I am quite satisfied that those will certainly be fair and proper.
There are, however, two matters contained in Clause 11(2) which seem to go rather further than mere rules pf procedure. The first is in Clause 11(2)(a), which refers to the time within which appeals are to be brought. Of course, to be outside the time limit, when a time limit is laid down, is to lose your right of appeal altogether. I hope that the Government when framing these rules will make sure that they are generously drawn. In the case of a person refused entry at an airport I can see that no doubt a small time limit would be perfectly adequate. But the matter is quite otherwise when a man is refused an entry certificate, and under the proposed Amendment to the Bill this will become a matter of considerable importance. It might also be perfectly proper for a longer time limit to be given in the case of a person who wishes to appeal against the imposition of E. condition, because he, after all, will be in the country and there is no question of his being speedily sent away. I do not know whether my noble friend can give some indication of the kind of time limit which is going to apply, but certainly I hope he can assure us that the question of limitation for the bringing of appeals will be sympathetically and generously considered.
The other matter I wish to raise concerns Clause 11(2)(e), which refer; to the mode and more particularly the burden of proof which is operative before these appellate authorities. The burden of proof seems to be something which is a very grave matter to be left merely to rules of procedure. I notice that this matter was raised in Committee in another place and the Under-Secretary of State indicated that in the case of a person holding an entry certificate the burden of proof, as the Wilson Committee recommended, should be on the Home Office to prove that his entry certificate was not good enough. But, apart from that, I

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think the Under-Secretary of State left the matter open and said that he would try to look into it. Appeals might be brought in all kinds of cases—returning residents, bona fide visitors, bona fide students—and if on the question of who is to satisfy whom of his case the burden of proof is to be left to rules of procedure, I hope we can have some indication from my noble friend of the approach the Government will bring to bear on that problem.
LORD FOOT: Before the noble Lord replies, may I add a word to what the noble Lord, Lord Gifford, was saying? One matter that concerns me also (perhaps the noble Lord, Lord Stonham, can assist upon this) is that rules can be made as to the admissibility of evidence. I am concerned, as the noble Lord is, about rules being made by the Secretary of State concerning the burden of proof; but I think that the question of whether the Secretary of State ought to be able to make rules about the admissibility of evidence also requires investigation. I should have thought that both these matters are adequately covered by the general law of the country. Rules of evidence are, after all, fairly well defined. We have our clear rules about the burden of proof in criminal and in civil matters. What I should like to know from the noble Lord is this. Why has it been thought necessary to insert paragraph (e) giving this power to the Secretary of State?
4.46 p.m.
LORD STONHAM: As my noble friend Lord Gifford pointed out, the provisions of the Tribunals and Inquiries Act 1958 will be applied to this Bill by Order. That really answers the question put to me by the noble Lord, Lord Brooke of Cumnor, because it will mean that the appellate authorities will have to give reasons for their decision. So I hope that that point is satisfactorily cleared up. May I, however, before dealing with the other points which have been raised, say something about the general position? We have not made these rules yet. It would have been quite wrong to prepare complex rules of this kind without my right honourable friend having the advantage of hearing the views expressed in Parliament on this subject. All the points made will
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of course be considered before the rules are drafted. They are subject to the Negative Resolution procedure; but, when the rules are made, if they are not regarded as satisfactory then they can be the subject of debate in this House and further criticisms can be made of any which are not regarded as satisfactory.
The Home Secretary will also consult the Council on Tribunals about the rules while they are in draft; that is, before we have the opportunity of seeing them in their final form as the Secretary of State submits them to Parliament. And consultations with the Council on Tribunals will be mandatory when an Order is made bringing the appellate authorities within the scope of the 1958 Act, as I mentioned is our intention. As to the way in which the Secretary of State will exercise his rule-making powers, I can say that in general he accepts the Wilson Committee's recommendations in paragraphs 158 to 177 of their Report. In those paragraphs they give a broad outline of the kind of procedure which the Committee thought appropriate. But, for reasons I have just given, I cannot enter into any commitment about the details of the procedure at this stage. In fact, in the process of preparing draft rules reasons may be found for departing at some point from the Wilson Committee's suggestions, so anything I say now is subject to those general remarks.
However, on the question asked by my noble friend Lord Gifford about the time allowed for appeal, I would mention that the Wilson Committee envisaged notice of appeal against refusal of permission being given orally to an immigration officer before departure. In other types of case, or in cases of refusal of admission where the person concerned appealed after the removal, notice might be required to be given in writing within a certain time limit—perhaps 14 days if the appellant was here in this country, or 28 days if he was overseas. An application to an adjudicator for leave to appeal to the Tribunal ought, the Committee thought, to be made and decided forthwith. Those are the suggestions made on this point by the Wilson Committee, and they form the basis for our consideration.
On the question of the burden of proof, our intention in general is to apply the

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usual legal proceeding that the burden of proving a positive assertion lies with the party who asserts it. The consequence of applying this rule to immigration appeals will be in some cases to put the burden of proof on the immigrant and in other cases to put the burden of proof on the Home Office. For example, where admission is refused on the grounds that the appellant is not, as he claims, the child, or it may be the father, of someone resident in this country, or is not the age he claims to be, or that he does not intend to follow the course of study that he says he has come to pursue, it will be for the appellant to establish the truth of his claim. He will not be able just to assert it and call on the Home Office to disprove it. On the other hand. if the Home Office asserts that a Commonwealth citizen has in the past been convicted of an extradition crime, or is the subject of a deportation order, or that it is undesirable for medical reasons to admit him, the Home Office will have to adduce evidence to support our allegations. The burden of proof will be on us.
There will be cases where it is right to depart from this principle. One example is contained in paragraph 167 of the Wilson Committee's Report, where it says:
" Where the appellant is seeking admission and holds a current entry certificate or visa the burden of proof shall always rest on the Home Office".
In the process of drafting rules other examples may come to notice which may require a special provision. I would say again that the list is not closed. We have not yet made up our minds. There is still time.
On the question raised by the noble Lord, Lord Foot, as to the admissibility of evidence, the reason for having in the rules express provision on this subject is to prevent the ordinary rules of evidence—for example, the rule precluding hearsay evidence—from applying to proceedings under the Bill. This, again, is in accordance with the Wilson Committee's recommendation and also with the recommendation of the Franks Committee on Tribunals and Inquiries. In a sentence, the answer to the noble Lord's question is that the range of evidence admissible in these circumstances would be wider than it would be in an ordinary
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court. I hope that covers the points raised.
LORD BROOKE OF CUMNOR: I am grateful to the noble Lord for his speech so far as he was replying to me. I appreciate the point about the Council on Tribunals requiring a statement of reasons to be given. Nevertheless, it seems to me to give a slightly unbalanced appearance to this Bill that Clause 6 contains specific words about the statement of reasons when the decision is taken by the Home Secretary, and there is no corresponding reference in Clause 11 to a statement of reasons when the decision is taken by the appellate authority. I rather hope that it can be included in Clause 11.
LORD STONHAM: As I unde7stand it, the noble Lord accepts what I say that they will be required to make a statement of reasons, but he thinks it ought to be in Clause 11 as well. I will look at that again.
LORD GIFFORD: I am grateful to my noble friend for his exposition and will not press him further except to say this: if the Amendments which are proposed later in the Bill are accepted and it becomes virtually mandatory for someone to have an entry certificate, 14 or even 28 days may well not be enough for a man who is notified in a mountain village by post that he will not get an entry certificate, and I am sure this point will be borne in mind.
Clause 11 agreed to.
Clauses 12 to 14 agreed to.
4.56 p.m.
LORD BROOKE OF CUMNOR LORD BROOKE OF CUMNOR moved Amendment No. 8.
After Clause 14 insert the following new clause:
Rights of appeal in respect of passports
" .—(1) Her Majesty may by Order in Council make such provision for appeals in connection with the powers for the time being exercisable in respect of the issue and renewal of passports to, and withdrawal of passports from, citizens of the United Kingdom and Colonies as appears to Her Majesty to be appropriate.
(2) An Order made by virtue of this section may provide for appeals under the Order to lie to the appellate authorities constituted for the purposes of this Part of this Act and may apply any of the provisions of this Act for the purposes of the Order subject to such modifications as may he specified therein."
The noble Lord said: This is a matter of considerable substance but I think I can deal with it briefly and concisely. I raised the matter on Second Reading and suggested then that the Government were discriminating against British residents in that they were providing by this Bill a right of appeal not only for Commonwealth citizens but for aliens against a decision to exclude them from the United Kingdom or to deport them from the United Kingdom, but were granting no corresponding right of appeal to a resident in this country who was refused a passport.
I think most of us at some time or other have lightly supposed that we had a right to a passport when we applied for it and paid the requisite fee. But that is not so. There is no duty on the Foreign Secretary to issue us with a passport; it is a prerogative act. Therefore it seems to me that Parliament ought not to let this Bill go through without further examining whether we ought not to provide the same kind of safeguard to a British resident in the matter of an appeal as we are providing here for Commonwealth citizens and aliens seeking to come to this country. In that debate the noble Lord, Lord Stonham, was good enough to say that he would bring the point to the notice of his right honourable friend the Foreign Secretary.
Perhaps I can express the case as succinctly and forcibly as it can be expressed by quoting from a leading article which appeared in The Times on May 14, 1968—that is, just a year ago. That leading article said:
" Entitlement to travel abroad is not a right but a privilege extended purely at the discretion of a Minister or his civil servants. The Government have accepted in principle the recommendation to introduce an appellate system into the control of aliens and Commonwealth citizens. The citizens of this country should enjoy at least as much protection from arbitrary interference with their movements as is accorded to aliens and immigrants."
I know that it is possible to leave this country without a passport, but generally speaking it is not possible to enter any other country without a passport, so although the British Government, when they refuse a passport, can truthfully say that they are not imposing an absolute bar on the person leaving, nevertheless they are making it extraordinarily difficult
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for that man or woman to enter any other country. Therefore it is virtually a prohibition on travel.
When I tabled these Amendments I was conscious that I was dragging something into this Bill which was some way outside the Long Title. Indeed, my subsequent Amendments, Nos. 13 and 26, are designed formally to put that right. Nevertheless, I never had any intention of pressing the Amendments because it seemed to me it would be straining the Bill too far. Fortunately, the Government have evidently considered the matter further since then. I tabled these Amendments on March 27, and just four weeks later a Written Answer was given in another place which seems to me to be very relevant to the subject. If the noble Lord. Lord Stonham, can further explain what it means, I hope that I shall be satisfied and be able to withdraw these Amendments with satisfaction and honour to all concerned.
In that Written Answer Mr. Whitlock, Parliamentary Under-Secretary at the Foreign and Commonwealth Office, said:
" My right hon. Friend has decided to set up an advisory committee to which cases of persons who appeal against a decision to deny them passports would be referred. There will be early consultations through the usual channels about membership of this committee."—[OFFICIAL, REPORT. Commons. 25/4/69, col. 141.]
If I understand that aright, it means that the Government have accepted the principle of what I was contending for. I hope that the noble Lord will be able to explain a little further what is proposed. I am very willing to accept that, provided there is an appeal, though it need not necessarily be an appeal to the appellate authorities designated in this Bill. What I am concerned about is that Parliament should not pass this legislation, giving statutory rights of appeal to Commonwealth citizens and aliens who wish to come here, while doing nothing comparable to protect the appeal rights of British citizens who desire to travel abroad. I beg to move.
5.3 p.m.
LORD STONHAM: My Lords, the noble Lord, Lord Brooke of Cumnor is quite right. The Answer which my honourable friend the Under-Secretary for Foreign and Commonwealth Affairs, Mr. Whitlock, gave in another place does

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mean that the Government accept in principle what the noble Lord proposes. We believe that the way we have dealt with it is much more appropriate, and better than adopting the Amendment that we are now discussing. The apparent purpose of the noble Lord's Amendments is to enable provision to be made by Order in Council for appeals against the refusal of United Kingdom passports to be heard by the 'appellate authorities established under Part I of the Bill.
As your Lordships are aware, United Kingdom passports are issued on behalf of the Foreign Secretary, under the Royal Prerogative, to anyone who qualifies for such a passport on nationality grounds, subject to certain limited exceptions. These exceptions relate to people who are seeking to avoid criminal proceedings; minors whose removal from the country would be contrary to the wishes of their parents or guardians, or to the order of a court; people who have failed to meet undertakings to repay expenses previously incurred in repatriating them to this country; and people whose conduct has been such that Parliament would accept that it is necessary in the public interest to prevent them from travelling freely overseas. The only cases in which, in practice, much dispute arises are those in the last category. They are political cases.
Your Lordships will recall that on June 17 last year the Government announced the appointment of an independent Advisory Committee, under the chairmanship of Mr. Justice Cairns, to review cases in which the Commonwealth Secretary had decided Ito withdraw passport facilities from a United Kingdom citizen for reasons connected with his conduct in relation to the illegal regime in Southern Rhodesia. The Government have since been considering whether arrangements for independent review might be extended to other cases in which passport facilities are refused, and as a result the decision has been taken, and a reply has been given in another place. There will be early consultations through the usual channels about membership of this committee.
Meanwhile, I would advise your Lordships that the Committee under Mr. Justice Cairns will remain in being to deal with Rhodesian cases; and I would add that its membership since first appointment is unchanged. All other
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decisions to refuse or withdraw a United Kingdom passport will be subject to review by the new committee which it is proposed to set up if the applicant asks for review. The committee's recommendation will not be binding on the Foreign Secretary, but he will certainly attach full weight to their views. The Government believe that it is better to proceed in this way, by the appointment of a non-statutory advisory committee, than by conferring rights of appeal to the immigration appeal authorities. We expect that this advisory committee will be composed of Members of Parliament with ministerial experience, and that that will be better in this particular field than the administrative tribunals that are to be established to deal with immigration appeals.
There is no logical reason for extending the jurisdiction of such authorities outside the field of immigration control, which presents quite separate problems, and there is no logical reason for extending the scope of the Bill beyond that immigration field. Moreover, the cases of refusal of passport facilities over which dispute is likely to arise will be cases of refusal on political grounds, which will not raise justiciable issues of a kind suitable for decision by the administrative tribunals that are being established under the Bill. We think that it is most appropriate that the final decision on any question of denying passport facilities should be taken by the kind of committee I have described, all of whose members will have the right kind of experience for the kind of decision they will have to take.
I am very grateful to the noble Lord, Lord Brooke of Cumnor, for raising this point on Second Reading and again for tabling his Amendments to facilitate this discussion. I hope he will agree that we have met the principle that he has asked for and that it should provide, not in many cases—because there will not be many cases—but in some quite important cases, an important right.
LORD WALSTON: I wonder whether my noble friend could elucidate ore particular point. As I understood what he said just now—I did not take down the exact words—passports can be withheld in the case of certain persons where it is considered desirable that they should not

1079
leave the country; and he listed certain people in that category. I have always understood that passports did not confer a right to leave the country, but that in fact we would never seek to hold people in this country against their will unless there was some due legal process which required it. The simple question is: is it legal for a citizen of this country to leave this country without a passport if there is no other reason for holding him here; and is the passport not simply a means of facilitating his entry into other countries?
LORD STONHAM: My noble friend's understanding of the situation is exactly in accordance with mine. A citizen of this country does not have to go out with a passport. In this we are unlike many other countries.
LORD BROOKE OF CUMNOR: I greatly appreciate what the noble Lord has said in reply to my new clause. As for the most suitable form of appeal body, we will wait and see the form of the new committee which the Government have in mind. I, for one, never thought to argue that the ideal appellate machinery would be the appellate machinery in this Pill. He will appreciate, however, that if I had not related my new clause to this appeal machinery it would have been quite impossible to raise the subject on the Committee stage of the Bill.
LORD STONHAM: Congratulations!
LORD BROOKE OF CUMNOR: I venture to think that we have achieved something important and substantial here in the cause of personal liberty. The noble Lord. Lord Walston, is quite right in saying that our Government cannot keep citizens at home. But there is little point in leaving from a British seaport or airport if you do not carry a document that is going to get you into some other country; it is difficult to do anything except come back again. That is why a passport is so extremely important. To me, it seems strange that over all these years the absence of a right of appeal for a British resident denied a passport has received so little attention. I venture to think that there was a direct connection between my tabling this Amendment on March 27 and the Government coming un with an answer four weeks later. Anyhow, I greatly appre
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ciate the outcome and I beg leave to withdraw my suggested new clause.
Amendment, by leave, withdrawn.
Clause 15 agreed to.
Clause 16 [Power to deport Commonwealth citizens for breach of conditions of admission]:
5.12 p.m.
LORD BROOKE OF CUMNOR LORD BROOKE OF CUMNOR moved Amendment No. 9:
Page 10, line 7, after (" thereto ") insert (" or if he deems it to be conducive to the public good to make a deportation order against a Commonwealth citizen ")
The noble Lord said: I beg to move Amendment No. 9. This I can also do briefly in the light of our previous discussions, some of which have borne on this same point. Under the law as it now stands there is in the hands of the Home Secretary a power to deport an alien if he has been recommended for deportation by the court, or if the Home Secretary considers it to be conducive to the public good that he should go; and in the latter case the Home Secretary can act even though no offence has been committed and the matter has rot been considered in any court. There is a certain safeguard available for aliens who have been in this country for more than a certain minimum period of years, but certainly this power to make deportation orders against aliens on the ground that their presence is not conducive to the public good has been of value.
I welcome the fact that in future there is to be a statutory appeal procedure for an alien threatened with a deportation order. even though I think that the non-statutory arrangement by which he could in certain circumstances have his case considered by the Bow Street magistrate has worked satisfactorily; and I believe that the advice of the Bow Street magistrate has never been disregarded by the Home Secretary.
I should not have put down an Amendment of this kind to extend from aliens to Commonwealth citizens the power of deportation on grounds of presence not being conducive to public good, if there had not been the intention to set up a proper appeal procedure. But now that there is to be a proper appeal procedure, I venture to suggest to your Lordships

1081
that this is the time to bring Commonwealth citizens into the same position as aliens in relation to these deportation orders. I am sorry to go back on cases that we have mentioned already, but this is the simplest way of illustrating it. The drug addict is an exact example. I remember the case—it has been mentioned by the noble Lord, Lord Stonham, to-day—of an alien drug addict found in this country. If I remember rightly, he had not slipped through the immigration control, except to the extent that he managed to get into Ireland and had crossed from Ireland into this country, there being no immigration control on persons travelling between the Irish Republic and the United Kingdom. It was not, therefore, to anybody's discredit that he was here. He was found to be here, he was identified here and was known to be a drug addict. I took the view, as I think most Home Secretarties would, that we had enough drug addicts of our own here, and that it was not conducive to public good that we should, as it were, be providing hospitality to alien drug addicts, because as we all know this addiction is infectious or contagious, whichever is the appropriate adjective.
Had that person been a Commonwealth citizen there would have been no power to get rid of him. If this situation were to recur in the case of a Commonwealth citizen who by some means had slipped into this country, particularly if he had slipped in through Ireland, I cannot see that there would be any power to get rid of him unless he committed a criminal offence. There is no particular reason to suppose that he would have done so. The noble Lord, Lord Stonham, said that most of these people commit a criminal offence sooner or later, but the fact is that successive Home Secretaries of different Parties in different Governments have had to make a quite substantial use of this power to make a deportation order against an alien on the ground that his presence is not conducive to public good. Doubtless, if that man had committed an offence then it would have been easier to deal with him and it might not have been necessary to use that particular power. But that power has been used, and therefore it proves that there is a case for that power existing as regards aliens.
I am submitting to your Lordships that there should now be a power of that
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kind in respect of Commonwealth citizens. Under this Bill a Commonwealth citizen can be deported only if he has committed a criminal offence of a certain character or, I think I air right in saying, if he has disregarded his landing conditions. But there is no power at present, and there will be no power unless my Amendment is accepted, to remove a Commonwealth citizen on the simple but quite cogent ground that his presence here is offensive to public opinion. In the present state of the world it is no good saying that this is never likely to happen among Commonwealth citizens. We know that it can happen among Commonwealth citizens, although we hope less than among aliens. Nevertheless, it can happen, and I am suggesting to your Lordships that the Government should look ahead and, now that there is to be an effective appeal system, should take the same power in relation to Commonwealth citizens whose presence here may be offensive to public opinion as they already have in relation to aliens. I beg to move.
5.19 p.m.
LORD STONHAM: The Amendment which the noble Lord proposes would confer on the Home Secretary the power to deport any Commonwealth citizen except one who had been ordinaril3, resident in this country for five years, if the I-Tome Secretary considered it conducive to the public good to make a deportation order. I do not know whether the noble Lord intended it, but as the Amendment is drafted the power he proposes to give is not confined to Commonwealth citizens to whom Section 6 of the 1962 Act applies, but extends to any Commonwealth citizen who was born in the United Kingdom or who has any of the other connections with this country which under that section exempt a person from deportation. The noble Lord may not have had that intention but that is the effect of his Amendment, and it is extremely wide.
The power would apply where the Commonwealth citizen had been accepted for settlement (although Clause 16 in its present form applies only where a Commonwealth citizen is in breach of conditions of admission), and it would apply to someone with no criminal record—although hitherto the power to deport a Commonwealth citizen has been

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confined to cases of conviction for an offence punishable by imprisonment, coupled with a recommendation by the convicting court. I know the point which the noble Lord made in his speech just now, and in another speech on an earlier debate, when he asked us to look ahead. But from past experience we feel that the time is not yet. In regard to aliens, such an unrestricted power of deportation is already conferred by Article 20(2) of the Aliens Order 1953. An appeal against a decision to exercise the power proposed in the Amendment would lie under Clause 4(1)(a).
There are three reasons why it does not seem necessary or desirable for the Home Secretary to have the proposed new power of deportation of Commonwealth citizens. First, the conferment of so wide a discretionary power of deportation seems hardly consistent with the rights of admission to this country which Parliament gave to certain large categories of Commonwealth citizens in the Act of 1962 and preserved, with some minor modifications, in the Act of 1968. Second, the noble Lord has spoken of possibilities, but there is no clear evidence of a need for the proposed new power. Third. the taking of such a power in relation to Commonwealth citizens, without clear evidence of need, would unquestionably be resented and might be harmful to community relations.
Apart from some small categories, such as diplomats and members of allied forces, who are in varying degrees exempt from immigration control, any alien is liable to be refused leave to land in the United Kingdom if the Home Secretary decides that it is undesirable to permit him to enter. When the Aliens (Appeals) Order is in force any exercise of discretion involved in refusal of leave to land will be open to review by the appellate authorities; but the entry of aliens will remain a matter of discretion, and they will still have no rights of entry enforceable in the ordinary courts of law. Many categories of Commonwealth citizens, on the other hand, have statutory rights of admission.
For instance, the wife of a Commonwealth citizen resident here may not be refused admission unless she is subject to a deportation order: nor may a child under 16 of a Commonwealth citizen
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resident here, provided that the other parent, if alive, is also resident in this country. The same is true of a Commonwealth citizen who has established ordinary residence in this country and returns here within two years. A Commonwealth citizen who holds an employment voucher, or is coming to pursue a course of study at an educational institution, or has independent means of support may not be refused admission unless he is subject to a deportation order, or is inadmissible on medical grounds, on security grounds or by reason of his criminal record.
Thus, in contrast to aliens, there is no general power to keep out a Commonwealth citizen simply because the Home Secretary considers him " undesirable". Most Commonwealth citizens who come to the United Kingdom for more than a few months are entitled to admission as belonging to one of the categories mentioned above. During the period, whether limited or indefinite, for which he is admitted a Commonwealth citizen is at present free to remain in this country unless, on conviction of an offence punishable with imprisonment, a court recommends him for deportation and the Home Secretary decides to act on the recommendation.
To make the continued stay of any Commonwealth immigrant who has been here less than five years subject to the exercise of an unfettered discretionary power (although subject to appeal) hardly seems consistent with having conferred these statutory rights of admission on Commonwealth citizens. Take the case of a Commonwealth citizen, entitled to admission as, for example, a voucher-holder or a student, whose presence here the Home Secretary considered not to be conducive to the public good—perhaps because of a threat it posed to the maintenance of public order. If the Commonwealth citizen could not be refused admission on security grounds, on grounds of criminal record, on medical grounds or as being subject to an existing deportation order, he would have to be admitted at the port; but the Home Secretary could, either immediately or at any time up to five years thereafter, make a deportation order against him. Even under a system of appeal, it would be rather anomalous that grounds which could not justify refusal of entry on arrival at the port could be used to

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justify the expulsion of someone who had already established himself here. And if it is said that the purpose of the Amendment is to confer power to expel only those who have shown by their conduct on British soil that they are unfit to remain here, there still seems something of inconsistency in taking so limited a power; that is, a power which will not prevent the entry of people known to be undesirable but only enable a Home Secretary to expel them after they have entered and if they have done damage.
But the main argument, in the Government's view, against the Amendment must be that no need has been shown which might justify the taking of so wide a discretionary power to expel Commonwealth citizens. A small proportion of Commonwealth citizens admitted on a temporary basis have shown themselves ready to try to stay here in breach of the control, and this is the justification for Part II of the Bill, which will give power to deport for breach of conditions. But no such indication of need is apparent to justify the power proposed to be taken by this Amendment. Although on Second Reading the noble Lord, Lord Brooke of Cumnor mentioned the two aliens who have been referred to earlier in these debates and against whom he made deportation orders under Article 20(2)(b) of the Aliens Order 1953, he did not then refer, and he has not to-day. to any cases of Commonwealth citizens who might have merited deportation under the proposed new power, but only to the apparently hypothetical case of a Commonwealth citizen who might, like Rockwell, have come here to advocate Nazi doctrines. The Committee will no doubt agree that in this context it would be wrong to single out individuals for mention by name, but it can be said that since control was introduced in 1962, seven years ago, there have been very few Commonwealth citizens in regard to whom anyone has suggested that their conduct, although not resulting in a conviction for serious crime, was such as to justify deportation. There is no evidence that the public interest is being harmed by the presence in this country of any significant number of Commonwealth citizens who would seriously be considered for deportation under the proposed new power if it were available. Control over Commonwealth immigra
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tion was introduced because of concern about the number of immigrants entering rather than over the conduct of individuals.
The existence of any power to deport Commonwealth immigrants, even though confined to those who have offended against the criminal law or evaded immigration control, seems to be felt by some immigrants as implying that their status is only that of second-class citizens. There is likely to be a serious adverse reaction in the immigrant community against the conferment on the Home Secretary, even subject to a right of appeal, of power to expel any immigrant with less than five years' residence whose presence he considers not to be conducive to the public good—one who has not committed a crime for which he can be convicted in the courts and be deported in that way. Fears might well be aroused that such a power could be used against leaders of the immigrant communities for opposing Government policies, or even that the power might be used to repatriate immigrants on the ground that the reduction of the immigrant population was necessary in the public interest. However groundless such fears might be, the resulting alarm and controversy might do much harm to community relations.
The question we have to ask ourselves is: could it be justified to take the risk of giving rise to this kind of apprehension when the Home Office is unable to point to cases in the last 6½ years in which the Home Secretary would have been likely to exercise such a power if it had been available to him? I ventured to say on Second Reading that the proposal appeared to be a new facet of the Opposition's policy of assimilating—that is, bringing together—the treatment of aliens and Commonwealth citizens, and, in my view, it seems an unwarranted one. I am sorry to have to disagree with the noble Lord on this point, but certainly this is not a proposition that the Government can accept, and I hope he will not persist in his Amendment.
5.30 p.m.
LORD MOLSON: The Minister of State has made a closely reasoned speech which is dependent on two theses: first, that it is not necessary to legislate until cases arise showing that the lack of powers was a national misfortune; and,

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secondly, that there is no need to apply logical principles until it is shown that it is necessary to apply them all the way through. I am not aware of the official policy of the Opposition with regard to assimilating the treatment of aliens and Commonwealth immigrants but, speaking entirely for myself, I see not the slightest justification for continuing distinctions which I think have now completely ceased to have any validity. I see not the slightest reason why the principles that are applied to aliens should not be applied to Commonwealth immigrants. However, I very much hope that when the time comes—and the Government have promised this at some time in the future, though they have not specified a date—for the law relating to alien immigration to be put upon a permanent basis, there will be an assimilation of the general principles that apply in the case of both aliens and Commonwealth immigrants. I see no logic and no justice in the preservation of what I believe to be completely outdated distinctions.
From that I proceed to ask why it should be considered unreasonable, if the Home Secretary arrives at the conclusion that it is against the national interest that a particular Commonwealth immigrant should stay in this country, that he should be allowed the same reasonable exercise of Government discretion as is allowed in the case of an alien. It really is no answer to say that because, in the past, a case may not have arisen involving a Commonwealth immigrant—who may not have committed a crime, or may not have acted in such a way that it was possible to get him convicted of a crime, which is an entirely different matter—the Secretary of State should not have the same right to protect this country against an evil influence, simply because the person likely to exercise that influence happened to be a Commonwealth citizen, as he would be able to apply—and indeed would be under a duty to apply—if that individual were an alien.
Nor can I follow the logic of the Minister of State's argument when he said it is unreasonable that, because under this Bill there is no power to prevent a Commonwealth immigrant from coming in on the ground that his presence here would be likely to be harmful, a similar
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power should be exercised where the immigrant has come in and it is subsequently found that his presence is harmful. In the first place, it is obviously very much easier for the Home Office to be aware of the moral and harmful influence of a person who has for some time been resident in this country than in the case of someone resident, perhaps, in Africa or Asia who makes an application to come in. It is easier to arrive at a fair conclusion in the case of one who has been resident here than in the case of one who has not been resident here. Moreover, it might well be the case that a man's conduct while in his own home country would not justify the Home Secretary in exercising a discretion of that kind even if he possessed it. But when the man has come here, and perhaps come in contact with undesirable influences, possibly British influences or the influence of other immigrants—or he may have become associated with some organisation—it may well become desirable that he should be deported.
The Minister of State really cannot skate over the case mentioned by my noble friend Lord Brooke of Cumnor, of someone who, because he was likely to have a harmful influence in this country and because he was an American, could be refused permission to come here, or, after he had come here, could be deported. Had that individual been a Canadian instead of an American, that power would not have existed. When we are legislating we are considering the future as well as the past, and we really ought to apply logical principles.
The Minister of State began his speech by using the words, "not yet". He said that it is not yet necessary to move in this direction. Over the last 10, 15 or 20 years we have shown ourselves most reluctant to face the realities of the present situation. But if it is in any way gratifying to the Minister of State, I will say that I think the Conservative Government were more slow and reluctant to move in this way than the present Government have shown themselves to be. Also, I appreciate the moral integrity which this Government have shown when. in coming back in office, they have been convinced by experience of things they had refused to tolerate when they were in Opposition. The late Master of Balliol said that a man with an unchangeable

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mind is an unchangeable fool, and the same applies to political Parties. The whole of the speech of the Minister of State this afternoon has been based not upon the wise and empirical policy that has been followed by this Government over the last three or four years, but upon an old prejudice against introducing anything new into the law, and upon trying to preserve an entirely illogical distinction between evil persons who are alien by extraction, and evil persons who come from the Commonwealth.
LORD SOMERS: The terms of my noble friend's Amendment are,
"… if he deems it to be conducive to the public good …"
When a Commonwealth citizen is granted entry into this country, nobody can possibly tell what he is going to turn out to be like. I must remind your Lordships of a certain young student—I need not mention any names—who has now been in this country for, I think, two or three years, who has spent his entire time organising the more rebellious of the students of this country into public disorder of the worst possible variety, and who has openly confessed that he intends to go on doing so. To my mind, that is not "to the public good". Presumably, he has not done anything which could be called a criminal offence, but, nonetheless, his presence is doing our country a great deal of harm. Surely, following the very logical argument of my noble friend Lord Molson, the Home Secretary should have the ability to deport people of this variety.
THE EARL OF MANSFIELD: While entirely agreeing with the two noble Lords who have just spoken, I should like to put this further point to the noble Lord, Lord Stonham. I would ask him: is it, or is it not, a fact that there are certain countries of the Commonwealth, particularly some of the newer ones, who have already in existence regulations whereby they can expel from their shores members of other Commonwealth countries—sometimes of Great Britain, but very often of other Commonwealth countries and not from here—simply because their presence has proved, as my noble friend Lord Somers has said, inimical to the public weal? I see no reason why names should
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not be mentioned. Is there any reason why someone like Mr. Tariq Ali, who I understand has now virtually left these shores, should not have been deported "by the scruff of his neck" a great deal sooner as being an entirely unwanted, I will not say citizen but inhabitant of this country? And if other countries of the Commonwealth have this right, very justifiably, is there any reason why we should not take it to ourselves also in defence, both of our own citizens And of the great bulk of the Commonwealth citizens here, who are nearly all respectable?
LORD WALSTON: I am really deeply shocked at the restrictionist attitude which has been shown by the noble Lords who have just spoken, and in particular by their complete disregard of the importance of the Commonwealth. I will not go into the question of whether it is right for aliens to be deported on the grounds that their presence is not "conducive to the public good". Personally, I have certain doubts or that, but that is not under discussion at the moment. But to suggest that this arbitrary right of the Home Secretary should be extended to Commonwealth citizens, not because there has been any proof that the country has suffered from it in the past but merely because it is rather safer in case something might happen in the future, and on the analogy that it is being done with aliens and therefore why should not Commonwealth citizens be treated as aliens, is to me very shocking indeed.
Surely, it depends which side you start from. If you start from the belief that here we have a cosy, tight little island and we do not want anybody to come into it, but unfortunately we are forced by circumstances to open our door just a little to let a few selected people in though we do not really want them then naturally you take the view that the noble Lord, Lord Molson, and others have put forward. But if you take the view, as I think the majority of us do, that we want to preserve our tradition of allowing as many people from all countries, and in particular from the Commonwealth—and, after all, the Queen of England is also Head of the Commonwealth—to come into this country, then we must look at this from a different angle and say, "Let us have as many

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people into this country as we can possibly absorb and receive well and make good use of, but we accept the need—reluctantly, but we accept it—that some must be kept out."
That, I am happy to say, as I understand it, is the attitude of Her Majesty's Government. We welcome as many people into this country as possible, but we accept that there are some that have to he kept out. But the onus of proof for those who wish to keep people out must be to show that they are in fact undesirable and that they seriously harm the welfare of this country. No proof has been adduced, and I do not believe that any proof can be adduced. The question of Mr. Tariq Ali has been raised by the noble Earl. Frankly, I do not have such an exalted opinion of Mr. Tariq Ali as to believe that he is in any way a danger to this country, and I do not believe that this country is in any respect worse because he has spent two years here. I have no fear of such people.
I strongly urge the Government to stick to their present stand and to say that those Commonwealth citizens who are allowed in are allowed in with full rights and will be deported only if they actually contravene the laws of this land. Full provision is made for that, and that is fair enough. But to have them deported simply because it is felt, even by so eminent a person as the Home Secretary, that their presence here is not conducive to public welfare surely is running in the face of all the liberal traditions and the welcoming traditions of this country in which we believe. Not only that, but, as my noble friend so rightly said, it is making infinitely harder the problem of integrating the Commonwealth immigrants into this country; the problem of making them feel that, in spite of the restrictions we have been forced to place on them, they are still welcome here.
THE EARL OF MANSFIELD: The noble Lord, Lord Walston, has completely and deliberately misrepresented what has been said on this side of the Committee. He himself admits that we have got to keep out a certain, limited number of persons because they are undesirable. As my noble friend Lord Somers has said, no one knows when a Commonwealth person enters this coun
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try whether he is going to turn out to be desirable or not. Admittedly, there are only a very few who turn out to be undesirable, but surely it is logical that we should have the same right to expel these persons after a period of, so to speak, probation, as that we should keep them out from the word "Go".
In regard to the particular young man alluded to, I quite agree that he is not a danger to this country as a country, but do we wish to encourage the presence here of someone who admittedly indulges in revolutionary activities and who leads other students to riot, to assault our police, to damage public and private property and generally to make complete nuisances of themselves? If that is what the noble Lord opposite thinks ought to be the policy of Her Majesty's Government, I am sure that most citizens of this country would disagree with him.
BARONESS GAITSKELL: May I comment on the pious expressions of satisfaction of certain noble Lords opposite about the restriction of immigrants into this country? It is only to say that certain recent economic reports—very reliable ones—have stated that if the country is to go "all out", and if productivity is to be increased, in future years we shall need more immigrants and not fewer.
VISCOUNT MASSEREENE AND FERRARD: May I say, with due respect to the noble Baroness. that that is no argument against this Amendment? I am perfectly convinced that the vast majority of the members of the Commonwealth would be perfectly happy to see this Amendment passed and become law. No member of the Commonwealth wants the bad elements—and they are very few and far between; I imagine you could count the number of cases on your hand—to come into this country. Surely the paramount point here is "for the public good". It is quite illogical, as the noble Lord, Lord Molson, has said, that you should distinguish between an evil man who is an alien and an evil man who is a member of the Commonwealth. They are both evil. The fact that he is a member of the Commonweath is surely neither here nor there. I heartily support this Amendment. In my view, the arguments produced against it are not real arguments at all. I feel that the Government are taking an out-of-date attitude over it. The Commonwealth

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is now very different from what it used to be—and that is to put it very mildly. I think we must come up to date on the Commonwealth.
LORD WADE: I think it would be very unfortunate if the impression were created in this debate that Commonwealth citizens are treated very much more leniently than aliens. My impression is that in practice, whatever the law may be, aliens are treated, on the whole, rather more leniently than Commonwealth immigrants, particularly so far as entry is concerned. I wanted to emphasise that in case a quite incorrect impression is created. Secondly, I think we need to look with caution at anything in the way of the introduction of new arbitrary powers. One of the characteristics of authoritarian government is that a citizen who has been brought before the court on some ground and found not guilty of any offence is then immediately detained by some arbitrary power of the Government.
What I fear—I do not say that it will happen—is that a Commonwealth citizen might come here, as he would be perfectly entitled to do so, and that some Government in the future—not the present Government—might use this kind of power immediately to deport him for political reasons. The third reason for persuading me not to support this Amendment is a point made by the noble Lord, Lord Stonham. I am concerned about community relations. We must be careful not to introduce measures which no doubt some noble Lords think are very proper and right but which will create the impression that we do not trust the Commonwealth citizens who come here. I do not think this is necessary. I hope that the Amendment will not be carried.
LORD GIFFORD: I have been moved to speak on this Amendment by some of the speeches which have been made. I believe that this is a bad Amendment and that some of the speeches made in support are even worse. It seems to me that if ever there were in power a Government representative of the noble Lords opposite, then, from what we have heard this afternoon, the powers of this Amendment could well be used to institute a witch hunt against certain individuals who had committed no crime
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whatsoever but of whose political views certain noble Lords disapproved. I agree with the noble Lord, Lord Molson, when he says: "Let us assimilate the laws as to aliens and Commonwealth immigrants". But I would add: "Let us change the aliens law in this respect". This is a bad provision in a bad law—and I am referring now to the Aliens Act, which was passed at a time when the same atmosphere of illiberalism towards aliens was current as is now current in some quarters against Commonwealth immigrants. It is a bad provision and should certainly not be assimilated in any Act dealing with Commonwealth immigrants.
LORD HAWKE: I should like to ask the Minister a question arising out of this discussion. I am more concerned over another aspect of this matter. Gradually the world is deteriorating, and we are seeing the machine gun take the place of the ballot box for changing Governments. In that situation we shall find, sooner or later, Commonwealth citizens, ex-politicians in Commonwealth countries, wishing to come to this country. Can the Government lay down any conditions on their entry and stay?—conditions that, for example, they will not be allowed to plot in this country, to buy arms, to raise money and so on, in order to make a come-back and to destroy the Government that supplanted them in the Commonwealth countries? I believe that the Government have some sort of power over aliens. They can give asylum to an alien on condition that he does not indulge in these matters. It is essential, with the way the world is going at the moment, that we should have similar powers to deal with Commonwealth citizens.
5.55 p.m.
LORD BROOKE OF CUMNOR: I am grateful for the powerful support that I have had from all my noble friends who spoke on this Amendment. I could hardly have disagreed more with everything that the noble Lord, Lord Walston, said. This debate has shown up clearly the difference between the two sides of this House on many of these matters. There is a responsible attitude on this side which I am sorry to say is not shared by some of the Government supporters. I do not wish to raise further the temperature of this debate. I hope

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that it was clear that I took every precaution not to do so by the manner in which I moved the Amendment.
I rather suspected that the Government would adduce a number of reasons for resisting my Amendment; some good, some not so good. The noble Lord, Lord Stonham, and other noble Lords opposite have faithfully repeated the reasons given by the man who resisted the advice of his solicitors and insurance agents by saying that he saw no need to insure his house against fire because it had never been burned down. That seems to me to be an absolutely fatal way of carrying on the government of a country when you are charged with the responsibility of its law and order. As to the removal of the existing power in relation to aliens, the noble Lord, Lord Gifford, ventured to suggest that if this power was extended to Commonwealth citizens it would be used with malice and for undesirable political purposes. I can only say that the power to deport aliens on this ground has existed for many years, and I cannot recall a single case where there has been the slightest allegation that it has been misused or that an attempt has been made to misuse it by any Government for political purposes.
As I said, there has been for a number of years a non-statutory right for the person who is subject to a deportation order to go before the Bow Street Magistrate. I believe that in every case the Home Secretary has acted on the advice of the Bow Street Magistrate. In future, when this Bill comes into effect, there will be no non-statutory procedure but a statutory appeal procedure. If that statutory appeal procedure is not effective to prevent arbitrary and malicious decisions by future Home Secretaries, what are we spending our time on here to-day? There are cases which the noble Lord, Lord Stonham, did not mention where I am still convinced that we should be considering the need for powers of this sort. He said, for example, that we ought not to talk in terms of power to deport somebody on the grounds of their presence being not conducive to the public good when we had just let them into the country without challenge. But some of these people have not been let into this country; they have got in via Ireland. It is impossible to discuss these questions
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of immigration—as both Houses of Parliament found in 1962—without reference to the possibility of entry into the United Kingdom via the Republic of Ireland, thereby evading the scrutiny of an immigration officer. It seems to me that when we are drawing up legislation we should frankly envisage the possibility of someone thoroughly undesirable getting from the Commonwealth into Ireland and then being irremovable here unless he actually commits a criminal offence. Being a drug addict or engaged in a plot to subvert the Government of another Commonwealth country might well not bring him within the scope of the criminal law; yet I have no doubt at all that his presence would be offensive to public opinion.
Then there is another class of case, where something is discovered about a man after he has come into this country. It is not possible to know everything there is to know about an immigrant who comes into this country. It gives the Home Secretary considerable anxiety when it comes to his knowledge that there is in this country an immigrant who has been convicted of heinous murders abroad; but the fact was not known when he came in, and he is here. If he is a Commonwealth citizen, unless he actually is convicted of another serious crime he is irremovable.
The noble Lord, Lord Walston, said that he was deeply shocked by the restrictive attitude I take in such a case, but I feel responsibility for my fellow citizens. It is not conducive to the public good that, because of lack of knowledge, there should be people admitted here as innocent people who have committed murders in other countries. I would not dream of suggesting that such a man should be deported simply because he had served a term of imprisonment for murder in some other Commonwealth country; that would be wholly unfair, because he might have completely repented of his crime. Nevertheless, if he came to the notice of the police because of his behaviour, and there appeared to be grave reason to suspect that he was returning to his old criminal habits, I should think that a Home Secretary, responsible for law and order, ought to take note of that fact and take some action; in exactly the same way as when in this country a murderer, sentenced to life imprisonment and released on licence,

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behaves in such a way as to give cause for suspicion that he may be about to commit a further grave crime it is the duty of the Home Secretary to consider whether his licence should be revoked and he be brought back to prison.
There is no question here of the exercise of an arbitrary right by the Home Secretary, as the noble Lord, Lord Walston, said. If this is an arbitrary right, what is this Bill all about? We are seeking to ensure that the Home Secretary does not take an arbitrary decision. I do not believe that he has taken an arbitrary decision in the past but, at any rate, with this appeal machinery we should have the utmost safeguard that he should not act in an arbitrary way. But he remains responsible for law and order; he carries that responsibility to Parliament; he cannot shift that off on to any other shoulders. What I have been submitting to your Lordships is that the power which successive Governments have been satisfied that the Home Secretary should have of deporting an alien because his presence is found to be not conducive to the public good, should be extended to Commonwealth citizens.
This short debate has lit up the subject vividly. I know that it is a difficult question. It is a matter on which strong feelings are held. I am not arguing that there have been cases of this sort where this power was seriously needed; I am arguing that there may well be cases of this kind in the future—as there certainly have been in respect of aliens. I accept that my Amendment is not very happily drafted. I accept, too, that in this difficult and sensitive field it would be wrong for Parliament to embody in a Bill a provision which went farther than its begetter intended it to go. If we are to act on this we should be sure that we get it right. I hope that noble Lords will set aside all passion and prejudice and consider this as a genuine and difficult problem. But I am not going to press the Amendment. I do not think that at this stage it would be right to introduce into the Bill an Amendment which goes as wide as this one, and on that ground I beg leave to withdraw it.
Amendment, by leave, withdrawn.
Clause 16 agreed to.
Clauses 17 to 19 agreed to.
6.6 p.m.
LORD STONHAM LORD STONHAM moved Amendment No. 10:
After Clause 19 insert the following new clause:
Power to refuse admission to wives and children under 16 if they do not hold entry certificates
" .—(1) In subsection (2)(b) of section 2 of the Act of 1962 (under which a woman may not be refused admission into the United Kingdom if she satisfies an immigration officer as to the matters there specified) after the words' satisfies an immigration officer' there shall be inserted the words' that she holds a current entry certificate granted for the purposes of this paragraph and'.
(2) In subsection (2A) of the said section 2 (under which a person under the age of 16 may not be refused admission into the United Kingdom if he satisfies an immigration officer as to the matters there specified) after the words 'satisfies an immigration officer' there shall be inserted the words ' that he holds a current entry certificate granted for the purposes of this subsection and'.
(3) The Secretary of State shall make arrangements for securing that the persons having authority to grant entry certificates on behalf of the Government of the United Kingdom shall, on due application, grant such a certificate for the purposes of the said subsection (2)(b) or (2A) on being satisfied that, apart from the foregoing provisions of this section, the applicant would be entitled to admission into the United Kingdom under the said subsection (2)(b) or (2A) or would be so entitled if the applicant's husband, parent or parents were admitted with the applicant"
The noble Lord said: I beg to move Amendment No. 10: after Clause 19 to insert the new clause printed in the Marshalled List. This is a very important Amendment and I have no doubt that we shall have a considerable debate on it. I hope that your Lordships will bear with me if I try to cover as fully as I can the reasons which prompted the Government to table this Amendment, and perhaps to deal with some of the arguments on which it is based. As I informed your Lordships on May 1, the Government have decided to make the possession of an entry certificate obligatory for settlement by Commonwealth dependants. Section 2 of the Commonwealth Immigrants Act 1962 provides that admission may not be refused to the wife of a Commonwealth citizen who is already resident in the United Kingdom, or who accompanies her and is on that occasion admitted, unless she is the subject of a deportation order; nor may admission be refused to children under 16 whose parents are here or who

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are admitted with them. The effect of the new clause that I am moving will be that these rights of entry will remain unimpaired provided that the passenger has obtained an entry certificate for the purpose from the appropriate British representative overseas; but that admission may be refused if he has not.
The change is, in substance, an administrative one, and it is designed to ensure that applications to settle here as a dependant are examined and approved overseas before the immigrant sets out on his journey, rather than that this should be left until his arrival here. This Amendment is not intended to reduce the number of dependants entering, nor do I believe that it will do so. I said in the debate on the Expiring laws Continuance Bill:
"There is no issue of principle involved here, because if every person entitled to a certificate was given one it would not reduce the numbers coming in".—[OFFICIAL REPORT, 10/12/68; cols. 422–3.]
Subsection (3) of the new clause is designed to ensure that everyone entitled to a certificate does receive one. It imposes on the Secretary of State a duty to make arrangements for the issue of entry certificates to applicants who are otherwise qualified for admission. The entry certificate officer will issue a certificate when satisfied, for example, that the applicant is the wife of a Commonwealth citizen resident in the United Kingdom. Entry certificates will also be obligatory for dependent relatives who have no statutory rights of admission. But entry certificates will not be obligatory for dependants, including wives and children, who wish to come for a limited period. They will be admitted for the authorised stay of the head of the family. Nevertheless it will still be open to them to use the entry certificate procedure, and it will be in their interest that they should.
A separate Amendment to Clause 22(5) provides for the new clause to come into operation as soon as the Bill receives the Royal Assent, which I hope will be shortly before the Whitsun Recess. It is desirable to make the new requirement effective as soon as possible in order to reduce to the minimum an influx of immigrants seeking to avoid the requirement. However, there will be—and I emphasise this—transitional arrangements to prevent hardship to passengers who
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had made firm arrangements to travel to the United Kingdom before the change in the law was known. The change is being made now because, first, legislation is necessary and this may be the last opportunity for some time; secondly, it is desirable to make the change before the statutory appeal system is introduced; and thirdly, to make the change first known at a late stage in the Bill reduces to the minimum the risk of a rush to enter in advance of the alteration in the law.
I turn now to the reasons for the new requirement. There is general agreement among all who have studied the matter on the desirability of persuading as many Commonwealth citizens as possible to take advantage of the entry certificate procedure, which has been available as a facility for voluntary use since 1962. But the Wilson Committee did not consider that it would be right to make entry certificates compulsory for Commonwealth citizens in general. Since the Committee reported in mid-1967, the Government have kept the question under review in the light of subsequent developments—and there is no doubt that the position has greatly altered during the two years since the Committee considered it. To give an example, in the last full year for which figures were available to the Wilson Committee the number of Indians who had to be refused admission was 200. Last year, it was upwards of 1,250. Since 1962, the number of Indians who have been refused admission has doubled each year; that means that the total has redoubled and redoubled again, so that the level is now some 30-odd times higher than it was in the first year. Because of changes such as this, the Government have reached the conclusion that, in relation to Commonwealth citizens coming for admission as dependants, the present method of leaving claims to admission to be settled at the port has become intolerable and that entry certificates must be made obligatory for this category of immigrant.
The Wilson Committee made certain recommendations for improvement of the entry certificate procedure—for example, that the possession of a certificate should be made more nearly a guarantee of admission and that steps should be taken, by appropriate publicity, to persuade Commonwealth citizens to apply for certificates. The Government accepted all these

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recommendations and implemented them but, unfortunately, since the Wilson Committee reported, there has been no significant increase in the proportion of Commonwealth citizens arriving with entry certificates. About 100,000 entry certificates a year are issued and about 5,000 applications are refused. But a high proportion of the 100,000 who take out certificates are visitors or students, who are not affected by this Amendment. We have unfortunately failed to persuade sufficient of those coming for settlement to obtain certificates. It is true that almost all those coming here, particularly from the West Indies, have already obtained entry certificates, but in regard to India and Pakistan the results are very different. Only one in eight coming from India obtains an entry certificate, and this has an important effect on those refused admission. Last year, only 39 West Indians were refused entry but 719 Pakistanis and 1,263 Indians had to be sent back. I think that here is the crux of the matter.
All this results in a great deal of very real human misery, as anyone who has visited London Airport will know. Where refusal of entry is on so great and increasing a scale, it confronts us with the question whether the system of control which allows it can be regarded as efficient and humane. We do not think that it can be so regarded and have decided to change it. This problem arises only with dependants. The heads of households have to obtain their employment vouchers before setting out and ordinarily they experience no difficulty or delay on arrival here.
During 1968, over 48,000 Commonwealth citizens were admitted as dependants coming for settlement: over 30,000 of these were from Asia. Most of the dependants from India and Pakistan arrive at London Airport, where they have to be examined by immigration officers along with the mass of visitors from Commonwealth and foreign countries who form the great bulk of the passengers coming from overseas and who grow in number from year to year. To reduce congestion at the immigration control, dependants who arrive without entry certificates normally have to be asked to wait for examination until other passengers have been dealt with. The examination itself necessarily takes some
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time. As the Wilson Committee pointed out, in paragraph 28:
"The most difficult task facing immigration officers … is that of verifying the relationship and age asserted by someone, seeking admission as a dependent relative, in whose country of origin there is no nation-wide system of recording birth, parentage and marriage."
That is not the only difficulty. Last week I tried to speak to a 10-year-old boy who had been detained for between two and three weeks. An Asian immigration officer was the interpreter but the boy could not understand him. It had to be a three-handed business, with other Asians who were there, some of whom could speak the same language as the boy, and we managed to get some kind of answers. That is one of the many difficulties which lead to delays. Questions had to be asked which would be largely unnecessary if the people concerned had proper papers, including entry certificates. The least suitable time for an examination of this kind is when the immigrant arrives in this country, when the officers are working under pressure and the immigrant is under considerable strain at the end of a long and tiring journey. When cases are doubtful, the delay before the final decision can be reached may run into several weeks This is because there is an increasing tendency for cases of refusal to be challenged in the courts. In some cases, women and children have had to be kept in prisons or remand centres for weeks.
If no change were made in the present procedure it. would become necessary to provide accommodation away from the airport, to which Commonwealth immigrants coming for settlement would be transported on arrival for their claims to admission to be processed. I think that this would be a retrograde step. It would mean establishing what the Wilson Committee called "a kind of no man's land", where immigrants would wait for their "fate to be decided". They would have to be kept in isolation from their kin and in uncertainty about their future. To me, this seems an intolerable prospect and the effect on community relations could well be imagined. It would do nothing to reduce the number of wasted journeys to the United Kingdom or to diminish the disappointment when entry has to be refused.
These problems will not be solved by the introduction of the appeal system

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provided for in Part I of the Bill. That will not reduce the number of fruitless journeys to this country or the time needed for the examination of a dependant and his sponsor before a decision to refuse admission is taken. To this must be added whatever time is taken for the appeal proceedings—probably in a case of this kind a minimum of 24 hours. The impact on the appeal system of leaving entry certificates as an optional facility is one important argument for making the change that we propose. The Amendment that I am now moving means only that the genuine immigrant in this category will start his journey with an assurance of unhindered passage through immigration control at the port of arrival. There is no change in the position of visitors, including business visitors, or students, or other Commonwealth citizens admitted for limited periods, or their dependants: for them the entry certificate will remain an optional facility, of which they should take advantage if they have any reason to think that their admission to the United Kingdom may not be entirely straightforward.
Let me now say a few words about entry certificate procedure. An entry certificate is defined in Clause 22(2) as
"a certificate which, in accordance with immigration rules, is to be taken as evidence of eligibility for admission into the United Kingdom".
The relevant immigration rules are to be found in Command Paper 3465. Immigration officers are there instructed that the holder of a valid entry certificate is to be presumed to be qualified for admission, and is not to be refused admission except in certain specified circumstances, such as where the certificate was obtained by misrepresentation. The arrangements for the issue of entry certificates will be, in general, as described by the Wilson Committee. The entry certificate offices in India and Pakistan will be reinforced to deal with the extra work resulting from the new requirement, and arrangements for this have already been put in train. We do not consider it necessary at present to increase the number of offices in India and Pakistan from which entry certificates may be obtained. In these countries entry certificates are available from offices of the British High Commission, in India at New Delhi, Calcutta,
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Bombay and Madras, and in Pakistan at Rawalpindi, Karachi, Lahore and Dacca. The Wilson Committee found that the main areas of emigration to the United Kingdom were situated within what they considered to be, in countries of such size, a reasonable distance of one of these offices, and that rail communications were good.
With regard to the attitude of other Commonwealth Governments, we do not expect them positively to welcome a measure which, for certain of their citizens, changes the entry certificate from an optional facility to a compulsory requirement. But the Government firmly believe that this change of procedure is in the best interests of the Commonwealth immigrants, of all nationalities, who wish to settle here, and trust that it will be seen in this light. It is perhaps relevant that the Indian passport authorities have for some years been issuing to emigrants to the United Kingdom a notice which includes the following sentence:
"Before leaving India, you are advised in your own interests to ensure by a reference to the British High Commission in India that you will be admitted into U.K."
But even this advice from the Indian authorities has not led to more than one Indian dependant in eight obtaining an entry certificate.
I turn to the arrangements for appeal. When the statutory appeal system is in force a Commonwealth citizen who is refused an entry certificate will be able to appeal to an adjudicator in this country and, with leave, to the Tribunal; and one who arrives with an entry certificate but is refused admission will be able to appeal to an adjudicator and, as of right, to the Tribunal. For the reasons that I gave on Second Reading, it is not practicable to bring Part I of the Bill into force immediately on Royal Assent. The Government have, however, decided that, pending the introduction of the statutory appeal system, extra-statutory arrangements shall be made to enable wives, children and dependent relatives to appeal against the refusal of entry certificates, and to enable those who arrive with an entry certificate to appeal against refusal of admission. The appeals will be decided by one of a number of independent lawyers to be nominated for the Purpose by the Lord Chancellor, and

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the Home Secretary undertakes to abide by the lawyer's decision.
Appeals against refusal to grant an entry certificate will be dealt with in this country, in accordance with the procedure recommended by the Wilson Committee and in conformity with the extra-statutory arrangements already made for dealing with such appeals from United Kingdom passport holders in East Africa. If the appellant so requests, his sponsor in this country, or a lawyer or voluntary organisation acting on his behalf, will be able to present his case orally to the lawyer dealing with the appeal. The Home Office will be discussing with a number of voluntary bodies on May 8 the part they can play in the representation of appellants under these arrangements. An entry certificate holder who appeals against refusal of admission will be able to attend the hearing of his appeal in person, and will not be removed from the United Kingdom until the appeal has been dismissed or withdrawn.
On the question of the admission of aliens for settlement, a corresponding change in the law will not be required for alien dependants because, unlike Commonwealth dependants, aliens have no legal rights of entry. But changes in administrative practice will be made to bring the admission of alien dependants into line with what is now proposed for Commonwealth dependants, so far as this is consistent with the agreements for visa abolition.
The admission of alien dependants for settlement is on a much more modest scale than the admission of Commonwealth dependants, and is limited to the wives, children and other relatives of aliens who have themselves already been accepted as residents here, normally as a result of having spent at least four years in approved employment. In such circumstances, dependants are admitted for settlement if the head of the family here is able and willing to support and accommodate his dependants without recourse to public funds. On this basis, about 1,350 dependants a year—that is, of aliens—are admitted for settlement, of whom about 1,000 are wives and children and the balance are dependent parents or other relatives.
Dependants of aliens who are visa nationals are required to obtain visas for settlement before coming here, and
1106
so are already in line with what is proposed for Commonwealth citizens. Resident aliens who are nationals of countries with whom we have entered into arrangements for visa abolition often in practice now obtain Home Office approval before bringing their dependants here for settlement. In future they will be advised to obtain this advance approval whenever possible. Where they have not done so, their dependants will not be admitted for settlement. If they appear ineligible for settlement, the immigration officer will refuse permission to land; if they appear eligible, they may be admitted for a short period and advised to apply to the Home Office for permission for settlement.
I thought it advisable to explain in some detail both the Amendment and its ancillary machinery, and I am sorry if my speech has been overlong. Even so, I have no doubt that there are a number of questions which I have not answered, and if this should prove to be the, case, I will do my best to answer them at the end of the debate. Meanwhile, I commend this Amendment for your Lordships' approval. I beg to move.
6.29 p.m.
LORD GIFFORD LORD GIFFORD moved Amendment No. 11, as an Amendment to the Amendment.
After subsection (3) of the proposed new clause to insert:
("(4) In the case of a person who seeks to satisfy an immigration officer that he is entitled to admission into the United Kingdom under the said subsection (2)(b) or (2A), the holding by that person of a current entry certificate granted for the purposes of the said subsection (2)(b) or (2A) shall be conclusive evidence that he is so entitled")
The noble Lord said: I had not anticipated that I should have "first bat" as a result of putting down an Amendment to my noble friend's Amendment, but since I have, I trust that it is in order for me not only to move my Amendment but also to comment on certain of the matters raised by my noble friend in his Amendment. As he said in moving it, the Amendment introduces a major change in our immigration laws. It introduces a wholly different procedure for the would-be Commonwealth immigrant and for the would-be dependant to follow. Whatever its merits—and this is a very difficult subject—it is somewhat unfortunate that it should have been proposed at this very late stage in the passage of the

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Bill, after all the stages in the other House, and only five days before the Committee stage here.
There must be a vast number of questions which have to be carefully considered before one can give any kind of endorsement to the proposed Amendment. It is all the more necessary to ask these questions, and be satisfied with the answers, when one considers that the proposed changes, once enacted, will be very difficult to scrutinise carefully. If there is injustice, if there is chaos, or if there is anything wrong at London Airport, it is easy to go down and see what is happening, to talk to the people concerned, to raise the matter in Parliament, and have it investigated. But if something is going wrong, if the machinery is creaking in the High Commissions in Delhi or Rawalpindi, it is very much more difficult to find out what is wrong and see that it is put right.
There is another short preliminary point. My noble friend has put forward—and very fairly—as one of the principal reasons for this Amendment, the intolerable situation which he has described at ports of entry, particularly at London Airport. I agree with him that the situation is far from satisfactory, and that it might in many cases be called appalling. Of course, that procedure and that situation will be radically changed, or would have been radically changed, by the Bill now before us. Most of all, there are important provisions in the Bill before us for the granting of bail, and I still hope that this power to grant bail will be very liberally used, and so substantially reduce the chaos which my noble friend has described. I would have hoped that one might see how that worked out before seeking to rush through at a very late stage an Amendment of such a major nature.
I now come to the merits of the Amendment. I should be the first to agree that it is far more desirable for a prospective immigrant, whether he be a dependant or an immigrant of any other kind, to get clearance by means of an entry certificate in his country of origin, than to spend the money and go through the gruelling experience of getting past the immigration officers. I concede that the holding of an entry certificate sub
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stantially reduces, and indeed eliminates, the hardships and the tensions at the point of entry. No doubt, certainly in theory, the making of this requirement, that the holding of an entry certificate will be mandatory, will reduce that hardship further, if one can be satisfied that the personnel in the countries of origin are adequate; that it is easy for the applicant for an entry certificate to make his application, and present his case; that the procedure is efficient and speedy, and the appeals machinery adequate and fair—in other words, if the rights of the individual son, daughter and wife of immigrants here are as well protected by this change as they would have been had the change not been made.
It is those conditions about which I am most anxious to be satisfied, and assured, before I give wholehearted support to this Amendment. I am very much afraid that the Government, by producing a last-minute Amendment, and bringing it in force so quickly, may be more concerned to sweep away an ugly problem from the doorsteps of this country to the High Commissions abroad than to make sure that what was previously described as an unworkable proposal can be made workable. I agree that it is an appallingly difficult problem, in the cases of people coming from a country where documentation is often non-existent, where no records exist, to establish whether X is the son of Y or the wife of Z. It is a matter of great difficulty to decide how to resolve this problem. Are we satisfied, and have we really looked into all the implications to see whether the Amendment to make entry certificates mandatory really is the best way?
Let us think first of all of the machinery. I do not think my noble friend has told us enough about how the machinery which will be necessary is to be provided. He said himself that in the case of India only one in eight dependants applied for entry certificates. The volume of work in High Commissions in India will, therefore, be multiplied eight times. In Pakistan I do not know what the figures are—and I feel we should have them—with regard to what is the extra strain that will be put on High Commission offices. My noble friend will be very much aware of what is said in the Wilson Report about the granting of entry certificates in countries of origin.
The Committee were satisfied, by and large, that the procedures operated in the High Commissions were fair, and that the officers there were able, with the greater time at their disposal, to do justice in individual cases. But they said in paragraph 80:
"The additional strain which the entry certificate and visa systems would have to bear in consequence of our proposals makes it more than ever important to maintain, and where possible increase, the efficiency of their operation. The secondment of officers of the Immigration Service to overseas posts where entry certificates work is heavy and difficult has been valuable, and we recommend that the practice be continued; their expert knowledge has not only helped them in their own work as entry certificate officers but has enabled them to give useful guidance to any colleagues in the Diplomatic Service who may be engaged on such work at other posts in the same country."
Later, in the same paragraph the Committee say:
"We recommend that the Home Office, the Foreign Office, and the Commonwealth Office should jointly examine what other improvements could be made in the administrative arrangements for the issue of entry certificates and visas, with a view to avoiding delay in the consideration of applications and ensuring that all officers assigned to these duties are fully equipped to discharge them."
That paragraph gives one some indication of the kind of care which the Committee recommend should go into an increase, let alone making the entry certificate requirement compulsory. I would ask my noble friend: has this work been done? Can it be done in the short time that is at the Government's disposal?
In paragraph 127, the requirements are even more clearly stated, when the Wilson Committee are dealing with appeals from refusal of entry certificates, and dealing with them only in the very limited context of a non-mandatory system. They say:
"It is to be expected that a high proportion of unsuccessful applicants for entry certificates and visas would appeal. Although entry certificates and visa officers already have occasion to prepare reports on cases when replying to representations or referring cases to the Home Office, it is clear that the task of drawing up reports for the appellate authorities on all cases taken to appeal would impose a heavy burden of work which, at posts which have to deal with any considerable number of applications, could not be borne without some increase in staff. We were told that it has for some time been the policy of the Government to avoid any increase in the size of the Diplomatic Service. The establishment of a system of appeals must inevitably result in new demands on manpower."
That is all the more the case under the proposed Amendment. One would wish to know much more about the question of time. I have been informed that the average delay in granting an entry certificate is six months and, in many cases, 18 months. That may well go up considerably, now that this proposal is being made. Have the Government taken adequate steps to ensure speedy, efficient and just administration of the scheme? In practice it is only wives and children coming to join husbands and parents over here who give rise to the difficulties. One might take the common case. I am sure, of a child of ten or younger in a remote Indian village who up to now has been able to come to this country when his parents call for him. This boy has now to go and apply for an entry certificate at a High Commission office some hundred, or two hundred or possibly more, miles away. Is this reasonable?
LORD STONHAM: I am sue my noble friend will agree that that small boy now will have to go through a number of formalities which he is quite incapable to undertaking himself, and that somebody else does it for him. I am referring to the ten-year-old boy who has been spoken about. Someone else would obtain the entry certificate.
LORD GIFFORD: I appreciate that he may well have assistance. But of course some of the principal witnesses, perhaps the two principal witnesses, who might help him to establish his case may be in this country. That will mean that different people have to interview the parents and interview the children, and that will cause delay. I only want to know whether these considerations have really been carefully thought out. Is it certainly open to the High Commission staff to be able to travel in all cases to these areas of high migration?
I now come to consideration of the appeal provisions. Here again I. must say that I am very disturbed about the effectiveness of the proposed provisions for appeal against refusal of an entry certificate. The matter will be considered by a member of the High Commission staff in the country of origin. The appeal will he considered by an adjudicator in London. It will be a paper appeal, except in so far as people may make representations here, before the adjudicator in London, on behalf of the appellant

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so far away. I am told that in many cases where representations are at present made the mistakes which have been made (and it is mistakes that we are considering in this Bill) are mistakes which can only be sorted out by the same person seeing the parents and seeing the applicant—the boy or the wife in question—or at least the appellate authority, the reviewing authority, seeing the person who is making the application to come in.
It is going to be very difficult. I am advised that certainly it is the opinion of the National Council for Civil Liberties that it will be well nigh impossible to establish across the water, without having the applicant before the adjudicator. that a mistake has been made. In a subsequent Amendment I shall certainly be asking about the possibility of adjudicators sitting in the countries of origin.
I certainly wish to be constructive about this proposal. and in concluding my comments I make three points. First of all, can this new law be administered, at any rate in the early stages, flexibly and humanely? Of course, the Amendment does not say that it is mandatory for a person to have art entry certificate: that he must be refused entry if he does not have one. All it says is that he will not have an absolute right to enter this country unless he has an entry certificate. In cases, first of all in the transitional period, where it has been impracticable to obtain an entry certificate, may we know more about the assurance, which I am glad has been given, that special arrangements will be made? And even after the transition period, if it appears that an immigrant who has not got an entry certificate has some good reason for not having one—for instance, the procedure may have taken so long that he is nearing the age limit—will it be possible for him to appeal when he arrives and try to make out a case that it was very difficult, or impossible, for him to obtain an entry certificate?
Secondly—and I turn to the Amendment to the Amendment, which raises a slightly different point—under the proposed change, which changes the Commonwealth Immigrants Act 1962 which itself has already been changed by the Act of 1968, an immigration officer has no power to refuse a dependant if he is
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satisfied that he holds a current entry certificate granted for the purposes of the Act and if he is also satisfied that he is a dependant of the person in question. in practice I am sure that few people with valid entry certificates would be turned away, but it seems to me that there should be no reason whatsoever why people should be put in jeopardy twice, or should have to prove their case twice. I can see that people who have a forged entry certificate of course should be turned away, but then they would not have a current entry certificate granted for the purposes of the subsection. I can see that if they hold an entry certificate granted to someone else they should be turned away, because there again they would not have an entry' certificate granted for those purposes. But, apart from that, I do not see why, if we are making entry certificates virtually compulsory, we cannot at least say, "If you have obtained your certificate and it is a valid one you have a right to come in."
There seems to be some confusion in the Government in this matter. The Home Secretary in the other place, in reply to a Question on May 1, said
"If the entry certificate was genuine there would be no challenge. If it were not thought to be genuine, there could be a challenge. It was for that reason that I introduced the qualification."—[OFFICIAL REPORT, Commons, 1/5/69, col. 1635.]
That I would agree with. The fact that a certificate has been forged should in my view be the only reason for turning away someone who holds one. On the same day my noble friend Lord Stonham said:
"It is because you have given false information and made lying statements which have enabled the certificate to be granted. We know that they are lies and therefore we refuse admission. We do this now to the extent of some 3,000 cases."—[OFFICIAL REPORT, 1/5/69, col. 964.]
I am sure he was not referring to 3,000 cases of people holding entry certificates and being turned away, because I believe the number of such people was only about 63 in the last year.
Is it right—it may affect only a minority of cases—that someone who has had his case adjudicated upon by an officer in the country of origin should again risk having it adjudicated upon when he arrives at the airport if it is

1113
alleged, for whatever reason, that in fact he made a lying statement or obtained the certificate by fraud? It is like saying to a man who is acquitted of a criminal charge, "We now find out that you lied at your trial and therefore we will retry you." A man has to go through one of these troublesome procedures either in the country of origin or at the airport, but he should not have to go through the procedure twice.
I am not absolutely sure whether my Amendment makes that point sufficiently clear and does what I hope it does. It is very difficult to amend an Amendment which is itself amending an Act which has already been amended; but certainly my intention is—and I do not see why it should not be acceptable—to make the holding of an entry certificate a qualification at least as good as holding a visa, and not worse—something which gives a person an absolute right which cannot subsequently be questioned. I apologise for taking up so much time of the Committee, and I beg to move.
LORD BROOKE OF CUMNOR: The noble Lord, Lord Gifford, in moving his Amendment to the Government Amendment, spent a great deal of time in making his own references to the Government Amendment. I am not criticising him for that, but I am in your Lordships' hands. I wish to speak to the Government Amendment rather than to the Amendment to the Amendment and I do not wish to confuse the debate or in any way to come between the noble Lord, Lord Gifford, and the Government. On the other hand, it might be more to the convenience of your Lordships to have a general debate and then the Questions could be put formally at the end. I think possibly that would result in a saving of time, and I feel sure that the noble Lord, Lord Stonham, would be able to keep in his mind the points raised by the noble Lord, Lord Gifford, in relation to the Government Amendment.
LORD STONHAM: Subject to the views of the Lord Chairman, that is what I had in mind. It really is one discussion, and indeed my noble friend Lord Gifford only in the closing part of his speech brought his Amendment forward as one of the three points on which he wanted information. If it meets the con
1114
venience of the Committee I shall be glad to sum up and at the same time to deal with my noble friend's Amendment to my Amendment.
LORD BROOKE OF CUMNOR: That fortifies me in speaking at this stage, but I am extremely anxious not in any way to prejudice the proper consideration of the Amendment to the Amendment.
It is within the knowledge of many of your Lordships that the noble Lord, Lord Stonham, has taken a great deal of personal trouble to acquaint himself with the immigration arrangements at the ports of entry to this country, particularly at London Airport. I cannot help thinking that there is a close connection between the personal study which has made of what is happening to would-be immigrants at ports and airports a id the bringing forward of this major Amendment by the Government. We have not had a great time to consider it and I may wish to revert to the subject on Report. Certainly for my part I have had no time to consider drafting any Amendments, even had I wished to do so.
I believe that the line which the Government are taking is right, because it has been a tenet of Conservative policy on this matter for years that the entry certificate procedure should become a main element of effective control. It is difficult to express the concept in precise words, but we have wholeheartedly agreed with the finding of the Wilson Committee that the point of test of right of entry should be in every possible case removed from the port of entry into this country to the country from which the immigrant comes. That may save the would-be immigrant a good deal of money. It may save him crucial nervous tension while he is kept waiting here for his credentials to be examined by the immigration officers, and it may enable him to get the whole matter settled satisfactorily before he leaves home. On those grounds I greatly welcome the conversion of the Government to the idea that the entry certificate should be an effective requirement for certain classes of Commonwealth citizens to qualify to come into this country.
There are, of course, questions to be asked and the noble Lord, Lord Gifford, has asked a number of them. It seems to me that if this new system is to work

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it is absolutely essential that there should be a substantial increase in the number of entry certificate officers in our High Commission offices in the countries from which would-be immigrants come. I have the greatest admiration for the British Civil Service, but it is quite impossible for men to do their work when they are given a tremendous extra load such as this proposal will give them, if there are not enough of them; and this extra load will hit the High Commission offices overseas very sharply. I know that the Government are extremely anxious that this change of policy shall be acceptable to all concerned, and it will be acceptable only if the would-be immigrants find that their applications for certificates are dealt with expeditiously in the High Commission offices overseas.
There will also be the question of appeals, and the adjudicator considering the appeal will be in this country and not in the overseas country, unless a later Amendment to be moved by the noble Lord, Lord Gifford, is accepted. Here, too, it will be necessary for the procedure to be expeditious because I can imagine few things that will do more harm to Commonwealth relations than if it were felt by would-be immigrants to this country that this remote British Government and Parliament had set up new machinery which they thought would work in theory but which in practice seemed to take such an intolerable time that it came to be regarded as an intentional obstacle in the way of the Commonwealth immigrant. So far as I can see, all these details can only be overcome by adequate staffing both of the High Commission offices overseas and the offices concerned with the hearing of appeals in this country, both by the adjudicators and by the Tribunal.
The noble Lord, Lord Gifford, made the important point that some of the dependants are subject to a time limit. That is because they lose their right of entry when they reach their 16th birthday. I do not know whether the Government have gone into this carefully, but clearly it would be important to ensure that a suspicion does not arise that a young man who is nearing his 16th birthday will have his chance of entry into this country frustrated and destroyed by dilly-dallying on the part of the officials
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handling the matter. I am not suggesting for one moment that there will be dilly-dallying but this is a matter which is charged with suspicion and it is important, if this new system is to work, that every possible step shall he taken to minimise these suspicions.
Finally, I trust that the Government will talk this out thoroughly with the voluntary organisations at this end. It seems to me that we must depend on the voluntary organisations to a great extent if this scheme is to be worked successfully. The Government will need the advice of those voluntary organisations as to the detailed working of the scheme, and they will also need the practical assistance of the voluntary organisations, both here and, in some cases, at the other end if it is to work successfully.
I support the Government in seeking these new powers, although it is unusual for such a major change in a Government Bill to come along at such a late stage, when it has been through every stage of its progress and debate in another place. Whether this was of intent or whether it was because the Government only at this late stage were driven to the conclusion that they must make the entry certificate a necessity, I cannot tell; nor am I really much concerned to inquire into that. We have this change introduced at a late stage in the Bill; we shall still have time between now and Report stage to examine more closely the precise wording and we shall he indebted to the noble Lord, Lord Stonham, for anything further he can tell us in reply to the questions which have been asked in this debate.
THE LORD BISHOP OF BIRMINGHAM: Coming from a diocese which has so many immigrants, I want to say, first of all, that I welcome this Amendment very much because it mitigates a great deal of the heartbreak and pain of those who have to wait so long and of so many who have to be returned to their own country. I also am very anxious that the questions which have been put by the noble Lords, Lord Gifford and Lord Brooke, should be cleared up.
There are really two main questions. One is about the officers of the High Commission. In the West Indies that will not be a great problem; but it seems to

1117
me that in Pakistan and India a great deal of care will have to be taken. I am sure we shall have a full answer as to what plans are being made for increasing the staffs there. The other question concerns appeals, and most of the difficulties have already been put before us. I do not want to have another debate, an hour long. on the question of whether the appeal is on political grounds, judicial grounds or compassionate grounds; but all these three have to be taken into consideration, and the committee who form this appeal body will have to be in very close liaison with the people at the other end to be able to decide whether, as a matter of law and of fact, a particular person is or is not the wife, or the son or daughter. And then all the other questions, political and so on, will have to be carefully considered. I hope that the appeal procedure will be adequate and not take too long. On the whole, however, I welcome this Amendment of the Government.
7.3 p.m.
LORD FOOT: I do not want to introduce a dissenting note into this debate, but I want to oppose this Amendment. I agreed with the noble Lord, Lord Stonham, when he described it as a very important Amendment. It is indeed important because, as I shall hope to show in a minute. it totally upsets the whole balance of the Bill that was presented to us at the time of the Second Reading: it is a major transformation in the Bill. I hope I shall receive the indulgence of the Committee if I speak for a little longer than may be normal on Committee stage, because in one sense what we are debating to-day is a Second Reading of the Bill.
The concern we felt when we heard the Statement by the noble Lord. Lord Stonham, on May I was, first of all, what would be the effect of this Amendment and the consequences for the intending immigrant. Secondly, what caused concern was that there should be this radical reversal of the whole position which the Government had take up over the last eighteen months upon this question of compulsory or voluntary entry certificates—a complete reversal, at the last hour, of the Government's position. And I am afraid that any suspicions which I may have in the matter are in no way allayed by finding that this Amendment
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is received and welcomed by the Tory Party and by the noble Lord, Lord Brooke.
May I, very briefly, rehearse the history of this matter since this question of voluntary or compulsory entry certificates became a matter of public controversy and a political issue? Your Lordships will remember that the question of whether we should have a system of entry certificates, voluntary or compulsory, was canvassed and discussed by the Wilson Committee. Paragraph 68 of the Committee's Report makes it perfectly clear that they had considered this and fully appreciated the benefit and value of intending immigrants' seeking and obtaining an entry certificate before making their way to this country. The Committee said, in paragraph 68:
"… the entry certificate was introduced for the convenience of Commonwealth citizens; and it has obvious advantages for those who use it. When such a certificate is granted the Commonwealth citizen who has properly obtained it has normally a virtual guarantee of admission. When it is refused, the Commonwealth citizen not only saves tie cost of his fare but is relieved of the strain of waiting in a kind of no man's land for his fate to be decided at the port. From the point of view of the Home Office, too, it is desirable to reduce as far as possible the number of difficult cases which first arise for decision at the port of entry."
All the matters to which the noble Lord, Lord Stonham, has referred to-day, the hardships which fall upon the person who comes to this country and s then either turned away or detained while inquiries are made into his situation, were within the contemplation of the Wilson Committee. Nothing has changed since that time. The situation to-day is the same as it was in August, 1967, when this Committee's Report was published. But in spite of the consideration of all the advantages of the entry certificate, the Wilson Committee came to the clear conclusion that it would be unjustifiable to impose what is now being proposed by this Amendment—that is, a system of compulsory entry certificates. The words in which they expressed that conclusion (they appear in paragraph 70 and they have been quoted many times), were these:
"After careful consideration we have come to the conclusion that it would not be right to make the use of entry certificates compulsory. As the great majority of aliens who come to the United Kingdom are free from

1119
the visa requirement, we consider it would be out of the question "—
and I would underline the words, "out of the question"—
"to impose upon Commonwealth citizens the same requirement under another name. The right course in our opinion is to make it clear to all concerned by every possible means of publicity that the entry certificate is a facility offered to immigrants in their own interests, which they would be foolish not to use."
I say that, as a result of this, this matter of whether the production of certificates should or should not be compulsory has been a subject of public controversy ever since the publication of that Report.
What has been the position of the Government? Until last Thursday, May 1, the Government's position had been perfectly clear. They had expressed the same position throughout: that they were not prepared to agree to making the entry certificate compulsory. They took that view on two grounds. One was that they thought there were very considerable administrative objections; and the second was the principle to which the Wilson Committee had drawn attention: that it would be to discriminate against the Commonwealth immigrant and in favour of the alien, because in the great majority of cases the alien would be subject to no such requirement. That has been the position of the Government throughout.
The next thing that happened in the field of immigration after the publication of the Wilson Report was, as your Lordships will remember, the Commonwealth Immigrants Act of February, 1968. There again amendments were made to the whole immigration procedure. If the Government had thought it right to introduce a compulsory entry certificate, why did they not do it at that time? Then we come on to the debate which occurred in November, 1968, in the House of Commons on the Expiring Laws Continuance Bill. Mr. Callaghan, the Home Secretary, spoke upon the subject, and there again he deployed the arguments that it was administratively very difficult to introduce the compulsory entry certificate and that it would be discriminating against the Commonwealth immigrant as compared with the alien.
In January of this year we got this Bill, presumably the distilled wisdom
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of the Government's thinking over the last 15 or 18 months. There was no mention whatever of an intention to introduce a compulsory entry certificate. The Bill had its Second Reading in the House of Commons, it went through the Committee stage in the House of Commons, four days between February 6 and 18 were devoted to the consideration of the Bill, and there was no suggestion from the Government that they were proposing to make this fundamental alteration in the Bill. On March 27 it came to this House and we had a Second Reading debate in which I was possibly unwise enough to congratulate the Government upon what they were intending to do. Now, only last Thursday, the Home Secretary comes to the House of Commons, and the noble Lord comes here and repeats the Statement, saying that it has been decided after all to make this major alteration at the last possible hour. I ask, why? Why is it that the Government are now abandoning the position that they have taken up over these last 15 or 18 months?
I must say I was astounded to listen to one explanation given by the noble Lord, Lord Stonham, of why it was being done in this way. If I understood him correctly he said that it had been decided to introduce this major Amendment at this late stage in order to prevent a rush of immigrants to try to defeat the Bill. I hope I misunderstood him, but if I understood him correctly, what we are asked to believe is that it has all along been the intention of the Government to introduce a system of compulsory entry certificates. When we in this House had this Bill presented to us on Second Reading, and indeed when the other House had the Bill presented to them on Second Reading and when it went through its Committee stage there, we were just being fooled. Apparently, according to the noble Lord, the Government had the intention from the very beginning of introducing this major Amendment at this late stage in the affair.
What is the consequence of an Amendment to the Bill at this late hour, of introducing this Amendment as a sort of postscript at the last possible moment? The first consequence is that there has been no debate whatever in the House of Commons upon the principle of this Amendment. The second is that because of the announcement of the Government's

1121
intention being made only on Thursday last, there has been no opportunity for any kind of public debate upon this most important matter of compulsory entry certificates.
LORD GRIDLEY: May I interrupt the noble Lord? Is he saying that there has been no debate in this House or in another place about the policy or question of entry certificates generally, and that its wide application has not been discussed?
LORD FOOT: No. I am much obliged to the noble Lord for his intervention, because it enables me to make the point clear. I am not saying that this matter has not been discussed in another place, but that it has not been discussed in the context of the Government's proposal that there should be a compulsory entry certificate. The context in which it was discussed in the debates which they had in another place on Second Reading and in Committee was that the Government were opposing a compulsory certificate. The result is that there has been no opportunity of arguing with the Government as to the merits or otherwise of this proposal.
The third consequence of introducing this Amendment at the last possible moment is that there has not been any opportunity for discussion between the Government and the voluntary bodies which are responsible for trying to make the immigration system work. The last consequence is that we who are debating this major alteration here to-day have had knowledge that it was going to be introduced only since last Thursday; we have had knowledge of the details of the Amendment only since last Friday morning.
That might not matter much had this been a minor issue, but in my submission it is a matter of major importance. I suggest that this Amendment, if carried, alters the whole balance of the Bill. I say that because as the Bill stands at this moment and as we contemplated that it would stand when we gave it a Second Reading, the great majority of the appeals that would be heard under this Bill would be heard here in this country and would be appeals by people who were being excluded from this country at the port of entry. According to the Wilson Report, only one Common
1122
wealth citizen in five who comes to these shores is in possession of an entry certificate. Therefore, the great majority of the appeals would have been heard in this country and of course would have been concerned with the question of whether on arrival at one of our ports a particular person was to be excluded. But as the Bill is proposed to be amended, the great majority of the appeals will not be concerned with the exclusion of people from this country when they arrive at the ports, but with whether the person ought to be granted an entry certificate in his place of origin. That is the vast change which is effected in the whole balance of the Bill by this Amendment.
When we were discussing this matter on Second Reading, I think I am right in saying that everybody contemplated this structure of adjudicators at the ports—80 or whatever the number is—and above them the appeal tribunal, all designed primarily to deal with appeals by people reaching the ports of this country. That was the way in which the matter was presented to us. But if this Amendment is carried, the major work of appeal will not be done by these adjudicators at the ports. It will be done by adjudicators in Whitehall, by the people to whom the appeals will come from all the different countries of origin. That is the complete change which has been made in the whole balance of this Bill.
Not only will that change occur, but appeals against the refusal of a certificate will be appeals of an entirely different character from appeals against an immigrant's exclusion from this country. I say that for this reason. The characteristics of the appeal here by the immigrant who is stopped at the port are these. First of all, it can be a quite speedy procedure; it can take place almost at once. The immigrant can be taken before the adjudicator, perhaps within 24 hours. The second characteristic of the appeal here is that the proceedings are oral. The third characteristic of the proceedings here is that the immigrant has the advantage of the advisory organisation to help and assist him in presenting his appeal. The fourth and most important aspect and characteristic of an appeal of that kind, is that the immigrant confronts the people who are trying him; he is present, and he can

1123
hear it all said and he knows what is going on.
When I took leave to support this Bill on Second Reading the matter which influenced me perhaps most was the thought that it was well worth while to spend half a million pounds if only you could establish a procedure which, through the mesh through which he had to go, would be seen to be fair to the immigrant. Those are the advantages of the appeal procedure which we had in contemplation at that time. But when you are dealing with an appeal against the refusal of an entry certificate in the country of origin, all those advantages are lost, because the procedure then is quite different.
I need not go into detail at this late hour, but as has been explained, what happens, according to the Wilson Committee Report, is that the applicant goes first before the official of the High Commission and makes his application. If he is refused and he then lodges an appeal, the official has to prepare a report. The applicant has to be given notice of his right of appeal, he has to be told of his right to submit written observations, and to get written replies, and the whole matter is then posted through into this country. In this country the matter is decided upon the basis of the documents. The applicant is not present and he has no opportunity of seeing for himself whether his case is or is not properly and adequately considered. Those are the merits which the other appeal system has which seem to me now to have been cast away.
I appreciate that there are advantages in the entry certificate system. Indeed, I appreciate that entirely, as did the Wilson Committee. It is, of course, a terrible hardship if somebody reaches these shores and is then sent back again with the disappointment of all their hopes. It is also a very grave thing if an individual, especially a child, especially perhaps a woman, is detained at the port of entry for a period of time, possibly in detention, while his or her claims are investigated.
Against that what are the disadvantages, as I think the major disadvantages, of this Amendment? I ask the question: what sort of delay is likely to be imposed upon applicants in their place of origin under this procedure?
1124
The first thing that will impose delay is the actual requirement of applying for the entry certificate, but that may be a comparatively minor matter. The next thing that will impose delay is this. Because you cannot have an oral hearing there and then but a report has to be prepared which has to be sent to this country in order to be decided by an adjudicator. or possibly even by the Tribunal in this country, you are going to have a possibly indefinite delay at that time.
But that is not the end of the story at all, because inevitably there will be a vast increase in the number of appeals against the refusal of entry certificates. I say that for two reasons. One of them is that in the Wilson Committee's Report they gave a clear warning—and some reference to this has already been made—that this would impose a very heavy administrative burden on the High Commission officials in these countries of origin. That is contained in paragraph 127, and I want to make only one quotation from it. After speaking about the extra burden that is to be imposed upon the High Commissions, it says:
"Any attempt to put the proposals into effect without an increase in staff engaged in entry certificate and visa work overseas, at those posts where such an increase is necessary, would he unfair both to the applicants whom our proposals are meant to benefit and to the officials who are expected to administer them."
They gave the clearest possible warning that the present structure is insufficient to enable these appeals to be dealt with satisfactorily. That is not the end of the story, because once the requirement for the entry certificate is made compulsory you will have a great multiplication of these appeals, perhaps as many as five times as you would have under the voluntary system. Therefore, you are going to have the burden upon these High Commissions increased to that extent.
I apologise for detaining the Committee for so long, but I would conclude by saying this. Is there any reasonable alternative to this decision of the Government to impose a system of compulsory entry certificates? I suggest that there is. I suggest that the Wilson Committee were right in saying that the voluntary entry certificate is far preferable in principle to the compulsory certificate, and one of the ways in which you

1125
can overcome the difficulties is by seeing that adequate advice and assistance in applying for voluntary entry certificates is given to the applicant in his place of origin. That is what is proposed by the Joint Council for the Welfare of Immigrants, that there should be a massive increase in the assistance given by the Government to these voluntary advisory organisations in these different Commonwealth countries so that the intending immigrant can there be advised quite clearly, in advance, of all the benefits of getting an entry certificate for himself. It is not as if we are faced with this Amendment or nothing. In the opinion of many people who are equipped to know, this problem could be very easily dealt with if only the same sort of advisory assistance were given to people in their own places as is available to them, or as we are trying to make available to them, here in the ports of entry.
7.26 p.m.
BARONESS GAITSKELL: I hesitate to jump in where only lawyers—and very eminent lawyers at that—seem to tread, but I wish to add just two sentences to this debate to underline a couple of points which inevitably, by this late hour, have already been made. I do not disagree with the principle of compulsory entry certificates, so long as the effective right of appeal, as was provided in the Bill, is preserved. But, I am a little uneasy that this same right of appeal may not be maintained to the same extent. It is essential to have a right of hearing. With this Amendment, as my noble friend Lord Gifford so ably pointed out in his speech, there is only a "paper" right of appeal in London. Perhaps the Government will give consideration to the setting up of adjudicators in the country of origin—as I hope my noble friend Lord Gifford will suggest in Amendment No. 21, and I hope that the Government will give this Amendment serious consideration.
LORD GRIDLEY: I shall detain your Lordships for only a few minutes, but I should like to make a few comments on the speech of the noble Lord, Lord Foot. I do not see that there is any obligation upon the Government to accept every statement in the Wilson Committee's Report. The Government can come to
1126
their own conclusions in this mater. A great deal has been said about all the difficulties that will arise from the mandatory imposition on would be immigrants of the duty to obtain entry certificates in the country of origin. But this could be, in my opinion, a matter of organisation and procedure. It leaves me with the very strong feeling that what noble Lords who are objecting to this are frightened of is that they will no longer be able to interfere in these matters as they do in this country at the present moment. I think the procedure is entirely humane—something which in that respect alone commends it.
One final word. I think it is unfortunate that in the Press of this country, when it was known and published that this Amendment was to be introduced in the House of Lords to-day, the usual suggestion was made that this was "an attempt to hold up immigrants from coming to this country." I think that the intention is quite clear. It is to help Commonwealth immigrants. I think that it is humane and that the Government can be commended on introducing the Amendment.
LORD HAWKE: I sympathise greatly with the right reverend Prelate, and I much prefer to accept his version of what is good for the immigrant than that of the noble Lord, Lord Foot. I also have some sympathy with the right reverend Prelate because we have now had nearly five hours of debate and have not completed 11 Amendments. That is about a record for this House, but I do not think it is a great credit to us.
Having lived in India and Pakistan, man and boy, for about twenty years, I have been wondering which method is most likely to arrive at the truth as to whether a person is or is not a dependant. On the whole, I think tint the truth is more likely to be arrived at overseas than in this country. But in either case my heart bleeds for the unfortunate inquisitors who have to deal with the Orient in this matter. Your Lordships will have noticed a plea in The Times from Pakistanis wishing their Government to step more heavily on those who issue false certificates, and so on. To plough one's way through an absolute zariba of false witnesses, lies and so on, is a task which one would not wish anybody to have to undertake. But

1127
somebody has to undertake it, and it is much better done in the other country than here.
LORD WALSTON: This has been a long debate, and I think it should be a long debate because I have a great deal of sympathy with the noble Lord, Lord Foot, in the strictures that he made. He spoke very cogently, and I felt that some of the things he said were the truth. It is unfortunate that the Government have introduced this extremely important Amendment at this stage of the Bill. I wish it could have been part of the Bill so that we and another place could have discussed it at more leisure. But, for all that, I believe that in principle the Amendment is right.
Anybody who has been to London Airport, as the noble Lord, Lord Stonham, and other noble Lords and I have done, and has seen the waste of manpower and time, and the strain on the immigration officers, who has seen the extra cost which is imposed upon the unsuccessful immigrants and upon the airlines which have brought them—or even upon the successful ones who are detained for days or weeks at somebody's expense—and who has seen, above all, the very great human problems involved when people arrive here and are then refused entrance, or are in doubt whether or not they will be allowed in, must welcome in principle anything that will alleviate that situation.
It is certainly true—and I agree with the noble Lord who has just spoken—that in so many of these questions, about the degree of family relationship, age and so on, the decisions are far better taken in the country of origin than in this country. But. for all that, there are many grounds for criticising not only the way this Amendment has been presented but the Amendment itself, or, perhaps more particularly, the likely results stemming from it. The Times to-day has a leader which many of your Lordships may have read. I shall just quote the final paragraph which seems to me very wise:
"The Government should make it clear that they will provide sufficient extra staff in the Commonwealth countries affected so that applications can be dealt with both thoroughly and speedily. It must also be a priority of policy that appeals from these decisions should be dealt with promptly."
We have heard doubts from various noble Lords about whether this can be done.
1128
We have as yet heard nothing from my noble friend (though I hope we shall) about how this will be done.
We have already been told that this system has worked relatively well on a voluntary basis in the West Indies, but extremely badly in India and Pakistan. I suggest that one reason, at least, why this has happened is that in the West Indies it is rare for any would-be immigrant to have to travel more than 10 or 20 miles to get to the place where he makes his application. Everything is done on a small scale, a relatively friendly and personal scale. But in India and Pakistan, if there are to be only four of these places in each of those two great countries where certificates can be issued, as my noble friend Lord Gifford so rightly said, the applicants will have to travel many hundreds, and in some cases possibly thousands, of miles in order to get there.
LORD HAWKE: May I interrupt the noble Lord? I am not certain of my facts, but I strongly suspect that the applicant will be represented by a pleader who will collect all the evidence and then present it at the High Commissio0ner's office.
LORD WALSTON: That may well be so in many cases, but the pleader himself will either have to travel from the village of the applicant, or will have to be in contact with him, and letter contact is not the best way of instructing a lawyer or a pleader. So that travelling will have to be done by somebody, and I hope that in most cases the applicant will make a personal application. However it is done, it is going to put an enormous strain on the people in our High Commissions who have to take on this extra job, which will be a vitally important one. Not only must they arrive at the right decision as nearly as is humanly possible; they must also appear sympathetic, understanding and knowledgeable, even to those people whose applications they turn down. An application cannot be dismissed peremptorily; it cannot be done through a series of intermediaries, secretaries and watchdogs of one kind or another. Some of your Lordships—
LORD GRIDLEY: Is the noble Lord suggesting that the High Commissions will not get the type of person who will

1129
deal with these matters satisfactorily? Is he suggesting that we will not get them?
LORD WALSTON: If the noble Lord will allow me to continue, I think I shall make that quite clear. Some of your Lordships may have seen an opera by Menotti, The Consul. Whenever we talk about these matters, pictures come into my mind of that devastating scene in the Consul's office, when the applicant for a visa was coming out from an Iron Curtain country. I am not suggesting that the officials of the British High Commissions who will have to deal with this sort of case will be like the character in the opera, although he was a kind man. I am suggesting two things. I am suggesting, first of all, that there must be sufficient of them so that they are not overwhelmed by work and so that they can give the attention which I am sure they themselves would want to give, instead of having to go through a whole sheaf of papers in the pending file on their desk; or, alternatively, having to delay an application for month after month. Secondly—and I hope that the noble Lord will be able to give an assurance when he come; to speak—I hope that these officials who have to do this job will be selected because of their knowledge of the country to which they are sent, and of its local conditions—not just the capital city—and that they will be left there long enough, so that the knowledge which they acquire painfully over the years for themselves, and possibly for the applicants, will not be wasted by transferring them after three years to some entirely different job. I hope that the noble Lord will be able to give us some assurance on that point, because the calibre of the man who has to do this work, and the number that there are to cope with these figures—which on the noble Lord's own figures must be at least eight times the present number—is enormously important.
My other point—and, naturally, this has been dealt with by other noble Lords—is on the question of appeals. I quite accept that when there are appeals on a matter of law it is perfectly possible for the appeal court, whatever you may want to call it, to sit without seeing either of the contestants or disputants. The evidence can be read and a decision on a matter of law can he given. But when
1130
it is an appeal simply on a matter of credibility, I do not see how it is possible for any adjudicator, no matter how experienced, no matter how wise, to sit, whether it be in Whitehall or in Heathrow or anywhere else, and decide whether Her Majesty's High Commissioner's representative in Madras was right when he said, "I do not believe this young man who says that he is 15", or, "The young man was right when he said that he was 15". That at is the type of dispute which al the present time is so often the substance of an appeal against the decision of an immigration officer. There are some which can he dealt with at a distance without seeing the people themselves; but the majority of appeals, I believe, are those which involve purely the credibility of the witness or the witnesses.
Therefore I strongly support (even though I do not believe that, strictly speaking, we have come to it yet) the Amendment which will be moved by my noble friend Lord Gifford. In my opinion, if this system is to work equitably and justly, and if it is to be seen by the Commonwealth countries to work equitably and justly and not be simply, as has been suggested by some newspapers, a device for keeping out more immigrants—I do not believe that myself, but that is what some people are already suggesting—then in the great majority of cases these appeals must be dealt with in the country where the dispute his in fact arisen.
I do not want to go into the detail of this subject too much, but it seems to me that in India and in Pakistan there must be a certain number of members of the British Bar who are practising there, who have experience of that part of the world, who are wise and unbiased men and who might serve as adjudicators, just as they would be able to serve as adjudicators if they were resident in this country. I ask my noble friend earnestly to consider this possibility: not necessarily to give us an answer to-night, but to look closely into this possibility of having at least a portion of the appeals dealt with in the countries in question. The general idea behind the Amendment is right. The hurried way in which it has been introduced quite naturally arouses suspicions in the minds of many people who are not normally suspicious, but those suspicions can be allayed if we are assured by my noble

1131
friend that the points which have been raised tonight will be taken into consideration before the final implementation of the proposal in the Amendment.
LORD WADE: The Amendment moved by the noble Lord, Lord Stonham, which we have before us is the equivalent of a new Bill, and we therefore have a duty to debate it. I think we all agree that it is most important to reduce the numbers waiting at the airports and other places of entry, but that does not absolve us from the duty to examine carefully a major change in the law such as this. There are two questions which we have to ask ourselves. One is whether it will affect the number of dependants who will be admitted, and the other is whether the procedure will be as fair and humane as possible. I am not going to dwell on the first question except to say that I accept what the noble Lord, Lord Stonham, has said. Nevertheless, I can see some Government in the future using this administrative procedure as a means to restrict the number of those who would otherwise be entitled to come here.
So far as the humanity of the procedure is concerned, we must recognise that there are delays in dealing with applications for certificates of entry. I do not think there is any doubt that there have been delays. There is one case that is well known to the noble Lord, Lord Stonham, and with which I also have had something to do. I am not going to discuss it at length, but it is the case of a Mr. Bansal, of Huddersfield. He was very anxious that his brother in India should join him, partly on account of that brother's ill health. Mr. Bansal was anxious that his brother should be treated over here, and application for an entry certificate was made in March, 1967. It was not granted until May, 1968. Unfortunately, shortly before the entry certificate was granted the brother died, and therefore it arrived too late. The Joint Council for the Welfare of Immigrants confirms what I have said—namely, that there are these delays. I support those who press for advisory and welfare services in the countries of origin, and not only here. I commend what is being done by the voluntary bodies at, for example. London Airport: but it is most important that assistance should be given to such a body as the Joint Council
1132
to develop advisory services in the Commonwealth countries, even if we have only a voluntary procedure for entry certificates, and all the more so if it becomes compulsory.
I think it would not be inappropriate—and I am trying to cut my remarks to the minimum—if I were to quote from the statement made by the Joint Council for the Welfare of Immigrants dated May 2 of this year, in which they say:
"… advice is most urgently needed before potential immigrants apply for an entry certificate, as it is very often extremely hard to get an adverse decision reversed once it is made. Immigrants face exactly the same problems in applying for entry certificates as they do when they are refused admission at ports of entry to the United Kingdom—namely, lack of documentation in the matter of birth, death and marriage certificates. Without expert help on the spot to help them to establish proof of their identity and relationship with the sponsor in the United Kingdom. many will be refused entry certificates, and to expect to conduct a subsequent appeal by post from the United Kingdom is ludicrous. Whilst the hardship resulting from a refusal to admit will in this way be concealed from the press and public in the United Kingdom. therefore, it will continue in the countries of origin and may well he increased ".
I think that is a genuine fear which must be met—and that brings us to the appeal procedure. I have read the speech of Mr. Callaghan in another place on November 30, 1968, which has already been referred to; and his argument that the proposal now put before us would create substantial administrative difficulties still seems to be sound. I shall listen with interest to what the noble Lord has to say in reply, but I am very uneasy about the way in which this proposed procedure is going to work out.
7.48 p.m.
LORD STONHAM: I have listened carefully to this debate and have wondered sometimes how it was possible for some noble Lords completely to ignore, in effect, the fact that in the West Indies there has been virtually the equivalent of a compulsory system of entry certificates for some time. We have had experience of it. The noble Lord, Lord Wade, has just referred to long delays. I shall come to that in a moment; and the particular statement to which he referred is one which I am astonished that such a responsible organisation should send out, because it contains so many unfortunate inaccuracies. I have

1133
been asked the figures. My noble friend Lord Walston said that eight times the amount of work would be put on the authorities in India. That is a complete misconception of the additional volume of work. Let me give your Lordships the figures for 1968. In the case of the West Indies there were only two persons who held entry certificates who were refused admission. From India, only ten who held entry certificates were refused admission. This compares with not ten but a total of 1,263 persons who, in the same year, came here from India and were refused admission. That means that 1,253 out of those who were refused admission did not hold certificates of entry, and all those 1,253 wasted journeys could probably have been avoided.
LORD WALSTON: May I interrupt my noble friend?
LORD STONHAM: It is almost impossible—
LORD WALSTON: I am trying to clarify the point which I think my noble friend has misunderstood. What I understood him to say earlier was that only one-eighth of the Indians who came to this country had entry permits when they came. If, therefore, all of them have to have entry permits before coming, it follows that eight times as many will apply to the High Commission for entry permits.
LORD STONHAM: I should be grateful if my noble friend would allow me to come to that point in due course. I had not yet begun to touch that matter. I will certainly reply to all the points raised. If noble Lords do not agree with my replies that is unfortunate, but at least I shall try to base my replies on the facts.
Let me deal with Pakistan. Last year only seven persons from Pakistan who had entry certificates were refused entry; but a total of 719 persons coming from Pakistan were refused entry. This is a hundred times as many, meaning another 700 wasted journeys. Compare that with the West Indies.
I come now to my noble friend's point about the effect on the work of having compulsory entry certificates. If the number of Commonwealth dependants coming here for settlement this year is the same as last year, there will he a grand total,
1134
from all Commonwealth countries, of 48,650. Of these, there will be 18,718 from India These are dependants, the people we are talking about. But there were in that same year in India some 22,000 applications for entry certificates. If you compare the 18,000 that would have to be compulsory for dependants with the 22,000 certificates granted last year, you see that the amount of work is a little less than doubled. In Pakistan, the proportions were a little different, in that the work would be rather more than doubled: some 9,000 dependants as against some 7,000 applications for certificates. The exact figures for Pakistan are that 9,338 entry certificates were applied for in 1967, and the number of entitled dependants who made application to come last year was 12,535. Taking the two together, on the basis of last year's figures the work in India and Pakistan would be about doubled. I am not disputing for a moment that there will not be more work but there will certainly not be anything like eight times more work. I hope that that disposes of that point.
A great many points have been made. I think it will suit your Lordships' convenience if I deal first with the point raised by my noble friend Lord Gifford, because similar points have been raised by many other noble Lords. Many noble Lords, and certainly my noble friend Lord Gifford, wanted to know how the system of appeals would work, and they expressed very great concern about it. Of course there are bound to be uncertainties at this stage: but we shall most certainly do our utmost to make a success of the scheme. We are agreed—and I tried to make that clear in my first speech—not necessarily that there will have to be more centres, but certainly that there will have to be more staff, and more staff of the right quality. We have already had the training of immigration officers for this particular work; we have already decided to send additional officers with experience of this work from this country. They will be immigration officers and will know what it is necessary to do.
I would remind the Committee; that with regard to appeals in this country, about which my noble friend Lord Walston made a particular point, we have had appeals in this country from the Kenya Asians ever since last summer.

1135
Your Lordships are probably well aware that when we started this scheme last year—after the Act was passed in February—my right honourable friend the Home Secretary sent out two eminent Queen's Counsel. One came back within a month because there was not sufficient work for two. The other eventually came back. Another was appointed to go out, but because of illness did not go; and ever since last summer one of the original two barristers has been in this country to help out and has kindly been doing the work. There has not been a single complaint about this, so far as I am aware. On this point (this is rather anticipating my noble friend's later Amendment, but I must say it now) we just cannot now say that these appeals must be heard there. Certainly that is not our present intention; but if it should be found that the system was working unjustly, of course we would consider it. The suggestion of my noble friend about the Indian Bar is, naturally, another point that will be taken into consideration.
The system we are thinking of at the moment is that, upon deciding to refuse an entry certificate, the certificate officer will hand the applicant (or send him by post) a notice stating briefly the reasons for the decision and informing him of the arrangements for appeal. The applicant will also be given a form on which to give notice of appeal. The information supplied about rights of appeal will explain that the applicant can, if he wishes, be represented on the hearing of his appeal by a relative or a friend in this country or by a voluntary organisation here. All applicants for entry certificates as dependants will of course, unless the application is completely baseless, have sponsoring relatives in the United Kingdom. These are just the same people as those who come to London Airport and see them through now. Subject to the agreement of the voluntary bodies concerned (and we are having discussions with them on May 8) potential appellants will be given the names of one or more organisations from whom advice and assistance may be obtained—organisations not only in this country but in their own country. An appellant will be able to indicate on his notice of appeal whether he wishes to nominate anyone to represent him here.
1136
On receiving the notice of appeal, the entry certificate officer will transmit it to the Home Office, together with a report on the case accompanied by any relevant documentary evidence. There the case will be assigned to one of the lawyers whom my noble and learned friend the Lord Chancellor will nominate to deal with these appeals. Any person or organisation who has been named by the appellant to represent him will be sent copies of the entry certificate officer's report and other papers, and he will be notified of the date and place of the hearing. The decision of the lawyer who hears the appeal will be transmitted to the appellant through the Home Office and the entry certificate officer, and will also be made known to his representative.
The question may be raised whether the entry certificate officer's notice of his decision and the form which the applicant must complete if he wishes to appeal will be translated into languages other than English. This is a matter which will have to be considered in the light of local conditions. In India and Pakistan it has hitherto been found that the extra work and expense involved in translating entry certificate applications and the explanatory leaflets into the local language is not justified because so many applicants cannot read or write in any language.
The noble Lord, Lord Hawke, spoke about having to have a pleader, and I am sure that this is the point he had in mind. It is not a question of printing in any one of six or eight native languages; it is no good if the people cannot read that particular language. But those who are literate can understand sufficient English for the purpose. Oral explanations and advice will be available in their own languages at the entry certificate offices for those who cannot read any written material. Nothing of that kind will be neglected. I do not want to go into details of the actual reinforcement of the officers, but I can assure my noble friend, and noble Lords generally, that the staffs will be adequate, and that those we are sending out will be fully trained people.
My noble friend Lord Gifford raised a point about age limits in relation to entry certificate applications. This is a perfectly valid point to which I can give

1137
a very clear answer. The application will be decided in accordance with the circumstances at the time when the application is made. The noble Lord, Lord Brooke of Cumnor, also raised this point. If the applicant passes the relevant age limit after making the application, and while it is still under consideration, it will certainly not be refused on that ground. There may be a much wider range of considerations—marginal cases—which will all be covered by compassionate considerations, but on that one case I can be very definite.
My noble friend asked whether the new provisions will be administered flexibly. The short answer is, "Yes". In the transitional stage we cannot do more than repeat that if firm arrangements are made to travel before there is a change in the law which could be known, the person will not be refused. There is no question about that at all. After that, when we talk about "flexibility", it will depend on how exceptional are the circumstances. If the circumstances are exceptional they will be taken into consideration. But we have to stick to the rules and this is in the best interests of the immigrant. No one has ever disputed that the present law here is administered humanely. That it is has been said many times and not only by myself; and it will continue to be so administered in the future.
My noble friend also referred to paragraph 80 of the Wilson Report, about the improvements required in the entry certificate system. He asked what progress has been made. Many improvements have been made. One example is that we have a longer course of training for new entry certificate officers in this country, and this includes attachment to the immigration service at London Airport. There are many other improvements of this kind. My noble friend alleged—I think he was speaking of the West Indies—that it takes from six to eighteen months to obtain an entry certificate. This just is not so. I will come to the case of the Bansal brothers in a moment, but most entry certificates are granted without any reference to the United Kingdom at all; they are granted overseas and they are issued promptly.
The point is that there are entry certificates and entry certificates; there are genuine cases, marginal cases and cases that are not genuine. The very marginal
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cases and the cases which are not genuine naturally take a long time. Where there has been a reference to the United Kingdom there may well be some delay. But these are the cases of people who, if they came without entry certificates, would be subject to a long examination; almost certainly to detention and perhaps would have to return to their own country. It is better, therefore, for there to be a delay while the matter is considered in their own country than to have them over here subjected, in their thousands, to the kind of conditions that exist.
The noble Lord, Lord Wade, on this point, referred to Mr. Bansal—the two brothers. The precise reason why this case took so long was there was no entitlement to enter, no entitlement at all. The only reason why entry was eventually permitted was for compassionate reasons, because of the health of the brother. It was a great pity that a decision was not taken before the man died; but the brother had no entitlement, and it is quite wrong to quote that as a typical case.
My noble friend asked about the bailing of prisoners under the appeal system which, he said, would reduce the need to make entry certificates compulsory. The power to grant bail will do nothing to reduce the need for examination or the length of examination on arrival. It will not reduce the delay and suspense before the decision is known. It will not reduce the number of refusals and fruitless journeys and disappointed hopes. This is the whole crux of the matter. So many noble Lords, although they deplore what goes on at London Airport, do not seem to realise that we have to prevent it.
It is all very fine for the noble Lord, Lord Foot, to quote the Wilson Committee Report at length; but the fact remains that we did these things. I said in my speech that we have been trying very hard indeed to persuade people voluntarily to take out entry certificates, but with almost nil results. The noble Lord said that there had been no change in the position. In fact there have been enormous changes. When the Wilson Committee considered India there were only 200 refusals. Last year there were more than six times that number of refusals. Would not the noble Lord say that that was a change? We cannot, we

1139
must not, ignore these things, and the very real suffering. There will be more work but we shall have the people to deal with it.
If I may, I will now deal, briefly, with my noble friend's Amendment to my Amendment, which is only one of the many points he made. I wish to read to him a piece that I took out of The Times only this morning. It was headed:
"Call to end corruption."
The call does not come from the Home Office. As the report says, it comes
"from the Pakistan Immigrants Welfare Association in Bradford, which looks after the interests of more than 1,000 members of the local immigrant community…".
The report goes on:
"Mr. Saleem Khan, the association's secretary, expressed qualified approval for the new measures"—
that is to say, the measures we are now considering—
"and added: 'We shall petition the Pakistan Government to introduce severe penalties for officials who are found guilty of issuing fraudulent documents for personal gain.'"
I am not talking about the volume of this; I am merely saying that here is a Pakistan gentleman in this country, who is in a very responsible position—he is responsible for 1,000 of his compatriots who arc here—and is worried about corruption, about forgery, in Pakistan.
My noble friend Lord Gifford, in his Amendment to my Amendment, wishes to add:
"a current entry certificate granted for the purposes of the said subsection (2)(b) or (2A) shall be conclusive evidence that he is so entitled."
We cannot ignore this point about forgery. My noble friend argued that if the document was forged, then it would not be a certificate of entry according to this subsection. I am afraid I cannot accept that this would be the case. The only reason for the inclusion of this provision in my Amendment is the forgery which we know goes on. I can tell my noble friend the number in all categories with entry certificates who have been refused entry in the last few years. In 1965, the number was 76; in 1966, 47; in 1967, 61; in 1968, 49. It varies between one in 12,000 and one in 20,000. I think this is the argument for the Amend
1140
ment. An analysis made for the Wilson Committee of 36 cases in which people were refused entry in a 12-month period shows that 21 sought admission as visitors, 10 as students, one as a fiancé, one as a fiancée, two were dependent children and one was a returning resident. None were in the category we are discussing. I think we have a good record in this matter, and I hope that my noble friend will accept that his Amendment should not be pressed. If he presses it, I should have to ask the Committee to resist it.
I am grateful for the contribution of the right reverend Prelate the Bishop of Durham, who spoke for the people of his diocese. He asked about the nature of an appeal. I would say to him that in dependants' cases the appeal would be largely on fact, and once the fact is established political and compassionate considerations will not arise. The certificate will cover as of right, if the entitlement to admission is established.
In some discretionary cases—for example, children over 16—there may arise compassionate circumstances to be considered: the extent to which a young person is genuinely dependent on a parent here or another relative is genuinely in need of a sponsor in this country. Then the appeal would extend to consideration of the compassionate circumstances, as well as to the facts, but politics would never enter into this consideration at all.
I have dealt in part with the speech of the noble Lord, Lord Foot. He was critical of the Government and asked whether they had intended this change all along. It is not the case that the Government all along intended to amend the Bill in this way. This House was informed on the same day as the Government took this decision. As I pointed out in my speech, the decision to amend the Bill was prompted by the fact that in our view it was very necessary to make this amendment while we have this legislation before Parliament. Whatever the noble Lord may think, for practical and very real reasons this is a desirable change. The intention to make the change could not be made known too long before it went on to the Statute Book, and therefore there could not be any question of introducing this change by a separate Bill.

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My noble friend Lady Gaitskell said that she did not disagree with entry certificates but was doubtful of success if they were only adjudicated here and not in the country of origin. I think I can assure my noble friend that this point will be considered, if it becomes necessary, but our experience in these matters does not lead us to the view that it will be necessary.
I think I have covered the main points raised by the noble Lord, Lord Brooke of Cumnor, except his point that the Government must now talk this over thoroughly with the voluntary organisations here and overseas. I think this is vastly important. The procedure cannot succeed unless we can have the advice, the help and the co-operation of the voluntary organisations. As they serve so many people here and overseas, I hope that these organisations will co-operate with us and give us their help and advice, because I am completely convinced that the move we are making is very much in the interests of all the people who will be coming here.
LORD GIFFORD: I will deal only with the Amendment which stands in my
Resolved in the affirmative, and Amendment agreed to accordingly.
LORD STONHAM LORD STONHAM moved Amendment No. 12:
After Clause 19, insert the following new clause:
Liability of owners or agents of slops and aircraft for expenses incurred in respect of persons directed to be removed from the United Kingdom.
".—(1) Subject to the provisions of this section, where directions are given under para
name. On the main debate we shall all have to consider carefully the facts and figures given and no doubt shall have to ask for some more before the next stage. I do not intend to press this Amendment. My noble friend referred me to a letter dealing with forgery. I hope that I made it clear that in a case of forgery the holder of a forged entry certificate should not have the right of entry. I have no doubt that my Amendment to the Amendment is technically deficient. I understand that it is only in the case of forgery—and there are only a few of those—that the question has to be reopened, and that in other cases there will be no question of going behind the entry certificate. For these reasons I beg leave to withdraw my Amendment.
Amendment to the Amendment, by leave, withdrawn.
8.20 p.m.
On Question: Whether the said Amendment (No. 10) shall be agreed to?
Their Lordships divided: Contents, 42; Not-contents, 5.

CONTENTS

Albemarle, E.

Greenway, L.

Raglan, L.

Belstead, L.

Gridley, L.

Rankeillour, L.

Beswick, L.

Hawke, L.

Ritchie-Calder, L.

Birmingham, Bp.

Hilton of Upton, L. [Teller.]

Royle, L.

Blyton, L.

Kennet, L.

St. Davids, V.

Bowles, L. [Teller.]

Kinloss, Ly.

Sandford, L.

Brooke of Cumnor, L.

Lansdowne, M.

Serota, Bs.

Burden, L.

Leatherland, L.

Shepherd, L.

Champion, L.

Llewelyn-Davies of Hastoe, Bs.

Soper, L.

Collison, L.

Massereene and Ferrard, V.

Stocks, Bs.

Durham, Bp.

Milner of Leeds, L.

Stonham, L.

Falkland, V.

Newton, L.

Strabolgi, L.

Gaitskell, Bs.

Phillips, Bs.

Vivian, L.

Gardiner, L. (L. Chancellor.)

Plummer, Bs.

Walston, L.

NOT-CONTENTS

Barrington, V.

Byers, L.

Wade, L. [Teller.]

Beaumont of Whitley, L.

Foot, L. [Teller.]

graph 3 of Schedule 1 to the Act of 1962 for the removal of a person from the United Kingdom the owners or agents of the ship or aircraft in which he arrived shall be liable to pay to the Secretary of State, on demand, any expenses incurred by the latter in respect of the custody, accommodation or maintenance of that person at any time after his arrival while he was detained or liable to be detained under paragraph 4(1) of that Schedule.
(2) The foregoing subsection shall not apply to expenses in respect of a person who, when he arrived in the United Kingdom, held a current entry certificate or was the person described in a current employment voucher.
(3) if a person is admitted into the United Kingdom before the directions for his removal have been carried out, or he is so admitted thereafter in consequence of the determination in his favour of an appeal under Part I of this Act (being an appeal against a refusal of admission by virtue of which the directions were given or against the directions themselves), no sum shall be demanded under subsection (1) of this section for expenses incurred in respect of that person and any such sum already demanded and paid shall be refunded.
(4) In subsection (1) of this section 'directions' does not include directions which by virtue of Schedule 2 to this Act have ceased to have effect or are for the time being of no effect; and the expenses to which that subsection applies include expenses in conveying the person in question to and from the place where he is detained or accommodated unless the journey is made for the purpose of attending an appeal by him under Part I of this Act.
(5) Her Majesty may by Order in Council under section 1 of the Aliens Restriction Act 1914 make provision in relation to aliens for purposes corresponding to the purposes of this section."
The noble Lord said: This new clause provides express authority for the Home Office to charge the carrying company with the cost of detaining and maintaining, pending his removal, a passenger who arrives without an entry certificate or other document giving him a prima facie claim to admission, and who is refused admission to this country. The present law on the responsibility of a shipping company or airline with regard to one of their passengers (whether a Commonwealth citizen or an alien) to whom entry is refused is in an unsatisfactory state. The provisions have remained virtually unchanged since the days when all immigrants arrived by sea and those who were rejected could generally be left on board their ship until it sailed. There is power for an immigration officer to give directions to the shipping company or airline which brought the passenger here to remove him; there is also power for the immigration officer to put the passenger on board the ship or aircraft on which he is to be removed and to require the master or commander to ensure his safe custody.
But, since detention on board ship is sometimes—and detention on an aircraft is always—impracticable or inconvenient, the Immigration Service makes use where appropriate of the alternative power of detention on land (under paragraph 4(1) of Schedule 1 to the 1962 Act, or Article
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8(4) of the Aliens Order), on the understanding that the shipping company or airline will still either remain responsible for the passenger's custody or, if it is necessary to detain him in a police station, prison, remand centre or remand home, will meet the cost of his detention there. Detention quarters are, however, provided at public expense at London, Gatwick, Manchester, Glasgow and Prestwick Airports; but at these airports the airlines provide passengers in detention with meals and an escort, and if room is not available in the detention quarters the airline pays the full cost of accommodation elsewhere, often in hotels. Although there is no express provision in the existing law to make the carrying company liable for the cost of detaining a passenger on land, that has been the working arrangement with regard to aliens for the last fifty years and has been applied to Commonwealth citizens since the 1962 Act came into force. The cost to the carriers is now significant.
The airlines have for some time been concerned over the long periods of detention that have occurred in an increasing number of cases before final arrangements for departure are made, and they have been more concerned at the prospect that their liabilities in regard to both Commonwealth citizens and aliens may increase when the appeal system is in operation. On January 21, 1969, B.O.A.C. informed the Immigration Service at London Airport that they would not in future pay for the detention of a passenger on whose admission the Home Office had reached no final decision; they would pay only for the detention of a passenger whose position was no longer in doubt and who was to be removed as soon as practicable. The other airlines followed B.O.A.C.'s lead. As a result of the discussions which then took place between B.O.A.C. (representing the airlines generally) and the Home Office, the airlines agreed as a temporary compromise to continue to meet in all cases the full cost of detention at airports, though not of detention in prisons or remand homes.
The Home Office then put before B.O.A.C. and a number of organisations representing shipowners proposals for clarification and amendment of the law. It is on these proposals that the new clause is based. The carrying companies do not find these proposals acceptable,

1145
and their representatives were given an opportunity to put their objections to my honourable friend the Under Secretary of State, Mr. Rees, at a meeting on April 23. The Home Secretary has given due weight to the arguments put forward on behalf of the carrying companies, but nevertheless remains of the opinion that the Home Office proposals are fair and equitable and should be given the force of law.
The point of view of the carrying companies is that it is for the Government of a country alone to decide which passengers are to be admitted to its territory and which are to be excluded; that it would not be right or practicable for the carriers to purport to do this; that consequently they may, and should, bring to the United Kingdom anyone who holds a valid passport and wishes to come here; and that the United Kingdom Government ought to meet the whole cost involved in examining passengers and refusing entry to some of them. The Home Secretary, on the other hand, considers it right to maintain the general principle that the carrying company is responsible both for removing a passenger to whom entry is refused and for his custody and maintenance until removal is effected. This principle has been recognised in this country ever since the Aliens Act 1905 instituted a system of immigration control. It has undoubtedly given the carriers who bring immigrants on long-haul routes an incentive to avoid carrying passengers who are likely to be rejected. The fact that virtually all passengers from the West Indies who are subject to immigration control arrive with entry certificates is due in large measure to the attitude of the carrying companies; by safeguarding their own financial interest, these carriers are at the same time acting in the interests of their passengers, whose eligibility for admission is settled in advance, and they are also facilitating the operation of immigration control.
The proposals embodied in the new clause involve substantial concessions to the carrying companies and save them most of their present costs, in that they will incur no financial responsibility if the passenger either held an employment voucher or entry certificate, if a Commonwealth citizen (the corresponding documents in the case of an alien will be a labour permit or visa) or is eventually
1146
admitted to this country, whether as the result of an appeal or otherwise. They then pay nothing. It is also relevant that when the appeal system is in force passengers who appeal against refusal of entry will be eligible for release or; bail, and that while a passenger is out on bail his accommodation and maintenance will not be the responsibility of the carrying company. It is difficult to say at this stage whether under the appeal system the cost to the carrying companies of keeping passengers in detention will increase or diminish: that will depend on the speed with which appeals can be disposed of and the extent to which the appellate authorities make use of their power to release appellants on bail. But a tentative estimate of the effect of the concession now proposed is that when the appeal system is in operation the burden of detention costs for passengers to whom admission is initially refused will be shared between the carrying companies and the Home Office in a proportion of something like three to one.
In addition, the new clause relating to entry certificates, if approved, should alleviate the burden on the carrying companies by reducing the number of passengers to whom admission is refused on arrival, and by reducing to an even greater extent the number of passengers who have to be detained for long periods, since these are mostly Commonwealth citizens seeking admission as dependants. I consider the agreement we have come to is perfectly just and fair and will save the carrying companies a good deal of money—rightly, I think—for matters which should not be their responsibility, and it is an arrangement which should appeal to the Committee. I beg to move.
LORD BROOKE OF CUMNOR: I welcome this new clause, so far as it goes. I doubt whether it goes far enough, particularly in the light of what the noble Lord has just said. It seems to me to be on the fringe of quite a considerable subject which deserves rather more prolonged attention. I entirely agree with the noble Lord when he says that the present law is out of date. We have been carrying on much as we were, ever since 1905. That was a time when travel documents were rudimentary compared with what they are now. The whole system of entry certificates and employment vouchers is all newly devised since

1147
then. I am quite sure the Government have sought to remove certain injustices.
I was not surprised when the noble Lord said that this new clause was not agreed with the shipping companies. Even as it stands I can see certain injustices. The shipping company cannot tell whether an entry certificate is forged or not. If I am right in my interpretation of the Bill, the carriers will get relief under this clause only if the passenger concerned holds a genuine entry certificate, or if he is genuinely the person described in an employment voucher. It is a very good thing that the carrying companies and airlines should satisfy themselves that the people who are coming here and will require an entry certificate, or an employment voucher, have got one, but I do not see how they can possibly apply the elaborate tests which now sometimes have to be applied by immigration officers and their staffs in order to ascertain whether the certificate is genuine. It certainly seems hard on the carrying companies that, if I read this new clause aright, they will get relief under it only if the certificate is genuine, and not if it is forged.
In every case it seems to me, even where the entry certificate is a valid one, if for any other reason the passenger is not admitted into the United Kingdom the carrying company will still have to bear the cost of repatriating him. It seems to me a new look is needed at the Home Office. I was not present at the discussions, and I had no knowledge of the meetings held in January and April. It seems to me that a new look is needed now at the whole sphere of responsibility of the shipping companies and the airlines, and at the extent to which they should have to bear any costs, either of maintenance here or, on refusal of entry, of deportation, where the passenger concerned had what appeared to be a genuine travel document, or a sufficiency of genuine travel documents to ensure him entry if there was nothing else against him.
If that is not so, it seems to me that we are putting our law in this country behind the law in other countries. The noble Lord will correct me if I am wrong, but I believe I am right in saying that an airline or a shipping company which
1148
is taking passengers to the United States, or Canada, is relieved of all financial responsibility should entry be refused, if the airline had satisfied itself that the passenger had an apparently valid visa, or entry certificate, or other document which seemed in proper form to ensure him entry into the country concerned.
LORD STONHAM: May I interrupt the noble Lord on the question of the United States and Canada? Both countries have embodied in Statutes a rule that the carrying company is responsible both for removing a passenger to whom entry has been refused and for his custody and maintenance until removal is effected. That is their law.
LORD BROOKE OF CUMNOR: That is not quite answering my question, because I asked whether it was their law if the passenger concerned had a document which appeared to be a valid visa or valid entry certificate or other paper which, prima facie, entitled him to enter the United States or Canada. I think everybody would grant that a shipping company or an airline which just lands a person in a country with no documentation at all should naturally be required to take him away again at its expense because it had been negligent in so doing. But a shipping company or an airline that has seen what appeared to be valid documents, appearing to entitle the person concerned to enter the country, is surely unjustly treated if it then has to bear the cost of maintenance and subsequent removal should entry be refused.
I believe I am right in saying—again the noble Lord will correct me if I am wrong—that Australian law imposes no obligation at all on the shipping companies or the airlines in this matter. The truth seems to me to be that the United Kingdom is now lagging behind other countries. I certainly do not wish to challenge this Amendment, so far as it goes, but I would strongly suggest that between now and presentation of the permanent legislation which we all know is coming, to catch up the whole law relating to Commonwealth immigration and alien immigration, there should be a thoroughgoing investigation of the liabilities of the shipping companies and the airlines by an impartial body which will ensure that justice is done. I appreciate the difficulty of making further Amendments now. I am sure the noble

1149
Lord will appreciate my difficulty in having to deal with this subject at very short notice, because I had none of the detailed acquaintance that he had with the negotiations that have been going on.
LORD STONHAM: I am sure the noble Lord does not want to go into this matter in detail, but I will certainly look at the points he has raised. Of course, practice in other countries varies considerably. I have not the details of Australia. Certainly the position in Canada is very much what we propose in the United Kingdom. With regard to the noble Lord's point about the carrier having to pay for the return passage, even for a holder who had an entry certificate, this would not normally involve extra expense. It would mean the person's occupying on an aeroplane that was returning a seat which would otherwise be empty.
On the point about the forged entry certificate or the forged voucher, of course there is some injustice whoever bears the cost, whether we pay for it or the carrier does. But of course it is the carrier who brought the person with a forged document. It is a fact that the relief we have given to carriers by this clause—and I think it has been given to them fairly and rightly—is considerable. The incidence, therefore, of expense in these very marginal cases of forgery is likely to be very small indeed. But certainly I will look generally at what the noble Lord has said.
On Question, Amendment agreed to.
Clauses 20 and 21 agreed to.
Clause 22 [Short title, interpretation and commencement]:
8.45 p.m.
LORD STONHAM: I beg to move Amendment No. 14. This Amendment supplies a definition of the term "employment voucher" which is used in the Government Amendment to Clause 9 and in subsection (2) of the new clause about liabilities of carrying companies.
Amendment moved—
Page 14, line 3, at end insert—
("'employment voucher' means a voucher of the kind described in section 2(3)(a) of the Act of 1962;").—(Lord Stonham.)
On Question, Amendment agreed to.
LORD STONHAM LORD STONHAM moved Amendment No. 15:
Page 14, line 17, at end insert ("'ship' includes every description of vessel used in navigation and a hovercraft as defined in section 4(1) of the Hovercraft Act 1968.")
The noble Lord said: I beg to move Amendment No. 15. With this Amendment I should like to consider Amendment No. 25. These are drafting Amendments consequential on the new clause about liabilities of carrying companies. Amendment No. 15 adds to Clause 22(2) a definition of "ship" which is the same as that used in the provisions of Schedule 1 to the Commonwealth Immigrants Act 1962 about the detention and removal of persons to whom admission is refused. The second Amendment deletes from paragraph 3(2) of Schedule 2 to the Bill words which are no longer needed in consequence of the first Amendment. I beg to move Amendment No. 15.
On Question, Amendment agreed to.
LORD STONHAM LORD STONHAM moved Amendment No. 16:
Page 14, line 30, after ("(5)") insert ("Sections (Power to refuse admission to wives and children under 16 if they do not hold entry certificates) and (Liability of owners or agents of ships and aircraft for expenses incurred in respect of persons directed to be removed from the United Kingdom) shall come into operation on the passing of this Act and the other provisions of").
The noble Lord said: Clause 22(5) in its present form empowers the Secretary of State to make orders fixing dates on which the various provisions of the Bill are to come into operation. The effect of the Amendment is that the new clauses mentioned in it will come into operation as soon as the Bill receives the Royal Assent, without any commencement order having to be made by the Secretary of State. The reason for bringing the new clause relating to entry certificates into force immediately is to reduce 1.0 the minimum any influx of immigrants seeking to avoid the new requirement. There will, however, as I have already made clear, be transitional arrangements to prevent hardship to passengers who had made firm arrangements to travel to the United Kingdom before the change in the law was known. The reason for bringing the new clause relating to the liabilities of carrying companies into force

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immediately is that the effect of the present law is uncertain. I beg to move.
LORD GIFFORD LORD GIFFORD moved Amendment No. 17, as an Amendment to the Amendment:
Line 6, leave out ("on the passing of this Act") and insert ("at the end of the period of three months beginning with the day on which this Act is passed").
The noble Lord said: Amendment No. 17, which I beg to move, would delay the coming into operation of these two sections for a short period of three months. I move this Amendment for two reasons. The first reason, which has been dealt with to a large extent by my noble friend, in fact takes me back to the early hours in a morning of February last year when I moved a similar Amendment in order to ensure that during the transitional period there should be no hardship in another case where the immigration laws were being very peremptorily changed. My noble friend has said—and I accept absolutely what he has said—that transitional arrangements will be made in that those who have fixed travel arrangements made before the coming into operation of the Act will be allowed in.
The only other point I would make on transitional arrangements concerns people who may have no knowledge of the passing of this Act when they come to this country. No doubt many of them will be told by the carrying company what the new position is. But some may not be told, and I should hope that they also, if they genuinely do not know that they ought to have entry certificates and can prove their relationship, will be allowed in.
The second reason why I put this Amendment down was to prove whether in fact enough time is being given to get this new change in the law working and the new machinery into operation. I have to come back to the argument which has been going on about increasing the work eightfold. Taking the case of India, I note that in paragraph 72 of the Wilson Report it is said—and I am speaking now of the High Commission—
"Arrangements for reception and interviewing were also reasonably adequate, although it appeared that they were subject to considerable strain in the summer and monsoon seasons when the number of applicants reaches its peak."
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That sentence was written in relation to India and Pakistan, and in relation to the very small number of people in those countries applying for entry certificates. If the number of applicants is to increase dramatically, obviously provision must be made, and for there to be time to make that provision within the space of a few weeks seems to me to be unlikely. My noble friend has already assured us that there will be adequate machinery but I think this point must also be borne in mind most carefully by the Government.
Another point occurred to me as my noble friend was proposing this Amendment. Although the clause regarding entry certificates will come into operation immediately, of course technically under the law there will be no right of appeal against the refusal of entry certificates until the rest of the Bill is brought into operation. I gather that arrangements are being made to counter that but this again seems to be an argument for not bringing the Bill into operation so soon. I am seeking more for reassurance than to make an issue of this and I hope my noble friend will be able to give me that reassurance. I beg to move.
8.54 p.m.
LORD STONHAM: I had assumed that my noble friend had tabled this Amendment for the reasons he has now made clear; namely, to gain information and to seek assurance, and I am grateful to him for telling me that at once. I will repeat the assurance I have already given, that the Home Secretary has very much in mind the hardship that would be caused if this new requirement was enforced against immigrants who had made arrangements to travel before the date of the Royal Assent, and suitable arrangements will be made to cover such cases. I do not want to say what those arrangements are, other than that they will be adequate, because such concessions are open to abuse and we do not want to defeat our object. As my noble friend will remember, when immigration control was extended to certain United Kingdom passport holders last year the control was not applied with full rigour in the early stages, and I believe it is accepted that the transitional arrangements we then made were generally considered to be reasonable in the circumstances.
The second point which my noble friend put forward was whether we have

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allowed sufficient time to put the new machinery into operation. The machinery with regard to appeals was really his third point, and as I indicated—but perhaps he was not here—we are making extra statutory arrangements with regard to appeals and I am sure that they will be satisfactory. They will apply only to Commonwealth immigrants and not to aliens. I do not think there will be any difficulty there.
The only question which arises concerns the volume of work. Again I must try to correct my noble friend's misapprehension that even in India the work is likely to increase eightfold. Nothing of the kind. I quoted the figures, and in round terms some 22,000 entry certificates were applied for in India, whereas the number of entitled dependants coming here from that country last year was between 18,000 and 19,000. So if the whole of those entitled dependants had been obliged to apply for entry certificates the work of the people concerned with the entry certificate procedure in India would be not quite doubled.
LORD GIFFORD: One gets confused with figures, but can my noble friend say how many Indian dependants who came in last year had entry certificates?
LORD STONHAM: Not in precise figures, but about one in eight, so if 18,600 came in last year it means that a little over 16,000 did not have entry certificates. If those who have come this year are of a like number and they are obliged to apply, that is 16,000 more against a total of 22,000 applied for. I am merely making the point that it does not double the work and it is nothing like eight times. But there is more work and this we are providing for as quickly as possible, and there is no reason to think that the new machinery will not be in operation.
If we accepted my noble friend's Amendment and allowed an interval of three months before it came into operation there would be hardship and misery and we should have people rushing into London Airport and things of that kind. I am sure that that is the last thing my noble friend wants. Therefore, in view of these answers to his questions I hope he will feel able to withdraw his Amendment to my Amendment.
LORD GIFFORD: I am grateful to my noble friend for his reply but, of course, even something close on double the amount of work is a great deal more work. With regard to his prediction that there might be a rush, I am sure that he will not want to encourage people, even by what he says now, to try to come in and beat the ban. It is not really a question of beating the ban, for people who come in and are unauthorised between now and the Royal Assent will be turned back if they are not qualified. I hope my noble friend can give the assurance, as in fact I think he has done, that the entry certificate application procedure will be so well managed that there is no need for anyone to be worried and to come in quickly in order to try to avoid it. I am sure that everything will be done—and I hope it is enough—to ensure that this new machinery can operate within such a short time. I do not intend to press my Amendment further, but beg leave to withdraw it.
On Question, Amendment to the Amendment, by leave, withdrawn.
On Question, Amendment agreed to.
Clause 22, as amended, agreed to.
Schedule 1 [The adjudicators and the Tribunal]:
LORD STONHAM LORD STONHAM moved Amendments Nos. 18 to 20:
Page 15, line 18, leave out ("Treasury") and insert ("Minister for the Civil Service")
Page 15, line 25, leave out ("Treasury") and insert ("said Minister")
Page 15, line 27, leave out ("the Treasury") and insert ("that Minister")
The noble Lord said: I beg to move, in Schedule 1, Amendments Nos. 18 to 20, and with these I should like to take Nos. 22, 23 and 24, which have the same purpose. The present distribution of functions between the Treasury and the Civil Service Department in relation to the pay and pensions of holders of judicial offices, including members of tribunals, is anomalous in that the Treasury retains its responsibility with regard to pay and conditions of service generally, whereas its functions with regard to pension arrangements have been transferred to the Civil Service Department. This anomaly will be corrected before long by the making of a Transfer of Functions

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Order, transferring to the Civil Service Department the Treasury's remaining functions in relation to holders of judicial offices; but it is now clear that this Order will not be made before the Bill receives the Royal Assent. Schedule 1 must therefore be made to reflect the existing distribution of functions between the two Departments, and that is the effect of these Amendments. I beg to move.
On Question, Amendments agreed to.
9.2 p.m.
LORD GIFFORD LORD GIFFORD moved Amendment No. 21:
Page 15, line 39, at end insert:
(" .For the purpose of hearing appeals under section 2(1)(c) of this Act, the Secretary of State shall in so far as is practicable direct that adjudicators sit in the country of origin of the appellants.")
The noble Lord said: This Amendment is perhaps even more of a probing Amendment than the last one, since I think I am right in saying it is not even necessary to achieve the purpose I seek to achieve. It seems to me that under the Schedule as at present drafted, the Secretary of State can direct adjudicators to sit in countries other than the United Kingdom. Other noble Lords who have spoken earlier this afternoon, and indeed my noble friend, adverted to this question of where the adjudicators should sit. I do not want to repeat what they said, except to ask, and to urge very strongly, that consideration be given to the question of allowing the adjudicators to sit in the country of origin.
By sitting there they would be able to make themselves aware of local conditions. Clearly, local conditions are very important, and it is important that they should be understood. The adjudicators will, above all, be able to see the person whose appeal it is, to question him, to assess his reliability as a witness. They will be able also to see and question the officer against whose decision the appeal is being made, and this also would no doubt be of very great importance. In so many of these cases at the moment one finds that mistakes have been made at the ports of entry, without any malice by the immigration officer-mistakes which can be easily straightened out on appeal. This is what this Bill
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is about. No doubt the same kind of mistakes will from time to time be made by officers of the High Commission, and it seems to me that to have an adjudicator, wherever possible, able to interview and hear evidence from the principal parties involved, so that he can speedily put right any mistake which has been made, will be very helpful in ensuring that this new machinery works fairly and justly. Many speakers have already referred to the difficulties which are going to arise with paper appeals to London, and I do not propose to follow that argument any further.
My noble friend has already indicated that, although this was not their intention, the Government will give it serious thought. I hope also that the possibility of making experiments in having adjudicators both here and in the country of origin will be seriously considered. It is of paramount importance that this appeal machinery works properly. Under the Bill as conceived the appeal machinery was admirable and was as close to fairness and justice as one could have imagined. Under the now amended Bill all sorts of problems will arise, and I hope that my noble friend will repeat the assurance that this question of adjudicators sitting in foreign countries will be given very serious consideration, and even experimented with. I beg to move.
LORD STONHAM: Let me at once assure my noble friend that the terms of Schedule 1 as it stands are wide enough to permit adjudicators to be sent overseas to hear appeals if, in the light of experience, the Government decide that this is necessary. But it is not at present intended, when Part I of the Bill comes into force, to direct adjudicators to sit overseas. The Wilson Committee gave careful consideration to this point, and came to the conclusion that in entry certificate cases the appeal would:
"have to be to an adjudicator in this country. This means"—
the Committee said—
"that it will not be practicable, as it will be in exclusion appeals, for the oral evidence of the appellant to be given before the adjudicator. We do not think that this is likely to prejudice the appellant's chances of success."

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We have recent experience in Africa, where we have adopted both methods. Two lawyers went out to Kenya, and then, for very good reasons, since last summer the appeals have been only here, I think to the general satisfaction. In fact in Nairobi the number of appeals heard was 23, and the number dealt with in the United Kingdom from August, 1968, to Easter of this year is 46. So the totals are similar. It has been done quite satisfactorily. There have been none of the troubles or minor disasters that have been forecast. We feel that before we are committed further on this we ought to have a little more experience of this arrangement, which has worked satisfactorily in this country for the last six months, and we ought to give it a fair trial before any alternative is tried, particularly having regard to the fact that we did start this overseas. I assure my noble friend that we will, and we must, keep this under very close review. We mean to do all we can to ensure its success, despite the difficulties, and therefore consideration in overseas countries is not precluded. We shall not need to legislate again for it, but it will not be done at present. Certainly we intend to start with appeals and adjudications in this country. I am most grateful to my noble friend for the other things he has said.
LORD GIFFORD: In accepting that assurance I would point out that I do not believe that the Kenya experience is really useful in considering this new problem. I believe I am right in thinking that with Kenya Asians the main problem is not to establish whether or not a family relationship exists in most difficult circumstances, but to establish questions of priority as to whether persons who previously had a right to come into the country are being unjustly excluded by a ceiling which is being placed on the number of work vouchers. I may be wrong in that, but I should not have thought that the same agonising question of whether or not there is a family relationship applies in the more stable society of the Kenya Asians. However, no doubt we shall have some opportunity at a quite early stage, of seeing how the Government's present intentions work, and shall then be able to make representation to change them. I am
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obliged for the assurances, and beg leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
LORD STONHAM: I beg to move Amendments Nos. 22, 23 and 24.
Amendments moved—
Page 16, line 15, leave out ("Treasury") and insert ("Minister for the Civil Service")
Page 16, line 22, leave out ("Treasury") and insert ("said Minister")
Page 16, line 24, leave out ("the Treasury") and insert ("that Minister")—(Lord Stonham.)
On Question, Amendments agreed to.
Schedule 1, as amended, agreed to.
Schedule 2 [Suspension of Directions for Removal Pending Appeal]:
LORD STONHAM: I beg to move Amendment No. 25.
Amendment moved—
Page 17, line 40, leave out ("and 'ship' have the same meanings respectively 'o) and insert ("has the same meaning").—(Lord Stonham)
On Question, Amendment agreed to.
Schedule 2, as amended, agreed to.
Remaining Schedule agreed to.
LORD STONHAM LORD STONHAM moved Amendment No. 27:
In the Title, line 13, after ("Kingdom") insert ("to make provision as respects the holding of entry certificates by certain persons to whom the said section 1 applies who seek admission into the United Kingdom; to make the owners or agents of ships and aircraft liable for certain expenses incurred in respect of persons to whom the said section 1 applies who are directed to be removed from the United Kingdom")
The noble Lord said: This Amendment inserts in the Long Title of the Bill references to the provisions about entry certificates and the liabilities of carrying companies which are contained in earlier Government Amendments. These provisions are not covered by the Long Title in its present form. I beg to move.
On Question, Amendment agreed to.
Title, as amended, agreed to.
House resumed: Bill reported, with the Amendments.

AUCTIONS (BIDDING AGREEMENTS) BILL
Brought from the Commons; read 1a, and to be printed.
FOREIGN COMPENSATION BILL
Returned from the Commons with certain of the Amendments agreed to, and one other Amendment disagreed to, with a Reason for such disagreement: the said Reason to be printed.

TANZANIA BILL [H.L.]
9.13 p.m.
THE MINISTER OF STATE, FOREIGN AND COMMONWEALTH OFFICE (LORD SHEPHERD): My Lords, I beg to move that the Tanzania Bill be read a second time. The main purpose of the Bill is to enable existing United Kingdom laws to be given the same effect in relation to Tanzania as they have in relation to other countries in the Commonwealth, and had in relation to Tanganyika and in some cases Zanzibar before their merger. The House will recall that Tanganyika and Zanzibar joined to form a new State on April 26, 1964, known as the United Republic of Tanganyika and Zanzibar, and became the United Republic of Tanzania on October 29, 1964. The Bill is thus similar in intent to Acts making consequential provisions in respect of United Kingdom law rendered necessary by the attainment of independence by a Commonwealth country or its subsequent adoption of a republican status.
The Bill is primarily of an enabling character and seeks to achieve only a limited number of objectives directly. The first and most important of these is the amendment of the British Nationality Act 1948 by substituting Tanzania for Tanganyika and Zanzibar in the list of Commonwealth countries in Section 1(3) of that Act. In addition, under the provisions of this Bill, British Protected Persons who obtained such status by virtue of their connection with Tanganyika before the country's independence, but who never became Tanganyika citizens, shall cease to be British Protected Persons on obtaining Tanzanian citizenship.
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The second direct objective the Bill seeks to achieve by the provisions of Clause 2 is somewhat removed from its main purpose. It concerns the Colonial and Other Territories (Divorce Jurisdiction) Acts which, broadly speaking, enabled colonial courts to grant divorces to expatriates and were a consequence of the colonial system of government. After Tanganyika became independent its courts continued under these Acts to grant divorces which are considered to be defective in United Kingdom law. The opportunity has therefore been taken to include a provision in the Tanzania Bill to validate such divorces. It is proposed to achieve this by preserving the jurisdiction of Tanganyika courts under these Acts from independence to May 1965, when they ceased to possess such jurisdiction under Tanzanian law, and to preserve such jurisdiction in relation to proceedings instituted during that period.
Since the status of a "British" ship is determined by the national status of its owner, a consequence of adding Tanzania to the list of Commonwealth countries in Section 1(3) of the British Nationality Act 1948, which would be achieved by Clause 1 of this Bill, is to make Tanzanian citizens British subjects for the purposes of British law and consequently ships owned by Tanzanian citizens British ships. The purpose of Clause 3 of the Bill, therefore, is to ensure that ships owned by Tanzanian citizens are not brought within the scope of United Kingdom legislation, and this would be accomplished by the exclusion of Tanzania from the scope of the Ships and Aircraft (Transfer Restriction) Act 1939, and the Whaling Industry (Regulation) Act 1934.
The enabling powers which would be conferred by Clauses 4 and 5 in the Bill are designed to empower Her Majesty in Council to apply in relation to Tanzania those United Kingdom enactments of Parliament, as may be considered appropriate, as they apply in relation to other Commonwealth countries. The application of such enactments, of course, will affect only the law of the United Kingdom and of those territories for which Her Majesty's Government have responsibility. It does not have effect as part of the law of Tanzania. It would be intended to exercise the power of application shortly after enactment in relation to a number of Statutes, and the Orders

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in Council would be laid before Parliament. My Lords, that is the general purpose of the Tanzania Bill, and I hope the House will give its unanimous approval to the Bill's Second Reading. I beg to move.
Moved, That the Bill be now read 2a.—(Lord Shepherd.)
THE MARQUESS OF LANSDOWNE: My Lords, I thank the noble Lord, Lord Shepherd, for giving such a clear explanation of the Bill. It is a Bill that has been a very long time coming—I do not refer, of course, to to-day. It could have been presented to us ever since April, 1964; but I am not going to argue with the noble Lord on that account. I was grateful to him for explaining the date, May 17, 1965, which was mysterious to me, and I now understand that perfectly. Your Lordships will appreciate that this is purely a tidying-up operation, and I think Her Majesty's Government are to be congratulated on the way they have tidied things up.
LORD SHEPHERD: My Lords, I am most grateful to the noble Marquess. He chided us about the time we have taken. I did at one moment think he was referring to to-day, but, if I may say so, looking at the clock, better later than never.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

MEDICAL BILL [H.L.]
9.18 p.m.
THE MINISTER OF STATE, DEPARTMENT OF HEALTH AND SOCIAL SECURITY (BARONESS SEROTA): My Lords, I beg to move that this Bill be now read a second time. This measure can be briefly described as one designed to introduce some sensible and very necessary modifications in the financial and disciplinary powers of the General Medical Council. The Council, which is an independent statutory body, has had the task of governing the affairs of the medical profession ever since 1858, by supervising and improving medical education, by keeping and publishing a register of duly qualified doctors and by taking disciplinary action when
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required in cases of criminal convictions or serious professional misconduct. It regards itself, and acts, not as an association for protecting professional interests, but as an independent and impartial body whose primary task is to protect and serve the best interests of the public. I know that this view is very strongly held by the present distinguished President, the noble Lord, Lord Cohen of Birkenhead, who will be speaking to us in this debate to-night; and I should like, to take this opportunity—and I believe that noble Lords present will join with me—to pay tribute to the services rendered by him and his colleagues on the Council. They have been fully consulted about the framing of this Bill, and are in full agreement with the proposals it contains. Its provisions will, of course, be of particular concern to the medical profession. They are unlikely to be of direct interest to the general public as a whole—except in one extremely important respect which I will mention in a few moments.
I should also explain, before embarking on a brief description of the main provisions of the Bill, why it does not include the provision for vocational registration recommended by the Royal Commission on Medical Education under the distinguished chairmanship of the noble Lord, Lord Todd, whereby a doctor on satisfactory completion of a specified period of training in a specialty could become a registered practitioner in that specialty.
The Royal Commission saw this as complementary to their recommendations for postgraduate professional training, and envisaged that the General Medical Council would act as the registration body for vocational registration, as it already does for registration of basic qualifications. Legislation will be required to allow the General Medical Council to implement the Royal Commission's recommendations on vocational registration, and this raises a number of complex issues which necessarily take time to explore. Moreover, it cannot properly be considered apart from the other recommendations of the Royal Commission relating to post-graduate medical education which the Government are still examining. My right honourable friend the Secretary of State for Social Services, in the Statement which he made

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in another place on April 14, about medical school places, said that he had received most, but not yet all, of the views of the various bodies he had been consulting on the Royal Commission Report, including their recommendations on the development of postgraduate medical education. When these necessarily wide consultations had been completed he would make further announcements as necessary. I know that noble Lords—and indeed, noble Baronesses—are waiting impatiently for a further Government statement on these important issues, and I hope that it will be possible to make one before too long. In the meantime, the provisions of this Bill are urgently needed and I can assure your Lordships that they will in no way prejudice any future action on the recommendations of the Royal Commission, including the important question of vocational registration.
Turning now to the Bill itself, its main purpose is to enable the General Medical Council to require an annual fee to be paid by a doctor for the retention of his name on the Medical Register. Unlike most professional bodies, the Council cannot at present charge such a fee and hitherto its income has been derived from the fees paid by doctors on initial registration. The initial registration fees are at present £9 for provisional registration and a further £12 for full registration, which are considerable sums for a young doctor in his first 12 or 18 months of practice and cannot well be increased. Even so, they have not provided the Council with a sufficient or dependable income. The Council's expenditure has trebled since 1960 and will, we understand, continue to rise. Their annual deficit is now considerable and they badly need a means of increasing their income and placing it on some more flexible basis.
Clause 5 is an attempt to remedy this situation by empowering the Council to charge an annual fee for the retention of a doctor's name on the Register, in addition to an initial fee for registration. Their scheme would require approval by the Privy Council. Although introduction of annual fees is intended to provide the Council with an assured income, it will, incidentally, enable them to reduce the initial fees payable on provisional
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and full registration. Anyone who failed to pay the annual retention fee could, subject to certain safeguards, be removed from the Register under the new powers. The main purpose of the remainder of Clauses 1 to 10 is to simplify the registration procedure and make consequential changes in the administration of the General Medical Council.
At this point I should also like to draw the attention of the House to the provisions of Clause 12, which substitutes I a new Section 25 for the existing section in the 1956 Medical Act. This provides that a person can obtain temporary registration only, among other conditions, if
"he is or intends to be in the United Kingdom temporarily".
This provision has in the past aroused a certain amount of criticism, particularly in those few cases where it has prevented a doctor already practising in this country from continuing to practise if he or she can no longer be said to be "temporarily resident in the United Kingdom"—for example, owing to marriage to a United Kingdom resident. This limitation serves no useful purpose and prevents a few doctors who wish to do so, and who are otherwise qualified to do so, from practising in this country. Therefore, Clause 12 removes the present limitation on temporary registration being granted only to persons who are temporarily resident in this country. I may also mention, perhaps, that since temporary registration will under this clause be able to run for an indeterminate period, Clause 16 makes certain extensions in the powers of the Disciplinary Committee in relation to temporarily registered practitioners.
My Lords. I now turn to the other part of the Bill, which concerns certain changes in the General Medical Council's disciplinary powers resulting from Clauses 13 to 16. At present, when a doctor has been convicted of a criminal offence or has been found guilty of "serious professional misconduct"—which is the new formula the Bill proposes should replace the existing and somewhat archaic expression "infamous conduct in any professional respect"—the only power open to the Disciplinary Committee of the Council is to erase his name from, or, to use more common terminology, to strike him off, the Medical

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Register. In some cases, judgment is postponed for up to twelve months to give the doctor a chance to show that he has mended his way and is still fit to practise; but this has not been found to be an entirely satisfactory alternative. The most important change introduced by Clause 13 is the addition of suspension from the Register, subject to the same safeguards by way of appeal, as an alternative to erasure. The effect of suspension is that, though the doctor's name remains on the Register, the suspension will be recorded there while it lasts, and he will be treated as though unregistered for the period of the suspension. The Disciplinary Committee will be able to watch the progress of a suspended practitioner and, where appropriate, remove his suspension without delay. Alternatively, it can extend suspension or strike him off.
Finally, my Lords, I come to the provision I mentioned at the outset of my remarks, which is designed to close the disturbing loophole in existing legislation revealed by the recent Petro case, which I referred to in a debate in this House on March 26, when I mentioned that we were discussing this problem with the General Medical Council. The House may recall that under the existing law this doctor was able to continue to practise and to issue prescriptions for hard drugs for many months after the Disciplinary Committee had decided to strike him off the Register, while his appeal to the Judicial Committee of the Privy Council was pending. The General Medical Council's direction that his name be erased from the Register was given on May 31, 1968, but erasure was not effective until October 30—five months later. During this time he was free to continue prescribing. The harm that was done we cannot possibly know exactly, but the potential damage is indicated by the fact that in May alone he is known to have prescribed 24,000 ampoules of injectable methylamphetamine to more than 100 patients.
Clause 15 of the Bill now provides that when the Disciplinary Committee decides to erase or suspend a doctor from the Register it will also be able to suspend his registration with immediate effect rather than from the end of the appeal period or, if an appeal is lodged, from the date of its dismissal. The intention of this new power is to enable
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the Disciplinary Committee, whim the public interest demands, to prevent a doctor from practising during the appeal period and while an appeal is being determined, This, as the Petro case showed, can be quite a protracted process, during which serious harm can be done. This power of immediate suspension, together with the amendment in Clause 14(1) of the requirement for giving notice to a doctor of the Disciplinary Committee's decision, will, we believe and hope, effectively close this loophole. Although it is unlikely to be used frequently I am sure that noble Lords will agree that it is in the public interest that such a power should be provided in this new legislation in the light of recent events and the public concern that has been expressed.
My Lords, from what I have said the House will see that the object of the Bill is to provide some very necessary powers for stabilising the finances of the General Medical Council, and introduces some—and, in relation to the power of immediate suspension, very important—improvements in the Council's disciplinary and registration procedures. As I indicated, the General Medical Council itself agreed with the proposals of the Bill and the medical profession broadly accept them. I hope in these circumstances it will receive a welcome from all sides of your Lordships' House. I beg to move.
Moved, that the Bill be now read 2a.—(Baroness Scrota.)
9.31 p.m.
LORD NEWTON: My Lords, I am sure that all who stayed to listen to the noble Baroness moving her Bill will be as grateful as I am for her explaining the highlights so clearly and, I may say, briefly. I do not think it is necessary for me to say very much because not only is the hour late but the Bill, which I certainly support, is concerned mostly with details of administration. I should like at the outset to join with the noble Baroness in the tributes which she has properly paid to the noble Lord, Lord Cohen of Birkenhead, and his colleagues on the General Medical Council.
This Bill is the latest but, I imagine, not the last of a long list of Statutes which define the conditions under which a person may practise medicine and enable those who do practise that ancient and honourable profession to regulate,

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control and discipline themselves. So far as I am aware, the first enactment was the Physicians Act of 1540 in the reign of Henry VIII. This Act lasted for 318 years, until 1858, when the first Medical Act was passed. Thereafter there was a spate of enactments affecting the profession, the latest being the Medical Act of 1956 which the Bill before us amends. Even that Act was largely a consolidating measure.
The Explanatory Memorandum of the Bill tells us, and the noble Baroness told us herself, that the main purpose of the Bill is to enable the General Medical Council to require an annual fee to be paid by a registered practitioner for the retention of his name on the Register. I can see that that is the main purpose; but to me, at any rate, the most important provision is the one which enables the Disciplinary Committee of the Council to suspend a doctor as an alternative to removing his name from the Register. That seems to me to be eminently sensible. I agree with the noble Baroness that it is very wise in these days, when the occasional black sheep—she mentioned one—abuses his power by prescribing hard drugs irresponsibly, that suspension may be made immediately effective although it is subject to appeal to the High Court.
As I had expected, the noble Baroness told us that the Bill meets the wishes and the agreement of the General Medical Council and is generally approved by the profession. I hope that it is, though I cannot help feeling that there may be some doctors who will regret the fact that they will have to pay an annual fee for registration instead of only one. I am sure, therefore, that the House ought to give this Bill a Second Reading. I have only one mild regret about the Bill and that is the banal phrase, "serious professional misconduct" which is substituted for the old phrase "infamous conduct in a professional respect". The older, the latter, phrase always seemed to me to have a majestic, solemn and appropriate ring about it.
9.35 p.m.
LORD COHEN OF BIRKENHEAD: My Lords I am sure that all your Lordships would wish to share Lord Newton's expression of gratitude to the noble
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Baroness, Lady Serota, for her clear exposition of the provisions of this Bill, and I should like to express my warm thanks to both of them for the tributes they have paid to me and to my colleagues. I do not propose to speak at length, but there are certain matters which I think need to be filled in in relation to what the noble Baroness has said.
The main purpose of this Bill, of course, is to enable the General Medical Council to charge an annual retention fee, and your Lordships may well ask why this should be. Perhaps if I tell you that under existing arrangements it is estimated by expert independent accountants that the cumulative deficit at the end of the period 1971 will be £200,000, you may realise why the General Medical Council must seek to improve its financial arrangements. Briefly, the history is that between the first Medical Act, that of 1858, and 1950 the registration fee—there was a single initial registration fee—was £5, and it did not vary during that period. Before 1950 the Council was showing a deficit, and then came the Medical Act of 1950 which changed the method of registration and also enabled the General Medical Council to charge a provisional registration fee and a full registration fee, at first five guineas and six guineas respectively.
About that time the number of Commonwealth and foreign practitioners who registered in this country increased, and they provided a significant income for the General Medical Council which met what would otherwise have been a deficit. But shortly after that, certainly in 1962, there had been a significant decrease, for reasons into which I need not enter, when Commonwealth and foreign practitioner registrations declined. So once again the Council was significantly in deficit. The Privy Council was approached and agreed to increase the registration fees to a maximum of £9 for the provisional registration and £11 to £12 for the full registration. At first we did not charge that amount, but later we had to go to the full extent of the Privy Council's permission. From January, 1965, we have had to charge £9 and £12 respectively.
The reasons for this increased expenditure of the Council are certain common

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ones, such as an increase in staff and increasing salaries, arrangements for superannuation and so forth. But there have been three or four major pieces of expenditure. It has become necessary to computerise the Medical Register because no printer would retain the amount of type necessary to print it each year. It was an enormous bulk, and the printers said that this was not possible. Computerisation has cost us about £40,000. We have had to renew the lease on our premises at 44 Hallam Street, which has also cost us a large sum of money, and we have had to extend our premises to meet the increase in work. This, too, is costly.
We decided that the single initial registration fee could not possibly meet this increasing expenditure of the Council. Moreover, as the noble Baroness has said, it was clearly inequitable to put the total cost of the work of the Council on the newly qualified practitioners, at present paying £21 which might have to be increased to £30 or £40, or even more. We therefore decided to follow the practice that is followed by practically all other professional registration bodies in this country—by the dentists, the vets, the opticians, the professions supplementary to medicine—and by Medical Councils and similar bodies in the Commonwealth; that is, to charge an annual retention fee. We had to decide and here we sought expert advice—how this should be done and who among the doctors should pay. After examining various schemes the experts advised that we should charge a much smaller initial registration fee, perhaps half of our present registration fee, and that we should have a small annual retention fee. Perhaps it is unwise to state an amount, but I will chance saying "somewhere between £2 and £3". That, of course, will be a taxable expense. We should decide whether certain doctors should be exempt; otherwise all doctors on the register would be expected to pay the annual retention fee. The exemptions would include, for example, those over the age of 65, those who through ill-health had retired from practice and those who are resident overseas.
Whatever regulations we make must be approved by the Privy Council. There is that safeguard. I am glad to say that the British Medical Association have
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approved in principle of annual retention fees. They too would like to ensure that there are safeguards about removal from the Register of a practitioner for default of payment and also about the amount that is to be charged.
One matter with which the noble Baroness did not deal is the provision in Clause 11 which enables the Council to register additional qualifications. At present qualifications additional to a primary qualification which the Council may register are included in the Schedule 3 to the 1956 Act. This Schedule is archaic and very restrictive. The result is that we cannot register such well-deserved qualifications as membership or fellowship of the Royal College of Obstetricians and Gynæcologists, the Royal College of General Practitioners, the College of Pathologists, fellowship of the Faculty of Radiologists and many university degrees, such as a doctorate of surgery or mastership of radiology, because they are not included in the Schedule, which hamstrings the Council in its registration of additional qualifications.
What we are seeking under Clause 11 is that the Council should determine which additional qualifications are worthy of registration, so that the list will be added to from time to time, as the Council thinks appropriate. I may say that there is an inconsistency about the register of additional qualifications in the United Kingdom and Eire, inasmuch as we are already empowered to register additional qualifications granted in Commonwealth and foreign countries with which we have reciprocity. Clause 11 will put the matter right.
With regard to discipline, perhaps I should mention that one of the hampering factors will be removed by Clause 13(1) of this Bill. Hitherto, we have been able to accept as proof of a charge alleged against a practitioner a conviction in the United Kingdom or in Eire, but not a conviction in the Channel Islands or in the Isle of Man. Clause 13(1) enables us to do this.
With regard to suspension, the noble Baroness said that at the moment we have power simply to erase. It is true that since 1894 we have on occasion postponed judgment where we have found the facts proved against a practitioner in a

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case of misconduct or where he has been convicted of an offence. We postpone judgment in order that we may see how he behaves during the period of postponement, and we require references from professional brethren and other persons of repute at the end of that period to be given confidentially to the Council. In many ways this can prove unsatisfactory. We believe that if we have the power to suspend it will enable us to deal much more satisfactorily with certain types of case.
I might interpolate here that the power to suspend is already present in similar Acts in New South Wales, South Australia, Queensland, Victoria, New Zealand, Ontario, and South Africa. It is no new method of dealing with misconduct; and, of course, it is used in this country by the Law Society, by the Architects Registration Council, the Royal College of Veterinary Surgeons, the Central Midwives Board and the Institute of Chartered Accountants. It is interesting that in a judicial decision in 1964 their Lordships commented on the fact that we had no other form of punishment (that is the word they used) such as reprimand or suspension.
I should perhaps say that we in the Council do not regard our function as punishing a doctor. It is true that indirectly he is punished if he is prevented from carrying on his practice, but there is no element of retribution about the decisions taken by the General Medical Council. Their purpose is primarily to protect the public. They sometimes have in mind, also, that their decisions might act as a deterrent to other doctors.
We believe that in certain types of case suspension is less desirable. For example, in cases in which it is proved that a doctor is a chronic alcoholic, and that this has interfered with his conduct in practice, or that he is a drug addict, it is clearly undesirable that we should postpone judgment and hope that in the period of postponement he will improve, because he can still carry on as a registered practitioner during the period of postponed judgment. If we had the power to suspend that doctor for a period not exceeding 12 months we could make it a condition that before he reappeared at the end of his suspension he should have
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undergone a course of treatment; and that when he comes back to us we should be able to say that it has been shown to us that he is now fit to resume practice.
There is another type of case in which we think that suspension might be helpful (and these are simply examples), and that is the case of adultery with a patient. It is clearly a gross breach of professional privilege where a doctor enters the family, has access to a member of that family because he is a doctor, and abuses that privilege. Clearly some degree of punishment in the sense in which I have mentioned it should be meted out to him. But we find that there are in many instances very strong mitigating circumstances. We still feel that some action should be taken in such a case. For example, if we suspend him for a period of 12 months, he will have suffered loss, but he knows that at the end of 12 months he will be able to return to his practice. In other words, he can plan his future. There are of course cases of adultery with a patient—for example a doctor who commits adultery with the mother, who is a patient, for a period of, say, two years, and then, tiring of her, begins to commit adultery with the daughter, who is also a patient. Perhaps multiple adultery of that kind merits the ultimate sanction, which is that of erasure.
The noble Baroness and the noble Lord, Lord Newton, have made it clear why they support immediate suspension in certain cases. If the public is to be protected (and here again it is not only in the case of drugs; it arises also in the case of serious drunkenness or serious drug addiction), to leave the doctor on the Register for a day longer than he need be left may be injurious to the public safety. One of our difficulties in the past has been that the doctor has 28 days in which to appeal, and he remains on the Register during that period. As some of your Lordships will know, the Judicial Committee of the Privy Council does not move with undue haste, and if he decides to appeal the shortest time in which an appeal has been heard has been five months after the appeal has been lodged, and it has been as long as 11½ months. In the case of Doctor Petro it was five months, and in that case there were certain special circumstances. But he was allowed to continue his dissemination

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of drugs for a period of six months after the General Medical Council had directed that his name should be erased from the Register. If we have the power of immediate suspension, the erasure will become active forthwith.
Clearly, the man should have a right of appeal and, as you will see, the Bill provides that if he is registered in this country he has an appeal to the High Court of Justice; if he is registered in Scotland, the appeal is to the Court of Session; and if he is registered in Northern Ireland it is to the High Court of Justice there. I am sorry that the noble Lord, Lord Newton, is disappointed about our having changed the phrase, "infamous conduct in any professional respect". That was introduced in the 1858 Act—I think it was Section 29. "Infamy" is a very strong word; it involves perhaps a stronger degree of ill-fame than we wish to suggest. It is archaic; it is doubtless in Lord Newton's mind suitable for the declamatory rhetoric of a Burke, a Disraeli or a Gladstone. But we do not really think that it is appropriate now.
Distinguished judges have explained what is meant by the phrase. Lord Justice Lopes, as long ago as 1894, said this:
"If a medical man in the pursuit of his profession has done something with regard to it which will be reasonably regarded as disgraceful or dishonourable by his professional brethren of good repute and competency, then it is open to the General Medical Council, if that he shown, to say that he has been guilty of infamous conduct in a professional respect."
Another eminent judge stated that the phrase means:
"No more than serious misconduct judged according to the rules, written and unwritten, governing the profession."
The fact is that on several occasions (I think on 34 occasions in the past 15 years or so) the Disciplinary Committee has found a doctor guilty of infamous conduct, and has then proceeded to allow his name to remain on the Register. And there is surely a conflict between a finding of infamous conduct and allowing the name to remain on the Register. After all, infamy should deserve a worse fate.
The phrase "infamous conduct" has in fact been dropped by most of the professional bodies concerned with discipline,
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and it is for that reason that we have agreed that in the Bill the phrase "serious professional misconduct" should substituted for "infamous conduct in a professional respect". I would emphasise that this change of phrase does not in any way alter the scope of the jurisdiction of the Disciplinary Committee: it will neither enlarge nor contract that scope.
There are other proposals or provisions in the Bill which are of great importance, but they do not justify my detaining your Lordships at this late hour to discuss them further. There are a few anomalies which are removed by the Bill; there are important provisions making it a statutory right for the General Medical Council to borrow money should if have need of it; and there are provisions in relation to the recognition of qualifications of new universities which previously required an Act of Parliament but now would simply require the recommendation of the Council, to be approved by the Privy Council.
My Lords, the Bill is a very valuable Bill. It is, as it were, the first of a series of Bills which are likely to be presented to your Lordships' House dealing with medical education. I should like to express my personal and the Council's very warm gratitude to the Government for the way in which they have presented this Bill, and the very kindly support they have all given it. I am most grateful to them.
9.57 p.m.
BARONESS SEROTA: My Lords, I am sure that the whole House would wish me to express gratitude to the noble Lord. Lord Cohen of Birkenhead, for putting the flesh on the bones of this Bill. It would indeed be presumptuous of me at this late hour to add more. I would merely thank both him and the noble Lord, Lord Newton, for their welcome to this Bill. I hope the noble Lord gets over his regrets about the change of name—I am sure he will—and I look forward to the next stages of the Bill as it makes a very rapid passage through the House, in view of the welcome it has received from all sides to-night.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

WORCESTERSHIRE COUNTY COUNCIL BILL [H.L.]
The CHAIRMAN OF COMMITTEES informed the House that the opposition to the Bill was withdrawn; the Order made on February 25 last discharged, and Bill committed to the Committee on Unopposed Bills.
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